THE WORLD BANK/IFC/M.I.G.A.
OFFICE MEMORANDUM
DATE:
May 7, 2002
TO:
Mr. Mohamed El-Ashry, CEO/Chairman, GEF
FROM:
Lars Vidaeus, GEF Executive Coordinator
EXTENSION:
34188
SUBJECT:
Bulgaria Wetlands Restoration and Pollution Reduction Project (P068858)
Submission for Final CEO Endorsement
1.
Attached please find the electronic file of the Project Appraisal Document (PAD) for
the above-mentioned project for your final review and endorsement. This project is proposed
as part of the Black Sea/Danube Strategic Partnership Nutrient Reduction Investment Fund
approved for Work Program entry at the May 2001 GEF Council meeting, under streamlined
CEO endorsement procedures. The scheduled Board date for this project is June 13, 2002.
We would appreciate receiving your response, so that we may finalize the Bank Board
submission by May 17, 2002.
2.
The PAD is fully consistent with the objectives, scope, and overall financial plan of the
Black Sea/Danube Strategic Partnership Nutrient Reduction Investment Fund. Subsequent to
Pipeline Entry of the concept, minor adjustments were made during preparation concerning the
project structure. The initial overall project structure was slightly changed to group the six
project components into three groups, i.e., wetlands restoration, protected areas management
and project coordination and management.
3.
The proposed project is the second of its kind under the umbrella of the Black
Sea/Danube Strategic Partnership Nutrient Reduction Investment Fund. The project is
one of the Bank's early efforts in piloting wetlands restoration for nutrient trapping and is
expected to play a critical demonstration role within the region and help promote similar cost-
effective investments for nutrient reduction in other Danube/Black Sea riparian countries under
the umbrella of the Strategic Partnership.
4.
Comments of GEFSEC at the time of pipeline entry have been addressed in the PAD as
follows:
Country Ownership. The Ministry of Environment and Water (MoEW) has confirmed
its commitment to provide counterpart funds for the Project in a timely manner and has
already made the needed allocation in the CY03-05 budget. The MoEW, the Ministry
of Agriculture and Forest (MoAF) and other key sectoral ministries represented in the
Project Steering Committee are lending full support to the project. The local regional
Mr. M. El-Ashry
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May 21, 2002
authorities as well as the municipal mayors in the project area are fully committed to the
project. (For details please refer to page 19 of the PAD).
Replicability. Dissemination of project activities and benefits will be undertaken at the
national and regional levels in order to achieve replication of project interventions. The
project would provide for the organization of regional workshops, field visits by
interested parties, training and other activities to promote replication of project activities
in other parts of the country and other Danube/Black Sea riparian countries. The sub-
component on restoration of additional sites, which is expected to be financed by other
donors with interest on environment/water resources issues, focuses on the replication
of wetland restoration activities in other areas of Bulgaria. The UNDP/GEF Danube
and Black Sea Program provides a framework for dissemination and replication of
successful demonstration to be developed under this project. (For details see Annex 2
of the PAD).
Sustainability. To promote institutional sustainability, the Project Coordination Unit will
be under the supervision of the MoEW and will have significant physical presence at the
two project sites. Project activities will be implemented by existing entities at the local
or regional levels, assisted by the central ministries as needed. (For additional details see
page 14 of the PAD). The project will provide capacity building in protected areas
management (including wetlands management), which will enable local and regional
institutions as well as local administrations to acquire the needed managerial and
technical skills to establish a sound basis for adequate management and maintenance of
restored wetlands and associated protected areas. To ensure social sustainability, the
project design has been developed with substantial local involvement and consultation.
Social sustainability will be enhanced by involving key stakeholders during project
implementation, and by supporting the development and implementation of protected
areas management plans that link wetlands restoration and nature conservation with
sustainable socio-economic development and tangible benefits for the local population.
To ensure financial sustainability, a provision has been made to support incremental
operation and maintenance costs of implementing agencies on a declining basis while
developing financial mechanism to finance basic operation and maintenance costs of
wetlands and protected areas management activities. The Government has already
made commitments for budget allocation to cover estimated recurrent expenditures on
an increasing basis.
Baseline Course of Action. Nutrient discharge into the Black Sea has been identified as
the most serious problem facing the Black Sea. Wetland restoration along the Danube
river has also been identified as one of the most effective ways to reduce nutrient loads
into the Black Sea. The project's selected sites for wetland restoration, the Belene
Island and the Kalimok/Brushlen Marshes, are identified as the most representative of
riverine wetlands and of international importance for waterfowl habitat and as high
Mr. M. El-Ashry
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May 21, 2002
priority areas for restoration in the National Biodiversity Strategy, the National Action
Plan for the Conservation of the Most Important Wetlands, and the Danube River
Pollution Reduction Program. To address these issues, the Government of Bulgaria has
assumed international obligations under the Bucharest Convention (1992) and the
Odessa Ministerial Declaration (1994) on the Protection of the Black Sea, and the
Convention on the Cooperation for the Protection and Sustainable Use of the Danube
River (1994) to reduce nutrient discharge into the Black Sea, and is moving towards
compliance with relevant European Union Directives. The Government has planned the
construction of a small number of priority wastewater treatment plants with funds from
the National Environmental Protection Fund and pre-accession funds. Sustainable rural
development consistent with best environmental practices is the basis of the
government's overall strategy for rural development. (For details see pages 4-8 of the
PAD --Main Sector Issues and Government Strategy and Sector issues to be
Addressed by the Project and Strategic Choices).
Conformity with GEF Public Involvement Policy. Key stakeholders including villagers
and their representatives in local government, line ministries staff involved in
implementing the project, and NGOs were fully consulted during project preparation,
and their feedback was incorporated into the project design. Participatory activities
conducted during the preparation phase will serve as a template for project
implementation. A Social Assessment of the communities surrounding the two project
sites was undertaken during project preparation. (For details see page 28 on Summary
Project Analysis Social and Annex 11 of the PAD). As part of the environmental
assessment process, public consultation were held during the preparation of the
Environmental Assessment with several stakeholders at the local level. During the
consultation process, local communities did not voice any major concerns about the
project. (For additional details see page 26 on Summary Project Analysis
Environmental).
Private Sector Involvement. The project will provide technical and financial support to
small- and medium-size entrepreneurs to implement sound proposals for establishing
"green" business compatible with biodiversity conservation and sustainable use of
natural resources. The Project will also support the Farmer Transition Support
Program and the Biodiversity Conservation Small Grant Program, which will involve
individuals, farmers, farmers' associations, NGOs as well as the private sector.
Incremental Cost Analysis. The GEF Alternative would go beyond the Baseline
Scenario by allowing the project to restore valuable wetlands ecosystems and their
valuable environmental functions, pilot the use of riparian wetlands as nutrient traps, and
support local communities to adopt sustainable natural resources management practices
that will reduce nutrient discharge into the Black Sea. Implementation of the GEF
Alternative would provide the means for restoring high priority wetlands, protect unique
Mr. M. El-Ashry
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May 21, 2002
coastal landscapes and habitats for important bird species. (For details see Annex 4 -
Incremental Cost Analysis).
Government Co-financing and other donor support. The GEF grant of US$7.5 million
will finance 56% of the total project cost of US$13.28 million. The Government of
Bulgaria contribution (including contribution from local farmers and municipalities) is
US$3.05 million. Additional firmed co-financing includes US$1.59 million equivalent
from the EU PHARE National Program and US$0.38 million equivalent from the
Austrian Government. EU PHARE and Austria Government support will be provided
on a parallel financing basis. The Ministry of Environment and Water is seeking for
about US$0.76 million from other bilateral donors to cover the financing gap. Since the
leveraging ratio for this project on the basis of firmed co-financing is about 1.0:0.67
(i.e., for every dollar provided by GEF, 67 US cents have been leveraged from other
sources), the project meets the minimum Danube/Black Sea Strategic Partnership
levering requirement for wetlands restoration projects set at 1.0:0.5.
Project Performance Indicators. Project impact, output and performance indicators to
provide a baseline and targets for project monitoring and evaluation have been
developed and agreed with the Government. Key performance indicators include, inter
alia, gradual improvements in ecosystem health of restored wetlands; establishment of
effective control structures and monitoring systems; adoption of protected areas based
on broad stakeholder consensus and support and combining socio-economic
development and conservation objectives; establishment of effective protected areas
administrations; establishment of effective replication models of participatory and
integrated management of wetlands in areas with mixed land use and ownership
patterns; improved agricultural practices; increased local awareness and support for
biodiversity conservation; and increased dialogue on tranboundary water quality and
regional natural resources management issues. The results of monitoring and evaluation
activities will be fed back into the implementation process. (For details see Annex 1 of
the PAD on Project Design Summary and Agreed Minutes of Negotiations).
5.
The STAP Reviewer's comments and the World Bank's response are attached for your
reference. All STAP Reviewer's comments have been addressed in the PAD.
6.
Please let me know if you require any additional information to complete your review of
the project document. We look forward to receiving your endorsement of the project for Bank
Board approval.
Many thanks.
Attachments :
Project Appraisal Document
Agreed Minutes of Negotiations
Mr. M. El-Ashry
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May 21, 2002
STAP Reviewer Comments
World Bank Response to STAP Reviewer Comments
Letter from the Ministry of Environment and Water dated April 8, 2002
cc: Messrs./Mmes.
King, GEF PROGRAM COORDINATION (GEFSEC); Tuck,
Bromhead, Holt, Cestti, Battaglini (ECSSD); Hatziolos, Khanna, Aryal
(ENV); ENVGC ISC, Regional Files
BULGARIA
Wetlands Restoration and Pollution Reduction Project
Project Appraisal Document
Europe and Central Asia Region
Environmentally and Socially Sustainable Development Department
Date: May 6, 2002
Team Leader: Rita E. Cestti
Country Manager/Director: Andrew N. Vorkink
Sector Manager/Director: Laura Tuck
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:
Amount (US$m): $7.50
Financing Plan (US$m): Source
Local
Foreign
Total
BORROWER/RECIPIENT
2.50
0.40
2.90
LOCAL COMMUNITIES
0.15
0.00
0.15
EC: PHARE
0.00
1.59
1.59
AUSTRIA, GOV. OF (EXCEPT FOR FED
0.19
0.19
0.38
CHANCELLERY-DG DEV COOP)
GLOBAL ENVIRONMENT FACILITY
2.98
4.52
7.50
BILATERAL AGENCIES (UNIDENTIFIED)
0.33
0.43
0.76
Total:
6.15
7.13
13.28
Borrower/Recipient: GOVERNMENT OF BULGARIA
Responsible agency: MINISTRY OF ENVIRONMENT AND WATER
Wetlands Restoration and Pollution Reduction Project - Project Coordination Unit
Address: Ministry of Environment and Water
22 Maria Luisa Blvd., Room 408
1000 Sofia, Bulgaria
Contact Person: Ms. Marietta Stoimenova, Project Manager
Tel: (359-2) 940-6551/940-6610 Fax: (359-2) 980-8734 Email: Wetlands_ppu@
moew.government.bg
Estimated Disbursements ( Bank FY/US$m):
FY
2003
2004
2005
2006
2007
2008
Annual
0.60
1.54
1.93
1.81
1.19
0.43
Cumulative
0.60
2.14
4.07
5.88
7.07
7.50
Project implementation period: 5 years. The expected effectiveness date is September 16, 2002, the expected
completion date is September 15, 2007, and the expected closing date is March 15, 2008.
OCS PAD Form: Rev. March, 2000
A. Project Development Objective
1. Project development objective: (see Annex 1)
The project development objective is that local communities and local authorities in the Persina Nature
Park and Kalimok/Brushlen Protected Site areas adopt sustainable natural resources management
practices. The project will help demonstrate how environmentally-friendly rural development activities can
improve livelihoods.
The global environmental objective is to demonstrate and provide for replication of reduction of
transboundary nutrient loads and other agricultural pollution flowing into the Danube River and the Black
Sea Basins while at the same time conserving key target threatened species in the project areas through: (i)
wetlands restoration and protected areas management programs, and (ii) support for stakeholders to adopt
environmentally-friendly economic activities in the two project areas.
In support of these objectives, the project will assist in: (i) the restoration of critical priority wetlands in
the Danube River basin and piloting the use of riparian wetlands as nutrient traps; (ii) the establishment of
comprehensive monitoring systems for water quality and ecosystem health; (iii) support for protected areas
planning in Persina Nature Park and Kalimok/Brushlen Protected Site; (iv) strengthening capacity to
protect and manage biodiversity and natural resources; (v) building public awareness of sustainable natural
resources management and biodiversity conservation; and (vi) promoting and supporting entrepreneurial
and agricultural activities within the project region which ensure the sustainability of natural resources and
are compatible biodiversity conservation objectives.
2. Key performance indicators: (see Annex 1)
Progress towards the project objective will be measured by the following key performance indicators:
l
Gradual improvement in ecosystem health of restored wetlands, as measured through essential
ecological indicators, i.e., nutrient removal (measured through the percentage reduction in nutrient
loads in water in-flow and out-flows); critical biodiversity habitat (evidenced by increased species
diversity and population numbers of key indicator species); critical fish reproduction habitat (measured
through the increased fish diversity and population numbers, especially those of high economic value).
l
Establishment of effective control structures and monitoring systems; staff knowledgeable in their
operations and maintenance.
l
Adoption of Protected Areas Management Plans for Persina Nature Park (21,000 ha) and
Kalimok/Brushlen Protected Site (6,000 ha), based on broad stakeholder consensus and support and
combining socio-economic development and conservation objectives.
l
Establishment of effective protected area administrations, capable of implementing the Protected Areas
Management Plans in close collaboration with other local institutions and communities.
l
Establishment of effective, replicable models of participatory and integrated management of wetlands
in areas with mixed land use and ownership patterns.
l
Improved agricultural practices in Persina Nature Park and Kalimok/Brushlen Protected Site, resulting
in measurable nutrient reduction.
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l
Increased local awareness and support for biodiversity conservation, marked by the increased
participation of local communities in protected areas management and conservation activities and
increased public knowledge of the importance of the restored wetlands and protected areas ecosystems.
l
Increased dialogue on transboundary water quality and regional natural resources management issues
through partnerships with Bulgarian and regional scientific communities.
B. Strategic Context
1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1)
Document number: to be completed
Date of latest CAS discussion: 04/25/2002
to be confirmed
Main development challenges of Bulgaria, as identified in the recent (draft) CAS, includes the need to
ensure an optimal path toward environmentally sustainable development. Ensuring prudent and rational
utilization of natural resources and a prudent path toward compliance with EU environmental directives,
while at the same time reducing poverty levels, are over-arching goals.
The Project helps meet the objectives of the CAS in the following ways:
l
Sustainable natural resources management: The Project will help local communities and local
authorities in the Project region to adopt sustainable natural resources management practices. The
project will help demonstrate the use of wetlands as nutrient sinks, thus contributing to address
pollution problems of the Danube River and Black Sea; conserve Bulgaria's globally significant
biodiversity; and demonstrate how ecologically sustainable agricultural activities can improve
livelihoods.
l
Strengthening Implementation and Compliance with EU Environmental Directives: The Project
focuses on helping the Government of Bulgaria implement the Protected Areas Law and the Water Act,
which are harmonized with the EU Water Management Framework Directive, the Nitrates Directive
and the Habitats and Protection of Wild Birds Directives. The technical assistance provided by the
Project will assist the country towards EU accession and institutional building.
l
Poverty-Environmental Link: This project also demonstrates a clear poverty/environment link. The
region along the Danube coast is one of the poorest areas in Bulgaria, to a great extent related to the
alterations of the Danube river and floodplain, which has led to decreased economic productivity of the
river. It has seen a tenfold drop in fishery catch since the late 1960's, seriously affecting rural incomes
and livelihoods. One of the underlying causes of the decrease is the destruction of riverine wetlands
necessary for fish spawning. The draining of the floodplain has proven too expensive to maintain
because of the heavy reliance in pumping. This has resulted in considerable areas of the former
floodplain with degraded natural habitats and unsuitable for agriculture. Hence, linking wetland
restoration with the sustainable use of natural resources in the region will help increase the well-being
of the local population by enabling them to increase their economic opportunities for fishery,
agriculture, eco-tourism as well as by allowing downstream communities to enjoy cleaner water
supplies.
1a. Global Operational strategy/Program objective addressed by the project:
The project is fully consistent with Global Environment Facility (GEF) Operational Program No. 8 under
the International Waters Operational Strategy regarding water bodies. The project addresses the highest
priority transboundary problem identified in the Strategic Action Plans of both the Black Sea and the
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Danube River Basins. Under the WRPRP, the Government of Bulgaria (GoB) will develop comprehensive
guidelines for nutrient reduction that will fit into the nation-wide nutrient reduction strategy. It will also
implement innovative pilot activities in wetland restoration, and accelerate the introduction of nutrient
friendly agricultural practices which have clear transboundary (global) as well as national benefits. The
incremental costs associated with these benefits are additional to other actions which will be taken and
which have clear domestic benefits (such as the construction of wastewater treatment plants).
The project also has significant biodiversity conservation benefits, consistent with eligibility criteria
outlined in the GEF Operational Strategy No. 2 on the conservation of coastal, marine, and freshwater
biodiversity. Restoration of wetlands and strengthening protected areas in the Danube floodplain will help
restore and conserve natural habitats in critical ecosystems with globally 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 "National Action Plan for the Conservation
of the Most Important Wetlands in Bulgaria" (1995) considers Belene Island and the Kalimok/Brushlen
Marshes as high priority areas for restoration. Belene Island is of particular international importance as
breeding habitat for the endangered white-tailed eagle and nesting herons, cormorants (Phalacrocorax
carbo), glossy ibises (Plegadis falcinellus) and spoonbills (Platalea leucorodia). The two sites also serve
as nesting places for the Ferruginous Duck (Aythya nyroca) and the endangered Dalmatian Pelican (
Pelecanus crispus).
Consistency with the Strategic Action Plan for the Protection and Rehabilitation of the Black Sea
(BSSAP) and the Black Sea/Danube Strategic Partnership. The BSSAP, formulated with the assistance of
GEF, has identified nutrient discharge as the most serious problem facing the Black Sea. The GoB has
requested assistance from the GEF/World Bank to undertake an innovative approach to wetland/floodplain
restoration which links land use change with sustainable use and economic development. Floodplains and
wetlands 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 which pass through. The proposed project is the first
of its kind under the umbrella of the Black Sea/Danube Strategic Partnership -- Nutrient Reduction
Investment Fund, a program which intends to help riparian countries undertake investments to control or
mitigate nutrient inflow to the Black Sea. As the first wetlands restoration project to be proposed under the
Strategic Partnership, the Bulgaria WRPRP will play a critical demonstration role within the region and
help promote similar cost-effective investments for nutrient reduction in the region. The Strategic
Partnership framework will ensure lessons learned during implementation of this project will be
disseminated to enhance future project designs.
2. Main sector issues and Government strategy:
Background. Bulgaria is situated in the heart of southeast Europe, and lies in the eastern part of the
Balkan Peninsula. Its climate ranges from continental in the north and west to Mediterranean in the east
and south. The average annual precipitation is 640 millimeter (mm), but ranges from 480 mm on the Black
Sea coast to 1800 mm in the mountains. The average annual temperature is 10oC, but varies from -2oC in
winter to 25oC in summer. In general. Bulgaria is well endowed with natural resources. The wide range of
soils is conductive to a diversified agriculture and forestry. About 56% of the total area is agricultural
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land, about 35% is covered by forests, and 5% is covered by water.
Radical economic and structural reforms were introduced in 1997. They resulted in a dramatic fall in the
inflation rate, acceleration in the privatization of state owned enterprises and the return to modest economic
growth. The economic changes, however, led to widening regional disparities in living standards and
infrastructure, particularly in rural areas. During the 1990s, the privatization of agricultural land, which
took place mainly via the restitution process, resulted in fragmentation in land ownership. Many of the
small private farms that emerged from the land restitution are subsistence in nature. Poverty rates are
higher among rural areas. In 1997, over 41% of rural residents were poor compared to 33% in urban
areas.
Main Sector Issues. The Black Sea, a critical regional resource, suffers severe environmental damage
from eutrophication (i.e., the collapse of food chains due to loss of life-giving oxygen), the 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 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 approximately 2900 kilometers through thirteen countries from Germany to the Black
Sea, includes 300 tributaries and drains 817,000 square kilometers. The Danube contributes
approximately 60% of the nutrient load to the Black Sea, with approximately 60% of the nitrogen
compounds and about 66% of the phosphorous compounds originating from non-point sources within the
Danube watershed.
Regional action to clean up the Danube/Black Sea. In response to growing concerns about Danube
pollution, and in recognition of the fact that significant nutrient reduction requires regional commitment, the
Danube River riparian countries drew up the Convention on the Cooperation for the Protection and
Sustainable Use of the Danube River, signed in 1994 and entered into force in 1999. Monitoring of the
implementation of the Convention is the responsibility of the International Commission for the Protection of
the Danube River (ICPDR), located in Vienna. Similarly, the six countries bordering the Black Sea
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 River forms the border between Bulgaria and its northern neighbor
Romania for 472 kilometers (km) 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 have 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 currently not the largest contributor of nutrient loads to the river. The
Transboundary Diagnostic Analysis (TDA) undertaken under the Black Sea Environmental Program
between 1993-99, indicates that Bulgaria places third on the Black Sea riparian countries in terms of the
nitrogen (N) and phosphorous (P) contributions to the Sea.
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Actions which Bulgaria might take to address the issue of transboundary pollution have to be matched with
a program addressing real national priorities with national benefits in order to be politically and financially
justified. Government and local officials are eager to integrate interventions which address transboundary
pollution and global biodiversity with efforts that help Bulgaria meet EU environmental acquis. Other
identified national benefits include opportunities for the sustainable use of aquatic resource, providing
income for local communities. An approach which integrates global and national development objectives
increases the likelihood of long-term project success.
Bulgaria faces a number of issues as it attempts to meet its international commitments to reduce nutrients
and generally clean up the Danube/Black Sea, and to comply with EU environmental acquis. These
include:
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 wastewaters, changes in hydrological conditions and the decline of both quality
and quality of aquatic ecosystems. The underlying causes of the pollution include lack of financial
resources for the construction and operation of wastewater treatment plants with tertiary treatment capacity
in a number of Bulgarian towns, inappropriate agricultural practices, industrial pollution, and to a lesser
extent to the present economic situation, low household incomes and poor financial situation of wastewater
companies. About 49% of all wastewater generated (including 43% of industrial wastewater) is discharged
directly into the environment without any preliminary treatment. Nationwide, half of the towns with
population of over 50,000, and about 75% of the towns with a population of over 10,000 people have no
wastewater treatment plants (WWTP). According to the TDA, Bulgaria contributes approximately 7,500
tons of N and 720 tons of P per year into the Danube. For the Black Sea, the numbers are significantly
higher: 2,480 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. Wetlands, in turn, can result in retention and
recycling of nutrients found in surface water flows, and can offer cost-effective solutions for abatement of
nitrogen and phosphorus loads.
Biodiversity conservation and wetland restoration. Bulgaria is one of the most biodiversity-rich countries
on the Danube. It is the third richest European country from the point of view of animal and plant
diversity. The National Biodiversity Strategy (1994) as well as the National Action Plan for the
Conservation of the Most Important Wetlands (1995) have identified priority areas for conservation and
restoration of wetlands, including areas of international importance such as nesting sites of the Ferruginous
Duck and the endangered Dalmatian Pelican. In its efforts to develop a wetlands strategy consistent with
EU directives on habitats and the protection of wild birds, the Government has faced opposition from some
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. In general, public opinion has favored the draining of wetlands for other land uses
-- Government's policy from the 1950s to the 1980s.
Protected areas management. Activities related to nature protection are regulated by the Environmental
Protection Law, Forestry Law, the Protected Area Law (PAL), and the Hunting Law. While the PAL
stipulates procedures to prepare protected areas management plans, development of these plans will require
the integration of biodiversity conservation with economic development with a participatory planning
process. Similarly, in order to gain acceptance from poor local communities to reduce pressure on nature
resources, there is a clear need to identify and implement alternative income generating activities, to
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undertake awareness raising programs, and to have park administrations proactively foster sustainable
economic activities within the project region.
Government Strategy. Bulgaria's strategy for nutrient reduction, biodiversity protection and agriculture
and rural development has the following objectives:
l
Compliance with the EU Water Framework Directive. The country will be required to achieve "good
status" for the all surfaces waters measured not only by the water quality of its water bodies, but also
by the healthy functions of natural water ecosystems (including transboundary river basins).
l
Compliance with the EU Habitats and Birds Directives. The country is required to establish a network
of effective protected areas covering representative habitats which will become part of the European
Nature 2000 network of protected areas upon EU accession.
l
Fulfill 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, which 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. The Danube wetland complex within the project sites is the most representative of
riverine wetlands and of international importance for waterfowl habitat.
l
Achieve sustainable rural development. The National Agriculture and Rural Development Plan
2000-06 aims for sustainable rural development consistent with the best environmental practices, and
calls for the promotion of environmentally-friendly farming and environmental protection.
Recent and Planned Government Actions. The Government of Bulgaria has demonstrated a commitment
to improving nature protection and water quality.
Water quality and management. In 1999, the Bulgarian Parliament adopted a new Water Act that reflects
to a large extent the requirements of the EU Water Framework Directive. The Water Act includes the
elements on the planning, study and management of the national and river basin levels and the
administrations that will be established to carry out these management responsibilities. It introduces a
more integrated approach to water management based on river basin principles -- to ensure common
management of surface and groundwater according to quality and quantity, in order to achieve sustainable
use and protection of waters, water ecosystems, and wetlands. Implementation of the Water Act requires
institutional changes and new skills to carry out modelling, planning and increased monitoring.
Investments in point-source pollution. The government has planned investments from the National
Environmental Protection Fund for a small number of priority wastewater treatment plans, identified
according to a set of criteria. Virtually all cities on Danube tributaries are included in the National
Program for priority construction of urban wastewater treatment plants for cities above 10,000 inhabitants.
Financial resources, however are far from sufficient to cover investment costs. Nutrient reduction
investments are not addressed specifically by the plan. The Government will rely heavily on grants or soft
loans from international donors for the construction of wastewater treatment plans, in particular the EU
pre-accession funds -- Instrument for Structural Policies for Pre-Accession (ISPA). The high operation
and maintenance costs, which are rarely financed from outside sources, is a constraint for the
implementation of this program. Hence the government is very interested in looking at low-cost
- 7 -
technologies such as wetland restoration as a means of reducing nutrient loads and meeting water quality
standards.
Wetland restoration for biodiversity conservation and nutrient reduction. The Government recognizes the
multiple benefits of wetland restoration: first, as a way to decrease transboundary pollution; second, as a
means of preserving globally significant biodiversity; 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.
3. Sector issues to be addressed by the project and strategic choices:
The WRPRP will extend and deepen the ongoing Government actions by addressing the following issues:
l
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.
l
Developing opportunities for promoting protected areas management and sustainable use of natural
resources that is politically and financially justified and socially sustainable.
l
Helping develop a program for nutrient reduction strategy in the Danube/Black Sea Basin consistent
with new policies and legislation.
l
Developing capacity of farmers to use environmental-friendly agriculture practices and resources
management.
l
Building national, regional and local capacity in assisting the GoB in meeting its international
obligations on transboundary pollution and biodiversity conservation.
l
Fully integrating interventions that address transboundary pollution and global benefits with efforts
towards complying with EU environmental acquis, in particular those requirements related to EU
Water Framework Directive and Directives on Habitat and Protection of Wild Birds.
l
Moving towards compliance with EU environmental acquis.
Originally considered a candidate for a Learning Innovation Loan (LIL), a strategic choice made before
proceeding with project preparation was to carry out the necessary technical, social and environmental
studies for wetlands restoration during preparation -- resulting in a longer preparation period.
C. Project Description Summary
1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost
breakdown):
The project will assist the Government of Bulgaria to: (i) restore critical priority wetlands in the Danube
river basin and make use of the wetlands in riparian zones as nutrient traps; and (ii) promote protected
areas management and the sustainable use of natural resources, through management planning, monitoring
of water quality and ecosystem health, public awareness/participation programs and environmental
education. Although the project only directly addresses the restoration of selected priority wetlands in
Bulgaria, these activities will play a critical demonstration role within the region, promoting nutrient
- 8 -
reduction investments in other parts of Bulgaria and neighboring countries. The table below summarizes
the project cost estimates by component.
Indicative
Bank
% of
GEF
% of
Component
Sector
Costs
% of
financing
Bank
financing
GEF
(US$M)
Total
(US$M)
financing
(US$M)
financing
1. Wetlands Restoration
Natural Resources
5.02
37.8
0.00
0.0
3.43
45.7
Management
2. Protected Areas
Natural Resources
7.37
55.5
0.00
0.0
3.38
45.1
Management
Management
3. Project Coordination,
Institutional
0.89
6.7
0.00
0.0
0.69
9.2
Management and Monitoring
Development
Total Project Costs
13.28
100.0
0.00
0.0
7.50
100.0
0.00
0.0
0.00
0.0
0.00
0.0
Total Financing Required
13.28
100.0
0.00
0.0
7.50
100.0
The following paragraphs provide a brief description of each component:
Component 1: Wetlands Restoration (Total: US$5.02 million, GEF: US$3.43 million, Other Donors
(TBI): US$0.76 million, GoB: US$0.83 million). The most innovative aspect of the proposed project,
this component -- if successful -- has a high replication value throughout Bulgaria and the region. In the
initial phase of this component, 2,340 ha of former marshes will be restored in two already identified sites,
Belene Island within Persina Nature Park and Kalimok/Brushlen Marshes within Kalimok/Brushlen
Protected Site, to demonstrate the use of wetlands as nutrient sinks. Additional sites are expected to be
identified and restored later during project implementation. Selection criteria for these additional sites will
include: ecological potential, floodplain type, current land use, and nutrient reduction potential.
