29872
March 5, 2004
Project Summary
Project name: Transboundary Diagnostic
2. GEF Implementing Agency: World Bank
Analysis and Strategic Action Program
Public Disclosure Authorized
Development for the Lake Victoria Basin

3. Country or countries in which the
4. Country Eligibility:
project is being implemented:
Kenya, Tanzania, Uganda, Rwanda, and
Conforms with criteria of GEF instrument and
Burundi
guidelines for OP8.

5. GEF focal area(s): International Waters 6. Operational program/Short-term measure:
OP#8
7. Project linkage to national priorities, action plans, and programs:
Public Disclosure Authorized
The project is in line with the recently completed Vision and Strategy Framework for Management
and Development of the Lake Victoria Basin and with the PRSPs of the countries, stressing a
healthy ecosystem, poverty reduction, and sustainable economic growth. The project will
contribute key inputs to the design of a follow-up project to the Lake Victoria Environment Project
and projects under the Nile Basin Initiative.

8. GEF national operational focal point and date of country endorsement:
Kenya: Letter from Mrs. Rachel Arunga, Permanent Secretary, Ministry of Environment, Natural
Resources and Wildlife, dated November 7, 2003.

Public Disclosure Authorized
Tanzania: Letter from R.O.S. Mollel, Permanent Secretary, Vice President's Office, both in his
capacity as GEF Focal Point for Tanzania and also as Chairman of the Regional Policy Steering
Committee, dated October 24, 2003.

Uganda: Letter from M.C. Muduuli, Deputy Secretary to the Treasury, Ministry of Finance,
Planning and Economic Development, dated November 3, 2003.

Rwanda: Letter from Mr. Cyprien Bishangara, Director for Environment (expected soon).

Burundi: Letter from Mr. Jerome Karimumuryango, Director General, Ministry of Environment
(expected soon).

Note that the endorsements from Rwanda and Burundi are late. These two countries will not be
Public Disclosure Authorized
involved in the project until their endorsements are received. At that time they will be transmitted
to the GEF Secretariat.

1

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9. Project Objectives and Activities

The objective of the project is to undertake a Transboundary Diagnostic Analysis (TDA) of the
Lake Victoria Basin in order to identify a Strategic Action/Investment Program (SAP) addressing
key environmental issues and poverty alleviation by promoting sustainable economic growth. The
SAP will be endorsed by the Regional Policy Steering Committee (RPSC) and the Ministerial
Committee on Lake Victoria Development Program (CLVDP) and with appropriate involvement
of Rwanda and Burundi.

Activities will include the preparation of survey papers to summarize existing scientific findings
and available data from the first phase of the Lake Victoria Environmental Management Project
(LVEMP) and other sources on topics such as: fisheries, water hyacinth, biodiversity, phosphorus,
toxic substances, persistent chemicals, pesticide residues, blue-green algae, nitrogen, and land use.
Numerous public consultations will be undertaken under this project and two regional workshops
convened. The work on the TDA will include an analysis of key environmental issues in Burundi
and Rwanda affecting the health of the Lake Basin Ecosystem (see Annex 1 on how key
subregional and regional initiatives complement each other).

Subsequently, the TDA will be analyzed in a cooperative, participatory manner to design a
Strategic Action/Investment Program (SAP) in the Lake Basin including identification of priority
interventions in Burundi and Rwanda. The SAP will be used as a input into the design of the
follow-on LVEMP2; the latter will finance some of the identified interventions in the SAP. The
TDA and SAP will serve as strategic documents for the Lake Victoria Development Program
(LVDP) of the East African Community and will in this regard guide domestic and external
investments promoting environmentally friendly market driven growth in the Lake Basin.

10. Project rationale:
Indicators:

To collate, analyze and identify available
Awareness raised amongst key stakeholders on the
transboundary environmental concerns
root causes of environmental degradation in the Lake
established under the LVEMP and using
Victoria basin (such as reflected in minutes from
other existing data. The analysis would
RPSC meetings focused on the Kagera and Lake
identify the key drivers contributing to the
Victoria Basin).
environmental degradation along with

environmental hotspots. The TDA will
TDA approved by the Ministerial Committee on
create a benchmark for further monitoring of Lake Victoria Development Programme (CLVDP)
the health of the Lake Victoria Basin
and focal points in Burundi and Rwanda.
ecosystem. The TDA will deepen the NBI

TDA undertaken within the framework of
TDA recognized by the NILE-COM (NILE-COM
the Nile Basin Initiative (NBI) for the Lake minutes).
Victoria Basin area.


To prepare an SAP in a consultative manner SAP approved by the CLVDP and focal points in
in order to identify key policy, legal, and
Burundi and Rwanda with policy, legal, institutional
institutional reforms and physical
and investment projects addressing key
investments needed to address the
environmental issues and promoting sustainable
2

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degradation of the environment and
economic growth.
opportunities for sustainable economic

growth.
Coordination and synergy established between

regional efforts addressing environmental issues in
the Lake Basin (CLVP minutes, NILE-COM and
NEL-COM Minutes); see Annex 1, which shows
how various initiatives complement each other.

