Mozambique - Transfrontier Conservation Areas and Tourism Development Project

Report No. PID11612 Project Name MOZAMBIQUE-Transfrontier Conservation Areas and Tourism Development Project Region Africa Regional Office Sector Forestry (50%); General agriculture; fishing and forestry sector (40%); General industry and trade sector (10%) Project ID P071465 Supplemental Project P076809 Borrower(s) REPUBLIC OF MOZAMBIQUE Implementing Agency Address MINISTRY OF TOURISM, TFCA UNIT AND OTHERS Address: Ministry of Tourism, Avenue 25 de Setembro, 1018 - P.O. Box 614, Maputo, Mozambique Contact Person: Dr. Bartolomeu Soto, Head, TFCA Unit Tel: 258 1 420979 Fax: 258 1 306212 Environment Category B Date PID Prepared March 11, 2003 Auth Appr/Negs Date March 31, 2004 Bank Approval Date September 15, 2004 1. Country and Sector Background Socio-Economic Expressing a commitment to sustainable development, the Government has been active in creating a set of policies and strategies aimed at improving natural resource management, biodiversity conservation and sustainable tourism. An Environmental Framework Law and a supporting regulatory framework, with EIA procedures were established in 1998. New laws for land, forestry and wildlife hold promise for greater equity and local community participation, but government capacity to implement its policies, legislation and regulations remains inadequate. Lack of transparency and an ad hoc approach to the granting of large-scale agriculture, tourism, wildlife and other natural resource related concessions threaten the sustainability of development in these areas. Notably, large tracts of high quality coastline have been parceled out unsystematically to investors many of whom having little long-term investment commitment or experience. The benefits of investments associated with these concessions are largely being captured by narrow interests, and local communities are being both excluded from decision-making and are gaining little benefit. A patronage system is developing at the different levels of state intervention, which increases the fragility of Mozambique's much lauded economic recovery. Government's strategy to deal with these issues is based on improving capacity to implement and enforce the regulatory framework, but the pace of change in Mozambique appears too rapid for these approaches to be effective.  Environment The major environmental issue is that the link between environmental degradation and poverty has not been clarified or absorbed into the political decision-making process. Although weak environmental management is an issue which threatens future economic growth and is closing future options, this perception is unlikely to prevail under the present circumstances. Furthermore, the essentially exploitative nature of many of the larger scale private sector investments (e.g., gas, mining, coastal tourism, energy), requires even greater vigilance in terms of ensuring both social and environmental sustainability. The best approach to dealing with this situation may be to focus less on the negative consequences of present rates of environmental degradation and poor management, and more on a proactive approach in mainstreaming environment into the development process. In the PARPA, the Government declares that the State has the obligation to promote and enforce the sustainable use of natural resources, with the participation of communities and local government, for the benefit of the country as a whole, in order to prevent irreversible exploitation. Demonstrating that sound environmental management can play a significant role in facilitating private sector investment and stimulating growth will require that environmental concerns are addressed in a sound development-planning framework designed to attract high-quality private sector investment. At the same time, conservation priorities need to be recognized, and the intrinsic value of the maintenance of the country's high biodiversity should not be lost. Not all high value conservation areas will be able to be justified for management and protection on purely economic grounds. However, experience from other countries suggests that even low cost efforts to conserve eco-systems (by simple gazetting as conservation areas even without formal protection), can help establish a virtuous circle whereby the conservation option becomes legitimate. Tourism Tourism is the sector most favored in Africa by foreign direct investment, followed by telecommunication and information technology. In Mozambique, despite some progress at the institutional level, much remains to be done to create capacity and conditions for supporting the development of sustainable tourism. It is increasingly recognized that tourism must develop in the context of a national framework that addresses a broad range of issues that tourism as a sector would not have sufficient authority to address alone. The Government of Mozambique has demonstrated its interest in seeing the rapid but sustainable development of tourism in the country by establishing the high-level multi-sectoral Tourism Facilitation Committee, which identifies and addresses blockages to tourism development that might be caused by inappropriate sectoral policies, or through weak capacity of sectoral institutions to address constraints affecting tourism development. Tourism in Mozambique will need to offer a full range of different products linking inland, wildlife and nature based tourism, with that based on Mozambique's rich and varied coastline. The vision of Government is that tourism is cross-sectoral and will only develop sustainably if (i) it is integrated into the country's overall policies and economic and physical planning processes and (ii) effective linkages are created and - 2-  formally maintained across sectors. In the Mozambican sub-regional context, tourism is both cross-sectoral, and often transboundary in nature where a regional strategic approach is required. The consolidation or pooling of attractions at a regional level can create the critical mass of attractions to form a more attractive package than can be achieved by focusing at a national level. Achieving these benefits will require a comprehensive approach to tourism planning including identification of development poles and "clusters", network infrastructure, tourism products, and appropriate customs regulations to ease access to Mozambique for tourists, SMEs/micro-enterprises and the business environment, tourism related technical and vocational training. Institutional Issues - Transfrontier Conservation Areas Implementation of TFCA1 has demonstrated the need for an empowered institutional and inclusive champion to provide leadership to carry forward and champion the TFCA concept. The successful implementation of TFCAs requires that key sectors and relevant partners mobilize around a common vision for ecosystem management. The conservation authorities need to evolve into partnership building and outreach agencies that are effective catalysts for eco-system, community based management, as well as facilitators for sound private sector investment. Genuine devolution of rights and responsibilities to local communities is the critical factor for accelerating sustainable natural resource management. Without the involvement of other institutions the tendency is to adopt a more traditional conservation approach. Appropriate institutional mechanisms are required to: (i) coordinate government institutions, donors and NGOs who promote different perspectives, messages and implementation strategies in the TFCAs; (ii) provide incentives and pressure on the private sector for early participation in community joint venture activities; (iii) ensure transparency and participation in decision-making resulting from the predominance of government in management structures; (iv) combat the tendency towards fragmented sectoral planning and ad hoc development processes that threaten both the environmental quality, social fabric and tourism potential of the