The GEF funds will finance consultancy services for the elaboration of detailed engineering designs,
baseline surveys, and the supervision of construction as well as the civil works themselves for the two
already identified sites. The civil works will include both construction and rehabilitation activities of small
infrastructure which will regulate water flows through the wetlands at the Belene Island and
Kalimok/Brushlen sites -- allowing for controlled flooding that optimizes nutrient trapping, biodiversity
restoration, fish production while minimizing the risk of impacts to agricultural areas.
Grant support is being sought to finance activities related to the second set of wetland sites to be restored
under the project: consultant services for additional site identification, pre-feasibility and feasibility studies,
design of restoration activities, and the necessary civil works (including the supervision of their
construction). Other than the two sites already selected for restoration under the Project, the Bulgarian
"National Action Plan for the Conservation of the Most Important Wetlands in Bulgaria" (1995) as well as
the UNDP/GEF/WWF "Evaluation of Wetlands and Floodplain Areas in the Danube River Basin" (1999)
have identified other critical wetland sites in need of restoration and protection based on predominately
their biodiversity value. The Project will assist the GoB to undertake a re-assessment of identified priority
wetlands, using a broader range of criteria developed as "lessons learned" from the preparation phase of the
original two restoration sites, such as nutrient-uptake potential and marginal cost (linking to the Nutrient
Reduction Strategy Guidelines Component) as well as social indicators (current land-use and ownership
patterns).
- 9 -
Component 2: Protected Areas Management (Total: US$7.37 million, GEF: US$3.38 million, EU
PHARE: US$1.59 million, Austria:US$0.38 million, Farmers and Municipalities: US$0.15 million,
GoB: US$1.87 million). This component will support the next step towards the sustainable resource
management and protection within the two protected sites, Persina Nature Park (22,000 ha) and
Kalimok/Brushlen Protected Site (6,000 ha). Starting with the preparation of protected areas management
plans at the two sites, the component will then move on to support the implementation of priority actions
identified within the management plan framework. Both the wetlands restoration and protected areas
management regimes will integrate needs of the local communities with the biodiversity objectives of the
two protected areas. This component will include: (i) the development of protected areas management
plans in Persina Nature Park and Kalimok/Brushlen Protected Site; (ii) the implementation of priority
actions identified in these plans, including the management of the restored wetlands and surrounding land
(including the operation and maintenance of the flood control infrastructure), establishment of a
contingency relief fund, establishment of a farmer transition support fund to assist farmers make the
transition to economic activities compatible with conservation objectives and sustainable use of natural
resources, and the provision of technical support for development of "green" business; (iii) strengthening
monitoring programs for water quality, biodiversity, socio-economic indicators, and health risks within the
protected areas, (iv) a public awareness and environmental education program, including a small grant
scheme for activities that promote biodiversity conservation; (v) institutional strengthening for entities
responsible for land/water management to ensure sustainable management of the restored sites and
surrounding landscape; and (vii) developing strategic guidelines to support the preparation of a nation-wide
nutrient reduction strategy.
The GEF funds will finance consultancy services for the preparation of nutrient reduction strategy
guidelines, development of the contingency relief and farmer transition support funds; study tours and field
visits to exchange experiences in protected areas and wetlands management and sustainable development;
formal training courses on wetlands restoration and management, protected areas management, and
sustainable use of natural resources; equipment needs for the operation and maintenance of the restored
wetlands and the two park administrations; civil works for the construction or rehabilitation of the park
infrastructure (administration and visitor center(s), trails, interpretation points); the demarcation of park
boundaries; and the organization of field visits to disseminate project progress. In addition, the GEF will
capitalize the small grant scheme for biodiversity conservation, and the contingency relief and the farmer
transition support funds.
A parallel project (entitled Integrated Management Planning and Administrative Capacity Building for
Protected Wetlands Areas) to be financed by EU PHARE through its National Environmental Program and
the Government of Bulgaria (thereafter the PHARE project), will provide technical assistance for the
elaboration of protected areas management plans in Persina Nature Park (PNP) and Kalimok/Brushlen
Protected Site (KBPS), the environmental education program, and the strengthening of institutions relevant
to protected areas and wetlands restoration. In addition, the PHARE project will finance consultant
services for the design and supervision of the monitoring system as well as the training of Bulgarian
technicians to use it; training of protected areas administration staff, local authorities, local communities,
and NGOs on issues relevant to protected areas management; elaboration of operational rules, procedures
and fund-raising plans for the park administrations; elaboration of sustainable natural resources use
programs. As part of this project, the Ministry of Environment and Water will finance the supply and
installation of the equipment needed for the monitoring system.
The Austrian Government, through the Ministry of Foreign Affairs, will provide financial support to the
Russe Business Support Center (BSC) for Small and Medium Enterprises to support the development of
green-business proposals compatible with sustainable use of natural resources and biodiversity
- 10 -
conservation. The BSC with its two information centers in the project sites will target its support to rural
and urban clients located within the boundaries of the protected areas. The Austrian Government will
finance consultancy services to carry out feasibility studies of "green business" concepts and ideas. In
addition to advice on business plan development, three forms of financial support will be provided: a
machine leasing fund program, a small loans fund program, and an investment fund program to foster the
development of "green" small- and medium-size enterprises.
Component 3: Project Coordination, Management and Monitoring (Total: US$0.89 million, GEF:
US$0.69 million, GoB: US$0.20 million). This component will support a Project Coordinating Unit
(PCU) within the Ministry of Environment and Water (MoEW) in Sofia with field staff located in Persina
Nature Park and Kalimok/Brushlen Protected Site to coordinate, manage and monitor the activities under
the project. The PCU will have full responsibility for procurement, financial management, and
disbursement related to the activities funded by the GEF grant; financial management reporting of overall
project; monitoring/evaluation and reporting of overall project progress implementation; coordination with
the Russe BSC and the PHARE-Unit within the MoEW responsible for project activities supported through
parallel financing; and coordination with central ministries and their regional and local branches. Two
full-time Local PCU Liaison Officer (to be funded by the project) will facilitate procurement of project
related goods, works and services, coordination, and reporting of project implementation at the local level.
The Local PCU Liaison Officers will provide assistance to the protected areas administrations and will be
hosted within their premises. The project will provide funds to meet salaries and fees of the PCU staff and
technical advisors; incremental operating expenses of the PCU; engage consultants to design and install a
monitoring program for the evaluation of project impacts; engage consultants to carry out impact
evaluation studies over the life of the project; and to finance auditing services over the life of the project.
The project will also provide funds for an initial project launch workshop, followed by two procurement
workshops, and other workshops over the project period.
2. Key policy and institutional reforms supported by the project:
As discussed in the Section B.3, the GoB has made considerable efforts in developing laws and regulations
covering water resources, natural habitats and protection of wild birds, and harmonizing them with EU
directives. The last Regular Report on Bulgaria of the European Commission points to the necessity of
strengthening the efforts for transposition of acquis related to nature protection as well as the need for
concrete implementation measures. Implementation of transposed legislation is considered a very weak
aspect in the approximation process. The Project will assist the GoB to strengthen the administration at the
national, regional and local levels for the practical implementation of transposed EU legislations -- such as
the adaptation of improved institutional structures and procedures, increased management capacity, and the
standardization of monitoring and reporting procedures.
Improved cooperation between relevant agencies and different levels of government in the areas of
planning, programming, monitoring, and control processes is paramount to reaching compliance with the
EU environmental directives. The project will help improve coordination between the central, regional and
local governments, local communities, and municipalities on issues such as land use policy and
development planning; raise inter-sectoral and public awareness about the need to integrate environmental
and socio-economic development objectives; and help develop processes to better involve the public in the
decision-making process related to not only project activities but also sustainable resources management
within the project sites.
3. Benefits and target population:
The proposed project will bring about global, national and local benefits.
- 11 -
At the global level, benefits will accrue through the reduction of transboundary pollution into the Danube
River and the Black Sea. Based on a recent technical assessment of the nutrient trapping capacity of the
wetlands to be restored in Belene Island and Kalimok/Brushlen marshes, between 218-810 tons of nutrients
and 23-37 tons of phosphorous could be reduced annually. This accounts for approximately 5% of
Bulgaria's total nutrient contribution to the Danube. The primary beneficiaries from the demonstration of
nutrient reduction benefits in the Danube are Bulgarians living downstream from the wetlands, other
downstream riparians, and the littoral states of the Black Sea who will benefit from cleaner water.
Significant global biodiversity benefits are also expected. The wetland complexes and related protected
sites are of international importance as a nesting place of the Ferruginous Duck (Aythya nyroca) and
Dalmatian Pelican (Pelecanus crispus). Habitats for migratory birds and a variety of endangered species
will be enhanced and improved. The Project is also expected to have demonstration effects that would in
time allow the restoration and management of additional wetlands along the Danube and Black Sea region.
At the regional level, Bulgaria and other riparian countries will benefit from collaborative efforts to share
experiences on the use of wetlands as nutrient sinks and protected areas and wetlands management, develop
regional natural resources management strategies and regional tourism opportunities, to promote
international and local tourism, and carry out joint training and monitoring program. At the national level,
Bulgaria will benefit from improved ecosystem productivity within PNP and KBPS; improved agricultural
productivity due to better agriculture practices, progress towards compliance with EU directives, and
increased capacity of existing central, regional and municipal institutions to protect and manage the
Danube coastal landscape (protected areas, wetlands/aquatic ecosystems).
At the local level, the main beneficiaries will be communities who will benefit from increased fishery
production, and those downstream from the wetlands who will enjoy cleaner water. Fishing has
traditionally been the mainstaple for communities along the Danube, but the deterioration of water quality
and the destruction of breeding sites for fish has deprived a significant part of the local population from
their main historical source of food and living. Where 60 years ago 5,000 fishermen operated in the areas,
now only 60 remain. The restoration of the wetland sites is expected to increase fish populations and hence
increase local fishermen's incomes. Fish production is estimated to reach between 800-1,000 kg in Belene
Island and 4,500-5,000 kg in the Kalimok marshes, compared to the present situation where these marshes
have virtually no fish fauna. Farmers can also benefit from more efficient agricultural practices, such as
the management of organic waste, improved grazing practices, crop rotation, and the sale of organic
produce. This is turn will translate in income increase. Small- and medium-size entrepreneurs interested in
establishing "green" businesses compatible with biodiversity conservation objectives and sustainable use of
natural resources will be provided with technical and financial support to develop and implement their
ideas, fostering private sector development and creating new job opportunities. Local institutions, namely
protected areas administrations and regional environmental inspectorates, will be strengthened.
The private farmers and rural households in PNP and KBPS are the primary beneficiaries of the project.
However, the proposed project will have larger geographic impacts. It is a demonstration project that may
be replicated in other areas of Bulgaria as well as other Danube/Black Sea riparian countries.
- 12 -
4. Institutional and implementation arrangements:
Project Steering Committee. During Project preparation, the MoEW coordinated the establishment of a
high level Project Steering Committee (PSC), which served as the principal forum for addressing
inter-sectoral issues relevant to project preparation activities. The PSC, which worked well during project
preparation, will continue operating through out project implementation and will be responsible for
providing overall project oversight, advice and a bridge between the various agencies and ministries --
ensuring coherence between the Project and existing/planned activities of the various agencies. The PSC
will also help to resolve any issues which may arise during implementation. The PSC comprises
representatives from the MoEW, MoAF, Ministry of Justice, Ministry of Economy, Ministry of Health,
Ministry of Labor and Social Policy, Ministry of Regional Development and Public Works, municipalities
within project sites, and NGOs. The Minister [or authorized Deputy Minister(s)] of the Ministry of
Environment and Water will continue chairing the PSC, with the PCU serving as Secretariat. The
Government will re-appoint the PSC to review project progress, advise and assist in resolving obstacles to
project implementation.
Local Consultative Councils (CCs) in Persina Nature Park and Kalimok/Brushlen Protected Site.
The Management Concepts for both establishment of the protected areas suggest the establishment of local
Consultative Councils (CCs) at the two protected areas sites to: (i) discuss issues and formulate proposals
concerning the state of the park and its development; (ii) coordinate and ensure the compatibility of the
management plans with regional economic development plans; (iii) ensure the interests of the local
communities are represented during both the planning and implementation of the protected areas
management regimes; (iv) discuss annual plans and accounts about activities of the park administrations
for the implementation of the protected areas management regimes; and (v) assist in searching for funding
sources for financing nature-protection activities compatible with the management regime. Specific
functions will be listed in the Operational Manuals of the CCs. Apart from providing oversight and
reinforce coordination at the local level during the preparation of the protected areas management plans, the
local CCs can also serve as a permanent mechanism for conflict-resolution of natural resource management
issues within the protected area landscape. Studies carried out during the preparation stage suggested the
potential composition of the local CCs: representatives from the regional administrations, the Regional
Forestry Board, the Regional Inspectorates of Environment and Water, municipalities, Forestry Units,
scientific and academic institutions and NGO, unions of land and forest owners, and local media. The
studies also suggested to appoint the Park Director as the chairman of the local CC with the functions to
convene and organize the work of the local CC, to sign proceedings and other documents related to the
work of the local CC, and to implement the local CC recommendations. Although, the PIP describes the
general functions, recommended representation and chairmanship of the CCs, the specific functions will be
listed in the Operational Manual of the CCs. Care should be observed in the final selection of the
chairmanship of the CCs so as to avoid creating conflict of interest situations. The project will support the
establishment of these local CCs at the two project areas to advice the MoEW and the protected areas
management administrations on protected areas management, to improve the usefulness of the investments
and to ensure that local stakeholders opinions and concerns are heard during the management planning and
implementation process. Throughout the Project, the Government will ensure the maintenance of the local
CCs to oversee and reinforce coordination at the local level.
Agreement has been reached on the general functions, recommended representation and chairmanship of the
Consultative Councils that will be established to assist the Persina Nature Park Directorate and the
Kalimok/Brushlen Protected Site Administration, which will become an integral part of the Project
Implementation Plan
- 13 -
Project Coordinating Unit. A Project Preparation Unit (PPU) under the supervision of the MoEW was
established during Project preparation to handle day-to-day coordination and administration of the Project's
preparatory GEF. The PPU is now fully operational and will become the Project Coordinating Unit (PCU)
once the implementation phase begins. The PCU will have a central office in Sofia, two local liaison
officers, and significant physical presence at the two project sites. It will be responsible for overall project
coordination and management, financial management activities as well as for implementation of the
Environmental Management Plan and Process Framework. All financial management, procurement,
disbursement procedures for the proposed activities funded by the GEF grant will be implemented in
accordance with the relevant Bank guidelines. The PCU will also be responsible for establishing and
maintaining a comprehensive Project monitoring and evaluation system during the life of the project. The
monitoring will be based in the significant amounts of baseline data collected and to be collected during the
preparatory/implementation phase and will be designed so as to measure project performance against the
intended outcomes of the project -- social economic and ecological. The PCU will comprise a Project
Manager, an Accountant, a Financial Management Specialist, a Procurement Specialist, a Database/GIS
Management Specialist, Technical Experts (on demand), a Grants Program Officer, two local Liaison
Officers, an Administrative/Technical Assistant, and a Driver. The local liaison officers will assist the
Persina Nature Park and Kalimok/Brushlen Protected Site administrations in coordination associated with
project implementation, and in carrying procurement of goods, works and services at the local levels under
the oversight of the Procurement Specialist and in accordance with Bank requirements. The Financial
Management Specialist and the Procurement Specialist will provide training to the staff of the protected
areas management administrations. The procurement and financial management capacity of the two park
administrations will be assessed at the end of first year implementation, and depending on the results of the
assessment, responsibility for small procurement will be transferred to them.
Institutional Arrangements for Project Implementation. In order to ensure project sustainability and
capacity building, the project will be implemented by existing entities acting at the local or regional levels.
An implementation matrix, which clearly identifies functions and responsibilities for project
implementation, has been developed and is included in the Project Implementation Plan (PIP). In brief, the
Persina Nature Park Directorate and Kalimok/Brushlen Protected Site Administration will guide and
coordinate the preparation of the protected areas management planning activities and the public awareness
and education program activities, will manage the Biodiversity Conservation Small Grant Program as per
the operational manual and under the supervision of the PCU, will be responsible for the operation and
maintenance of restored wetlands and related protected sites, in close coordination with the Ministry of
Environment and Water, the Ministry of Agriculture and Forestry, the National Forestry Board, local
municipalities (Nikopol, Belene, Svishtov, Tutrakan, Slivo Pole), the Belene Prison Administration and the
Regional Forestry Boards (Lovech, Veliko Turnovo and Russe). The Regional Inspectorates of Water and
Environment (Pleven and Russe) will be responsible for supervising the design and installation of the
monitoring equipment in close coordination with the protected areas management administrations, the
Regional Hygiene and Epidemiological Inspectorates, and the Regional Directorate of the Ministry of
Agriculture and Forestry, the research institutes of the Academy of Science (Zoological Institute and
Hydrometeorological Institute), the Executive Agency of Environment, the National Center for Health and
Epidemiology, local municipalities and NGOs. The Russe Business Support Center will be responsible for
the implementation of the Eco-Business Development Support program in close coordination with the PCU.
The Ministry of Environment and Water through the PHARE Unit (under the guidance of a Steering
Committee) will be responsible for the procurement, contracting, and disbursement of payments related to
the PHARE supported activities. A contractor to be hired under the project will be responsible for the
administration of the Farmer Transition Support Fund under the close supervision of the PCU/grants
program officer. The Ministry of Environment and Water in close coordination with the Belene Prison
Administration, the protected areas administrations, and the local municipalities will be responsible for the
- 14 -
wetlands restoration component. The Water Department of the MoEW will take the lead in the
coordination of activities towards the development of the national strategic nutrient reduction guidelines.
The MoEW/PCU through the grants program officer and the local liaison officers and in close coordination
with the protected areas administration will be responsible for the implementation of the Contingency Relief
Fund.
Financial Management. The PCU will be responsible for all financial management aspects of the Project.
All financial management and disbursement procedures will be in accordance with the relevant World Bank
guidelines. The Bulgarian Government, through the PCU, will establish and maintain through the life of
the project a project financial management system (FMS) in a format acceptable to the Bank and in
accordance with OP/BP 10.02. Before project appraisal, a World Bank accredited Financial Management
Specialist performed a detailed assessment of the system in accordance with the Bank's OP/BP 10.02 and
the World Bank project financial management requirements. The result of the assessment is that the
Project arrangements met the minimum World Bank financial management requirements. Additional
actions and steps agreed with the Government to strengthen the system have been successfully completed,
with the exception of the appointment of the project auditor and accountant (expected by June 30, 2002).
With regard to financial accounting and reporting, the PCU will keep separate project accounts, by each
financing source and by each project component and activity. The project accounts will then be
consolidated in the accounting records of the MoEW, with the PCU submitting detailed monthly reports to
the MoEW accounting department. The PCU will prepare quarterly Financial Monitoring Reports (FMRs)
in accordance with formats agreed with the Bank during negotiations. The Government expressed its
preference to continue preparing the Project Management Reports (PMRs), which are produced by the
existing software system as the FMRs. The FMRs will be submitted to the World Bank no later than 45
days after each quarter's end. The first quarterly FMRs will be submitted after the end of the quarter in
which disbursements commence. FMRs formats to be used by the Russe BSC and EU PHARE Unit will
also be designed to ensure compatibility with the Project financial requirements. The frequency of
reporting will be on a quarterly basis.
With regard to audit arrangements, the project annual financial statements will be audited each fiscal year
in accordance with Bank guidelines, by independent auditors acceptable to the Bank, based on terms of
reference agreed with the World Bank. Conclusion of a contract with selected auditors, satisfactory to the
Bank, will be a condition of effectiveness in the Grant Agreement. Copies of the audit reports will be
submitted to the Bank within six months after the close of the fiscal year (calendar year). The audit reports
will cover the Project Financial Statements, Special Account, as well as all the Statement of Expenses
(SOEs). The Russe BSC and EU PHARE-Unit will be required to submit copies of the annual audit
reports and supporting documents, which will be reviewed by the Project's auditor.
Disbursements from the Grant be made based on traditional disbursement methods (i.e., from the Special
Account with reimbursements made based on Statements of Expenditures (SOEs) and full documentation,
and direct payments from the Grant Account). The Government, through the MoEW will establish,
maintain and operate, under terms and conditions acceptable to the Bank, a Special Account (SA)
denominated in US Dollars at the Bulgarian National Bank. The PCU will also use local project accounts
for local contributions to the Project.
A detailed description of the financial management and accounting system that will be used for the project
is presented in Annex 6.
Project Monitoring and Evaluation. In order to ensure timely and successful project implementation and
continual feedback to enhance project's impacts, a monitoring and evaluation system will be put in place.
- 15 -
Monitoring and evaluation will be the responsibility of the PCU. Monitoring will be based on the baseline
surveys (i.e., environmental, socio-economic) carried out during project preparation, the feedback from the
monitoring and evaluation system itself, additional surveys to be carried out as part of the baseline studies,
project objectives, intended outcomes, as well as annual impact evaluation studies to be carried out during
the life of the project. A simple management information system for project's monitoring and evaluation
will be designed by the PCU, including reporting formats for both the wetlands restoration and the
protected areas management components and the monitoring indicators listed in Annex 1. Quarterly and
consolidated annual reports including the use of project funds and project impacts will be prepared by the
PCU. Significant supervision by qualified Bank staff will be conducted during the start-up phase. A
mid-term review will be carried out to assess overall project progress, identify lessons learned and
disseminate good practices. This process will be closely coordinated with the review of similar projects in
the Danube and Black Sea Programs to allow for maximum benefits and sharing of knowledge.
D. Project Rationale
1. Project alternatives considered and reasons for rejection:
Pilot project approach. The option of limiting the scope of the project to pilot wetlands restoration for
nutrient trapping was abandoned in favor of a more comprehensive approach in line with the Government
strategy to reduce transboundary nutrient loads, to conserve biodiversity and achieve sustainable rural
development through improved management of natural resources that is socially sustainable. The project
will focus on testing nutrient trapping potential of restored wetlands, supporting critical steps towards
restoration and protection of natural resources, including protected areas management planning,
introduction of improved agriculture practices and support for alternative income generating activities.
This more comprehensive approach provides for long-term sustainability of the project results. Other
existing programs which have the potential to support similar activities (more environment-friendly
agricultural practices and developing alternative income generating activities) currently have such stringent
requirements (e.g., large up-front contribution and land holding size requirements) that the farmers in the
two project sites cannot benefit from them.
Addressing point-source versus non-point source pollution. A second alternative was to focus on
point-source pollution (e.g., waste water treatment and industrial discharge). GEF funds would have
financed the incremental costs of nutrient removal technology if governments were willing to borrow for
baseline costs to the level (at least secondary treatment) where nutrient removal could be added. This
option is unaffordable by the GoB in its current economic situation. Moreover, since more of the nutrient
loads entering into the Danube River are from non-point sources, they can not be addressed through
conventional wastewater treatment plants. The current project offers a relatively low-cost opportunity to
address water pollution and water quality issues for small settlements along the Danube and its tributaries.
Wetland restoration requires significantly lower construction and maintenance costs than wastewater
treatment plans with capacity to reduce concentrations of total nitrogen and total phosphorus, while at the
same time providing a very effective system for of the removal of nutrients from large quantities of water.
The on-going Bank-funded Water Companies Restructuring and Modernization Project in Bulgaria is
facing difficulties to obtain nutrient reduction through it.
Selection of sites. The two restoration sites selected for the initial phase of the Project were carefully
considered in consultation with the MoEW. 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
- 16 -
consultation with the Government and the Danube River Pollution Reduction Program, specific criteria
were established and each wetland site measured against these. Criteria included: nutrient reduction
potential (based on their size and hydrological characteristics), current land use, and demonstration value.
Several promising sites from a biodiversity perspective were not selected for some of the following reasons:
limited nutrient reduction capacity, conflict over land use, or technical implementation difficulties.
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)
Environmental regulations and
Bulgaria: Environmental and
S
S
incentives.
Privatization Support Project
(IBRD Ln. No. 45380).
Water supply and sewerage
Bulgaria: Water Companies
S
S
infrastructure.
Restructuring and
Modernization Project (IBRD
Ln. No. 37390/3739A/3739S).
Environmental regulations.
Bulgaria: Environmental
S
S
Remediation Pilot Project
(IBRD Ln. No. 43210.)
Cadastre and real estate property
Bulgaria: Registration and
S
S
registration systems to improve natural Cadastre Project (IBRD Ln.
resources management.
No.46190).
Protected areas management
Ukraine: Danube Delta
S
S
institutions.
Biodiversity Project (GEF
Grant 28654).
Agriculture credit.
Bulgaria: Rural Finance APL
(FY05 under preparation)
Forestry sector.
Bulgaria: Forestry (FY04 under
preparation).
Development of an efficient and
Bulgaria: Agriculture Sector
S
S
responsive agricultural sector.
Adjustment Loan II (IBRD
Loan No. 46300).
Other development agencies
Create a network of protected areas
Lower Green Danube Corridor
wetlands along the Danube.
Program (WWF).
Support for sustainable management of Joint Action Program for the
ecosystems including wetlands.
Danube River Basin - ICPDR.
Strategy for protection and restoration Floodplain Forest Restoration
of floodplain forests.
on the Bulgarian Danube
Islands, 2000-2001 (WWF).
Implement the national biological
Bulgaria: Biodiversity
biodiversity conservation strategy.
Conservation and Economic
Growth Project (USAID).
IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory)
- 17 -
3. Lessons learned and reflected in the project design:
Experience from wetlands restoration and pollution abatement programs in Europe and around the world
suggest that:
l
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.
l
The rationale, benefits and objectives of the project should be made known to all stakeholders, if not
through active participation, then through effective public awareness programs. The benefits of
sustainable land use need to be demonstrated and the results widely disseminated.
l
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.
l
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.
l
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.
l
Early on, the project needs to focus on activities which promote replication, sustainability and resource
mobilization beyond the life of the project.
l
Continuity in supervision responsibility contributes greatly to the relationship between the Bank and its
client.
World Bank experience with the Bulgaria country portfolio indicates that:
l
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.
l
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.
l
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: (i) continuing
the inclusive and participatory approach; (ii) effectively communicating the purpose and progress of the
program to stakeholders through a public awareness campaign; and (iii) building national and local
capacity for sustainable management of wetlands.
- 18 -
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. In 1999, the MoEW, the MoAF and the Ministry of Regional
Development and Public Works signed a declaration on wetlands in the Bulgarian part of the Danube
Basin, which recognized the importance of the Danubian wetlands as a unique habitat and a valuable
resource under threat, and identified measures were needed for wetland protection and restoration. In June
2000, the Government of Bulgaria signed the Lower Danube Green Corridor Declaration, and committed
itself to establish a corridor of restored and protected wetlands along the Danube. In April 2001, the
Government took an active role in the Danube-Carpathian Heads of State Summit convened by the
Government of Romania, where the Heads of States adopted a Declaration on Environment and Sustainable
Development in the Carpathian and Danube Region. This collaboration continues today with periodic
inter-governmental meetings. Throughout, the MoEW, which represents Bulgaria on the Danube
Commission, has worked closely with World Wildlife Fund for Nature (WWF) Danube-Carpathian Office
(DCPO). Over the past ten years, the WWF-DCPO has assisted the GoB in developing the Bulgarian
wetland protection and restoration program to prepare its wetland restoration program which has, to some
extent, culminated in the declarations mentioned above and the request for the current GEF Project. In
1999, the Bank joined the MoEW and WWF-DCPO to move forward on this 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 has assisted the Government formulate a strategy to comply with EU environment legislation and
to meet the expected high costs. The main issue involves 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 (Agriculture Structural Adjustment Loan, 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.
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, water quality and protected areas management projects related to the Black Sea and Danube
River. Experience garnered through such projects as the Ukraine Danube Biodiversity Project, the
Romania Danube Delta and Georgia Integrated Coastal 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.
- 19 -
E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8)
1. Economic (see Annex 4):
Cost benefit
NPV=US$ million; ERR = % (see Annex 4)
Cost effectiveness
Incremental Cost
Other (specify)
Two economic analyses have been carried out to demonstrate that this project is a worthwhile investment to
be funded by the Global Environmental Facility: (i) an incremental cost analysis, and (ii) a
cost-effectiveness analysis.
The first analysis utilizes the typical incremental cost assessment to demonstrate the project meets the GEF
requirement. The incremental cost of achieving global benefits in this project has been estimated at
US$12.05 million of a total project cost of $13.28 million. This total cost is restricted to those
expenditures directly related to the nutrient reduction program focusing on wetlands restoration and
nutrient-friendly agriculture and supporting protected areas management activities. The Government of
Bulgaria has committed to finance US$2.90 million for the GEF alternative; US$0.15 will be leveraged
from local municipalities and communities; US$1.59 from the EU PHARE national program; US$0.38
million from the Austrian Government; and US$0.76 million from other bilateral donors. The GEF grant
contribution towards the GEF alternative would be US$7.5 million.
The second analysis compares the cost-effectiveness ratios of removing nitrates and phosphorous flowing
into the Black Sea, defined as the ratio of the discounted cost (capital and operation and maintenance costs
discounted at 10 percent) to the discounted volume of nitrogen and phosphorous (also discounted at 10
percent) removed during the life of the project (a conservative value of 12 years has been assumed), with
those ratios used in the benefit-cost analysis of the Danube/Black Sea Strategic Partnership, which were
defined on the basis of international benchmarks. The estimates of the cost-effectiveness ratios are
presented in the table below. The cost-effectiveness ratios, based on the assumptions presented in Annex 4,
were found in the order of US$1.3 - 5.0 per kilogram of nitrogen removed and US$28.9 - 46.2 per kilogram
of phosphorous removed. Since the costs per kilogram of nutrients removed for this project are expected to
be lower than those acceptable under the Strategic Partnership, it is safe to say that the restoration of
Belene Island and Kalimok marshes will be highly cost-effective for nitrogen and phosphorous reduction
into the Black Sea.
