M-tj. Vol.1I1999 gl%stSEN{> ^L g S s > X " 7 . . .. . . . I t UEPR *Jk~~~~~~~~~V A~~~~~~~~'k THE PURPOSE OF THE GLOBAL ENVIRONMENT FACILITY The Global Environment Facility was established to forge international cooperation and finance actions to address four critical threats to the global environment: biodiversity loss, climate change, degradation of inter- national waters, and ozone depletion. Related work to stem the pervasive problem of land degradation is also eligible for GEF funding. Launched in 1991 as an experimental facility, GEF was restructured after the Earth Summit in Rio de Janeiro to serve the environmental interests of people in all parts of the world. In 1994, 34 nations pledged $2 billion to protect the global environment and promote sustainable development. In 1998, 36 nations agreed to commit $2.75 billion more to support this mission. More than a thousand leaders from governments, international institutions, and non-governmental organizations met in New Delhi in 1998 for the first GEF Assembly. The Assembly adopted The New Delhi Statement (excerpted here), highlighting GEF's unique role and calling upon it to "accelerate its operations." T'he GEF is the multilateral funding mechanism dedicated to promoting global environmental protection within a framework of sustainable development by providing new and additional grant and concessional funding... its beneficiaries are all people of the globe, and the need for the GEF is even g-reater as we enter the new millennium... ABOUT THIS REPORT Safeguarding the Earth reports on the accomplishments of the Global Environment Facility through June 30, 1999, and highlights new GEF initiatives leading into the 21st century. GEF encourages the reproduction of this text in whole or in part and in any form for educational or non- profit uses, provided acknowledgment of the source is made. The Global Environment Facility secretariat would appreciate receiving a copy of any publication that uses this report for its source. Copies may be sent to the GEF secretariat in care of the address on the back cover. No use of this publication may be made for resale or other commercial purposes without prior written consent of the Global Environment Facility secretariat. Images remain the sole property of their source and may not be used for any purpose without written permission from the source. The designations of geographical entities in this document, and the presentation of materials, do not imply the expression of any opinion whatsoever on the part of GEF concerning the legal status of any country, territory, or area, or its authorities, or conceming the delimitation of its frontiers or boundaries. ISBN Number: 1-884122-94-9 2 4~~4, S:X~~~~~~~~~~~~A- T The Purpose of the GRobaX Env ocnment Facility 4 Safeguarding the Earth 0 Council Members A Message from the CEO & Chairman 43 Country Focal Points 7 From Vision to ViabVe Action 57 Non-Governmental Highlights from GEF's Portfolio Focal Points New Project Sampler New Projects in Fiscal Year 1999 59 Scientific and Technical Advisory Panel 1T9 Catalyst for Sustainable ST Implementing Agency Contacts DleveRopmernt. . ; Country Priorities & the Global Environment ,6 Gl[obal Environment Leadership Award k - > * _f ~63 i:Z2d1bts 23 Support for the Conventions Emerging [ 64 Last Words from Pio GEF Funding Brings Results 27 Opening Deors for New Technologies Clean Energy for Development 30 Integrating Land, Water, and Biodiversity / Conservat6onI t,1| . _ A Holistic Approach to Natural Resources / d, 33 Tangible Partnerships Multiplying GEF's Impact 39 A Streamirned Organization Maximizing GEF Resources 13 Safeguarding the Earth While people around the world have marked a new millennium, Earth itself is, of course, several billions of years old. a Do we really need to be concerned about the future of a planet with staying power of this order of magnitude? Most definitely. As Earth goes, so go the more than six billion people and countless other species on board. * Consider the potential risks associated with just one pressing problem, global climate change. * According to the Intergovernmental Panel on Climate Change, unless emissions of greenhouse gases are stabilized, the probable rise in carbon dioxide concentrations in the atmosphere late in this century could mean: * Increased stress on water resources in arid and semi-arid land areas in Africa, the Middle East, and Southern Europe * Decreased agricultural production in Africa and Latin America * An increase in vector-bome diseases, such as malaria, in tropical countries * Tens of millions of people displaced by rising sea levels in small islands states and low-lying deltas * Major changes in the structure and functioning of critical ecological systems, particularly coral reefs and forests. Expanding deserts, a tattered ozone layer, collapsing fisheries, a scarcity of fresh water, and unprecedented levels of plant and animal extinction do not describe the kind of planet we want to leave for future generations. We can do better, if we all play a part. The Global Environment Facility (GEF) encourages people's partici- pation in safeguarding the global environment through sustainable development measures close to home. Most nations of the world today are shareholders in the GEF. A total of 166 participate in the GEF, and their input is also channeled through GEF's 32-member goveming Council. Five years after the GEF took its current form, people working in more than 620 GEF projects and over 140 countries are casting a kind of safety net around some of earth's most precious natural assets and the human communities that depend on them. When co-financing from national govemments, intemational agencies, the private sector, and environmental groups is added to GEF funds, this portfolio is valued at more than $7 billion. These resources are small in relation to the size of the problems. Our success to date stems from a number of factors, institutional as well as operational: * An ability to translate vision and concepts into viable actions * An emphasis on our role as a catalyst for sustainable development while respecting national priorities * Our role in support of the Conventions that emerged from Rio, the Convention on Biological Diversity and the U.N. Framework Convention on Climate Change, and GEF activities that take into account the objectives of the Convention to Combat Desertification and other global environmental treaties 4 THE LOCAL BENEFITS OF GLOBAL ENVIRONMENTAL PARTNERSHIPS Earlier this year, I listened as a community leader described what a home-grown conservation plan and support from the Global Environment Facility (GEF) have done for the endangered ibex and the low-income people living in mountainous northern Pakistan. "Before the GEF project, influential people used to hunt the ibex and other animals," recalled Farman Baig, vice chairman of the Khyber Imamabad development organization. "Then restrictions on animal hunting and tree felling were instituted, and the people thought that the area would become a national park and they would not benefit from it.' Instead, the people took charge. A newly formed conservation committee gave voice to local people as well as forestry and wildlife experts. Together, they wrote a district conservation plan, which not only controlled hunting, but channeled most of the revenues to a village conservation fund that has already been tapped to bring clean drinking water from a glacier. Today villagers learn wildlife management from a guide their peers helped produce, and schoolchildren study about the rich collection of more than 300 animals and 1,000 plants that help make their home- land unique. "We are now capable of carrying this conservation project forward on a permanent basis," said Baig. "We can also provide assistance to oth- -_ ers, in light of our own experience. - As impressed as I was by the community in question, I was also struck at how well so many partners had backstopped their efforts. Among them: the govemments of Pakistan and the United Kingdom, the Aga Khan Rural Support Programme, IUCN-The World Conservation Union, World Wildlife Fund-The Netherlands, the European Union, the Intemational Fund for Agricultural Development, and the GEFs imple- menting agency in this instance, the United Nations Development / J Programme (UNDP). j i: Mohamed T El-Ashry ' u For more examples, see the section on Tangible Partnerships. * Our demonstration of new and renewable energy technologies, specifically for developing countries E Our integrated approaches for land, water, and biodiversity conservation * Our many tangible partnerships with governments, non-governmental organizations, and the private sector * Our institutional arrangement of a streamlined organization that relies on existing, proven organizations for implementing its actions on the ground. Sections of this report look at each of these critical facets of the GEF. They also provide a means for contemplating what life on our shared planet can be like in the next century and beyond - if, together, we safeguard the Earth. Me_4/^ 4 Mohomed T E/-Ashry CEO & Chairman 4X: ../t {~~~~~~~~~ l7j From Vision to Viable Action "Te best argument for the GEF is on the ground - highly relevant and participatory projects \, o ,r that are innovative enough and designed