PROJECT INFORMATION DOCUMENT (PID)
CONCEPT STAGE
Report No.: AB707
Project Name
Integrated Ecosystem Management of Neretva and Trebisnjica River
Basins Project
Public Disclosure Authorized
Region
EUROPE AND CENTRAL ASIA
Sector
General water, sanitation and flood protection sector (100%)
Project ID
P084608
GEF Focal Area
International Waters
Borrower(s)
BOSNIA AND CROATIA GVTS
Implementing Agency


Croatia Ministry of Environmental Protection and Physical Planning
Croatia


Republika of Srbska Ministry of Agriculture and Water Resources
Bosnia and Herzegovina


Federation of Bosnia Herzegovina Ministry of Physical Planning and
Public Disclosure Authorized
Environment
Bosnia and Herzegovina

Environment Category
[ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined)
Safeguard Classification
[ ] S1 [X] S2 [ ] S3 [ ] SF [ ] TBD (to be determined)
Date PID Prepared
February 20, 2004
Estimated Date of
January 11, 2005
Appraisal Authorization
Estimated Date of Board
July 26, 2005
Approval


Public Disclosure Authorized
1. Key development issues and rationale for Bank involvement

The Neretva River (220 km), the largest river in the Eastern Adriatic watershed, is an international
waterway shared by Bosnia Herzegovina (BiH) and Croatia. Within BiH it has additional transboundary
characteristics as it is shared by two entities - the Federation of Bosnia Herzegovina (FBiH) and the
Rebuplika of Srpska (RS)1 ­ each with its own government and body of law. The Trebisjnica River (99
km) and its basin are located entirely in the RS but are hydraulically linked to the Neretva River. Taken
together, these two rivers comprise the Adriatic watershed of BiH. Although covering only 24.3% of BiH
territory (10,000 km2), the Neretva and Trebisjnica River Basins (NTRB) are relatively rich in water
resources draining 63% of all surface water flows in BiH (the rest draining to the Danube/Black Sea).
Annual precipitation ranges from 1500-2000 mm. The NTRB ecosystems include wetlands of
international significance. The lower course of the Neretva River from Mostar (FBiH) to the river's
mouth (Croatia) contains the largest and most valuable remnants of the Mediterranean wetlands in the
Eastern Adriatic coast and is one of the few areas of this kind remaining in Europe. On the Croatian part
of the delta, 1700 hectares are protected in five distinct reserves. The NTRB are considered to be of great
Public Disclosure Authorized
cultural/historic importance with ruins dating back to the 4th century B.C.

1 The state of Bosnia and Herzegovina is regulated by the Dayton General Framework Agreement for Peace (1995) and is
comprised of three separate administrative units: (i) the Federation of Bosnia Herzegovina, (ii) the Republika Srpska and (iii) the
District of Brcko

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The NTRB play an important part in the economies of both countries and in the livelihoods of over
300,000 people many of them rural poor (approximately 35,000 in Croatia, 40,000 in the Trebisjnica RB,
the rest in FBiH primarily in the lower Neretva water course where the basins' largest city, Mostar,
population 100,00, is located.) The rivers are used by the population for transport, gravel and sand
extraction, recreation, fisheries, fishing and abstraction for drinking water, irrigation and energy. There
are several multi-purpose reservoirs in each basin primarily for hydropower operations but also providing
for flood protection, water supply of industry and irrigation, and provision of minimum biological flows.
There are five hydropower plants (HPP) on the Neretva River with four more under consideration; and
one HPP on the Trebisjnica River). Southeast Europe regional development activities planned in the
NTRB include expansion of the existing regional traffic routes which criss-cross the basins (e.g. Sarajevo
­Ploce railroad, Adriatic Highway) and potential development of hydropower. The natural beauty and
cultural heritage of the NTRB support some local tourism but the potential is largely untapped.

