Final Report Feasibility Study – Kazbegi Project

Ministry of Environment Protection and Natural Resources (MEPNR)

Agency for Protected Areas (APA)

Ecoregional Programme III (Georgia), Kazbegi Project

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Final REPORT German Financial Cooperation with Georgia

March 2010

Deutsche Forstservice GmbH AGEG Consultants eG

GEO - ERP Draft Report Feasibility Study Kazbegi i

TABLE OF CONTENT

Table of Content...... i

List of Figures...... iii

List of Tables...... iii

Abbreviations and Acronyms...... iii

Contact Persons and Addresses ...... iii

EXECUTIVE SUMMARY...... iii

1. Introduction ...... 3 1.1 Background...... 3 1.2 Constraints and Limitations to the Feasibility Study...... 3 1.3 Methodological Approach...... 3 1.4 Trust-Building Measures...... 3

2. Situation Analysis...... 3 2.1 Biophysical Framework of the Kazbegi Municipality ...... 3 2.1.1 Climate...... 3 2.1.2 Geology, Soils, Geomorphology, Mineral Deposits, and Landscape ...... 3 2.1.3 Flora and Vegetation...... 3 2.1.4 Fauna ...... 3 2.1.5 Threatened Species and Ecosystem Conservation Value ...... 3 2.1.6 Water Regime...... 3 2.2 Socio-cultural Economic Framework ...... 3 2.2.1 Village Profiles ...... 3 2.2.1.1 Demography...... 3 2.2.1.2 Household Income and Employment...... 3 2.2.1.3 Livestock 3 2.2.1.4 Agriculture...... 3 2.2.1.5 Tourism in the Region ...... 3 2.2.1.6 Actual Land Use...... 3 2.2.2 History of Range Use...... 3 2.2.3 Land Tenure ...... 3 2.2.4 Zemo Larsi Border Crossing ...... 3

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2.2.5 Waste Management State and Environmental Pollution...... 3 2.3 Policy and Legal Framework ...... 3 2.3.1 Comparability of the selected Approach with international agreements/ conventions and the policy of the German Government for Development Cooperation...... 3 2.3.2 Comparability of the selected Approach with Georgias National Policies ...... 3 2.3.3 Georgia’s Protected Area System ...... 3 2.3.4 Biosphere Reserves...... 3 2.4 Stakeholder Analysis...... 3 2.5 Projects Related to the Project or Study Area...... 3

3. Problem Analysis and Project Justification ...... 3 3.1 Key Problems...... 3 3.1.1 Threats on the environment and the high and unique biodiversity...... 3 3.1.2 Barriers and problems related to sustainable economic development ...... 3 3.2 Anticipated Threats ...... 3 3.3 Expected Project Impacts...... 3 3.3.1 Expected ecological/ environmental impacts...... 3 3.3.2 Expected socio-economic impacts ...... 3 3.3.3 Structural impacts ...... 3 3.4 Project Justification ...... 3

4. Proposed Project...... 3 4.1 Project Overview ...... 3 4.2 Overall Goal and Objectives...... 3 4.3 Options for Meeting Overall Goals and Objectives ...... 3 4.3.1 Option Biosphere Reserve...... 3 4.3.2 Option National Park and Support Zone...... 3 4.3.3 Comparative SWOT Analysis...... 3 4.3.4 Consultants Votum...... 3 4.4 Project Area ...... 3 4.4.1 Definition of Target Area ...... 3 4.4.2 Inclusion of Gudauri ...... 3 4.4.3 Current delineation of Kazbegi National Park and Expansion Proposal ...... 3

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4.4.4 Methodology for the Re-delineation and Zoning...... 3 4.4.4.1 Setting Site-based Conservation Priorities...... 3 4.4.4.2 Minimum Critical Size of a Viable Kazbegi National Park...... 3 4.4.4.3 Land Tenure Map...... 3 4.4.4.4 Actual Land Use Map ...... 3 4.4.4.5 Potential Conflict Areas ...... 3 4.4.5 Proposed Zoning of Target Area ...... 3 4.4.5.1 Proposed Planning Area...... 3 4.4.5.2 Proposed Conservation Areas...... 3 4.4.5.3 Proposed Support Zone of Kazbegi National Park...... 3 4.4.5.4 Proposed Community-Based Hunting Cooperative...... 3 4.4.5.5 Limitations resulting from the proposed zoning and targeted mitigation measures ...... 3 4.5 Proposed Project Approach...... 3 4.5.1 Principles and Guidelines for the Application ...... 3 4.6 Logical Framework...... 3 4.7 Selection criteria and procedures for the project components ...... 3 4.8 Proposed Project Components...... 3 4.8.1 Protected Area Regime is established and operational ...... 3 4.8.1.1 Legal framework adjusted ...... 3 4.8.1.2 Co-Management Structures established...... 3 4.8.1.3 Community Ranger Service established...... 3 4.8.1.4 Business Plan for Protection and Support/ Transition Zone elaborated (PI)...... 3 4.8.1.5 Management Plan for NP and Support/ Transition Zone elaborated (PI) ...... 3 4.8.1.6 NP Administration strengthened...... 3 4.8.1.7 Relationship between APA and local population improved 3 4.8.2 Eco-Tourism is established in the region...... 3 4.8.2.1 Quality of private guest house services improved (QM) 3 4.8.2.2 Mountain rescue and guide service is established...... 3 4.8.2.3 Network of mountain huts & shelters improved...... 3 4.8.2.4 Marketing of tourism through branding of local products improved...... 3

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4.8.3 Livelihood stabilization is supported...... 3 4.8.3.1 Assessing and combating Brucella abortus is supported (QM) ...... 3 4.8.3.2 Diary production is enhanced ...... 3 4.8.3.3 Local beekeeping is improved ...... 3 4.8.3.4 Wool processing is supported...... 3 4.8.3.5 Collection and marketing of culinary herbs and medicinal plants is supported ...... 3 4.8.3.6 Pilot project using biogas for Greenhouses is established...... 3 4.8.4 Regional development, mainstreaming of biodiversity protection and stakeholder institutions are supported...... 3 4.8.4.1 Environmental awareness and project information campaign is conducted (PI)...... 3 4.8.4.2 Participatory Integrated Spatial Land Use Planning is implemented (PI)...... 3 4.8.4.3 Accessibility on roads during winter is improved...... 3 4.8.4.4 Regional waste management is improved ...... 3 4.8.4.5 Village engery supply of Djuta village as model established...... 3 4.8.4.6 Sewage Treatment in the region improved ...... 3 4.8.4.7 Land Title Registration is supported ...... 3 4.8.4.8 Community-Based Hunting Cooperative established...... 3 4.9 Target Group and Intermediaries...... 3 4.9.1 Definition of Target Groups ...... 3 4.9.2 Articulated Needs...... 3 4.9.3 Poverty Situation and Targeted Project Impacts...... 3 4.9.4 Gender Aspects ...... 3

5. Project organisation and implementation...... 3 5.1 Grant Recipient ...... 3 5.2 Project Executive Agency (MEPNR) and Project Implementation Agency (APA) – Analysis of Present Situation...... 3 5.3 Organizational Set-up...... 3 5.4 Institutional Arrangements...... 3 5.5 Management and Implementation Consultants...... 3 5.6 Acquisition of Goods and Services ...... 3

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5.7 Project Planning and Participatory Implementation Concept...... 3 5.7.1 Participatory Project Management ...... 3 5.7.2 Project Cycle for Sub-Components ...... 3 5.8 Implementation Schedule...... 3 5.8.1 Overall duration of the project ...... 3 5.8.2 Implementation phases...... 3

6. Project costs and Funding ...... 3 6.1 Overall Project Costs...... 3 6.2 Phasing of Project Costs ...... 3 6.3 Overall Financing and Sources...... 3 6.3.1 Contribution of the German Financial Cooperation...... 3 6.3.2 Contribution of Government of Georgia...... 3 6.3.3 Beneficiary Labour Contributions ...... 3 6.4 Financial Arrangements...... 3 6.5 Financial Monitoring ...... 3 6.6 Exit Strategy...... 3

7. Risk Assessment and Mitigation Opportunities...... 3 7.1 Project Level Risks...... 3 7.2 Other Risks ...... 3 7.3 Mitigation Measures ...... 3

8. Consultant Votum...... 3 8.1 Consultant Votum...... 3 8.2 Definition of Pre-Conditions...... 3

SELECTED REFERENCES...... 3

LIST OF FIGURES

Figure 1: Location of Study Area...... 3

Figure 2: Vegetation Map...... 3

Figure 3: Plant endemism in Kazbegi. Source: Nakhutsrishvili et al. (2005)...... 3

Figure 4: Vertical zonation of vegetation in Kazbegi...... 3

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Figure 5: Stakeholder Overview...... 3

Figure 6: Planning Area by former Sakrebulo...... 3

Figure 7: Flora and Fauna...... 3

Figure 8: Proposed approach to Zoning...... 3

Figure 9: Proposed Conservation Areas ...... 3

Figure 10: Actual Land Use by Sakrebulo ...... 3

Figure 11: Actual Land Use and Proposed Conservation Areas...... 3

Figure 12: Protected Areas on the Russian side bordering Kazbegi...... 3

Figure 13: Proposed Zoning...... 3

Figure 14: Organizational structure...... 3

LIST OF TABLES

Table 1: Plant communities of Kazbegi. Modified from Nakhutsrishvili et al. (2005)...... 3

Table 2: Villages and their respective Sakrebulo in the Kazbegi target area ...... 3

Table 3: Actual Land Use in the Kazbegi target area ...... 3

Table 4: Average Daily Traffic on Mtskheta-Stepantsminda-Larsi Road...... 3

Table 5: Government Agencies with activities in Georgia relevant to the project...... 3

Table 6: International donor agencies with activities in Georgia relevant to the project...... 3

Table 7: IGOs, national/international NGOs and academic institutions relevant to the project...... 3

Table 8: Private Sector Stakeholders...... 3

Table 9: Summary of key problems and ecological impacts...... 3

Table 10: Summary of key problems and socio-economic impacts...... 3

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Table 11: Comparative SWOT analysis regarding the feasibility, the added value and the added costs of both options ...... 3

Table 12: Resources use licenses issued for Kazbegi Municipality. (Source: Ministry of Economic Development of Georgia, Department of Natural Resources Licensing. Date: October 2009)...... 3

Table 13: Size Comparison of the Proposed Zones of Planning Area...... 3

Table 14: Limitations resulting from the proposed zoning and mitigation measures...... 3

Table 15: Selection criteria for project components...... 3

Table 16a: Financial Analysis Private Guesthouse Development...... 3

Table 16b: Financial Analysis Brucellosis Campaign ...... 3

Table 17: Priority Needs as Perceived by the Communities of Planning Area ...... 3

Table 18: Livelihood assets and expected project impacts...... 3

Table 19: Share of Responsibility and Tasks ...... 3

Table 20: Implementation Schedule...... 3

Table 21: Overall Cost and Financing Plan...... 3

Table 22: Flow of Funds ...... 3

ABBREVIATIONS AND ACRONYMS

APA Agency for Protected Areas BR Biosphere Reserve CBC Caucasus Biodiversity Council CBD Convention on Biodiversity CPAF Caucasus Protected Areas Fund CTA Chief Technical Advisor DFS Deutsche Forstservice GmbH ECP Ecoregional Conservation Plan EIA Environmental Impact Assessment EPN European Neighbourhood Policy

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ERP Ecoregional Programme FS Feasibility Study GIS Geographical Information System GTZ German Development Cooperation IUCN International Union of Nature Conservation KBA Key Biodiversity Areas KfW Bank for Reconstruction and Development (Kreditanstalt für Wied- eraufbau) KNP Kazbegi National Park MAB Man and Biosphere MDG Millennium Development Goals MEPNR Ministry of Environment Protection and Natural Resources of Georgia NP National Park PA Protected Area PEA Project Executing Agency PIA Project Implementing Agency PIU Project Implementation Unit PI Priority Intervention ISLUP Integrated Spatial Land Use Planning PRA Participatory Rural Appraisal QM Quick-start Measure REC Regional Environmental Centre of the Caucasus SZ Support Zone SPA Strictly Protected Area TJS Transboundary Joint Secretariat ToR Terms of Reference WWF World-wide Fund for Nature

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CONTACT PERSONS AND ADDRESSES

For DFS Deutsche Forstservice GmbH Mr. Christian SCHADE Authorized Representative DFS Deutsche Forstservice GmbH Wittelsbacherstr. 11 85622 Feldkirchen Germany Phone: + 49 – (0)89 - 94 00 59 21 Fax: + 49 – (0)89 - 94 00 59 79 Email: [email protected]

For AGEG Consultants eG Mr. Harald HIMSEL Managing Director AGEG Consultants eG Jesinger Straße 52 73230 Kichheim unter Teck Germany

Phone: +49 - (0)7021 - 970870 Fax: +49 - (0)7021 - 970879 Email: [email protected]

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EXECUTIVE SUMMARY 1. Introduction During the intergovernmental consultation in May 2008 it was agreed to assist Georgia in the development of a biosphere reserve with a grant of up to € 4 millions under Ger- man Financial Cooperation. This feasibility study is conducted in support of the proposed project to be developed under this agreement. The Project Executing Agency (PEA) is the Ministry of Environment Protection and Natural Resources of Georgia (MEPNR). The Ministry has assigned the Agency for Protected Areas (APA) as project implementation agency (PIA). The consulting services of the Consortium “Deutsche Forst Service GmbH (DFS)” and “AGEG Consultants AG” were retained for the implementation of the Feasibility Study to be finalized between the 2nd of October 2009 and the 15th of January 2010.

1.1 Goal and Objectives of the Proposed Project The overall Goal of the bilateral aid agreement and the proposed project is the consolidation of sustainable economic development and biodiversity conservation in the Kaz- begi Municipality. Key objective of the feasibility study is to identify the most suitable option for reaching the overall goal. In accordance with the terms of reference emphasis in the feasibility study is to be placed on the investigation of the biosphere reserve concept as a preferred option by KfW.

1.2 Constraints and Limitations to the Feasibility Study The most serious constraint to the potential establishment of a biosphere reserve in the Kazbegi region proved to be the strong opposition by local people and any Government interference with local land use issues. Grandfathered traditional land rights and communal land use are fiercely defended with little tolerance to any outside interference. This also is seen as one reason for the low interest shown by local families in obtaining land titles as proof of land ownership, promoted through Georgia’s land reforms from 1998 and 2007.

The past and continuing top-down approach to the planning, establishment and management of protected areas in the Kazbegi Region is considered one of the key root causes for the local opposition and anger. Against this background any attempt for the establishment of a biosphere reserve would meet strong local resistance.

The trust-building measures elaborated and implemented as part of the feasibility study proved to be a serious time constraint to the team consuming too much time to better be spent on the project preparation.

1.3 Methodological Approach The feasibility study commenced with a comprehensive stakeholder analysis, followed by the definition of the planning area, and a review of the concept of a biosphere reserve compared to a national park and support zone as two potential options meeting the overall goals and objectives of the proposed project. Local stakeholder participation, information exchange and awareness raising were mainstreamed into all compo-

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP Draft Report Feasibility Study Kazbegi xi nents and activities of the following feasibility study. Field work focused on the elaboration of village profiles and the participatory mapping of actual land use providing the basis for the design of proposed quick-start measures and interventions with focus on livelihood stabilization, community enhancement and regional development. In parallel, background information was collected on high biodiversity areas guiding the tentative zoning plan for the target area and the definition of the proposed conservation areas and best governance structure. Preliminary results of the feasibility study and the consultant Votum were presented to APA and local authorities on the 27th of November 2008 in Tbilisi.

1.4 Trust-building Measures Ten trust-building measures were selected by workshop participants of the open stakeholder workshop held in Stepantsminda in early November. All ten rather successful measures that were supervised by the Trust-building Measure Committee (five Com- mittee members elected by the workshop participants), have been completed within the timeline of the feasibility study.

2. Situation Analysis The situation analysis focused on an assessment and description of the (a) biophysical-, (b) socio-cultural-economic-, (c) legal- and policy-, and (c) administrative framework related to the defined planning area. The assessment of existing framework conditions was used for the identification of data gaps and as background for the design of the project components. Key findings are summarized as follows.

2.1 Biophysical Framework The target area covers the entire water catchment area of the Tergi River with its two main tributaries Baidara and Snostskali. The Tergi River floodplain and rather narrow side valleys are flanked by steep slopes which are prone to geological erosion, land slides and frequent avalanches in winter causing extra hardship to already isolated communities characterized by frequent road closures and power outages.

The flora is typified by high mountain grassland communities of the High Caucasus, interspersed with highly fragmented birch-ash forests patches along lower slopes, sidehills and micro-watersheds and a juniper-rhododendron belt forming the treeline above 2000 m elevation. Prominent fauna of the region includes Caucasian goat, chamoix, brown bear and wolf. The avifauna is richly represented with several species endemic to the area. Numerous plant and animal species reported from the region are listed in Georgia’s Red Data Book.

2.3 Socio-cultural Economic Framework The total population of the target area is 2962 persons (1366 permanent and 114 seasonal families). Of the 2962 registered residents living in the 25 target area 1096 persons are older than 60 years. The population has decreased by more than 50% since 2005 as a result of lack of job- and economic opportunities with poor prospects of improvement. Subsistence agriculture and livestock (mostly dairy cows) have become the

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP Draft Report Feasibility Study Kazbegi xii main stay of the local economy after the break-down of the thriving sheep industry and the lucrative produce production using commercial green-house operations following Georgia’s independence in 1991.

2.4 With the majority of younger people abandoning the predominantly rural lifestyle of the target area, the aging population will soon lack the work force needed to expand the rural market economy although the framework conditions for substantially improving the dairy industry are excellent. The potential for the development of the tourism industry in the target area is considered high, pending improved and high quality infrastructure and services and a thorough environmental clean. The mostly nature-based tourism as prime attraction, however, is expected to remain a seasonal activity

2.5 Policy and Legal Framework The legal framework related to the country’s protected area system is currently under review. Georgia has adopted IUCN’s protected area system including six protected area categories of decreasing protection status. The current interest in the establishment of biosphere reserves in Georgia lacks legal backing, commitment by key stakeholders and sound information on potentially added values of an untested instrument which attempts to harmonize people and their economic development with nature conservation, compared to the well established system of a national park and support zone providing the same economic and development opportunities.

2.6 Stakeholder Analysis The national stakeholder analysis focused on APA, the Ministry of Environment Protec- tion and Natural Resources, other Ministries and State Institutions. It also covered national and international NGOs, donors, implementing organizations, academic institutions and the private sector. Low interest in biosphere reserves and indifference to the Kazbegi biosphere proposal proved to be common to all 50 stakeholders interviewed, although all stakeholders were supportive of the proposed biodiversity conservation initiative and the sustainable economic regional development in the target area. None of the stakeholders has on-going or planned projects in the Kazbegi Municipality, except for the Asian Development Bank expressing specific interest in assistance to organized sewage disposal in the Kazbegi Region in tandem with the proposed KfW interventions.

2.6 Problem Analysis The most visible environmental problems related to the target area are uncontrolled waste disposal and the sheet- and channel erosion marking the steep slopes lining the Tergi River watershed and feeder-streams, caused by excessive livestock activity in the past.

The Kazbegi National Park, originally established to protect the remaining forest fragments scattered throughout the lower Tergi River watershed and side valleys, is in urgent need of re-definition and effective management. Frequent landslides and ava-

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP Draft Report Feasibility Study Kazbegi xiii lanches in the target area pose a permanent threat to communities, especially in the Sno Valley.

Recognized economic problems relate to the lack of job opportunities and economic alternatives in the target area, and most significantly to a rapidly dwindling and aging population with young people leaving their communities in search for a better life elsewhere.

Grandfathered land use rights, traditional land tenure pattern, and the pronounced anti- authoritarian and anti-government sentiments of the local population are recognized barriers to the establishment of protected areas in state ownership.

3. Proposed Project 3.1 Options for Meeting Overall Goals and Objectives i) Option Biosphere Reserve. The concept of a biosphere reserve fosters biodiversity conservation to be mainstreamed into the sustainable economic development of rural areas with a high dependency on natural resources. Such areas are generally characterized by unsustainable and poorly controlled land and resource use threatening the ecological integrity of existing core areas of biodiversity conservation and the environment at large. The biosphere reserve concept focuses on people and their needs to be embedded in a sustainable environment.

The feasibility assessment of the biosphere reserve concept to be applied to the Kaz- begi Planning Region revealed a very low overall suitablity of the target area for the establishment of a biosphere reserve for the following reasons:

Feasibility · Zoning: Narrow valleys flanked by extremely steep slopes and a continuum of use in a vertical transition not suited for any zoning as mandatory for a biosphere reserve. Insignificant threats to the ecologically most valuable areas of the region (i.e., high mountain grassland ecosystems) not requiring special protection through the establishment of a buffer zone as stipulated by the biosphere stat- utes, hence no reason for the establishment of a “buffer zone” and for imposing restrictions on areas not being used as implicit in the term “Buffer zone”; · Local Support: Open hostility of local people to the concept of a biosphere reserve compounding resentment against the existing National Park which needs to be enhanced to make it ecologically viable with or without a biosphere reserve; very poor commitment by local authorities to the concept; · Organizational arrangements: Cooperation of Administration with other governmental organizations, NGOs, private sector etc. for the management of BR, should be happening regularly, but not “in exceptional cases,” as stated by the Georgian Law on PAS (Article 18, paragraph 4). Permanent mechanisms and

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structures to allow broad participation of all stakeholders in BR management and development required.

Added value · Biodiversity Conservation: No added value of a biosphere reserve for sustainable biodiversity conservation and economic development of the region compared to well established models (National Park and Support Zone); · Socio-economic development: Dwindling population in the Kazbegi target area (since 2005 the population has decreased from 6000 to less than 2900 by 2009 of whom 700 are seasonal residents); unfavourable age class distribution (35% of total population older than 60) and therefore rapidly decreasing work force with major impacts on the rural economy limit the economic development of the region. A structure as required for a biosphere reserve makes little sense in an area of low economic development potential, a rapidly dwindling and aging population.

Added cost · Institutional set-up: No clear legal authority for the management of a biosphere reserve in Georgia. Perceived difficulties in a meaningful and functioning governance model requiring multi-agency cooperation. · Framework adjustments: insufficient legal framework complicating the issue of establishing a biosphere reserve in contrast to the existing structure of a National Park (and support zone); ii) Option National Park and Support Zone. This option entails strengthening and substantially expanding the existing Kazbegi National Park to be converted into an ecologically viable conservation area protecting rare high mountain forests and shrublands. Strengthening the existing park is of cardinal importance with or without the establishment of a biosphere reserve. New to the proposed second option (national park and support zone) is the designation, establishment and well targeted economic development of the park’s support zone. The establishment of a national park support zone is a legal requirement specified by Georgia’s Law on Protected Areas.

All 25 communities located in the Tergi River catchment area would form part of the NP support zone. Major advantages of a NP and support zone over the biosphere reserve concept include:

Feasibility · Local Support: The concept of a national park and support zone is easier understood and more acceptable by local people than an unknown biosphere reserve. The Kazbegi local people are used to the existence of a national park which is expected to be more acceptable under the right framework conditions (co- management and sustainable economic development of the support zone to be felt at the household level) than an untested, unknown and rather complex biosphere reserve;

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· Political Support: A national park constitutes a well recognized and widely accepted protected area category allowing for an uncomplicated definition and designation of a support zone;

Added value · Socio-economic development: Tourism sector has significant development potential in the Municipality, and tourism development is consistent with NP/ Support Zone format. International best practice examples from managing remote wilderness areas with high tourism development potential as NPs with Support Zone. · Integration of objectives: The SZ promotes an even closer relationship between the “core zone” and people living in its neighbourhood than a biosphere reserve. NP in accordance with IUCN guidelines permit sustainable traditional resource use in designated (traditional use) zones inside a NP. · Empowerment: The stipulated participatory planning of a support zone allows local stakeholders to formulate land- and resource use policies adapted to their lifestyle and local conditions fostering development of ownership;

Added cost · Framework adjustments: Existing and sufficient legal framework of a national park and support zone in Georgia with no need of legal amendments/ modifica- tions. According to Georgia’s Law on Protected Areas it is mandatory to elaborate a management plan for the national park and its support zone which covers most of the planning area subject to the feasibility study; in contrast there are no guidelines for the elaboration of a consolidated management plan for a biosphere reserve. · Institutional Set-up: For the Kazbegi NP to be locally recognized and supported empowerment of local communities through a co-management structure is needed. Co-management would be much less complex and cover both, the NP and support zone (compared to a structure for a biosphere reserve as proposed by the TJS Report involving many more stakeholders, jurisdictions and line ministries).

3.2 Comparison of Options and Consultant Votum The advantages of the option “national park and support zone” compared to the option “biosphere reserve” are apparent. There appears to be no added value of any kind to be offered through a biosphere reserve concept except for its international registration with UNESCO (no monetary nor other tangible benefits are offered by UNESCO for biosphere reserves). The UNESCO label for a biosphere reserve is of questionable value in a country where UNESCO’s profile is very low. On a local level, the UNESCO label would be of no consequence.

It is argued that one of the key obstacles for the successful establishment of a biosphere reserve would be its mandatory zoning concept which simply would not be acceptable to local people.

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On the other hand, communities appear more open-minded, although still sceptical, regarding the participatory planning of a support zone as part of a national park. The option national park and support zone therefore appears the more suitable alternative also fully meeting the overall goals and objectives of German bilateral aid for the region: “harmonizing biodiversity conservation and sustainable regional economic development for the benefit of the local people”.

The Consultant Votum is therefore in favour of Option 2: A strengthened and expanded national park with a well planned and developed support zone involving all stakeholders for the benefit of the local population.

3.3 Project Components 3.3.1 Definition of Planning Area The definition of the planning area was guided by the following ecological and other criteria: (a) inclusin of the entire water catchment area of the upper Tergi River watershed and tributaries (the proposed boundaries also happen to coincide with the Mu- nicipality boundary of Stepantsminda including all of the five Sakrebulos Goristsikhe, Kobi-Gudauri, Sioni, Sno and Stepantsminda).

The question whether to include Gudauri or not appeared to be redundant considering the large and scattered land distribution of the Kobi-Gudauri Sakrebulo covering all of the Truso Valley and the major part of the upper Tergi River water catchment area, all located in the heart of the Tergi River watershed that is considered one single contiguous ecological entity to be included entirely in the planning area. Another key reason for including Gudauri is in view of its major contribution to the Stepantsminda municipal budget (without the Gudauri revenue the municipality could not function).

The primary ecological reason for the definition of the planning area (including the Kobi-Gudauri Sakrebulo) has been the main distribution of selected trigger species (flora and fauna) in this eco-regional unit.

3.3.2 Preliminary Planning of the Target Area The feasibility study presents an opportunity to re-delineate and zone the planning area, based on a rational integrated spatial land planning methodology that takes into account conservation values, land tenure and actual land use. Following approach was chosen for the proposed re-delineation and zoning process: (a) mapping of Key Biodi- versity Areas (KBA), using a GIS-based international best practice methodology; (b) assessment of land tenure; and (c) participatory mapping of actual land use as part of the elaboration of village profiles by the feasibility study team. i) Setting Site-based Conservation Priorities. The overall conservation value of the ecosystems of the Kazbegi Planning Area are underlined by the wide range of threatened species and critical plant ecological units that occur in the Kazbegi Municipality, a

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP Draft Report Feasibility Study Kazbegi xvii fact that is widely acknowledged by leading national and international conservation ecologists.

This recognition clearly justifies the existence and further development of conservation areas of outstanding biodiversity value in the target area not systematically addressed in previous zoning attempts by APA. This led to the elaboration of an ecological gap analysis implemented as part of the feasibility study in order to identify Key Biodiver- sity Areas (KBA) by employing standard IUCN methodology using “trigger species” and critical plant ecological entities for computerized species distribution- and habitat assessment models (level of endemism and red-listed species), complemented through scoring of a species threat analysis. Based on this analysis species conservation priority scores are calculated. The sum of the priority scores for all selected trigger species is GIS-processed resulting in a consolidated map indicating areas of high ecological importance. The combination of the “Flora and Fauna Map” produced for this feasibility study and the “Global Conservation Value” Map results in the “Proposed Conserva- tion Area” Map. ii) Minimum Critical Size of a Viable Kazbegi National Park. The expansion of Kaz- begi National Park to a total of at least 25,000 ha, composed of an eastern and western section encompassing samples of all ecosystems found in the study area is expected to meet the minimum critical size requirements of a typical mixed High Caucasus Grassland-Shrubland-Forest ecosystem. This is based on the assumption that an area this size is expected to provide viability to the majority of animal species, with animal population densities of 1 individual per 10 ha (or denser), which is enough for most larger herbivores as well as the medium-size predatory mammals (fox size). This should be sufficient in size for the survival of most animal/ plant species and plant associations typifying the target area assuming that the proposed Kazbegi National Park is used as a building block of an interlinked protected area system, in which only the combined composition maximises both species diversity and survival durability of all species, including the ones that require larger territories.

3.3.3 Proposed Zoning of Target Area Based on the identification of Key Biodiversity Areas and the calculation of minimum critical size requirements for a National Park in the target area the following conservation areas are proposed. i) Proposed Conservation Areas. It is evident that the existing Kazbegi National Park does not meet minimum critical size requirements for the targeted ecosystems to be protected by a national park. It only partially covers important ecosystems currently under-represented in the protected area system of the Greater Caucasus. The proposed Park expansion will result in two park sections, each covering some of the highest biodiversity areas identified for the Kazbegi Region. The eastern section will be one single consolidated area excluding some of the forest fragments currently loosely linked to the park without physical connection between them. The western section – twice the size of the eastern section- encompasses highly diverse habitats extending

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP Draft Report Feasibility Study Kazbegi xviii from the valley bottom to the Kazbegi Glacier. It is hoped that the western section will eventually be consolidated with a protected area to be created on the other side of the international border, jointly forming a contiguous conservation area of formidable size protecting one single ecological (glacially influenced) entity.

Based on the ecological gap analysis four other key areas of high biodiversity importance have been identified. Two of the areas are located in the floodplain of the Tergi River to the north and south of Stepantsminda (Sea-buckthorn communities providing vital winter range for the Greater Caucasus satellite populations of Great Rosefinch (Carpodacus rubicilla) and Güldenstädt’s Redstart (Phoenicurus erythrogaster). The combined total size of both areas is less than 250 ha.

Another area identified as critical nesting habitat of colony-breeding vultures are the Mt. Kaberjini Cliffs located to the south of the Tergi River between the Truso and Sno Val- ley. The total area to be protected should be approximately 500 ha.

The Ghudo Gorge has been flagged as an area of key biodiversity importance mainly because of its highly diverse ecosystems harbouring a large species diversity in habitats formed by unique micro-climates in a very differentiated landscape. ii) Proposed Community-based Hunting Cooperative. The Kazbegi Planning Area offers a unique opportunity for the establishment of a hunting concession, an option discussed with the Ministry’s Biodiversity Protection Division as the responsible agency for hunting concessions in Georgia. Hunting concessions in Georgia’s past have been mostly affiliated with one single concessionaire, a model not suitable for the Kazbegi planning area where hunting has been a highly traditional and well respected pastime embedded in the local culture. Against this background it is suggested to establish a community-based hunting cooperative which would allow a continuation of a tradition deeply embedded in local culture, permit recovery of depleted populations of game species, and reduce poaching by outsiders. The highly positive local response to this innovative model for a co-managed hunting block suggests advancing the idea for the benefit of local hunters and wildlife.

3.3.4 Actual Land Use Actual land use in the target area was assessed through participatory mapping done jointly with community members for each of the 25 communities located in the planning area as part of the village profiling process. The information provided by the communities refers to areas (polygones) used by each village for livestock grazing and hay making only. The obvious low level of actual land use for livestock and hay-making comes as a surprise, possibly reflecting the decreasing human population of the target area and the currently low number of livestock.

3.3.5 Land Tenure The majority of the rural families in the target area, in particular families living below or at poverty level, are unable to afford the costs associated with the land registration

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP Draft Report Feasibility Study Kazbegi xix process. This leaves them exposed to land speculators and depriving them of opportunities in accessing bank loans (unregistered land is not accepted as collateral) and/ or to sell their land at fair market value. Although the majority of families without a land title in the target area appear to be unable to register their land for financial reasons (can’t afford the survey and registration costs), others refuse to engage in legalization of their lands distrusting Government motives, being afraid that the Government will use legal land titles as leverage to impose land taxes. The third group refusing land titles are traditional socialists strongly believing in communal property which historically has been a community affair.

3.3.6 Potential Conflict Areas Superimposing the map layers “Actual Land Use” and “Proposed Conservation Units” provides the information needed on potential conflict areas. Identified potential conflict areas can either be eliminated through boundary adjustment or by including such areas in the traditional use zone of the national park. Boundaries of the national park and other designated conservation areas will be subject to negotiations with affected communities/ land users as part of the participatory national park and support zone planning process. The results clearly indicate that there are no visible land use conflicts between actual land use, land tenure and conservation in the proposed Eastern Section of the Kazbegi National Park and the proposed Mt. Kaberjini conservation area.

The only real conflict areas are the two Sea-buckthorn conservation units located in the Tergi River floodplain. Cooperation by local people is therefore essential for the sustainable protection of the two areas.

3.4 Proposed Interventions The approach taken for the participatory selection of the proposed interventions of the project has taken the overall project goal into consideration (harmonization of sustainable regional economic development to benefit local people and biodiversity conservation), fully addressing the need for profound information on the project and its overall goals, the need to mainstream capacity development into all proposed measures, the need to integrate gender and specific age groups into the project design, and the need to strengthen the presence of APA in the region.

It is realized that the decreasing and aging human population of the target area limits any economic development potential which has been factored into the proposed project.

The proposed interventions of the project are aimed at four result areas: 1) Protected Area Regime is established and operational o Legal framework adjusted o Co-Management Structures established o Community Ranger Service established

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o Business Plan for Protection and Support/ Transition Zone elaborated (PI) o Management Plan for NP and Support/ Transition Zone elaborated (PI) o NP Administration strengthened o Relationship between APA and local population improved 2) Eco-Tourism is established in the region o Quality of private guest house services improved o Mountain rescue and guide service is established o Network of mountain huts & shelters improved o Marketing of tourism through branding of local products improved 3) Livelihood stabilization is supported o Assessing and combating Brucella abortus is supported (QM) o Diary production is enhanced o Local beekeeping is improved o Wool processing is supported o Collection and marketing of culinary herbs and medicinal plants is supported o Pilot project using biogas for Greenhouses is established (QM) 4) Regional development and stakeholder institutions are supported o Environmental awareness and project information campaign is conducted (PI) o Participatory Integrated Spatial Land Use Planning is implemented (PI) o Accessibility on roads during winter is improved o Regional waste management is improved (QM) o Village engery supply of Djuta village as model established (QM) o Sewage Treatment in the region improved o Land Title Registration is supported o Community-Based Hunting Cooperative established

Quick-start Measures (QM) -to be selected and profiled as requested by the ToR of the feasibility study.

Priority Interventions (PI) -to be selected and profiled as requested by the ToR of the feasibility study.

4. Institutional and Legal Set-Up Using the IUCN method recommended to assess the most suitable option for the governance of a national park according to IUCN standards and criteria, the results of this very comprehensive analysis of framework parameters clearly favours a governance

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP Draft Report Feasibility Study Kazbegi xxi model based on co-management of the protected area and support zone. Co- governance implies empowerment of local stakeholders (community representatives) through assuming a key role in the decision-making process of the Kazbegi Park management. The study results indicate that without empowerment of local communities protected areas in the target area will not find the necessary community support needed for sustainable protection.

5. Project Organization and Implementation 5.1 Grant Recipient: Ministry of Finance

5.2 Project Structure Based on the findings of the feasibility study and under given framework conditions the most suitable project structure for the proposed project appears to be the engagement of an external consultant with proven experience in the implementation of complex and large-scale donor-funded projects such as proposed for the sustainable development of the Kazbegi Region. Impartiality, responsibility, proven capacity, capability, transparency, accountability and working experience with KfW are qualifying parameters characterizing an external consultant elected on the basis of a rigorous public tender. To find the same assets within an NGO or local Government agency would not be possible. An external consultant would perfectly fit the role of an impartial mediator between APA and the local communities, at the same time assisting APA in strengthening its local profile and developing much needed capabilities in public relations, participatory planning, community involvement and co-management structures of protected areas and support zones.

5.3 Project Approach The proposed project approach is based on three main project management principles inducing and assuring ownership of the project by the local population: (a) Participation and communication, (b) Transparency, and (c) Empowerment (participation in planning and decision making process (co-management of the park and support zone). Partici- pation, transparency and empowerment are universally accepted and proven project management principles. The situation in Kazbegi - including politically fragile conditions with the closeness to the Russian border – requires a careful and sensitive approach on behalf of the implementing agency and Consultant. More listening to the Kazbegi people and less (or better no) dictating will defuse any imminent tensions creating an atmosphere within which the region will flourish economically while simultaneously conserve the nature, unique in the world. For the reasons mentioned the project headquarters must be based in Kazbegi. It would also be highly advisable if the implementing agency increased its visibility in the region considerably.

5.4 Project Executing Agency The Project Executing Agency would be the Agency of Protected Areas

6. Target groups and beneficiaries

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The target groups and beneficiaries of the project would be the local population and all 25 communities of the planning area, the Ministry of Environment and the local and regional authorities.

7. Project Budget The project budget would be composed of costs related to the establishment and management of the designated proposed conservation areas (approximately 25% of the project funds) and the sustainable development of the support zone of the Kazbegi National Park.

8. Risk assessment and mitigation opportunities The greatest risk is linked to achieving local ownership and acceptance of the project and its goals and objectives, especially acceptance of the need for nature conservation. This risk may be mitigated through demonstrating that tangible and intangible benefits to be felt on the household level in the target area can be achieved through the project.

9. Sustainable financing and exit strategy The proposed exit strategy is to achieve sustainable financing for all proposed interventions and local acceptance and ownership in the proposed co-management arrangement for the conservation areas and support zone.

10. Consultant Votum The Consultant has come to the conclusion that the optimum approach to reaching the overarching goals and objectives of the proposed project ( sustainable development of the Kazbegi Region to be harmonized with the needs for nature protection) requires the expansion and strengthening of the existing Kazbegi National Park, the protection of other identified key conservation areas, and the designation and sustainable development of a national park support zone which includes all 25 communities located in the target area. Furthermore that a critical prerequisite to success and the development of local ownership will be the creation of a multi-stakeholder Kazbegi National Park Man- agement Board with equal representation of local communities.

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1. INTRODUCTION 1.1 Background1 The report at hand is the final version of the Feasibility Study for the Ecoregional Nature Conservation Programme III (Georgia), Kazbegi Project. The proposed project, subject to the current feasibility study, is part of the Financial Cooperation between Georgia and Germany. The Project Executing Agency (PEA) is the Ministry of Envi- ronment Protection and Natural Resources of Georgia (MEPNR); the Ministry has assigned the Agency for Protected Areas (APA) as project implementation agency (PIA).

The Feasibility Study has been elaborated in response to KfW’s Invitation for Tender dated as of July 9th 2009 and APA’s request to implement the “Feasibility Study for the Ecoregional Nature Conservation Programme III (Georgia), Kazbegi Project”, dated as of 9th September 2009. In consequence the Consortium consisting of “Deutsche Forst Service GmbH (DFS)” and “AGEG Consultants AG” was contracted for the implementation of this Feasibility Study.

The selection of the Kazbegi region as a possible area for the establishment of a biosphere reserve is based on the environmental and nature conservation policies of Georgia and the priorities of the Ecoregional Conservation Plan for the Caucasus (ECP). Selection criteria were the high and unique biodiversity of the main habitats, high mountain forest fragments currently protected by Kazbegi National Park, and the Caucasian sub-alpine and alpine grassland ecosystems, which harbour a range of rare and critically endangered plant and animal species. Another selection criterion was that the region also offers potential for income-generating activities with focus on tourism. A preparation study has been elaborated by the Transboundary Joint Secretariat2. The study Area is shown by Figure 1:.

This Feasibility Study is based on the fact finding mission of an DFS/ AGEG international consultant to Georgia (29th July to 5th August 2009), on extensive field work as conducted by the joint national and international study team from October 2009 until December 2009 and the backstopping visit (2nd November to 9th November 2009). The First Draft Report has been submitted to APA and KfW on 30th December 2009. In Feb- ruary 2010 the Ministry of Environment Protection and Natural Resources of Georgia and KfW have conducted an approval-mission of the project site; This final version duly reflects the comments on the Draft Report received from APA on 08.02.2010 and from KfW on 02.02.2010 and 04.03.2010.

