GLOBAL ENVIRONMENT FACILITY l56LI -A:F Kenya, Tanzania, Uganda Lake Victoria Environmental Management Project Project Document June 1996 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, anid depletion of the ozone layer. The GEF is jointly implemented bythe United Nations Development Programme, the United Nations EnvironmentProgramme, and the World Bank. 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 document. Global Environment Division Environment Department World Bank 1818 H Street. NW Washington. DC 20433 Telephone: (202) 473-1816 Fax: (202) 522-3256 Report No. 15541-AFR K:ENYA, TANZANIA, UGANDA Lake Victoria Environmental Management Project Project Document June 1996 Agriculture and Environment Operations Division Eastern Africa Department Africa Region CURRENCY EQUIVALENTS Currency Unit = Kenya (KSh), Tanzania (TSh), and Uganda Shillings (Ush) US$1 = KSh58 (une 1996); US$1 = TSh615 (une 1996); US$1 = UShl,000 (June 1996) SDR1.0 = US$144424 WEIGHTS AND MEASURES Metric System GOVERNMENT FISCAL YEAR July 1- June 30 ACRONYMS ASARECA Association for Strengthening Agricultural Research in Eastern and Central Africa CBO Community-Based Organization CIPA FAO Committee for Inland Fisheries of Africa EAFFRO East African Freshwater Fisheries Research Organisation EU European Union FAO Food and Agriculture Organisation (of the United Nations) FIRI Fisheries Research Institute (Uganda) FY Fiscal Year GDP Gross Domestic Product GEF Global Environment Facility IAPSO Inter-Agency Procurement Services Office IBRD International Bank for Reconstruction and Development ICB International Competitive Bidding ICR Implementation Completion Report IDA International Development Association IPM Integrated Pest Management ISP International Shopping Procedures IMF International Monetary Fund IUCN International Union for Conservation (World Conservation Union) KEMFRI Kenya Marine Fisheries Research Institute LVEMP Lake Victoria Environmental Management Project LVFO Lake Victoria Fisheries Organization MISO Management Information Systems Officer MTR Mid-Term Review NCB National Competitive Bidding NEAP National Environmental Action Plan NEMA National Environmental Management Authority (Uganda) NGO Non-Governmental Organization NSP National Shopping Procedures NWSC National Water and Sewerage Corporation (Uganda) OPO Operations Officer PDO Procurement/ Disbursement Officer PIC Project Implementation Committee PIP Proiect Implementation Plan RPSC Regional Policy and Steering Committee SAP Strategic Action Plan SIDA Swedish International Development Agency SOE Statement of Expenditure TAFIRI Tanzania Fisheries Research Institute TECCONILE Technical Cooperation for the Promotion of Dev't. and Env. Protection of the Nile Basin UNDP United Nations Development Programme UNEP United Nations Environment Programme WMO World Meteorological Organisation PART I: PROJECT SUMMARY KENYA, TANZANIA, AND UGANDA LAKE VICTORIA ENVIRONMENTAL MANAGEMENT PROJECT GRANT, CREDIT, AND PROJECT SUMMARY Borrowers: The Republic of Kenya, United Republic of Tanzania, and the Republic of Uganda Beneficiaries: Fisherfolk, smallholder farmers Amounts: (a) GEF Kenya SDR8.0 million (US$11.5 million equivalent) Tanzania SDR7.2 million (US$10.3 million equivalent) Uganda SDR9.2 million (US$13.2 million equivalent) (b) IDA Kenya SDR8.9 million (US$12.8 million equivalent) Tanzania SDR7.0 million (US$10.1 million equivalent) Uganda SDR8.4 million (US$12.1 million equivalent) Terms (GEF): Grant Terms (IDA): Standard, with 40 years maturity. Commitment Charge (IDA): Standard Onlending Terms: Grants to communities for microprojects Financing Plan (US$ m): GEF IDA Governments Totals Local 15.9 18.4 7.6 41.9 Foreign 19.1 16.6 0.0 35.7 Total 35.0 35.0 7.6 77.6 Economic Rate of Return: No ERR calculated, as project benefits are not readily quantifiable. The major direct economic benefit for which the project lays the foundation is avoidance of collapse of the lake fisheries, which is estimated to have a present value of US$270-520 million to the lake community. Staff Appraisal Report: Report No. 15429 Map No.: IBRD 27780 Project ID No.: F2-PA-44135 Vice President: Callisto Madavo, AFR Director: James W. Adams, AF2 Division Chief: Sushma Ganguly, AF2AE Staff: Graeme Donovan, AF2AE KENYA, TANZANIA, UGANDA THE LAKE VICTORIA ENVIRONMENTAL MANAGEMENT PROJECT PART I: Grant and Project Summary 1. The Chief Executive Officer of the GEF has endorsed the GEF financed portion of the project pursuant to paragraph 30 of the Instrument for the Establishment of the Restructured Global Environment Facility. Country and Sector Background Kenya 2. Kenya remains a low-income country. Even though its population growth rate, which historically has been very high, dropped to about 3 percent in 1993, and although Kenya is one of the few countries in Africa that experienced a decline in fertility in the eighties, a significant and sustained increase in per capita income has proved to be an elusive goal in Kenya during the past decade. In spite of a few years of relatively good growth during the second half of the 1980s, the performance of the economy has been particularly inadequate in generating new jobs, and there has been no significant improvement in the incidence of poverty. Overall, the economy has generated only marginal increases in per capita output over the past decade; during the recent years, per capita income actually declined - from $340 in 1991 to $260 in 1994 (at current prices and exchange rates). 3. Sustained Government effort since mid-1993 to tighten fiscal and monetary policy has resulted in effective economic stabilization and the revival of economic growth. The fiscal deficit (exclusive of grants) has been sharply reduced over two years from over 11 percent of GDP in FY93 to about 2.5 percent in FY95. Combined with a generally tight monetary stance, these policies have resulted in the reduction of inflation, to a three-month annualized inflation rate of 2.8 percent by the third quarter of 1995. The recent decline in domestic interest rates and the subsequent capital outflow, as well as the gradual recovery of import demand, resulted in the shilling depreciating in the second quarter of 1995 to about KSh 55 per US dollar where it has since stabilized. In parallel with the improvement in inflation has been a resumption of real economic growth. GDP growth (at factor cost) for 1994 is estimated at 3 percent, the first significantly positive growth in three years, and it was projected at around 5 percent for 1995. 4. Rising population pressures, migration and rapid urbanization have increased the need for urgent actions to address Kenya's environmental problems. The more critical problems are related to soil and land degradation, water resource management, biomass and household energy issues, and the protection and management of fragile ecosystems, including national parks. Rapid urbanization and inadequate physical planning have also caused a significant deterioration in the urban environment. The Government adopted a comprehensive National Environmental Action Plan (NEAP) in June 1994. Areas for priority action include the development and adoption of a comprehensive environmental policy, the establishment of an effective institutional and legal framework, and the formalizing of a requirement for environmental impact assessments for all development projects. 2 Grant and Project Summary Tanzania 5. By the early 1980s, Tanzania had come to be a heavily state-controlled economy, whose rigid economic system was battered by numerous shocks, and whose inadequate policies led to economic stagnation and a fall in per capita income lasting almost a decade. Beginning in 1986, the Government embarked on a program to reform and fundamentally change the existing approach to economic development by dismantling the system of pervasive economic controls and encouraging more active participation of the private sector in the economy. Structural reforms, particularly relating to traditional exports and the parastatal and financial sectors, were not fully completed, and macroeconomic stabilization remained elusive. Nevertheless, the economy responded well to the reforms that were implemented (notably, liberalization of food crop marketing and progressive improvements in foreign exchange management) and the accompanying increased availability of external resources. Official estimates indicate that GDP growth averaged about 4 percent per year and exports grew by more than 4 percent per year during 1986-94 (versus a 5 percent p.a. decline during 1979-85), with a marked increase in food production, increased sales of traditional exports, and a doubling in non-traditional agricultural exports since 1985. Recent household surveys have shown that the adjustment program has been successful in reducing the incidence of poverty from about 65 percent of the rural population in the early 1980s to about 50 percent in the early 1990s. 6. Progress has been made in reforming the foreign exchange and trade systems over the last two years. Tanzania has moved to an interbank market and has abolished all export retention and import licensing, except for items related to health and national security. Excessive monetary expansion has been fueled by worsening fiscal management. The fiscal deficit (including grants) was about 6 percent of GDP in FY93 and 5 percent in FY94, after broadly balanced positions in the previous four years. This reflected widespread and increasing customs duty exemptions, an increasingly inefficient tax administration and the failure of the expenditure control system. Efforts are being made in the current fiscal year (among then a public sector hiring freeze, and reduced transfers to parastatals) to reduce the fiscal deficit below 4 percent of GDP. Inflation, which had accelerated above 25 percent p.a. is targeted by efforts to bring it down to 22 percent within the next fiscal year. Real GDP growth averaged about 3-4 percent per year during FY92 to FY94. Growth in FY94 was seriously compromised by weak economic management, and severe power shortages caused largely by less-than-average rainfall. These developments limited the scope for generating employment and, in particular, the high inflation rates resulting from macroeconomic mismanagement continue to erode the real incomes of the poor. 7. The recently completed National Environmental Action Plan focused on the need for action in the key areas of land degradation, water supply, environmental pollution, marine and freshwater resource management, habitat conservation and bio-diversity, and deforestation. The action program for implementation includes revision of the legislative framework to enable local participation in environmental management more fully. Policies will support the environment in various ways, including applying the forest and wildlife protection acts; developing the means for assessing environmental quality, including water and air pollution; and strengthening environmental awareness programs. Some Government policies are oriented towards using incentives, such as implementing the new land policy to enhance the security of tenure; pricing policies for fuel, including oil; and water rights to encourage efficient use and environmentally sensitive practices. Grant and Project Summary 3 Uganda 8. With a per capita income of about US$200, Uganda is one the poorest countries in the world. Its weak economy and poor social indicators are the legacy of nearly 15 years of political turmoil and economic decline. Since 1987 the Government has been implementing an economic reform program supported by a large number of donors. The program aims to promote prudent fiscal and monetary management, improve incentives to the private sector, reform the regulatory framework, and develop human capital through investment in education, health and other social services. Economic recovery and stabilization have been successful; hard-won macroeconomic stability has been maintained for the past three years. The stability is precarious, however; continuation of good policies and further improvement are therefore required. The dilemma facing policymakers, is to get the economy moving ahead more rapidly, without generating inflation which could unravel the entire adjustment program. 9. Uganda's economic growth since 1987 has been good, but not spectacular. Real GDP grew by an average of 5.4 percent per annum from FY87 to FY93, a gain of about 2.5 percent per annum in per capita terms. To a large extent this growth was the result of bringing land and capital back into production, made possible by increased peace and security. More recently growth has also been fueled by some private investment and by the impact of trade, exchange rate and crop marketing liberalization. Preliminary indications are that real GDP rose by 5 percent in FY94, mainly due to strong performance by the manufacturing and construction sectors. The point has now been reached where further growth will depend on increased private investment. 10. The NEAP was approved by the Government in January 1994. The National Environmental Policy that was adopted subsequently calls for re-aligning sectoral development strategies so that they address priority environmental concerns relating to, among others, land degradation, deforestation, loss of wetlands, and dwindling fish stocks, several of which are directly related to environmental management of the Lake Victoria basin. The policy also emphasizes strategies cutting across sectors such as the need to control population growth and enhance security of land tenure. It also advocates environmental education and a system of environmental impact assessments as essential means of promoting rational resource use. The National Environmental Management Authority (NEMA) established recently will serve as the central policy advisory body on the environment, and coordinate implementation of the NEAP. Lake Victoria and its Surrounds 11. Lake Victoria (Map Number IBRD 27780), with a surface area of 68,800 km2 and an adjoining catchment of 184,000 kM2, is the world's second largest body of fresh water (second only to Lake Superior in size), and the largest in the developing world. Lake Victoria touches the Equator in its northern reaches, and is relatively shallow, reaching a maximum depth of about 80 m, and an average depth of about 40 m. The lake's shoreline is long (about 3,500 km) and convoluted, enclosing innumerable small, shallow bays and inlets, many of which include swamps and wetlands which differ a great deal from one another and from the lake itself. 12. Although there are many features of Lake Victoria which are of intense interest to biologists, it is fish that receive the most attention. Most of the fish species now in the lake also lived in the preceding, west-flowing rivers, but the cichlids, in particular, had a remarkable burst of speciation in response to the change from river to lake conditions. 4 Grant and Project Summary Similar things happened in the other great lakes, but in Lake Victoria it happened much more recently, more rapidly, and with, at first sight, fewer opportunities for ecological isolation in different types of habitat. The cichlids are capable of rapid genetic change, and more prone to speciation than other groups of African fish. 13. Kenya, Tanzania and Uganda control 6, 49, and 45 percent of the lake surface, respectively. The gross economic product of the lake catchment is in the order of US$3-4 billion annually, and supports an estimated population of 25 million people at incomes in the range of US$90-270 per capita p.a. The lake catchment thus provides for the livelihood of about one third of the combined populations of the three countries, and about the same proportion of the combined gross domestic product. With the exception of Kampala, the capital of Uganda, the lake catchment economy is principally an agricultural one, with a number of cash crops (including exports of fish) and a high level of subsistence fishing and agriculture. In Kenya and Uganda the areas of coffee and tea in the catchment are a significant part of those nations' major agricultural exports. The quality of the physical environment is therefore a fundamental factor in maintaining and increasing the living standards of the growing population. Major Threats to the Lake 14. The lake basin is used as a source of food, energy, drinking and irrigation water, shelter, transport, and as a repository for human, agricultural and industrial waste. With the populations of the riparian communities growing at rates among the highest in the world, the multiple activities in the lake basin have increasingly come into conflict. This has contributed to rendering the lake environmentally unstable. The lake ecosystem has undergone substantial, and to some observers alarming changes, which have accelerated over the last three decades. Massive blooms of algae have developed, and come increasingly to be dominated by the potentially toxic blue-green variety. Water-borne diseases have increased in frequency. Water hyacinth, absent as late as 1989, has begun to choke important waterways and landings, especially in Uganda. Overfishing and oxygen depletion at lower depths of the lake threaten the artisanal fisheries and biodiversity (over 200 indigenous species are said to be facing possible extinction). Scientists advance two main hypotheses for these extensive changes. First, the introduction of Nile perch as an exotic species some 30 years ago has altered the food web structure; second, nutrient inputs from adjoining catchments are causing eutrophication. Thus although the lake and its fishery show the evidence of the dramatic changes in the lake basin over the past century, the lake is not the source of the problem. The problems have arisen in the surrounding basins through human activity. Project Objectives 15. The Lake Victoria Environmental Management Project (LVEMP) is a comprehensive program aimed at rehabilitation of the lake ecosystem for the benefit of the people who live in the catchment, the national economies of which they are a part, and the global community. The program objectives are to: (a) maximize the sustainable benefits to riparian communities from using resources within the basin to generate food, employment and income, supply safe water, and sustain a disease free environment; and (b) conserve biodiversity and genetic resources for the benefit of the riparian communities and the global community. In order to address the tradeoffs among these objectives which cut across national boundaries, a further project objective is to harmonize national management programs in order to achieve, to the maximum extent possible, the reversal of increasing environmental degradation. Grant and Project Summary 5 Project Description 16. The project is the first phase of a longer term program whose aims are as outlined above. The first phase will provide the necessary information to improve management of the lake ecosystem, establish mechanisms for cooperative management by the three countries, identify and demonstrate practical, self-sustaining remedies, while simultaneously building capacity for ecosystem management The project will consist of two broad sets of activities. The first set, designed to address specific environmental threats, will take place in a series of selected pilot zones. The second set of activities, which will improve information on the lake and build capacity for more effective management, will be of necessity lake-wide in scope. 17. In the pilot zones, the project would do the following in an integrated way: develop groundwater resources; conserve and develop wetlands; reduce sediment and nutrient flow, especially of phosphorus, into the lake; reduce fecal coliform and municipal nutrient output into the lake; regulate industrial effluent; define current contamination of fish and prevent any increase; stabilize the catch of Nile Perch, and increase the catch of indigenous species; increase incomes of local fisherfolk; and reduce water hyacinth to manageable levels. A total of fourteen pilot zones have been identified, four in Kenya, and five in each of Tanzania and Uganda. Work would be started in one pilot zone in each country in the first year - Nyakach Bay in Kenya (including the city of Kisumu), Mwanza Gulf in Tanzania (including the city of Mwanza), and Napoleon Bay in Uganda (including the city of Jinja). The other pilot zones are Berkeley Bay, Usenge-Yala, and Karungu Bay (Kenya); Mara-Shirati Bay, Speke Gulf, Emin Pasha Gulf, and Kagera- Rubafu Bay (Tanzania); and MacDonald-Berkeley Bay, Murchison Bay, Sesse Islands, and Sango Bay (Uganda). 18. Among lake-wide actions the project would: assess and measure sources of nutrients causing eutrophication; measure fisheries-trophic state interactions; model and monitor lake circulation; define and measure the contaninant threat; harmonize regulation and legislation; monitor recovery and impact; and build institutional capacity. 19. The project would support the following specific regional and national program activities: (a) management of fisheries, including the establishment and operations of the Lake Victoria Fisheries Organisation [US$2.3 million), improvement of fisheries research and the information base for fisheries [US$13.3 million], strengthening of extension, monitoring and enforcement capabilities of national fisheries administrations [US$14.1 million]; and studying and implementing a Fish Levy Trust [US$2.0 million]; (b) management and control of the water hyacinth infestation [US$8.3 million]; (c) management of lake pollution and water quality, including strengthening and harmonizing national regulatory and incentive frameworks and enforcement capabilities, and establishing a lake-wide water quality monitoring system [US$9.6 million], improvement of research and the information base for pollution control and water quality [US$4.3 million], pilot investments in industrial and municipal waste management [US$1.7 million], and priority waste management investments [US$4 million]; (d) management of land use in the catchment, including improvement of research and the information base for pollution loading from the catchment, assessment of agro-chemicals, and pilot investments in soil conservation and afforestation [US$9.2 million]; (e) wetland management, including improving the information base [US$3.4 million], and pilot investments in sustainable management of wetland products [US$1.5 million]; and (f) support for institutions for lake-wide research and management, and pollution disaster contingency planning [US$4.0 million]. 6 Grant and Project Summary 20. Incremental costs of the project are estimated to be US$38.8 million (details in the SAR Annex 7). In addition to financing the baseline and adjusted baseline measures from non-GEF (IDA) sources, the three riparian governments have agreed to contribute US$3.8 million from their own resources to finance a part of the project's incremental cost. They have requested a GEF grant of US$35 million to fund the balance. 21. The total project cost of US$77.6 million would be financed by the Global Environment Facility (GEF) (US$35 million), IDA (US$35 million), and the Governments of Kenya, Tanzania, and Uganda (US$7.6 million among them). Estimated project costs and financing are given in Schedule A. Schedule B outlines the economic analysis, Schedule C the procurement methods and disbursement estimates, Schedule D the timetable of key project processing events, Schedule E the status of Bank Group Operations in the three countries, and Schedule F an overview of the three countries. Project Implementation 22. The Tripartite Agreement (signed August 5,1994) which set in motion a collaborative process of project preparation among the three countries, provided also for project implementation. In particular it established three National Secretariats, each headed by a high-level officer, selected by the respective governments, and supported by a modest staff. These Secretariats served an essential coordination role during project preparation, and it is planned that this role should continue into the project implementation phase. They will be strengthened by the appointment of a Procurement/Disbursement Officer, an Operations Officer, and a Management Information Systems Officer. Among other things, these three officers will ensure compliance with IDA and GEF reporting, procurement and disbursement procedures. The three Secretariats, one in each country, will provide a day-to-day central contact point and information clearing house for all agencies implementing the program, and all donors supporting it While the many implementing agencies will be responsible for progress on their own components, and for monitoring and reporting on that progress, the Secretariats will gather information from all the agencies in their respective countries, be responsible for overall monitoring, and prepare progress reports for decision making about the overall project The Heads of the Secretariats will also, when necessary, organize tripartite meetings of officials responsible for various components of the program. The Regional Secretariat in Tanzania will organize meetings, when required, of members of the Regional Policy and Steering Committee, which will also remain in place, with the same membership as it has had throughout project preparation. The Committee will have several roles, its most important being the mechanism for resolution of disputes arising during implementation of the program. 23. The Lake Victoria Fisheries Organization will assume overall coordination for components associated with fisheries, although as the project description outlines, implementation will be by individual national agencies, and the Regional Policy and Steering Committee will be responsible for overall program coordination, including coordination between the fisheries program as a whole and the rest of the program. 24. The various national agencies will implement components of the projects as follows. The three Fisheries Research Institutes (KEMFRI, TAFIRI and FIRI) will play lead roles in all sub-components of fisheries research, and will collaborate with the Fisheries Departments of their respective governments in the fisheries extension, and with the Ministries of Water in the Water Quality components. For the latter components, the Ministries of Water will be the lead agencies, and they in turn will collaborate closely Grant and Prqect Summary 7 with the Ministries of Environment, Natural Resources and Agriculture in their implementation of the components on land use and wetland management. National wetlands committees in all three countries will also be involved in these components, with continuing assistance from the World Conservation Union (IUCN). The Moi, Makarere, and Sokoine Universities, and the Universities of Nairobi and Dar es Salaam, will be involved in many of the studies, including those on socio-economics. The water testing laboratories of the Kisumu and Mwanza Municipal Councils, the Uganda Water and Sewage Corporation, and the Lake Basin Development Authority (in Kisumu) will extend the reach of laboratories already operating or planned by the respective Ministries of Water. 25. In order to address the variations in implementation capacity, from country to country, and agency to agency, with some strong already but others less so, every sub- program makes extensive provision for capacity building. For the whole project in the three countries provision is made for more than 2,000 short term and on-job training courses, about 100 regional Masters Degrees, and 15 PhDs. Care will be taken to strike a balance in the training and its timing so that enough people are available to implement the project. 26. For the Water Hyacinth Control Program, national steering committees or task forces will be set up, and rearing units for biological control agents will be assisted by the respective national agricultural research institutes. Finally, the project will also draw on the resources of local and international consultants in areas where particular scientific expertise is called for beyond the abilities of staff in the implementing Ministries. 27. Because of the extensive scientific investments in the program, the worldwide scientific interest in Lake Victoria, the need to seek innovative solutions to solving environmental problems that draw on a broad spectrum of physical, biological and social sciences, and uncertainties associated with the dynamic lake ecosystem, it is also proposed to appoint a high level panel of internationally renowned scientists, initially with 7 members, to serve as an overall advisory group for the scientific studies in the lake. Possible scientific specialties for representation on the panel will be limnology, fish biology, zoology, entomology, plant physiology, microbiology, chemistry, meteorology, economics, anthropology, sociology, soil chemistry and physics, forestry, and ecology. The panel will contain at least three members representing the natural sciences and at least two from the social sciences, and its membership will be reviewed every two years, although members may serve unlimited terms upon reappointment by the nominating agencies. Following each two-yearly review, the panel will elect from among its members a corresponding secretary to facilitate communication within the panel. The panel members will be mutually acceptable to the three riparian states (as represented by the Regional Policy and Steering Committee) and to IDA. 28. As they collaborated during project preparation, IDA, UNDP, and UNEP will also collaborate during reviews of implementation. IDA will have overall responsibility for review, UNDP will focus on stakeholder consultation and participation aspects of the project, and UNEP will focus on water quality aspects of the project. As part of the Mid- Term Review of the project, the three governments will prepare an updated analysis of transboundary environmental concerns, to guide the second phase of project implementation, and set the stage for subsequent initiatives. The Implementation Completion Report prepared by the three governments at the end of the project will include a revised Strategic Action Program, containing an outline of interventions needed 8 Grant and Proiect Summary to address priority problems. IDA will use this as the basis for convening a donors' meeting to seek commitments to support such interventions. Project Sustainability 29. The two most important elements of sustainability are stakeholder ownership, and provision for fiscal continuance. They have been addressed by a highly participatory mode of project preparation, and will be addressed during implementation by special efforts to involve local communities, and support for a Fisheries Levy Trust study to seek sources of funds for ongoing support for lake ecosystem activities. 30. Catalyzed by GEF financing, the three governments prepared the project themselves, in the process resolving many issues among them, demonstrating good technical collaboration, and generating strong ownership for the implementation phase. The Tripartite Agreement signed in August 1994 covered both preparation and implementation, thus providing for the implementation phase a continuing legal framework which has already been tested and found sound. Institutional arrangements which have proved their worth during preparation - especially the structure of National Secretariats and a joint Policy Steering Committee - will be continued unchanged for implementation, although the Secretariats will be strengthened. 31. Supported by the UNDP, special efforts during preparation were made in all three countries to involve communities around the lake in generation and discussion of project proposals, along with information-gathering to ensure that project proposals address the needs of local communities. In al three countries consultants were engaged who visited communities, women's groups, projects of community-based organisations and NGOs in fisheries and fish processing, soil conservation, wetlands development, and water hyacinth control, among many others. In Tanzania, for example, a study of community needs was conducted in three regions, 12 districts, 24 fishing villages and more than 85 groups or communities. The consultants also worked with NGOs and others to conduct stakeholder workshops, and with the government working groups to incorporate a community focus into the preparation report. The large emphasis on fisheries extension is one of many outcomes of this process. Others include the provision for community micro-projects among the investments which the project supports, and the proposals for community involvement in many of the research programs to be conducted under the project. The government preparation report acknowledges that "one of the major setbacks in aquatic resource management in East Africa is the general lack of community participation in management programs", and notes that such participation "is considered key to the successful implementation of this program.' 32. Throughout the project special efforts will be made to involve local communities, and the capacity of a number of local NGOs and CBOs will be strengthened so that they could facilitate the process of community participation and ownership, and lead the communities in undertaking wise use activities of the resources in the lake and its basin. A special feature of the Fish Biology and Biodiversity Conservation program implementation, for example, will be attempts to involve local communities in identification of issues, tagging and recapture efforts, return of immature fish, surveilance of protected areas, sampling of commercial catches, protection of research equipment, and compilation of research data. Many of the other scientific initiatives will involve communities in carrying out the measurements, and in caring for monitoring equipment. For the water hyacinth control program, in particular, it wil be essential for local people to understand and assist with the biological control efforts. Grant and Project Summary 9 33. The project will have community participation woven into virtually every component, funding for micro-projects, a great deal of community training, hundreds of stakeholder workshops, and provision for community participation in everything from scientific studies to water hyacinth control, fisheries research to own-enforcement of agreed fishery regulations, sustainable use of wetlands to soil conservation, with benefits springing from better fishing management, aquaculture, higher quality products, lower post-harvest losses, cleaner water, more control over local fishing beaches, and construction of community assets. 34. Acknowledging that availability of reliable and adequate funding is essential for management of fisheries, which involves continuing research, extension, monitoring and enforcement, the three governments have proposed to study and implement jointly a program in which funds raised from the commercial fisheries themselves will contribute to underwriting fisheries management in the longer term, as well as assisting some of the central monitoring and management initiatives to become fiscally sustainable. The study will identify sources of funds, and also examine in depth the issues involved in managing such funds on a regional basis. The LVEMP includes financial support for establishing a shared Levy Trust Fund among the three countries, should the study show this to be feasible. Lessons Learned from Previous IDA and GEF Involvement 35. This program will be the first of its kind within the region, addressing a complex set of managerial, scientific/ technical and institutional issues across three countries. It aims to provide Governments with the necessary skills, information, technical and financial resources, and a proper institutional and legal framework to carry out successfully such an endeavor. It will build technical capacity to promote, assist and coordinate the various initiatives within a regional framework, and help design a comprehensive set of national policies and strategies based on lessons learned from field experience. An important lesson incorporated from past operations was to ensure that preparation be done by the countries themselves. The resultant ownership will have the usual national benefits, as well as being especially important in this program which crosses national boundaries, since the three governments have already gained valuable experience working together during preparation. 36. The present report has responded to the GEF Technical Review by acknowledging the uncertainty about sources and mechanics of eutrophication, incorporating the specific management elements suggested by the reviewer, setting the stage for a new approach to modelling, reiterating the emphasis already contained in the first draft, that management of the lake's problems is the principal aim of the project, and delineating the project's large elements of capacity building. Rationale for GEF and IDA Involvement 37. Lake Victoria is an international water body that is both of great economic worth to the three riparian countries and of great scientific and cultural significance to the global community, mainly in respect of its unique waterborne biodiversity. It is suffering severely from three of the four major global environment concerns highlighted in the GEF Operational Strategy for International Waters - degradation of water quality due to pollution from land-based activities; introduction of non-indigenous species; and excessive exploitation of living resources. It is also facing their typical consequences - potentially irreversible environmental damage, hardship to the poor and serious health 10 Grant and Project Summary concerns. With poverty endemic to the region and many competing claims for scarce development resources, the case for GEF-support to overcome the barriers to concerted corrective action is extremely strong. As called for in the operational strategy, the GEF assistance will act as a catalyst for the three countries to develop a better understanding of how the lake functions, learn how the actions of their populations in the lake basin affect the lake environment, and work out ways jointly with one another to implement a comprehensive approach to managing the lake ecosystem to achieve global environment benefits. The project is consistent with both the GEF waterbody-based operational program and with the integrated land and water operational program, while also having elements of the third, contaminant-based, operational program. The project will in particular address another priority in the operational strategy - the conservation and sustainable use of biodiversity in freshwater ecosystems. As one of the world's largest unique freshwater biodiversity habitats, Lake Victoria is a clear priority for GEF assistance. 38. The GEF funding for this project will make possible the elaboration of a strategic framework for a large program of investments in the lake basin during the project implementation period, particularly in municipal waste management and soil conservation, and will also lay the foundation for a longer program of investments over time in these and other areas. It will thus have an enormous "leveraging" impact, for the benefit of the national and global environments. The GEF financing of preparation succeeded in generating strong "ownership" of the project by the three governments which prepared it, and catalysed close collaboration at every stage among IDA, FAO, UNDP and UNEP. The information and pilot work carried out in the GEF project will orient ongoing investments and guide new ones during its five years of implementation, and far beyond. Within the next two years, under projects already begun, IDA and the European Union will finance improvements to municipal sewage treatment schemes in Kampala and Jinja in Uganda, and Mwanza in Tanzania. The funds will also finance a study of storm water drainage, solid waste management, and water reticulation in Kampala. 39. Several other major infrastructure projects are planned to begin implementation in FY98 which will finance water supply and urban sanitation in the lake basin, directly in support of the LVEMP. Further projects are planned to support natural resource management in the lake basin, including soil conservation and catchment afforestation. All of these projects will reduce pollution and eutrophication in the lake. While most of these projects were identified initially in the absence of the LVEMP, the latter will increase markedly the success with which they address the priority issues. The major projects still forthcoming will "take their signals" from the framework and findings of the LVEMP. Numerous smaller scale activities with bilateral support, implemented by local communities and NGOs, will also benefit from being planned in the context of the improved information base and management plans designed for the ecosystem as a whole, which will result from the LVEMP. 40. The project is consistent with the Bank's Country Assistance Strategy (CAS) for each of the three countries. The CAS for Kenya was discussed by the Board on January 31, 1996. One of the key elements of the strategy is to improve environmental management within the country, and to assist Kenya to respond to its commitments to enhance protection of the global environment. The CAS for Uganda was discussed by the Board on June 1,1995. An important element of that strategy is to build domestic environmental management capacity, and in particular to address issues related to degradation of Lake Victoria. The CAS for Tanzania was discussed by the Board in Grant and Project Summary 11 March 1994, and a Progress Report was discussed by the Board on May 23,1996. IDA financial support for the project is in line with two primary aims of the CAS, namely capacity building for improved public sector management, and creating a climate for environmentally sustainable investments. 41. The project will be the first substantial investment in the environment for IDA in two of the three countries following preparation of National Environmental Action Plans in all three. Various other donors have supported a range of initiatives in and around Lake Victoria, in smaller, uncoordinated, and sometimes incomplete ways. In the absence of a coordinated management system for the entire lake and its ecosystem, these smaller projects have sometimes fallen short, and continue to fall short, of realizing their maximum potential. Building on its wide-ranging relationships with all three governments, IDA has an important capability, and as implementing donor in this project an important opportunity, to support the development of such a coordinated management system. IDA also has the standing to mobilize scientific resources from across the globe in support of an initiative which has unprecedented interest to the global scientific community. Agreed Actions 42. At negotiations, agreements and assurances regarding the project's organization and operational arrangements were obtained, which inter alia included the following: (a) in order to ensure the cost-effectiveness of any one country's investments, the three governments agreed to take steps to ensure that project components with regional implications will proceed at a comparable pace in all three countries; (b) a high level panel of internationally renowned scientists, with 7 members, will be appointed to serve as an advisory group for the scientific studies in the lake, and they will meet at least once a year to review progress on program implementation; (c) national steering committees will be established in all three countries for the water hyacinth control program; (d) the policies, procedures and core membership of the Regional Policy and Steering Committee will not be changed without agreement of IDA; (e) herbicides used in the water hyacinth control program will be acceptable to IDA, they will be used sparingly, in strictly selected and confined areas, all persons applying such herbicides will be trained in their safe and appropriate handling and use, and mechanisms for careful monitoring of herbicide use will be established; (e with the exception of the biological control agents for water hyacinth, no new species will be introduced into the lake without first carrying out an environmental impact assessment; (g) prior to implementation of any intervention likely to have a negative impact on fish ecology (such as changes in net sizes or other controls over the fishing effort), the proposed intervention will be subjected to an environmental impact assessment, with provision for public comment; (h) prior to implementation of any project component related to pollution control, a project specific environmental assessment will be carried out to guard against the possibility that any uncontrolled dumping of domestic and industrial wastes would take place; (i) the National Secretariats will prepare annual work programs, training plans, and related financing plans and submit them to IDA for review by March 31 of each year; the annual work programs would include details of the procurement of goods and services and the procedures to be adopted for such procurement within the limits given earlier and agreed by IDA; (j) disbursement arrangements will be satisfactory to IDA, and each Government will open a Special Account at a commercial bank, and operate it in a timely manner; (k) procurement of the goods, works, and consultant services required for the project and to be financed out of the proceeds of the GEF Grant and the IDA Credit will be undertaken in accordance with procedures satisfactory to IDA; (1) the three Governments will have 12 Grant and Project Summary the records and accounts of the project, including those for the Special Accounts and Statements of Expenditure (SOEs), audited each fiscal year by independent auditors acceptable to IDA; and will submit to IDA the audit reports within six months after the close of the respective fiscal year; the audit reports will include a statement on the adequacy of the accounting systems and internal controls; (m) after the first project year, an annual comprehensive review will be held with the donors, to consider the annual work plan and new financial procedures and arrangements for the forthcoming fiscal year; modifications of project design and/or procedures will be introduced as appropriate; (n) annual National Workshops coordinated by the National Secretariats and an annual Regional Workshop coordinated by the Regional Secretariat in Tanzania will be held to assess implementation progress and agree on any adjustments needed; (o) a Mid-Term Review will be held prior to the end of March, 1999, during which the performance of the Lake Victoria Fisheries Organisation, the three National Secretariats, and the Policy Steering Committee will be reviewed and appropriate changes made; the review will also carry out an in-depth examination of the arrangements for community participation in project implementation; as part of the Mid-Term Review, the three Governments will prepare an updated analysis of the transboundary environmental concerns, to guide the second phase of project implementation, and set the stage for subsequent initiatives; (p) subject to satisfactory completion of the Levy Trust Study, the three Governments will jointly establish, by the end of July, 1988, a Levy Trust Fund into which funds raised from commercial fisheries will be placed and disbursed in support of joint fisheries management and central monitoring initiatives under the project; (r) the three Governments jointly will prepare and submit to IDA an Implementation Completion Report within six months after the closing date; the Implementation Completion Report will include a revised Strategic Action Program, containing an outline of interventions needed to address priority problems. 