Item
Wetlands Restoration a
Partnership b
Annual volume of nitrogen (N) removed (kg/year)
241,400 - 850,400
Annual volume of phosphorous (P) removed (kg/year) 23,400 - 37,400
Total capital costs (US$ million)
4.53
Annual operation and maintenance cost (US$)
60,000
Net present value of costs at 10% (US$ million)
5.0
Cost-effectiveness
- Nitrogen removed (US$/kg)
1.3 - 5.7
5.8 - 8.75
- Phosphorous removed (US$/kg)
26.1 - 53.8
58.00 - 88.0
- 20 -
Notes:
a. A general estimation of nitrogen and phosphorous retention in wetlands based on extensive literature
research, carried out during the preparatory phase. The monitoring component of the project is
particularly important since the monitoring information gathered will serve as one of main sources of
data to derive an exact measure of nutrient retention in restored wetlands. Total capital costs include
all restoration work and estimated losses resulting from indirect flooding.
b. The ratios presented in the "Strategic Partnership for Nutrient Reduction in the Danube River Basin
and Black Sea - Benefit-Cost Analysis, prepared by Tijen Arin (Consultant, ECSSD), only include
annualized capital cost. Inclusion of annual operation and maintenance costs would increase these
ratios.
It should also be noticed that the leveraging ratio for this project on the basis of the firmed co-financing
(i.e., Government of Bulgaria, Austria Government and EU PHARE) is about 1.0:0.67 (i.e., for every US
dollar provided by GEF, 67 US cents have been leveraged from other sources). Thus, the project meets the
minimum Danube/Black Sea Strategic Partnership leveraging requirement for wetlands restoration projects
set at 1.0:0.5.
2. Financial (see Annex 4 and Annex 5):
NPV=US$ million; FRR = % (see Annex 4)
No detailed financial analysis was undertaken since the WRPRP is a non-revenue generating project. The
objective of the project of removing nutrients flowing into the Bank Sea may not be achieved if the
Government of Bulgaria does not commit adequate resources for the operation and maintenance of the
restored wetlands as well as for the operation and maintenance of the monitoring system. The Government
has committed during negotiations to provide adequate funds to cover estimated recurrent expenditures on
an increasing basis. The project, in turn, will contribute to cover recurrent expenditures for 5 years on a
declining basis. As shown below, the Government budgetary contribution to the project is not expected to
significantly exceed current budgetary allocations to the sector.
The proposed project will be co-financed on a parallel financing basis by the EU PHARE national program
and a grant from the Government of Austria. There is still a financing gap of about US$0.8 million to cover
the cost of the activities planned under the restoration of additional sites sub-component. The MoEW is
seeking co-financing from other donors.
Fiscal Impact:
Total government financing during the project implementation period is estimated at US$2.90 million --
US$1.69 million represents taxes, about US$0.99 million represents Government contribution for the EU
PHARE project, and US$230,000 represents government counterpart funds (in cash) for the GEF grant.
The Government has committed to provide counterpart funds in its budget. Of the total project cost
(US$13.28 million), about 3.6 percent represents recurrent costs for the monitoring system, management of
restored wetlands and protected areas management administrations. The annualized recurrent costs have
been estimated at around US$100,000, inclusive of taxes. These costs will be financed by the project on a
declining basis: 90 percent first year, 85 percent second year, 75 percent third year, 50 percent fourth year,
and 25 percent fifth year. The annual net fiscal impact of the project is expected to be as follows: during
CY02 around 0.00004% of GDP, CY03 around 0.0025% of GDP, CY04 around 0.0026% of GDP, CY05
around 0.0026% of GDP, CY06 around 0.0005% of GDP, and CY07 onwards about 0.0006% of GDP.
3. Technical:
During the preparatory phase, a technical assessment at the pre-feasibility level for the restoration of the
- 21 -
two already identified sites was carried out. The assessment found that the restoration of 1,290 hectares of
former marshes in Belene Island and 1,050 hectares of former marshes in Kalimok is technically feasible
and that private land will not be directly impacted by the restoration and management of wetlands.
Emphasis was placed on ensuring that the restoration of wetlands can be met under the current hydrological
regime in the Danube river, and that the proposed restoration measures indeed maximize the water flow
through the system in order to optimize nutrient trapping, promote biodiversity restoration, and increase
fish production. Restoration to former natural dynamic wetland system conditions is not feasible because
the hydrological regime of the Danube (in terms of river flows and water levels) has changed considerably
over the past 30 years as a result of the construction of the Iron Gate Dams I and II and the lower average
annual precipitation since 1970 than in the period 1900-1970. The project involves the intake of about 10
cubic meters per second, which is a fraction of a percent of the minimum flow of the Danube (0.4%), and
the return of 8 cubic meters per second of water of improved quality. The maximum evapo-transpiration
rate from the restored wetlands is estimated at 2 cubic meters per second during the summer months.
Before the project moves into the implementation stage, the PCU with the support of consultants will carry
out additional modelling work in order to address several shortfalls identified in the review of the water
balance model developed during the preparatory phase, namely, no inclusion of the infiltration of surface
inflow from the Danube River through the dikes, limited assessment of rising of groundwater tables in the
floodplain, and limited assessment of the potential impacts of the proposed selected restoration scenarios on
the surrounding agriculture lands currently under production and the existing drainage and irrigation
infrastructure and drinking water wells. The improved water balance model will allow a better
understanding of the quantitative effects of the proposed infrastructure measures in the project area as well
as of the functioning of the restored wetlands.
Feasibility and detailed design of control structures will be done in the course of project implementation
following detailed field surveys and investigations, for which provisions have been made under the project.
The detailed design for the restoration of Belene and Kalimok marshes will observe the following
conditions: (i) at Belene, the maximum flooding level to be achieved in wetland would be 20 meter and at
Kalimok 14 meters; (ii) flooding levels in the wetlands would not adversely affect private or state land to
remain under agriculture production; (iii) necessary margins of safety would be included in the
infrastructure design to comply with international and Bulgarian standards; (iv) inlet and outlet structures
would be easily accessible and operated manually; (v) all structures would be designed to protect or be
protected against undesirable erosion and excessive sedimentation deposition; (vi) dike crests would be used
as access roads; and (vii) access to the Danube would be provided at few strategic points. Project
implementation would need to be approached with a reasonable level of flexibility given the uncertainty
associated with cost estimates.
Estimation of the nutrient reduction potential was carried out on the basis of international experience in
other regions and extensive literature research, with data adapted to the size and general characteristics of
the selected restoration sites (e.g., permanent water bodies, water depth, timing of flooding, vegetation) and
local experience in Lake Srebarna ecosystems, a wetland on the right bank of the Danube. Experience in
Denmark and Sweden achieved annual reductions of 400 kilogram per hectare of nitrogen and 40 kilograms
per hectare of phosphorous. In the case of Bulgaria, expected annual nutrient reduction, as shown in tables
below, ranges between 218,000 - 813,000 kilograms of nitrogen and 23,400-37,400 kilogram of
phosphorous, i.e., 93-347 kilogram per hectare per year of nitrogen and 10-26 kilogram per hectare of
phosphorous.
- 22 -
Habitat in Belene
Total Area (ha)
Nitrogen (kg)
Phosphorous (kg)
Reed/lesser reed mace
211
32,000 41,000
1,700 2,300
community a
Flooded forests
223
8,900 13,000
1,300 1,600
Flooded meadow
271
30,000 51,000
1,900 4,000
Area with
353
3,500 20,4000
active denitrification
Total
74,000-310,000
7,800-12,000
Habitat in Kalimok
Total Area (ha)
Nitrogen (kg)
Phosphorous (kg)
Reed/lesser reed mace
420
63,000 81,000
3,400 4,600
community a
Flooded forests
130
5,200 7,800
740 - 910
Flooded meadow
650
71,000 124,000
5,000 10,600
Area with
500
5,000 290,000
active denitrification
Total
144,000 503,000
15,600 25,400
Note:
a. Wetland plants, such as reeds, filter nutrients and other pollutants and precipitate them from the water,
transfer atmospheric oxygen down to the root zone creating aerobic and anaerobic soil conditions, and
assimilating, processing and storing nutrients. While nitrogen is removed through nitrification and
denitrification in the oxygenated and anoxic areas of the roots, phosphates are mostly absorbed by the
roots. Nutrients are not only stored in the reeds, but are degraded into harmless components.
4. Institutional:
While the MoEW is the lead implementation agency, the active participation of several other Ministries,
agencies, local government, NGOs and scientists will be critical to its success. Thus, the role, composition
and mandate of the Project Steering Committee (PSC) is extremely important (see section C.4).
The management of wetlands, natural resources and protected areas is responsibility of the Ministry of
Environment and Water and the Ministry of Agriculture and Forestry. Staff from these two organizations
are well educated, technically trained, and highly committed to their jobs. Although no major issue is
foreseen with regard to their capacity to implement the project, some of the local implementing agencies
face limited operational budgets, skills on wetlands management and public education / involvement, and
exposure to international experience -- particularly the protected areas park administrations. The project
fills these gaps by creating an enabling environment for the Government and local administrations to ensure
proper operation and management of the restored wetlands and protected areas thereafter. The project
builds staff skills needed to achieve project objectives, and promotes collaboration and partnerships on
wetlands and protected areas management with colleagues and organizations elsewhere in central and
western Europe. As the management of the Kalimok/Brushlen Protected Site will be done by a new and
innovative structure -- a non-profit Association to be legally established by October 31, 2002 -- there will
be a close supervision by the MoEW staff as well as Bank supervision missions.
4.1 Executing agencies:
The Ministry of Environment and Water will be the line Ministry with overall responsibility of project
- 23 -
implementation, and will work in close coordination with other stakeholder agencies and beneficiary
groups. Project activities will be implemented by existing entities at the local or regional levels, assisted by
the central ministries in Sofia as needed.
4.2 Project management:
The Project Steering Committee has been established for the preparatory phase and will continue
functioning during project implementation and will be maintained throughout the project with composition
and functions satisfactory to the Bank. (Terms of reference of the PSC are included in the Project
Implementation Plan). The Steering Committee will be chaired by the Minister (or authorized Deputy
Minister) of the Ministry of Environment and Water. Project coordination, management, and monitoring
will be handled by a Project Coordination Unit (PCU), with a central office in Sofia, two local liaison
officers, and significant physical presence at the two project sites. The PCU will be responsible for overall
project coordination and management, financial management activities as well as for implementation of the
Environmental Management Plan and Process Framework. All financial management, procurement,
disbursement procedures for the proposed activities funded by the GEF grant will be implemented in
accordance with the relevant Bank guidelines. The PCU will also be responsible for establishing and
maintaining a comprehensive Project monitoring and evaluation system during the life of the project. The
current Project Preparation Unit (PPU), established under the MoEW for the preparatory phase, will evolve
into the PCU following Board presentation. The current staff of PPU (a Project Manager, Procurement
Specialist, Financial Management Specialist, and Database Management Specialist) are adequately familiar
with Bank procurement, disbursement, and financial management requirements. After project
effectiveness, additional PCU staff such as Local Liaison Officers, Grants Program Officer, technical
assistant, and driver will be recruited, and technical advisors will be appointed.
4.3 Procurement issues:
An ongoing Joint Portfolio Review Procurement reveals that the major procurement processing issues
encountered in 2001 mainly take the form of delays in processing procurement actions and securing all the
needed approvals. Generally, PIUs have sufficient knowledge and capacity for handling procurement under
World Bank guidelines and procedures. However, this knowledge needs to be matched by equal
understanding of the process by those in the respective line ministries who have decision-making and
approval responsibilities.
An assessment of the capacity of the PPU (future PCU as indicated in section above) to implement the
project procurement plan was carried out in November 2001. A copy of the assessment report is included
in the Project Implementation Plan. The review addressed legal and regulation aspects, procurement cycle
management, organization and functions, support and control systems, record keeping, staffing issues,
general procurement environment, private sector assessment, and made a general risk assessment. The
main findings of the assessment were: (i) the wording of the laws and ordinances is not sufficiently clear
and comprehensive; (ii) the operational rules for various procurement methods are not clearly established
and therefore are subject to interpretation; (iii) although the PCU has acquired good experience in carrying
out Bank-financed procurement, the local staff and the park administrations have no experience; and (iv)
the PCU will operated in a public procurement environment, which is not transparent and competitive.
The assessment also identified that the lengthy contract approval procedures within the Ministry of
Environment and Water jeopardizes conducting procurement in a timely and efficient manner. The
assessment rated the overall project's risk from the point of view of procurement as high. During project
preparation, it was agreed that the following action plan will be implemented to mitigate the risk: (i) the
PCU project manager and procurement specialist would receive procurement training at the ILO, Turin,
- 24 -
Italy, as soon as the Grant becomes effective; (ii) prior to Grant effectiveness and after Board approval, a
three-day procurement launch workshop will be held for the staff involved in implementing the project,
including protected areas management administration and local municipalities; (iii) in order to streamline
contract approval and payment procedures, contact persons will be appointed in the several departments of
the MoEW as well as timely submission of invoices/documentation related to payments made directly by
the MoEW by the accounting department of the MoEW; (iv) prior to Board approval, the Bank staff will
prepare a procurement book containing all procurement related documents, including Standard Bidding
Documents, both in hard and soft copies, and will send it to PCU; (v) one year after Grant effectiveness,
the conduct of procurement under the project will be reviewed in light of the potential procurement risks,
and recommendations made if necessary, to improve the procurement process; and (vi) carry out intensive
supervision during the first three supervision missions. The Government has already taken steps to put in
place a computerized procurement monitoring system, which was identified during the assessment as a
Board condition.
4.4 Financial management issues:
The first Country Financial Assessment Audit for Bulgaria will be carried out after 2002. When finalized,
the document will present in detail the financial management risks for the country and the implications for
the World Bank operations. From the financial management perspective, the Project is considered a
substantial-risk operation and major risks in the financial management area are presented below:
Country generic risks. The main county financial management generic issues and risks are as follows: (i)
there have been some reforms in the public sector financial management of Bulgaria; (ii) the banking sector
system risk is perceived as relatively low; (iii) the accounting standards have been modified to adhere
closely to International Accounting Standards (IAS); (iv) the macroeconomic situation has improved
substantially since 1998, with solid economic growth achieved, inflation has been brought down to single
digits figures, thus it is perceived that the macroeconomic risks are quite low; and (v) the Supreme Audit
Institution (SAI) in Bulgaria is undergoing a reform process that will improve its capacity to carry out an
independent external audit on the Government accounts.
Project specific risks. One substantial risk is that the Project is exposed to delays in payments to
suppliers: (i) due to the signatures required on both GEF Grant funds and Government contribution, and
(ii) inadequate counterpart funds in the Government project account. The signing mechanism proposed for
the operation of the above accounts is acceptable, and since one office of the PCU will be located in Sofia
and within the MoEW, all the signatures required will be obtained in a timely manner. The experience
during the preparatory phase has demonstrated that the signing mechanism does not pose significant delay
risks. On the issue of Government contribution, commitment has been obtained during negotiations that the
Government will provide the needed counterparts funds in a timely manner. The Project will operate under
the following procedures: (i) all payment orders will be signed jointly by the PCU manager and a high level
officer (such as the General Secretary or Chief Accountant of the MoEW); (ii) the beneficiaries'
representatives will certify the acceptance of the works done, goods delivered and services rendered before
the payments are made by the PCU; (iii) segregation of duties amongst PCU staff members; and (iv)
project financial statements will be audited by an external auditor, acceptable to the World Bank. Overall,
the above Project risks are considered manageable due to the various risk mitigations measures proposed
(see details in Annex 6).
Overall, the above mentioned risks are considered as manageable due to the various risk mitigations
measures proposed. Annex 6b presents in detail the full description of the risk mitigation measures.
- 25 -
5. Environmental:
Environmental Category: B (Partial Assessment)
5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (including
consultation and disclosure) and the significant issues and their treatment emerging from this analysis.
The project will finance the restoration of former Danubian marshes, with the major environmental
objective to reduce the amount of nutrients flowing into the Black Sea; making the project environmentally
beneficial. Apart from the earth dykes and drainage channels planned to protect productive agricultural
lands, no new physical structures of significant size will be built and no major adverse environmental
impacts are expected. Given the nature of the restoration work, the project has been classified as
environmental category "B." This classification is consistent with Bulgarian environmental impact
assessment regulations and the requirements of the World Bank outlined in Operational Policy (OP) 4.01
on Environmental Assessment. Consistent with the provisions of OP 4.01 and Bulgarian environmental
legislation -- notably the Protected Areas Act (1998, 1999, 2000), the Regulation No 4/2001 on
Environmental Impact Assessment, the Water Act (1999) -- an Environmental Assessment (EA) was
carried out during the project preparation based on the technical information provided by the Project
Preparation Unit of the MoEW and its consultants. A combination of quantitative and qualitative
assessment techniques (ranging from desk-based analysis, to water and social surveys) have been
undertaken.
The Environmental Assessment describes existing environmental conditions at the two project sites
(including climate, hydrology, soil and water quality, groundwater and biodiversity) and assesses the
potential impacts on these conditions from implementation of the project, during the construction and
operation phases. The Environmental Management Plan (EMP) identifies a number of mitigation and
monitoring activities which will address these potential impacts and therefore provides an adequate
safeguard for the environment. The environmental impact assessment concluded that, provided mitigation
measures described in the EMP are followed, the proposed activities are in compliance with the
environmental requirements of both the Government of Bulgaria and the World Bank with respect to
restoration developments of this nature.
Alternatives: A brief analysis was conducted of several technical alternatives to the proposed restoration
schemes, including the non-restoration alternative. The no-restoration alternative was found to be
nonviable from an environmental point of view. Other technical alternatives were found nonviable due to
technical and/or social aspects.
For Belene Island, five restoration alternatives were assessed. In general, the EA supports the idea of
regulated flood levels in the project area at 20 meters above sea level, as is provided for in Alternative 4 of
the proposed technical alternatives. A higher level (21 m) would provide a much larger wetland area
(2,070 ha, compared to 1,290 ha), but this level would be available for only a few days of the year. The
pumping required to obtain 21 m level would be excessively costly and, in fact, the level would be
extremely difficult to maintain due to the porous nature of the subsoil. The proposed level of flooding of
20 m ensures a flooding duration of 50-60 days annually -- sufficient from an ecological point of view.
Two of the analyzed technical alternatives propose water intakes at the southern part of the Belene island,
but these options were later ruled out due to the potential impact of hot water emissions in the future from
the Belene Nuclear Power Plant, whose construction has been stopped (with no clear plans to start up again
in the near future. Alternatives that propose water intakes at the northern part of the island remain
preferred options. The EA supports the northern alternatives, but with additional internal dykes protecting
agricultural lands to the west of the wetlands. This recommendation will be further evaluated as part of the
detailed technical design, which will evaluate the risk of bogging and salinization of these agricultural
lands, and develop a draining system which will function in the western part of the island (and protect
- 26 -
existing economic activities and existing infrastructure).
Three restoration alternatives were assessed for Kalimok marshes. The EA accepts the recommendation of
flooding to 14 m above the sea level, which would ensure flood durations of 60 days annually. Artificial
maintenance of the level of the marshes by pumping systems (as is proposed for both alternatives) will be
unsustainable. The assessment supports that most of the existing dykes should be kept in their current
position, so that the flooding regime will be mostly controlled by the sluices. The sluices should be
designed taking into account the possibility for migration of fish species from the lower stretch of the
Danube. If needed, they should be equipped with adequate fish ladders.
The EA identified the following potential negative impacts of the project: (i) there is a risk that reduced
pollution and increased fish stocks as a result of wetland restoration activities will not materialized; (ii)
there is risk of indirect flooding and raising groundwater levels on arable and non-arable land, buildings,
irrigation and drainage structures, roads, and other infrastructure; (iii) there is a health risk associated with
the potential increase in mosquito population, malaria risk and fish contamination; and (iv) disposing of
excavated soils. Other issues relate to the impacts on biodiversity, habitats and rare species caused by
contractors during the construction phase.
As part of the environmental assessment process, public consultations were held during the preparation of
the EA with several stakeholders at the local levels in three phases. First, consultation with stakeholders
were organized during the initial stage, which helped identify key social/environmental issues and provided
information on stakeholders' concerns about, and views of, potential environmental impacts. [The same
team that conducted the environmental assessment also conducted the social assessment.] Prior to the
public disclosure of the draft EIA, the second phase of consultation consisted of public meetings at the two
project sites, to share with all interested stakeholders the key findings of the assessment and the proposed
mitigation and management options. Upon public disclosure of the draft final EIA, public hearings were
organized in the two project sites. During the consultation process, local populations did not voice any
major concerns about the project.
5.2 What are the main features of the EMP and are they adequate?
The detailed Environmental Management Plan (EMP), included as an annex in the Project Implementation
Plan, includes monitoring and mitigation activities for two restoration sites at different stages during project
preparation and implementation. The EMP includes: (i) the elaboration of a manual for sustainable
management of the water regimes in the wetlands, such as procedures in the event of accidental pollution,
sharp changes in water levels, floods, consideration of the breeding requirements of fish, birds, provision of
optimal treatment capacity; (ii) removal of top soil before starting civil works; (iii) a specialized study for
evaluation of risk from flooding and negative impact on the ground water; (iv) the elaboration of a
mosquito management plan; (v) the elaboration of environmental management guidelines for constructors;
(vi) the selection of suitable landfills for disposal of waste from the construction phase; (vii) the
establishment of a comprehensive monitoring program for nutrient trapping, groundwater level and quality,
biodiversity, fishery, soil, and mosquito population to measure project impacts on the environment; (viii)
the training of PCU, Regional Environmental Inspectorates, Park Administrations staff on monitoring
program. Implementation of the EMP was discussed and agreed with the Government during negotiations.
It was also agreed during negotiations, that if the halted construction of the nuclear power plant in the
Belene island was to resume in the future or any other development was proposed in the Project area or
surroundings, that such developments would be carried out in accordance with adequate planning,
construction and environmental impact assessment and approval process and procedures, in accordance
with Bulgarian legislation, and safety norms and regulations in force in Bulgaria.
- 27 -
5.3 For Category A and B projects, timeline and status of EA:
Date of receipt of final draft: 02/14/2002
An environmental Assessment (EA) has been carried out and mitigation measures have been proposed to
address possible environmental impacts. The EA reveals that the Project will have positive effects on the
environment. The draft EA report was submitted to the Bank in December 2001. It was reviewed and
commented on by the ECA Safeguard Compliance Unit. The final EA report, which has taken into
account all comments, was submitted to the Bank's Infoshop on February 14, 2002, and the Executive
Summary was sent to the Board of Executive Directors on February 14, 2002.
5.4 How have stakeholders been consulted at the stage of (a) environmental screening and (b) draft EA
report on the environmental impacts and proposed environment management plan? Describe mechanisms
of consultation that were used and which groups were consulted?
As indicated above, local stakeholders were consulted during the EA preparation process. Consultations
were carried with local government organizations, farmers, fishermen, local NGOs working in the project
areas, and potentially affected nearby villages. The Draft EA report prepared in Bulgarian was made
available through local municipalities prior to public hearings organized in Tutrakan and Belene on January
30-21, 2002.
5.5 What mechanisms have been established to monitor and evaluate the impact of the project on the
environment? Do the indicators reflect the objectives and results of the EMP?
The monitoring of the EMP will be the responsibility of the Ministry of Environment and Water through
the PCU. The Regional Environmental Inspectorates will be responsible for monitoring the impacts of the
project. Environmental consultants will help to identify and quantify all environmental indicators early on
during project implementation. The baseline information obtained during the preparation of the EA will be
updated regularly by the PCU in order to assess that the project is fulfilling its requirements according to
the EMP.
6. Social:
6.1 Summarize key social issues relevant to the project objectives, and specify the project's social
development outcomes.
Annex 11 summarizes the results of the Social Assessment, including description of data and methods used,
public attitude towards the project, socioeconomic conditions of the population in the area surrounding the
project, expected project impacts, expected social impacts and mitigation measures, participation activities
and stakeholder analysis.
The socioeconomic assessment was undertaken during project preparation in three stages between July and
November 2001. The first stage consisted of primary and secondary data collection. Two focus group
discussions with 10 participants each were undertaken at Kalimok/Brushlen. Thirty-five in-depth
interviews were undertaken at both sites. This information was used to design a household survey
instrument. Secondary data on the socioeconomic condition of the project area was collected from relevant
government institutions. In the second stage household surveys were undertaken. In Kalimok/Brushlen
Protected Sites (hereafter KBPS) a 1,282 household survey, representative of the population in the
protected area, was completed. In Persina Nature Park (hereafter PNP), a 550 household survey,
representative of the town of Belene, was completed. The third stage consisted of data analysis and
consultations with stakeholders. In particular stakeholders were consulted on project alternatives and then
the social assessment team worked with the Project Preparation Unit to include the results of these
consultations in the project design. The social assessment has had a significant impact on project design.
- 28 -
The socioeconomic assessment reveals that there is an overwhelming expectation of positive impacts from
the project, with more than half of the survey respondents indicating that it would be beneficial for their
region. The benefits people feel will accrue to them include improvement in the water quality of the
Danube, conservation and protection of natural resources, improvement in the natural fishery, and general
economic revitalization from an increased flow of visitors. There will also be direct benefits from the
creation of new jobs associated with the civil works activities, maintenance, guarding and monitoring of the
wetlands and protected sites.
The project may result in some negative impacts on the population. In particular there may be limitations
placed on resource extraction in the protected areas and there may be, at KBPS, indirect impacts on
municipal/private land from wetland restoration although this is not expected. These impacts and how the
project addresses them are discussed in detail in Annex 11. At both sites the population raised the issue
that restoring wetlands will exacerbate mosquito population. While this is not expected to occur, the
environmental management plan has taken this into account and explored options for mitigating this
impact. (Increasing stagnant water surfaces could significantly increase mosquito breeding grounds and
insect populations. Increasing fish, bird and populations of beneficial insects that feed on mosquito larvae
and insects would offset this. Also, cycling water through the wetlands would help limit insect breeding).
Approved mosquito control treatment is an eligible activity to be supported under the Contingency Relief
Fund.
In terms of social development outcome, the project will support the engagement of local communities in
sustainable management and use of natural resources and environmental protection, by promoting
community involvement in the preparation of the protected areas management plans; providing access to
financial resources and technical assistance for supporting environmentally friendly agricultural practices
and piloting eco-business projects; providing small grants for promoting biodiversity conservation.
6.2 Participatory Approach: How are key stakeholders participating in the project?
The project has been developed in a participatory manner and these activities will serve as a template for
implementation (see table below). Key stakeholders consulted during preparation include villagers and
their representatives in local government, Government staff involved in implementing the project, and
environmental Non-Government Organizations. Feedback from stakeholders during these participatory
activities was incorporated into project design.
Stakeholder
Identification and
Implementation
Operation/Maintenance
Preparation
and Monitoring
Beneficiaries, Communities
IS/COM
IS/COM/COL
IS/COM/COL
Groups, and Associations.
Central Government
IS/COM
IS/COM/COL
IS/COM/COL
Regional Government
IS/COM
IS/COM/COL
IS/COM/COL
Local Government
IS/COM
IS/COM/COL
IS/COM/COL
Academy of Sciences
IS/COM
IS/COM/COL
IS/COM/COL
NGOs
IS/CON
IS/COL
IS/COL
EC and other Donors
IS/CON
IS/CON/COL
IS/CON/COL
Legend: IS=Information sharing; COM=Consultation; COL: Collaboration
Villagers will continue to participate in the project throughout implementation, contributing to the
development of protected area management plans and identifying impact mitigation measures. Staff of the
protected areas administrations will participate in implementation and will receive training on methods to
- 29 -
encourage and manage community involvement. Local and national NGOs will be involved in monitoring
implementation.
6.3 How does the project involve consultations or collaboration with NGOs or other civil society
organizations?
The Project has a strong history of active collaboration with NGOs, in particular WWF-DCPO and Green
Balkans, a Bulgarian NGO. In 1997, Green Balkans in cooperation with WWF-DCPO initiated a concept
for the restoration and sustainable use of wetlands in the region. Based on the concept, the Kalimok
marshes were selected as a priority restoration and management site, and highlighted options for
restoration. Later, this initial program was adopted into the Project, and expanded upon. Once full Project
preparation began, the project scope expanded the original request which focussed on wetland restoration to
include broader concepts of sustainable landscape management within the two protected areas. Civil
society organizations and representatives of local communities (e.g. mayors) are currently actively engaged,
and will continue to do so throughout project implementation. For example, the protected areas
administrations will be overseen by an Advisory Committee (Consultative Council); the development of the
management plans is a 2-3 year intensively consultative process.
6.4 What institutional arrangements have been provided to ensure the project achieves its social
development outcomes?
The PCU will ensure full participation of local communities, and villagers in the implementation of the
project. The project, through the Process Framework, which was discussed and agreed with the
Government during negotiations, provides for extensive involvement of local communities in project
implementation.
6.5 How will the project monitor performance in terms of social development outcomes?
The PCU with the support of consultants will annually carry out socio-economic surveys to monitor
progress of the project and measure the impact of project activities against the initial socio-economic
baseline survey carried out during the preparatory phase.
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
No
Natural Habitats (OP 4.04, BP 4.04, GP 4.04)
Yes
No
Forestry (OP 4.36, GP 4.36)
Yes
No
Pest Management (OP 4.09)
Yes
No
Cultural Property (OPN 11.03)
Yes
No
Indigenous Peoples (OD 4.20)
Yes
No
Involuntary Resettlement (OP/BP 4.12)
Yes
No
Safety of Dams (OP 4.37, BP 4.37)
Yes
No
Projects in International Waters (OP 7.50, BP 7.50, GP 7.50)
Yes
No
Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60)*
Yes
No
7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies.
Environmental Assessment: The GEF Grant Agreement will include a covenant calling for the
implementation of the EMP. The Bank will monitor the adherence to the EMP as part of its supervision
activities.
- 30 -
Pest Management: The project will only provide financial support for approved mosquito control
measures, as recommended in the Protected Areas Management Plans.
