Project information document (pid)
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- Region Latin America and the Caribbean Sector
- Implementing Agency Project Sponsor: AES Tietê S.A. Environment Category
- Date PID Prepared October Estimated Date of Appraisal Authorization
- Rationale for Bank involvement
- Additional Project Benefits
- Safeguard Policies that might apply
| PROJECT INFORMATION DOCUMENT (PID)
53929 APPRAISAL STAGE
Key development issues The State of São Paulo has an area of 248,809 km2 and a total population of 39 million inhabitants distributed among 645 municipalities. It comprises two biomes: the Atlantic Rainforest (Mata Atlântica), which originally covered about 81% of the state area, and the Cerrado savannahs which encompassed about 14% of the state area. Previous unsustainable land use and deforestation processes, especially in the early 1900’s, have led to an accelerated loss of biodiversity and increased land degradation in those biomes. Furthermore, agriculture intensification in the last sixty years has added to the strain on natural resources, and riparian habitats have been especially impacted because of their proximity to water and soils rich in organic matter, which make these areas especially suitable for agricultural activities. Native riparian forests are extremely important for the overall structure and ecosystem function due to their rich plant and animal biodiversity, as well as their role as: (i) providers of habitat and resources for animal species, and as structural connectivity of woody habitats across landscapes, especially in the Cerrado savannahs; (ii) physical barriers that help retain soil particles and organic matter before they enter streams, rivers, and reservoirs; and (iii) as protection for water springs. In addition, native Atlantic Forest and Cerrado riparian forests constitute important carbon sinks because of their high tree density and soils rich in organic matter. Under current Brazilian legislation,1 all riparian areas and their vegetation, defined as anywhere from 30 to 200 meters on each side of a river or lake/reservoir (depending on width and use of the water body) are defined as Areas of Permanent Conservation (Áreas de Preservação Permanente), or APPs, and cannot be used for agro-pastoral activities or other human occupation in the absence of an environmental permit. It should be noted that the forest legislation does not include the obligation to afforest/reforest APPs. It does require, however, that these areas be protected from human intervention to allow for natural regeneration of the native vegetation. Natural regeneration is not taking place in most of the degraded APPs in the state of São Paulo because those areas had already been under some form or another of agricultural use for a very long time before human use was curtailed. Currently a large percentage of such areas are covered by pastures constituted by aggressive exotic grass varieties. The only areas that present advanced stages of forest regeneration are those that have been actively afforested or reforested. The restoration of riparian areas to their native condition would result in highly significant socio-environmental benefits at the local, state, and global levels. The project area consists of approximately 19,000 hectares of mostly old grasslands around ten hydropower reservoirs in the state of São Paulo, Brazil, which constitute the project activity boundaries. Five of the reservoirs - Bariri, Barra Bonita, Ibitinga, Promissão, and Nova Avanhandava - are located in the Tietê River Basin. The Água Vermelha reservoir is located on the Grande River, on the border between the states of São Paulo and Minas Gerais, and is the largest AES Tietê hydropower plant. The other four reservoirs – Euclides da Cunha, Limoeiro, Caconde, and Mogi-Guaçu - are located in the Pardo River Basin. The ten reservoirs intersect with the territories of 92 municipalities and were built over 25 years ago. In those ten reservoirs, a strip of land of about 30 meters from the maximum level of the waterline was expropriated at the time of their creation to allow for reservoir implementation. Prior to the construction of the hydroelectric plants and incorporation of the reservoirs, nearly 100 percent of those areas were already covered with aggressive grasses that make it difficult for woody species to take root. In 1985, all areas around hydropower reservoirs in Brazil, extending to 100 meters from the maximum level of the waterline, were legally designated as APPs with the objective of allowing for natural regeneration of forest. As such, the 30m strips of land controlled by AES Tietê around its reservoirs are classified as APPs. Unfortunately, contrary to all expectations, natural regeneration of native vegetation has not taken place as envisioned even after human interference was removed from such areas. In 1999, AES Tiete won a 30-year concession to manage the ten hydropower plants and associated reservoirs. Because of the lack of natural regeneration in the APPs around its reservoirs, and the continued recognition of the environmental and social