Document of The World Bank

Public Disclosure Authorized FOR OFFICIAL USE ONLY

Report No: 75889-BI

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED GRANT Public Disclosure Authorized FROM THE GLOBAL ENVIRONMENTAL FACILITY TRUST FUND

IN THE AMOUNT OF US$4.2 MILLION

TO THE

REPUBLIC OF

FOR THE

SUSTAINABLE COFFEE LANDSCAPE PROJECT Public Disclosure Authorized

April 9, 2013

Environment, Natural Resources, Water and Disaster Risk Management Unit (AFTN3) Sustainable Development Department Africa Region

Public Disclosure Authorized This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank’s policy on Access to Information.

CURRENCY EQUIVALENTS (Exchange rate effective as of February 21, 2013) Currency Unit = Burundi Franc US$1 = 1,576 FBu FISCAL YEAR January 1 – December 31

ABBREVIATIONS AND ACRONYMS

AFS Annual Financial Statements ARFIC Autorité de Régulation de la Filière Café AFTAR World Bank -Agriculture and Rural Development Department of the Africa Region AFTCS World Bank - Fragile States, Conflict and Social Development team AFTEN World Bank - Environment Unit of the Africa Region AFTFM World Bank - Financial Management unit AFTPE World Bank - Africa procurement unit - East BNFR Bururi Nature Forest Reserve BOD Biochemical oxygen demand CAC Communal Approval Committees CAS Country Assistance Strategy CNAC National Coffee Growers Associations CWS Coffee washing station DPAE Provincial Department of Agriculture and Livestock EAC East Africa Community ERSG V Fifth Burundi Economic Reform Support Grants FM Financial Management GDP Gross Domestic Product GEB Global Environmental Benefits GEF Global Environmental Facility GoB Government of Burundi IDA International Development Association IE Impact Evaluation IFR Interim Financial Report INECN Institute National pour l’ Environment et la Conservation de la nature InterCafé Association Interprofessionnelle du Café du Burundi (InterCafé Burundi) IP Indigenous People IPCUs Inter-Provincial Coordination Units IFRs Interim Financial Reports IUCN International Union for Conservation of Nature LLS Livelihoods and Landscape Strategy LVB Lake Victoria Basin LVEMP Lake Victoria Environmental Management Project MEEATU Ministry of Water, Environment, Land and Urban Planning MDDC Ministry of Decentralization and Communal Development MDGs Millennium Development Goals MINAGRIE Ministry of Agriculture and Livestock

ii MINICOMT Ministry of Commerce, Industry and Tourism MIS Management Information System MSNRRRS Ministry National Solidarity and Repatriation of Displaced and Expatriated People and National Reconstruction MoF Ministry of Finance MoU Memorandum of Understanding MPR Ministries of Development Planning and Reconstruction M&E Monitoring and Evaluation NAPA National Adaptation Programme of Action NPSC National Policy Steering Committee NGOs Non Governmental Organizations NRM Natural resource management ODEB Organization for the Defense of Environment in Burundi ORAF Operational Risk Assessment Framework PA Protected Area PAMETT Protected Area Management Effectiveness Tracking Tool PACs Provincial Approval Committees PCU Project Coordination Unit PDO Project Development Objective PES Payment for Environmental Services POs Producer Organizations PRODEMA Agro-Pastoral Productivity and Markets Development Project PRASAB Projet de Rehabilitation et d 'Appui au Secteur Agricole et de Gestion Durable des Terres du Burundi (Agriculture Rehabilitation and Support, and Sustainable Land Management Project of Burundi) PRSP Poverty Reduction Strategy Paper PSC Project Steering Committee PSPs Private Sector Providers SCEP Service Chargé des Entreprises Publiques SEA Strategic Environmental Assessment SFM Sustainable Forest Management SIL Specific Investment Loan SLM Sustainable Land Management SLWM Sustainable Land and Water Management SMBC Smithsonian Migratory Bird Center SOGESTAL Sociétés de Gestion de Stations de Lavage SODECO Société de Deparcharge et de Conditionnement STAP Scientific and Technical Advisory Panel TA Technical Assistance ToR Terms of Reference R-SEA Rapid-Strategic Environment Assessment UNDP United Nations Development Programme

Vice President: Makhtar Diop Country Director: Philippe Dongier Sector Director: Jamal Saghir Sector Manager: Magda Lovei Task Team Leaders: Paola Agostini Co Task Team Leader Stephen Ling

iii

BURUNDI Sustainable Coffee Landscape

TABLE OF CONTENTS

Page

I. -STRATEGIC CONTEXT ...... 1 A. Country Context ...... 1 B. Sectoral and Institutional Context ...... 2 C. Higher Level Objectives to which the Project Contributes ...... 3

II. PROJECT DEVELOPMENT OBJECTIVES ...... 6 A. PDO...... 6 B. Project Beneficiaries ...... 6 C. PDO Level Results Indicators ...... 7

III. PROJECT DESCRIPTION ...... 7 A. Project Components ...... 8 B. Project Financing ...... 11 1. Lending Instrument ...... 11 2. Project Cost and Financing ...... 11 Table No. 2 Project Cost and Financing ...... 11 C. Lessons Learned and Reflected in the Project Design ...... 11

IV. IMPLEMENTATION ...... 12 A. Institutional and Implementation Arrangements ...... 12 B. Results Monitoring and Evaluation ...... 14 C. Sustainability...... 14

V. KEY RISKS AND MITIGATION MEASURES ...... 15 A. Risk Ratings Summary Table ...... 15 B. Overall Risk Rating Explanation ...... 15

VI. APPRAISAL SUMMARY ...... 16 A. Economic and Financial Analyses ...... 16 B. Technical ...... 16 C. Financial Management ...... 17

iv D. Procurement ...... 18 E. Social (including Safeguards) ...... 18 F. Environment (including Safeguards) ...... 19 G. Safeguards Policies that might apply ...... 19

Annex 1: Results Framework and Monitoring ...... 22

Annex 2: Detailed project description (Background and project components) ...... 27 I. Background ...... 27 II. Detailed Project Description ...... 33 Project Development Objective ...... 33 PDO Level Results Indicators ...... 33 Project Components ...... 35

Annex 3: Implementation Arrangements ...... 55 I. Project Institutional and Implementation Arrangements ...... 55 II. Financial Management, Disbursements and Procurement ...... 58 III. Environmental and Social (including safeguards) ...... 72 IV. Monitoring & Evaluation ...... 76

Annex 4: Operational Risk Assessment Framework (ORAF) ...... 78

Annex 5: Implementation Support Plan ...... 82

Annex 6: GEF Incremental Cost Reasoning ...... 87

Annex 7: Impact Evaluation for shade grown coffee ...... 96

Annex 8: Documents in project files ...... 101

Annex 9: Map – Target area ...... 104

v

PAD DATA SHEET BURUNDI Sustainable Coffee Landscape Project

PROJECT APPRAISAL DOCUMENT

. Africa Region Sustainable Development Department Environment, Natural Resources Management, Water and Disaster Risk Management (AFTN3)

. Basic Information Date: April 9, 2013 Sectors: Forestry, General Water, Sanitation and flood protection, Crops, General public administration Country Director: Themes: Land administration and management, Biodiversity, Environmental Philippe Dongier policies and institutions Sector Director: Jamal Saghir Sector Manager: Magda Lovei EA Category: B Project ID: P127258 Lending Instrument: Specific Investment Loan Team Leader(s): Paola Agostini (TTL), Stephen Ling (co-TTL) Joint IFC: No

. Borrower: Ministry of Finance – Republic of Burundi Responsible Agency: Ministry of Agriculture and Livestock Contact: Salvator Nimubona Title: Coordinator PRODEMA Telephone No.: 79 910 412 Email: [email protected]

. Project Implementation Period: 4 Start Date: April 30, 2013 End April 30,2017 years Date: Expected Effectiveness Date: June 4, 2013 Expected Closing Date: April 30, 2017

. Project Financing Data (US$M)

[ ] Loan [ X ] Grant [ ] Other [ ] Credit [ ] Guarantee For Loans/Credits/Others Total Project Cost: $4,200,000 Total Bank Financing : $4,200,000 Total Cofinancing: Financing Gap:

.

vi Financing Source Amount (US$M) BORROWER/RECIPIENT IBRD IDA: New IDA: Recommitted Others: GEF $4,200,000 Financing Gap

. Expected Disbursements (in USD Million) Fiscal Year 2013 2014 2015 2016 Annual 0.7 1.2 1.1 1.2 Cumulative 0.7 1.9 3.0 4.2

. Project Development Objective(s) Pilot Sustainable Land and Water Management practices in the coffee landscape of Burundi

. Components Component Name Cost (USD Millions) Sustainable coffee landscape management $2.82 Addressing pollution point sources in coffee washing stations $0.59

Diversification of livelihoods $0.41 Knowledge and Learning $0.38

. Compliance Policy Does the project depart from the CAS in content or in other significant respects? Yes [ ] No [ X ]

. Does the project require any waivers of Bank policies? Yes [ ] No [ X ] Have these been approved by Bank management? Yes [ ] No [ ] Is approval for any policy waiver sought from the Board? Yes [ ] No [ X] Does the project meet the Regional criteria for readiness for implementation? Yes [X] No [ ]

. Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 X Natural Habitats OP/BP 4.04 X Forests OP/BP 4.36 X Pest Management OP 4.09 X Physical Cultural Resources OP/BP 4.11 X Indigenous Peoples OP/BP 4.10 X

Involuntary Resettlement OP/BP 4.12 X Safety of Dams OP/BP 4.37 X

vii Projects on International Waterways OP/BP 7.50 X Projects in Disputed Areas OP/BP 7.60 X

. Conditions and Legal Covenants Name Recurrent Due Date Frequency Accountant September 4, 2013

Description of Covenant The recipient shall recruit an accountant to integrate PRODEMA’s PCU. Name Due Date Frequency Recurrent Computerized accounting system September 4, 2013

Description of Covenant No later than three (3) months after the Effective Date, the Recipient shall upgrade, within the Project Coordination Unit, the existing computerized financial management and accounting system in a manner satisfactory to the World Bank. . Name Recurrent Due Date Frequency Expert in sustainable land management September 4, 2013 Description of Covenant The recipient shall recruit an expert in sustainable land management to integrate PRODEMA’s PCU.

Name Recurrent Due Date Frequency External auditors December 4, 2013 Description of Covenant The recipient shall engage external auditors for the purpose not later than six (6) months after the Effective Date, in accordance with the provisions of Section III of the Financing Agreement. Conditions Name Type Effective Condition Effective Description of Condition The execution and delivery of this Agreement on behalf of the Recipient have been duly authorized or ratified by all necessary governmental action.

Locations Country First Administrative Location Planned Actual Comments Division Burundi

.

viii I. -STRATEGIC CONTEXT

A. Country Context

1. Economic development in Burundi has been set back by several years of recurring internal conflict. Burundi is a small, landlocked country that straddles Central and East Africa, with a total land area of 27,834 km2, and approximately 8.6 million inhabitants1. Of the total population only 10.6 percent live in urban areas. Burundi has emerged from a cycle of political- ethnic conflicts that lasted more than 13 years and claimed the lives of about 300,000 people while displacing about 16 percent of the population. These years of recurring conflict have had a devastating effect on Burundi’s economy. A rough estimate of the economic cost indicates that without the conflict Burundi’s Gross Domestic Product (GDP) per capita would be about double 2 its current level . As a result of the conflict, Burundi suffers extreme gaps in infrastructure, including roads, power generation, communications, and water and sanitation. The high costs associated with the poor state and coverage of infrastructure discourage domestic and foreign investment and constrain economic growth.

2. After about 25 years of decline in GDP per capita, Burundi’s economy is beginning to recover. Consolidation of the peace process helped start reconstruction and created positive prospects. Also the country has made significant progress in establishing a more stable macroeconomic environment. However, significant constraints to positive economic performance exist, including infrastructure gaps and a generally poor investment climate. Burundi's growth performance has been weak compared to other East African Community countries. Existent structural weaknesses have been compounded by shocks, including several episodes of drought in the northern part of the country. In 2012, the economy remains undiversified and dominated by agriculture, which accounts for about 32 percent of GDP, employs 95% of the active population and provides more than 80% of export earnings. Coffee is the main export crop, accounting for more than 60 percent of export revenues3.

3. Burundi is not likely to meet many of the Millennium Development Goals (MDGs) and it remains very vulnerable to external shocks. Although available social indicators show progress, improvement starts from a low base and Burundi still ranks near the bottom (185th out of 187 countries listed in 2011) of UNDP’s 2011 Human Development Index4. Burundi also remains the third poorest country in the world. Around 67 percent of the population is poor5, which makes it impossible to reach the 2015 MDG target of 18 percent6. In addition, about 60 percent of the population suffers from food insecurity.

1 The Great Achievements of the Government in Socioeconomic Governance, Republic of Burundi, October 2012. 2 Burundi Country Economic Memorandum, World Bank, December 2009. 3 Country Assistance Strategy (CAS) for the period FY13-16. September 18, 2012. 4 http://hdrstats.undp.org/en/countries/profiles/BDI.html 5 It has been established that households headed by a woman, a person divorced or widowed are generally poorer than others (Ngayimpenda, E. et al, 2012) 6 According to data from the official World Development Indicator, the percentage of the population living below the national poverty line in 1990 was 36.4 percent. This figure had roughly doubled by 1998 to 68.0 percent. (IDA, ERSG VI, August 2012.

1 4. In the years since the Arusha Agreement, the comprehensive peace and reconciliation agreement that was signed in 2000 after 13 years of civil war, Burundi has experienced both great strides and major setbacks on the road to lasting peace. In these years, the country has advanced towards a return to peace and stability with sufficient security for economic and social activities, although still experiencing bouts of violence and insecurity.

B. Sectoral and Institutional Context

5. In Burundi, the greatest environmental problems are linked to deforestation. Deforestation is linked to high population pressure on natural resources, agricultural land clearing aggravated by the scarcity of fertile lands, bush fires, exploitation of marshes and other wetlands, and poor management of agricultural lands (largely due to inappropriate farming practices) and protected areas. Between 1990 and 2005, Burundi lost 47.4 percent of its forest cover, or around 137,000 hectares. Currently, only some 152,000 forested hectares remain in the country—most of which has been modified to some degree.7 The annual deforestation rate from 2000 to 2010 was 1.31%8.

6. Unsustainable and unregulated coffee production in Burundi has contributed to the environmental issues of land degradation and poor water management. The use of marginal lands on steep slopes by coffee farmers and the elimination of tree cover on hillsides has contributed to land degradation, biodiversity loss, and expansion of the agricultural frontier into protected areas. In addition, solid and liquid organic waste from the de-pulping of coffee cherries at coffee washing stations (CWSs)9 is a major source of water pollution.

7. Coffee is the country’s primary export crop, accounting for more than 60 percent of all of Burundi’s export earnings, depending on the year. Coffee export revenues accounted for 3.3 percent of GDP in 2011. Around 2.3 percent of the total land area in Burundi is under coffee cultivation, and around 600,000 Burundi households (out of the total 1.2 million households) depend on coffee farming for their livelihood. These rural families are among the poorest in the country. Coffee washing, drying, grading, storage, and other processing steps are a significant source of employment. Typical farms have between 50 and 250 coffee trees. Most of the coffee farmers reside at higher elevations of 1,500 to 2,000 meters (5,000 to 6,600 feet). Arabica trees, mainly of the Bourbon variety, account for 98 percent of the total production10.

8. Burundi has the potential for exporting 60,000 tons annually of high quality Arabica during peak production years (compared to 15,000 tons in 2011), but that potential as not been fully developed. Some advances, however, have been achieved including the participation in the 2012 Cup of Excellence® program which is a highly esteemed award for top quality coffees.

7 Rainforests.mongabay.com/deforestation/2000/Burundi.htm 8 Forests, trees and woodlands in Africa. An action plan for World Bank engagement” World Bank. 2012 9 The CWS are the places where coffee cherries are traditionally taken after picking in order to be pre-sorted, cleaned, depulped, fermented, washed, dried, sorted, milled and then stored to be later shipped to the buyers. 10 R-SEA, 2011.

2 9. To sustain the benefits generated throughout the coffee’s value chain and mitigate potential environmental risks, an Action Plan was prepared with a set of recommendations and strategic directions. At the production phase, the Action Plan suggested the implementation of a training program on shade-grown coffee and sustainable land and water management (including integrated pest management). This program would address the risk of increased land degradation due to agrochemical pollution from the uncontrolled use of pesticides, the use of coffee farmers of marginal lands on steep slopes and the elimination of shade cover on many hillsides. At the processing phase, the R-SEA suggested the need to promote the issuance of environmentally sound standards, and regulations for the coffee washing stations (CWSs)11 and the development of studies about the potential for recycling water economically in the CWSs. An increase in coffee production without any efficient technology or specific regulations may lead to an increase in the demand for water as well as increased water pollution from coffee dumped into the rivers. In addition, at the marketing phase, the R-SEA recommended the development of a coffee certification program and a marketing study for the potential of coffee to access niche markets and diversification strategies. Finally, the Action Plan suggested the need to work in Protected Areas (PAs) in order to adequately manage the possibility that some farmers could expand their plantations to the remaining pockets of forest within protected areas. The implementation of such recommendations of the Action Plan will facilitate an enabling environment for a long-term sustainable coffee sector that will contribute to the development of the agriculture sector, the reduction of poverty levels and the improvement of ecosystem management. 10. The proposed GEF project will contribute to the action plan suggested by the R-SEA in order to assist Burundi to improve the sustainability of selected coffee landscapes.

C. Higher Level Objectives to which the Project Contributes

Consistency with GEF Strategies and Strategic Programs.

11. The project is aligned with the GEF-5 strategic objective for Land Degradation LD-1, “Improved agricultural management”. The project will address the pressures from competing uses on important landscapes. It will focus on investments and capacity development to improve decision-making in productive landscapes, particularly shade-grown coffee plantations, as well as implementing sustainable land and water management practices in eroded areas. 12. The proposed project is also aligned with the GEF-5 strategic objectives for Biodiversity, primarily with BD-1 “Improve Sustainability of Protected Area Systems” and Outcome 1.1 “Improved management effectiveness of existing and new protected areas”. The project will support activities to help reduce the negative impacts of human activities on protected area biodiversity. The project will support activities towards improved management effectiveness of the Bururi Forest Nature Reserve. The project is also aligned with objective BD-2 “Mainstream Biodiversity Conservation and Sustainable Use into Production Landscapes, Seascapes and Sectors” and mainly outcome 2.1 “Increase in sustainably managed landscapes and seascapes that integrate biodiversity conservation”. The promotion of shade-grown coffee plantations will

11 The CWS are the places where coffee cherries are traditionally taken after picking in order to be pre-sorted, cleaned, depulped, fermented, washed, dried, sorted, milled and then stored to be later shipped to the buyers.

3 help provide important habitat for a wide array of biodiversity. The project will contribute to removing the barriers to enhancing, replicating and extending environmental certification systems in productive landscapes and increase the production of biodiversity-friendly goods. 13. Finally, the project will aim at reducing pressures on forest resources and generating sustainable flows of ecosystems services (SFM-1 and Reducing Emissions from Deforestation and Forest Degradation REDD+). The project will be implemented following the landscape approach (promoted through the SFM strategy) that integrates people's livelihood objectives into the management of the different ecosystems within the forested landscape. Regional and National Priorities

14. The project will contribute to GoB’s “Vision 2025”, launched in July 2011, which places great emphasis on economic recovery, identifies infrastructure development, agriculture and tourism as priority areas for the near future and overall “firmly urges the country to make the protection and rational management of the environment a priority, so that the Burundians live within a protected and well-managed environment”12.

15. In November 2011, the government launched the 2012-2017 National Agricultural Investment Plan (PNIA) to streamline its National Agricultural Strategy (NAS) into programs that address the root causes of rural poverty through investments financed by the country’s own resources, as well as external sources. The project will contribute to the PNIA, promoting sustainable coffee production that will benefit the agricultural sector while also ensuring sustainable use of natural resources. 16. The project will also align with the National Strategy for the Environmental and Environmental Action Plan (SNEB and EAP) including its key elements related to sustainable land and water management, especially the protection of the country’s biological heritage. In addition, by promoting sustainable management of coffee landscapes, the project will contribute to the National Strategy and Action Plan to Combat Soil Degradation finalized in September 2012. Activities in the Bururi Forest Nature Reserve will contribute to the country’s National Strategy and Action Plan for Biological Diversity that, among other objectives, aims to protect areas of high biodiversity or special interest. Project activities related to agri-tourism and ecotourism will be consistent with the National Strategy for the Sustainable Development of Tourism (2011-2020) that was formally launched in September 2011. 17. Finally, the project will contribute to some of the recommendations of the National Action Plan for Adapting to Climate Change (NAPA), such as the protection of existing forests, development of devices for erosion control in sensitive areas, and popularization of rainfall collection techniques for agricultural use. Relationship to CAS and PRSP

18. The project contributes to the FY13-FY16 Country Assistance Strategy (CAS) that aims to support Burundi’s development as an increasingly stable, competitive and diversified economy

12 Vision, 2025, June 2011

4 with enhanced opportunities for productive employment and improved standards of living. The CAS identified the proposed project as contributing to two of its pillars: (i) CAS Strategic Objective “Improving Competitiveness” and particularly the “improved business climate and increased private investment” outcome, by strengthening the country’s largest employment sector, expanding research and extension services, assisting farmers’ organizations, establishing marketing strategies for high-quality coffee and promoting polycultures in pilot areas.

(ii) CAS’s Strategic Objective 2 “Improving Resilience by Consolidating Social Stability”, and particularly the “expanded safety nets to reduce volatility of livelihoods” outcome that, among others, aims to reduce environmental degradation and improve livelihoods. 19. The project is also aligned with the second Poverty Reduction Strategy Paper (PRSP II) adopted by the GoB in January 24 2012 for the period 2012-2015. The proposed project is aligned with its second strategic pillar: “Transforming Burundi’s economy to generate sustainable and job-creating growth” as well as its fourth pillar that aims “Promoting development through sustainable environmental and spatial management”13.

Link to Bank Strategies

20. By promoting profitable public-private partnerships for coffee commercialization and strengthening a labor-intensive sector, the project will address the World Bank Strategy for Africa’s14 Pillar One, “Competitiveness and Employment”. It also supports Pillar Two “Vulnerability and Resilience” through the promotion of SLWM practices which will support adaptation to the effects of climate change, building resilience against the impacts of droughts and other climate-related risks from the agriculture sector. 21. The project will also contribute to the WB’s “Enhancing Competitiveness and Resilience in Africa: Action Plan for Improved Natural Resource and Environment Management” by addressing some of its major business themes: (i) managing renewable natural resources for growth and ecosystem sustainability and (ii) improving the enabling environment for responsible investment through transparent environmental regulations and institutions15.

22. The project will contribute to several of the major themes included in the World Bank Africa Forest Strategy (“Forests, trees and woodlands in Africa: An action plan for World Bank engagement”), namely sustainable production, broad landscape restoration (through agro- forestry, erosion control measures and watershed management), and enhanced protected area management16. The project is also consistent with the Bank’s Africa Climate Change Strategy (Making Development Climate Resilient: A World Bank Strategy for Sub-Saharan Africa), particularly the focus areas of SLWM and increased agricultural productivity as adaptation

13 PRSP II, 2012 and RoB, 2012 14 “Africa’s Future and the World Bank’s Support for It”, World Bank, March 2011. 15 “Enhancing Competitiveness and Resilience in AFRICA - Action Plan for Improved Natural Resource and Environment Management” World Bank, 2012. 16 “Forests, trees and woodlands in Africa. An action plan for World Bank engagement” World Bank. 2012.

5 strategies to climate change17.

23. Finally, the project also builds on and benefits from the TerrAfrica partnership18. Since Burundi is one of the member countries, the project will benefit from the platform that facilitates the access, exchange and methodical accumulation of key knowledge to implement sustainable land management in Africa.

II. PROJECT DEVELOPMENT OBJECTIVES

A. PDO

24. The project development objective is to pilot sustainable land and water management practices in the coffee landscape of Burundi. 25. Sustainable Land and Water Management (SLWM) adopted in this proposal involves the adoption of the landscape approach that, through appropriate management practices, enables land users to maximize the economic and social benefits from the land while maintaining or enhancing the ecological support functions of the land resources. It involves a holistic approach that integrates social, economic, physical and biological assets from agricultural land to forest land to protected areas. B. Project Beneficiaries

26. The project will benefit farmers, producer organizations, and cooperatives working in three provinces, Bururi, Bubanza and Muyinga, and target 15,000 households, with at least 50% of beneficiaries being women. In addition, the project will benefit the inhabitants of the buffer zone of the Bururi Forest Nature Reserve by promoting more sustainable land use practices and conservation-compatible livelihoods. The project will also benefit the Batwa indigenous people by offering alternative livelihoods to this traditionally marginalized community. 27. The project will benefit local farmer cooperatives operating CWSs, along with downstream water users, through the establishment or improvement of environmentally-friendly technologies for treatment of solid and liquid effluents in the target provinces. The project will also strengthen the capacity of the public sector to manage and regulate ecosystems services in productive and protected landscapes. Finally the project will benefit the global community by preserving biodiversity of global significance, sequestering carbon, and reducing land degradation.

17 “Making Development Climate Resilient: A World Bank Strategy for Sub-Saharan Africa”. World Bank, October 2009. 18 TerrAfrica is a partnership that aims to address land degradation in Sub-Saharan Africa by scaling up harmonized support for effective and efficient country-driven sustainable land management. It is a model for donor harmonization, Africa-driven development, multi-disciplinary work and mutual accountability. TerrAfrica receives direction and support from a group of African governments; NEPAD; the UNCCD Secretariat; the World Bank; the UNCCD’s Global Mechanism; FAO; UNDP; UNEP; IFAD; AfDB; multilateral organizations; bilateral donors; and civil society organizations. (www.terrAfrica.org).

6 C. PDO Level Results Indicators

The key results will include the following:

 Land area where sustainable land and water management practices (including shade grown coffee) have been adopted as a result of the project (4,500 ha) (Core Indicator).  Environmentally friendly effluent control systems implemented in selected CWS as a result of the project (6 systems, 2 per target area).  Direct project beneficiaries (15,000 households with 50% female beneficiaries) (Core Indicator).

III. PROJECT DESCRIPTION

28. The proposed GEF project will assist Burundi to improve the sustainability of selected areas within coffee landscapes. This will be done through: (i) implementing sustainable land and water management practices in productive areas in order to prevent further land degradation and rehabilitate degraded areas (factors that have negatively impacted coffee production); (ii) establishing a shade-grown coffee pilot program that promotes, with environmentally-friendly production technologies, a polyculture that includes coffee as well as various types of trees and other plants that provide additional products for income generation and consumption; (iii) promoting sustainable management in a key PA, under the premise that protected areas demarcation has been agreed between key stakeholders and the neighboring local communities have alternative sources for improving livelihoods, so that the risk of agricultural expansion to the area will be reduced; (iv) addressing point-source pollution through the establishment of efficient, environmentally-friendly coffee processing technologies and the strengthening of policies and regulations; (v) promoting marketing and commercialization strategies for high- quality coffee, planted with shade and processed with reduced environmental negative impacts; and (vi) piloting initiatives that generate alternative sources of income such as agri-tourism and ecotourism. Accessing higher value markets with shade-grown coffee will benefit the coffee sector as well as generate an incentive for the conservation and improved management of the environment. These measures will also increase communities’ resilience to adverse shocks. All of the above will be integrated under a landscape approach that considers both geographical and socio-economic considerations in order to manage the productive and protected areas within a landscape mosaic. 29. The project will finance priority recommendations of the Rapid Strategic Environmental Assessment (R-SEA) of the Coffee Sector. The World Bank assistance will build on the lessons learned from the Lake Victoria Environmental Management Project, Phases I and II (LVEMP I and II) and the institutional arrangements of the Agro-Pastoral Productivity and Markets Development Project (PRODEMA). These are two already-approved IDA projects with which coordination has been established and which will form the baseline for the new GEF project.

Geographic location 30. The project’s area of intervention will be located in three of the country’s provinces, chosen according to the following criteria: (i) already included within PRODEMA; (ii) high potential for

7 cultivating shade-grown coffee; (iii) presence of operational coffee washing stations; and (iv) proximity to a national protected area. Based on these criteria, the three provinces selected are:

 Bubanza, bordering Kibira National Park  Bururi, where the Bururi Forest Nature Reserve is located  Muyinga, bordering the Ruvubu National park. Muyinga has also demonstrated having a population receptive to innovations and where the coffee plantations are young.

