Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB1412 Project Name Paraguay Biodiversity Project Region LATIN AMERICA AND CARIBBEAN Sector General agriculture, fishing and forestry sector (100%) Project ID P094335 GEF Focal Area Biodiversity Borrower(s) GOVERNMENT OF PARAGUAY Implementing Agency Government of Paraguay Paraguay Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared February 22, 2005 Estimated Date of February 24, 2006 Appraisal Authorization Estimated Date of Board June 8, 2006 Approval 1. Key development issues and rationale for Bank involvement Background: 1. The largest eco-region within the Atlantic Forest complex, the Upper Paraná Atlantic Forest (UPAF) has been recognized as one of the Global 200 eco-regions and is one of the hotspots in the world 1. However, it is under tremendous conversion threat 2. Paraguay retains the largest portion of the Atlantic Forest complex among the three countries of this ecosystem Argentina, Brazil and Paraguay about 1,310,100 ha of original forest. The country includes significant biodiversity: about 13,000 species of vascular plants, 100,000 species of invertebrates (including 765 butterfly species), 46 amphibians, 100 reptiles, more then 250 fish species, and 167 mammals. 3 The country also contains about 7% of the total area of the Guarani Aquifer, which runs under a considerable portion of UPAF. Fragmented information indicates destruction of habitats paralleled with the highest deforestation rate in Latin America (3.4 percent). 2. The underlying causes that generate these threats are varied but among them: a) government subsidized loans that for several decades have actively promoted agriculture, livestock ranching and extensive rural colonization programs that led to deforestation; b) prior to the promulgation of the new Agrarian Code, the laws provided a perverse incentive to deforest, and invasions of property and claims by landless farmers only fueled landowners interest in clearing forests so they were not subject to expropriation; c) the current high prices for soybeans and relatively low prices for land and minimal requirements and costs of clearing provide economic incentives for deforestation; and d) government has not enforced existing laws and decrees protecting 1 Dinerstein et al., 1995. 2 Mittermeier et al., 2002 3 Fragano and Clay (2003) Biodiversity Status of the Interior Atlantic Forest of Paraguay, in The Atlantic Forest of South America by Galindo-Leal and Camara, pg 294, Island Press, Washington.
ecosystems. The protected areas system has less than one park guard per 20 thousand hectares of protected areas. 3. Forest fragmentation is a significant problem exacerbated by a lack of coordination in planning at national and local levels, and ninety-six percent of Paraguay s land ownership is in private hands. Hence the survival of the country s large number of endemic biological diversity is unlikely without a concerted effort by the major stakeholders at the local, national and global levels. To reverse this downward trend, the Government of Paraguay (GOP) developed a rural strategy which has three main pillars: a) sector growth based on productivity increase; b) equitable sharing of costs and benefits of this growth; and c) conservation of natural resources. Furthermore, in 2004, GOP approved the Zero Deforestation law which prohibits any activities that change land use and conserve areas with forest cover in Eastern Paraguay. Rationale for Bank Support 4. GOP has requested the Global Environmental Facility (GEF) and the World Bank for assistance in the country's effort for conservation and sustainable management of its natural resources including forest and watersheds, and biological diversity of global importance. GEF and Bank support to the GOP s efforts is warranted, as: a) the identified eco-region is extremely important for regional and global biodiversity conservation and is under a serious threat; b) government has shown a strong commitment to biodiversity conservation; and c) a strong potential for partnership between the private and parastatal sector (including the Itaipú Binacional, the entity that operates the Itaipú dam), NGOs, government and donor agencies has been demonstrated. 