To provide inputs into the design of regional Improved analysis in LVEMP2 project
projects addressing sustainable economic
documentation and NBI Kagera River Basin Project
growth and environmental issues.
documentation.

11. Project outcomes:
Indicators:


1. Policy, legal and institutional reforms
Policy documents, legislation enacted, regional EA
undertaken to promote cooperative
standards etc.
management and development.


Priority interventions financed under national and
2. Priority investments implemented
regional frameworks.
addressing the deterioration of the Lake

Basin Ecosystem within the framework of
Nutrient (P & N levels) stabilized or reduced in the
LVEMPII and the NBI.
Lake Victoria.

Water Hyacinth inflow from Kagera river reduced
and managed at non-nuisance levels in the Lake.

Environmentally friendly market driven economic
growth indicators.

12. Project activities to achieve outcomes Indicators:
(including estimated cost in US$ of each

activity):

TDA regional consultant ($85,300)
Satisfactory TDA produced and approved by

Ministerial Committees.
TDA national consultants ($179,500)


TDA stakeholder workshops ($96,600)
Workshops held.


Goods and operating costs including
national reviews and working groups in
support of TDA work ($95,600)

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Strategic Action Plan (SAP) main
SAP endorsed by the Regional Policy Steering
consultancy ($185,000)
Committee (RPSC) and the Ministerial Committee

on Lake Victoria Development Program (CLVDP)
and with appropriate involvement of Rwanda and
Burundi.

SAP training and workshops ($151,400)
Workshops held.

Regional Operations Officer (both for TDA
and SAP; $30,000)

Goods and operating costs including
national reviews and working groups in
support of SAP work ($116,600).

13. Estimated MSP budget (in US$)
GEF
MSP
$1,000,000
NBI/NELSAP
Kagera
River
Basin
$1,000,000

& Development Project

IDA LVEMP1 Supplemental Credit Uganda
$1,500,000

IDA LVEMP1 Supplemental Credit Tanzania
$1,500,000

PRHD grants (Kenya, Tanzania, Uganda)

$1,000,000
Government
of
Kenya
$


200,000

Government of Tanzania



$ 200,000

Government of Uganda



$ 200,000

TOTAL PROJECT FINANCING:

$6,600,000

14. Information on institution submitting project brief:

The Treaty for the Establishment of the East African Community (EAC) came into force in July
2000, and it mandates the EAC to coordinate management aspects of the Lake Victoria Basin
through its Committee for Lake Victoria Development (CLVD). A transitional framework, the
Lake Victoria Development Programme (LVDP) has been established in EAC. The Regional
Policy Steering Committee (RPSC), at its meeting on September 22-23, 2003, decided that the
Office of the Regional Executive Secretary for the Lake Victoria Environmental Management
Project would be the implementing entity for this MSP under the umbrella of EAC and that
Rwanda and Burundi would be appropriately included in work (participation at regional
workshops; work on specific transboundary issues related to Kagera river). The main reason for
the decision are the procurement and financial management capacity of the Office for project
implementation. It should be noted, however, that the EAC Secretariat has the responsibility for
the overall coordination of regional activities in the Lake Victoria Basin.

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15. Information on project proposers:
Kenya: Ministry of Natural Resources and Environment (to be confirmed; see
letter of Country Director Diop to Minister of Finance, January 29, 2004);
Tanzania: Vice President's Office (VPO)

Uganda: Ministry of Lands, Water and Environment

Rwanda: Ministry of Environment

Burundi: Ministry of Environment

16. Information to be completed by Implementing Agency: The Office of the Regional
Executive Secretary (RES) was established for the Implementation of LVEMP1. It is under the
Tanzanian Vice President's Office and is headed by Mr. Christopher Nyirabu, a former Permanent
Secretary. The Office of the RES is accredited for Bank procurement, which is an important
reason for its selection by the RPSC as the implementing agency, but the work of implementing
the grant is undertaken under the umbrella of EAC and with appropriate involvement of all five
countries.

17. Project identification number: P085782
18. World Bank contact person:
Christophe Crepin

Sr. Regional Coordinator

Africa Region, The World Bank

202-473-9727

ccrepin@worldbank.org
Alternate contact person: Ernst Lutz

Senior Economist, Task Team Leader for LVEMP

ESSD Operations for Eastern Africa

Africa Region, The World Bank

Phone: 202-473-1043

Fax: 202-614-0868

E-mail: elutz@worldbank.org
19. Project linkage to World Bank Country Assistance Program:
The Lake Victoria Environmental Management Program and potential follow-up activities are
reflected in the Country Assistance Strategies (CASs) of each of the participating countries.

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PROJECT DESCRIPTION
1. BACKGROUND & CONTEXT
Lake Victoria
Lake Victoria is the world's second largest freshwater lake (and Africa's largest). It features the
world's largest freshwater fishery with significant local consumption and regional and global
exports, in particular to the European Union, and it is a global center of aquatic biodiversity. Its
critical importance to the region's society and economy as a source of food, potable water,
transportation, agricultural water and power production is unquestionable. The lakeshore
populations are growing rapidly with among the highest population growth rates in the world.
The lake, the lakeshore and the lake basin are obvious engines of economic growth in countries
where poverty alleviation is the countries' first priority. In the early 1990's, recognition of the
region's growth potential was tempered with concern for possible degradation of the very same
lake and lakeshore attributes.

