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619640Pjpr0p100e0only0900 Document of The World Bank Public Disclosure Authorized FOR OFFICIAL USE ONLY Report No: 61964-MG PROJECT PAPER ON A PROPOSED ADDITIONAL IDA CREDIT IN THE AMOUNT OF SDR26 MILLION (US$42 MILLION EQUIVALENT) Public Disclosure Authorized AND A PROPOSED ADDITIONAL GRANT FROM THE GLOBAL ENVIRONMENT FACILITY TRUST FUND IN THE AMOUNT OF US$10.0 MILLION TO THE REPUBLIC OF MADAGASCAR Public Disclosure Authorized FOR THE THIRD ENVIRONMENTAL PROGRAM SUPPORT PROJECT (EP3) May 19, 2011 Public Disclosure Authorized This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective April 30, 2011) Currency Unit = US dollars SDR 0.61692 = US$1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS AF Additional financing ANGAP Association Nationale pour la Gestion des Aires Protégées (now Madagascar National Parks) CAS Country Assistance Strategy CAZ Corridor Ankeniheny Zahamena CELCO EP3 Project Coordination Unit CI Conservation International CLP Comités locaux de parcs; Community Park Committee CLS Comités locaux de surveillance; Community Surveillance Committee COBA Community Forestry Management Group COFAV Forestry Corridor Fandriana Vondrozo COSAP Park Support Committee DEAP Protected area visitor entry fees DGE Directorate General of Environment DGF Directorate General of Forests DSAP Directorate General of the Protected Area Network EMP Environmental Management Plan EP3 Madagascar Third Environmental Program Support Project ERR Economic rate of return ESMF Environmental and Social Management Framework FAPBM Madagascar Foundation for Protected Areas and Biodiversity; the Foundation FCPF Forest Carbon Partnership Facility FM Financial management GEF Global Environment Facility GEO Global Environment Objective IDA International Development Association IFC International Finance Corporation IPDP Indigenous Persons Development Plan ISN Interim Strategic Note IUCN International Union for Conservation of Nature KfW Kreditanstalt für Wiederaufbau LiDAR Light Detection and Ranging MAP Madagascar Action Plan Mamabay Landscape in the northeast of Madagascar comprising Masoala National Park, Makira Forestry Corridor and the Antongil Bay MECIE Décret N° 2004-167 relatif à la mise en compatibilité des ii investissements avec l’environnement; Madagascar‘s environmental impact assessment legal framework MEF Ministry of Environment and Forests MNP Madagascar National Parks MRV Monitoring, Reporting and Verification system NAP Nouvelle aire protégée / New Protected Area NEAP National Environmental Action Plan NGO Non Governmental Organization NPV Net Present Value ODA Official Development Assistance ONE National Environment Office / Office National pour l’Environnement ORAF Operational Risk Assessment Framework PA Protected Area PAD Project Appraisal Document PAP Project Affected People PCU Project Coordination Unit /Cellule de Coordination (CELCO) PDO Project Development Objective PF Process framework for social safeguards PIE Project Implementing Entity PPP Private-public Partnership PRPSE Plateforme Régionale de Planification et Suivi Environnementale R-PP REDD+ Readiness Proposal REDD+ Reducing Emissions from Deforestation and Forest Degradation SAPM Protected Area Network in Madagascar / Systeme des Aires Protégées de Madagascar SDR Special Drawing Rights SESP Social and Environmental Safeguards Plan TAMS Tetik'asa Mampody Savoka UNEP United Nations Environment Program VOI Vondron’Olona Ifototra / Community Forestry Management Group WAVES Wealth Accounting and Valuation of Ecosystem Services Global Partnership WB World Bank WCS Wildlife Conservation Society WWF World Wide Fund for Nature Vice President: Obiageli K. Ezekwesili Country Director: Haleh Bridi Country Manager Adolfo Brizzi Sector Director: Jamal Saghir Sector Manager: Idah Z. Pswarayi-Riddihough Task Team Leader: Jean-Christophe Carret iii MADAGASCAR ADDITIONAL FINANCING REQUEST FOR THIRD ENVIRONMENTAL SUPPORT PROGRAM PROJECT (EP3) CONTENTS Project Paper Data Sheet Project Paper I. Introduction ..................................................................................................................... 1 II. Background and Rationale for Additional Financing ..................................................... 3 III. Project Restructuring and Additional Financing Activities .......................................... 8 IV. Appraisal Summary ..................................................................................................... 13 Annexes Annex 1: Results Framework and Monitoring .................................................................. 20 Annex 2: Operational Risk Assessment Framework (ORAF) .......................................... 