0(',806,=('352-(&7352326$/ 5(48(67)25*())81',1* Public Disclosure Authorized FINANCING PLAN (US$) AGENCY’S PROJECT ID: 3 GEF PROJECT/COMPONENT GEFSEC PROJECT ID: COUNTRY: REPUBLIC OF MOLDOVA Project 972,920 PROJECT TITLE: RENEWABLE ENERGY FROM PDF A* 25,000 AGRICULTURAL WASTES (REAW) SUB-TOTAL GEF 997,920 GEF AGENCY: WORLD BANK CO-FINANCING** OTHER EXECUTING AGENCY (IES): CONSOLIDATED IBRD/IDA/IFC AGRICULTURAL PROJECTS MANAGEMENT Government 1,434,950 Bilateral DURATION: 3 YEARS NGOs GEF FOCAL AREA: CLIMATE CHANGE Others 219,388 GEF OPERATIONAL PROGRAM: OP # 6 Sub-Total Co-financing: 1,654,338 Public Disclosure Authorized GEF STRATEGIC PRIORITY: CC 4 Total Project Financing: 2,652,258 ESTIMATED STARTING DATE: MAY 2005 FINANCING FOR ASSOCIATED ACTIVITY MPLEMENTING GENCY EE I A F : $146,000 IF ANY: N/A * PDFA approved on 23.03.2004 ** Details provided in the Financing Section CONTRIBUTION TO KEY INDICATORS OF THE BUSINESS PLAN: The project will contribute to the established target for OP#6 by removing barriers for the use of renewable energy from agricultural wastes in Moldova, and will reduce high implementation costs of such energy technologies due to low-volume of replication. Public Disclosure Authorized RECORD OF ENDORSEMENT ON BEHALF OF THE GOVERNMENT: Constantin Mihalescu, minister of Ministry of Environmental and Natural Date: 16 February 2005 Recourses of Moldova, GEF National Focal Point This proposal has been prepared in accordance with GEF policies and procedures and meets the standards of the GEF Project Review Criteria for a Medium-sized Project. Project Contact Person: Emilia Battaglini, ECA Regional Coordinator Tel. and email: (+1-202) 473-3232, Steve Gorman Public Disclosure Authorized [email protected] GEF Executive Coordinator, The World Bank Date: April, 19, 2005 7$%/(2)&217(176 PART I PROJECT CONCEPT................................................................................................................................1 A – SUMMARY..........................................................................................................................................................1 B - COUNTRY OWNERSHIP ......................................................................................................................................1 COUNTRY ELIGIBILITY ..............................................................................................................................................1 COUNTRY DRIVENNESS .............................................................................................................................................2 C – PROGRAM AND POLICY CONFORMITY.............................................................................................................2 PROGRAM DESIGNATION AND CONFORMITY .............................................................................................................2 PROJECT DESIGN .......................................................................................................................................................3 Project Rationale .................................................................................................................................................3 Current Situation / Sector Issues .........................................................................................................................4 Barriers analysis..................................................................................................................................................6 Incremental cost assessment ................................................................................................................................8 Expected Project Outcomes ...............................................................................................................................12 Project Components and Costs..........................................................................................................................15 SUSTAINABILITY ANALYSIS AND RISK ASSESSMENT ..............................................................................................21 STAKEHOLDER INVOLVEMENT ................................................................................................................................24 MONITORING AND EVALUATION PLAN....................................................................................................................27 D - FINANCING .......................................................................................................................................................27 E - INSTITUTIONAL COORDINATION AND SUPPORT ............................................................................................29 CORE COMMITMENTS AND LINKAGES .....................................................................................................................29 CONSULTATION, COORDINATION AND COLLABORATION BETWEEN IAS, EAS AND GEF SEC ................................30 IMPLEMENTATION ARRANGEMENTS ........................................................................................................................33 PART II – RESPONSE TO REVIEWS ..................................................................................................................34 PART III – ANNEXES .............................................................................................................................................37 ANNEX A: LOGICAL FRAMEWORK MATRIX........................................................................................................37 ANNEX B: FINANCIAL MANAGEMENT ARRANGEMENTS.....................................................................................41 ANNEX C: PROCUREMENT ....................................................................................................................................43 ANNEX D: BUDGET BRAKEDOWN $USD ..............................................................................................................45 ANNEX E: SUMMARY OF ASSESSMENTS CARRIED OUT UNDER PDF A ACTIVITIES .............................................46 ANNEX F: ENVIRONMENTAL MANAGEMENT PLAN..............................................................................................52 ANNEX G: DISTRIBUTION OF STRAW-PRODUCTIVE CEREALS IN MOLDOVA .......................................................57 ANNEX H: REPLICATION UNDER CDCF /SIF..............................................................................................62 ANNEX I: COUNTRY ENDORSEMENT LETTER ......................................................................................................64 ANNEX J: COUNTRY ENVIRONMENTAL CLEARANCE OF THE PROJECT ..............................................................65 ANNEX K: CO-FINANCING LETTERS.....................................................................................................................66 ANNEX L: MAP OF MOLDOVA...............................................................................................................................70 PART I PROJECT CONCEPT A – Summary The project will provide a foundation for a broad and efficient use of biomass in substitution for imported fossil fuels (coal), acting as a catalyst for the introduction and promotion of the use of primary agricultural wastes (biomass) to fuel energy generation using efficient technologies. This will (i) reduce greenhouse emissions by replacing fossil fuels and simultaneously reduce environmental pollution from unwanted biomass otherwise being burnt in the fields; (ii) improve energy efficiency in heating systems; (iii) introduce renewable energy from local sources substituting carbon neutral biomass for fossil fuels; (iv) recycle ash residues as a fertilizer; (v) generate the possibility for new income streams for rural population, and (vi) provide social and economic community benefits. Primary and unprocessed agricultural arable crop wastes, especially wheat straw, have been identified as the most suitable, available and unused biomass for thermal energy production in Moldova1, initially for use in small scale systems (50-500KWth). The project will initiate the creation of sustainable biomass based energy generation in Moldova, initially using baled straw as the energy carrier, by addressing the institutional, technological, and informational barriers. The project will install demonstration biomass units based on developments in the technologies, used for biomass based energy systems in neighboring countries, the Ukraine and Romania. Once these barriers are removed, there is significant identified potential for replication throughout Moldova, as half of its population of approximately 2 million people lives in 1,680 rural villages. The country has minimal coal and gas reserves and hydro-electrical potential, and imports 96% of its energy. The main impediment for further replication is the financial barrier for installation of new heating systems. This barrier will be addressed with assistance of Carbon Finance, where as a replication project is already under preparation with Community Development Carbon Fund (CDCF) managed by the World Bank. Ten communities with a successful track record in development – usually schools, which have no access to natural gas and a good availability of locally sourced straw biomass, have been chosen as candidate sites for biomass fuelled thermal energy systems to replace coal based heating systems. Following successful demonstration