The Consultant hereby wishes to express his sincere appreciation for the good cooperation given by the APA, for the kind support from further involved government institu-

1 From: KfW 2009, ToR Tender Document for Kazbegi Proposed Biosphere Reserve Feasibility Study. 2 TJS 2009. Report to prepare the establishment of Kazbegi Biosphere Reserve.

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP III Draft Report Feasibility Study Kazbegi 2 tions, NGOs and stakeholders at all levels, and especially for the warm hospitality and trust as received from the local population of Kazbegi.

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Figure 1: Location of Study Area

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1.2 Constraints and Limitations to the Feasibility Study In May 2009 a delegation of KfW visited the proposed project area and came to the conclusion that the biosphere reserve concept offers a promising approach for the development of the region. According to the KfW mission at the time the mayor of Stepantsminda municipality explicitly expressed his concern regarding the strong res- ervations of the local population against the establishment of “any kind of conservation area” in the Kazbegi Municipality.3

In due consideration of the Mayor’s cautionary note about the local sentiments, the Study Team was specifically requested by KfW to adopt a highly participatory approach for the study in order to ensure that the local population understands the nature of the proposed project and the concept of a biosphere reserve.

The findings of the feasibility study support the concerns expressed by the Stepants- minda Mayor. There is no doubt that the most serious constraint to the potential establishment of a biosphere reserve locally is the strong opposition by local people to a biosphere reserve seen as another form of protected area instead of acknowledging it as a concept aimed at the integration of nature conservation and sustainable economic development. This perception combined with the strong believe by the Kazbegi population in grandfathered traditional land rights and a strongly anchored communal land use philosophy allow for little tolerance to any outside interference.

The past top-down approach to the establishment of the Dedtoraki and Khde Strict Pro- tected Areas in the Kazbegi Municipality in 1946, the consolidation and expansion of the two areas in 1987, and the conversion into a national park in 2007 with expansion plans from 7000 ha to more than 60.000 ha as proposed by APA in 2008 without involving and adequately informing local people undoubtedly have contributed to the recognized root causes of the strong local resentment towards the Government and APA in particular. The problems exacerbated with rumours spreading about APA’s intention to promote - without prior public consultation and information - the establishment of a locally and nationally little understood “biosphere reserve” that would encompass the entire Kazbegi Municipality.

Against this background the feasibility study team entered a highly explosive atmosphere and faced the formidable task convincing local people about the potential benefits of a protected area and/ or a biosphere reserve. Time-consuming efforts spent on information exchange, awareness building and the development of a working relationship based on trust, resulted in serious time constraints to the actual feasibility study.

The trust-building measures elaborated and implemented as part of the feasibility study proved to be another serious constraint, demanding a lot of time and effort. The fact that at a feasibility study exploring various options for the future development of the

3 From: KfW 2009, ToR Tender Document for Kazbegi Proposed Biosphere Reserve Feasibility Study.

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP III Draft Report Feasibility Study Kazbegi 5 region does not meet the local people’s demand to receive definite and clear answers is another structural problem, which should be considered when conducting feasibility studies in a highly participatory way.

A total of 50 key stakeholders ranging from Government Agencies, Donor Organiza- tions, local and international NGOs and CBOs to Private Sector representatives of local and regional importance were identified and contacted (see Annex 1.1 “List of Con- tacts”). Stakeholder meetings centered on semi-structured interviews aimed at a general assessment of the stakeholder’s interest and current or planned involvement in the target area.

Prior to the field work and data compilation three workshops were conducted, the first aimed at the local authorities obtaining approval for the field-work, the second was an open invitation to all 25 communities located in the planning area informing the participants about the nature of the proposed project and the reason for the elaboration of village profiles. The third workshop addressed Gudauri residents serving to assess the suitability of including Gudauri into the planning area. At the community stakeholder workshop eleven trust-building measures were identified by the workshop participants, subsequently implemented and finalized by the end of November under supervision of the study team.

The rationale for the implementation of one single kick-off workshop involving all target area communities instead of several workshops in different locations dealing with the same subject matter, was to open one single dialogue based on one common understanding of problems related to the project area and one common vision for its sustainable economic development to be in compliance with the overarching conservation objectives inherent to the proposed project.

The field work focused on the elaboration of the 25 village profiles and the participatory mapping of actual land use providing the basis for the design of proposed quick-start measures and interventions with focus on livelihood stabilization, community enhancement and regional development, and strengthening APA’s position in the target area. The community profiles entail quantitative and qualitative socio-economic and demographic information, complemented through a community-specific problem analysis and need assessment.

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In parallel, background information was collected on high biodiversity areas guiding the tentative zoning plan for the target area and the definition of areas of high conservation value.

A multi-stakeholder mid-term review workshop was conducted in Tbilisi on the 5th of November in order for the team to present and discuss the preliminary findings of the study. Center to the workshop was a discussion of best options suitable to meet the overarching objectives of the proposed project with focus on a critical comparison of a biosphere reserve and a national park and support zone.

Local stakeholder participation, information exchange and awareness raising were mainstreamed into all components and activities of the feasibility study. Fact sheets and information materials on the FS, the biosphere reserve concept, the nature and purpose of a national park and support zone, and how all this relates to the proposed sustainable regional development, livelihood enhancement, and how this may impact future land- and resource use, have been elaborated and disseminated by the community mobilization specialists of the study team.

The results of the feasibility study and the consultants Votum were presented to APA and local authorities on the 27th of November 2008 in Tbilisi.

1.4 Trust-Building Measures At the open community stakeholder workshop which kick-started the field work of the feasibility study (see Inception Report, Annex 6.1), a participatory problem analysis was conducted by five work groups assembled from the workshop participants, followed by the identification of suitable trust-building measures to be implemented as part of the feasibility study in accordance with the terms of reference. The nature and purpose of the trust-building measures were explained and discussed with the workshop participants. The following criteria were established for proposed measures to qualify for implementation: · To address a key problem/ concern of local significance; · To benefit as many community members and households as possible; · To be highly visible and appreciated (exposure) by community members; · To address specific age groups and/ or gender of community importance; · To be suitable for in-kind contributions; · To require low capital investment (micro-project); · To be completed within short time-frame (within timeline of the feasibility study); · To reflect the urgency of the problem to be resolved; · To be related to environmental issues; · To fit into the overall context of the feasibility study and the expected future project;

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· To be sustainable.

Eleven of the 18 trust-building measures developed and proposed by the five work groups of the workshop were tentatively chosen, meeting the qualifying criteria.

The five spokes-persons of the work groups who were elected by the workshop as- sembly as trusted community members, were then selected to form a supervisory committee that assumed the overall responsibility for the supervision, timely implementation and quality control of the trust-building measures.

After a detailed scrutiny on site and the approval by APA and KfW, the following eight trust-building measures were implemented and completed by the end of November 2009: · Pilot project on the sustainability of public spaces of the combined kindergarten/ elementary school in the village of Gergeti addressing issues of energy efficiency, and school gardens, involving the planting of fruit-trees. · Establishment of an environmental information facility at the Kazbegi Health Cen- ter. · A demonstration project of a citizen initiative addressing the issue of organized garbage disposal and a related clean-up campaign of the Tergi River banks inside Stepantsminda. · Support of a woman group for the production of traditional handicrafts (region). · Pilot project on sustainable village development for Garbani Village involving the planting of tree species in support of the promotion of local bee-keeping and village beautification. · Establishing an internet café at the headquarters of “Mountain House” NGO in Stepantsminda for the benefit of local youth and tourists. · Implementation of an environmental awareness campaign involving the 11 schools of the Region (theme painting and creative contest “how to protect our nature and environment). · Pilot project on sustainable village development for Sno village: Garbage clean- up campaign on the river banks and orientation on sustainable water management (potable water and sewage disposal). · Catalyzing ownership of local youth of their environment: Joint brainstorming and hands-on workshop on how to improve outdoor meeting spaces at the health centre of Stepantsminda. · Municipality-wide photo competition "nature and environment".

The organization, implementation, supervision and follow-up activities related to the measures proved to be extremely time-consuming and controversial placing a heavy burden on the FS Team. The allegedly legal requirement to pay taxes on funds being

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP III Draft Report Feasibility Study Kazbegi 8 disbursed after the funds were already allocated as brought forward by APA posed another serious hurdle to the timely execution of the measures.

In retrospect, although the trust-building measures may have assisted in forming a working relationship build on trust between the FS Team and part of the local population, the measures did little to improve the relationship between local people and APA judging by the strong negative reaction to APA at a wrap-up “event-day” celebrating the successful completion of the trust-building measures in Stepantsminda.

The overall value of trust-building measures as part of a feasibility study appears questionable judging by the current experience. It is argued that a feasibility study does not offer the opportunity to effectively achieve trust through the implementation of measures which may not even allow emergency infrastructure needs of poor rural communities. Trust-building within the short timeline of a feasibility study that is aimed primarily at the collection of data in support of a project feasibility assessment and project design is highly unlikely to happen. Trust-building is a process requiring much time and effort beyond the scope of a feasibility study.

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2. SITUATION ANALYSIS The situation analysis focuses on an assessment and description of the (a) biophysical- (b) socio-cultural-economic-, (c) legal- and policy framework, and (c) an assessment of stakeholders and projects related to the defined planning area. The assessment of existing framework conditions was used for the identification of data gaps and as background for the design of the proposed project components. Key findings are summarized as follows.

2.1 Biophysical Framework of the Kazbegi Municipality 2.1.1 Climate In general, the climate of the Kazbegi Municipality, which is part of the northern slope of the Caucasus, is moderately humid, with pronounced altitudinal and microtopog- raphic differences which are determined by the relief of the area.

In the lower zone of Kazbegi region (altitude up to 1,900 m), winters are comparatively dry and cold and the summer is prolonged and cool. The average temperature in Janu- ary is between -3•C and -8•C; in July between 14•C and 19•C. Precipitation ranges between 650 mm and 1000 mm per year, with a seasonal maximum in May and a minimum in January. Snow cover extends for three to four months.

At altitudes between 1,900 m and 2,600 m, winters are comparatively dry and cold and summers short and cool. Temperatures exceed 10•C for only 1-3 months and 5•C for only 4-5 months. The temperature of the warmest month is about 10-14•C. Winds are characteristic for mountains and gorges. An annual precipitation of between 1,000 mm and 1,200 mm per year has been recorded. Snow cover persists for 5-7 months.

At the zone of 2,600 – 3,400 m there is no real summer. The average temperature in winter is between -11•C and -15•C; in July it rarely exceeds 10•C. Above 3,400 m, a mountainous and moderately humid climate prevails, and permanent snow and glaciers are dominant. The average temperature in January and February is -14•C; only in July and August do temperatures rise above zero (about 60 frost-free days per year). Pre- cipitation falls mainly as snow. Westerly winds predominate. The weather in the alpine, subnival and nival belt is highly variable, with frequent sudden changes in weather conditions.

Additional detailed information on temperature extremes and some additional climate statistics are given in Nakhutsrishvili et al. (2005).

2.1.2 Geology, Soils, Geomorphology, Mineral Deposits, and Land- scape Geology: The Kazbegi region is characterized by a complex geological structure. The oldest rocks in the Tergi Ravine are the paleolithic (330 million years) granites of

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Gveleti and Dariali. Sediment rocks are mainly from the early, middle and upper Juras- sic period. In terms of its tectonics, the region is characterized by a north-south se- quence of complex tectonic elements, namely the (1) anticline of the lateral ridge of the Greater Caucasus, (2) the syncline of Bejitini, (3) the anticline of the main ridge and (4) the Chiauri (Gudamakhari zone) syncline. The geological development history of the Municipality started in the early and middle Jurassic periods. During the late Orogene- sis (recent phase) the high mountainous relief was formed. Volcanic activities were expressed in multiple volcanic explosions. Mt Kazbek is one of these volcanoes. It is now dormant. There are also some young volcanoes on the main ridge, to the north- west and north-east of the Cross Pass (for more detail see Annex 2.2.2).

There are several deposits of minerals in the Municipality: copper-polymetallic layer in Devdoraki, Elia antimonite layer, small crystal layers in Khde and layers of building stone (dolerite, granite, diorite, andesite and travertine). There are also many inert materials. Among the above mentioned resources only the Devdoraki copper-polymetallic layer ever had an industrial importance, managed by Belgians in the early 20th Cen- tury. The region is also rich in mineral waters. In certain places the output of mineral springs is significant. For example, the mineral water near the village Khetrisi is rich in calcium hydro-carbonate. Its output is 25-30 million liters per day. The mineral lake of Abano is fed from accumulated spring water enriched with carbon dioxide. It belongs to the calcium hydro-carbonate-sulfate type. The daily output of this spring is about 2,5 million liters. Other examples of mineral springs are the Also Fansheti and Goristsikhe springs.

Kazbegi Municipality has a high diversity of quarternary (recent) geo-morphological features. Its high mountainous tectonic-erosive relief is composed of glaciers, volcanic elements, karsts and other forms. Quaternary (recent) sediments are widely spread. Alluvial, proluvial and deluvial sediments are observed. The alluvial sediments in the Tergi ravine are arranged as a system of four terraces. In higher places, alluvial sediments are mixed with fluvio-glacial, limno-glacial and moraine sediments. Volcanic structures (including lava outflows, pyroclastic accumulations, andesite-dacite and andesite-basalts) are from the quaternary period.

Soils: The soils of the Kazbegi Municipality are diverse reflecting the diversity of its geomorphology, geology, vegetation and climate (Nakhutsrishvili et al. 2005). Moun- tain-meadow skeleton soils and mountain-forest soils of average-acid and neutral pH dominate. They are often rich in humus. Nakhutsrishvili et al. (2005) list the following soil types: (1) deluvial-proluvial soils; (2) mountain-forest brown, medium-depth and shallow skeletal soils, occasionally with stones and boulders; (3) mountain-forest light- brown, medium-depth and shallow skeletal soils, with stones and boulders; (4) degraded medium-depth and shallow skeletal soils; (5) degraded forest and secondary meadow soils; (6) mountain-meadow soddy-skeletal soils; (7) weakly developed primi- tive soils, occasionally with exposed rock; (8) eroded and semi-eroded shallow skeletal soils, and (9) strongly eroded areas, ravines, exposed rocks, stone fills and bedrock outcrops.

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Geomorphology: The geomorphology of Kazbegi Municipality, which is one of the highest Municipalitys of Georgia, is dominated by the Greater Caucasus and its lateral ridges with their breaches, as well as three large flat-bottomed ravines (Khevi/Tergi, Truso and Sno) which are covered by young river sediments.

Khokhi Ridge is one of the largest Caucasus lateral ridges bordering the region to the east at Truso pass (3,150 m a.s.l.). On this ridge, from west to east Midargrabini Pass and Siverauti (3,785 m), Suatisi (4,480 m), Jimara (4,777 m), Maili (4,622 m) and Kaz- bek (5,047) mountains are located. The mountain group of Khde is located at the east of the Tergi Valley and to the north of Sno Valley. This group includes three meridional ridges (Khuri, Shavana and Kidegani).

Truso Valley stretches from the upper Tergi River watershed to the village Kobi, between the main and Khokhi ridges, extending to the south-east. Its altitude at the village Kobi is 1,950 m, at the village Abano 2,200 m and at the spring of the river Siv- erauti 2,450 m. Like Truso Valley, Sno Valley is a longitudinal gorge. It is mainly composed of clay shale and sand rock layers of early and middle Jurassic periods. The whole lower part of the Sno ravine is oriented to north-west from Nadarbazevi to the Tergi tributary. Khevi Valley forms part of the Tergi Valley from the village Kobi to Stepantsminda. It is directed to the east. Some places at the left side of the ravine are covered by quaternary lava originating from M. Kazbek (lava outflows of Mna, Pkhelshi, Arshi and Chkheri). The large, flat bottom of the ravine is filled with cobble-stones and sand rocks, formed by an accumulation of Ckheri lava outflow. There are two barriers in the course of Tergi Valley (Sioni-Goristsikhe and Stephantsminda-Gergeti) that force the river into narrow gorges. Downstream of Stephantsminda begins the Daryal Gorge. It drops 1,000 m of altitude over a distance of 11 km, to only 1,210 a.s.l. Khde Valley is surrounded by Shavana and Khuro ridges and is particularly rich in rocks, glaciers, alpine meadows and waterfalls. The upper part of the ravine is a steppe area intersperesed with alpine wetlands. The middle part of the river Khdis Tskhali enters the erosive ravine, cuts the Daryal Massif and creates continuous steps for about 4 km. The distance between the steps is 300 m.

TJS (2009) stresses the danger of avalanches, rock falls and landslides throughout the Municipality, because of the steep terrain.

Landscape diversity: According to TJS (2009), landscapes of Kazbegi Municipality comprise the following: (1) canyon-like gorges dominated by rocks, sparse vegetation and eroded soils; (2) medium-high mountains covered by beech forests; (3) mountain- valley landscape with floodplain vegetation; (4) subalpine birch sparse and crooked forests, shrubs, and high grass; (5) alpine meadows and alpine mats; (6) subnival landscapes with weakly developed soil and vegetation cover, and (7) nival-glacial landscape with permafrost soils and glaciers.

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2.1.3 Flora and Vegetation According to a recent analysis of the flora of Kazbegi (Nakhutsrishvili et al. 2005), the Municipality is home to about 1,100 species of vascular plants, most of them belonging to the Asteraceae, Poaceae, Rosaceae, Fabaceae and Scrophulariaceae families. For a complete list of identified plant species for the target area it is referred to Annex 1.3.

The flora of Kazbegi is exceptionally rich in endemics (Figure 3). 27% of its flora are endemic, and at least five out of eleven of the endemic genera of the Caucasus (Agasyllis, Dolichorrhiza, Symphyoloma, Trigonocaryum and Pseudovesicaria) are represented.

A schematic vertical zonation of the vegetation of Kazbegi is illustrated in Figure 4. Zonation in nature does not always follow this pattern shifting and overlapping reflecting anthropogenic and topographical factors. There are also significant differences in flora and vegetation within the Kazbegi Municipality: While plant communities of the Daryal Gorge are composed of species characteristic of the Eastern Greater Caucasus (e.g. Pinus kochiana, Juniperus hemisphaerica, Heracleum leskowii), the central Khevi region is more typically covered by subalpine meadows, elfin woods and forests of Betula litwinovii, with tragacanth vegetation including Astragalus denudatus also present. In Truso Gorge, by contrast, Kobresia capilliformis meadows and communities of Dryas caucasica predominate.

Regarding the vegetation of Kazbegi, Nakhutsrishvili et al. (2005) distinguish 39 types of vascular plant communities that occur in Kazbegi. In addition to the communities listed in Table 1, they describe three types of subnival vegetation and mention the occurrence of various mosses and lichens.

With the exception of very few pine plantations near the valley bottom (e.g. near Stepantsminda and Qumlistsikhe), the mountain forests of Kazbegi are dominated by Betula litwinovii and other Betula spp. Towards the treeline, these forests become more elfin, and extended shrubberies of Rhododendron caucasicum and R. luteum occur. Apart from these communities, there are scrubs of Dryas caucasica and of Juni- perus hemisphaerica. A different woody plant community dominated by Sea-Buckthorn (Hippophae rhamnoides) is found at the Tergi Valley bottom above and below Stepantsminda. These fragments represent another plant diversity hotspot, an important winter habitat for birds and a source of natural resources to the local people.

In spite of their low coverage, the forests and shrub communities of Kazbegi, as well as their ecotones are important centers of plant diversity and key habitat for numerous animal species. The shrub communities also protect slopes from erosion, mud-slides and avalanches, have a water-regulatory function and are a traditional source of fuel wood and other natural resources for the local population.

Table 1 shows that the greatest diversity of plant communities (16) is found in the subalpine belt, which underlines the importance of Kazbegi Municipality as a biotope

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP III Draft Report Feasibility Study Kazbegi 13 for subalpine meadows. These meadow communities are subdivided according to their humidity. Among the dry meadows, there are four community types dominated by Agrostis tenuis, Festuca varia, Kobresia capilliformis, and Astragalus captiosus, re- spectivelty. Mesophilous meadows are characterized either by Anemone fasciculata or by Hordeum violaceum. Among the rare-turf meadows, there are four types which are dominated by Trisetum flavescens, Brachypodium pinnatum, Calamagrostis arundina- cea and Bromopsis variegata, respectively, while dense-turf meadows are represented, dominated by Nardus stricta, Festuca vallesiaca, and Festuca ovina, respectively. The latter mountain steppe type meadows have spread significantly under anthropogenic impact.

The subalpine meadows of Kazbegi are an important component of the Municipality’s overall biodiversity, providing protection against erosion, and forming a key resource as hay meadows and grazing areas.

Dense turf and carpet like alpine meadows that hold important biodiversity characterize the alpine belt. These are typically of much smaller growth than in the subalpine belt. Rocky outcrops, scree slopes as well as the subnival zone are typified by additional plant communities (Nakhutsrishvili et al. 2005).

A vegetation map of the Kazbegi Region based on several hundreds of vegetation records has been prepared for this feasibility study by Nakhutsrishvili et al (see Figure 2). This map will be of importance when finalizing the zonation and defining conservation areas of high importance.

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Figure 2: Vegetation Map

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Figure 3: Plant endemism in Kazbegi. Source: Nakhutsrishvili et al. (2005).

Figure 4: Vertical zonation of vegetation in Kazbegi.

Altitude (m) Nival zone 3,600 Subnival 3,000 belt Alpine belt 2,500 Subalpine belt 1,750 Mountain forest belt

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Table 1: Plant communities of Kazbegi. Modified from Nakhutsrishvili et al. (2005).

Vegetation of Kazbegi

Forest and scrub Subalpine herbaceous Alpine herbaceous Plant communities communities communities communities of rock and scree

Betula litwinovii Subalpine tall Carex tristis dense-turf Dry rock communities forest herbaceous vegetation meadows

Elfin birch forest Dry meadows Festuca supina Moist rock (4 types) dense-turf meadows communities

Rhododendron Mesophilous meadows Festuca varia dense- Communities on caucasicum shrubs (2 types) turf marly and slaty scree xerophilous meadows

Rhododendron Humid meadows with Snowbed carpet-like Communities on luteum shrubs Trollius ranunculus alpine meadows stones

Dryas caucasica Swamp meadows with Carpet meadows on Trisetum rigidum scrub Deschampsia skeletal substrates riversite communities caespitosa

Scrubs of Juniperus Rare-turf meadows Secondary carpet-like Pinus sosnowskyi‘ hemisphaerica (4 types) meadows elfin communities on rock

Cushion Dense-turf meadows Tragacanth (3 types) formations

2.1.4 Fauna In terms of their conservation value, alpine birds and mammals are the major faunal groups of the Kazbegi Municipality. A complete list of the vertebrate fauna of Kazbegi was recently compiled by GCCW (2006) and is enclosed as Annex 1.4.

Invertebrates and fish: The invertebrates and fish of Kazbegi are poorly studied, with only the Brook Trout (Salmo fario) documented from the region.

Herpetofauna: The herpetofauna of the Kazbegi Municipality is inconspicuous, reflecting the high altitude of the area. Among the amphibians, only Green Toad (Bufo viridis), Common (“Caucasian”) Toad (Bufo verrucosissimus), Common Tree Frog (Hyla arbo- rea), Eurasian Marsh Frog (Rana ridibunda) and representatives of the Caucasian Frog (Rana macrocnemis) group inhabit the area (Tarkhnishvili and Gokhelashvili 1999). Among the reptiles, there are several lizard species (including the narrow-range Darevskia daghestanica), Grass Snake (Natrix natrix) and Dice Snake (Natrix tesse- lata). There are also two species of vipers: In humid subalpine meadows there is Din-

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP III Draft Report Feasibility Study Kazbegi 17 nik’s Viper (Vipera dinniki), whereas in dryer areas, the more common V. lotievi occurs is found (D. Tarkhnishvili, pers. comm., 1 Nov 2009).

Avifauna: Kazbegi’s distinct avifaunal significance is underlined by (a) its large resi- dent and breeding populations of alpine species, (b) its role as a raptor breeding area and migration bottleneck, and (c) its function as the only wintering area of two exceptional passerine populations in Georgia, and possibly in the Greater Caucasus (Annex 1.5 “List of Bird Species”).

Ad a): Besides the Caucasus endemics Caucasian Black Grouse (Tetrao mlokosiewiczi) and Caucasian Snowcock (Tetraogallus caucasicus), significant populations of Corncrake (Crex crex) and alpine passerines reside or breed in Kazbegi (e.g. Caucasian Chiffchaff Phylloscopus lorenzii, Ring Ouzel Turdus tor- quatus, two Chough species Pyrrhocorax pyrrhocorax and P. graculus). Mtskheta-Mtianeti Region as a whole holds about a quarter of the Georgian population of Caucasian Black Grouse (GCCW 2007), most of which are probably concentrated in Kazbegi. These species inhabit a wide range of habitats from the valley bottoms (e.g. Crex crex) to the high alpine belt. Ad b): Kazbegi holds breeding populations of three vulture species (Gypaetus barbatus, Neophron percnopterus and Gyps fulvus), Golden Eagle (Aquila chrysaetos), Peregrine Falcon (Falco peregrinus) and other raptors. Its Bearded Vul- ture (G. barbatus) and Griffon Vulture (G. fulvus) breeding populations are of national importance (Gavashelishvili 2005, Gavashelishvili and McGrady 2006). Typical breeding areas for these species are steep cliffs. In addition, Kazbegi is an important migration bottleneck for eagles (Aquila spp.), harriers (Circus spp.) and Black Kite (Milvus migrans), particularly during spring migration. More than 1,000 migrating raptors per day have been counted from the Cross Pass and Sameba Church in Stepantsminda (G. Rajebashvili, pers. comm., 31 Oct 2009). Ad c): The Greater Caucasus is home to satellite populations of Great Rosefinch (Carpodacus rubicilla) and Güldenstädt’s Redstart (Phoenicurus erythrogaster). The nearest populations of both species are found in eastern Central Asia. While both species breed in the alpine belt above 2,500 m altitude, their only known wintering habitat in Georgia are the Sea-buckthorn shrub communities around Stepantsminda in Kazbegi. No wintering habitats are currently known from Azerbaijan or the North Caucasus, which makes it possible that the wintering hotspot around Stepantsminda is not only of national but also of ecoregional importance. There are plans to study the genetic status of both Caucasus populations, as there is the possibility that they are genetically distinct from the core population, and hence a case of “speciation in progress”. Kazbegi has been designated as an Important Bird Area, due to its Caucasian Black Grouse and Corncrake populations (Birdlife International 2009). Additional bird species and their habitats are listed in TJS (2009).

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Mammals: Among the rich mammalian fauna of Kazbegi, notable groups include (a) insectivores and rodents, which are represented by several species endemic to the Caucasus, (b) carnivores, and (c) two species of artiodactyls of significant conservation and potential economic interest (Bukhnikashvili and Kandaurov 2002). Also see Annex 1.6 for a complete list of identified mammals for the target area.

Ad a): Four species of insectivores and five species of rodents that are endemic to the Caucasus occur in Kazbegi. Among the insectivores, examples include Radde’s Shrew (Sorex raddei) and Shelkovnikov’s Water Shrew (Neomys schelkovnikovi). Among the rodents, prominent examples are the Kazbegian Birch Mouse (Sicista kazbegica), which has its only Georgian stronghold in Kaz- begi, and the Lang-clawed Mole-vole (Promethomys schaposchnikovi), an en- igmatic vole of uncertain taxonomic affinity. These small mammals inhabit a vari- ety of habitats in Kazbegi. Many of them are associated with birch forest and grassland habitats. Ad b): All Georgian large carnivores with the exception of the Leopard (Panthera pardus) and possibly Lynx (Lynx lynx) occur in Kazbegi. Among the large carnivores, the population of Brown Bear (Ursus arctos) is mainly associated with the mountain birch forests, whereas Wolves (Canis lupus) occupy a wider habitat range. An interesting peculiarity of the carnivore fauna of Kazbegi is Stoat (Mus- tela erminae), a northern/ central Eurasian species which is only known from Kazbegi in Georgia. No abundance estimates for large carnivores are currently available, which is partly due to their extremely secluded lifestyle. Ad c): The Eastern Caucasian Tur (Capra cylindricornis) and the Chamois (Rubicapra rubicapra) are emblematic species of Kazbegi. While the Chamois only occurs in the southern part of the area including the right slope of the Truso gorge and south of the Sno Valley, the Tur has its centre of distribution further north, including the left slopes of the Truso and Daryal Gorges, Khde Gorge and some steep scree areas east of Stepantsminda. There are also sex-specific and seasonal differences in habitat preference (Gavashelishvili 2004). Both species are highly attractive to hunters, for trophies (mainly tur) as well as meat, and both species are traditionally hunted in Georgia. Similar to the carnivores, there are currently no abundance estimates for Kazbegi available for either species. The bat fauna of Kazbegi is of little conservation importance (I. Natradze, pers. comm., 6 Nov 2009). The famous Bat (Gamura) Cave is called so because its entrance is shaped like a bat, and not because it is inhabited by bats.

2.1.5 Threatened Species and Ecosystem Conservation Value The current national and international plant red lists exclude herbaceous plants, which makes comparative statements about their threat status impossible. However, ecoregional Red List assessments of about 1,600 endemic plant species of the Caucasus including herbs are nearing their completion and should be publicly available by the

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP III Draft Report Feasibility Study Kazbegi 19 end of 2010 (MOBOT 2009). It is recommended that these outputs be consulted as soon as available to inform the further development of the project.

Based on preliminary outputs, localities within Kazbegi are indicated for only 2 red- listed species of Georgian endemics (Heracleum ossethicum Manden – near- threatened, and Arabis kazbegi Mtzchvetadze - vulnerable). It is difficult at this stage to establish the occurrence of assessed Caucasus endemics in Kazbegi, but this should become progressively easier in 2010 (Batsatsashvili, pers. comm.). In addition, the following species were mentioned by GCCW (2006) as endangered, without having been assessed with Red List methodology: Delphinium caucasicum, Primula bayernii, Eritrichum caucasicum, and Galanthus platyphyllus.

In addition to the threat categories based on the national and international Red Lists, the following four species occurring in Kazbegi are among the 26 Focal Species of the Ecoregional Conservation Plan (Williams et al. 2006): Brown Bear, East Caucasian Tur, Chamois and Caucasian Black Grouse. The following three species recorded in the Municipality are listed in the same publication among 15 species of special concern: Lynx (assuming it occurs in Kazbegi), Caucasian Snowcock and Dinnik’s Viper. Conserving these species in Kazbegi would hence contribute significantly to the overall implementation of the Ecoregional Conservation Plan. For a list of endangered species it is referred to Annex 1.7.

2.1.6 Water Regime4 Glaciers: The Kazbegi massif is the major area of glaciers in Khevi. Separate glaciers are found on peaks of the main divide that exceed 3,800 m asl – the Khde Gorde at the Kuro and Shavana ridges. According to data from the most recent studies, there are 99 glaciers in the Terek catchment, with a total area of 67.2 sq. km. The glacier of Devdoraki, with an area of 7.55 sq. km and a length of 7 km, is of particular interest, known for its ice avalanches recorded in 1776, 1778, 1785, 1808 1817 and 1832. The most serious recent collapse blocked the Terek River, stopping the flow there for 8 hours. In the recent 150 years the glaciers in Khevi have moved back: ice streams (glacier tongues) have shortened by 1-1.5 km, and small glaciers located high in the mountains have shortened by 0.3-0.5 km. Some minor glaciers have completely disap- peared. In the last 100 years the total area under the glaciers has decreased by 21.8 sq.km.

Rivers: The Tergi (Georgian for the Terek) is the main river in the hydrographic system of Khevi, originating from a glacier located at 3,200 m above sea level and exiting the territory of Georgia in the Daryal Ravine, at 1,200 m asl. Left tributaries of the Terek River, including the Amali, Chkheri, Mna, Suatisi, Devdaraki and others, flow on the slopes of the massif, whereas its right tributaries: Tnostskali, Kistaura or Khdestskali, Bidara and others run on the main and lateral watersheds of the Caucasus Ridge.

4 Citation from TJS, 2009. Activity Plan on Biosphere Reserves. Kazbegi Biosphere Reserve

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There are a total of 48 rivers and numerous small streams in Khevi. These are mainly mountain rivers with typical high difference in the riverbed elevations and fast velocity of flow. The rivers form rather high waterfalls. The Amali, Chkheri and Kistaura are the fastest rivers; and the Terek and Snostskali are the widest ones. The rivers of Khevi are not deep: the depth of the Terek exceeds 1.5 meters, of the Snostskali 1 m, of Chkheri and Bidara 0.5 m and of Devdoraki and Kistaura 0.4 m. The rivers of the Terek basin feed from melting water (18 %), melting snow (29 %), rainfall (13 %) and underground waters (40 %).

Lakes: There are numerous lakes in Khevi, all of them very small. The lakes are found in the volcanic and glacial relief. A mineral lake in the Truso gorge, near the village of Abano, is of particular interest: a spring with carbonic acid water originating from carbonate rock forms a small lake that produces small 10-15 cm high fountains and causes the impression of „boiling• water. There are four small lakes at 3,832 m asl in the Truso gorge, with a total area of about 1 ha.

2.2 Socio-cultural Economic Framework With an average altitude of 1800 m the Kazbegi is considered a high mountainous region. The lowest lying village “Gveleti” is situated at 1400 m above sea level, and the the highest “Djuta” at 2170 m. The region also includes the skiing health resort of Gu- dauri actually comprising two villages: Khumlistsikhe and Gudauri itself. The regional centre is the borough Kabuki.

In 2005 there were 47 settlements in the region (2981 households with 6254 inhabitants). After closing the border with Russia in 2005, most inhabitants left the region. The data compiled by the FS shows that over 50% of the 2005 population have left Kazbegi. Presently, there are 1,400 permanent households with 3,000 inhabitants. 45% of the inhabitants make up the available work force whereas 37% are pensioners and 18% school-children.

2.2.1 Village Profiles During the Feasibility Study, the following villages were visited and their inhabitants interviewed: Sioni, Garbani, Arsha, Vardisubani, Kobi, Phansheti, Qoseli, Alsmasiani, Toti, Gaiboteni, Gergeti, Tcdo, Gveleti, Djuta, Karkucha, Akhaltsikhe, Sno, Achkhoti, Goristsikhe, Khurtisi, Khanobi, Gudauri, Tkharsheti, Stephantsminda, and Phkheshe. A detailed demographic-socio-economic profile was elaborated for each village. A su- mary table for all data and villages is attached as Annex 2.3.1.

2.2.1.1 Demography At current there are 1955 families located in the Kazbegi area of which 1366 are permanent residents, 475 families are summer residents, and 114 families are herders.

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The results of the Feasibility Study (FS) clearly showed an over-aged population. Over one third of the population is 60 years and older as compared to the age group 0-18 years (18%). Observations made in the various villages also indicated that within the age group 19-59 years the majority of the people are 45 years and older. In some of the smaller villages (Almasiani, Djuta, Goristsikhe, Khurtisi) the majority of the villagers are 60 years and older. Given the fact that the present population dwindled from roughly 6,000 in 2005 to less than 3,000 in 2009 it is safe to assume that the available work force has shrunk significantly. The exodus of the younger generation causes very much a strain on any development effort.

More than half of the population are women (1609 women compared to 1353 men). In some villages (Gergeti, Vardisubani, Khurtisi) more than 2/3 of the inhabitants are women, and in their majority 40 years and older.

Of the 2.962 Kazbegi inhabitants 1.329 persons are forming the available work force (44%). The majority of the work force (885 persons) is either self-employed (792 persons) or owns small and medium businesses (93 persons). Self-employment means selling goods on the streets and in markets without a formal business. Only 342 persons are employed. Of these 342 persons are 204 men and 134 women. Most jobs and businesses are concentrated in Stepantsminda, Sno and Arsha. Arsha is the only village with more women than men in employment. The low level of employees (26%) and businesses owners (7%) compared to the overall number of the available work force indicates a) a lack of work available and b) a lack of investment potential. There are not enough businesses to create sustainable jobs in particular for the younger generation. The data also show that the main economic thrust and potential are in the hands of women while the male work force is diminishing.

The educational standard of the Kazbegi population is relatively high. Nearly all the inhabitants have a formal education (Secondary, Graduate, Student). Illiteracy is therefore very low.

2.2.1.2 Household Income and Employment According to the Georgian State Department for Statistics5 the average monthly income in 2007 in rural areas per capita was 105.1 GEL. If split according to sources of income, salaries from wages (15%) and revenues from the sales of agricultural products (10%) were more significant than revenues from self-employment (6%), keeping in mind that most of the work force is self-employed, meaning a lower income than the national average. The national average income increased by 5% from 2006 to 2007 whereas national average income for the urban population increased by 18% in the same time. This fact paired with a generally higher wage level (also for unskilled la-

5 Georgian State Department for Statistics – Statistics of Households in Urban and Rural Areas of Georgia, Tbilisi 2009

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP III Draft Report Feasibility Study Kazbegi 22 bourers) in the urban areas, provides incentive enough for the younger generation to leave their rural homes and migrate to the city. Adding to this fact is the observation that revenues generated from the sale of agricultural goods are dwindling (2006 to 2007: -11%). However, it is noteworthy that in rural areas remittance from abroad increased by 26% for the same period, outpacing the growth in urban areas.

Following the national trend, income from wages is most important in the Kazbegi region. Gudauri leads the table by providing enough employment for 35% of the available work force. This is understandable since Gudauri is the centre of winter sport and tourism in the region. The other extreme is Karkucha where 40% live off social welfare. In the overall, the contribution of salaries to the household income in the region is very low (average 25%). Self-employment is most common but provides only a fraction of what a salary-paid employee earns. Since most of the female work force is engaged in self-employment, a significant increase in the economic development of the region must put the emphasis on the economic development of women. Opportunities must be provided for them to move from self-employment to either a formal employment or entrepreneurship.

In most villages revenues from cheese production and potatoes are the main source of income. Villagers live of a combination of various agricultural goods predominantly cheese and potatoes, supplemented by the sale of hay and meat. The sale of milk contributes very little to the income.

2.2.1.3 Livestock Animal husbandry has a long-standing tradition in the Kazbegi region. Before independence the region counted about 400 000 sheep of which half belonged to private farmers (see Chapter 2.3.2, History of Range Use). Overgrazing was a common threat to all of the Kazbegi region. With the break-up of the Soviet Union the economic crisis and the loss of the (now Russian territory) sheep winter pastures the number of sheep decreased to roughly 20 000 head of sheep.

Most families of the Kazbegi region are engaged in animal husbandry. Apart from sheep there are 5 000 heads of cattle. Most of the shepherds (80%) are nomadic and so are 40% of cattle owners. At the end of October, sheep and cattle are taken to winter pastures of the Kakheti and Kartli regions. A few cattle-breeders own pastures on the Iagluja field in the Kvemo Kartli region. Others keep their livestock close to their winter homes in the suburbs of Dusheti, Tbilisi and Rustavi. In May the animals return to the Kazbegi summer range.

All villages – except for villages without permanent residents – own cattle and sheep. On the average, each family owns 2 cattle and 8 sheep. However, most of the cattle are kept in Sioni, Garbani, Sno and Stepantsminda. Most of the sheep are located in Arsha, Sno, Gudauri, Stepantsminda and Phkhelshe. Cattle provide milk, cheese and meat. Sheep provide wool and meat, and to a far lesser extent milk. All products are

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP III Draft Report Feasibility Study Kazbegi 23 either for home-consumption or sold locally. The average yield per cow and year is rather low (960 kg or 990 l). Milk is sold for 4.20 GEL/l on average; cheese for 7 GEL/kg. The price of beef is 7.50 GEL/kg. The demand for beef exceeds the overall production in Georgia (self-sufficiency ratio 68%6). Meat from sheep and goat is not very much in demand (self sufficiency ratio 103%7). Wool from sheep currently is of very low commercial value. Production is estimated at 30,000 tons per year. At 2 to 3 GEL per kilo wool production hardly contributes to the overall income of the Kazbegi people. The value of sheep wool has decreased more than 50% during the past 4 years8.

The quality standards of milk, cheese and meat from cattle are reasonably good, while the marketing and value chain certainly needs improvement. This is unfortunately not the case for sheep wool and meat. Looking at the available, dairy products are still marketable at a rather good price while the sheep industry in Kazebegi continues to decline.

2.2.1.4 Agriculture Apart from cattle and sheep villagers grow pigs and poultry. There are 325 pigs kept in the region, most of them in Khanobi and Sno (home consumption only). Pork meat fetches a higher price per kilo than beef (9 – 10 GEL). Most pigs are slaughtered at 130 kilos providing roughly 80 kilos of pork per pig. The current pig population has therefore a value of about 260,000 GEL.

The number of poultry in the region could not be established with certainty (home consumption only). Estimates go as far as 100,000 animals. Eggs are sold on the local market at 2.70 GEL per 10 eggs. However, data from the Georgia State Department for Statistics9 reveals that the overall poultry population has grown by 20% compared to 2007. Though no reliable statistics are available for the Kazbegi region, this trend appears also to apply to Kazbegi (pers. comm. with villagers during village profiling).