The lake has experienced a decline in water quality since the 1960's. Phosphorus concentrations
and algal biomasses have increased significantly, and filamentous and colonial blue-green algae
now dominate the algal community. Water hyacinth invaded the lake, and in the mid- to late
1990s reduced the efficiency of operation of the Owen Falls hydroelectric plant and blocked
access to ports, fish landings and watering points. The water quality changes favored the success
of the Nile perch and contributed to the reduction of endemic fish species.

Response of the Riparian Communities

While ecosystemic changes during the 1980s and early to mid-1990s were well documented, the
causes for these changes were uncertain because basic data had not been acquired on the quantity
and quality of inputs from rivers and the atmosphere, the lakewide concentrations of nutrients,
the internal circulation of waters and the exchange of nutrients between different water layers
and between sediments, the factors which may be limiting algal growth, and the relative
importance of different human activities in causing these changes.

The riparian countries recognized that sustainable economic development of the lake and its
regional resources was the goal. It was also recognized that the countries did not have sufficient
environmental information nor management approaches to insure sustainability of the
development of the lake and lake basin resources.

The three riparian countries around Lake Victoria (Kenya, Uganda, and Tanzania), with funding
from the Global Environmental Facility and the International Development Agency, responded
to these issues and other fisheries', land use, and socioeconomic concerns regarding Lake
Victoria through the Lake Victoria Environmental Management Project (LVEMP). LVEMP is a
comprehensive program conducted by the three countries. Its objectives were to understand the
environmental changes and to start stabilizing and/or rehabilitating the lake ecosystem for the
benefit of the 30 million people who live in the catchment, their national economies and the
global community.
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LVEMP, together with the EU Lake Victoria Fisheries Project (LVFRP) and other bilateral
efforts, have developed significant knowledge and technical capacity in the national agencies to
enable assessment of the environmental stresses confronting the lake and its catchment.
Additional research on key issues is needed, on the basis of which one can then prioritize actions
and set objectives for management of the lake and its resources. This should be done in a
participatory manner in which local community interests and concerns are appropriately
reflected. In many cases final objective setting will require agreement of the other riparian states
and the endorsement by EAC via its Secretariat. The successful setting of objectives for water
quality management requires a broad vision of what the riparian peoples desire for Lake Victoria
in the future. This will require blending individual sector knowledge and visions for their
resource with the more general and integrative interests of the communities that enjoy and
require beneficial uses of the lake and its tributary waters.

Current situation

The LVEMP was perhaps initially intended to be the "savior" of Lake Victoria during its project
period. But this was only partly feasible (such as with the very successful hyacinth control
program). It took a long time for the problems of the Lake and its catchment to become
apparent, and it will take time for these problems to be stabilized or reversed. The LVEMP
could thus be seen as a first step in a process that leads to a stabilization and/or clearly
identifiable improvement in sustainable use of the natural resources of the Lake. From this
perspective, the LVEMP had the objective of data collection, issue identification and
prioritization, and it presented an opportunity to pilot potential solutions to identified problems.

The LVEMP has resulted in an improved ability in the riparian governments to embark on a
long-term program of resource management and environmental improvement (such as through
equipment purchase and training). The LVEMP is now in its last year of implementation, and
many objectives have been achieved. To obtain higher synchronization among the three Partner
countries, to allow effective implementation with the remaining resources (incl. those of the
Supplemental, which just became effective in Uganda), and to reduce the need for "bridging
funds" between LVEMP1 and LVEMP2, the countries are in the process of seeking extensions
of the closing dates of the project to December 31, 2005.

Achievements of LVEMP include:

· Establishing and supporting fisheries "co-management units" with local fishing beach
communities in over 800 sites around Lake Victoria;
· Obtaining an estimated 80-90 percent reduction in surface coverage of water hyacinth in
the Lake through central and village-level biological agent rearing and
mechanical/manual means, thus reducing water hyacinth to non-nuisance levels except in
some hotspots including inflow from the Kagera river;
· Undertaking a "whole Lake" fishing pressure survey;
· Undertaking a harmonized "whole Lake" water quality/limnology survey;
· Undertaking three multisectoral management pilots (one in each country) of important
micro-catchments in the Lake Victoria Basin. These involved the soil conservation,
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catchment afforestation, wetlands management, microprojects, and water quality
components of the project working together to improve river/Lake water quality; and
· Assisting the three governments to meet European Union requirements to improve beach
sanitation and export certification of fish shipped to European Markets (in response to an
EU ban on export of fish to Europe that had a negative impact on the local economies).

2. PROJECT RATIONALE AND OBJECTIVES
The establishment of the East African Community and the subsequent materialization of an East
African Development Strategy (2001-2005) have designated the Lake Victoria Basin as a
regional economic growth zone. An important implication of this is the need to prepare
comprehensive strategies and action plans for sustainable development of the whole of Lake
Victoria Basin. Through funding from NORAD, the countries, together with EAC, have
undertaken a visioning process for the basin, which has engaged stakeholders in defining a long-
term vision for sustainable development of the Basin as well as their own future, and has
harmonized the visions of stakeholder groups across sectors, regions, and levels of governance.

