ANNEX 3
PARTNERSHIP BRIEF
GEF Strategic Partnership on the Danube/Black Sea Basin, Element 3 -
World Bank -GEF Nutrient Reduction Investment Fund, Phase 1
The Challenge
1. The Black Sea is facing a potential ecological disaster. Its fragile ecosystems, stable
until the late 1960s, have gone into a steep decline caused by two events. The first of
these was a disruption of the ecological balance due to the eutrophication in large
areas of the sea, particularly the northern shallows, caused by increased nutrient loads
from agricultural, industrial and municipal sources along the coast and tributary
rivers, particularly the Danube. Second, native species have been destroyed by
aggressive exotic species introduced through ballast waters of ships, which have
thrived as a result of eutrophication. Together these events led to a sharp
deterioration in coastal water quality, an acute decline in benthic communities and a
rapid decrease in fishery yields.
Between the1960s and today, Romania and Bulgaria have seen a tenfold drop in the Black Sea
fishery catch; moreover, the catch is now skewed toward smaller less valuable species (only 6 of
the 26 previously commercially fished species). Extremely valuable algae beds have been
reduced from more than 10,000 square km to less than 1,500. Only a small fraction of 15 million
potential tourists has been realized (reductions of more than 50% are common) with huge
economic and employment losses to the littoral areas. Health impacts associated with
environmental degradation and inadequate infrastructure are also evident across the region, with
more than 21,000 cases of serious water-borne infections a year in littoral states.
2. The Black Sea and its main tributary the Danube River face additional threats from
growing international shipping traffic and from potential discharges of polluting
substances. The January, 2000 Tisza River cyanide spill, which originated in
Romania and wove its way downstream toward neighboring riparian countries, is a
prime example of how these shared water resources in Central Europe are vulnerable
to the effects of individual incidents and decisions.
3. While the Black Sea littoral states
Figure 1. Nitrogen loads to Black Sea
(Romania, Bulgaria, Turkey, Georgia,
Georgia
0.36%
Russia, Ukraine) quickly became aware
Romania
22.40%
of the economic losses caused by the
ecological degradation of the Sea and the
pollution originating in the Danube, it
Danube
became evident that any possible
57.84%
Ukraine
17.32%
solution would require a regional
Bulgaria
0.56%
approach. The Danube River contributes
Turkey
Russia
1.40%
the highest nitrogen loads to the Black
0.11%
Sea, with Romania being the largest
source(Figure1).

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Phosphorous loads from the Danube comprise a similarly large share relative to the
contribution from littoral states. No state acting alone could rescue either the sea or
the river, because all 17 states of the two wider drainage basins, including the riparian
states of the Danube and other rivers such as the Dnipro, Dnister and Don, contribute
to the cumulative nutrient and pollution loads. In response, the countries of the
region drafted and signed the Bucharest and Sofia Conventions for the protection of
the Black Sea and the Danube in the early 1990s and launched two complementary
Regional Environmental Programs. The structure of the Conventions and the
Programs, although complex, provides a framework for regional cooperation. It also
allows the linkage of the many actions and instruments to effectively address the
recovery of the ecological balance of the Danube River and the Black Sea.
4. Current poor economic conditions have resulted in a decline in the discharge of
nutrients and other pollutants to the Danube and Black Sea, accompanied by a
noticeable improvement in ecosystem conditions. This demonstrates that it is
possible to reverse the current degradation of the Black Sea over the medium to long
term if nutrient reduction measures are implemented. It also underscores the
importance and urgency of taking steps to prevent a return to higher levels of nutrient
and pollutant discharges now, before a more accelerated economic recovery and
expansion occurs. The severity of ecological degradation could be aggravated to the
point of irreversible damage, if the expected increase in economic activity is not
accompanied by well planned and effectively implemented preventive environmental
measures.
The Planning Process
5. The Global Environment Facility (GEF) has played an important role in supporting
the establishment of the Environmental Program for the Danube River Basin
(EPDRB) and the Black Sea Environment Program (BSEP) since the inception of
these programs in 1991 and 1993. GEF funding, with the support of the United
Nations Development Programme (UNDP) and the World Bank, has been
instrumental in helping establish regional coordination and institutional cooperation,
critical to successful implementation of the long-term multi-country strategy
supported by the two programs. GEF support has also been crucial in formulating the
Strategic Action Plans (SAPs) for the Danube River Basin and the Black Sea. These
efforts have raised awareness of the critical situation in the Black Sea, the pollution in
the Danube and its significance in contributing nutrient loads to the Black Sea.
6. The Danube River Convention has been in force since October 1998 with its
permanent Secretariat established in Vienna in 1999 and an operating budget of
contributions from the Contracting Parties, including the European Union (EU). The
Istanbul Commission, established in 1992 under the Bucharest Convention, has its
Secretariat in Istanbul which is also functioning and operating with contributions
from its littoral states. The two Secretariats have served as program implementing
agencies and coordinators of parties working on common water basin issues. They
also serve as primary information resource centers for Black Sea and Danube issues.
With the support of EU TACIS and PHARE, regional institutions and regional
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centers focused on priority international water technical issues needing focused
attention (i.e. biodiversity, monitoring, oil spill control, etc..) have been established in
various member countries, and their work has increased the regional implementation
capacity for future interventions.
7. The Danube and Black Sea Programs, with support from GEF, have developed
strategies and identified priority "hot spots" for investments where interventions are
needed to address transboundary concerns, particularly nutrient reduction. However,
to date, there has been limited investment in the priority projects identified by the two
SAPs, and those which have been implemented are ad hoc in focus and impact.
Black Sea and Danube "hotspots" have not yet figured prominently in national public
investment priorities. This is understandable, because key environmental benefits of
addressing these hotspots are primarily transboundary, and potential local benefits of
the investment have not been highlighted, or fully understood. Also, the economic
crisis has limited the availability of national funds.
8. For future interventions, the GEF and its implementing agencies (UNDP, UNEP, and
the World Bank) have agreed to a Proposed GEF Partnership on Nutrient Reduction
for the Danube/Black Sea Basin that supports next steps in implementing the Danube
and Black Sea SAPs. The Partnership's programmatic approach includes two
regional projects to assist countries in their efforts to adopt policy, legal, and
institutional reforms through the Danube and Black Sea Secretariats and an
Investment Fund to co- finance nutrient reduction investments. Under this Partnership
with GEF, the UNDP and UNEP will focus on implementing the two technical
assistance projects, and the World Bank will administer the Nutrient Reduction
Investment Fund.
9. The World Bank GEF Investment Fund for Nutrient Reduction was endorsed by
World Bank ECA Management in May 2000. A concept paper was distributed at the
May 2000 GEF Council meeting together with three model project types, with the
understanding that the Partnership would be submitted to the November, 2000
Council for approval. The Partnership was presented to the Black Sea and Danube
Commissions at meetings in June and September, 2000 where their endorsements of
the proposal were received. The Partnership could not be submitted to the November
2000 GEF Council Meeting due to an unexpected GEF funding shortage. As a result,
the Council was provided with a progress report for the November meeting. A
decision on procedural arrangements between GEF and the two agencies in the light
of funding shortages was reached in December, 2000 and posted on the GEF
Secretariat's web site. Council submission of the Partnership was deferred to May
2001 with funding of a reduced first tranche for the Investment Fund, and the
remaining funding to be allocated against progress reports at future GEF Council
meetings.
10. Within the World Bank, a Partnership Coordination team has begun to work with
program team leaders in the Bank infrastructure, environment and agriculture sectors,
as well as with Bank country units to raise awareness in regional client countries on
the need for nutrient reduction in the Black Sea/Danube Basins and the availability of
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the Investment Fund. These efforts have led to initial project proposals by several
countries. The European Commission (EC) has declared its strong support for the
restoration of the ecological balance in the Black Sea and its readiness to take the
political lead in promoting the Partnership objectives. An interagency and donor
meeting was hosted by the EC in February 2001, with the aim of establishing better
coordination for nutrient reduction investment financing among IFIs, and multilateral
and bilateral donors. The Commission has indicated its readiness to cooperate with
the Investment Fund through its various regional investment programs (Phare,
TACIS, ISPA, Europe Aide, SAPARD, MEDA Turkey) under a Memorandum of
Understanding between the EC and the World Bank, signed in March 2000.
The Proposed Nutrient Reduction Investment Fund
11. An Investment Fund funded by the GEF and implemented by the World Bank,
focused on the recovery of the Black Sea, is proposed as a means for catalyzing an
investment response necessary to accelerate urgent action by a wide group of
stakeholders. This Investment Fund will provide a regional context under which
countries can pursue investments aimed at common nutrient reduction goals, and help
jump start and further accelerate key investments. As a part of this partnership, the
GEF will commit to a targeted envelope of US$70 million, approved in several
tranches based on progress reports submitted to the GEF Council.
12. The World Bank's role in the Partnership will be to promote use of the Partnership
funds in country-based dialogues with stakeholder governments; to promote inclusion
of Black Sea/Danube issues in the ongoing Country Assistance Strategy (CAS)
process; to promote policies that address nutrient reduction; and to use the Bank's
convening powers to engage other donors and partners in helping meet financing
needs. Grant funds provided under the Partnership will both help leverage World
Bank investment lending with borrower countries, and attract additional resources
from other international lenders and donors toward the same nutrient reduction
objectives.
13. Four key elements of an Investment Fund are: (1) the up- front commitment to an
envelope of funds by the GEF Council to signal the availability of a predictable
envelope of grant financing for beneficiary countries and co- financiers to access; (2)
delegated autho rity for project approval to the GEF Chief Executive Officer; (3) the
bundling together of critical investment needs to promote higher political visibility
and interest; and (4) a design framework that takes advantage of on-the-ground
learning to replicate and transfer investment experiences throughout the region.
These four key elements provide the backbone of the strategy proposed.
14. A strategic regional approach to investments has a number of important advantages.
A regional investment framework provides a vehicle for focusing individual country
investments on regional objectives, helps to transfer knowledge and share best
practices, and promotes adoption of policies to achieve common objectives.
Stakeholders in individual countries can gain satisfaction from knowing they are
doing their part to contribute to wider regional investment. A regional framework
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provides a better mechanism for cooperation with a multitude of diverse partners, for
example, the EU has a significant role to play as a political mobilizer for action and
cofinancier of investments in this region. A strategic versus individual project-by-
project approach provides a more cost-effective vehicle to demonstrate benefits. A
strategic approach will also help provide a targeted timeframe to promote action over
a shorter period so that more tangible results can be achieved
Implementing the Investment Fund
15. Role of the Bank. Overall program management and oversight responsibility will rest
with the World Bank. In addition, the World Bank will commit to:
· Promoting the Investment Fund in country dialogues;
· Including the Black Sea and Danube perspectives in relevant World Bank
Country Assistance Strategies (CASs) as they are updated;
· Promoting policies that address nutrient reduction as part of country dialogues;
· Being a champion and helping to mobilize funds for nutrient reduction
investments in dialogue with countries and the donor community;
· Working closely with UNDP and UNEP to maximize coordination between the
regional TA projects and individual investment projects; and
· Working closely with the Secretariats of the two Commissions on the project
selection/preparation process, ensuring that the projects address priority hot spots
and actions, and during implementation, keeping them informed on the project's
progress and impact.
Administrative costs for management of the Partnership will be provided by standard
GEF agency fees, which will be over and above the US$70 million intended for direct
investments.
16. Types of Projects1. Three types of projects (or a combination thereof) will be
eligible for financing under the Partnership:
· Restoration or creation of wetlands that reduce nutrients discharge or loads.
· Reform and improvement of agriculture and land management practices with
impact on nutrient use and/or non-point discharges through run-off.
1 Three model projects were presented with the proposed Partnership paper to the May 2000 Council:
Russia-Rostov Reduction of Nutrient Discharges and Methane Emissions Project; Bulgaria Wetlands
Restoration and Pollution Reduction Project; and Romania Black Sea Agricultural Pollution Control
Project. The projects are at various stages of preparation. Draft Project Concept Documents are attached to
this document.
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· Wastewater treatment in communities and industries, for reduction of nutrient
discharges.
17. Leveraging. A critical goal of the proposed Investment Fund will be to increase GEF
grant leveraging against other project financing sources, and to increasingly
encourage other partners to take over larger shares of nutrient reduction investments.
A minimum leveraging ratio of 1 (GEF) to 0.5 (other) has been established and will
only be allowed in very exceptional cases such as countries with the most significant
resource constraints or wetland restoration projects. These will be offset by other
investments, such as nutrient reduction at wastewater treatment plants, where the
proportion of GEF incremental cost financing will be expected to be significantly
lower. The total program leveraging target is a 1 (GEF) to 3 (other) ratio by the end
of the program.
Co-financing may be obtained from a combination of national
sources, loans from the World Bank or other IFIs, or additional grant funds from the
EU and bilateral sources. Participation in the Partnership does not necessarily require
the use of loans, but it does require counterpart finance which will include in-kind
contributions from countries or other donor support. Progress reports for approval of
subsequent tranches will discuss progress toward leveraging goals.
18. Replicability. A second important goal of the Investment Fund will be to promote
replication of nutrient reduction investments within the Danube and Black Sea
Basins. Since the Investment Fund will provide only a small portion of the
investment needs to achieve significant reductions in nutrient loads ­ the proposed
fund will specifically finance project components that promote wider replication of
the investments. As an incentive for projects to include replication components
targeting other countries - replication components up to US$0.5 million per project
will not be counted against the GEF amount for purposes of leveraging requirements.
For example- communications campaigns, study tours, and other replication activities
cooperating with other countries in the region will be encouraged.
19. Monitoring and Evaluation. The Investment Fund will place a high importance on
monitoring and evaluation of nutrient reductions from individual projects because of
the role that this information can play in demonstrating benefits and encouraging
replication of investments. Each individual project will have its own national
monitoring indicators, benchmarks and monitoring plan to measure nutrient
reduction. Monitoring indicators will be useful to retrospectively measure the actual
cost effectiveness of investments and to guide future investment prioritization.
20. Progress reporting. Joint progress reports to the GEF Council will be prepared on
the Black Sea/Danube Strategic Partnership by the World Bank, UNDP, and UNEP
periodically when resource commitments (tranches) are requested. For example, a
progress report will be submitted to the Council with each tranche request to fund the
Investment Fund or the Regional Projects. Reporting for the Investment Fund will
consist of progress to date on program leveraging targets; a description of the project
pipeline and the stage of development of each project proposal; and coordination of
the fund with the regional projects and other key partners.
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21. Investment Program Eligibility. Project proposals from countries in the Danube
River Basin and the Black Sea will need to fulfill the following basic eligibility
criteria for financing under the Investment Fund:
· Be of one of the three eligible project types (as described earlier in paragraph 16).
· Respond to regional priorities as identified by the respective SAPs adopted by the
Danube and Black Sea Commissions, and be selected as a priority investment in
the proposing country's Black Sea or Danube National Environmental Program.
The project proposal should clearly explain what sources of nutrients are targeted
and why this project area is a priority in the proposing country.
· Have secured financing for non-incremental project costs and ensure that the
minimum leveraging requirement is met.
· Adhere to the principles of the GEF Operational Programs. Projects will follow
the approaches of Water Body-Based Operational Program (OP 8) and
Contaminant-Based Operational Program (OP 10), particularly in the selection of
projects with crosscutting and demonstration potential and proven implementation
capacity.
· Submit an endorsement from the proposing country's GEF focal point.
· Ensure that the country is up-to-date on its contributions to the Black Sea and/or
Danube Commission(s) and Secretariat(s) to which they belong.
Additionally,
· Project proposals will be encouraged to include country-expressed commitment to
policy, institutional, or legal reforms related to regional nutrient reduction and
improved water quality management.
· Whenever a project has potential for additional global environmental benefits,
such as conservation of biodiversity (for example, through management and/or
rehabilitation of a site designated as of international significance under the
Ramsar Convention) or reduction of greenhouse gas emissio ns, the existence of
such additional benefits will be a positive factor, but not constitute per se an
eligibility condition. In all cases, nutrient removal is the essential eligibility
condition for projects.
Project Cycle
22. Projects will be identified by the proposing country, with assistance from the World
Bank and/or other eligible financiers and either the Danube or Black Sea
Commissions.2 No portion of the GEF grant will be earmarked for any individual
2 The World Bank would assist countries or mobilize donor support for strengthening their institutional
capacity for project development.
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country or specific project. All eligible countries will have an equal opportunity to
benefit from the GEF allocation to the Investment Fund and will be encouraged to
submit project proposals. Project proposals submitted by riparian countries will each
be considered based on merit. In the interest of speedy advancement of investments,
funds will be made available to countries on a "first come first served" basis in line
with standard project processing procedures.
23. Eligible projects will be prepared and appraised under standard World Bank
procedures before being submitted to the GEF Secretariat for GEF Chief Executive
Officer (GEF CEO) approval. Project concept notes will be submitted to the World
Bank Investment Fund Coordinators for screening against Partnership eligibility
requirements and for assistance in elaboration of project designs. These notes will
subsequently be submitted to the GEF Secretariat for approval by the World Bank
GEF Regional Coordinator on a rolling basis following standard procedures for
formal "pipeline entry". A project concept note should indicate whether or not a
PDF-B (preparation grant) will be requested. Preparation grant resources will be
allocated separately from Investment Fund resources. Projects under the Partnership
will not be submitted to the GEF Council for approval through standard work
programs at Council Meetings or Intersessionals. Rather, upon completion of project
preparation, the World Bank will submit projects to the GEF CEO for endorsement
following streamlined procedures similar to procedures for GEF medium sized
projects. If found satisfactory, the GEF CEO will approve individual projects up to
the funding limit of each Investment Fund tranche. Projects will be processed to the
World Bank Board of Directors for final approval and implemented following
standard World Bank procedures. The financial management, procurement and
disbursement procedures of the World Bank will be used.
24. If the Investment Fund co-finances with another IFI which has executing agency
status with the GEF (i.e. under the expanded opportunities policy such as EBRD), the
management arrangements will follow existing procedures established for World
Bank and Executing Agency Cooperation. For example, standard project appraisal
procedures and fiduciary requirements of the applicant executing agency and not the
World Bank will be in effect. PDF-B submissions to GEFSEC in this case will also
be handled by the Executing Agency instead of the World Bank. The World Bank's
role with respect to such Executing Agencies will be for the Investment Fund
Coordinators to provide guidance to the applicant Agency on project eligibility, and
reporting vis a vis the Partnership; to ensure coordination with the overall Investment
Funds activities, to include the status of these projects in routine reporting of the
Partnership; to ensure that monitoring and evaluation aspects of these projects are
consistent with other Partnership proposals; to act as the GEF Implementing Agency
for the project; and for the World Bank GEF Regional Coordinator to process projects
for CEO Endorsement. When the Investment Fund co-finances with other donors and
agencies where there is no prior agreement for cooperation on the GEF, the GEF
components of these projects will be processed as a standard World Bank operation.
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Conclusion
25. Declaration of approval for the Investment Fund by the GEF Council will give a
strong signal to potential recipient countries that grant funds will be made available.
The declared Strategic Partnership for the Recovery of the Black Sea will also help
begin to steer co- financing by other donors to the nutrient reduction investment
objectives. It is expected that private sector interest and action will also be catalyzed
through the presence of the Partnership. As a first model for a more programmatic
investment approach in the International Waters Focal Area, it will serve as a model
for the future, in line with GEF commitments and trends to move toward more
strategic approaches.
26. Access to these funds in the medium and long term will give leverage to
environmental governmental bodies, local governments and agricultural interests in
their efforts to cooperate with their respective ministries of finance in implementing
environmental protection measures. This should assist in moving the regional/global
environmental agenda to a higher rank in national investment priorities. Moreover, a
regional partnership will help lower perceived risk that the impact of investments for
protection of international waters could be adversely affected by the behavior of
neighboring states.
27. For more information on the GEF-World Nutrient Reduction Investment Fund
contact:
Piotr Krzyzanowski,
Program Manager
Environment Unit, ECA Region
The World Bank
1818 H St, NW, Washington , DC, 20433, USA
Phone: (1 202) 473 3638
Fax: (1 202) 614 0697
E mail: pkrzyzanowski@worldbank.org
Annexes:
Annex 1: PCD: Bulgaria - Wetlands Restoration and Pollution Reduction Project
Annex 2: PCD: Romania - Black Sea Agricultural Pollution Control Project
Annex 3: PCD: Russian Federation - Rostov Reduction of Nutrient Discharges and
Methane Emissions Project
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ANNEX 1
Bulgaria
Wetlands Restoration and Pollution
Reduction Project
DRAFT
Project Concept Document
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BULGARIA
Wetlands Restoration and Pollution Reduction Project (GEF)
Project Concept Document
Europe and Central Asia Region
Environmentally and Socially Sustainable Department Sector Unit (ECSSD)
Date: March 25, 2001
Team Leader: Rita E. Cestti
Country Manager/Director: Andrew Vorkink
Sector Manager/Director: Marjory-Anne Bromhead
Project ID: P068858
Sector(s): VM - Natural Resources Management
Theme(s): Environment
Focal Area: I - International Waters
Poverty Targeted Intervention: N
Project Financing Data
[ ] Loan [ ] Credit [X] Grant [ ] Guarantee [ ] Other:
For Loans/Credits/Others:
Total Project Cost (US$m): $13.50
Cofinancing: Yes
Total Bank Financing (US$m): 7.50
Has there been a discussion of the IBRD financial product menu with the borrower? No
Financing Plan: Source
Local
Foreign
Total
BORROWER
0.00
0.00
0.00
GLOBAL ENVIRONMENT FACILITY
7.50
0.00
7.50
BILATERAL AGENCIES (UNIDENTIFIED)
3.00
0.00
3.00
MULTILATERAL INSTITUTIONS (UNIDENTIFIED)
3.00
0.00
3.00
Total:
13.50
0.00
13.50
Borrower/Recipient: GOVERNMENT OF BULGARIA
Responsible agency: MINISTRY OF ENVIRONMENT AND WATER
Wetlands Restoration and Pollution Reduction Project - Project Preparation Unit
Address: 22 Maria Luisa Blv.
Sofia, Bulgaria
Contact Person: Ms. Marietta Stoimenova, Project Manager
Ministry of Environment and Water
Tel: 359-2-940-6551
Fax: Fax: 359-2-980-5561 Email:
Wetla ndsppu@yahoo.com
Project implementation period: 5 years

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A. Project Development Objective
1. Project development objective: (see Annex 1)
The global environmental and project development objective is to assist Bulgaria in meeting its national and international
commitments to reduce transboundary nutrient loads and to conserve biodiversity in the Danube and Black Sea Basins
through improved management and sustainable use of water resources and restoration of wetlands.
2. Key performance indicators: (see Annex 1)
Key performance indicators include:
Decrease in nutrient loads immediately downstream from the project sites in the Danube due to wetland restoration;
Sustainable management and use of floodplain wetlands in demonstration sites on the Danube;
Increased capacity of responsible institutions to formulate water sector-related policies, within a framework of
sustainable river basin management plan; and
Increased well-being ­over the long term, of local communities who depend on the Danube River for their
livelihoods;
Globally significant biodiversity protected.
B. Strategic Context
1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1)
Document number: 17655-BUL
Date of latest CAS discussion: 04/09/98
One of the five pillars of the Country Assistance Strategy is protecting and enhancing the environment and ensuring
prudent and rational utilization of natural resources. Of special note are: (a) pollution problems of the Black Sea; (b) the
need for measures to conserve Bulgaria's globally significant biodiversity; (c) assisting the government to implement
new legislation which complies with EU environmental directives. This project supports all of these areas.
First, it addresses the issue of non-point source pollution by reducing the nutrient load carried by the Danube which
alone contributes almost 60% of the nutrient load reaching the Black Sea. Second, the selected wetlands harbor
globally significant biodiversity, notably as spawning and feeding habitats for several endangered species of fish and
waterfowl. Third, the project focuses on helping the government implement the newly enacted legislation on wetlands,
water quality, and land-based sources of pollution. Project assistance will accelerate the process of meeting EU
accession criteria in the water and natural habitats sectors.