31. As the project gathers lessons and experiences, it is expected that the activities could be replicated and scaled up initially in other PRODEMA and LVEMP areas. Annex 9 includes the map with the project’s target area. A. Project Components

32. The components to be financed with the GEF resources are the following (see more details in Annex 2): Component 1: Sustainable Coffee Landscape Management (US$2.82 million) 33. The component will finance technical assistance, workshops, goods, works, matching grants for associated subprojects, services and operational costs in order to promote sustainable land and water management, agroforestry and shade grown coffee cultivation, as well as conservation activities in one protected area. The component will address the landscape approach that integrates people’s livelihood objectives in the management of the different ecosystems within the landscape (including productive and protected areas). The connectivity between ecosystems will be considered as well as the link between local-site level action (at farm, forest, protected area) and the broader landscape level. The component will support the following activities. 34. SLWM matching grants for associated subprojects will be awarded to applicants19 (farmer groups, associations or cooperatives) in degraded areas of the landscape mosaic. The subprojects will provide financial and technical assistance to implement SLWM technologies drawn from the table below and according to specific area’s needs and characteristics:

Table No. 1 Sustainable Land and Water Management Practices

Technologies Agronomic and vegetative measures Structural measures • Inter-cropping • Terraces and other physical measures (e.g. soil bunds, stone bunds, • Agro-forestry in crop or grazing systems bench terraces, etc.) • Mulching and crop residue • Flood control and drainage measures (e.g. rock catchments, water • Crop rotation harvesting, cut-off drains, vegetative waterways, stone-paved • Fallowing waterways, floodwater diversion, etc.) • No till • Water harvesting, runoff management, and small-scale irrigation • Composting/green manure (shallow wells/boreholes, micro ponds, underground cisterns, • Integrated pest management percolation pits, ponds, spring development, roof water harvesting,

19 The subprojects related to SLWM geared towards natural resources protection and reduction of degradation, will be awarded following the selection criteria PRODEMA as it is described in detail in Annex 2 and 3 and based on PRODEMA’s implementation Manual.

8 • Vegetative strip cover river bed dams, stream diversion weir, farm dam, tie ridges, inter- • Contour planting row water harvesting, half-moon structures, etc.) • Integrated crop-livestock systems • Woodlots • Alternatives to fuelwood 35. The component will promote shade-grown coffee plantations through on-the-ground matching grants for associated subprojects. A sustainable shade-grown coffee system promotes not only coffee cultivation but a polyculture and intercropping system that mixes coffee with various trees and other plants, increasing biological and income diversity, and resilience to climate and economic shocks. A list of benefits associated with shade-grown coffee is included in Annex 2 (appendix 1). The project will also support the process for the GoB to become ready for the REDD+20 Strategy. 36. The component will also finance research on the effects of different kind of shade on land productivity, soil and water quality, and presence of pests, among others. Results in the production of shade-grown coffee will be assessed in terms of environmental and financial benefits as well as the factors that affect decisions about tree cover. 37. Finally, the component will support strengthening the protection and management of the globally significant Bururi Forest Nature Reserve (BFNR). Investments in this protected area will become a pilot to study the interrelation between coffee, protected areas, and biodiversity using the landscape approach. Sustainable livelihood matching grants for associated subprojects will be financed for the communities living around Bururi that are dependent on its natural resources (including the Batwa families).

Component 2: Addressing Pollution Point Sources in Coffee Washing Stations (US$0.59 million)

38. The component’s objective is to address the sources of pollution in the coffee washing stations (CWS) that will have direct environmental benefits and support attempts to access higher value markets that demand improved production standards. The component will finance works, goods, matching grants for associated subprojects, services, technical assistance, training and operational costs in order to promote environmentally sound processing of coffee cherries through the following activities. 39. Through matching grants for associated subprojects, the component will upgrade and/or establish six effluent control systems including water efficient eco-pulpers at washing stations (two in each target province) managed by local farmer cooperatives or domestic privately-owned stations21. The main purpose of these systems will be to reduce the volume of water consumption and remove waste organic matter that can be used for composting.

20 Reducing emissions from deforestation and forest degradation, and the role of conservation, sustainable management of forests, and enhancement of forest carbon stocks are a set of activities collectively referred to as “REDD+”. Burundi has applied to become part of the FCPF that assists countries in their REDD+ efforts. 21 The criteria for involving domestic privately-owned coffee washing stations are included in the project implementation manual (PIM).

9 40. The component will also finance the establishment of standards and regulations to promote the environmentally sound operation of CWSs. In addition, it will strengthen the institutional capacity to monitor the implementation of sustainable technologies and the enforcement of regulations and policies. Component 3: Diversification of Livelihoods (US$0.41 million)

41. This component would finance works, goods, technical assistance, workshops and training, matching grants for associated subprojects and operational costs for the following activities. 42. The component will support a marketing study and action plan to be conducted by InterCafé to identify target markets for the region’s coffee, along with potentially suitable certification schemes. Following the marketing study, the project will finance initial certification costs for three farmer cooperatives and washing stations supported under the previous components. The certification process will promote or strengthen increases in the adoption of environmentally friendly management practices. 43. The project will also support an ecotourism pilot in the Bururi Forest Nature Reserve and will pilot two community based agritourism initiatives in selected coffee farms. These pilots will work on the premise that if key stakeholders and the local communities living in the buffer zones have alternative sources for improving livelihoods compatible to biodiversity conservation, then the incentive to protect the forests is increased and the risk of expansion of agriculture to the Reserve or other protected areas will be reduced. The pilots will provide lessons for future scaling up.

Component 4: Knowledge and Learning (US$0.38 million)

44. The component will finance operational costs, services and technical assistance for the project’s management, the implementation of the project’s monitoring and evaluation (M&E) particularly an Impact Evaluation (IE) as well as communication activities. Specifically, the project will finance the employment of an additional accountant and expert in sustainable land management to integrate PRODEMA’s PCU, additional costs for PRODEMA’s M&E, the implementation of an impact evaluation to assess the impact of shade coffee on specific variables, and a communication strategy for the project.

10 B. Project Financing

1. Lending Instrument

45. The Sustainable Coffee Landscape in Burundi project will be a full-sized, specific investment loan (SIL) with a four-year implementation period, to be financed by a GEF grant in the amount of US$4.20 million.

2. Project Cost and Financing

Table No. 2 Project Cost and Financing Project Components GEF Grant US$ million 1. Sustainable Coffee Landscape Management 2.82 2. Addressing Pollution Point Sources in Coffee Washing Stations 0.59 3. Livelihoods Diversification 0.41 4. Knowledge and Learning 0.38

Total Financing 4.20

Contingencies included in each component

C. Lessons Learned and Reflected in the Project Design

46. The project’s technical design is based on experience within the country and abroad (Ethiopia, Uganda, Latin America) regarding the components’ benefits and conditions for success. Investments in Burundi and elsewhere, as well as studies and workshops conducted during project design, have provided key lessons. Also, the WB has extensive experience with the promotion of shade-grown coffee projects in Central America. Some of these lessons are:

Thematic Lessons:

(a) Landscape management is complex and must address a myriad of interactions among land, water and people. Successful approaches balance evidence-based planning with meaningful stakeholder involvement at an early stage. (b) The project will only succeed under an integrated approach that addresses livelihoods and landscape management. Land and water management interventions can safeguard natural resources, while livelihoods interventions can reduce pressure on natural resources. (c) Successful landscape programs are characterized by openness to testing innovative approaches, while insisting on rigorous and locally appropriate technical designs and monitoring. (d) The project will consider the experience of PRODEMA and PRASAB regarding the subprojects as an effective instrument to assist small-scale farmers, with limited or non-existent access to credit, to develop basic production or sustainable land and water management activities.

11 (e) Promotion of shade-grown coffee will need to consider the different positive interactions (soil fertility, wildlife habitat, conservation of water, soil and biodiversity, modification of microclimate, etc) that are present when combining coffee plantations with shade trees as well as potential negative interactions (competition for light, water and nutrients, etc.). It is necessary to determine the particular conditions in which positive interactions outweigh the negative ones. (f) Costs of certification and audits can place the advantages of certification beyond the reach of many smallholders. This can be alleviated to some extent when farmers form community groups and cooperatives that are the ones to receive the certification. In any case, financial assistance during the initial stages of certification is commonly required.

Operational Lessons:

(g) Whenever possible, projects should be designed building on installed capacity, capitalizing on market forces, and partnering with institutions that have specialized capacities in certain areas, instead of trying to create these capacities themselves. (h) A robust and well-funded M&E system that addresses input-output, process, and impact evaluation is required. (i) Supervision must be strong and well funded. (j) The project will work with private service providers that have proven more efficient than public sector providers, whilst strengthening the capacity of government regulatory functions.

IV. IMPLEMENTATION

A. Institutional and Implementation Arrangements

47. The Ministry of Agriculture and Livestock (MINAGRIE) has overall responsibility for the project’s implementation. Implementation will be carried out through the project coordination unit (PCU) already established for PRODEMA. The proposed project will strengthen the existing PCU, composed of a small management team of experienced technicians, by adding a new accountant and a sustainable land management specialist. 48. Through Memoranda of Understanding (MoU), certain specialized functions will be provided by partner organizations in collaboration with MINAGRIE:

 The Ministry of Water, Environment, Land and Urban Planning (MEEATU) will be in charge of the activities to promote regulatory aspects towards environmentally friendly coffee processing.

 InterCafe, an autonomous professional organization created for consultation and decision- making regarding the coffee sector, will be directly involved in the implementation of the sustainable shade-grown coffee production program, the activities related to coffee certification and marketing, SLWM practices, the piloting of agri-tourism initiatives in coffee farms and the communication strategy.

12  ISABU, a key research and development agency for the agricultural sector, will support the research activities for the development of the Manual for Shade-Grown Coffee cultivation.

 INECN, the agency responsible for the management of national parks and nature reserves, will be in charge of the activities involving the Bururi Forest Nature Reserve.

 ARFIC, the public enterprise that represents the GoB in the coffee sector, will support the training program regarding environmental and social standards at the coffee washing stations. 49. The project will build on PRODEMA’s decentralized structure. The activities at the local levels would be implemented through the three decentralized Inter-Provincial Coordination Units (IPCUs) established for PRODEMA and located in each of the provinces. The IPCUs would be in charge of field coordination, guidance, and supervision of project activities. 50. Implementation arrangements for subprojects. Private Sector Providers (PSPs) will be recruited on a competitive basis to help Producer Organizations (POs) choose their priority investments and prepare sub-project plans and financing requests for the SLWM, shade coffee, coffee effluent control systems, sustainable livelihoods around Bururi Forest Reserve and agri- tourism subprojects. In addition, the committees already utilized by PRODEMA, the Communal Approval Committees (CACs) and the Provincial Approval Committees (PACs), will support the proposed GEF project by approving the matching grants for the associated subprojects. These committees are composed of government officials and representatives of professional and non- governmental organizations (NGOs). Training will be offered to these committees in order to become familiar with the characteristics of the new project and the criteria for the SLWM, shade coffee, coffee effluent control systems, sustainable livelihoods around Bururi Forest Reserve and agri-tourism subprojects. At provincial and communal levels, DPAEs (Provincial Department of Agriculture and Livestock - decentralized units of MINAGRIE) will work closely with the PSPs to follow sub-project implementation. 51. Governance and advisory arrangements. To ensure intersectoral coordination, sharing of lessons and experiences, a technical monitoring committee was created in November 2012 with members from the implementation partners, farmers’ organizations and NGOs22. In addition, the project will receive guidance from the Project Steering Committee (PSC)23 established for PRODEMA project and headed by MINAGRIE.

22 The committee members are: MINAGRIE, the General Directorate for the Environment and Forestry, INECN, ARFIC, ISABU, InterCafe, the National Coffee Growers Association (CNAC), General Directorate of the National Tourism Office, the Organization for the Defense of the Environment in Burundi (ODEB) and PRODEMA. It will meet twice a year to: (i) review the proposed Annual Work plans and budgets, the draft annual implementation and audit reports, as well as the Procurement Plan; and, (ii) identify necessary project adjustments based on monitoring and evaluation results.

23 The PSC members are high-ranking officials from MINAGRIE, MEEATU, the Ministry of Decentralization and Communal Development (MDDC), the Ministry of Commerce, Industry and Tourism (MINICOMT), and other key ministries, the Second Vice Presidency and related agencies. ISABU and the Project Coordinator are non-voting members. The PSC will meet at least once a year and will be in charge of overseeing overall implementation and performance of the Project and providing policy guidance.

13 B. Results Monitoring and Evaluation

52. The project will utilize PRODEMA’s existing Management Information System (MIS), which incorporates technical and financial data to measure progress. It will support day-to-day implementation management and ensure results indicators are updated on a regular basis. The MIS will incorporate new information and data related to biodiversity, SLWM, and other topics that are relevant for the proposed project; training will be extended to cover these topics. 53. At provincial and communal levels, DPAEs will collect and transmit data to the Inter- Provincial Coordination Units (IPCUs) who will consolidate and analyze the data, before transmission to the M&E specialist. 54. Monitoring and evaluation reports, including environmental and social indicators, will be prepared quarterly at the provincial and communal levels and semi-annually at the central level. The semi-annual reports will be circulated to sector ministries and development partners. 55. Joint Bank-GOB semi-annual implementation support missions will be complemented by a Mid-Term Review two years after Effectiveness and coordinated with a PRODEMA support mission. An impact evaluation (IE) will be conducted to assess achievement of expected key project results. The IE will address impacts of shade on biodiversity, coffee productivity and the economic returns from the coffee farm (Annex 7). 56. Upon completion of the GEF operation, the Bank will review the results and prepare the Implementation Completion Report (ICR). This will be submitted no later than six months after project closure. The project will also need to report at GEF endorsement, mid-term, and closure, using the GEF tracking tools for biodiversity, land degradation, and sustainable forest management. C. Sustainability

57. The GoB is highly committed to the project as it addresses key issues of sustainability and value addition for the coffee sector. The project is part of the process regarding the coffee sector reform that has been subject to consultation with all key stakeholders. 58. The project aims to provide long-lasting benefits for the farmers and their families in terms of improved natural resources conditions and increased food security. Also, the specific field investments made under the project should be sustainable, due to the improvement in incomes from higher harvests and prices. However, as a demonstration project, the long-term impact will rely on the ability to provide data to convince the GoB, farmers and private sector of the advantages of shade coffee, the application of SLWM practices and the diversification of livelihood alternatives. A strong MIS will facilitate this purpose. 59. The project will promote an effective marketing and certification process that will contribute towards extending the duration of the processes initiated. Partnerships with private coffee companies will allow for the benefits to go beyond the project’s scope. That said,

14 competitiveness will be contingent upon consistent production of fully traceable quality coffee that provide maximum economic benefit to coffee farmers24.

V. KEY RISKS AND MITIGATION MEASURES

A. Risk Ratings Summary Table

Table No. 3 Rating Stakeholder Risk L Implementing Agency Risk Capacity M Governance S Project Risk Design S Social and Environmental M Program and Donor L Delivery Monitoring and Sustainability S Overall Implementation Risk S

H: High; S: Substantial; M: Moderate; L: Low

B. Overall Risk Rating Explanation

60. This Burundi is a post-conflict country with weak institutions. The background fiduciary environment represents a high risk, but this is effectively controlled by use of a professional PCU with an excellent track record of implementation of PRODEMA. However, use of implementation structures outside of regular ministries creates its own risks with respect to long- term aims to mainstream project activities. This, added to the intrinsic complexity of working across sector boundaries, and the technical and market risks of introducing shade coffee, mean that the overall risk rating remains substantial. Details are included in Annex 4.

24 A Strategic Guide for Marketing Burundi Specialty Coffee. USAID-Burundi. 2009.

15 VI. APPRAISAL SUMMARY

A. Economic and Financial Analyses

61. Based on the nature of the project, classical financial and economic analyses cannot accurately measure its local impacts, and even less so those at country or global level. The paucity of robust, reliable environmental databases in Burundi, and the difficulty in monetizing environmental and social benefits, such as conservation of biodiversity and other ecosystem services, exacerbates the difficulty of measuring and valuing many of the effects involved. Consequently, an Incremental Cost Analysis following GEF guidelines, and not an Economic and Financial Analysis, has been prepared and included in Annex 6. The Impact Evaluation to be conducted during the project’s duration will provide economic figures to quantify some of the results achieved. 62. The project will increase opportunities for improving livelihoods and provide concrete socioeconomic benefits to smallholder coffee farmers, and producer organizations (POs) including farmers’ cooperatives. Among others, success in the project will lead to increases in cash income for rural families, more employment opportunities, diversification of products and food security. The project will also enhance competitiveness of the sector to ensure its sustainability. The establishment of commercial partnerships with international coffee companies will bring important opportunities for the producers to sell their high quality coffee. An improvement of the production and an effective marketing of the Burundi brand in the world could lead to important benefits for the whole country.

B. Technical

63. The technical design of the project was assessed to be highly appropriate because it: (a) Continues the process started with the 2010 Rapid Strategic Environmental Assessment (R- SEA) that identified key issues to be addressed in the coffee sector; (b) Will be implemented following integrated and value-chain approaches; (c) For some of the activities conducted in the Bururi Forest Nature Reserve, will use the methodological approaches conducted by the IUCN Livelihoods and Landscapes Strategy (LLS)25 being developed successfully in Burundi. Some of the methodological approaches involve the work of visualization, participatory monitoring and theory of change; (d) Will use implementation approaches (e.g. matching grants for associated subprojects) that have already been shown to work in the local context; (e) Has been supported by exchange visits to gather lessons learned (Ethiopia, May 2012), participation in technical conferences about the coffee value chain (Trieste, Italy, June 2012),

25 The Livelihoods and Landscapes Strategy (LLS) was a five-year program implemented by IUCN (International Union for the Conservation of Nature) and funded by DGIS (Ministry of Foreign Affairs of the Netherlands). LLS work in Burundi focused on restoring some of the highly degraded forest ecosystems and helping tackle the high levels of poverty.

16 and the elaboration of technical support documents (Shade-Grown Coffee Manual to be completed by ISABU in June, 2013); (f) Will be enriched from TerrAfrica’s access, exchange and methodical accumulation of key knowledge to implement Sustainable Land Management in Africa; (g) The project’s main premises about the benefits of shade grown coffee have already been experienced in other countries successfully and were validated in a workshop conducted with some of the project’s key stakeholders; (h) Will build on the results from the Burundi Agribusiness Program (BAP) regarding the establishment of effluent control systems in coffee washing stations; and (i) Will promote exchange of experiences with other countries regarding commercialization of coffee as well as tourism and ecotourism as alternative sources of income.

C. Financial Management

64. The Project Coordination Unit (PCU) and the financial management unit will be responsible for ensuring compliance with the financial management requirements of the Bank and the GoB and support the deployment of project resources in an economic, efficient, and effective manner to achieve the stated development objectives. 65. Information systems, accounting and personnel. The Sustainable Coffee Landscape Project will maintain an accounting system similar to the one held by other IDA-financed projects in Burundi. The accounts will be kept through the management software TOMPRO already used for PRODEMA. This software will be updated to reflect the incorporation of the new project. The staff management unit involved in PRODEMA will be strengthened by the recruitment of an accountant to work exclusively on the GEF project. This person will also be trained in the World Bank financial management procedures. 66. Internal control. The internal control system of the project was documented in a financial management manual as part of the Project Implementation Manual. This Manual is based on the PRODEMA’s existing manual but adjusted to consider the specifics of the new project. 67. Disbursement Arrangements. The project activities will be funded through a Designated Account (with a ceiling of USD 300,000) opened at the Central Bank that is acceptable to the World Bank. The Designated Account will be managed according to the procedures described in the Disbursement Guidelines and the project’s disbursement letter. Disbursements will be made for 100% of eligible expenditures (inclusive of taxes) on the basis of Statement of Expenditures (SOE) or Records evidencing eligible expenditures for amounts above SOE threshold specified in the Disbursement Letter. The Recipient may withdraw the proceeds of the Grant using any of the four methods of disbursements (Advance, Direct Payment, Reimbursement and Special Commitment). The Recipient will use the electronic submission (“eDisbursement”) of applications for withdrawal accessible via the Client Connection website. Further disbursement instructions will be provided in the Disbursement Letter including the Disbursement Guidelines. 68. Production of financial reports. The PCU will produce financial monitoring reports as specified in the grant agreement for the proposed project. These reports will be submitted to IDA on a quarterly basis within 45 days after the end of each quarter. These reports shall include (i) a

17 table of sources and uses of funds; (ii) use of funds by activity or component; (iii) procurement aspects; and (iv) final evaluation or monitoring of physical progress of the activities. Financial statements will be prepared at the end of each fiscal year covering generally 12 months. 69. External audits. Financial statements of the project will be subject to an external audit prepared by an independent firm that will be selected in accordance with the procedures acceptable to the World Bank. Audit reports must be submitted to IDA six months after the end of each fiscal year or before June 30 of each year. The terms of reference for the selection of the firm have been prepared by PRODEMA’s financial management and submitted to the World Bank for approval. D. Procurement

70. Procurement for the proposed operation will be carried out in accordance with the World Bank's "Guidelines: Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" published by the World Bank in January 2011 ("Procurement Guidelines"), in the case of goods, works and non-consulting services; and "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" published by the World Bank in January 2011 ("Consultant Guidelines") in the case of consultants' services, and the provisions stipulated in the Grant Agreement. Further, the “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants”, dated October 15, 2006, and revised in January 2011 will apply. 71. Procurement risk assessment. Since PRODEMA’s PCU will be the project’s executing agency (including the execution of all contracts and agreements), this is the entity that is being evaluated. An assessment of PRODEMA to implement procurement actions for this project was carried out in September 2012 using the Procurement Risk Assessment Management System (P- RAMS). Findings on this assessment are summarized in Annex 3 and details are filed in the P- RAMS Bank tool. The overall project risk for procurement is Substantial and it is judged to be Moderate after implementation of mitigation measures and given the fact that no complex contracts are foreseen to be financed in the project. 72. Procurement Plan. A Simplified Procurement Plan, acceptable to the Bank and consistent with the simple project design, has been developed by the project implementation agency with focus on investment activities and technical assistance. The Procurement Plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. E. Social (including Safeguards)

73. Social Benefits: Poverty, Equity, and Gender. Expected social benefits include, but are not limited to: enhancement of the means of production, enhancement of livelihood sources, job creation, income security, induced development, and the strengthening of local community ownership of sustainable land management investments. Despite the focus on a cash crop, the project will contribute to sustaining and strengthening food crop production through sustainable land and water management practices. The project will acknowledge that coffee production and processing is an activity that is well represented across gender, age, ethnicity, and income

18 groups. The project will promote female participation in each of the activities to be financed, following the R-SEA’s recommendation in which programs that enable women to play a greater role in the coffee sector will be an important investment for the Government, organizations, and households. 74. Participation, Consultation, and Communication. The R-SEA was the key sector consultation that informed project identification. Stakeholders consulted during preparation included national government administrations, private sector (the national association of coffee producers, Inter Café Burundi), NGOs, community based organizations (CBOs), community based facilitators (CBFs), the GEF and donors. Public consultations with project beneficiaries, local NGOs, and other stakeholders have been carried out on the environmental and social aspects of this project, with reference to the Environmental and Social Impact Assessment and Resettlement Policy Framework (prepared for PRODEMA but also applicable to this new project) and the Process Framework and Batwa (indigenous peoples) Action Plan Addendum (prepared specifically for this project)26. The consultations focused on assessing the viability of the project, identifying potential areas of conflict between stakeholders, and defining areas of collaboration. During implementation, recurrent consultations will be carried with the various stakeholders identified. To further improve stakeholders’ participation, the project will prepare and implement a communication strategy.

F. Environment (including Safeguards)

75. The expected environmental impacts from this project would be overwhelmingly positive, including (i) reduced soil erosion and improved water retention from the planned investments in sustainable land management, including shade coffee cultivation; (ii) reduced water pollution from project-supported improvements in coffee washing practices; and (iii) increased biodiversity conservation from the improved protection and management of the Bururi Forest Nature Reserve, along with the expected addition of different species of shade trees to coffee plantations. 76. Any potential adverse environmental impacts from this project would be rather minor and linked to (i) small-scale civil works that might be built to improve management of the Bururi Reserve and to implement the Batwa Peoples Action Plan and possibly (ii) changes in agricultural pest management practices in coffee cultivation areas (which, on balance, are more likely to be environmentally positive). These will be addressed through the safeguards instruments described below including a Revised Pest Management Plan, a Process Framework and an Indigenous Peoples Plan.

G. Safeguards Policies that might apply

77. The proposed project is classified as Category B. The following are safeguards policies that are the envisioned to be triggered by the project.

26 Latest consultations occurred in September 2012 in the Bururi Province and in January 16 and 18, 2013 in Bubanza and Muyinga provinces respectively.

19

Safeguard Policies Triggered Yes No TBD Environmental Assessment (OP/BP 4.01) X Applies to this Category B project, which is intended to be highly positive overall from an environmental and social standpoint but would influence activities (cultivation of coffee and associated crops; coffee washing stations) that are inherently somewhat sensitive from an environmental standpoint. Natural Habitats (OP/BP 4.04) X Would apply in that the project would help to conserve natural habitats, but the project is not expected to involve any natural habitat loss or degradation. The project design would seek to discourage—and would certainly not support—the expansion of coffee plantations within protected areas. Forests (OP/BP 4.36) X Would apply since the project would seek to improve forest conservation within the Bururi Forest Nature Reserve. The project would not support forest harvesting, other than the sustainable utilization of wood from the pruning of coffee shade trees (which is outside the scope of OP 4.36). Pest Management (OP 4.09) X Would apply because pest management is often a part of the cultivation of coffee and associated crops. Physical Cultural Resources (OP/BP 4.11) X

Indigenous Peoples (OP/BP 4.10) X A small portion of the project area, in the vicinity of the Bururi Forest Nature Reserve, is inhabited by the Batwa ethnic group, which qualifies as indigenous under OP 4.10. Involuntary Resettlement (OP/BP 4.12) X

Some project activities may induce land acquisition; however, impacts are presumed to be limited and site-specific. Any land acquisition involving the need to resettle or compensate affected people would be addressed under the PRODEMA Resettlement Policy Framework. In addition, a Process Framework has been prepared for this project, specifically to address livelihoods-related issues in the vicinity of the Bururi Forest Nature Reserve. Safety of Dams (OP/BP 4.37) X

Projects on International Waterways (OP/BP 7.50) X

Projects in Disputed Areas (OP/BP 7.60) X

Piloting the Use of Borrower Systems to Address X Environmental and Social Safeguard Issues in Bank- Supported Projects (OP/BP 4.00)

Safeguard instruments

78. To address environmental and social safeguards, the project would use the following existing safeguards instruments prepared for the ongoing Agro-Pastoral Productivity and Markets Development Project (PRODEMA): (i) Environmental and Social Impact Assessment (ESIA) (Analyse d’Impact Environnemental et Social du Projet, February 2010), which includes an Environmental Management Plan (Plan de Gestion Environnementale) and Pest Management

20 Plan (Plan de Gestion Integre de Pestes et des Pesticides); (ii) Resettlement Policy Framework (Cadre de Politique de Reinstallation Involontaire des Populations, December 2009); and (iii) Indigenous Peoples Plan (Plan d’Action pour le Developpement des Batwa, December 2009) for the overall project area. These existing safeguards instruments have been updated for the project with an explanatory Cover Note, endorsed by the GoB and disclosed for the project as new documents. 79. These safeguards instruments suitably cover this new project as well as the ongoing PRODEMA because (i) the new project’s proposed investments in sustainable land management, improved coffee cultivation (under shade) and processing (washing), and small civil works (such as to enhance ecotourism and protected area management at Bururi Forest) are a subset of the broader range of agricultural and natural resource management investments which have already been assessed for PRODEMA; (ii) the 3 provinces (Bubanza, Bururi, and Muyinga) in which the new project would operate are the same as in PRODEMA (which also covers additional provinces); (iii) the new project would be implemented by the same lead institution (Ministry of Agriculture and Livestock, MINAGRIE) and guided by the same National Policy Steering Committee; and (iv) the beneficiaries (coffee and other farmers) and other stakeholders under the new project would be a subset of those under PRODEMA. 80. In addition to these existing PRODEMA safeguards instruments, two new documents were prepared for the new project: (i) a Process Framework to address sustainable livelihood issues in the vicinity of the Bururi Forest Nature Reserve and (ii) an Addendum to the 2009 Indigenous Peoples Plan to cover the Batwa indigenous community that resides near the Bururi Reserve. In addition, the Pest Management Plan (Plan de Gestion Integre de Pestes et des Pesticides) imbedded within the PRODEMA ESIA was specifically adapted to the new project (Plan de Lutte Antiparasitaire) and publicly disclosed as a separate document. On January 22 2013, the Government of Burundi approved and published the safeguard documents in accessible areas such as public libraries, the office of the Minister of Agriculture and Livestock, and the decentralized administrative offices. These documents were also sent by the World Bank to InfoShop (January 25, 2013) and subsequently publicly disclosed. The documents disclosed were:

 Analyse d’Impact Environnementale et Sociale (Environmental and Social Impact Assessment, ESIA)  Plan de Lutte Antiparasitaire (Pest Management Plan, PMP)  Cadre de Politique de Réinstallation Involontaire des Populations (Resettlement Policy Framework, RPF)  Cadre Fonctionnel de la Gestion durable de la Reserve Naturelle Forestière de Bururi et de l’Ecotourisme (Process Framework, PF)  Plan D’action Additionnel pour Le Developpement des Batwa Résidents Autour de la Réserve Forestière de Bururi (Indigenous Peoples Plan, IPP)

21 Annex 1: Results Framework and Monitoring

BURUNDI: Sustainable Coffee Landscape

. Project Development Objectives

. PDO Statement: Pilot sustainable land and water management practices in the coffee landscape of Burundi.

