17131 GE Public Disclosure Authorized

Document of The World Bank

Report No: 17131 GE Public Disclosure Authorized

PROJECT APPRAISAL DOCUMENT

ONA

PROPOSED CREDIT

IN THE AMOUNT OF SDR 3.2 MILLION

AND A Public Disclosure Authorized GRANT

FROM THE GLOBAL ENVIRONMENT FACILITY

IN THE AMOUNT OF US $1.3 MILLION EQUIVALENT

GEORGIA

Public Disclosure Authorized FOR AN

INTEGRATED COASTAL MANAGEMENT PROJECT

November 24, 1998

Environmentally and Socially Sustainable Development Sector Unit Public Disclosure Authorized Europe and Central Asia Region CURRENCY EQUIVALENTS

US$1.00= 1.4Georgian Lari US$1.00= 0.71 Special DrawingRights (SDR) (October 31, 1998)

ABBREVIATIONS AND ACRONYMS

AIOC AzerbaijanInternational Oil Consortium BSEP Black Sea EnvironmentalProgram BS-SAP StrategicAction Plan for the Rebabiiitationand Protectionof the Black Sea CAS CountryAssistance Strategy CEQMIS Coastal EnvironmentalQuality Monitoringand InformationSystem CQ SelectionBased on Consultants'Qualifications DPA Departmentof Protected Areas,Nature Reservesand HuntingManagement (Department of ProtectedAreas) EA EnvironmentalAssessment ESW Economicand Sector Work EU TACIS EuropeanUnion Technical Assistancefor the Commonwealthof IndependentStates GEF GlobalEnvironment Facility GICMP Georgia IntegratedCoastal ManagementProject GIS GeographicInformation System GoG Governmentof Georgia GPC GeorgiaPipeline Company GPN GeneralProcurement Notice IBRID InternationalBank for Reconstructionand Development ICB InternationalCompetitive Bidding !CZM integratedCoastal Zone Management IDA InternationalDevelopment Association IMF InternationalMonetary Fund [MO InternationalMaritime Organization IPIECA IntemnationalPetroleum Industry EnvironmentalConservation Association IS InternationalShopping KNP KolkhetiNational Park KNR KobuletiNature Reserve LCC Local,ConsultativeCommission LCS LeastCost Selection MEFRI Marine Ecology and Fisheries ResearchInstitute MIRP Georgia Municipal InfrastructureRehabilitation Project MTS ManagementInformation System MoE Ministryof Environment and Natural ResourcesProtection (Ministry of Environment) MoUC Ministryof Urbanization and Constuction NBF Not-BankFinanced NCB National CompetitiveBidding NEA" National EnvironmentalAction Plan NGO Non-GovernmentalOrganization NS National Shopping PAG ProjectAdvisory Group PCD ProjectConcept Document PIP ProjectImplementation Plan PIU ProjectImplementation Unit QBS Quality-8asedSelection QCBS Quality and Cost-BasedSelection Ramsar Convention Conventionon the Protection of Wetlands of InternationalImportance SCC StateConsultative Commission for ICZM SDR SpecialDrawing Rights SFB SelectionUnder a Fixed Budget SOE Statementof Expenditures SPN SpecialProcurement Notice TF Trust Fund TOR Terms of Reterence UNDP UnitedNations DevelopmentProgram WHO WorldHealth Organization WWF WorldWildlife Fund Vice President: Johannes F. Linn, ECA CountryDirector: Judy rM O'Connor,ZCC03 SectorDirector KevinCleaver, ECSSD SectorLeader: Mehele De Nevers, ECSSD ProgramTeam Leader. Kann J. Shepardsons,ECSSD Georgia IntegratedCoastal Management Project

CONTENTS

A. ProjectDevelopment Objective ...... 2

1. Project developmentobjective and key perfortnanceindicators ...... 2

B. StrategicContext ...... 3

1. Sector-relatedCAS goal supportedby the project...... 3 2. Main sector issues and Governmentstrategy ...... 4 3. Sector issuesto be addressedby the project and strategic choices...... 5

C. Project Description Summary ...... 5

1. Project components...... 6 2. Key policy and institutionalreformns supported by the project...... 9 3. Benefitsand target population...... , 9 4. Institutionaland implementationarrangements ...... 10

D. Project Rationale...... 12

1. Project alternativesconsidered and reasons for rejection...... 12 2. Major related projects financedby the Bank and GEF and/or other developmentagencies ...... 13 3. Lessons learnedand reflected in proposedproject design...... 13 4. Indicationsof borrower commitmentand ownership...... 14 5. Valueadded of Bank support in this project...... 14

E. SummaryProject Analyses ...... 14

1. Economicanalysis ...... 14 2. Financialanalysis ...... 15 3. Technicalanalysis ...... 15 4. Institutionalanalysis ...... 16 5. Social analysis...... 16 6. Environmentalassessment ...... 17 7. Participatoryapproach ...... 17

F. Sustainabilityand Risks...... 19

1. Sustainability...... 19 2. Critical risks...... 19 3. Possiblecontroversial aspects ...... 20

G. Main Loan Conditions...... 21

1. AgreementsReached Prior to Negotiations...... 21 2. AgreementsReached at Negotiations...... 21 3. NegotiationsConditions ...... 21 4. EffectivenessConditions ...... 21 5. DisbursementConditi ...... 21

H. Readiness for Implementation...... 22

1. Compliance with Bank Policies ...... 22

Annexes

Annex 1 Project Design Summary Annex 2 Project Description Annex 3 EstimatedProject Costs Annex 4 Cost-BenefitAnalysis Summary Annex 5 FinancialSummary Annex 6 Procurementand DisbursementArrangements Annex 7 Project ProcessingBudget and Schedule Annex 8 Documentsin the Project File Annex 9 Statusof Bank Group Operationsin Georgia Annex 10 Countryat a Glance Annt 11 GEF IncrementalCost Analysis Annex 12 Presidentof Georgia Decree

Tables

Annex 6, TableAl Project Costs by ProcurementArrangements Annex 6, Table A2 ConsultantSelection Arrangements Annex 6, Table B Thresholdsfor ProcurementMethods and Prior Review Annex 6, Table C ProcurementPlan Annex 6, TableDl EstimatedDisbursements IDA Credit Annex 6, Table D2 EstimatedDisbursements GEF Grant Annex 6, TableEl Allocationof IDA Credit Proceeds Annex 6, Table E2 Allocationof GEF GrantProceeds Annex 11, TableF IncrementalCost Matrix

Maps

Map I Georgiaand the Black Sea Map 2 Black Sea Coast and WetlandsArea, Project Sites Georgia Integrated Coastal ManagementProject Project AppraisalDocument

Europe and CentralAsia RegionalOffice ECCO3

Date: November24,1998 ProgramTeam Lead&r:Karin J. Shepardson Country Director: Judy M. O'Connor Sector Director:Kevin M. Cleaver Project ID: Sector: Environment ProgramObjective Category: Environmentally Sustainable GE-50911 Development GEF SupplementID: GE-60009 Focal Area: Biodiversity Lending Instrument: IDA Credit and GEF Programof TargetedIntervention: [] Yes [X] No Grant Project FinancingData [ Loan [X] Credit [] Guarantee [XI Grant

For Loans/Credits/Others:

Amount IDA: SDR 3.2 million (US$m 4.4 equivalent) Proposed GEF: SDR 1.0 million (US$m 1.3 equiv .;ent) terms:

[X ] Multicurrency [] Single Currency,specify SDR Grace period 10 [ StandardVariable [ Fixed [ LIBOR-based (years): Years to 35 maturity: Commitment 0.5% On undisbursedcredit balance (begins60 days after signing unless waiver) fee: Service charge: 0.75%

Financingplan (US$m): Source Local Foreign Total Governmentof Georgia 0.9 0.0 0.9 IDA 1.8 2.6 4.4 Global EnvironmentFacility (GEF) 1.3 0.0 1.3 Governmentof the Netherlands (Grant) 0.0 1.0 1.0 Total 4.0 3.6 7.6 Borrower: Governmentof Georgia Guarantor:N/A Responsibleagency: Ministryof Environment

Estimateddisbursements (Bank 1999 2000 2001 2002 2003 2004 FY/US$M): (CombinedIDA/GEF) 0.5 0.8 2.0 1.3 0.8 0.3 Annual Cumulative 0.5 1.3 3.3 4.6 5.4 5.7

Project implementationperiod: 5.5 years Expectedeffectiveness date: Jan. 15, 1999 Expected closing date: Dec. 30, 2004 A: Project Development Objective

1. Project developmentobjective and key performance indicators(see Annex 1):

Project developmentobjective: The project aims to strengtheninstitutions in Georgia to manage the coastal resources of the Black Sea by developing, testing and evaluating methods to effectively integrate environmental planning and management into economic development activities along the Black Sea coast.

Globaldevelopment objective: The projectalso aims to assist Georgia in meeting its international commitments under the Black Sea EnvironmentalProgram (BSEP) and to implement priority actions outlined in the Georgia Biodiversity Strategy/ActionPlan. These priorities include conservationof biodiversity at sites of internationalsignificance on Georgia's Black Sea coast, such as the Kolkheti and Kobuleti wetland Ramsar sites; restoration of degraded habitats and resourceswithin the Black Sea Large Marine Ecosystem;and participation in regional efforts to manage and sustainpublic goods of a transnationalcharacter.

In line with these objectives, the project will work closely with the Ministry of Environment (MoE) and other key Agenciesto carry out the following:

(a) Establish an institutional framework for integrated planning and management of Georgia's coastal resources that emphasizescoordination between stakeholders at the national level and active participationof communitiesand interest groups at the local level; (b) Restore and protect critical resourceswithin coastal ecosystemsthrough concrete actions at the local, national and regional levels such as community outreach and education; introduction of controls on tree and reed harvesting, peat mining, and fishing; and promotionof communitybased managementand sustainableeconomic activities; (c) Establish an environmental quality monitoring system and information network to support Georgia's national program of integratedcoastal zone management(ICZM) and complementmonitoring efforts underthe regionalBSEP; (d) EnhanceGeorgia's ability to assess and address urgent coastal erosion concerns through identificationof cost-effectivesolutions for follow-oninvestments; (e) Developa nationaloil spill contingencyplan and oil pollution managementcapability for Georgia, and assist the country in meeting its international commitments under Conventionsand Protocolsfor protectionof the Black Sea Environment.

Key performanceindicators include:

(a) Intersectoralconsultative commissionsfor ICZM established and functioningaccording to agreed objectivesand proceduresat nationaland local levels (b) Georgians trained in coastal resource planning and management tools (EA, land use planning/zoning;protected area management;GIS) and public awareness and conflict resolutiontechniques (c) Draft legislationoutlining mandate and responsibilitiesof a coastal authorityand codes of conduct for coastalresource/landscape use prepared (d) Legal status of KNP and KNR establishedand boundariesdemarcated (e) Encroachment,illegal poaching andharvesting rates reduced over baselineconditions (f) Informationnode for Black Sea regional environmentalmonitoring network established in Georgia (g) Computerlinks and informationsub-nodes in collaboratinginstitutions up and running (h) Oil spill contingencyplan and financingplan developedand approved by governnent 2 (i) Significantprivate sector involvementin oil pollutionfund capitalization (j) Cost-effective options to address coastal erosion and municipal water use priorities identified

B: Strategic Context

1. Sector-relatedCountry Assistance Strategy (CAS)goal supportedby the project.

CAS documentnumber: 17000-GEDate of latest CAS discussion:September 12, 1997

(a) Protectingthe environmentand supportingsustainable natural resource managementis one of four main CAS objectivesfor Georgia. Among the associatedissues identified in the CAS are: (i) that environmentalconcerns are not effectivelyintegrated into economic policies; and that (ii) institutional arrangements to facilitate the mainstreaming of environmental planning and managementinto economic sectorsare weak. The lack of intersectoralcoordination--particularly in mainstreaming environment and natural resources management concerns into economic sectoral planning--contributesto fragmentationof environmentalmanagement, particularly in water relat,d sectors, at-l. failure to address root causes of environmental degradation. The project will address the CAS priority in environment through activities which (i) will target Georgia's capacity for integrated managementof the diverse economicsectors developingalong Georgia's Black Sea coast and (ii) increase Georgia's capacity to mitigate impacts and reverse trends of environmental degradation in the coastal zone. This will be achieved through institutionalarrangements for interministerialcoordination and stakeholderconsultation in coastal development planning; through strengtheningof the regulatoryand enforcement framework for use of coastal landscapesand resources;through monitoringand disseminatinginformation on the condition of coastal resourcesto guide decision making and build public support for protectionof the Black Sea ecosystem; and through preventive measures to minimize environmental degradationand related economicimpacts due to oil pollutionand coastal erosion.

(b) GEF OperationalStrategy / program objectives addressedby the project: The proposed operationsupports the objectivesof the GEF Biodiversityfocal areaunderoperational programs for both Coastal, Marine and Freshwater Ecosystemsand Forest Ecosystems. Activities will concentrateon the conservationand sustainableuse of biodiversityin coastal forest wetlands and nearshore waters of Georgia which are of internationalimportance. The Kolkheti and Kobuleti Wetlands along the Black Sea Coast of Western Georgia were designated as Ramsar sites (wetlands of international importance) and provide critical habitat for numerous species of migratory and wintering birds. These wetlands along the eastern coast of the Black Sea harbor exceptional levels of species richness and endemism,unique higher order taxa and rare habitat types. The project will support the conservationof these wetlands through establishment of Kolkheti National Park and Kobuleti Nature Reserve, significantly expanding the existing area under protection and supporting implementationof their managementplans. In so doing the project will assist Georgia in taking some of the first steps toward implementing its proposed national systemof protectedareas. In parallel with these effortsthe project will introducethe use of integrated coastal managementtools, such as coastal monitoringto evaluate trends in key physical and biological parameterswithin and outside protectedareas. It will also help create integrated land use plans for proposed future developmentof coastal landscapes (includingurban and port expansionsadjacent to these wetlands), and adoption of zoning measures, engineering best practices, environmentalassessment guidelines, and codes of conduct for economicactivities in the coastal zone.

The project will complementobjectives under the GEF InternationalWaters focal area by initiating actions to address transboundary issues such as oil pollution from accidental and 3 operational spills related to the transshipmentof Caspian Sea oil via Georgian ports along the Black Sea, and by introducinga monitoringprogram for water quality, biodiversity and other indicators of aquatic and terrestrial ecosystem health. These actions are linked to implementation of the Bucharest Convention, and the related Strategic Action Plan for the Rehabilitationand Protectionof the Black Sea. By carrying out these activities Georgia will demonstrate its leadershiprole in the region in advancing the shared objective of rehabilitating and protectinga global public good-the Black Sea Large Marine Ecosystem.

2. Main sector issues and Governmentstrategy:

The Black Sea plays a crucial role in the welfare of Georgia's population. Not only does it provide essential goods and crucial links to markets in Europe for oil and other products, but it has intrinsic ecologicalvalue and deeply rooted cultural and historic significance. Sustainability of Georgia's economic growth will depend, in part, on the gover'ment of Georgia's ability to integrate developmentof the many productivesectors of the Black Sea Coast (includingfisheries, marine transport, oil production,tourism, agricultureand forestry) into the national economy in a way that does not diminishthe natural and cultural values of this region, nor undermineits long- term productivity. Over the past decades, uncontrolled pollution from point and non-point sources (particularly from the Danube drainage basin), coastal erosion intensified by human intervention,over-fishing, alien species introductions,and off-shore dumping in the region have devastated the Black Sea and its littoral zone. Now transshipmentof Caspian Sea oil through Georgia to the Black Sea holds out the promise of significantrevenues all the while threatening prospects for managingpollution risks along the Black Sea coast, rehabilitating once productive coastal fisheries and wetlands, and revitalizingthe tourism industry. The constructionof an oil pipeline terminal and offshore loading facility at Supsa, along the central coast of Georgia, creates a substantialnew risk from oil spills to the adjacentKolkheti wetlands and the nearshore marine environment of Georgia. Coastal erosion, aggravated by engineering works and regulation of rivers upstream, also threatensexpension of ports and tourism in centers along the coast. Lost revenues from these traditional sectors and the costs of mitigating future environmentalimpacts from oil spills, erosionand urban pollutioncould have serious impactson public sector resources and places strategic importance on sound environmentalmanagement systems. The forest and wetland ecosystemsof KNP and KNR in particular are under threat as a result of drainage of wetlands for agriculture and urban expansion, forest harvesting, illegal hunting, peat and gravel mining,pollution and invasionby non-nativespecies.

With the change to a parliamentary democracy, Georgia has entered a new phase of environmental activism. The Ministry of Environment (MoE), responsible for coordinating government efforts to protect and conserve the country's environment, has made important progress toward strengtheninglegal and regulatory instruments for improved enviromnental management in Georgia and has promoted the approval of major pieces of environnental legislation. These include the "Environment Protection Law" (1996); the "Law on Environmental Permits" and the "Law on State Ecological Expertise". A National Environmental Action Plan (NEAP) prepared with Bank and Government of Netherlands assistance, has been recently completed and is being proposed for formal adoption by the Government. The NEAP prioritizes investmentsto improve Georgia's environment and has identified implementationof a comprehensiveCoastal Zone ManagementProgram as one of six "highest priority" investments.

4 strategy and guidelines for the rehabilitation and the protection of the Black Sea, (ii) establishment of a national inter-sectoral ICZM Commission and (iii) adoption and implementationof national legal and other instrumentsrequired to facilitate integrated coastal zone management.

The Government of Georgia ratified the Conventionon Biodiversityin June 1994. Georgia has not yet ratified the Bonn Convention, addressing conservation of migratory species and transboundary ecosystems. However in bilateral agreements with its neighbors Georgia has reached agreements reflecting the Bonn Convention provisions. The National Biodiversity Strategy / Action Plan, currentlyin draft and expected to be finalized in 1998, has identified the KNP/KNR region as a center for biodiversityand project activities as a high priority for future investment. The frameworklegislation on Protected Areas Systemwas adopted in 1996 and the law on Wild Fauna Protectionwas adopted in 1997.

3. Sector issues to be addressedby the project and strategic choices:

In line with the NEAP and recent developmentsin environmentallegislation, the proposed project supports the govemment's interests in strengthening institutional capacity for environmental management and ensuring that development along the Black Sea Coast is consistent with principlesof environmentallyand socially sustainabledevelopment. This will involve land use planning,consultation with and participationof local stakeholders,environmental assessment and informationtools to inform investmentdecisions and to promotea systemof multiple,sustainable use, consistent with Georgia's national development plans. It will also involve the drafting of legislationthat will clarify the roles and responsibilitiesof line agencies operatingin the coastal zone, and the policy and legal frameworkunder which economicactivities in these sectors should proceed.

