TABLE OF CONTENTS:

PART I - PROJECT CONCEPT. 3

A – SUMMARY.. 3

B - COUNTRY OWNERSHIP. 6

1. COUNTRY ELIGIBILITY.. 6

2. COUNTRY DRIVENNESS. 6

C – PROGRAM AND POLICY CONFORMITY.. 7

1. PROGRAM DESIGNATION AND CONFORMITY.. 7

2. PROJECT DESIGN.. 8

3. SUSTAINABILITY (INCLUDING FINANCIAL SUSTAINABILITY) 10

4. REPLICABILITY.. 10

5. STAKEHOLDER INVOLVEMENT/INTENDED BENEFICIARIES. 11

D - FINANCING.. 11

1. FINANCING PLAN.. 11

2. CO-FINANCING.. 11

E - INSTITUTIONAL COORDINATION AND SUPPORT.. 11

1. CORE COMMITMENTS AND LINKAGES. 12

2. CONSULTATION, COORDINATION AND COLLABORATION BETWEEN AND AMONG IMPLEMENTING AGENCIES, EXECUTING AGENCIES, AND THE GEF SECRETARIAT, IF APPROPRIATE. 13

3. IMPLEMENTATION/EXECUTION ARRANGEMENTS. 13

PART II - PROJECT DEVELOPMENT PREPARATION.. 14

A - DESCRIPTION OF PROPOSED PDF ACTIVITIES. 14

B - PDF BLOCK B (OR C) OUTPUTS. 20

C - JUSTIFICATION.. 22

D – TIMETABLE.. 22

E – BUDGET.. 22

PART III – RESPONSE TO REVIEWS. 24

A - CONVENTION SECRETARIAT.. 24

B - OTHER IAS AND RELEVANT EXAS. 25

ANNEXES. 27

PART I - PROJECT CONCEPT

A – SUMMARY

Brief Description

The Kura-Aras river system is a principal source of water for industry, agriculture, residential uses and energy in Armenia, Azerbaijan and Georgia, Islamic Republic of Iran and Turkey. The rivers are important to regional cooperation as they cross and form many of the borders. Both rivers are seriously degraded in places. Water quality is impaired by the dumping of untreated municipal, industrial, medical and agricultural wastes, and by high sedimentation loads resulting from upstream deforestation. Water quantity is constrained by use of water for agricultural and hydropower purposes, which impacts upon the river ecosystem in places.

Integrated, inter-country efforts are urgently required to evaluate the degree of ongoing degradation of these river ecosystems and to take action to halt and reverse damaging trends where necessary. The proposed project aims to ensure that the quality and quantity of the water throughout the Kura-Aras river system meets the short and long-term needs of the ecosystem and the communities relying upon the ecosystem. The project will achieve its objectives by: fostering regional cooperation; increasing capacity to address water quality and quantity problems; demonstrating water quality/quantity improvements; initiating required policy and legal reforms; identifying and preparing priority investments and; developing sustainable management and financial arrangements.

The Regional Environmental Governance Programme of the UNDP Regional Support Centre for Europe and CIS, based in Bratislava, will: establish an NGO forum and support an inaugural meeting; support development of a public involvement plan, including pilot projects, for inclusion in the full GEF project and ensure public involvement in the design of the demonstration projects; and create and support a regional stakeholder group to provide input into the TDA-SAP process.

Project rationale:

The Kura-Aras river system is an internationally significant river system, which is seriously degraded and threatened in different places. Water scarcity is an issue at many points in the region. Water quality and quantity constraints may increasingly lead to disputes amongst water users over the coming years. Integrated, multi-country, trans-boundary responses are necessary to address the threats to the river system, and their underlying causes.

Geographical Description

The Kura River originates in the Kizil-Giadik mountain range in Ardahan province in Northeast Turkey. It winds its way through regions in Turkey, Georgia and Azerbaijan into the Caspian Sea. Tributaries flow northwards from Armenia and join the Kura in Georgia and Azerbaijan. The Aras river originates in Erzurum province in eastern Turkey. It flows along the Turkey-Armenia border, along the Iran-Armenia border, along the Iran-Azerbaijan border, before flowing into Azerbaijan where it joins the Kura near the Caspian. Many tributaries from Armenia and Iran flow into the Aras. The map in Annex 5 provides an illustration of the region. This region is largely mountainous – with the exception of the flat delta areas in Azerbaijan - and is home to approximately 7 million people.

The region is of global ecological interest. For example, Conservation International (CI) has identified the South Caucasus - an area corresponding closely to the Kura-Aras river basin - as being one of the world’s top 25 biodiversity hotspots. Notably, the Aras is home to one of the last natural sturgeon breeding grounds; there are important and unique dry-land riparian forests along the Kura; and the Kura delta where the river flow into Caspian contains many important wetland sites.

General Status of the Waters

Human activities in the second half of the twentieth century had a profound effect on the quality and quantity of the water in the rivers. A range of factors, including pollution from industry, municipal wastewater discharges, domestic solid waste, agricultural pesticides, large-scale irrigation/flood control/hydropower schemes and watershed degradation have all contributed to a reduction in water quality and quantity. All countries have contributed to this situation. However, many countries in the region experienced a significant economic decline in the 1990s, and the threats to water quality have decreased in some parts of the river. In the future, however, as the economies in the region recover, and as some industrial activities are restored, the most likely scenario is that these threats will grow again. Water quantity problems have generally become more problematic in the past decades, with increasing droughts and floods, possibly linked to climate change, which water management strategies have thus far failed to address. A good example of how inadequate management knowledge can cause irreversible damage to the ecosystem is the disappearance of the Tugai forest in Azerbaijan.

The further downstream one goes, the greater the water quantity challenges become with increasing demands for water for irrigation and industry and a corresponding decline in water quality. This downstream progression is due to the increasing levels and accumulation of critical pollutants such as pesticides, the increasing demands for water, and the natural aridity of the downstream areas. The Kura-Aras Rivers also have a significant impact on the Caspian Sea environment being the second contributory basin, providing approximately 10% of the total inflow.

Objectives and expected outcomes:

The overall long-term objective of this proposed project is to ensure that the quality and quantity of the water throughout the Kura-Aras river system meets the short and long-term requirements for optimum ecosystem function as well as the needs of the communities using the river. A subsidiary objective is to reduce the contaminant load into the Caspian Sea and improve its water quality.

In targeting this objective, the project will adhere to the following guiding principles agreed at the Johannesburg summit:

· Human beings are at the centre of concerns for sustainable development.
They are entitled to a healthy and productive life in harmony with nature;

· Environmental protection constitutes an integral part of the development
process and cannot be considered in isolation from it;

· The right to development must be fulfilled so as to equitably meet
developmental and environmental needs of present and future generations.

To achieve the overall objective, the immediate objectives are: to foster regional cooperation for river basin management, including information exchange; to increase national and regional capacities with reghard to IWRM in addressing water quality and quantity problems; to make key improvements to water quality/quantity at specific points on the river; to assist development of sustainable financial and institutional coordination arrangements for the management and protection of the river basin; and to promote appropriate reforms to economic sectors causing pollution, water shortages and habitat degradation. The focus will be on trans-boundary issues.

During the PDF B phase, the proposed project will prepare a Transboundary Diagnostic Analysis (TDA) and a draft Strategic Action Programme (SAP). The SAP will provide a solid framework for a long-term, regional, fully integrated and comprehensive approach to management of the Kura-Aras Rivers. Following on from this, the full project will support SAP implementation through a series of policy, institutional and legislative reforms at regional and national level, taking account of existing agreements, as well as lending incremental support to key, on-the-ground, pilot projects within the SAP. Regional management mechanisms will be operationalized, and management tools developed. Priority soft and hard investments will be designed and implemented with some incremental investments supported by the full GEF project. Sustainable financial and institutional arrangements for coordination of long-term management of the rivers will be established and the mobilisation of public and private sector funding will be sought to implement the SAP. Reforms will be initiated in key polluting or withdrawing sectors. It is noted that a number of countries, including Georgia, are committed to approximation or harmonisation of their environmental legislation with that of the EU and that this should provide considerable impetus for implementation of the SAP.

The proposed GEF project will build on the findings, information, capacity development and institutional setting of other internationally-supported projects in the region, specifically the USAID-funded project on Sustainable Management of Water Resources in the Caucasus, the EU project on monitoring the Kura river basin (the TACIS Joint River Management Project) and the German supported Eco-Regional Planning project. The project will benefit from the experience and lessons learnt during execution of these projects in the region, particularly the USAID and Tacis projects. During the PDF-B stage, the project will try to systematically record favoring factors and barriers, respectively, with regard to cooperation among stakeholders within and across country borders. Initial information on these and other related projects is provided in Annex 6 (please note that this list is not exhaustive).

Planned activities to achieve outcomes:

The following provides a list of indicative activities. All of these are subject to verification during the PDF-B phase. Some of the activities listed below (indicated ‘PDF’) will start, and may even be completed, during the PDF-B phase. Co-financed activities are indicated with ‘*’.

Indicative regional level activities:

· Undertake a trans-boundary diagnostic analysis (TDA) and prepare the draft SAP*. Financing mechanisms for implementation of the SAP will be identified (PDF);

· Appraise and approve the SAP at senior government level (PDF)

· Carry out a Stakeholder Analysis, develop a stakeholder involvement plan, and establish a Stakeholder Group to support the TDA-SAP process (PDF)

· Prepare annual SAP implementation plans, including financing plan;

· Secure approval of the annual plans, and secure full budget for their implementation;

· Prepare feasibility studies to address one priority, cross-border, demonstration activity in each country (PDF)*;

· Review options (PDF) and establish an inter-governmental mechanism for coordination and monitoring of SAP implementation*;

· Establish and inaugural meeting of a regional NGO forum (PDF);

· Carry out training activities to strengthen the capacity with regard to IWRM (integrated water resource management) in the region (PDF)*; TDA/SAP course is first priority; in-depth capacity building should probably wait until FP.

· Implement regional workshops to bring all the stakeholders together and to facilitate concerted action (PDF)

· Establish communication and information technology systems, including mechanisms to disseminate and replicate project outcomes;*

· Implement soft elements of the SAP, including monitoring, training, building data-bases, establishing resource centre(s), awareness raising, strengthening NGO and NGO networks, strengthening legislation and policies, market based incentive development and revenue generation activities

At a national level:

· Prepare and appraise annual, national SAP implementation plans (PDF)*;

· Establish inter-ministerial committees;

· Mobilise and coordinate financing, including through regular donor meetings (PDF)*;

· In each country, implement at least one on-the-ground investment to address an urgent cross-border water scarcity or pollution conflict. These will serve as demonstration projects – notably demonstrating cooperation and the effectiveness and viability of financing mechanisms*;

· Carry out awareness raising, training, seminars and conferences (see also UNDP-SIDA component focusing on IWRM);

· Undertake data collection, data base preparation, information management systems*;

· Prepare proposals for legislation and economic incentives to promote sustainable water use behaviour (PDF)*; these would presumably be part of the SAP.

In addition, there may be some country specific or bilateral activities. These are to be identified and developed jointly during the PDF B stage and may include:

· Study of Mingachevir lake quality (Azerbaijan);

· Implement business development activities to overcome barriers to private sector funding;

· Develop a water sharing agreement between Georgia and Azerbaijan; again, sub-set of SAP;

· Establish sub-basin management councils in the Aras basin on the rivers Megri or Agarak, on the border between Armenia and Iran sub-set of SAP

The emphasis will be on promoting broad consultation at both national and regional levels, and on ensuring high quality information collection and analytical work.

B - COUNTRY OWNERSHIP

1. COUNTRY ELIGIBILITY

All countries are eligible for GEF assistance under article 9b of the GEF instrument.

Status of national operational focal point review (dates):

Letters of Endorsement are provided in Annex 4.

2. COUNTRY DRIVENNESS

Project Linkages to National Priorities, Action Plans, and Programs:

Please refer to the attached Concept Paper (Annex 8) for detailed and country specific information related to sections 7 – 12.

Importance of the Rivers to Sustainable Development in the Region

The Kura-Aras river basin covers almost all of Armenia and Azerbaijan, and covers a sizeable part of the populated and urbanized parts of Georgia. These countries rely heavily on the Kura-Aras river system as a principal source of water for all sectors and users: industry, agriculture, energy and residential uses. Although less crucial, at the national level, to Turkey, the basin is important to the livelihoods of sizeable populations in this upstream country. Notably, many of the region’s poorest communities live within the Kura-Aras river basin and depend upon its waters. Finally, the rivers run into and impact the Caspian Sea, affecting the ecosystem and biodiversity of the region, particularly that of Iran and Azerbaijan.

All countries in the region are committed to sustainably managing water resources and this commitment is reflected in national development and environment policies and plans. Moreover, these policies and plans give due emphasis to the management and protection of the Kura and Aras rivers. Each participating country has also established legal and institutional frameworks for managing water resources, the mandates of which cover the Kura-Aras river basin. Finally, each of the countries has a growing non-governmental community to complement the work of governmental organisations in this sector. In general, a willingness to cooperate among stakeholders, as well as their readiness to contribute to, and benefit from the project was found during the PDF-A phase.

Sub-Regional Level Policies and Cooperation

Regional cooperation is a key long-term aim of all participating countries. The Kura and Aras rivers are important to regional cooperation as they cross many borders and constitute lengthy parts of the borders.

Following the break-up of the former Soviet Union, the existing mechanisms for cooperation, joint water management, and information sharing in the region has deteriorated, although there are still a number of bilateral agreements that continue to function, particularly between the Islamic Republic of Iran and its neighbours. In 1997, the Georgian Ministry of Environment, with the support of the EU TACIS Programme, took the initiative to promote cooperation on a range of environmental issues in the region. Bilateral co-operation agreements were developed between Armenia and Georgia and between Azerbaijan and Georgia and were signed in 1998. Since then, there have been a growing number of inter-country initiatives in the environmental field at project, technical and bilateral levels. Despite these agreements and the ongoing projects, political tensions in the region have limited cooperation. The concerned countries are working to address these political issues.

C – PROGRAM AND POLICY CONFORMITY

1. PROGRAM DESIGNATION AND CONFORMITY

The proposed project addresses a transboundary river system and conforms fully to waterbody-based Operational Programme Number 8. The project will play a catalytic role in bringing together four of the five basin countries for the first time in a single intervention. Previous water resource projects funded by USAID, OSCE and Tacis included only the three Caucasus countries, Armenia, Azerbaijan and Georgia, with the Islamic Republic of Iran and Turkey excluded. The Islamic Republic of Iran is participating fully in the GEF project and Turkey has been invited to join the project at anytime during the PDF stage. The importance of the GEF project is recognized by the international community and has already, even at the PDF-B stage, attracted co-funding of nearly $700k from the Swedish International Development Agency (Sida). Other donors (USAID, OSCE and Tacis) have recognized the GEF project as being an important basin-wide environmental initiative and are adjusting their new projects to link up and complement it.

During the PDF-B stage the countries will develop a Strategic Action Programme (SAP) to address priority transboundary problems in the Kura basin, supported by four National Action Plans (NAP) which will serve as the implementation instruments for the SAP at the national level. The SAP will be developed using the standard GEF TDA-SAP methodology for international waters projects and will be carried out in accordance with the best practice guidelines developed under the GEF TrainSeaCoast programme. To maximize co-funding, potential key donors such as WB, EBRD, USAID, Tacis, KfW and OSCE will be invited to participate in the TDA-SAP process and, through a Friends of the Project group, help shape and later support SAP implementation.

The full sized project will assist the countries with the implementation of the agreed SAP. In accordance with the Strategic Priority it will support capacity building in transboundary water resource management, including the encouraging the involvement of civil society, and implement a series of transboundary pilot projects addressing specific water quality and quantity issues in the basin.

2. PROJECT DESIGN

Threats to the Water Environment

Urban and residential threats: A large proportion of the population living in the river basin discharge water and other waste materials directly into the rivers, with almost no treatment. This problem is widespread across the basin, and is most damaging downstream of large urban areas such as Tbilisi and Yerevan.

Industrial threats: The region is relatively industrialized and where industry is still functioning generally relies on old, polluting technology. Contaminated industrial lands, a lasting legacy of Soviet modernization in the region, are highly polluting sources which will remain potent over large time-scales. Industrial pollution crosses all the borders, for example, the Rustavili industrialized region near Tbilisi is a major source of pollution for the Kura River flowing through Georgia to Azerbaijan and is sequestered in the Mingachevir and the upstream Shamkir reservoirs, flow through the latter being controlled to minimize impacts. Mining is a major industry in the upper catchment and heavy metal pollution from tailings is a serious concern in some of the upper tributaries where buffering capacity is minimal. Industry can also be a major user of water an in certain areas cause environmental stress.

Energy-related threats: The basin countries use dams to generate hydropower. These already affect the hydrological regime of the river impacting on water quality and fish migrations, as well as reducing waters in the summer period for downstream users. There are currently plans to increase hydropower generation significantly in the region in the coming years and an increase in mini-hydropower-schemes in Georgia is being investigated as means of addressing that country’s acute power shortages.

Agricultural threats: Poorly maintained and designed irrigation systems in Armenia, Georgia and Azerbaijan have lead to inefficient water usage. Although the scale of irrigation has decreased in the region with the abandonment of pumped systems, agriculture is still a major water consumer in the basin. As these irrigation areas are rehabilitated with the assistance of International Finance Institutions, pressures on the hydraulic environment are expected to increase. There is a need to agree on a balance between the obvious and much needed socio-economic benefits of an improved agricultural sector and the potential damage to the river ecosystem. In the past, agriculture was a major source of pollution, but in recent years the extensive use of fertilizers and pesticides has declined, although there is evidence that certain pesticides are still a major problem in parts of the basin. With the rehabilitation of the irrigation networks and drive for greater efficiency there is reason to believe that unless the appropriate management and controls are put in place pollution from agro-chemicals may again be of concern. Salinization of poorly irrigated land is also a chronic problem in the most arid parts of the basin and many hectares of land have been destroyed in this way.

Land degradation: Deforestation and improper management of upstream watersheds bring about rapid run off during the spring thaw and downstream flooding. High sediment loads cause increased rates of reservoir siltation and smothering of fish spawning sites.

Detailed reports of the transboundary issues from the four participating countries are contained in annex 9.

Underlying Causes

The above threats to water environment have many underlying causes, including:

At the regional level:

· Government and non-governmental agencies involved in water resource management do not coordinate closely with counterpart agencies in other countries;

· There is little incentive to maintain agreed or adequate water quality standards and quantity levels leaving the country;

· Private sector activities are not coordinated across borders and do not necessarily respect the plans, standards and legislation across borders;

· Standards, legislation and enforcement vary from country to country making integrated basin management difficult;

· Data and information on water quality/quantity is limited, notably at cross-border points;

· Lack of implementation of EIA procedures in a transboundary context (Espoo Convention).

At national levels:

· Government agencies do not have the resources or, in some cases, the capacity to undertake basin wide water management, and inter-ministerial/inter-sectoral cooperation is often inadequate;

· Tools to improve water management within each economic sector, such as industry and agriculture are lacking;

· Internal migration within the basin has in places led to unsustainable utilization of river and riverside resources;

· The incentives for polluters to clean up are either too low or not applied;

· Legislation and enforcement mechanisms are poorly developed;

· Reliable data on water quality and quantity is often unavailable;

· There are no mechanisms for generating the revenue required to tackle municipal wastewaters or pollution from state owned industrial enterprises and sites;

· Old technologies still in use may be harmful, while opportunities to use state-of-the-art environmentally friendly technology are unexploited.

Baseline Scenario

In the Baseline, the countries increasingly recognize the problems and make efforts to improve water quality. However, these efforts tend to be fragmented and un-coordinated, and tend to focus on the threats rather than the underlying causes. As the underlying causes are not sufficiently addressed, it is likely that quality and quantity challenges will get worse before getting better.

In the Baseline, the international community continues to support efforts to improve water quality, particularly in the Caucasus countries. The absence of Turkey and Iran from many initiatives means that a comprehensive, integrated approach cannot be taken, although it should be noted that Iran has strong bilateral cooperation with its neighbours. In the downstream countries, there are no strong tools to foster coordination and cooperation. Even if tools were developed, the capacity in the countries to manage water and to cooperate across the sub-region is insufficient. Notably, information scarcity makes it impossible to set priorities. Existing initiatives are limited in technical scope and, although they follow an integrated approach, tend to focus on immediate threats over the root causes. They do not aim to initiate the required comprehensive reforms and investments.

3. SUSTAINABILITY (INCLUDING FINANCIAL SUSTAINABILITY)

The sustainability of the full sized project will depend upon the political endorsement and financial support of the SAP and NAPs by the participating countries. The SAP and the NAPs need to be main-streamed into the national planning process, and allocations from national budgets will be required for their implementation. In the region there are many pressing social and economic demands and environment services and quality have been a relatively low priority. A major task during the PDF stage will be to demonstrate to the countries how good environmental governance, through the application of the concept of sustainability can address many of the existing and future social and economic problems of the basin; and, in so doing, gain government support for SAP implementation. At the PDF stage every effort will be made to establish in each country an active inter-ministerial committee, responsible for overseeing all aspects of national implementation, in which key government ministries such as finance and planning are fully engaged. Prior to approval of the full-sized project a commitment from the countries should be sought for the establishment of a regional management and institutional framework for implementation of the SAP.

Good coordination with other donors active in the basin is vital. Ideally, all donors should agree to support common objectives, hopefully within the framework of the SAP and the NAPs. A ‘Friends of the Project’ group will be established coordinated by the Chief Technical Advisor (CTA) which will meet regularly to discuss coordination and cooperation. It is expected that substantial co-funding for the full sized project will be mobilized through this grouping.

Once the pre-conditions for the full-sized project are met - government support, establishment of a regional management and institutional framework and co-funding – the projects longer term sustainability will depend upon the effectiveness of the intervention in demonstrating the practicality and value of the concept of sustainable development in the basin. Ever increasing utilization of the basin’s land and water resources to meet social and economic demands will need to be tempered by good environmental governance if the basin’s biodiversity and fisheries are to be conserved. The full sized project will implement a series of pilot projects, developed during the PDF-B stage, which will address specific transboundary water quality and quantity issues, with the aim of improving resource management while at the same time providing increased environmental protection.

REPLICABILITY

It is hoped that the pilot projects to be implemented in the full-sized project will be showcases for improved water management and enhanced environmental protection in the basin. Success of the pilot projects will depend upon involvement of national and local administrations and, most importantly, local communities, without whose support no improvements can be sustained. During the full-sized project, new sites will be identified and funding sourced for replication of the best of the community-based management techniques developed as part of the pilot projects.

4. STAKEHOLDER INVOLVEMENT/INTENDED BENEFICIARIES

A stakeholder analysis undertaken during the PDF-B will determine more precisely the roles and potential or degree of involvement of concerned public and private sector agencies in each country, and a stakeholder involvement plan will be developed accordingly. Without pre-empting the findings of that analysis, it is likely that the following institutions and organisations will be involved:

· relevant Ministries and State Committees and Departments and their local offices, Parliamentary Committees for environmental protection, Hydro-meteorological Departments, etc;

· local government agencies;

· water users’ associations, including urban and domestic users;

· representatives of farmers and representatives of industries;

· fishing industry;

· regional and national NGOs and NGO coalitions;

· representatives of the scientific community; and

· donor community and International Financial Institutions.

The UNDP Environmental Governance programme will support the establishment of a NGO forum and its inaugural meeting, and the creation of a regional stakeholder group and regional meetings to compile inputs into the TDA and SAP and other key PDF-B project documents.

D – FINANCING

1. FINANCING PLAN

It is estimated that $5 million will be required from GEF for cofinancing of the full-sized project. Of this total, approximately $3.5 million will be spent on the pilot projects and $1.5 million on further capacity building and institutional support, as described in the SAP. The design and technical evaluation of pilot projects will be undertaken during the PDF-B stage allowing a large percentage of the funds to be spent on capital investments and improved resource management, as well as local capacity building.

