Document of The World Bank FOR OFFICIAL USE ONLY Report No: PP5139 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND/OR INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT PAPER ON A PROPOSED GRANT IN THE AMOUNT OF US$ 2 MILLION TO THE {MINISTRY OF ECOLOGY AND NATURAL RESOURCES, THE REPUBLIC OF KAZAKHSTAN} FOR A {PROGREEN KAZAKHSTAN RESILIENT LANDSCAPES RESTORATION PROJECT} 9 June 2023 {Environment, Natural Resources & The Blue Economy Global Practice} {Europe And Central Asia Region} CURRENCY EQUIVALENTS (Exchange Rate Effective {Apr 4, 2023}) Currency Unit = Kazakhstani Tenge 447.85 = US$1 FISCAL YEAR January 1 - December 31 Regional Vice President: Antonella Bassani Country Director: Tatiana A. Proskuryakova Global Director: Valerie Hickey Practice Manager: Sanjay Srivastava Task Team Leader(s): Talimjan Urazov, Leela Raina ABBREVIATIONS AND ACRONYMS bln Billion CO2 Carbon Dioxide CBD Convention on Biodiversity Protection CPF Country Partnership Framework CPP Community-Private Plantations CPSD Country Private Sector Diagnostics DAS/DASB Dry Aral Seabed DA Designated Account DFIL Disbursement and Financial Information Letter E&S Environmental and Social ECA Europe and Central Asia ECCCA 30 Forest Landscape Restoration initiative in Europe, Caucasus and Central Asia ESIA Environmental and Social Impact Assessments ESF Environmental and Social Framework ESMF Environmental and Social Management Framework ESMP Environmental and Social Management Plan ESRS Environmental and Social Review Summary ESSA Environmental and Social Systems Assessment EX-ACT EX-Ante Carbon balance Tool (EX-ACT) FAO Food and Agriculture Organization of United Nations FM Financial Management FD Finance Department FMC Financial Management/accounting Consultant FMNR Farmer Managed Natural Regeneration FPRP Forest Protection and Rehabilitation Project FWC Forestry and Wildlife Committee GDP Gross Domestic Product GCP Global Coordination Project GEF Global Environmental Facility GHG Greenhouse Gases GIZ German development agency GRS Grievance Redress Service ha hectare IBRD International Bank for Reconstruction and Development IDA International Development Association IFC International Finance Corporation IFEMP Integrated Forest Ecosystem Management Project IFI International Financial Institution IFRs Interim Unaudited Financial Reports INDC Intended Nationally Determined Contribution IPF Investment Project Financing kg kilogram KM Knowledge Management KSRFI Kazakh Scientific Research Forest Institute KZT Kazakhstani Tenge LDN Land Degradation Neutrality LFPI Livestock and Forage Production Institute LULUCF Land use, Land-Use Change and Forestry M&E Monitoring and Evaluation MENR Ministry of Ecology and Natural Resources mln Million MOA Ministry of Agriculture MOF Ministry of Finance MT Million tonnes MTR Mid-term review NDC Nationally Determined Contribution NPV Net Present Value OECD Organization for Economic Co-operation and Development OHS Occupational Health and Safety PDO Program Development Objectives PFM Participatory Forest Management PforR Program for Results PIU Project Implementation Unit POM Program Operations Manual PPP Public-Private Partnerships PPSD Project Procurement Strategy for Development PROFOR World Bank Program on Forests PROGREEN The Global Partnership for Sustainable and Resilient Landscapes RAS/JERP Reimbursable Advisory Services/Joint Economic Research Program R&D Research and Development RESILAND Resilient Landscape Program SEP Stakeholder Engagement Plan SLM Sustainable Landscape Management SLDP Sustainable Livestock Development Program SME Small and Medium Enterprise SOE State-Owned Enterprise SoE Statement of Expenditures SORT Systematic Operations Risk Assessment Tool TBD To Be Determined TFP Total Factor Productivity TOR Terms of Reference US$ United States Dollar UNCCD United Nations Convention to Combat Desertification UNDP United Nations Development Programme WA Withdrawal Application WAVES Wealth Accounting and the Valuation of Ecosystem Services WOCAT World Overview of Conservation Approaches and Technologies The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) BASIC INFORMATION Is this a regionally tagged project? Country (ies) No Financing Instrument Classification Investment Project Financing Small Grants Approval Date Closing Date Environmental and Social Risk Classification 23-Jun-2023 30-Sep-2026 Moderate Approval Authority Bank/IFC Collaboration CDA No Please Explain Proposed Development Objective(s) To pilot agroforestry practices using a community-centered approach and to strengthen government capacity for landscape management and restoration in protected areas. Components Component Name Cost (USD Million) Piloting agroforestry practices for landscape restoration 0.94 Boosting capacity for biodiversity and nature-based tourism 0.96 Project management and monitoring 0.10 Page 1 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) Organizations Borrower : The Republic of Kazakhstan Implementing Agency : Forestry and Wildlife Committee of the Ministry of Ecology and Natural Resources PROJECT FINANCING DATA (US$, Millions) SUMMARY-NewFin1 Total Project Cost 2.00 Total Financing 2.00 Financing Gap 0.00 DETAILS -NewFinEnh1 Non-World Bank Group Financing Trust Funds 2.00 Global P'ship for Sust. and Resilient Landscapes - PROGREEN 2.00 Expected Disbursements (in USD Million) Fiscal 2023 2024 2025 2026 Year Annu 0.05 0.13 0.19 0.34 al Cumu 0.05 0.18 0.37 0.71 lative INSTITUTIONAL DATA Financing & Implementation Modalities Situations of Urgent Need of Assistance or Capacity Constraints [ ] Fragile State(s) [ ] Fragile within a [ ] Small State(s) [ ] Conflict [ ] Responding to non-fragile Country Natural or Man-made Page 2 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) Disaster Other Situations [ ] Financial Intermediaries (FI) [ ] Series of Projects (SOP) [ ] Performance-Based Conditions (PBCs) [ ] Contingent Emergency Response Component (CERC) [ ] Alternative Procurement Arrangements (APA) [ ] Hands-on Expanded Implementation Support (HEIS) Practice Area (Lead) Environment, Natural Resources & the Blue Economy Contributing Practice Areas Agriculture and Food OVERALL RISK RATING Risk Category Rating Overall ⚫ Moderate COMPLIANCE Policy Does the project depart from the CPF in content or in other significant respects? [ ] Yes [✔] No Does the project require any waivers of Bank policies? [ ] Yes [✔] No Page 3 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) Environmental and Social Standards Relevance Given its Context at the Time of Appraisal E & S Standards Relevance Assessment and Management of Environmental and Social Risks and Impacts Relevant Stakeholder Engagement and Information Disclosure Relevant Labor and Working Conditions Relevant Resource Efficiency and Pollution Prevention and Management Relevant Community Health and Safety Relevant Land Acquisition, Restrictions on Land Use and Involuntary Resettlement Not Currently Relevant Biodiversity Conservation and Sustainable Management of Living Natural Relevant Resources Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Not Currently Relevant Local Communities Cultural Heritage Relevant Financial Intermediaries Not Currently Relevant Legal Covenants Conditions PROJECT TEAM Bank Staff Name