43. Prior to Credit Effectiveness, the three Governments will, inter alia: (a) confirm the membership of the Regional Policy and Steering Committee; (b) appoint Heads to the three National Secretariats with qualifications and experience equivalent to a Deputy Principal/Permanent Secretary, and appoint to each Secretariat a Procurement/Disbursement Officer, an Operations Officer, and a Management Information Systems Officer; (c) establish the Panel of Scientists; (d) agree standard methods for measuring and monitoring water quality; (e) provide evidence satisfactory to IDA that each of the three Governments has made budgetary allocations representing their first year contribution to the Project; (f) finalize and submit to IDA the annual work plans and financial plans for the first year of the Project Implementation Plan. Environmental Aspects 44. The program is in effect a regional environmental action plan for Lake Victoria, having as its central objective improving the environmental conditions of Lake Victoria and its catchment. However, the program will encompass a wide range of different interventions and investments, and has been designated as Category B for environmental analysis to ensure that adequate attention will be given to the many overall positive impacts as well as to individual components which might have adverse local environmental effects. 45. The project will locate and quantify the environmental problems arising from the very rapid growth of population around the shores of the lake, and in its catchment, identify the sources of pollution and nutrient inflows into the lake, propose and begin to implement ameliorative measures, including innovative pilot measures, and strengthen existing institutions to sustain solutions in the longer term. The area in which the project Grant and Project Summary 13 is expected to make the most economic difference will be in heading off developing instability and possible serious collapse of the valuable lake fisheries. 46. The project will also address any negative environmental impacts which may arise in the course of project implementation itself, in the following ways: (a)fish ecology - any proposed interventions (such as changes in net sizes or other controls over the fishing effort) will be clearly defined and carefully assessed through an environmental impact assessment before introduction, in order to avoid unforeseen effects from attemptb to restore and stabilize the fish ecology in the lake; (b) aquaculture - no new species will be introduced into the lake into the lake without first carrying out an environmental impact assessment; (c) biological control agents - all biological control agents under consideration have been subjected to exhaustive field testing over twenty years in several countries, and there are no remaining doubts about their safety; any additional biological control agents available during project implementation will be subjected to similar testing protocols; (d) herbicides - use of herbicides in the water hyacinth control program will be confined to those acceptable to IDA, they will be used sparingly, in strictly selected and confined areas, all persons applying such herbicides will be trained in their safe and appropriate handling and use, and mechanisms for careful monitoring of herbicide use will be established; (e) pollutants - pollution control projects will be subjected to project specific environmental assessments to guard against the possibility that any uncontrolled dumping of domestic and industrial wastes might take place. Program Objective Categories 47. The overwhelmingly positive contributions of the program to environmentally sustainable development have been outlined above. The program will pursue poverty alleviation through its emphasis on restoration of stability to the lake fishery, with positive impacts on the lives of at least 500,000 persons whose livelihoods depend directly on the fisheries. Through community involvement in implementation, the program will seek to appropriate for poorer groups a larger share of gains arising from the fishery, and from using resources in wetlands and other parts of the lake catchment. Improvements in water quality around the lake will contribute to better health for all who rely on it for their water supply, especially poorer groups. The welfare of women will be improved by additional income-earning opportunities in fishery-related and wetland activities, as well as by better access to water supply and improved health through the control of aquatic weed infestations. The project will foster managerial efficiencies in both the public and the private sectors by improving policy analysis, regulatory enforcement, harmonized internal and external systems and procedures, and an environmental information base. The project will also support regional cooperation and understanding among the three riparian countries. Project Benefits 48. This regionally coordinated environmental management project is expected to generate greater benefits than the sum of any individual country programs, since it will reduce uncertainty in respect to actions by riparian partners and lower the probability that benefits of actions taken by an individual government will be offset by actions or non-actions by others. The project is expected to lay the essential foundations of knowledge, capacity building and establishment of institutions for a wider program of investments which will generate: (a) net economic benefits estimated to have a present value to the lake communities of US$275-520 milion from stabilising lake fisheries; (b) a reduction in the annual costs of the current water hyacinth infestation, estimated to be 14 Grant and Project Summary about US$6-10 million per year, as well as avoidance of even larger costs which might be associated with increased infestations in the future were nothing to be done; (c) a reduction in the additional water supply costs arising from treating water of deteriorated quality, these costs estimated to be at least US$3.5 million per year; (d) diminished incidence of disease among riparian communities as a result of improved quality of water and sanitary environment; (e) increased productivity from wetlands and areas with degraded soils; and (f) greater biodiversity, producing benefits to local communities, tourists and the global community, compared to a "non-program" situation. A more detailed discussion of project benefits is found in Schedule B. Risks 49. The main risk is that the strength of the commitments by the three Governments will fail to sustain a regional environmental management program for the lake basin. This may express itself through inadequate budgetary arrangements to fund regional bodies (such as the LVFO) or coordinating agencies, erosion over time of the powers given to such institutions, or unwillingness or lack of capacity to follow up on regional regulatory decisions or guidelines through enforcement at the national level. Since the three governments have collaborated well during program preparation, and the proposed program provides many opportunities for low-risk collaboration on technical issues, which should build confidence steadily during implementation, any waning commitment would seem likely to arise only from sources external to the program. The risk of inadequate or unforeseen results emerging from the research and studies in the program would be reduced by the appointment of a panel of scientists who will review regularly scientific issues arising in the course of project implementation. In the event of fiscal crises, the project is structured so as to allow postponement of work in the pilot zones planned for the outer years of the project. In this way the essential core of lake- wide activities will be preserved, as well as the coordinated nature of the adaptive environmental management approach in at least a sub-set of the 14 pilot areas. Upon resolution of any funding crisis, work will be resumed with minimum disruption to progress. Grant and Project Summary 15 Schedule A LAKE VICrORIA ENVIRONMENTAL MANAGEMENT PROJECT Project Costs (US$'000) % % Total Project Component Local Foreign Total Foreign Base Exchange Costs A. Fisheries Management (LVFO) 314 1,649 1,964 84 3 B. Fisheries Research 6,893 5,910 11,802 50 17 1. Fish Biology and Biodiversity Conservation 2,618 3,164 5,782 55 8 2. Aquaculture 1,544 1,237 2,782 44 4 3. Socio-Economics Studies 1,332 1,048 2,382 44 3 4. Establishing Database 399 458 858 53 1 C. Fisheries Extension, Policies, and Laws 7,411 4,947 12,359 40 18 D. Water Hyacinth Control 5,423 2,042 7,465 27 11 E. Water Quality Monitoring 3,226 5,262 8,488 62 12 1. Eutrophication 2,720 3,409 6,129 55 9 2. Sedimentation (pilot study) 152 364 516 71 1 3. Hydraulic Conditions (pilot study) 138 700 838 83 1 4. Lake Victoria Management Model 216 789 1,005 78 1 F. Industrial and Municipal Waste Management 4,074 5,156 9,230 56 13 1. Management of Industrial and Municipal Effluent 1,871 1,897 3,768 50 6 2. Tertiary Municipal Effluent Treatment (pilot project) 481 260 740 35 1 3. Tertiary Industrial Effluent Treatment (pilot project) 462 260 722 36 1 4. Priority Waste Management Investments 1,260 2,740 4,000 69 6 G. Land Use and Wetland Management 8,093 4,488 12,560 36 18 1. Pollution Loading 1,962 1,603 3,566 45 5 2. Buffering Capacity of Wetlands 1,751 1,339 3,091 43 5 3. Assessment of Agro-Chemicals (pilot) 344 424 768 55 1 4. Soil and Water Conservation (pilot) 1,143 182 1,325 14 2 5. Sustainable Use of Wetlands Products (pilot) 969 366 1,336 27 2 6. Afforestation 1,924 552 2,476 22 3 H. Policy and Institutional Framework 3,097 2,193 5,290 41 5 1. LVEMP Secretariats 1,975 462 2,436 19 4 2. Support to Riparian Universities 319 628 947 66 1 3. Fisheries Levy Trust 803 953 1,755 54 2 4. Pollution Disaster Contingency - 150 150 100 1 Subtotal Base Costs 37,532 31,627 69,159 46 100 Physical Contingencies 3,550 2,604 6,155 42 9 Price Contingencies 707 1,482 2,270 65 3 TOTAL COSTS 41,869 35,713 77,582 46 112 Financing Plan (US$ million) Project Component Govemments GEF IDA Total % A. Fisheries Management (LVFO) 0.2 2.1 2.3 3 B. Fisheries Research 1.3 8.8 3.2 13.3 17 C. Fisheries Extension, Policies, and Laws 1.4 12.7 14.1 18 D. Water Hyacinth Control 0.8 4.5 3.0 8.3 11 E. Water Quality Management 1.0 8.6 9.6 12 F. Industrial and Municipal Waste Management 1.0 8.9 9.9 13 G. Land Use and Wetland Management 1.4 7.4 6.3 14.1 18 H. Policy and InsUtutional Framework 0.6 3.6 1.9 6.1 8 TOTAL COSTS 7.6 35.0 35.0 77.6 100 16 Grant and Project Summary Schedule B ECONOMIC ANALYSIS Background The LVEMP is a comprehensive program aimed at rehabilitation of the lake ecosystem for the benefit of the people who live in the catchment and its area of influence. The scientific evidence shows that the present methods of exploitation and development in the catchment are unsustainable, and that without intervention there could be serious environmental and related socio-economic consequences. The most pressing concern is a possible decline in the very valuable fishery (currently worth about US$320 million annually in export revenue), but this predicted decline represents merely an immediately obvious outcome of the loss of resilience of the ecosystem. Sediments and pollution are degrading water quality, increasing urbanization and agricultural expansion are both resulting in the loss of wetlands - including swamps and satellite lakes that still shelter a diminishing remnant of a once spectacular native aquatic fauna, changes in feeding chains and trophic systems since the introduction of exotic fish species are trending toward a highly unstable fisheries monoculture, and - a fundamental and ominous change - the anoxic portion of the lake waters (a biologically almost dead zone) has been steadily increasing over recent years. The fundamental objective of the LVEMP is to restore a healthy, varied lake ecosystem which is inherently stable and which can support, in a sustainable way, the many human activities in the catchment Development pressures in the catchment are increasing because of natural population growth and migration from poorer and less fertile rural areas, and the multi-purpose central role of the lake is becoming increasingly important even as its capacity to cope is being threatened. The economy of the lake catchment is worth in the order of US$34 billion annually and supports an estimated population of 25 million people at standards of living in the range of US$90-270 per capita p.a., based on national figures. The lake catchment economy is principally an agricultural one, with a number of cash crops (including exports of fish) and a high level of subsistence fishing and agriculture. The quality of the physical environment is therefore a fundamental factor in maintaining and increasing the living standards of the growing population. Gross Benefits The main economic benefits of the overall LVEMP derive from avoiding the losses that can be anticipated if effective action is not taken. According to the best understanding of the local and international scientific research community, as documented in the material presented by the Regional Task Forces for project preparation, the major consequences of not halting the present trends could be: (a) a decline in the overall fishery as a result of both overfishing and deterioration of lake water quality; (b) increasing extent and severity of water hyacinth infestation; (c) unsuitability of the lake water for domestic supply or animal watering; and (d) continued degradation of the wetlands. (a) Fisheries The most dramatic and direct effect of not taking action could be the onset of instability in the Nile perch fishery. One possible scenario would be a highly variable and unpredictable annual catch, which could drop in some years to as little as 10 percent of current Grant and Project Summary 17 levels. On the other hand, fisheries models suggest that a sustainable fishery could be developed which would allow annual yields of perhaps 90 percent of current levels, still dominated by Nile perch but with a wider range of other species. The value of moving to the sustainable level of catch can be estimated, on a conservative basis, as the difference between the income stream from 90 percent of the current catch and that from an average 50 percent of the current catch, calculated after year 5 of a management programme: Export value of a sustainable fishery: 90% of $320m p.a. = $288m p.a. Export value of an uncontrolled fishery: 50% of $320m p.a. = $160m p.a. Difference, starting from year 6, attributable to the LVEMP = $128m p.a. Present value of this revenue stream at a 12 percent discount rate: = $600m. The major potential benefit of avoiding the projected collapse of the fisheries would therefore be preserving export revenues with a present value of US$0.4-0.8 billion, depending on the assumptions used. The direct revenues to the fishing communities on the lake, from these export fisheries, are estimated to have a total present value of US$0.2-0.4 billion. These communities would receive additional benefits from two sources: (a) that portion of the value added in processing and packaging which is distributed to them in the form of payments for good and services, estimated to have a present value of US$40-80 million; and (b) income from local production and marketing of fish, estimated to have a present value of US$10-20 million. Moreover, one objective of the LVEMP is to increase the proportion of local food fish in the system and the benefits of the program therefore include a real increase in the local fishery, which would be at least of the same order of magnitude as the loss avoided. The total present value of the impact of the LVEMP on the local fish economy is therefore estimated to be US$20-40 million. On reasonable assumptions, therefore, it is estimated that successful implementation of the LVEMP could protect annual export earnings from the fishery to the extent of about US$128 million per annum, which represents a present value of exports of US$600 million, and of revenue to the lake community of US$240-480 million. In addition, the present value of the local fishery would be increased by US$20-40 million over the case where no action is taken. Reversing the direct loss of revenue would have major impacts through the various industries and activities which support the fishermen active on the lake. It has been estimated that there is a multiplier of about 5 in terms of the numbers of people involved in these supporting activities and therefore half a million people, including workers and their families, would be affected by reversing the loss of revenue. Water hyacinth The spread of the water hyacinth infestation is imposing a wide range of direct costs on the lake community. These costs include: (a) delays in commercial waterborne transport of people and goods (in some cases reported to result in a 10-20 percent increase over scheduled times); (b) increased operating costs (and possible loss of revenue) for hydropower production at Owens Falls Dam, due to clogging of water intakes; (c) loss of fishing time (and revenue) as a result of blocking of the beaches; (d) increased difficulty and time spent on gathering water in villages where access to traditional water collection areas is blocked or dangerous (because of snakes or crocodiles in the weed); and (e) blockage of intakes and loss of production at urban and industrial water supply systems. 18 Grant and Project Summary Some initial estimates have been made for these costs but further data will be required to refine the estimates. It should be noted that these figures represent the present costs: the water hyacinth infestation is increasing at a rapid rate and - unless controlled - will spread and also become more of a problem at existing sites. In the absence of a successful control program, the following are the estimated costs within five years: (a) maintaining a clear passage for ships to dock at Port Bell in Uganda: US$3-5 million p.a.; (b) cleaning intake screens at the Owen Falls hydroelectric power plant at Jinja in Uganda: $1 million p.a.; (c) losses in local fisheries from accumulation of water hyacinth at fishing beaches and landing sites around the lake making it difficult or impossible for fishing boats to be launched or recovered: US$0.2 million p.a. but with a very serious local impact; (d) loss of the beaches as a water supply for domestic, stock and agricultural purposes: US$0.35 million p.a.; (e) loss of supply or increased maintenance costs in urban water supply schemes because of blockages of the water intakes by water hyacinth: US$1.5 million p.a.; and (f) small-scale horticultural irrigation schemes rendered useless because of blockages of channels and pipes with hyacinth: no costs have yet been attributed to these losses but they are important from a distributional viewpoint since such schemes are being developed to help women in the poorer lakeshore areas. The total of these direct costs attributable to the water hyacinth (at its present levels) is estimated to be US$6-10 million p.a., with a present value of US$25-40 million. This figure can be compared with the suggested US$4.5 million cost for the Ugandan government's emergency action program to tackle the problem, which must represent a lower bound to estimates of the damage in what is only part of the total shoreline. Water quality Deteriorating water quality will have a number of direct effects, the avoidance of which can be counted as potential benefits of the programme. These include: (a) additional water treatment costs to deal with increasing levels of algae; (b) impacts on water available for cattle: algal blooms can render water unsuitable for cattle and in extreme cases are known to be fatal to animals; (c) loss of potential tourist revenue: polluted or foul-smelling water would prevent the expansion of the present (low) level of tourism to the lake; and (d) health effects of increased malaria and bilharzia as a result of stagnant and polluted water. The costs of water supply improvements can be calculated once the extent of supply systems round the lake are detailed. As a first estimate, assuming (as before) that one million people are affected, an additional cost of US$1 per capita would mean US$1.5 million p.a. at present, but this would increase as the population connected increased and a value double this would be quite reasonable, i.e. US$3 million p.a. The costs of water for animals is more difficult to estimate but costs of $1 per beast spread over half a million cattle in the vicinity of the lake are plausible. A minimum cost associated with the decline in water quality is therefore estimated at US$3.5 million p.a.,(present value US$15 million) and increasing. Wetlands Given the lack of data on the type and extent of wetlands it is not possible to estimate the value of preserving these systems, but a wide range of functions of wetlands have been identified, both in general and for Lake Victoria in particular. These include: buffering of the impacts of increased loads of nutrients and sediments; breeding areas for fish and animals of value to the local population; protection of local water supply sources; provision of papyrus and other materials of commercial value. Preserving the wetlands is very important for Grant and Project Summary 19 sustaining biodiversity, as well as for helping to maintain the lake as a functioning and stable ecosystem. On the other hand, development of wetlands has been promoted because of their potential for increased agricultural production and because of the perceived health problems associated with wetlands (such as mosquitoes and tsetse fly). Further work is required to understand and quantify the benefits of preserving key components of the existing wetlands systems but the balance of professional opinion, supported by informed local comment, is that the net value of preservation would be high. Biodiversity One objective of the LVEMP is the preservation of the existing richness of the haplochromid fish fauna because of its scientific interest and its role in providing a resilient ecosystem for the whole lake. The ecosystem support benefits are included in the valuation of stabilizing the fisheries, but the intrinsic and scientific value of the biodiversity that is believed to be in the process of continuing reduction under current conditions are additional benefits for which no valuation is yet available. Summary The major direct economic benefit for which the program lays the foundation would be avoidance of the predicted collapse in the fisheries, which is estimated to have a present value to the lake community of US$270-520 million. The water hyacinth problem, which is rapidly becoming more severe, is estimated to have an annual cost of US$6-10 million under current levels of infestation. These costs, whose present value is an estimated US$2540 million, as well as even larger costs which might be associated with increased infestations in the future were nothing to be done, would be largely avoided if the LVEMP were successfully implemented. Deteriorating water quality may impose additional water supply costs which are estimated to be a minimum of US$3.5 million p.a. (present value US$15 million) and would increase considerably without action. Other benefits arising from the preservation of wetlands and of biodiversity have not been valued here. Net Benefits The costs of achieving the benefits identified here will include the direct costs of the LVEMP, which is a regional program, and of national actions which are taken in support of the program. Many of the national expenditures, in particular, will be economically justified in their own right (for example, fisheries post-harvest improvements or provision of sewerage) and so the effect of the LVEMP will be to bring forward in time the net benefits of these programmes. In such cases, the costs and benefits attributable to the LVEMP will be the marginal ones related to the changes in timing or focus of the national programmes. Typical of the projects to be tackled as national concerns, within the framework of the LVEMP, which would be expected to produce net benefits in their own right, and where the costs attributable to the LVEMP may be exceeded by the benefits achieved through bringing the projects forward would be: expansion of artisanal fishing and processing; reduction in post-harvest fish losses; imnplementation of water hyacinth control; wetland conservation; improved pasture management; catchment soil conservation; rural water and sanitation; urban sewerage upgrading; industrial pollution abatement. In so far as these projects can be implemented under existing or proposed programmes and as long as they are economic in their own right, the net costs to the LVEMP will be minimal. 20 Grant and Project Summary Schedule Cl Kenya Lake Victoria Environmental Management Project Summary of Proposed Procurement Arrangements (US$ million) Item ICB NCB Other Total Civil Works 2.8 2.8 GEF (0. 1) (0.1) IDA (2.5) (2.5) Vehicles 2.2 0.1 2.3 GEF (1.0) (0.1) (1.0) IDA (1.0) (1.0) Equipment 3.6 3.6 GEF (1.9) (1.9) IDA (1.4) (1.4) Training 3.4 3.4 GEF (1.4) (1.4) IDA (1.6) (1.6) Consultants 3.7 3.7 GEF (2.2) (2.2) IDA (1.2) (1.2) Operating Costs 11.1 11.1 GEF (4.9) (4.9) IDA (5.1) (5.1) Totals 2.2 2.8 21.9 26.9 GEF (1.0) (0.1) (10.4) (11.5) IDA (1.0) (2.5) (9.3) (12.8) Notes: the difference between the total project costs in each category and the GEF and IDA provisions (in parentheses) would be financed by the Government. Grant and Project Summary 21 Tanzania Lake Victoria Environmental Management Project Summary of Proposed Procurement Arrangements (US$ nillion) Item ICB NCB Other Total Civil Works 1.9 1.9 GEF (0. 1) (0. 1) IDA (1.6) (1.6) Vehicles 1.9 0.1 1.9 GEF (0.8) (0.1) (0.8) IDA (0.9) (0.9) Equipment 2.8 2.8 GEF (1.5) (1.5) IDA (1.0) (1.0) Training 3.4 3.4 GEF (1.6) (1.6) IDA (1.4) (1.4) Consultants 3.7 3.7 GEF (2.3) (2.3) IDA (1.0) (1.0) Operating Costs 8.9 8.9 GEF (4.0) (4.0) IDA (4.1) (4.0) Totals 1.9 1.9 18.8 22.6 GEF (0.8) (0.1) (9.4) (10.3) IDA (0.9) (1.6) (7.6) (10.1) Notes: the difference between the total project costs in each category and the GEF and IDA provisions (in parentheses) would be financed by the Government. 22 Grant and Project Summary Uganda Lake Victoria Environmental Management Project Summary of Proposed Procurement Arrangements (US$ million) Item ICB NCB Other Total Civil Works 2.2 2.2 GEF (0.3) (0.3) IDA (1.8) (1.8) Vehicles 2.5 2.5 GEF (1. 1) (1. 1) IDA (1.1) (1.1) Equipment 3.3 3.3 GEF (1.7) (1.7) IDA (1.3) (1.3) Training 3.2 3.2 GEF (1.3) (1.3) IDA (1.6) (1.6) Consultants 5.2 5.2 GEF (3.5) (3.5) IDA (1.2) (1.2) Operating Costs 11.7 11.7 GEF (5.3) (5.3) IDA (5.1) (5.1) Totals 2.5 2.2 23.4 28.1 GEF (1. 1) (0.3) (11.8) (13.2) IDA (1.1) (1.8) (9.2) (12.1) Notes: the difference between the total project costs in each category and the GEF and IDA provisions (in parentheses) would be financed by the Government. Grant and Project Summary 23 Schedule C2 Summary of Disbursement Schedule Estimated GEF/IDA Disbursements KENYA Category GEF Grant IDA Credit Percent of Financing (US$ m) (US$ m) 1. Civil Works 0.1 1.5 100% of Foreign Expenditures and 90% of Local Expenditures 2. Vehicles and Equipment 2.7 2.2 100% of Foreign Expenditures and 90% of Local Expenditures 3. Consultants & Training 3.3 2.5 100 % 4. Micro-projects 0.7 90 % 5. Operating Costs 4.4 4.6 90 % 6. Unallocated 1.0 1.3 = Total 11.5 12.8 1 TANZANIA Category GEF Grant IDA Credit Percent of Financing |______________ (US$ m) (US$ m) 1. Civil Works 0.1 0.7 100% of Foreign Expenditures l___________________ l__________ land 90% of Local Expenditures 2. Vehicles and Equipment 2.1 1.7 100% of Foreign Expenditures I___________________ = _______I___ and 90% of Local Expenditures 3. Consultants & Training 3.5 2.2 100 % 4. Micro-projects l 0.8 90 % 5. Operating Costs 3.5 3.7 90 % 6. Unallocated 1.1 1.0 Total 10.3 10.1 UGANDA Category GEF Grant IDA Credit Percent of Financing (US$ m) (US$ m) 1. Civil Works 0.3 0.6 100% of Foreign Expenditures and 90% of Local Expenditures 2. Vehicles and Equipment 2.5 2.2 100% of Foreign Expenditures and 90% of Local Expenditures 3. Consultants &Training 4.3 2.5 100 % 4. Micro-projects 1.0 90 % 5. Operating costs 4.8 4.6 90 % 6. Unallocated 1.3 1.2 Total 13.2 12.1 24 Grant and Project Summary Schedule C3 KENYA, TANZANIA, AND UGANDA LAKE VICTORIA ENVIRONMENTAL MANAGEMENT PROJECT Estimated Schedule of Disbursement (GEF and IDA) (US$ million) IDA FY Semester Disbursement Cumulative % Total Disbursement 1997 1 0.0 0.0 0 2 6.8 6.8 10 1998 1 6.8 13.6 19 2 7.2 20.8 30 1999 1 7.2 28.0 40 2 7.6 35.6 51 2000 1 7.6 43.2 62 2 7.1 50.3 72 2001 1 7.1 57.4 82 2 4.8 62.2 89 2002 1 4.8 67.0 96 2 2.0 69.0 99 2003 1 1.0 70.0 100 Grant and Project Summary 25 Schedule D TIMETABLE FOR KEY PROCESSING EVENTS Time taken to prepare: 15 months Prepared by: Project PreparationTeam comprising representatives of the Govermnents of Kenya,Uganda and Tanzania through multidisciplinary Regional Task Forces and National Working Groups. Appraisal mission departure: December 1, 1995 Negotiations: May 20-22, 1996 Planned date of effectiveness November 1, 1996 Relevant ICRs: None This report is based on the findings of an appraisal mission in December 1996. The mission was led by Graeme Donovan, Principal Economist, Agriculture and Environment Operations Division, Eastern Africa Department (Task Manager), and included: Messrs/Mmes. Radha Singh (Institutional Specialist), Robert Hecky (Limnologist), Craig Harris (Sociologist). The mission was assisted by representatives of the UNDP, UNEP and FAO. The mission was assisted by and worked cooperatively with the Heads of the LVEMP National Secretariats of the three countries, the members of the Regional Policy and Steering Committee, the Ministries of Environment and Natural Resources, Water, Agriculture, Fisheries and Finance of the participating countries. The appraisal mission also worked in close cooperation with several specialised agencies in fisheries research, management, aquatic weed control, agriculture, water quality, and wetlands management of the three countries along with representative of the local/regional governments, and NGOs and CBOs responsible for the development of the Project. Valuable contributions were made by Lars Vidaeus and Robin Broadfield (ENVGC) and Les Kaufman(New England Aquarium). Milena Hileman, Lorenzo Marchesini, and Cora Favis assisted with preparing the cost tables. The peer reviewers are Stephen Lintner (ENVLW), Andrew Bond (ENVLW), Robert Robelus (ENVLW), Ernst Lutz (ENVPE), and Cynthia Cook (AF4AE). Dr. Edwin Ongley is the GEF technical reviewer. Sushma Ganguly and James Adams are the Division Chief and Department Director, respectively. 26 Grant and Project Summary Schedule E STATUS OF BANK GROUP OPERATIONS IN KENYA STATEMENT OF BANK LOANS AND IDA CREDITS As of March 31, 1996 (US$ millions) (Less Cancellations) Fiscal Undis- Credit No. Year Purpose Bank IDA bursed Fifty-four (54) loans and sixty seven (67) credits closed, 985.87 1519.23 of which SAL, SECAL or Program Loan/Credit: (60.90) (925.45) Cr.19040 1988 Population 111 12.09 4.90 Cr. 19730 1989 Geothermal Development 40.70 3.00 Cr.20600 1990 Third Nairobi Water Supply 64.80 21.54 Cr.20620 1990 Coffee Improvement II 46.80 15.76 Cr.21110 1990 Population IV 35.00 30.27 Cr.21980 1991 Forestry Development 19.90 10.45 Cr.21990 1991 National Agric. Ext. II 24.90 17.95 Cr.22040 (S) 1991 Agric. Sector Adjustment II 41.52 5.42 Cr.23090 1992 Universities Investment 55.00 46.12 Cr.23 100 1992 Health Rehabilitation 31.00 23.58 Cr.23330 1992 Mombasa and Coastal Water II 43.20 25.35 Cr.23340 1992 Wildlife Services 60.50 26.43 Cr.24400 1993 Parastatal Reform TA 23.32 18.04 Cr.24450 1993 Agric. Sect. Mngt. II 19.40 13.73 Cr.24600 1993 Emergency Drought Recovery 20.00 9.09 Cr.25960 1994 Micro & Small Enterprise 21.83 21.17 Cr.26710 1995 Institutional Development 25.35 22.96 Cr.26860 1995 Sexually Transmitted Infections 40.00 39.38 Cr.27970 * 1996 ARID Lands 22.00 21.58 Cr.28110 * 1996 Urban Transport 115.00 112.41 Cr.28120 * 1996 Nairobi Mombasa Road 5lam 49.57 Total 985.87 2331.54 538.70 of which repaid 733.04 598 Total held by Bank & IDA 252.83 2271.66 Amount sold 11.74 of which repaid 11.74 Total undisbursed 538.70 (S) Indicates SAL/SECAL Loans and Credits. * Not yet effective. Grant and Project Summary 27 Schedule E Kenya STATEMENT OF IFC INVESTMENTS As of March 31, 1996 (In Millions US Dollars) Oriinal Gross Comminmenta Undisb IFC Held by Held by incl Fiscal Years Committed Obligor Type of Business [FC Loan Equity Ptpnt Totals IFC Ptpnt. Ptpnt. 1967/ al Kenya Hotel ProperLies, Ltd Hotels and Tourism 4 20 072 096 5 88 1970fl4177fl9181/88/90/9 Panafrican Paper Mills (E.A) Ltd Timber, Pulp and Paper 5226 579 397 6202 2487 1972 Tourism Promotion Services (Ken Hotels and Tourism 1 63 0 79 2 42 0.04 1976 Rif Valley Textiles Limited (RIV Textiles 6 87 2 77 1 30 10 94 2 06 0 39 1977 al X - Loans to small & medium scal Financial Services 2 00 2 00 1980/84 Development Finance Company o Financial Services 5 07 1.31 6 38 1 31 1981 at Kenya Commercial Finance Cow Financial Services 5 00 5 00 1982 a/ Bambufi Portland Cement Compa Cement and Construction M 4 43 4 43 1982 Diamond Truss of Kenya Limned Financial Services 080 0 80 0.80 1982V87 Industrial Promotion Services (Ke Financial Services 1 17 1.17 1.17 062 1983 a/ Tena Pak Converters Limited Timber, Pulp and Paper 2 17 0 37 2.54 1984/92 Leather Industries of Kenya Limit Manufacturing 212 0 63 2 75 0 63 1986 Equatorial Beach Properties Limit Hotels and Tounsm 3 67 3 67 5 36 1986 a/ Madhupaper Intemational Limited Timber, Pulp and Paper 8 50 1 97 28 65 39 12 1986 a/ Oil Crop Development Limited Food and Agribusiness 9 65 1 40 11 05 1988/92 Likulims Tools Ltd. Motor Vehicles nd Components (includ 0 06 0 06 0.06 1989 Premier Foods Industries Ltd Food nd Agribusiness 0 11 0.11 0.11 1989 al Premier Refrigeration and Engine Food and Agribusiness 0 14 0 14 1990 Frigoken Ltd Food and Agribusiness 0.06 0 06 0.06 1991 Malaa Industries Limited Food and Agnbusiness 053 0 16 069 069 1991 Novaskins Tannery Ltd Manufacturing 0 14 0 14 0 14 1992 a, Integated Wood Complex Limite Timber, Pulp and Paper 0 40 0 40 1992/93 Allpack Indusuies Limited Timber, Pulp and Paper 0 36 0.36 0 36 1993 Futur Hotels Limited Hotels and Tourism 0 50 0 50 0 43 1994 Aura Gamrents Manufacturing Li Textiles 0 30 0 30 0 30 1994 East Africa Reinsurance Company Financial Services 1.10 1 10 I 10 0.30 1994 Mosi Limited Food and Agribusiness 0 29 0 29 0 23 1994 a/ Saw Flom Limited Food and Agnbusiness 032 0 19 051 1994 Waterfont Hospitality Limited Hotels nd Tourism I 00 100 1.00 100 1995 Capital Fish Kenya Limited Food and Agribusiness 065 0.65 0.65 065 1995 Intemational Hotels (Kenya) Limi Hotels and Tourism 6 00 6 00 6 00 4 80 1995 Island Fanm Food and Agribusiness 0 50 0 50 0 50 0 50 1995 Kihingo Roses Limited Food and Agnbusiness 0.52 0 52 0 49 1995 Vegpro Kenya Limited Food and Agribusiness 095 095 095 0 15 1996 ]acartsda Hotel Ltd. Hotels and Tourism 0 50 0 50 0 50 0.50 1996 Magadi Soda Company Limited Chemicals and Petrochemica 9 00 9 00 9 00 8.60 Total gross commitments bh 129 03 19 25 35 67 183 95 Less cancellations, teffninations, epayment & sales 8067 880 35.28 12475 Total commitments now held cl 48 36 10.45 0 39 59 20 58 81 0 39 17 12 28 Grant and Project Summary Kenya STATEMENT OF IFC INVESTMENTS As of March 31,1996 (In Millions US Dollars) Peding Commitnints AEF-K-REP BANK 1.00 100 AlP-XENFUNDS 0.17 017 AlE-KENtOlNDS MGT 0.09 0.09 AEF-WAXATE CENTI 0.43 0.43 0.16 Panafrican PaperMills (A) Ltd. Timber, Pulp and Paper 15.00 15.00 Tol pendingconunitments 15.43 1.69 17.12 Toa commitments held and pending commitments 63.79 12.14 0.39 76.32 Totalundiabuwedcomnitmentu 16.20 0.92 17.12 ae invauemt which have ben fully cancelled, teeminatad, written-off, sold. redeemed or repaid. bt Gre. comnmitments oDns of appoved and signed project c/Held wrmitnmnti consist of disbursed and undisbured investements. Grant and Project Summary 29 KENYA - IMPLEMENTATION ISSUES 1. As of March 31, 1996, there were 21 ongoing projects in the Kenya portfolio representing total commitments, exclusive of cancellations, of $812.3 million; three of these projects (in the amount of $187 million) were approved during the second and third quarters of the fiscal year and are expected to be made effective shortly. Undisbursed amounts totaled $538.7 million, or 66.3 percent of total commitments; excluding the three recently approved projects, the corresponding figure was 56.2 percent. Kenya's disbursement performance over the past few years, as measured by the disbursement ratio, has shown modest improvement - from 14.2 percent in FY93 to 15.4 percent in FY94 to 16.3 percent in FY95. The corresponding figure for the first ten months of the current fiscal year was 16.5 percent; present expectations are that the final FY96 figure will be around 21 percent. In the meantime, as of end-April 1996, eight of the 18 effective and disbursing credits had posted individual disbursement ratios for the fiscal year ranging between 22 and 40 percent. 2. Considerable progress has been made during the past two years in laying the foundation for aggressively addressing a number of generic implementation problems that have negatively impacted on the quality of the Kenya portfolio. In addition to regular project supervision, there has been since early 1994 an interactive dialogue between the Government and the Bank aimed at resolving problems being faced by the portfolio in general. It is explicitly recognized that Government commitment and ownership remain critical to timely and efficient project implementation, including resolution of major implementation problems if and as they arise. The August 1994 CPPR, organized with the active involvement of the Government, effectively initiated an ongoing process in which the Government and Bank staff are jointly addressing a number of "generic implementation bottlenecks" (including inadequate project budgetary allocations, delays in procurement/payment of contractors and suppliers, excessive delays in processing withdrawals and replenishments of the special accounts, and extensive delays in audit report submissions); it is also a process in which the Ministry of Finance (MOF) is playing a greater and more direct role in overseeing and monitoring the portfolio. The August 1994 CPPR was followed by mini-CPPRs in March and July 1995; these were followed by a Project Implementation Workshop conducted over four days in November 1995 to address primarily the operational needs of project managers, accountants and supply officers working on Bank projects. This approach to resolving portfolio- wide implementation problems has been greatly facilitated by the creation in mid-1995 of the multi- sectoral Operations Unit (OU) in the Nairobi Resident Mission, which established capacity for day- to-day dialogue with Government and hands-on implementation assistance. The OU and the MOF now meet once a month to review the status of overall project implementation, to agree on additional steps to be taken with respect to previously identified generic problems, and to identify/resolve any project-specific implementation problems that arise. 3. Results have been encouraging. The Government's recently adopted improved budgetary allocation process which attempts to ensure that all "core" projects are fully funded, resulted in FY96 being the first year in which no projects in the IDA portfolio experienced physical implementation delays due to a lack of adequate budgetary allocations. The Government is currently finalizing the FY97 budget, including provisions for all Government "core" development projects (in the context of the ongoing joint Government/IDA public expenditure review). Sustaining this process of expenditure rationalization should eliminate what, in the past, has been the most serious problem in ensuring timely implementation under the Kenya portfolio. 4. With the exception of projects primarily in the social sector, extensively delayed procurement and improper procurement have not been a major implementation problem in the Kenya portfolio. Excessive delays in the payment of contractors/ suppliers, on the other hand, continue to occasionally surface as a concern, although much improvement has been made in this 30 Grant and Project Summary area during the past year, with significant time reductions being achieved during the past year by the MOF and the Central Bank of Kenya (CBK) in processing PAs (payment authorities) under the special accounts as well as those for direct payments. Attention has more recently focused on individual implementing agencies/line ministries, on identifying the extent to which there may be excessive delays within the respective projects themselves concerning the processing of PAs, i.e., from the time of contractor/supplier invoice received until date PA is received by MOF, and specific actions to reduce such delays. 5. While increased attention is being given to the quality of accounts and how to use them more effectively as a management tool, timely preparation of accounts and timely audit of accounts still remains a problem. (It should be noted, however, that the quality of the audit reports themselves, most of which are done by the public auditor, is not an issue.) Still, the magnitude of the backlog of overdue audit reports is slowly being reduced - as of end-May, under the ongoing portfolio, there were only nine reports more than four months overdue. More reports are being submitted sooner (although still after the respective covenanted due date), in large part due to several ongoing initiatives: (i) the MOF (in particular, the Accountant General) is taking a major role in monitoring and overseeing the audit situation; (ii) there is a working group comprising the public auditor, the MOF and the OU, that, with expert consultant assistance, is developing a strategy and operational action plan to improve the quality and timeliness of accounts and audits; and (iii) the Department has been aggressive and consistent in applying remedies in those instances where audits are not received within a reasonable timeframe after becoming overdue. For example, in FY95, the SOE disbursement procedure was suspended under seven projects, total disbursements suspended under three projects and proposed amendment of legal documents has been conditional upon the receipt of any overdue audit reports under the respective project. At present, Board presentation is being made conditional upon receipt of all overdue audit reports for which the concerned accounts are the direct responsibility of the implementing agencies/line ministries under the proposed project. 6. As a result of these efforts, overall improvement in IDA's Kenya portfolio quality is being achieved. As of March 31, 1996, four of the 21 projects in the Kenya portfolio (or 19 percent) were rated "problem"; this compares with 33.3 percent (i.e., eight projects) for FY95 and 38.5 percent (i.e., ten projects) for FY94. These four problem projects are briefly discussed below: Cr. 2110-KE (Fourth Population). Almost six years old and with 80 percent of credit proceeds remaining undisbursed, agreement would be reached with the Government during the next "health mission" on bringing this project to closure by its June 30, 1997 closing date. Implementation progress to-date has been extremely disappointing, despite a restructuring of this project in October 1993 to finance the purchase of drugs for the prevention of sexually transmitted infections (in addition to the project's main objective of increasing the availability, accessibility and quality of family planning services provided by the Government and NGOs). Major problems in procurement, due mainly to weaknesses in the tendering system of the Ministry of Health (MOH) and to irregularities and lapses in strictly adhering to IDA's procurement guidelines, remain - at the Bank's insistence, the Government has recently agreed to the hiring of a procurement agent for all ongoing projects involving this ministry. Cr. 2440-KE (Parastatal Reform and Privatization TA). Originally intended as the engine for parastatal reform and privatization, the project's objectives and policy/implementation timetable as originally agreed have not been achieved. However, with the policy agenda for parastatal reform and privatization clearly defined under the recently agreed Policy Framework Policy for 1996-98 and the recently approved Structural Adjustment Credit, this project is now being formally restructured to support the reform implementation program set forth therein. Within this restructured project framework, implementation status would be re-evaluated later this year. Grant and Project Summary 31 Cr. 2199-KE (Second National Agricultural Extension). Over five years old, with 70 percent of credit proceeds undisbursed and with disbursements under the credit recently suspended for noncompliance with audit covenants (i.e., outstanding SOE and project accounts audit reports more than 12 months overdue), this project is not expected to be completed by its closing date of March 31,1998. By the end of September, the Bank and the Government would agree on a specific implementation program through end-June 1997 and reconfirm project outcomes/identify specific outputs to be achieved at the end of that period. Satisfactory resolution of outstanding audit and financial management issues related to the project, including the lifting of the suspension of disbursements, is critical to project implementation during the next fiscal year. Implementation progress during the next year will form the basis for proceeding with the project beyond end-FY97. Cr. 2596-KE (Micro and Small Enterprise Training and Technology). Although the project implementation team is now finally in place (in February, almost two years after the project was approved) and a detailed implementation program agreed through the end of the year, it has been rated unsatisfactory until implementation progress is demonstrated. During the next nine months, supervision efforts will be intense, focusing closely on Government's commitment (i.e., actions) to improving the enabling environment for the jua kali (small enterprise) sector. 