Such an integrated approach is essential to achieving Georgia's biodiversity conservation objectives, within a proposed system of protected areas, as supported by the draft National Biodiversity Strategy. Protectionof internationallyimportant wetlands along Georgia's Black Sea coast at Kolkheti and Kobuleti-will be the objective of legislation now pending in Parliament to establish these sites as national parks within the nation's system of protectedareas. Increasing public awareness through information collection and dissemination, environmental education and participation in coastal planning through local consultative committees and the support of NGOs and the clergy is an underlying theme in all componentsof the project. This strategic approachwill not only increaseownership of the projectby stakeholders,it will improve prospects for sustainabilityof integrated coastal managementbeyond the life of the project. Finally, the project will support Georgia's international commitmentsto protect the Black Sea through legislation,research and environmentalmonitoring and information exchange, in line with recommendationsoutlined in the national ICZM report preparedin 1996 under the auspices of the Black Sea EnvironmentalProgram.

C: Project Description Summary

The project is designed as a first step in the development of a national program for Integrated Coastal Zone Management(ICZM) in Georgia and the implementationof the regional Black Sea Strategic Action Plan. Consistent with the need to build a strong institutional base as a foundation for ICZM, the emphasis of this initial project is on capacity building, creating an enabling environmentfor the introduction of improved managementtechniques, and focusing investmentsin the coastalzone. The project scope,therefore, includes the following components:

5 Component Category Cost Incl. % of Bank-wc GEF': % of Contingencies Total financing financing Bank- (US$M) (US$M) (IJS$M) financing (IDA/GEF) ICZM Institutional Institution- 1.5 19 1.2 0.1 17% Capacity Building building/ Project Management Establishment of Physical/ 3.3 43 1.4 1.2 34% Kolkheti National Park Institutional and Kobuleti Nature Reserve Establishmentof Physical/ 1.9 25 1.8 0 24% Coastal Environmental Institutional Quality Monitoring & Infomiation Systems Evaluation of Coastal Policy/ 0.5 6.5 0 0 0 Erosion Institution Building Oil Spill Emergency Policy/ 0.5 6.5 0 0 0 Response Institution- I building Total 7.6 100 4.4 1.3 57.4

1. Project Components:

Component1. ICZM InstitutionalCapacity-Building ($1.5 million)

This component aims to establish an institutionaland legal framework for Integrated Coastal Management in Georgia through the development of institutional arrangements to facilitate intersect.oralplanning and the participationof key stakeholdergroups in coastal resource decision making. This will be achieved through the creation of: (i) a State ConsultativeCommission for ICZM; i(ii) the Working Group for the Advancement of ICZM; and (iii) three Local ICZM Consuluttive Commissions along the Black Sea Coast. In addition to these institutional arrangenments,the project will also support the drafting of legislationthat will, inter alia, clarify administrative authority for various activities/functionalresponsibilities in the coastal zone, articulate national policies and regulations for the use of coastal and marine resources, and develop codes of practice for development activities in the coastal zone. This component supportsand promotes public awarenesson coastal managementissues through training and mass media. It also introducesparticipatory based land use planningtechniques and will help finalize the National Park and Nature Reservemanagement plans.

A State Consultative Commission for ICZM (SCC) was formally established by Presidential Decree prior to project negotiations. The SCC, coordinatedby the Ministry of Environmentand the Ministry for Urbanizationand Constructionas lead agencies for ICZM, would consist of representativesof relevant governmentsectors and planning agencies, localauthorities, academia, private sector, and the public. This body will serve as the principal forum for interp-eting and

6 coordinating existing policies among the various sectors/stakeholdersinvolved in coastal and marine resource use along Georgia's Black Sea Coast. It will also be instrumentalin guiding the drafting of legislationfor the CoastalZone.

The Working Group for the Advancementof ICZM (ICZM WG) will be establishedas a multi- disciplinary entity housed in the Ministry of Environment,but with the full technical support of relevant ministries operating in the Coastal Zone. The WG will consist of staff from these ministries,who will be trained on state of the art equipmentin the use ofGIS and other ICZM tools and techniques for integrated planning and managementof the coastal zone. A Project Implementation Unit (PIU) with executive powers for overall project supervision and coordination, and contracting and disbursement oversight in accordancewith Government and Bank procedures, will be housed within the MoE. The PIU/ICZMWG will also serve as the secretariatfor the SCC.

The PIU/ICZM WG will help establish a network of three Local ICZM Consultative Commissions(LCCs) in: Poti, Kolkheti, and Batumi. The purpose of the LCCs is to encourage stakeholderparticipation in establishingICZM priorities at the municipaland local levels, where decisions by i -source users most closely affect the state of nearshorecoastal ecosystems. The project rvill assist LCCs to facilitate and conduct community meetings and establish offices as a resource center for public comment and information. In Kolkheti, the primary purpose of the LCC (KNP Local AdvisoryCouncil) woulc )e to serve as a communitybased advisory body to the National Park (mandatedby protectedarea legislation). As part of its advisory functions,the Kolkheti LLC will also provide input to park managementplans and their implementation. The Poti and Batumi LCCs would be more broadly focused and would involve multiple stakeholders from different economic as well as social sectors, including the public sector, private and nongovernmentalentities, and the clergy. The set-up and initial operationof these commissions and KNP Councilwill be facilitatedby PIU field coordinatorsin Poti and Batumi.

Component 2. Establishmentof the Kolkheti National Park and Kobuleti Nature Reserve ($3.2 million)

The objective of this protectedareas componentof the GICMP is to improvethe protection and managementof threatenedforest and wetland natural habitats within theKolkheti coastal region, and to integrate these protected areas into the broader developmentobjectives of the coastal managementproject.

Under the project, support would be provided for: (a) conservationof the biodiversity of the Kolkheti region through protection,management, and restorationof unique plant communities; (b) establishment of infrastructure for improved biodiversity protection and development of nature-basedtourism in the region; (c) improved monitoringand appliedresearch onbiodiversity and the effectivenessof conservationefforts; (d) protectionof fish spawninggrounds necessary for the protection of freshwater and marine biodiversity and their sustainable use; and (e) recovery of threatenedagricultural biodiversity.

Proposed activitiesinclude:

(a) Creation of KolkhetiNational Park and KobuletiNature Reserve.Legislation pending in Parliamentwould establishKolkheti National Park (KNP), as the first National Park in a series of ProtectedAreas in Georgia. Adoption of this legislationwill be a condition of disbursementon project component 2 (Section G3 (a)). All earmarkedterritory to be included in the KNP (approximately44,850 hectares) will be state owned land and any potential user right issues would be settled at the time of the adoption of the legislation. 7 The proposed protected area will include different zones for varying degrees of management and activities including: a strict nature zone, a managed nature zone, a recuperation zone, a visitor zone, and a support zone in which existing agricultural and cultural activities would remain. The Kobuleti Nature Reserve (KNR), located adjacent to the Kolkheti wetlands 0.5 - 1.0 km from the coast, would encompass an area of 778 hectares (Map 2). The project would finalize and implementthe managementplans for Kolkheti National Park and Kobuleti Nature Reserve. These management plans will consolidate measures to improve protection and managementof the biodiversity of the KNP and KNR, including restorationof degraded habitats, control of illegal logging and hunting, and monitoring. The management plan will integrate the park's biodiversity protection functions with regional development needs, such as tourism, sustainable agriculture and flood protection.

(b) InstitutionalDevelopment. Support to Park Administrationand Management. The project would assist with development of an effective park administration and management, through the foliowing:

(i) ProtectedArea Advisory Council. A local advisorycouncil would be established to advise the directors of the Kolkheti National Park and Kobuleti Reserve and stakeholdersin the support zone on issues related to establishmentand operation of these protectedareas. The advisory council would be comprisedinter alia of community representatives,the private sector, NGOs, Department of Forestry, Ministry of Agriculture, Ministry of Environment,affected municipalities,and tourism authorities. This advisory council will advise the Department of Protected Areas on such issues as dispute resolution with local communities related to establishment and operation of the protected areas. The advisory councilwill also assist, in concert with the mass mediaprogram, in disseminating informationon project issues to local communities.

(ii) ProfessionalDevelopment and Training. Professionaldevelopment and training activitieswould be providedto administrative,scientific, and warden staff of the protected areas. This training will include principles and practices of national park administration, revenue generation, general management and conflict resolution techniques, and development of nature-based tourism and other economic activitiesfor generating incometo support the park system. The parks administration training would result in production of an operation and administrationplan, including final job descriptionsfor all staff. Key park staff and specialistsresponsible for managementregimes for the protected areas will receive training in natural resources management. Wardenswill be trained in patrollingand enforcement.

(c) BiodiversityMonitoring and Applied Research The projectwould implementmonitoring and applied research undertaken by park staff and specialist consultants to guide park managementand evaluate the effectivenessof restorationactivities. The activities to be undertakeninclude:

(i) Monitoring:Assessments to fill gaps in existing informationonbiodiversity as a basis for National Park managementin collaborationwith EU TACIS. Following the collection of these data, specific biological and water quality parameters would be monitoredby park staff and specialists. The parameters,study designs, and the monitoring sites would be formulated to develop a baseline that would assist in evaluating the effectiveness of measures undertaken to improve the

8 management and protection of the biodiversity of KNP and KNR. These monitoringactivities would complementrather than duplicate those undertaken under the coastal quality monitoring component of the Project, and would be associatedwith the developmentof GIS-compatibledatabases.

(ii) Research: This would include studies related to the restoration of degraded habitats in the Park, analysis of eco-tourism potential and benefits to local communities, and changes in biodiversity associated with management interventionsat the species and habitat levels.

Component 3. Establishment of a Coastal Environmental Quality Monitoring & InformationSystem ($1.9 million)

Urgent needs for monitoring of coastal and off-shore water quality, bathing water, major ports, rivers and estuaries and major point sources of pollution were identified in an initial regional study, commissioned by BSEP/EU-TACISin cooperation with the Regional BSEP Program CoordinationUnit (Istanbul). Project support would include: preparationof a feasibility study; development of new monitoring standards and regulation; procurement of necessary measurement, sampling, and analysis equipment for selected monitoring laboratories and agencies; establishmentof an information system to integrate and support the monitoring and planning work; initiating a beach flag program; organization of training programs; and establishment of a monitoring and informationnetwork with nodes in the PIU/ICZM WG and collaboratinginstitutions in Tbilisi, Poti, Kolkheti,Kobuleti, and Batumi.

Component4. Evaluationof Coastal Erosion($0.5 million)

Coastal erosion is a serious problem along many parts of the Georgian coast. Much of this erosion has been accelerated by human intervention, including river diversion, lake impoundment,sand mining and coastalengineering works. To assess the factors contributingto coastal erosion, particularly in the risk-exposedareas of Poti (Rioni River-Mouth)and Batumi (Chorokhi River-Mouth), the Government of the Nertherlands will finance a comprehensive analysis of municipal water use (including watershed hydrology, sediment load, coastal dynamics) and infrastructureprimarily in Poti, and Batumi. Based on these studies a plan for integrated municipal water management would be developed. These studies would include analysis of cost effectivenessof existing interventionsto control erosion and feasibilitystudies of proposed options to address the most serious aspects of coastal erosion on a sustainablebasis. Investmentrequirements would be identifiedfor future interventions.

Component5. Developmentof a NationalOil Spill ContingencyPlan and Marine Pollution Control Plan ($0.5 million)

To help Georgia implementthe regionalBlack Sea StrategicAction Plan and to deal with existing and future risks of oil pollution,the Governmentof the Netherlandswill provide support for the preparation, in accordance with IMO guidelines, of a national oil spill contingency plan and emergency response program. This national plan will cover vessels, ports, and offshore installations and would be supported by municipal plans for the major port cities of Poti and Batumi. The oil spill contingencyplan currently being developed for the Supsa terminal and environsby the Georgia Pipeline Company(GPC), would articulate with and be consistent with standards identified under the National Oil Spill Contingency Plan. Under this project component, support would also be provided for development of proposals for port reception facilities to deal with smaller operational spills and ship-basedwaste, and a user-basedfinancing mechanism for oil spill emergencyresponse. As in the previous component,identification of

9 future investment opportunities for prevention and abatement of oil pollution (including operationalspills) would be an importantpart of the work carried out under this component.

2. Key policy and institutionalreforms supported by the project:

The key policy and institutionalreforms supportedby the project include: (a) introduction of a participatorn and locally based decision-making process for coastal zone management; (b) establishmentof a framework for the introductionof economic instruments(including user fees and pollution funds) to help alleviate the fiscal impact of recurrent costs for coastal and marine environmental management and to serve as examples for cost recovery in other proposed protected areas; (c) sectoral coordination and reduced fragmentation in the administration of Georgia's Black Sea coast; (d) establishment of a National Park (Kolkheti National Park and KobuletiNature Reserve) within the larger proposed System of ProtectedAreas of Georgia; (e) the introduction of an environmental monitoring and information system consistent with internationalstandards for the Black Sea region.

3. Benefits and targetpopulation:

Benefits: Th tional economy and the public at large would benefit from the results of the project. The main benefits of the project would be: (a) maintenanceof productiveecosystems and critical natural habitats in the freshwater,estuarine andnearshore waters along the Black Sea Coast; (b) conservationof biodiversityand the demonstrationof sustainablenatural resource use in and around the Kolkheti National Park and Kobuleti Nature Reserve; (c) increased public awareness related to ICZM; (d) improved coastal monitoring capacity and beach recreation conditions;(e) improved legal frameworkfor coastal land use, resourceuse and oil operations;(f) increasedoverall capacity to manage the coastal zone for multiple use through the piloting of participatoryplanning and management,conflict resolution, coastal informationsystems, and cost recoverytechniques.

Target population: Target populationsinclude the communitiesliving within the coastal zone, communitiesliving in and aroundthe KolkhetiNational Park, Poti and Batumi,and general users of the coastalzone.

4. Institutionaland implementationarrangements:

Implementation period: The majority of project activities will be completed within four years, however,a period of six years will be requiredto implementthe protectedareas componentof the project. A six year period is typical for biodiversityinvestments in protected area planning and managementwhich require a firn foundation in local institutions,technical capacity, and public awarenessfor sustainableimplementation.

Project oversight (policy guidance, etc.): A project advisory group (PAG) consisting of senior representativesfrom the key agencies involved in project implementationand chaired by the MoE, will provide project oversight and help resolve any interministerialcoordination issues in project implementation.The SCC for ICZM will provide overallpolicy guidanceto the project.

Execuatingagencies: A national WorkingGroup for the Advancementof ICZM, building on earlier efforts initiated by the Ministry of Environment,will be establishedunder the aegis of the Ministryof Environment. It will consist of an interdisciplinarygroup seconded from the key ministries and departmnents representedin the PAG. The MoE will house the ICZM WG and the Project Implementation Unit (PIU), thereby enhancingboth technicaland administrativecapacity within theMoE. The

10 WG/PIU, under the supervision of the PIU Director, will have responsibility for project implementation.It will coordinate with and be guided by an intersectoralpolicy and planning body (the State Consultative Commission for ICZM), established by Presidential Decre,e (Section Gl (d)). The MoE wilprovide administrativespace for the ICZM WG/PIU (Section Gl (g)).

Assignmentsof technicalstaff from the Ministryof Environment,Department of ProtectedAreas, Ministryof Health, Ministry of Urbanizationand Constructionand Ministry of Transport to the ICZM WG will ensure collaboration of key ministries in the execution of the project, help institutionalizetechnical expertise with the GoG, and build the foundation for cross sectoral coordinationin administrationof the coastal zone. Through this process, the basis for creating a national Center of Excellence in ICZM would be established, with prospectsfor decentralizing activities to the coast, once integration of national and local governmentresponsibilities were more clearly defined.

With the creation of a national park and nature reserve at Kolkheti and Kobuleti,the Departmnent of Protected Areas (DPA) will have an expandedrole in managementof these coastal wetlands. The project will support training of these staff in technical and administrativeaspects of protected area management,and seconded DPA staff will work closely with the PIU in Tbilisi and with field staff located on the coast to facilitate oversight of the KNP/KNR component and the procurementof project related goods and services.

Projectcoordination: The PIU will be responsiblefor coordinatingwith other donors, such as the Governmentof the Netherlands, in the implementationof components which will be supported through parallel cofinancing. A Project ImplementationPlan has been developed,which describesthe proposed implementationarrangements in more detail.

Accounting,financial reportingand auditingarrangements: Financial Management: The project financial management system, incluaing accounting, financial reporting and auditing arrangements, would be established prior to project effectiveness (Section G2 (a)). The financial and accounting procedures, together with a description of project implementation unit (PIU) responsibilities for financial, manageriaL/technicaland procurementare describedin the Project ImplementationPlan.

Accounting Information submitted to the Bank by the PIU would comply with international accounting standards. Project accounts would be maintained by the PIU separately from any other existing accounts. The PIU will managetwo Special Accounts, one for the IDA Credit and one for the GEF Grant. The PIU, with responsibility for orderly and efficient recording and safeguarding of the project assets and resources, would: (a) ensure accountabilityfor project funds; (b) maintain records of the sources of funds (IDA/GEF/GOG)and the relevant accounts; (c) maintain internal controls to ensure that financial records are reliable, complete and provided on a timely basis; (d) report on the use of funds (IDA, GEF, GOG); (e) facilitateverification of these reportsby independentauditors; and (f) provide information,as required,to the Bank.

FinancialReporting. During project implementation,the PIU would submit to the Bank a semi- annual Project Financial ManagementReport in the agreed format. The Report would include: (a) summary of Sources and Uses of Funds by project categories of expenditures,showing the IDA credit and GEF Grant in currency as determined by project design; (b) Summary of Expendituresby project components, for the current fiscal year and accumulatedto date; (c) Summaryof Statement of Expenditures(SOEs) by individual applicationreference number and amount; (d) Special Account Statement providing reconciliation of amounts in the Special 11 Account; and (e) ExpendituresReport by disbursementcategory during the current quarter and next iquarter.

FinancialAudit. The PIU would be responsible,on behalf of the Borrower, for providingto the Bank, within 6 months after the end of each fiscal year the financial audits of the Project that are acceptableto the Bank. The PIU would have the required Financial Statements for each year audiled by an independent auditor acceptableto the Bank in accordance with standards that are acceptableto the Bank (Section GI (e)). The auditor would be appointed in sufficienttime to carry out his/her responsibilities,including: (a) a review of the financial managementsystems at the beginning of project implementation;and (b) periodical reviews of the project financial manaLgementsystems thereafter.

Monitoring and evaluation arrangements: Project monitoring would be the responsibility of the PIU/ICZM WG and the MoE. The PIU/ICZM WG and MoE wouldfurnish the Bank with reports on a regular basis including: (a) semi-annual progress and project financial management reports, (b) interim unaudited statements ofproject accounts; and (c) additionalinformation that the Bank may requestfrom time to time (Section GI (f)).

