Project information document (pid) appraisal stage

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Report No.: AB1459

Project Name

Brazil - Ecosystem Restoration of Riparian Forests in São Paulo




General agriculture, fishing and forestry sector (40%);Agricultural extension and research (30%);Other social services (20%);Forestry (10%)

Project ID


GEF Focal Area



Implementing Agency

State Secretariat of Environment

Av. Frederico Hermann Jr.




Tel: 55(11)3030-6039 Fax: 55(11)3030-6039

Government of Sao Paolo


Environment Category

[ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined)

Date PID Prepared

March 14, 2005

Date of Appraisal Authorization

March 14, 2005

Date of Board Approval

June 21, 2005

  1. Country and Sector Background

The State of São Paulo (248,809 km2) has witnessed significant agricultural intensification in the last fifty years, and manual crop cultivation is now rare in the State. Such agricultural intensification, often characterized by unsustainable agricultural practices, has led to increased strain on natural resources, and resulted in severe land degradation. Moreover, in the past, many policies were undertaken which fostered and supported the cultivation of floodplains and other riparian areas as a way to boost crop production levels. Currently in the State of São Paulo, almost the totality of native riparian vegetation in productive agricultural landscapes is missing or suffering from severe levels of degradation, with about one million hectares of riparian zones devoid of any significant forest cover, making the soil susceptible to erosion which, in turn, carries organic matter and sediments into the aquatic ecosystems.

The degradation of the State’s native forests, along with the unsustainable use of riparian zones, have seriously affected the structure and function of the State’s ecosystems, and led to loss of biodiversity, increased carbon dioxide emission, and other negative ecological and socio-economic consequences, including higher levels of erosion and a greater number of gullies leading to sedimentation of reservoirs, headwater areas and springs, and to less productive soils, which disproportionately affects low income farmers who are rarely able to afford the additional costs of fertilizers. Approximately 40% of the State area is classified as highly or very highly susceptible to erosion, with a significant percentage of the surface areas already exhibiting moderate to deep gullies and rills, clear evidence of transportation and deposition of top soil particles downslope through surface wash, and severe loss of vegetation cover along stream banks. A 2002 publication by the State Secretariat of Environment estimated annual soil loss in the state to be around 200 million tons. In response to this critical situation, the GoSP is supporting a number of initiatives addressing land degradation issues, the largest being the World Bank-financed Land Management III Project, under full implementation for the last three years.
The rehabilitation and restoration of riparian zones is of special strategic relevance to the broader objective of restoring degraded lands in São Paulo, due to the extremely important role played by such areas in the overall ecological balance (e.g.: provide habitat and refuge for terrestrial and aquatic organisms, and its shade keeps the water at temperatures more appropriate for fish and other aquatic organisms – of special importance in the drier Cerrado biome; helps retain soil particles and organic matter before they enter streams and rivers). Under current legislation1, riparian lands and their vegetation (defined as anywhere from 30 to 200 meters on each side of the river, depending on width of the water body) are defined as areas of permanent preservation (APPs), and cannot be used for agro-pastoral activities. The restoration of degraded riparian vegetation is an essential tool for sustainable land management and its implementation will result in highly significant socio-environmental benefits at the local, state, and global levels.
Currently, the adoption of effective measures to address the above-mentioned issues in São Paulo, and particularly the implementation of riparian forest restoration projects, faces the following constraints: (i) rural landowners have little interest in projects aimed at restoration and conservation of riparian forests because, broadly speaking, they understand that an obligation to conserve riparian forests results in loss of farm productivity due to productive areas within their properties being taken out of cultivation; (ii) existence of insufficient mechanisms to raise and channel funds for restoration of riparian forests, and inefficient use of the resources that already exist; (iii) qualitative and quantitative deficit in the supply of seeds and seedlings of native species, resulting in an inability to respond to increased demand from state-wide initiatives for restoration of riparian forests; (iv) insufficient on-the-ground knowledge of methodologies for restoration of riparian forests in the various ecological and socio-economic rural realities present in the State; (v) lack of efficient instruments for integrated planning and monitoring of riparian forest restoration programs; and (vi) lack of recognition by society in general of the importance of riparian forests, and incipient status of current mobilization, technical capacity, and training programs for those involved in restoration and conservation programs.
Under present circumstances, any attempt to define significant targets for restoration of riparian forests in the State of São Paulo would be associated with high risks, as has been the case in prior situations, since the tools and resources necessary to induce/foster such large scale restoration of riparian lands are still not readily available. It is, thus, imperative to devise and employ strategies that would further promote the design and implementation of a long term, statewide Riparian Forest Restoration Program, with qualitative and quantitative targets, that would be implemented and met through the actions of other groups and sectors of society, i.e. municipalities, private corporations, rural landowners, and non-government organizations. By addressing the above mentioned issues and constraints, in addition to developing strategies and testing on-the-ground interventions to address land degradation, the incremental resources from the GEF would support the establishment, by the end of project, of the long-term and statewide Riparian Forest Restoration Program (PEMC).
In response to this critical situation, and to address rural poverty issues, the GoSP is already supporting a number of initiatives addressing land degradation issues. The largest intervention is the World Bank-financed Land Management III Project – LM III (loan of US$ 55 million, 4238-BR), under full implementation for the last three years. The LM III’s objectives are to increase and sustain agricultural production, productivity and farm incomes and assist in the conservation of natural resources by: (a) promoting the adoption of sustainable land management, planned and implemented at the microwatershed2 level and with full involvement of the farming community; (b) developing community environmental awareness and participation in environmental protection efforts; (c) increasing the extent and duration of vegetative soil cover; and (d) improving internal soil structure and drainage, thus increasing water infiltration, and safely disposing of any remaining runoff. The LM III would co-finance the proposed GEF operation, especially where the project would finance the adoption of sustainable soil conservation practices by the beneficiaries. In addition, in the areas of remaining Atlantic Forest, a KfW-funded Atlantic Forest Protection Project - PPMA (US$ 20 million) is supporting implementation of eleven Protected Areas and strengthening the state enforcement system throughout the Atlantic Forest of São Paulo State. Although there is no overlap between that project and the proposed GEF operation, the latter will greatly benefit from the methodologies developed under the PPMA, especially the Atlantic Forest Monitoring System (SIGMA), for the formulation of the future integrated system for the monitoring of riparian forests in the whole State. In addition, the recent creation of the State Forum for Climate Change and Biodiversity, on February 15, 2005, corroborates the State’s commitment to the objectives of the proposed project. The work and public consultations undertaken during project preparation have led to the creation of the first technical chamber within this Forum, with the objective to define the methodology for the elaboration of riparian forest rehabilitation projects that could also generate carbon sequestration credits under the CDM.
At the municipal and watershed levels, the proposed project would support a number of initiatives that respond to these national priorities, including reforestation, adoption of erosion control, agro-forestry and other sustainable land and forest management practices. During project preparation, the GoSP has also demonstrated its commitment to implementing the project through concrete actions, such as (i) mobilizing various key stakeholders who provided significant contributions and support to project design, including the State Environmental Council (CONSEMA) and five multi-sectoral river basin committees responsible for establishing water-resources management priorities in their respective basins; and (ii) establishing a High-Level Inter-agency Coordination Committee to ensure integration between the proposed GEF Project and the ongoing LM III World Bank loan.
The Government of Brazil (GoB) has also undertaken a number of actions to respond to the above-mentioned issues and constraints, including: (i) creation of the “Sustainable Development Policies and Agenda 21 Committee” in order to mainstream sustainable development into the country’s public policies; (ii) establishment of the National Forest Program; and (iii) creation of the Atlantic Forest Subprogram, under the Pilot Program to Conserve the Brazilian Rain Forest (PPG7). Nevertheless, much remains to de done to address land degradation in the Atlantic Forest and Cerrado biomes, particularly in productive lands (which is now being somewhat addressed by the LM III) and in public and private degraded riparian areas.
Meeting these commitments in São Paulo will require increased capacity of government institutions and rural communities to address land degradation constraints and issues, policy formulation, harmonization and articulation, regulatory reform, economic incentives and demonstrative and field testing interventions target towards ecosystem restoration of riparian forests, particularly to smallholder farming communities.
Building on the LM III Project, the proposed project would support the long-term restoration of globally important riparian ecosystems. Under the project, the Government of São Paulo (GoSP) would be able to undertake a cross-sectoral program that would generate both national and global benefits. It would contribute to the protection of globally important biodiversity hotspots and assist the country in developing adequate tools and mechanisms to facilitate future large-scale restoration of riparian forests, while providing additional opportunities for improved livelihoods and economic well-being of rural communities – as a result from better farmers organization and increased land productivity fostered by the more adequate management of agro-pastoral lands.
Country Eligibility: Brazil ratified the UNCCD in1997, the CBD in 1994, and the UNFCCC in 1994.
Country Drivenness: The National Biodiversity Strategy (NBS), developed by the Ministry of Environment and completed in 2002, indicates the importance of restoring degraded forests and implementing payment mechanisms for services provided by these forests, while conserving biodiversity. In this context, the proposed project would support the implementation of the NBS and would maintain the existing coordination with the Ministry of Environment on the integration of biodiversity-related activities. In addition, the proposed project is consistent with the country’s priorities for sustainable development, including those related to commitments to address land degradation and to implement the above mentioned international Conventions. The project area overlaps with Brazil’s national priority areas for the conservation of biodiversity in the Atlantic Forest and Cerrado biomes, established as a result of studies and national workshops supported under the National Program for Biological Diversity (PRONABIO). The Atlantic Forest and the Cerrado are among the 25 priority hotspots for world biodiversity conservation, according to studies by Conservation International. Priority areas in São Paulo include thirteen Atlantic Forest fragments, of which seven are located in the project-supported river basins, and fourteen Cerrado savannah priority areas, of which five are located in the project-supported basins.

  1. Objectives

The project’s development objective is to support long-term and large-scale restoration of riparian forests of Cerrado and Atlantic Forest biomes through development and harmonization of policy, regulatory, economic and technological tools and mechanisms, while providing opportunities for improved livelihoods and economic well-being of rural communities.

The global environmental objective is to arrest and reverse land degradation processes in riparian ecosystems and adjacent agro-ecosystems by increasing on-the-ground investments and strengthening policy, regulatory, economic, and institutional incentive framework to encourage sustainable land management, hence increasing carbon sequestration and restoring ecosystem stability, functions and services.
The State of São Paulo will benefit from having in place a system and the necessary tools for the large-scale restoration of its riparian ecosystems, while the rural farmers will benefit from having access to land management practices adapted to their on-the ground and financial realities, while also having the possibility of financial compensation for their efforts in restoring and conserving the riparian areas within their properties.
The main impact indicators (for details, see Results Framework in Annex 3) that will allow for evaluating whether the project has achieved its proposed outcomes are: (i) Key technical, financial, economic, and institutional framework are in place to support long-term restoration of riparian forest ecosystems; (ii) Rural communities continue to adopt SLM practices and to participate in restoration of riparian forests (at least 900 farmers and 150 microwatershed communities adopting improved practices); (iii) Increase in the area of land under sustainable land management practices and of riparian forests rehabilitated to preserve and restore ecosystem stability, functions and services (at least 30,000 ha, including 1,500 ha of restored riparian forests); (iv) Increased awareness and capacity among communities in 150 microwatersheds to rehabilitate and conserve riparian forest ecosystems; (v) A long-term Riparian Forest Restoration Program designed and implementation plan formulated by end of project; (vi) Instruments for payment of environmental services designed (at least one), with implementation plan formulated by PY04, and support mechanisms for insertion of project beneficiaries in markets for environmental services developed (at least one), including guidelines for preparing carbon sequestration projects in line with potential buyers’ guidelines, and to produce and sell non-timber goods); (vii) At least 10 new riparian rehabilitation systems developed and tested through adaptive research trials undertaken in farmers field by PY03; (viii) At least 25,000 Kg of seeds retrieved and 3 million seedlings of native riparian species produced by PY04, with 30% produced by end of PY02; (ix) Sustainable agricultural and pasture management practices adopted over 45,000 ha (15 microwaterhseds) involving at least 900 families by PY4; (x) Sustainable riparian forest rehabilitation practices adopted on 1,500 ha (15 microwaterhseds), involving at least 900 families by PY4; (xi) By PY4, a total of 750 school teachers in formal education trained through 25 courses to provide a theoretical and practice foundation for land degradation issues and support for sustainable land management; (xii) Increased awareness of 750 key community agents (community leaders, union and social organization members) residing in five river basins and society at large of the importance of and riparian forest and sustainable land management; an estimated 24 radio programs will be broadcasted, 24 bimonthly newsletters issued, 10 workshops offered, with an average of 30 participants in each course; (xiii) Increased capacity of 300 community agents and public and private extension agents residing in 300 demonstrative microwatersheds and surroundings; an estimated 35 courses will be offered, with an average of 30 participants in each course, totaling 300 trainees; (xiv)) A total of 6000 people of population residing in microwatersheds participated in 185 courses and 76 citizenship workshops; (xv) At least 10 public and 10 non-public entities participate in supporting and/or financing programs to restore riparian ecosystems by PY04; (xvi) project monitoring program under full implementation at the end of PY01, and where necessary, implementation strategy improved; and (xvii) Project results and lessons learned disseminated through 35 workshops (2 at national, 13 at state and 20 at local level, by PY04), media campaign (2 by PY04) and homepage (PY01).