5. The Bank and GEF partnership would bring acknowledged experience in conservation of biological diversity and natural resources. The Bank could contribute by bringing in its extensive experience in natural resource management and biodiversity conservation based on learned from several successful GEF co-financed projects in the region, including Mbaracayú Biodiversity in Paraguay and Paraná Biodiversity in the neighboring province of Brazil. Furthermore, the proposed project is closely linked with IBRD supported activities including the ongoing Paraguay Poverty Reduction and Natural Resources Management (PARN) project. This project supports on-the-ground interventions at the micro-watershed and farm levels. PARN s strategy to adopt micro-watershed approach was mainly introduced from the experiences in Brazil using experiences of World Bank supported projects in the Brazilian States of Parana, Santa Catarina and Rio Grande do Sul. Close coordination will be maintained between the proposed project and the Brazil projects to ensure lessons learned are fully utilized in the design and implementation of the proposed project. 6. The proposed project is consistent with the most current World Bank Country Assistance Strategy (CAS) for Paraguay 2004-2007 (December 16, 2003 - Report Number 27341-PA), and with the LCC7 (Southern Cone) GEF Strategy approved in October 2004. More specifically, the proposed project directly contributes to the third pillar of the CAS support for sustainable growth in rural areas including among others a scaling up of a comprehensive agricultural extension and natural resource management model and support for sustainable forest management. The third pillar also envisages harnessing private sector involvement. The CAS
specifically identifies GEF support for a potential ecosystem and protected area management project, and a forestry project. 7. This project is consistent with the guidelines of GEF s Biodiversity Operational Program 3: Forest Ecosystem and 13: Agri-biodiversity. Furthermore, the project is consistent with the GEF Strategic Priority 2 of the biodiversity focal area Mainstreaming Biodiversity in Production Landscapes and Sectors. 2. Proposed objective(s) 8. The objective of the proposed project is to conserve biodiversity within the production landscape of the Upper Paraná Atlantic Forest (UPAF) and associated ecosystems. The project objective will be achieved through: a) mainstreaming biodiversity conservation in the production landscape in the UPAF eco-region; b) co-ordination of public and private efforts; c) the reorganization and strengthening of environmental institutions and policies, d) ensuring the compatibility among transboundary conservation initiatives; and e) raising awareness. The project area comprises 10 of 14 departments: Concepción, San Pedro, Canindeyú, Alto Paraná, Caaguazú, Caazapá, Paraguari, Guairá, Amambay and Itapúa. The project area includes more than half of the population of the country. Approximately 8 million hectares will be affected some of which are key areas for the conservation of biodiversity. The project will be partially blended with the proposed Bank loan called Paraguay Community Natural Resources Management, a follow-on and expanded project to PARN that will continue to promote sustainable natural resource management to improve rural productivity in Eastern Paraguay. 3. Preliminary description 9. The project proposed will mainstream biodiversity within an ecosystem holistic approach of natural resources management in key micro catchments areas and protected areas of the UPAF biocorridors under a decentralized strategy and in close cooperation with civil society. It would support to complementary strategies: first, strengthening protected area management on both public and large private lands, and second, strengthening the management of priority corridors linking the protected areas. By integrating biodiversity with other natural resources in the rural economy and enabling the environment for the strengthening of local authorities and landowners, the forest remnants could be maintained or improved and degraded areas recuperated to create the needed connectivity to restore genetic flow. 10. The proposed project would be funded through GEF grant. The project duration is expected to be 5 years. The total cost is projected to be US$27.2 million of which US$12 million would be financed from the GEF. Itaipú Binacional, as an extension of its regional conservation priorities, and building on its successful conservation experience on the Brazilian side of the Itaipú reservoir, will provide most of the necessary project co-financing.