TFCAs; (v) raise awareness at the level of provincial governments of the project; and, (vi) develop capacity to effectively implement the provisions of the land law and provide a forum in which to promote stronger participation of local communities through land demarcation. The Government's approach to addressing these issues has occurred at several levels: first, the TFCA project responsibilities (together with those for protected areas) were moved from the Department of Forestry and Wildlife in the Ministry of Agriculture and Rural Development to the Ministry of Tourism. While this move resulted in some problems related to division of responsibility for the wildlife estate, on balance it was seen as a positive response to the need to take a much more inclusive approach involving a broader set of stakeholders. Second, the Government announced in September 2002 the establishment of a semi-autonomous TFCA Unit. This Unit should be able to cut across sectoral and institutional boundaries to fulfill a more comprehensive role. Thirdly, the Government has recognized the need to work more at the provincial level to create the enabling conditions for eco-system planning and management. Finally, the -3 -  Government has shown its willingness to establish new institutions such as the Elephant Coast Development Authority. 2. Objectives A. Project Development Objective Background At the end of the period of conflict in 1992, Mozambique was listed as the poorest country in the world. The state of its economy was in sharp contrast to the wealth of its natural resources and spectacular physical attractions. Mozambique is part of the Zambezian Biogeographic Region, a region unique for its high degree of biodiversity, including 22 vegetation/habitat types and large land area. The country's extensive coastline (2,700 kilometer) is considered unique in the East African Marine Region in terms of the quality, diversity and species richness of its habitats. These ecosystems support 18 species of marine mammals, mainly dolphins and whales, and Mozambique is thought to have the largest (although extremely threatened) population of dugongs along the East African coast. These natural assets are globally important from a biodiversity perspective and are valuable resources with which Mozambique can develop a sustainable tourism industry. Many of the most promising areas are contiguous with or are close to international frontiers, well-established conservation areas, and tourism routes in neighboring countries. Most of the areas falling in these categories are found in some of the poorest provinces of the country, where agricultural potential is lowest, where opportunities for other types of income generation are limited and where conservation-based tourism is one of the few potential sources of growth. Natural resource based activities - agriculture, fisheries, mining and tourism - contribute about 45 percent of GDP and 70 percent of total exports. Forestry and forestry related activities, such as the production of charcoal and timber contribute far less, but play a significant role in the local economy, and in the degradation of the natural resource base. Local populations are exceptionally dependent on the country's biodiversity to fulfil their daily survival needs. Wildlife provides a major source of protein to about 70t of the population. Woodlands and mangroves are an essential source of construction material for housing and fishing boats, and fodder for domestic animals ( particularly in times of drought). Traditional energy (largely woodfuels) still contributes more than 90 percent of Mozambique's total energy consumption. The resource base is seriously threatened by population growth, extreme poverty, poor management and utilization and lack of financial resources. Desertification affects more than half of the ten provinces, and 20-30 percent of Mozambique's population lives on fragile land. Coastal erosion is a major problem and has nearly destroyed some townships and threatens others. Mozambique has experienced a high rate of economic growth, about 10t p.a. in real terms between 1996 and 1999, during its transition to peace and a market economy. The benefits of this growth are mainly concentrated in and around Maputo and some of the other urban areas. Rural areas which account for -- W of the population continue to be affected by poverty. The key challenge that Mozambique faces is to maintain this level of growth and to distribute the benefits more evenly to the economically marginalized - 4 -  people and areas of the country. This more equitable distribution needs to be complemented by building capacity at the provincial, district and local levels to manage natural resources and participate fully in development planning processes that fully integrate environmental and social needs with the economic growth objectives. Conservation-based tourism is one of the fastest growing sectors in the industry - by some estimates at an annual rate of 20 percent, while in Africa it already occupies a very important share of the market. For example, 60 percent of South Africa's 6 million tourists representing $2.5 billion annual tourist revenues visit protected areas. All trends in international tourism point to exclusive, nature-based and sustainable coastal tourism as being the growth areas in the coming decades. Africa's market share has increased by only one percent over the past 15 years (compared to one percent growth in East Asia and the Pacific in 1999 alone). Africa's weakness in capturing the tourist market is largely related to a lack of infrastructure, capacity and strategic planning which together issues of security hinder private investment. Without a comprehensive approach Africa will be hard pressed to benefit from the estimated $2 trillion global tourist receipts in 2020, in an increasingly competitive industry. Since independence, Mozambique has not been able to capitalize on its physical beauty and natural resources, but with the advent of peace and the reintegration of South Africa into the world community, unique opportunities present themselves. In the Mozambican context, it is essential to take advantage of them before irreversible change sets in (through colonization or carving up the areas for non-compatible uses). Although there has been some considerable growth in tourism in Mozambique during the last few years 10-15 % annual increase in arrivals 1995-2001), and private sector investment has grown in the sector, the Government recognizes that the National Tourism Policy and Strategy requires revision and updating. In particular, more attention is needed to focus on sustainable tourism, with particular emphasis on conservation-based tourism and ensuring that tourism is developed with both social and environmental considerations fully integrated. The Transfrontier Conservation Areas and Tourism Development Project (TFCATDP) is a follow-up of the ongoing Transfrontier Conservation Areas Pilot and Institutional Development Project (P001759 - TFCA) due to close in June 2003. The overall objective of the original TFCA project - financed by the GEF with a grant of $5 million - is: "to assist the Government of Mozambique to create an enabling policy and institutional environment for rehabilitating, conserving and managing its unique natural and biodiversity endowments, using the (TFCA) as the central organizing principle, and will help implement community-based natural resource management". The title "Transfrontier" underscores the essential international dimension which is important for a number of reasons: first, the primary focus has been on areas contiguous with or close to existing conservation areas along international boundaries in order to take advantage of conservation opportunities linking major ecosystems; second, collaboration on a whole range of technical and social issues is needed to ensure that management of these broader areas is environmentally and socially sound, and enables capacity to be shared where capacity