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United Nations Development Programme County: Regional (Sabah, Malaysia) PROJECT DOCUMENT

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Revised: 14 March, 2012 United Nations Development Programme County: Regional (Sabah, Malaysia) PROJECT DOCUMENT Project Title: Biodiversity conservation in multiple-use forest landscapes in Sabah, Malaysia UNDAF Outcome(s): UNDP Strategic Plan Environment and Sustainable Development Primary Programme Outcome: Mobilizing environmental financing UNDP Strategic Plan Secondary Outcome: Mainstreaming environment and energy Expected CP Outcomes: Outcome 3: enhancing environmental management of biodiversity and natural resources. Expected CPAP Outputs: Improved capacity of stakeholders in environmental management Executing Entity / Implementing Partner: MINISTRY OF NATURAL RESOURCE AND ENVIRONMENT, MALAYSIA; STATE ECONOMIC PLANNING UNIT, SABAH Implementing Entity/Responsible Partners: Sabah Forestry Department Sabah is one of the thirteen states of Malaysia and is located in the northern part of the island of Borneo. Under a mild climate and supported by a diversity of soils, the biodiversity of Sabah is exceptionally high, helping to earn Malaysia its status as one of 17 mega-diversity countries. Among Southeast Asian countries, Malaysia’s biodiversity in terms of plants, mammals, birds, reptiles and amphibians is ranked fourth after Indonesia, China and Papua New Guinea. Most of Sabah’s biodiversity is found in the forest reserves, which occupy about half of its total landmass of 7.34 million hectares. Sabah’s forest reserves are an integral part of the 20 million hectares of equatorial rainforests demarcated under the ‘Heart of Borneo’ tri-government (Malaysia, Indonesia and Brunei Darussalam) initiative aiming at conserving and managing the tropical forest biodiversity sustainably. Over the last 30 years, Sabah has experienced rapid economic growth relying heavily on its forest resources to finance its socio-economic development programmes. There had been an acceleration of forest conversion, particularly outside the forest reserves, as well as forest degradation within the forest reserves associated with overharvesting of resources. These trends have resulted in the progressive loss and degradation of much of the biodiversity in the forest landscape. Protected areas are becoming increasingly isolated, thus decreasing prospects for viability of species. The proposed 261,264 ha project landscape represents one such landscape, which forms an important connecting landmass to three renowned protected areas in Sabah; the Maliau Basin Conservation Area (58,840 ha) to the West, the Danum Valley Conservation Areas (43,800 ha) to the East, and the Imbak Canyon Conservation Areas (16,750 ha) to the North. The project landscape constitutes a connecting landscape that is utilized for timber production (69% of total area), industrial tree plantation (16%), rehabilitated forests by enrichment planting (6%) and conservation purposes (6%). This landuse mix is an emerging trend in the forest reserves of Sabah driven by: (i) the comparative disadvantage in crop gestation periods between growing trees and agriculture crops, (ii) low rent capture, and: (iii) incoherent enforcement associated with the lack of expertise in multiple-use forest landscapes. Under a business-as-usual scenario, the above protected areas will become increasingly vulnerable to fire during prolonged droughts potentially from the surrounding degraded forests. The objective of the project is to bring the landuses in the connecting landscape and protected areas under a common and integrated management umbrella strategy in order to mainstream biodiversity, ecosystem functions and resilience, while enabling ongoing sustainable uses. The project will meet this objective by achieving three interconnected outcomes: (1) provisioning of an enabling environment for optimized multiple use planning, financing, management and protection of forest landscapes; (2) demonstration of multiple-use forest landscape planning and management system, and (3) demonstration of innovative sustainable financing methods for multiple-use forest landscape management. Assistance provided by GEF will strengthen the conservation of the largest area of mostly contiguous forest in Sabah, and one of the most important remaining forest landscapes in the Heart of Borneo. GEF’s intervention amounts to USD4.4 million against USD 19.5 million from the Government of Malaysia and co-financing from implementing partners. The project is expected to serve as a model to draw lessons learnt in best practices for replication in other forest landscapes within Sabah and in other parts of Malaysia and the Heart of Borneo. i Revised: 14 March, 2012 Programme Period: 2012-2018 Total budget: US$ 23,900,000 Atlas Award ID: TBD Allocated resources: Project ID: TBD GEF: US $ 4,400,000 PIMS #: 4186 Co-financing: US $ 19,500,000 Start date: May 2012 End Date: May 2018 o Sabah Forest Department : US$ 15,000,000 o Sabah Foundation: US$ 4,400,000 Management Arrangement: NIM o WWF US$ 100,000 PAC Meeting Date: January, 2012 Agreed by (Government): Date/Month/Year Agreed by (Executing Entity/Implementing Partner): Date/Month/Year Agreed by (UNDP): Date/Month/Year ii Revised: 14 March, 2012 Table of Contents LIST OF TABLES ........................................................................................................................ V LIST OF FIGURES ...................................................................................................................... V LIST OF ANNEXES ..................................................................................................................... V LIST OF ACRONYMS AND ABBREVIATIONS ................................................................... VI PART I: SITUATION ANALYSIS .......................................................................................... 1 1.1 Context and global significance ......................................................................................... 1 1.2 Threats and underlying causes ......................................................................................... 23 1.3 Long-term solution and barriers....................................................................................... 28 1.4 Stakeholder Analysis ....................................................................................................... 30 1.5 Baseline Analysis ............................................................................................................. 30 PART II: PROJECT STRATEGY .......................................................................................... 38 2.1 Project Rationale and Policy Conformity ........................................................................ 38 2.2 Country ownership: country eligibility and country drivenness ...................................... 39 2.3 Design principles and strategic considerations ................................................................ 40 2.4 Project Objective, Outcomes and Outputs / Activities .................................................... 41 2.5 Key Indicators, Risks and Assumptions .......................................................................... 48 2.6 Financial modality ........................................................................................................... 52 2.7 Cost effectiveness ............................................................................................................ 52 2.8 Sustainability ................................................................................................................... 53 2.9 Replicability ..................................................................................................................... 53 2.10 Coordination with Relevant Programs ............................................................................. 54 2.11 Incremental Reasoning and Expected Global, National and Local Benefits ................... 54 PART III: MANAGEMENT ARRANGEMENTS .................................................................. 56 PART IV: MONITORING AND EVALUATION FRAMEWORK ..................................... 58 PART V: LEGAL CONTEXT ................................................................................................. 61 PART VI: STRATEGIC RESULTS FRAMEWORK (SRF) ................................................. 63 PART VII: TOTAL BUDGET AND WORK PLAN ................................................................ 68 OBJECTIVE OF THE MODEL .................................................................................................. 88 REVIEW OF EXISTING LANDSCAPE LAND USE MODELS AND THEIR SUITABILITY TO THE SITE ........................................................................................................... 88 InVEST ..................................................................................................................................... 89 iii Revised: 14 March, 2012 CONCLUSION ............................................................................................................................. 92 1. OVERVIEW OF FINANCING MECHANISM ................................................... 96 2. REDD ........................................................................................................................ 97 Background ................................................................................................................................ 97 Initiatives in Malaysia ............................................................................................................... 97 Applicability
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