11. The proposed project design includes four preliminary components aimed at tackling identified current weaknesses and institutional capacity and coordination in the management of protected areas and buffer zone. Component 1: Management of Protected Areas System 12. This component would strengthen some of the 23 existing conservation units and new areas in the Upper Paraná Atlantic Forest ecosystem. Since a majority of the forest lands are privately owned, the proposed component will devise a mechanism that provides incentives for private land holders to promote forest conservation measures in their forest lands. The component is designed to promote a voluntary declaration of private protected areas by private land holders in support of project objectives and compatible with existing national legislation with the pertinent package of incentives. In existing public protected areas, the project will strengthen management. Whereas forests in the public domain are critical in network of protected areas management objectives, the project will support activities leading to the declaration of these sites as conservation areas. Once these areas are declared, the project will support the development and implementation of site-specific management plans designed to ensure the long-term sustainability of these areas. San Rafael Managed Resources Reserve is a pilot area of publicprivate joint efforts which will be strengthened and used for demonstration. GEF co-financing will be complemented by private sector funds including Itaipú Binacional contribution. Component 2: Integrated Biodiversity Conservation and Ecosystem Management in Production Landscape 13. This component would define and consolidate conservation corridors and provide incentives for farmers and other land holders to adopt productive activities that promote conservation. It would strengthen conservation units (CUs), current productive practices that influence CUs and corridors, and the management of the watershed. Furthermore, the project will update the biological vision already developed by the government for the Atlantic Forest. It will update the information needed and develop an updated eco-regional vision and a regional strategy to unite the core areas (conservation units) and conservation corridors. This component will analyze all the pertinent information and appraise the feasibility of those proposed corridors. As such, biodiversity-friendly land-use practices will be identified which will be promoted at the producer level through a variety of ways. Activities under this component will provide technical and financial assistance to project beneficiaries to promote the adoption of production practices that allow the conservation and efficient use of natural resources by linking the activities to the Bank s natural resource management project. These activities will target actions to promote: a) the conservation and restoration of soils; b) the efficient use of water resources; c) the conservation and restoration of pastures; d) the conservation and utilization of biodiversity, and/or e) a combination of these targets within the vision of the conservation corridors. To access the technical assistance, however, project beneficiaries will be required to present management plans for integrated natural resources management at the farm level. Furthermore, conservation and sustainable use of biodiversity in productive landscapes and payment for environmental services are also envisaged within this component.
14. To achieve the expected outputs of the component, agriculture extension service within MAG would receive training in how to promote biodiversity conservation practices. SEAM will provide resources, both financial and technical, for technical and awareness-building activities that promote biodiversity conservation. One of the outputs of the component is that the productive sector will have included biodiversity and biodiversity-friendly activities into their expertise to advance the conservation agenda under a different paradigm in which biodiversity is part of and not a constraint for rural development. Component 3: Institutional Strengthening: 15. The component would strengthen institutional capacity by: a) training of professionals and technicians within both the public (municipalities, departments, SEAM, MAG) and private and parastatal (e.g., Itaipú Binacional) sectors; and b) providing technical assistance to the institutions associated with project execution to help them to manage their responsibilities within the project. Within this component, capacity building and awareness raising are also envisaged. The project will also support the development of policies related to biodiversity management outside protected areas with emphasis on endemic fauna, native species ranching, and similar topics. Training of government officials will target technicians in wildlife management, wetland conservation and the Ramsar convention, management plans for sustainable harvesting practices, and rural tourism based on natural ecosystems. Component 4: Project Coordination and M&E: 16. This component would finance a project coordination unit with the following responsibilities: (i) the financial and administrative management of the project, (ii) the evaluation of the proposals for technical and financial assistance to be presented by project beneficiaries, (iii) the approval for financing of such proposals that meet project requirements, (iv) the coordination of the various institutions to participate in the project, (v) the preparation of the annual execution plans and project progress reports, and (vi) the monitoring and evaluation activities including the proper information management systems. Within this component, the GEF would finance activities required to support the execution of the GEF-financed activities. Monitoring will involve data gathering for the early detection changes in state and use of biological diversity in order to improve its management. Towards this end, an information database will be constructed to be expanded on a continuous basis with new data and through the identification of information gaps. An annual monitoring system will be fully developed during project preparation, specifically: definition and justification of resources to be monitored and field data to be gathered when needed; and involvement of producers and local communities in data gathering (species, flora, changes in habitats). It will build upon the existing capacity GIS and remote sensing jointly with civil society. 4. Safeguard policies that might apply To be determined.
5. Tentative financing Source: ($m.) BORROWER/RECIPIENT 15.2 GLOBAL ENVIRONMENT FACILITY 12 Total 27.2 6. Contact point Contact: Michael G. Carroll Title: Sr Agriculturist Tel: (202) 473-9528 Fax: (202) 522-3132 Email: Mcarroll@worldbank.org