Document of The World Bank FOR OFFICIAL USE ONLY Report No: 82540-SD PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT FROM THE GLOBAL ENVIRONMENT FACILITY IN THE AMOUNT OF US$7.73 Million TO THE REPUBLIC OF SUDAN FOR A SUSTAINABLE NATURAL RESOURCES MANAGEMENT PROJECT November 18, 2013 Environment, Natural Resources, Water and Disaster Risk Management Unit (AFTN3) Sustainable Development Department Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective June, 2013) Currency Unit = Sudanese pound (SDG) US$ 1 = 4.40SDG 1 SDG = US$0.23 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS AFTAR World Bank - Africa Agriculture and Rural Development Department of the Africa Region AFTCS World Bank - Africa Fragile States, Conflict and Social Development Unit AFTEN World Bank - Africa Environment Unit AFTFM World Bank - Africa Financial Management Unit AFTPE World Bank - Africa Procurement Unit - East ARC Agricultural Research Corporation ARRC Animal Resources Research Corporation BD Biodiversity GEF Focal Area BRICKS Building Resilience through Innovation, Communication and Knowledge Services project CAS Country Assistance Strategy CBD Convention on Biological Diversity CBO Community Based Organization CDD Community-Driven Development EMP Environmental Management Plans ESMF Environmental and Social Management Framework FAO Food and Agriculture Organization FCS Fragile and Conflict affected Situation FM Financial Management FNC Forestry National Corporation FRC Forestry Research Corporation GDP Gross Domestic Product GEB Global Environmental Benefits GEF Global Environment Facility GGWI Great Green Wall Initiative GIS Geographical Information System GNI Gross National Income 11 GoS Government of Sudan HCENR Higher Council for Environment and Natural Resources IDA International Development Association IEM Integrated Ecosystem Management IFAD International Fund for Agricultural Development IFR Interim Financial Report IMF International Monetary Fund INRM Integrated Natural Resources Management IP Indigenous People IPF Investment Project Financing I-PRSP Interim Poverty Reduction strategy Paper ISN Interim Strategy Note IUCN International Union for Conservation of Nature IUCN-EARO International Union for Conservation of Nature, Eastern Africa Regional Office IWRM Integrated Water Resources Management JICA Japan International Cooperation Agency LD Land Degradation GEF Focal Area LGA Local Governance Act M&E Monitoring and Evaluation MDGs Millennium Development Goals MDTF Multi Donor Trust Fund MoA Ministry of Agriculture MoARFR Ministry of Animal Resources, Fisheries and Range MoEFPD Ministry of Environment, Forestry and Physical Development MoFNE Ministry of Finance and National Economy MoU Memorandum of Understanding NAPA National Adaptation Program of Action NBSAP National Biodiversity Strategy Action Plan NGO Non Governmental Organization NRM Natural Resource Management ORAF Operational Risk Assessment Framework PA Protected Area PCU Project Coordination Unit PDO Project Development Objective PIM Project Implementation Manual PNSC Project National Steering Committee PRSP Poverty Reduction Strategy Paper PSIR Pressure State, Impact Response analysis PTC Project Technical Committee RAP Resettlement Action Plans RPA Range and Pasture Administration RPF Resettlement Policy Framework SAWAP Sahel and West Africa Program SBD Standard Bidding Documents SFM Sustainable Forest Management SLM Sustainable Land Management SLWM Sustainable Land and Water Management SOE Statements of Expenditures SPIU State Project Implementation Unit SSNRMP Sudan Sustainable Natural Resources Management Project iii STAP Scientific and Technical Advisory Panel TA Technical Assistance ToR Terms of Reference UNCBD United Nations Convention on Biodiversity UNCCD United Nations Convention to Combat Desertification UNDP United Nations Development Program UNEP United Nations Environment Program USAID United States Agency for International Development VDC Village Development Committee WCGA Wildlife Conservation General Administration WDR World Development Report Vice President: Makhtar Diop Country Director: Bella Bird Sector Director: Jamal Saghir Sector Manager: Magda Lovei Task Team Leader: Asferachew Abate /Siv Tokle iv SUDAN Sudan Sustainable Natural Resources Management Project (SSNRMP) TABLE OF CONTENTS I. STRATEGIC CONTEXT .................................................................................................... 1 A . C o u n try C o n text ........................................................................................................................................................1 B. Sectoral and Institutional Context ..................................................................................................................... 2 C. Higher Level Objectives to which the Project Contributes............................................................... 4 II. PROJECT DEVELOPM ENT OBJECTIVES ................................................................ 7 A. Project Development Objective (PDO) ............................................................................................................7 B . P roject B en eficiaries ................................................................................................................................................7 C. PDO Level Results Indicators ............................................................................................................................... 7 III. PROJECT DESCRIPTION ......................................................................................... 8 A . P roject C o m p o n en ts ................................................................................................................................................ 8 B . P ro ject F in a n cing ......................................................................................................................................................9 C. Lessons Learned and Reflected in the Project Design....................................................................... 10 IV. IM PLEM ENTATION .................................................................................................... 11 A. Institutional and Implementation Arrangements ............................................................................... 11 B. Results Monitoring and Evaluation ................................................................................................................ 12 C . S u sta in a b ility ........................................................................................................................................................... 1 2 V. KEY RISK S AND M ITIGATION M EASURES............................................................. 12 A. Risk Ratings Summary Table ............................................................................................................................ 12 B. Overall Risk Rating Explanation ...................................................................................................................... 13 VI. APPRAISAL SUM M ARY ......................................................................................... 13 A. Economic and Financial Analyses ................................................................................................................... 13 B . T e ch n ica l ................................................................................................................................................................... 1 3 C. Financial Management ........................................................................................................................................ 14 D . P ro cu re m e n t ............................................................................................................................................................ 15 E. Social (including Safeguards) ........................................................................................................................... 16 F. Environment (including Safeguards) ............................................................................................................ 16 Annex 1: Results Fram ework and M onitoring .................................................................... 18 Annex 2: Detailed project description................................................................................... 22 Annex 3: Im plem entation Arrangem ents .............................................................................. 42 Annex 4: Operational Risk Assessment Framework (ORAF)............................................ 57 Annex 5: Im plem entation Support Plan................................................................................ 61 Annex 6: GEF Increm ental Cost Analysis............................................................................ 64 Annex 7: Econom ic and Financial Analysis ......................................................................... 77 Annex 8: Docum ents in project files ...................................................................................... 80 Annex 9: M ap - Target Area .................................................................................................. 82 V  PAD DATA SHEET Sudan Sudan Sustainable Natural Resources Management Project PROJECT APPRAISAL DOCUMENT Africa Region Sustainable Development Department Environment, Natural Resources, Water and Disaster Risk Management (AFTN3) Basic Information Project ID Lending Instrument EA Category Team Leader(s) P129156 Investment Project B - Partial Assessment Asferachew Abate / Siv Finance Tokle Project Implementation Start Date Project Implementation End Date 1 1-December-2013 10-December -2018 Expected Effectiveness Date Expected Closing Date 2-April-2014 30-June -2019 Joint IFC No Sector Manager Sector Director Country Director Regional Vice President Magda Lovei Jamal Saghir Bella Bird Makhtar Diop Recipient: Republic of the Sudan Responsible Agency: Ministry of Environment, Forestry and Physical Development (MoEFPD) Contact: Mr. Mubarak Abdelazeem Ginawi Title: Director General of Environmental Affairs Telephone No.: 249-9-12280600 Email: m.ginawi@yahoo.com Project Financing Data(US$M) [] Loan [X] Grant [] Other [] Credit [] Guarantee For Loans/Credits/Others Total Project Cost (US$): 7,731,481 Total Bank Financing (US$): 7,731,481 Financing Source Amount(US$) BORROWER/RECIPIENT 0.00 International Development Association (IDA) 0.00 Global Environment Facility (GEF) 7,731,481 Total 7,731,481 Vi Expected Disbursements (in US$ Million) Fiscal Year 2014 2015 2016 2017 2018 0000 0000 0000 Annual 1.0 1.5 1.5 2.0 1.73 Cumulative 1.0 2.5 4.0 6.0 7.73 Project Development Objective(s) To increase adoption of sustainable land and water management (SLWM) practices in targeted landscapes. Components Component Name Cost (US$ Millions) 1. Institutional and policy framework 1.50 2. Community based sustainable management of rangelands and 5.23 forests and biodiversity 3. Project management, monitoring and evaluation 1.00 Compliance Policy Does the project depart from the CAS in content or in other significant respects? Yes [ ] No [X] Does the project require any waivers of Bank policies? Yes [ ] No [X] Have these been approved by Bank management? Yes [ ] No [ ] Is approval for any policy waiver sought from the Board? Yes [ ] No [X] Does the project meet the Regional criteria for readiness for implementation? Yes [X] No [ ] Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 x Natural Habitats OP/BP 4.04 x Forests OP/BP 4.36 x Pest Management OP 4.09 x Physical Cultural Resources OP/BP 4.11 x Indigenous Peoples OP/BP 4.10 x Involuntary Resettlement OP/BP 4.12 x Safety of Dams OP/BP 4.37 x Projects on International Waterways OP/BP 7.50 x Projects in Disputed Areas OP/BP 7.60 x Key Non Standard Conditions and Legal Covenants Name Recurrent Due Date Frequency Effectiveness conditions No Effectiveness Once vii Description of Conditions The following three conditions should be fulfilled for the Grant Agreement to be effective. (i)The Recipient has adopted the Project Implementation Manual, in form and substance satisfactory to the World Bank; (ii) The Recipient has established the Project Coordination Unit comprising (a) a Project coordinator; (b) a financial management specialist; (c) a procurement specialist; and (d) a monitoring and evaluation specialist, all with qualifications, experience and terms of reference satisfactory to the World Bank; and (iii) The Recipient has set up the Project Steering Committee with composition, mandate and resources satisfactory to the World Bank. Conditions Name Recurrent Due Date Frequency Financial Management No Not later than six (6) Once months after the Effective Date Description of Condition The Recipient shall cause to be installed a computerized financial management system for the Project all in a manner acceptable to the World Bank. Team Composition Bank Staff Name Title Specialization Unit Asferachew Abate Senior Environmental Specialist, Task Environment and Natural Resources AFTN3 Team Leader Management Siv Tokle Senior Operations Officer, Co-TTL Operations and NRM CPFIA George Ledec Lead Ecologist Biodiversity AFTN3 Tamene Tiruneh Safeguard Specialist Environmental safeguards AFTSE Stephen Danyo Natural Resources Management Environment and Agricultural AFTN1 Specialist Economics Desta Solomon Consultant Social Safeguards AFTAl Evarist Baimu Senior Counsel Legal LEGAF Diego Garrido Monitoring and Evaluation Specialist Monitoring and Evaluation AFTDE Limya Abdelaziz Monitoring and Evaluation Specialist Monitoring and Evaluation AFMSD James Mwangi Financial Management Specialist Financial Management AFTFM Hassine Hedda Senior Finance Officer Financial Management CTRLA Christiaan Johannes Finance Officer Financial Management CTRLA Maiada Kassem Finance Officer Disbursement CTRLA Richard Olowo Lead Procurement Specialist Procurement AFTPE Anjani, Kumar Senior Procurement Specialist Procurement AFTPE Paola Agostini Program Coordinator for GEF and Environmental Economist AFTN3 TerrAfrica Dahlia Lotayef Lead Environmental Specialist, Environment AFTN2 Edward Dwumfour Senior Environmental Specialist Environment AFTN3 viii Mohamed Osman Senior Agriculture and Rural Agriculture and Rural Development AFTCS Hussien Development Specialist Hadyiat Eltayeb Gender Specialist Gender PREM Ana Maria Gonzalez Environmental Economist Consultant Environment AFTN3 Maisa Nourien Team Assistant Administration AFMSD Leoncie Niyonahabonye Office Manager Management AFTN3 Mistre Hailemariam Team Assistant Administration AFCE3 Tesfahiwot Dillnessa Team Assistant Administration AFCE3 Non Bank Staff Name Title Office Phone City Locations Country First Location Planned Actual Comments Administrative Division Sudan Kassala State Telkuk El Gezira State Wad Bugul White Nile State Aum Rimita Institutional Data Sector Board Environment Sectors / Climate Change Sector Major Sector Sector % Adaptation Co- Mitigation benefits % Co-benefits % Agriculture, fishing, and forestry General agriculture, 60 40 fishing and forestry Agriculture, fishing, and forestry Forestry 40 40 60 Total 100 I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information applicable to this project. Themes Theme Major theme Theme % Environment and natural resources Environmental Policies and Institutions 20 management 1x Environment and natural resources Other Environment and Natural Resources 30 management Environment and natural resources Biodiversity 30 management Environment and natural resources Land administration and management 20 management Total 100 X  I. STRATEGIC CONTEXT A. Country Context 1. Sudan is situated in north-eastern Africa with a coastline bordering the Red Sea. It is the third largest country in Africa with a population of 39 million. The government administrative structure is composed of a federal government, 18 states and 176 local government councils. The federal level has a national assembly and Council of States composed of two representatives of each state. Each state has its own constitution but the local governments are ruled by the Local Government Act (LGA) enacted by the federal government. The federal and state constitutions as well as LGA stress the principle of autonomy at the different levels of government and the need for mutual respect of this autonomy. 2. Sudan has been in conflict for most of its independent history. While the defining conflict between the northern and southern regions was largely resolved by the secession of the latter to form the Republic of South Sudan in July 2011, several other conflicts continue in different stages of intensity, stalemate, or resolution. On-going conflict and fragility drivers in Sudan fall under four broad categories: governance and political institutions; economic structures and public sector performance; ethnicity, diversity and religion; and the environment and natural resources 3. Human development indicators remain low and Sudan ranks 171 out of 187 countries in the 2013 UNDP Human Development Index. Prospects for Sudan meeting Millennium Development Goals (MDGs) by 2015 are bleak, especially for education and maternal health, hunger and malnutrition in children under 5 years (2013 MDG Report, UN). 4. Over the last decade, Sudan enjoyed an average real economic growth of seven percent. The high real GDP growth and the even higher inflation, in a context of a stable nominal exchange rate pegged to the dollar, swelled the nominal GDP in US dollars from US$10 billion in 1999 to US$65 billion in 2010. In per capita terms, Sudan's GNI rose from around US$350 per capita in the beginning of the 2000 to about US$1,600 in 2011, putting Sudan nominally in the ranks of lower-middle income countries. Nonetheless, the loss of about three-quarters of oil production owing to the secession of South Sudan in July 2011 led to a substantial increase in the fiscal deficit, a deterioration of the trade balance, and a massive devaluation of the currency. The shock led to the economy contracting by 3.3 percent in 2011 and by a further 11.1 percent in 2012 (IMF estimates). The fiscal deficit has been deepening, reaching an estimated 3.7 percent of GDP in 2012. 5. Sudan continues to suffer wide and deep swaths of poverty and stark inequality between regions. Estimates set the average poverty incidence at 46.5 percent (2009 National Baseline Household Survey). The poverty rate is significantly higher in rural areas (58 percent) than in urban areas (26 percent), and varies markedly across states, ranging from 26 percent in Khartoum state to 62.7 percent in Darfur. The high population growth rate (2.7 percent), high fertility rate (5.6 children per family), and uneven population density represent challenges to sustainable development. ISN (2014-2015), The Republic of Sudan, Report no. 80051-SD, page, page 39. 1 6. The main determinants of poverty in Sudan include (i) sustained and multiple conflicts, which undermine opportunities for economic and social development, feeding back into grievance, and driving fresh conflict; (ii) lack of economic diversification as reflected in the over-dependence on the extractive sector and, neglect of the agriculture and livestock sectors, which are marred by low productivity and vulnerability and from where the poorest 40 percent of the population derive their livelihoods; (iii) unequal distribution of fiscal resources and unequal access to natural resources, especially between the centre and the periphery, which exacerbate inequality across regions; and (iv) governance failures as reflected in an inadequate policy framework and incentives for private sector investment. 7. Gender disparities remain persistent in Sudan. Women comprise only 23 percent of the formal economy, but 70 percent of the informal economy, with a majority of them engaged in agricultural production. Despite relative parity in enrolment and retention rates in primary education, significant variations exist across states, rural/urban environments and categories of vulnerability. The 2012 Education Status Report notes the compounding negative impact of poverty and gender inequality, highlighting in particular that poor girls living in rural areas are among the least likely to access educational opportunities. Barriers to health care include lack of access to adequate health facilities and trained staff, as well as high costs for services and medicine. Socio-cultural factors also play a role in the health status of women. (MDTF-N Gender Review 2013). 8. Like in other Sahelian countries, livelihoods in Sudan depend heavily on soil, water and vegetation resources. It is estimated that agriculture (crops, livestock and forestry) contributes 35-40 percent of GDP (with livestock accounting for 50 percent of the production) and employs more than 80 percent of the total population (Lee, et al, 2013). Traditional farming accounts for 60-70 percent of the agricultural output, and is largely subsistence production based on shifting cultivation and livestock rearing (Badri, 2012). The wildlife of Sudan presents a rich base of biodiversity of high value. The country is also rich in mineral resources. B. Sectoral and Institutional Context 9. Sudan faces environmental challenges due to its geographic location within the fragile Sudano-Sahelian and sub-Saharan African zones. Short variable erratic rainy seasons, arid lands, and poor sparse vegetative cover contribute to the country's vulnerability. In addition, the soils in the area are highly susceptible to wind and water erosion. The steady increase of both human and livestock populations puts pressure on natural resources, and has resulted in desertification, land degradation, water pollution, soil erosion and nutrient loss, and deterioration of biodiversity across large tracts of the country. Occasional floods, such as the flood in August 2013 which affected more than 300,000 people, further impacts the precarious environment. Consequently, Sudan has severe localized food insecurity resulting from reduced early harvests, crop failure, localized flooding and drought, low food stocks, persistent high prices, civil unrest, strife and insecurity restricting access to agricultural land and food, and an increasing influx of refugees and internally displaced persons. 10. Unplanned, non-sustainable and poorly managed uses of land and water along with natural climate variability and frequently occurring droughts, have exacerbated the problems. Rainfall in some areas of the country has been steadily decreasing over the last 40 years, and the 2 Sahara desert is advancing at a rate of about one mile a year, eliminating grazing land and water holes (Badri, 2012). Forest ecosystems2 throughout Sudan have been deforested3 and degraded due to fire, uncontrolled grazing, overcutting, and encroachment by agriculture. Increasing pressure on land by the expansion of mechanized and rain-fed farming, as well as overgrazing, have restricted rangelands and increased vulnerability of farmers and pastoralists (Badri, 2012). In addition, the greatest damage to wildlife has been inflicted by habitat destruction and fragmentation from farming and deforestation. The degradation of the country's natural resources has caused serious negative impacts on agricultural productivity4 and the livelihoods of the poor, particularly those that depend on livestock and rain-fed agriculture. 11. Policy and investment responses are fragmented and inadequate. Federal, state and local Governments and their constituencies are overwhelmed by the scale and complexity of the problems confronting production and conservation landscapes. Attempts within most of tiers of Government to address these problems have generally been ineffective in the face of the following challenges: (i) lack of sufficient financial allocations; (ii) unclear and overlapping mandates of institutions responsible for various components of the rural landscape; (iii) insufficient technical capacity in these institutions; (iv) insufficient knowledge and updated data 5 to address such complex issues ; (v) absent or weak land-use planning; (vi) limited research capacity; (vii) weak regulatory compliance and enforcement; (viii) weak community involvement in prevention and restoration activities; (ix) insufficient attention to alternative livelihood issues; and (x) insufficient attention to transparent governance, corruption, and local participation. The different challenges are interwoven and require integrated solutions. The fragmentation of institutions, information, and incentives weakens the ability of Government institutions and the communities that they serve to address the issues in a strategic and integrated manner. More information on the baseline situation can be found in Annex 2 and 6. Institutional context for forest, rangelands and biodiversity conservation in Sudan 12. Federal level ministries and specialized agencies: The Ministry of Environment, Forestry and Physical Development (MoEFPD) and the Ministry of Animal Resources, Fisheries and Range (MoARFR) are the main federal actors managing natural resources in Sudan. The key roles of these ministries are policy formulation, planning and monitoring of progress in the sector development, research and extension services for agriculture, livestock, forestry, fisheries, pastures and overall natural resources protection, conservation and development. A number of research centers are associated with various ministries, related to agriculture; animal resources; wildlife; and forestry. Key agencies include: 2 Sudan's forests cover 11% of the total country's area (FAO, FRA, 2010). Most of the country's forests are open or semi-open habitat, with 4% of Sudan's land area mandated as forest reserves that receive a special level of protection and management. 3 The average annual increment of growing forest stock volume is estimated as 1.340 million cubic meters of which 5% is removed per year (Badri, 2012). Between 1990 and 2005, the country lost 11.6 percent of its forest cover (UNEP, 2007). 4 The World Development Report 2010 (WDR) estimated that Sudan's agricultural yields are expected to decline by 56% by 2080, the steepest decline in the world. 5 For example, the country has identified absence of adequate data and information on areas and types of range, seasonal charges, grazing potential and capacities of the different range types. Some key data has also not been updated since the separation of South Sudan in 2011. 3 * The Higher Council for Environment and Natural Resources (HCENR) was established in 1991 to coordinate and advise on making effective policies, laws, plans and institutions that solve problems of natural resources degradation in Sudan. The HCENR is affiliated to the MoEFPD, and represents Sudan as a focal point for most of the global environmental conventions. * The Forest National Corporation (FNC), a semi-autonomous institution under the MoEFPD, was created in 1989 with the responsibility of coordinating the forestry sector, formulating and following up the implementation of policies, planning and undertaking administrative tasks for forests and woodland management. * The Range and Pasture Administration (RPA), a decentralized authority under MoARFR, has responsibility for planning, conservation and development of rangeland programs, protection of rangelands against bushfires, rehabilitation of degraded rangelands and execution of national and internationally assisted projects. 13. At the State level: Each of the 18 States has executive (Governor and Council of Ministers), legislative and judicial branches. The Ministry of Agriculture and Irrigation has State presence with extension services. The MoEFPD acts at the state level through State Ministers, FNC and HCENR. FNC has regional technical divisions reporting to FNC headquarters, while the HCENR has branches in different States (Kassala, Gezira) in order to monitor the implementation of development programs related to natural resources and collect data and information on changes in the environment, under the chairmanship of the State Governors. 14. At the local level: Local associations, farmer/producer and grassroots groups are involved with natural resources management, such as the farmers associations, village councils, agricultural cooperatives, women's groups, youth groups, vocational training centers, market vendors, livestock producer associations, unions and service providers. 15. The project will build on various donor initiatives related to the project scope, including Capacity Development Project for Provision of the Services for Basic Human Needs in Kassala with Japan International Cooperation Agency (JICA) and the World Bank Sustainable livelihoods for displaced and vulnerable communities in Eastern Sudan, under the Transitional Solutions Initiative (TSI). The proposed project will coordinate with the Butana Integrated Rural Development Project by the International Fund for Agricultural Development (IFAD) and GEF; and two adaptation projects on Resilience in the Agriculture and Water Sectors, and Sustainable and Climate Resilient Rainfed Farming and Pastoral Systems (GEF-UNDP). The Community Watershed Management project under the Nile Basin Initiative has been particularly relevant in sharing lessons and approaches. C. Higher Level Objectives to which the Project Contributes National and Regional Priorities 16. Sudan has recognized the importance of natural resources management since the beginning of the 20th century and first passed legislation relating to forests and wildlife in 1902. Strategies and polices that call for sustainable natural resources management include Decentralization of Natural Resources Management (1991), the National Comprehensive Strategy (1992-2002), National Action Plan to Combat Desertification (1992) and the Five-Year National Strategic Plan (2007-2011). 4 17. The proposed Sudan Sustainable Natural Resources Management project (SSNRMP) objectives and design are fully in line with policies and strategies developed by the Government of Sudan covering natural resources, including the 2001 Environment Conservation Act, the Forest and Renewable Natural Resources Act, the Agricultural Policy; and the Wildlife Conservation and National Parks Act. The Forest Policy stressed the role of forests in environmental protection, recognized and encouraged the establishment of community, private and institutional forests and raised the national goal of forest reserves from 15 to 20percent of the total area of the country. The proposed Project is also consistent with the National Biodiversity Strategy Action Plan (NBSAP, 2000), which underscores the need for conservation of biodiversity by building capacity and taking legal measures to conserve flora and fauna. The SSNRMP will also complement the activities planned under the 2007 National Adaptation Plan of Action (NAPA). Further, the proposed project will contribute to the objectives of international environmental conventions, namely the United Nations Convention to Combat Desertification (UNCCD) to which Sudan became Party in 1992 and the United Nations Convention on Biodiversity (UNCBD) signed by Sudan in 1995. 18. The proposed Project is part of the Sahel and West Africa Program (SAWAP) which supports the Great Green Wall Initiative (GGWI) that was endorsed by the Sahel Heads of State in June 2005 in Burkina Faso. The SAWAP, approved by the GEF Council in May 2011, supports the implementation of a country-driven vision of integrated natural resource management for sustainable and climate-resilient development in twelve countries in West Africa and the Sahel (Benin, Burkina Faso, Chad, Ethiopia, Ghana, Mali, Mauritania, Niger, Nigeria, Senegal, Sudan and Togo). The Sudan Council of Ministers formally ratified the GGWI in June 2010; which was followed by the appointment of the GGWI focal point within FNC. A national committee was established for the GGWI composed of representatives from various line ministries and acting as a national level steering committee to oversee implementation of projects supporting the GGWI. 19. Additionally, the project builds on the TerrAfrica Platform for sustainable land and water management (SLWM). TerrAfrica is an African-driven global partnership program to scale up sustainable land and water management across sectors in over 23 Sub-Saharan countries, by reinforcing investments, institutions and information at country and regional levels. The project will benefit from the collaborative approach and regional multi-sector partnership that is in place under the platform and which all the participant countries, including Sudan, are implementing. By building on this integrated programmatic approach, each country can benefit from lessons learned in various projects and programs. World Bank Strategy 20. The Proposed Project is consistent with the Vulnerability and Resilience pillar of the World Bank Africa strategy, Africa's Future and the World Bank's Support to it, and the focus on Enhancing Resilience of Dryland Areas, as well as the Bank's conflict and fragility agenda consistent with the 2011 World Development Report on Conflict, Security and Development, which emphasizes action on internal and external stresses that burden countries with low response capability. 