Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: ICR00004150 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-80210) ON A LOAN Public Disclosure Authorized IN THE AMOUNT OF EURO 20.8 MILLION (US$28.8 MILLION EQUIVALENT) TO THE Republic of Croatia FOR A Public Disclosure Authorized EU NATURA 2000 INTEGRATION PROJECT ( P111205 ) October 27, 2017 Environment & Natural Resources Global Practice Europe And Central Asia Region Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective {April 30, 2017) Currency Unit = Euro 1 EUR = US$1.3861 (at Appraisal) 1 EUR = US$1.0896 (at Completion) US$ = SDR 1 FISCAL YEAR Republic of Croatia: January 1 – December 31 World Bank: July 1 – June 30 Regional Vice President: Laura Tuck Country Director: Arup Banerji Senior Global Practice Director: Karin Erika Kemper Practice Manager/Country Manager: Valerie Hickey, Elisabetta Capannelli Task Team Leader(s): Vera Dugandzic and Nathalie Weier Johnson ICR Main Contributor: Craig M. Meisner ABBREVIATIONS AND ACRONYMS CAEN Croatian Agency for the Environment and Nature (formerly SINP) CARDS Community Assistance for Reconstruction, Development and Stabilisation CPS Country Partnership Strategy CPI County Public Institution DA Designated Account ECA Europe and Central Asia EEA European Environmental Agency EMF Environmental Management Framework EMP Environmental Management Plan EPEEF Environmental Protection and Energy Efficiency Fund ERR Economic Rate of Return ESIF European Structural and Investment Funds EU European Union EUR Euro (currency) FCS Favourable Conservation Status GAF Governance and Accounting Framework GEF Global Environment Facility GIS Geographic Information System GPS Global Positioning System HRK Croatia Kuna (currency) IBRD International Bank for Reconstruction and Development IFI International Financial Institution IFR Interim Financial Report INSPIRE Infrastructure for Spatial Information in Europe IPA Instrument for Pre-Accession Assistance IRI Intermediate Results Indicator ISP Implementation Support Plan KEC Karst Ecosystem Conservation LAG Local Action Groups LIFE Programme for the Environment and Climate Action MoC Ministry of Culture MEE Ministry of Environment and Energy MP Management Plan MPA Marine Protected Areas Natura 2000 European Union-wide network of nature conservation areas established under the 1992 Habitats Directive and the 1978 Birds Directive NEN National Ecological Network NGO Non-Governmental Organization NP National Park NSDI National Spatial Data Infrastructure NPIS Nature Protection Information System PA Protected Area PCC Project Coordination Committee PDO Project Development Objective PES Payment for Ecosystem Services PHARE Poland and Hungary Assistance for the Restructuring of the Economy PIU Project Implementation Unit PP Nature Park PPF Project Preparation Facility PROFOR Program for Forests RAPPAM Rapid Assessment and Prioritization of Protected Area Management SAC Special Areas of Conservation SGA State Geodetic Administration SINP State Institute for Nature Protection (now CAEN) TA Technical Assistance TTL Task Team Leader WTP Willingness to Pay TABLE OF CONTENTS DATA SHEET .......................................................................................................................... 1 I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 5 A. CONTEXT AT APPRAISAL .........................................................................................................5 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) ..................................... 14 II. OUTCOME .................................................................................................................... 15 A. RELEVANCE OF PDOs ............................................................................................................ 15 B. ACHIEVEMENT OF PDOs (EFFICACY) ...................................................................................... 16 C. EFFICIENCY ........................................................................................................................... 22 D. JUSTIFICATION OF OVERALL OUTCOME RATING .................................................................... 24 E. OTHER OUTCOMES AND IMPACTS (IF ANY) ............................................................................ 24 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 26 A. KEY FACTORS DURING PREPARATION ................................................................................... 