importance of having riparian forests around them, AES Tiete continued the work started in 1988 by CESP, the previous operator, towards an effort to boost reforestation around its reservoirs. To help finance the scaling-up of the existing reforestation pilot initiative, and the expansion of its associated benefits, AES Tietê is seeking to leverage carbon payments for carbon sequestered in reforested APPs around its reservoirs. The ultimate goal is to achieve reforestation of about 13,939 ha. Such large scale reforestation initiative would be impossible without the support from carbon financing, especially in view of the fact that no commercial use of APPs is allowed under Brazilian legislation, and as such the reforested areas would not generate any additional financial benefits. Consistency with the UNFCCC and Kyoto Protocol Having ratified the Kyoto Protocol in 2002, Brazil created the “Comissão Interministerial de Mudança Global do Clima” (CIMGC), presided by the Ministry of Science and Technology (MCT) so as to participate in the international carbon market and sell Emission Reductions (ERs) from Clean Development Mechanism (CDM) projects. The Reforestation Using Native Species Around AES-Tiete Reservoirs Project could provide both emission reductions and fulfill government priorities for private sector investment in afforestation and reforestation activities that contribute to the rehabilitation of native forests and associated biodiversity. Rationale for Bank involvement The Bank is a Trustee of the BioCarbon Fund (BioCF), and also manages, maintains, and operates the Fund. The BioCF provides carbon finance for projects that sequester or conserve greenhouse gases in forests, agro- and other ecosystems, and thus helps to demonstrate how land use, land-use change and forestry (LULUCF) activities can generate high-quality emissions reduction (ER) with environmental and livelihood benefits that can be measured, monitored and certified, and stand the test of time. The Bank has considerable experience in Brazil with CDM projects, but the AES Tietê project would be one of the first initiatives in the LULUCF category. There is a high level of complementarity between the objectives of the AES Tietê Project and two other existing state government projects supported by the World Bank: (a) the Ecosystem Restoration of Riparian Forests in São Paulo GEF Project, which aims to arrest and reverse land degradation processes in riparian ecosystems and adjacent agro-ecosystems; and (b) the São Paulo Rural Development Project, under preparation, which aims to to increase and sustain rural production and farm incomes while ensuring environmental sustainability. The AES Tietê project offers an ideal opportunity to stimulate and facilitate the involvement of the private sector as an active and important partner in this long term enterprise. Proposed objective(s) The Reforestation Using Native Species Around AES Tietê Reservoirs Project aims to support the reforestation, with a minimum diversity of 80 and up to 126 species of native trees, of at least 2,500 ha of unmanaged grasslands to deliver a total of 400,000 ERs to the BioCarbon Fund by 2011. Through the reforestation of APPs the project will also contribute to the conservation of threatened biodiversity through restoration of degraded Atlantic Forest habitats, and stimulate the creation of sustainable local livelihood options associated with this and other future similar reforestation activities around reservoirs in the State of São Paulo and other states in Brazil. Beyond this proposed project, AES Tietê aims to reforest a total of 13,939 ha of unmanaged grasslands along the margins of ten hydropower reservoirs in the State of São Paulo, Brazil. All the areas are owned, controlled and operated by the project proponent, AES-Tietê. The project also supports the development and application of a new methodology (AR-AM0010) specific for afforestation and reforestation (A/R) activities implemented on unmanaged grassland in reserves or protected areas that are not likely to be converted to any other land use except forestry, and which have no potential to revert to forest without direct human intervention. Additional Project Benefits Despite the legal protection status of APPs, most reservoirs throughout Brazil still experience problems with illegal human settlements on their margins, the presence of productive activities within the APP restricted zone, and lack of natural regeneration. These problems are economically and environmentally costly because the unregulated use of APP areas can result in: (i) increased siltation of reservoirs, which reduces power generation potential and increases operating costs; (ii) contamination of municipal water supplies and associated increases in water treatment costs; and (iii) reduced carbon sequestration, which contributes to climate change. These problems could be significantly diminished if reservoir operators and other stakeholders in the watershed had access to technically sound and cost-effective methodologies for the reforestation of APPs. The proposed Reforestation Using Native