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Government of the Republic of Armenia E2203 Public Disclosure Authorized Government of the Republic of Armenia MCA-Armenia Team Proposal for Public Disclosure Authorized Millennium Challenge Account Assistance Public Disclosure Authorized Environmental Impact Assessment of the Concept Paper Public Disclosure Authorized September 2005 Government of the Republic of Armenia Proposal for Millennium Challenge Account Assistance Environmental Impact Assessment CONTENTS 1. INTRODUCTION........................................................................................3 2. DESCRIPTION OF THE PROPOSAL ..........................................................4 2.1. Proposed Investment Areas.......................................................................4 2.2. Current Situation of Irrigation Infrastructure and Proposed Investments...4 2.3. Current Situation of Rural Roads and Proposed Investments.................36 3. ENVIRONMENTAL MANAGEMENT SYSTEM IN ARMENIA...................50 3.1. Legal Framework......................................................................................50 3.2. International Agreements .........................................................................53 3.3. Institutional Framework ............................................................................57 4. ENVIRONMENTAL IMPACTS....................................................................60 4.1. “No Action” Alternative .............................................................................61 4.2. Potential Positive Impacts ........................................................................62 4.3. Potential Negative Impacts ......................................................................62 4.4. Mitigation Measures .................................................................................64 5. ENVIRONMENTALLY SOUND CLAUSES FOR CIVIL WORKS CONTRACTS..................................................................................................66 6. PUBLIC CONSULTATION AND PARTICIPATION ...................................67 7. MONITORING .............................................................................................69 8. MAIN FINDINGS .........................................................................................72 9. REFERENCES............................................................................................74 ANNEXES .......................................................................................................76 ANNEX A: MAP......................................................................................77 ANNEX B: CHECKLISTS AND FORMS FOR ENVIRONMENTAL RECONNAISSANCE..............................................................................78 ANNEX C: TERMS OF REFERENCE FOR EIAs AND ESMPs...........87 ANNEX D: LIST OF KEY CONSULTATIVE MEETINGS AND FIELD VISITS.....................................................................................................97 Environmental Due Diligence Report – MCA-Armenia Proposal Page 2 Government of the Republic of Armenia Proposal for Millennium Challenge Account Assistance Environmental Impact Assessment 1. INTRODUCTION This Proposal, presented by the Government of the Republic of Armenia, seeks financial assistance from the Millennium Challenge Account (MCA) to support a five year program of strategic investments in irrigation and community roads, aimed at increasing agricultural production in poor rural areas of the country. The proposal has been elaborated in close consultation with key stakeholders in civil society, the most important being the communities themselves. The specific poverty reduction focus on public infrastructure in rural areas is consistent with the government’s Poverty Reduction Strategy Paper (PRSP) of August 2003 and addresses directly the various impediments reducing rural poverty identified in the first full PRSP progress report of March 2005. The proposal has been prepared within the framework of the guidance for MCA assistance provided to eligible countries. Main Program Highlights Objective: Increase Agricultural Productivity and Output, and Reduce Rural Poverty MCA Financing: $175 million (to be clarified) Implementation: 5 years Key Sectors: Irrigation and Rural Roads Impact: 5% Decrease in Rural Poverty by 2010 Environmental Due Diligence Report – MCA-Armenia Proposal Page 3 Government of the Republic of Armenia Proposal for Millennium Challenge Account Assistance Environmental Impact Assessment 2. DESCRIPTION OF THE PROPOSAL 2.1. Proposed Investment Areas A productive agricultural sector is important for the national economy, vital for food security as well as for rural poverty alleviation, and provides links to downstream industries such as agricultural processing. More than one