Performance monitoring and evaluation would be undertaken by the Bank to ensure close monitoringof the achievementsof project objectivesduring implementation. Key performance indicatorsproposed for monitoring can be found in Annex 1. A mid-term evaluation would be preparedduring year three of the project. Lessons learnedfrom implementationand the activities financedunder the project would be capturedin a synthesisreport prepared by the borrower with the assistanceof the PIU.

D: ProjectRationale

1. Projectalternatives considered and reasonsfor rejection:

A comprehensiveand capital-intensiveICZM project addressing all major coastal degradation and risks (includingmitigation of impactsfrom coastal erosion and oil activities)was considered. This was excludedas it would have made the project considerablymore complex to prepare and implement. It would also have required a much strongerinstitutional and legal framework,and a differentset of developmentpriorities at the national level. In view of the perceived need for an incrementalapproach, beginning with capacity building, focused actions were selected to target institutionalstrengthening needs, regulatory and immediate technical needs related to coastal manaLgement,biodiversity protection, and mitigationof growing risks from coastal erosionand oil spills. The rational for GEF financing of this project is tied to biodiversity conservation objectivesand the successful developmentof a prototype for protected area managementwithin the larger frameworkof a proposedsystem of protectedareas for Georgia.

Inclusion of a larger component dealing with oil spills, ports and ship-based waste was also considered. This option was abandoned due to the uncertainty related to the "major oil" operations in Georgia, the lack of baseline data, and the high cost of investmentsrequired. In view of these reasons,the project will focus on analyzingrisk and liabilityrelated to oil spills and preparationof an oil spill contingencyplan and emergency responsecapability for control of oil pollution. Similarly, it was decided to limit the coastal erosion/municipalwater resources use componentof the project to the preparationof priority managementplan and feasibility studies to address severe erosion and pollution problems in the coastal areas of Poti and Batumi for implementationin a subsequentinvestment phase.

12 A separate biodiversity component through loan financing was also considered. Existing governmentresources and internationalefforts directed to forest and wetlandbiodiversity will not ensure the protectionof globally significantbiodiversity in the KNP and KNR designatedareas. The GEF Alternative,with an incrementalcost of US$1.32million, would provide the means for the creation of KNP and KNR,the implementationof their managementplans, and the integration of biodiversityconservation principles into regionaland local developmentplanning. The scope and global benefitsof the GEF Alternativeare further outlined in Annex 11.

2. Major related projects financed by the Bank and GEF and/or other developmentagencies (completed,ongoing and planned):

Project Latest Supervision (Form 590) Ratings (Bank-financed projects only) Implementation Development Progress (IP) Objective (DO) Bank-financed Municipal Infrastructure S S Rehabilitation - MIRP Oil Institution Building S S National Environmental N/A N/A Action Plan (IDF/Bank) Biodiversity Strategy and N/A N/A Action Plan (GEF/Bank) Municipal Development and S S Decentralization Project Forestry Biodiversity Project N/A N/A Agriculture II N/A N/A Cultural Heritage Project S S Other development agencies UNDP/GEF (with Bank, Regional Black Sea N/A N/A EU TACIS and UNEP Environment Program support)

IP/DORatings: HS (HighlySatisfactory), S (Satisfactory), U (Unsatisfactory),HU (Highly Unsatisfactory

N/A =Project not yet undersupervision or doesnot use theBank 590 form.

3. Lessons learnedand reflected in the proposedprojectdesign:

The lessons from these and other Bank projects in the region underscorethe need to (i) to obtain support at the highest levels to ensure commitment to project objectives and the necessary allocation of resources for the project; (ii) focus on institutional strengtheningand capacity building in the technical and policy areas (this is particularly true for IntegratedCoastal Zone Management,which requires an interdisciplinaryapproach). Lessons also suggest that (iii)

13 simple focused projects tend to be more successful than complex and comprehensive undertakings,(iv) and finally, building on existingPIUs to take advantage of knowledge and networksformed earliercan advance project designwhile institutionalizingexpertise.

Other valuable lessons for establishing integrated coastal management in Georgia come from experience beyond the Black Sea, from regional environmentalprograms in the Baltic and Mediterranean. These includethe need to integrate coastal managementplanning into national developmentplans; the need to build ownership of the project locally through public awareness and involvement in project aesign and implementation; and the need to focus on project sustainabilityand resource mobilizationto ensure continuitybeyond the project implementation period. The successful introductionof economic instruments such as user fees and pollution fines/fundsto finance environmentalmanagement has been demonstrated in many of the more industrialized nations, and will be piloted in Georgia (to reduce costs of National Park administrationand financeoil spill responseoperations) under this project.

The GI4CMproject design reflects the above mentionedlessons in the incrementalapproach of the project which attempts to build a sound foundationfor ICZM through institutionalstrengthening and local participation. The projecthas been highly supportedin Georgia,and its design is based on substantial efforts of Georgian NGOs and government partners prior to the Bank's involvement. Parallel co-financing and execution of the two of the five components by the Government of Netherlands will help simplify the Bank's oversight of implementation. It will also help encourageand strengthenthe involvementof other donors to undertakecomplementary activities within the project's framework. Georgians involved in the coastal management component of the Municipal Infrastructureand RehabilitationProject (MIRP) Credit have been actively involved in the project design, and are expected to continue their involvement during implementationof the project.

4. Indicationsof borrowercommitment and ownership:

Georgia has signed and ratified the Bucharest Conventionfor the Protection of the Black Sea Against Pollution (1992), signed the Odessa Ministerial Declaration (1993), and signed the Strategic Action Plan for the Rehabilitationand Protection of the Black Sea (1996). The foundationfor the projectcame out of activitiesunder a GEF grant componentof the World Bank financed MIRP project, from Georgia's ongoing active involvement in the Regional Black Sea activities, and from initiativesby localNGOs. All levels of Government(national, regional,and local) have participated in the project design and provided direct and written inputs. The GeorlgianState InvestmentCouncil (chaired by the President),fully endorsed and approved the project conceptin its May, 1997 sess ia. The NationalEnvironmental Action Plan, a government documentinvolving broad consultation,identified introduction of a comprehensiveCoastal Zone ManaLgementProgram as one of the highest priority investments. Implementationof the (smaller) initial ICZM programunder the MIRPwas consideredsuccessful.

5. Valueadded of Bank and GEFsupport in thisproject.

Coastal zone issues in Georgia are complex and require technical expertise, supporting institutional and legal frameworks, and solid financial support. Earlier ICZM activities in Georgia were initiated under the regional BSEP and a GEF Grant as part of a Municipal Infrastructure RehabilitationProject. This current project is the next step, targeting concrete interventions to improve the environmental quality of the Black Sea and ensure that future development of its resources results in continuous and equitable benefits to Georgia without negative impactsdownstream. The Bank will facilitatethis by providing the necessary financing for the establishmentof the Kolkheti NationalPark and KobuletiNature Reserve. Bank support

14 under the project would also facilitate the developmentof legislationoutlining the mandate and responsibilities of an ICZM authority, and would help rationalize responsibilities between agencies for activitiesand land use in the coastal zone. Throughits role as broker, the Bank has and will continue to mobilize donor support for ICZM in Georgia. The successful implementationof the project should serve to provide valuable lessons learned for replication within the coastal zone of Georgia,and in other Black Sea countries.

E: Summary Project Analysis (Detailedassessments are in the project file, see Annex 8)

1. EconomicAnalysis (supportedby Annexes 4 and 11)

[] Cost-Benefit Analysis, qualitative discussion [ X]Cost Effectiveness Analysis (qualitative discussion) [X ] IncrementalCost

An economic assessmentfor the project summarizesthe costs and benefits which are likely to result from implementingthe project. Costs identified included the total project costs ($7.6 million) and potential costs of foregone economicactivity as a result of establishingtheKolkheti National Park. Overall benefits discussed included public health benefits; tourism benefits; institutionalbenefits, or benefits gained by setting up more effective means for cooperationand decision making; benefits from preservation of ecological resources including the functional values of wetlands for flood protection, pollution filtration, and habitat values; benefits from establishingof an oil spill preventionprogram; and non-use values of nature protection such as existencevalues and bequest values. Althoughmost of the benefits and some of the costs cannot be quantified,the analysis providesa more in-depthdiscussion as to why they are important. The discussionon tourism benefits examinesa contingencyvaluation and a travel cost study that were prepared as part of the regional Black Sea EnvironmentProgram to estimate potential gains or economic rent that Georgia could recover in beach related tourism as the Black Sea environment improves. What becomes apparentthrough the studies is that due to the trans-boundarynature of the coastal pollution problems, Georgia cannot maximize it's tourism benefits without wider regional cooperation. The project will support Georgia's participation in regional activitiesand meeting its regional commitmentsas well as activities within Georgia's control that will reduce coastal pollution.

The types of foregone economic activities due to establishing the National Park and Nature Reserve are generallyknown (hunting, fishing, firewoodcollection, reed collection,and peat and gravel mining),however the costs are not well identified. A number of measureshave been taken to minimize these costs in the project design through the local community consultationprocess which considered these factors in agreeing to proposed park boundaries. The project has also been designedto minimizeeconomic costs from foregoneactivities to the extent possiblethrough local involvement in the operations and managementof the National Park. No land tenure or resettlement costs are anticipated because park boundarieswere in part determinedto avoid any resettlement. Based on the benefits identified in the analysis,the interdependencyof the quality of the environmentwith its coastal uses, and the importanceof Georgia's coast to the overall economy, the incremental benefits are expected to outweigh the incremental costs for the proposedproject.

For the GEF component,the difference between the estimatedtotal cost of the Baseline Scenario US$7.07 million and the estimated cost of the GEF Alternative US$9.03 million is US$1.96 million, of whichUS$1.32 million is providedby GEF financing. This representsthe incremental cost for achievingsustainable global environmentalbenefits, as outlined in the IncrementalCost Analysis in Annex 11.

15 2. Financial analysis (see Annex 5):

Fiscal impact:

Total governmentfinancing during the project implementationperiod is estimated to be $900,000 USI) equivalent which is less than 0.1% of the 1998 budget of Georgia. Since the government contribution is spread over a six year period, the annual fiscal impact will be even less. The project has been co-financedwith a GEF Grant of US$1.3 million equivalent and a Netherlands GovernmentGrant of US$1.0million equivalent to help reduce the fiscal burden of borro.vingfor this type of project. The project would not directly result in an increase in revenues to the government,and may in the longer term result in some increasedexpenditures for operationsand maintenanceof the KolkhetiNational Park and Kobuleti Nature Reserve. However, government expendituresfor operationsand maintenance of KNP and KNR would be minimized since the number of governmentstaff positions are not expected to increasesignificantly, due to a transfer of functions between the Forestry Department and the Department of Protected Areas. The National Park would gradually develop the capacity to generate and retain funds through introductionof user fees and other income earning activitieswhich will help reduce pressure on the state budget. Any tourism generated as a result of the project should also help increase Georgia's tax base as a result of increasedconsumer spending.

3. Technical analysis: The project is technicallyjustified on the basis of the urgent need for coastal protection in Geoirgia. This assessment is based on increasing risks from the transport, processing, and production of oil, conversion of coastal wetlands and poaching of wildlife, coastal erosion, contamination of surface and nearshore waters, and expanding port and urban sectors in the absence of regional or local coastal managementplans. On the internationalside, the increasing deteiriorationof environmentalquality in the Black Sea and the costs of mitigating coastal and marine degradationin the future, compel the countries of the region to act. The vulnerabilityof internationally important biodiversity resources and lost revenues from fisheries, tourism and other Black Sea amenities have evoked a commitmenton the part of governmentsin the region to act individuallyand collectivelyon behalf of the public good. The projectcomponents under the project have been selected to address not only issues of immediate concern, but even more importantly,to create the capacity among Georgiansto respondto future acute or chronic crises which could threaten the viability of productive Black Sea ecosystems. Investments under the different components are keyed to similar activities in other parts of the world. On the environmentalquality monitoring side, equipment needs and training have been designed after WHO standards introduced under the regional BSEP. International best practices are being incorporatedinto the design of a coastal Information System, institutionalstrengthening, public awarenessand training,and a demonstrationpilot within a proposed systemof ProtectedAreas in Georgia .

4. Institutional analysis: a. Executing agencies: The ICZM WG and PIU would be responsiblefor technicalcoordination and daily operationand monitoringof all program activities(working closely with theMoE, and PAG and the nationaland local ICZM Commissions). Specificactivities would include: drafting of TORs and contracts for program components; identification and selection of program contractors on a competitive basis; supervision of implementation;financial accounting; and reportingto supervisors. The project would lay the foundationfor transforming this unit and its

16 counterparts in the field into a Center of Excellence for ICZM through the hiring of additional local staff, training, equipment, and technical assistance (national and international experts). Procurement and disbursementof project goods and services for the KNP/KNR components would be administeredfrom the PIU. The establishmentand operationsof theKolkheti National Park and the Kobuleti Nature Reserve would be governedby a law which has already passed the first hearing in Parliament. The adoption of the law would be a conditionfor disbursementof that component. b. Project management:The Ministry of Environment (MoE) would be responsible for overall project management. Broad consultationand inter-sectoralcoordination on the complex issue of ICZM would be enhanced by the creation of the State InteragencyConsultative Commission (SCC) and later the networkof three Local ConsultativeCommittees (LCCs), one in Poti, one in Kolkheti, and one in Batumi. Close collaboration already exists between the MoE and the Department of ProtectedAreas (DPA), a discrete, semi-autonomousgovernmental entity. Their links would be further strengthenedunder the project.

5. Social analysis:

Participatory and infornation workshops were organized with local authorities under the initial ICZM program, and subsequentconsultation was done during project preparation. The project design is based on the outcome of these activities and on the direct involvement of local communities.

Local ICZM consultativecommissions will be establishedin three key locationsalong the coast (Poti, Batumi, and in the surroundingKolkheti area) to ensure that benefits from the project are targeted to coastal communitiesmost at risk and to ensurestakeholder commitment to the project and to its objectiveswell beyondthe implementationperiod.

The Kolkheti National Park and Kobuleti Reserve project component has been designed in collaborationwith Georgianstakeholders and builds on earlier protectedarea planning initiatives undertaken by Georgian NGOs in collaboration with the Govemnmentof Georgia. Regional Support Groups, facilitated by World Wildlife Fund (WWF) ConservationProgram in Georgia and comprised of representatives from local government, civilian stakeholders, and media organizations were establishedto raise public awarenessof the proposed project activities and ensure broad participationof local residents in planning and implementingcomprehensive plans for the proposedProtected Areas.

Particular emphasis during stakeholderdiscussions was given to efforts to develop management plans for the support zone communitiesaround the protectedareas. This approach was pursued with the objective of fostering a sustainable economic developmentof the support zones which depend in part from resourceslocated inside the protectedareas, along with the developmentof the nature reserves. For example,resource harvesting (fishing,hunting, forestry)will be allowed in the support zones, but will be regulated and enforced. The National Park and Nature Reserve staff would give technical assistance to help local people manage the resources sustainably. There may be temporaryor even permanentbans on certain activities,depending on the needs of the ecosystem or resource. The National Park and Nature Reserve staff, Regional Support Groups, and Protection Areas Advisory Council have been designed to help foster commtnity- based managementschemes and resolve disputes that could arise. The Kolkheti Local Protection Areas Advisory Council,to be establishedunder the project will participatein the activities of the Regional Support Group for public awareness campaigns, field inventory, planning, and implementationrelated to the managementplan for the protectedareas.

17 6. Environmentalassessment: EnvironmentalCategory [ ] A [ X] B [ ] C

Most of the project is focused on institutional strengthening,capacity building, and technical assistance which, together with the protected areas component of the project, should have an overall positive environmentalimpact. However, in the course of establishing the Kolkheti National Park and Kobuleti Nature Reserve, limited civil works will be undertaken, such as installationof a perimeter fence, visitor center, hiking trails/boardwalks,etc. Potential negative impaLctsfrom this could includesedimentation, loss of a small fraction of the habitats within the reserve area where such infrastructureis installed, and secondaryand tertiary impactsfrom access by constructionworkers, and later tourists,to the areas. Implementationand enforcementof park and reserve managementplans, which is one of the main objectives of the project, will help cont-ol access and minimizeany adverse impactsfrom tourism. The project area is already under severe threat from illegal wood cutting and hunting activities and thus enforcement of park regulations will benefit the environmentby reducing current impacts from these activities. A more detailed descriptionof these benefits can be found in the economicanalysis discussion.

An environmentalreview would be conductedin accordancewith Georgian laws and the World Bank operational directive 4.01 on environmentalassessment, focusing on the Kolkheti National Park and Kobuleti Nature Reservecomponent. Since the design of any proposed civil works will be cosmpletedas part of the project implementation, the World Bank's acceptance of this environmental review would be a condition of disbursement on the Kolkhet/Robuleti project conqmor.ent(Section G3 (b)). Any issues raised in the environmentalreview will be incorporated in the construction bidding documents and the works will be carried out in accordance with intennationallyaccepted practicesto meet environmentalrequirements.

7. Pa2rticipatoryapproach:

The lprojecthas been developedwith a participatoryapproach beginningwith implementationof the GEF componentof the MIRP Project which identified the need for many of the key project elements through small grants for participatoryactivities such as public awarenessand outreach by local NGOs, educational programs (summer camp) and poster contests for local school children. Participatory and informationworkshops were also organized with local authorities under the initial ICZM program, and subsequent consultation has been done during project preparation. The project design is based on the outcome of these activities and on the direct involvementof local communities.

The Kolkheti and Kobuleti Reservesproject componenthas been designed in collaborationwith Georgian stakeholders. RegionalSupport Groups, facilitatedby WWF ConservationProgram in Georgia and comprised of representatives from local government,civilian stakeholders, and mediiaorganizations were establishedto raise public awarenessof the proposed project activities and ensure broad participationof local residents in planning and implementingcomprehensive plans for the proposed ProtectedAreas. Particular emphasis during stakeholderdiscussions was given to efforts to develop managementplans for the support zone communities around the protected areas. Such approach was pursued with the objective of fostering a sustainable economicdevelopment of the support zones which depend in part on resourceslocated inside the protected areas, along with the development of the nature reserves. Concrete actions resulting from these were revisionsto the proposedNational Park boundaries.