21. The recently approved World Bank Interim Strategy Note (ISN, September 2013, Report No. 80051-SD) for FY13-14 is aligned to the Government's Interim Poverty Reduction Strategy 5 Paper (I-PRSP). The main objective of the ISN is to support the Government in poverty reduction and enhance shared prosperity, through a partnership approach, given Sudan's non- accrual status and ineligibility for IDA funding. The proposed Project will contribute to ISN Pillar 2: Address Socioeconomic Roots of Conflict, which includes sustainable natural resource management, using community-driven development. The project will also contribute to the cross-cutting theme of Governance and Gender that aims to mainstream gender to improve women's access to public resources and opportunities. 22. The I-PRSP, ratified by the Parliament in November 2012, provides the framework and the roadmap for the elaboration and implementation of the full PRSP. The Project is fully aligned with the I-PRSP's key areas of focus that include protecting natural resources through the development of forests, pastures and range lands; re-establishment of the vegetative cover, the development of the Gum Arabic Belt and the combat of desertification; improving agricultural water management; promoting better management of intensive livestock systems; and maintaining payments for environmental services. The I-PRSP also focuses on integrating the principles of sustainable development into the country's policies and programs for the sustainable use of environmental resources. In addition, under the I-PRSP and the emergency economic recovery program, the Government of Sudan has identified agriculture and livestock sectors as priorities and has committed to spending 20 percent of public expenditure on agriculture and livestock infrastructure and technical innovations. The proposed project will promote sustainable land and water management practices which will protect the country's natural resources. Consistency with GEF Strategies and Strategic Programs 23. The proposed multi-focal project contributes to the Land Degradation (LD) and Biodiversity (BD), GEF Focal Areas and Sustainable Forest Management (SFM) (for details, see Annex 6). Within the Land Degradation focal area, the project will contribute to Strategic Objective, LD-3 Reduce pressures on natural resources from competing land uses in the wider landscape. The project will directly address land degradation challenges in the targeted areas by promoting community-based sustainable land and water management practices and building/supporting existent enabling environments for sustainable natural resources management. The activities related to biodiversity conservation in the targeted protected areas will contribute to the Biodiversity Strategic Objective 1: Improve sustainability of protected area systems. The project will also contribute to the GEF's BD strategic objective 2: Mainstream Biodiversity Conservation and Sustainable Use into Production Landscapes, Seascapes and Sectors, by incorporating measures to conserve biodiversity in policy and regulatory frameworks. Finally, the project will aim at reducing pressures on forest resources and generate sustainable flows of forest ecosystem services (Strategic objective SFM-1). The project will follow the landscape approach, which integrates people's livelihood objectives in the management of the different ecosystems within the landscape. 6 II. PROJECT DEVELOPMENT OBJECTIVES A. Project Development Objective (PDO) 24. The PDO 6 is to increase the adoption of sustainable land and water management (SLWM) practices in targeted landscapes. 25. The project will aim to achieve this through the (i) adoption of improved soil and water management practices; (ii) forested ecosystem rehabilitation and rangeland management; (iii) creation of sustainable alternative livelihood activities related to natural resource management; and (iv) strengthened capacity to implement SLWM and biodiversity conservation. B. Project Beneficiaries 26. The beneficiaries of the project are the communities living in the localities of the selected states, including women, pastoralists and landless villagers who would benefit from the agroforestry systems and rehabilitated forest reserves. The forecast benefits will arise from improved tree and vegetation cover, improved ecosystem health, and overall better managed habitats. Livelihood opportunities based on sustainable management of natural resources will be created. Local communities will also be empowered through their roles as active participants in the conservation and sustainable resource management activities. It is expected that over 50,000 people will directly benefit from the project. 27. The project will pay special attention to gender issues. Women will specifically play a central role in those project activities which aim to improve sustainable livelihoods and provide alternative sources of energy. Such activities will lighten the burden of gathering firewood and water and allow women more time for alternative income generation, child rearing and capacity building activities. Analytical work will be gender-informed, addressing the differentiated needs of men, women, boys and girls, based on assessment on how gender is included in the policies and legal framework related to natural resource management in Sudan. Women's involvement in forest and rangeland management processes will be ensured through village-level decision- making and gender-adapted training. 28. The project will also provide support to Government institutions involved in the management of forests and protected areas, rangelands and wildlife, which will benefit from institutional and technical capacity building related to the forest and rangeland management supported by the project. C. PDO Level Results Indicators 29. The key results indicators will include the following: * Land area where sustainable land and water management practices are adopted as a result of the project (104,000 ha) (Core Indicator). * Direct project beneficiaries (50,000 within 7,000 households with 35 percent female beneficiaries) (Core Indicator). * Areas brought under enhanced biodiversity protection (17,400 ha) (Core Indicator). 6 The PDO is also the Global Environment Objective (GEO). 7Average family size is between 6 and 7 people. 7 III. PROJECT DESCRIPTION A. Project Components 30. The strategic approach of the project will be based on establishing participatory models for sustainable land and water management integrated with biodiversity and forest conservation in targeted areas, underpinned by selected capacity and policy enhancements that would be necessary to implement SLWM in Sudan on a broader scale. The project will have three components: Component 1: Institutional and Policy Framework (US$ 1.5 million) 31. The project will support key institutions involved in natural resources management (MoEFPD, FNC, WGCASPIU and RPA) by strengthening their capacity to formulate, implement and monitor programs and projects geared towards the sustainable management of natural resources and biodiversity conservation, based on a capacity enhancement plan. The capacity development program will be flexible and modular based on experiences in the implementation of component 2. This support will be used to: (i) develop effective inter-agency collaboration mechanisms at the central and state level; (ii) assist communities in preparing and implementing investments under integrated land management plans; and (iii) manage, monitor, and maintain infrastructures by Village Development Committees (VDCs). Second, the project will contribute to addressing the lack of effective comprehensive policy and legislative framework that deals with sustainable forest and land use management in an integrated, multi- sectoral way. A strategy will be developed with practical recommendations, measures and policies for effective cooperation at center-state-local and community levels for the protection and conservation of the natural resource base. The project will work with HCENR to strengthen policy framework and legislation for SLWM and biodiversity conservation. Third, the project will help address key barriers in terms of information and knowledge related to broader adoption of SLWM and biodiversity conservation practices. The analysis will provide information as to what would be the best practices to promote in each target locality and landscape (in component 2) based on relevant baseline data collection. A communication plan will be designed and implemented in order to disseminate information concerning processes, results and lessons learned through the program to key ministerial departments and national agencies, state and local governments, bilateral and multilateral development partners, non-Governmental organizations and beneficiaries. Component 2: Community based sustainable management of rangelands, forests and biodiversity (US$ 5.23 million) 32. The project will support the preparation of integrated land management plans for the gazetted Wad Bugul reserve in the Butana area in the Rufaa locality of Gezira State, Telkuk Forest Reserve in Kassala State, and the rangelands in Aum Rimta including sites such as Al Baja and Um Jara in White Nile State. These plans will be implemented through forest ecosystem rehabilitation and restoration: In Gezira, the gazetted Wad Bugul Forest Reserve (totaling about 15,000 ha) will be rehabilitated. In Kassala State, the project will gazzette and rehabilitate 2,400 ha of the Telkuk Forest Reserve. Proposed project sites can support many of the original small mammals, birds, reptiles, other fauna, and plant life typical of the Sahel biome. The project is expected to benefit biodiversity conservation through the gazetting of forest 8 reserves; restoration of native vegetation by reforestation, enrichment planting, natural regeneration, sand dune stabilization, and effective implementation of management plans. Given the importance of livestock in Sudan and its impact on land degradation, sustainable rangeland management activities related to husbandry and livestock are crucial. Activities will include establishment of shelter belts for sand dune fixation, demarcation of animal migration routes and grazing land rotations, establishment of nurseries for rangeland rehabilitation, clearing and opening of fire lines to protect rangelands. Local communities will receive technical assistance to acquire the capacity to conduct the selected activities above, including training to support the organization of communities in associations (cooperatives) around specific NRM livelihood initiatives. Component 3: Project management, Monitoring and Evaluation (US$ 1.0 million) 33. Project Management support includes procurement, financial management, environmental and social safeguards, annual work plans and organization of supervision missions. Monitoring and Evaluation will provide support for operating a M&E system that will track the project results, including those registered in the GEF tracking tools for Biodiversity, Land Degradation and Sustainable Forest Management. The M&E system will work in coordination with the SAWAP Program so that key indicators can be aggregated from the country level to the regional Sahel level. To achieve this, the project will receive complementary support from the BRICKS project for regional portfolio monitoring that will reinforce benchmarking and improved investment design and execution. Project Location 34. The project will be implemented in three states, namely, Kassala, Gezira and White Nile. These areas were selected based on eligibility criteria that included: (i) high potential for undertaking soil, water, forest, and biodiversity conservation activities; and (ii) ecological and socioeconomic similarities, such as fluctuation of rains, land degradation, decline of productivity, reduction in biodiversity, accompanied by socioeconomic problems in addition to climate change adaptation needs; and (iii) accessibility and security. Annex 9 shows a map highlighting the project's target area, and Annex 2 provides details on the geographic scope. B. Project Financing 35. The project lending instrument is Investment Project Financing (IPF) with a five-year implementation period, to be financed by a GEF Grant in the amount of US$ 7.73 million. Table 1 provides a summary breakdown of costs by project component. 9 Table 1: Summary of Project Cost GEF Percent of Project Component Financing GEF (US$ million) Financing 1. Institutional and Policy Framework 1.5 19 2. Community based sustainable management of rangelands 5.23 68 and forests and biodiversity conservation activities in targeted States 3. Project management, communications and Monitoring and 1.0 13 Evaluation Total Baseline Cost 7.73 100 Total Project Cost 7.73 100 C. Lessons Learned and Reflected in the Project Design 36. Landscape management is complex, especially in a fragile environment, and must address a myriad of interactions between land, water and people, building on the following lessons: (i) Successful SLWM initiatives are characterized by openness to testing innovative approaches, while insisting on rigorous and locally appropriate design and monitoring. (ii) The project will only succeed under an integrated approach that addresses livelihoods and landscape management. Land and water management interventions can safeguard natural resources, while livelihoods interventions can reduce pressure on natural resources. (iii) Country ownership and a shared vision by the major stakeholders involved in natural resources management at federal, state and local is critical for successful implementation and sustainability. 37. Development priorities, programming sectors and project-level activities must be determined by need, using a combined bottom-up/top-down approach. Community-Driven Development (CDD) programs are relatively new and innovative in Sudan, but the Gum Arabic project's work with communities offers a model for increased bottom-up accountability systems that can have positive impact across the sector working in tandem with national policy reform and effective implementation outline a successful strategy. Other lessons include the following: (i) Identifying mechanisms for effective gender mainstreaming in the project activities from the outset is critical to ensuring equitable access to and benefit from project interventions, as identified in the MTDF evaluation. (ii) It is also important to engage possible marginalized groups. In the Gum Arabic project, the organizational structure of some community-based Gum Arabic Producer Associations appears to have been dominated by local leaders. Mechanisms will be developed that ensure broad community member engagement. (iii) An efficient knowledge management and sharing system is necessary for stimulating community participation, consultation and transparency, facilitating horizontal inter- community communication to share best practices and build social capital. (iv) Determining the capacity of counterparts and implementing partners to incorporate appropriate capacity development into the project will increase the probability of success and help ensure sustainability after closure. 10 IV. IMPLEMENTATION A. Institutional and Implementation Arrangements 38. The proposed institutional structure for the project will be based on two inter-related levels: the governance/advisory level and the implementation level. Annex 5 includes details of the implementation arrangements. Governance/advisory 39. The Inter-ministerial Project National Steering Committee (PNSC) will provide orientation and guidance for the SSNRMP activities. The PNSC will be chaired by the MoEFPD supported by the State Ministries of MoEFPD acting as deputy chairpersons. This steering committee will comprise all concerned agencies and entities at the federal level8. The MoEFPD Director of Environment serves as a member and as the rapporteur of the committee. The committee will meet twice a year, and the Project Coordination Unit (PCU) will be represented and contribute in these meetings. 40. The Project Technical Committee (PTC) represents all relevant stakeholders and will be chaired by the MoEFPD Director of Environment, with the National Project Coordinator as Secretary. It will be supported by technical staff of FNC, RPA and WCGA at the Federal level. The main objective of the PTC is to advise the PCU during project implementation to ensure that the project activities are technically sound. The PTC will meet regularly to discuss work plans and implementation progress. Implementation 41. The MoEFPD has overall responsibility for the project's implementation. Through Memoranda of Understanding (MoU), certain specialized functions will be provided by partner organizations in coordination with MoEFPD. Key partner organizations comprise RPA and FNC. Implementation at Federal Level: The Project Coordination Unit (PCU), based in the MoEFPD, will be responsible for carrying out the daily activities, all aspects of project disbursement and overall supervision and coordination of the project implementation at all levels, including procurement and financial management. It will report to the PNSC and will be supported by relevant staff from the existing Government agencies, hired consultants and others. 42. Implementation at State and Community Level: The State Project Implementation Unit (SPIU) will work closely with all the stakeholders at the State, local, and community levels during the project implementation. The SPIU will report directly to the PCU based at MoEFPD. The composition of this unit will be tailored for each of the selected States: In Gezira and Kassala, the technical work will be headed by the State-level FNC Forest Director, while the State Director Range and Pasture Administration will coordinate activities in White Nile State. These units will draw on technical, administrative and financial staff, as required, and be supported by a project State M&E coordinator. The Village Development Committees (VDCs) will assist to liaison the SPIU with the larger communities. 8 Ministry of Foreign Affairs, Ministry of Finance and National Economy; Ministry of Agriculture and Irrigation, Ministry of Environment, Forestry and Physical Development; Ministry of Animal Resources, Fisheries and Rangelands; Ministry of Tourism, Antiquity and Wild Life; Higher Council for Environment and Natural Resources; and a representative of civil society. 11 B. Results Monitoring and Evaluation 43. The M&E system aims at: (i) assessing implementation performance in relation to the expected project outcomes, outputs and budget; (ii) proactively identifying implementation challenges and taking corrective actions; and (iii) documenting lessons learned and incorporating them into decision making on project implementation and sustainability. The project M&E will be linked to the regional M&E system established for the SAWAP portfolio, through the BRICKS9 project. 44. The PCU and SPIUs will be responsible for the collection of project-specific data which will then be aggregated and analyzed by the M&E specialist. Data will be gender disaggregated. Also, the project will use information and communication tools to involve communities in reporting their own data, and incorporate capacity building for monitoring, evaluation and measurement. 45. Monitoring and evaluation reports, including environmental and social monitoring results, will be prepared quarterly at the state level and semi-annually at the federal level. The quarterly reports will be shared among the SPIUs, the PTC and other key stakeholders. The semi-annual reports will be circulated to the PNSC and development partners. 46. The joint Bank-GoS semi-annual implementation support missions will assess the status of key project outcomes and update legal covenant compliance. The Mid-Term Review will be conducted two years after effectiveness to assess the project midway through implementation. The World Bank will review the results and prepare the implementation completion report, no later than six months after project closure. The project will also monitor on the relevant indicators and targets established by the GEF Biodiversity, Land Degradation and Sustainable Forest Management Tracking Tools and report on these at mid-term and closure. C. Sustainability 47. Sustainability of the project activities and benefits will be enhanced through its community-based approach. With strengthened management capacity, the communities will be in a better position to own and sustain the project's results. See Annex 2. V. KEY RISKS AND MITIGATION MEASURES A. Risk Ratings Summary Table RISKS RATING Stakeholder Risk High Implementing Agency Risk - Capacity Substantial - Governance Substantial Project Risk - Design Substantial 9 The BRICKS project will integrate M&E results from the Sudan project into the whole SAWAP portfolio. The project will also provide participatory training and expert support to the PCU on the application of M&E tools and especially in relation to measuring biophysical change in the land use and management systems implemented. 12 RISKS RATING - Social and Environmental Moderate - Program and Donor Moderate - Delivery Monitoring and Sustainability Moderate - Other (Climate Change) Substantial - Other (Optional) Overall Implementation Risk High B. Overall Risk Rating Explanation 48. Overall risk rating is high. The MoEFPD has limited exprience working with World Bank guidelines. While recognizing the prevailing difficult circumstances, the project is a pilot envisaged to be implemented in three relatively stable areas. The project is innovative in terms of its multi-sectoral, integrated landscape approach where coordination among different levels of authority, jurisdictions and sectors will be essential for the project's performance. Weak institutional capacity to address SLWM and biodiversity conservation practices also increases the risk for the project. See ORAF in Annex 4. VI. APPRAISAL SUMMARY A. Economic and Financial Analyses 49. A preliminary economic and financial analysis revealed that the SLWM practices to be promoted by the project generally have a positive cost benefit ratio. The project will help to increase the resilience of the socioeconomic systems and ecosystems in the targeted areas. The benefits include: (i) increased primary production of ecosystems; (ii) increased biodiversity; (iii) increased recharge of ground water; and (iv) increased carbon sequestration (forest and soil). These investments in SLWM also help the targeted areas to make a transition toward long term resilience by strengthening the financial, economic, environment and natural resource assets of the targeted areas, and therefore have a positive expected contribution to the country's socioeconomic development. The involvement of the public sector in Sudan is critical in this sector, recognizing the important role public sector has in ensuring equitable distribution and access to public services and valuation of ecosystem services. The value added of the Bank's support resides in the commitment and contribution to the GEF-WB Sahel and West Africa Program (SAWAP) which supports the Great Green Wall Initiative (GGWI) and the TerrAfrica Platform for sustainable land and water management (SLWM). See Annex 8: Economic and Financial Analysis. B. Technical 50. The technical design of the SSNRMP was assessed to be highly appropriate because it will: (i) build on previous experiences in natural resources management and CDD; (ii) be strengthened from initiatives being implemented in the region such as the JICA's work on groundwater potential in White Nile and Kassala States and FNC/IFAD/GEF's Integrated Carbon Sequestration Project; 13 (iii) be implemented using an integrated landscape approach that addresses not only the ecological dimensions and biodiversity conservation, but also the economic and social aspects; (iv) mainstream project implementation into existing organizations already involved in sustainable management of forests, rangelands and wildlife, and make use of existing community networks; (v) receive support from the Building Resilience through Innovation, Communication and Knowledge Services project (BRICKS) for M&E. BRICKS will also provide the project with opportunities for sharing knowledge and good practices on sustainable land use and management among the 12 Bank-financed projects that are part of the SAWAP (the proposed project being one of them); and (vi) be enriched from TerrAfrica's access, exchange and methodical accumulation of key knowledge about implementation of sustainable land management. C. Financial Management 51. Overall, project implementation responsibility rests with the Ministry of Environment, Forestry and Physical Development (MoEFPD). The MoEFPD has acceptable financial management arrangements in place, which will be used to implement the Project. 52. It is staffed by a finance manager, a deputy manager and eight qualified accounting staff. In addition, MoEFPD has a resident internal auditor who reviews all transactions and support documents before payment is done. An administrative unit at the ministry is tasked with ensuring that fixed assets are properly recorded and safeguarded. However, the staff at the finance unit have little experience in providing financial management support to projects administered by donor agencies. A finance manager will be recruited, and the Bank's supervision will be intensive during implementation to provide support as needed. 53. The finance department is equipped with two functional desktop computers which are used for report writing. A physical verification of fixed assets is undertaken on an annual basis. The finance department will keep the accounting books and set up a manual accounting system to record project's transactions, prepare project financial statements and have them audited. The manual accounting system in place will be used at the beginning; however, the finance unit will implement a computerized accounting system within the first six to twelve months of implementation. 54. Project financial statements will be audited by the Sudan National Audit Chambers in accordance with International Standards on Auditing. The audit reports will be submitted to IDA not later than six months after the end of each fiscal year. The finance department will also be required to prepare and submit to IDA, within 45 days following the end of each quarter, an interim financial report (IFR). Further details are found in Annex 3. Risk Assessment 55. Overall FM risk is assessed as substantial based on the identified risks. This is mainly due to the following two areas of risk: (a) Country FM issues. Country risks include those arising from (i) the use of manual recording and reporting systems; (ii) the lack of modem audit practices; (iii) lack of sufficiently transparent financial information; and (iv) lack of staff experienced in financially managing donor projects. 14 (b) Project Issues. At the project level, FM risks include those arising from (i) the nature of the project activities; which include extensive community based training and capacity building activities, and a large number of small contracts; (ii) the decentralized nature of activities with local communities across three states; and (iii) the diversified implementation responsibilities spread across a number of Government entities (i.e. forests, wildlife, and range and pasture departments). Supervision Plan 56. This is a decentralized project which will be implemented in Khartoum and in several localities by MoEFPD. The Bank's FM supervision will be intensive during the project implementation to ensure that the funds are used for the intended purposes and also to provide support as needed. During the first year, three supervision missions will be carried out to support the project implementation then adjust the supervision frequency in the second year depending on the risk assessment. These supervisions efforts will comprise IFR reviews, audit reports reviews, field visits and assessment of internal controls. The outcome of supervision will feed into identifying weakness areas and work out relevant action plans in agreement with the project coordinator. D. Procurement 57. In 2009, the Sudan Country Integrated Fiduciary Assessment (CIFA) identified the main issues in public procurement at the federal and state levels as: (i) incomplete and outdated legal, policy and regulatory framework; (ii) weak procedures and practices, often applied in a discretionary and discriminating manner; (iii) inadequate human and financial resources; (iv) an underperforming private sector; and (v) inadequate legislation, practices and institutions to ensure integrity and transparency of the procurement process. 58. In 2010, Sudan enacted the Public Procurement, Contracting and Disposal law. Although Bank comment was sought on the Bill prior to its enactment, only some of the Bank comments on the draft Bill were incorporated. Thereafter, the Bank continued to assist the GoS to strengthen its public procurement system through the Multi Donors Trust Fund (MDTF) funded Public Sector Reform, Decentralization and Capacity Building Project (PSCAP) including: (i) equipping the General Directorate for Public Procurement, Contracting and Disposal; (ii) supporting the dissemination of the new Procurement law and Regulations; (iii) financing the preparation of a Public Procurement Manual, and Standard Bidding Documents (SBDs); and (iv) supporting the Training of Trainers (ToT) program. 59. Procurement will be carried out in accordance with the "Guidelines: Procurement of Goods, Works, and Non-Consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" and the "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits & Grants by World Bank Borrowers" both dated January 2011 as well as the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and Grants", dated October 15, 2006 and revised in January 2011. Procurement through National Competitive Bidding (NCB) shall follow procedures acceptable to the Bank including the use of national SBDs prepared to the satisfaction of the Bank and issued in the Arabic language. Additionally, since Sudan is one of the FCS countries, paragraph 11 of Bank Operational Policy (OP) 10.00 will be triggered to allow the application of the flexibility detailed 15 in the Guidance to World Bank staff: Simplified Procurement Procedures in Situations of Urgent Need of Assistance or Capacity Constraints, April 2013. 60. All the procurements for component 1 and 3 and part of the component 2, will be done by the Project Coordination Unit (PCU) located in the Ministry of Environment, Forest and Physical Development (MoEFPD). The bulk of procurement under component 2 shall be conducted by the three State PCUs (SPIUs). The community (village committees) is expected to make small procurement of local goods under the sub-grants to the communities. In view of the procurement capacity constraints identified within MoEFPD, the PCU will be supported by an experienced Procurement Specialist, who will be provided through Technical Assistance under the project. 61. The procurement by the SPIUs is mainly shopping for goods and works. The Government has agreed to provide seconded staff to the three SPIUs to work as procurement officer. These staff will be trained in the procurement function by the Procurement Specialist (PS) of the PCU and would execute their procurement function under the guidance of this PS. 62. Overall, as Sudan is an FCS state, and noting that there is a lack of procurement capacity within the implementing agencies as described above, the overall risk to procurement under the Project is rated High. In order to mitigate the risks identified in the procurement assessment, an action plan has been finalized in consultation with MoEFPD and has been included in Annex 3. E. Social (including Safeguards) 63. The project is expected to generate social benefits through improvements which would reduce land degradation and vulnerability to climate change, and promote sustainable use of natural resources that the communities depend on. In the project areas where SLM and SFM practices will be introduced, the expected socioeconomic benefits for the communities derive from increased income and livelihoods, and more diversification of products. Overall the project is expected to contribute positively to livelihood opportunities and provide an environment conducive to the expansion of local economic activity. 64. On the other hand, some rehabilitation activities in the rangelands and forest reserves may temporarily restrict access to humans and livestock. The ESMF/PF will guide project implementers in identifying, assessing and mitigating negative impacts of these project supported activities. The project includes income generating opportunities for women, empowerment opportunities through decision- and policy-making, and is expected to have a positive impact on women and female headed households and other vulnerable households. F. Environment (including Safeguards) 65. The project is classified as category B. The environmental and social safeguard issues of the project are primarily associated with the activities of component 2: Community-based sustainable management of rangelands, forests and biodiversity. Five safeguards policies have been triggered: Environmental Assessment (EA), Forests, Natural Habitats, Pest Management and Involuntary Resettlement. The overall environmental impact of the project is positive, especially as the planned activities can help mitigate the effects of land degradation and pressures on rangeland and forest ecosystems. However, some limited negative impacts may arise largely related to livelihoods improvement interventions, but these impacts will be localized and can be reduced or avoided with proper mitigation measures. 16 66. The Environmental and Social Management Framework (ESMF) and Process Framework (PF) will be used to address any environmental and social impacts of the project. The ESMF and the PF has been disclosed in-country and through the InfoShop in accordance with the World Bank requirements on October 22, 2013. Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [X] [ ] Natural Habitats (OP/BP 4.04) [X] [ ] Pest Management (OP 4.09) [X] [] Indigenous Peoples (OP/BP 4.10) [] [X] Physical Cultural Resources (OP/BP 4.11 [I] [X] Involuntary Resettlement (OP/BP 4.12) [X] ' ] Forests (OP/BP 4.36) [X] [ ] Safety of Dams (OP/BP 4.37) I] [X] Projects on International Waterways (OP/BP 7.50) 'I] [X] Projects in Disputed Areas (OP/BP 7.60) 'I 'I 17 Annex 1: Results Framework and Monitoring SUDAN: Sustainable Natural Resources Management Project Development Objective PDO Statement: Increased adoption of sustainable land and water management (SLWM) practices in targeted landscapes. Project Development Objective Indicators Responsibility Cumulative Target Values Da ue osta Data Source/ for Data Unit of Mtoooy Cleto Indicator Name Core Measure Baseline YR1 YR2 YR3 YR4 YR5 Frequency Methodology Collection Measure Project Land area where records, SLWM practices have supplemented S and been adopted as a X Ha 0 0 22,500 45,000 87,500 104,000 Annual by beneficiary MoEFPD result of the project'o verification, GEF Tracking Tool (TT) Areas brought under Project SPIU Kassala enhanced biodiversity X Ha 0 0 3,750 9,000 14,750 17,400 Annual Records, GEF and Gezira and protection" TT FNC Direct project Number Project benefciapriest (thu a 0 10 20 30 40 50 (35%) Annual rec PCU and SPIU beneficiaries (thousand)a ,IIIII11records, and I 10 Includes tentatively 10,000 hectares rangeland in White Nile, 85,000 hectares forest areas in Gezira and 9000 hectares in Kassala under land or forest management plans. " Includes 15,000 hectares in Gezira and 2400 hectares in Kassala. 18 (number), of which X nd % beneficiary female (%) 12 verification Intermediate Results Indicators Cumulative Target Values Da ue osta Data Source/ for Data Indicator Name Core Measure Baseline YR1 YR2 YR3 YR4 YR5 Frequency Methodology Collection Measure Component 1: Institutional and Policy Framework 1.1 Staff trained in formulation, monitoring and Project records, implementation of 100 supplemented Number, % 0 0 25 50 75 Annual PCU policies for SLWM (15%) by beneficiary and biodiversity verification conservation, of which female (%) 1.2. Staff trained in providing extension services regarding Project records, SLWM and Number, % 0 0 100 250 500 1,000 Anul supplemented PCU biodiversity (30%) by beneficiary conservation practices, verification of which female (%). Stake- Nt holder Commun Coiunica 1.3ComuncaionDrft Consulta- ication tion tiomnic d Strategy Strategy in tnAnnual Project records PCU implemented ctomnic in and Strategy in unication vuse Strategy 1Tentative, to be determined in first year of implementation, though specific survey of villages and beneficiaries. Population density is uneven in select sites, and census data is not fully reliable. 19 Component 2: Community based sustainable management of rangelands and forests and biodiversity conservation activities 2.1. Forest areas X Project reforested and Ha 0 0 3,750 9,500 14,750 17,400 Annual records, GEF SPJU with rehabilitated as a FNC result of the project 2.2 Improved biodiversity conservation in the Twice: At Project records proted as aPercentage 0 15 15 mid-term and reports, SPIU and FNC imuredt band closing GEF TT improvement compared to METT baseline 2.3. Forest gazetted as Ha 0 2,400 2,400 Annual Project records SPIU and FNC a result of the project 2.4 Total rangeland areas to be reabta by Ha 0 0 2,000 5,000 8,000 10,000 Annual Project records SPIU, MoA rehabilitated by the project 2.5 Landscape management plans that incorporate SLWM and Project biodiversity Number 0 0 1 4 6 7 Annual records, GEF SPIU conservation practices TT designed and starting implementation as a result of the project Component 3: Project management, Monitoring and Evaluation 3.1. M&E system Yes functioning and YesNoYes, final Yes/No No Yes Yes midterm Yes data Annual Project records PCU providing accurate data data and on-time data 20 3.2 GEF tracking Twice at tools updated (SFM, Number 3 6 9 mid-term Project records PCU, FNC, Land Degradation, and closing SPIU Biodiversity) Indicator Name Description (indicator definition etc.) The definition of SLWM is based on TerrAfrica's definition: the adoption of land use systems that, through appropriate management practices, enables land users to maximize the economic and social benefits from the land while maintaining or enhancing the ecological support functions of the land resources. For the purposes of this proposal, this definition will encompass other approaches such as integrated natural resources management (INRM), integrated water resources management (IWRM), integrated ecosystem management (IEM), eco-agriculture and SFM, and many facets of sustainable agriculture, agriculture water management (AWM), biodiversity conservation and climate change adaptation, such as agroforestry. Improved biodiversity conservation in the protected areas: Interview-based score as measured by the GEF Protected Area Management Effectiveness Tracking Tool (PAMETT). This indicator will be measured for two Protected Areas. Areas brought under enhanced biodiversity protection (ha): Verifies a functioning management system that includes a management plan and the capacity and resources to implement the plan with a view to achieving the area's biodiversity protection goals; this is envisaged to be an indication of enhanced biodiversity protection. Land area where sustainable land management practices have been adopted as a result of the project: Demonstrates the impact of project on SLM practices in the project area, which is key for assuring biodiversity conservation in the productive landscape. 21 Annex 2: Detailed project description SUDAN: Sustainable Natural Resources Management I. Background Country context 1. Sudan is situated in northern Africa, with a coastline bordering the Red Sea. It is the third largest country in the continent and the sixteenth largest in the world. The Sudan Central Bureau of Statistics estimates the populationl3 of Sudan in 2011 as 39 million, growing at 2.7 percent, with more than 30 million people living in rural areas (Badri, 2012). The legacy of the civil war, limited infrastructure and the inequitable distribution of public goods and services, continue to present obstacles to stronger and more inclusive growth. 2. The 2013 United Nations Development Program (UNDP) Human Development Index ranks Sudan 171 out of 187 countries. Poverty estimates set the average rate of poverty incidence at 46.5 percent (2009 National Baseline Household Survey), indicating that some 15 million people are poor. The poverty rate is significantly higher in rural areas (58 percent) than in urban areas (26 percent), and varies markedly across states, from 26 percent in Khartoum state to above 60 percent in peripheral states such as North Darfur, South Kordofan, and Red Sea. Prospects for Sudan meeting Millennium Development Goals (MDGs) by 2015 are bleak. Gender disparities in Sudan are persistent. Women comprise only 23 percent of the formal economy, but 70 percent of the informal economy, with 53 percent of women focused on agricultural production activities. Displaced populations, nomadic groups, rural populations, children, and female children in particular, are especially vulnerable to higher incidences of poverty. The interaction of high levels of poverty, social exclusion, spatial inequality and fragile social cohesion underpin ongoing rivalry over scarce resources, mass group mobilization and conflict. 3. Sudan has been in conflict for most of its independence history. While the defining conflict between the northern and southern regions was largely resolved by the secession of the latter to form the Republic of South Sudan in July 2011, several other conflicts with varied histories persist in different stages of intensity, stalemate, or resolution. Most of these conflicts involve competition over ownership and access to natural resources between pastoralists, agro- pastoralists and settled farmers (including commercial farms). This contributes to a localized conflict-prone environment where violence easily erupts in the context of weak institutions. 4. The South's secession has had fundamental repercussions on Sudan as evidenced by significant stresses in the macro-fiscal situation and the structure of the economy. The most important and immediate was the loss of the oil revenue14, aggravated by the several years of oil- export driven growth, large public investments, and expanded public employment. Even after 10 years of an oil boom, Sudan continues to suffer wide and deep swaths of poverty and stark inequality between regions. Although Sudan in 2011 was nominally a lower middle income country, this was mainly due to its highly overvalued exchange rate, and large oil production, 13 Population: 45,047,502 include the population of South Sudan (8,260,490-July 2011). This entry gives an estimate from the Sudan Central Bureau of Statistics based on statistics from population censuses, vital statistics registration systems, and sample surveys pertaining to the recent 2009 census. 14 Between 2005 and 2010, petroleum and minerals constituted over 90% of the trade while agriculture share was less than 10%. Agricultural exports were composed of cotton, sesame, gum arabic and sheep. The secession of the South caused Sudan a loss of about 75% of the oil revenues with an expected loss of 20% in GDP growth, 90% in exports revenues, and 20% in foreign exchange accumulation base. 22 both of which will fall short in 2012, bringing the country back into low income country status. The loss of three-quarters of oil production owing to the secession of South Sudan led to a substantial fiscal deficit, a deterioration of the trade balance, a massive devaluation of the currency (which cut its value by half). For 2011 and 2012, economic growth rates were -3.3 percent and -11.1 percent, respectively, according to International Monetary Fund (IMF) 15 estimates 5. The civil conflict in Sudan and in neighboring countries added more breadth to the challenge of environment degradation in the country. Internal conflicts have been rooted in disputes over usufruct ownership of natural resources concomitant with repeated droughts, clearly manifested in the clash over resources by crop growers and pastoralists. Refugees and internally displaced people contribute to the removal of forests for fuel-wood and building houses. Land-use related conflicts have also contributed substantially to the degradation of the environment. 6. In addition to conflict, drivers of environmental degradation are closely interlinked with poverty and climate change. Misuse of natural resources that is largely caused by a fragile land tenure system in the absence of adequate development strategies has resulted in the erosion of natural resources and escalation of conflicts forming root causes of rural poverty. Poor rural physical infrastructure, rudimentary markets, high taxation, scarce finance and poor use of productivity-enhancing technology remain as crucial general poverty correlates. Key drivers of deforestation and degradation include the following: * Agricultural expansion: The biggest direct cause of deforestation in Sudan is the conversion of natural forests to cropland and pasture. One of the key drivers of deforestation and degradation in Sudan has been the previous agricultural policy program that encouraged the expansion of crops, that greatly affected the concerned States. Some 40 million Feddans (17 million ha) have been converted into mechanized and traditional rainfed and irrigated agriculture during the period 1940-2012. The country is home to some of the largest irrigation schemes in the world. * Energy consumption: The energy sector is closely linked to deforestation through wood extraction for fuel and charcoal causing rapid depletion of vegetation cover. Sudan depends mainly on the forestry sector as a household, services and industrial energy source. Forests contribute the equivalent of 4.11 million TOE representing 70 - 81 percent of energy supply in the country (FNC, 1995). Demand for wood fuel increased in the last two decades due to rapid population growth, urbanization and shortage in supply of other forms of energy. * Poor agricultural practices and livestock management. With the second largest livestock populations in the continent and an open grazing system, husbandry management practices seriously affect land degradation. Water is a critical and scarce resource in Sudan, and poor water management, such as the digging of shallow wells for livestock, causes widespread land degradation. Limited soil conservation practices and land productivity restoration measures, such as shifting cultivation, contribute to land degradation and desertification, reduced soil productivity and erosion. Forested areas are also affected by insect pests and diseases. Fires are used for land preparation for cultivation but also destroy the rangeland and large animals. 15 http://www.worldbank.org/en/country/sudan/overview 23 * Natural Disturbances: Periods of drought impact hard on livelihoods and income generating activities which relate to seasonal farming, herding, wood cutting and charcoal production, as do seasonal floods. Sector and institutional context 7. The country belongs to the Sudano-saharan semi-arid transition region that lies between the arid Sahara desert and the wetter regions of equatorial Africa, with a terrain mostly of flat plains broken by several mountain ranges. About 40 percent of the land area falls in the desert zone having rainfall ranging between nil and 100 mm/annum, with no vegetation cover except for scattered shrubs and seasonal grasses. About 36.6 percent of the land area falls in the semi- desert zone with rainfall ranging between 100 - 300 mm/annum, and the remaining 23.4 percent falls in the savannah zone with rainfall going up to 700 mm/annum. The Blue and White Nile rivers meet in Khartoum to form the River Nile, which flows northwards through Egypt to the Mediterranean Sea. These rivers are the main sources of water resources. Sahelian economies and livelihoods heavily depend on soil, water and vegetation resources. The majority of the population are farmers and pastoralists living on subsistence farming and livestock herding in a nomadic way of life. In the northern and western semi-desert areas, people rely on the scant rainfall for basic agriculture and livestock. Nearer the River Nile, there are well-irrigated farms growing cash crops. 8. The Forest National Corporation (FNC) estimates that, after separation of South Sudan, forests cover about 11.60 percent of the total area, while agricultural land 13.70 percent, rangelands 26.40 percent, and water bodies 0.17 percent. (Badri, 2012). The forestry and rangelands of Sudan support about 101 million heads of cattle, sheep, goats, and camels mostly under pastoral and small agro-pastoral systems in the traditional rain-lands, as well as a wide range of wildlife species. Agriculture and livestock play important roles in food security and employment opportunities that directly contribute to poverty alleviation and social development. It is estimated that agriculture (crops, livestock and forestry) contributes 35-40 percent of GDP (with livestock accounting for 50 percent of the production) and employs more than 80 percent of the total population (Lee, et al, 2013). Traditional farming accounts for 60-70 percent of the agricultural output, and is basically subsistence production based on shifting cultivation and livestock rearing (Badri, 2012). Still, over one million head of sheep are officially exported every year, mainly to Gulf States, generating foreign currency for the country. The wildlife of Sudan presents a rich base of biodiversity of high value. Finally, the country is also rich in mineral resources including asbestos, chromite, cobalt, copper, gold, granite, gypsum, iron, kaolin, lead, manganese, mica, natural gas, nickel, petroleum, silver, tin, uranium and zinc. Oil discovery and export in the last decade fuelled unprecedented growth and fed massive public investment, although not in sustainable ways. 9. The geographical location of Sudan subjects the country to the environmental challenges of the fragile Sudano-Sahelian and sub-Saharan African zones. Short variable erratic rainy seasons, arid lands, and poor sparse vegetative cover has help determined the vulnerability of the country. In addition, the soils in the area are highly susceptible to wind and water erosion. Beyond this, the growing pressure of both human and animal population over natural resources has resulted in desertification, land degradation, water pollution, soil erosion and nutrient loss 24 and deterioration of biodiversity in large areas in the country 6. Furthermore, unplanned, non- sustainable and poorly managed uses of land and water have, along with climate variability" and frequently occurring droughts, exacerbated the problem. Rainfall in some areas of the country has been steadily decreasing over the last 40 years, and the Sahara desert is advancing at a rate of about one mile a year, eliminating grazing land and water holes. Forest ecosystems throughout Sudan have been degraded due to fire18, uncontrolled grazing, overcutting, and encroachment by agriculture. Drought and increasing pressure on land by the expansion of mechanized and rain- fed farming, as well as overgrazing19, have restricted rangelands and increased vulnerability of farmers and pastoralists (Badri, 2012). The degradation has caused serious negative impacts on agricultural productivity20 and the livelihoods of the poor, particularly those that depend on livestock and rain-fed agriculture. Expected impacts of climate change are increased water scarcity, accelerated desertification and soil erosion processes, decreased productivity with a predicted twenty percent drop in crop yields, damages caused by more extreme climate events such as droughts or floods, increased health-related illnesses, and higher risk of pest and disease outbreaks (UNEP, 2007). 10. Traditional land use systems prior to the colonial era, were based on traditional tribal leadership and customary laws that organize resource use among communities. However, after the post 1970 land use policy three categories of land ownership system emerged, including private, Government and community land. The majority of land in Sudan is under Government control. Within the customary land tenure, there is the tribal homeland with demarcated boundaries recognized by neighboring tribes and local authorities. The tribal land is organized and supervised by Nazir (the chief tribal leader) and includes clan land with a number of villages, each with its land organized and controlled by the village Sheikh. Within the village land, each villager practices his private ownership respected and recognized by all. The unclaimed land is used as range land or allotted to migrants by the village Sheikh provided that they respect the traditional rule of surrendering 1/10 of the crop to the Sheikh. As a general rule, land allotted to any person cannot be withdrawn unless he/ she leave the village. Under such circumstances, the land abandoned by any person reverts to the community to be allotted to someone else. In all cases, the owner of the land is free to hire part of his land or dispose of it in the way he likes and after death, his children or relatives inherit the land. 11. Investment responses are fragmented and inadequate. Federal, state and local Governments and their constituencies are overwhelmed by the scale and complexity of the problems confronting production and conservation landscapes. Attempts at most of tiers of 16 According to the FNC, the average annual increment of growing stock volume is estimated as 1.340 million cubic meters of which 5 % is removed per a year (Badri, 2012). 17 Climate variability has disturbed the region's ecological balance and consequent ability of its ecosystems to produce food and fiber, supply freshwater needs, and flood regulation. 1 Sporadic and accidental fires erupt destroying standing dry forage and creating a serious threat to the rangelands sustainability. 19 Up to the 1970s, the pastures and browse resources were reasonably sufficient to meet the demands of the sedentary and nomads herds in Sudan. Following social traditions and norms a seasonal migration was practiced passing through a specified 5 kilometers width stock routes networks supported by plenty of diverse pasture and browse trees. However, this situation was disturbed by the increasing expansion of cropland and overgrazing affecting the biodiversity of the vegetative cover and subjecting the area to further environmental degradation. The stock routes width reduced to 0.35 - 0.5 Km in certain places and completely degraded in other ones. 20 The World Development Report 2010 (WDR) estimated that Sudan's agricultural yields are expected to decline by 56% by 2080, the steepest decline in the world. 25 Government to address these problems have been generally faced by obstacles for the following reasons: (i) lack of sufficient financial allocations; (ii) unclear and overlapping mandates of institutions responsible for various components of the rural landscape; (iii) insufficient technical capacity in these institutions; (iv) absent or weak land-use planning; (v) weak regulatory compliance and enforcement; (vi) weak community involvement in prevention and restoration activities; (vi) insufficient attention to alternative livelihood issues; and (vii) insufficient attention to transparent governance, corruption, and local participation. The different challenges are interwoven and require integrated solutions. However, institutions, information, and incentives are fragmented, weakening the ability of Government institutions and the communities that they serve to address the issues in a strategic and integrated manner. Forests, rangeland and wildlife, and biodiversity conservation in Sudan Forests 12. Sudan's forests cover 11.6 percent of the total country's area (FAO, FRA, 2010) (See map in Annex 9). There are three types of forests in the country: (i) Federal forests; (ii) State forests; and (iii) community/private forests. Most of the country's forests are open or semi-open habitat, with 4 percent of Sudan's land area; mandated, as forest reserves that receive a special level of protection and management. To date more than 100 natural forests have been demarcated and declared as forest reserves in accordance with the current Forest Law, which gives them protection against irrational use, whilst not impeding access to the local communities. 13. It has been estimated that the sector (from firewood wood and charcoal) provides the country with more than 75 percent of the energy needs and 15 percent of employment. It is also estimated that 85% of firewood and charcoal is used by households, followed by industry for construction and furniture (10 percent) and a small percentage for cultural/religious activities (1.5 percent). Forests also provide fodder for livestock, marketable non-wood products such as honey, gum arabiC21, tubers and roots, wildlife, and medicinal plants. Forests contribute to watershed quality by stabilizing off-site soil, reducing off-site sedimentation, reducing flood peaks on streams in small watersheds and replenishing groundwater and watercourses. 14. The country's forests have been exposed to severe deforestation22 and overgrazing to facilitate the horizontal expansion of crop lands and of animal grazing needs as well as for firewood and charcoal making. Although licenses are required to clear forests for agriculture particularly for mechanized farming, this policy has not been effective in forest conservation and protection against vast expansion of agriculture (FNC/IFAD/GEF, 2012). Between 1990 and 2005, the country lost 11.6 percent of its forest cover (UNEP, 2007). Desertification in northern, central, eastern and western Sudan is widespread, severe and continuing at a linear rate. 15. The Forestry National Corporation (FNC) has been carrying out forest development activities especially in the savannah area. These activities are based on the Forest Resource Assessment (FAO, 1990) which provided the institutions with important tools and capacity in forestry resources development. The activities promoted by the FNC in the forestry sector include introduction of agro-forestry practices, tree planting, community forests conservation 21 Sudan is responsible for 80% of the world's gum arabic production and trade. The country exports 45,000 tons of gum arabic annually, and the crop accounts for an average of 17% of Sudan's annual export earnings (Badri, 2012). 22 The average annual increment of growing forest stock volume is estimated as 1.340 million cubic meters of which 5 % is removed per a year (Badri, 2012). 26 programs, energy-saving improved cook stoves and distribution of gas cookers (to reduce waste wood consumption). However, limited funds constrain the implementation of the proposed national and state forest inventory programs as well as proper management of endangered forests. In addition, the weak enforcement of forest laws against illegal deforestation and the unsustainable agricultural practices have been pivotal in accelerating forest cover decline. Programs, such as one to improve cooking stoves to save biomass energy sources, have been limited in coverage and slow. Some of the threats to Sudan's forest resources are: (i) weak federal driven policies versus autonomous state control; (ii) weak local/global stakeholder involvement; and, (iii) weak local and foreign investment in the forestry sector (Badri, 2012). 16. Some of the key projects that the Government has recently executed or that are currently active in sector, and from which lessons learned will be incorporated in the proposed project, are the following: * Rehabilitation Program of the Nabag Forest that started in 2004 with the objective of rehabilitating degraded forest for the protection, conservation, production and sustainable management of Nabag forest for the purpose of poverty reduction and environmental conservation. * Integrated Carbon Sequestration Project (Butana area), a joint GEF/IFAD/FNC project (2012), that aims at promoting a climate-friendly rural development path in Central and Eastern Sudan by increasing the carbon stock and reducing net GHG emissions through reforestation and sustainable forest management, and through promoting sustainable energy from biomass. This project will provide important lessons to the proposed project in terms of reforestation, agroforestry and water harvesting technologies. * Revitalizing the Sudan Gum Arabic Production and Marketing Project that provided, with World Bank support, financial services, water services, transportation, seeds and seedlings for re-farming gum gardens of the households in the target area. The project contributed to the conformation? and capacity building of the Gum Arabic Production Associations (GAPAs) as a pertinent platform for revitalizing the gum arabic sector in different localities of the Blue Nile, Sennar, White Nile, North and South Kordofan States. Range and Pasture Resources 17. Rangelands form a major source of feed for the national herd. Sudan has various types of grazing land. The following table shows the different types of grazing lands according to Harrison and Jackson (1958). Type of Description grazing land Desert Zone Ephemeral herbs and grasses confined to water courses and flat low lying areas that receive runoff. The valuable 'Gizzu' grazing (succulent plants) is part of this zone and supports sheep and camels during the cool season without the need for drinking water. Semi-desert These lands comprise three main types, the Red Sea coast and associated hills with Zone winter rainfall, the range vegetation supported by sandy soils west of the White Nile and in northern Kordofan and Darfur, and the range vegetation supported by clay soils mainly in the Butana area. Trees and shrubs provide livestock feed in the form of leaves and twigs and pods most valued during the long dry season when forage from grasses is both scarce and of low quality. The major species are in this zone are: Acacia 27 ehrenbergiana, A. tortilis sub-species tortilis and sub-species raddiana, Capparis decidua, Maerua crassifolia, Salvadora persica and Ziziphus spina-christi. Grasses include Aristida spp, Schoenefeldia gracilis, Eragrostis spp., Cenchrus setigerus, Cymbopogon proximus, Lasiurus hirsutus and Panicum turgidum. Low Rainfall Found on the sandy soils of western Sudan and the dark cracking clays of central and Savanna eastern Sudan. The northern parts are used for grazing during the wet season while the southern parts, where water is available, are used during the dry season. The major species in this zone are: Acacia mellifera, A. senegal, A. seyal, Balanites aegyptiaca, Cadaba rotundifolia, Combretum and the grasses Aristida species, Brachiaria obtusiflora, Cenchrus biflorus, C. ciliaris, Cymbopogon nervatus, Eragrostis, Schoenefeldia gracilis, Pennisetum pedicellatum, Setaria pallide-fusca Chloris pilosa and Andropogon gayanus. Among the important herbs are Blepharis spp, Crotalaria spp and Zornia diphylla. High Rainfall Hasgrasses such as Hyparrhenia spp, Andropogon gayanus, Setaria, Brachiaria Savanna brizantha, Chloris gayana and Sporobolus pyramidalis. 18. Pastoralists and settled agro-pastoralists graze their livestock on dry land range and natural pastures composed of annual and perennial grasses, scattered shrubs, short trees and wood lands in the drier northern parts and dens grasses and forests in the southern parts of the country. The open grazing system provides a management mechanism that copes with the fragile pastures in a sustainable manner. For years, a seasonal migration was practiced passing through a specified five kilometers width stock routes networks supported by plenty of diverse pasture and browse trees. This management system was protected by social traditions and norms under the control of the native administration (Idara Ahlia). The respective community authorities resolved any disputes between crop producers and the agro-pastoralist and the nomads at local areas. Up to the 1970s, the pastures and browse resources were reasonably sufficient to meet the demands of the sedentary and nomads herds in Sudan. However, this situation was disturbed by the increasing expansion of cropland and overgrazing affecting the biodiversity of the vegetative cover and subjecting the area to further environmental degradation. The stock routes width reduced from five km to 0.35 - 0.5 km in certain places and completely degraded in other places. Much of the valuable fodder trees and palatable plants of the perennials and annuals have disappeared and were replaced by scrubs and seasonal mostly non-palatable plants particularly in eastern Gezira, north Gedaref, central Kennana areas and west Darfur. 19. Pasturelands and water resources (pools) are communally owned and utilized. They are not appropriated by individuals and pasturelands are always defined as uncultivated lands. Pastoralists have corridors (Murhal) to avoid farms and allowed to utilize uncultivated areas. Tribal chiefs usually specify these routes and grazing areas for nomads. Generally, these Acts provide procedures for land expropriation for development purposes and ways to specify rights in order to compensate the owner. 20. Although almost 26 percent of the land in Sudan is rangeland supporting livestock production, the importance of these resources was neglected for the sake of crop lands expansion associated with overgrazing and loss of a wealth of pastures and grazing palatable grasses. Biodiversity of range plants is being lost rapidly. Some of the challenges facing range and pasture rehabilitation, development and conservation are: (i) absence of adequate data and information on areas and types of range, seasonal charges, grazing potential and capacities of the 28 different range types 23; (ii) burning of grasses and shrubs for land clearance for cultivation; (iii) sporadic and accidental fires that erupt destroying standing dry forage creating a serious threat to the rangelands sustainability; (iv) limited research capacity; (v) absence of incentives that deter staff from enduring the difficult living conditions in remote areas; (vi) inadequate number of qualified and experienced staff; (vii) weak linkages between state and federal authorities; and (viii) poor and fragmented linkages between national and state policies and strategies. 21. To address some of these issues, the Government has undertaken several interventions and pilot projects regarding: (i) rehabilitation (by re-seeding with or without fencing), maintenance and rational management of pasture utilization in different ecological zones to ensure sustainability and continuous access to markets; (ii) encouraging and sustaining effective role of traditional institutions, voluntary and public organization in pastoral resources management; (iii) encouraging appropriate sustainable communal rangeland management practices and technologies; (iv) developing rangeland monitoring structure; (v) supporting the establishment of fire-lines for protection of natural grazing areas; (vi) demarcation of livestock routes; and (vii) conserving and developing gene banks for the indigenous crops, plants including forest trees and shrubs, grasses; and livestock species to protect them against extinction. 