Involuntary Resettlement: The Project has been and will continue to be specifically designed so that no
involuntary physical displacement or relocation of people will be necessary. Design parameters include
flood elevations that do not encroach on private lands and minimize impacts to groundwater (levels and
quality) and crops as well as road access. The management plans for the protected areas may identify the
need for new zoning and increased enforcement of existing laws within the protected areas to ensure
sustainability of natural resources. The Social Assessment confirms these findings. A Process Framework
(Annex 12) identifies how the Project will ensure compliance with this safeguard policy. The Bank will
also monitor the adherence to Process Framework as part of its supervision activities.
Projects on International Waters: As there will be no net extraction of waters from the Danube, and no
negative impact on water quality (on the contrary, the project is designed to reduce the nutrient loads into
the Black Sea by about 220-810 tons of nitrogen and 24-37 tons of phosphorus per year), OP 7.05 on
Project on International Waters is not triggered. As a good member of the International Commission for
the Protection of the Danube River (ICPDR), and since the Project is part of the Joint Action Program for
the Danube River Basin (January 2001 - December 2005), the Government of Bulgaria has introduced the
Project for discussion and approval by the ICPDR (February 2002). The proposed project together with
other projects for wetlands restoration and floodplain restoration has been approved by the Heads of
delegations. The Heads have also stated their no-objection to the Joint Action Program including the
proposed projects.
F. Sustainability and Risks
1. Sustainability:
The long-term sustainability of project benefits is linked to the adequate management and maintenance of
the restored wetlands and associated protected areas, and adoption of economic activities compatible with
nature conservation and sustainable use of natural resources. Management and maintenance will require
sufficient institutional and financial resources. The project makes provisions for strengthening the capacity
of local and regional implementing institutions as well as local administrations to ensure they acquire the
needed managerial and technical skills and capabilities. A provision is also made to support incremental
operation and maintenance costs of implementing agencies on a declining basis while developing financial
mechanisms to finance protected areas basic maintenance costs. Project sustainability will be enhanced by
actively involving local institutions in project implementation and by supporting the development and
implementation of comprehensive management plans that link wetlands restoration and nature conservation
objectives with sustainable socio-economic development and tangible benefits for the local people. The
project will support for ongoing demonstration of the economic. environmental and social benefits from the
project.
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: (i) lack of serious effort
supported by Black Sea and Danube
from upstream riparian; and
Commissions, GEF Regional projects, and other
(ii) increases in agricultural activity in
donors to decrease nutrient pollution. Strong
- 31 -
Bulgaria as economy improves.
public awareness campaign aimed at informing
local farmers; incentives provided by Farmer
Transition Support Fund; and donor-financed
projects in eco-farming and nutrient friendly
agriculture.
Nutrient stripping potential of wetlands
S
Regardless of the nutrient reduction outcome,
not as great as originally expected.
the project will improve natural habitats for
important biodiversity and has important value
as practical demonstration and experience
gathering. The project includes a comprehensive
nutrient trapping monitoring system as well as
technical assistance to identify the role of
wetlands restoration as a viable measure to
contribute to the reduction of nutrients, and
demonstrate what works and what does not.
Intensive supervision from the Bank, especially
during the first year of project implementation.
Lack of continuing commitment from the
N
Regarded as low because the Government has
Government of Bulgaria to the project.
undertaken significant international
commitments and EU accession requirements.
Continuing dialogue at the regional level on the
benefits of nutrient reduction in the
Danube/Black Sea basins.
From Components to Outputs
Inadequate resources for management and
M
Government and local administrations have
maintenance of restored wetlands and
committed to fund incremental costs on an
associated protected areas.
increasing basis, while the project finances
incremental costs on a declining basis.
Administrations will receive support to develop
fund-raising plans for long-term financial
sustainability.
Inadequate donor co-financing of project
M
Firmed unofficial commitment from EU Phare
activities.
and the Austria Government to support project
activities has already been obtained.
Government commitment to finance the
monitoring program under the EU Phare project
has been confirmed. The project activities to be
supported by project's cofinanciers will not have
a bearing on the activities supported by the GEF
grant, but they are an integral part of the
project.
Lack of commitment of local communities
M
Comprehensive protected areas management
to protected areas regimes.
plans will be prepared following a participatory
planning approach and mechanisms will be
- 32 -
established for stakeholder's consultation.
Strategies will be developed to prepare/train
local population for new job opportunities
arising throughout the project area.
Limited participation and adoption of
M
Financial resources will be made available for
nutrient friendly agriculture practice by
training of farmers and extension officers on
farmers
best agriculture practices and for sharing
experiences with neighboring Romania.
Overall Risk Rating
M
Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk)
3. Possible Controversial Aspects:
The project is not considered controversial, since the proposed project interventions build on international
and regional experience on wetlands restoration and protected areas management, and have the support
from local communities and authorities. One possible controversial aspect, which has been addressed in
project design, is the potential indirect impacts caused by the new flooding regimes in the restored wetlands
and the community perception of restricted access to resources in the protected areas. Both the detailed
design of the restoration work and the development of protected areas management regime will be done in
close consultation with local stakeholders. The participatory planning approach that started during the
preparatory phase will continue during project implementation. Another potential area of controversy is the
proximity of the Belene Nuclear Power plant, whose construction started in the 1980s, to the proposed
wetlands restoration site located in the Belene Island, and the inclusion in the project of some activities to
promote protected areas management in the Persina Nature Park. Commitment from the Government has
been obtained at the time of negotiations that if construction of the Plant is resumed (which is unlikely), the
impacts of the Belene Nuclear Power Plant on the project will be assessed in order to ensure that it will not
adversely affect the benefits expected to be realized by the project. The potential negative impact caused
by the high temperature of the plant wastewater discharge has already been addressed by locating the water
inlets in the northern part of the island.
G. Main Grant Conditions
1. Effectiveness Condition
Conditions for Board Presentation
Provision of evidence satisfactory to the Bank that the current Project Steering Committee (established
for the preparation phase of the project) has adopted the Project implementation arrangements as
described in the Project Implementation Plan.
Agreement has been reached on the general functions, recommended representation and chairmanship
of the Consultative Councils that will be established to assist the Persina Nature Park Directorate and
the Kalimok/Brushlen Protected Site Administration, which will become an integral part of the Project
Implementation Plan.
Written agreement between the Ministry of Environment and Water and the Ministry of Justice for the
restoration work to the carried out in the Belene Island, including the rights of access for project
personnel and contractors, acceptable to the Bank.
- 33 -
Re-appointment of the Project Steering Committee for the implementation phase by an Order of the
Ministry of Environment and Water.
Conditions of Effectiveness
Selection of a project auditor acceptable to the Bank; and
Provision of Legal Opinion from the Ministry of Justice, which will be acceptable to the Bank.
2. Other [classify according to covenant types used in the Legal Agreements.]
Management and Implementation
The Recipient will maintain a Project Coordination Unit (with an office in Sofia, local staff and
considerable physical presence in the project area) under terms of reference and qualifications
satisfactory to the Bank.
The Recipient will maintain a Project Steering Committee with terms of reference satisfactory to the
Bank.
The Recipient will maintain a financial management system acceptable to the Bank and have the
financial records, accounts and financial statements for each fiscal year audited and submit a certified
audit report to the Bank commencing with the accounts for the period ending December 31, 2002
within six months after the end of each calendar year and also at the closing of the project.
Not later than November 30 of each year, the Government will furnish the Bank the annual project
implementation work programs for the project for the next year, including procurement and financing
plans, and will review these plans with the Bank before implementing them.
The Recipient will submit to the Bank, commencing upon Grant effectiveness, quarterly Project
Management Reports, not later that 45 days after the end of each quarter outlining progress made in
the implementation of each project component, as well as the problems encountered and how they are
being addressed.
The Recipient will furnish to the Bank, on or about December 31, 2004, a report on the progress of the
project (incorporating the results of monitoring and evaluation activities) and sets out measures for
achievement of project objectives for rest of Project.
The Recipient will provide the funds, facilities, services, and other resources needed for the Project.
The Recipient will submit to the Bank detailed a operational manual for the administration and
implementation of the small competitive grants program for biodiversity conservation, the farmer
transition support program, and the grants under the contingency relief fund no later than one year after
effectiveness.
The Recipient will implement the Environmental Management Plan as well as the Process Framework.
- 34 -
The Recipient will maintain policies and procedures adequate to monitor and evaluate on an ongoing
basis, in accordance with indicators satisfactory to the Bank, the carrying out of the project and the
achievement of the project's objectives.
The Recipient will prepare, on the basis of guidelines acceptable to the Bank, and furnish to the Bank
not later than six (6) months after the Closing Date or such later date as may be agreed for this purpose
between the Recipient and the Bank, a plan for the future operation of the Project.
H. Readiness for Implementation
1. a) The engineering design documents for the first year's activities are complete and ready for the start
of project implementation.
1. b) Not applicable.
2. The procurement documents for the first year's activities are complete and ready for the start of
project implementation.
3. The Project Implementation Plan has been appraised and found to be realistic and of satisfactory
quality.
4. The following items are lacking and are discussed under loan conditions (Section G):
The following actions also confirm the readiness for implementation of the proposed Project: (i) agreement
has been reached on the draft terms of reference for the detailed engineering design of the restoration work
in Belene Island and Kalimok/Brushlen marshes, and for the protected areas management plans in Persina
Nature Park and Kalimok/Brushlen Protected Site; (ii) detailed cost estimates for all components have been
agreed; (iii) scope of the monitoring program has been agreed; (iv) a draft protocol between the Ministry of
Environment and Water and the Ministry of Justice has been submitted to the Bank for review; (v) a draft
legal agreement for the establishment of the Kalimok/Brushlen Protected Site Non-Profit Association has
been submitted to the Bank for review; (vi) a written agreement between the Belene municipality on the
allocation of land for the Persina Nature Park Directorate and visitor center has already been issued; (vii)
the PCU is already in place and functioning successfully.
I. Compliance with Bank Policies
1. This project complies with all applicable Bank policies.
2. The following exceptions to Bank policies are recommended for approval. The project complies with
all other applicable Bank policies.
Rita E. Cestti
Laura Tuck
Andrew N. Vorkink
Team Leader
Sector Manager/Director
Country Manager/Director
- 35 -
Annex 1: Project Design Summary
BULGARIA: Wetlands Restoration and Pollution Reduction Project
\
Key Performance
Data Collection Strategy
Hierarchy of Objectives
Indicators
Critical Assumptions
Sector-related CAS Goal:
Sector Indicators:
Sector/ country reports:
(from Goal to Bank Mission)
Protecting and enhancing the Acknowledgement that there Danube and Black Sea
Improved natural resources
environment.
is gradual improvement of the Monitoring reports.
management and use
Danube water quality and that
contributes to sustainable
biodiversity conservation
Annual Report on the Status
development and reduction of
objectives are integrated into of the Environment in the
poverty.
regional development plans.
Republic of Bulgaria
(MoEW).
Acknowledgement that
essential functions of
Formal and informal
damaged wetland and
assessment from the donor
protected areas in the
community and NGOs.
floodplain of the Danube
have been restored.
Acknowledgment that
Government personnel
responsible for natural
resources management and
environmental protection are
capable to implement the
Protected Area Management
Law and the Water Law.
.
GEF Operational Program:
International Waters
Increased awareness about
Danube and Black Sea water
Operational Program No. 8, threats to nutrient pollution of quality monitoring reports.
Water-body based Operational transboundary water bodies.
Program: improve water
quality of the Danube and
Increased dialogue and
Black Sea Basin.
support for nutrient reduction
programs.
Operational Program No. 2,
Globally important
Periodic biodiversity
Biodiversity Conservation:
biodiversity conserved and/or monitoring reports.
Improve conservation of
sustainably used.
globally significant
biodiversity in selected
wetland sites through
sustainable management and
use.
- 36 -
Key Performance
Data Collection Strategy
Hierarchy of Objectives
Indicators
Critical Assumptions
Global Objective:
Outcome / Impact
Project reports:
(from Objective to Goal)
Indicators:
Demonstrate and provide for Gradual improvement in
Environment and agriculture Continued commitment from
replication of reduction of
ecosystem health of restored
statistics.
upstream riparian countries to
transboundary nutrient loads wetlands, as measured
water quality improvements in
and other agricultural
through essential ecological
Water quality reports.
the Danube and Black Sea
pollution flowing into the
indicators, i.e., nutrient
Basins.
Danube River and the Black
removal (measured through
Monitoring activities of the
Sea Basins while at the same the percentage reduction in
PCU.
Continued commitment from
time conserving key target
nutrient loads in water in-flow
the Government of Bulgaria
threatened species in the
and out-flows); critical
Project supervision reports.
to natural resources
project areas through
biodiversity habitat
management and environment
wetlands restoration and
(evidenced by increased
Mid-term review report.
policies and programs,
protected areas management species diversity and
including protected areas
programs, and support for
population numbers of key
management and wetlands
stakeholders to adopt
indicator species); critical fish
conservation.
environmentally-friendly
reproduction habitat
economic activities in the two (measured through the
Nutrient-stripping potential of
project areas.
increased fish diversity and
wetlands as good or better
population numbers,
than similar wetlands in other
Project Development
especially those of high
parts of the world.
Objective:
economic value).
Local communities and local
Improved capacity to deal
authorities in the Persina
Establishment of effective
with natural resources
Nature Park and
control structures and
management and protected
Kalimok/Brushlen Protected
monitoring systems; staff
area management will reduce
Site areas adopt sustainable
knowledgeable in their
the threat to globally
natural resources management operations and maintenance.
significant biodiversity.
practices.
Adoption of Protected Areas
Continued land used based on
Management Plans for
protected areas management
Persina Nature Park (21,000
plans developed.
ha) and Kalimok/Brushlen
Protected Site (6,000 ha),
Improved income of local
based on broad stakeholder
population will increase
consensus and support and
support for protected areas
combining socio-economic
and wetlands restoration.
development and conservation
objectives.
Establishment of effective
protected area
administrations, capable of
implementing the Protected
Areas Management Plans in
close collaboration with other
local institutions and
communities.
Establishment of effective,
replicable models of
- 37 -
participatory and integrated
management of wetlands in
areas with mixed land use and
ownership patterns.
Improved agricultural
practices in Persina Nature
Park and Kalimok/Brushlen
Protected Site, resulting in
measurable nutrient
reduction.
Increased local awareness and
support for biodiversity
conservation, marked by the
increased participation of
local communities in
protected areas management
and conservation activities
and increased public
knowledge of the importance
of the restored wetlands and
protected areas ecosystems.
Increased dialogue on
transboundary water quality
and regional natural resources
management issues through
partnerships with Bulgarian
and regional scientific
communities.
- 38 -
Key Performance
Data Collection Strategy
Hierarchy of Objectives
Indicators
Critical Assumptions
Output from each
Output Indicators:
Project reports:
(from Outputs to Objective)
Component:
1.1 Wetland restoration
1.1.1 Detailed design of
Project progress reports by
Wetlands potential as nutrient
investments made in Belene
restoration works completed PCU.
strippers consistent with
Island, Kalimok/Brushlen
by end of 1st year.
estimates.
Marshes and other priority
Project mid-term review and Future investments in
sites restored to promote
1.1.2 Number of ha of
final evaluation.
irrigation and drainage do not
nutrient trapping.
restored wetlands by end of
disrupt restored wetlands; and
3rd year and 5th year.
Project impact studies.
future investments in
agriculture are in compliance
1.1.3 Cost-effectiveness of
Geographic information and
with EU regulations.
nutrient reduction of wetlands remote sensing systems.
restoration relative to other
New flooding regimes caused
measures.
limited or nil collateral
damage to surrounding
agricultural land and private
property.
2.1 Planning capacity for
2.1.1 Protected areas
Management plans available Government and local
protected areas management management plans for two
as a public document from
authorities remain committed
strengthened.
protected areas (Kalimok /
MoEW.
to provide effective operation
Brushlen Protected Site and
and maintenance of
2.2 Key priority protected
Persina Nature Park)
Minutes of workshops or
monitoring systems, assign
areas management activities
developed in a participatory
Memorandums of
and maintain protected area
implemented and natural
manner and adopted by
Understanding between
staff, and provide adequate
habitats improved and
government and local
Bulgarian and Romanian
financial support.
sustainably used by local
communities and authorities.
counterparts for actions to be
communities.
undertaken jointly or in
Economic activities supported
2.1.2 Development of
parallel.
under the Farm Transition
2.3 Comprehensive and
protected areas administration
Fund program contribute to
effective monitoring system
operational rules and
Monitoring and evaluation
long-term sustainability.
compatible with other systems procedures, improved
reports.
in region established.
structures and fund-raising
Wetlands begin to recover and
plans.
World Bank and co-financiers undertake ecological functions
2.4 Awareness and
supervision reports.
quickly so that local
appreciation by local
2.2.1 Critical protected areas
communities can quickly see
communities of wetland and
management activities
World Bank Mid-term review benefits.
protected area functions and
operational within protected
and final evaluation.
their economic value
areas.
Local communities and
enhanced and efficient
authorities remain committed
implementation of small grant 2.2.2 Percentage of farmers
to implement protected areas
program.
that have adopted nutrient
management plans.
friendly agriculture practices.
2.5 Capacity of institutions
Adequate monitoring and
involved in natural resource
2.2.3 Percentage of farmers
evaluation capacity.
management within the two
that have secure access to
protected areas strengthened. Farm Transition Fund.
2.6 Guidelines for nutrient
2.3.1 Monitoring system
reduction on the basis of
designed in accordance with
well-documented case studies agreed protected areas
- 39 -
completed and evaluated for
management plan.
adoption.
2.3.2 Park administrations,
local and regional authorities
trained in operation of
monitoring program.
2.4.1 Completion of
biodiversity conservation
activities supported under the
small grant program
2.4.2 Educational materials
developed and in use in local
schools.
2.4.3 Percentage of
communities reached by
educational program.
2.4.4 Percentage of
communities understand
importance of biodiversity
conservation and wetlands
restoration.
2.5.1 Implementation of
institutional strengthening
activities at least 60% by the
3rd year and 90% by the end
of the 5th year.
2.5.2 Performance standards
for institutions met.
2.6.1 Implemented nutrient
reduction activities properly
evaluated and documented.
3.1 Project management
3.1.1 Staff trained in project Project Implementation Plan. Project Coordinating Unit
capacity within the park
management, financial
receives counterpart funding
administrations and the
management and
Annual work plans and
on time.
Ministry of Environment and procurement.
quarterly progress and
Water improved.
disbursement reports.
Smooth coordination between
3.1.2 Monitoring and
implementing agencies.
evaluation system established Supervision by World Bank
and functioning.
and co-financiers.
Smooth coordination between
line departments.
3.1.3 Inter-ministerial
Project Mid-term review and
committee and local advisory final evaluation.
boards established and
functioning.
- 40 -
Key Performance
Data Collection Strategy
Hierarchy of Objectives
Indicators
Critical Assumptions
Project Components /
Inputs: (budget for each
Project reports:
(from Components to
Sub-components:
component)
Outputs)
Wetlands Restoration.
US$5.02 million
Inputs will be monitored and Central, regional and local
(US$3.43 million GEF)
evaluated through regular
authorities continue
monitoring, evaluation, audit, commitment to restore
procurement and
wetlands and protect and
disbursement reports.
manage designated protected
areas.
Protected Areas Management. US$7.37 million
Local communities participate
(US$3.38 million GEF)
in preparation of protected
areas management plans.
Project Coordination and
US$0.89 million
Counterpart funding is
Management.
(US$0.69 million GEF)
sufficient and timely.
Institutional strengthening
activities can be carried out
within the project timeframe.
Protected areas
administrations are well
staffed.
- 41 -
Annex 2: Detailed Project Description
BULGARIA: Wetlands Restoration and Pollution Reduction Project
Objective
1.
The project development objective is that local communities and local authorities in the Persina
Nature Park and Kalimok/Brushlen Protected Site areas adopt sustainable natural resources management
practices. The project will help demonstrate how environmentally-friendly rural development activities can
improve livelihoods. The global environmental objective is to demonstrate and provide for replication of
reduction of transboundary nutrient loads and other agricultural pollution flowing into the Danube River
and the Black Sea Basins while at the same time conserving key target threatened species in the project
areas through: (i) wetlands restoration and protected areas management programs; and (ii) support for
stakeholders to adopt environmentally-friendly economic activities in the two project areas.
2.
The project will assist the Government of Bulgaria in: (i) the restoration of critical priority
wetlands in the Danube River basin and piloting the use of riparian wetlands as nutrient traps; (ii) the
establishment of comprehensive monitoring systems for water quality and ecosystem health; (iii) support
for protected areas planning in Persina Nature Park and Kalimok/Brushlen Protected Site; (iv)
strengthening capacity to protect and manage biodiversity and natural resources; (v) building public
awareness of sustainable natural resources management and biodiversity conservation; and (vi) promoting
and supporting entrepreneurial and agricultural activities within the project region which ensure the
sustainability of natural resources and are compatible biodiversity conservation objectives. Although the
project only directly addresses the restoration of selected priority wetlands in Bulgaria, these activities will
play a critical demonstration role within the region, promoting nutrient reduction investments in other parts
of Bulgaria and neighboring countries.
By Component:
Project Component 1 - US$5.02 million
Wetlands Restoration
Background
3.
A major report "Evaluation of Wetlands and Floodplain Areas in the Danube River Basin" was
commissioned by the United Nations Development Program (UNDP) and GEF as a part of the Danube
Pollution Reduction Program. This report, published in May 1999, provided the first comprehensive and
systematic evaluation of the existing extent of natural floodplains in this international river basin. The
study found that out of a total historical floodplain area of 41,605 km2 only 7,845 km2 remained a
remarkable loss of over 80%. Based on this evaluation, the report recommended 17 wetland/floodplain sites
for rehabilitation taking into account their ecological importance, their nutrient removal capacity and their
role in flood protection. Only two of the sites fall within the Bulgarian sector, the Belene Island within the
Persina Nature Park and the Kalimok/Brushlen Marshes within the Kalimok/Brushlen Protected Site, and
both have been selected for restoration during the first phase of project implementation. These two sites
border larger potential restoration areas in neighboring Romania. Moreover, the two sites are part of the
"Lower Danube Green Corridor" Initiative launched in June 2000, which aims to establish a network of
fully functioning wetland areas along the Danube in Romania, Bulgaria, Moldova and Ukraine.
4.
While this wetlands restoration component is considered a pilot with important replication value
for other priority areas in the Danube/Black Sea Region, it builds on the ICPDR's Strategic Action Plan
Implementation Program (Danube SIP) for wetland restoration, and the lessons learned from even earlier
- 42 -
restoration programs such as the EU-Phare Multi-Country Program's 1997-1999 support two wetland
restoration projects in the Lower Morava-Dyje river system (Czech Republic, Austria and Slovakia), which
had the objective to reduce environmental pollution and riverine degradation. Recognizing the importance
of these first demonstration projects to other areas of the Danube, documents such as the Dissemination of
Experiences and Results from the PHARE Morava and Dyje Wetlands Rehabilitation Projects and Key
Elements of Successful Wetland Rehabilitation Projects provide important lessons learned, which this
Project has built upon. The WWF-Danube-Carpathian Freshwater Program, which has been active in
these earlier programs, played a critical role in initiating support and technical studies for restoration
activities now supported under the Project.
5.
Belene Island. One of the already identified sites sits within the Persina Nature Park covering
about 22,000 hectares (ha), located along the Svishtov Belene lowlands, comprises five areas: the Belene
Island, other islands and floodplains, the eastern part of the former floodplain mainly under state and
municipal ownership, the western part for the former floodplain mainly under private ownership, and the
hilly landscape of Nikopol. The total population connected to the Persina Nature Park is about 49,970
inhabitants, including the municipalities of Nikopol (Nikopol town with 5,100 inhabitants and Dragash
Voyvoda village with 930 inhabitants), Belene (Belene town with 9,830 inhabitants) and Svishtov (Svishtov
town with 31,800 inhabitants and Oresh village with 2,310 inhabitants). A recent survey in the region has
revealed that approximately 22% of the population is over 60 years old, and 59% of the population is
between the ages of 18 and 60 years. Unemployment reaches approximately 22%. Most of the land in the
area, regardless of ownership, is used for agriculture purposes. Other land uses are forestry and fishery.
Within Persina Nature Park, the project will support the wetland restoration on eastern Belene Island, a 15
km long island, the western portion of which is currently under the jurisdiction of the Ministry of Justice
which operates a prison on this side, while the eastern portion is a managed Nature Reserve under the
jurisdiction of the Ministry of Environment and Water.
6.
Kalimok/Brushlen Marshes. The other identified site, within the Kalimok/Brushlen Protected
Site covering about 6,000 ha, is located 60 kilometers east of Ruse. The total population connected to the
Kalimok/Brushlen Marshes Protected Site is about 23,140, including the municipalities of Slivo Pole
(Ryahovo village with 2,250 inhabitants, Golyamo Vranovo village with 2,190 inhabitants, Bobovo village
with 710 inhabitants and Brushlen village with 560 inhabitants) and Tutrakan (Tzar Samuil village with
1,900 inhabitants, Novo Cherna village with 2,250 inhabitants, Staro Selo village with 1,480 inhabitants,
and Tutrakan town with 11,800 inhabitants). About 50% of the population is between the age of 18 and 60
years. Unemployment is high about 17-32%. As in the case of Persina Nature Park, most of the land is
used for agriculture purposes, and the population is mainly employed in the agriculture sector. Up until the
1950's, the marsh complex was a key part of the region's valuable fish resources. In the 1950's, a dyke
was constructed between Ruse and Tutrakan for agricultural purposes, which cut off fish from their
historical spawning grounds. Fish ponds (encircling 560 ha of state-owned land) were constructed, but
they were declared bankrupt and abandoned after the collapse of the state farming system. Most of the
original marshlands proposed for restoration are state-owned, and have reverted to reed beds. Adjacent
areas are privately and municipality-owned and used for agriculture of varying productivity levels -- while
the western part of the area is mainly in private or local government ownership, the eastern area is mainly
in state ownership.
Description
7.
This is the most innovative component to be included under the project, and if successful, will have
high a replication value throughout Bulgaria and the region. This component expects to restore 2,340 ha of
former marshes in the two already identified sites. Additional sites are expected to be identified and
- 43 -
restored during project implementation. Selection criteria for site selection will include: ecological
potential, floodplain type and with current land use, and nutrient reduction potential.
Proposed Sub-components
Restoration of Belene Island and Kalimok/Brushlen Wetlands (Total: US$5.02 million, GEF: US$3.43
million, Other Donors (TBI): US$0.76 million, GoB: US$0.83 million).
8.
This sub-component expects to restore about 1,290 ha in Belene Island and about 1,050 ha in
Kalimok/Brushlen Marshes. Restored wetlands will only involve state or municipal land. No private land
is expected to be flooded. Existing dykes will be raised or new dykes will be built to protect private
property. This sub-component will support the elaboration of a detailed engineering design and
supervision of civil works. It will also support the construction and rehabilitation of small infrastructure
needed for the restoration of wetlands in Belene Island and Kalimok/Brushlen, including sluices, canals,
protective dykes, access roads, improvement on irrigation/drainage conditions to make equivalent amounts
of state land adjacent to the restoration area available for lease. The terms of reference of the detailed
engineering design include specific language to minimize the impact of restoration on local incomes, and
undertake regular consultation with local stakeholders.
Restoration of Additional Sites (Total: US$0.91 million, Bilateral Donor: US$0.76 million, GoB: 0.15
million)
9.
This sub-component, which focuses specifically on the replication of wetlands restoration activities
in other areas of Bulgaria, is expected to be financed by the donors with interest on environment/water
resource issues. The Government of Bulgaria through the Ministry of Environment and Water is seeking
funding sources. Other than the two sites already selected for restoration under the Project, the Bulgarian
"National Action Plan for the Conservation of the Most Important Wetlands in Bulgaria" (1995) as well as
the UNDP/GEF/WWF "Evaluation of Wetlands and Floodplain Areas in the Danube River Basin" (1999)
have identified other critical wetlands sites in need of restoration and protection based on predominately
their biodiversity value. The Project will assist the GoB to undertake a re-assessment of identified priority
wetlands, using a broader range of criteria developed as "lessons learned" from the preparation phase of the
original two restoration sites, such as nutrient-uptake potential and marginal cost (linking to the Nutrient
Reduction Strategy Guidelines Component) as well as social indicators (current land-use and ownership
patterns). This subcomponent will finance consultant services for additional site identification,
pre-feasibility and feasibility studies, design of restoration activities, and the necessary civil works (and
supervision of their construction).
Project Component 2 - US$7.37 million
Protected Areas Management
Background
10.
Persina Nature Park. The regime of use and management of Persina Nature Park is defined by
the Protected Areas Law, the Ordinance of the Minister of Environment and Water for the designation of
the Nature Park (No. RD 648, dated December 4, 2000), and the Management Plan for the Nature Park.
Many bird species, some of which are threatened on an European, as well as global scale, find nesting,
wintering or migrating habitats in Persina Nature Park. The area boasts of a rich diversity of mammal,
amphibian and especially fish species. There are 21 species of the Red Data Book found in the Belene
Island complex. The site is an important habitat for the White-tailed Eagle and the Lesser Gray Shrike.
- 44 -
The Ferruginous Duck and the Corncrake, two globally threatened species, also breed on the site. Rare
plant species of the Red Data Book, like Water Lily, are present in the site. The Persina Nature Park with
an area of about 22,000 ha includes lands from the areas of Nikopol, Dragash Voyvoda, Belene, Svishtov
and Oresh. Lands administratively belonging to these settlements and within the boundaries of the Nature
Park are not part of it. The designation of the Nature Park does not alter the ownership of forests, lands
and water areas on its territory, but the owners and users are obliged to observe the regime of protection.
The division of responsibilities for the management, security, conservation and restoration of the nature
parks is defined mainly by the Protected Areas Law, the Forests Law and the regulations of the National
Forestry Board for the functioning of the Park Directorates. The Persina Nature Park Directorate was
created on April 1, 2001, by Ordinance No. 258, dated May 10, 2001. It is subordinated directly to the
National Forestry Board under the Ministry of Agriculture and Forestry. At present, the Directorate
includes five staff: a Park Director, a Biodiversity Conservation Expert, a Public Relations and Tourism
Development Expert, a Chief Specialist on Ecological Agriculture, and an Accountant.