Role Specialization Unit Team Leader(ADM Talimjan Urazov SCAAG Responsible) Leela Raina Team Leader SCAEN Page 4 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) Procurement Specialist(ADM Kuat Sultan EECRU Responsible) Jamal Abdulla Abdulaziz Procurement Specialist EECRU Financial Management Aliya Kim EECG1 Specialist(ADM Responsible) Social Specialist(ADM Gernot Brodnig SCASO Responsible) Environmental Specialist(ADM Obaidullah Hidayat SSAEN Responsible) Anara Akhmetova Procurement Team ECCKZ Azat Alkeyev Team Member Admin Support ECCKZ Davor Smiciklas Team Member Disbursement WFACS Jenny Helena Dangre Counsel Country Lawyer LEGLE Marie Roger Augustin Counsel Legal Operations Officer LEGLE Miriam Privarova Environmental Specialist SCAEN Zhuldyz Zhurumbetova Environmental Specialist SCAEN Extended Team Name Title Organization Location Alexander Borovkov Senior Forestry Consultant Kazakhstan Page 5 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) Kazakhstan PROGREEN Kazakhstan Resilient Landscapes Restoration Project TABLE OF CONTENTS I. STRATEGIC CONTEXT ...................................................................................................... 7 A. Country Context ................................................................................................................. 7 B. Sectoral and Institutional Context ..................................................................................... 8 C. Higher Level Objectives to which the Project Contributes ............................................. 11 II. PROJECT DEVELOPMENT OBJECTIVES ............................................................................ 13 A. PDO ................................................................................................................................... 13 B. Project Beneficiaries ......................................................................................................... 14 C. PDO-Level Results Indicators ........................................................................................... 15 D. Results Chain .................................................................................................................... 15 III. PROJECT DESCRIPTION.................................................................................................. 18 A. Project Components ......................................................................................................... 18 B. Project Cost and Financing ............................................................................................... 20 E. Rationale for Bank Involvement and Role of Partners ................................................ 21 F. Lessons Learned and Reflected in the Project Design ................................................. 22 IV. IMPLEMENTATION ARRANGEMENTS ............................................................................ 23 A. Institutional and Implementation Arrangements ........................................................... 23 B. Corporate Commitments.................................................................................................. 24 C. Results Monitoring and Evaluation .................................................................................. 26 D. Sustainability .................................................................................................................... 27 V. KEY RISKS ..................................................................................................................... 27 A. Overall Risk Rating and Explanation of Key Risks ........................................................... 27 VI. APPRAISAL SUMMARY .................................................................................................. 28 A. Legal Operational Policies ................................................................................................ 30 B. Environmental and Social................................................................................................. 30 VII. WORLD BANK GRIEVANCE REDRESS .............................................................................. 30 VII. RESULTS FRAMEWORK AND MONITORING .................................................................... 32 Page 6 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) I. STRATEGIC CONTEXT A. Country Context 1. Kazakhstan is one of Central Asia's economic success stories, moving from lower-middle-income to upper-middle-income status. The Gross Domestic Product (GDP) per capita has grown sixfold since 2002, and Kazakhstan now accounts for nearly two-thirds of the regional GDP. Recent economic recovery after suffering a COVID-19 pandemic-driven slump of -2.6 percent in 2020 has gradually gained momentum but accompanied by higher inflation. Real GDP growth in 2021 has been reported at 4.1 percent. Household consumption, driven by pent-up demand, fiscal policy support, and reduced COVID-19 restrictions, has been a major driver of GDP growth. The country has an ambitious goal to be among the top thirty economies in the world by 2050, aspiring to join the Organization for Economic Co-operation and Development (OECD). 2. Despite economic success, Kazakhstan must enhance productivity and innovation and diversify its economy by switching from input-driven growth to efficiency gains. Kazakhstan's growth in productivity has stagnated since 2008, highlighting serious structural challenges. Kazakhstan needs to diversify its economic basis by boosting non-extractive industries, especially agriculture and forests, and minimizing the dominance of a few large state-owned enterprises (SOEs). 3. Natural capital and its management will impact Kazakhstan's productivity, innovation, and diversification. Climate change, economic growth, and population growth are exerting increasing pressure on natural capital. Climate change will also increase vulnerabilities of existing environmental challenges such as land degradation, declining agricultural productivity, water pollution, and sedimentation. If the country continues along this path, it will come at a high cost to the economy and its people, particularly hindering agricultural development and impacting rural communities. Aligning policies, regulations, and key institutions can improve the productive and resilient utilization of natural resources and assets. 