Project information document (pid) appraisal stage

Report No.: AB6295

(The report # is automatically generated by IDU and should not be changed)

Project Name	Biodiversity Conservation Project
Region	Africa
Country	Guinea-Bissau
Sector	Agriculture, forestry and fishing
Lending Instrument	Specific Investment Loan
Project ID	122047
Parent Project ID	N/A
Borrower(s)	Republic of Guinea-Bissau
Implementing Agency	Institute for Biodiversity and Protected Areas (IBAP)
Environmental Screening Category	{ }A { X }B { }C { }FI
Date PID Prepared	January 18, 2011
Estimated Date of Appraisal Completion	19 January, 2011
Estimated Date of Board Approval	March 17, 2011
Decision	Project authorized to proceed to negotiations upon agreement on any pending conditions and/or assessments.

1. 
   Country Context
   

1. 
   Guinea-Bissau is one of the poorest countries in the world, ranking 173 out of 182 countries on the United Nations Human Development Index 2009. It has a population of roughly 1.6 million, and its economy is based primarily on farming and fishing activities, which represent some 55 percent of gross domestic product (GDP). Agriculture generates 80 percent of employment and 90 percent of exports (primarily through cashew nuts, the main export), while fisheries represent some 7 to 10 percent of GDP and up to 25-40 percent of public revenues. The country has poor infrastructure and weak social indicators; life expectancy is 48 years, more than two out of every three people live below the poverty line (US$2/day), and one out of every five lives in extreme poverty.
   

2. 
   The country is also extremely fragile. It has experienced periodic unrest since independence, including an 11 month civil war in 1998-99 and a series of military coups. Although the 2008 general election and the 2009 presidential elections (required following assassination of the Army chief of Staff and President in March 2009) were considered free and fair, there continue to be destabilizing forces as evidenced most recently by the April 2010 military overthrow of the Army Chief of Staff and temporary imprisonment of the Prime Minister. The fragility of the political process is further exacerbated by the influence of drug traffickers, using the country – as well as its West African neighbors – as a drug transshipment point on route to Europe. These forces have, and continue to undermine the development of the country’s economic and social infrastructure and contribute to the intensification of the already widespread poverty.
   

3. 
   Despite the country’s extreme poverty and political fragility, it has the natural resources and the geography to grow at a reasonable rate. It has an abundance of high quality land and favorable rainfall. Its rich mineral deposits; exotic bio-diversity; and fishing and tourism potential, particularly in the coastal zone where approximately 80 percent of the population lives; could provide diverse sources of income.
   

4. 
   Sector Importance. Guinea-Bissau’s unique coastal zone includes mangroves, sandbanks and mudflats, shallow estuarine waters and sub-humid Guinean forests that are known to be among the richest on the West African coast in terms of biodiversity (i.e. an abundance and variety of living organisms). More specifically, several species found in the coastal zone are considered globally significant, including 5 species of sea turtles, manatee, goliath grouper, bottlenose skate, ocean-going hippos, chimpanzees and several species of migrating birds. Notably, the Joao Viera and Poilao Marine Protected Area is the largest green turtle nesting site in West and Central Africa, and the third largest in the Atlantic. Cufada Lakes Natural Park is a designated Convention on Wetlands of International Importance (RAMSAR) site, and the Bijagos Biosphere Reserve and of the Cacheu Forest National Park have also been proposed as RAMSAR sites. In addition, the Bijagos Biosphere Reserve is being proposed as a UN World Heritage Site. This wealth of biodiversity and the rich cultural traditions it supports constitute a significant natural asset for the country that if protected, has the potential to serve as the backbone of a future tourism industry. At the same time, the coastal zone also provides valuable ecosystem services now, including nursery and breeding grounds for commercial fish stocks, carbon stocks and a buffer to mitigate against the impacts of climate change.
   

