Document of The World Bank Public Disclosure Authorized ReportNo. 13974-VE STAFF APPRAISAL REPORT Public Disclosure Authorized VENEZUELA INPARQUES PROJECT MAY 12, 1995 Public Disclosure Authorized Public Disclosure Authorized Natural Resources and Rural Poverty Operations Division Country Department II Latin America and the Caribbean Regional Office CURRENCY EQUIVALENTS (April 1995) Currency Unit = Bolfvar (Bs) US$1.00 = Bs 170 US$5,882 = Bs 1 million WEIGHTS AND MEASURES Metric System GOVERNMENT FISCAL YEAR January 1 - December 31 GLOSSARY AND ACRONYMS ABRAE Protected Areas (Areas Bajo P.gimen Administrativo Especial) CAIAH Amazonian Center for Environmental Research (Centro Amaz6nico de Investigaci6n Alejandro de Humboldt) CORDIPLAN Ministry of Coordination and Planning (Ministerio de Coordinaci6n y Planificaci6n) EU European Union FAC National Guard (Fuerzas Armadas de Cooperaci6n) GEF Global Environmental Facility ICB International Competitive Bidding INOS National Institute of Sanitation (Instituto Nacional de Obras Sanitarias) INPARQUES National Institute of Parks (Instituto Nacional de Parques) IUCN International Union for the Conservation of Nature LOA Organic Law on the Environment (Ley Organica del Ambiente) LOOT Organic Zoning Law (Ley Orginica para la Ordenaci6n del Territorio) llanos Venezuelan plains MAC Ministry of Agriculture and Livestock (Ministerio de Agricultura y Crsa) MARNR Ministry of Environment and Renewable Natural Resources (Ministerio del Ambiente y Recursos Naturales) NBF Not Bank-Financed NCB National Competitive Bidding NGO Non-Governmental Organization O&M Operations and Maintenance PCU Project Coordination Unit PROFAUNA National Wildlife Office (Oficina Nacional de Fauna) REA Rapid Ecological Assessment SADA-AMAZONAS Autonomous Service for the Environmental Development of the State of Amazonas (Servicio Aut6nomo para el Desarrollo Ambiental del Estado Amazonas) SOE Statement of Expenditure TNC The Nature Conservancy TOR Terms of Reference tepuy Sandstone plateau WWF World Wildlife Fund for Nature VENEZUELA INPARQUES PROJECr STAFF APPRAISALREPORT Table of Contents Page No. LOAN AND PROJECT SUMMARY ........................................... iv L SECFDORALBACKGROUND ............................................. 1 Country Overview ............................................... 1 Natural Resource Management and Protection .......................... 1 Biological Diversity . ....................................... 1 Protected Areas ............................................ 1 Legislative Framework .............. ........................ 1 Institutional Setting . ....................................... 2 Sectoral Issues .......... ................................... 3 Experience with Previous Bank Lending ......... ....................... 4 Lessons Learned from Similar Projects ......... ....................... 4 IL THE PROJEC ................................................. 6 Origin ................................................. 6 Objectives and Summary Description ......... ........................ 6 Rationale for Bank Involvement ............. ........................ 7 Detailed Description ............................................. 8 Parks Management . ....................................... 8 Environmental Research ........... ......................... 9 Environmental Education ........... ........................ 10 Institutional Development ........... ........................ 11 Organization and Management .............. ........................ 12 Participation by NGOs and Local Communities ......................... 14 Environmental Impact . ........................................... 15 Costs . ................................................ 15 Financing ................................................ 16 Procurement ................................................ 16 Disbursements ................................................ 18 Benefits ................................................. 19 Sustainability ................................................ 21 Risks . ................................................ 22 IIL AGREEMENI REACHED AND RECOMMENDATION ...... ............... 