Egypt - Red Sea Coastal and Marine Resource Management Project

a S Egypt Red Sea Coastal & Marine Resource Management Project Document November 1992 THE WORLD BANK  GEF Documentation The Global Environment Facility (GEF) assists developing countries to protect the global environment in four areas: global warming, pollution of international waters. destruction of biodiversity, and depletion of the ozone layer. The GEF is jointly implemented bythe United Nations Development Prograrmme. the United Nations Environment Programme. and the World Bank. GEF Working Papers - identified by the burgundy-band on their covers - provide general information on the Facility's work and more specific information on methodological approaches, scientific and technical issues. and policy ancd strategic matters. GEF Project Documents - identified by a green band - provide extended project- specific information. The implementing agency responsible for each project is identified by its logo on the cover of the docmnient. Reports by the Chairman - identified by a blue band - are prepared by the Office of the GEF Administrator in collaboration with the three GEF imrplementing agencies for the biannual Participants' Meetings. The GEF Administrator 1818 H Street, NW Washington. DC 20433 USA Telephone: (202) 473-1053 Fax: (202) 477-0551  DoCiemt of The World Bank FOR OMaCL USE ONLY Rqort No. 11131-EGT GLOBAL ENVIRONMENT FACILITY NI(ORANDUM AND REC AlON OF THE DIRECTOR MIDDLE EAST AND NORTH AFRICA COUNTRY DEPARTMENT II OF TH INTERNATIONAL BEAN FOR RECONSTRUCTION AND DEVELOPIT TO THE REGIONAL VICE PRESIDENT ON A PROPOSED GRNT TM THE GUOBAL ENVIRONIT TRUST FUND IN THE ADMINT EQUIVALENT TO SDR 3.4 MILLION TO THE ARA REPUBLIC OF EGYPT FOR A NTIUI RD SEA COASTAL AND MARINE RESOURCE NANAfEENT PROJECT NOVDEBER 20, 1992 lufrautructure Operations Division Coutry Departmnt II Middle ast. and North Africa Region  CURRENCY EOUIVALENTS (As of July 1, 1992) Currency Unit - Egyptian Pound (LE) = 100 Piasters = 1000 Milliemes LE 1.0 = US$0.3 US$1.0 = LE 3.33 WEIGHTS AND MEASURES The metric system is used throughout this report. GLOSSARY OF ABBREVIATIONS CZM - Coastal Zone Management EEAA - Egyptian Environmental Affairs Agency EAP - Environmental Action Plan ZEZ - Exclusive Economic Zone ZGPC - Egyptian General Petroleum Company ZIA - Environmental Impact Assessment GEF - Global Environment Facility GET - Global Environment Trust Fund GIS - Geographical Information Systems aoz - Government of Egypt IOC(F) - Institute of Oceanography and Fisheries IUCN - World Conservation Union MAB - Man and Biosphere MARPOL - International Convention for the Prevention of Pollution from Ships NOT - Ministry of Tourism NGO - Non-Government Organization ON - Operations Manager PC - Project Coordinator PMG - Project Management Group RMG - Regional Management Group SAC - Scientific Advisory Committee TDA - Tourism Development Authority UNDP - United Nations Development Program UNEP - United Nations Environment Program FISCAL YEAR July 1 - June 30  ARAB REPUBLIC OF EGYPT EGYPTIAN RED SEA COASTAL AND MARINE RESOURCE MANAGEMENT PROJECT GRANT AND PROJECT SUMMARY ReciDient: Arab Republic of Egypt Beneficiaries: Tourism Development Authority, Egyptian Environmental Affairs Agency, and the Red Sea Governorate Amount: SDR3.4 million (US$4.75 million equivalent) Terms: Grant Onlendina Terms: Not applicable Financino Plan: GET Grant - $4.75 million (foreign exchange) Government - SO.98 million (local currency) Total - S5.73 million Economic Rate of Return: Not applicable Maw IBRD No. 24065R  I  EGYPT READ SEA COASTAL & MARINE RESOURCE MANAGEMENT Backaround 1. The Red Sea is a body of water like no other, in that it is a semi- enclosed sea communicating only with the Mediterranean Sea through the man-made Suez canal and with the Indian Ocean through the Bab el Mandab strait, making it the most saline body of water in direct connection with the world's oceans. This unusual physiography has created a marine environment that supports flourishing coral reefs and endemic wetland communities in latitudes far north of their limits elsewhere. Ironically, the very same features that make the Red Sea so valuable ecologically and economically are leading to its demise from the demands of oil exploration, shipping and tourism. The resulting loss of biodiversity and marine pollution is not only affecting the quality of the Red Sea itself, but also the well-being of the seven nations that claim shores on the Red Sea. 2. Like the other Red Sea nations, Egypt is in a state of rapid economic development and population growth that is placing intense pressures on its limited natural resource base. This situation is coupled with a number of socio-economic, institutional and ecological realities that provide both constraints and opportunities for the short- and long-term exploitation of resources. There is increasing pressure to shift population centers from the fertile Nile Valley to the coastal areas due to anticipated opportunities for infrastructure development and income associated with leisure tourism and oil development. The Ministries of both Tourism and Petroleum recognize the need for sustainable development, as well as the interdependence of these two industries. For example, impacts from chronic and accidental oil spills can destroy the tourism industry. 