gaps are identified or where technical capacity is unevenly distributed; and third, tourism opportunities span political boundaries, and the southern - 5 -  Africa context is especially ripe for the "destination approaches" to tourism development on a supra-national level. For Mozambique, the presence of South Africa as a major tourism destination represents an important opportunity to attract tourists to the country. "Conservation Areas" denotes multiple use areas covering the range of activities including traditional national parks, community based management areas, private reserves for tourism, hunting concessions and so-called reserves that have limits on uses but are not exclusive (in the sense that other uses by communities are prohibited). This approach has superceded the old one that focused (almost exclusively) on the establishment of parks without involving local communities. At the same time, it is clear that this approach demands more explicit emphasis on linkages between communities and conservation, specifically as to how communities will be able to benefit from this type of development. At the time of preparation it was clear that the Project would be the first phase of a long-term effort likely to span at least 10-15 years requiring continued support over this period. The Project was designed to provide a learning experience among Government agencies, NGOs, rural communities and the private sector on both sides of international boundaries, and set the stage for much more significant investments in the future. The principal accomplishments/contributions of the pilot project include (see Annex 4 for more detail): Establishment of one of the world's largest conservation areas in the Greater Limpopo Transfrontier Park; Formulation and approval of International Agreements on TFCAs; Creation of a semi-autonomous development agency for Matutuine District (Elephant Coast Development Authority); Development of the Protocol for the Lubombo TFCA; Improved Protected Areas management on the ground in all three TFCAs - Limpopo, Chimanimani, and Lubombo: the project has provided both physical, field level support and a framework for additional support mobilized from other agencies and donors; Policy and Institutional development (in a range of areas including wildlife and forestry, private sector policy, community land demarcation and titling, capacity building); Environmental Management and Biodiversity Conservation (with new financing secured from KfW - about $6 million, and USAID - about $3 million); and strengthening national tourism policy and institutional development. Overall, the project has provided substantial support to the Government of Mozambique towards the creation of an enabling policy and institutional environment for rehabilitating, conserving and managing its unique natural and biodiversity endowments. Chimanimani TFCA This area of about 1740 km2 bordering Zimbabwe's Chimanimani National Park to the west, comprises: mountains and foothills; peneplain, plains and valleys; and rivers, with numerous aesthetically fascinating waterfalls. Six major vegetation types can be distinguished: semi-deciduous miombo woodlands; low altitude moist ever-green forests; dry montane forests; montane grassland; Sclerophyllorus afromontane scrub, which include some endemic Protea and Faurea species; and rocky vegetation (Aloe & Euphorbia spp., including some endemics such as Vellozia argentea). - 6 -  The unique environment, and outstanding habits of this TFCA support unusual species of flora and fauna because of the special combination of altitude, soils, rainfall patterns, and fires which is endemic to the area. Several activities have been completed (or are in final stages) for the creation of the Chimanimani TFCA: I Bilateral Agreement by Mozambique and Zimbabwe for the Chimanimani TFCA I Development of a Resource Management Plan and Integrated Action Plan and resource inventories I Establishment of a Core Protected Area and cultural heritage zones (Binga National Reserve). These include historical and cultural heritage sites under local community control and management, involving demarcation of five areas for local communities I Roads to key tourist attractions opened I Field presence and local management activities including: - Community guards trained and game guards' camps established - Communication radios installed - Transport for resource management operations I Ford Foundation has provided resources to support and manage these efforts and to provide some tourist infrastructure Greater Limpopo (formerly Gaza) TFCA This vast area stretches eastwards from Kruger National Park in South Africa on its western boundary, and Gona Re Zhou National Park in Zimbabwe on its NW boundary. It consists of three National Parks (totaling 20,700 km2) - the newly created Limpopo National Park (itself part of the Great Limpopo Transboundary Park), Bahnine and Zinave, and the so-called "interstitial area" representing the land in between the core protected areas. The area comprises extensive area of essentially flat Savannah bisected north/south by the Lebombo mountain range, and drained by five river systems flowing from west to east. Several vegetation communities occur, namely: Mopane woodland and shrubveld, Mixed Bushveld, Sandveld, Riverine woodland, and Edaphic grasslands. During the first phase the following ecosystem-based planning activities were accomplished or launched: I Increased field presence and park management and some relatively minor infrastructure in Zinave, Bahnine and Limpopo National Parks to (re-)establish administration and law enforcement. Activities included: - Reconnaissance surveys of the landscapes and relic wildlife and provision and training management personnel for protected areas Limited rehabilitation work on staff houses; - Provision of water supplies for protected areas' personnel - Opening of roads, and clearing some parts of protected areas' boundaries - Installation of communication radios; - Introduction of early burning policy; - Training of Game Guards and monitoring of wildlife recovery; - Provision of transport for management programs. I Formal gazetting of the Limpopo National Park in 2001 and creation of the Great Limpopo Transfrontier Park I Development of management plans for the core protected areas: USAID is -7 -  financing the development of detailed management plans for Banhine and Zinave National Parks (carried out by DAI). KfW is financing the management planning process for Limpopo National Park (formally Coutada 16), managed by Peace Parks Foundation for DNAC. These plans will form the basis for improved wildlife management in these parks; I Development of land use plan (ongoing) for the communal land ("interstitial area") occurring between protected areas and identifying options for sustainable use, I Demarcation or land for several local communities (to date about 26,000 ha) i With the advent of the KfW and USAID financed projects activities have accelerated, including the establishment of a project implementation unit for the Limpopo National Park, and related activities such as anti-poaching. The major constraints encountered under this component included the weak provincial co-ordination of the project, the successive years of floods on 1999 and 2000, vehicle/transport problems in Gaza due to poor road networks, and the lack of infrastructure in protected areas. However, the co-financing for the LNP provided under a KfW project will finance planning and infrastructure for the park and set the stage for future investment. In addition to the core protected areas, the Great Limpopo TFCA comprises the interstitial areas, representing substantial areas of land falling between the protected areas. Determining land potential within this area is necessary as a basis for ecosystem planning. A major consultancy financed under the TFCA pilot project and currently underway will: (i) develop an interstitial land use classification, and recommending limits to acceptable change