4. Kazakhstan is at a critical juncture to transition to a green economy, an opportunity to protect, restore, and manage natural capital for its people. At the 26th United Nations Climate Change Conference of Parties (COP) in Glasgow in 2021, Kazakhstan reaffirmed its commitment to achieving carbon neutrality by 2060 and reducing GHG emissions by 15 percent by 2030 from 1990 levels by adopting mitigation actions and policies in several sectors (energy, agriculture, waste, transport, buildings), including land use, land-use change, and forestry (LULUCF). In 2021, the Environmental Code revision included climate adaptation priorities. Kazakhstan also signed the Astana Commitments setting Land Degradation Neutrality (LDN) targets, and its State Program for Agro-Industrial Development includes afforestation as an LDN solution. On the one hand, the commitment enables opportunities for mitigation, adaptation, and natural resource manage; however, Kazakhstan's fossil fuel-dependent economy will face green transition pressure. The transition will require economic diversification, a broad set of policies and just transition measures for affected workers and communities to minimize job and income loss for low-income households. Page 7 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) B. Sectoral and Institutional Context 5. Kazakhstan has a unique set of landscapes1, including deserts, high mountains with diverse types of vegetation such as meadow, steppe and savanna forests that enrich the nation’s natural capital. Agriculture and forestry provide about 5.1 percent of Kazakhstan's GDP and 13.5 percent of the country's jobs and 41.1 percent of Kazakhstan's population live in rural areas. While rich in mineral resources, Kazakhstan is a forest-scarce country with only 4.7 percent of the total country area covered by forests. The existing forest area consists of 49 percent Saxaul forests, which are of high environmental importance in protecting the soil from erosion.2 Since independence, particularly in the past 20 years, as Soviet systems have been replaced by small farmers and ranchers significantly reducing herd inventory, the country has seen a reduction in pastureland and an increase in fallow rangeland, hayfields, and forests. 6. Cost of inaction is high. Land degradation and loss of ecosystem services have eroded natural capital, which is critical to the economy, poor communities, and ecosystem health. Land degradation alone, can cost the economy 3-11 percent of its GDP with the cost of inaction being five times higher than the cost of action3. One key example is the degraded Aral Seabed (DAS), which has had tragic impacts on nearby communities’ livelihoods and health. A total of 3.4 million hectares of the former seabed, 1.8 million of which are in Kazakhstan, have dried and turned into desert of sand beds and salt flats leading to deterioration of air quality (sand and dust) for nearby residents and reduced crop yields. Also, climate change is expected to exacerbate degradation, thereby further reducing dryland productivity. The resulting loss of arable land is particularly affecting the rural poor, who depend directly on what the land can provide for their survival and livelihood. 7. Land degradation hotspots in priority transboundary landscapes are concentrated in southern Kazakhstan. Estimates of land degradation in Kazakhstan vary - 664 percent of total area (linked to plant cover) is prone to desertification5 to 15 percent of rangelands suffered extreme degradation6. Almost a third of agricultural land is either degraded or at serious risk of degradation, with over 10 million hectares7 of potentially arable land currently abandoned. At the same time, pastures near populated areas suffer from overgrazing (about 20 million ha). While most of the land degradation hotspots are concentrated in the north of Kazakhstan and stretch over Eastern Kazakhstan to the southern part of Central Asia, covering Kyrgyzstan, the north-west of Tajikistan and the southern parts of Uzbekistan and Turkmenistan, transboundary landscapes with high density of land degradation at the boundary of protected landscapes are concentrated in the southern border of Kazakhstan. Addressing land degradation conjointly, that is at the boundary of protected landscapes, would complement existing efforts focused on land degradation near 1 It includes arid and sub-humid lands, which cover more than 75 percent of the country’s area, and agrosystems include man-made and man- managed plough lands, forests lands and pasturelands. Forest lands are found in regions with Saxaul plantations, including in Zhambyl and Kyzylorda regions, at 15.4 percent and 13.5 percent, respectively. 2 UNECE (2013). Processing of forest inventory data (workshop presentation). In Russian. 3 Quillérou, E., Thomas, R.J., Guchgeldiyev, O., Ettling, S., Etter, H., & Stewart, N. (2016). Economics of Land Degradation (ELD) Initiative: Broadening options for improved economic sustainability in Central Asia. Synthesis report. Report for the ELD Initiative from the Dryland Systems Program of CGIAR c/o ICARDA, Amman, Jordan. Available from www.eld-initiative.org. 4 NASA. 2014. Land-Cover Land-Use Change Program (https://lcluc.umd.edu/hotspot/dryland-degradation-kazakhstan) 5 Draft Government of Kazakhstan’s Climate Change Strategy, 2022 6 The Livestock and Forage Production Institute (LFPI) in Almaty estimated that about 14% of Kazakhstan's grazing lands are considered as degraded. 7 Ibid. Page 8 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) productive landscapes through the GEF RESILAND (P171577) in southern Kazakhstan. Furthermore, opportunities exist to leverage complementarities with regional collaboration and shared learning as part of the RESILAND+ CA initiative, project sites of which are also located in transboundary habitats of bordering southern Kazakhstan. Figure 1 Land degradation hotspots in Central Asia (in red), a negative change in NDVI between 1982 and 1984 and 2006. Source: Mirzabaev et al (2015) Economics of Land Degradation in Central Asia8 8. Climate change, manifested by droughts, flooding, landslides, etc., acts as a multiplier in the vicious cycle of land degradation, unsuitable agricultural practices, water pollution and sedimentation, destruction of infrastructure, and loss of lives. When landscapes suffer from erosion, deforestation, overgrazing and other pressures, agriculture productivity is lost, and wellbeing of local population deteriorates. An increase in the duration and warmer seasons by 10-15 percent during vegetative period is projected to negatively affect Kazakhstan rangelands, particularly in the southern regions. The grazing period on pastures may become longer, however, an increase in summer temperature will lead to an earlier burnout of pasture plants and a lengthening of the duration of their summer rest. Reduction of moisture availability in the vegetative period by 10-16 percent will adversely affect the growth and development of pasture plants. Reduction in the yield of plants of lowland pastures may reach 10-25 percent, and in mountain pastures 30- 40 percent. This may lead to a reduction of the cattle bearing capacity of lowland pastures and mountain pastures by the same amounts respectively. Protecting and managing forests and smart livestock practices should help to reverse the cycle. 9. Tree plantation and a sustainable use of pasture ecosystems are opportunities for Kazakhstan to combat degradation, invest in adaptation measures, build carbon sinks, and improve the health of people and ecosystems. Several studies9,10 have proposed measures for reducing land degradation in Central Asia, amongst them are through tree planting, conservation programs for restoring the functional integrity of steppe ecosystems, and improved grazing management practices, promoting conservation agriculture, 8 Mirzabaev, A., Goedecke, J., Dubovyk, O., Djanibekov, U., Le, Q.B., Aw-Hassan, A. (2016). Economics of Land Degradation in Central Asia. In: Nkonya, E., Mirzabaev, A., von Braun, J. (eds) Economics of Land Degradation and Improvement – A Global Assessment for Sustainable Development. Springer, Cham. https://doi.org/10.1007/978-3-319-19168-3_10 9 For example, Djanibekov and Khamzina (2016); Khamzina et al. (2009); Khamzina et al. (2016); Chupahin (2010); Akinshina et al. (2016); Breckle (2013) and Abdullayev (2010). 