3. All parties who depend on the productivity of the Red Sea realize that the fragile coral reef and marine environments of this globally unique coast cannot withstand continued unregulated, unmanaged development. Environmental units and regulations are being developed in various government agencies, and private sector developers increasingly realize the negative impact of unplanned development on coastal areas. However, there is still severely limited institutional capacity, at both national and regional levels, to handle the complexity of competing interests for this resource-rich sea. The global significance of the entire Red Sea region, from ecological, oceanographic, political, economic and cultural perspectives, requires that a combination of cooperative and complementary regional and site- specific approaches to biodiversity protection and marine pollution reduction in the Red Sea be urgently undertaken. 4. In recognizing the need for ecologically sustainable development of these resources by all of the Red Sea nations, the Government of Egypt (GOE) has requested funds from the Global Environment Facility (GEF) to develop a coastal zone management (CZM) program that would focus on the management of the competing tourism and oil interests in a way that would be productive for both the concerned agencies, the Egyptian people and the other littoral states. Concurrent with the request for the World Bank's GEF project, there are ongoing projects that will have reciprocally supportive impact for promoting the sustainable use of the Red Sea resources throughout the region. The Egypt GEF project is associated with the World Bank Private Sector Tourism Infrastructure and Environmental Management Project (loan of US$130 million). Along with other donors, the World Bank is also assisting in the  implementation of an environmental action plan through the EEAA. The Government of Yemen is developing a GEF project to address oil pollution issues on the Yemen Red Sea coast. The United Nations Development Program (UNDP), the United Nations Environmental Program (UNEP) and the World Bank are collectively developing a Red Sea Regional Framework Plan to coordinate and revitalize regional activities through the implementation of the Egypt and the Yemen GEF projects. 5. Proiect Obiectives. To meet the overall goals of biodiversity protection and pollution prevention in the Red Sea, the objectives of the project are to: (i) develop and implement policies, plans and regulations that ensure that development is consistent with sound environmental management to protect the shared marine resources of the Red sea coastal zone; (ii) strengthen the capacity of government institutions to carry out integrated multi-sectoral coastal zone management activities; (iii) develop and implement public-private partnerships to assure that economic development is consistent with sustainable environmental management and common marine resources; (iv) develop and implement practical solutions for the establishment, management and recurrent funding of marine protected areas and marine recreation resources; and (v) develop a data base and inventory of the coastal and marine ecosystems and resource uses that would be available to governments, universities and private sector interests for the purpose of expanding the knowledge base of the Red Sea. 6. Proiect Description. The project would develop and implement an integrated CZM program in the Egyptian portion of the Red Sea between Ras Shukeir in the north and the Sudanese border in the south. The program would have the following components: (i) the development of a CZM plan; (ii) the development of the environmental assessment capability of the TDA and the EEAA to evaluate, regulate and monitor the impacts of coastal development, including tourism and oil and gas exploration; (iii) the development of the capacity to monitor and enforce marine pollution control rules and regulations developed under the CZM plan among TDA, EEAA, and Red Sea Governorate staff; (iv) the management of recreational activities to protect the valuable and fragile coral reef habitats and promote training, public awareness and sustainable visitor use and enjoyment; (v) the establishment of marine protected areas, the preparation of operational plans for the management of these areas and the training of necessary staff; and (vi) the reviewing, monitoring and evaluation of the CZM project to ensure that biodiversity and pollution prevention goals are being achieved and that the project is sustainable. 7. Proiect Cost and Financina. The total cost of the project is estimated at US$5.73 million, of which about US$4.75 million would be in foreign exchange. The entire foreign exchange cost would be covered by the GET grant. The local currency costs of US$0.98 million would be mostly for personnel, office accommodations, and the operation and maintenance of equipment and vehicles. These would be covered by TDA, EEAA and the Red Sea Governorate. 