Developing countries and nations transitioning to market economies are flexibly enough to bring increasingly looking to the GEF as their principal partner in global environmental problem local needs and GEF's solving. Projects in more than 140 countries: global focal areas * Conserve biodiversity, improving farmland, coastal, mountain, marine, and wildlife management to secure better togeter." livelihoods for people who use these resources... DelfinJ. Ganapin, Jr., * Save energy and open doors for renewable energy technologies, e;tending power to rural communities and reducing former UndersecretarY reliance on less efficient technologies that cause air pollution and contribute to climate change... for Environment, * Address over-fishing and the degradation of oceans, coastlines, lakes, wetlands, and rivers caused by the loss of The Philippines habitats and pollution... * Assist nations in Eastern Europe, Central Asia, and the Russian Federation in phasing out the use of chemicals that deplete the ozone layer. During fiscal 1999, the GEF Council Number of Projects and GEF Allocation by Focal Area approved projects worth $517.6 million. (As of June 1999) These funds helped mobilize close to $1 bil- 1,000 S960.32m lion more in co-finance from govemments, 8U.04m development institutions, the private sector, _00 and non-governmental organizations. Soo_ _ _ ___ The average GEF grant during the past year was $8 million. However, actual grant amounts ranged from tens of thousands of _ I _ _ _ _ _ dollars in GEF's small grants program (see 600 - Tangible Partnerships section) to tens of millions of dollars for capital-intensive renewable energy projects (see Opening 400 - S350A4m Doors for New Technologies section). 324 200 J - * 1Sl.Um 0- l Biodiversity Climate International Ozone Multiple Chane Waters Depletion Focal Areas 7 New Project Sampler Below you will find a sample of full-size projects approved during the last year. With the exception of "short- term response measures" that take advantage of immediate opportunities to address urgent problems - GEF's ozone layer protection work (p. 25), for example - all GEF projects currently fall into one or more of three "focal areas" and ten "operational programs." For a complete list of new GEF projects, please see p.13. Sample small and medium-size grants can be found in the section on Tangible Partnerships. For GEF projects addressing land degradation, see the section Integrating Land, Water, and Biodiversity Conservation. FOCAL AREA: BIODIVERSITY Arid and Semi-Arid Ecosystems: Bolivia lies at the juncture of four major ecological communities, and contains roughly two-fifths of South America's mammals and birds. Some 17 percent of Bolivia's land area has been designated for conservation in 18 protected areas. A new $15 million GEF grant (matched by more than $30 million in co-finance) will help strengthen this system, in harmony with indigenous communities who maintain one of the world's largest reservoirs of agricultural and medicinal plants. In the short run, the project will improve the management of the protected areas and establish and capitalize a private trust fund. Its longer term goals include a consensus- based conservation plan and additional means to achieve social and financial, as well as ecological, sustainability. (World Bank) Coastal, Marmie, and Freshwater Ecosystems: This $10 million project (GEF contribution: $6 million) is located on and around four biologically rich islands in the province of Maluku in eastern Indonesia. Unsustainable logging and mining, destructive fishing practices, illegal trade in protected species (dugongs, parrots, and sea turtles), and inappropriate coastal development are all threats to the region. The project is designed to improve management of Manusela National Park, establish Lolabata-Akitajawe National Park, and expand and manage a system of marine protected areas. It will encourage local community participation by provid- ing development grants linked to environmental actions and reviving traditional natural resource manage- ment systems. Community groups, non-govermental organizations, and the private sector will be involved in ecotourism development and protected area planning and management. (World Bank) Forest Ecosystems: The Guayana Shield - a geological formation that includes all of Guyana, Suriname, and French Guiana, and adjacent portions of Venezuela, Colombia, and Brazil - represents one of the largest stretches of unfragmented tropical forest on earth. An $18.3 million project (GEF contribution: $9.5 million) will strengthen management of two globally important and representative sites, Central Suriname Nature Reserve and Sipalwini Nature Reserve in southem Suriname. The project will also build Suriname's constituency for conservation through targeted awareness and education drives, promote livelihood altematives (including ecotourism), and create long-term funding mechanisms to ensure the financial sustainability of protected areas management. (UNDP) Mountain Ecosystems: Spanning Kazakhstan, Kyrgyz Republic, and Uzbekistan, the Western Tien Shan mountains are home to 3,000 plant species (including 220 medicinal plants and herbs) and many mammals that are threatened or endangered elsewhere - among them, the white-clawed bear, snow leopard, Eurasian eagle- owl, and the Himalayan griffin vulture. Many commercial species of apples, nuts, tulips, and grapes originated here. A $13.6 million (GEF contribution: $10.1 million) Central Asian Transboundary Biodiversity project will 8 z W:wa~~~~~y.in de Oro Power & Light and the International Finance Corporation. help address overgrazing and deforestation pressures by identifying alternative sources of income and strengthening and coordinating national policies, regulations, and institutional arrangements. (World Bank) FOCAL AREA: CLIMATE CHANGE Removing Barriers to Energy Efficiency and Conservation: Faced with an estimated yearly growth rate of 4 to 6 percent in energy demand, the Government of Lebanon is searching for ways to emphasize energy efficiency instead. A new $5.4 million project (GEF contribution: _ $3.4 million) seeks to reduce greenhouse gas emissions by improving "demand side" energy efficiency. It will create the Lebanese Centre for Energy Conservation and Planning to remove barriers to energy efficiency and provide engineering and financial services to the public and private sector industries - in time, transforming itself into a private corporation. (UNDP) Promoting the Adoption of Renewable Energy: Morocco imports more than 90 percent of its primary energy in the form of oil and coal. In rural areas, the overexploitation of woody biomass for fuel is contributing to defor- estation and land degradation. A new $5.3 million project (GEF contribution: $3 million) will help develop the market for solar water heaters, by improving the quality of the heaters, making them more affordable, increasing awareness, and establishing a more favorable policy context. GEF funds will finance a promotional phase, during which 100,000 square meters of solar heating technology will be installed over the next four years. Local investors, public and private, are providing more than $30 million in associated financing over the longer term. (UNDP) Reducing the Long-Term Costs of Low Greenhouse Gas-Emitting Energy Technologies: A new $ 7.5 million project (GEF contribution: $4 million) will help co-finance a one-megawatt, grid-connected photovoltaic power plant, which will be integrated into the 80-megawatt distribution network of the Cagayan de Oro Power & Light 9 Company, a private utility operating on the Philippines' island of Mindanao. This initiative will be the first, full-scale demonstration of the environmental and economic benefits of combining hydroelectric and solar electric power in a developing country. (World Bank/IFC) INTERNATIONAL WATERS Waterbody-Based Program: An $18.3 million project (GEF grant: $8.3 million) will help identify priority transboundary issues and country-specific actions to address them as part of the Caspian Environment Program, which is funded by countries bordering the Caspian Sea as well as by GEF, UNEP, and other donors. It will develop regional coordination mechanisms, complete an analysis of transboundary water-related environmental issues to guide actions and investments, formulate and approve a strategic action program, and prepare national action plans. (UNDP, UNEP, World Bank) Integrated Land and Water Program: A $20.3 million program (GEF grant: $12.3 million) will contribute to the sustainable management of coastal and ocean resources in the Pacific region. Integrated coastal and water- shed management efforts will focus on freshwater supplies, including groundwater, marine protected area development, sustainable coastal fisheries, and tourism development in Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Marshall Islands, Nauru, Niue, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu. An oceanic fisheries management effort will target the western Pacific warm pool ecosystem, whose boundaries correspond to the western Pacific tuna fishery. (UNDP) Contaminant-Based Program: A new $20.2 million project (GEF: $4.8 million) will fund development of a water- shed management program to counteract organic and