10 IPBES (2018). Summary for policymakers of the assessment report on land degradation and restoration of the Intergovernmental Science Policy Platform on Biodiversity and Ecosystem Services. IPBES secretariat, Bonn, Germany. 44 pages Page 9 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) agroforestry, and other agroecological practices. Further, land is both a source and a sink of greenhouse gases (GHGs). Sustainable land management can, therefore, contribute to reducing the negative impacts of multiple stressors, including climate change, on ecosystems and societies.11 In this context, the presidential commitment to plant 2 billion trees by 2025 will pave the way forward for mass afforestation in Kazakhstan in the coming years. Agroforestry practices accompanied by afforestation would also play a key role to sequester carbon, as expected in the scale of 45 MTCO2, for Kazakhstan to reach carbon neutrality in 2060. In addition, these practices would account as critical adaptation measures, to help priority sectors of agriculture, water and forestry respond to climate change. 10. A people centered approach (communities and farmers) is critical to secure livelihoods and promote pasture productivity for Kazakhstan’s landscapes. Studies show that local environmental health could be increased and maintained through the continued facilitation of afforestation projects in the degraded Aral Seabed.12 Involving local populations in afforestation could also make the projects more sustainable, less expensive to implement13 with increased community ownership by providing opportunities for green jobs. Most of the land in Kazakhstan's ecological zones are towards the lower limit of the vegetative productivity scale, therefore planting trees, forbs, and woody herbaceous plants is important to boost pasture productivity. 11. The Forestry and Wildlife Committee (FWC) under the Ministry of Ecology and Natural Resources is a government agency responsible for policy in the forestry sector, protected area management, and afforestation programs, on the frontlines in the fight against land degradation. Nearly all forests in Kazakhstan are state-owned and managed by regional governments under FWC supervision. Regional governments manage 79 percent of the land while FWC via specially established enterprises manages 20 percent of the land, and privately-owned forest area is insignificant at less than 700 hectares.14 In view of the insignificant involvement of the private sector in afforestation programs, FWC role is even more important. The area of the Forest Fund (area under the responsibility of forest authorities, although much of it does not have forest cover) is 30 million ha, just over 11 percent of the country’s land area. FWC manages about 24.6 percent of the Forest Fund, and local authorities (akimats) 74.7 percent. Table 1. Forest Fund Classification Forest Fund Classifications Area in Thousand Ha Forest Fund under FWC 7,389.6 11 IPCC (2018). Special Report on Climate Change, Desertification, Land Degradation, Sustainable Land Management, Food Security, and Greenhouse gas fluxes in Terrestrial Ecosystems. Chapter 6: Interlinkages between desertification, land degradation, food security and GHG fluxes: Synergies, trade-offs and Integrated Response Options. 12 Novitskiy, Z.B. (2012). Phytomelioration in the Southern Aralkum, in: Breckle, S-W., Wucherer, W., Dimeyeva, L.A., Ogar, N.P. (Eds.), Aralkum – a Man-Made Desert: The Desiccated Floor of the Aral Sea (Central Asia), Ecological Studies Volume 218. Springer- Verlag, Berlin Heidelberg, pp. 13 – 35. 13 Botman, E. (2009). Forest rehabilitation in the Republic of Uzbekistan. IUFRO World Series 20(4), 253 – 299. 14 World Bank (2018). Kazakhstan Community-Private Plantations: Analysis to better understand the potential for developing forest plantations. Washington DC: Program on Forests (PROFOR). Page 10 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) • Specially protected natural areas with the status of a legal entity (hereinafter referred to as 7,274.8 the SPNA) • SPNA- 10 state natural strictly protected reserves SNSPR 1,611.4 • SPNA- 13 state national natural parks SNNP 2,539.1 • SPNA- 6 state natural partially protected reserves 3,124.3 Office of the President of the Republic of Kazakhstan - State National Natural Park “Burabay� 129.3 The oblast akimats are in charge of 120 state forestry institutions 22,455.0 The Ministry of Investment and Development of the Republic of Kazakhstan oversees the: 64.2 • Protective stands along right of way of railroads Joint Stock Company National Company 15.7 “Kazakhstan Temir Zholyz • Protective stands on the roads “KazAvtoZhol� Source: UNECE (2020) Overview of State of Forests and Forest Management, Kazakhstan 12. FWC capacity and experience in fighting land degradation and managing protected areas is limited. FWC priorities traditionally included forest preservation and protection from fire, illegal logging, and pests, while combating desertification and land degradation emerged in the policy agenda relatively recently. GEF Resilient Landscapes Restoration Project that started recently contributes to the raising capacity of FWC in fighting land degradation. Still, land degradation affects Kazakhstan’s network of protected areas, which is of very important economic and recreational value for the population, the national economy, and the global community. It enables gain of individual income from tourism, creates jobs, generates government profits from visitations, and sequesters carbon. 13. Despite regulations and stricter than before penalties, many prominent reserves in South Kazakhstan oblast, including Aksu-Zhabagly, Karatau, and Sayram-Ugam, suffer from illegal logging and livestock overgrazing by neighboring rural communities whose own lands have degraded. While policies and regulations related to biodiversity exist such as the National Biodiversity Strategy and Action Plan (NBSAP), implementation has proven to be a challenge with few implementation-oriented roadmaps. Recreational potential of the protected areas remains untapped due to lack of tourism infrastructure and strategy for its development. Low capacity of the biodiversity monitoring system can’t inform policy making to prevent gradual extinction of valuable species. Addressing these shortcomings became priority areas for development of the protected areas and strengthening their capacity as natural reserves. C. Higher Level Objectives to which the Project Contributes 14. The World Bank Group (WBG) Regional Engagement Framework for Central Asia (REFCA) gives the highest priority to programs that improve connectivity or sustainability of regional public goods, both of which will be supported by the project. The REFCA further emphasizes the impact of land degradation and environmental investments. Accordingly, the REFCA recognizes RESILAND CA+ Program as one of two key WBG programs which address the Climate Change and Environment priority under Pillar 2 (Regional Public Goods). 