There are only small patches of arable land, mostly located in the river valleys. Potato growing is common to all villages, however mainly grown for own consumption, rarely as cash crop. There is no formal marketing channel for selling potatoes. Potatoes are grown on small patches (average 0.08 ha per household) located in backyards and close to the village. The yield is about 400 kg per household. The quality of the potatoes is excellent. They are popular in Tbilisi where they usually fetch a higher than average price (average price per kg: 0.86 GEL). Sioni, Garbani, Arsha, Sno, Goristsikhe, Stepantsminda and Phkhelshe are the main growing areas in the region. The total area

6 Georgian State Department for Statistics – Agricultural Yearbook 2008, Tbilisi 2009 7 dto. 8 dto. 9 IBID

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP III Draft Report Feasibility Study Kazbegi 24 under cultivation amounts to 74.14 ha which corresponds roughly to 371 tons of potatoes with a market value of approximately 320,000 GEL.

With 359 bee hives bee-keeping is niche occupation in rural Kazebegi. The total honey production/ year averages 7 tons. Most of bee-hives are located in Khanobi, Garbani, Sno and Djuta. Prices for honey vary by season. On average a bee-keepers receives 10 GEL per kilo. Beekeeping is mostly implemented on an artisanal basis without access to modern technology and knowledge. Only a few bee-keepers (apart from honey) produce wax, pollen, propolis and –rarely- bee-venom. The honey harvested is a typical wild flower honey which is quite liquid due to the high content of fructose. The total value of the honey harvest can be estimated at 70,000 GEL.

The region is known for its numerous herbs, plants and berries of medicinal and kitchen value including species such as sea-buckthorn, bilberry, barberries, sweetbrier, field-ash, pit, raspberries, broad-leaved garlic, yellow daisy, touch-and-heal, marjoram, caraway, and thyme. Medical plants are being used in the traditional medicine and rarely marketed. Kitchen herbs are used for own consumption only. Herbs from the Kazbegi region are widely known and appreciated for their taste and the fact that they grow naturally without exposure to fertilizer and/ or pesticide.

Sea-buckthorn fruit are very popular, being harvested by women to be converted into juice and jam, sold at 4 GEL per 0.7 liter bottle. The remainder, containing pulp and valuable seed oil is not used. The production of Sea-buckthorn juice is for many women an important complementary revenue earner and a potential product of high commercial value.

Prior to the year 2005 a total of more than 580 greenhouse farms were operated in the Kazbegi region, most of them abandoned after the cut off of free natural gas as primary heating source. Only a few greenhouses are still in a relatively good condition but are of limited use due to the high energy prices in the region. Regenerative energy sources to be used for green-houses have not been explored so far.

Fruit trees including apple, peer, cherry, and sweet cherry are common to many villages of the target area. In Sno grapes from the Meskheti region with similar climatic conditions are cultivated. In Sno and Goristsikhe some families cultivate strawberries. Since snowberries from this high mountain region are harvested later than in other regions of Georgia sales are anti-cyclic, resulting in better prices. The low quantity grown however is insignificant in terms of sustainable income generation.

Only one trout hatchery operated by monks close to Sno village is found in the Kazbegi region producing approximately 50,000 trout/ year, which are either sold or given to the local population free of charge. Commercial marketing would require refrigerated trucks and or tanks for live transport to the capital. Compared to meat, fish is relatively cheap (4,65 GEL per 1 kg frozen fish).

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2.2.1.5 Tourism in the Region The Kazbegi region is considered a diversified tourist destination including the Truso Gorge close to the village of Kobi (currently not accessable due to the prevailing border conflict with Russia), the Sno Gorge, including Chauki mountains and a climber’s camp at the foot of Chaukhi cliffs, the Sameba (Holy Trinity) church, one of the most visited destination in Kazbegi region, and the Mount Kazbek and Devdoraki glaciers. The advantage of Kazbegi is its closeness to Tbilisi (150Km). The Kazbegi region however is a summer destination. Road access is inadequate due to the poor road condition.

Overnight facilities are offered through guest houses and by the only hotel of the region: “Stepantsminda”. Most visitors are day-visitors. Only few come for a longer stay (hikers, backpackers and mountaineers). Lodging facilities and service in the region is sub-standard. Poor language skills by locals is considered a seriuous handi-cap for the lucrative foreign tourism market.

The local NGO “Mountain House”, supplys basic information and equipment for outdoor tourism. The tourism season in the Kazbegi area usually starts in spring with bir- watchers and lasts until the end of October. Only very few tourists visit the region in winter.

Uncontrolled waste disposal contaminating the Tergi River watershed and side valleys are considered a major obstacle to tourism development in the region to be based on a unique nature experience. Emergency or rescue services are unavailable and medical facilities are limited to the poorly equipped and staffed Stepantsminda hospital. Banking services (e.g., ATM machines) are virtually non-existent, neither a regular postal service. A detailed report on the tourism sector is provided by Annex 1.9.

The gross income from tourism in the region amounts to roughly 1.1 Mio GEL/a (about 440,000 EUR). International visitors are believed to contribute 500,000 GEL (200,000 EUR). Overall revenue from tourism is considered high compared to the overall household income in the region. Given the right framework conditions, the potential of the tourism industry in the region is relatively high.

2.2.1.6 Actual Land Use The following chapter describes the actual land use in the Kazbegi region. The 25 villages are administratively attached to 5 Sakrebulos10. Table 2 provides an overview of the villages and their respective Sakrebulo of the target area. Stepantsminda is the administrative and economical centre of the region.

10 Sakrebulo – Administrative Unit in Georgia (Gudauri-Qumlischikhe would count as the sixth Sakrebulo without villages attached to it)

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Table 2: Villages and their respective Sakrebulo in the Kazbegi target area

Sakrebulo Village Sakrebulo Village Gorisikhe Vardisubani Sno Sno Phkhelshe Achkhoti Goristsikhe Akhaltsikhe Khanobi Qoseli Khurtisi Djuta Tkharsheti Karkucha Kobi Almasiani Stepantsminda Gergeti Kobi Tcdo Gveleti Sioni Sioni Stepantsminda Garbani Gudauri- Arsha Qumlischikhe Phansheti Toti Gaiboteni

The main land use in the region are pasture and hay meadows. While pastures are a common good for all people, hay meadows are usually privately owned. The term ‘Pri- vate Land’ also includes (apart from hay meadows) home gardens, potato fields etc. Table 3 below displays the distribution of land use by village.

It appears that some villagers use more land than they actually own. This applies in particular to the villages of Koseli and Karkucha where (communal) land is mostly used for hay-making by individual families without land title. Compared to most other communities, the village of Akhaltsikhe owns a large number of livestock: 160 heads of cattle belonging to 100 herder families and 600 sheep exceeding the carrying capacity of the designated village pasture (157 ha available compared to 260 ha needed for the combined number of livestock owned by the village residents). The demand for additional land is met by using currently un-used grassland under different ownership but in agreement with the respective owners.

On the other hand, there are numerous villages with an under-exploited potential of pasture and hay meadows. This is very obvious in the case of Sno-Achkoti or Sioni where land-use stays significantly below the carrying capacity which equals 1 cow or 6 sheep/ha. Of the 1.278 ha available only 942 ha are actually used. These findings appear to reflect the pattern to be expected from a dwindling and rapidly aging population going hand-in-hand with decreasing pressure on the land base.

The total area within and outside village bounds used for home gardens and mostly potato cultivation is negligible. Potato growers use not more than 74 ha in total (22%) of the available land. It appears that although the land base would permit expanding agricultural areas without adverse environmental impacts it may not be feasible due to the insufficient work force available in the target area.

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Table 3: Actual Land Use in the Kazbegi target area Privately owned Hay meadows Actually used hay Village Pasture (ha) hay medaows (ha) meadows (ha) (ha) Akhaltsikhe-Koseli 157.3 57.2 35.3 21.9 Arsha 21.2 21.5 42.5 Artkhmo 21.6 20.6 Gaiboteni 67.2 32.4 13.3 19.1 Garbani 95.2 92.9 74.54 18.4 Gergeti 297.0 78.2 60.0 18.1 Kanobi 179.8 56.8 42.4 14.4 Karkucha 220.0 62.6 34.6 28.0 Ketrisi 0.0 47.0 Khurtisi 62.7 60.3 51.1 9.2 Kobi 0.0 39.3 43.3 Kvemo Okrokana 271.4 0.0 Pansheti 51.9 18.8 33.6 Pkhelshe- Goristsikhe 78.9 68.2 97.6 Sioni 453.7 34.3 132.1 Sno-Achkhoti 366.9 66.5 384.0 Stepantsminda- Gveleti 379.1 128.2 159.6 Tkarsheti 49.2 13.5 27.8 Toti 185.0 12.4 20.86 Tsdo 45.9 23.8 8.8 15.0 Vardisubani 36 7.3 16.7 TOTAL 3040.0 941.8 1278.1 144.1

2.2.2 History of Range Use Prior to 1921 most of Georgia was under rule of a feudal system, Kazbegi Region being one of the few exceptions. Here the land was equally distributed amongst all families and all land use issues were settled democratically by village elders. Villagers en- joyed communal use of designated cow pastures mostly located close to communities and along the lower foothills of the settled mountain valleys. Free range access characterized the slopes and upper reaches of the extensive mountain grasslands of the High Caucasus used as sheep pasture.

Post 1921 all land converted to state land. Officially, private ownership of livestock ceased to exist, although families in the Kazbegi region continued to own stock of sheep and cows for personal use, sharing traditional pasture with state-owned herds. This private ownership of livestock and the continuation of traditional range use by Kazbegi communities allegedly were tolerated by the authorities (pers. comm. M. Mar- sagashvili, MP Kazbegi, Nov 2009).

During the Soviet era the winter pasture of the state- (and privately-) owned sheep was located in the Kazlavi Region, facilitating the dramatic increase in sheep numbers to

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP III Draft Report Feasibility Study Kazbegi 28 more than 400 000 summering in the Kazbegi Municipality exceeding the carrying capacity of the very steep and erosion-prone slopes of the Tergi River watershed. The harsh winter of 1965 which also affected the Kazlavi winter range with exceptionally high snow fall and extreme temperature, caused a massive sheep die-off reducing the overall herd size to approximately 300 000. Following the die-off the overall number of sheep stayed the same until 1991 when Georgia received its independence.

The early post independence period was marked by a push for privatization of land and assets resulting in formerly state-owned livestock being distributed amongst families in the Kazbegi target area. With Georgia’s independence and the establishment of international boundaries, the Kazbegi Municipality lost the Kazlavi sheep winter range –now located on Russian territory- resulting in a dramatic sale and slaughter of the formerly very large sheep herds, reducing overall numbers from 300 000 to less than 30 000 animals.

Following the loss of the Kazlavi winter range, Kazbegi sheep owners have found temporary winter range for their currently rather small sheep flocks in Maruleuli (Rustavi Municipality). Sheep herders have come to realize, however, that with increasing land privatization in the Maruleuli area and a surging market for sheep meat in the Near East, the current use of “borrowed” land is not sustainable.

2.2.3 Land Tenure The majority of the rural families in the target area, in particular families living below or at poverty level are unable to afford the costs associated with the land registration process. This leaves them exposed to land speculators and depriving them of opportunities in accessing bank loans (unregistered land is not accepted as collateral) and/or to sell their land at fair market value.

Although the majority of families without a land title in the target area appears to be unable to register land for financial reasons (can’t afford the survey and registration costs), others refuse to engage in legalization of their lands distrusting Government motives. The latter, highly vocal group of the Kazbegi Region, is mostly afraid of the Government using legal land titles as leverage to impose land taxes (pers. comm. with villagers). The third group refusing land titles and trying to convince their peers to stick together are highly traditional socialists strongly believing in communal property which historically has been utilized communally. This group does not see any need for changes as long as community structures remain strong and united (pers. comm. With villagers).

With Georgia’s land reform of 1998 stipulating private land ownership, the creation of a land cadastre was supported through a bilateral financial agreement with Germany. Subsequently, with the financial assistance of KfW, a centralized cadastre system was established in Tbilisi between 2001 and 2005 with branches located in all Municipality capitals of Georgia. The cadastre system was complemented through a USAID project

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP III Draft Report Feasibility Study Kazbegi 29 implemented by the Georgian NGO “Association for the Protection of Landowners Rights (APLR)” between 2002 and 2006 assisting families of rural areas in the land registration process. APLR’s work in the Kazbegi Municipality consisted of participatory mapping of communal and traditionally owned private residential plots inside villages. Each participating family was handed a document recognized by the central cadastre as proof of traditional ownership. Land registration, however, requires -in addition to the ownership papers- a legal survey and an official application to the land cadastre before a legal land title is provided.

The work by APLR in the Kazbegi Municipality was flawed mostly because numerous families from the target area with a second home in Tbilisi who were not present during the survey were either not covered by the survey, or the survey resulted in papers issued to the wrong name (pers. comm. D. Giorgadze, Director APLR). According to in- formed local sources (pers. comm. M. Marsagashvili) an estimated 80% of the Kazbegi families are still without a legal land title for their residential property.

2.2.4 Zemo Larsi Border Crossing The FS team had been tasked with exploring the possible consequences of the anticipated opening of the Zemo Larsi border crossing for the planning area, as well as nature conservation and sustainable development in the region.

The Zemo Larsi check-point was closed by Russia on 8 July 2006. Since then, the in- stallations on the Georgian site of the check-point were renovated with American financial support. There have been speculations about an imminent re-opening of the check- point throughout 2009. After having signed a formal protocol by the end of this year11, the border was tentatively re-opened on 1st of March 2010 to people, vehicles, and cargo, but visas will still be required for Russian citizens to enter Georgia.12

The check-point is not only of importance for traffic between Georgia and the Russian Federation, but also (and perhaps more importantly) for transit movements between Armenia and Russia. Accordingly, the re-opening has featured prominently in Geor- gian-Armenian relations.

Before the closing in 2006, the check-point played an important role for the local economy of Kazbegi Municipality: Inhabitants of Kazbegi would sell local produce in Vladi- kavkaz, and the Kazlavi area served Kazbegi residents as sheep winter range. A secondary economic effect of the trans-border traffic was that it offered a certain income to cafeterias and kiosks along the border road. Neither of these impacts has been quanti- fied, nor has the ecological impact of the traffic along the Georgian Military Highway.

11 Civil Georgia, 24.12.2009. 12 Radio Free Europe, 01.03.2010 (www.rferl.org/content/GeorgiaRussia_Border_Crossing_Reopened/1970891.html)

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Data on the frequency of border crossings in Larsi which could be used as a proxy for traffic were collected by the Georgian Border Police until the responsibility for check- points was transferred to the Patrol Police in early 2009. As a result of this transfer, the Unit responsible for these statistics at the Border Police was dissolved, and no data for the period before July 2006 are currently available. Data for 2008 and 2009 from bi- annual traffic counts in Ananuri and Kobi, respectively have been provided by the Road Department of the Ministry of Regional Development and Infrastructure (Table 4).

Table 4: Average Daily Traffic on Mtskheta-Stepantsminda-Larsi Road. Trailers Private Mini Buses<15, Buses & Year Location & > 3 Sum Car PickUPs Trucks axels km 20 964 278 61 14 1,317 2008 Avg. km 107 235 5 2 1 243 km 20 1,121 305 56 5 1,487 2009 April km 107 97 5 1 2 105 km 20 1,056 342 105 34 1,537 2009 July km 107 375 123 25 7 530

In order to evaluate the possible socio-economic and ecological impacts of an opening of the border crossing in Zemo Larsi on the Kazbegi Municipality, two different scenar- ios need to be distinguished:

An opening of the check-point in the near future would most likely be limited to transit movements between Russia and Armenia, as there are no direct economic (or indeed diplomatic) relations between Russia and Georgia at the moment. Such an opening would significantly increase traffic along the Georgian Military Highway. It is impossible to estimate how much this increase would be, because the pre-2006 figures are unavailable and cannot be used as a basis for such estimates because (i) Armenia’s constraints in terms of trade links was greater in 2006 than it is in 2009, and (ii) allegedly there were other (if illegal) transit routes through Georgia in addition to the routes via Poti Port and Zemo Larsi before the 2008 August conflict. Increased traffic (to be assessed via an EIA) is expected to: · Have moderate ecological impacts; · Have moderate socio-economic impacts (confined to road-side trade), and · Increase the likelihood that the Government of Georgia decides to initiate the planned rehabilitation of the Gudauri-Kobi section of the Georgian Military High- way. If this section would indeed be rehabilitated, this would have a significant long-term socio-economic impact on Kazbegi Municipality as it would bring the Municipality closer to the rest of Georgia and make it more accessible for tourists and goods.

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An opening of the check-point to traffic between Georgia and Russia including local traffic, following a normalization of the relationships between Georgia and Russia in the long-term, would have the same effects as listed above but most likely at a larger scale, potentially re-open the Vladikavkaz market to products from the Kazbegi Munici- pality, thereby increasing income options of the local population (unless this would be prevented by other factors). Although not directly related to the Zemo Larsi border crossing, the improvement of relations between Georgia and Russia that is implied in this scenario, would also raise the possibility of increased tourist visitation to Georgia including Kazbegi, with the associated socio-economic effects.

While the first scenario appears generally realistic in the short to medium term, major developments in Russian-Georgian relations would have to take place in order for the second to become reality. It is beyond the scope of this FS to discuss the likelihood of such developments.

2.2.5 Waste Management State and Environmental Pollution Waste collection is being carried out by a state owned, undersourced and under equi- ped company through seasonal workers between May 15 until October 15. During winter, habitants themselves are getting rid of the rubbish by throwing it into the environment, particularly into the rivers, In consequence of a lack of waste colleting containers, waste is disposed along streets and fallows, resulting in illegal spontaneous landfills.

The former as well as the one of the current official landfills in Stephantsminda are located on the riverside of the Terek River. These sites are neither fenced nor monitored and all kinds of waste are disposed there, as subject to frequent incineration. A detailed description of waste management and sanitation is attached to Annex 1.10

2.3 Policy and Legal Framework 2.3.1 Comparability of the selected Approach with international agreements/ conventions and the policy of the German Gov- ernment for Development Cooperation The Government of Georgia ratified the following international conventions concerning biodiversity and natural resources: · Convention on Biodiversity (CBD) on 02.06.1994, party of the protocol since 02.02.2009. · the Framework Convention on Climate Change (UNFCCC) 1994, · the Convention on International Trade in Endangered Species of Fauna and Flora (CITES) 1996, · the Ramsar Convention on Wetlands 1997, · the Convention to Combat Desertification (UNCCD) 1999, · the Convention on the Conservation of Migratory Species of Wild Animals 2000,

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· Agreement on the Conservation of Bats in Europe 2002, · the Kyoto Protocol to the United Nations Framework Convention on Climate Change 2005 · the Protocol to the Convention on the Prevention of Marine Pollution by Dumping of Wastes and other Matter 2006, · the Convention on the Conservation of European Wildlife and Natural Habitats 2009, and · Cartagena Protocol on Biosafety to the Convention on Biological Diversity 2009.

In doing so, Georgia signalled their commitment to safeguard biodiversity, use the natural resources in a sustainable manner, reduce overarching threats, and minimize environmental risks, which is reflected in the following national strategies: · Economic Development and Poverty Reduction Program of Georgia (EDPRP, 2003)13 · National Environmental Action Plan (NEAP, 2000) and National Biodiversity Strategy and Action Plan (NBSAP, 2005)14 · National Action Programm to Combat Desertification (NAP, 2003)15

Besides the above mentioned national strategies, the following regional strategies are relevant to sustainable use of natural resources in the southern Caucasus: · The Ecoregional Conservation Plan (ECP, 2005) · The European Neighbourhood Policy (ENP, 2006) · The Environmental Strategy for Eastern Europe, Caucasus and Central Asia; 2006

During the intergovernmental consultation in May 2008 it was agreed to assist Georgia in the development of a biosphere reserve possibly to be located in the Kazbegi Region in the Greater Caucasus with a grant of up to € 4 million under German Financial Co- operation. This commitment is part of the Caucasus Initiative16, more specifically the Ecoregional Nature Conservation Programme for the Southern Caucasus17. The Eco- regional Nature Conservation Programme as environmental component of the Cau- casus Initiative is promoted and supported by the Transboundary Joint Secretariat (TJS). Part of Germany’s Caucasus Initiative is also the Caucasus Protected Areas

13 http://www.psigeorgia.org/pregp/files/EDPRP%20_ENG_%20FINAL.pdf 14 http://www.cbd.int/doc/world/ge/ge-nbsap-01-en.pdf 15 http://www.unccd.int/actionprogrammes/centraleu/national/2003/georgia-eng.pdf 16 The BMZ Caucasus Initiative is a contribution of German Development Cooperation to conflict prevention in the Southern Caucasus states of Armenia, Azerbaijan, and Georgia. The Ecoregional Conservation Programme is one of the cornerstones of the Caucasus Initiative promoting the establishment of cross-border national parks and the conservation and sustainable use of natural resources. 17 BMZ. 2006. Nature Protection in the Caucasus. BMZ Topics No. 156.

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Fund (CPAF)18. The overall goal of the German Development Cooperation in the field of natural resource management is “to help preserve natural resources for current and future generations while at the same time contributing towards local livelihoods and sustainable economic development in an effort to achieve the Millennium Develop- ment Goals (MDGs), notably MDG 7 and MDG 1” 19. Thus, the improvement of local livelihoods and biodiversity conservation are superior objectives of the proposed project. The project approach is also in line with BMZ’s policies for biodiversity conserva- tion20, forests21 and sustainable development and gender22, specifically the BMZ Con- cept 164 on Biological Diversity, which aims at harmonizing the biodiversity conservation and sustainable development with special regard to the involvement of the local population in the sustainable management of protected areas and their support zones.

Within the Caucasus Initiative, the German development cooperation in the sector of natural resource management is based on three programme areas: (1) conserving biological diversity as a basis for long-term economic development; (2) promoting the sustainable use of natural resources as part of local development, particularly in rural areas, and finally; (3) increasing preparedness for climate change by reversing land deg- radation as part of efforts to conserve present livelihoods and safeguard future potential for development. The project at hand addresses these programme areas as follows: · supporting individual protected areas and their support zones, · integrated land use planning approach in due consideration of the Ecoregional Conservation Plan, · promotion of sustainable development and use of natural resources though pilot activities in the support zones of protected areas, · strengthening stewardship of local stakeholders for the conservation of natural resources though participation, empowerment and promotion of co-management structures, · strengthening the personnel and institutional capacities of government agencies responsible for natural resource management.

2.3.2 Comparability of the selected Approach with Georgias National Policies Main policy documents in regard of Biodiversity Conservation are the National Envi- ronmental Action Plan (NEAP, 2000) and the National Biodiversity Strategy and

18 Caucasus Protected Areas Fund (CPAF). 19 German Development Cooperation 2009: Caucasus Initiative – Regional Concept for the Southern Caucasus. “Conservation and Sustainable Use of Natural Resources”. 20 BMZ 2008: Concept 164 Biological Diversity. 21 BMZ 2002: Concept 122 Forests and Sustainable Development. 22 BMZ 2007: Topics 173 Strengthening the Participation of Women in Development Cooperation.

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Action Plan (NBSAP, 2005). Both documents are rather outdated and not used in practice, the process of preparing a new NEAP and NBSAP began in 2009.23.

A 10-year National Protected Areas System Development Strategy and Action Plan for Georgia was developed in 2008, in collaboration with the IUCN POSC (IUCN 2008a). This plan lists priority actions with regard to the following subject areas: (1) PA system development, (2) improvement of legislation on PAs, (3) improvement of PA management, (4) financial sustainability, (5) capacity building, (6) development of the research and monitoring system, and (7) stakeholder participation. The objective of establishing the Kazbegi Biosphere Reserve was included into this strategy after the decision on the Ecoregional Programme III had been taken.

A joint analysis of the implementation of PA-related commitments under Multilateral Environmental Agreements by Georgia was conducted by Ministerial staff, with facilitation from the TEMATEA Secretariat IUCN POSC, in 2008. As a result, guidelines comprising four general principles and 67 specific actions for Improved and Co- herent Implementation of Conventions Relevant to Protected Areas in Georgia were developed and published online (IUCN 2008b). These guidelines have also been taken into account in the above PA system development strategy.

In addition, WWF Caucasus, within the framework of the 2012 Caucasus Protected Areas Project, is currently developing an Institutional Needs Assessment for Geor- gia’s Protected Areas, to be published in 2010. It is recommended that this assessment is consulted and checked for its relevance to Kazbegi Project during project implementation, once published.

2.3.3 Georgia’s Protected Area System The Protected Area (PA) system of Georgia has been described in detail in Qiqodze et al. (2007). The following information is an updated extract from this publication: In 1996, the Georgian Parliament passed the Law on the System of Protected Areas. This law created the legal basis for the establishment of protected areas, with the objective to protect outstanding natural areas and valuable cultural heritage. It is still in force. The internationally recognized IUCN PA Categories and their application procedures were introduced to Georgia. To date, there are five categories of PA. Their total area is 495,892 ha, which equals more than 7% of the total territory of the country. Brief information on the PAs in each category is provided below:

1. Strict Nature Reserve (IUCN Category I): Access to Cat I PAs is prohibited – only educational visits and non-manipulative scientific research are allowed, subject to special authorization. Currently there are 14 Strict Nature Reserves in Georgia.

23 USAID 2009: Biodiversity Analysis Update for Georgia. http://georgia.usaid.gov/index.php?m=28&newsid=494 (03/2010)

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2. National Park (IUCN Category II): The first National Park in Georgia, called Tbilisi National Park, was established in 1973 (later abandoned, then re-established in 2007). In 1995, Borjomi-Kharagauli National Park was founded. Kolkheti National Park was founded in 1998, Tusheti and Vashlovani National Parks in 2003, Mtirala National Park in 2006, and Algeti and Kazbegi National Parks in 2007. It is planned to establish three more National Parks - in Racha, Svaneti, and Javakheti.

3. Natural Monument (IUCN Category III): The first three Natural Monuments were created in Georgia in 2003. Currently there are 14 of them. These are comparatively small areas, which nevertheless have significant biodiversity or scenic value. Additional Natural Monuments are currently being established throughout Georgia.

4. Managed Nature Reserve (IUCN Category IV): The first Managed Nature Reserve in Georgia was established in 1956 near Gardabani. There are 12 Managed Nature Reserves in Georgia.

5. Protected Landscape (IUCN Category V): There are currently two protected landscapes in Georgia – Tusheti Protected Landscape (27,903 ha) was the first one, established in 2003. Additional Protected Landscapes are being planned at the moment. The role of the Agency of Protected Areas (APA) at the Ministry of Environment Protection and Natural Resources is described in detail in Chapter 2.5.

2.3.4 Biosphere Reserves As part of the Kazbegi Feasibility Study, an analysis of the way in which the UNESCO Biosphere Reserve Concept has been incorporated into Georgian PA legislation has been conducted, and recommendations for improvements of the legislative base of the establishment of Biosphere Reserves in Georgia have been derived from this analysis (Annex 1.11). This section presents the main conclusions, while key recommendations are summarized in Chapters 4.1.1 and 4.1.2.

The Law on the System of Protected Areas (7th March, 1996. N 136-IIS) currently provides the framework for establishing and managing Biosphere Reserves in the country. The Law on the Status of Protected Areas (22nd November, 2007. N 5486-IIS) is another legal document with relevance to BRs, as it establishes the current legal status (category), territory and boundaries of PAs created by the Georgian authorities. Some of these PAs could form core and buffer zones of BRs. For instance, paragraph 6 of this law establishes Kazbegi National Park, which is being considered currently as the core area of a potential Kazbegi Biosphere Reserve.

Article 3, Paragraph 2 of the Law on the System of Protected Areas of Georgia stipu- lates that in addition to PAs of the IUCN categories, it is allowed to establish “categories, which are included in the international network of Protected Areas, such as the Biosphere Reserve, the World Heritage Municipality and the Wetlands of International

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Importance”. Hence, the law considers and treats BR as a type of PA, and general provisions of this law pertinent to PAs apply to BRs as well.

Article 10 relates solely to BRs. The provisions of this article define the objectives of BRs, requirements and criteria, a procedure for the approval of BRs following the Statutory Framework for BRs, and prescriptions for zoning. According to the Georgian PA law, Biosphere Reserves can comprise the following main zones: (a) Core or Strict Nature Protection Zone; (b) Managed Nature Protection (Manipulation) or Buffer Zone; (c) Restoration Zone; and (d) Traditional-Cultural Landscape Zone. According to the law, one or several IUCN categories of Protected Areas could be included in a Bio- sphere Reserve.

Article 12 of the Georgian PA law specifies the type of land ownership that are permitted in the zones of Biosphere Reserves. According to article 16 of the law, “…It is obligatory” to establish support (buffer) zones in Biosphere Reserves. Support (Buffer) Zones should be established “by using the category of Multiple Use Area (IUCN Cat VI) and are aimed to carry out measures of promoting a balanced activity of nature protection and sustainable development, and local financial resource generation. Article 16 therefore mixes the buffer zone concept of the MAB Programme with the support zone concept of National Parks or other PAs. If anything, the support zone of such PAs would be comparable with the outer transition zone of BRs, but not the buffer zone.

According to Article 18, the APA has the authority to manage Biosphere Reserves and, “in exceptional cases”, to manage them together with other organizations; How- ever, there is no institutional structure specified or required to be established for such a joint management.

Annex 1.11 contains a comparative analysis of the treatment of a BR in the Statutory Framework for BRs and the Georgian Law on the System of PAs. The following main conclusions regarding inconsistencies between the two and gaps in the latter can be drawn from this analysis.

Concept of Biosphere Reserves: As opposed to the UNESCO’ Statutory Framework, Georgian legislation considers and treats BR as a PA. Reconciliation of biodiversity and biological resources with their sustainable use, which is a key objective of BR, is missing in the list of objectives for establishing PAs under Georgian law. This incon- sitency with UNESCO objectives for Biosphere Reserve is related to the fact that, in Georgian law, BRs are considered a type of PA, the main objective of which is nature conservation, whereas according to UNESCO’s concept, objectives for Biosphere Re- serves go beyond classical objectives of PAs (UNESCO, 1996).

Zoning: The UNESCO’s Statutory Framework requires three zones in BRs, while the Georgian Law on the System of Protected Areas considers BR as a type of PA with four zones. None of the zones prescribed in Georgian law can fully serve the function of promoting and developing sustainable resource management practices as “tradi-

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP III Draft Report Feasibility Study Kazbegi 37 tional uses” does not necessary mean “sustainable uses”. In addition, there is some confusion in the Georgian PA Law about the buffer zone. E.g., in Article 10, related to Biosphere Reserves, the “buffer zone” is identified as a “Managed Nature Protection Zone”, where only “scientific research, environmental protection and restoration activities are allowed. However, later in Article 16, related to Buffer Zones in general, this zone is identified with “Multiple Use Area” or “Support Zone”, which “is aimed to carry out the measures of promoting balanced activities of nature protection and sustainable development”. Provisions related to zoning of BRs in Georgian legal framework are in need of change to ensure complete concordance with the UNESCO’s Statutory Framework.

Organizational arrangements: Current Georgian legislation does not provide sufficient ground for the APA and it’s Territorial Administrations to be involved in the management of entire BRs. The law on PAs gives the APA the authority to manage core and buffer zones of a BR. The APA is authorized to cooperate with other organizations, “in exceptional cases” for managing the buffer zones. APA has no authority in transition areas as there is no such area required by Georgian legislation for BRs. The Scientific Advisory Board, which is by current legislation the instrument for cooperation with other governmental organizations and local self-governance bodies, cannot fully undertake the role of mechanism for participation, trans-sectoral coordination and cooperation, as required by UNESCO’s requirements. Therefore, changes need to be made in Geor- gian legislation in order to provide for effective arrangements for managing BRs, including administration, coordination and facilitation of participation.

Management plans: According to TJS (2009), “The existing legal framework implies that management plans for BRs should have the same character as management plans for State Reserves, National Parks and other types of PAs that are managed solely by the APA. However, management plans for BRs must be different in purpose and scope from, say, a management plan for a National Park”.

Also, if a BR is organized in compliance with UNESCO’s Statutory Framework, it is required that various stakeholders are involved in its management. Therefore, it would be appropriate if management plans for Biosphere Reserves are agreed between all stakeholders and approved by an authority which is higher than the MoE – e.g. the President of Georgia. This kind of a plan for a BR would be better described as a development program in the context of the Georgian system. The program would identify “actions, which should be taken by various entities having a stake in the development of the area concerned” (TJS 2009). The core area and buffer zone could have its own management plan, more like a typical PA management plan.

In addition to these core observations, the analysis enclosed as Annex 1.11 identifies additional shortcomings of current Georgian legislation on the BR designation procedure, participation in the World Network of BRs, and periodic reviews.

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2.4 Stakeholder Analysis For this stakeholder analysis, the main stakeholders of the project were analysed regarding their mission and interest, activities in the region or with direct relevance to the region, their potential role in the context of the proposed project and their capacity with particular regard to that role. A secondary distinction is made regarding their involvement in Kazbegi Municipality and the existing National Park. The stakeholders are grouped into following categories: (1) Government institutions, (2) International donor organizations, (3) Civil Society (including the Church, academic institutions, NGOs and CBOs), (4) Business sector. A detailed analysis, as well as contact details and visiting dates of those agencies that were contacted are attached in annex (Annex 1.1; Annex 1.12).

The major findings and observations relevant for the implementation of the project are: · The Asian Development Bank (ADB) is an international donor of potential importance, as the Indicative Assistance Programme for 2008-2009 comprises ca. USD 70-90 Mio of grants. Communications with ADB and national Government Agencies regarding inclusion of Kazbegi Municipality into water sector rehabilitation activities within the framework of the ADB-GoG cooperation should be established early during project implementation · The Georgian Orthodox Church occupies a prominent position in the public life. The church is an opinion leader among the local population, a technology leader regarding agricultural technologies and local crafts, and potentially an important land owner. · The private sector of Kazbegi Municipality is represented by livestock breeders and pastoralists, the guesthouse owners, hotel owners and others active in the tourism sector, and a few small businesses that are involved in the extraction of various building materials. · An important umbrella organization of Georgian tourism operators, including many that are active in the Kazbegi Municipality, is the Georgian Tourism Asso- ciation (GTA) with 28 business memberships and activities in the fields of destination promotion, capacity building and training.

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Figure 5: Stakeholder Overview

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Table 5: Government Agencies with activities in Georgia relevant to the project.24 Institution Mission Activities in Kazbegi Municipality/ Possible role Capacity Interrest Ministry of Several subunits (e.g. APA, Currently no project activities dedicated Responsible Ministry and - Environment Environmental Inspectorate) of the to the Municipality or Kazbegi NP. implementation partner of the (reduced Protection and MoE are fulfilling their functions in Current priorities: institutional capacity project, including biodiversity budget) Natural Kazbegi Municipality. Priority development, supported through a conservation and natural Resources actions: elaboration of an number of donor funded projects, resource use (MoE) Environmental Code (basis for including through GTZ and InWEnt. further legislative amendments, e.g. regarding co-management), the development of sustainable tourism, improvement of the Ministry’s relations with wider society. Biodiversity Development and implementation of Exceptional biodiversity value of the Strong role regarding policy - Protection policy and legislation for biodiversity Municipality was acknowledged, division development for participation (limited size, Division/ MoE conservation inside and outside staff showed both interest and skepticism and co-management of PAs, reduced protected areas; provides expert towards establishment of BR in Kazbegi biodiversity monitoring and the budget) advice to the Department of Natural Municipality. development of policy and Resources Licensing of the Ministry Particular interest in using the Kazbegi legislation for any sustainable of Economic Development; hosts project to pilot a new type of community hunting schemes. Should be various MEA focal points; based sustainable hunting scheme for represented in development of national biodiversity Georgia communication/ coordination monitoring system; implementation mechanisms particularly of relevant MEAs (e.g. CBD, regarding community based CITES). Functions still not clearly sustainable hunting scheme delineated from those of the APA

24 Additional agencies are listed and described in TJS (2009). The Ministry of Finance of Georgia is not a stakeholder of this specific project, but will play its usual role as a recipient and distributor of the KfW grant for the project.

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Institution Mission Activities in Kazbegi Municipality/ Possible role Capacity Interrest Inspection of State sub agency of the Ministry of Only 4 administrative acts (statements PA rangers and Inspectorate - Environmental Environment and Natural about violations) have been drawn up for staff cooperate regarding law (limited staff Protection/ MoE Resources of Georgia. Relevant Kazbegi Municipality over the last two enforcement in PAs. General capacity/ subdivisions: Urgent Response Unit years. collaboration regarding natural Eastern (controlling illegal logging, poaching Interrest in cooperation within the resource related law Central etc.) and Inspection Unit (expert framework of the legal competencies of enforcement Bureau in inspections in the biodiversity and the Inspectorate; priority objective: further Mtskheta) natural resources field). reform of the Inspectorate which may result in increased capacity at the national and Municipality level. Department of Environmental policy development Not active on regional level but stake in Cooperation within the + Environmental and long-term planning of the MoE, regional activities of national or mandate of the Policy (no Policy and liaison with international partners international policy, such as the Department, role in general constraints) International and donors (MEA and international establishment BRs. policy development aimed at Relations/ MoE cooperation focal points are based Support to the idea of establishing a BR participation and co- at the Department) in Georgia but not written in any policy management, liaison with the Leading the revision and re-drafting documents. Generally follow the advice of MAB Programme in the of the NEAP and NBSAP of the APA and Biodiversity Protection course of a possible BR Georgia, both of which are in Division nomination. preparation currently. Forestry Development and implementation of Currently not active in the Municipality, as Involvement if forested parts Department/ forest policy including ecological, forest patches refer to Kazbegi NP and (e.g. pine plantations) of the MoE economic and political aspects of therefore are managed by APA. National Park are de-listed in forest management, as part of the course of the re-zoning of national development strategy and the NP. stable development of the country.

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Institution Mission Activities in Kazbegi Municipality/ Possible role Capacity Interrest Agency of Legal entity of public law, Kazbegi NP is managed by the APA Main national partner of KfW +/- Protected Areas independently conducts political, through a Field Administration that for the planned project; central (unclarities (APA)/ MoE governmental, social, educational, reports to it. APA is currently compiling a role in implementing the with other cultural etc. under the state control. catalogue of Natural Monuments of project, supporting the legislation, Core mission: (a) manage protected Georgia (IUCN Category III). While seven necessary adjustments of the lack of areas of IUCN Categories I -IV, and sites situated in the Municipality, none of legal and institutional implementing other PAs in cooperation with other them has been shortlisted, in order not to framework and ensuring the legislation, institutions; (b) maintain and preempt activities aimed at the sustainability of operations of limited supervise PAs; (c) PA system and conservation of these sites within the Kazbegi NP institutional capacity development planning, and framework of this project. memory, (d) development of plans, draft laws Interested in appropriate formate for limited staff and guidelines related to PAs. nature conservation and sustainable capacity) Additional functions: monitoring of development of Kazbegi Municipality rules, planning and development of new protected areas, popularization and development of ecotourism, planning and arrangement of PA infrastructure. Kazbegi Territorial subunit of the APA, In theory, the activities include protection Key actor during project - National Park responsible for the management of of the NP, enforcement of the implementation and beyond, (limited staff Administration the National Park and for liaison conservation regime, liaison with other and key champion of the capacity, with the relevant State Institutions institutions, control of natural resource sustainable development for limited and other stakeholders. use, research and monitoring, promotion/ the whole of Kazbegi budget, lack organization of sustainable tourism, Municipality. of education and communication. Due to the infrastructure) limited capacity activities are implemented to a very limited degree only. Central interest of the administration is to have the capacity and resources to fulfill its functions adequately.