7. In addition to the above four rated "problem" projects, another four ongoing IDA projects are currently classified as slow disbursing operations, i.e., with disbursement lags of 50 percent or more (there are no operations approved by the Board more than one year ago but not yet declared effective, nor are there any over- aged operations - the Second Agricultural Sector Adjustrnent Operation, Cr. 2204-KE, although under implementation for slightly more than five years, had a significant technical assistance component and will close on June 30,1996): Cr. 2309-KE (Universities Investment). Four-and-a-half years old and originally scheduled to close at end-1996, expenditures under this project are mostly for staff development and procurement of highly specialized equipment, mainly for science and engineering. Staff development has proceeded as intended. However, due to flawed application of procurement procedures during the early years of the project, equipment procurement had to be retendered, and the first fourteen equipment contracts were awarded only in the second half of 1995 - as such, 75 percent of credit proceeds are currently undisbursed. However, remaining Phase 1 and Phase 2 equipment tenders are to be advertised and awarded in 1996, and past procurement problems are not expected to reoccur. A one-year extension of the closing date was recently approved, and completion of the project by that date is now anticipated. Cr. 2310-KE (Health Rehabilitation). Extensive delay in initiating the civil works for rehabilitation of Kenyatta National Hospital, which accounts for approximately 70 percent of credit proceeds under the project, is the primary reason for the current 70 percent disbursement lag. Commencement of this civil works component finally began in mid-1995, and this work is scheduled for completion by end-1996. No extension of the June 30, 1997 closing date is anticipated, and the next supervision mission will confirm with the Government, necessary arrangements for bringing the project to closure by that date. Cr. 2333-KE (Second Mombasa and Coastal Water). Approved in February 1992, project implementation is about 15 months behind schedule, thus explaining the current disbursement lag of slightly more than 50 percent. Start-up was initially slow due to institutional weaknesses in the National Water Conservation and Pipeline Corporation (NWCPC - the implementing agency) and delays in the selection of consultants. These initial delays were then followed by inadequate budgetary allocations (IDA proceeds as well as counterpart funding) in fiscal years 1993-95, resulting in further delays in physical implementation. This situation was further compounded by a seven-months' suspension of 32 Grant and Project Summary disbursements in 1995 by the Bank, for failure by NWCPC to timely submit to the Bank a number of audit reports required under the project. However, with adequate budgetary allocations having been provided in FY96 (and a respective disbursement ratio of 40 percent for the year as of end-May), the project is expected to be completed by June 30,1997- one year later than originally scheduled. A one- year extension of the closing date would be agreed by the Bank, upon confirmation by the Government that adequate project funding has been provided in the FY97 budget to ensure that the FY97 workplan can be timely implemented. Cr. 2686-KE (Sexually Transmitted Infections). An overoptimistic disbursement profile for the first (as well as second) year of project implementation, as assumed in the Staff Appraisal Report, compounded by delays in the establishment of a funding mechanism, acceptable to the Government, for disbursing credit proceeds to the participating NGOs and municipalities, explain the current disbursement lag of almost 80 percent A task force comprising the MOH, MOF and the Bank is presently working on resolving this bottleneck. There have also been delays in the appointment of a procurement agent to carry out all procurement under the project; it is expected that a contract will be signed by early July 1996. However, even with implementation expected to proceed shortly, as originally envisaged, the original disbursement projections will continue to be reflected in a relatively high disbursement lag during the next two-to-three years. Grant and Project Summary 33 STATUS OF BANK GROUP OPERATIONS IN TANZANIA STATEMENT OF BANK LOANS AND IDA CREDITS As of March 31, 1996 (US$ millions) (Less Cancellations) Loan or Fiscal Undis- Credit No. Year Borrower Purpose Bank IDA bursed Twenty-seven (27) Loans and seventy five (75) Credits closed, 355.55 1,637.91 of which SECALS, SALs and Program Loans/Credits: (795.42) Cr. 18910 1988 Tanzania Agr. Exports Reh. l 30.00 11.79 Cr. 19700 1989 Tanzania Nat'l. Ag. & Liv. Res. 8.30 3.05 Cr. 19940 1989 Tanzania Agric. Ext. 18.40 2.50 Cr. 20500 1989 Tanzania Tree Crops 25.10 8.91 Cr. 20950 1990 Tanzania Ports Modernization 37.00 16.70 Cr. 20980 1990 Tanzania Health & Nutrition 47.60 30.81 Cr. 21370 1990 Tanzania Educ. Planning & Rehab. 38.30 23.80 Cr. 21490 1990 Tanzania Roads 1 180.40 68.59 Cr. 22020 1991 Tanzania Petrol Rehab 44.00 44.88 Cr. 22670 1991 Tanzania Railways Restructuring 76.00 59.66 Cr. 22910 1992 Tanzania Urban Sector Eng. 11.20 2.30 Cr. 23300 1992 Tanzania Engineering Credit 10.00 0.59 Cr. 23350 1992 Tanzania Forest Resources Man 18.30 10.43 Cr. 24130 1993 Tanzania Financial & Legal Ma 20.00 12.50 Cr. 24860 1993 Tanzania Telecom III 74.45 66.60 Cr. 24890 1993 Tanzania Power VI 200.00 133.43 Cr. 25070 1993 Tanzania Priv. Pub. Sect. Mgt. 34.90 22.50 Cr. 25370 1994 Tanzania ASMP 24.50 16.38 Cr. 25980 1994 Tanzania Roads 11 170.20 165.28 Cr. 26480 1995 Tanzania Mineral Sector Dev. 12.50 10.97 Cr. 27710 1996 Tanzania Financial Inst. Dev. 109 I0 Total 355.55 2729.96 722.60 of which repaid 296.91 89.21 Total held by Bank & IDA 58.64 2640.75 Amount sold 6.29 of which repaid 6.29 Total Undisbursed 722.60 34 Grant and Project Summary Tanzania STATEMENT OF IFC INVESTMENTS As of March 31,1996 (In Millions US Dollars) Ori2inal Gross Commitments IFC Fiscal Years Committed Obligor Type of Business IFC Loan Equity Ptpnt. Totals 1960 a/ Kilombero Sugar Company, Ltd. Food and Agribusiness 4.66 4.66 1978 a/ Highland Soap and Allied Product Manufacturing 1.38 0.37 1.75 1979 a/ Metal Products Limited Manufacturing 1.33 0.18 1.51 1985 a/ Amboni Limited Food and Agribusiness 4.38 0.99 5.37 1990 Tanganyika Sisal Spirning Comp Food and Agribusiness 2.00 2.00 1991 Mufindi Tea Company Limited Food and Agribusiness 2.80 2.80 1994 Nomad Safaris (Tanzania) Limite Hotels and Tourism 0.15 0.15 1994 Tanganyika Bus Services Compan Industrial and Consumer Ser 0.25 0.25 1994 Tourism Promotion Services (Tan Hotels and Tourism 8.04 1.06 9.10 1995 Eurafrican Bank (Tanzania) Limit Financial Services 0.73 0.73 1995 Moshi Leather Industries Limited Manufacturing 0.25 0.25 1995 RafTia Bags Tanzania Limited Manufacturing 0.50 0.50 1995 Tanzania Breeders and Feedmills Food and Agribusiness 1.00 1.00 1995 Tanzania Breiwries Limited Food and Agribusiness 11.00 6.00 7.40 24.40 1995 Tanzania Leatherlndustries Ltd. Manufacturing 1.00 1.00 1995 Tourism Promotion Services (Zan Hotels and Tourism 1.25 0.16 1.41 1996 MIC Tanzania Ltd. Infrastructure 1.00 1.00 Total gross commitments bt 40.74 8.75 8.39 57.88 Less cancellations, terminations, repayment & sales 14.52 0.55 0.99 16.06 Total commitments now held ct 26.22 8.20 7.40 41.82 Pending Commitments A&K TANZANIA LTD 0.45 0.45 AEF-ONE EARTH 0.70 0.70 AEF-TRADECO 0.93 0.93 AEF-ZAINAB GRAIN 1.00 1.00 Eurafrican Bank (Tanzania) Limit Financial Services 5.00 5.00 ULC LEASING 5.00 0.97 5.97 Total pending commitments 8.08 0.97 5.00 14.05 Total commitments held and pendingcommitments 34.30 9.17 12.40 55.87 Total undisbursed commitments 14.36 0.25 7.40 22.01 at Investments which have been fully cancelled, terminated, written-off, sold, redeemed or repaid. b Gross commitments consist of approved and signed projects. ct Held commitments consist of disbursed and undisbursed investements. Grant and Project Summary 35 TANZANIA - IMPLEMENTATION ISSUES 1. As of March 31, 1995, there were 21 ongoing projects in the Tanzania portfolio representing total commitments of US$1.1 billion. Undisbursed amounts totaled $723 million. Disbursements on investment projects have risen from US$75 million in FY93 to US$119 million in FY95. However, the disbursement ratio has not increased owing to the relatively large commitments on investment loans in FY93 and FY94. Because of no new adjustment lending due to the inadequate macroeconomic environment, disbursements for the balance of payments support were minimal in FY95. 2. Efforts were made to improve the management of IDA's portfolio in Tanzania. Three problem projects have been restructured, and mid-term reviews have been carried out for six projects. Several former problem projects are now rated as satisfactory (e.g. Health and Nutrition, Tree Crops, and Petroleum Rehabilitation). At present, there are five projects rated unsatisfactory: Education Planning, Roads I and II, Parastatal and Public Sector Reform Project and Agriculture Exports Rehabilitation Project. The AERP is being closed on June 30, 1996. A CPPR was held in May 1996, and a joint action program was agreed to help resolve generic implementation issues (e.g. availability of counterpart funds, project management staff and incentives, and accounts/auditing). 3. On audit compliance, some progress has been made in reducing the number and length of delayed audit reports. Following a firm stance, audit compliance improved, and audits that were particularly delayed were submitted. 4. Inadequate provision of counterpart funds has affected IDA-financed projects particularly in agriculture, roads and education. Given the continuing weak fiscal situation, the inadequacy of counterpart funds needs to be addressed by reducing the development project portfolio and focusing on high priority activities. IDA has assisted the Government in defining a core investment program, limited to high-priority projects which would get most of their funding requirements. The Government has made some progress in reducing the number of projects in the development budget and improving the budgetary allocation towards core projects. However, this approach has not been sufficient to ensure adequate levels of counterpart funding owing to the severity of the budget crisis. 5. An important area of work in improving the portfolio has been the incorporation of the findings from consultations with beneficiaries of IDA projects. For example, supervision of the research and extension projects has taken place in the framework of the Farming Systems Approach, involving researchers, extensionists, and farmers in joining identification of improvements in the design and implementation of research and extension activities. The efforts to restructure the health and education projects, and to redirect a portion of funds to support new approaches to the social sectors, were based on surveys of both individual and focus groups over the past year. To improve overall implementation, a study has been done to address procurement issues, under the Integrated Roads Project, which include changes in the procurement code, regulations and standard bidding documents. The study is currently being reviewed by the Government and IDA for follow up action. A country Procurement Assessment is planned for June/July 1996. 6. Five IDA projects are identified as slow disbursing operations with disbursement lags of about 50% or more: Health and Nutrition, Education Planning and Rehabilitation, Railways Restructuring, Roads II and Petroleum Sector Rehabilitation. 36 Grant and Project Summary 7. Tanzania Health and Nutrition Project was slow to start and consequently suffered from management problems in the first three years of its implementation. These initial problems were addressed by setting up project management offices for each of the two main components. However, since the project was managed by different ministries with project coordination offices in two different cities, the management problems continued to plague the project as it was difficult to coordinate their activities. This particular problem has now been solved by locating both offices in Dar Es Salaam. In addition, the project was also affected by the Government's inability to meet covenants which were tied to major activities such as rehabilitation works and pharmaceuticals. The project has now been restructured and is also supporting pilot-testing of innovative mechanisms of services delivery, e.g. community health trusts and facility-based management. 8. The implementation of Petroleum Sector Rehabilitation has been behind schedule by two years mainly due to the delay in the credit effectiveness (18 months), for which the major issues have now been resolved. The project restructuring was completed in November 1994. As for the issue of losses of petroleum products on transit by rail, the consultant study has been completed and an agreement was reached on the recommendations of the study. An action plan for the railway to establish common-carrier liability tariffs has been in progress. 9. The Education Planning and Rehabilitation Project suffered a slow start largely due to: (a) the complexity of the project design and management; (b) the changing policy environment; and (c) disagreements on the continued relevance of some components. The disbursements increasingly lagged behind during the first three years. However, several measures have now been taken to improve the situation. The project management has been strengthened by the recruitment of accounting specialists; plans for improved implementation and restructuring have been agreed and a number of concrete actions have been taken; communication with the Bank has now improved; and part of the undisbursed balance is being used to finance pilot activities in demand-side activities. As a result of these actions, activities and the pace of disbursements have picked up again, and the project performance will further improve during the remaining period of the project. 10. The Railway Restructuring Project had a slow start in disbursements, mainly due to the learning curve which the executing agency, TRC, had to go through. The pace picked up since July 1995, and the disbursements are expected to improve. 11. Implementation of Roads II project has been delayed, first by the delay in effectiveness (about 5 months) and second due to problems of counterpart funds and management weaknesses. To address these issues the Government has agreed to engage a project management consultant to review management systems and procedures, determine the physical and financial status of the projects (including that of the ongoing Roads I) and prioritize the outstanding activities. Pending completion of this exercise and agreement on improved management arrangements and systems the Government will not enter into new civil works contracts for IDA financing. As a result, disbursements are expected to remain slow for one to one and half years. Despite these problems, progress has been achieved in (i) improving both the level and rate of transfer of maintenance funds to the Regional Engineers' Offices; (ii) completing the transport sector administration studies which is providing the basis for restructuring the sector; and (iii) defining an action plan for restructuring road transport companies. Grunt and Project Summary 37 Scheduk E STATUS OF BANK GROUP OPERATIONS IN UGANDA STATEMENT OF BANK LOANS AND IDA CREDITS As of March 31, 1996 (US$ millions) (Less Cancellations) Loan or Fiscal Undis- Credit No. Year Borrower Purpose Bank IDA bursed Nine (9) Loans and forty eight (48) Credits closed, 42.92 1257.92 10.19 of which SECALs, SALs and Program Loans/Credits: (652.78) Cr.21240 1990 Uganda Water Supply II 60.00 40.65 Cr.21760 1991 Uganda Livestock 21.00 13.86 Cr.21900 (S) 1991 Uganda Ag. Sector Adj. Credit 100.00 4.80 Cr.22060 1991 Uganda Urban 1 28.70 14.18 Cr.22680 1991 Uganda Power III 125.00 81.51 Cr.23150 1992 Uganda Enterprise Development 41.85 32.76 Cr.23620 1992 Uganda Northem Reconstruct. 71.20 40.75 Cr.24180 1993 Uganda Econ. & Financial Management 29.00 7.64 Cr.24240 1993 Uganda Agric. Extension Prog. 15.79 7.02 Cr.24460 1993 Uganda Agric. Res. & Trg. 25.04 15.30 Cr.24930 1993 Uganda Primary Educ. 52.60 39.41 Cr.24960 (S) 1993 Uganda Financial Sector Adjustment Cr. 100.00 51.83 Cr.25830 1994 Uganda Small Towns Water 42.30 41.66 Cr.25870 1994 Uganda Transport Rehab. 75.00 76.12 Cr.26030 1994 Uganda Sexual Trans. Infections 50.00 49.41 Cr.26090 1994 Uganda Cotton Sector Development 14.00 12.00 Cr.26790 1995 Uganda District Health 45.00 44.25 Cr.27360 1995 Inst. Capacity Building 36.40 35.07 Cr.27770 1996 Environment Management 11.80 10.93 Cr.27980 1996 Private Sector Comp. 12.30 12.10 Total 42.92 2214.90 631.25 of which repaid 42.92 52.27 Total held by Bank & IDA 0.00 2162.63 Amount sold 25.82 of which repaid 25.82 TOTAL Undisbursed 641.44 (S) Indicates SAL/SECAL or Program Loan/Credit 38 Grant and Project Summary Uganda STATEMENT OF IFC INVESTMENTS As of March 31,1996 (In Millions US Dollars) OriinaEl Gia. Commiments Undisb IFC Held by Held by incl. Fical Years Committed Oblirgo Type of Business IFC Loan Equity Ptpnt. Totals IFC Ptpnt. Ptpnt. 1965 a/ MulcoTextiles, Ltd. Textiles 2.26 0.54 0.70 3.50 1972 s/ Tourism Promotion Service (Ugm Hotels and Tourism 0.73 0.38 1.11 19U4 Sugar Corporation of Uganda Lim Food ad Agribusiness 8.00 8.00 6.00 19U4 a TheToro andMityanaTea Comp Food and Agribusiness 1.12 0.50 1.62 1985 a/ UgandaTea Corpomtion Limited Food and Agribusiness 2.81 2.81 1985/93 Development Finance Company o Financial Services 0.98 0.98 0.98 1993 Clovergem Fish and Foods Limite Food and Agribusiness 0.85 0.85 0.78 1993 JubileelnsurnceCompanyUgan FinancialServices 0.10 0.10 0.10 1993 &I Nge-ge Limited Food and Agribusines 0.65 0.65 1993 Nile Roses Ltd. Food and Agribusiness 0.30 0.30 0.26 1994 RwenzoriPtopertiesLimited IndutrislandConsumerSer 081 0.19 1.00 1.00 0.05 1994 SkyblueApart-Hotel Hotels ad Tourism 0.51 0.51 0.51 0.51 1995 Cloveegem Celtel Limited Infrastructure 4.96 0.64 5.60 5.60 1.20 1995 Polypack Limited Manufacturing 1.00 1.00 1.00 1995 Rainbow Internationa School Ka Industrial nd Consumer Ser 0.79 0.79 079 0.31 1995 Uganda Lesing Company Limite Financial Services 0.33 0.33 0.33 Totidgrosscommitments b/ 2479 2.78 1.58 29.15 Lea cancellations, terminations, repayment & sales 9.68 0.54 1.58 11.80 Total commitsnmts now held et 15.11 2.24 17 35 17.35 2.07 Pending Commitmnents AEF GOVINDA KEWU 0.23 0.23 AEF-AGRO MGMT 0.60 0.40 1.00 EAGW 6.50 6.50 Total pending commitments 7.33 0.40 7.73 Total commitments held and pending commitments 22.44 2.64 25.08 Total undisburwcd commitments 2.07 2.07 It Inveatmentu which have been fully cancelled, terminated, written-off, sold, redeemed or repaid. b/ Grae commitments consist of pproved and signed projets. c/ Held commitmentts consist of disbursed and undisbursed investements. Grant and Project Summary 39 Uganda: Implementation Issues 1. The IDA portfolio for Uganda as of March 31, 1996 consists of 20 projects, with a total commitment of about US$957 million, with an undisbursed amount of about US$631 million. The portfolio showed improvement in FY95, largely as a result of intensified effort by GOU and Bank staff to remove the obstacles to project implementation. Disbursements have increased steadily in recent years from US$135 million in FY1993, US$165 million in FY94 to US$193 million in FY95 and as of March 31, 1996, $133 million has already been disbursed. 2. IDA's Uganda portfolio showed solid improvement in FY95, thereby continuing the trend of the last few years. This is a real improvement and does not represent any relaxation in ratings: in fact, task managers and country teams have become more rigorous in assessing project performance in the past couple of years. It is the result of an intensified effort to resolve some of the obstacles to project implementation and therefore to get better results in the field. 3. On slow disbursing operations, the Second Water Supply Project, FY90, has only disbursed 38% of the US$60 million Credit; the procurement process for major civil works under the project was delayed as the procurement documentation had to be revised in order to comply with Bank procurement guidelines and procedures. In addition, procurement of major works for the Kampala sewerage system was postponed in order to gather more information before International Competitive Bidding was instituted. Although construction activities under three of the four civil works contracts have gained momentum, progress is still slow. However, the project's implementation performance has now become satisfactory, and the project meets its development objectives in many respects. 4. On the Transportation Rehabilitation Project, there was a 15-month delay in procurement activities/selection of consultants related to the main roads component (a major component of this project), primarily due to lack of familiarity (and therefore non- compliance) with Bank procurement procedures, on the part of project staff. In addition, there is a cost overrun (above the appraisal estimate) of about US$13 million (or 17% of IDA financed portion of the project), for the three main roads contracts. However, the Borrower has been asked to propose a solution, which may call for restructuring or cancellation of some of the lesser priority components at mid-term review, early next year (1997). Training of Borrower staff in contract administration and procurement is being undertaken, with a view to enhancing their skills. Additionally, a twinning arrangement with the Finland Road Authority is being put in place. At this time, steps have been taken to resolve the major procurement issues and the project's disbursement performance is expected to improve over the next few months. 5. The Power III Project has disbursed some 32% of the US$ 125 million (SDR 86.9 million) Credit. Project effectiveness was delayed by about one year to October 1992, as a result of delays in fulfilling the Conditions of Effectiveness. Thereafter, delays in meeting disbursement conditionality has contributed to the slow disbursements under the project. In order to ensure that the over 40 year old existing dam is adequately investigated and strengthened, the project provides for IDA financing to be initially limited to only the advance payment to the main civil work contract -which has been done- and withholding further disbursements until an adequate work program and associated bidding documents required to ensure the safety of the dam have been produced. This work program and the associated bidding documents are planned to be completed by mid-1996; meanwhile the African 40 Grant and Project Summary Development Bank has been disbursing alone to avoid disruption of construction of the Owen Falls Extension Project. 6. The effectiveness of Livestock Services Project was delayed because of complexities in project design. Implementation was also affected by the reorganization of the Ministry of Agriculture, Animal Industry, and Fisheries, which included the consolidation of crop and livestock extension, and subsequently the Government's decentralization program, involving a transfer of responsibilities to districts. Because of slow progress from that point, the project was classified as non-core for FY94 and received no budget funds. The project was then restructured and progress has been satisfactory since the restructuring was put into effect. 7. On Sexually Transmitted Infections Project, the disbursement lag was due to problems experienced in procurement. The bulk of the project finances drugs and condoms and since the credit became effective in July 1994, the Ministry of Health has been struggling to procure drugs and condoms. The problems are already being addressed; a team of Ugandan officials visited Washington in January to discuss outstanding issues on the number of tenders which were under review and to clarify IDA procurement rules. IDA is also making arrangements to provide them with a pharmaceutical procurement expert to help prepare procurement for the next two years. 8. The District Health Project became effective in July, 1995. This project supports delivery of health services with the Districts taking more direct responsibility for service management. This is in line with the Government's decentralization policy. Actual implementation of the project was delayed by the need to prepare districts to take on new responsibilities. The time required for strengthening the capacity of the districts to plan and manage their resources was underestimated. It has taken much longer to put in place accounting and management systems. It was assumed that the districts would be able to prepare good workable budget plans as a basis of their implementation by July, 1995 but was only submitted in December 1995. Implementation has now started and disbursement performance is expected to pick up. 9. The Small Towns Water and Sanitation Project was approved by the Board in February 1994, but did not become effective until August 1995 after changing the one remaining condition of effectiveness into a condition of disbursement. Project implementation started only in November/December 1995 after the conditions of disbursement were met. This amounted to a 17-month delay in getting started especially because of delays in establishing the legal framework for the water committees, and settlement by the Government of all its overdue debts to NWSC. In this interval, considerable start-up work was nevertheless carried out in the form of pilot activities in two of the 10 towns, funded through the remaining portions of PPF, a Japanese PHRD Grant, and a component of the First Urban Project. The implementation is now proceeding rapidly, with consulting firms for both major project components in place and tendering for a number of other items in progress. The Project Launch Workshop was held in March 1996. 10. Institutional Capacity Building Project was approved by the Board in June 1995 and became effective in August 1995. There were initial delays in procurement process. Actions to initiate procurement of goods and consultancy services have now been undertaken and are expected to redress the disbursement lag. 91e F Kenya at a glance Sub. POVERTY and SOCIAL Saharan Low. Kenya Afuica Income Dwelopment dIlmondd Poputin nid-1994 (milions) 20.0 572 3,182 LHe expectancy GNP per capIta 1994 (USS) 260 500 390 GNP 1994 (bftons US$) 6.6 286 1,241 Average annual growth, 1S0-94 Populton (X) 2.7 2.7 1.8 GNP G3ross Lab force (%) 3.4 2.8 1.9 per pln wy Moat recentesttmate flatyesravail sloe n 198) capiba enrolknnt Poverty: headcount index (t ofpopulatton) 37 Urban population (X ofota popWulason) 28 31 28 Ute expecy at birth (yars) 59 52 83 Inftamort lltyr 1,000 Ive biths) 58 92 68 Child mabiutrton (X of chgdren under 6) 23 38 AcoosS to sot wabAr Access to "et water (% odpopul aon) 67 Illiteracy (% opopulaton ag 15+) 22 35 Gro-s primary enrollment (% ofschoo popslon) 91 71 105 - Kenya Moleb 92 77 112 -Low-/nce group Female 91 64 98 KEY ECONOMIC RATIOS ens LONG-TERM TRENOS 1978 1981 1994 1995 Economic ra_oe GDP (biWon US$) 3.3 6.1 8.9 7.9 Gross doneic hIvealmwGDP 18.1 28.0 20.9 22.9 Opennes of economy Exports of goods and nonfadora svl GDP 29.8 25.3 38.6 37.0 Gmoa domestic avingslGDP 13.5 24.9 23.7 21.7 Grosa natlonal avngaGDP 9.2 22.6 20.4 18.7 Current account b&WxeGDP -8.6 -7.0 -0.4 -4.2 Savings Invesbiwnt Interest pymentWGOP 1.4 2.7 4.3 Total debtUGDP 39.6 68.1 106.0 Total debt wrvie/exports 14.9 39.2 33.3 Prew ntvaue of debt/GDP 75.1 Indebbdnes Pre entvalue of debtlexports 193.3 197544 1988-" 1994 1996 1996.04 (average annual growh) -Kenya GDPmp 4.8 3.3 3.9 5.0 5.3 -Low-ncome group GNPpercapfa 1.1 0.1 3.1 3.7 2.9 Exports of goods nd nfa 0.3 5.1 -1.3 7.5 3.5 STRUCTURE of the ECONOMY 1976 1986 1994 1995 of GDP) Agriculture 34.2 32.5 29.1 Or o .dpd hI Indusry 20.2 19.1 17.4 o. Manufacturing 12.0 11.7 10.5 o _ Sevce 45.6 48.4 53.5 .o " a -20. Privateconsumption 68.2 57.6 81.5 61.8 Genal govement consumptlon 18.3 17.5 14.7 16.8 -GOt -*-01P Imports of goods end non-feator servIks 34.5 28.4 35.7 38.2 1976-84 198646 1SS4 1998 (avesge annual gmwth) Agreufture 3.8 1.7 3.1 r a oxporm ad IWIo ('A Indu"ry 4.8 3.5 2.0 r Manufacturing 6.3 4.3 1.9 0 A ServIces 6.0 4.3 3.3 ./ Prhite consumpton 3.3 3.6 10.3 0.7 s o a General goverment eonsumptbon 4.3 5.5 8.6 10.3 15 Groas domec nvewnt 1.8 0.4 18.7 10.9 Imports of goods wnd non-fadtor evce -3.7 4.7 30.3 5.3 -EpCpts him Gross naonal product 5.0 3.0 5.8 6.4 Note: 1995 data we prelimiry estknats. Fge in Iakics am for ya other than tho epoclld. The diamond show forw key Indeo in hthe country (in bold) compared with i Income-group average. if daae amisf g, the dimond wv be Inomplete. Schduh F Kenya PRICES and GOVERNMENT FINANCE 1975 1985 1994 1995 |Infation(%J DomesUic prkces (% change) 5C Consumer pries (Ave. Nairobi CPI) 19.1 10.7 28.8 1.7 40 Implicit GOP deflator 11.3 8.2 15.7 0.9 30 20 Government finnce (in fiscal years) 1974/75 1984/85 1993/94 1994/95 10 (% of GDP) 0 90 91 92 93 94 9f Current revenue .. 21.6 29.2 31.7 Current budget balance . -0.8 -1.0 5.2 -GOPdef. -CPI Overall surplusidefcit (on commitment basis .. -7.5 -8.0 -2.6 and exd. grants) TRADE (millions US$) 11975 1985 1994 1995 Export and Import levels (mill. US$) Total exports (fob) .. 940 1,482 1,783 3 Fuel .. 118 65 73 Coffee .. 281 233 302 2.500 Manufactures .. 117 159 184 2.000 Total Imports (cif) 1,486 2,04 2,606 1.0. Food .. 112 180 205 100 41b-IIEII-lIl Fuel and energy .. 461 332 329 5- o, i 11 111ll Capital goods 340 503 578 0 [ V IIi-i L Exportprlcelndex(1987=100) .. 90 122 .9 90 91 92 93 94 99 Import price Index (1987=100) .. 81 77 | lExports mlmports Termsoftrade(1987=100) .. 111 157 BALANCE of PAYMENTS 1975 1985 1994 1995 r- (millions USS) Exports of goods and non-factor services 955 1,552 2,645 2,954 | 6 rrnt account balance to GOP ratio (%i Imports of goods and non-factor services 1,131 1,850 2,448 3,053 Resource balance -176 -297 197 -99 0 e9 Net factor income -93 -213 -374 -365 I I I Net current transfers -13 81 148 128 -, -J Current account balance, t9 before offricial transfers -281 -429 -30 -336 Financhig iems (net) 244 397 134 203 .10 Changesinnet reserves 38 33 -104 133 .121 Memo: __ Reserves Including gold (miLt. US$) 173 417 625 453 Converslon rate (1ocakVS$) 7.3 16.4 56.1 51.0 EXTERNAL DEST and RESOURCE FLOWS 1975 1985 1993 1994 (millions USS) Totaldebtoutstanding and disbursed 1,290 4,178 7,120 7,273 IBRD 106 751 566 501 Compositlon of total debt, 1954 (mnIll. US$) IDA 81 408 1,631 1,789 Total debt service 151 621 627 888 IBRD 6 85 156 155 G A IDA 1 5 19 21 e88 501 Compositin of net resource flows 127| 1789 Offlclal grants 31 195 292 311 c Offlcial creditors 87 135 142 66 0E Private credKtors 33 8 -37 -276 2151 483 Foreign dect investment 17 18 2 4 Portfolio equity 0 0 0 0 Wotrd Bank program I Commitments 219 6 92 64 A-IBRD E - Bilateral Disbursements 51 113 226 97 8 -IDA D-Ov99rmufndateral F-Priate* Prlncipalrepayments 1 35 108 115 C-IMF G-Short-term Notflows 50 77 119 -18 Interest payments 6 55 67 62 Nat transfers 44 22 52 -79 Intenational Economics Departnent 4/24/96 Note: Govemment fiscal year (July to June). B@hdulb r P2d 3of Tanzania at a glance Sub- POVERTY and SOCIAL Saharmn Low- Tanzania Africa Income Development diamond' Population mid-1994 (millions) 28.8 565 3,176 Lif expetancy GNP per capRa 1994 (USS) .. 510 390 GNP 1994 (billions US$) .. 288 1,239 Average annual growth, 1990-94 Population (%) 2.9 2.9 1.8 Labor force(%) 3.0 2.7 1.8 GNP Gross per primary Most recent esUmate (latest year available since 1989) capita enrollment Poverty: headcount Index (% of populatfon) 50 Urban population (X of total population) 23 28 26 Life expectancy at birth (years) 52 52 65 Infant mortality (per 1,000 live births) 84 94 53 Child malnutriton (% of children under 5) 28 38 Access to safe water Access to safe water (% of populas0on) 52 .. 67 Illiteracy (% ofpopulation age 15+) 32 50 41 Gross primary enrollment (% of school-age populalion) 68 68 106 -Tanzania Male 69 77 112 Low-income group Female 67 62 100 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1975 1985 1994 1996 Economic raoS' GDP (billions USS) .. 5.5 3.4 3.7 Gross domeatlc Investment/GDP .. 17.7 31.3 31.0 Openness of economy Exports of goods and non-factor services/GDP .. 7.7 23.8 28.0 Gross domestic savings/GDP .. 8.7 3.3 4.7 Gross national savings/GDP .. 9.8 12.0 9.1 Current account balance/GDP .. -9.3 -22.6 .. Savings Investment Interest payments/GDP .. 0.5 1.8 Total debt/GDP .. 76.1 220.3 Total debt servIce/exports 7.3 38.8 20.4 Present value of debWGDP .. .. 198.0 .. Present value of debtiexpolts .. .. 782.6 Indebtedness 1976-84 1985-94 1994 1996 1996.04 (average annual growth) -Tanzania GDP(dt market prices) .. 4.0 3.7 4.0 4.8 -Low-income group GNP per capita .. .. Exports of goods and nfs .. .. .._.._.. STRUCTURE of the ECONOMY 1976 1986 1994 1998 (% of GDP) Agriculture .. 52.1 56.9 56.8 Industry .. 12.0 16.8 16.8 4 Manufacturing .. 7.9 7.8 7.8 2 Services 35.9 26.3 26.3 oth t out ut and lnv etmenn I% go 91 92 93 94 99 Private consumption .. 74.9 88.4 85.1 General govemment consumption .. 16.4 8.3 10.3 -GDI _GDP Imports of goods and non-factor services .. 16.8 51.8 54.4 19765-4 1988-94 1994 1996 (average annual growth) Agricuiture .. 5.4 3.5 4.0 Industry .. 6.8 2.9 4.3 Manufaduring .. 2.8 -0.9 4.5 Services .. 1.3 4.1 4.1 PrivEae consumption .. General govemment consumption .. Gross domestic investment .. Imports of goods and non-factor services .. Gross national product , 4.1 4.9 Note: 1995 data are preliminary estimates. The diamonds show four key Indicatos In the country (in bold) compared with Is Income-group average. f data are missing, the diamond wIll be Incomplte. adwidmle F Pip 4 do Tanzania PRICES and GOVERNMENT FINANCE 1975 1985 1994 1995 Inflation (%) DomUesc prflcas (3C change) Consumer prices 26.1 33.3 34.1 32.9 60 Impicit GDP deflator .. 27.7 25.0 34.0 4! Government finance o __ (% of GDP) 90 91 92 93 94 9s Current revenue .. 18.5 15.0 14.8 Current budget balance .. -2.3 -3.4 -4.2 -GDP det. *CPI Overall surplus/deficit .. -7.8 -8.0 -11.4 TRADE (millions US$) 1975 1985 1994 1995 Export and import levels (mill. USS) Total exports (fob) ., 326 486 600 Coffee .. 119 115 166 2.oDo Cotton .. 27 105 144 Manufactures .. 33 77 82 Total imports (cd) ' 999 13436 17503 I.DDO Food .. 78 128 137 5 Fuel and energy .. 223 149 155 Capital goods .. 434 656 695 0 b9 90 91 92 93 9 ss Export price index (1987=100) .. 96 126 Import prce Index (1987=100) .. 85 122 .. [ExOports [lmports Terms of trade (1987=100) 113 103 BALANCE of PAYMENTS 1975 1986 1994 1995 (millions US$) Exports of goods and non-factor services 482 445 848 1,025 Imports of goods and non-factor services 811 1,016 1,913 1,987 0 - Resource balance -329 -571 -1,065 -962 89 90 51 92 93 w s0 CU Zn :acco jr teba ice to GD atic (%) Net factor Income -3 -93 -147 -138 .10 Net current transfers 12 148 450 437 Current account balance, .20 before official transfers -321 -516 -762 -663 Financing items (net) 306 531 752 623 Changes in ntreserves 15 -14 10 40 Memo: Reserves including gold (mill. USS) 65 16 306 249 Conversion rate (localAUS$) 17.9 477.6 624.1 EXTERNAL DEBT and RESOURCE FLOWS 1975 1985 1993 1994 (millions USS) Total debt outstanding and disbursed 1,264 4,127 6,963 7,442 IBRD 80 266 140 114 IDA 81 568 1,759 1,998 Total debt service 36 181 172 172 Composition of total debt, 1994 Imill. USS) IBRD 5 40 45 42 IDA 3 7 23 25 G A Composition of net resource flows Fe5114 8 Offical grants 128 267 786 564 3 ® 1P Ollfidal creditors 248 55 95 160 Private creditors 5 46 34 12 Forelgn dired Investment .. .. 62 63 Portfolio equity 0 0 0 0 World Bank program Commitments 40 8 334 183 A - IBRD E - Bilatral Disbursements 60 83 146 183 B - IDA D - Other multlateral F - Privabe Principal repayments 3 27 42 43 C - IMF G - Shorttnerm Net flows 57 56 104 140 Interest payments 5 20 26 24 Net transfers 52 36 78 116 lntemational Economics Department *nd AF2CO staff estimates 3v4J96 Note: Economic data refer to malnland Tanzania only. Govemment finance fiscal year (July to June). Some entuies In Extemal Debt and Resource Flow section refled Africa Department staff estimates and may differ from those reported in the Debtor Reporting System (Worild Debt Tables). Uganda at a glance Sub- POVERTY and SOCIAL Saharan Low- Uganda Africa Income Development dlamond' Population mid-1994 (millions) 18.6 505 3,176 Life expectancy GNP per capita 1994 (US$) 200 510 390 GNP 1994 (billions USS) 3.7 288 1,239 Average annual growth, 1990-94 Population (%) 3.2 2.9 1.8 Labor force (%) 2.9 2.7 118 GNP Gross pe-r pnmary Most recent sstlmate (latestyear available since 1989) capita enrollrnent Poverty: headcount index (% of population) 55 Urban population (% of total population) 13 28 26 Life expectancy at birth (years) 43 52 65 Infant mortality (per 1,000 live births) 122 94 53 Child malnutrntion (% of children under 5) 23 .. 38 Access to safe water Access to safe water (% of population) .. 67 Illeracy (% of populabon age 15+) 52 50 41 Gross primary enrollmen1 (% of school-age population) 67 68 106 -Uganda Male 74 77 112 --Low-income group Female 59 62 100 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1975 1985 1994 1995 Economic Utlos GDP (billions US$) *- 3.5 4.0 5.2 Gross domestic investment/GDP 7.6 9.0 14.5 14.0 Openness of economy Exports of goods and non-factor services/GOP 8.2 13.8 8.2 11.7 Gross domestic savings/GDP 5.5 7.1 4.1 -0.6 Gross national savings/GDP 5.4 6.7 10.1 5.7 Cufrent account balance/GDP .. -2.5 -6.6 -8.4 Savings Investment Interest payments/GDP .. 0.5 0.8 . Total debtWGDP .. 35.5 86.8 Total debt service/exports 6.6 38.8 44.1 Present value of debtGDP .. .. 52.0 Present value of debt/exports .. .. 604.2 Indebtedness 197544 1985-95 1994 1995 199644 (average annual growth) -Uganda GDP .. 5.8 6.0 10.4 3.3 -Low-income group GNP per capita .. 2.6 2.6 7.6 -0.3 Exports of goodrs and nfs .. 4.3 18.8 12.9 6.0 STRUCTURE of the ECONOMY 1975 1986 1994 1995 (%6 of GDP)I Agriculture 72.2 52.7 49.4 48.8 rates of output and Inveatment (%) Industry 8.2 9.8 13.9 13.4 / Manufacturing 6.3 5.8 6.5 6.3 Services 19.7 37.4 36.6 37.8 -10 / NV 93 94 95 Private consumption .. 78.4 85.4 92.3 General govemment consumption .. 14.5 10.5 8.3 -GDI o GDP Imports of goods and non-factor services 10.3 15.7 18.6 26.3 197544 1985-95 1994 1995 (average annual growth) Agriculture .. 4.0 1.6 6.0 q whh rates of expors and Imports (%) Industry .. 9.2 13.4 16.7 Manufacturing .. 9.5 15.2 17.7 45 Services .. 6.8 8.0 12.7 30 Prvate consumption . 5.5 4.7 14. 5 General govemment consumption .. 5.2 13.7 30.8 1s go 92 93 r4 0s Gross domestic investment .. 6.5 6.2 16.9 Imports of goods and non-factor services .. 3.5 7.1 51.4 -Exports _Inpof Gross national product .. 5.9 5.8 10.9 Note: 1995 data are preliminary estimates. The diamonds show four key indicators in the country (in bold) compared wih its Income-group average. If data are miassng, the diamond will be incomplete. Uganda PRICES and GOVERNMENT FINANCE 1975 1985 1994 1WO5 lnhdonf %) Domestc pr.c. (N chage) 150 Consumer pries 105.3 7.8 2.9 Impici GDP defltor 120.2 7.3 9.6 500. 90 Government finnce (X of GDP) go9 91 92 93 94 99 Curent revenue 9.1 8.3 9.9 Current budget balance 0.3 -0.6 0.6 -GrSPdut --CP Overall surpkusidefc. -4.3 -10.3 -7.0 | TRADE 1975 1985 1994 1995 Export end Imlport levels (mii. US$) (mRHons USS) Totalexports(fob) 383 254 537 Coffee 353 172 408 Cotton 13 4 2 1,C00 Manufactures No Total Impors (cil) 404 672 1,086 eoo Food.. . 93 143 ar fi111Li] u l Fuelandenergy 76 55 no 2 | HIL CapItal goods . . 222 299J I A Export prce index (1987-100) .. 103 46 81 es go 9 92 93 94 90 Import prce lndax (1987=100) 80 128 138 E mlmports Termsoftxade(1987l100) 129 36 59 _Expo_ _Impo_a BALANCE o PAYMENTS 1975 1985 1994 1995 (mlllons US$) Exports of goods and non-factor servIces 248 408 333 609 9 rent count balance to GDP rtao Imports of goodseand non-fector services 313 484 841 1,367 90 el9j 2 93 9 Resource balance -65 -76 -508 -758 Net factor icome -4 -53 -61 -62 95 Net current traners -3 40 304 385 Current account balance, .10 before officil transfers -72 -89 -265 -436 Financing Ims (net) 72 128 354 585 Changes In net reserves 0 -39 -90 -150 -1- Memn o: _ _ _ _ _ _ _ _ _ _ _ _ _ Reaerves Including gold (mHIL USS) 31 85 219 391 Conversion rate (locaL4S) 5.1 1,097.0 1,022.3 EXTERNAL DEBT and RESOURCE FLOWS 1975 1985 1993 1994 (mNlons USS) Total debt outstwnding and disbursed 211 1,248 3,131 3,473 Composition of tota debt, 1994 (rIL. US$) IBRD 4 37 16 11 IDA 40 285 1,327 1,604 Totaldebt ervice 17 158 165 152 IORD 1 3 8 7 |FG IDA 0 4 13 17 9| s30 Composion of net resourcefows E a Official grant 30 47 260 319 831 4f04 Officiacredtors 11 139 307 198 4 CI PrIvate creditors -3 4 -11 -18 383 Foreign dkea Investment 2 -4 3 5 Portfolo equity 0 0 0 0 trld Bank prgram ComnItments 0 45 193 268 A -IBRD E-B DIsburserents 3 92 139 222 B-IDA D-OOthrmurllaterel F-Pw tve Prindpa repayments 1 2 11 12 C-iMPF G-Short-twm Netfiows 2 90 128 210 Inttpaymrnt 1 4 11 12 Net transfers 2 86 118 198 Intewntlonal Economics Depanment 3N98 PART II: TECHNICAL ANNEX KENYA, TANZANIA, UGANDA LAKE VICTORIA ENVIRONMENTAL MANAGEMENT PROJECT CONTENTS GRANT, CREDIT, AND PROJECT SUMMARY ...............................................i 1. BACKGROUND ................................................1 A. The Macroeconomies ................................................1 B. Lake Victoria and its Surrounds ................................................5 C. Major Threats to the Lake ................................................6 2. STRATEGIC FRAMEWORK ............................................... 10 A. Project Preparation ............................................... 10 B. The Lake Victoria Region in the Future ............................................... 11 3. THE PROJECT ............................................... 12 A. Objectives ............................................... 12 B. General Description ............................................... 13 C. Project Details ............................................... 14 D. Project Priorities ............................................... 24 E. Project Costs and Financing ............................................... 24 F. Rationale for GEF and IDA Involvement ............................................... 26 G. Lessons Learned and Technical Review ............................................... 28 4. PROJECT IMPLEMENTATION ............................................... 28 A. Management Structure ............................................... 28 B. Implementing Agencies ............................................... 29 C. Specific Implementation Arrangements ............................................... 30 D. Implementation Review ............................................... 32 E. Procurement ............................................... 32 F. Disbursement ............................................... 34 G. Accounting and Audits .35 H. Sustainability and Participation ............................................... 36 I. Monitoring and Evaluation ............................................... 37 5. PROJECT BENEFITS AND RISKS ............................................... 39 A. Benefits ............................................... 39 B. Environmental Analysis ............................................... 44 C. Risks ............................................... 47 6. AGREEMENTS REACHED AND RECOMMENDATIONS ............................................... 48 Annexes 1. Project Cost Summary and Financing Plan 2. Estimated Schedule of Disbursement (GEF and IDA) 3. Project Implementation Plan 4. Project Performance and Impact Indicators 5. Procurement Packages and Implementation Schedule 6. Supervision Plan 7. GEF Incremental Costs LAKE VICTORIA ENVIRONMENTAL MANAGEMENT PROJECT 1. BACKGROUND A. THE MACROECONOMIES Kenya 1.1 Kenya remains a low-income country. Even though its population growth rate, which historically has been very high (averaging 3.4 percent per annum as recently as 1987-91), dropped to about 3 percent in 1993, and although Kenya is one of the few countries in Africa that experienced a decline in fertility in the eighties (from 7.7 in the early 1980s to 5.2 in 1993), a significant and sustained increase in per capita income has proved to be an elusive goal in Kenya during the past decade. In spite of a few years of relatively good growth during the second half of the 1980s, the performance of the economy has been particularly inadequate in generating new jobs, and there has been no significant improvement in the incidence of poverty. Overall, the economy has generated only marginal increases in per capita output over the past decade; during the last four years, per capita income has actually declined - from $340 in 1991 to $260 in 1994 (at current prices and exchange rates). 1.2 The economy is heavily dependent on agriculture, which employs 70 percent of the labor force and contributes about one quarter of Gross Domestic Product (GDP). Coffee, tea and horticultural crops account for over 50 percent of merchandise exports. Between 1991 and 1993, Kenya's macroeconomic performance was poor. In April 1992, the Government agreed with the International Monetary Fund (IMF), on a program of actions necessary to re-establish a sound macroeconomic framework which included deficit reduction and liberalization of the foreign exchange regime. Until mid-1993, the implementation of the actions required was unsatisfactory: although fiscal targets were met, monetary targets were exceeded and the liberalization of the foreign exchange regime proved to be unsustainable. 1.3 Sustained Government effort since mid-1993 to tighten fiscal and monetary policy has resulted in effective economic stabilization and the revival of economic growth. The fiscal deficit (exclusive of grants) has been sharply reduced over two years from over 11 percent of GDP in FY93 to about 2.5 percent in FY95. Combined with a generally tight monetary stance, these policies have resulted in the reduction of inflation. Measured month over month, inflation peaked in January 1994 at 62 percent and declined steadily to 6.6 percent in December 1994. The three-month annualized inflation rate was reduced to 2.8 percent by the third quarter of 1995. Exchange rate movements, after the initial inflation-induced depreciation to KSh 82 per US dollar in June 1993, have reflected the interest rate response of short-term foreign capital flowing in and out of Kenya. High interest rates led to the capital inflows which contributed to a reserve accumulation and caused the shilling to appreciate to about KSh 45 per US dollar by October 1994. The recent decline in domestic interest rates and the subsequent capital outflow, as well as the gradual recovery of import demand, resulted in the 2 Lake Victoria Environrmental Management Project shilling depreciating in the second quarter of 1995 to about KSh 55 per US dollar where it has since stabilized. In parallel with the improvement in inflation has been a resumption of real economic growth. GDP growth (at factor cost) for 1994 is estimated at 3 percent, the first significantly positive growth in three years, and it was projected at around 5 percent for 1995. 1.4 Rising population pressures, migration and rapid urbanization have increased the need for urgent actions to address Kenya's environmental problems. The more critical problems are related to soil and land degradation, water resource management, biomass and household energy issues, and the protection and management of fragile ecosystems, including national parks. Rapid urbanization and inadequate physical planning have also caused a significant deterioration in the urban environment. The Government adopted a comprehensive National Environmental Action Plan (NEAP) in June 1994. The challenge since its completion has been to translate the NEAP's broad concerns about environmental management into an operational program of effective policy, legislative and institutional action. Areas for priority action include the development and adoption of a comprehensive environmental policy, the establishment of an effective institutional and legal framework, and the formalizing of a requirement for environmental impact assessments for all development projects. Tanzania 1.5 By the early 1980s, Tanzania had come to be a heavily state-controlled economy, whose rigid economic system was battered by numerous shocks, and whose inadequate policies led to economic stagnation and a fall in per capita income lasting almost a decade. Beginning in 1986, the Government embarked on a program to reform and fundamentally change the existing approach to economic development by dismantling the system of pervasive economic controls and encouraging more active participation of the private sector in the economy. Structural reforms, particularly relating to traditional exports and the parastatal and financial sectors, were not fully completed, and macroeconomic stabilization remained elusive. Nevertheless, the economy responded well to the reforms that were implemented (notably, liberalization of food crop marketing and progressive improvements in foreign exchange management) and the accompanying increased availability of external resources. Official estimates indicate that GDP growth averaged about 4 percent per year and exports grew by more than 4 percent per year during 1986-94 (versus a 5 percent p.a. decline during 1979-85), with a marked increase in food production, increased sales of traditional exports, and a doubling in non-traditional agricultural exports since 1985. 