. Global Environmental Objective Indicators Responsibility Cumulative Target Values Data Source/ for Unit of Methodology Data Indicator Name Core Baseline YR1 YR2 YR3 YR4 End Target Frequency Measure Collection Land area where X sustainable land and water management Project practices (including records, shade grown Ha 0 700 2,200 3,700 4,500 4,500 Annual supplemented PCU coffee) have been by beneficiary adopted as a result verification of the project

Environmentally friendly effluent control systems 6 (2 per Project PCU and implemented in Number 0 2 4 6 Annual province) Records MEEATU selected CWS as a result of the project

Direct project X 15,000 Survey of Number 0 2,000 7,000 12,000 15,000 Annual PCU beneficiaries households perceived

22 (number), of (50% project which female (%) female) benefits

. Intermediate Results Indicators Responsibility Cumulative Target Values Data Source/ for Unit of Methodology Data Indicator Name Core Baseline YR1 YR2 YR3 YR4 End Target Frequency Measure Collection Component 1: Sustainable coffee landscape management 1.1 Target population trained in SLWM, shade- Number Project records grown coffee, and of supplemented PCU and 0 4,000 14,000 24,000 30,000 30,000 Annual biodiversity househol by beneficiary Intercafe conservation ds verification practices as a result of the project 1.2 Research Number 12 ( demonstration sites of Project records PCU and 0 2 6 10 12 and Annual for shade- grown demonstr supplemented ISABU Kayanza) coffee ation sites 1.3 Improved X biodiversity Twice: At conservation in the PAMETT mid-term PCU and 39 50 Project records protected area as Score and MEEATU measured by the closing PAMETT 1.4 GEF tracking tools updated Twice: At PCU, (SFM, Land mid-term Project Number 0 4 4 MEEATU and Degrad., and Records INECN Biodiversity 1 closing and2)

23

Component 2: Addressing pollution point sources in coffee washing stations

2.1 Submission for adoption of new Project PCU and environmental Yes/No No Yes Yes Annual Records MEEATU regulations for CWS 2.2 Capacity building program to enhance enforcement and Project PCU and Yes/No No Yes Yes Yes Yes Yes Annual monitoring of Records MEEATU environmental and social standards

2.3 Reduced 30 for the 6 amount of water CWS that utilized for the participate Project PCU and processing of coffee Percentage 0 5 20 30 Annual in Records MEEATU as a result of the subcompon project ent 2.1

Component 3: Diversification of livelihoods Contract 3.1 Contracts signed signed in by the CWS with a year 2 by 1 Yes/No No Yes Yes Annual Project records PCU certification CWS and agency. in year 3 by 2 CWS 3.2. 20% increase in Yes/No No No Yes Yes Yes Annual Project records PCU the number of

24 certification indicators met by farmers each year (specific indicators will depend on the certification scheme selected).

3.3 Tourists visiting new agri-tourism and ecotourism Number 0 50 100 150 200 300 Annual Project records PCU initiatives as a result of the project. Component 4: Knowledge and Learning 4.1 M&E system functioning and providing accurate End of and on-time data Yes/No No Yes Yes Yes Yes Yes Project records PCU project (including impact evaluation)

4.2 Communication plan designed and Yes/No No Yes Yes Yes Yes Yes Annual Project records PCU implemented

.

25 Supplemental Table – PDO Indicator Definitions

. Project Development Objective Indicators Indicator Name Description (indicator definition etc.) Land area where This core indicator measures the land area that as a result of the project incorporated and/or improved sustainable land sustainable land and management (SLWM) practices. water management This indicator can track progress toward sustainability at farm scale and at landscape scales within agroecological practices (including zones, watersheds, or basins. The progress is equal to the cumulative number of hectares where SLWM has been shade grown coffee) adopted (by changing a practice or changing the use of a technology) since the beginning of the project. SLWM have been adopted as a practices include technologies and approaches to increase land quality (see table pg 9). The practice must be site- result of the project specific because different areas will require different interventions. Among the interventions, the indicator will distinguish areas where shade will be grown to coffee plantations. The number of hectares where a polyculture with coffee and shade trees is cultivated as a result of the project, will be registered. The definition of Sustainable Land and Water Management (SLWM) adopted in this proposal is based on TerrAfrica’s definition: the adoption of land use systems that, through appropriate management practices, enables land users to maximize the economic and social benefits from the land while maintaining or enhancing the ecological support functions of the land resources. SLWM includes management of soil, water, vegetation and animal resources. It involves a holistic approach that integrates social, economic, physical and biological assets. For the purposes of this proposal, this definition will encompass other approaches such as integrated natural resources management (INRM), integrated water resources management (IWRM), integrated ecosystem management (IEM), eco-agriculture and sustainable forest management (SFM), and many facets of sustainable agriculture, agriculture water management (AWM), biodiversity conservation and climate change adaptation, such as agroforestry. Environmentally This indicator measures the amount of effluent control systems installed and in operation in the selected coffee washing friendly effluent control stations. The measure will be done in each of the three target provinces. systems implemented in selected CWS as a result of the project Direct project The number of beneficiaries will be measured yearly. This will be done through a statistically significant rapid survey, beneficiaries (number) which will determine the number of persons within target project sites that perceive they are benefitting from one or Direct project female more of the project’s interventions. The survey will also produce the percentage of female beneficiaries. beneficiaries (percentage)

26 Annex 2: Detailed project description (Background and project components) BURUNDI: Sustainable Coffee Landscape I. Background

General characteristics of the coffee value chain

1. Coffee growing is one of the most important productive activities in Burundi. Coffee is the country’s primary export crop, accounting for more than 60 percent of all of Burundi’s export earnings, depending on the year27. Around 2.3 percent (60,000 hectares) of the total land area in Burundi is under coffee cultivation. Approximately 600,000 Burundi households (out of the total 1.2 million households) depend on coffee farming for their livelihood. These rural families are among the poorest in the country. Typical farms have between 50 and 250 coffee trees. Most of the coffee farmers reside at higher elevations of 1,500 to 2,000 meters (5,000 to 6,600 feet). These high elevations, coupled with abundant rainfall, enable Burundi’s coffee farmers to produce mostly Arabica coffees (Bourbon variety)28. There are two types of coffee processing in Burundi: washed and fully washed. The vast majority of Burundi’s coffee is fully washed, evidenced by the extensive presence of coffee washing stations (CWSs), most built in the 1980s.

2. The coffee sector suffers from low and declining production due to ageing plantations, high intermediary costs, degraded soils and an inadequate incentive framework. The expansion of coffee cultivation to more than 4 percent of Burundi’s land area, and investments in the construction of Coffee Washing Stations (CWSs) from 1980 to 199329, did not translate into the expected increases in production, especially with the advent of the civil war. Considering the irregular two-year cycle alternating between high and low harvests, coffee production has had a declining trend in recent years. Between 1983 and 2007, Burundi produced on average 26,700 metric tons of green coffee annually, virtually the same as in the 1950s and 1960s. From 2010 to 2011 production was around 24,00030. Yields are approximately half those in neighboring countries (250/250 grams per tree, versus 450/500 grams in Kenya).

3. Coffee production and processing is an activity that is well represented across gender, age, ethnicity, and income groups. The same is true regarding employment opportunities at the coffee Washing Stations (CWSs)31. Coffee washing, drying, grading, storage, and other processing steps are a significant source of employment. Some of these tasks tend to be dominated by men, such as the washing and working at the drying tables, while women tend to be employed in the harvesting, sorting and grading operations. The figure below shows different stages of the coffee-processing phase showing women and men participation.

27 R-SEA, 2011. 28 R-SEA, 2011. 29 From 1980 to 1993, Burundi developed a program (partially funded by the World Bank) to construct CWSs and plant trees. The number of trees increased from 90 million to more than 220 million (with variations depending on the source), and 133 CWSs were built and equipped. 30 ARFIC, 2012 31 The CWS are the places where coffee cherries are traditionally taken after picking in order to be pre-sorted, cleaned, depulped, fermented, washed, dried, sorted, milled and then stored to be later shipped to the buyers.

27

4. The country’s potential in commercializing its coffee has not fully developed. Despite a market structure that allows direct contracting with international coffee buyers, and the fact that Burundi’s climate is ideal for cultivating high quality Arabica coffee, most of the production is sold on the commodity market at relatively low prices due to an ill-adapted processing strategy that does not foster specialty coffee. Some advances however have been achieved. Burundi started in 2012 the Cup of Excellence® program which is a highly esteemed award given out for top quality coffees. The country’s coffee competed in a national and international competition in August and seventeen (17) lots were selected by the juries. The winning coffee was then auctioned32 on November 7, 2012 with great results for all the coffee growers. The majority of the record prices at auction go back to the producers who become recognized in the industry as

32 Only coffees that continuously score high enough are allowed to move forward in the competition. The final winners are awarded the prestigious Cup of Excellence® and sold to the highest bidder during an internet auction. Coffee connoisseurs worldwide with discerning palates who appreciate the complex flavor and aromatics found in a world class coffee buy and savor these winners.

28 being a quality producer33. Overall, Burundian coffee could reach specialty, high value, high quality markets that value production from fragile countries, but success in accessing these markets requires strong marketing strategies.

Rapid Strategic Environment Assessment (R-SEA)

5. The World Bank funded a Rapid Strategic Environment Assessment (R-SEA) that analyzed the environmental and socioeconomic aspects along the entire coffee value chain. . The objectives of the R-SEA were to: (i) assess the risk for possible environmental and social impacts of the coffee-sector reform, and propose alternatives and mitigation options for possible negative impacts and to enhance the positive impacts; and (ii)identify the institutional, legal, and regulatory aspects that are needed along the entire coffee value chain for the development of an environmentally and socially sustainable coffee sector that can contribute to economic development and poverty alleviation. An Action Plan was prepared, giving recommendations and providing strategic directions for the sustainability of coffee production, processing, and commercialization. The main sector issues identified by the R-SEA were related to: (i) lack of knowledge amongst coffee farmers about appropriate sustainable land and water management (SLWM) technologies; (ii) lack of policy incentives for adoption of SLWM practices; (iii) lack of regulations for land-use planning and sustainable coffee production; and, (iv) lack of capacity of institutions to monitor and enforce regulations. This project would fund key actions recommended in the R-SEA Action Plan.

Land degradation in Burundi and environmental issues in the coffee value chain

6. In Burundi, the greatest environmental problems are linked to deforestation, which in turn is linked to high population pressure on natural resources, agricultural land clearing aggravated by the scarcity of fertile lands, bush fires, exploitation of marshes and other wetlands, and poor management of agricultural lands (largely due to inappropriate farming practices) and protected areas. Between 1990 and 2005, Burundi lost 47.4 percent of its forest cover, or around 137,000 hectares. Currently, only some 152,000 forested hectares remain in the country—most of which has been modified to some degree.34 The annual deforestation rate from 2000 to 2010 was 1.31%35. In relation to land degradation, this is mainly caused by several factors including deforestation (resulting from the depletion of wood resources, forest clearing for agriculture, poor management of forest resources, and poor land use), land scarcity, overgrazing, and climatic disturbances.

7. The country has taken several steps to stop degradation of forest particularly an extensive reforestation project with the goal of achieving reforestation of 20% of the country by 2000. The

33 A winning farm and often the whole region can expect to receive future visits from roasters looking to buy more quality coffee for their companies. The positive impact on the quality of life for a winning farmer and his family is usually permanent as the auction money is often spent on farm improvements or family education which can change their economic livelihood for the long term. 34 Rainforests.mongabay.com/deforestation/2000/Burundi.htm 35 Forests, trees and woodlands in Africa. An action plan for World Bank engagement” World Bank. 2012

29 program started in 1978 with positive results but the civil war hampered the initiative. Reforestation efforts restarted as well as efforts to monitor the natural forest ecosystems included in the 4% of the territory declared protected areas. In addition, the country has committed to stop degradation through strategies that include agroforestry, extension of woodlands on vacant lands, decentralization of forest management, among others. The country has also recently designed a Financial Strategy for the Action Plan for the fight against land degradation that was established in 2005 (Strategie D’Investissement et Plan de Financement du Plan d’action National de Lutte contre la Degradation des Terres). Similarly, to reduce the impact of climate change the country has a National Action Plan for Adaptation. These documents recommend interventions to address land degradation including the promotion of SLWM practices. Currently, implementation of SLWM however remains limited due to lack of financial resources and coordination among the sectors involved36. The map below shows the levels of land degradation in the country highlighting the project target provinces.

36 Ngayimpenda, 2012.

30 8. Unsustainable and unregulated agriculture production including coffee has contributed to the environmental issues of land degradation and deforestation as well as poor water management. The R-SEA identified environmental issues that the country is experiencing or could arise from the coffee-sector reform especially in the production and processing phases.

9. Production phase. The R-SEA stated that if the reform promotes an increase in coffee production without adequate regulations, this could aggravate land degradation. The use by coffee farmers of marginal lands on steep slopes37 causes soil erosion in high rainfall areas and deposition on fertile lowlands in the absence of protective measures. Also, the elimination of tree cover on hillsides for increased coffee production causes significant impacts on various soil quality parameters—including topsoil erosion—. In addition, the R-SEA identified the risk of an increase in agrochemical pollution due to uncontrolled use of fertilizers and pesticides. 10. The pressure to expand coffee areas to increase production also poses a risk for the country’s protected areas that cover 5.6 percent of the total country land mass38. Human settlements are located at the edge of the country’s Protected Areas with no buffer zones. The following map shows an overlap between some of the PAs and the areas with excellent suitability for coffee. Considering that arable lands are scarce,39 there is a possibility that some farmers could expand their plantations to the remaining pockets of forest within protected areas. Burundi’s PAs are vulnerable to encroachment, mainly because their physical boundaries are not clearly demarcated; some of them do not yet have clear legal status. In addition, the existing PAs lack sufficient patrols to protect them from additional land clearing for crop production.

37 Cultivation in steep slopes unsuitable for agriculture is part of a larger problem related to land allocation that does not consider land’s quality or fragility. Burundi’s lack of land use planning, the traditional inheritance practice of fragmenting land holdings, and the absence of a national policy for sustainable land use explain the country’s poor land allocation. 38 Burundi includes 14 protected areas: two national parks, six natural reserves, two monuments, and five protected landscapes, all owned by the state and managed by the National Institute for the Environment and Nature Conservation (INECN). In addition, there are three community and private protected areas: a sacred forest and two arboretums. The protected areas of Burundi cover approximately 157.923 hectares (5.6 percent of the total country land mass). 39 Because of demographic pressure, the arable lands are parceled out increasingly, and the national average of land available to every household is just 0.38 ha.

31

11. Processing phase. The environmental issues that could be exacerbated by the reform are several. An increase in coffee production will lead to an increase in the demand for water from the washing stations. In the 1990s, before the reform and with a production of 180,000 tons of cherry, the volume of water used by the CWS was 2,880,000 cubic meters40. After the reform, with an estimated production in the year 2015 of 240,000 tons of cherry, the volume of water could increase to a level of 3,840,000 cubic meters. Besides the consumption of water, there is a risk of an increase in water pollution from processing in the washing stations and increased solid wastes. Solid and liquid organic waste from depulping of cherries at coffee washing stations (CWSs) is a major source of water pollution. Effluents from the CWSs flow downhill and into the stream or river below. Using this water, with large amounts of organic matter that is difficult to degrade, for drinking, irrigation, cultivation, or washing negatively affect the health of the basin (including a reduction of the levels of oxygen for aquatic plants and wildlife) and as a consequence the health of farmers and their families41. In addition, poor decomposition of manure causes foul odors that can expand up to a distance of around five kilometers downstream the areas of coffee processing.

40 Using Sihimbiro (2009) estimation that the volume of water used by the CWSs is 16 cubic meters of water per ton of cherry. 41 R-SEA, 2011

32 II. Detailed Project Description

Project Development Objective

12. The project development objective is to pilot sustainable land and water management practices in the coffee landscape of Burundi.

13. Sustainable Land and Water Management (SLWM) adopted in this project involves the adoption of the landscape approach that, through appropriate management practices, enables land users to maximize the economic and social benefits from the land while maintaining or enhancing the ecological support functions of the land resources. It involves a holistic approach that integrates social, economic, physical and biological assets from agricultural land to forest land to protected areas.

PDO Level Results Indicators

14. The key results that the project will aim to achieve are the following  Land area where sustainable land and water management practices (including shade grown coffee) have been adopted as a result of the project (4,500 ha) (Core Indicator)  Environmentally friendly effluent control systems implemented in selected CWS as a result of the project (6 systems, 2 per target area)  Direct project beneficiaries (15,000 households with 50% female beneficiaries) (Core Indicator)

Geographic Location

15. The project’s area of intervention will be located in three of the country’s provinces, chosen according to the following criteria: (i) already included in PRODEMA; (ii) high potential for cultivating shade grown coffee; (iii) presence of coffee washing stations in operation; and (iv) proximity to a national protected area. The three provinces selected are:  Bubanza, bordering Kibira National Park  Bururi, where the Bururi Forest Nature Reserve is located  Muyinga, bordering the Ruvubu National park. Muyinga has also been shown to have a population receptive to innovations and where many coffee plantations are young.

16. As the project gathers lessons and experiences, it is expected that the activities could be replicated in other PRODEMA and LVEMP areas. Annex 9 includes a map of the project’s target area.

Approach

17. The project will assist Burundi to improve the sustainability of coffee landscapes through: (i) implementing sustainable land and water management practices in productive areas, in order to prevent further land degradation and rehabilitate degraded lands (factors that have negatively

33 impacted coffee production); (ii) establishing a shade-grown coffee pilot program that promotes, with environmentally friendly production technologies, a polyculture that includes coffee as well as various types of trees and other plants that provide additional products for income generation and consumption; (iii) promoting sustainable management in a key PA, under the premise that protected area demarcation has been agreed between key stakeholders and the neighboring local communities have alternative sources for improving livelihoods, so that the risk of agricultural expansion to the area will be reduced; (iv) addressing point source pollution through the establishment of efficient, environmentally-friendly coffee processing technologies and the strengthening of policies and regulations; (v) promoting marketing and commercialization strategies for high-quality coffee, planted with shade and processed with reduced environmental negative impacts; and (vi) piloting initiatives that generate alternative sources of income such as agri-tourism and ecotourism. Accessing higher value markets with shade-grown coffee will benefit the coffee sector as well as generate an incentive for the protection and conservation of the environment. These measures will also strengthen the capacity of the public sector to manage and regulate ecosystems services, following a landscape approach that considers both geographical and socio-economic considerations in order to manage the productive and protected areas. Strengthening policy and regulatory frameworks, removing critical knowledge barriers, and developing institutional capacities will contribute towards achieving this goal.

18. The project’s landscape approach integrates socioeconomic and geographic perspectives of the territory in order to manage the land, water, forest and other natural resources. Under this approach, the connectivity between ecosystems is considered as well as the link between local- site level action (at farm, forest, protected area) and the broader landscape level. In addition, the approach integrates ecosystem goods and services objectives with human well-being objectives in order to promote sustainable natural resources management42.

19. The project will finance priority recommendations of the 2011 Rapid Strategic Environmental Assessment (R-SEA) of the Coffee Sector. In addition, the World Bank assistance will build on the lessons learned from the Lake Victoria Environmental Management Project II (LVEMP II) and the institutional arrangements of the Agro-Pastoral Productivity and Markets Development Project (PRODEMA). These are two already approved IDA projects with which coordination will be established and which form the baseline of the GEF project. The project design is also based on experience within the country and abroad (Ethiopia, Uganda, Latin America) regarding the benefits and conditions for success for the key project’s components. Investments in Burundi and elsewhere as well as studies and workshops conducted during project design have provided key lessons.

42 A “landscape approach” means taking both a geographical and socio-economic approach to managing the land, water and forest resources that form the foundation – the natural capital – for meeting the WB’s goals of food security and inclusive green growth. By taking into account the interactions between these core elements of natural capital and the ecosystem services they produce, rather than considering them in isolation from one another, we are better able to maximize productivity, improve livelihoods, and reduce negative environmental impacts. (http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTARD/0,,contentMDK:23219902~pagePK: 148956~piPK:216618~theSitePK:336682,00.html). The GEF advocates the landscape approach that embraces ecosystem principles as well as the connectivity between ecosystems. (GEF website: Sustainable Forest Management (SFM)/REDD-PLUS43 Strategy).

34

Project Components

20. The components to be financed with the GEF resources are the following:

Components

Component 1: Sustainable coffee landscape management (US$2.82 million) 21. Under the first component, the project will promote sustainable land and water management, agroforestry and shade grown coffee cultivation, as well as conservation activities in one protected area. The component will finance technical assistance, workshops, goods, works, matching grants for associated subprojects, services and operational costs for the development of the following activities. Sustainable land and water management (US$ 0.77 million)

22. The component will support sustainable land and water management practices in degraded areas of the landscape mosaic. The project will finance matching grants for associated subprojects, awarded to applicants (farmer groups, associations or cooperatives) that promote hands-on training in the farms and investments in SLWM practices. The subprojects will provide financial and technical assistance to undertake the changes that are required to generate economic and social benefits for the land users, while minimizing land degradation, rehabilitating degraded areas, and ensuring an optimal and sustainable use of land and water resources. The component will offer the farmers a menu of options in terms of a range of SLWM technologies considered most promising for the region. The farmers will receive the required technical assistance to select the most appropriate technology to incorporate in each specific subproject. Specific practices that can be used in combination to advance toward SLM are listed in the following table:

Table No. 4. Sustainable Land and Water Management Practices

Technologies Agronomic and vegetative measures Structural measures • Inter-cropping • Terraces and other physical measures (e.g. soil bunds, stone bunds, • Agro-forestry in crop or grazing systems bench terraces, etc.) • Mulching and crop residue • Flood control and drainage measures (e.g. rock catchments’ water • Crop rotation harvesting, cut-off drains, vegetative waterways, stone-paved • Fallowing waterways, flood water diversion, etc.) • No till • Water harvesting, runoff management, and small-scale irrigation • Composting/green manure (shallow wells / boreholes, micro ponds, underground cisterns, • Integrated pest mgt (aiming at reducing percolation pits, ponds, spring development, roof water harvesting, agrochemical pollution due to the river bed dams, stream diversion weir, farm dam, tie ridges, inter- uncontrolled use of pesticides) row water harvesting, half-moon structures, etc.) • Vegetative strip cover • Contour planting • Integrated crop-livestock systems • Woodlots • Alternatives to fuelwood

35 Building on the scheme established for PRODEMA, the subprojects related to SLWM geared towards natural resources protection and reduction of degradation, will not require beneficiary contribution (although highly recommended). However, in order to be considered they will need to follow these principles for best SLM practices43:  Contribute to increase land productivity and/or water use efficiency  Improve livelihoods  Improve ecosystems: being environmentally friendly

23. Technical support required for sub-project identification, proposal preparation, selection and follow-up will be contracted to private sector providers (PSPs). The matching grant for associated subproject mechanism for the project will continue the one used by PRODEMA, which in turn took it from PRASAB in order to capitalize on the experience and lessons learned. The PSPs will facilitate the operation of the stakeholder committees in charge of selecting the subprojects.

24. As part of the implementation of SLWM practices, the subprojects will include training programs offered for extension agents and farmers on SLWM technologies. A SLWM training program and set of training materials will be developed based on the menu of the SLWM technologies that have been considered most adequate to the area of intervention. Since Burundi is part of the TerrAfrica platform, the training will draw upon the knowledge base and lessons learned gathered by the platform.

Promotion of Shade Grown coffee (US$ 1.36 million)

25. The project will promote or improve shade-grown coffee plantations through on-the-ground investments and training activities. A sustainable shade-grown coffee system promotes not only coffee cultivation but a polyculture and intercropping system that mixes coffee with various trees and other plants (like maize and beans), increasing biological and income diversity, and resilience to climate and economic shocks.

26. A polyculture system with shade-grown coffee plantations promotes a more efficient use of resources (land, vertical space, sunlight, water, etc.), along with improving livelihoods and food security. Such a system helps to ensure, even in a down cycle year for coffee production, that farmers have alternative income that can be reinvested in their farming exploitations. A polyculture will contribute to the food security of the participant households. It also has the potential to generate additional services besides coffee production such as timber, fruit production, fuelwood, medicinal plants as well as shelter for animals such as birds and insects. Annex 2 (appendix 1) illustrates further details about the benefits of shade grown coffee.

27. As an alternative to the existing tradition of coffee monoculture established for many years in Burundi, the project will finance matching grants for associated subprojects in zones that are

43 FAO, 2011

36 more promising for polyculture. From previous experience, the coffee shade trees that the project will initially promote in the subprojects include Albizia, Erythrina, Cordia and Acacia. However, demonstration plots will help researchers to identify the most appropriate species for shade trees and the optimum density, according to the specific circumstances of the region’s coffee area. The selection of shade trees will also not only consider the agroforestry setting that ensures higher coffee yield, but will also consider the potential economic value of the shade (commonly managed in a largely subsistence-focused manner) as well as its biodiversity conservation value and carbon sequestration potential. This approach benefits from the experience of shade-grown coffee in Ethiopia, Uganda and in many countries in Central and South America. If needed in the project area, pruning and replanting of coffee trees could be financed.

28. The component will also finance training that will focus on: cultivation of shade-grown coffee, providing habitat for a greater diversity of plant and animal species, helping to maintain genetic diversity, preventing soil erosion and land degradation, helping moderate climate change, providing alternative sources of income within niche markets, and application of mulching techniques that increase coffee productivity. Training will be coordinated by InterCafe and offered to extension agents, cooperatives, and farmers on shade grown coffee. The training will benefit with visits to successful experiences in nearby areas44, which will facilitate a better understanding of the techniques and help stimulate the required changes.

29. The matching grants for associated subprojects for shade grown coffee will follow the same scheme of implementation as the SLWM with the participation of PSPs.

30. Finally, the project will also support the process for the GoB to become ready for the REDD+45 Strategy. Burundi has submitted interest in joining the FCPF that assists the countries in their REDD+ efforts. The support to be provided may include supporting readiness activities such as the identification of drivers of deforestation and emerging opportunities to address the drivers, and the consultation process.

Research and Development (US$ 0.14 million)

31. The project’s support for shade-grown coffee will build on the technical work developed for the 2010 Strategic Environmental Assessment as well as lessons from past and on-going projects. It will also gather information from the experiences in other countries of Africa and Latin America. The effort to document and gather lessons learned that technically enrich the project design is an ongoing process that requires technical support. During project design, a study was conducted in order to prepare a preliminary Manual for Shade Grown Coffee cultivation for Burundi that gathers the lessons learned from experience in Ethiopia. This activity will refine the

44 One example is the study tour conducted by a Burundian delegation to Ethiopia in May 2012, as part of project preparation. 45 Reducing emissions from deforestation and forest degradation, and the role of conservation, sustainable management of forests, and enhancement of forest carbon stocks are a set of activities collectively referred to as “REDD+”.

37 Manual produced during project preparation, adding in-country scientific evidence of the effects of different kind of shade on land productivity, soil and water quality, and presence of pests, among others. The project will also finance demonstration sites to be established by the Institute of Agronomic Sciences of Burundi (ISABU), in which shade-grown coffee will be cultivated and its results will be assessed and modeled, in terms of environmental and financial benefits as well as the factors that affect decisions about tree cover.