heavy metal pollution and soil loss in Brazil's Rio Sao Francisco River Basin. The river discharges into the biologically rich, southwest Atlantic large marine ecosys- tem and Brazil Current. The project is assisting the govemment in implementing its new national water law in the basin, including a system of pricing for water use. It is also working to implement other policy reforms to achieve more efficient water use and improve environmental quality in the degraded coastal area. This is the first of a series of large river basin/coastal zone projects GEF has agreed to help finance under the Global Program of Action for Protection of the Marine Environment from Land-Based Activities. (UNEP) New GEF Operational Programs GEF programs continue to evolve and cover new ground in response to global priorities and country needs. During fiscal 1999, the GEF Council approved two new operational programs on environmentally sustainable transport and integrated ecosystem management, and supported initial development of a third new program on agrobiodiversity. Transport. The transport sector accounts for a quarter of the world's primary energy use and three-fifths of all petroleum products used. It also generates a substantial portion of the local air pollution and greenhouse gas emissions worldwide. GEF's new program on transport aims to support a long-term shift towards low emissions and sustainable forms of transport for developing countries. Initially, this program will emphasize: * Shifts to more efficient and less polluting formis of public and freight transport through traffic management and increased use of cleaner fuels * Non-motorized transport * Fuel cell or battery-operated two and three-wheelers designed to carry more than one person 10 . ,, , i: e 4 ,g=ged streets, Mexico City: The transport _ _ 4 . -_D.sector accounts for a quarter of the world's primary energy use, Vo Z s @three-fifths of all petro- leum products used, and much of the local air -, A;|tsF. > w pollution and green, 4* IL* louse gas emission5 worldwide. A new GEF 4 # . ' program, aims to support 4 * sw 3 * } > ,* a long-term shift tg.wards low emissions and sustainabl,e forms of transport. - Sib 2''-'''?' **fi5 .................................. _, , 5,~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. ........ -11 &-A 4i'-_ I#. - -~~~~~ ~~~ - - t -W ; of 4 eS - * * .', f , 4 _s , , f t' t , 4_ - -- <.fi.... Es ~~__ ~ I ,r-. " . ~ ~~~~~~~~~~~ ~ . . 77~~~~~~~7 - - ) . ' /- y - - f_I ¶4. :_'_____ .I - "\ Y - i e1 / t - s* ri~~~~~~~~~~~ 4,t E _r| E , '>~~4 1|fifi*WN X r-f % * * Internal combustion engine/electric hybrid buses, and m Advanced technologies for converting biomass feedstock to liquid fuels. Integrated ecosystem management. Forests, dry and wetlands, coastal areas, aquatic systems, and agricultural landscapes provide a broad range of goods and services, important to human development and the global environment. These include food, fresh water, timber, pharmnaceutical and biomass resources, flood erosion and water quality control, as well as control of pests that may also serve as disease vectors. As ecosystems are intrinsically linked, changes in one may have significant impacts elsewhere. When management of land, *water, or biological resources occurs in isolation, ecosystem degTadation and the loss of associated services frequently result. A new GEF operational program takes a comprehensive approach to promoting the multiple benefits of sustainable ecosystem. use. These benefits are expected to encompass sustainable use of biodiversity, carbon sequestration, reduced land degradation, watershed conservation, and less contamination from persistent toxic substances like pesticides and other chemicals. Agrobiodiversity. It is estimated that nearly 2.5 billion people rely heavily on wild and traditionally cultivated plant species to meet their daily needs. This agricultural biodiversity also furnishes the genetic material farmers and. consumers in developed countries depend upon for food security. GEF initiatives in Ethiopia, Peru, and the Levantine Uplands of Lebanon, Syria, Jordan, and the northern Palestinian Authority are already protecting important centers of plant diversity and endemism. Now GEF is widening its work to support sustainable use of biodiversity by developing a new operational program on agrobiodiversity. GEF's $11 million (GEE: $6.2 million) People, Land Management, and Environmental Change project is a global initiative on agrobiodiversity. It aims to pooi the best efforts of farmers and scientists and develop improved systems of natural resource management in the tropics and sub-tropics. Villagers and researchers are gathering primary data in on-farm trials in Brazil, China, Ghana, Guinea, Kenya, Papua New Guinea, Tanzania, and Uganda acros s a variety of ecosystems (semi-arid, mountain, forest, and wetland). Their work will be 12 complemented by biodiversity assessments, participatory rural appraisals, outreach and experimental work, and capacity strengthening. (UNEP) Small Island Developing States & GEF Climate Adaptation Efforts The best-understood consequences of global warming include a rise in sea level of about 50 centimeters by 2100. Estimates are that sea levels have already risen about 18 centimeters in the past century, primarily from the thermal expansion of the oceans and a smaller contribution from melting glaciers. The implica- tions for islands are obvious, and they include the forced relocation of millions of people and billions of dollars in damage to property. The ability to adapt is critical to surviving these predictions. To that end, the GEF is financing two regional projects, one involving the Caribbean islands, and the other, island nations in the South Pacific, to determine their vulnerability to climate change and develop adaptation plans. The Pacific Islands Climate Change Assistance Program encompasses the Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Marshall Islands, Nauru, Solomon Islands, Tuvalu, Vanuatu, and Western Samoa. By partici- pating in training, institutional strengthening, and planning activities, these nations will be able to identify their climate change mitigation options. Among the project's expected results are the countries' first national communications to the UN Framework Convention on Climate Change (FCCC), an inventory of greenhouse gas sources and sinks, an evaluation of mitigation and adaptation options, and national vulnerability assess- ments and implementation plans. (UNDP) In GEF's Planning for Adaptation to Global Climate Change project, the members of the Caribbean Com- munity (CARICOM) are working to develop strategies to cope with the adverse effects of global climate change, particularly sea level rise. Most of the members of CARICOM, which includes Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, St. Kitts and Nevis, St. Lucia, and Trinidad and Tobago, are small island states with fragile coastal ecosystems. This project will identify cost-effective ways to adapt to climate change, particularly where sea level rise is most likely. Staff are being trained to monitor and analyze climate and sea level dynamics and trends and to assess and recommend policy options and instruments. CARICOM members are collaborating on a sea level/climate change monitoring network, databases, and information systems, and are inventorying coastal resources and uses. Selected states will test pilot approach- es for monitoring coral reefs, assessing coastal vulnerability, assigning economic values to coastal and marine resources, and formulating economic and regulatory proposals. (World Bank) New Projects in Fiscal Year 1999 (Allocations in Millions) BIODIVERSITY Global, GEF Implementing Agency (IA): UNDP/UNEP, Project Name: Biodiversity Planning Support Programme, GEF Allocation: $3.43, Total Costs: $4.23 Africa, GEF IA: UNDP/UNEP, Project Name: Management of Indigenous Vegetation for the Rehabilitation of Degraded Rangelands in the Arid Zone ofAfnica, GEF Allocation: $9.05, Total Costs: $13.38 13 Bangladesh, GEF IA: World Bank, Project Name: Aquatic Biodiversity Conservation, GEF Allocation: $5.00, Total Costs: $60.84 Belize, GEF IA: UNDP, Project Name: Conservation And Sustainable Use of the Barrier Reef Complex, GEF Allocation: $5.36, Total Costs: $7.37 Bolivia, GEF IA: World Bank, Project Name: Sustainability of the National System of Protected Areas, GEF Allocation: $15.30, Total Costs: $46.70 Cambodia, GEF IA: World Bank, Project Name: Biodiversity and Protected Area Management Pilot Project for the Virachey National Park, GEF Allocation: $2.75, Total Costs: $5.00 Cote d'lvoire, GEF IA: World Bank, Project Name: National Protected Area Management Program, GEF Allocation: $16.50, Total Costs: $68.22 Cuba, GEF IA: UNDP, Project Name: Priority Actions to Consolidate Biodiversity Protection in the Sabana-Camaguey Ecosystem, GEF Allocation: $3.89, Total Costs: $19.91 Ethiopia, GEF IA: World Bank, Project Name: Conservation and Sustainable Use of Medicinal Plants, GEF Allocation: $1.91, Total Costs: $6.81 Georgia, GEF IA: World Bank, Project Name: Integrated Coastal Management Project, GEF Allocation: $1.30, Total Costs: $8.10 Georgia, GEF IA: World Bank, Project Name: Conservation of Forest Ecosystems, GEF Allocation: $9.05, Total Costs: $33.15 