The next step in the transition from the knowledge acquisition and capacity building exercise of
the LVEMP to an intervention that uses the information and capacity developed to promote
environmentally and socially sustainable economic development is for the riparian governments
and donors to agree upon a strategic framework outlining policies and actions for reaching the
goals of this vision and a sustainable future for the Lake Victoria Basin (while at the same time
research, data collection and analysis continue). It is crucial that these action plans be based on
the best information available on the current status of the lake in each of the Basin countries
(including Rwanda and Burundi) and are developed in a transboundary way, i.e. not allowing
separate, potentially different (regarding standards of environmentally and socially sustainable
development) national economic development plans to evolve. Without this common
standard/definition of environmentally and socially sustainable development across the whole,
private sector development will probably gravitate to the areas of weakest environmental control,
aggravating environmental damage in these areas and creating a disincentive to countries
adopting higher environmental standards.

The proposed GEF Medium Size Project (MSP) grant would support a Transboundary
Diagnostic Analysis (TDA) and a Strategic Action Program (SAP). In particular, the project
would work from the results of the visioning process which has been conducted over the past two
years to implement a TDA and SAP process, based on all the information collected during
LVEMP and from other sources. The work conducted would assist the riparian countries to
identify the priority transboundary concerns from a geographic perspective along with their root
causes in sectoral activities and then identify policy, legal, and institutional reforms and
investments to address them. Rwanda and Burundi would participate in the work, given the
importance of the Kagera river system for the Lake.

The TDA is needed for analysis and recording of living resources, environmental characteristics
and human uses, on a comprehensive, regional basis, according to agreed, consistent and
compatible procedures.

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Based on the results of the TDA, the SAP will propose investments and policy/institutional
reforms to address the issues, particularly those with transboundary effects. In this way conflicts
related to the use of the goods and services generated by ecosystems in the lake basin will be
minimized through a coordinated program of action conducted jointly by the three EAC Partner
countries and with appropriate involvement of Rwanda and Burundi.

3. REGIONAL INTEGRATION.
Experience from cooperative development efforts on shared water resources systems indicate is
that they can bring about closer regional integration and economies of scale that, in turn, will
promote peaceful solutions to common problems, common environmental benefits, regional
investments (e.g. hydropower development), economic growth, and increased food security.
Cooperative mechanisms such as the EAC and the Nile Basin Initiative (NBI) provide
opportunities for the riparian countries to reap greater benefits through harmonization of
legislation and joint management and investment frameworks, compared to developing or (mis-)
managing shared natural resources unilaterally which, ultimately, can lead to resource
depletion/degradation and conflicts with both upstream and downstream riparian countries. The
three Lake Victoria riparian countries serve as important `bridge countries,' as they are
downstream to DRC, Rwanda and Burundi, and upstream of Sudan and Egypt. With the
inclusion of Burundi and Rwanda in the project, it will be possible to assess the root causes of
the environmental problems in the Lake Basin. It will also be possible to create synergies
between the NBI Kagera River Basin project and other relevant "upstream" projects (see Annex
1).

A best case scenario for the future is constructive cooperation and sustainable exploitation of the
natural resources for mutual benefit of the EAC Partner countries and upstream and downstream
riparians. A worst-case scenario would include conflict, border tensions, and unconstrained
exploitation of resources by one or more countries, possibly leading to a collapse of the fisheries
resources and environmental deterioration with associated negative economic and health
impacts.

4. PROJECT COMPONENTS

Components of TDA and SAP processes will include:

Consultant assistance on specific aspects of the various issues identified and work on
how to link them to the development planning process;
· Active involvement of scientists from inside and outside the region as part of the
technical discussions;
· Integration of the results of the NORAD-supported Vision Statement Exercise into the
SPA;
· Partial funding of the national/regional management organization facilitating the work of
project preparation;
· Consultation meetings;
· Report preparation and dissemination;
· Public advertising and information dissemination.
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5. THE TRANSBOUNDARY DIAGNOSTIC ANALYSIS (TDA)
The process of jointly developing a TDA is important for countries so that they enhance
exchange of information and work together. National consultants are most often contracted and
inter-ministerial committees are often established in each country (where already established
committees do not exist) to provide that country's input of factual information on the shared
basin or marine ecosystem. From that, the transboundary nature, magnitude and significance of
water quality, quantity, biological, habitat or other conflict, degradation or threat can be
determined and countries can establish which are priorities for action compared with less
significant ones and those of national concern. In addition, the root causes for the conflicts or
degradation and relevant social issues are also included in the analysis so that actions to address
them may be determined later. The science community and key stakeholders from each country
will be expected to participate.

This process provides the opportunity for the Basin countries to understand the linkage among
problems and root causes. As a result, more comprehensive solutions may be identified that may
respond to many different conventions in a cost-effective manner. The TDA process allows
complex transboundary situations to be broken up into smaller, manageable pieces for action as
specific sub-areas of degradation or priority hotspots are geographically identified (with their
specific problem and root cause) within the larger, complex system. Some of these may be
deemed to be high priority, others may not. In this manner, different transboundary issues
existing in different portions of the Lake Victoria basin can be broken down into manageable
pieces for the diagnosis of root causes and the development of geographic-specific actions.

