Strengthening low-carbon, climate-resilient and inclusive development in the Yojoa Lake Watershed

The Lake Yojoa and El Cajón watersheds are critical for the sustainable development of Honduras due to their contribution in terms of water resources, hydroelectric generation, livelihoods, and biodiversity. Despite their importance, there is an undergoing process of accelerated degradation, particularly due to the loss of forest cover and unsustainable production practices. Furthermore, this degradation is exacerbated by the impacts of climate change, affecting hydroelectric generation, and livelihoods in the area where agriculture is the primary source of income. Yet, agriculture is characterized by low yields and profitability due to degraded soils and limited implementation of sustainable and resilient agricultural technologies given the low access to information, lack of technical assistance, financial resources, and seed capital. These inadequate agricultural practices also further favor erosion, highlighting the need to implement a comprehensive watershed management strategy that incorporates agricultural and forestry aspects.

The project aims to support Micro, Small, and Medium-Sized Enterprises (MSMEs), main source of employment in Honduras and significant actors in the area, in the implementation of sustainable practices with a comprehensive approach that considers the nexus between forest cover, biodiversity, water security, energy generation, and the needs of people and enterprises that depend on these natural resources.

The project directly contributes to the implementation of the Global Gateway flagship initiative for Honduras for the recovery of the Lake Yojoa basin.

The EU contribution expands the scope of an IDB-pilot project, scaling up actions and areas covered. The project is divided into two components:

• Resiliency in MSMEs. This component strengthens climate resilience and sustainability of MSMEs through the provision of technical assistance, and non-reimbursable in kind support for the adoption of climate-smart or agroecological technologies and practices such as agroforestry, integrated landscape management, efficient use of inputs, selection of varieties, energy management, reductions of food losses and waste, and sustainable supply chains. These technologies also contribute to food security, better response to climate change impacts, and mitigation of GHG emissions.
• Nature-based solutions for forest cover and soil restoration. This component provides technical assistance and direct non-reimbursable support to adopt green technologies or practices by key stakeholders. Participation, empowerment and ownership of local actors are key elements in the design, implementation and sustainability of the activities, thus an in kind and/or in cash contribution from beneficiaries is required.