This project demonstrates a clear poverty/environment link. The Danube region is one of the poorer areas in Bulgaria.
The main reasons for this is the decreased economic productivity of the Danube River, which has seen a tenfold drop in
fishery catch since the late 1960's, seriously affecting rural incomes. One of the underlying causes of the decrease is the
destruction of riverine wetlands necessary for fish spawning. Hence, linking wetland restoration with sustainable use in
the region will help increase the well-being of local communities.
1a. Global Operational strategy/Program objective addressed by the project:
The project is fully consistent with Global Environment Facility (GEF) Operational Program (8) under the International
Waters Operational Strategy regarding water bodies. The project addresses the highest priority transboundary problem
identified in the Strategic Action Plans (financed by the GEF and the EU) of both the Black Sea and the Danube River.
Under the project, the Bulgarian Government will undertake a comprehensive program addressing the problem of
nutrient loads in the basins. The increased capacity of the Government to plan and implement this program of river basin
development, the development of a national wetland restoration strategy, and innovative pilot activities in wetland
restoration have clear transboundary (global) as well as national benefits. The incremental costs associated with these
benefits are additional to other actions which have clear domestic benefits which will be taken to reduce nutrient run-off
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13
such as the construction of waste water treatment plants and introduction of low-impact agricultural practices. Taken
together, these global and national benefits will lead to significant improvements in the health of the Black Sea.
The project also has significant biodiversity conservation benefits, consistent with eligibility criteria outlined in the GEF
Operational Strategy OP2: conservation of coastal, marine, and freshwater biodiversity. Restoration of the original
water flow patterns to wetlands and floodplains will help recreate natural habitats and conserve existing ones in three
sites with glo bally significant biodiversity.
Bulgaria's National Biodiversity Strategy (1994) identifies the Danube wetland complex targeted by the project as the
most representative of riverine wetlands and of international importance for waterfowl habitat. It has been proposed as a
Ramsar site. Similarly, the Bulgarian National Plan for the Conservation of the Most Important Wetlands (1995)
considers the two proposed project sites as high priority areas for restoration. One of the proposed project areas, Belene
Island, is of particular international importance such as a breeding habitat for the endangered white-tailed eagle and
nesting herons. The project sites also serve as nesting places for the Ferruginous Duck (Aythya nyroca) and the
endangered Dalmatian Pelic an (Pelecanus crispus).
Consistency with World Bank/GEF Strategic Partnership. The Government has requested assistance from the GEF/Bank
to undertake an innovative approach to wetland/floodplain restoration linking land use change with sustainable use and
economic development. While acknowledging that restoration should be undertaken in conjunction with other measures
such as waste water treatment facilities and industrial water treatment, the critical role wetlands and floodplains can play
has been well documented. (Floodplains are high efficiency water purifiers during both flood and dry periods. The self-
purification action is a complex interaction of physical (sedimentation, filtration, absorption), microbiological
(denitrification) and biological processes (nutrient reduction through aquatic micro and macrophytes and the roots of
terrestrial vegetation). According to several studies in similar ecological conditions, floodplains can retain up to 90% of
nitrates and up to 50% of phosphorous passing through.).
This project is being proposed to come under the umbrella of a proposed World Bank/GEF Strategic Partnership for
Nutrient Reduction in the Black Sea/Danube Basin. This partnership is intended to help catalyze investment in priority
hot spots for nutrient reduction within countries of the Danube and Black Sea Basins. Wetland restoration investments
to promote nutrient filtration consistent with this project design, is one of three project types the Strategic Partnership
would promote (it also supports agricultural investments to help control nutrient runoff; and industrial and municipal
wastewater investments targeting point source nutrient discharges). As the first wetlands restoration project to be
proposed under the Strategic Partnership - the Bulgaria project would play a critical demonstration role within the region
and help to promote similar investments in the region. The Strategic Partnership framework will help ensure lessons
learned during implementation of this project will be disseminated to enhance future project designs.
2. Main sector issues and Government strategy:
Overview
The Black Sea, a critical regional resource, suffers severe environmental damage from eutrophication (i.e. choking and
collapse of food chains due to loss of oxygen), declining water quality due to insufficiently treated sewage, introduction
of exotic species, inadequate resource management, and loss of habitat -- all of which have led to long-term ecological
change and a decline of its biological diversity. In-depth analytical work points to eutrophication, caused by an increase
in nutrient flux down the major rivers, as the most serious problem facing the Danube River and the Black Sea over the
medium to long-term. The effects of eutrophication on the northwestern shelf of the Black Sea at the mouth of the
Danube have had particularly disastrous impacts to water quality, natural habitat, and fish populations on which both
biodiversity and human populations depend.
The Danube River is one of the continent's largest and most important rivers linking Central and Eastern Europe. It
flows about 2900 kilometers through ten countries including 300 tributaries, from Germany to the Black Sea, draining
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14
817,000 square kilometers. The lower Danube is also one of Europe's most polluted rivers. It contributes
approximately 60% of the nutrients of the Black Sea. Approximately 60% of the nitrogen compounds and about 66% of
the phosphorous compounds originate from non-point sources within the Danube watershed.
Regional action to clean up the Danube/Black Sea. In response to growing concerns about the pollution of the Danube,
and in recognition of the fact that significant nutrient reduction requires regional commitment, the thirteen Danube River
riparian countries jo ined to draw up the Convention on the Cooperation for the Protection and Sustainable Use of the
Danube River, signed in 1994 and entering into force in 1999. Implementation monitoring of the Convention is the
responsibility of the International Commission for the Protection of the Danube River (ICPDR). Similarly, the six
Black Sea countries decided that joint action to save the Black Sea was urgently needed, and in 1992, signed the
Bucharest Convention for the Protection of the Black Sea Against Pollution (ratified in early 1994). The Bucharest
Convention was given additional impetus in 1993 by the Odessa Ministerial Declaration on the Protection of the Black
Sea Environment, also endorsed by Bulgaria. Nutrient reduction is the highest priority issue for both programs.
Role of Bulgaria. The Danube forms the border between Bulgaria and its northern neighbor Romania for 472 kilometers
before continuing through Romania to the Black Sea. More than half the area on the Bulgarian bank of the Danube is
floodplain, covering 1280 square km. Over the years, the wetlands and floodplain has been drained or dyked to create
arable land or as an anti-malaria measure, such that today's wetlands cover only about 10% of the area that existed at the
turn of the century and hence cannot perform their original ecological function. Although about half of the country
drains into the Danube River, Bulgaria is not the largest contributor of nutrient loads to the river. The Transboundary
Diagnostic Analysis (TDA) undertaken by the Black Sea 1993-99 indicates that Bulgaria places third of the Black Sea
states in terms of the nitrogen (N) and phosphorous (P) it contributes to the Sea, and accounts for between 1%-5% of
the total pollution.
Actions which Bulgaria might take to address the issue of transboundary pollution have to be matched with a program
addressing real national priorities in order to be politically and financially justified. Government and local officials are
eager to integrate interventions which address the issue of transboundary pollution and global biodiversity benefits with
efforts towards meeting EU Accession requirements related to EU Directives on Water Policy and Environment. Other
national benefits include opportunities for sustainable use of aquatic water resources and income generation for local
communities. This approach which integrates global and national development objectives increases the likelihood of
long-term project success.
Main Water Sector Issues
Bulgaria faces a number of issues as it attempts to comply with its international commitments to reduce nutrients and
generally clean up the Danube/Black Sea, and to meet national environmental standards for EU accession. These
include:
(a) Water quality and nutrient reduction. Water in Bulgaria is a scarce resource, with per capita endowment less than
half the average for European countries. One third of the country faces permanent or seasonal water shortages. Nitrogen
content exceeds drinking water standards in a number of rural settlements. The water scarcity problem is aggravated by
pollution from various sources, especially agricultural run-off, inadequately treated urban waste waters, changes in
hydrological conditions and the decline of water ecosystems. The underlying causes of the pollution include lack of
resources for the construction of waste water treatment plants with appropriate treatment capacity in a number of
Bulgarian towns, inappropriate agricultural practices, industrial pollution, and to a lesser extent in the present economic
situation. For example, 49% of all waste water generated (incl. 43% of industrial waste waters) are discharged directly
into the environment without any preliminary treatment. Nationwide, half of the towns with population over 50,000, and
about 75% of the towns with population over 10,000 people have no waste water treatment plants (WWTP). According
to the Transboundary Diagnostic Analysis (TDA), Bulgaria contributes approximately 7,500 tons of nitrogen (N) and
720 tons of phosphorous (P) per year into the Danube. For the Black Sea, the numbers are significantly higher: 2,480
14

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tons of N and 693 tons of P from domestic sources, and an additional 2,000 tons of N and 432 tons of P from its rivers
flowing into the Black Sea.
(b) Need for effective management of river basin development. Legislation was recently passed requiring watershed-
based management system be implemented for the four main river watersheds. Currently, water management
responsibilities are split between a number of organizations with different priorities, lacking effective coordination. The
Ministry of Environment and Water (MOEW) is charged with coordinating all environmental issues and implementing
environmental policy. The Ministry of Agriculture, Forests and Agraria n Reform (MAFAR) is responsible for irrigation
of agricultural land, for land registration, and for forest activities on the Danube islands. The Ministry of Regional
Development and Public Works (MRDPW) manages the facilities for water supply and sewerage, while the Ministry of
Health is responsible for the use of mineral waters. With the new legislation requiring that river basin authorities be set
up, there will be a clear need to clarify roles and responsibilities of each of the actors. To meet EU accession
requirements, the basins will need to develop nutrient reduction plans; a first step will be the analysis of the costs,
benefits, and major opportunities for nutrient reduction in the short-and medium-term.
(c) Biodiversity conservation and wetland restoration. Bulgaria is one of the most biodiversity-rich countries on the
Danube, particularly along the Danube and Black Sea coasts. The National Biodiversity Strategy (1994) as well as the
National Wetland Strategy have identified priority areas for conservation and restoration of wetlands. Among those sites
are areas on the Danube of international importance such as a nesting place of the Ferruginous Duck and the endangered
Dalmatian Pelican. In its efforts to implement a wetland strategy consistent with EU directives on natural habitats and
species, the Government has met with skeptical local community members who do not always appreciate the importance
of wetlands for conserving globally significant biodiversity, for maintaining water quality, flood control and a variety of
other environmental services. Public opinion has favored the draining of wetlands for other land uses, which is a direct
result of the Government's policy over the last 50 years.
Government Strategy
Bulgaria's strategy with regard to nutrient reduction has two main overarching objectives, namely, to:
Accelerate the process of EU accession. Early in its candidacy for membership in the European Union (EU),
Bulgaria is evaluating (with Bank and EU assistance) what measures it needs to take to meet eligibility criteria, to
analyze the costs, to explore cost-effective measures to meet the European Union accession requirements, and to
plan a short and medium-term accession strategy.
Fulfill its obligations under several international agreements to which the county is a signatory. The country has
committed itself to implement the Strategic Action Plans of the Black Sea and Danube Conventions. This includes
participating in the development of a common Danube River Basin Management Plan in the framework of the
Danube Convention. Efforts to restore water quality and water ecosystems are also relevant to the Ramsar
Convention on Wetlands of International Importance, especially as waterfowl habitat, encouraging sustainable
development and wise use of natural resources in wetland areas.
Recent and Planned Government Actions
Actions which Bulgaria might take to address the issues of transboundary pollution have to be matched with a program
addressing real national priorities in order to be politically and financially justified. Government and local officials are
eager to integrate interventions which address the issue of transboundary pollution and global biodiversity benefits with
efforts towards meeting EU accession requirements related to EU environmental directives. Other national benefits
include opportunities for sustainable use of aquatic resources and income generation for local communities. This
approach which integrates global and national development objectives increases the likelihood of long-term project
success.
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Water quality and management. In 1999, the Bulgarian Parliament adopted a new Water Act that reflects to a large
extent the requirements of the proposed EU Water Framework Directive. It introduces a more integrated approach to
water management based on river basins, ensuring better co-ordination among institutions (with assistance for training
and implementation from the French Agence des Eaux, supported by an EU Twinning program.). The objective is to
establish a river basin management authority and to train its staff to organize and manage the sector.
Investments in point-source pollution. The government has planned investments from the National Environmental
Protection Fund for a small number of priority WWTP, identified according to a set of criteria. Virtually all cities on
Danube tributaries are included in the National Program for the Construction of WWTP for Settlements with More than
10,000 Inhabitants. These resources, however are far from sufficient. Nutrient reduction investments are not address
specifically by the plan. The Government will rely heavily on investment from international donors for the construction
of WWTPs, in particular the EU PHARE Program and the EU ISPA instrument of the EC (Environment Strategy for
ISPA, 1999). Hence the government is very interested in looking at low-cost technologies such as wetland restoration as
a means of reducing nutrient loads and meeting water quality standards near smaller urban areas.
Wetland restoration for biodiversity conservation and nutrient reduction. The Government views wetland restoration as
having several benefits: first, as a way to decrease transboundary pollution, second, as a means of preserving globally
significant biodiversit y, and third, as a possible source of revenue for local communities living in the poorer regions of
Bulgaria. By restoring the spawning grounds for fish, the expectation is that the local fishing industry will make a
comeback. Their strategy is based on the findings of the Danube TDA which includes an analysis of the potential
impacts on the Danube of floodplain and wetland restoration.
3. Sector issues to be addressed by the project and strategic choices:
The Project would support Government strategy on nutrient reduction and biodiversity conservation by addressing key
sector issues and objectives by:
·
Helping develop a program for nutrient reduction in the Danube/Black Sea Basin consistent with new policies
and legislation;
·
Undertaking an innovative and potentially high-impact wetland restoration program which combines
conservation of biodiversity values, nutrient reduction, and sustainable management and use of aquatic
resources;
·
Assisting the Government meet its international obligations under the Bucharest Convention for the Protection of
the Black Sea, the Danube River Protection Convention, the Ramsar Convention on Wetlands of International
Importance, especially as Waterfowl Habitat.
·
Assisting the Government to act on an accelerated schedule to comply with EU Directives -- particularly on
directives on water, nitrates, natural habitats and species--as part of the accession process; and
·
Assisting the Government to develop institutional options for improving river basin management.
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C. Project Description Summary
1. Project components (see Annex 1):
The Project will support the restoration of critical wetlands in the Danube River Basin and the use of riparian zones as
nutrient traps. It will also support sustainable management of selected areas in the floodplain of the Danube, improved
water quality monitoring and public awareness. Identified components of the Project are as follows
Indicative
Bank
% of
GEF
% of
Component
Sector
Costs
% of
financing
Bank
financing
GEF
(US$M)
Total
(US$M)
financing
(US$M)
financing
Nutrient Reduction Plan and
Natural Resources
1.50
11.1
0.00
0.0
0.50
6.7
Policy Analysis
Management
Wetland Restoration
6.00
44.4
0.00
0.0
4.00
53.3
Water Quality Monitoring
1.70
12.6
0.00
0.0
1.00
13.3
Support to sustainable
2.80
20.7
0.00
0.0
0.50
6.7
development activities
Public awareness
0.80
5.9
0.00
0.0
0.80
10.7
Project coordination
0.70
5.2
0.00
0.0
0.70
9.3
Total Project Costs
13.50
100.0
0.00
0.0
7.50
100.0
Total Financing Required
13.50
100.0
0.00
0.0
7.50
100.0
1.
Nutrient Reduction Plan and Policy Analysis
As part of Bulgaria's strategy to meet its international obligations as well as to comply with EU directives and new
national legislation on water, the government is considering creating a new Danube and Black Sea Basin Authority
(DBSBA). A major task of the new authority will be to develop an integrated plan for management of the Bulgaria
Danube River Basin. As part of this plan, the project will assist in the development of a basin-wide strategy for
nutrient reduction, led by the MOEW. The strategy will integrate all of the government's activities in support of
nutrient reduction, including the National Plan for Waste Water Treatment, its low-impact agricultural programs, and
its wetland restoration work. The plan will analyze the potential nutrient reduction impact of each activity (WWTP,
agriculture, industrial pollution) undertake a financial analysis of the cost of implementing these measures (similar to
the Bank/Government of Poland study, Meeting the Costs of Accession to the European Union, but focusing more
directly on the water sector). The study will: (i) examine cost-effective measures which can be used to improve water
quality, (ii) analyze the policy framework hindering introduction and use of cost-effective measures, and (iii)
recommend changes in those policies to encourage adoption. Other donor financing, particularly the EU program for
accession countries would finance complementary activities and related training. (Approximate cost: $1.5M; GEF
Contribution: $0.5M)
2.
Wetlands Restoration
This is the most innovative activity to be financed under the project, and if successful, will have high replication value
throughout Bulgaria and the region. The proposed project sites are among the 16 former floodplains with potentially
high environment benefits recommended for restoration in the GEF-financed Pollution Reduction Program study of the
Danube Commission. The Bulgaria sites all border larger potential restoration areas in neighboring Romania. Selection
criteria for the sites targeted under the project included
·
ecological potential
·
floodplain type
·
floodplain width
·
current land use , and
·
nutrient reduction potential.
The two proposed sites are briefly described below. More detail is available in annex 4.
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(a) Kalimok and Brushlen Marshes (2,000 ha). The site is located about 60 kilometers east of Russe, the
administrative capital of the Danube Region near the small town of Tutrakan. Up until the 1950's, the extensive marsh
complex near Tutrakan was a key part of the region's valuable fish resources, providing the communities food, breeding
grounds and nurseries. In the 1950's, a dyke was constructed between Russe and Tutrakan, cutting fish off from the
marshes. Fish ponds were constructed, severely damaging the marsh ecosystem. In 1993, following the collapse of the
state farming system, the fishponds were declared bankrupt and the system abandoned. The fishponds were purchased
by Green Balkans and will be contributed to this project (560 ha.). The original marshlands are now state -owned, and
much of this area has reverted to reed beds. Areas bordering the marshes are privately and municipality-owned and
used for agriculture.
(b) the Belene wetland complex upstream from Tutrakan, situated 18 kilometers west of Svishtov. This is an extensive
complex of two large islands (Belene Island is 15 km long) and 12 smaller islands. The land belongs to the Ministry
of Justice, although MAFAR has the right to maintain plantation forests on the islands. Prior to 1991, the island was
home to political prisoners; more recently, it is a regular prison. The island complex has enormous potential for
wetland restoration, according to preliminary design work. However, in order to keep land issues as simple as possible,
only land belonging to the state which not under agricultural production would be included in this project
(approximately 1,000 ha., although the technical feasibility study will investigate options of up to triple this area).
The Kalimok site has the most advanced design prepared by the Green Balkans (Bulgarian NGO) and, financed by both
EU Phare and World Wildlife Fund (WWF)/Danube Programme. Other donor financing is being sought to complete
the technical design for hydrological work at the site. Under this project, the GEF would finance the civil works,
including removal of parts of dikes, construction of sluices for emergency control, removal of existing levees, and
reconnection of former river branches to the Danube river dynamics. Similar civil works are needed at the Belene
Island which has a preliminary hydrological study and site restoration plan, but will need more detailed design work.
Several studies need to be undertaken during project preparation in addition to the detailed technical design work
mentioned above. These include an economic valuation study to quantify the economic and nutrient reduction benefits
of various flooding scenarios currently under discussion (see technical and social issues section). The land-use and
social assessment studies are particularly important because if, as preliminary findings indicate, grazing and meadows
are more economically attractive than low-productivity agriculture, the 59 land owners currently owning land on the
outskirts of the project area may wish to switch to a different land use more complementary to wetlands, thus allowing
the project to purchase these lands and expand the project zone. Secondly, a water modeling study will be undertaken
at one site, probably Kalimok, to gain a better understanding of the nutrient stripping potential of wetlands under
various management regimes. Final site designs will be agreed to with the local communities based on a synthesis of
these study findings.
Management plans, including requirements for ecological viability and measures to ensure sustainable use of the
restored site would be developed for each site. The plans will include a monitoring program to regularly assess water
quality and ecologic al health. Once the initial technical design is agreed to, site plans will require detailed engineering
designs for restoration (civil works) and maintaining the hydrologic and ecological conditions essential for nutrient
uptake. Training for MoEW and local staff in the management of the wetlands will be included. While most training
will be conducted on-site, staff will also visit successful restoration sites in Europe to see first-hand how these sites are
restored, managed and monitored.
In this first stage, approximately 3,000 ha of government/municipality-owned land with uncomplicated ownership and
land use will be restored. Total nutrient reduction potential from this area, using the most conservative estimates of
nutrient reduction potential (see technical issues), is approximately 375 tons of nitrogen and 37 tons of
phosphorous/year . This projects an incremental cost ratio of $106/ton /year for nutrient reduction under the project.
At the national level, MoEW staff will synthesize and integrate the considerable wealth of information into a wetland
restoration strategy and program for the Bulgarian Danube and Black Sea regions. Donor interest and availability of
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government funds to finance these will be ascertained. With implementation funding secured, initial restoration plans
for selected sites will be completed.
At the regional level, the wetland restoration work will benefit from working closely wetland restoration activities
proposed in Romania at the Calarasi wetland complex under the Romania Agricultural Pollution Control GEF project.
(In addition, the Romanian Balta Graeca floodplain directly across from the Tutrakan site which was highlighted in the
Danube TDA recommendations as an exceptionally promising restoration site may also be restored. It is one of the
sites included in the WWF Lower Green Danube Corridor Project being submitted for co-financing from European
donors. If this happens, a joint management plan for the broader complex will need to be formulated.) The
Romanian Danube Delta Authority, which has considerable experience in the management of wetlands and of working
with local communities on the Delta has also expressed interest in working with the Bulgarians to share expertise and
lessons learned. (Total cost: $6M; GEF contribution $4M)
3.
Water Quality Monitoring
It will be critical to monitor water quality upstream from the demonstration sites, and just below the wetlands to
determine the nutrient reduction and overall improvements in water quality achieved relative to expectations. A
comprehensive, well designed, and functioning monitoring system is needed to enable identification of problems, to
evaluate the cost effectiveness of management actions, and to identify the need for future measures. Other impacts,
including anticipated biodiversity improvements will also be monitored. This project is setting the precedent and
standard for other nutrient load monitoring systems in Bulgaria, and in other Danube/Black Sea countries. The results
of this project will directly feed into a wider regional framework bringing together experience from individual country
projects participating in the proposed World Bank/GEF Black Sea/Danube Strategic Partnership.
The monitoring system should be compatible with existing systems in Bulgaria, in other countries and particularly with
regional standards established by the two Commissions. A water quality monitoring system is in place in Bulgaria --as
in most Danube countries--but recent experience has highlighted some of the system's shortcomings. Hence the first
step will be to assess the short-falls in the existing system. This will be done as part of project preparation. Additional
training in effective data collection, management and analysis of hydrologic data will be needed. (Total cost: $1.7M;
GEF: $1M)
4.
Support for activities to ensure long-term sustainability
Experience throughout the world, and in particular Eastern Europe, demonstrates that people living in the project
areas--and indeed people who are dependent on the natural resources of the area--need to be involved in project
decision-making and to benefit from project activities. Otherwise, the long-term financial sustainability of the project
sites is in jeopardy. Hence, issues of long-term financial sustainability as well as environmental sustainability need to
be addressed immediately and simultaneously.
The management plans for the project sites will include a medium and long-term strategy for sustainable use of the
wetlands. In preliminary discussions with local communities and officials in Tutrakan, sustainable development
activities mentioned include: sustainable harvesting of bio-mass (including reeds and herbs) for subsistence or small-
scale markets; revitalization of fisheries which formerly flourished in the river/wetlands complex; and tourism based on
the natural attractions and other amenities that could be developed at each site. Resources would be allocated under the
project to finance feasibility studies for economic activities outlined in the management plans. Co-financing from
donors for micro-credit schemes and private sector development not eligible for GEF financing is under discussion.
(Estimated total cost: $2.8M; GEF financing: $0.5M)
5.
