PROJECT INFORMATION DOCUMENT (PID)
CONCEPT STAGE
Report No.: AB3716
Project Name
GEF Shanghai Agricultural and Non-point Pollution Reduction
Project
Public Disclosure Authorized
Region
EAST ASIA AND PACIFIC
Sector
Solid waste management (45%); General water, sanitation and
flood protection sector (45%); Sewerage (10%)
Project ID
P090376
GEF Focal Area
International waters
Borrower(s)
SHANGHAI MUNICIPAL GOVERNMENT
The People's Republic of China
China

Implementing Agency

Shanghai Municipal Government
China
Public Disclosure Authorized

Environment Category
[] A [X] B [ ] C [ ] FI [ ] TBD (to be determined)
Date PID Prepared
October 23, 2008
Estimated Date of
January 12, 2009
Appraisal Authorization
Estimated Date of Board
July 31, 2009
Approval
1. Key development issues and rationale for Bank involvement

Shanghai Municipality, with a population of 18 million by end of 2006, has maintained an
Public Disclosure Authorized
annual double-digit economic growth over 14 consecutive years. It is expected that Shanghai
will maintain over 9 percent of economic growth per annum during the 11th Five-year Plan
(2006-2010) period with its population reaching 19 million in 2010. While reaping significant
benefits from its strong economic performance in terms of enhanced competitiveness and
improved living standards, Shanghai is facing serious constraints in terms of resource and
environmental sustainability as a result of this rapid economic and population growth.
The rural areas in Shanghai account for some 60-70% of the loads of nitrogen, phosphorus, and
other organic matters discharged to watercourses, largely from the agriculture/livestock sector. In
the area adjacent to the Changjiang (Yangtze) River estuary and Hangzhou Bay, and in the coast
of East China Sea, hypoxia and eutrophication are serious problems. The nutrient loading to the
marine environment through freshwater inflow has resulted in an increased frequency of harmful
algal blooms in the East China Sea. The water quality in the Huangpu River (discharging to the
Public Disclosure Authorized
East China Sea through the Yangtze River), the main source of drinking water for Shanghai, has
become increasingly polluted over the past ten years, now rendering it marginally acceptable as a
source of drinking water.

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Pollution in the rural areas to Huangpu River and the East China Sea comes from the following
major sources:
(a) Livestock wastes. Out of 7.6 million metric tones (mt) of annual livestock wastes, about
40% is discharged to waterways due to lack of effective treatment facilities. This implies
an approximate 106,000 mt of chemical oxygen demand (COD), 55,400 mt of biological
oxygen demand, 18,000 mt of total nitrogen and 4,300 mt of total phosphorus enter the
water environment. This was echoed by a recent study1 which reveals that approximately
30% of the COD in the Huangpu River derives from pig and chicken wastes.
(b) Untreated domestic wastewater from rapidly-urbanizing villages and towns in suburban
areas. Although the farmers' living standards have steadily improved and the urbanization
rate has reached 62%, the domestic wastewater treatment rate in the rural area is below
40%. Some 500,000 m3 of partially treated domestic sewage are discharged daily into the
water environment in Shanghai. This is the second largest pollution source in the rural
areas.
(c) Farm straw. Also, most of about 1 million mt of straw left annually on the farmland
eventually flows into the waterways because the straw is no longer a preferred source of
fuel due to the widespread use of natural gas.
(d) Non-point agricultural run-off fertilizers and pesticides. Statistics show that Shanghai
suburban farmers use more chemical fertilizers and pesticides than the national average,
which generates significant pollution loads.
Shanghai Municipal Government (SMG) recognizes the need to address the water pollution
issues in order to achieve its objective of becoming a world-class economic and trade center. An
ambitious overall program was launched in 2003, supported by the first IBRD adaptable program
loan (APL) to China of US$700 million, supporting a US$1.5 billion investment program
(Shanghai Urban Environment Project) in three phases. The objective of the program is to
improve environmental conditions in the Greater Shanghai Municipality by progressive
development and implementation of integrated, metropolitan-wide environmental management
measures. While Shanghai is undertaking many critical investments for environmental
improvement, with and beyond IBRD support, it has focused mostly on urgent municipal and
industrial wastewater treatment. Now, agricultual and rural non-point pollution issue has been
accorded greater attention to become one of SMG's priorities on its environmental agenda. More
recently, SMG has been using the Shanghai World Expo 2010 as an opportunity to further
improve environmental conditions.
The Shanghai Agricultural and Non-Point Pollution Reduction (SANPR) Project will support
two of the three Country Partnership Strategy themes: (i) managing resource scarcity and
environmental challenges; and (ii) improving public and market institutions. The SANPR Project
will also support the objectives of China's 11th Five-year Plan which aims to create a
"harmonious society" that balances economic growth with distributional and environmental
concerns. It also supports Shanghai's 3rd Three-year Environmental Protection Action Plan
(2006-2009) which aims to increase the treatment and recovery of livestock wastes as a resource
and reduce the dosage rate of chemical fertilizer by 10% and that of chemical pesticides by 8%.
1 Chreod Ltd. (2003) The Shanghai Metropolitan Region: Development Trends and Strategic Challenges