15. The proposed project is aligned with and directly contributes to the WBG Country Partnership Framework FY20-25 (CPF, Report No. 143372), which was discussed at the World Bank Board on December Page 11 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) 12, 2019,15 namely, project objectives are part of the Focus Area 3 (Securing Sustainable, Resilient, and Low Carbon Growth), and Objective 7 of Preserving and Restoring Natural Capital. Particularly, “Weak institutions for environmental and forestry planning, management, and coordination� was cited as an institutional constraint to be addressed. In line with Global Environment Facility (GEF) engagement, specifically the Food System Land Use and Restoration (FOLUR) Impact Program Financed by the GEF (mentioned in the CPF), this project will support capacity building in the Forestry and Wildlife Committee as well as community-centric approach for landscape restoration in targeted degraded landscapes while reinforcing forestry sector planning. 16. The project will support the operationalization of the WBG Gender Strategy for FY16-FY23 (Report No. 102114). This project will lean on existing gender gap analysis done in collaboration with FAO in the GEF project which mainstreams gender actions and monitor progress towards closing the identified gender gaps in context of community livelihoods. Women’s opportunities and access to sustainable jobs and income will be facilitated through trainings on innovative agroforestry techniques through targeted messages, scheduling training during family-friendly hours, and providing adequate transportation to the demonstration plots. 17. This project will further the implementation of the Global Crisis Response Framework Paper, WBG Climate Action Plan16 and the ECA Climate Change Action Plan, particularly, Objective 2 of Climate Change Action Plan to dive a mainstreamed, whole-of-government programmatic approach of prioritizing cross- cutting solutions to catalyze impacts on a large scale, and the reference to the prioritized nexus solution in the high-potential area of sustainable landscape management. This will support building climate resilience and increasing absorptive capacity of carbon sinks in protected landscapes, a key action towards Paris Alignment as outlined in the Country Climate and Development Report (2022). This is extremely important, as carbon sequestration from forests is expected to offset emission reductions in the scale of 45 MTCO2, in order for Kazakhstan to reach carbon neutrality in 2060 as well as implement the concept of the transition to a "green economy"17 of the Republic of Kazakhstan. This also helps build climate resilience in line with Kazakhstan’s adaptation related commitments as per updated National Determined Contribution (NDC)18, including inclusion of adaptation measures in the Environmental Code19 and implementation of the National Biodiversity Strategy and Action Plan (NBSAP). This will help build long term resilience, in line with pillar three of the Global Crisis Response Framework20 on resilience by focusing on building ‘Climate resilience’ through gene bank of adaptive climate species, as well as ‘climate smart policies’ through development of ecotourism roadmap under pillar four on Strengthening policies for rebuilding better. 21 15 World Bank. 2019. Country Partnership Framework for the Republic of Kazakhstan for the Period of FY20-25. Report Number 143372-KZ. 16 World Bank (2019). The World Bank Group Action Plan on Climate Change Adaptation and Resilience. Washington, DC: World Bank. 17 Resolution No. 479 of the Government of the Republic of Kazakhstan dated July 29, 2020 18 https://adilet.zan.kz/kaz/docs/P2300000313 19 A new chapter on adaptation to climate change, included in the Environmental Code of the Republic of Kazakhstan dated January 2, 2021, has been developed. 20 World Bank (2022). Navigating Multiple Crises, Staying the Course on Long-term Development: The World Bank Group’s Response to the Crises Affecting Developing Countries (English). Washington, D.C.: World Bank Group. c 21 https://astanatimes.com/2022/10/officials-experts-discuss-kazakhstans-draft-carbon-neutrality-strategy/ Page 12 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) II. PROJECT DEVELOPMENT OBJECTIVES A. PDO 18. Project Development Objective (PDO) is to pilot agroforestry practices using a community-centered approach and to strengthen government capacity for landscape management and restoration in protected areas. 19. This project is a natural follow on of the GEF Resilient Landscapes Restoration Project (P171577), a child project under the Sustainable Forest Management Impact Program on Dryland Sustainable Landscapes financed by the seventh replenishment of the Global Environment Facility Trust Fund (DSL GEF-7. PDO of GEF project is ‘to pilot agroforestry practices using a community-centered approach and to build government capacity for landscape management and restoration’. While the targeted areas under the GEF project focus on land degradation in productive landscapes, the PROGREEN targeted areas focus on land degradation in the boundaries of protected landscapes. Component 1 is the same across the two projects, while component 2 is tailored towards the type of landscapes. 20. The PROGREEN resilient landscapes project is a part of the RESILAND CA+ Program whose goal is to increase resilience of regional landscapes in Central Asia. The regional impact of the Program will be measured by aggregating the results of individual RESILAND CA+ Program country projects and monitoring the results of regional activities. Accordingly, the PDO and PDO-level Indicators are harmonized across the RESILAND CA+ Program country projects. Strong links and complementarity with GEF project and projects under regional initiative of RESILAND CA+ are ensured by similar PDO and activities, which are expanded to the protected territories and areas adjacent to them. PROGREEN and RESILAND indicators are included as intermediate level indicators. Map 1 : Project areas of GEF and PROGREEN in Kazakhstan Page 13 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) B. Project Beneficiaries 21. The rural poor will be the project beneficiaries. Members of communities residing adjacent to the Aksu-Zhabagly, Karatau, and Sayram-Ugamskiy reserves and the corridors in between the protected areas in the South Kazakhstan Oblast will be provided with sustainable livelihood options such as private timber plantations which will disincentivize them to use resources from the Reserves. 