32. The research will be conducted involving the participation of the coffee farmers. Partners in the implementation of this research are the coffee growers, INTERCAFE, coffee cooperatives and the DPAEs (decentralized units of MINAGRIE). The pilots will be conducted in ISABU's coffee research centers as well as selected farms. The research centers are located in Kayanza and Gitega considering these are easily accessible to facilitate monitoring. The two sites also present agroecological differences, as the first region has adequate levels of rainfall, while the other suffers of water deficits. ISABU may also conduct research studies in farms located in the target areas of Bururi, Bubanza and Muyinga. The farms will be selected if the owners volunteer to participate and agree with the conditions of the research, have shade coffee planted and will receive extension services by the project. A total of 10 demonstration plots will be installed. The size of the plots will be about 0.15-0.20 hectares for each rural area and 0.50 hectares in each of the two coffee research centers.

33. The research around selection of coffee shade species and planting density will address the different positive interactions that are present when combining coffee plantations with shade trees, as well as potential negative interactions. The positive interactions include improvement of soil fertility through addition of tree litter, natural weed and pest management, modification of microclimate, habitat for wildlife, and conservation of soil, water, and biodiversity through the protective role of trees. On the other hand, the negative interactions involve competition for light, water, and nutrients, allelopathy, harboring crop pests, and the risk of invasiveness of introduced agroforestry species46. The research will aim at identifying the conditions for successful shade coffee systems with positive interactions outweighing the negative ones. The selection of shade trees will not only consider the agroforestry setting that ensures higher coffee yield, but will also consider the potential economic value of the shade (commonly managed in a largely subsistence-focused manner) as well as its biodiversity conservation value and carbon sequestration potential. In addition, the research will need to consider the standards established by the certification schemes in which the beneficiaries might be involved, under activity 3.1. This research will generate local lessons to validate and continually update the Manual.

Sustainable protected area management (US$ 0.55 million)

34. The project will support strengthening the protection and management of the Bururi Forest Nature Reserve (BFNR), because of its globally significant biodiversity and the linkages to

46 Moges Abebe, Yitebitu. The impact of overstorey trees on sustainable coffee (Coffea arabica L.) production in Southern Ethiopia. 2012.

38 nearby areas of coffee cultivation within the landscape mosaic. Created in 1951, the BFNR is categorized as a protected area subject to active intervention for management purposes, so as to insure the maintenance of habitats and/or to meet the requirements of particular species (IUCN Management Category IV).

35. About 23,000 people, including an indigenous Batwa community, live in the vicinity of the Bururi Reserve; some rely upon natural resources harvested within or near the reserve for their livelihoods. Given the local scarcity of land and the increasing profitability of many crops (including coffee), there is a continual risk of agricultural encroachment within this protected area.

36. Investments in this protected area will become a pilot to study the interrelation between coffee, protected areas, and biodiversity. The premise is that if Bururi’s boundary is in agreement between key stakeholders and the local communities living in the buffer zones have alternative sources for improving livelihoods, then the risk of expansion of agriculture to the Reserve will be reduced, including with the indigenous Batwa people.

37. Based on consultations with the National Institute for the Environment and the Conservation of Nature (INECN) in charge of the country’s PA management, it was agreed that the priority investments to be supported will focus on:  Establishment of a Management Plan with zoning. This will be conducted in 5 steps: (i) put in place a multidisciplinary team with environmental, social and legal specialists, among others, in order to develop a Management Plan for the reserve: (ii) carry out a diagnostic collection of bio-ecological and socioeconomic data towards assessing the value of the natural resources in and around the reserve. The collection will be done through the revision of secondary sources as well as from direct contact with local people and authorities. The results of this exercise will enable a zoning plan that includes a full conservation area, a co-management area with mechanisms that are defined in the Management Plan, and a multi-purpose area with several uses; (iii) conduct a SWOT analysis, identifying key actors, their roles, importance and influence; (iv) prepare a draft of the Management Plan; and (v) validation of the plan through stakeholder consultation at the local and national levels. The validated document will be submitted to MEEATU for formal approval.

 Physical demarcation of the reserve. This will consist of a physical demarcation of the boundaries, as well as an "ecological demarcation" with the participation of local communities. For the physical demarcation and along the 37 km long perimeter of the Reserve, the National Cadastre Services will place pillars (approximately 800 pillars) following the information provided by INECN. Ecological demarcation will consist of the planting of tree species chosen by local communities in a strip of about 3 m wide along the perimeter. Priority will be given to native or exotic species used by local communities themselves. Committees involved in this activity will create a village nursery (approximately 400,000 plants for the 37 kms). Awareness raising and

39 communication campaigns (such as: "one family 100 trees, "one student 10 trees" and “one soldier 10 trees") will encourage people to participate in the reserve’s conservation. Students’ involvement will be supported by environmental education campaigns in the schools. Training sessions will be organized for the participant households regarding the establishment and management of the nursery. All of the activities will be incorporated in a plan designed in consultation with the key stakeholders. Such plan will result from the agreed rules between forest managers and local communities regarding the process to demarcate the reserve. Local NGOs will help to ensure a good social organization of communities and will facilitate the development agreements to be signed between the park manager and local communities.

 Rehabilitation of the reserve’s headquarters. Roofs, walls and floors of all offices will be rehabilitated, in compliance with environmental standards and using local labor. In addition, a room for environmental education will be built with local materials. Office and communications equipment, power sources, and pipes for water supply will also be provided. Local communities will be involved in this rehabilitation work.

 Installation of watch posts and monitoring stations. Three watch posts (watchtowers) will be installed in scenic areas within the reserve. The posts will allow visitors to observe animals and landscapes around the reserve and also enable the reserve’s staff to carry out monitoring and surveillance. These posts will be built with local materials and will use local labor. Two monitoring stations will also be built in order to provide shelter during day and night patrol operations.

 Equipment. The activity will include essential equipment to facilitate patrolling, reception of tourists, and collection of reliable ecological data for monitoring. This will include: uniforms (for 35 rangers and tourist guides), GPS, communications equipment, binoculars, long-range flashlights, kitchen utensils for cooking during patrols, camping gear (sleeping bags, tents, mattresses) and transport facilities (car, motorcycles, bicycles).

 Training for the Reserve’s staff. This will be offered once an assessment is conducted of the training needs and the existing level of knowledge and expertise. The training will consist of short courses and may include exchange visits with other protected areas in Burundi or in the sub-regions of the Great Lakes. The conservation unit of the reserve will host intern students from various universities of Burundi. During the project it is expected a minimum of 16 trainees from universities and at least 6 staff members will also benefit from short courses in specific areas, according to the needs and opportunities that arise.

 Environmental Education. An environmental education program will be conducted for heads of households, local government, environmental clubs in primary and secondary schools, and groups of loggers around the tree planting activity in the buffer zone. Militaries will also be involved in the program, as a cooperation agreement will be signed with the military base located in the area in order to facilitate the reserve’s demarcation. Military will also receive training regarding the importance of the reserve’s protection. Training modules and communication tools will be developed.

40

 Ecological and socio-economic monitoring. A system will be set up to periodically collect data and indicate the status of key parameters. A database on MS Access or MS Excel will be created, and subsequent data analysis will allow an adaptive management of the Reserve. This will continue the work of participatory socio-economic data collection on conservation and development indicators developed under the IUCN Livelihoods and Landscapes Strategy (LLS)47 in Burundi. The people responsible for the system will be trained in data entry and analysis.

 Law Enforcement. Teams will conduct periodic and sporadic patrols, based on the information from the ecological and socio-economic monitoring. It is expected that each year four patrols involving up to 15 guards will take place. The patrol reports will be sent after each campaign. Persons seized or arrested will be judged according to the regulations under the Forestry Code.

 Promotion of sustainable livelihoods for local communities (including socially marginalized Batwa). Improving community livelihoods will be a key element of the Bururi Reserve’s Management Plan. A list of priorities will be drawn up for actions to be undertaken to support communities’ livelihood improvement. These planned actions will be consistent with the criteria and procedures spelled out in the Process Framework for this project. Income generating initiatives will be promoted in areas such as beekeeping, livestock, watershed protection through planting and forage production, improved stoves, domestication of medicinal plants, crafts, among others. NGOs will accompany communities in the implementation of the subprojects. Regarding the Batwa community, there are 133 families living around the Bururi Forest Nature Reserve. These Batwa people live in borrowed degraded lands under extreme poverty conditions. Of these families, a group of 28 families live at the edge of the Reserve and on the outskirts of the town of Bururi. The GEF project will finance capacity building and sustainable livelihood alternatives for the 28 families. The remaining Batwa families (from a total of 133), not directly affected by the GEF project, will be supported by PRODEMA’s subproject component. A specific plan for the indigenous Batwa community living near the Bururi Reserve was provided in an Addendum to the PRODEMA Indigenous Peoples Plan.

Component 2: Addressing Pollution Point Sources in Coffee Washing Stations (US$0.59 million)

38. The component objective is to address the sources of pollution in the coffee washing stations (CWS) that will have direct environmental benefits and support attempts to access

47 The Livelihoods and Landscapes Strategy (LLS) was a five-year program implemented by IUCN (International Union for the Conservation of Nature) and funded by DGIS (Ministry of Foreign Affairs of the Netherlands). The Strategy focused on four main themes: poverty reduction, natural resource-based markets and incentives, forest governance, and landscape transformation. One of the LLS landscapes supported was the Great Lakes that included Burundi, Democratic Republic of Congo, and Rwanda. LLS work in this post-conflict region focused on restoring some of the highly degraded forest ecosystems and helping to tackle the high levels of poverty. As part of the initiative, participatory monitoring and evaluation were conducted, based on the theory of change.

41 higher value markets that demand improved production standards. The component will finance works, goods, matching grants for associated subprojects, services, technical assistance, training and operational costs in order to promote environmentally sound processing of coffee cherries through: (i) direct investments in improved technologies in selected CWSs; and (ii) strengthening policy and regulation.

39. With this component, the project will promote a mix of incentives in addition to regulations, while also moving the coffee sector towards greater quality in the processing cycle. This greater quality will also be promoted in the production cycle as well as being recognized through market-based mechanisms as it is being proposed in the other project’s components. Component 2 will be developed through the following three activities.

Promotion of Environmentally Friendly Processing Systems (US$ 0.40 million)

40. The project will expand current initiatives and pilot cost effective integrated environmentally friendly systems for the processing phase of the coffee value chain. This will be achieved through matching grants for associated subprojects for upgrading and/or establishing six effluent control systems including water efficient eco-pulpers at washing stations (two in each target province) managed by farmer cooperatives or privately-owned stations. Prototypes could include organic separation and grey water treatment facilities at existing washing stations with existing depulping technology or a combination of these systems with improved ecopulpers, using lagoons, bio-digesters or composting. Partnerships with the farmer cooperatives or private companies will be established for the subprojects so they will participate in the acquisition or retrofitting of the infrastructure/equipment48.

41. A station typical station using a McKinnon pulping machine that processes 1,000 metric tons of cherry in a season requires as much as 2,000 m3 of water. Serious environmental harm is caused by the pollution from coffee washing station effluents. Coffee washing wastewater can produce huge amounts of pulp slurry with acidic pH levels, and very high levels of biochemical oxygen demand (BOD)49 Environmental impacts can be felt as much as 5 kilometers downstream causing fish kills, crop burns, and foul odors making these waters a hazard to people and livestock. The ecopulpers to be acquired and installed will have low water consumption (around 500 m3 per 1,000 metric tons of green coffee). Also the system to be implemented will allow for the recycling of water50. The project will target a reduction of 30% in the use of water from the CWS that will participate.

48 The criteria for involving privately-owned coffee washing stations will be included in the project implementation manual. 49 Biochemical oxygen demand. It is the amount of oxygen required for bacteria to digest the contamination load in a fixed time 50 According to Sihimbiro (2009), the demand for water to treat one ton of cherry is 10.6 cubic meters of recycled water if it is done partially, and to 4.5 cubic meters of recycled water if it is done completely. The R-SEA estimated that establishing a recycling system for water could reduce water consumption from 3,840,000 m3 (a projection for 2015) to 2,544,000 cubic meters when partial recycling is possible. With complete recycling the amount of water could be 1,080,000 cubic meters

42 42. The environmentally friendly system will include a three-step process to screen, filter, and treat the effluent prior to joining downstream ground waters. Diverting and screening the majority of pulp slurry removes the primary source of BOD early in the process to minimize contact between the wash water and the pulp. Afterwards, the pulp is composted and applied to horticulture crops and coffee plantations, increasing productivity. The effluents maintain safe pH and BOD levels so the water is kept clean enough for other agricultural and ecosystem uses.

43. Training workshops will be conducted for the operators of these washing stations for the adequate operation and maintenance of the environmentally friendly technologies for treatment of solid and liquid effluents, the promotion of organic compost use and other key issues related to coffee processing. This activity will provide lessons on impacts from different prototype systems or combined environmentally friendly technologies to create a realistic set of policies, standards and regulations in an appropriate time frame. In addition, by having proper wastewater treatments, it will respond to specific requirements of potentially specialty buyers51.

Standards and Regulations for the Treatment of Effluents in CWS (US$ 0.08 million)

44. The component will support the establishment of standards and regulations to promote environmentally sound water management and treatment by the coffee washing stations (CWS). A consultant will be in charge of defining and promoting the regulations that will be discussed and validated in a national workshop. 45. The regulations to be prepared under the coordination of MEEATU would comply with the Environmental Code (Law No. 1/010 of June 30, 2000) and other related existing legislation that already exist but have not been fully implemented as they lack the standards and regulations for compliance.

Training Program for Environmental and Social Standards (US$ 0.11 million)

46. The project will finance technical assistance, training, workshops and operational costs to finance a capacity-building program for relevant institutions, such as the Ministry of Environment, Ministry of Agriculture, ARFIC, InterCafé, and NGOs working in the coffee sector. The program will strengthen these institutions’ capacity to monitor the implementation of sustainable technologies and the enforcement of regulations and policies. The assistance will also facilitate these institutions’ participation in the East Africa Community (EAC) meetings on harmonized Environmental Norms and Standards for Coffee Washing Stations.

Component 3: Diversification of Livelihoods (US$0.41 million)

The objectives of this component are to promote improved livelihoods and additional income through increasing the market value of Burundi coffee (via certification) as well as piloting

51 It has been proven from other initiatives, that as producers observe the buyer’s commitments to purchase coffee from washing stations that have done environmentally friendly investments, it is expected that more CWS follow the lead (USAID/BAP, 2012).

43 ecotourism and agri-tourism in the three project provinces. This component would finance works, goods, technical assistance, workshops and training, matching grants for associated subprojects and operational costs for the following two activities.

Marketing and Certification (US$0.20 million)

47. The project will support a marketing study and action plan to be conducted by InterCafé to identify target markets for the region’s coffee, along with potentially suitable certification schemes (such as organic, shade grown, fair trade, high quality, etc). The study will add on previous studies and identify the costs and requirements of different certification options52, their financial and technical viability, and national and international experience with UTZ and Rainforest Alliance certifications obtained in the country53 and from other countries. The marketing study will consider the results and advances from the “Strategic Guide for Marketing Burundi Specialty Coffee” produced in 2009 under the PAIR USAID project. This Guide establishes concrete steps (building image, traceability and appellations, export preparedness, differentiation, cupping labs/training, certification, information communication technology, buyers tours, trade shows, relationship building with buyers, trade credit/access to financing, dissemination to broader groups) to initiate the specialty coffee marketing plan and which was addressed by the USAID’s BAP.

48. In addition, the project will promote and expand dialogue with international buyers to access high-value markets for the country’s specialty and high-end quality coffee. One example is the initial contacts that have been established to set up a partnership with the company Illy Café54. Illy Cafe is a very prestigious quality coffee company that usually pays directly to farmers 25% more than the international market price and offers as well extension services and marketing. For the company, Burundi is an interesting origin in terms of quality of the coffee. Coffee samples from different farmers were sent to Illy headquarters and 18 out of 24 samples were found satisfactory for their standards. Terms and conditions to define the level and scope of the

52 Some of the most common certifications are: organic, Fair Trade, Rainforest Alliance, Utz Kapeh or 4C certification. Each certification scheme has placed its main interest in different attributes concerning how the coffee is grown. The attributes however are all compatible (no inherent trade-offs) but they are all different and the compliance of one attribute does not automatically imply compliance with the others. For example, organic coffee needs to be produced without synthetic chemicals; fair trade coffee needs to be grown in accordance with social criteria, including adequate incomes for small farmers and plantation workers, and biodiversity-friendly coffee needs to be grown under shade, in systems which provide important habitat for species of conservation concern. In consequence, each schemes thus requires their own criteria to accomplish that main interest. For example, to be certified as biodiversity-friendly, coffee farms need to manage the shade trees to maintain (i) a sufficiently high shade tree density; (ii) high shade tree species diversity; and (iii) a sufficiently tall and vertically heterogeneous structure of shade canopy. Additional criteria can also involve: (i) conservation of remaining natural forest patches; (ii) maintaining forested corridors along streams; (iii) limiting the extraction of wild fauna and flora; (iv) highly restricted agrochemical use; and (v) proper solid and liquid waste management (Ledeq, 2000). 53 The process of these certifications has started for some CWSs under the initiative of private companies such as Webcor and Sucafina. 54 Illy Cafe is one of the most prestigious quality coffee companies in the World. Illy usually pays directly to farmers 25% more than the international market price and offers as well extension services and marketing. For the company, Burundi is an interesting origin in terms of quality of the coffee. Coffee samples from different farmers were sent to Illy headquarters and 18 out of 24 samples were found satisfactory for their standards.

44 partnership will be established during the project’s implementation. To promote dialogue and future businesses, the project will co-finance the participation of the country in the Cup of Excellence® program for future years.

49. Following the marketing study, the project will finance initial certification costs for three farmer cooperatives and washing stations supported under the previous components. These will be chosen based on performance. The certification process will promote or strengthen increases in the adoption of environmentally friendly management practices. The costs to be financed may include, as needed, an improvement of the traceability process that helps maintain the coffee lot’s identity throughout the value chain55. The detailed activities to be conducted for the certification will be agreed with the stakeholders once the specific certification is chosen.

50. The project team together with the stakeholders will consider the possibility of establishing a revolving fund with a percentage of the revenues generated from the sales of the coffee. This fund would be used to cover the re-certification and auditing costs. The process to be financed by the project will consider the lessons learned from previous experiences in the country as well as abroad and it will promote local capacity in certification. The pilots to be supported will help generate evidence about the circumstances in which certification processes lead to environmental and social benefits. It will also contribute to raise awareness in the region about the process, its costs and benefits

51. The box below summarizes the study conducted by the BAP regarding the impact of the UTZ certification.

55 Traceability requires the maintenance of coffee lot’s identity through the entire value chain, including depulping, fermentation, washing, soaking, drying, and dry milling. There are different systems for assuring traceability, but most commonly lots are tagged with cards indicating a number and date. This enables coffee traceability from farm to point of sale. Not only does traceability enable both buyers and sellers to isolate higher quality lots and price them accordingly, but it also allows for quality control by isolating defective lots and addressing the defects more easily.

45 Impact of certification, case study conducted by the Business Agribusiness Program of the UTZ certification for farmers at a washing station in the Muyinga Province (USAID/BAP, 2012)

In collaboration with the University of Ngozi, BAP conducted a case study to document the impact of certification on farmers serving the Kagombé washing station. The objective of the study was to determine if certification contributes positively to the reduction of year on year cyclicity and an improvement in overall productivity. The study was also designed to estimate the impact of certification on farmer revenues and family livelihood and to assess their attitudes toward a wide range of factors including: their socio‐economic well being, capacity and willingness to reinvest, their view on agronomic risk and their confidence that certification has been the key factor in improving their lives.

Comparing the Kagombé and the Rugerero washing stations, the study was able to determine that coffee production was 70% higher at the Kagombé and that the amplitude of year on year cyclicity was reduced at Kagombé. In addition, a greater percentage of farmers in the Kagombé draw zone adopted best production practices for coffee and that these dynamics started after the UTZ certification activities started. Kagombé farmers increased their revenues due to certification over four successive seasons while the farmers from Rugerero did not. Finally, since certification the members of the Kagombé cooperative have actively been recruiting new members (since 2008, the number of members has increased by 176%) and assisting them in organizing themselves in production blocks.

Agri-tourism and ecotourism pilots (US$0.21 million) 52. The project will promote the piloting of a community based agri-tourism initiative organized by farmers’ cooperatives in selected coffee farms and washing stations. Two pilot subprojects will be awarded to applicants (one in Bubanza Province and another in Muyinga Province) for an initiative that will bring an additional source of income and livelihood diversification. The tourists will have the opportunity to visit a “coffee route” and participate, learn and appreciate the different steps of the coffee value chain (production, processing and commercialization) and become acquainted with the particular brand of coffee which will they will be able to sample. The activity will be implemented by INTERCAFE with the support from the national tourism agency. 53. The agri-tourism pilots will be supported as matching grants for associated subprojects following the same procedures as the SLWM and shade coffee subprojects in which the communities, with the support of the PSP, will present a proposal and action plan for the development of the initiative. The action plan will need to provide details about the specific activities in terms of: (i) investments, equipment and initial operational costs to adjust the farms and routes to receive visitors; (ii) training for the management of a tourism local enterprise; and (iii) design and implementation of a marketing and communication campaign to reach the national tourist population. 54. This activity will also support an ecotourism pilot in the Bururi Forest Nature Reserve. The Bururi Reserve offers several attractions in terms of: (i) observation of Chimpanzees Pan troglodytes and other fauna in the wild; (ii) a diverse landscape (rock formations, watersheds, and vegetation); (iii) Bururi’s thermal waters; (iv) Siguvyaye River Falls; and (v) cultural attractions (ethnic dances, traditional ceremonies, traditional food, etc). The pilot will be managed by the communities and Park staff and will be monitored to derive lessons. The main investments to be included in this activity are:

46  Opening of tourist trails. Approximately 17 km of trails will be opened to facilitate the flow of tourists to the reserve, while about 11 km of existing trails will be rehabilitated.  Habituation of local Chimpanzees. Two teams of 4 people each will be hired to track the chimpanzees on a daily basis and get them accustomed to human presence. While doing this, the teams will also be able to monitor the daily activities in the reserve.  Training to tourist guides (4) selected by the community.  Creation of a campsite with the necessary equipment to receive approximately 50 visitors, in addition to a sanitation and water system.  A communication and marketing plan will be developed and implemented in order to offer Bururi as an important community based ecotourism destination. The plan will aim to develop marketing strategies to increase tourism-related services in the Bururi Reserve and its surroundings in order to improve its contribution to the development of local populations. It will be developed on the basis of knowledge of products offered and target markets (demand), taking into account input from stakeholders both locally, nationally and internationally. It will generally include: marketing activities (advertisements), promotion, communication strategies and public relations, distribution strategies, awareness campaigns for the local market, and the production and use of marketing tools.

Component 4: Knowledge and Learning (US$0.38 million)

55. The component will finance operational costs, services and technical assistance for the project’s management, the implementation of the project’s monitoring and evaluation (M&E) including an Impact Evaluation as well as communication activities. Coordination Team (US$ 0.21 million)

56. The existing Project Coordination Unit (PCU) of PRODEMA will manage the project. The project will finance the employment of an additional full time accountant and an expert in sustainable land management to be recruited for a partial period of time. Monitoring and Impact Evaluation (US$ 0.12 million)

57. Considering that the project will pilot several initiatives, the project will include the elaboration of an impact evaluation (IE). Based on robust evaluation methodologies, the IE will measure the causal impact of the project’s key outcomes by comparing outcomes between participants and non-participants (counterfactual). The IE will analyze several variables, specifically: biodiversity, coffee productivity and economic returns from the coffee farm. The IE methodology will seek, where feasible, to obtain statistically significant results. The ToRs for the IE will be prepared by the GoB with the WB’s support following the project’s negotiations (Annex 7).

47 58. The project’s M&E and IE will be used to reinforce and build a learning platform for informing adaptive project management, with possibilities of replication inside and outside the project. Communications (US$ 0.05 million) 59. A communication strategy will be developed for the project, building on the PRODEMA communication strategy. This strategy will continue the dissemination campaign developed for the results of the 2011 R-SEA and will promote dialogue with other similar initiatives, awareness campaigns regarding shade grown coffee, SLWM practices, and related topics. During project preparation a consultant was hired to create and execute a weekly radio program on Shade Grown Coffee. At Radio ISANGANIRO different programs have been emitted around this theme, including round tables with coffee specialists to talk about shade grown coffee, intercropping, sustainable land management, and relevant aspects of the proposed project. The program, broadcasted several times, was aimed towards helping raise awareness among coffee farmers and other coffee stakeholders regarding the benefits of this type of cultivation.

APPENDIX 1: SHADE GROWN COFFEE

1. In many Latin American countries and parts of Africa (such as Ethiopia), coffee is traditionally grown beneath a canopy of native or planted shade trees. Cultivation of coffee under such shade typically provides important benefits to the environment as well to the farmer. However, in Burundi, the overwhelming majority of coffee is cultivated as a monoculture in the open sun, with no shade cover nor intercropping with other plant species. This is a historical legacy: Burundi’s colonial authorities wanted farmers to focus exclusively on growing coffee (a strategically important export crop), so they prohibited the intercropping of other species in coffee plantations. As identified in the 2010 R-SEA, the lack of shade cover in coffee production has already caused significant damage to various soil quality parameters—including topsoil erosion—leading to land degradation, reduced farm productivity, and biodiversity loss.

2. In order to address this problem and improve the sustainability of coffee landscapes in selected areas of Burundi, the project will promote a shade grown coffee program that will aim to preserve and enhance key ecosystem services found in shade coffee farms and their surrounding landscape. Shade-grown coffee will provide significant environmental benefits (described below) as well as economic opportunities, not only for the coffee sector by commercializing a high quality biodiversity friendly coffee but also in terms of diversification of sources of income and food security.

3. The sustainable shade-grown coffee system to be supported by the project promotes not only coffee cultivation but a polyculture and intercropping system that mixes coffee plantations with various types of trees and other plants (like maize and beans). Such systems help to increase on-farm biological diversity, food security, and resilience to climate and economic shocks.

Benefits of shade grown coffee

48 4. In contrast to a sun coffee monoculture, a shade coffee polyculture results in a more efficient use of available agricultural resources (land, vertical space, sunlight, soil, and water), thereby improving livelihoods and ensuring (even in a down cycle year for coffee production) that farmers have an income alternative. A polyculture would also contribute to the food security of the participant households. A polyculture has the potential to generate additional services besides coffee production such as timber, fruit production, fuelwood, and medicinal plants, as well as shelter for animals such as birds and insects.

5. Shade-grown coffee helps moderate climate change and protects coffee plants during extreme weather. The trees within a shade-grown coffee plantation help to mitigate the effects of drought and extreme heat by keeping a moist, cool microclimate beneath the canopy. Also, the shade trees protect against harsh winds, excessive light, soil erosion and land degradation. Coffee production undertaken in an environmentally sustainable manner, including practices such as mulching and shade cultivation, is one of the most important strategies Burundi can develop to fight against soil erosion56. The table below summarizes some of the identified benefits of shade in coffee plantations. Table No. 5. Benefits of Shade-grown Coffee Depending on quality and quantity of shade trees, tree pruning, soil type, climatic conditions of the area, among others, shade in coffee areas present the following benefits:

Coffee Yields. In a well-managed shade coffee system, coffee production longer than 5 years is higher than that obtained without shading, with smaller yearly fluctuations;

Coffee Quality. Shade cultivation can have positive effects on the quality of coffee by delaying and synchronizing fresh berry ripening. Longer periods of ripening result in heavier cherries;

Coffee Health. Even though the incidence of certain coffee diseases increases with shading, others have a lower prevalence under shade, including rust and anthracnose, both of which predominate in Burundi;

Weed Control. The shade can reduce weed populations and change the weed floristic composition towards less aggressive, slow growing species;

Reduced Input Costs. Many species of shade trees drop leaves that provide a high-quality mulch free of charge, therefore avoiding the labor and other costs of bringing in mulch from elsewhere.

Soil Fertility. The pruning of shade trees increases organic soil matter from falling leaves and residues. This increase in soil organic matter is accompanied by a supply of nutrients, especially nitrogen that increases soil fertility. When the shade tree is a legume, fixing symbiotic nitrogen can further increase the amount of nitrogen applied to the soil;

Soil Structure. Trees in agroforestry systems improve soil physical properties such as better soil aggregations, lower bulk density, and increased soil porosity, which in turn, lead to increased water infiltration, larger water conductivity, and larger water holding capacity.

