GEF Council Work Program Submission

Project Executive Summary

Financing Plan (in US$): GEF Project/Component
Project	34,000,000
PDF A
PDF B
PDF C
Sub-Total GEF:	34,000,000

Co-financing

Sub-Total Co-financing:	275,000,000
TOTAL Project Financing:	309,000,000
Financing for associated activities if any: 0.04 Regional Distance learning Program

World Bank Project ID: GE-P0069053

Countries: Belarus, Bosnia-Herzegovina, Bulgaria, Croatia, Czech Republic, Georgia, Hungary, Moldova, Romania, Russian Federation, Serbia and Montenegro, Slovak Republic, Slovenia, Turkey, Ukraine

Project Title: Strategic Parnership for Nutrient Reduction in the Danube River Basin and Black Sea – World Bank-GEF Nutrient Reduction Investment Fund: Tranche 3

GEF Implementing Agency: World Bank

Other Executing Agency/Agencies: Varies by project

Duration: 6 years

GEF Focal Area: International Waters

GEF Operational Program: OP8 and OP 10

GEF Strategic Priority:

Estimated Starting Date: Ongoing

Record of endorsement on behalf of the Government(s)

Endorsement by basin countries’ GEF Focal Points was received prior to May 2001 Council approval of the Investment Fund Tranche 1. Country endorsement for individual projects is sought at the time of project concept development.

Approval on behalf of the World Bank: This proposal has been prepared in accordance with GEF policies and procedures and meets the standards of the GEF Project Review Criteria for work program inclusion.

…………………………………

Lars Vidaeus, Executive Coordinator, The World Bank

March 7, 2003
1. Project Summary

The World Bank-GEF Investment Fund is the investment arm of the GEF Strategic Partnership on the Danube/Black Sea Basin. The objective of the Investment Fund (IF) is to provide a focused regional framework for country level investments aimed at a common goal of combating eutrophication in the Black Sea and help jump start and further accelerate key investment in sectors such as municipal waste water, agricultural and industrial pollution. Eligible areas of intervention for support under the Fund include investments to remediate and mitigate nutrient pollution in municipalities, industry and agriculture, as well as policy and legal reform and capacity building for enhanced monitoring and enforcement. The IF allows for a streamlined approach to project processing by the GEF. It constitutes a proposed envelope of US$70 million, to be approved by the GEF Council in several tranches. In May 2001, the GEF Council approved the first tranche of the Investment Fund, US$20 million. The second tranche of US$16 million was approved by the Council in May 2002. .

The objectives and outcome indicators of the Strategic Partnership and the IF are stated in detail in Box 2 of the Framework Brief which attached to this Progress report as Annex 1. Individual projects funded under the Investment Fund have developed specific key indicators, including performance indicators, risks and assumptions.

This is the second progress report on the Investment Fund to be submitted to Council and has been prepared to request Tranche 3 of the Investment Fund (the first progress report was submitted to Council in May 2002 to request Tranche 2 and is attached in Annex 3). The report describes the project pipeline and the stage of development of each project proposal, discusses progress to date on program leveraging targets, and addresses cooperation and coordination of the Fund with the regional projects under the Partnership and other key partners. The report also presents information on knowledge sharing activities, a website and the Distance Learning Program for the Black Sea/Danube Basin initiated under the Investment Fund.

2. Country Ownership

(a) Country Eligibility

The Black Sea Danube Basin has 17 countries. 15 of them, Belarus, Bosnia-Herzegovina, Bulgaria, Croatia, Czech Republic, Georgia, Hungary, Moldova, Romania, Russian Federation, Serbia&Montenegro, Slovak Republic, Slovenia, Turkey, Ukraine, are eligible for GEF financing. The other two, Germany and Austria, are EU members.

(b) Country Drivenness

Countries that benefit from the Investment Fund have signed regional conventions to protect the Danube and the Black Sea from further ecological deterioration. Beneficiary countries, Germany and Austria developed this programmatic approach in collaboration with WB, UNDP and UNEP (Annex 1 para. 5-9 and Annex 2 para. 10). The Investment Fund supports agreed incremental costs of single country investments in nutrient reduction.

3. Program & Policy Conformity

(a) Project Design

The Strategic Partnerhsip and the projects developed under its framework respond to the objectives of OP8. Projects under the Investment Fund address investment, policy and regulatory reforms, capacity building and knowledge management/training. The Fund allows for streamlined procedures for project processing by GEF. Thirteen projects aiming at nutrient reduction in the agriculture, industrial and municipal sectors are at various stages of preparation/implementation. While the earlier projects were conceived along the lines of the three model projects (Agricultural Pollution Control, Municipal Tertiary Wastewater Treatment and Wetlands Restoration) presented in the May 2000 Partnership Framework Brief, the newer project concepts have broader scope of interventions and innovative modalities, such as public /private partnerships, constructed wetlands for advanced wastewater treatment and industrial pollution control. The portfolio of IF projects, including those to be financed under Tranche 3, is provided in Table 1 of the Progress Report.

(b) Sustainability (including financial sustainability)

Sustainability of country investments is addressed by individual sub-projects. A critical goal of the Investment Fund is to increase GEF grant leveraging against other project financing sources and to encourage other partners to take over larger shares of nutrient reduction investments (para 12, 13, 14, 15, 21, 22).

(c) Replicability

The Partnership is designed to produce replication measures throughout the Danube/Black Sea basin in order to achieve effective demonstrations of nutrient reduction in the different countries (Annex 1 para. 16, Annex 2 para. 18). Knowledge dissemination and sharing acitivies, including the website, distance learning program and practitioners’ workshops, have been supported under the IF to foster replication (para 20-22).

(d) Stakeholder Involvement

To be addressed by individual sub-projects.

(e) Monitoring and Evaluation

To be addressed by individual sub-projects

4. Financing Modality and Cost-Effectiveness

The GEF grant amount requested for Tranche 3 of the Investment Fund is US$34 million with an expected co-financing of US$ 275million (para.15). Cost effectiveness is to be addressed by individual sub-projects if feasible.

5. Institutional Coordination & Support

(a) Core commitments & Linkages

The Strategic Partnership and interventions supported under it are the result of joint efforts undertaken by the basin countries through the Danube and Black Sea conventions, the EU and other donors, and the three GEF Implementing Agencies. The Partnership builds upon the Danube Basin GEF international waters project and the Black Sea GEF international waters project (Annex 1 para. 5-9). In implementing the IF, the Bank has made an effort to mainstream Black Sea/Danube nutrient reduction objectives into its lending operations, notably by blending or closely linking IF projects with IDA / IBRD loans. This has been reflected in the Country Assistance Strategies. (para 12-14).

(b) Consultation, Coordination and Collaboration between IAs, and IAs and EAs, if appropriate

The Strategic Partnership has been developed jointly by the 3 GEF Implementing Agencies and the WB-GEF Investment Fund is the element focusing on single country investments. (Annex 1, para 8-10). In implementing the Investment Fund the Bank has been in regular contact with both UNDP and UNEP and cooperated with the European Commission and other donors (para 17-19)

GEF Council Work Program Submission

Project Executive Summary

Sub-Total GEF:

Co-financing

Sub-Total Co-financing:

TOTAL Project Financing:

Financing for associated activities if any: 0.04 Regional Distance learning Program