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Institution Mission Activities in Kazbegi Municipality/ Possible role Capacity Interrest Department of Development and promotion of Conducted training (e.g. for guesthouse Important cooperation partner. +/ - Tourism and tourism in Georgia. owners); currently collaborating with the Strenghened capacity to (reduced Resorts (DoTR) NGO “Mountain House” to establish contribute to tourism budget, staff information boards and signposting, development through reduction, preparing the development of a Mountain establishment of tourist strategic Rescue Unit. Funding from the State information centre in reorientation) Budget has been committed for a small Stepantsminda; to be involved tourist information centre. in regular communication with Priorities for 2010: development of the NP Administration/ tourism in the mountain regions. cooperation bodies. Collaborate with the Union Internationale des Associations d'Alpinisme (UIAA) and the private sector to conduct mountaineering training for guides Ministry of Issue (partly auction) of licenses for issued a number of licenses for resource interested in fulfilling its legal + Economic the use of natural resources (timber, exploitation in Kazbegi Municipality. role in the Kazbegi (no Development: water, underground minerals, However, it appears that few or none of Municipality. constraints) Department of hunting and fishing) and export these licenses are currently being used. Natural licenses for specimens of wild flora Resources and fauna. Licensing

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Institution Mission Activities in Kazbegi Municipality/ Possible role Capacity Interrest Ministry of Development and implementation of MRDI’s Road Department maintains the Potential consultation partner, - Regional policy, legislation and planning roads of Kazbegi Municipality and carries should be engaged for advice (no regional Development instruments for the coordinated out rehabilitation works. MRDI is currently on further developments units, limited and development of Georgia’s regions. conducting a reform of regional regarding regional planning capacity for a Infrastructure Key role as a coordination agency development policy in Georgia, which will policies, laws and methods. strong direct (MRDI) for infrastructure development include the development of integrated Collaborates closely with the role) projects. spatial planning policies and may create Regional Offices of the State useful synergies during the course of the Representatives – Governors, project. could be involved in the joint planning/ implementation of the project. Ministry of Maintenance and rehabilitation of The Road Department is responsible for Collaboration with local +/- Regional Georgia’s Roads. the maintenance of the Natakhtari-Larsi authorities within the legal (no funds for Development Road (“Georgian Military Highway”). mandate and financial means major and Planning to rehabilitate the road to Sno of the Department. investments) Infrastructure: Village and parts of the road between Road Stepantsminda and the Sameba Church. Department Ministry of Implementation of agricultural policy Kazbegi Municipality is not considered a Potential cooperation to be - Agriculture: and the development of agriculture favorable place for agricultural activities: explored in the course of the (reduced Department of in Georgia’s regions. no specific interest and no major project budget, Regional activities. limited Management Minor activities may be conducted by the interrest) territorial unit for Mtskheta-Mtianeti Region. Potential sub-projects: intensification of meadows, use of improved seeds, support to the development of dairy farms.

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Institution Mission Activities in Kazbegi Municipality/ Possible role Capacity Interrest Ministry of Protection of the land and sea Strong pressence at borders with the Important partner of nature + Internal Affairs: borders of Georgia. Russian Federation and the breakaway protection/ sustainable (no Border Police region of South Ossetia. Border Police is development (e.g tourism constraints) based in Stepantsminda, permanent/ development); due to seasonal posts near Abano, Larsi and presence in remote parts of Juta. the Municipality, added value Interest in strong visitation in the border in sensitizing them to nature areas; increased tourism conservation issues, by involving them in public awareness building and information events Ministry of Legal Entity of Public Law, Very few titles have been registered so Fully implement its mission on Justice: National responsible for establishment and far; no agricultural lands except for a few site Agency of implementation of a registration plots owned by the Orthodox Church. Public Registry system for ensuring recognition and Territorial office in Stepantsminda, protection of immovable property although all land title applications can be rights by the state. done on-line or directly at the central office in Tblissi Ministry of Coordination and promotion of Not active at the sub-national level. Supporting role in relation to +/- Foreign Affairs: Georgia’s cooperation with Interested in promoting activities related the establishment of any (limited National UNESCO; established in 1994 and to UNESCO in Georgia; though UNESCO-designated funds, small Commission for reorganized in 2004. Biosphere Reserves have never been Biosphere Reserve or World grants for UNESCO discussed Heritage Site in the Kazbegi priority areas) Municipality. Ministry of Elaboration and conduction of State No information about activities of the In case a nomination of Culture, Cultural policy on protection and MoCCHPS related to cultural heritage in Kazbegi as a World Heritage Heritage development of Cultural Heritage; the Kazbegi Municipality. No natural WH Site is considered, the Protection and supervision on protection, the sites in Georgia have been designated to Commission – as well as the Sport investigation and promotion of date; no close collaboration of World Ministry as a whole and the (MoCCHPS): cultural heritage, drafting normative Heritage Committee with the APA or the Cultural Heritage Department Georgian acts on cultural heritage zones, and MoE. will become an important National World other activities. Cultural Heritage partner Heritage Department; hosts national World Committee Heritage Committee.

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Institution Mission Activities in Kazbegi Municipality/ Possible role Capacity Interrest Ministry of Exploit existing energy resources, Promot establishment of small Important role for the +/- Energy diversify imported energy supply, hydropower stations, to be financed by promotion of the (limited ensure energy safety, develop investors. Two non-operative stations and establishment of small financial alternative energy sources (long- additional four potential small hydropower hydropower stations; partner resources) term goal of meeting the entire plant sites in Kazbegi Municipality, but no in piloting new innovative demand on electricity by local concrete preparations for the schemes of energy trade for hydropower resources). rehabilitation/ establishment of the benefit of local hydropower stations communities Office of State Represent the State at the level of Department of Relations with Local Strong role as a + Representative – the region; coordinate policy Government and Public Organs; communication facilitator and (no Governor in implementation at the regional and responsible for the collaboration with advisor to the project; should constraints) Mtskheta- sub-regional level; consulted by Municipalities like Kazbegi. No major be represented in consultation Mtianeti Region municipalities regarding local projects implemented and cooperation mechanisms budget allocations. Representatives that are to be established. at regional level not legally Sufficient capacity as a established, although fulfilling their monitor and facilitator of de-facto role. project preparation Sakrebulo Local council, representative body Leading representative body of the Sakrebulo (and not the - of local self-government of Kazbegi Municipality. Gamgeoba) should be the (financial Municipality. Interest is safeguarding local participation main local partner in the constraints; in the decision making on all issues of decision making processes; conflict with relevance to the Municipality. leading role in any Gamgebeli/ communication or coordination Gamgeoba) mechanisms for NP + SZ/ BR set-up. Kazbegi Executive government body of Responsible for implementing a wide Important local implementation - Gamgeoba Kazbegi Municipality. range of activities. partners, involved in (limited staff Implementation of the decisions of Interrests: maximize the development communication and capacity) the Sakrebulo and delivery of public effect, minimize land use restrictions, coordination mechanisms, services to Kazbegi Municipality. strengthen his position within the dissemination of information. Municipality. Outside actors perceived as undermining his authority.

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Institution Mission Activities in Kazbegi Municipality/ Possible role Capacity Interrest Georgian Promotion of implementation of the Not active since 2004; in 2004, Future role depends on - Academy of UNESCO MAB Programme in elaboration of a draft concept whether BR is established, (limited Sciences: MAB Georgia. “Comparative characteristics of the and on the capacity financial and National regions for the formation of the first development. staff capacity) Committee biosphere reserve in Georgia”. Promotion of the establishment of BRs

Table 6: International donor agencies with activities in Georgia relevant to the project. Organization Relevant activities in Georgia Activities in Kazbegi Possible role/interest (country) Municipality KfW PA establishment Ecocregional Programme Donor Development of water sector III, Kazbegi Project- Potentially transfer of best practice/expertise KfW TJS Coordination of PA projects, PA related Elaboration of pre-FS, Coordination with TJS activities, application of capacity building Advice to decision makers TJS PA Management Planning Guidelines on above project Caucasus Protected Funding of PA running costs - Funding of Kazbegi PA running costs Areas Fund (CPAF) GTZ Office Tbilisi Sustainable management of the biodiversity - Collaboration on specific aspects of sustainable in PA and forests (until 2016); natural resource use in Kazbegi (e.g. FairWild Support to development of environmental certification); code; Integration of legal adjustments related to Strengthening of local self-government; Kazbegi PAs into national legal reform; Advice regarding participation of local self- government in sustainable development of Kazbegi Municipality;

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Organization Relevant activities in Georgia Activities in Kazbegi Possible role/interest (country) Municipality USAID Georgia Rural tourism development; Project on land tenure in Provision of information and advice; DGP Grant Programme for national NGOs, Kazbegi Municipality incl. environmental grants; commissioned in 2002 to Further scope for collaboration to be Rural Energy Programme, including Association of Protection of determined. promotion of hydropower; Landowners Rights Support to National Parks Reform (US DoI, (NGO-APLR) Interest in collaboration on participation of local 1999-2009); communities in PAs and natural resource Sector Strategy Environment including management; participatory watershed protection, community forestry in preparation; Millennium Challenge Georgia Regional Development Fund Energy Infrastructure Information about ongoing activities, Georgia Fund (GRDF), Agribusiness Development Rehabilitation Project environmental impacts in prospective PAs Activity (ADA) (North-South pipeline within Kazbegi Municipality (e.g. Sea-buckthorn rehabilitation) areas S of Stepantsminda); Exploration of participation of actors from Municipality in GRDF, ADA Eurasia Partnership Eco-Awards Programme, including grants - Advice on best practice approaches and Foundation Georgia on participation in PAs, sustainable tourism lessons learned development in PAs Asian Development Support (loan) to water sector reform in - Possibly inclusion of Kazbegi Municipality in Bank Georgia under consideration cooperation ADB-Georgia regarding sewage system rehabilitation World Bank Establishment of Protected Areas in - Need to take into account lessons learned from Eastern Georgia and Kolkheti Wetlands earlier WB PA projects UNDP/GEF Financial sustainability of Georgia’s PA - Application of project outcomes regarding system; sustainable PA financing in Kazbegi; Use of small hydropower at the community Contribution of GEF to CPAF considered level; UNDP now responsible for GEF Georgia allocations; SCD (Switzerland) Support to rural SMEs and marketing, Support to NGO Application of project outcomes and best including rural tourism Sustainable Tourism practice approaches Centre 2001-2002

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Organization Relevant activities in Georgia Activities in Kazbegi Possible role/interest (country) Municipality People in Need Support to small bussinesses, Support to NGO Mountain Potentially implementation partnership; (Czech Republic) CBOs/NGOs, House, Stepantsminda Application of project outcomes and best tourism development practice approaches

Polish Aid Georgia Agricultural tourism Support to NGO Mountain Application of project outcomes and best Office House, Stepantsminda; practice approaches;

EC Delegation to Management of waste, water, land use, Inclusion of Kazbegi Coordination of activities with project on natural Georgia environmental disaster risks; environmental Municipality in disaster risk disaster risk reduction; advocacy; management project Application of project outcomes and best Establishment of Environmental Sector practice approaches, particularly with regard to Policy Support Programme in preparation; waste management; JSDF Livelihood improvement around PAs - Application of project outcomes and best (Kolkheti Lowlands), finished practice approaches; Reportedly considering further activities in Georgia

Table 7: IGOs, national/international NGOs and academic institutions relevant to the project.

Organization Relevant activities Activities in Kazbegi Possible role/interest Municipality REC Caucasus Community Forestry, Local Agenda 21, - Exchange of information and experience; support to protected landscape project in Interest in developing formats for local Khevsureti stakeholder participation and sustainable development; WWF Caucasus WWF Caucasus Programme, 2012 Small grant support to Exchange of information Programme Office Caucasus Protected Areas project, “Zeta” environmental implementer role in new PA projects for summer camp near Juta Interest in the establishment of an effective KfW, Norwegian MoFA, Development of new conservation regime in Kazbegi Municipality approaches to support zone management

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Organization Relevant activities Activities in Kazbegi Possible role/interest Municipality Caucasus Promotion, implementation and updating of - Regional platform for exchange of experience Biodiversity Council Eco-regional conservation plan, eco-regional relevant to the project communication IUCN Programme Development, translation of PA - Application of project outcomes and best Office for the Management Guidelines, training, PA practice approaches, particularly regarding PA Southern Caucasus system planning, development of formats for Management planning, stakeholder local stakeholder participation in PA participation in PA NGO NACRES Research and practical projects on - Application of project outcomes and best biodiversity conservation (particularly large practice approaches, particularly regarding carnivores, human/wildlife conflict) human/wildlife conflict NGO GCCW Research and practical projects on Baseline study for Application of project outcomes and best biodiversity conservation (particularly birds), establishment of Kazbegi practice approaches national BirdLife partner, publications on National Park (2007) Georgian PAs; Potential source of advice during project Elaboration of Caucasian Black Grouse implementation, particularly regarding alpine National Action Plan (2007) bird conservation NGO CENN Georgian sustainable development Kazbegi included in Natural Communication and coordination of project NGO/consultancy with diverse project Disaster Risk Management activities in Kazbegi Municipality portfolio, including communication project participation in small hydropower Application of project outcomes and best development, advocacy, sustainable land practice approaches management, EIA NGO Stepantsminda Promotion of economic development and School project (computer To be explored further livelihood security of rural population of skills); Stepantsminda Municipality (Tbilisi- based City partnership with french NGO) partner city NGO Mountain House Promotion of mountain tourism and Support to mountain tourism Application of project outcomes and best Kazbegi environmental awareness raising in Kazbegi Municipality, practice approaches education, campaigns Possible local implementation partner NGO Sustainable Promotion of sustainable tourism in Kazbegi Establishment of “Kazbegi Source of advice on local experience Tourism Centre Municipality Climbers Hut”, educational trail marking, awareness Possible local implementation partner raising campaigns, guide training

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Organization Relevant activities Activities in Kazbegi Possible role/interest Municipality NGO Elkana Promotion of sustainable rural development, - Application of best practice approaches from organic agriculture, rural tourism other regions of Georgia, e.g. regarding guesthouse training and certification CUNA Georgica/CWC Promotion of sustainable natural resource - Cooperation regarding FairWild certification of use in Georgia, certification (FairWild) and Kazbegi wild products, processing and market chains for wild products marketing Ilia Chavchavadze Research into the ecology and conservation Field station in Source of advice regarding the zoning and State University, of Georgian fauna Stepantsminda, various conservation regime of Kazbegi National Park Faculty of Life research activities in Sciences Kazbegi Municipality Georgian Academy of Botanical Research, regional coordination of Research into flora and Source of advice regarding the zoning and Sciences, Institute of Caucasus Plant Red List Assessment, to be vegetation of the Caucasus, conservation regime of Kazbegi National Park Botany finalized in 2010 plant conservation Explicit interest in conservation of specific plant communities in the Municipality

Table 8: Private Sector Stakeholders Activities in Kazbegi Municipality Possible role/interest Livestock breeders described in more detail in Chapter 2.3, possible interventions aimed at the livestock and pastoralists sector are discussed in Chapter 3.6. Guesthouse owners, Greatest activity is related to Gudauri winter resort: Sport Hotel Gudauri, hotel owners and Hotel “Gudauri Hut”, Hotel “Truso” and a number of smaller guest houses others active in the (Shamo, Panorama, Ozoni, Shino, Sno), operating services mainly during tourism sector the winter and partly during the summer season; two restaurants in the skiing area and one ski hut, plus a few small vendors)

described in more detail in Chapter 2.3.1.5 Georgian Tourism important umbrella organization of Georgian tourism operators; active in the It is recommended to explore how the Association (GTA) fields of destination promotion, capacity building and training; cooperation experience and expertise gained during this with the APA regarding the development of sustainable tourism; involved in cooperation can be harnessed during project marketing, trail marking and education activities in various PAs of Georgia implementation.

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Activities in Kazbegi Municipality Possible role/interest Kasara Ltd. Carbon acid gas and mineral water enterprise, used to hold a 25-year Uncertanty about future plans to exploit license for two areas in Kazbegi Municipality. Until 2008 the company had carbon acid gas and mineral water in the lost its interest in exploiting the wells and the carbonated water continued to Truso Gorge stream from the well uncontrolled, resulting in deterioration of the surrounding travertine area, a tourist attraction. Kobi Asphalt Plant Small asphalt producer but a major polluter in the area because it uses old exact ownership, order of magnitude of the tires as fuel, resulting in a thick black plume spreading over Truso Valley operation and scope for environmental whenever the plant is operating. improvements should be further explored during project implementation.

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2.5 Projects Related to the Project or Study Area During the implementation of the project, attention should be paid to lessons learnt during the following projects that have recently been implemented, or are being implemented, in Georgia. Some of these projects are relevant to the Kazbegi Municipality, others because they address similar issues as faced by stakeholders in the Municipal- ity.

· Sustainable Management of the Biodiversity in Protected Areas and Forests, South Caucasus: GTZ (in collaboration with various partners), 2008-2016, EUR several millions (BMZ). Various activities in support of sustainable biodiversity management in pilot regions in Georgia, Armenia and Azerbaijan, including certification, support to processing and market chain development for wild products. Support to environmental code development in Georgia. · Delivering protected area capacity and engaging traditional pastoral communities to conserve Georgia’s unique and internationally important biodiversity in the Re- public of Georgia, Khaketi region: NGO NACRES (in collaboration with FFI), 7/2009-12/2011, EUR 1.1M (EC). Various measures to address human-wildlife conflict, large carnivore conservation and overgrazing. Capacity building and advocacy. · Sustainable Development of Mountain Regions of the Caucasus – Local Agenda 21: REC Caucasus, since 2004, total EUR 1M (BMU). Development and implementation of Local Agendas 21 for eight model regions of the Caucasus, including Khevsureti (bordering Kazbegi). · 2012 Caucasus Protected Areas Project: WWF Caucasus, 2007-2011, USD 1.2 Mio (MAVA Foundation). Establishment and support to national Coordination Comittees on CBD PoW PA, PA establishment, biodiversity monitoring in PA, training and capacity building. · Catalyzing Financial Sustainability of Georgia’s Protected Area System: Imple- mentation tender pending, 2010-2013, USD 875K (UNDP). Development of financial planning and business planning methods, piloting of innovative financing methods in selected PA in the Greater Caucasus. · Halting the Loss of Biodiversity in the Southern Caucasus - Regional implementation of the Countdown 2010 initiative (and follow-up project): IUCN POSC (in collaboration with various partners), 9/2007 – 12/2009, ca EUR 365K total, (Norwe- gian Foreign Ministry). PA system development, support to biodiversity monitoring, promotion of ecotourism, improved implementation of PA-related international conventions. · Rural Tourism Development Project: ELKANA, CHF 694K, 2006-2008 (SDC). Hospitality management trainings, certification, PR, development of websites, trail marking, familiarization trips. · Rural Tourism Development Project (Employment and Infrastructure Initiative): USAID (in collaboration with DoTR and ELKANA), 1/2007-9/2009, USD 300K (USAID). Renovation of guesthouses, training, certification.

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· Strengthening local capacity and developing structured dialogue and partnerships for mitigating natural disasters and reducing poverty in Georgia: CENN, EUR 200K, 02/2009-02/2011 (EU). Includes Kazbegi Municipality. Local capacity development and communication facilitation for disaster mitigation, study of link between disaster risk management and poverty reduction. · Promoting Sustainable Forest Management in the Support/Buffer zone of Mtirala National Park: NGO Mta-Bari, 07/2008 – 07/2009, USD 95K (CEPF Caucasus). Designation of a National Park Support Zone based on Georgian spatial planning law, in collaboration with three Municipality municipalities, management plan development, PR. · Facilitating Stakeholder Participation in Protected Areas of Georgia: IUCN POSC (in cooperation with APA), 03/2009-08/2010, ca. USD 70K (Eurasia Partnership Foundation Georgia). Development of PA Advisory Boards, Friends’ Associa- tions, Junior Ranger Programmes as participation mechanisms, stakeholder trainings. · Market-oriented sustainable tourism development in Protected Areas of Georgia: Georgian Tourism Association (in cooperation with APA), 03-12/2009, ca. USD 60K (Eurasia Partnership Foundation Georgia). Development of signposting, tourism infrastructure and promotional materials for PAs, training for tourism stakeholders from around PAs.

In addition to the projects listed above, there have been a number of PA establishment and management planning projects in Georgia and its neighbouring countries recently. Others are still ongoing. The lessons learned during the projects for the establishment of Lake Arpi National Park (Armenia) and Javakheti National Park (Georgia), as well as the ongoing establishment of Zaqatala Biosphere Reserve, which are all funded by KfW, should be taken into account during project implementation, and full use should be made of the Transboundary Joint Secretariat as a mechanism for communication and coordination of these activities.

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3. PROBLEM ANALYSIS AND PROJECT JUSTIFICATION 3.1 Key Problems The key problems hindering a sustainable development of the project region can be distinguished as follows: (i) ecological/ environmental aspects and (ii) socio-economic aspects:

3.1.1 Threats on the environment and the high and unique biodiversity (1) Uncontrolled grazing. The sheet- and channel erosion marking the steep slopes lining the Tergi River watershed and feeder-streams is caused by excessive livestock activity in the past. Due to the reduced herd size after the closing of the Zemo Larsi Border and the subsequent breakaway of former winter ranges (which is the limiting factor for livestock in the region), livestock currently does not exceed the economic carrying capacity. The extensive land use is closely linked to the traditionally common use of pastures, which needs to be secured in the frame of future land use planning and land registration processes. Nonetheless, uncontrolled livestock grazing threatens the internationally red listed Betula raddeana Trautv. populations and adversely affects 50-90% of the population of Tetrao mlokosiewiczi (trigger bird species), severity as well as site based vulnerability are ranked medium. The severity of the threat on the identified mammal trigger species Prometheomys schaposchnikowi and Sicista kazbgica is ranked low.

(2) Poaching. Hunting and trapping is the one of the main threat affecting more than 90% of the populations of Capra cylindricornis, Rupicapra rubicapra and Ursus arctos (identified trigger mammal species). The severity of the threat and the site based vulnerability of the above mentioned populations is ranked high. As poaching is also carried out by hunters from outside (even heli-hunting), it is independent from population trends.

(3) Logging and uncontrolled extraction of NTFP. Past overexploitation of forests and land alienation resulted in a high fragmentation of forests, adversely affecting the ecological integrity and resilience, especially. E.g. this accounts for the ecosystems of birch forests, which contain the globally and regionally red listed species Betula raddeana Trautv. Regarding the community of Hippopha• rhamnoides L. (sea buckthorn) along Tergi river, which is used for home consumption and sale, sustainable use must be ensured and cutting prohibited. It is also necessary to take into account that Myri- caria alopecuroides Sehrenk., a species rare in the Caucasus and occurring only in the Kazbegi region, occurs in these communities. Uncontrolled extraction of plants (fuelwood extraction should not play a role in the extractions since the use of gas for heating and cooking is heavily subsidised) are identified as threats affecting 50-90% of the populations of Carpodacus rubicilla, Phoenicu- rus erythrogaster, Crex crex (trigger bird species) and more than 90% of the population of Ursus arctos (trigger mammal species). The severity of the threat and the site based vulnerability of the above mentioned populations are both ranked high.

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(4) Uncontrolled waste disposal, littered river basins and lower watersheds adversely effecting related wetland ecosystems. The waste problem is caused by a lack of effective waste collection and treatment chains, especially during the winter season, when the access to the region is limited and by a generally low level of environmental awareness. On the one hand, the waste problem will develop further with increasing tourist visits and overnight stays and the predicted re-opening of the Russian border. On the other hand, it hinders sustainable tourism development, which is closely linked to nature and landscape beauty.

(5) Lack of adequate water management. The absence of sewage treatment facilities results in the contamination of river and feeder streams, adversely effecting wet meadows and wetland ecosystems that are spread on both sides of the river Tergi. This especially accounts for the meadows near the village Kobi, which contain e.g. the following rare endemic species: Gladiolus caucasicus Herb. and Ligularia subsagittata Po- jark. (Caucasus endemics); as well as not very widespread Parnassia palustris L., Iris caucasica Steven in Bieb. subsp. caucasica (a Caucasus endemic), Ranunculus baida- rae Rupr. (a Caucasus endemic). In addition the low level of awareness of the problem and the lack of watershed protection causes localized erosion.

(6) Uncontrolled tourism activities. The lack of a coordinated and sustainable tourism development strategy results in uncontrolled/ undirected recreation activities (heli- skiing, hiking and camping in key habitats or near water sources), adversely effecting the habitats of endangered species.

Underlying reasons (1) Lack of environmental awareness and integration of local population into nature protection. Lack of environmental awareness and missing incentives for the local population to support nature protection, resulting in careless dealings with nature and environment (garbage, sewage, etc.). Top down approach, lack of co-management structures and missing empowerment efforts by the Government hinder the development of stewardship of local population for nature protection. Misinformation and mistrust characterizing the cooperation between Government Agencies/ APA, local Gov- ernment and the local population adversely affect conservation efforts.

(2) Lack of mainstream nature protection into land use management. No defined support zone of PA resulting in unregulated/ uncontrolled land- and resource use adjacent to existing NP. Lack of sustainable tourism development strategy, adversely affecting habitats of protected/ endangered species (e.g. heli-skiing). Lack of sustainable waste and sewage management, adversely effecting the ecosystem (see above).

(3) Insufficient ecosystem representation. Kazbegi predominantly consists of high mountain ecosystems which are currently under-represented in the Georgian PA sys-

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(4) NP ecologically not viable. The Kazbegi National Park, originally established to protect the remaining forest fragments scattered throughout the lower Tergi River watershed and side valleys, is in urgent need of re-definition. The NP is not viable in view of size and fragmentation, resulting in management/ protection constraints, subsequently not supporting the integrity of the ecosystems.

(5) NP is non-functional, due to lack of funding, infrastructure, equipment and capacity of NP personnel, resulting in insufficient management/ protection and lost opportunities regarding sustainable traditional resource use and tourism development.

(6) Lack of capacity. Relevant personnel does not dispose of methodology/ capacity to introduce co-management and to valorise goods and services from PA and ecosystems, hereby missing the opportunity in proving tangible and intangible benefits of nature protection to the population on local and national level and in generating additional sources of funding.

3.1.2 Barriers and problems related to sustainable economic development (1) Absence of registered land titles, unrecognized traditional land tenure system by Government. Absence of registered land titles is due to both, failure of Government to promote/ conclude the land registration process and the unwillingness of parts of the local population to get involved in land negotiations (see chapter 2.3.3), resulting in growing conflicts and controversies between authorities and local people. Apart from limited access to loans, the absence of land titles paves the way for increasing land speculation, destabilizing local livelihoods and threatening conservation efforts.

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(2) Limited potential for agricultural expansion. Agricultural production is limited to potato growing due to the harsh climate conditions and poor soils. Livestock is con- strained by the limited availability of winter pasture due to climate conditions and the brake away of winter pastures in Russia. Subsequently livestock density partly remains below the carrying capacity of available summer range.

(3) Brucellosis and other diseases, related to the lack of Government veterinary service result in marketing problems of dairy products and reduce development potential of this sector.

(4) Poor market access for local products, originating from the geographic isolation, the temporary inaccessibility of the Region (snow, landslides, avalanches) and the poor road conditions, limits the potentials for income generation. Strategies or cooperatives to overcome related obstacles in regard of transport, storage, marketing etc. are not in place.

(5) Poor social services and infrastructure. Poor social services and infrastructure, e.g. in regard of waste management and sewage treatment, adversely effect tourism development and conservation efforts (see above) and cause growing local dissatisfac- tion with authorities. Another serious problem in the villages of the region consists in high taxation of electricity and frequent power outage (electricity meters are not installed, damages of electric cables are frequent during summer period, costs for repair- ing the system are covered by local inhabitants).

(6) Lack of job opportunities and economic alternatives in the target area, is related to the limited potential for agricultural expansion and poor market access. The low level of entrepreneurship in the region is related to the limited access to loans, as most rural families do not dispose of formal land titles (chapter 2.3.3). This leads to a high dependence on subsistence agriculture.

Underlying reasons (1) Dwindling population and work force and rapidly aging population. Rapidly aging population and migration processes (brain drain) seriously constrain the development potential of the region, as young people are leaving their communities in search for a better life elsewhere. There are currently no strategies or government programmes in place to stabilize migration processes. The assumption that a declining population results in diminishing pressure on biodiversity is false, as above described threats on the environment, as e.g. poaching, are also caused by foreighners.

(2) Climate Conditions. Poor soils, high snowfall area and long/ harsh winters with solid snow cover constrain the agricultural production and transportation of local products. Frequent landslides and avalanches in the target area pose a permanent threat to

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(3) Geographic Isolation. Accessibility is especially difficult in Winter, due to climate conditions.

(4) Limited development support in the region. Government investment preference is given to economically more promising areas, resulting in poor social services and infrastructure. Due to the low population size, Kazbegi Region is not a priority area for donors. Hence there has been little support to overcome socio-economic and environmental constraints though projects/ programmes. Subsequently to the geographic isolation, the poor infrastructure and low economic development potential Kazbegi Region is of low interest by investors.

(5) The historical distrust of local people in authority, the Government and the strong resentment of APA with a low standing in the target area, poses a challenge to any donor project related to nature protection in the region. This is compounded by local peoples’ open distrust in outside influences, not having been used to donor projects of any significance in the past.

(6) Long tradition of communal land- and resource use. Animal husbandry and hunting is a historical traditional way of making use of natural resources, resulting in strong opposition of local population towards any outside restrictions.

3.2 Anticipated Threats Further threats adversely effecting biodiversity and sustainable livelihoods of the local population regard the future development of the region. · · Zemo Larsi Border Crossing. The Zemo Larsi Boarder was only re-opened on 1st March 2010, so that the resulting effects could not be analysed in the frame of this study. However it can be assumed that the opening for transit will result in increasing traffic and road-side trade with correspondent social and ecological impacts. The potential improvement of the Military Highway is likely to further increase tourism and trade, presumably causing more waste and putting higher pressure on natural resources. (for further details refer to chapter 2.2.4). · · Abandonment of traditional pasture and sale of land. Unsecured land titles, the lack of job opportunities for the younger generations and the subsequent process of migration and over aging entail the abandonment of traditional pasture and sale of land. While too low intensity of pasture will change the vegetation cover from presently rare and valuable mountain grass steppe into shrub land, this scenario also bears the danger of increasing land speculation, followed by uncontrolled land- and resource use.

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Increase/ intensification of land- and resource use. In a long term perspective, the opening of the border for local traffic and the re-opening of the Vladikavkaz market might result in the increase of pasture (taking into account increasing demand/ market prices for lamb, as observed in 2009), if former winter ranges could simultaneously be re-established. A higher pasture intensity would negatively impact on vegetation cover and increase erosion and elimination of rare species. On a long-term, the potential future opening towards the north might be followed by the repopulation of the area and increasing land- and resource use pressure. In view of the long lifespan and the aspired sustainability of a protected area, the above mentioned resulting threats to biodiversity conservation should be taken into account, even though the probability of this scenario has not been analysed, as it beyond the scope of the feasibility study.

3.3 Expected Project Impacts In consideration of the above described problem analysis the proposed project aims at the following (1) environmental, (2) socio-economic and (3) structural impacts:

3.3.1 Expected ecological/ environmental impacts

Table 9: Summary of key problems and ecological impacts

Key problems How addressed by proposed project interventions

(1) Uncontrolled grazing. Expanding protected area system in size and number of areas. Preparation and implementation of policy and management guidelines for envisaged PAs;

Proposed participatory integrated spatial land use plan and support zone development plan, addressing forest fragments and identified KBA areas outside proposed PAs;

Preparation and implementation of policy and management guidelines regarding erosion-prone slopes, elaborating slope sensitivity map.

(2) Poaching Expanding protected area system in size and number of areas. Preparation and implementation of policy and management guidelines for envisaged PAs (e.g. sea buckthorn community);

Proposed participatory integrated spatial land use plan and support zone development plan, addressing forest fragments and identified KBA areas outside proposed PAs;

Development of community ranger system resulting in enhanced control;

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Establishing community-based hunting cooperative (peer pressure/ control).

(3) Uncontrolled extrac- Expanding protected area system in size and number of areas. tion of wood and NTFP Preparation and implementation of policy and management guidelines for envisaged PAs (e.g. sea buckthorn community).

Proposed participatory integrated spatial land use plan and support zone development plan, addressing forest fragments and identified KBA areas outside proposed PAs;

Development of policies and management guidelines for each forest fragment; development of enforcement strategy.

(4) Uncontrolled waste Assistance to local Government in elaboration and implementation of disposal. waste disposal strategy/ plan;

Environmental education-awareness building; Capacity development.

(5) Lack of adequate Policies and guidelines to be developed (support zone plan and water management integrated spatial land use plan) and mainstreamed into all interventions dealing with land use;

Environmental education-awareness building; Capacity development.

(6) Uncontrolled tourism Policies and guidelines to be developed (support zone plan and integrated spatial land use plan) and mainstreamed into all interventions dealing with land use;

Contribute to the development of sustainable tourism strategy;

Underlying reasons How addressed by proposed project interventions

(1) Lack of environmental Elaborate and implement well targeted information-and awareness awareness and integration of local population campaign; into nature protection Support co-management efforts and changes in legislation accordingly; contribution to changes in APA top-down culture/ approach;

Participatory multi-stakeholder planning and implementation of PA management plan.

Highly participatory land-and resource use planning (integrated spatial land use plan and support zone development plan).

(2) Lack of mainstream- Proposed zoning of target area includes official designation of NP ing nature protection into

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Highly participatory land-and resource use planning (integrated spatial land use plan and support zone development plan);

Policies and guidelines to be developed (support zone plan and integrated spatial land use plan) and mainstreamed into all interventions dealing with land use (waste-, sewage- and watershed management, sustainable tourism strategy, etc.);

(3) Insufficient ecosystem Expanding protected area system in size and number of areas. representation Preparation and implementation of policy and management guidelines for envisaged PAs (e.g. sea buckthorn community)

Proposed participatory integrated spatial land use plan and support zone development plan, addressing forest fragments and identified KBA areas outside proposed PAs;

(4) Existing NP Proposed consolidation of fragmented areas and expansion of ecologically not viable existing NP and establishment of support zone.

(5) National Park non- Participatory elaboration and implementation of NP management-/ functional business plan, and support zone economic development plan;

Proposed capacity development of NP personnel;

Proposed infrastructure development and meeting equipment needs of NP;

Controlled resource use;

Enhancement of tourism.

(5) Insufficient ecosystem Expansion of NP, establishment of support zone and creation of new representation by PAs in PAs covering identified key biodiversity/ecosystem “hotspots”. target area

(6) Lack of capacity Integral part of proposed management-/business plan related to PAs and the support zone development plan.

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3.3.2 Expected socio-economic impacts

Table 10: Summary of key problems and socio-economic impacts

Key problems How addressed by proposed project interventions

(1) Absence of registered Information and awareness raising in order to overcome land titles, unrecognized unwillingness of local communities to get involved in land registration traditional land tenure initiatives; system by Government Support land registration process in order to provide access to loans and to secure land tenure against outside interventions and large scale commercial use of resources.

(2) Limited potential for Underlying reason related to climate conditions and limited agricultural expansion availability of suitable land cannot be addressed.

Enhancement of potato growing and higher value cash crops

(3) Brucellosis and other Development and implementation of Brucellosis campaign diseases;

(4) Poor market access Creation of producer group and communal marketing; addressing for local products value chain (central communally owned outlet of products in Tblissi)

(5) Poor social services Not addressed and infrastructure.

(6) Lack of job Enhancement of value chain of livestock sector, dairy production; opportunities and niche products and support to enhancing tourism industry; economic alternatives in Enhancing and supporting interest groups and cooperatives; with the target area special focus on creation of job opportunities for women.

Underlying reasons How addressed by proposed project interventions

(1) Dwindling population Enhancement of rural economy (as described above) and work force and rapidly aging population

(2) Climate Conditions, Underlying reason related to climate conditions and limited availability of suitable land cannot be addressed.

(3) Geographic Isolation Not directly addressed by project;

Support to providing snow-ploughing and heavy equipment to deal with land-slides as part of support zone program;

Border opening may result in better road maintenance improving

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access to capital and providing new market in Russia.

(4) Limited development Support to Government through integrated special land use support in the region planning, support zone development and mainstreaming of nature conservation into all interventions dealing with land use (waste-, sewage- and watershed management, sustainable tourism strategy, etc.).

Demonstrate donor involvement through implementation of German- funded proposed project;

Improve conditions and framework for sustainable private sector involvement.

(5) Distrust of local Improve APA’s local image by facilitating communication and people in authority, the cooperation efforts between APA, local authorities and local Government and the population; strong resentment of Support co-management efforts and changes in legislation APA accordingly; contribution to changes in APA top-down culture/ approach.

(6) Long tradition of Environmental education-awareness building; Capacity communal land- and development; resource use. Highly participatory land-and resource use planning (integrated spatial land use plan and support zone development plan).

3.3.3 Structural impacts

· Development of capacities for effective biodiversity conservation on all levels: improve conditions for effective biodiversity conservation and sustainable development through adjustment of national level policies (introduction of co- management structures); develop models of conservation and sustainable use of natural resources on the ground that could be transferred to other parts of the region. · Information, participation, transparent decision making processes create trust and accountability between APA, local government and local population; increasing environmental awareness, responsibility and ownership through involvement of the local population in protection measures (co-management), reducing the threats of outside negative influence. · Support to land title registration process, creation of farmers associations/ community based organizations and generation of job opportunities for younger generation contributes to stabilization of the population and prevents the risk of land speculation/ sale of land and related external impacts.

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3.4 Project Justification The relevance of the proposed project corresponds to Georgia’s biodiversity conservation obligations in the framework of international agreements, their national policy aims environmental protection and poverty reduction as well as the goals of the Ger- man Government for Development Cooperation (please refer to chapter 2.3).

The outstanding conservation value of the Kazbegi Planning Area is demonstrated by the wide range of international and national red listed species and critical plant ecological units that occur in the Kazbegi Municipality (for details please refer to chapters 2.2 and 3.1 and related annexes). It is further highlighted by the following facts: · Kazbegi forms an important part of the Khevi-Tusheti Priority Conservation Area of the Ecoregional Conservation Plan for the Caucasus. · Kazbegi has been designated in 2009 as Important Bird Area by “BirdLife” Inter- national and flagged as an Important Plant Area by “PlantLife 2009” (the site is in- ferred to contain 5% or more of the national population of the globally and regionally threatened species Betula raddeana Trautv.) · The importance of Kazbegi for conservation at the ecoregional level has been highlighted in the Message from Gudauri (IUCN 2006). · Kazbegi predominantly consists of high mountain ecosystems which are currently under-represented in the Georgian PA system (2.49% PA coverage for high mountain ecosystems, versus 7.6% average coverage for all ecosystems) · There are several sites and objects of particular conservation interest in the region, which have been short-listed for the designation of Natural Monuments by the APA. · Kazbegi has exceptional symbolic value as part of the natural heritage of Georgia (Kikodze and Gokhelashvili 2007).

Nonetheless, the existence and further development of conservation areas of outstanding biodiversity value in the target area is not systematically addressed in previous zoning attempts by APA. Therefore a Gap Analysis for the identification of Key Biodiversity Areas taken both flora and fauna into consideration has been performed within the current feasibility study in close cooperation with Georgia’s Academy of Sci- ences and the Tbilisi State University leading to the proposed zoning described in the following Chapters.

Against this background and assuming that the over-arching objective of German Bilat- eral Aid regarding the target area is the consolidation of nature conservation and sustainable economic development, the proposed project provides a unique opportunity (and enabling framework conditions) to assist Georgia in complying with its obligation under the CBD by adding/ strengthening an ecologically viable protected area of an ecosystem currently under-represented in Georgia’s PA system to the country’s protected area system.

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Significance of the proposed project. Considering the country’s past low capability and capacity in an effective nature protection in the target area, it is highly unlikely that this situation would change without current donor interest. This would result in a continuing gap within the existing country’s PA system by not having an important ecosystem (composed of sub-alpine/ alpine grassland tundra and an already highly fragmented relict forest) sufficiently represented by Georgia’s PA system. Therefore the donor funding would be of critical importance to solve the current impasse. At the same time the project would assist in creating an enabling environment by supporting the local population in stabilizing livelihoods and changing their attitude towards the environment, nature protection and authorities.

The Government of Georgia has shown a specific interest in protection of rare and valuable landscapes and vegetation societies with the establishment of APA as an institution with the task of establishing and managing protected areas and the establishment of National Parks in other areas. APA can thus be trusted to support and implement a project for establishment of an enlarged protected area in Kazbegi effectively. However, required capacity is lacking and mistrust is constraining the relationship to the local communities.

The local population recognizes the value of their exceptional landscape and vegetation. Due to the age-long habit in common land-use and their tradition on self- organization, there is a good potential for active participation of the population in improving their livelihoods and for the creation of community based organizations or associations. Provided, that the current mistrust between the local population and the government/ APA can be overcome, the local population can be expected to actively contribute to nature protection under a suitable project design.

For the project to become successful and sustainable it is of utmost importance to pro- foundly address the recognized problems by designing and implementing measures to mitigate the risks inherent to the problems. This applies in particular to a well planned and executed information and environmental awareness campaign, a grassroots oriented participatory planning approach aimed at conservation and sustainable economic development, and the strengthening of APA’s image in the region by involving APA in all steps of the participatory planning and by assisting APA in the design and implementation of a co-management administrative structure that would empower local communities to be a partner in decision-making processes related to the protected areas and support zone.