Local consultativecommissions will be establishedunder the project in three key locationsalong the ciDast(Poti, Batumi, and in the surroundingKolkheti area) to ensure that benefits from the project are targeted to coastal communitiesand to ensure stakeholdercommitment to the project and tD its objectives well beyond the implementationperiod. The Local Advisory Council for

18 Kolkheti will provide a forum to manage and ensure that local communityinterest are protected, and technical training under the project will include workshops in management and conflict resolution. In addition, all efforts will be made to ensure that local citizens andNGOs benefit from the establishment of the Park, especially through their involvementin park management activities. The Kolkheti Protected Area Management Plan calls for technical assistance in alternative forest and land use and agriculture in support zones to find win/win solutions for sustainablegoods/services for the local people as well as environmentalbenefits of preserving biodiversity. a. Primary beneficiariesand other affectedgroups: Primary beneficiariesof the projectare Beneficiaries/communitygroups CON/COL' CON/COL CON/COL IntermediaryNGOs COL COL IS/CON/COL Academicinstitutions CON CON CON Local government CON/COL CON/COL CON/COL Other donors IS/CON/COL IS/CON/COL IS/CON/COL

Non-governmentorganizations consulted or who have participated in project design include: WWF-Georgia,Georgian Orthodox Church, Georgia Greens, Georgia Society for Protection of Wildlife, Georgian Youth Eco Movement,Georgia ProtectedAreas Program,Aieti- Association for the Protectionof the Black Sea, PoseidonMarine Association,Noah's Arc for the Recoveryof EndangeredSpecies (NACRES),Grid-Tbilisi (G-Info.), Young LawyersAssociation, Center for EnvironmentalResearch. Private sectorentities consulted includethe Georgia PipelineCompany and rep.esentativesof AzerbaijanInternational Oil Consortium(AIOC). b. Other key stakeholders: Private sector developersand port managementauthorities

Participatory planning and managementare the hallmarks of effective coastal management and are essential to the sustainabilityof any protected areas initiative. As described above under "Social" concerns, preparationof the project has involvedthe participationof local stakeholders concemed with the establishmentof the KNP/KNR and with local authorities concerned with responsibilityfor administeringcoastal resources and sectoralactivities. Because creating public awarenessand buildinga constituencyof local and nationallevel support is an importantfactor in the success of this project, environmentaleducation activities will be incorporatedinto a number of the project components. A meeting with NGOs working on Black Sea environmentalissues was held during pre-appraisalas *--asa meeting with officials of the Eastern Orthodox Church to discuss opportunities for collaboration on promoting Black Sea environmentaleducation. A science curriculum is now being developedfor instructionof and use by clergy in all the Black Sea riparian countries to integrate ecologicalprinciples into religious teachings and community outreach. Project implementationwill emphasizethis participatoryapproach at the national and local levels to raise awarenessabout the project and its objectives,gain support of various interest groupsand provide a forum for resolvingconflicts between stakeholders.

CON = consultation,COL = collaboration,IS = informationsharing 19 F: Sustainability and Risks

1. Sustainability:

The Government is committed up to the level of the President to the project, assuring strong political will in support of this effort. Project sustainability will also be enhanced through institutionalarrangements that build capacity and ownership of the project among implementing agencies. In a twinning arrangement with the PIU, the ICZM Working Group would share responsibilityfor project execution. Through such an arrangement, capacity would be created within govemmentto facilitate integratedplanning and managementof coastal resources so as to maxiimizebenefits to a broad range of coastalresource users. Key aspects of project management would also be institutionalizedwithin the WG to ensure sustainabilityof this function beyondthe life of the PIU. Because these staff would be seconded from existing positionsin the ministries, or in the case of KNP/KNRstaff, from other field locations in the Departmentof ProtectedAreas, substantial recruitment of new personnel for project implementationwould not be necessary. Prospects for long-termnviability of the Protected Areas would be enhanced through revenue generating activities related to ecotourism,aquaculture, and other microenterprisesthat could be supportedin the multipleuse zone of the Park.

2. CriticalRisks (reflectingassumptions in thefourth column of Annex 1):

Risk Risk Rating Risk MinimizationMeasure

ContinuingGoG commitment(political and M Continuingdialogue between Bank financial)to project and GoG on project benefits Conitinuingpolitical stability during project S Internationalcommunity is implementationperiod providingsubstantial economic aid and supportingpolicy reform and good governance

20 Risk RiskRating Risk MinimizationMeasure

Potentialdelay in adoptionof KNP/KNR M Active lobbyingof Parliamentby legislation NGOs and line ministriesfor passage of law; which is a conditionof disbursementfor this component(40% of total project) Incentivesare inadequateto encourage S-H Specialstatus of KNP management compliancewith coastalzone regulationsand entity should provideflexibility in environmentalpolicies by different interest salaries and performanceincentives groups for staff; civil servicerefornn is being launchedwith assistance from the Bank and IMF; enforcementwill be strengthened and market based instruments introduced Ability to recruit and retain qualifiedstaff S-H A PIU and an ICZM WG being during and after project establishedwithin MoE to train civil servant staff in state of the art techniquesfor ICZM and create in- house capacity to manage;create a sense of high professionalismand loyalty to the MoE Cooperationbetween public sector and private M Legal analysis of distributionof oil interests in developingcapacity to respond risk and liabilityfor oil spills across to oil spills public and privatesector being prepared; incentivesto cooperate will be identified Overall Risk Rating M Adaptivemanagement approach I may counteract risk. Risk Rating- H (High Risk), S (SubstantialRisk), M (Modest Risk),N (Negligibleor Low Risk)

3. Possible Controversial Aspects:

(a) The concept of introducing and retaining user charges for the Kolkheti National Park/KobuletiNature Reserve would require a new operating model and culture. Cost- recovery would not be an objective during the life of the project but would be introduced in time after achievement of public awarenessprograms, establishmentof real services and marketingto foreign tourists. It will be necessaryto introducea two-tieredsystem of user fees to realize sufficientreturns.

(b) Achieving interministerialcooperation with the MoE taking a lead role in ICZM and project implementationmay be difficult at the outset. Obtaining buy-in from key ministriesand presidentialsupport at the outset will be important. This will be supported through the State InteragencyConsultative Commission and letters of agreementbetween the MoE and other key ministriesinvolved in coastalactivities.

21 (c) Managingthe Black Sea Coast of Georgia for multipleuse-including conservationand tourism may be difficult in the face of increasing pressure for concessions to private investorswith regard to the transport and productionof oil. The Oil InstitutionBuilding Project and the analysisof conditionsin Georgiav a vis internationalstandards and best practice with regard to oil spill liability and compensationmay encourage adoption of necessarysafeguards to managerisk of oil spills.

G: Main Loan Conditions

1. AgreementsReached at Negotiations

(a) All procurementactivities under the project would follow the proceduresas described in Annex 6, Section 1 and pam. 4 Section C.

(b) Disbursementarrangements will followthe proceduresdescribed in Annex6, SectionH

(d) The functionsof the PIU/ICZMWG and its managemertof the projectactivities will be as describedin Annex6 and SectionC4, para.3.

(e) All projectaccounts will be auditedas described in Annex 6, Sectionm and SectionC4, para. 10.

(f) Reportingand evaluationof projectactivities will be as de,cribedAnnex 6, SectionIV and SectionC4, para. 11.

(g) Confirmationof govemment committmentsto the project including on-going financial support of the PIU/ICZM WG and its government staff, as described Annex 6 and SectionC4, paras. 3 and 4.

2. EiffectivenessConditions:

(a) Establishment of a financial management system to the satisfaction of the Bank, as describedin SectionC4, para. 7.

3. DiisbursementConditions:

(a) Passage of the Law establishing the Kolkheti National Park and Kobuleti Nature Reserve would be a conditionof disbursementfor Component2, as described in Section Cl, pam. 7.

(b) Environmentalreview prepared to the satisfactionof the Bank would also be a condition of disbursementfor Component2, as described in SectionE6, para. 2.

H. Fteadiness for Implementation [ ] The engineeringdesign documents for the first year's activitiesare complete and ready for the start of project implementation. (Engineering works would not begin until second year of project). [X] The Project Implementation Plan has been appraised and found to be realistic and of satisfactoryquality. [] Thefollowing items are lackingand are discussedunder loan conditions(Section G): 22 (a) Establishmentof a financial managementsystem to the satisfactionof the Bank (conditionof project effectiveness).

(b) Passage of the Law establishingthe Kolkheti NationalPark and KobuletiNature Reserve as a conditionof disbursementfor Component2.

I. Compliance with Bank Policies [X ] This project complieswith all applicableBank policies. [ ] The followingexceptions to Bank policies are recommendedfor approval: none recommended

ProgramTeam Leader:Karin J. Shepardson

Acting Sector Director abody

Acting;COunt irecto yI Mu

23 Annex I Project Design Summary GeorgiaIntegrated Coastal ManagementProject

Narrative Summary Key Performance Indicators Monitoringand - riiapf tons

Evaluation '; Sector-relatedCAS Goal: (Goal to BankMission) Protectthe integrityof * Capacityto address * ESWwork * Productivecoastal threatenednatural systems that Environmentaldegradation (periodic) systemscontribute to contributeto sustainable of the Black Sea coast * National reports local and national economicdevelopment in established. * Marine environment economiesand the Georgia * Data on state of coastal and informationnodes; welfare of the population marineenvironment Web sites * The costs of inaction availableto decision makers. outweigh investmentsin enviromnentalplanning and management Project Development (Objective to Goal) Objective: To develop,test, and replicate * Coordinationmechanism for * Presidentialdecrees * Effectivecoastal zone methodsto effectivelyintegrate intersectoralplanning and legislationand managementcontributes environmentalconcerns into managementof coastal regulation to the achievementof coastaldevelopment planning at resourcesestablished at * Recordsof sustainableeconomic nationaland local levels national and local levels. consultativeand developmentat the Global Objective: * Provisionmade for advisory group nationaland local level To assist Georgiain meetingits introducingand retaining meetings * Continuinggovernment internationalcommitments to user fees for protectedareas. * Progressand commitment protect the Black Sea underthe * User based financing supervisionreports * Continuingpolitical Bucharest Conventionand the mechanism(s)for controlof * IMOreports, official stability StrategicAction Plan for oil pollutionpiloted. reportsand * NEAP adoptedand Rehabilitationand Protectionof * Specialiststrained in coastal supervisionreports implemented the Black Sea resourceplanning and * Park legislation; managementtools (EA, collectedfees land-useplanning/zoning; * AnnualRegional & coastalmonitoring; GIS) and National Reports environmentaleducation. * Informationnode for Black * Materialsavailable; Sea regionalcoastal focus group environmentalmonitoring interviews networkestablished in * PIU progressreports Georgia. * Focusgroup reports, * Black Sea environmental interviewswith local educationmaterials government developedfor formal and informalsectors (curricular, mass media, training materials). * Nationalpark staff trained. * Local stakeholder participationfacilitated in coastaldevelopment managementdecisions.

24 NarrativeSummary KeyPerformance Indicators Monitoringand Critial Assumptions Evaloation Outputs: (Outputsto Objective) la. Institutionalarrangements * The first elementsof a * PIU reports * Incentivesare adequate for ICZMestablished at national cohesiveinstitutional and * Supervisionreports, to encouragecompliance and local levels legislativeframework in mid-termreport and with coastalzone lb. ICZMlegislation drafted for place;consultative ICR regulationsand policies regulationof development commissionsin placeand * Evaluationmission by differentinterest activitiesin the coastalzone functioningeffectively reports(mid-term & groups final) * NEAPadopted and implemented 2. NationalPark demarcated, * Poachingand harvesting * Parkmanagement * KNP/KNRlegislation basic infrastructureprovided, ratesreduced compared to reports adopted and environmentaldegradation baselineconditions; no new * Regularsite visits * NEAPadopted and trendsstabilized within the Park encroachmentwithin Park a Socialassessment implemented boundaries 3. CoastalZone Monitoring and * High demandfor * Regularreview of . Datawill be made InformationSystem activated informationfrom user statusof data bases availablefor accessby and functioningfor protectionof groups;effective warning and information publicand privateuser publichealth and natural systemsimplemented; systems groups systems hardwareand software * Periodicreview of * User groupswill have an effectivelyused in theiruse through interestin accessingand collaboratinginstitutions contactswith a usingdata for planning diversityof user and management groups 4, Futureinvestment program to * Favorableresponse and * Draftand final * Costeffective controlcoastal erosion follow-upby GoGand feasibilitystudy interventionscan be prioritizedand associatedrisks donors * Implementationplan identified quantified adoptedby GoG * Governmentand local communitiesprepared to implement recommendations 5. Tieredresponse strategy and * Contingencyplan and * Draftand final * Governmentprepared to implementationplan developed financingplan developed strategyreports give priorityto for oil spills and approvedby * Developmentof environmentalaspects of government;private sector agreementsbetween oil development participationforthcoming Govermmentand * Sisterproject privatesector implementedfor oil institutionbuilding * Privatesector prepared to cooperateon oil spill preventionand control Project Components/Sub- Inputs: (budgetfor each (Componentsto Outputs) components: component) ICZMInstitutional Capacity . US$1.4million * Progressreports * Nationaland local Building: (quarterly) governmentscommitted * ICZMWG established * Disbursement to ICZM * Draftlegislation reports(quarterly) * Legislationdeveloped in * Coastalland use planning * Supervisionreports a tinely manner . ~~~~*Consultative commission * Consultativecommission * Minutesof m onsatregularissis commission meet on a regularbasis meetings * Adequateand timely counterpartfimding

25 -Narrative Summary Key PeriormanceIndicators Monitoringand CriticalAsuumptlni-. -:;<; Q ; }t i - . - .- -~~EvaluatiODn . 'tm KolkhetiNational Park and * US$3.3million * Progressreports * KolkhetiNational Park KobuletiNature Reserve: * Disbursement legislationadopted by * Managementplans prepared reports Parliament * Biodiversitymonitoring * Supervisionreports * Cooperationbetween * Training/publicawareness * Regularsite visits nationaland local * Habitatrestoration * Monitoringof Coventt chne agis a Cooperationat the * Research changesagamst communitylevel baselinedata * Managementprograms can be implemented underlocal conditions * Abilityto recruitand retainqualified, dedicatedstaff during and afterproject * Qualifiedindividuals availableto receive training CoastalMonitoring and * US$1.9million * Progressreports * Accesswill be provided Information: * Disbursement to informationand data * Training reports * Equipmentwill be * Coastalmonitoring program * Supervisionreports properlymaintained and * GIS nodes and network * Reviewtraining effectivelyutilized prograrnsand course * Highquality team of evaluations internationaland local * Reviewof users' expertsis contractedfor viewson systems and data Evaluationof CoastalErosion * USS0.5million * Progressreports * Reportidentifies cost- and CostEffective Interventions * Disbursement effectiveinterventions to in municipalwater resource use reports controlerosion * Supervisionreports * Sustainednational and * Reviewof draft and localgovernment interest fnal feasibilitystudy in implementationof * Implementationplan actions adoptedby GoG * Non-investment measuresfor erosion controlthrough land and water use management are also adopted

26 r.xS < X E~~~~~ie Pl rfkrinceodktr .--M. t

OilPollution Contingency * USS0.5million * Progressreports * Cooperationbetween Planning& Emergency a Disbursement public and privatesector Response reports interestsin oil spill * Supervisionreports contingencyplanning * Draftand final * Interestexists with strategyreports Governmentand private * Developmentof sectorfor follow-on agreementsbetween actionswhich involve Governmentand managementand privatesector investmentmeasures * Abilityto recruitand retainqualified, dedicatedstaff for planningand implementationphase activities

27 Annex2 GeorgiaIntegrated Coastal ManagementProject

PROJECTDESCRIPTION

Introduction 1. Georgia's coastlineextends approximately310 km along the western reaches of the Black Sea. The Georgiancoastal zone extends from the plains between the Mountain ranges of the Greater and Lesser Caucasus to the northeast and south east and the wetlands of Kolkheti and Kobuleti to the West. The topography is characterizedby wetlands and marshesalong much of the coast and steep cliffs and mountainsin the north and south. Major coastal habitats include near-shore marine fishery areas, coastal barrier dunes, extensivepeat bogs, coastal deltas and braided rivers, which are characterizedby high levels of biological diversityand organic productivity.Much of the coastal zone is densely populated:major coastalcities are Batumi (140,000),Poti (50,000), and Sukhumi (120,000) in Abkhazia.However, due to the current political instabilityin Abkhazia,the northernhalf of Georgia's coastal zone which falls withinthe borders of this autonomous republic is currently defacto outsidethe administrationof the GoG. 2. Upstream human activities have put increasing pressure on coastal zone ecosystems along the Black Sea, while further downstreamover-fishing and off-shore dumping have devastated marine resources. In general, fragmented and weak managementof natural resources at the regional, national and international levels has resulted in uncontrolled pollution, unsustainable exploitation and loss of productive habitats in the coastal zone. This undermining of the productive resource base of the Black Sea has the potential to severely compromise Georgia's future economic developmentprospects and calls for strategicplanning and integrated.managementof the multiple resourcesand landscapesalong Georgia's Black Sea coast. 3. Georgia is not alone in facing the problems of a deteriorating Black Sea environment. The six riparians bordering the Black Sea recognized their common challenge and the need to jointly address the spiraling degradationof what was once a flourishingecosystem. 4. In the fall of 1996,a StrategicAction Plan for the Rehabilitationand Protectionof the Black Sea (BS-SAP),prepared by all six littoral states, was signed and the process of implementingthis regional strategy begun. The establishmentof national programs for integrated coastal management underlies the strategy and is a unifying theme in the ability of ripariansto optimizebenefit flows from the Black Sea and to meet the regional objective of protectingand rehabilitatingthis shared marineecosystem. 5. The Georgia Integrated Coastal Management Project is designed as a first step toward this long-termgoal. Consistentwith the need to build a strong institutionalbase as a foundationfor ICZM, the emphasis of this initial project is on capacity building and creating an enabling environment for the introduction of improved management

28 techniques and investmentsin the coastal zone. The project scope, therefore,includes the following components: Project Component1: ICZMInstitutional Capacity Building (US$1.5 million)

6. This component aims to establish an ICZM institutional and legal framework through: (i) a State ConsultativeCommission for ICZM, (ii) the creation of an operational ICZM Unit, the WorkingGroup for the Advancementof ICZM; (iii) three Local ICZM Consultative Commissions;and (iv) preparation and completion of Park Management Plans. In addition to these institutionalarrangements to facilitate inter-sectoralplanning and the participationof multiple stakeholdergroups in coastalresource decision making, the project will also support the drafting of legislation and codes of practice for the coastal zone. 7. The State ConsultativeCommission for ICZM (SCC) will serve as the principal forurn for interpreting and coordinating existing policies among the various sectors/stakeholdersinvolved in coastal and marine resource use along Georgia's Black Sea Coast. It will also be instrumental in guiding the drafting of legislation for the Coastal Zone The SCC would be coordinated by the Ministry of Environment and Ministry of Urbanization and Constructionas the lead agencies for ICZM, and would consist of representativesof relevant government sectoral and planning agencies, local authiorities,academia, private sector, and the public. The SCC was fornally established by a PresidentialDecree (# 608) on October25, 1998.