Public Awareness
Government staff, local officials, and local NGOs with whom the project team has met consistently pointed to the need
for public awareness, information, and stakeholder buy-in to project's activities to enhance project sustainability at both
the local and national levels. Public awareness campaigns will be directed at the general public to enhance their
understanding of the importance of wetlands to Bulgaria's natural heritage, as well as to maintaining their function in
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water quality, flood control and a variety of other environmental services vital to Bulgaria's wealth. Environmental
education will also be directed at local communities adjacent to wetlands to help them realize some of the tangible
benefits from sustainable use of the goods and services that healthy wetlands provide. During project preparation, the
possibility of establishing a wetland information/training center in one of the two sites will be explored. Information on
project activities should be linked to similar activities in nutrient reduction being undertaken across the Danube, in
Romania, for possible future collaboration or joint implementation. Funds will be earmarked for exchange visits, joint
seminars, joint scientific ventures, and participation in Basin-wide programs such as Strategic Partnership-supported
exchanges. (Estimated total cost: $0.8M; GEF $0.8M)
6.
Project Management
This component will finance activities of local, national, and international coordination required for the implementation
and monitoring of project activitie s. The model proposed by the Government is to establish a Project Coordination
Unit within the Water Directorate of MoEW to manage project activities. However, in an effort to build the capacity
within each department/agency, technical staff working on project activities (financed by the Government) would
remain with the appropriate department. However, the PCU would be responsible for project activities which cut
across all components: formulating and coordinating a project training plan; coordinating public awareness activities
with NGOs; coordinating cross-border collaboration with Romania and with the Commissions for the Danube and
Black Sea. The PCU would also be responsible for project monitoring, financial accounting, and reporting. (Estimated
total cost: $0.7m)
2. Key policy and institutional reforms to be sought:
Bulgaria is at the first stage of long process leading towards EU accession. As discussed in the issues section, the
Government has already begun to enact policy changes (through new legislation) consistent with the EU Framework
Directive on Water, and several other sectors. This project will assist the government to move quickly in drafting the
enabling regulations and building the technical capacity needed to implement the new laws. The key policy change
sought is related to the explicit consideration of transboundary impacts in the formulation of national water and land-
use policy and reflected in the selection of high priority projects to be financed.
Secondly, the project will facilitate a change in the government --and particularly regional government -- framework
on land use policy and development planning. Following years of agricultural policy and massive investments in
irrigation schemes which has favored the drainage of wetlands throughout the country, the challenge will be to
demonstrate the economic benefits of wetlands. In particular, the project will help identify more appropriate land use
options in wetland areas (e.g. extensive use of regularly flooded lands as meadows and pastures rather than as arable
lands, use of biomass from wetlands, and nature-based tourism, etc.) that will be economically acceptable to local
stakeholders. Once the economic and environmental impacts of wetlands are evaluated, the Bank would (a) urge the
Government to modify its cumbersome procedures for changing land-use category, making it easier for local
communities to undertake small-scale wetland restoration programs; and (b) work with the government to give priority
to cost-effective measures to improve water quality. A related policy objective is to increase regional government's
support and implementation of river basin management, which integrates environmental and economic development
objectives in a basin wide approach to planning.
3. Benefits and target population:
At the local level, the main beneficiaries will be people living in the communities located downstream from the wetland
who will enjoy cleaner water. Local communities will also benefit from improved fisheries along the Danube.
Fishing has traditionally been the mainstay for communities along the Danube. The deterioration of water quality and
the destruction of breeding sites for fish has deprived a significant part of local people from their main source of food
and living; where 60 years ago there were 5,000 fishermen, there are now 60. The restoration of wetlands is expected
to have beneficial effects on fish populations and hence on the local fishermen's incomes. Small entrepreneurs
interested in establishing businesses related to bio-mass processing, fish processing, and eco-tourism may also see
increases in incomes.
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The main global benefit is the reduction of transboundary pollution. Based on conservative estimates of 100 kg/ha/yr
reduction of nitrogen, and 10 kg/ha/yr of phosphorous, 375 tons of N and 39 tons of P could be reduced yearly. This
accounts for approximately 5% of Bulgaria's total nutrient contribution to the Danube. The primary beneficiaries are
Bulgarians living downstream from the wetlands, other downstream riparians, and littoral states of the Black Sea who
will benefit from cleaner water.
Finally, significant biodiversity benefits are expected. The wetland complexes are of international importance as a
nesting place of the Ferruginous Duck (Aythya nyroca) and Dalmatian Pelican (Pelecanus crispus). The Black Sea site
is of even greater importance globally since it is a critical feeding site on the most important bird migration flyway
linking Europe with the Middle East and Africa.
4. Institutional and implementation arrangements:
Implementation arrangements will need to be further developed during the course of project preparation. The
government has suggested that a project coordination unit (PCU) be established within the Ministry of Environment
and Water to oversee day-to-day management of the project. Given the number of ministries (MOEW, Agriculture,
Justice), municipal governments, and NGOs who will be involved in the implementation of the project, the Government
has proposed that a Steering Group consisting of key agencies as well as representatives of the local communities and
other donor agencies which are funding complementary activities be created. The Group would meet regularly to
review project implementation and recommend adjustments as necessary.
The PCU would be headed by a Project Coordinator, reporting to the Minister of Environment and Water, assisted by
two staff responsible for financial management and administration responsible for financial accounting. In an effort to
build the internal capacity of the MoEW and to ensure that the work done under the project is fully owned by the
respective agencies, each component would have a lead technical person working directly in the responsible ministerial
department. The PCU would take the lead on designing and implementing a project-wide training activities, on
collaboration with other riparian states--namely Romania on joint training programs--and with the wider Black
Sea/Danube Basin Nutrient Reduction Program. The Unit would facilitate reaching institutional consensus required to
execute the project, and it will be responsible for project monitoring and reporting to the Bank. We will discuss with
MoEW the possibility of an in-house on-the-job training program with project staff responsible for the Bulgaria GEF
Ozone Depleting Substances Phase-out Project. As well, other options for project management, including a
decentralized management system for field activities operating under a PCU will be explored with the Government
during project preparation.
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D. Project Rationale
1. Project alternatives considered and reasons for rejection:
Scope of project. Several alternatives for project design were considered before deciding on the current proposal. The
first option was broadening the scope to include activities targeting non-point source pollution from agricultural run-off.
This is similar to the approach currently proposed for neighboring Romania and has high potential returns. However,
Government officials reassured us that agricultural issues were also subject to new EU Directives, and that they had
requested (and been promised) support for introducing low-impact farming and other more environment-friendly
appropriate agricultural practices from the EU through the SAPARD program and from bi-lateral donors, including the
Danish Government. So while agricultural run-off is not being financed by this Bank/GEF operation, actions are
underway in Bulgaria to address the problem. Commitments to these actions will be verified during the course of project
preparation. The challenge will be to co-ordinate activities under the umbrella of the DRBA. Regular reporting on
agricultural activities and water quality monitoring of agricultural run-off will be part of the Nutrient Reduction Strategy
financed under the project and other mechanisms to achieve the synergies of various ongoing activities will be
considered during the preparation stage.
Point vs. non-point source pollution. A second alternative was to focus on point-source pollution such as waste water
treatment and industrial discharge. GEF funds would be available to finance incremental costs of nutrient reduction
technology if governments were willing to borrow for baseline costs to the level (at least secondary) where these
nutrients technologies could be added. This option is unaffordable by the Bulgarian government in its current economic
situation. However, the current project offers a relatively low-cost opportunity to address water quality issues for
smaller settlements along the Danube and its tributaries. Wetland restoration requires significantly lower construction
and maintenance costs than nutrient reduction technologies at WWTPs, while at the same time providing a very
effective system for of the removal of nutrients from large quantities of water.
Selection of sites. Restoration sites were carefully considered in consultation with the MoEW. Such a wealth of
analytical work exists on both the Danube and Black Sea, making decisions easier in some ways, but more difficult in
others. Both the Bulgarian National Wetland Strategy and the Biodiversity Strategy identify key wetlands from a
biodiversity perspective. In consultation with the Government and the Danube River Pollution Reduction Programme,
specific criteria were established and each wetland site measured against these. Criteria include: nutrient reduction
potential (based on their size and hydrological characteristics), current land use, and demonstration value. Several
promising sites which might be considered for a follow-on project were not selected for some of the following reasons:
limited nutrient reduction capacity, conflict over land use, or technical implementation difficulties.
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2. Major related projects financed by the Bank and/or other development agencies (completed,
ongoing and planned).
Latest Supervision
Sector Issue
Project
(PSR) Ratings
(Bank-financed projects only)
Implementation
Development
Bank-financed
Progress (IP)
Objective (DO)
Environment
Environmental Remediation
S
S
Water
Water Companies
S
S
Restructuring and
Modernization Project
Social
Regional Initiatives Fund
S
HS
(LIL)
Environment
Enviromental Remediation
S
S
Project
Environment
Environmental and
S
S
Privatization Support Project
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Other development agencies
USAID
Black Sea-Danube Project
(Hungary, Slovakia and
Romania)
USAID (1990-1998)
Environmental Initiatives
Project (180-0004)
WWF
Lower Green Danube Corridor
Programme
UNDP (1994-1997)
Establishment of a Land
Information Management
System (Bul/94/002)
UNDP (1995-1999)
Ecological Monitoring and
Pollution Control of Maritza
River Basin (BUL/94/003)
UNDP (1997-1999)
Biodiversity Action Plan
FAO (1995-1997)
Rehabilitation of Inland
Agriculture(focus on fisheries
aquaculture)
PHARE (1994-1999)
Environment Program 1994
EIB (1998-2000)
Riverbank and Coastline
Protection Project
DEN (1997-1999)
Rehabilitation of Varna Waste
Water Treatment Plant
(124/008-0008)
GEF (1996-1998)
Implementation of the Black
Sea Strategic Action Plan
(RER/96/006/RER/97/G3
IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory)
3. Lessons learned and reflected in proposed project design:
Sector & Themes
KM
Experience from wetlands restoration and pollution abatement programs in Europe and around the world suggest that:
·
The early involvement in project concept design of key stakeholders from across the water, agriculture, and
environment sectors as well as of local communities is essential in order to ensure ownership, build lasting
commitment and achieve successful project implementation;
·
The rationale, benefits and objectives of the project should be made known to all stakeholders, if not through
active participation, on through effective public awareness programs. The benefits of sustainable land use
needs to be demonstrated and the results widely disseminated;
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·
Problems should be solved jointly with clients and not for them. Capacity and skills transfer can only be
achieved by working with clients, to do otherwise is to leave solutions that are unsustainable;
·
Maintaining support for central governmental units, but emphasizing decentralized responsibility for
financial and project management (e.g. Romania's Danube Delta Biodiversity and Agricultural Pollution
Control Projects) helps to build local ownership and sustainability of project activities;
·
Socio-economic and regional development issues need to be carefully considered in the design of the
project, which in turn should provide support for the integration of environmental and sustainable
development principles into regional planning exercises;
·
Early on, the project needs to focus on activities which promote replication, sustainability and resource
mobilization beyond the life of the project.
·
World Bank experience with the Bulgaria country portfolio indicates that:
·
In order to avoid delays in disbursements, forward planning of budget needs to be ensured early in project
preparation and carefully monitored during each of Bulgaria's budget years
·
Significant effort must be undertaken to ensure project management capacity is adequate to permit
implementation of complex activities and policy measures with efficacy and speed; and
·
While direct participation of sector ministries is essential for the implementation of individual projects,
successful implementation relies heavily on good relationships and cooperation from central units such as
the Ministry of Finance when it comes to dealing with issues such as counterpart funding, VAT, financial
management, approval processes and procedures, technical exchange of views on legislation.
The proposed program will incorporate these experiences and build on them, specifically by: (a) continuing the inclusive
and participatory approach; (b) effectively communicating the purpose and progress of the program to stakeholders
through a public awareness campaign and (c) building national and local capacity for sustainable management of the
country's water resources.
4. Indications of borrower and recipient commitment and ownership:
The Government of Bulgaria has taken a lead role in efforts to establish a network of wetland and floodplain sites in the
Lower Danube. The Ministry of Environment which represents Bulgaria on the Danube Commission has worked closely
with WWF to prepare the restoration program s Lower Danube Program. Subsequently, the Bank joined WWF and the
Ministry to move forward on investment operation which met the criteria for inclusion in the GEF/Bank Strategic
Partnership for Nutrient Reduction.
The project scope expanded from the original request focussed on wetland restoration to include national level activities
for improved water resources management, assistance in developing national restoration and rehabilitation strategies and
policy formulation/implementation for nutrient reduction. The Government views these as an integrated package of
measures needed to address water and land-use issues at their interface, and has asked the Bank, through the GEF, for
assistance.
5. Value added of Bank and Global support in this project:
The Bank is currently assisting the Government formulate a strategy to comply with EU environment legislation--and to
meet the expected high costs. The main issues involve policy frameworks and financing. The proposed project may
provide an alternative to high-cost investment in infrastructure if the expected improvements in water quality from non-
point source pollution are forthcoming. The Bank is in a unique position to help the government synthesize experiences
and lessons learned from this project and from several other related projects in the water and agriculture sectors (ASAL,
Land Cadastre), as well as its considerable experience in regional integrated river basin planning and management, to
help implement the new water policy and assist the Government in its negotiations with the EU.
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Secondly, the Bank plays an important role in helping coordinate donor assistance. Given the number of donors
assisting Bulgaria, this role is needed to coordinate investments, technical assistance, and policy advice. The Bank can
do this within the context of the CAS and through its regular participation in donor coordination dialogue.
In addition, the World Bank/GEF has built experience over the past decade involving numerous coastal zone, wetland
and water quality projects related to the Black Sea and Danube River. Experience garnered through such projects as the
Romania Danube Delta and Georgia Integrated Coastal Zone Management Projects and coordination with the Black Sea
Environment, Danube River Basin Environment and Danube Pollution Reduction Programs is being shared with newly
started projects.
E. Issues Requiring Special Attention
1. Economic
To be defined
Economic evaluation methodology:
Incremental Cost
There are two possible ways of undertaking an economic analysis which would meet GEF requirements. First, utilizing
the typical incremental cost (IC) assessment, we estimate the IC of achieving global benefits in this project are $7.5M of
a total project costs of $13.5M. This total cost are restricted to those expenditures directly related to the nutrient
reduction program focusing on wetlands, and does not include government or donor financing of WWTPs in the
Danube or its tributaries, nor of agricultural activities aimed at reducing non-point source pollution, all of which would
be part of broader a nutrient reduction program for the Danube Basin and which should be considered as `leveraged
financing'.
The second methodology currently under discussion with the GEF Secretariat involves a formula to be applied to all
projects which fall under the Strategic Partnership for Nutrient Reduction in the Black Sea and Danube. This formula
would likely include (a) a ratio of $cost/ton of nutrient reduced; and (b) a leveraging ratio to determine appropriate
levels of co-financing of total project costs. Co-financing would be used to cover costs of sustainable development
activities. Currently, there is not enough information relevant available for the Danube/Black Sea region to
scientifically establish the appropriate ratios This project, along with a similar nutrient reduction project in Romania, will
provide important information for establishing the ratios to be used for future projects under the Strategic Partnership.
Consequently, the monitoring component of the project is particularly important since the monitoring inf ormation
gathered will serve as one of main sources of data to establish these ratios.
2. Financial
To be defined
Government budgetary contribution to the project is not expected to significantly exceed current budgetary allocations to
the sector.
The technical/economic studies may indicate that the most appropriate solution for wetland restoration involves flooding
private lands. In that case, the government may compensate land owners for these lands. The MoEW would consider
using funds from the National Environment Fund to cover these costs. This solution has been raised with the Ministry of
Finance and MOEW and will be discussed again if the technical design recommends the higher flooding alternative.
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3. Technical
Summarize issues below
Estimation of the nutrient reduction potential was carried out on the basis of international experience in other regions,
with data adapted to the size and general characteristics of the selected demonstration sites. Experience in Denmark and
Sweden achieved reductions of 400 kg/ha N and 40 kg/ha P (source: RAMSAR International). Using conservative
figures based on international experience similar to Bulgaria's, expected nutrient reduction is 100-200 kg/ha/year for
nitrogen and 10-20 kg/ha/yea for phosphorous. Applying a 125kg/ha N and 13kg/a P estimate to a low-case land area
scenario, approximately 375 tons of N and 39 tons of P could be removed yearly from the proposed project sites. The
real quantities could be 2-3 times this amount, depending on various hydrological factors and the management regime.
The water modeling exercise to be undertaken as part of project preparation will refine and validate these preliminary
estimates.
4. Institutional
While MOEW is the lead implementation agency, the active participation of several other Ministries, agencies, local
government and scientists will be critical to its success. In this context, the composition and mandate of the Steering
Committee is important and will be given close consideration during project development.
Capacity and institution building. Training and capacity building has been incorporated into every component. MoEW
will be trained in the management and monitoring aspects wetland restoration and hydrological monitoring. These areas
complement the strong technical background and professional training of many staff working on water issues. Other
training needs will be identified as part of a training needs assessment undertaken during project preparation. These will
likely include training in environmental education, socio-economic analysis, and policy analysis with regard to water
policy formulation. The project will work to build up the capacity of existing directorates in the MOEW, rather than
create new ones, given that staff are already overstretched. A conscious effort will also be made to facilitate synergies
between this and related projects, to optimize MOEW staff time in project supervision and reporting. On-site training
will be complemented with site visits to successful restoration sites in Europe During project development, possible
joint training with Romanian counterparts will be investigated. The relationship with the Strategic Partnership with
regard to replication to other Partnership activities and to the links between this component and the Regional Projects
which include regional training funds will be clarified in final documentation.
4.1 Executing agencies:
TBD
4.2 Project management:
TBD
4.3 Procurement issues:
TBD
4.4 Financial management issues:
TBD
5. Environmental
5.1 Summarize significant environmental issues and objectives and identify key stakeholders. If the issues are still to be
determined, describe current or planned efforts to do so.
The long-term impacts of the proposed project is expected be entirely positive. The project has been specifically
designed to address national, global and transboundary environmental issues (water quality and nutrient loads in Danube
River and Black Sea, biodiversity protection and habitat restoration, improved management and sustainable use of water
resources.
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Short-term impacts may result during the construction or removal of civil works (removal of existing dikes or levees,
construction of sluice gates, reconnection of waterways). Some of these activities may involve the movement of earth
(e.g. reconnection of waterways) or removal of infrastructure which may cause temporary influx of soil into waterways
during heavy rainfall.
5.2 Environmental category and justification/rationale for category rating: B - Partial Assessment
While the project is expected to have mainly positive environmental impact, it is proposed as a Category B due to the
likelihood of short-term impacts during construction / de-construction phases.
5.3 For Category A and B projects, timeline and status of EA
EA start-up date: 04/15/2001
Date of first EA draft: 08/01/2001
Expected date of final draft: 09/30/2001
5.4 Determine whether an environmental management plan (EMP) will be required and its overall scope, relationship to
the legal documents, and implementation responsibilities. For Category B projects for IDA funding, determine whether
a separate EA report is required. What institutional arrangements are proposed for developing and handling the EMP?
The design of actions needed for the restoration of wetland habitat and hydrological functioning will be completed
during project preparation. The Terms of Reference for the design of alternative approaches for this sub-component will
include a section on the analysis of potential environmental impact. This report will also propose options for mitigation
and any long-term environmental management issues that will need to be considered during project implementation and
beyond (e.g. appropriate management actions during floods)
5.5 How will stakeholders be consulted at the stage of (a) environmental screening and (b) draft EA report on the
environmental impacts and proposed EMP?
The Terms of Reference for the environmental assessment calls for consultation and disclosure.
5.6 Are mechanisms being considered to monitor and measure the impact of the project on the environment? Will the
indicators reflect the objectives and results of the EMP section of the EA?
One of the project components will deal with monitoring and evaluation of project impacts, in particular those on the
environment.
6. Social
6.1 Summarize key social issues arising out of project objectives, and the project's planned social development
outcomes. If the issues are still to be determined, describe current or planned efforts to do so.
Wetland restoration may potentially may affect agricultural lands and private property that were drained in the past .
This is particularly the case for the Kalimok wetlands. If a change in land use designation is required, this can be a time-
consuming and difficult process. MAFAR is responsible for agricultural lands in the country, as well as for the irrigation
and drainage facilities on these lands, and has been consulted by the project team on the issues of land ownership and
designation. After discussions with local government officials and community members, three different restoration
scenarios were devised, ranging from a 13.5 meter flood zone affecting only municipal and state owned land, to a
maximum flooding scenario of 14.5 meters affecting about 60 land owners who farm on adjacent land (a total of 59
hectares, though no one lives on the land in question). The economic/technical analysis will be critical to formulating a
development program. If the analysis shows that the land has a greater economic value as a wetland, several
alternatives need to be explored. These include purchasing of private land by the government , i.e. the MoEW through
the National Environment Fund, by an NGO for the purposes of the project; or modifying land-use sub-category from
arable to meadows and pastures (a much simpler step than changing category).
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According to initial discussions with local people in Tutrakan, several land owners seemed interested in finding
alternative productive uses for their lands, since much of the land is subject to periodic flooding and loss of crops.
Decisions will be taken in close consultation and with the approval of land owners and government authorities.
6.2 Participatory Approach: How will key stakeholders participate in the project?
The primary beneficiaries of the proposed project are the local communities living on the Danube River in the two
project sites, and the local community living on the Black Sea where the third site will be located. As part of a
preliminary social assessment undertaken by the NGO Green Balkans, they have been involved in technical discussions
on flooding of land and on issues of management/maintenance arrangements. They have been very vocal about the
need to link sustainable livelihood activities to the wetland restoration components. This has refocused the basic
objectives of the project to go beyond global objectives of nutrient reduction, national objectives of meeting EU
directives, to include activities directly related to poverty alleviation and sustainable development. Local groups will
continue to be involved in various roles at all stages of project design and implementation as part of local Management
committees and the national Steering Committee.
The project activities have long been identified as top priorities for not only Bulgaria, but for all countries in the Black
Sea/Danube Basin. The Strategic Action Plans, formulated using a broad participatory process dating back to 1991 and
agreed to by all riparian governments, identify non-point source pollution as a top priority, and specifically, propose
wetland restoration as one of the most effective ways to reduce nutrient loads into the Danube and Black Sea. As the lead
agency for project implementation MOEW has been involved since the earliest stages of project identification which
was undertaken by WWF as part of its Lower Danube Green Corridor Program. At the request of the MOEW the scope
of the project was broadened to include national level activities related to nutrient reduction.
6.3 How does the project involve consultations or collaboration with NGOs or other civil society organizations?
TBD
6.4 What institutional arrangements are planned to ensure the project achieves its social development outcomes?
TBD
6.5 What mechanisms are proposed to monitor and measure project performance in terms of social development
outcomes? If unknown at this stage, please indicate TBD.
TBD
7. Safeguard Policies
7.1 Do any of the following safeguard policies apply to the project?
Policy
Applicability
Environmental Assessment (OP 4.01, BP 4.01, GP 4.01)
Yes
Natural habitats (OP 4.04, BP 4.04, GP 4.04)
Forestry (OP 4.36, GP 4.36)
Pest Management (OP 4.09)
Cultural Property (OPN 11.03)
Indigenous Peoples (OD 4.20)
Involuntary Resettlement (OD 4.30)
TBD
Safety of Dams (OP 4.37, BP 4.37)
Projects in International Waters (OP 7.50, BP 7.50, GP 7.50)
Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60)
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7.2 Project Compliance
(a) Describe provisions made by the project to ensure compliance with safeguard policies which are applicable.
(b) If application is still to be determined, describe current or planned efforts to make a determination.
The application of OD4.30 will be determined during the preparation of the social assessment.
8. Business Policies
8.1 Check applicable items:
Financing of recurrent costs (OMS 10.02)
Cost sharing above country 3-yr average (OP 6.30, BP 6.30, GP 6.30)
Retroactive financing above normal limit (OP 12.10, BP 12.10, GP 12.10)
_ Financial management (OP 10.02, BP 10.02)
_ Involvement of NGOs (GP 14.70)
8.2 For business policies checked above, describe issue(s) involved.
NGOs are currently being involved in project preparation, and mechanisms will be put in place to ensure NGOs
involvement during project implementation.