1.6 Recent household surveys have shown that the adjustment program has been successful in reducing the incidence of poverty. The devaluation of the shilling and removal of restrictions on the marketing of food crops boosted production and incomes of smallholder agricultural families. The increased availability of consumer goods as a result of liberalization directly benefited the rural poor (as well as the urban poor who also benefited from increased supplies of food from liberalized agricultural marketing), and liberalization opened new earnings opportunities for rural women and for off-farm employment. Sample surveys for the preparation of a Poverty Profile suggest that the percentage of poor declined from about 70 percent of the rural population in the early Lake Victoria Environmental Management Project 3 1980s to about 50 percent in the early 1990s. The liberalization program increased the access of small-scale enterprises to production inputs which facilitated expansion of low-wage employment in the informal sector. 1.7 Progress has been made in reforming the foreign exchange and trade systems over the last two years. Tanzania has moved to an interbank market and has abolished all export retention and import licensing, except for items related to health and national security. Excessive monetary expansion has been fueled by worsening fiscal management. The fiscal deficit (including grants) was about 6 percent of GDP in FY93 and 5 percent in FY94, after broadly balanced positions in the previous four years. This reflected widespread and increasing customs duty exemptions, an increasingly inefficient tax administration and the failure of the expenditure control system. Efforts are being made in the current fiscal year (among then a public sector hiring freeze, and reduced transfers to parastatals) to reduce the fiscal deficit below 4 percent of GDP. Inflation, which had accelerated above 25 percent p.a. is targeted by efforts to bring it down to 22 percent within the next fiscal year. Real GDP growth averaged about 3-4 percent per year during FY92 to FY94. Growth in FY94 was seriously compromised by weak economic management, and severe power shortages caused largely by less-than- average rainfall. These developments limited the scope for generating employment and, in particular, the high inflation rates resulting from macroeconomic mismanagement continue to erode the real incomes of the poor. 1.8 The recently completed National Environmental Action Plan focused on the need for action in the key areas of land degradation, water supply, environmental pollution, marine and freshwater resource management, habitat conservation and bio- diversity, and deforestation. The action program for implementation includes revision of the legislative framework to enable local participation in environmental management more fully. Policies will support the environment in various ways, including applying the forest and wildlife protection acts; developing the means for assessing environmental quality, including water and air pollution; and strengthening environmental awareness programs. Some Government policies are oriented towards using incentives, such as implementing the new land policy to enhance the security of tenure; pricing policies for fuel, including oil; and water rights to encourage efficient use and environmentally sensitive practices. Uganda 1.9 With a per capita income of about US$200, Uganda is one the poorest countries in the world. Its weak economy and poor social indicators are the legacy of nearly 15 years of political turmoil and economic decline. Since 1987 the Government has been implementing an economic reform program supported by a large number of donors. The program aims to promote prudent fiscal and monetary management, improve incentives to the private sector, reform the regulatory framework, and develop human capital through investment in education, health and other social services. Economic recovery and stabilization have been successful; hard-won macroeconomic stability has been maintained for the past three years. The stability is precarious, however; continuation of good policies and further improvement are therefore required. 4 Lake Victoria Enviroonmetal Management Project 1.10 A number of the structural reforms are now well advanced and appear to be accepted in Uganda. Nonetheless, the reform program has its detractors, and is still very fragile. Achieving higher investment, growth, and increased employment opportunities are critical for the sustainability of the program. Macroeconomic stability remains fragile also, notwithstanding the progress that has been made in curtailing public spending and strengthening the Shilling. With widespread poverty and massive unmet public needs, it will be difficult to maintain expenditure constraints. The key is to mobilize additional tax revenue, which is a very low proportion of GDP in Uganda. Doing so has not proven easy. A large part of the economy is in the informal sector and thus escapes taxation. Better tax administration, fewer exemptions and stronger enforcement can help in the short run, but any significant gains in revenue will come at best only in the medium-term. Uganda's current balance on the external account is also fragile. While internal price and exchange rate stability, together with good prospects for extended political calm, has generated a substantial inflow of private capital over the past several months, these flows could be reversed quickly if inflation or exchange rate volatility were to reappear. The dilemma facing policymakers is to get the economy moving ahead more rapidly, without generating inflation which could unravel the entire adjustment program. 1.11 Uganda's economic growth since 1987 has been good, but not spectacular. Real GDP grew by an average of 5.4 percent per annum from FY87 to FY93, a gain of about 2.5 percent per annum in per capita terms. To a large extent this growth was the result of bringing land and capital back into production, made possible by increased peace and security. More recently growth has also been fueled by some private investment and by the impact of trade, exchange rate and crop marketing liberalization. Preliminary indications are that real GDP rose by 5 percent in FY94, mainly due to strong performance by the manufacturing and construction sectors. The point has now been reached where further growth will depend on increased private investment. 1.12 The NEAP was approved by the Government in January 1994. The National Environmental Policy that was adopted subsequently calls for re-aligning sectoral development strategies so that they address priority environmental concerns relating to, among others, land degradation, deforestation, loss of wetlands, and dwindling fish stocks, several of which are directly related to environmental management of the Lake Victoria basin. The policy also emphasizes strategies cutting across sectors such as the need to control population growth and enhance security of land tenure. It also advocates environmental education and a system of environmental impact assessments as essential means of promoting rational resource use. The National Environmental Management Authority (NEMA) established recently will serve as the central policy advisory body on the environment, and coordinate implementation of the NEAP. Lake Victoria Environmental Management Project 5 B. LAKE VICIORIA AND ITS SURROUNDS Physical Description and Setting, 1.13 Lake Victoria (Map Number IBRD 27780), with a surface area of 68,800 km2 and an adjoining catchment of 184,000 km2, is the world's second largest body of fresh water, and the largest in the developing world, second only to Lake Superior in size. Lake Victoria touches the Equator in its northern reaches, and is relatively shallow, reaching a maximum depth of about 80 m, and an average depth of about 40 m. The lake's shoreline is long (about 3,500 km) and convoluted, enclosing innumerable small, shallow bays and inlets, many of which include swamps and wetlands which differ a great deal from one another and from the lake itself. Because the lake is shallow, its volume is substantially less than that of other Eastern African lakes with much smaller surface area. Lake Victoria holds about 2,760 km3 of water, only 15 percent of the volume of Lake Tanganyika, even though the latter has less than half the surface area. 1.14 Some 85 percent of the water entering the lake does so from precipitation directly on to the lake surface, the remainder coming from rivers which drain the surrounding catchment. The most significant of these rivers, the Kagera, contributes roughly 7 percent of the total inflow, or one half of that over and above direct precipitation. The Kagera River, which rises in the highlands of Burundi and Rwanda, forms the border between Rwanda and Tanzania before turning to the east, and flows for at least 150 km completely in Tanzanian territory. It discharges into the lake just north of the border between Tanzania and Uganda. Some 85 percent of the water leaving the lake does so through direct evaporation from its surface, and the remaining 15 percent largely by way of the Victoria Nile, which leaves the lake near Jinja in Uganda, and flows via the Owen Falls, Lake Kioga, and the Murchison Fails to join the outflow from Lake Albert; these two outflows are the main sources of the "White Nile". 1.15 The lake's origins are still the subject of scientific dispute, but it seems likely that it is much more recent than the other great lakes of eastern Africa. Many of the rivers now flowing east into Victoria (including Kagera) once flowed west, at least in the Miocene, Pliocene, and part of the Pleistocene eras (within the past 2 million years), possibly eventually into the Nile system, and a more recent upthrust of the western side of the basin is thought to have reversed these rivers, and caused Lake Victoria to form by flowing eastwards. It is possible that the lake could have formed as recently as 25,000 to 35,000 years ago, and recent evidence suggests it may have dried up completely between 10,000 and 14,000 years ago. Biological and Environmental Significance 1.16 Although there are many features of Lake Victoria which are of intense interest to biologists, it is fish that receive the most attention. Most of the fish species now in the Much of the information for the description of Lake Victoria and its workings was drawn from the following: Beadle, L.C., The Inland Waters of Tropical Africa: An Introduction to Tropical Limnology, Longman, London & New York, 1981,475 pp. 6 Lake Victoria Environmental Management Project lake also lived in the preceding, west-flowing rivers, but the cichlids, in particular, had a remarkable burst of speciation in response to the change from river to lake conditions. Similar things happened in the other great lakes, but in Lake Victoria it happened much more recently, more rapidly, and with, at first sight, fewer opportunities for ecological isolation in different types of habitat. The cichlids are capable of rapid genetic change, and more prone to speciation than other groups of African fish. There are more than 200 endemic species and 4 endemic genera of cichlids in Lake Victoria, more than 150 species of which are of the genus Haplochromis. Another major lineage is the tilapiines. From the primitive insect-eating types, mouths and pharynxes have evolved to allow feeding on plants, molluscs, fish, and even the eggs and young larvae carried in the mouths of brooding females of most cichlid species. 1.17 The non-cichlid fishes have also changed, and there are at least 50 species, of which 29 are endemic, and one endemic genus. The non-cichlids show much less divergence from the riverine stock than is the case with non-cichlid fish in Lake Tanganyika, which has had a much longer time for them to diversify. While most of the species remain year round in the lake, there are a number (at least 13 species) of anadromous (ascending) fish, especially cyprinids, characids and siluroids, which swim up the rivers when they are in flood, breed in a suitable place, and return with their young fish to the lake as the level drops. Economic Significance 1.18 Kenya, Tanzania and Uganda control 6, 49, and 45 percent of the lake surface, respectively. The gross economic product of the lake catchment is in the order of US$3- 4 billion annually, and supports an estimated population of 25 million people at incomes in the range of US$90-270 per capita p.a. The lake catchment thus provides for the livelihood of about one third of the combined populations of the three countries, and about the same proportion of the combined gross domestic product. With the exception of Kampala, the capital of Uganda, the lake catchment economy is principally an agricultural one, with a number of cash crops (including exports of fish) and a high level of subsistence fishing and agriculture. In Kenya and Uganda the areas of coffee and tea in the catchment are a significant part of those nations' major agricultural exports. The quality of the physical environment is therefore a fundamental factor in maintaining and increasing the living standards of the growing population. Although it is not possible to put a single estimate to the global value of the lake in sustaining the regional economy, it can be seen that if the deterioration of the lake resulted in a (say) 5 percent reduction in productivity of the region, the consequent loss would be of the order of US$150 million annually. C. MAJOR THREATS TO THE LAKE 1.19 The lake basin is used as a source of food, energy, drinking and irrigation water, shelter, transport, and as a repository for human, agricultural and industrial waste. With the populations of the riparian communities growing at rates among the highest in the world, the multiple activities in the lake basin have increasingly come into conflict. This has contributed to rendering the lake environmentally unstable. The lake Lake Victoria Environmental Management Project 7 ecosystem has undergone substantial, and to some observers alarming changes, which have accelerated over the last three decades. Massive blooms of algae have developed, and come increasingly to be dominated by the potentially toxic blue-green variety. The distance at which a white disc is visible from the surface, (a transparency index measuring algal abundance), has declined from 5 metres in the early 1930s to one metre or less for most of the year in the early 1990s. Water-borne diseases have increased in frequency. Water hyacinth, absent as late as 1989, has begun to choke important waterways and landings, especially in Uganda. Overfishing and oxygen depletion at lower depths of the lake threaten the artisanal fisheries and biodiversity (over 200 indigenous species are said to be facing possible extinction). Scientists advance two main hypotheses for these extensive changes. First, the introduction of Nile perch as an exotic species some 30 years ago has altered the food web structure; second, nutrient inputs from adjoining catchments are causing eutrophication. Thus although the lake and its fishery show the evidence of the dramatic changes in the lake basin over the past century, the lake is not the source of the problem. The problems have arisen in the surrounding basins through human activity. Lake Biota and Fisheries 1.20 One of the main events of importance to the lake system in the past thirty years was the introduction of new species of fish in the lake. The first were four species of tilapia (Cichlidae), which were introduced in the early 1950s. In 1955 the Nile Perch Lates niloticus (Centropomidae) was introduced into Lake Kioga, and when a few years later it was found in Lake Victoria, steps were taken to ensure its establishment there. Until 1978, Nile Perch remained a very small proportion of the commercial catch, less than 5 percent. Then in 1978 a very rapid expansion of the proportion accounted for by Nile Perch took place, with the result that by 1990 the commercial catch had a totally different composition, dominated by Nile Perch (almost 60 percent) and Omena (most of the remaining 40 percent). The haplochromines, and the mixture of other fish had virtually vanished from the commercial catch.2 1.21 It is important to note that the size of the fishery also exploded from 1978 on, perhaps by a factor of five or more. From Kenyan waters alone the recorded catch climbed from around 25,000 tons in 1978 to more than 175,000 tons in 1990. In the years preceding introduction of the Nile Perch, the total fisheries yield from the lake may have been in the vicinity of 100,000 tons, while in more recent years yields have been estimated in the range of 300,000 to 500,000 tons.3 2Data from Kaufman, Les, Catastrophic Change In Species-Rich Freshwater Ecosystems: The Lessons of Lake Victoria, Bioscience, Vol. 42, No. 11, December 1992, 846-858. 3Data from Kitchell, James F., Richard Ogutu-Ohwayo, and Peter M. Reinthal, The Nile Perch in Lake Victoria: Interactions Between Predation and Fisheries, draft paper 1995, forthcoming in Eco. Appl. 8 Lake Victoria Environmental Management Project Water Hyacinth 1.22 Water hyacinth (Eichhornia crassipes) is a flowering plant, whose origin is thought to be the Amazon areas of Brazil. It appeared in Lake Naivasha in Kenya in 1982, and in Lake Kioga in Uganda in 1988. In Tanzania, it was first reported in 1990. Its first recorded appearance in Lake Victoria was in Ugandan waters in 1988. Since then it has been reported in many locations, all around the lake, in the waters of all three riparian countries. It is especially concentrated in Ugandan waters, possibly because the prevailing southerly winds blow mats of the weed all the way from the mouth of the Kagera River, down which the mats flow from lakes far up in the catchments in Rwanda and Burundi. The hyacinth also flourishes in nutrient-rich waters, as those along the Uganda shoreline of the lake are believed to be. The area between Entebbe and the Uganda/Kenya border has widespread floating mats of water hyacinth, some of which reach more than 1,000 ha in size. 1.23 The main detrimental effects of the spreading mats of water hyacinth are as follows: (a) reduction in fish in the lake through de-oxygenation of water and reduction of nutrients in sheltered bays which are breeding and nursery grounds for fish, particularly tilapia; (b) physical interference with fishing operations, especially in the bays where fish are brought ashore to piers or landing beaches; (c) physical interference with commercial transportation services for people and goods on the lake; (d) physical interference with access to water supply from the lake, for both urban and rural communities, together with additions to the cost of purifying water with higher concentrations of suspended, decaying organic matter as a result of the hyacinth presence; (e) threats to the intakes at the Owen Falls hydroelectric power station in Uganda; and (f) provision of a preferred breeding habitat for the altemative host for Schistosomiasis (bilharzia), namely the Biomphalaria snail, a home for the vector mosquito for malaria, and a haven for snakes. Eutrophication 1.24 Water quality in Lake Victoria has declined greatly in the past few decades, owing chiefly to eutrophication arising from increased inflow of nutrients into the lake. Nutrient inputs have increased two to three-fold since the turn of the century, mostly since 1950. Concentrations of phosphorus have risen markedly in the deeper lake waters, and nitrogen around the edges. Stimulated by these and other nutrients, the five-fold increase in algal growth since 1960, and the shift in its composition towards Lake Victoria Environmental Management Project 9 domination by blue-green algae, is causing deoxygenation of the water, increased sickness for humans and animals drawing water from the lake, clogging of water intake filters, and increased chemical treatment costs for urban centers. Aside from the near- total loss of the deepwater species, the deoxygenation of the lake's bottom waters now poses a constant threat, even to fish in shallower portions of the lake, as periodic upwelling of hypoxic water causes massive fish kills. The increased nutrient loads have also spurred the water hyacinth infestations. 1.25 The nutrients represent a transfer of materials at an increasing rate from the terrestial basin to the lake. Among others, these transfers comprise organic and inorganic suspended solids and dissolved nutrients carried by streams, terrestrial dust from wind erosion, inorganic compounds in the smoke produced by combustion (in cooking fires or forest burning), and direct additions along the lake shores of human and animal waste associated with domestic water use. Preliminary estimates suggest the increased nutrient inflows are coming largely from rural areas, but although the main causes of the eutrophication are known, the rates of enrichment, its sources, and its numerous effects are not well quantified. Since many of the farms in the area apply no fertilizers, or use very small quantities, these are not likely to be a major source of the nutrients, nor will they be until fertilizer application rates reach substantially higher levels than currently seen. Rather, the nutrients may be released from soil particles washed or blown off the land surface by erosion, from burning wood-fuels, and from human and animal waste from areas surrounding the lake. From the urban areas, the main source is untreated sewage, which beside providing additional nutrients, also increases the disease risk from water borne pathogens. Thus the water quality problems of the lake arise in the watershed, not in the lake, and it is in the catchment that the solutions must be found. Water Pollution 1.26 Some areas of the rivers feeding the lake and the shoreline are particularly polluted by municipal and industrial discharges. Some information has been collected by local and national authorities on the scale and location of polluting industries, and there are a number of basic industries that are common to most of the major urban areas, for example, breweries, tanning, fish processing, agroprocessing (sugar, coffee) and abattoirs. Some of these have implemented pollution management measures but in general the level of industrial pollution control is low. Small scale gold mining is increasing, in Tanzania in particular, and this is leading to some contamination of the local waterways by mercury which is used to amalgamate and recover the gold. Some traces of other heavy metals, such as chromium and lead, are also found in the lake, although the problem has not yet reached major proportions. 10 Lake Victoria Environmental Management Project 2. STRATEGIC FRAMEWORK A. PROJECT PREPARATION 2.1 Attempts at fisheries collaboration among Kenya, Tanzania and Uganda are among the oldest on the continent. As early as 1928, it was recommended that a unified lake-wide authority for regulation and for collection of fisheries statistics be set up. Establishment of the East African Freshwater Fisheries Research Organization (EAFFRO) in 1947 solidified collaboration, and it was boosted further with formation of the East African Community in 1967. In the early 1970s, all three countries became members of the FAO Committee for Inland Fisheries of Africa (CIFA). After the disappearance of this coordinating mechanism with the ending of the East African Community in 1977, the need for collaboration was felt so strongly that a special CIFA Sub-Committee for Lake Victoria was set up in 1980. Although this was a useful forum for the three countries, the difficulty of implementing management measures on a lake- wide basis due to the lack of a strong inter-governmental mechanism for harmonization of such measures, led to the design of proposals for the Lake Victoria Fisheries Organization (LVFO), whose establishment the current project would support. Most importantly, the current project would, for the first time, ensure that regional fisheries management would operate within a regional framework for environmental action, rather than having only a commercial orientation. 2.2 Each of the three riparian Governments has prepared a National Environmental Action Plan (NEAP). All three NEAPS acknowledge that Lake Victoria demands urgent attention through regional cooperation. The NEAPs focus on problems such as water pollution, biodiversity loss, land degradation, deforestation, and damage to wetlands, all central concerns for the lake and its catchments. Scientists and resource managers have increasingly warned that the absence of a regional management framework may threaten the future viability of the lake basin. Discussions to broaden regional environmental cooperation covering the Lake Victoria Basin started in late 1992. In May 1994 the three Governments decided to enter into an agreement jointly to prepare and implement a Lake Victoria Environmental Management Program. A Tripartite agreement to this effect was signed August 5, 1994. The essential soundness of this agreement has been proven during project preparation, and its main institutional arrangements, which have worked well, will continue into project implementation. 2.3 The Tripartite Agreement of 1994, as enhanced by the government preparation report, constitutes a framework for action fully responsive to the requirement for a Strategic Action Plan (SAP). This SAP, whose preparation included extensive stakeholder consultation, was reviewed thoroughly during appraisal. It identifies, acknowledges and analyzes the transboundary water-related environmental concerns which the three governments share in common. Furthermore, it expresses their determination jointly to build the capacity of existing institutions, and establish new ones, in order that they may adopt a comprehensive approach to addressing the shared transboundary concerns, and implement measures to deal with the priority concerns as identified, with a particular focus on community stakeholder involvement and measures to raise public awareness. Lake Victoria Environmental Management Project 11 2.4 Preparation of the LVEMP took into account ongoing activities funded by the Global Environment Facility under the project Institutional Support for the Protection of East African Biodiversity (UNO/RAF/006/GEF), implemented by FAO and UNDP. The first phase of that project is coming to an end in 1996, just as the LVEMP commences implementation. The latter will build particularly on the wetlands components of the Institutional Support project, through which funds were provided to wetlands programs under the technical oversight of the IUCN (The World Conservation Union). These initiatives have established committees on wetlands in all three riparian countries, which would coordinate wetlands components under the LVEMP. 2.5 A large number of donors have supported a vast range of development initiatives in and around Lake Victoria. Some of these have addressed priority environmental concerns, but mostly in small, uncoordinated, and incomplete ways, and seldom with informed intentionality which had the wider environmental priorities in mind. In the absence of a coordinated management and information system for the entire lake and its ecosystem, these smaller projects have often fallen short, and continue to fall short, of realizing their maximum potential. Although often successful in their own terms, they could have achieved even more by being part of a coordinated management initiative to address the lake ecosystem and its problems. The current project is such a management initiative, which will lead to a quantum leap in understanding the ecosystem, and in devising sustainable management strategies. B. THE LAKE VICTORIA REGION IN THE FUTURE 2.6 The Lake Victoria Environmental Management Project (LVEMP) will therefore become the heart of the wider investments needed in the lake basin in forthcoming years in direct actions to clean up the lake and its catchment, and manage the ecosystem in a sustainable way. Substantial investments will be needed in direct actions to reduce nutrient inflows from human waste (in both urban and rural areas), to decrease soil erosion, to clean up industrial effluent, and reduce pollution from all sources. The project will provide the information and build the capacity to coordinate the substantial sums likely to be available for financing these direct actions in the next five years and beyond. In the LVEMP itself an estimated 20 percent of project costs will be directed towards studies, 42 percent towards capacity building, and 38 percent towards direct actions. 2.7 A much broader program of investments in direct actions is already shaping up around the LVEMP, directed towards actions to improve human sanitation and reduce soil erosion in the lake basin. The bulk of these will take their cues from the early findings of the LVEMP. When these investments are included, the proportion of the program allocated for direct actions will increase markedly. Undoubtedly there will be substantial additional flows from other donors. The LVEMP mid-term update to the analysis of transboundary environmental concerns will guide the second phase of project implementation, and set the stage for subsequent initiatives. The Implementation Completion Report to be prepared by the three governments at the end of the LVEMP will include a revised Strategic Action Program outlining interventions needed to address priority problems. IDA will use this as the basis for seeking commitments to support such interventions from the wider donor community. Thus 12 Lake Victoria Envirornenta Management Project the LVEMP will be the essential first step in a long-term program for restoring and sustaining the ecological foundations for economic development in the entire lake basin. 2.8 Furthermore, the LVEMP itself will include a study of potential sources of funding for continuing support of fisheries management, and other collaborative arrangements for sustaining the ecosystem established by the three riparian countries during this first phase. The study will assess possibilities for raising and coordinating levies on the commercial fisheries to enable some of the central monitoring and management initiatives to become fiscally sustainable. The LVEMP includes financial support for estabLishing a shared Levy Trust Fund among the three countries, should the study show this to be feasible. 2.9 The economy of the lake basin is based on agriculture (about 35 percent), lake fisheries (about 10 percent), industries and mining (about 15 percent) and the tertiary sector (about 40 percent). The structure of the economy will continue to change as the population grows, with livelihoods found increasingly in the secondary and tertiary sectors rather than the primary. There is considerable scope for increases in agricultural production, however, and especially in its value-added, as it is intensified and diversified into higher valued enterprises. Because of their size, a significant proportion of additional jobs will be found in agriculture and the fisheries for the foreseeable future. It is vital that the additional pressure this will put on the resource base is managed well, in order to head off increasing deterioration. The project aims at providing the foundation for this improved management, (and thus for sustainable development of the local economy), while the ancillary investments are regarded as vital to clean up the lake, and reduce nutrient and pollution inflows to within acceptable limits. 3. THE PROJECT A. OBJECTIVES 3.1 The LVEMP is a comprehensive program aimed at rehabilitation of the lake ecosystem for the benefit of the people who live in the catchment, the national economies of which they are a part, and the global community. The program objectives are to: (a) maximize the sustainable benefits to riparian communities from using resources within the basin to generate food, employment and income, supply safe water, and sustain a disease-free environment; and (b) conserve biodiversity and genetic resources for the benefit of the riparian communities and the global community. In order to address the tradeoffs among these objectives which cut across national boundaries, a further project objective is to harmonize national management programs in order to achieve, to the maximum extent possible, the reversal of increasing environmental degradation. Lake Victoria Environmental Management Project 13 B. GENERAL DESCRIPTION 3.2 The project is the first phase of a longer term program whose aims are as outlined above. The first phase will provide the necessary information to improve management of the lake ecosystem, establish mechanisms for cooperative management by the three countries, identify and demonstrate practical, self-sustaining remedies, while simultaneously building capacity for ecosystem management. The project will consist of two broad sets of activities. The first set of activities, which are designed to address specific environmental threats, will take place in a series of selected pilot zones. The second set of activities, which will improve information on the lake and build capacity for more effective management, wil be of necessity lake-wide in scope. 3.3 In the pilot zones, the project would do the following in an integrated way: develop groundwater resources; conserve and develop wetlands; reduce sediment and nutrient flow, especially of phosphorus, into the lake; reduce fecal coliform and municipal nutrient output into the lake; regulate industrial effluent; define current contamination of fish and prevent any increase; stabilize the catch of Nile Perch, and increase the catch of indigenous species; increase incomes of local fisherfolk; and reduce water hyacinth to manageable levels. A total of fourteen pilot zones have been identified, four in Kenya, and five in each of Tanzania and Uganda. Work would be started in one pilot zone in each country in the first year - Nyakach Bay in Kenya (including the city of Kisumu), Mwanza Gulf in Tanzania (including the city of Mwanza), and Napoleon Bay in Uganda (including the city of Jinja). The other pilot zones are Berkeley Bay, Usenge-Yala, and Karungu Bay (Kenya); Mara-Shirati Bay, Speke Gulf, Emin Pasha Gulf, and Kagera-Rubafu Bay (Tanzania); and MacDonald- Berkeley Bay, Murchison Bay, Sesse Islands, and Sango Bay (Uganda). 3.4 Among lake-wide actions the project would: assess and measure sources of nutrients causing eutrophication; measure fisheries-trophic state interactions; model and monitor lake circulation; define and measure the contaminant threat; harmonize regulation and legislation; monitor recovery and impact; and build institutional capacity. 3.5 The project would support the following specific regional and national program activities: (a) management of fisheries, including the establishment and operations of the Lake Victoria Fisheries Organisation [US$2.3 m], improvement of fisheries research and the information base for fisheries [US$13.3 ml, strengthening of extension, monitoring and enforcement capabilities of national fisheries administrations [US$14.1 ml; and studying and implementing a Fish Levy Trust [US$2.0 millioni; (b) management and control of the water hyacinth infestation [US$8.3 m]; (c) management of lake pollution and water quality, including strengthening and harmonizing national regulatory and incentive frameworks and enforcement capabilities, and establishing a lake-wide water quality monitoring system [US$9.6 ml, improvement of research and the information base for pollution control and water quality [US$4.3 ml, pilot investments in industrial and municipal waste management [US$1.7 m], and priority waste management investments [US$4 ml; (d) management of land use in the catchment, including improvement of research and the information base for pollution loading from the catchment, assessment of agro-chemicals, and pilot investments in soil 14 Lake Victora Environmental Management Project conservation and afforestation [US$9.2 m]; (e) wetland management, including improving the information base [US$3.4 ml, and pilot investments in sustainable management of wetland products [US$1.5 million]; and (f) support for institutions for lake-wide research and management, and pollution disaster contingency planning [US$4.0 m]. C. PROJECT DETAILS Fisheries Management [US$2.28 million] 3.6 A Convention for the Establishment of the Lake Victoria Fisheries Organisation (LVFO), drafted with FAO assistance, was discussed in the three countries in late 1993 and early 1994, and signed by all three countries on 30 June, 1994. The proposed LVFO will be presided over by a Council of Ministers responsible for fisheries. It will have an Executive Committee made up of Directors of Fisheries Research, a Fisheries Management Committee, a Scientific Committee, such other sub-committees and working groups as might be needed from time to time, and a Permanent Secretariat located in Entebbe, Uganda. The LVFO will promote better management of fisheries on the lake, coordinate fisheries management with conservation and use of other lake resources, collaborate closely with all existing bodies (public and private, governmental and non-governmental) dealing with the lake, and all programs for its management (especially those relating to water quality), coordinate fisheries extension and related training, consider and advise on introduction of any non-indigenous aquatic animals or plants into the waters of the lake, and disseminate information on Lake Victoria fisheries. 3.7 The Secretariat, headed by an Executive Secretary (assisted by a Deputy), will have four permanent higher level staff - a Senior Biologist, Senior Economist, Administrative Officer (Finance) and Administrative Officer (Information and Database). It will engage short-term consultants (a total of 50 months over five years) specializing in legal matters, socio-economics, fish processing technology, fish harvesting technology, and water hyacinth control. It will be financed by GEF (90 percent). The project will finance vehicles; renovations of offices; office equipment; personnel costs, and operation and maintenance expenditures. Fisheries Research [US$13.33 million] 3.8 The program for fisheries research will provide information on the ecology of the lake and its catchment, the biology of its flora and fauna, the impact of environmental factors on the lake system, and socio-economic implications of use of the lake's resources. This information will contribute towards improved ecological efficiency, greater biodiversity, and ecological balance in the lake system. The research program will be operated by scientists with the help and participation of the extension services, fisherfoLk community leaders, Government departments, and other stakeholders. Lake Victoria Environmental Management Project 15 3.9 The fisheries research component will have five sub-components: studies of fish biology and biodiversity conservation, aquaculture, socio-economics, database establishment, and a fish stock assessment. The stock assessment will be financed by the European Union under a separate agreement, and although it is described below to provide a complete outline of the fisheries research program, the LVEMP would ensure only its coordination with other project components. (a) Fish Biology and Biodiversity Conservation [US$6.58 million] 3.10 This program will identify the main factors affecting aquatic biodiversity, determine diversity in aquatic flora and fauna, document them, map their habitats, educate people on their importance, and propose ways to exploit them sustainably. The program will rectify the serious lack of knowledge about the entire aquatic population of the lake, focusing especially on non-commercial fish of great biological interest, their species composition, population structure, food and feeding habits, trophic relationships, reproduction and breeding habits, recruitment patterns, growth, oxygen tolerance, mortality, and migrations, as well as the other organisms which play key roles in sustaining the Lake Victoria ecosystem, including specifically other aquatic vertebrates (frogs, reptiles, birds and mammals), macroinvertebrates (insects, molluscs, Caridina), microinvertebrates (copepods, cladcerans, rotifers), phytoplankton (diatoms, cyanophytes, green algae), macrophytes, and bacteria. The primary aim of this program is to gain information with which to design initiatives to sustain a complex ecosystem of substantial scientific importance. The outcomes of the studies will be species distribution and habitat maps, information on the genetic make up and diversity of different populations, understanding of the causes of decline of fish species, understanding of the impact of environmental changes on the biology, behaviour and survival of declining species, guidelines for species conservation and restoration, an updated bibliography of Lake Victoria, training of scientists, and dissemination of information to stakeholders through reports, videos, and workshops. 3.11 This sub-component will be implemented by the Fishery Research Institutes in the three countries, KEMFRI, TAFIRI, and FIRI, and financed by GEF (90 percent). The project will finance vehicles and boats; office, laboratory and field equipment; training and workshops; technical assistance; personnel costs, and operation and maintenance expenditures. (b) Aquaculture [US$3.10 million] 3.12 This program aims at restoring and sustaining the survival of several endangered and threatened species of fish. The program will address the continuing pressures to introduce more fish species into the lake (to take advantage of their production characteristics or market attraction), but will do so by avoiding the unforeseen effects of exotic introductions. The program will study the domestication of indigenous species of high nutritional value. The aim is to perfect aquaculture methods for such species, to assist them to compete in the market place with exotic tilapiines and carp. The outcomes of the program will be restored populations of selected endangered and threatened species (particularly Oreochromis esculentus, Oreochromis variabilis, 16 Lake Victoria Environmental Management Project Labeo victorianus, Bagrus docmac, and Protopterus aethiopicus), improved fish supply to local riparian communities, return of delicacies to consumer markets, and development of commercial activity in ornamental species which will secure their survival rather than threatening it as at present. 3.13 This sub-component will be implemented by the Fishery Research Institutes in the three countries (KEMFRI, TAFIRI, and FIRI); the Fisheries Departments of the Ministry of Tourism and Wildlife (Kenya), Ministry of Natural Resources (Tanzania), and Ministry of Agriculture, Animal Industry and Fisheries (Uganda); in collaboration with local communities and NGOs. It will be financed by GEF (45 percent) and IDA (45 percent). The project will finance vehicles and boats; office, laboratory and field equipment; training and workshops; technical assistance; personnel costs, and operation and maintenance expenditures. (c) and (d) Socio-Economics and Database (US$3.65 million] 3.14 The aim of this program is to provide information which will be used to improve management of the lake resources in order that local communities will increase their benefits from the fishery, while sustaining the ecosystem from which the benefits arise. The initial actions will be to analyze and disseminate data from previous and ongoing projects on: (a) small scale fishing and fish commodity systems (financed by the International Development Research Center [IDRC]); (b) understanding the socio- economic impacts of changes in the lake fisheries (financed by the private MacArthur Foundation); (c) sustainable management of ecotones (transition areas between adjacent ecological communities) in collaboration with the University of Zurich; and (d) management strategies of fishing communities (financed by the EU). 3.15 The program will further provide information on current fishery distribution patterns, community involvement in harvesting up to marketing of fish, how activities of fisherfolk contribute to environmental degradation, nutrition, health and other social amenities of lakeside communities, alternative management systems incorporating different stakeholders, the contribution of fisheries to the three national economies, and the consequences of changes in fishing policies. The program outputs will be evolution of policies with greater community participation, a larger share for communities in the harvesting and marketing of fish, more fish available in local communities, and better health and social services for these communities. The database program will develop bibliographies and a central clearing house for information about the lake, an electronic communications network, and train librarians and other database managers. 3.16 This sub-component will be implemented by the Fishery Research Institutes in the three countries (KEMFRI, TAFIRI, and FIRI), in collaboration with Fisheries Extension, riparian universities, local communities and NGOs. It will be financed by GEF (23 percent) and IDA (67 percent). The project will finance vehicles and boats; office, laboratory and field equipment; books and journal subscriptions; training and workshops; technical assistance; personnel costs, and operation and maintenance expenditures. Lake Victoria Environmental Management Project 17 (e) Stock Assessment [financed separately by the EU] 3.17 The first comprehensive stock assessment survey since 1969/74, and the first since the far-reaching changes believed to have occurred in the ecology of the lake, this exercise will focus on prime commercial species, and will provide information about the size of the fish stock, distribution and movement patterns, population structure, breeding habits, estimates of potential yield, characteristics of fishing gear, catch rates, description of the lake bottom, and updated bathymetric maps. Outcomes of the program will be guidelines for fishery conservation, sustainable use, permissible quotas, closed seasons, protected areas, and proposals for an integrated education program. Fisheries Extension, Policies, Laws and Their Enforcement [US$14.09 million] 3.18 The intention in the project is to separate law enforcement and extension activities. The law enforcement activities will comprise harmonisation of legislation among the three countries, identification and establishment of closed fishing areas (gazetted sanctuaries important for fish breeding, nurseries and juvenile feeding) in Kenya and Uganda, and verification of those already set up in Tanzania, training and empowerment of fisheries law enforcement officers, and establishment of customs posts at selected border landing sites (Muhoru and Port Victoria in Kenya; Kirongwe and Rubafu in Tanzania; and Mizinda/ Kasensero and Sigulu Island in Uganda). The extension activities will comprise introduction of new techniques (such as lift netting and live bait fishing), small scale aquaculture, and promoting organisations of fisherfolk which will guard fisheries against illegal entry and gear thefts, act as channels for improved gear and credit, and assist with overall monitoring of fisheries in the lake. The program will begin in three pilot zones in the first year, and then be evaluated thoroughly before being expanded to a further six pilot zones in the third year, and five more in the fourth year. The program will also establish one fish quality control laboratory in each country (to carry out testing for microbes, heavy metals, pathogens, pesticides and other contaminants), and will study ways to reduce post-harvest losses of fish through improvements in handling and processing, and strengthening and harmonising data collection in the respective national Fisheries Departments. Included in the component are provisions for micro-projects in selected fishing communities. These will comprise small investments in community water supply from ground-water, sanitary facilities, local roads, and health facilities. Details of management arrangements for these are set out in the section on project implementation. 