million people, or 35% of the population, live in rural areas and their economic livelihood is dependent on agricultural production. In 2003, farm income accounted for more than 50% of total income of rural households. With very few opportunities for off-farm employment, Armenia’s rural population depends for survival on small farms. There are two important preconditions for productive agriculture in Armenia: • investment in irrigation, which is key to increasing agricultural production, improving labor productivity and eradicating rural poverty; and • investment in a rural roads network, which is essential for commercializing agricultural production in rural communities. Only 10% of Armenia’s rural road network is in good condition and there has been minimal investment, or maintenance of the network, over the past decade. Annex A contains a map of the irrigation and road schemes. 2.2. Current Situation of Irrigation Infrastructure and Proposed Investments Currently the most effective and reliable way to increase labor productivity, accelerate growth and eradicate rural poverty are investments in irrigation networks. During Soviet Union times, the volume of cropland under permanent irrigation was 280 000 hectares, or 57% of all arable land. The Soviet irrigation system was based on the mechanical irrigation principle with extensive use of electricity (around 600 million kilowatts yearly in the late 1980s compared with 222.8 million kilowatts in 2003) and water was provided free of charge. The lack of recurrent expenditure, and maintenance, on the infrastructure over the last decade, has had a deleterious impact on the condition of the network. The irrigation infrastructure is in a poor state or entirely non-operational in over 52% of previously irrigated land. About 20% of the total network is regarded as being in good condition, whilst 28% is regarded as being in fair condition. In these conditions, the irrigation investment strategy should aim at the improvement of the level of commercial viability of crop production, keeping or upgrading mechanical irrigation system only in the places, where they are economically efficient and replacing them with the gravity and other systems, which will provide water at an economically acceptable cost. The proposed project components are aimed at an expansion of irrigated land areas and an increase in the efficiency of irrigation systems. This will be achieved through the following schemes presented below. Environmental Due Diligence Report – MCA-Armenia Proposal Page 4 Government of the Republic of Armenia Proposal for Millennium Challenge Account Assistance Environmental Impact Assessment IRRIGATION SCHEMES DESCRIPTION SCHEME No: 01 Scheme Name: Artashat WUA: Azat, Artashat, Vedi, Mkhchian, Ararat, Masis Marz: Ararat Location (center): E 44o32' ; N 40o00' Elevation range: 800-900 m Benefit Area: Actually irrigated: 28,902 ha After Project: 34,502 ha Main Crops: grape, orchard, vegetables, wheat Beneficiaries: Direct: 19,391 Indirect: 59,734 Communities: 73 1. BRIEF DESCRIPTION OF PROBLEM Artashat irrigation system is designed for more than 36,000 ha in south-east Ararat valley. Around 17,000 ha are under Artashat main canal which intakes by gravity water from River Hrazdan (until May), from Azat Reservoir and from Mkhchian P/S (16 m3/s and 2 steps) after flood season. The rest 19,000 ha are irrigated by pumping stations located on the rivers and drainage collectors or by tube-wells. The Artashat main canal is under operation since 1930's and water loses in the canal are estimated at 25%. In the scope of Irrigation Rehabilitation Project financed by the World Bank in the mid of 1990's critical hydro-structures (siphons, etc.) and stretches of canal have been rehabilitated, but 21km of the main canal (from total 54km) still needs rehabilitation. 14 large pumping stations supplying water to around 19,000 ha are in operation more than 20- 30years and are in bad technical condition, which causes extra energy use, high annual expenses for maintenance and there is a risk that thousands hectares can stay without water. Less water and distrust of farmers for sufficient irrigation do not allow cultivation of high value crops as grapes, fruits or vegetables and farmers currently grow wheat or alfalfa. 2. BRIEF DESCRIPTION OF WORKS For fixing the problems the Scheme includes: • (Subcomponent No:1.1) rehabilitation of 21km stretches of the Artashat main canal will allow to reduce water losses by 13.1 Mm3, increase water distribution and have enough water for lands located in the end of the main canal; • (Subcomponent No:1.2) rehabilitation of 14 pumping stations will allow to sufficiently reduce energy use and will insure irrigation on more than 23,000 ha; • (Subcomponent No:1.3) construction of Aigezard
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