India, GEF IA: UNDP, Project Name: Conservation and Sustainable Use of the Gulf of Mannar Biosphere Reserve's Coastal Biodiversity, GEF Allocation: $7.84, Total Costs: $26.93 Indonesia, GEF IA: World Bank, Project Name: Maluku Conservation and Natural Resources Management, GEF Allocation: $6.00, Total Costs: $10.60 Malawi, GEF IA: World Bank, Project Name: Mulanje Mountain Biodiversity Conservation Project, GEF Allocation: $5.30, Total Costs: $6.83 Malaysia, GEF IA: UNDP, Project Name: Conservation and Sustainable Use of Tropical Peat Swamp Forests and Associated Wetland Ecosystems, GEF Allocation: $6.30, Total Costs: $12.97 Mozambique, GEF IA: World Bank, Project Name: Coastal and Marine Biodiversity Management Project, GEF Allocation: $4.08, Total Costs: $9.21 Pakistan, GEF IA: UNDP, Project Name: Mountain Areas Conservancy Project, GEF Allocation: $10.60, Total Costs: $16.80 Papua New Guinea, GEF IA: World Bank, Project Name: Forestry and Conservation Project, GEF Allocation: $17.30, Total Costs: $55.50 Paraguay, GEF IA: UNDP, Project Name: Paraguayan Wildlands Protection Initiative, GEF Allocation: $9.20, Total Costs: $12.70 Peru, GEF IA: UNDP, Project Name: In situ Conservation of Native Cultivars and their Wild Relatives, GEF Allocation: $5.22, Total Costs: $6.42 Peru, GEF IA: World Bank, Project Name: Indigenous Management of Protected Areas in the Amazon, GEF Allocation: $10.35, Total Costs: $24.35 14 16WE~~~ Philippines, GEF IA: World Bank, Project Name: Coastal and Marine Biodiversity Conservation in Mindanao, GEF Allocation: $1.25, Total Costs: $6.05 Suriname, GEF IA: UNDP, Project Name: Conservation of Globally Significant Forest Ecosystems in Suriname's Guavana Shield, GEF Allocation: $9.54, Total Costs: $18.33 CLIMATE CHANGE Global, GEF IA: World Bank/IFC, Project Name: Efficient Lighting Initiative, GEF Allocation: $15.23, Total Costs: $50.23 Global, GEF IA: World Bank/IFC, Project Name: Solar Development Corporation, GEF Allocation: $10.00, Total Costs: $50.00 Benin, GEF IA: World Bank, Project Name: Decentralized Rural Energy Project, GEF Allocation: $1.14, Total Costs: $5.75 China, GEF IA: UNDP, Project Name: Energy Conservation and GHG Emission Reduction in Chinese Township and Village Enterprises (TVE), Phase 2, GEF Allocation: $8.00, Total Costs: $18.55 Kenya, GEF IA: UNDP, Project Name: Removal of Barriers to Energy Conservation and Energy Efficiency in Small and Medium Scale Enterprises, GEF Allocation: $3.19, Total Costs: $8.64 Lebanon, GEF IA: UNDP, Project Name: Barrier Removal for Cross Sectoral Energy Efficiency, GEF Allocation: $3.40, Total Costs: $5.40 Macedonia, GEF IA: World Bank, Project Name: Development of Mini-Hydropower Plants, GEF Allocation: $1.50, Total Costs: $6.40 Malawi, GEF IA: UNDP, Project Name: Barrier Removal to Malawi Renewable Energy Programme, GEF Allocation: $10.72, Total Costs: $6.40 i5 Mexico, GEF IA: World Bank, Project Name: Renewable Energy for Agriculture, GEF Allocation: $8.70, Total Costs: $26.20 Morocco, GEF IA: UNDP, Project Name: Market Development for Solar Water Heaters, GEF Allocation: $2.97, Total Costs: $5.37 Morocco, GEF IA: World Bank, Project Name: Solar-Based Thermal Power Plant, GEF Allocation: $43.90, Total Costs: $114.36 Philippines, GEF IA: World Bank/IFC, Project Name: CEPALCO Distributed Generation PV Power Plant, GEF Allocation: $4.03, Total Costs: $7.53 Poland, GEF IA: World Bank, Project Name: Geothermal and Environment Project, GEF Allocation: $5.40, Total Costs: $84.70 Slovak Republic, GEF IA: World Bank, Project Name: Chemosvit Cogeneration Project, GEF Allocation: $2.20, Total Costs: $18.40 Slovenia, GEF IA: UNDP, Project Name: Removing Barriers to the Increased Use of Biomass as an Energy Source, GEF Allocation: $4.40, Total Costs: $12.34 Thailand, GEF IA: World Bank, Project Name: Building Chiller Replacement Program, GEF Allocation: $2.50, Total Costs: $90.50 Togo, GEF IA: World Bank, Project Name: Decentralized Rural Energy Project, GEF Allocation: $1.14, Total Costs: $5.75 Tunisia, GEF IA: UNDP, Project Name: Experimental Validation of Building Codes and Removal of Barriers to Their Adoption, GEF Allocation: $4.36, Total Costs: $8.13 INTERNATIONAL WATERS Global, GEF IA: UNDP, Project Name: Removal of Barriers to the Effective Implementation of Ballast Water Control and Management Measures in Developing Countries, GEF Allocation: $7.61, Total Costs: $11.44 Global, GEF IA: UNDP/UNEP/World Bank, Project Name: Strengthening Capacity for Global Knowledge- Sharing in International Waters, GEF Allocation: $5.25, Total Costs: $10.05 Africa, GEF IA: World Bank, Project Name: Western Indian Ocean Islands Oil Spill Contingency Planning, GEF Allocation: $3.16, Total Costs: $4.29 Asia/Pacific, GEF IA: UNDP, Project Name: Building Partnerships for the Environmental Protection and Management of the East Asian Seas, GEF Allocation: $16.22, Total Costs: $28.55 Asia/Pacific, GEF IA: UNDP, Project Name: Implementation of the Strategic Action Programme (SAP) of the Pacific Small Island Developing States, GEF Allocation: $12.29, Total Costs: $20.35 Asia/Pacific, GEF IA: UNEP, Project Name: Reversing Degradation Trends in the South China Sea, GEF Allocation: $18.59, Total Costs: $35.86 Asia/Pacific, GEF IA: World Bank, Project Name: Mekong River Basin Water Utilization Project, GEF Allocation: $11.10, Total Costs: $17.95 CE Europe/ Former Soviet Union, GEF IA: UNDP/UNEP/World Bank, Project Name: Addressing Transboundary Environmental Issues in the Caspian Environment Programme, GEF Allocation: $8.34, Total Costs: $18.32 16 Latin America/Caribbean, GEF IA: UNDP, Project Name: Environmental Protection of the Rio de la Plata and its Maritime Front: Pollution Prevention and Control and Habitat Restoration, GEF Allocation: $6.01, Total Costs: $10.81 Latin America/Caribbean, GEF IA: UNDP/UNEP, Project Name: Demonstrations of Innovative Approaches to the Rehabilitation of Heavily Contaminated Bays in the Wider Caribbean, GEF Allocation: $9.41, Total Costs: $35.26 Brazil, GEF IA: UNEP, Project Name: Integrated Management of Land-Based Activities in the Sdo Francisco Basin, GEF Allocation: $4.77, Total Costs: $20.21 Brazil, GEF IA: UNEP, Project Name: Integrated Watershed Management Program for the Pantanal and Upper Paraguay River Basin, GEF Allocation: $6.62, Total Costs: $16.40 Georgia, GEF IA: World Bank, Project Name: Agricultural Development Project II, GEF Allocation: $2.50, Total Costs: $8.25 Poland, GEF IA: World Bank, Project Name: Rural Environmental Project, GEF Allocation: $3.00, Total Costs: $14.40 MULTIPLE FOCAL AREAS Global, GEF IA: UNDP, Project Name: Small Grants Programme (Second Phase), GEF Allocation: $31.62, Total Costs: $61.62 Global, GEF IA: UNDP/UNEP/World Bank, Project Name: GEF Country Dialogue Workshops, GEF Allocation: $3.51, Total Costs: $4.62 OZONE DEPLETION Russian Federation, GEF IA: World Bank, Project Name: Ozone Depleting Substance Consumption Phase-Out Project, GEF Allocation: $31.30, Total Costs: $108.20 Uzbekistan, GEF IA: UNDP, Project Name: ODS Phase-Out Programme, GEF Allocation: $3.32, Total Costs: $3.47 17 _S4~~~~~~~~~~ - = - - .~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~; Catalyst for Sustainable Development 'Weeting liasb neeeds 7 3 ~~~~~~~~~~~~~~~utfD5 ncRsude the f ;; 3 ; ~~~~~~~~~~~~~~~~envirosnment!' i*.' Ibrahim Abdelgelil, Head, Egyptian Environmental Authority Acting alone, countries can't do all that is required to heal the ozone layer, reverse the degradation of international waters, address climate change, promote clean ener- gy, or stop plants and animals from disappearing. Neither can they unilaterally overcome the poverty and lack of opportunity still so apparent in much of the world. By working together, they can. The GEF safety net is constructed from a web of partnerships, with each partner contributing what they do best at the local, national, and international level. While money is important to accomplishing GEF's mission, cooperation is what counts most in the long run. The first rule of GEF operations is that they align with and support a country's own actions for sustain- able development. Each country has designated an operational focal point, an individual responsible for acting as the primary contact point for all GEF activities. These operational focal points, listed starting on p. 43, review project ideas and concepts, endorse their consistency with respect to national programs and national priorities, facilitate broad-based as well as project-related consultation, and provide feedback on GEF activities. During the past year, the GEF worked to strengthen the "country-driven" nature of its portfolio and policies by: n Providing additional support to operational focal points in their communication efforts * Developing country dialogue workshops to increase the flow of ideas and funds u Pursuing a simpler method for considering what constitutes incremental costs - i.e., that portion of a project's price tag which is eligible for GEF funding (see box p. 21) * Streamlining the project cycle * Mobilizing the scientific community at the country level in partnership with UNEP and GEF's scientific and technical advisory panel * Partnering with UNDP to craft a global capacity development initiative. DETERMINING GEF'S SHARE GEF brings limited resources to the table, so the portion it pays is carefully calculated to cover only the added (or "incremental") costs of making planned development projects "globally green" or "Earth friendly." This is a recognition that development undertaken with global environmental protection in mind sometimes, but not always, costs more. Recipient govemments are the number one co-financiers of GEF projects, providing well over $2 billion in additional funding since GEF began. Example: A new $20 million energy conservation project in China, co-implemented by UNDP and the United 19 Biodiversity Spending Current and Projected 350 in millions 300 250 Nations Industrial Development Organization, is seeking to 200 reduce greenhouse gas emissions from township and village-level "Our sensitivity to enterprises. 