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4. PROPOSED PROJECT 4.1 Project Overview

Key problems High nature- and biodiversity value of the region is threatened by uncontrolled land- and resource use (grazing, poaching, extraction of fire wood and NTFP, tourism activities, waste and sewage disposal) due to non- functional/ not viable National Park, insufficient of mainstream of nature protection into land use planning and management; missing environmental awareness and integration of local population into nature protection, lack of capacity and cooperation. At the same time, the local population is suffer- ing from low living standard, due to limited agricultural expansion potential, poor market access, missing economic alternatives, lack of social services and infrastructure and absence of land titles which would provide access to loans. Expected 1. Protected Area Regime is established and operational results 2. Eco-Tourism is established in the region 3. Livelihood stabilization is supported 4. Regional development and stakeholder institutions are supported Project area 108,977 ha, Stephantsminda Municipality Dimension of 25,000 ha composed of an Eastern and Western section proposed NP Additional PA 3,185 ha composed of three priority conservation areas that are characterized by Sea-buckthorn, Mt. Kaberjini Cliffs and Ghudo Gorge. Population and Declining rural population (3,000 people) with a low per capita income and socioeconomic little prospects of an economic recovery due to a significant lack of eco- characteristics nomic opportunities. Over half of the population are women. There are only little employment opportunities, and if mainly in the tourism industry. Total costs EUR 4.769,039 Duration 5 years Grant Recipient Ministry of Finance Executing Ministry of Environment Protection and Natural Resources of Georgia agencies (MEPNR) Implementing Agency for Protected Areas (APA) agencies Risks Low or no acceptance of project concept by the local population due to lack of empowerment caused by continued top-down approach Mitigation (a) Capacity development for APA with regard to empowerment/ participa- measures tive interaction with the local population, (b) support to establishment of co- management structures and equal representation of the local communities on a multi-stakeholder Advisory Board, (c) support to APA as Implementing Agency through an international consulting team (Project Administration Office)

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4.2 Overall Goal and Objectives The overall Goal of the bilateral aid agreement and the proposed project is the consolidation of sustainable economic development and biodiversity conservation in the Kaz- begi Municipality.

The Terms of Reference for the feasibility study specify: “…the challenge is to develop concepts which can demonstrate – in the long run - that harmony between the conservation of biodiversity and cultural goods and socio- economic development is possible. The FS has to develop a project concept considering both aspects, i.e. the efficient conservation of protected areas and the socio- economic development of the families, living in and around the areas. Due to the current situation in the region, the concept shall be highly participative. The success of both the study and of the project depends to a large extent on the willingness of local people to join in the project idea and relevant activities.

4.3 Options for Meeting Overall Goals and Objectives The study identified 3 possible options for organisational and legal arrangements to meet the overall goal and objectives for sustainable protection of biodiversity and socio-economic development of the region at the same time in a participatory approach. They are (i) the establishment of a Biosphere Reserve, (ii) strengthening and expansion of the existing National Park and (iii) declaration of a World Heritage Site. The latter is not regarded as an alternative by the team, but as an addition to the first two options. The major points of the two options are highlighted and in the following compared in a SWOT Analysis. A final votum of the consultant team highlights the preferred option. A detailed analysis and description of options and implications is repro- duced in Annex 2.1.

4.3.1 Option Biosphere Reserve. The concept of a biosphere reserve fosters biodiversity conservation to be mainstreamed into the sustainable economic development of rural areas with a high dependency on natural resources. Such areas are generally characterized by unsustainable and poorly controlled land and resource use threatening the ecological integrity of existing core areas of biodiversity conservation and the environment at large. The biosphere reserve concept focuses on people and their needs to be embedded in a sustainable environment.

Feasibility

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· Zoning: Narrow valleys flanked by extremely steep slopes and a continuum of use in a vertical transition not suited for any zoning as mandatory for a biosphere reserve. Insignificant threats to the ecologically most valuable areas of the region (i.e., high mountain grassland ecosystems) not requiring special protection through the establishment of a buffer zone as stipulated by the biosphere stat- utes, hence no reason for the establishment of a “buffer zone” and for imposing restrictions on areas not being used as implicit in the term “Buffer zone”; · Local Support: Open hostility of local people to the concept of a biosphere reserve compounding resentment against the existing National Park which needs to be enhanced to make it ecologically viable with or without a biosphere reserve; very poor commitment by local authorities to the concept; · Organizational arrangements: Cooperation of Administration with other governmental organizations, NGOs, private sector etc. for the management of BR, should be happening regularly, but not “in exceptional cases,” as stated by the Georgian Law on PAS (Article 18, paragraph 4). Permanent mechanisms and structures to allow broad participation of all stakeholders in BR management and development required.

4.3.2 Option National Park and Support Zone. This option entails strengthening and substantially expanding the existing Kazbegi Na- tional Park to be converted into an ecologically viable conservation area protecting rare high mountain forests and shrublands. Strengthening the existing park is of cardinal importance with or without the establishment of a biosphere reserve. New to the pro-

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP III Draft Report Feasibility Study Kazbegi 70 posed second option (national park and support zone) is the designation, establishment and well targeted economic development of the park’s support zone. The establishment of a national park support zone is a legal requirement specified by Georgia’s Law on Protected Areas.

All 25 communities located in the Tergi River catchment area would form part of the NP support zone. Major advantages of a NP and support zone over the biosphere reserve concept include:

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needed. Co-management would be much less complex and cover both, the NP and support zone.

4.3.3 Comparative SWOT Analysis Table 11 summarizes and compares the strengths (S), weaknesses (W), opportunities (O) and threats (T) associated with both, the establishment of a UNESCO Biosphere Reserve and strengthening of the National Park/ establishment of Support Zone in Kazbegi District.

There is sometimes confusion regarding the subject of SWOT analyses and the difference between strengths and opportunities or weaknesses and threats, respectively. In accordance with modern SWOT methodology, this analysis refers to a defined objective. Strengths and weaknesses are defined as inherent qualities of the general approach, the specific idea of establishing a BR/ NP+SZ in Kazbegi District, and the clus- ter of institutions promoting this specific idea. Opportunities and threats are defined as factors that are external to the approach, the specific idea and the specific actors but nevertheless affect the likelihood of reaching the objective.

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Table 11: Comparative SWOT analysis regarding the feasibility, the added value and the added costs of both options Biosphere Reserve25 National Park (NP) + Support Zone (SZ) 1. FEASIBILITY S · Functions: Criteria 1-4 clearly be met by the planning area · Organizational arrangements: Kazbegi National Park as a legally (representative mosaic of ecological systems; conservation established protected area already exists. More emphasis on people, significance; allows to explore approaches to regional sustainable effectively empowering park neighbours by involving them in development; appropriate size) decision-making processes related to the park and support zone. · Zoning: (Criterion 5) existing NP would qualify as a BR “core area”. · Political support: Well recognized, widely accepted and one of the The inner Tergi Valley and parts of its side valleys are under most popular protected area categories in Georgia and globally. agricultural use and therefore could constitute an “outer transition · Local support: Although never fully accepted, the Kazbegi area” (within limitations) communities are used to the existence of a NP. The concept is · Political support: BR concept appears attractive to the Ministry easier to understand and to be accepted. because it allows for economic development and community · Guidance and technical input: NP+SZ concept has successfully participation. General intention of the Department of Environmental been promoted and implemented in Georgia since 1993 (Borjomi Policy and International Relations to establish BRs in Georgia but Kharagauli National Park with financial assistance of KfW 1995- not part of any written policy. 2009; first successful co-management model National Park Mtirala). · Local support: Depending on what uses are permitted in the “buffer Existing planning and management guidelines/ ample evidence from zone” of a potential BR, application of the concept might fuel the Georgia and internationally for effective socio-economic anxieties of the local population. development measures in a NP SZ. · Guidance and technical input to BR establishment by TJS, experience from Azerbaijan. Applicability of TJS participatory PA management planning guidelines W · Zoning (Criterion 5, re-enforced by the Madrid Action Plan 2008): · Organizational arrangements: No special law or management plan difficult/ impracticable to establish a “buffer zone”, and to impose the has been adopted or approved yet related to Kazbegi National Park. corresponding land use restrictions. Due to declining population, Although the Kazbegi National Park is currently administered pressures on the environment are low making the establishment of a centrally by APA, an expanded park and well planned support zone

25 Referring to Statuatoory Framework of the UNESCO MAB Programme

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“buffer zone” redundant requires a co-management structure which requires ministerial · Organizational arrangements (criterion 6): less emphasis on cooperation as a relatively new governance model to Georgia involvement and empowerment of local people in decision-making processes related to the “core zone”. Cooperation of Administration with other governmental organizations, NGOs, private sector etc. for the management of BR, should be happening regularly, but not “in exceptional cases,” as stated by the Georgian Law on PAS (Article 18, paragraph 4). Permanent mechanisms and structures to allow broad participation of all stakeholders in BR management and development required. · Political support: BRs are unknown to Georgia and substantially less popular globally. The designation of BRs is of low interrest within NBSAP of Georgia (2005)/ and not included in Georgian National Environmental Action Plan (2000), in the Ecoregional Coservation Plan for the Caucasus (2006), the Caucasus Biodiversity Council, or the IUCN Message of Gudauri (2006) · Local support: Communities strongly defend traditional land use. An artificially imposed “buffer zone” applied to land considered communal and/ or traditional private property would be outright rejected. Local population are apprehensive towards an untested, unknown biosphere reserve. · Guidance: there are no prescriptions for participatory planning approaches, management plans, economic development plans etc. for biosphere reserves provided by UNESCO or any other available documents. O · Zoning: gradation of land use with altitude could possibly better be accommodated using modern integrated spatial land use planning approaches aiming at the sustainable management of existing land use patterns. · Organizational Arrangements: Coordination Council as a pure inter-institutional communication mechanism for the development of the zone

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around the NP (which in case of a BR would be the development zone) might have a positive impact as a catalyst of a better integration of the NP in its surrounding landscape. · Political support: APA has the prime objective to support the sustainable and biodiversity-friendly development of Kazbegi District and was open to the option of a BR if donor funding was conditional on using the BR approach. Representatives of Governor of Mtskheta-Mtianeti Region expressed their willingness to support a project on sustainable development and biodiversity conservation in the Kazbegi District and emphasized the need to provide clear information about the consequences of the project to the local population. Conservation stakeholders outside the Ministry (e.g. WWF Caucasus, IUCN South Caucasus Office and Georgian IUCN Member Organizations, representatives of Tbilisi State University and the Institute of Botany at the Georgian Academy of Sciences) assigned potential benefits but no particular priority to the establishment of BRs. O · Donor interest in testing the BR concept in Georgia · Local Support/ Integration of objectives: Easy integration and · Political support: -Awareness among government agencies of the harmonization of resource use in support zone and NP. The NP need for improved stakeholder participation and mutual integration of could include a “traditional use zone” encompassing existing grazing development and conservation. areas, and in accordance with the Georgian PA law, would be · Local support: If the option of establishing a BR is chosen, the relatively acceptable to local stakeholders. terminology used in public communications should be adapted to avoid the term “Reserve”, which is misleading to most Georgians (an alternative might be “Biosphere Park”, or “Biosphere District”) T · Organizational Arrangements: requirements may lead to costly duplications, overlapping jurisdiction and/ or conflicts with existing state institutions. It needs to be ensured that the Coordination Council or similar setup would not be perceived as an artificial construct by national partners, and/or financially unsustainable beyond the project lifespan. · Political support: BR needs strong political support because it would require a costly and innovative institutional setup and significant adjustments to the institutional and legal framework in Georgia. Limited capacity of Georgian institutions for effective inter- institutional cooperation threatens integrative setup of BR.

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T · Functions: regional sustainable development limited by decreasing population and work force. The Kazbegi population has shrunk by half within the past five years (from 6000 in 2005 to less than 3000 in 2009) meanwhile displaying a very unfavourable age class distribution in favor of persons above 60 years of age (one third of the current population and increasing). · Organizational Arrangements: in the Kazbegi District neither a biosphere reserve nor a national park would be accepted by the local population without community empowerment to be substantiated through active involvement in decision making processes related to the conservation units. · Political/ local support: Considerable opposition among both local Government and parts of the local population against the establishment of a new or the extension of an existing PA; lack of trust to central government. Centralization in Georgian PA system threatens implementation of co-management aspects. But there is strong interest in jointly exploring new ways of boosting sustainable development. · Possibility of political tensions in the vicinity of the separatist area of South Ossetia 2. ADDED VALUE S · Integration of objectives: Inclusiveness of BR concept (integration · Socio-economic development: Tourism sector has significant of conservation, sustainable development and education/science). development potential in the District, and tourism development is BR approach explicitly includes outer transition / development zone consistent with NP/ Support Zone format. International best practice in setup and management of the BR – generally strong basis for examples from managing remote wilderness areas with high tourism promoting sustainable development. development potential as NPs with Support Zone. · Socio-economic development: Tourism development potential of · Science and education: Almost all current National Parks, and Kazbegi District. Foreseen Larsi border opening may improve many other PAs in Georgia successfully support demonstration development potential of District (opportunity conditional on border projects (examples see discussion). Many of these projects deal not opening) only with activites within the NPs but also with sustainable natural resource use and related activities around them. · Integration of objectives: The SZ promotes an even closer relationship between the “core zone” and people living in its neighbourhood than a biosphere reserve. NP in accordance with IUCN guidelines permit sustainable traditional resource use in designated (traditional use) zones inside a NP. · Empowerment: The participatory planning of a NP + SZ allows local stakeholders to formulate land- and resource use policies adapted to

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their lifestyle and local conditions fostering development of ownership.

W · Biodiversity conservation: Limited added value of BR concept as a biodiversity conservation tool for this specific region (due to zoning requirements, population development and acceptance). BR concept is included in the Georgian PA law in a mislelading way (see above), and the FS has observed misconceptions among Georgian stakeholders about BRs as a type of protected area. · Socio-economic development: the application of the BR zoning pattern to Kazbegi might threaten rather than support the historically grown spatial integrity of land use and ecosystem functioning in the District. · Science and education: No additional advantages/ funds available for science and education in the frame of UNESCO MAB programme · Integration of objectives: there are no prescriptions for participatory planning approaches, management plans, economic development plans etc. for BR provided by UNESCO or any other available documents; MAB Programme methodological guidance to achieve integration of BR functions as promised in the Seville Strategy has either not been delivered or is not accessible. · WNBR membership: UNESCO label for a BR is of questionable value in a country where UNESCO’s profile is very low. On a local level, the UNESCO label would be of no consequence. Small size and limited global popularity of the BR network. No evidence that BRs attract more funding then Protected Areas. O · WNBR membership: World Network of Biosphere Reserves might · Empowerment: Potential application of the bottom-up Mtirala Model be of added value because of (1) the status of international of NP Support Zone designation would empower Local authorities recognition that it would convey, and (2) the opportunities for (designation by Municipality under Georgian Spatial Planning Law).

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horizontal learning and exchange of experience that could arise from membership in the global network. BR may contribute to the general attractiveness of the area to tourists. O · Biodiversity conservation: Given the fact that the planning and management of biodiversity conservation in the core and buffer zones of a future Kazbegi BR would have to rely on existing IUCN PA and TJS National Park methodologies, i.e. the same methodologies that are used for PAs, there is no added conservation value in applying the BR concept. However, a BR managed according to IUCN or TJS Guidelines would also not be any worse than any IUCN Category PA. · Socio-economic development: Both BR and PAs (if seen including their support zones) can provide a basis for conducting measures aimed at sustainable socio-economic development, but it depends on the quality of the measures themselves whether the desired development impact is realized. There is huge added value in high-quality development measures, but less added value of conducting them within a BR “outer transition zone” rather than, for instance, a National Park support zone. · Integration of objectives:Participative land use planning, co-management and/ or community management would indeed support the integration of BR functions. Benefits of strong participation of local communities in planning, decision making and implementation are not limited to a BR but equally apply to PAs; there has been a convergence of participation approaches of BRs and NPs since the 1980s, and there is now a considerable body of best practice approaches. This does not exclude the possibility that the introduction of stronger co-management formats to Georgian practice would be easier within the framework of a new planning format (e.g. BR) then as an amendment to the already widely practiced PA management approaches. T 3. ADDED COSTS S · Institutional Setup: Cooperation with existing structures, as well as the facilitation of dialogue and joint participatory decision making among them. Existing experience with the establishment of NP support zones in Georgia (Borjomi-Kharagauli NP and Mtirala NP). · Framework Adjustments: Although Georgia’s Law on Protected Areas is in urgent need of review it provides a strong legal basis for a national park/support zone. · Running Costs: smaller mono-functional administration structures associated with alternative arrangements

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W · Institutional Setup: Less cost-effective (overlap, frictional losses, costs associated with the introduction and testing of an untried approach). BR Administration would have clear management responsibility for the NP/PA, but at the same time have to fulfill several support roles for the overall BR. Coordination Council would be costly (establishment, operation and sustainability beyond the initial project lifespan). National MAB Committee of Georgia and UNESCO Chair on Biosphere Reserves at the Georgian State Agrarian University weak/ not involved in the recent initiative for the establishment of a BR at all. Lack of support from UNESCO MAB Programme to Georgian MAB Committee. · Framework Adjustments: Existing weak and vague legal framework for a BR. Law on the System of Protected Areas considers and treats BR as a type of protected area. No Transition Area, where sustainable resource management practices can be promoted and developed, is included in BR zones according to the Law on the System of Protected Areas (instead, “Restoration Zone” and “Traditional-Cultural Landscape Zone”). · Georgian legislation does not include provisions concerning procedures for nomination of selected area as BR, neither it specifies who “approves” selected area as a BR after the area is designated for inclusion in the Network by the International Coordinating Council (ICC) of the MAB program or responsibility for periodic reporting to UNESCO or it’s ICC of the MAB programme and review of the status of biosphere reserves.. · Running Costs of a BR Administration, combined with the Coordination Council, would be higher simply because a multi- functional administration would need more staff

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W · Framework Adjustments: Irrespective of whether a BR or alternative arrangements are chosen for the sustainable development and biodiversity conservation of the Kazbegi District, the need to strengthen participation mechanisms and to apply modern co-management and possibly community management approaches to the project area means that adjustments to the legal and institutional framework of conservation and sustainable development will be necessary. O · Institutional Setup: Coordination Council designed as a pure · Institutional Setup: Leaner administrative setup that would at the communication body for existing institutions and stakeholders, same time be more compatible with existing structures. E.g. the nature conservation objective as prime responsibility of one or several PAs located within the planning area, whereas the responsibility for sustainable development measures could remain with local self-government or the responsible Line Ministries. Necessary coordination and dialogue could be supported through various mechanisms, without superimposing a BR Coordination Council. Funds could be concentrated on process facilitation and on specific mono-functional authorities, such as PA Administration(s). T · Institutional Setup: Coordination Council might lead to a duplication of responsibilities and to a perceived loss of control of local Government. 4. ADDITIONAL CONSIDERATIONS T Attempt to establish a BR in Kazbegi, where the concept appears to be partly unsuitable, might discredit the concept for the establishment of BR in more suitable areas in Georgia

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4.3.4 Consultants Votum

The advantages of the option “national park and support zone” compared to the option “biosphere reserve” are apparent. There appears to be no added value of any kind to be offered through a biosphere reserve concept except for its international registration with UNESCO (no monetary nor other tangible benefits are offered by UNESCO for biosphere reserves). The UNESCO label for a biosphere reserve is of questionable value in a country where UNESCO’s profile is very low. On a local level, the UNESCO label would be of no consequence.

It is argued that one of the key obstacles for the successful establishment of a biosphere reserve would be its mandatory zoning concept which simply would not be acceptable to local people.

On the other hand, communities appear more open-minded, although still sceptical, regarding the participatory planning of a support zone as part of a national park. The option national park and support zone therefore appears the more suitable alternative also fully meeting the overall goals and objectives of German bilateral aid for the region: “harmonizing biodiversity conservation and sustainable regional economic development for the benefit of the local people”.

In due consideration of all pros and cons of the local applicapility and feasibility of a biosphere reserve concept vs. a national park-support zone model, the Consultant Votum is therefore in favour of a strengthened and expanded national park and a well planned support zone involving all stakeholders guided by sustainable economic development objectives for the benefit of the local population.

4.4 Project Area 4.4.1 Definition of Target Area The definition of the target area to be covered by the feasibility study was guided by the following ecological and other criteria. · Conforming to the favoured option of Georgia’s new Ministry of Regional Devel- opment it appeared logical and ecologically sensible to include the entire water catchment area of the upper Tergi River watershed and tributaries. The boundary of the planning area therefore follows the water divide and ridgeline of the High Caucasus covering all of the upper Tergi River micro-watersheds and catchment areas located to the west, south and east of the planning area, bordering Russia to the north (see Figure 6 “Planning Area by former Sakrebulos”). · The primary ecological reasons for the definition of the planning area have been the occurrence and distribution of selected trigger species (flora and fauna) typifying this eco-regional unit (Figure 7 Flora and Fauna) and its critical importance

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to rare and nationally endangered plant associations, habitat of numerous endemic and unique species. Based on the occurrence of these trigger species “Key Biodiversity Areas” have been identified in order to set priorities for biodiversity protection (chapter 4.4.4.1). The identified Key Biodiversity Areas, as well as remaining and valuable forest fragments are distributed all over the Municipality. · The selected boundary of the proposed planning area happens to coincide with the Municipality boundary of Stepantsminda including all of the former Sakrebu- los Goristsikhe, Kobi-Gudauri, Sioni, Sno and Stepantsminda, which still form the basis for claims on land and local affiliation. The proposed integrated spatial land use planning needs to regard the existing administrative structures and management responsibilities, in order to be sustainable, functioning and accepted by the local stakeholders and decision makers. The complete Municipality is defined as “planning area”, so as to address the identified key biodiversity areas and forest fragments with specific management guidelines, to create coherent activities regarding the economic development, to support cooperation among local actors and the development of regional identity.

4.4.2 Inclusion of Gudauri Socio economic aspects. Gudauri is part of the Kazbegi Municipality and substantial part of the Municipality’s property tax income originates from there. Thus in view of Gudauri’s economic importance providing over 50% to the Stepantsminda municipal budget, it is evident that without the Gudauri revenue the municipality could not function. A major part of family incomes in Kazbegi Municipality, and not only residents in Gudauri but also of seasonal workers living in other parts of the Municipality, are earned in Gudauri. There is a strong social links between Gudauri and the rest of the Municipality.

Ecological aspects. Considering ecological aspects and biodiversity conservation, the question whether to include Gudauri or not appeared to be redundant considering the large and scattered land distribution of the Kobi-Gudauri Sakrebulo which covers all of the Truso Valley and the major part of the upper Tergi River water catchment area. For ecological reasons it is therefore essential to include the Sakrebulo Gudauri in the planning area.

Legal aspects. Gudauri is regulated by the President’s Decree N 968 (dated 29 November 2005), that is specifying the coordinates of the territory of Gudauri, which is considered as recreation and resort area. The fact that recreation and tourism development are of priority in the designated area does not exclude the possibility do establish a a protected area, like sanctuary, as long as it can be combined with the recreation purpose.

Constraints. The Study Team identified as possible problem fields the fact that only a small proportion of the Municipality population permanently resides in Gudauri and that

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP III Draft Report Feasibility Study Kazbegi 82 it is located in a separate watershed, with slightly different environmental and climatic conditions. The fact that Gudauri operates for the time being as a kind of ski resort, separate from the other villages is considered to be threat and opportunity at the same time. There is a chance to apply modern and appropriate land use planning techniques where they are urgently needed and a development momentum spill over to other parts of the Municipality on one side with the threat that Gudauri continues to develop separate from the rest of the Municipality.

Conclusion. In spite of these problems to be expected with the inclusion of Gudauri in the project area, the study team proposes to include the Gudauri in the project area for the following reasons: · to secure the sustainability, acceptance and effectiveness of the proposed integrated spatial land use planning and the implementation of related measures, based on existing administrative structures · to ensure that the regions environmental and biodiversity protection is all of a piece, specifically addressing the key biodiversity areas and valuable forest fragments located in Gudauri · to strengthen the income sources, which have a positive effect throughout Kaz- begi; · to support sustainable tourism development of Gudauri, combining both aspects recreation and environment/ biodiversity protection · to support the cooperation of stakeholders.

The results of a SWOT analysis investigating the advantages and disadvantages by including Gudauri in the overall planning area are attached as Annex 3.1.

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Figure 6: Planning Area by former Sakrebulo

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Figure 7: Flora and Fauna

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4.4.3 Current delineation of Kazbegi National Park and Expansion Proposal The current delineation of Kazbegi National Park is not based on a systematic site prioritization process, but the result of a somewhat erratic history: In 1976, the Dedtoraki and Khde Strict Protected Areas (SPA), which had existed since 1946, were joined into the Kazbegi SPA and extended by addition of forested patches, to a total area of 3,481 ha. This was again extended to 8,707 ha in 1987 (Chikovani et al. 1990). The result was a mosaic of many isolated forest patches with little connectivity between them. In 2007, the SPA was re-designated as a National Park without further changes to its boundaries.

In 2008, a proposal for its extension was elaborated by the Commission for the expansion of Kazbegi National Park at the APA. The expansion plans have been halted pending the FS for the prospective Kazbegi Biosphere Reserve. A detailed description of the expansion proposal is provided in “TJS Activity Plan on Biosphere Reserves 2009”. The proposal foresees an expansion of the National Park to > 70,000 ha, not- withstanding management and financing requirements and regardless of livelihoods of the rural population and local acceptance. The planned expansion is based on expert opinion but not documented methodology, incorporating several Natural Monuments and other areas, such as Khde, Truso, Resi, Desi, Tepi, Tsotsolta, Gimara, Suatisi, Mna, Ganisi and Sno gorges, precipices and their adjacent areas as well as the Military Road environs. The selected sites are certainly of natural, cultural and aesthetic value, but do not necessarily address biodiversity hotspots.

It should be noted that the above history refers to the delineation of the area on paper. It appears that the SPA and National Park were never fully enforced in reality.

4.4.4 Methodology for the Re-delineation and Zoning The current FS and the planned establishment of a BR or similar arrangement present an opportunity to re-delineate and zone the planning area, based on a rational integrated spatial planning methodology that takes into account conservation value, land tenure and actual land use. This process needs to be driven by the Sakrebulo and Gamgeoba of Stephantsminda Municipality, in collaboration with APA and the donor.

The FS suggests the following methodology for the re-delineation and zoning process (Figure 8): 1) Mapping of Key Biodiversity Areas, using a GIS-based international best practice methodology (Langhammer et al. 2008). 2) Mapping of land tenure, based on data from official sources (Gamgeoba, NAPA) and available information from previous donor funded projects (e.g. USAID- APLR).

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3) Participatory mapping of actual land use based on village visits by the FS Team. This is particularly important as traditional and actual land use (and tenure) in Kazbegi is not always reflected by official tenure data. 4) Overlaying of layers 1-3 and identification of conflict areas. Elaboration of a draft zonation and delineation procedure for further discussion. 5) Recommendation for conflict resolutions.

Figure 8: Proposed approach to Zoning Key Land Tenure Actual Biodiversity Land Use and Areas NR Use

Overlay of maps Identification of conflict zones DRAFT zonation recommendation, minimizig conflict

Recommendation of procedures for solving conflicts

4.4.4.1 Setting Site-based Conservation Priorities In order to identify areas most in need of conservation efforts and to arrive at the most effective and cost-efficient allocation of protected areas within the Kazbegi District, the IUCN method for the identification of “Key Biodiversity Areas” (known as “KBA Method”) was used (Annex 3.2). The KBA method is practical, easy to use, feasible and recommended for the prioritization of conservation areas in undisturbed natural settings. It is described in detail in the IUCN KBA Guidelines (Langhammer et al. 2007). The KBA delineation process suggests the exclusion of areas that have been converted to human use (e.g. urban areas, agricultural areas and transportation corri- dors). It provides the basis for the presented preliminary zoning proposal and the proposed integrated spatial land use planning process, however the final delineation of boundaries needs to be discussed in the frame of the intended participatory planning process in order to reduce conflicts and to ensure realistic management of the site for conservation.

Methodology. The KBA identification process uses two criteria: vulnerability and irreplaceability. Vulnerability is measured based on the occurrence of species that are listed in either national Red Books or the IUCN Red List of Threatened Species in the planning area. Irreplaceability is assessed based on either the proportion of the distri-

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP III Draft Report Feasibility Study Kazbegi 87 bution area of species covered by the planning area or the proportion of individuals of the global population living in the planning area. Only species are used as KBA trigger species which exceed a pre-defined threshold of vulnerability and irreplaceability. Crite- ria and thresholds for KBA trigger species are summarized in Annex 3.2.

Once the KBA trigger species are identified for a given planning area, their vulnerability in the planning area to various defined threats is scored based on “severity”, “immedi- acy” and “scope”, to yield an impact score. The threat with the highest impact score, whether to the site, or to trigger species if individually assessed, is taken as the impact score for the site/ species, and used to calculate a vulnerability score for the site as a whole. Finally, a conservation priority score can be calculated and mapped for each grid square within the planning area.

For this feasibility study a KBA per trigger species within the Kazbegi Municipality based on both the national and international Red Lists were identified (cf. Sections 2.2.3 - 2.2.5). The KBA trigger mammal species in the Kazbegi Municipality are: · Eastern Tur (Capra Cylindricornis; nationally vulernable) · Chamois (Rupicapra Rupicapra; nationally endangered) · Brown Bear (Ursus arctos; nationally endangered) · Long-clawed Mole-vole (Prometheomys schaposchnikowi; nationally vulnerable) · Kazbegi Birch Mouse (Sicista kazbegica; globally endangered, nationally vulnerable)

The KBA trigger bird species are · Caucasian Black Grouse (Tetrao Mlokosiewiczi; nationally vulnerable, Caucasus endemic) · Caucasian Snowcock (Tetraogallus caucasicus; Caucasus endemic) · Giant Rose Finch (Carpodacus rubicilla; nationally vulnerable) · White-winged Redstart (Phoenicurus erythogaster; nationally vulnerable) · Corncrake (Cex crex).

Apart from these species, prominent cliffs used as nesting/ roosting sites for Bearded Vulture (Gypaetus barbatus – nationally vulnerable), Griffon Vulture (Gyps fulvus– nationally vulnerable), Egyptian Vulture (Neophron percnopterus– globally endangered), Golden Eagle (Aquila chrysaetos – nationally vulnerable – cf. Section 2.2.5) were included. The KBAs of the trigger species were overlaid and their conservation priority scores summed and converted to a scale of 0-1 to derive the final maps of global and national conservation priority scores for Kazbegi Municipality.

Kazbegi Municipality contains the endangered riparian forest predominated by Sea- buckthorn (Hippophae rhamnoides) on the River Tergi, and provides food and cover for many passerines and small mammals, including threatened and restricted-range species. This habitat also provides cover for Otter (Lutra lutra). Other types of forests

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Forest cover in Kazbegi Municipality is small (4% of the Municipality) but harbors a high diversity of species (incl. endemics), and provides timber and other building material, fuel, soil fertility as well as protection from landslides, avalanches, flash floods and sediment load. Forest cover is the basis for the existing Kazbegi Nature Reserve (IUCN category I). According to expert advice specifically requested for this study, most of endemic plants and other high conservation value plants found in Kazbegi Municipality grow in forests, mountain steppes and wetlands (see Section 2.2.5 and its annexes). Thus, a top conservation priority was assigned to Sea-buckthorn cover, other forest types and wetlands.

This procedure yielded a conservation priority map for the entire Kazbegi Municipality which was used to inform the re-zoning proposal and additional designation/ re- designation recommendations for protected areas (Figure 9 Proposed Conservation Areas).

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Figure 9: Proposed Conservation Areas

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4.4.4.2 Minimum Critical Size of a Viable Kazbegi National Park The much needed expansion of Kazbegi National Park to a total of at least 25,000 ha, composed of an eastern and western section encompassing samples of all ecosystems found in the study area, is expected to meet the minimum critical size requirements of a typical mixed High Caucasus grassland-shrubland-forest ecosystem. This is based on the following arguments.

An area of 25,000 ha (equals approximately 22% of the planning area or 17% after deduction of the area covered by glaciers respectively) of a stand-alone, typically large- scale ecosystem is expected to provide viability to the majority of its animal populations with densities of 1 individual per 10 ha or denser, which is enough for most larger herbivores as well as the medium-size predatory mammals (fox size). This should be enough for the survival of most animal and plant species as well as plant associations typifying the target area26. This may still not provide minimum area requirements for species with larger home ranges such as wolf, brown bear, eagles and vultures.

Under less favourable conditions, fewer species may maintain their population at a viable level. It should be emphasised, however, that if this targeted ecosystem size was set aside for the sustainable protection of the last remaining populations of the larger mammals, it would be grossly undersized and inadequate. That, however, is not the case in the planning area. The proposed Kazbegi National Park is meant as a building block of an interlinked protected area system, which only in its combined composition maximises both species diversity and survival durability of all species, including the ones that require large territories. If the proposed Kazbegi eastern and western sections can be connected with equal sized similar ecosystems on the other side of the international border, the overall size of the combined conservation area could be reduced, still safeguarding the level of species-specific genetic variability within viable populations while meeting minimum critical size requirements for a conservation unit such as a national park.

4.4.4.3 Land Tenure Map According to the centralized land registry (cadastre) an estimated 80% of all households of the Stepantsminda planning area don’t have a legal land title (Chapter 2.3.3). The available land title map for the target area therefore does not reflect the true land tenure pattern. As explained in Chapter 3.5.3 it was hoped that the land title map would be one of the three key map layers to be used for the identification of potential conflict areas between conservation goals and actual land use/ land tenure interests. The very few land titles currently registered and the remaining 80% unregistered plots all represent residential properties within communities. All of them are located adjacent to the flood-plain of the Tergi River and in the Sno Valley, none interfering with proposed conservation areas.

26 These criteria need reconsideration for areas with migrating ungulates, but not applicable to the High Caucasus.

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4.4.4.4 Actual Land Use Map Agriculture. Actual land use in the target area was assessed through participatory mapping by the FS team jointly with community members of each of the 25 communities located in the planning area as part of the village profiling process (see Figure 10 “Actual Land Use by Sakrebulo”). The information provided by the communities refers to areas (polygones) used by each village for livestock grazing and hay making only. Although each village has designated agricultural land, agricultural plots are small- sized and all located within village bounds. Agricultural land is divided into family plots mostly used for cultivation of subsistence crops such as potatoes. The results obtained from the participatory actual land use mapping appears more reliable than information available from official statistics which are mostly outdated.

It is noteworthy that land polygons of Sakrebulos located outside the main Sakrebulo area are not used at all. This applies in particular to the Stepantsminda and Sioni Sak- rebulos. In the overall, the actual land use for livestock and hay-making is surprisingly low reflecting the sparsely settled target area, decreasing human population and the low number of livestock (see Figure 10).

Natural Resource Use. Private sector interests in Kazbegi Municipality regard the extraction of sand gravel, diabaz, andesite, and the extractions of fresh water (botteling). Due to Department of Natural Resources Licensing, eight licenses have been issued for the target area (see Table 12), though non interfering with the proposed conservation areas. In view of the lifespan of some of the licenses of up-to 25 years and possible (re)activation, potential adverse effects – also in view of processing and transportation - should be taken into account in the frame of the land use planning process.

Table 12: Resources use licenses issued for Kazbegi Municipality. (Source: Min- istry of Economic Development of Georgia, Department of Natural Re- sources Licensing. Date: October 2009). ID Description Company Term Quantity Area Extraction of sand-gravel from 05.06.98 5 mln 800 000 m 1 “Kobi” deposit (Kazbegi Ltd `Sharagza~ 17.08.98 32 ha 22 000 m3 Municipality) 20 Years Study-extraction of “Djuti” 19.07.1994 2 diabaz boulder area (Kazbegi Ltd `kentavri~ 28.04.1998 1400m3 293,07 ha Municipality) 20 Years Extraction of “Devdoraki” Privat person 14.03.08 20 Total extraction 3 Diabaz (for revtment) (Kazbegi Gogi 2,63 ha Years 9626 m3 Municipality, Village Gveleti) Alibegashvili Extraction of andesite Privat person 09.10.08 Total extraction 4 (Kazbegi Municipality, Village Aleksandre 1,06 ha 20 Years 127200 m3 Oqrokana) Gabrichidze Extraction (bottling) of fresh Privat person 21.01.09 5 water from “Fansheti #5 bore Konstantine 10 m3/per day 0,07 ha 25 Years (Kazbegi Municipality, Iakobishvili

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Adjacent area of Village Fansheti) Extraction (bottling) of fresh Privat person water #1 and #2 (Kazbegi 21.01.09 6 Konstantine 130 m3/per day 0,14 ha Municipality, Adjacent area of 25 Years Iakobishvili Village Ukhati) The River Tergi sand-gravel Privat person extraction (Kazbegi 15.04.09 5 Total extraction 7 Konstantine 1,3 ha Municipality, Adjacent area of Years 39000 m3 Iakobishvili Village Achkhoti and Kobi) `Arshas~ Extraction of Andesiti Ltd (boulder area) (Kazbegi 28.12.2007 20 Total extraction 8 `Saqartvelos 4,36 ha Municipality, Adjacent area of Years 152000 m3 samxedro gza~ Village Gaiboteni)

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Figure 10: Actual Land Use by Sakrebulo

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4.4.4.5 Potential Conflict Areas The superimposed map layers “Actual Land Use” (Figure 10) and “Proposed Conserva- tion Areas” (Map 9) provide the information needed on potential conflict areas (Figure 11 “Land Use and Proposed Conservation Areas”).

As shown by Figure 11, no visible land use conflicts exist in the proposed Eastern Sec- tion of the Kazbegi National Park. Several potential conflict areas resulting from overlapping livestock grazing/ haying areas and conservation interests, are recognizable for the western section of the proposed Kazbegi National Park, primarily located along the tentative southern boundary. Several of the identified potential conflict areas can be avoided by simple elimination of the areas from the national park (boundary adjustment). Others can be incorporated as part of a traditional use zone to be established inside the national park, thus accommodating controlled traditional grazing and hay- making. The proposed tentative boundaries of the national park will be subject to the participatory planning process related to the national park and support zone. This process involves all communities of the support zone as major stakeholders. It will be left to the discretion of the communities to decide on mutually acceptable national park boundaries, resulting in a best compromise between conservation and local land use interests.

Although the proposed Mt. Kaberjini conservation area does not show visible conflict areas at this point, the area entails several currently inactive stone quarry concessions which may be re-activated in the future with unknown impacts on the conservation objectives for the area. Re-activation of the quarries in question should therefore become subject to a prior environmental impact assessment, a stipulation to be incorporated into the management policies applied to this conservation unit.

The identified potential conflict area of the Ghudo Gorge conservation area can be eliminated through boundary adjustment.

The only real potential conflict areas are the two Sea-buckthorn conservation units located in the Tergi River floodplain. Cooperation by local people is essential in the sustainable protection of these two highly accessible areas currently used for livestock grazing (without adverse impacts on the buckthorn thickets) and artisanal utilization of buckthorn fruit. As long as the Sea-buckthorn shrubs are not physically being de- stroyed (very unlikely inside an active floodplain) this critical bird habitat will be safe.

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Figure 11: Actual Land Use and Proposed Conservation Areas

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4.4.5 Proposed Zoning of Target Area 4.4.5.1 Proposed Planning Area All Sakrebulo sections of land currently not actively utilized (16,359 ha) and all land without designated ownership (except for the glaciated northern areas to form part of the national park) are included in the designated planning area of 108,977 ha covering the entire Stepantsminda Municipality. This planning area will be subject to integrated spatial land use planning (ISLUP) as part of the proposed project.

A size comparison of the proposed zones shows that less than 25% of the total planning area is allocated to conservation in form of protected areas. The National Park constitutes approximately 22% of which approximately 5% are composed of glaciers. The proposed Hunting Cooperative constitutes 23% and the Support Zone of the Na- tional Park approximately 37% of the planning area.

Table 13: Size Comparison of the Proposed Zones of Planning Area Proposed Zones of the Kazbegi Planning Area Ha % of Total Proposed Area status (IUCN) Total Planning Area (Stepantsminda Munici- 108,977 100 pality) Proposed Conservation Areas (Total 27,544 ha = 25%) 1) Proposed National Park Total 24,340 22 Eastern Section 7,550 II Western Section 16,790 2) Buckthorn Area A 110 0,1 III or IV 3) Buckthorn Area B 130 0,1 III or IV 4) Kaberjini Cliffs 549 0,5 III or IV 5) Ghudo Gorge 2,415 2 III or IV Support Zone 40,250 37 Community-based Hunting Cooperative 24,910 23 Remaining Planning Area 16,359 15

4.4.5.2 Proposed Conservation Areas Based on the identification of Key Biodiversity Areas (KBA results) and the calculation of minimum critical size requirements for a National Park in the target area the following conservation areas are proposed. It should be understood that the boundaries of the proposed conservation areas are tentative, to be adjusted to site-specific requirements. The tentative boundaries of the proposed conservation areas have to be discussed/ negotiated with local stakeholders and communities as part of the proposed participatory planning process for the national park and support zone that will include local communities who have to agree to the boundaries.