Species Around AES-Tietê Reservoirs Project would develop, field test, and improve techniques and methodologies for reforestation of APPs using native tree species, as well as for the evaluation and monitoring of carbon sequestration in the reforested areas. The availability of tested protocols for reforestation, as well as the possibility of leveraging carbon financing to partially offset the costs of such activities, would certainly stimulate many other reservoir operators to implement reforestation of APPs at much larger scales. Project components The proposed Reforestation Using Native Species Around AES-Tiete Reservoirs Project has one single component, which is the reforestation of an area of unmanaged grasslands large enough to deliver 400,000 ERs to the BioCarbon Fund by 2011. The resulting income will help make this project more viable and attractive, and hopefully fostering implementation of similar GHG mitigation projects in a sector where there are neither incentives nor regulations aimed at promoting reforestation of existing APP areas. Reforestation of project APP areas will involve the following specific activities: (i) seedling production, (ii) site preparation, (iii) planting activities, (iv) management and monitoring of new forests. There is no World Bank Group lending in the project. The BioCarbon Fund (BioCF), administered by the IBRD as Trustee, will purchase ERs from the project and make annual payments upon verification of the generated ERs by an independent entity. Technical aspects For the identification of non-CDM baseline annual proportional forestry rate, a ‘region’ was determined based on the multiplication of the total project boundary by a factor of 202. The areas within the project boundary (and region) were screened for vegetative cover according to Quickbird imagery. The satellite images were interpreted for areas that have been reforested by AES-Tietê between 2001 and 2009, as well as, areas of human occupation and water bodies. Natural and seasonal fluctuations in the waterline due to increase/decrease of rainfall events do not affect the project boundary because the lower end of the project boundary is determined by the maximum normal level of the hydroelectric plant. Based on evidence collected by the State Secretary of the Environment, the annual average area of forest planting in the non-CDM baseline forestry stratum is zero. In accordance with the provisions of the Kyoto Protocol, “reduction in emissions must be additional to any that would occur in the absence of the certified project activity”. This constitutes the additionality criterion that determines whether an aspiring CDM project generates temporary certified emission reductions (tCERs). Baseline methodology: The project has developed and will use the approved afforestation and reforestation baseline and monitoring methodology AR-AM0010 “Afforestation and reforestation project activities implemented on unmanaged grassland in reserve/protected areas” (Version 03). An analysis of the current situation indicates that the main barrier categories for this project are: Prevailing practices, as the project activity is the “first of its kind” and no other project activity of this type and scale, funded solely by the private sector, is currently operational in the host country. Vale do Rio Doce is providing counterpart funds to the Florestas para Vida project in Espirito Santo to reforest with native species and are encountering the same difficulties and similar costs. Institutional barrier represented by the lack of enforcement of forest or land-use related legislation in neighboring areas, thus limiting the possibilities for spontaneous seed germination and/or growth of seedlings of young trees within the project boundary. Technological barrier, since one major factor that impacts the viability of large scale restoration efforts within the State of São Paulo is the low availability of high quality seedlings, with the necessary species diversity. In addition, the knowledge of how and where to collect native species seedlings is also a significant barrier. Barriers due to ecological conditions as exotic grass species, such as the African Brachiaria decumbens, have significantly impaired the natural regeneration of forest areas within the State of São Paulo. The identified barriers form the basis for demonstration of additionality given that the project proponents would not propose to implement a large scale reforestation activity without the possibility of obtaining carbon revenues. The identified barriers are not preventing the continuation of the current land use as unmanaged grassland. In fact, these barriers work for the maintenance of the status quo. Institutional aspects The proposed A/R CDM project activity will be implemented under the following operational and management structure: AES Tietê (Dept. of Environment) with headquarters in São Paulo, Brazil will be responsible for general management of the project activity. Monitoring data for actual GHG removals by sinks and any leakage generated by the proposed A/R CDM project activity will be reviewed by the team