11.
Kalimok/Brushlen Protected Site. The regime of use and management of the Kalimok/Brushlen
Protected Site is regulated by the following documents: the Protected Areas Law, the Order of the Minister
of Environment and Water for the designation of the Protected Site (No. RD-451, dated July 4, 2001), and
the Management Plan for the Protected Site. The Kalimok/Brushlen Protected Site with an area of about
6,000 ha, includes lands from the area of the villages of Ryahovo, Golyamo Vranovo, Babovo and
Brushlen in the Municipality of Slivo Pole, as well as Zar Samuil, Nova Cherna, Staro Selo and Tutrakan
in the Municipality of Tutrakan. Lands administratively belonging to these settlements and within the
boundaries of the Protected Site are not part of it. The Kalimok marshes near the town of Tutrakan feature
a rich biological diversity and are declared an Internationally Important Bird Area by Bird Life
International. The site is also an internationally important site for waterfowl of which 30 species are listed
in the Red Data Book. The marshes serve as breeding sites for the Ferruginous Duck and as a resting site
for the Dalmatian Pelican and during the winter for the Pygmy Cormorant and Red Breasted Goose.
Breeding species in this site include Little Bittern, Nigh Heron, Spoonbill and White-tailed Eagle. The
Protected Area covers various landscapes including agricultural lands and allows for a wide range of uses
of these lands. The designation of the protected area does not alter the ownership of lands, forests and
water areas in it, but their owners and users are obliged to observe the adopted regime in order to protect
the habitats of endangered, rare and vulnerable species and communities. The Protected Areas Law
establishes that the owners of land, forest and water areas in the protected areas must realize the
management of the protected areas regime. After consultations among owners of land, forest, and water
areas, local municipalities, and representative of the Ministry of Environment and Water and the Ministry
of Agriculture and Forestry, a decision has been made to establish a Non-Profit Association,
"Kalimok/Brushlen Protected Site Non-Profit Association," to manage the protected site.
12.
Main agriculture Practices. The table below presents the main features of the farming practices in
the project area, including average size of plots:
Item
Government Institutions Agricultural Cooperatives
Private Farmers
Size of plots
4.5 - 59.0 ha
200 - 530 ha
0.8 - 4.0 ha
(3.0 ha average)
Distribution of arable land
- Persina Nature Park
- Kalimok/Brushlen
Cultivates crops
Winter wheat, barley,
Winter wheat, barley,
Winter wheat, barley,
maize, sunflower, millet,
maize, sunflower and
maize, sunflower, and
- 45 -
sorghum and other fodder alfalfa. Crop rotation is
alfalfa.
crops
practiced, and rapeseed,
beans or coriander are
introduced in the rotation.
Secondary crops include
vegetables, orchards,
vineyards and tobacco.
Ownership
Public property of the state State land property given on Private property
lease
Period of use
12 - 40 years
6 - 9 years
1 - 4 years
Description
13.
This component will support the next step towards sustainable restoration and protection of the
two protected sites. This component will support preparation of protected areas management plans as well
as implementation of priority actions within the framework of protected areas management regimes. The
wetlands restoration and management regime of both sites will incorporate the objectives of the local
communities as well as the biodiversity objectives of the nature park and protected site, respectively. This
component will include the following activities: (i) development of protected areas management plans in
each protected area; (ii) implementation of priority protected areas management actions, including
management, operation and maintenance of restored wetlands and associated protected areas, establishment
of a contingency relief fund, establishment of a farmer transition support program, provision of technical
support for development of "green" business; (iii) strengthening monitoring programs within the restored
wetlands systems; (iv) public awareness and education program, which includes a small grant scheme for
activities that promote biodiversity conservation and environmental education program; (v) institutional
strengthening program for entities responsible for land/water management to ensure sustainable
management and use of the restored sites; and (vii) developing strategic guidelines to support preparation of
a nutrient reduction strategic guidelines.
Proposed Sub-components
Protected Areas Management Planning (Total:US$0.72 million, EU PHARE: US$0.65 million,
GoB:US$0.07 million )
14.
The Bulgarian Protected Areas Law stipulates the legal procedures to introduce the Management
Plan for both Persina Nature Park and Kalimok/Brushlen Protected Site. The management plan will
regulate all activities within the designated areas including the demarcation of management zones for
multiple resources use and economic development. The management planning process is expected to cover
a period of two years, with the first year dedicated to fact-finding and establishment of consensus-building
process which will help guide the identification of zones and management protocols. Through a
well-designed participatory process, the management plans aim to gain public acceptance for not only the
natural resource management prescriptions identified in the management plan, but also possible restrictions
to resource use which may be necessary to ensure the long-term sustainability of these resources. The
protected areas management plan will identify not only the appropriate management prescriptions of the
protected areas' biological resources, but also processes by which the park administrations can pro-actively
foster local sustainable socio-economic activities. As part of the management plans, the project will
develop sustainable resources use programs for the pilot protected areas.
- 46 -
Supporting Protected Areas Management Activities
15.
The sub-component will finance implementation of key activities under the framework of protected
areas management:
(a)
Management and Maintenance of Restored Wetlands and Associated Protected Areas
(Total: US$0.57, GEF: US$0.47 million, GoB: US$0.09 million). After the initial
construction, the project will support management and maintenance of the wetlands in
order to optimize nutrient trapping and biodiversity habitat. For the latter, it is expected
that the first years, the restored wetlands will require more intensive management until a
dynamic ecological equilibrium is reached. Intensive management will include: residual
"clean-up" from the initial flood and extensive cutting of the reeds which have
accumulated in the fishponds, controlling natural succession of reeds, avoiding
decomposition of vegetation, ensuring free access of fish to the wetlands, controlling illegal
fishing practices. In subsequent years, management needs will be reduced to cutting off
annual growths, and managing of sluices. The project will also support restoration of
critical associated habitats within protected areas. While the management plan will detail
management regimes to be undertaken by the protected areas administrations, Regional
and State Forestry Boards and Regional Agriculture Offices, and a few activities in
particular for the restoration of critical habitats and natural resources can already be
identified. For example, the Action Plan for the restoration of Danubian island floodplain
forests of Kalimok/Brushlen (managed by the State Forestry Board) will be complete by
Winter 2002. Technical assessments of restoration sites and restoration proscriptions are
ready. The project will also support border demarcation as well as the development of
tourism trials and interpretation points.
(b)
Establishing a Contingency Relief Fund (Total: US$0.54 million, GEF: US$0.41 million,
GoB: US$0.13 million). Wetlands restoration activities may have an indirect effect on
private lands. For example ground water levels may increase on private land adjacent to
the restored area. Wetland restoration may indirectly result in a change in cropping
patterns. Other potential indirect effects include changes in well water quality and road
access to privately held lands. The technical study will identify options that mitigate such
impacts, however, it is recognized there may be unintended indirect effects. Therefore the
project will support the establishment of a Contingency Relief Fund that can be used, if
necessary, to provide relief to households that experience a temporary decrease in income
or quality of life as a result of restoration activities. Permanent relief is provided through
the Farmer Transition Support Fund, which gives priority support to long term solutions
that mitigate the negative indirect impacts of the flooding. The Farmer Transition Support
Fund also provides long term support to ecologically sustainable agricultural activities
which are not only in compliance with incoming environmental regulations for the region,
but also better adapted to wetter soil conditions.
The Contingency Relief Fund is capitalized at a level equal to an estimate of the maximum
potential marginal losses resulting from the restoration activities. On the basis of available
information, potential indirect losses have been estimated at about US$533,500. Expected
value of various types of land and potentially damaged productive resources will be
carefully evaluated once the additional modeling work and field surveys are completed.
- 47 -
Users or private owners of adjacent lands that may be indirectly and/or unplanned
impacted during the restoration of the wetlands in Kalimok/Brushlen Protected Site as well
as private farmers and agriculture cooperatives in the area will be eligible to apply for
small grants from the fund. The Contingency Relief Fund will recognize the applicant as
eligible if it meets certain criteria. Some activities supported by these grants include
agriculture production (e.g., inputs, planting materials, fertilizers, mobile pumps), training,
development of new groundwater wells, mosquito treatment, emergency civil works
interventions, rehabilitation costs for affected premises. These users of the potentially
flooded land that may lose their jobs as a consequence of the restoration activities, will be
eligible for training, logistical support, material support in order to build new skills and
improve their chances to find alternative employment in the project area. The GEF grant
can not be used to pay cash compensation.
Detailed mechanisms for drawing upon this fund, including establishing an expert panel,
developing eligibility criteria, procedures for application and a monitoring system, will be
determined during the first year of project implementation with the participation of local
stakeholders. The Recipient will obtain prior Bank approval before implementation of the
fund. The Project Coordinating Unit through the Grants Program Officer will be
responsible for managing this fund.
The Contingency Relief Fund will be administrated by the PCU. A public information
campaign will disseminate information on the application process once a year. All
applications will be reviewed by a panel including an environmental expert (from a local
NGO), an agricultural economist/engineer expert, and a representative from the Regional
Directorate of the Ministry of Agriculture and Forestry. Once a year, the Expert Panel
will review claims, submitted in a standard format developed and disseminated by the
Project Coordinating Unit. The evaluation will be made on the basis of technical
assessments of the affected area and average harvest over the past three-five years. If
losses claimed can be attributed to wetlands restoration activities, then the applicant will
be awarded grants sufficient to offset the impacts of the losses. The Expert Panel has the
responsibility of deciding, based on the detailed assessment, if the application is accepted
for financing and the amount awarded for the grant. The PCU will obtain prior Bank
approval before the funds are released. Relevant procurement rules and procedures from
the "Good Practices in Procurement, Disbursement and Financial Management for
Competitive Grant Programs in ECA Countries (World Bank, 2002)," will be followed
under this Fund.
A baseline will be conducted in the first and second year of the project to assess the land
that is currently flooded without the restoration works, so as to avoid fraud or abuse. All
the information will be maintained in a GIS database. In addition, a survey on crop
cultivation practices will be conducted during the first year of project implementation.
Crop information to be collected will include: crop type and variety, location and hectare,
type of agriculture practice, intended use of the crop, quantity of harvested production,
reliable crop production records, etc. Detailed mechanisms for drawing upon this fund,
including establishing an expert panel, developing eligibility criteria, procedures for
application and a monitoring system, will be determined during first year of project
implementation with the participation of local stakeholders.
(c)
Establishing a Farmer Transition Support Fund (Total: US$1.25 million, GEF: US$0.92
- 48 -
million, GoB: US$0.21 million, Farmers: US$0.12 million -- in-kind contribution). The
Persina Nature Park and Kalimok/Brushlen Protected Site management plans are expected
to support economic activities compatible with conservation objectives, namely
environmentally-friendly agricultural practices and sustainable use of natural resources,
and limit those that are not. The purpose of this fund is to help individual households,
farmers and partnerships of local stakeholders make the transition from activities that are
not compatible with the new protected areas regime (to be determined in the course of the
preparation of the protected areas management plan). The exact number of farmers that
will be affected and the economic activities needing modification by the new restrictions
and regulations will be determined during the preparation of the management plan. It
should be noted, however, that the new protected areas regime will not require involuntary
physical displacement or relocation of people.
The fund will provide grants to offset the one-time cost to farmers of converting to
compatible activities. Additional financial support for similar activities will be leveraged
from other rural development and environmental programs, i.e., the Special Pre-Accession
Program for Agriculture and Rural Development (SAPARD) Program, the State
Agricultural Fund. An Operational Manual will regulate all procedures related to the
Program, and will determine dissemination and announcement of program, composition of
the evaluation committee, eligibility criteria, procedures for application and a monitoring
system. A Farmer Transition Support Fund Evaluation Committee of technical experts
will be created to ensure fairness and transparency in the application evaluation and
monitoring procedures. The manual will be finalized within the first year of project
implementation with the participation of local stakeholders and will be submitted for the
Bank's approval before implementation. The administration of the grant will be contracted
out. The administrator of the fund will develop and implement training, public awareness,
and extension services (including demonstration sites and disseminating information).
Farmers will be given a menu of options of compatible activities and be encouraged to
apply for this funding. Possible options that could be supported under the fund may
include: (i) livestock waste treatment; (ii) agro-forestry; (iii) low impact agriculture; (iv)
low-till cropping; (v) low input agriculture; (vi) conversion of pastures to grazelands; (vii)
improved pasture management; (viii) enrichment planting; (ix) organic farming; (x) other
cost-saving yield-enhancing agriculture practices; (xi) tourism development and other
alternative economic activities; and (xii) training of local people to benefit from any new
employment opportunity arising throughout the project area.
(d)
Providing Support for Eco-Business Development (Total: US$0.38 million, Austria:
US$0.38 million). The project will provide technical assistance and grant financing to
local communities and individual farmers to: (i) identify existing sources of funds (i.e., EU
programs PHARE, SAPARD, Cross-Border Cooperation, USAID, Swiss bilateral
program, etc.); (ii) develop marketable "eco-friendly" business proposals; (iii) access grant
funds; and (iv) support implementation of a small number of pilot schemes to promote
small-scale environmentally friendly income generating initiatives. The Austrian
Government, through the Ministry of Foreign Affairs, will provide financial support to the
Russe Business Support Center (BSC) for Small and Medium Enterprises, with the
expectation that two branches in the two project sites will be established. This will allow
the Russe BSC to support the development of green-business proposals compatible with
biodiversity conservation. The BSC will target its support to rural and urban clients
located within the boundaries of the two project sites. In addition to advice on business
- 49 -
plan development, three forms of support are expected: a machine leasing fund program, a
small loans fund program, and an investment fund program. In addition, the Austrian
Government will finance consultancy services to carry out feasibility studies of "green
business" concepts and ideas.
Monitoring Program (Total: US$1.00 million, EU PHARE: US$0.17 million, GoB: US$0.83 million)
16.
Through the EU PHARE project, technical assistance support and goods will be provided for the
establishment of a comprehensive monitoring program in each project site to monitor and manage the
ecosystem and biodiversity of the two restored wetlands and protected sites. The program will monitor
quality of Danube water, nutrient trapping within the restored wetlands, surface and groundwater quality
(including drinking and bathing water), groundwater table, meteorological data, sedimentation, biodiversity,
crop yields, soil conditions, and public health risks and impacts. The monitoring system will be
complementary to the one already existing at the Regional Inspectorates of Environment and Water at the
project sites. Mosquito population and cases of malaria will also be monitored under the project. The
project also supports the development of an integrated geographic information/remote sensing system for
assisting the two park administrations and the Ministry of Environment and Water (MoEW) to monitor
progress and performance of the activities implemented under the project. The capacity of the protected
areas administrations and the Ministries of Environment and Water, Agriculture and Forestry, and Health
will be considerably enhanced. To this end, consultant services will be mobilized to provide support in the
detailed design including development of technical specifications and preparation of bidding documents for
the supply and installation of equipment, and on-the-job training. As part of its contribution to the EU
PHARE project, the MoEW will finance the supervision of the installation of the monitoring system and the
procurement of the needed equipment.
17.
During the preparation phase, a system to monitor the nutrient trapping of phosphorous and
nitrogen through different environmental media (soil, water, plants, etc.) of the wetlands to be restored by
the project was designed. Taking into consideration the recent accidents with the Romanian tailing ponds
upstream of the Danube River and the heavily contaminated Timok River with heavy metals from Bor
Mine, monitoring heavy metal concentrations will also be included in the monitoring system. The Project
Implementation Plan provides a description of the monitoring program, including the parameters to be
measured, sampling points and frequency. The proposed water quality monitoring system in the wetlands
areas is compatible with the existing water quality monitoring system used by Bulgaria on the Danube
River. The Regional Inspectorates of Water and Environment (RIEWs) will be responsible to take the lead
in coordinating the work under this sub-component. NGOs, Academy of Sciences, park administration,
Ministry of Health and Ministry of Agriculture and Forestry will provide advice, input and review to the
RIEWs and consultants engaged in the design of the monitoring system.
Public Awareness and Environmental Education (Total: US$1.00 million, EU PHARE: US$0.42 million,
GEF: US$0.20, GoB: US$0.08 million)
18.
The project will enable protected areas administrations and municipalities to undertake a
comprehensive public awareness and environmental education program. GEF funds will be used to support
the establishment of a small grant scheme for biodiversity conservation targeted to local groups. The EU
PHARE project, will finance consultant services to develop and implement a comprehensive Environmental
Education and Public Awareness Program for the two project sites targeted to schools, teachers, hunters,
etc. and to promote the role of wetlands management in reduction of nutrients, conservation of biodiversity
and restoration of fishery resources, which could also be used at the national level, and to foster regional
protected areas and wetlands management cooperation with Romania and other Black Sea/Danube
- 50 -
countries. Dissemination of project activities and benefits will be undertaken at the national and regional
levels in order to achieve replication of project interventions. The project, through GEF funds, will provide
for the organization of regional workshops, field visits by interested parties, training and other activities to
promote replication of project activities in other Danube/Black Sea riparian countries. The UNDP/GEF
Danube and the Black Sea Program provides a framework for dissemination and replication of successful
demonstration to be developed under this project
19.
The biodiversity conservation small grant program will be administrated by the protected areas
administrations supported by the PCU Local Liaison Officer. The Park Administration would: (i) finalize
and disseminate the Biodiversity Conservation Small Grant Program Operational Manual, including
composition of evaluation committee, description, scoring and selection criteria, and call for proposals; (ii)
conduct workshops to disseminate the program; (iii) monitor implementation of individual grants contracts;
(iv) publish annual summaries of the results of the competition, including description of proposals received
and selected, and the basis for the selection; and (v) organize two workshops (in year 2 and 3) to review
results and disseminate lessons learned. Eligibility criteria for individual projects will include direct
support of protected areas management objectives. Activities to be supported by the grant scheme should
be within the two project protected areas. Within the framework of the two Consultative Councils,
advisory committees will be established to oversee the implementation of the small grant scheme.
Nutrient Reduction Strategy Guidelines (Total: US$0.20 million, GEF: US$0.17 million, GoB: US$0.03
million)
20.
As a part of Bulgaria's strategy to meet its international obligations as well as to comply with the
EU Water Framework Directive and the new Water Law, the Government is preparing to establish river
basin authorities. This component will finance consulting services to assist the Government to identify the
role of wetlands restoration as a viable measure to contribute to the reduction of nutrients, to develop a
decision-support system application using Geographic Information System concepts for water quality and
nutrient control, and to draft strategic guidelines to support preparation of a nation-wide nutrient reduction
strategy. This component will also support activities to disseminate project results throughout the Danube
and Black Sea basins.
Strengthening Capacity of Institutions Involved in the Management of Natural Resources within
Protected Areas (Total: US$1.92 million, GEF: US$1.20 million, PHARE: US$0.27 million, GoB:
US$0.41 million, Municipalities: US$0.03 million)
21.
In order to manage the natural resources within the protected areas (including the flooded wetlands)
and promote environmentally-friendly economic development, local and regional institutions will need to be
supported with vehicles, office equipment and training formal education programs, on the job training,
study tours, field visits, seminars, and exchange programs, and minimum incremental operating funds.
Limited civil works activities to renovate existing office buildings will also be supported under the project.
The EU PHARE project will support capacity building activities through development of training modules
for local stakeholders, national study tours for sharing/exchange of experience with other protected areas,
provision of on-the-job training. Incremental staffing will be funded by the Government.
Project Component 3 - US$ 0.89 million
Project Coordination, Management and Monitoring (US$0.89 million, GEF: US$0.69 million, GoB:
US$0.20 million)
22.
This component will support a Project Coordinating Unit (PCU) within the Ministry of
- 51 -
Environment and Water (MoEW) in Sofia with field staff located in Persina Nature Park and
Kalimok/Brushlen Protected Site and with substantial physical presence in the project area to coordinate,
manage and monitor the activities under the project. The PCU will be responsible for procurement,
financial management, and disbursement related to the activities funded by the GEF grant; financial
management reporting of overall project; monitoring/evaluation and reporting of overall progress
implementation; coordination with the Russe BSC and the PHARE-Unit within the MoEW responsible for
the implementation of project activities supported through parallel financing; and coordination with central
ministries and their regional and local branches. Each of the protected areas administrations will be
assisted by a full-time Local PCU Liaison Officer (to be funded by the project) to facilitate procurement of
project related goods, works and services, coordination, and reporting of project implementation. The
Local PCU Liaison Officers will be hosted within the premises of the protected areas administrations. The
PCU through the Grants Officer and consultants will provide assistance to improve local communities
prospects for accessing other grant programs for nature-based business enterprises.
23.
In order to assist the PCU to carry out its responsibilities, the project will provide funds to meet
salaries and fees of the PCU staff and technical experts/advisors (on demand); incremental operating
expenses of the PCU; engage consultants to design and install a monitoring program for the evaluation of
project impacts; engage consultants to carry out impact evaluation studies over the life of the project; and
to finance auditing services over the life of the project. The project will also provide funds for an initial
project launch workshop, followed by two procurement workshops, and other workshops over the project
period. This component will be funded by GEF.
- 52 -
Annex 3: Estimated Project Costs
BULGARIA: Wetlands Restoration and Pollution Reduction Project
Components by Financiers (in US$ '000)
GEF
GoB
PHARE
AUSTRIA
TBI
Municip & Farm
Total
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
A. Wetlands Restoration
1. Restoration of Belene Island and K/B Marshes
3,426
83.3
685
16.7
-
-
-
-
-
-
-
-
4,111
31.0
2. Restoration of Additional Sites
-
-
151
16.7
-
-
-
-
757
83.3
-
-
909
6.8
Subtotal Wetlands Restoration
3,426
68.2
837
16.7
-
-
-
-
757
15.1
-
-
5,020
37.8
B. Protected Areas Management
1. Protected Areas Management Planning
72
10.0
648
90.0
-
-
-
-
-
-
720
5.4
2. Supporting Protected Areas Management Activities
-
-
-
-
-
O&M Restored Wetlands and Related Protected Sites
472
83.3
94
16.7
-
-
-
-
-
-
-
-
567
4.3
Contingency Relief Fund
411
76.1
129
23.9
-
-
-
-
-
-
-
-
541
4.1
Sustainable Use of Natural Resources
-
-
8
10.0
72
90.0
-
-
-
-
-
-
80
0.6
Farmer Transition Support Fund
920
73.9
208
16.7
-
-
-
-
-
-
117
9.4
1,245
9.4
Eco-Business Development Support
-
-
-
-
-
-
381 100.0
-
-
-
-
-
2.9
Subtotal
1,804
64.1
439
15.6
72
2.6
381
13.5
-
-
117
4.2
2,815
21.2
3. Monitoring Program
Design and Supervision of Monitoring System
-
-
19
10.0
175
90.0
-
-
-
-
-
-
194
1.5
Procurement and Installation of Monitoring Systems
-
-
809
100.0
-
-
-
-
-
-
-
-
809
6.1
Subtotal Monitoring Program
-
-
828
82.6
175
17.4
-
-
-
-
-
-
1,004
7.6
4. Public Awareness and Environmental Education
Small Grant Scheme for Biodiversity Conservation
198
83.3
40
16.7
-
-
-
-
-
-
-
-
238
1.8
Environmental Education and Training Program
-
-
46
10.0
418
90.0
-
-
-
-
-
-
465
3.5
Subtotal
198
28.2
86
12.2
418
59.6
-
-
-
-
-
-
702
5.3
5. Nutrient Reduction Strategy Guidelines
167
83.3
33
16.7
-
-
-
-
-
-
-
-
201
1.5
6. Strengthening Implementing Agencies Capacity
a. Support to Institutional Development
Technical Assistance and On-Job Training
-
-
30
10.0
273
90.0
-
-
-
-
-
-
303
2.3
Training Abroad and Study Tours
151 100.0
-
-
-
-
-
-
-
-
-
-
151
1.1
Equipment, Vehicles and Supplies for Park Administration
326
83.3
65
16.7
-
-
-
-
-
-
-
-
392
2.9
Construction/Renovation of Park Administration Buildings
470
79.0
94
15.8
-
-
-
-
-
-
31
5.2
595
4.5
Subtotal Support to Institutional Development
947
65.8
190
13.2
273
18.9
-
-
-
-
31
2.2
1,440
10.8
b. Incremental Operating Expenses
Park Administrations
119
56.1
93
43.9
-
-
-
-
-
-
-
-
211
1.6
Managing Control Structures in Restored Wetlands
65
50.3
64
49.7
-
-
-
-
-
-
-
-
129
1.0
Monitoring System
79
56.1
62
43.9
-
-
-
-
-
-
-
-
141
1.1
Subtotal
262
54.6
219
45.5
-
-
-
-
-
-
-
-
481
3.6
Subtotal
1,209
62.9
408
21.3
273
14.2
-
-
-
-
31
1.6
1,921
14.5
Subtotal Protected Areas Management
3,379
45.9 1,868
25.4
1,587
21.5
381
5.2
-
-
149
2.0
7,363
55.4
C. Project Management
1. Support for Overall Project Coordination and Management
551
76.1
173
23.9
-
-
-
-
-
-
-
-
725
5.5
2. Monitoring and Evaluation
71
83.3
14
16.7
-
-
-
-
-
-
-
-
85
0.6
3. Financial Auditing
73
83.3
15
16.7
-
-
-
-
-
-
-
-
88
0.7
Total Disbursement
Subtotal Project Management
695
77.5
202
22.5
-
-
-
-
-
-
-
-
897
6.8
TOTAL PROJECT COST
7,500
56.5 2,907
21.9
1,587
11.9
381
2.9
757
5.7
149
1.1
13,280 100.0
Disbursement Accounts by Financiers (in US$' 000)
GEF
GoB
PHARE
AUSTRIA
TBI
Munic & Farm
Total
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
1. Works
3,783
71.3 885
16.7
-
-
-
-
639
12.0
-
-
5,307
40.0
2. Land
-
- -
-
-
-
-
-
-
-
31
100.0
31
0.2
3. Goods
482
34.7 905
65.2
-
-
-
-
-
-
-
-
1,387
10.4
4. Consultancy Services
1,243
36.9 440
13.1
1,508
44.8
60
1.8
118
3.5
-
-
3,368
25.4
5. Training and Study Tours
179
65.8
14
5.3
79
28.9
-
-
-
-
-
-
272
2.1
6. Small Grant for Biodiversity Conservation
198
83.3
40
16.7
-
-
-
-
-
-
-
-
238
1.8
7. Contingency Relief Fund
382
75.6 123
24.5
-
-
-
-
-
-
-
-
505
3.8
8. Farmer Transition Support Grant
861
73.3 196
16.7
-
-
-
-
-
-
117
10.0
1,174
8.8
9. Eco-Business Grant
-
- -
-
-
-
321
100.0
-
-
-
-
321
2.4
10. Incremental Operating Costs
372
55.1
304
44.9
-
-
-
-
-
-
-
-
676
5.1
Total
7,500
56.5 2,907
21.9
1,587
11.9
381
2.9
757
5.7
149
1.1 13,280
100.0
- 53 -
Project Components by Year -- Totals Including Contingencies (in US$ '000)
Totals Including Contingencies
2002
2003
2004
2005
2006
2007
Total
A. Wetlands Restoration
1. Restoration of Belene Island and K/B Marshes
217
1,276
1,765
853
-
-
4,111
2. Restoration of Additional Sites
-
9
114
387
399
-
909
Subtotal Wetlands Restoration
217
1,285
1,879
1,240
399
-
5,020
B. Protected Areas Management
1. Protected Areas Management Planning
-
231
245
245
-
-
720
2. Supporting Protected Areas Management Activities
O&M Restored Wetlands and Related Protected Sites
23
82
155
181
126
-
567
Contingency Relief Fund
16
19
145
195
84
82
541
Sustainable Use of Natural Resources
-
26
27
27
-
-
80
Farmer Transition Support Fund
-
177
304
376
388
-
1,245
Eco-Business Development Support
36
93
134
118
-
-
381
Subtotal Supporting Protected Areas Management Activities
75
396
766
898
597
82
2,815
3. Monitoring Program
Design and Supervision of Monitoring System
-
115
39
41
-
-
194
Procurement and Installation of Monitoring Systems
-
259
275
275
-
-
809
Subtotal Monitoring Program
-
374
314
315
-
-
1,004
4. Public Awareness and Environmental Education
Small Grant Scheme for Biodiversity Conservation
-
46
82
85
25
-
238
Environmental Education and Training Program
-
149
158
158
-
-
465
Subtotal Public Awareness and Environmental Education
-
194
240
243
25
-
702
5. Nutrient Reduction Strategy Guidelines
-
-
48
50
51
52
201
6. Strengthening Implementing Agencies Capacity
a. Support to Institutional Development
Technical Assistance and On-Job Training
-
97
103
103
-
-
303
Training Abroad and Study Tours
29
29
30
31
32
-
151
Equipment, Vehicles and Supplies for Park Administration
-
159
164
68
-
-
392
Construction/Renovation of Park Administration Buildings
31
12
169
162
222
-
595
Subtotal Support to Institutional Development
60
297
466
364
254
-
1,440
b. Incremental Operating Expenses
Park Administrations
10
40
41
43
44
34
211
Managing Control Structures in Restored Wetlands
-
-
33
34
35
27
129
Monitoring System
7
27
28
28
29
22
141
Subtotal Incremental Operating Expenses
16
67
102
105
108
83
481
Subtotal Strengthening Implementing Agencies Capacity
76
364
568
469
362
83
1,921
Subtotal Protected Areas Management
151
1,559
2,181
2,219
1,035
217
7,363
C. Project Management
1. Support for Overall Project Coordination and Management
107
124
129
133
137
95
725
2. Monitoring and Evaluation
23
12
12
12
13
13
85
3. Financial Auditing
14
14
14
15
15
16
88
Total PROJECT COSTS
Subtotal Project Management
143
150
156
160
165
123
897
Total PROJECT COSTS
512
2,994
4,216
3,619
1,599
340
13,280
- 54 -
Annex 4: Incremental Costs and Global Environmental Benefits
and Cost-Effectiveness Analysis
BULGARIA: Wetlands Restoration and Pollution Reduction Project
INCREMENTAL COSTS AND GLOBAL ENVIRONMENTAL BENEFITS
Overview
1.