56 Coffee has been demonstrated to be one of the least erosive crops grown in the region. Using data from neighboring Rwanda (with almost identical agro-ecological conditions and cropping systems to Burundi’s) that estimate soil loss (in tons per hectare) by crop type, it was demonstrated that coffee is the least erosive crop among the ones cultivated in the region. Considering 12 different crops, coffee had an average of soil loss of 0.3 tons/ha, followed by banana at 1.5 tons/ha (R-SEA, 2011).

49 Erosion Control. Shade trees serve to reduce erosion by intercepting raindrops. Also, their fallen leaves produce a mulch which retards the flow of water and promote infiltration;

Drought Resilience. Shade cultivation reduces the coffee crop’s evapotranspiration, thus reducing water stress during the dry season. Also, the leaves and branches from shade trees generate mulch and organic carbon. All these factors help to maintain higher levels of soil moisture than are found in sun coffee cultivation;

Climate Resilience. The shade of coffee trees can reduce the high or low extreme temperatures from 2 to 5 ° C. Without shading, the coffee is threatened by climate change affecting its quantity and quality. Also,shade trees ameliorate microclimatic conditions for understory crops, increasing growth and productivity. The resulting modifications of microclimatic conditions include decreased wind speed and temperature fluctuations, iNcreased relative humidity, and changes in aerodynamic roughness of the cropped area, all of which tend to be beneficial to the coffee crop;

Climate Change Mitigation. Shade trees capture and store CO2 in their from the production of biomass;

Biodiversity Conservation. Shade-grown coffee provides important habitats for other forest-based organisms, including birds and beneficial insects. Conservation of biodiversity is optimized if the polyculture includes native tree species, with a diverse overall species mix and a variety of different tree heights;

Income Diversification. The shade provides a diversified source of income (for example with fruit and timber trees) and thus more economic stability in a scenario with fluctuating international coffee prices;

Food Security. Some coffee shade species produce substantial quantities of edible fruits and nuts, while beans or other low-growing crops can be inter-planted within shaded coffee plantations.

Sources: - Report Seminar “Developpement des Systemes Durables a Base de Cafe Et Adaptes aux Changements Climatiques”. August 2012. - Ernesto Illy Foundation. “Sustainable Coffee Farming and Processing Integrated approach”. II Edition. Master in Coffee Economics and Sciences. 2012. - Moges Abebe, Yitebitu Moges. “The impact of overstorey trees on sustainable coffee (Coffea arabica L.) production in Southern Ethiopia”. The Faculty of Science of the Leibniz Universität Hanover. Dissertation Doctor of Natural Sciences. 2012.

6. A study conducted by the Smithsonian Migratory Bird Center (SMBC) reviewed more than 50 studies undertaken on shade-grown coffee farms in different regions in the world and over the past 15 years. The study concludes that “shade-grown coffee production is the next best thing to a natural forest, and put to rest any arguments about the sustainability of a sun-coffee system.” As explained by the report, in study after study, shade-grown coffee farms outshone sun-grown coffee farms with increased numbers and species of birds as well as and improved bird habitat, soil protection/erosion control, carbon sequestration, natural pest control and improved pollination. For example, the SMBC study recalls that in an eight year study in Colombia, shade- grown coffee lost 0.24 metric tons of soil per hectare per year, compared to a hay field’s 23 metric tons and a corn field’s 860 metric tons being lost per hectare per year. Natural forests erosion rates can range between 0.03 and 0.3 metric tons per hectare per year, making shade coffee comparable to these natural systems. Also, in a study of shade vs. sun coffee comparisons in Guatemala, overall bird abundance and diversity were 30% and 15% greater, respectively, in shaded farms than sun farms.

50 7. While sun-grown systems can sometimes have higher yields, the shaded farms substantially outperform them in sustainability measurements, with the trees providing an array of ecological services that offer both direct and indirect “income/pay-back” to farmers and the environment. The “hidden yield” in the shade vs. sun comparison is that of the non-coffee products and opportunities coming from the shaded system. In addition to eco-tourism on several shade coffee farms, firewood, fruits, building materials and medicinal plants are all resources harvested to varying degrees by shade coffee farmers57. Shade coffee can also reduce the amount of fertilizer required. The SMBC study points that nitrogen-fixing trees in shade-grown coffee can put up to 100 kg of nitrogen per hectare per year into the soil, potentially reducing the amount of fertilizer a farmer would have to apply by 25 to 30%. Furthermore, the higher yields that are sometimes documented from sun coffee may not last, if the soils become degraded due to erosion and loss of organic matter. On the other hand and as intended under this project, coffee farmers can often improve yields on a sustainable basis by adding and managing shade trees, as well as through terracing, composting and integrated pest management58. The impact evaluation to be conducted for the project will evaluate the impact of the shade grown in Burundi by the project in several variables: productivity, biodiversity and economic returns.

Types of shade coffee systems

8. The figure below shows several scenarios of coffee plantations with the spectrum of levels of shade and shade richness that can be grown with coffee. This spectrum ranges from traditional cultivation, which is the most complex, most similar to pristine forest and the one with the least environmental impact on the original ecosystem, to the plantations in which coffee is grown on its own and in direct sunlight. This last scenario is the least complex and the one with the highest adverse environmental impact.

57 Smithsonian Migratory Bird Center, 2010. 58 PIF for the project Mainstreaming biodiversity in the coffee sector in Colombia. UNDP/GEF. 2008.

51

Source: Sciencedirect.com. José A Gobbi Is biodiversity-friendly coffee financially viable? An analysis of five different coffee production systems in western El Salvador. Center of Latin American Studies.

9. The selection of species and density of the shade trees depends on the specific characteristics of the region. This selection needs to address the different positive interactions that are present when combining coffee plantations with shade trees as well as potential negative interactions. The positive interactions include improvement of soil fertility through addition of leaf litter, natural weed and pest management, modification of microclimate, habitat for wildlife, and conservation of soil, water, and biodiversity through the protective role of trees. On the other hand, the negative interactions might involve competition for light, water, and nutrients, allelopathy, harboring crop pests, and the risk of invasiveness of introduced agroforestry species59.

10. Successful agroforestry shade coffee systems will be the ones in which positive interactions outweigh the negative ones. The selection of shade trees needs to consider not only the agroforestry setting that ensures higher coffee yield, but also consider the potential economic

59 Moges Abebe, Yitebitu. The impact of overstorey trees on sustainable coffee (Coffea arabica L.) production in Southern Ethiopia. 2012.

52 value of the shade (commonly managed in a largely subsistence-focused manner) as well as its biodiversity conservation value and carbon sequestration potential.

APPENDIX 2: BIODIVERSITY IN THE BURURI FOREST NATURE RESERVE

11. The Bururi Forest Nature Reserve is located in southwestern Burundi (3o56’20N, 29o35’50E), within Bururi Province and close to the town of Bururi. This Protected Area encompasses about 2,600 hectares (ha), of which about 2,000 ha are under natural vegetation, mainly moist Afromontane forest; most of the remainder comprises old plantations of pines and other non-native trees. It lies at an altitude ranging between 1600 and 2300 meters and is at the extreme southern edge of the Congo-Nile divide.

12. Although not large by African standards, the Bururi Forest Nature Reserve is nonetheless of global biodiversity significance, owing to its location at the southern edge of the Albertine Rift Eco-region and the concentration of globally threatened species, some found nowhere else. The Albertine Rift is renowned for its high diversity of endemic plant and animal species; it forms part of the Eastern Afromontane Biodiversity Hotspot, one of only 8 such hotspots (centers of threatened biodiversity) in sub-Saharan Africa60. The Bururi Reserve is also unusually rich biologically because it is situated at a biogeographic crossroads: In addition to harboring many of the typical species of the Albertine Rift Afromontane forests, the reserve contains elements associated with the Zambezian region to the south, the drier savanna areas to the east, and the lowland evergreen forests of the Congo Basin.

13. The Bururi Reserve still contains viable populations of many plant and animal species that are endemic to the Albertine Rift Eco-region (which extends into Rwanda, extreme western Uganda, and extreme northeastern Democratic Republic of Congo). Many of these species are globally threatened, including overexploited medicinal plants such as Zanthoxyllum gilleti. The reserve is a stronghold for the globally threatened Kungwe Apalis Apalis argentea and many other species of Albertine Rift forest birds; as such, it has been designated as an Important Bird Area by BirdLife International61. Moreover, the Bururi Reserve contains species that have not been found anywhere else (not even in the Kibira National Park to the north); these include the Bururi Forest Shrew Myosorex bururiensis, Bururi Long-fingered Frog Cardioglossa cyaneospila (re-discovered in 2011 after being feared extinct), and several plant species new to science that have yet to be officially named.

14. The largest wild mammal now found in the Bururi Reserve is the globally endangered Chimpanzee Pan troglodytes, which numbers about 65 animals in several troops that are frequently seen by local residents. These Chimpanzees are not hunted by local people and are thus not overly shy. The project would contract trained local rangers to carefully monitor two Chimpanzee troops on a daily basis, with the expectation that these animals would become habituated to humans within two years or so. Habituated Chimpanzees could become an

60 Toward Africa’s Green Future: World Bank Support in Biodiversity Conservation, World Bank 2012. 61 Important Bird Areas in Africa and Associated Islands: Priority Sites for Conservation, BirdLife International 2001

53 important local tourism asset, especially since the Bururi Forest also has other tourist attractions (great scenery, hot springs, many birds, etc.) and is adjacent to a paved highway, with good quality hotels nearby. Similar initiatives with guided tracking of Chimpanzees (as well as Mountain Gorillas) have proven to be highly successful in Rwanda.

15. About 23,000 people, including a small indigenous Batwa community, live in the general vicinity of the Bururi Reserve (including Bururi town). Some local residents rely upon natural resources harvested within or near the reserve for their livelihoods. Given the local scarcity of land and the increasing profitability of many crops (including coffee), there is a continual risk of agricultural encroachment within this protected area. The Bururi Reserve has a highly motivated team of INECN staff in charge of its protection and management; however, they need additional support to ensure the reserve’s effective on-the-ground protection and management. Accordingly, the project will include support for improving the reserve’s management and to further develop eco-tourism (including Chimpanzee tracking). This support will include the development of sustainable livelihoods for local residents, as outlined in the Process Framework; some of this assistance will specifically focus on the local Batwa community (as outlined in the Indigenous Peoples Plan).

54 Annex 3: Implementation Arrangements BURUNDI: Sustainable Coffee Landscape

I. Project Institutional and Implementation Arrangements

A. Institutional arrangements

1. The Ministry of Agriculture and Livestock (MINAGRIE) has overall responsibility for the project’s implementation. Implementation will be carried out through the project coordination unit (PCU) already established for PRODEMA. 2. Through Memoranda of Understanding (MoU), the implementation of some of the main activities will be responsibility of partner organizations working in collaboration with MINAGRIE.

 The Ministry of Water, Environment, Land and Urban Planning (MEEATU) will be in charge of the activities to promote regulatory aspects towards environmentally friendly coffee processing.

 InterCafe, an autonomous professional organization created for consultation and decision-making regarding the coffee sector, will be directly involved in the implementation of the sustainable shade-grown coffee production program, the activities related to coffee certification and marketing, SLWM practices, the piloting of agri- tourism initiatives in coffee farms and the communication strategy..

 ISABU, a key research and development agency for the agricultural sector, will support the research activities towards the development of the Manual for Shade-Grown Coffee cultivation.

 INECN, the agency responsible for the management of national parks and nature reserves, will be in charge of the activities involving the Bururi Forest Nature Reserve.

 ARFIC, the public enterprise that represents the GoB in the coffee sector, will support the training program regarding environmental and social standards at the coffee washing stations. 3. The MoUs will clarify that activities pertaining to procurement or selection of consultants are under direct handling and responsibility of PRODEMA. 4. Governance and advisory arrangements. To ensure intersectoral coordination, sharing of experiences and lessons learned, a technical monitoring committee was created in November 2012 with members from all the partners in implementation, farmers’ organizations and NGOs The committee consists of representatives from MINAGRIE, the General Directorate for the Environment and Forestry, INECN, ARFIC, ISABU, InterCafe, the National Coffee Growers Association (CNAC), General Directorate of the National Tourism Office, the Organization for the Defense of the Environment in Burundi (ODEB) and PRODEMA. The technical committee will meet at least twice a year and will be in charge of: (i) reviewing the proposed Annual Work plans and budgets for the project, reviewing the draft annual implementation and audit reports, as

55 well as the Procurement Plan prepared by the PCU; and, (ii) identifying necessary project adjustments based on monitoring and evaluation results. 5. In addition, the project will receive guidance from the Project Steering Committee (PSC) established for PRODEMA project. The PSC is headed by MINAGRIE, with membership composed of high-ranking officials from MINAGRIE, MEEATU, the Ministry of Decentralization and Communal Development (MDDC), the Ministry of Commerce, Industry and Tourism (MINICOMT), and other key ministries, the Second Vice Presidency and related agencies. ISABU and the Project Coordinator are non-voting members. The PSC will meet at least once a year and will be in charge of: (i) overseeing overall implementation and performance of the Project; and (ii) providing policy guidance. 6. The PSC will extend its responsibilities to the proposed GEF project that is mainly to decide on major strategic orientations for project implementation and related execution modalities. It will be responsible for vetting project impacts based on the results of M&E activities. It will approve annual work plans and budgets and ensure that they are aligned with the PDO. The PSC will organize at least one annual meeting with donor representatives to ensure adequate coordination of rural sector development activities. B. Implementation arrangements

7. Project coordination unit and decentralized implementation structure. The project coordination unit (PCU) will be the same as PRODEMA, given the complementarities between the two projects. This was approved during project preparation by MINAGRIE and confirmed with the letter Ref. 710/3330/2012 signed the 21st of September by the Minister, Eng. Odette Kayitesi. The PCU will be responsible for the overall technical and financial implementation of project activities. This will require the supervision of the MoU established with the partner agencies in order to conduct each specific component. The PCU will be responsible for procurement, financial management, M&E, mitigation of potential negative social and environmental impacts, and communication about project implementation and results. The proposed project will strengthen the existent PCU, composed of a project coordinator and an experienced team of technicians, by adding a new accountant and a sustainable land management specialist. 8. The project will build on PRODEMA’s decentralized structure. The activities at the local levels would be implemented through the three decentralized Inter-Provincial Coordination Units (IPCUs) established for PRODEMA and located in each of the provinces. The IPCUs would be in charge of field coordination, guidance, and supervision of project activities. The IPCUs are located in the following towns: (i) Makamba in the but also in charge of the Bururi province; (ii) Muramvya in the Muramvya province but also in charge of the Bubanza Province; and (iii) Muyinga in the province of the same name. The IPCUs will coordinate sector activities within the project to ensure that they are implemented effectively and in accordance with approved work plans and budgets. 9. The IPCUs are headed by an inter-provincial coordinator and staffed by an M&E officer, an agricultural/livestock officer, and a secretary/accountant. The coordinators and their teams will oversee and monitor implementation of all project activities in their respective provinces. In addition to serving as the project’s representatives in the provinces, they will be in charge at the

56 provincial level of coordination, administration, financial management, and procurement, as well as the collection, processing, and reporting of M&E data. 10. Implementation arrangements for matching grants for associated subprojects. Private Sector Providers (PSPs) will be recruited on a competitive basis to help Producer Organizations (POs: mainly farmer groups, associations, and cooperatives, as well as other collective organizations constituted of around 30 households) choose their priority investments and prepare plans and financing requests for the SLWM, shade coffee, coffee effluent control systems, sustainable livelihoods around Bururi Forest Reserve and agri-tourism matching grants for associated subprojects. 11. The PSPs already recruited for PRODEMA are specialized local agencies and consulting firms that either have the necessary skills or have sufficient potential and interest to be trained by the project. They also have operational offices at the communal level from which they help the process and evaluate the applications. The PCU will determine if new PSPs will need to be recruited based on the nature of the subprojects to be financed by the GEF project (SLWM, shade coffee, effluent control systems, sustainable livelihoods and agri-tourism). Information exchange and capacity building for themes related to the new project will be organized for service providers. 12. The project will build on PRODEMA’s cycle of preparation and performance of subprojects. The cycle includes the following phases: (i) Awareness and information campaigns and meetings in each target area to inform about the project and its characteristics; (ii) Update existent inventory of eligible POs, including the category to which they belong (cooperative, association, women’s group, and so on), the nature of their activities, their structure and staffing/membership, assessment of strengths and weaknesses and other pertinent information; (iii) establishment of management committees; (iv) identification of subprojects; (v) preparation of subprojects; (vi) field visits to assess relevance and sustainability of the subprojects; (vii) submission of funding application with all the information necessary to enable decision-making bodies to decide on the project’s eligibility, technical, institutional, environmental viability as well as its management and sustainability; (viii) environmental assessment; (ix) approval by committee; (x) signing of agreements by the PCU coordinator; (xi) transfer of funds and launching ceremony; (xiii) training workshop covering financial, procurement, monitoring and reporting aspects; (xiv) implementation; (xv) monitoring; (xvi) completion of subproject; (xvii) evaluation of effectiveness. 13. The PSPs will work with interested POs through participatory diagnostic meetings and in other ways to help them choose their priority investments and prepare sub-project plans and financing requests. They will work closely with DPAEs (decentralized units of MINAGRIE) to monitor sub-project processing and implementation. Liaison with DPAEs will be established through extensive dissemination of all information and data pertaining to project implementation, thus helping DPAEs to deliver on their core public responsibilities, particularly concerning planning and monitoring and evaluation of activities in the rural sector. 14. Matching grants for associated subprojects approval. The subprojects for SLWM, shade coffee, coffee effluent control systems, sustainable livelihoods around Bururi Forest Reserve and agri-tourism developed by the POs will be approved at the communal level for amounts below US$15,000 and at the communal and provincial level for amounts from US$15,000 to

57 US$30,000. For that purpose, the committees already utilized by PRODEMA, the Communal Approval Committees (CACs) and the Provincial Approval Committees (PACs) will support the proposed project. The committees are composed of government officials, and representatives of professional and non-governmental organizations (NGOs). Training will be offered to these committees in order to become familiar with the characteristics of the new project and the criteria for the SLWM, shade coffee and agri-tourism subprojects. 15. The PCU will ensure that the PSPs and approval bodies (the Provincial and Communal Approval Committees) comply with the approved screening, vetting, and approval rules. Criteria for approving sub-projects will be guided by the following: (i) activities pertinent to project objectives; (ii) participation of beneficiaries (ownership by beneficiaries, direct participation and accountability); (iii) equity between genres, ensuring participation of women, youth and other disadvantaged; (iv) synergy (avoiding duplication); (v) total cost and average cost per benefiting member; (vi) expected benefits (social and environmental); (vii) likely sustainability, including the viability of the sub-project management and maintenance plans; (viii) simplicity and transparency of procedures; (ix) appropriate technology; among others. As part of the proposal, the beneficiaries will need to prepare a simple procurement, business and financing plans. 16. POs wishing to participate in subproject activities will have to be legally constituted in accordance with Burundi’s law. Also, the POs have to demonstrate that they have enough land for the subproject and provide the status of the land (through an official notification countersigned by the local authority). POs with their own land or land rented for a specific period (“land under location status”) are eligible as long as the terms of location is sufficient to cover the period of the subproject. The CBOs (Community Based Organizations which are of bigger size than POs with around more than 100 members), can conduct their subprojects on Communal land, after a written authorization of the Communal Authority (the Communal Administrator). 17. Deemed non-compliant requests will be returned to the beneficiaries for review and possible resubmission. In case the total amount of eligible funding requests exceed the budget allocation, sub-projects will be ranked in order of priority by the approval committees based on the following criteria among others: number of beneficiaries, degree of priority, cost/benefit, synergy with other subprojects underway or planned, environmental and social considerations.

II. Financial Management, Disbursements and Procurement

A. Financial management

18. As part of the Burundi Sustainable Coffee Production Project, a Financial Management (FM) assessment was carried out at the Coordinating Unit that is implementing the ongoing Agro-pastoral Productivity and Market Development Project (PRODEMA). The assessment was conducted in line with the FM Practices Manual issued by the Financial Management Sector Board in March 2010. The objective of the financial management assessment is to determine whether this implementing unit, the entity that will be implementing the new projects has acceptable financial management arrangements in place. The results were that PRODEMA has adequate financial management arrangements that satisfy the World Bank’s minimum

58 requirements under OP/BP10.02. The overall project financial management residual risk was assessed to be moderate. Below is the summary of the assessment 19. The unit has good experience in implementing IDA financed projects and is currently the implementing agency of PRODEMA, it was also the implementing unit of PRASAB which was executed in a satisfactory manner. Unaudited Interim Financial Reports (IFRs) for the PRODEMA are submitted on time, reviewed and found to be satisfactory. The external auditors issued a clean audit report for the year ended June, 2011 and the management letter from the external auditors did not raise any major issues; there are no overdue audit reports and interim financial reports from this entity. The proposed project will utilize the same IFRs. 20. The project maintains proper books of accounts which include a cash book, ledgers, journal vouchers and a contract register through the suitable Project software “TOMPRO”. They prepare the necessary records and books of accounts which shall adequately identify, in accordance with accepted international accounting standards and practices, the goods and services financed out of the proceeds of the Grant. It is expected that the accounting system will be used for the implementation of this new project. 21. Dated covenants. The recipient shall recruit an accountant and an expert in sustainable land management no later than three months after effectiveness. The accountant will work full time while the SLM expert will be recruited for a partial period of time. In addition, the existing accounting software used by PRODEMA will be customized to take into consideration the new project no later than three months after effectiveness. 22. The conclusion of the assessment is that, because of the context, the project has residual risk rating of substantial. The following risk identification worksheet summarizes the significant risks with the corresponding mitigating measures.

RISK ASSESSMENT AND MITIGATION

Table No. 6 Risk3 Risk Risk Mitigating Measures Conditions Risk after Rating Incorporated into Project Design for mitigation Effectiveness measure (Y/N) Inherent risk S S Country level H The government is committed to a N H reform program that includes the According to questions 13 and 16 strengthening of the PFM, An ongoing of the CPIA, Burundi is a high risk IDA-financed PFM Reform project is country from the fiduciary being implemented but is unlikely to perspective. yield results quickly enough to impact the proposed project. Use of IDA FM The recent PEFA report outlined procedures is required for this project. PFM weaknesses at central and decentralized government levels as well as sector ministries level in term of governance and public funds management. Entity level S A ring-fenced approach similar to the N S The assessment of the key ongoing PRODEMA will be used;

59 Risk3 Risk Risk Mitigating Measures Conditions Risk after Rating Incorporated into Project Design for mitigation Effectiveness measure (Y/N) ministries during the PEFA and Relying on a dedicated FM team at the particularly the Ministry of Finance PCU and use of IDA FM requirements as well as the Ministry of is critical for the mitigation of fiduciary Agriculture revealed internal risk of this project; the adoption of a control weaknesses and weak FM procedures manual will mitigate fiduciary environment. However, internal control weaknesses. the ongoing project PRODEMA is receiving full support from the Ministry. Project level: M An additional accountant will be N M The inherent risks are the recruited to work exclusively on this following: funds may not be used project. Project fiduciary team will for the intended purposes; delays in continue to receive training on world the reporting system and auditing. bank fiduciary procedures.

Control Risk M M Budgeting: M Annual work plan and budget required N M (i) Weak capacity at the each year and approved by the steering implementing entities to prepare committee. The project Financial and submit accurate work program Procedures Manual within the PIM will and budget; (ii) weak budgetary define the arrangements for budgetary execution and control; (iii) weak control and the requirements for monitoring leading to some overrun budgeting revisions. IFR will provide expenditures information on budgetary control and analysis of variances between actual and budget in a quarterly basis Accounting: M (i) The project will adopt the OHADA N M A computerized accounting system accounting system. Accounting namely TOMPRO is in place; it is a procedures will be documented in the multi-project. There could be a risk manual of procedures (ii) The FM that the accounting team may not be functions will be carried out by able to utilize the whole capacity of qualified consultants (individuals); one this software. additional accountant to be recruited on competitive basis; the existing software will be customized to take into consideration the need for this new project. Internal Control: M Revision and adoption of a FM N M Internal control system may be Procedures Manual (as part of the weak due to insufficient safeguards project implementation manual) and and controls which can result in training on the use of the manual by the misuse of funds and impact the consultant recruited for this purpose. implementation of the project. Development of simplified guidelines Project activities at the decentralize for the decentralized level level may not be fully documented.

Funds Flow: M-I (i) Payment requests will be approved N (i) Risk of misused by the FM Manager prior to funds; and (ii) delays in disbursement of funds to contractors or disbursements of funds to IA and consultants beneficiaries. (ii) The ToRs of the External Auditors

60 Risk3 Risk Risk Mitigating Measures Conditions Risk after Rating Incorporated into Project Design for mitigation Effectiveness measure (Y/N) include physical verification of goods, services acquired. (iii) Additional accountant will be recruited no later than three months after effectiveness and capacity will be strengthened during project implementation period.

Financial Reporting M A computerized accounting system N M will be used to prepare the required Inaccurate and delay in submission IFRs in a quarterly basis. of IFR to the WB due to delays IFR and financial statements formats from IAs particularly from the similar to the ongoing operation will be decentralized level. discussed and agreed during negotiations;

Auditing: M The project’s institutional N M arrangements allow for the appointment The national audit capacity is weak of adequate external auditors and not reliable to prepare the (independent auditors), the ToRs will external audit report. Delay in include physical verification and submission of audit report or specific report on finding of physical qualified opinion and delays in the controls of goods, and services implementation of audit reports acquired or delivered. recommendations. Annual auditing arrangements will be carried out during the project implementation period in accordance with ISA.

Governance and Accountability M (i) The TOR of the external auditor will N M Possibility of circumventing the comprise a specific chapter on internal control system with corruption auditing (ii) FM procedures colluding practices as bribes, abuse manual (within the PIM) approved of administrative positions, mis- before project effectiveness; (iii) procurement etc, is a critical issue. Robust FM arrangements (qualified individual FM staff recruited under ToRs acceptable to IDA, quarterly IFR including budget execution and monitoring; (iv) Measures to improve transparency such as providing information on the project status to the public, and to encourage participation of civil society and other stakeholder are built into the project design.

OVERALL FM RISK M M

The overall residual risk rating is deemed to be moderate.