in each identified land use category, against which monitoring of sustainable use and changes will be monitored; (ii) provide guidelines for sustainable land use options, and CBNRM, including income - generating activities for local communities in each land use category, including identification of tourist attractions that could be linked with tourist zones identified along the coastal areas; and, (iii) revise the institutional framework under which the entire Great Limpopo TFCA should be developed. Lubombo TFCA This area, in southern Maputo province, bordering South Africa and Swaziland has diverse habitat types, occurring within two land forms, namely the undulating, low-lying sand plain between the Lubombo Mountains in the west and the Indian Ocean in the east, consisting primarily of marine-derived aeolian sands overlying an undulating impermeable Cretaceous siltstone floor; and the predominantly rhyolite Lubombo Mountains. These incorporate a varied mosaic of ecosystems, including savannahs, grasslands, swamps, freshwater lakes, floodplains, rivers, estuaries, and coastal marine elements. Important physical features contributing to overall biodiversity include: offshore reefs, sand dunes, 20 coastal lakes on the Mozambican side of the TFCA. The Lubombo TFCA includes most of the globally recognized Maputaland Centre of Plant Endemism. A number of activities have been carried out for the Lubombo TFCA during the life of TFCA1. These include: - 8-  I Development and adoption of the Maputo Special Reserve Management plan, I Development of the Futi Corridor plan, which links Maputo Special Reserve with Tembe and Ndumo of South Africa, I Development of a proposal for ecotourism concessions. I Increased local park management and law enforcement I Land demarcation for local communities totaling about 45,000 ha The Lubombo Spatial Development Initiative (SDI) protocols under which framework the TFCA agreement was signed is not functional because the commission, secretariat, and task groups created under this protocol have not been functional. A new approach to collaboration and the formation of strategic partnerships is being tested with the formation of the Elephant Coast Development Agency, which will focus on integrated planning in the district of Matutuine and achieving the project objectives of stimulating responsible tourism and community participation and empowerment. This agency will bring together the local communities, private sector, NGOs and government in a formalised development partnership. A full analysis of institutional framework for co-ordinating the development of the Lubombo TFCA is required during the preparation of the second phase of the TFCA project. Partners and Partnerships: One of the explicit objectives of the original GEF pilot project was to encourage support from a broad array of partners, under the broad umbrella of the TFCA, in particular to raise additional resources, but also to spawn interest among new partners and to involve those NGOs, donors and others already involved in the areas concerned. Among the partners associated with the TFCA process should be included: n USAID funded project focusing on GLTFCA - "Gaza-Kruger-Gonarezhou Transboundary Natural Resources Management Initiative", implemented by Development Alternatives Inc. n KfW funding for the development and management of Limpopo National Park implemented by Peace Parks Foundation n FAO support to the Mahel Game Ranching Initiative n Helvetas community support in the Lubombo TFCA n Ford Foundation community support in the Chimanimani TFCA n IUCN community support in the Lubombo TFCA n Swaziland-South Africa Biodiversity and Tourism Corridors Initiative (GEF/WB and SA Government) n African Wildlife Foundation initiatives in south east lowveld in Zimbabwe (GLTFCA) n Endangered Wildlife Trust implementing CBNRM in the GLTFCA - the Bindzo project in Zinave National Park. n WWF ecoregional program in southern Tanzania and Lake Malawi/Niassa n GEF/WB Lake Malawi/Niassa Ecosystem Management n UNDP/GTZ support to conservation corridor linking Selous and Niassa n UNDP/Maurice Strong support to the Elephant Coast Development Agency for integrated planning in the Lubombo TFCA n SIDA support to private sector in Niassa n DBSA/World Bank support to Spatial Development Initiatives However, a great deal remains to be done both in terms of international collaboration, policy and institutional development, capacity building, creation of an enabling environment for private sector investment, biodiversity conservation, infrastructure, and environmental management. All these elements require a long term vision and intensive focus on -9-  institutional development. 1. Project development objective: (see Annex 1) TFCATDP overall Development Objective is: to improve the management of Mozambique's natural resources assets in a manner conducive to private sector tourism and development to obtain sustainable livelihood and economic development benefits. The Mozambique Transfrontier Conservation Areas and Tourism Development Project (TFCATDP) builds on the experience of the first GEF-funded TFCA Pilot and Institutional Strengthening Project aimed at assisting Mozambique to take advantage of unique opportunities in biodiversity conservation, as a basis for tourism and rural development. The project will institutionalize a fully participatory, multi-sectoral planning and implementation process for transfrontier conservation areas (TFCAs) and integrate environmental and social values with economic development. The project will reinforce enabling conditions for community-oriented, private sector investment in environmentally and socially sustainable tourism. The overall goal of the planning processes will be to: influence current and proposed development plans - both public and private - towards more environmentally and socially sustainable tourism development patterns; actively promote investments which maximize opportunities for sustainable development in the TFCAs; promote enabling conditions for the protection of community rights in the areas concerned. The project represents the second phase of a multi-phase effort spread over at least 15-20 years. While the first phase set the groundwork in a number of areas, the achievements are still at an early stage, and will require intensive and continued support if Mozambique is to realize its potential. 3. Rationale for Bank's Involvement Under the first TFCA Pilot and Institutional Strengthening Project, the GEF/World Bank resources and influence have been instrumental in sparking the TFCA process in Mozambique and in the region. The World Bank and the Global Environment Facility remain placed to continue to bring value added to the TFCA process in several areas: n The recent request by the Government of Mozambique to the Bank for support to the formulation of a long term, programmatic and integrated approach to sustainable tourism and biodiversity conservation, recognizes both the Bank's comparative advantage in facilitating sector-wide programs in Mozambique and its technical expertise available in the field. n The Bank provides added value through its experience in policy and institutional reform, as well as the technical experience gained not only during the preparation and implementation processes of TFCA1 and other transboundary and ecosystem resource management activities in the region, but in its global experience in the design of and implementation of biodiversity, coastal zone management and sustainable development projects. n The Bank and the GEF will play an important facilitating and complementary role in developing and coordinating the broader program that is expected to be multi-donor financed. This process has already started - 10 -  under TFCA1, as the project has helped to leverage about $10 million in complementary donor funding. n The program is highly relevant to the work of the Bank as it is designed to contribute to poverty reduction efforts by facilitating and safeguarding the