The Rupa Lake Fisheries and Rehabilitation Cooperative in Nepal is involved in an PES scheme to reduce sedimentation and pollution of the lake and its wetlands, improve the water quality, increase fish production and generate alternative income. The Cooperative makes direct and indirect payments to different upstream groups (community forestry groups, schools and communities) for watershed management activities. Communities adopted agroforesty, organic farming, build check dams and use bioengineering for flood and landslide control, engage in alternative income activities such as bee keeping and goat rearing. It has benefited 5.000 households and improved their socio-economic status since 2006. The payments to the cooperative are reported to be voluntary. The PES scheme seems to be a successful example of PES scheme.