22. Beneficiary Institutions: Land degradation hotspots in transboundary landscapes concentrated in southern Kazakhstan (refer to Figure 1), hence, all major natural parks in the South Kazakhstan - Aksu- Zhabagly State Nature Reserve, Karatau State Nature Reserve, and Sairam-Ugam State Natural Reserve will participate in the program. • Aksu-Zhabagly State Nature Reserve is a UNESCO Biosphere Reserve, located in the spurs of the Western Tien Shan on the northwestern tip of the Talas Alatau Mountains and on the Ugam Range, at altitudes from 1300 to 4200 meters above sea level. The reserve occupies the territories of three districts of the Turkestan region (formerly South Kazakhstan) and one district of the Zhambyl region. In the south and south-east, the reserve borders with Kyrgyzstan and Uzbekistan, along the highlands of the Talas and Ugam ranges. The area of the Aksu-Zhabaglinsky GPP is 131.9 thousand hectares. Around the reserve, a 2-3 km protective (buffer) zone with a total area of about 25.8 thousand hectares has been installed. The Aksu-Zhabagly Reserve is a specially protected natural area with the status of an environmental and scientific institution designed to preserve biological and landscape diversity, use for environmental, ecological and educational, scientific, tourist and recreational purposes unique natural complexes and objects of the state nature reserve fund that have a special ecological, scientific, historical, cultural and recreational value. • Karatau State Nature Reserve is located in the central part of the Karatau mountain range, which is a branch of the northwestern Tien Shan and occupies the low-mountain-middle mountain system of the Syrdarya Karatau ranges. The reserve is located in the Turkestan region on the territory of the city administration of Turkestan and borders with the deserts of Moiynkum, Kyzylkum, Betpak-Dala. The area of the reserve is 34.3 thousand hectares The reserve consists of 2 sites: Turkestan and Suzak. The protection (buffer) zone occupies 17.5 thousand hectares. The reserve land area is 5700 hectares. • Sayram-Ugam State National Nature Park is located in the north-eastern part of the Western Tien Shan, includes the mountain ranges of Boraldaytau, Karzhantau, Ugam and the spurs of the Talas Alatau and occupies the territory of three districts of the Turkestan region (formerly South Kazakhstan). In the south and south-east, Sayram-Ugam National Park borders with Uzbekistan, adjacent to the Ugam-Chatkal National Park of this republic. In the north-east along the border of the park is the Aksu-Zhabagly Reserve of Kazakhstan. The area of the SNNP is 149.0 thousand hectares, of which forested land is 27.5 thousand hectares or 18.5%. The protection (buffer) zone adjacent to the boundaries of the national park on the western and northwestern sides occupies 27 thousand hectares. 23. Limited Liability Partnership "Kazakh Research Institute of Forestry and Agroforestry named after A. N. Bukeikhan" is a subdivision (branch) of the Non-Profit Joint Stock Company "Kazakh Agrotechnical University named after S. Seifullin", which is part of the NJSC "National Agrarian Scientific and Educational Page 14 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) Center" of the Ministry of Agriculture of the Republic of Kazakhstan. The purpose of KazRIFA is to ensure the effective development of natural resources and the agro-industrial complex by increasing the effectiveness of scientific activities, integrating scientific and technical developments into real production. C. PDO-Level Results Indicators 24. Identification of the most effective agroforestry practices using a community-centered approach on areas adjacent to the protected natural reserves. o Indicator: Area under sustainable landscape management practices (Ha, core PROGREEN and RESILAND CA+ indicator) o Indicator: Land-users adopting new landscape management practices in targeted landscapes (number, intermediate PROGREEN indicator, gender disaggregated) 25. Capacity of forestry organizations in the protected areas in South Kazakhstan for preserving biodiversity and nature-based tourism is improved: o Indicator: Key transboundary habitats protected (number, PROGREEN indicator, RESILAND CA+ indicator) o Indicator: Visitors to key habitats in South Kazakhstan (number, intermediate) o Indicator: Pictures of animals caught by camera traps (number, intermediate) o Indicator: Roadmap for ecotourism development developed (Yes/No, intermediate) 26. PDO indicator 1: area under sustainable landscape management helps capture the adoption of agroforestry practices using a community-centered approach by measuring the extent of land area covered by sustainable landscape management practices. This is also a CORE PROGREEN indicator and aligned with the Central Asia RESILAND Resilient Landscapes Program. 27. PDO indicator 2: To capture government capacity for landscape management and restoration in protected areas, indicator accounts for number of key protected area landscapes (habitats) the project targets in South Kazakhstan, i.e. Aksu-Zhabagly State Nature Reserve, Karatau State Nature Reserve, and Sairam-Ugam State Natural Reserve. Key habitats protected is also an indicator for the PROGREEN Trust Fund. This project will strengthen capacity to prevent land degradation on the border of protected area landscapes, in this case the border of countries - Kazakhstan, Uzbekistan and Kyrgyz Republic. The transboundary scope of this indicator helps measure and link progress towards regional Central Asia RESILAND Resilient Landscape Umbrella program. D. Results Chain 28. Project activities were identified based on the analysis of barriers to conduct landscape restoration at boundaries of protected landscapes, which include illegal logging and overgrazing in protected areas. Climate change is accelerating existing patterns of degradation. These threats are acting as barriers for communities to access critical ecosystem services as well as the sustainability of their livelihoods. Increasing GHG emissions, loss of environment services (provision of fodder as example) has increased the vulnerability of poor rural communities. There is also weak institutional and technical capacity to utilize advanced technologies for implementation of sustainable landscapes practices for example to monitor overgrazing or Page 15 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) animals entering protected areas and maintain restoration in view of rapid climate change. The project will also address lack of clarity on incentives and technical knowledge available for the farmer- and community- centered landscape management models, and insufficient budgetary support to test innovative methods in sustainable landscapes management. 29. The project objective includes building government capacity for management of protected areas using an integrated landscape approach will be achieved by piloting farmer- and community centered approach, installation of observation deck for eco-tourism, promoting public awareness about environmental benefits of natural reserves and improve reserves' capacity for biodiversity preservation and monitoring. Technical capacity will be supplemented at national level by supporting a LULUCF monitoring, reporting, and verification (MRV) inventory system and dissemination workshops for technical best practices on climate resilient and carbon sink opportunities in the land use sector. Critical assumptions include the following: I) Cost, provision and access to electricity, water and provision of tourism facility is mainly covered by public-private arrangements as planned by FWC; II) FWC has resources to maintain tourism infrastructure and arboretum; III) FWC have sufficient resources to implement biodiversity and ecotourism plans; IV) FWC conducts marketing of new eco-tourism routes to boost visitors to parks; and V) Farmers are interested and commit time and resources towards trying new agroforestry practices. Figure 1 below describes the project’s Theory of Change in detail. 