26 B. KEY FACTORS DURING IMPLEMENTATION ............................................................................. 27 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 28 A. QUALITY OF MONITORING AND EVALUATION (M&E) ............................................................ 28 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ..................................................... 30 C. BANK PERFORMANCE ........................................................................................................... 31 D. RISK TO DEVELOPMENT OUTCOME ....................................................................................... 32 V. LESSONS AND RECOMMENDATIONS ............................................................................. 32 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 34 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 53 ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 55 ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................... 56 ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 84 ANNEX 6. CAPITAL EXPENDITURES AND ESIF PIPELINE IN NATIONAL AND NATURE PARKS .... 92 ANNEX 7. MANAGEMENT EFFECTIVENESS TRACKING TOOL (METT) .................................... 101 ANNEX 8. SUPPORTING DOCUMENTS ................................................................................ 103 The World Bank EU Natura 2000 Integration Project ( P111205 ) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name P111205 EU NATURA 2000 INTEGRATION PROJECT ( P111205 ) Country Financing Instrument Croatia Specific Investment Loan Original EA Category Revised EA Category Partial Assessment (B) Partial Assessment (B) Organizations Borrower Implementing Agency Ministry of Finance Ministry of Environment and Energy Project Development Objective (PDO) Original PDO The development objectives of the proposed project are to: (i) help support Park and County Public Institutions to implement Natura2000 objectives in investment programs; (ii) strengthen capacity for EU-compliant reporting and biodiversity monitoring; and (iii) introduce programs that involve a wide group of stakeholders in Natura 2000 network management. PDO as stated in the legal agreement The development objectives of the proposed project are to: (i) support Park and County Public Institutions to implement Natura2000 objectives in investment programs; (ii) strengthen capacity for EU-compliant reporting and biodiversity monitoring; and (iii) introduce programs that involve a wide group of stakeholders in Natura 2000 network management. Page 1 of 104 The World Bank EU Natura 2000 Integration Project ( P111205 ) FINANCING Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing 28,800,000 28,795,579 25,346,108 IBRD-80210 Total 28,800,000 28,795,579 25,346,108 Non-World Bank Financing Borrower 3,800,000 0 0 Total 3,800,000 0 0 Total Project Cost 32,600,000 28,795,579 25,346,108 KEY DATES Approval Effectiveness MTR Review Original Closing Actual Closing 10-Feb-2011 19-May-2011 09-Nov-2013 30-Apr-2016 30-Apr-2017 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 16-Jul-2015 17.51 Change in Loan Closing Date(s) KEY RATINGS Outcome Bank Performance M&E Quality Satisfactory Satisfactory Substantial RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 27-Jun-2011 Satisfactory Satisfactory .07 02 05-Dec-2011 Satisfactory Satisfactory 1.37 Page 2 of 104 The World Bank EU Natura 2000 Integration Project ( P111205 ) 03 18-Jun-2012 Satisfactory Satisfactory 4.93 04 24-Dec-2012 Satisfactory Satisfactory 6.49 05 24-Jul-2013 Satisfactory Satisfactory 7.64 06 22-Dec-2013 Satisfactory Satisfactory 9.47 07 22-Jun-2014 Satisfactory Satisfactory 11.41 08 22-Dec-2014 Satisfactory Satisfactory 15.66 09 15-Jun-2015 Satisfactory Satisfactory 16.77 10 09-Dec-2015 Satisfactory Satisfactory 19.40 11 25-May-2016 Satisfactory Satisfactory 20.40 12 16-Dec-2016 Satisfactory Satisfactory 23.42 13 01-May-2017 Satisfactory Satisfactory 25.35 SECTORS AND THEMES Sectors Major Sector/Sector (%) Agriculture, Fishing and Forestry 100 Public Administration - Agriculture, Fishing & Forestry 28 Forestry 51 Information and Communications Technologies 100 Public Administration - Information and 5 Communications Technologies ICT Services 11 Other Information and Communications Technologies 5 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Social Development and Protection 20 Social Inclusion 20 Participation and Civic Engagement 20 Page 3 of 104 The World Bank EU Natura 2000 Integration Project ( P111205 ) Urban and Rural Development