3.19 This component will be implemented by the Fisheries Departments of the Ministry of Tourism and Wildlife (Kenya), Ministry of Natural Resources (Tanzania), and Agriculture, Animal Industry and Fisheries (Uganda); in collaboration with the Fishery Research Institutes in the three countries (KEMFRI, TAFIRI, and FIRI), local communities and NGOs. It will be financed by IDA (90 percent). The project will finance vehicles and boats; office, laboratory and field equipment; books and journal subscriptions; training and workshops; technical assistance; construction of fish ponds; and construction of community facilities for water supply from ground-water, sanitation, roads, and health; personnel costs, and operation and maintenance expenditures. 18 lake Victoria Environmental Management Project Fish Levy Trust [US$2.03 million] 3.20 This component will study and implement a system to collect levies from the fishing industry and use them in support of fisheries and ecosystem management in the lake and its catchment. In the first year of the project a study will be carried out of mechanisms for revenue collection and disbursement already in operation in each country, and additional possibilities for revenue collection. In the second year of the project the findings of the study will be discussed and agreed among the three governments, and a system to collect and disburse levies will be established in the third year of the project. The study will be carried out by consultants under the supervision of the Fisheries Departments of the Ministry of Tourism and Wildlife (Kenya), Ministry of Natural Resources (Tanzania), and Ministry of Agriculture, Animal Industry and Fisheries (Uganda), in collaboration with the Lake Victoria Fisheries Organization. It will be financed by IDA (90 percent). The project will finance vehicles; office equipment; training and workshops; technical assistance; personnel costs, and operation and maintenance expenditures. Water Hyacinth Control [US$8.31 million] 3.21 The aim of the program is to establish sustainable long-term capacity for maintaining control of water hyacinth and other invasive weeds in the Lake Victoria Basin. This will be achieved by an integrated effort involving intensified publicity, legislation, and integrated pest management with community involvement. The control program will rely on mechanical methods and limited chemical interventions for rapid short term control in restricted areas, and biological agents for longer term control. Reducing nutrient inflows into the lake will be a vital element in long term approaches to dealing with the problem. The biological control program will rely initially on multiplication and release of two weevil species that have been used and found effective world-wide, and have already been imported, reared and released in Kenya and Uganda. The species are the chevroned water hyacinth weevil (Neochetina bruchi Hystache) and the water hyacinth weevil (Neochetina eichorniae Warner). These two species are complementary in their action. The possibilities will be explored for supplementing the weevils by later releases of the moth Sameodes albiguttalis. The main elements of the biological control program will be establishment of mass rearing capacity in units around the shores of the lake as rapidly as possible, a coordinated field release program involving local conununity participation, monitoring performance of biological control agents in the field, and development of a monitoring and evaluation protocol and training program. 3.22 Implementation of the water hyacinth control program will be led by the agricultural research organizations of the three countries, namely the Kenya Agricultural Research Institute (KARI) in the Ministry of Research, Technical Training and Technology, the Uganda National Agricultural Research Organization (NARO) in the Ministry of Agriculture, Animal Industry and Fisheries, and the Tanzania Department of Research and Training in the Ministry of Agriculture, Livestock, Cooperatives and Development. The agricultural research institutions will be responsible, in particular, for the program to multiply and disperse the biological control agents. National Water Hyacinth Steering Committees will be established in Lake Victoria Environmental Management Project 19 each country to oversee and coordinate the program, and to ensure the involvement of local communities and NGOs. The program will be financed by GEF (54 percent) and IDA (36 percent). The project will finance vehicles and boats; office, laboratory and field equipment; laboratory chemicals and herbicides; biological control agents; rearing facilities for bio-agents and renovation of offices and laboratories; training and workshops; technical assistance; personnel costs, and operation and maintenance expenditures. Water Quality and Ecosystem Management [US$9.58 million] 3.23 The aim of this component is to elucidate the nature and dynamics of the lake ecosystem by providing detailed information on the characteristics of the waters of the lake. The program will provide details of limnological changes, model and predict their short and long term consequences, and provide guidelines for ameliorating potentially disastrous changes. The program will provide quantitative information on nutrient loading and recycling in the lake (particularly the internal loading of sediment phosphorus); sources and mechanics of eutrophication and pollution and their effect on lake productivity (with a particular focus on ways to stabilize or reduce eutrophic status); phytoplankton communities and their composition; algal blooms and their dynamics; lake zooplankton, microbes, benthic flora and fauna, lake fly and their roles; primary production including estimation of lake carrying capacity; stratification of the lake and the increasing problem of anoxia; trophic inter-relationships; and lake palaeolimnology. 3.24 The program will consist of one core project, namely Management of Eutrophication [US$6.86 million], two pilot projects, Sedimentation Studies [US$0.63 million] and Hydraulic Conditions in Lake Victoria [US$0.95 million], and construction of a model of water circulation and quality in the lake, designed to help manage the problems. The core project aims to establish periodic assessment of physical and chemical characteristics of the lake system. It will measure temperatures in different strata, dissolved oxygen, conductivity, pH, factors affecting light penetration such as suspended silt/sedimentation concentrations, water clarity, and spectral characteristics, biochemical oxygen demand (BOD) levels, levels of heavy metals (mercury, chromium and lead), pesticide residues, abundance and species composition of phyto- and zoo- plankton, phytoplankton primary production, levels of B-coli and E-coli. Analysis of these and other data will establish rates of change in water quality, relate these to the observed status of inputs from the catchment, estimate the effects of poor water quality on the economy of the region, and establish the basis for a practicable pollution control program. 3.25 The pilot sedimentation study will estimate sedimentation rates at the mouths of three rivers, the Kagera (Uganda), Simiyu (Tanzania) and Nyando (Kenya). It will assess the rate of release of nutrients from sediments, analyze sediment-biota associations, and compare the data with soil losses from surrounding areas. The pilot hydraulic study will measure patterns of water circulation in the Rusinga Channel (Kenya), and in similar areas in Tanzanian and Uganda waters, (Mwanza Bay and Murchison/Pilkington Bays respectively) to determine the interaction between vertical and horizontal circulation components, improve existing estimates of hydraulic 20 Lake Victona Environmental Management Project retention periods in the lake, and develop simulation models of the dynamics of nutrients and phytoplankton which will be used to predict the impacts of eutrophication control programs and pollution intervention strategies. 3.26 Under the former Hydromet Project, in 1979/80, executed by the World Meteorological Organisation (WMO) a Lake Victoria Water Quality Model was constructed, designed to be linked with a hydrological model developed with UNDP/WMO assistance. Unfortunately, this model was not calibrated, tested, or validated. The basic process formulations in this model will be re-assessed to determine their current validity, bearing in mind that scientific information about the lake has increased since the model was constructed, and will increase still further under the LVEMP. In addition, knowledge about what kinds of modelling are most useful for management have changed in the interim, making it necessary for the model to be re- formulated, calibrated, validated, and applied under the project to develop and test management strategies for the lake. 3.27 Implementation of the program will be led by the Ministry of Land Reclamation, Regional and Water Development (Kenya), the Ministry of Water (Tanzania), and the Directorate of Water Development of the Ministry of Natural Resources in Uganda. They will collaborate with the fisheries research institutes, communities, and NGOs in the three countries, with the Ministry of Environment and Natural Resources, Ministry of Agriculture, Moi University School of Environmental Studies, and the Institute of Nuclear Sciences at Nairobi University (Kenya), the Ministry of Natural Resources and the University of Dar es Salaam (Tanzania), and the Ministry of Agriculture and Makarere University Departments of Zoology and Chemistry (Uganda). It will be financed by GEF (90 percent). The project will finance vehicles and boats; office, laboratory and field equipment; laboratory chemnicals and reagents; renovation of offices, laboratories, and monitoring stations; training and workshops; technical assistance; personnel costs, and operation and maintenance expenditures. Industrial and Municipal Waste Management [US$9.89 million] 3.28 This program consists of one core project, namely Management of Industrial and Municipal Effluents [US$4.28 million], two pilot projects on Integrated Tertiary Municipal Effluent Treatment [US$0.80 million], and Integrated Tertiary Industrial Effluent Treatment [US$0.81 million], and a component for Priority Waste Management Investments [US$4 million]. The overall aim of the program is to improve management of industrial and municipal effluent, and assess the contribution of urban runoff to lake pollution in order to design alleviation measures. The program will prepare inventories and classifications for all factories and industries in the catchment, assess treatment of effluent before discharge and its dilution and dispersion levels in the receiving water bodies, quantify pollution and nutrient flows from urban runoff, identify and characterise pollution "hot spots", formulate guidelines and effluent discharge standards, establish training arrangements for industrialists and local authorities, launch a public awareness campaign, and initiate pilot treatment projects in selected municipalities and industries. Lake Victoria Environmental Management Project 21 3.29 The pilot industrial effluent treatment will create "wetlands" to test tertiary treatment through filtration of industrial waste from the PanPaper Mill in Webuye (Kenya) before it discharges into the Nzoia River, from various industries in Mwanza town (Tanzania), and from various industries in Jinja (Uganda). The pilot municipal effluent treatment will create "wetlands" to test tertiary treatment through filtration of municipal waste in Kisumu (Kenya), Mwanza (Tanzania), and Jinja (Uganda). The program of Priority Waste Management Investments will include urgent rehabilitation and/or extension of urban sanitation systems which are currently discharging untreated waste directly into the lake. Under this sub-component the project will rehabilitate the wastewater treatment works in Kisumu (Kenya), construct a community-based simplified sewage scheme in a portion of Mwanza (Tanzania) to complement an expansion of the water supply system financed by the EU, improve a sludge disposal site in Bukoba (Tanzania), assist the National Water and Sewerage Corporation in Uganda to develop a long-term pollution reduction strategy, and modify the main effluent discharge into the lake at the Bugolobi treatment works in Kampala (Uganda) to increase the detention time of effluent and reduce pollution entering the lake. Details of management arrangements for these waste management investments are set out in the section on project implementation. 3.30 Implementation of the program will be led by the Ministry of Land Reclamation, Regional and Water Development (Kenya), the Ministry of Water (Tanzania), and the Directorate of Water Development of the Ministry of Natural Resources in Uganda. They will collaborate with municipal and local councils, and industries in all three countries, with the Ministry of Commerce and Industry, the Lake Basin Development Authority, and Moi University School of Environmental Studies (Kenya), the University of Dar es Salaam (Tanzania), and the National Water and Sewerage Corporation (NWSC) and Makarere University (Uganda). Postgraduate students from the three universities will take up research study areas under this project, and it is envisaged that the pilot experiments with artificial wetlands, in particular, will be carried out as student research studies. The program will be financed by IDA (90 percent). The project will finance vehicles and boats; office, laboratory and field equipment; laboratory chemicals and reagents; construction of artificial wetlands; feasibility studies and structures for sanitation; training, workshops, and demonstrations; technical assistance; personnel costs, and operation and maintenance expenditures. Land Use and Wetland Management [US$14.05 million] 3.31 This program consists of two core projects, namely Management of Pollution Loading [US$4.04 million], and Buffering Capacity of Wetlands [US$3.43 million], together with four pilot projects: Assessment of the Role of Agro-Chemicals in Pollution [US$0.86 million], Integrated Soil and Water Conservation [US$1.49 million], Sustainable Use of Wetlands Products [US$1.49 million], and Afforestation [US$2.80 million]. Building on the last estirnates of primary nutrients reaching Lake Victoria from its catchment, made in 1979/80 by the Hydromet Project, the pollution loading project will establish a water quality monitoring network throughout the catchment, estimate the effects of changes in land use planning on pollution loads in lake, and develop policies and programs to control non-point source pollution. The second project will investigate the buffering processes and capacity of Lake Victoria wetlands, 22 Lake Victoria Environmental Management Project and devise a management strategy for them. It will develop an inventory and classification of the wetlands, monitor nutrient loading in priority areas, simulate the changes of buffering function associated with threats to the wetland resources, assess the economic value of buffering functions, and prepare guidelines and investment proposals for introducing wastewater into wetlands, as well as rehabilitation and artificial wetland construction. 3.32 The pilot project for agro-chemicals will be implemented on selected sites in the Winam Gulf, Nyando and Nzoia catchments in Kenya, the Simiyu catchment near Mwanza in Tanzania, and the Kakira sugar estate on the lake shore in Uganda. It will carry out inventories of agro-chemicals in the pilot areas, conduct field trials on the fate of pesticides and nutrients applied on farms, monitor residues leaching out of the pilot catchments, and pesticide levels in receiving rivers, assemble and review a database of agro-chemical use in the Lake Victoria Basin, establish arrangements for disseminating information to all stakeholders, and mount training courses for extension services on the better use of agro-chemicals. The soil conservation pilot will be implemented in the catchments of the Simiyu, Nyando, and Kagera Rivers. It will quantify soil erosion and nutrient loss from different land covers and uses, design remedial measures and sustainable agricultural practices, develop systems to promote soil and water conservation, and establish demonstration units to disseminate successful soil and water conservation measures. The wetlands pilot project, in selected communities in each of the countries, will estimate the economic benefits from wetlands products (fish, papyrus, reeds, clay, livestock grazing, and agricultural products), develop management strategies for their sustainable use, and for the rehabilitation of specific degraded wetlands, evolve strategies for community participation in sustainable use, initiate pilot activities to demonstrate this use, and strengthen capacity of local NGOs and CBOs to undertake wise use activities. The afforestation pilot project will protect vital parts of the lake catchment by planting trees. It will increase awareness among communities on catchment protection and tree farming, develop local seed sources, improve management of existing forest reserves and create new reserves, and conserve forest biodiversity. 3.33 Implementation of the program will be led by the Ministry of Land Reclamation, Regional and Water Development and the Ministry of Agriculture (Kenya), the Ministry of Water and Ministry of Agriculture (Tanzania), and the Directorate of Water Development of the Ministry of Natural Resources and Ministry of Agriculture (Uganda). They will collaborate with communities, NGOs, and the Ministries or Industry and Community Development in all three countries, with the Ministry of Environment and Natural Resources, and the Kenya Agricultural Research Institute (KARI) (Kenya), the Ministry of Natural Resources, and the Tropical Pesticides Research Institute (Tanzania), the Ministry of Environment, and the National Agricultural Research Organization (NARO) (Uganda). National wetlands committees in all three countries would also be involved in the wetlands components, with assistance from the World Conservation Union (IUCN), which would continue to foster regional cooperation among the developing national wetlands programs. The sub-components for Management of Pollution Loading and Wetland Buffering Capacity will be financed by GEF (90 percent), the sub-components for Assessment of the Role of Agro-Chemicals in Pollution, Integrated Soil and Water Conservation, and Afforestation will be financed Lake Victonia Environmental Management Project 23 by IDA (90 percent), and the sub-component for Sustainable Use of Wetlands Products will be financed by both GEF (45 percent) and IDA (45 percent). The project will finance vehicles and boats; office, laboratory and field equipment; books and subscriptions to journals; laboratory chemicals and reagents; construction of raingauge stations; feasibility studies and structures for sanitation; training, workshops, and demonstrations; technical assistance; ground and aerial survey work; forestry seedling nurseries and creation of reserves; personnel costs, and operation and maintenance expenditures. Institutional Framework [US$3.98 million] 3.34 This program consists of three components, namely maintaining the coordinating Secretariats [US$2.75 million], support for riparian universities [US$1.06 million], and preparation of a Pollution Disaster Contingency Plan for the lake [US$0.17 million]. The three National Secretariats, which have proven successful in coordinating project preparation, will be strengthened by adding three positions: a Procurement/Disbursement Officer, an Operations Officer, and a Management Information Systems Officer. The Secretariats will provide a central contact point and information clearing house for all agencies implementing the program, and all donors supporting it. While the line agencies will be responsible for progress on their own components, and for monitoring and reporting on that progress, the Secretariats wir gather information from all the agencies in their respective countries, be responsible for overall monitoring, and prepare progress reports for decision making about the overall project. They will ensure compliance with IDA and GEF reporting, procurement and disbursement procedures (see the Project Implementation Plan, Annex 3). The Heads of the Secretariats will, when necessary, organize tripartite meetings of officials responsible for various components of the program. The Regional Secretariat in Tanzania will organize meetings, when required, of members of the Regional Policy and Steering Committee. This management and coordination component will be financed by GEF (90 percent). The project will finance vehicles; office equipment; regional and national meetings and workshops; technical assistance; personnel costs, and operation and maintenance expenditures. 3.35 The component for the riparian universities will strengthen facilities for environmental analysis and graduate teaching at Moi University School of Environmental Studies (Department of Fisheries), at the University of Dar es Salaam (Departrnent of Zoology), and at Makarere University (Department of Zoology). The component will be financed by GEF (90 percent). The project will finance vehicles and boats; office and laboratory equipment, chemicals and reagents; books and subscriptions to journals; and operation and maintenance expenditures. 3.36 Under the guidance of the Regional Secretariat in Tanzania, consultants preparing the Pollution Disaster Contingency Plan will draw up an inventory of hazards, hazardous sites, and vulnerable water uses and sites; review safety regulations; assess available facilities and planning provisions to deal with emergencies; implement a public education program, establish early warning systems, and develop a Regional Disaster Plan and Protocol to be agreed by the three governments. The component will 24 Lake Victoria Environmental Management Project be financed by GEF (90 percent). The project will finance technical assistance to undertake a pollution disaster study and prepare a contingency plan. D. PROJECT PRIORITIES 3.37 In this project the individual components fit together like a web, as befits a package of measures which addresses comprehensively the problems in an inter- connected ecosystem. Almost all components will contain a mixture of information- gathering, capacity building, and concrete actions to address the lake's problems. Much of the information-gathering will follow an adaptive environmental management approach, which involves learning by doing and adjusting or adapting rnanagement actions based on results. It is not easy, therefore, to separate actions from knowledge- building. It will be important for all components to be implemented from the beginning, and in all three countries simultaneously, at a comparable pace. 3.38 Project investments do, however, comprise a mix of activities in pilot zones, and activities carried out on a lake-wide basis. What is sequenced in the project is not the actions, themselves, but the pilot zones in which they are carried out. In the first year of the project, actions will be implemented in three pilot zones: Nyakach Bay in Kenya, Mwanza Gulf in Tanzania, and Napoleon Gulf in Uganda. Thereafter, groups of pilot zones will be phased in until by the end of the project actions will have been carried out in all 14 designated pilot zones. If there were to be funding crises, the response would be to postpone the work in the pilot zones planned for the outer years of the project. In this way the essential core of lake-wide activities would be preserved, as well as the coordinated nature of the adaptive environmental management approach in at least a sub-set of the pilot areas. Upon resolution of any funding crisis, work would be resumed with minimum disruption to progress. E. PROJECT COSTS AND FINANCING Cost Estimates 3.39 The total cost of the project, including physical and price contingencies, is estimated at US$77.58 million, as outlined in the table below. Project costs are shown in US Dollars, because three different domestic currencies are involved. Financing 3.40 The three governments would contribute US$7.6 million to the project, leaving US$70 million to be covered by donors. Incremental costs financed by the GEF amount to US$35 million. The remaining project costs would be financed by IDA with an allocation of US$35 million (Table 3.2). GEF Incremental Costs 3.41 Incremental costs of the project under GEF definitions are estimated to be US$38.8 million (details in Annex 7). In addition to financing the baseline and adjusted Lake Victoria Environmental Managemenf Project 25 baseline measures from non-GEF (IDA) sources, the three riparian governments have agreed to contribute US$3.8 million from their own resources to finance a part of the project's incremental cost. They have requested a GEF grant of US$35 million to fund the balance. Table 3.1 Project Cost Summary (US$'000) % % Total Project Component Local Foreign Total Foreign Base Exchange Costs A. Fisheries Management (LVFO) 314 1,649 1,964 84 3 B. Fisheries Research 5,893 5,910 11,802 50 17 1. Fish Biology and Biodiversity Conservation 2,618 3,164 5,782 55 8 2. Aquaculture 1,544 1,237 2,782 44 4 3. Socio-Economics Studies 1,332 1,048 2,382 44 3 4. Establishing Database 399 458 858 53 1 C. Fisheries Extension, Policies, and Laws 7,411 4,947 12,359 40 18 D. Water Hyacinth Control 5,423 2,042 7,465 27 11 E. Water Quality Monitoring 3,226 5,262 8,488 62 12 1. Eutrophication 2,720 3,409 6,129 55 9 2. Sedimentation (pilot study) 152 364 516 71 1 3. Hydraulic Conditions (pilot study) 138 700 838 83 1 4. Lake Victoria Management Model 216 789 1,005 78 1 F. Industrial and Municipal Waste Management 4,074 5,156 9,230 56 13 1. Management of Industrial and Municipal Effluent 1,871 1,897 3,768 50 6 2. Tertiary Municipal Effluent Treatment (pilot project) 481 260 740 35 1 3. Tertiary Industrial Effluent Treatment (pilot project) 462 260 722 36 1 4. Priority Waste Management Investments 1,260 2,740 4,000 69 6 G. Land Use and Wetland Management 8,093 4,468 12,560 36 18 1. Pollution Loading 1,962 1,603 3,566 45 5 2. Buffering Capacity of Wetlands 1,751 1,339 3,091 43 5 3. Assessment of Agro-Chemicals (pilot) 344 424 768 55 1 4. Soil and Water Conservation (pilot) 1,143 182 1,325 14 2 5. Sustainable Use of Wetlands Products (pilot) 969 366 1,336 27 2 6. Afforestation 1,924 552 2,476 22 3 H. Policy and Institutional Framework 3,097 2,193 5,290 41 5 1. LVEMP Secretariats 1,975 462 2,436 19 4 2. Support to Riparian Universities 319 628 947 66 1 3. Fisheries Levy Trust 803 953 1,755 54 2 4. Pollution Disaster Contingency - 150 150 100 1 Subtotal Base Costs 37,532 31,627 69,159 46 100 Physical Contingencies 3,550 2,604 6,155 42 9 Price Contingencies 707 1,482 2,270 65 3 TOTAL COSTS 41,869 35,713 77,582 46 112 26 Lake Victona Environmental Management Project Table 3.2 Financing Plan (US$ million) Project Component Governments GEF IDA Total % A. Fisheries Management (LVFO) 0.2 2.1 2.3 3 B. Fisheries Research 1.3 8.8 3.2 13.3 17 C. Fisheries Extension, Policies, and Laws 1.4 12.7 14.1 18 D. Water Hyacinth Control 0.8 4.5 3.0 8.3 11 E. Water Quality Management 1.0 8.6 9.6 12 F. Industrial and Municipal Waste Management 1.0 8.9 9.9 13 G. Land Use and Watland Management 1.4 7.4 5.3 14.1 18 H. Policy and Institutional Framework 0.6 3.6 1.9 6.1 8 TOTAL COSTS 7.6 35.0 35.0 77.6 100 F. RATIONALE FOR GEF AND IDA INVOLVEMENT 3.42 Lake Victoria is an international water body that is both of great economic worth to the three riparian countries and of great scientific and cultural significance to the global community, mainly in respect of its unique waterborne biodiversity. It is suffering severely from three of the four major global environment concerns highlighted in the GEF Operational Strategy for International Waters - degradation of water quality due to pollution from land-based activities; introduction of non-indigenous species; and excessive exploitation of living resources. It is also facing their typical consequences - potentially irreversible environmental damage, hardship to the poor and serious health concerns. With poverty endemic to the region and many competing claims for scarce development resources, the case for GEF-support to overcome the barriers to concerted corrective action is extremely strong. As called for in the operational strategy, the GEF assistance will act as a catalyst for the three countries to develop a better understanding of how the lake functions, learn how the actions of their populations in the lake basin affect the lake environment, and work out ways jointly with one another to implement a comprehensive approach to managing the lake ecosystem to achieve global environment benefits. The project is consistent with both the GEF waterbody-based operational program and with the integrated land and water operational program, while also having elements of the third, contaminant-based, operational program. The project will in particular address another priority in the operational strategy - the conservation and sustainable use of biodiversity in freshwater ecosystems. As one of the world's largest unique freshwater biodiversity habitats, Lake Victoria is a clear priority for GEF assistance. 3.43 The GEF funding for this project will make possible the elaboration of a strategic framework for a large program of investments in the lake basin during the project implementation period, particularly in municipal waste management and soil conservation, and wvill also lay the foundation for a longer program of investments over time in these and other areas. It will thus have an enormous "leveraging" impact, for the benefit of the national and global environments. The GEF financing of preparation Lake Victoria Environmental Management Project 27 succeeded in generating strong "ownership" of the project by the three governments which prepared it, and catalysed close collaboration at every stage among IDA, FAO, UNDP and UNEP. The information and pilot work carried out in the GEF project would orient ongoing investments and guide new ones during its five years of implementation, and far beyond. Within the next two years, under projects already begun, IDA and the European Union would finance improvements to municipal sewage treatment schemes in Kampala and Jinja in Uganda, and Mwanza in Tanzania. The funds would also finance a study of storm water drainage, solid waste management, and water reticulation in Kampala. 3.44 Several other major infrastructure projects are planned to begin implementation in FY98 which would finance water supply and urban sanitation in the lake basin, directly in support of the LVEMP. Further projects are planned to support natural resource management in the lake basin, including soil conservation and catchment afforestation. All of these projects will reduce pollution and eutrophication in the lake. While most of these projects were identified initially in the absence of the LVEMP, the latter will increase markedly the success with which they address the priority issues. The major projects still forthcoming will "take their signals" from the framework and findings of the LVEMP. Numerous smaller scale activities with bilateral support, implemented by local communities and NGOs, will also benefit from being planned in the context of the improved information base and management plans designed for the ecosystem as a whole, which will result from the LVEMP. 3.45 The project is consistent with the Bank's Country Assistance Strategy (CAS) for each of the three countries. The CAS for Kenya was discussed by the Board on January 31, 1996. One of the key elements of the strategy is to improve environmental management within the country, and to assist Kenya to respond to its conmmitments to enhance protection of the global environment. The CAS for Uganda was discussed by the Board on June 1, 1995. An important element of that strategy is to build domestic environmental management capacity, and in particular to address issues related to degradation of Lake Victoria. The CAS for Tanzania was discussed by the Board in March 1994, and a Progress Report was discussed by the Board on May 23, 1996. IDA financial support for the project is in line with two primary aims of the CAS, namely capacity building for improved public sector management, and creating a climate for environmentally sustainable investments. 3.46 The project would be the first substantial investment in the environment for IDA in two of the three countries following preparation of National Environmental Action Plans in all three. Various other donors have supported a range of initiatives in and around Lake Victoria, in smaller, uncoordinated, and sometimes incomplete ways. In the absence of a coordinated management system for the entire lake and its ecosystem, these smaller projects have sometimes fallen short, and continue to fall short, of realizing their maximum potential. Building on its wide-ranging relationships with all three governments, IDA has an important capability, and as implementing donor in this project an important opportunity, to support the development of such a coordinated management system. IDA also has the standing to mobilize scientific resources from across the globe in support of an initiative which has unprecedented interest to the global scientific community. 28 Lake Victona Environmental Management Project G. LESSONS LEARNED AND TECHNICAL REVIEW 3.47 This program would be the first of its kind within the region, addressing a complex set of managerial, scientific/ technical and institutional issues across three countries. It would aim to provide Governments with the necessary skills, information, technical and financial resources, and a proper institutional and legal framework to carry out successfully such an endeavor. It would build technical capacity to promote, assist and coordinate the various initiatives within a regional framework, and help design a comprehensive set of national policies and strategies based on lessons learned from field experience. An important lesson incorporated from past operations was to ensure that preparation be done by the countries themselves. The resultant ownership will have the usual national benefits, as well as being especially important in this program which crosses national boundaries, since the three governments have already gained valuable experience working together during preparation. 3.48 The present report has responded to the GEF Technical Review of the project by acknowledging the uncertainty about sources and mechanics of eutrophication, incorporating the specific management elements suggested by the reviewer, setting the stage for a new approach to modelling, reiterating the emphasis on management of the lake's problems as the aim of everything in the project, and delineating the project's large elements of capacity building. 4. PROJECT IMPLEMENTATION A. MANAGEMENT STRUCTURE 4.1 The Tripartite Agreement (signed August 5,1994) which set in motion a collaborative process of project preparation among the three countries, provided also for project implementation. In particular it established three National Secretariats, each headed by a high-level officer, selected by the respective governments, and supported by a modest staff. These Secretariats served an essential coordination role during project preparation, and it is planned that this role should continue into the project implementation phase. They would be strengthened by the appointment of an Procurement/Disbursement Officer, an Operations Officer, and a Management Information Systems Officer. Among other things, these three officers would ensure compliance with IDA and GEF reporting, procurement and disbursement procedures (see the Project Implementation Plan, Annex 3). The three Secretariats, one in each country, would provide a day-to-day central contact point and information clearing house for all agencies implementing the program, and all donors supporting it. While the many implementing agencies would be responsible for progress on their own components, and for monitoring and reporting on that progress, the Secretariats would gather information from all the agencies in their respective countries, be responsible for overall monitoring, and prepare progress reports for decision making about the overall project. The Heads of the Secretariats would also, when necessary, organize tripartite meetings of officials responsible for various components of the program. The Regional Secretariat in Tanzania would organize meetings, when required, of members of the Lake Victoria Environnmntal Management Project 29 Regional Policy and Steering Committee, which would also remain in place, with the same membership as it has had throughout project preparation. The Committee would have many roles, its most important being the mechanism for resolution of disputes arising during implementation of the program. 4.2 The Lake Victoria Fisheries Organization would assume overall coordination for components associated with fisheries, although as the project description outlines, implementation would be by individual national agencies, and the Regional Policy and Steering Committee would be responsible for overall program coordination, including coordination between the fisheries program as a whole and the rest of the program. B. IMPLEMENTING AGENCIES 4.3 The various national agencies would implement components of the projects as follows. The three Fisheries Research Institutes (KEMFRI, TAFIRI and FIRI) would play lead roles in all sub-components of fisheries research, and would collaborate with the Fisheries Departments of their respective governments in the fisheries extension, and with the Ministries of Water in the Water Quality components. For the latter components, the Ministries of Water would be the lead agencies, and they in turn would collaborate closely with the Ministries of Environment, Natural Resources and Agriculture in their implementation of the components on land use and wetland management. National wetlands committees in all three countries would also be involved in these components, with continuing assistance from the World Conservation Union (IUCN). The Moi, Makarere, and Sokoine Universities, and the Universities of Nairobi and Dar es Salaam, would be involved in many of the studies, including those on socio-economics. The water testing laboratories of the Kisumu and Mwanza Municipal Councils, the Uganda Water and Sewage Corporation, and the Lake Basin Development Authority (in Kisumu) would extend the reach of laboratories already operating or planned by the respective Ministries of Water. 4.4 In order to address the variations in implementation capacity, from country to country, and agency to agency, with some strong already but others less so, every sub- program makes extensive provision for capacity building. For the whole project in the three countries provision is made for more than 2,000 short term and on-job training courses, about 100 regional Masters Degrees, and 15 PhDs. Care will be taken to strike a balance in the training and its timing so that enough people are available to implement the project. 4.5 For the Water Hyacinth Control Program, national steering committees or task forces will be set up, and rearing units for biological control agents will be established by the respective national agricultural research institutes. Finally, the project will also draw on the resources of local and international consultants in areas where particular scientific expertise is called for beyond the abilities of staff in the implementing Ministries. 4.6 Because of the extensive scientific investments in the program, the worldwide scientific interest in Lake Victoria, the need to seek innovative solutions to solving environmental problems that draw on a broad spectrum of physical, biological and 30 Lake Victoria Environmental Management Project social sciences, and uncertainties associated with the dynamic lake ecosystem, it is also proposed to appoint a high level panel of internationally renowned scientists, initially with 7 members, to serve as an overall advisory group for the scientific studies in the lake. Possible scientific specialties for representation on the panel will be limnology, fish biology, zoology, entomology, plant physiology, microbiology, chemistry, meteorology, economics, anthropology, sociology, soil chemistry and physics, forestry, and ecology. The panel will contain at least three members representing the natural sciences and at least two from the social sciences, and its membership will be reviewed every two years, although members may serve unlimited terms upon reappointment by the nominating agencies. Following each two-yearly review, the panel will elect from among its members a corresponding secretary to facilitate communication within the panel. The panel members will be mutually acceptable to the three riparian states (as represented by the Regional Policy and Steering Committee) and to IDA. 4.7 The main aim of the Panel of Scientists will be to help ensure maximum benefits to the riparian states from activities of the intemational scientific community, by providing a means for improving the coordination of such activities and increasing their contribution to specific capacity building and problem solving in the lake basin. They will act as a standing committee of technical expertise to whom task and project managers under the LVEMP may refer technical issues and reports for comment and advice back to the referring managers. They will keep an up-to-date inventory of international, externally funded scientific research pertinent to LVEMP programs. Using electronic media such as the World Wide Web, they will keep the international scientific community informed about outstanding research issues being addressed by the LVEMP, in order to focus and mobilize that international community. They wir help to identify international training opportunities for researchers from the riparian countries, and encourage the formation of partnerships and consortia between regional universities and the international community of universities. They will meet once a year to review issues arising from project implementation, and could meet at other times if required, as well as being available individually, at the request of the Regional Policy and Steering Committee, to provide advice about specific issues. C. SPECIFIC IMPLEMENTATION ARRANGEMENTS 4.8 The project provides funds totalling about US$3 million for the three countries to support micro-projects in selected fishing communities. These will comprise small investments, costing up to US$15,000 each, in community water supply from ground- water, sanitary facilities, local roads, health facilities, and seed funds for assisting fishing communities to adjust to new regulations such as those related to fishing net mesh sizes. These micro-projects will address concerns directly related to the fisheries management and water quality emphases of the project, while providing incentives for communities to participate in components of the project across the board. The funds for these micro-projects will flow through the regional administrations, overseen by the Ministry of Tourism and Wildlife in Kenya, the Vice President's Office in Tanzania, and the Ministry of Agriculture, Animal Industry and Fisheries in Uganda. 4.9 The three Ministries responsible will each prepare an Operational Manual to guide all micro-project activities. It will contain, inter alia, criteria for identification, Lake Victoria Environmental Management Project 31 appraisal, implementation, supervision, monitoring and evaluation, reporting and accounting requirements, sample contracting documents, standard forms for processing, technical data on infrastructure projects, and procedures for carrying out environmental assessments. An Evaluation Committee will be established in each of the three Ministries, which will approve/reject project proposals from the regional offices. In the regional offices, the proposed projects will be screened by Project Officers who will assess the impact on the community and on special groups (e.g. poorer women), likely returns on investment, factors affecting effective use and sustainability, satisfaction of technical standards, sensitivity to environmental goals, realism of costs, arrangements for implementation and supervision, and commnitment of beneficiaries to maintenance (recurrent costs may be covered by allocation on the regional government approved budget). 4.10 Micro-projects must have at least 10 percent community cost-sharing, in the form of a financial contribution or through labor and materials. When micro-projects have been approved, the central Ministry will prepare a disbursement schedule, bidding documents, arrangements for procurement and contracts, review cost estimates, and sign a Financing Agreement with the respective Community Project Committee. Implementation of projects may be through self-help, by a Village Council or its Community Committee, by private contractors answering to the Community Committee, by Local Government Construction Units, or by an NGO contracted as a Collaborating Agency. While Community-Based Organizations (CBOs) will, in general, be preferred as implementing agencies, if NGOs are selected for implementation or to provide technical assistance they will be selected competitively by shortlisting several qualified NGOs, following IDA guidelines for use of consultants. Non-standard draft contracts between the administering Ministries and NGOs will be subject to review and "no objection" by IDA. Sole source selection of NGOs will be considered where justified by circumstances. 