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Although SANPR Project is processed as a GEF stand-alone project, it will support the broad
objective of the Shanghai APL 3 project.
The project comes under the WB/GEF Investment Fund (IF) for Pollution Reduction in the Large
Marine Ecosystems (LMEs) of East Asia, which is managed in cooperation with the GEF/UNDP
Partnerships for Environmental Management of the Seas of East Asia (PEMSEA). PEMSEA is
part of the regional implementation plan of the UN Environment Program Global Program of
Action (GPA) for the Protection of the Marine Environment from Land-based Activities. The
objective of the IF is to scale up investment to reduce land-based water pollution in coastal areas
and major river basins in East Asia.
At inception, the IF and the SANPR Project were consistent with GEF's Contaminant-Based
Operational Program 10 (OP10), which aimed to demonstrate ways of overcoming barriers to the
adoption of best practices that limit contamination of International Waters. They are also
consistent with GEF's current Strategic Objective 2, "to catalyze trans-boundary actions
addressing water concerns," specifically to reduce land-based coastal pollution, and with
Strategic Program 2, "reducing nutrient over-enrichment and oxygen depletion from land-based
pollution of coastal waters in LMEs consistent with the GPA." As noted above regarding
hypoxia and eutrophication, the aquatic environment adjacent to Shanghai's coastline is one of
the main pollution hotspots in the East China Sea. The amount of nutrients reduced would be
closely monitored in the areas of intervention.
2. Proposed
objective(s)

The project development objective and global environment objective is to reduce the rural and
agricultural pollution to the East China Sea through demonstration of effective and innovative
pollution reduction activities in Shanghai's selected rural areas. Specifically, the project will
support: (i) comprehensive management of livestock wastes and recovery of straw as a resource;
(ii) rural wetland sewage treatment systems; and (iii) reduction in the use of chemical fertilizer
and chemical pesticides.
The project will investigate, explore, and select appropriate pollution management technologies
available in China and internationally, seeking overall cost-effective approaches and options.
The project would serve as a demonstration of the approaches and technologies applied.
In addition, the project would seek to strengthen dissemination of information and to provide
training within the agricultural communities in the project areas. The activities would be
designed to be readily suitable for replication elsewhere in Shanghai, China and beyond. The
dissemination and replication of these activities on a large scale in future would contribute to
water quality improvement in the East China Sea.
3. Preliminary
description

The proposed project would consist of the following four components to be implemented over a
period of three years (October 1, 2009 ­ December 31, 2012). These components were
restructured based on the Project components proposed in the Project Identification Form (PIF)
and in response to peer reviewers' comments made during PCN review but without any

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significant change of substance. The total cost of the proposed project is estimated at about
US$32 million, with an anticipated GEF grant of US$4.79 million.
Component A: Livestock Waste Management Technology Demonstration. Component
activities would include (a) livestock waste management of large farm, (b) livestock waste
management of medium farm, and (c) integrated livestock and agricultural waste management.
Component B: Wetland Sewage Treatment System. This component would facilitate (a) rural
town wetland sewage treatment system, and (b) village wetland sewage treatment system.
Component C: Integrated Agricultural Pollution Reduction Techniques. This component
would include (a) promotion of organic fertilizer, (b) scientific application of agricultural
chemicals (insecticides and pesticides), and (c) monitoring and extension.
Component D: Project Management and Dissemination. This component would support (a)
Project management (b) replicable strategy development, and (c) training and dissemination.
4. Safeguard policies that might apply
The following Safeguard policies will be triggered: (a) Environmental Assessment (OP/BP 4.01);
(b) Pest Management (OP 4.09); and Involuntary Resettlement (OP/BP 4.12). Safeguard policy
for Natural Habitats (OP/BP 4.04) may be triggered.
5. Tentative
financing
Source: ($m.)
BORROWER/RECIPIENT 26.87
Global Environment Facility (GEF)
4.79
Total
31.66

6. Contact
point
Contact: Hiroaki Suzuki
Title: Lead Operations Officer
Tel: (202) 458-0329
Fax:
Email: Hsuzuki@worldbank.org

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