150 global environmental The building material, coking, and metal casting sectors provide key inputs to China's economic development and have 100 phenomena is growing. been major contributors to China's economic growth over the we suffer their effects last 20 years. Township and village enterprises provide more so than half of the total output from these sectors - but they also directly. The case most account for one-sixth of China's total emissions of carbon diox- 0 F 1998 1999 2000 2001 2002 evident is the thinning ide, substantial local air and water pollution, and health hazards for employees. of the ozone layer and GEF is contributing $9 million to address policy and enter- Climate Change Spending Current and Projected the consequent increase prise-level barriers (including lack of access to commercial financing) to increasing energy efficiency in the brick, cement, 300 in ultraviolet radiation metal casting, and coking sectors. China's national, village and in millions over the southem cone township, and local governments; the Agricultural Bank of 250 China; and other commercial banks are supplying the remain- of Punta Arenas in the der. The global benefit is a reduction in greenhouse gases. 200 MagellanStraits,where Locally, enterprises will be modernized to cut pollution, improve workplace safety, and introduce value-adding systems a large number of and processes. 150 -, people are exposed to 100 this risk:' REPLICABILITY Benjamin Concha, 50 Ambassador to India, Another key principle that comes into play in all GEF partner- Chile ships is the potential to build on lessons learned in the project 0 area to benefit an entire country or region. FY 1998 1999 2000 2001 2002 Example: A new $26.9 million GEF project in southeast India will help conserve globally significant coastal and marine biodiversi- ty - more than 3,600 plants and animal species, including 17 International Waters Spending Current and Projected species of mangrove and the endangered marine mammal 140 known as the dugong. It will also support the development of in millions alternative sustainable livelihoods for many of the 100,000 120 people living around the Gulf of Mannar biosphere reserve. GEF funding of $7.8 million will help expand the park's infra- 100 structure and strengthen its operations (i.e., develop species and habitat management plans, ecotourism, and educational and 80 - media outreach programs) and establish a trust fund mechanism for longer term conservation efforts. A portion will also help 60 finance village-based marine conservation plans and a maricul- ture cooperative marketing venture. 40 By demonstrating how to integrate biodiversity conservation into coastal zone management plans that address habitat 20 destruction, over-harvesting of marine resources, and civic pollu- tion, the project promises to become a model for the state of 0 FY1998 199 2000 2001 2002 Tamil Nadu and for India as a whole. (UNDP) 20 A SIMPLIFIED PROCESS While it is an important principle of GEF's work, the process of determining incremental costs has often proven complicated in practice. In response to the GEF Council's request to "clarify and simplify" this concept, the GEF Secretariat has formed an incremental cost working group in collaboration with country partners, the implementing agencies, and convention secretariats. A meeting with key players in the project cycle - including project directors, country focal points, and non-governmental organizations - was held in London during the spring of 1999. Participants considered a number of paths, including focal area specific approaches for incremental cost estimation. Principles agreed upon include: * Full involvement at the country level * Differentiated, but shared, responsibilities along the project cycle for project proposers (and other local actors), the GEF operational focal points in each participant country, and GEF's secretariat and implementing agencies * Early and substantial feedback from the secretariat * Transparency in the incremental cost negotiation and agreement process engaged in by the implementing agency and project proposer, and in all secretariat reviews * An emphasis on the quality of the incremental cost reasoning and not the numbers arrived at * Integration of incremental cost estimates into the 'logical framework analysis" conducted during project development * Projectproposer access to certain minimum information on the GEF's procedures for calculating incremental costs. QUICK GUIDE TO CALCULATING INCREMENTAL COSTS * Identify the global environmental problem of concern * Analyze the root causes and threats thatgive rise to the problem 3 Identify activities to address the threats and their underlying causes (to formulate the GEF alternative) a Identify activities that address the same threats and underlying causes and would occur regardless of GEF involvement (considered national sustainable development responsibilities) * Identify the activities that are incremental (i.e., do not form part of the baseline activities) GEF COUNTRY DIALOGUE WORKSHOPS Good projects depend on good ideas, and the best ideas come from those who are closest to the problems and are in a position to address them. To strengthen the grassroots character of its work, GEF is developing a series of country dialogue work- shops. As a joint effort by GEF's secretariat and implementing agencies, this program seeks to: * Engage a broad-based national audience in a dialogue about their priorities and GEF's mission, strategy, policies, and procedures * Facilitate country-level coordination and sharing of information on country needs * Provide practical information on how to access GEF resources and how to propose, prepare, and implement GEF-financed activities, including dissemination of information on bestpractices and lessons learned. Fifty workshops-most national but some regional where efficiencies merit - will take place over a three- year period, beginning in 2000. 21 N~~~~~~~~~~i X i, n g.- : N fE: :ff 0~~~~~~~~~~~~~~~~~~~~~~I Support for the Conventions Emerging from Rio "We Ihave witnessed the GIF's evolution into a dynam5c body which has established ltself as one of the most important ,, Rancial mechanisms f0ox mdressing global As the financial mechanism for the two global environmental treaties signed cv-xnmentag at the 1992 Earth Summit in Rio de Janeiro-the Convention on pGoieme." Biological Diversity and the U.N. Framework Convention on Climate Change-GEF has Ambassador Dan Pilay worked to keep the promise embodied in these conventions. GEF programs and projects also South Africa support the goals of other important global environmental treaties and agreements. Biodiversity. Since its establishment as a pilot program in 1991, GEF has allocated $991 million in grants and mobilized an additional $1.5 billion in co-financing (from recipient countries, bilateral agencies, other devel- opment institutions, the private sector, and non-governmental organizations) for biological diversity projects. Total financing for 64 new biological diversity activities (including enabling activities) during fiscal 1999 exceeded $553 million, of which GEF provided $193 million in grant financing and over $360 million was mobilized in co-finance. Climate change. From 1991 through June 1999, GEF allocated $884 million to 227 climate change projects and enabling activities, matched by more than $4.7 billion in co-financing. Fiscal 1999 financing for 46 new climate change initiatives exceeded $543 million, of which GEF provided $135.9 million in grant financing and roughly $407 million was leveraged. Intemational waters. GEF initiatives to reverse the degradation of international waters are informed by, and help to realize the objectives of, a mosaic of regional and international waters agreements. From 1991 through June 1999, the GEF allocated close to $360 million to international waters initiatives. In fiscal 1999, GEF allocated $116.3 million to 16 new initiatives and leveraged $150.9 million, for total financing of $267.2 million. Ozone depletion. From 1991 through June 1999, GEF allocated more than $155 million to enable the Russian Federation and nations in Eastern Europe and Central Asia to phase out the use of ozone destroying chemi- cals in partnership with the Montreal Protocol of the Vienna Convention on Ozone Layer Depleting Substances. In fiscal 1999, GEF allocated $35.1 million to three new initiatives and mobilized $77.1 million in co-finance, for total financing of more than $112 million. Land degradation. Dozens of projects cutting across GEF's four focal areas (collectively valued at more than $350 million) address land degradation, primarily deforestation and desertification, taking into account the objectives of the Convention to Combat Desertification. 