61 Budgeting Arrangements

23. Implementing entity: An existing Project Coordination Unit PCU “PRODEMA” with significant experiences in IDA-financed projects will guarantee the respect of the Bank’s fiduciary standards. It will oversee the project’s fiduciary aspects (Financial Management and Procurement); the existing FM team composed of a Financial Officer and an Accountant. An additional accountant will be recruited to reinforce the existing team, the WB will have the right to review the resume of the identified accountant and meet with him before formal appointment. The contract should be signed no later than three months after effectiveness. 24. Budgeting: Annual work plans and budgets and detailed disbursement forecasts will be consolidated into a single document by the FM unit of the project, which will be submitted to the Project Steering Committee for approval, and thereafter to IDA for approval no later than November 30 of the year proceeding the year the work plan should be implemented. The PCU will monitor its execution with the accounting software in accordance with the budgeting procedures specified in the manual of procedures and report on variances along with the quarterly interim financial report. The budgeting system needs to forecast for each fiscal year the origin and use of funds under the project. Only budgeted expenditures would be committed and incurred so as to ensure the resources are used within the agreed upon allocations and for the intended purposes. Accounting arrangements and staffing

25. Accounting. Fiduciary Unit will maintain proper financial accounting system and the accounting system will be run on TOMPRO software being used for the current project (PRODEMA). The Chart of accounts should be developed in a way that allows project costs to be directly related to specific work activities and outputs of the project. It has been agreed that all records and vouchers will be kept for a minimum of five years. The project will maintain a fixed assets register. 26. Staffing. The Financial officer will take full fiduciary responsibility of the project while the day-to-day accounting operations will be overseen by the accountant who will be recruited and will receive trainings on World Bank’s fiduciary procedures. Internal Controls and Internal Auditing

27. For the purpose of this Coffee project, it has been agreed to update the existing manual of procedures that was issued during the preparation of the PRODEMA, taking into account the procedures already in place. The project implementation manuals for PRODEMA – comprising the Manuel d’execution, Guide de gestion des sous-projets, Manuel de suivi et evaluation and Manuel des procedures – were amended to reflect the activities and needs of the Sustainable Coffee Landscape Project in the run up to the Negotiations, and will therefore be used as the project implementation manual for both projects. Disbursements and fund flows arrangements 28. A designated Bank account will be opened in the Central Bank that is acceptable to IDA for the purposes of implementing the project. The ceiling of the DA will be set to USD 300,000, equivalent to four months of project estimated cash needs, taking into account the possibility of

62 submitting requests for direct payments for large payments (e.g twenty percent of DA ceiling). The project will disburse using statement of expenditures to document project expenditures for contract values below the SOE documentation thresholds (USD 200,000 for works, USD 150,000 for Goods, USD 100,000 for Consultant Services provided by a consulting firm and USD 50,000 for Consultant Services provided by an individual consultant); or records evidencing eligible expenditures (eg. Copies of invoices, receipts, etc.). The Grant proceeds will be disbursed to the designated account and payments in US Dollars for eligible project expenditures will be made out of this account. This account will also be used to finance transactions in FBU, all local transactions will be paid in FBU using the daily rate. 29. Each beneficiary will prepare a “work plan” for implementing of activities which will be approved by the Technical Committee. The funds flow will follow the same pattern being used for PRODEMA, an agreed standard reporting format will be used for the sub-accounts which will be included into the financial manual of procedures. Each beneficiary of sub-project will maintain a separate project advance account at the decentralized level in local currency into which funds from IDA Designated account will be deposited to fund agreed & approved project activities. This will be based on the grant agreements to be signed between the Project Coordinating Unit and the respective beneficiary. All supporting documents will be made available for review during supervision or external audit missions. 30. Upon effectiveness of the grant, the project will submit an application to withdraw the initial advance up to the ceiling amount of the designated account. Subsequent advances will be made upon receiving satisfactory documentation of the initial/previous advance to the DA. Other methods of disbursement include the use of direct payments to suppliers and special commitments. The Recipient may also use the reimbursement method for eligible expenditures pre-financed from its own resources. Details will be spelt out in the Disbursement Letter and in the FM manual of the project. 31. The flow of funds is summarized as follow: IDA

Designated Account in US $

Transactions to be financed in fbu or other currencies (US$, Euro)

63 Financial Reporting Arrangement 32. The implementing unit (PRODEMA) will record and report on project transactions and submit to the World Bank Interim Financial Monitoring Reports (IFRs) no later than 45 days after the end of each calendar quarter. At a minimum, the financial reports must include the following tables with appropriate comments; (i) Sources and Uses of Funds; (ii) Uses of Funds by Project Activity/Component and comparison between actual expenditures and budget (iii) Special account activity statement and (iv) Note to the IFR. 33. At the end of each fiscal year, the project will issue the Project Financial Statements (PFS) comprising: (i) a balance sheet; (ii) a statement of sources and uses of funds; (iii) accounting policies and procedures; and (iv) Notes related to significant accounting policies and accounting standards adopted by management and underlying the preparation of financial statements. These PFS will be subject to annual external audits as described below. External Auditing Arrangements. 34. The assessment of the “Cour des Comptes”, the Supreme Audit Institution during the PEFA exercise revealed a need for improvement of its capacity; this institution could not be used to audit the project accounts. Therefore, a qualified, experienced, and independent external auditor will be recruited on approved terms of reference three months after effectiveness. The external audit will be carried out according to International Standards on Auditing (ISAs) and Auditing Standards (ASs); it will cover all aspects of project activities implemented and include verification of expenditures eligibility and physical verification of goods and services acquired. The report will also include specific controls such as compliance with procurement procedures and financial reporting requirements and consistency between financial statements and management reports and field visits (e.g. physical verification). The audit period will be on annual basis and the reports including the project financial statements submitted to IDA no later than six months after the end of each fiscal year. The Terms of Reference for the external audit will be the same as PRODEMA’s. 35. The project will comply with the Bank disclosure policy of audit reports (e.g. make publicly available, promptly after receipt of all final financial audit reports (including qualified audit reports) and place the information provided on its the official website within one month of the report being accepted as final by the team. 36. Governance and Accountability: the risk of fraud and corruption within project activities is substantial given the country context. However, the proposed fiduciary arrangements will help to mitigate such risks. Nonetheless, the following measures are envisaged to further mitigate the risk of fraud and corruption; mainly the unit to implement an Anti-corruption Action Plan under the oversight of the Government Anti-corruption Watchdog – “Observatoire Pour la Lutte Contre la Corruption.

37. The Financial Management Action Plan. The plan described below has been developed to mitigate the overall financial management risks.

64

Issue Remedial action recommended Responsible Completion FM entity date Conditions FM staffing Recruitment of an additional PCU Three months No (1) accountant three after effectiveness Accounting Upgrade the existing system and PCU Three months No (1) software finalization of the configuration of after the multi-projects accounting effectiveness software FM procedures Revision of the FM procedures PCU After No (1) manual manual as part of the project effectiveness implementation manual (PIM) Reporting Agree on the format and content of PCU After No (1) (IFRs) Unaudited Interim Financial effectiveness Reportings (IFRs) External Selection of an external auditor on PCU After No auditing ToRs (project accounts) effectiveness

38. Conclusion and Supervision Plan: supervisions will be conducted over the project’s lifetime. The project will be supervised on a risk-based approach. It will comprise inter alia, the review of audit reports and IFRs, advice to task team on all FM issues. Based on the current risk assessment which is moderate the project will be supervised at least twice a year and may be adjusted when the need arises. The ISR will include a FM rating of the project. An implementation support mission will be carried before effectiveness to ensure the project readiness. To the extent possible, mixed on-site supervision missions will be undertaken with procurement monitoring and evaluation and disbursement colleagues. B. Procurement

39. Procurement for the proposed project will be carried out in accordance with the World Bank’s “Guidelines: Procurement of Goods, Works, and Non-Consulting Services under IBRD Loans and IDA Credits & Grants by World Bank Borrowers”, dated January 2011, and “Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits & Grants by World Bank Borrowers”, dated January 2011; “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credit and Grants”, dated October 15, 2006 and revised January 2011. The general description of various items under different expenditure categories are described below. For each contract to be financed by the Grant, the different procurement methods or consultant selection methods, the need for prequalification, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank project team in the Procurement Plan. The Procurement Plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. The Borrower, as well as contractors, suppliers, and consultants, will observe the highest standards of ethics during procurement and execution of contracts financed under this project.

65 40. The Bank’s Standard Bidding Documents will be used for procurement of works and goods under International Competitive Bidding (ICB); and the Standard Request for Proposals (SRFP) will be used for consultants’ contracts estimated to cost US$200,000 and above equivalent per contract. In addition, the implementing agency will use Standard Bid Evaluation Forms for procurement of goods and works for ICB contracts, and the Sample Form of Evaluation Report for Selection of Consultants selected using the Bank’s SRFP for consultants’ contracts estimated to cost US$200,000 and above equivalent. It is foreseen that such high value contracts will be limited. However, National Bidding Documents acceptable to the Bank may be used for (i) procurement of works and goods under National Competitive Bidding (NCB) procedures, and (ii) consultants contracts estimated to cost less than US$200,000 equivalent per contract. Furthermore, in accordance with para.1.16 (e) of the Procurement Guidelines, each bidding document and contract financed out of the proceeds of the Financing shall provide that: (i) the bidders, suppliers, contractors and subcontractors shall permit the Association, at its request, to inspect their accounts and records relating to the bid submission and performance of the contract, and to have said accounts and records audited by auditors appointed by the Association; and (ii) the deliberate and material violation by the bidder, supplier, contractor or subcontractor, of such provision may amount to an obstructive practice as defined in paragraphs 1.16(a) (V) of the Procurement Guidelines. Applicable Procurement Methods 41. Scope of Procurement: The implementation of the Project entails procurement of various types, but it generally comprises: (a) works for rehabilitation of offices, paths and trails, construction of environmental education rooms, patrolling stations and viewing towers, guardrooms for rangers; (b) goods: vehicle, motorbike, bicycles, equipment for rangers, computers; (c) consulting services: private service providers, technical assistance (TA), financial audit; and (d) training and workshops. 42. Procurement of Works and Goods: Contract packages estimated to cost US$ 3 000 000 equivalent per contract and above for works and US$500,000 equivalent per contract and above for goods will be procured through International Competitive Bidding (ICB) procedures. Contracts estimated to cost less than US$ 3 000 000 equivalent per contract for works, and less than US$500,000 equivalent per contract for goods would be procured through National Competitive Bidding (NCB) procedures, except for small contracts estimated to cost less than US$ 50,000 equivalent per contract for goods and less than US$ 100,000 equivalent per contract for works that may be procured through Shopping procedures by comparing prices for quotations received from at least three (3) reliable contractors or suppliers. In such cases, request for quotations shall be made in writing and shall indicate the description, scope of the works, the time required for completion of the works and the payment terms. All quotations received shall be opened at the same time. As a general rule, a qualified supplier who offers goods or materials that meet the specifications at the lowest price shall be recommended for award of the contract. 43. For shopping, if the Borrower has been unable to obtain at least three quotations, it shall provide the Bank with reasons and justification why no other competitive method could be considered and obtain a no objection before proceeding on the basis of the only responses already received.

66 44. Limited International Bidding for goods may exceptionally be used when there are only a limited number of known suppliers worldwide. 45. Direct contracting for works or goods may exceptionally be an appropriate method provided the Bank is satisfied in such cases that no advantage could be obtained from competition and that prices are reasonable. 46. Community Participation in Procurement, will be appropriate where, in the interest of project sustainability, or to achieve certain specific social objectives of the project, it is desirable in selected project components to (a) call for the participation of local communities and/or nongovernmental organizations (NGOs) in civil works and the delivery of non-consulting services, or (b) increase the utilization of local know-how, goods and materials, or (c) employ labor-intensive and other appropriate technologies, the procurement procedures, specifications and contract packaging shall be suitably adapted to reflect these considerations, provide these are acceptable to the Bank. The procedures proposed and the project activities to be carried out by community participation shall be outlined in the Loan Agreement and further elaborated in the Procurement Plan or the relevant Project Implementation Document (Manual) approved by the Bank and made publicly available by the Borrower. This document describes the details in a clear and simple language that is easily understood by the targeted users. 47. Procurement from United Nations Agencies: There may be situations in which procurement directly from agencies of the United Nations (UN), following their own procurement procedures may be the most appropriate methods. In such circumstances the Borrower shall submit to the Bank for its no objection a full justification and the draft form of agreement with UN agency. 48. Procurement of non-consulting services: Non-consulting services which are services that are not of intellectual or advisory in nature will include for instance the distribution of supplies from central-level procurement to the decentralized entities, or maintenance of equipment. The procurement of non-consulting services shall follow the existing Bank’s SBDs for ICB, or national standard bidding documents for NCB or Shopping, with appropriate modifications. 49. Selection of Consultants: Consulting contracts will as far as possible be awarded under Quality and Cost Based selection (QCBS) procedures. Other methods of selection will be determined for each assignment depending on the type of assignment and the provisions of the Consultant Guidelines, and will be indicated in the procurement plan. Quality Based Selection (QBS) and/or Fixed Budget Selection (FBS) may be used for assignments which meet the requirements of paragraph 3.2 and 3.5 of the Consultants Guidelines respectively. Consultants used for assignments of a standard and routine nature such as audits and other repetitive services would be selected through Least-Cost Selection (LCS) method in accordance with paragraph 3.6 of the Consultants Guidelines. Contracts for consulting services, using firms, estimated to cost less than US$200,000 equivalent and for which the cost of a full-fledged selection process would not be justified may be selected on the basis of Consultant Qualifications (CQS) in accordance with paragraphs 3.7 of the Consultants Guidelines. Short List of consultants for services estimated to cost less than US$ 100,000 equivalent per contract may be comprised entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines.

67 50. The advertisement for all consultant services estimated to cost the equivalent value of US$ 200,000 or more will be done in UNDB online as well as in local newspapers in respect of the clause 2.5 of the guidelines for the selection and employment of consultant. 51. Single-Source Selection (SSS) of consulting firms or individuals would be applied only in exceptional cases if it presents a clear advantage over competition when selection through a competitive process is not practicable or appropriate and would be made on the basis of strong justifications and upon Bank’s concurrence to the grounds supporting such justification. Paragraph 3.8-3.11 for consulting firms and paragraph 5.6 for individual consultants will be taken as a reference for use of single source. 52. Individual Consultants (IC) will be selected on the basis of their qualifications by comparison of CVs of at least three candidates from those expressing interest in the assignment or those approached directly by the Implementing Agency in accordance with the provision of Section V of the Consultants Guidelines. It is worth to point out that the Borrower shall obtain the Bank’s no objection when it has not been able to compare at least three qualified candidates before hiring, in which case it shall provide the reasons. 53. Training and Workshops: Detailed training plans and workshop activities will be developed during project implementation and included in the project annual work plan and budget for Bank’s review and approval. 54. Operating Costs: Incremental operating costs include expenditures for maintaining equipment; fuel; office supplies; utilities; consumables; workshop venues and materials; per diems, travel costs, and accommodation for staff when travelling on duty during implementation of this project, but excluding salaries of civil/public servants. These will be procured using the Borrower's administrative procedures, acceptable to the Bank. 55. Bank’s Review Thresholds. The Borrower shall seek World Bank prior review in accordance with Appendix 1 of both Procurement and Consultant Guidelines for contracts above the thresholds as agreed in the Procurement Plan. For purposes of the initial Procurement Plan, the Borrower shall seek Bank prior review for (i) works contracts estimated to cost US$3,000,000 equivalent and above per contract; (ii) goods contracts valued at US$500,000 equivalent and above per contract; (iii) all consultancy contracts for services to be provided by consulting firms of US$200,000 equivalent and above; (iv) for individual consultants contracts estimated to cost the equivalent of US$100,000 or more; but also under circumstances described in paragraph 5.4 of Consultants Guidelines. 56. In addition, a specified number of contracts to be identified in the procurement plan for the procurement of goods and works below the ICB threshold will also be subject to prior review. These prior review thresholds may be re-visited annually and any revisions based on the assessment of the implementing agency capacity will be agreed with the Borrower and included in an updated Procurement Plan. 57. Record Keeping: The implementing agency will be responsible for record keeping and filing of procurement records for ease of retrieval of procurement information. In this respect, each contract shall have its own file and should contain all documents on the procurement process.

68 58. Monitoring: Monitoring and evaluation of procurement performance will be carried out through Bank supervision and post procurement review missions Assessment of the Agency’s Capacity to implement Procurement 59. Procurement under this project will maintain existing procurement arrangements for Bank- financed PRODEMA. This agency will continue to be responsible for the implementation and supervision of the project. PRODEMA has established a fully operational procurement system, including a procurement officer assisted by an administrative assistant as well as procurement committees. The PCU will use consultants when needed to accomplish certain specific tasks, such as technical studies, preparation of technical specifications, supervision of works execution and delivery of goods. An assessment of the capacity of the PCU to implement procurement actions for the project has been carried out in September 2012 through the Procurement Risk Assessment & Management System (P-RAMS). The assessment revealed the level of risk as Substantial while residual project risk will be Moderate after implementation of the mitigation measures as summarized in the table below.

Table No. 7. Procurement Risk assessment

Risk Factor Mitigation Measure Due Date Status Internal Manuals and Clarity Organize dissemination effort and of the Procurement Process improved accessibility to manuals and instructions for project implementation 16-Dec-13 Recommended partners Record Keeping & Establish traceability of procurement Document Management documents in a separate Systems filing/archiving for PRODEMA and the 25-Sep-13 Recommended proposed GEF project Staffing/Accountability Create awareness for procurement 25-Nov- ethics and incorporate it in the project Recommended implementation manuals 13 Review of Procurement Establish administrative complaints Decisions and Resolution of review process by approving authority 16-Jun-14 Recommended Complaints

60. Procurement Plan: The Borrower has developed a procurement plan for project implementation which provides the basis for specifying the required procurement methods. This plan has been agreed between the Borrower and the project team on February 4, 2013, and is available at PRODEMA office. The procurement plan will also be available in the project’s database and in the Bank’s external website. The procurement plan will be updated in agreement with the project team annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.

61. Details of Contract Packages to be procured under the Project. Table No. 8 List of Contract Packages for Goods, Works and non-consultant services

69

1 2 3 4 5 6 7 8

Ref. Contract Estimated Procurement P-Q Domestic Review Expected No. (Description) Cost Method Preference by Bank Bid- (US$) (yes/no) (Prior / Opening Post) Date 1 Producing and 24,000 Shopping NO NO Post November planting tree 2013 nurseries for demarcation of protected areas (boundary) 2 Rehabilitation for 39,000 Shopping NO NO Post June2013 offices and construction of environmental education room 3 Purchase of 20 4,000 Shopping NO NO Post August bicycles 2013 4 Purchase of 3 15,000 Shopping NO NO Post August motorbike 2013 5 Purchase of a 4X4 40,000 Shopping NO NO Post June2013 vehicle. 6 Construction of 19,000 Shopping NO NO Post September patrolling stations 2013 and viewing towers 7 Rehabilitation of 46,000 NCB NO NO Post June 2013 paths and trails (HIMO) 8 Production and 7,000 Shopping NO NO Post June 2013 installation of education display 9 Purchase of GPS 4,500 Shopping NO NO Post Oct 2013 and rechargeable battery 10 Production of 13,072 Shopping NO NO Post March material EE and 2014 medias Program 11 Purchase of 1,350 Shopping NO NO Post Feb2014 television set +CC& DVD 12 Purchase of 46,000 Shopping NO NO Post July 2013 equipment for rangers: uniformes + caps, backpack, flask, sleeping bag, waterproof and tents for patrol 13 Purchase of 2,000 Shopping NO NO Post July 2013 binoculars 14 Purchase of Sun and 2,000 Shopping NO NO Post July 2013 rechargeable lamp 15 purchase of 35 1,200 Shopping NO NO Post July 2013 knifes

70 16 Purchase of 10 Kit 300 Shopping NO NO Post July 2013 kitchen utensil 17 Construction of 1,000 Shopping NO NO Post July 2013 guardroom for rangers….) 18 Purchase of 200 Shopping NO NO Post August 2megaphones 2013 19 Purchase of 13,000 Shopping NO NO Post June2013 computers 20 Purchase of office 7,500 Shopping NO NO Post June2013 furniture&equipmen t 21 Purchase of 4,000 Shopping NO NO Post June2013 generator

71 Table No. 9 List of Consulting Assignments

1 2 3 4 5 6 Ref. Description of Estimated Selection Review Expected No. Assignment Cost (US$) Method by Bank Proposals (Prior / Submission Post) Date 1. Subproject support for 111,000 ED Prior June, 2013 sustainable coffee landscape management, including Batwa subprojects 2 Refining of SHC manual 5,000 IC Post July 2013 3 Technical study for 8,000 IC Post October rehabilitation of HQ, paths 2013 and trails 4 Marketing study and action 15,000 IC Post October plan for diversification of 2013 livelihoods 5. Recruitment of consultants 18,000 QC Post Sept 2013 (02) for Management plan of sustainable protect area management 6. Training of guides 7,000 IC Post Sept 2013 7. Training of the trackers 2,000 IC Post Sept 2013 8. Training of communities in 10,000 IC Post August 2013 ecotourism 9. Recruitment of an 24,000 IC Prior May 2013 accountant 10. Recruitment of a 18,000 IC Prior May 2013 sustainable land management expert 11. Baseline study 40,000 QC Prior May 2013 12. Consultant to carry out a 17,000 IC Post Dec 2013 communication strategy 13. External project annual 30,000 LCS Post Sept 2013 audit

III. Environmental and Social (including safeguards)

62. Social and environmental impacts. The socio-economic impacts of the proposed project are expected to be largely beneficial, both in providing enhanced land and water management practices and in securing sources of incomes, livelihoods and food security. The economy of the project area is predominantly agriculture and livestock farming. The main food crops produced are cereals, root crops, vegetables and bananas; coffee is the most important cash crop. The project will contribute to sustaining and strengthening food crop production through sustainable land and water management practices. The expected social benefits include, but are not limited to: enhancement of means of production; enhancement of sources of livelihood, job creation, income security, induced development and strengthening of local community ownership of sustainable land management investments. In terms of gender, the project will benefit women, men, elderly and children.

72 63. The expected environmental impacts from this project are very positive, including: (i) reduced soil erosion and improved water retention from the planned investments in sustainable land management, including shade coffee cultivation; (ii) reduced water pollution from project- supported improvements in coffee washing practices; and (iii) increased biodiversity conservation from the improved protection and management of the Bururi Forest Nature Reserve, along with the expected addition of different species of shade trees to coffee plantations. 64. Any potential adverse environmental impacts from this project would be rather minor and linked to (i) small-scale civil works that might be built to improve management of the Bururi Forest Reserve and to implement the Batwa Peoples Action Plan and possibly (ii) changes in agricultural pest management practices in coffee cultivation areas (which, on balance, are more likely to be environmentally positive). 65. The design of the Sustainable Coffee Landscape in Burundi project has been participatory at several levels. The R-SEA was the key sector consultation that informed project identification. Stakeholders consulted during preparation included national government administrations, private sector (the national association of coffee producers, Inter Café Burundi), NGOs, community based organizations (CBOs), community based facilitators (CBFs), the GEF and donors. Public consultations with project beneficiaries, local NGOs, and other stakeholders have been carried out on the environmental and social aspects of this project, with reference to the Environmental and Social Impact Assessment and Resettlement Policy Framework (prepared for PRODEMA but also applicable to this new project) and the Process Framework and Batwa (indigenous peoples) Action Plan Addendum (prepared specifically for this project)62. The consultations focused on assessing the viability of the project, identifying potential areas of conflict between stakeholders, and defining areas of collaboration. During implementation, recurrent consultations will be carried out with the various stakeholders identified. To further improve stakeholders’ participation, the project will prepare and implement a communication strategy.

Policies triggered

66. The proposed project is classified as Category B and is not expected to induce significant adverse environmental and social impacts. Several of the implementing entities have gained experience with World Bank Safeguard Policies through the PRODEMA and PRASAB projects. This new project will further increase the awareness and implementation capacity of the relevant Government agencies with respect to safeguards.

67. The following are safeguards policies that are the envisioned to be triggered by the project.

62 Latest consultations occurred in September 2012 in the Bururi Province and in January 16 and 18, 2013 in Bubanza and Muyinga provinces respectively.

73 Safeguard Policies Triggered Yes No TBD Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Physical Cultural Resources (OP/BP 4.11) X Indigenous Peoples (OP/BP 4.10) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X

68. Environmental Assessment OP 4.01 applies to this Category B project, which is intended to be highly positive overall from an environmental and social standpoint but would influence activities (cultivation of coffee and associated crops; coffee washing stations) that are inherently somewhat sensitive from an environmental standpoint. To comply with the Environmental Safeguard triggered (OP 4.01), a separate public consultation on environmental issues (including benefits) of the project was be undertaken by the PRODEMA before evaluation. 69. Natural Habitats OP 4.04 would apply in that the project would help to conserve natural habitats, but the project is not expected to involve any natural habitat loss or degradation. The project design would seek to discourage—and would certainly not support—the expansion of coffee plantations within protected areas. 70. Forests OP 4.36 would apply since the project would seek to improve forest conservation within the Bururi Forest Nature Reserve. The project would not support forest harvesting, other than the sustainable utilization of wood from the pruning of coffee shade trees (which is outside the scope of OP 4.36). 71. Pest Management OP 4.09 would apply because pest management is often a part of the cultivation of coffee and associated crops. 72. Indigenous Peoples OP 4.10: A small portion of the project area, in the vicinity of the Bururi Forest Nature Reserve, is inhabited by the Batwa ethnic group, which qualifies as indigenous under OP 4.10. 73. Involuntary Resettlement OP 4.12: Some project activities may induce land acquisition; however, impacts are presumed to be limited and site-specific. Any land acquisition involving the need to resettle or compensate affected people would be addressed under the PRODEMA Resettlement Policy Framework. In addition, a Process Framework has been prepared for this project, specifically to address livelihoods-related issues in the vicinity of the Bururi Forest Nature Reserve. Safeguard instruments

74. To address environmental and social safeguards, the project would use the following existing safeguards instruments prepared for the ongoing Agro-Pastoral Productivity and Markets Development Project (PRODEMA): (i) Environmental and Social Impact Assessment

74 (ESIA) (Analyse d’Impact Environnemental et Social du Projet, February 2010), which includes an Environmental Management Plan (Plan de Gestion Environnementale) and Pest Management Plan (Plan de Gestion Integre de Pestes et des Pesticides); (ii) Resettlement Policy Framework (Cadre de Politique de Reinstallation Involontaire des Populations, December 2009); and (iii) Indigenous Peoples Plan (Plan d’Action pour le Developpement des Batwa, December 2009) for the overall project area. These existing safeguards instruments have been updated with an explanatory Cover Note, endorsed by the GoB and disclosed for the project as new documents. 75. These safeguards instruments would suitably cover this new project as well as the ongoing PRODEMA because (i) the new project’s proposed investments in sustainable land management, improved coffee cultivation (under shade) and processing (washing), and small civil works (such as to enhance ecotourism and protected area management at Bururi Forest) are a subset of the broader range of agricultural and natural resource management investments which have already been assessed for PRODEMA; (ii) the 3 provinces (Bubanza, Bururi, and Muyinga) in which the new project would operate are the same as in PRODEMA (which also covers additional provinces); (iii) the new project would be implemented by the same lead institution (Ministry of Agriculture and Livestock, MINAGRIE) and guided by the same National Policy Steering Committee; and (iv) the beneficiaries (coffee and other farmers) and other stakeholders under the new project would be a subset of those under PRODEMA. 76. Public consultations with project beneficiaries, local NGOs, and other stakeholders have been carried out on the environmental (including social) aspects of the Sustainable Coffee Landscape Project, using the PRODEMA safeguard documents as a reference. In addition to these existing PRODEMA safeguards instruments, two new documents were prepared for the new project: (i) a Process Framework to address sustainable livelihood issues in the vicinity of the Bururi Forest Nature Reserve and (ii) an Addendum to the 2009 Indigenous Peoples Plan (IPP) to cover the Batwa indigenous community that resides near the Bururi Reserve. In addition, the Pest Management Plan (Plan de Gestion Integre de Pestes et des Pesticides) imbedded within the PRODEMA ESIA was specifically adapted to the new project (Plan de Lutte Antiparasitaire) and publicly disclosed as a separate document. 77. On January 22 2013, the Government of Burundi approved and published the safeguard documents in accessible areas such as public libraries, the office of the Minister of Agriculture and Livestock, and the decentralized administrative offices. These documents were also sent by the World Bank to InfoShop (January 25, 2013) and subsequently publicly disclosed. The documents disclosed were:

 Analyse d’Impact Environnementale et Sociale (Environmental and Social Impact Assessment, ESIA)  Plan de Lutte Antiparasitaire (Pest Management Plan, PMP)  Cadre de Politique de Réinstallation Involontaire des Populations (Resettlement Policy Framework, RPF)  Cadre Fonctionnel de la Gestion durable de la Reserve Naturelle Forestière de Bururi et de l’Ecotourisme (Process Framework, PF)  Plan D’action Additionnel pour Le Developpement des Batwa Résidents Autour de la Réserve Forestière de Bururi (Indigenous Peoples Plan, IPP)

75 IV. Monitoring & Evaluation

78. The project will utilize PRODEMA’s existing Management Information System (MIS), which incorporates technical and financial data to measure progress. It will support day-to-day implementation management and ensure results indicators are updated on a regular basis. 79. The PCU already has an M&E specialist responsible for training IPCU coordinators and MINAGRIE staff to collect required information and adhere to a uniform reporting process. The MIS will incorporate new information and data related to biodiversity, SLWM and other topics that are relevant for the proposed project and training will be extended to cover these topics. 80. Data collection. To monitor project performance, the PCU and other participants will collect project-specific data. At the provincial and communal levels, the DPAEs (decentralized units of MINAGRIE) and PSPs recruited by the project will monitor sub-project implementation. The PSPs will be responsible for providing periodic monitoring data on sub-projects (this requirement will be mentioned in the sub-project financing agreements). In a coordinated way, they will collect and transmit the data to the IPCUs who will aggregate, consolidate and analyze it. This will be further transmitted to the M&E specialist at the PCU at the national level. Data will be disaggregated to allow for assessment according to gender and target vulnerable groups. Also, the project will use information and communications technology to involve producer groups in reporting their own data. 81. M&E of the activities conducted in the Bururi Forest Nature Reserve will be responsibility of INECN’s conservation department. This monitoring will be conducted following participatory methodologies and progress report will be submitted to the PCU. A protocol for M&E will be established following the project’s overall MIS guidelines. 82. Monitoring and evaluation reports, including environmental and social monitoring results, will be prepared quarterly at the provincial and communal levels and semi-annually at the central level. The semi-annual reports will be circulated to sector ministries and development partners. 83. The joint Bank- GOB semi-annual implementation support missions will assess the status of key project outcomes and update legal covenant compliance. The Mid-Term Review will be conducted two years after effectiveness to assess the project midway through implementation. This Review will be coordinated so it coincides with a PRODEMA support mission. Also, an independent impact evaluation (IE) will be conducted to assess overall achievement of expected project results. Prior to the impact evaluation, a clearly defined methodology will be shared and approved by the stakeholders to ensure that it will measure project effectiveness adequately. Upon completion of the GEF operation, the Bank will review the results and prepare the implementation completion report. This will be submitted no later than six months after project closure. 84. The project will also need to report at endorsement, mid term and closure using the GEF tracking tools for biodiversity, land degradation and sustainable forest management. 85. Capacity strengthening. The project will build on the capacity building program conducted by PRODEMA for all the stakeholders involved in the MIS. The training has enabled them to manage a quality monitoring and evaluation system and use M&E as a management tool for assessing project outputs and outcomes and taking corrective action to achieve the PDO.