8. The Working Group for the Advancement of ICZM (ICZM WG) will be establishedas an independent,multi-disciplinary entity with the full technical support of relevant government agencies (Ministry of Environment,Ministry of Urbanization and Construction, Department of Protected Areas, Ministry of Health, and Ministry of Transport) with interests in the Coastal Zone. The ICZM WG will provide a working space for staff seconded from these ministries, and for training on state of the art equipment in the use of GIS and other ICZM tools and techniquesfor integratedplanning and management of the coastal zone. A Project Implementation Unit (PIU) with exec:utivepowers for overallproject supervisionand coordination,including contracting and disbursementoversight in accordancewith Governmentand Bank procedures,will be housed in MoE, and work in close cooperationwith the ICZM WG. 9. With project fundedtechnical assistance, the WG will undertakevarious activities suchias working with the SCC to draft ICZM legislation outlining the mandate and responsibilitiesof a coastal authority and codes of conduct for developmentactivities in the coastal zone; facilitatingtechnical assistance for the preparation of coastal land use plans at key points along the Black Sea Coast; establishing a coastal environment infonrmationsystem; preparing the first Report on the State of the Environment in the Georgian Coastal Zone based on monitoring data and informationanalysis; launching a training and public awarenessprogram; and initiating and supervisingthe activities under the other componentsof the project.The WG will liaise with the national and local ICZM consultative commission and with concerned public and private institutions, including NGOs. The WG will be provided with equipment, training, and hands on technical assistanceto promoteits developmentinto a Center of Excellencefor ICZM in Georgia.

29 10. The PIU/ICZM WG will help establish a network of three Local ICZM Consultative Commission (LCCs) in: Poti, Kolkheti, and Batumi. The purpose of the LCCs is to encourage stakeholderparticipation in establishingICZM priorities at the municipal and local levels,where decisionsby resourceusers most closely affect the state of nearshore coastal ecosystems. In Kolkheti, the primary purpose of the LCC (KNP Advisory Council) would be to serve as a community based advisory body to the National Park and Nature Reserve, mandated by protected area legislation, to provide input to park managementplans and their implementation.The Poti and Batumi LCCs would be more broadly focusedand would involve multiple stakeholdersfrom different economic as well as social sectors, including the public sector, private and non- governmental entities, and the clergy. The set-up and initial operation of these commissionswill be facilitatedby PIU field coordinatorsin Poti and Batumi. 1l. The existing managementguidelines for KNP and KNR funded under a small grant from GEF providea foundationfor preparing comprehensivemanagement plans for these protected areas under the project. The project will finalize and implement the managementplans. These plans will unify various measures to improve protection and managementof the biodiversityof the KNP and KNR, includingrestoration of degraded habitats, control of illegal logging and hunting, and monitoring.The managementplans will integrate the park's biodiversity protection functions with regional development needs, such as tourism and floodprotection.

ProjectComponent 2: Establishment of the Kolkheti National Park and Kobuleti Nature Reserve(US$3.2 million)

Background

12. Project component two focuses on the establishmentand management of two protectedareas, the KolkhetiNational Park and the KobuletiNature Reserve. The project will also integrate conservationof these two wetland sites into the broader development objectivesof coastal zone managementin Georgia 13. The proposedKolkheti National Park is an approximately45,000 hectare area that liesjust to the north of the Rioni River near it's mouth, and approximately10 kilometers to the south of the Abkhazia border. The Kolkheti National Park would be established around an area within the larger Kolkhetiwetlands lowland complex that was designated as a Ramsar (a wetlandof internationalsignificance) site in 1996. The proposed Kobuleti Nature Reserve (KNR) is a smaller, approximately780 hectare, area located just inland from the Black Sea coast near the city of Kobuleti, which also received global designation as a Ramsar site. It is also part of the larger Kolkheti wetlands lowlands complex. Both proposed protectedareas support rare and relic communitiessuch as peat bogs, Alder (Alnus barbata), and other forest types from the Tertiary period. The two protected areas consist of subtropical forests and a wetland complex and contain high levels of endemism and floral diversity, as well as some of the most significant and threatenedecosystems in Georgia. The region also provides criticalhabitat for numerous species of migratoryand winteringbirds. These forest and wetlandecosystems are under threat as a result of drainage of wetlandsfor agricultural and urban use, forest harvesting, illegal hunting, peat and gravel mining,pollution, and invasionby non-native species. In 30 addition to conserving terrestrial communities, the Kolkheti National Park would also protect intercoastal waters of the Black Sea and would be the first protected marine environmentin Georgia.

14. In 1992, the World Wildlife Fund Conservation Program in Georgia (WWF- Georgia)identified the Kolkhetiwetlands as one of seven potential national park sites in Georgia, and in 1994 drafted, with support from the BSEP/GEF ICZM program, guidelinesfor the developmentof the park. Frameworklegislation supporting a proposed system of Protected Areas in Georgia, including the proposed Kolkheti National Park, was enacted in December 1996. This law requires separate legislation to finalize individualpark boundariesand administrativearrangements. A draft law for establishing the Kolkheti National Park (KNP) passed the first of three Parliament hearings in Dec-ember1997. The second and third (final) readings will incorporatecomments from stakeholders including the local comrmunitiesand would occur consecutively. Final passage of this legislationis a conditionof disbursementon the overallKolkheti/Kobuleti projiectcomponent. Summary information on the KNP and KNR are providedin the table below.

31 KolkhetiNational Park and KobuletiNature Reserve Summaryof Zones, Planned Use, and Area Zones PermittedUse Approximate Area Area (hectares) (hectares) Kobuleti Kolkheti Nature NationalPark Reserve StrictNature Monitoring,scientific research, and 18230 330 Zone educational activities (3640 marine) ManagedNature Nature-basedtourism, educational 23850 420 Zone activities and, where approved, (10730 sustainableuse (fishing,grazing, marine) forestry) Recuperation Activitiesconsistent with restoration 2680 Zone of degradedecosystems VisitorZone and Educational,research, and tourism 1.4 Environmental activities Education Zone Administration Administrativeinfrastructure for park 25 30 Zone management(headquarters, visitors center, etc.) Historic-Cultural Protectionand restorationof 65 Zone identified historicand cultural monuments 44850 780 Totals (14370 marine) Support(Multiple 74700 Use) Zone

Objectives

15. The objective of the protectedareas component of the GICMPis to improve the protection and managementof threatenedforest and wetland natural habitats within the Kolkheti coastal region, and to integrate these protected areas into the broader developmentobjectives of the coastalmanagement project.

Proposed Activities

Creation of Kolkheti National Park and Kobuleti Nature Reserve

16. In accordance with the 1996 Law on Protected Areas Systems, new protected areas are established by law and enacted by Parliament.The project will assist with the establishment and operation of a local Advisory Council necessary for the park and reserve's long-termviability. In particular,the project will finance:

32 (a) Establishment of Park Infrastructure. The project will fund the infrastructure for establishing and managing the new/expandednational park and reserve as a necessary means to achieving the project's objectives. The infrastructuremay include establishmentof the park and reserve boundaries, limited fencing of sensitive habitats to mitigate grazing impacts, and constructionof an administrationand visitors center, guard stations and checkpoints and limited infrastructure needed to accommodate and manage nature-based tourism such as hiking trails, observationtowers for birdwatching,and informationcenters for tourists.

(b) Environmental Education. The project will raise the level of environmentalawareness and understandingamong the local and regional population. This will be accomplishedthrough interpretivematerials on the ecologyof the Kolkhetiecosystems and the connectionto the cultural- historical heritage of the region, clergy and teacher education seminars, and ecologicaleducation camps for school children.

(c) Habitat Restoration.The project will develop and implementbiodiversity restoration activities in the national park and support zone. These include: restoration of species diversity in a managed coastal lowland forest, developmentof a restorationplan for a degradedwetland, and support for the recovery of a millet grain variety that represents part of the Georgian plant genetic diversity.

(d) Land Use Planning Studies. The potential for nature-based tourism in Georgia is excellent due to its scenic landscapes, and rich cultural and biological diversity. The project will provide technical assistance to develop a nature-based tourism plan for KNP and KNR, including mechanismsto avoid impacts to sensitive habitats. Other studies include input to regional developmentplanning and alternativeland use practices in forests and agricultural lands. The tourism plan will be developed in partnershipwith the Georgianprivate sector, and with local communities in the vicinitiesof the protectedareas.

InstitutionalDevelopment: Support to Park Administrationand Management

11. The project will assist with development of effective park administration and management,through the following: (a) Protected Area Advisory Council A local advisory Council will be establishedto advisethe directorof KNP and KNR and stakeholdersin the support zone on issues related to establishment and operation of these protected areas. The advisory board will be comprised of local representativesof the private sector, Departmentof Forestry, Ministry of Agriculture,Ministry of Environment,affected municipalities, and tourism authorities.This advisorycouncil will advise the Departmentof Protected Areas on such issues as dispute resolution. It will also assist, in concert

33 with the mass media program, in disseminating informationon project issues to local communities.

(b) Professional Development and Training. Professional development and training activities will be provided to administrative, scientific, and warden staff of the protected areas. This training will include principles and practices of national park administration, revenue generation, development of nature-based tourism and other appropriate economic activities for generating income to support the park system. The park administration training will result in production of an operation and administrationplan, includingfinal job descriptionsfor all staff. Key park staff and specialistsresponsible for managementregimes for the protected areas will receivetraining in natural resources management.Wardens will be trained in patrollingand enforcement.

BiodiversityMonitoring and AppliedResearch

12. The project will implementmonitoring and applied research undertaken by park staff and specialistconsultants to guide park managementand evaluatethe effectiveness of restorationactivities. The results of these monitoring efforts will be incorporatedinto a coastalenvironmental information system to be supported under the ComponentThree of the project

Project Component 3: Establishment of a Coastal Environmental Quality Monitoringand InformationSystem (US$1.9 million)

Background

13. An urgent need to monitorthe quality of near-shore (beach) and off-shorewaters, rivers and estuaries, as well as ports and sources of pollution, was identifiedin a regional study commissionedby the BSEP/EU TACIS in 1994. Untreated sewage, municipal waste, pollution from dilapidated oil facilities, ship waste, industrial pollution and agriculturalrunoff represent a known but insufficientlymeasured threat to both public health and the coastal ecosystem, and negatively impact the potential for tourism development. 14. Georgia's existing system of environmentalmonitoring has deteriorated during the years of economic hardship and requires improvementto meet the needs of public health protection and coastal zone management.In addition to meeting national needs, Georgia's environmental monitoring should assist the GoG to meet its international commitments,especially to the regionalBSEP, and contribute to improved management of the Black Sea. Description

15. The Coastal Environmental Quality Monitoring and Information System (CEQMIS)will build on existingmonitoring capacity and aims to strengthenit to provide essential environmental quality data for the benefit of decision makers, the general 34 population and environmeFtal institutions in the Black Sea region. The monitoring system will complement and improve both national and regional monitoring capacity. The componentwill address the need for an improvedcoastal monitoring and information system by supporting preparation of a Monitoringand Information System Feasibility and Design Study and laying the groundworkfor its implementationthrough procurement of sampling, measurement,and analytic equipmentfor selected monitoring laboratories; improvement of monitoring standards and data protocols; provision of training and technical assistance; and establishmentof a basic structure for an effective information systiem.

Subcomponents

16. The CEQMIScomponent consists of the followingsubcomponents: (a) Monitoringand InformationSystem Feasibility and Design Study

(b) Blue Flag Program for BeachWater Quality Monitoring

(d) Pollution Monitoring

(e) ICZM InformationSystem.

InstitutionalArrangements

17. The PIU/ICZM WG will function as the lead implementing institution with overall responsibility for design and implementationof CEQMIS. For this purpose, the PIU/ ICZM WG will receive support in the form of technical assistance, training and informationtechnology including GIS hardware and software. The component will be implementedin close cooperationwith the Ministry of Environment,Ministry of Health, Ministryof Urbanizationand Constructionand their respectivelabs and agencies,as well as the Marine Ecology and FisheriesResearch Institute locatedin Batumi. The maintenanceof the informationsystem and GIS aspect of the CEMQISwill be a responsibilityof the PIU/ICZMWG, linkedto the MoE, the Ministryof Urbanizationand Constructionresponsible for land use planning,and the ResearchInstitute of Fisheries and MarineEcology. GIS nodes and technical support will be establishedwithin the MoE and MoUC,with each institutiondeveloping pilot applicationsfor their respective sectors. Based on the informationgleaned from the monitoringprogram and GIS data, an update of the State of the Coastal Zone Environmentin Georgia will be preparedand disseiminatedelectronically. This will serve as a concreteapplication of the MIS & GIS tool aindan importantresource for decisionmakers at the local and national levels.

Project Component 4: Evaluationof CoastalErosion (US$0.5 million) 18. Coastal erosion is a seriousproblem along many parts of the Georgiancoast. Much of this erosion has been acceleratedby human intervention,including river

35 diversion,lake impoundment,sand mining and coastalengineering works. To assess the factorscontributing to coastalerosion, particularly in the risk-exposedareas of Poti (RioniRiver-Mouth) and Batumi(Chorokhi River-Mouth), the Governmentof the Netherlandswill financea comprehensiveanalysis of municipal water use (including watershedhydrology, sediment load, water supply and wastewater flows,coastal dynamics)and associatedinfrastructure in Poti and Batumi. Based on these studies a plan for integratedmunicipal water managementwould be developedfor each locality.These studieswould includeanalysis of cost effectivenessof existing interventionsto control erosion,and feasibilitystudies of proposedoptions to sustainablyaddress the most serious aspectsof coastalerosion. Investment requirements would be identifiedfor possiblefuture interventions in municipalwater managementand erosion abatement.

ProjectComponent 5: Developmentof a NationalOil Spill ContingencyPlan and Marine PollutionControl Plan (US$0.5million)

19. Grant support has also been obtained from the Governmentof the Netherlandsto develop a national oil spill contingencyplan for Georgia. While the plan will focus on building capacity to respond to oil spill emergenciesboth on and off-shore along the Georgian coast, it will also examine strategies for prevention and abatement of operationalspills. This has the potential to be a growing source of poilution in Batumi and Poti, in view of the increasedtanker traffic envisionedalong the coast and the lack of adequatefacilities at either port to deal with these spills. The PIU/ICZMWG will consult with the International Maritime Organization(IMO), International Petroleum Industry Environmental Conservation Association (IPIECA), and the International Petroleum Tanker Owners Fund, Limited in preparing this component to ensure that national responseplans are consistentwith IMO standardsand existing programsto operationalize such plans. This component would proceed in tandem with private sector initiatives to provide emergencyresponse in the event of an accidental spill in the Supsa Terminal area. 20. The national plan developedunder this componentwill explore the possibilityof financingemergency response to oil spills throughexisting conventionswhich identify the liabilityof oil tanker owners/operators,compensation funds which provide insurance to tanker owners and member countriesin the eventof a spill, and existinglegal arrangementswith oil interestsin the SupsaTerminal area that are responsiblefor respondingin the event of a spill relatedto their operations.At the very least, the national plan financedunder the project will take advantageof opportunitiesfor joint training, monitoring,sharing of equipmentand informationwith the GPC (GeorgiaPipeline Company)oil spill contingencyoperations for the Supsa Terminal. Technicalassistance under this componentwill includeexperts in MarineAdministration and Marine Inspectionin the Ports of Batumi and Poti, and the marine advisorto the GPC, responsiblefor overseeingthe developmentand implementationof oil spill emergency responseplans for the SupsaTerminal.

36 Annex 3 Georgia Integrated Coastal Management Project Estimated Project Costs (US$ thousand) Project Component Local Foreign Total % ------US$ '000 - -- Total Base Cost 1. Establishmentof National ICZM 0.640 0.558 1.198 18 Center 2. Creationof NationalParks 2.169 0.517 2.686 40

3.. Coastal Infornation and 0.508 1.196 1.704 26 Monitoring System _ 4. Evaluationof Coastal Erosion(Poti, - 0.500 0.500 8 Batumi) 5. Oil PollutionPrevention and - 0.500 0.500 8 Management _ _ BaselineProject Cost 3.317 3.271 6.588 100 PhysicalContingencies 0.232 0.159 0.391 6 Price Contingencies 0.548 0.120 0.667 10 Total ProjectCost 4.097 3.549 7.647 116

37 Annex 4 Georgia Integrated Coastal Management Project Cost Benefit Analysis Summary

COSTS BENEFITS

INVESTMENTCOSTS OIL SPILL EMERGENCY RESPONSEBENEFITS National capacityto prevent and respondto spills Total ProjectCosts $7.6 million * reducedcleanup costs * reducedenvironmental damages

COST OF FORGONE ECONOMIC ACTIVITY ECOLOGICAL VALUES * Waterfowl/BirdHabitat and MigrationRoute * Loss of Hunting, fishing, firewood, and reed * Flood ProtectionValue collection, and peat and gravel mining * PollutionFiltration Benefits activities, * Protectionof rare and highly endemicspecies * Fisherieshabitat

PUBLIC HEALTH BENEFITS * Fewerpublic health problemsrelated to beach use due to better public information * Greater awarenessof magnitudeof problems,so that investmentsin pollutionprevention can be prioritized INSTITUTIONALBENEFITS * Prevention of environmentaldegradation caused by private intereststhrough a forum wherepublic welfare is considered using consensus building and public participationtools. * Benefits gained by participation in an international forum for Black Sea cleanup wherebypositive action by any governmenton the Black Sea contributes to the net overall welfare of other littoralcountries. TOURISM BENEFITS National park amenitiessuch as visitor center, pathways, interpretive signs, camping and boating facilities, and researchfacilities to attractvisitors.

* Eco-TourismBenefit due to park * Researchfees generatedfrom internationalusers * User fees for park facilities

Improvementsin the Black Sea Environmentare expected to increasebeach related tourism * Need visible improvements such as reduced solid wastedebris and less oil in water and beaches

NON-USEVALUES * Existence Value to society- knowledgethat one of Georgia's important natural resources has been preserved * Bequest value to society- knowledge that society today has done something to help preserve the environmentfor futuregenerations

38 Annex 5

Georgia Integrated Coastal Management Project

Financial Summary Years Ending December31 (in US million- base year 1999)

1999 2000 2001 2002 2003 2004 Project Costs InvestmentCosts 1.1 1.2 1.2 1.2 1.2 1.1 RecurrentCosts 0.1 0.1 0.1 0.1 0.1 0.1 Total 1.2 1.3 1.3 1.3 1.3 1.2

Financing Sources(% of total projectcosts) IDA 6 15 17 12 5 2 Co-financiers 1 4 5 3 (DutchTF) Co-financiers 0.4 2 4 4 3 3.6 (GEF) Government 1.6 2.1 2.1 2.1 2.1 2 Total 9 23.1 28.1 21.1 10.1 8.6

Mainassumptions: The projectwill becomeeffective in January 1999.