in São Paulo; UHE Promissão (Dept. of Environment) with headquarters in Promissão, Brazil will be responsible for coordinating field activities and seedlings supply; and, The Universidade de São Paulo, Escola Superior de Agricultura Luiz de Queiroz, (Dept. of Forestry Sciences) located in Piracicaba, Brazil will be responsible for applying the monitoring plan in partnership with AES Tietê. Monitoring data for actual GHG removals by sinks and any leakage generated by the proposed A/R CDM project activity will be compiled by the team in Piracicaba.The project entity is AES Tietê S.A., which would enter in an Emissions Reduction Purchase Agreement (ERPA) with the World Bank. The Bank acts as a trustee of the BioCarbon Fund for the purchase of GHG emissions reductions. AES Tietê has retained SGS, a CDM-accredited Designated Operational Entity (DOE) to carry out Project Validation. AES Tietê shall also arrange for the first Verification, in conjunction with the BioCF, of all GHG Reductions generated by the Project, as well as for any other necessary subsequent Verification of GHG Reductions. Once the project is validated, a DOE other than the one used for Validation verifies emission reductions, certifies them as appropriate, and requests the CDM Board to register the project. Certified Emission Reductions (tCERs) are then issued accordingly by the UNFCCC. After the first Verification prior to 2012, Verification will be conducted every 5 years. The project will be fully implemented by AES Tietê. All activities related to the reforestation aspects of the project, including seed collection, preparation of seedlings, planting, and maintenance, would be implemented by AES Tietê through its own staff and the temporary contracting of specialized consultants and additional manpower for field activities. Safeguard Policies that might apply
The project has been rated a Category “B” as the impacts are mostly limited in scope, localized, temporary and reversible. AES Tietê has carried out an Environmental Assessment and prepared an Environmental Management Plan. The only identified potential negative environmental impacts, the use of herbicides and pesticides to control aggressive weeds and leaf-cutter ants, would be localized and temporary. The environmental benefits of the proposed reforestation activity would greatly surpass such temporary negative impacts. Their control and respective mitigation measures are identified in the Project Environmental Management Plan and implementation will be under the responsibility of AES Tietê’s permanent technical team, composed of five professionals, including one agricultural engineer, one biologist/forester, one biologist, one agro-chemical engineer, and one environmental technician. The project has been presented and discussed in several academic seminars and other public meetings related to opportunities in the carbon trade market. The project design is fully supported by other partners, including the State Forum on Global Climate Change and Biodiversity, as evidenced in many presentations of the project in public events. The Brazilian DNA has been very supportive of the project as well. All relevant project documents, including the Environmental Assessment, can be viewed and downloaded from AES Tietê’s website: http://www.aestiete.com.br. Tentative financing Proposed terms: Sales of 400,000 ERs to the BioCarbon Fund, to be generated by no later than 2012 (price to be negotiated at the time of signing the ERPA). Contact point Contact: Maria Isabel J. Braga Title: Sr. Environmental Specialist Tel: 202-458 0121 Email: mbraga@worldbank.org Location: Washington D.C. 1 Under the National Forest Code, Law Number 4.771/1965 (Código Florestal Lei 4.771/1965), areas situated around artificial water reservoirs were included in the APP category by Resolution 4/1985 and Resolution 302/2002 passed by the Brazilian National Environmental Council, CONAMA. 2 AR-AM0010 determines that the non-CDM proportional forestry rate shall be based on lands in the region. A region shall be considered to be that centred on the project area, and within a radius sufficient to include an area of the non-CDM baseline forestry stratum equal to at least 20 times the proposed project area. ** By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas Directory: curated curated -> Concept stage curated -> Concept stage curated -> Republic of Côte d'Ivoire Urbanization Review curated -> Report No: aus11011 Central America curated -> Report No. 94474-pk fiscal Disaster Risk Assessment Options for Consideration curated -> Environmental and Social Management Framework for the Costa Rica Telecommunications Sector Modernization Project curated -> Environment Impact Assessment For Jiangxi Shangrao Sanqingshan Airport Beijing Guohuantiandi Environmental Technology Development Center. Ltd. Oct. 2012 Content curated -> Growth through Innovation An Industrial Strategy for Shanghai By Shahid Yusuf Kaoru Nabeshima April 22nd, 2009 curated -> Report No: 70178. People's Republic of China Download 45.56 Kb. Share with your friends:
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