22. Lately efforts are being made as to protect rangelands and build capacity of the range and pasture institutions. For example, the Range and Pasture Administration (RPA) works in the creation of fire-lines, which act as fire-breaks that extend over 35,000 km to stop the spread of fires and protect dry grasses. Increasing the route width to 2 km pilot program was introduced and carried out in collaboration with the nomads and the mechanized farmers unions in Sennar and Blue Nile States. However, these areas require introduction of adequate and sustained supply of water, veterinary and extension services en route. The RPA has also been involved in the production of seed and vegetative cuttings of forage species in its nurseries, and in specialized seed farms and animal production research stations. This collection of seeds is still practiced but limited in scale due to funding constraints. Wildlife ecosystem, protected areas and biodiversity protection 23. Wildlife ecosystems in Sudan are located in protected areas distributed all over the country and are composed of biosphere reserves, national Parks, game reserves and sanctuaries that have been published in gazettes and declared protected. The country is endowed with a wealth of 11.5 million elements of Nature Reserves some with global recognition as the Dinder bio-sphere that is registered as a Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) site of the natural World Heritage Sites. In practice, the level of protection afforded to these areas has ranged from slight to negligible, and many exist only on paper. Moreover, many of the previously protected or important areas are located in regions affected by conflict and have hence suffered from a long-term absence of the rule of law. Even though the arid and semi-arid habitats of Sudan have always had limited wildlife populations, the wildlife of Sudan presents a rich base of biodiversity of high value. Sudan has some 1431 known species of amphibians, birds, mammals and reptiles according to figures from the World Conservation Monitoring Centre. Of these, 1.6 percent are endemic and 2.0 percent are threatened. Sudan is home to at least 3137 species of vascular plants, of which 1.6 percent are 23 More coordinated efforts are required to research how native and introduced fodder and multi-purpose trees and shrubs can be utilized within farming areas and in rangelands to provide dry season feed and supplement the dry grass with nutritious browse and pods. 29 endemic24 . Rural communities living near nature reserves depend on the diverse and rich fauna and forests for preparing their traditional diet and indigenous medicines. 24. Economic pressures underlie the destruction of northern and central Sudan's wildlife, as well as the degradation of its protected areas. The greatest damage to wildlife has been inflicted by habitat destruction and fragmentation from farming and deforestation. In addition, in a period of conflict and extreme poverty, investment in this sector was not a priority for the Government. However, the new political changes evolving with the secession of the South and the loss of the oil revenue has urged the Government to revise its policies in agriculture and natural resource base. Currently, the identified threats to the country's biodiversity include: (i) worsening of climatic conditions; (ii) weak environmental governance, sustainable participatory planning and the rule of law; (iii) conflict-related, inter-sectorial natural resources' exploitation; (iv) lack of targeted investment by the Government, the private sector and the international community; (v) lack of policies to benefit poor people and lessen resource's inequalities; and (vi) low quality supporting research and education (Badri, 2012). 25. The Wildlife Conservation General Administration (WCGA) is responsible for the management and assessment of nature reserves and the status of forest and tree habitats in Sudan. Sudan supported by GEF/UNDP developed its National Biodiversity Strategy and Action Plan (NBSAP) in 2000. A permanent national biodiversity committee was established to provide policy and advice to the Government on biodiversity management and conservation issues including implementation of CBD and related conventions. Institutional arrangements for forest, rangelands and biodiversity conservation in Sudan 26. Federal level ministries and specialized agencies: The Ministry of Environment, Forestry and Physical Development (MoEFPD) and the Ministry of Animal Resources, Fisheries and Range (MoARFR) are the main federal actors in charge of natural resources planning and management spheres. They have the mandate of policy formulation, planning and monitoring of developments, research and extension services for agriculture, livestock, forestry, fisheries, pastures and overall natural resources protection, conservation and development. Other key agencies are the following: * The Higher Council for Environment and Natural Resources (HCENR) was established in 1991 in order to coordinate and advise on making effective policies, laws, plans and institutions that solve problems of natural resources degradation in Sudan. The HCRNR is affiliated to the MoEFPD. HCENR represents Sudan as a focal point for most of the global conventions on the environment (UNFCCC, CBD) and is responsible for ensuring Sudan's compliance with its obligations under these treaties. Several branches for HCENR work for the different States under the chairmanship of the State Governors (Wali). The functions of these branches are to implement the general policies formulated by HCENR, to monitor implementation of development program relating to natural resources, and to collect data and gather information on negative or adverse changes in the environment. * The Forest National Corporation (FNC), a semi-autonomous body within the MoEFPD, was created in 1989 with the responsibility of coordinating the forestry development, formulating 24 There are no recent wildlife surveys for the whole Sudan and only limited information exists on amphibians and reptiles. Several surveys were conducted by the Wildlife Research Center during the 1980's-2000's, but were limited to specific areas of northern and eastern Sudan states. These surveys did report that numbers of major species had decreased. 30 and following up the implementation of policies, planning and undertaking administrative tasks for forests and woodland management. Some of the additional purposes of the FNC is to increase the reserved forest areas up to a minimum of 20 percent of the total area of the country, intensify tree plantation, for the purpose of protection and production, and coordinate the various bodies to implement forests' general policies and undertake research. The FNC is Sudan's focal institution for the GGWI. * The Range and Pasture Administration (RPA) is in charge of planning, conservation and development programs, protection of rangelands against brushfires, rehabilitation of degraded rangelands and execution of national and internationally assisted projects. The RPA authority is decentralized and Range and Pasture administrators are established at State level affiliated to the States' Ministries of Agriculture. The federal RPA exists under the responsibility of the Federal Ministry of Agriculture and Irrigation affiliated to the General Administration for Natural Resources. * The Wildlife Conservation General Administration (WCGA) is affiliated to the Ministry of Tourism, Antiquity and Wildlife. Its mandate is to: (i) develop and conserve wildlife biodiversity; (ii) formulate policies and plans for the development of wildlife; (iii) pass and enact laws and regulations that develop and protect wildlife resources; (iv) enhance commercial benefits of wildlife that can contribute more effectively to the national economy (establish and conserve wildlife parks and game reserve areas); (v) manage and assess nature reserves and the status of forest and tree habitats in Sudan; and (vi) supervise research in area of wildlife. WCGA is also entrusted with the task of establishment and management of protected areas in Sudan. * Research centers: The Agricultural Research Corporation (ARC) is the lead institution in research emphasizing the use of fodder crops in agricultural systems. The Animal Resources Research Corporation (ARRC) and the Forestry Research Corporation (FRC) carry out research in their respective fields. The latter is also responsible for promoting gum arabic and agro-forestry systems25. The Wildlife Research Center is responsible for conducting surveys on wildlife for classification, research regarding habitats, development of methods of protection and conservation of these resources, and suggesting the creation of biosphere reserves. 27. At the State level: each of the 18 States has an executive (Governor and Council of Ministers), legislative (State Legislature) and judicial branches (State Judiciary). The executive branches are responsible for implementing federal laws and developing state-specific policies and programs. The FNC has regional technical divisions reporting to the FNC headquarters26 Also, the HCENR established branches in the different States in order to monitor the implementation of development programs related to natural resources and collect data and 25 The FRC is part of the ARC affiliated to the Ministry of Agriculture while FNC, also in charge of research, is affiliated to the Ministry of Environment, Forestry and Physical Planning. This situation still causes debate over jurisdiction regarding research functions. 26 The mandates of the operating geographical technical divisions are to: (i) Conduct forests resources assessments of both gazetted forest reserves and natural forests for the purpose of updating and designing management plans on sustainable basis; (ii) Monitor the implementation of the sanctioned management plans; (iii) Collect and save the base line information with regards to the reserved forests and forests proposed for reservations; (iv) Follow up and facilitate the forests reservation programs between the (FNC) HQ and forests administrations in the States; (v) Identify and settle disputes on encroachments in the reserved forests area; and (vi) Follow up the progress made by the foreign funded forestry projects. 31 information on changes in the environment. 28. At the local level: local associations, farmer/producer and grass roots groups such as the farmers associations, village councils, agricultural cooperatives, women's groups, youth groups, vocational training centers, market vendors, livestock producer associations, unions27, service providers are involved with natural resources management. II. Detailed Project Description 29. The project will address some of the common barriers that have been identified for the implementation and scaling up of SLWM practices. These barriers integrate the challenges and threats described for the forest, rangelands and wildlife described above. The scope of the project will not be able to address all the complexity of these barriers but it will address them in key target areas. The barriers are: 30. Knowledge and technological barriers: Although a wealth of information exists on successful SLWM technologies and approaches in Africa, and the TerrAfrica platform has accomplished important advances, Sudan has not fully benefitted from sharing of knowledge and experiences at local, national and regional levels. The data gaps in Sudan are pervasive at all levels, with missing or outdated information on natural resources, environmental basic data, mapping, and socio-economic data. The existent knowledge is insufficiently linked to policy formulation and implementation processes. Knowledge gaps are still present for example in terms of implementing SLWM following an integrated landscape approach, and monitoring land degradation and its impacts. At the state and community level, Sudan still lacks capacities and experience with SLWM specifically in terms of strategies and technologies to increase production, improve livelihoods and conserve the natural resource base considering increased population pressures, climate change, actual and potential impacts and increased land degradation. In addition, technical assistance has not been fully effective due to lack of financial resources, inadequate training and capacities at local levels, and insufficient access to new technologies and approaches. 31. Policy and institutional barriers: At the policy level various constraints have been identified in Sudan in order to fully implement sustainable land use and management practices and biodiversity conservation at a landscape level, and as defined in national strategies and international conventions. Among them are: (i) lack of integrated and coordinated vision and strategies for natural resources; (ii) lack of effective comprehensive environmental and natural resources policy and legislative framework that deals with land use in an integrated, multi-sector 28 way ; (iii) multiple institutions and hierarchy levels involved in the area without a clear harmonizing strategy; (iv) absence of land use plans and a lack of laws governing land tenure and land use; and (v) weak enforcement mechanisms as well as lack of qualified human resources to adequately disseminate and enforce the laws. At the institutional level, some of the local Governments as well as communities, often lack capacities and resources and information access to manage their land resources, severely restricting their effectiveness. 27 The law of Sudan allows farmers to be organized in unions. The Gum Arabic Producers Union and the Pastorals Union had the mandate to protect the rights and interests of the gum arabic crop producers and livestock owners and herders in Sudan. 28 Some environmental legislation has been formulated at federal level overlooking States and local community and other stakeholders' interests. 32 32. Economic and financial barriers: Financial resources available are not commensurate with the needs to address the multi-dimensional challenge of land degradation and climate vulnerability. In addition, effective incentives for SLWM (return on investment; compensation for resource non-use; and up-front investment support for returns deferred in the longer term) have not been developed and/or are very insufficiently applied. 33. The proposed Sudan project helps address these gaps by (i) investing in the public environmental goods; (ii) improving institutional performance, governance and multi-sector coordination, and information access; and (iii) by establishing replicable investment models and on-the-ground solutions that can be scaled up. This project will directly address land degradation challenges in Sudan by promoting a landscape approach to natural resources management starting from the conservation of biodiversity in forest reserves; moving to community based sustainable land and water management (SLWM) practices around protected areas and forest reserve; and building natural resources management corridors between protected areas and forest reserve. Only by tackling natural resource management (NRM) for protected areas, forest reserve, and agriculture and rangeland the project will be able to strengthen the sustainable landscape management mosaic. The project will also help build resilience against drought and the increasing variability in rainfall. The project will finance a comprehensive set of activities in order to involve local communities in the rehabilitation and conservation activities of natural resources in the target area. At the policy and institutional level, the project will strengthen policy and regulatory frameworks, remove critical knowledge barriers, and develop institutional capacities towards achieving the project's objective. In addition, by systematizing and disseminating lessons learned, the project will also contribute to making subsequent Government and community efforts more effective. 34. Gender barriers. Important barriers to female participation include the use of traditional tenure systems which curtail the ability of women to own land and livestock. Where programs to address this situation exist, they tend to be decentralized lacking coordination and policy-level leadership. Interventions lack the sensory data needed to develop demand-driven programs and therefore replicate templates used in other contexts and rarely equip women to compete in the local job market or to function in the available sociopolitical space. Female-headed households are found to be poorer than men-headed households; with sector where those employed in agriculture are poorer than those engaged in industry or services; and with education where the illiterate are poorer than the educated. Inequality, as measured by the coefficient of variation (CV) of income-based dietary energy consumption was similar for urban and rural populations (31.2 percent and 32.2 percent respectively); however, it was higher in female than in male headed households (35.1 percent and 29.6 percent, respectively) (2009 National Baseline Survey). 35. High rates of illiteracy and absence of vocational training among poor women reduce their coping capacity and the number of available livelihood opportunities. In addition to adverse environmental conditions and economic problems, the occurrence of armed conflict in some States have had a disproportionate impact upon women. Heightened vulnerability tends to be particularly acute for rural women who are adversely affected by male urban migration. The subsequent rise in the number of female-headed households has seen many rural women move into peripheral urban areas to secure food for family members. In some states, such as Kassala, the prevalence of tribal politics further marginalizes women. For example, women make up 48.4 percent of the population of Kassala State, of which 35 percent are reported as extremely poor. 33 Project Development Objective 36. The development objective of the proposed project is to increase adoption of sustainable land and water management (SLWM) practices in targeted landscapes. PDO Level Results Indicators 37. The key results indicators will include the following: * Land area where sustainable land and water management practices have been adopted as a result of the project. (104,000 ha) (Core Indicator) * Direct project beneficiaries. (50,000 people, with 35percent female beneficiaries) (Core Indicator) * Areas brought under enhanced biodiversity protection. (17,400 ha) (Core Indicator) Geographic Location 38. At the outset, the project on the ground activities are envisaged to be implemented in three of the country states, namely, Kassala, El Gezira and White Nile. The project will facilitate a variety of sustainable land and water management practices such as soil conservation techniques, crop management, agro-forestry practices, water harvesting and improved livestock management activities according to the specific needs and characteristics of the areas. These areas were chosen based on eligibility criteria that included: (i) accessibility, and (ii) availability for undertaking soil, water, forest, and biodiversity conservation activities. Annex 9 shows a map highlighting the project's target area. 39. The three zones are adjacent in a band stretching from the northeast to southwest, to the South of Khartoum, reflecting the principle of the Great Green Wall as a barrier to desertification. Further, these states share common ecological and socioeconomic similarities, such as fluctuation of rains, land degradation, decline of productivity, reduction in biodiversity, effects of climate change accompanied by socio-economic problems. Gezira State demonstrates the most favorable development indicators, due to its proximity to the Nile and presence of large irrigation schemes, but rural poverty is still widespread (40 percent). In Kassala and White Nile State rural poverty is at 48 percent and 61 percent respectively (Sudan Institutional Capacity Program: Policy brief 2011). 40. White Nile State. The White Nile State is located in the center of Sudan. It is delimited by Khartoum State in the north, North Kordofan State in the west, and Gezira and Sennar States in the east, with an area29 of about 40,000 km2. The estimated population is more than 2.7 million, growing at a 2.5 percent rate and distributed over eight localities. The State includes the section of the Nile between Malakal, South Sudan, and Khartoum. The water resources in the State include the river White Nile, the underground water and surface water including Khores, Wadies and surface run-off. Most of the population works in traditional farming and open grazing, with estimated more than 7 million animals, while a few of them practice trade (El Gunaid, et al, 2013). The most important crops are durra, sesame, groundnuts, millet and wheat. Of total arable land of 6.5 million acres, about 4 million is exploited. 41. The climate in the White Nile state is dry to semi-dry, with annual rainfall ranging from 300-600 millimeters from north to south. The most noticeable feature of the landscape is the presence of elongated sand dunes, which cover the eastern and southern port of the area. The 29 The data on State size from different sources vary. 34 area forms a transitional zone between the bank of White Nile River and El Helba, which is mainly composed of natural rangeland with few scattered relics of the remaining natural forests and few scattered villages and semi-settled areas. The specific rangeland site selected for this project is Umm Rimta, which is found to the west of the State in Ed Duiem locality, Lat 15- 14.3N/32.25-31.35 longitude, covers 3,345 km Sq and is threatened by desertification, sand dune encroachment, livestock and overgrazing, open wells, wood cutting and agriculture. 42. Gezira State. Gezira State is located in the center of Sudan, and is delimited from north by Khartoum State, Sennar State to the south, and the White Nile State to the west, with a total area of around 24,000 km2. Gezira lies just southeast of the confluence of the Blue and White Nile rivers, and includes the site of one of the largest irrigation projects in the world, which has made Gezira the most productive agricultural area of Sudan. The State is the Sudan's major agricultural region with more than 1.1 million hectares, and key crops of cotton, durra and wheat, as well as cereals, oilseeds, peanuts (groundnuts), sesame, dukhn (millet), and vegetables. After the capital, it is the most population dense state of Sudan, with a population of close to 3 million. The rainfall range is 300-400 mm per annum. The state was severely affected by the August 2013 floods, which will also negatively affect the environment and forest use. 43. The forest cover constitutes around 7 percent of the total State area, with the per capita consumption of forest wood products approximately 0.64 Cubic meters. The dominant tree species includes Acacia nilotica along the river banks, Acacia mellifera, Commiphora Africana, Bosciasenegalensis, Acacia seyal, Balanitesaegyptiaca, Cadabaglandulosa, Cadaba rotunda and in low areas Dalbergi amelanoxylon (FNC/IFAD/GEF, 2012). The proposed site of Gezira East forest, borders the large Butana rangeland. The Acacia forest lands in east Gezira, is estimated to cover 85,000 hectares, and includes the gazetted forest reserve of Wad Bogol. 44. Kassala State. Kassala State suffers from some of the lowest development indicators seen among states in Sudan. The average household size in the state is 6.2 persons with a significant number of female-headed households in rural areas. The population is characterized by high levels of cultural and ethnic diversity, due to historically protracted waves of migration to the area, as well as several large waves of Ethiopians and Eritrean refugees. The presence of such large numbers of internally and externally displaced people places great pressure on existing social and basic services within the state. The main factor underlying food insecurity is drought, which negatively affects rainfed crop production and pastures in the state. Wholesale displacement also contributes to the food gap in Kassala, and the increasing dependency and reduction of the areas of land under cultivation. The state economy is largely based on traditional, natural resource related activities, though a person's ethnic background influences their livelihood pattern. However, the ability to use natural pastures, as well as the pursuit of other agricultural and livestock-based activities, has been severely curtailed by armed conflict in the region. 45. Kassala state is located in the eastern part of the Country and has an area of about 42,282 km2 and an estimated population of approximately 1,400,000 (2000) and an annual growth rate of the entire population at around 2.5 percent, and lies between latitude 34o 12 and 36o 57 East, and between longitude 14o 12 and 17o 12 North. It is delimited by Eritrea in the east, the Red Sea State in the north, Khartoum State and the River Nile State in the west and by Al-Gedaref State to the southwest. The majority of people's livelihoods are agricultural, including crops of cereals, oilseeds, cotton, and peanuts (groundnuts), as well as pastoral and agropastoral activities (cattle and camels). Key crops include fruits, cotton and oil seeds. The Atbara River, an 35 important tributary of the Nile, flows northwestward through Kassala and causes seasonal floods during torrential summer rains, and is used to irrigate the large New Halfa agricultural scheme. Kassala State is estimated to have over 7 million feddans (2.94 million ha) of natural pastureland, supporting around 3 million heads of livestock, as well as a similar number of additional livestock that pass through the state on a seasonal basis. Rain-fed cultivation techniques predominate within the state and around 60 percent of the farmers in Kassala State are situated in these areas. However, the yield of this rain-fed land is only 16 percent of that achieved in equivalent areas under systems of full pump-based irrigation. 46. Eastern Sudan has recently emerged from a situation of conflict but remains fragile and subject to multiple sources of stress. As a "host community" to refugees and IDPs for the past forty years, the population of Eastern Sudan suffers from acute poverty and limited development prospects, not dissimilar from those experienced by the IDP and refugee population in their midst. The Eastern Sudan Transitional Solutions Initiative (TSI) developed by the World Bank, UNHCR and UNDP and with the support of federal and state Government, recognizes that, to improve how protracted displacement is handled and durable solutions promoted, there is a need for a comprehensive approach with increased emphasis on development interventions. Rising inequality, legacies of violence and trauma, and economic deterioration need to be tackled through formal and informal institutions with enhanced capacity, leadership and shared values to implement sustainable development interventions. 47. The proposed project will promote integration of NRM into this setting. The preliminary scoping of the project site has identified Telkuk locality as a possible zone of intervention, situated to the north of Kassala town, and between the Gash river and the border to Eritrea. Telkuk, earlier Hameshkoreib, has a population of around 327,000 and population density of 40 per km2. Main threats to the Telkuk forest area of 2400 hectares, not gazetted, is sand encroachment, drought, livestock, and unrest. Forest land covers three percent of the state's total area, equivalent to some 126,000 hecatres. Of this amount, around 9,000 hectares have been set aside for conservation (GoS, UNDP, 2009). Approach 32. The project aims to address land degradation challenges in Sudan by promoting a landscape approach to natural resources management and conservation of biodiversity, by considering both a geographical and socioeconomic dimensions to managing the land, water and forest resources that form the foundation for meeting goals of food security and inclusive green growth. Activities on the ground will start by preparing land-use planning maps as a basis for integrating protected areas, forest, rangelands, croplands for increased productivity and provision of ecosystem services (biodiversity, climate adaptation, water management, among others). 33. The approach - based on time-honored traditions in the country but informed by modem science and tools - will deliver intertwined local, regional and global economic, conservation and climate benefits from the region's ecosystems. Supporting multi-sectoral activities in the landscape mosaic, will emphasize the need to integrate different management and conservation strategies while promoting sustainable use of natural resources, increasing opportunities for improvement in local livelihoods and adaptation to climate change. Piloting the implementation of this approach will be supported by the lessons learned from other African experiences within SAWAP and other projects and will strengthen the capacity of the public sector to manage and regulate ecosystems services, following the landscape approach. 36 34. In addition to the landscape approach, the project will strengthen the community-based approach as local communities will be involved in SLWM and biodiversity conservation activities improving related livelihoods. The activities to be undertaken by the local Governments, committees and communities will improve their capacity to deliver better services, be transparent and use resources effectively. It is expected that the project will enhance development and ensure greater engagement of beneficiaries in local decision-making processes. 35. Specific attention will also be paid to gender inequalities. The project will promote participation and representation of marginalized groups, particularly women, in decision-making, at several levels: village, State or national. Women will be targeted as beneficiaries at the village level and through involvement in the VDCs for decision-making. Lessons from other projects show that involvement as decision-makers at State and national level tend to be more challenging. The Project will therefore pay special attention to women's engagement and representation at steering committee level, including the TC. The proposed project will (i) address the specific needs of women and men through well-tailored training programs; (ii) identify interventions that specifically target women as main beneficiaries, e,g, gender-sensitive income generation activities; and (iii) mainstream gender in supervision and implementation support, monitoring and evaluation and in policy dialogue with Government and civil society. 36. SLWM practices include both technologies30 and approaches31 applied to raise land quality. The precise practices are usually site specific, requiring flexibility in defining what is the most appropriate SLWM technology or practice. Selection of the appropriate SLWM technologies for a particular area will be determined by: (i) the qualities and characteristics of the local land resources; (ii) the SLWM requirements of the land use to be pursued; and (iii) the socio-economic context and priorities of the land users. There will be synergistic benefits from combining approaches and technologies, which can be expected to lead to greater productivity and environmental benefits than could be achieved with each one on a purely incremental basis. 37. There are a number of common technical elements that underpin win-win management options, notably: minimum soil disturbance; maintenance of good ground cover; restoration of soil organic matter and related biological activity; integrated plant nutrition management; better crop husbandry; development of integrated crop/livestock/agro-forestry systems; opportunistic flexible management of traditional pastoral systems; and delineation of temporary or permanent protected areas. Specific practices that can be used in combination to advance toward SLM are listed in the table below: SLWM Practices Land/water management Land/water management technologies approaches Land use regimes Agronomic and vegetative measures Structural measures * Watershed plans * Inter-cropping * Terraces and other physical measures * Community land use * Agro-forestry in crop or grazing (e.g. soil bunds, stone bunds, bench plans systems terraces, etc.) * Grazing agreements, * afforestation and reforestation * Flood control and drainage measures 30 Technologies refer to agronomic, vegetative, structural, and management measures that control land degradation in the field, such as terracing, forestation, reduced tillage, and micro-irrigation. 31 Approaches include ways and means of support that help to introduce, implement, adapt, and apply technologies in the field, such as watershed management, climate risk management, and community land use planning. 