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F. Sustainability and Risks
1. Sustainability:
Institutional sustainability. At the national level, long-term institutional sustainability is linked to the country's
compliance with EU Directives. Given the importance of meeting these directives, the Government has requested
assistance in training and capacity building to enable staff to formulate and implement the new laws and regulations.
The project will help finance training (along with other donors, notably the EU) related specifically to nutrient reduction
and water quality monitoring. At the local level, a management structure for the maintenance of water facilities and
decision making on different issues in the wetland area will need to be established. For the Kalimok Marshes, a
committee of local stakeholders is already at work. . Similar arrangements for the Black Sea site will need to be
established. For the Belene marsh, since this is land belonging to the Ministry of Justice, MOEW will be responsible for
the management and maintenance of the restored sites.
Poverty Reduction and Sustainable Development. For long-term ecological and financial sustainability of the wetlands,
it is of utmost importance to link wetland restoration to sustainable use and local economic development. A community
assessment has already been carried out at two project sites (Kalimok, completed; Belene under preparation). Based on
the results from the community assessment, the opportunities of greatest interest to local people include fisheries
development, small business development related to bio-mass processing and tourism. While GEF funds cannot be
used to finance the credit or other start-up capital needed to undertake such activities, the project team will seek co-
financing from other donors to ensure that these activities are funded either directly or in parallel with this project.
Given the technology being introduced, recurrent cost will be model in relation to the Government's current budgetary
allocation to the water sector.
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2. Critical Risks (reflecting the failure of critical assumptions found in the fourth column of Annex 1):
Risk
Risk Rating
Risk Mitigation Measure
From Outputs to Objective
Transboundary nutrient load does not
M
Concerted action by all riparian countries,
decrease due to: (a) lack of serious effort
supported by Black Sea and Danube Commissions,
from upstream riparian, and
GEF Regional projects, and other donors to
(b) increases in agricultural activity in
decrease nutrient pollution. Strong public
Bulgaria as economy improves
awareness campaign aimed at informing local
farmers; incentives provided by EU accession
timetable; and donor-financed projects in eco-
farming
Nutrient stripping potential of wetlands not
S
Project development includes technical water
as great as originally expected
modeling study for one wetland site to refine
estimates
Sustainable economic development activities
M
Management plan for wetlands includes socio-
supported in project sites not sufficient to: (a)
economic development activities, financial
ensure long-term sustainable use of wetland
projections. Strong public awareness campaign
resources; and (b) increases in incomes of
and training of local staff in benefits of wetlands
local communities
Close collaboration with other donors who can
finance micro-credit and sustainable livelihood
activities
From Components to Outputs
River Basin Authority is slow to be created
M
The incentives created by EU accession provide an
and is not capable of managing nor does it
impetus which will likely carry the project through.
have the legal authority to enforce a nutrient
However, the project will provide technical
reduction program, leading to increases or
assistance and training to MOEW as well as staff
no decreases in pollution
assigned to the newly created Danube RBA thereby
building its capacity to formulate and manage a
new institution. In addition, the GEF Regional
program which is linked to this operation will
provide TA on policy issues, conduct regional
training workshops.
Land ownership in the project area is more
M
Discussions on land issues are already underway
complex than preliminary analysis would
with local authorities and the Ministry of Justice.
indicate, necessitating a low-case scenario
Local officials and NGOs are also involved. This
for flooding and thereby reducing potential
process must continue to build trust among
ecological benefits
stakeholders. The economic and technical
evaluation of alternatives in land-use will be
discussed in depth with all stakeholders prior to the
government taking a decision. Even in a low-case
scenario, ecological, biodiversity, and nutrient-
stripping benefits are justified.
Overall Risk Rating
M
Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk)
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G. Project Preparation and Processing
1. Has a project preparation plan been agreed with the borrowe r (see Annex 2 to this form)?
Yes - date submitted:
03/20/2000
The project preparation plan was formulated in collaboration with our counterparts in the MOEW during the Dec'2000
mission. A list of the studies to be undertaken with GEF PDF B financin g are listed in annex 2.
2. Advice/consultation outside country department:
Within the Bank: Steve Lintner; Isabel Braga; Manuel Marino, John Hayward, Adriana Damianova, Karin Shepardson
(ECSSD); Paul O'Connell (RDV); Tony Garvey (SASEN)
Other development agencies: WWF-Danube Programme, Danish Aid, USAID, Ramsar International Secretariat,
Wetlands International (the Hague)
3. Composition of Task Team (see Annex 2):
Jocelyne Albert, Former Task Team Leader
Rita Cestti, Senior Water Resources Economist, Current Task Team Leader
Marea Hatziolos, Environmental Specialist
Andreas Wurzer, Environmental Specialist, WWF-Danube Programme
Rayka Doubleva, Environmental Consultant
Kerstin Canby, Environmental Specialist
Robert Robelus, Senior Social/Environmental Specialist
4. Quality Assurance Arrangements (see Annex 2):
Karin Shepardson (ECSSD), Steve Lintner (ENV), Gonzalo Castro (ENV), Ariel Dinar (RDV)
5. Management Decisions:
Issue
Action/Decision
Responsibility
Total Preparation Budget: (US$000)
Bank Budget: US$46,000 (02/08/2001) Trust Fund: US$ 37,000
(02/08/2001)
Cost to Date: (US$000) $15,000
Preparation costs at the time of the PCD review were less than $15,000 of BB/GEF plus $7,000 drawn down from the
Austrian Trust Fund. The team was able to draft the PCD thanks to the preparation work undertaken by EU Phare and
WWF, in collaboration of the Water Directorate of the MOEW. In order to complete project preparation, the team
requested the following budgetary allocation: Bank/GEF Administrative Budget: $120,000; GEF PDF B: $350,000
GO
Further Review [Expected Date]
Rita E. Cestti
Marjory-Anne Bromhead
Andrew Vorkink
Team Leader
Sector Manager
Country Manager
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Annex 1: Project Design Summary
BULGAR IA: Wetlands Restoration and Pollution Reduction Project (GEF)
Link to good practice examples
\
Key Performance
Hierarchy of Objectives
Indicators
Monitoring & Evaluation
Critical Assumptions
Sector-related CAS Goal:
Sector Indicators:
Sector/ country reports:
(from Goal to Bank
Mission)
Protecting and enhancing the
Improvement in water quality Danube and Black Sea
Improved institutional
environment
of Danube as evidenced by a
Monitoring reports.
capacity to implement and
decrease in nutrient loads
monitor water legislation.
downstream from project
National water quality
sites.
statistics.
Sustainable management of
wetlands.
Fighting poverty
Reduced poverty in Danube
National statistics.
Sustainable economic
Region.
development activities
supported by government and
donors.
GEF Operational Program:
International Waters
Improved water quality in the Danube water quality
Other upstream riparian
Operational Program (8):
Danube River below the
monitoring reports.
countries do not initiate water
water-body based
project sites.
quality actions.
transboundary program
or program? and biodiversity
operational program (2):
conservation and sustainable
use of globally significant
biodiversity in wetland,
coastal and freshwater
ecosystems.
Globally important
Ecological surveys.
biodiversity conserved and/or
sustainably used.
Global Objective:
Outcome / Impact
Project reports:
(from Objective to Goal)
Indicators:
Improve water quality of
same as above
Nutrient-stripping potential
Black Sea Basin.
of wetlands as good or better
than similar wetlands in other
parts of the world.
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Improve conservation of
Donors finance micro-credit
globally significant
and other sustainable
biodiversity in selected
livelihood activities.
wetland sites through
sustainable management and
use.
Improved water quality from
Danube and Black Sea
Program Development
Bulgarian sources into the
Commission Monitoring
Objective:
Danube River.
Reports Ecological surveys.
Reduce transboundary water
Improved biodiversity
Socio-economic and
pollution and conserve
habitat.
ecological surveys.
biodiversity in the Danube
River through improved
management and use of the
water resources and
restoration of wetlands.
Assist Bulgaria in meeting its
Sustainable use of floodplain
international commitments
wetlands in demonstration
related to environmental
sites.
aspects of water resources
management.
Increased well-being of local
communities who depend on
Danube River.
Increased capacity of
responsible institutions to
formulate water-sector
policies, and to manage water
resources consistent with EU
Directives and other
international conventions.
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Key Performance
Hierarchy of Objectives
Indicators
Monitoring & Evaluation
Critical Assumptions
Output from each
Output Indicators:
Project reports:
(from Outputs to Objective)
Component:
1a. Preparation of integrated
1a. Plan consistent with EU
1a. Management plan.
1a. Continued strong
management plan for Danube
Directives on wetlands and
Government support for
Basin, focusing on wetland
non-point source pollution;
Basin-wide wetland plan.
use and nutrient reduction of
includes strategy for
transboundary pollution;
achieving long-term targets.
b. Wetlands potential as
improved policy framework
nutrient strippers consistent
for reduction of non-point
with estimates.
source pollution.
c. Public awareness
campaign successful; Local
Steering Committee
2 a. Selection of priority
operating effectively.
wetland restoration site based
on national plan.
b. Water quality from
wetland areas improved.
c. Indicator species thriving
d. healthy wetland
e. increase in fish catch in
local areas.
2a. Completion of
2a. Management plan
2.
comprehensive plan for
Danube / Black Sea Basin for
wetland restoration.
b. Two priority sites restored
b. M&E Reports on water
and removing nutrients.
quality.
c. Natural habitats improved
c. M&E Reports ­ species.
and sustainably used by local
communities.
3.
Effective water
3. Quality data on water
3. M&E Reports.
3. Government gives priority
quality monitoring system
quality and wetland
to training activities in first
compatible with other
functions;
years of project
systems in region.
Data shared with other
implementation.
country systems
4.
Technical and
4. M&E system well-design
4. Socio-economic
managerial staff of MoEW
and producing quality
assessment (at MTR);
trained (hydrological
information;
Project monitoring reports;
monitoring, wetland
social aspects of land-use
Supervision Reports.
management, project
integrated into management
management, land-use
plans:
planning etc).
well managed wetland sites.
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37
5.
Economic activities
5. Feasibility studies
5. Project reports;
5. Donor co-financing
identified within management prepared;
Supervision Reprots.
secured.
plans which contribute to
Micro-credit fund established
long-term sustainability.
by other donors.
6. Increased awareness and
6. Consultation and
6. Socio-economic
6. Wetlands begin to recover
appreciation by local
workshops with community
assessment.
and undertake ecological
communities of wetland
groups.
functions quickly to local
functions and their economic
Educational materials
communities can quickly see
value.
developed and in use in local
benefits.
schools.
Project Components / Sub-
Inputs: (budget for each
Project reports:
(from Components to
components:
component)
Outputs)
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ANNEX 2
Romania
Agricultrual Pollution Control
DRAFT
Project Concept Document

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2
ROMANIA
AGRICULTURAL POLLUTION CONTROL
PROJECT CONCEPT DOCUMENT
EUROPE AND CENTRAL ASIA REGION
ECSSD
Date: September 2000
Team Leader: Jitendra P. Srivastava
Country Manager/Director: Andrew N. Vorkink
Sector Manager/Director: Kevin M. Cleaver
Project ID: P066065
Sector(s): VY - Other Environment
Lending Instrument: GEF Grant
Theme(s): ENVIRONMENT, AGRICULTURE
Focal Area: Pollution Control / Waste Management
Poverty Targeted Intervention: N
Project Financing Data : GEF Grant
For Loans/Credits/Others:
Total Project Cost (US$m): 12.78 Cofinancing: To be determined
Total GEF Financing (US$m): 5.50
Borrower/Recipient: GOVERNMENT OF ROMANIA
Responsible agency: MINISTRY OF WATERS, FORESTS AND ENVIRONMENT PROTECTION
Project Implementation Period: 5 years
OCS PCD Form: October 9, 1998
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3
A. Project Development Objective
1. Project development objective: (see Annex 1)
1. Project Development Objective: The overall project development objective is to increase
significantly the use of environment-friendly agricultural practices in the project area and thereby
reduce pollution from agricultural sources in Romania to the Danube River and Black Sea. In
support of this objective, the project will assist the Government of Romania to: (i) promote the
adoption of environment-friendly agricultural practices by farmers' associations, family farms
and individual farmers in seven communas of the Calarasi Judet (county); (ii) promote
ecologically sustainable land use in the Boia nu-Sticleanu Polder including a conservation
management plan for the Iezer Calarasi water body; (iii) strengthen national policy and local
regulatory capacity; and (iv) promote regional level collaboration. The project, envisaged as a
pilot activity in the Calariasi county in the southern part of Romania, along the lower Danube,
will be replicated in similar sites in Romania which will, in the long term, reduce the discharge of
nutrients and other agricultural pollutants and yield substantial benefits in terms of improved
quality of Romanian surface and ground waters and the Black Sea.
Project Global Environmental Objectives: The global environmental objective of the Project is to
reduce, over the long-term, the discharge of nutrients (nitrogen and phosphorous) and other
agricultural pollutants into the Danube River and Black Sea through integrated management of
the Calarasi region, by combining better on-farm environmental management and ecological
rehabilitation of an agricultural polder. These activities are directly linked to "Strategic Action
Plan for the Protection and Rehabilitation of the Black Sea" (BSSAP), formulated with the
assistance of the Global Environment Facility (GEF). BSSAP has identified non-point sources of
agricultural pollution as the most serious problem facing the Black Sea. By improving
agricultural practices, through relatively low cost investments, changes in consumer practices and
by sustainably managing a high priority former floodplain area, the Project would also
complement the Danube River Pollution Reduction Program and assist the Government in
meeting its international obligations under the Bucharest Convention -- Convention for the
Protection of Black Sea from Pollution, signed in April 1992 by all six coastal countries and
enforced regionally in April 1994. In addition, the Odessa Ministerial Declaration on the
Protection of the Black Sea was signed in 1993 by Ministers of Environment from all six Black
Sea coastal countries to adopt a series of actions which would collectively support the
rehabilitation and protection of the Black Sea. The Danube River Protection Convention was
signed in 1994 and came into force in December 1998. The International Commission for the
Protection of Danube River (ICPDR) is responsible for its implementation as well as moving
towards meeting the European Union Directives: 91/676/CEE ­ Directive regarding water
protection against pollution with nutrients originating from agriculture; and 96/61/CEE ­
Directive related to the prevention and the complete reduction of pollution. Also, through
proposed project activities of tree planting, recycling of manures and crop residues and
ecologically sustainable land use in the polder, carbon sequestration will occur. The improved
farming practices envisaged by the project will result in a decrease in methane emissions from
farmyard manure.
2. Key performance indicators: (see Annex 1)
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B. Strategic Context
1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see
Annex 1)
Document number: 16559 RO
Date of latest CAS discussion: 05/09/97
Protecting and enhancing the environment is one of the four main development challenges
identified in Romania Country Assistance Strategy (CAS). Towards this, the Bank will (i)
continue its joint work alongside the EU and other partners to help the Romanian counterparts
implement the National Environment Action Plan (NEAP) through institutional strengthening of
the Ministry of Waters, Forests and Environmental Protection, further research work and
development of regulations to facilitate the EU accession process; (ii) ensure that environmental
issues are fully addressed in the Bank's work in other sectors such as private sector development,
energy and agriculture; and (iii) support selected investments, including GEF operations.
In support of this development challenge, the project will (i) promote environment-friendly
agricultural practices; (ii) promote ecologically sustainable land use in a high priority floodplain
area; (iii) assist with relevant legal and regulatory framework; and (iv) raise public awareness.
The Project is also in line with the initiatives launched in support of the agricultural sector, which
was deemed a priority on the grounds that it offered good prospects for generating a supply
response and increasing private sector involvement. The proposed Project builds on the measures
to be implemented under the Agricultural Support Services Project (ASSP) to promote
environmentally benign practices for the storage, management and application of manure, use of
buffer strips, crop rotation and cover crops to reduce over the long-term the discharge of nutrient
load into the Romanian ground and surface waters as well as the Black Sea.
1a. Global Operational strategy/Program objective addressed by the project:
GEF Operational Strategy/Program Objective Addressed by the Project: The Project will
implement priority actions identified in the Black Sea Strategic Action Plan, Danube River
Strategic Action Plan and Danube River Basin Pollution Reduction Program supported by GEF.
The Project's objective of reducing non-point source pollution from agriculture is consistent with
GEF Operational Program Number 8, Waterbody Based Operational Program, which focuses
"mainly on seriously threatened water-bodies and the most important transboundary threats to
their ecosystems." Under the Program, priority is accorded to projects that are aimed at "changing
sectoral policies and activities responsible for the most serious root causes or needed to solve the
top priority transboundary environmental concerns". The Project's holistic approach on
combining good agricultural practices with ecologically sustainable land use management of a
high priority former floodplain area, identified under the Danube River Pollution Reduction
Program, is consistent with the GEF Operational Program Number 9, Integrated Land and Water
Multiple Focal Area Operational Program, which supports "more comprehensive approaches for
restoring and protecting the international waters environment." Projects under this Operational
Program address the "types of measures needed to ensure that the ecological carrying capacity of
the water body is not exceeded" and the proposed project is commensurate with this.
The Project will provide an opportunity for the GEF to be a catalyst for actions to bring about the
successful integration of improved land and water resource management practices. GEF support
will reduce costs and barriers to farmers adopting improved and sustainable agricultural practices.
It will help develop mechanisms to move from demonstration level activities to operational
projects that reduce non-point source agricultural pollution to the Danube River and Black Sea.
The Project builds on the Rural Environmental Protection Project in Poland and the Agricultural
Research, Extension and Training (ARET) Project in Georgia and is expected to serve as a model
for similar operations to be launched in the other littoral countries for which a strategic
partnership between the GEF and the Bank is envisaged. The World Bank is preparing a Black
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Sea/Danube River Strategic Partnership (BSDRSP) for review by the GEF Council in the Spring
of 2000. Under the Partnership, riparian countries would be eligible for GEF funding for projects
that would control or mitigate nutrient inflow to the Black Sea in one or more of the following
ways: (i) restore or create wetlands that would reduce nutrient discharge; (ii) reform or improve
agricultural and land use management practices to reduce nutrient load and/or diffuse discharges
through run-off; and (iii) treat wastewater from small communities and industries. The proposed
project would serve as a model for future projects under this Partnership Program.
2. Main sector issues and Government strategy:
Main Sector Issues: The Black Sea, a critical regional resource, is one of Europe's newest seas,
formed a mere seven to eight thousand years ago. Despite its uniquely fragile natural physical and
chemical characteristics, the Black Sea ecosystem had been relatively stable until recent times.
During the past decades, however, the Black Sea suffered severe environmental damage, due
mainly to coastal erosion, eutrophication, insufficiently treated sewage, introduction of exotic
species, inadequate resource management, loss of habitat, all of which led to a decline of its
biological diversity and long-term ecological changes. There is general agreement that
eutrophication, caused by an increase in nutrient flux down the major rivers, particularly in the
late 1960s when fertilizer and chemical use increased markedly as a result of the "Green
Revolution" and subsidization of these inputs , is the most serious problem facing Danube River
and the Black Sea over the medium-to long term. The effect of eutrophication on the
northwestern shelf of the Black Sea is generally recognized as disastrous and is primarily related
to nutrient loads carried by Danube River.
Nutrient flow from the Danube River: Black Sea Environmental Program (BSEP) Studies
revealed that 58 % of the total nitrogen and 66 % of the total phosphorous flowing in dissolved
form into the Black Sea come from the Danube basin. More than half of all nutrient loads into
Danube River originate from agriculture, about one forth from private households and about 10 ­
13 % from industry. The most important pathways into the Danube basin for phosphorous are
direct discharges (33% of the total flow, predominantly from agriculture), erosion/runoff (31 %,
mainly agriculture) and sewage treatment plant effluents (30%). Nitrogen loads come from: direct
discharges (35 %), erosion/runoff and sewage treatment plant effluents in more or less equal
shares, again agriculture being the source for more than half the total nitrogen run-offs in many
countries.
The Trans-boundary Diagnostic Analysis carried out on the basis of a pollution source inventory
for the BSEP reveals that Romania plays a particularly significant role in the discharge of
nutrients into the Black Sea, accounting for about 27% of the total discharge. The other river
basin countries (Bulgaria, Ukraine, Georgia, Russia and Turkey) together account for another
43% and the non-coastal countries (Austria, Belarus, Bosnia -Herzegovina, Croatia, Czech
Republic, Germany, former Yugoslavia, Hungary, Moldova, Slovakia and Slovenia) for the
remaining 30%.
Nutrient flow from Romania : Romania is the biggest contributor of nutrients to the Black Sea as
its entire territory drains into the Black Sea. Total nutrient emissions in surface water in 1994
were about 284 ­ 306 kilo tons nitrogen/year and 39 ­ 40 kilo tons phosphorous/year. About 44
% of the total nitrogen input stems from agriculture, while municipal waste water accounts for 11
­ 12 % and industry for 9 ­ 10 %. In the case of phosphorous, the role of agriculture is even
greater, accounting for about 58 % of total emissions, followed by industry with 20.6 % and
municipal waste water with 11.4 %. Groundwater pollution with nitrates, nitrates and microbial
organisms from agriculture has a major social significance from the point of view of drinking
water supply for rural settlements in Romania.
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Between 1996-1999, forty-five cases of acute nitrate poisoning were reported in the proposed
project area (Calarasi Judet). In 1997, a number of infants were diagnosed and hospitalized with
acute nitrates poisoning. 3 In fact, all cases of acute nitrate poisoning in 1997 in Romania were in
the Calarasi Judet. Between 1996 and 1999, 59 samples from public wells and microcentrales in
Calarasi were analyzed for quality. Of this, 45 samples (76.2%) exceeded bacteriological
standards and 47 samples (79%) exceeded acceptable levels of chemical content. Twenty samples
(39.9%) of the 45 samples that did not meet the maximum admitted number of bacteria, exceeded
acceptable levels for Streptococus Fecalis and and 29 samples for Fecalis Coliforms. Also, low
levels of sanitation and lack of hygiene are increasing transmission of enteric germs, leading to a
large number of diseases including Acute Diarrheic Disease (ADD).4
Following the political and social upheaval caused by the transition to a market economy, and the
accompanying economic decline in the region, riparian countries have reduced the overall
discharge of nutrients into the Danube River and the Black Sea. Nevertheless, the overall
discharge of nutrients is still higher than what it was in the 1960s. Largely because of this, and
also because of the success of nutrient load reduction programs, particularly, in the upper Danube
countries, there has been partial recovery of coastal ecosystems. The economic downturn in the
coastal countries is temporary, and offers a window of opportunity for actions aimed at improving
the marine ecosystems and avoiding the return to the previous situation of chronic eutrophication.
Government Strategy
Romania has assumed its international obligations under the Bucharest Convention, the Odessa
Ministerial Declaration on the Protection of the Black Sea, Danube River Protection Convention
and to move toward the European Union Directives. In addit ion, as a member, Romania is also
committed to the overall goals of the joint Danube-Black Sea Working Party, which may be
summarized thus:
The long term goal is for all Black Sea basin countries to take measures to reduce nutrient
levels and hazardous substances to such levels necessary to permit the Black Sea eco-system
to recover to similar conditions as those observed in the 1960s.
As an intermediate goal, urgent control measures should be taken by all countries in the
Black Sea basin, in order to avoid that discharges of nitrogen and phosphorus to the Black
Sea exceed those levels observed in 1997.
Government Strategy for Agriculture: On-farm environmental management is an integral part of
the Government's overall strategy for the agricultural sector, which is aimed at creating an
enabling environment to fully realize the sector's yet unfulfilled potential. In support of the
strategy, agricultural input and output prices are being liberalized as is the trade regime. Also,
about 80% of the arable la nd has been returned to previous owners and heirs. However, as few of
the new owners have farming experience, measures are expected to be initiated shortly under the
proposed Bank's Agricultural Support Services Project to strengthen the infrastructure for the
agricultural research, extension and training system and make the entities delivering such services
more responsive to the needs of private farmers, including access to information and cost
effective agricultural technologies and practices which, while increasing productivity, promote
conservation and sustainable use of the country's natural resource base.
3 Romania Vadineanu, A et al, 1999 - Targets concerning socio -economic restructuring emerged
from the material accounting analysis at the National Scale.
