Tunisia - Natural Resources Management Project

Document of The World Bank Report No. 16488-TUN PROJECT APPRAISAL DOCIJMENT ON A PROPOSED LOAN IN THE AMOUNT OF FRF 150.0 MILLION TO THE REPUBLIC OF TUNISIA FOR A NATURAL RESOURCES MANAGEMENT PROJECT April 15, 1997 Natural Resources and Environment Division Maghreb and Iran Department Middle East and North Africa Region  REPUBLIC OF TUNISIA CURRENCY EQUIVALENTS Currencv Unit = Tuniisian Dinar (DT) Official Exchange Rate (DT pcr US$) DT 0.97 = US$1 FISCAL YEAR Januarv 1 - December 31 WEIGHTS AND MEASURES Metric System ABBREVIATIONS AND ACRONYMS ASIL Agricultural Sector Adjustment Loan (Pret d 'investissement au secteur agricole) AIC Water User Association (Association d 'interet collectif pour / 'eau potable et I 'irrigation) CAS Country Assistance Strategy (Strategie d'assisrance au pavs) CEM Countrv Economic Memorandum (.116norandunm economique) CES Soil and Water Conservation (Conservation des eaux ei des sols) CD Community Development Committee (Comite de developpement) CFD French Development Fund (Caissefranairse de developpement) CGF General Auditor from the Ministry of Finance (ContrOlt' general des finances) CNC National Steering Committee (ComitW national de concertation) CPA Annual Contract (Contrat-Programme Annuel) CRDA Regional Agriculture Development Office (Commissariat regional au developpement agricole) DGFE General Directorate of Finance and Incentives (Direction generale dufinancement et des encouragements) DGRE General Directorate for Water Resources (Direction generale des ressources en eau) EU European Union (Union europeenne) GOT Government of Tunisia (Gouvernement de la Repuhlique tunisienne) GTZ German Bureau for Technical Cooperation (Deutsche (;esellschaft fur Technische Zusanimenarbeit) IFAD International Fund for Agricultural Development (Fondi international pour le developpement agricole) INS National Statistics Institute (Institut national de la stati otique) LSMS Living Standard Measuremcnt Survey (Enqu&te niveau de vie) M&E Monitoring and Evaluation (Suivi et evaluation) MOA Ministry of Agriculture (Afinistere de l 'agriculture) MOE Ministry of the Environment (Alinistere de 1 'environnement et de I 'amenagement du territoire, MOED Ministry of Economic Development (.linistere diu developpement economnque) MOF Ministry of Finance (Alinistere desfinances) NRMP Natural Resources Management Project (Proyet de gestion des ressources naturellesl ODESYPANO Northwest Forestry and Pastoral Development Agency- (()ffice de developpemnent sylvo-pastoral du nord-ouest) OEP Livestock and Rangelands Development Agency (Office de I'eevage et du paturage) PDP Participatory Development Plan (Plan de developpement participatif) PDRI Integrated Rural Development Project (Projet (de developpement rural integre') PIU Project Implementation Unit (UnitW centrale de coordination) SIFOP Forestry and Pastoral Information System (SVsteme d 'information forestier et pavtoral) UST Local Communith (l.nit socio-territorialej Vice President K. Dervi} Director D. Ritchie Division Chief M. Wilson Task Manager L. Msellati  Tunisia Natural Resources Management Project Project Appraisal Document Table of Contents Project Data Block 1: Project Description --------------------------------------------------------------------------1 1. Project Development Objectives------------------------------------------------------------------------ 1 2. Project Components--------------------------------------------------------------------------------------1 3. Benefits and Target Population-------------------------------------------------------------------------2 4. Institutional and Implementation Arrangements -----------------------------------------------------3 Block 2: Project Rationale ---------------------------------------------------------------------------------4 5. CAS Objectives Supported by the Project ------------------------------------------------------------4 6. Main Sector Issues and Government Strategy-------------------------------------------------------4 7. Sector Issues to be Addressed by the Project and Strategic Choices------------------------------5 8. Project Alternatives Considered and Reasons for Rejection----------------------------------------5 9. Major Related Projects Financed by the Bank and/or Other Development Agencies-----------5 10. Lessons Learned and Reflected in the Project Design ---------------------------------------------6 11. Indications of Borrower Commitment and Ownership---------------------------------------------7 12. Value Added of Bank Support ------------------------------------------------------------------------7 Block 3: Summary Project Assessments -----------------------------------------------------------------8 13. Economic Assessment----------------------------------------------------------------------------------8 14. Financial Assessment-----------------------------------------------------------------------------------8 15. Technical Assessment----------------------------------------------------------------------------------9 16. Institutional Assessment ------------------------------- ------------------------------------------9 17. SocialAssessment--------------------------------------------------------------------------------------10 18. Environmental Assessment ----------------------------------------------------------------------------10 19. Participatory Approach --------------------------------------------------------------------------------10 20. Sustainability--------------------------------------------------------------------------------------------11 21. Critical Risks--------------------------------------------------------------------------------------------12 22. Possible Controversial Aspects -----------------------------------------------------------------------12 Block 4: Main Loan Conditions---------------------------------------------------------------------------13 23. Effectiveness Conditions-------------------------------------------------------------------------------13 24. Other -13--- --------------------------------------------------13 Block 5: Compliance With Bank Policies---------------------------------------------------------------- 