The main objectives of the GEF Alternative are to support local communities and local authorities
in the Persina Nature Park and Kalimok/Brushlen Protected Site areas adopt sustainable natural resources
management practices, demonstrate how environmentally-friendly rural development activities can improve
livelihoods, and demonstrate and provide for replication of reduction of transboundary nutrient loads and
other agricultural pollution flowing into the Danube River and the Black Sea Basins. The GEF Alternative
will assist in: (i) restoration of critical priority wetlands in the Danube River basin and piloting the use of
riparian wetlands as nutrient traps; (ii) establishment of comprehensive monitoring systems for water
quality and ecosystem health; (iii) support for protected areas planning in Persina Nature Park and
Kalimok/Brushlen Protected Site; (iv) strengthening capacity to protect and manage biodiversity and
natural resources; (v) building public awareness of sustainable natural resources management and
biodiversity conservation; and (vi) promoting and supporting entrepreneurial and agricultural activities
within the project region which ensure the sustainability of natural resources and are compatible with
biodiversity conservation objectives. The GEF Alternative intends to achieve these outputs at a total
incremental cost of approximately US$13.28 million, of which a grant of US$7.50 million is requested
from the GEF. The Government of Bulgaria (including farmers and local municipalities) has committed to
financing US$3.05 million of its resources. EU PHARE and the Austrian Government are also expected to
provide support on a parallel financing basis in the amount of $1.97 million to complement GEF funding.
Other donors have been approached to help fill the financial gap in the amount of US$0.76 million.
Context and Broad Development Goals
2.
The natural resources of the Black Sea suffer from eutrophication (i.e. choking and collapse of
food chains due to loss of oxygen), declining water quality, loss of habitat and the introduction of exotic
species due to, inter alia, excessive agricultural run-off within the entire watershed, insufficiently treated
sewage, and inadequate resources management. 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 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 on water quality, natural
habitat, and fish populations on which both biodiversity and human populations depend. The
Danube/Black Sea Basin Partnership Strategy Report outlines the most urgent actions needed to be adopted
by the countries of the region to fulfill their international legal obligations under the Danube and Black Sea
Conventions. It proposes measures to reduce excessive nutrient loads, mostly nitrogen and phosphorus in
the rivers discharging into the Black Sea, particularly into the Danube.
3.
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 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
- 55 -
from non-point sources within the Danube watershed.
4.
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 are former floodplains, covering 1280 square km. Over the years, the wetlands and
floodplain have 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 on 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.
5.
The proposed project sites are among 16 former floodplains with potentially high environmental
benefits recommended for restoration in the GEF-financed Pollution Reduction Program study of the
Danube Commission, based on the sites' ecological potential, floodplain type and width, current land use
and nutrient reduction potential. 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. Bulgaria's National Biodiversity Strategy (1994) identifies the Danube wetland complex
within the project site as the most representative of riverine wetlands and of international importance for
waterfowl habitat. Similarly, the Bulgarian National Plan for the Conservation of the Most Important
Wetlands (1995) considers two of the proposed sites as high priority areas for restoration. Both project
sites Persina Marshes and Kalimok Marshes, are CORINE Biotope Sites and can become part of the
NATURA 2000 network upon EU accession of Bulgaria. 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 formerly for the endangered Dalmatian Pelican (Pelecanus crispus). These water and
terrestrial ecosystems and the flora and fauna within the Project sites are, however, under threat from
disruptions to natural waterflows and poor management of the region's natural resources. Establishing
effective natural resources management and drafting and implementing protected areas management plans
for these areas will be critical to halting these threats to the ecosystem.
7.
The broad development goals of Bulgaria focus on public sector management, private sector
development, social protection and poverty reduction, and environmental protection. 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. The Government of Bulgaria has taken important steps towards
improved environmental management in recent years, including the development of national strategies such
as the Bulgarian National Biodiversity Strategy and the recent Protected Area Law (PAL) and Strategy on
the Protection and Restoration of Floodplain Forests on the Bulgarian Danube Islands, endorsed by the
Ministry of Agriculture and Forests and the Ministry of Environment and Water in September 2001. The
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. With World Bank, GEF and
other donor support, the Government aims to integrate environmental principles into other sectoral policies
and activities, build institutional capacity, and raise public awareness. The country's natural resources will
need to be appropriately managed in order to optimize the commercial, environmental and social benefits
that they can bring.
- 56 -
Baseline Scenario
8.
Up until the 1950's, the marsh complex in Belene/Persina and Kalimok/Brushlen were a key part
of the region's valuable natural resources. The forested Danubian coastal islands and adjacent coastline
were part of the yearly Danubian flood cycle which created critical habitat for birds and fish. By the
1950's, however, for agricultural purposes, a dyke was constructed along the Danubian coast between the
towns of Ruse and Tutrakan. Fish were cut from their historical spawning grounds, and the original
marshlands have been drying up. Fish ponds (encircling 560 ha of state-owned land) were constructed, but
they were declared bankrupt and abandoned after the collapse of the state farming and irrigation systems.
Many of the original marshlands have reverted to reed beds, with open water areas and biodiversity
diminishing every year. Adjacent areas are privately and municipality-owned and used for agriculture of
varying productivity levels. In addition, riverine forests along the coast and on the Danubian islands have
been converted to hybrid poplar plantations with negative environmental consequences and unclear
financial benefit. While the Bulgarian agricultural sector does not currently input heavy nutrient loads into
the Danube/Black Sea basin, signs of a revitalized large-scale dairy and pig-farming without associated
waste management could become a cause of water quality concern. Restoring portions of the original
wetlands and establishing a foundation for sustainable management of natural resources within the
protected areas (which cover a landscape of mixed use and ownership) will be critical to restoring some of
the ecosystem functions and values of the Project region.
9.
Under the Baseline Scenario, it is expected that Government of Bulgaria and local municipal
expenditures related to nutrient reduction and wetland restoration, environmental monitoring and habitat
conservation programs in the project area over the life of the project will be US$0.86 million, mainly
through the Ministry of Environment and Waters and Ministry of Agriculture (State Forestry Board)
annual budgets.
10.
A number of wetland restoration, natural resources management and biodiversity conservation
activities in Bulgaria are being (or will be) financed by other international development agencies or NGOs.
These, plus Government of Bulgaria contributions are summarized in the Incremental Cost Analysis matrix
and are discussed below:
l
Approximately US$2.9 million Phare Integrated Monitoring of the Black Sea Coast will help
monitor Black Sea coastal pollution between Durankulak and Rezovo by strengthening the
capacities of institutions responsible for marine monitoring -- assisting in Bulgaria's overall ability
to assist in the reduction of nutrients in the Black Sea watershed (estimated US$100,000 related to
project objectives and region).
l
International donor and governmental support for the Sreberna Nature Reserve, a wetland site
adjacent to the project area, will be approximately US$300,000 during the life of the Project.
l
The WWF-International Danube-Carpathian Programme Office (DCPO) has prepared a
proposal for GEF MSP (through UNDP) for US$750,000 to prepare the grounds for planned
wetlands restoration and sustainable management projects throughout the Lower Danube, by
building capacities on the ground and developing participatory approaches for these projects'
planning and implementation. If funded, it will also demonstrate how to prepare and integrate local
stakeholder groups for large-scale wetland restoration projects (estimated US$100,000 related to
project region).
l
The PHARE Cross Border Cooperation Program aims to contribute approximately $250,000
- 57 -
for assistance to both Bulgaria and Romania in fulfilling EU environmental requirements,
specifically by preparing a proposal for a Wetland Park in the Bulgarian Silistra District, and
preparing a Joint Control System for Emissions of VOC, PAH and heavy metals from stationary
sources in the Bulgarian - Romanian regions (estimated US$100,000 related to project).
l
The ACCESS Parks in Bulgaria/Partnerships for Europe program can be expected to increase
the capacities of park administrations throughout Bulgaria, help disseminate successful practices,
increase public awareness and strengthen links and cooperation between protected areas and the
local, regional and national authorities. Total project costs are estimated at US$78,000, of which
US$10,000 is estimated to be relevant to the project.
l
The US$54,000 Floodplain Forest Restoration Strategy and Action Plan for the Danube
Islands, under preparation by WWF and the Government of Bulgaria, will establish a basis for
sustainable forestry on the Bulgarian Danube islands, through the analysis of economically viable
and environmentally sound alternatives to poplar plantations, their incorporation into a Floodplain
Forest Restoration Strategy and Action Plan for the Danube islands, and the amendment of the
current local Forestry Plans in the project area. A US$2 million proposal for its implementation
has been fielded.
l
Under the Green Balkans Public Awareness Raising on the Lower Danube Green Corridor in
Bulgaria and Romania, the Danish Outdoor Council has made available US$27,000 for the
preparation of a public awareness campaign for local communities along the Danube about the
ecological importance of and sustainable development opportunities provided by healthy wetlands
and for promoting the Lower Danube Green Corridor initiative as a means to achieving sustainable
wetlands management (estimated US$10,000 relevant to project).
11.
Costs. Total expenditures under the Baseline Scenario are estimated at US$1.23 million including
US$0.86 million from the Government of Bulgaria, and US$0.37 million through international cooperation
(bilateral aid and NGOs).
12.
Benefits. Implementation of the Baseline Scenario will result in limited improvement of nutrient
discharged into the Danube and the Black Sea, limited protection of biodiversity in coastal areas and
limited public awareness of the need for biodiversity conservation. Many of the initiatives listed under the
Baseline Scenario are, however, monitoring, public awareness and planning exercises, with little support
for actual implementation of the physical works required to restore and maintain wetlands and critical
habitats which will ultimately serve to reduce nutrient loads and protect globally significant biodiversity.
Due to the extensive investment needs, existing government and international financing efforts in the
designated areas will most likely not have a significant impact on the continuing damage to these fragile
areas, which are subject to strong succession processes, accelerated by human impacts. Thus, under the
Baseline Scenario, these valuable wetland ecosystems and their essential environmental functions will most
probably be lost completely in the course of the next decade.
Global Environmental Objective
13.
As a consequence of the current course of action, regarded as the Baseline Scenario, the Danube
River/Black Sea corridor will likely continue to lose these wetland systems and the services and habitats
they provide.
14.
Scope. The GEF Alternative would provide the means (above and beyond the Baseline Scenario)
to restore critical wetlands and the riverine landscape in the Danube/Black Sea basin and establish a
- 58 -
foundation for sustainable natural resource use and development within Persina Nature Park and
Kalimok/Brushlen Protected Site. The specific objectives of the Project are to: (i) restore wetlands along
the Danube and Black Sea coasts; (ii) establish and implement natural resources management within the
identified protected areas; (ii) monitor water quality and biodiversity health in the project region; (iii)
strengthen institutions responsible for natural resources within the project region; (iv) raise public
awareness; and (v) develop national nutrient reduction strategy guidelines.
16.
Costs. The total cost of the GEF Alternative estimated at US$13.28 million is detailed as follows:
l
Support for Wetland Restoration: Restoration of Belene Island and Kalimok/Brushlen marshes,
as well as additional sites to be identified during project implementation -- US$5.02 million (GEF
financing $3.43 million);
l
Support for Protected Areas Management: (i) development of protected areas management
plans (US$0.72 million); (ii) implementation of priority protected areas management activities
(US$2.82 million); (iii) monitoring of water quality and ecosystem/habitat health (US$1.00
million); (iv) public awareness and education (US$0.70 million); (v) institutional strengthening
(US$1.92 million) and (vi) guidelines for nutrient reduction programs (US$0.20 million) --
US$7.37 million (GEF financing US$3.38 million).
l
Project Management: Support for operating costs of a Project Management Unit, located with
the Ministry of Environment and Waters (central and regional offices) -- US$0.89 million (GEF
financing US$0.69 million).
17.
Benefits. Implementation of the GEF Alternative would provide the means for restoring high
priority wetlands, protect unique coastal landscapes and habitats for important bird species. Benefits
generated from the project would include those classified as "national" - protection of local and regional
environmental resources and increased public awareness of environmental issues - as well as those
considered "global" in nature. Global benefits would be the reduction of nutrients in inflow waters and the
protection of a rare and unique ecosystem. The GEF grant has helped leverage funds from other donors for
additional activities.
Incremental Costs
18.
The difference between the cost of the Baseline Scenario (US$1.23 million) and the cost of the
GEF Alternative (US$13.28 million) is estimated at US$12.05 million. This represents the incremental
cost for achieving sustainable global environmental benefits. Of this amount, the Government of Bulgaria
(including municipalities) has committed to financing US$3.05 million, US$1.97 million is leveraged from
EU PHARE and the Government of Austria, US$7.5 million is requested from the GEF, and additional
US$0.76 to be leveraged from other donors.
- 59 -
Incremental Cost Matrix
Component Sector
Cost
US$
Domestic Benefits
Global Benefits
Category
Million
Wetland Restoration Baseline
0.05
No restored wetland
for Nutrient
ecosystems. Thus, no
Reduction and
reduction of nutrients in the
Biodiversity Habitat.
Danube River / Black Sea,
and restoration of habitat
limited to the development
of a strategy for native
floodplain forests on
Danubian Islands
(estimated 40,000 ha).
With GEF
5.02
Increased fishery
Restoration of wetland
Alternative
production; improved
ecosystems, with an
water quality downstream
discernible reduction of
project sites; increased
nutrient loads to the Black
opportunities for biomass
Sea (218,000-813,000 kg of
production.
nitrates and 23,400-37,400
kg of phosphorus per year);
restoration of
internationally important
biodiversity habitat.
Incremental 4.97
Benefit
Protected Areas
Baseline
1.18
Limited capacity to plan
Management
and implement protected
Planning and
area management in
Implementation.
wetland and protected
areas; limited public
awareness of
environmental issues and
the need for sustainable
natural resource
management; no
comprehensive strategy for
nutrient reduction in the
nation's waterways; and no
management structure for
Kalimok/Brushlen
Protected Site.
With GEF
7.37
Increased opportunities for Sustainable integrated
- 60 -
Alternative
alternative income
conservation management at
generation in rural
priority sites of
communities based on
internationally important
sustainable management of biological diversity and
land and water resources;
buffer zones; meaningful
increased flow of goods
participation of local
and environmental services; stakeholders in protected
increased capacity to
area management activities;
manage protected areas;
increased awareness and
creation of opportunities
use of biodiversity-friendly
for education and nature
agricultural activities;
oriented tourism; and
increased local, national and
efficient and effective
international understanding
management structure for
of threats to globally
Kalimok/Brushlen
significant biodiversity; and
Protected Site.
a Bulgarian national
strategy for nutrient
reduction in the Danube
River/Black Sea watershed.
Increment
6.19
Project management
Baseline
0.00
Not applicable
and information
dissemination.
With GEF
0.89
Information sharing with
Alternative
other riparian countries.
Increment
0.89
Totals
Baseline
1.23
With GEF
13.28
Alternative
Increment
12.05
- 61 -
COST-EFFECTIVENESS RATIOS
The main assumptions to estimate the cost-effectiveness ratios to remove one kilogram of nitrogen and
phosphorous are presented in the table below.
Nitrogen Phosphorous
Site
Units
Removal
Removal
Belene Island
Restored area: 1290
ha
Removal (kg/y)
74,000
310,000
7,800
12,000
Capital cost:
1.71
US$ M Removal (kg/ha)
57.4
240.3
6.0
9.3
O&M cost:
30000
US$/y
C-E ratio (US$/kg/y)
5.7
1.4
53.8
35.0
K/B Marshes
Restored area: 1050
ha
Removal (kg/y)
144,000
503,000
15,600
25,400
Capital cost:
2.82
US$ M Removal (kg/ha)
137.1
479.0
14.9
24.2
O&M cost:
30000
US$/y
C-E ratio (US$/kg/y)
4.4
1.3
42.5
26.1
Total
Restored area: 2340
ha
Removal (kg/y)
218,000
813,000
23,400
37,400
Capital cost:
4.53
US$ M Removal (kg/ha)
93.2
347.4
10.0
16.0
O&M cost:
60000
US$/y
C-E ratio (US$/kg/y)
5.0
1.3
46.2
28.9
Legend: O&M=Operation and maintenance; y=year; ha=hectare; C-E=Cost-effectiveness; M=million;
N=Nitrogen; P=Phosphorous.
- 62 -
Annex 5: Financial Summary
BULGARIA: Wetlands Restoration and Pollution Reduction Project
IMPLEMENTATION PERIOD
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Total Financing Required
Project Costs
- Investment costs
484
2,891
4,076
3,476
1,452
226
- Recurrent costs
28
103
139
143
148
114
Total Project Costs
512
2,994
4,216
3,619
1,599
340
Total Financing
512
2,994
4,216
3,619
1,599
340
Financing
GEF
369
1,654
2,552
1,820
900
204
Government of Bulgaria
75
667
891
807
331
136
Municipalities and Farmers
31
17
29
35
37
-
EU PHARE
-
555
515
516
-
-
Government of Austria
36
93
134
118
-
-
Others (TBI)
-
7
95
323
332
-
Total Project Financing
512
2,994
4,216
3,619
1,599
340
Notes:
1. EU PHARE and the Austria Government have expressed their strong interest in contributing to overall
project financing, and have made informal commitments for parallel financing support. Other donors are
being contacted to fill the financing gap.
2. Calendar year starts on January 1 and ends on December 31
- 63 -
Annex 6: Procurement and Disbursement Arrangements
BULGARIA: Wetlands Restoration and Pollution Reduction Project
Procurement
1.
Procurement of goods and works financed by the Bank will be done in accordance with World
Bank Guidelines: Procurement under the IBRD Loans and IDA Credits (issued in January 1995, revised in
January and August 1996, September 1997, and January 1999). Consulting services, technical assistance
and training financed by the Bank will be procured in accordance with the Guidelines - Selection and
Employment of Consultants by World Bank Borrowers, issued in January 1997, revised in September 1997
and January 1999. The Bank's Standard Bidding Documents, Request for Proposals and Forms of
Consultants' Contract will be used. A General Procurement Notice (GPN) will be sent for publication in
the UN Development Business by mid April 2002.
Procurement Responsibilities
2.
The Ministry of Environment and Water (MOEW) is the executive agency for this project. Project
coordination and management including procurement will be handled by a Project Coordination Unit
(PCU), with a unit in Sofia and units at each of the two protected areas administrations. In Sofia, the
Project Preparation Unit (PPU) in the Ministry of Environment and Water, which is responsible for
preparing this project, would be renamed as the Project Coordination Unit (PCU). The PPU already
includes a Project Manager, a Procurement Specialist and a Financial Specialist. This core implementation
team has already acquired good experience in project management. Both the project manager and the
procurement specialist have become familiar with the Bank procurement guidelines.
3.
The PCU will have a central office in Sofia, two local liaison officers, and significant physical
presence at the two project sites. The local liaison officers will assist the Persina Nature Park Directorate
and the Kalimok/Brushlen Protected Site Administration in coordination associated with project
implementation, and in carrying procurement of goods, works and services at the local levels under the
oversight of the PCU Procurement Specialist. The local liaison office and the protected areas director
would be trained in procurement. Initially, this training will be given by Bank staff and then by the PCU
Procurement Specialist on a continuous basis. The procurement capacity of the two park administrations
will be assessed at the end of first year implementation, and depending upon the results of the assessment,
responsibility for small procurement will be transferred to them. The PCU Project Manager and the
Procurement Specialist would both undergo in-depth procurement training in ILO Turin, Italy, as soon as
the grant becomes effective.
Procurement Methods (Table A)
4.
The project includes procurement of civil works, goods, consultant services and training. A
detailed procurement plan for these needs has been prepared and included in the Project Implementation
Plan (PIP). During project implementation, the procurement plan will be updated every six months. The
Project procurement arrangements are shown in Table A below.
Procurement of Works
5.
Civil works are intended for wetlands restoration, restoration of priority protected areas,
construction/rehabilitation of park administration and visitor centers, border demarcation, vegetation and
- 64 -
sedimentation management, and tourism trail and interpretation points. The following procurement
methods will be used: (i) International Competitive Bidding (ICB) will be applied to works contracts
estimated to cost US$1,000,000 or more per contract; (ii) National Competitive Bidding (NCB) will be
applied for works contracts estimated to cost below US$1,000,000 per contract; and (iii) Minor Civil
Works (MCW) will be applied to works contracts with an estimated cost below US$50,000 per contract.
6.
NCB would be acceptable subject to the following conditions: a point system of evaluation will not
be used; domestic preference will not be applied; international bidders will not be excluded from bidding;
and the draft NCB bidding documents will be prepared and submitted to the Bank for review and
no-objection before any NCB tender is issued. No bids will be rejected at the bid opening. All bids
submitted on or before the deadline for submission of bids will be opened and read out at public bid
opening; local bidders shall demonstrate availability of obtaining securities and reasonable access to credit;
bid evaluation criteria shall not be pre-disclosed to bidders; and technical specifications must be clearly
written. These conditions were discussed at negotiations and made part of the Grant Agreement. Although
the overall estimated value of restoration works in Belene Island and Kalimok/Brushlen marshes is
estimated at about US$3.2 million, due to restriction access and security reasons in Belene Island, it is
advisable to retain two contracts -- one NCB contract for Belene Island and one ICB contract for
Kalimok/Brushlen -- instead of combining both into one large ICB.
Procurement of Goods and Equipment
7.
Office equipment, vehicles, maintenance equipment for restored wetlands, field equipment and
supplies for park administrations will be procured under the project. The following procurement methods
will be used: (i) International Competitive Bidding (ICB) for goods contracts estimated to cost above
US$100,000 or more per contract; (ii) International Shopping (IS) for goods contracts estimated to cost
less than US$100,000 per contract (IS can be used to procure equipment, material or commodities which
are off the shelf -- the award shall be made on the basis of obtaining and comparing quotations from at
least three suppliers from two countries); (iii) National Shopping (NS) for goods contracts estimated to cost
US$50,000 or less per contract; and (iv) National Shopping for technical services contracts estimated to
cost less than US$100,000 per contract (based on obtaining minimum three quotations from domestic
suppliers).
Procurement of Consulting Services
8.
Consultants' Services will be selected in accordance with the Bank Guidelines issued in January
1997 and revised in 1997 and 1999, and for this project will include Quality and Cost Based Selection
(QCBS), Selection Fixed Budget (SFB), Consultants Qualifications (CQ), Least Cost Selection (LCS), and
individual consultants (IC). QCBS and SFB selections over US$200,000 will be advertised in
Development Business and in a national newspaper for expressions of interest, from which a short list will
be drawn. For contracts estimated to cost less than US$200,000, short lists may be based solely on
national firms. The contract for auditing will be procured following the LCS method. Contracts estimated
at less than US$100,000 each will be procured following the CQ method. Individual consultants will be
selected in accordance with Part V of the Consultants Guidelines. All individual contracts will be
advertised. The aggregate amounts for consultants services are shown in the footnotes to Table A.
9.
Government-owned research institutes and universities willing to participate in procurement of
consultant services financed by the Bank in this project should meet the Bank's eligibility criteria: they
should be financially and legally autonomous and operate under commercial law in Bulgaria. When
research institutes and universities do not meet one of the above criteria, guidelines specified in Office
- 65 -
Memorandum issued on August 19, 1999 should be followed.
Training and Study Tours
10.
A schedule for training activities will be prepared on an biannual basis as part of the annual work
plan process and submitted to the Bank for no-objection.
Competitive Grants
11.
Grants for Biodiversity Conservation Small Grant Program and the Farmer Transition Support
Grant Program will be awarded to project beneficiaries on a competitive basis at each of the project sites.
For the implementation of these grants, Operational Manuals will be adopted (i.e., an Operational Manual
for the Biodiversity Conservation Small Grant Program and an Operation Manual for the Farmer
Transition Support Grant Program). These manuals will include the mechanisms for awarding the grants,
including establishing grant committees, selection process, eligibility criteria, grant agreements, procedures
for application, and monitoring system. These will use the relevant procurement procedures from the
"Good Practices in Procurement, Disbursement, and Financial Management for Competitive Grant
Programs in ECA Countries (World Bank, 2002)". Initial Draft Operational Manuals have been prepared
and will be further advanced prior to project launch with the participation of local stakeholders.
Operational Manuals will be submitted for the Bank's approval before implementation.
Contingency Relief Fund
12.
Those farmers impacted indirectly by new flooding regimes will be entitled to relief grants
sufficient to offset the impacts of the losses. The mechanisms for awarding relief grants will be specified in
an Operational Manual, i.e., the Operational Manual for the Contingency Relief Fund. The Operational
Manual will be prepared within the first year of project implementation and will be submitted for the
Bank's approval. The relevant procurement procedures of the guidelines referred to in paragraph 11 will
also be used in the Operational Manual.
Incremental Operating Costs
13.
The Grant will finance incremental operations costs. These costs will be incurred in accordance to
an annual budget that the PCU will prepare and submit to the Bank for its approval before any
expenditures are incurred.
Bank's Prior Review Thresholds (see Table B)
14.
The Bank's prior review thresholds are as follows: (i) Goods: all ICB, first IS and NS packages;
(ii) Works: all ICB, and first NCB and MCW; (iii) all consultant contracts with consulting firms estimated
to cost US$200,000 or more per contract (Full Review); (iv) all contracts with consulting firms estimated
to cost between US$100,000 and US$200,000 per contract (Partial Review); (v) all consultant contract
with individuals estimated to cost US$25,000 or more per contract; and (vi) contracts less than US$25,000
with individuals; terms of reference.
Post Review
15.
All contracts not subject to the Bank's prior review will be subject to an ex-post review, on a
selective basis. One out of five contracts for goods, works, and consulting services will be subject to an
- 66 -
ex-post review. Supervision missions will include a procurement specialist especially in the first year,
whose main responsibility will be to conduct ex-post reviews of the procurement process and
documentation, and provide his or her findings.
Procurement methods (Table A)
Table A: Project Costs by Procurement Arrangements
(US$ million equivalent)
1
Procurement Method
Expenditure Category
ICB
2
NCB
Other
N.B.F.
Total Cost
1. Works
2.21
1.70
0.59
0.80
5.30
(1.85)
(1.41)
(0.49)
(0.00)
(3.75)
2. Goods
0.00
0.00
0.58
0.81
1.39
(0.00)
(0.00)
(0.48)
(0.00)
(0.48)
3. Services
0.00
0.00
1.53
1.96
3.49
(0.00)
(0.00)
(1.28)
(0.00)
(1.28)
4. Training and Study Tours
0.00
0.00
0.18
0.00
0.18
(0.00)
(0.00)
(0.18)
(0.00)
(0.18)
5. Competitive Grants and
0.00
0.00
1.92
0.32
2.24
Contingency Relief Fund
(0.00)
(0.00)
(1.44)
(0.00)
(1.44)
6. Incremental Operating
0.00
0.00
0.68
0.00
0.68
Expenses
(0.00)
(0.00)
(0.37)
(0.00)
(0.37)
Total
2.21
1.70
5.48
3.89
13.28
(1.85)
(1.41)
(4.24)
(0.00)
(7.50)
1/ Figures in parenthesis are the amounts to be financed by the Bank Grant. All costs include contingencies.
2/ Includes civil works procured under minor civil works (total aggregate US$591,000); goods to be procured
through international shopping (total aggregate US$448,000) and national shopping (total aggregate
US$130,000); consulting services as per arrangements indicated in Table A1; services of contracted staff
of the project coordination unit and its technical advisors to be procured under individual consultants;
training and study tours; competitive grants and contingency relief fund; and incremental operating costs
related to: (i) managing the project, and (ii) carrying out monitoring activities, managing restored
wetlands and protected areas.
- 67 -
Table A1: Consultant Selection Arrangements (optional)
(US$ million equivalent)
Selection Method
Consultant Services
Expenditure Category
QCBS
QBS
SFB
LCS
CQ
Other
N.B.F.
1
Total Cost
A. Firms
0.53
0.00
0.20
0.09
0.27
0.00
1.96
3.05
(0.44)
(0.00)
(0.17)
(0.07)
(0.23)
(0.00)
(0.00)
(0.91)
B. Individuals
0.00
0.00
0.00
0.00
0.00
0.44
0.00
0.44
(0.00)
(0.00)
(0.00)
(0.00)
(0.00)
(0.37)
(0.00)
(0.37)
Total
0.53
0.00
0.20
0.09
0.27
0.44
1.96
3.49
(0.44)
(0.00)
(0.17)
(0.07)
(0.23)
(0.37)
(0.00)
(1.28)
1\ Including contingencies
Note: QCBS = Quality- and Cost-Based Selection
QBS = Quality-based Selection
SFB = Selection under a Fixed Budget
LCS = Least-Cost Selection
CQ = Selection Based on Consultants' Qualifications
Other = Selection of individual consultants (per Section V of Consultants Guidelines),
Commercial Practices, etc.
N.B.F. = Not Bank-financed
Figures in parenthesis are the amounts to be financed by the Bank Grant.
- 68 -
Prior review thresholds (Table B)
Table B: Thresholds for Procurement Methods and Prior Review 1
Contract Value
Contracts Subject to
Threshold
Procurement
Prior Review
Expenditure Category
(US$ millions)
Method
(US$ millions)
1. Works
> or equal to 1.00
ICB
3.24
<1.00
NCB
<0.050
MCW
2. Goods
> or equal to 0.100
ICB
0.29
< 0.100
IS
< 0.050
NS
3. Services
> or equal to 0.200
QCBS/SFB
1.18
< 0.200
LCS
< 0.100
CQ
Ind.
4. Competitive Grants
N/A
Based on operational
N/A
and Contingency Relief
manuals
Fund
5. Training and Study
N/A
Based on semi-annual
N/A
Tours
budgets
6. Incremental
N/A
Based on annual budgets
N/A
Operating Expenses
Total value of contracts subject to prior review:
US$4.71 million
Overall Procurement Risk Assessment
High
Frequency of procurement supervision missions proposed: One every 6 months (includes special
procurement supervision for post-review/audits)
16.