4.11 Funds will flow from a line budget in the administering Ministries, through the District Program Coordinators who will have an Authority to Incur Expenditure (AIE). Full authority for procurement of goods and services (which will follow normal government procedures satisfactory to IDA) will be vested in the districts. These include shopping and local bidding procedures and/or direct contracting where the first two methods are not feasible. Each micro-project will be supported by a technical proposal, basic financial analysis and budget approved by the District Steering Group, summarized in a sanction letter to be signed by the District Program Coordinator. 4.12 The priority waste management investments will be designed and implemented under the project. During the first two years the project will finance detailed design work for rehabilitating the existing wastewater treatment plant in Kisumu (Kenya), a simplified sewerage system for a portion of Mwanza (Tanzania), improvements in sludge disposal in Bukoba (Tanzania), and civil works on the main effluent discharge at the Bugolobi treatment works in Kampala (Uganda). In addition, during the first two years, the project will finance development of a long term pollution reduction strategy by the National Water and Sewerage Corporation (NWSC) in Uganda. In the third and fourth years of the project, the civil works in Kisumu, Mwanza, Bukoba, and at the Bugolobi treatment works will be constructed. Engagement of consultants to prepare 32 Lake Victoria Environmental Management Project the detailed designs and the strategy, and contracting of civil works, will follow procedures acceptable to IDA as set out in the section on Procurement. D. IMPLEMENTATION REVIEW 4.13 As they collaborated during project preparation, IDA, UNDP, and UNEP will also collaborate during reviews of implementation. IDA will have overall responsibility for review, UNDP will focus on stakeholder consultation and participation aspects of the project, and UNEP will focus on water quality aspects of the project. As part of the Mid-Term Review of the project (by March 1999), the three governments will prepare an updated analysis of transboundary environmental concerns, to guide the second phase of project implementation, and set the stage for subsequent initiatives. The Implementation Completion Report prepared by the three governments at the end of the project will include a revised Strategic Action Program, containing an outline of interventions needed to address priority problems. IDA will use this as the basis for convening a donors' meeting to seek commitments to support such interventions. E. PROCUREMENT 4.14 The entities responsible for coordinating program implementation and procurement will be the LVEMP National Secretariats in the respective countries, the Ministry of Environment and Natural Resources in Kenya, the Ministry of Natural Resources in Uganda, and the Department of Environment in the Vice President's Office in Tanzania. They would consult with the implementing sector Ministries and their research organizations dealing with water, fisheries, and agriculture. Each implementing agency will be responsible for procurement for the project components assigned to it. The Lake Victoria Fisheries Organization (LVFO) will be the implementing and procuring agency for its activities. 4.15 IDA Guidelines for Procurement (1995) and IDA Guidelines for Use of Consultants (1981) will be followed for all project components funded by the IDA Credits and the GEF Grants. The Bank's Standard Documents for Procurement of Goods (1995) and the Bank's Standard Form of Contract for Consultants' Services (1995) will be used for all procurement under International Competitive Bidding (ICB) procedures and consultancy contracts for Technical Assistance, respectively. Before commencing procurement under National Competitive Bidding (NCB), and prior to Credit Effectiveness, draft bidding documents will be finalised in consultation with IDA. Standard bid evaluation reports developed by IDA will be used in presenting evaluation reports to IDA. Procurement Arrangements 4.16 As part of the Project Implementation Plan (PIP), a procurement plan for major contracts has been prepared for the project. Standard procurement processing times for key activities were agreed with each of the participating Governments at negotiations. 4.17 Procurement of works, goods and services for all IDA/GEF financed components will be coordinated centrally in each country by its LVEMP National Lake Victoria Environmental Management Project 33 Secretariat (LVEMP), but processing of bidding documents will be handled by the sectoral ministry/agency in charge of project implementation. However, in the case of common items such as vehicles, motor cycles, and office equipment, procurement will be "bulked" at the national level. Procurement of these "bulked items" will be processed by the LVEMP National Secretariats in each country. The National Secretariat in each of the participating countries will be strengthened for this purpose by the addition of a qualified procurement/disbursement specialist familiar with International Competitive Bidding (ICB) and procurement procedures. 4.18 The Category of Works includes civil works, on a pilot scale, for creation of tertiary "wetlands" to test the treatment of municipal effluent using a system which could be later adopted on a larger scale. The works would include design of the "wetland", construction of diversion channels, pipes, sluice valves, gates, platforms, access road(s), environmental protection works, and land development works. No ICB procurement of works is foreseen due to the small scale of construction at dispersed locations (contracts ranging from US$5,000 to US$100,000). Ministries that do not have the required technical expertise will engage consultants to design and supervise civil work contracts. Contracts for goods, including vehicles and equipment would be grouped into packages of US$100,000 or more wherever practicable, and procured through ICB. 4.19 Prior Review. All procurement packages for civil works, goods, supplies, materials and maintenance contracts with an estimated contract value above US$100,000 wir be subject to IDA's prior review, in accordance with Appendix 1 of the IDA Guidelines. All consulting contracts with firms with a contract value above US$100,000 or with individual consultants with a contract value above US$50,000 will be subject to IDA's prior review. In addition, all terms of reference for proposed consulting assignments wil be subject to IDA's prior review. 4.20 In order to ensure that appropriate procedures are being followed, the first three contracts for goods, civil works, and consultancies, irrespective of contract value, will be subject to IDA prior review. During supervision missions, IDA will review one in five randomly selected contracts which are below these prior review thresholds. 4.21 Procurement Methods. The procurement of vehicles, motorcycles, bicycles, office equipment, and supplies will be carried out in reasonable packages of similar goods under the following procedures (aggregate amounts for non-ICB procedures are shown in the respective procurement table for each participating Government, for the GEF Grant and the IDA Credit): * International Competitive Bidding (ICB), if the estimated contract value per package is more than US$100,000; * National Competitive Bidding (NCB), if the estimated contract value per package is more than US$50,000 but less than US$100,000; * International Shopping Procedures (ISP) in accordance with Section III of the IDA guidelines, on the basis of at least three quotations from reputable 34 lake Victoria Environmental Management Project suppliers in two different countries, if the estimated cost per package is more than US$20,000 but less than US$50,000; as an alternative to ISP, Inter- Agency Procurement Services Office (IAPSO) procurement procedures may be followed; * National Shopping Procedures (NSP) in accordance with Section III of the IDA Guidelines, on the basis of at least three quotations from local suppliers, if the estimated cost per package is less than US$20,000; * The aggregate amounts for ISP and NSP, respectively, would be 60 percent and 40 percent of the Category "Other" for each GEF Grant and IDA Credit. 4.22 Technical Assistance Consultancies. The selection of consultants to provide technical assistance will be carried out according to IDA Guidelines, including shortlisting, letters of invitation and evaluation of technical and price proposals. General procurement notices issued annually will highlight major consulting assignments, which will assist in establishment of shortlists. Selections for short-term assignments and the selection of individual consultants for contracts below the prior review threshold will follow procedures specified in Section V of the IDA guidelines. 4.23 The selection of NGOs to provide Technical Assistance will be competitive through shortlisting of several qualified NGOs, and otherwise will follow IDA Guidelinesfor Use of Consultants. 4.24 Training. Each implementing department and agency will prepare an annual tr-aining plan and submit it to the respective LVEMP National Secretariat. The training program will identify the subjects and courses for training, their timing, duration, estimated costs, name and location of the training institutions, the names of the persons proposed, and the justification for their training. The training plans will be submitted to IDA for approval, the first within three months of Credit Effectiveness, and subsequent annual plans prior to the commencement of each fiscal year. 4.25 Procurement Monitoring. During project implementation the LVEMP National Secretariats will provide quarterly reports on progress of procurement highlighting difficulties encountered in the past, and how they would be addressed in the future to ensure timely project completion. F. DISBURSEMENT 4.26 The proposed IDA Credits, respectively of SDR 8.9 million for Kenya, SDR 7.0 million for Tanzania, and SDR 8.4 million for Uganda, the proposed GEF Grants, respectively of SDR 8.0 million for Kenya, SDR 7.2 million for Tanzania, and SDR 9.2 million for Uganda, would be disbursed over a period of 6 years with an expected project completion date of June 30, 2002, and a closing date of December 31, 2002. The schedule of estimated disbursements is in Annex 2. 4.27 Disbursement Procedures: Disbursements from the IDA Credit will be in accordance with normal IDA procedures set out in the Disbursement Handbook Lake Victoria Environmental Management Project 35 (November 1992). Once agreement has been reached on the annual work program and budgets with the respective implementing agencies, that is the LVEMP National Secretariats and the focal Ministries in each country, or the LVFO as the case may be, disbursements from the credit will be made following the standard procedures, including: reimbursement of expenses incurred by the LVEMP National Secretariat, the Ministries of Environment and Natural Resources, or the LVFO (as the case may be) against submission of disbursement requests, direct payment to suppliers or replenishment of special accounts. 4.28 To facilitate disbursement, IDA will advance a sum of US$500,000 for the Lake Victoria Environmental Management Program to the LVEMP National Secretariats in each of the three countries into Special Accounts in US Dollars to be opened with a commercial bank acceptable to IDA. Upon effectiveness the advance amounts will be deposited to the Special Account and subsequent amounts deposited against disbursement application(s). Replenishment applications for the Special Accounts would be submitted monthly or whenever the Special Account balances are reduced by one third, whichever comes first. The account may be used to pay for expenditures in either local currency or foreign exchange through the commercial banking system, against any category of expenditure. All replenishments should be fully documented except in the case where statements of expenditure (SOEs) are authorized. 4.29 Disbursements by IDA against Statements of Expenditure (SOEs): the respective project implementing agencies may claim reimbursements on the basis of statements of expenditures (SOEs) for: (a) Goods costing less than US$100,000 equivalent. (b) Consultant contracts, costing less than US$100,000 equivalent for firms, and less than US$50,000 for individuals. (c) All local training, workshops and studies. (d) All training costs less than US$10,000, and all operating costs. The respective implementing agency will retain all the relevant supporting documentation for reimbursements of SOEs for inspection by IDA. During the course of the annual audit of the project accounts, the auditors will certify that all expenditures claimed under SOEs have been properly incurred for the project. G. ACCOUNTING AND AuDrrs 4.30 A single set of consolidated accounts will be prepared for each component under the program. For preparation of the component accounts, and records of project activities, including SOE's and the Special Account in accordance with sound accounting practices, responsibility will rest on the accountants appointed for this purpose under the program (in the LVEMP National Secretariats and the LVFO when established) under the Ministry of Environment and Natural Resources in Kenya, the Vice President's Office in Tanzania, and the Ministry of Natural Resources in Uganda. 36 Lake Victoria Environmental Management Project Assurances were obtained during negotiations that the Governments will have the records and accounts of the Project, including the Special Accounts and SOEs, audited for every fiscal year, by independent auditors acceptable to IDA, and that it will submit the audit reports to IDA within six months of the end of every fiscal year, with a separate opinion by the auditors on SOEs. 4.31 Foreign exchange Special Accounts will be established by each country for the program with an international commercial bank of good repute, on terms and conditions satisfactory to IDA. Upon credit effectiveness an initial deposit of US$0.5 million would be made into the Special Account of the Lake Victoria Environmental Management Program in each country, representing about four months of IDA/GEF disbursements. Operation of these Special Accounts will follow IDA procedures, and the account will be replenished on the basis of regular monthly applications from the LVEMP Secretariat or the LVFO, documenting expenditures from the account. H. SUSTAINABILITY AND PARTICIPATION 4.32 The two most important elements of sustainability are stakeholder ownership, and provision for fiscal continuance. They have been addressed by a highly participatory mode of project preparation, and will be addressed during implementation by special efforts to involve local communities, and support for a Fisheries Levy Trust study to seek sources of funds for ongoing support for lake ecosystem activities. 4.33 Catalyzed by GEF financing, the three governments prepared the project themselves, in the process resolving many issues among them, demonstrating good technical collaboration, and generating strong ownership for the implementation phase. The Tripartite Agreement signed in August 1994 covered both preparation and implementation, thus providing for the implementation phase a continuing legal framework which has already been tested and found sound. Institutional arrangements which have proved their worth during preparation - especially the structure of National Secretariats and a joint Policy Steering Committee - will be continued unchanged for implementation, except that the Secretariats will be strengthened by the addition of specialized personnel. 4.34 Supported by the UNDP, special efforts during preparation were made in all three countries to involve communities around the lake in generation and discussion of project proposals, along with information-gathering to ensure that project proposals address the needs of local communities. In all three countries consultants were engaged who visited communities, women's groups, projects of community-based organisations and NGOs in fisheries and fish processing, soil conservation, wetlands development, and water hyacinth control, among many others. In Tanzania, for example, a study of community needs was conducted in three regions, 12 districts, 24 fishing villages and more than 85 groups or communities. The consultants also worked with NGOs and others to conduct stakeholder workshops, and with the government working groups to incorporate a community focus into the preparation report. The large emphasis on fisheries extension is one of many outcomes of this process. Others include the provision for community micro-projects among the investments which the project Lake Victoria Environmental Management Project 37 supports, and the proposals for community involvement in many of the research programs to be conducted under the project. The government preparation report acknowledges that "one of the major setbacks in aquatic resource management in East Africa is the general lack of community participation in management programs", and notes that such participation "is considered key to the successful implementation of this program." 4.35 Throughout the project special efforts will be made to involve local communities, and the capacity of a number of local NGOs and CBOs will be strengthened so that they can facilitate the process of community participation and ownership, and lead the communities in undertaking wise use activities of the resources in the lake and its basin. A special feature of the Fish Biology and Biodiversity Conservation program implementation, for example, will be attempts to involve local communities in identification of issues, tagging and recapture efforts, return of immature fish, surveillance of protected areas, sampling of commercial catches, protection of research equipment, and compilation of research data. Many of the other scientific initiatives will involve communities in carrying out the measurements, and in caring for monitoring equipment. For the water hyacinth control program, in particular, it will be essential for local people to understand and assist with the biological control efforts. 4.36 The project has community participation woven into virtually every component, funding for micro-projects, a great deal of community training, financing for hundreds of stakeholder workshops, and provision for community participation in everything from scientific studies to water hyacinth control, fisheries research to own-enforcement of agreed fishery regulations, sustainable use of wetlands to soil conservation, with benefits springing from better fishing management, aquaculture, higher quality products, lower post-harvest losses, cleaner water, more control over local fishing beaches, and construction of community assets. 4.37 Acknowledging that availability of reliable and adequate funding is essential for management of fisheries, which involves continuing research, extension, monitoring and enforcement, the three governments have proposed to study and implement jointly a program in which funds raised from the commercial fisheries themselves would contribute to underwriting fisheries management in the longer term, as well as assisting some of the central monitoring and management initiatives to become fiscally sustainable. The study will identify sources of funds, and also examine in depth the issues involved in managing such funds on a regional basis. The LVEMP includes financial support for establishing a shared Levy Trust Fund among the three countries, should the study show this to be feasible. I. MONrrORING AND EVALUATION 4.38 The project is designed to be a mixture of information-gathering, capacity- building, institution establishment, and actions to deal with the environmental problems of the lake and its catchment, with an emphasis on fisheries management, water hyacinth control, improving water quality, and land use management (including wetlands). A central concern is to reduce the flow of nutrients and pollutants into the lake, and reverse some of the adverse environmental developments of the past. This 38 Lake Victoria Environmental Management Project project will attempt to lay the foundations in these areas, and provide a "central core" around which will coalesce a larger program of investments to clean up the lake, and establish sustainable development of the lake and its catchment in the face of the growing population pressures likely to be experienced. 4.39 It will be difficult to isolate and measure the project's impact on development in the lake and its catchment. Although there are some specific characteristics of the lake which can be measured - water quality, fisheries yield, and ecological stability - the lack of reliable historic data will make it hard to calculate in an exact way the extent to which the LVEMP itself is responsible for changes noted, since these have to be considered against some prediction of what would have happened without the project. 4.40 Monitoring of the lake catchment and of the LVEMP will focus on measuring the state of the lake (water quality, fish stocks, and species richness) and measuring (or estimating) changes in the inputs to the system (such as fishing effort, and loads of key pollutants). Specific indicators of project impact will include (a) reductions in the nutrient and fecal coliform counts from towns bordering the lake; (b) reductions in sediment and phosphorus loading in rivers flowing into the lake; (c) reductions by at least 50 percent over five years in significant industrial pollutants entering the lake; (d) stabilizing the Nile perch catch at least at current levels, and increasing the recovery of other species; (e) measurable reduction in the infestation of water hyacinth; and (f) stabilization of areas retained as wetlands. 4.41 The main indicators of project implementation success will be (a) building capacity within the riparian universities, the line ministries, the LVEMP secretariats and the riparian communities for environmental analysis, conservation and adoption of cohesive management practices on and around the lake; (b) harmonizing among the three countries legislation addressing management of fisheries and environmental variables important in the lake basin, and improved enforcement of this legislation; (c) establishment of the Lake Victoria Fisheries Organization (LVFO); (d) completion of gazetting and regulating fish landing sites within the pilot zone areas and enforcing acceptable fishing practices within a 5 km radius of fishing villages within these areas, with full participation of lake shore fishing communities; (e) establishing sustainable long-term capacity for management and control of water hyacinth and other invasive weeds in the Lake Victoria Basin, through integrated weed control methods and community involvement; (f) establishing a lake wide water quality and rainfall monitoring system with agreed parameters to generate information on eutrophication management and pollution control; and (g) completing a full inventory and resource survey of Lake Victoria wetlands, and preparing investment proposals for the economic management of these wetlands, including their rehabilitation. Lake Victoria Environmental Management Project 39 5. PROJECT BENEFITS AND RISKS A. BENEFITS Background 5.1 The LVEMP is a comprehensive program aimed at rehabilitation of the lake ecosystem for the benefit of the people who live in the catchment and its area of influence. The scientific evidence shows that the present methods of exploitation and development in the catchment are unsustainable, and that without intervention there could be serious environmental and related socio-economic consequences. The most pressing concern is a possible decline in the very valuable fishery (currently worth about US$320 million annually in export revenue), but this predicted decline represents merely an immediately obvious outcome of the loss of resilience of the ecosystem. Sediments and pollution are degrading water quality, increasing urbanization and agricultural expansion are both resulting in the loss of wetlands -- including swamps and satellite lakes that still shelter a remnant of a once spectacular native aquatic fauna, changes in feeding chains and trophic systems since the introduction of exotic fish species are trending toward a highly unstable fisheries monoculture, and -- a fundamental and ominous change -- the anoxic portion of the lake waters (a biologically almost dead zone) has been steadily increasing over recent years. 5.2 The fundamental objective of the LVEMP is to restore a healthy, varied lake ecosystem which is inherently stable and which can support, in a sustainable way, the many human activities in the catchment. Development pressures in the catchment are increasing because of natural population growth and migration from poorer and less fertile rural areas, and the multi-purpose central role of the lake is becoming increasingly important even as its capacity to cope is being threatened. 5.3 The economy of the lake catchment produces in the order of US$3-4 billion annually and supports an estimated population of 25 million people at standards of living in the range of US$90-270 per capita p.a., based on national figures. The lake catchment economy is principally an agricultural one, with a number of cash crops (including exports of fish) and a high level of subsistence fishing and agriculture. The quality of the physical environment is therefore a fundamental factor in maintaining and increasing the living standards of the growing population. Gross Benefits 5.4 The main economic benefits of the overall LVEMP derive from avoiding the losses that can be anticipated if effective action is not taken. According to the best understanding of the local and international scientific research community, as documented in the material presented by the Regional Task Forces for project preparation, the major consequences of not halting the present trends could be: (a) a decline in the overall fishery as a result of both overfishing and deterioration of lake water quality; 40 Lake Victoria Environmental Management Project (b) increasing extent and severity of water hyacinth infestation; (c) unsuitability of the lake water for domestic supply or animal watering; (d) continued degradation of the wetlands. 5.5 The regional benefits of the programme would be the incremental avoidance or reduction of damage costs associated with these consequences, beyond the damage avoided as a result of actions that would have been taken to achieve local benefits. In addition there would be other benefits as a result of bringing forward projects which are in themselves economically justified (such as soil conservation or industrial pollution control). (a) Fisheries 5.6 The most dramatic and direct effect of not taking action would be the onset of instability in the Nile perch fishery. One possible scenario would be a highly variable and unpredictable annual catch, which could drop in some years to as little as 10 percent of current levels. On the other hand, fisheries models, which still need to be verified, suggest that a sustainable fishery could be developed which would allow annual yields of perhaps 90 percent of current levels, still dominated by Nile perch but with a wider range of other species. 5.7 The value of moving to the sustainable level of catch can be estimated, on a conservative basis, as the difference between the income stream from 90 percent of the current catch and that from an average 50 percent of the current catch, calculated after year 5 of a management programme: Export value of a sustainable fishery: 90% of $320m p.a. = $288m p.a. Export value of an uncontrolled fishery: 50% of $320m p.a. = $160m p.a. Difference, starting from year 6, attributable to the LVEMP = $128m p.a. Present value of this revenue stream at a 12 percent discount rate: = $600m. 5.8 The major potential benefit of avoiding the projected collapse of the fisheries would therefore be preserving export revenues with a present value of US$0.4-0.8 billion, depending on the assumptions used. The direct revenues to the fishing communities on the lake, from these export fisheries, are estimated to have a total present value of US$0.2-0.4 billion. These communities would receive additional benefits from two sources: (a) that portion of the value added in processing and packaging which is distributed to them in the form of payments for good and services, estimated to have a present value of US$40-80 million; and (b) income from local production and marketing of fish, estimated to have a present value of US$10-20 million. Moreover, one objective of the LVEMP is also to increase the proportion of local food fish in the system and the benefits of the program therefore include a real increase in the local fishery, which would be at least of the same order of magnitude as the loss avoided. The total present value of the impact of the LVEMP on the local fish economy would therefore be US$2040 million. Lake Victoria Environmental Management Project 41 5.9 On reasonable assumptions, therefore, it is estimated that successful implementation of the LVEMP could protect annual export earnings from the fishery to the extent of about US$128 million per annum, which represents a present value of exports of US$600 million, and of revenue to the lake community of US$240-480 million. In addition, the present value of the local fishery would be increased by US$20-40 million over the case where no action is taken. 5.10 Reversing the direct loss of revenue would have major impacts through the various industries and activities which support the fishermen active on the lake. It has been estimated that there is a multiplier of about 5 in terms of the numbers of people involved in these supporting activities and therefore half a million people, including workers and their families, would be affected by reversing the loss of revenue. Water hyacinth 5.11 The spread of the water hyacinth infestation is imposing a wide range of direct costs on the lake community. These costs include: - delays in commercial waterborne transport of people and goods (in some cases reported to result in a 10-20 percent increase over scheduled times); - increased operating costs (and possible loss of revenue) for hydropower production at Owens Falls Dam, due to clogging of water intakes; - loss of fishing time (and revenue) as a result of blocking of the beaches; - increased difficulty and time spent on gathering water in villages where access to traditional water collection areas is blocked or dangerous (because of snakes or crocodiles in the weed); - blockage of intakes and loss of production at urban and industrial water supply systems. 5.12 Some initial estimates have been made for these costs but further data will be required to refine the estimates. It should be noted that these figures represent the present costs: the water hyacinth infestation is increasing at a rapid rate and - unless controlled - will spread and also become more of a problem at existing sites. In the absence of a successful control program, the following are the estimated costs within five years: (a) maintaining a clear passage for ships to dock at Port Bell in Uganda: US$3-5 million p.a.; (b) cleaning intake screens at the Owen Falls hydroelectric power plant at Jinja in Uganda: $1 million p.a.; 42 Lake Victoria Environmental Management Project (c) losses in local fisheries from accumulation of water hyacinth at fishing beaches and landing sites around the lake making it difficult or impossible for fishing boats to be launched or recovered: US$0.2 million p.a. but with a very serious local impact; (d) loss of the beaches as a water supply for domestic, stock and agricultural purposes: US$0.35 million p.a.; (e) loss of supply or increased maintenance costs in urban water supply schemes because of blockages of the water intakes by water hyacinth: US$1.5 million p.a.; (f) small-scale horticultural irrigation schemes rendered useless because of blockages of channels and pipes with hyacinth: no costs have yet been attributed to these losses but they are important from a distributional viewpoint since such schemes are being developed to help women in the poorer lakeshore areas. 5.13 The total of these direct costs attributable to the water hyacinth (at its present levels) is estimated to be US$6-10 million p.a., with a present value of US$25-40 million. This figure can be compared with the estimated US$4.5 million cost for the Ugandan government's emergency action program to tackle the problem, which must represent a lower bound to estimates of the damage in what is only part of the total shoreline. Water quality 5.14 Deteriorating water quality will have a number of direct effects, the avoidance of which can be counted as potential benefits of the programme. These include: - additional water treatment costs to deal with increasing levels of algae; - impacts on water available for cattle: algal blooms can render water unsuitable for cattle and in extreme cases are known to be fatal to animals; - loss of potential tourist revenue: polluted or foul-smelling water would prevent the expansion of the present (low) level of tourism to the lake; - health effects of increased malaria and bilharzia as a result of stagnant and polluted water. 5.15 The costs of water supply improvements can be calculated once the extent of supply systems round the lake are detailed. As a first estimate, assuming (as before) that one million people are affected, an additional cost of US$1 per capita would mean US$1.5 million p.a. at present, but this would increase as the population connected increased and a value double this would be quite reasonable, i.e. US$3 million p.a.. The costs of water for animals is more difficult to estimate but costs of $1 per beast spread over half a million cattle in the vicinity of the lake are plausible. A minimum cost Lake Victoria Environmental Management Project 43 associated with the decline in water quality is therefore estimated at US$3.5 million p.a.,(present value US$15 million) and increasing. Wetlands 5.16 Given the lack of data on the type and extent of wetlands it is not possible to estimate the value of preserving these systems, but a wide range of functions of wetlands have been identified, both in general and for Lake Victoria in particular. These include: buffering of the impacts of increased loads of nutrients and sediments; breeding areas for fish and animals of value to the local population; protection of local water supply sources; provision of papyrus and other materials of commercial value. Preserving the wetlands is very important for sustaining biodiversity, as well as for helping to maintain the lake as a functioning and stable ecosystem. 5.17 On the other hand, development of wetlands has been promoted because of their potential for increased agricultural production and because of the perceived health problems associated with wetlands (such as mosquitoes and tsetse fly). Further work is required to understand and quantify the benefits of preserving key components of the existing wetlands systems but the balance of professional opinion, supported by informed local comment, is that the net value of preservation would be high. Biodiversity 5.18 One objective of the LVEMP is the preservation of the existing richness of the haplochromid fish fauna because of its scientific interest and its role in providing a resilient ecosystem for the whole lake. The ecosystem support benefits are included in the valuation of stabilizing the fisheries, but the intrinsic and scientific value of the biodiversity that is believed to be threatened under current conditions are additional benefits for which no valuation is yet available. Summary 5.19 The major direct economic benefit for which the program lays the foundation would be avoidance of the predicted collapse in the fisheries, which is estimated to have a present value to the lake community of US$270-520 million. 5.20 The water hyacinth problem, which is rapidly becoming more severe, is estimated to have an annual cost of US$6-10 million under current levels of infestation. These costs, whose present value is an estimated US$2540 million, as well as even larger costs which might be associated with increased infestations in the future were nothing to be done, would be largely avoided if the LVEMP were successfully implemented. 5.21 Deteriorating water quality may impose additional water supply costs which are estimated to be a minimum of US$3.5 million p.a. (present value US$15 million) and would increase considerably without action. 44 Lake Victoria Environmental Management Project 5.22 Other benefits arising from the preservation of wetlands and of biodiversity have not been valued here. Net Benefits 5.23 The costs of achieving the benefits identified here will include the direct costs of the LVEMP, which is a regional program, and of national actions which are taken in support of the program. Many of the national expenditures, in particular, will be economically justified in their own right (for example, fisheries post-harvest improvements or provision of sewerage) and so the effect of the LVEMP will be to bring forward in time the net benefits of these programmes. In such cases, the costs and benefits attributable to the LVEMP will be the marginal ones related to the changes in timing or focus of the national programmes. 5.24 Typical of the projects to be tackled as national concerns, within the framework of the LVEMP, which would be expected to produce net benefits in their own right, and where the costs attributable to the LVEMP may be exceeded by the benefits achieved through bringing the projects forward would be: • expansion of artisanal fishing and processing; * reduction in post-harvest fish losses; * implementation of water hyacinth control; * wetland conservation; * improved pasture management; * catchment soil conservation; * rural water and sanitation; * urban sewerage upgrading; * industrial pollution abatement. In so far as these projects can be implemented under existing or proposed programmes and as long as they are economic in their own right, the net costs to the LVEMP will be minimal. B. ENVIRONMENTAL ANALYSIS 5.25 The program is in effect a regional enviromnental action plan for Lake Victoria, having as its central objective improving the environmental conditions of Lake Victoria and its catchment. However, the program will encompass a wide range of different interventions and investments, and has been designated as Category B for environmental analysis to ensure that adequate attention will be given to the many overall positive impacts as well as to individual components which might have adverse local environmental effects. Positive Impacts 5.26 The environmental analysis (available separately) outlines the problems the program is trying to address, and the potential benefits from proposed measures to be Lake Victoria Environmental Management Project 45 implemented. Beginning with a discussion of population growth, which underlies the pressures to which the lake and its catchment are increasingly being subjected, the analysis proceeds to assess the pressures. Populations of urban areas around the lake are growing at an estimated 6 percent p.a. or more, and rural areas near the lake shore are experiencing in-migration which is causing faster growth of their populations even than the already high national averages of over 3 percent p.a. 5.27 This population pressure is, in particular, contributing to the existence of pollution "hot spots" where there is especially heavy localized degradation of water quality in the lake, from human waste, urban runoff, and the effluent discharges of such industries as breweries, tanning, paper processing, fish processing, sugar factories, coffee washing stations, and abattoirs. In addition there is some inflow of residues from the use of chemical herbicides and pesticides in selected agricultural operations in the lake catchment, and specialized industries such as gold mining are responsible for the presence of localized areas of heavy metals. The project would locate and quantify these problems, identify the sources of pollution, propose and begin to implement ameliorative measures, and strengthen existing institutions to sustain solutions in the longer term. 5.28 The population pressure is also contributing to the inflow of nutrients into the lake, which are responsible for algal buildup, oxygen depletion, and to the burgeoning water hyacinth infestation. Since the levels of fertilizer use in agricultural areas around the catchment are in general low, the main rural source of these nutrients is soil erosion, which releases nitrogen and phosphorus held in the natural soil profile. In many instances such nutrients are not available to agriculture, but are released by chemical changes once the soil is washed into the lake. From urban areas and lake shore communities, the main sources of nutrients are human waste, especially from untreated sewage. Although sewage schemes in the lake catchment are frequently inoperative or in bad repair, in some cases the nutrients are filtered out by wetlands prior to reaching the lake. Where there is no such buffering capacity, or the capacity is overloaded, there is a positive buildup of nutrients in the lake. The project will locate and quantify these problems, identify the sources of nutrients, propose and begin to implement ameliorative measures, including some innovative pilot initiatives, and strengthen existing institutions to sustain solutions in the longer term. 5.29 The area in which the project would make the most economic difference would be in heading off developing instability and possible serious collapse of the valuable lake fisheries. Negative Impacts And How They Would Be Addressed 5.30 The main areas where activities undertaken in the project may have negative environmental impacts are the following: (a) measures to try to restore and stabilize the fish ecology in the lake might have unforeseen effects, because the huge, complex ecosystem is not understood completely, although knowledge of the ecosystem is better now than it was when exotic fish were introduced previously; 46 Lake Victoria Environmental Managenent Project (b) attempts to develop innovative aquaculture might have unforeseen effects on the ecosystem, as did the introduction of exotic species in the past; (c) biological agents used as the main line of long term control of water hyacinth might have unforeseen effects on other parts of the ecosystem and the catchment; (d) herbicides used to control water hyacinth might damage other crops, add to water pollution, kill fish, and themselves contribute to anoxia in the lake, especially in littoral areas; (e) attempts to reduce the inflow of pollutants into the lake might result in their having negative effects in other enviromnents. 5.31 The following steps will be taken during project implementation, to minimise the possibilities of these negative impacts arising, or mitigate their effects: (a) fish ecology - the most important precaution is that any proposed interventions (such as changes in net sizes or other controls over the fishing effort) should be clearly defined and carefully assessed before introduction. The assessment should include specific consideration of possible unpredictable responses, and should allow for relevant peer review or independent comment. The interventions must be accompanied by projections of measurable responses in the system and methods for measuring and reporting on the relevant parameters. (b) aquaculture - the scale of any proposed aquaculture needs to be limited until the requirements and impacts of the system are well established. The onus will be on the promoters of any introduced species to demonstrate to the satisfaction of the scientific community that this will not have any adverse or unexpected effects. Therefore before any releases take place, there will be a full environmental assessment. Where systems are developed to support or reintroduce native species, the schemes should be developed at a pilot scale so that the consequences of large scale projects can be predicted and evaluated. (c) biological control agents - all biological control agents under consideration have been subjected to exhaustive field testing over twenty years in several countries. For all three control agents, the conclusion was: "there is no doubt that [the agent] is restricted to water hyacinth and that it may be introduced into regions infested with this weed without risk of damage to other plant species."4 The two species of weevils have been tested extensively in Kenya and Uganda, and released in both countries in lakes other than Lake Victoria. The testing protocols have been 4Harley, K.L.S., The Role of Biological Control in the Management of Water Hyacinth, Eichornia crassipes, Biocontrol News and Information, Vol 11, No. 1, 1990,11-22. Lake Victoria Environmental Management Project 47 satisfactory, and no results different from those observed elsewhere have been noted. Any additional biological control agents available during project implementation will be subjected to similar testing protocols. (d) herbicides - herbicides used in the water hyacinth control program will be acceptable to IDA, they will be used sparingly, in strictly selected and confined areas, all persons applying such herbicides will be trained in their safe and appropriate handling and use, and mechanisms for careful monitoring of herbicide use will be established. (e) pollutants - pollution control projects must be properly designed with the necessary attention to treatment and disposal systems and to long-term financing mechanisms which will allow for the necessary maintenance and upgrading. A project specific environmental assessment will be required for these components, and for any larger investments following, to guard against the possibility that any uncontrolled dumping of domestic and industrial wastes would take place. C. RISKS 5.32 The main risk is that the strength of the commitments by the three Governments will fail to sustain a regional environmental management program for the lake basin. This may express itself through inadequate budgetary arrangements to fund regional bodies (such as the LVFO) or coordinating agencies, erosion over time of the powers given to such institutions, or unwillingness or lack of capacity to follow-up on regional regulatory decisions or guidelines through enforcement at the national level. Since the three governments have collaborated well during program preparation, and the proposed program provides many opportunities for low-risk collaboration on technical issues, which should build confidence steadily during implementation, any waning commitment would seem likely to arise only from sources external to the program. The risk of inadequate or unforeseen results emerging from the research and studies in the program would be reduced by the appointment of an international Panel of Scientists who would review regularly scientific issues arising in the course of project implementation. In the event of fiscal crises, the project is structured so as to allow postponement of work in the pilot zones planned for the outer years of the project. In this way the essential core of lake-wide activities would be preserved, as well as the coordinated nature of the adaptive environmental management approach in at least a sub-set of the 14 pilot areas. Upon resolution of any funding crisis, work could be resumed with minimum disruption to progress. 