rights of rural communities to natural resource through land demarcation and policy reform for use as equity in joint ventures thereby contributing directly to rural welfare. The program also aims to stimulate economic growth by providing private sector investors with a sound framework for investment in conservation-based tourism; tourism is also one of the most labor-intensive industries and solid tourism growth will generate employment for skilled and unskilled Mozambicans; n As a GEF implementing agency the Bank brings incremental grant resources from the GEF to continue to assist Mozambique and the region in advancing the TFCA initiatives, and addressing issues of global environmental concern. These issues include ecosystem protection and management, species protection, and the enhanced management and protection of important transboundary water catchments. Baseline and GEF Alternative (see Annex 4) Baseline Under the first TFCA Pilot and Institutional Strengthening Project, the GEF/World Bank resources and influence have been instrumental in sparking the TFCA process in Mozambique and in the region. The World Bank and the Global Environment Facility remain well placed to continue to bring value added to the TFCA process. This applies to financing, coordination and policy/institutional strengthening. Mozambique was and remains among the poorest of the poor countries despite relatively rapid growth in the post-conflict years, and that funding would remain limited. One of the key objectives of the project was to leverage additional resources and the addition of both USAID and KfW resources (totaling $8-10 million) has helped foster this objective. The continuing interest generated by the TFCA process can be expected to stimulate additional co-financing for the Mozambique program. The baseline consists of modest increases in financing over the expected life of the program, provided that the institutional and policy environment remains conducive. GEF Alternative The Government of Mozambique has mobilized its own resources as well as international donors' support to initiate the Transfrontier Conservation Area initiative. The establishment of these transfrontier conservation areas has been regarded as a milestone achievement and based on the preliminary success of TFCA1 and broad-based participation, ownership and interest of stakeholders, the Government has decided to step up this effort. In particular to (i) move from planning to implementation in some areas (Lubombo, Limpopo and Chimanimani), (ii) strengthen support for TFCAs in key areas of global biodiversity significance where there has been very low levels of input (Niasa and ZIMOZA), (iii) establish a long term framework, both policy and financial, that will contribute to sustain conservation efforts in TFCAs, (iv) to develop comprehensive M & E systems. This initiative constitutes a quantum leap in activity in Mozambique and will require sustained and substantial external funding for the medium term for infrastructure, ecosystem management, and institutional needs. Domestic resource mobilization, relative to needs will remain modest. Conservation tourism cannot be expected to generate more than quite modest resources in the medium term, and any growth will depend on initial investment to improve the quality of the product in - 11 -  Mozambique. These additional efforts, meant to respond to needs identified in the National Biodiversity Strategy and to step up biodiversity conservation and integrated ecosystem management, is now going beyond the technical and financial capacity of the Government and its partners in the donor community. The need to provide this additional effort is motivating this request for GEF support. GEF incremental funding will complement bilateral and multilateral donor support and is intended to leverage a multi-donor programmatic and phased approach to support the conservation area network in Mozambique. The GEF alternative, therefore consists of three parts: i Institutional and Policy- experience from the first phase demonstrates that an evolving enabling institutional environment is required not only to raise resources but to provide a dynamic context to tackle the complex issues as they emerge during implementation (e.g. community rights within protected areas, concessions and tendering processes, resolution of conflicts between users). The GEF has made and is expected to continue to make a critical contribution in this process of institutional evolution and consolidation. The GEF has provided a set of external references in this process. The World Bank provides added value through its experience in policy reform, as well as the technical experience gained during the preparation and implementation processes of TFCA1 and other transboundary and ecosystem resource management activities in the region, as well as in its global experience in the design of and implementation of biodiversity, coastal zone management and sustainable development projects. I Leadership - closely associated with the institutional aspects, the GEF/World Bank has been looked towards for leadership in the TFCA process. This role is becoming increasingly important as the complexity of the issues and as the number of players increase in tandem. The idea of a multi-donor secretariat is highly relevant to the current situation, and the GEF/World Bank experience in this kind of process is extremely valuable. I Financial - As stated above, external sources of funding remain essential, but the TFCAs will have to compete with other uses despite the emphasis of the program on sustainable livelihoods and the contribution that TFCAs are likely to make to poverty reduction. Current levels of financing are also no real indicator of future levels, but the ability of the GEF to leverage other resources has been noted, and can be expected to continue. Without further core GEF financing, it is unlikely that the level of bilateral resources focused on supporting the common vision of the TFCA will be sustained. Conversely, it is expected that GEF resources will leverage an increased level of co-financing from the current 1:2. This should rise to 1:4 over the next few years. 4. Description The project builds on lessons learned from the first phase of the TFCA program (see Section D3). Dealing with the multiple challenges requires making an intensive and long term commitment. In conservation terms, timescales should be calibrated in decades rather than years. Building on the accomplishments of the pilot project (TFCA1), the next five years will: n Consolidate the gains made so far in terms of international agreements, leading to the formal adoption of international treaties for Limpopo, Lubombo, and Chimanimani, and the development of new ones for Niassa and - 12 -  ZIMOZA. Formal agreement or signature is really the first step in the process; n Shift the focus towards Provincial level planning and implementation through new institutional structures such as the Elephant Coast Development Agency, strengthened Provincial TFCA/tourism units, and the application of new planning instruments such as Strategic Environmental Assessments; n Turn the TFCA planning exercises already completed or underway in Limpopo, Lubombo and Chimanimani into implementable investment and management programs, involving infrastructure, field level conservation, community demarcation programs, zoning and other activities; n Implement the policy changes for the private sector and communities through a scaled up program of land demarcation and titling for communities in the TFCAs and through an open tendering process for tourism concessions, and development of community/private sector joint ventures; n Extend the TFCA concept and planning exercises to the Niassa and ZIMOZA areas; n Develop and implement a sustainable Tourism Development Framework n Establish a long term monitoring and evaluation framework To accomplish the above, the project will consist of five complementary components as follows: 1. Institutional