While APA suggests an expansion of the National Park of up to 75% of the planning area, with questionable consequences in terms of management, compatibility with rural

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP III Draft Report Feasibility Study Kazbegi 97 livelihoods and local acceptance, the Consultant recommends a different approach: combining both objectives of the project: nature- and biodiversity conservation and sustainable development and the improvement of local livelihoods.

The combined total of the proposed five identified conservation areas for the planning region amounts to approximately 25% (22% National Park and 2,7% proposed sanctuaries), covering the identified KBAs. In regard of APAs question on the representation of Rupicapra rupicapra and Tetrao molkosiewizi in the conservation priority map and the resulting zoning proposal, it has to be stated that the identified trigger species are of different global importance (due to their vulnerability and irreparability scores) and therefore influence the conservation map differently.

At the same time, the establishment of a support zone, comprising 37% of the planning area, will allow sustainable development and livelihood improvement. The integrated participatory spatial land use planning process will allow to address forest fragments and some other fragmented areas of higher conservation value outside the conservation areas with specific management arrangements.

i) National Park The existing Kazbegi National Park does not meet minimum critical size requirements for the targeted ecosystems to be protected by a national park. It insufficiently covers important ecosystems of the area which are currently under-represented by Georgia’s protected area system.

All factors considered, it is suggested that the proposed expansion of the national park would best result in two sections separated by the Tergi River, each covering some of the highest biodiversity areas identified for the Kazbegi Region.

The proposed eastern section would be converted into one single consolidated unit excluding some of the isolated forest fragments without physical connection between them, which should be de-classified. The eastern section will share a common boundary with the support zone and ecological corridor of the Zapovednik Erzi and Zakaznk Ingushsky located on the other side of the international border (see Figure 12). The total size of the Eastern Section would be 7,550 ha.

The western section, with 16,790 ha over twice the size of the eastern section, encompasses highly diverse habitats extending from the valley bottom of the Tergi River watershed to the Glaciers bordering Russia to the north. This section includes several key micro-watersheds originating from the glaciers and steeply walled canyons covered by unique plant associations formed by the diverse micro-climates typical for the highly dissected terrain. It is hoped that the western section will eventually be amalgamated with the ecological corridor and a newly to-be created protected area on the other side of the international border which would place the entire glaciated mountain area of the Kazbegi region under protection. A protected area to be created on the other side of

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP III Draft Report Feasibility Study Kazbegi 98 the international border, jointly with the proposed western section of the Kazbegi Na- tional Park would create one single contiguous conservation area of formidable size, protecting vital winter and summer ranges of key herbivores located on both sides of the international boundary (see Figure 12).

Figure 12: Protected Areas on the Russian side bordering Kazbegi

ii) Other proposed Conservation Areas Based on the ecological gap analysis four other key areas of high biodiversity importance have been identified.

Buckthorn Areas A & B. Two of the areas are located in the floodplain of the Tergi River to the north and south of Stepantsminda. Both areas are characterized by plant communities dominated by Sea-buckthorn a vital winter range for the Greater Cauca- sus satellite populations of Great Rosefinch (Carpodacus rubicilla) and Güldenstädt’s Redstart (Phoenicurus erythrogaster). The only known wintering habitat of both species in Georgia are the designated areas which are therefore not only of national but also of ecoregional (global) importance. The combined total size of both areas is less than 250 ha. Special habitat protection measures are essential for the long-term survival of the two red-listed bird species. Pasture and sustainable use of sea-buckthorn may continue, though destruction of shrubs, conversion to agricultural or building land must be excluded. The most suitable protection category in accordance with Georgia’s Law on Protected Areas still has to be determined, although it is suggested that the equivalent of an IUCN category III area would be most appropriate.

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Kaberjini Cliffs. Another area identified primarily as critical nesting habitat of colony- breeding vultures and a perching area of prominent raptors are the Mt. Kaberjini Cliffs located to the south of the Tergi River between the Truso and Sno Valley. The total area to be protected would be approximately 500 ha (see Map 3..5.3.1). Due to the high global and national conservation value and vulnerability, an equivalent to IUCN category I or the inclusion of in to the NP (IUCN category II) would be appropriate.

Ghudo Gorge. The Ghudo Gorge has been flagged as an area of key biodiversity importance mainly because of its highly diverse ecosystems harbouring a large species diversity in habitats formed by unique micro-climates in a very differentiated landscape. This area of high conservation importance (2,415 ha) would also be most suitable as an IUCN category III protected area, being too small to qualify for a national park but being in need of a relatively strict protection, while at the same time visitation and recreation is often encouraged,. This area would not tolerate commercial resource extraction, hunting or any settlements.

4.4.5.3 Proposed Support Zone of Kazbegi National Park The proposed Kazbegi National Park Support Zone includes all 25 communities of the five Sakrebulos of the designated Tergi watershed planning area. The former Sakrebu- los Stepantsminda, Goristsikhe and Sioni contribute significant sections of their territory to the proposed protected areas, whereas the former Sakrebulos of Sno and Kobi- Gudauri only border the to-be expanded Kazbegi National Park. According to available information the larger part of the Ghudo Gorge proposed conservation area is unregistered land not forming part of a Sakrebulo as required by Georgia’s legislation. This also applies to the northern, mostly glaciated section of the planning area which borders Russia not being assigned to a Sakrebulo. The total size of the Support Zone would be approximately 40,000 ha.

Isolated forest fragments as well as further areas of higher global conservation value, that are located outside the NP should become subject to special policies and regulations to be elaborated jointly with local stakeholders as part of the NP support zone. The corresponding enforcement would become the responsibility of Environment Pro- tection Inspectorate Rangers and future Community Rangers (to be involved in the frame of co-management, Chapter 3.5.3.5).

4.4.5.4 Proposed Community-Based Hunting Cooperative The Kazbegi Planning Area offers a unique opportunity for the establishment of a hunting concession, an option discussed during the feasibility study with the Ministry’s Bio- diversity Protection Division as the responsible agency for hunting concessions in Georgia. Past plans for the re-establishment of hunting concessions in the target area never materialized mostly due to legal problems related to red-listed key animal species targeted for hunting.

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Hunting concessions in Georgia’s past have been mostly affiliated with one single concessionaire, a model not suitable for the Kazbegi planning area where hunting has been a highly traditional and well respected pastime embedded in the local culture. Traditional local hunters appear to be very knowledgeable about local wildlife and nature in general, respectful of biological cycles of key species hunted, and ethics related to hunting methods and treatment of wild animals. There is great local resentment of hunters illegally entering the area to shoot wildlife rather indiscriminately with little consideration given to hunting seasons and closures. This applies in particular to weekend hunters from Tbilisi frequently arriving by helicopter to access remote high elevation areas to rather indiscriminately shoot even red-listed trophy animals and other wildlife irrespective of rules and regulations.

Ecoregional Nature Conservation Plan, TJS Protected Areas and Rangeland Manage- ment Planning in the South Caucasus (2008) as well as German policy for biodiversity conservation recommend the establishment of Co-Management structures for effective wildlife conservation. Though such arrangements are not yet in place in Georgian legislation, the following documents provide a basis for necessary adjustments which are to be promoted in the frame of the project: · The Georgian Law for wildlife as well as the Law for Licensing gives priority to local population · The National Biodiversity Strategy and Action Plan defines the development of a concept of traditional hunting (and subsequent additions to legislation) as required activity to meet Strategic Goal D “To promote sustainable hunting and fishing through adequate planning, restoration and protection of key biological resources” in order to meet the 2010 Target 9.2 and the CDB Articles 8, 10 and 11.

Against this background the proposed model for the establishment of a community- based hunting cooperative should be seen as a process.

The MEPNR has expressed its support to promote the issue of Co-Management. On local level, the potential structure of the cooperative, membership, functions and responsibilities and the management implications for a designated hunting block and its wildlife have been discussed with local hunters from the Kazbegi communities. The generally positive response to this innovative model for a co-managed hunting block suggests to advance the idea for the benefit of local hunters and wildlife.

Obvious advantages of a community-based hunting model are: · Involvement of local people in a highly traditional pastime; · Reduced conflicts though legalizing hunting in the hunting block set aside for the cooperative and legalizing an activity currently officially classified as “poaching”, contributing to the already strong local resentment of the Government and authority;

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· Peer pressure as expected to occur within a cooperative would have a positive effect on hunters and wildlife, ultimately increasing the level of civil obedience and game populations; · Effective protection of the designated hunting block and its resources against illegal intruders; · Reducing highly destructive helicopter hunting; · Potential revenue generation through well controlled and organized trophy hunting as one of the cooperative’s responsibilities; · Organized and well conducted periodic big game species count monitoring population trends and providing the basis for species-specific quota allocation; · Concrete measures for habitat conservation and enhancement; · Potential for international certification of a hunting cooperative (sustainable wildlife management, scientifically assessed hunting quotas and periodic census of game species are a prerequisite for international certification).

The proposed Cooperative Hunting Block with an area of 24,910 ha, covers the entire upper Tergi River watershed (most of the Truso Valley) bordering Russia to the North and Ossetia to the North-West (see Figure 13 “Proposed Zoning”). The Hunting Block would provide protection against upstream expansion of settlements currently threatening the Truso Valley.

4.4.5.5 Limitations resulting from the proposed zoning and targeted mitigation measures The conservation priority areas within the proposed zoning have been identified on the basis of the KBA methodology. So as to reduce the identified threats of these species, future regulations will have to adress (i) hunting/ trapping; (ii) uncontrolled grazing; and (iii) gathering of plants and wood. In regard of a hollistic project approach, further regulations which indirectly affect biodiversity regard (iv) uncontrolled waste disposal and (v) sewage management. Therefore the following limitations/ impacts resulting from the zoning proposal in terms of land and resource use are to be expected:

Table 14: Limitations resulting from the proposed zoning and mitigation measures. Zoning Restrictions Mitigation Measure Expansion and No conversion to agricultural land or Information and participation in enforcement of settlement planning process the existing National Park Limitation of hunting, Awareness building and grazing and extraction of wood and environmental education non-timber forest products strenghening of stewardship though Limitation of recreation and sport co-management and establishment

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activities of traditional use zones

Compensation payments as far as private land is concerned Establishment of No conversion to agricultural land or Information and participation in further settlement planning process Conservation Areas Limitation of hunting, grazing and Awareness building and extraction of wood and non-timber environmental education forest products Compensation payments as far as Limitation of recreation and sport private land is concerned activities in KBAs Support zone No negative impacts Joined elaboration of management guidelines/ land use agreements Some limitations regarding forest (e.g. for forest fragments outside the fragments and areas of high national parks) in the frame of conservation value outside the participatory land use planning protected areas Establishment of Regulation of hunting activities Strengthening of stewardship Hunting Area through co-management Planning Area Regulation of waste disposal and Awareness building and sewage management environmental education

The participatory integrated land use planning and community based management of natural resources are paramount for the sustainable development of the region in order to (1) conserve the specific land scape of Kazbegi Region thereof dependend threatended and/ or endemic species; and to (2) anticipate and regulate land use conflicts resulting from socio-economic activities. This approach is based on the following principles: · Participation, dialogue, negotiation and reconciliation of conflicting interests · Principal of user ownership · Development and institutionalisastion of co-management structures, joint negotiation, definition and fair sharing of management functions, entitlements and responsibilities for the envisaged territories (Protected Areas, Community Hunting Area) · Consideration of local encvironmental knowledge, cultural views and traditional strategies

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Figure 13: Proposed Zoning

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4.5 Proposed Project Approach 4.5.1 Principles and Guidelines for the Application The proposed project approach reflects the TJS Management Guidelines27, acknowledging that those who live with and bear the costs of biodiversity should be the primary beneficiaries of its management and that it is necessary to devolve the authority to manage and benefit from biodiversity to an appropriate representative community institution. Subsequently the proposed project is based on three main project management principles inducing and assuring ownership of the project by the local population: · Participation – From the very beginning of the implementation process, an active involvement in the planning and implementation of the project by the local population has been a ‘conditio sine qua non’. Given the experience of the FS team of being confronted with very much scepticism by villagers, farmers and officials in the region it is absolutely necessary to provide tools for proper participation of the local population. Any approach that may be perceived by the Kazbegi people as top – down bears the risk of project failure because of project rejection. It became clear during the FS that local population demands open and frank discussions. While such demands are on one hand tedious and time consuming, they will on the other hand provide the basis for local ownership. · Transparency – The project management and the implementing must adhere to a strict policy of transparency towards the local population. During the FS it became quite obvious that a deep-seated distrust and low level of confidence in measures undertaken by the central government is immanent. This lack in confidence must be overcome in order to win the ‘hearts and minds’ of the Kazbegi people. An essential pre-requisite to successfully recruit the active cooperation and participation of the target group is the development and application of transparent project han- dling procedures for all project issues. · Empowerment – The decision making process must be in the hands of the local population, while guided by the Consultant and the Implementing Agency. Without empowerment the project will not be able to execute its adopted role as a mediator between nature conservation and regional economic development. Both, implementing agency and Consultant will have to develop and implement decision making processes to delegate the decision making to the regional/ local (village) level and the Co-Management structures which will be established. According to the experience of the FS team, only this will create an atmosphere of trust and confidence, which is a fundamental requirement for the success of the project.

Participation, transparency and empowerment are universally accepted and proven project management principles. The situation in Kazbegi - including politically fragile conditions with the closeness to the Russian border – requires a careful and sensitive approach on behalf of the implementing agency and Consultant. More listening to the Kaz-

27 TJS 2008 Protected Areas and Rangeland management Planning in the South Caucasus – A Review of Current Approaches.

DFS Deutsche Forstservice GmbH • Wittelsbacherstr. 11 • D - 85622 Feldkirchen • Germany Phone + 49 - 89 - 94.00.59-0 • Fax + 49 - 89 - 94.00.59-79 • Email [email protected] • Internet http://www.dfs-online.de GEO - ERP III Draft Report Feasibility Study Kazbegi 105

begi people and less (or better no) dictating will defuse tensions and create an atmosphere within which the region will flourish economically while simultaneously conserve the nature, unique in the world.

For the reasons mentioned above, the project headquarters must be based in Kazbegi. It would also be highly advisable if the implementing agency increased its visibility in the region substantially. The proposed awareness/ information campaign using support groups with membership from the communities, frequent discussions with the elders of the villages and other dignitaries of the region, a permanent presence indicating a real interest in the well-being of the people thus fostering an active exchange of information and opinions (formal and non-formal), need to be initiated and kept not only during the lifetime of the project but beyond. Then and only then, implementing agency and Con- sultant will be in the position to achieve their ambitious goals.

4.6 Logical Framework A summary description of the project objectives, indicators, assumption and activities in form of a logframe is attached as Annex 4.1.

4.7 Selection criteria and procedures for the project components The project interventions have been elaborated and selected according to the following criteria, whereby criteria 8 and 9 especially account for the quick start measures: · Providing a significant contribution to the harmonization of the overall conservation and economic sustainable development objectives inherent to the project · Reflecting urgency of the problem to be resolved; addressing the identified key problems/ underlying reasons · Benefiting as many community members and households as possible with directly touchable and significant impacts; · Targeting specific age groups, being gender conscious and of community importance; · Being suitable for in-kind contributions; · Relating to environmental issues and fitting into overall context of the project; · Being sustainable, especially regarding operation and management costs of the measures. · Quickly to implement, quick positive impacts, low risks · Being highly visible and appreciated (exposure) by community members;

The following decision making matrix shows, to which extend the above mentioned criteria are being addressed by the proposed project components:

Table 15: Selection criteria for project components. Project component Criteria 1 2 3 4 5 6 7 8 9 Protected Area Regime established Legal Framework adjustment ü ü ü Establishment of co-management structures ü ü ü ü ü Kazbegi NP/ SZ Management Plan (PI) ü ü ü ü ü Kazbegi NP/ SZ Business Plan (PI) ü ü ü ü Strengthening of NP administration ü ü ü ü Eco-Tourism Private Guest House Services (QM) ü ü ü ü ü ü ü ü ü Mountain Rescue Service ü ü ü ü ü ü ü Mountain Huts and Shelters ü ü ü ü ü ü ü Marketing of Tourism ü ü ü ü ü ü ü ü ü Livelihood Stabilization Combating Brucella abortus (QM) ü ü ü ü ü ü ü Diary production ü ü ü ü ü ü ü ü Beekeeping ü ü ü ü ü ü ü ü Wool Processing ü ü ü ü ü ü ü Herbs and medical plants ü ü ü ü ü ü ü ü Biogas for greenhouse ü ü ü ü ü ü ü Regional Development/ Mainstreaming of Biodiversity Protection Environmental awareness campaign (PI) ü ü ü ü ü ü ü ü Participatory ILUP (PI) ü ü ü ü ü ü Road accessibility ü ü ü ü ü ü ü Waste Management Campaign (QM) ü ü ü ü ü ü ü ü Hydro Electric Power Plant (QM) ü ü ü ü ü ü ü ü Sewage treatment ü ü ü ü ü ü ü ü Land title registration ü ü ü ü ü ü ü Community based hunting cooperative ü ü ü ü ü ü ü

Not all of the proposed project measures necessarily address all criteria, due to their specific function in the overall project design. The proposed priority interventions (PI), such as the participatory integrated land use planning, or the elaboration of a management and business plan for Kazbegi National Park and the Support Zone, as well as the

adjustment of the legal framework, reflect the urgent need of sustainable NRM to form a basis for the further development, but these measures neither directly create tangible impacts, nor are they visible to community members. In order provide incentives for the local population, the proposed quick start measures (QM) have been selected due to their high visibility, their direct impacts, their suitability for in-kind contributions and their quick realization. Furthermore, measures, that address specific target groups, such as the marginalized inhabitants of Djuta village, which suffer from geographic isolation and limited economic development potential, cannot at the same time benefit “as many households as possible” – and vice versa.

4.8 Proposed Project Components The proposed interventions are based on the findings of the FS and have been discussed with local, regional and national authorities related to the project area. The interventions are designed to reflect the holistic approach adopted by the FS Team to the harmonic and well synchronized integration of biodiversity conservation and sustainable regional economic development. Key to the design of the proposed project will therefore be an achievable and measurable exit strategy applied to the sustainable development of the region and the sustainable protection of viable conservation areas of outstanding ecological value.

The proposed project interventions are targeted at four result areas: 1) Protected Area Regime established and operational 2) Eco-Tourism is established in the region 3) Livelihood stabilization is supported 4) Regional development and stakeholder institutions are supported

A brief summary of the specific activities for each result area will be given in the following chapters. Details for each proposed intervention are attached to Annex 4. Regarding the implementation of the proposed interventions, two types of activities can be distinguished: In regard of the terms of reference for the feasibility study, the following “Quick-start Measures” (QM) to be initiated at the onset of the project have been identified; 1. Tourism development initiatives/ private guest house development 2. Assessing and combating Brucellosis 3. Waste management 4. Village energy supply of Djuta village Some of the proposed Quick-start Measures were identified at the local stakeholder workshop conducted at the onset of the feasibility study in Stepantsminda; others resulted from the village profiling efforts. Primary criteria applied to the selection of the proposed quick-start measures have been: (a) providing a significant contribution to the

harmonization of the overall conservation and economic sustainable development objectives inherent to the project; (b) preparing the basis for an overall successful project with visible and tangible benefits to local people; (c) creating ecologically viable and sustainable conservation areas, and (d) providing immediate benefits to the region and local people to be felt at the household-level. In compliance with the terms of reference for the feasibility study the Quick–start Measures have been the focus of the mid-term report, (Annex 4.2). In consequence of the critical comments of and the discussions with KfW and APA, two of the proposed QSM were declassified for the following reasons. · Waste management: APA expressed high interest in the addressing the waste management problem and therefore proposed to shift the measure to the result area regional development. For further details please refer to chapter 4.8.4.4. · Village energy supply of Djuta village: Prior to implementation this measure requires a further analysis of the costs and benefits. For further details please refer to chapter 4.8.4.5.

In parallel to the Quick-start Measures the following Priority Interventions (PI) have been identified which should be realized in an early stage of the implementation process, as these interventions are considered vital components of the overall project (for details on the proposed activities see Annex 4.2): 1. Environmental information campaign and establishment of support groups 2. Kazbegi national park management plan, business plan and support zone economic development plan 3. Integrated spatial land use planning (profile to be provided by final report) 4. Land title registration

4.8.1 Protected Area Regime is established and operational The proposed interventions of this result area account for both, Option 1: Establishment of a Biosphere Reserve as well as for Option 2: Strengthening of the Existing National Park and Establishing Support Zone. The only exceptions which require specific procedures regard the legal framework adjustments and the institutional set up. During the finalization of this Feasibility Study, the APA and KfW agreed on Option 2 to be the more realistic option to achieve benefits for biodiversity conservation and sustainable development in a medium-term perspective. Hence, the specific components for the legal framework adjustments and the institutional set up of a Biosphere Reserve are attached in Annex 4.5, while requirements for the proposed option of a National Park plus Support Zone are presented in the following.

In any case, Kazbegi National Park requires strengthening, which will be achieved through (i) the proposed re-definition and expansion of the park to be converted into a viable ecological entity of national and global importance; (ii) capacity development of

existing staff, essential infrastructure development and provision of equipment in accordance with the specifications of the management plan and business plan for the park, and most important (iii) establishment of co-management structures and empowerment of community representatives as equal members of the proposed Management Board of the park to be part of the decision-making process.

The proposed integrated spatial land use planning will provide the basis for spatial sub- division of land use polygons, but most importantly through involvement of the local population in land use planning related to the national park and the economic development of the support zone in order to achieve stewardship in natural resource management. In this context a sound cooperation between stakeholders will be of vital importance, this applies in particular to fostering a working relationship to be built on trust between APA and the local Kazbegi population.

4.8.1.1 Legal framework adjusted Rationale. Formal and informal co-management has proven critical in the development of strategies that support livelihoods and conservation initiatives, contributing to social learning and social–ecological resilience at local and regional scales. Because state governments are reluctant to give up authority in resource management to communities, national interests typically take precedence over local interests.

Georgia’s current Law on Protected Areas does not explicitly permit official co- management agreements involving community representatives on decision-making bodies. The current Law allows for “consultation” of local stakeholders only, although a precedence appears to have been set in Georgia for the Mtirala National Park which currently appears to be very successfully co-managed by community stakeholders and park authority. By signing the CBD, Georgia committed to “Develop mechanisms, guidelines and legislation to promote the effective participation of indigenous and local communities in decision-making, policy planning and development and implementation of the conservation and sustainable use of biodiversity, including access and benefit-sharing and the designation and management of PAs, taking into account the ecosystem approach” (CBD Decision V/16, 3 and CBD Decision V/16, Annex).

Objective. Support the MEPNR/ APA and relevant stakeholders in developing/ adjusting national policy and legal framework (which is currently under review) in regard of co- management and participation of local population in PA management, in order to meet the requirements of the CBD and to pave the ground for effective biodiversity conservation and sustainable development. It is strongly recommended that the Law under review addresses inter alia the full range of Governance options for protected areas, permitting APA the flexibility to adopt management structures and authority most appropriate for a specific situation.

Inputs. Capacity Building for relevant MEPNR staff, optional Study Tour to learn from best practices, Consultancy for the integration of Co-management in Georgian environmental policy and legal framework,

Results. MPNR/ APA staff is trained in co-management. Legal framework addresses the full range of governance options for protected areas, permitting co-management of local population.

4.8.1.2 Co-Management Structures established Option 2: Strengthening Existing National Park and Establishing Support Zone

Rationale/ Background. IUCN has identified the following four main governance types for NP: Type A: Protected areas with decision-making authority, responsibility and accountability in the hands of national (or sub-national) government. Type B: Co-managed protected areas (several social actors share decision-making authority, responsibility and accountability). Type C: Private protected areas (land and resource owners hold decision-making authority, responsibility and accountability). Type D: Community conserved areas (indigenous peoples or local-settled or mobile- communities hold decision-making authority, responsibility and accountability)

For this feasibility study the matrix-based method by Dudley and Borrini-Feyerabend28 which has been adopted by IUCN as an accepted tool to determine the most appropriate form of governance for a national park, has been employed. This method is based on a complex set of questions organized by theme blocks aimed at finding the most suitable approach for any particular site (see Annex 4.5). The matrix used for the analysis of framework conditions addresses a wide array of subjects such as traditional and actual land tenure and use, natural resource dependency by local people, attitudes towards authority and central Government, local acceptance of Government rules and regulations, sustainability of protected areas with or without local involvement, and many more. After answering all questions, the validated ticks and crosses for each governance type are summed up and filled into a score sheet. The sum totals provide an indication of the one or more governance types that appear as the most appropriate for the protected area tested.

Objective. Applied to the framework conditions related to the proposed Kazbegi National Park as the category of best choice, the results of this very comprehensive analysis

28 Nigel Dudley and Grazia Borrini-Feyerabend, 2005. A tool to help selecting the appropriate IUCN categories and governance types for protected areas.

clearly favour a governance model based on co-management of the National Park with strong representation of community stakeholders. (see chapter 5.2).

The introduction and establishment of appropriate co-management structures is closely related to the adjustment of the legal framework and the capacity building of responsible government staff.

Results. Against this background the study team recommends the establishment of a Kazbegi National Park and Support Zone Management Board to be composed of: · The Kazbegi National Park (KNP) Director (permanent non-voting member) · One additional KNP staff member (permanent non-voting member) · One representative of the Governor’s Office · One representative of the Ministry of Agriculture; · One representative of the Sacrebulo; · One representatives of the local NGO Forum, · Six representatives of the 25 Support Zone communities (one representative per Sacrebulo except for Stepantsminda with 2 representatives due to its large size).

The KNP staff, a representative of the Governor’s Office, Ministry of Agriculture, and Sacrebulo, would be permanent members of the Management Board. All other members are elected by their constituents. The community representatives are elected by ballot with candidates proposed by the following five Sacrebulos of the Planning Area: Gorit- sikhe, Kobi-Gudauri, Sioni, Sno and Stepantsminda.

Key functions and responsibilities of the KNP Management Board would be inter alia to approve the annual operational plan and budget of the KNP, to intervene and resolve all conflicts arising between the KNP and the local population, to co-decide on the selection and employment of key KNP positions, to oversee the implementation of the support zone economic development plan, to request expert advise on all issues which cannot be resolved by the Board, to catalyse all applications for development activities in the support zone and request professionally conducted environmental impact assessments as required.

The administrative structure of the Kazbegi National Park would remain a line-staff administration which allows for easy expansion and/ or staff reduction as needed. Pro- gram Chiefs would operate on the same administrative level and have equal reporting lines (Chief of protection, Chief of administration, Chief of tourism, Chief of research and monitoring, and Chief environmental education and awareness). Depending on the work volume of a Program, additional positions can be added or removed as required, still maintaining clear reporting lines and responsibilities.

The KNP administration would operate under the supervision of the KNP Management Board and the Ministry of Environment. The KNP would continue to be fully responsible

for the day-to-day activities of the KNP and its overall protection and management in accordance with the Management Plan, Business Plan and Annual Operational Plans.

It is proposed that the Management Board elects its Chairperson (majority vote) for a three-year period from amongst the elected Board Members. The Chairperson of the Management Board will announce dates for re-election of Board Members well in advance. It will be the responsibility of the Chair to: · Arrange and implement four Board meetings annually; · Prepare and elaborate the agenda for each meeting to be distributed amongst Board Members one week prior to each meeting; · Chair the Board meetings.

Emergency Board meetings can be called by the Board Chair or his/ her representative at any time if required. An appropriate Charter for the Board needs to be elaborated in accordance with Georgian Law.

4.8.1.3 Community Ranger Service established

· Rationale. The rationale for establishing a Community Ranger Corps is to: (a) test the establishment of community based Kazbegi National Park Rangers for increased local participation in environmental management and protection; (b) develop and test rules and regulations in the participatory planning process for the support zone of the target area (including waste management and sewage issues), and (c) most important, to assume responsibility for the enforcement of policies and the control of the forest fragments to be de-classified within the national park re-definition process.

Objective. Key objective of this proposed project component is to test the establishment of a Community Ranger post in each of the five Sakrebulos to be composed of a total of ten rangers, two for each Sakrebulo, and to identify necessary adjustments.

Inputs. It is recommended for the project to carry the costs related to the establishment and equipment of the community ranger stations and the operational cost for the duration of the project (six years).

The idea of Community Rangers has been discussed with target area communities during the feasibility study and has received a positive response in principle.

4.8.1.4 Business Plan for Protection and Support/ Transition Zone elaborated (PI) Rationale. The issue of financial sustainability of the upgraded national park and associated conservation areas in the planning region will be addressed by the proposed business plan to be elaborated complementary to the management plan for the park. It is

evident that without securing the financial sustainability any park improvement as critical component of the proposed project is in jeopardy. Judging by the status quo of the Kaz- begi National Park, APA is currently not in the financial position to allocate the funds needed for the sustainable protection and management of the park. This scenario is not expected to change in the long-run. It therefore is of urgency and greatest importance to define innovative financing strategies in order to secure long-term financing. The Caucasus Protected Area Fund (Annex 5.5) could become an important instrument for bridging the expected financial shortfalls of the Kazbegi Park on termination of the KfW sponsored project.

Objective. A crucial part of the project’s exit strategy will be to achieve financial sustainability within the project timeline. The business plan for the park will therefore be an important tool the design of long-term financial strategies. The elaboration of a business plan is also a legal requirement for a park to qualify for CPAF assistance.

Inputs. Consultancy and capacity development in sustainable financing of PA, support with the elaboration of a business plan complementary to the management plan; assessment of alternative/ external funds, development of a sustainable financing strategy.

4.8.1.5 Management Plan for NP and Support/ Transition Zone elaborated (PI) Rationale. The current NP Kazbegi is in urgent need of a thorough revision, as it is not functioning for various reasons: high fragmentation making an effective management and enforcement impossible, insufficient representation of high mountain grassland ecosystems, total lack of infrastructure and equipment, inadequate budget and extremely poor working conditions, and non- existence of a management plan.

Objective. The purpose of the management plan and the complementary business plan is to assist the existing Kazbegi National Park to function effectively while reaching social, economic and environmental sustainability and to effectively manage and conserve natural resources in partnership with all key stakeholders.

Input. Consultancy and capacity development. For the implementation the services of a very experienced expatriate protected area planner are needed to facilitate the planning process requiring one full calendar year. The total costs to produce the management-, business- and support zone plans are estimated at EUR 80,000 (all inclusive).

Results. Kick-start and implement the participatory planning process for the national park, designated conservation areas, and the support zone sustainable economic development. This process is expected to last one full calendar year resulting in the identification of the infrastructure and equipment needs for the conservation areas, the formation of the proposed co-management administrative structure, and participatory definition of boundaries for the national park and support zone.

4.8.1.6 NP Administration strengthened Rationale. Current NP Administration is not working efficiently, due to lack of infrastructure and equipment, inadequate budget and extremely poor working conditions.

Objective. To be able to fulfil their tasks, the National Park Administration needs to be strengthened.

Input. Essential infrastructure development, the provision of equipment and capacity development of existing staff. It is recommended to provide operational costs of the Na- tional Park Administration as well as operational costs for community ranges for a period of 5 years, until the long term financing strategy is in place.

4.8.1.7 Relationship between APA and local population improved Rationale. Mistrust and miscommunication from both sides constrain the cooperation between MEPNR/ the APA, the local government and the local population.

Objective. Good cooperation relationship and trust between the APA and the local stakeholders to contribute to sustainable development and biodiversity conservation.

Input. Strengthening the local image of APA is expected to be achieved through: (a) the proposed environmental awareness and information campaign by using support groups to be trained with the assistance and participation of APA; (b) active involvement of the existing NP administration in the participatory elaboration of the management plan for the national park and associated conservation areas and for the support zone sustainable economic development plan; (c) close collaboration with the community rangers in all activities related to the conservation areas; and (d) the participatory implementation of the NP management plan to be based on co-management involving representatives of the support zone communities.

Results. Relationship between APA and local population improved.

4.8.2 Eco-Tourism is established in the region The development of the tourism industry is still in its infancy with literally no infrastructure- and only rudimentary services offered that are far from meeting international standards. The rationale for tourism development is to capitalize on one of the most promising economic development opportunities offered by the Kazbegi District. At the same time growing tourist numbers will increase environmental pollution and disturbance/ destruction of habitats, if these issues are not addressed properly. Hence, this project component aims at creating the right framework conditions for sustainable ecotourism development, offering economic opportunities to currently marginalized families. Organ- ized and well-planned tourism development will be an integral part of the proposed NP management plan, the support zone economic development plan, and the regional integrated spatial land use plan. Promoting private sector involvement and community-

based tourism initiatives will be a key to the overall tourism development strategy. Annex 1.9 provides a detailed analysis of the Tourism Sector of the Kazbegi Region.

4.8.2.1 Quality of private guest house services improved (QM)

Rationale. Accommodation for tourists is mainly concentrated on private guesthouses, which currently don’t meet the required standards in terms of facilities and services offered. The existing capacity and experience in the field of ecotourism of various NGOs (ELKANA, CENN, Mountain House) provide a good basis for the improvement of tourist accommodation and related services.

Objective. Taking important steps for the strategic development of sustainable tourism through well targeted capacity development initiatives, regarding the improvement of guest house standards, the improvement of service quality and the development of attractive service offers for different target groups.

Input. The implementation of the proposed intervention will be delegated to a suitable NGO and the private sector. The total costs related to the proposed capacity development initiatives will be an estimated EUR 25,000. Initiatives suitable as quickstart measures include capacity development described as follows: · Identification of households interested in Bed and Breakfast / accommodation; · Design and implementation of training module for existing and proposed B & B households/ guesthouses in the target area; · Marketing and advertising of B & B places and guesthouses; · Design and implementation of training module for mountain guides; · Design and implementation of training module for product marketing with emphasis on cultural tourism, mountain climbing and glacier expeditions;

Results. Private guest house facilities are improved and local entrepreneurship in the tourism sector strengthened. Providing agricultural products from the region will induce a cascading impact on other economic sectors as well thus providing benefits for those not directly participating in tourism.A detailed description of this intervention is given in An- nex 4.2 and Annex 4.4 Tourism Development Initiative. The five main segments of services currently demanded in the area (accommodation, catering, transport, guiding and entertainment) is provided in Annex 1.9.

Justification and economic analysis. Under the assumptions of contributions of beneficiaries to trainings they want to participate in and see an advantage in what they expect to learn their contribution is considered an investment in home stay improvement. This would include an advisory training on what and how to improve the home to fit to tourist needs, a language course in English and a training as mountain guide or any other skill that would open an opportunity to sell a service or a local product to tourists. The investments would also include repairs per bedroom of 400 GEL and the cost for adver-

tisements in internet and printed media. The project would be expected to arrange for the design of those while the beneficiaries contribution shall cover the consumables and maintenance costs. Operation costs include the cost for food raw material and the maintenance of the bed rooms. The income will be generated from sales of overnight stays and meals and from local product sales or provision of guiding services. An increase of the demand for these of 10 % is assumed. The observation over an operation period of 10 years reveals that the operation of home stay under the listed assumptions and an understood discount rate of 10% would yield an internal rate of return of 20% and a positive net present value. The accumulated cash flow would turn into positive 5 years after the project start whilst in the annual cashflow the output would already be above the input in year three. The analysis provides not only an insight into the specific situation but also the need of local investors for damages to obtain a credit for the investments. This is a justification for the proposed land title registry component. (Table 16a)

Table 16a: Financial Analysis Private Guesthouse Development

Private Guesthouse Development - Example 1 House with 2 bedrooms

[Unit] [Amount] [cost/unit] [remark] Total Year> 1 2 3 4 5 6 7 8 9 10 Cash out Positions Training guesthouse improvement Trainings 1 100,00 100,00 Investment in private Guesthouse improvement rooms 2 400,00 800,00 Language Training years 1 480,00 480,00 480,00 Advertising (web site operation), annual fee year 1 40,00 40,00 40,00 40,00 40,00 40,00 40,00 40,00 40,00 40,00 40,00 Printed advertisement (broschures) 100 2,00 200,00 200,00 200,00 200,00 200,00 200,00 200,00 200,00 200,00 200,00 Training in additional services for tourists 1 50,00 50,00 Cleaning and running cost for bedroom ann. nights Initial 10 4,00 increase 10 % 40,00 44,00 48,40 53,24 58,56 64,42 70,86 77,95 85,74 94,32 Food raw material and kitchen operation ann. meals initial 30 5,00 increase 10 % 150,00 165,00 181,50 199,65 219,62 241,58 265,73 292,31 321,54 353,69

Total Cash out 7.338,11 1.860,00 929,00 469,90 492,89 518,18 546,00 576,60 610,26 647,28 688,01

[revenue/ [Unit] [Amount] unit] [remark] Year> 1 2 3 4 5 6 7 8 9 10 Cash in Positions overnight stay incomes (bed rents) nights Initial 10 30,00 increase 10 % 300,00 330,00 363,00 399,30 439,23 483,15 531,47 584,62 643,08 707,38 catering meals initial 30 10,00 increase 10 % 300,00 330,00 363,00 399,30 439,23 483,15 531,47 584,62 643,08 707,38 sales of local products sales initial 2 5,00 increase 10 % 10,00 11,00 12,10 13,31 14,64 16,11 17,72 19,49 21,44 23,58 provision of guiding service services initial 1 20,00 increase 10 % 20,00 22,00 24,20 26,62 29,28 32,21 35,43 38,97 42,87 47,16

Total Cash in 10.040,58 630,00 693,00 762,30 838,53 922,38 1.014,62 1.116,08 1.227,69 1.350,46 1.485,51

Annual Net Cash Flow 2.702,47 -1.230,00 -236,00 292,40 345,64 404,20 468,62 539,49 617,44 703,18 797,50 Accumulated Net Cash Flow -1.230,00 -1.466,00 -1.173,60 -827,96 -423,76 44,87 584,36 1.201,79 1.904,97 2.702,47 Assumed periodic discount rate (%) 10,00% actual net present value (NPV) = 828,61 € Internal Rate of Return (IRR) (%) 20%

4.8.2.2 Mountain rescue and guide service is established Rationale. The adventure activities became more and more popular amongst the youth and the number of visitors-backpackers will significantly increased during upcoming years. In consequence of the proper establishment of the NP/ BR and increase of its popularity the summer tourists’ number should be doubled during the next 3-5 yours. The increase of visitors’ numbers, will increase travel risks, and therefore will require proper establishment of local mountain rescue and guiding services.

Objective. Improvement of ecotourism facilities in terms of security.

Input. The rescue & guide team should be small, but well trained and organized team of trained mountaineers compose of maximum of 12 persons, including team leader and coordinator. The core of team should be local and based in the region, preferable in the centre of the region and close to the most popular mountain destination – Mt.Kazbegi. The team should have a proper office, communication tools, rescue equipment, primarily first aid units, transport. The rescue team members will be trained in mountain guiding by

professional mountain guides. Obtained skills will help them to establish best guiding practices.

Results. The rescue team will oversee climbing/ mountaineering/trekking groups’ activities and establish proper registration system. This will make possible to monitor and in case of need react on emergency request to identify or evacuate victims of accidents.

4.8.2.3 Network of mountain huts & shelters improved Rationale. Trekking and climbing is a primary attraction activities for international and domestic tourists. Currently, there are five major areas popular for trekking and climbing in the region: Trusso valley, Sno Valley, Juta and Chaukhi, Mt.Kazbegi trail, Khada gorge. It is easy to forecast that the number of visitors will be increased in upcoming years, especially when the BR/ NP will be established. Though, adequate facilites and shelters are missing.

Objective. This activity will help to extend the tourist season and aims at facilitating and regulating the increase of visitors’ number to the most attractive areas. The “network of Kazbegi huts” will help visitors to travel with more comfort and safety, will generate income for the hut services, which will remain with the local communities, will help to establish accommodation and environmental standards and monitoring system with support of hut attendants, increase safety and in case of rescue operations will provide appropriate bases for rescuers.

Input. It is proposed to construct respectively maintain 5 mountain huts/ camps in the most visited locations (one per each trail). The huts should have similar accommodation conditions, camp ground, environmental standards and management regulations. They should be connected and corporate management should be in place. The proposed activity includes start-up investment to make design of huts, define place/ location, acquire land title, procure construction materials and works, purchase campground equipment, conduct training of hut attendants, set-up management team and cover operation costs.

Results. The development of network of mountain shelters and huts will establish simple accommodation facilities for overnight visitors and at the same time regulate environmental impact from visitors, simple by fixing guarded camp grounds in the specific locations.

4.8.2.4 Marketing of tourism through branding of local products improved Rationale. According to the findings of the FS, the revenue generated by tourism activities in the region surpasses 1 Mio GEL per year. This clearly shows the importance of the sector for the regional economy and as driver for further development. While enhancing entreneurship in the field of ecotourism, diary production, medical herbs, beekeeping, wool processing and handcrafts, attention should be paid to improving the

cooperation among the local stakeholders, the creation of a common brand and of synergies in terms of marketing.