4 Report prepared by Directorate of Public Health, Calarasi for the proposed project.
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Government Strategy for Environment: Reduction of nutrient run-off (nitrogen and phosphorous)
into the Danube and Black Sea from agriculture was identified as a priority action by the National
Environmental Action Plan, and both the Black Sea and Danube River Basin Strategic Action
Plans. Wetland restoration along the Danube River was identified as one of the most effective
ways to reduce nutrient loads into the Danube and Black Sea and the project's selected site,
Boianu-Sticleanu agricultural polder, is listed as a high priority area both in the NEAP and in the
Danube River Pollution Reduction Program. The project will build upon the experience in polder
restoration during four years of implementation of the GEF-financed Danube Delta Biodiversity
Project. The Ministry of Waters, Forests and Environmental Protection is in the process of
harmonizing the environmental legislation with that of the EU, as a condition for accession, and
the Nitrates Directive is one of the most important Directive.
3. Sector issues to be addressed by the project and strategic choices:
Sector issues to be addressed by the project and strategic choices:
The Project would extend and deepen the ongoing and proposed reforms of the sector by
addressing the following key issues:
fully integrating environmental concerns into agricultural practices to make them more
sustainable, including the storage, management and application of manure, domestic waste
management and riparian forest buffer strips, to reduce over the long term the discharge of
the nutrient load into the Romanian ground and surface waters as well as the Black Sea;
assisting the Government in meeting its international obligations under the Bucharest
Convention, the Odessa Ministerial Declarations of the Protection of the Black Sea and the
Danube River Protection Convention; and
moving towards compliance with the EU Directives as part of the EU-accession process.
C. Project Description Summary
1. Project components (see Annex 1):
The pilot project area comprises seven communas in Calarasi Judet, a compact area of about
74,200 ha with 64,000 ha as arable land, in the southeastern part of Romania. The southern part
of this area, bordering the lower Danube river, includes the Boianu-Sticleanu polder (approx.
23,000 ha), formerly a floodplain area, drained and transformed into an agricultural polder in the
late sixties and now containing large areas of cultivated land, small areas of floodplain forests,
degraded lands and Iezer Calarasi waterbody. Iezer Calarasi, with a surface of 3,200 ha is
proposed to be declared a nature reserve, being an important corridor for bird migration, most of
them listed on Bonn and Bern Conventions. Iezer Calarasi was also identified by WWF studies
under the Danube Pollution Reduction Program (Project RO 67), the NEAP, and recent studies
coordinated by MWFEP, as a high-priority area to be rehabilitated in the Lower Danube River
Basin.
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1. Project components : (See Annex 6 for a detailed cost breakdown)
The four project components would build on experiences in related existing and planned
initiatives, and will support activities to be implemented over five years as follows: (Please note
that costs for each component / sub-component are tentative and will be finalized at the next
preparation mission in November 2000).
Component 1: Activities in the Calarasi Judet (US$10.69m):
·
Promotion of Environment-friendly Agricultural Practices (US$2.51) will include adoption
of agricultural practices that would maintain or increase profitability from crop production
while reducing non-point source pollution from agriculture. The proposed activities include:
(i) the promotion of environment-friendly agricultural practices, such as crop rotation,
conservation tillage systems, cover crops, riparian buffer strips and improved livestock
management; and (ii) efficient application application of organic and inorganic fertilizers
based on soil tests. These activities will result in reducing nutrient run-off into surface and
ground-water, protecting the long-term fertility of soils by maintaining organic matter levels,
fostering soil biological activity, through the use legumes and vegetables in the crop rotation
schemes as well as effective recycling of organic materials, including crop residues and
livestock wastes. Use of these practices can be expected to raise yields and reduce the need
for purchased inputs.
·
Manure Management Practices (US$3.0m) to include collection, storage, handling and use
of animal manure at the village level. Under this sub-component, the U.K. Know How Fund
will finance community training and awareness on good practices for waste collection and
manure management, including composting, testing, and field application.
·
Integrated management of Boianu-Sticleanu Polder (US$1.47m): The project proposes to
develop and support specific land use management plan for the Boianu-Sticleanu polder.
Thus the project would develop an action pla n for a vulnerable area as requested under the
EU Nitrate Directive. This component which will be based on the results of the baseline
survey to be undertaken in the preparation phase, would include: (i) afforestation of the
degraded lands adjacent to the Iezer Calarasi and of the unproductive riparian land; (ii)
implementation of the code for good agricultural practices on the arable land; (iii) promoting
sustainable use of pastures and other grazing areas; and (iv) conservation management plan
for the proposed Iezer Calarasi nature reserve. The component will, therefore, complement
the restoration activities on the Bulgarian side (Oriahovo, Bulgarian Danube islands and the
floodplain west of Belene and Tutracan).
·
Water and Soil Quality Monitoring (US$0.45m): The project would strengthen the capacity
of EPA and Public Health Department in Calarasi to carry out water and soil quality
monitoring. The project would support the incremental costs of: (a) selecting and maintaining
a set of water and soil quality monitoring sites in the project area; (b) upgrading the
equipment for monitoring of water and soil quality; and (c) incremental operating expenses
for monitoring activities. The two local agencies will be responsible for monitoring the water
and soil quality at selected sites, as well as the long-term environmental benefits from
reduced discharges of nutrients and microbial contaminants into surface and groundwater.
·
Public Awareness and Replication in Calarasi Judet (US$0.23m): The project will support
the promotion of public awareness activities to achieve replicability of this component in
Calarasi Judet. The public awareness activities will be undertaken in the seven pilot
communas and will be delivered through cost effective, traditional and innovative vehicles
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which should lead to awareness among the population of the contamination of their drinking
water supplies and the potential of the practices being demonstrated to produce health,
ecological and commercial benefits. Co-ordination on timing of message delivery and
availability of resources to implement suggested improvements will be essential. Co-
operation with local authorities and other local leaders in the communities is also essential for
an effective campaign, to reach the majority of the population in the communas concerned.
Farmers and other stakeholders will be presented the benefits of the activities in order to
consolidate the new behaviour patterns. Personnel from the Judet's agricultural consultancy
office (OJCAC) will receive training in the use and benefits of environmentally friendly
agricultural practices. They will participate in the demonstrations and field trials and thereby
become a major vehicle for encouraging the adoption of these practices throughout Calarasi.
·
Wastewater Treatment at Olenita (US$3.03m): EU is favorably considering support through
PHARE 2000 Regional, the MWFEP request for a wastewater treatment plant in Olenita,
located upstream from Calarasi at an approximate cost of 3.07 million euro. There is also a
possibility that under PHARE 2001, EU will support a wastewater treatment plan in Calarasi
town at an estimated value of 15 million euro. These water treatment plants will help reduce
pollution to the Danube River from Calarasi county, thus furthering the objectives of the
proposed project.
·
The component includes a "needs assessment" activity under a parallel-financed U. K. Know
How Fund to determine main constraints and priorities of raising profitability of farming at
village and individual farm levels. Such financing will also provide technical assistance to
extension agents in organic farming, vegetable growing, and livestock production, especially
to female farmers.
Component 2: National Level Activities (US$1.18m)
Strengthening National Policy and Regulatory Capacity (US$0.98m): which would include
support to the Ministry of Water, Forests and Environmental Protection (MWFEP) and Ministry
of Agriculture and Food (MAF) for: (i) harmonizing relevant legislation with the requirements of
the European Union, specifically the Nitrate Directive; (ii) developing the Strategy for Nutrient
Reduction as part of the good practices for environment protection in agriculture which is
currently being prepared by MAF; (iii) strengthening the capacity of the proposed National
Agency for Ecological Agriculture in its efforts to promote scientific organic farming and land
use management: (iv) training personnel of The National Consultancy Agency for Agriculture
(ANCA) in the methods of environmentally-friendly agriculture . The project will also support
the MWFEP and MAF to develop and implement a Code for Good Agricultural Practices in
Calarasi and use this as a model for a national code.
Public Awareness Activities and Replication Strategy (US$0.20m): A broad, nationwide public
information campaign will be undertaken to disseminate the benefits of proposed project
activities. Information will be delivered (as a public service) through the public broadcasting
institutions, including a regular supply of information to the mass-media on the progress of the
project. This approach will build a general good-will for the project and its benefits, and will raise
the interest of potential future clients. The demonstrations and on-farm trials in the project area
will be used as a practical laboratory for training agricultural extension and environmental
personnel from elsewhere in Romania. Activities will, in part, be selected for piloting based on
their broader applicability to agriculture in the Danube Plain and other regions of Romania.
Component 3: Regional collaboration (US$0.15m): The project would provide for the
organization of regional workshops, field trips, training, publication in international agriculture
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and environmental journals and other activities to promote replication of project activities in other
Black Sea riparian countries. The pilot activity will aim to serve as a model to be replicated in
countries such as Bulgaria, Ukraine, Moldova, which will help contribute to significant
reductions in the nutrient loads entering the Danube River and Black Sea.
Component 4: Project Management Unit (US$0.75m). The project would support a Project
Management Unit (PMU) to be established in the DGA offices, Calarasi. The PMU would
comprise Project Manager, Procurement Specialist, Project Financial Management Specialist and
Project Administrative Assistant. The PMU would co-ordinate project implementation by the
different implementing agencies and would be responsible for all procurement, financial
management and monitoring/evaluation matters.
Indicative
GEF
% of
Component
Activity
Costs
% of
financing
GEF-
(US$M)
Total
(US$M)
financing
Promotion of environment-
2.51
19.6
1.05
41.7
friendly agricultural practices
Calarasi
Manure management
3.00
23.5
1.62
53.9
practices
Integrated management of the
1.47
11.5
1.04
70.5
Boianu-Sticleanu Polder
Water and Soil Quality
0.45
3.5
0.20
45.3
Monitoring
Public Awareness activities
0.23
1.8
0.20
86.1
and Replication
Wastewater Treatment Plant
3.03
23.7
0.00
0.0
National
National Policy Framework
0.98
7.6
0.38
38.8
National public awareness
activities and Replication
0.20
1.6
0.20
100.0
Regional
Regional Cooperation
0.15
1.2
0.10
67.7
Project
0.75
5.9
0.71
94.7
Management
Unit (PMU)
Total Project Costs
12.78
100.00
5.50
43.1
2. Key policy and institutional reforms to be sought:
Key Policy reforms to be sought:
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With the proposed competitive leasing out of the agricultural land in the Boianu-Sticleanu Polder,
the intensity of agriculture could increase with a concomitant rise in the quantity of inputs used,
particularly inorganic fertilizers and pesticides. The preparation mission raised the issue of how
to ensure that the new owners/lessees will follow the code of conduct that is agreed in the land
management plan. Both MWFEP and MAF representatives gave assurances that, within the
context of Romanian legislation, the people responsible for farming in the polder would be
obliged to follow the guidelines of the land management plan. The preparation mission advised
that the Bank would require the government to ensure the leasing agreements contain provisions
for lessees to follow the guidelines and mechanisms would be established for enforcement. Both
the ministries assured the mission of jointly signing a side-letter reflecting this agreement.
MAF also confirmed to a follow-up preparation mission that the leasing agreements would
contain a clause to require farming companies leasing the land to adopt the Code of Good
Agricultural Practices along with specific provisions for the use of sustainable practices in the
Polder. The leasing agreements would also contain provision for regular monitoring of the
quality of both irrigation and drainage water to check for changes in the nutrient balance.
With respect to the introduction of agro-forestry, windbreaks and buffer strips in the project area,
the mission sought assurance from the MWFEP and MAF that the current tax on change of land
use from agricultural land to forest land would not be applied. Both Ministers made reference to
the Land Law 18/1991, article 2, paragraph (a), according to which, the lands covered by forestry
vegetation which are not included in existent forest management plans represent agricultural
lands, so for degraded lands where agro-forestry is going to be practiced, the land will belong in
the same land-use category and no tax will be applied, provided that they will not be a part of the
forestry planning and will be administered by the communas, farmers' associations and not by the
Territorial Forestry Units.
This project will support the MWFEP and MAF to develop and implement a Code for Good
Agricultural practices in Calarasi, which will include the implementation of land use management
plan.
Institutional Reform to be sought:
The project would pilot the establishment of inter-sectoral cooperation between MWFEP and
MAF in the implementation of the project. The institutional arrangements agreed between
MWFEP, MAF and the Ministry of Finance during project preparation, which would include
setting up of the Project Preparation Unit in Calarasi, would establish the necessary collaborative
requirements for implementation. The project would also strengthen national policy and
regulatory capacity of the country for meeting its international obligations under the Bucharest
Convention, Odessa Ministerial Declaration on the Protection of the Black Sea, and Danube
River Protection Convention as well as assist Romania in implementing the EU Directives as part
of the EU accession process. Further the project would contribute to the on-going
decentralization process and help Romania build local institutional capacity to absorb EU
accession and structural funds
3. Benefits and target population:
The proposed project is the first instance where the Government of Romania is mainstreaming
environmental considerations in agricultural practices. The synergy of such an approach will
bring about greater benefits globally, regionally and locally vis-ŕ-vis independent, discrete
agricultural and environmental projects.
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Internationally: (i) through a continual reduction in the discharge of nutrients into Danube River
and Black Sea and the accompanying improvements in the local and Black Sea water quality; (ii)
improving habitat for migratory waterfowl and a variety of endangered species;(iii) by
sequestering carbon in the grasslands, cropland and forests.
Nationally: (i) through improvements in quality of the ground and surface waters; (ii) better
maintenance of productive ecosystems and critical natural habitats in the freshwater, estuarine
and near shore waters along the Black Sea coast; and (iii) progress towards compliance with EC
Directives; and (iv) increased agricultural productivity through improved agricultural practices.
Locally: (i) at the farm level, additional income from the use of manure as fertilizer, rotations, and
improved livestock grazing practices; (ii) improvement in health and sanitation as there will be an
improvement in the drinking water and general hygiene of the villages; and (iii) through terrestrial and
aquatic habitat enhancement increase populations of birds and fish species of local economic and social
importance.
The private farmers and rural households are the primary beneficiaries of the Project.
4. Institutional and implementation arrangements:
Project Oversight Committee: A Project Steering Committee will replace the current Inter-
Ministerial Working Group. The Steering Committee will be established by the two Ministers,
MWFEP & MAF, and will consist of seven members, one representative from each Ministry
(MWFEP, MAF and MOF) and four to be nominated by MWFEP and MAF. In order to
strengthen the linkages with other projects supported by World Bank, the Chairman of the
Competitive Grant Scheme Board of the Agricultural Support Service Project would be one of the
members of the Steering Committee. The committee will be responsible for providing project
oversight, advice and assistance in resolving issues associated with project implementation. The
Ministers of MWFEP and MAF will co-chair the Steering Committee. MWFEP has been
designated by the Ministry of Finance as the line Ministry with overall responsibility of project
implementation.
Project Management Unit (PMU): MWFEP would establish a Project Management Unit (PMU),
located at DGA­Calarasi to handle procurement, all financial matters relating to disbursements,
maintenance of project accounts and financial monitoring, the monitoring and evaluation of all
project activities. The PMU would co-ordinate the implementation of activities by the different
local and national agencies, including the field agencies of MAF and MWFEP. The PMU, which
would comprise Project Manager, Procurement Specialist, Project Financial Management
Specialist and Project Administrative Assistant, has initially been established as a Project
Preparation Unit. The Project Manager and the Procurement and Financial Management
Specialists have been appointed. The Project Manager will report to the Minister, MWFEP.
The implementation arrangements are summarized in Organization charts for (a) project
preparation and (b) project implementation in Annexes 7 and 8 respectively.
Financial Management: A Financial Management System approved by GOR and the World Bank
will be procured as part of establishing the Project Preparation Unit and will be used throughout
the project. The system would be developed to cover the operating procedures, audits and
reporting requirements of the GOR, World Bank and other international donors. Prior to
negotiations, the Bank's Financial Management Specialist will issue the Financial Management
Certificate (Annex 4 of the Bank's Financial Management Manual available at the World Bank
Resident Mission, Bucharest) together with an action plan agreed with the Borrower.
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Project Monitoring and Evaluation ­ Project monitoring and evaluation would be the
responsibility of the PMU. Monitoring will be based on the baseline survey undertaken during
preparation phase of the project. Extensive data by communas and villages have been collected
and the Public Health Department and the EPA-Calarasi have provided baseline data for soil and
water quality levels. During project preparation, the Project Preparation Unit will also develop a
project monitoring and evaluation plan with performance indicators using Annex 1 as the basis.
The PMU would annually monitor and evaluate project performance through conducting
beneficiary surveys.
D. Project Rationale
1. Project alternatives considered and reasons for rejection:
Alternatives considered were: (i) limit project activities to manure management in most
problematic areas along the Danube River; (ii) reduce nutrient run-off by promoting
environmentally-frie ndly farming practices in the main agricultural areas of Romania; (iii) work
primarily on wetland restoration along the lower Danube river; and (iv) link proposed project to
the Agricultural Support Services Project under preparation.
With regard to (i) it was concluded that simply targeting manure management would be
inadequate and ineffective in realizing the project objectives. Manure management should be part
of a more comprehensive package that involves a variety of measures to control nutrient run-off
to the Black Sea. Thus, to make a larger impact, the project has included other activities in
addition to the storage, application and disposal of manure, including, inter alia, crop rotation,
conservation tillage systems, riparian buffer strips, soil testing, application of fertilizers,
monitoring of water quality.
Options (ii) and (iii) were rejected in favor of a more comprehensive approach that would involve
a combination of environment-friendly agricultural practices as well as wetland managment in
one compact, high priority area along the Danube river. Thus, the project preparation team
selected Calarasi region, in the southern part of Romania, along the lower Danube which would
include the Boianu-Sticleanu polder for the following reasons: (i) poor agricultural practices,
including inappropriate management, storage and application of mineral fertilizers, pesticides,
manure and domestic waste; (ii) lack of septic tanks in most of the rural settlements; (iii) soil
erosion resulting from unsustainable land use; (iv) destruction of the former floodplain areas; and
(v) lack of waste water treatment plants for both small human settlements and intensive animal
production. Groundwater pollution with nitrogen and phosphorous from agricultural practices in
this region is high. In 1997, a general pollution of groundwater with nitrites, nitrates and
phosphates was observed in more than 30 % of investigated wells. Subsequent sampling of
drinking water wells indicate higher levels of contamination with nitrogen conpounds (79%) as
well as microbials (76%). All of these in excess of health standards. This had strong
ramifications on human health with 15 infants diagnosed and hospitalized in 1997 with acute
intoxication with nitrites. In some villages in the region, the Ministry of Health still maintains the
interdiction for children under 3 years old to drink water from the wells. Over the period 1995-
1999 the incidence of Acute Diarreheal Diseases has exceeded rates for the rest of the country.
The Boianu­Sticleanu polder was chosen as this formerly reclaimed floodplain, if rehabilitated,
could serve as a biological filtration mechanism that could result in significant nutrient load
reductions to the Black Sea.
As regards (iv), initially it was decided to tie the proposed project to the ASSP that
was under preparation at the time. The proposed project would ensure that the
research, extension and training undertaken under ASSP would promote the
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adoption of environment-friendly agricultural practices among new farmers.
However, this approach was rejected and it was decided to make the proposed
project self-standing. This would allow the project to have a more focused approach
in one selected area than ambitiously target the entire country. It would serve as a
pilot activity, a model that could be replicated in other similar sites of Romania.
Wherever possible, the proposed project will work together with ASSP.
2. Major related projects financed by the Bank and/or other development agencies
(completed, ongoing and planned).
Latest Supervision
Sector Issue
Project
(PSR) Ratings
(Bank-financed projects only)
Implementation
Development
Bank-financed:
Progress (IP)
Objective (DO)
Environmentally Sustainable
Romania :
Agricultural Practices, Protection of
Agricultural Support Services
the Black Sea/Biodiversity
Project (ASSP)
Biodiversity Conservation
Management Project
Cultural Heritage Project
S
S
Bulgaria :
Wetlands Restoration Project
Georgia :
Agricultural Research,
Extension and Training
(ARET) Project
Municipal Infrastructure
S
S
Rehabilitation--MIRP
National Environment Action
Plan (IDF/Bank)
Forestry Biodiversity Project
Other development agencies
USAID
Black Sea-Danube Project
(Hungary, Slovakia and
Romania)
IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory)
3. Lessons learned and reflected in proposed project design:
Key lessons learned from rural environmental and agricultural operations in the regions and
reflected in the Proposed Project include:
the early involvement of key stakeholders in project preparation, specifically including local
communities and influential decision makers, is essential in order to ensure ownership and
successful project implementation;
working directly with the beneficiaries is essential for developing ownership, which is a
precondition for the sustainability of an operation.
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environment-friendly agricultural activities should establish a link between the objectives of
environmental protection and tangible benefits for key stakeholders, specifically including
local communities;
the benefits and objectives of the project should be made known to key stakeholders, if not
through active participation, then through effective public awareness and outreach programs;
where consumptive use of natural resources is an issue, (e.g., grazing, hunting, fishing, and
use of agricultural land), resource users must be substantively involved in the design of
sustainable resource management systems, and effective monitoring and control mechanisms
need to be developed and applied;
decentralized responsibility for financial and project management (e.g., as in the Romania
Danube Delta Biodiversity Project) builds local ownership and sustainability of project
activities;
applied research and monitoring programs should be site-specific and targeted to provide
direct support for effective conservation management;
substantial capacity exists at the local and national levels, but counterpart training and
specialized support for project related activities such as procurement, disbursement,
supervision, financial management, etc., is a must; and
dissemination of information about the benefits of improved environmental management is
critical to the widespread adoption of new technologies and practices.
The project will incorporate these experiences and build on them specifically by: (i) addressing
the links between socio-economic issues and environment-friendly agricultural practices, (ii)
building both the local and national capacity for reduction of nutrient loads into the groundwater
and surface water including the Black Sea; and (iii) ensuring a participatory and transparent
approach to project preparation and implementation.
4. Indications of borrower and recipient commitment and ownership:
The Ministry of Waters, Forests and Environmental Protection (MWFEP) and the Ministry of
Agriculture and Food (MAF) have requested the World Bank assistance ­ both technical and
financial ­ in their efforts to promote the adoption of environment-friendly agricultural practices
by farmers in Romania and to restore part of the former floodplain areas along the lower Danube
River that will reduce further deterioration of the waters of the Black Sea. The Government,
through a letter signed jointly by the Ministers of Agriculture and Food and of Waters, Forests
and Environmental Protection, has requested GEF assistance for the Project. This is the first
instance when the Ministries of Waters, Forests and Environmental Protection as well as
Agriculture and Food have come together to jointly support project preparation and cooperate to
jointly implement the project. The project preparation team has received full support from both
ministries in project preparation.
In view of the importance of these issues an Inter-ministerial Working Group5 was established on
July, 8, 1999 under the leadership of MWFEP and MAF to (i) identify geographical distribution
of priority non-point sources of agricultural pollution and the underlying economic and social
5 Inter-ministerial Working Group is composed of representatives of MWFEP, MAF, ISPIF,
ICPA, ICIM, ICAS, NFA and University of Bucharest
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causes for these practices; (ii) establish criteria for selecting among the priority regions and
possible activities, areas and interventions that would address national and regional needs most
strategically and effectively; (iii) propose possible activities to reduce nutrients discharge from
agriculture in the selected region; and (iv) agree on institutional arrangements for project
implementation. The composition of the inter-ministerial working group is in Attachment 1, and
the criteria for selection of possible project areas and activities is in Attachment 2. The project
preparation team found excellent commitment and support for the project from the Ministry of
Waters, Forests and Environmental Protection, Ministry of Agriculture and Food, and Ministry of
Finance. As the project moves towards final preparation and implementation, a Project Steering
Committee will replace the Inter-ministerial Working Group.