There have already been many resources spent on information and baseline data collection
during the current LVEMP. But data collection has been intermittent because of funding and
financial flow and disbursement issues. Both additional research and data collection is needed in
order to identify at local, national, and regional levels, those issues that constrain biodiversity
protection and environmentally and socially sustainable use of natural resources. Of particular
concern is the equitable use of the shared aquatic resource of Lake Victoria. In addition to
collection and regular sharing of data, a forum for all relevant stakeholders is needed to discuss
the information describing the existing environment and threats to its sustainable use, and reach
agreement on: (i) the nature and cause of identified problems in the basin; (ii) ranking the
problems in order of perceived magnitude; (iii) identifying national issues that are seen as
having a regional impact on the Lake; and (iv) transboundary issues affecting resource use and
Lake health.

At a meeting in Arusha, Tanzania, January 21-23, 2004, representatives from Kenya, Tanzania,
and Uganda agreed to address the following transboundary issues in the proposed TDA:

-
Atmospheric deposition of phosphorus and its relative magnitude to other sources
-
Fisheries biodiversity loss and over-fishing
-
Water hyacinth (and other possible infestations of aquatic weeds)
-
Blue green algae occurrence
-
Persistent organic pollutants, toxic substances, mercury, etc.
-
Biological Oxygen Demand (BOD)
-
Land use/sedimentation
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-
Climate change
-
Hydraulic conditions/water circulation
-
Diseases (human, animal and plant)
-
Conflicts in resource use e.g.
o
Cattle rustling
o
Cross-border fishing conflicts
o
Water use
o
Wetlands degradation
o
Forest destruction
o
Wildlife
o
Bush fires

These topics are expected to become chapters/sections in the TDA report.

The TDA preparation work will include:

-
Review information available from LVEMP and other sources to establish nature
of the problems, extent and geographical location;
-
Review the causes of the problems;
-
Assess extent to which the issues have been addressed over time and determine
the gaps;
-
Conduct National and Regional seminars;
-
Propose a preliminary long-term intervention programme (research or
management) based on the findings, which will then be elaborated into the SAP.

The Tasks will be carried out by five National consultants (one each for Kenya, Tanzania,
Uganda, Rwanda, and Burundi) as well as a regional consultant, who will be responsible for the
production of the integrated TDA report.

The Regional Policy and Steering Committee (consisting of Permanent Secretaries) and
Committee of Lake Victoria Development Programme (CLVDP) both have endorsed this work.

6. THE STRATEGIC ACTION PROGRAM (SAP)

Once one or several top priority transboundary concerns are identified by countries in a TDA
along with their root causes in sectoral activities in each country, countries would collaborate in
determining what actions they will take to address those priority concerns and express them in a
Strategic Action Program for the basin. As noted in the Operational Strategy, those actions
consist of policy/legal/institutional reforms and investments on both the multi-country and
national levels. They are developed by each country, often by consultants and with the support
of relevant Inter-Ministerial Committees as well as with participation by stakeholders at the
national and sub-national levels, and they are compiled and agreed at the multi-country level. In
some cases, development of individual national action plans (NAP) that may accompany national
economic development plans describe the commitments by individual collaborating countries
that respond to the regional SAPs they have produced.
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The SAPs serve to identify the country-driven reforms and investments countries pledge to seek
in order to remedy damaged systems or to prevent further degradation. The stress reduction
indicators then established will track whether implementation of the reforms and investments
have proceeded expeditiously.

Components of the SAP

The SAP will be organized by priority transboundary concern and state what policy, legal,
institutional reforms and investments each country will undertake and what ones are needed
regionally (for example a legal regime like the Lake Tanganika or Danube Convention
expressing commitments of each government). The SAP will specify what each country will do
about the priority issues identified, e.g. by reducing phosphorus loading and BOD, etc. Spatial
development planning may be indentified in the SAP as one option for addressing some concerns
in the Lake Victoria Basin, but this should not be pre-supposed at this point in time. In parallel
with the planned GEF work a study will be undertaken (financed by PHRD) to assess the
potential of spatial planning for environmental management of the Lake Victoria watershed.

The Draft SAP will be reviewed in workshops as part of the stakeholder involvement plan. The
Task of preparing the SAP will be carried out by a firm in collaboration with national staff. The
requirement for involvement of national staff of all five countries will be specified in the TORs.

The SAP process will be a direct result of the TDA. The nature and magnitude of environmental
and related social issues in the Lake Basin are large, and information is expected to increase over
time. Therefore, the SAP prepared through this MSP would be a "baseline" that would need to
be updated occasionally to determine both progress being made to address identified issues and
to add/remove issues from those initially presented in the SAP. The SAP should be seen as a
"living" document.

The regional workshop to discuss and agree on actions to address priority transboundary issues
within the Lake Basin would be convened by the consultancy firm contracted for the SAP work.
Its objective would be to identify the top 10-12 priority environmental issues with in the Basin
and identify an action plan to scope the policy and institutional reform investment needed.

