On 4th February, the Payment of Ecosystem Services (PES) Agreement Signing Ceremony for the Omchhu Watershed, between Phuntsholing Thromde and Communities of Phuntsholing gewog, was successfully held at the Royal Institute of Governance and Strategic Studies, bringing together community members, government representatives, development partners, and stakeholders to mark a significant step toward sustainable environmental stewardship in southwestern Bhutan.
The programme was graciously attended by Gyalyum Dorji Wangmo Wangchuck, Founding President of the Tarayana Foundation. Her Majesty’s presence added profound significance to the occasion and underscored the importance of collective action in safeguarding Bhutan’s natural heritage.
The ceremony included insightful technical presentations that highlighted the importance of protecting the Omchhu Watershed and strengthening cooperation between upstream and downstream communities.
The highlight of the event, the historic signing of the PES Agreement, symbolizes a shared commitment between upstream service providers and downstream beneficiaries to protect the watershed’s vital ecosystem services. The agreement establishes a framework where communities protecting forests, water sources, and landscapes receive financial incentives for their stewardship.
A joyful moment during the programme was the cake-cutting ceremony celebrating Her Majesty Gyalyum Dorji Wangmo Wangchuck for receiving the 22nd Soldier of Humanity Award (2025), in recognition of her extraordinary and lifelong humanitarian service. The celebration reflected the deep appreciation for Her Majesty’s continued leadership in community development and environmental conservation.
In her remarks, Her Majesty emphasized the importance of collaborative and exemplary efforts in protecting ecosystems while strengthening community livelihoods, highlighting how community participation is central to sustainable development in Bhutan.
Understanding Payment of Ecosystem Services (PES)
Payment of Ecosystem Services (PES) is a sustainable, long-term financing mechanism that supports environmental conservation by recognizing the value of nature’s services such as clean water, healthy forests, and resilient ecosystems. Through PES, those who benefit from these services contribute financially to the communities that actively protect and manage these natural resources.
In the case of the Omchhu Watershed, the PES mechanism establishes a partnership between upstream service providers and downstream beneficiaries, ensuring that conservation efforts are both inclusive and sustainable.
The upstream service providers include communities from:
- Wangdigatshel–Dophugchen Chiwog – 111 households
- Deling–Marpji Chiwog – 115 households
These communities play a critical role in protecting the watershed through responsible land use, forest conservation, and sustainable practices.
Beneficiaries and Contributions
The initiative is expected to directly benefit approximately 9,304 residents in the core Omchhu watershed area, as well as surrounding communities. In addition, residents of Phuentsholing Thromde, with a population of more than 27,658 people (15,052 male and 12,606 female),(Bhutan: Climate-Resilient Omchhu River Basin Project) will also benefit from the continued protection of clean water and healthy ecosystems.
Under the PES mechanism, a small contribution equivalent to 5% from the monthly water tariff of 1,775 meters will be collected as a payment for ecosystem services. This contribution will support conservation efforts undertaken by upstream communities, creating a shared responsibility between those who benefit from ecosystem services and those who protect them.
Building the PES Framework
The signing of the PES Agreement is the result of an extensive and participatory process involving communities and stakeholders. Key steps included:
- Preliminary assessments conducted within the Omchhu Watershed
- Awareness and sensitization sessions with communities and stakeholders on the concept of PES
- Outreach during World Water Week (August 2024) to build understanding among stakeholders
- Detailed consultations with communities in Wangdigatshel–Dophugchen Chiwog and Deling–Marpji Chiwog
- A series of discussions with communities and stakeholders to gauge willingness to establish a PES scheme
- Field visits to support the development of an intervention plan
- Drafting and presenting the PES Agreement to stakeholders
- Final review of the agreement and establishment of the PES committee
This participatory process ensured that community voices, local priorities, and conservation goals were aligned before the agreement was finalized.
Towards a Resilient and Sustainable Future
The PES agreement represents a proud and inspiring step toward community-led conservation in Bhutan. By linking environmental protection with livelihood opportunities, the initiative strengthens both ecosystem resilience and community wellbeing.
The programme is part of the project “Living Landscape: Securing High Conservation Values in South Western Bhutan,” funded by the Federal Ministry for the Environment, Climate Action, Nature Conservation and Nuclear Safety through the International Climate Initiative.
As communities come together to protect the Omchhu Watershed, this initiative stands as a powerful example of how collective stewardship, sustainable financing, and community leadership can safeguard Bhutan’s natural resources for generations to come.