30. As discussed below, the project will address the key barriers of policy, knowledge, and finance. To address institutional barriers, the project will implement several activities that would raise FWC capacity to implement biodiversity plans and eco-tourism strategy. To address the knowledge barrier, the project will improve understanding of the farmer engagement model for agro-silvopastoral farms. This approach aims to achieve the overall goal of reduced land degradation in Kazakhstan and increase economic resilience and adaptation to climate change. The key degradation drivers, which will be addressed by the project, are overgrazing through agroforestry in pasturelands, migration of animals through making fodder available and climate change through afforestation and building a LULUCF MRV system, to monitor protection of natural reserves and other carbon sinks. Page 16 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) Problem: Unsustainable agricultural practices, climate change and biodiversity loss are leading to land degradation impacting community and ecosystem health at boundary of protected landscapes Activities Outputs Outcomes Level 1 Outcome Level 2 Goal Reduced Land Degradation, resilient carbon sinks and community livelihoods near Piloting community-centered Improved knowledge for at Land users adopting new practices as per community and farmer approach to agroforestry signed agreements with Individual/family level for identifying and farms with long-term forest or land use adopting effective agreements in the reserve's protected agroforestry practices zone Pilot agroforestry Restore degraded landscapes at practices using a boundary of protected areas community- Agroforestry (including apple orchards) centered restoration demonstration plots piloted at Increased area under approach the boundary of protected areas; fences, A5 sustainable landscape and around protected landscapes Develop apple orchards at Sairam- drip irrigation installed for pilots Ugam Reserve management practices adaptation of the arboretum's shrub A1 introduced, breeds replenished, new collection of climate adaptive species Increase in visitors in Preserve unique plant collection stored, new scientific routes for events reserves for nature-based and arboretum Strengthen developed, trail network and lighting A4 tourism and SLM government capacity for A3 landscape Upgrade nature -based tourism An observation deck installed, touristic Improved capacity to management and facilities routes, water well and visitor centers upgraded. monitor land degradation restoration in and preserve biodiversity in protected areas reserves Modernize equipment and Equipment installed – camera traps, technology for biodiversity drones, technology to build fodder base A2 monitoring for wildlife modernized, horse patrols Strengthened resilience of biodiversity to climate Produce strategy and plans for change impacts Roadmap for ecotourism development, biodiversity and ecotourism biodiversity preservation strategy produced Critical assumptions A1. Cost, provision, and access to electricity, water, and infrastructure for tourism are mainly covered by public-private arrangements as planned by FWC A2. FWC has resources to maintain tourism infrastructure and arboretum A3. FWC has sufficient resources to implement biodiversity and ecotourism plans A4. FWC conducts marketing of new eco-tourism routes to boost visitors to parks; and A5. Farmers commit time and resources towards trying new agroforestry practices. Page 17 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) III. PROJECT DESCRIPTION 31. The project will be financed by a US$2 million PROGREEN Trust Fund grant. It will be implemented by FWC over a 3-year period. Project activities are grouped into the following three inter- related components: boosting the capacity for biodiversity and nature-based tourism and piloting a community-centered approach to dryland agroforestry and landscape restoration These components link to PROGREEN pillar 1 on management of terrestrial ecosystems and PROGREEN pillar on management of land use changes from agriculture. 32. The project a natural follow on of ‘The Resilient Landscapes Restoration Project’, a small Recipient Executed Trust Fund project (P171577), which is a part of the joint World Bank-FAO Resilient Agroforestry and Rangeland Project financed by GEF-7 Drylands Impact Grant Program. The World Bank approved project became effective as of July 1,2022. The PROGREEN project will benefit from early learnings of GEF project whose objective is to pilot agroforestry practices, targeting highly degraded border terrestrial ecosystems. The PROGREEN project will also pilot agroforestry practices, however, focusing on the interface of protected areas and degraded rangelands used for agriculture, between Uzbekistan and Kazakhstan (Map presented in Annex 2).While the GEF project builds government capacity on policies and strategies related to landscape management and restoration, PROGREEEN will build government capacity at the border of protected area landscapes by boosting nature-based tourism and biodiversity preservation efforts. The GEF project (P171577) and PROGREEN funded project also benefit from south-south exchange and regional synergies as part of part of umbrella RESILAND initiative in Central Asia which strengthens resilient landscapes in transboundary corridors. A. Project Components Component 1: Piloting agroforestry practices for landscape restoration (US$0.942 million USD) 33. This component will be a natural follow on of the GEF-funded RESILAND Project. This component will finance grants for demonstration plots, consulting services, goods, and civil works. Additional four (4) pilot plots will be supported near natural reserves to offset the harmful impact of livestock operations. These plots will test various agro-forestry approaches, which will be evaluated independently based on cost-benefit calculations and beneficiary feedback. These pilots have a significant potential to be scaled up in through additional projects, government-subsidized programs, and farmers' self-financed investments. Combined agriculture and forestry activities are an innovative strategy with multiple benefits, including revenue diversification, yield and productivity increases, and improved plant and animal habitats. Such agglomeration reduces the period of return on investment owing to the receipt of agricultural profits in the first year of production. Thus, the duration of reaching the plantings' fruiting stage and the age of felling will be compensated by annual agricultural income. Individual/family farms with long-term forest or land use agreements in the reserve's protected zone will develop agroforestry demonstration plots. Further explanation including selection criteria and activities to be financed is given in para 44. Other activities in this component also target landscape restoration using different agroforestry practices: (a) Development of a fruit orchard at Sairam-Ugam Reserve. PROGREEN funding will also support development of 136 ha of fruit orchards, including 60 ha of drip irrigation. Fruit orchards improve, Page 18 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) enhance, and restore natural systems and provide the