8. Proiect Imolementation. The project would be managed from a project office within TDA in Cairo and an office to be established in Hurghada during the first year of project implementation. A Project Coordinator (PC), located in the Cairo office, would have the overall responsibility for the project. An Operational Manager (OM) would be responsible for the Hurghada office and would coordinate the pollution control, protected areas, and recreation management aspects of the project. A Project Management Group (PMG) would be established consisting of the  heads of TDA and EEAA, and the Red Sea Governor (or their representatives). The PC and the OM would also be members of the PMG and the group could invite representatives of other concerned agencies. The PMG would meet at least once every three months. Project activities would be supported by a CZM Technical Advisory Committee consisting of 6-7 distinguished national scientists with knowledge of coastal and marine ecology, the use and protection of coastal resources, including environmental monitoring and control. This committee would meet once every three months, or more frequently if necessary. A core project team would be formed among the staff of TDA, EEAA, Red Sea Governorate and other concerned agencies to work either in the Cairo or the Hurghada office. This team would consist of the Chief Planner, Chief Scientist, Data-base Manager, Financial Manager, Public Relations and Education Manager, Training Officer, Chief Pollution Control Officer, Protected Areas Manager and Recreation Areas Manager. The core project team would be supported by technical and operational staff, drawn from TDA, EEAA and other agencies, to carry out project components. Each project component and subcomponent would be led by a member of the core project team. The team would also be supported by a number of international advisors who would be available on an intermittent basis throughout the life of the project. 9. Proiect Sustainability. The livelihood of all coastal people sharing the common resources of the Red Sea, and ultimately the long-term viability of the tourist industry itself, depends upon maintaining biological diversity and implementing an integrated conservation program. The protection of the Red Sea coral and marine habitats requires the creation of institutions with a clear mandate; personnel who have the appropriate skills; implementing agencies with equipment and space; and adequate financial resources for maintaining activities after they have been initiated. The proposed project has been designed to address these issues and, particularly, the rational allocation of coastal resources through a CZM plan; the establishment of an ongoing data base; and the establishment of protected areas and multiple-use policies with realistic and workable regulations and procedures for their enforcement. The project emphasizes the need to develop recurrent cost mechanisms through protected areas, pollution controls, nature-based tourism activities and staff training that will, together, ensure that the actions developed in the project can be sustained. 10. Rationale for GEF Funding. Global Environment Benefit: The marine biodiversity values of the Red Sea are high and include the coral reefs, endemic island wildlife and a diverse marine environment. The protection of the Egyptian Red Sea is not just a matter for Egypt alone. This project would make a significant contribution to the protection of biodiversity, which is at risk as a result of international resource exploitation. The sustainable development of the agricultural, tourist and industrial potentials of undeveloped areas in Egypt and other Red Sea nations presents a plausible mechanism for overcoming the economic difficulties facing the region. While tourism focusing on the promotion of natural assets, such as coral reefs, may well incorporate environmental considerations into the planning and development processes, it is rare that actual protected areas, in the form of parks and/or reserves are incorporated into tourism development schemes. Given the regional and global benefits of preserving biodiversity in the Red Sea, the intense development pressures, the single-sector nature of government agencies, the tensions between the public and private sectors and the resource constraints of GOE, the GEF is the only funding means for implementing an effective coastal and marine protected area and resource management plan.  - 4 - 11. Form of Innovation: The project is innovative in two important ways. First, it promotes interagency coordination and the joint management of a plan that involves both public and private sector parties. Second, it emphasizes coastal zone activities that support both biodiversity protection and the international waters pollution mitigation goals of the GEF. 12. Demonstration Value and Replicability: The CZM program would develop approaches that would be adaptable in other Red Sea countries. This project is the first in the region to attempt an environmental assessment of some scale, to set up an environmental monitoring program and to implement specific protection measures. It would be applicable to other countries and regions that are facing similar coastal development pressures. The project emphasizes communication with other Red Sea countries through the regional framework being developed by UNEP. 13. Proiect Supervision. The project is large and complex, requiring interagency cooperation and joint management through the Project Management Group. During the preparation of the CZM plan in the first year, Bank staff would need to keep in close touch with the development of detailed work plans and the appointment of staff, local consultants and international experts by TDA and EEAA. Supervision teams would visit every four months (three times a year) and would include specialists in biodiversity, environmental planning and tourism. In the second and third years when the CZM plan is being implemented, supervisory visits would be reduced to every six months. Annual work plans and quarterly progress reports would be prepared prior to supervision visits and reviewed during the missions. 14. Agreed Actions. Agreement was reached during negotiations on the following actions: (a) by April 30, 1993 TDA and EEAA would (i) set up a Project Management Group; (ii) appointed a Project Coordinator and Operations Manager; (iii) established the Cairo office; (iv) appointed an advisory committee of distinguished scientists; (b) by June 30, 1993 TDA and EEAA would (i) ensure that the Project Management Group prepared an inception report including a draft work plan for the first year of the project; (ii) appointed the three project advisers for the duration of the project; and (iii) appointed suitable staff to its Environmental Unit and Water and Coastal Zone Management Department, respectively; (c) TDA and EEAA would appoint a Protected Areas Manager and a Recreations Area Manager by September 30, 1993 and a Pollution Control Officer by December 31, 1993; (d) GOE would approve the CZM Plan and approve the boundaries and legal status of the Protected Areas by March 31, 1994; and (e) reporting requirements. There would be cross-effectiveness required between the grant and the associated Bank project. 15. Environmental Aspects and Prolect Benefits. The extensive Red Sea coral reefs are the most complex and valuable habitat in the Red Sea in terms of species richness, endemism, diversity and ecological functioning. They are not only invaluable on a site-specific, local scale, but are also critical to the overall functioning and health of the entire Red Sea, representing a truly unique global resource. Protecting the Egyptian reefs and other coastal habitats and mitigating pollution of the semi-enclosed Red Sea waters would not only benefit the people of Egypt, but also the littoral states, and would provide an example of the integrated management that is needed on coastal areas worldwide. The project would make a significant contribution to global achievements in protecting coral reefs, endemic island wildlife and diverse marine environments. The project aims to assist  interagency coordination and the joint management of a plan by public and private sector parties. This plan would allocate resources and promote polices that support sustainable economic development and income generation from tourism, oil, fishing and nature conservation. Organizational and practical skills in the management of marine and coastal resources, protected areas and visitor access and enjoyment would be learned in the implementation of programs. The project is the first of its scale in the region, and the CZM program would help develop approaches adaptable to other Red Sea countries through the Regional Framework being developed by UNDP and the parallel GEF project in Yemen. 16. Risks. The project faces a number of risks. Until recently, the Government showed limited understanding and support for the integrated decision- making that is required to plan and manage vulnerable coastal resources. Consequently, a limited number of TDA, EEAA governorate staff have been involved with environmental matters in the coastal areas. Funds have been scarce, and it has been difficult to recruit and retain experienced and qualified staff to work in these remote areas. The environmental regulations that do exist have not been enforced properly. These risks would be reduced under the project by the preparation of a CZM Plan, as well as a plan to protect the coastal resources of the Red Sea through the cooperation and joint action of concerned agencies. The project would contribute funds to assist in creating a core team with the adequate expertise and experience to fulfill the objectives of the project and in training a large number of local staff in various aspects of CZM. Studies would be carried out under the project to develop sources of recurrent funding to support CZM activities in a sustainable manner. Attachments  -6- Schedule A ARAB REPUBLIC OF EGYPT EGYPTIAN RED SEA COASTAL AND MARINE RESOURCE MANAGEMENT PROJECT Estimated Proiect Cost and Financing Plan Estimated Cost: Local Foreign Total