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Document of the World Bank Public Disclosure Authorized Document of The World Bank Public Disclosure Authorized Report No: 22630-SA PROJECT APPRAISAL DOCUMENT Public Disclosure Authorized ONA PROPOSED GRANT FROM THE GLOBAL ENVIRONMENT FACILITY TRUST FUND IN THE AMOUNT OF SDR 6.0 MILLION (US$7.92 MILLION EQUIVALENT) TO THE REPUBLIC OF SOUTH AFRICA Public Disclosure Authorized FOR A MALOTI-DRAKENSBERGTRANSFRONTIER CONSERVATIONAND DEVELOPMENT PROJECT August 20, 2001 Public Disclosure Authorized Environment and Social Development Unit - AFTES Country Department 1, Botswana, Lesotho, Namibia, South Africa, Swaziland - AFCO1 Africa Region CURRENCY EQUIVALENTS (Exchange Rate Effective August 2001) Currency Unit = ZAR ZAR I = US$0.1219 US$1 = ZAR 8.2 FISCAL YEAR January 1 -- December 31 ABBREVIATIONS AND ACRONYMS AfDB: African Development Bank CAS: Country Assistance Strategy DEAT: Department of Environmental Affairs and Tourism FMC: Financial Management Committee GEF: Global Environment Facility ICR: Implementation Completion Report INTOSAI: International Organization of Supreme Audit Institutions KZNNCB: KwaZulu-Natal Nature Conservation Board LHETP: Lesotho Highlands Ecotourism Project LHWP: Lesotho Highlands Water Project LMP: Land Management and Conservation Project MEGYA: Ministry of Environment, Gender and Youth Affairs MOU: Memorandum of Understanding NES: National Environmental Secretariat PCC: Project Coordination Committee PCU: Project Coordination Unit RMA: Range Management Area RSA: Republic of South Africa SADC: Southern African Development Community SANParks: South African National Parks SC: Steering Committee SNP: Sehlabathebe National Park Vice President: Callisto E. Madavo Country Director: Fayez S. Omar Sector Manager: Agnes I. Kiss Task Team Leader: Jan P. Boj6 SOUTH AFRICA MALOTI-DRAKENSBERG TRANSFRONTIER CONSERVATION AND DEVELOPMENT PROJECT CONTENTS A. Project Development Objective Page 1. Project development objective 2 2. Key perfonrnance indicators 3 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 3 2. Main sector issues and Government strategy 4 3. Sector issues to be addressed by the project and strategic choices 7 C. Project Description Summary 1. Project components 8 2. Key policy and institutional reforms supported by the project 16 3. Benefits and target population 16 4. Institutional and implementation arrangements 17 D. Project Rationale 1. Project alternatives considered and reasons for rejection 20 2. Major related projects financed by the Bank and other development agencies 21 3. Lessons learned and reflected in the project design 21 4. Indications of borrower commitment and ownership 24 5. Value added of Bank support in this project 24 E. Summary Project Analysis 1. Economic 25 2. Financial 25 3. Technical 26 4. Institutional 26 5. Environmental 27 6. Social 30 7. Safeguard Policies 31 F. Sustainability and Risks 1. Sustainability 32 2. Critical risks 34 3. Possible controversial aspects 34 G. Main Conditions 1. Effectiveness Condition 35 2. Other Dated Covenants 35 H. Readiness for Implementation 35 I. Compliance with Bank Policies 36 Annexes Annex 1: Project Design Summary 37 Annex 2: Detailed Project Description 41 Annex 3: Estimated Project Costs 48 Annex 4: Incremental Cost Analysis 49 Annex 5: Financial Summary 57 Annex 6: Procurement and Disbursement Arrangements 58 Annex 7: Project Processing Schedule 64 Annex 8: Documents in the Project File 65 Annex 9: Statement of Loans and Credits 67 Annex 10: Country at a Glance 69 Annex I 1: Community Consultation and Social Assessments 71 Annex 12: Rangeland Management and Biodiversity 78 Annex 13: Conservation Planning 87 Annex 14: Nature-based Tourism in Lesotho and South Africa 92 Annex 15: Financial Management Action Plan (South Africa) 95 MAP(S) IBRD 30852 SOUTHAFRICA Maloti-Drakensberg Transfrontier Conservation and Development Project Project Appraisal Document Africa Regional Office AFTES Date: August 20, 2001 Team Leader: Jan P. Bojo Country Manager/Director: Fayez S. Omar Sector Manager/Director: Agi Kiss Project ID: P052368 Sector(s): VM - Natural Resources Management Theme(s): Environment Focal Area: B - Biodiversity Poverty Targeted Intervention: N ProgramFinancing Data [ Loan [ I Credit [X] Grant [ ]Guarantee []Other: For Loans/Credits/Others: Amount (US$m): SDR6.0 (US$7.92) FinancingPlan (US$m): Source Local Foreign Total BORROWER 16.80 0.00 16.80 GLOBAL ENVIRONMENT FACILITY 0.00 7.92 7.92 Financing Gap 16.80 16.80 Total: 16.80 7.92 24.72 Borrower/Recipient:REPUBLIC OF SOUTH AFRICA Responsibleagency: NATIONAL DEAT, KZNNC, DEAT (FS), DEAET (EC) & SANP Estimateddisbursements (Bank FY/US$m): =FY2002 2003 2004 2005 2006 Annual 0.50 1.00 2.00 2.20 2.20 Cumulative 0.50 1.50 3.50 5.70 7.90 |Project implementationperiod: 5 years