The problem is that poor management of water resources in NTRB is resulting in degradation, in terms of
quality and quantity, to the resource itself as well as to the basins' ecosystems, particularly wetlands. The
aforementioned regional and additional river basin development activities in the NTRB can be expected
to add to the existing water resource management challenges. Pressures on water resources and their
associated ecosystems are inter-related and include: conversion of wetlands and other critical natural
habitats to agriculture; illegal land possession and construction in sensitive and/or protected areas;
excessive illegal hunting and fishing in the wetlands; unsustainable agriculture practices including
excessive use of pesticides; interference with the hydrological regime of the NTRB for agricultural,
municipal, industrial and hydropower use of water; inadequate flood control; water pollution from point
(municipal and industrial wastewaters) and non point (agricultural) sources; and lack of public awareness
and involvement. While these pressures represent competing water demands by users, a characteristic of
many river basins, in the case of the NTRB the problem is that demands for water resources are not
balanced through any comprehensive and coordinated strategy. The environment, as a special water-
using sector, is generally ignored resulting in deterioration of the ecosystems. The cumulative negative
impacts of these pressures include a documented loss of habitat and biodiversity; land degradation and
reduced agricultural productivity; sedimentation and erosion leading to reduced efficiency of reservoir
operations; salinization; and salt water intrusion. Local and transboundary relationships are strained as
promoters of different scenarios and strategies for development of the NTRB are often in conflict with
one another and with local communities.

The problem has resulted from a lack of sound and harmonized institutional, legal and policy frameworks
for water resource management in each country and across borders. Croatia and the entities in BiH have
their own water legislation, water rights, water management practices, and institutions, and non are
coordinated. No institution has been effective in maintaining adequate monitoring and evaluation of the
evolving supply, demand and quality of water at a level of detail permitting adequate planning and
regulation. The lack of a comprehensive hydrological monitoring system means that there is little reliable
scientific data which hampers the rational allocation of water rights through concessions. Management
tools are weak. Water use is theoretically based on a permit system in each country but the basis for, and
enforcement of, water use licenses and permits is, at best, inadequate. The linkages between science and
management are non-existent, thus presenting a further obstacle to sound decision making. For instance,
the minimum biological flow is in theory to be considered in operation of HPPs, by permit, but the figure
was established so long ago (20+ years) that no one knows the validity of the calculation anymore and so
the whole concept is essentially ignored with deleterious impacts on the downstream ecosystems. Water
pricing, particularly for irrigation, is ineffective, e.g. in the delta region, where land tenure rights are
vague, charges for irrigation water are essentially ignored. In such a poorly managed setting, neither the
potential benefits to the river nor the benefits from the river can be realized. Water is simply "up for
grabs".

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However, there is an evident increasing realization of the importance of transboundary cooperation in
improved water resource management. Each country and entity have identified improved water resource
management and biodiversity conservation as key development and environmental issues. Each country's
National Environmental Action Plan notes improved water resource management as a top priority. The
BiH PRSP identifies improved water resource and land management as key environmental priorities
requiring action. The Croatia Biodiversity Strategic Action Plan (BSPA, 2000) identifies the Neretva
Delta wetlands as the most threatened ecosystem in the country. The World Bank has recently (2002)
recommended increased regional and transboundary approaches to water resource management and
biodiversity conservation ("Water Resources in the Europe and Central Asia Region") and identified
improved management of transboundary rivers in South Eastern Europe as a priority. The Mediterranean
Strategic Action Program (SAP) to Address Pollution from Land-Based Activities (MED POL) and
Mediterranean SAP for Biodiversity (MED BIO) promote reduction of the pollution load to the Adriatic
part of the Mediterranean Sea and protection of key habitats, respectively. Both BiH and Croatia support
the Barcelona Convention for the prevention of pollution of the Mediterranean and have signed and
ratified all its protocols. BiH and Croatia are party to the Convention on Biodiversity Conservation, and
the Ramsar Convention on Wetlands of International importance.

2. Proposed
objective(s)

The objective of the project is to improve the effectiveness of institutions for the regulation, control and
management of water resources within the NTRB. The project is consistent with GEF Operational
Program on Integrated Land and Water Multiple Focal Area under the International Waterways
Operational Strategy (OP#9) as it will: (i) provide a comprehensive framework to manage natural
systems across sectors and political or administrative boundaries within the context of sustainable
development; (ii) utilize inter-sectoral and participatory approaches to transboundary water resource
management and implementation on an ecosystem scale; and (iii) facilitate prioritization and strategic
sequencing of needed policy reforms, investments, and other interventions. The project objective and
activities are fully consistent with the European Union (EU) Water Framework Directive (WFD)2. The
project will have substantial benefits with a direct impact on the populations of the Project area (300,000).