25 Annex 3: Project Background, Rationale & Detailed Description of Project Activities .. 28 Annex 4: Revised Estimate of Project Costs ..................................................................... 52 Annex 5: Revised Implementation Arrangements and Support ........................................ 60 Annex 6: Economic and Financial Analysis ..................................................................... 69 Annex 7: Implementation Support Plan ............................................................................ 79 Annex 8: Social Safeguards Implementation in EP3 ........................................................ 82 Annex 9: Incremental Cost Analysis of GEF Contribution to Foundation ....................... 86 Annex 10: Team Composition .......................................................................................... 94 Tables Table 1: Summary of Project Cost Estimate ..................................................................... 12 Table 2: Summary of Benefit and Costs, Present values as of 2010 ................................. 13 Table 3: Presentation of Switching Values ....................................................................... 14 Table A3.2: Protected Areas supported by Additional Financing .................................... 35 Table A3.3: Past Capital Contributions to the Foundation ............................................... 47 Table A3.4: Past Performance of the Foundation ............................................................. 47 Table A3.5: Protected Areas to be supported through IDA/GEF Contributions to Foundation ......................................................................................................................... 48 Table A4.1: Project Cost Summary ................................................................................... 52 iv Table A4.2: Project Cost by Year ..................................................................................... 53 Table A4.3: Project Cost by Financier .............................................................................. 54 Table A4.4: Project Cost by Year (Base Cost) .................................................................. 55 Table A4.5: Project Cost by Year (Contingencies) ........................................................... 56 Table A4.6: Allocation of Loan Proceeds (IDA) .............................................................. 57 Table A4.7: IDA Disbursement by Year ........................................................................... 58 Table A4.8: Disbursement Table ...................................................................................... 59 Table A6.1: Project Investment and Recurrent Costs (US$ Million) ............................... 69 Table A6.2: National Parks with Hydrological Functions ................................................ 73 Table A6.3: Summary of Benefits and Costs, Present Values as of 2010 (US$ Million) . 75 Table A6.4: Presentation of Switching Values ................................................................. 76 Table A8.1: Social Safeguards Plans prepared under EP3 ................................................ 84 Table A9.1: Incremental Cost Matrix for GEF Funding ................................................... 91 Table A9.2: GEF Alternative – Breakdown of Funding Sources by Components (US$ million) .............................................................................................................................. 93 Figures Figure A3.1 Expansion of Madagascar‘s PA Network (million hectares) ........................ 31 Figure A3.2: Change in forest cover 1950 - 2005 ............................................................. 33 Figure A5.1: Funds Flow Diagram ................................................................................... 65 Figure A6.1: Number of Visitors in National Parks Supported by EP3 ........................... 71 Figure A6.2: Evolution of Visitors‘ Numbers with and without Additional Financing ... 72 Figure A6.3: Comparison of recurrent Costs and Sources of Sustainable Revenues for the 33 Protected Areas supported by the AF ........................................................................... 77 Boxes Box 1: Approach of the Additional Financing to Addressing Illegal Logging in Masoala National Park ..................................................................................................................... 10 Box 2: Social and Community Development Activities in the Additional Financing ...... 11 Box A3.1: Madagascar‘s biodiversity: a living laboratory, global public good and international responsibility ...............................................................................................
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