76 Training conducted by PRODEMA will be extended to the topics related to the new GEF project such as biodiversity, SLWM and other relevant topics. 86. Impact Evaluation (IE). An independent impact evaluation will be conducted for the project to determine the impact of shade grown coffee cultivation on specific variables (more details in Annex 7). This has been considered a key project’s activity given that it is piloting different mechanisms and interventions that can potentially be scaled up in the country. Prior to the impact evaluation, an implementation and work plan will be designed, shared and approved by key stakeholders to ensure that it will assess impact adequately. The impact evaluation will be in line with PRODEMA’s monitoring and information system. 87. Even though the specific evaluation questions will result from the design process, at this stage some of the questions that have been suggested for discussion are:

 What is the impact of shade grown coffee on the economic returns from the coffee farm?  What is the impact of shade on the land’s productivity?  What is the impact of shade grown coffee on biodiversity?  Does certification of shade grown coffee certification has a positive impact on biodiversity conservation?

88. A consultancy/firm (national research center or international firm) will be hired to facilitate the IE, working closely with key project members. A mission to Burundi will be prepared with the participation of the WB’s IE Experts who will work together with the monitoring team to produce the Terms of Reference for the IE. The mission will be arranged after the project’s negotiations and before effectiveness.

77 Annex 4: Operational Risk Assessment Framework (ORAF) BURUNDI: Sustainable Coffee Landscape

1. Project Stakeholder Risks Rating Low Description: Risk Management: Despite implementation being through a stand-alone PCU, all key government As a demonstration activity, long-term success of the project agencies are involved in the coordination and oversight structures. During project preparation a radio relies on its innovations being adopted under mainstream program on shade grown coffee was initiated. The program will continue as part of a broader MINAGRIE programs, and by other stakeholders in the coffee communications strategy to publicize the benefits of participating in shade grown coffee production. sector. Initial interest and enthusiasm of the Ministry and private sector partners is high, but that will need to be maintained and expanded to local government and other Resp: Client Stage: Implementation Due Date: Status: In progress potential partners, such as DPs and NGOs.

2. Implementing Agency Risks (including fiduciary) 2.1 Capacity Rating: Moderate Description: Technical, FM & procurement capacity. Technical Risk Management: The project will benefit from the management experience acquired by the agencies and institutional capacity is limited within the mainstream with previous and current projects; i.e. PRASAB and PRODEMA. The involvement of private sector Ministry, particularly at the local level. Administrative and providers and the decentralized units of MINAGRIE (DPAE) will technically support the implementation fiduciary capacity also remains limited in MINAGRIE. However, of the subprojects. the project will be managed through the PCU, supported by Resp: Client Stage: Implementation Due Date: Status: IPCUs at district level. These are the same implementing arrangements as used under PRODEMA, and they have proven Risk Management: A ring-fenced, as per the ongoing PRODEMA will be used; relying on a dedicated extremely effective and reliable. FM team at the PCU. Existing procurement arrangements for Bank-financed PRODEMA will be maintained, but procurement documents will be filed separately for the two projects.

Resp: Client Stage: Prep/ Impl Due Date: Status: 2.2 Governance Rating: Substantial Description: Weakness of the institutions. Some of the Risk Management: Institutional capacity for regulation of the coffee sector will be strengthened through implementing partners, such as INTERCAFE and ARFIC have the project,. The participation in the Steering Committee and the technical advisory group will provide an been recently created, and therefore inexperienced in opportunity to strengthen the institutions and promote coordination. implementing their sector promotion and regulation roles. The project will benefit from PRODEMA’s daily working relation with the coffee agencies supported by Project governance is complex with private and public a MoU. Institutions like INTERCAFE whose main functions are extension and marketing are very organizations involved and working both at the national and common in coffee countries such as the ones in Latin America. Lessons will be obtained from such local levels. These organizations could have competing experiences. interests. Resp: Client Stage: Implementation Due Date: Status:

Risk Management: The regulations to be prepared under the coordination of MEEATU with the project’s support would contribute to the implementation Environmental Code specifically in relation to Legislation related to land management is poorly publicized the coffee processing phase. The project’s communication strategy will contribute to the demystification and detailed guidance for implementation is often lacking. For and dissemination of information related to the country’s land management laws.

78 example, the Environmental Code is in place but it lacks implementing legislation and it has not been sufficiently Resp: Client Stage: Implementation Due Date: Status: disseminated.

3 Project Risks 3.1 Design Rating: Substantial Description: Technical novelty and complexity. The project Risk Management: Project resources will be used to hire support from both local and international relies on technologies and interventions that have already been consultants and contractors as needed. Also, visits to successful experiences overseas (particularly tested mostly abroad, but some activities are new and poorly regarding shade grown coffee, certification and agri/eco tourism) will be promoted in order to provide understood within Burundi. technical expertise. Integration of research, through establishment of shade coffee demonstration sites by ISABU, will provide practical local lessons for application in the country. TerrAfrica experience and knowledge regarding SLWM practices will benefit the project. In addition, the impact evaluation to be conducted will also provide lessons regarding the interventions’ impact on biodiversity conservation, increase in farmers’ income and agricultural productivity. Resp: Client Stage: Prep / Impl Due Date: Status: Lack of uptake by farmers. There is a potential risk that the local Risk Management: Locally-appropriate materials will be developed to explain to farmers the benefits of population would give higher priority to short-term livelihoods shade coffee, and that that although yields per ha are lower for shade coffee than sun or monoculture than to ecologically sustainable production and biodiversity- plantations, production costs are also lower. The project will not take land out of production, but it will friendly livelihoods. promote a more diversified and sustainable production. Farmers will be able to diversify their sources of income and improve food security. Although introduction of shade coffee and SLWM technologies are expected to be economically beneficial, the project will cover much of the introduction costs initially to incentivize early participation. It will also target the most willing and promising producers, and include peer-learning, local study tours and a strong communications component to boost enthusiasm. The team has met with many farmer associations during preparations and they are keen to include trees in the coffee plantations and intercropping. In fact, some are already making the changes while others are expecting to learn from the demonstration plots and visits to other farmers. Since the GoB has started to support the shade –coffee policy and not exclusively the sun-coffee, the farmers are more willing to do the required changes.

Resp: Client Stage: Prep / Impl Due Date: Status: 3.2 Social & Environmental Rating: Moderate Description: Significant environmental or social impacts are Risk Management: The project will support the Bururi Forest Nature reserve’s staff in order to intensify not anticipated. There is a risk of increasing expansion of coffee patrol and enforce regulations to prevent the encroaching of the protected area. In addition, by areas, which could arise from the success of the project in introducing a more intensive use of land with diversified products and sources of income, the project will promoting coffee. There is no unused land in Burundi, so the minimize the risk of encroachment to other areas. expansion of coffee could move towards the protected areas. Resp: Client Stage: Implementation Due Date: Status:

Risk Management: An Environmental and Social Impact analysis, an Environmental Management Plan, Process Framework and Indigenous Peoples Plan have been produced and adapted for the project in order to address possible social and environmental risks. The Client’s institutional capacity to address environmental and Resp: Client Stage: Prep / Impl Due Date: Status: social safeguards issues is incipient but growing.

79 Risk Management: The implementation of the safeguards instruments for the proposed project will build on the capacity developed by PRODEMA, which also is the main implementing agency for the project. The project will provide additional support to the PRODEMA environmental office through environmental and social safeguards consultancy services.

Resp: Client Stage: Prep / Impl Due Date: Status: and Bank 3.3 Program & Donor Rating: Low Description: Donor collaboration. There is no direct donor co- Risk Management: Regular communications and meetings with representatives from donors of the financing, however, weak coordination and collaboration with different projects will be held on a regular basis. The project will share the PCU with PRODEMA and PRODEMA, LVEMP and other related sector activities could thus will maximize collaboration between both projects. The PSC will promote coordination and waste opportunities for synergies and scale-up. collaboration. Resp: Client & Bank Stage: Prep / Impl Due Date: Status: In progress 3.4 Delivery Monitoring & Sustainability Rating: Substantial Description: Sustainability. As a new activity, involving a Risk Management: The project should provide long lasting benefits for the farmers in terms of improved variety of actors and agencies, with some benefits only being livelihoods and food security. Much of the complexity (in terms of including activities within the broader realized over a number of years, and in a sector where landscape and along the value chain) has been introduced for the sake of ecological and economic implementation of previous reforms has sporadic, sustainability sustainability. Multisectoral activities will be facilitated by the cross-sectoral nature of the PSC and the is a key risk. technical monitoring committee, and by the use of appropriate existing entities to support project implementation at the local level. As a demonstration project, prominent M&E and communications component have incorporated. Despite active attention to marketing issues and inclusion of key private sector actors for premium coffee markets and tourism development, some residual market risk is inevitable.

Resp: Client Stage: Prep / Impl Due Date: Status: In progress Monitoring. Despite the need for a strong M&E system, and Risk Management: The project will achieve efficiencies by building on the PRODEMA’s existing M&E the complexity of the socio‐economic and environmental system and M&E specialist. The indicators measured for the GEF activities will be focused, concentrating effects expected, the availability of funds within the GEF primarily on demonstrating the economic benefits of shade coffee, and attempts will be made to source project is very limited. additional funds specifically for monitoring and research during implementation. Resp: Client Stage: Prep / Impl Due Date: Status: 3.5 Other Rating: Moderate Description: In the long-term, changes in the altitude suitable Risk Management: The sustainable shade-grown coffee program and the SLWM practices to be for agricultural production (including coffee), could lead to supported by the project will promote resilience to climate and economic shocks by increasing food socio-economic, and environmental impacts due to production, conserving soil and water, enhancing food security and restoring productive natural displacement of agricultural production into natural habitats. resources. Although extreme events could impact project activities, significant climate change is unlikely during the project period, and the technical approach mitigates long-term vulnerability.

Resp: Client Stage: Implementation Due Date: Status: 4. Overall Risk Following Review

4.1 Implementation Risk Rating: Substantial

80 Comments: Given the pilot nature of this project and the fact that Burundi will test initiatives new to the country such as shade grown coffee, the project risk is substantial. The intrinsic complexity of working across sectors and the technical risks of introducing shade coffee and ecotourism will make the risk remain substantial. The risk will be minimized since the project will be implemented by an experienced PCU and will gather lessons learned from similar experiences.

Note: Include on average no more than 3 Risk Management Measures per Risk Category

81 Annex 5: Implementation Support Plan BURUNDI: Sustainable Coffee Landscape

Strategy and Approach for Implementation Support

1. The strategy for Implementation Support (IS) has been developed based on the nature of the Project and its risk profile, and aims at making implementation support to the client more flexible and efficient. Implementation support will pay special attention to the risk mitigation measures defined in the ORAF.

2. Procurement. Implementation support will include: (i) providing training to PCU staff; (ii) reviewing procurement documents and providing timely feedback; (iii) providing detailed advice on the Bank’s Procurement Guidelines; (iv) monitoring procurement progress against the detailed Procurement Plan; and, (v) monitoring that implementation of contracts is compliant with the World Bank‟s fiduciary guidelines as well as with contract obligations.

3. Financial management. The FM Implementation support plan will be risk based and will include: (i) the review of audit reports and Interim Financial Reports (IFRs); (ii) advice and training to task team on FM issues as needed; (iii) provision of guidance on the Bank’s fiduciary guidelines as well as procedures spelled out in the Project Implementation Manual (PIM) that was updated from the PIM produced for PRODEMA (iv) provision of timely follow up with PIU of issues arising, e.g. on accounting, reporting and internal controls; and, (v) participation in project supervision missions as appropriate. Based on the current risk assessment, which is moderate, the project will be supervised at least twice a year and may be adjusted when the need arises. To the extent possible, mixed on-site supervision missions will be undertaken with procurement monitoring and evaluation and disbursement.

4. Environmental and social safeguards. The Bank team will supervise the implementation of all safeguard instruments and provide guidance to the PCU on how to address any issues that may come up. In addition, capacity building activities in the areas of environmental and social management will be provided to implementing partners at national and local levels.

5. Memorandum of Understanding. Implementation support will include: (i) guidance on the establishment of MoUs with the partner implementing agencies; (ii) selection of the matching grants for associated subprojects to be financed under component 1.

6. Coordination with other Development partners. Implementation support will include promoting close coordination with other development partners, research institutions and NGOs involved in similar initiatives and operating in the area, such as UNDP and USAID/DAI. The support will facilitate coordination and exchange of knowledge within the TerrAfrica platform that Burundi is part of.

7. Monitoring and evaluation. Implementation support will include the supervision of the outcomes achieved following the results framework as well as facilitating the impact evaluation to be conducted at the end of the project.

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Implementation Support Plan

8. The project will benefit from the joint technical support from the team working on PRODEMA, LVEMP and the proposed GEF project. World Bank staff based in the region as well as in the Washington DC headquarters will participate in the joint implementation support missions. Formal joint implementation support missions and field visits will be carried twice a year. Most of the implementation support costs will be covered by PRODEMA and the GEF will cover additional costs of the missions and visits.

9. Technical inputs: The project will be technically guided by: the TTL, a natural resources management specialist, a social specialist, an environmental specialist, a communication specialist, the procurement specialist, financial management specialist and an impact evaluation specialist. Other Bank staff and/or consultants will be required to provide support as needed in areas such as SLWM practices, protected area management, ecotourism, and coffee production and commercialization. In addition, and as needed, the task team will seek additional highly- specialized technical inputs from technical partners with whom close coordination and collaboration has been established during project preparation.

10. Fiduciary requirements and inputs. Training will continue to be provided on WB fiduciary and procurement procedures. Guidance was provided to review the FM Procedure Manual. Guidance will also be provided for customizing PRODEMA’s accounting system so to adjust it to the new project. Formal supervision on financial management and procurement will be carried out at least twice a year together for both PRODEMA and GEF projected and may be adjusted when the need arises.

11. Safeguards. Environmental inputs will be provided by the task team lead ecologist and other team members who are environmental and natural resource management specialists. The social development specialist in the team will provide timely implementation support on social aspects on a regular basis. Supervision will focus on implementation of the Process Framework, the Indigenous People Plan, the Action Plan for the Batwa, the Environmental Management Plan and Resettlement Policy Framework.

12. Operation. The overall project TTL will provide timely supervision of all operational aspects, as well as ensure coordination with the client and among World Bank team members. The TTLs will lead field supervisions, and as needed, conduct punctual missions to resolve operational issues.

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Table No. 10. Implementation Support Plan Time Focus Skills Needed Projected Resource Partner Role Missions Estimate First twelve Startup phase in Team lead, 2 $50,000 Coordination with months coordination with safeguards, key stakeholders, PRODEMA, financial Initial work with Initiating key project management, communities in activities and quality procurement, first project sites control processes, MIS communications, system operating for core technical team the GEF project, skills, M&E. Financial management systems and procurement practices adjusted to the GEF project and operating effectively

12-48 Monitor overall Team lead and 6 $150,000 Coordination with months Progress, procurement Organizational, key stakeholders, and execution of monitoring and PCU will prepare contracts, Financial evaluation, comprehensive Management, safeguards, project progress Procurement, financial report in Environment and management, advance of each social safeguards procurement, mission, and communications, field plan core technical (including the mid- specialists term review)

Completion Final IS mission, Team lead, M&E, 1 $100,000 PCU will prepare Review impact evaluation and Impact evaluation comprehensive then ICR project progress report in advance of the mission. ICR will start immediately prior to project closure

Skills transfers

13. Careful attention will be given to ensure that skills developed under the project are sustainably transferred to government ministries and other key agencies. To achieve this, government staff involved in project implementation and supervision missions will review progress made with respect to skills transfer.

84 Table No. 11. Skills Mix Required Skills Needed Number of Number Comments Staff Weeks of Trips per year per year Financial 1 1 FM implementation support mission will be Management consistent with a risk-based approach, and will involve a collaborative approach with the entire Task Team (including procurement). Procurement 1 1 Procurement implementation support mission will be consistent with a risk-based approach, and will involve a collaborative approach with the entire Task Team (including procurement). Project Management 12 2 Project implementation support mission will be (TTL, NRM, consistent with a risk-based approach, and will Environmental, involve a collaborative approach with the entire Task Social, Team (including procurement and Legal). communication, M&E specialists)

Table No. 12 Partners

Name Institution Role Benjamin E. Lentz (Chief of DAI Sharing of experiences regarding the PAIR project. Party- Directeur du Programme pour la Promotion de l'Agro- Industrie et des Entreprises Rurales (PAIR))

Thérèse Ndayisenga UNDP Coordination with ongoing SLWM project Léonidas Nzigiyimpa (focal point IUCN – LLS Sharing of experiences and coordination regarding the for LLS- IUCN at Bururi Person work to be conducted in the Bururi Forest Nature in charge of the Bureau located in Reserve, particularly participatory monitoring and Cameroon) support of livelihood alternatives. Ahmed Haidara (TTL Burundi IFAD Sharing of experiences regarding the Projects funded Projects) by IFAD in Burundi. Ferdinand Nderagakura TerrAfrica Knowledge management and exchange regarding SLWM practices Evariste Ngayempore ARFIC Coffee sector Regulatory Agency – coordination and participation in project’s activities Adrien Sibomana InterCafé Coffee professional stakeholders association – coordination and participation in project’s activities Joseph Ntirabampa CNAC Confederation of coffee growers associations

85 Table No. 13. World Bank staff and consultants who worked on the project: Name Role Unit Paola Agostini Senior Economist – Task Team leader (TTL) AFTN3 Stephen Ling Natural Resources Management Specialist (Co-TTL) AFTN3 Rasit Pertev Senior Agricultural Economist and TTL PRODEMA AFTA3 George Ledec Lead Ecologist – Environmental Safeguards AFTN3 Antoine V. Lema Senior Social Development Specialist - Social AFTCS Safeguards Jean-Pascal Nguessa Nganou Senior Economist AFTP5 Dominique Endamana Consultant - Protected Area Management Specialist AFTN3 Edward Dwumfur Senior Environmental Specialist AFTN1 Asferachew Abebe Environmental Specialist AFTN1 Nneoma V. Nwogu Counsel LEGAM Madji Seck Communications Associate PRMVP Arcade Havyarimana Communication Consultant AFTN3 Ana Maria Gonzalez Velosa Environmental Economist - Consultant AFTN3 Jumaine Hussein Consultant Specialist in Agriculture AFTN3 Melance Ndikumasabo Procurement Specialist AFTPE Bella Lelouma Diallo Senior Financial Management Specialist AFTMW Aissatou Diallo Senior Finance Officer CTRLA Leoncie Niyonahabonye Senior Program Assistant AFTN3 Aurore Simbananiye Program Assistant AFTN3 Esther Bea Program Assistant AFTN3 Lyse Kanyambo Team Assistant AFMBI

86 Annex 6: GEF Incremental Cost Reasoning BURUNDI: Sustainable Coffee Landscape

A. Background context

1. Unsustainable agriculture production in Burundi has contributed to the environmental issues of land degradation, loss of biodiversity, poor water management and vulnerability to climate change. The use by farmers of marginal lands on steep slopes and the elimination of tree cover on hillsides for increased production has contributed to land degradation, biodiversity loss as well as expansion of agricultural frontier into protected areas. Water pollution has been caused mainly by discharges of solid and liquid secondary by-products from the coffee cherry depulping/washing stations (CWS). Effluents from the CWSs flow downhill and into the stream or river below. This constitutes the greatest environmental concerns related to the processing of fully washed coffee in the country. Using this water, with large amounts of organic matter that is difficult to degrade, for drinking, irrigation, cultivation, or washing negatively affect the health of the basin and as a consequence the health of farmers and their families. The exploitation of wetlands/marshlands has caused disruptions in the hydrological balance, biodiversity loss, impoverishment of soils and hampering of other ecosystems functions such as flood regulation. Vulnerability to climate change is a major challenge that is impacting negatively on community livelihoods and cut across issues of poverty, health, the environment and economic growth.

2. The project will aim the activities in productive and protected areas towards its development objective and following a landscape approach. The approach integrates socioeconomic and geographic perspectives of the territory in order to manage the land, water, forest and other natural resources. Under the approach the connectivity between ecosystems is considered as well as linking local-site level action (at farm, forest, protected area) to the broader landscape level. In addition, the approach integrates ecosystem goods and services objectives with human well- being objectives in order to promote sustainable natural resources management.

B. Baseline or Business as Usual (no GEF Scenario)

3. There are two baseline projects that work in activities complementary to the GEF Alternative: Agro-Pastoral Productivity and Markets Development Project (PRODEMA) and Lake Victoria Environmental Management Project II (LVEMP II).

4. The baseline Burundi Agro-Pastoral Productivity and Markets Development Project (PRODEMA) is $ 43 M IDA Credit (of which $ 13.5 M are considered co-financing baseline for the GEF increment), that seeks to increase small producers’ productivity and market access for targeted commodities, coffee being one of the priority ones, in the project area. To achieve this objective, the project will: (i) support agricultural technology transfer in targeted value chains and rehabilitate irrigation infrastructure to increase productivity, and (ii) strengthen the capacities of producers and their partners to link to the market by improving post-harvest infrastructure, market intelligence, and feeder roads. These baseline activities complement the GEF increment since they work along the value chain, and focus on infrastructure, that will not lead to Global Environment Benefits (GEF), while the GEF increment will focus on the needed

87 investment on the land (agriculture land, protected areas, and around washing stations) to generate GEB.

5. The baseline PRODEMA IDA project includes three components:

Component 1: Support to agricultural productivity and access to markets. This component will provide matching grants to improve productivity of agricultural investments and access to markets of targeted commodities. These investments will be at the production, post-harvest collection, storage, transformation, processing, and marketing stages in the targeted value chains, including coffee and will focus on hard infrastructure to increase productivity Total value of the component: $ 30.08 M (of which $ 7 M considered as baseline co-financing) Main related output: Average yield of coffee (t cherries/ha increased from 0.4 to 0.8 by end project; and percentage of coffee marketed directly by producers increased from 10% to 30% by end of the project.

Component 2: Irrigation development and feeder road rehabilitation. This component will finance the rehabilitation/development of: (i) marshland irrigation; (ii) protection and conservation of watersheds adjacent to the irrigation schemes; and (iii) tracks within marshlands and rural roads linking marshlands to the communal road network. It will also support the establishment and capacity building of water user associations to manage and maintain the irrigation systems and the preparation and implementation of management and maintenance programs for the irrigation systems. This component is expected to facilitate producers’ access to markets for the main commodities, including coffee. Total value of the component: $ 9.5 M (of which $ 3 M considered as baseline co-financing) Main output: 100 km of feeder roads rehabilitated and 2,000 ha of marshland irrigation rehabilitated

Component 3: Management and coordination of project activities This component will finance the coordination, planning, management, monitoring and evaluation, audits, and other operating costs of the Project Coordination Unit (PCU) and other activities necessary for project coordination and management. Total value of the component: $ 5.5 M (of which $ 3.5 M considered as baseline co-financing since the PCU in MINAGRIE will be shared between both projects)

6. The Lake Victoria Environmental Management Project II (LVEMP II) is a regional $30 M IDA project aiming to address the socio-environmental impacts of environmental degradation in the Lake Victoria Basin. More specifically, it seeks to (i) improve the collaborative management of the transboundary natural resources of the LVB for the shared benefits of the five EAC Partner States; and (ii) reduce environmental stress in targeted pollution hotspots and selected degraded sub-catchments to improve the livelihoods of communities who depend on the natural resources of the LVB. The total funds for Burundi are $ 15 M. The baseline activities considered as co-financing of the GEF increment are $ 5.8 M.

88 7. The baseline activities from LVEMP II to the GEF increment are: Component 1: Strengthening institutional capacity for managing shared water and fisheries resources. This component focuses on building the capacity and increasing the effectiveness of the existing national institutions to manage the water and fisheries resources in the Kagera River Basin, and improve the cooperative management of shared transboundary natural resources of the Lake Victoria Basin. Total value of the component: $ 3.5 M (of which $ 0.3 M considered as baseline co-financing) Main Output: Adoption by Burundi of water and fisheries policy and Use of reliable environmental health and natural resources (land, water, and fisheries) data for policy decisions and planning sustainable development and management

Component 2: Point source pollution control and prevention. The main objective of this component is to reduce environmental stresses from point source pollution, especially municipal wastewaters, on the rivers, wetlands, and lakes in the LVB portion of Burundi. It will finance the identification of point source pollution hotspots in priority municipalities, as well as feasibility studies and technical designs to address some of the main ones in selected urban areas. In addition, investments for sanitation in public facilities and capacity building for sanitation solutions in private dwellings will also be supported. Total value of the component: $ 7.5 M (of which $ 1.0 M considered as baseline co-financing) Main output: Reduced environmental pollution coming from coffee washing station.

Component 3: Watershed management. This component seeks to reduce environmental stresses in the LVB through integrated watershed management, including the rehabilitation of degraded wetlands and river banks, and the adoption of on-farm soil and water conservation programs on the hillsides. There will be three sub-components: (i) Restoration of wetlands and riparian vegetation; (ii) Rehabilitation of hillside areas for production and conservation; and (iii) Community driven development for livelihoods improvement. Total value of the component: $ 13. 4 M (of which $ 4 M considered as baseline co-financing) Main Output: 8,000 ha under SLM by year 5 in target sub catchments

Component 4: Project coordination and management. This component will provide resources necessary for effective Project coordination, regional and national levels communication and capacity building, monitoring and evaluation activities, and sharing of information among countries. Total value of the component: $ 5.5M (of which $ 0.5 M considered as baseline co-financing as some of the project’s activities will be conducted by the MEEATU)

8. In the Project Identification Form (PIF) submitted in September 2011, it was established that MEEATU was the project’s implementing agency and the implementation unit was going to be shared with LVEMP. However, it was later decided after consultations with the GoB and the WB team that, given their scope of activities, PRODEMA would be a better fit for the proposed project. Therefore it was decided that the project would build on the structure of PRODEMA’s

89 PCU, which has an excellent reputation and the best capacity to manage additional funds from the GEF. This was approved during project preparation by MINAGRIE on September 2012. This modification is reflected in the amounts considered as baseline for each of the projects’ management component.

C. GEF Alternative

9. With the GEF Alternative, the project will assist Burundi to improve sustainability of the country’s coffee landscape in selected regions through: (i) implementing sustainable land and water management practices in productive areas in order to prevent further land degradation and rehabilitate degraded areas (factors that have negatively impacted coffee production); (ii) establishing a shade-grown coffee pilot program that promotes, with environmentally-friendly production technologies, a polyculture that includes coffee as well as various types of trees and other plants that provide additional products for income generation and consumption; (iii) promoting sustainable management in a key PA, under the premise that protected areas demarcation has been agreed between key stakeholders and the neighboring local communities have alternative sources for improving livelihoods, so that the risk of agricultural expansion to the area will be reduced; (iv) addressing point-source pollution through the establishment of efficient, environmentally-friendly coffee processing technologies and the strengthening of policies and regulations; (v) promoting marketing and commercialization strategies for high- quality coffee, planted with shade and processed with reduced environmental negative impacts. and (vi) piloting initiatives that generate alternative sources of income such as agri-tourism and ecotourism. Accessing higher value markets with shade-grown coffee will benefit the coffee sector as well as generate an incentive for the conservation and improved management of the environment. These measures will also increase communities’ resilience to adverse shocks. All of the above will be integrated under a landscape approach that considers both geographical and socio-economic considerations in order to manage the productive and protected areas within a landscape mosaic.

10. The proposed project will add value to the baseline projects: PRODEMA and LVEMP, which in itself generate substantial benefits for the rural households in the areas of intervention, as well as important benefits for the country’s society as a whole. PRODEMA’s activities generate the following benefit streams: (i) increased value of production generated by sub- projects on hillsides and plateaus and in irrigated marshlands rehabilitated and developed under the project; (ii) returns to investments from sub-projects concerning small commercial infrastructure and processing facilities, as well as investments in access roads; (iii) returns to investments in soil erosion and conservation on watersheds surrounding irrigated areas (through sustainable land management technologies); and (iv) benefits from capacity building for farmer groups and cooperatives and other organizations along the value chain. Project activities financed under LVEMP II are expected to generate three main benefit streams: (i) local benefits within the project areas; (ii) regional benefits downstream of the project areas; and (iii) global public benefits beyond the Kagera River Basin.