3. Preliminary
description

The strategy to meet the project objective is to: (i) introduce an integrated water resource management
approach, on a transboundary river basin level, which ensures the maintenance of critical water dependent
ecosystems; (ii) support biodiversity conservation within key water dependent ecosystems; and (iii)
contribute to economic growth in the project region. The project is to be implemented over five years and
its components are currently envisioned as:

Component 1. Transboundary water resource management on the Neretva and Trebisjnica River
Basins (US$3.0 million). This component would finance the development and implementation of
institutional and legal mechanisms for transboundary river basin management; develop a NTRB

2 The EU Water Framework Driective (2000/60/EC), entered into force in 2000, is a legislative framework to protect and
improve the quality of water resources within the EU. Member states must incorporate the WFD into ntational law. New
member states are expected to transpose the Directive by the date of their accession. Aspiring member states are working
towards WFD objectives. The WFD requires a river basin management plan, on a transboundary level if the waterway is
international, which provides a detailed account of how the objectives set for the river basin (ecological status, quantitative status,
chemical status and protected area objectives) are to be reached. Maintenance of good ecological status of the basin is required.

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management plan utilizing an integrated water resource management approach and finance the studies
to support the plan, e.g an environmental flows assessment; support transboundary management tools
including a basin-wide measurement, monitoring, modeling and database management system; training
and capacity building;

Component 2. Ecosystem management and biodiversity conservation ($2.5 million). This component
would finance activities for the conservation and protection of key and sensitive ecosystems and
biodiversity within the NTRB. This could include an inventory of the biodiversity resources of the
project region identifying key habitats, species and ecosystems for protection and/or restoration and
development of specific strategies to address problems, e.g. hunting strategy; studies to determine the
influence of water regime on ecosystems; identification of basin ecological objectives; improved
facilities for conservation, e.g. nature museum, protected area facilities; restoration works in cultural or
historical monuments; and protection and enforcement capacity building. This component would also
finance a research grants program to promote transboundary exchange and cooperation on scientific
studies.

Component 3. Community based resource conservation (US$1.5). This component would support
demonstration projects which show how communities living in vulnerable land/water environments
can benefit from improved opportunities that arise when water resources and ecosystems are managed
more effectively, e.g. in agriculture, fisheries. It would finance a rural tourism assessment and
strategy. This component would also finance a small grants program open to a wide range of
stakeholders for projects which support the objectives of the project. It would also support a
transboundary public forum of water and land users; and NGO activities in public education and
awareness.

Component 4. Project Management (US$1.0 million) This component would support the operations of
a Project Implementation Unit in each country. In BiH a local level PIU will be established in Mostar
as part of an existing PIU for a WB project. In Croatia the PIU will be in Croatia Waters within the
unit which manages the Croatia Coastal Pollution Control Project. In both countries the PIU will
coordinate project implementation by the different agencies which would be involved, e.g. water,
environment, agriculture, energy.

4. Safeguard policies that might apply.

The project triggers OP/BP 4.01 Environmental Assessment. The project is Environmental Assessment
Category B. The project triggers OPO/BP/GP 7.50 International Waterways as the Neretva River is
transboundary with Bosnia Herzegovina and Croatia. The Trebisjnica River is located entirely in Bosnia
Herzegovina. The project may trigger OP4.11-PPN 11.03 Cultural Property as the project might finance
restoration works in cultural or historical monuments in the Neretva Delta in Croatia. This will be
determined during project preparation.

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5. Tentative
financing

Source:
($m.)
BORROWER/RECIPIENT
5
GLOBAL ENVIRONMENT FACILITY
8

Total
13

6. Contact
Point

Contact: Rita Klees

Title:
Sr. Environmental Specialist
Tel: 202/473-4186
Email: Rklees@worldbank.org

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