The proposed project is consistent with the current Country Assistance Strategy (CAS) and would contribute to two long-term country goals, i.e. better water quality and water resource management, and more sustainable land management, forests and biodiversity (CAS document, Table 10). The proposed project would also help strengthen the Environment and Natural Resource Management pillar of the CAS, and is relevant to all three specific themes identified therein: (1) natural resource management, including water, forests, and land; (2) environmental protection and management, including building stakeholder coalitions around environmental assets; and (3) global environmental externalities, including carbon sequestration and biodiversity. In this context, the World Bank already supports a number of operations and initiatives aimed at achieving better conservation of threatened ecosystems while improving the income of rural communities, reducing rural poverty, and improving the quality of life or rural populations through the adoption of a microwatershed approach to sustainable management of natural resources. The proposed project would be implemented in a fully integrated manner with these ongoing initiatives while also adopting a new paradigm for environmental management - which so far has been focused mostly on instruments of command and control.

The project’s objectives are fully consistent with the provisions of the GEF Operational Strategy, and specifically with the Operational Program (OP) for Sustainable Land Management (OP15), with additional relevance to the OP for Forest Ecosystems (OP3). The project fully supports the two GEF Sustainable Land Management Strategic Priorities (SPs) under OP 15, as identified in the FY 04-06 Business Plan (i.e. target capacity building and implementation of innovative sustainable land management practices).

  1. Rationale for Bank Involvement

The high level of complementary between the objectives of this GEF project and the existing Bank-supported Land Management III Project, and the need for close collaboration between the State Secretariats of Environment and of Agriculture, make the Bank an ideal partner in the preparation and implementation of this new operation. In addition, the proposed project would also benefit from Bank experience with preparation and implementation of completed and current land management and GEF projects in other Southern Brazilian states (Rio Grande do Sul, Santa Catarina, Paraná, and Rio de Janeiro), as well as projects in other Latin American countries that address issues related to payment for environmental services. Finally, the existing WB loan would provide most of the co-financing required for the new GEF operation in São Paulo.

  1. Description

The GoSP aims to set up a comprehensive, long-term and statewide Riparian Forest Restoration Program (PEMC), complementing the on-going the LM III initiatives focused on the adoption of sustainable agricultural and pasture management practices. The proposed project intends to create the appropriate enabling environment and strengthen the existing policy, regulatory and economic incentive framework to support the development and future implementation of this larger-scale restoration forest program.

All project components and activities would ultimately contribute to the formulation of the PEMC, and would be spatially integrated at the microwatershed level, where activities from the various components would be implemented in 15 demonstrative microwatesheds. Integration among the various components and activities would be ensured by mechanisms such as the continuous supervision by (i) the Project Working Group  GT (see C.2 for details), constituted by representatives from the main institutional stakeholders, and (ii) the High-Level Inter-Agency Coordination Committee.
Component 1 – Policy Development (Total US$1.47 M, GEF US$0.89 M).

The objective of this component is to set in place a realistic, technical, financial, and economic framework for future implementation of a state wide program for the sustainable restoration of riparian forests. There are two sub-components: (1.1) Payment for environmental services and other funding mechanisms, and (1.2) Formulation of the State Program for Restoration of Riparian Forests (PEMC).

Target Group and Main Outcomes: Policy makers and the farmer community in the State of São Paulo. The main outcome is a long-term and statewide Riparian Forest Restoration Program (PEMC) designed, including a comprehensive policy and regulatory framework to support the development of mechanisms for insertion of project beneficiaries in markets for environmental services rendered by riparian forests, and defined payment mechanisms for these environmental services, with a special focus on the needs of small farmers.
Component 2 - Support to Sustainable Riparian Forest Restoration (Total US$1.98 M, GEF US$ 0.70 M).

The objective of this component is to ensure the development and dissemination of appropriate methodologies, as well as improve the market offer of seeds of native trees in the quality and quantity necessary for the full restoration of riparian forests in the State of São Paulo. There are two sub-components: (i) Development and dissemination of technologies for riparian forest restoration, and (ii) Support to seed and seedling production.

Target Group and Main Outcomes: The farmer community in the State of São Paulo. The main outcomes are riparian rehabilitation systems developed and tested in farms, and seedlings production capacity improved to support future implementation of the State Riparian Forest Recovery Program.
Component 3 – On-the-Ground Investments in Sustainable Land Management practices (Total US$10.28 M, GEF US$ 2.17 M).

This component’s objective is to promote and disseminate ideas, methodologies, and technologies for sustainable management of natural resources in productive areas, and for the sustainable restoration of riparian forests in the State. Some of the practices to be fostered by this component include no-till agriculture, use of green manure, terracing, building of fences to isolate and protect water springs and stream margins, stabilization and restoration of gullies, adoption of rotational pasture practices and construction of watering points for animal consumption. There are two sub-components: (i) On-the-ground adoption of agro-pastoral sustainable land management practices, and (ii) Pilot projects for on-the-ground adoption of riparian forest rehabilitation.