7. PROJECT OUTPUTS

The results of the TDA and SAP processes should help provide a consensus on transboundary
issues and agreement on the way forward in areas where such agreement has not yet been
achieved.

The TDA will produce a report as a result of stakeholder consultations, which should enable
stakeholders to discuss and reach agreement on:

· The nature and causes of transboundary problems in the basin, expressed on a
geographical basis;
· Rank ordering of the problems in order of perceived magnitude;
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· Identification of national issues that are seen as having a regional impact on the lake; and
· Transboundary issues affecting resource use and lake health.

The final SAP for the Lake Victoria Basin will describe how the countries have agreed to
proceed in dealing with transboundary issues in the basin. In particular, the SAP should contain
agreement on the policy, legal, and institutional reforms as well as investments to be undertaken
by each nation as well as regionally to address the transboundary priorities. The regional actions
are to be undertaken within a multi-country institutional framework.

8. IMPLEMENTATION ARRANGEMENTS

The Regional Executive Secretary of LVEMP (office in Dar Es Salaam, Tanzania) will manage
the implementation of TDA and SAP in consultation with the EAC Secretariat (Arusha,
Tanzania) for coordination purposes.

8.1 Budget
The proposed TDA and SAP constitute the GEF alternative to the ongoing baseline work of the
last stage of the Lake Victoria Environmental Management Program. The cost of the
incremental financing needed for the GEF Alternative is anticipated at $1.0 million.
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Budget Details for TDA Preparation (US$)

Details BR
RW
TZ
KE
UG
Total
National Consultants
34,000 34,000 43,300
41,760
42,440 179,500
Training and Workshops at National
6,800
6,800 15,000
12,000
13,000
51,600
lLevel
Goods 2,000
2,000
8,750
8,350
8,500
27,600
8,000
8,000 21,250
19,000
19,750
68,000
Operating Costs
50,800 50,800 103,300
96,110
98,680 399,700
Sub-total
15,000
15,000
Regional Operations
Officer
85,300
85,300
Regional Consultant
45,000
45,000
Regional Workshop
500,000
Total
Budget Details for SAP (US$)

Details BU
RW
TZ
KE
UG
TOTAL
Financial Audits
1,000
1,000
3,500
3,000
4,000
12,500
Performance Audits
6,500
7,000
6,000
19,500
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Training and Workshops
12,000 12,000
28,490
24,048
24,862
101,400
at National Level
Goods
2,000
2,000
8,750
8,350
8,500
29,600
5,000
5,000
36,250
20,000
20,750
87,000
Operating Costs
Sub-total 20,000 20,000
83,490
62,398
64,112
250,000
Regional Consultancy
185,000
185,000
Regional Operations
15,000
15,000
Officer
Regional Workshop
50,000
50,000
Sub-total 250,000
500,000
Total
The following table summarized the total budget allocations for
the TDA and SAP processes:

Category TDA
SAP
Total
Consultancy, services, audit
290,400
232,000
522,400
Training and Workshops (national
96,600
151,400
248,000
and regional)
Goods 27,000
29,600
56,600
Operating Costs
86,000
87,000
173,000
Total: 500,000
500,000
1,000,000
8.2 Procurement Plan

For the TDA and the SAP, the regional consultant (preferably a firm) will be procured through
the Regional Secretariat of LVEMP to assist the countries and the EAC Secretariat to prepare the
TDA and the SAP for the entire basin, working closely with the national interministerial
committees. The role of the Regional Secretariat will include: procurement of the consultant and
monitoring consultants' work. The regional consultant/firm will be contracted to organize and
manage the regional TDA and SAP workshops in coordination with EAC. The National
Secretariats will be responsible for contracting national consultants and for assisting and
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monitoring the work of the regional consultant/firm in their respective countries. They will also
participate in the evaluation process at the regional level.

The TORs for the Regional and National consultants will be prepared by the Regional and
National Executive Secretaries in consultation with the EAC Secretariat.

8.3 Funds Management

The Regional Secretariat will manage the funds on behalf of the five countries. The Regional
Secretariat will open a Special Bank Account for the GEF funds. Expenditure would be based
on agreed activities at the regional and national level. Disbursement will be effected on the
advice/request of the Secretariat concerned (or the GEF Focal Points in Rwanda and Burundi)
and the Project Manager (Regional Executive Secretary).

8.4 Auditing

Expenditures of GEF funds will be audited by appointed auditor as required.

9. SUSTAINABILITY ANALYSIS AND RISK ASSESSMENT
The TDA/SAP process will feed into the design of the management plans and any follow-on
project in the Basin, in particular, the envisioned LVEMP2. The top priorities of Kenya,
Tanzania and Uganda are poverty reduction and economic development. Environmental
protection as a "stand-alone" activity may have limited support, but sustainable use of natural
resources is part of growth and poverty reduction. Donors are currently willing to support an
environmental conservation agenda in developing countries, which is related to or underpins
growth and poverty reduction; therefore, significant donor support for Lake Victoria remains.
The long-term risk to this GEF investment can therefore be viewed as small. To mitigate this
risk, the preparation process for LVEMP2 will review options for making the institutional and
policy reforms more sustainable including through fish levy trust funds.

