Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report no. 4611 1-MG PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT FROM THE Public Disclosure Authorized GLOBAL ENVIRONMENT FACILITY TRUST FUND IN THE AMOUNT OF US$5.9 MILLION TO THE REPUBLIC OF MADAGASCAR FOR AN IRRIGATION AND WATERSHED MANAGEMENT PROJECT Public Disclosure Authorized September 30,2008 Agriculture and Rural Development Sustainable Development Department Country Department AFCOl 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. MADAGASCAR Irrigation and Watershed Management Project CURRENCY EQUIVALENTS (Exchange Rate Effective May 2008) Currency Unit = Ariary (MGA) 1 MGA = US$0,00047 SDR = US$1.48620 US$ = SDR0.67286 FISCAL YEAR January 1 - December 3 1 ABBREVIATIONS AND ACRONYMS ASC Agricultural Service Center AFD Agence Franqaise de Dkveloppement APO Agricultural Professional Organization BV Bassin versant (Watershed Management) BV-PI Bassin versqnt - Pkrimdtre irriguk (Watershed Management - Irrigation Scheme) CAS Country Assistance Strategy DAIR Direction de 1 'Appui aux Investissements Ruraux (Directorate for Rural Investment) CDP Communal Development Plan csc Communal Support Centre DFB Directorate for Finance and Budget NPCU National Program Coordination Unit DRDR Direction Rkgionale de Dkveloppement Rural (Regional Directorate for Rural Development) DSI Department ofInformation Systems DTA Decentralized Territorial Authorities FERHA Fonds d 'Entretien de Rkseaux Hydro Agricoles (Irrigation Maintenance Fund). FMG Malagasy Franc (F)WUAs (Federation of) Water Users Associations GDP Gross Domestic Product GEF Global Environmental Facility GELOSE Gestion Locale Skcuriske (Community Management) GoM Government of Madagascar IDA International Development Association MAEP Ministry ofAgriculture, Animal Husbandry and Fisheries MDAT Ministry ofDecentralization and Land Development MEEF Ministry of Environment, Water and Forest Resources MEM Minister ofEnergy and Mines NAP National Action Plan O&M Operation and Maintenance PC Performance Contract PLOF Local Land Occupation Plan .. 11 FOR OFFICIAL USE ONLY PNJBV-PI Programme National Bassins Versants - PdrimGtres [email protected] (National Irrigation and Watershed Management Program) PMU Project Management Unit PRSF Poverty Reduction Strategy Framework PSRP Poverty Reduction Strategy Paper FUD Research-Development RDFB Regional Directorate for Finance and Budget RDP Regional Development Plan RPMU Regional Project Management Unit SLM Sustainable Land Management TT Tranoben’ny Tantsaha - Chambers of Agriculture UNCCD United Nations Convention to Combat Desertification WB World Bank WUA Water Users Association WDP Watershed Development Plans WMP Watershed Master Plan Vice President: Obiageli Katryn Ezkwesili Country Director : Ruth Kagia Sector Manager: Karen Mcconnell Brooks Task Team Leader: Ziva Razafintsalama This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. MADAGASCAR Irrigation and Watershed Management Project TABLE OF CONTENTS A . STRATEGIC CONTEXT AND RATIONALE........................................................... 1 A . 1. Country and Sector Issues ........................................................................................... 1 A.2. Rationale for Bank involvement, relation to Country Assistance Strategy and GEF eligibility................................................................................................................................ 3 A.3. Higher level objectives to which the project is contributing ......................................... 4 B . PROJECT DESCRIPTION .......................................................................................... 5 B. 1 . Lending Instrument ..................................................................................................... 5 B.2. Program Objectives and Phases................................................................................... 5 B.3. Project Development Objectives and Key Indicators.................................................. -6 B.4. Project Components................................................................................................... -7 B.5. Lessons Learned and Integrated into the Project Concept .......................................... 11 B.6. Alternatives considered and Reasons for Rejection ................................................... 13 C . IMPLEMENTATION............................................................................................... 14 C.l. Partnership Arrangements ......................................................................................... 14 C.2. Institutional and Operational Arrangements ............................................................. -14 (2.3. Monitoring and Evaluation of Outcomes/Results ...................................................... 16 C.4. Sustainability and Replicability ................................................................................. 17 C.5. Critical risks and Possible Controversial Aspects ...................................................... 17 C.6. Credit conditions and covenants ................................................................................ 18 D. PROJECT BRIEF SUMMARY .................................................................................. 19 D. 1. Economic and Financial analysis .............................................................................. 19 D.2. Technical .................................................................................................................. 20 D.3. Fiduciary .................................................................................................................. 21 D.4. Social analysis .......................................................................................................... 22 D.5. Environmental analysis ............................................................................................. 22 D.6. Safeguard Policies .................................................................................................... 23 D.7. Policy Exceptions and Readiness .............................................................................. 25 Annex 1: National. Sectoral and Program Context........................................................... 26 Annex 2: Major Related Projects Financed by the Bank and / or Other Agencies .........36 iv Annex 3: Results Framework and Monitoring and Evaluation ........................................ 38 Annex 4: Detailed Project Description .............................................................................. 45 Annex 5: Project Costs ........................................................................................................ 59 Annex 6: Institutional and Implementation Arrangements ............................................. 60 Annex 7: Financial Management and Disbursement Arrangements ............................... 73 Annex 8: Procurement Arrangements ............................................................................... 83 Annex 9: Economic and Financial Analysis ...................................................................... 89 Annex 10: Safeguard Policies Issues ................................................................................ 107 Annex 11: Project Preparation and Supervision .............................................................. 114 Annex 12: Documents in the Project File ........................................................................ 116 Annex 13: Incremental Cost Analysis .............................................................................. 117 Annex 14: Technical Annex Land Degradation in Madagascar ..................................... 131 Annex 15: APL Triggers ................................................................................................... 144 Annex 16: Statement of Loans and Credits...................................................................... 146 Annex 17: Country at a Glance ........................................................................................ 148 Annex 18: MAP ................................................................................................................ 150 V MADAGASCAR Irrigation and Watershed Management Project GEF Project Brief Africa Regional Office AFTAR Date: September 30,2008 Team Leader: Ziva Razafintsalama Country Director: Ruth Kagia Sectors: Irrigation and drainage (5O%);Agro- Sector DirectodManager: Inger Andersed industry (30%);Crops (20%) Karen Mcconnell Brooks Themes: Other rural development (P); Other Project ID: PO74086 trade and integration (S) Lending Instrument: Adaptable Program Loan Environmental screening category: Full Assessment Global Supplemental ID: PO88887 Team Leader: Ziva Razafintsalama Lending Instrument: Specific Investment Loan Sectors: Irrigation and drainage (50%); Agro- Focal Area: Land Degradation industry (30%); Crops (20%) Supplement Fully Blended?: No Themes: Rural markets (P); Other trade and integration (S) [ ] Loan [ICredit [XI Grant [ ] Guarantee [ 3 Other: Global Environment Facility (US$m): 5.90 For Loans/Credits/Others: Total Bank financing (US$m.): 30.00 (approved in November 2006)