23 CAPACITY DEVELOPMENT "The GEF has proven to Without the right combination of people, institutions, and practices at the country level, GEF's global envi- be an efficient ronmental agenda cannot hope to succeed. During fiscal 1999, GEF has paid increasing attention to the capacity development aspects of its portfolio and pursued new opportunities to do more. mechanism for the implementation of the PROJECT-BASED CAPACITY BUILDING GEF has found that in many cases there is no better way to build capacity than through projects themselves Rio Conventions. Long -through the doing, as it were. before the adoption of For example, a fiscal 1999 review of 84 GEF climate change projects found numerous instances of individu- als and institutions gaining critical technical, financial/business, and regulatory skills. These projects develop operational protocols to the skilled personnel and institutional capacities that are widely recognized as important for technology dif- the conventions, it fusion, by targeting capacity building for public agencies, private sector firms, financiers, consumers, commu- nity organizations, and non-govemmental organizations. A few examples: facilitated the * A GEF project in China trained the national Coal-Bed Methane Company to apply coal-bed methane technology. It elaboration of national also trained geology companies, research institutes, and coal-mining administrators in vertical well drilling tech- niques for coal-bed methane recovery. The Chinese Ministty of Coal has since negotiated joint exploration agree- reports and strategies in ments with a number of companies. recipient countries, as * In the Russian city of Vladimir, district heating companies, gas companies, and major local private enterprises were trained to conduct financial and economic analysis and feasibility studies of energy efficiency projects. well as the spread of * GEF's solar hot-water project in Morocco assisted the government in reviewing the overall policy/regulatory frame- cutting-edge work and recommending possible changes, such as value added tax and import duties, electric utility regulation, energy price changes, public sector procurement guidelines, and equipment standards and codes. environmental * Personnel at Peru's Center for Energy Conservation were trained to provide advice and support to clients in the public technologies." and private industrial sectors on potential energy efficiency and conservation savings. Philippe Roch, ENABLING ACTIVITIES State Secretary, GEF's enabling activities program continues to grow and evolve, strengthening the foundation for national Swiss Agency action to address the loss of biological diversity and the risks posed by climate change. for the Environment Biodiversity. These projects support country-driven conservation and sustainable use of biological diversity. This is accomplished through the compilation and assessment of existing information, and the development of national priorities, strategies, and action plans. Activities build national capacities, enhance public aware- ness, and assist countries to prepare for the implementation of the Convention on Biological Diversity. Biodiversity enabling activities covering 26 countries were approved during this fiscal year and additional resources were made available to assist 36 countries to participate in a best practices information clearing- house. A 1999 review of biodiversity enabling activities found that, while progress has varied considerably from country to country, most appear to have "undertaken a worthwhile and cost-effective national biodiversity planning process" and that GEF's three "implementing agencies have played major positive roles in support- ing the planning and implementation." The full report is available from the secretariat (and on the World Wide Web at www.gefweb.org). Climate change. Some 21 new enabling activities in climate change were approved during fiscal year 1999. Most eligible countries have now received financial assistance to prepare their first national communications to the climate change convention, and GEF is also working, through UNDP and UNEP, to provide the neces- sary technical support by means of its national communications support project. During fiscal 1999, the Council authorized revisions to allow countries to earmark enabling activity funds for: capacity building for assessing technology needs; participating in systematic observational networks; 24 -4 V *| Ht_r,r.icane Mitch's after- - math,"! i: most signiqf ck 9; 8an of climate change on b, t , ' humanity may be more - subtle and indirect, inrcluding declines in . ', coral reefs and wetlands. .. , .. - < X,, v ,, _. * *-f a preparing a national program to address climate change; conducting national activities for public awareness; designing, evaluating, and managing projects; or facilitating access to information. A review of experience in GEF's climate change enabling activities will be completed in 2000. CAPACITY DEVLOPMENT UNITOATIVE During fiscal 1999, the GEF Council approved a strategic partnership with UNDP to produce a comprehen- sive approach for developing country-level capacities to meet the challenges of global environmental action. This 18-month initiative will consider lessons leamed in capacity development to date, drawing on the expe- riences of GEF's three implementing agencies, and numerous other partners. A related effort by GEF's moni- toring and evaluation unit involves identifying approaches to monitor and evaluate the impacts of capacity development initiatives. Objectives of the capacity development initiative include mobilizing funding from a variety of donors and broadly addressing the need to develop capacity to meet challenges in the biodiversity, climate change, and land degradation areas. Complementing the Work of the Montreal Protocol Phasing out substances that deplete the ozone layer is a proven means of achieving global environmental benefits. While developing countries receive assistance from the Montreal Protocol fund to make the transi- tion to more benign substances, the nations of eastem Europe and the former Soviet Union look to the GEF for this critical support. During fiscal 1999, the GEF Council approved grants to the Russian Federation (the third of a three-part project), Turkmenistan, and Uzbekistan, bringing the total number of countries receiving GEF funds to 14 (encompassing Azerbaijan, Belarus, Bulgaria, Czech Republic, Hungary, Latvia, Lithuania, Poland, Russia, Slovakia, 25 Slovenia, Turkmenistan, Ukraine, and Uzbekistan). Together, these countries have received more than $138 mil- lion for 121 initiatives in the solvent, foam, aerosol, halon, and refrigeration sectors. Three more countries (Estonia, Kazakhstan, and Tajikistan) are preparing their country programs and are expected to start implemen- tation in the near future. IMPACT A 1999 review of GEE ozone layer protection projects found that, in addition to financial assistance, GEF played "a crucial role in the phase-out process" by "making available technical expertise, supporting learning and dissemination of project lessons within each country and in a regional context, and assisting in establish- ing suitable legal frameworks. The institutional strengthening components part of each GEF project have been instrumental in this respect." As a result, participating countries have implemented various supportive and innovative policies and mea- sures. Ten of the 14 recipient countries have either already implemented some kind of economic instruments or are planning to do so (taxes, emission charges, import fees, etc.). In addition, other proven policies and measures, including import bans on ozone depleting substances (ODS) and products containing ODS, use bans, and import and export licensing systems, have been widely applied. According to Montreal Protocol reports, total consumption of ODS in economies in transition has decreased from about 190,000 metric tons in the second half of the 1980s to less than 15,000 metric tons in 1997, a drop of more than 90 percent. GEFs ozone portfolio has played a part in bringing the total number down, helping to phase out more than 18,000 metric tons of ozone depleting pollutant (ODP). Russian Federation. As one of the major consumers of ozone depleting substances worldwide, Russia's GEF pro- ject accounts for close to half of all resources committed by the GEF ($60 million) and more than 60 percent of the total GEF impact (11,800 ODP metric tons). It contains 22 subprojects: six subprojects address the aerosol sector, seven the refrigeration sector (including three recovery and recycling subprojects), three the foam sector, and two the solvent sector. The approach taken by the GEE in the ozone area - characterized by the development of a country-wide approach to the problem in close cooperation with the goverment and country expertise, the elaboration of sector strategies, and an integrated environmental assessment of the alternative technologies employed - provides a model for other global environr ental ventures. 