Target Group and Main Outcomes: Sustainable land management practices adopted by about 1,200 farmers living in 150 microwatersheds, and 15 demonstration microwatersheds (about 45,000 ha) transformed into centers for training and dissemination of tested models, methodologies and technologies for sustainable land management practices, including restoration and conservation of degraded riparian forests.
Component 4 – Environmental Education and Training (Total US$ 2.40 M, GEF US$ 1.7 M)

This component’s objective is to set the basis for a more visible and effective participation of local populations in the planning and implementation of local/regional development and conservation activities, with a focus on better quality of life stemming from the sustainable management of natural resources. There are four sub-components: (i) Environmental education in schools; (ii) Stakeholder mobilization at the basin level; (iii) Training for the various groups of project executors; and (iv) Capacity building in sustainable land management practices for project beneficiaries. All training and environmental education activities will focus not only on the local benefits of sustainable land management and restoration/conservation of riparian forests, but also on global environmental issues relevant to the particular realities of each client.

Target Group and Main Outcomes: School teachers, opinion and decision makers, environmental agents, and farmer families in 150 project microwatersheds. Targeted individuals and organizations in the project area have increased knowledge and information on sustainable use of natural resources, including sustainable land management practices and restoration of riparian forests, and are better equipped to adopt the recommended conservation practices. At the end of project implementation, it is expected that about 6,000 people would be effectively participating in environmental awareness programs, indicating community interest in and commitment to support the restoration of riparian forests.
Component 5 – Project Management, Monitoring and Evaluation, and Information Dissemination. (Total US$ 2.77 M, GEF US$ 1.38 M)

This component’s objective is to coordinate, manage, and monitor, on a continuous basis, all activities supported under the project, as well as to disseminate project results at the regional, state, and national levels. There are three sub-components: (i) Project management and institutional coordination; (ii) Monitoring and evaluation of project activities and impacts; and (iii) Information dissemination .

Target Group and Main Outcomes: All individuals and organizations involved in activities related to project management, monitoring, and information dissemination, and all potential users of knowledge and information produced and disseminated as a result of project implementation. Main outcomes would be (i) Effective participation, including financial support, of different government sectoral institutions, civil society, and the private sector in interventions associated with sustainable land management, especially the restoration and conservation of riparian forests; (ii) Project Monitoring Program under full implementation and, where necessary, providing subsidies for gauging and improving project implementation strategy; and (iii) Project results and lessons learned disseminated through workshops, media campaigns, and project homepage.

  1. Financing









  1. Implementation

The project’s preparation, implementation, and sustainability strategies are based on the establishment of a number of partnerships, the most important being that between the Secretariat of Environment (SMA) and Secretariat of Agriculture (SAA), supported by close collaboration between the proposed project team and the implementation team for the São Paulo Land Management III Project. This partnership will be formalized through a State Decree before project effectiveness, and the High Level Inter-agency Coordination Committee created during project preparation will continue to meet on a regular basis to ensure coordination between the projects. In addition to the co-financing provided by the Land Management III Project and their collaboration with on-the-ground activities involving individual farmers and microwatershed associations, with great benefit to the proposed GEF project, this partnership is already generating benefits for the implementation of the São Paulo Land Management III Project, as the Secretariat of Environment has come to a deeper understanding of the objectives and mechanisms of implementation of the activities supported by the loan, which in turn has facilitated the process of obtaining environmental licenses for some of the investments under the loan (such as restoration and control of gullies).