24 This report is based on an appraisal missionto Venezuela in January-February1995 consistingof Mark Cackler, Silvia Castro, Luis Constantino (LA2NR), and Pablo Gutman (consultant). Mary Stanier (LA2NR) participated in the preappraisal mission in November 1994. This report is also based in part on the Staff Appraisal Report (report No. 11208-VE)for the Venezuela National Parks Management Project dated November 17, 1992 for which Luis Coirolo (LA1NR) was the Task Manager. The responsible managers are Michael Baxter (Division Chief), Kreszentia Duer (Projects Adviser), Kenneth Lay (Director Understudy) and Edilberto Segura (Director). - 11 - TABLES IN TEXT Table 2.1 Procurement ANNEXES Annex 1: PARKS MANAGEMENT AND PROTECTION COMPONENT Table 1.1: Project Areas Table 1.2: Proposed Locations of Fire Prevention and Combat Camps and Parks Covered by Region Table 1.3: Venezuela's National Parks Table 1.4: Venezuela's Natural Monuments Annex 2: ENVIRONMENTAL RESEARCH COMPONENT Annex 3: ENVIRONMENTAL EDUCATION COMPONENT Annex 4: INSTITUTIONAL DEVELOPMENT COMPONENT Table 4.1: Existing Personnel in Project Protected Areas Table 4.2: Additional Regional Staff under Project Table 4.3: Proposed Technical Staffing Needs Matrix Table 4.4: List of Project Financed Studies Attachment 1: TOR - Consultant for INPARQUES Own Revenues Attachment 2: TOR - Financial Management Adviser Attachment 3: TOR - Costs and Benefits of National Park System Attachment 4: TOR - Baseline Study for Impact Indicators Attachment 5: INPARQUES Organization Charts Annex 5: INPARQUES FINANCIAL PLAN Attachment 1: Increasing Reliance on Own Revenues Attachment 2: INPARQUES Financial Plan Attachment Attachment 3: Historical and Projected Revenue Sources Annex 6: PROJECT COSTS AND FINANCING Table 6.1: Summary Costs by Component Table 6.2: Annual Costs by Components Table 6.3: Summary Cost by Expenditure Account Table 6.4: Annual Costs by Expenditure Account Table 6.5: Financing Plan Table 6.6: Allocation of Loan Proceeds Table 6.7: Estimated Schedule of Bank Disbursements Annex 7: PROJECT IMPLEMENTATION, MONITORING AND REPORTING Appendix 1: Physical Indicators 1-A Implementation Indicators 1-B Impact Indicators Appendix 2: Financial Indicators Appendix 3: Summary of Legal Covenants Table 7.1: Implementation Schedule - iii - Annex 8: DOCUMENTS IN PROJECT FILES MAPS IBRD No. 26815 INPARQUES Regional Organization IBRD No. 26816 Venezuela Protected Areas IBRD No. 26817 INPARQUES Project Sites I I - 1v - VENEZUELA INPARQUES PROJECT LOAN AND PROJECT SUMMARY Borrower: The Republic of Venezuela Implementing Agency: Instituto Aut6nomo de Parques Nacionales (INPARQUES) Beneficiary: Not applicable Poverty: Not applicable Amount: US$55.0 million equivalent Terms: Repayable over 15 years, including 5 years of grace at the Bank's standard variable rate. Commitment Fee: 0.75% on undisbursed loan balances, beginning 60 days after signing, less any waiver. Onlending Terms: Not applicable Financing Plan: See para. 2.24. Net Present Value: See paras. 2.33-2.35. Maps: IBRD No. 26815 INPARQUES Regional Organization IBRD No. 26816 Venezuela Projected Areas IBRD No. 26817 INPARQUES Project Sites Project ID No. VE-PA-8237 I VENEZUELA INPARQUES PROJECr STAFF APPRAISAL REPORT L SECrORAL BACKGROUND CountryOverview 1.1 Venezuela, situated on the north coast of South America and bordered by Colombia, Brazil and Guyana, is the continent's sixth largest country with an estimated area of 916,442 km2 (see Maps). In addition to its mainland, Venezuela possesses 72 islands and a maritime area of 362,000 km2 (the country's declared exclusive economic zone). The total population is estimated at just under 21 million inhabitants (1993), some 83% of whom live in urban areas located mainly in the northern states. Venezuela's per capita GDP of US$2,873 (1993) is the fifth highest in Latin America. 1.2 Although Venezuela lies entirely in the tropics, there is considerable variation in climate due principally to differences in elevation and topographic effects. Average rainfall ranges from less than 500 mm on the north Caribbean coast to more than 4,000 mm in parts of the Orinoco Delta and the eastern part of the Cordillera de M6rida. Humidity is generally high with average values exceeding 80% in the Amazon, the plains (llanos), and the Maracaibo lowlands. Annual average temperatures range from 240 C at elevations below 800 m to 0° C at elevations over 3,000 m. The Orinoco river system drains some 80% of the national territory. Natural Resource Management and Protection 1.3 Biological Diversity. Venezuela is a sparsely populated country situated in the tropics and enjoying a wide range of geographically-extensivehabitats, many of which still remain little disturbed. As a result, Venezuela has been identified as one of the world's most biologicallydiverse countries, and has been classified by the World Wildlife Fund for Nature as one of Latin America's six megadiversity countries. Estimates of the country's flora exceed 21,000 species of high vascular plants, 5,000 of which are judged to be endemic to Venezuela. Other indicators include some 1,300 species of birds out of a world total of 9,000, 40% of 3,300 known species of neo-tropical birds and more than 300 species of mammals, 18 of which are classified as endangered. 1.4 Protected Areas. To manage its biodiversitywealth and to protect