5. Value added of Bank and Global support in this project:
The principal value added of GEF support for the Project comes from providing additional funds
to address transboundary water issues. Also, GEF funds will help reduce the barriers to farmers
adopting environment-friendly agr icultural practices and allow the Government to consider
scaling-up the program. Without GEF support to coordinate these activities, Romania might
undertake a series of small activities in different parts of the country to address the issues. It
would lack a mechanism to coordinate the financing, approaches and geographical targeting of
activities. In addition, the Project would lack sufficient resources to develop capacity national and
local capacity to promote and accelerate the program, to demonstrate the holistic approach to
controlling nutrient loads and to undertake a public outreach program. The GEF is thus
leveraging funds from donors and stimulating a program to coordinate activities, increase
coverage and generate a larger impact. In this regard, the EU, British Know How Fund, France,
and USAID have indicated their interest in directly assisting project preparation and/or supporting
the project through parallel investment activities.
The GEF has already added value by supporting the Poland ­ Rural Environmental Project and
the Georgia ­ Agricultural Research, Extension and Training (ARET) Project, in addition to the
Black Sea Environmental Program, Danube River Basin Environment Program and Danube
Pollution Reduction Program. Given their international scope, the GEF and the Bank can provide
funds to cover the incremental costs of replicating such activities within Romania and in other
countries in the Region. This is particularly important, as agricultural pollution and conversion of
the former floodplain areas into agricultural polders are major local and tranboundary problems in
most countries in the ECA region, particularly those in the Black Sea, Danube River and Baltic
Sea drainage basins. Some level of financial support from the public sector and the international
community will continue to be necessary, particularly in lower income countries, because these
activities address externalities, affect transboundary pollution and involve an element of public
good.
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E. Issues Requiring Special Attention
1. Economic
None
Economic evaluation methodology:
Incremental Cost
Under preparation
2. Financial
Summarize issues below
The total government financing during the project implementation period is estimated at US$2.1
million. This is approximately 1% of the combined annual budgets of MAF and MWFEP. Since
this contribution is spread over a five-year period, the annual strain on the government's
resources and thus the fiscal impact should be minimal.
Financial implications of the farm environmental improvements will be reviewed during project
implementation. Experience in other countries indicates that improved manure storage,
conservation tillage, crop rotations, and other similar practices, can generate positive financial
rates of return for the farmer from his or her share of investment. Financial rates of return to be
done during project preparation.
3. Technical
Summarize issues below
The project is technically justified on the basis of the urgent need to address growing threats to
the ground water quality in the Calarasi region of Romania as well as the Black Sea and the
absence of effective pollution control measures. The project seeks to mainstream environmental
considerations in agricultural practices, a comprehensive strategy that will have a far greater
impact in improving water and soil quality along the lower Danube and reducing nutrient loads
entering the Black Sea. This will have the added benefit of improving health and sanitation
conditions in the villages in the Calarasi region and parts of southeast Romania.
The project will establish a functioning model of best practice to reduce nutrient run-off from
agricultural practices and build national capacity to replicate this practice in other parts of
Romania. Skills will be acquired from international experience through a combination of study
tours, workshops, networking, training, establishing linkages among various relevant
institutions. Technical issues include buffer strip identification and species to be planted,
contour ploughing, crop rotations, manure and nutrient management, crop marketing and organic
farming. These will be identified during the project preparation phase. A land use suitability
map for the Boianu-Sticleanu Polder will be developed during project preparation identifying,
inter alia, lands to be planted with trees, the land suitable for retaining under arable farming and
lands to be returned to seasonal grazing. An integrated management plan for the polder would be
developed and supported during the project. Wherever possible, the project will cooperate with
the extension staff of the Agricultural Support Services Project. The project will also aim to
strengthen the legislative and regulatory framework to promote project activities and a public
awareness program will be developed to disseminate the benefits of environmentally sustainable
agricultural practices.
4. Institutional
Summarize issues below
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A Project Steering Committee will replace the current Inter-Ministerial Working Group. The
Steering Committee will be established by the two Ministers, MWFEP & MAF, and will consist
of seven members, one representative from each Ministry (MWFEP, MAF and MOF) and four to
be nominated by MWFEP and MAF. In order to strengthen the linkages with other projects
supported by the Bank, the Chairman of the Competitive Grant Scheme Board of the Agricultural
Support Service Project (ASSP) will be one of the members of the Steering Committee. The
committee will be responsible for providing project oversight advice and assistance in resolving
issues associated with project implementation. The Ministers of MWFEP and MAF will co-chair
the Steering Committee.
MWFEP has been designated by the Ministry of Finance as the line Ministry with overall
responsibility of project implementation. MWFEP would establish a Project Management Unit
(PMU), located at DGA­Calarasi to handle procurement, all financial matters relating to
disbursements, maintenance of project accounts and financial monitoring, the monitoring and
evaluation of all project activities, as well as co-ordination of implementation activities by the
different local and national agencies, including the field agencies of MAF and MWFEP. The
PMU has initially been established as a Project Preparation Unit.
5. Social
Summarize issues below
A baseline survey at the communa and village level has been conducted and is available. A
more detailed questionnaire has been developed which will be completed during project
preparation. Subsequently, such a survey will be undertaken annually to monitor progress of the
project.
The project site has 21 villages grouped in seven communas with a population of 25,700. The
average village population is 1,200 and there are just over 2.1 people per household ­ mainly
elderly. There are nearly 90 farming associations, out of which 59 are family associations, that
supply some inputs to their members. However, the bulk of farmers do not have access to such
services and farm work is carried out manually or with the help of a horse. Four state farms still
remain and these have some equipment. However, due to insufficient funds they cannot purchase
the necessary fertilizers, fuel and spares and are therefore currently working below capacity.
The land is divided into farms, fields and plots; the farm and plot numbers change every year
and farm residences are outside of fields, usually within villages. These are the areas for
residing, storing food for human consumption as well as animal feed, and for stabling animals ­
poultry, pigs, cattle, sheep, horses. The area is characterized by a high concentration of animals
within rural areas, very little knowledge of the practices for efficient storage, management and
application of plant nutrients and a very high concentration of domestic waste disposed near the
watercourses. In 1997, a general pollution of groundwater with nitrites, nitrates and biologicals
was observed in more than 30 % of investigated wells. This had a strong impact on human health
with 15 infants (under 6 months) diagnosed and hospitalized in 1997 with acute intoxication
with nitrites. The incidence of Acute Diarrheal Diseases exceed national levels. At the national
level, Governmental restructuring and reduction of subsidies are influencing socio-economic
conditions to a large degree, including real wage declines and unemployment. At the level of the
project demonstration site, key rural development issues are unsustainable use of resources,
unemployment, lack of knowledge and lack of access to credit to support environment-friendly
agricultural practices. Poor economic conditions and their implications for social welfare result
in a lack of interest in environmental protection on the part of stakeholders. The project will
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support economic opportunities for key stakeholders that are linked to the objectives of the
project.
6. Environmental
a. Environmental Issues:
Summarize issues below (distinguish between major issues and less important ones)
Major: None
The major environmental issue is reducing the amount of nutrients le aching into the groundwater
or flowing directly into the river systems and then into the Black Sea. The thrust of this project is
to decrease this flow through polder restoration, appropriate manure and solid waste management
and improved agricultural practices. The project cannot be successful without the full co-
operation of the farmers. Therefore, it has been designed and will be implemented in a
participatory manner so as to have the maximum environmental (and financial) impact on the
area. Hence, no major adverse environmental impacts are envisaged.
As part of component 1, the project will construct and install manure storage tanks. The
environmental concerns under this component may include leakage of the manure (if construction
is not according to specifications), inappropriate manure spreading and inadequate cleaning of the
manure storage tanks. To mitigate these environmental issues, the project will undertake
environmental assessments during preparation. Also, an environmental management plan will be
developed to ensure that activities undertaken under this component will be closely monitored
with regular inspections by the local environmental agency(ies). Farmers will be advised on
measures to address any adverse environmental impacts arising out of inappropriate manure
management.
All civil works that the project will support will be subject to review and approval by the local
environmental authorities.
Other:
Environmental Category: B
7. Participatory Approach
a. Primary beneficiaries and other affected groups:
In meetings with the preparation mission, stakeholders from the seven communas expressed their
full support for the project objectives and gave first priority to the introduction of waste
management systems at the village level. In addition, they were particularly interested in the
planting of wind breaks, in establishing buffer strips in degraded areas along water courses, as
well as in promoting better use of the livestock grazing areas. The mission found that there was
good awareness of the needs for developing more sustainable agriculture in the area, but a limited
knowledge of the techniques involved.
b. Other key stakeholders:
Participation in project pre-identification: The components of the proposed project were
identified as top priorities in both national and regional action plans and strategies which were
prepared in a participatory manner involving all institutions concerned with environment and
agriculture. Reduction of nutrient run-off in the Danube and Black Sea from agriculture was
identified as a priority action by the National Environmental Action Plan, the Strategy for
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Environmental Protection in Agriculture and both the Black Sea and Danube River Basin
Strategic Action Plans. Wetland restoration along the Danube River was identified as one of the
most effective ways to reduce nutrient loads into the Danube and Black Sea and the selected site,
Calarasi polder, is listed as high priority area both in the NEAP and in the Danube River
Pollution Reduction Program. In addition, the Inter-Ministerial Working Group, composed of
key national institutions concerned with mainstreaming environment into agriculture, identified
the proposed components as ones that would be most effective in addressing nutrient pollution of
the Danube and Black Sea. The Advanced Project Concept document was finalized in
collaboration with Government counterparts and various research institutions that are continuing
to actively pursue options for co-financing and establishing links between the proposed project
and related national and international initiatives.
Participation in project identification and preparation: Structured meetings will be organized in
the next stage by a trained facilitator to solicit the views of all relevant stakeholders on the
rationale and design of the Project based on experiences gained in the pre-appraisal of the GEF
Biodiversity Conservation Management Project and development of the vision for reform of the
forestry sector
c. Describe issue(s) involved not already discussed above:
Given that the land ownership in the Polder will not be resolved in the next six months, the
preparation mission raised the issue of how to ensure that the new owners/lessees will follow the
code of conduct that is agreed in the land management plan. The mission received assurances
from the Ministers, MWFEP and MAF, that, within the context of Romanian legislation,
whomsoever is responsible for the farming in the Polder would be obliged to follow the
guidelines of the environmental land management plan. The mission agreed to proceed with the
project preparation on this basis. However, the mission advised the Government that the Bank
would require that the leasing agreements contain provisions for lessees to follow the
environmental guidelines and an enforcement mechanism should be established. The mission was
assured that the MAF and MWFEP will jointly sign a side-letter reflecting this agreement.
F. Sustainability and Risks
1. Sustainability:
Institutional sustainability
The local government agencies and the communa councils led by elected Mayors,
are in full support of the project. The project preparation team will work closely
with the extension service (ANCA), which has only been recently established and
supported through the World Bank Agricultural Support Services Project (ASSP).
The project seeks to strengthen the policy and regulatory framework and build
capacity of national and local institutions, including the Ministry of Waters, Forests
and Environmental Protection and the Ministry of Agriculture and Food towards
project preparation and implementation. Also, the PMU will be located in the
Calarasi branch of the General Directorate for Agriculture (DGA) bringing project
management to the local level. Both the DGA and the Environmental Protection
Agency, which have strong institutional capacity and a proven track record at the
county level, will have lead responsibility for project implementation at the field
level and will thus ensure sustainability of the project.
Social sustainability
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Early involvement of key stakeholders in project preparation and implementation,
including policy makers, local public officials and community leaders, farmers, their
associations, NGOs, will ensure social sustainability of the project. The technology
provided will be responsive to the needs of the farmers and end-users. They will
help in identifying issues and possible measures to address them. Farmers will
participate in installing on-farm field trials and community waste containment
structures. This will give the farmers and beneficiaries a sense of ownership and
contribute to social sustainability. The Farmer's associations and individual
farmers have pledged their support and are looking forward to working with the
project staff.
The project has been designed as a pilot, small-scale project for demonstrating good
environmental practices that will act as a model and demonstration for adoption in other areas.
Under the EU Nitrate Directive, Romania has to identify vulnerable areas and to develop and
implement a Code of Good Agricultural Practices and Action Plans for each vulnerable area. The
activities to be implemented under the Project (which is seen as the first pilot project in Romania
to reduce the nutrient load) could be replicated at both local and national level. This replication
will be promoted by the series of on-farm trials and demonstrations in the project area, by the
training programs that will be conducted, including seminars and workshops at different levels,
by articles in professional journals, as well as by the public awareness program, and by the
involvement of NGOs and private sector in the village level activities. Furthermore, the project
has been designed as a model for a regional program to reduce nutrient loads in the Danube and
Black Sea. This is a priority that has been identified in both the Strategic Action Plan for the
Protection and Rehabilitation of the Black Sea and the Strategic Action Plan for Pollution
Reduction in the Danube River basin, supported with GEF assistance.
Financial Sustainability
The main focus of activities at the village and individual farm level is the introduction of
environment-friendly agricultural practices that maintain or increase farm profitability and
household revenues. Farmers will be contributing to-wards the installation and operating
expenses of the demonstrations and be involved in the planning and execution from the start. A
sense of ownership with cost sharing plus attention to positive impact on profitability will ensure
that farmer adoption of these practices will become self-sustaining. Practices to be tested would
include conservation tillage, crop rotation, nutrient management, pesticide management and agro-
forestry, among others. Thus the major thrust of activities at the local level is the development of
sustainable solutions. Moreover, with regard to the Boianu-Sticleanu Polder, the proposed
integrated land management plan would designate the land use suitability of the different areas
and a plan for their management on a sustainable basis. Finally, the assistance for capacity
building in policy and regulatory matters will enable MWFEP and MAF to establish a sound
basis for management of the various agro-ecological systems in Romania.
The Government has demonstrated consistent financial commitment to
implementing the ongoing GEF Danube Delta Biodiversity Project and the
Biodiversity Conservation Management Project. This project is a logical extension
of these initiatives. Additionally, the Governme nt is enthusiastic about this project,
because it is the first time that the MAF and MWFEP will be working together to
solve pressing environmental and agricultural problems. Government recognizes
that a holistic approach combining good agricultural practices, ecologically
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sustainable land use management of former floodplain areas and an appropriate
legal framework is the most efficient way to contribute to the reduction the nutrient
loads into the Danube River and Black Sea and have committed to contribute to the
incremental costs of the project, and to financially support replication of this model
in other areas of Romania after completion of the project. The project would also
benefit the farmers by promoting cost-saving yield-enhancing agricultural practices.
In addition, the promotion of organic farming has the potential to open new
markets for the local farmers.
2. Critical Risks (reflecting assumptions in the fourth column of Annex 1):
Risk
Risk Rating
Risk Minimization Measure
From Outputs to Objective
Increased pollution of the Danube River
N
National awareness public program
and Black Sea and failure of national and
targeted at key audience, including policy
local authorities to avert further damage.
makers.
Low/inadequate commitment from
N
Public awareness campaaign to mobilize
national and local governments and
support for improving water quality.
institutes.
Participatory approach in developing plans
and staff training.
Implementing agencies may be unable to
M
Project will provide training and career
attract and retain qua lified staff.
development benefits and work towards
establishing loyalty to this new
professional field.
Lack of fiscal resources may preclude
M
Project benefits will demonstrate efficacy
replication of project activities in other
and need for replication and garner
similar sites of Romania .
government support; Exploration of
possible donors.
From Components to Outputs
Farmers are less willing to accept
M
Careful validation of proposed
improved, environment-friendly
environment-friendly practices and staff
agricultural practic es.
and farmer training; on-location advice;
and advocacy of immediate and long-term
benefits of project activities. Public
awareness campaign to disseminate
information on the benefits and results of
environment-friendly agricultural practices.
New private sources of funding do not
N
Ensure donor participation in project
come forward.
design.
Overall Risk Rating
M
Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk)
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G. Project Preparation and Processing
1. Has a project preparation plan been agreed with the borrower?
Under preparation
2. Advice/consultation outside country department:
Within the Bank: ENV, ECSIN
Other development agencies: World Wildlife Fund, UNDP, PPC, Iowa State University,
Chesapeake Bay Foundation
3. Composition of Task Team (see Annex 2):
Jitendra Srivastava - Task Team Leader
Doina Rachita - Projects Officer
Adriana Dinu - Consultant
Meeta Sehgal - Project Analyst
Srish Kumar - Financial and Economic Analyst
Naushad Khan - Procurement
Keith Openshaw - Consultant
Mahesh Sharma - Environment Specialist
Dana Dobrescu - Consultant
Bogdan Constantinescu ­ Financial Management Specialist
Sharifa Kalala - Team Assistant
4. Quality Assurance Arrangements (see Annex 2):
John Hayward, Julia Bucknall (ECSSD); Manuel Marino (ECSIN); Mahesh Sharma
(GEF)
5. Management Decisions:
Issue
Action/Decision
Responsibility
PCD Review Meeting
Cleared for project preparation
Jitendra Srivastava, Task team
mission
Leader
Total Preparation Budget: US$421,000
PDF-B Grant : US$300,000
GEF Funds: US$121,000
Cost to Date: US$119,900
Further Review [Expected Date]
Jitendra P. Srivastava
Kevin M. Cleaver
Andrew N. Vorkink
Team Leader
Sector Manager/Director
Country Manager/Director
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Annex 1: Project Design Summary
ROMANIA: AGRICULTURAL POLLUTION CONTROL PROJECT
Key Performance
Hierarchy of Objectives
Indicators
Monitoring & Evaluation
Critical Assumptions
Sector-related CAS Goal: Sector Indicators:
Sector/ country reports:
(from Goal to Bank
Mission)
Protection
and Improvements in water
Agricultural statistics
Stable Macro-economic
enhancement of the quality
framework in light of EU
environment
membership and improved
agricultural practices
Assist
Romania
in Capacity to address
National reports
contributing to decreased
environmental degradation
poverty
implementing
the of the Black Sea.
National
Environment
Action Plan (NEAP)
Periodic EU assessments
Institutional strengthening
of the Ministry of Water,
Forests and Environment
Protection
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GEF Operational
Program
The Project's objective of
Increased awareness of
Regional Surveys
Government's ability to
reducing non point source
threats to water bodies
mobilize resources to
pollution is consistent with from trans-boundary non-
reduce threats to water
OP No. 8, Water body
point source pollutants.
bodies
based operational Program
which focuses mainly on
threatened water bodies
and the most important
trans-boundary threats to
their ecosystems. Project
goals are also consistent
with OP No. 9, Integrated
Land and Water Multiple
Focal Area
The ultimate goal is to
High percentage of
Regional Surveys
Sustained effort to raise the
reduce the discharge of
farmers, local and national
public awareness and
nutrients and other
governments aware of
demand for protection and
agricultural pollutants into
financial and
improvement to
the Danube River and Black environmental impacts of
environmental factors
Sea through integrated land adopting environment-
and water management.
friendly agricultural
practices
Global Objective:
Outcome / Impact
Project reports:
(from Objective to Goal)
Indicators:
To significantly increase
Increased area of adoption
Agricultural statistics
Project-developed
the prevalence of
of environment-friendly
interventions are replicated
environment-friendly
farm practices, and manure
on a wide scale.
agricultural practices
management at village
among farmers'
level.
associations, family farms
and other eligible farmers
in target project areas.
Output from each
Output Indicators:
Project reports:
(from Outputs to
component:
Objective)
1. Calarasi level
high level of participation
Quarterly reports
Technologies respond to
A well documented pilot
(all communas, all villages
farmer's needs.
completed and evaluated
and 65 % of individual
for replication
farmers) in target areas
where nutrient
management plans have
been developed
Packages developed for
high level of participation
Quarterly reports
New private sources of
manure management
(all communas, all villages
funding might not be
and 65 % of individual
forthcoming after the life
farmers) in target areas that
of the project.
have built manure storage
pits/tanks.
Restored acreage of
High level of restored
Supervision mission
Continued land use based
polders.
polder area.
reports
on plans developed. Other
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government programs do
not conflict with project
goals.
Good monitoring system
Better soil and water
Annual monitoring reports Farmers continue to
for water and soil quality
quality
from EPA and Calarasi
practice unsustainable
Department of Public
agricultural practices
Health
Increased awareness of
High level of public
Social assessment sample
Support from local and
ways to reduce non-point
awareness to:
surveys
national government
source agricultural
a) environment-friendly
continues for carrying out
pollution.
agricultural practices &
the components.
policy on non source
pollution; and
b) Economic & financial
impacts of adopting
environmentally
responsible practices.
2. National Level
Improved policy
Draft policy framework for Adopting the Policy
Continued support and
framework drafted for non- non-source pollution meets framework
enforcement of policy
source pollution control
EU criteria.
Increased Awareness and
Awareness of farmers
Demands from other local
Provide resources to
demand for replication in
outside project area about
governments for
monitor and regulate
other Judets
the potential to improve
replication of project
standards.
income while protecting
investments
the environment.
3. Regional Level:
Increased knowledge &
Awareness of farmers,
Visits of farmers, NGOs,
Farmers and leaders in
awareness of ways to
NGOs, and officials of
and officials of other
other countries become
reduce non-point source
other countries of the
countries in the region
interested in the topic to
pollution among regional
impact of the project to
allocate resources to
participants.
the Calarasi Judet
replicate
4. Project Management
Continued support from
Supervision Reports
Adequate availability of
Well managed project.
the project steering
necessary institutional
committee
support government
agencies.
Project Components /
Inputs: (budget for each
Project reports:
(from Components to
Sub-components:
component)
Outputs)
1. Calarasi Level
.
US$ 10.69 million
testing and demonstrating
US$ 2.51 million
Progress Reports
Project incentives are
environment-friendly
(quarterly)
sufficient to motivate
agricultural Practices
farmers to participate in
the project
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Matching grant for manure US$ 3.00 million
Progress Reports
Local government support
management practices
(quarterly)
the pilot initiative by
contributing resources.
Ecological restoration of
US$ 1.47 million
Progress Reports
Enforcement of land-use
the Boianu-Sticleanu
(quarterly)
plan
Polder.
Monitoring
US$ 0.45 million
EPA and Public Health
Implementing agencies
annual reports of soil and
may be unable to attract
water quality. Annual
and retain qualified staff
social assessment sample
survey
Public awareness and
US$ 0.23 million
Annual social assessment
Timely availability of
replication
sample survey
counterpart funds
Waste water treatment
US$ 3.03 million
EU Report
Approval of EU funding
Plant (PHARE 2000
parallel Financing)
2. National Level
US$ 1.18 million
Draft policy framework for US$ 0.98 million
Draft agriculture policy to
Continued support and will
non source pollution
include non source
for enforcing policy
pollution of water
Public awareness, and
US$ 0.20 million
Sample Survey
replication
3. Regional Level
US$ 0.15 million
Regional cooperation for
US$ 0.15 million
Progress Reports
Ability to interact with
replication
(quarterly)
each other for mutual
benefit.