In addition to the LM III Project, communication and collaboration with other relevant projects has been initiated by the GoSP during preparation phase (for details, see Annexes 2 and 12). Other important partnerships already established during project preparation, and which are expected to continue to flourish during project implementation, are: (i) collaboration with the Secretariat of Biodiversity and Forests of the National Ministry of Environment (MMA), aiming to support the development and validation of a system for payment of environmental services, as well as its future dissemination and replication in other Brazilian states; (ii) partnership with five River Basin Committees for definition of criteria for selection of pilot microwatersheds within each of the five selected river basins, and for monitoring of implementation of project activities, project results and impacts in each of those basins; (iii) partnerships with universities and research institutions, for definition and testing of adaptive research models for restoration of riparian ecosystems.
The São Paulo State Secretariat of Environment (SMA) will be the Grant recipient and the Executing Agency (through its existing Department of Landscapes – DPP, which is directly affiliated with the State Secretary’s Cabinet). It will execute the project under the guidance of the Sate Biodiversity Commission (CB), which will assume the role of Project Steering Committee (a responsibility already given to CB through a Resolution issued by the State Environmental Council (CONSEMA) on March 27, 2004). The CB is composed of ten representatives from Government Agencies (including SMA and SAA), and ten representatives from civil society, including key Environmental NGOs and three public Universities. The Project Steering Committee will be responsible for: (i) reviewing the Project Annual Operational Plans (POAs) and suggesting changes accordingly; (ii) assisting the Project Coordinator and the Project Management Unit, to ensure inter-institutional coordination and effective implementation by project executors; and (iii) resolving eventual conflicts among stakeholder groups. At the basin level, this participatory management structure will be guided by the existing River Basin Committees – RBCs (one committee for each of the five project watersheds). During project preparation, these five committees established criteria for the selection of pilot microwatersheds within their respective watersheds; a total of 15 microwatersheds are to be selected by these RBCs (three microwatersheds per watershed) to represent the pilot /demonstrative project sites. During project execution, the RBCs will have responsibilities similar to the CB’s, but will fulfill them at the watershed level. Moreover, they will be responsible for the overall supervision of pilot/demonstrative on-the-ground activities. At the local level, and in those municipalities with pilot microwatersheds/sites, the existing Municipal Development Councils will be responsible for budget allocations associated with project activities co-financed by the Land Management III Project to implement on-the-ground investments, and will follow up on the implementation of the pilot activities at the microwatershed level.
The Working Group (GT), established initially for project preparation, will continue to follow-up all actions developed under the project components, to assure their execution and coordination with other activities developed by SMA and proposing eventual adjustments to project implementation. In addition, a High Level Inter-agency Coordination Committee, composed by the State Secretaries of Planning, Finance, Environment, and Agriculture, has been established to ensure true integration between the proposed project and the ongoing Bank loan, including the determination and approval of yearly State budgets for both projects, and the planning and execution of activities in the respective Annual Operational Plans.
The Project Management Unit (PMU) will be established in SMA, operating out of the DPP office in São Paulo. It would be composed of a small group of technical and administrative/financial staff and a Project Manager. The PMU will undertake project coordination and implementation, with responsibility for project oversight, coordination, maintenance of institutional networks, and collaboration with stakeholders, with special attention to coordination with the State Rural Extension Agency (CATI), attached to SAA and executing agency of the associated LM III Project. The activities of the PMU would also be supported by other government institutions (project co-executors), including regional offices of the participating State agencies (Forest Institute/IF, Botanic Institute/IBt, SMA’s Environmental Planning and Education Department/CPLEA), as well as non-governmental institutions (e.g. The Nature Conservancy and SOS Mata Atlântica) and Universities (USP/ESALQ, UNESP and UNICAMP). All procurement under the project would be carried out by the PMU, hence no transfer of funds to would take place from SMA to the aforementioned project co-executors.

  1. Sustainability

There is considerable reason to expect long-term project sustainability. To achieve financial sustainability, the project will foster the development of adequate financial mechanisms that facilitate future large-scale restoration of riparian forests throughout the State of São Paulo; on a non-refundable basis, GEF resources would finance on-the-ground activities that prevent, arrest or reverse land degradation on existing riparian forests, building on the productive activities financed under the LM III Project. Funding strategies would pursue the feasibility of a long-term incentive system for promoting the adoption of sustainable land management through the development of mechanisms for insertion of project beneficiaries in markets for environmental services rendered by riparian forests, and the design of payment mechanisms for these services. These mechanisms would finance adoption of sustainable land management activities that would not only provide communities with alternative livelihoods and additional income generation but also support biodiversity conservation, watershed protection and greenhouse gas absorption and fixation. Examples of such activities would be certified organic farming; small agro-industries at the microwatershed or municipal level; and production of honey, essences of native plants, seedlings of native trees, etc. The project would seek a variety of funding sources with the potential to channel funds in support of restoration and preservation of riparian forests, including the following: (a) resources derived from water use charges could revert to the microwatershed for compensation of improvements in water quality and quantity (base flows) in the watershed, along with lower costs for downstream municipal water treatment; (b) financial compensation for increased carbon absorption and fixation, as prescribed by the Kyoto Protocol Clean Development Mechanism, and also from other independent carbon markets; (c) an increase in agricultural productivity through adequate management of agro-pastoral systems (e.g. no till, green manure, grazing rotation), along with a decrease in soil loss from erosion; (d) an increase in the market value of certified agricultural products (ISO 14001, organic, green seals, and so forth); (e) sustainable harvesting of non-timber forest products and other sustainable activities, such as eco- or agro-tourism; (f) biodiversity conservation. Finally, the proposed project would; improve access to and rational use by project beneficiaries of current GoB financial services and credit lines in support of productive investments compatible with the conservation of natural resources, such as the forest credit line under the National Smallholder Agriculture Program (PRONAF).

