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Project Appraisal Document on a Proposed Carbon Finance Transaction Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: 114026-ZR INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PROJECT APPRAISAL DOCUMENT ON A PROPOSED CARBON FINANCE TRANSACTION Public Disclosure Authorized IN THE AMOUNT OF US$ 55 MILLION TO THE DEMOCRATIC REPUBLIC OF CONGO FOR THE Public Disclosure Authorized MAI-NDOMBE EMISSION REDUCTIONS PROGRAM (P160320) 14 SEPTEMBER 2018 Environment and Natural Resources Global Practice Africa Region Public Disclosure Authorized This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. FISCAL YEAR US$ January 1 - December 31 ABBREVIATIONS AND ACRONYMS B/C-Ratio Benefit Cost Ratio BSP Benefit sharing plan CAFI Central African Forest Initiative CART Agricultural Rural Management Council (Conseil Agricole Rural de Territoire) / Agricultural Rural Management Council CAS Country Assistance Strategy CFP Carbon Fund Participants CN-REDD National REDD+ Coordination CO2eq Carbon dioxide equivalent COPIL Steering Committee of the National REDD+ Fund CPF Country Partnership Framework CTR Technical Committee for Reform Monitoring and Evaluation DIAF Department of Forest Inventory and Planning of the Ministry of Environment and Sustainable Development (Direction des Inventaires et des Aménagements Forestiers) DRC Democratic Republic of Congo ER Emission reduction ERPA Emission Reductions Payment Agreement ERPD Emission Reductions Program Document ER-Program Emission Reductions Program ESMF Environmental and Social Management Framework FAO United Nations Food and Agriculture Organization FAP World Bank Group’s Forest Action Plan FCPF Forest Carbon Partnership Facility FGRM Feedback and Grievance Redress Mechanism FIP Forest Investment Program FONAREDD National REDD+ Fund GCs General Conditions GDP Gross Domestic Product GEF Global Environment Facility GHG Greenhouse gas GNI Gross National Income GTCR-R Working Group on Climate and REDD+ (Groupe de Travail Climat et REDD+ - Rénové) HFLD High forest cover and historically low deforestation IBRD International Bank for Reconstruction and Development IDA International Development Association IFC International Finance Corporation ii IPs Indigenous Peoples KfW German Development Bank (Kreditanstalt fuer Wiederaufbau) LDC Local Development Committee LoI Letter of Intent MESD Ministry of Environment and Sustainable Development (Ministère de l'Environnement et Développement Durable) MPTF-O Multi-Partner Trust Fund Office of the United Nations MRV Measurement, Reporting and Verification NFMS National Forest Monitoring System NGO Non-governmental organization NRM Natural Resources Management OSFAC Satellite Observatory of Central African Forests (Observatoire Satellital des Forêts d'Afrique Centrale) PDO Project Development Objective PES Payments for Environmental Services PIREDD Integrated REDD+ Project (Projet Intégré REDD+) PMU Program Management Unit REDD+ Reducing emissions from deforestation and forest degradation in developing countries, including conservation, sustainable management and enhancement of forest carbon stocks REPALEF Network of Indigenous and Local Populations for the Sustainable Management of Forest Ecosystems (Réseau de populations autochtones pour la gestion durable des écosystèmes forestiers) RL Reference Emission Level SCD Systematic Country Diagnostics SDP Sustainable Development Plan SESA Strategic Environmental and Social Assessment SMP Simple Management Plan SODEFOR Forest Development Corporation (Société de Développement Forestier) SOGENAC Corporation for Ndama cattle farming in Central Africa (La Société des grands élevages de Ndama en Afrique centrale) SORT Systematic Operations Risk- rating Tool SWS Staff Weeks TTL Task Team Leader UNDP United Nations Development Programme UNESCO United Nations Educational, Scientific and Cultural Organization UNFCCC United Nations Framework Convention on Climate Change USAID United States Agency for International Development WBG World Bank Group WWC Wildlife Works Carbon WWF World Wildlife Fund iii Regional Vice President: Hafez M. H. Ghanem Country Director: Jean-Christophe Carret Senior Global Practice Director: Karin Kemper Practice Manager: Benoit Bosquet Task Team Leader: Laurent Valiergue iv DEMOCRATIC REPUBLIC OF CONGO MAI-NDOMBE EMISSION REDUCTIONS PROGRAM (P160320) Contents I. STRATEGIC CONTEXT ...................................................................................................... 1 A. Country Context .....................................................................................................................1 B. Sectoral and Institutional Context ...........................................................................................2 C. Higher Level Objectives to which the Project Contributes ........................................................5 II. PROJECT DEVELOPMENT OBJECTIVES .............................................................................. 6 A. Project Development Objective (PDO) ....................................................................................6 B. Project Beneficiaries ...............................................................................................................6 C. PDO-Level Results Indicators ...................................................................................................7 III. PROJECT DESCRIPTION .................................................................................................... 7 A. Project Components ...............................................................................................................7 B. Project Cost and Financing ......................................................................................................9 C. Lessons Learned and Reflected in the Project Design ............................................................. 11 IV. IMPLEMENTATION ........................................................................................................ 12 A. Institutional and Implementation Arrangements ................................................................ 12 B. Results Monitoring and Evaluation ........................................................................................ 13 C. Sustainability ........................................................................................................................ 14 D. Role of Partners ................................................................................................................... 14 V. KEY RISKS ..................................................................................................................... 15 A. Overall Risk Rating and Explanation of Key Risks ................................................................... 15 VI. APPRAISAL SUMMARY .................................................................................................. 18 A. Economic and Financial Analysis ........................................................................................... 18 B. Technical .............................................................................................................................. 20 C. Financial Management.......................................................................................................... 20 D. Procurement ........................................................................................................................ 21 E. Social (including Safeguards) ................................................................................................. 21 F. Environment (including Safeguards) ...................................................................................... 23 G. Other Safeguard Policies....................................................................................................... 23 H. World Bank Grievance Redress ............................................................................................. 23 VII. RESULTS FRAMEWORK AND MONITORING .................................................................... 24 ANNEX 1: DETAILED PROJECT DESCRIPTION ......................................................................... 26 v ANNEX 2: IMPLEMENTATION ARRANGEMENTS .................................................................... 33 ANNEX 3: IMPLEMENTATION SUPPORT PLAN ...................................................................... 39 ANNEX 4: ERPA COMMERCIAL TERMS AS DERIVED FROM NEGOTIATIONS BETWEEN THE CFP AND DRC ............................................................................................................................. 42 ANNEX 5: ADVANCED DRAFT BENEFIT SHARING PLAN FOR THE MAI-NDOMBE EMISSION REDUCTIONS PROGRAM IN THE DEMOCRATIC REPUBLIC OF CONGO .................................... 50 Summary ................................................................................................................................. 50 1. Introduction ...................................................................................................................... 53 2. Nesting and crediting ........................................................................................................ 54 3. Legal framework for benefit sharing of REDD+ projects / programs in DRC ......................... 55 4. Coordination of finance sources related to the ER Program ................................................ 55 5. Categories of
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