2. 
   Sectoral and Institutional Context
   

5. 
   Recognizing the current and future social and economic importance of the country’s biodiversity, the Government and its partners have been working to conserve and manage the coastal zone upon which it depends. This effort began in the 1990s, led largely by local and international NGOs such as IUCN. In 2004, through the Coastal and Biodiversity Management Project (CBMP) financed by the Global Environment Facility, the European Union, IUCN and the World Bank, helped the Government establish five national parks (Cacheu Mangrove Forest National Park, Cantanhez Forest National Park, Cufada Lakes National Park, Joao Vieira and Poilao National Marine Park and Orango National Marine Park) covering almost 450,000 hectares and including some 70,000 people, as well as a financially and administratively autonomous public agency to manage them, the Institute for Biodiversity and Protected Areas (IBAP). The CBMP supported staff and infrastructure for a national headquarters and local park management offices in each of the five parks, as well as awareness-raising among local communities and the development of legally-recognized park management plans. In parallel, other donors have supported the establishment and operation of the Urok Community Marine Protected Area, the country’s first community marine protected area and a regional model for participatory and community management.
   

6. 
   The Government’s vision for these parks and protected areas is that they both (i) conserve valuable biodiversity and ecosystem functions and (ii) serve as “sustainable development poles” for the local communities and regions. For this reason, through the CBMP, the Government established the Fund for Local Environmental Initiatives (FIAL) to complement biodiversity conservation efforts and demonstrate tangible benefits to local communities from the parks. The FIAL is a mechanism that has provided block grants for pro-environment development in communities in and around the parks. As such, the FIAL has disbursed roughly US$1.0 million in grants for environmentally-friendly community development in the parks, including initiatives such as wells, schools, rehabilitation of rice fields, bee keeping, palm oil extraction, and fish processing.
   

7. 
   To date, working together with the FIAL instrument, IBAP has made tremendous progress in conserving the country’s biodiversity in the national parks. The April 2008 CBMP mid-term review mission of the World Bank concluded that IBAP’s presence in the five national parks was effective and operational, comparing very favorably to the management of protected areas in neighboring countries in the sub-region. Despite being a young institution founded less than five years ago, IBAP has managed to have visible influence in park operation and management first and foremost through hiring of local residents as park guards to enforce the national Protected Areas Law as well as through the development of management plans and the establishment of participatory governance structures for each of the five national protected areas, the Park Management Councils, that inter alia oversee the implementation of these plans and enforce park rules and regulations.
   

8. 
   While the CBMP has been successful in establishing IBAP and building the management capacity for the protected areas network in Guinea-Bissau, all of the investments made by the project will be considered a failure if they are not sustained after the end of the project – currently scheduled for March, 2011. The strategy for ensuring the sustainability of the project outcomes, and the rationale for the project that was presented in the Project Appraisal Document (PAD) to the Board of Directors in late 2004, was that the country would establish a private foundation which would, over time, gradually build up an endowment fund sufficient to provide sustainable financing for managing the country’s parks and biodiversity in perpetuity (safeguarding these from the chronic public budget shortages of the Government and reducing their reliance on unpredictable donor financing)¹. The CBMP has supported this vision. A national ad hoc working group, drawing on representatives from government, private sector, NGOs and civil society was established in late 2007. This predominantly national group was enlarged to include representatives of international partner institutions and donor organizations in February 2009, following which the final design of the Bioguinea Foundation (the Foundation for Biodiversity in Guinea-Bissau - FBG), was confirmed (see Annex 6). The design of the FBG has been informed by lessons learned in other countries and takes into account the requirements of both the national and international stakeholders. Legal establishment of the FBG was unfortunately delayed due to unforeseen political events resulting in the assassination of the Chief of Staff of the Army and the President in March 2009 and the subsequent suspension of significant activities pending the election of the new President, who was finally sworn into office in September 2009. Immediately following this, a small Steering Committee was established in October 2009 for the creation of the FBG, and mandated to implement the final steps necessary to secure legalization of the FBG, and establish its first Board (at which point the Steering Committee would dissolve). A Steering Committee meeting to validate the Articles of the FBG is scheduled for January 2011, and the FBG is expected to be legally registered as a private foundation for public utility under United Kingdom law immediately thereafter.
   

