Ukraine - Transcarpathian Biodiversity Protection Project (Vol. 1 of 2) : Memorandum of the Director (MOD)

Document of The World Bank FOR OMCLAL USE ONIY Report . 12718-UA GLOBAL ENVIRONMENT FiWILITY MEMORANDUM AND RECOMMENDATION OF THE DIRECTOR COUNTRY DEPARTMENT Ii OF THE EUROPE AND CENTRAL ASIA REGION OF THE INTERNATIONAL BANK FOR RECONSTRUCTION ANYi DEVELOPMENT TO THE REGIONAL VICE PRESIDENT ON A PROPOSED GRAY-" FROM THE GLOBAL ENVIRONMENT xRUST FUND IN AN AMOUNT EQUIVALENT TO SDR 400,000 TO UKRAINE FOR A TRANSCARPATHIAN BIODIVERSITY PROTECTION PROJECT JANUARY 24, 1994 Natural Resources Management Division Country Department IV Europe and Central Asia Region MICROGRAPHICS This document has a restricted distribution and ma} their official duties. Its contents may not otberwis Report No: 12718 UA Type: MOD  CURRENCY EQUIVALENT (April 1993) 2690 Karbovanets (Kb) = US$1 WEIGHTS AND MEASURES The metric system is used throughout this report. GLOSSARY OF ABBREVIATIONS CBR - Carpathians Biosphere Reserve CIS - Commonwealth of Independent States DPRA - Department of Protected and Recreation k- eas ECU - Europoan Currency Unit EC - European Community GEF - Global Environmental Facility GET - Global Environment Trhst Fund GIS - Geographic Information System GDP - Gross Domestic Product MBR - International Biosphere Reserve (Slovak, Poland and Ukraine) IBRD - International Bank for P.econstruction and Development ICB - International Competitive Bidding IM - International Monetary Fund IUCN - International Union for the Conservation of Nature and Natural Resources LCB - Local Competitive Bidding MEP - Ministry for Environmental Protection PMU - Project Management Unit SOE - Statement of Expenditure TA - Teihnica! Assistance FISCAL YEAR January 1 to December 31  FOR OMCIAL USE ONLY UKRAINE TRANSCARPATWAN BIODIVERSITY PROTECTION PROJECT GRANT AND PRoJEcr SUMMARY RCPIENT: Ukraine, Ministry of Environmental Protection AMOUNT: 400,000 SDR TERMS: Grant ONLENDING: Not applicable FINANCING PLAN: Local Foreign Total Source (US$ M[illion) GET Grant 0.250 0.250 0.500 MacArthur Foundation Grant 0.000 0.010 0.010 Government 0.070 0.000 0.070 TOTAL 0320 0.260 0.580 ECONOMIC RATE OF RETR: Not calculated, though substantial economic and environmental benefits. STAFF TEC AL REPORT: Report No. 12718-UA dated January 1994 MAPS: 1. Transcarpathian Biodiversity Protection Project IBRD Map No. 25416 2. GEF Biodiversity Projects: East Carpathians IBRD Map No. 25417 3. Suggested Priorities for Environmental Protection and Natural Resource Management IBRD Map No. 25415 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.  MEMORANDUM AND RECOMMENDATION OF THE DIRECTOR OF THE COUNTRY DEPARTMENT TO THE REGIONAL VICE PRESIDENT 1. I submit for your approval the following memorandum and recommendation on a proposed Global Environmental Trust (GET) grant to the Ukraine for 400,000 SDR, the equivalent of US$ 500,000, to finance a project to protect the endangered ecosystems in the Eastern Carpathian Biosphere Reserve of Ukraine and its adjacent buffer zones. Background 2. Seven ecological communities transect Ukraine: European broadleafed forests, the northern taiga, the interior steppe, semi-and sands and marshes near the B3lack and Azov Seas, the seaside littor&a estuaries of large rivers such as the Dnieper, and the sub-tropical pine and chaparral of Crimea. The forest sector of Ukraine (10 million ha, 14 perceat of the land area) is under great envirownental stress, impacted by poor forestry and agricultural practices and, in some areas, by air pollution. The East Carpathian mountains are a significant part of this forest resource and are recognized as a key center of andemism. Steps to protect the area are urgently required. 