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World Bank Document Document of The World Bank Public Disclosure Authorized Report No: 23889 EC PROJECT APPRAISAL DOCUMENT ONA PROPOSED GRANT FROM THE GLOBAL ENVIRONMENT FACILlTY TRUST FUND IN THE AMOUNT OF SDR 2.86 MILLION (US$ 3.7 MILLION EQUIVALENT) Public Disclosure Authorized TO THE REPUBLIC OF ECUADOR AND A GRANT FROM THE GLOBAL ENVIRONMENT FACILITY TRUST FUND OF SDR 3.41 MILLION (US$ 4.3 MILLION EQUIVALENT) TO THE NATIONAL ENVIRONMENTAL FUND Public Disclosure Authorized FOR THE NATIONAL SYSTEM OF PROTECTED AREAS October 31, 2002 Environmentally and Socially Sustainable Development Bolivia, Ecuador and Peru Country Management Unit Latin America and Caribbean Region Office Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective US Dollar Ecuador's official currency since September 2000) Currency Unit = FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS AOP - Annual Operational Plan CAS - Country Assistance Strategy CBD - Convention on Biological Diversity CCER - Cotacachi Cayapas Ecological Reserve CFPR - Cuyabeno Faunal Production Reserve DBPA - Directorate of Biodiversity and Protected Areas EIC - Environmental Information Center of the Ministry of the Environment EIS - Environmental Information System FAN - National Environmental Fund FAO - United Nations Food and Agriculture Organization GEF - Global Environmental Facility GIS - Geographical Information System GOE - Government of Ecuador GNTB - National Biodiversity Working Group ICR - Implementation Completion Report INEFAN - Ecuadorian Institute of Forestry, Natural Areas and Wildlife IPMU - International Projects Management Unit LAC - Latin America and the Caribbean MAG - Ministry of Agriculture and Livestock M&E - Monitoring and Evaluation MNP - Machalilla National Park MoE - Ministry of the Environment MP - Managerial Plan NSB - National Strategy for Biodiversity NGOs - Nongovernmental Organizations NSPA - National System of Protected Areas OCB - Community-based Organizations OSGs - Second Grade Organizations PA - Protected Area PAD - Project Appraisal Document PAF - Protected Areas Fund PAG - Annual Disbursement Plan PMC - Participatory Management Committees SEC - National System of Education and Training SPNSPA - Strategic Plan for the National System of Protected Areas STAP - GEF's Scientific and Technical Advisory Panel TAC - Technical Advisory Committee-NSPA TAG - Technical Advisory Group UNDP - United Nations Development Program Vice President: David de Ferrranti Country Director: Isabel Guerrero ESSD Director: John Redwood Team Leader: Gabriela Arcos ECUADOR NATIONAL SYSTEM OF PROTECTED AREAS CONTENTS A. Project Development Objective Page 1. Project development objective 3 2. Key performance indicators 3 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 4 2. Main sector issues and Government strategy 4 3. Sector issues to be addressed by the project and strategic choices 8 C. Project Description Summary 1. Project components 9 2. Key policy and institutional reforms supported by the project 13 3. Benefits and target population 13 4. Institutional and implementation arrangements 14 D. Project Rationale 1. Project alternatives considered and reasons for rejection 17 2. Major related projects financed by the Bank and other development agencies 18 3. Lessons learned and reflected in the project design 22 4. Indications of borrower commitment and ownership 23 5. Value added of Bank support in this project 24 E. Summary Project Analysis 1. Economic 25 2. Financial 25 3. Technical 26 4. Institutional 26 5. Environmental 29 6. Social 30 7. Safeguard Policies 32 F. Sustainability and Risks 1. Sustainability 33 2. Critical risks 33 3. Possible controversial aspects 35 G. Main Grant Conditions 1. Effectiveness Condition 35 2. Other 35 H. Readiness for Implementation 36 I. Compliance with Bank Policies 36 Annexes Annex 1: Project Design Summary 37 Annex 2: Detailed Project Description 40 Annex 3: Estimated Project Costs 61 Annex 4: Incremental Cost Analysis 62 Annex 5: Financial Summary for Revenue-Earning Project Entities, or Financial Summary 68 Annex 6: (A) Procurement Arrangements 70 (B) Financial Management and Disbursement Arrangements 75 Annex 7: Project Processing Schedule 86 Annex 8: Documents in the Project File 88 Annex 9: Statement of Loans and Credits 89 Annex 10: Country at a Glance 90 Annex 11: Government and Parallel Financing 92 Annex 12: Social Assessment 95 Annex 13: Indigenous People Development Framework 109 Annex 14: Lessons Learned from the GEF Ecuador Biodiversity Conservation Project 113 Annex 15: Environmental Framework 116 Annex 16: Project Institutional Framework 119 Annex 17: Letter of Sector Policy 121 Annex 18: Process Framework for mitigating Potential Livelihood Impacts 124 MAP(S) 