and Policy Development and Sustainable Tourism Framework (US$7.0 - 17.5t of Project Cost) This component will build on the experience of the pilot project, namely to ensure that the policy and institutional environment evolves as the TFCA process is implemented. Focus will be on capacity building at all levels through: n Strengthening of TFCA Unit; n Establishment of regional TFCA ecosystem planning agencies/authorities; n Preparation of integrated strategies for conservation and tourism (national , provincial, district, sub-regional); n Capacity strengthening of Ministry of Tourism at National and Provincial levels (Provincial Tourism Facilitation Commissions established); n Policy and legal review of wildlife, forestry and land management and other relevant policies n Promotion and implementation of private sector tendering, concessions for tourism development and a framework for community-private sector joint ventures; n Implementation of strategic environmental assessments and strengthening capacity for environmental assessments; The design and implementation of a Sustainable Tourism Framework will focus on reinforcing and facilitating the role of communities as investors in sustainable tourism development. The process will involve institutional and stakeholder analysis including local communities, NGOs, private sector and government at different levels. The STF will focus on the creation of local level tourism planning processes, on which provincial, national and regional plans will be based. Local communities and authorities will play a leading role in defining the tourism and conservation assets of the TFCAs, and how these assets will be conserved or sustainably managed. This component reflects the emphasis that the Government in placing on sustainable tourism through the creation of the - 13 -  National Directorate for Conservation Areas (DNAC) in the Ministry of Tourism and the approach adopted by the newly-created Tourism Facilitation Commission and Ministry's efforts to decentralize decision-making to the Provincial authorities. 2. Ecosystem Planning and Management (US$10 - 259 of Project Cost) This component will provide resources to initiate or strengthen conservation area management in the TFCAs based on land-use and development plans, integrating biodiversity conservation and ecosystem management. Activities will be tailored according to the state of preparedness and the level of planning that has already been accomplished (see Annex 2 for more detailed treatment of TFCAs). The project will carry forward activities in the three original TFCAs of Lubombo, Greater Limpopo and Chimanimani, and will start work on the new ones of ZIMOZA and Niassa/Cabo Delgado. The project will provide logistical and other support for eco-system management, including direct management of core protected areas, based on a process which will: (i) determine and map all existing land uses, the distribution of communities, analysis of trends and livelihoods in the TFCAs, mapping of private sector and GoM interventions, and the issues that threaten sustainable biodiversity conservation, and propose remedial measures; (ii) create a collaborative framework with comprehensive stakeholder identification, review of existing collaborating mechanisms relating to TFCA development, identification of shortfalls and recommendations for addressing these (iii) identify, map, and prioritise key biota using various criteria including: national, regional, and international importance, contiguity, fragmentation, and degree of current and future threats; (iv) identify/zone and map biodiversity hotspots, and zone areas of potential tourism development, including recommended levels of infra- and supra-structures development, and indicate national and regional linkages that would promote sustainable marketing of the identified tourism attractions; (v) develop a GIS decision-making framework with which to monitor management and sustainable use of terrestrial resources and aquatic resources of the numerous rivers in the area. 3. Community Empowerment and Private Sector Partnership (US$5.0 - 12.5t of Project Cost) This component will focus on providing communities the tools and assets to participate as full partners in the TFCA process. It will build on the process of the land use planning, leading to community land demarcation. Based on information from the land use/ecosystem planning, participatory management plans will be formulated and appropriate livelihood activities will be defined for these areas. The component would aim to solidify community rights in these areas through the creation of trusts, concessions or other equity structures, and would help create incentives for the private sector and communities to develop joint ventures based on the management plans, including access to concessionary loans or small grants. The component would facilitate the training of local communities to negotiate joint ventures, form representative associations, provide added value services and develop SMEs (not necessarily joint ventures). Other elements include: capacity building of local and provincial governments particularly to ensure that government serves to protect the interests of the communities; improving the policy environment to support - 14 -  the development of the community component; identifying and supporting NGOs to help facilitate the program. Underpinning this component will be a monitoring and evaluation sub-component, developed with the participation of the local communities and participating private sector to deliver appropriate feedback and resources to provide continual reinforcement to the program. 4. Infrastructure (US$15.0 - 37.5% of Project Cost) This component will consist of basic infrastructure (e.g. roads, park facilities) for the core priority terrestrial and marine protected areas in the TFCAs, and basic infrastructure requirements linking community and private sector initiatives to TFCA cross-border infrastructure investments. Designing infrastructure requirements will be done in the context of multi-sectoral planning such that public investment priorities are aligned with those of TFCAs where possible to ensure complementarity and prevent duplication or conflict (e.g. in road alignment or design). This component will provide ongoing technical support for tourism infrastructure planning in the TFCAs. 5. Research, Monitoring and Evaluation (US$3.0 - 7.5% of Project Cost) Monitoring and Evaluation will be a fully integrated process, done on a regular basis, involving ecological, social and policy monitoring. A dedicated monitoring plan with verifiable indicators will be established during the preparation phase as part of this component. Consultants will be contracted to support the monitoring process and evaluate and consolidate monitoring data into semi-annual monitoring reports. These reports will then form the basis of the semi-annual review meetings. In addition, the consultants will conduct independent mid-term and end-term beneficiary assessments within the TFCAs. These will serve as the basis for mid-term and completion reviews. Institutional and Policy Development and Sustainable Tourism Framework Ecosystem Planning and Management Community Empowerment and Private Sector Partnership Infrastructure Research, Monitoring and Evaluation 5. Financing Total ( US$m) BORROWER $0.00 IBRD IDA $20.00 BILATERAL AGENCIES (UNIDENTIFIED) $10.00 GLOBAL ENVIRONMENT FACILITY $10.00 Total Project Cost $40.00 6. Implementation Overall coordination and management of the project will be the responsibility of the TFCA Unit, currently located in the Ministry of Tourism. The TFCA Unit will be comprised of a multi-sector unit along the lines established by the Spatial Development Initiatives Unit within the Ministry of Transport and Communications, or by the Coastal and Marine Biodiversity Management Project (CMBMP) established by MICOA. The unit - 15 -  will be headed by a project manager who will be supported by a full time consultant acting