48 Lake Victoria Environmental Management Project 6. AGREEMENTS REACHED AND RECOMMENDATIONS 6.1 On August 5,1994, the Governments of Kenya, Tanzania and Uganda signed a Tripartite Agreement jointly to prepare and implement a Lake Victoria Environmental Management Program (LVEMP). That important agreement provided for organizational arrangements for project preparation, some of which will be continued into project implementation. In particular, the Agreement provided for a Regional Policy and Steering Committee, which has functioned during project preparation with a membership of nine at the level of Permanent Secretary, three from each country, drawn from the main Ministries dealing with environment, water, fisheries, and agriculture. The existence of this Agreement reduced, but did not eliminate the need for further assurances, which complemented and supplemented those already obtained under the Tripartite Agreement. 6.2 The three Government s and IDA have agreed the following: (a) the National Secretariats will prepare annual work programs, training plans, and related financing plans and submit them to the Regional Policy and Steering Committee for its approval by March 31 of each year; the annual work programs will include details of the procurement of goods and services and the procedures to be adopted for such procurement within the limits given earlier and agreed by IDA; (b) in its review of the annual work programs, training plans and related financing plans, the Regional Policy and Steering committee will ensure that all project components with regional implications will be implemented at a comparable pace in all three countries; following its approval of the annual programs and plans, the Regional Policy and Steering Committee will submit them, along with its proposals for ensuring coordinated implementation, to IDA for review by May 15 of each year; (c) a high level panel of internationally renowned scientists, with 7 members satisfactory to IDA, will be appointed by the Regional Policy and Steering Committee to serve as an advisory group for the scientific studies in the lake; they will meet at least once a year to review scientific issues arising from project implementation, maintain an up-to-date inventory of international scientific research pertinent to LVEMP programs, assist with identifying international training opportunities for researchers from the riparian countries, and be available, at the request of the Regional and Policy Steering Committee, to provide advice about specific issues; (d) the Lake Victoria Fisheries Organisation (LVFO) will be established by November 30, 1996; Lake Victoria Environmental Management Project 49 (e) national steering committees will be established in all three countries for the water hyacinth control program, by November 30,1996; (f) any changes in the policies, procedures and core membership of the Regional Policy and Steering Committee will be acceptable to IDA; (g) herbicides used in the water hyacinth control program will be acceptable to IDA, they will be used sparingly, in strictly selected and confined areas, all persons applying such herbicides will be trained in their safe and appropriate handling and use, and mechanisms for careful monitoring of herbicide use will be established; (h) with the exception of the biological control agents for water hyacinth, no new species will be introduced into the lake without first carrying out an environmental impact assessment; (i) prior to implementation of any intervention likely to have a negative impact on fish ecology (such as changes in net sizes or other controls over the fishing effort), the proposed intervention will be subjected to an environmental impact assessment, with provision for public comment; (j) prior to implementation of any project component related to pollution control, a project - specific environmental assessment will be carried out to guard against the possibility that any uncontrolled dumping of domestic and industrial wastes would take place; (k) the three Governments will have the records and accounts of the project, including those for the Special Accounts, and Statements of Expenditure (SOEs), audited each fiscal year by independent auditors acceptable to IDA; and will submit to IDA the audit reports within six months after the close of the respective fiscal year; the audit reports will include a statement on the adequacy of the accounting systems and internal controls; (1) National Workshops coordinated by the National Secretariats and a Regional Workshop coordinated by the Regional Secretariat in Tanzania will be held in June of each year to assess implementation progress and agree on any adjustments needed; (m) prior to the end of July, 1997, a comprehensive review will be held with the donors, to consider the annual work plan and new financial procedures and arrangements for the forthcoming fiscal year; modifications of project design and/or procedures will be introduced as appropriate; similar reviews will be carried out annually; (n) prior to the end of March, 1999 a Mid-Term Review will be carried out, during which the performance of the Lake Victoria Fisheries Organisation, the three National Secretariats, and the Regional Policy and Steering Committee will be reviewed and appropriate changes made; the 50 Lake Victoria Environmental Management Project review will also carry out an in-depth examination of the arrangements for community participation in project implementation; as part of the Mid-Term Review, the three Governments will prepare an updated analysis of the transboundary environmental concerns, to guide the second phase of project implementation, and set the stage for subsequent initiatives; (o) subject to satisfactory completion of the Levy Trust Study, the three Governments will jointly establish, by the end of July, 1998, a Levy Trust Fund into which funds raised from commercial fisheries will be placed and disbursed to support joint fisheries management and central monitoring initiatives under the project; 6.3 Prior to Grant/Credit Effectiveness: (a) the membership of the Regional Policy and Steering Committee will have been confirmed; (b) the Heads of the three National Secretariats, with qualifications and experience equivalent to the position of Deputy Principal/ Permanent Secretary, will have been appointed, and the three National Secretariats will have been strengthened by the appointment of an Accountant, Disbursement and Procurement Officer, an Operations Officer and a Management Information Systems Officer; (c) a panel of internationally renowned scientists will have been appointed; (d) common standard methods for measuring and monitoring water quality will have been agreed among the three governments; (e) evidence satisfactory to IDA will have been provided that each of the three Governments has made budgetary allocations representing their first year contribution to the Project; (f) annual work plans and financial plans for the first year of the Project Implementation Plan will have been finalized and submitted to IDA. 6.4 Subject to the above assurances, the project is suitable for IDA Credits of SDR 8.9 million (US$12.8 million equivalent) to the Government of Kenya, SDR 7.0 million (US$10.1 million equivalent) to the Government of Tanzania, and SDR 8.4 million (US$12.1 million equivalent) to the Government of Uganda, and for GEF Grants of SDR 8.0 million (US$11.5 million equivalent) to the Government of Kenya, SDR 7.2 million (US$10.3 million equivalent) to the Government of Tanzania, and SDR 9.2 million (US$13.2 million equivalent) to the Government of Uganda. ANNEXES Table 1 - Kenya Lake Victoria Envlronnentil Management Project Component. Project Cost Summary (Koh COW) CUSS 1000\ % % Total % % Tota Foreign Base Foreign ase Local Foreign Total Exchange Cost Local Foreign Total Exchange Cosdt B. Fisheries Development 2. Research fish bloiogy and biodversity conservatIon 53,882 52,709 10i,591 49 a 980 858 1,938 49 8 aquacutture 29,672 23,614 53,285 44 4 539 429 989 44 4 soda-economic studies 28,767 18,691 45,458 37 4 523 303 827 37 4 database establishment 10,846 8,602 19,448 44 2 197 158 354 44 2 Subtotal Research 123,187 101,818 224,783 45 17 2,239 1,848 4,087 45 17 3. Extension Extension 101,673 58,680 180,272 37 12 1,849 1,085 2,914 37 12 4. Legl Framework establishing dosed fishing aeas 20,410 2,188 22,598 10 2 371 40 411 10 2 strengthening enforcement 21,903 8,828 30,731 29 2 398 161 559 29 2 Subtotal Legal Framework 42,313 11,015 53,327 21 4 769 200 970 21 4 S. Fish Levy Trust fish levy trust 17,398 18,781 34,179 49 3 316 305 821 49 3 Subtotal Flahee Development 284,551 188,011 472,5e1 40 37 5,174 3,418 8,592 40 37 C. Water Hyacinth Control 98,207 36,729 132,938 28 10 1,749 888 2,417 28 10 0. Water Quality Management 1. Water Quality Monitoring eubophicatIon 47,023 e1,381 108.404 57 8 855 1,116 1,971 57 8 sedimentabon la 3,458 7,613 11.071 89 1 63 138 201 89 1 hydrautcconditionst 2,921 11,922 14,843 80 1 53 217 270 80 1 Lake Vctoria management model 3,683 14,988 18,828 79 1 70 272 342 79 1 Subtotal WaterQualltyMonitoring 57,264 95,881 153,148 63 12 1,041 1.743 2,784 83 12 2. Industrial and Municipal Waste Management management of indusbial and municipal effluent 33,439 39,893 73,331 54 8 808 725 1,333 54 8 tetaryindurble1effluenttreatment k 10,382 5,034 15,415 33 1 189 92 280 33 1 tery mrnunIipel affluent frament/d 10,524 5.034 15,557 32 1 191 92 283 32 1 prioltywastemanagementinvestments 38,500 71,500 110,000 85 9 700 1.300 2,000 8f 9 Subtotl Industrial and Municipal Wate Management 92,844 121,480 214.304 57 17 1,e88 2,208 3,898 57 17 SubtotAl Water Quality Management 150,109 217,341 367,450 59 28 2,729 3,952 6,881 89 28 E. Lend Use end Wetland Management 1. Lend Use polluton loadng 39,T77 33,127 72,904 45 8 723 602 1,328 45 8 agro-chemrictisassessment/l 7,240 8,538 15,778 54 1 132 155 287 54 1 soltandwaterconservation 21,247 8,005 27.252 22 2 388 109 495 22 2 catchmentsfforestaton 44,050 8,399 52,448 18 4 801 153 954 1i 4 Subtotal Lend Use 112,314 58.089 158,383 33 13 2,042 1.019 3,082 33 13 2. Wetlands wedands buffering capacity 29,882 30,545 80.427 51 5 543 555 1,099 51 5 sustainable use of wetands products 18,944 8,550 27,494 31 2 344 155 500 31 2 Subtotl Wedands 48,828 39,094 87,920 44 7 888 711 1,599 44 7 SubtotalLandi Useand WtlandManagement 181,140 95,183 258,303 37 20 2,930 1,730 4,880 37 20 F. Indsttutonal Fmmework LVEMP setariats If 35,683 9,820 45,503 22 4 849 179 827 22 4 suppoltto rpeudanunlvsrsites 8,823 11,892 18,715 84 1 124 216 340 64 1 Subtotal InstItutIonal Framework 42,508 21,712 64,218 34 5 773 395 ____34 TotaIBASEUNECOSTS 734,512 558,958 1,293.488 43 100 13,355 10,183 23.518 43 100 Physical Contingencies 89,801 48,748 118,347 41 9 1,285 888 2,182 41 9 Pdce Contingencies 190,088 108,350 298,438 38 23 794 458 1,250 38 5 Total PROJECTCOSTS 994,190 716,052 1,710,251 42 132 15,414 11,505 26,919 43 114 \b pilot tudy ib ptlot study \c pilot project Yd pilot projet No pilot V Lake Vtctoria Environmental Management Project Table 2 - Kenya Lake Victoria Environmental Management Project Project Components by Year - Totals Including Contingencies Totals Including Contingencles (Ksh '000) Totals Including Contingencies (USS '000) 1997 1998 1999 2000 2001 Total 1997 1998 1999 2000 2001 Total A. Fisheries Developmnent 2. Research fish biology and biodiversity conservation 43,510 27,004 24,644 24,067 24,313 143,539 763 441 375 341 321 2,242 aquaculuLre 22,442 15,703 11,771 1t,101 9,897 70,914 393 257 179 157 131 1,117 3ocmo-economicstudies 15,888 13.377 11,127 11,117 10,115 61,623 279 219 169 158 134 958 databae establishment 5,651 4,764 6,264 5,200 4,975 26,853 99 78 95 74 66 412 Subtotal Research 87,491 60,848 53,806 51,484 49,300 302,929 1,534 994 819 730 652 4,729 3. Extension Extension 59,216 25,365 59,062 46,209 28,270 218,122 1,038 414 899 655 374 3,381 4. Legal Framework establishing dosedfishingareas 4,966 6,860 6,008 6,609 7,270 31,713 87 112 91 94 96 480 strengthening enforement 11,682 4,781 7,307 8,982 9,779 42,531 205 78 111 127 129 651 Subtotal Legal Framework 16,648 11,641 13,316 15,591 17,049 74,244 292 190 203 221 225 1,131 S. Fish Levy Trust fish lvy tust 6,543 - 23,226 9,143 10,057 48,970 115 - 354 130 133 731 Subtotal Fisheries Developnent 169,899 97,853 149,410 122,427 104,676 644,264 2,979 1,599 2,275 1,737 1,384 9,972 B. WaterHyacinth Control 59,347 30,548 27,134 31,556 29,614 178,200 1,041 499 413 448 391 2,792 C. Water Quality Management 1. Water Quality Monitoring eutrophication 57,664 19,330 22,165 22,663 21.417 143,238 1,011 316 337 321 283 2,269 sedimentation 8,383 1,403 3,786 - - 13,572 147 23 58 - - 228 hydrauliconditions 8,681 5,026 1,537 3,492 - 18,736 152 82 23 50 - 307 LakeVctoriemanagementmodel 6,049 4,912 5,659 4,253 4,920 25,792 106 80 a6 60 65 398 Subtota WterQualltyMonitorlng 80,777 30,671 33,147 30,408 26,336 201,338 1,416 501 505 431 348 3,201 2. IndustrIal and Municipal Waste Management managemrtentofindustrial and municipat effluent 28,340 14,916 17,788 19,410 19,789 100,242 497 244 271 275 262 1.548 tertiary industrial effluent treatment 7,327 5,357 6,085 420 385 19,575 128 88 93 6 5 320 tertiarymunicipaleffkuenttreatment 7,382 5,417 6,151 420 385 19,755 129 89 94 6 5 323 prioritywa8temanagementlnvestrnents 8,250 5,500 55,000 41,250 - 110,000 150 100 1,000 750 - 2,000 Subtotal Industrial and Municipal Waste Management 51,299 31,190 85,024 61,500 20,559 249,572 905 520 1,457 1,037 272 4,190 Subtotl WatgrwQuality Managenent 132,076 61,861 118,171 91,908 46,896 450,911 2,321 1,021 1,962 1,469 620 7,392 0. Lend Use and Wetdand Managernent 1. Land Use pollution loading 24,369 17,540 19,882 20,719 17,412 99,922 427 287 303 294 230 1,541 agro-chemcals assessment 430 6,520 9,781 5,035 - 21,766 8 107 149 71 - 334 soil and water conservation 8,772 12,530 13,460 117 128 35,006 154 205 205 2 2 567 catchmentafforestation 19,876 11,940 11,958 13,130 14,420 71.324 349 195 183 187 192 1,106 Subtotal Land Use 53,447 48,530 55,080 39,001 31,960 228,018 937 793 839 554 424 3.548 2. Wetlands wetlands buffenring capacity 23,571 10,876 15,177 15,752 17,507 82,884 413 178 231 223 231 1,277 sustainableuseofwetlandsproducts 8,504 6,650 7,033 7,582 8,340 38,110 149 109 107 108 110 583 Subtotal Wetlands 32,075 17,527 22,210 23,334 25,847 120,994 562 286 338 331 342 1,859 Subtotal Land Use and Wetland Managernent 85,523 66,056 77,291 62,335 57,807 349,012 1,500 1,080 1,177 885 765 5,407 E. Institutional Framework LVEMP secretariats 13,101 10,311 12.102 13,303 14,624 63,441 230 169 184 189 194 966 support to riparian universdies 11,609 2,651 2,979 3,345 3,840 24,424 204 43 45 47 51 390 Subtotal Institutional Framework 24,710 12,962 15,080 16,648 18,464 67,865 433 212 230 237 245 1,356 Total PROJECT COSTS 471,554 269,280 387.086 324,874 257,457 1,710 251 8,273 4.410 6,056 4,774 3,405 26,919 Annexes 3 Table 3 - Kenya Lake Victoria Environmental Management Project Components by Financiers (US$S000) The Government of Kenya GEF IDA Total Amount Amount Amount Amount % B. Fisheries Development 2. Research fish biology and biodiversity conservation 224 2,018 - 2,242 8.3 aquaculture 112 503 503 1,117 4.2 sodo-economic studies 96 216 647 958 3.6 database establishment 41 371 - 412 1.5 Subtotal Research 473 3,107 1,149 4,729 17.6 3. Extension Extension 338 - 3,043 3,381 12.6 4. Legal Framework establishing dosed fishing areas 48 - 432 480 1.8 strengthening enforcement 65 - 586 651 2.4 Subtotal Legal Framework 113 - 1,018 1,131 4.2 5. Fish Levy Trust fish levy trust 73 - 658 731 2.7 Subtotal Fisheries Development 997 3,107 5,868 9,972 37.0 C. Waler Hyacinth Control 279 1,508 1,005 2,792 10.4 D. Water Quality Management 1. Water Quality Monitoring eutrophication 227 2,042 - 2,269 8.4 sedimentation 23 205 - 228 0.8 hydraulic conditions 31 277 - 307 1.1 Lake Victoria management model 40 358 - 398 1.5 Subtotal Water Quality Monitoring 320 2,881 - 3,201 11.9 2. Industrial and Municipal Waste Management management of industrial and municipal effluent 155 - 1,393 1,548 5.8 tertiary industrial effluent treatment 32 - 288 320 1.2 tertiary municipal effluent treatment 32 - 290 323 1.2 priority waste management investments 350 - 1,650 2,000 7.4 Subtotal Industrial and Municipal Waste Management 569 - 3,621 4,190 15.6 Subtotal Water Quality Management 889 2,881 3,621 7,392 27.5 E. Land Use and Wetland Management 1. Land Use pollution loading 154 1,386 - 1,541 5.7 agro-chemicals assessment 33 - 301 334 1.2 soil and water conservation 57 - 510 567 2.1 catchment afforestation 111 - 995 1,106 4.1 Subtotal Land Use 355 1,386 1,806 3,548 13.2 2. Wetlands wetlands buffering capacity 128 1,149 - 1,277 4.7 sustainable use of wetlands products 58 262 262 583 2.2 Subtotal Wetlands 186 1,411 262 1,859 6.9 Subtotal Land Use and Wetland Management 541 2,798 2,069 5,407 20.1 F. Institutional Framework LVEMP secretariats 97 869 - 966 3.6 support to riparian universities 39 351 - 390 1.5 Subtotal Institutional Framework 136 1,220 - 1,356 5.0 Total Disbursement 2,842 11,514 12,563 26,919 100.0 4 Annexes Table 1 - Tanzania Lake Victoria Environmental Management Project Components Project Cost Summary (Tsh 000) (USS 000) % % Totl S % Total Foreign Base Foreign Beas Local Fomign Total Exchange Costs Local Fomeign Total Fxchange Costs A. Fisharts Development 2. Resarch fish biology mnd biodiveruityconservalion 374,061.0 697,524.0 1,071.5850 65 8 623.4 1,162.5 1,78.0 65 8 aquacustur 276,875.3 243,272.3 520.147 5 47 4 461.5 405.5 869.0 47 4 socioeconomic sludies 244,020.0 184,065.0 428085.0 43 3 406.7 306.8 713.5 43 3 database establishment 52,17050 10959000 161 7600 68 1 87.0 182.7 2609. 68 1 SubtotalRessach 947,126.3 1.234.4513 2.1815775 57 17 1,570.5 2,057.4 3,636.0 57 17 3. ExtensIon Extension 862,993 4 830.6230 1693.6173 49 13 1,438.3 1304.4 2,822.7 49 13 4. Legsl Fmrmework establishingdosedfishingames 146.3310 24.9000 171,231.0 IS 1 2439 415 285.4 15 1 strengthening enforement 203,4537 222.1008 425,5545 52 3 3391 370.2 709.3 52 3 Subtotal Legal Frmwork 349,7847 247,0008 596,785.5 41 5 5830 4117 994.6 41 5 5. Flih Levy Trust fish ley trus 133.203 0 183,060.0 310,263.0 58 2 222 0 305.1 527.1 58 2 Subtotal Fisheries Dvelopment 2.293.1073 2,495,136.0 4,760,2433 52 38 3,821.8 4,158.6 7,980.4 52 38 B. WatortHyscnfh Control 1.008 189.0 357,949.5 1.366,130 5 26 11 1,6803 598.6 2,278.9 28 11 C. Water Quality Msnagement 1. Water Qusilty Monitoring eutmnphcstion 505,328.3 822,543.8 1,327,072.0 62 10 842 2 1,370.9 2,213.1 62 10 sedimentaton 32,909.4 69,609.0 102,518.4 68 1 548 118.0 170.9 66 1 hydmuliccondibons 23,736.0 159,456.0 183,1920 87 1 396 265.8 305.3 87 1 Lake Victoria Mansgement Model 54,678.0 151.6200 206,298.0 73 2 911 2527 343.8 73 2 Subtotal WaterQualltyMonitoring 616,651.7 1,203,228.8 1,819,880.4 66 14 1,0278 2,005.4 3,033.1 86 14 2. Industrial end Municipal Waste Management managefmnt of industrial and municipal effluent 359,055.0 357,4125 716,467.5 50 6 598.4 595.7 1,194.1 50 6 etoraryindustril effluent treatent 80,973.0 53,112.0 134,085.0 40 1 135.0 885 223.5 40 1 ter0arymunicppaleofflonttreatmenl 65,961.0 53,112.0 119,073.0 45 1 109.9 885 198.5 45 1 prioity wast management investments 192,000.0 408,000 0 600,0000 68 5 320.0 680.0 1,0000 68 5 Subtotal Industral and Municipal Waste Management 697,989.0 871,636 5 1.569.6255 56 12 1,163.3 1,402.7 2,816.0 56 12 Subtotal WaterQuality Managemrent 1,314,640.7 2,074,865.3 3.389 5059 61 27 2,191.1 3,458.1 5,049.2 61 27 D. Lend Use and Wetland Management 1. Land Ue pollufion loading 334,051.5 303.135 0 637.186 5 48 5 556.8 505.2 1,D02.0 48 5 gro-chemicals assessment 64,604.5 1135140 178.1985 64 1 107.8 189.2 297,0 64 1 so0il andwaterconu rvaeion 235,221.0 23664 0 258,885 0 9 2 392.0 39.4 431.5 9 2 catchmen aftorestation 342.1800 90,120.0 432,3000 21 3 570.3 150.2 720.5 21 3 Subtotal Lend Use 976.137 0 530,4330 1,506 5700 35 12 1,626.9 884.1 2,511.0 35 12 2. Wetlands weoandabuffenng cpecty 3780508 221,8124 5998632 37 5 6301 3697 999.8 37 5 sustainable use ofwetands poducs 211 115.0 43,107 4 254,222.4 17 2 351.9 71.8 423.7 17 2 SubtotmlWetlands 589,165.8 264 919 8 854,085.6 31 7 981.9 441.5 1,423 5 31 7 Subtotal Land Use and Wetsand Management 1,565.302 8 795,352.8 2,360,655.6 34 19 2.608 8 1,325.6 3,934.4 34 19 E. tnstitutlonsl Frntamwork 1. LVEMPsecrcetriata 464,646.0 62,604.0 527,250.0 12 4 774.4 104.3 878,8 12 4 2. support to riparien univemities 46 894.5 128,494.5 175,389.0 73 1 78.2 214.2 292.3 73 1 3. pollution disaster coningency - 00,000.0 90,0000 100 1 - 150.0 150,0 100 I Subtotal InstitutionalFrmaework 511,5405 281,098.5 792,639.0 35 0 852.6 468.5 1,321,1 35 6 Total BASELINE COSTS 6,692,7803 6,004,402.0 12,697,182.3 47 106 11,154.6 10,007,3 21,162.0 47 100 PhysicalConhngencses 634,074,7 443,117.1 1,077,191.7 41 8 1,056.8 738.5 1,795.3 41 8 PriceContingencies 7,634,861.9 6,166,640.9 13,001,502.8 45 109 -808.8 462.0 -348.8 -133 -2 TotalPROJECTCOSTS 14,961716.8 12,614,160.0 27,575,0768 46 217 11,402.6 11,207.9 22,8105 50 107 Table 2 - Tanzania Lake Victoria Environmental Management Project Project Components by Year - Totals Including Contingencies CD Totals Including Contingencies (Tsh '000) Totals Including Contingencies (US$ '000) 1997 1998 1999 2000 2001 Total 1997 1998 1999 2000 2001 Total A. Fisheres Developnment 2. Resach fishbilogymndbiodiversrtywonservation 431,320.1 621,278.7 471,3344 453,535.2 543,217.3 2,520,6856 627.5 3295 413.4 308.9 287.3 1,9667 equaculture 199,0577 272,4316 259,834.1 193,0626 201,125.6 1,125,511 5 2896 1445 227.9 131.5 106.4 899.9 soco-eoonomicStudies 152,822.7 223,268.2 170,575.4 201,7756 213,534.8 961,976.8 222.3 118.4 149.6 137.4 1129 7408 dabtbase establishment 47,957 5 95,994.8 88,466.9 81,559.6 89,064.0 403,042 8 698 50 9 77.6 55.6 47.1 300.9 Subtotal Reerch 831,1580 1,212,973.2 990,210.8 929,933.1 1,046,941.6 5,011,216 7 1,2091 643.4 8686 633.4 553.7 3,908.3 3. Extension Extension 598,488 7 474,111.5 903,009.2 1,184,067.9 725,356.7 3,885,033 9 870 7 251 5 792.1 806 5 383.7 3,104.4 4. Legal Framnwork establishingdcosedfishingareas 40,635.7 83,326.3 70,803.7 93,4609 123,368.4 411,595.0 59.1 44.2 621 637 65.3 294.3 strengtleningenforcement 213,2062 122,170.1 136,091.0 208,433.8 271,5826 951,4837 310.2 648 119.4 142.0 143.6 780.0 SubtoWtLegalFramework 253,8419 205,4964 206,894.6 301,894.8 394,951.0 1,363,0786 369.3 1090 1815 205.6 208.9 1,074.3 5. Filh Levy Trust fish evy trust 78,856 0 - 302,720.1 159,066.9 233,2114 773,854 5 114.7 - 265.5 1083 123.3 612.0 SubtotdFisheies Devieopment 1.762.344.6 1,892,581 1 2,402,834.7 2,574,9627 2,400,460.8 11,033,1838 2,5638 1,0039 2,1077 1,753.9 1,2696 8,698.9 B Water Hyacinth Control 632,232.1 566,845.2 449,200.1 564,014.9 644,8299 2,857,122.1 919.7 3007 394.0 384.2 341.1 2,339.7 C. Water Quaity Management 1. Water Qulity Monitorlng eutrophicatin 638,129 8 461,465.8 475,899.2 696,210 3 664,979 1 2,956,684.3 928 3 244 8 417.4 474 2 362.3 2,427.1 sedimentation 84,988.0 19,350.6 56,272 9 - - 160,611.4 123.6 10.3 49.4 - - 183.3 hydraulicoonditions 98,963.3 129,433.0 61,757.0 97,199.2 16,422.4 403,774.9 1440 68.7 54.2 66.2 87 341.7 LakeVctoriaManagementModel 68,3008 139,791.8 99.9015 92,251.2 125,9087 526,154.1 994 74.2 87.6 628 66.6 3906 Subtota WaterQuality Monitorlng 890,3819 750,041.1 693,830.7 885,6608 827,310.2 4,047,224.8 1,295.3 3978 608.6 6033 4376 3,342.6 Z indudbral and Municipal Wte Managennent managementofiduastrialandmunkipaleMuent 293,1814 276,348.0 277,6453 369,557.6 439.392.4 1,656,124.7 4265 146.6 243.5 251 7 232.4 1,3008 tertiary industrial effluent treatent 69,129 8 84,345 0 91,007.7 - 244,482 6 100.6 44 7 79.8 - - 225.1 tertiary municipal effmuent treatment 62,744.7 75,9167 79,8823 - - 218,543.7 91 3 40.3 701 - - 201.6 pnority waste management investments 75,0000 135,000.0 - 240,000.0 150,000.0 600,000.0 125 0 2250 - 4000 250.0 1,0000 SubtoalIndustral andUMunicipalWaste Managemnt 500,055.9 571,6098 448,535.3 609,557.6 589,392.4 2,719,151.0 743.4 456.6 393.4 651.7 482.4 2,727.5 Subl WaterQuality Managent 1,390,437.8 1,321,650.9 1,142,3660 1,495,218.4 1,416,7026 6,766,375.8 2,0386 854.4 1,0021 1,255.0 9200 6,070 1 D. Land Use and Wetand Managerment 1. Land Use poliution loading 193,636.5 314,533.4 294,9334 368,878.1 349,9387 1.521,920.0 281 7 166.8 256.7 251.3 1851 1,143.6 agrG-hdemicalsassessment 2,543.2 165,668.4 134,2191 155,095.0 - 457,5257 3.7 879 117.7 1056 - 3150 soil andwaterconservation 90,888.8 174,2244 203,574.6 - - 468,687.8 132.2 92.4 1786 - - 403.2 catcdmentantorestation 150,1146 153,393.9 184,184.0 200,862.4 311,624.9 1,000,179.8 2184 81.4 161.6 1368 1648 762.9 Subtotal Land Use 437,1831 807,8201 816,911 1 724,835.4 661,5635 3,448,313.2 636.0 4285 716.6 493.7 349.9 2,624.7 2. Wetands wetlandsbufferingcapacity 303,4598 330,016.3 350,3936 59,488.7 84,335.9 1,127,694.4 4415 175.1 3074 405 446 1,009.0 sustainable use of wetlands products 93,593.7 94,248.4 106,478 4 120,173.7 158,629.3 573,123.5 136.2 50.0 93.4 81.9 83.9 445.3 Subtalt Wetands 397,053.5 424,264.8 456,872.0 179,662.5 242,965.1 1,700,817.9 577.6 225.0 400.8 122.4 128.5 1,454.3 Sutotal Land Use and Wetand Management 834,2366 1,232,084.9 1,273,783 1 904,497.9 904,528 7 5,149,131.1 1,213.6 653.5 1,117 3 6161 478.4 4,079.0 E. Inattutional Framework 1. LVEMP semetanaits 131,751.6 167,071.3 224,455.6 358,327.7 406,432.1 1,288,038.4 191.7 88.6 196.9 244.1 215.0 936.2 2 supporttoriparianuniversties 106,468.5 58,524.5 46,114.8 64,938.0 89,141 1 367,186.8 154.9 31.0 42.2 44.2 471 319.5 3. pollution disaster contingency 114,838.8 - - - 114,838.8 167.1 - - - 167.1 Subtota Institnonal Franmwork 353,058.9 225,595.8 272,570.4 423,265.7 495,573.2 1,770,064.0 513.6 119.7 239.1 286.3 262.1 1,422.8 Total PROJECT COSTS 4,972,310.0 5,238,757.8 5,540,754.3 5,961,959.5 5,862,095.2 27,575,876.8 7,249.4 2,932.2 4,860.2 4,297.4 3,271.2 22,610.5 L 6 Annexes Table 3 - Tanzania Lake Victoria Environmental Management Project Components by Financiers (US$S000) The Government of Tanzania GEF IDA Total Amount Amount Amount Amount % A. Fisheries Development 2. Research fish biology and biodiversity conservation 198.1 1,768.6 - 1,966.7 8.7 aquaculture 90.0 405.0 405.0 899.9 4.0 socio-economic studies 74.1 166.7 500.0 740.8 3.3 database establishment 30.1 270.9 - 300.9 1.3 Subtotal Research 392.2 2,611.1 905.0 3,908.3 17.3 3. Extension Extension 310.4 - 2,794.0 3,104.4 13.7 4. Legal Framework establishing closed fishing areas 29.4 - 264.9 294.3 1.3 strengthening enforcement 78.0 - 702.0 780.0 3.4 Subtotal Legal Framework 107.4 - 966.9 1,074.3 4.8 5. Fish Levy Trust fish levy trust 61.2 - 550.8 612.0 2.7 Subtotal Fisheries Development 871.3 2,611.1 5,216.5 8,698.9 38.5 S. Water Hyacinth Control 234.0 1,263.4 842.3 2,339.7 10.3 C. Water Quality Management 1. Water Quality Monitoring eutrophication 242.7 2,184.4 - 2,427.1 10.7 sedimentation 18.3 164.9 - 183.3 0.8 hydraulic conditions 34.2 307.5 - 341.7 1.5 Lake Victoria Management Model 39.1 351.5 - 390.6 1.7 Subtotal Water Quality Monitoring 334.3 3,008.3 - 3,342.6 14.8 2. Industrial and Municipal Waste Management management of industrial and municipal effluent 130.1 - 1,170.7 1,300.8 5.8 tertiary industrial effluent treatent 22.5 - 202.6 225.1 1.0 tertiary municipal effluent treatment 20.2 - 181.5 201.6 0.9 priority waste management investments 160.0 - 840.0 1,000.0 4.4 Subtotal Industrial and Municipal Waste Management 332.8 - 2,394.8 2,727.5 12.1 Subtotal Water Quality Management 667.0 3,008.3 2,394.8 6,070.1 26.8 0. Land Use and Wetland Management 1. Land Use pollution loading 114.4 1,029.2 - 1,143.6 5.1 agro-chemicals assessment 31.5 - 283.5 315.0 1.4 soil and water conservation 40.3 - 362.9 403.2 1.8 catchment afforestation 76.3 - 686.7 762.9 3.4 Subtotal Land Use 262.5 1,029.2 1,333.0 2,624.7 11.6 2. Wetlands wetlands buffering capaicity 100.9 908.1 - 1,009.0 4.5 sustainable use of wetlands products 44.5 200.4 200.4 445.3 2.0 Subtotal Wetlands 145.4 1,108.5 200.4 1,454.3 6.4 Subtotal Land Use and Wetland Management 407.9 2,137.7 1,533.4 4,079.0 18.0 E. Institutional Framework 1. LVEMP secretariats 93.6 842.6 - 936.2 4.1 2. support to riparian universities 32.0 287.6 - 319.5 1.4 3. pollution disaster contingency 16.7 150.4 - 167.1 0.7 Subtotal Institutional Framework 142.3 1,280.5 - 1,422.8 6.3 Total Disbursement 2,322.5 10,s31.1 9,987.0 22,610.5 100.0 Annexes 7 Table 1 - Uganda Lake Victoria Environmental Management Project Components Project Cost Summary % % Total (Ush 000) (US$ OO00) Foreign Base Local Foreign Total Local Forelgn Total Exchange Costs A. Fisheries Development 1. Fisheries Management (LVFO\ LakeeVictoriaFisheriesOffice 314,400.0 1,649,1000 1,963.500.0 3144 1,649.1 1,9635 84 8 2. Fisheries Research Fish Biology and Biodiversity Conservation 1,014,130 0 1,043,8600 2,057,990.0 1,0141 1,043.9 2,0580 51 8 Aquaculture 543,546 3 402,733 8 946,280 0 543 5 402.7 946 3 43 4 Socio-Economics Studies 402,610 0 438,575.0 841,185 0 402 6 438 6 841.2 52 3 Database 114,6750 119,3000 233,9750 1147 119.3 2340 51 1 Subtotal Fisheries Research 2,074,961 3 2,004,468.8 4,079,430 0 2,075 0 2,004.5 4,079.4 49 17 3. Fisheries Extension Fisheries Extension 1,933,1193 1,529,933.2 3,463.0525 1,9331 1,529 9 3,4631 44 14 4. Legal Framework Establishing Closed Fishing Areas 338,6100 31,750.0 370,360.0 3386 318 370.4 9 2 Strengthening Enforcement 500,417 0 324,568.0 824,985 0 500.4 324 6 825.0 39 3 Subtotal Legal Framework 839,0270 356,3180 1,195,345.0 839.0 3563 1,195.3 30 5 5. Fish Levy Trust Fish Levy Trust 264,680.0 342,500 0 607,180.0 264.7 342 5 607.2 56 2 Subtotal Fisheries Development 5,426,187.6 5,882,3200 11,308,5075 5,426.2 5,882 3 11,308.5 52 46 B Water Hyacinth Control 1,993,690.0 777,1825 2,770,872.5 1,9937 7772 2,770.9 28 11 C. Water Quality Management 1. Water Quality Monitoring Eutrophication 1,022,397.5 922,305 0 1,944,702.5 1,022.4 922.3 1,944 7 47 8 Sedimentation 34,441.5 110.0150 144,456.5 34.4 110.0 1445 76 1 Hydraulic Conditions 45,675.0 216,7600 262,435.0 457 216.8 2624 83 1 Lake Victoria Model 54,535 0 264,590 0 319,125.0 54 5 264.6 3191 83 1 Subtotal WaterQuality Monitoring 1,157,0490 1,513,6700 2,670,719.0 1,157.0 1,513.7 2,6707 57 11 2. Industrial and Municipal Waste Management Managementof industrial and Municipal Effluent 665,022 5 575,887 5 1,240,9100 665.0 575.9 1,2409 46 5 Tertiary Industrial Effluent Treatment (pilot) 156,657 5 79,520.0 236,177 5 156 7 79 5 236 2 34 1 Tertiary Municipal Effluent Treatment (pilot) 161,237 5 79,520 0 240,757 5 1612 79 5 240 8 33 1 Priority Waste Management Investments 240,000 0 760,000.0 1,000,000 0 240.0 760 0 1,000 0 76 4 Subtotal Industrial and Municipal Waste Management 1,222,9175 1,494,927.5 2,717,845.0 1,222.9 1,4949 2,717.8 55 11 Subtotal Water Quality Management 2,379,966 5 3,008,597.5 5,388,564 0 2,380.0 3,008 6 5,388.6 56 22 D. Land Use and Wetland Management 1. Land use Pollution Loading 681,817.5 495,625.0 1,177,442 5 681.8 495 6 1,177.4 42 5 Agro-Chemicals Assessment (pilot) 103,8880 79,9400 183,8280 103.9 799 1838 43 1 Soil and Water Conservation (pilot) 365,105 0 33,680.0 398,785.0 365 1 33 7 398 8 8 2 Catchment Afforestation 552,712.5 248,600 0 801,312 5 552 7 248.6 801 3 31 3 Subtotal Land use 1,703,523 0 857,845 0 2,561,368.0 1,703.5 857.8 2,561.4 33 10 2. Wetlands Buffering Capacity of Wetlands 577,359.9 414,666 2 992,026.0 577 4 414.7 992 0 42 4 Sustainable Use of Wetland Products 273,082.4 139,3456 412,428.0 2731 139.3 412.4 34 2 Subtotal Wetlands 850,442.3 554,011.8 1,404,454.0 8504 554.0 1,404.5 39 6 Subtotal Land Useand Wetland Management 2,553,965.3 1,411,8568 3,965,822.0 2,5540 1,411.9 3,9658 36 16 E. institutional Framework 1 LVEMP Secretariats 551,295 0 179,040 0 730,335.0 551.3 179 0 730.3 25 3 2 Support to Riparian Universities 117,1425 197,932.5 315,075.0 117 1 1979 315.1 63 1 Subtotal Institutional Framework 668,437 5 376,9725 1,045,4100 6684 377.0 1,045.4 36 4 Tota; BASELINE COSTS 13,022,2468 11,456,929.2 24,479,176 0 13,022 2 11,456 9 24,479 2 47 100 Physical Contingencies 1,228,152 9 979,151.2 2,207,3041 1,228.2 979 2 2,207 3 44 9 Price Contingencies 2,728,406 8 1,913,387 9 4,641,794 7 802.2 564 2 1,366 4 41 6 Total PROJECT COSTS 16,978,806 6 14,349,468 2 31,328,274.8 15,052.6 13,000 3 28,052 9 46 115 Table 2 - Uganda Lake Victoria Environmental Managemnent Project o Project Components by Year - Totals Including Contingencies Toto lndcludng Contingndes (Ush 900V) Totls Indcludn Condngences (US$ 000) 1997 1SS8 1999 2000 2001 Totl 1997 1998 1t" 2000 2001 TotS A. Fis DrbWpdwnt 1. Fbheie Mmeimit (1LVFO) Lt Victr Fherme Oice 619,449.7 455,272.7 491,712.3 492,139.5 531,509.6 2,590,063.9 603.1 420.7 431.2 409.6 419.8 2,284.4 t Fishwle Ruseaci Fish Bolgy mid Biodivmdlty Cos tion 806,447.5 501,565.5 486,889.5 438,047.9 436,742.2 2,649,692.6 7851 463.5 409.4 364.6 345.0 2,367.6 AQJsaathe 377,743.9 272,947.6 212,417.3 183,573.5 156,532.9 1,203,215.1 367.8 252.2 186.3 152.8 123.6 1,082.7 Soio-Econncmis Stuis 287,314.7 240,744.3 196,625.7 193,217.9 173,313.7 1,091,216.3 279.7 222.5 172.4 160.8 136.9 972.3 Datesr 72,393.1 55,046.6 76,131.4 53,399.7 45,220.4 302,191.2 70.5 50.9 66.8 44.4 35.7 268.3 Suo FbIhres Reseach 1,543,899.1 1,070,303.9 952,063.9 868,239.0 811,809.2 5,246,315.2 1,503.1 989.0 834.9 722.6 641.2 4,690.8 3. FIs'edies Extenslon Fihrs Extension 1,161,588.8 487,353.4 1,161,660.5 1,209,444.7 516,977.5 4,537,024.9 1,130.9 450.3 1,018.7 1,006.6 408.4 4,014.9 4& Legal Franrik Esttlhs* Clcsd Fishung Am 80,162.4 86,575.0 120,188.6 100,981.5 109,060.0 496,967.5 78.0 80.0 105.4 84.0 86.1 433.6 Sblngthsnng EnWrcmnent 392,504.0 148,634.9 160,527.7 173,370.0 187,239.4 1,062,275.9 382.1 137.3 140.8 144.3 147.9 952.4 Sublota LagS Fwnswqrk 472,666.3 235,209.8 280,716.3 274,351.5 296,299.4 1,559,243.4 460.2 217.3 246.2 228.3 234.0 1,386.0 K Flsh Levy Trust Fish Levy Trust 117,831.9 - 390,894.9 1512078.9 163,165.0 822,970.8 114.7 - 342.8 125.7 128.9 712.1 SubttI- Fhwifes Deveopns 3,915,436.0 2,248,139.9 3,277,048.0 2,995,253.5 2,319,760.9 14,755,638.2 3,811.9 2,077.3 2,873.7 2,492.9 1,832.3 13,068.2 S. Waer Hys*m CCOntc 1,172,444.0 749,350.6 513,255.8 563,581.8 529,151.5 3,527,783.7 1,141.9 692.7 450.1 469.0 418.0 3,171.7 C. Water CuaLty Maagnsn 1. Watd Quafty Monitoring E~ophicton 957,443.7 349,163.0 391,363.6 391,134.4 372,528.8 2,461,633.5 932.1 322.6 343.2 325.5 294.3 2,217.7 SednerAnsI 92,510.4 19,562.2 62,528.4 - - 174,621.0 90.1 18.1 54.8 - - 163.0 HydrulicCordtian 151,304.9 63,895.0 29,356.0 53,600.2 4,311.2 322,467.2 147.3 77.5 25.7 44.6 3.4 298.6 Lake Vck M0odel 243,730.4 64,862.5 70,054.0 - - 378,646.9 237.3 59.9 61.4 - - 358.7 SubttaWtr Qualit Monitong 1,444.969.3 517.502.7 553,302.0 444,734.6 376,840.0 3,337,368.6 1,406.8 478.2 485.2 370.1 297.7 3,038.0 2 InduW and MunicIpal W_lt Mdgnnt Mlmgane'd ofktAUiSemidnoMtEpaent 449.591.7 237,308.3 306,986.5 329,084.7 297,925.7 1,620,896.9 437.7 219.3 269.2 273.9 235.3 1,435.4 Trlwyk&u lEftlintTreebriaet(pikit) 115.890.2 73,899.9 86,172.3 5,188.0 6,016.9 287,167.3 112.8 68.3 75.6 4.3 4.8 265.7 Twtiay Muncips Etrff ptTefnet(pt) 116,874.0 77,433.5 87,319.9 5,188.0 6,016.9 292,832.3 113.8 71.5 76.6 4.3 4.8 271.0 Rimi Wade Magent h vwents 300,000.0 700,0S0.0 - - - 1,OS0,000.0 300.0 700.0 - - - 1,000.0 u Wtlhdusl NdW Mwdunipa W Mwgmnat 962,355.8 1,088,641.8 480,478.7 339,460.7 309,959.5 3,200,896.5 964.3 1,059.1 421.3 282.5 244.8 2,972.1 SubtarQWater dityUanisaunt 2,427,345.1 1,606,144.5 1,033.780.7 784,195.2 686,799.5 6,538,265.0 2,371.1 1,537.3 906.5 652.7 542.5 6,010.1 D. Laid Us. ai Wierd Id Mtaant 1. La us, PoFkion L 368,588.2 283,162.7 314,359.1 320,135.7 248,577.2 1,534,822.9 358.8 261.6 275.7 266.4 196.3 1,358.9 Agro-cheni Asnseit (plot) 7,429.0 87,937.0 98,783.9 40,484.7 - 234,634.6 7.2 81.3 86.6 33.7 - 206.8 SoA-id erConsplrvabon(pdot) 130,775.1 175,151.1 162,531.3 1,857.1 2,005.6 492,320.2 127.3 161.9 160.2 1.5 1.6 452.5 C rolur nt Affastai 274,304.6 168,504.3 202,099.1 182,239.3 227,946.3 1,055,183.5 267.1 155.8 177.2 151.7 180.1 931.8 Subt LLd us 781,097.0 714,845.1 797,773.3 544,716.8 478,529.1 3,316,961.3 760.5 660.6 699.7 453.3 378.0 2,952.0 2 VWileS BhierligC CdtyoWfAfnd 399,349.7 170,371.6 234,847.6 263,273.1 221,065.0 1,288,907.0 388.8 157.4 205.9 219.1 174.6 1,145.9 SucattflhUs of V*dtjm Pm&wsi 125,249.8 1C0,917.B 94,679.1 114,629.8 108,452.1 544,128.3 121.9 93.2 83.0 95.6 85.7 479.4 SubtotalWsdud 524,50.5 271,289.2 329,526.7 378,102.8 329,617.1 1,833,035.3 510.7 250.7 2e9.0 314.7 260.3 1,625.3 Weubd Land Us L id W edlu Mangment 1,305,696.4 986,134.3 1,127,300.1 9M,819.6 808,046.2 5,149,996.6 1,271.2 911.3 98a7 7680 638.3 4,577.4 4 E. huelbal r FnMwmt 1.LVEMPScetauSs 219,469.9 166,003.0 179,498.3 193,6562 209,366.8 968,196.2 213.7 153.4 157.4 161.3 165.4 851.2 2 8afpolt ID Rpvjtn LWrSub 196,794.4 40,624.0 44,95.9 49,719.6 56,301.3 388,395.2 191.6 37.5 39.4 41.4 44.5 354.4 suboal hi _eloia Franwik 416,284.3 20e,27.0 224,454.2 243,577.9 285,668.0 1P&1e 591.4 405.3 190.9 196.8 202.7 209.8 1206.6 Totdl PROJECT COSIS 9,237,185.9 5,796,396.2 6,175,838.8 5,509,427.9 4,609,426.0 31,328,274.8 9,001.3 5,409.5 5,415.9 4,585.3 3,640.9 28,052.9 Annexes 9 Table 3 - Uganda Lake Victora Environmental Management Project Components by Financiers (US$'000) The Govemment of Uganda GEF IDA Total Amount Amount Amount Amount % A. Fisheries Development 1. Fisheries Management (LVFO) Lake Victoria Fisheries Office 228.4 2,055.9 - 2,284.4 8.1 2. Fisheries Research Fish Biology and Biodiversity Conservation 236.8 2,130.8 - 2,367.6 8.4 Aquaculture 108.3 487.2 487.2 1,082.7 3.9 Socio-Economics Studies 97.2 218.8 656.3 972.3 3.5 Database 26.8 241.4 - 268.3 1.0 Subtotal Fisheries Research 469.1 3,078.2 1,143.5 4,690.8 16.7 3. Fisheries Extension Fisheries Extension 401.5 - 3,613.4 4,014.9 14.3 4. Legal Framework Establishing Closed Fishing Areas 43.4 - 390.3 433.6 1.5 Strengthening Enforcement 95.2 - 857.2 952.4 3.4 Subtotal Legal Framework 138.6 - 1,247.4 1,386.0 4.9 5. Fish Levy Trust Fish Levy Trust 71.2 - 640.9 712.1 2.5 Subtotal Fisheries Development 1,308.8 5,134.1 6,645.2 13,088.2 46.7 B. Water Hyacinth Control 317.2 1,712.7 1,141.8 3,171.7 11.3 C. Water Quality Management 1. Water Quality Monitoring Eutrophication 221.8 1,996.0 - 2,217.7 7.9 Sedimentation 16.3 146.7 - 163.0 0.6 Hydraulic Conditions 29.9 268.7 - 298.6 1.1 Lake Victoria Model 35.9 322.8 - 358.7 1.3 Subtotal Water Quality Monitoring 303.8 2,734.2 - 3,038.0 10.8 2. Industrial and Municipal Waste Management Management of Industrial and Municipal Effluent 143.5 - 1,291.9 1,435.4 5.1 Tertiary Industrial Effluent Treatment (pilot) 26.6 - 239.2 265.7 0.9 Tertiary Municipal Effluent Treatment (pilot) 27.1 - 243.9 271.0 1.0 Priority Waste Management Investments 120.0 - 880.0 1,000.0 3.6 Subtotal Industrial and Municipal Waste Management 317.2 - 2,654.9 2,972.1 10.6 Subtotal Water Quality Management 621.0 2,734.2 2,654.9 6,010.1 21.4 D. Land Use and Wetland Management 1. Land use Pollution Loading 135.9 1,223.0 - 1,358.9 4.8 Agro-Chemicals Assessment (pilot) 20.9 - 187.9 208.8 0.7 Soil and Water Conservation (pilot) 45.3 - 407.3 452.5 1.6 Catchment Afforestation 93.2 - 838.6 931.8 3.3 Subtotal Land use 295.2 1,223.0 1,433.8 2,952.0 10.5 2. Wetlands Buffering Capacity of Wetlands 114.6 1,031.3 - 1,145.9 4.1 Sustainable Use of Wetland Products 47.9 215.8 215.8 479.4 1.7 Subtotal Wetlands 162.5 1,247.1 215.8 1,625.3 5.8 Subtotal Land Use and Wetland Management 457.7 2,470.1 1,649.5 4,577.4 16.3 E. Institutional Framework 1. LVEMP Secretariats 85.1 766.1 - 851.2 3.0 2. Support to Riparian Universities 35.4 319.0 - 354.4 1.3 Subtotal Institutional Framework 120.6 1,085.0 - 1,205.6 4.3 Total Disbursement 2,825.3 13,136.1 12,091.5 28,052.9 100.0 Annex 2 KENYA, TANZANIA, AND UGANDA LAKE VICTORIA ENVIRONMENTAL MANAGEMENT PROJECT Estimated Schedule of Disbursement (GEF and IDA) (US$ million) IDA FY Semester Disbursement Cumulative % Total Disbursement 1997 1 0.0 0.0 0 2 6.8 6.8 10 1998 1 6.8 13.6 19 2 7.2 20.8 30 1999 1 7.2 28.0 40 2 7.6 35.6 51 2000 1 7.6 43.2 62 2 7.1 50.3 72 2001 1 7.1 57.4 82 2 4.8 62.2 89 2002 1 4.8 67.0 96 2 2.0 69.0 99 2003 1 1.0 70.0 100 2 Annexes Summary of Disbursement Schedule Estimated GEF/IDA Disbursements KENYA Category GEF Grant IDA Credit Percent of Financing (US$ m) (US$ m) 1. Civil Works 0.1 1.5 100% of Foreign Expenditures and 90% of Local Expenditures 2. Vehicles and Equipment 2.7 2.2 100% of Foreign Expenditures and 90% of Local Expenditures 3. Consultants & Training 3.3 2.5 100 % 4. Micro-projects 0.7 90 % 5. Operating Costs 4.4 4.6 90 % 6. Unallocated 1.0 1.3 Total 11.5 12.8 TANZANIA Category GEF Grant IDA Credit Percent of Financing (US$ m) (US$ m) 1. Civil Works 0.1 0.7 100% of Foreign Expenditures and 90% of Local Expenditures 2. Vehicles and Equipment 2.1 1.7 100% of Foreign Expenditures and 90% of Local Expenditures 3. Consultants & Training 3.5 2.2 100 % 4. Micro-projects X 0.8 90 % 5. Operating Costs 3.5 3.7 90 % 6. Unallocated 1.1 1.0 Total 10.3 10.1 UGANDA Category GEF Grant IDA Credit Percent of Financing (US$ m) (US$ m) 1. Civil Works 0.3 0.6 100% of Foreign Expenditures and 90% of Local Expenditures 2. Vehicles and Equipment 2.5 2.2 100% of Foreign Expenditures and 90% of Local Expenditures 3. Consultants &Training 4.3 2.5 100 % 4. Micro-projects 1.0 90 % 5. Operating costs 4.8 4.6 90 % 6. Unallocated 1.3 1.2 Total 13.2 12.1 Annexes 3 Kenya Lake Victoria Environmental Management Project Summary of Proposed Procurement Arrangements (US$ million) Item ICB NCB Other Total Civil Works 2.8 2.8 GEF (0. 1) (0.1) IDA (2.5) (2.5) Vehicles 2.2 0.1 2.3 GEF (1.0) (0. 1) (1.0) IDA (1.0) (1.0) Equipment 3.6 3.6 GEF (1.9) (1.9) IDA (1.4) (1.4) Training 3.4 3.4 GEF (1.4) (1.4) IDA (1.6) (1.6) Consultants 3.7 3.7 GEF (2.2) (2.2) IDA (1.2) (1.2) Operating Costs 11.1 11.1 GEF (4.9) (4.9) IDA (5.1) (5.1) Totals 2.2 2.8 21.9 26.9 GEF (1.0) (0.1) (10.4) (11.5) IDA (1.0) (2.5) (9.3) (12.8) Notes: the difference between the total project costs in each category and the GEF and IDA provisions (in parentheses) would be financed by the Government. 4 Annexes Tanzania Lake Victoria Environmental Management Project Summary of Proposed Procurement Arrangements (US$ million) Item ICB NCB Other Total Civil Works 1.9 1.9 GEF (0. 1) (0.1) IDA (1.6) (1.6) Vehicles 1.9 0.1 1.9 GEF (0.8) (0.1) (0.8) IDA (0.9) (0.9) Equipment 2.8 2.8 GEF (1.5) (1.5) IDA (1.0) (1.0) Training 3.4 3.4 GEF (1.6) (1.6) IDA (1.4) (1.4) Consultants 3.7 3.7 GEF (2.3) (2.3) IDA (1.0) (1.0) Operating Costs 8.9 8.9 GEF (4.0) (4.0) IDA (4.1) (4.0) Totals 1.9 1.9 18.8 22.6 GEF (0.8) (0.1) (9.4) (10.3) IDA (0.9) (1.6) (7.6) (10.1) Notes: the difference between the total project costs in each category and the GEF and IDA provisions (in parentheses) would be financed by the Government. Annexes 5 Uganda Lake Victoria Environmental Management Project Summary of Proposed Procurement Arrangements (US$ million) Item ICB NCB Other Total Civil Works 2.2 2.2 GEF (0.3) (0.3) IDA (1.8) (1.8) Vehicles 2.5 2.5 GEF (1. 1) (1. 1) IDA (1.1) (1.1) Equipment 3.3 3.3 GEF (1.7) (1.7) IDA (1.3) (1.3) Training 3.2 3.2 GEF (1.3) (1.3) IDA (1.6) (1.6) Consultants 5.2 5.2 GEF (3.5) (3.5) IDA (1.2) (1.2) Operating Costs 11.7 11.7 GEF (5.3) (5.3) IDA (5.1) (5.1) Totals 2.5 2.2 23.4 28.1 GEF (1.1) (0.3) (11.8) (13.2) IDA (1.1) (1.8) (9.2) (12.1) Notes: the difference between the total project costs in each category and the GEF and IDA provisions (in parentheses) would be financed by the Government. Annex 3 KENYA, TANZANIA, AND UGANDA LAKE VICITORIA ENVIRONMENTAL MANAGEMENT PROJECr PROJECT IMPLEMENTATION PLAN A. Introduction 1. This summarizes the Project Implementation Plan (PIP), which is a joint product of the Lake Victoria Environ-mental Management Secretariats (LVEMPS) of Kenya,Tanzania and Uganda and IDA/GEF officials responsible for the Lake Victoria Environmental Management Project (LVEMP). B. Overall Responsibility 2. LVEMPS: Overall responsibility for coordinating project implementation will rest with the LVEMP Secretariats (LVEMPS), created under the Tripartite Agreement signed by the Governments of Kenya, Tanzania and Uganda on August 5,1994. Under the Agreement the three governments undertook to establish a Regional Policy Steering Committee ( RPSC) to be assisted by a Regional Secretariat and two National Secretariats. The Regional Secretariat is located in Tanzania. Under the project the LVEMPS's will: a) provide a secretariat to the LVEMP; b) ensure efficient implementation of the LVEMP by establishing a monitoring and coordinating mechanism; c) assist in building institutional and human resource capacity within the program; d) organize donor coordination; e) assist in formulating harmonised policies, institutions and a legal framework relevant to Lake Victoria; f) establish necessary linkages between the LVEMP and the Lake Victoria Fisheries Organisation (LVFO); g) provide logistical support to the sectoral ministries and agencies for implementation of the program; h) ensure compliance with IDA and GEF reporting, procurement and disbursement procedure; and i) provide policy guidance and a forum for conflict resolution. In addition the Regional Secretariat through the RPSC will monitor and review progress of implementation, report on progress every quarter, and provide guidance and direction to the LVEMP. 3. The Regional Secretariat in Tanzania will assist the RPSC, and provide linkages with other regional agencies dealing with issues pertaining to Lake Victoria. This Secretariat, working under the office of the Vice President in the Department of Environment, Poverty Alleviation and Union Matters, will report to the RPSC. The Regional Secretariat will also perform the function of the National Secretariat for LVEMP implementation in Tanzania. 4. In Kenya the LVEMP Secretariat will work under the Ministry of Environment and Natural Resources, while in Uganda it will be under the Ministry of Natural Resources. 2 Annexes 5. The Regional Policy and Steering Committee, headed by a chairperson who will be elected by that committee from among its membership at its first meeting and thereafter on an annual rotation, will include a maximum of three representatives of each country led by an officer at Permanent Secretary level. The Executive Secretary, to be appointed by the RPSC, at its first meeting, will as head of the Regional Secretariat be responsible for monitoring progress, preparing review meetings, and compiling reports as required by IDA and GEF. The National Secretariat in each country will assist the Executive Secretary of the Regional Secretariat in preparing regional meetings and regional level reports. The locations of National Secretariats in each country will be determined by the respective Governments. 6. The Regional Secretariat in Tanzania and the National Secretariats in Kenya and Uganda will each be headed by a full-time professional (equivalent in qualifications and experience to a Deputy Principal/ Permanent Secretary) who will be accountable to the Principal/Permanent Secretary of their parent Ministry and will have full responsibility for coordinating LVEMP activities. Each LVEMP Secretariat will be staffed with: (a) one Project Accountant; (b) one Procurement/Disbursement Officer (PDO); (c) one Operations Officer (OPO); (d) one Management Information Systems Officer (MISO); one secretary, two drivers and one messenger. The major responsibility of the PDO will be to ensure that all Ministries, agencies, and institutions using Project funds set up proper accounting systems and maintain proper accounts, and promptly claim reimbursement from GEF and IDA. All withdrawal applications will be submitted to IDA/GEF through the office of the PDO so that a proper track of expenditures on different components of the Program in other institutions and ministries or departments is kept, and IDA/GEF disbursements are received by the beneficiaries without undue delay. The PDO will also be responsible for supervising the Project's "Special Account" and guiding various implementing agencies with regard to procedures for its use. The major responsibility of the OPO will be to supervise closely the implementation of various Project components, identify implementation bottlenecks in the field and/or at Headquarters, and bring these bottlenecks to the attention of the head of the Regional/ National Secretariat. The OPO will also coordinate training and provide the MISO with reports on physical and financial progress. The latter will establish and operate an approved management information system installed by consultants, obtain periodical reports from various managers concerned with project implementation, collate data and reports and submit them to the head of the LVEMP Secretariat. The MISO will collect data on key monitorable indicators and prepare quarterly and annual reports to be submitted to IDA/GEF in agreed formats, as well as background and progress reports for IDA/GEF review missions. 