26 Opening Doors for New Energy Technologies From 1991 to mid-i1999, the GEF approved grants totaling $706 million for 72 energy efficiency and renewable energy projects in 45 countries. The total value of these projects exceeds $5 billion when co-financing and other resources from governments, C~~~~ O other donor agencies, regional development banks, the private sector, and the three GEF lv'm qav emy As ~o s project implementing agencies are factored in. An additional $121 million has been ~ks ~&~n pvails, approved in grants for 20 climate change "short-term response measures.' hy v *n Mk While these resources are still small in comparison with the problems, they are generating an impact in ~hog 01~o pvn- terms of reduced greenhouse gas emissions - and making a difference in quality of life at the local level. GEF Mats Karlsson, energy projects are often the first of their kind in the countries concerned. The portfolio as a whole, going former state Secretarty back eight years, represents an extensive knowledge base with a diverse range of approaches. In-country expe- for International rience and expertise are incorporated into project designs, along with substantial technical reviews. Approved Development projects reflect innovative, experimental attempts to promote technologies through new approaches and best Cooperation, Sweden practices. Programs are designed to build sustainable commercial markets, leverage financing from public and private sources, and facilitate technology diffusion. Direct project beneficiaries include govenment agencies, private sector firms, community organizations, households, and providers of public services. 27 IMPACT A fiscal 1999 review of these projects found impacts particularly visible in GEF-supported solar home systems, "The GEF has a very grid-connected wind and biomass power, energy efficient lighting, and fuel switching and production/recov- important role to play in ery initiatives. Solar power. Solar home and rural energy systems installed as a direct result of 20 GEF projects promise to put the road towards in place more than one million systems over the next few years, significantly expanding the numbers sustainable develop- currently installed in developing countries, now estimated at between 300,000 and 500,000. These projects pilot private sector delivery models and credit mechanisms that make systems more afford- ment_. Countries like able, pay "first cost" subsidies, build capacities of public agencies and private sector firms, enact codes and Maldives are among the standards, and put in place certification and testing institutions. In Zimbabwe, as a direct market impact of GEF's Zimbabwe Photovoltaics for Household and Community most vulnerable to the Use project, 10,000 solar home systems were installed with all but 300 provided by private sector dealers. In predicted impacts of the Sri Lanka Energy Services Delivery project, about 500 solar homes systems had been installed by mid-1999. The project's goal of 30,000 systems by 2002 may be accomplished, with assistance from two larger compa- climate change. With nies who are considering entering the market. over 80 percent of our Three subprojects in Bangladesh, Vietnam, and the Dominican Republic under GEF's small-and-medium-size enterprise program (administered by the International Finance Corporation) are also beginning to show land area just one meter impacts on markets for solar home systems. above sea leveL a rise of Grid-connected renewable technologies. Thirteen GEF projects incorporate grid-connected renewable energy technologies for generating electric power from wind, biomass, bagasse (a sugar cane by-product), mini- one meter could entirely hydroelectric, and geothermal resources. These projects: submerge out country:' * Demonstrate technologies and their commercial and economic potential s Build capacities of project developers, plant operators, and regulatory agencies Abdul Rasheed Hussein, * Develop regulatory and legal frameworks that encourage independent power producers and establish transparent, Minister of Planning, non-negotiable tariff structures Human Resources, and * Create financial mechanisms for project developers. Environment, Maldives For example, GEF's India Alternate Energy project helped catalyze market changes by raising awareness among investors and banking institutions of the viability of wind power technology and helping to push for lower import tariffs for wind systems. In parallel with direct project impacts (more than 270 megawatts of wind power), a total of 968 megawatts of wind farms were installed and operating in India by 1998, of which more than 900 megawatts is privately installed commercial power. New suppliers entered the market. Before the project there were three major companies involved in the wind industry; by 1998, as many as 26 were engaged in the wind turbine manufacturing industry, many with foreign partners. Efficient lighting. In Jamaica, Mexico, Poland, and Thailand, GEF has funded projects that promoted high efficien- cy lighting. The Poland and Mexico projects are fully complete, having together sold more than 3 million compact fluorescent light bulbs (CFLs). The Thailand project has had significant impacts on the Thai market for ordinary fluorescent tube lights, as well as CFLs. In Jamaica, a CFL sales program by the utility began slow- ly with mail solicitation only, but participation greatly accelerated once applicants could interact with a customer service representative. Fuel-switching and production recovery. GEF has approved 15 projects to demonstrate the commercial and tech- nical viability of fuel switching from coal to gas and of fuel production/recovery. Only one (China Coal-Bed Methane) is complete, but another three (China Sichuan Gas, India Bio-methanation, and Poland Coal-to-Gas projects) are substantially completed with documented impacts. The Future. GEF continues to pioneer other technologies with particular relevance for developing countries. Its December 1999 work program included support for a new solar thermal plant in Mexico, and the introduc- tion of fuel cell buses in Brazil and electric buses in Egypt - these last two projects providing mobility while cutting back on health-threatening air pollution in heavily populated urban areas. 28 *~~~~~~~~~~~~~0 41k 41 t ,0 ~ ~~~~~~~~~~~~~~~~~~~~choppnw z t I ke O Orf ^lt ' for arco a t 'te ye theden, it~~~~~~~~~~~~~~~I na,fi C' 5. x<4r .; A r ,-r t f..5e,>4 .> - s 4 4~~~~~~~~~~~~~~~~~~0 >0~~~~~~~~~~~~X - ' t ~ < oX _j w-fe~~~~ * T~ t Integrating Land,VWater& Biodiversity Conservation "The Niger River and its associated ecosystems r are dangerously fragile _ a _i- i because of the break in rainfall patterns and because of the pressure from low-income people who have no In Africa alone, 36 countries are affected by dryland degradation or deserti- alternatives." fication. However, the geography of land degradation is global, leaving no Soumalia Cisse, continent unaffected. Its environmental, social, and economic impacts are felt in more Minister of Finance, Mali than 110 countries, including more than 80 developing countries, where over one billion people are at risk from the effects of serious declines in productivity and livelihood. More than $350 million in GEF funds, and additional co-financing of more than twice that amount, have been allocated to combat deforestation and desertification. This funding is supporting dozens of projects addressing land degradation issues in the biodiversity, climate change, and intemational waters focal areas. BIODIVERSITY PROJECTS A project in Turkey is developing on-farm approaches to protect wild crops (wild wheat, chickpea, lentil, bar- ley), and woody species (pear, apple, walnut, chestnut, olive, pistachio) in the semi-arid region of Eastern Anatolia. In the Fertile Crescent (Lebanon, Jordan, and Syria) and in the oases of the Maghreb countries (Morocco, Algeria, and Tunisia), project activities focus on conserving genetic diversity of important food crops. The Ethiopia farmer-based approach to conserving African plant genetic resources integrates farm-level con- servation efforts with national and intemational gene bank programs. In Southeast Zimbabwe, a project supports transborder management of the Gonarhezou National Park locat- ed on the border with Mozambique and South Africa, to stimulate community wildlife management and eco- tourism. Wetlands within drylands (e.g., Hadejia-Nguru in Nigeria and Cuatro Ciengas in Coahuila, Mexico) serve as indispensable nesting and breeding grounds for migratory species, but they are vulnerable to land degradation. In the Baoule National Park and Biosphere Reserve in Mali, a GEF project addresses problems of overgrazing, buming of vegetation by herders and settlers, and poaching. CLIMATE CHANGE PROJECTS Solar home systems and rural energy services: altemative, off-grid energy systems, such as micro hydro mini grids and solar battery charging in Lao PDR; 800 households with hybrid PV/solar systems in Ghana, Sri Lanka, and Indonesia; and solar thermal-based rural energy in Morocco. Biomass-based energy systems: efficient use of biomass fuels from the sugar industry through construction of a power plant supplied by bagasse during the crop season and coal in the off season in Mauritius and 30 I3~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 41 A.4~~~~~~~~~~~~~~~~~~4 Surve'ying deaid t, ~~~~~~~lands: bur-ing~ 4G~a( the GBF CowAtLiUe c, , w ppo*d t o ti'~ ~~~ I. - ~~~~~~~~~~ ~ ~ ~ ~ ~~~F0s priqri. y pnogiaram6.