2. CO-FINANCING

A total of $5 million in co-funding for the full-sized project will be sought during the PDF-B stage from the UN agencies and various other multilateral and bilateral funding agencies active in the Kura basin in the water and environment sectors. Linkages have already been made with EU-Tacis, OSCE, Sida, USAID and KfW with a view to establishing, under the SAP, consistent donor support objectives and coordinated interventions.

The countries will provide substantial co-funding to the full sized project through their financial commitments to implement the National Action Plans. It is expected that these commitments will exceed the GEF project total by many fold.

E - INSTITUTIONAL COORDINATION AND SUPPORT

1. CORE COMMITMENTS AND LINKAGES

Recent Activities/Programmes in Particular Those Relevant to the GEF:

There are many related activities and projects starting up or ongoing in the region. Some of the most significant are:

- the establishment of the Regional Environmental Centre, REC (Armenia, Azerbaijan, and Georgia) and its many on-going grants programmes;

- the initiation of the UNDP Environmental Governance Programme as part of the RBEC Regional Programme;

- USAID funded project Water Management in the South Caucasus (Armenia, Azerbaijan, and Georgia - Turkey has also officially observed some of the activities in this project);

- German/Government KfW support to “Elaboration of a Vision of an Ecoregional Conservation Plan and Proposal of a Nature and Biodiversity Conservation Programme in the Caucasus Region” (Armenia, Azerbaijan, and Georgia);

- the South Caucasus Environmental Protection Programme under the auspices of the UN Economic Commission for Europe (Armenia, Azerbaijan, and Georgia);

- UNDP/GEF phases I and II support projects to the Caspian Environment Programme, (Iran, Azerbaijan and all other Caspian littoral states);

- The EU TACIS/UNECE Transboundary Water Management Project, phases I and II.

- NATO-OSCE South Caucasus River Monitoring project.

- OSCE/UNEP/UNDP Environment and Security Initiative (Armenia, Azerbaijan, Georgia)

- the formation of a strong Kura-Aras NGO coalition and its numerous projects, including celebration of Kura-Aras Day, June 2^nd.

Links with Implementing Agency Program:

In recent years, a broad body of experience and knowledge regarding TDA/SAP preparation and enhancement of regional cooperation on international waters has developed, much of it through GEF support and its International Waters portfolio. The project will build on this experience and these findings. In particular, the TDA and SAP will be prepared in accordance with the best practice guidelines recently published as a training manual under the GEF IWLearn programme and communication with the team developing the guidelines will be maintained throughout the PDF-B. It is the intention to complete the TDA/SAP process within the 18-month PDF B programme in order to ensure SAP implementation can commence under the full size Project, with country and donor co-funding. This will be a challenging objective, and good support from the UNDP country offices will be crucial. Also there will need to be very close coordination between the two components (UNDP-GEF and UNDP-SIDA) and flexibility in their implementation. This will be one of the CTA’s main tasks. With the creation of the Friends of the Project and the convening of regular group meeting we hope to secure buy-in from bi-lateral, multi-lateral, IFIs and the private sector into the project, so at the end of the 18 month programme at the Donors Conference, which shall be hosted in cooperation with the WB, real financial commitment for implementation of the SAP can be demonstrated. Potential friends of the project will be defined at the beginning of the project and confirmed at the SHA. A specific dialogue will be emphazised with the WB, in view of their involvement in water law reform processes in the different countries.

The project is closely related to the ongoing Caspian Environment Programme (CEP). The CEP involves all countries along the Caspian and is supported by all three GEF IAs and EU. It provides a strong informational, data and technical base, which can be drawn on at both the PDF and full project stages. During the PDF stage, optimal coordination arrangements with the CEP and its Programme Coordination Unit in Tehran - negotiations are on-going to establish the project’s Iranian office in the Caspian PCU building. There is a link with UNDP-GEF phase II support project to the CEP, which will begin in March 2004 and will undertake a rapid, land-based source assessment for the near Caspian basin, including the Kura–Aras River within the territory of Azerbaijan. Assessment of the contaminant loads in the Mingachevir reservoir system is also envisaged.

The project will build linkages with the Caucasus Environment and Security Initiative: Transforming Risks into Cooperation (ENVSEC) which has just been launched jointly by the Organization for Security and Cooperation in Europe (OSCE), United Nations Environment Programme (UNEP), and United Nations Development Programme (UNDP). Among the array of environment-security interactions, ENVSEC seeks to identify and map those situations where environmental problems threaten to generate tensions – among communities, countries or regions, where for example:

- water or air pollution in one community is a source of insecurity in another;

- allocation or use of land resources create instability between neighboring regions;

- environment can be (perceived as) a means of control and influence of one country over another (upstream – downstream relations)

There is clearly common ground and potential synergy between the projects and the ENVSEC team will be asked to participate in the regional TDA and SAP projects to explore further collaboration.

Where appropriate, the proposed project will also be linked to national donor supported projects, such as the UNDP Georgia project “Capacity Building for the Ministry of Environment” and UNDP projects on Capacity Building for Implementation of the Protocol of Strategic Environmental Assessment in Armenia and Georgia.

2. CONSULTATION, COORDINATION AND COLLABORATION BETWEEN AND AMONG IMPLEMENTING AGENCIES, EXECUTING AGENCIES, AND THE GEF SECRETARIAT, IF APPROPRIATE.

Implementation of the SAP will rely on the good coordination and cooperation amongst the main GEF Implementing Agencies (UNEP and WB) and other key donors (e.g. EU-Tacis, SIDA and KfW). It is suggested that the implementing agencies be asked to sit on the project Steering Committee and that they be invited along with representatives from the other regional projects to attend and participate in all TDA and SAP regional workshops during the PDF-B activities. Specifically, a diaologue will be set-up with the WB, to ensure sufficient exchange and potential coordination with regard to the water reform processes supported by the WB.

3. IMPLEMENTATION/EXECUTION ARRANGEMENTS

The project proponents are the riparian governments of the Kura-Aras Basin. The governments of Azerbaijan, Armenia, Georgia and the Islamic Republic of Iran have confirmed their full commitment to participating in this project and implementing the SAP - see letters in Annex 4.

The government of Turkey is not ready to enter into a formal project mechanism. Turkey will be encouraged to participate in all activities as an observer, with a view to its future full participation

The Lead Agencies are:

Armenia: Ministry of Nature Protection;

Azerbaijan: Ministry of Ecology and Natural Resources;

Georgia: Ministry of Environment;

Islamic Republic of Iran: Ministry of Energy

In each country the Lead Agency stated above is responsible for either regulation or planning of water resources. However, for an international project of this nature, it will be necessary to involve other national agencies, including those responsible for foreign affairs, finance, energy, transport or forests. The Lead Agency will take responsibility for fully involving those agencies, and, through the PDF process, establishing a national coordination mechanism, including non-governmental members as appropriate.

PART II - PROJECT DEVELOPMENT PREPARATION

A - DESCRIPTION OF PROPOSED PDF ACTIVITIES

Information on PDF B activities

The development of the TDA and SAP, major outputs of the PDF-B project, will be undertaken in line with the proposed best practice approach recently prepared by GEF-UNDP-UNDOALOS Train-Sea-Coast Programme. The applicability of the lessons from this project will be transferred as appropriate to the present project with sensitivity to the variation in circumstances. Communications will be maintained throughout the project with the Trans-Sea Coast Programme team led by Professor Laurence Mee of Plymouth University, UK.

Based on the TDA-SAP best practices guidelines the following incremental phases shall be undertaken in order to prepare a regional TDA and SAP for addressing the transboundary and contributing national issues resulting in the degradation of the Kura Aras river system. The first phase will involve undertaking the Stakeholder Analysis (SHA), appointment of the Technical Task Team (TTT), designation of the Steering Committee and Friends of Project Group, inter-ministerial committees, and establishment project coordination offices.

The second phase will focus on joint fact finding, specifically developing the TDA with empirical studies, information gathering, Causal Chain Analysis, and analysis and review of institutions, laws, policies and projected investments. This will culminate in a TDA to be reviewed by stakeholders, and adopted by the Steering Committee.

The third phase is the preparation of the SAP, involving identification of a vision statement for the basin with long term EcoQOs, and development of coordination between the SAP and NAPs, with sensitivity to socially and economic feasibility of projected activities. This will include a regional and national level institutional framework to monitor and evaluate indicators of operational objectives and targets. The final outcome will be a SAP, supported by partnerships, endorsed nationally and adopted by all countries.

Activities to be financed by PDF -B Grant

1. Establish PDF-B Coordination and Implementation Arrangements

An organigram of the implementation arrangements is given in figure 1.

The National Focal Points (NFP) will be confirmed and the national coordination officers identified at an early-convened project inception meeting. The NFP will be the main contact point for the project in the basin state. As part of the SIDA component (see annex 8) will establish project offices in Baku, Tbilisi and Yerevan. A fourth project office will be established in Tehran supported by the UNDP - GEF component. It is the CTA’s responsibility to ensure that roles and responsibilities are adequately clarified between the various elements of the management arrangements, such as the various stakeholder, steering and advisory groups of the project, as well as national stakeholders and focal points, and in particular between the two (SIDA- and GEF-) components.

The composition of the project Steering Committee will be determined at the inception meeting. Initially Steering Committee members will include the NFPs from the four participating countries, representatives from UNDP-GEF, UNDP-SIDA and UNDP Environmental Governance Programme components and representatives from UN Office for Project Services (UNOPS), executing agency for the UNDP-GEF component, and SIDA. The UNDP-GEF Chief Technical Advisor (CTA) will act as the executive secretary to the Steering Committee supported by the country offices. Meetings will be held every six months.

It is suggested that the Steering Committee membership be widened to include the two other GEF implementing agencies, the World Bank and UNEP, as well as the EU. Invitations either to join as full members or observers will be extended to major regional donors and to regional NGO representatives and representatives of stakeholder groups. Turkey, who has project observer status, will be invited to all project meetings and will be encouraged to join the as full project members as soon as possible.

The National Focal points will organize national Inter-Ministerial Committees to ensure that there is adequate feed-back from all relevant sectors and that National Action Plans (NAP) receive the necessary political support. It is anticipated that this national level committee will meet at least every three months to discuss and assess project progress at national and regional levels. The national coordination officer will prepare minutes of the meeting and submit them to the CTA. Furthermore, a dialogue mechanism will be set-up with the WB during the preparation phase to ensure sufficient communication and potential coordination with regard to the water reform processes supported by the WB.

A “Friends of the Project Group” will be formed by the CTA at the beginning of the project comprising representatives of the major regional donors and donor projects, IFIs and the private sector. This group will meet every six months just prior to the Steering Committee meeting to discuss coordination of basin-wide activities and potential for integration and linkage of activities. This group will issue a report to the Steering Committee and will be granted observer status to the Steering Committee.

The PDF-B project will be implemented in two components. The lead UNDP-GEF component will be executed by UNOPS and the head-office will be based in Georgia. The Principal Resident Representative for the component will be the Director of the UNDP Regional Support Centre in Bratislava. He will be responsible for supervising preparation of the main regional project documents, the TDA, SAP and the project brief and overall project coordination. The second component, implemented by UNDP-SIDA and executed by the Georgian UNDP country office will be responsible for assisting with development of the TDA, and SAP, and preparing the NAPs in Armenia, Azerbaijan and Georgia. Preparation of the Iranian NAP will be assisted by the UNDP-GEF component.

The UNDP-SIDA component will also take the lead in delivering in-country capacity building in Integrated Water Resources Management (IWRM). The UNDP-GEF will support Iran in the development of its NAP and participation in all the UNDP-SIDA component activities, including the IWRM capacity development.

The CTA of the UNDP-GEF component will have responsibility for the day-to-day management of the GEF project and coordination with the UNDP-SIDA component, reporting to the UNDP Bratislava office and the Georgian UNDP country office. Coordination of the project at the country level will be the responsibility of the UNDP-SIDA component and the appointed national coordination officers who will assist the NFPs.

2. Undertake Stakeholder Analysis

The objective of the Stakeholder Analysis (SHA) is to identify the major stakeholder groups affected by and impacting the degradation of the Kura-Aras river basin.

An initial stakeholder consultation was undertaken during the PDF-A stage, which helped develop an analysis of the specific issues n the region. It involved individual, qualitatively oriented interviews with NFPs, formal and unofficial stakeholder group representatives, to determine the broadest ranging transboundary interests and influences impacting degradation of waters in the region. A clear willingness of cooperation amongst all stakeholders has been found during the PDF-A stage, as well as their general readiness to contribute to, and profit from this project.

The SHA will involve identification of major stakeholder groups throughout the region, and their concerns regarding water degradation issues. Once all relevant groups are identified with the aid of the initial stakeholder consultation process, a stakeholder involvement plan will be drafted, and a survey developed and administered in order to create a baseline level of stakeholder perceptions. This survey, in combination with a ground-truthing mission by the SH Analyst will inform the Transboundary Diagnostic Analysis and create an empirically valid measure of the major perceived challenges perceived by the multiple stakeholder groups in the region.

The stakeholder analysis will provide an overview of where tensions and potential conflicts between specific stakeholder groups exist, both nationally and regionally. Additionally, it will allow areas of potential cooperation between and amongst groups to be identified, including collaboration with NGOs operating in the region. The stakeholder groups in this analysis will include: Ministry representatives for agencies overseeing natural resources, hydrometeorology, public health, energy, agriculture, fishing and wildlife, economy, foreign affairs, industry and mining sectors, culture, and other sectors; local, municipal and district government officials; public and private industry officials; farmers; agro-chemical producers and distributors; fishermen; public health care providers; NGOs; researchers and scientists; national park officials and forestry managers; littoral residents; water user associations, where applicable; and others.

The findings of the SHA will serve as basis for the steakholder involvememt plan. Furthernore, it will enable the project to prepare a broader public participation plan for full implementation at the project stage and is a prerequisite of formal project approval. Initial implementation of stakeholder and public participation projects during the PDF-B stage will include an outreach programme requiring the establishment of a web-site for dissemination of all project documents, creation of project brochures and informational posters and coordination with local and national press regarding project activities. The plans will also ensure that the relevant stakeholder groups are fully consulted in the TDA/SAP process. This consultation with stakeholder will include review of TDA prior to adoption by Steering Committee.

The SHA will be carried out by locally appointed consultants assisted by a stakeholder analyst/public involvement expert who will undertake analysis of the questionnaires for inclusion in the TDA and prepare public involvement plan.

This activity will be lead by the UNDP-GEF component project.

A regional Stakeholder Group SHG will be established based on the results of the SHA. The group will meet regularly supported by co-funding from the UNDP Environmental Governance Programme to review the TDA, preliminary SAP, the final SAP and the GEF project document. The first meeting of the SHG will be organized in the third quarter of 2004 and will familiarize the members with the TDA-SAP process. This work will be managed by the Stakeholder analysis and public involvement expert.

3. Undertake Transboundary Diagnostic Analysis

The Transboundary Diagnostic Analysis will be undertaken in line with the proposed best practice. The first step of which will be the formation of a Technical Task Team (TTT), to either undertake or recommend experts to undertake the fact finding work of the TDA. The National Focal Points will be consulted regarding the composition of the TTT, using the Stakeholder Analysis as guidance. It is recommended that each country nominate three qualified participants to the TTT with experience and expertise from different sectors within each country to avoid undue influence of a particular sector in the TTT.

Identification and location of transboundary issues will be undertaken by the TTT at the first TDA workshop, which will be lead by the project CTA and the TDA/SAP expert. A short summary report will be prepared on transboundary issues based on the country reports prepared at the PDF-A stage as a precursor to the meeting. It is proposed that a member of Professor Mee’s team currently working on the best practice guidelines be asked to help with facilitating this workshop. The workshop will be in the form of a brain-storming exercise not only to identify and locate but also to assign priorities (high, medium, low) to the transboundary issues. The results of the workshop will be written up in brief scoping report

The next step will be to gather and interpret information for each identified priority transboundary issue pertaining to the environmental, economic and social consequences of each issue, both positive and negative. This could take the form of a series of studies which might, for example, include:

- Sustainable yields assessment/assessment of current/planned abstraction levels and patterns.

- Land-based pollution source assessment/identification of hot-spots.

- Land–use threats to basin biodiversity

- Flood risk assessments

The studies should look at the environmental, economic and social consequences within the basin and within the Caspian Sea. Close collaboration with the Caspian Environment Programme will be sought and it is hoped that resources may be pooled in order to carry out specific studies, such as the land-based source assessment. Linkages will also be made with the other regional projects, (see annex 6) in data gathering. The KfW project has developed and is to implement an Ecoregional Conservation Plan for the Caucasus, which is a potentially important project partner. An on-going regional project supported by German Federal Government and aiming at the development of trans-boundary cooperation for hazard prevention in the Kura-River Basin, with major focus on industrial hazard prevention, can also be thought as a potential project partner. The ways of linking of all these projects functionally will be investigated at an early stage. These studies will be summarized in short reports to be presented to the stakeholders at a TDA review workshop for stakeholders.

In addition to the summary reports the TTT will undertake a Causal Chain Analysis (CCA) to relate the issues to their immediate physical causes and their social and economic underlying causes. This analysis will be invaluable in identifying the highest impact, cost effective options for addressing priority transboundary issues and identifying monitoring indicators. This CCA will focus on the issues, causes and consequences of degradation of the river basin.

The UNDP-SIDA component will undertake an analysis of institutions, laws, policies, and projected investments in each of the Caucasus countries as part of the TDA and will prepare a regional report (with input from the Islamic Republic of Iran supported by UNDP-GEF). This work will build upon the excellent work already done under the USAID project on water management in the South Caucasus. The analysis will examine the problems of implementation and compliance as well as the legal and institutional mechanisms themselves, and will make clear recommendations for coordinated reforms. Furthermore, lessons will be systematically collected – and recorded for use during the supbsequent implementation phase of the SAP – deriving form previous projects and experiences with regard to favoring factors and barriers, respectively, that influenced cooperation among stakeholders within and across country borders. A review of all existing and projected investments will be undertaken in order to understand the investment priorities of each country and of the major regional donors. This study will assist in defining the basin vision (see below) and understanding how the Strategic Action Programme and National Action Plans can be placed in the wider planning frameworks

The UNDP-GEF CTA will have the responsibility of integrating the TDA and presenting the draft to the stakeholder groups and Steering Committee for review. The Steering Committee will give final approval of the TDA. The TDA should be accepted as a living document and procedures agreed for it to be reviewed at regular intervals. The TDA will be published in a summary form using non-technical terminology, and distributed as widely as possible to multiple stakeholder groups for comment, as well as being made available on the World Wide Web.

4. Preparing the SAP and NAPs

A regional SAP formulation team will be formed, which should incorporate official decision makers as well as technical experts drawn from the TTT. The SAP formulation team will be larger and its composition more varied than the TTT, based on consultations by the project CTA with the NFPs, however it is recommended that it also include the Friends of Project from the donor community. Oversight of the TDA and the SAP will be provided by the Stakeholder Group (see section 2), which will include representatives of the private sector and regional NGOs, and representatives of latent, but impacted stakeholder groups.

The first task of the SAP formulation team will be to agree to a basin ‘vision’ in terms of what is acceptable to the stakeholders in terms of long-term environmental status. The vision will be described in a series of Ecosystemic Quality Objectives (EcoQO) which should be tangible, measurable and easily communicated. A set of EcoQOs will be prepared by the project team. This will be reviewed and refined by the SAP formulation team at a specially designed workshop.

The first regional SAP workshop will be quickly followed by a regional brain-storming meeting to identify the intervention options to meet EcoQOs and the elements of a potential SAP. The options will then be reviewed and where necessary subject to desk studies to assess their technical and economic feasibility. These options must also be considered within the social settings in which they will be implemented and adjusted accordingly. The SAP formulation team will also set operational objectives for the short to medium term for each EcoQO and will appoint consultants to prepare a preliminary SAP.

The resulting EcoQOs will then be reviewed at the national level by NAP formulation teams before agreeing to the formalized regional basin vision. The NAP formulation teams will be created by the NFPs in consultation with the inter-ministerial committee and under the guidance of the project, which will be responsible for drafting the NAPs and reviewing the SAP at the national level. The objective will be to closely coordinate national level policies and legislation with the SAP in order to strengthen country commitment.

At the national level NAP formulation teams will undertake parallel activities in identifying options to meet the EcoQOs and interpret the operational targets in terms of national activities to be carried out. The preliminary SAP will provide the NAP formulation teams with a guide in preparing their plans. As the teams develop their draft NAPs they should incorporate the national and regional activities required to meet the operational targets.

It is envisaged that the duration of activities for both the SAP and NAP will be ten years, with financial commitment being sought for the first five years. The NAPs need to be realistic and reflect the countries budgetary constraints, and these limitations should in turn be reflected in the SAP. There therefore will need to be a series of iterative revisions and cross consultations between the SAP and the NAPs in order to provide a balanced and supportive planning structure. There should be step-wise consensus building created through a series of national and regional workshops to be organized collaboratively by the two component projects.

An extensive training programme, with the objective of incorporating IWRM concepts into the national management systems, will be implemented. Inter-sectoral policy building will be a key aspect of this training. The UNDP-SIDA component will be working with the basin states (Iran will be supported with UNDP-GEF funding) to identify national institutional frameworks for implementation of both the SAP and NAP. This will include a review of existing institutional arrangements and making recommendations based on best IWRM practice.

The inter-ministerial committees will be tasked with preparing inter-sectoral policy proposals for inclusion in the NAPs during the iterative SAP/NAP process. Ideally, the NAP would be a stand alone document, but may have to be incorporated into wider existing water sector planning documents, since it will be a requirement that it is be endorsed by the Government. If the NAP is to be incorporated in a wider document it should retain its focus on the basin and specific investment interventions aimed at countering threats to the water quality and quantity. The incorporation of the NAP into the national strategies of the IFIs should be an objective. Involvement of the WB and ADB in development of the NAP is to be encouraged.

As part of the NAP process the formulation teams will be asked to make recommendations for pilot projects to address priority, transboundary issues, which may be implemented in the final project. Desk studies will be made of the most promising recommendations and following final selection by the Steering Committee included in the draft project brief.

Towards the end of SAP development a regional workshop will be organized under the UNDP-GEF component to review the options for development of institutional and legal arrangements for monitoring and coordinating implementation of the SAP, including perhaps the establishment of a UN umbrella agreement. An options paper will be prepared ahead of the meeting and be circulated to the NFPs for comment. In addition, as part of the UNDP-SIDA component a study tour will be organized for key policy makers and stakeholders to visit an international river basin commission to see how such an organization is structured and works.

The NAPs will go through their country endorsement procedures, including consultation with the key government and non-government stakeholders. The draft version of the SAP will be reviewed by stakeholders at a regional workshop before approval by the NFPs and the Steering Committee. The final version of the SAP will include a set of monitoring and evaluation indicators based on GEF guidelines and agreed to by the countries.

If possible, the SAP will be signed at a specially organized ministerial meeting, which will take place at the same time as specially convened Partnership Conference, which shall be hosted by WB. Throughout the PDF-B project the Friends of the Project (bi-lateral and multi-lateral donors, IFIs, international NGOs and the private sector) will be encouraged to attend the TDA/SAP process workshops and will be invited, either as members or observers to the Steering Committee meetings. In this way we hope that they will develop a sense of ownership of the SAP and commitment to implementation of selected components. Early involvement of Friends of the Project is crucial because of the length of the donor project cycle and the relatively short PDF-B project programme.