3. The Government and the World Bank are presentty finalizing a Joint Environmental Study. This study included a review of nature reserve and park management needs in the country. Tne establishment of reserves for the protection of unique natural ecosystems and genetic resources of plant and animals is an important challenge recognized by the Government of Ukraine1. The network of protected areas includes 15 strict nature reserves (Zapovedniki), 3 National Parks, 2 Biosphere Reserves and many other protected landscapes, zoological and botanic gardens and other locally significant reserves. Some 2 percent of the country is under some form of nature protection. 4. The Government is also restructuring its national forest management plans. Tirmber cutting is prohibited on 30 percent of the forested areas. The government is taking measures to strengthen the management of the forests and also to extend forest cover in the country. S. The Eastern Carpathian Mountains along the borders of the Slovak Republic, Poland and Ukraine contain some of the least disturbed ecosystems in Eastern Europe. The Carpathians contain one quarter of the flora of Europe and many endemic and medicinal plants useful to mankind. The largest remaining European stand (10,900 ha) of virgin beech forest is standing in the Carpathians. This is a remarkable naural resource for the rest of Europe, which has lost such undisurbed areas. A part of the East Carpathians has been formally designated by Ukraine as the Carpathians Biosphere Reserve under the UNESCO Man and the Biosphere Program. 6. Carpathians Biosphere Reserve The Ukinian Carpathians contain unique preserved areas of beech and spruce forests of significance for analyzing the development history of the East Carpathians vegetation. The first reserve of beech and fir-beech forests was created in 1932 on the Stuzica mountain slopes. Since that time the Reserve has been enlarged to 2,952 ha and included in the Ukrainian Carpathians Biosphere Reserve (CBR). The CBR was creatd in 1991 with a total area of 38,930 ha, which is subdivided into a reserve zone (21,879 ha), a buffer zone (8,949 ha), and a conservative nature management zone (8,071 ha). The reserve zone includes the Stuzica scenic reserve, and four separately 1 Ukrain Natoa Repol, UN Conwe an Eanvironmn a evdw ent,a 1992.  -2 - located forest or alpine areas. These areas are the Khust massif, the Ugolsko-Shyrokoluy Lansky Massif, the Chornogirs'ky massif and the Maramoros'ky massif. Rationale for GEF Involvement 7. The GEF project has been accorded high priority by the Government. However, funds are not ava!1able in Ukraine to carry out the work proposed here The Government does not want to borrow external resources for it at market rates of interest. The GEF project would provide the Government with urgently needed support to assess and redress the environmental damage to Ukraine's forests. 8. Tne Eastern Carpathians share transboundary ecosystems. The programs developed for their integrated m2nagement will be of international utility. The global significance of the areas initially selected is confirmed and supported by their designations by UNESCO and the World Wildlife Fund (International), being identified among the "existing ecological bricks" of Europe. 9. This project will constitnte a contribution to the GEF Portfolio. In its efforts to preserve global biodiversity, the GEF will encounter more of the transboundary issues being addressed in this project. It will also frequently encomnter the need to balance in-situ and ex-sltu preservation with innovative techniques. It will, in particular, face the conflicting demands of a resident population which can be either a force for further eroding biodiversity or a potent ally in its preservation. In these ways, the progress of this project will be germane to ongoing activities of the GEF and have utility as a case study in trying to incorporate community participaiton. Project Objective 10. The objectives of this project are to: (a) Incorporate this small Ukrainian GEF project ($500,000) as an add-on to the proposed Slovak Biodiversity Protection Project (GEF $2.3 million). The innovation being supported under the Ukrainian project is threefold: this would be the first GEF