7. LVEMP secretariat staff will be recruited on personnel service contracts. Their salaries and wages for the duration of the project will be financed by the GEF, together with expenditures on vehicles and equipment required for LVEMP to ensure rapid build up of its implementation capacity. C. Specific Responsibilities of the Secretariats for LVEMP 8. The LVEMP Regional Secretariat's specific responsibilities will include, but not be limited to: (a) organisation of semi annual meetings of RPSC members for obtaining Annexes 3 their guidance and direction on implementation of the LVEMP including review and monitoring of the Program; (b) creating implementation mechanisms to ensure formulation of harmonised policies institutions and legal framework relevant to Lake Victoria; (c) establishing close working linkages with the LVFO and reporting on its progress to the RPSC; (d) upon direction of the RPSC establishing functional links with the Permanent Tripartite Commission (PTC) and other regional organisations such as the Kagera Basin Organization (KBO), the Association for Strengthening Agricultural Research in Eastern and Central Africa (ASARECA), and the Technical Cooperation for the Promotion of Development and Environmental Protection of the Nile Basin (TECCONILE); (e) environmental management capacity building in the public, private and non governmental sectors; (f monitoring and coordination to ensure effective implementation, from the regional to national to grassroot level, of all LVEMP components, including research, extension, training, evaluation and transfer of technological skills; (g) assisting IDA supervision missions with necessary information, setting up meetings, organising field visits and accompanying the supervision mission to meetings and field visits; (h) submitting quarterly progress reports to IDA/GEF in agreed formats in addition to such other periodic reports which IDA/ GEF may specifically request; (i) developing a detailed Operational Manual for LVEMP in the first Project year (PY-1), and an Operational Plan to ensure sustainability after the closing date, both in a format satisfactory to IDA; (j) conducting with IDA/GEF a Mid-Term Review of Project progress by the end of February 1999; and (k) preparing an Implementation Completion Report (ICR) within six months from the close of the Project. 9. The LVEMP National Secretariats' specific responsibilities will include, but not be limited to: (a) organisation of Technical Committee meetings (at least three per year), of members drawn from all implementing agencies for reviewing progress on implementation of LVEMP; (b) creating implementation mechanisms to ensure formulation of harmonised policies, institutions and legal framework relevant to Lake Victoria in close cooperation with the Regional Secretariat; (c) effective participation in meetings and workshops convened by implementing agencies for furtherance of the program; (d) capacity building in environmental management of the lake and its catchment, in public, private and non-governmental sectors; (e) monitoring and coordination at the national and grassroot level, of all LVEMP components, including research, extension, training, evaluation and transfer of technological skills and providing feed back to their respective Ministries of Environment and Natural Resources; (f) assisting IDA supervision missions with necessary information, setting up meetings, organising field visits and accompanying the supervision missions to meetings and field visits; (g) submitting quarterly progress reports to IDA/GEF in agreed formats in addition to such other periodic reports as IDA/GEF may specifically request; (h) developing a detailed Operational Manual for LVEMP implementation in their respective countries during the first Project year (PY-1), and an Operational Plan to guarantee sustainability after the closing date, both in a format satisfactory to IDA; (i) conducting with IDA/GEF a Mid-Term Review of Project progress by the end of February 1999; and (j) preparing an Implementation Completion Report (ICR) within six month from the close of the Project. The three Governments have assured IDA/GEF that they will provide adequate and timely budgetary and staffing support to the implementing ministries, institutions and agencies to undertake these responsibilities. 4 Annexes 10. The LVEMP secretariats will set up the following institutional and regulatory mechanisms to secure inter-agency coordination, obtain periodic feedback, submit regular progress reports to IDA/GEF in agreed formats, and thereby implement the Lake Victoria Environmental Management Program: (a) Project Implementation Committee (PIC): In each country the LVEMPS will set up a Project Implementation Committee (PIC) with membership drawn from all implementing agencies. The OPO of the LVEMP National Secretariat will be nominated as Secretary of the PIC. Members will include representatives from the Ministries/Departments of Environment and Natural Resources, Fisheries, Water, and Agriculture, along with members of specialised technical agencies/institutions participating in the program, private sector and non governmental organisations. The PIC will meet every month under the Chairmanship of the Head of the LVEMP National Secretariat. The agenda of PIC meetings will include review of the physical and financial progress of the various project components including programs in littoral pilot zones, in wetlands as well as in rivers within the Lake Victoria Catchment, community participation, publication and dissemination of information, progress in procurement, construction of works and installation of equipment. To this end, the LVEMPS will define for each of the implementing agencies the formats and the timing for submission of the quarterly progress reports. (b) Meetings with Regional Sub-Program Resource Personnel: In order to maintain close grass root contacts and stay current with the problems of each region/ subcomponent, and to assist the newly set-up pilot zone administrations, LVEMPS will convene meetings each quarter at selected places in the country, each in a cluster of mostly contiguous regions. These meetings will be used to review, on a regional basis, the problems encountered and progress made in the implementation of various components of LVEMP, and to agree on the next steps and a work plan for the pilot projects under implementation, including programs implemented lake wide. Project- specific protocols for start up will be drawn up after rapid appraisal and establishment of bench mark status. Representatives of the concerned research institutions, government extension departments, stakeholders and community based organisations, and the faculty of national universities will participate in these meetings. (c) Community Involvement in the Program: Community participation is considered key to the successful implementation of the program. This will imply involvement and participation of stakeholders including empowerment of communities for eventual ownership of the programs targeted for their benefit. In keeping with this overall oojective the LVEMPS will ensure that the processes of education, communication, awareness creation, community participation and motivation are followed consistently and thoroughly throughout the implementation phase of the program, and that seminars, workshops and demonstrations are conducted in a timely and organised manner. A systematic community education program will need to be launched, to teach rural communities not only in formal class settings but through radio or video programs the benefits of environmental conservation and management. The LVEMPS will oversee these efforts by assisting in the preparation of workshops and seminars, reviewing comprehensively the achievements of each of these events, Annexes 5 identifying success and failure, and preparing in consultation with and cooperation of all participating agencies, workplans for implementation during the following year and assigning responsibilities for future specific actions. LVEMPS in their regular meetings will review the progress in the implementation of recommended activities, and include the results of such review in quarterly progress reports to their respective Ministry, IDA and GEF. (d) Workshops on Procurement, Disbursements and Project Management: The LVEMPS will organize, with IDA/GEF assistance, a workshop on procurement, disbursement and project management in Project Year 1 (and in subsequent years if necessary) for selected staff engaged in LVEMP implementation procurement, disbursement and project management. The concerned staff will also receive intensive training in IDA/ GEF procedures. (e) Mid-Term Review (MTR): The LVEMPS will collaborate with IDA in a Mid- Term Review (MTR) of LVEMP, which will be held by the end of March, 1999. The LVEMPS will enlist the participation of all implementing agencies. The MTR will include a review of progress in policy reform, including harmonised legislation, legal framework and institutional arrangements for regional cooperation. It will also review progress achieved in staffing, funding and operational activities, and capacity building. As part of the Mid-Term Review, the three governments will prepare an updated analysis of transboundary environmental concerns, to guide the second phase of project implementation, and set the stage for subsequent initiatives. Based on the findings of the Mid- Term Review, the Project will be restructured, if and when necessary. (f) Project Reporting, Monitoring and Evaluation: The LVEMPS will be responsible for coordinating the development of annual work plans for various Project components and maintaining data on implementation progress. To this end the LVEMPS will: (i) establish bench marks for evaluation of subsequent project achievements in consultation with implementing agencies; (ii) prepare quarterly progress reports, providing a descriptive and analytical account of project achievements and highlighting implementation problems; these reports will be submitted regularly to the respective Ministries of Environment and Natural Resources and IDA for the quarters ending March, June, September and December of each year. The comments and directives of the Ministries, if any, on the quarterly reports will also be communicated to IDA; (iii) prepare and submit to IDA an Implementation Completion Report (ICR) within six months from project closing date. IDA will provide the LVEMPS with a standard format for the ICR. The ICR will, inter alia, include the Government's assessment of the extent to which objectives were realized, details of physical and financial achievements, problems encountered, solutions found and lessons learned. The ICR will include a revised GEF Strategic Action Program, containing an outline of interventions needed to address priority 6 Annexes problems. IDA will use this as the basis for convening a donors' meeting to seek conmmitments to support such interventions. (g) Audit: The LVEMPS will ensure that separate books of account are maintained in LVEMPS and by each implementing agency for all project-related accounts. These accounts, together with special accounts and statements of expenditure, will be audited on an annual basis, by independent auditors satisfactory to IDA, and audit reports will be submitted to IDA within six months from the end of each fiscal year. (h) Quality Control: LVEMPS will organize periodical evaluations and technical reviews of the program's implementation. The LVEMPS will also coordinate arrangements for the Panel of Scientists, whose 7 members will serve as an overall advisory group for the scientific studies of the lake. They will meet once a year to review issues arising from project implementation, and will meet at other times as required, as well as being available individually, at the request of the Regional Policy and Steering Committee, to provide advice about specific issues. The LVEMPS will ensure that the advice and comments tendered by the Panel are addressed by the implementing agencies. 11. The performance of the Lake Victoria Fisheries Organisation (LVFO), which will have a critical role in ensuring the quality of implementation of several important components of the program, will also be reviewed by IDA/ GEF supervision missions. The LVFO will furnish quarterly progress reports to the Ministries of Environment and Natural Resources, in a format to be agreed during Project implementation; these reports will, on request, be available to IDA. At the Mid-Term Review, the performance and future needs/sustainability of the LVFO will also be reviewed. D. Focal Points For Implementation of LVEMP 12. Focal points for implementation of LVEMP will be as follows: (a) at the Regional level, the RPSC with the assistance of the Regional Secretariat will be responsible for the overall direction, planning, monitoring and assessment of the program; (b) at the National level, the LVEMP National Secretariats, assisted by the sectoral ministries/ departments, identified universities and/or research institutions will be responsible for the overall direction, planning, monitoring and assessment of the respective national program; (c) at the Zonal level the office of the Regional Commissioner, the Zonal Officer with the assistance of selected Extension Staff; and Local Agencies; (d) at the Community /Village Level, Non Governmental Organizations and Community Based Organizations, selected community leaders, groups of fisherfolk, farmers and Extension Agents. 13. Major components of the program will be implemented by various national agencies as follows: (a) the three Fisheries Research Institutes (KEMFRI, TAFIRI and FIRI) will play lead roles in all sub-components of fisheries research, and will collaborate with the Fisheries Departments of their respective governments in the fisheries extension, and with the Ministries of Water in the Water Quality components; (b) the Ministries of Water will be the lead agencies for the Water Quality components, and they will in turn collaborate closely with the Ministries of Environment, Natural Annexes 7 Resources and Agriculture in their implementation of the components on land use and wetland management (c) National Wetlands Committees in all three countries will also be involved in these components, with continuing assistance from the World Conservation Union (IUCN); (d) the Moi, Makarere, and Sokoine Universities, and the Universities of Nairobi and Dar es Salaam, will be involved in many of the studies, including those on socio-economics; (e) the water testing laboratories of the Kisumu and Mwanza Municipal Councils, the Uganda Water and Sewage Corporation, and the Lake Basin Development Authority (in Kisumu) will extend the reach of laboratories already operating or planned by the respective Ministries of Water; (e) National Steering Committees or task forces will be set up for the Water Hyacinth Control Program, while the respective national agricultural research institutes will establish and operate the rearing units for biological control agents. E. Capacity Building 14. The LVEMPS will coordinate the capacity building programs under the program and take the overall responsibility for Training. Each implementing department and agency will prepare an annual training plan and submit it to the respective LVEMP National Secretariat. The training plan will identify the subjects and courses for training, their timing, duration, estimated costs, name and location of the training institutions, the names of the persons proposed, and the justification for their training. The training plans will be submitted to IDA for approval, the first within three months of Credit Effectiveness, and subsequent annual plans by May 15 of each year. 15. Every sub-program makes extensive provision for capacity building. The training program will include regional fellowships (including about 100 Masters Degrees and 15 PhDs), study tours, on-site training to the national regional and field staff, selected community leaders, fisherfolk/farmers and entrepreneurs. At least 2,000 short-term and on-job training opportunities are provided in the project, and at least 600 stakeholder workshops. F. Implementation Plan, Key Monitorable Indicators and Supervision Plan 16. The outline of key Monitorable Indicators, as agreed during negotiations, is in Annex 4, the schedule of procurement activities arising out of the Project Implementation Plan (PIP) is in Annex 5, and the agreed Supervision Plan is shown in Annex 6. 8 Annexes Documents In the Project File Abramovitz, Janet N. (1995), Freshwater Failures: The Crises on Five Continents, World Watch, September/October: 27-35 Baskin, Yvonne (1994), Losing A Lake, Discover, March: 74-81. Bootsma, Harvey A., and Robert E. Hecky (1993), Conservation of the African Great Lakes: A Limnological Perspective, Conservation Biology, 7.3, September: 644-655 Crul, R.C.M., G.T. Silvestre, D.J. Postma, M.J.P. van Oijen, T.O. Acere, and G. Bongers (1995), A Bibliography of Lake Victoria, International Hydrological Programme, United Nations Educational, Scientific and Cultural Organization (UNESCO), Paris, SC- 95/WS/16: 164 pp. listing 2,180 references European Communities (1993), Evaluation Study of Lake Victoria Fisheries Research Project, Phase 1, Kenya, Uganda, Tanzania, Project No. 5100 36 94 401, International Agricultural Centre, Wageningen, the Netherlands, June: 79 pp. European Communities (1994), Lake Victoria Fisheries Research Project: Formulation of Operational Research Project, Technical Annexes, June: 91 pp. European Communities (1995), Lake Victoria Fisheries Research Project - Phase II (REG 5316/001/ROR), Annex No. 2, Technical and Administrative Provisions for Implementation, October: 6 pp. + Ann. FAO (1993), Operational Water Resources Management and Information System in the Nile Basin Countries, Project GCP/RAF/286/ITA, 36 pp. FAO (1994), Land Cover Mapping of East Africa Based on Satellite Remote Sensing, Project GCP/RAF/287/ITA, 48 pp. FAO (1994), Information System for Water Resources Monitoring and Planning in the Lake Victoria Region, Project GCP/RAF/304/JPN, 31 pp. FAO (1995), Tanzania: Mara Region Agricultural Development Project, Socio-Economic and Production Systems Study, Draft Report, 10 May: 71 pp. + Ann. + Maps FAO (1995), Uganda: Emergency Control of Water Hyacinth - Lake Victoria, Mission Report, Rome, April: 45 pp. FAO (1995), Uganda: Emergency Control of Water Hyacinth - Lake Victoria, Time- Bound Action Plan, Programme Document TCP/RAF/2371, Rome, July: 46 pp. FAO (1995), A Remote Sensing System for Monitoring and Evaluation of Lake Victoria, December: 45 pp. + Ann. Annexes 9 Goldschmidt, Tijs, Frans Witte, and Jan Wanink (1993), Cascading Effects of the Introduced Nile Perch on the Detritivorous/Phytoplanktivorous Species in the Sublittoral Areas of Lake Victoria, Conservation Biology, 7.3, September: 686-700 Goodland, Robert (1995), Back to Office Report on Uganda Owens Falls Hydroproject: Environment, July 24: 14 pp. Government of the Republic of Kenya, Government of the Republic of Uganda, and Government of the United Republic of Tanzania (1994), Agreement on the Preparation of a Tripartite Environmental Management Programme for Lake Victoria, 5 August, 1994:4 pp. + Ann. Government of the Republic of Kenya, Government of the Republic of Uganda, and Government of the United Republic of Tanzania, Lake Victoria Environmental Management Program, Regional Task Force 1, Report on Fisheries Management and Water Hyacinth Control, October: 299 pp. Government of the Republic of Kenya, Government of the Republic of Uganda, and Government of the United Republic of Tanzania, Lake Victoria Environmental Management Program, Regional Task Force 2, Report on Management of Water Quality and Land Use Including Wetlands, September: 136 pp. Government of the Republic of Kenya, Government of the Republic of Uganda, and Government of the United Republic of Tanzania, Lake Victoria Environmental Management Program Proposal [Preparation Report] (1996), Final Report, January, 1996, 323 pp. Hamilton, L.D. (1986), Proposed BNL/ BEAD Activity in Environmental Action Plan for Lake Victoria Basin, Brookhaven National Laboratory, Biomedical and Environmental Assessment Division (Upton, NY), Draft Proposal, May 30: 8 pp. Hamilton, L.D. (1986), Environmental Management in Developing Countries: The Lake Victoria Project, A Basin-Wide Pollution Control and Management Plan, Brookhaven National Laboratory, Biomedical and Environmental Assessment Division (Upton, NY), Briefing Document, September 17: 13 pp. Harley, K.L.S. (1990), The Role of Biological Control in the Management of Water Hyacinth, Eichornia crassipes, Biocontrol News and Information, 11.1: 11-22. Harris, Craig K., David S. Wiley and Douglas C. Wilson (1995), Socio-Economic Impacts of Introduced Species In Lake Victoria Fisheries, in Pitcher, Tony J., and Paul J.B. Hart, The Impact of Species Changes In African Lakes, (London, Chapman and Hall), Chapter 11: 215-242 Hecky, Robert E. (1993), The Eutrophication of Lake Victoria, Peter Kilham Memorial Lecture, Proceedings of the International Association for Theoretical and Applied 10 Annexes Limnology, Congress in Barcelona 1992, Verh. Internat. Verein. Limnol. 25, September: 39-48 Hecky, Robert E. (1995), Report on the Pre-Appraisal Mission for Lake Victoria Environmental Program, 17 June to 2 July: 21 pp. Hecky, Robert E. (1995), Lake Victoria Environmental Management Programme: The Need For An Adaptive Management Approach To Ecosystem Restoration, November: 24 pp. Hecky, Robert E. (1996), Precipitation Chemistry Monitoring in the Victoria Basin: The Need and a Proposal, May: 13 pp. Hecky, Robert E., and F.W.B. Bugenyi (1991), Hydrology and Chemistry of the African Great Lakes and Water Quality Issues: Problems and Solutions, Proceedings of the International Association for Theoretical and Applied Limnology, Congress 1991, Mitt. Internat. Verein. Limno. 23: 45-54 Hecky, Robert E., F.W.B. Bugenyi, P. Ochumba, J.F. TaUling, R. Mugidde, M. Gophen, and L. Kaufman (1995), Deoxygenation of the Deep Water of Lake Victoria, East Africa, Limnnol. Oceanogr. Hecky, Robert E., H.A. Bootsma, R.M Mugidde, and F.W.B Bugenyi (1996). Phosphorus Pumps, Nitrogen Sinks, and Silicon Drains: Plumbing Nutrients in the African Great Lakes, in Johnson, Thomas C., and Eric 0. Odada (eds), The Limnology, Climatology and Paleoclimatology of the East African Lakes, (New York, Gordon and Breach) forthcoming 1996: 205-224 Hirji, Rafik, and Alfred M. Duda (1995), A Comprehensive Approach for Managing the Lake Victoria Basin Ecosystem, Paper to the Nile 2002 Conference, Arusha, Tanzania, February 13-16: 20 pp. Hirji, Rafik (1995), Back to Office Report on the Tanzania River Basin Management and Improvement of Smallholder Irrigation Project, and the Lake Victoria Environment Management Project, June 12: 4 pp. + Ann. Hirji, Rafik (1995), Back to Office Report on the Seminar on Water Resources Management in Kenya, and the Tanzania River Basin Management and Improvement of Smallholder Irrigation Project, July 24: 6 pp. + Ann. Kamukala, G.L., and S.A. Crafter (1993), Wetlands of Tanzania: Proceedings of a Seminar on Wetlands of Tanzania, (Gland, Switzerland, IUCN-The World Conservation Union), 169 pp. Kaufman, Les (1992), Catastrophic Change in Species-Rich Freshwater Ecosystems; the Lessons of Lake Victoria, Bioscience 42.11, December: 846-858 Annexes Kaufman, Les (1995), Lake Victoria Environmental Management Program, Comments on the Draft Final Reports of National Working Groups 1 On Management of Fisheries and Control of Water Hyacinth and Other Invasive Weeds, July: 24 pp. Kaufman, Les, and Andrew S. Cohen (1993), The Great Lakes of Africa, Conservation Biology, 7.3, September: 632-633 Kaufman, Les, and Peter Ochumba (1993), Evolutionary and Conservation Biology of Cichlid Fishes as Revealed by Faunal Remnants in Northern Lake Victoria, Conservation Biology, 7.3, September: 719-730 Kenya, Ministry of Agriculture, Livestock Development, and Marketing (1990), Atlas of Irrigation and Drainage in Kenya, Irrigation and Drainage Branch, March:132 pp. Kenya, Ministry of Agriculture, Livestock Development and Marketing (1995), National Soil and Water Conservation Programme, Programme Planning Workshop, Machakos, 7-10 November: 23 pp. + Ann. Kenya, National Working Group 1 (1995), Draft Report on Fisheries Management and Control of Water Hyacinth and the Invasive Weeds, June Kenya, National Working Group 2 (1995), Draft Report on Management of Water Quality and Land Use Including Wetlands, June Kitchell, James F., Daniel E. Schindler, Richard Ogutu-Ohwayo, and Peter M. Reinthal (1995), The Nile Perch in Lake Victoria: Interactions Between Predation and Fisheries, draft paper, forthcoming in Ecol. Appl. Lake Victoria Environmental Management Programme (1995), Final Report by the Regional Consultants on Tasks 11, 16 and 17, in support of Regional Task Force 2 on Water Quality and Land Use Including Wetlands (Wallingford, UK), November: 320 pp. + Ann. Lipiatou, E., R.E. Hecky, S.J. Eisenreich, L. Lockhart, D.Muir, and P. Wilkinson (1996), Recent Ecosystem Changes in Lake Victoria Reflected in Sedimentary Natural and Anthropogenic Organic Compounds, in Johnson, Thomas C., and Eric 0. Odada (eds), The Limnology, Climatology and Paleocimatology of the East African Lakes, (New York, Gordon and Breach) forthcoming 1996: 523-540 Lowe-McConnell, Rosemary H. (1993), Fish Faunas of the African Great Lakes: Origins, Diversity, and Vulnerability, Conservation Biology, 7.3, September: 634-643 OSIENALA (Friends of Lake Victoria) (1995), The Preparation of Community Members of Lake Victoria Region for the Implementation of Lake Victoria Environmental Management Programme, Kisumu, February: 7 pp. 12 Annexes OSIENALA (Friends of Lake Victoria) (1995), Planning for the implementation of Lake Victoria Environmental Management Programme: A Community Based Approach (Workshop Proceedings, Recommendations and Proposals), May: 91 pp. OSIENALA (Friends of Lake Victoria) (1995), Regional Preparatory Grassroot Organizations' Workshop for the Lake Victoria Environment Management Programme, Kisumu, 4-9 June: 15 pp. Tanzania, National Working Group 1 (1995), Draft Report on Fisheries Management and Water Hyacinth Control, June 15 Tanzania, National Working Group 2 (1995), Draft Report on Management of Water Quality and Land Use, Including Wetlands, June Uganda, National Working Group 1 (1995), Draft Report on Fisheries Management and Control of Water Hyacinth and Other Invasive Weeds, June Uganda, National Working Group 2 (1995), Draft Report on Management of Water Quality and Land Use Including Wetlands, June United Nations Development Programme (1995), Lake Victoria Environmental Management Programme (Kenya), Promotion of Stakeholders Consultations and Community Participation, A Report by Elizabeth Oduor-Noah and Alice Ligunya, August: 147 pp. United Nations Development Programme(1995), Lake Victoria Environmental Management Programme (Tanzania), Stakeholder Consultation and Community Participation in Tanzania, A Report by L.A. Msambichaka, September: 89 pp. United Nations Development Programme(1995), Lake Victoria Environmental Management Programme (Uganda), Consultation for the Promotion of Stakeholder Partnership in Uganda, A Report by O.K. Odongkara, September: 47 pp. United Nations Development Programme(1995), Lake Victoria Environmental Management Programme, Draft Report of Regional Grassroot Organizations Workshop on LVEMP held in Mwanza, Tanzania, 12-15 September: 28 pp. United Republic of Tanzania (1995), Ministry of Agriculture, Programme for Control of Water Hyacinth in Lake Victoria, October: 44 pp. Wilson, Douglas C., and Modesta Medard (1995), The Implications for Fisheries Mangement of the Changing Situation in Lake Victoria Fishing Communities: Preliminary Findings, forthcoming in African Rural and Urban Studies, Draft Paper, August: 33 pp. Wilson, Douglas C. (1995), Factors Influencing the Relative Remuneration of Fishing Crew In A Context of Increasing Commercialization: the Case of Lake Victoria, Tanzania, Draft Paper, August: 32 pp. Annexes 13 World Bank (1994), Evaluation of Point Source Discharge Treatment Options in the Lake Victoria Area - Tanzania, Phase II Final Report, March: 108 pp. World Bank (1994), Economic Development Institute, Proceedings of the Seminar on Water Resources Management in Tanzania, Tanga, September 12-16: 218 pp. Wright, A.D. (1995), Outline of Water Hyacinth Control in Australia, Paper to FAO Meeting, Florida, September Young, David (1995), Lake Victoria Environmental Management Programme, Technical Mission, Report to the World Bank, 2 June: 45 pp. Annex 4 LAKE VICTORIA ENVIRONMENTAL MANAGEMENT PROJECT PROJECT PERFORMANCE AND IMPACT INDICATORS The project is designed to be a mixture of information-gathering, capacity- building, institution establishment, and actions to begin to deal with the environmental problems of the lake and its catchment, with an emphasis on fisheries management, water hyacinth control, improving water quality, and land use management (including wetlands). A central concern is to reduce the flow of nutrients and pollutants into the lake, and reverse some of the adverse environmental developments of the past. This project will attempt to lay the foundations in these areas, and provide a "central core" around which will coalesce a larger program of investments to clean up the lake, and establish sustainable development of the lake and its catchment in the face of the growing population pressures likely to be experienced. Project Implementation: success will be measured by (a) building capacity within the riparian universities, the line ministries, the LVEMP secretariats and the riparian comnmunities for environmental analysis, conservation and adoption of cohesive management practices on the lake; (b) harmonizing among the three countries legislation addressing management of fisheries and environmental variables important in the lake basin, and improved enforcement of this legislation; (c) establishment of the Lake Victoria Fisheries Organization (LVFO); (d) completion of gazetting and regulating fish landing sites within the pilot zone areas and enforcing acceptable fishing practices within a 5 km radius of fishing villages within these areas, with full participation of lake shore fishing communities; (e) establishing sustainable long-term capacity for management and control of water hyacinth and other invasive weeds in the Lake Victoria Basin, through integrated weed control methods and community involvement; (f) establishing a lake wide water quality and rainfall monitoring system with agreed parameters to generate information on eutrophication management and pollution control; and (g) completing a full inventory and resource survey of Lake Victoria wetlands, and preparing investment proposals for the economic management of these wetlands, including their rehabilitation. Project Impact: success will be measured by: (a) reductions in the nutrient and fecal coliform counts from towns bordering the lake; (b) reductions in sediment and phosphorus loading in rivers flowing into the lake; (c) reductions by at least 50 percent over five years in significant industrial pollutants entering the lake; (d) stabilizing the Nile perch catch at least at current levels, and increasing the recovery of other species; (e) measurable reduction in the infestation of water hyacinth; and (f) stabilization of areas retained as wetlands. LVEMP: Procurement Packages and Implementation Schedule KENYA Fiscal Years ACTIVITIES P.M.* 1997 1998 1999 2000 2001 1 2 131 141 1 2l l 4 l 1 2 T 3 14 1 I2 3 4 1. Works 1.1 Construction of fish ponds NCB 1 23 4 56 7 8 9 1.2 Construction of fish hatcheries NCB 23 4 56 7 8 9 1.3 Renovating offices and weevil rearing rooms NCB 1 23 4 567 8 9 1.4 Weirs NCB 1 23 4 56 7 8 9 1.5 Construction of Artificial Wetlands NCB 1 23 4 56 7 8 9 1.6 Littoral monitoring and rain gauge stations NCB 1 23 4 56 7 8 9 1.7 Micro Projects NCB 1 23 4 56 7 8 9 1.8 Kisumu Sewage Treatment Plant ICB 1 23 4 5 6 7 8 9 METHOD OF PROCUREMENT PROCUREMENT ACTIONS 5 Bid evaluation ICB-Intemational Competitive Bidding I Prepare bidding documents 6 IDA no objection for award NCB-Local Competitive Bidding 2 Submission of draft BID to IDA 7 Contract award ISP/NSP-lnternational/National Shopping Procedures 3 Clearance by IDA 8 Construction 4 Bidding period 9 Construction complete Procurement Method LVEMP: Procurement Packages and Implementation Schedule KENYA Fiscal Years ACTIVITIES P.M.* 1997 1998 1999 2000 2001 l 213 1 2 l 3 4 l 34T 1 4 l 2 3 4 1-2 3 4 2.Y Vehice 2.1 Cars, 4-Wheel Drive Vehicles, Motorcycles ICB t: 23 4 56 7 8 2.2 Bicycles, Boats, Canoes, Dinghies and Engines NCB 1 i23 4 56 7 8 3. Good 3.1 Laboratory Equipment ISP 1 23 4 56 7 8 9 3.2 Office Equipment and Computers ISP 1 23 4 56 7 89 3.3 Field Equipment ISP 1 234 5 789 METHOD OF PROCUREMENT PROCUREMENT ACTIONS 5 Bid evaluation ICB-Intemational Competitive Bidding I Prepare bidding documents 6 IDA no objection for award NCB-Local Competitive Bidding 2 Submission of draft BID to IDA 7 Contract award ISP/NSP-intemational/National Shopping Procedures 3 Clearance by IDA 8 Delivery 4 Bidding period 9 Installation Procurement Method LVEMP: Procurement Packages and Implementation Schedule TANZANIA Fiscal Years ACTIVITIES P.M.* 1997 1998 1999 2000 2001 II 2 13 I4 2 3 1 4 1 2 3 4 1 T 2 3 4 1 2 13 4 1. Works 1.1 Construction of fish ponds NCB 1 23 4 56 7 8 9 1.2 Construction of fish hatcheries NCB 1 23 4 56 7 8 9 1.3 Renovating offices and weevil rearing rooms NCB 1 23 4 567 8 9 1.4 Weirs NCB 123 4 56 7 8 9 1.5 Construction of Artificial Wetlands NCB 1 23 4 56 7 8 9 1.6 Littoral monitoring and rain gauge stations NCB 1 23 4 56 7 8 9 1.7 Micro Projects NCB 1 23 4 56 7 8 9 1.8 Mwanza and Bukoba Waste Management ICB 1 23 4 5 6 7 8 9 METHOD OF PROCUREMENT PROCUREMENT ACTIONS 5 Bid evaluation ICB-intemational Competitive Bidding I Prepare bidding documents 6 IDA no objection for award NCB-Local Competitive Bidding 2 Submission of draft BID to IDA 7 Contract award ISP/NSP-International/National Shopping Procedures 3 Clearance by IDA 8 Construction 4 Bidding period 9 Construction complete Procurement Method LVEMP: Procurement Packages and Implementation Schedule TANZANIA Fiscal Years ACTIVITIES P.M.* 1997 1998 1999 2000 2001 - I 1 2 131 14 l 2 1 3 4 I1 2 3 4 1I 2 3 4 1 2 3 4 2. Vehicles I 2.1 Cars, 4-Wheel Drive Vehicles, Motorcycles ICB 1 23 4 56 7 8 2.2 Bicycles, Boats, Canoes, Dinghies and Engines NCB 1 123 4 56 7 8 | 3. Goods 3.1 Laboratory Equipment ISP 1 23 4 56 7 8 9 3.2 Office Equipment and Computers ISP 1 123 4 56 | 7 89 3.3 Field Equipment ISP 1 234 5 789 METHOD OF PROCUREMENT PROCUREMENT ACTIONS 5 Bid evaluation ICB-International Competitive Bidding I Prepare bidding documents 6 IDA no objection for award NCB-Local Competitive Bidding 2 Submission of draft BID to IDA 7 Contract award ISP/NSP-Intemational/National Shopping Procedures 3 Clearance by IDA 8 Delivery 4 Bidding period 9 installation Procurement Method LVEMP: Procurement Packages and Implementation Schedule UGANDA CD Fiscal Years ACTIVITIES P.M.* 1997 1998 1999 2000 2001 . _ '~~~~~~~~~~~~~~~~~~ 2 13 14 l 2 3 1 4 1 1 2 3 l 4 1 1 2 3 l 1 f2 3 r4 I. Works I1 1.1 Construction of fish ponds NCB 1 23 4 56 7 8 9 1.2 Construction of fish hatcheries NCB 1 23 4 56 7 8 9 1.3 Renovating offices and weevil rearing rooms NCB 1 23 4 567 8 9 1.4 Weirs NCB 1 23 4 56 7 1 8 9 1.5 Construction of Artificial Wetlands NCB 1 23 4 56 7 8 9 1.6 Littoral monitoring and rain gauge stations NCB 1 23 4 56 7 8 9 1.7 Micro Projects NCB 1 23 4 56 7 8 9 1.8 Kampala Waste Management ICB 1 23 4 5 6 7 8 9 1.9 LVFO office refurbishment NCB 1 23 4 56 7 8 9 - - _ METHOD OF PROCUREMENT PROCUREMENT ACTIONS 5 Bid evaluation ICB-lntemational Competitive Bidding I Prepare bidding documents 6 IDA no objection for award NCB-Local Competitive Bidding 2 Submission of draft BRD to 1DA 7 Contract award ISP/NSP-lnternational/National Shopping Procedures 3 Clearance by IDA 8 Construction 4 Bidding period 9 Construction complete Procurement Method LVEMP: Procurement Packages and Implementation Schedule UGANDA UGANDA____________________________________________ ______________ Fiscal Years ACTIVITIES P.M.* 1997 1998 1999 = = 2000 2001 1 2 13 14 2 13 4 11 23 4 1 1 3 4 1 1 3 4 2. Vehicles --- 2.1 Cars, 4-Wheel Drive vehicles, Motorcycles ICB 1 23 4 56: 7 8 2.2 Bicycles, Boats, Canoes, Dinghies and Engines NCB 1i 23 4 56 7 8 3. Goods 3.1 Laboratory Equipment ISP 1 23 456 7 8 9 3.2 Office Equipment and Computers ISP 14 23 4 56: 7 895 3.3 Field Equipment ISP 1 23 56.'l 789 METHOD OF PROCUREMENT PROCUREMENT ACTIONS 5 Bid evaluation ICB-Intemational Competitive Bidding I Prepare bidding documents 6 IDA no objection for award NCB-Local Competitive Bidding 2 Submission of draft BID to IDA 7 Contract award ISP/NSP-lntemational/National Shopping Procedures 3 Clearance by IDA 8 Delivery 4 Bidding period 9 Installation Procurement Method ANNEX 6 LAKE VICTORIA ENVIRONMENTAL MANAGEMENT PROJECT Supervision Plan' Timing Staff Weeks Staffing Duration (weeks) FY1997 35 Bank resources of which: -- Task manager 10 -- Procurement Specialist 5 -- Operations Management Specialist 5 -Fisheries Biologist 4 -Limnology/Water Quality Specialist 4 -- Sociologist/Socio-economist 4 -- Water Hyacinth Control Specialist 3 FY1998 30 Bank resources of which: -- Task manager 10 -Operations Management Specialist 5 -Fisheries Biologist 4 -- Limnology/Water Quality Specialist 4 -Sociologist/socio-economist 4 -- Water Hyacinth Control Specialist 3 FY1999 40 Bank resources (mid term Review) of which: - Task manager 10 - Procurement Specialist 3 -- Sanitation Engineer 4 _ Operations Management Specialist 5 -- Fisheries Biologist 4 -Linmology/Water Quality Specialist 4 -- Socio-economist 4 -Water Hyacinth Management Specialist 3 -Soil Management Specialist 3 FY2000 25 Bank resources of which: -- Task manager 8 -- Operations Management Specialist 3 -- Sanitation Engineer 3 -Fisheries Biologist 4 -- Limnology/Water Quality Specialist 4 -Socio- economist 3 FY2001 20 Bank resources of which: - Task manager 8 - Operations Management Specialist 3 - Fisheries Biologist 3 -- Limnology/Water Quality Specialist 3 -- Socio-economist 3 Disbursements are scheduled to FY 2002. Some of the required expertise may be provided by other agencies involved in project supervision. Annex 7 LAKE VICTORIA ENVIRONMENTAL MANAGEMENT PROJECT GEF INCREMENTAL COSTS Lake Victoria is a "commons" of water, biota, nutrients, pollutants, and the human activities which use the resources of the lake and its catchments, and impact upon them. In matters such as fishing, the addition of nutrients to the lake, pollution of the lake and its tributaries, the economic characteristics of behavior in a "commons" apply - in particular, the incentives perceived by the individuals, and individual countries involved, all are conducive to actions which may be in the best, short-term interests of the individuals concerned, but not in the best interests of the whole group of countries, nor the global community. The project will be the first regional program to address the major environmental threats to the Lake Victoria ecosystem, all of which are transboundary in character. The project will develop the information, capacity and institutions needed for collective action, and test, through a number of targetted pilot actions and investments, the feasibility and initial impact of some of the priority regional initiatives needed to stabilize the lake ecosystem. Each project component involves significant transaction and regional capacity-building costs first to establish cooperative agreements, and second to implement priority elements of them on a trial basis. These costs are clearly incremental in that they are not in the national baselines, would not be incurred without the project, and address transboundary environmental issues. The project will lay the foundations - of knowledge, capacity, and cooperative institutional frameworks - for a long-term program of investments in the lake and its catchments, which will rehabilitate and stabilise the ecosystem. In particular, these will be investments in cleaning up the waste discharges from polluting industries, rehabilitating and expanding water supply and sanitation systems, reduction of soil erosion, and sustainable management of fisheries and wetlands. There will be substantial investments in these even within the five years of LVEMP implementation, guided by the conceptualization which has already taken place, and the findings of the LVEMP during implementation. Success in the current project will lay the foundations for longer term national benefits for the three countries concerned. For example, if the long-standing barriers to regional fisheries cooperation can be overcome, the design and implementation of a regional fisheries management program will eventually contribute to a more sustainable fish catch, as well as conservation of the lake's aquatic biodiversity. Installation of improved sanitation and water treatment facilities will have benefits for the health of local and national populations. There are, however, significant transaction costs which act as barriers to achieving these benefits, as demonstrated by the lack of progress to date. Examples of the barriers are the lack of institutional capacity, information and scientific understanding. The costs of overcoming these barriers are therefore truly incremental. So too are the costs of actions to achieve additional global benefits, such as aquaculture in support of endangered species, and conservation of critical habitats. Incremental costs of the project are estimated to be US$38.8 million (details in following table). In addition to financing the baseline and adjusted baseline measures from non-GEF (IDA) sources, the three riparian governments have agreed to contribute US$3.8 million from their own resources to finance a part of the project's incremental cost. They have requested a GEF grant of US$35 million to fund the balance. 2 Annexes Incremental Cost Matrix Component Cost X Cost Domestic Benefit Global Environmental Benefit Fish Baseline 0 None Biology/Biodiversity Conservation Alternative 6.58 Improved knowledge of aquatic populations and threats to their survival, with education and design of measures to strengthen conservation planning and advance understanding of evolution ____________ __ ; Increment :6.58 Aquaculture Baseline 1.55 Possible longer term economic gains from increased food production and trade in ornamental fish Alternative 3.10 Restoration of endangered species through development of sustainable uses, and avoiding unforeseen effects of exotic introductions I tncrement 11.55 Socio-Economic Baseline 2.00 Improved management of aquatic Studies resources to increase community benefits Alternative 2.67 Portion of socio-economic studies devoted to understanding how to sustain complex ecosystems while alleviating poverty :Increment o 0.67 . Establishing Baseline 0 None Database _____ Alternative 0.98 Shared database facilitating regional collaboration Increment 0.98: Fisheries Extension, Baseline 14.09 Gains from better fishing techniques, Policies and Laws reduced post-harvest losses, higher quality products Alternative 14.09 Rescue and preservation of endangered species through closed fishing areas, harmonisation of laws and regulations, and better enforcement Increment 0 Water Hyacinth Baseline 3.32 Reduced damage to infrastructure Control and improved human health Alternative 8.30 More effective, widespread, environmentally friendly biological control methods enabled by regional collaboration Increment 4.98 Water Quality Baseline 0 No additional investment justified in Monitoring the absence of a regional framework Alternative 9.58 Improved environment for endangered species, catalyzing regional collaboration in important international waters, and increased understanding of lake/catchment management to sustain resources of global importance I Increment 9.58 Annexes Incremental Cost Matrix Component Cost Cost Domesdc Benefit Global Environmental Benefit _ Category _US$m) _ _ _____ _ Industrial//Municipal Baseline 9.89 Identifying priority areas and Waste methods for investments in waste Management treatment Alternative 9.89 Increased knowledge of environmentally friendly biological methods for managing toxic waste through use of artificial wetlands for tertiary treatment of municipal and industrial waste Increment 0 Land Use/Wetlands Baseline 5.84 Identifying and managing agro- Management chemical hazards, reducing soil loss through investments in afforestation and soil conservation Alternative 14.07 Conservation of biodiversity in critical habitats through sustainable management of wetlands, and facilitating regional collaboration in understanding catchmentUlake interactions Increment 8.23 _ Lake Victoria Baseline 0 None Fisheries Organisation Alternative 2.28 Intemational management mechanism to harmonise environmental laws/regulations, and allow international collaboration in management of common pool resources Increment 2.28 LVEMP Secretariats Baseline 0 None Alternative 2.75 Coordination in capacity building for regional initiatives Increment 2.75 Support to Riparian Baseline 0 None Universities Alternative 1.06 Increased scientific capacity for sustainable conservation of biodversity Increment 1.06 Fisheries Levy Trust Baseline 2.06 Sustaining fisheries management by providing sources of funds for coordination, research, extension, monitoring and enforcement Alternative 2.06 Increased fiscal capacity for sustainable conservation of biodversity Increment 0 Pollution Disaster Baseline 0 None Management Alternative 0.17 Protecting integrity of international biological resources of immense value Increment 0.17 TOTALS Baseline 38.75 Alternative 77.58 Increment 38.83 32 IBRD 27780 1.33~ EAST AFRICA .~~ ~/--- >U A N D A I J I'\ - - ~~LAKE VICTORIA Z A I E ~ ~ ~ ~ ~~~~-r 'ENVIRONMENTAL ZA E J *~~~~~~ - -- / ~~~~MANAGEMENT PROJECT DRtAINAGE BASIN BOUNDARY ,5,120 It~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ AiNFALL GAUGES OPEN WATER SAMAFIJNG SITES MUA G L~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~AKE SIDE AND CATCHMENT PILOT ZONES BA~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ISOHYETS IMEAN ANNUAL RAINFALL.,.. -0 ----- ~~~~~~~~~~~~/~ ~PA*K/RESERVE BOUNDARIES (I) I~~~~~~~~~~~~Z~~~~dO. ~~~~~~~~~~ ~ELEVATIONS IN FEET. .5,000 I-.>' 3~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~6OG7,000 RIVERS (WITHIN DRtAINAGE BASIN BOUNDARY) 3,7 17 (W) ~~~~~~~~~~~~~~~~~~~~~~~~SWA.MPS o SELECTED OMRS AND TOWNS KAER RUU A N/ NATIONAL CAPITALS \/N V~~~~~~~~~~~~~~~~ -~~00 , MAIN ROADS ----RAILROADS k,78mb Ih). 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