The largest private water donation in Australian history could help restore wetlands in the Murray-Darling Basin thanks to a new financial model benefiting investors, farmers, First Nations people and the environment.
The Australian natural capital investment company, Kilter Rural, has announced it will donate 5.4 gigalitres of water to 21 wetlands covering approximately 1,600 hectares in the southern Murray-Darling Basin next financial year – in addition to 3.8 gigalitres donated this financial year.
The environmental water is being bought through Kilter’s $85m Murray-Darling Basin Balanced Water Fund and delivered through the company’s partnership with The Nature Conservancy (TNC), the Murray Darling Wetlands Working Group (MDWWG) and four First Nations communities.
Prof Sue Jackson, of the Australian Rivers Institute at Griffith University, says the donation was significant because “most of the environmental watering that goes on in the Murray-Darling Basin is done by government environmental water managers … so this brings another set of players from the private sector into the restoration of rural landscapes”.
Jackson says it provided a progressive social impact model of investment for people that wanted to see environmental as well as economic gains.
Euan Friday, the chief investment officer at Kilter Rural, says “this is the largest voluntary private donation of water to threatened wetlands in history and it has been made while delivering exceptional returns to investors”.
The Kilter Balanced Water Fund delivered 19.4% to investors in the past 12 months and has delivered an annualised 14.1% since inception, according to Friday.
The company generates income by renting the permanent water entitlements they own and a portion of the profit that is made on the water trades is then used to buy water for the environment.
Friday says they developed the model with TNC, who suggested water donations be made on a countercyclical basis, meaning they can make “bigger donations when it’s wet because … the allocation price is low and therefore the opportunity cost is low”.
The fund has been donating water since 2015 but, off the back of an abundance of water in the system, is set to make its biggest donation.
Dr James Fitzsimons, the director of conservation and science at TNC, says “the way that fund works is it sort of mimics the natural flows in the Murray-Darling Basin – the basin’s renowned for its boom and bust cycles for climate and water”.
“In dry times, less water gets delivered to the environment and more is made available back on to the market for farmers and irrigators to purchase,” Fitzsimons says.
“And then wetter times a larger donation to the environment is made. And that might seem counterintuitive, but there are many wetlands that actually don’t receive water in very wet years. They might be disconnected from the floodplain, they might not have the connections to the river system that they did in the past.”
Fitzsimons says the donations have targeted wetlands systems typically on private land that wouldn’t otherwise get water under watering regimes from the federal or state governments.
Dr Deborah Nias, the CEO of the Murray Darling Wetlands Working Group (MDWWG), says her organisation identifies and assess the wetlands to be receiving water , apply the water into the sites, conduct monitoring and build up the groundwork for ongoing support into future.
Inundations of wetland areas to date have provided critical habitat for water birds, with monitoring already showing an increase in bird diversity of up to 212% and an increase in bird abundance of 282%.
The donation is also supporting the return of endangered species to the wetlands, including the southern bell frog, eastern regent parrot and Murray hardyhead fish.
Four First Nations communities have also gained access to water for their traditional lands under the program, and been part of monitoring efforts, as well as the discussions around which culturally significant tree and animal species the MDWWG should work to protect.
Malcolm King, a Barkandji man and senior ranger with the Barkindji Maraura Elders Environment Team, has seen water returned to the creek running into Fletchers lake thanks to the donation.
King says the land is sacred with burials, scar trees, ancient fireplaces and shell middens. However, the plant and animal life integral to these sacred spaces, including the Barkandji’s totem species the wedge-tailed eagle, had been struggling due to the water drying up too quickly.
Now, the water allocation King has overseen has meant there has been enough moisture to regenerate species like the River Cooba tree, while elders have reported seeing species of ducks that had not been seen in over 50 years.
King says the donation is “very important to us. Water revives the country, it revives life around the natural creek, the natural waterways, the natural swamps.”
In addition to the Barkindji Maraura Elders Environment Team, Nias says the Nari Nari Tribal Council, the Barkandji Native Title Group Aboriginal Corporation and the Yarkuwa Indigenous Knowledge Centre have also collaborated with the wetlands working group.
The Murray Darling’s Bigger Picture
The environmental water donated by Kilter Rural is additional to the environmental water targets of the Murray Darling Basin Plan.
As Nias puts it, “we’re not trying to do government’s job for it, we were adding to the outcomes that the Basin Plan will achieve.”
David Papps, the former commonwealth environmental holder, says while the donation is very positive, it won’t help the Murray Darling Basin Plan reach the target of 450 GL water saved for the environment by 2024, which the authority has warned for years is lagging behind schedule.
Christine Freak, the policy manager at the NSW Irrigators’ Council, has highlighted that irrigation bodies such as Coleambally Irrigation and Renmark Irrigation Trust are working with government to deliver environmental water, as part of a paradigm shift she says is moving beyond the “toxic and divisive water policy debate”.
Freak says “with the world population forecast to reach 9 billion by 2050, it is critical that we have food systems integrated with environmental management, and not think they have to be mutually exclusive.”
“The policies which pit irrigators against the environment … in a false dichotomy are in no one’s interest,” she says.
“We hope government can see the paradigm has shifted, and have the leadership to move forward, working with farmers and basin communities to look after our environments together.”
The new Labor government has committed to implement the plan in full, with five measures to achieve this.
However, Papps says “it’s going to have to be a remarkable change from what we’ve seen under the Coalition government for the past few years.”
Nias says she believes the value of the private water donation goes beyond ecological benefits and investor return.
“I think the value of what we’re doing here is demonstrating that agriculture, environmental water, First Nations, people, landholders, business, we can all work together.
“And we can work together in a way that helps everybody get positive outcomes. And it doesn’t have to be a bitter argument, it can be done in a collaborative fashion,” Nias says.