11. The activities that will constitute the components of the project to be financed by GEF Alternative are the following:

90 Component 1: Sustainable Coffee Landscape Management (US$2.82 million)

12. The component would finance technical assistance, workshops, goods, works, matching grants for associated subprojects, services and operational costs for the following activities. The component will support sustainable land and water management practices in degraded areas of the landscape mosaic. Subprojects will be awarded to applicants (farmer groups, associations or cooperatives) that promote on-the-ground training and investments in SLWM practices. The project will also support agro-forestry subprojects to promote/improve shade grown coffee plantations through on-ground investments and training. Support will be provided to poly-culture and intercropping systems that mix coffee plantings with various types of trees and other plants that help maintain biological diversity, moderate climate change, protect from extreme weather, produce additional sources of income and enhance food security. In addition, research will be conducted regarding the effects of different kind of shade trees on land productivity, soil and water quality, and incidence of pests, among others. The project will finance demonstration sites in the research centers managed by ISABU, as well as selected demonstration farms. Finally, the project will support strengthening the protection and management of the Bururi Forest Nature Reserve (BFNR), because of its globally significant biodiversity and the linkages to nearby areas of coffee cultivation within the landscape mosaic. This support will also include sustainable livelihood matching grants for associated subprojects to be financed for the communities living around Bururi that are dependent on its natural resources (including the Batwa families).

Component 2: Addressing Pollution Point Sources in Coffee Washing Stations (US$0.59 million)

13. This component would finance works, goods, matching grants for associated subprojects, services, technical assistance, training and operational costs in order to promote environmentally sound water management and treatment by selected coffee washing stations (CWS). The project will expand current initiatives and pilot cost-effective, integrated, environmentally- friendly systems for the processing phase of the coffee value chain. This will be achieved by upgrading and establishing six effluent control systems including water-efficient eco-pulpers at washing stations (two for each of the three provinces where the project will intervene).

14. The component will also finance the establishment of standards and regulations to promote the environmentally sound operation of CWSs. In addition, it will strengthen the institutional capacity to monitor the implementation of sustainable technologies and the enforcement of regulations and policies.

Component 3: Diversification of Livelihoods (US$0.41 M)

This third component would finance works, goods, technical assistance, workshops and training, matching grants for associated subprojects and operational costs for the following activities.

15. The component will support a marketing study and action plan to be conducted by InterCafé to identify target markets for the region’s coffee, along with potentially suitable certification

91 schemes. Following the marketing study, the project will finance initial certification costs for three farmer cooperatives and washing stations supported under the previous components. The certification process will promote or strengthen increases in the adoption of environmentally friendly management practices.

16. The component will also support an ecotourism pilot in the Bururi Forest Nature Reserve and will pilot two community based agritourism initiatives in selected coffee farms. These pilots will work on the premise that if key stakeholders and the local communities living in the buffer zones have alternative sources for improving livelihoods compatible to biodiversity conservation, then the incentive to protect the forests is increased and the risk of expansion of agriculture to the Reserve or other protected areas will be reduced. The pilots will provide lessons for future scaling up.

Component 4: Knowledge and Learning (US$0.38 million)

17. The component will finance operational costs, services and technical assistance for the project’s management, project evaluation as well as communication activities. Specifically, the project will finance the employment of an additional accountant and expert in sustainable land management to integrate PRODEMA’s PCU, an Impact Evaluation to assess the impact of shade coffee on specific variables and a communication strategy for the project.

D. Fit with GEF Strategic Priorities

18. The project will be developed using a multi-focal area strategy to help ensure good integrated ecosystem management approaches. These can help secure a robust mix of primary and secondary ecosystem services from the landscape mosaic while adapting to climate change and variability.

19. Land Degradation. The project is aligned with the GEF-5 strategic objectives for the Land Degradation focal area, specifically with objective LD-1, “Improved agricultural management”. The project will address the pressures from competing uses on important landscapes. It will focus on: investments and capacity development to improve decision-making in productive landscapes particularly shade grown coffee plantations as well as implementing sustainable land and water management practices in eroded areas. This will ensure the maintenance of ecosystem services that are important both for the global environment and peoples’ livelihoods.

20. Biodiversity. The proposed project is also in line with the GEF-5 strategic objectives for the Biodiversity focal area. The project aligns primarily with the GEF objective BD-1 “Improve Sustainability of Protected Area Systems” and particularly outcome 1.1 “Improved management effectiveness of existing and new protected areas”. The project will support activities to help reduce the negative impacts of human activities (e.g. agriculture and resource extraction or, more specifically, coffee production and processing) on protected area biodiversity, taking into account the contribution of all components of biodiversity to ecosystems functioning, economic development and human well-being. The project will support activities towards improved

92 management effectiveness of the Bururi Forest Nature Reserve. The project also aligns with the GEF objective BD-2 “Mainstream BD Conservation and Sustainable Use into Production Landscapes, Seascapes and Sectors” and mainly outcome 2.1 “Increase in sustainably managed landscapes and seascapes that integrate biodiversity conservation”. The promotion of shade grown coffee plantations will help provide important habitat for a wide array of biodiversity. The project will contribute to GEF’s interest in removing the barriers to enhancing, replicating and extending environmental certification systems in productive landscapes and increase the production of biodiversity-friendly goods.

21. Sustainable Forest Management. The project will aim at reducing pressures on forest resources and generating sustainable flows of ecosystems services (SFM/REDD+ - 1). The project will be implemented following the landscape approach (promoted through the SFM strategy) that integrates people's livelihood objectives in the management of the different ecosystems within the forested landscape. Specifically the project will support63 the sustainable management of the forest created by the shade grown trees in the coffee areas, the monitoring of carbon benefits generated by the project, promoting an ecotourism pilot in forest areas and also, helping Burundi becoming a FCPF country for REDD+ strategy64.

E. Incremental value added by GEF funding and Global Benefits

Global Environmental Benefits (GEB)

22. The project is using as baseline two recently approved World bank IDA projects that only if considered together build the base for the GEF incremental project. Still under this baseline scenario, the capacity of Burundi to tackle land degradation, biodiversity, sustainable forest management, and climate change adaptation would be critically low, and the gap between the efforts to address the challenges and the scale of the problem would continue.

23. The GEF increment would center on securing ecosystems services in productive landscape, forested areas and protected areas by promoting the uptake of SLWM practices and approaches (with an emphasis in shade grown coffee) that have global environmental benefits. These include soil and water conserving practices such as shelterbelts, multipurpose trees on productive lands, small-scale irrigation, and water harvesting, water management in CWS. Land use planning and protected area management will complement these practices.

24. The project is designed with multiple interlinked GEF Focal Areas. The resulting global environmental benefits include sustainable management of natural resources (land, water, and

63 At initial stages of preparation, the project team planned to conduct a payment for environmental services (PES) pilot under the SFM GEF focal area. However, in order to simplify the project and make its outputs more realistic, the team received guidance to focus on piloting shade grown coffee and eliminating the pilot in PES. Other changes have been made during preparation in order to adjust to new circumstances, focus on achievable and realistic outcomes and respond to the region’s needs. 64 Reducing emissions from deforestation and forest degradation, and the role of conservation, sustainable management of forests, and enhancement of forest carbon stocks are a set of activities collectively referred to as “REDD+”.

93 vegetation) on priority landscapes; protection of biodiversity on a critical protected area; protection against erosion and desertification in priority areas; and the potential for carbon sequestration. These benefits will also contribute to increased resilience in the country.

Carbon benefits in shade grown coffee: The project will promote the incorporation of shade in 3,000 ha of areas planted with coffee. Indicatively the shade will consist of Albizia, Erythrina, Cordia and Acacia shade trees as well as some intercropping with banana trees. Approximately 200 shade trees will be planted per ha. Assuming that the aboveground biomass of the shade trees is 195 kg per tree, and considering that the baseline is no shade trees and the increment represents 200 stems per ha, then the biomass will be 39,000 kg/ha or 39t biomass/ha. Given that biomass is around 50% carbon, then the shade trees will generate around 39.67 t CO2/ha (19t carbon/ha times 44/12 which is the stoichiometric ratio of CO2 to C). Assuming there is a 20 year rotation, the figure comes to approximately 2t CO2/ha/yr. Considering that the shade will cover 3,000 ha, the total amount of carbon sequestered will be 6,000 t CO2/yr or 120,000 t CO2 assuming 20 years of expected lifetime of the project impacts. The Project Implementation Manual (PIM) adjusted for the proposed project will include more details about the activities to be carried out to increase carbon benefits and how these benefits will be measured.

Carbon benefits as forest degradation is prevented: Seven percent of the country’s area is forest; i.e. 194,838 ha or 1,948 km2. According to the World Bank Africa Forest Strategy (“Forests, trees and woodlands in Africa: An action plan for World Bank engagement”), the annual deforestation rate from 2000 to 2010 was 1.31%. Taking this rate, every year 2,552 ha of forest are degraded. The project will protect the 2,000 ha of natural vegetation that are present in the Bururi Forest Nature Reserve (total area: 2,600 ha). Considering the overall country’s deforestation rate, the project could prevent the degradation of 26.2 ha per year. In this scenario, the project will save 240 tons of C02 per year (considering the 26.2 ha/yr destroyed in the baseline and the CO2 amount of 9.17 t CO2/ ha/yr). Over a 20-year period, 4,805 t of CO2 would be preserved or rather not emitted into the atmosphere.

Incremental Cost Calculations

25. The GEF contribution of US$4.20 million to the proposed project would leverage US$0.5 million from the GoB (in kind combined including time of its staff working in the project), US$0.5 from InterCafe (in kind, including staff work), US$0.3 as in kind contribution from the local communities and a grant contribution of $0.2 million from TerrAfrica fund (to support the implementation of the Impact Evaluation, the finalization of the SLWM Investment framework, south-south study tours and translation of technical manuals).

26. The GEF will complement the following baseline: US$13.5 million from PRODEMA and US$5.8 million from LVEMP II. The total cost of the GEF alternative is estimated at $US 25 million, with an incremental financing of US$5.7 (from GEF and other contributions) and baseline support of US$19.3 million.

94 Table No. 14. Role of Cofinancing

GEF OTHERS Project Components grant PRODEMA LVEMP TOTAL 1. Sustainable coffee landscape 2.82 0.6 7.5 3.5 14.4 management 2.Addressing pollution point sources in 0.59 0.1 0 1.3 2.0 coffee washing stations 3. Diversification of livelihoods 0.41 0.1 2.5 0.5 3.5 4. Knowledge and Learning 0.38 0.7 3.5 0.5 5.1 TOTAL 4.20 1.5 13.5 5.8 25.0 NOTE: component 4, includes Project Management.

95 Annex 7: Impact Evaluation for shade grown coffee BURUNDI: Sustainable Coffee Landscape

1. An independent impact evaluation will be conducted for the project to determine the impact of shade grown coffee cultivation on specific variables. This has been considered a key project’s activity given that it is piloting different mechanisms and interventions that can potentially be scaled up in the country. Prior to the impact evaluation, an implementation and work plan will be designed, shared and approved by key stakeholders to ensure that it will assess impact adequately. The impact evaluation will be in line with PRODEMA’s monitoring and information system. 2. An Impact evaluation is different from project monitoring. Monitoring is a continuous process that tracks what is happening within a project/program and uses the data collected to inform program implementation and day-to-day management and decisions. Using mostly administrative data, monitoring tracks program performance against expected results, makes comparisons across programs, and analyzes trends over time. Evaluations are periodic, objective assessments of a planned, ongoing, or completed project, program, or policy. Evaluations are used to answer specific questions related to design, implementation, and results. In contrast to continuous monitoring, they are carried out at discrete points in time and often seek an outside perspective from technical experts (Gertler et al. 2011). 3. Impact evaluations are a particular type of evaluation that seeks to answer cause-and-effect questions. Unlike general evaluations, which can answer many types of questions, impact evaluations are structured around one particular type of question: What is the impact (or causal effect) of a program on an outcome of interest? 4. Impact Evaluations are part of a broader agenda of evidence-based policy making. In a context in which policy makers, donors and civil society are demanding results and accountability from public programs, impact evaluation can provide robust and credible evidence on performance and, crucially, on whether a particular program achieved its desired outcomes. Globally, impact evaluations help build knowledge on the effectiveness of programs. Impact evaluations are especially useful when countries test out innovative, new interventions that seem promising in theory but for which we have little hard evidence (Gertler et al. 2011). Since Burundi is one of the TerrAfrica participant countries, the results of the IE will become part of TerrAfrica’s knowledge platform. 5. The process to design and conduct the IE will follow previous local expertise, WB expert guidance and will follow the guidelines included in these WB documents: - Gertler, P.. Martinez, S., Premand, P., Rawlings, L. and Vermeersch, C. Impact Evaluation in Practice: A New Guide. 2011. The World Bank, Washington D.C. This handbook includes information about designing and implementing an IE. - Vermeersch, C., Rothenbühler, E and J.R. Sturdy. 2012. Impact Evaluation Toolkit: Measuring the impact of Results- based Financing on Maternal and Child Health. Version 1.0. The World Bank, Washington D.C. The toolkit is the practical piece of the handbook. This is a hands-on guide (June, 2012) that has been produced for measuring impacts of Results-based financing focused on Maternal and Child Health. However,

96 many parts can apply to IE in general.

6. The IE will be conducted considering the following steps.

Building the Impact Evaluation Team

7. A consultancy/firm (either national research center or international firm) will be hired to facilitate the IE, working closely with key project members. The details of the consultancy will be discussed as part of the ToRs but the technical team of any impact evaluation will almost always need certain members (Gertler et al. 2011). They include the following: - Evaluation manager. Responsible for establishing the key objectives, research questions, indicators, and information needs of the evaluation (using a theory of change such as a results chain); selecting the evaluation methodology; identifying the evaluation team; and drafting terms of reference for the parts of the evaluation to be contracted or subcontracted. - Sampling expert. Responsible for the work on power calculations to determine the appropriate sample sizes for the indicators established, select the sample, review the results of the actual sample versus the designed sample, and provide advice at the time of the analysis, for instance, on how to incorporate the sampling weights for the analysis, if needed. If the sampling expert is an international consultant, he or she will often need to be paired with a local information coordinator responsible for collecting the data from which the sample will be drawn. - Designer of data collection instruments. Responsible for designing the data collection instruments and accompanying manuals and codebooks. This person works with the evaluation manager to ensure that the data collection instruments will indeed produce the data required for the analysis and is also involved in pilot testing the questionnaires. - Fieldwork team. The team includes a fieldwork manager who can supervise the entire data collection and the supervisors and interviewers. - Data managers and processors. They design the data entry programs, enter the data, check its validity, provide the needed data documentation, and produce the basic results that can be verified by the data analysts. - Data and policy analysts. The analysts work with the data produced and with the evaluation manager to conduct the required analysis and write the evaluation reports.

8. The involvement of local researchers will add perspective and credibility to the analysis as well as building local capacity for evaluation work. 9. A mission to Burundi will be prepared with the participation of the WB’s IE Experts who will work together with the monitoring team to produce the Terms of Reference for the IE. The mission will be arranged after the project’s negotiations and before effectiveness.

97 Designing the IE

10. Following the ToRs designed, the IE team together with key members of the PCU team, will build a results chain for the impact evaluation65 considering: (i) the specific intervention to be evaluated; (ii) the population that will be targeted; (iii) the inputs, outputs, activities and indicators that will be used to assess impact; and, (iv) the primary evaluation questions and hypothesis. 11. The impact evaluation questions will follow directly from the theory of change that is associated with a particular intervention. However, at this stage some of the questions that have been suggested for discussion are:

 What is the impact of shade grown coffee on the economic returns from the coffee farm?  What is the impact of shade on the coffee’s productivity?  What is the impact of shade grown coffee on biodiversity?  Does certification of shade grown coffee certification has a positive impact on biodiversity conservation?

12. Complementary to the above, some additional questions that the IE will aim to address through qualitative data are the perceived trade offs between shade grown coffee cultivation and sun grown, and the identification of mechanisms that can be employed to mobilize and sustain community interest and participation in the shade grown coffee investments. The impact evaluation will also consider the results achieved in the demonstration plot established by ISABU that will generate technical lessons about the most suitable shade for the region. 13. Based on the results chain, an evaluation strategy will be defined and included in the Impact Evaluation design document. The strategy will: identify the causal impact of the intervention; identify the treatment and comparison group (or groups); define the inclusion criteria for the sampling frame; and, conduct calculations to identify the appropriate sample size for the study so its statistically appropriate. 14. One of the key elements in an IE is the identification of the group of project participants (the treatment group) and the group of nonparticipants (the comparison/counterfactual group) that are statistically identical in the absence of the project66. The treatment and comparison groups should also react to the program in the same way and cannot be differentially exposed to other interventions during the evaluation period. The exact strategy for selecting the comparison group will depend on the specific intervention and the local operational context. By comparing the change over time in target outcomes in intervention and comparison groups (a so-called

65 The results chain is build based on a theory of change that describes how an intervention is supposed to deliver the desired results. It describes the causal logic of how and why a particular project, program, or policy will reach its intended outcomes. A theory of change is a key underpinning of any impact evaluation, given the cause-and-effect focus of the research. As one of the first steps in the evaluation design, a theory of change can help specify the research questions. Theories of change depict a sequence of events leading to outcomes. They explore the conditions and assumptions needed for the change to take place, make explicit the causal logic behind the program, and map the program interventions along logical causal pathways (Gertler et al. 2011). 66 Although it is not necessary that every unit in the treatment group be identical to every unit in the comparison group, on average the characteristics of treatment and comparison groups should be the same.

98 difference-in-differences approach), the project’s causal impact on these outcomes would be ascertained.

Preparing and implementing the data collection

15. The team will need to ensure proper coordination between the intervention and IE activities. Coordination is key throughout the whole process but at initiation it will be needed to ensure that the baseline measurement of indicators is collected before the intervention is initiated. Specifically, baseline data collection will be initiated prior to the start of any intervention regarding shade coffee cultivation. 16. During this step, the team will determine: the type of data that will be collected and analyzed (quantitative and/or qualitative); the sources of the data; the level of collection (household, farmers, cooperative, etc); the people to interview; the survey instrument(s) to be used; the frequency of data collection; general logistics; etc. Field procedures and survey instruments will be adjusted according to the specific field conditions, local culture and institutional environments.

Storing and Accessing Data

17. The IE plan will need to define the mechanisms and procedures to ensure that data collected is safely stored and properly documented; that teams will have access to the data in a way that meets their needs; and, that data ultimately will become publicly available, while respecting confidentiality.

Analyzing Data and Disseminating Results

18. Following the strategy and methodology previously designed, the team will conduct the analysis of the data aiming at obtaining statistically significant results. The team will then disseminate the descriptive and analytical products. Timely and appropriate dissemination is key to ensure that the impact evaluation will have an impact on policy. 19. The following means of dissemination will be considered:

(i) Written document: Impact reports will be shared with the Government, Bank management and with other key stakeholders before being sent for publication. Several written reports will be will be produced at the various states of the IE process:

 Baseline report: this report will assess the validity of the IE design. It will also indicate the results of the tests to assess the balance of the treatment and comparison samples.

99  Mid-term report: this report will issue a first assessment of impact and cost-effectiveness (if enough exposure) and provide recommendations for the implementation of the intervention if unexpected impacts or operational issues are detected.

 Report at project completion: the report will evaluate the impact and cost-effectiveness, produce recommendations for the scale-up, continuation and possible improvements of the intervention and provide general policy recommendations. (ii) Country-based presentation and dissemination workshops: Results will be shared to national and local stakeholders in a workshop format. Local stakeholders will help interpret unexpected results, and a broader audience will be reached nationally. (iii) Policy briefs: Executive summaries of the project and the IE results will be useful for policy dialogue in other countries, including the TerrAfrica platform.

100 Annex 8: Documents in project files BURUNDI: Sustainable Coffee Landscape

1. Bank Documents related to the project

- Project Identification Form, September 21 2011. - Project Concept Note, February 2012. - Project Information Document (Concept Stage), February 2012. - Integrated Safeguard Data Sheet (Concept Stage), February 2012. - Minutes of the Concept Note Review Meeting (February 16th, 2012) - Mission Aide Memoire (March 12 to 16, 2012) - “Developpement des Systemes Durables a Base de Cafe Et Adaptes aux Changements Climatiques”. Rapport du Seminaire atelier D’elaboration des axes strategiques tenu a Kayanza du 16-17 Aout 2012. - Mission Aide Memoire (September 24 to 30, 2012)

2. Reference Documents

- Alers, Marcel; Bovarnick Andrew; Boyle Tim; Mackinnon Kathy; Sobrevila Claudia (2007). Reducing Threats to Protected Areas Lessons from the Field. The International Bank for Reconstruction and Development / THE WORLD BANK and United Nations Development Programme, USA - BirdLife International. Important Bird Areas in Africa and Associated Islands: Priority Sites for Conservation, 2001. - Ernesto Illy Foundation. Sustainable Coffee Farming and Processing Integrated approach. II Edition. Master in Coffee Economics and Sciences. 2012. - Ernesto Illy Foundation. Sustainable Supply Chain Management - A view of the coffee sector. II Edition. Master in Coffee Economics and Sciences. 2012. - FAO. TerrAfrica Partnership Publication. Sustainable Land Management in Practice. Guidelines and Best Practices for Sub-Saharan Africa. 2011. - Gertler, P.. Martinez, S., Premand, P., Rawlings, L. and Vermeersch, C. Impact Evaluation in Practice: A New Guide. 2011. The World Bank, Washington D.C. - Government of Burundi, Ministry of Water, Environment, Land and Urban Planning and IUCN. Landscape of Burundi. Capitalisation of Outputs and Lessons Learned. August, 2010. - International Development Association and International Finance Corporation. Country Assistance Strategy for the Republic of Burundi for the period FY13-16. September 11, 2012. Report No. 72333-BI - International Monetary Fund (IMF). Burundi: Poverty Reduction Strategy Paper II (PRSP II). IMF Country Report No. 12/224. August 2012 - IUCN. Livelihoods and Landscapes Strategy: Results and Reflections. Gland, Switzerland: IUCN. 2012. - Lakew Desta, Carucci, V., Asrat Wendem-Ageňehu and Yitayew Abebe (eds). 2005. Community Based Participatory Watershed Development: A Guideline. Ministry of Agriculture and Rural Development, Addis Ababa, Ethiopia.

101 - Ledeq, George. Biodiversity-Friendly Shade Coffee. Primer Foro Internacional de Café y Biodiversidad. Chinchina, Caldas, Colombia. August, 2000. - Ledeq, George. Environmental implication of land administration and land reform projects: Some lessons learned. - Leibel, N. Protecting Biodiversity by Working with Agribusiness Supply Chains. UNDP. 2012. - Ngayimpenda E., Nkezabahizi I.D., Ahishakiye H. Strategie D’Investissement et Plan de Financement du Plan d’action National de Lutte contre la Degradation des Terres. Rapport definitif. Universite du Lac Tanganyika. Minitere de L’eau, de L’Environnement, de L’Amenagement du Territoire et de L’Urbanisme. September, 2012. - Ministry of Planning and Communal Development/Forecasting Unit. United Nations Development Programme in Burundi. Vision Burundi 2025. June, 2011. - Moges Abebe, Yitebitu Moges. The impact of overstorey trees on sustainable coffee (Coffea arabica L.) production in Southern Ethiopia. The Faculty of Science of the Leibniz Universität Hanover. Dissertation Doctor of Natural Sciences. 2012. - Ottaway, Anne and Benjamin E. Lentz. A Strategic Guide for Marketing Burundi Specialty Coffee. Programme pour la Promotion de l’AgroIndustrie Et des Entreprises Rurales (PAIR). USAID-Burundi. September, 2009. - Overview of Bururi Forest in website http://bioval.jrc.ec.europa.eu/APAAT/pa/9164/ - Plumptre, A.J., Behangana, M., Davenport T., Kahindo C., Kityo R., Ndomba E., Nkuutu D., Owiunji I., Ssegawa P., and Eilu G. The Biodiversity of the Albertine Rift. Albertine Rift Technical Reports No. 3, Wildlife Conservation Society. 2003 - PROCAFE – Fundacion Salvadoreña para Investigaciones del Café. Guía para la producción de café bajo sombra amigable con la biodiversidad. Proyecto Café y Biodiversidad. 2001. - Republic of Burundi. Growth and Poverty Reduction Strategic Framework Summary Report. Second Vice-Presidency of the Republic of Burundi. With support from UNDP. February 2012 - Republic of Burundi. The Great Achievements of the Government in Socioeconomic Governance. Second Vice-Presidency of the Republic of Burundi. Third edition. October 2012. Republique of Burundi. Conférence_Des_Partenaires_Au_Développement Du_Burundi. Note de Synthese Sure le Secteur Agricole au Burundi. October 2012. - Republique of Burundi. Conférence_Des_Partenaires_Au_Développement Du_Burundi. Note de Synthese Sur L’environnement au Burundi. October 2012 - Republique of Burundi. Conférence_Des_Partenaires_Au_Développement Du_Burundi. Note Sectorielle sur le Genre au Burundi. October 2012 - Republique of Burundi. Conférence_Des_Partenaires_Au_Développement Du_Burundi. Note de Synthese Sure le Secteur du Tourisme au Burundi. October 2012 - Republique du Burundi. Ministere De L’agriculture Et De L’elevage. Projet De Productivite Et De Developpement Des Marches Agricoles. (Prodema) Guide De Gestion Des Sous-Projets. Volume II. Juillet 2010. - Republique du Burundi. Ministere De L’agriculture Et De L’elevage. Projet De Productivite Et De Developpement Des Marches Agricoles. (Prodema) Manuel D’execution. Volume I. Juillet 2010.

102 - Rice, Robert with the assistance from Mauricio Bedoya. The Ecological Benefits of Shade- Grown Coffee: The Case for Going Bird Friendly®. Smithsonian Migratory Bird Center - National Zoological Park. September, 2010. - The Scientific and Technical Advisory Panel. Environmental Certification and the Global Environment Facility: A STAP Advisory Document. September 2010. - The World Bank. Africa’s Future and the World Bank’s Support to It. Africa Region.March, 2011 - The World Bank. Agro-Pastoral Productivity and Markets Development Project. Project Appraisal Document. April 6, 2010. - The World Bank. Enhancing Competitiveness and Resilience in AFRICA -Action Plan for Improved Natural Resource and Environment Management. World Bank, 2012. - The World Bank. Forests, trees and woodlands in Africa. An action plan for World Bank engagement. Africa Region. 2012. - The World Bank. How Environment Sustains Development. World Bank Group Environment Strategy – Toward a Green, Clean and Resilient World for all. May 2012. - The World Bank. Lake Victoria Environmental Management Project II APL 2. Project Appraisal Document. May 23, 2011 - The World Bank. Making Development Climate Resilient: A World Bank Strategy for Sub- Saharan Africa. Africa Region. Sustainable Development Department. October 2009. - The World Bank. Promotion of Biodiversity Conservation within Coffee Landscapes. Medium Sized project brief. 1998. - The World Bank. Rapid Strategic Environmental Assessment of Coffee-Sector Reform in Burundi. Final Report. 2011. - The World Bank. Toward Africa’s Green Future: World Bank Support in Biodiversity Conservation, 2012. - The World Bank – International Development Association. Sixth Economic Reform Support Grant (ERSG VI). Concept Stage Program Document. August, 2012. - USAID – Burundi. Burundi Agribusiness Program: PY 5 Third Quarter Report. 1 April – 30 June, 2012. - Vermeersch, C., Rothenbühler, E and J.R. Sturdy. 2012. Impact Evaluation Toolkit: Measuring the impact of Results- based Financing on Maternal and Child Health. Version 1.0. The World Bank, Washington D.C.

103 IBRD 39656 BURUNDI SUSTAINABLE COFFEE LANDSCAPE PROJECT PROJECT PROVINCES CITIES AND TOWNS COFFEE WASHING STATIONS (CWS): PROVINCE CAPITALS (Only shown within the Project Provinces) NATIONAL CAPITAL STATE OWNED MAIN ROADS PRIVATE PROVINCE BOUNDARIES NATIONAL PARKS, WILDLIFE RESERVES, AND PROTECTED AREAS INTERNATIONAL BOUNDARIES

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010203040 Kilometers This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank 0 10 20 30 Miles Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. 29°E 30°E 31°E NOVEMBER 2012