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Natural Infrastructure for Aquifer Recharge Financial Calculator: Method, Data and Assumptions

The Natural Infrastructure for Aquifer Recharge Financial Calculator, is an excel based tool with a flexible financial model that estimates the private costs and benefits, including the return on investment (ROI), of natural infrastructure interventions designed to enhance aquifer recharge. This calculator was designed to help water-sector decision-makers of Nuevo León and the Monterrey Metropolitan Water Fund (Fondo de Agua Metropolitano de Monterrey) better understand the role that natural infrastructure can play in water security. Its flexible design also has the potential to produce similar assessments for other territories in the future. The calculator can perform several functions:

  • Communicate to policymakers and water-sector decision-makers the benefits that natural infrastructure can have for aquifer recharge, which is a key element of water security. The calculator translates aquifer recharge impacts into easy-to-understand financial terms to evaluate its related ROI.
  • Improve natural infrastructure program design. It provides an analytical framework to determine the ideal type and scale of intervention and to estimate the necessary amount of funding to implement different natural infrastructure strategies.
  • Identify key data gaps and sources of uncertainty (e.g., data, scientific and behavioral uncertainty) that would have an impact over the business case, and which should be addressed in the program’s design process.

This calculator is currently a prototype, as the local data required for its validation is not available. Due to these data gaps, this prototype should mainly be used to demonstrate a process and raise awareness among water stakeholders about the potential role of natural infrastructure; it may also help prioritize research efforts to address decision-relevant data gaps. It should not be used as a stand-alone tool for making investment-related decisions. To compensate for the uncertainties, the tool provides users the flexibility to test a wide range of hypothetical scenarios using informed assumptions from local experts, the calculator is also able to accommodate customized parameters and local data inputs, which can be easily updated as new information becomes available.

Executive Summary

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