* *I*15 K . .~~~AL construction of a globally replicable prototype unit on a commercial scale for the cogeneration of electricity, based on the gasification of wood chips or sugar cane bagasse in Brazil. Biomethanation technologies: biomethanation technologies and utilization of biogas to abate methane emissions from industrial, municipal, and agricultural waste in India and demonstration of methane recovery technologies in agricultural sites in China. INTERNATIONAL WATERS PROJECTS Regional seas and transboundary waters: catalytic action and support for inter-country coordination, including agreements and joint programs, to control land-based pollution and water contamination from agriculture and deforestation. Integrated coastal zone management: community-based and intersectoral approach to management of coastal and marine areas that facilitate linkages with agriculture and watershed management, such as the East Asian Seas project's two pilot sites in China and the Philippines. Freshwater management: In North Africa, the Sahel, and Southwest Asia, international aquifers are exploited beyond their recharging capacity and continue to be heavily polluted. GEF support is aimed at increasing sub-regional cooperation in managing shared aquifers, such as the Senegal and Mauritania project. Watershed management: In the Bermejo River Basin of Argentina and Brazil and in the Zambezi Action Plan and the East African Regional Seas Action Plan, project activities support agreements to manage transboundary watersheds, mountain areas, coastal sites, and drylands. 32 Tangible Partnerships . . [ .. \ + #~* e: ae pacex~ar Partnerships are critical as the GEF continues to explore and adopt new FmrmaOc3s,cROT- strategic and policy directions. For example, the GEF is considering how to further goveaca qal engage the private sector at both project and strategic levels; contingent financing is being 0 piloted as a way to reduce technology financing risks without the need for direct grants; new Elqg=co> 3 &5.~~ ~ ~ ~ 3; to t O 00 a . o - AM"4h ;=~~~~~~~~~~~ r A m- L t. .j r r k .¾As - t climate change, and protecting international waters. Since its inception in 1992, it has funded over 1,200 projects in Africa, North America and the Middle East, Asia and the Pacific, Europe, and Latin America and the Caribbean. GEF small grants are: * Supporting conservation and restoration of wild apple forests at the foothills of the Hi Alatau Mountains in Kaza- khstan and creating jobs through the manufacture of high-quality natural apple vinegar * Underwriting low-impact aquaculture in Mexico's Bay of Celestun, a protected area and noted bird habitat * Promoting solar-powered kitchens in rural Botswana * Addressing over-fishing and promoting alternative occupations in Thailand's Mekong River valley. A workshop for national coordinators was held in San Jose in 1999, providing the basis for coordinators to brief members of the national steering committees upon their return. It was preceded by a field trip to share first-hand some of the experiences of the more than 60 small grant projects in Costa Rica alone. MEDIUM-SIZE PROJECrS. Over $21 million was allocated by Council to medium-size projects in fiscal 1999. This category of GEF support, developed in partnership with non-govemmental organizations, provides funding on an expedited basis (approval takes six months on average). These projects receive expedited funding of not more than $1 million. Examples include: * A new $750,000 grant will fund activities to redirect commercial investment decisions to cleaner technologies by means of a technology transfer clearinghouse. In developing countries, local and international development and commercial banks provide local investors with venture capital for many energy-related industrial and commercial investments. Most loan officers in these institutions have little practical experience in evaluat- ing applications involving energy efficiency and renewable energy technologies. This project is providing appraisal services for alternative technologies carefully targeted to private sector borrowers and their lenders. This approach could prove replicable in other markets and sectors, and form the basis for a broader strategic partnership between the private sector and the GEE (UNEP) * A $750,000 grant to develop best practices and dissemination of lessons learned for dealing with the problem of 36 invasive species, ranked second among global threats to biodiversity. This project leverages substantial co-financing, twice the GEF allocation, in a joint venture with SCOPE (Scientific Committee on Problems of the Environment) and IUCN-The World Conservation Union (IUCN) to address the loss of biodiversity due to invasive exotic species through a scientifically based global strategy and action plan. (UNEP) * A $960,000 grant to develop partnerships to conserve and sustainably use the rich biological diversity of Venezuela's inland prairies known as "los llanos." This project will bring environmental groups, business representatives, and citizens organizations together to coordinate their respective conservation efforts and improve dissem- ination of information to key actors. (World Bank) * A $750,000 grant to develop effective and replicable mechanisms for enabling public participation in transboundary pollution reduction in the Danube River basin. (UJNDP) * A $900,000 grant to empower communities in Aleipata and Safata district to protect and manage some of Samoa's finest coral reefs, mangroves, and lagoons-and thereby conserve local fisheries which are the principal source of protein. Communities will establish and manage small marine protected areas to better conserve marine species and habitat and develop altemative livelihoods consistent with sustainable use of marine resources. (World Bank) * A $750,000 grant to regulate coffee harvesting in and around Uganda's Kibale forest, confining it to buffer zones and creating incentives to adhere scrupulously to tight control of location, timing, technique, and volume of extraction. The project seeks to conserve the globally important biodiversity of the forest by creating a financially sustainable partnership with local villages. (World Bank) SCIENTIFIC COMMUNITY. Meeting in New York in September 1998, GEF's scientific and technical advisory panel (STAP-see p. 59) identified mobilization of the wider scientific and technical community in GEF work as one of its major priorities for fiscal years 1999-2000. Activities include: convening national, regional, and sub-regional meetings with the scientific and techni- cal community in developing countries; sponsoring expert group workshops to contribute strategic advice to the GEF; strengthening relationships with existing scientific and technical networks; and making recommen- dations to the GEF on how to further integrate science into GEF operations through targeted research and/or regular GEF projects. STAP's efforts aim to: * Contribute to the strategic advice which STAP presents on GEF operations and programs * Contribute to the development of methods of assessing the efficacy of ongoing GEF programs * Assist in building capacity in and enabling developing countries to design and implement programs/projects that would further GEF objectives * Strengthen the scientific underpinning of GEF projects mainly through the inclusion of targeted research and monitoring components in the projects. The first in a series of meetings was convened in Rio de Janeiro in 1998. It took the form of brainstorming sessions, in collaboration with the Brazilian Academy of Sciences and the National Research Foundation of Brazil on the theme, "Integrating Science and Technology into GEF Work." The meeting was attended by scien- tists affiliated with scientific and research institutions in Brazil, Chile, Argentina, and Uruguay as well as Brazil's Ministries of Science, Technology, and Environment. A second meeting took place in Chennai, India, in 1999, held in collaboration with the Committee on Science and Technology Cooperation in Developing Countries (COSTED). This workshop attracted represen- tation from global and regional scientific and technical organizations, associations of scientists, and global research programs with major activities in developing countries, as well as individual scientists and technolo- gists. Recommendations from both meetings are helping to shape GEF's outreach efforts. During fiscal 1999, STAP also led a global effort to outline potential efforts involving production forests and contributed expert advice to GEF's work in the area of freshwater resources. 37 , j _Late afternoon, stone pine forest: Parks and other protected areas provide a refuge and a resource, protecting biodiversity and watersheds, and attracting tourists. S e.,'~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ *1N o' 1 i e<p4us siIti ii4 J~~iiB41 foFsts ~ock, iidbi treswere respiected ad t~mn Idegraodation go - - ~q4nAsdetzfi andtechoUgcal solutions. lze~reqarea reetbih t of en,omna GI~~~~~~~~~~~~~. 1818 HSi*4 Washig~ O3VA Te1ephoeiZ474~ Fax:1(QS I 24 internetwwgfe.g Printed on eyle ae