Procurement implementation progress will be monitored through progress reports and supervision
missions. At least one supervision mission per year will include a procurement specialist, who will be
responsible for updating the procurement plan, and conducting ex-post reviews. His/her findings will be
included in the supervision reports for monitoring their implementation. A project officer in the Sofia
Country Office will be responsible for supervising project implementation and provide procurement
support. A procurement capacity assessment of the Project Coordinating Unit (former Project Preparation
Unit) was carried out and it was decided to classify the PCU within the high risk zone. Because of
high-risk category, intensive procurement supervision will be essential during the first three supervision
missions of the project. An action plan to strengthen procurement capacity of the PCU has been identified
and it includes specialized procurement training at ILO, Turin, Italy, for the project manager and the
procurement specialist.
17.
It is expected that by the time of GEF grant effectiveness, a three-day procurement launch
workshop will be held for the staff involved in implementing the project, including the staff of the PCU,
- 69 -
Protected Areas Administration, and local municipalities. During this procurement launch workshop,
procurement arrangements will be discussed in detail, the PCU staff will be trained in the procurement
methods applicable to the project, and they will also be assisted in initiating the preparation of draft bidding
documents for each package on the procurement plan for the procurement to be conducted during the first
two years of the project. A computerized procurement monitoring system will be in place within six
months of Grant effectiveness. For this purpose, the PCU will use the procurement tracking module of the
existing Financial Management System. This would enable the procurement specialist to keep track of
procurement activities as well as to generate the procurement progress reports. Prior to Board approval,
the Bank staff will prepare a procurement book containing all procurement related documents, including
Standard Bidding Documents, both in hard and soft copies, and send it to the PCU. The contents of the
procurement book will be discussed during the project launch workshop.
_______________________________________________________________________________________________________________
1 Thresholds generally differ by country and project. Consult OD 11.04 "Review of Procurement
Documentation" and contact the Regional Procurement Adviser for guidance.
- 70 -
Disbursement
Allocation of grant proceeds (Table C)
18.
Disbursement will follow normal Bank procedures and will be made against the categories of
expenditures indicated in Table C. The proceeds of the of the GEF grant are expected to be disbursed over
a period of five years. The expected effectiveness date is September 16, 2002, the expected completion
date is September 15, 2007, and the expected closing date is March 15, 2008.
Table C: Allocation of Grant Proceeds
Expenditure Category
Amount in US$million
Financing Percentage
Works
3.44
100% foreign
80% local
Goods
0.46
100% of foreign expenditures
100% of local expenditures (ex-factory
costs) and 80% of local expenditures for
other items procured locally
Consultant Services
1.20
100%
Training and Study Tours
0.17
100%
Grants under Biodiversity Conservation
0.20
100%
Small Grant Program
Grants under Farmer Transition
0.86
100%
Support Grant Program
Contingency Relief Fund
0.38
100%
Incremental Operation and Maintenance
0.35
90% until Dec 31 2003, 85% until Dec
Cost (1)
31 2004, 75% until Dec 31 2005, 50%
until Dec 31 2006, 25% thereafter
Unallocated
0.44
Total Project Costs
7.50
Total
7.50
Note: (1) It includes the incremental expenses incurred by the PCU and various institutions on account of
implementation of the project.
Use of statements of expenditures (SOEs):
19.
Project funds will initially be disbursed on the basis of the submission of Statements of
Expenditures (SOEs). A move to PMR-based disbursement will be made at the mutual agreement of the
Government and the Bank, and will be considered once the PCU is familiar with the project's monitoring
aspects and is considered able to produce timely and reliable project management information.
20.
Withdrawal applications would be fully documented. The reimbursement of expenditures made
from the Special Account may be made on the basis of certified Statements of Expenditures (SOEs), for the
following items: (i) contracts for goods valued at less than US$100,000 equivalent each; (ii) contracts for
works less than US$100,000 equivalent each; and (iii) contracts for consulting firms costing less than
US$100,000 equivalent each, and contracts for individual consultants amounting less than US$25,000
equivalent each; (iv) all contracts for training; (v) grant contracts below a threshold to be set in the
respective Operational Manuals; and (vi) all incremental operating costs. Expenditures above these
- 71 -
thresholds will be fully documented.
Special account:
21.
To facilitate timely project implementation, the PCU will establish, maintain, and operate, under
conditions acceptable to the Bank, a Special Account denominated in United States Dollars (USD or US$)
at the Bulgarian National Bank. The maximum authorized allocation of the Special Account (SA) will be
limited to US$0.5 million equivalent. However, during the initial stage of the project, an amount limited to
US$0.3 million equivalent will be deposited in the Special Account. When the amount disbursed reaches
SDR$1.0 million, the amount deposited in the SA will be increased to the full amount of US$0.50 million.
Replenishment applications should be submitted at least every two months and must include reconciled
bank statements as well as other appropriate supporting documents. The minimum size of applications for
direct payments and issuance of Special Commitments (SC) should be 20% of the authorized allocation.
Financial Management:
Country Financial Management Issues
22.
A Country Financial Accountability Assessment for Bulgaria will be carried out by the Bank after
2002. When finalized, the document will detail issues on the financial management risks for the country
and the implications for the World Bank operations. Key country financial management issues are: (i)
there have been some reforms in the public sector financial management of Bulgaria; (ii) the accounting
standards have been modified to adhere closely to International Accounting Standards (IAS); (iii) the
macroeconomic situation has generally improved after the financial crisis of 1996 1997 (i..e, GDP
growth was recorded yearly since 1998 and inflation has been brought down to single digits figures), but
unemployment and total foreign debt as a % of GDP remain at very high levels; (iv) the Supreme Audit
Institution (SAI) in Bulgaria is undergoing a reform process that will improve its capacity to carry out an
independent external audit on the Government accounts.
Project Specific Risks
23.
One substantial risk is that the Project is exposed to delays in payments to suppliers: (i) due to the
signatures required on both GEF Grant funds and Government contribution; and (ii) inadequate counterpart
funds in the Government project account. The signing mechanism proposed for the operation of the above
accounts is acceptable, and since the PCU will have physical presence in Sofia and within the premises of
the MoEW, all the signatures required will be obtained in a timely manner. The experience during the
preparatory phase has demonstrated that the signing mechanism does not pose significant delay risks. On
the issue of Government contribution, commitment has been obtained during negotiations that the
Government will provide the needed counterparts funds in a timely manner.
24.
The Project will operate under the following procedures: (i) all payment orders will be signed
jointly by the PCU manager and a high level officer (such as the General Secretary or Chief Accountant of
the MoEW); (ii) the beneficiaries' representatives will certify the acceptance of the works done, goods
delivered and services rendered before the payments are made by the PCU; (iii) segregation of duties
amongst PCU staff members; and (iv) project financial statements will be audited by an external auditor,
acceptable to the World Bank.
25.
Overall, the above Project risks are considered manageable due to the various risk mitigation
measures proposed.
- 72 -
Financial Management Assessment
26.
The latest assessment of the financial management arrangements for the Project was undertaken in
March 2002. The result of the assessment is that the Project financial management arrangements satisfy
the World Bank minimum financial management requirements. A financial management action plan was
developed and agreed with the Government to strengthen the financial management arrangements of the
Project. A summary of financial management assessment and conclusions is presented below:
Financial Management
Rating
Comments
Assessment
Implementing Entity
Satisfactory
PPU created over one year ago for the
preparatory grant within MoEW,
became fully familiar with World Bank
regulations and procedures.
Funds Flow
Satisfactory
Simple funds flow in place.
Staffing
Satisfactory
PPU Financial Management Specialist
and Accountant.
Accounting Policies and
Satisfactory
Detailed financial manual and internal
Procedures
control policies documented.
Internal Audit
N/A
No reliance placed on internal audit.
External Audit
Satisfactory
The project will be audited annually.
Appointment of auditors will be a Grant
effectiveness condition. Preparatory
Grant was audited (clean opinion).
Reporting and Monitoring
Satisfactory
Customized reporting capacity.
Information Systems
Satisfactory
Developed software system.
Overall Financial Management
Satisfactory
Rating
Financial Management System Assessment
27.
Project Management and Coordination. The PPU includes all the key staff agreed upon (project
manager, financial management specialist, procurement specialist), and draws upon the experience and
expertise of the MoEW staff. The Government will maintain a project financial management system
(FMS) in a format acceptable to the Bank and in accordance with OP/BP 10.02 and the World Bank
Project Financial Management requirements. The PCU will be responsible for the project's overall
financial management system. All procurement, financial management and disbursement procedures for
the Project will be centralized at the PCU and be in accordance with the relevant Bank guidelines.
28.
Staffing of the Accounting/Finance Function. The PPU has been operating for over one year in
the implementation of the preparatory grant. So far, the overall activity and progress was satisfactory.
The PPU financial management specialist handles all financial accounting records, ensures that accounting
records are kept up to date within the accounting software and is in charge of the petty cash arrangements.
He is also responsible for the planning, budgeting, auditing and reporting aspects, reporting to the Project
Manager. The financial management specialist has also established permanent contacts with the
accounting department of the MoEW, auditors and the MOF. During the implementation phase, the
financial management specialist will be able to work on a part-time basis, and thus will not be able to deal
with the day-to-day activities of the project. Therefore, an accountant will be hired to further strengthen
- 73 -
the financial management capacity of the PCU. The accountant will deal with the daily operations, keep
the petty cask book, prepare all relevant documentation, and maintain the financial management system.
Satisfactory terms of reference have been developed. The accountant will be hired before June 30, 2002.
29.
Accounting and Internal Controls. The PPU maintains the project accounts in accordance with
International Accounting Standards (IAS) and the statutory requirements and will integrate the project
accounts within the MoEW accounts, reporting to the accounting department of MoEW and the World
Bank. The PPU maintains all documentation related to project expenditures and keeps financial records in
accordance with sound accounting practices. The PPU is responsible for keeping the full accounting
records of the Project, in charge of all payments, operating the accounting software, handling the Special
Account (SA) and requesting payments from the Project Account (PA - local contributions), preparing all
bidding documents, reporting both to the Bank and Government, planning, budgeting, disbursement and
auditing.
30.
All the original project documents, contracts, payment orders, bank statements and all other
relevant accounting documents are kept by the PPU. The PPU staff are responsible for: preparing the
bidding documents; receiving offers and evaluating them in accordance with the World Bank regulations;
submitting the evaluations to the World Bank for no objection; signing contracts in an acceptable format;
and supervising the services provided in accordance with the terms of reference. The payment documents
are prepared by the PPU and submitted to the MoEW for approval only after the fulfillment of the above
steps. No project funds are passed over to any other parties. The PPU is the only entity authorized to
prepare payment documentation and request the MoEW make payments to suppliers. The PPU has
developed detailed financial statements, reporting formats and methods, internal control procedures,
disbursement and flow of funds arrangements, assigned staff responsibilities in order to ensure a complete
segregation of duties.
31.
Detailed Accounts will be Kept for each Project Component and its Sub-Components. The
project accounts also reflect: the status of payment against each contract, utilization of the Special Account
(SA) and replenishments made by the Bank, utilization of the Government contribution and uses of the
funds. During the implementation phase, the PCU will prepare reports showing detailed budgeted and
actual expenditures, uses of funds by source, summary of withdrawals and forecasts, statements of
progress achieved to-date and the objectives for the forthcoming quarter and semester. The PCU will agree
the formats, contents and frequency of the reports to be received from the other entities involved in the
Project by June 30, 2002.
32.
Computerized Accounting System. The existing accounting and reporting software system
developed in house by the financial management specialist is currently used for the preparatory grant and
will also be used for the main project. The system is also able to respond to the Bulgarian statutory
accounting and reporting. The system was designed to fully respond to the specifics of the preparatory
grant. Some changes and a certain degree of customization is needed to modify the software to respond to
the specifics of the Project. These changes will be performed in-house by the financial management
specialist is accordance with the action plan. The system features a customized chart of accounts, detailed
financial statements, reporting formats and methods, etc. The system can produce a trial balance, balance
sheet, a statement of sources and uses of funds, income and expenditure statement, special and project
account statements. Usual journals and ledgers are also produced by the system, such as separate journals
for works, goods, consulting and training, and operating costs. The system also features the bank accounts
ledger, the accounts receivable and accounts payable ledgers, the general ledger and a fixed assets register.
33.
The financial management specialist is the main operator of the software with the PPU Manager
- 74 -
responsible for authorizing all payments. The procurement specialist has limited rights to access the
software on procurement related aspects. The software system is able to produce the quarterly Project
Management Reports.
34.
Audit arrangements. The PPU has selected the auditor of the GEF Block B grant, in accordance
with the Bank requirements. The auditor (Pricewaterhouse Coopers Bulgaria) has performed the audit
work for the period February 1 until December 31, 2001, and has already issued a clean (unqualified)
opinion and the management letter recorded some minor issues, which are now being addressed by the PPU.
The MoEW has expressed its satisfaction with the performance of the auditor and most likely will appoint
the same auditor for CY02.
35.
Conclusion. It is concluded that the financial management arrangements of the Project satisfy the
minimum World Bank financial management requirements because:
l
the current PPU has implemented an acceptable computerized accounting and reporting system for
the Project;
l
the PPU has developed a detailed financial, accounting and internal control manual describing the
accounting policies and procedures, internal controls, delegation of responsibilities and authorities,
transaction flows, reporting, planning and budgeting;
l
the PPU has an experienced financial management specialist acceptable to the Bank;
l
the PPU has already contracted an independent external auditor for auditing of project preparatory
activities, acceptable to the World Bank. Depending on the performance of the audit, the same
firm will be retained for the implementation phase (effectiveness condition in the Grant
Agreement).
Flow of Funds
36.
The Grant Agreement will be signed between the World Bank (GEF) and the MoEW. The MoEW,
through the PCU, will handle the Grant amounts through the Special Account (SA). The PCU established
within the MoEW will be in charge of operating the SA. The SA is to be opened at the Bulgarian National
Bank, in accordance with the World Bank requirements. Government contributions will be received in
separate project sub-account of the main budgetary current account of MoEW, that will be used
specifically for the Bulgarian contribution to the project. These contributions will be received monthly,
directly from the MoEW budget. These contributions will be reflected as a separate line in the budget of
MoEW. All documentation pertaining to the project (relating to Grant funds, to the local contributions and
other donors as applicable) will be kept at the PCU. All payment requests, statements of expenditures,
replenishment requests, payment orders will be countersigned by a high level official of the MoEW.
Financial Monitoring Reports
37.
The PCU will maintain accounts of the Project and will ensure appropriate accounting of the funds
provided. The Government has expressed its preference to continue preparing the Project Management
Reports, which are produced by the existing software system, as the Financial Monitoring Reports (FMRs),
and prepare those on a quarterly basis. The FMRs include:
l
Project Sources and Uses of Funds
l
Uses of Funds by Project Activity
l
Project Balance Sheet
l
Special Accounts Statements Plus Local Bank Accounts Statements
- 75 -
l
Physical Progress Reports
l
Procurement Monitoring Reports
Financial Risk Analysis
38.
From the financial management perspective, the proposed project is considered a substantial-risk
project.
Costs and Financial Performance
39.
The project's financing plan, which includes the GEF grant, and the project's planned
expenditures, have been realistically estimated. In order to facilitate the implementation, the project's cost
tables include an appropriate cost matrix, which adequately shows the relationship between the Grant
agreement categories and project components.
Auditing Arrangements
40.
For Bank reporting purposes, the annual Project financial statements will be prepared in
accordance with the statutory requirements (Bulgarian Accounting Standards), which is a basis of
accounting similar to International Accounting Standards (IAS) and audited by independent auditors,
acceptable to the Bank, in accordance with the International Standards on Auditing (ISA) and the Bank
guidelines on auditing and financial reporting such as the World Bank Financial Accounting Reporting and
Auditing Handbook and the World Bank Project Financial Management Manual. The cost of the audits are
to be financed from the Grant. Reappointment of the CY2001 auditor will be a condition of effectiveness
specified in the Grant Agreement. The Government of Bulgaria does not have any audit reports overdue on
the Bank projects.
Grant Agreement Covenants
41.
The following are the covenants relating to financial management matters: (i) not later than
November 30 of each year, the Government will furnish World Bank/GEF the annual project
implementation work programs for the project for the next year, including procurement and financing
plans, and will review these plans with World Bank/GEF before implementing them; (ii) the Government
will submit to World Bank/GEF, commencing upon Grant effectiveness, quarterly Financial Monitoring
Reports (FMRs), not later that 45 days after the end of each quarter outlining progress made in the
implementation of each project component, as well as the problems encountered and how they are being
addressed; and (iii) the Government will cause the PCU to have the Project financial statements audited
each year by independent auditors acceptable to the World Bank, commencing with the accounts for the
period ending December 31, 2002.
Supervision Plan
42.
The development for further strengthening the financial management system will be monitored for
procedures and staff development before effectiveness, during the first supervision missions and throughout
project implementation. The reports of the progress of the project implementation will be monitored in
detail during supervision missions. The FMRs will be reviewed on a regular basis by the World Bank
Financial Management Specialist (FMS) and the results or issues followed up during supervision missions.
Financial audit reports of the project will be reviewed and issues identified and followed up. The FMS will
monitor the agreed action plan to ensure appropriate actions have been implemented by the PCU.
- 76 -
Annex 7: Project Processing Schedule
BULGARIA: Wetlands Restoration and Pollution Reduction Project
Project Schedule
Planned
Actual
Time taken to prepare the project (months)
24
First Bank mission (identification)
03/15/2000
03/15/2000
Appraisal mission departure
02/28/2002
02/28/2002
Negotiations
03/25/2002
04/08/2002
Planned Date of Effectiveness
06/13/2002
09/15/2002
Prepared by:
The Project Preparation Team within the MoEW conformed by: Ms. Marietta Stoimenova (Project
Manager, Consultant); Ms. Rayka Hauser (Technical Advisor, Consultant); Ms. Elizaveta Matveeva
(Environmental Expert, Consultant); Mr. Kiril Iliev (Financial/Accounting Specialist, Consultant); Ms.
Violetta Ivanova (Procurement Specialist, Consultant); Mr. Nikolay Kouyumdzhiev, Head, Water
Department; Mr. Michail Michailov, Chief Expert Protected Areas, National Nature Protection Service;
Mr. Svetoslav Apostolov, Junior Specialist, National Nature Protection Service; and Ms. Milena Rouseva,
Junior Specialist, Water Department.
Valuable technical assistance was also provided by: Mr. Andreas Wurzer, WWF; Ms. Snejana
Kostadinova, Social Scientist; Mr. Kurt Lonsway, Water Resources Specialist; and Mr. Jim Orr, Wetlands
Specialist.
STAP Reviewer was Mr. Richard Kenchington.
Preparation assistance:
GEF Project Preparation Grant of US$350,000;
Austria Consultant Trust Fund of US$55,000; and
Greece Consultant Trust Fund of US$40,000.
Bank staff who worked on the project included:
Name
Speciality
Rita Cestti
Task Team Leader/Senior Water Resources Economist
Kerstin Canby
Environmental Specialist
Jocelyn Albert
Task Team Leader until 11/15/00
Marea Hatziolos
Senior Environmental Specialist
Robert Robelus
Senior Environmental/Social Specialist
Julian Lampietti
Social Development Specialist
Marjory-Anne Bromhead
Quality Assurance/Sector Manager
Naushad A. Khan
Senior Procurement Specialist
Bogdan Constantinescu
Senior Financial Management Specialist
Blaga Djourdjin
Procurement Officer
Daria Goldstain
Counsel
Nicholay Chistyakov
Disbursement Specialist
- 77 -
Sohaila Wali
Program Assistant
Stephen Lintner
Peer Reviewer
Isabel Braga
Peer Reviewer
Stefan Schwager
Reviewer Environmental Safeguards
Stan Peabody
Reviewer Social Safeguards
- 78 -
Annex 8: Documents in the Project File*
BULGARIA: Wetlands Restoration and Pollution Reduction Project
A. Project Implementation Plan
The PIP includes the following annexes:
1. Detailed cost tables.
2. Terms of reference for PCU staff
3. Procurement Capacity Assessment
4. Procurement Plan
5. Implementation Schedule
6. Implementation Arrangements Matrix
7. Draft Environmental Monitoring Plan
8. Environmental Management Plan (EMP)
9. Terms of Reference "Detailed Technical Design of Wetlands Restoration"
B. Bank Staff Assessments
Procurement Capacity Assessment *
Financial Management Assessment *
C. Other
1. Technical Analysis of Wetlands Restoration Options *
2. Protected Areas Management Planning Studies *
3. Environment Assessment Report and Summary Report *
4. Social Assessment *
5. Sustainable Livelihood Program -- Assessment and Recommended Activities *
6. Detailed maps (many GIS based)
*Including electronic files
- 79 -
Annex 9: Statement of Loans and Credits
BULGARIA: Wetlands Restoration and Pollution Reduction Project
02-May-2002
Difference between expected
and actual
Original Amount in US$ Millions
disbursementsa
Project ID
FY
Purpose
IBRD
IDA
Cancel.
Undisb.
Orig
Frm Rev'd
P064536
2001 CHILD WELFARE REF
8.00
0.00
0.00
7.29
4.85
0.00
P055158
2001 EDUC MOD (APL #1)
14.39
0.00
0.00
12.50
-0.79
0.00
P055021
2001 REG AND CADASTRE
30.00
0.00
0.00
29.15
0.60
0.00
P057927
2000 ENV/PRIV SUPT SAL
50.00
0.00
0.00
17.62
10.02
0.00
P070086
2000 TRADE & TRANS FACIL IN SE EUR
7.40
0.00
0.00
6.39
2.99
0.00
P055157
2000 HEALTH SECT REF
63.30
0.00
0.00
53.27
-8.85
0.00
P033965
1998 ENV REM PILOT
16.00
0.00
0.00
2.36
2.36
-0.13
P008323
1997 SOC INS ADM
24.30
0.00
0.00
1.10
3.95
0.00
P008315
1996 RAILWAY REHAB
95.00
0.00
0.00
10.12
15.12
0.00
P008319
1994 WATER COMPANIES REST
57.00
0.00
41.00
7.22
55.70
14.70
Total:
365.39
0.00
41.00
147.02
85.96
14.57
- 80 -
BULGARIA
STATEMENT OF IFC's
Held and Disbursed Portfolio
Jan - 2002
In Millions US Dollars
Committed
Disbursed
IFC
IFC
FY Approval
Company
Loan
Equity
Quasi
Partic
Loan
Equity
Quasi
Partic
1999
BAC Bank
0.00
0.00
5.00
0.00
0.00
0.00
5.00
0.00
2001
Bulbank
0.00
17.47
0.00
0.00
0.00
17.47
0.00
0.00
1999
Celhart
13.90
1.50
0.00
0.00
13.90
1.50
0.00
0.00
1998
Devnya Cement
23.81
0.00
0.00
0.00
23.81
0.00
0.00
0.00
2001
Doverie
2.64
0.00
1.54
0.00
0.88
0.00
0.44
0.00
2001
EPIQ
7.76
0.00
0.00
0.00
4.31
0.00
0.00
0.00
1994
Euromerchant FND
0.00
5.00
0.00
0.00
0.00
5.00
0.00
0.00
2000
Florina
3.62
0.00
0.00
0.00
2.97
0.00
0.00
0.00
1996
Interlease Inc.
2.07
0.30
0.00
0.00
0.57
0.30
0.00
0.00
2000/01
Kronospan Group
6.03
0.00
0.00
2.59
6.03
0.00
0.00
2.59
2001
ProCredit Bank
0.00
1.05
0.00
0.00
0.00
1.05
0.00
0.00
1997
Sofia Hilton
10.80
0.00
2.00
9.20
10.80
0.00
2.00
9.20
2001
Sofia Med
11.63
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Total Portfolio:
82.26
25.32
8.54
11.79
63.27
25.32
7.44
11.79
Approvals Pending Commitment
FY Approval
Company
Loan
Equity
Quasi
Partic
1999
BPBank
10.00
0.00
12.40
0.00
2000
Podem
3.10
2.00
0.00
0.00
Total Pending Commitment:
13.10
2.00
12.40
0.00
- 81 -
Annex 10: Country at a Glance
BULGARIA: Wetlands Restoration and Pollution Reduction Project
Europe &
Lower-
POVERTY and SOCIAL
Central
middle-
Bulgaria
Asia
income
Development diamond*
2000
Population, mid-year (millions)
8.2
475
2,046
Life expectancy
GNI per capita (Atlas method, US$)
1,520
2,010
1,140
GNI (Atlas method, US$ billions)
12.4
956
2,327
Average annual growth, 1994-00
Population (%)
-0.5
0.1
1.0
Labor force (%)
-0.5
0.6
1.3
GNI
Gross
per
primary
Most recent estimate (latest year available, 1994-00)
capita
enrollment
Poverty (% of population below national poverty line)
..
..
..
Urban population (% of total population)
70
67
42
Life expectancy at birth (years)
71
69
69
Infant mortality (per 1,000 live births)
15
21
32
Child malnutrition (% of children under 5)
..
..
11
Access to improved water source
Access to an improved water source (% of population)
98
90
80
Illiteracy (% of population age 15+)
2
3
15
Gross primary enrollment (% of school-age population)
99
100
114
Bulgaria
Male
100
101
116
Lower-middle-income group
Female
98
99
114
KEY ECONOMIC RATIOS and LONG-TERM TRENDS
1980
1990
1999
2000
Economic ratios*
GDP (US$ billions)
20.0
20.7
12.4
12.0
Gross domestic investment/GDP
34.0
25.6
19.0
16.6
Trade
Exports of goods and services/GDP
35.7
33.1
44.1
58.5
Gross domestic savings/GDP
39.0
22.0
11.3
11.0
Gross national savings/GDP
..
..
12.2
10.7
Current account balance/GDP
4.8
-5.9
-5.3
-5.9
Domestic
Interest payments/GDP
..
2.2
2.7
3.7
Investment
savings
Total debt/GDP
..
52.4
79.6
86.5
Total debt service/exports
..
15.1
19.1
13.5
Present value of debt/GDP
..
..
76.7
..
Present value of debt/exports
..
..
156.9
..
Indebtedness
1980-90
1990-00
1999
2000
2000-04
(average annual growth)
GDP
3.4
-2.1
2.4
5.8
4.6
Bulgaria
GDP per capita
3.4
-1.5
3.0
6.3
5.3
Lower-middle-income group
Exports of goods and services
-3.5
2.2
-5.2
24.2
1.6
STRUCTURE of the ECONOMY
1980
1990
1999
2000
Growth of investment and GDP (%)
(% of GDP)
100
Agriculture
14.4
17.7
15.1
12.8
Industry
53.8
51.3
23.4
24.6
50
Manufacturing
..
..
14.5
15.4
Services
31.8
31.0
61.5
62.6
0
95
96
97
98
99
00
Private consumption
55.3
59.8
72.8
71.4
-50
General government consumption
5.6
18.2
15.9
17.7
GDI
GDP
Imports of goods and services
30.7
36.7
51.9
64.1
1980-90
1990-00
1999
2000
Growth of exports and imports (%)
(average annual growth)
Agriculture
-2.1
0.4
0.6
-10.1
30
Industry
5.2
-3.7
-4.4
15.3
15
Manufacturing
..
..
..
..
Services
4.5
-1.3
11.8
5.6
0
95
96
97
98
99
00
-15
Private consumption
2.5
-5.2
-4.9
11.7
General government consumption
9.1
-9.4
2.0
9.8
-30
Gross domestic investment
2.4
3.3
18.7
-7.7
Exports
Imports
Imports of goods and services
-3.3
0.5
5.1
14.6
Note: 2000 data are preliminary estimates.
* The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will
be incomplete.
- 82 -
Bulgaria
PRICES and GOVERNMENT FINANCE
1980
1990
1999
2000
Inflation (%)
Domestic prices
(% change)
1,500
Consumer prices
..
64.0
2.6
10.3
1,000
Implicit GDP deflator
..
26.2
3.1
5.6
500
Government finance
(% of GDP, includes current grants)
0
Current revenue
..
56.9
41.2
42.1
95
96
97
98
99
00
Current budget balance
..
-3.2
5.0
3.5
GDP deflator
CPI
Overall surplus/deficit
..
-7.7
1.5
0.4
TRADE
1980
1990
1999
2000
Export and import levels (US$ mill.)
(US$ millions)
Total exports (fob)
..
3,743
4,006
4,812
7,500
Consumer goods
..
1,380
1,343
1,437
Capital goods
..
890
214
215
5,000
Manufactures
..
..
660
655
Total imports (cif)
..
4,660
5,515
6,494
Food
..
150
165
175
2,500
Fuel and energy
..
1,392
1,235
1,768
Capital goods
..
1,706
1,492
1,590
0
94
95
96
97
98
99
00
Export price index (1995=100)
..
54
102
109
Import price index (1995=100)
..
28
101
113
Exports
Imports
Terms of trade (1995=100)
..
198
101
97
BALANCE of PAYMENTS
1980
1990
1999
2000
Current account balance to GDP (%)
(US$ millions)
Exports of goods and services
9,302
8,980
5,795
6,987
15
Imports of goods and services
7,995
5,165
6,561
7,657
Resource balance
1,308
3,815
-767
-670
10
Net income
-412
-613
-185
-321
5
Net current transfers
58
..
300
290
0
Current account balance
953
-1,231
-652
-701
94
95
96
97
98
99
00
-5
Financing items (net)
-718
820
1,017
975
Changes in net reserves
-235
411
-365
-273
-10
Memo:
Reserves including gold (US$ millions)
..
..
3,222
3,460
Conversion rate (DEC, local/US$)
0.0013
0.0022
1.84
2.12
EXTERNAL DEBT and RESOURCE FLOWS
1980
1990
1999
2000
(US$ millions)
Composition of 2000 debt (US$ mill.)
Total debt outstanding and disbursed
..
10,865
9,872
10,364
IBRD
..