37 closures, etc. * Mulching and crop residue (e.g. rock catchments' water harvesting, * Biodiversity corridors * Crop rotation cut-off drains, vegetative waterways, * PA management * Fallowing stone-paved waterways, flood water *Conservation zones * Low till diversion, etc.) * Other * Composting/green manure * Water harvesting, runoff management, * Integrated pest management and small-scale irrigation (shallow wells / * Vegetative strip cover boreholes, micro ponds, underground * Contour planting cisterns, percolation pits, ponds, spring * Re-vegetation of rangelands development, roof water harvesting, river * Integrated crop-livestock systems bed dams, stream diversion weir, farm dam, * Woodlots tie ridges, inter-row water harvesting, half- * Alternatives to woodfuel moon structures, etc.) * Sand dune stabilization * Gully control measures (e.g. stone * Other checkdams, brushwood checkdams, gully cut/reshaping and filling, gully revegetation, etc) * Other Project Components Component 1: Institutional and Policy Framework (US$ 1.5 million): 38. The component will finance technical assistance, workshops, goods, services and operational costs in order to build or strengthen national, state and local level capacities to strengthen policy and regulatory frameworks, remove critical knowledge barriers, and develop an enabling environment for the on-the-ground activities. Component I will support: 39. Institutional capacity building: The project will support key institutions involved in natural resources management by strengthening their capacity to formulate, implement and monitor programs and projects geared towards the sustainable management of natural resources and biodiversity conservation, based on a capacity enhancement plan. The capacity development program will be flexible and modular, whereby capacity building activities will be designed based on experiences in the implementation of component 2. A variety of consultative mechanisms with all concerned stakeholders at the federal, state and locality levels will be used to determine the institutional, technical, and administrative training needs. The project will provide institutional support to MoEFPD, FNC, RPA and WCGA at all levels. This support will be used to: (i) develop effective inter-agency collaboration mechanisms at the central and state level; (ii) assist communities in preparing and implementing investments under integrated land management plans; and (iii) manage, monitor, and maintain infrastructures by Village Development Committees (VDCs). 40. Support to policy framework: The project will contribute to addressing the lack of effective comprehensive policy and legislative framework that deals with sustainable forest and land use management in an integrated, multi-sectoral way. The project will assess the adequacy and effectiveness of the current regulations governing the implementation of SLWM and biodiversity conservation practices following the landscape approach in the selected landscapes. Selection of strategic entry points for any legislative reforms will be based on complementarity with other initiatives and on lessons emerging from component 2. A strategy will be developed with practical recommendations, measures and policies for effective cooperation at centre-state- local and community levels for the protection and conservation of the natural resource base. The 38 project will work with HCENR to strengthen policy framework and legislation for SLWM and biodiversity conservation. 41. Information and knowledge management: The project will help address the barriers in terms of information and knowledge related to broader adoption of SLWM and biodiversity conservation practices. In order to systematically apply and scale up best practices for SFM and SLWM, a systematic approach to capturing lessons must be established, with clear methodology for lesson learning rooted in scientifically based evidence. The project will therefore support the Pressure State, Impact Response (PSIR) analysis of land and biodiversity degradation, including assessment of land management practices. The analysis will provide information as to what would be the best practices to promote in each target locality and landscape (in component 2) based on relevant baseline data collection to update key information after the separation of South Sudan, including key species and variables for forests, rangelands and wildlife in selected landscapes. 42. A communication plan will be designed and implemented in order to disseminate information concerning processes, results and lessons learned through the program to key ministerial departments and national agencies, state and local Governments, bilateral and multilateral development partners, non-Governmental organizations and beneficiaries. This will encompass strategy to prepare or contribute to national policy; and linkages with Sudanese institutions and learning platforms to be established at the outset. The proposed project will receive support from the BRICKs project in strategic communication, and contribute to knowledge exchange initiatives that will directly benefit the project's implementation, within the TerrAfrica platform, the SAWAP through the BRICKS project32 as well as other national or regional exchange initiatives. 43. The capacity building initiatives will address identified needs and will embed the following principles: (i) Participation of local stakeholders (including farmers groups, livestock keepers groups, women associations, etc.) in planning and implementing local development activities, which will take into account economic, social, technical and environmental sustainability, and will efficiently operate and maintain physical investments and infrastructure in a sustainable way; (ii) Social accountability to enable local authorities to conduct local Government activities in an inclusive and transparent manner, to be more accountable to their constituencies and allow all categories of citizens (including women and the youth) to access to key information and participate in decision making processes; (iii) Equity at the level of local communities between different social categories of population in general, and between men and women in particular; (iv) Modernization and efficiency of public services at the state and local Government levels; and (v) Sustainable use of natural resources and biodiversity conservation following a landscape's approach. Component 2: Community based sustainable management of rangelands, forests and biodiversity (US$ 5.23 million) 44. The component will finance technical assistance, training, investments, goods, works, services and operational costs related to the promotion of wider adoption of community-based 32 The Building Resilience through Innovation, Communication and Knowledge Services project (BRICKS) aims to improve accessibility of best practices and monitoring information within the SAWAP portfolio on integrated management of natural resources, climate change and natural disasters. 39 SLWM practices in forests and rangelands in the targeted communities (see above for details on list of SLWM practices and definition). The restoration and protection of targeted ecosystems, the implementation of water and soil conservation activities and the development of effective natural resource management plans are expected to improve biodiversity, reduce land degradation and improve livelihoods. Capacity building activities would be integrated into each sub-component so that the farmers and pastoralists will have the skills to conduct the different sustainable practices. 45. Integrated land management plans: The project will support the preparation of natural resource management plans for the gazetted Wad Bugul reserve in the Butana area in the Rufaa locality of Gezira State, Telkuk Forest Reserve in Kassala State, and the rangelands in Aum Rimta including Al Baja and Um Jara sites in White Nile State. 46. The gap analysis of the R-PP of Sudan identified the need to reformulate management plans of riverian, non-riverian and motane forests to accommodate revised designated functions of meeting livelihoods and grazing needs of neighbouring communities, Specifically, the project will support the preparation of effective natural resource management plans for already gazetted Wad Bugul and Hamtrea forest reserves in the Butana area in the Gezira State. A management plan will also be prepared for the Telkuk Forest Reserve in Kassala State and the Um Rimta rangelands. These management plans will guide the activities to be implemented as described below. The design of these management plans will also serve as pilots from which to derive lessons for future scaling up in these and other states of the country. The Watershed Management project has good experience with the development of Participatory Land Use Plans (PLUPs)/Community Action Plans (CAPs) and Community Watershed Plans (CWPs) to capture preliminary information regarding background and analysis of problems derived from participatory community consultations, but it is also necessary to envisage maintenance and update to reflect future land use plans and draw upon recently accumulated baseline data. 47. Forest ecosystem rehabilitation and restoration: In Gezira, the gazetted Wad Bugul Forest Reserve (totaling about 15,000 ha) will be rehabilitated. In Kassala State, the project will gazzette and rehabilitate 2,400 ha of the Telkuk Forest Reserve. Proposed project sites can support many of the original small mammals, birds, reptiles, other fauna, and plant life typical of the Sahel biome. The project is expected to benefit biodiversity conservation through the gazetting of forest reserves; restoration of native vegetation by reforestation, enrichment planting, natural regeneration, sand dune stabilization, and effective implementation of management plans. The activities to be conducted in these areas will be part of the implementation of the management plans designed previously. 48. Rangeland management: Activities will include establishment of shelter belts for sand dune fixation, demarcation of animal migration routes and grazing land rotations, establishment of nurseries for rangeland rehabilitation, clearing and opening of fire lines to protect rangelands. In addition, community level project activities may include rehabilitation of existing Hafirs and water sources; rehabilitation and cultivation in open spaces; and seeding rangelands to improve range condition with fodder grasses. The activities to be conducted in these areas will be part of the implementation of the management plans designed previously. 49. Local communities will receive technical assistance to acquire the capacity to conduct the selected rangeland activities, including training to support the organization of communities in associations (cooperatives) around specific NRM livelihood initiatives. Given the importance of 40 livestock in Sudan and its impact on land degradation, sustainable rangeland management activities related to husbandry and livestock are crucial. This project will fund training of key department staff, and where available locally-based partners such as NGOs, involved in forest ecosystem management, by developing training packages to cover issues such as participatory planning and programming, conflict management and resolution, public information management, participatory monitoring and evaluation, gender, fund raising, accounting, transparency, accountability and reporting. Component 3: Project management, Monitoring and Evaluation (US$ 1.0 million). 50. Component 3 will consist of technical assistance, operational costs, goods, services for the following activities. 51. Monitoring and Evaluation. Under this component support will be provided for running an M&E system that will track the expected project's results, including those registered in the GEF tracking tools for Biodiversity, Land Degradation and Sustainable Forest Management. The M&E system will explore use of the existing system (Geographical Information System (GIS) & Remote Sensing (RS)) established in the MoEFPD. 52. The M&E system to be established for the project will work in coordination with the SAWAP Program so that key indicators can be aggregated from the country level to the regional Sahel level. To this end, the project will receive support from the BRICKS project that will offer a regional portfolio monitoring that will reinforce benchmarking and improved investment design and execution. An M&E expert in the PCU will coordinate and aggregate monitoring and reporting from M&E Officers in the State PCUs. 53. Project Management. The MoEFPD will be the implementing agency for the project. Support will be provided for day-to-day project implementation and management including procurement, financial management, environmental and social safeguards aspects, preparation of annual work plans and organization of supervision missions. The component will provide support for office operating costs including annual audit costs and supervision missions. 54. The PCU will be composed of: a project coordinator, M&E expert, procurement officer and finance officer (accountant). According to the institutional arrangements, the State PCUs will include a monitoring and evaluation officer supported by national experts, extension workers, and decentralized services responsible or planning and strategic coordination of the project in collaboration with stakeholders. As needed, the project will call on the services of communication specialists, and environmental experts. 41 Annex 3: Implementation Arrangements SUDAN: Sustainable Natural Resources Management A. Project Institutional and Implementation Arrangements 1. The proposed institutional structure for the project would be based on two inter-related levels of arrangements - the governance/advisory level and the implementation level. These arrangements will promote both adequate coordination mechanisms and efficient implementation of all activities through empowering the different stakeholders according to their respective mandates and competences. Figure 1 below graphically illustrates the arrangements. The key principles underlying institutional and implementation arrangements are the following: * strong linkages to the programmatic approach incorporated in the national strategy as embedded in the I-PRSP; * subsidiarity in the implementation of activities; * ownership of the project by the national institutions with appropriate mandate; and * best use of lessons learned. Governance/advisory level 2. The Interministerial Project National Steering Committee (PNSC) will provide orientation and guidance for the SSNRMP activities. The (PNSC) will be chaired by the Minister of MoEFPD supported by the State Ministries of MoEFPD acting as deputy chairpersons. This steering committee will comprise all concerned agencies and entities at the federal level: the Ministry of Foreign Affairs, Ministry of Finance and National Economy, Ministry of Agriculture; Ministry of Environment, Forestry and Physical Development; Ministry of Animal Resources, Fisheries and Rangelands; Ministry of Tourism, Antiquity and Wild Life; the Higher Council for Environment and Natural Resources, and a representative of civil society, and the FNC. The committee will meet twice a year, and the project coordination unit will be represented and contribute in these meetings. The Director of Environment from MoEFPD serves as a member and as the rapporteur of the committee. The mandate of the PNSC is the following: * Provide policy guidance and define the project orientations; * Review and clear the annual technical and financial reports; * Review and clear the annual work plans and budgets; * Actively involve all stakeholders in the project design, implementation and monitoring from the beginning; * Advocate for the project at central, state and locality-community levels through media, workshops and meetings with responsible authorities connected to the project; * Ensure appropriate gender considerations in the project implementation; * Submit periodical situation and progress reports (bi-annual and other as seen fit) to the Minister of the MoEFPD; * Establish a special account for the project in the Central Bank of Sudan (CBS); * Handle misunderstandings and disputes between the stakeholders that may raise during the implementation phase; * Contribute to the monitoring and evaluation of the project; * Ensure that the project activities are well coordinated, coherent and consistent with the national strategy within the I-PRSP; and 42 * Participate in the World Bank and other partners' supervision missions. 3. The Project Technical Committee (PTC) represents all relevant stakeholders and will be chaired by the MoEFPD Director of Environment, with the National Coordinator as Secretary. It will be supported by technical staff of FNC; the Administration of Wildlife and of Range and Pasture Administrations at the Federal level; and any additional technical expertise as found necessary by the implementing agency. The main objective of the TC is to work closely with the central PCU during project implementation and offer advice to ensure that the project activities are technically sound. The PTC will meet regularly to discuss work plans and implementation progress. Implementation Level 4. The MoEFPD has overall responsibility for the project's implementation. Through Memoranda of Understanding (MoU), certain specialized functions will be provided by partner organizations, the FNC, the Range and Pasture Administration (RPA), the Wildlife Conservation General Administration (WCGA) and the Forest National Corporation (FNC). A Project Implementation Manual (PIM) will be prepared for the project. 5. Implementation at Federal Level. The Project Coordination Unit (PCU) will be responsible for carrying out the daily activities, overall supervision and coordination of the project implementation at all levels. It will report to the PNSC and will be supported by relevant staff from the existing Government officials, hired consultants and others. The PCU will be based in MoEFPD. The PCU will be composed of a project coordinator, M&E expert, procurement officer and finance officer (accountant). 6. Implementation at State and Community Level. The State Project Implementation Unit (SPIU) will work closely with all the stakeholders at the State, local and community levels during the project implementation. The SPIU will report directly to the PCU based at MoEFPD. The composition of these units will be tailored for each of the selected States: In Gezira and Kassala, the technical work will be headed by the State-level FNC Forest Director, while the State Director of the Wildlife and Range and Pasture Administrations will coordinate activities in White Nile State. These units will draw on technical, administrative and financial staff, as required, and be supported by a project State M&E coordinator. The SPIU will include a monitoring and evaluation expert, supported by national experts, extension workers, and decentralized services responsible or planning and strategic coordination of the project in collaboration with stakeholders. As needed, the project will call on the services of communication specialists, and environmental experts. Each expert will be associated with the project through a contract that will be evaluated annually. Terms of Reference for each expert will be prepared and presented. 7. The project will work with existing Village Development Committees (VDCs) at the State level to liaison with the larger communities. Where needed, the project will mobilize support and capacity building around VDCs that are not functioning effectively. 43 Figure 1: Institutional arrangement for SSNRMP implementation Project National Steering Committee (PN C FEDERAL LEVEL PNSC Objectives: Chaired by the Ministry of Environment, Forestry and Physical - To actively involve all stakeholders in the Development project design, implementation and Supported by the State Ministries of MOEFPD acting as deputy Members: monitoring from the beginning. -Ministry of Foreign Affairs - To advocate for the project at central, state and -Ministry of Aice locality-community levels through media, -Ministry of Liest Fe workshops and meetings with responsible -Ministry of Aiquty, Touris and wildlif authorities connected to the project. -iityo niut,Tuimadwllf authrites ounctedto he rojct.-Higher Council for Environment and Natural Resources - To submit periodical situation and progress -Representative of civil society reports (bi-annual and other as seen fit) to -Forest National Corporation TECHNICAL COMMITTEE (TC) the Minister of the MEFPD. -MoEFPD Director of Environment. Chaired by the Under Secretary, MoEFPD and assisted - To establish a special account for the project in b te fD the Central Bank of Sudan (CBS). -FNC -Wildlife Administration -Range and Pasture Administration PROJECT COORDINATION UNIT (PCU) -Ministry of Agriculture PCU~~-insr ofecivs Livstck Fisheriesl andnca Rangelandsnede -Carry out the daily activities, overall supervision and MoEFPD Director of Environment assisted by: coordination of the project implementation at all levels -National Coordinator -Report to the PNSC -M&E Specialist TC objective: -r o the i e -Procurement and Finance specialists - work closely with PCU during the project on ationStaff from MoEFPD, FNC; Wildlife, Range implementation to advise on technical aspects. and Pasture Administration as needed STATE AND COMMUNITY LEVEL Gezira Project Implementation Unit White Nile Project Implementation Unit FKassala Project Implementation Unit _ Director General, Ministry of Environment Director General, Ministry of Agriculture Director General, Ministry of Agriculture -Wildlife Administration -Wildlife Administration -Wildlife Administration - Range and Pasture Administration -Ministry of Agriculture -Range and Pasture Administration -M&E specialist -M&E specialist -M&E specialist Locality and community (Village Committees) Locality and community (Village Committees) Locality and community (Village Committees) 44 Financial Management, Disbursements and Procurement A. Financial Management 1. An assessment was conducted to determine whether the Ministry of Environment, Forestry and Physical Development, the principal implementing entity, has acceptable financial management arrangements, which can ensure that: (i) the Project funds are used only for the intended purposes in an efficient and economical way, (ii) the preparation of accurate, reliable and timely periodic financial reports, and (iii) the safeguarding of the Project's assets. The financial management arrangements discussed below satisfy the Bank minimum requirements under OP/BP 10 and can provide, with reasonable assurance, accurate and timely information on the progress of project implementation. 2. From a risk perspective, the overall FM risk is assessed as substantial. This is mainly due to the following: (i) the country FM issues (manual recording and reporting systems, the need for modernized audit practices, lack of sufficiently transparent financial information); (ii) the nature of the project activities (extensive training and capacity building activities, large number of small contracts); (ii) the decentralized nature of activities with local communities across 3 states; and (iv) the diversified implementation responsibilities among more than one Government entity (forests, wildlife, and range and pasture departments). 3. Regarding the FM arrangements, the assessment envisaged the capacity of MoEFPD to use its own administrative, operational procedures and staff to implement the project, with some external support, if needed. The Project overall implementation responsibility will rest with the MoEFPD. The Ministry has acceptable financial management arrangements in place which will be used to implement the Project. The staff at the finance unit however have little experience in providing financial management support to projects administered by donor agencies. The financial department will keep the accounting records and set up manual accounting records to record project's transactions, prepare project financial statements and have them audited in accordance with International Standards on Auditing by the Sudan National Audit Chambers (NAC). The audit reports will be submitted to IDA not later than six months after the end of each fiscal year. Within 45 days following the end of each quarter, an interim financial report (IFR) will be submitted to IDA according to the format agreed during the grant agreement negotiations. The manual accounting system in place will be used at the beginning; however, the finance unit is encouraged to implement a computerized accounting system within the first six to twelve months of implementation. Risk Analysis 4. Country issues: The Public Financial management (PFM) system is functional in Sudan but requires upgrading. A PFM action plan was agreed by stakeholders in 2010 to which the World Bank provided technical assistance. This action plan now being implemented to address the gaps identified. Some of the pillars of the action plan include: (i) implementing an automated Integrated Financial Management Information System (IFMIS) that is piloted in the Ministry of Finance and National Economy before rolling out to other ministries and to states (ii) modernizing the internal audit approach (iii) strengthening analysis of project proposals; (iv) roll out of Government Financial Statistics (GFS) budget classification; and (v) making budget information publicly available. 5. Entity level: The project implementation will be anchored at the Ministry of Environment, Forestry and Physical Development (MoEFPD). The ministry depends on budget allocation from the Ministry of Finance and National Economy (MoFNE). The budget is prepared annually and disbursements made to the ministry's bank account through monthly installments. The MoEFPD's finance unit reports back to the Ministry on utilization of funds with summarized monthly and detailed quarterly reports. 45 6. Project level. The main types of project activities (training of local communities, travel, large numbers of small activities, etc.) involve different risks. The decentralized nature of implementation also involves substantial risk in monitoring and control. The involvement of a number of different entities (forests, wildlife, and range and pasture departments) in project implementation increases the coordination and harmonization risks. Financial Management Arrangements 7. Staffing. The finance functions will be handled by MoEFPD Finance unit under the supervision of the finance manager. To support project implementation in the states, MoEFPD will maintain project records through its partner's, the FNC, accounting departments in the respective states. The finance department at the MoEFPD is headed by the Finance manager, assisted by a deputy finance manager and has 8 other accounting staff. Three of the staff in the finance unit have undergraduate qualifications, while others have diplomas and other qualifications. The staff at the finance unit has little experience in providing financial management support to projects administered by donor agencies. 8. Budgeting. To estimate project costs, MoEFPD technical department represents the main source of input for the cost estimates. This input is considered as preliminary estimates which are reviewed by the budget committee established annually to prepare the ministry's budget. The Project's annual budget will be prepared in line with annual work plans and implementation schedule throughout the project life. These should be submitted to the World Bank for review and clearance. During the project implementation, annual budgets will be monitored closely by the Project Coordinator and the Finance Manager to ensure that resources are used within the agreed upon allocations and for the intended purposes. Budget execution analysis will explain any exception or variance in the quarterly Interim Financial Reports (IFRs). Accounting 9. The MoEFPD is using cash-basis of accounting and a manual accounting system for its operations. Separate manual accounting books will be set up to record the project transactions. Meanwhile, a computerized accounting system will be sought for implementation within the first six to twelve months of project implementation. The project books of accounts will include: a Bank Book, Cash Book, ledgers, journal vouchers, fixed asset register and a contracts register. The Bank agreed with MoEFPD that the same recording and filing systems adopted by ministry will continue to be used for the Project transactions. However, specially designed financial reports will be prepared for the project. The report formats will be agreed before the negotiations of the grant agreement. Internal Controls and Internal Auditing 10. MoEFPD's internal controls and procedures will apply to the project. These controls will help the project to (i) carry out its activities in an orderly manner, (ii) ensure adherence to internal policies and procedures and (iii) safeguard the assets of the project and secure the completeness and accuracy of the financial and other records. These controls include the following: (i) segregation of duties, (ii) physical control of assets, (iii) authorization and approval, (iv) clear channels of command, (v) arithmetic and accounting accuracy, and (vi) supervision. 11. MoEFPD has an Internal Auditor affiliated technically to the Internal Audit Directorate of the MoFNE who has the responsibility of ensuring that the procedures and regulations are compiled effectively. The internal auditor is based at the ministry headquarters in in Khartoum. As the Project will mainly use MoEFPD financial procedures and controls, all financial transactions will be pre- screened and cleared by the internal auditor. The internal auditor will review the budget execution 46 against approved budgets. The internal auditor will also review the accuracy and completeness of documentation and the appropriateness of approvals. The internal auditor has undergraduate qualification. 12. Exceptions will be duly reported to the Project Coordinator/Director General of Environmental Affairs for remedial actions. The Project internal audit findings shall also be communicated to the World Bank implementation support missions. Financial Reporting 13. MoEFPD finance unit will record the project transactions and submit to the World Bank Interim Financial Reports (IFRs) not later than 45 days after the end of each quarter as part of the project's quarterly progress report. Format templates for the IFR are already available at the World Bank. It is agreed that MoEFPD will adjust the format to the Project structure, i.e. components and activities. At a minimum, the financial reports must include the following tables with appropriate narrative: * Sources and Uses of Funds; * Uses of Funds by Project Category and Activity/Component; * Designated Account activity statement; and * Cash Forecast for the following six months. Auditing 14. The movements of the Designated Account and the Project Accounts should be reflected in the project financial statements separately. Independent auditors acceptable to the Bank will audit these financial statements and project accounts according to International Standards on Auditing. Project annual audit reports comprising the financial statements, a single audit opinion and a management letter will be submitted to the Bank not later than six months after the end of each fiscal year. The National Audit Chamber headed by Sudan Auditor General performs annual audits of MoEFPD. It was agreed that a separate audit by the National Audit Chamber will be conducted for the Project's annual financial statements. The terms of reference will take into consideration the project decentralized nature and the WB guidelines. Funds Flows and Disbursement Arrangements 15. Designated Account. A Designated Account (DA) in Euro currency will be opened at the Central Bank of Sudan (CBS) to receive GEF funding to be released by IDA. The DA will be replenished by the World Bank on the basis of Withdrawal Applications (WAs) supported by relevant documents. The Ceiling of the Designated Account will be as set in the disbursement letter. The MoEFPD will be responsible for submitting WAs for replenishment, at least monthly. 16. Sub Accounts. The Project will also maintain a bank account in local currency in each of the states in which the project operates, provided it is within the agreed ceiling. Payments from the sub- accounts can be replenished as disbursements occur and proper supporting documents are filed. The Recipient is responsible for bearing all risks associated with foreign exchange fluctuations when making transfers from the Designated Account that is denominated in Euros to the sub-account denominated in local currency. At the end of the project, any unused balances in both the DA and the sub-accounts will be refunded back to the World Bank. 17. Counterpart Contribution. No counterpart contribution is budgeted in estimating the project costs. Thus, all project expenses would be covered from the GEF grant funds. Any additional expenses that may arise, which were not budgeted for, will have to be absorbed by the Government of Sudan. 47 18. Disbursement Methods. The proceeds of the Grant will be disbursed in accordance with the disbursement procedures of the Bank and will be used to finance project activities through the disbursement procedures currently used: i.e. Direct Payment, Advances, Reimbursement and Special Commitment. Replenishment and reimbursement Withdrawal Applications will be accompanied by Statement of Expenditures (SOEs) and Statements of expenditure Subject to Prior review (SoPs) in accordance with the procedures described in the Disbursement Letter and the Bank's "Disbursement Guidelines". Interim Unaudited Financial Reports and Annual Financial Statements will be used as a financial reporting mechanism and not for disbursement purposes. The minimum application size for direct payment, reimbursement and special commitment will be the equivalent of 20 percent of the Advance ceiling amount. The Bank will honor eligible expenditures completed, services rendered and delivered by the Project closing date. A four months' grace period will be granted to allow for the payment of any eligible expenditure incurred before the Grant Closing Date and for the final audit. 