The governments have decided to use this project as an instrument of cooperation and mutual
understanding for the benefit of their natural ecosystems, the environment and sustainable
development of all three countries. The LVEMP is testimony to this desire. Further, it is
assumed that work already done in the LVEMP has led to the correct identification of some or
many of the problems. In this regard, the TDA and SAP will be of significance, and may have to
be updated occasionally to pave the way for long-term, sustainable management of the basin.

10. STAKEHOLDER INVOLVEMENT
Stakeholder participation has already played a significant role in the conceptual framework for
the TDA and SAP processes. The proposal was developed through:
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· Conversations among scientists and line managers in the natural resource sectors of the
governments of Tanzania, Uganda and Kenya over the last 3 years;
· A formal meeting of Permanent Secretaries of natural resource management ministries of
these three countries (Ministries of Natural Resources, Environment, Agriculture, Water
and Lands) in June 2001;
· A workshop held in Washington during August 2001 and attended by the GEF
Secretariat, the Permanent Secretaries responsible for Ministries dealing with
environment, agriculture, lands, water and natural resources in Kenya, Tanzania and
Uganda, project managers of the LVEMP, and respected resource persons from both
within and outside of the World Bank;
· Participatory visioning work involving large numbers of communities and stakeholders;
· Stocktaking work by the countries and the Bank during spring/summer of 2003, and
culminating in an EAC-convened and World Bank-supported workshop in Arusha,
September 8-10, 2003, which assessed and discussed achievements of LVEMP1 and
lessons that can be drawn for LVEMP2;
· Regional Policy Steering Committee at its meeting in Jinja, September 22-23, 2003; and
· A meeting of representatives of Kenya, Tanzania, Uganda, the EAC Secretariat and the
World Bank in Arusha/Tanzania, January 21-23, 2004, during which this proposal was
strengthened and where discussions were held on specifics of the tasks, the budgets,
procurement, financial management, the stakeholder participation plan, and the
involvement of Rwanda and Burundi.

During both the TDA and SAP processes, series of consultations at both national and regional
levels will be conducted, drawing in participants and stakeholders within the Lake Victoria Basin
in each of the participating countries.

A stakeholder participation plan was discussed and agreed at the recent project preparation
workshop (EAC Secretariat January 2004), Stakeholders in the Lake Basin will participate at two
levels: the regional and the national in the five countries (Kenya, Tanzania, Uganda, Rwanda,
and Burundi). The participation strategy will be as much as possible "bottom up" and
interactive.
For the Transboundary Diagnostic Analysis (TDA), workshops at National level will be
organized as follows:

1. One scientific workshop in each country after a draft has been prepared by national
consultants. This will involve scientists to discuss and agree on the analysis of trans-
boundary issues identified by the consultants. About 30 scientists will be involved.

2. One National workshop for NGOs, local governments, civil societies, etc. The aim of this
workshop is to build consensus on trans-boundary issues (as reflected in a revised draft of
the consultants). Participants are expected to be about 100.

3. One national workshop for Members of Parliament (MP) who are members of the
Environment and Natural Resources Committee (again based on another revision of the
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draft national TDA). The purpose of this workshop is to achieve political support from
the MPs.

At the regional level a TDA workshop will be organized (expected to be convened by the East
African Community Secretariat, EAC-SEC, but organized and managed by the regional
consultant/firm) to achieve consensus on regional issues identified and analysed by the National
consultants and endorsed by the National Scientists, National MPs, and other stakeholders in the
basin. This regional workshop will include about 50 eminent scientists from all five countries
and perhaps some international ones. National consultants working on the TDA will be
requested in their TORs to outline possible remedial actions (policy and institutional reforms,
investments, etc.). After this workshop, a regional consultant will prepare a final draft of the
TDA.

The same workshop will also discuss, in a preliminary/brainstorming manner, the tentatively
suggested remedial actions that form the seed for the Strategic Action Plan (SAP). The
consultant firm contracted for the SAP would prepare a preliminary draft SAP in part based on
suggestions at the end of the TDA drafts. These preliminary ideas would then be used, along
with the final draft TDAs, in workshops in selected communities and at selected workshops at
sub-national and national levels (bottom-up process).

Once that process has been completed in the countries and a more solid draft SAP has been
prepared, a second regional workshop (also expected to be convened by the EAC Secretariat, and
organized and managed by the regional firm) will be held for the purpose of discussing and
agreeing on the SAP. This workshop will involve the regional NGOs, development partners, EA
legislative assembly, MPs, etc. including around 100 participants. A final draft SAP would be
prepared after the workshop for endorsement by ministerial-level committees (CLVDP).

11. ENDORSEMENT PROCESS

Stakeholder participation is a key feature of the TDA/SAP process for the Lake Victoria Basin.
The regional decision/endorsement framework established (see annex 1) ensures adequate
participation of all key stakeholders. The East African Community has established a multi-
sectoral Project Steering Committee (RPSC) at the level of Permanent Secretaries which guides
the implementation of the project. Decision making is taking place at the level of the multi-
sectoral Council for Lake Victoria Development Program (CLVDP) at the level of Ministers.
Representatives from Burundi and Rwanda will be invited at the appropriate level to both the
RPSC and the CLVDP Meetings.