Objective. The overall objective of this sub-component is to develop a brand for Kazbegi as a prime eco-tourism destination and for the marketing of regional products. Linking the agricultural value chain and sustainable tourism development will support the regional economy.

Input. Assessment of marketing potentials for regional brands of agricultural products and handcrafts. Supporting capacity development of the sustainable eco-tourism sector in the region through training, organizational development and marketing. GoG will assist the capacity development by providing knowledge support and by linking the Kazbegi tourism industry with national and international tourism marketing programmes.

Results. Necessary recommendations for marketing structures are proposed, investment costs for individual participants and organizational structures are estimated, additional gains are estimated.

4.8.3 Livelihood stabilization is supported The proposed specific livelihood stabilization initiatives are aiming at the improvement of living standards of the rural families mostly living of subsistence agriculture (livestock included).

It is self-evident that the negative population trend in the Kazbegi Region and the rapidly aging population clearly limit the local economic development potential due to the lack of work force. This has been a key factor in designing the proposed intervention package for the target area. Interventions aimed at strengthening the local presence of APA and establishing conservation areas will not be affected by the decreasing and aging local human population, although remaining a big overall challenge. This requires a concerted effort by all stakeholders, in particular the commitment by APA, to empower local stakeholders through sharing decision-making processes. Although it cannot be the primary goal of the project to stabilize the population by creating more favourable economic and other framework conditions in the target area, it is hoped that the project at least can contribute to achieving this goal which will be the greatest challenge of all.

4.8.3.1 Assessing and combating Brucella abortus is supported (QM) Rationale. According to the only local veterinarian in the Kazbegi region brucellosis has been diagnosed as a serious problem mostly related to dairy cattle throughout the target area. When questioned, local health officials confirmed the occurrence of the disease in their patients, indicating that the number of infected persons appears to be growing. The Chief medical physician of the Stepantsminda hospital estimates that up to 10% of the human population in the target area is infected. In humans it is usually associated with the consumption of unpasteurized milk, soft cheeses made from the milk of infected animals, ingestion of meat of infected animals, or close contact with their secretions. The

risk of infection obviously constraints the marketing of the mentioned products and therefore affects the income of rural families. Since most families in the target area own livestock and depend on livestock (in particular dairy cows) and processed dairy products for their livelihood, it is obvious that the control and ultimate elimination of brucellosis as a highly contagious disease is of utmost importance to the human population and the economy of the district.

Objective. Assessing and combating Brucella abortus in the study area as a debilitating disease affecting the local human population and in support and preparation of project interventions aimed at the enhancement of the economically promising dairy processing production in the region.

Input. Based on a cattle population of 3,400 heads and the estimate of 30% being affected by Brucellosis, the costs for the vaccination scheme are calculated as follows: Vaccination for 3400 heads of cattle (twice, in spring and in summer) – 3 GEL per cattle = 10,200 GEL (4,340 Euros). Given the estimate of about 1000 (roughly 30% of 3400) cows being affected by Brucellosis, these would have to be eliminated. The project will have to replace these cows with 1.5 year old cows at a cost of 400 GEL per head (= 400,000 GEL). This translates to a total cost for the brucellosis campaign of 155,000 to 170,000 Euros. The costs in the Budget of EUR 163,000 are an approximation.

The active implementation of the sampling and control program will proceed under the auspices of the district (privately practicing) veterinarian. The timeline of this intervention is estimated to be one year.

Justification and economic analysis. Under the assumptions of contributions of a labor contribution from the local farmers and herders at the cost of 20 GEL per working day during a total of 500 days. Vacination will be necessary twice for all 3400 animals in the region. Assumed cost would be 3 GEL per head. Since an estimated 800 heads cattle will be incurably sick, they need to be killed and replaced. Cost of replacement are assumed to be 500 GEL per cow. The cattle herding, herd management and feding costs are assumed to be summarized to 0.05 GEL per head and day. Labor cost related to the cattle managment may be disputed, but since local labour is not expensive in the region and keeping cattle is a subsistence activity with even lower actual labour cost.

The cattle and diary production economy of the region will suffer from the brucellosis campaign in the first three years to recover the investments in the campaign. The accumulated cash flow turns only in year 4 into a positive value, though the annual actual cashflow is of course in the year after the campaign already positive, since the investment are only during the first year very high. The internal rate of return for cattle keeping under the low labour cost assumption is yielding an internal rate of return of 18% for the local cattle and diary business in total. The situation for each individual the sitaution may look different, depending on the number of cattle kept and the availability

of fodder and other facilities. The gap in income may be hard to be bridged by individuals, though for the whole economy the measures is feasible.

To avoid further spread of the disease and to encourage the local hereders to participate the Government of Georgia may consider a subsidy for replacement of sick cattle or at least a support in the first year of the campaign to compensate for loss of diary production. (Table 16b)

Table 16b: Financial Analysis Brucellosis Campaign Brucellosis Campaign

[Unit] [Amount] [cost/unit] [remark] Total Year> 1 2 3 4 5 Cash out Positions Selection and assembling of animals work days 500 20,00 10.000,00 Vacination cattle 3400 3,00 10.200,00 purchase of new cattel 800 450,00 360.000,00 Herding, fodder, other cattle keeping cost animals 4000 18,25 73.000,00 73.000,00 73.000,00 73.000,00 73.000,00

Total Cash out 745.200,00 453.200,00 73.000,00 73.000,00 73.000,00 73.000,00

[revenue/ [Unit] [Amount] unit] [remark] Year> 1 2 3 4 5 Cash in Positions Income from milk cow 400 600,00 240.000,00 240.000,00 240.000,00 240.000,00 Refund of losses 0 600,00 0,00

Total Cash in 960.000,00 0,00 240.000,00 240.000,00 240.000,00 240.000,00

Annual Net Cash Flow 214.800,00 -453.200,00 167.000,00 167.000,00 167.000,00 167.000,00 Accumulated Net Cash Flow -453.200,00 -286.200,00 -119.200,00 47.800,00 214.800,00 Assumed periodic discount rate (%) 10,00% actual net present value (NPV) = -572.063,71 € Internal Rate of Return (IRR) (%) 18%

(Details see Annex 3.6.1)

4.8.3.2 Diary production is enhanced Rationale. Eventhough milk products of Kazbegi Region are known for quality and taste, they are mainly used for own consumption, and there are no coordinated efforts to streamline and properly organize the marketing and sales of dairy products.

Objective. Enhancing dairy production through selective breeding, sustainable range management and improved marketing and sales channels thus providing the basis for an economical viable cheese production. The dairy sector is overwhelmingly in the hands of women so a positive economic impact will simultaneously be gender-related.

Input. The input required for the sub-component consists of training, equipment and infrastructure investment (milk collection, transport to markets in Tbilisi). Training requirements will focus on aspects of breeding, feeding (two cut system for hay-making, silage fodder) as well as on topics such as simple bookkeeping, product quality management and monitoring.

Results. The interventions would foresee the establishment of a central dairy products manufacturing operation in Stephantsminda. The milk would be collected at the farm gate wherever possible. The dairy operations will include processing, storage, packaging and testing facilities. A dairy farmers’ association would be established serving as facilitator of training and point of liaison for the National Park Management. Furthermore, the dairy farmers’ association would provide marketing and sales assistance for farmers and institute a forum for discussion and exchange of information.

(Details see Annex 4.5)

4.8.3.3 Local beekeeping is improved Rationale. The level of beekeeping is rather basic. The numbers of colonies are rather increased by catching swarms than by controlled breeding. Training in modern beekeeping is therefore essential in order to enhance local livelihoods.

Objective. The overall objective of this sub-component is to improve the technical standard of beekeeping, to increase the production of honey per colony, to produce and market other hive products such as wax, propolis, pollen und bees venom, and to organize the sale and marketing of bee products.

Input. The establishment of a beekeepers’ association will be supported in order to facilitate technical transfer through training and to coordinate processing and marketing. Training would be required in production and processing of bee products, basic ecosystem ecology, disease prevention and marketing. Veterinarians should receive specific training in bee diseases. Funds are needed for (a) support and technical advisory services, (b) purchase of extracting equipment as well as equipment for other bee products (all equipment manufactured locally), and (c) for the functioning of the beekeepers’ association. Revenues from equipment rental, centralized sales and marketing would finance the operational costs of the association.

Results. Expected ecological impacts would be positive. More bees, more bee colonies would provide better pollination. The socio-economic benefits are expected to be very high. A relatively low input would result in an increased production of honey and other bee products (Details see Annex 4.5) · 4.8.3.4 Wool processing is supported Rationale. Wool Processing provides especially women with an opportunity to get involved in an economically viable business of long-standing tradition in Georgia and to provide a higher return to families involved in sheep breeding.

Objective. Support wool processing as a part of the traditional regional culture, gender- specific economic opportunities.

Input. Training in wool spinning and production, basic marketing, and bookkeeping are required. The facilities required accommodating the wool processing would encompass space to wash, dry, spin and store the wool.

Results. The Arsha Women’s Association would train young women in traditional clothes tailoring thus providing new business opportunities. (Details see Annex 4.5)

4.8.3.5 Collection and marketing of culinary herbs and medicinal plants is supported Rationale. Herbs, medicinal and edible plants are traditionally collected in the target area from the wild for household use only. Due to the high value and popularity of some of the plants it is recommended to establish a cottage industry on a trial basis in an attempt to determine the market potential for processed products. The following plants have been identified as the most promising for potential commercial use: Seabuckthorn (Hippophae rhamnoides); Caraway (Carum carvi); Broadleaf garlic (Allium nigrum); Thyme (Thymus vulgaris) and Bilberry (Vaccinium myrtillus).

Objective. The overriding objective is to contribute to the household income of families more specifically, to provide women with additional employment opportunities, making use of traditional knowledge on native plant values.

Input. Support to and training of the Niche Products Association (to be established) will be required in regard of proper collection, marketing and sales of culinary herbs and medicinal plants, and could be provided in connection with the upcoming GTZ FairWild certification project). Products should be marketed under the Kazbegi Logo. The processing facility will be located in a community showing specific interest in participating in this trial.

Results. Establishment of a Niche Products Association thus offering new business opportunities. (Details see Annex 4.5)

4.8.3.6 Pilot project using biogas for Greenhouses is established Rationale. Presently, there are hardly any vegetables grown outside the normal growing season. The reestablishment of traditional greenhouses in conjunction with a biogas testing facility would contribute to the household incomes, giving farmers the opportunity to grow special high value herbs outside the usual growing season and lowering the dependency on just a few agricultural products.

Objective. Since experience with biogas in the Kazbegi region is missing, the potentials of a greenhouse pilot project with focus on valuable herbs in conjunction with a biogas testing facility should be explored.

Input. A feasibility study, should be conducted to asses the cost-benefit ratio of the proposal. If the results turn out to be positive, a pilot project should be established to further explore the possibilities and to provide a basis for a decision whether to broaden the scope of this sub-component or not.

Results. The expected socio-economic impacts are positive, favouring women employment and contributing to household income. (Details see Annex 4.2)

4.8.4 Regional development, mainstreaming of biodiversity protection and stakeholder institutions are supported This component comprises regional initiatives and community enhancement, mainstreaming of biodiversity protection into regional development and measures aimed at the improvement of the working relationship between APA and the local communities.

4.8.4.1 Environmental awareness and project information campaign is conducted (PI) Rationale. The information on needs and possibilities and the legal impications of protected areas management are not well known by local population and local government. Awareness campains would raise the understanding for needs and options in protected areas management and enhance an active participation

Objective. Increase local knowledge on protected areas management and environmental issues and raise the awareness of the value of environmental services.

Input. Preparation of information materials and presentations, conduct public meetings and environmental competitions.

Results. Implement a well designed and comprehensive environmental awareness and project information campaign aimed at all age classes and target groups in the project area by making use of “support groups” to be composed of highly motivated and trusted community members from the target area. (Details see Annex 4.2 and Annex 4.3)

4.8.4.2 Participatory Integrated Spatial Land Use Planning is implemented (PI) Rationale. Integrated Spatial Land Use Planning (ISLUP) has to be used for the spatial organisation of society´s activities to ensure sustainable socio-economic conditions, and nature management of the basic function land use/ landscapes as life-maintaining system. On the one hand the Kazbegi District offers rare mountain biodiversity conditions for nature conservation, because the region is very remote. On the other hand the socio-economic conditions are poor. Land Use Planning tries to develop the socio- economic condition by conserving the unique biodiversity for future generations and by avoiding land use conflicts.

Objectives. The objectives in detail of ISLUP are (Schuerholz, 2009): · “Reach an acceptable balance between conservation and development objectives; · Ensure land use (and tenure) certainly that promotes investment and community stability; · Create the opportunities for individuals, advocacy groups and local governments to participate in land use planning and influence government land use decisions that affect them;

· Enhance the level of shared knowledge and understanding about land and resource use decisions and their implications; · Support the delivery of land use and resource management initiatives as stipulated by the country’s environmental strategy; · Facilitate evaluation of on – the – ground development proposals, reducing resources required for assessing major projects, and simplifying approvals for new activities that may be proposed over time”

The ISPLUP procedure consists of 7 phases: a. Scoping – Inquiry of all concerns of the participants of their interests and contributions to the planning process (partly done during this FS) b. Inventory – Estimation of natural resources, socio-economic resources, actual land use, cultural resources (partly done during this FS) c. Assessment – Identification of significance and sensibility of natural and cultural resources and of land use conflicts d. Sector goals – Identification of goals and targets for utilisation of each natural and cultural resource e. Integrated goal concept – development of an integrated goal concept for sustainable land use development resulting in sector maps zoning the area according to the types of utilisation goals (goals for conservation, development and improvement/ rehabilitation) f. Action plan – Identification of measures and locations to achieve the development goals with assignment of priorities in the time line g. Implementation recommendations and monitoring – Brief description of all activities and measures proposed

Input. ISLUP should be worked out by a working group of experts for the different natural, cultural and socio-economic components. It would be advantageous, if the experts had previous knowledge in Kazbegi District. The planning period has to include one growing season in minimum.

Result. Embarking on participatory Integrated Spatial Land Use Planning encompassing the entire defined planning area of the Stepantsminda Municipality as a basis for organized and well planned development. (Details see Annex 4.2)

4.8.4.3 Accessibility on roads during winter is improved Rationale. Avalanches occur in Kazbegi frequently (risk rate in the high mountain areas 75 – 80%), avalanche danger period may last up to six to eight months, endangering the local population and constraining economic development through interruption of communication and transport infrastructure. Villages such as Djuta are regularly cut off

for months from the outside world, as adequate equipment to clear the roads is not available.

Objective. Villagers would be placed into the position to help themselves instead of wait- ing for the district caterpillar which might take months. Open roads are a pre-requisite for the economic development and crucial for health care in case of emergencies.

Input. Purchasing 8 – 10 light tractors with snow-ploughing and earth-moving equipment to be stationed in those villages frequently cut off due to avalanches and land slides. These tractors should be stationed in the affected villages. Avalanche control through protective walls is beyond the scope of the proposed project. However, in the frame of the integrated participatory land use planning process, options for soil bioengineering (use of living material such as willow branches, willow cuttings and rooted deciduous trees for slope stabilization) and snow modification (voluntary releasing avalanches) may be considered.

Results. While it does not seem possible for the proposed project to equip the endangered villages with new caterpillars, the objective is assisting the villagers in clearing their part of the roads on their own.

4.8.4.4 Regional waste management is improved Rationale. At current the floodplain of the Tergi River and its tributaries are covered by garbage dumped uncontrolled by local people, harming the environment and constraining tourism development. At current none of the 24 villages of the planning area has an officially designated waste disposal site and there are no incentives of any kind to encourage people to deal with garbage disposal in an environmentally friendly manner.

· Objective. The subcomponent aims at reducing environmental pollution and contributing to the creation of tourism-friendly framework conditions by encouraging target area communities to implement organized and controlled garbage disposal system and enhancing the cooperation of villagers and authorities of the Kazbegi District. The intervention also serves as example and test for self organization of the further expansion of waste management.

Input. It is suggested that the project will be implemented by the local NGO “Mountain House” jointly with the Stepantsminda. The costs for the 500 proposed garbage containers needed are going to be covered by the Stepantsminda budget. The selection and preparation of a suitable waste deposit site and related equipment for site tending should be carried by the project. The costs related to establish a well functioning waste management system (including initial clean-up operations and information/ awareness campaign) amount to an estimated EUR 164.800 €

Results. The proposed intervention will start with a comprehensive information and awareness campaign on waste disposal and recycling issues involving every community

of the target area; all district schools will be involved in organized clean-up operations. Jointly with the Stepantsminda authority collection containers for recyclable plastics and domestic waste will be placed in every village, to be collected periodically and taken to a recycling plant and respectively to a designated environmentally low impact and well tended garbage pit. (Details see Annex 1.10, Annex 4.2 and Annex 4.3)

Subsequently to APAs request, to pay greater attention to the waste problem, the measure, originally proposed as Quick-Start Measure, was modified as subcomponent in the field of regional development. In addition to the awareness campaign, the measure now comprises recycling and disposal of waste, which goes in hand with the allocation of additional funds for required equipment and consulting services.

4.8.4.5 Village engery supply of Djuta village as model established Rationale. The Juta village is one of the smallest, most isolated and one of the poorest of the 24 villages of the planning area. Its only access road is frequently blocked by snow avalanches during the long winters and by earth slides from spring to fall, which are also the most common causes of the frequent power outages plaguing the village and stifling the life of its people.

Objective. The objective for the proposed intervention is to supply the Juta village with an uninterrupted, reliable and low maintenance power supply system, at the same time stabilizing and improving the livelihoods of 23 of the poorest villagers in the study area. By making overnight stays possible in a remote villages with a special tourism appeal, it would enhance further economic development and could become a model for sustainable eco-tourism development.

Input. The plant construction and operation would proceed under the auspices of the Juta village. Estimated costs would be approximately EUR 54,000. In-kind labour for all construction work (construction and distribution network) not requiring special skills as well as maintenance would be provided by community members.

Results. Assessment of costs and benefits, construction of a low cost small scale hydro- electric power plant above the village, supplying power to each household via the existing distribution grid as an example demonstration for possible multiplication not only by the project. Stable electricity supply will enhance possibilities for private guest house development. (Details see Annex 4.2).

KfW critically questioned, wether the project should involve in the field of engy supply, nevertheless the Consultant recommends to analyze the costs and benefits of this proposal and to further promote the measure for the following reasons: · Existing interest, support and potentials for senergies with currant activities on hydropower development in Georgia of the Ministry of Energy, Winrock International and UNDP-GEF.

· Energy supply constitutes a cornerstone in the economic development of the village. Stabilizing energy supply of marginalized communities through ecologically friendly hydro-electric power could be tested as model project and further promoted if successful · Since Juta is situated in one of the most beautiful sceneries in Kazbegi, the power plant will enhance sustainable tourism development and could be promoted as such.

4.8.4.6 Sewage Treatment in the region improved Rationale. At current, none of the target area communities is engaged in environmentally compatible sewage disposal. Although several villages, including the municipality of Stepantsminda, have closed pipe sewage disposal systems, raw sewage is directly drained into natural drainage channels, creeks and rivers. Untreated sewage is causing a serious health hazard in communities where potable water is being increasingly con- taminated by livestock and human waste. Manure stock-piled during winter in backyards, is often placed very close to surface water and potable water supplies, contaminating water supplies especially during spring melt. Also untreated wastewaters are causing threats to freshwater microorganism in rivers, creeks and natural wetlands. While waste management has to be looked at in the context of the overall regional waste management programme, individual measures can be implemented as to increase the hygienic and environmental conditions.

Objective. Supporting local communities in reducing environmental pollution and human health hazard through the introduction of state of the art latrines within a model project. If successful, the measure could be expanded to the complete Municipality.

Input. While required materials (100 €/ latrine) and training for the construction of com- posting toilets will be provided by the project, the communities will contribute labour for the implementation (30 €/ latrine). Assuming that 1/3 of the 3000 households are interested and willing to participate, investment costs amount to 100.000 (1000 x 100 €).

It is recommended for the project to join forces with the Asian Development Bank currently embarking on a country-wide water treatment and protection initiative showing special interest in creating synergies with KfW in the project area.

Results. The applicability and local acceptance of well ventilated state-of the art latrines as a replacement of the currently widely used make-shift latrines will be tested in a model project for a selected community, in order to reduce environmental pollution and human health hazard.

4.8.4.7 Land Title Registration is supported Rationale. The majority of the rural families in the target area, in particular families living below or at poverty level are unable to afford the costs associated with the land registra-

tion process. This leaves them exposed to land speculators and depriving them of opportunities in accessing bank loans and/or to sell their land at fair market value.

Objective. The proposed intervention would assist in providing needy families with land security. The benefits are self-evident: Land titles are accepted by banks as collateral for bank-loans and also qualify people to sell land at fair market value.

Input. The intervention would best be implemented by the well established and locally respected NGO APLR. Assuming that up to 80% of the 1366 registered families of the Kazbegi District are still without land titles, the total cost of land registry amounts to an estimated EUR 200,000 (average residential plot size of 500 square metre).

Results. As part of the proposed information campaign an effort should be made to properly inform villagers on the advantages of legal land titles. The project would support local residents though consultancy on the land title registration process and by covering the costs.

For detailed information related to the issue of land titles it is referred to Annex 4.2.

4.8.4.8 Community-Based Hunting Cooperative established Rationale. The Kazbegi Planning Area offers a unique opportunity for the establishment of a hunting concession, involving local people in sustainable wildlife management. In the past hunting concessions have been mostly affiliated with one single concessionaire. Adequate legal arrangements allowing the establishment of a community based hunting cooperative are not yet in place. The idea has been discussed during the FS with the Ministry’s Biodiversity Protection Division as the responsible agency for hunting concessions in Georgia. The MEPNR has expressed its support to generally promote the issue of Co-Management. The highly positive local response to this innovative model for a co- managed hunting block suggests advancing the idea for the benefit of local hunters and wildlife.

Objective. It is suggested to establish a community-based hunting cooperative which would allow a continuation of a tradition deeply embedded in local culture, permit recovery of depleted populations of game species, and reduce poaching by outsiders.

Input. Capacity building for relevant MEPNR staff, optional study tour to learn from best practices, consultancy for the integration of a hunting cooperative in Georgian environmental policy and legal framework,

Results. Creation of the framework conditions for community based hunting and development of a concept of traditional hunting, addressing the Strategic Goal D of the NBSAP “To promote sustainable hunting and fishing through adequate planning, restoration and protection of key biological resources” and contributing to the 2010 Target 9.2

and the CDB Articles 8, 10 and 11. A community-based hunting cooperative would be an innovative model in Georgia which could be applied to other areas if successful. For further Details it is referred to Chapter 4.4.5.4.

4.9 Target Group and Intermediaries 4.9.1 Definition of Target Groups The Terms of Reference as presented by the KfW request the Consultant to prepare an analysis of the target group. This has been done for all the villages within the proposed project area. The detailed village profiles are attached in Annex 1.8.

The project’s target group and intermediaries are defined as follows:

Primary target group: The project targets the rural poor population in the Kazbegi region (2,962 inhabitants). Women constitute over 50 % of the target group and shall be actively encouraged to participate in the project planning and implementation. The planned activities will be embedded in a strategy that supports ownership and empowerment of the local communities. It will foster self help initiatives of the people and of local organisations. The project contributes to enhance directly and indirectly the living conditions of roughly 3,000 individuals.

Intermediary: The secondary target group includes APA as project implementing agency in order to strengthen the capacities for a successful and sustainable project implementation; policy holders in the governmental organisations responsible for the policy and legal framework governing the use of natural resources (local government); administrators and technicians in the governmental organisations responsible for enforc- ing regulations (NP administration); and task specific subcontractors/ cooperation partners (NGOs, women’s association, etc.)

The project will target the rural population who are largely depending on subsistence farming. Apart from the fact that the region has lost much of its traditional agricultural value (due to the closing of the Georgian-Russian border), villagers – as it is true for all rural people living on subsistence farming – are particularly vulnerable with regard to natural resource depletion. The project is expected to combine conservational aspects with a sustainable socio-economic development of the region. Farmers will be supported to improve their agricultural production through the more efficient use of locally available natural resources. Increasing the diversification and integration of production systems will contribute to strengthen the stability of the whole ecological and economical framework.

The target group consists of individual households and farmers’ associations. Every household can cooperate with the project on a purely voluntary basis. Groups of interested farmers are encouraged to form respective associations (Dairy Farmers’ Associa- tion, Beekeepers’ Association, etc.). Through these associations the project is channel-

ling its training inputs in terms of activities directed to conserve the ecological balance while improving the livelihoods of the local population in a sustainable manner. A participative and people empowering approach to the project will be at the basis of all communities based activities.

Social networks, Due to the remoteness and the temporary inaccessibility of the high mountain region, the local population has developed strong social networks among the adjacent communities and an age long tradition in communal land use and common decision making. The social networks are characterized through the following aspects: · The common use of pasture is based on traditional habits and rather informal agreements related to neighbourhood or family ties. · In regard of marketing of agricultural products and tourism development, there are no organized structures or associations in place; e.g. Kazbegi Municipality runs an internet presentation of private guest houses of the region (www.kazbegi.info/accommodation/stepantsminda/), which has been developed with support of an European voluntary programme, however, the joined presentation is not related to further cooperation among guest house keepers. · The Orthodox Church plays a key role as opinion leader and social hub. The church is also engaged in the development of the region (.e. g. through the purchase and free provision of agricultural machines), as the Patriarch of Georgia originates from Kazbegi. · During the Feasibility Study, the local NGO Mountain House proved great engagement and support in regard of environmental, educational and eco-tourism activities. Although being a small in terms of staff, the NGO disposes of a wide local and regional network and bears a great potential for the mobilization of people. · Ashra Womens association, the formation of a group of local village women to jointly produce local handicrafts was initiated in the frame of the trust building measures,. As one of the initiators of the group is the Deputy Director of the Kaz- begi National Park, potential is seen for interlinking ecotourism and marketing of local products. After a consolidation phase the group intends to encourage and train other women from the region in the formation of similar associations. · The NGO Stephantsminda consists of mainly academic people who originate from Kazbegi region and aims at the promotion of economic development and livelihood security of the rural population. The NGO is very strong in interest ar- ticulation, however, as they mainly live and work in Tbilisi, they do not necessarily represent the interest and views of local population.

Interest in participatory approach and in kind contributions The participation process of the Feasibility Study and the implementation of the trust building measures revealed their interest in participation, their richness of ideas and their willingness to contribute to the project through hands-on activities (e. g. waste collection and environmental exhibitions), which provides a solid basis for participation and empowerment as intended with the future project.

While the majority of the communities is ready so support the implementation process, the willingness and capacity of the mostly retired inhabitants of Sioni, Goristsikhe, Kobi and Tsdo village to contribute to the project through in-kind and labour is limited.

It should to be noted that the beneficiaries of the trust building measures duly spent the award money for the further development of their local initiatives (e.g. Ashra Womens association) and that they carefully documented their expanses in order to support a transparent application of funds and to satisfy APAs request on detailed information. The autonomous character of the local population is opposed by APAs mistrust and partly rough need of control. Therefore the improvement of the relationship between the APA and the local stakeholders will be one objective of the proposed project.

4.9.2 Articulated Needs Potable water, product marketing, employment opportunities - especially for women and younger age groups-, village infrastructure, protection against avalanches and landslides, river bank fortifications and energy supply are amongst the highest priority issues on the agenda of the Support Zone Communities (see Table 13). Waste management and tourism have also been highlighted by some communities but appear to be of less overall concern to the Kazbegi communities. This is the result of the village profiling regarding the most urgent needs as perceived by the 25 communities of the planning area. It comes as a surprise that there is no mention of livestock and agriculture, the staples of local people’s livelihood. There also appears no mention of the need for greenhouse rehabilitation as a former key revenue generator.

As shown by Table 17, most of the key issues will be addressed by the interventions described above. All interventions mentioned have been discussed with the communities and truly reflect priorities perceived by the communities.

Table 17: Priority Needs as Perceived by the Communities of Planning Area Addressed by Community Priority Needs as Expressed by Communities proposed Inter- ventions

Sewage, village spring out of order, waste management, Sioni Mostly river bank protection Garbani Potable water supply, access to markets Partly Arsha Access to market, employment opportunities for women Fully Employment opportunities for women, market access for Vardisubani Fully village products Village infrastructure not adequate for tourism, energy Kobi Partly supply inadequate, fuel wood to cover energy needs Phansheti Potable water supply, water sanitation, market access Partly

(bridge)

Potable water supply, access to markets, avalanche and Qoseli Partly land slide protection Access to market, energy covered by fuel wood, poor Almasiani Partly electricity supply Toti N/A Gaiboteni N/A Potable water supply, access to markets, poor electricity Gergeti Partly infrastructure Potable water supply, no employment opportunities for Tcdo Partly younger people, inadequate electricity supply Gveleti N/A

Djuta Market access, electricity supply inadequate Fully

Market access, potable water supply, waste manage- Karkucha ment, poor electricity infrastructure, better employment Mostly for women Land slide and avalanche protection, potable water sup- Akhaltsikhe Mostly ply, poor income situation

Land slide and avalanche protection, water sanitation, Sno Fully income situation, river bank protection

Land slide and avalanche protection, income situation, Achkhoti Partly market access Goristsikhe Existing tourism infrastructure inadequate Partly Market access (bridge), potable water supply, better Khurtisi Partly income generation for women River bank protection, low income, market access Khanobi Partly (bridge)

Gudauri Potable water supply Not addressed

Land slide and avalanche protection, income situation, Tkharsheti Partly market access Access to market, tourism under-developed, waste man- Stephantsminda Fully agement

Phkhelshe Poor village infrastructure, market access, Mostly

4.9.3 Poverty Situation and Targeted Project Impacts Table 14 illustrates the current livelihood situation of the target group (as described in chapter 2.3) and the expected project impacts:

Table 18: Livelihood assets and expected project impacts Livelihood Assets Expected Project Impacts

Human capital · Kazbegi region counts 1,400 households · Offering opportunities to younger with 3,000 inhabitants. Dwindling popula- population (Ecotourism) tion and work force due to demographic · Encouragement of women in project change and migration activities · Migration: 70% of the families located in · Stabilization of demographic situa- Kazbegi are permanent residents; 24% tion summer residents; 6% herders; strong mi- · Capacity building and training in gration process since 2005, brain drain regard of ecotoursm and marketing · Workforce: 45% available workforce; 37% of local products pensioners and 18% school children; over one third of the population is older than 60 · High educational standard but poor language skills Natural capital · Strong tradition in communal property and · Improvement of value chain and common use of natural resources marketing of diary products; honey, · use of natural resources: grazing, water, sea-buckthorn, fruits poaching, herbs, NTFP; main share for · Community based and participatory home consumption or local markets Land Use Planning · Insufficient winter range for livestock; · Introduction of co-management · Limited potential for agricultural expansion structures, strengthening of participation and stewardship in NRM Physical capital · Land use rights; access to land: Pastures · Support to land registration process; are common good; hey meadows usually land property to be used as damage privately owned; land titles missing for micro-credits · Poor road condition of the main road to · Introduction of appropriate tech- Tbilisi, temporary inaccessibility nologies in cooperation with gov- · Poor market access ernment (waste management, sew- · Poor infrastructure (waste and sewage age, engery; Brucelliosis) management) and social/ medical/ veteri- · Improvement of tourism facilities nary services through capacity building and en- · Sub standard of tourism facilities and re- hancement of entrepreneurship in lated services; lack of rescue services the field of ecotourism Economic/ financial capital · Household income and income sources: · Diversification of income high proportion of subsistence agriculture/ · Offering income opportunities for self employment; 15% salaries from younger population wages, 10% sales of agricultural products · Provide opportunities for women to (mainly potatoes and cheese) move from self employment to for- · Solvency/ endowment with capital/ access mal employment or entrepreneur- to credits: majority of families without land ship title, lack of capital for registration, depriv- · Access to loans though land regis-

ing them from access to bank loans tration process · Low level of employers (26%) and business owners (7%) Social capital · Strong traditional communal land use · Support of specific target group as- · Strong informal networks sociations and self-help organiza- · Lack of trust between APA and local tions population · Improvement of relationship between APA and local population

4.9.4 Gender Aspects More than half of the Kazbegi population are women. The economic activities and duties of men and women are partially different: Men are responsible for mowing, transportation of hay, looking after the sheep. Agricultural works such as potato growing is equally done by both, men and women. As it is true for many rural regions, women carry the main responsibility for the well being of their families. Women are at the core of the dairy production since they are milking the cows and manufacturing cheese and other dairy products. Most of them are self-employed or work in the informal sector. Even though there are no obvious differences in rights and obligations between man and woman, their economic situation is worse than that of men. Therefore during project planning and implementation, following elements of the gender strategy need to be taken into consideration: · The information campaign will include specific measures to address women to inform them of their opportunities and the services provided within the project components (especially tourism, handcraft and dairy production) · Special attention is to be paid to the equal representation of men and woman in participation processes, decision making and implementation, regarding the integrated spatial land use planning as well as the proposed project components; · During the development of the ecotourism and livelihood project components, the present division of labour and the workload of women needs to be taken into account, to avoid capacity overload.

Improving the livelihood of the population of Kazbegi means to a large extent improving the livelihood of women. The project’s support zone interventions reflect the importance of women in the rural value chain through supporting dairy production, wool processing, and niche products processing such as culinary herbs and medicinal plants.

5. PROJECT ORGANISATION AND IMPLEMENTATION 5.1 Grant Recipient The recipient of the grant will be the Georgian Ministry of Finance.

5.2 Project Executive Agency (MEPNR) and Project Implementation Agency (APA) – Analysis of Present Situation Organisation The Agency for Protected Areas’s (APA) core mission is: (a) to manage protected areas of IUCN Categories I -IV, and other PAs in cooperation with other institutions; (b) maintaining and supervising PAs; (c) PA system and capacity development planning, and (d) the development of plans, draft laws and guidelines related to PAs. APA is part of the Ministry for Environmental Protection and Natural Resources (MEPNR). In legal status of APA is a legal entity of public law of Georgia, established in 2008.

Capacities APA manages independently all protected areas in Georgia. According to the APA records these are 8 National Parks(256 534 ha), 14 State Nature Reserves (141 473 ha), 12 Managed Reserves (61 158 ha), and 14 Natural Monuments (317 ha), 2 Protected Landscapes (34 510 ha) in total 493 988.76 ha. APA’s current staff is:

Field of Expertise Staff in APA HQ PA Directors

Law, Business Administration and Economics 14 58 % 5 28 %

Forestry, timber industry 1 4 % 6 33 %

Technical engineering 5 28 %

Biology and Ecology 4 17 % 1 6 %

Politics and Communication 3 13 % 1 6 %

Tourism Management 1 4 %

Landscape planning, Resources management 1 4 % planning

The capacity of the Kazbegi NP Administration to fulfil its mission is extremely limited. There are 12 staff, nine of which are rangers. Kazbegi NP does not have a separate budget but is financed from the APA budget (30,000 Gel/annum with no funds available for operations). The physical infrastructure of the administration is extremely limited and in poor condition.

Structure APA is lead by a chairman with two deputies. The agency consists of 7 divisions, covering planning, development, internal monitoring, administration, marketing and public relations, economics, juridical and additionally the supervision of territorial services.

The administration of APA, as is probably true for most government agencies in Georgia, is strictly centralised and following a hierarchical structure. Decisions are made on the highest level, at least for the formal procedures. Delegation of responsibility is in most Georgian Government Institutions not exercised, delegation remains on the level of tasks, responsibility and power of signature remains with the head of agencies.

Interests The government agencies are by nature all connected and formally follow the central government policy on land management and resources use and protection. As supervising agencies they are sharing a strong feeling for need of control of users of land and resources, since they are to ensure its continued existence. Their goal is an improved and complete protection of the resource and land under a strong central institution.

Power The complex situation of establishing a regional system of protection with different categories of area protection and area management involves a number of government agencies, which have in a local representation to exercise their power of control and supervision on the lowest level. All organisations may block a project with a diverse approach through narrow interpretation and application of their internal rules.

Risks The diverse responsibilities for managing the different area types and resources in the project area (as indicated in the graph above) it will be necessary to maintain good communication lines and communication and decision making procedures for the implementation of a complex project involving different users and different administrations. Here is room for capacity building and improvement, since communication and decision making procedure in centralised government is usually a one direction communication. Depending on good communication and arrangements for decision making procedures, the project may succeed or fail. This diversity constitutes the major risk for the project regarding organisation and implementation arrangements.

For detailed description please refer to Annex 5.1.

5.3 Organizational Set-up General aspects The integrated project design, aiming at the consolidation of biodiversity conservation and sustainable economic development results in a differentiated share of administration

and management tasks involving a broad range of stakeholders, according to the following areas of responsibility: a) National Park: the strengthening/ redefinition of Kazbegi National Park, establishment of co-management structures b) Further Conservation Areas: establishment of additional conservation areas in order to protect identified areas of high conservation value c) Community based hunting cooperative: co-management/ involvement of the local population in natural resource management d) Support zone: empowerment in regard of eco-tourism and livelihood stabilization and integrated community development; model sites e) Planning Area: Mainstreaming of biodiversity conservation and enhancement of regional development through integrated Participatory Land Use Planning; support of stakeholder institutions in regard of road access, waste management, sewage treatment, energy supply, land title registration

The decentralisation of management and implementation responsibility to the lowest level possible is recommended in order to achieve greater efficiency, effectiveness, accountability and ownership. At the same time, the devolution of responsibility must be in line with sufficient capacity (in terms of financial/ human resources and authority). There- fore the institutional set-up and coordination arrangements need to take into account the following aspects: · adequate structures in terms of legitimisation (authority/ representation of involved interest groups) · adequate communication/ coordination structures and transparent decision making processes · allocation of financial resources/ co-funding · capacity building and knowledge sharing

Figure 14 shows the organizational structure of the proposed project.

Figure 14: Organizational structure

The Ministry of Environment Protection and Natural Resources (MEPNR) shall be the Project Executing Agency. The Agency of Protected Areas (APA) will be the Project Implementing Agency with full responsibility for the technical and operational project implementation.

In order to overcome the above mentioned capacity constraints and to support and facilitate the project implementation, a Project Administration office shall be established, responsible for the coordination of meetings and overall project administration. A Project Advisory Board functions as coordination mechanism. At District level, the Kazbegi National Park Administration, the Environmental Protection Inspectorate and the administration of the local government are in charge of Project affairs, according to their administrative responsibility.

Regarding the intended strenghthening of co-manangement, the projcet forsees to establish a Kazbegi National Park and Support Zone Management Board and a Community Based Hunting Cooperative (Chapter 4.7.1.2) in order to involve local stakeholders in natural resource management, after having achieved the necessary framework adjustments. Close collaboration with NGOs (Mountain House, Elgkana) and further institutions is recommended in the frame the support zone development. Table 19 summarizes the main stakeholders to be involved.

Table 19: Share of Responsibility and Tasks National Park Conservation Areas Community Based Support Zone Planning Area Hunting Cooperative Responsible MEPNR/ APA MEPNR/ Inspection Unit of Ministry of Economic Office of the State Ministry of Regional Institution Environmental Protection Development/ Representative – Governor in Development and Department of Natural Mtskheta-Mtianeti Region Infrastructure (MRDI) Resources Licensing Further Ministries MEPNR/ Inspection Unit of MEPNR/ APA; MEPNR/ APA; Sector Ministries (Department of Ministry of Agriculture/ to be involved Environmental Protection; MEPNR/ Biodiversity MEPNR/ Biodiversity Tourism and Resorts; Ministry of Departure of Regional MEPNR/ Biodiversity Protection Division Protection Division Agriculture/ Department of Development Protection Division; Regional Development; Ministry Department of Tourism and of Energy) Resorts; Ministry of Internal Affairs Local political Kazbegi NP Administration MEPNR/ Inspection Unit of Cooperative Sakrebulo and Gamgeoba As MRDI has no local units, and Environmental Protection Management board (to it needs to be represented administrative be established) by the State Representative representation – Governor in Mtskheta- Mtianeti Region Territorial site Kazbegi NP Administration MEPNR/ Inspection Unit of Community Based Sakrebulo and Gamgeoba; local Sakrebulo and Gamgeoba/ and land use Environmental Protection Hunting Cooperative (to population; specific associations local communities management NP-Co-Management board be established) in regard of proposed measures (to be established) (guest house owners and others active in the tourism sector; livestock breeders and pastoralists; diary producers-/ beekeepers-/ niche product associations; Stakeholders to TJS; GTZ (FairWild); TJS Local Hunters Orthodox Church (for its All Land users; be involved Livestock breeders and Environmental NGOs engagement in agriculture); Orthodox Church (as pastoralists; GTZ (FairWild); CSD; Private opinion leader) GTA; Sector; GTA; NGOs related to ADB (water sector NGOs related to Tourism rural development/ tourism rehabilitation/ sewage) (Mountain House) (Mountain House, ELKANA, USAID (land tenure) People in Need, JSDF); Cooperative Shops in Tbilisi Financial · Government Contribution · Government Contribution · Hunting licenses · diverse · Government Contribution Contribution · CPAF · CPAF · Donors · Tourism, · Donors · Gazing Right Lease · Millenium Challenge · Donors Georgia Fund

5.4 Institutional Arrangements In the Georgian Law for PA it is stated that Protected Areas are managed by the Agency of Protected Areas. The Agency has the authority: · to manage all PAs, including Biosphere Reserves, · “in exceptional cases”, to manage BRs together with the other organizations; · to control Multiple Use Areas; · to cooperate with the governmental and non-governmental organizations of relevant functions; · to cooperate with wide sections of the society; · to organize monitoring, scientific research, processing of observation data, stor- ing and dissemination;

The Protected Areas Agency carries out the management by means of territorial administrations. The scientific-advisory board can be established at administrations.