19. Reporting on Use of Grant Proceeds. The project will submit bank statements and a reconciliation of the designated account together with the withdrawal application on a monthly basis or more frequently depending on the project's need for funds. For payments above the threshold indicated in the disbursement letter for each disbursement category, MoEFPD will submit a list of payments with records evidencing eligible expenditures (e.g. copies of contracts, invoices, and payment evidence). For payments below the threshold, MoEFPD will submit Statements of Expenditures (SOEs) listing the detailed payments made without attaching the supporting records. All supporting documentation for SOEs will be retained at MoEFPD and must be made available for review by the World Bank implementation support mission, Monitoring Agent (if any) and auditors (internal and external) on request. 20. Statement of Expenditures (SOEs). Necessary supporting documents will be sent to the Bank in connection with contracts subject to prior review or above the SOE thresholds, except for expenditures under Contracts with an estimated value of: (i) US$ 300,000 or less for works. (ii) US$ 200,000 for goods; (iii) US$ 100,000 or less for Consulting Firms; and (iv) US$ 50,000 or less for Individual Consultants, as well as incremental operating costs and training, which will be claimed on the basis of SOEs. 21. Supervision Plan. This is a decentralized project which will be implemented in Khartoum and in several localities by MoEFPD. The Bank's supervision will be intensive during the project implementation to ensure that the funds are used for the intended purposes and also to provide support as needed. During the first year, three supervision missions will be carried out to support the project implementation then adjust the supervision frequency in the second year depending on the risk assessment then. These supervisions efforts will comprise IFR reviews, audit reports reviews, field visits and assessment of internal controls. The outcome of supervision will feed into identifying weakness areas and work out relevant action plans in agreement with the project coordinator. A. Procurement Procurement capacity assessment 32. In 2009, the Sudan Country Integrated Fiduciary Assessment (CIFA) identified the main issues in public procurement at the federal and state levels as: (i) incomplete and outdated legal, policy and regulatory framework; (ii) weak procedures and practices, often applied in a discretionary and discriminating manner; (iii) inadequate human and financial resources; (iv) an underperforming private sector; and (v) inadequate legislation, practices and institutions to ensure integrity and transparency of the procurement process. 48 33. In 2010, Sudan enacted the Public Procurement, Contracting and Disposal law. Although Bank comment was sought on the Bill prior to its enactment, only some of the Bank comments on the draft Bill were incorporated. Thereafter, the Bank continued to assist the GoS to strengthen its public procurement system through the Multi-donors Trust Fund (MDTF) funded Public Sector Reform, Decentralization and Capacity Building Project (PSCAP) including: (i) equipping the General Directorate for Public Procurement, Contracting and Disposal, (ii) supporting the dissemination of the new Procurement law and Regulations, (iii) financing the preparation of a Public Procurement Manual, and Standard Bidding Documents (SBDs), and (iv) supporting the Training of Trainers (ToT) program. 34. Procurement for the SSNRMP will be carried out in accordance with the "Guidelines: Procurement of Goods, Works, and Non-Consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" and the "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits & Grants by World Bank Borrowers" both dated January 2011 as well as the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and Grants", dated October 15, 2006 and revised in January 2011. Procurement through National Competitive Bidding (NCB) shall follow procedures acceptable to the Bank including the use of national SBDs prepared to the satisfaction of the Bank and issued in the Arabic language. Additionally, as Sudan is one of FCS countries, paragraph 11 of Bank Operational Policy (OP) 10.00 will be triggered to allow the application of the flexibility detailed in the Guidance to World Bank staff: Simplified Procurement Procedures in Situations of Urgent Need of Assistance or Capacity Constraints, April 2013. 35. All the procurements for component 1 and 3 and part of component 2, will be done by the Project Coordination Unit (PCU) located in the Ministry of Environment, Forest and Physical Development (MoEFPD). Bulk of procurement of component 2 shall be conducted by the three State PCUs (SPIUs). The community (village committees) is expected to make small procurement of local goods under the sub-grants to the communities. 36. The procurement by the SPIUs is mainly shopping of goods and works. The Government has agreed to provide seconded staff to the three SPIUs to work as procurement officer. These staff will be trained in the Bank's procurement procedures by the Procurement Specialist (PS) of the PCU and would execute their procurement function under the guidance of this PS. The PIM will lay down simple procedure to be followed by the community to execute their procurement function. The SPIU will provide necessary guidance/support to the community in discharging their functions including procurement. 37. A preliminary procurement capacity assessment of MoEFPD, has identified that although the Ministry has some experience of national procurement procedures, it is not adequate. In addition, the Ministry has no experience of the World Bank procurement procedures. As Sudan is an FCS state, and noting that there is a lack of procurement capacity within the implementing agencies, the overall risk to procurement under the Project is rated High. The following risk mitigation action plan has been prepared in consultation with MoEFPD. Procurement Risk Mitigation Action Plan Risk Risk mitigation measures Responsibility Proposed Completion Date 1 The capacity at PCU will consist of one MoEFPD /PCU Effectiveness MoEFPD to execute contracted Procurement procurement of the Specialist. I project is very limited I I I 49 Risk Risk mitigation measures Responsibility Proposed Completion Date 2 Possible lack of The Project Implementation MoEFPD /PCU Effectiveness knowledge to Manual (PIM) will include /Bank stakeholders involved in the procurement section procurement and related clearly describing activities about various procurement arrangement, aspects of procurement role and responsibility, involved in the project. procurement methods etc. 3 Delay in posting of Assurance from MoEFPD MoEFPD Negotiation seconded procurement has been obtained that one staff to the SPIUs procurement staff would be seconded to each of the three SPIUs by negotiation. 4 The seconded This will be responsibility Project Continuous procurement staff to the of the project coordinator to coordinator! PS of SPIUs do not get closely monitor this activity. PCU sufficient training and Proper reporting system guidance by the PS of would be developed that the PCU to handle the any laxity on the part of PS procurement efficiently. would be immediately brought to the notice of project coordinator for corrective action. 5 The community may not The SPIUs with the help of PCU/SPIUs Continuous have any experience of PIM and in consultation handling procurement. with PS of PCU will provide necessary guidance to the community to handle procurement. for Component specific procurement Component 1: Institutional and policy framework: The procurement involved is mainly the consultancy services of firm and individual consultants. Besides this procurement of vehicles through UNOPS and office equipment by following shopping procedure is envisaged. Component 2: Community based sustainable management of rangelands, forests and biodiversity: Under this component the bulk of procurement will be done by the SPIUs which will mainly include shopping of goods and works. The community would also make some very small procurement of small goods following shopping procedure. Wherever justified they may resort to direct contracting in line with World Bank guidelines. Component 3: Project management: Under this component procurement of individual consultants for PCU are envisaged. Procurement and Selection Methods 38. Procurement of goods, works and non-consulting services will utilize methods such as International Competitive Bidding (ICB), NCB, Procurement from UN Agencies, Community Participation, Force Account, Shopping and Direct Contracting. Selection of consultants will follow 50 QCBS, QBS, Selection based on Consultants' Qualification (CQS), LCS, FBS, Selection of Individual Consultants and SSS. 39. Workshops, conference attendance and study tours will be carried out on the basis of approved annual/semi-annual work plans that would identify the general framework of training or similar activities, including the nature of training/study tours/workshops, number of participants, and estimated cost. 40. Operating costs, excluding salaries, bonuses, and fees for Government civil servants, would be incurred using procedures acceptable to the Bank. 41. Simplified Procurement Plan. The Borrower has developed a draft simplified procurement plan as per requirement of OP/GB 8.00 indicating procurements to be carried out over the first 18 months of the project. The procurement plan will consist of the procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements. The procurement plan will be updated at least annually, or more frequently as required, to reflect the actual project implementation needs and improvements in institutional capacity. 42. Threshold for each method of Procurement/Selection and for Prior Review. The recommended methods of procurement/selection and the prior review thresholds for the project would be as given below. The Bank's prior review requirements are stated in Appendix 1 to the Guidelines for Procurement and Appendix 1 to Guidelines for Selection and Employments of the Consultants. All Terms of Reference (ToRs) regardless of contract amount shall be subject to the Bank's Prior review. A. Procurement of Goods, Works and Non-Consulting Services Procurement Methods and Thresholds for Goods, Works and Non-Consulting Services Procurement Method Threshold (US$) Comment 1. ICB (Works) 5,000,000 Equivalent or more 2. ICB (Goods and non-consulting 500,000 Equivalent or more services) 3. NCB (Works) 5,000,000 Less than 4. NCB (Goods and non-consulting 500,000 Less than services) 5. Shopping (Works) 200,000 Equivalent or less 6. Shopping (Goods and non-consulting 100,000 Equivalent or less services) 7 Direct contracting Any value 8 Procurement from UN agencies Any value Prior Review Thresholds for Goods, Works and Non-Consulting Services Procurement Method Prior Review Threshold Comments (US$) 1. ICB (Goods, Works All Contracts and Non-Consultant Services) 2. NCB (Goods and Non- Equivalent or more than The first contract under each category consulting services) 500,000 will also be subject to prior review. 3. NCB (Works) Equivalent or more than . The first contract will also be subject to 5,000,000 prior review. 4 Direct Contracting All Contracts dealt by PCU 51 (Goods, Works and and above US$ 1,000 for Non-Consultant contracts dealt by SPIUs Services) and community. 5 UN Agencies All contracts 6 Shopping (Goods, None All shopping of goods and works shall Works and Non- be subject to post review except the first consulting services) one in each category. 7 Community None All contracts are expected to be of small Participation in value under shopping category. Procurement However, for direct contracting, threshold indicated at (4) above will be applicable. B. Selection of Consultants Selection Methods and Thresholds for Consultants Selection Method Threshold Comments (US $) 1. QCBS, QBS, FBS, Any value Selection Method will depend on nature and complexity LCS of assignment. 2. CQS 500,000 Equivalent or less 3 Individual Any value consultant 4 SSS Any value Prior Review Threshold for Consultants Selection Method Prior Review Threshold (US$) Comments 1. Competitive Methods (Firms) 200,000 Equivalent or more 2. Individual consultant selection 100,000 Equivalent or more 3 Single Source (Firms)/Individuals Any Value 43. Short list comprising entirely of national consultants. Short lists of consultants for Engineering and Contract Supervision assignment estimated to cost equal or less than US$ 200,000 equivalent and for all other consultancy assignments estimated to cost equal or less than US$100,000 equivalent per contract, may comprise entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. 44. Frequency of procurement supervision. In addition to the prior review supervision to be carried out by the Bank, the Bank shall conduct an annual post review of a sample of 20 percent of all post review contracts finalized under the project by PCU and SPIUs. For the procurement conducted by the communities post review of the contracts shall be done by the agency engaged to audit the project. The sample size of the procurement review shall be agreed by the Bank at the beginning of the exercise, which shall be based on the total number of the contracts done over the period of the review. However, the Bank team will also play a role in quality control and undertake sample spot checking to enhance the outcome of the annual independent review. 45. Simplified Procurement Plan. The draft procurement plan prepared by the Borrower is set out below: 52 1 2 3 4 5 6 7 Ref. Contract (Description) Estimated Cost Procurement Review by Expected Expected No. (US$) Method Bank (Prior bid-opening end of / Post) Date contract date 1 Seeds for forestry (Kassala) Shopping Post 12-Oct-2014 28-Nov- (SPIU) 45,000.00 2014 2 Seeds for forestry (Gezera) Shopping Post 20-Oct-2014 30-Nov- (SPIU) 45,000.00 2014 3 Seeds for Range (White Nile) Shopping Post 15-Oct-2014 2-Dec-2014 (SPIU) 40,000.00 4 Seeds for Range ( White Nile) Shopping Post 25-Oct-2014 2-Dec-2014 (SPIU) 50,000.00 5 Plastic bags for 3 SPIUs Shopping Post 14-Oct-2014 30-Nov- (NPCU) 50,000.00 2014 6 Nursery Plantation tools for 3 Shopping Post 15-Oct-2014 1-Dec-2014 SPIUs (NPCU) 50,000.00 7 Financial Management Shopping Post 1-Aug-2014 1-Dec-2014 software (NPCU) 50,000.00 8 GPS (NPCU) 15,000.00 Shopping Post 15-Jul-2014 15-Aug- 2014 9 GIS Software (NPCU) 80,000.00 Shopping Post 1-Jul-2104 1-Sep-2014 10 Vehicles: 4 Double Cap pickup UN Agencies Prior 1-Jun-2014 1-Jun-2015 4WD (NPCU) 316,000.00 (UNPOS) 11 Office Stationery (NPCU) 30,000.00 Shopping Post 1-Mar-2014 1-May-2014 12 Sand dunes fixation materials Shopping Post 15-Mar- 20-May- (SPIU) 15,000.00 2014 2014 13 Sand dunes fixation materials Shopping Post 1-Feb-2015 1-Apr-2014 (SPIU) 15,000.00 14 Mark Poles (Route Shopping Post 1-Dec-2014 1-Feb-2015 demarcation) ((SPIU) 25,000.00 15 Mark Poles (Route Shopping Post 10-Dec- 1-Feb-2015 demarcation) (SPIU) 25,000.00 2014 16 Office Equipement (NPCU) Lot1 : Computers Lot 2: Printers 15-May- Lot 3 : Scanners Lot 4: Fax machines Lot4: ax achnes50,000.00 shopping Post 1-Mar-2014 2014 Lot 5: Photocopiers Works 1 Construction of one Nursery 20,000.00 Shopping Post 1-Mar-2105 1-Jul-2015 (kasssala) (SPIU) 2 Construction of one Nursery 15,000.00 Shopping Post 10-Mar- 9-Jul-2015 (Wad Bugul) (SPIU) 2105 3 Construction of one Nursery 15,000.00 Shopping Post 1-Mar-2105 1-Jul-2015 (Aum Rimta) (SPIU) 4 Land Preparation Works 80,000.00 Shopping Post 1-Mar-2105 20-Jun-2015 (Kassala) (SPIU) 5 Land Preparation Works ( 85,000.00 Shopping Post 1-Mar-2105 1-Jul-2015 Wad Bugul) (SPIU) 6 Land Preparation Works ( 85,000.00 Shopping Post 1-Apr-2015 1-Jul-2015 Aum Rimta) (SPIU) Total 1,201,000.00 53 Consultancy Services 1 2 3 4 5 6 7 Ref. No. Description of Estimated Selection Review Expected Expected Assignment Cost (US$) Method by Bank (Prior Proposals Completion / Post) Submission date Date 1 NPCU Procurement IC Prior End of End of Specialist 30,000.00 November December 2 NPCU M&E Specialist IC Post End of End of 30,000.00 November December 3 Financial Specialist IC Post End of End of 30,000.00 November December 4 Environment and Social 30,000.00 IC Prior End of End of Specialist November December 5 NPC Project IC Prior End of End of Coordinator 48,000.00 November December 6 Diagnostic study IC post March 2014 June 2014 training needs to 50,000.00 institutional 7 Assessment of the CQS Prior March 2014 June 2014 Current Regulation 400,000.00 (Consultancy) 8 Information and CQS Prior March 2014 June 2014 knowledge management, 280,000.00 Assessment of land management practices & Communication plan 9 Integrated Land IC post March 2014 June 2014 Management Plan 30,000.00 Total 928,000 March 2014 June 2014 B. Environmental and Social (including safeguards) 46. Project Types and Location. The environmental and social safeguards issues of the proposed project are associated primarily with the activities of Component 2: Community based sustainable management of rangelands, forests and biodiversity. The major project activities under this component include reforestation of degraded forests through enrichment tree planting, rehabilitation of rangelands through planting of grass and fodder species as well as establishment of sand dunes. Linked with the soil and water conservation activities of forests and rangelands, the project will support community based livelihood activities. Activities to support local communities' livelihood includes poultry, bee keeping, gum production and collection of forest seeds and fruits. The project will be implemented in White Nile, Gezira and Kassala States. 47. Environmental Impacts. The project is category B. Activities under component 2 will have positive environmental by rehabilitating and restoring degraded rangelands and forest ecosystems. The project activities will bring several direct benefits to an estimated 50,000 people living in the three states by improving the sustainability of land and water management practices, introducing agroforestry systems, restoring and rehabilitating rangelands and forest reserves. Benefits are derived from improved ecosystems and overall better managed habitats. Casual labor and other livelihood opportunities will be created that benefit local communities. Some of the activities under component 2 such as small scale irrigation and establishment of nurseries may cause some minor and localized 54 adverse impacts. These adverse environmental impacts will be addressed by environmental and social management plans (ESMP) to be produced based on the guidance provided in the ESMF and PF. 48. Social Impacts. The social risks for the project primarily revolve around restriction to access to rangelands and forests to be restored. A Process Framework was prepared to identify access restriction and propose effective mitigation measures that each stakeholder has to adopt. 49. Stakeholder Consultation. Stakeholder consultations were carried out during designing of project activities as well as ESMF and Process Framework preparation exercise with the aim of explaining the objectives and scope of the project as well as to identify, discuss and respond to project issues of concern to different stakeholders. The consultation was conducted in all the three states with the participation of community leaders and community members from the potential project areas. Relevant Governmental and non-Governmental organizations at the national and state level were consulted, and contributed to the project design. 50. Key Measures to be taken by the Borrower to Address Safeguards Policy Issues. The Ministry of Environment, Forestry and Physical Development has prepared ESMF and PF to address potential adverse environmental and social impacts. The Ministry should recruit a safeguard specialist to ensure the effective implementation of the requirements of the ESMF and PF. Capacity building training on the ESMF and PF should be organized to Local Implementation Unit at the state level. Awareness creation on environmental and social impacts of project activities should be organized for participating communities. The ESMF and PF were disclosed in-country and at the Info Shop on October 22, 2013. 51. Mitigation Measures. The ESMF and the PF recommended mitigating measures aimed at ensuring sub-projects are executed in an environmentally and socially sound manner. Mitigation measures suggested in the ESMF are geared towards addressing potential environmental and social impacts arising from project activities such as small scale irrigation and nurseries establishment. The checklist of impact and mitigation measures for typical sub-projects, in the ESMF, will serve as a guide to develop location-specific mitigation measures during sub-project design. With respect to pest management, the operational policy for pest management will be followed and ways and means of using alternatives to herbicides and pesticides will be sought. 52. Capacity for Safeguard Implementation. Training to locality, and line ministry staff at the state level (in the three project states), and other stakeholders on issues of environmental and social safeguards is required. The training will largely focus on the processes and procedures of the ESMF and the PF. Topics to be covered include screening of sub-projects for environmental and social impacts, preparation of environmental and social management plans, community engagement techniques and monitoring and evaluation. C. Monitoring and Evaluation 53. The Monitoring and Evaluation system will be a result-based framework, conceived as a management tool. The M&E system aims at: (i) assessing implementation performance in relation to the expected project outcomes, outputs and budget; (ii) proactively identifying implementation challenges and taking corrective actions in a timely manner; and (iii) documenting lessons learned and incorporating them into decision making on project implementation and sustainability. The system will also incorporate monitoring the accomplishments of the targets as established by the GEF Biodiversity, Land Degradation and Sustainable Forest Management tracking tools. 54. The project M&E will be linked to the regional M&E system established for the SAWAP portfolio, through the Building Resilience through Innovation, Communication and Knowledge Services project (BRICKS). The BRICKS project will integrate M&E results from the Sudan project into the whole SAWAP portfolio. The project will also provide participatory training and expert 55 support to the PCU on the application of M&E tools and specially in relation to measuring biophysical change and carbon flux in land use and management systems implemented. Data Collection and reports 55. To monitor project performance, the PCU, SPIUs and other participants will collect project- specific data. MOEFPD state level PCU will be responsible for providing periodic monitoring data which will then be analyzed by the M&E specialist. Data will be disaggregated to allow for assessment according to gender and target vulnerable groups. Also, the project will use information and communication tools to involve communities in reporting their own data. 56. Monitoring and evaluation reports, including environmental and social monitoring results, will be prepared quarterly at the state levels and semi-annually at the federal level. The quarterly reports will be shared among the SPIUs, the TC and other key stakeholders. The semi-annual reports will be circulated to the PNSC and development partners. 57. The joint Bank- GoS semi-annual implementation support missions will assess the status of key project outcomes and update legal covenant compliance. The Mid-Term Review will be conducted two years after effectiveness to assess the project midway through implementation. Upon completion of the GEF operation, the Bank will review the results and prepare the implementation completion report. This will be submitted no later than six months after project closure. The project will also need to report at endorsement, midterm and closure using the GEF tracking tools for biodiversity, land degradation and sustainable forest management. 56 Annex 4: Operational Risk Assessment Framework (ORAF) SUDAN: Sustainable Natural Resources Management Project Stakeholder Risk Rating High Description: Risk Management: The project is multi-focal and multi-sectoral. MoEFPD The successful participation of the stakeholders in related projects facilitates incorporation of them in the is actively engaged in the project preparation. This proposed Project. Active participation in decision making, planning and monitoring of the project will engagement should be maintained and expanded to state increase ownership. A broader communication strategy will facilitate raising awareness and interest in and local Government and other potential partners. participating in project, activities. The institutional capacity building activity will help in addressing some of Inadequate or ineffective stakeholder participation and the capacity gaps. capacity could undermine success or sustainability of project activities. The design of the institutional and implementation arrangements took this risk into account in arriving at It was also noted that institutional capacity of project multi-sectoral National Project Steering Committee (NPSC) to ensure adequate representation, ownership and implementing agencies is limited. synergies among the different stakeholders. Also, the Technical Committee of the Project (TC) represents all The multi-sectoral nature of the development challenges stakeholders and will work closely with the coordination units at federal and state levels. MoUs with targeted by the proposed project involves coordinating institutions which are members to the NPSC will be signed for common understanding of roles and activities across a range of ministries, departments and responsibilities agencies at federal, state and local levels. Project implementation will be at risk because of poor coplemnation widcllbatrisk bauof po Resp: Stage: Recurrent: Due Date: Frequency: Status: coordination and collaboration among institutions Clet Ipmnaio0QurryInPges impemetin te pojet.Client Implementation 0 Quarterly In Progress implementing the project. Capacity Rating Substantial Description: Risk Management: Limited local technical and management capacity to The involved institutions have experience in the execution of donor funded projects. The project will support support project's implementation. MoEFPD, FNC, WCGA and RPA to address capacity gaps in the formulation, implementation and monitoring of policies, programs and projects for SLWM and biodiversity conservation initiatives and The Public Financial management (PFM) system is participation related to SLWM. reasonably well functioning but needs to be substantially revamped and modernized. A PFM action plan was agreed by stakeholders in 2010 to which the World Bank contributed technically. MoEFPD has acceptable financial management arrangements in place, which will be used to implement the MoEFPD has a limited experience and expertise in Project. The manual accounting system will be shifted to computerized accounting system within the first six World Bank procurement procedures and guidelines. months of implementation. Currently at federal level, there are no bidding documents, procurement manual, and procurement rules For the risks related to procurement, a Procurement Plan will be prepared. The project does not involve in acceptable to the World Bank. complex procurement. 57 Resp: Stage: Recurrent: Due Date: Frequency: Status: Client Implementation 0 Quarterly Not Due Yet Governance Rating Substantial Description: Risk Management: The country suffers from unclear and overlapping The proposed project has been designed to help address these risks by improving institutional performance, mandates of institutions responsible for various governance and multi-sector coordination. Among others, the project will facilitate the preparation of a components of the rural landscape and weak regulatory strategy with practical recommendations, measures and policies for effective cooperation at center-state-local compliance and enforcement. and community levels for the protection and conservation of Sudan's natural resource base. A preliminary assessment of issues exists in the country REDD+ proposal. Resp: Stage: Recurrent: Due Date: Frequency: Status: Client Implementation Quarterly Not Due Yet Design Rating Substantial intervention t Risk Management: .techologies Project resources will be used to provide technical assistance to train the project's beneficiaries in the have already been tested in other areas and abroad, but technologies and practices that the project aims to promote. The regional BRICKs project will provide some are new and poorly understood in the areas of lessons and experiences on practices. The project sites have been selected to be able to focus on comparable intervention. needs in practices. There is a potential risk that the local population would A communication strategy will be developed to raise awareness about the need to adopt SLWM and give higher priority to short-term livelihoods than to conservation practices. The strategy will explain that the project aims to provide long lasting benefits for the implementing SLWM and biodiversity conservation farmers, pastoralists and their families in terms of improved natural resources conditions. Some livelihood practices. measures related to NRM are built into component 2. Resp: Stage: Recurrent: Due Date: Frequency: Status: Both Implementation 0 Quarterly In Progress 58 Social and Environmental Rating Moderate Description: Risk Management: The environmental and social impacts of activities The project will provide additional support to the local PIUs through environmental and social safeguards under the SSNRMP are largely positive because of their consultancy services. Potential negative effects are expected to be localized and limited. The Process role in rehabilitating degraded forests and rangelands. Framework and ESMF have both been prepared in a timely manner. Impact and mitigation checklists are Some negative impacts can result from the construction provided in the ESMF as a reference guide for identifying and managing such impacts. Environmental and and/or rehabilitation of small scale investments in forest Social Management Plans (ESMPs) will be prepared and implemented, when necessary ecosystem rehabilitation and restoration, watershed and sustainable water management, rangeland management, and livelihood related activities. Resp: Stage: Recurrent: Due Date: Frequency: Status: Client Implementation 0 Quarterly Not Due Yet Program and Donor Rating Moderate Description: Risk Management: Limited collaboration and coordination with other Regular communications and meeting with representatives from donors of different projects will be held on related sector project and initiatives could waste regular basis. The PNSC will promote coordination and collaboration. There is long experience with donor opportunities for synergies. coordination in Sudan from the MDTF, and the project is designed to complement other initiatives in the sector, working closely with a specific set of donor and Government initiatives Resp: Stage: Recurrent: Due Date: Frequency: Status: Both Implementation Quarterly Not Due Yet Delivery Monitoring and Sustainability Rating Moderate Description: Risk Management: The decentralized nature of implementation involves Capacity building will be provided so the institutions involved will have the skills to conduct the project's substantial risk in monitoring and control. monitoring. The establishment of the PCU at the state level (SPIU) at each of the project states will facilitate integration of procedures among the States and the federal level including monitoring. The States have been selected due to their location, ease of access and commonalities. Lessons from similar projects are available and embedded in the project approach. Resp: Stage: Recurrent: Due Date: Frequency: Status: Both Implementation 0 Quarterly In Progress 59 Other Rating Substantial Description Risk Management Climate change, particularly erratic rainfall and drought The project will build capacities of local institutions and communities on the design and use of water harvesting may affect the results of the investment techniques and adopt most suitable water harvesting techniques to capture rain and runoff water. Resp: Stage: Recurrent: Due Date: Frequency: Status: Client Implementation 0 Quarterly Not Due Yet Implementation Risk Rating: High Description: The overall implementation risk rating is High primarily due to political risks in the country plus financial and procurement management risks. The Bank is taking proactive measures to mitigate these risks in particular the financial management capacity risks. 60 Annex 5: Implementation Support Plan SUDAN: Sustainable Natural Resources Management Project Strategy and Approach for Implementation Support 1. The strategy for Implementation Support (IS) has been developed based on the nature of the project and its risk profile, and aims at making implementation support to the client more flexible and efficient. Implementation support will pay special attention to the risk mitigation measures defined in the ORAF. 2. Procurement. Implementation support includes: (i) providing training to PCU staff; (ii) reviewing procurement documents and providing timely feedback; (iii) providing detailed advice on the Bank's Procurement Guidelines; (iv) monitoring procurement progress against the detailed Procurement Plan; and, (v) monitoring that implementation of contracts is compliant with the World Bank's fiduciary guidelines as well as with contract obligations. 