A. ProjectDevelopment Objective 1. Project development objective: (see Annex 1) The contextof the projectis a long-termcollaborative initiative between Republic of SouthAfrica (RSA) and the Kingdomof Lesotho(Lesotho) to protectthe exceptionalbiodiversity of the Drakensbergand Malotimountains through conservation, sustainable resource use, and land-useand developmentplanning. The projectwill focus on the Maloti-Drakensbergmountains, which are situatedalong the 300 km eastern boundaryof the Kingdomof Lesothowith the Republicof SouthAfrica. Three SouthAfrican Provinces are affected. The westernpart of the KwaZulu-NatalProvince forms the major area,but there are extensionsinto the EasternCape Provinceto the southand the Free State Provinceto the north. The GoldenGate National Park, managedby SouthAfrican National Parks (SANParks)also falls withinthe area. The total area covered in the initialproject preparation ("the study area") is more than 13,000km'. Gradualdelimitation of this vast area has taken placeas the preparationhas progressed. The Maloti-Drakensbergtransfrontier area encompassesdistinct landscape and biologicaldiversity. It is rich in speciesand high in endemism. However,excessive livestock grazing, crop cultivationon steep slopes,uncontrolled burning, alien invadingspecies and humanencroachment threatens this asset.Hence, the GEF objectiveis to conservethis globallysignificant biodiversity. The projecttakes a regional approachto conservationand development,and servesto hamessthe potentialof a transfrontierecosystem. While the ecosystemshows similarities on both sides of the border,there are considerablelegal, social, institutionaland economicdifferences between the two countries,which the project designrecognizes. The secondaryobjective of the projectis to contributeto communitydevelopment through income generationfrom nature-based tourism, by capacitybuilding for sustainableutilization of the natural and culturalheritage of the project area. Again,the approachis a regionalone, in that a commontourist area will enhancethe attractionfor visitorsconsiderably, and in thatjoint managementin a numberof areas can captureeconomies of scale. It is also clear that Lesothohas muchto gain from capitalizingon the advanced experienceof conservationmanagement in RSA,and its successfuldevelopment of nature-basedtourism, in support of sustainablebiodiversity protection. In both countries,the project will providenew resourcesfor transfrontiercollaboration, project managementand coordination.A joint informationmanagement structure, common workshops, working groups and studies,will allowfor betterplanning of existingProtected Areas (PAs)as well as for wider community-basedconservation initiatives, with particularemphasis on rangelandmanagement in biodiversitypriority areas. It will supportthe establishmentof viable conservationmanagement institutions at locallevel to ensure communityinvolvement, and planningand community-leveltraining for nature-basedtourism development. The componentsare adjustedto the specificsituation in eachof the countries. For example,there will be further supportto nationallevel institutionbuilding for conservationin Lesotho,while this is unnecessary in RSA. Whilethe receptivecapacity is more limitedin Lesotho,the needsare also greater,and the domesticcounterpart funding more limited. The transfrontiernature of the projectwill ensurethat the analysisand resolutionof conservationproblems will be shared,and the resourcesand expertisein each countrycomplemented. The GEF incrementalcost contributionofS 15.25million for the two countriestogether, of which $7.325 goes to Lesothoand $7.925million goes to RSA,should also be seen in the contextof major ongoing support to biodiversityconservation in Lesotho(UNDP: $2.5 million),and supportto naturalresources and - 2 - rural income enhancement in the highlands (AfDB: $8.4 million). Both are counted here as associated financing, in addition to the Lesotho government contribution ($1.1 million). In RSA, the counterpart contribution is estimated as $16.8m. Most of this represents expenditure for nature conservation by the Kwazulu-Natal Nature Conservation Board (KZNNCB). 2. Key performance indicators: (see Annex 1) (i) Globally significant biodiversity maintained and enhanced through protection for key habitats and indicator species. (ii) Expanded protected areas system in place with adequate buffer zones and community involvement. (iii) Sehlabathebe National Park in Lesotho formally established and conservation management and development plan agreed and under implementation; (iv) Community initiatives in nature-based conservation financially viable and benefit transfers working; (v) Joint declaration by the Government of Lesotho and South Africa of a transfrontier
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