9. 
   A GEF medium-sized project (MSP), the Guinea Bissau Biodiversity Conservation Trust Fund Project, was approved in July 2010. This project aims to support the final steps necessary to secure tax exempt status for the FBG under United Kingdom and Guinea Bissau law and to provide it with key operational tools as well as providing limited, short-term transition funding to enable IBAP to undertake core management functions in up to three national parks. In parallel, the Government and its national partners have begun to approach donors to raise the funds needed for the endowment. Nevertheless, until the FBG is established and fully capitalized, IBAP and the parks system will remain wholly dependent on external project-based funding sources. Without further transition support for management of the parks while this sustainable financing mechanism is put in place and capitalized, there is a high risk that a lack of funding will bring IBAP and the country’s conservation activities to a halt, reversing the gains of the last five to ten years and preventing them from fully capitalizing the FBG.
   

10. 
    For this reason, this IDA project aims to build upon the GEF MSP, reinforcing the support to the country in this near-term transition period over the next four years, to (i) continue to manage and conserve Guinea-Bissau’s existing network of five national protected areas and biodiversity; and to simultaneously (ii) pilot the operation of the FBG. Providing ongoing initial operational support to FBG and developing it’s processes, procedures and capacity to effectively and efficiently manage conservation financing streams is the next stage of a medium to long term strategy to assist the country to move from project-based and ad-hoc financing of biodiversity conservation to the sustainable conservation financing streams realized by investment returns on the FBG’s endowment capital. Studies financed by the CBMP suggest that this would require an eventual endowment of roughly US$15 to 20 million, if IBAP and its current network of parks and protected areas were to be financed solely from the investment returns.² More modestly, a total endowment of US$5 million would be sufficient to finance the management of at least the two priority national parks in the Bijagos Archipelago (Orango and Joao Vieira e Poilao) solely from investment returns. The project will further the achievement of these financing goals by: (i) assisting the country to develop and demonstrate its capacity to transparently and effectively manage conservation funds, thus enhancing donor confidence in this new institution; (ii) supporting the launch of FBG fund raising efforts; and (iii) providing the baseline for a proposed GEF V project (FY12) to provide seed capital for the FBG endowment and encouraging contributions to the endowment from other sources. The country will also pursue other recurrent revenue streams, such as the sale of carbon credits generated under a REDD program that is expected to begin in early 2011 as well as future park entry fees and tourism taxes, and ‘debt-for-nature swaps’ with Government creditors. At the same time, the recent World Bank-financed Community-Driven Development (CDD) Project in Guinea-Bissau will aim to incorporate and continue the FIAL’s support for the communities in and around the parks.
    

11. 
    For this reason, this project aims to support the country in this near-term transition period over the next four years, to (i) continue to manage and conserve Guinea-Bissau’s existing network of five national protected areas and biodiversity; and to simultaneously (ii) pilot the operation of the FBG. Providing ongoing initial operational support to FBG and developing it’s processes, procedures and capacity to effectively and efficiently manage conservation financing streams is the next stage of a medium to long term strategy to assist the country to move from project-based and ad-hoc financing of biodiversity conservation to the sustainable conservation financing streams realized by investment returns on the FBG’s endowment capital. Studies financed by the CBMP suggest that this would require an eventual endowment of roughly US$15 to 20 million, if IBAP and its current network of parks and protected areas were to be financed solely from the investment returns.³ More modestly, a total endowment of US$5 million would be sufficient to finance the management of at least the two priority national parks in the Bijagos Archipelago (Orango and Joao Vieira e Poilao) solely from investment returns. The project will further the achievement of these financing goals by: (i) assisting the country to develop and demonstrate its capacity to transparently and effectively manage conservation funds, thus enhancing donor confidence in this new institution; (ii) supporting the launch of FBG fund raising efforts; and (iii) providing the baseline for a proposed GEF V project (FY12) to provide seed capital for the FBG endowment and encouraging contributions to the endowment from other sources. The country will also pursue other recurrent revenue streams, such as the sale of carbon credits generated under a REDD program that is expected to begin in early 2011 as well as future park entry fees and tourism taxes, and ‘debt-for-nature swaps’ with Government creditors. At the same time, the recent World Bank-financed Community-Driven Development (CDD) Project in Guinea-Bissau will aim to incorporate and continue the FIAL’s support for the communities in and around the parks.
    

3. 
   Project Development Objectives
   

12. 
    The development objective is to support the country to: (i) strengthen IBAP’s management of Guinea-Bissau’s existing five national parks, and (ii) pilot the operation of a sustainable financing mechanism for these parks. This objective is consistent with the grant recently approved by the GEF for the Guinea Bissau Biodiversity Conservation Trust Fund Project, upon which this project builds.
    

4. 
   Project Description
   

13. 
    The project will have a total investment cost estimated at US$1.9 million and will comprise the following three components
    

14. 
    Component 1: Consolidation and strengthened capacity for management of coastal and marine protected areas and biodiversity. This component, in coordination with other donor-financed projects, aims to enable IBAP to continue the participatory management and conservation of Guinea-Bissau’s protected areas and biodiversity during the initial phase of the transition to more sustainable financing sources. It will focus on strengthening the management of five coastal and marine national parks and increasing the monitoring and conservation of globally significant biodiversity through support to select activities in the existing management plans for the five national parks.
    

15. 
    Component 2: Pilot the operation of the Bioguinea Foundation. The component aims to pilot the operation of the Bioguinea Foundation in Guinea-Bissau (FBG) as a mechanism that would eventually be capable of providing sustainable financing for the core recurrent management costs of at least two of the country’s existing national parks.
    

16. 
    Component 3: Project Management and Monitoring and Evaluation. This component aims to ensure effective and efficient implementation of project activities, in coordination with the other related donor initiatives.
    

5. 
   Financing
   

6. 
   Implementation
   

17. 
    Project implementation will be ensured through IBAP, an administratively and financially autonomous public institution, under the jurisdiction of the Minister of Agriculture and Rural Development. IBAP has been supported for over five years through the CBMP, through inter alia the recruitment of key technical and fiduciary staff, and training and professional development (as well as implementation support and collaboration from the World Bank). As such, IBAP has proven capacity for managing World Bank projects.
    

18. 
    IBAP will initially be fully responsible for implementing all three project components. Project oversight will be ensured by the IBAP Director supported by his technical team, and IBAP’s financial management specialist/accountant will ensure fiduciary controls. In addition, IBAP will recruit a procurement specialist to complement its existing fiduciary staff.. With respect to Component 2, once the initial start-up activities of the FBG are completed including, inter alia, recruitment of a full-time Executive Secretary and financial management specialist; preparation of an Operational Manual satisfactory to IDA, technical implementation responsibility for the activities planned under component two will be shifted from IBAP to the FBG staff. IBAP will nevertheless, retain overall project implementation responsibility as well as that for the financial management of project funds, though the FBG Executive Secretary and Financial Management Officer will work closely with their IBAP counterparts (the IBAP Director and financial management specialist/accountant) thus building capacity and experience of the fledgling organization.
    

7. 
   Safeguard Policies (including public consultation)
   

19. 
    The project, which has as its central theme the protection and sound management of natural resources, is not expected to give rise to adverse effects on the environment or people.
    

8. 
   Contact point at World Bank and Borrower
   

Contact: John Virdin

Title: Sr. Natural Resource Management Specialist

Tel: (202) 473-2077

Email: jvirdin@worldbank.org
Borrower/Client/Recipient

Contact:

H. E. Helena N. Embalo

Minister of Economy, Planning and Regional Integration

Ministry of Economy, Planning and Regional Integration

A v. Amilcar Cabral

C.P. no 6

Bissau -Republic of Guinea Bissau

Institute for Biodiversity and Protected Areas

Contact Person: Mr. Alfredo Simao da Silva

Telephone No.: (245) 320 7106

Fax No.: (245) 320 7107

Email: alfredo.simao.dasilva@iucn.org

9. 
   For more information contact:
   

The World Bank

1818 H Street, NW

Washington, D.C. 20433

Telephone: (202) 458-4500

Fax: (202) 522-1500