32145 ECUADOR National System of Protected Areas Project Appraisal Document Latin America and Caribbean Region LCSEN Date: August 16, 2002 Team Leader: Gabriela Arcos Sector Manager/Director: John Redwood Sector(s): General agriculture, fishing and forestry sector Country Manager/Director: Isabel M. Guerrero (50%), General public administration sector (50%) Project ID: P066752 Theme(s): Biodiversity (P), Environmental policies and Focal Area: B - Biodiversity institutions (P), Other rural development (P) -Project Financing Data [ Loan [ Credit [X] Grant [ ] Guarantee [X] Other: For Loans/Credits/Others: Amount (US$m): 8.0 Financing Plan (US$m): Source Local Foreign Total* BORROWER/RECIPIENT 4.40 0.00 4.40 US: AGENCY FOR INTERNATIONAL DEVELOPMENT 2.49 0.00 2.49 (USAID) BORROWING AGENCY 2.39 0.00 2.39 GLOBAL ENVIRONMENT FACILITY 8.00 0.00 8.00 GERMANY, GOV. OF (EXCEPT FOR BMZ) 5.84 0.00 5.84 NETHERLANDS, GOV. OF THE (EXCEPT FOR 2.34 0.00 2.34 MOFA/MIN.OF DEV.COOP.) INTER-AMERICAN DEVELOPMENT BANK 4.00 0.00 4.00 NON-GOVERNMENT ORGANIZATION (NGO) OF 3.20 0.00 3.20 BORROWING COUNTRY Financing Gap 0.04 1 0.04 Total: 32.70 0.00 32.70 Borrower/Recipient: REPUBLIC OF ECUADOR & FAN Responsible agency: MINISTRY OF ENVIRONMENT AND FONDO AMBIENTAL NACIONAL (FAN) The Republic of Ecuador and Fondo Ambiental Nacional Directorate of Biodiversity (DBPA) Address: Av. Eloy Alfaro y Amazonas-piso 8 Contact Person: Roberto Ulloa Tel: :(593-2) 2506-337 Fax: Email: [email protected] Other Agency(ies): Protected Areas and Fondo Ambiental Nacional (FAN) Address: Mariano Aguilera y Pradera-Edificio Santorini-Piso 6 Contact Person: Samuel Sangueza Tel: (593-2) 2557-691/2 Fax: (593-2) 2557-691/2 Email: [email protected] Estimated Disbursements ( Bank FY/US$m): FY 2002 2003 2004 2005 . : Annual 4.50 1.50 1.00 1.00 Cumulative 4.50 6.00 7.00 8.00 Project implementation period: 4 years Expected effectiveness date: 01/08/2003 Expected closing date: 06/30/2007 OcS PADF.. F- MM 2. - 2- A. Project Development Objective 1. Project development objective: (see Annex 1) The project's development objective is to ensure the conservation and management of Ecuador's biodiversity for socially sustainable development by strengthening the National System of Protected Areas (NSPA) through improving the legal, institutional and financial foundations and capacities for the integrated, participatory management of protected areas (see Annex 1). A Strategic Plan for the NSPA (15-year plan) has been developed with the assistance from the GEF Biodiversity Project (GEF Grant 28700-EC), to revert the declining status and sustainability of many protected areas, and taking into account the structural changes occurring in the country's public sector. The long-term vision is to ensure that NSPA is self-sustained, transparent, decentralized, and managed through partnerships with local communities, government at various levels, NGOs and the private sector. The long-term vision and the activities proposed for the project have addressed the major lessons learned from the earlier Biodiversity Protection Project. This strategy has been discussed widely and has been adopted by the Ministry of the Environment. The proposed 4-year project, is the first phase of the Plan's implementation, and will specifically: a) strengthen the legal and regulatory framework for the co-management of protected areas; b) design and implement management plans for two priority protected areas (Machallila and Cotacachi-Cayapas), pilot concessions for services and develop participatory planning/management models in these areas; c) consolidate a Protected Areas Trust Fund to cover the recurrent costs of up to nine priority protected areas; and d) consolidate the monitoring and information system for the NSPA. 2. Key performance indicators: (see Annex 1) * Protected Areas Fund supports recurrent costs of at least 9 Protected Areas; * NSPA is able to effectively protect ecosystems of global importance for biodiversity conservation contained in the two selected protected areas, through the effective implementation of management plans; * Local communities within and around the selected Protected Areas are actively involved and committed to PAs conservation; through the establishment and operations of the Participatory Management Committees; * Directorate of Biodiversity and Protected Areas capable for resource allocation, regulating, monitoring and supervising the NSPA; * Non-budget revenues of NSPA increase in a gradual and on permanent basis; * Concessions for services in PAs are fully regulated and piloted in the two selected PAs; * NSPA Strategy updated; * Biodiversity Law approved within the next two years and regulations enforced; * A sound evaluation and monitoring system
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