The SAP will be endorsed by the Regional Policy Steering Committee (RPSC) and the
Ministerial Committee on Lake Victoria Development Program (CLVDP) and with appropriate
involvement of Rwanda and Burundi. The broader Nile Basin Initiative framework provides
opportunities to share information and to coordinate a regional development approach that goes
beyond the Lake Basin itself.

12. INCREMENTAL COST ASSESSMENT
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As described in the Project Description section above, the Lake Victoria Environmental
Management Program, the baseline to the proposed project, is now in its last year of
implementation, and many objectives have been achieved. The participating countries have
obtained supplemental loans from the World Bank for the last eighteen months of
implementation ­ through to December 2005 ­ the anticipated timeframe of the proposed project.

The proposed TDA/SAP processes are considered incremental to this on-going work, given that
the countries would not otherwise engage in transboundary, participatory assessment and
planning processes without this GEF grant. GEF grant funding will play an important role in
demonstrating the appropriateness of the proposed approach to riparian governments, supporting
them as they continue to cooperate on management initiatives for the Lake Basin.

The proposed project will help the riparian countries of the Lake Victoria Basin overcome
regional barriers to working collaboratively and help them resolve priority transboundary
environmental concerns identified in the TDA and SAP processes. The proposed project ensures
coordination among implementing agencies, countries, and other actors, and generates
programmatic benefits for the global environment that would not otherwise be achievable. This
approach is fully in line with the GEF Operational Strategy for International Waters, as well as
for the Waterbody Based Operational Programme (#8). Additionally, the project is fully
consistent with the Strategic Priorities for the International Waters focal area, particularly
priority 1 ­ catalyzing financial resources for implementation of reforms and stress reduction
measures agreed through TDA-SAP processes.

Incremental Cost Matrix

Component
Cost
Local Benefits
Global Benefits

TDA
Baseline
3,000,000 · National studies and
· Coordination among
assessments completed
riparian countries
providing improved
established for discussion
information for
of lake basin management
national decision
issues.
making.
· Biodiversity and genetic
· Regional Executive
resources conserved for the
Secretariat established
benefit of the riparian
and operating, resulting
communities and the
in increased national
global community through
and regional staff
the coordinated
capacity for natural
management of natural
resource management.
resources by the Regaional
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Secretariat.

Alternative
3,500,000 Enhanced information
· Information analysis and
available for resource
knowledge generation
managers to plan and
beneficial to the LVBC.
utilize basin resources.
· Ensured knowledge
generated and lessons
learned transferred to
entire basin.
· Improved cooperation
among member states to
diagnose and discuss
riparian management
issues.
Increment
500,000
SAP
Baseline
2,600,000
· National planning for · Regional Executive
lake resource
Secretariat established
management.
and coordinating basin-
wide activities.

Alternative
3,100,000
Harmonization of national · Coordination of
natural resource
knowledge, development
management programs in
of basin-wide, regional
order to achieve, to the
plans for resource
maximum extent possible,
management.
the reversal of increasing
· Regional agreement
environmental
reached on stress-
degradation.
reduction plans and
actions needed,
contributing to the
effective management of
a large, transboundary
water body of global
significance.
· Participating countries all
benefit from cooperative
planning and resource
management.
Increment
500,000
TOTAL: 5,600,000 Baseline
6,600,000 Alternative
1,000,000
Increment

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13. IMPLEMENTATION PLAN
Month
1
2
3
4
5
6
7
8
9
10 11 12 13 14 15
Activity:

TDA:
National
x
x
x
X
Consultations
Regional
X
Consultations
Final
Report
x
X

SAP: National
x
x
x
x
X
Consultations
Regional
X
Consultations
Final
Report
x
X
Final
SAP X
14. MONITORING AND EVALUATION
During the preparation phase of the TDA and SAP only "process indicators" will need to be
monitored. These simply include whether the TDA and SAP have been agreed and providing
evidence of stakeholder involvement, functioning Inter-Ministerial Committees, and agreement
on joint institutional frameworks to be pursued not only among the EAC countries but including
Rwanda and Burundi.

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Annex 1: Regional projects and coordination frameworks related
to the Lake Victoria & Kagera River Basins
NILE COUNCIL OF MINISTERS OF WATER AFFAIRS (NILE-COM)
n
l
a
t
i
o
REPRESENTS ALL TEN NILE BASIN COUNTRIES
n
a
i
o
i
n

g
e
r
d
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o
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l
EAC / CLVDP

NILE-COM

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n
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NEL-TAC reports

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a
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National
RPSC
RPSC
RPSC
Nile-TAC

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mechanisms
Regional Project
Regional Project
Regional Project
t
t
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a
Steering Committee
Steering Committee
Steering Committee
j
e
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RPSC
r
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with Rwanda and
o
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Burundi during
TDA/SAP
National
NBI/NELSAP
LVEMPII
GEF/FAO PDF B
Nile Basin
programs
Kagera River Basin
TDA/SAP
Transboundary
In the Kagera
Management and
Preparation of
Environmental
River Basin
Development
Joint analysis of
regional agriculture
Project
Countries
Project
environmental
project



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and sanitation
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Burundi, Tanzania,
Burundi, DRC,
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