4. Project Management,
US$ 0.75 million
Progress Reports
Ability to maintain staff,
Unit
(quarterly)
offices and support from
US$ 0.75 million
local governments and
communities
27

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29
ANNEX 3
Russian Federation
Rostov Nutrient Dishcharge &
Methane Reduction
DRAFT
Project Concept Document
29

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30
RUSSIAN FEDERATION
ROSTOV NUTRIENT DISCHARGE & METHANE REDUCTION GLOBAL
ENVIRONMENTAL FACILITY
Project Concept Document - (DRAFT)
Europe and Central Asia Region
ECSIN
Date: March 31, 2001
Team Leader: Kari Homanen
Country Director: Julian Schweitzer
Sector Manager: Walter Stottmann
Project ID: P071473
Sector(s): WS - Sewerage
Theme(s):
Focal Area: I - International Waters
Poverty Targeted Intervention: N
Project Financing Data
[ ] Loan [ ] Credit [X] Grant [ ] Guarantee [ ] Other:
Financing Plan: Source
Local
Foreign
Total
BENEFICIARY
20.00
0.00
20.0
0
GLOBAL ENVIRONMENT FACILITY
10.00
0.00
10.0
0
Total:
30.00
0.00
30.0
0
Borrower/Recipient: RUSSIA
Responsible agency:
Ministry Of the Natural Resources of Russian Federation
Address: 4/6 Bolshaya Gruzinskaya, 123812, GSP, Moscow, Russia
Contact Person: Amirkhanov
Tel: (095) 2547029
Fax: (095) 2548283 Email:
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Other Agency(ies):
Rostov Oblast Administration
Address: Rostov
Contact Person: Ivan Stanislavov, Deputy Governor
Tel: 8632-653202
Fax: 8632-653202 Email: rrfsp@aaanet.ru
Bolshaya Sadovaya 51, 344 000 Rostov, Russian Federation
Implementing Agency
Address: Rostov Vodokanal, Gorky Street 293, 344019 Rostov, Russian Federation
Contact Person: Boris Persidski, Director, and Sergei Shneider, PIU Director
Tel: 8632-652580, 8632-653202
Fax: 8632-518318 Email: rrfsp@aaanet.ru
Project implementation period: 2002-2004
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A. Project Development Objective
1. Project development objective: (see Annex 1)
(i) Sub-Project: Reduction of Nutrient Discharges
Objectives
The key objective of the proposed sub-project is to reduce the discharge of nutrients (nitrogen and
phosphorous) into the Don River and Azov Sea/Bla ck Sea through: (i) rehabilitation and
improvement of the wastewater treatment plant of the city of Rostov-on-Don (RVK WWTP); (ii)
configuration of sewage network to reduce untreated wastewater overflow into the Don Tributary
Temernik; (iii) policy reform and pilot activities to promote phasing out of phosphates and
polyphosphate discharges into the Don River watershed; and (iv) replication of a comprehensive
nutrient reduction approach in other parts of Russia and riparian countries of the Black/Azov Sea.
(ii) Sub-Project: Reduction of Methane Emission
Objectives
The key objective of the proposed sub-project is to reduce the greenhouse gas (GHG) emissions
from RVK WWTP through (i) rehabilitation and extension of sludge digesters; (ii) capture and
combustion of methane gas; (iii) electric generation displacement; (iv) heat generation
displacement; (v) completion of the full chain of the sludge treatment process and final disposal;
and (vi) promotion of replication of methane emissions reduction in municipal wastewater
utilities in other parts of Russia and CIS countries.
(iii) Global Objectives
In a period of only three decades (1960's-1980's), the Azov/Black Sea basin has suffered the
serious degradation of a major part of its natural resources. Water resources of the basin are
facing particularly acute problems generated as a result of pollution from nutrients, organic
material, oil products and solid wastes. The Strategic Environmental Action Plan for Greater
Rostov (GRESAP) names the RVK municipal wastewater facility as the principal source of
pollution of the Don River and particularly as an emitter of phosphorus and nitrogen substances
that are responsible for the stimulation of aquatic plants and for contributing to eutrophication of
the Don River and Azov/Black Sea. Estimates show that the city of Rostov-on-Don discharges
annually about 2,000 tons of nitrogen measured as Total Kjeldahl Nitrogen (TKN) and about 200
tons of phosphorus into the Don river, which constitutes about 10% of the overall nutrient Don
river flux into the watershed of Azov/Black Sea. Also, due to inadequate network capacity and
its insufficient configuration, 20-30,000 thousand m3/day of municipal wastewater is being
discharged untreated into the Don's River tributary Temernik, few kilometers upstream from its
confluence with the Don. The estimated amount of nutrient load reduction into the Don (and thus
into Azov/Black Sea) is about 1000 tons of nitrogen and about 100 tons of phosphorus per year
corresponding to a reduction of about 27,000 tons of nutrients over the project life.
The existing sludge handling technology results in substantial (estimated at 24,000 m3/day)
emissions of GHG, particularly methane, from the WWTP facilities (GHP of methane is 21 times
the GHP of carbon dioxide). Low environmental fines for the methane discharges ($0.09 per
1000 m3) do not give a proper incentive for the methane collection. Released methane can be
collected and utilized for power generation for the WWTP needs, thus substantially reducing the
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GHG release. The estimated reduction of GHG emissions will be about 771,000 tons of carbon
equivalent over the project life.
2. Key performance indicators: (see Annex 1)
The implementing agency will prepare a set of monitoring (physical/technical) and performance
indicators (operational, financial and environmental), including the key indicators that will be
monitored and reported upon on timely basis in the context of project management reports
(PMRs). The list of monitoring indicators, acceptable to the Bank, has to be submitted to the
Bank by Rostov-on-Don Municipal Unitary Water and Wastewater Utility (Rostov Vodokanal,
RVK) at the appraisal stage for review and the final list at negotiations. The indicators are
expected to include at least the following:
·
Annual discharges of nutrients (P and N);
·
Annual methane utilization at WWTP; and
·
Improvements in service delivery, operational and financial efficiency primarily
in: (i) financial targets, particularly the increases in revenue collection and cash
collection; (ii) wastewater effluent quality; (iii) operational improvement; and
(iv) energy savings also expressed in terms of CO2 reductions.
RVK, municipality and Rostov Oblast authorities have agreed comply with the same procedures
and conditions as those agreed for the Russia Municipal Water and Wastewater Project of the
World Bank approved in December 2000. Those include inter alia a RVK direct contribution of
10% of the GEF grant amount to the project investment fund, and payment of all taxes and duties
related to the project.
B. Strategic Context
1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see
Annex 1)
Document number: 19897
Date of latest CAS discussion: 02/06/2001
Protecting and enhancing the environment is one of the nine main development challenges
identified in the Russian Federation CAS. The latest CAS appraises the situation in the Russian
Environment and Natural Resource Management as follows:
"42. Its tough, pro-environment laws and regulations notwithstanding, decades of
inefficient development have left Russia with a costly legacy of environmental damage.
Based on relative threat to human health (which is a reasonable proxy for losses to the
economy) or direct linkages to losses of productivity to the Russian economy as the principal
criteria, the most critical environmental problems facing Russia today are:
(i) air pollution in urban areas caused by heating, power generation,
transportation and industry;
(ii) progressive deterioration of drinking water quality due to inadequate
maintenance of water supply systems and the pollution of water resources;
(iii) an increasing risk of environmental accidents and emergencies, caused by
decaying public, industrial and transportation infrastructure and massive
accumulation of hazardous industrial waste and radioactive materials in "hot
spots" of high concentration of industry and population; and
(iv) widespread degradation of land, fisheries, and forests.
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34
43. Pollution has declined since 1990 because of declining output, but by less than the
decline in output. Pollution intensity and energy intensity have both increased over the
period. Fragmentary data suggest that the incidence of the costs associated with these
environmental/resource management problems falls heavily on the poor. Russia, as a rich
repository of biodiversity, as the worldwide third largest emitter of greenhouse gases with a
significant potential for greenhouse gas reductions through energy efficiency, the use of
renewable energies and carbon sinks, and as a nuclear power, is also a critical partner in
international efforts to address priority global environmental issues."
Accordingly the CAS outlines Bank Group Strategic Priorities as follows:
"68. Environment and Natural Resources. Bank Group support will emphasize interventions
that address the priority domestic and global problems outlined in paragraphs 42-43. Within
these areas, priority will be given to activities that leverage limited Bank resources. An
Environmental Strategy Note is under preparation and will be discussed with the Government
and other donors, which will be used as a basis for the development of the next phase of our
program.
The ECSSD country team elaborated an Environmental Strategy Note in January 2000. This note
clarified also global environmental pressures in Russia: "Given the size and ecological diversity
of the country, priorities differ from region to region. In addition to these local and national
environmental issues, Russia has to deal with trans-boundary (primarily international waters, such
as the Caspian and Black Sea) and global environmental problems (primarily ozone depletion and
climate change)". The note specifies as one of the key objectives to help Russia contribute to the
global environment agenda while improving national-level environment conditions through
control of greenhouse gas emissions and through pollution reduction to international waters.
Consistent with the CAS and the Russia Environmental Strategy Note, the proposed project
addresses critical climate change, wastewater treatment and water pollution problems. Globally,
Russian Federation is the third largest emitter of greenhouse gases and a critical partner in
international efforts to address global environmental issues, and Rostov Oblast is one of the
largest dischargers of nutrients responsible for eutrophication of the Don River and Azov/Black
Sea watersheds. Thus, the project by capturing methane for heat and power generation, and by
reducing nutrient discharges into international waters will efficiently reduce global environmental
pressures and will complement local efforts of the Rostov Oblast Administration to improve the
environmental conditions in the region.
1a. Global Operational strategy/Program objective addressed by the project:
By improving wastewater treatment schemes through an integrated investment program and
changes in consumer practices, the project would complement the regional Don River pollution
reduction program and assist the Government in meeting its international obligations under the
Bucharest Convention and the Odessa Ministerial Declaration on the Protection of the Black Sea.
The improvement of wastewater sludge operations and reduction and utilization of the methane
gas emissions from the RVK wastewater treatment plant will assist the Government in the
implementation of both Russian Federal Energy and Environmental Programs and the Russian
Federation 1st and 2nd National Communications to UNFCCC (1994, 1998).
The project will demonstrate effective mechanisms for rehabilitation of wastewater schemes to
reduce the nutrient loads into the Don River and Azov/Black Sea, and methane emissions from
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35
the wastewater operations, and will facilitate replication of this comprehensive approach in other
parts of Russia and in neighboring CIS countries.
2. Main sector issues and Government strategy:
Background
Today, most critical environmental problems in Russia relate to air pollution in urban areas
caused by heat and power generation, transportation and industry; progressive deterioration of
drinking water quality, due to inadequate maintenance of water supply and wastewater treatment
systems and pollution of water resources; and increasing risk of environmental accidents caused
by decaying public infrastructure.
A Water Sector Study prepared jointly by the Government and the Bank in 1996 points out that
the past system of central command and control and the state subsidy policies are responsible for
the disincentives and distortions which prohibit efficient sector management and development.
These reasons resulted in: (i) poor state of repair of facilities; (ii) inefficient operations; (iii) lack
of incentives for water conservation; (iv) lack of financial viability; (v) institutional and
regulatory weakness; and (vi) lack of an adequate information of Vodokanal's operations.
Moreover, the sector study proposes the initiation of a comprehensive program of sector reforms.
The Government as part of its overall program of reform of the communal services sector has
formally endorsed the reform principles for the municipal sector. These reform principles include
the following elements: (i) transformation of present Vodokanals into independent "corporatized"
utilities regulated by local government; (ii) gradually turning Vodokanals into financially self-
sufficient institutions through tariff reform and better collection; (iii) reformation of the
investment policies by introducing least-cost strategies giving preference to plant and network
rehabilitation and efficiency enhancements; and (iv) bringing in the consumers as a participating
party in the Vodokanal decision making.
The main sector issues relevant to this Rostov Vodokanal (RVK) project are:
Russia carried out major environmental polic y reforms to accompany the transition to market
economy. However, given the historical development of Russian economy, it still remains very
pollution and resource intensive, and decades of insufficient development have left Russia with a
costly legacy of past environmental damage. Thus, the challenges to reach an environmentally
sustainable economic growth remain to be solved. In a number of industrial regions of the
Russian Federation, like Rostov, anthropogenic pollution loads have exceeded the established
norms long ago. This has induced significant changes in the landscape, loss of natural resources,
and worsening in the living conditions of the population.
Despite sharp reductions in CO2 emissions, Russia remains the world's third largest emitter of
CO2 after the USA and China. According to the First National Communication to UNFCCC
(1995), the policy and measures aimed to reduce greenhouse gases emissions and to improve
quality of their sinks are under development in the Russian Federation. The general attention in
anthropogenic GHG sinks is devoted to practical measures aimed at control and to limit
countrywide technogenic GHG emissions of energy sector in all branches of the economy,
including municipal sector. Methane emissions from RVK wastewater treatment plant are a
significant GHG emission source.
The physical condition of the RVK facilities is rapidly reaching the status where risk of
environmental accidents will catastrophically increase; this is especially valid for the wastewater
treatment facility that is currently, the principal source of pollution of the Don River. According
to the Federal Report on the Status of the Environment in the Russian Federation 1999, only 6
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percent of wastewaters discharged to the Don River were treated in compliance with existing
norms. In addition, the existing wastewater treatment capacity was only 47 percent of the actual
amount of wastewaters discharged (3.5 billion cubic meters). Correspondingly, the water quality
of Don River near Rostov-on-Don has remained nearly unchanged for several years, and the
concentration of main pollutants exceed 2-3 times the actual compliance limits. On several
occasions (1990-1998), poor drinking water quality, especially during summer season, has caused
water related diseases like cholera in regions near Rostov.
Government's Strategic Response
The Government of the Russian Federation has responded to the environmental pressures caused
by sector issues stated above, by elaborating and adopting: Russian National Environmental
Action Plan (NEAP) for 1999-2001; National Action Plan for Environmental Hygiene of the
Russian Federation for 1999-2002; 1st and 2nd National Communication to UNFCCC; Basic
Trends in Social And Economic Policy of the Government of the Russian Federation over the
Long Term (issued June 2000); and Russian Energy Strategy 2020. Moreover, Russia has already
ratified the Convention on the Protection of the Black Sea Against Pollution in 1993.
The Russian National Environmental Action Plan (NEAP) for 1999-2001 was considered by the
Government in November of 1998, and was recommended to the executive bodies for practical
use in environmental protection activities. In addition, the recently adopted new long-term
economic development program and a new energy strategy until 2020, clearly recognize the need
to reduce environmental load from economic activities, and to increase the use of non-traditional,
renewable sources of energy like biomass and biogas. On regional level, Greater Rostov
Environmental Strategic Action Plan (GRESAP) was adopted by the local administration in 1998.
Russian National Environmental Action Plan (NEAP) for 1999-2001
Implementation of drinking water quality and water pollution abatement measures has second
highest priority on the national environmental agenda after air pollution abatement. The plan
foresees implementation of measures to decrease polluted wastewater discharges into water
bodies, and stresses the importance to ensure compliance of drinking water quality with hygienic
norms. Thus NEAP proposes that all regional environmental actions plans (REAPs) will in the
future include water bodies' protection section. The Russian NEAP also supports the
implementation of projects directed to reduction of GHG, and specifically methane collection.
National Action Plan for Environmental Hygiene of the Russian Federation for 1999-2002
proposes to: (i) adopt a Federal Law on Drinking Water and Drinking Water Supply; (ii) adopt a
Federal Program on Drinking Water Supply for the Russian Population; (iii) elaborate Hygienic
Norms and Guidelines for the Protection of Ground Waters; (iv) update guidelines on recreational
water usage; (v) introduce economically viable tariffs for drinking water supply; and (vi) enhance
the methodologies to evaluate public health risks related with low quality drinking water supply.
1st and 2nd National Communication to UNFCCC
Development of Renewable Energy Resources including utilization of methane emissions from
wastewater treatment plants for power generation and district heating occupies a significant place
in the 2nd National Communication to UNFCCC. The State Interagency Commission of the
Russian Federation on Climate Change Problems was established in 1994. Recently, good
progress has been made in actions to completely phase-out ozone depleting substances.
However, the actual implementation of needed policy measures and investment projects to boost
significant rise in non-traditional energy resources utilization, including methane biogas, has
progressed slowly. Currently, projects and programs on limiting of the methane emissions to the
atmosphere are at the stage of development and pilot implementation. In addition, Russia's vast
GHG reduction potential offers tremendous opportunity to generate substantial revenues, and to
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attract investment flows for environmentally sustainable and energy efficient projects also in the
municipal water sector.
Basic Trends in Social And Economic Policy of the Government of the Russian Federation
over the Long Term outline the long term overall policy goals as well as short term priority
objectives and urgent measures for social and economic development of the country. According
to this program, Russia will continue to use its abundant natural resource assets as a basis for
future economic development.
·
The economic policy part of the report states that it is advisable to include in regional
taxes, payments for use of timber and water resources, and other environmental
payments.
·
The transport sector development would include (part 3.4.3. Development of the
Commercial Fleet and Transport Aviation) expansion of the use of inland waterways,
deltas and freshwater ports for passenger transportation, import-export and transit freight.
Especially, for Azov and Black Seas, this means increased water bodies environmental
loads and risks from port infrastructure development projects in the port of Novorossiysk
(container terminal in the southeastern part of the port, the Sheskharis deep water oil
terminal for the shipment of oil in large-tonnage tankers, complex for the export of
mineral fertilizers), and in the port of Tuapse (universal wharf for transshipment of
metals, oil-loading terminal for tankers with capacities of 100,000 tons for export of oil
and petroleum pr oducts).
·
Additional pressures to reduce waste water loads in Don River come from the
development of the Volga-Don canal to access by way of the Black Sea to Southeastern
Europe, and on to the center of the continent by way of the Danube. The long term pla n
development scenario forecasts that the creation of the Volga-Don-Danube water
corridor, according to preliminary estimates, will provide Russia with transit revenues in
the amount of $1 billion. However, the plan recognizes the need to review the possibility
of establishing direct, non-transfer technologies and verifying the possibility of using
hybrid-navigation vessels in these waterway
·
As for pricing policy, the plan explicitly states that any practice of cross subsidizing must
cease after the comple tion of the reform within the residential public utilities system in
2003.
Russian Energy Strategy 2020
Both the National Communication and the Russian Energy Strategy 2020 target increased share
of renewable energy resources in energy production as one of the priorities.
3. Sector issues to be addressed by the project and strategic choices:
The principal sector issues addressed by the Project are those of (i) environmental sustainability;
(ii) improved financial management system and cost-recovery of the water/wastewater
operations; (iii) improved operational efficiency; (iv) improved energy efficiency of operations;
and (v) developed project implementation and management capacities at RVK, thus supporting
the development of the overall environmental strategy for the Azov/Black Sea region.
The main strategic choices for the project include:
·
Focus on wastewater operations - as the most part of the investment in the water
sector are already being included into Community and Social Infrastructure Project
investment program;
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·
Consider comprehensive approach on wastewater management operations from
wastewater collection to the wastewater sludge utilization and WWTP effluent
discharge;
·
WWTP rehabilitation and modernization, and implementation of new technologies
for nutrient discharges and methane emission reduction;
·
Increase of the RVK ownership and participation in the investment projects;
·
Cost reduction programs and energy saving targets for wastewater treatment
reconfiguration program; and
·
Discipline in financial management to improve the financial position of RVK.
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C. Project Description Summary
1. Project components (see Annex 1):
Indicativ
Bank
GEF
% of
Component
e
% of
Financing
Financing
GEF
Costs
Total
(US$M)
(US$M)
Financing
(US$M)
1.1 Sewage Network
6.58
26.8
6.40
0.00
0.0
Reconfiguration
1.2 Construction of the
4.48
18.2
4.48
0.00
0.0
High Pressure Pumping
Station
2.1 Rehabilitation of the
7.50
30.5
0.00
5.50
52.4
Wastewater Treatment
2.2 Rehabilitation of
2.00
8.1
0.00
1.80
17.1
Digesters
2.3 Construction of Gas-
0.50
2.0
0.00
0.40
3.8
Holders
2.4 Construction of the
2.00
8.1
0.00
1.80
17.1
Methane Power Generation
Plant
3.1 Project Management
0.76
3.1
0.46
0.30
2.9
and Monitoring
3.2 Technical Assistance
0.40
1.6
0.00
0.40
3.8
for Replication
3.3 Policy Reform
0.35
1.4
0.00
0.30
2.9
Programs
Total Project Costs
24.57
100.0
11.34
10.50
100.0
Total Financing Required
24.57
100.0
11.34
10.50
100.0
RVK will contribute 10% of project base cost (CSIP funds not included) and pay all
taxes and duties.
Project Components (see Annex 1):
(i)
Sub-Project: Reduction of Nutrient Discharges
1.1
Sewage Network Reconfiguration ($8.0 million). The component will finance
the completion of the underground tunnel from sewerage pumping station (SPS)
Severnaya-1 to the existing siphon. The length of the proposed tunnel will be 6.6 km of
which 1.0 km has already been built with municipal funds. The proposed solution will
result in conversion to the gravity flow of the main part of the sewerage network and
closure of 15 wastewater-pumping stations, and will result in energy and labor cost
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savings. It will also reduce direct overflows reducing organic and nutrient substances
into the Temernik and Don rivers. This component will be funded by CSIP Loan and
co-financed with municipal funds and is directly connected to the next component.
1.2
Construction of a High-Pressure Pumping Station ($5.6 million).
This
component will finance the construction of the high-pressure pumping station at WWTP
to pump wastewater directly to the processing units. This will be funded by CSIP loan
funds and co-financed by Rostov Oblast Administration and Rostov-on-Don
municipality.
1.3
Rehabilitation and Improvement of the Wastewater Treatment ($7.5
million). This component will finance the rehabilitation of the treatment facilities and
the implementation of new technology for phosphorus and nitrogen removal. The
rehabilitation will include the reconstruction of primary treatment units, aeration tanks,
reconstruction of secondary sedimentation units, and reconfiguration of the treatment
process. For nitrogen removal, reconfiguration of the secondary treatment process will
be implemented (using combined carbon oxidation nitrification-denitrification process).
Second, the nitrates are converted to nitrogen gas (denitrification). Phosphorus removal
will be carried out either by biological methods or chemical precipitation. This
component proposed to be funded through the GEF grant with co-financing from Rostov
Oblast and municipal authorities and RVK.
(ii)
Sub-Project: Reduction of Methane Emission
2.1
Rehabilitation of old methane digesters and construction of new digesters
(US$2.3 million). This component will finance the rehabilitation of the methane
digesters and construction of new ones. This will facilitate the treatment of all generated
sludge and capture most of the methane previously discharged into atmosphere.
Necessary corrections between WWTP and digesters will also be constructed. The
rehabilitation of methane digesters will include the reconstruction of four existing
digesters with total capacity of 16,000 m3 and construction of several new ones. At the
engineering stage, it is necessary to analyze several options of the technology for sludge
processing. The preference will be given to the simplest and most cost-efficient one.
This component is proposed to be funded through the GEF grant and co-financed by
Rostov Oblast Administration, and Rostov municipality (civil works) and CSIP
(dewatering unit lines $100,000).
2.2
Construction of two gasholders for 3,000 m3 each for maintaining the
pressure in the gas combustion system (US$0.5 million). This component will finance
the construction of two 3,000-m3 gasholders to maintain the pressure in the combustion
system. This component is proposed to be funded by GEF grant and co-financed by
Rostov Oblast Administration and Rostov municipality (civil works).
2.3
Construction of the methane power generation plant, installation of the gas
turbines and the heat utilization equipment (US$2.0 million). This component will
finance the power generation plant that will use the methane. Two power generation
turbines of 930 kW each will produce the electric power that will replace the grid
currently imported by WWTP from Rostov Combined Heat/Power Generation Station.
The heat will be used for the technology needs at WWTP and will replace some
currently produced by WWTP boiler. This component is proposed to be funded by GE F.
The municipality will co-finance civil works.
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2.4
Rehabilitation of the existing process lines and connection with the existing
WWTP technological facilities (primary and secondary settlers, and sludge
dewatering process), set-up and testing (US$800,000). This component will finance
the rehabilitation of sludge lines between digesters and other parts of WWTP. This
component is proposed to be funded by GEF and partially by CSIP (connection lines
from digesters to dewatering unit, about $100,000).
Project Management and Technical Assistance
3.1
Project Management and Monitoring (US$760,000). The project management
and monitoring will be conducted by the existing personnel of RVK with the help from
the Rostov Bureau for the CSIP implementation (PIU) in coordination with the PIU of
EMP. These units both have extensive experience in implementation of the World Bank
projects and the Rostov Bureau has a number of professionals that manage the CSIP
water and sanitation project component, including pre-design and procurement. Project
supervision monitoring will include procurement, supervision of construction, economic
and financial assessment of RVK, and environmental monitoring. About one-third of
this component (three staff persons per year, or US$300,000) is proposed to be funded
by GEF.
3.2
TA for Replication (US$400,000). The sub-project will fund the replication of
the project findings in the Azov/Black Sea region. Specifically it is related to the cities
of Odessa, Zaporizhye, Yalta and Mykolayiv (Ukraine), Constanta (Romania), Varna
and Burgas (Bulgaria), Poti and Batumi (Georgia), Sochi and Novorossiisk (Russian
Federation). This component is proposed to be funded by GEF.