The main project interventions that would contribute to achieving institutional sustainability include: (i) capacity building activities (through education, training and awareness) that, among other outcomes, would promote replication of project lessons and transference of experience; (ii) continued mobilization of key state and national stakeholders during project implementation (as has been done in project preparation), including Consema, MMA, key environmental NGOs, municipal governments and local microwatershed associations; (iii) recognizing and capitalizing on the crucial role of existing local multi-sectoral River Basin Committees, local governments, and producer and community organizations to organize, promote, monitor and assess implementation; (iv) continued government support: GoB and GoSP have a number of ongoing efforts that will promote sustainable land management and biodiversity conservation, including the national Atlantic Forest Subprogram, the National Forest Program, GoSP Native Forests Research program and the LM III Project. Project success will depend in part on the continuation of these programs. Improved inter-sectoral and inter-institution coordination, as well as increased capacity due to improvements in information technology and training, will help institutionalize riparian forest rehabilitation and conservation activities and create a constituency within the public sector. It should be noted that implementation of the proposed project will in no way interfere with the State Secretary of Environment’s legal mandate to monitor the status of riparian forests in the state, and to apply all applicable laws related to their conservation. On the contrary, the greater visibility resulting from State support and participation in the implementation of the proposed project, and the increased opportunities created by the project for interaction between State institutions and civil society, will certainly contribute to better and more effective monitoring and control of legally protected areas and to greater adherance of the public to legislation aimed at conservation.
The demonstrative nature of the project (with direct investments in 15 pilot/demonstrative microwatersheds) will foster and support the development of appropriate tools and of capacity building activities for the restoration of riparian forests, which can later be employed for restoration of riparian forests all over the state, and other states or countries, particularly those within the Atlantic Forest and Cerrado biomes. The restored/reforested areas from the demonstrative projects will be used as demonstration plots for the training of representatives of municipalities, communities and rural landowners from areas not covered by such demonstrative projects. The great variety of demonstrative pilot areas is meant to cover the entire range of existing technical, economic and social peculiarities related to the restoration of riparian forests that can be found throughout the State, so that the results from these projects will provide a nearly complete set of methodologies needed to implement a large-scale Riparian Forest Restoration Program all over the State, or in other similar areas within or outside Brazil. The experiences and results from such projects will be adequately recorded and disseminated (project subcomponent 5 on Information Dissemination) so as to trigger the anticipated replicating effect.

  1. Lessons Learned from Past Operations in the Country/Sector

Project design has incorporated a number of lessons from implementation of the current Land Management III Project, as well as those of other land management projects and biodiversity conservation projects in Southern Brazil. These are: (a) The microwatershed is an ideal unit for the planning and implementation of on-the-ground activities that aim at the conservation of natural resources, because it allows the farmers to see and understand the effects of their own individual actions on the quality and quantity of their natural resources; (b) Sustainability of projects that aim at the conservation of natural resources is greatly enhanced if they also generate benefits at the level of the individual farms and also for the community as a whole; (c) Projects that aim at the conservation of natural resources tend to be more successful when all interested stakeholders participate in project preparation and implementation; full collaboration and integration of approaches between the environmental and agricultural sectors is key to project success and sustainability; (d) Conservation of natural resources on a sustainable basis requires continuous attention and action on the part of rural producers; projects should develop and implement mechanisms that will support the continuation of such efforts after project implementation is completed; (e) Projects and programs aimed at the restoration of degraded lands and at fostering the adoption of sustainable use of natural resources must have some degree of flexibility to allow for consideration of the environmental, economic, social, and cultural specificities of each situation.

  1. Safeguard Policies (including public consultation)

Safeguard Policies Triggered by the Project



Environmental Assessment (OP/BP/GP 4.01)


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Natural Habitats (OP/BP 4.04)

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Pest Management (OP 4.09)


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Cultural Property (OPN 11.03, being revised as OP 4.11)

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Involuntary Resettlement (OP/BP 4.12)

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Indigenous Peoples (OD 4.20, being revised as OP 4.10)

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Forests (OP/BP 4.36)


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Safety of Dams (OP/BP 4.37)

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Projects in Disputed Areas (OP/BP/GP 7.60)*

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Projects on International Waterways (OP/BP/GP 7.50)

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  1. List of Factual Technical Documents

  1. Documents available on the Internet for public consultation: (

  • Project concept note submitted to SEAIN and GEF (in Portuguese);

  • Project summary with the following annexes (in Portuguese): diagnostic, outline of problems, detailed description of components (including indicators and targets), summary cost table, criteria for selection of priority basins and for the selection of microwatersheds for demonstration projects, institutional arrangements and monitoring guidelines;

  • Dissemination of material by SMA and materials transmitted by the press on the project (in Portuguese);

  • Project Draft (in Portuguese and English).