39 Annex 6 Georgia Integrated Coastal Management Project Procurement and Disbursement Arrangements

I. PROCUREMENT ProcurementResponsibility

1. Implementationof the project will require procurementof goods, works, and the selectionand employmentof consultingfirms and individualsto carry out consultingand other technical assistance services. The PIU/ICZM WG will be responsible for procurement. The PIU/ICZMWG will hire a full time procurementofficer whose rain responsibilitywill be to: (a) prepare and carry out any procurement;(b) submit to the Bank all procurementdocuments which require Bank's prior review; (c) prepare and submit to the Bank at the beginning of each calendar year a detailed procurement schedule. Appointmentof the procurementofficer will be done in consultationwith the Bank. At project launch (estimated to be January 1999), the Bank will deliver a procurement workshopto presentand explainprocurement guidelines and commencepreparing specific biddingdocuments.

Procureir ent Methods

2. The procurement of goods and works under the project will be conducted in accordance with the Bank's guidelines "Procurement under IBRD Loans and IDA Credits" published in January 1995, and revised in January and August, 1996, and September 1997. The project componentsnot financed by the Bank will be procured in accordance with national regulations or the co-financing institutions' procurement regulations. A General Procurement Notice will be published in the Development Business of the United Nations in December, 1998. The selectionof consultantswill be done in accordance with the "Guidelines - Selection of Consultants by World Bank Borrowers",dated January 1997, revised September1997. The Bank's StandardBidding Documentsfor Goods, Small Works, and Letters of Invitation as well as StandardForm of Consultants'Contracts will be used. The projectprocurement arrangements are shown in Tables Al and A2 and briefly summarizedbelow. Detailed Procurement Plans are presentedin Tables B and C.

Gooa's

3. For goods procurementpackages estimated to cost US$200,000or more each, the InternationalCompetitive Bidding (ICB) procedure will be used: and for contracts under US$200,000 each, International Shopping (IS), based on comparison of quotations obtained form at least three suppliers in two different countries will be applied. For locally available off-the-shelf goods, estimated to cost up to US$50,000 per contract, National Shopping, based on comparison of quotations obtained from at least three suppliers will be used. For the purchase of goods to be awarded through ICB, the beneficiarymay grant a margin of preferenceof 15 percent, or the amount of applicable

40 customs duties, whichever is lower, to qualified domestic manufacturers of goods in accordancewith the Guidelinesreferred to above.

4. The project includes one ICB package for goods (aggregate amount US$0.780 million); nine IS packages (estimated to cost US$1.054 million); and one NS package (US$0.012million).

5. Civil Works. Civil works contracts estimatedto cost US$0.2million equivalentor more will be procured through ICB; under US$0.2 million, NCB will be used. The procedure applicablefor procurement of small works will be used for contracts up to US$100,000each. The project includes eight NCB contracts (US$1.288million) and one small works contract(US$0.085 million).

6. Consultants' Services. Consultants' services estimated to cost more than US$200,000each will be selected throughthe Quality and Cost Based Selection(QCBS) procedure. Such contractswill be advertisedin the DevelopmentBusiness and a national newspaper for expressionsof interest, from which a shortlist will be drawn. There is one consultant contracts (in aggregate amount less than US$ 200,000, national short-listed) for assignmentsof a standardor routine nature, which may be selected through the Least Cost Selectionmethod. Individualexperts will be selected in accordancewith Part V of the World Bank ConsultantGuidelines.

7. The project includesfour QCBS assignmentsat a total estimated cost of US$1.157 million. Advertisementsinviting expressionsof interest for these assignments will be publishedin the DevelopmentBusiness and in a nationalnewspaper.

8. Consultants'services for the auditing assignment (estimatedat US$0.191million) will be procured through the least cost selection method. Consultant services for the public awareness and media outreach assignment will be procured through the fixed- budget method (US$0.144million). The project also includes (US$0.487million) for the procurementof the services of individuals. These include the experts needed for short- term technical assignments and to staff the PIU during the life of the project. Ten contracts (in the aggregate amount of US$0.609 million) will be selected through the Consultants'Qualification Method of selection.Since there are only some NGO working in the field of assignment,the project will include two contracts awarded on a single source basis to these NGOs (in aggregatearnount US$ 0.136million)

9. The funds allocated to meet various incremental operating costs (US$0.489 million), will be spent in accordance with an annual budget subject to the Bank's prior approvaland followingprocedures satisfactory to the Bank.

Bank Reviewof Procurement

10. Procurement documents for all goods and works to be procured under ICB (>US$200K) (invitation to bid, draft bidding documents, evaluation report) will be subject to the Bank's prior review. Procurementdocuments for the first NCB for works (

42 Table Al Project Costs by Procurement Arrangements

[in US$ million equivalent]

Expenditure Category PROCUREMENTMETHOD Total Cost (including contingencies) ICB NCB Other NBF

A. Civil Works 1.3 0.0 0.0 1.3 (1.2) (0.07)(a) (0.0) (1.3) B. Goods 0.8 1.1 1.9 (0.6) (o.9)(b) (1.5) C. Consultant Services 2.7 1.0 3.7 (2.4)(e) (0.0) (2.4) D. Incremental 0.5 0.2 0.7 Operating Costs (0-5)(d) (0.0) (0.5)

TOTAL 0.8 1.3 4.3 1.2 7.6 (0.6) (1.2) (3.9) (0.0) (5.7)

NBF = Not Bank-financed(includes elements procured under parallel cofmancing procedures,consultancies under trust funds,any reservedprocurement, and any other miscellaneousitems).

Items in parenthesesindicate amounts to be financedby the Bank.

a/ Includesone minor works contract(US$0.07 million). b/ Nine IS contractsand one NS contract( for a total of USS0.9million). c/ Four QCBS contracts; ten consultantqualifications contracts one LC contract;one fixed-budgetcontract; and three individualcontracts (for a total of USS 2A million). d/ IncrementalOperating Costs of US$0.5 million to be incurred based on an annual budget.

43 Annex 6, Table A2: Consultant Selection Armngements

(in US$millionequivalent)

SelectionMethod TotalCost Consultant (including Services contingencies) Expenditure Category QCBS QBS SFB LCS CQ Other NBF

A. Firms 1.157 0 0.144 0.191 0.609 0.136 0 2.237

B. 0 0 0 0 0.487 0 0.487 Individuals

Total 1.157 0 0.144 0.191 0.609 0.623 0 2.724

Note: QCBS= Quality- and Cost-BasedSelection QBS = Quality-based Selection SFB = Selectionunder a Fixed Budget LCS = Least-Cost Selection CQ - SelectionBased on Consultants'Qualifications Other= Selectionof individualconsultants (per SectionV of Consultants Guidelines;includes here: Sole Sourceand Individual), Commercial Practices,etc. NBF = Not Bank-financed.

44 Annex 6, Table B: Thresholds for Procurement Methods and Prior Review

'4-i,;<_' "'' 5__ -' ''''milinqulva(Ut)con l: Procur.ient Review Goodsand Civil ICB NCB IS NS Minor Works Other methods Percentageof loan amount Works subjectto prior review Procurement G > 0.200 W<0.200 <0.200 <0.050 <0.100 n.a. thresholds: (US$0.780) (US$1.288) (US$1.054) (US$0.012) (US$0.085) individualand aggregate Prior Review First First First First First US$1.207million (US$0.780) (US$0.179) (US$0.154) (USS0.012) (US$0.085) or 18%

Consultants QCBS LCS SFB Qualifications Individual Sole Source

Procurement (US$1.301) (US$0.191) (US$0.144) (US$0.609) (US$0.487) (US$ 0.136) method thresholds Prior Review All All All All Only TORs All US$2.237million (US$1.301) (USS0.191) (US$0.144) (USS0.609) (USS0.136) or 35%

Total value of contractssubject to prior review: US$ 3.464 inillion Expost Review Explainbriefly theex-post reviewmechanism: All other All the remainingprocurement packages will be subject to ex-postreview. Supervisionmissions will includea procurementspecialist as neededTo procurement assistthe TM with ex-post reviews. packages -Section,2-. Capacity of the mlempontintAgqncyin Procurementand Technical Assistance requirements The PIU will be responsiblefor implementingthe project, includingprocurement. The PIU staff will includea dedicatedprocurement officer.

Country ProcurementAssessment Report or CountryProcurement I Are the biddingdocuments for the procurementactions of the first year readyby negotiations StrategyPaper status: N/A | Yes No X ___, __ 2 - . Section 3: To and e tn Poctement 7.7 Estimateddate of | Estimateddate of publication I Indicateif there is procurenent I DomesticPreference for Good Domeiic Prfererce for Work-sif appliCable Project Launch of GcneralProcurement Notice subjectto mandatorySPN in Yes No X Workshop Septemberl998 DevelopmentBusiness Yes X No Marchl999 No X

Retroactivefinancing Yes No X Explain:Yc NoXEpan

Explainbriefly the ProcurementMonitoring System: Procurementimplementation progress will be monitoredthrough progress reports and supervisionmissions. Each supervision mission will includea procurementspecialist. She/hewill be respuu;isiblefor updatingthe procurementplan, and conductingex-post reviews. His/herfindings will be includedin the supervisionreports for monitoringtheir implementation. Co-financing: Procurementfor Dutch co-financingwill be administeredby the Dutchministry of EconomicAffairs. The PIU will act as a coordinatingbody for all co-financedcontracts. Procurementfor GEF co-financingactivities will be administeredby the PIU followingbank procedures.

Indicatename of ProcurementStaff or Bank's staff part of Task Team responsiblefor the procurementin the Project: Name: NaushadKhan, Procurement Specialist, Ext 32699 Explain brieflythe expectedrole of the FieldOffice in procurement:A project officer in the ResidentMission would be responsiblefor helpingto superviseproject implementationand wouldprovide procurement support, in whichshe he will have receivedtrainir.g. Table C Georgialntergrated Coastal ManagementProject ProcurementPlan

ICZMLegal Framework, Development of CoastalLand Use Master Plan, CF 1 IDA 344 QCBS Aug-99 Sep-99 Jan-00 Jan-03

2 Training Cl 1 IDA 92 Ind NA Nov-98 Jan-99 Jun-01

Designof Monitoringand Infosystem, 3 smallfield studies,GIS training CF 1 IDA 352 QCBS Dec-98 Jan-99 Apr-99 Dec-01

4 PIUConsultant services (local) Cl 8 IDA 361 Ind NA Nov-98 Jan-99 Jul-04

5 ProjectAdvisory Services CF 4 IDA 256 CQ Dec-98 Jan-99 Apr-99 Jul-04

6 FinancialAudit CF I IDAIGEF 191 LC Mar-00 Mar-00 Jul-00 Jul-04

7 Publicawareness/media outreach CF 1 IDA/GEF 144 FB/N Feb-99 Mar-99 Jul-99 Dec-01

8 ManagementPlan/Layout of Park CF 1 GEF 90 CQ NA Jan-99 Apr-99 Oct-00

_ CommunitySupportInput to Regional 9 Planning CF 2 IDA 99 CQ NA Jan-00 Apr-00 Jan-02

10 EcosystemStudes/Research & Monitoring CF I GEF 225 QCBS Dec-99 Jan-00 Apr-00 Mar-04

Clergy.Local Population& Educators 11 Training CF I GEF 87 SS/NGO' NA NA Apr-99 Jun-04

121StudyAltemahe use of Fo_* st/Agrc Land CF 2 IDA 52 CQ NA Oct-99 Jan-00 Jun-01 TableC GeorgiaIntergrated Coastal Management Project

______Procu 'remnt Plar lll

E131esignand Feasibility ofTourism/SBD CF 1 IDA 49 SS/NGO2 NA NA Jul-99 junI00

Developmnentprintingof Guidebooks and 14 posters CF 1 IDA 112 CQ NA Dec-99 Jan-00 Dec-02

_Intemational,Technical Wardien and staff 15 training CF I IDA 236 QCBS May-99 Jun-99 Oct-99 Dec-01

16 Expertreview of park management CI multiple IDA 34 Ind NA Nov-00 Jan-01 Dec-01

_ Subtotal Consultant Services 2,724

PIU/Monitoringand Infofnation System _ 1 Laboratoryequipment G 1 IDA 780 ICB May-99 Jun-99 Oct-99 Dec-00

2 StandardComputer Equip/ G 1 IDA 151 Is Feb-99 Feb-99 Apr-99 Dec-00

3 GISH&S G 1 IDA 192 IS Nov-98 Dec-98 Apr-00 Jun-01

4 RemoteSensing Imagery G 1 IDA 30 IS3 Feb-00 Feb-00 Apr-00 Sep-00

5 Vehices G 1 IDA 163 IS May-99 May-99 Jul-99 Mar-00

OfficeEquipment (phones, Faxes Copiers, 6 fumiture,projectors,TVNCR) G 1 IDA 81 IS Feb-99 Feb-99 Apr-99 Dec-99

Useof ResearchVessel for Off-shore 7 sampling TS 1 IDA 167 IS Aug-99 Aug-99 Oct-99 Dec-02

I KolkheWtKobuleti Reservses 8 Motoro G 1 IDA 38 iS6 Aug-99 Aug-99 Oct-99 Jun-00

9 Generator,garage equipment G 1 !DA 87 IS Nov-99 Nov-99 Jan-00 Jun-01 Table C Georgialntergrated Coastal ManagementProject ______j ~Procurement Plan

_ Outdoorsupply, sporting equipment, 10 Ecocampsupply G 1 IDA 145 IS Nov-99 Nov-99 Jan-00 Jun-01

11 Uniformof Wardens G 1 IDA 12 NS Aug-99 Aug-99 Oct-99 Jun-00

Subtotal Goods 1,846

KolkhetUKobuleti Reserves I Bordermarking/ Guard Stations W 1 IDA 179 NCB Jan-99 Feb-99 Apr-99 Jun-99

Towncenter info booths, boat launches 2 Campsites,Towers, Walkways W 2 IDA 289 NCB Jul-99 Aug-99 Oct-99 Dec-01

3 Administrationand Visitor centers/garage W 4 GEF 666 NCB Oct-99 Nov-99 Jan-00 Dec-01

4 TouristShelters/Ecocamps W 1 GEF 85 MW NA Feb-00 Apr-00 Dec-01

5 Restorationof KolkhetiForests W 1 GEF/IDA 154 NCB Oct-00 Nov-00 Jan-01 Dec-02

Subtotal Works I _I _ 1,373 _ _ _

, Local Organkz.ofWorkshops (continuous) _ IIDA 122 INA NA INA NA

2 AnnualWorkshop Training for KNP/KbNR x6 GEF 135 NA NA NA NA

PIUoffice Incrementalcosts (heating 7 | | 3 fuel,petrol,paper,pnntercartridge) _ _ _|IDA 75 |NA NA NA jNA

4 MISEquipment O&M _ _ JIDA 1241 INA INA 'NA NA Table C Georgialntergrated Coastal ManagementProject Procurement Plan

5 Campand lnfrastr.O&M GEF/IDA 33

6 Gov.of GeorgiaDirect Contribution NBF 189

,Subtotal Recurrent and Operating Costs (excluding GoGDirect Contr.) 4891

_ Total Project Cost | | | 6,621 _ _ __

Notes:

1. SpecializedEnv. Ed. Regional training program developed for dergy,educators and students of BlackSea riparian states. 2. TheNGO CARE has been identified during appraisal as havingthe bestcapacity to carry-outthe assignment dueto theirimplementation experience with microfinance and tourism development in similarprojects in Georgia. 3. Only3-5 sourcesworldwide are known at timeof appraisal. 4. ConsultantServices and Goods packages total costs are inclusive of pricecontingencies and taxes,which are paid for bythe Governmentof Georgia. 5. Workspackages total costs are inclusive of a 20%Govemment contribution, which will appearseparately on project financing tables in the projectdocument. 6. Theappraisal mission verified the lackof a sufficientlydeveloped national motor boat construction industry.

Key to acronyms used:

CF: Consultant-Firm LC: LeastCost Cl: Consultant-Individual N: National CQ: ConsultantQualifications NBF:Non Bankfinanced FB: Fixed BudgetSelection NCB:National Competitive Bidding G: Goods NS: NationalShopping GEF: Global EnvironmentFacility MW: MinorWorks Ind: Individuals QCBS:Quality and Cost BasedSelection ICB: IntemationalCompetitive Bidding SS: Sole Source IDA: IntemationalDevelopment Association TS: TechnicalServices IS: IntemationalShopping W: Works II. DISBURSEMENTS

DisbursementArrangements

11. The project is expectedto be disbursedover a period of six years. The anticipated completion date is June 30, 2004, and the closing date, December 31, 2004. Disbursementswill follow normal Bank and cofinanciers' proceduresand will be made against eligible expenditures. Tables DI and D2 below show estimated disbursements during the life of the project and Tables El and E2 show allocation of credit and grant proceeds:

Table Dl: Estimated Disbursements IDA Credit (US$ million)

EstimatedDisbursements 99 00 01 02 03 04 (Bank FY/US$M) Annual 0.350 0.750 1.760 0.880 0.440 0.220 Cumulative 0.350 1.100 2.860 3.740 4.180 4.400 Cumulative 8% 25% 65% 85% 95% 100% Percentage I I I I I

Table D2: Estimated Disbursements GEF Grant (US$ million)

EstimatedDisbursements 99 00 01 02 03 04 (Bank FYMUS$M) Annual 0.150 0.045 0.260 0.390 0.390 0.065 Cumulative 0.150 0.195 0.455 0.845 1.235 1.300 Cumulative 10% 15% 35% 65% 95% 10.0% Percentage I_I I I I__

12. Allocation of grant proceeds: Disbursements would be made against the categories of expenditures indicated-in Table C. The proceeds of the proposed project are expected to be disbursed over a period of six years.

Table El: AUocation of IDA Credit Proceeds

(US$ million) Categories IDA Credit Financing Civil Works 0.6 80%local 100%foreign Goods 1.5 100%of foreign expenditure (ex-factorycost) 80% of local expenses ConsultantsServices 1.9 100% IncrementalRecurrent Costs 0.4 100%/e

TOTAL 4.4

51 Table E2: Allocationof GEF Grant Proceeds

(US$ million) Categories GEF Grant Financing Civil Works 0.7 80%local 100% foreign Goods 0.0 100% of foreign expenditure (ex-factory cost) 80% of local expenses Consultants Services 0.5 100% Incremental Recurrent Costs 0.1 100%

TOTAL 1.3

13. Special Account: To facilitate timely project implementation, the borrower would establish, maintain and operate, under conditions acceptable to the Bank, two Special Accounts in US dollars in a commercial bank --One Special Account for the IDA Credit, and another for the GEF Grant. The selection process and criteria for selection of the commercial bank would follow the Bank's Disbursement Handbook procedures. The Bank would, upon request, make a deposit equivalent to the Authorized Allocation of US$350,000 for the IDA Special Account, and of US$100,000 for the GEF Special Account. Applications for the replenishment of the Special Account would be submitted at least every three months or when 20 percent of the initial deposit has been utilized, whichever occurs earlier. The replenishment application would be supported by the necessary documentation, the Special Account bank statement, and a reconciliation of this bank statement.