5. Preparing the Project document

The project brief for the full size project will be prepared once the content of the SAP is known and the commitments of the countries - incorporated in the NAPs – and support of Friends of the Project have been outlined. The project will provide support to the agreed SAP institutional framework for monitoring and coordination of SAP implementation and will support those SAP activities, which maximize co-funding and establish links between component projects. Design of transboundary demonstration projects is seen as an important part of project brief development, helping to attract donor co-funding. As a parallel activity a Monitoring and Evaluation Framework for the SAP and NAPs will be prepared by the project brief consultants in consultation with the participating countries to be included as an annex to both the SAP and the Project document. It is hoped that the full project will lever a level of country co-funding many times greater than that of the GEF grant. The project brief will be prepared by the CTA and will incorporate the public involvement plan prepared during the PDF-B project. If possible, the project brief will be completed and submitted to the countries for endorsement before the first WB-hosted partnership conference during PDF-B.

B - PDF BLOCK B OUTPUTS

1. Stakeholder Analysis (SHA): A detailed analysis to identify and articulate the views of key basin stakeholders, describing both areas of conflict, and more importantly, areas of agreement. The SHA will help in the formation of a basin vision and will be central to the design of the public involvement plan. The key private-sector stakeholders will be invited to join the Friends of the Project and assist in the later review of the TDA and subsequent implementation of the SAP.

2. Public Involvement Plan: A realistic and meaningful plan will be created to widen the commitment to the TDA/SAP and increase public support for the implementation of the SAP through direct action and through the democratic process of all stakeholder groups. The public involvement plan is a prerequisite for submission.

3. Transboundary Diagnostic Analysis (TDA): The TDA is an objective, scientifically oriented, empirical assessment that identifies and describes priority transboundary issues and evaluates the environmental and socio-economic causes and consequences of transboundary issues. It endeavors to prioritize the issues based on a holistic and multi-sectoral consideration of the problems associated with the state of and threats to transboundary waters. Although the TDA itself contains no recommendations it leads to the development of a basin ‘vision’ and a Strategic Action Programme (SAP) guided by EcoQOs arising from the TDA. The Causal Chain Analysis, an integral part of the TDA, provides an understanding of the distal, intermediate and immediate causes of the transboundary issues, thereby assisting the design of a targeted and cost effective SAP. The TDA is to be treated as a living document to be reviewed, up-dated and supplemented at regular intervals and made available to the wider public (see output 2).

4. A shared ‘vision’ of the long-term environmental status of the basin by all stakeholders. The vision is expressed in terms of long-term EcoQOs, broken down further into operational targets over the planning period (5 to 10 years). The vision is not necessarily an improvement on or reaffirmation of the status quo and could envisage further resource utilization if proven sustainable. Careful consideration of the EcoQOs will need to be given if they do not too unduly restrict economic and social development. Development of WQO/WQS and water use standards should be considered as part of the vision.

5. National Action Plans (NAPs): Incorporating both the national and regional activities aimed at meeting the EcoQOs and operational targets, complimenting and supporting the Strategic Action Programme. The NAPs will be endorsed at the highest government level and will signify national political and financial commitment to the TDA/SAP process. The planning period will be ten-years, split into two sequential five year plans, with a full financial plan for the first five years only. The NAP ideally will be a stand alone planning document but may have to be incorporated into a wider water sector planning document.

6. Strategic Action Programme (SAP): An agreement among the participating countries on actions needed to address priority transboundary threats, including investments, legal and institutional reform, capacity building and baseline studies. The SAP will be implemented through a partnership between the basin countries and multi-lateral and bi-lateral donor agencies, IFIs and the private sector. The SAP and the component NAPs will embrace and balance the development and conservation priorities of the basin countries and, as much as possible, the programme objectives of the major donors, including those of the GEF. The SAP will present a manageable programme of activities to meet the EcoQO and operational targets of the basin vision over a planning period of ten years and will incorporate quantifiable performance indicators by which implementation can be monitored. Financial commitment to the SAP will be sought for the first five to ten years only, in line with common country and donor planning horizons. The SAP will be endorsed by the basin countries.

7. Partnership Conferences: In cooperation with, and hosted by the WB, two meetings will be convened at which political and financial commitment to SAP implementation will be sought from the basin countries and the Friends of the Project. The first conference will take place during the finalization of the PDF-B phase and shall be combined with an inter-ministerial meeting to sign the SAP; a second conference shall be planned during the project implementation, after the SAP will be completed.

8. Institutional framework: A framework plan to coordinate and monitor implementation of the SAP, with a permanent management structure to be supported in its first years by the new GEF project. The framework will be established by an inter-governmental agreement or declaration.

9. A GEF project brief, including proposals for pilot projects: A project brief to be submitted to the GEF Council for support to implementation of the SAP and selected transboundary pilot projects. The proposed pilot projects will address priority, transboundary, environmental issues, involving two or more countries which will result in a measurable improvement in the environment. Each pilot project will be supported by a pre-feasibility desk study.

10. Monitoring and Evaluation Framework: This is a critical component of the SAP which will be produced in parallel with the project brief and will be used monitor implementation and effectiveness of the SAP and component NAPs during the initial five years.

C - JUSTIFICATION

The PDF-B activities will be the first time that the four main Kura countries have come together to analyze the water management issues and problems of the basin since the break up of the former Soviet Union. The existing mechanisms for cooperation, joint water management, and information sharing in the region have deteriorated, although there are still a number of bilateral agreements that continue to function, particularly between the Islamic Republic of Iran and its neighbours. Although efforts have been made to establish new coordination mechanisms, notably by Georgia, cooperation remains limited. The concerned countries are working to address these political issues and the PDF-B activities and subsequent full-sized project have been designed to help this process.

D – TIMETABLE

The timeline for the PDF-B project is eighteen months, from March 2005 until August 2006. A detailed work plan is presented in annex 1. The key milestones will be:

· Month 1: Inception meeting.

· Month 2: Confirmation of project steering committee and rules of procedure. Establishment of inter-ministerial committees, project coordination offices and technical task team.

· Month 3: First TDA workshop to define and scope the priority transboundary issues. Stakeholder analysis and production of the initial public involvement plan

· Month 6: Production of analyses of institutional, legal and policies and projected investments in the basin countries.

· Month 7: Completion of the detailed TDA studies and production of summary reports. National meeting and second TDA workshop to review summary reports and initiate the causal chain analysis.

· Month 8: First SAP meeting to define the vision statement in terms of long-term EcoQOs, followed by national confirmation meetings. Identification of regional and national SAP formulation teams.

· Month 9: Second SAP meeting to identify options to meet EcoQOs and draft, preliminary SAP.

· Month 10: Third SAP workshop to review preliminary SAP and launch NAPs. Production of draft TDA.

· Month 11: Completion of SAP option feasibility studies. Third TDA workshop to review draft TDA.

· Month 14: Design of pilot projects.

· Month 16: Fourth SAP workshop to present draft NAPs and review draft SAP. Prepare draft project brief and Monitoring and Evaluation Framework.

· Month17: First WB-hosted partnership conference

· Month 18: Signing of SAP and country endorsements of the project brief

E – BUDGET

This PDF B financed preparatory phase will specifically finance the following: (1) establishment of regional and national institutional management and support mechanisms; (2) undertaking a stakeholder analysis in the basin; (3) carrying out a transboundary diagnostic analysis, including a causal change analysis; (4) preparing a regional Strategic Action Programme and component National Action Plans; (5) preparation for two WB-hosted donors conferences; (6) the preparation of a project brief for submission to GEF.

After approval of the PDF A proposal, UNDP secured co-funding for the project from the Government of Sweden of approximately $690,000, with $100,000 spent during the PDF A phase, and $594,427 is to be spent on PDF B activities. The Swedish funds will be executed separately from the GEF funds by the UNDP office in Tbilisi. The two project components (UNDP-SIDA and UNDP-GEF) although they have separate work plans (annex 1) will be fully coordinated and together will execute the activities described in this document.

Further co-funding of $100,000 is provided by the UNDP Regional Environmental Governance Programme of the UNDP Regional support Centre for Europe and CIS based in Bratislava. The UNDP TRIB programme contributed $50,000 to the project, with $25,000 spent on PDF-A activities and the remaining $25,000 allocated to PDF-B.

Expected total budget for the PDF B Project

Details of budget for Full Project

PDF B funds will be used to identify and secure funding for implementation of the SAP and co-financing for the Full project. This includes investment financing to finance any necessary infrastructure developments. It also includes technical assistance financing, to finance both the incremental and non-incremental aspects of the GEF Full Project. Possible sources of co-financing other than the countries themselves through central budget or loans include: the UNECE Trust Fund for the South Caucasian Environmental Protection Programme, USAID, the EU TACIS Programme, SIDA, KfW, WWF, Eurasia Foundation and the OSCE.

PART III – RESPONSE TO REVIEWS

A - CONVENTION SECRETARIAT

B - OTHER IAS AND RELEVANT EXAS

ANNEXES

Annex 1: Work plan and logframe

Annex 2: Legal Context

Annex 3: Terms of Reference for UNDP-GEF international experts

· Chief Technical Advisor

· TDA/SAP advisor

· SHA/Public involvement expert

· Legal and institutional expert

· National Focal Point

Annex 4: Letters of Endorsement

Annex 5: Map showing geographical features of the basin of Kura and Aras Rivers

Annex 6: Information on Related Projects in the Region

Annex 7: Project Concept Paper

Annex 8: SIDA funded project implementation plan

Annex 9: National Country Reports

ANNEX 1: Work Plan

* - co-financed activities

Logframe (to be read in conjunction with SIDA implementation plan Annex 8)

ANNEX 2 – Legal Context

This Project Document shall be the instrument referred to as such in Article 1 of the Standard Basic Assistance Agreement between the Government of those participating countries, which have signed such Agreement, and the United Nations Development Program.

The following types of revisions may be made to this project document with the signature of the Principal Project Resident Representative only, provided he or she is assured that the other signatories of the project document have no objections to the proposed changes:

1. Revision in, or addition of, any of the annexes of the project document.

2. Revisions, which do not involve significant changes in the immediate objectives, outputs or activities of the project, but are caused by the rearrangement of the inputs already agreed to or by cost increases due to inflation.

3. Mandatory annual revision, which re-phase the delivery of agreed, project inputs or increased expert or other costs due to inflation or take into account agency expenditure flexibility.

Annex 3: Terms of reference

3.1 Chief Technical Advisor

3.2 TDA/SAP advisor

3.3 SHA/Public involvement expert

3.4 Legal and institutional expert

3.5 National Focal Point

3.1 Chief Technical Advisor

The Kura-Aras river system is the principal source of water for industry, agriculture, residential uses and energy in Armenia, Azerbaijan and Georgia, Iran and Turkey. The rivers are important to regional cooperation in the region as they cross and form many of the borders. Both rivers are very seriously degraded. Water quality is seriously impaired by the dumping of untreated municipal, industrial, medical and agricultural wastes and by huge sedimentation loads resulting from upstream deforestation. Water quantity is seriously affected by uncoordinated damming, over use of water for agricultural and hydropower purposes, and watershed degradation.

Integrated, inter-country efforts are urgently required to reverse the ongoing degradation of these river ecosystems. The proposed project aims to ensure that the quality and quantity of the water throughout the Kura-Aras river system meets the short and long-term needs of the ecosystem and of the communities using the ecosystem. The project will achieve its objectives by: fostering regional cooperation; increasing capacity to address water quality and quantity problems; demonstrating water quality/quantity improvements; initiating required policy and legal reforms; identifying and preparing priority investments and; developing sustainable management and financial arrangements.

The project is currently in its preparatory phase (PDF B). The PDF B will specifically finance the following:

- establishment of coordination and management framework

- undertaking of a Stakeholder analysis and development of a public involvement plan

- development of a transboundary diagnostic analysis

- creation of a basin vision

- development of a regional Strategic Action Programme (SAP) and National Action Plans

- organisation of donors’ conference in cooperation with WB and in support of the SAP

- production of a GEF SAP implementation project

Skills and Experience Required

Post graduate qualification in water, pollution or river basin management or a related discipline;

Demonstrated understanding of the socio-economic processes which lead to degradation of international waters;

At least 10 years experience in international project management and/or project design;

At least five years demonstrated and successful experience in preparing and implementing projects which have successfully conserved water ecosystems, with some of this experience in countries with economies in transition;

Demonstrated ability to discuss, negotiate and facilitate inter-governmental consultations in the region;

Full knowledge of GEF procedures and structures;

Knowledge of the South Caucasus Region would be an asset, as would knowledge of the Russian language.

Duty station: Home office, Caucasus region, project offices, and other offices as needed

Duration: 6 months

1. Referring to the approved PDF B document, finalise and update as appropriate the project workplan;

2. Assist in the establishment of the country offices and appoint national experts and officers

3. Maintain contacts and exchange information with key project partners, including UNDP/GEF, UNDP/REGP, UNDP/TRIB, USAID, TACIS, World Bank, EBRD, UNECE, CEP and establish Friends of the Project group and a specific dialogue mechanism with the WB;

4. Collect and record lessons and experience from similar projects (USAID, TACIS), with special focus on factors favoring/hindering in-country and transboundary stakeholder cooperation;

5. Hold in-depth relations with SIDA, in each country, and possibly in Stockholm, in order to facilitate the most appropriate implementation arrangements for the PDF B;

6. Maintain contacts with offices in all four (five) countries to meet the national teams, and support in-country implementation and management arrangements;

7. Organise and facilitate TDA and SAP meetings with assistance of SAP expert;

8. Review and be responsible for production of all project documents

9. Prepare detailed agenda and list of participants for inception meeting and subsequent Steering Committee meetings;

10. Provide detailed guidance on the format, structure and approach to the Regional Consultation;

11. Determine appropriate options for co-financing, managing the project, building partnerships and mobilizing resources to the Full Project;

12. Identify possible management mechanisms for the Full Project

13. Prepare a Project Document based on SHA, TDA. SAP, and NAPs, including preparation of pilot project briefs.

· Workplans, TORs, comments on national experts work;

· Basin vision based on a set of EcoQOs

· SAP and component NAPS, Basin Vision,

· Regular Progress Reports

· A paper describing the options for partnerships, covering financial arrangements for the Full Project with linkages with other projects, SAP execution arrangements and execution/implementation arrangements for the Full Project (including PIP);

· A complete, high quality Project Document

3.2 TDA/SAP advisor

The Kura-Aras river system is the principal source of water for industry, agriculture, residential uses and energy in Armenia, Azerbaijan and Georgia, Iran and Turkey. The rivers are important to regional cooperation in the region as they cross and form many of the borders. Both rivers are very seriously degraded. Water quality is seriously impaired by the dumping of untreated municipal, industrial, medical and agricultural wastes and by huge sedimentation loads resulting from upstream deforestation. Water quantity is seriously affected by uncoordinated damming, over use of water for agricultural and hydropower purposes, and watershed degradation.

Integrated, inter-country efforts are urgently required to reverse the ongoing degradation of these river ecosystems. The proposed project aims to ensure that the quality and quantity of the water throughout the Kura-Aras river system meets the short and long-term needs of the ecosystem and of the communities using the ecosystem. The project will achieve its objectives by: fostering regional cooperation; increasing capacity to address water quality and quantity problems; demonstrating water quality/quantity improvements; initiating required policy and legal reforms; identifying and preparing priority investments and; developing sustainable management and financial arrangements.

The project is currently in its preparatory phase (PDF B). The PDF B will specifically finance the following:

- establishment of coordination and management framework

- undertaking of a Stakeholder analysis and development of a public involvement plan

- development of a transboundary diagnostic analysis

- creation of a basin vision

- development of a regional Strategic Action Programme (SAP) and National Action Plans

- organisation of donors’ conference in cooperation with WB and in support of the SAP

- production of a GEF SAP implementation project

Post graduate qualification in environmental management, environmental economics, international development, or related discipline;

Demonstrated understanding of the socio-economic processes that lead to degradation of international waters;

Demonstrated experience in international water project management and/or project design;

Demonstrated experience in the TDA/SAP Processes, including familiarity with methodologies to be employed in multiple analyses and Best Practices of IWLearn;

At least five years demonstrated and successful experience in preparing and implementing projects which have successfully conserved water ecosystems, with some of this experience in countries with economies in transition;

Demonstrated ability to discuss, negotiate and facilitate inter-governmental consultations in the region;

Full knowledge of GEF procedures and structures; and familiarity with UNDP operational procedures;

Duty Station: Home office, Caucasus region, project offices, and other offices as needed

Duration: 2 months

Tasks:

1. Provide assistance and support to CTA throughout the TDA and SAP process

2. Review of PDF-B, including WorkPlan, Logframe, and country reports

3. Attend Inception meeting to provide input/advice on selection of Steering Committee members to best facilitate SAP processes

4. Provide training, input for NFPs and staff on GEF procedures and expectations

5. In consultation with the CTA and national teams, through obtaining timely information, finalise the TDA and SAP and submit to UNDP/GEF and all governments;

6. Provide support to incorporate the comments of the governments, SIDA, UNDP/REGP, UNDP/GEF, GEF Secretariat and Council, Steering Committee and other relevant committees into the TDA and SAP

· Workplans, TORs, comments on national experts work;

· TDA and SAP workshop preparatory materials and final reports

· Review of TDA and SAP and component NAPs

· Final summary report on lessons learned regarding TDA/SAP methodology and approach to be submitted to GEF

3.3 SHA/Public involvement advisor

The Kura-Aras river system is the principal source of water for industry, agriculture, residential uses and energy in Armenia, Azerbaijan and Georgia, Iran and Turkey. The rivers are important to regional cooperation in the region as they cross and form many of the borders. Both rivers are very seriously degraded. Water quality is seriously impaired by the dumping of untreated municipal, industrial, medical and agricultural wastes and by huge sedimentation loads resulting from upstream deforestation. Water quantity is seriously affected by uncoordinated damming, over use of water for agricultural and hydropower purposes, and watershed degradation.

Integrated, inter-country efforts are urgently required to reverse the ongoing degradation of these river ecosystems. The proposed project aims to ensure that the quality and quantity of the water throughout the Kura-Aras river system meets the short and long-term needs of the ecosystem and of the communities using the ecosystem. The project will achieve its objectives by: fostering regional cooperation; increasing capacity to address water quality and quantity problems; demonstrating water quality/quantity improvements; initiating required policy and legal reforms; identifying and preparing priority investments and; developing sustainable management and financial arrangements.

The project is currently in its preparatory phase (PDF B). The PDF B will specifically finance the following:

- establishment of coordination and management framework

- undertaking of a Stakeholder analysis and development of a public involvement plan

- development of a transboundary diagnostic analysis

- creation of a basin vision

- development of a regional Strategic Action Programme (SAP) and National Action Plans

- organisation of donors’ conference in cooperation with WB and in support of the SAP

- production of a GEF SAP implementation project

Qualifications:

Post graduate qualification in environmental management, social sciences, international development, or related discipline;

Demonstrated understanding of the socio-economic processes which lead to degradation of international waters;

Demonstrated experience in international water project management public participation;

Demonstrated ability to discuss, negotiate and facilitate stakeholder group consultations in the region;

Knowledge of the ecosystems of South Caucasus Region would be an asset, as would a working knowledge of English, and Russian Languages.

Duty Station: Home office, Caucasus region, project offices, and other offices as needed

Duration: 3 months

Tasks:

1. Conduct preliminary qualitative stakeholder consultations in all participating countries to gauge relationship dynamics, perceptions and concerns of stakeholders and to gather information regarding additional stakeholder groups for inclusion in analysis

2. Advise NFPs on creation of national SH Advisory Groups

3. Develop and design stakeholder survey and oversee administration of stakeholder survey

4. Interpret and analyze findings of SH survey

5. Create accessible, non-technical summary of SHA for use in TDA

6. Support SH Advisory Group in review process for TDA and SAP

7. Provide input for TDA issue prioritization based on SHA findings, including support in Causal Chain Analysis, and the SAP.

8. Prepare a public involvement plan for implementation during PDF-B and full project

· SHA survey and database

· graphic presentation of SHA findings for presentation to project staff, Friends of Project, SH Advisory Group, IFIs and public as warranted

· public involvement plan

· recommendation on public information mechanisms

· Final summary report on lessons learned regarding methodology and approach to be submitted to GEF

3.4 Legal and institutional expert

The Kura-Aras river system is the principal source of water for industry, agriculture, residential uses and energy in Armenia, Azerbaijan and Georgia, Iran and Turkey. The rivers are important to regional cooperation in the region as they cross and form many of the borders. Both rivers are very seriously degraded. Water quality is seriously impaired by the dumping of untreated municipal, industrial, medical and agricultural wastes and by huge sedimentation loads resulting from upstream deforestation. Water quantity is seriously affected by uncoordinated damming, over use of water for agricultural and hydropower purposes, and watershed degradation.

Integrated, inter-country efforts are urgently required to reverse the ongoing degradation of these river ecosystems. The proposed project aims to ensure that the quality and quantity of the water throughout the Kura-Aras river system meets the short and long-term needs of the ecosystem and of the communities using the ecosystem. The project will achieve its objectives by: fostering regional cooperation; increasing capacity to address water quality and quantity problems; demonstrating water quality/quantity improvements; initiating required policy and legal reforms; identifying and preparing priority investments and; developing sustainable management and financial arrangements.

The project is currently in its preparatory phase (PDF B). The PDF B will specifically finance the following:

- establishment of coordination and management framework

- undertaking of a Stakeholder analysis and development of a public involvement plan

- development of a transboundary diagnostic analysis

- creation of a basin vision

- development of a regional Strategic Action Programme (SAP) and National Action Plans

- organisation of donors’ conference in cooperation with WB and in support of the SAP

- production of a GEF SAP implementation project

Qualifications:

Postgraduate degree in law, with focus on international environment law specializing on water issues and transboundary river system law

Demonstrated ability to develop institutional mechanisms for sustainable transboundary programmes

At least five years demonstrated and successful experience in assisting the preparation and implementation of projects which have successfully conserved water ecosystems, with some of this experience in countries with economies in transition;

Demonstrated ability to discuss, negotiate and facilitate inter-governmental consultations in the region;

Duty Station: Home office, Caucasus region, project offices, and other offices as needed

Duration: 1 month

Tasks:

1. Provide support in the creation of the SAP Basin Vision regarding legal precedence for common river system management

2. Provide collaborative support in UNDP-SIDA analysis of institutions, laws, policies and regulations pertaining to river basin management

3. Provide support in selection of Pilot Projects pertaining to transboundary legal issues

4. Assist in the development of institutional mechanisms for implementation of SAP

5. Assist in the development of suggested legal status of institutions for implementation of full project

· Summary of legal and institutional framework for inclusion in the TDA

· Report on legal constraints and precedents of SAP EcoQOs as warranted

· Brief on institutional mechanisms for implementation of SAP

· Brief on legal status of institutions for implementation of full project

3.5 National Focal Point

Background

National Focal Point is the main contact point for the project in the participating state. The NFP is a member of the Steering Committee, and represents his/her country’s interests in the governance of the project. The National Focal Point is tasked with coordinating and being responsible for his/her country’s participation in the project. The NFP must hold an appropriate and senior position in the national government.

Tasks:

Member of the Steering Committee representing his/her country.

Performs Intersectoral Coordination with his/her country, including ministries, private sector, NGOs, and other stakeholders

Direct and manages the national coordination functions

Oversees the development of the National Action Plan (NAP)

Annex 4 Letters or Endorsement

Endorsement letter from Georgia

Endorsement letter from Armenia

Endorsement letter from Azerbaijan

Unofficial translation of the endorsement letter from Azerbaijan

Dear Mr. Borsotti,

This is to express the support of Ministry of Ecology and Natural Resources to the “Kura-Araz river system transboundary degradation reduction” project and it is requested to present the above mentioned project to the Global Environment Facility for its financing through the UN Development Program.

Minister Huseyn Baghirov

18 November 2004

Endorsement letter from Iran

ANNEX 5: Map showing geographical features of the basin of Kura and Aras rivers

ANNEX 6: Initial information on related projects in the region

(list not exhaustive).

USAID Water Management in the South Caucasus

Although a regional programme, it is run a three separate country office projects (Armenia, Azerbaijan and Georgia) with funding varying in each country. Georgia provides the most funding and Azerbaijan the least: total budget over $4 million. Attention is focused on rehabilitation of monitoring networks (particularly hydrology), data management, river basin management at sub-basin level, institutional building at national and regional levels and water supply/wastewater treatment project preparation.