3. Financial management. The FM Implementation support includes: (i) review of audit reports and Interim Financial Reports (IFRs); (ii) advice and training to PCU on FM issues as needed; (iii) provision of guidance on the Bank's fiduciary guidelines as well as procedures spelled out in the Project Implementation Manual (PIM) (iv) provision of timely follow up with PCU on issues arising, e.g. on accounting, reporting and internal controls; and, (v) participation in project supervision missions as appropriate. Based on the current risk assessment rating as Substantial, the project will be supervised at least twice a year and may be adjusted when the need arises. To the extent possible, joint on-site supervision missions will be undertaken with procurement, monitoring and evaluation and disbursement. 4. Environmental and social safeguards. The Bank team will supervise the implementation of all safeguard instruments and provide guidance to the PCU on the proper use of the ESMF and PF. In addition, capacity building activities in the areas of environmental and social assessment and management will be provided to implementing partners at national and local levels. Safeguards will be included in supervision missions. 5. Coordination with other Development partners. Implementation support will include promoting close coordination with other development partners, research institutions and NGOs involved in similar initiatives and operating in the area, such as IFAD and JICA. This support will also facilitate coordination and exchange of knowledge within the TerrAfrica platform and SAWAP. 6. Monitoring and evaluation. Implementation support will include supervision of the progress of project implementation against the indicators in the results framework. Training and capacity building will be provided to the PCU at national and state levels to strengthen their capacity in monitoring and evaluation. Mid-term evaluation will be conducted after two years of project implementation to assess progress and make adjustments, if any. Monitoring and evaluation will be included in supervision missions. Furthermore, project performance and results will be aggregated to report at the SAWAP Program level. Implementation Support Plan 7. World Bank staff based in the region as well as in Washington DC will participate in the joint implementation support missions and mid-term review. Formal implementation support missions and 61 field visits will be conducted twice a year. 8. Technical inputs. The project will be technically guided by: the TTL, a natural resources management specialist, a social specialist, an environmental specialist, a communication specialist, a procurement specialist and financial management specialist. Other Bank staff and/or consultants will provide technical support in areas such as SLWM practices, livelihood alternatives and protected area management. In addition, and as needed, the Bank will seek additional highly-specialized technical inputs from technical partners with whom close coordination and collaboration has been established. 9. Fiduciary requirements and inputs. Training will be provided on WB fiduciary and procurement procedures. Formal supervision on financial management and procurement will be carried out at least twice a year and may be adjusted when the need arises. 10. Safeguards. Environmental inputs will be provided by the Bank lead ecologist and other team members who are environmental and natural resource management specialists. The social development specialist in the team will provide timely implementation support on social aspects on a regular basis. Supervision will focus on implementation of the ESMF and RPF. 11. Operation. The project TTL will provide timely supervision of all operational aspects, as well as ensure coordination with the client and among World Bank team members. The TTL will lead the supervision missions, and conduct other missions to resolve operational issues, as necessary. Table 1. Implementation Support Plan Time Focus Skills Needed Projected Resource Partner Role Missions Estimate First Startup phase. Team leader, 3 $70,000 Coordination with key twelve Initiating key project safeguards, financial stakeholders, months activities and quality management, Initial work with control processes, M&E, procurement, communities in project environmental and social communications, core sites and Government safeguards, financial technical team skills, agencies management systems M&E. and procurement practices operating effectively 12-60 Monitor overall Team leader and 8 $225,000 Coordination with key months Progress, procurement Organizational, stakeholders, PCU will and execution of monitoring and prepare comprehensive contracts, Financial evaluation, project progress report Management, safeguards, financial in advance of each Procurement, management, mission, and field plan Environment and social procurement, (including the mid-term safeguards communications, core review) technical specialists Complet Final IS mission and Team leader, M&E 1 $60,000 PCU will prepare ion then ICR comprehensive project Review progress report in advance of the mission. 62 Skill transfers 12. Careful attention will be given to ensure that skills developed under the project are sustainably transferred to Government ministries and other key agencies. To achieve this, Government staff involved in project implementation and supervision missions will review progress made with respect to skills transfer. Table 2. Skills Mix Required for Project implementation support Skills Needed Number of Number Comments Staff Weeks of Trips per year per year Financial 1 1 FM implementation support mission will be Management consistent with a risk-based approach, and will involve a collaborative approach with the entire Task Team. Procurement 1 1 Procurement implementation support mission will be consistent with a risk-based approach, and will involve a collaborative approach with the entire Task Team. Project Management 12 2 Project implementation support mission will be (TTL, NRM, consistent with a risk-based approach, and will Environmental, involve a collaborative approach with the entire Task Social, Team (including procurement and Legal). communication, M&E specialists) 63 Annex 6: GEF Incremental Cost Analysis SUDAN: Sustainable Natural Resources Management Project A. Background context 1. The geographical location of Sudan subjects the country to the environmental challenges of the fragile Sudano-Sahelian and sub-Saharan African zones. Short variable erratic rainy seasons, arid lands, poor sparse vegetative cover and susceptibility to wind and water erosion, has help determined the vulnerability of the country. Beyond this, the growing pressure of both human and animal population over natural resources has resulted in desertification, land degradation, water pollution, soil erosion and nutrient loss and deterioration of biodiversity in large areas in the country. Furthermore, unplanned, non-sustainable and poorly managed uses of land and water have, along with natural climate variability and frequently occurring droughts, exacerbated the problem. The degradation of the country's natural resources has caused serious negative impacts on agricultural productivity and the livelihoods of the poor, particularly those that depend on livestock and rain-fed agriculture. The long periods of unrest also contribute d to environmental degradation; the high numbers of internally displaced people and refugees in Sudan (five million) and refugee camps and consequently negative environmental impacts, especially from deforestation for fuel wood. 2. Federal, state and local Governments and their constituencies are overwhelmed by the scale and complexity of the problems confronting production and conservation landscapes. Attempts at most of tiers of Government to address these problems have been generally faced by obstacles for the following reasons: (i) Lack of sufficient financial allocations; (ii) unclear and overlapping mandates of institutions responsible for various components of the rural landscape; (iii) insufficient technical capacity in these institutions; (iv) insufficient knowledge and updated data to address such complex issues; (v) absent or weak land-use planning; (vi) limited research capacity; (vii) weak regulatory compliance and enforcement; (viii) weak community involvement in prevention and restoration activities; (ix) insufficient attention to alternative livelihood issues; and (x) insufficient attention to transparent governance, corruption, and local participation. The different challenges are interwoven and require integrated solutions. 3. Forests. Sudan has an estimated total of 67 Million hectares (ha) of forest, wood and rangelands out of which 12 million ha are reserved forests. The forests are under pressure from encroachment, shifting cultivation, annual wild fires, illicit harvesting of wood fuel, poles and timber, and conversion to other competing land uses, such as agriculture, livestock grazing, settlements and industrial development. The main sources of finance for forest management, charges levied on the major forest products and services and state budget allocation to the forests administration, are not adequate to address the needs. 4. The Land-use, Land-use Change and Forestry (LULUCF) sector is responsible for most of the decrease in GHG emissions since 1995. Emissions have been reduced by almost 50 percent compared to 1995 levels, or almost 12 percent per year. This is a result of sharp reductions in forest and grassland conversion, coupled with the expansion in afforested areas and managed forested land. (Sudan second National Communication, SNC, 2012, HCENR). Much of the population relies on firewood; the value of total consumption of the country of wood at 0.73 m2 per capita per annum (FAO 1995) derived from the country's forests. Land-use, land-use change and forestry (LULUCF) are the main emitters of greenhouse gases (GHGs) in Sudan. LULUCF generate net C02 emissions of about 15,577 Gg (corresponding to more than 75 percent of total C02 emitted), according to Sudan's 64 Initial National Communication (INC) to the United Nations Framework Convention on Climate Change (UNFCCC), related to the expansion of agriculture in the absence of proper land-use and forest management planning, increased urbanization, grazing, and fuel wood production. 5. Land rights for the individuals and different groups are highly complex, confused, sensitive, and volatile. Individual property rights (freehold) developed for fields along the Nile and its tributaries in northern Sudan, which have been registered since colonial times and accounts for 0.2 percent of total agricultural land. The bulk of the land is, however, held under customary usufructuary rights (rainfed agriculture, pasture land and forests) based on the concept of tribal lands and exercised through the power of tribal leaders. 6. Protected Areas and biodiversity. Sudan currently has about twenty-four areas gazetted and declared protected areas, while an equal number of areas are proposed. The Rahad Game Reserve was opened to mechanized agriculture and human settlement, in the early 1990s. The Radoum National Park in South Darfur has recently lost many species including: elephant, hippo, Giant Eland, Hartebeest and Roan Antelope. Wadi Howar in the North and Jebel Al Hassania National parks were never established on the ground. The large Dinder National park became an isolated 'island' in serious land use conflict. 7. Until recently, the Sudan was one of the most important wildlife countries in Africa, but the civil wars in Southern Sudan and Darfur had serious impacts on the wildlife resources of these regions. In addition to armed conflicts, poaching, drought and desertification as well as unsustainable land use patterns have threatened its wildlife rich biodiversity. Droughts and famines of the 1970s and that of 1984 and the expansion of the semi-mechanized agriculture have also caused Sudan to lose a large amount of its wildlife. Aggressive trade has reduced the numbers of elephants. With the secession of South Sudan, the Sudan lost its main flagship taxa (elephant, giraffe, hippo, rhino, zebra, leopard, eland, etc.). Only a few of the Sudan protected areas have game scouts present, and as such the conservation status of National Parks is uncertain. 8. Land degradation. The country's soils can be divided geographically into sandy soils of the northern and west central areas, clay soils of the central region, and the laterite soils of the south. However, alluvial soils along the lower reaches of the White Nile and Blue Nile rivers, and in the delta of the Gash River in the Kassala area, are essential to agriculture and of economic importance. The clays in central Sudan are mainly used for agriculture, from Kassala through southern Kordofan. In the state of Gezira, cracking soils (that dry out and crack during the dry months to restore their permeability) are used for irrigated cultivation. East of the Blue Nile, large areas are used for mechanized rainfed crops. The vegetation can be divided into six principal types which in general follow the isohyets and form consecutive series from north to south : Desert; Semi-Desert; Acacia Short Grass Scrub; Acacia Tall Grass Scrub; Broad-leaved Woodlands and Forests; Swamps (permanent swamps, seasonally inundated land), Grassland and Mountain Meadow. On the clay plain, there is a continuing land degradation process, with estimates that overgrazing accounts for 47 percent of the clearance of natural vegetation, whereas mechanized cropping and woodcutting, and urban demand for charcoal account for 22 percent and 19 percent respectively. Unsuitable and damaging forms of land use are the main causal factors of land degradation and include over-cultivation, overgrazing, shifting cultivation or slash and bum techniques, tree felling and illegal logging. Climactic events and drought also play a major role. 9. The latest estimation of the land cover of the country indicated that some 50.7 percent of the Sudan surface area can be classified as bare rocks and bare soil mostly in the northern States; 10% 65 classed as trees, 11.8 percent as shrubby vegetation, and 13.8 percent as herbaceous vegetation. The agricultural land use is largely confined to the strips of suitable soils along the Nile and Atbara Rivers. Some 12.6 percent of the land of Sudan is cultivated, mostly under traditional rainfed agriculture. (FAO 2012) 10. Rangelands. Livestock management is very important in Sudan, with the second largest livestock inventory in Africa (after Ethiopia) and a large nomadic pastoral sector. Livestock contributes to 50 percent of the Agricultural local production, about 19.8 percent of the GDP and 20 percent of exports for non-oil products, and therefore plays an important role in food security and employment opportunities that contribute directly to poverty alleviation, and social and traditional customs. Rangelands cover an estimated area of 96.4 million ha (53.4 ha of grassland and 43.0 ha of woodlands containing scattered trees and shrubs, Afri-cover 2003), mainly in semi-desert and LRWS ecological zones that are characterized by variable and unpredictable rainfall. Sudan's total national herd is estimated in at 103.6 million head of livestock (sheep, cattle, goats and camels 8.3 million head of equine (donkeys and horses) and 36.6 million head of poultry (2010). Total requirement of animal feed is estimated at 93 million tons annually, with rangelands providing about 70 percent of the total feed requirement. At the same time, rangelands have a great diversity of forage plants genetic resources (704 plant species reported), and constitute the origin of many crops, but are under threat. Income from the sale of livestock is used to meet household food requirements, market goods, drugs, vaccines, salt, feeds, pay water fees and tax. In the Central and Eastern part of the country, pastoralism is particularly prominent in the White Nile State. Kassala State forms part of the large migration routes of cattle, sheep and goats. Open grazing is commonly practiced, since grazing and husbandry are generally practiced under communal ownership which lacks control and management, and often leads to the degradation of vegetation and soil and results in social conflicts. The nomadic life-style of the rural communities located next to forest land has also contributed to the depletion of resources as a result of such conflicts. 11. Water resources. The rainfall varies from zero in the northern desert to more than 1200 mm in the High Rainfall Woodland Savannah in the south western portion of the country. However, Sudan benefits from major water bodies, including the White Nile and the Blue Nile tributaries. 12. The White Nile flows out of the tropical rain belt of Central Africa from Lake Victoria, with relatively little inter-seasonal variation. The Blue Nile flows from the highlands of Ethiopia and is strongly seasonal, subject to the annual monsoons streaming in from the Indian Ocean, and traverses Gezira. The Atbarah River, the last tributary of the Nile before it reaches the Mediterranean, traverses the state of Kassala in north-central Sudan, is also seasonal. It is also dammed by the Khashm el Girba Dam near Kassala to provide irrigation, and construction of a twin dam is underway (Rumela and Burdana Dams). Both traditional rainfed and mechanized agriculture are practiced. 13. Regulatory and institutional framework. Governance of the socioeconomic and environmental developments including institutional capacity for proper management of natural resources is influenced by a poor coordination in regulations, sectoral policies and law enforcement, and a general lack of collaboration between the different institutions, as a result of the domination of sectoral policies and inadequate resources. Weaknesses are also observed related to uncertain land tenure, enforcement issues with lack of respect for rights to land; overlapping responsibilities, and limited experience in participatory decision making processes. While Sudan has an extensive legal framework for NRM, and is exerting efforts to address participatory forest management, the framework in generally outdated and not updated after the secession of south Sudan. Pre-colonial, colonial and post- 66 independence norms and regulations grounded in customary and statutory procedures have evolved in tandem, with little coordination (UNEP 2012). 14. Sudan is a party to the United Nations Framework Convention on Climate Change (UNFCCC) and the International Convention on Biological Diversity (CBD), and has ratified the United Nations Convention to Combat Desertification (UNCCD), the Kyoto Protocol as well as the Cartagena Protocol on Biosafety. The project is fully consistent with the national policy framework, including the National Action Plan to combat Desertification (1998) and the Sudan National Action Plan (NAP, 2006); and it supports the National Biodiversity Strategy and Action Plan (NBSAP, 2001), including (i) strengthening national institutions and integration of biodiversity policies in the national decision- making process, marketing incentives and strengthened synergies and collaboration: (ii) Expansion in establishment of biosphere reserves (in-situ and ex-situ conservation): and (iii) Policies and actions to ensure sustainable use of biodiversity. It would also underpin activities of the National Adaptation Plan of Action (NAPA, 2007) for Sudan. Fit with GEF Strategic Priorities 15. The proposed project contributes to the Land Degradation (LD) and Biodiversity (BD) Focal Areas as well as the Sustainable Forest Management cross cutting focal area (SFM). Within the Land Degradation focal area, the project will contribute to the 3rd Strategic Objective, LD-3: Reduce pressures on natural resources from competing land uses in the wider landscape and will contribute to achieving outcome 3.2: Integrated landscape management practices adopted by local communities. The project will directly address land degradation challenges in the targeted areas by promoting community-based sustainable land and water management practices and building/supporting existent enabling environments for sustainable natural resources management. Addressing these activities following the landscape approach will help to reduce pressure on natural resources from competing land uses. 16. The activities towards biodiversity conservation in the targeted protected areas (forest reserves) will contribute to the Biodiversity Strategic Objective 1: improve sustainability of protected area systems and specifically Outcome 1.1: Improved management effectiveness of existing and new protected areas. Besides contributing to the conservation of biodiversity in protected areas, the project will also intervene in production landscapes thus contributing to the GEF's BD strategic objective 2: Mainstream Biodiversity Conservation and Sustainable Use into Production Landscapes, Seascapes and Sectors and within Outcome 2.2: Measures to conserve and sustainably use biodiversity incorporated in policy and regulatory frameworks. These activities will aim to support Sudan to mainstream biodiversity conservation and sustainable use into the key production sectors within the larger productive landscape in association with agricultural project baselines. 17. Finally, the project will aim at reducing pressures on forest resources and generate sustainable flows of forest ecosystem services (Strategic objective SFM-1). The project will follow the landscape approach (promoted through the SFM strategy), which integrates people's livelihood objectives in the management of the different ecosystems within the landscape. The outcome to achieve with the project will be to have good management practices applied in existing forests (Outcome 1.2). Link with the Sahel and West Africa Program in support of the Great Green Wall Initiative 18. The project is part of the Sahel and West Africa World Bank/GEF Program in Support of the Great Green Wall Initiative approved by the GEF and LDCF/ SCCF Councils in May, 2011. The 67 Program addresses major issues related to land degradation, including food security, climate change mitigation and adaptation, to support sustainable development in 12 countries: Burkina Faso, Chad, Ethiopia, Mali, Mauritania, Niger, Nigeria, Senegal, Sudan, Benin, Togo, and Ghana. The project is directly contributing to the following key performance indicators (KPI): * KPI 1. Increase in land area with sustainable land and water management (SLWM) practices in targeted areas, compared to baseline (hectares, reported by crop, range, forest, wetlands, protected areas). * KPI 2. Changes in vegetation cover in targeted areas, compared to baseline (hectares). Baseline or Business-as-Usual (no GEF Scenario) 19. The development and environmental challenges facing Sudan are vast, exacerbated by the lengthy period of unrest and the recent secession of South Sudan, which has left the country in urgent need of revision of the legal, institutional system, capacity development and re-establishment of a functioning enabling framework for sustainable development. The baseline project is costed at around US$ $28 million over a period of around 5 years consisting of investments made by the national Government, targeted investments by donors and support from large cross-sectoral donor-funded national programs. 20. To address the challenges related to conflict and secession, the Sudan National Multi Donor Trust Fund (MDTF) has been the main vehicle for responding to a broad range of needs. Managed by the World Bank, the Sudan National Multi Donor Trust Fund has been instrumental in establishing a basis for development in the country over the last years. The MDTF-N was established in April 2005 following the Comprehensive Peace Agreement (CPA) which effectively ended 20 years of conflict in the country. The MDTF-N's programming priorities were based on the Joint Assessment Mission (JAM), and the goals of the MDTF-N centred on the consolidation of peace and pro-poor growth in an effort to reach the Millennium Development Goals (MDGs) and ensure a sustainable peace in the country, focusing many of the project activities on the Three Transitional Areas: Abyei, South Kordofan and Blue Nile. Working primarily through Government counterparts, the MDTF-N has implemented a portfolio of 15 projects worth US$584.63 million33 over a broad spectrum of sectors, including infrastructure, health, education, community development, agriculture, and public sector reform. The MDTF establishes a solid baseline for continued work in natural resource management. 21. The baseline and donor support in Sudan have been affected by the secession, and the national debt burden. For example, the GEF is funding the Protected Area Network Management project, with UNDP for Sudan, but which covers the newly established South Sudan. The Sudan external multi- lateral and bilateral debt (41.6 Bn$), most of which is in arrears, means that Sudan is cut off from much needed development assistance, exacerbated by the risk of continued tension. 22. However, a study of conflict drivers that threaten stability in Sudan in preparation of the Bank's Interim Strategy Note (ISN) concluded that inequalities in allocation of public resources and in access to natural resources are the main drivers of conflict, feeding into a potent mix of ideology, ethnicity and socioeconomic marginalization that threatens to pull the country further apart. The Government and development partners are therefore strongly committed to address the dynamics of natural resource management in Sudan. Without GEF and other external assistance, such post-conflict threats to the environment would not be addressed. Protected area management would likely continue to deteriorate, with limited or no incentives to creating wildlife corridors. Community partnerships for ISN (2014-2015), The Republic of Sudan, Report no. 80051-SD, 68 natural resource management in buffer zones and conservation of protected area would remain nascent and not include NRM. 23. To address the challenges emerging from the post-secession economic transition, the Government has formulated a three-year emergency economic recovery program, the "Salvation Economic Program" (2011-2013), and an Interim Poverty Reduction Strategy Paper (I-PRSP). The emergency economic recovery plan sets forth an ambitious goal of self-sufficiency for a number of food products such as wheat, sugar, and cooking oil. It also aims to increase exports of cotton, processed meat, gum arabic, and gold. Without support on NRM issues, such expansion may cause further pressure on the fragile environment. 24. Agriculture and livestock play important roles in food security and employment opportunities but with risk of land degradation. It is estimated that agriculture contributes 35-40 percent of GDP (with livestock accounting for 50 percent, export revenue and as key assets for some of the poorest pastoral and agro-pastoral households. Productive investments in agriculture and livestock development provide a reliable pathway to building confidence of rural communities in both central and decentralized institutions in a conflict-prone environment. The Government has identified the agriculture and livestock sector as a priority and has committed to spending 20 percent of public expenditure on agriculture and livestock infrastructure and technical innovations34 25. Without addressing the competition over access to natural resources, further conflict may arise at the local level because weak or non-existent institutions lead to ungoverned competition or unstable rule for sharing commons. The Bank study on conflict drivers revealed that the lack of clear demarcation and mapping of livestock routes was a key driver of conflict among pastoralists, agro- pastoralists and farmers. Given the lack of strong governance institutions for Sudan's renewable resources, biodiversity is threatened and climate change is likely to put further pressure on already fragile ecosystems and livelihoods (e.g., pastoralism and dry-land agriculture) that depend on natural resources such as water, pasture, and subsistence farming. As part of the baseline, the Bank has initiated a Review of Land Administration in Sudan (P143739), using the Bank's land governance assessment framework (LGAF) methodology to recommend an action plan to improve land governance in the country, related to (i) legal and institutional framework; (ii) land use planning, management and taxations; (iii) public land management; (iv) public provision of land information; and (v) land dispute resolution and conflict management including disputes over migratory livestock routes, grazing lands, water points and protected areas; and (vi) large-scale land acquisitions/land based investments. Women's land right are also largely discriminated against in customary and statutory laws. The Bank's assessment on gender mainstreaming, under the project Gender mainstreaming in Sudan (P120638), will provide useful lessons learned related to the current context in Sudan for integrating gender aspects in the project, including on how to conduct gender assessments; integration of gender in databases; working with livestock and gender, as well as good practices for gender in microfinance. 26. Concerned about continuing deforestation and forest degradation, the Government has initiated a request for support from REDD+, based on the country's particular circumstances and REDD+ potential. The draft Sudan REDD+ Readiness Preparation Proposal (R-PP) (June 2013) intends to The envisaged project Improving Agricultural Support Services in the Traditional Rain-Fed Farming Areas, originally intended in the SAWAP Program Framework Document as the baseline project for the proposed GEF project, has however been put on hold given the local situation in the last few years and pending the interim country strategy development. The baseline and cofinancing has been replaced with other initiatives at a similar level and scope. 69 subject the country's renewable natural resources particularly forests, woodlands, range resources and wildlife habitats, assessment of their present condition, to sustainable management, with the aim of conserving them and maximizing their direct and indirect benefits in a participative, transparent and equitable manner. A National REDD+ Program would be of significant importance to Sudan, a Least Developed Country with substantial biodiversity and natural resources and not an emitter of significance of Green House Gases. Sudan is among five African countries that have formally requested access to the FCPF based on their R-PP (Burkina Faso, Cote d'Ivoire, Nigeria, Sudan and Togo), of which the FCPF Participants Committee will decide on three countries for funding world- wide, in early December 2013. The likelihood of obtaining the requested 3.4M$ in FCPF funding is therefore uncertain at this stage. 27. The Bank's project Sustainable livelihoods for displaced and vulnerable communities in Eastern Sudan (P131640) aims strengthen the capacity of local stakeholders to plan and deliver services and sustainable livelihoods for displaced populations and vulnerable host communities in eastern Sudan. The project is catalytic by building the foundations for a larger scale project through analytic work, assessments and capacity building activities. As part of the baseline, the strategic thinking and comprehensive approach taking into account IDPs, refugees' and host communities specificity and socioeconomic environment is currently lacking in East Sudan and in Sudan as a whole. The Bank, through this initiative, will assist the Government of Sudan to go further than a simple humanitarian response. The initial phase of the project will develop the basic mechanisms and tools for full project implementation; update project design and costs based on detailed appraisals and analytical work; and negotiate a funding proposal to materialize the commitment already expressed by donors. The follow-up project which has a total estimated cost of USD 17 million will deliver basic services and infrastructure as well as means for sustainable livelihoods on the basis of the findings and mechanisms developed and piloted during the initial phase. The project is particularly relevant to the proposed GEF project activities in Kassala which borders Eritrea and has a number of IDPs. 28. One of the key baseline projects is the Capacity Development Project for Provision of the Services for Basic Human Needs in Kassala ("K-TOP"; Kassala Take Off Project), funded by JICA, to strengthen the capacity of the State Government of Kassala to provide public services of planning, water supply (sites of North delta, rural Kassala, Girba, Wad El Helew), agriculture and livelihoods, maternal and child health, and vocational training. The project supports populations around Kassala and Rural Kassala with horticulture; and flood irrigation in Rural Aroma (Gash river), as well as rainfed agriculture in Rural Aroma (East Atbara) and mechanized rainfed in Wad el Helew. 