14. Use of Statements of Expenditures: Withdrawal applications would be fully documented, except for expenditures under: (i) contracts for goods and works valued at less than US$ 200,000 each; (ii) contracts for consulting firms costing less than US$ 100,000 equivalent; (iii) contracts for individual consultants costing less than US$ 50,000 equivalent; and (iv) expenditures on incremental operating costs less than US$ 50,000 equivalent.

III. ACCOUNTSAND AUDITS

Accounts

15. The PIU will establish an accounting and auditing system which will have the capatbility of recording and retrieving all financial transactions associated with the project in a timely manner and comply with internationally accepted accounting standards.

Audlits

16. Project Accounts will be audited in accordance with the Guidelines for Financial Reporting and Auditing of Projects Financed by the World Bank (March 1982). The Bonrower will provide the Bank (within six months of the end of each fiscal year during

52 the life of the project), an audit report of such scope and detail as the Bank may reasonablyrequest.

IV. PROJECTREPORTING

17. The PIU will prepare proper project reports and submit them to the Bank in a timely fashion. These will include:

* Semi-Annual project status reports, reflecting:(i) the status of implementation progress, problems encountered, corrective actions needed, rationale for actions; (ii) the current state of project indicators; and (iii) the current costs of each IDA/GEF financed project component and estimated costs of completion.

* Procurementreports, includingsemi-annual reports tracking the disbursement of the IDA credit and the GEF grant, as well as project expendituresand costs (local and foreign).

. Disbursement reports, including semi-annual reports tracking the disbursementof the IDA credit and the GEF grant (local and foreign costs).

* Annual audit reports of project IDA Credit and GEF Grant expenditureand accounts.

* Implementation Completion Report will be prepared by the PIU within six months of project completion.

53 Annex 7 GeorgiaIntegrated Coastal Management Project ProjectProcessing Budget and Schedule

A. Project Budget(US$000) Planned Actual $163,000

B. Project Schedule Planned! Actual -- 16 months

Time taken to prepare the project (months) -- 16 months First Bank mission (identification) -- 5/20/1997 Appraisal mission departure -- 5/18/1998 Negotiations 9/21/1998 11/5/98 Planned Date of Effectiveness 1/15/1998 N/A

Preparedby: Ministryof Environmentand localNGOs

Preparationassistance: No GovernmentPreparation Funds provided by outside sources.

Bank staff who worked on the project included: Name Specialty MaTeaHatziolos Senior Coastal ManagementSpecialist EzediineHadj-Mabrouk EnvironmentalSpecialist Robert Maurer Senior Urban Specialist Betsy McGean Social Ecologist Janis Bernstein Social Scientist Karin Shepardson EnvironmentalEconomist Martin Fodor EnvironmentalAnalyst Anna Staszewicz FinancialAnalyst Paola Meta OperationsAnalyst LaurenceBoisson de Chazournes Legal Specialist PhilllipBrylski BiodiversitySpecialist Stephen Lintner Quality Assurance MicheleDe Nevers Quality Assurance Peter Whitford Peer Review Kerstin Canby EnvironmentalSpecialist Darejan Kapanadze ResidentMission OperationsOfficer StephanieAbdulin AdministrativeSupport Lilian Pintea SummerIntern - GeographicInformation Systems CatherineGolitzin-Jones AdministrativeSupport Kristine Schwebach AdministrativeSupport May Zeki AdministrativeSupport

'The projectwas proposed at the ProjectConcept Document (PCD) Stage as a quickturnaround Learning andImnovation Loan (LIL - 3 months).However, this was later reconsidered and the projectwas expanded to includeco-financing and undertake more detailed preparation. 54 Annex 8 GeorgiaIntegrated Coastal ManagementProject Documentsin the ProjectFile*

A. Project ImplementationPlan

COSTab CostTables for the Project Draft TORs for PIU Staff Draft TOR for Oil Spill ContingencyPlanning Component Draft TOR for IntegratedMunicipal Water Management Bank commentson Draft KolkhetiNational Park Legislation Public AwarenessMaterials Letter of MOUCon the secondmentof staff to the ICZM WG Governmentof Netherlands,Letter of Intent for ProjectCo-financing

B. Bank StaffAssessments

EconomicAnalysis EnvironmentalData Sheet Project InformationDocument C. Other

GEF CouncilSubmission and Approval Rioni River Basin EnvironmentalHot Spots Study,Feb. 1997 Kolkheti ProtectedAreas ManagementGuidelines, 1996 GEF CouncilCEO EndorsementLetter

*Includingelectronic files

55 CAS Annex B8 Generaed: 1 II2498 Annex 9 Statement of Loans and Credits Status of Bank Group Operations in Georgia - I~~~~~~~~~~~BR-"Loaos and IDL"A% Credi' in the Ope-ions Port'ioule

Difference Between expected Original Amount in US$ Millions and actual Last ARPP Loan or Fiscal - disbursements a/ Supervision Rating b/ Project ID Credit Year Borrower Purpose No. IBRD IDA Cancellations Undisbursed Orig Frm Rev'd Dev Obj Imp Prog

Number of Closed Loans/credits: 3 Active Loans G6-PE-8417 IDA 26580 1995 MINISTRY OF FINANCE MUNICIPAL INFRA. REM 0.00 18.00 0.00 1.63 3.29 0.00 S s GE-PE-8414 IDA 28520 1996 GOVERNMENTOF GEORGIA HEALTH 0.00 14.00 0.00 10.53 5.07 0.00 S S GE-PE-44388 IDA 28480 1996 REPUBLIC OF GEORGIA STRUCT. ADJUST. TA 0.00 4.80 0.00 1.29 1.53 0.00 S S GE-PE-39892 IDA 28090 1996 GOVERNMENTOF GEORGIA TRANSPORT 0.00 12.00 0.00 1.53 .14 0.00 HS S GE-PE-35784 IDA 29580 1997 GOVERNMENTOF GEORGIA POWERREHAB. 0.00 52.30 0.00 32.86 10.53 0.00 S S GE-PE-44830 IDA 29440 1997 GOVERNMENTOF GEORGIA OIL INSTITUTION BLDG 0.00 1.40 0.00 1.01 .23 0.00 5 S GE-PE-8415 IDA 29410 1997 GOVT. OF GEORGIA AGRICULTUREDEVELOP. 0.00 15.00 0.00 10.60 -1.15 0.00 S S GE-PE-55573 IDA 30400 1998 GOvERNMENTOF GEORGIA CULTURALHERITAGE 0.00 4.49 0.00 4.43 .40 0.00 S S GE-PE-39929 IDA 30200 1998 GOVERNMENTOF GEORGIA SOCIAL INVEST. FUND 0.00 20.00 0.00 18.80 3.18 0.00 S S GE-PE-51034 IDA 29840 1998 GOVERNMENTOF GEORGIA SATAC II 0.00 5.00 0.00 3.64 2.34 0.00 S S GE-PE-44797 IDA 29830 1998 GOVERNMENTOF GEORGIA SAC II 0.00 60.00 0.00 19.57 19.05 0.00 S S GE-PE-50910 IDA 29760 1998 GEORGIA HUNICIPAL DEV. 0.00 20.90 0.00 18.87 3.97 0.00 5 S

Total 0.00 227.89 0.00 124.76 48.58 0.00

Active Loans Closed Loans Total Total Disbursed (IBRD and IDA): 96.88 147.77 244.65 of which has been repaid: 0.00 0.00 0.00 Total now held by IBRD and IDA: 227.89 145.10 372.99 Amount sold : 0.00 0.00 0.00 of which repaid : 0.00 0.00 0.00 Total Undisbursed : 124.76 0.00 124.76

a. Intended disbursements to date minus actual disbursements to date as projected at appraisal. b. Following the FY94 Annual Review of Portfolio performance (ARPP), a letter based system was introduced (HS - highly Satisfactory, S - satisfactory, U - unsatisfactory, HU - highly unsatisfactory): see proposed Improvements in Project and Portfolio Performance Rating Methodology CSecM94-901), August 23, 1994.

Note: Disbursemnt data Is updated at the end of the first week of the month.

GaOuted by theOperaions InformationSystem (OIS) 56 Annex 10 Georgia

PRICESani GOVERNMENTFINANCE 1976 13os 1991 1993 - "ocpnwse Inflation(%) (t dnge) . 20.000- Consumerpric 162.7 39.3 s5000 ImPlicitGDP defltor 0.7 -4.5 162.7 402 10000/ Governmentfinanc5 5.000- N OfGDP) 0 Curetrevnume(exdgrmnts) 51 8.1 9t n t4 5 55 U Currentbudget bance (exd grants) 4 t 13 - GDPel. -*-CPi Overd surplus/defidt(exd grants) -7.2 -5.5

TRADE 1115 1155 199S 199 -- (muons USSJ Exportand irnpotlevels (Iml USS) Tot iexports (fob) 347 400 r BiackMewal 36 75 TO 11 26 Manufactures 265 233 Total imports(ci.) 686 733 Food 163 186 2.500 Fud andenergy t65 164 Capilalgoods 121 127 0 _- I- J.JI:--1J I Exportprice index (1987=100) so *I 50 t3 t4U U Import priceindex (1987-100) .. .:Exi.o.t. I: imports Tesdtr (1987.100)t .ad

BALANCE of PAYMENTS 1197 11S6 1996 1996 (mifonsUSS) Currentaccount balance to GOPratio I%) Exportof goods and servceA 469 541 0 __ _.. _ _ Impots of goodsand services 791 841 o a a1n. 9' 11-n Resourcebdance -322 -300 10 NetIncome J-a .50 Nt currenttransfers .9 Is160 139

Cumn acount balance, 40 - befor ofticil Capitaitranser -220 -211 Financitems (net) 260 130 Chage In net rsrves -40 81 -50o em_o: Reseres incdutinggold(mini.SS) . 158 18 Conversionrate (bcaWS$) .. .. 857.5 1,263.0

EXTERNALDEBT and RESOURCEFLOWS 1975 1935 1996 1996 (m7ioNs USS) Totaldebt outstandingand disbursed 1,212 1,365 ISRO 0 0 B IOA 84 157 Compositionof ttal de*It,VAtnul USS) Totnidebtservice at 35 42 C IBRD 0 0 197 IDA 0 1 Comnpostn of net resourceflows - Offic grants 189 141 Offica creditors 173 166 Privatecredito 0 0 Foreigndirect investment 6 20 E __ Pofolio equitry ° t01 Wtrld Bank program Commitmnt 76 91 A -IRD E - r Disbursements a 76 B-IDA 0- OtlhrnuMtrla F- Pival Principarepayments 0 0 C- IMF G-Short-linr Netiow e 5 76 Intert payments 0 I Nettafert .. .. 65 76

DevelopmentEconomics U2_U97 Note:Esrmates for economiesof the former SovietUnion are suwbd to more than the usu range of uncertainty. a i Debt servicedue alter rescheduling. Annex IO Georgia at a glance = Europe & Lower. POVERTYand SOCIAL Central middle- - -- Georgia Asia intome Deveopmentdiamond' Popubltionmid-1996 (miltons) 5.4 479 1.125 GNP per capta`1996 (USS) 850 2,180 1.750 Life expectancy GNP 1996(biIons USS) 4.6 1,043 1,967 Averge annual growth, 1990-96 Popultion (%) -0.2 0.3 1.4 GNP Gras Labor force i%) -0.1 0.5 1.8 A/ r Per ------p-rimary Mort reAn srtimate(latest year availabbesince 1989) capita ermcent

Povorty:headcount hdex (% oftpo,ulation) Urbanpopulation (% of totalpopuation) 5s 65 56 Lif expectancyat birth (years) 73 68 67 Infentmortallty(perl,000 #v birhs) 1t 26 41 Accesstosafewater Chiid malnutrition(% of childn under 5) Accessto safe water (% of population) .. 78 Illite cy (% of populaton ge 15+) 1 .. o.- Gross primaryenroliment (% of school-ngpopulation) 82 97 104 Goigia MUle 82 97 105 ---- Lower-middle-incoreWgroup Female 81 97 101

KEY ECONOMICRATIOS and LONG-TERMTRENDS 1975 1985 1996 1995

GDP (b/tonsUS .. .. 4.3 4.6 EconomI a6oa Grossdomeatic investrmnVGDP .. 34.3 4.0 5.0 Opennessof economy Expcrt of goods end serviceDP .. .. 16.2 11.8 Gros domeatic vings/GDP .. 31.1 -7.2 -1.5 Grossnatonal savings/GDP .. . -4.8 0.4

Currmt accountbalance/GDP . .. -5.1 -4.6 Inteenstpeyments/GDP .. .. 2.9 1.4 Savings ------TotaldebVGDP .. . 28.2 29.8 Totaldebt sevice/xports at .. .. 7.4 7.5 Presentvalue of debVGDP .. .. 23.7 Prsemt value of debt/exporb .. . 217.7 .Ibtednes

197564 1986-96 1996 1996 199745 (aver-no annualgmwth) - Georgia GDP 5.3 -19.0 2.4 10.5 8.9 - -Lower-middb-income pr GNP per capita 4.5 -17.2 2.0 12.7 6.8 Expoils of goods and servcs .. .. -11.3 20.2 9.1

STRUCTUREof the ECONOMY 1975 1985 1995 1996 Growthrates of output and lnvesstzntt%) i'% Of GOP) Agriculture .. 25.5 35.3 33.5 155 Indusiry .. 39.6 26.7 25.1 100 Manufacturing .. 30.2 20.1 18.9 ServkCs .. 34.9 38.0 41.3 so-

Privateconsumption . 55.8 100.0 92.8 Generalgovmment consumption . 13.0 7.2 8.8 40. Importsof goodsand services . . 27.4 18.4 GOI -o -- GW

197546 1986-96 1996 1996 (averageannual growth) Growthrate of exports andimpot Agriculture .. .. 5.5 3.0 25 Industry .. .. 1.0 2.0 20- Manufacturing .. .. 1.0 2.0 t0a- Services .. .. 54.0 16.3 5-

Privateconsumption .. .. -10.4 2.6 SI 92 3 Gnrol govemmentconsumpton .. .. 52.7 52.7 :1is Groasdomestic Investment .. .. 123.0 43.4 -20- lmporlsofgoodsmndsrvices .. .. -15.5 9.1 rExpors o Gross natlonalproduct 5.3 -17.1 1.9 12.5

Note: 1996data are preliminaryesbmates. Figures in italicsare for years other than those specified. Thecdiamonds show four key indicatorsin the country (in bold) comparedwith its income-groupaverage. If dataare missing,the diamondwM be hicomplete. a / Debt servicedue after rescheduling. Annex 11 GEF IncrementalCost Analysis

GEORGIA

INTEGRATED COASTAL MANAGEMENTPROJECT

INCREMENTAL COSTS AND GLOBAL ENVERONMENTBENEFITS

Overview

1. The general objective of the GEF Alternative is to conserve biodiversityalong the Black Sea coast of Georgia. The project development objectives are to: (i) launch concrete and sustainableactions in support of biodiversityconservation, including river, lake, coastal, marine and freshwater biodiversity, through the protection and managementof threatened forest and critical wetlands ecosystems and the establishment of the Kolkheti National Park and the KobuletiNature Reserve along the Black Sea coast of Georgia; and (ii) integrate these protected areas into the broader developmentobjectives of the coastal managementproject. These broader objectives include establishingof a fraameworkfor integrated coastal planning and management as a basis for sustainableeconomic activities along the Black Sea coast, and assistingGeorgia in meeting its regional commitmentsunder the Black Sea EnvironmentalProgramme and various internationalconventions and agreements related to the protection of the Black Sea. The GEF Alternativeintends to achievethese outputsat a total incrementalcost of approximatelyUS$1.32 million above the Baseline.The proposed GEF Alternative should be viewed as complementary to existingactivities in the Georgiancoastal area.

Context and Development Goals

2. Georgia, a mountainouscountry covering 70,000 km2 with a population of 5.5 million people, is situatedbetween the southslope of the CaucasusMountains, the east coast of the Black Sea and the northern edge of the Turkish Anatolia plane. Forests cover 40% of the country, largely in the Greater CaucasusMountains (Georgia's northern border),the Lesser Caucasus (its southern border), and in intervening lowlands and foothills. The principal landscapes of the Caucasusinclude foothill and mountainforests and subalpinemeadows of the Greater and Lesser Caucasus; treeless mountain upland plateaus of the lesser Caucasus; humid lowland forests of western Georgia, and the arid steppe and deserts of eastern Georgia. In the project region between the CaucasusMajor and Minor ranges of Georgia, the flora and fauna of at least three biogeographicprovinces (Europe,Central Asia, Middle East regions) converge,resulting in high levels of biodiversity.The project target area and surroundingTranscaucasus region is identified under the World Wide Fund for Nature's Global 200 Ecoregionsprogram, which uses selection criteria of species richness, levels of endemism, taxonomic uniqueness, unusual evolutionary phenomena,and global rarity of MajorHabitat Types.

3. The Kolkheti wetlands are a Black Sea coastal ecological resource of global significance. In 1996, the Kolkheti wetlands were designated as a Ramsar site (a wetland of international significance). The Kolkheti wetlands area are also, unfortunately, one of the most threatened ecosystemsin Georgia. The wetlands incorporatea large and complexchannel and river network which drains into Lake Paliastomi and the Black Sea. The Kolkheti subtropical forests and

59 wetllandcomplex contains high levels of endemism and floral diversity. A number of relict species from the Tertiary period occur only within the Kolkheti region or have a limited distributionoutside of this region. The region also providescritical habitat for numerous species of migratory and wintering birds. These forest and wetland ecosystems are under threat as a result of drainage of wetlands for agriculturaland urban use, illegal hunting, forest harvesting, peat and gravel mining, pollution, and invasion by nonnative species.Immediate threats for the Kol]khetiwetlands area are the proposed expansion of the Poti Port terminal further into the wetllandsareas, and peat and gravel mining in Lake Paliostomi, timber harvesting and illegal hunting during winter months due to Georgia's temporary energy crisis. The Kobuleti wetlands area are under immediate threat due to pressure for agricultural expansion. Immediate legal protectionand implementationof the of the draft managementplans of these areas will be critical to haltingthese threats to the ecosystem.