project in the Ukraine, the first trilateral transboundary project supported under the GEP, and the first three-country Trust Fund to be organized for biodiversity protection. The MacArthur Foundation of Chicago, Illinois is willing to contribute $30'v,000 to initiate this Carpathian Biodiversity Protection Trust Fund. (b) Support the Ukrainian portion of the overall trilateral effort (Ukraine, Poland and Slovak) to protect habitat fragments, stop species loss and upgrade habitat management. (c) Develop and implement the legal, institutional and administrative interventions to achieve the long term protection of the area in Ukraine as well as the abutting zones in Poland and the Slovak Republic.  -3 - 11. The project would start with an ecological perspective and includes both ln-sfu and ex-sti components to conserve biodiversity. This would entail a program approach involving scientific study of the flora and fauna of the selected key endangered forests, induding threats to their viability from human pressures, and developing options to ensure the conservation of species considered at risk. Modem approaches of conservation biology and restoration ecology will be used to iJentify key management measures. These measures will include the identification of minimum viable populations and cri,ical habitats and establishment of wildlife corridors or linked areas of modified land use which will firffier enhance biodiversity protection objectives called for by the GEF. Project Description 12. The GEF operation would support Ukraine's effort to protect its forest ecosysten-s. Seletion of the parks, reserves and zones under the proposed project are based on agreed conservation priorities. Project investments include: (a) a Biodiversity Protection Program that will initiate a range of activities including: inventory (biological and geographical), a systems extinction model, genetic studies, GIS critical habitat analysis and a Teans Carpathian Planning Group. The program will include the development of a national policy on incentives and easements for select land uses which buffer the protected areas. To ensure the longer term maint- s;ance of some of these innovative approaches, a plan and curriculum will be developed for the inclusion of the study of conservation biology in the tertiary forestry curricula, as forestry is the base qualification for most of the mountain naural resource managers; (b) a Management Resources Program to enable coordinated management of the discontinuous reserved areas of the Carpathians Biosphere Reserve and the implementation of the above protection program. These investments will include: (i) computer equipment and GIS facilities, (Ji) provision of transport and communications for e iforcement, protection and management, and (iii) limited assistance with demonstration activities; (c) a Training Program that will include development of communications skldls (extension, public education, interpretation and media relations), language training, data base and computer training, park planning and management training; and, (d) a Management Program that will include assistance to support a joint Ukraine GEP unit (both for the Danube Delta GEF and this project) within the Department of Protected and Recreation Areas and the establishment of a small Project Unit at the administrative center in Uzghorod. i hi-situ conewvation keeps conponen of biodiversiy whin their orginal habitat or nattt envlmet as a pet of their evohtionsay dynamic ecosywem, wheras ex-s*u consexvazion kep then ali outside of their orginal habiat or ev;areneuL  -4- Actons Agreed 13. Daring negotiations on the Grant Agreement, assurances were obtained as follows: (a) Grant Effectiveness. Tbe grant would be declared effective upon submission of documentation satisfactory to the Bank that the Project Coordinator in Kiev and the Project Manager in Uzghorod has been appointed. (b) Accounts. A special account would be established in a commercial bank for the project prior to disbursement of the grant. This account would be audited annually by an auditing firm acceptable to the Bank. (c) Pro%ct Management. A Project Coordination Unit (Ministry of Environment, Kiev) and a Project Management Unit (PMU) within the Carpathians Biosphere Reserve at Uzghorod would be established prioi to disbursement of the grant. Benefits 14. Tne principal benefit is to protect a substantial zone of international ecological importance. The Eastern Carpathian forests of Poland, Ukraine and Slovak are unique in Europe and a source of endemic biodiversity. 15. Innovation is fostered by the integration of the various levels of biological diversity (species, population, landscape, habitat) to address issues in conservation planning (as described above). Technically, the project will break new ground in the development of the preservation of genetic material and in the applications of GIS and simplified methods of digital processing. It is also fostered by the unique (for Ukraine) collaboration of grc :ps from a variety of interests in addition to foresters in issues of forest planning and management, for me balancing of ex-situ with In-situ approaches to biodiversity conservation, and by the use of consultation at the local level in the identification of viable land use compatible with the preservation of endangered natural systems. 16. The project is designed for sustainability. The long-term viability is achieved through the building of institutions within Ukraine, including some which are relatively disenfranchised but important to biodiversity such as the forestry and Protected Reserve Managements. Other facets that are designed to ensure a project legacy are the training and professional development components. The goal of sustainable revenue generation activities based on consultation w th residents who would engage in these activities is another way of ensuring longevity of interventions. These activities are premised on their compatibility with the preservation of biediversity. They include nature and culture-based tourism, the selling of minor forest products, harvest.ng game, balancing uneven-aged, small-scale forest production with natural regeneration, and other economically sound and environmentally compatible activities. 17. There is a demonstration value and replicability through the use of integrated planning, new technologies, and bilateral organizational structures that foster international resource management approaches. This GEF project is going to foster solutions for conserving biodiversity. As a test of this approach to regional issues in biodiversity, the project can have significant demonstration value.  -5^ Risks 18. The major risks are primarily technical ard managerial. The technical risk is that the basic approach to biodiversity protection in the Eastern Carpathians protected areas be further delayed, resulting in continuing degradation of the biodiversity ecosystem. The managerial risk is that Government salaries are extremely low resulting in the departure of top scientists and technicians expected to manage and implement the project from the service of the government and research institute. The project would mitigate these risks by implementing this project in late 1993, 1994 ane 1995 to initiate this protection program and by providing funding to support the work of the key scientists and technicians working on the project. Mitigation of the risks would also be achieved by the monitoring and evaluation procedures built into the terms of reference for the Project Management who will be reporting on a quarterly basis. Additionally, quality and control will be ac}ieved by the proposed small secretariat located at Uzghorod which would work closely with the Polish and Slovak units in the Eastern Carpathians to jointly foster its UNESCO designation as a "Man and the Biosphere" Reserve (MaB). There are built-in quality control and monitoring elements because of the research that will be published in peer-reviewed journals of international quality. Environmental Assessment 19. The project has been reviewed by the Regional Environment Division and it has been placed in the environment screening category "C". Recommendation 20. 1 am satisfied that the proposed grant would comply wih the provisions of Resolution No. IBRD 91-5 of the Executive Directors relating to the establishment of the Global Environment Facility and recommend that the Regional Vice President, Europe and Central Asia Region, approve~ it. Basil Kavalsky Director Country Department IV Europe and Central Asia Region Attachments Washington, D.C. January 24, 1994  6- SCHEDULE A UKRAINE TRANSCARPATHIAN BIODIVERSITY PROTECTION PROJECT CCOST ESTIMATES3 (Current US$ Ihousands) USS in Thousands Locl Fowe1 TOal % Forign % Total Exchango Base Costs A. Blodiversity Protection Program 1. Rescrve Inventozy 4.0 10.0 14.0 71.4 2.6 2. Acquisition Plan and Investigations 10.0 0.0 10.0 0.0 1.9 3. Floma and Fauna Inventozy 20.0 2.1 2?.1 9.5 4.1 4. Systems and Extinction Model 10.0 5.0 15.0 33.3 2.8 5. 'Jenetic and Specics Studies 35.0 10.0 45.0 22.2 8.4 6. GIS and Critcal Habitat Analysis 3.0 7.0 10.0 70.0 1.9 7. Tn Fs-Caipathias Planning 5.0 5.0 10.0 50.0 1.9 8. Development of National Policy 8.0 2.0 10.0 20.0 1.9 9. Curriculum Development 10.8 1.2 12.0 10.0 2.3 Sub-Total 105.8 42.3 148.1 28.6 27.8 B. Management Resourc Program 1. Computer Equipnct and GIS 0.0 120.0 120.0 100.0 22.5 2. Tmnspoit and Commnications ;2.5 32.5 65.0 50.0 12.2 3. Assistance Wiih Demation 25.0 0.0 25.0 0.0 4.7 Sub Total 57.5 152.5 210.0 72.6 394 C. Trng Program 1. Data Base and Computing 8.0 2.0 10.0 2U.0 1.9 2. Prof. Dcv. and Lang. Trining 85.0 0.0 85.0 0.0 15.9 Sub-Total 93.0 2.0 95.0 2.1 17.8 D. Public Education & Awareuess 1. Cofmpletion of Visitor Center 20.0 0.0 20.0 0.0 3.8 2. Equipment 8.0 . 0 10.0 20.0 1.9 3. Publications and Strategy 2.0 8.0 10.0 80.0 1.9 Sub-Total 30.0 10.0 40.0 25.0 7.5 E. PROJECT MANAGEMENT 1. Assist Central GEF Unit - Kiev 7.5 7.5 15.0 50.0 2.8 2. Uzghorod Project Management Unit 25.0 0.0 25.0 0.0 4.7 Sub-Total 32.5 7.5 40.0 18.8 7.5 Total BASELINE COSTS 318.8 214.3 533.1 40.2 100.0 Physical Contingency 16.6 10.0 26.6 37.6 5.0 Prie Contingencies 14.8 5.5 20.3 27.2 3.8 Total PROJECT COm 350.2 229.8 580.0 39.6 108.8 2/ Exclades MacAithur grants to assist with training and establishnent of Tn-National Tust.  7 SCHEIDILE UKRATNE TRANSCARPATAN BIODIVERSITY PROTECTION PROJECT ESTIMATED SCHEDULE OF DISBURSEMENTS OF GET GRANT PROCUREMENT ARRANGEMENTS (US$ Thouands) Procurenient Method Items ICB C Total (1) GIS, Air Monitoring and - 100.0 100.0 Supporig Equipment (100.0) (100.0) (2) Comnundaaoos and Transport Assistane - 150.0l 1a0.0 (150.0) (150.0) (3) Techical Assist- 110.0 b 110.0 (100.0) (100.0) (4) Incremental Sdaries, - 220.0 220.0 Operations and (150.0) (150.0) Maineac TOTAL _s0.0 ss0.0 (500.0) (500.0) NOTE: Figur in parethesis aro E Gra * Inftmatonal Shopping ($200.000) and Diet Pwase ($50,000) b Accoding to World Bank consultant guidelines. e Project Management Prgram and contracted field staff to implement tchnial activities. DlSBtJRSENT Disbv-isent Amount (US$ million) % Thandug (1) Goods and Equipment 0.15 100 % (2) Technical Assitne 0.10 100 % (3) Salaries, Operations & Maintenance 0.15 100 % (4) Un-allocated 0.10 - TOTAL 0.50  (continued) ESTIMATED IBRD DISBURSEMENTS (US$ million) IBRD FISCAI, YEAR 1994 1995 1996 Annual 0.05 0.20 0.25 Cumulative 0.05 0.25 0.50 Cloing Dste: Decemer 31, S995 SCHEDULE C TIMETABLE OF KEY PROJECT 1PROCESSNG EVENTS (a) Time Tak to Prepate ................ 3 months (b) Prepard by Minisy of the E ironmentwith Bank Asstance . (c) First Bank Mis8ion .......... October 1992 (d) ApprsalMissionDepu ........ May1993 (e) Notoioaios andGrant Siging ........ Je1993 (0 Planed DateofEffivenss ........ September1993 (g) ListofRewvantPCRR andPPARS ........ No M:\PUKRlMP3ORELZ.UIR Jany 24, 1994  r_____ _____ ______ ___-_______ _____ ______-____ ______ _____ ______ _____ __RD IEBRD 25416 -