29. The GEF project will also be buttressed by Improving Livestock Production and Marketing Project - A Pilot (P123495) to improve livestock production and marketing in selected rainfed areas of Central and Eastern Sudan. The project intends to demonstrate different ways to deliver services and improve pastoralists' livelihoods, through four main components, including a (i) Livestock development investment fund; (ii) Privatization of Animal Health Services and Markets; (iii) Project Implementation and Studies; and (iv) Livestock Routes Demarcation and Rehabilitation. The Small Ruminants value chain in the Greater Darfur Region: Bottlenecks and investment needs (P145239), aims to determine the strengths and weaknesses of the small ruminants value chain, to ultimately increase competitiveness of this value chain, as part of the prioritization of the livestock sector as the backbone of the national economy. While the project does not overlap with the geographical zones of the proposed GEF project, the analytical and sector work to identify bottlenecks from the on-farm production to the processing and marketing levels will be relevant to the GEF project. The project will undertake a policy review; benchmarking and physical assessment of the infrastructure network; and assess the replication potential for the small ruminants value chain in a difficult recovery context. 70 31. The World Bank project Revitalizing the Sudan Gum Arabic Production and Marketing (P110588) supports financial services, water services, transportation, seeds and seedlings for re- farming gum gardens of the households, as well as capacity building of the Gum Arabic Production Associations (GAPAs) as a pertinent platform for revitalizing the gum arabic sector in different localities of the Blue Nile, Sennar, White Nile, North and South Kordofan States. The project has already developed a specific Management Information system (MIS) that has made remarkable progress. 32. The Government (RPA) is conducting projects related to: (i) rehabilitation (by re-seeding with or without fencing), maintenance and rational management of pasture utilization in different ecological zones to ensure sustainability and continuous access to markets; (ii) encouraging and sustaining effective role of traditional institutions, voluntary and public organization in pastoral resources management; (iii) encouraging appropriate sustainable communal rangeland management practices and technologies; (iv) developing rangeland monitoring structure; (v) supporting the establishment of fire-lines for protection of natural grazing areas; (vi) demarcation of livestock routes; (vii) conserving and developing gene banks for the indigenous crops, plants including forest trees and shrubs, grasses; and livestock species to protect them against extinction. 33. Collaboration with GEF projects. The GEF project will build on and collaborate with related GEF project in the country. Specifically, the Sudan Watershed Management Project (P111330) under the Nile Basin Initiative will provide lessons and expertise related to watershed management as well as collaboration with the Ministry of Water Resources. The project works on the Lower Atbara watershed which is related to one of the project sites in the Kassala region. After the secession, the project also works in sub-watershed management activities in and around the Dinder National Park area. The remarkable progress in the scaling up and uptake by communities of soil and water conservation activities and achievement of annual targets in the project indicates high community demand and potential impacts for SSNRM. The Ministry of Environment, Forestry and Physical Development (MOEFPD) is also working with UNEP on a project proposal to carry out a national wetland inventory. 34. The Butana Integrated Rural Development Project (IFAD) with the GEF Integrated Carbon Sequestration Project, aims at promoting a climate-friendly rural development path in Central and Eastern Sudan by increasing the carbon stock and reducing net GHG emissions through reforestation and sustainable forest management, and through promoting sustainable energy from biomass. This project will provide important lessons to the proposed project in terms of reforestation, agroforestry and water harvesting technologies. As this project is executed by the FNC and the Higher Council for Environment and Natural Resources, it will allow coordination related to forest management. 35. The project will complement several GEF-UNDP projects focused on adaptation, such as the Implementing NAPA Priority Interventions to Build Resilience in the Agriculture and Water Sectors to the Adverse Impacts of Climate Change (LDCF, #3430), and Climate Risk Finance for Sustainable and Climate Resilient Rainfed Farming and Pastoral Systems (LDCF #4958) in Northern Kordofan, and Gedarif. Both are executed by the Higher Council for Environment and Natural Resources (HCENR). 71 GEF Alternative and Increment 36. The proposed project will address land degradation challenges in Sudan by promoting a landscape approach to natural resources management and conservation of biodiversity. These activities will be implemented in selected States, namely Kassala, Gezira and White Nile. The project will also strengthen select policy and regulatory frameworks, remove critical knowledge barriers, and develop institutional capacities creating an enabling environment for the on-the ground activities. 37. The GEF alternative will address a narrow window of opportunity to manage the transition from a post-conflict situation to more sustainable development. It will bridge a crucial gap between the earlier emergency focused trust fund to a partnership based around long-term economic and sustainable development with environmental considerations. This will be key to the future of biodiversity and forest conservation in Sudan. In addition, GEF support will help build the institutional capacity of the Government to support local SLWM development in a manner that is participatory and community-based, which will help address underlying roots of conflict. The GEF alternative will consist of three components: (i) Component 1: Institutional and Policy Framework; (ii) Community based sustainable management of rangelands, forests; and biodiversity (iii) Component 3: Project management, Monitoring and Evaluation. 38. Component 1: Institutional and Policy Framework. The project will finance activities to strengthen policy and regulatory frameworks for biodiversity conservation and SLWM, remove critical knowledge barriers, and develop institutional capacities in key forestry and wildlife, land management and range and pasture sectors, creating an enabling environmental for the on-the ground activities. Without GEF support, there will not be any significant effort for synergies and inter- ministerial collaboration around integrated landscape planning, but support would consist of isolated sector interventions. With GEF funding, Sudan can address key gaps in its institutional and legislative framework as drivers of local level natural resource management, and reestablish the capacity of national institutions to secure ecosystem services in productive landscapes, rangelands and forested areas by promoting update of SLWM practices and approaches that have environmental benefits. 39. The GEF support will enable Sudan to benefit and capitalize on accumulated acquired and traditional knowledge in Agro-forestry, Agro-silvo-pasture and mobilization of peoples' efforts in management of natural calamities and coping with events, and establish a foundation for knowledge sharing on SLWM, which has not been undertaken on a systematic basis so far. Further, land use planning, tenure and administration and key value chains (gum arabic, ruminants) will be informed by sustainable practices. The GEF support will ensure that relevant national policy framework is grounded in local experience from component 2. 40. The enhanced capacities from component 1, especially at decentralized level, will be applied to manage investments that will further promote environmentally sustainable practices (component 2), in tandem with activities to support local economic development. Related capacity will be enhanced in relevant Ministries and departments, especially focused on decentralized level. GEF support will build essential expertise in local environment projects and safeguarding the environment. Without GEF funding, donor support is likely to center on minimum levels of post-conflict transition political and basic services at the centralized level, without adequate attention to environmental concerns. 41. Component 2: Community based sustainable management of rangelands, forests and biodiversity conservation activities in targeted States. The project will promote wider adoption of 72 community-based SLWM practices in forests and rangelands in the targeted communities, particularly: forest ecosystem rehabilitation and restoration through reforestation, rehabilitation and gazetting of forest reserves; sustainable water management community based practices; rangeland management activities; and promotion of alternative livelihood activities diversifying environmentally sound sources of income. In addition, the investments conducted in specific areas will be integrated within ecosystem and land management plans to be designed, developed and implemented by the project. Sustainable plans of protected areas and buffer zones and supporting activities will ensure that agricultural productivity and livestock management are pursued sustainably in the context of these forest reserves. Finally, all the above activities will be supported by capacity building for the participant communities. 42. The GEF increment will ensure that funds from GEF focal areas will incorporate integrated ecosystem management planning, appropriate management and sustainable technologies, and community and Government capacity building. The GEF funds will be deployed strategically through in select States and zones based on ecological needs and priorities. The Government and the Project have identified target zones of intervention: (i) the ecological complex Telkuk in Kassala; (ii) two forest reserves and surrounding buffer areas in Gezira; and (iii) White Nile State. Without the GEF support, these forest reserves and their flora and fauna would further deteriorate through encroachment of agriculture, human activity and livestock, or be subject to support without the guidance of ecosystem management plans or without integrating ecological dimensions. Vulnerable communities and IDPs would continue to exploit natural resources without due care of environmental sustainability. 43. GEF resources will add value to the baseline activities in order to achieve global environmental benefits. The project will facilitate a variety of sustainable land and water management practices such as soil conservation techniques, crop and rangeland management, agro-forestry practices, water harvesting and improved livestock management activities. Community based natural regeneration will also be supported contributing to reducing land degradation in the targeted areas. The project is expected to contribute significantly to addressing the barriers to sustainable SLWM and biodiversity conservation in a complementary manner to the interventions by other initiatives in the areas. The GEF innovation and testing provided by GEF support would allow further replication in other regions and areas. 44. The project is expected to benefit biodiversity conservation in the following ways: * The gazetting of forest and rangeland reserves will help protect the existing native woodland, savanna, and grassland habitats (even though they are somewhat modified by livestock grazing and browsing). In particular, the gazetting would help prevent these areas from being converted to large-scale cultivation. * The restoration of native vegetation-through reforestation (with local and indigenous species), enrichment planting, natural regeneration, sand dune stabilization, and effective management plans to ensure that grazing and wood collection activities are sustainable-is expected to benefit biodiversity by creating and enhancing the habitats for many wild species. Rehabilitating ecosystems is expected to create suitable conditions for the return of wildlife. * An increase in both forest cover (area) and quality (no longer over-exploited and therefore richer in species), will create and/or increase ecological niches for ecologically important species. 45. In terms of desertification, the rehabilitation and reforestation activities, the development of windbreaks, agroforestry and the input on water harvesting will contribute to soil formation, enhance organic soil fertility and erosion control, reducing sand dune formation and advancement. The increase 73 in soil organic matter will help to maintain soil humidity and avoid run-off, especially on clayey soils. The crown cover will not only reduce the erosive impacts of rain and wind, it will also shelter the soil from the sun, thus reducing evaporation. 46. The proposed project will also contribute to strengthening sustainable forest management and increased forest regeneration capacity. Finally, while the carbon potential for drylands is not as impressive as those for humid systems, they are nonetheless valuable, as carbon sinks and an indicator of overall ecosystem protection against desertification and land degradation. 47. Estimation of Carbon Dioxide Balance from SFM and SLM Elements of Project. Climate change benefits are expected to be achieved through conservation of existing carbon stock (forest management), expansion of carbon stock (reforestation) and increase in the soil organic carbon. Under the baseline scenario, the current estimated rates of deforestation and forest degradation would prevail, with a resulting loss in forest areas and reduced forest carbon stocks on the reduced forests. The project is targeted sustainable forest management activities on 104,000 ha of woodland. This woodland is subject to pressure from deforestation (i.e., conversion of forest land to land under other uses) and forest degradation (ie., reduction of standing stock on remaining forest land). The FAO estimates that current woodlands in Sudan has an average standing stock of carbon of 20 t C/ha (Sudan REDD+ R-PP, 2013). With the current deforestation rate of 2.4 percent per annum (FAO, 2011, Table 2), over ten years the 104,000 ha targeted under the project would be reduced to 81,236 ha. Across the forest-land, this would indicate that the total lost carbon would come to 455,260 tonnes or 1.7 million tonnes of C02. (Source: FAO, 2011. State of the World's Forests, 2011. Rome: FAO) 48. The project scenario seeks to reduce the rate of deforestation and degradation from 2.4 percent per annum with a half by promoting sustainable forest management practices. Thus, the loss in forest area and in standing stock on that forest area would be reduced. After ten years of these sustainable practices, the total loss of C from the original 104,000 hectares would be 227,780 tonnes of carbon. This improved forest management scenario represents a savings in C02 stored in the targeted forest areas of 830,000 tonnes after ten years. 49. Component 3: Project management, communications and Monitoring and Evaluation. The component will support the project's management, monitoring and evaluation as well as communication activities. The GEF increment will enable the project and the MoEFPD to manage its support and incorporate monitoring and knowledge sharing related to SLWM and biodiversity conservation. It will build on mechanisms in measurement of environmental degradation from related projects regarding monitoring, such as the Rehabilitation Program of the Nabag Forest, which found that remotely sensed data together with field data were useful and effective in estimation of forest volume parameter in Sudan. Matrix of GEF Incremental Costs Category Estimated Cost National and local benefit Global Environmental Benefit (US$ Million) (GEB) 1. Institutional and Policy Framework Baseline MOEFPD: 0.75 Some management capacities No significant global WB: 0.5 (AAA) enhanced for national environmental benefit. WB: Gum stakeholders, mainly of other Continued fragmentation of Arabic (2) Ministries. national framework for SLWM. With GEF GEF: 1.5 Increased capacity on SLWM Improved national and alternative increment technologies and approaches at all institutional capacity to include 74 Category Estimated Cost National and local benefit Global Environmental Benefit (US$ Million) (GEB) levels; and awareness through NRM in local development communication on NRM. planning. Improved coordination between Areas under sustainable land authorities. management, ecosystem and Established awareness campaign sustainable forest management established and information (SFM). Improved availability disseminated, and access to information and lessons learned from SLWM practices addressing barriers. Reformed legislative and regulatory framework for the forest reserves. Improved management and disseminated. nadministration of PAs. 2. Community based sustainable management of rangelands, forests and biodiversity conservation Baseline JICA: 20.3 Reduced ecosystem goods and No significant global MOEFPD: 0.75 services derived from forest environmental benefit WB 3.08 reserves Some socioeconomic benefits, mainly investment in social and productive infrastructure, with limited attention to natural resources and sustainability. With GEF GEF: 5.23 Direct investments in NRM and Prevention of further land alternative increment SLWM. conversion and land Community plans incorporate fragmentation. NRM and sustainability. Increased vegetative cover and Forest, protected areas, strengthened local ecosystem agricultural lands, protected areas services, conservation of wildlife buffer zones are better managed populations and effective under management plans. protected area management. Improved capacities on SLM will create global environmental benefits over time such as increased sequestration of carbon. Reforestation, restoration and/or protection of ecologically sensitive areas, forest and _____________ ___________________________ biodiversity. 3. Project management, Monit ring and Evaluation Baseline MOEFPD: 1.5 Project management and No significant global monitoring of results for project's environmental benefit ImprovdcapaitiesprogressonS With GEF GEF: 1.0 Improved management, Global environmental benefits alternative increment communications and monitoring such as land under increased 75 Category Estimated Cost National and local benefit Global Environmental Benefit (US$ Million) (GEB) for key environmental indicators. availability of SLM. Baseline 26.08M GEF Increment GEF: 7.73 Total 33.81 76 Annex 7: Economic and Financial Analysis 1. The SSNRMP will make the natural resource base of the target area more sustainable, increase opportunities for improving livelihoods and provide concrete socioeconomic benefits to communities living in the project areas. The implementation of SLWM practices will offer a series of advantages to local communities such as improved soil fertility, increase in agricultural productivity, fodder availability, and improved access to water resources. In addition, the implementation of SLWM practices will enable local communities to adapt, and become more resilient to climate change by restoring productive natural resources and applying climate friendly practices. 2. The paucity of robust, reliable environmental database in Sudan, and the difficulty in monetizing environmental and social benefits, such as conservation of biodiversity, soils and other ecosystem services, exacerbates the difficulty of valuing many of the project benefits. On the other hand, given the fact that the approach to be adopted is demand-driven and that investments are not pre- identified, ex-ante cost-benefit analysis and rate of returns cannot be fully assessed at entry. Moreover, due to the country's security situation it was not possible to undertake the field work that would have provided the data and information necessary to conduct a thorough economic and financial evaluation of the proposed project investments. Thus the project extrapolated the economic and financial benefits of the proposed project based on evidences from SLWM projects implemented in the Sudan and other Sahelian countries with similar biophysical and socioeconomic situation. 3. The Sudan Community Watershed Management Project, which has similar activities with the proposed project, has conducted financial and economic analysis. The analysis found that innovations to be introduced for crop and livestock models are expected to increase the yields of representative crop varieties by 50-200 percent. Improved mixed farming systems are expected to see financial benefit increases from 200-260 percent (in Lower Atbara, which has a similar ecosystem to the proposed SSNRMP sites). The Economic Rate of Return (ERR) from the selected farm models was also positive, ranging from 32-50 percent, the net present value (NPV) is positive, and the benefit-cost ratio (BCR) is greater than one. 4. A recent farm and plot level study by the International Food Policy Research Institute (IFPRI) on 1,810 households in the Nile Basin reported that productivity had increased by 15-20 percent after year 7 in plots that received maintenance after installation (bund, stone terrace) (Schmidt and Tadesse, 2012). Another micro-level study in the Nile basin on 1,000 households also found a 31-35 percent difference in productivity between adopters and non-adopters of SWC structures (Di Falco, Verenesi and Yesuf, 2011). 5. The proposed Ethiopia Sustainable Land Management Project II computed the net present values (NPV) and internal rates of return (IRR) for a medium-term (25 years) planning horizon. It was found that a scenario of a more integrated approach where physical structures are integrated with high- value fodder on bunds, soil fertility management measures and intercropping has the highest overall Economic Rate of Return (ERR) of 75 percent. 6. An assessment of the economic and financial viability of a range of SLWM technologies conducted by the on-going Mali Agricultural Productivity Project found an economic rate of return of 34 percent and a financial rate of return ranging from 27 percent to 64 percent depending on the agro- ecological zones for targeted technologies (with a 12 percent discount rate). A cost-benefit analysis of the Mali Natural Resources Management in a Changing Climate, found that the estimated economic rate of return runs from 18.7 percent for small-scale irrigated vegetable production (one hectare), 53 percent for small ruminant fattening, and 31 percent for beekeeping for honey harvesting. The 2011 study entitled "Improving governance for scaling-up SLM in Mali" includes an economic evaluation of a limited number of SLWM practices. This study reported that on average, rotational grazing 77 increases the forage biomass by 7-20 percent. The improved quality of pasture would allow a farmer with a 50-cattle herd would secure an average net present value (NPV) about US$520 per year through rotational grazing. These results show that carefully targeted SLWM investments would help to increase crop yields and livestock productivity. These technologies will help to improve the livelihood of farmers and pastoralists of the targeted communities through increased food security and income, thereby increasing their capacity and resilience to cope with the adverse consequences of climate variability and change. 7. In addition to the direct and quantifiable economic and financial benefits accruing to local producers, the implementation of SLWM technologies will generate multiple ancillary environmental benefits. The socioeconomic and biophysical characteristics of the Sahelian countries predispose them to be disproportionately affected by the adverse effects of climatic variations and change. Deforestation and forest degradation, recurrent droughts, desert encroachment, decreasing quantity and quality of surface and ground water resources, loss of biodiversity and declining soil fertility contribute to the increasing vulnerability of the country's natural resource base, ecosystems and socioeconomic systems. This vulnerability generates high economic costs to the economy, especially when extreme climatic events such as droughts and floods hit. 8. Expanding the use of SLWM practices including sustainable forest management, agro-forestry, integrated soil fertility management, restoration of rangelands, and sustainable management of agricultural landscapes will help to increase the resilience of the socioeconomic systems and ecosystems in the targeted areas. The benefits include: (i) increased primary production of ecosystems, (ii) increased biodiversity, (iii) increased recharge of ground water, and (iv) increased carbon sequestration (forest and soil). These investments in SLWM also help the targeted areas to make a transition toward long term resilience by strengthening the financial, economic, environment and natural resource assets of the targeted areas. 9. The project management cost represents less than 5 percent of the total budget allocated. Monitoring and evaluation accounts for about 8 percent of the total project budget, out of which a significant amount will be used for capacity building. Furthermore, the estimated management cost for the project is substantially less than compared to other similar projects in Sudan. Cost efficiency will also be achieved through close working relationship with the existing Community Watershed Management Project. 10. The Project's expected contribution to the country's socioeconomic development. Through expanding the adoption of sustainable land and water management (SLWM) practices, the project will make the resource base of the target area more sustainable, increase opportunities for improving livelihoods and provide concrete socioeconomic benefits to communities living in the selected States. The implementation of SLWM practices will offer a series of advantages to local communities such as improved soil fertility and fodder availability. In addition, the implementation of SLWM practices will enable farmers and communities to adapt, and become more resilient to climate change by restoring productive natural resources and applying climate friendly practices. The project also seeks to generate knowledge and capacities across multiple stakeholder groups on livelihoods generation. By improving the natural resource base, generating livelihoods and reducing vulnerability the project contributes directly to socioeconomic development in the targeted areas. The project will also support the Government and particularly those sectors involved in natural resources management and who will benefit from institutional and technical capacity building for policy formulation, implementation and enforcement. 11. The rationale for the public sector provision: The involvement of the public sector in Sudan is critical in this sector for a number of reasons. Formal market economies have limited suitability in 78 protecting the global environment. It is therefore important that the government help to foster an environment more conducive to sustainable economic development and use of natural resources. Given the existing fragility and the effect of conflict on the natural resource management, the government has an important role to play in the transition to a more sustainable and stable economic development and conflict resolution of land use. This project recognizes the important role public sector has ensuring equitable distribution and access to public services and valuation of ecosystem services. Further, public sector leadership is essential because protected areas and communal lands in Sudan are vested in government ownership. 12. The value added of the Bank's support: The Project is part of the World Bank's commitment to the GEF-WB Sahel and West Africa Program (SAWAP) which supports the Great Green Wall Initiative (GGWI) which was endorsed by the Sahel Heads of State. Additionally, the project builds on the TerrAfrica Platform for sustainable land and water management (SLWM). TerrAfrica is an African-driven global partnership program to scale up sustainable land and water management across sectors in over 23 Sub-Saharan countries, by reinforcing investments, institutions and information at country and regional levels. The project is therefore a key building block in the Bank's strategic and programmatic approach in addressing sustainable development, climate-smart agriculture, resilience and across the Africa region. In this regard, the World Bank is bringing international expertise on SLWM through the engagement in SAWAP and TerrAfrica to benefit this project. The proposed Project is also important for the Bank's engagement strategy for Sudan, as outlined in the second substantive pillar of the ISN for FY14-FY15, as it will contribute to ISN Pillar 2: Address socioeconomic Roots of Conflict, which includes sustainable natural resource management, using community-driven development. The project will also contribute to the cross-cutting theme of Governance and Gender that aims to mainstream gender to improve women's access to public resources and opportunities. Funds are provided through a GEF grant, and an Incremental Cost Analysis reflecting GEF value added following GEF principles is included in Annex 6, and global environmental public benefits. It is expected that improved land husbandry, integrated ecosystem, landscape management and reforestation will improve the resource base of the population as a whole, and respond to the global emerging challenge of climate change. 79 Annex 8: Documents in project files SUDAN: Sustainable Natural Resources Management Project 1. World Bank Documents related to the project * GEF Program Framework Document (PFD) for the Sahel and West Africa Program in support of the Great Green Wall Initiative. May 2011. * Project Concept Note, July 2011. * World Bank. 2012. Sudan Sustainable Natural Resources Management Aide Memoire - Project Preparation Mission Khartoum, June 17-30, 2012 * Sudan Sustainable Natural Resources Management Aide Memoire - Follow-up mission on Project Preparation. September 30-October 5, 2012. * Sudan Sustainable Natural Resources Management Aide Memoire - Pre-Appraisal Mission. March 12-21, 2013. * Project Appraisal Document for Building Resilience Through Innovation, Communication And Knowledge Services (BRICKS) Project for the Sahel and West Africa Program in Support of the Great Green Wall Initiative (SAWAP). May 2013. * Interim Strategy Note (ISN), September 2013 (Report No. 80051-SD). 2. Reference Documents Abdel Ghafar M. Ahmed . 2008. Transforming Pastoralism: A case study of the Rufaa El Hoi - ethnic group in Blue Nile State, Sudan. University of Ahfad for Women and CHR Michelsen Institute (CMI). Badri, Suad. 2012. Sudan Environmental Threats and Opportunities Assessment with Special Focus on Biological Diversity and Tropical Forest. USAID, Washington, DC. El Gunaid F. Hassan, Elhag A.M.H., and Dafalla M.S. 2013. Effect of Human Activities on Forest Biodiversity in White Nile State, Sudan. International Journal of Innovation and Applied Studies. ISSN 2028-9324 Vol. 2 No. 4 Apr. 2013, pp. 547-555. http://www.issr-journals.org/ijias/ Heckel, J.-O., Wilhelmi, F., Kaariye, X.Y., Rayaleh, H.A., Amir, O.G. & Kiinzel, T. 2008. Nanger soemmerringii. In: IUCN 2012. IUCN Red List of Threatened Species. Version 2012.2 FCG International Ltd. 2013. Mid-Term Review Of The Finland Sudan Technical Assistance Within The Framework Of Eastern Nile Watershed Management Project (ENWMP/CWMP): Final Report. Fenton, Dennis and Abu El Gasim Abu Diek. 2013. Report of the Mid-Term Evaluation of the Sudan NAPA Follow-up Project: Implementing NAPA Priority Interventions to Build Resilience in the Agriculture and Water Sectors to the Adverse Impacts of Climate Change in Sudan. Financed by GEF. (UNDP). Forest National Corporation (FNC), International Fund for Agricultural Development (IFAD). Integrated Carbon Sequestration Project in Sudan. Project Document. Financed by GEF. Final Version. June 2012. IFAD. 2006. Republic Of The Sudan Butana Integrated Rural Development Project: Appraisal Report. 80 IUCN SSC Antelope Specialist Group 2008. Eudorcas rufifrons. In: IUCN 2012. IUCN Red List of Threatened Species. Version 2012.2 IUCN SSC Antelope Specialist Group 2008. Gazella dorcas. In: IUCN 2012. IUCN Red List of Threatened Species. Version 2012.2. Lee, Taehyun; Geiger, Michael; Alamir, Mosllem; Nishiuchi, Toru. 2013. Sudan economic brief- recent economic developments - second semester 2012. Issue no. 2012-02 (December 2012). Washington DC : World Bank. Mahgoub Zaroug. 2007. Country Pasture/Forage Resource Profiles - Sudan. Mohamed Osman Hussein (complilator). 2012. Country Programme Paper (CPP Sudan). To end drought emergencies in the Horn ofAfrica. 18 October 2012 The World Bank. 2010. Climate Change and Development, The World Development Report. United Nations Environment Programme (UNEP). 2007. Sudan Post-Conflict Environmental Assessment. Nairobi, Kenya. UNEP. 2012. Environmental governance in Sudan - an expert review. Nairobi, Kenya. Government of Sudan (GoS). 2013. Sudan REDD+ Readiness Preparation Proposal (R-PP). Khartoum, Sudan. http://www.worldbank.org/en/country/sudan/overview GoS and UNDP. 2009. Kassala State: Situation Analysis. UNDP. MDG Report 2013: Food Security in Africa: Issues, challenges and lessons. United Nations, World Population Policies, 2009 81 25- Lae3oE T 2 *E ARAB REPUBLIC Aon Lake 35E had SUDAN OF EGYPT Nasser Wadi Halfa ake Nubia PROJECT WILAYAH (STATES) N u b i a n a CITIES AND TOWNS LIBYA D esert Red 9 WILAYAH (STATE) CAPITALS Sahara D esert NATIONAL CAPITAL Sea RIVERS -NORTHERN MAIN ROADS Kerma RED SEA 4 Port Sudan RAILROADS Dangola. 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