4. The broad development goals of Georgia focus on public sector restructuring; private sector development;social protection and poverty reduction; and environmentalprotection. The Government's overall development agenda attempts to focus on these issues consolidating the stabilizationrecently achieved,strengthening the current economic recovery while protecting the environment. The Government of Georgia has taken important steps toward improved environmentalmanagement in recent years, including the development of national strategies, recently approved framework environmental legislation and the development of specific environmentallaws underneath this framework, activities under the Black Sea Environmental Program and some specific actions under the World Bank-financed Municipal Infrastructure RehiabilitationProject. For example, an InstitutionalDevelopment Fund (IDF) grant is helping the Governmentto prepare its National EnvironmentalAction Plan (NEAP), designed to detail environmental priorities as a basis for future cooperation, and strengthen the Ministry of Environment. A Biodiversity Strategy/Action Plan is also being prepared. Environmental improvements will still face institutional challenges such as gaining cooperation from governmentalagencies with no previoushistory/capacity in dealing with these issues, promoting public awareness,and building partnershipswith NGOs. With the preparationof the World Bank and GEF-financed programs, the Government intends to preserve Georgia's rich biological diversity and natural resources base for future generations by implementing effectively the recently approved environmental legislation. The country's natural resources, such as the forests, will need to be appropriately managed to reduce illegal harvesting and damage, while appropriate commercializationpolicies fostering renewal and growth could allow for a new sourceof foreign exchangeearnings.

Baseline Scenario

5. The collapse of the Soviet Union in late 1991 and the attendant disruption in institutions that managed the economy until then has forced the Georgian economy into a tailspin and contributed to the outbreak of civil strife in the breakaway regions of Abkhazia and SoutL. Ossetia. In early 1994 Georgia emerged from this period of turmoil with a collapsed economy and significant negative social impacts. With Bank and IMF support, in mid-1994 the Governmentembarked on a comprehensivereform program to rebuild the economy. By the end of 1996, the fiscal deficit had been reduced, annual inflation lowered, the exchange rate stabilized, and the economy registered a growth rate of 10.5 percent. Throughout this often difficult period Georgia has put considerableeffort in establishingthe foundations of a market economy. The task was especially challenging because Georgia started the transformation virtually from scratch with existing institutionsthat were ill-suited to a market based economy. 60 Yet, unlikemany of the other countries of the former Soviet Union, Georgia has a long tradition of entrepreneurshipwhich should serve it well duringthe transition. The medium term prospects for the economy are good, based on robust growth in exports. There is a solid potential in agriculture, and services are likely to develop strongly. With appropriate macroeconomic stabilizationpolicies and structural reforms, this potential can be achieved. However, in the short term the decline in output can only be moderated,not reversed.

6. Since the transition, unsustainabletimber harvesting, grazing, and game hunting have accelerated, and now pose a major threat to Georgia's diverse and abundant biodiversity. In addition, since the transition and the associatedeconomic decline, local peoples are increasingly seeking to reestablishtraditional/historical land uses that were disrupted for over 70 years under the former Soviet Union. The Kolkheti forest and wetland ecosystems are particularly under threat as a result of forest harvesting, mining,drainage of wetlands for agricultureand urban use, illegal hunting, invasion of non-nativespecies, and pollution. In response to these activities,the Government of Georgia has begun to act to protect important natural resources and to preserve biodiversity.

7. Under the Baseline Scenario, it is expectedthat the Government of Georgia expenditures related to biodiversityconservation in the coastal area over the period of the projectwill beUS$ 2.07 million.

8. A number of natural resource management and biodiversity conservation activities in Georgia are being financed by other international developing agencies, or will be under implementationthrough the proposedIDA project. These contributionsinclude: i. Two WorldBank-managed investments (one proposed,one under implementation)which have evolved from the BSEP. The proposed Integrated Coastal ManagementProject will rehabilitateand protect Georgia's coastal Black Sea area as well as promote the sustainable developmentof the region -- all activitiesexpected to have a positive impactupon marine and coastalbiodiversity. The project includescomponents for legal and institutionalharmonization for coastal planning in coordination with local communities and interest groups, and environmentalquality monitoringand informationsystems which complementefforts initiated underthe BSEP and the regionallyendorsed Black Sea StrategicAction Plan. In addition,IDA funds will be used to help establish Park/Reserveinfrastructure and equipmentand develop socio-economicactivities in supportzones in the Kolkhetiand KobuletiNational Parks. The Municipal InfrastructureRehabilitation Project is aimed at improvingefforts to reduce coastal contamination,diminishing impacts on coastal and marine biodiversity.Components of the two projectswhich will have specificpositive benefits for coastal.biodiversityare estimated at US$ 3.6 million. ii. Dutch Governmentactivities related to technical assistance for the assessmentof major erosion issues along the coast and the identificationof cost-effectivesolutions for follow-on investment,focusing on the Batumiand Poti areas(US$ 500,000). iii. Dutch Government activities targeted towards the development of a national oil spill contingencyplan and emergency response capabilityfor Georgia that will assist Georgia in meetingits internationalcommitments under conventions and protocolsfor the protectionof the Black SeaEnvironment (US$ 500,000). iv. GEF EnablingActivities grant for the preparationof a NationalBiodiversity Strategy/Action Plan andNational Report (US$ 120,000).

61 v. Black Sea EnvironmentProgram. Georgia is one of the six Black Sea countriesparticipating in the BSEP,which has producedthe StrategicAction Plan that seeks to reverse environmental degradationof Black Sea ecosystems. The BSEP activitiesfocus on buildingcapacity in the Ministry of the Environmentin environmentalmanagement of Black Sea ecosystems(US$ 68,900). vi. UNDP EnvironmentalCapacity-Building Project The project will strengthenthe MoE, especially in areas of information management and communication and professional developmentand training activities at national, regional,district, and municipal levels. The projectalso supportspublic awarenesson environmentallyrelated issues. The Projectactivities which are expectedto have specific positivebenefits for coastal biodiversityare estimated at US$25,000.

9. Costs. Total expendituresunder the Baseline Scenario are estimated at US$ 7.07 million including nearly US$ 2.07 million from the Government of Georgia and US $5.00 million through internationalcooperation.

10. Benefits. Implementation of the Baseline Scenario will result in improvements to the protection and management of biodiversity within the proposed protected areas and public awareness of the need for biodiversity conservation. NGO efforts will serve to increase awareness of threats to biodiversity in the region. The Baseline Scenariowill address issues of environmentalquality monitoring, coastal erosion, oil spill contingencyplanning and response, regional developmental planning and water quality, capacity-buildingwithin the Ministry of Environmentand, to some degree, elementary protection of the Kolkheti and Kobuleti wetland areas. However, existing governmentresources and international financing efforts directed to forest and wetland biodiversitywill not ensure protection of globally significant biodiversityin the Kolkheti and Kobuleti designated areas. In terms of protecting biodiversity in the Kolkheti wetlands region it is unlikely that the limited expenditureswill have a significant impact in slowingencroachment into these fragile habitats.

Global EnvironmentalObjective

11. The GoG ratified the Convention on BiologicalDiversity in June 1994. The National BiodiversityStrategy/Action Plan (BSAP) and the Integrated Coastal ManagementProject, both now under preparation,identify the project region as a center of Georgian biodiversity,and the project activities as the highest priority for improvingthe protection of the threatened Caucasus ecosystems, including the lowland forests and wetlands of the Kolkheti. The Forest Sector StraLtegy,prepared as an input for the National EnvironmentalAction Plan, identifies the need to develop interdisciplinary forest planning, including through the integration of biodiversity conservation.All of these recommendationsare consistentwith the GEF ICZM project.

12. As a consequenceof the current course of action, regarded as the Baseline Scenario, Gecorgia'sdiverse and abundant biodiversitywill likely continue to suffer from unsustainable timber and fuelwood harvesting, overgrazingand associated disturbance, illegal hunting, and habitat loss and fragmentation. In addition,the Kolkheti's coastal zone will probably continueto lose marine, wetlandand upland communities,and the unique animal and plant species dependent upon these habitats.

13. Scope. The GEF Alternative would provide the means (above and beyond the Baseline Scenario)for creatingthe KolkhetiNational Park and KobuletiNature Reserve and implementing 62 managementplans. The specific objectives of the draft management guidelines that would be addressed under the project are: (i) conservationof the biodiversity of the Kolkheti region through protection,management, and restorationof unique plant communities; (ii) protectionof fish spawning grounds necessary for the protection of freshwater and marine biodiversityand their sustainableuse; (iii) improved monitoring and applied research on biodiversity and the effectiveness of conservation efforts; (iv) establishment of infrastructure for improved biodiversity protection and development of nature-basedtourism in the region; (v) recovery of threatened agricultural biodiversity; (vi) preparing and supporting Park administration and management;and (vii) strengtheningpublic educationand awareness.

14. Costs. The total cost of the GEF Alternativeis estimated atUS $9.04 million, detailed as follows: (i) legal and institutional strengthening (for Ministry of Enviromnent and agencies for integrated coastal management -- US$ 1.77 million (same as Baseline); (ii) establishment of Kolkheti National Park and Kobuleti Nature Reserve and the implementation of their management plans -- US$ 3.69 million (GEF financing - US$ 1.32 million); (iii) establishmentof coastal environmentalmonitoring and informnationsystem -US$ 1.65 million (same as Baseline); (iv) pollutioncontrol studies and oil spill contingencyplanning and energy response capacity -- US$ 1.13 million (same as Baseline); (v) assessmentsof coastal erosion and municipal water resources problems - US$ 0.5 million (same as Baseline); (vi) development of national strategies for environmentalprotection -- US$ 0.29 million (same as Baseline).

15. Benefits. Implementation of the GEF Alternative would provide the means for the establishment of effective protected areas and the integration of biodiversity conservation objectives into regional and local development. Global benefits would include the recovery of forest and steppe habitats protecting endemic threatened flora and fauna, and effect their recovery. Benefits generated from the project would also include the promotion of local and regional cooperationin biodiversityconservation. In addition,the GEF Alternativewould protect unique coastal and marine and numerous threatened endemic species. Global benefits would include the protectionof migratory waterbirds and marine environmentsand species-richsteppe communities, strengthening public education and awareness and restoring lowland forest, wetland, and agriculturalbiodiversity.

Incremental Costs

16. The differencebetween the cost of the Baseline ScenarioUS$ 7.07 million and the cost of the GEF Alternative US$ 9.03 million is estimated at US$ 1.96 million, of which US$ 1.32 million is provided by GEF financing. This represents the incremental cost for achieving sustainableglobal environmentalbenefits.

63 Table F Incremental Cost Matrix

Component Sector Cost Category US$ Million Domestic Benefits Global Benefits Legal and Baseline 1.77 Increased public sector Strengthened policy and legal Institutional capacity to manage coastal framework for coastal!marine Strenigthening(for environmental resources. protected areas management. Ministry of Increasedpublic sector capacity Environment and to manage protectedareas. agencies for integrated coastal management . _ With GEF 1.77 Sameas above. Same as above. Alternative Increment 0 Establishment of Baseline 2.37 Increased protection of Conservation of globally the Kolkheti coastal and marine wildlife significantbiodiversity in the National Park / and their foraging areas in Black Sea Kolkheti region. KobuiletiNature the Kolkheti National Park Reserve and Kobuleti Nature Reserve. With GEF 3.69 Same as above Same as above Altemative Increment 1.32 Establishment of a Baseline 1.65 Improved both national and Increased collection and analysis Coastal regional monitoring of informationvital for Environmental capacity. conserving endemic flora and Monitoring and fauna, as well as migratory Information System waterbirds. Development of methodologies for undertaking biodiversity censuses and inventories, ecological studies, and studies on human impacts in these areas. With GEF 1.65 Same as above. Same as above. Alternative Increment 0 Assessment of Baseline 0.5 Increased understanding Ensured protection of buffer zone Coastal Erosion and priority-settingof between marine and freshwater investmentsto address aquatic systems with major erosion issues along international significance. the coast. With GEF 0.5 Same as above. Same as above Alternative Increment 0 Pollution Control: Baseline 1.10 Increased capacity to Reduced impacts on coastal and Studies & Oil Spill respond to pollution and oil marine biodiversity in an Contingency spill emergencies. internationalwaterway. Planiningand Emergency Response With GEF 1.10 Same as above. Same as above.

__ _ .______Alternative Increment 0

64 Developmentof Baseline .29 Increased understanding Increased understanding and National Strategies and ability to set priorities ability to set prioritiesfor for Environmental for investments for national investments for international Protection enviromnental environmental benefits. improvement With GEF .29 Same as above. Same as above. Alternative Increment 6

65 Annex 12 Georgia Integrated Coastal Management Project

President of Georgia Decree on The State Consultative Commission for Integrated Coastal Zone Management

66 President of Georgia Decree

No. 608 OcLober25 of 998 Tbilisi

On Establishment of State Consultative Commission for Integrated Coastal Zone Management Taidng into considerationintemasional commits2ents within the 'Convenitn for the Protectionof the Black Sea Aganst Pollution"(Bucharost 19923)nd the "Strategc AcciwnPlani for the Rehabilitaton and Protecion of the Black Sea (Istanbul, 1996), and for th purposes of further developmentof integratedcoastal zone managementin Georgia: I. The 'SW*eConsults±ive CAomnissionfor lntegrated Coasa Znme Managei,net" (*trther - Commission)is establislicdwith followingcomposition; Nino Clkhobadze - Ministerof Environment (Co-chairman); MOrab Chkhcsikell - Minister of Urbanisation and Conmuction (Co-chairman); RavazAbashidze - Vice-Mayorof the City of Batumi; David Adelulvili *Lcading State Adviser of Ministry of Trnsport; AlexanderArobolidzc - Directorof engineeingcompany "A&EConsultants"; Giorgi Gachechiladzc - First Deputy Chairman of Parliamentary Comminrna on Envirommental Protection and Natural Resources; Gia Gvazavsa Chairman of Sub-Committee on Proteced Territories of Parliamelituy C.ommittee on Environmentil Protion and Natural ResourCe: Gogi Vashakinadae * GencralDirector of GeorgiaIntational Oil Corporation Guigol Datunaihvl - Hcad of Agricultue, Food and Enviromnental Protection Divislon of Stat Clmncellery'sEconomio Sevice; Arizor Tkhilaishvili - Minister of Environment of Aebam Autonomous Republic; RevaaI Kikiani * Leading State Adviser of Governor's Apparatus of Samegrelo-Zemo Svaneti Region; Taricl Kalulashvffi - DeputyMinister oflustice; itesarion Lobzhanidxe . Deputy Head of State Depaflmentof ProtuctedAreas, Nature Reservesand Hunting Managument; trakli Motsrcra - Vice-Mayorof the City of Pi; Gin Nakhutsrishvili - Directorof Institutoof Botany of GeorgianAcadomy .of Sciences Zurab Nemsadze - HleadofDepartment ofTenitorial, SpatialOrganisatlon, UrbanDevelopment and Arhitoctur of Ministy of Urbanisatlonand Construction; David Nilkolcishvili . Chairmanof Marine Asociation; 14vur Ripava - Head of Stste Depawtmentof Environmentof Apichazeti L.vterRigvuva -Aiuctomus Retpublic; Sakvare. Salukvadze - iead of Depar=t=entof Urbanisationand Constructionof Guria Region; Zezva Gugunishvilii First DeputyHead of State Departmentof Tourismand Resorts; Mikhell Kurkhuli - Deputy1ead of Sate Sanitary Supeavisionand HygieneNorms DeparUtent of Ministry of liealth; Gela Charkviani - DeputyMinster of Economy; Zaur Cbkhikvishvili - Head of Division of Fvironmen tal Protectionand NaturalResource Use of Ministry of Agriculture and Food; Giorgi Khanishviii - DeputyMiWster of rinunce; Ekaterine Khmaladze - Head of Division of Ecological Expertiseof Ninistry of Environment; Leri Chochua - Leading Specialistof Forestry and ForestUse Divisionof State Department of Forestry; 2. On the basis of principles-ofsustainable development the Comunissionshould: a) Lilaboratcrecommendations and suggestions for developinglegal and institutionalframework in the area of integrated coastalzone managementin Georgia; b) Promoteinter-agency co-ordination in planning, use of ntural resources.as well as providingsafe environmentfor public health withimthe coastalzone; 5,) Elaboraterecommendations for measuresand policics necessaryfor.pwsiiing, protecion and sustainableuse of natural resources, as well as provisionof safe environmentfor public health in the coasta zone; ..d.)jProvid. a clearing house for, review, elaborate findings and recommendaxions for majcr developmentprojects in the coastalzone and for programsrelated to integr,aed coastalI7-onemanagement; e) Stnmulaiem7d supportinitiatives at central, regional, and local levelsaimed at procectng Lhcenvironment of and the health of populationin Georgia's coastalzone; L Ilmproveniechanismns fbr dccision-making,conulatons and wide public participakionzowards setling the problematicissues of integrated coastal -one management; g) Attract and co-ordinae the assistance of donor organisationsin mobilising investznentsand technical assistancein environmentalprotection and sustainable developmentof setleinents, relatedto integrae coastalzone management. 3. T'heCommission should elaborate and present by December 1, 2000 the Strategyand Action Plan for IntegratedCoastal Zone Management of Georgia. 4. The Ministry of Environment(N. Chkhobadze)and Ministry of Urhasation and Constrn.tion (M. Chkhenkeli)should jointly claborate and approvethe Commission'sRules of Procedure. F. Shevardnadze (signature,SLamp) c-s-ol-ob (M64-, wabA M.'aftm8;n ~ 'Oa;i p. AD Omi;~-bQapW >bt Is| t k%W; von W63bAn &65;nl) oSdftnlOn %M_ 2.GA5n 6,, -DUS&Vmb 2000 ntj I I6 jam4 I Haa ^- (01;

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AgreementsReached at Negotiations 1 CorrespondingSection of Legal Documents Procurement Arrangements,G2 (a) Section3.02, Schedule3 Disbursement Arrangements, G2 (b) Schedule I Special Accounts, G2 (c) Schedule 4 Project Management, G2 (d) Section 3.01 Project Accounts & Auditing, G2 (e) ArticleIV Reporting and Evaluation, G2 (f) to be incorporated into legal agreement Counterpart Contribution,G2 (g) Section 3.01 Establishment of NICC, G3 (a) Section 1.02(b) Financial Management System, G4 (a) Section 6.01(a) Adoption of National Park Legislation, G5 (a) Schedule 1, para 3 Environmental Review,G5 (b) Schedule 1, para 3 Concordance Table Georgia- GEF GRANT AGREEMENT Integrated Coastal Zone Management Project

Agreements Reached at Negotiations Corresponding Section of Legal _ Documents

Procurement Arrangements, G2 (a) Schedule 3.02, Schedule 3

Disbursement Arrangements, G2 (b) Schedule I

Special Accounts, G2 (c) Schedule 4

Project Management, G2 (d) Section 3.01

Project Accounts & Auditing, G2 (e) Article IV

Reporting and Evaluation, G2 (f) to be incorporated into legal agreement

Counterpart Contribution, G2 (g) Section 3.01

Establishment of NICC, G3 (a) Section 1.02(b)

Financial Management System, G4 (a) Section 6.01(a)

Adoption of National Park Legislation, G5 (a) Schedule 1, para 3

Environmental Review, G5 (b) Schedule 1, para 3 Map 1. Georgia and the BlackSea IBRD29774

40. 41 42- 43' 44 GEORGIA INTEGRATEDCOASTAL MANAGEMENT PROJECT

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