  1. Documents under preparation (to be made available on the Internet):

  • Executive Summary (in Portuguese and English);

  • Project Draft (in Portuguese and English).

  1. Documents in files (in Portuguese):

  • Working documents containing details about project components;

  • Documents related to the project’s inclusion in the2004/2007 Multiannual Plan, Budget Guidelines Law and 2005 Budget Proposal;

  • Minutes of meetings by CONSEMA and the Biodiversity, Forests and Protected Areas Commission regarding the project (listed in Appendix 1);

  • Proposals and statements by stakeholders (NGOs, research institutions, stakeholders, local governments, etc.);

  • Terms of partnership with governmental and non-governmental institutions, aimed at the recovery of gallery forests: Protocol of Intentions between SMA and the National Secretariat of Biodiversity and Forests of the Ministry of Environment for the integrated development of actions foreseen in SMA’s Gallery Forest Recovery Project; Protocol of Intentions among SMA, SAA/LM III, Sumaré local government, São Paulo Land Institute Foundation-ITESP and Forestry Foundation for gallery forest recovery in the Taquara Branca Microwatershed (ongoing activities); Protocol of Intentions among SMA, Sumaré local government, ESALQ/USP, Sociedade Humanista Despertar and 3M of Brazil, for youth training and gallery forest recovery in the Taquara Branca Microwatershed (ongoing activities); Protocol of Intentions among ITESP Foundation, Sumaré local government, ESALQ and Shell to train Sumaré’s family farmers in the production of native species seedlings (activity completed); Protocol of Intentions among SMA, IBAMA, INCRA and ITESP for gallery forest recovery in Iperó (at signing stage); Protocol of Intentions among SMA, ITESP, COOAGROFIL Cooperative, ESALQ/USP, Viaoeste and SPVias for gallery forest recovery in Iperó (at signing stage); Protocol of Intentions between SMA and the Brazilian Association of Agro-Businesses of Ribeirão Preto to support gallery forest recovery by associated agricultural and livestock companies (being signed); Terms of Cooperation among SMA, National Biomass Center/USP and EDP for the implementation of the carbon sequestration pilot program through reforestation in a gallery forest area in the Paraíba Valley (under negotiation).

    • Record of public events in which the project was presented (listed in Appendix 2);

    • Record of meetings and workshops held by Basin Committees for project discussion and definition of criteria to select areas for the implementation of demonstration projects and respective meeting minutes (listed in Appendix 3);

    • Annals or records of events held by SMA units on issues addressed by the project;

    • Record of meetings and contacts with coordinators of other projects that have the support of the GEF and World Bank (Integrated Microwatershed Management in Northern-Northeastern Rio de Janeiro – GEF RJ, Paraná Biodiversity – GEF PR, São Paulo State Microwatershed Program – LM III, Atlantic Forest Protection in the Interior of São Paulo – GEF Ipê, and PNMA II, as listed in Appendix 4;

    • Joint letter (Ofício) of the Secretariats of Environment and of Agriculture and Supply, defining the groundwork for the integrated development of the project and LM III (Appendix 5);

    • Partnership proposals for the project implementation phase (under analysis/in development);

    • Pilot projects for gallery forest recovery proposed or implemented by SMA in partnership with governmental and non-governmental institutions and respective monitoring reports;

    • Gallery forest recovery projects proposed or implemented through the initiative of other agents (local governments, NGOs, companies, other public administration agencies, etc.), submitted for monitoring;

    • Cadastre of persons and institutions interested in gallery forest recovery;

    • Cadastre of successful gallery forest recovery projects;

    • Records of correspondence by local governments and municipal chambers interested in the establishment of partnerships for gallery forest recovery.

  1. Contact point

Contact: Maria Isabel Junqueira Braga

Title: Environmental Spec.

Tel: (202) 458-0121



  1. For more information contact:

The InfoShop

The World Bank

1818 H Street, NW

Washington, D.C. 20433

Telephone: (202) 458-5454

Fax: (202) 522-1500


1 Areas of permanent preservation (APPs) are defined in the Brazilian Forest Code as areas, whether or not covered by native vegetation, that have the following environmental functions: to preserve water resources, landscapes, geological stability, biodiversity, and the gene flow of flora and fauna, and to protect the soil and assure the well-being of human populations. Examples of APPs are the riparian areas along rivers and streams, or around reservoirs, and areas with steep inclines.

2 A microwatershed is a geographical unit of an average size of 3,000 ha, with an average of 90 families, that provides a convenient forum for local participation in setting priorities for the technical, economic, social, cultural and political aspects of natural resource management and poverty alleviation.

* By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas

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