Legal provisions (contractual agreements) have to be made to ensure that the APA manages the PA Kazbegi together with the local population and their Peoples Organizations, the local Government and with NGOs. The different activities, which are different from the direct management of a BR or NP, such as the waste management or the electricity supply have to be arranged with the local government. It would of course be necessary to make contractual arrangements to define responsibilities and contributions, and it will be necessary to make arrangements with APA as project implementing agency to directly channel expenses to the users and implementers of these activities. It would be sensible to have a contracted consultant to manage these funds to avoid channelling funds through too many government offices with all the delays and administrative obstacles they would form.

As detailed in the stakeholder analysis, there is a sound legal basis of the law of Georgia on Protected Areas (1996). The centralization of the management mandate in the APA as a single institution and the increased financing from the State budget over recent years provide a good foundation for further capacity development, some overlap and discrepancies with other legislation, the lack of implementing legislation, the limited institutional memory of APA and missing specialist qualifications (e.g. management planning) constrain this capacity development. Contractual arrangements have to define the contributions of APA to the project implementation, qualification and expertise missing is management and management planning, which thus has to be provided by consultants. Contributions of APA definitely have to be substantial for formulation and processing of legal proposals complementary to the existing laws, where the participatory approach and involvement of local population and NGOs is implemented.

Based on the 2005 Law on State Control of Environment Protection, the Environment Protection Inspectorate started its functioning as state sub agency of the Ministry of

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Environment and Natural resources of Georgia in 2005. The Inspectorate has the staff but not the knowledge capacity of contributing substantially to the control of enforcement of environmental protection laws. Contractual arrangements have to be made to increase their capacities, to include them into Kazbegi project implementation, and to share their inspection role with local population in a participatory approach. Their role, or a respective field office of APA has to be established and defined for the management and protection of the proposed further protection areas – such as the, for birds habitat important, sea buckthorn hedges. This role as pilot institution on field level needs to be included in cooperation arrangements for the Kazbegi project.

Cooperation between the Ministry for Tourism and NGO Mountain House and UIAA are to be fixed in contractual arrangements in order to promote local eco-tourism and to define tourism development goals in a way that enhances local populations participation in tourism development as primary actors.

These outlined contributions and proposals for APA and other stakeholders are included in the annexes, namely the Annex 1.11 and 2.5. The formulation of detailed special implementation agreements would be of course a task that requires more time input, than foreseen in the FS.

5.5 Management and Implementation Consultants A mixed team of national and international experts will manage the project. Since the focus of the project is on biodiversity conservation, nature protection and the management of the National Park, the team leader should dispose of sound experience in the international conservation network. Given the importance of target group participation, ownership and empowerment, ample experience in participative management planning including business and support zone planning as well as experience in Integrated Spa- tial Land Use Planning will be required. The role of the consultants will include to serve as farilitators or mediators between the population, local government of Kazbegi and the Implementing Agency APA, to brake the current level of mistrust and misunder- standing.

Following the above described analysis of the implementing and executing agency as well as the stakeholder analysis, input in terms of expertise will be required for appropriate and smooth implementation of the proposed project. The following fields of expertise will be required: · Project Cycle Management · Protected Areas Management · Legal and Institutional Framework · Co-Management/ Community Based NRM · Training and Capacity Building (rangers, rural associations) · Environmental Economics/ PA Financing/ Business Planning · Eco-Tourism · Branding and Marketing of Local Products; Certification

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· Animal Health / Veterinary Medicine · Dairy and Cheese Production · Bookkeeping and Business Administration · Beekeeping · Wool processing/ Fabric Production · Ecology/ Environmental Education, PR · Participatory Land Use Planning/ PRA · GIS · Civil Engineer (Hydropower, Biogas) · Purchase and Acquisition · Wastewater Management, Sewage Treatment · Freshwater Ecology · Land Survey and Cadastre · Wildlife Management

5.6 Acquisition of Goods and Services The acquisition of goods and services will follow the rules and regulations of the Geor- gian Government and of KfW under the guidelines of German Financial Cooperation.

Office space should be provided by and within the vicinity of APA and the NP Admini- stration office in Stephantsminda. Operational costs for the NP Park Administration will be shared with decreasing contribution for the German FC towards the end of the project (overall 75:25 ). The operation costs for the Project Administration office will becompletely financed through the German FC.

Office equipment for the Project Administration Office as well as two vehicle and respective operational costs are included in the overall financing plan.

Further procurement regards the equipment for the establishment of Kazbegi NP and the implementation of the eco-tourism and livelihood stabilization components (for De- tails please refer to Table 21 (Overall cost and financing).

5.7 Project Planning and Participatory Implementation Concept 5.7.1 Participatory Project Management Against the background of the development and current state of Kazbegi National Park and the lessons learned from former approaches with a rather deterministic understanding of protected areas planning and management, a highly participative approach is necessary to achieve an effectively enforced and locally accepted NP. Planning and management of the proposed project are therefore understood as processes of interaction between various stakeholders, based on a common vision. Within the project-cycle information, participation and evaluation will be integral element of all phases of the different processes.

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STATUS Where are we VISION now? Where do we Kick-off workshop want to be?

Evaluation

OUTCOME Establishment of What did we PLANNING Work-groups achieve? How are we going to get there?

Participatory Zoning

OUTPUT What products INPUTS or services did What do we we produce? need?

Follow up- MANAGE- Workshop MENT PROCESS How do we go about it?

Circulation of NP Management and Business Plan

The set-up of the steering and decision making structures will be guided by the principles of good decision-making processes (as proposed by the ecosystem approach): · All interested parties (particularly including local communities) should be involved in the process, · It needs to be clear how decisions are reached and who the decision-maker(s) is (are), · The decision-makers should be accountable to the appropriate communities of interest, · The criteria for decisions should be appropriate and transparent · Decisions should be based on, and contribute to, inter-sectoral communication and co-ordination.

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· Good decisions depend on those involved having access to accurate and timely information and the capacity to apply this knowledge.

A Start up-Team or steering committee composed of about 6 people, representing the key stakeholders (e.g. a government representative/ APA; a representative of NP Ad- ministration, a representative of local government, a community leader; a representative of a local NGO and the implementation consultant) will serve as steering structure for the project preparation phase. The members should be familiar with the region, locally accepted and dedicated to the project objectives. In order to fulfil its coordinative and integrative function, it is necessary, that the local population and further relevant stakeholder groups feel represented by or that they can communicate and trust in at least one of the start-up team members. The Start-up Team will support/ advice the administration office with the elaboration of the operation plan and prepare the multid- isciplinary stakeholder workshop.

The management planning process should be kick-started with a brain-storming multi- disciplinary stakeholder kick-off workshop. The workshop should be used as an event to agree upon a common vision for the project, to highlight current and potential problems facing the area under consideration as well as to discuss actual and potential resource- and land-use options. This would be followed by the participatory elaboration of a practical zoning concept, the design of management prescriptions for each of the chosen use zone, the planning of specific use programs and the design of a practical and simple administrative structure for the park.

The proposed support zone economic development plan is indicative of the need to empower the poor rural communities neighbouring the park who are proposed to become active partners in planning and managing the park and other conservation units to be designated in the planning area. The support zone communities will be the primary beneficiaries of the proposed economic development and the goods and services provided by the designated conservation area. All communities sharing a common boundary with the park will become part of its support zone and active partners in the planning and management of the park and support zone. The park boundaries will be discussed with all communities and fine-tuned jointly with community members in an attempt to minimize potential use restrictions.

The steps involved are summarized as follows: Step 1: Elaboration of a common vision for the target area at a multi-stakeholder kick-off workshop reflecting the long-term objective to be achieved for the target area. Step 2: Establishment of work groups at the workshop for topics and matters that need detailed participatory planning. Examples: traditional resource use inside the NP, boundary definition and demarcation, participatory management, support zone development etc. The work-groups will be composed mostly of support zone community representatives to be selected at the one-day kick-off workshop from workshop participants.

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Step 3: Elaboration of work-programs for the work-groups following the workshop. Step 4: Implementation of work programs by the work groups; 5 months time-line. Step 5: NP boundary definition involving local communities, to be ecologically sound and to be adjusted to socio-economic, cultural and legal framework conditions. Step 6: NP boundary survey and official gazettment. Step 7: NP zoning into administrative units. Step 8: Collaborative development of management programs: o Administration Program (organizational structure in accordance with identified personnel needs; definition of tasks, functions and responsibilities of staff positions). Human resources, accounting and bookkeeping, maintenance are part of this program. Defining administrative infrastructure and equipment needs. o Protection Program based on threat analysis and mitigation strategy. o Resource Use Program (covers all identified and permissible resource use opportunities in target area such as herder activity, haying, etc. o Tourism Program. o Research and Monitoring Program. o Public relations, Communication and Environmental Awareness Pro- gram. Step 9: Follow-up workshop with local stakeholders and work-groups in order to discuss work program results, identify information gaps and finalize data compilation and policy developments. Discussion of key issues not covered under zoning and/ or management programs. : Step 10: Discussion of financial matters relevant to the proposed NP business plan. Step 11: Production of draft NP Management Plan Step 12: Circulation of Management Plan amongst stakeholders for comment. Step 13: Signing Management Plan by all work group members reflecting consensus by participating stakeholders. Step 14: Finalizing Management Plan and submission to Ministry for approval of the NP. Step 15: Elaboration of NP Business Plan. The Business Plan: o Describes all proposed activities, infrastructure and equipment needs identified in the management plan by management program; o Calculates the costs of the development process; o Organizes activities and development process chronologically; o Provides operational and investment spreadsheets for a five-year period or until all development/infrastructure needs are completed; o Proposes financial strategy on how to cover expected operational and development cost; o Provides recommendations on potential revenue generation and on how to cover financial budget shortfalls.

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5.7.2 Project Cycle for Sub-Components In the frame of the above described overall project cycle, each sub-component follows the same logic, starting with (1) the definition/ specification of objectives and the range of the measures, (2) the identification of relevant actors, and if necessary the definition of selection criteria for beneficiaries, (3) the elaboration of a work plan, (4) the implementation of the measures, (5) the monitoring of the implementation process, and (6) the final evaluation of the output.

During the initial project phase, working groups for the preparation and implementation of the project components will be formed due to the specific responsibilities and interests of the target groups/ intermediaries, e g.: · Legal Framework Adjustment/ Co-Management · Integrated Land Use Planning · NP and SZ Management and Business Planning · Environmental Information Campaign · Support Zone Measures (Ecotourism, Livelihood Stabilization) · Regional Development (Land Title Registration, Waste, Sewage, Accessibility)

Once identified, the workgroup members will specify the work plan for their sup- components, regarding the required inputs, the time schedule and the expected output. If necessary, they will elaborate criteria for the selection of participants/ target communities. During the implementation phase, the mile stones that have been specified in the work plan will help to monitor the implementation progress, and to adjust the procedure or react upon unforeseen changes.

5.8 Implementation Schedule 5.8.1 Overall duration of the project The consultant recommends a total duration of the project of 5 years. While APA proposed a timeline of 3 years, lessons learnt show that similar projects related to the green sector in particular need at least 5 years to show measurable results: It will take a full year for the participatory elaboration of the management plan, support zone plan and the ISLUP process. The implementation of the various plans will take at least three years, in particular when addressing the value chain related to livestock and niche products and the corresponding infrastructure development. The infrastructure development of the proposed NP and building up the tourism sector will be a lengthy process.

5.8.2 Implementation phases It will be impossible to exactly schedule activities at this stage of the project preparation a tentative schedule is shown in the table below. The project activities visualized are connected to the achievements scheduled in the log frame. The schedule of each

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP III Draft Report Feasibility Study Kazbegi 147 activity starts with a preparatory phase, which may for some activities be an internal feasibility study or at least an expert assessment and a detailed technical design of the measure. The implementation phase of the activities are conducting the measures like campaign in the field or constructing the structures following the technical design. Each activity will be concluded with a post activity evaluation to assess the activity impact and effect, the acceptance and the success or failures of activities in comparison with the intended effect und results.

The first project year will be dominated by the implementation of the Quick Start Measures and the elaboration of the land use, management and business plans. At the same time it will be necessary to establish the project structure and project implementation support groups and their structure. Following years will be dominated by the establishment of local co-management structures and the adjustment of the legal framework accordingly. The phasing out of the project will see less technical and advisory input but more evaluation of the performance and impact of the set up structures.

Table 20: Implementation Schedule Year 1 Year 2 Year 3 Year 4 Year 5 Result / Output Area 1 Protected area regime is established and operational i ii iii iv i ii iii iv i ii iii iv i ii iii iv i ii iii iv 1.1 Legal framework adjustment 1.2 Co-management strucutures (management board) establishment 1.3 Community ranger service establishment 1.4 Business plan for protection and support/transition zone elaboration 1.5 Management plan for protection and support/transition zone elaboration 1.6 NP administration strengthening 1.7 Improving the relationship between APA and local population Result / Output Area 2 Eco-Tourism is established in the region 2.1 Improvement of quality of private guesthouse services 2.2 Establishing mountain rescue and guide service 2.3 Improvement of network of mountain huts and shelters 2.4 Improvement of marketing of tourism through branding of local products Result / Output Area 3 Livelyhood stabilization is supported 3.1 Fighting of brucella abortus is supporting(QM) 3.2 Diary production enhancing 3.3 Local beekeeping is improvement 3.4 Supporting of wool processingsupporting 3.5 Supporting of ollection and marketing of cullinary herbs and medical plants 3.6 Establishing of pilot project using biogas for greenhouses Result / Output Area 4 Regional development and stakeholder institutions are supported 4.1 Conducting environmental awareness and project information campaign 4.2 Implementing participatory and integrated spatial land use planning 4.3 Improvement of accessibility on roads during winter 4.4 Improvement of regional waste management 4.5 Establishing village energy supply of Djuta village as model 4.6 Improving sewage treatment in the region 4.7 Supporting Land title registration 4.8 Community based hunting cooperative establishment

Preparatory Phase / Internal feasibility studies / Design of the measure Main Implemenation Phase / application of design / conduct of activities Post implemenation evaluation / assessement of impact / lessons learnt

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6. PROJECT COSTS AND FUNDING

6.1 Overall Project Costs The estimated costs of the project are displayed in the draft budget below (see Table 21). The overall budget amounts to 4.769.039 EUR. Around 91,6% of the total costs, respectively 4.390.351 Euro have been allocated to project measures (including Geor- gian co-financing). Price and physical contingencies amount to 400.000 € or 8,4% of the total project costs.

Around 187.021 € or 3.9% of the total costs have been allocated to the proposed quick start measures, which have been elaborated in a participatory manner in order to achieve quick positive impacts for the local population. The lion shares of the spending in equipment (651,543 € or 13.7%), training (233.697 € or 4.9%) and operational costs (889.916 € or 18.7%) for the implementation of the livelihood components will directly benefit the local population. 948.636 € or 19.9% are allocated to the enforcement and expansion of Kazbegi National Park, including costs for the production of image media for PR. Included in the budget line Project Management are the costs for office operations of the Project Administration office, the production of reports and implementation of dissemination workshops.

The costs for Project Management are estimated at 298.380 € over a 5 – years project period. The costs for consultancy service are estimated at 661.125 €. This budget line is all-inclusive (fees, per-diems, accommodation, international travels).

Details on the costs of proposed measures/ investments and the suggested finance allocation are given in Table 21. An exchange rate of EURO / GEL of 1 / 2,35 is used for the calculation.

6.2 Phasing of Project Costs The project expenditures will be phased over a period of at least 5 years. Costs for the establishment of the Project Administration Office (recruitment of personnel, equipment, purchase of vehicle) and for the implementation of the proposed Quick Start Measures will be due during the first year.

Costs for the identified “Priority Interventions”, namely (i) the environmental awareness and information campaign, the development of (ii) the Management Plan and (iii) the Business Plan for Kazbegi National Park and Support / Transition Zone and of (iv) the participatory Integrated Spatial Land Use Planning will also occur in the first year and increase in the second year.

In the second year, upon advanced development of the Management and Business Plan of Kazbegi NP and Support/ Transition Zone, expenditures for NP infrastructure and equipment will increase.

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Expenditures for the implementation of further project components in the field of ecotourism development (Mountain Huts and Shelters; Mountain Rescue Service, Market- ing), of livelihood stabilization (milk and cheese processing, pasture improvement, bee keeping, wool processing, herbs and medical plants) and of regional development (land title registration, accessibility of roads, sewage treatment, community based hunting cooperative) will increase in year 2-4.

Continuous costs over the project period comprise project management, operation costs for the project office and NP administration office, vehicle operational expanses, and consultancy.

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Table 21: Overall Cost and Financing Plan

Project Cost Project Financing Total Cost Unit Cost Georgian Financing German Grant Financing Description Unit Quantity GEL GEL Euro % GEL Euro % GEL Euro % Euro % 1 Quickstart Measures 438.750 187.021 80,2% 87.750 37.404 4% 351.000 149.617 4% 187.021 3,9% 1.1 Brucellosis Campaign no 2 190.000 380.000 161.978 3,4% 76.000 32.396 20% 304.000 129.582 80% 161.978 3,4% 1.2 Private Guesthouse Development d 25 2.350 58.750 25.043 0,5% 11.750 5.009 20% 47.000 20.034 80% 25.043 0,5% 2 Kazbegi National Park Measures 2.225.500 948.636 18,2% 344.000 146.633 15% 1.881.500 802.003 21% 948.636 19,9% Kazbegi NP Management Plan, Business 2.1 Plan and Support Zone Plan d 125 1.500 187.500 79.923 1,7% 18.750 7.992 10% 168.750 71.931 90% 79.923 1,7% 2.2 Infrastructure 1 1.450.000 1.450.000 618.073 13,0% 290.000 123.615 20% 1.160.000 494.458 80% 618.073 13,0% 2.3 Equipment 1 235.000 235.000 100.171 2,1% 35.250 15.026 15% 199.750 85.145 85% 100.171 2,1%

2.4 Promotion/PR - Image Media NP-APA-KfW no 1 353.000 353.000 150.469 3,2% 0 0 0% 353.000 150.469 100% 150.469 3,2% 3 Transportation 1.170.000 498.721 1,5% 100.000 42.626 4% 1.070.000 456.095 12% 498.721 10,5% 3.1 Vehicle procurement (4WD) no. 2 85.000 170.000 72.464 1,5% 0 0 0% 170.000 72.464 100% 72.464 1,5% 3,2 Vehicle Operational Expense km 400.000 3 1.000.000 426.257 8,9% 100.000 42.626 10% 900.000 383.631 90% 426.257 8,9% 4 Equipment 1.528.521 651.543 13,7% 263.404 112.278 12% 1.265.117 539.265 14% 651.543 13,7% 4.1 Milk Processing no 1 164.500 164.500 70.119 1,5% 0 0 0% 164.500 70.119 100% 70.119 1,5% 4.2 Cheese Processing no 1 47.000 47.000 20.034 0,4% 0 0 0% 47.000 20.034 100% 20.034 0,4% 4.3 Pasture Improvement ha 1000 70 70.000 29.838 0,6% 14.000 5.968 20% 56.000 23.870 80% 29.838 0,6% 4.4 Greenhouses - Biogas no 2 11.750 23.500 10.017 0,2% 4.700 2.003 20% 18.800 8.014 80% 10.017 0,2% 4.5 Training Facility in Stephantsminda no 1 120.000 120.000 51.151 1,1% 24.000 10.230 20% 96.000 40.921 80% 51.151 1,1% 4.6 Mountain Huts & Shelters no 1 50.000 50.000 21.313 0,4% 10.000 4.263 20% 40.000 17.050 80% 21.313 0,4% 4.7 Snow Plough no 1 115.000 115.000 49.020 1,0% 23.000 9.804 20% 92.000 39.216 80% 49.020 1,0% 4.8 Latrine Improvement Support no 1000 300 300.000 127.877 2,7% 60.000 25.575 20% 240.000 102.302 80% 127.877 2,7% 4.9 Hydro-Electric Power Plant Djuta no 1 126.900 126.900 54.092 1,1% 25.380 10.818 20% 101.520 43.274 80% 54.092 1,1% 4.10 Waste Management Component d 1 386.621 386.621 164.800 3,5% 77.324 32.960 20% 309.297 131.840 80% 164.800 3,5% 4.11 Office Equipment L.s. 1 75.000 75.000 31.969 0,7% 15.000 6.394 20% 60.000 25.575 80% 31.969 0,7% 4.12 Others (e.g. wool processing) L.s. 1 50.000 50.000 21.313 0,4% 10.000 4.263 20% 40.000 17.050 80% 21.313 0,4% 5 Project management incl. Audit yr 5 140.000 700.000 298.380 6,3% 175.000 74.595 25% 525.000 223.785 75% 298.380 6,3% 6 Operational Cost yr 5 2.087.740 889.916 18,7% 908.075 387.074 15% 1.179.665 502.842 85% 889.916 18,7% 6.1 Environmental Information Campaign d 30 1.408 42.240 18.005 0,4% 0 0 0% 42.240 18.005 100% 18.005 0,4% 6.2 Integrated Spatial and Land Use Planning d 60 1.500 90.000 38.363 0,8% 9.000 3.836 10% 81.000 34.527 90% 38.363 0,8% 6.3 Milk Processing yr 5 37.000 185.000 78.858 1,7% 27.750 11.829 15% 157.250 67.029 85% 78.858 1,7% 6.4 Training Facility in Stephantsminda yr 5 37.000 185.000 78.858 1,7% 27.750 11.829 15% 157.250 67.029 85% 78.858 1,7% 6.5 Hunters' Association yr 5 20.000 100.000 42.626 0,9% 15.000 6.394 15% 85.000 36.232 85% 42.626 0,9% 6.6 Mountain Resque Service yr 3 23.500 70.500 30.051 0,6% 10.575 4.508 15% 59.925 25.543 85% 30.051 0,6% 6.7 Operational Costs Community Rangers yr 5 20.000 100.000 42.626 0,9% 15.000 6.394 15% 85.000 36.232 85% 42.626 0,9% 6.8 Land Title Registration yr 1 470.000 470.000 200.341 4,2% 70.500 30.051 15% 399.500 170.290 85% 200.341 4,2% 6.9 NP Staff Salaries- Management yr 5 94.000 470.000 200.341 4,2% 470.000 200.341 100% 0 0 0% 200.341 4,2% 6.10 NP Staff Salaries Administration yr 5 45.000 225.000 95.908 2,0% 225.000 95.908 100% 0 0 0% 95.908 2,0% 6.11 Operational Costs NP yr 5 30.000 150.000 63.939 1,3% 37.500 15.985 25% 112.500 47.954 75% 63.939 1,3% 7 Training 548.250 233.697 4,9% 7.500 3.197 0% 540.750 230.500 6% 233.697 4,9% 7.1 Milk Processing yr 5 2.350 11.750 5.009 0,1% 0 0 0% 11.750 5.009 100% 5.009 0,1% 7.2 Cheese Production yr 5 2.350 11.750 5.009 0,1% 0 0 0% 11.750 5.009 100% 5.009 0,1% 7.3 Community ranger Corps yr 5 21.000 105.000 44.757 0,9% 0 0 0% 105.000 44.757 100% 44.757 0,9% 7.4 Selective Breeding - Cattle yr 5 4.700 23.500 10.017 0,2% 0 0 0% 23.500 10.017 100% 10.017 0,2% 7.5 Production of Kitchen/Medicinal Herbs yr 5 2.350 11.750 5.009 0,1% 0 0 0% 11.750 5.009 100% 5.009 0,1% 7.6 Beekeeping yr 5 2.350 11.750 5.009 0,1% 0 0 0% 11.750 5.009 100% 5.009 0,1% 7.7 Wool Processing yr 5 2.350 11.750 5.009 0,1% 0 0 0% 11.750 5.009 100% 5.009 0,1% 7.8 Maintenance of Biogas Plants - yr 5 1.000 5.000 2.131 0,0% 0 0 0% 5.000 2.131 100% 2.131 0,0% 7.9 Marketing of Rural Products yr 5 4.700 23.500 10.017 0,2% 0 0 0% 23.500 10.017 100% 10.017 0,2% 7.10 Rural Associations' Capacity Development yr 5 44.500 222.500 94.842 2,0% 0 0 0% 222.500 94.842 100% 94.842 2,0% 7.11 Training Hunters' Association yr 5 5.000 25.000 10.656 0,2% 0 0 0% 25.000 10.656 100% 10.656 0,2% 7.12 Land Title Reg. Awareness Campaign yr 2 5.000 10.000 4.263 0,1% 0 0 0% 10.000 4.263 100% 4.263 0,1% 7.13 APA Capacity Development yr 5 15.000 75.000 31.969 0,7% 7.500 3.197 10% 67.500 28.772 90% 31.969 0,7% 8 Consultancy 1.551.000 661.125 13,9% 0 0 0% 1.551.000 661.125 17% 661.125 13,9% 8.1 National Consultancy PM 36 11.750 423.000 180.307 3,8% 0 0 0% 423.000 180.307 100% 180.307 3,8% 8.2 International Consultancy PM 24 47.000 1.128.000 480.818 10,1% 0 0 0% 1.128.000 480.818 100% 480.818 10,1% Sub Total 10.249.761 4.369.039 157,3% 1.885.729 803.806 84% 8.364.032 3.565.233 93% 4.369.039 91,6% 9 Contingencies 351.900 150.000 16% 586.500 250.000 7% 400.000 8,4% 9.1 Physical & Price Contingencies 938.400 400.000 351.900 150.000 16% 586.500 250.000 7% 400.000 8,4% Total 11.188.161 4.769.039 157,3% 2.237.629 953.806 20,0% 8.950.532 3.815.233 80,0% 4.769.039 100,0%

Exchange Rate 1 € = 2,35 GEL As per exchange rate March 2010

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Table 22: Flow of Funds Year 1 Year 2 Year 3 Year 4 Year 5 Description i ii iii iv i ii iii iv i ii iii iv i ii iii iv i ii iii iv 1 Quickstart Measures 1.1 Brucellosis Campaign 1.2 Private Guesthouse Development 2 Kazbegi National Park Measures 2.1 Kazbegi NP Management Plan, Business Plan and Support Zone Plan 2.2 Infrastructure 2.3 Equipment 2.4 Promotion/PR-Media NP-APA-KfW 3 Transportation 3.1 Vehicle procurement (4WD) 3.2 Vehicle Operational Expense 4 Equipment 4.1 Milk Processing 4.2 Cheese Processing 4.3 Pasture Improvement 4.4 Greenhouses - Biogas 4.5 Training Facility in Stephantsminda 4.6 Mountain Huts & Shelter 4.7 Snow Plough 4.8 Latrine Improvement Support 4.9 Hydro-Electric Power Plant Djuta 4.10 Waste Management Component 4.11 Office Equipment 4.12 Others 5 Project management incl. Audit 6 Operational Cost 6.1 Environmental Information Campaign 6.2 Integrated Spatial and Land Use Planning 6.3 Milk Processing 6.4 Training Facility in Stephantsminda 6.5 Hunters' Association 6.6 Mountain Resque Service 6.7 Operational Costs Community Rangers 6.8 Land Title Registration 6.9 - 6.11 Operational Costs NP 7 Training 7.1 Milk Processing 7.2 Cheese Production 7.3 Community Ranger Corps 7.4 Selective Breeding - Cattle 7.5 Production of Kitchen/Medicinal Herbs 7.6 Beekeeping 7.7 Wool Processing 7.8 Maintenance of Biogas Plants - Greenhouses 7.9 Marketing of Rural Products 7.10 Rural Associations' Capacity Development 7.11 Training Hunters' Association 7.12 Land Title Reg. Awareness Campaign 7.13 APA Capacity Development 8 Consultancy 8.1 National Consultancy 8.2 International Consultancy Sub Total 9 Contingencies Not allocated 9.1 Physical & Price Contingencies Total

Preparatory Investment Phase (approx. 15% of total spread over time) Main Investment Phase (approx. 70 - 75% of total spread over time) Post Investment Phase (approx. 10 - 15% of total spread over time) Main Deployment Phase Intermittent Deployment Phase

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6.3 Overall Financing and Sources 6.3.1 Contribution of the German Financial Cooperation Due to the intergovernmental consultation in May 2008 it was agreed to assist Georgia in the implementation of the proposed project with a grant of up to € 4 millions under German Financial Cooperation.

6.3.2 Contribution of Government of Georgia As indicated in the overall cost and financing plan, the consultant proposes a counter- part contribution through the Government of Georgia of 20% (up to 955.000,00 €) in addition to the contribution of the German FC. For details please refer to Table 21.

6.3.3 Beneficiary Labour Contributions Due to the specific requirements of the sub components, the beneficiary contributions mainly consist in field assistance, construction work, technical labour and local transport. The total value of labour contributions is estimated of up to 307.500 €, which makes 18% of the total costs of all measures that are suitable for in-kind contributions from local beneficiaries. Thus, the local population contributes up to 32% to the Geor- gian share through in-kind, while the remaining 68% consist in Government contributions in terms of salaries, operational costs and further costs. The beneficiaries contributions constitute 6% of the total project costs.

The following table provides and overview over the estimated beneficiary contributions:

Description Total Cost of Measure Beneficiary Contribution (including labour) GEL Euro GEL Euro % of total cost 1 Quickstart Measures 438.750 187.021 87.750 37.404 20% 1.1 Brucellosis Campaign (Field Assistance Labour) 380.000 161.978 76.000 32.396 20% 1.2 Private Guesthouse Development (Construction workers, etc.) 58.750 25.043 11.750 5.009 20% 2 Kazbegi National Park Measures 1.543.750 658.035 299.375 127.611 19% 2.1 Kazbegi NP Management Plan (Field Assistance Labour) 93.750 39.962 9.375 3.996 10% 2.2 Infrastructure (Construction workers, etc.) 1.450.000 618.073 290.000 123.615 20% 4 Equipment 1.007.021 429.250 201.404 85.850 20% 4.4 Greenhouses - Biogas (Construction workers, etc.) 23.500 10.017 4.700 2.003 20% 4.5 Training Facility in Stephantsminda (Construction workers, etc.) 120.000 51.151 24.000 10.230 20% 4.6 Mountain Huts & Shelters (Construction workers, etc.) 50.000 21.313 10.000 4.263 20% 4.8 Latrine Improvement Support (Construction workers, etc.) 300.000 127.877 60.000 25.575 20% 4.9 Hydro-Electric Power Plant Djuta (Construction workers, etc.) 126.900 54.092 25.380 10.818 20% 4.10 Waste Management Component (Construction workers, etc.) 386.621 164.800 77.324 32.960 20% 6 Operational Cost 915.500 390.239 132.825 56.618 15% 6.2 Integrated Spatial and Land Use Planning (Field Assistance Labour) 90.000 38.363 9.000 3.836 10% 6.3 Milk Processing (Technical labour, local transport, etc.) 185.000 78.858 27.750 11.829 15% 6.5 Hunters' Association (Field Assistance Labour) 100.000 42.626 15.000 6.394 15% 6.6 Mountain Resque Service (Availability of local life guards) 70.500 30.051 10.575 4.508 15% 6.8 Land Title Registration (Field Assistance Labour) 470.000 200.341 70.500 30.051 15% Sub-Total: 3.905.021 1.664.545 721.354 307.483 18%

6.4 Financial Arrangements Disbursement of Funds The Disbursement of Funds shall follow the Disbursement Proccedure in accordance with the Guidelines of KfW for the Disbursement of Funds of the Financial Cooperation of the Federal Republic of Germany.

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The disbursement of Consulting Services shall be made under the Direct Disbursement Procedure up to the estimated amount of 661,125 €.

For all other project components disbursement shall be made under the Disposition Fund Procedure up to the remaining costs of about 4,107,914 €.

In accordance with the above mentioned guidelines, the disposition funds acoounts should be kept in Euros to hedge against the risk of currency devaluation. It is recommended that MEPNR will arrange for a speccial account to be opened, which will be kept in the name of the Implementation Consultant in order to simlify the operation of the Project Administration Office and the project implementation process.

Details of such an arrangement should be specified in “Supplementary Conditions”, to form an integral part of the Separate Agreement between KfW and MEPNR.

Payments to Beneficiaries Payments to beneficiaries will consist in most cases of payments for goods and materials, or for technical services. Disbursement of these payments should be made through the project administration upon contractual arrangements by the benenficiaries and invoice from the providers. All payments should be enacted only after thorough check of arrangements, check for consistence with project planning documents and project budget. Other payments may be channelled through a local bank which has to be identified during the initial project implementation phase.

6.5 Financial Monitoring Independend auditor In accordance with KfW guidelines of the Disposition Fund Procedure, a specific audit of the disposition fund must be performed regularly by and independent auditor, in order to examine weather the Disposition Fund has been managemd properly. The auditer’s report shall be submitted to MEPNR and KfW.

Financial Management and Controlling The PEA, respectively the Implementation Consultant (if the special account for the Disposition fund is kept in the name of the Implementation Consultant) must have an adequate financial management and controlling system, in order to meet the requirements of the KfW Disposition Fund Procedure.

A financial monitoring system shall be installed jointly with MEPNR/ APA to effectively monitor budgets, cash flow and expenditures. A Financial Management Guideline shall be prepared with detailed operations and financial management procedures for the different levels of project implementation. The international standards of bookkeeping as approved by the International Committee of Book-Keeping Standards and as recog-

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP III Draft Report Feasibility Study Kazbegi 154 nized by the Government of Georgia (Article 3 of the “Law of Georgia on Regulation of Bookkeeping and Accounting”), will be used as basis for bookkeeping and preparation of financial statements and project reports.

The Project Administration Office will therefore provide a book keeper, responsible for the accuracy and transparency in book keeping, the timely disbursement of funds/ re- imbursements to the project components, and the accurate and timely information on the status of the Project in an appropriate standardized reporting format and due to KfW requirements. The consolidated financial reports will be ready for inspection by the independend auditor and will be available on request of KfW.

In addition, a Financial Management Specialist shall provide training on detailed financial management procedures in order to secure correct and transparent financial management. Cost control/ cash flow management techniques will be developed to facilitate the preparation of the plan of operations and to assist annual budgeting.

6.6 Exit Strategy The exit strategy is to achieve sustainable financing for all proposed interventions, local acceptance and ownership in the project goals and objectives and an effective and efficient co-management organizational structure for the conservation areas and support zone that is fully supported by the Government and anchored in the national legislation.

Except for the proposed expansion of Kazbegi National Park and related activities financial sustainability has been in-built into all proposed interventions for the Kazbegi support zone and region. The financial sustainability of the Kazbegi National Park and affiliated sanctuaries located in its support zone will be subject of the proposed business plan for Kazbegi National Park to be elaborated within the framework of the project. A management plan and a supporting business plan are two key requisites qualifying a National Park to apply to the Caucasus Protected Area Fund (CPAF) for financial support to be used to cover budgetary financial shortfalls.

The CPAF is a start-up conservation trust fund that is devoted to nature protection in the South Caucasus. Its initial sponsors are the German Government (BMZ/ KfW), WWF Germany (which received a portion of its funding from WWF Netherlands), Con- servation International (CI) in the United States, and the multi-lateral Critical Ecosys- tems Partnership Fund. For details on the current status of the CPAF and opportunities to apply for funding once the Kazbegi National Park has been established as a recognized viable ecological entity see Annex 5.5.

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7. RISK ASSESSMENT AND MITIGATION OPPORTUNITIES 7.1 Project Level Risks The introduction of co-management structures and participatory approaches in management of protected areas bears some risk for the project itself. Co-management and participation are not the standard repertoire of government institutions in Georgia and thus neither they nor the local population has any experience with it.

Integration into the regional protected area development is a risk that can be considered as minimal, since the region presently enjoys attention and support of the international community to ensure the rare fauna and flora of the Caucasus is maintained and protected.

Cross boundary effects are a risk for the success of the project. Especially changes of the boundary crossing situation for local population or their animals will have an effect on the project success, when former winter quarters for sheep may be available again, or herders from regions with good winter quarters will press into the mountain regions in summer times. These winter quarters are now in Russia and it is not to be expected that the boundaries will be open again for easy crossing for herders, as was the situation in the Soviet Union times.

A change of transit situation related to the opening of the boundaries for traffic of goods from and to Russia will have an impact on the income situation of the local population, since it may be expected that small shops, restaurants and hotels can open business with truckers and other travellers. The impact on the environment may be limited to increase of waste and garbage, increase of water use and waste water and increased need for energy and heating. The impact thus may be also extended to forest resources to produce fuel wood. The management plan for the envisaged National Park has to consider and ensure protection of forest resources.

The economic development as expected, especially regarding the prices for animal husbandry products and tourism related products are a general risk for the project success. The general economic development in the region but also worldwide will have an impact on the implementation of some of the proposed measures. The risk still is limited, since the expectation on the development of the regional and world economy are included moderately in the project design. Only extreme economic development will cause a shortfall of expected hunting and hiking tourism or a change in the management of animal husbandry.

7.2 Other Risks There is a planning risks, since the project deals with land use planning and development of National Park management plan. These results are at risk when availability of necessary resources is not ensured and approval procedures are not transparent and in time. This risk is strongly related to stable government in Georgia and willingness to

Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project Draft Report GEO - ERP III Draft Report Feasibility Study Kazbegi 156 adopt proposed planning procedures and results on the level of respective government institutions. The government institutions are not very flexible in accepting new procedures, since any changes are always related to the need of changing laws.

Recognition and establishment of APA as partner by the local co-management partners is a risk that can be considered low, when the project implementation with the support of foreign consultancy does not only concentrate on technical issues but also on trust building measures and introduction of participatory methods reinforced with sufficient training for local partners as well as APA officers on all levels.

Local acceptance of protected area and adherence to NP plan and other use restrictions is a risk, especially when the local population feels deprived of traditional user rights without appropriate compensation and income generating possibilities in other fields of using their land. This risk grows with the risk of changing economic development mentioned above.

If it may be expected that there is a shortage in the availability of appropriate budget for NP management after project closure to ensure the continuation of sustainable management and assistance of local partners and population, the participation of those during the life time of the project will also not be enthusiastic and their support not be as needed for successful project implementation. This risk can be considered very limited, since the Caucasus Protected Area Fund (CPAF) is now established.

7.3 Mitigation Measures Careful introduction of participatory approaches accompanied with training and demonstration of possibilities and successful cases by experienced consultants and trainers is a first step to ensure the acceptance and success of the proposed project and local participation in managing and protecting the valuable landscape and rare fauna and flora of Kazbegi Municipality.

Integration of NP management and management plan into regional development plans especially considering the transit traffic and its effects on use of local resources, environmental pollution and garbage production can limit the negative impact of opening the boundary to Russia.

Demonstrating the tangible and intangible benefits of project interventions and the establishment of the proposed conservation areas are expected to ensure active local stakeholder participation in the planning and implementation process and most important, empowerment of local people. The latter can only be accomplished through a co- management agreement with equal representation of the local communities on a multi- stakeholder Management Board empowered to guide the management of the conservation areas and the development process of its support zone.

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Full commitment of APA to co-management and participatory approaches should ensure the approval of land use and management plans in short time, and with that also the local acceptance of the plans.

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8. CONSULTANT VOTUM

8.1 Consultant Votum The Consultant has come to the conclusion that the optimum approach to reaching the overarching goals and objectives of the proposed project ( sustainable development of the Kazbegi Region to be harmonized with the needs for nature protection) requires the expansion and strengthening of the existing Kazbegi National Park, the protection of other identified key conservation areas, and the designation and sustainable development of a national park support zone which includes all 25 communities located in the target area. Furthermore that a critical prerequisite to success and the development of local ownership will be the creation of a multi-stakeholder Kazbegi National Park Man- agement Board with equal representation of local communities.

8.2 Definition of Pre-Conditions

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