as Chief Technical Advisor, a finance and procurement administrator and an administrative secretary. The project will support decentralization efforts for each Province involved in the project. Regional TFCA coordinators will be appointed, supported by Technical Advisors where deemed necessary. The TFCA Unit and the various technical teams working on the project components will be supported by internationally and regionally contracted technical assistance where considered necessary. This is likely to be in the areas of planning, social participation, private and local community development, conservation planning and ecosystem management, and project management. The Unit will be responsible for gathering and disseminating project information, promoting the Project among stakeholders, and progress reports. It will also operate the Special Accounts and carry out procurement activities. Other agencies involved will include: Involved agencies will be the Directorate of Forestry and Wildlife (DNFFB) in the Ministry of Agriculture and Rural Development (MADER), the Ministry of Finance and Planning (MFP), the Directorate of Environmental Management in the Ministry for the Coordination of Environmental Affairs (MICOA), the National Agency for Roads (ANE), the Spatial Development Initiatives Unit in the Ministry of Transport and Public Works. Provincial Coordination Committees will be established, and most likely acting as provincial level Tourism Facilitation Committees, reporting back both the project management team and the national Tourism Facilitation Committee. These provincial level coordination units will consist of representatives from technical line ministries, district governments and other local leaders. Provincial Governors are likely to play an active role overseeing the functions of these committees. Integration between provincially based Spatial Development Initiatives and TFCA coordination committees should be fully encouraged. A process of formally involving civil society in the project coordination will also be considered. Funding Arrangements The TFCA Unit within the Ministry of Tourism will be responsible for project management. Fund management arrangements will be established for components identified during project preparation for implementation by agencies from other sectors (e.g. the National Roads Agency for tourism road infrastructure). Several options will be explored, ranging from full devolution of expenditure to the agency concerned to a system whereby funds are channeled from the TFCA Unit/Ministry of Tourism based on agreed work plans and budgets. Monitoring and Evaluation will be a fully integrated process in Component 3 "Ecosystem based planning and management", and be done on a regular basis, as an integrated exercise with ecological, social and policy monitoring. A dedicated monitoring plan will be established during the preparation phase as part of this component. Consultants will be contracted to support the monitoring process and evaluate and consolidate monitoring data into semi-annual monitoring reports. These reports will then form the basis of the semi-annual review meetings. In addition, the consultants will conduct independent mid-term and end-term beneficiary assessments within the TFCAs. These will serve as the basis for mid-term and completion reviews. 7. Sustainability - 16 -  The Project has been designed as a long-term (10-15 year) program to create, institutionalize and sustain Transfrontier Conservation Areas in Mozambique, in partnership with Mozambique's neighbors. The long-term approach recognizes that achieving sustainability is difficult and complex, and that support must be maintained over a lengthy period. Sustainability at the ecological, financial and technical levels can only be accomplished by ensuring that the overall institutional framework continues to evolve. This will require: n full engagement of stakeholders, from the level of local communities to political decision-makers in Government, and; n an attractive and secure environment for the private sector to invest and to enter into partnerships with local communities in the TFCAs Both of these elements will require continued institutional and capacity strengthening building on the foundations of the first phase of the project. TFCA1 has succeeded in getting solid government commitment to the formation of TFCAs both at the national and regional level. This commitment has been solidified in international agreements and protocols. The signing of these agreements has had the additional benefit of raising the profile of the TFCAs internationally, further strengthening interest in the process. However, the government institutions at the national and provincial levels responsible for driving the process remain weak and overstretched, and will require long term support if they are to maintain the momentum generated to date. Developing a sustainable multi-sectoral approach to tackling the issues will require innovation such as the creation of "development authorities" like the Elephant Coast Development Authority, the SDIs and the Transport Corridor authorities, which in turn will require continued support if they are to succeed. Long term support from donors, foundations and development agencies will be required to underpin these efforts. The second pillar of sustainability will be attracting the interest of the private sector to complement public finance. TFCA2 will give major emphasis to creating the enabling environment for private sector investment coupled with local community empowerment and increased capacity of government to meet its statutory obligations. However, a high level of private sector investment is not a guarantee of sustainability, and the project will focus on attracting the right quality of investment, and establishing an effective regulatory framework and implementing capacity. This approach is needed to ensure that investments are well-planned and implemented to fit into an overall management plan for the TFCAs to ensure that the type and level of investment activity is appropriate for environmental sustainability. 8. Lessons learned from past operations in the country/sector There is a rich field of experience, arising from the first phase of the TFCA project and from the region. In particular, there has been a research emphasis on community natural resource and wildlife management, sustainable tourism, and transboundary regional development mechanisms. The lessons arising from these sources have been incorporated into the project design. Specifically, TFCA2 project design will be based on lessons learned from: n The preparation and implementation of TFCA Pilot and Institutional - 17 -  Strengthening Project n The preparation and implementation of the Coastal and Marine Biodiversity Management Project n Extensive studies undertaken on Transboundary Natural Resource Management by the USAID financed/WWF implemented Biodiversity Support Program (BSP) n Extensive experience documented and analyzed on local community natural resource management initiatives in Mozambique and the region n Literature relating to the formation and development of other regional initiatives, such as the Maputo Corridor and other Spatial Development Initiatives, AWF's Four Corners Transboundary Natural Resource Management Area (TBNRMA) and USAID financed GKG Transboundary Natural Resource Management Initiative n World Development Report 2002/3 which emphasizes the essential importance of long term institutional development. Based on the lessons learned from the above, the following key needs for successful project design and implementation have been identified: Institutional and Political The degree of institutional development and coordination needed to drive the TFCA process is generally grossly underestimated. International agreements and protocols are difficult to implement. Although Mozambique is ripe for innovative institutional structures such as the TFCA Unit and the Elephant Coast Development Agency, creation