14  Annexes Annex 1: Project Design Summary Annex 2: Detailed Project Description Annex 3: Estimated Project Costs Annex 4: Cost Effectiveness Analysis Summary Annex 5: Financial Summary Annex 6: Procurement and Disbursement Table A: Project Costs by Procurement Arrangements Table B: Prior Review Thresholds Table C: Allocation of Loan Proceeds Annex 7: Project Processing Budget and Schedule Annex 8: Documents in the Project File Annex 9: Statements of Loans and Credits Annex 10: Country at a Glance Maps Agro-ecological Systems (IBRD 28277) Tell Agricultural System (Jendouba) (IBRD 28278) Dorsale Occidentale Agricultural System (Kasserine) (IBRD 28279) Jeffara Agricultural System (Medenine) (IBRD 28280)  INTERNATIONAL BANK FOR RECONSTRUCTI()N AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Middle East and North Africa Regional Office MENA: Country Department I Project Appraisal Document Tunisia Natural Resources Management Project Date: 4/16/97 [ ] Draft IX] Final Task Manager: L. Msellati Country Manager: D. Ritchie Project ID: TN-PA-5736 Sector: VM (Natural Resources Management) Lending Instrument: Specific Investment Loan PTI: [X] Yes I ] No Project Financing Data [XI Loan [ I Credit [ ] Guarantee [1 Other [Specify] ............................. ..................................... ................. .......................................................... ................... ............ ........... ...................... ...... .................. ......... For Loans/Credits/Others: Amount: FRF 150.0 million (US$26.5 million equivalent) Proposed Terms: [ ] Multicurrency [X] Single currency Grace period (years): 3 years I ] Standard Vanrable [Xl Fixed I LIBOR-based Years to maturity: 15 years Commitment fee: 0.75% annually Service charge. Financing plan (US$m): Source Local Foreign Total Government 16.6 - 16.6 IBRD 11.1 15.4 26.5 European Union 1.0 0.7 1.7 Beneficiaries 6.5 - 6.5 Total 35.2 16.1 51.3 ......................................................I................ ......................................... ................. ................................ .... ....... ................. ................. .............. . .... ........ ..... ...I ......... Borrower: Republic of Tunisia Guarantor: N/A Responsible agency(ies): Ministry of Agriculture, including DGFE and CRDAs of Jendouba, Kasserine and Medenine Estimated disbursements (Bank FY/US$m): 1998 1999 2000 2001 2002 2003 Annual 0.3 3.0 5.7 10.0 5.5 2.0 Cumulative 0.3 3.3 9.0 19.0 24.5 26.5 ........................................................................................................................................................................................................................... Expected effectiveness date: October 15, 1997 Closing date: June 30, 2003   Project Appraisal Document Page I TUNISIA Natural Resources Management Project Block 1: Project Description 1. Project development objectives (see Annex Ifor key performance indicators): The objectives of the project are sustainable natural resources management, in particular of crop and range land in severcly degraded zones, and agricultural productivity improvements, attained with greater involvement of resource users in development programs. The participatory approach, tested by ODESYPANO in the North-West region, will be integrated in three pilot CRDAs (Regional Agriculture Development Offices of the MOA), each operating in major agro-climatic zones of Tunisia, in an effort to improve natural resources management; new procedures will also be established to design and implement policies for sustainable natural resources management over the long term. The strategies for achieving project objectives are: (a) improve natural resources management, preserving resources and, where feasible, helping to reverse degradation, by developing integrated land management practices, controlling land erosion and introducing new technologies to increase on-farm income; (b) improve rural communities' standard of living and promote better-targeted and more durable investments by implementing Participatory Development Plans (PDP) that strengthen partnership between the administration and local communities and increase ownership and responsibility on the part of beneficiaries; and (c) support MOA decentralization by introducing the participatory approach at the CRDA level, and provide tools to enhance policy analysis and improve project planning and implementation for sustainable natural resources use. :.....................................................................-1.......... ............. ............. .................. ... .........I................................ .......................................... ........................... 2. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown): The project will test approaches for subsequent upscaling into a long-term national strategy to enhance natural resources management and improve agricultural productivity through a participatory approach. The project will have the following main components: (a) Natural Resources Management Operations. First, the project will finance Participatory Development Plans (PDP) prepared by local communities (Unites socio-territoriales, UST), assisted by the CRDA's technical staff, to address their priorities for soil and water conservation, agricultural and pastoral development, small-scale irrigation systems and other rural infrastructure, and women's support activities. Second, the project will finance erosion control and water recharge investments in the three selected CRDAs, mainly on public lands, as part of the Government's national soil and water conservation strategy, to protect the areas where a participatory approach would be tested; and (b) Institutional Strengthening, at both the CRDA and central levels, to support MOA human resources and inforrnation systems development, and to adjust the incentive framework for sustainable resources management. ...................... .................. .............................................. ............. .................. ..............- -...........I.........................I-................................................... ............-........ Component Category Cost Include. % of Contingencies Total . ............. ............................................................................. ..................................................................................................... ............ (U S$M. A. Natural Resources Management Operations 1. Participatory Development Plans (PDP) Physical 38.0 73.9% - Soil & Water Conservation 11.7 22.8% - Agricultural & Pastoral Development 10.3 20.1% - Small-scale Irrigation 3.8 7.4% - Rural Infrastructures (Rural Roads and Potable Water) 11.5 22.3% - Women's Support Activities 0.7 1.3% 2. Sub-sectoral lnvestments. Physical 6.4 12.6% - Hill-ponds 4.2 8.3% - Water Recharge Works 1.3 2.6% - Spate Irrigation Works 0.9 1.7% B. Institutional Strengthenin 6.9 13.5% 1. Project Management (Unite centrale de coordination) Project Management 2.0 4.0% 2. Institutional Development at CRDA Level Institution Building 4.9 9.5% .......................o..........................................................................1........................... ......................... .... ..................................... ........................ Total 51.3 100%  Project Appraisal Document Page 2 TUNISIA Natural Resources Management Project 3. Benefits and target population. (see attached maps ofproject area) * Project Benefits. Not only will the project have a positive environmental impact by conserving and, where possible, restoring natural resources, but it also will support revenue increases for small-holders in fragile rural areas among the most disadvantaged in Tunisia. The main project benefit will be a tested and demonstrated method for participatory and sustainable natural resources management that could be adopted on a national scale. Also, participation by users is the most effective way to manage collective and shared natural resources sustainably. Improved management of soils and pasture would reduce loss of soil fertility, erosion and dam sedimentation, as well as enhance vegetative cover, thereby increasing the value and consequent productivity of natural and physical capital. The direct benefits of the project would be on-site productivity gains and the indirect benefits would be reduced off-site costs of erosion. The project will also integrate all relevant agencies into the project planning, design and implementation process and thus permit the identification and leveraging of cooperative solutions. Finally, through the project, decision-making power will be devolved to the local level, providing greater incentives for local communities, interest groups and individuals to invest in natural resources management. * Project Area. Three selected project areas, each representative of a major agro-ecological zone and socio-economic system (the humid and diversified north, the dry agro-pastoral center and the arid, predominantly pastoral south), covering approximately 300,000 ha in all will benefit from an improved participatory natural resources management and monitoring system and associated durable investments developed and implemented over the life of the project. Criteria for selecting the project zones were: (a) a high level of resource degradation; (b) a low degree of development; and (c) the existence of an agricultural potential for sustainable productivity increases and production diversification. The areas are on the lower end of the national poverty spectrum, with relatively high population density, high land fragmentation and high labor emigration. * Target Population. The direct beneficiaries of the project will be some 20,000 families (112,000 people) living in the project areas organized as USTs. A UST refers to a local community comprising a number of families that hold individual or collective rights over certain territorially-defined natural resources (water, land, pastures, etc...), and whose social cohesion is sufficient for their representatives to make commitments on behalf of the whole community. A limited intervention area has been chosen to ensure adequate implementation capacity of the communities and organizations participating in the new strategy for natural resources development. Small farmers will benefit from improved water supplies and pastures, enhanced on-farm and off-farm incomes, from strengthened producer and common interest group ("professional" organizations), and from increased influence in the prioritization of development and natural resource management investments. Criteria for selecting specific locations and populations to participate in the project will include the definition of USTs of sufficient cohesion that community participation can be organized, and the subsequent interest and willingness of the UST to participate in the project and to support an action plan designed on the basis of community priorities and investment technical feasibility. * Assistance for Women. The project is designed to pay particular attention to women's needs. Their participation would be fostered through special assistance from animatrices. This would assure that women's views are taken into account in decision-making for both on-farm and community-level developments. In addition to general production development, separate funds available within the existing legal framework (i.e. Investment Code and Regional Development Program) will be provided for women specifically to support small-scale individual or collective projects. This component will be entirely financed by the Government budget and will be closely monitored dunrng project implementation.  Project Appraisal Document Page 3 TUNISIA Natural Resources Management Project 4. Institutional and implementation arrangements: Implementation period: 5 years: 1998 - 2002 The bank has appraised the Project Implementation Plan and found it satisfactory. Executing agencies: Implementation coordination will be through the Ministry of Agriculture's General Directorate of Finance and Incentives (DGFE). However, the major part of direct project implementation will be undertaken by the three CRDAs (Jendouba, Kasserine and Medenine). Moreover the project will support decentralization, and the design and implementation of more flexible budgetary procedures to increase CRDA autonomy. Project coordination: