Document ofThe World Bank

Report No: 17131 GE

PROJECT APPRAISAL DOCUMENT

ONA

PROPOSED CREDIT

IN THE AMOUNT OF SDR 3.2 MILLION

AND A

GRANT

FROM THE GLOBAL ENVIRONMENT FACILITY

IN THE AMOUNT OF US $1.3 MILLION EQUIVALENT

TO

GEORGIA

FOR AN

INTEGRATED COASTAL MANAGEMENT PROJECT

November 24, 1998

Environmentally and Socially Sustainable Development Sector UnitEurope and Central Asia Region

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CURRENCY EQUIVALENTS

US$1.00= 1.4 Georgian LariUS$1.00 = 0.71 Special Drawing Rights (SDR)

(October 31, 1998)

ABBREVIATIONS AND ACRONYMS

AIOC Azerbaijan International Oil ConsortiumBSEP Black Sea Environmental ProgramBS-SAP Strategic Action Plan for the Rebabiiitation and Protection of the Black SeaCAS Country Assistance StrategyCEQMIS Coastal Environmental Quality Monitoring and Information SystemCQ Selection Based on Consultants' QualificationsDPA Department of Protected Areas, Nature Reserves and Hunting Management (Department

of Protected Areas)EA Environmental AssessmentESW Economic and Sector WorkEU TACIS European Union Technical Assistance for the Commonwealth of Independent StatesGEF Global Environment FacilityGICMP Georgia Integrated Coastal Management ProjectGIS Geographic Information SystemGoG Government of GeorgiaGPC Georgia Pipeline CompanyGPN General Procurement NoticeIBRID International Bank for Reconstruction and DevelopmentICB International Competitive Bidding!CZM integrated Coastal Zone ManagementIDA International Development AssociationIMF International Monetary Fund[MO International Maritime OrganizationIPIECA Intemnational Petroleum Industry Environmental Conservation AssociationIS International ShoppingKNP Kolkheti National ParkKNR Kobuleti Nature ReserveLCC Local,Consultative CommissionLCS Least Cost SelectionMEFRI Marine Ecology and Fisheries Research InstituteMIRP Georgia Municipal Infrastructure Rehabilitation ProjectMTS Management Information SystemMoE Ministry of Environment and Natural Resources Protection (Ministry of Environment)MoUC Ministry of Urbanization and ConstuctionNBF Not-Bank FinancedNCB National Competitive BiddingNEA" National Environmental Action PlanNGO Non-Governmental OrganizationNS National ShoppingPAG Project Advisory GroupPCD Project Concept DocumentPIP Project Implementation PlanPIU Project Implementation UnitQBS Quality-8ased SelectionQCBS Quality and Cost-Based SelectionRamsar Convention Convention on the Protection of Wetlands of International ImportanceSCC State Consultative Commission for ICZMSDR Special Drawing RightsSFB Selection Under a Fixed BudgetSOE Statement of ExpendituresSPN Special Procurement NoticeTF Trust FundTOR Terms of ReterenceUNDP United Nations Development ProgramWHO World Health OrganizationWWF World Wildlife Fund

Vice President: Johannes F. Linn, ECACountry Director: Judy rM O'Connor, ZCC03Sector Director Kevin Cleaver, ECSSDSector Leader: Mehele De Nevers, ECSSDProgram Team Leader. Kann J. Shepardsons, ECSSD

GeorgiaIntegrated Coastal Management Project

CONTENTS

A. Project Development Objective .................................................... 2

1. Project development objective and key perfortnance indicators ...................... 2

B. Strategic Context .................................................... 3

1. Sector-related CAS goal supported by the project ...................................... 32. Main sector issues and Government strategy ............................................ 43. Sector issues to be addressed by the project and strategic choices ................... 5

C. Project Description Summary .................................................... 5

1. Project components ................................................ 62. Key policy and institutional reformns supported by the project ....................... 93. Benefits and target population ................................... , 94. Institutional and implementation arrangements .................................. 10

D. Project Rationale ..................................... 12

1. Project alternatives considered and reasons for rejection ............................ 122. Major related projects financed by the Bank and GEF and/or other

development agencies ................................................... 133. Lessons learned and reflected in proposed project design ........................... 134. Indications of borrower commitment and ownership ................................. 145. Value added of Bank support in this project .......................................... 14

E. Summary Project Analyses ................................................... 14

1. Economic analysis ................................................... 142. Financial analysis ................................................... 153. Technical analysis ................................................... 154. Institutional analysis ................................................... 165. Social analysis ................................................... 166. Environmental assessment ................................................... 177. Participatory approach ................................................... 17

F. Sustainability and Risks ................................................... 19

1. Sustainability ................................................... 192. Critical risks ................................................... 193. Possible controversial aspects ................................................... 20

G. Main Loan Conditions ................................................... 21

1. Agreements Reached Prior to Negotiations ........................................ 212. Agreements Reached at Negotiations ............................................. 213. Negotiations Conditions ............................................. 21

4. Effectiveness Conditions ........................ 215. Disbursement Conditi ........................ 21

H. Readiness for Implementation ........................ 22

1. Compliance with Bank Policies .. ...................... 22

Annexes

Annex 1 Project Design SummaryAnnex 2 Project DescriptionAnnex 3 Estimated Project CostsAnnex 4 Cost-Benefit Analysis SummaryAnnex 5 Financial SummaryAnnex 6 Procurement and Disbursement ArrangementsAnnex 7 Project Processing Budget and ScheduleAnnex 8 Documents in the Project FileAnnex 9 Status of Bank Group Operations in GeorgiaAnnex 10 Country at a GlanceAnnt 11 GEF Incremental Cost AnalysisAnnex 12 President of Georgia Decree

Tables

Annex 6, Table Al Project Costs by Procurement ArrangementsAnnex 6, Table A2 Consultant Selection ArrangementsAnnex 6, Table B Thresholds for Procurement Methods and Prior ReviewAnnex 6, Table C Procurement PlanAnnex 6, Table Dl Estimated Disbursements IDA CreditAnnex 6, Table D2 Estimated Disbursements GEF GrantAnnex 6, Table El Allocation of IDA Credit ProceedsAnnex 6, Table E2 Allocation of GEF Grant ProceedsAnnex 11, Table F Incremental Cost Matrix

Maps

Map I Georgia and the Black SeaMap 2 Black Sea Coast and Wetlands Area, Project Sites

GeorgiaIntegrated Coastal Management Project

Project Appraisal Document

Europe and Central Asia Regional OfficeECCO3

Date: November 24,1998 Program Team Lead&r: Karin J. ShepardsonCountry Director: Judy M. O'Connor Sector Director: Kevin M. CleaverProject ID: Sector: Environment Program Objective Category: Environmentally SustainableGE-5091 1 DevelopmentGEF Supplement ID: GE-60009 Focal Area: BiodiversityLending Instrument: IDA Credit and GEF Program of Targeted Intervention: [] Yes [X] NoGrant

Project Financing Data [ Loan [X] Credit [] Guarantee [XI Grant

For Loans/Credits/Others:

Amount IDA: SDR 3.2 million (US$m 4.4 equivalent)Proposed GEF: SDR 1.0 million (US$m 1.3 equiv .;ent)terms:

[X ] Multicurrency [] Single Currency, specify SDRGrace period 10 [ Standard Variable [ Fixed [ LIBOR-based

(years):Years to 35maturity:

Commitment 0.5% On undisbursed credit balance (begins 60 days after signing unless waiver)fee:

Service charge: 0.75%

Financing plan (US$m):Source Local Foreign Total

Government of Georgia 0.9 0.0 0.9IDA 1.8 2.6 4.4Global Environment Facility (GEF) 1.3 0.0 1.3Government of the Netherlands (Grant) 0.0 1.0 1.0

Total 4.0 3.6 7.6Borrower: Government of GeorgiaGuarantor: N/AResponsible agency: Ministry of Environment

Estimated disbursements (Bank 1999 2000 2001 2002 2003 2004FY/US$M):(Combined IDA/GEF) 0.5 0.8 2.0 1.3 0.8 0.3Annual

Cumulative 0.5 1.3 3.3 4.6 5.4 5.7

Project implementation period: 5.5 years Expected effectiveness date: Jan. 15, 1999 Expected closing date:Dec. 30, 2004

A: Project Development Objective

1. Project development objective and key performance indicators (see Annex 1):

Project development objective: The project aims to strengthen institutions in Georgia to managethe coastal resources of the Black Sea by developing, testing and evaluating methods toeffectively integrate environmental planning and management into economic developmentactivities along the Black Sea coast.

Global development objective: The project also aims to assist Georgia in meeting its internationalcommitments under the Black Sea Environmental Program (BSEP) and to implement priorityactions outlined in the Georgia Biodiversity Strategy/Action Plan. These priorities includeconservation of biodiversity at sites of international significance on Georgia's Black Sea coast,such as the Kolkheti and Kobuleti wetland Ramsar sites; restoration of degraded habitats andresources within the Black Sea Large Marine Ecosystem; and participation in regional efforts tomanage and sustain public goods of a transnational character.

In line with these objectives, the project will work closely with the Ministry of Environment(MoE) and other key Agencies to carry out the following:

(a) Establish an institutional framework for integrated planning and management ofGeorgia's coastal resources that emphasizes coordination between stakeholders at thenational level and active participation of communities and interest groups at the locallevel;

(b) Restore and protect critical resources within coastal ecosystems through concrete actionsat the local, national and regional levels such as community outreach and education;introduction of controls on tree and reed harvesting, peat mining, and fishing; andpromotion of community based management and sustainable economic activities;

(c) Establish an environmental quality monitoring system and information network tosupport Georgia's national program of integrated coastal zone management (ICZM) andcomplement monitoring efforts under the regional BSEP;

(d) Enhance Georgia's ability to assess and address urgent coastal erosion concerns throughidentification of cost-effective solutions for follow-on investments;

(e) Develop a national oil spill contingency plan and oil pollution management capability forGeorgia, and assist the country in meeting its international commitments underConventions and Protocols for protection of the Black Sea Environment.

Key performance indicators include:

(a) Intersectoral consultative commissions for ICZM established and functioning accordingto agreed objectives and procedures at national and local levels

(b) Georgians trained in coastal resource planning and management tools (EA, land useplanning/zoning; protected area management; GIS) and public awareness and conflictresolution techniques

(c) Draft legislation outlining mandate and responsibilities of a coastal authority and codes ofconduct for coastal resource/landscape use prepared

(d) Legal status of KNP and KNR established and boundaries demarcated(e) Encroachment, illegal poaching and harvesting rates reduced over baseline conditions(f) Information node for Black Sea regional environmental monitoring network established

in Georgia(g) Computer links and information sub-nodes in collaborating institutions up and running(h) Oil spill contingency plan and financing plan developed and approved by governnent

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(i) Significant private sector involvement in oil pollution fund capitalization(j) Cost-effective options to address coastal erosion and municipal water use priorities

identified

B: Strategic Context

1. Sector-related Country Assistance Strategy (CAS) goal supported by the project.

CAS document number: 17000-GE Date of latest CAS discussion: September 12, 1997

(a) Protecting the environment and supporting sustainable natural resource management is oneof four main CAS objectives for Georgia. Among the associated issues identified in the CAS are:(i) that environmental concerns are not effectively integrated into economic policies; and that (ii)institutional arrangements to facilitate the mainstreaming of environmental planning andmanagement into economic sectors are weak. The lack of intersectoral coordination--particularlyin mainstreaming environment and natural resources management concerns into economicsectoral planning--contributes to fragmentation of environmental management, particularly inwater relat,d sectors, at-l. failure to address root causes of environmental degradation. Theproject will address the CAS priority in environment through activities which (i) will targetGeorgia's capacity for integrated management of the diverse economic sectors developing alongGeorgia's Black Sea coast and (ii) increase Georgia's capacity to mitigate impacts and reversetrends of environmental degradation in the coastal zone. This will be achieved throughinstitutional arrangements for interministerial coordination and stakeholder consultation in coastaldevelopment planning; through strengthening of the regulatory and enforcement framework foruse of coastal landscapes and resources; through monitoring and disseminating information on thecondition of coastal resources to guide decision making and build public support for protection ofthe Black Sea ecosystem; and through preventive measures to minimize environmentaldegradation and related economic impacts due to oil pollution and coastal erosion.

(b) GEF Operational Strategy / program objectives addressed by the project: The proposedoperation supports the objectives of the GEF Biodiversity focal areaunder operational programsfor both Coastal, Marine and Freshwater Ecosystems and Forest Ecosystems. Activities willconcentrate on the conservation and sustainable use of biodiversity in coastal forest wetlands andnearshore waters of Georgia which are of international importance. The Kolkheti and KobuletiWetlands along the Black Sea Coast of Western Georgia were designated as Ramsar sites(wetlands of international importance) and provide critical habitat for numerous species ofmigratory and wintering birds. These wetlands along the eastern coast of the Black Sea harborexceptional levels of species richness and endemism, unique higher order taxa and rare habitattypes. The project will support the conservation of these wetlands through establishment ofKolkheti National Park and Kobuleti Nature Reserve, significantly expanding the existing areaunder protection and supporting implementation of their management plans. In so doing theproject will assist Georgia in taking some of the first steps toward implementing its proposednational system of protected areas. In parallel with these efforts the project will introduce the useof integrated coastal management tools, such as coastal monitoring to evaluate trends in keyphysical and biological parameters within and outside protected areas. It will also help createintegrated land use plans for proposed future development of coastal landscapes (including urbanand port expansions adjacent to these wetlands), and adoption of zoning measures, engineeringbest practices, environmental assessment guidelines, and codes of conduct for economic activitiesin the coastal zone.

The project will complement objectives under the GEF International Waters focal area byinitiating actions to address transboundary issues such as oil pollution from accidental and

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operational spills related to the transshipment of Caspian Sea oil via Georgian ports along theBlack Sea, and by introducing a monitoring program for water quality, biodiversity and otherindicators of aquatic and terrestrial ecosystem health. These actions are linked toimplementation of the Bucharest Convention, and the related Strategic Action Plan for theRehabilitation and Protection of the Black Sea. By carrying out these activities Georgia willdemonstrate its leadership role in the region in advancing the shared objective of rehabilitatingand protecting a global public good-the Black Sea Large Marine Ecosystem.

2. Main sector issues and Government strategy:

The Black Sea plays a crucial role in the welfare of Georgia's population. Not only does itprovide essential goods and crucial links to markets in Europe for oil and other products, but ithas intrinsic ecological value and deeply rooted cultural and historic significance. Sustainabilityof Georgia's economic growth will depend, in part, on the gover'ment of Georgia's ability tointegrate development of the many productive sectors of the Black Sea Coast (including fisheries,marine transport, oil production, tourism, agriculture and forestry) into the national economy in away that does not diminish the natural and cultural values of this region, nor undermine its long-term productivity. Over the past decades, uncontrolled pollution from point and non-pointsources (particularly from the Danube drainage basin), coastal erosion intensified by humanintervention, over-fishing, alien species introductions, and off-shore dumping in the region havedevastated the Black Sea and its littoral zone. Now transshipment of Caspian Sea oil throughGeorgia to the Black Sea holds out the promise of significant revenues all the while threateningprospects for managing pollution risks along the Black Sea coast, rehabilitating once productivecoastal fisheries and wetlands, and revitalizing the tourism industry. The construction of an oilpipeline terminal and offshore loading facility at Supsa, along the central coast of Georgia,creates a substantial new risk from oil spills to the adjacent Kolkheti wetlands and the nearshoremarine environment of Georgia. Coastal erosion, aggravated by engineering works andregulation of rivers upstream, also threatens expension of ports and tourism in centers along thecoast. Lost revenues from these traditional sectors and the costs of mitigating futureenvironmental impacts from oil spills, erosion and urban pollution could have serious impacts onpublic sector resources and places strategic importance on sound environmental managementsystems. The forest and wetland ecosystems of KNP and KNR in particular are under threat as aresult of drainage of wetlands for agriculture and urban expansion, forest harvesting, illegalhunting, peat and gravel mining, pollution and invasion by non-native species.

With the change to a parliamentary democracy, Georgia has entered a new phase ofenvironmental activism. The Ministry of Environment (MoE), responsible for coordinatinggovernment efforts to protect and conserve the country's environment, has made importantprogress toward strengthening legal and regulatory instruments for improved enviromnentalmanagement in Georgia and has promoted the approval of major pieces of environnentallegislation. These include the "Environment Protection Law" (1996); the "Law onEnvironmental Permits" and the "Law on State Ecological Expertise". A NationalEnvironmental Action Plan (NEAP) prepared with Bank and Government of Netherlandsassistance, has been recently completed and is being proposed for formal adoption by theGovernment. The NEAP prioritizes investments to improve Georgia's environment and hasidentified implementation of a comprehensive Coastal Zone Management Program as one of six"highest priority" investments.

Georgia has signed and ratified the Bucharest Convention for the Protection of the Black SeaAgainst Pollution (1992), signed the Odessa Ministerial Declaration (1993), and signed theStrategic Action Plan for the Rehabilitation and Protection of the Black Sea (1996). The StrategicPlan identifies specific goals directly related to the ICZM process, namely: (i) adoption of a

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strategy and guidelines for the rehabilitation and the protection of the Black Sea, (ii)establishment of a national inter-sectoral ICZM Commission and (iii) adoption andimplementation of national legal and other instruments required to facilitate integrated coastalzone management.

The Government of Georgia ratified the Convention on Biodiversity in June 1994. Georgia hasnot yet ratified the Bonn Convention, addressing conservation of migratory species andtransboundary ecosystems. However in bilateral agreements with its neighbors Georgia hasreached agreements reflecting the Bonn Convention provisions. The National BiodiversityStrategy / Action Plan, currently in draft and expected to be finalized in 1998, has identified theKNP/KNR region as a center for biodiversity and project activities as a high priority for futureinvestment. The framework legislation on Protected Areas System was adopted in 1996 and thelaw on Wild Fauna Protection was adopted in 1997.

3. Sector issues to be addressed by the project and strategic choices:

In line with the NEAP and recent developments in environmental legislation, the proposed projectsupports the govemment's interests in strengthening institutional capacity for environmentalmanagement and ensuring that development along the Black Sea Coast is consistent withprinciples of environmentally and socially sustainable development. This will involve land useplanning, consultation with and participation of local stakeholders, environmental assessment andinformation tools to inform investment decisions and to promote a system of multiple, sustainableuse, consistent with Georgia's national development plans. It will also involve the drafting oflegislation that will clarify the roles and responsibilities of line agencies operating in the coastalzone, and the policy and legal framework under which economic activities in these sectors shouldproceed.

Such an integrated approach is essential to achieving Georgia's biodiversity conservationobjectives, within a proposed system of protected areas, as supported by the draft NationalBiodiversity Strategy. Protection of internationally important wetlands along Georgia's BlackSea coast at Kolkheti and Kobuleti-will be the objective of legislation now pending inParliament to establish these sites as national parks within the nation's system of protected areas.Increasing public awareness through information collection and dissemination, environmentaleducation and participation in coastal planning through local consultative committees and thesupport of NGOs and the clergy is an underlying theme in all components of the project. Thisstrategic approach will not only increase ownership of the project by stakeholders, it will improveprospects for sustainability of integrated coastal management beyond the life of the project.Finally, the project will support Georgia's international commitments to protect the Black Seathrough legislation, research and environmental monitoring and information exchange, in linewith recommendations outlined in the national ICZM report prepared in 1996 under the auspicesof the Black Sea Environmental Program.

C: Project Description Summary

The project is designed as a first step in the development of a national program for IntegratedCoastal Zone Management (ICZM) in Georgia and the implementation of the regional Black SeaStrategic Action Plan. Consistent with the need to build a strong institutional base as afoundation for ICZM, the emphasis of this initial project is on capacity building, creating anenabling environment for the introduction of improved management techniques, and focusinginvestments in the coastal zone. The project scope, therefore, includes the following components:

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Component Category Cost Incl. % of Bank-wc GEF': % ofContingencies Total financing financing Bank-

(US$M) (US$M) (IJS$M) financing(IDA/GEF)

ICZM Institutional Institution- 1.5 19 1.2 0.1 17%Capacity Building building/

ProjectManagement

Establishment of Physical/ 3.3 43 1.4 1.2 34%Kolkheti National Park Institutionaland Kobuleti NatureReserveEstablishment of Physical/ 1.9 25 1.8 0 24%Coastal Environmental InstitutionalQuality Monitoring &Infomiation SystemsEvaluation of Coastal Policy/ 0.5 6.5 0 0 0Erosion Institution

BuildingOil Spill Emergency Policy/ 0.5 6.5 0 0 0Response Institution-

I buildingTotal 7.6 100 4.4 1.3 57.4

1. Project Components:

Component 1. ICZM Institutional Capacity-Building ($1.5 million)

This component aims to establish an institutional and legal framework for Integrated CoastalManagement in Georgia through the development of institutional arrangements to facilitateintersect.oral planning and the participation of key stakeholder groups in coastal resource decisionmaking. This will be achieved through the creation of: (i) a State Consultative Commission forICZM; i(ii) the Working Group for the Advancement of ICZM; and (iii) three Local ICZMConsuluttive Commissions along the Black Sea Coast. In addition to these institutionalarrangenments, the project will also support the drafting of legislation that will, inter alia, clarifyadministrative authority for various activities/functional responsibilities in the coastal zone,articulate national policies and regulations for the use of coastal and marine resources, anddevelop codes of practice for development activities in the coastal zone. This componentsupports and promotes public awareness on coastal management issues through training and massmedia. It also introduces participatory based land use planning techniques and will help finalizethe National Park and Nature Reserve management plans.

A State Consultative Commission for ICZM (SCC) was formally established by PresidentialDecree prior to project negotiations. The SCC, coordinated by the Ministry of Environment andthe Ministry for Urbanization and Construction as lead agencies for ICZM, would consist ofrepresentatives of relevant government sectors and planning agencies, local authorities, academia,private sector, and the public. This body will serve as the principal forum for interp-eting and

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coordinating existing policies among the various sectors/stakeholders involved in coastal andmarine resource use along Georgia's Black Sea Coast. It will also be instrumental in guiding thedrafting of legislation for the Coastal Zone.

The Working Group for the Advancement of ICZM (ICZM WG) will be established as a multi-disciplinary entity housed in the Ministry of Environment, but with the full technical support ofrelevant ministries operating in the Coastal Zone. The WG will consist of staff from theseministries, who will be trained on state of the art equipment in the use ofGIS and other ICZMtools and techniques for integrated planning and management of the coastal zone. A ProjectImplementation Unit (PIU) with executive powers for overall project supervision andcoordination, and contracting and disbursement oversight in accordance with Government andBank procedures, will be housed within the MoE. The PIU/ICZM WG will also serve as thesecretariat for the SCC.

The PIU/ICZM WG will help establish a network of three Local ICZM ConsultativeCommissions (LCCs) in: Poti, Kolkheti, and Batumi. The purpose of the LCCs is to encouragestakeholder participation in establishing ICZM priorities at the municipal and local levels, wheredecisions by i -source users most closely affect the state of nearshore coastal ecosystems. Theproject rvill assist LCCs to facilitate and conduct community meetings and establish offices as aresource center for public comment and information. In Kolkheti, the primary purpose of theLCC (KNP Local Advisory Council) woulc )e to serve as a community based advisory body tothe National Park (mandated by protected area legislation). As part of its advisory functions, theKolkheti LLC will also provide input to park management plans and their implementation. ThePoti and Batumi LCCs would be more broadly focused and would involve multiple stakeholdersfrom different economic as well as social sectors, including the public sector, private andnongovernmental entities, and the clergy. The set-up and initial operation of these commissionsand KNP Council will be facilitated by PIU field coordinators in Poti and Batumi.

Component 2. Establishment of the Kolkheti National Park and Kobuleti Nature Reserve($3.2 million)

The objective of this protected areas component of the GICMP is to improve the protection andmanagement of threatened forest and wetland natural habitats within theKolkheti coastal region,and to integrate these protected areas into the broader development objectives of the coastalmanagement project.

Under the project, support would be provided for: (a) conservation of the biodiversity of theKolkheti region through protection, management, and restoration of unique plant communities;(b) establishment of infrastructure for improved biodiversity protection and development ofnature-based tourism in the region; (c) improved monitoring and applied research onbiodiversityand the effectiveness of conservation efforts; (d) protection of fish spawning grounds necessaryfor the protection of freshwater and marine biodiversity and their sustainable use; and (e)recovery of threatened agricultural biodiversity.

Proposed activities include:

(a) Creation of Kolkheti National Park and Kobuleti Nature Reserve. Legislation pending inParliament would establish Kolkheti National Park (KNP), as the first National Park in aseries of Protected Areas in Georgia. Adoption of this legislation will be a condition ofdisbursement on project component 2 (Section G3 (a)). All earmarked territory to beincluded in the KNP (approximately 44,850 hectares) will be state owned land and anypotential user right issues would be settled at the time of the adoption of the legislation.

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The proposed protected area will include different zones for varying degrees ofmanagement and activities including: a strict nature zone, a managed nature zone, arecuperation zone, a visitor zone, and a support zone in which existing agricultural andcultural activities would remain. The Kobuleti Nature Reserve (KNR), located adjacentto the Kolkheti wetlands 0.5 - 1.0 km from the coast, would encompass an area of 778hectares (Map 2). The project would finalize and implement the management plans forKolkheti National Park and Kobuleti Nature Reserve. These management plans willconsolidate measures to improve protection and management of the biodiversity of theKNP and KNR, including restoration of degraded habitats, control of illegal logging andhunting, and monitoring. The management plan will integrate the park's biodiversityprotection functions with regional development needs, such as tourism, sustainableagriculture and flood protection.

(b) Institutional Development. Support to Park Administration and Management. The projectwould assist with development of an effective park administration and management,through the foliowing:

(i) Protected Area Advisory Council. A local advisory council would be establishedto advise the directors of the Kolkheti National Park and Kobuleti Reserve andstakeholders in the support zone on issues related to establishment and operationof these protected areas. The advisory council would be comprised inter alia ofcommunity representatives, the private sector, NGOs, Department of Forestry,Ministry of Agriculture, Ministry of Environment, affected municipalities, andtourism authorities. This advisory council will advise the Department ofProtected Areas on such issues as dispute resolution with local communitiesrelated to establishment and operation of the protected areas. The advisorycouncil will also assist, in concert with the mass media program, in disseminatinginformation on project issues to local communities.

(ii) Professional Development and Training. Professional development and trainingactivities would be provided to administrative, scientific, and warden staff of theprotected areas. This training will include principles and practices of nationalpark administration, revenue generation, general management and conflictresolution techniques, and development of nature-based tourism and othereconomic activities for generating income to support the park system. The parksadministration training would result in production of an operation andadministration plan, including final job descriptions for all staff. Key park staffand specialists responsible for management regimes for the protected areas willreceive training in natural resources management. Wardens will be trained inpatrolling and enforcement.

(c) Biodiversity Monitoring and Applied Research The project would implement monitoringand applied research undertaken by park staff and specialist consultants to guide parkmanagement and evaluate the effectiveness of restoration activities. The activities to beundertaken include:

(i) Monitoring: Assessments to fill gaps in existing information onbiodiversity as abasis for National Park management in collaboration with EU TACIS. Followingthe collection of these data, specific biological and water quality parameterswould be monitored by park staff and specialists. The parameters, study designs,and the monitoring sites would be formulated to develop a baseline that wouldassist in evaluating the effectiveness of measures undertaken to improve the

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management and protection of the biodiversity of KNP and KNR. Thesemonitoring activities would complement rather than duplicate those undertakenunder the coastal quality monitoring component of the Project, and would beassociated with the development of GIS-compatible databases.

(ii) Research: This would include studies related to the restoration of degradedhabitats in the Park, analysis of eco-tourism potential and benefits to localcommunities, and changes in biodiversity associated with managementinterventions at the species and habitat levels.

Component 3. Establishment of a Coastal Environmental Quality Monitoring &Information System ($1.9 million)

Urgent needs for monitoring of coastal and off-shore water quality, bathing water, major ports,rivers and estuaries and major point sources of pollution were identified in an initial regionalstudy, commissioned by BSEP/EU-TACIS in cooperation with the Regional BSEP ProgramCoordination Unit (Istanbul). Project support would include: preparation of a feasibility study;development of new monitoring standards and regulation; procurement of necessarymeasurement, sampling, and analysis equipment for selected monitoring laboratories andagencies; establishment of an information system to integrate and support the monitoring andplanning work; initiating a beach flag program; organization of training programs; andestablishment of a monitoring and information network with nodes in the PIU/ICZM WG andcollaborating institutions in Tbilisi, Poti, Kolkheti, Kobuleti, and Batumi.

Component 4. Evaluation of Coastal Erosion ($0.5 million)

Coastal erosion is a serious problem along many parts of the Georgian coast. Much of thiserosion has been accelerated by human intervention, including river diversion, lakeimpoundment, sand mining and coastal engineering works. To assess the factors contributing tocoastal erosion, particularly in the risk-exposed areas of Poti (Rioni River-Mouth) and Batumi(Chorokhi River-Mouth), the Government of the Nertherlands will finance a comprehensiveanalysis of municipal water use (including watershed hydrology, sediment load, coastaldynamics) and infrastructure primarily in Poti, and Batumi. Based on these studies a plan forintegrated municipal water management would be developed. These studies would includeanalysis of cost effectiveness of existing interventions to control erosion and feasibility studies ofproposed options to address the most serious aspects of coastal erosion on a sustainable basis.Investment requirements would be identified for future interventions.

Component 5. Development of a National Oil Spill Contingency Plan and Marine PollutionControl Plan ($0.5 million)

To help Georgia implement the regional Black Sea Strategic Action Plan and to deal with existingand future risks of oil pollution, the Government of the Netherlands will provide support for thepreparation, in accordance with IMO guidelines, of a national oil spill contingency plan andemergency response program. This national plan will cover vessels, ports, and offshoreinstallations and would be supported by municipal plans for the major port cities of Poti andBatumi. The oil spill contingency plan currently being developed for the Supsa terminal andenvirons by the Georgia Pipeline Company (GPC), would articulate with and be consistent withstandards identified under the National Oil Spill Contingency Plan. Under this projectcomponent, support would also be provided for development of proposals for port receptionfacilities to deal with smaller operational spills and ship-based waste, and a user-based financingmechanism for oil spill emergency response. As in the previous component, identification of

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future investment opportunities for prevention and abatement of oil pollution (includingoperational spills) would be an important part of the work carried out under this component.

2. Key policy and institutional reforms supported by the project:

The key policy and institutional reforms supported by the project include: (a) introduction of aparticipatorn and locally based decision-making process for coastal zone management; (b)establishment of a framework for the introduction of economic instruments (including user feesand pollution funds) to help alleviate the fiscal impact of recurrent costs for coastal and marineenvironmental management and to serve as examples for cost recovery in other proposedprotected areas; (c) sectoral coordination and reduced fragmentation in the administration ofGeorgia's Black Sea coast; (d) establishment of a National Park (Kolkheti National Park andKobuleti Nature Reserve) within the larger proposed System of Protected Areas of Georgia; (e)the introduction of an environmental monitoring and information system consistent withinternational standards for the Black Sea region.

3. Benefits and target population:

Benefits: Th tional economy and the public at large would benefit from the results of theproject. The main benefits of the project would be: (a) maintenance of productive ecosystemsand critical natural habitats in the freshwater, estuarine and nearshore waters along the Black SeaCoast; (b) conservation of biodiversity and the demonstration of sustainable natural resource usein and around the Kolkheti National Park and Kobuleti Nature Reserve; (c) increased publicawareness related to ICZM; (d) improved coastal monitoring capacity and beach recreationconditions; (e) improved legal framework for coastal land use, resource use and oil operations; (f)increased overall capacity to manage the coastal zone for multiple use through the piloting ofparticipatory planning and management, conflict resolution, coastal information systems, and costrecovery techniques.

Target population: Target populations include the communities living within the coastal zone,communities living in and around the Kolkheti National Park, Poti and Batumi, and general usersof the coastal zone.

4. Institutional and implementation arrangements:

Implementation period: The majority of project activities will be completed within four years,however, a period of six years will be required to implement the protected areas component of theproject. A six year period is typical for biodiversity investments in protected area planning andmanagement which require a firn foundation in local institutions, technical capacity, and publicawareness for sustainable implementation.

Project oversight (policy guidance, etc.): A project advisory group (PAG) consisting of seniorrepresentatives from the key agencies involved in project implementation and chaired by theMoE, will provide project oversight and help resolve any interministerial coordination issues inproject implementation. The SCC for ICZM will provide overall policy guidance to the project.

Execuating agencies:A national Working Group for the Advancement of ICZM, building on earlier efforts initiated bythe Ministry of Environment, will be established under the aegis of the Ministry of Environment.It will consist of an interdisciplinary group seconded from the key ministries and departmnentsrepresented in the PAG. The MoE will house the ICZM WG and the Project ImplementationUnit (PIU), thereby enhancing both technical and administrative capacity within theMoE. The

10

WG/PIU, under the supervision of the PIU Director, will have responsibility for projectimplementation. It will coordinate with and be guided by an intersectoral policy and planningbody (the State Consultative Commission for ICZM), established by Presidential Decre,e(Section Gl (d)). The MoE wilprovide administrative space for the ICZM WG/PIU (SectionGl (g)).

Assignments of technical staff from the Ministry of Environment, Department of Protected Areas,Ministry of Health, Ministry of Urbanization and Construction and Ministry of Transport to theICZM WG will ensure collaboration of key ministries in the execution of the project, helpinstitutionalize technical expertise with the GoG, and build the foundation for cross sectoralcoordination in administration of the coastal zone. Through this process, the basis for creating anational Center of Excellence in ICZM would be established, with prospects for decentralizingactivities to the coast, once integration of national and local government responsibilities weremore clearly defined.

With the creation of a national park and nature reserve at Kolkheti and Kobuleti, the Departmnentof Protected Areas (DPA) will have an expanded role in management of these coastal wetlands.The project will support training of these staff in technical and administrative aspects of protectedarea management, and seconded DPA staff will work closely with the PIU in Tbilisi and withfield staff located on the coast to facilitate oversight of the KNP/KNR component and theprocurement of project related goods and services.

Project coordination:The PIU will be responsible for coordinating with other donors, such as the Government of theNetherlands, in the implementation of components which will be supported through parallelcofinancing. A Project Implementation Plan has been developed, which describes the proposedimplementation arrangements in more detail.

Accounting, financial reporting and auditing arrangements:Financial Management: The project financial management system, incluaing accounting,financial reporting and auditing arrangements, would be established prior to projecteffectiveness (Section G2 (a)). The financial and accounting procedures, together with adescription of project implementation unit (PIU) responsibilities for financial,manageriaL/technical and procurement are described in the Project Implementation Plan.

Accounting Information submitted to the Bank by the PIU would comply with internationalaccounting standards. Project accounts would be maintained by the PIU separately from anyother existing accounts. The PIU will manage two Special Accounts, one for the IDA Credit andone for the GEF Grant. The PIU, with responsibility for orderly and efficient recording andsafeguarding of the project assets and resources, would: (a) ensure accountability for projectfunds; (b) maintain records of the sources of funds (IDA/GEF/GOG) and the relevant accounts;(c) maintain internal controls to ensure that financial records are reliable, complete and providedon a timely basis; (d) report on the use of funds (IDA, GEF, GOG); (e) facilitate verification ofthese reports by independent auditors; and (f) provide information, as required, to the Bank.

Financial Reporting. During project implementation, the PIU would submit to the Bank a semi-annual Project Financial Management Report in the agreed format. The Report would include:(a) summary of Sources and Uses of Funds by project categories of expenditures, showing theIDA credit and GEF Grant in currency as determined by project design; (b) Summary ofExpenditures by project components, for the current fiscal year and accumulated to date; (c)Summary of Statement of Expenditures (SOEs) by individual application reference number andamount; (d) Special Account Statement providing reconciliation of amounts in the Special

11

Account; and (e) Expenditures Report by disbursement category during the current quarter andnext iquarter.

Financial Audit. The PIU would be responsible, on behalf of the Borrower, for providing to theBank, within 6 months after the end of each fiscal year the financial audits of the Project that areacceptable to the Bank. The PIU would have the required Financial Statements for each yearaudiled by an independent auditor acceptable to the Bank in accordance with standards thatare acceptable to the Bank (Section GI (e)). The auditor would be appointed in sufficient time tocarry out his/her responsibilities, including: (a) a review of the financial management systems atthe beginning of project implementation; and (b) periodical reviews of the project financialmanaLgement systems thereafter.

Monitoring and evaluation arrangements:Project monitoring would be the responsibility of the PIU/ICZM WG and the MoE. ThePIU/ICZM WG and MoE would furnish the Bank with reports on a regular basis including:(a) semi-annual progress and project financial management reports, (b) interim unauditedstatements ofproject accounts; and (c) additional information that the Bank may request fromtime to time (Section GI (f)).

Performance monitoring and evaluation would be undertaken by the Bank to ensure closemonitoring of the achievements of project objectives during implementation. Key performanceindicators proposed for monitoring can be found in Annex 1. A mid-term evaluation would beprepared during year three of the project. Lessons learned from implementation and the activitiesfinanced under the project would be captured in a synthesis report prepared by the borrower withthe assistance of the PIU.

D: Project Rationale

1. Project alternatives considered and reasonsfor rejection:

A comprehensive and capital-intensive ICZM project addressing all major coastal degradationand risks (including mitigation of impacts from coastal erosion and oil activities) was considered.This was excluded as it would have made the project considerably more complex to prepare andimplement. It would also have required a much stronger institutional and legal framework, and adifferent set of development priorities at the national level. In view of the perceived need for anincremental approach, beginning with capacity building, focused actions were selected to targetinstitutional strengthening needs, regulatory and immediate technical needs related to coastalmanaLgement, biodiversity protection, and mitigation of growing risks from coastal erosion and oilspills. The rational for GEF financing of this project is tied to biodiversity conservationobjectives and the successful development of a prototype for protected area management withinthe larger framework of a proposed system of protected areas for Georgia.

Inclusion of a larger component dealing with oil spills, ports and ship-based waste was alsoconsidered. This option was abandoned due to the uncertainty related to the "major oil"operations in Georgia, the lack of baseline data, and the high cost of investments required. Inview of these reasons, the project will focus on analyzing risk and liability related to oil spills andpreparation of an oil spill contingency plan and emergency response capability for control of oilpollution. Similarly, it was decided to limit the coastal erosion/municipal water resources usecomponent of the project to the preparation of priority management plan and feasibility studies toaddress severe erosion and pollution problems in the coastal areas of Poti and Batumi forimplementation in a subsequent investment phase.

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A separate biodiversity component through loan financing was also considered. Existinggovernment resources and international efforts directed to forest and wetland biodiversity will notensure the protection of globally significant biodiversity in the KNP and KNR designated areas.The GEF Alternative, with an incremental cost of US$1.32 million, would provide the means forthe creation of KNP and KNR, the implementation of their management plans, and the integrationof biodiversity conservation principles into regional and local development planning. The scopeand global benefits of the GEF Alternative are further outlined in Annex 11.

2. Major related projects financed by the Bank and GEF and/or other development agencies(completed, ongoing and planned):

Project Latest Supervision (Form 590)Ratings

(Bank-financed projects only)Implementation Development

Progress (IP) Objective (DO)Bank-financed

Municipal Infrastructure S SRehabilitation - MIRPOil Institution Building S SNational Environmental N/A N/AAction Plan (IDF/Bank)Biodiversity Strategy and N/A N/AActionPlan (GEF/Bank)Municipal Development and S SDecentralization ProjectForestry Biodiversity Project N/A N/AAgriculture II N/A N/ACultural Heritage Project S S

Other developmentagenciesUNDP/GEF (with Bank, Regional Black Sea N/A N/AEU TACIS and UNEP Environment Programsupport)

IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory

N/A = Project not yet under supervision or does not use the Bank 590 form.

3. Lessons learned and reflected in the proposedproject design:

The lessons from these and other Bank projects in the region underscore the need to (i) to obtainsupport at the highest levels to ensure commitment to project objectives and the necessaryallocation of resources for the project; (ii) focus on institutional strengthening and capacitybuilding in the technical and policy areas (this is particularly true for Integrated Coastal ZoneManagement, which requires an interdisciplinary approach). Lessons also suggest that (iii)

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simple focused projects tend to be more successful than complex and comprehensiveundertakings, (iv) and finally, building on existing PIUs to take advantage of knowledge andnetworks formed earlier can advance project design while institutionalizing expertise.

Other valuable lessons for establishing integrated coastal management in Georgia come fromexperience beyond the Black Sea, from regional environmental programs in the Baltic andMediterranean. These include the need to integrate coastal management planning into nationaldevelopment plans; the need to build ownership of the project locally through public awarenessand involvement in project aesign and implementation; and the need to focus on projectsustainability and resource mobilization to ensure continuity beyond the project implementationperiod. The successful introduction of economic instruments such as user fees and pollutionfines/funds to finance environmental management has been demonstrated in many of the moreindustrialized nations, and will be piloted in Georgia (to reduce costs of National Parkadministration and finance oil spill response operations) under this project.

The GI4CM project design reflects the above mentioned lessons in the incremental approach of theproject which attempts to build a sound foundation for ICZM through institutional strengtheningand local participation. The project has been highly supported in Georgia, and its design is basedon substantial efforts of Georgian NGOs and government partners prior to the Bank'sinvolvement. Parallel co-financing and execution of the two of the five components by theGovernment of Netherlands will help simplify the Bank's oversight of implementation. It willalso help encourage and strengthen the involvement of other donors to undertake complementaryactivities within the project's framework. Georgians involved in the coastal managementcomponent of the Municipal Infrastructure and Rehabilitation Project (MIRP) Credit have beenactively involved in the project design, and are expected to continue their involvement duringimplementation of the project.

4. Indications of borrower commitment and ownership:

Georgia has signed and ratified the Bucharest Convention for the Protection of the Black SeaAgainst Pollution (1992), signed the Odessa Ministerial Declaration (1993), and signed theStrategic Action Plan for the Rehabilitation and Protection of the Black Sea (1996). Thefoundation for the project came out of activities under a GEF grant component of the World Bankfinanced MIRP project, from Georgia's ongoing active involvement in the Regional Black Seaactivities, and from initiatives by local NGOs. All levels of Government (national, regional, andlocal) have participated in the project design and provided direct and written inputs. TheGeorlgian State Investment Council (chaired by the President), fully endorsed and approved theproject concept in its May, 1997 sess ia. The National Environmental Action Plan, a governmentdocument involving broad consultation, identified introduction of a comprehensive Coastal ZoneManaLgement Program as one of the highest priority investments. Implementation of the (smaller)initial ICZM program under the MIRP was considered successful.

5. Value added of Bank and GEFsupport in this project.

Coastal zone issues in Georgia are complex and require technical expertise, supportinginstitutional and legal frameworks, and solid financial support. Earlier ICZM activities inGeorgia were initiated under the regional BSEP and a GEF Grant as part of a MunicipalInfrastructure Rehabilitation Project. This current project is the next step, targeting concreteinterventions to improve the environmental quality of the Black Sea and ensure that futuredevelopment of its resources results in continuous and equitable benefits to Georgia withoutnegative impacts downstream. The Bank will facilitate this by providing the necessary financingfor the establishment of the Kolkheti National Park and Kobuleti Nature Reserve. Bank support

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under the project would also facilitate the development of legislation outlining the mandate andresponsibilities of an ICZM authority, and would help rationalize responsibilities betweenagencies for activities and land use in the coastal zone. Through its role as broker, the Bank hasand will continue to mobilize donor support for ICZM in Georgia. The successfulimplementation of the project should serve to provide valuable lessons learned for replicationwithin the coastal zone of Georgia, and in other Black Sea countries.

E: Summary Project Analysis (Detailed assessments are in the project file, see Annex 8)

1. Economic Analysis (supported by Annexes 4 and 11)

[] Cost-Benefit Analysis, qualitative discussion [ X]Cost Effectiveness Analysis (qualitativediscussion)[X ] Incremental Cost

An economic assessment for the project summarizes the costs and benefits which are likely toresult from implementing the project. Costs identified included the total project costs ($7.6million) and potential costs of foregone economic activity as a result of establishing theKolkhetiNational Park. Overall benefits discussed included public health benefits; tourism benefits;institutional benefits, or benefits gained by setting up more effective means for cooperation anddecision making; benefits from preservation of ecological resources including the functionalvalues of wetlands for flood protection, pollution filtration, and habitat values; benefits fromestablishing of an oil spill prevention program; and non-use values of nature protection such asexistence values and bequest values. Although most of the benefits and some of the costs cannotbe quantified, the analysis provides a more in-depth discussion as to why they are important. Thediscussion on tourism benefits examines a contingency valuation and a travel cost study that wereprepared as part of the regional Black Sea Environment Program to estimate potential gains oreconomic rent that Georgia could recover in beach related tourism as the Black Sea environmentimproves. What becomes apparent through the studies is that due to the trans-boundary nature ofthe coastal pollution problems, Georgia cannot maximize it's tourism benefits without widerregional cooperation. The project will support Georgia's participation in regional activities andmeeting its regional commitments as well as activities within Georgia's control that will reducecoastal pollution.

The types of foregone economic activities due to establishing the National Park and NatureReserve are generally known (hunting, fishing, firewood collection, reed collection, and peat andgravel mining), however the costs are not well identified. A number of measures have been takento minimize these costs in the project design through the local community consultation processwhich considered these factors in agreeing to proposed park boundaries. The project has alsobeen designed to minimize economic costs from foregone activities to the extent possible throughlocal involvement in the operations and management of the National Park. No land tenure orresettlement costs are anticipated because park boundaries were in part determined to avoid anyresettlement. Based on the benefits identified in the analysis, the interdependency of the qualityof the environment with its coastal uses, and the importance of Georgia's coast to the overalleconomy, the incremental benefits are expected to outweigh the incremental costs for theproposed project.

For the GEF component, the difference between the estimated total cost of the Baseline ScenarioUS$7.07 million and the estimated cost of the GEF Alternative US$9.03 million is US$1.96million, of which US$1.32 million is provided by GEF financing. This represents the incrementalcost for achieving sustainable global environmental benefits, as outlined in the Incremental CostAnalysis in Annex 11.

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2. Financial analysis (see Annex 5):

Fiscal impact:

Total government financing during the project implementation period is estimated to be $900,000USI) equivalent which is less than 0.1% of the 1998 budget of Georgia. Since the governmentcontribution is spread over a six year period, the annual fiscal impact will be even less. Theproject has been co-financed with a GEF Grant of US$1.3 million equivalent and a NetherlandsGovernment Grant of US$1.0 million equivalent to help reduce the fiscal burden of borro.ving forthis type of project. The project would not directly result in an increase in revenues to thegovernment, and may in the longer term result in some increased expenditures for operations andmaintenance of the Kolkheti National Park and Kobuleti Nature Reserve. However, governmentexpenditures for operations and maintenance of KNP and KNR would be minimized since thenumber of government staff positions are not expected to increase significantly, due to a transferof functions between the Forestry Department and the Department of Protected Areas. TheNational Park would gradually develop the capacity to generate and retain funds throughintroduction of user fees and other income earning activities which will help reduce pressure onthe state budget. Any tourism generated as a result of the project should also help increaseGeorgia's tax base as a result of increased consumer spending.

3. Technical analysis:

The project is technically justified on the basis of the urgent need for coastal protection inGeoirgia. This assessment is based on increasing risks from the transport, processing, andproduction of oil, conversion of coastal wetlands and poaching of wildlife, coastal erosion,contamination of surface and nearshore waters, and expanding port and urban sectors in theabsence of regional or local coastal management plans. On the international side, the increasingdeteirioration of environmental quality in the Black Sea and the costs of mitigating coastal andmarine degradation in the future, compel the countries of the region to act. The vulnerability ofinternationally important biodiversity resources and lost revenues from fisheries, tourism andother Black Sea amenities have evoked a commitment on the part of governments in the region toact individually and collectively on behalf of the public good. The project components under theproject have been selected to address not only issues of immediate concern, but even moreimportantly, to create the capacity among Georgians to respond to future acute or chronic criseswhich could threaten the viability of productive Black Sea ecosystems. Investments under thedifferent components are keyed to similar activities in other parts of the world. On theenvironmental quality monitoring side, equipment needs and training have been designed afterWHO standards introduced under the regional BSEP. International best practices are beingincorporated into the design of a coastal Information System, institutional strengthening, publicawareness and training, and a demonstration pilot within a proposed system of Protected Areas inGeorgia .

4. Institutional analysis:

a. Executing agencies: The ICZM WG and PIU would be responsible for technical coordinationand daily operation and monitoring of all program activities (working closely with theMoE, andPAG and the national and local ICZM Commissions). Specific activities would include: draftingof TORs and contracts for program components; identification and selection of programcontractors on a competitive basis; supervision of implementation; financial accounting; andreporting to supervisors. The project would lay the foundation for transforming this unit and its

16

counterparts in the field into a Center of Excellence for ICZM through the hiring of additionallocal staff, training, equipment, and technical assistance (national and international experts).Procurement and disbursement of project goods and services for the KNP/KNR componentswould be administered from the PIU. The establishment and operations of theKolkheti NationalPark and the Kobuleti Nature Reserve would be governed by a law which has already passed thefirst hearing in Parliament. The adoption of the law would be a condition for disbursement of thatcomponent.

b. Project management: The Ministry of Environment (MoE) would be responsible for overallproject management. Broad consultation and inter-sectoral coordination on the complex issue ofICZM would be enhanced by the creation of the State Interagency Consultative Commission(SCC) and later the network of three Local Consultative Committees (LCCs), one in Poti, one inKolkheti, and one in Batumi. Close collaboration already exists between the MoE and theDepartment of Protected Areas (DPA), a discrete, semi-autonomous governmental entity. Theirlinks would be further strengthened under the project.

5. Social analysis:

Participatory and infornation workshops were organized with local authorities under the initialICZM program, and subsequent consultation was done during project preparation. The projectdesign is based on the outcome of these activities and on the direct involvement of localcommunities.

Local ICZM consultative commissions will be established in three key locations along the coast(Poti, Batumi, and in the surrounding Kolkheti area) to ensure that benefits from the project aretargeted to coastal communities most at risk and to ensure stakeholder commitment to the projectand to its objectives well beyond the implementation period.

The Kolkheti National Park and Kobuleti Reserve project component has been designed incollaboration with Georgian stakeholders and builds on earlier protected area planning initiativesundertaken by Georgian NGOs in collaboration with the Govemnment of Georgia. RegionalSupport Groups, facilitated by World Wildlife Fund (WWF) Conservation Program in Georgiaand comprised of representatives from local government, civilian stakeholders, and mediaorganizations were established to raise public awareness of the proposed project activities andensure broad participation of local residents in planning and implementing comprehensive plansfor the proposed Protected Areas.

Particular emphasis during stakeholder discussions was given to efforts to develop managementplans for the support zone communities around the protected areas. This approach was pursuedwith the objective of fostering a sustainable economic development of the support zones whichdepend in part from resources located inside the protected areas, along with the development ofthe nature reserves. For example, resource harvesting (fishing, hunting, forestry) will be allowedin the support zones, but will be regulated and enforced. The National Park and Nature Reservestaff would give technical assistance to help local people manage the resources sustainably.There may be temporary or even permanent bans on certain activities, depending on the needs ofthe ecosystem or resource. The National Park and Nature Reserve staff, Regional SupportGroups, and Protection Areas Advisory Council have been designed to help foster commtnity-based management schemes and resolve disputes that could arise. The Kolkheti Local ProtectionAreas Advisory Council, to be established under the project will participate in the activities of theRegional Support Group for public awareness campaigns, field inventory, planning, andimplementation related to the management plan for the protected areas.

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6. Environmental assessment: Environmental Category [ ] A [ X] B [ ] C

Most of the project is focused on institutional strengthening, capacity building, and technicalassistance which, together with the protected areas component of the project, should have anoverall positive environmental impact. However, in the course of establishing the KolkhetiNational Park and Kobuleti Nature Reserve, limited civil works will be undertaken, such asinstallation of a perimeter fence, visitor center, hiking trails/boardwalks, etc. Potential negativeimpaLcts from this could include sedimentation, loss of a small fraction of the habitats within thereserve area where such infrastructure is installed, and secondary and tertiary impacts from accessby construction workers, and later tourists, to the areas. Implementation and enforcement of parkand reserve management plans, which is one of the main objectives of the project, will helpcont-ol access and minimize any adverse impacts from tourism. The project area is already undersevere threat from illegal wood cutting and hunting activities and thus enforcement of parkregulations will benefit the environment by reducing current impacts from these activities. Amore detailed description of these benefits can be found in the economic analysis discussion.

An environmental review would be conducted in accordance with Georgian laws and the WorldBank operational directive 4.01 on environmental assessment, focusing on the Kolkheti NationalPark and Kobuleti Nature Reserve component. Since the design of any proposed civil works willbe cosmpleted as part of the project implementation, the World Bank's acceptance of thisenvironmental review would be a condition of disbursement on the Kolkhet/Robuleti projectconqmor.ent (Section G3 (b)). Any issues raised in the environmental review will be incorporatedin the construction bidding documents and the works will be carried out in accordance withintennationally accepted practices to meet environmental requirements.

7. Pa2rticipatory approach:

The lproject has been developed with a participatory approach beginning with implementation ofthe GEF component of the MIRP Project which identified the need for many of the key projectelements through small grants for participatory activities such as public awareness and outreachby local NGOs, educational programs (summer camp) and poster contests for local schoolchildren. Participatory and information workshops were also organized with local authoritiesunder the initial ICZM program, and subsequent consultation has been done during projectpreparation. The project design is based on the outcome of these activities and on the directinvolvement of local communities.

The Kolkheti and Kobuleti Reserves project component has been designed in collaboration withGeorgian stakeholders. Regional Support Groups, facilitated by WWF Conservation Program inGeorgia and comprised of representatives from local government, civilian stakeholders, andmediia organizations were established to raise public awareness of the proposed project activitiesand ensure broad participation of local residents in planning and implementing comprehensiveplans for the proposed Protected Areas. Particular emphasis during stakeholder discussions wasgiven to efforts to develop management plans for the support zone communities around theprotected areas. Such approach was pursued with the objective of fostering a sustainableeconomic development of the support zones which depend in part on resources located inside theprotected areas, along with the development of the nature reserves. Concrete actions resultingfrom these were revisions to the proposed National Park boundaries.

Local consultative commissions will be established under the project in three key locations alongthe ciDast (Poti, Batumi, and in the surrounding Kolkheti area) to ensure that benefits from theproject are targeted to coastal communities and to ensure stakeholder commitment to the projectand tD its objectives well beyond the implementation period. The Local Advisory Council for

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Kolkheti will provide a forum to manage and ensure that local community interest are protected,and technical training under the project will include workshops in management and conflictresolution. In addition, all efforts will be made to ensure that local citizens andNGOs benefitfrom the establishment of the Park, especially through their involvement in park managementactivities. The Kolkheti Protected Area Management Plan calls for technical assistance inalternative forest and land use and agriculture in support zones to find win/win solutions forsustainable goods/services for the local people as well as environmental benefits of preservingbiodiversity.

a. Primary beneficiaries and other affected groups:

Primary beneficiaries of the project are

Beneficiaries/community groups CON/COL' CON/COL CON/COLIntermediary NGOs COL COL

IS/CON/COLAcademic institutions CON CON CONLocal government CON/COL CON/COL CON/COLOther donors IS/CON/COL IS/CON/COL

IS/CON/COL

Non-government organizations consulted or who have participated in project design include:WWF-Georgia, Georgian Orthodox Church, Georgia Greens, Georgia Society for Protection ofWildlife, Georgian Youth Eco Movement, Georgia Protected Areas Program, Aieti- Associationfor the Protection of the Black Sea, Poseidon Marine Association, Noah's Arc for the Recovery ofEndangered Species (NACRES), Grid-Tbilisi (G-Info.), Young Lawyers Association, Center forEnvironmental Research. Private sector entities consulted include the Georgia Pipeline Companyand rep.esentatives of Azerbaijan International Oil Consortium (AIOC).

b. Other key stakeholders:

Private sector developers and port management authorities

Participatory planning and management are the hallmarks of effective coastal management andare essential to the sustainability of any protected areas initiative. As described above under"Social" concerns, preparation of the project has involved the participation of local stakeholdersconcemed with the establishment of the KNP/KNR and with local authorities concerned withresponsibility for administering coastal resources and sectoral activities. Because creating publicawareness and building a constituency of local and national level support is an important factor inthe success of this project, environmental education activities will be incorporated into a numberof the project components. A meeting with NGOs working on Black Sea environmental issueswas held during pre-appraisal as *--as a meeting with officials of the Eastern Orthodox Church todiscuss opportunities for collaboration on promoting Black Sea environmental education. Ascience curriculum is now being developed for instruction of and use by clergy in all the BlackSea riparian countries to integrate ecological principles into religious teachings and communityoutreach. Project implementation will emphasize this participatory approach at the national andlocal levels to raise awareness about the project and its objectives, gain support of various interestgroups and provide a forum for resolving conflicts between stakeholders.

CON = consultation, COL = collaboration, IS = information sharing

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F: Sustainability and Risks

1. Sustainability:

The Government is committed up to the level of the President to the project, assuring strongpolitical will in support of this effort. Project sustainability will also be enhanced throughinstitutional arrangements that build capacity and ownership of the project among implementingagencies. In a twinning arrangement with the PIU, the ICZM Working Group would shareresponsibility for project execution. Through such an arrangement, capacity would be createdwithin govemment to facilitate integrated planning and management of coastal resources so as tomaxiimize benefits to a broad range of coastal resource users. Key aspects of project managementwould also be institutionalized within the WG to ensure sustainability of this function beyond thelife of the PIU. Because these staff would be seconded from existing positions in the ministries,or in the case of KNP/KNR staff, from other field locations in the Department of Protected Areas,substantial recruitment of new personnel for project implementation would not be necessary.Prospects for long-termn viability of the Protected Areas would be enhanced through revenuegenerating activities related to ecotourism, aquaculture, and other microenterprises that could besupported in the multiple use zone of the Park.

2. Critical Risks (reflecting assumptions in the fourth column of Annex 1):

Risk Risk Rating Risk Minimization Measure

Continuing GoG commitment (political and M Continuing dialogue between Bankfinancial) to project and GoG on project benefitsConitinuing political stability during project S International community isimplementation period providing substantial economic aid

and supporting policy reform andgood governance

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Risk Risk Rating Risk Minimization Measure

Potential delay in adoption of KNP/KNR M Active lobbying of Parliament bylegislation NGOs and line ministries for

passage of law; which is acondition of disbursement for thiscomponent (40% of total project)

Incentives are inadequate to encourage S-H Special status of KNP managementcompliance with coastal zone regulations and entity should provide flexibility inenvironmental policies by different interest salaries and performance incentivesgroups for staff; civil service refornn is

being launched with assistancefrom the Bank and IMF;enforcement will be strengthenedand market based instrumentsintroduced

Ability to recruit and retain qualified staff S-H A PIU and an ICZM WG beingduring and after project established within MoE to train

civil servant staff in state of the arttechniques for ICZM and create in-house capacity to manage; create asense of high professionalism andloyalty to the MoE

Cooperation between public sector and private M Legal analysis of distribution ofoil interests in developing capacity to respond risk and liability for oil spills acrossto oil spills public and private sector being

prepared; incentives to cooperatewill be identified

Overall Risk Rating M Adaptive management approachI may counteract risk.

Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N (Negligible or Low Risk)

3. Possible Controversial Aspects:

(a) The concept of introducing and retaining user charges for the Kolkheti NationalPark/Kobuleti Nature Reserve would require a new operating model and culture. Cost-recovery would not be an objective during the life of the project but would be introducedin time after achievement of public awareness programs, establishment of real servicesand marketing to foreign tourists. It will be necessary to introduce a two-tiered system ofuser fees to realize sufficient returns.

(b) Achieving interministerial cooperation with the MoE taking a lead role in ICZM andproject implementation may be difficult at the outset. Obtaining buy-in from keyministries and presidential support at the outset will be important. This will be supportedthrough the State Interagency Consultative Commission and letters of agreement betweenthe MoE and other key ministries involved in coastal activities.

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(c) Managing the Black Sea Coast of Georgia for multiple use-including conservation andtourism may be difficult in the face of increasing pressure for concessions to privateinvestors with regard to the transport and production of oil. The Oil Institution BuildingProject and the analysis of conditions in Georgia v a vis international standards and bestpractice with regard to oil spill liability and compensation may encourage adoption ofnecessary safeguards to manage risk of oil spills.

G: Main Loan Conditions

1. Agreements Reached at Negotiations

(a) All procurement activities under the project would follow the procedures as described inAnnex 6, Section 1 and pam. 4 Section C.

(b) Disbursement arrangements will follow the procedures described in Annex 6, Section H

(c) Establishment of a special account will follow the procedure described inAnnex 6, SectionII and Section C4, pam. 8.

(d) The functions of the PIU/ICZM WG and its managemert of the project activities will be asdescribed in Annex 6 and Section C4, para. 3.

(e) All project accounts will be audited as described in Annex 6, Section m and Section C4,para. 10.

(f) Reporting and evaluation of project activities will be as de,cribed Annex 6, Section IV andSection C4, para. 11.

(g) Confirmation of govemment committments to the project including on-going financialsupport of the PIU/ICZM WG and its government staff, as described Annex 6 andSection C4, paras. 3 and 4.

2. Eiffectiveness Conditions:

(a) Establishment of a financial management system to the satisfaction of the Bank, asdescribed in Section C4, para. 7.

3. Diisbursement Conditions:

(a) Passage of the Law establishing the Kolkheti National Park and Kobuleti Nature Reservewould be a condition of disbursement for Component 2, as described in Section Cl, pam. 7.

(b) Environmental review prepared to the satisfaction of the Bank would also be a condition ofdisbursement for Component 2, as described in Section E6, para. 2.

H. Fteadiness for Implementation[ ] The engineering design documents for the first year's activities are complete and ready for thestart of project implementation. (Engineering works would not begin until second year ofproject).[X] The Project Implementation Plan has been appraised and found to be realistic and ofsatisfactory quality.[] The following items are lacking and are discussed under loan conditions (Section G):

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(a) Establishment of a financial management system to the satisfaction of the Bank (condition ofproject effectiveness).

(b) Passage of the Law establishing the Kolkheti National Park and Kobuleti Nature Reserve as acondition of disbursement for Component 2.

(c) Environmental review prepared to the satisfaction of the Bank as a condition of disbursementfor Component 2.

I. Compliance with Bank Policies[X ] This project complies with all applicable Bank policies.[ ] The following exceptions to Bank policies are recommended for approval:

none recommended

Program Team Leader: Karin J. Shepardson

Acting Sector Director abody

Acting;COunt irecto yI Mu</le / /

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Annex IProject Design Summary

Georgia Integrated Coastal Management Project

Narrative Summary Key Performance Indicators Monitoringand - riiapf tonsEvaluation ';

Sector-related CAS Goal: (Goal to Bank Mission)Protect the integrity of * Capacity to address * ESW work * Productive coastalthreatened natural systems that Environmental degradation (periodic) systems contribute tocontribute to sustainable of the Black Sea coast * National reports local and nationaleconomic development in established. * Marine environment economies and theGeorgia * Data on state of coastal and information nodes; welfare of the population

marine environment Web sites * The costs of inactionavailable to decision makers. outweigh investments in

enviromnental planningand management

Project Development (Objective to Goal)Objective:To develop, test, and replicate * Coordination mechanism for * Presidential decrees * Effective coastal zonemethods to effectively integrate intersectoral planning and legislation and management contributesenvironmental concerns into management of coastal regulation to the achievement ofcoastal development planning at resources established at * Records of sustainable economicnational and local levels national and local levels. consultative and development at theGlobal Objective: * Provision made for advisory group national and local levelTo assist Georgia in meeting its introducing and retaining meetings * Continuing governmentinternational commitments to user fees for protected areas. * Progress and commitmentprotect the Black Sea under the * User based financing supervision reports * Continuing politicalBucharest Convention and the mechanism(s) for control of * IMO reports, official stabilityStrategic Action Plan for oil pollution piloted. reports and * NEAP adopted andRehabilitation and Protection of * Specialists trained in coastal supervision reports implementedthe Black Sea resource planning and * Park legislation;

management tools (EA, collected feesland-use planning/zoning; * Annual Regional &coastal monitoring; GIS) and National Reportsenvironmental education.

* Information node for Black * Materials available;Sea regional coastal focus groupenvironmental monitoring interviewsnetwork established in * PIU progress reportsGeorgia. * Focus group reports,

* Black Sea environmental interviews with localeducation materials governmentdeveloped for formal andinformal sectors (curricular,mass media, trainingmaterials).

* National park staff trained.* Local stakeholder

participation facilitated incoastal developmentmanagement decisions.

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Narrative Summary Key Performance Indicators Monitoring and Critial AssumptionsEvaloation

Outputs: (Outputs to Objective)la. Institutional arrangements * The first elements of a * PIU reports * Incentives are adequatefor ICZM established at national cohesive institutional and * Supervision reports, to encourage complianceand local levels legislative framework in mid-term report and with coastal zonelb. ICZM legislation drafted for place; consultative ICR regulations and policiesregulation of development commissions in place and * Evaluation mission by different interestactivities in the coastal zone functioning effectively reports (mid-term & groups

final) * NEAP adopted andimplemented

2. National Park demarcated, * Poaching and harvesting * Park management * KNP/KNR legislationbasic infrastructure provided, rates reduced compared to reports adoptedand environmental degradation baseline conditions; no new * Regular site visits * NEAP adopted andtrends stabilized within the Park encroachment within Park a Social assessment implemented

boundaries3. Coastal Zone Monitoring and * High demand for * Regular review of . Data will be madeInformation System activated information from user status of data bases available for access byand functioning for protection of groups; effective warning and information public and private userpublic health and natural systems implemented; systems groupssystems hardware and software * Periodic review of * User groups will have an

effectively used in their use through interest in accessing andcollaborating institutions contacts with a using data for planning

diversity of user and managementgroups

4, Future investment program to * Favorable response and * Draft and final * Cost effectivecontrol coastal erosion follow-up by GoG and feasibility study interventions can beprioritized and associated risks donors * Implementation plan identifiedquantified adopted by GoG * Government and local

communities prepared toimplementrecommendations

5. Tiered response strategy and * Contingency plan and * Draft and final * Government prepared toimplementation plan developed financing plan developed strategy reports give priority tofor oil spills and approved by * Development of environmental aspects of

government; private sector agreements between oil developmentparticipation forthcoming Govermment and * Sister project

private sector implemented for oilinstitution building

* Private sector prepared tocooperate on oil spillprevention and control

Project Components/Sub- Inputs: (budget for each (Components to Outputs)components: component)ICZM Institutional Capacity . US$1.4 million * Progress reports * National and localBuilding: (quarterly) governments committed

* ICZM WG established * Disbursement to ICZM* Draft legislation reports (quarterly) * Legislation developed in* Coastal land use planning * Supervision reports a tinely manner. ~~~~* Consultative commission* Consultative commission * Minutes of m onsatregularissis

commission meet on a regular basismeetings * Adequate and timely

counterpart fimding

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-Narrative Summary Key Periormance Indicators Monitoring and Critical Asuumptlni-.-: Q ; ;<; }t i - . - .- -~~EvaluatiODn . 'tm

Kolkheti National Park and * US$3.3 million * Progress reports * Kolkheti National ParkKobuleti Nature Reserve: * Disbursement legislation adopted by

* Management plans prepared reports Parliament* Biodiversity monitoring * Supervision reports * Cooperation between* Training/public awareness * Regular site visits national and local* Habitat restoration * Monitoring of Coventt

chne agis a Cooperation at the* Research changes agamst community level

baseline data* Management programs

can be implementedunder local conditions

* Ability to recruit andretain qualified,dedicated staff duringand after project

* Qualified individualsavailable to receivetraining

Coastal Monitoring and * US$1.9 million * Progress reports * Access will be providedInformation: * Disbursement to information and data

* Training reports * Equipment will be* Coastal monitoring program * Supervision reports properly maintained and* GIS nodes and network * Review training effectively utilized

prograrns and course * High quality team ofevaluations international and local

* Review of users' experts is contracted forviews on systemsand data

Evaluation of Coastal Erosion * USS0.5 million * Progress reports * Report identifies cost-and Cost Effective Interventions * Disbursement effective interventions toin municipal water resource use reports control erosion

* Supervision reports * Sustained national and* Review of draft and local government interest

fnal feasibility study in implementation of* Implementation plan actions

adopted by GoG * Non-investmentmeasures for erosioncontrol through land andwater use managementare also adopted

26

r.x S < X E~~~~~i e Pl rfkrinceodktr .--M. t

Oil Pollution Contingency * USS0.5 million * Progress reports * Cooperation betweenPlanning & Emergency a Disbursement public and private sectorResponse reports interests in oil spill

* Supervision reports contingency planning* Draft and final * Interest exists with

strategy reports Government and private* Development of sector for follow-on

agreements between actions which involveGovernment and management andprivate sector investment measures

* Ability to recruit andretain qualified,dedicated staff forplanning andimplementation phaseactivities

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Annex 2

Georgia Integrated Coastal Management Project

PROJECT DESCRIPTION

Introduction

1. Georgia's coastline extends approximately 310 km along the western reaches ofthe Black Sea. The Georgian coastal zone extends from the plains between the Mountainranges of the Greater and Lesser Caucasus to the northeast and south east and thewetlands of Kolkheti and Kobuleti to the West. The topography is characterized bywetlands and marshes along much of the coast and steep cliffs and mountains in the northand south. Major coastal habitats include near-shore marine fishery areas, coastal barrierdunes, extensive peat bogs, coastal deltas and braided rivers, which are characterized byhigh levels of biological diversity and organic productivity. Much of the coastal zone isdensely populated: major coastal cities are Batumi (140,000), Poti (50,000), and Sukhumi(120,000) in Abkhazia. However, due to the current political instability in Abkhazia, thenorthern half of Georgia's coastal zone which falls within the borders of this autonomousrepublic is currently defacto outside the administration of the GoG.

2. Upstream human activities have put increasing pressure on coastal zoneecosystems along the Black Sea, while further downstream over-fishing and off-shoredumping have devastated marine resources. In general, fragmented and weakmanagement of natural resources at the regional, national and international levels hasresulted in uncontrolled pollution, unsustainable exploitation and loss of productivehabitats in the coastal zone. This undermining of the productive resource base of theBlack Sea has the potential to severely compromise Georgia's future economicdevelopment prospects and calls for strategic planning and integrated.management of themultiple resources and landscapes along Georgia's Black Sea coast.

3. Georgia is not alone in facing the problems of a deteriorating Black Seaenvironment. The six riparians bordering the Black Sea recognized their commonchallenge and the need to jointly address the spiraling degradation of what was once aflourishing ecosystem.

4. In the fall of 1996, a Strategic Action Plan for the Rehabilitation and Protection ofthe Black Sea (BS-SAP), prepared by all six littoral states, was signed and the process ofimplementing this regional strategy begun. The establishment of national programs forintegrated coastal management underlies the strategy and is a unifying theme in theability of riparians to optimize benefit flows from the Black Sea and to meet the regionalobjective of protecting and rehabilitating this shared marine ecosystem.

5. The Georgia Integrated Coastal Management Project is designed as a first steptoward this long-term goal. Consistent with the need to build a strong institutional base asa foundation for ICZM, the emphasis of this initial project is on capacity building andcreating an enabling environment for the introduction of improved management

28

techniques and investments in the coastal zone. The project scope, therefore, includes thefollowing components:

Project Component 1: ICZM Institutional Capacity Building (US$1.5 million)

6. This component aims to establish an ICZM institutional and legal frameworkthrough: (i) a State Consultative Commission for ICZM, (ii) the creation of an operationalICZM Unit, the Working Group for the Advancement of ICZM; (iii) three Local ICZMConsultative Commissions; and (iv) preparation and completion of Park ManagementPlans. In addition to these institutional arrangements to facilitate inter-sectoral planningand the participation of multiple stakeholder groups in coastal resource decision making,the project will also support the drafting of legislation and codes of practice for thecoastal zone.

7. The State Consultative Commission for ICZM (SCC) will serve as the principalforurn for interpreting and coordinating existing policies among the varioussectors/stakeholders involved in coastal and marine resource use along Georgia's BlackSea Coast. It will also be instrumental in guiding the drafting of legislation for theCoastal Zone The SCC would be coordinated by the Ministry of Environment andMinistry of Urbanization and Construction as the lead agencies for ICZM, and wouldconsist of representatives of relevant government sectoral and planning agencies, localauthiorities, academia, private sector, and the public. The SCC was fornally establishedby a Presidential Decree (# 608) on October 25, 1998.

8. The Working Group for the Advancement of ICZM (ICZM WG) will beestablished as an independent, multi-disciplinary entity with the full technical support ofrelevant government agencies (Ministry of Environment, Ministry of Urbanization andConstruction, Department of Protected Areas, Ministry of Health, and Ministry ofTransport) with interests in the Coastal Zone. The ICZM WG will provide a workingspace for staff seconded from these ministries, and for training on state of the artequipment in the use of GIS and other ICZM tools and techniques for integrated planningand management of the coastal zone. A Project Implementation Unit (PIU) withexec:utive powers for overall project supervision and coordination, including contractingand disbursement oversight in accordance with Government and Bank procedures, will behoused in MoE, and work in close cooperation with the ICZM WG.

9. With project funded technical assistance, the WG will undertake various activitiessuchi as working with the SCC to draft ICZM legislation outlining the mandate andresponsibilities of a coastal authority and codes of conduct for development activities inthe coastal zone; facilitating technical assistance for the preparation of coastal land useplans at key points along the Black Sea Coast; establishing a coastal environmentinfonrmation system; preparing the first Report on the State of the Environment in theGeorgian Coastal Zone based on monitoring data and information analysis; launching atraining and public awareness program; and initiating and supervising the activities underthe other components of the project. The WG will liaise with the national and local ICZMconsultative commission and with concerned public and private institutions, includingNGOs. The WG will be provided with equipment, training, and hands on technicalassistance to promote its development into a Center of Excellence for ICZM in Georgia.

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10. The PIU/ICZM WG will help establish a network of three Local ICZMConsultative Commission (LCCs) in: Poti, Kolkheti, and Batumi. The purpose of theLCCs is to encourage stakeholder participation in establishing ICZM priorities at themunicipal and local levels, where decisions by resource users most closely affect the stateof nearshore coastal ecosystems. In Kolkheti, the primary purpose of the LCC (KNPAdvisory Council) would be to serve as a community based advisory body to theNational Park and Nature Reserve, mandated by protected area legislation, to provideinput to park management plans and their implementation. The Poti and Batumi LCCswould be more broadly focused and would involve multiple stakeholders from differenteconomic as well as social sectors, including the public sector, private and non-governmental entities, and the clergy. The set-up and initial operation of thesecommissions will be facilitated by PIU field coordinators in Poti and Batumi.

1l. The existing management guidelines for KNP and KNR funded under a smallgrant from GEF provide a foundation for preparing comprehensive management plans forthese protected areas under the project. The project will finalize and implement themanagement plans. These plans will unify various measures to improve protection andmanagement of the biodiversity of the KNP and KNR, including restoration of degradedhabitats, control of illegal logging and hunting, and monitoring. The management planswill integrate the park's biodiversity protection functions with regional developmentneeds, such as tourism and flood protection.

Project Component 2: Establishment of the Kolkheti National Park and KobuletiNature Reserve (US$3.2 million)

Background

12. Project component two focuses on the establishment and management of twoprotected areas, the Kolkheti National Park and the Kobuleti Nature Reserve. The projectwill also integrate conservation of these two wetland sites into the broader developmentobjectives of coastal zone management in Georgia

13. The proposed Kolkheti National Park is an approximately 45,000 hectare area thatlies just to the north of the Rioni River near it's mouth, and approximately 10 kilometersto the south of the Abkhazia border. The Kolkheti National Park would be establishedaround an area within the larger Kolkheti wetlands lowland complex that was designatedas a Ramsar (a wetland of international significance) site in 1996. The proposed KobuletiNature Reserve (KNR) is a smaller, approximately 780 hectare, area located just inlandfrom the Black Sea coast near the city of Kobuleti, which also received globaldesignation as a Ramsar site. It is also part of the larger Kolkheti wetlands lowlandscomplex. Both proposed protected areas support rare and relic communities such as peatbogs, Alder (Alnus barbata), and other forest types from the Tertiary period. The twoprotected areas consist of subtropical forests and a wetland complex and contain highlevels of endemism and floral diversity, as well as some of the most significant andthreatened ecosystems in Georgia. The region also provides critical habitat for numerousspecies of migratory and wintering birds. These forest and wetland ecosystems are underthreat as a result of drainage of wetlands for agricultural and urban use, forest harvesting,illegal hunting, peat and gravel mining, pollution, and invasion by non-native species. In

30

addition to conserving terrestrial communities, the Kolkheti National Park would alsoprotect intercoastal waters of the Black Sea and would be the first protected marineenvironment in Georgia.

14. In 1992, the World Wildlife Fund Conservation Program in Georgia (WWF-Georgia) identified the Kolkheti wetlands as one of seven potential national park sites inGeorgia, and in 1994 drafted, with support from the BSEP/GEF ICZM program,guidelines for the development of the park. Framework legislation supporting a proposedsystem of Protected Areas in Georgia, including the proposed Kolkheti National Park,was enacted in December 1996. This law requires separate legislation to finalizeindividual park boundaries and administrative arrangements. A draft law for establishingthe Kolkheti National Park (KNP) passed the first of three Parliament hearings inDec-ember 1997. The second and third (final) readings will incorporate comments fromstakeholders including the local comrmunities and would occur consecutively. Finalpassage of this legislation is a condition of disbursement on the overall Kolkheti/Kobuletiprojiect component. Summary information on the KNP and KNR are provided in the tablebelow.

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Kolkheti National Park and Kobuleti Nature ReserveSummary of Zones, Planned Use, and Area

Zones Permitted Use Approximate AreaArea (hectares)

(hectares) KobuletiKolkheti Nature

National Park ReserveStrict Nature Monitoring, scientific research, and 18230 330Zone educational activities (3640 marine)Managed Nature Nature-based tourism, educational 23850 420Zone activities and, where approved, (10730

sustainable use (fishing, grazing, marine)forestry)

Recuperation Activities consistent with restoration 2680Zone of degraded ecosystemsVisitor Zone and Educational, research, and tourism 1.4Environmental activitiesEducation ZoneAdministration Administrative infrastructure for park 25 30Zone management (headquarters, visitors

center, etc.)Historic-Cultural Protection and restoration of 65Zone identified historic and cultural

monuments44850 780

Totals (14370marine)

Support (Multiple 74700Use) Zone

Objectives

15. The objective of the protected areas component of the GICMP is to improve theprotection and management of threatened forest and wetland natural habitats within theKolkheti coastal region, and to integrate these protected areas into the broaderdevelopment objectives of the coastal management project.

Proposed Activities

Creation of Kolkheti National Park and Kobuleti Nature Reserve

16. In accordance with the 1996 Law on Protected Areas Systems, new protectedareas are established by law and enacted by Parliament. The project will assist with theestablishment and operation of a local Advisory Council necessary for the park andreserve's long-term viability. In particular, the project will finance:

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(a) Establishment of Park Infrastructure. The project will fund theinfrastructure for establishing and managing the new/expanded nationalpark and reserve as a necessary means to achieving the project'sobjectives. The infrastructure may include establishment of the park andreserve boundaries, limited fencing of sensitive habitats to mitigategrazing impacts, and construction of an administration and visitors center,guard stations and checkpoints and limited infrastructure needed toaccommodate and manage nature-based tourism such as hiking trails,observation towers for birdwatching, and information centers for tourists.

(b) Environmental Education. The project will raise the level ofenvironmental awareness and understanding among the local and regionalpopulation. This will be accomplished through interpretive materials onthe ecology of the Kolkheti ecosystems and the connection to the cultural-historical heritage of the region, clergy and teacher education seminars,and ecological education camps for school children.

(c) Habitat Restoration. The project will develop and implement biodiversityrestoration activities in the national park and support zone. These include:restoration of species diversity in a managed coastal lowland forest,development of a restoration plan for a degraded wetland, and support forthe recovery of a millet grain variety that represents part of the Georgianplant genetic diversity.

(d) Land Use Planning Studies. The potential for nature-based tourism inGeorgia is excellent due to its scenic landscapes, and rich cultural andbiological diversity. The project will provide technical assistance todevelop a nature-based tourism plan for KNP and KNR, includingmechanisms to avoid impacts to sensitive habitats. Other studies includeinput to regional development planning and alternative land use practicesin forests and agricultural lands. The tourism plan will be developed inpartnership with the Georgian private sector, and with local communitiesin the vicinities of the protected areas.

Institutional Development: Support to Park Administration and Management

11. The project will assist with development of effective park administration andmanagement, through the following:

(a) Protected Area Advisory Council A local advisory Council will beestablished to advise the director of KNP and KNR and stakeholders in thesupport zone on issues related to establishment and operation of theseprotected areas. The advisory board will be comprised of localrepresentatives of the private sector, Department of Forestry, Ministry ofAgriculture, Ministry of Environment, affected municipalities, and tourismauthorities. This advisory council will advise the Department of ProtectedAreas on such issues as dispute resolution. It will also assist, in concert

33

with the mass media program, in disseminating information on projectissues to local communities.

(b) Professional Development and Training. Professional development andtraining activities will be provided to administrative, scientific, andwarden staff of the protected areas. This training will include principlesand practices of national park administration, revenue generation,development of nature-based tourism and other appropriate economicactivities for generating income to support the park system. The parkadministration training will result in production of an operation andadministration plan, including final job descriptions for all staff. Key parkstaff and specialists responsible for management regimes for the protectedareas will receive training in natural resources management. Wardens willbe trained in patrolling and enforcement.

Biodiversity Monitoring and Applied Research

12. The project will implement monitoring and applied research undertaken by parkstaff and specialist consultants to guide park management and evaluate the effectivenessof restoration activities. The results of these monitoring efforts will be incorporated into acoastal environmental information system to be supported under the Component Three ofthe project

Project Component 3: Establishment of a Coastal Environmental QualityMonitoring and Information System (US$1.9 million)

Background

13. An urgent need to monitor the quality of near-shore (beach) and off-shore waters,rivers and estuaries, as well as ports and sources of pollution, was identified in a regionalstudy commissioned by the BSEP/EU TACIS in 1994. Untreated sewage, municipalwaste, pollution from dilapidated oil facilities, ship waste, industrial pollution andagricultural runoff represent a known but insufficiently measured threat to both publichealth and the coastal ecosystem, and negatively impact the potential for tourismdevelopment.

14. Georgia's existing system of environmental monitoring has deteriorated duringthe years of economic hardship and requires improvement to meet the needs of publichealth protection and coastal zone management. In addition to meeting national needs,Georgia's environmental monitoring should assist the GoG to meet its internationalcommitments, especially to the regional BSEP, and contribute to improved managementof the Black Sea.

Description

15. The Coastal Environmental Quality Monitoring and Information System(CEQMIS) will build on existing monitoring capacity and aims to strengthen it to provideessential environmental quality data for the benefit of decision makers, the general

34

population and environmeFtal institutions in the Black Sea region. The monitoringsystem will complement and improve both national and regional monitoring capacity.The component will address the need for an improved coastal monitoring and informationsystem by supporting preparation of a Monitoring and Information System Feasibilityand Design Study and laying the groundwork for its implementation through procurementof sampling, measurement, and analytic equipment for selected monitoring laboratories;improvement of monitoring standards and data protocols; provision of training andtechnical assistance; and establishment of a basic structure for an effective informationsystiem.

Subcomponents

16. The CEQMIS component consists of the following subcomponents:

(a) Monitoring and Information System Feasibility and Design Study

(b) Blue Flag Program for Beach Water Quality Monitoring

(c) Off-shore water quality monitoring program

(d) Pollution Monitoring

(e) ICZM Information System.

InstitutionalArrangements

17. The PIU/ICZM WG will function as the lead implementing institution withoverall responsibility for design and implementation of CEQMIS. For this purpose, thePIU/ ICZM WG will receive support in the form of technical assistance, training andinformation technology including GIS hardware and software. The component will beimplemented in close cooperation with the Ministry of Environment, Ministry of Health,Ministry of Urbanization and Construction and their respective labs and agencies, as wellas the Marine Ecology and Fisheries Research Institute located in Batumi.

The maintenance of the information system and GIS aspect of the CEMQIS will be aresponsibility of the PIU/ICZM WG, linked to the MoE, the Ministry of Urbanization andConstruction responsible for land use planning, and the Research Institute of Fisheriesand Marine Ecology. GIS nodes and technical support will be established within theMoE and MoUC, with each institution developing pilot applications for their respectivesectors. Based on the information gleaned from the monitoring program and GIS data, anupdate of the State of the Coastal Zone Environment in Georgia will be prepared anddisseiminated electronically. This will serve as a concrete application of the MIS & GIStool aind an important resource for decision makers at the local and national levels.

Project Component 4: Evaluation of Coastal Erosion (US$0.5 million)

18. Coastal erosion is a serious problem along many parts of the Georgian coast.Much of this erosion has been accelerated by human intervention, including river

35

diversion, lake impoundment, sand mining and coastal engineering works. To assess thefactors contributing to coastal erosion, particularly in the risk-exposed areas of Poti(Rioni River-Mouth) and Batumi (Chorokhi River-Mouth), the Government of theNetherlands will finance a comprehensive analysis of municipal water use (includingwatershed hydrology, sediment load, water supply and wastewater flows, coastaldynamics) and associated infrastructure in Poti and Batumi. Based on these studies a planfor integrated municipal water management would be developed for each locality. Thesestudies would include analysis of cost effectiveness of existing interventions to controlerosion, and feasibility studies of proposed options to sustainably address the mostserious aspects of coastal erosion. Investment requirements would be identified forpossible future interventions in municipal water management and erosion abatement.

Project Component 5: Development of a National Oil Spill Contingency Plan andMarinePollution Control Plan (US$0.5 million)

19. Grant support has also been obtained from the Government of the Netherlands todevelop a national oil spill contingency plan for Georgia. While the plan will focus onbuilding capacity to respond to oil spill emergencies both on and off-shore along theGeorgian coast, it will also examine strategies for prevention and abatement ofoperational spills. This has the potential to be a growing source of poilution in Batumiand Poti, in view of the increased tanker traffic envisioned along the coast and the lack ofadequate facilities at either port to deal with these spills. The PIU/ICZM WG will consultwith the International Maritime Organization (IMO), International Petroleum IndustryEnvironmental Conservation Association (IPIECA), and the International PetroleumTanker Owners Fund, Limited in preparing this component to ensure that nationalresponse plans are consistent with IMO standards and existing programs to operationalizesuch plans. This component would proceed in tandem with private sector initiatives toprovide emergency response in the event of an accidental spill in the Supsa Terminalarea.

20. The national plan developed under this component will explore the possibility offinancing emergency response to oil spills through existing conventions which identifythe liability of oil tanker owners/operators, compensation funds which provide insuranceto tanker owners and member countries in the event of a spill, and existing legalarrangements with oil interests in the Supsa Terminal area that are responsible forresponding in the event of a spill related to their operations. At the very least, the nationalplan financed under the project will take advantage of opportunities for joint training,monitoring, sharing of equipment and information with the GPC (Georgia PipelineCompany) oil spill contingency operations for the Supsa Terminal. Technical assistanceunder this component will include experts in Marine Administration and MarineInspection in the Ports of Batumi and Poti, and the marine advisor to the GPC,responsible for overseeing the development and implementation of oil spill emergencyresponse plans for the Supsa Terminal.

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Annex 3Georgia Integrated Coastal Management Project

Estimated Project Costs(US$ thousand)

Project Component Local Foreign Total %--------------------US$ '000 - -- Total Base

Cost1. Establishment of National ICZM 0.640 0.558 1.198 18Center2. Creation of National Parks 2.169 0.517 2.686 40

3.. Coastal Infornation and 0.508 1.196 1.704 26Monitoring System _

4. Evaluation of Coastal Erosion (Poti, - 0.500 0.500 8Batumi)5. Oil Pollution Prevention and - 0.500 0.500 8Management _ _

Baseline Project Cost 3.317 3.271 6.588 100Physical Contingencies 0.232 0.159 0.391 6Price Contingencies 0.548 0.120 0.667 10

Total Project Cost 4.097 3.549 7.647 116

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Annex 4Georgia Integrated Coastal Management Project

Cost Benefit Analysis Summary

COSTS BENEFITS

INVESTMENT COSTS OIL SPILL EMERGENCY RESPONSE BENEFITSNational capacity to prevent and respond to spills

Total Project Costs $7.6 million * reduced cleanup costs* reduced environmental damages

COST OF FORGONE ECONOMIC ACTIVITY ECOLOGICAL VALUES* Waterfowl/Bird Habitat and Migration Route

* Loss of Hunting, fishing, firewood, and reed * Flood Protection Valuecollection, and peat and gravel mining * Pollution Filtration Benefitsactivities, * Protection of rare and highly endemic species

* Fisheries habitat

PUBLIC HEALTH BENEFITS* Fewer public health problems related to beach use due

to better public information* Greater awareness of magnitude of problems, so that

investments in pollution prevention can be prioritizedINSTITUTIONAL BENEFITS* Prevention of environmental degradation caused by

private interests through a forum where public welfareis considered using consensus building and publicparticipation tools.

* Benefits gained by participation in an internationalforum for Black Sea cleanup whereby positive actionby any government on the Black Sea contributes tothe net overall welfare of other littoral countries.

TOURISM BENEFITSNational park amenities such as visitor center, pathways,interpretive signs, camping and boating facilities, andresearch facilities to attract visitors.

* Eco-Tourism Benefit due to park* Research fees generated from international users* User fees for park facilities

Improvements in the Black Sea Environment are expectedto increase beach related tourism* Need visible improvements such as reduced solid

waste debris and less oil in water and beaches

NON-USE VALUES* Existence Value to society- knowledge that one of

Georgia's important natural resources has beenpreserved

* Bequest value to society- knowledge that societytoday has done something to help preserve theenvironment for future generations

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Annex 5

Georgia Integrated Coastal Management Project

Financial Summary

Years Ending December 31(in US million - base year 1999)

1999 2000 2001 2002 2003 2004Project Costs

Investment Costs 1.1 1.2 1.2 1.2 1.2 1.1Recurrent Costs 0.1 0.1 0.1 0.1 0.1 0.1

Total 1.2 1.3 1.3 1.3 1.3 1.2

Financing Sources (% oftotal project costs)

IDA 6 15 17 12 5 2Co-financiers 1 4 5 3(Dutch TF)Co-financiers 0.4 2 4 4 3 3.6(GEF)Government 1.6 2.1 2.1 2.1 2.1 2

Total 9 23.1 28.1 21.1 10.1 8.6

Main assumptions:

The project will become effective in January 1999.

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Annex 6

Georgia Integrated Coastal Management ProjectProcurement and Disbursement Arrangements

I. PROCUREMENTProcurement Responsibility

1. Implementation of the project will require procurement of goods, works, and theselection and employment of consulting firms and individuals to carry out consulting andother technical assistance services. The PIU/ICZM WG will be responsible forprocurement. The PIU/ICZM WG will hire a full time procurement officer whose rainresponsibility will be to: (a) prepare and carry out any procurement; (b) submit to the Bankall procurement documents which require Bank's prior review; (c) prepare and submit tothe Bank at the beginning of each calendar year a detailed procurement schedule.Appointment of the procurement officer will be done in consultation with the Bank. Atproject launch (estimated to be January 1999), the Bank will deliver a procurementworkshop to present and explain procurement guidelines and commence preparing specificbidding documents.

Procureir ent Methods

2. The procurement of goods and works under the project will be conducted inaccordance with the Bank's guidelines "Procurement under IBRD Loans and IDACredits" published in January 1995, and revised in January and August, 1996, andSeptember 1997. The project components not financed by the Bank will be procured inaccordance with national regulations or the co-financing institutions' procurementregulations. A General Procurement Notice will be published in the DevelopmentBusiness of the United Nations in December, 1998. The selection of consultants will bedone in accordance with the "Guidelines - Selection of Consultants by World BankBorrowers", dated January 1997, revised September 1997. The Bank's Standard BiddingDocuments for Goods, Small Works, and Letters of Invitation as well as Standard Formof Consultants' Contracts will be used. The project procurement arrangements are shownin Tables Al and A2 and briefly summarized below. Detailed Procurement Plans arepresented in Tables B and C.

Gooa's

3. For goods procurement packages estimated to cost US$200,000 or more each, theInternational Competitive Bidding (ICB) procedure will be used: and for contracts underUS$200,000 each, International Shopping (IS), based on comparison of quotationsobtained form at least three suppliers in two different countries will be applied. Forlocally available off-the-shelf goods, estimated to cost up to US$50,000 per contract,National Shopping, based on comparison of quotations obtained from at least threesuppliers will be used. For the purchase of goods to be awarded through ICB, thebeneficiary may grant a margin of preference of 15 percent, or the amount of applicable

40

customs duties, whichever is lower, to qualified domestic manufacturers of goods inaccordance with the Guidelines referred to above.

4. The project includes one ICB package for goods (aggregate amount US$0.780million); nine IS packages (estimated to cost US$1.054 million); and one NS package(US$0.012 million).

5. Civil Works. Civil works contracts estimated to cost US$0.2 million equivalent ormore will be procured through ICB; under US$0.2 million, NCB will be used. Theprocedure applicable for procurement of small works will be used for contracts up toUS$100,000 each. The project includes eight NCB contracts (US$1.288 million) and onesmall works contract (US$0.085 million).

6. Consultants' Services. Consultants' services estimated to cost more thanUS$200,000 each will be selected through the Quality and Cost Based Selection (QCBS)procedure. Such contracts will be advertised in the Development Business and a nationalnewspaper for expressions of interest, from which a shortlist will be drawn. There is oneconsultant contracts (in aggregate amount less than US$ 200,000, national short-listed)for assignments of a standard or routine nature, which may be selected through the LeastCost Selection method. Individual experts will be selected in accordance with Part V ofthe World Bank Consultant Guidelines.

7. The project includes four QCBS assignments at a total estimated cost of US$1.157million. Advertisements inviting expressions of interest for these assignments will bepublished in the Development Business and in a national newspaper.

8. Consultants' services for the auditing assignment (estimated at US$0.191million)will be procured through the least cost selection method. Consultant services for thepublic awareness and media outreach assignment will be procured through the fixed-budget method (US$0.144 million). The project also includes (US$0.487 million) for theprocurement of the services of individuals. These include the experts needed for short-term technical assignments and to staff the PIU during the life of the project. Tencontracts (in the aggregate amount of US$0.609 million) will be selected through theConsultants' Qualification Method of selection. Since there are only some NGO workingin the field of assignment, the project will include two contracts awarded on a singlesource basis to these NGOs (in aggregate arnount US$ 0.136 million)

9. The funds allocated to meet various incremental operating costs (US$0.489million), will be spent in accordance with an annual budget subject to the Bank's priorapproval and following procedures satisfactory to the Bank.

Bank Review of Procurement

10. Procurement documents for all goods and works to be procured under ICB(>US$200K) (invitation to bid, draft bidding documents, evaluation report) will besubject to the Bank's prior review. Procurement documents for the first NCB for works(<US$ 200K), IS for goods (<US$ 200K), NS (<US$ 50K), and small works contracts(<US$ 100K) (draft invitation to quote and evaluation report before contract is signed)

41

will also be subject to the prior review of the Bank. A full prior review will be requestedfor Minor Works. With respect to each consultants' contract estimated to cost theequivalent of $200,000 or more, the procedures set forth in paragraphs 1, 2 and (otherthaLn the third subparagraph of paragraph 2(a) and 5 of Appendix 1 to the ConsultantGuidelines shall apply. With respect to each consultant contract estimated to cost theequivalent of $100,000 or more, but less than the equivalent of $200,000, the proceduresset forth in paragraphs 1, 2 (other than the second subparagraph of paragraph 2(a) and 5of Appendix 1 to the Consultant Guidelines shall apply. With respect to each contract forthe employment of individual consultants estimated to cost the equivalent of $25,000 orless, the qualifications, experience, terms of reference and terms of employment of theconsultants shall be furnished to the Bank for its prior review and approval. The contractshall be awarded only after the said approval shall have been given.

42

Table AlProject Costs by Procurement Arrangements

[in US$ million equivalent]

Expenditure Category PROCUREMENT METHOD Total Cost(including

contingencies)

ICB NCB Other NBF

A. Civil Works 1.3 0.0 0.0 1.3(1.2) (0.07)(a) (0.0) (1.3)

B. Goods 0.8 1.1 1.9(0.6) (o.9)(b) (1.5)

C. Consultant Services 2.7 1.0 3.7(2.4)(e) (0.0) (2.4)

D. Incremental 0.5 0.2 0.7Operating Costs (0-5)(d) (0.0) (0.5)

TOTAL 0.8 1.3 4.3 1.2 7.6(0.6) (1.2) (3.9) (0.0) (5.7)

NBF = Not Bank-financed (includes elements procured under parallel cofmancingprocedures, consultancies under trust funds, any reserved procurement, and anyother miscellaneous items).

Items in parentheses indicate amounts to be financed by the Bank.

a/ Includes one minor works contract (US$0.07 million).b/ Nine IS contracts and one NS contract ( for a total of USS0.9 million).c/ Four QCBS contracts ; ten consultant qualifications contracts one LC contract; onefixed-budget contract; and three individual contracts (for a total of USS 2A million).d/ Incremental Operating Costs of US$0.5 million to be incurred based on an annualbudget.

43

Annex 6, Table A2: Consultant Selection Armngements

(in US$million equivalent)

Selection Method Total CostConsultant (includingServices contingencies)

ExpenditureCategory

QCBS QBS SFB LCS CQ Other NBF

A. Firms 1.157 0 0.144 0.191 0.609 0.136 0 2.237

B. 0 0 0 0 0.487 0 0.487Individuals

Total 1.157 0 0.144 0.191 0.609 0.623 0 2.724

Note: QCBS = Quality- and Cost-Based SelectionQBS = Quality-based SelectionSFB = Selection under a Fixed BudgetLCS = Least-Cost SelectionCQ - Selection Based on Consultants' QualificationsOther = Selection of individual consultants (per Section V of ConsultantsGuidelines; includes here: Sole Source and Individual), CommercialPractices, etc.NBF = Not Bank-financed.

44

Annex 6, Table B: Thresholds for Procurement Methods and Prior Review

'4-i,;<_ __ 5 ' "'' -' ''''milinqulva(Ut)con l: Procur.ient Review

Goods and Civil ICB NCB IS NS Minor Works Other methods Percentage of loan amount

Works subject to prior review

Procurement G > 0.200 W<0.200 <0.200 <0.050 <0.100 n.a.thresholds: (US$0.780) (US$1.288) (US$ 1.054) (US$0.012) (US$0.085)individual andaggregate

Prior Review First First First First First US$1.207 million(US$0.780) (US$0.179) (US$0.154) (USS0.012) (US$0.085) or 18%

Consultants QCBS LCS SFB Qualifications Individual Sole Source

Procurement (US$1.301) (US$0.191) (US$0.144) (US$0.609) (US$0.487) (US$ 0.136)methodthresholdsPrior Review All All All All Only TORs All US$2.237 million

(US$1.301) (USS0.191) (US$0.144) (USS0.609) (USS 0.136) or 35%

Total value of contracts subject to prior review: US$ 3.464 inillionExpost Review Explain briefly the ex-post review mechanism:All other All the remaining procurement packages will be subject to ex-post review. Supervision missions will include a procurement specialist as needed To

procurement assist the TM with ex-post reviews.packages

- .Section,2- Capacity of the mlemp ontintAgqncyin Procurement and Technical Assistance requirements

The PIU will be responsible for implementing the project, including procurement. The PIU staff will include a dedicated procurement officer.

Country Procurement Assessment Report or Country Procurement I Are the bidding documents for the procurement actions of the first year ready by negotiations

Strategy Paper status: N/A | Yes No X

, ___ 2 .__ - Section 3: To and e tn Poctement 7. 7Estimated date of | Estimated date of publication I Indicate if there is procurenent I Domestic Preference for Good Dom eiic Prfererce for Work-s if appliCableProject Launch of Gcneral Procurement Notice subject to mandatory SPN in Yes No XWorkshop Septemberl998 Development Business Yes X NoMarchl999 No X

Retroactive financingYes No X Explain:Yc NoXEpan

Explain briefly the Procurement Monitoring System: Procurement implementation progress will be monitored through progress reports and supervision missions. Each supervisionmission will include a procurement specialist. She/he will be respuu;isible for updating the procurement plan, and conducting ex-post reviews. His/her findings will be included in thesupervision reports for monitoring their implementation.Co-financing: Procurement for Dutch co-financing will be administered by the Dutch ministry of Economic Affairs. The PIU will act as a coordinating body for all co-financed contracts.Procurement for GEF co-financing activities will be administered by the PIU following bank procedures.

Indicate name of Procurement Staff or Bank's staff part of Task Team responsible for the procurement in the Project:Name: Naushad Khan, Procurement Specialist, Ext 32699

Explain briefly the expected role of the Field Office in procurement: A project officer in the Resident Mission would be responsible for helping to supervise project implementation andwould provide procurement support, in which she he will have received trainir.g.

Table CGeorgia lntergrated Coastal Management Project

Procurement Plan

ICZM Legal Framework, Development ofCoastal Land Use Master Plan, CF 1 IDA 344 QCBS Aug-99 Sep-99 Jan-00 Jan-03

2 Training Cl 1 IDA 92 Ind NA Nov-98 Jan-99 Jun-01

Design of Monitoring and Info system,3 small field studies, GIS training CF 1 IDA 352 QCBS Dec-98 Jan-99 Apr-99 Dec-01

4 PIU Consultant services (local) Cl 8 IDA 361 Ind NA Nov-98 Jan-99 Jul-04

5 Project Advisory Services CF 4 IDA 256 CQ Dec-98 Jan-99 Apr-99 Jul-04

6 FinancialAudit CF I IDAIGEF 191 LC Mar-00 Mar-00 Jul-00 Jul-04

7 Public awareness/media outreach CF 1 IDA/GEF 144 FB/N Feb-99 Mar-99 Jul-99 Dec-01

8 Management Plan/Layout of Park CF 1 GEF 90 CQ NA Jan-99 Apr-99 Oct-00

_ Community SupportInput to Regional9 Planning CF 2 IDA 99 CQ NA Jan-00 Apr-00 Jan-02

10 Ecosystem Studes/Research & Monitoring CF I GEF 225 QCBS Dec-99 Jan-00 Apr-00 Mar-04

Clergy. Local Population & Educators11 Training CF I GEF 87 SS/NGO' NA NA Apr-99 Jun-04

121Study Altemahe use of Fo_* st/Agrc Land CF 2 IDA 52 CQ NA Oct-99 Jan-00 Jun-01

Table CGeorgia Intergrated Coastal Management Project

_______ ______ ______ ______ ______ ______ Procu 'remn t Plar lll

E131esign and Feasibility of Tourism/SBD CF 1 IDA 49 SS/NGO2 NA NA Jul-99 junI00

Developmnentprinting of Guidebooks and14 posters CF 1 IDA 112 CQ NA Dec-99 Jan-00 Dec-02

_Intemational, Technical Wardien and staff15 training CF I IDA 236 QCBS May-99 Jun-99 Oct-99 Dec-01

16 Expert review of park management CI multiple IDA 34 Ind NA Nov-00 Jan-01 Dec-01

_ Subtotal Consultant Services 2,724

PIU/Monitoring and Infofnation System _

1 Laboratory equipment G 1 IDA 780 ICB May-99 Jun-99 Oct-99 Dec-00

2 Standard Computer Equip/ G 1 IDA 151 Is Feb-99 Feb-99 Apr-99 Dec-00

3 GIS H&S G 1 IDA 192 IS Nov-98 Dec-98 Apr-00 Jun-01

4 Remote Sensing Imagery G 1 IDA 30 IS3 Feb-00 Feb-00 Apr-00 Sep-00

5 Vehices G 1 IDA 163 IS May-99 May-99 Jul-99 Mar-00

Office Equipment (phones, Faxes Copiers,6 fumiture, projectors,TVNCR) G 1 IDA 81 IS Feb-99 Feb-99 Apr-99 Dec-99

Use of Research Vessel for Off-shore7 sampling TS 1 IDA 167 IS Aug-99 Aug-99 Oct-99 Dec-02

I KolkheWtKobuleti Reservses

8 Motor o G 1 IDA 38 iS6 Aug-99 Aug-99 Oct-99 Jun-00

9 Generator, garage equipment G 1 !DA 87 IS Nov-99 Nov-99 Jan-00 Jun-01

Table CGeorgia lntergrated Coastal Management Project

_______________________ j ~Procu rement Plan

_ Outdoor supply, sporting equipment,10 Ecocamp supply G 1 IDA 145 IS Nov-99 Nov-99 Jan-00 Jun-01

11 Uniform of Wardens G 1 IDA 1 2 NS Aug-99 Aug-99 Oct-99 Jun-00

Subtotal Goods 1,846

KolkhetUKobuleti ReservesI Border marking/ Guard Stations W 1 IDA 179 NCB Jan-99 Feb-99 Apr-99 Jun-99

Town center info booths, boat launches2 Campsites, Towers, Walkways W 2 IDA 289 NCB Jul-99 Aug-99 Oct-99 Dec-01

3 Administration and Visitor centers/garage W 4 GEF 666 NCB Oct-99 Nov-99 Jan-00 Dec-01

4 Tourist Shelters/Ecocamps W 1 GEF 85 MW NA Feb-00 Apr-00 Dec-01

5 Restoration of Kolkheti Forests W 1 GEF/IDA 154 NCB Oct-00 Nov-00 Jan-01 Dec-02

Subtotal Works I _I _ 1,373 _ _ _

, Local Organkz.of Workshops (continuous) _ IIDA 122 INA NA INA NA

2 Annual Workshop Training for KNP/KbNR x6 GEF 135 NA NA NA NA

PIU office Incremental costs (heating 7 | |3 fuel,petrol,paper,pnnter cartridge) _ _ _|IDA 75 |NA NA NA jNA4 MIS Equipment O&M _ _ JIDA 1241 INA INA 'NA NA

Table CGeorgia lntergrated Coastal Management Project

Procurement Plan

5 Camp and lnfrastr. O&M GEF/IDA 33

6 Gov. of Georgia Direct Contribution NBF 189

,Subtotal Recurrent and Operating Costs (excluding GoG Direct Contr.) 4891

_ Total Project Cost | | | 6,621 _ _ __

Notes:

1. Specialized Env. Ed. Regional training program developed for dergy, educators and students of Black Sea riparian states.2. The NGO CARE has been identified during appraisal as having the best capacity to carry-out the assignmentdue to their implementation experience with microfinance and tourism development in similar projects in Georgia.3. Only 3-5 sources worldwide are known at time of appraisal.4. Consultant Services and Goods packages total costs are inclusive of price contingencies and taxes,which are paid for by the Government of Georgia.5. Works packages total costs are inclusive of a 20% Govemment contribution, which will appear separately on project financing tables in the project document.6. The appraisal mission verified the lack of a sufficiently developed national motor boat construction industry.

Key to acronyms used:

CF: Consultant-Firm LC: Least CostCl: Consultant-Individual N: NationalCQ: Consultant Qualifications NBF: Non Bank financedFB: Fixed Budget Selection NCB: National Competitive BiddingG: Goods NS: National ShoppingGEF: Global Environment Facility MW: Minor WorksInd: Individuals QCBS: Quality and Cost Based SelectionICB: Intemational Competitive Bidding SS: Sole SourceIDA: Intemational Development Association TS: Technical ServicesIS: Intemational Shopping W: Works

II. DISBURSEMENTS

Disbursement Arrangements

11. The project is expected to be disbursed over a period of six years. The anticipatedcompletion date is June 30, 2004, and the closing date, December 31, 2004.Disbursements will follow normal Bank and cofinanciers' procedures and will be madeagainst eligible expenditures. Tables DI and D2 below show estimated disbursementsduring the life of the project and Tables El and E2 show allocation of credit and grantproceeds:

Table Dl: Estimated Disbursements IDA Credit(US$ million)

Estimated Disbursements 99 00 01 02 03 04(Bank FY/US$M)

Annual 0.350 0.750 1.760 0.880 0.440 0.220Cumulative 0.350 1.100 2.860 3.740 4.180 4.400Cumulative 8% 25% 65% 85% 95% 100%Percentage I I I I I

Table D2: Estimated Disbursements GEF Grant(US$ million)

Estimated Disbursements 99 00 01 02 03 04(Bank FYMUS$M)

Annual 0.150 0.045 0.260 0.390 0.390 0.065Cumulative 0.150 0.195 0.455 0.845 1.235 1.300Cumulative 10% 15% 35% 65% 95% 10.0%Percentage I_I I I I__

12. Allocation of grant proceeds: Disbursements would be made against thecategories of expenditures indicated-in Table C. The proceeds of the proposed project areexpected to be disbursed over a period of six years.

Table El: AUocation of IDA Credit Proceeds

(US$ million)Categories IDA Credit Financing

Civil Works 0.6 80%local100% foreign

Goods 1.5 100% of foreign expenditure(ex-factory cost) 80% of

local expensesConsultants Services 1.9 100%Incremental Recurrent Costs 0.4 100%/e

TOTAL 4.4

51

Table E2: Allocation of GEF Grant Proceeds

(US$ million)Categories GEF Grant Financing

Civil Works 0.7 80%local100% foreign

Goods 0.0 100% of foreign expenditure(ex-factory cost) 80% of

local expensesConsultants Services 0.5 100%Incremental Recurrent Costs 0.1 100%

TOTAL 1.3

13. Special Account: To facilitate timely project implementation, the borrower wouldestablish, maintain and operate, under conditions acceptable to the Bank, two SpecialAccounts in US dollars in a commercial bank --One Special Account for the IDA Credit,and another for the GEF Grant. The selection process and criteria for selection of thecommercial bank would follow the Bank's Disbursement Handbook procedures. TheBank would, upon request, make a deposit equivalent to the Authorized Allocation ofUS$350,000 for the IDA Special Account, and of US$100,000 for the GEF SpecialAccount. Applications for the replenishment of the Special Account would be submittedat least every three months or when 20 percent of the initial deposit has been utilized,whichever occurs earlier. The replenishment application would be supported by thenecessary documentation, the Special Account bank statement, and a reconciliation ofthis bank statement.

14. Use of Statements of Expenditures: Withdrawal applications would be fullydocumented, except for expenditures under: (i) contracts for goods and works valued atless than US$ 200,000 each; (ii) contracts for consulting firms costing less than US$100,000 equivalent; (iii) contracts for individual consultants costing less than US$ 50,000equivalent; and (iv) expenditures on incremental operating costs less than US$ 50,000equivalent.

III. ACCOUNTS AND AUDITS

Accounts

15. The PIU will establish an accounting and auditing system which will have thecapatbility of recording and retrieving all financial transactions associated with the projectin a timely manner and comply with internationally accepted accounting standards.

Audlits

16. Project Accounts will be audited in accordance with the Guidelines for FinancialReporting and Auditing of Projects Financed by the World Bank (March 1982). TheBonrower will provide the Bank (within six months of the end of each fiscal year during

52

the life of the project), an audit report of such scope and detail as the Bank mayreasonably request.

IV. PROJECT REPORTING

17. The PIU will prepare proper project reports and submit them to the Bank in atimely fashion. These will include:

* Semi-Annual project status reports, reflecting: (i) the status of implementationprogress, problems encountered, corrective actions needed, rationale foractions; (ii) the current state of project indicators ; and (iii) the current costs ofeach IDA/GEF financed project component and estimated costs ofcompletion.

* Procurement reports, including semi-annual reports tracking the disbursementof the IDA credit and the GEF grant, as well as project expenditures and costs(local and foreign).

. Disbursement reports, including semi-annual reports tracking thedisbursement of the IDA credit and the GEF grant (local and foreign costs).

* Annual audit reports of project IDA Credit and GEF Grant expenditure andaccounts.

* Implementation Completion Report will be prepared by the PIU within sixmonths of project completion.

53

Annex 7Georgia Integrated Coastal Management Project

Project Processing Budget and Schedule

A. Project Budget (US$000) Planned Actual$163,000

B. Project Schedule Planned! Actual-- 16 months

Time taken to prepare the project (months) -- 16 monthsFirst Bank mission (identification) -- 5/20/1997Appraisal mission departure -- 5/18/1998Negotiations 9/21/1998 11/5/98Planned Date of Effectiveness 1/15/1998 N/A

Prepared by: Ministry of Environment and local NGOs

Preparation assistance: No Government Preparation Funds provided by outside sources.

Bank staff who worked on the project included:Name Specialty

MaTea Hatziolos Senior Coastal Management SpecialistEzediine Hadj-Mabrouk Environmental SpecialistRobert Maurer Senior Urban SpecialistBetsy McGean Social EcologistJanis Bernstein Social ScientistKarin Shepardson Environmental EconomistMartin Fodor Environmental AnalystAnna Staszewicz Financial AnalystPaola Meta Operations AnalystLaurence Boisson de Chazournes Legal SpecialistPhilllip Brylski Biodiversity SpecialistStephen Lintner Quality AssuranceMichele De Nevers Quality AssurancePeter Whitford Peer ReviewKerstin Canby Environmental SpecialistDarejan Kapanadze Resident Mission Operations OfficerStephanie Abdulin Administrative SupportLilian Pintea Summer Intern - Geographic Information

SystemsCatherine Golitzin-Jones Administrative SupportKristine Schwebach Administrative SupportMay Zeki Administrative Support

'The project was proposed at the Project Concept Document (PCD) Stage as a quick turnaround Learningand Imnovation Loan (LIL - 3 months). However, this was later reconsidered and the project was expandedto include co-financing and undertake more detailed preparation.

54

Annex 8Georgia Integrated Coastal Management Project

Documents in the Project File*

A. Project Implementation Plan

COSTab Cost Tables for the ProjectDraft TORs for PIU StaffDraft TOR for Oil Spill Contingency Planning ComponentDraft TOR for Integrated Municipal Water ManagementBank comments on Draft Kolkheti National Park LegislationPublic Awareness MaterialsLetter of MOUC on the secondment of staff to the ICZM WGGovernment of Netherlands, Letter of Intent for Project Co-financing

B. Bank Staff Assessments

Economic AnalysisEnvironmental Data SheetProject Information DocumentC. Other

GEF Council Submission and ApprovalRioni River Basin Environmental Hot Spots Study, Feb. 1997Kolkheti Protected Areas Management Guidelines, 1996GEF Council CEO Endorsement Letter

*Including electronic files

55

CAS Annex B8Generaed: 1 II2498

Annex 9Statement of Loans and Credits

Status of Bank Group Operations in Georgia- I~~~~~~~~~~~BR-" Loaos and IDL"A% Credi' in the Ope-ions Port'ioule

DifferenceBetween expected

Original Amount in US$ Millions and actual Last ARPPLoan or Fiscal - disbursements a/ Supervision Rating b/

Project ID Credit Year Borrower PurposeNo. IBRD IDA Cancellations Undisbursed Orig Frm Rev'd Dev Obj Imp Prog

Number of Closed Loans/credits: 3

Active LoansG6-PE-8417 IDA 26580 1995 MINISTRY OF FINANCE MUNICIPAL INFRA. REM 0.00 18.00 0.00 1.63 3.29 0.00 S sGE-PE-8414 IDA 28520 1996 GOVERNMENT OF GEORGIA HEALTH 0.00 14.00 0.00 10.53 5.07 0.00 S SGE-PE-44388 IDA 28480 1996 REPUBLIC OF GEORGIA STRUCT. ADJUST. TA 0.00 4.80 0.00 1.29 1.53 0.00 S SGE-PE-39892 IDA 28090 1996 GOVERNMENT OF GEORGIA TRANSPORT 0.00 12.00 0.00 1.53 .14 0.00 HS SGE-PE-35784 IDA 29580 1997 GOVERNMENT OF GEORGIA POWER REHAB. 0.00 52.30 0.00 32.86 10.53 0.00 S SGE-PE-44830 IDA 29440 1997 GOVERNMENT OF GEORGIA OIL INSTITUTION BLDG 0.00 1.40 0.00 1.01 .23 0.00 5 SGE-PE-8415 IDA 29410 1997 GOVT. OF GEORGIA AGRICULTURE DEVELOP. 0.00 15.00 0.00 10.60 -1.15 0.00 S SGE-PE-55573 IDA 30400 1998 GOvERNMENT OF GEORGIA CULTURAL HERITAGE 0.00 4.49 0.00 4.43 .40 0.00 S SGE-PE-39929 IDA 30200 1998 GOVERNMENT OF GEORGIA SOCIAL INVEST. FUND 0.00 20.00 0.00 18.80 3.18 0.00 S SGE-PE-51034 IDA 29840 1998 GOVERNMENT OF GEORGIA SATAC II 0.00 5.00 0.00 3.64 2.34 0.00 S SGE-PE-44797 IDA 29830 1998 GOVERNMENT OF GEORGIA SAC II 0.00 60.00 0.00 19.57 19.05 0.00 S SGE-PE-50910 IDA 29760 1998 GEORGIA HUNICIPAL DEV. 0.00 20.90 0.00 18.87 3.97 0.00 5 S

Total 0.00 227.89 0.00 124.76 48.58 0.00

Active Loans Closed Loans TotalTotal Disbursed (IBRD and IDA): 96.88 147.77 244.65

of which has been repaid: 0.00 0.00 0.00Total now held by IBRD and IDA: 227.89 145.10 372.99Amount sold : 0.00 0.00 0.00

of which repaid : 0.00 0.00 0.00Total Undisbursed : 124.76 0.00 124.76

a. Intended disbursements to date minus actual disbursements to date as projected at appraisal.b. Following the FY94 Annual Review of Portfolio performance (ARPP), a letter based system was introduced (HS - highly Satisfactory, S - satisfactory, U - unsatisfactory,

HU - highly unsatisfactory): see proposed Improvements in Project and Portfolio Performance Rating Methodology CSecM94-901), August 23, 1994.

Note:Disbursemnt data Is updated at the end of the first week of the month.

GaO uted by the Operaions Information System (OIS) 56

Annex 10

Georgia

PRICES ani GOVERNMENT FINANCE1976 13os 1991 1993

- e "ocpnws Inflation (%)(t dnge) . 20.000 -

Consumer pric 162.7 39.3 s5000 ImPlicit GDP defltor 0.7 -4.5 162.7 402 10000/

Government financ5 5.000 -N Of GDP) 0Curetrevnume(exdgrmnts) 51 8.1 9t n t4 5 55 U

Current budget bance (exd grants) 4 t 13 - GDP el. -*-CPiOverd surplus/defidt (exd grants) -7.2 -5.5

TRADE1115 1155 199S 199 --

(muons USSJ Export and irnpot levels (Iml USS)Tot iexports (fob) 347 400 r

Biack Mewal 36 75TO 1 1 26Manufactures 265 233

Total imports (ci.) 686 733Food 163 186 2.500

Fud and energy t65 164Capilalgoods 121 127 0 _- I- J.JI:--1J I

Export price index (1987=100) so *I 50 t3 t4 U U

Import price index (1987-100) .. .:Exi.o.t. I: importsTesdtr t .ad (1987.100)

BALANCE of PAYMENTS1197 11S6 1996 1996

(mifons USS) Current account balance to GOP ratio I%)Export of goods and servceA 469 541 0 __ _.. _ _Impots of goods and services 791 841 o a a1 9' n. 11-nResource bdance -322 -300 10

Net Income J-a .50Nt current transfers Is .9 160 139

Cumn acount balance, 40 -

befor ofticil Capitai transer -220 -211

Financitems (net) 260 130Chage In net rsrves -40 81 -50 o

em_o:Reseres incdutinggold (mini.SS) . 158 18

Conversion rate (bcaWS$) .. .. 857.5 1,263.0

EXTERNAL DEBT and RESOURCE FLOWS1975 1935 1996 1996

(m7ioNs USS)Total debt outstanding and disbursed 1,212 1,365

ISRO 0 0 B

IOA 84 157 Composition of ttal de*It,VA tnul USS)

Totnidebtservice at 35 42 CIBRD 0 0 197IDA 0 1

Comnpostn of net resource flows -Offic grants 189 141 Offica creditors 173 166Private credito 0 0Foreign direct investment 6 20 E __Pofolio equitry ° t0 1

Wtrld Bank programCommitmnt 76 91 A -IRD E - rDisbursements a 76 B-IDA 0- Otl hrnuMtrla F- PivalPrincipa repayments 0 0 C- IMF G -Short-linrNeti ow e 5 76Intert payments 0 INet tafert .. .. 65 76

Development Economics U2_U97

Note: Esrmates for economies of the former Soviet Union are suwbd to more than the usu range of uncertainty.a i Debt service due alter rescheduling.

Annex IO

Georgia at a glance=

Europe & Lower.POVERTY and SOCIAL Central middle- - --

Georgia Asia intome Deveopment diamond'

Popubltion mid-1996 (miltons) 5.4 479 1.125GNP per capta ̀1996 (USS) 850 2,180 1.750 Life expectancyGNP 1996 (biIons USS) 4.6 1,043 1,967

Averge annual growth, 1990-96

Popultion (%) -0.2 0.3 1.4 GNP GrasLabor force i%) -0.1 0.5 1.8 / A r

Per ------ - p- - rimaryMort reAn srtimate (latest year availabbe since 1989) capita ermcent

Povorty: headcount hdex (% oftpo,ulation)Urban population (% of total popuation) 5s 65 56Lif expectancy at birth (years) 73 68 67Infentmortallty(perl,000 #v birhs) 1t 26 41 AccesstosafewaterChiid malnutrition (% of childn under 5)Access to safe water (% of population) .. 78Illi te cy (% of populaton ge 15+) 1 .. o.-Gross primary enroliment (% of school-ng population) 82 97 104 Goigia

MUle 82 97 105 ---- Lower-middle-incore WgroupFemale 81 97 101

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1975 1985 1996 1995

GDP (b/tonsUS .. .. 4.3 4.6 EconomI a6oaGross domeatic investrmnVGDP .. 34.3 4.0 5.0 Openness of economyExpcrt of goods end serviceDP .. .. 16.2 11.8Gros domeatic vings/GDP .. 31.1 -7.2 -1.5Gross natonal savings/GDP .. . -4.8 0.4

Currmt account balance/GDP . .. -5.1 -4.6Inteenst peyments/GDP .. .. 2.9 1.4 Savings ---------Total debVGDP .. . 28.2 29.8Total debt sevice/xports at .. .. 7.4 7.5Present value of debVGDP .. .. 23.7Prsemt value of debt/exporb .. . 217.7 .Ibtednes

197564 1986-96 1996 1996 199745(aver-no annual gmwth) - GeorgiaGDP 5.3 -19.0 2.4 10.5 8.9 - -Lower-middb-income prGNP per capita 4.5 -17.2 2.0 12.7 6.8Expoils of goods and servcs .. .. -11.3 20.2 9.1

STRUCTURE of the ECONOMY

1975 1985 1995 1996 Growth rates of output and lnvesstzntt%)i'% Of GOP)Agriculture .. 25.5 35.3 33.5 155Indusiry .. 39.6 26.7 25.1 100

Manufacturing .. 30.2 20.1 18.9ServkCs .. 34.9 38.0 41.3 so-

Private consumption . 55.8 100.0 92.8General govmment consumption . 13.0 7.2 8.8 40.Imports of goods and services . . 27.4 18.4 GOI -o -- GW

197546 1986-96 1996 1996(average annual growth) Growth rate of exports and impot Agriculture .. .. 5.5 3.0 25Industry .. .. 1.0 2.0 20-

Manufacturing .. .. 1.0 2.0 t0a-Services .. .. 54.0 16.3 5-

Private consumption .. .. -10.4 2.6 SI 92 3 Gnrol govemment consumpton .. .. 52.7 52.7 :1isGroas domestic Investment .. .. 123.0 43.4 -20 -lmporlsofgoodsmnds rvices .. .. -15.5 9.1 rExpors oGross natlonal product 5.3 -17.1 1.9 12.5

Note: 1996 data are preliminary esbmates. Figures in italics are for years other than those specified.The cdiamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond wMbe hicomplete.

a / Debt service due after rescheduling.

Annex 1 1GEF Incremental Cost Analysis

GEORGIA

INTEGRATED COASTAL MANAGEMENT PROJECT

INCREMENTAL COSTS AND GLOBAL ENVERONMENT BENEFITS

Overview

1. The general objective of the GEF Alternative is to conserve biodiversity along the BlackSea coast of Georgia. The project development objectives are to: (i) launch concrete andsustainable actions in support of biodiversity conservation, including river, lake, coastal, marineand freshwater biodiversity, through the protection and management of threatened forest andcritical wetlands ecosystems and the establishment of the Kolkheti National Park and theKobuleti Nature Reserve along the Black Sea coast of Georgia; and (ii) integrate these protectedareas into the broader development objectives of the coastal management project. These broaderobjectives include establishing of a fraamework for integrated coastal planning and managementas a basis for sustainable economic activities along the Black Sea coast, and assisting Georgia inmeeting its regional commitments under the Black Sea Environmental Programme and variousinternational conventions and agreements related to the protection of the Black Sea. The GEFAlternative intends to achieve these outputs at a total incremental cost of approximately US$1.32million above the Baseline. The proposed GEF Alternative should be viewed as complementaryto existing activities in the Georgian coastal area.

Context and Development Goals

2. Georgia, a mountainous country covering 70,000 km2 with a population of 5.5 millionpeople, is situated between the south slope of the Caucasus Mountains, the east coast of the BlackSea and the northern edge of the Turkish Anatolia plane. Forests cover 40% of the country,largely in the Greater Caucasus Mountains (Georgia's northern border), the Lesser Caucasus (itssouthern border), and in intervening lowlands and foothills. The principal landscapes of theCaucasus include foothill and mountain forests and subalpine meadows of the Greater and LesserCaucasus; treeless mountain upland plateaus of the lesser Caucasus; humid lowland forests ofwestern Georgia, and the arid steppe and deserts of eastern Georgia. In the project regionbetween the Caucasus Major and Minor ranges of Georgia, the flora and fauna of at least threebiogeographic provinces (Europe, Central Asia, Middle East regions) converge, resulting in highlevels of biodiversity. The project target area and surrounding Transcaucasus region is identifiedunder the World Wide Fund for Nature's Global 200 Ecoregions program, which uses selectioncriteria of species richness, levels of endemism, taxonomic uniqueness, unusual evolutionaryphenomena, and global rarity of Major Habitat Types.

3. The Kolkheti wetlands are a Black Sea coastal ecological resource of global significance.In 1996, the Kolkheti wetlands were designated as a Ramsar site (a wetland of internationalsignificance). The Kolkheti wetlands area are also, unfortunately, one of the most threatenedecosystems in Georgia. The wetlands incorporate a large and complex channel and river networkwhich drains into Lake Paliastomi and the Black Sea. The Kolkheti subtropical forests and

59

wetlland complex contains high levels of endemism and floral diversity. A number of relictspecies from the Tertiary period occur only within the Kolkheti region or have a limiteddistribution outside of this region. The region also provides critical habitat for numerous speciesof migratory and wintering birds. These forest and wetland ecosystems are under threat as aresult of drainage of wetlands for agricultural and urban use, illegal hunting, forest harvesting,peat and gravel mining, pollution, and invasion by nonnative species. Immediate threats for theKol]kheti wetlands area are the proposed expansion of the Poti Port terminal further into thewetllands areas, and peat and gravel mining in Lake Paliostomi, timber harvesting and illegalhunting during winter months due to Georgia's temporary energy crisis. The Kobuleti wetlandsarea are under immediate threat due to pressure for agricultural expansion. Immediate legalprotection and implementation of the of the draft management plans of these areas will be criticalto halting these threats to the ecosystem.

4. The broad development goals of Georgia focus on public sector restructuring; privatesector development; social protection and poverty reduction; and environmental protection. TheGovernment's overall development agenda attempts to focus on these issues consolidating thestabilization recently achieved, strengthening the current economic recovery while protecting theenvironment. The Government of Georgia has taken important steps toward improvedenvironmental management in recent years, including the development of national strategies,recently approved framework environmental legislation and the development of specificenvironmental laws underneath this framework, activities under the Black Sea EnvironmentalProgram and some specific actions under the World Bank-financed Municipal InfrastructureRehiabilitation Project. For example, an Institutional Development Fund (IDF) grant is helpingthe Government to prepare its National Environmental Action Plan (NEAP), designed to detailenvironmental priorities as a basis for future cooperation, and strengthen the Ministry ofEnvironment. A Biodiversity Strategy/Action Plan is also being prepared. Environmentalimprovements will still face institutional challenges such as gaining cooperation fromgovernmental agencies with no previous history/capacity in dealing with these issues, promotingpublic awareness, and building partnerships with NGOs. With the preparation of the World Bankand GEF-financed programs, the Government intends to preserve Georgia's rich biologicaldiversity and natural resources base for future generations by implementing effectively therecently approved environmental legislation. The country's natural resources, such as theforests, will need to be appropriately managed to reduce illegal harvesting and damage, whileappropriate commercialization policies fostering renewal and growth could allow for a newsource of foreign exchange earnings.

Baseline Scenario

5. The collapse of the Soviet Union in late 1991 and the attendant disruption in institutionsthat managed the economy until then has forced the Georgian economy into a tailspin andcontributed to the outbreak of civil strife in the breakaway regions of Abkhazia and SoutL.Ossetia. In early 1994 Georgia emerged from this period of turmoil with a collapsed economyand significant negative social impacts. With Bank and IMF support, in mid-1994 theGovernment embarked on a comprehensive reform program to rebuild the economy. By the endof 1996, the fiscal deficit had been reduced, annual inflation lowered, the exchange ratestabilized, and the economy registered a growth rate of 10.5 percent. Throughout this oftendifficult period Georgia has put considerable effort in establishing the foundations of a marketeconomy. The task was especially challenging because Georgia started the transformationvirtually from scratch with existing institutions that were ill-suited to a market based economy.

60

Yet, unlike many of the other countries of the former Soviet Union, Georgia has a long traditionof entrepreneurship which should serve it well during the transition. The medium term prospectsfor the economy are good, based on robust growth in exports. There is a solid potential inagriculture, and services are likely to develop strongly. With appropriate macroeconomicstabilization policies and structural reforms, this potential can be achieved. However, in theshort term the decline in output can only be moderated, not reversed.

6. Since the transition, unsustainable timber harvesting, grazing, and game hunting haveaccelerated, and now pose a major threat to Georgia's diverse and abundant biodiversity. Inaddition, since the transition and the associated economic decline, local peoples are increasinglyseeking to reestablish traditional/historical land uses that were disrupted for over 70 years underthe former Soviet Union. The Kolkheti forest and wetland ecosystems are particularly underthreat as a result of forest harvesting, mining, drainage of wetlands for agriculture and urban use,illegal hunting, invasion of non-native species, and pollution. In response to these activities, theGovernment of Georgia has begun to act to protect important natural resources and to preservebiodiversity.

7. Under the Baseline Scenario, it is expected that the Government of Georgia expendituresrelated to biodiversity conservation in the coastal area over the period of the project will beUS$2.07 million.

8. A number of natural resource management and biodiversity conservation activities inGeorgia are being financed by other international developing agencies, or will be underimplementation through the proposed IDA project. These contributions include:

i. Two World Bank-managed investments (one proposed, one under implementation) which haveevolved from the BSEP. The proposed Integrated Coastal Management Project willrehabilitate and protect Georgia's coastal Black Sea area as well as promote the sustainabledevelopment of the region -- all activities expected to have a positive impact upon marine andcoastal biodiversity. The project includes components for legal and institutional harmonizationfor coastal planning in coordination with local communities and interest groups, andenvironmental quality monitoring and information systems which complement efforts initiatedunder the BSEP and the regionally endorsed Black Sea Strategic Action Plan. In addition, IDAfunds will be used to help establish Park/Reserve infrastructure and equipment and developsocio-economic activities in support zones in the Kolkheti and Kobuleti National Parks. TheMunicipal Infrastructure Rehabilitation Project is aimed at improving efforts to reducecoastal contamination, diminishing impacts on coastal and marine biodiversity. Components ofthe two projects which will have specific positive benefits for coastal.biodiversity are estimatedat US$ 3.6 million.

ii. Dutch Government activities related to technical assistance for the assessment of majorerosion issues along the coast and the identification of cost-effective solutions for follow-oninvestment, focusing on the Batumi and Poti areas (US$ 500,000).

iii. Dutch Government activities targeted towards the development of a national oil spillcontingency plan and emergency response capability for Georgia that will assist Georgia inmeeting its international commitments under conventions and protocols for the protection of theBlack Sea Environment (US$ 500,000).

iv. GEF Enabling Activities grant for the preparation of a National Biodiversity Strategy/ActionPlan and National Report (US$ 120,000).

61

v. Black Sea Environment Program. Georgia is one of the six Black Sea countries participatingin the BSEP, which has produced the Strategic Action Plan that seeks to reverse environmentaldegradation of Black Sea ecosystems. The BSEP activities focus on building capacity in theMinistry of the Environment in environmental management of Black Sea ecosystems (US$68,900).

vi. UNDP Environmental Capacity-Building Project The project will strengthen the MoE,especially in areas of information management and communication and professionaldevelopment and training activities at national, regional, district, and municipal levels. Theproject also supports public awareness on environmentally related issues. The Project activitieswhich are expected to have specific positive benefits for coastal biodiversity are estimated atUS$25,000.

9. Costs. Total expenditures under the Baseline Scenario are estimated at US$ 7.07 millionincluding nearly US$ 2.07 million from the Government of Georgia and US $5.00 millionthrough international cooperation.

10. Benefits. Implementation of the Baseline Scenario will result in improvements to theprotection and management of biodiversity within the proposed protected areas and publicawareness of the need for biodiversity conservation. NGO efforts will serve to increaseawareness of threats to biodiversity in the region. The Baseline Scenario will address issues ofenvironmental quality monitoring, coastal erosion, oil spill contingency planning and response,regional developmental planning and water quality, capacity-building within the Ministry ofEnvironment and, to some degree, elementary protection of the Kolkheti and Kobuleti wetlandareas. However, existing government resources and international financing efforts directed toforest and wetland biodiversity will not ensure protection of globally significant biodiversity inthe Kolkheti and Kobuleti designated areas. In terms of protecting biodiversity in the Kolkhetiwetlands region it is unlikely that the limited expenditures will have a significant impact inslowing encroachment into these fragile habitats.

Global Environmental Objective

11. The GoG ratified the Convention on Biological Diversity in June 1994. The NationalBiodiversity Strategy/Action Plan (BSAP) and the Integrated Coastal Management Project, bothnow under preparation, identify the project region as a center of Georgian biodiversity, and theproject activities as the highest priority for improving the protection of the threatened Caucasusecosystems, including the lowland forests and wetlands of the Kolkheti. The Forest SectorStraLtegy, prepared as an input for the National Environmental Action Plan, identifies the need todevelop interdisciplinary forest planning, including through the integration of biodiversityconservation. All of these recommendations are consistent with the GEF ICZM project.

12. As a consequence of the current course of action, regarded as the Baseline Scenario,Gecorgia's diverse and abundant biodiversity will likely continue to suffer from unsustainabletimber and fuelwood harvesting, overgrazing and associated disturbance, illegal hunting, andhabitat loss and fragmentation. In addition, the Kolkheti's coastal zone will probably continue tolose marine, wetland and upland communities, and the unique animal and plant species dependentupon these habitats.

13. Scope. The GEF Alternative would provide the means (above and beyond the BaselineScenario) for creating the Kolkheti National Park and Kobuleti Nature Reserve and implementing

62

management plans. The specific objectives of the draft management guidelines that would beaddressed under the project are: (i) conservation of the biodiversity of the Kolkheti regionthrough protection, management, and restoration of unique plant communities; (ii) protection offish spawning grounds necessary for the protection of freshwater and marine biodiversity andtheir sustainable use; (iii) improved monitoring and applied research on biodiversity and theeffectiveness of conservation efforts; (iv) establishment of infrastructure for improvedbiodiversity protection and development of nature-based tourism in the region; (v) recovery ofthreatened agricultural biodiversity; (vi) preparing and supporting Park administration andmanagement; and (vii) strengthening public education and awareness.

14. Costs. The total cost of the GEF Alternative is estimated atUS $9.04 million, detailed asfollows: (i) legal and institutional strengthening (for Ministry of Enviromnent andagencies for integrated coastal management -- US$ 1.77 million (same as Baseline); (ii)establishment of Kolkheti National Park and Kobuleti Nature Reserve and theimplementation of their management plans -- US$ 3.69 million (GEF financing - US$ 1.32million); (iii) establishment of coastal environmental monitoring and informnation system -US$1.65 million (same as Baseline); (iv) pollution control studies and oil spill contingency planningand energy response capacity -- US$ 1.13 million (same as Baseline); (v) assessments of coastalerosion and municipal water resources problems - US$ 0.5 million (same as Baseline); (vi)development of national strategies for environmental protection -- US$ 0.29 million (same asBaseline).

15. Benefits. Implementation of the GEF Alternative would provide the means for theestablishment of effective protected areas and the integration of biodiversity conservationobjectives into regional and local development. Global benefits would include the recovery offorest and steppe habitats protecting endemic threatened flora and fauna, and effect theirrecovery. Benefits generated from the project would also include the promotion of local andregional cooperation in biodiversity conservation. In addition, the GEF Alternative would protectunique coastal and marine and numerous threatened endemic species. Global benefits wouldinclude the protection of migratory waterbirds and marine environments and species-rich steppecommunities, strengthening public education and awareness and restoring lowland forest,wetland, and agricultural biodiversity.

Incremental Costs

16. The difference between the cost of the Baseline Scenario US$ 7.07 million and the cost ofthe GEF Alternative US$ 9.03 million is estimated at US$ 1.96 million, of which US$ 1.32million is provided by GEF financing. This represents the incremental cost for achievingsustainable global environmental benefits.

63

Table FIncremental Cost Matrix

Component Sector Cost Category US$ Million Domestic Benefits Global BenefitsLegal and Baseline 1.77 Increased public sector Strengthened policy and legalInstitutional capacity to manage coastal framework for coastal! marineStrenigthening (for environmental resources. protected areas management.Ministry of Increased public sector capacityEnvironment and to manage protected areas.agencies forintegrated coastalmanagement . _

With GEF 1.77 Same as above. Same as above.AlternativeIncrement 0

Establishment of Baseline 2.37 Increased protection of Conservation of globallythe Kolkheti coastal and marine wildlife significant biodiversity in theNational Park / and their foraging areas in Black Sea Kolkheti region.Kobuileti Nature the Kolkheti National ParkReserve and Kobuleti Nature

Reserve.With GEF 3.69 Same as above Same as aboveAltemativeIncrement 1.32

Establishment of a Baseline 1.65 Improved both national and Increased collection and analysisCoastal regional monitoring of information vital forEnvironmental capacity. conserving endemic flora andMonitoring and fauna, as well as migratoryInformation System waterbirds. Development of

methodologies for undertakingbiodiversity censuses andinventories, ecological studies,and studies on human impacts inthese areas.

With GEF 1.65 Same as above. Same as above.AlternativeIncrement 0

Assessment of Baseline 0.5 Increased understanding Ensured protection of buffer zoneCoastal Erosion and priority-setting of between marine and freshwater

investments to address aquatic systems withmajor erosion issues along international significance.the coast.

With GEF 0.5 Same as above. Same as aboveAlternativeIncrement 0

Pollution Control: Baseline 1.10 Increased capacity to Reduced impacts on coastal andStudies & Oil Spill respond to pollution and oil marine biodiversity in anContingency spill emergencies. international waterway.Planining andEmergencyResponse

With GEF 1.10 Same as above. Same as above.__ _ ._____________ Alternative

Increment 0

64

Development of Baseline .29 Increased understanding Increased understanding andNational Strategies and ability to set priorities ability to set priorities forfor Environmental for investments for national investments for internationalProtection enviromnental environmental benefits.

improvementWith GEF .29 Same as above. Same as above.AlternativeIncrement 6

65

Annex 12Georgia Integrated Coastal Management Project

President of Georgia Decreeon

The State Consultative Commissionfor

Integrated Coastal Zone Management

66

President of GeorgiaDecree

No. 608 OcLober 25 of 998 Tbilisi

On Establishment of State Consultative Commissionfor Integrated Coastal Zone Management

Taidng into consideration intemasional commits2ents within the 'Convenitn forthe Protection of the Black Sea Aganst Pollution" (Bucharost 19923) nd the "StrategcAcciwn Plani for the Rehabilitaton and Protecion of the Black Sea (Istanbul, 1996), andfor th purposes of further development of integrated coastal zone management inGeorgia:

I. The 'SW*e Consults±ive CAomnission for lntegrated Coasa ZnmeManagei,net" (*trther - Commission) is establislicd with following composition;Nino Clkhobadze - Minister of Environment (Co-chairman);MOrab Chkhcsikell - Minister of Urbanisation and Conmuction (Co-chairman);RavazAbashidze - Vice-Mayor of the City of Batumi;David Adelulvili * Lcading State Adviser of Ministry of Trnsport;Alexander Arobolidzc - Director of engineeing company "A&E Consultants";Giorgi Gachechiladzc - First Deputy Chairman of Parliamentary Comminrna on

Envirommental Protection and Natural Resources;Gia Gvazavsa Chairman of Sub-Committee on Proteced Territories of

Parliamelituy C.ommittee on Environmentil Protionand Natural ResourCe:

Gogi Vashakinadae * Gencral Director of Georgia Intational Oil CorporationGuigol Datunaihvl - Hcad of Agricultue, Food and Enviromnental Protection

Divislon of Stat Clmncellery's Economio Sevice;Arizor Tkhilaishvili - Minister of Environment of Aebam Autonomous

Republic;RevaaI Kikiani * Leading State Adviser of Governor's Apparatus of

Samegrelo-Zemo Svaneti Region;Taricl Kalulashvffi - Deputy Minister oflustice;itesarion Lobzhanidxe . Deputy Head of State Depaflment of Protucted Areas,

Nature Reserves and Hunting Managument;trakli Motsrcra - Vice-Mayor of the City of Pi;Gin Nakhutsrishvili - Director of Instituto of Botany of Georgian Acadomy .of

SciencesZurab Nemsadze - Hlead ofDepartment ofTenitorial, Spatial Organisatlon,

Urban Development and Arhitoctur of Ministy ofUrbanisatlon and Construction;

David Nilkolcishvili . Chairman of <Poseidon> Marine Asociation;14vur Ripava - Head of Stste Depawtment of Environment of ApichazetiL.vter Rigvuva -Aiuctomus Retpublic;

Sakvare. Salukvadze - iead of Depar=t=ent of Urbanisation andConstruction of Guria Region;

Zezva Gugunishvili i First Deputy Head of State Department ofTourism and Resorts;

Mikhell Kurkhuli - Deputy 1ead of Sate Sanitary Supeavision andHygiene Norms DeparUtent of Ministry of liealth;

Gela Charkviani - Deputy Minster of Economy;Zaur Cbkhikvishvili - Head of Division of Fvironmen tal Protection and

Natural Resource Use of Ministry of Agricultureand Food;

Giorgi Khanishviii - Deputy MiWster of rinunce;Ekaterine Khmaladze - Head of Division of Ecological Expertise of

Ninistry of Environment;Leri Chochua - Leading Specialist of Forestry and Forest Use

Division of State Department of Forestry;2. On the basis of principles-of sustainable development the Comunission should:a) Lilaboratc recommendations and suggestions for developing legal and

institutional framework in the area of integrated coastal zone management in Georgia;b) Promote inter-agency co-ordination in planning, use of ntural resources. as

well as providing safe environment for public health withim the coastal zone;5,) Elaborate recommendations for measures and policics necessary for.pwsiiing,

protecion and sustainable use of natural resources, as well as provision of safeenvironment for public health in the coasta zone;

..d.) jProvid. a clearing house for, review, elaborate findings and recommendaxionsfor majcr development projects in the coastal zone and for programs related to integr,aedcoastalI7-one management;

e) Stnmulaie m7d supportinitiatives at central, regional, and local levels aimed atprocectng Lhc environment of and the health of population in Georgia's coastal zone;

L Ilmprove niechanismns fbr dccision-making, conulatons and wide publicparticipakion zowards setling the problematic issues of integrated coastal -onemanagement;

g) Attract and co-ordinae the assistance of donor organisations in mobilisinginvestznents and technical assistance in environmental protection and sustainabledevelopment of setleinents, related to integrae coastal zone management.

3. T'he Commission should elaborate and present by December 1, 2000 theStrategy and Action Plan for Integrated Coastal Zone Management of Georgia.

4. The Ministry of Environment (N. Chkhobadze) and Ministry of Urhasationand Constrn.tion (M. Chkhenkeli) should jointly claborate and approve theCommission's Rules of Procedure.

F. Shevardnadze(signature, SLamp)

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Concordance TableGeorgia- CREDIT AGREEMENT

Integrated Coastal Zone Management Project

Agreements Reached at Negotiations 1 Corresponding Section of LegalDocuments

Procurement Arrangements, G2 (a) Section 3.02, Schedule 3

Disbursement Arrangements, G2 (b) Schedule I

Special Accounts, G2 (c) Schedule 4

Project Management, G2 (d) Section 3.01

Project Accounts & Auditing, G2 (e) Article IV

Reporting and Evaluation, G2 (f) to be incorporated into legal agreement

Counterpart Contribution, G2 (g) Section 3.01

Establishment of NICC, G3 (a) Section 1.02(b)

Financial Management System, G4 (a) Section 6.01(a)

Adoption of National Park Legislation, G5 (a) Schedule 1, para 3

Environmental Review, G5 (b) Schedule 1, para 3

Concordance TableGeorgia- GEF GRANT AGREEMENT

Integrated Coastal Zone Management Project

Agreements Reached at Negotiations Corresponding Section of Legal_ Documents

Procurement Arrangements, G2 (a) Schedule 3.02, Schedule 3

Disbursement Arrangements, G2 (b) Schedule I

Special Accounts, G2 (c) Schedule 4

Project Management, G2 (d) Section 3.01

Project Accounts & Auditing, G2 (e) Article IV

Reporting and Evaluation, G2 (f) to be incorporated into legal agreement

Counterpart Contribution, G2 (g) Section 3.01

Establishment of NICC, G3 (a) Section 1.02(b)

Financial Management System, G4 (a) Section 6.01(a)

Adoption of National Park Legislation, G5 (a) Schedule 1, para 3

Environmental Review, G5 (b) Schedule 1, para 3

Map 1. Georgia and the Black Sea IBRD 29774

40. 41 42- 43' 44

GEORGIAINTEGRATED COASTAL

MANAGEMENT PROJECTPOESO MONITORING AND*0INFORMATION SYSTEM

PROPO_SE KOLKHETI NATIONAL PARK

AND KORULETI AUE EEV

II UPPORT ZONE

GEORGIA BLACK SRA DRAINAGR EASIN

BOUNDARY

ELEVATIONS IN METERS:4" 4US

2000

200

C GLACIER AREAS

RIVERS

o SELECTED CITIES

OD AUTONOMOUS REFUELIC CAPITALS

* NATIONAL CAPITAL

- - - AUTONOMOUS REPUBLIC BOUNDARIES

I -NTERNATIONAL ROUNDARIES

T,Ai,~ . ,pd-d bpyo A. p D-g ~,Th. Wo4Bo,1 B,oMk

U K A--N S:see WORD 29&775

\M4OLDOVA

ROMANIA (, eo

Krosnodor ~ ~ Csp'a

BULGARIA Vo loc6k Sdo

-- v TURKRKEY

4SLAMIC REP. 06 5KLMTR

./SYRIAN.\ OIRN-AMEA

CYPIRE4S, ARAB RZEP IRAQ Aled,Mrroneun Soc NOVTMBTR 1998~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~OEME 19

Map 2. Black Sea Coast and Wetlands Area, Project SitesThis op ,os prduced by the R U - A6

Mop Design Unit of The World Bank. -tl1A.

Amldia ~ ~~~~~~~~~~~~~~~~~~~~The boundaries, colors,den,oninotions FDRT)

.~~~~~~~~~~~~~~~~~~~~~~~~~~~~ti .p do ;o iif sn,ply m h ptoon the legol status ofoany ss'rimoy.m'GO GI, A'

Sarpi - W Idies AREAS

/~~~~~~~ j _~ ---E

'.CvEySER 998