The first phase of the project has been extended until September 2004 and a second smaller phase is currently being developed, which is likely to be focused on the sub-basin and community level. The project has considerable support in Georgia and Armenia and there are clear opportunities to link the new phase into the SAP implementation.

Regionally, water supply is an important focus area for USAID. The Armenia office in particular was interested in widening their water sector interests to include wastewater treatment.

TACIS Transboundary River Basin Management

This was a 4 million euro project set up in conjunction with the UNECE secretariat to test the monitoring guidelines under the Convention on the Protection and Use of Transboundary Watercourses and International Lakes. The Kura-Aras basin was one of four pilot sites. The project involved the establishment of transboundary water quality monitoring sites (upstream and downstream) between the three Caucasus countries. The first phase is now completed with mixed results. A second phase, due to start in the autumn and worth 5 million euro, will focused on two sites, one of which may be the Kura-Aras/Araks. The project will provide more assistance in establishing monitoring stations and strategies, identify investments for pollution remediation and carry pilot investment projects. The two latter components are especially interesting.

There is a good potential for linkages, even co-funding, with the TACIS project and an early visit to meet with the new TACIS regional task manager is recommended. Early development in the PDF-B of the pilot projects is recommended.

NATO - OSCE South Caucasus River Monitoring Project

The NATO-OSCE project is working to improve water quality monitoring capacity in the Academies of Sciences in the three Caucasus countries. The project aims to strengthen the capacity of the Academies to provide monitoring services to the impoverished Hydromet organizations. It seems to be a successful project and may get further funding. There is little scope for co-funding or parallel funding but there should be some opportunities for mutual project support.

KfW Ecoregional Conservation Plan

The project aims were to develop an eco-regional conservation plan for the Caucasus which took into account forecast scenarios for socio-economic development in the region. The first phase included:

1. Collating and synthesizing information on the current ecological, economic, social and institutional status;
2. Reviewing development goals at national levels and assessing their implications for spatial development;
3. Identifying long-term priority areas for biodiversity conservation;
4. Elaborating alternative scenarios for future supra-national development;
5. Deciding on a preferred scenario;
6. Elaborating the preferred scenario into an Eco-regional Conservation Plan.

Key interventions are now being considered and priorities set. The next phase of the study will be implementation of the plan. One priority intervention selected has been the transboundary Javakheti conservation area which straddles the Turkish, Georgian and Armenian borders. The budget for the complete project is in total 4.6 million euro: Georgia 1.4 m, Armenia 2.0m and Azerbaijan 1.2. However, the project is currently stalled because of a lack of institutional framework through which the plan and KfW are still searching for a suitable composition and arrangement for the Steering Committee.

There is a natural synergy between the KfW land-use/conservation plan and the more water orientated GEF SAP and the possibility of linking or better still incorporating the eco-regional plan within the SAP should be discussed at the highest levels between UNDP and KfW. If the two could be amalgamated it would give the SAP a wider scope and be more attractive to potential co-funders and provide an opportunity to embed national GEF biodiversity projects within the international waters programme regional framework – probably a first in the CIS. The involvement of Iran and Turkey would need to be discussed.

There is extremely good collaboration between the regional projects within the Kura-Aras basin and the minimum of technical overlap. The USAID project manager has been at the centre of the coordination efforts and has with the assistance of OSCE held a several regional workshops to discuss the institutional and legal framework options for a basin-wide management body. These workshops have been attended by the three Caucasus countries and on one occasion representatives from Turkey. The USAID project will finish in September 2004.

It is important that this close collaboration between regional projects is maintained and broadened. If during the PDF-B phase an inter-governmental legal and institutional framework cannot be agreed, an option may be to form a Kura-Aras Environmental Programme under the UN umbrella to implement the SAP. Members of the body would include the basin countries, the UN GEF implementing agencies (UNDP, UNEP and the WB) and other donor partners such as the EU, and perhaps, SIDA, USAID and KfW. At the present time, membership of such a body would be difficult for some donors because of the presence of Iran; however, mechanisms should be sought to achieve as wide membership as possible. It has been proposed that during the PDF-B project regular six monthly donor meetings be held, possibly outside the region, to which all the major players be invited to discuss project and programme integration, including co-funding. This idea was welcomed by all the donor agencies contacted during the initial mission. It will be the task of the PDF-B project team to organize and set the agenda for these meetings.

OSCE/UNDP/UNEP Environment and Security Initiative (ENVSEC): Transforming Risks into Cooperation.

The Organization for Security and Cooperation in Europe (OSCE), United Nations Environment Programme (UNEP), and United Nations Development Programme (UNDP) joined together to form the Environment and Security Initiative (ENVSEC). Cooperation between the three founding organisations – UNEP Regional Office for Europe, UNDP Regional Centre, and OSCE– is governed by a Memorandum of Understanding, signed in Vienna on 17 November 2003. The Memorandum establishes a Programme Management Unit located at UNEP in Geneva which coordinates all operations, fund-raising and reporting of the initiative. The ENVSEC Management Board, consisting of senior members of the respective organisations, approves strategic direction and fund allocation.

National Governments are strongly represented in the ENVSEC process through partnerships with all three founding organisations. Ministries of Foreign Affairs and Ministries of the Environment have given their firm endorsement to the ENVSEC approach at the 5^th Environment for Europe Conference in Kyiv, at the OSCE’s Economic Forum in Prague, at the OSCE Maastricht Ministerial Council, and at other international and regional fora.

The pilot phase of the initiative assessed environmental threats in Central Asia and South-Eastern Europe. The work began at with a regional snapshot, identifying through consultation with national and regional stakeholders the priority environment and security issues and situations. The subsequent stage moves to the local level in the regions and countries, when specific hot spots will be evaluated and inter-agency interventions designed. It also moves into additional regions, such as the southern Caucasus, where environment and security links are priority concerns.

Among the array of environment-security interactions, ENVSEC seeks to identify and map those situations where environmental problems threaten to generate tensions – among communities, countries or regions, where for example:

- water or air pollution in one community is a source of insecurity in another;

- allocation or use of land resources create instability between neighbouring regions;

- environment can be (perceived as) a means of control and persuasion of one country over another (upstream – downstream relations)

At the same time, ENVSEC looks at situations where environmental cooperation may help build common understanding on other more general issues. For example, joint collection of data or management of a cross-border nature reserve will not immediately reduce insecurity per se, but will certainly help build trust and strengthen relations. Ultimately, it is believed that transboundary environmental cooperation can contribute to peace building[i].

The academic community and civil society organisations will be involved in national and regional scoping consultations, make part of country working groups and participate in specific project activities. On the international level, ENVSEC will maintain links with research and policy organisations with relevant expertise, including the International Institute for Sustainable Development and Adelphi Research.

The project will link with ENVSEC through the TDA/SAP process and will coordinate will coordinate through the UNDP Bratislava office and at a technical level through UNEP-GRID in Geneva.

ANNEX 7: Project Concept Paper

Full Project Concept Paper, as approved by GEF in March 2002

Global Environment Facility

CONCEPT PAPER for a FULL SIZED GEF PROJECT

1 Project title: Reducing Transboundary Degradation of the Kura-Aras River Basin

2 GEF Implementing Agency: United Nations Development Programme

3 Country or countries in which the project is being implemented: Armenia, Azerbaijan, Georgia, Islamic Republic of Iran and Turkey

4 GEF Focal Area(s): International Waters

5 Operational Program/Short-term measure: Waterbody-based Operational Programme (OP8)

6 Country Drivenness (Project linkage to national priorities, action plans and programs):

The Kura-Aras[2] river system is critical to sustainable development of the South Caucasus countries - Armenia, Azerbaijan and Georgia. It is the principal source of water for industry, agriculture, residential uses and energy. Accordingly, the management and protection of the river system is reflected in the national development and environment policies and plans of the three countries. The rivers are also important to sustainable development for sizeable populations in the two upstream countries - Iran and Turkey. The rivers run into and impact the Caspian Sea, therefore affecting all communities using the Sea, in particular those of Iran and Azerbaijan.

Regional cooperation is a key long-term aim of all five countries, and cooperation on shared water resources is an intrinsic component of such cooperation. The Kura and Aras rivers are important to regional cooperation as they cross many borders and constitute lengthy parts of the borders.

National Policies

Armenia: The 1998 Armenian National Environment Action Plan (ArNEAP) gives high priority to the water sector. This is demonstrated by the fact that the Integrated Water Resource Management Plan is the only component of the ArNEAP on which significant progress has been made. Armenia has also prepared the Lake Sevan Environmental Action Plan (Lake Sevan is a major water resource within Armenia) targeting the sustainable and integrated management of the lake’s resources. Armenia lies fully within the Kura and Aras river basins and all national policies targeting water resources target principally the Kura, the Aras and their tributaries.

Azerbaijan: Azerbaijan relies on surface waters for 90% of its water supply, and most of the surface water comes from the Kura/Aras. According to the Azerbaijan National Environment Action Plan “pollution of the main rivers and the Caspian Sea is a very serious problem”. Much of Azerbaijan’s industry, agriculture and urban areas therefore depend on the water in the Kura and Aras rivers. Azerbaijan is also very committed to international cooperation on water issues. It has ratified the Helsinki convention on Trans-boundary watercourses and has approved the Hague Declaration on Water security in 21^st century.

Georgia: The Georgian National Environmental Action Plan (GeNEAP) gives priority to water resource management and lists the Kura river as one of the most polluted watercourses in Georgia. The GeNEAP indicates that protecting the Kura requires immediate and concerted action both at national and regional levels. Georgia is committed to regional co-operation in the management of Trans-boundary surface waters. In 1999, the Government of Georgia signed the protocol to the Helsinki convention on Trans-boundary watercourses at the Ministerial Conference on Health and Environment. At the meeting of the parties to the Convention in March 2000 at the Hague, Georgia signed the Ministerial Declaration on the principles of integrated water resource management, including the Trans-boundary context.

Turkey: Water resources management and water quality protection is identified as a priority in Turkey’s National Environmental Action Plan (NEAP, 1998). The main water resource and quality issues identified in the NEAP are: (1) deforestation and poor farming practices leading to erosion, (2) uncontrolled agricultural runoff and discharge of fertilizers and chemical pesticides, (3) large water management projects which if improperly managed can cause population displacement, climatic changes, loss of biodiversity and salinization, (4) diffused responsibility and authority for managing water bodies involving many organizations operating under a variety of laws which reduce effectiveness of water resources management. The Aras river is identified as one of the 26 major water basins in Turkey with a precipitation area of 27,548 km².

Iran: The Iranian National Strategy for Sustainable Development identifies the following relevant actions among its list of priority actions and investments:

• Implementing projects to protect biodiversity…and international water pollution mitigation.
• Implementing a priority investment programme for “win-win” projects…investments that have both environmental and economic benefits…(such as) projects for watershed and forestry management.
• Addressing water pollution problems from urban households and industrial sectors through modification of water pricing, institutional framework, and efficient investments…Along with investment preparatory work, water sector studies should be launched and the comprehensive water plan updated.

The National Biodiversity Report of the I. R. Iran recognizes that managing the rivers that flow into the Caspian is vital to protecting the Caspian Sea ecosystem.

The Islamic Republic of Iran has ratified several global and regional conventions including: Convention on Biological Diversity (CBD), Convention on Transboundary Movement of Hazardous Waste (Basel), and is cooperating in regional international waters initiatives in the Caspian Sea and Persian Gulf at present.

Sub-regional Policies and Cooperation

Following the break-up of the Soviet Union, mechanisms for cooperation, joint water management, and information sharing ceased to function. In 1997, the Ministry of Environment in Georgia took the initiative to promote regional cooperation, notably with the support of the EU TACIS programme. Bilateral co-operation agreements were developed between Armenia and Georgia and between Azerbaijan and Georgia and were signed in 1998[3]. Articles 6, 7, and 8 of these agreements state an urgent need for the protection of transboundary ecosystems and migratory species. In a related initiative, in 1997, the Hydrometeorological Departments of Armenia, Azerbaijan and Georgia signed a co-operation agreement governing the exchange of information

At project, technical and bilateral levels, there are a growing number of inter-country initiatives in the environmental field, including:

- the establishment of the Regional Environmental Centre (REC[4]);

- the GEF MSP Arid and Semi-Arid Ecosystem Conservation in the Caucasus (see later in this document for further details) by Armenia, Azerbaijan and Georgia;

- informal cooperation on the USAID funded project South Caucasus sustainable water management project. Turkey has also officially observed some of the activities in this project.

See Annex 2 for more information on related inter-country projects [5].

Despite the above-mentioned agreements and the many projects listed in Annex 2, recent political tensions (between Armenia and Azerbaijan, and between Armenia and Turkey) have limited cooperation in the sub-region. The concerned countries are working to address these political issues, and progress has been made recently.

7 Context

Regional Importance of the Waters

The Kura-Aras river system is an internationally significant river system, which is seriously degraded and continues to be threatened. Integrated, multi-country, trans-boundary responses are necessary to address the threats to the river system, and to address their underlying causes.

The Kura River originates in the Kizil-Giadik mountain range in Ardahan province in Northeast Turkey, winding its way through mountainous regions in Turkey, Georgia and Azerbaijan into the Caspian Sea. Tributaries flow northwards from Armenia and join the Kura in Georgia and Azerbaijan. The Aras River originates in Erzurum province in eastern Turkey. It flows along the Turkey-Armenia border, along the Iran-Armenia border, along the Iran-Azerbaijan border, before flowing into Azerbaijan where it joins the Kura near the Caspian. Tributaries from Armenia flow south into the Aras. The Aras divides just before meeting the Kura, and one branch flows directly into the Caspian. The total length of the Kura river is 1515km and the total area of the Kura-Aras basin 188 000km², occupying the greater part of the South Caucasus. This area is distributed amongst the five countries as follows: Iran – 40 000 km²; Turkey – 28.900 km²; Azerbaijan 52.900 km²; Armenia – 29.800 km²; and Georgia – 36.400 km². The population in this largely mountainous area is approximately 7 million (see Maps in Annex 1).

The rivers and their tributaries cover almost all of Armenia and Azerbaijan, and a sizeable part of the populated and urbanized parts of Georgia. The waters in the rivers are therefore essential to sustainable development of these three countries. Whereas they are less crucial, at a national level, to Iran and Turkey, they are nevertheless important to the economy and communities living in the catchment areas. The South Caucasus have been identified by Conservation International (CI) as one of the world’s 25 biodiversity hotspot, and the area identified by CI corresponds closely to the Kura-Aras river system. This demonstrates the ecological importance and fragility of this area. Notably, the Aras is home to one of the last natural sturgeon breeding grounds, there are important and unique dry-land riparine forests along the Kura, and the delta where the Aras and Kura rivers flow into Caspian contains many important wetland sites. The Caucasus region is also well known for its diversity of natural landscapes, climate, unique and ancient cultural heritage, archaeology and ethnography.

General Status of the Waters

Man’s activities in the second half of the twentieth century had a drastic effect on the quality and quantity of the water in the rivers. A range of factors, including industrial pollution, domestic waste, agricultural pesticides, large-scale irrigation/flood control/hydropower schemes and watershed degradation have affected the waters. All countries have contributed to this situation. However, as many countries in the region experienced a significant economic decline in the last decade, the stress on water quality in some parts of the river has decreased temporarily. In the future, as the economies in the region grow, and as some industrial activities are restored, the most likely scenario is that the threats to the water quality will also again grow. Water quantity problems have generally not decreased in the past decades, with increasing droughts and floods. A good example of how mismanagement can cause irreversible damage to the ecosystem is the disappearance of the Tugai forest in Azerbaijan. Inefficient upstream irrigation systems used the water needed by the forests, and the forests were unable to survive.

The further downstream, the greater the deterioration in water quality and the increases in water quantity challenges. This downstream progression is due to the increasing levels and aggregation of pollution emissions, the increasing demands for water, and the fact that the downstream areas are naturally drier. The Kura-Aras rivers also have a major impact on the Caspian Sea. At present, the river is the second largest flowing into the Caspian, providing approximately 10% of the total inflow. It is possible that it provides an even greater share of the Caspian’s pollutants[6]. In order to sustainably manage the Caspian Sea, it will be necessary to manage the quality and quantity of the inflow from the Kura Aras.[7]

Generally speaking, capacity to manage natural resources in the region is limited. Each country has limited institutions and tools to manage water, and lacks funds due to poor economic performance in recent years. Monitoring and information systems are weak in each country. Each of the countries has a growing but incomplete legislative system to manage water resources, including laws, decrees, guidance, fees and charges. Enforcement levels are mixed. Each country also has a small but growing NGO community, particularly Georgia and Armenia. Previously, the three downstream countries were part of the Soviet Union and since the break-up of the Soviet Union there are almost no mechanisms for regional cooperation.

National Contexts

Armenia lies upstream on the Kura and Aras Rivers. Armenia has considerable water reserves, both underground, surface and in over 50 man-made reservoirs. Irrigation accounts for an estimated two-thirds of water usage, and water resources are also used for industry, hydropower, recreation, domestic use, and waste disposal. Hydropower accounts for 35% of total energy production. Existing data suggests that Armenia is a source of trans-border pollution on the rivers, notably to Azerbaijan. Armenia experiences regular spring floods due to snow-melts and flash floods which can cause much damage. These floods can flush out sediments in the reservoirs, including deposits of pollutants. Finally, lake Sevan, which plays an important role in the national economy, and feeds into the Aras river, has been shrinking in recent years.

Management of water and environment is distributed over several agencies, including the Ministry of Nature Protection, the National Environmental Authority, the Hydrometeorological department and others. Coordination amongst agencies is weak and there is institutional confusion, however there is a strong vertical management structure in place.

At present, Armenia has weak relations with two of its neighbours - Turkey and Azerbaijan - and this is a barrier to cooperation. However, cooperation on natural resource management does exist, and it is hoped that cooperation on such technical issues as water resources will become increasingly possible. Armenia continues to have good relations with Iran.

Azerbaijan is an arid country, totally reliant on water from the Kura-Aras for agriculture, industry and residential use. The rivers also feed many ecosystems in Azerbaijan, including the sturgeon breeding grounds. The present status of the rivers is a real threat to national sustainable development and to these ecosystems.

As described by the AzNEAP, “The Kura River (from Georgia) and its tributary (Aras River from Armenia) are already heavily polluted before they cross the border to Azerbaijan. Most flora and fauna cannot survive under these conditions. Municipal and industrial contamination sources and agricultural pesticides from inside Azerbaijan add to the problem. Water from Kura River does not meet Azerbaijan’s drinking water standards, even after conventional treatment.” Despite this latter statement the river is still a main source of water for the nation’s capital, Baku.

On leaving Georgia, the river Kura enters Azerbaijan and is immediately stored in the Minchechou reservoir. Vast areas of Azerbaijan are irrigated by this reservoir. Irrigation use may increase following ongoing projects to upgrade the irrigation system (including a WB project). Pollutants from Georgia also collect in this reservoir, and these pollutants are subject to being flushed out by floods.

Due to recent conflicts with Armenia, Azerbaijan is home to a large number of internally displaced persons (IDP). The IDPs create a large pressure on the country’s natural resource base, particularly on riparian forests along the Kura in the north of the country.

At the national level, responsibilities for environment and water resources are shared by the newly formed Ministry of Environment and Natural Resources (formed from the previous State Committees for Environment, Geology, Hydrometeorology and the Forestry Agency) and the State Water Committee.

Georgia is rich in water resources. It has two primary drainage basins, separated by the Likhi range of mountains. The eastern basin drains into the Caspian Sea, the western into the Black Sea. The Kura is the largest river in the eastern basin. Georgia is also rich in biological diversity due to its highly varied climatic, geologic, topographic, and hydrologic conditions. These conditions allow Georgia to support a biota that includes up to 4,500 species of vascular plants and 10,000 cryptograms together with other organisms. Much of this diversity is found in the Kura watershed, and in the Kura and its tributaries

Georgia both contributes to and suffers from degradation of the Kura river. Industrial and domestic untreated waste, coming largely from the Tibilsi region[8], severely degrades the water. This is further exacerbated by inefficient agricultural practices (large irrigation schemes and pesticide use). By the time the water leaves Georgia for Azerbaijan it is seriously degraded. At the same time, a healthy Kura River is essential for an healthy Georgian economy. Georgia depends on the Kura river for industry, agriculture, fishing, energy production and recreation. For example, large areas of eastern Georgia depend on agriculture irrigated by the Kura. Also, some of Georgia’s hydropower (which supplies approximately 70% of Georgia’s electricity) comes from schemes on the Kura.

Of the three lower riparian countries, Georgia probably has the strongest institutional and legislative framework. It also has a stronger technical capacity and a developing network of NGOs.

Iran A large area of Northern Iran feeds into the Aras river. The Aras accounts for over 350 km of Iran’s northern border, and therefore the area is important for Iran’s relations with its neighbours. The border areas of Iran and Azerbaijan share a common culture, which has facilitated relations between the two countries. Iran has good relations with Armenia.

The Government of Iran has a policy to develop hydropower. Details of the plans are still being prepared, but it is considered likely that a large number (up to forty) of small and medium hydropower plants may be built on the Aras river and its tributaries. At present, little is known of the use of this water in Iran, and the status of the water as it runs into the Azerbaijan.

Iran is a riparian country of the Caspian Sea and large parts of its population are dependant on the Caspian for industry, agriculture and recreational uses. However, as noted in The National Biodiversity Report of I. R. Iran “polluted rivers threaten the coastal ecosystems… Man-made barriers and obstacles close the migration routes of fishes, and no fish-ways are anticipated along their migration routes, therefore many spawning grounds are destroyed.” Iran is therefore a strong supporter of efforts to improve the quality of the Caspian through the improved quality management of inflowing rivers (notably the Kura-Aras).

Turkey The Turkish provinces of Erzurum, Ardahan, Kars and Igdir lie upstream in the Kura-Aras basin. The rivers also make up a small part of Turkey’s border with Armenia. While the environmental situation in these eastern provinces is comparatively good; watershed degradation, erosion and agricultural pollution are issues of concern. Existing data suggests Turkey contributes to pollution levels. Long-term efforts to manage the Kura-Aras would require the involvement of Turkey, and Turkey is keen to cooperate in the region in the long-term.

8 Project Rationale and Objectives:

Objectives

The overall objective is to ensure that the quality and quantity of the water throughout the Kura-Aras river system meets the short and long-term needs of the ecosystem and of the communities using the ecosystem. Related to this, a second objective is to improve water quality in the Caspian Sea.

The inter-related immediate objectives of the project are: to foster regional cooperation; to increase national and regional capacity to address water quality and quantity problems; to make noticeable improvements to water quality/quantity at points on the river; to develop sustainable financial and institutional arrangements for long-term management and protection of the rivers; and to promote changes in the economic sectors causing pollution, water shortages and habitat degradation. The focus will be on transboundary issues.

Threats

The water quality in the Kura and Aras rivers is low, conditions decline progressively downstream, and is likely to get worse in the future. In terms of quantity, despite many efforts to manage the water flow, areas in the region continue to experience both floods and shortages. These constraints are also likely to grow along with the demand for water in the coming decades. Finally, the Kura contributes greatly to the degradation of the Caspian Sea. All of the major quality and quantity challenges on the rivers have trans-border aspects.

Urban and residential threats

The 7 million or so people in the river system discharge water and other waste material directly into the river system, with almost no treatment. This problem is widespread across the basin, and tends to accumulate downstream. It is notably important downstream of large urban areas such as Tibilsi, spreading into Azerbaijan.

Industrial threats

Industry is common throughout the region and is generally old, highly polluting technology. All kinds of industry are found, providing all forms of pollution. All countries also have abandoned contaminated industrial lands, which are likely to release pollution over large time-scales. Although industrial pollution crosses all the borders, the Rustavili industrialised region just downstream from Tibilsi is a major source of pollution for Azerbaijan. Industry is also a major user of water, therefore affecting water quantity.