0
829
823
G: 646
IDA
..
0
0
0
A: 823
Total debt service
..
1,374
1,156
989
C: 1,322
IBRD
..
0
64
75
IDA
..
0
0
0
Composition of net resource flows
D: 866
Official grants
..
4
80
74
Official creditors
..
57
199
12
Private creditors
..
-71
204
171
E: 930
F: 5,777
Foreign direct investment
..
..
802
1,003
Portfolio equity
..
0
-199
-179
World Bank program
Commitments
..
0
176
135
A - IBRD
E - Bilateral
Disbursements
..
0
221
71
B - IDA
D - Other multilateral
F - Private
Principal repayments
..
0
22
27
C - IMF
G - Short-term
Net flows
..
0
199
44
Interest payments
..
0
42
49
Net transfers
..
0
157
-5
Development Economics
9/5/01
- 83 -
Additional Annex 11
Social Assessment Summary
BULGARIA: Wetlands Restoration and Pollution Reduction Project
1.
This annex summarizes the social assessment of the communities surrounding Kalimok/Brushlen
Protected Site and Persina Nature Park. The complete social assessment is available in the background
document "Environmental and Social Assessment for Wetland Restoration and Pollution Reduction
Project" prepared by the Analytic Creative Group (ACG), December 2001. This annex has six sections.
The first section describes the data and methods that were used. The second section provides a synopsis of
public attitudes towards the project. The third section summarizes the socioeconomic condition of the
population in the area surrounding the project. The fourth section describes expected project impacts. The
fifth section describes the expected social impacts -- positive and negative -- as well as mitigating
measures. The sixth and seventh sections provide an overview of participation activities and an analysis of
the stakeholders.
I. Data and Methods
2.
The socioeconomic assessment was undertaken in three stages between July and November 2001.
The first stage consisted of primary and secondary data collection. Two focus group discussions with 10
participants each were undertaken at Kalimok/Brushlen. Thirty-five in-depth interviews were undertaken
at both sites. This information was used to design a household survey instrument. Secondary data on the
socioeconomic condition of the project area was collected from relevant government institutions.
3.
In the second stage household surveys were undertaken. In Kalimok/Brushlen Protected Sites
(hereafter KBPS) a 1,282 household survey, representative of the population in the protected area, was
completed. In Persina Nature Park (hereafter PNP), a 550 household survey, representative of the town of
Belene, was completed.
4.
The third stage consisted of data analysis and consultations with stakeholders. In particular
stakeholders were consulted on project alternatives and then the social assessment team worked with the
Project Preparation Unit to include the results of these consultations in the project design. The social
assessment has had a significant impact on project design.
II. Public Attitudes Towards the Project
5.
Traditionally, nature plays an important role in the Bulgarian value system. This was confirmed
by the population's generally positive attitude towards the concept of wetland restoration. There are,
however, important differences in the population's perception of the project at the two sites. These are
partly related to physical differences in the sites. At KBPS, most of the original marshlands proposed for
restoration are state-owned, and have reverted to reed beds. Adjacent areas are privately and
municipality-owned and used for agriculture of varying productivity levels -- while the western part of the
area is mainly in private or local government ownership, the eastern area is mainly in state ownership. The
project will restore wetlands in an area that is currently on short-term lease from local government to local
farmers. At PNP, the project will support the wetland restoration on eastern Belene Island, a 15 km long
island, the western portion of which is currently under the jurisdiction of the Ministry of Justice which
operates a prison on this side, while the eastern portion is a managed Nature Reserve under the jurisdiction
of the Ministry of Environment and Water. Since the establishment of the prison on the Belene Island,
local communities have not been allowed access to this part of the island due to the security requirements.
- 84 -
6.
The total population connected to the KBPS is about 23,140, including the municipalities of Slivo
Pole (Ryahovo village 2,250 inhabitants, Golyamo Vranovo village 2,190 inhabitants, Bobovo village 710
inhabitants and Brushlen village 560 inhabitants) and Tutrakan (Tzar Samuil village 1,900 inhabitants,
Novo Cherna village 2,250 inhabitants, Staro Selo village 1,480 inhabitants, and Tutrakan town 1,800
inhabitants). Most of the land is used for agricultural purposes, and the population surrounding KBPS is
traditional and more dependent on agriculture. Most of the people in the KBPS have lived in their current
homes their entire lives. The protected area was not, at the inception of project preparation, perceived as
providing new economic opportunities. People were not interested in developing new skills such as tourism
and perceived the best way to improve their living standards as simply increasing existing activities.
However, as the project concept developed with their feedback, they became more aware of the potential
benefits and more supportive of the restoration objective, and more pro-active in identifying further
potential socio-economic and environmental benefits form the project, providing important input into
project design.
7.
The total population connected to the PNP is about 49,970 inhabitants, including the municipalities
of Nikopol (Nikopol town with 5,100 inhabitants and Dragash Voyvoda village with 930 inhabitants),
Belene (Belene town 9,830 inhabitants) and Svishtov (Svishtov town 31,800 inhabitants and Oresh village
2,310 inhabitants). Most of the land in the area, regardless of ownership, is used for agricultural purposes.
Other land uses are forestry and fishery. In contrast, the people of PNP are slightly less traditional. Also
the local economy is more active and diversified. They have high expectations of the nature park, hoping it
will create new cultural and natural tourism opportunities. At both sites, the project will continue to build
support of the population through the public awareness and environmental education subcomponent.
III. Socioeconomic Characteristics of the Population
8.
The people living in and around the two protected areas are older, less educated, and more diverse
in terms of religion than the rest of the country. Approximately 40% of survey respondents are over 60
years, significantly more than the 27% nationwide. Thirty to 35% do not have more than an 8th grade
education, compared to 27% nationwide. In terms of religion, about 38% of PNP residents are Catholics
and 12% of KBPS are Muslims. Eighty-four percent of Bulgarians are Eastern Orthodox.
9.
Unemployment levels are high and cash incomes are low, particularly in the KBPS. Approximately
32% of the labor force in KBPS is unemployed. The main sources of household income are pensions,
wages (including agricultural wage labor), self-production, and social assistance. The median monthly
household income is about 190 BGL, which is well below the national median of 259 BGL per household
per month (Table 1). This is consistent with respondent's self-assessment of welfare 45% consider
themselves worse off than the rest of the population. By contrast, in PNP 22% of the labor force is
unemployed and median income is similar to that of the country as a whole.
- 85 -
Table 1: Median Household Incomes in Different Occupations (BGL per household per month)
Occupation
Kalimok Brushlen
Persina Belene
Nationwide
Agriculture
175
197
194
Self production
150
145
Wage labor
200
250
Education
200
350
248
Military/Police
240
325
321
Administration
200
250
260
Industry
300
-
360
Power energy
-
400
443
Median
190
245
259
10.
Households engage in two main types of agricultural activities self-production and wage-labor.
Self-production takes place on small private farms (generally less than 1 hectare). It includes subsistence
production of vegetables and potatoes and some livestock. There are also some small farms that produce
high value irrigated crops such as vegetables, fruits, and tobacco. The majority of self-production in KBPS
is subsistence, with only limited amounts of high value production. Wage-labor takes place on medium
(from 2 to 10 hectares) and large farms (greater than 10 hectares). Larger farms produce grain (mainly
corn and wheat) and industrial crops.
11.
Household use of natural resources in the protected areas is very limited and almost never on a
commercial basis. In KBPS, 21% of the population report gathering some herbs and mushrooms, fishing,
and/or hunting, but these activities are all minor and do not contribute substantially to household income.
In PNP, only 8% of the population gather herbs and mushrooms from the protected area. Tourism related
activities are not very developed. Only 2% to 3% of the respondents in KBPS and 1% in PNP are either
engaged or know people who are engaged in tourism.
IV. Expected Project Impacts
12.
There is an overwhelming expectation of positive impacts from the project, with more than half of
the survey respondents indicating that it would be beneficial for their region. The benefits people feel will
accrue to them include improvement in the water quality of the Danube, conservation and protection of
natural resources, improvement in the natural fishery, and general economic revitalization from an
increased flow of visitors. There will also be direct benefits from the creation of new jobs associated with
the civil works activities, maintenance, guarding and monitoring of the wetlands and protected sites.
13.
The project may result in some negative impacts on the population. In particular there may be
limitations placed on resource extraction in the protected areas and there may, at KBPS, be indirect
impacts on private land from wetland restoration although this is not expected. These impacts and how the
project addresses them are discussed in detail below in the section on social risks. At both sites the
population raised the issue that restoring wetlands will exacerbate mosquito population. While this is not
expected to occur, the environmental management plan has taken this into account and explored options for
mitigating this impact. Increasing stagnant water surfaces could significantly increase mosquito breeding
grounds and insect populations. Increasing fish, bird and populations of beneficial insects that feed on
mosquito larvae and insects would offset this. Also, cycling water through the wetlands would help limit
insect breeding.
- 86 -
V. Social Impacts (Negative and Positive)
14.
There are several parties at risk from the project in KBPS. These include farmers in the protected
area, farmers renting state/municipal land in the restoration area, and private land owners adjacent to the
restoration area. Each of these risks and the mitigating measures are described below. These risks do not
apply to the restoration areas of Belene Island because it has always been state land where villagers have
historically not been allowed access because of security risks associated with the Belene Prison.
15.
The protected area management plans are expected to support economic activities compatible with
biodiversity conservation objectives and limit those that are not. The plans are not expected to result in any
significant restrictions of land use or on gathering of natural products from the wetlands. In order to
minimize the negative impacts on the population, the plans will be developed in consultation with the local
population.
16.
In addition to adopting a participatory approach in the development of the protected management
plans, Project Component 2 will support the establishment of a Farmer Transition Support Fund. The
fund's purpose is to provide farmers (both land owners and renters) with incentives to make the transition
from activities that are not compatible with the project conservation objectives to those that are. The fund
will provide farmers with one-time grants for the cost of converting to project compatible activities and
will be developed along the lines of SAPARD Program measures on environmentally friendly agriculture
and the sustainable livelihood program assessment conducted during project preparation. A menu of
options for these grants has been drafted and will be finalized during the first year of project
implementation. In addition, Project Component 2 will support the establishment of an eco-business
support development program to provide technical assistance and grant financing for the development of
viable long-term business opportunities (green business) compatible with conservation objectives.
17.
The wetland restoration activity involves the flooding of 1,050 to 1,290 hectares of state/municipal
land. Flooding is expected to last one or two months. The exact extent of indirect impacts caused by the
restoration will remain uncertain pending completion of a detailed feasibility study of restoration activities
during the first year of implementation. The terms of reference for this study include specific language to
minimize the impact of restoration on local incomes and undertake regular consultations with local
communities and NGOs. The purpose of these consultations is to help the MoEW and the local
populations define and implement a jointly acceptable restoration plan.
18.
Several large farmers (including the mayor of Nova Cherna) are leasing (on annual renewal basis)
state/municipal land that will be included in the restoration area. While restoration is expected to eliminate
crop farming (other than production of reed) within the restored wetland area, outside the wetland area,
farming may actually be improved by lengthening the cropping season. The final restoration plan will, by
improving drainage conditions, make equivalent amounts of state land adjacent to the restoration area
available for lease. The farmers will be fully informed of all restoration activities and their timing through
the public information campaign. Thus the risk of negative impacts on these farmers is considered
minimal.
19.
Another party at risk is private landowners that will be indirectly affected by wetlands restoration.
While it has been determined that restoration will not result in the direct loss of private land or
displacement of private housing, the MoEW's stated objective is not to have an impact on private land.
The MoEW recognizes that there is some uncertainly associated with restoration activities pending the
outcome of the feasibility study.
- 87 -
20.
Restoration activities may also have an indirect impact on a small amount (less than 100 ha) of
private land adjacent to the restoration area. For example ground water levels may increase resulting in a
longer than normal period of soil saturation in the spring. Farmers may be forced to plant crops late which
can result in lower yields due to late harvest or poorer germination. Project component 2 includes a
Contingency Relief Fund to mitigate these circumstances. This fund will provide households with the
resources necessary to undertake mitigating measures. The institutional mechanism and criteria by which
affected parties can access the fund as well as a system for participatory monitoring of adverse impacts and
effectiveness of compensating measures will be completed during the first year of project implementation.
The terms of reference for this task are included in the Project Implementation Plan.
VI. Participation
21.
The project has been developed in a participatory manner and these activities will serve as a
template for implementation (Table 2). Key stakeholders consulted during preparation include villagers
and their representatives in local government, Government staff involved in implementing the project, and
environmental Non-Government Organizations. Feedback from stakeholders during these participatory
activities were incorporated into the project design.
Table 2: Participation
Stakeholder
Identification and
Implementation
Operation/
Preparation
Maintenance and
Monitoring
Beneficiaries, Communities
IS/COM
IS/COM/COL
IS/COM/COL
Groups, and Associations
Central Government
IS/COM
IS/COM/COL
IS/COM/COL
Regional Government
IS/COM
IS/COM/COL
IS/COM/COL
Local Government
IS/COM
IS/COM/COL
IS/COM/COL
Academy of Sciences
IS/COM
IS/COM/COL
IS/COM/COL
NGOs
IS/CON
IS/COL
IS/COL
EU and other Donors
IS/CON
IS/CON/COL
IS/CON/COL
Legend: IS=Information sharing; COM=Consultation; COL: Collaboration
22.
Villagers will continue to participate in the project throughout implementation, contributing to the
development of protected area management plans and identifying impact mitigation measures. Staff of the
protected areas administrations will participate in implementation and will receive training on methods to
encourage and manage community involvement. Local and national NGOs will be involved in monitoring
implementation.
VII. Stakeholder Analysis
22.
There are many stakeholders in the project, particularly in the Government. The stakeholders and
their level of interest in the project, ability to influence it, and support for it are summarized in Table 3.
The most important stakeholders at both sites are state institutions. They are the primary decisions makers
concerned with project design and implementation. Also the public perceives them as guaranteeing the
success of the project.
- 88 -
Table 3: Stakeholder Assessment
Stakeholder
Interest
Ability to Influence
Support
Total
Ministry of Environment
5
4
5
14
Bulgarian Academy of Science
3
5
5
13
Ministry of Agriculture and Forestry
4
5
3
12
Ministry of Justice
2
5
4
11
National Electricity Company
3
5
3
11
Fishermen
5
2
4
11
Natural product users
5
1
3
9
Local Government
2
4
2
8
Private land owners
1
5
1
7
Agricultural cooperatives
1
2
3
6
Land renters
1
1
2
4
NGO (Green Balkans)
5
2
5
12
Teachers
5
4
4
13
Note: Stakeholder assessment measured on a scale 1 (low) to 5 (high).
23.
Project success will depend on the involvement of local government, private business and teachers.
Local government will be partly responsible for implementation. Private business will play a key role in
the economic development of the region. Teachers are trusted by the population and can therefore play a
key role in disseminating accurate information about the project and raising environmental awareness. This
has been taken into account in project design.
- 89 -
Additional Annex 12
Process Framework for Mitigating Potential Adverse Livelihoods Impacts
BULGARIA: Wetlands Restoration and Pollution Reduction Project
1.
Project Description. The development objective of the Wetlands Restoration and Pollution
Reduction Project is that local communities and local authorities in the Persina Nature Park and
Kalimok/Brushlen Protected Site areas adopt sustainable natural resources management practices. The
project will help demonstrate how environmentally-friendly rural development activities can improve
livelihoods. The global environmental objective is to demonstrate the potential to replicate actions to
reduce transboundary nutrient loads and other agricultural pollution flowing into the Danube River and the
Black Sea Basins, while at the same time conserving key ecosystem processes and targeted threatened
species in the project areas through: (i) wetlands restoration and protected areas management programs;
and (ii) support for stakeholders to adopt environmentally-friendly economic activities in the two project
areas. The Project has three main components:
Component 1: Support for Wetland Restoration. Restoration of approximately 2,340 hectares (ha) of
wetland ecosystems along the Danubian coast (Belene Island and Kalimok / Brushlen marshes) within
Persina Nature Park and Kalimok/Brushlen Protected Site respectively, as well as additional sites to be
identified during project implementation.
Component 2: Support for Protected Areas Management. Support for two protected areas covering
28,000 ha -- Persina Nature Park (PNP) and Kalimok/Brushlen Protected Site (KBPS) will include: (i)
development and implementation of protected areas management plans; (ii) monitoring of water quality,
ecosystem/habitat and socio-economic parameters; (iii) public awareness and education; (iv)
institutional strengthening; and (v) guidelines for a national nutrient reduction program.
Component 3: Project Coordination, Management and Monitoring. Operating costs of a Project
Coordinating Unit.
2.
Component Description. Two components are of particular relevance to the Process Framework:
Component 1 supporting wetland restoration and Sub-Component 2a for the development and
implementation of protected areas management plans. Benefits of the two include: the improved
productivity of ecosystems and critical natural habitats in the two protected areas; more efficient
agricultural productivity through better agriculture practices; development of small eco-enterprises;
progress toward compliance with EU directives and emerging Bulgaria regulations; and increased capacity
of existing institutions at the central, regional and municipal level. Local communities will also benefit
from improved fisheries along the Danube, and possibly from the development of tourism.
3.
Wetland Restoration Component: Portions of Belene Island and the Kalimok/Brushlen Marshes
have been selected for restoration during the first phase of project implementation on the basis of their
potential for nutrient trapping and value as a biodiversity habitat. They are among the 17 former
floodplains which provide potentially high environmental services and recommended for restoration in the
UNDP/GEF-financed Pollution Reduction Program study of the Danube Commission. Additional sites are
expected to be identified and restored during project implementation.
4.
Development and Implementation of Protected Areas Management Plans Sub-Component: This
sub-component supports the preparation and implementation of protected area management plans in PNP
and KBPS. The PNP covers about 21,000 hectares (ha) located along the Svishtov Belene lowlands, and
- 90 -
comprises five areas: Belene Island, other islands and floodplains, the eastern part of the former floodplain
mainly under state and municipal ownership, the western part for the former floodplain mainly under
private ownership, and the hilly landscape of Nikopol. Most of the land in the area, regardless of
ownership, is used for agricultural purposes. Other resource uses include forestry and fishery. The KBPS
covers about 6,000 ha and is located 60 kilometers east of Ruse. As in the case of PNP, most of the land is
used for agricultural purposes, and the population is mainly employed in the agriculture sector. Up until
the 1950's, the marsh complex was a key part of the region's valuable fish resources. In the 1950's, a
dyke was constructed between Ruse and Tutrakan for agricultural purposes, which cut off fish from their
historical spawning grounds. Fish ponds (encircling 560 ha of state-owned land) were constructed, but
they were declared bankrupt and abandoned after the collapse of the state farming system. Most of the
original marshlands proposed for restoration are state-owned, and have reverted to reed beds. Much of the
adjacent areas outside of the restoration sites are privately and municipality-owned and used for agriculture
of varying productivity levels.
5.
Activities under the project relevant to the Process Framework include:
Protected Areas Management Planning: Management Plans (MP) for both PNP and KBPS will
be developed during a 2-3 year process. The MPs will regulate all activities within the
designated areas including the demarcation of management zones for multiple resources use
and economic development. The management planning process is expected to cover a period
of two years, with the first year dedicated to fact-finding and the establishment of
consensus-building processes which will help guide the identification of zones and management
protocols.
Protected Areas Management Activities:
Land management activities: (i) operation and maintenance of the flooding infrastructure
such as the opening/closing of the sluice gates; and (ii) management and maintenance of the
wetlands in order to optimize nutrient trapping and biodiversity habitat.
Contingency Relief Fund: While the technical design studies, environmental and social
assessments have identified measures to mitigate potential negative indirect impacts from
wetland restoration (e.g., raised groundwater levels, changes in well-water quality and road
access to private lands), it is recognized that it is important to "plan for the unexpected" in case
there may be unexpected indirect effects. The Project's Contingency Relief Fund will provide,
if necessary, relief to households that experience a decrease in income, water quality and
quality of life as a result of indirect effects of the flooding.
Farmer Transition Support Grant Program: The PNP and KBPS MPs are expected to institute
programmatic support for economic activities compatible with conservation objectives and
identify ways for local communities to transition out of activities that are not sustainable over
the long-term. The purpose of this fund is to help farmers make the transition from
non-sustainable activities (many of which are currently illegal) to those that are sustainable,
with programs for activities such as livestock waste treatment, agro-forestry, and low-till
cropping. Households that experience a decrease in income or welfare as a result of the
indirect effects of the flooding will also be eligible to apply for grant resources from this fund.
Eco-Business Development: The project will provide assistance to local communities and
individual farmers to: (i) identify existing sources of funds (i.e., EU programs PHARE,
SAPARD, Cross-Border Cooperation, USAID, Swiss bilateral program, etc.); (ii) developed
- 91 -
marketable "eco-friendly" business proposals; (iii) access grant funds; and (iv) support
implementation of a small number of pilot schemes to promote small-scale environmentally
friendly income generating initiatives.
6.
Policy Trigger. This Process Framework will be implemented in accordance with the World Bank
Policy on Involuntary Resettlement. It covers restrictions of access to legally designated zones within PNP
and KBPS, and the possibility of negative externalities from floodwaters, which may have adverse impacts
on livelihoods of the affected persons or households. Good practice has demonstrated that the objectives of
both the Project and the Operational Policy can be better achieved through a participatory process similar
to that outlined in this Process Framework and to be followed during the development of the PNP and
KBPS management plans.
7.
Wetland Restoration: The wetland restoration activities have been and will continue to be
specifically designed so that no involuntary physical displacement or relocation of people would be
necessary. Design parameters include flood elevations that do not encroach on private lands and minimize
impacts to groundwater (levels and quality) and crops as well as road access. The wetland restoration
activity will only involve the flooding of 2,340 hectares, most of it state/municipal land, lasting one or two
months. Within the core restored wetland area, direct planting of crops will no longer be possible, but the
production of reed and grazing will be possible. Outside the immediate wetland area, farming may actually
be improved by lengthening the cropping season and introducing improved agricultural practices which are
also in line with the management plans. The final restoration design will, by improving drainage
conditions, make equivalent amounts of state land adjacent to the restoration area available for lease.
Existing dykes will be raised or new dykes will be built to protect private property. The exact location and
area of the restoration will remain uncertain pending completion of a detailed feasibility study of restoration
activities during the first year of implementation. The terms of reference for this study include specific
language to minimize the impact of restoration on local incomes and undertake regular consultations with
local communities and NGOs. The purpose of these consultations is to help the MoEW and the local
populations define and implement a jointly acceptable restoration plan.
8.
Despite the expectation that negative impacts will be minimal and the specific mitigation measures
that have been identified, the Project's Contingency Relief Fund will, if necessary, provide relief to
households that experience a decrease in income or quality of life as a result of restoration activities.
Permanent assistance for transition to compatible eco-business or agricultural practices can be provided
through the farmer transition fund and eco-business development program, the former giving priority
support to long term solutions that mitigate the negative indirect impacts of the flooding.
9.
The fund is capitalized at a level equal to an estimate of the maximum potential marginal losses
resulting from the restoration activities. All households in the KB protected area are eligible to apply for
the funds. The public information campaign will disseminate information on the application process
continually and then more intensively before application period. All applications will be reviewed by a
panel including an environmental expert (from a local NGO), an agricultural economist/engineer expert,
and a representative from the Regional Directorate of the Ministry of Agriculture and Forestry. The expert
panel will review claims, submitted in a standard format developed and disseminated by the Project
Coordinating Unit, once a year. If losses claimed can be attributed to wetlands restoration activities, then
the applicant will be awarded grants sufficient to offset the losses. The Project Coordinating Unit will be
responsible for administrating this fund according to an Operational Manual.
10.
Protected Areas Management Planning: In order to enhance the management of natural resources
within the two protected areas' landscapes, this component will support the development of protected area
- 92 -
management plans which will focus on key management activities to enhance conservation, such as habitat
restoration, increased monitoring and working with local communities to develop and implement
regulations and other measures to ensure sustainable use of natural resources. Implementation of MPs will
not require involuntary physical displacement or relocation of people. To the extent feasible, the MPs
would avoid including new restrictions or strict enforcement of current regulations which could adversely
affect livelihoods, beyond those needed to ensure the sustainability of the natural resource.
11.
Nevertheless, the MP process may identify the need for new zoning (with increased restrictions on
access to natural resources) and increased enforcement of existing laws within the protected area in order to
ensure sustainability of the natural resource. For example, there may be various regulations for the types
of agricultural practices allowed, introduction of new species, forestry practices as well as hunting and
fishing. In some cases, this may adversely impact livelihoods. In other cases, the improved productivity of
the resource (e.g. fisheries) or business opportunities (e.g. tourism, eco-business development) may
increase opportunities for communities. However, increased restriction of access cannot be ruled out until
the MPs are developed during years 1-3 at which time the nature of any proposed restrictions, as well as
the type of measures necessary to mitigate adverse impacts of those restrictions, will be determined in
consultation with affected groups.
12.
Process Framework. This Process Framework outlines the criteria and procedures which will be
followed as part of the Project, in cases where project-induced involuntary restriction of access to natural
resources within the protected areas, or involuntary damage from floodwaters, results in adverse livelihood
impacts. It will ensure that eligible, affected persons are assisted in their efforts to restore or improve their
livelihoods in a manner which maintains the environmental sustainability of the protected area in question.
More specifically, it describes the participatory process by which: (i) specific components of the Project
were prepared and will be implemented; (ii) the criteria for identifying who are "affected persons" will be
determined; (iii) measures to assist the affected persons in their efforts to improve or restore, in real terms,
the pre-displacement levels, their livelihoods (e.g., as appropriate, alternative agricultural or grazing areas,
cultivation of alternative crops, or investments in alternative-income generating activities) while
maintaining the sustainability of PNP and KBPS will be identified; and (iv) potential conflicts involving
affected persons will be resolved. It also provides a description of the arrangements for implementing and
monitoring the process.
13.
Process Followed During Preparation. A full social assessment was conducted during Project
preparation which, while covering all aspects of the Project, focused on potential social and economic
impacts due to ecosystem restoration (flooding) and the enforcement of regulations associated with new
protected areas management plans. The objective of the Social Assessment was to: (i) assess general
socio-economic conditions in the region as well as public attitudes towards the project; (ii) identify potential
positive and negative impacts as well as mitigating measures; and (iii) inform ongoing Project design. The
project was developed in a participatory manner which serves as a model for implementation. Key
stakeholders consulted during preparation include villagers and their representatives in local government,
Government staff involved in implementing the project, and environmental Non-Government Organizations.
Feedback from stakeholders during these participatory activities was incorporated into project design. A
full summary of the process that was followed can be found in Annex 11 " Summary of Social
Assessment."
14.
The Social Assessment found that, in general, the local population expects positive impacts from
the project, with more than half of the survey respondents indicating that it would be beneficial for the
region. Benefits expected include the sustainable conservation and protection of natural resources,
improvements in the natural fisheries, and a general economic revitalization (possibly from tourism and
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eco-business development). Nevertheless, the Project may inadvertently adversely affect the livelihoods of
persons living within the protected areas. Many of these potential impacts were anticipated even before the
Social Assessment was completed, and TORs for design studies specifically called for these impacts to be
minimized.
15.
During Project preparation, new components were specifically added to assist local communities
adjust not only to any potential restoration impacts and changes in the land management regime of the area,
but also to new regulations that are expected to be adopted in the country anywhere due to EU Accession
requirements. These include the Farmer Transition Support Grant Program (or Fund), the Contingency
Relief Fund and the Eco-Business Support Development Program. The Terms of Reference for the MPs
developed during preparation specifically outline the participatory approach to be followed, in which the
roles of local communities in the management of natural resources would be strengthened. The role of an
Advisory Committee or Consultative Council during the planning process was agreed upon.
16.
Process to Be Followed During Implementation. Villagers and local authorities will continue to
participate in the project throughout implementation, contributing to the development of protected area
management plans and identifying impact mitigation measures. Staff of the protected areas administrations
responsible for implementation will receive training on methods to encourage and manage community
involvement. Local and national NGOs will be involved in monitoring implementation. Specific processes
to be followed during project implementation would consist of the following steps:
(i) Local communities, authorities and farmers will be fully informed of all restoration activities
and their timing through the public information campaign.
(ii) Through a well-designed participatory process, the management plans aim to gain public
acceptance for not only the natural resource management proscriptions identified in the
management plan, but also possible restrictions to resource use which may be necessary to ensure
the long-term sustainability of these resources. The protected areas management plan will identify
not only the appropriate management proscriptions of the protected areas' biological resources, but
also processes by which the park administrations can proactively foster local sustainable
socio-economic activities.
(iii) If adverse impacts are unavoidable, the consultations will focus on identifying measures to
assist subsistence users to improve or restore their livelihoods while maintaining the sustainability
of the two protected areas. Particular emphasis will be placed on the consultation process that
allows communities to identify and choose among potential compensating measures.
(iv) The MPs will address mechanisms by which potential conflicts involving resource users will be
resolved. This includes working with community members to define criteria for eligibility for
compensating measures and identifying the relevant administrative jurisdictions and line ministries
responsible for implementing such mitigating or compensating measures.
(v) Develop strategies for participatory monitoring of beneficial and adverse impacts within the
PAs and effectiveness of compensating measures.
17.
The MPs will include a detailed write-up of the results of these consultations. The MPs will
include descriptions of the management zones and allowed uses; measures to assist affected person to
improve or restore their livelihoods while maintaining the sustainability of natural resources within the
protected areas; administrative procedures for how potential conflicts will be resolved; legal procedures for
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project management; and monitoring arrangements.
18.
Plan of Action: The MPs will serve as the Plan of Action required by the Bank's Operational
Policy on Involuntary Resettlement to be developed and submitted to the Bank during implementation and
prior to enforcement of existing of new laws and regulations governing access to resources.
19.
Monitoring and Evaluation: As part of the monitoring of social development outcomes, the PCU
will hire consultants that will carry out annual socio-economic surveys to monitor progress of the project.
These surveys will be tailored to measure the impact of the management plans against the initial
socio-economic baseline carried out during the preparatory phase.
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