3.3
Policy Reform Programs ($350,000)
(i)
Discontinue Phosphates and Polyphosphate Discharges into the Don River
Watershed. As a first step, the possibility of phasing-out domestic use of
polyphosphate detergents and substitute them with non-phosphorous ones in
Rostov will be studied. If found feasible, the other towns in Rostov Oblast
located in Azov Sea watershed will follow this approach. This could
significantly reduce the phosphates load to wastewater. The program will also
include a public awareness campaign to increase the understanding of the
proposed environmentally sound restrictions. This component is proposed to be
funded by GEF.
(ii)
Proper Wastewater Collection from Low-Rise Housing. Rostov municipality
will conduct a joint study with RVK on reasons and solutions to discontinue illegal
wastewater discharges from low-rise domestic housing into storm water sewer systems.
The study will propose institutional and/or legal changes for the wastewater
management from small private housing with the special attention to poverty issues.
This will help RVK to reduce maintenance problems of sewer system and to collect
more revenues for wastewater treatment. This component is proposed to be funded by
GEF.
2. Key policy and institutional reforms to be sought:
The project would contribute in the following areas:
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(a) Formulation of an environmentally friendly and financially feasible alternative for the
existing wastewater and sludge management scheme;
(b) Formulation of a program to phase out phosphorous from household detergents and to
introduce affordable septage collection and management system;
(c) Institutional, financial and management strengthening of RVK with an aim to gradually
achieving full cost recovery of the operation and investment costs;
3. Benefits and target population:
Benefits: (a) Health benefits: discontinue of the untreated wastewater discharges will improve
the quality of the raw water for the downstream municipalities; (b) Economic benefits: reduction
of nutrient discharges (by 60% with phosphorus and by 50% with nitrogen) will reduce the
Azov/Black Sea eutrofication and improve its recreational value and potential for the retrieval of
its fish stock; and (c) Urban Development: improvement of the sewerage services for the
western part of the city will support the economic development and increase the property value.
Target Population: Rostov-on-Don population will have improved wastewater services. The
western part of the city will get additional resource for the development and expansion. The
closure of the sewer overflow will improve the recreation possibilities in the city center and will
help to clean up the historical part of the Temernik River. The project will improve the quality of
drinking water for the 100,000 of people living downstream on the River Don.
4. Institutional and implementation arrangements:
Implementation period: 2002-2005
Executing agencies: Rostov-on-Don Municipal Unitary Water and Wastewater Company
(Rostov Vodokanal-RVK).
The Ministry of Finance (MOF), and the Ministry of Natural Resources will be responsible for
the overall direction and strategic oversight of the Project. Overall management and supervision
of the project will be the responsibility of both the Rostov Oblast Administration and Rostov-na-
Donu municipality.
Day-to-day implementation and administration of the project will be executed on behalf of the
Rostov Oblast Administration by the RVK itself. RVK will be responsible for all aspects of
project administration, management and coordination, including project-related financial
management, accounting, pr ocurement, disbursement, engagement of outside auditors and
preparation of appropriate auditing reports and their dissemination, and preparation of progress
reports and annual reports with respect to the Project. RVK will conclude contracts with the
existing Bank PIUs for the preparation of the necessary documents and reports. During project
implementation, RVK will maintain a department, which would be appropriately staffed by
personnel with qualifications, and under terms of reference satisfactory to the Bank, to lead and
supervise the implementation of the Project. RVK has already appointed the Project
Coordinator.
The implementation specifics, including reporting, audit, financial management and accounting,
and monitoring and evaluation arrangements will be determined later.
D. Project Rationale
1. Project alternatives considered and reasons for rejection:
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The fundamental rationale for the Project is to combine investments that provide local benefits
with grant that will combine it with substantial global benefits.
The selection of Rostov can be justified because:
·
The city/region is among the cities in Russia with serious environmental problems
(ambient air, drinking water), deteriorating public health and damaged ecosystems and is
determined as a hot spot for the Azov/Black Sea Strategic Action Plan;
·
Has a mix of air pollution problems which are typical for Russian municipalities;
·
Offers a possibility to mainstream environment in cross-sector agendas (environment,
energy, urban, transport);
·
Presents a window of opportunity to make economic growth environmentally sustainable;
·
Has a high innovation and replication/dissemination potential;
·
Has strong support from the regional government, adequate local capacity and good
institutional cooperation;
· Has experience in implementing and preparing World Bank projects. Is a logical
extension of on-going operations in line with ECSSD, ECSHD and Russian
environmental strategy; those projects offer additional synergies in addressing
multi-sector issues.
Development of the different project components (nutrient removal, methane reduction) by
the separate programs would be inefficient. The beneficiary and the implementing agency of
the project is Rostov Vodokanal.
Local short-term solutions vs. comprehensive wastewater management approach:
construction of the local wastewater treatment facility to prevent the untreated wastewater
discharges is very costly and inefficient, and most of such solution will not resolve the main
problems of the project such as nutrients discharges and methane emission reduction.
2. Major related projects financed by the Bank and/or other development agencies
(completed, ongoing and planned).
Latest Supervision
Sector Issue
Project
(PSR) Ratings
(Bank -financed projects
only)
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44
Implementati Development
Bank -financed
on Progress
Objective
(IP)
(DO)
Water and Wastewater
Russian Federation: Municipal
S
S
Water and Wastewater Project
Water and Wastewater
Russian Federation
S
S
Community Social
Infrastructure Project
Water Supply
Azerbaijan: Baku Water
S
S
Supply
Water Supply and Sanitation
Atyrau Water Supply and
S
S
Sewerage Project
Waste Heat Utilization
Czech Republic: Kijov Waste
S
S
Heat Utilization Project
Other development agencie s
IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly
Unsatisfactory)
3. Lessons learned and reflected in proposed project design:
One of the main lessons in Bank's water sector operations worldwide is that poor quality at entry
may result in unrealistic expectations, disbursement delays, and projects may fall short of meeting
development targets. Through generous donor support the project preparations include detailed
economic, technical, environmental and social studies which all aim at designing a project which
is supported by all stakeholders and public at large. In addition, this support also covers funds for
designs and at the time the project t is expected to be approved all design and tender documents
would be ready for implementation.
The GEF project will be coherent and consistent with the other projects that are being
implemented with the Bank in the water sector in Russia. Accordingly, the Grant conditions for
RVK (payment collection, proper operation and maintenance) would be similar to those set for
Vodokanals, participating in the MWWP. Implementation of the first steps (adequate tariff levels,
cash collection ratios and cost recovery levels) is needed prior to project implementation. Those
are required to demonstrate the commitment of RVK, municipality and Oblast Administration to
the project objectives.
The project would inevitably result in increase of the operation costs. RVK needs to take actions
to reduce costs, improve finances and adjust the tariffs. The support from the Oblast
Administration for this work is critically needed for the project success.
The implementation of the new wastewater technology requires careful design and evaluation to
ensure least cost solutio ns. Foreign consultants will be engaged for both the sub-projects to assist
in the project design due to the shortage of local expertise.
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4. Indications of borrower and recipient commitment and ownership:
The Federal government and the regional government of Rostov Oblast have indicated their
strong commitment to the necessary reforms during the first steps of project preparation. The
Federal Ministry of Natural Resources has issued an endorsement letter for the project. The
Rostov municipality and RVK have shown their interest and commitment to the project, and are
willing to improve water and wastewater services quickly and cost-effectively. The RVK is
working with consultants in the preparation of all the necessary studies and the Oblast
government has assigned project coordinator to facilitate all preparation activities. PIU agreement
for the project coordination has been achieved, and RVK has appointed a Project coordinator.
The GEF approved the PDF Block B grant for the project preparation in response to the request
of the Federal Government.
5. Value added of Bank and Global support in this project:
The Bank supported the government strategy in the development of the environment protection
and social services, including water and wastewater services through a combination of policy
support, technical assistance and lending operations. The Project is in line with the objectives of
the following projects:
·
Community Social Infrastructure Project (CSIP, Loan 4009-RU);
·
Environment Management Project (EMP, Loan 38060-RU); and
·
Municipal Water and Wastewater Project (MWWP, Loan 08832-RU).
MWWP seeks to support the most critical and immediate investments needed to improve the
operation of the water and wastewater systems, while achieving improvement of system
operations, reduction of operational costs, improvement of service quality; and implement of set
of reforms aimed at improving physical system operations and financial performance of
vodokanals The proposed project will support the develo pment and sustainability of RVK. CSIP,
among other components, finances the water supply and wastewater rehabilitation in the city of
Rostov-on-Don. The water supply and wastewater component is focusing on the rehabilitation
and renewal of the existing infrastructure. One of the central objectives of the CSIP is to sustain
and restore basic water/wastewater services, and to improve the technical and economic
efficiency of the water utilities in Rostov Oblast. EMP implements the Integrated Environmental
Strategy and Action Plan for Greater Rostov (GRESAP), developed with the financing from GEF.
It has identified priority environmental investments, and provides TA for the environmental
studies and small-scale project development.
In addition to the active lending program, the Bank has undertaken a major effort in combining its
energy and environment sector work in Russia. The focus of the second phase of the Bank's
Energy and Environment work in Russia will be on Rostov. The Bank is currently planning to
support a Rostov Initiative for a Clean Environment, which may cover all major environmental
issues (air pollution, water). With regard to improving the air quality, the following areas have
been selected: (i) improving the air pollution monitoring network; (ii) developing an energy and a
transport strategy through an initial rapid assessment; and (iii) supporting the city in its
participation in the Bank's ECA Clean Air Initiative.
GEF involvement in this project provides incentive to develop the CSIP supported water and
wastewater improvements investments to a full-scale alternative with important global
environmental benefits. The Bank/GEF involvement makes possible to internalize the nutrient
and GHG externalities and provide substantial global and local benefits. The comprehensive
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scheme will cover all wastewater operations from wastewater collection to effluent discharge and
sludge processing.
The GEF/Bank participation will increase RVK ownership in the development and
implementation of capital in vestment projects formerly implemented by Federal, regional or
municipal agencies , and transfer it from a passive recipient to an active participant and decision
maker.
E. Issues Requiring Special Attention
1. Economic
Economic evaluation methodology:
Incremental Cost
The incremental cost analysis compares baseline scenario and the project alternative. The
baseline includes wastewater scheme reconfiguration during the following decade and provides
some rehabilitation works at WWTP but does not include any nutrient and methane emission
programs.
The proposed project accelerates wastewater scheme reconfiguration, provides collection of
most of the wastewater and septage to the WWTP, improves secondary wastewater treatment
process that will reduce the nutrient discharges, and sludge processing with biogas collection
and utilization for heat and electricity.
The estimated benefits for the nutrient sub-project are presented below. The incremental
abatement cost for the removal of nutrients is $0.29 per kg, which is much below the GEF
yardstick of $6 per kg.
Nutrient Discharges
Proposed Alternative
Item
Units
Quantity
Reference
Years
Nitrogen from WWTP and Temernik Outfall
tN/year
1,142
2003
Phosphorus from WWTP and Temernik
tP/year
307
2003
Outfall
Nitrogen from Domestic Septage
tN/year
0
2002
Phosphorus from Domestic Septage
tP/year
0
2002
Twenty-Five Year N&P Discharges
tN&P
46,331
2000-2025
Twenty-Five Year N&P Reduction (vs.
tN&P
55,223
2000-2025
baseline)
The estimated benefits for the methane sub-project are presented below. The incremental
abatement cost for the GHG reduction is $2.72 per ton of carbon equivalent, which is below the
GEF yardstick of $10 per ton.
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Methane Emissions
Proposed Alternative
Item
Units
Quantity
Reference Years
CO2 Emissions from the WWTP Boiler and
tCO2/year
25,500
2000
Sludge Dryer
Electric grid CO2 emissions per WWTP's
tCO2e/year
58,700
2003
total electric demand
CO2 emissions due to WWTP's heat demand
tCO2e/year
6,800
2000
CO2 emissions by the methane-fired turbines
tCO2e/year
7,200
2003
Total CO2 emissions
tCO2e/year
2,825,000
2000-2025
Same in Carbon-eq.
tCe
770,000
2000-2025
Twenty-five Year Reduction (vs. baseline)
tCO2e
2,621,000
2000-2025
Same in Carbon-eq.
tCe
714,710
2000-2025
2. Financial
The operational costs for RVK are estimated to increase from $15.9 million (2000) to $18.9
million (2004). The tariff will grow from $0.09 to$ 0.20 per m3 for water and from $0.05 to
$0.1 per m3. Total estimated tariff increase would be about 100% during the coming four
years, if the appropriate measures were not taken to improve payment collection and to reduce
operations cost. RVK, Rostov Municipality and Oblast Administration need to have a strong
commitment and political will, to achieve the necessary cost recovery.
3. Technical
The proposed nutrient removal technology is not commonly used in Russia. Also Russia has
very limited experience with the sludge digestion and biogas utilization process. Careful
supervision at the design stage and during implementation is critical for the project success.
Comprehensive training package needs to be included in the contract package to ensure effective
operation of the new facilities. Verification protocols for the operation of both units (nutrient
removal and methane collection and utilization) will be needed and has to be agreed with RVK
and Oblast Administration.
4. Institutional
4.1 Executing agencies:
The implementation of the project will be RVK responsibility. The project management and
monitoring will utilize the existing personnel of the Rostov Bureau for the CSIP implementation
(PIU) in coordination with the PIU of EMP.
4.2 Project management:
RVK will manage the project implementation with support of the two PIUs.
4.3 Procurement issues:
To be determined (TBD)
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4.4 Financial management issues:
TBD
5. Environmental
5.1 Summarize significant environmental issues and objectives and identify key stakeholders.
If the issues are still to be determined, describe current or planned efforts to do so.
Project is expected to have a positive benefit to human health, and reduce adverse environmental
impacts through improvement of the wastewater services in Rostov-on-Don. The long-term
impacts of the Project are clearly positive both in terms of local and global benefits. The
investments financed by the Project will not affect any known archeological or historical site or
any natural habitat, nor will it affect indigenous people. No dams are in the project scope.
Works associated with sewerage network may have following negative effects:
The groundwater table in the city area may drop due to new tunneling works and result in
soil subsidizing and damage to existing buildings.
One family has to be resettled and one gardening plot needs to be taken over for
construction period.
The final disposal of accumulated (past and future) sludge needs to be found out. Current
practice of lagooning it at the WWTP area poses a risk to the environment.
Construction works and associated increased traffic will cause inconvenience to people
living close to construction sites. In addition, inappropriate disposal of construction debris
and other materials related to construction activities may cause some environmental
impacts.
5.2 Environmental category and justification/rationale for category rating: B - Partial
Assessment
Category B is proposed for this project, as it is not likely to have significant adverse
environmental impacts that are sensitive, diverse, or unprecedented. The potential adverse
environmental impacts on human population or environmentally important areas -- including
wetlands, forests, grasslands, and other natural habitats are site-specific; few, if any of them are
irreversible. The mitigation measures can be designed and planned at the project preparation
stage.
5.3 For Category A and B projects, timeline and status of EA
EA start-up date: January 2001
Date of first EA draft: March 2001
Expected date of final draft: April 2001
5.4 Determine whether an environmental management plan (EMP) will be required and its
overall scope, relationship to the legal documents, and implementation responsibilities. For
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Category B projects for IDA funding, determine whether a separate EA report is required. What
institutional arrangements are proposed for developing and handling the EMP?
Public consultations for the tunneling works were conducted on November 28, 2000.
Representatives of mass media, TACIS, NGOs (Society against Rostov Nuclear Power Plant,
Oversan, and Rostov Environmental Society) were present at the meeting. The Environmental
review and mitigation plan for the tunneling works were released to the public in December
2000. The municipality is already conducting negotiations with the property owners that will be
affected by the works under Component 1. Mitigation/compensation measures to address the
effects of potential drop in ground water table will be included into the Environmental
Management Plan (EMP).
Consultants financed by UK (DFID) started the environmental assessment of the investment for
WWTP in January 2001. EMP will be prepared and it will also address the issue of sludge
storage at the site and final disposal of sludge.
5.5 How will stakeholders be consulted at the stage of (a) environmental screening and (b) draft
EA report on the environmental impacts and proposed EMP?
The EMP for the project will contain all information on potential environmental impacts,
proposed mitigation measures and monitoring actions. The consultations will be conducted with
the representatives of municipal and Oblast authorities, universities, research and design
institutes, NGOs and general public. All these meetings will be documented in the annexes to
the EMP.
5.6 Are mechanisms being considered to monitor and measure the impact of the project on the
environment? Will the indicators reflect the objectives and results of the EMP section of the
EA?
Environmental Management Project (EMP), supported by the Bank, is currently being
implemented in the area. It has a substantial component for environmental monitoring. It is
likely that it can be used to monitor the project impacts.
6. Social
6.1 Summarize key social issues arising out of project objectives, and the project's planned
social development outcomes. If the issues are still to be determined, describe current or planned
efforts to do so.
The social analysis will be carried out under the study financed by DFID.
6.2 Participatory Approach: How will key stakeholders participate in the proje ct?
The project is being prepared in close cooperation with the Oblast Government, municipality,
RVK, and local PIUs for two other Bank's projects. General public and NGOs have already
been involved in the preparation of the sewerage system configuration and will be involved in
the preparation of the wastewater treatment components through environmental and social
assessment process.
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6.3 How does the project involve consultations or collaboration with NGOs or other civil
society organizations?
The project provides systematic information briefs to local NGOs and general public. The
project objectives and activities are open for the public via operations of CSIP and EMP PIUs.
Close working relations with local PIUs are planned along the project preparation and
implementation.
6.4 What institutional arrangements are planned to ensure the project achieves its social
development outcomes?
TBD
6.5 What mechanisms are proposed to monitor and measure project performance in terms of
social development outcomes? If unknown at this stage, please indicate TBD.
TBD
7. Safeguard Policies
7.1 Do any of the following safeguard policies apply to the project?
Policy
Applicability
Environmental Assessment (OP 4.01, BP 4.01, GP 4.01)
Yes
Natural habitats (OP 4.04, BP 4.04, GP 4.04)
No
Forestry (OP 4.36, GP 4.36)
No
Pest Management (OP 4.09)
No
Cultural Property (OPN 11.03)
No
Indigenous Peoples (OD 4.20)
No
Involuntary Resettlement (OD 4.30)
TBD
Safety of Dams (OP 4.37, BP 4.37)
No
Projects in International Waters (OP 7.50, BP 7.50, GP
Yes
7.50)
Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60)
No
7.2 Project Compliance
(a) Describe provisions made by the project to ensure compliance with safeguard policies which
are applicable.
TBD
(b) If application is still to be determined, describe current or planned efforts to make a
determination.
The comprehensive Environmental Review and Social Assessment are integral part of project
preparation. Provisions to ensure compliance with safeguard policies will be made after
completion of the studies at appraisal at latest.
F. Sustainability and Risks
1. Sustainability:
Long-term commitment of the implementing agency: RVK, Municipality and Oblast
Administration are all committed to the project. This has been demonstrated through direct
financial support to the project including tariff increases.
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Difficulties on the Federal level. According to the Russian Federation legislation, all foreign
financial assistance, included GEF grants, has to be processed through the Federal Ministry of
Finance. Lack of familiarity with the GEF procedures in this agency may create some obstacles.
Approval of major project changes such as grant amendment may be time consuming.
Cost recovery for the WWTP operations . RVK financial situation requires special attention, as
its revenues do not cover full operation costs. Oblast Administration and RVK are committed to
the tariff and service reform along with the other measures to stabilize the RVK financial
situation.
2. Critical Risks (reflecting the failure of critical assumptions found in the fourth column of
Annex 1):
Risk
Risk Rating
Risk Mitigation Measure
From Outputs to Objective
RVK, municipality and Oblast
N
Increased local public participation
Administration will lose interest to the
project
Insufficient water tariff adjustment to
M
Consistent effort to improve the financial
ensure long-term financial performance
management of RVK, implementation of the
of RVK
IAS and modern financial management
mechanisms in RVK.
The nutrient discharges and GHG
M
The risk of inappropriately chosen baseline
emission reduction are less (and/or more
assumptions is minimized by thorough and
costly) than expected
conservative incremental cost analysis.
Unforeseen environmental impacts from
M
Ongoing TA from internationally recognized
implementing the Project
technical experts; Environmental Management
Project PIU will be heavily involved in the
Project preparation assuring its environmental
consistency; and Environmental Management
Plan, including a Mitigation Plan and
Monitoring Plan, acceptable by the Bank will
be developed during the Project preparation by
international and local experts.
From Components to Outputs
The WWTP capacity is not sufficient for
N
Final designs will be conducted by
the wastewater load
international engineering firm with
participation of the local design institutes
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The sludge amount is lower than
M
Same as above
expected
Overall Risk Rating
M
Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk)
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Annex 1: Project Design Summary
RUSSIAN FEDERATION: ROSTOV NUTRIENT DISCHARGE & METHANE
REDUCTION GLOBAL ENVIRONMENTAL FACILITY
Key Performance
Hierarchy of Objectives
Indicators
Monitoring &
Critical Assumptions
Evaluation
Sector-related CAS Goal: Sector Indicators:
Sector/ country
(from Goal to Bank
reports:
Mission)
Contribute to achieving
Improving environmental
Government reports on
Achieving the goals of
environmental
quality (nutrients reduction the state of the
the environmental
sustainability
and air pollution)
environment
sustainability in Russia
contributes to increased
economic well-being
Environmental
Management Project
reports
National
Communications and
other reports to
UNFCCC
GEF Operational
Program:
Conservation and
Overall reduction of the
National Reports to
Proper environmental
sustainable use of water
nutrient discharges
Istanbul Conference, NGO management strategy
bodies, including
reports
will be implemented in
watersheds, river basins,
the region and the
and coastal zones, and
country
prevention of pollution of
globally important aquatic
ecosystems
Reduction of net emissions Overall reduction of GHG
National Communications
Achieving the
of greenhouse gases
in Russia, implementation
and other reports to
UNFCCC objectives
of the similar projects in
UNFCCC
contributes to increased
other parts of Russia
economic well-being of
the Russian Federation
population.
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Global Objective:
Outcome / Impact
Project reports:
(from Objective to
Indicators:
Goal)
To achieve substantial
Nutrient discharges
Monitoring protocol for
The Government
reduction of the nutrient
reduction achieved
the nutrient reduction
and Oblast
discharges from WWTP
(calculated)
Administration
and help Russia to execute
tons/year;
remain committed
the Bucharest Convention
Cost per kg of
to the project
obligations
nutrients reduction
goals;
RVK revenue
collection covers
cost;
Methane as the
energy source
remains to be
important for
RVK.
To achieve cost-effective
GHG emission
Monitoring protocol for
reduction of the GHG
reduction achieved,
the GHG reduction
emissions in order to help
methane collected
Russian Federation to meet
and utilized (ton of
its international obligations
carbon-eq./year
under UNFCCC
Cost per ton of
carbon-eq./year
Output from each
Output Indicators:
Project reports:
(from Outputs to
Component:
Objective)
Reconfiguration of the
Closure of all outfalls of
Project progress report,
Same as above
wastewater network
the untreated wastewater,
project evaluation reports,
closure of all unnecessary
CSIP supervision mission
wastewater mains and
reports
sewerage pumping stations
Rehabilitation and
Completion of the WWTP Project progress report,
modernization of the
rehabilitation,
secondary stage of the
implementation of the new
WWTP, which includes
technology.
nutrients removal and
Reports from the
anoxic reduction of nitrates Concentration of the
Municipal Sanitary
nutrients in the WWTP
Inspection
effluent
Rehabilitation of the
Operation of the digestion
Project progress reports,
anaerobic sludge digestion
process,
Reports from the Oblast
process, biogas utilization
Electric System Operator
for heat and electricity
kWh generated at the
biogas power generator
Project Components /
Inputs: (budget for each
Project reports:
(from Components to
Sub-components:
component)
Outputs)
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Ramon Prudencio C. de Mesa
M:\RAMON\Work Programs\WP03-2001\Danube-Black Sea Harmonized Proposal\Regional WB Partnership Nutrient
Reduction\2Black Sea Council Paper Final 040301.doc
April 9, 2001 10:12 AM
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