Document of The World Bank Report No: 52965-TN Public Disclosure Authorized FOR OFFICIAL USE ONLY PROJECT APPRAISAL DOCUMENT ON A PROPOSED LOAN Public Disclosure Authorized IN THE AMOUNT OF US$36.10 MILLION AND A PROPOSED GRANT FROM THE GLOBAL ENVIRONMENTAL FACILITY TRUST FUND GRANT IN THE AMOUNT OF US$9.73 MILLION TO THE REPUBLIC OF TUNISIA FOR A Public Disclosure Authorized SECOND NATURAL RESOURCES MANAGEMENT PROJECT May 21, 2010 Department of Sustainable Development Middle East and North 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. CURRENCY EQUIVALENTS (Exchange Rate Effective November, 2009) Currency Unit = Tunisian Dinars TND 1.30 = US$1.00 US$1.00 = SDR 1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS ADG Agricultural Development Groups / Groupement de Développement Agricole (GDA) AETA Agricultural Extension and Training Agency /Agence de Vulgarisation et de la Formation agricole (AVFA) AfD French Development Agency / Agence Française de Développement ALA Agricultural Land Agency / Agence Foncière Agricole (AFA) AC Annual Contract / Contrat programme (CP) CBT Central Bank of Tunisia / Banque Centrale de la Tunisie (BCT) CCU Central Coordination Unit / Unité Centrale de Coordination (UCC) CPS Country Partnership Strategy / Cadre de Partenariat Stratégique (CPS) DA Designated Account / Compte Désigné (CD) DEQL Directorate of Environment and Quality of Life / Direction Générale de l’Environnement et de Qualité de la Vie (DGEQV) DFIPO Directorate of Finance, Investments, and Professional Organizations / Direction générale du Financement, des Investissements et des Organismes Professionnels (DGFIOP) DPMCAL Directorate of Planning, Management and Conservation of Agricultural Lands/Direction Générale de l'Aménagement et de Conservation des Terres Agricoles(DGACTA) DREWU Directorate of Rural Engineering and Water Use / Direction Générale du Génie Rural et de l’Exploitation des Eaux (DGGREE) DRI Directorate for Rural Infrastructure / Direction Générale de l’Infrastructure Rurale (DGIR) DSAD Division of Studies and Agricultural Development / Division des Etudes et du Développement Agricole (DEDA) DWR Directorate of Water Resources / Direction Générale des Ressources en Eau (DGRE) ERR Economic Rate of Return FDESP Framework Document for Environmental and Social Protection / Document Cadre de Protection Environnementale et Sociale (DCPES) FMS Financial Management System FYDP Five-year Development Plan (2010-2014) / Plan quinquennal (2010-2014) GEF Global Environment Facility ICB International Competitive Bidding ICR Implementation Completion Report IGA Income Generating Activity / Activité génératrice de revenu (AGR) Imada Administrative Sector IPA Integrated Participatory Approach / Approche Participative Intégrée (API) IREA Institute of Research and Education in Agriculture/ Institut de recherche et d’enseignement supérieur agricole (IRESA) LDC Local Development Council / Conseil de local de Développement (CLD) MAWRF Ministry of Agriculture, Water Resources, and Fisheries / Ministère de l’Agriculture, des Ressources Hydrauliques, et de la Pêche (MARHP) i FOR OFFICIAL USE ONLY MENARID Integrated Natural Resources Management in the Middle East and North Africa Region Program MESD Ministry of Environment and Sustainable Development / Ministère de l’Environnement et du Développement Durable (MEDD) METAP Mediterranean Environmental Technical Assistance Program M&E Monitoring and Evaluation / Suivi-évaluation (SE) NCGE National Company for Gas and Electricity / Société Tunisienne de l’Electricité et du Gaz (STEG) NCB National Competitive Bidding SONEDE National Company for Water Exploration and Distribution / Société Nationale d’Exploitation et de Distribution des Eaux (SONEDE) NEPA National Environnent Protection Agency / Agence Nationale pour la Protection de l’Environnement (ANPE) NRMP Natural Resources Management Project/ Projet de Gestion des Ressources Naturelles (PGRN) NRMP2 Second Natural Resources Management Project / Deuxième Projet de Gestion des Ressources Naturelles (PGRN2) NSU National Sanitation Utility/Office National de l’Assainissement (ONAS) OSDNW Office of Sylvo-pastoral Development in the North-West / Office de Développement Sylvo- pastoral dans le Nord-Ouest (ODESYPANO) PDP Participatory Development Plans / Plans de développement participatifs (PDP) RC Regional Council / Conseil régional (CR) POPM Project Operational Procedures Manual / Manuel des Procédures Opérationnelles du Projet (MPOP) RCAD Regional Commisariat for Agricultural Development / Commissariat régional de développement agricole (CRDA) RPF Resettlement Policy Framework / Document Cadre sur les Questions Foncières (DCQF) SAP MED Strategic Action Plan for the Mediterranean Sea SBD Standard Bidding Document SDR Safeguard Diagnostic Review SLM Sustainable Land Management SSS Single Source Selection STU Socio-Territorial Unit / Unité soci -térritoriale (UST) WSIP2P2 Second Water Sector Investment Project / Deuxième Projet d’investissement dans le secteur de l’eau (PISEAU 2) TICET Tunis International Center for Environmental Technologies / Centre International des Technologies de l’Environnement (CITET) TSB Tunisian Solidarity Bank / Banque Tunisienne de Solidarité (BTS) UCS Use of Country Systems UNFCCC United Nations Framework Convention on Climate Change UNCCD United Nations Convention to Combat Desertification Vice President: Shamshad Akhtar Country Director (Acting): Françoise Clottes Sector Director: Laszlo Lovei Sector Manager: Luis F. Constantino Task Team Leader: Lucie H.G. Tran This document has a restricted distribution and may be used by recipients only in the performance of their fficial duties. Its contents may not otherwise be disclosed without World Bank authorization. ii REPUBLIC OF TUNISIA Second Natural Resources Management Project CONTENTS Page STRATEGIC CONTEXT AND RATIONALE ......................................................................... 1 A. Country and sector issues.................................................................................................... 1 B. Rationale for Bank involvement ......................................................................................... 2 C. Higher level objectives to which the project contributes .................................................... 3 PROJECT DESCRIPTION ......................................................................................................... 4 D. Lending instrument ............................................................................................................. 4 E. Program objective and Phases ............................................................................................ 4 F. Project development objective and key indicators .............................................................. 4 G. Project components ............................................................................................................. 5 H. Lessons learned and reflected in the project design ............................................................ 7 I. Alternatives considered and reasons for rejection .............................................................. 8 IMPLEMENTATION .................................................................................................................. 9 J. Partnership arrangements (if applicable) ............................................................................ 9 K. Institutional and implementation arrangements .................................................................. 9 L. Monitoring and evaluation of outcomes/results ................................................................ 10 M. Sustainability ..................................................................................................................... 11 N. Critical risks and possible controversial aspects ............................................................... 11 O. Loan conditions and covenants ......................................................................................... 13 APPRAISAL SUMMARY ......................................................................................................... 14 P. Economic and financial analyses ...................................................................................... 14 Q. Technical ........................................................................................................................... 14 R. Fiduciary ........................................................................................................................... 15 S. Social................................................................................................................................. 16 T. Environment ...................................................................................................................... 17 U. Safeguard policies ............................................................................................................. 18 V. Policy Exceptions and Readiness...................................................................................... 19 iii Annex 1: Country and Sector or Program Background ......................................................... 20 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ................. 24 Annex 3: Results Framework