Energy-related threats

Upstream countries use dams to generate hydropower. These already affect the temporal flow of water. There are plans to increase hydropower significantly in coming years, notably in Iran (and probably Turkey and Armenia). These plans will clearly affect water in all downstream countries.

Agricultural threats

Armenia, Georgia and Azerbaijan have large, inefficient and polluting agricultural systems, based on dams and irrigation. Irrigation schemes lead to water loss and lead to salinization, and agricultural systems add pesticides and fertilisers to the water. These problems accumulate downstream, leading to severe water quality and quantity problems as the rivers enter the Caspian.

Water-shed management

Deforestation and land degradation in upstream areas, notably in Turkey, Iran and Armenia, are affecting the quality and quantity of water entering the river. Deforestation is a major contributor to changes in the temporal flow of water, and to the sedimentation flow in the river. Deforestation along the river in Armenia and Azerbaijan is also a major challenge. In Azerbaijan refugees are contributing to the deforestation of unique, biodiversity rich riverside forests.

Underlying Causes

The above threats to water quality and quantity have many underlying causes, including:

At a regional level:

· Agencies responsible for water management have little incentive to work closely with counterpart agencies in other countries;

· There is little incentive to ensure sustainability of water quality and quantity that leaves the country;

· Government actions and action plans in each country are not coordinated with related actions in other countries;

· Similarly, efforts by the non-governmental community (the scientific community and NGOs) are not coordinated with efforts in other countries;

· Private sector activities in one country are not in line with plans and legislation across the border;

· Standards, legislation and enforcement vary from country to country;

· Data and information on the water quality/quantity and on absorption capacity is limited, especially at cross-border points.

At the National levels:

· Government agencies do not have capacity to manage water;

· Inter-sectoral cooperation mechanisms are inadequate;

· Lack of tools to improve water management within each sector, eg to manage pesticide use in the agricultural sector;

· In Azerbaijan, internal migration leads to unsustainable utilization of river and riverside resources;

· Polluters face few incentives to clean up;

· Underdeveloped legislation and enforcement;

· Fragmented and very incomplete system of water monitoring and unavailability of reliable data on pollution;

· Finance and financial mechanisms to clean water or reduce pollution emissions are inadequate;

· Government and non-governmental actors (NGOs and private sector) do not pool resources.

Baseline Scenario

The concerned countries recognize the problems and are making efforts to improve water quality. The efforts tend to be fragmented and un-coordinated, and tend to focus on the threats rather than on addressing the root causes. This fragmentation is both within the countries, and across the countries. Given the above underlying causes, it is unlikely that ongoing national efforts would lead to water improvements in the near future; it is more likely that things would get significantly worse before getting better.

The international community is supporting efforts to improve the water quality, particularly in the three downstream countries. The international community is also fostering regional cooperation amongst these three countries. Two important planned/ongoing projects include the EU/TACIS Interstate Environment Programme (ISEP) and the USAID Regional Sustainable Water Management project. ISEP is supporting capacity building for monitoring and assessment. This includes the necessary institutional strengthening to improve monitoring[9]. The USAID project is working with the three countries on information collection and management (including GIS), on regional political cooperation and on initiating pilot projects. This project initially takes a series of bilateral approaches to strengthening water management capacity.

Both of these projects start off with a rapid needs assessment.

The absence of Turkey and Iran from other initiatives means that a comprehensive, integrated approach cannot be taken. Even in the three downstream countries, there are no strong tools to foster coordination and cooperation. Even if tools were developed, the capacity in the countries to manage water and to cooperate across the sub-region are insufficient. Notably, information shortages make it impossible to set priorities. Existing initiatives are limited in technical scope, focusing on some aspects but not all aspects of the degradation, and existing initiatives do not take an integrated approach – they focus too much on the threats, not on the underlying causes. They do not aim to initiate the comprehensive set of reforms and investments needed to upgrade water quality.

Alternative Scenario

The present and planned efforts may slow down the deterioration of the Kura-Aras system. They are not likely to lead to an improvement in the water quality. Without additional support, no effective national or regional management system will be established. Lack of coordination, lack of incentives, will mean that degradation and pollution continue.

During the PDF stage, the proposed project will prepare a draft Strategic Action Programme (SAP) which will set solid foundations for a long-term, regional, fully integrated and comprehensive approach to management of the Kura-Aras rivers. Following on from this, the full GEF project will support SAP implementation through a series of policy, institutional and legislative reforms at regional and national level, as well as lending incremental support to key, on-the-ground, pilot projects within the SAP. Regional management mechanisms will be operationalised, and management tools developed. Priority soft and hard investments will be designed and implemented – some incremental investments will be supported by the full GEF project. Sustainable financial and institutional arrangements for long-term management of the rivers will be established, including possibly the mobilisation of public and private sector funding to implement the SAP. Reforms will be initiated in key polluting or withdrawing sectors. The proposed GEF project will build on the findings, information, capacity development and institutional setting of other internationally supported projects in the region, notably the above-mentioned EU/TACIS and USAID projects, and the Caspian Environment Programme[10].

The results should be fewer water conflicts, improved water quality on significant stretches of the river, an improved ecosystem and habitat, and biodiversity conserved.

Why should GEF get involved at all?

The Kura Aras river system is an internationally important waterbody seriously threatened by transboundary threats. Protecting this waterbody is therefore beyond the scope of one country, and will have global benefits. The catchment area is also important in terms of biodiversity, ethnic diversity and political cooperation. Finally, improving the quality and flow of the Kura Aras is essential to protecting the Caspian Sea.

Governments in the region are committed to cooperate. However, existing mechanisms to operationalise this commitment are limited, and hindered by the tense political situation. GEF support can ensure this commitment leads to action. Specifically, with GEF support, cooperation can lead to joint action and management.

9 Expected outcomes and activities of Full Project:

As mentioned previously, the immediate objectives of the project are: (i) to foster regional cooperation; (ii) to increase national and regional capacity to address water quality and quantity problems; (iii) to make noticeable improvements to water quality/quantity at some points along the river; (iv) to develop sustainable financial and institutional arrangements for long-term management and protection of the rivers; (v) and to promote changes in the economic sectors which cause pollution, water shortages and habitat degradation. The focus will be on transboundary issues. The project will be co-financed through baseline and cost-shared incremental funding.

The following table identifies likely outcomes and indicative activities for the proposed full project (to be verified during a PDF stage). In the table, activities marked * are not fully incremental and will be co-financed. Co-financing will also be sought for fully incremental activities.

Generally, GEF funds will focus on the policy, institutional and legislative measures. Some GEF increment may go to scientific (databases, measurements, monitoring, etc) activities, although much of this should be undertaken by other projects and governments. GEF may support limited data collection, although where possible existing data sources will be used. GEF increment will be provided to pilot on-the-ground demonstration investments. By project end, it is anticipated that GEF will have assisted in establishing a sustainable financial mechanism.

Collaboration arrangements will be established with ongoing USAID and EU/TACIS project, in order to leverage support from these projects to both baseline and incremental activities. Additional sources of co-financing, including future USAID and TACIS projects, will be explored during the PDF stage and during full project implementation.

10 Sustainability (financial, social, environmental) and replicability of the full project

Financial From PDF stage and through the full project, the project will address, head-on, financial constraints to addressing water management issues. Financing strategies will be a component of the SAP and all regional and national implementation plans. No programme or plan is to be approved if the sources of finance are not defined. As part of these strategies, legislative and market-based approaches to generate revenue, or to provide incentives to stimulate investments into water quality will be explored in each country. Also, the barriers to private sector funding will be assessed and measures implemented for the removal. Donor conferences and meetings will be held in line with resource mobilisation strategies to channel grant and concessional funding towards implementing the SAP.

Institutional Sustained government commitment is also essential. Regional government cooperation mechanisms will be established and agreements drawn up to ensure long-term government commitment to the SAP. Project support to non-governmental networks (across the region and in each country) will mean these networks can support implementation of the SAP and maintain pressure on governments.

Partnerships and participation are key to successfully implementing the SAP. Key partners include all government agencies, NGOS, scientific community, financial community (private and donor), other donors, GEF and all GEF IAs. Following a stakeholder analysis in the PDF stage, appropriate roles and responsibilities of all partners will be clarified.

A regional institutional/management mechanism to ensure long-term continuation of basin-wide management and activities after GEF support is necessary. The PDF will explore alternatives, including the establishment of a river basin authority with a permanent secretariat or an inter-governmental committee. The possibility of managing Kura-Aras activities within the framework of the Caspian Environment Programme will also be explored. The full project will help establish the management mechanism and support its initial operations.

11 Country Eligibility:

All riparian countries are eligible for GEF support for International Waters. UNDP has a programme in each country.

12 Stakeholders involved in project:

Success in a project of this nature depends on the full involvement of a broad group of actors. During the PDF stage, a stakeholder analysis will be undertaken in each country to determine the public and private sector agencies involved in water pollution and water management. Without pre-empting the findings of that analysis, it is likely that the following institutions and organisations will be involved:

· relevant ministries and State committees and Departments and their local offices, Parliamentary committees for environmental protection, Hydro-meteorological Departments, etc;

· local government agencies;

· water users’ associations, including urban and domestic users;

· representatives of farmers;

· public health care providers;

· representative of members of littoral communities;

· representatives of industries;

· NGOs, NGO resource centres and Regional Environmental Centre (REC);

· representatives of the scientific community;

· donor community and international financial institutions.

Through the stakeholder analysis, for each stakeholder group, the present and possible future roles, responsibilities and relationships with water will be clarified. The plan will suggest mechanisms for the optimal involvement of each actor in the full project and follow-up.

The stakeholders will be involved in the PDF stage in the preparation of the TDA and SAP. This should generate the buy-in to the process. Through the full project, the stakeholders will benefit from other activities such as studies, workshops, reviews, law and institutional analyses, again helping their buy-in to the SAP and its implementation.

During the PDF stage, a broad advisory group will be established with representatives from most of the stakeholders mentioned above. The role of the group will be to advise on project outputs and support project objectives.

13 Information on project proposer:

The project proponents are the riparian governments of the Kura Aras Basin and all but Turkey have indicated their abiding interest in working on the project. Signatures will be provided at PDF B submission stage, as is normal in International Waters Projects.

The project will be implemented by UNDP and executed by UNOPS. UNOPS will assure neutrality and financial/administrative oversight. UNDP and UNOPS will together ensure appropriate linkages with related GEF and other internationally supported projects, notably relations with the Caspian Environment Programme.

To facilitate donor coordination, and to strengthen financial leveraging capacity, an international financial institution (eg EBRD or WB) will be invited to manage components of the full project related to financing implementation of the SAP. This institution may have responsibilities for preparing and hosting donor conferences, for undertaking feasibility and pre-feasibility studies and for developing financial strategies. This institution may already be involved during the PDF stage.

A project steering committee will be established, which will consist of one member from each of the concerned governments, UNDP/GEF and other donors. The Steering Committee will approve project workplans and major project outputs. Other donors to the project will be represented on the Steering Committee. WB, EBRD, UNEP, EU/TACID and USAID will be invited to observe the meetings of the Steering Committee.

14 Financing Plan of Full project

GEF will finance most of the incremental costs of the project. This will include the costs to prepare the SAP, the costs to prepare the first 3 years regional and national implementation plans, and the costs related to implementing soft (policy, legal, institutional) investments. During the PDF, co-financing will be sought to these incremental activities. Co-financing will be sought from governments, from existing EU and USAID projects (see below), and other projects. GEF will also cover the incremental costs of a small number of strategic demonstration projects. Co-financing will be sought for these on-the-ground activities, and it is hoped that cost-sharing may cover up to 50% of these.

Following on from the full project, full implementation of the SAP will require a large number of investments, many large-scale. GEF may contribute to determining financial arrangements and mobilising finance to these projects, otherwise GEF cannot be expected to contribute to implementing the SAP. The details are to be determined during PDF and Full Project, and it is expected that many other private and public sector will participate in SAP implementation.

During the PDF and SAP preparation, close collaboration will be established with the following USAID and EU/TACIS projects, with a view to co-financing activities and mobilising follow-up investments in SAP.

- USAID/Strengthening Regional Sustainable Water Management in the South Caucasus. This $4mn project aims to increase the quantity and quality of dialogue between countries in the region, notably Armenia, Azerbaijan and Georgia. The activities and outputs are closely related to the outputs and objectives of the proposed GEF project. Links between the two projects have already been established, and a draft MOU prepared. During PDF B stage, these links will be deepened and areas of cooperation developed.

- EU/TACIS Joint River Management Programme on Monitoring and Assessment of Water Quality on Transboundary Rivers. This €4mn project covers four rivers, including Kura. The overall objective of this Project is to support the prevention, control and reduction of adverse transboundary pollution impact caused by the quality of the four rivers selected for the Project. Although the focus is strongly on monitoring, the project will address related legislative, institutional, economic and financial issues. Information generated and capacity built under this project will be very closely related to the GEF project.

15 IA coordination and Linkages to GEF and IA programs and activities

In recent years, a broad body of experience and knowledge with preparing SAPs and enhancing regional cooperation on international waters has developed, much of it through GEF support. The project will build on the experience and findings of the GEF International Waters and other projects, particularly those involved in the preparation of SAPs.

Implementation of the Kura Aras SAP will require a variety of support measures and financial mechanisms. Accordingly, as with other international waters projects, implementation of the SAP will rely on good coordination and cooperation amongst the GEF IA and other donors. To ensure this, the IAs and key donors will be involved from the outset and through the process to prepare the SAP. They will be invited to participate in Steering Committee meetings as observers.

The project is closely related to the ongoing Caspian Environment Programme – CEP. (CEP involves all countries along the Caspian and is supported by several donors. It provides a strong information, data and technical base, which can be drawn on at both the PDF and full project stages.) During PDF stage, optimal coordination arrangements with the CEP and its coordination centre in Azerbaijan will be determined.

In addition, where possible, the project will build on the institutional and informational basis of other regional GEF projects, for example the MSP Arid and Semi-Arid Ecosystem Conservation in the Caucasus. This project involves Armenia, Azerbaijan and Georgia, and aims to develop management plans for arid zones and develop demonstration pilot projects, in the Kura catchment area. This project will generate information and data relevant for the national diagnostic analysis, as well as provide model institutional arrangements at technical and decision-making levels. Another closely related project, implemented by the WB, aims to upgrade the irrigation system in northern Azerbaijan. Possible collaboration with this project will be explored during the PDF.

Where appropriate, the proposed project will also be linked to national donor supported project, such as the UNDP Georgia project “Capacity Building for the Ministry of Environment”.

16 Proposed project development strategy

A PDF B will be requested for the further development of the project. The PDF B will be implemented over an 18-month period, starting early 2002. It is anticipated that the full project brief will be submitted to GEF Council for review in mid-late 2003.

The PDF B will establish the project management and decision-making mechanisms. It will also establish necessary advisory and expert support to the decision-making mechanism, for example regional expert groups and national expert teams. The PDF will support a transboundary diagnostic analysis (TDA) to identify and quantify pollution sources, hotspots, impacts, habitat loss and water quantity issues. Where possible, the TDA will be based on already available data and information. The TDA will constitute an updated and comprehensive background scientific document to be used as a basis for planning, priority setting and decision-making. The TDA will help identify the causal chain to water degradation in the basin and to quantify the root causes.

Based on the TDA, PDF B will prepare the Strategic Action Programme for the Kura Aras Basin (SAP may not be formally approved by highest level government in the lifetime of the PDF). The PDF B will also prepare the first of the annual regional SAP implementation plans, and the national implementation plans in each country. The SAP will also identify one suitable demonstration project for each country, undertake pre-feasibility studies for these[11], and set out the steps to implementing these demonstration projects. The PDF will organise at least one formal donor conference. The PDF process to prepare the SAP and identify financing arrangements will operationalise the commitment of the countries to protecting the rivers.

The PDF will identify possible institutional and management mechanisms needed to ensure sustainable management of the Kura-Aras basis and implementation of the SAP. These may include a regional steering committee, a river basin authority, or linking into an existing inter-governmental authority. The PDF will set out the detailed steps to choosing and establishing the SAP management mechanism.

The PDF will also generate the detailed information needed prepare the full project GEF Brief. The PDF will prepare a stakeholder participation plan, it will cost out all activities, undertake an incremental cost analysis and prepare a financial package.

17 Response to Reviews

This concept incorporates comments received from GEF and other IA’s when first submitted in July 2001.

ANNEX 9: SIDA funded project implementation plan

Phase II

Reducing Trans-boundary Degradation of the Kura-Aras River Basin

Legislative, Institutional and Planning Studies and Development of a Basin Vision on National Level

Underlying Causes

Related Donor Assistance

Implementation Strategy

Activities Implemented under Phase I

Activities Implemented under Phase II

Next Steps: Implementation Phase (UNDP-GEF led activity)

Objectives of Phase II

Component Activities

Legislative and institutional Studies

Define Objectives

Institutional Analysis

Legislative Needs

Regulatory Needs

Identify and Evaluate Institutional Models

National Workshops

Technical Studies

Define Objectives for IRBP&M

Determine Needs and Priorities

Identify Existing Data Bases, Data Collection Techniques, Monitoring, Standards

Prepare outline for IRBP&M

National Workshops

Regional Workshop

Organizational Structure of the Programme

Reporting Deliverables

Terms of Reference for National Team Leader

Terms of Reference for Programme Technical Assistant

Terms of Reference for Technical Advisor/Coordinator

Introduction

The Kura River originates in the Kizil-Giadik mountain range in Ardahan province in Northeast Turkey. It winds its way through mountainous regions in Turkey and Georgia and flows across Azerbaijan discharging into the Caspian Sea. Tributaries from Armenia flow northwards and join the Kura in Georgia and Azerbaijan. The Aras River originates in Erzurum province in eastern Turkey. It flows along the Turkish-Armenian border, along the Iranian-Armenian border, along the Iranian-Azerbaijani border, before flowing into Azerbaijan where it joins the Kura River near the Caspian Sea. Tributaries from Armenia flow south into the Aras. The Aras divides just before meeting the Kura, and one branch flows directly into the Caspian. The Kura-Aras river system is the second largest freshwater inflow into the Caspian Sea, accounting for approximately 10% of the total inflow.

The total length of the Kura River is 1,515 km and the total area of the Kura-Aras drainage basin is 188,000 km², occupying the greater part of the South Caucasus Region. This area is distributed among the five riparian countries as follows:

• Iran – 40,000 km²;
• Turkey – 28,900 km²;
• Azerbaijan 52,900 km²;
• Armenia – 29,800 km²; and
• Georgia – 36,400 km².

The Kura River has a mean annual inflow into the Caspian Sea of 16,600 Mm³.[12]

The basin population in this largely mountainous area is approximately 7 million.

The rivers and their tributaries cover almost all of Armenia and Azerbaijan, and a sizeable area of the populated and urbanized parts of Georgia. The waters in the rivers are therefore essential to sustainable development in these three countries. Whereas the river waters are less crucial, at a national level, to Iran and Turkey, they are nevertheless important to the economy and to communities living in the catchment areas.

Conservation International (CI) has identified the South Caucasus Region as one of the world’s 25 biodiversity hotspots. The area identified by CI corresponds closely to the Kura-Aras river system. This demonstrates the ecological importance and fragility of this area. The Caucasus region is also well known for its diversity of natural landscapes, its climate, its unique and ancient cultural heritage, and its archaeology and ethnography.

Background

Human activities in the second half of the twentieth century had a drastic effect on the quality and quantity of the water in the rivers. A range of factors, including pollution from industry, municipal wastewater discharges, domestic solid waste, agricultural pesticides, large-scale irrigation/flood control/hydropower schemes and watershed degradation have all contributed to a reduction in water quality and quantity. All countries have contributed to this situation. However, many countries in the region experienced a significant economic decline in the 1990s, and industrial pollution diminished as a consequence. However, municipal wastewater throughout the region is now untreated due to lack of funds, except for mechanical processes in some instances, and returned to the river systems with biological and chemical wastes that continue to pollute the waters. Water quantity problems have generally become more serious in the past decades, with increasing droughts and floods. A good example of how mismanagement can cause irreversible damage to the ecosystem is the disappearance of the flood plain forests in Azerbaijan. Recent flooding in Azerbaijan and in the tributaries to the Kura River in Georgia can be seen as attributable to land-use practices detrimental to sound resources management.

The further downstream one goes, the greater the water quantity challenges become and the greater the deterioration in water quality. This downstream progression is due to the increasing levels and aggregation of polluted effluents, the increasing demands for water, and the natural aridity in downstream areas. The rivers also deposit considerable pollution loads into the Caspian Sea.

In the near future, economic development, renewed industrial activities, and rising demand for water could lead to increased water scarcity and degradation in the region. Alternatively, joint, integrated and sustainable mechanisms and approaches to managing water resources could be successfully developed in the region. Such sound practices could end the trends of degradation to the resources systems in the region, and contribute to the reversal in such trends; the development of these mechanisms and approaches would strengthen general partnerships and relations among the countries, not just in the water sector.

Underlying Causes

Overall threats to water quality and volume have many underlying causes, mostly related to national and inter-country governance capacity. These include:

At the regional level:

· Government agencies involved in water management and water users in the region do not coordinate closely with counterparts in other countries;

· There is little incentive to ensure sustainability of water quality and quantity that leaves the country;

· Private sector activities are not coordinated across borders and do not necessarily respect the plans, standards and legislation across borders;

· Existing policies, standards and current enforcement procedures in different countries make integrated basin management difficult;

· Data and information on water quality/quantity are notably limited at cross-border points.

At national levels:

· Government agencies do not have capacity to manage water properly, inter-sectoral cooperation is inadequate and legislation and enforcement mechanisms are poorly developed;

· Government policies towards water resources management need to be strengthened, to facilitate local, regional, national, and trans-boundary measures of integrated resources management;

· Tools to improve water management within each economic sector, such as industry and agriculture are lacking;

· In Azerbaijan, internal migration has led to unsuitable utilization of river and riverine resources;

· Polluters face few incentives to clean up;

· Reliable data on water quantity and quality are often unavailable, although recent projects sponsored by USAID and TACIS have added some reliable data, and provided for mechanisms in data sharing among the countries of the region (the extent to which data sharing extends beyond the specific data collected under the respective projects remains unclear);

· Mechanisms are lacking to generate the finances required to clean up water or to reduce pollution effluents.

Related Donor Assistance

UNDP has been actively supporting the development of a regional initiative for Reducing Trans-boundary Degradation of the Kura-Aras River Basin. The development of the initiative is being undertaken in two components:

· A UNDP-GEF component, supported by planning phase PDF Block B funding which will support all five basin countries to prepare a Trans-boundary Diagnostic Analysis (TDA), a Strategic Action Programme (SAP) and a final project document for submission to the GEF council. The component is currently under development and will be finalized in April/May 2004. The value of GEF support is anticipated to be $700, 000 over an eighteen month period;

· A UNDP-Sida component, described in this document, which will support the three South Caucasus countries (Armenia, Azerbaijan and Georgia) to review the legislative, institutional and planning frameworks at the national and, if relevant, regional levels in the context of integrated water resource management planning, and to create a development vision for the Kura-Aras basin at national level. The above UNDP – GEF component will support the other two basin countries Islamic Republic of Iran and Turkey in these activities. The output from the Sida funded component will feed directly into the TDA and be the foundation of the SAP and is an integral part of the PDF-B preparatory work. The value of the Sida co-funding in the PDF-B phase is $600,000K

Other on-going basin-wide studies include:

· DAI/USAID Water Resources Management Project in the South Caucasus, operational since 2000 focuses on water quantity and quality data management and ex-change issues, and as well, on building capacities for integrated river basin planning at the local level. The project is anticipated to end in September 2004;

· The EU TACIS Trans-boundary Water Management Project, focusing on water quality monitoring issues is concluding its activities by the end of 2003;

· OSCE and NATO support South Caucasus River Monitoring project dealing with improved water quality sampling and analysis techniques.

