Integrating a watershed management scheme into to the Regeneration of Landscapes and Livelihoods Project (ROLL)


Lesotho is a critical water tower for the water-scarce Southern Africa region. The rainfall in the country is essential for millions of people living in the Orange River Basin, spanning Lesotho, South Africa, Botswana and Namibia.


This source is however under threat, as poor land management in the mountains of Lesotho is causing an estimated 2% loss of topsoil per year, siltation of reservoirs and eventually reduced water provision. This affects downstream water users and Lesotho’s revenue from water sales to South Africa. Moreover, it critically endangers the 66% of Lesotho households who depend on the degraded lands, the majority of whom are living below the national poverty line.


The CompensACTION pilot is embedded in the ongoing ROLL project by IFAD, which became effective in December 2021 and started its operation in June 2022. The ROLL project aims to ensure that rural communities adopt transformational practices for regenerated landscapes and sustainable livelihoods. It features a Regeneration Coalition Facility, aiming to support the setting up of local multi-stakeholder initiatives, as well as a Regeneration Opportunities Fund (ROF), which can invest in activities proposed by the coalitions and that have good returns on water-related ecosystem services.

The CompensACTION pilot strengthens the PES aspects of this Regeneration Opportunities Fund, by:

  1. Expanding the scope to identify and reward relevant ecosystem services, particularly regarding water efficiency and carbon avoidance and sequestration, using innovative carbon financing mechanisms currently under development in the market (jurisdictional and/or outcome-based schemes)
  2. Supporting the engagement of international experts in the development process and knowledge exchange
  3. Building a connection with supply chain sustainability and carbon in-setting focused on the Wool & Mohair value chain; and
    testing the approach in selected landscapes.

Estimated Impact

Activities financed under the CompensACTION Pilot are estimated to reach about 8 000 households equivalent to 40000 individuals – and estimate 15% increase to the initial outreach target of Lesotho ROLL – through public work and support to five local level innovations through small grants.

household reached through compenACTION
at least
increase to initial outreach target


The ROF is designed to be self-supporting beyond the lifetime of the ROLL project (2022 – 2029). With the substantial ecosystem services to be created through the Fund, and the transparent PES mechanism embedded in it, the Fund is expected to attract further investments from both downstream water users as well the carbon markets. The scale of the scheme will allow to retain a small team managing the Fund and ensuring transparency and accountability.

How To Get Involved?

CompensACTION is an open space to collaborate on the implementation of projects and to provide exchange on compensation mechanisms. If you are interested to connect, please contact us at