of new institutional structures is an extremely time-consuming process requiring a great deal of patience, focus and commitment from stakeholders. Ecosystem management must be done in a multi-sector planning framework and TFCA development must be fully integrated into planning processes at the regional (e.g. SDIs where they are performing well), provincial and district level. Government commitment to the process is needed at all levels, from the highest political level dealing with international agreements to the district and local authorities. Careful attention is needed to ensure that political commitment does not result in "politicization" of the TFCA process. Considerable negative publicity has resulted from fast-tracking of certain activities without the full participation of local communities. Capacity development is a continuous long term process and must be done at all levels. Policy and Legal Framework The legal and policy framework is evolving and presents good opportunities for strengthening community rights, applying sound environmental management principles and establishing transparency. However, the application of these policies and regulations has major shortcomings, in terms both of capacity and commitment. Ongoing decentralization processes and devolution of rights and responsibilities to local communities is revealing the tensions in Mozambique where land and natural resource policy mixes a powerful role of the State (i.e. all land is owned by the State) with the need to strengthen civilian/community rights. Devolution of rights policy is being more driven by informal 'pilot' and ad hoc approaches than through central level processes, and in fact there are pressures to move in the opposite direction, where powerful interests are involved. - 18 -  Social, Community and Participation Factors Participation processes require more than ordinary care. The high political profile and complexity of TFCAs makes them especially vulnerable to the perception that participation and consultation processes are inadequate. Involving local communities is highly complex and critically important, but has been and continues to be, severely underestimated. Local communities will not support the establishment of transfrontier parks and conservation areas without guarantees of rights and full participation in planning and investment processes. For example, the failure to fully involve local communities in the management planning process for the Limpopo National Park has had serious repercussions and could ultimately threaten the viability of the park. The level of community cohesion which has a direct bearing on decision-making and management capacity varies widely in the TFCAs, and no blue print approach can be applied across the board. Community based wildlife management is most advanced where there is an abundance of wildlife and communities have a long tradition of de facto management of wildlife resources. This rarely occurs in Mozambique, so wildlife management skills will need to develop over a long time frame. NGO participation is welcomed and NGOs are active and constructive in some project areas. However, the process of devolving benefits to local communities must be drastically streamlined to avoid the perception that NGOs benefit from project resources at the expense of communities. Donor support for TFCA is essential but carries risks. Donors must agree on the concepts and principles underpinning the TFCA process and ensure that donor activities are complementary and mutually reinforcing. Maintaining donor cohesion is a continuous process requiring constant attention Private Sector Involving the private sector has proven to be far more complicated than anticipated in this type of regional project. Much more focus needs to be given on creating an adequately secure and enabling environment for high quality private sector investment. Present trends for private sector investment in TFCAs reflect lack of transparency common to other sectors in Mozambique. Attracting private sector that is committed to working with local communities requires participation and personal interest rather than merely financial commitment from the private sector. Project Management Monitoring and Evaluation needs to be institutionalized into the project management structure. Consultants should be contracted over a period of years near the beginning of the project with a specific work plan and reporting schedule. Payments for these and other short term consulting services should be given on delivery of agreed upon outputs. 9. Environment Aspects (including any public consultation) Issues The TFCA and Sustainable Tourism Development Project is a major conservation project which is focused on sustainable use of Mozambique's immense natural habitat estate. Its primary objective is that of institutionalizing ecosystem management, and mainstreaming it into - 19 -  development planning processes. As such it is expected to have significant environmental benefits relative to a no-project situation. The project also has the objective of promoting environmentally sustainable tourism and other sustainable land uses such as game farming. The project will aim to foster the development of environmental management and spatial development plans that will underpin the development of the TFCAs. The project will therefore operate in the context of a highly dynamic socio-economic and political landscape. The Government of Mozambique is keen to promote private sector investment and is also responsible for a sizable public sector investment program, so the project will require adaptable experiential learning processes rather than blueprints. There are two levels at which the TFCA process will operate by: influencing current and proposed investment plans - both public and private - towards more environmentally and socially sustainable patterns. This could mean realignment or repositioning of infrastructure investments undertaken by the Government or the private sector; actively promoting investments which maximize opportunities for sustainable development in the TFCAs. This could mean supporting the development of infrastructure which is essential for ecological management or for sustainable tourism development. These investments will not be fully defined during the course of project preparation, except in those areas where planning is sufficiently advanced (for example under TFCA1) Dealing with these challenges will require a two-pronged approach: Strategic Environmental Assessments (SEA) would be carried out for the proposed TFCAs as part of the spatial planning process. SEAs are considered more appropriate for the large areas where boundaries remain undefined and where a number of different development activities will be taking place. The SEAs will support a zoning process and help identify priority sites for private sector investment. The SEA processes will identify mitigation activities most likely in respect of the development of tourism nodes, unregulated access to natural resources, zoning and other factors. Within the broadly designed zones and priorities set by the SEAs, specific public and private investments will emerge requiring project specific environmental assessments. The key stakeholders for the project are communities, the private sector, government at all levels (district, provincial and national), neighboring countries (for international agreements, shared infrastructure, joint tourism planning), NGOs and other donors. 10. Contact Point: Task Manager - 20 -  Robert A. Clement-Jones The World Bank 1818 H Street, NW Washington D.C. 20433 Telephone: 202 458 9791 11. For information on other project related documents contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-5454 Fax: (202) 522-1500 Web: http:// www.worldbank.org/infoshop Note: This is information on an evolving project. Certain components may not be necessarily included in the final project. This PID was processed by the InfoShop during the week ending March 14, 2003. - 21 -