· The German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety is supporting the project: "Development of the trans-boundary cooperation for hazard prevention in the Kura-river basin", with a focus on development of model early warning and prevention system for hazard, predominately industrial accidents in the Kura-river Basin. It is anticipated that the project will run through 2006.

· The Global Water Partnership (GWP), which is a global network of organizations involved in water resources management, has its programme in the South Caucasus and Central Asia. It finances regional consultations and other activities that support the introduction and implementation of principles and approaches for Integrated River Basin Management (IRBM).

There is an excellent communication between these projects and the planned ones. All main donors active in the basin are and will be encouraged to participate through national and regional workshops in development of the TDA, SAP and the vision for the Kura-Aras basin.

Implementation Strategy

The component project teams of the UNDP-GEF and UNDP-Sida will work very closely together and were possible the two components will share administration and technical resources.

Building on lessons learned from GEF international waters experience, both components intend to adopt a process-oriented and dialogue-based approach to resolving water challenges in the Kura-Aras Basin. By facilitating a sustained multi-level dialogue, and through the development of individual and institutional partnerships at national levels and across the countries, the UNDP GEF and UNDP-Sida intervention will develop trust and create an enabling environment that may lead to an improved management of the Basin.

As mentioned above, the Sida component will support the overall objectives of the regional GEF Programme for the Kura-Aras River Basin in Armenia, Azerbaijan, and Georgia in the PDF-B phase. This phase will develop the TDA and Strategic Action Programme (SAP) and lead to the development of a project to assist the countries to implement the SAP and leverage large investments for the Kura-Aras River Basin.

In Georgia, the UNDP-Sida component will work with the Ministry of Environment, as the “focal-point” agency, and in particular the Ministry’s Policy, International Liaison and Water Management Departments. The component will also work with Hydromet, the Ministry of Foreign Affairs, and the Ministry of Economy. In addition to these government agencies, the component will work with NGOs, parliamentary committees, academics, and private sector organizations, to achieve a well-rounded set of opinions in response to the work.

In Armenia, the focal-point agency will be Ministry of Nature Protection and within the Ministry, the Water Resources Management Agency. In addition, the component will work closely with the other government agencies (Hydromet, Ministry of Foreign Affairs, Ministry of Economy), as well as academia, NGOs, parliamentary committees, and the private sector.

In Azerbaijan, the focal-point agency will be the Ministry of Ecology and Natural Resources, including the Hydromet services. The component will also work with the Committee on Water Amelioration attached to the Cabinet of Ministers, academia, NGOs, parliamentary committees, and the private sector.

The UNDP-Sida component is divided into two phases, corresponding to the PDF-A and PDF-B phases of the UNDP-GEF component.

Activities Implemented under Phase I

The following steps have been undertaken under the present phase I:

1. definition of objectives of this component;

2. identification of existing regional (bi-lateral) and national institutional settings for water resources management;

3. filling key information gaps;

4. initial discussions related to co-financing of project later phases;

5. an inter-country regional consultation on the project and on water management in the region;

6. the preparation of documentation to guide follow-up phases of the project; and

7. identification of national and regional gender issues related to water management in the Kura-Aras watershed;

8. Drafting of the Work Plan for Phase II activities

Activities to be undertaken under Phase II

Phase II will focus on the legal, institutional and methodological aspects of integrated river basin management. These studies will contribute to the Trans-boundary Diagnostic Analysis and the Strategic Action Programme (SAP) to be develop in full by the UNDP-GEF component. The output of Phase II will be a detailed planning document providing necessary information about required activities needed for an Integrated Water Resources Planning and Management.

Next Steps: Implementation Phase (UNDP-GEF led activity)

The Implementation Phase (which is outside the scope of the UNDP-Sida funded component) will focus on assisting the basin countries on implementation of priority measures foreseen in the SAP, with the technical and financial support of many partners, including international donors.

Objectives of Phase II

The general objective of the Programme is to stop the existing trends that have lead to the deterioration of conditions in the Kura-Aras River Basin, and to reverse these long-standing trends that have lead to the degradation in quality and quantity of the water resources, and the environmental setting, in general. The goal is, therefore, to establish practices of sound water and related resources management in the river basin.

To accomplish this objective, two key issues are defined. Addressing these key issues will guide the preparation of the design of the Phase II. These key issues are:

· the institutional needs for proper water resources management of the river basin;

The existing institutional setting for managing the water resources of the Kura-Aras River Basin is a mixture of agencies and organizations in the individual riparian nations. There is no clear responsibility, nor authority, for overall management. Diverse policies, regulations, legislation and programs currently being implemented or being considered in the individual nations further complicate this mixture. There is no significant cooperation and coordination among the riparian nations of the Kura-Aras River Basin.

· the technical needs for integrated water resources planning and management of the river basin.

The current mixture of agencies, organizations, policies, and regulations make the uniform technical management of the river basin not possible. The technical setting, as it exists, will not permit trans-boundary, integrated management of the river basin.

Approach

The approach to be taken during the Phase II, in order to accomplish the above noted objective, and to address these key issues, will be to conduct parallel activities in Armenia, Azerbaijan, and Georgia, concurrently. The Team Leaders in the three countries will closely coordinate these parallel activities. At appropriate times in the course of the work, national workshops will be conducted to discuss results with a broader audience, and to receive feedback to concepts being generated by the Programme. Also, at a suitable time, a Regional Workshop will be held, to discuss these concepts, and to try and achieve harmonization of results.

In each of the three countries, work will proceed in parallel, filling gaps in information, policies, procedures, etc. in each country individually, with country-specific applications of this Work Plan.

A project office will be established in Baku, Azerbaijan; Tbilisi, Georgia; and Yerevan, Armenia. Each office will have a Team Leader, and appropriate support staff (see later section on Organizational Structure of the Project). Team Leaders in the three countries will coordinate their activities very closely using up-to-date communications means, and also with occasional travel to one another’s offices. The UNDP Programme Executing Manager, located in the UNDP office in Tbilisi will lead the Programme in close coordination with the UNDP CO in Armenia and Azerbaijan . Team Leader in each country will maintain close contact with each respective UNDP office. Also, the UNDP focal-point water resources management agencies in each country will be active participants in the Programme, and the study teams in each country will closely coordinate activities with these agencies.

The project team in each country will carry out the series of activities described below, and document the work performed, as indicated. This work will be conducted concurrently in each country, and supervised by the Team Leader in each country and an International Advisor/Coordinator, under the general guidance of the UNDP Programme Executing Manager and UNDP COs in Armenia and Azerbaijan. Ample opportunities will be provided to exchange information and findings among the three study teams, and to share experiences, as well as to “cross-pollinate” ideas. The work will consist of the clearly defined activities described below, and a series of Technical Assistance measures conducted within the focal-point agencies and other appropriately identified organizations in each country. Country-specific plans will be prepared by the Team Leaders to define the particular Technical Assistance measures. These measures will comprise a combination of assignments within government ministries and agencies, including internal subject-specific workshops, training sessions, as well as some short-term internships by government officials in the water resources sector to work within the Programme offices on specific tasks.

A National Advisory Committee will be established in each country, to serve for the duration of the Phase II. This Committee will be comprised of 5-6 members, specifically selected because of their expertise in water resources management, and their stature in the field. Representatives from government ministries, and state departments, parliamentary committees, academia, NGOs, and the private sector will be evaluated and selected for suitability to serve on the National Advisory Committee. The focal-point agency in each country will have final say on the membership in the National Advisory Committee, based on recommendations made by the country Team Leaders.

An expatriate expert in river basin management will serve as Technical Advisor/Coordinator, and make periodic visits to the Project venues to assess progress, offer suggestions as the work proceeds, and participate in national and regional workshops.

At the conclusion of the Work Plan described below, the national teams will be able to create documents that will lay a foundation for the GEF PDF B institutional and methodological aspects of integrated river basin management and a Strategic Action Programme (SAP). This SAP will be the basis of the Implementation Phase led by GEF. .

During the course of the work, the three team leaders will be seeking suitable arrangements within their individual countries, and regionally, among the donor community for “partnering” in on-going and future tasks related to the institutional and technical work of managing the Kura-Aras River Basin. When such opportunities arise, the Team Leaders and the UNDP will establish the most appropriate arrangement for donor participation.

The UNDP Programme Executing Manager, and the Team Leaders will be responsible for the close coordination with the UNDP/GEF PDF A and then PDF B component of the UNDP regional initiative. . Among other strong advantage of this coordination will be that the GEF-funded program includes participation of the two other riparian nations of the Kura-Aras Basin: Iran and Turkey. Thus, those countries can be kept apprised of the work of this Sida-funded project, through the coordination with the GEF-funded project, and their participation can be encouraged.

This Programme will also make full use of the available results of other regional and national programmes related to the Kura-Aras River Basin. All such information will be inventoried, so as to make it readily available to the work of this project. Such programs as the regional USAID-funded work on the Kura-Aras, and the USAID-funded work on water resources management in Armenia, will be very helpful. Other UN, OSCE, EU-TACIS, NATO, World Bank, and similar projects, will also be included in the information inventory.

Component Activities

The activities to be undertaken by this component are described below, and shown on the graphic Work Plan in the Appendix. Two series of studies will be undertaken in each of the three countries (Armenia, Azerbaijan, and Georgia) concurrently: institutional studies, and technical studies. A National Advisory Committee will be established in each country, comprised of members from a liaison ministry, parliamentary committee, academia, NGOs, and the private sector. Each National Advisory Committee will work in close consort with the on-going studies, to provide independent review, and advise on issues as they arise during the course of the work.

Technical Assistance measures within existing government departments and agencies will be undertaken by the Programme, as described below.

The individual activities will be:

· Legislative and Institutional Studies

o Define objectives

o Institutional Analysis

o Legislative needs

o Policy Needs

o Regulatory Needs

o Identify and evaluate institutional models

o A study tour

o Technical Assistance

o National Workshops

o Regional Workshop

· Technical Studies

o Define objectives for Integrated River Basin Planning and Management

o Determine needs and priorities

o Identify existing data bases, data collection techniques, monitoring, standards

o Prepare an outline for IRBP&M

· Define principles, goals and objectives

· Define standards

· Define criteria

· Identify public role

· Identify gender issues

· Identify problems, needs, and opportunities

· Identify physical resources

· Identify plan elements

· Non-structural

· Structural

· Propose alternative plans

· Technical Assistance

· National Workshops

· Regional Workshop

Based on the results of the above noted studies, necessary documentation for the preparation of a Strategic Action Programme will be prepared, and the process fully documented, to be carried out in the subsequent, Implementation Phase led by GEF.

The Institutional Studies will be carried out in each of the three countries, in parallel, with the active participation of the National Advisory Committee. The Team Leader in each country, with the aid of the Technical Assistant and additional staff will perform the work. The National Advisory Committee will meet at regular intervals to review the work underway, and offer appropriate comments and suggestions.

Technical Assistance will be provided by the Study Team in each country, based on a needs assessment that will be undertaken in each country. The purpose of the Technical Assistance component of the Work Plan will be to offer capacity-building to government staff engaged in aspects of water resources management; both at the policy level and the technical level. This will be a “value-added” feature of the Sida funded component. Country-specific plans will be developed by the Team Leader, an International Advisor/Coordinator and Staff in each country to determine the most appropriate measures to be undertaken. It is envisioned that members of the Study Team will work within identified government agencies and departments within ministries, on specific assignments, working closely with government officials, providing on-the-job training in particular tasks. Mini-workshops will be conducted in government offices on specific subjects of work. Also, government officials can be “seconded” on short-term assignments for on-the-job training in the Project office, to participate in work underway. Those government employees benefiting from this Technical Assistance will be asked to prepare brief written reports to the supervisors, describing the nature of the assignment they worked on, and what they learned from it.

National Workshops in each country will be conducted to present the work to a broader audience in each country, to discuss the results, to receive feedback, to achieve consensus, and to obtain support for the findings. A Regional Workshop will be carried out to unify the results of the parallel activities taking place in each country.

A study tour will be undertaken to an appropriately selected location to examine existing type(s) of institutions, and to determine their suitability for institutional models being considered for the Kura-Aras River Basin. This study tour will include the participants in the Technical Studies, so that the policy and technical work can share the exposure to institutions and their technical activities.

The Technical Studies will be conducted in a similar fashion as described above, with the staff in each country performing the defined tasks; guidance provided by the National Advisory Committee; national workshops conducted; and the regional workshop held. Technical Assistance will be provided in the Technical Studies component of the plan, in a similar fashion as that described above for the Institutional Studies. A study tour is envisioned, at which participants will have an opportunity to observe, first-hand, the procedures and benefits of integrated water resources planning and management, as well as to benefit from observing the policy-making aspects of management.

Legislative and Institutional Studies

The purpose of the institutional studies described below is to provide the background and experience necessary to address the key issues involved in the proper management of the water resources of the Kura-Aras River Basin. This experience will be invaluable in the performance of subsequent phases of work.

Define Objectives

The study team will assess an array of national objectives related to institutions responsible for trans-boundary water resources management. Based on these assessments those objectives applicable to the existing Kura-Aras situation will be identified. The objectives will then be fully defined and described, and the rationale for their selection will be documented. Institutional objectives may include, among others bi-lateral or any other relevant arrangements.

Upon conclusion of this activity, a detailed Planning Memorandum will be drafted describing the work performed at arriving at the selected objectives, and supporting the conclusions and findings. The National Advisory Committee will review the Planning Memorandum, and it will be finalized following the National Advisory Committee review.

Institutional Analysis

The existing national level institutional situation regarding water resources management of the Kura-Aras River Basin will be analyzed. The analysis will make use of existing documentation, and interviews and meetings with local water resources management authorities. If appropriate, a mini-workshop within the responsible government agency can be conducted to discuss the existing status of how management of the Kura-Aras is carried out, and what sorts of modifications to these procedures would be worth pursuing, and why. The situation, and any workshop results, will be fully described in a Planning Memorandum that will be reviewed by the National Advisory Committee, before being finalized.

Legislative Needs

The existing national level legislative situation regarding the water resources management of the Kura-Aras River Basin will be analyzed. The analysis will be based on existing documentation, and interviews and meetings with local water resources management authorities. Based on the findings of the existing situation and the institutional objectives defined in the above activity, needs for legislation will be addressed.

A mini-workshop can also be conducted on this subject with an array of government participants from different areas of government for discussion of legislative needs for proper water resources management.

These legislative needs will be fully described, and the rationale for their need will be documented.

A Planning Memorandum will be prepared describing the results of these studies, including the existing and desired set of legislative conditions, as well as the reasons behind their need. The draft Planning Memorandum will be reviewed by the National Advisory Committee, and finalized following its review.

Policy Needs

Existing national level policies regarding the water resources management of the Kura-Aras River Basin will be reviewed. This review will be based on existing documentation, and interviews and meetings with local water resources management authorities. Based on this review, the needs for new and additional policies, or the elimination of some existing policies, in order to achieve the desired objectives, will be addressed.

A mini-workshop within the appropriate government department or agency can be held on this subject.

The results of this analysis will be documented in a Planning Memorandum, which will describe in detail the results of the review of existing policies, and the need for any changes. The National Advisory Committee will review this Planning Memorandum before it is finalized.

Regulatory Needs

Existing national level regulations concerning the management of the Kura-Aras River Basin will be analyzed. This analysis will be based on existing documentation and interviews and meetings with local water resources management authorities. Based on the findings of this analysis, the needs for modifying existing regulations and for developing new regulations, in order to satisfy the above noted objectives, will be addressed.

This will also be the subject of a mini-workshop to be held; discussions could concentrate on the differences between existing regulatory approaches, and other types of regulations that could be employed. This type of targeted-workshop could develop common ground between policy makers and regulators.

The results of these studies will be documented in a Planning Memorandum, which will fully describe the existing regulatory setting, and the need for any modifications. The Planning Memorandum will be finalized, following review by the National Advisory Committee.

Identify and Evaluate Institutional Models

The study team will identify and review an array of existing institutions (local, national, and regional level) for river basin management from around the world. Literature searches will assist in identifying these institutions , and in evaluating the various characteristics of different entities . Based on this research, alternative models of water resources management entities, in terms of their missions, mandates, structures, financing, etc., will be described. These descriptions will analyze the advantages and disadvantages of different models, and their applicability to the situation of the Kura-Aras River Basin. Here, also, a targeted-type of mini workshop can be held for discussion of the alternatives associated with various institutional models.

The results of this analysis will be documented in a Planning Memorandum. This Planning Memorandum will describe in detail the various models of water management institutions existing throughout the world, their differing characteristics, and the benefits of different characteristics as related to the needs of the Kura-Aras Basin. The Planning Memorandum will include results from the targeted-workshop, and identify alternative models to be considered for the case of the Kura-Aras, and provide the rationale for their selection. The National Advisory Committee will review the Planning Memorandum before it will be finalized.

Study Tour

The Study Team and other participants will take a study tour to a selected river basin entity, to meet with an agency engaged in the active management of a river basin. The purpose of the study tour will be to provide first-hand experience to the team members on the institutional aspects of river basin management, and for the team to see how such an institution functions. The team will then be able to use that experience in shaping the institutional needs for the Kura-Aras, by adapting what they have learned on the study tour to conditions existing in the Kura-Aras River Basin.

The selection of a site for the study tour will be a product of the research conducted during the activity on identifying and evaluating institutional models. In order to obtain a broader perspective of different institutions, it may be advisable to visit more than one location on the study tour.

The team will prepare a report upon completing the study tour describing what they have learned, and how it can be applied to the institutional needs of the Kura-Aras River Basin. The National Advisory Committee will review and assist in finalizing the report.

National Workshops

In addition to the targeted, mini-workshops, national-level workshops will be conducted in each of the three countries, individually, at appropriate times during the course of the institutional studies. These workshops will be attended by a broad audience of people involved with water resources management and governance in each country. The objectives of the workshops will be to discuss the concepts being investigated, to receive ideas from a broader group of participants, provide for public participation in the deliberations, to try and reach consensus on key issues, and to obtain general support for the paradigms being developed by the study team.

The results of these workshops will be documented in reports that describe the feedback obtained, the response to the ideas and concepts offered, and the levels of consensus achieved.

Regional Workshop

A Regional Workshop will be conducted with participants from all three countries at an appropriate time during the institutional studies. At this Workshop, the experiences and results of the national workshops will be shared. One of the objectives of the Regional workshop will be to attempt to compare the results obtained at the individual national workshops. Reactions of participants will be documented and presented in a report on the Regional Workshop.

Technical Studies

The work to be done under technical studies is intended to be preparatory to the actual preparation of a SAP (task will be fully implemented by the GEF funded component). The purpose of this series of activities is to provide the experience in the techniques of integrated water resources planning and management, but not the actual preparation of the detailed plan. By undertaking these activities, key issues in the proper management of the Kura-Aras River Basin will be addressed. The experience and knowledge gained from completing these activities will be of great value in subsequent phases of work.

Activities

The Study Team will be carrying out th activities described below in a manner similar to the activities described above for the Institutional Studies. That is, work will be performed in close coordination with the national focal-point agency in each country; documentation will be prepared and carefully reviewed for each activity; technical assistance will be provided through the same system of in-house, and on-the-job training; targeted, mini-workshops within government departments and agencies will be conducted; national and a regional workshop will be conducted; and participants will benefit from a study tour. All of these activities will lead up to the preparation of a SAP (task will be fully implemented by the GEF funded component) that will define activities to be undertaken during the Implementation Phase to follow.

Define objectives for Integrated River Basin Planning and Management

At the national level the study team will identify options for the objectives of an integrated plan for the Kura-Aras River Basin. These objectives may include both water quantity and water quality considerations, as well as both surface water and ground water considerations, and support of unique and valuable eco-systems. The objectives are a reflection of the desires of society for the maintenance and conservation of vital natural resources such as water and biodiversity. Not all objectives are achievable simultaneously, and thus eventually trade-offs will need to be evaluated.

The identification of objectives is a valuable effort in and of itself. Examples of such objectives may include, among others:

· Establishment of a set of water-quality standards that are manageable and applicable to the existing situation in the Kura-Aras River Basin;

· Achievement of water quality standards established for individual reaches of the river system;

· Provide quantity and quality of potable water to all inhabitants of river basin in accordance with established standards;

· Provide flood protection against the flood with recurrence interval of 1% (or of some other frequency) throughout river basin;

· Maintain environmentally determined quantities of low flows in designated river reaches;

· Maximize hydroelectric power generation in the river basin;

· Maximize area under irrigation in the river basin;

· Maintain river flows for other identified needs in selected reaches of the river system;

· Protect and maintain ground water resources;

· Conservation of land resources;

· Protection of biodiversity;

· Conservation and protection of landscapes and natural habitats;

· etc.

The subject of objectives could serve as the basis for a targeted-workshop, within the appropriate agency.

The identification and evaluation of objectives for the Kura-Aras River Basin will be documented in a Planning Memorandum. This Planning Memorandum will present the rationale behind selection of certain objectives and not others, and will explain the purpose of each objective and how it relates to the conditions of the Kura-Aras River Basin.

The Planning Memorandum will be reviewed by the National Advisory Committee, and finalized on the basis of comments and suggestions offered.

Determine Needs and Priorities

The national study team will assess the overall situation in the Kura-Aras River Basin on the basis of existing information and documents, and interviews and meetings with people currently responsible for the water resources management of the respective countries. With this background, the team will evaluate the needs and priorities within the river basin. A weighted matrix-type analysis for evaluation of priorities may be employed, or some other technique for comparative assessment.

One session at a National Workshop will be dedicated to the subject of needs and priorities.

The results of this analysis will be documented in a Planning Memorandum. The Planning Memorandum will explain the technique(s) employed in the assessment, and the implications of the selected needs and priorities on the overall management of the Kura-Aras River Basin.

The National Advisory Committee will review the Planning Memorandum, and its comments and suggestions will be used to finalize the document.

Identify Existing Data-Bases, Data Collection Techniques, Monitoring, and Standards

The national study team will identify existing data bases, data collection techniques, monitoring programs, and standards, on the basis of existing documentation, and interviews and meetings with those responsible for data management of the Kura-Aras River Basin. This inventory will be summarized in a Planning Memorandum. The Planning Memorandum will be reviewed by the National Advisory Committee, and finalized on the basis of its comments and suggestions.

Prepare outline for IRBP&M

Integrated River Basin Planning involves a systematic process of investigation that includes the following steps:

· Define principles, and goals

· Define standards

· Define criteria

· Identify public participation role

· Identify gender issues

· Identify problems, needs, and opportunities

· Identify physical resources

· Identify plan elements

Non-structural
Structural

· Propose alternative plans

· Evaluate alternative plans

· Select plan

· Implement plan

· Maintain plan up-to-date

The national study team will address each of these steps, and prepare an “outline” for each step with respect to the Kura-Aras River Basin. The studies for IRBP&M are at a very preliminary level. A cursory examination of each step in the process will be made. The “how” and the “what” that would be undertaken for each step will be identified and described, without the actual performance of the step. The nature of the results for each step that would be anticipated will be described.

Common ground with European Union (EU) Directives will be sought in the preparation of this “outline .

This outline will be valuable to future efforts at integrated river basin planning for the Kura-Aras River Basin It will provide a guideline for the future GEF intervention for river basin planning and management.

The outline will serve as a topic for a mini-workshop, and a session at the National Workshop, and Regional Workshop.

The results of this exercise will be documented in a Planning Memorandum, which the National Advisory Committee will review before it will be finalized.

Gender Issues[13]

Gender[14] issues have been gaining more attention throughout the world, including the South Caucasus region. The international donor community, regional or locally-based funds or NGOs in the region have taken some steps for community mobilization and participation, including women involvement, aiding marginalized groups of society, addressing some explicit gender issues, i.e., domestic violence and trafficking. However, gender indicators are rarely used to measure project success.

Regardless of social and economic difficulties experienced by Caucasus countries in the way of achieving their development goals, the situation existing in these countries is different from that of other developing countries of the world in terms of gender equality. In the South Caucasus, gender issues are more linked to deepening poverty, general deterioration of quality of life, and drastic marginalization of society, rather than to formal legal systems and institutional arrangements, creating gender-based constraints and fostering practices that put women in inferior position. National constitutions and laws guarantee equal rights for women and men. Both have equal access to major social benefits, such as health care services and education. However, this does not mean that gender disparity is not an issue for the region. Traditional socio-cultural attitudes and obligations are important, if not crucial in defining gender roles of men and women in the region. Women still have restricted access and control over resources. Their participation in management and decision-making is also low. As a tradition, women are rarely advanced to leadership and managerial positions and are frequently under-represented in technical fields. In the private sector, male and female employment roles are differentiated. Women’s roles are seen more in conducting clerical, administrative and operational tasks, while male employees are seen as experts, in managerial and leadership positions. Gender inequity becomes more obvious in rural areas, where women are traditionally less socialized and involved in community activities, have poor access to and control over community resources as well as limited mobility. Their roles are mostly limited to raising children and keeping households.

Some peripheral attention to gender issues has been paid in the recent past, but never before in the South Caucasus have gender issues been considered in environmental and natural resources management, including water resources management. Gender is not yet mainstreamed[15] in existing environmental policies and programs developed at different levels. Along with this, sector related gender-disaggregated data are scarce or absent so as to judge on roles, perceptions and preferences of men and women in water resources management. Nevertheless, as the world experience suggests, gender plays a central role in the water sector, specifically:

· Under gender-based division of labor women and men have different roles and responsibilities in the water sector. Women are primary collectors, users and managers of water in households, especially in rural areas. Men have more power in public decision-making related to water resources. Given different roles and responsibilities carried by male and female members of a society, existing services may affect men and women differently as well as preferences for types and levels of services may be different for males and females.

· Women are major keepers of sanitation in their households and educating their children in hygiene. Hence, they may be more concerned with tap water quality, sanitation and health care issues. Men may consider other water-related issues, e.g. irrigation water quantity, as top priorities. Hence, men and women can have different needs and priorities in water resources management;

· Gender-balanced participation in management and decision-making and addressing of concerns and preferences of both men and women can increase effectiveness, efficiency and sustainability of existing policies/programs/projects.

Suggested Activities

The National Study Team will conduct gender and social analyses to identify gender issues relevant to water resources management, as well to the given project. For analyses, the following indicators may be used:

· Men’s and women’s roles in water resources management;

· Gender-balance of participation in decision-making;

· Constraints to women’s participation within the sector;

· Women’s and men’s relative access to existing resources;

After major gender issues are identified, the study team will suggest an action plan that will be documented in a Planning Memorandum. The document will be reviewed by the National Advisory Committee members and may also become the subject of discussion at national and regional workshops.

Given limited resources and time, only limited quantitative analyses, and qualitative analyses methods will be employed:

· A sociologist, specializing in gender issues, will design a questionnaire, for conducting surveys in three rural locations in Armenia, Azerbaijan, and Georgia; the specialist will study the data collected from these surveys, and provide insightful analysis of the results;

· Collection, synthesis and analyses of existing gender-disaggregated data and information;

· In-depth interviews with different experts, project stakeholders, including local NGOs and international development agencies having specific gender sensitive programs/projects in the region;

· Focus group discussions;

· Discussions at national workshops.

Apart from conducting gender related studies the Study Team in each country will make efforts to mainstream gender into the Programme activities by employing a gender balanced participatory approach. Gender mainstreaming will also serve as one of the criteria for project evaluation. Finally, gender criteria will be included for evaluating and selecting trans-boundary demonstration projects.

Study Tour

The national study team members and others will participate in a study tour. The purpose of the study tour will be for the team members to gain first-hand experience in observing situations where integrated planning for river basins has taken place, or is currently taking place.

Research will be done to identify suitable venues that will benefit the team members. Arrangements will be made so that the hosting agencies will provide the best experience possible.

The results of the study tour will be documented in a report that the National Advisory Committee will assist in finalizing.

The study tour will be organized so that participants in the above-described institutional studies, and participants in these technical studies will both have the opportunity to share the experience, and thus observe how both policy-makers and technical staff coordinate their work.

National Workshops

National Workshops will be conducted in each of the three countries, individually, at appropriate times during the course of the technical studies. These Workshops will be attended by a broad audience of people involved with water resources management in each country. The objectives of the workshops will be to share the results of investigations, to receive feedback from people knowledgeable in the field, to try and achieve consensus on issues, and to try and receive general support for the results of the technical studies.

The results of these workshops will be documented in reports that describe the feedback obtained, and the response to the ideas and concepts offered.

Regional Workshop

A Regional Workshop will be conducted with participants from all three countries (if relevant, participation of Iran and Turkey could be funded by the GEF led component) at an appropriate time during the course of the technical studies. At this Workshop, the experiences and results of the national seminars will be shared. One of the objectives of the Regional Workshop will be to attempt to compare the results obtained at the individual national workshops. Reactions of participants will be documented and presented in reports on the Workshop.

Task Reports

The Planning Memoranda and other Task Reports described in the above activities are intended to be summary documents. It is anticipated that each such document will be on the order of ten to twenty pages. These documents will serve as appendices to the final Programme Report, and will be the basis upon which the SAP (GEF task) will be prepared.

Organizational Structure of the Programme

The Programme will be organized with three parallel teams: one in each of the three countries; Armenia, Azerbaijan, and Georgia. Programme offices will be established in each of the three countries. The Team Leader in each office will be responsible for the work to be performed in accordance with this Work Plan, and will prepare a detailed, country-specific work plan, on the basis of this overall Work Plan. The Team leaders in each country will coordinate closely with the UNDP offices in each country and the GEF led component.

Under the overall guidance and supervision of the Programme Executing Manager of the UNDP Office in Georgia, and in close consultation with the relevant individuals in the UNDP Country Offices in Armenia and Azerbaijan, the Programme Technical Advisor/Coordinator (expatriate) will work closely with the National Team Leaders in Armenia, Azerbaijan, and Georgia. He/she also will work closely with the focal-point ministries in each country, and the proposed National Advisory Committee in each country. The Technical Advisor/Coordinator will be coordinating and reviewing the work being performed by the Study Teams in each country, in accordance with the overall work plan, and the country-specific work plans, during Phase II of the Programme. The Technical Advisor/Coordinator, on periodic short-term assignments in the region, will assist each Study Team in the performance of its work; will participate in National Workshops and the proposed Regional Workshop. As needed, the Technical Advisor/Coordinator will be asked, from time-to-time, to review work sent to him/her at his/her base location. The overall role of Technical Advisor/Coordinator is to provide a quality control function to the work being performed by the Programme.

Overall direction of the Programme will come from the UNDP Programme Executing Manager, based in the UNDP office in Tbilisi.

Programme Technical Advisor/Coordinator

Each Programme Office will have a full-time Technical Assistant that will assist the the Team Leader with overall project coordination as well as provide administrative support to the Team Leader, Short-term Technical Support Staff, and Technical Advisor/Coordinator (expatriate) and will be directly accountable to the Team Leader, and support staff to assist with other Programme activities and needs such as cleaning, security, and transportation. Also, Short-term Technical Support will be employed in each office, to aid Programme with institutional and technical studies and needs described above. This Short-term Technical Support will be in the form of part-time, local expert help, with specific tasks. Each national Team Leader will be responsible for organizing the work efforts, in accordance with this Work Plan, and in preparing country-specific adjustments to this Work Plan.

The Study Team in each country will work closely with the National Advisory Committee that will be established in each country for the duration of the Programme. The production of all of the documentation, as described above, in the form of Planning Memoranda and Reports, will be the responsibility of the Team Leader and his/her staff. This documentation will receive the necessary review process, as described above, with the participation of the National Advisory Committee. The Team Leader will assure compliance with this process. The finalized documentation will be submitted to the focal-point agency in each country, and a sign-off sheet with each document will represent receipt and acknowledgement for each document.

Each Programme office will be responsible for scheduling national workshops at appropriate times during the course of the work. The Regional workshop will be scheduled and organized through a coordinated effort among all three offices. Team Leaders of each Programme Office will communicate with his/her counterparts in other Programme Offices on a regular basis, and will be able to travel to other Programme Offices for coordination purposes, as required.

The Programme Accountant will service all three offices, and be based in the Tbilisi office, reporting to the Programme Executing Manager. The Programme Accountant will maintain all financial records, personnel records, and other related administrative documentation, in full compliance with UNDP requirements. The Programme Accountant will provide all budgetary data in a timely fashion for use by the Programme Executing Manager, and assist each Team Leader with the preparation of periodic progress reports. The Programme Accountant will be responsible for establishing the procurement procedures for all offices, in accordance with UNDP requirements, and will oversee the activities of the Programme Administrators in each office. The Programme Accountant will keep the UNDP Programme Executing Manager, and the UNDP Administrative staff fully informed.

Each Team Leader together with the Programme Technical Advisor/Coordinator will prepare Quarterly Progress Reports of Programme activities, finances, achievements, resolutions to difficulties, etc., with the assistance of his/her staff, and the Programme Accountant. These reports will also include a comparison of the actual activities accomplished with the Country-specific Work Plan for that Quarter, and descriptions of any variations between the two. The Quarterly Progress Reports will also show an up-dated Country-Specific Work Plan for the forthcoming Quarter, with description of the work to be accomplished in that forthcoming Quarter. These Quarterly Progress Reports will be submitted to the UNDP Programme Executive Manager in the UNDP Tbilisi Office, as well as to the local UNDP Offices in Baku and Yerevan. Annually, the Team Leaders will also prepare up-dated Country-specific Work Plans. The Team Leaders, Programme Technical Advisor/Coordinator, administrative staff, Programme Accountant and others, as appropriate, will assist in the preparation of these reports, in a timely fashion. Each Programme office will coordinate with the other Programme offices so that the progress reporting is consistent and timely.

Milestones

Programme milestones will be identified in the country-specific work plans. It is envisioned that these milestones will be such things as:

• Receipt and acceptance of Programme documents by the direct liaison officer of each focal-point agency (“acceptance” will need definition with each agency individually);
• Receipt and acknowledgement of Workshop Reports by focal-point agencies; and
• Acceptance of the final deliverable by the UNDP Programme Executing Manager.

Reporting Deliverables

• Task Reports:
• Planning Memoranda;
• Workshop Reports;
• Report on Study Tour;
• Annual Country-specific Work and Financial Plans;
• Quarterly Progress and Financial Reports;
• Final (completion) Programme Report;

ANNEX 10. National Country Reports

National Report for Armenia

National Report for Georgia

Natrional Report for Azerbaijan

National Report for Iran

National Report for Armenia

GENERAL DESCRIPTION

The Republic of Armenia covers 29,8 thousand sq.km area. Neighboring countries are Georgia in the North, Azerbaijan in the East, Iran in the South and Turkey in the West.
Population - 3.2 million
Population density – 127,6 person/ sq. km

Capital - Yerevan (1,2 mln. population)

State language - Armenian

Religion – Christianity

Monetary unit – dram (since November 22, 1993)

The Republic of Armenia is situated in the South of Transcaucasus, at the northern edge of subtropical climatic zone and covers a small part of Armenian extended highland. Being situated far from oceans, it has a comparatively dry, continental climate.

Armenia is a typically mountainous country with a complex combination of uplands, plateaus, river valleys, depressions. The natural structure of the country is characterized with a complex relief, limited land, water and forest resources, with unfavorable engineering-geological conditions of the most part of the area (high seismicity, abundance of geodynamic processes). Average altitude above sea level is 1850 m, and 42,3 % of the area is unusable for habitation.

Being situated in the central continental sector of subtropical climate zone, Armenia should have a semi-desert - desert climate, however, due to the mountainous nature of the country, high-altitude zoning has been formed on the background of horizontal zonality with a specific climate. Climate is sub-tropical, warm and cool summer, moderate or cold winter. Average multi-year temperature variations -13 +26 C⁰.

In general, Armenia is not considered a country of scarce water; the available annual water resources per capita amount approximately to 3.000mm. However, an uneven distribution of water resources is present in the country in terms of space and time.

Armenian rivers belong to Kura-Araks basin. Average multi-year river run-off is about 7.15 mlrd. m³, flow coefficient is 0.4. Catchment area of Kura basin rivers is 7890 km², and that of Araks river 21900 km². Average river network density is 0.4 m³/km². Rivers mainly have snow melt, rain and ground feeding. Glacial feeding is insignificant. River waters are fresh, useful for water supply.

The Republic of Armenia is a sovereign, democratic, social and legal state.

State governance is implemented in accordance with the constitution and laws, based on the principle of division of legislative, executive and judicial authorities.

The Republic of Armenia has a presidential governance system. Executive authority is implemented by the RA government.

The superior legislative body in Armenia is uni-apparatus National Assembly.

The territory of the Republic of Armenia is rich with fossils. There are considerable reserves of pumice-stone, marble, tuff, lime, pearlite, basalt, salt, as well as precious and semi-precious stones.

The beginning of the 21^st century was notable for Armenia with changes and stable economic growth tendencies. Different economic branches have gradually been rehabilitated and such a development, surely, has its positive sides. However, the chaotic development of economy has its adverse impact on the environment and natural resources use and exploitation.

During the recent years the economic performance of Armenia was high enough. Since the second half of 2000 an additional improvement has taken place in the economy, which has been promoted by the further export expansion. Economic growth during 2003 amounts to 14%.

Coal, iron, bauxite, molybdenum, gold, silver, lead, zinc are extracted in Armenia.

Our nation has struggled and fought for centuries thanks to its culture.

In the field of art, culture the Armenian nation has always occupied its specific place and has represented itself to the world as a creating, constructing nation.

1. WATER STATUS AND USE

Water resources

Armenian rivers have all features characteristic for mountainous rivers – high gradients and inclinations, waterfalls and rapids, flood-mudflow temporary rivers and beds, rain, snow melt and underground flow feeding, spring freshets. Run-off mainly originates in high altitude zones.

The total run-off of Armenian rivers is estimated around 7.15mlrd. cub.m, of which around 6.25 mlrd. cub. m is formed within the country.

Annual total underground water resources of Armenia are estimated 4017mlrd.cub.m, of which around 1.6 mlrd. cub.m is spring flow, 1.4 mlrd. cub.m – drainage flow and about 1.0 mlrd. cub.m – deep flow. Underground transit water flow to Armenia is about 1.2 mlrd. cub.m (from upstream basin of Araks) and outflow from the country is around 0.7 mlrd. cub.m (to Georgia, Azerbaijan, Iran).

Underground water resources play an important role for total balance. About 96% of the water used for drinking purposes and about 40% of the waters used in the country are taken from underground water resources.

More than 80% of the total river run-off is formed within the Republic (not counting the run-off of Lake Sevan basin rivers). The other part of surface run-off is formed by transit flows of Araks and Akhouryan border rivers.

In the Republic 9480 rivers and small rivers are counted, their total length is about 23 thousand km. Of them 379 rivers have 10 km and more length, their total length is 7565 km.

Except Akhouryan and Araks rivers, the sources of the other rivers are situated and their run-offs are formed within Armenia. All the rivers (except those feeding Lake Sevan) flow out of the Republic.

The rivers within the Republic mainly originate from near-to-top regions of high mountains, because of it having a high gradient. The rivers belonging to Kura basin mainly originate at 2300- 2800 m altitudes, and those belonging to Araks basin – at 3300- 3500 m altitudes. Average river inclinations vary in a range of 0.0006 (Metsamor) to 0.095 (Goris). Inclinations of small mountainous rivers are great, their average being 0.025- 0.035.

The catchment areas of the rivers vary in a range of several sq.km to 22100 sq.km (Araks-Surmalou). Their average balanced altitudes vary in a range of 1300-1400m to 3100m, therewith, average altitudes of the Kura basin rivers’ catchments are 130-2100 m, and those of Araks basin rivers’ catchment areas - 2200-2700m.

From hydrological point of view, the rivers and lakes of the Republic are mainly investigated.

The rivers of the Republic are tributaries to Araks and Kura rivers – the major rivers of South Caucasus. The watershed line of midstream catchments of those rivers divides the Republic area into two unequal parts: between Araks basin - 22556 km² (76% of the area) and Kura basin - 7185 km² (24%) .

Araks basin covers western, central and south-eastern parts of the Republic, Kura basin covers its northern and north-eastern regions.

Among significant tributaries to Araks are river Akhouryan with Kars and Karkachun tributaries and feeding from Arpi lake; river Metsamor with Cassakh and Mastara Hegheghat tributaries; river Hrazdan with Marmarik tributary and feeding from Lake Sevan; river Azat; Vedi; river Arpa with Elegis tributary; river Vorotan with Sissian and Goris tributaries; river Voghji ; river Meghri and small tributaries to Araks and those flowing into Lake Sevan.

Among significant tributaries to Kura river are: river Debed with Pambak and Dzoraget tributaries, river Aghstev with Getik and Voskepar tributaries, as well as Hakhoum, Tavoush, Khndzorout and other small tributaries.

Brief description of these rivers is presented below (see also Table 1).

Araks – originates within Turkey. Flowing to the East, Araks twice cuts Armenian boundaries in its midstream at 364^th km and 746^th km downstream the river, becoming a border river between Armenia and Turkey (about 150 km) and between Armenia and Iran (42 km). In downstream parts Araks flows through Azerbaijan-Iran border and conjoins with Kura river at 1072km within Azerbaijan. Before reaching the border of Armenia, Araks, having 11630 km² catchment area, is already a high water river and has specific hydrological characteristics. The river has a regime of high spring freshets. Within the borders of Ararat valley Araks often inundates the near-bank lands, destroys embankments. Use of river waters by bordering states is carried out with equity principle.

Akhouryan – is the first left major tributary to Araks within Armenia. It originates from Arpi lake, at 2017m altitude above sea level and flows into Araks. The river basin is divided from Kura basin in north-east by Javakhk ridge.

Akhouryan river is the only water source of the Republic’s western region. Its rivers are broadly used in the economy of the country, mainly for irrigation purposes. Numerous canals originate from it. Arpa lake (in the source) and Akhouryan (in midstream) major reservoirs are constructed on the river.

Metsamor (Sevjour) – the river source is considered to be in the wetlands located west from Metsamor (Ayghr) lake. The river flows through Ararat valley. Near Metsamor river source Mastara Hegheghat flows into it, and river Cassakh flows into it 26km higher the river mouth. If the influence of tributaries is not taken into account, river Metsamor has exclusively underground feeding with high natural river flow regulation. The role of river Metsamor in Ararat valley dictates broad use of its waters for irrigation purposes.

Cassakh - originates from northern slopes of Aragats mountain, flows into river Metsamor, at a distance of 26km from its mouth. Cassakh is a typically mountainous river. It has a high gradient and a large average inclination. During spring freshets the river is high-water, during summer scarce water stage it becomes shallow because of irrigation intakes.

Hrazdan - before artificial decline of Lake Sevan level it originated from the Lake, nearby Sevan town. The river mainly flows through a narrow gorge. Downstream Yerevan it comes out to Ararat valley and flows into Araks.

Marmarik is the largest tributary to Hrazdan.

River Hrazdan flows through central regions of Armenia and the capital Yerevan. It is considered the main water vein of Armenia. The river is completely used in Sevan-Hrazdan water complex for irrigation and energy purposes, through the derivation HPP cascade of the same name, irrigation canals system, as well as for water supply, recreation and other purposes.

Rivers of Lake Sevan basin – 29 rivers and small rivers are counted in the basin, including two major springs that flow into the lake in the form of rivers. Comparatively large rivers, catchment basin area of which exceeds 100 km² are Masrik, Karchaghbyur, Vardenis, Argichi and Gavaraget.

Azat- flows into Araks 21km downstream the Hrazdan river mouth. Springs have important role in the river feeding. The river waters are used both for water supply and irrigation purposes. The river flow is regulated through Azat reservoir.

Vedi - flows into Araks. In mid- and down-streams the river waters are mainly used for irrigation purposes.

Arpa – river flowing 92 km through Armenia, cuts the border between Armenia and Azerbaijan and passing through Nakhijevan territory, flows into river Araks. The largest tributaries are rivers Elegis, Darb and Herher. Arpa river’s regime is characterized with spring freshets lasting 3-4 months, carrying about 60% of annual run-off. The river waters are used for irrigation and energy purposes, and a part of the flow is transferred to Lake Sevan through “Arpa-Sevan” tunnel.

Meghri – river originates from Zangezour ridge and passing through Meghri town flows into river Araks. Water regime is characterized with spring melt-rain freshets. The river waters are used for water supply and irrigation purposes.

Voghji – river is the second largest river in Zangezour after Vorotan. Waters of river Voghji and its main tributaries Geghi and Norashenik are mainly used for industrial water supply and irrigation purposes.

Vorotan - river is the largest tributary to Araks within Zangezour area. At 111^th km it flows out of the Republican borders and receiving its largest Hagara tributary from its left bank, flows into river Araks. Aimed at regulation of the river flow Spandaryan and Toloris (on Sissian river) large reservoirs have been constructed on it. Vorotan-Arpa tunnel originates from Spandaryan reservoir. After commissioning of the tunnel a part of the river flow will be transferred to Lake Sevan through Arpa-Sevan tunnel.

Vorotan waters are used for irrigation and energy purposes. Vorotan HPP cascade has been constructed on it. From the point of view of complex use of the river flow, Vorotan is the second river in Armenia after Hrazdan.

Debed – After river Araks, it is the second river in the Republic with the largest flow. It flows into Khram (Ktsia-Khrami) river, a tributary to Kura, at 15km distance from its mouth.

The river receives its Debed name after confluent of its two major tributaries Pambak and Dzoraget.

Pambak river is the main tributary to Debed and its upper stream.

Dzoraget - the other major tributary to Debed, Tashir being its major tributary.

After confluence of Dzoraget and Pambak rivers, river Debed flows out of Armenia at 70km, of which the last 10km it flows along Armenia-Georgia border.

Debed with its tributaries has large irrigation and energy potential.

Aghstev – river originates from northern slopes of Pambak ridge. In upper stream it flows through Margahovit depression, after extends near Dilijan and Ijevan towns. It flows into Kura river. The largest tributaries are Getik and Voskepar.

Small tributaries to Kura river – A number of small tributaries to Kura originate from northern slopes of Miapor ridge within the Republic. Comparatively large ones of them are Hakhoum and Tavoush rivers.

The flow of Hakhoum, Tavoush and Khndzorout rivers is regulated by reservoirs and used for irrigation purposes.

Brief characteristics of Armenian rivers

Table 1

Name of river	Catchment area sq.km		Length, km		Flow mln.cub.m
	Total	including within Armenia	Total	including within Armenia
Araks	102000	22600	-	192	-
Akhouryan	9700	2784	-	186	391
Metsamor	480	480	38	38	711
Cassakh	1480	1480	89	89	329
Hrazdan	2560*	2560*	141	141	733
Marmarik	-	427	-	37	-
Azat	-	572	-	40	232
Vedi	-	-	-	-	110
Arpa	2630	2080	-	128	764
Elegis	-	516	-	47	-
Vorotan	5650	2030	-	178	725
Voghji	1175	788	-	82	502
Meghri	-	336	-	36	166
Debed	4080	3790	-	176	1203
Pambak	-	1370	-	84	-
Dzoraget	-	1460	-	67	-
Tashir	-	470	-	54	-
Aghstev	2500	1730	-	121	445
Hakhoum	352	248	71	41.5	199
Tavoush	1180	229	63	29.5

* Without Lake Sevan’s basin

Lakes of Armenia Sevan and Arpi lakes are of great importance in terms of their sizes and economic use. Besides, there are about 100 mountainous lakes of local importance. Those lakes are mainly located at altitudes exceeding 1500m above sea level and differ from each other by their origin and sizes.

Lake Sevan is the largest lake in the Caucasus. At the same time it is one of the largest mountainous fresh lakes in the world. Before artificial decline of the lake (1950), its mirror surface was 1416sq.km, which, together with the catchment area of the lake is about 16% of the area of Armenia. From catchment basin 29 rivers and small rivers flow into the lake. Their average annual run-off is 26.8 cub.m/sec. The major part of the flow is the flow of spring freshets. During 1947 to 1995 the water of the lake has been unsoundly used for energy and irrigation purposes. As a result, the water level has declined 19m, almost reaching the limit level of river Hrazdan floodgate and the water volume in the lake has reduced with around 44%.

With the purpose of maintaining the lake level, reaching it to optimal height in the future, termination of energy releases and regulating the irrigation releases, Arpa-Sevan water main has been constructed, which transfers on average annually 250 mln. cub.m. water from Arpa river to Lake Sevan. Construction of Vorotan-Arpa tunnel is in the stage of completion. Through that tunnel 165 mln.cub.m more water will be transferred from river Vorotan to Lake Sevan. Construction of Yeghvard reservoir, which would save annually around 94mln. cub.m water released from the lake for irrigation purpose, has been left unfinished. After implementing Vorotan river flow transfer and finishing Yeghvard reservoir construction, it will be possible to increase the lake level with 6m during the coming 20 years, which in its turn will allow to rehabilitate the disturbed ecological condition and water quality of the lake, create strategic water reserve in the lake, use the lake water for water supply.

Lake Arpi – is located in the western part of Ashotsk depression at an altitude of 2020m above sea level. Thanks to the dam constructed with the purpose of solving irrigation problems the lake became a reservoir.

Reservoirs. The reservoirs of Armenia have been mainly constructed in Soviet period. The main purpose of reservoir construction is seasonal or annual regulation and redistribution of river run-off.

The reservoirs functioning in Armenia mainly serve for irrigation purposes. Some reservoirs are of energy, water supply, recreation, fish production, environmental importance. A number of the mentioned reservoirs of complex importance confront also mudflows.

The largest one is Akhouryan reservoir with a capacity of 525 mln. m³ .

Spandaryan reservoir with 257 mln.m³, is the second largest reservoir, however it is specific from the point of view of flow regulation. It can carry out many year flow regulation, as its active storage capacity is close to the river midstream flow value in the reservoir section.

Many of the small lakes constructed on Aragats mountain’s south-western slopes and fed from flood waters (Talish, Talin, Kaqavadzor, Bazmaberd, Katnaghbyur) have only from 10 thousand to 50 thousand cub.m capacity.

Summing up the information characterizing water resources, the following could be noted:

1. Water resources are distributed unevenly throughout Armenia.

2. Armenian rivers are of typical mountainous nature with features characterizing them: sharp seasonal variations, spring freshets and low water summer flow.

3. The need and efficiency of regulating water flows in Armenian rivers is obvious. It will allow cumulate flows during spring floods and use them during summer season in parallel with irrigation water demand increase. By the way, this process is favorable both for Armenia and neighboring downstream Georgia and Azerbaijan.

Water use

Water use sectors in Armenia are: irrigation, water supply to population, energy (thermal and hydro-power plants), industry, fish production, recreation, etc.

The indexes of water use by the main sectors during the recent 15 years are provided in Figure 1.

Figure 1. Indexes of main water use sectors

Irrigation sector is the main water user. According to the data of the RA Ministry of Agriculture the irrigated land area is 640.000 ha or 67% of total agricultural lands. The total area of usable lands, which was 340.000 ha in 1987, reduced to 274.000ha in 1998. The area of irrigated lands in 1987 was 314.000 ha and reduced to 188.000ha in 1998.

The irrigation water volume reduced to 1.3 mlrd.cub.m in 2000, as compared to 2.7mlrd. cub. m in 1988.

Such a decline in irrigated land use is mainly conditioned with low efficiency of operation of pump stations requiring large power volume. During recent years works have been carried out for replacing the pump irrigation systems with gravity systems, reconstruction and improvement of engineering structures, increasing the systems’ efficiency and developing new land areas.

Perspective indexes of irrigation water demand by river basin, according to the data of ArmDesignInstitute (Integrated Water Resources Management project) are provided in Table 2.

Irrigation demand prediction by river basin (mln.m³)

Table 2

No.	River basin	2005	2020
1	Debed	175.0	178.0
2	Aghstev and Joghaz	106.0	100.0
4	Small tributaries to Kura	45.0	59.0
5	Akhouryan	469.0	694.0
6	Cassakh	133.0	124.0
7	Araks	377.0	385.0
8	Metsamor (Sev jour)	475.0	480.0
9	Hrazdan	956.0	924.0
10	Lake Sevan	111.0	107.0
11	Azat	66.0	60.0
12	Vedi	14.0	45.0
13	Arpa	110.0	156.0
14	Vorotan	121.0	130.0
15	Voghji	19.0	31.0
16	Meghri	17.0	18.0
17	Hrazdan-Araks	128.0	171.0
	Total	3322.0	3662.0

Irrigated land area in 2005- 290,000ha

Irrigated land area in 2020 - 386,000 ha

Municipal water supply

The municipal water supply area is the second main water user. For providing drinking water demand of population mainly underground water resources are used. Only about 50% of the total water demand is taken from surface water resources, which is subject to treatment.

Municipal water supply systems provide water supply to the population and various objects, including industrial enterprises functioning in residential areas.

In this sector to, sharp changes in water use volumes have been noticed during recent 15 years. In stead of 750mln. cub, m water use volume in 1988, it was 500mln. cub.m in 1995. This decline tendency is mainly explained by sharp reduction of industrial water demand, as well as operation of pump systems in limited regime.

Municipal systems have appeared in generally poor technical and financial conditions. Because of many year operation without repair and serious investments the degree of exhaustion of the systems’ engineering structures and pipelines, number of breakdowns, consequently the leakage level have increased. The indexes of perspective water demand of municipal water supply are provided in Table 3.

Drinking water perspective demand

(according to the data of JINJ company – Integrated Water Resources Management Project)

Table 3

№	River basin	Water demand mln m3/year
		2010	2020
1	Debed	53.7	56.2
2	Aghstev	17.2	18.0
3	Hakhoum-Tavoush-Hakhinja	4.4	4.6
4	Akhouryan	50.8	53.2
5	Cassakh	17.1	17.9
6	Metsamor	40.5	42.4
7	Hrazdan	294.2	308.1
8	Lake Sevan basin	30.3	31.8
9	Azat	5.5	5.8
10	Vedi	21.9	23.0
11	Arpa	8.4	8.8
12	Vorotan	11.6	12.2
13	Voghji	9.7	10.2
14	Meghri	2.0	2.1
	Total	567.3	594.3

The wastewater systems of residential areas are also in a poor condition. None of the 20 municipal wastewater plants functioning in the past is operated at present. Only Yerevan wastewater treatment plant is operated to some extent, just its mechanical treatment grids.

The wastewater systems of all the towns and around 250 villages of Armenia are also in an extremely poor situation because of lacking repair and renewal works. The number of breakdowns has sharply increased.

The water born diseases has become very often because of drinking water pollution. The carried out studies evidence about a great number of quality infringements of the drinking water supplied through water supply systems. Around 17% of the total samples taken for bacteriological analysis do not correspond to the required criteria.

Industry

A part of industrial enterprises in Armenia provides it water demand from own (or group) water supply systems, the other part uses municipal water supply systems. As a result of the USSR collapse many industrial enterprises stopped their operation, which had its impact in the process of sharp water use decline. In 1998 water use reduced 55mln. cub. m in stead of 220mln. cub.m in 1995. The industrial sector of course is not considered a major water user, however, an important problem for this sector is implementation of industrial wastewater removal and treatment process.

Hydropower

There are 35 high- and mid- capacity hydro-power plants in Armenia, 9 of which are the plants of Vorotan and Hrazdan hydro-power cascades. The total capacity of HPPs is estimated 1020MV, of which 800MV is used. The HPPs at present generate 25% of total energy production of the country. As a result of insufficient regulating volumes the hydro-power production is also subject to seasonal variations. At present works for HPPs improvement, construction of new high- and mid- capacity plants, involvement of private sector are being carried out.

2. LEGAL AND POLITICAL CONDITIONS

Water relations in the Republic of Armenia are regulated by the RA Water Code, laws and corresponding regulations. It is worth mentioning that since the very beginning of independence the Government of Armenia has kept the issues of efficient water resources management and regulation of water relations at the center of its attention. After a series of serious activities, the concept paper on “RoA Water Resources and Water Systems Management Reformation” was developed based on the outcomes of the World Bank funded project on “Integrated Water Resources Management” (IWRMP) implemented in Armenia during 1999-2001 (executors – IWACO – Holland, Norconsult -Norway and JINJ -Armenia). The concept paper was approved by the RA Government (N 92 Decision as of 9 February 2001 of the Government of the RA). This concept paper further became the basis of legal and institutional reformations to be carried out in Armenian water sector.

In the process of water sector reformations implementation adoption of the RA Water Code in 2002 was of essential importance. The Code approved the objectives of water resources protection, management and sustainable use, as well as approaches to solution of the problems important for the field. Aimed at water resources protection, management and reasonable use, as well as solution of important sector problems, the Code approved the development of National Water policy and National Water program. Dividing of water resources protection, management and use functions and application of integrated water resources management principles, during implementation of which the geographical river basin area shall be accepted as a unit area, are approved both in the concept paper and in the Water Code.

The Water Code established a number of principles for management, use and protection of water resources and water systems, the basic ones of them being:

- satisfaction of the basic vital needs of the present and future generations, related to water resources;

- maintenance and increase of volumes of the national water reserve;

- water use shall be regulated through water use permits;

- encouragement of efficient use and fair principles of useable water resources accessibility;

- acceptance of conjunctive and integrated management of ground and surface water resources;

- recognition of importance of public participation and awareness in the processes of management and protection of water resources;

- the use of water resources is permitted only in conditions of their protection and restoration;

- the water resources are a constituent part of the ecosystem and the natural landscape, and their protection shall be stipulated by the maintenance of balance within the given ecosystem.

The Water Code of Armenia regulates also the conditions of use and protection of transboundary water resources. The transboundary water relations shall be established by inter-state agreements and (or) treaties between the Republic of Armenia and neighboring countries. Based on it, the “Commission of the Republic of Armenia of Transboundary Water Resources” has already been established, the authorities and obligations of which are as follows: (the Commission)

- Draws up and submits to the Government drafts of inter-state agreements;

- Draws up and submits to the Government proposals on establishing joint permanent inter-state commissions for operation of transboundary water systems;

- Informs the authorized bodies of the Republic of Armenia in the established order on the transboundary impacts;

- Presents the decisions of the Permanent Inter-State Committee to the Water Systems Management Body;

- In the established order, presents to the authorized bodies of the Republic of Armenia the disputes occurred in the Permanent Inter-State Committee.

Separate chapters of the RA Water Code reflect the requirements to the water use permits and water system use permits. It is worth mentioning that, being the state monopoly property, water resources can be used only by water use permit. Unlike the water use permits existing in the past, it is the water users’ property and can be transferred to other persons as inheritable or succeeded property, for which the agreement of Water Resources management authority is required. For reflecting, as well as applying the Code’s requirements in the economic development programs of the Republic, the Code approved development of National Water Program (NWP), which further shall be approved by the National Assembly upon presentation of the Government of the RA by adoption of corresponding law.

The NWP shall include:

- Quantities of national water reserve and water resources as well as the measures directed to preserving and enhancing national water reserves,

- Main problems of maintenance and development of the sector,

- Identification criteria for water systems of state significance and the list of these systems,

- Description, scopes and schedule of implementation of the planned measures;

- Established maximum and minimum water use permit fee (water use fee);

- Estimated financial requirements necessary for the implementation of the National Water Program and proposed sources for funding:

The National Water Program includes also by water basin management areas:

1. Boundaries, quantity, quality of water available, and classification of water resources,
2. Classification of water systems,
3. Volumes of the National Water Reserve and measures to enhance its preservation;
4. Current water use by various sectors and associated complex impacts to water resources allocation;
5. Water demand based on priorities;
6. Criteria for effectiveness of current water conservation and management activities, volumes of defined environmental flows and maximum allowable volumes of irreversible water withdrawal to ensure maintaining of safe environmental state of water resources and ability for self-restorability;
7. Strategy for storage, allocation and use of water resources;
8. Measures to improve water resources monitoring and pollution prevention, including the application of modern technologies;
9. Water standards;
10. Description of actions to be taken by various State government bodies for implementation of the program and their coordination;
11. Expenditures and income related to the implementation of the program;
12. Mechanisms to ensure public awareness;
13. List of specially protected basin areas or parts thereof, for surface and/or ground waters of which or for fauna and/or flora directly depending on them application of special protection system is needed;
14. Emergency and ecological disaster zones in water resources;
15. Description of the threats to the health of critical watersheds and wetlands and counter measures to prevent any negative impacts to water ecosystems.

The Water Code approved also the requirements for the National Water Policy, which shall establish perspective objectives and problems for strategic development of water resources use and protection, based on which water use priority principles are established, etc. According to the Code enforcement measures, numerous legal acts and normative documents, as well as National Water Policy and National Water Program should have been developed so far. However, because of lacking corresponding financial means, those activities have not been completed yet. So far more than thirty regulations and normative documents have been developed. A number of legal acts of the long list of the documents have already been adopted and enacted. Some preparatory works have been carried out towards development of National Water Policy provisions and National Water Program drafts.

It is to be mentioned that taking into account the fact that the Water Code has not yet a sufficient period of practical experience (it has been applied since October 2002) and considers all the possible issues of water relations regulation, it is early to speak about the efficiency of the legally ratified approaches, since many legal acts and procedures are in the course of development yet. At present trials are being done to revise the Water Code. However, such an approach is very dangerous, as it can result in an everlasting process of the Code development. It is more advisable to allow the Code to be completely applied during 3-5 years and make necessary addenda and changes only based on the weaknesses identified during that period.

Among the legal documents related to water resources, the Law on Lake Sevan is to be mentioned that was adopted in 2001. The law establishes the legal and economic bases of the state policy for natural development, rehabilitation, natural reserves’ reproduction, protection and use of Lake Sevan, as an ecosystem of environmental, economic, social, scientific, historic-cultural, aesthetic, healthcare, climate, recreation and ethical value of strategic importance. However, the law provisions are of declarative nature and the law needs revision at present, in order to make it more practical. At present works are being carried out for that purpose. Another law, directly related to this field is the RA Law on “Provision of the Population Sanitary and Epidemic Safety”. This law ratifies the general requirements for provision of the population’s sanitary and epidemic safety in water supply and wastewater field. Independent on the water use type (drinking, household, economic, industrial, technical purposes) the water quality shall comply with the sanitary rules and standards, and the authorized state bodies shall carry out measures for water supply system protection, development and for providing the population with high quality water. In case of water quality not complying with the sanitary rules, the water source use by enterprises, institutions, organizations and citizens shall be terminated, according to the decision of the RA Hygiene and Anti-epidemic State Service. This law envisages mandatory sanitary-hygienic expertise, which shall be carried out also for the objects with chemical and biological discharges and effluents to the environment.

After obtaining independence, the South Caucasus countries have signed and ratified a number of international conventions regulating water resources management:

· Convention on Environmental Impact Assessment in a Trans-boundary Context (Espoo,1991)

· Convention on Water and Sustainable Development, (Dublin, 1992)

· Convention on Protection and Use of Trans-boundary Watercourses and International Lakes (Helsinki, 1992)

· Water and Health Protocol under Convention on Protection and Use of Trans-boundary Watercourses and International Lakes (London, 1998)

· Convention on Access to Public Information, Public participation in Decision-making and Access to Justice in Environmental Matters (Aarhus,1998)

· Convention on Trans-boundary Impacts of Industrial Accidents (Helsinki, 1992)

From those documents Armenia has ratified:

· Convention on Environmental Impact Assessment in a Trans-boundary Context (Espoo,1991) and protocol of the Convention

· Convention on Access to Public Information, Public participation in Decision-making and Access to Justice in Environmental Matters (Aarhus,1998)

· Convention on Trans-boundary Impacts of Industrial Accidents (Helsinki, 1992).

Armenia has only signed: Water and Health Protocol under Convention on Protection and Use of Trans-boundary Watercourses and International Lakes (London, 1999)

Aimed at regulating water resources management issues in the region a number of projects are being implemented with financial and expert assistance of international organizations, which are mainly focused on improvement of legislation and monitoring system and their primary objective is assisting in river basin management process.

The following projects have been implemented so far in the Republic of Armenia in water resources management field:

· USAID/DAI project on “Water Management in the South Caucasus”, which has been implemented since 2001 in Khrami/Debed (Armenia-Georgia) and Alazani (Georgia-Azerbaijan) river basins. One of the main objectives of the project was demonstration of integrated river basin planning process in the mentioned areas and capacity building at local level for implementing the process. Within the framework of the project Armenian “JINJ” company proposed an integrated river basin planning methodology using water resource mathematical modeling. For Stepanavan town feasibility study of water supply, wastewater and solid waste systems has been carried out.

In Armenia the project cooperates with “ArmHydromet” state service and was aimed at reconstruction of observation posts in Debed river basin and afterwards, obtaining accurate qualitative data on water resources. This, in its turn, allowed having a perfect data base for water quality in “ArmHydromet” service. Within the framework of this project training courses were planned for Lori marz’s state employees, thanks to which the specialists had the possibility to familiarize themselves with the new equipment in the fully reconstructed posts. Within the framework of this project the Northern river basin management authority has been established (one of five river basin management authorities planned under the project), web pages have been prepared for “ArmHydromet” services (Yerevan and Vanadzor cities), inserting and updating the received data. The project has been carrying out extensive activities in Lori marz towards public awareness raising and providing public participation in water resources management issues; a number of pilot projects have been implemented. The project is in course of implementation.

· USAID/ARD project has assisted the working group organized by the National Assembly and the Government in the “RA Water Code” development and at present continues cooperation with the RA Ministry of Nature Protection for re-equipping water quality monitoring laboratory, “ArmHydromet” service and “Water Resources Management Agency”.

· During implementation of TACIS “Joint river management” regional project considerable steps have been made in transboundary quantity monitoring improvement process. The project covers 5 regions. In the RA it is aimed at receiving qualitative data on waters belonging to Kura river basin, importing laboratory equipment with this purpose in 3 South Caucasus states, as well as training of specialists. The project has been completed.

· Within the framework of NATO project “Science for Peace” scientific grant project aimed at establishment of water resources quality monitoring data base in South Caucasus region. In the RA project is implemented by the RA NAS econoospheric center. Within the framework of the project it is planned to bring from the USA and install new equipment diagnosing water quality (content of heavy metals, acids and other compounds), as well as equipment for field measurements. The project cooperates with “ArmHydromet” service and provides data also to the RA NA Permanent Commission for Social, Healthcare and Environmental issues, which further, during official meetings allows the deputies having actual data on the water quality of rivers flowing out of the RA. The project is in course of implementation.

3. INSTITUTIONAL AND REGULATING CONDITIONS

Absence of integrated water resources management and planning approaches has had its impact so far on formation of social, economic, legal and ministerial conflicts during water resources protection, management and use processes. Each sector, working out its own development concept, policy and strategy has individually approached to water resources use problems. As a result we have had conceptual programs for development of important fields of economic activity, which, along with economic justification, included the approaches satisfying the water use demands of the given sector.

The Water Code adopted in 2002 clarified the Armenia water resources management institutional structure. According to the WC the Armenia water resources protection, management and use functions were divided among three authorities.

According to the WC, National Water Council (NWC) has been established under the chairmanship of the RA Prime-Minister, which is the superior consulting authority in water resources management field. The NWC through intersectoral participation discusses and makes recommendations on the National Water Policy, National Water Program and other related to the area legal acts. The NWC’s composition and charter shall be approved by the RA Prime-Minister’s decision. Within the structure of the National Water Council the Dispute Resolution Commission (DRC) has been established and functioning. The DRC is an authority, which resolves disputes related to water relations. During its activity it shall be governed with the Armenian Constitution, Water Code, laws, other legal acts and its Charter. Development of policy in water relations, issuing water systems use permits to non-competitive water suppliers is carried out by the Regulation Commission (RC).

Water Resources Management and Protection Body

shall coordinate preparation of the draft National Water Policy and National Water Program of the RA, implement water resources management and protection within the framework of the adopted policy and National Water Program, develop the principles and norms for ecological-economic substantiation of assessment of the impact on water resources as a result of economic activity, classify water resources by use function and status, approve allowed quantities of surface and ground water extraction, provide for development of water basin management plans and implementation thereof, in accordance with its own adopted regulations, receive water use permit applications through the authorized bodies, issue water use permits, facilitate water resources monitoring and incorporate water resources monitoring results in the planning and management process, coordinate development and implementation of projects related to water resources management and protection. Aimed at implementation of the above mentioned authorities, according to the RA Government Decision as of 30.01.2002 N82 the RA Water Resources Management Agency was established under the RA Ministry of Nature Protection.

For promoting decentralized water resources management in the Republic, regulating river basin management, essentially improving water resources use programs and control activities, the RA Government decided to establish 5 Water basin management authorities under the Water Resources Management Agency and has approved the schedule for transferring to water basin management. For implementation of water resources monitoring in the Republic, operative data collection, processing and summing up, registration of reports, as well as regulation of the legal relations related to implementation of the mentioned functions by the authorized state bodies, the RA Government approved Procedures for the monitoring of water resources and registration of reports by its decision N639-N as of 22.05.2003, which makes clear the monitoring composition and order of implementation. The monitoring shall be carried out by the RA Ministry of Nature Protection at the expense of the RA state budget.

As a positive step it could be mentioned that during the past 2003 USAID repaired and re-equipped “Environment monitoring laboratory” with modern equipment. It is responsible for receiving qualitative data on water resources and establishing a data base in this field. Training courses have been carried out for the laboratory staff. T The observation posts on Hrazdan river, as well as the Republican “Hydrometeorology and Environment Monitoring Agency” and its branch in Lori have also been re-equipped.

These activities will allow having a water quality and quantity data base.

Water resources protection functions have been left after the corresponding department of the RA Ministry of Nature Protection. Because of the changes taken place in 2003 in the structure of the RA Ministry of Nature Protection, the separate natural resources protection departments joined within one “Environment protection department”. One of the divisions of the department provides biodiversity and water resources protection. Will the given change positively, or negatively influence the process of protection function implementation, will the resource protection mechanisms, including those for water resources, be weakened? It will come apparent later.

The regulation of water resources management functions is implemented by the “State Committee for Water Economy” under the RA Government, which is charged with the functions of regulation and management of water (drinking water supply, wastewater, irrigation) systems operation, management and use process; assistance in engaging private investors.

The structure of the State Committee includes:

- the following units operating drinking water supply and wastewater systems and implementing investment projects: “Armenian Water and Sewerage” CJSC, “Yerevan Water and Sewerage” CJSC, “Nor Akounq” PIU SE (established in 2004 ), “Municipal development management unit” SE,

- the following units operating irrigation systems and implementing investment projects: “Vorotan-Arpa-Sevan” tunnels operating organization, “Vorogum-jrar”CJSC with its 4 branches, “Water economy development and reformations” PIU SE

Below the organizational structural scheme of Armenian water resources protection, management and use is provided.

Water resources management in Armenia is planned to be carried out through integrated planning, which is a mutually agreed package directed to water resources protection, management and use. The package shall take into account providing to the extent possible the demands of water users of various locations and importance, based on water supply (offer) in corresponding areas if river network. Integrated water resources management plan (IWRMP) regulates the sector water relations and plans provision of cooperation both inside our country (at sub-basin level) and between countries at inter-state level (transboundary water resources).

As a water system management weakness it could be mentioned the circumstance that water resources management and protection functions are given to a single management authority – the RA Ministry of Nature Protection, which is in conflict with the concept paper adopted in 2001 and can hinder efficiency and purposefulness of water resources protection, management and use processes.