local population with fruit and berry products, which boosts the region's economy. The Sayram-Ugam state forest fund comprises 319 hectares of apple and pear orchards planted in 1950-60 on the Ugam Gorge foothills. Due to their aging, many gardens have perished, becoming hotbeds for pests and disease, building a strong case to restore the Sayram-Ugam SNPP's historic orchards. The Republican State Enterprise "Kazgiproleskhoz" produced a feasibility assessment for rebuilding these gardens in 2010. Since 2015, the project has been cleaning and laying 19.4 hectares of new gardens annually for 15 years. Currently, 136 hectares have been cleared of old trees; 97 hectares have new gardens, and 39 hectares are under black steam22. PROGREEN activities will turn this land into a demonstration plot for farmers. Local communities will help build, care for, protect, and harvest orchards and project will support this effort with installation of fencing and drip irrigation. Also, this will create new opportunities for people to harvest independently for a nominal fee. Farmers and/or local communities can buy national park resources at cost and turn them into juices, compotes, marmalade, jelly, etc. (b) Restoration and preservation of the unique plant collection and arboretum at Kazakh Scientific Research Institute of Forestry. The Committee of Forestry and Wildlife of the Ministry of Ecology and Natural Resources (MENR) of the Republic of Kazakhstan, and the Kazakh Research Institute of Forestry and Agroforestry, are tasked with restoring and preserving the arboretum's unique collection of vegetation. The purpose is to apply scientifically based wood and shrub introducers to improve pasture lands in agroforestry, private forestry, horticulture, and landscaping. The arboretum's collections will be used to gather seeds and planting material. PROGREEN funds will finance scientific work on the adaptation of the arboretum's introducers, replenishment, and expansion of the existing range of breeds, and creation of a new collection; reconstruction of low- value plantations (elm, maple) growing in the arboretum; development and arrangement of new arboretum routes for scientific and educational events e.g., excursions, installation of a trail network and lighting etc. Component 2: Boosting capacity for biodiversity and nature-based tourism (US$0.958 million) 34. In line with the PROGREEN objectives, this component aims to support protected areas in South Kazakhstan to boost capacity for nature-based tourism and biodiversity preservation efforts. This component will finance goods and civil works, consulting services, trainings, and workshops. The component will help upgrade infrastructure for nature-based tourism, promote public awareness on environmental benefits of natural reserves, and improve reserves' capacity for biodiversity preservation and monitoring. The component will also restore the unique plant collection and revive the arboretum at the Kazakh Scientific Research Institute of Forestry. This work will complement the GEF-funded RESILAND Project's (P171577) Gene Bank in the same institute. This component will consist of the following activities: (a) Upgrade facilities for nature-based tourism in Aksu Zhabagly and Karatau State Natural Reserves, amongst the oldest reserves in Central Asia. In addition to providing additional funds for local government budgets, nature-based tourism is a powerful way to increase public awareness of the importance of environmental protection and conservation. These reserves, 22 Soils affected by human-induced salinity Page 19 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) some of the oldest in Central Asia, attract foreign and domestic tourists owing to their reputation for natural beauty, sightseeing spots for scenic landscapes, and rare species of flora and fauna. However, lack of a holistic approach to tourism development and poor infrastructure limits its potential. PROGREEN funds will support technical assistance and investment to upgrade small infrastructure to improve ecotourism potential of the reserves and efficiently preserve their ecological systems. This component will finance (i) the development of a roadmap for ecotourism development in reserves, (ii) the installation of an observation deck and a tourist trail along the excursion route in canyons, and (iii) supplementing construction of a stained-glass modular Visitor Center along the tourist route in canyons, including services for the development of design, cost estimate, documentation required for the development of additional touristic routes and facilities like water wells for drinking water. This will boost the safety, information, and attractiveness of Reserves’ excursions, with the potential to triple the number of visitors (nationals and foreigners). (b) Capacity building for biodiversity preservation. One of the reserves' key duties is conserving wild animals by protecting them from poaching and using biotechnical techniques to improve the food base in their native environment to boost population and prevent migration. This component will finance capacity building for biodiversity preservation by developing a medium-term biodiversity preservation strategy and modernization of wild animal protection equipment (including horse patrols) and biotechnical methods to build a fodder base for wild animals and state inspectors' horses (harvesting hay, sowing, and harvesting of grain crops - fodder). Equipment will also be utilized to track and count wild animals and improve research related to wildlife monitoring and nature preservation. Upon completion of activities, the potential of reserves to conserve and promote biodiversity will be strengthened, and the number of wild animals is expected to increase. Modern technology will be purchased to enable state inspectors to monitor wildlife, including optical tools, camera traps, monitoring drones, thermal imaging binoculars, and machinery to secure fodder for wild animals and horses of state inspectors. Component 3 Project management and monitoring (USD$0.10 million) 35. Additional activities follow the same implementation plan as the GEF RESILAND project. This component will finance consulting services and operating costs The Project Implementation Unit (PIU) of the GEF RESILAND project will manage, monitor, and evaluate PROGREEN activities. Additional funds will be granted to assist PIU's additional operational needs, increasing project coordination and monitoring costs. Additional procurement officer and technical specialist will be hired to avoid staff overburden. Office supplies, equipment, and furnishings will be covered. The PIU will provide communication materials for program-level meetings and knowledge exchange visits and mobilize Kazakhstan delegates to participate. The PIU will also be responsible for Citizen Engagement, ensuring project compliance with and monitoring implementation of Environmental and Social Framework-related issues, and that due attention is given to gender aspects as per Project design. B. Project Cost and Financing Page 20 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) Project Components Project cost Trust Funds Counterpart Funding Piloting agroforestry practices for 0.94 landscape restoration Boosting capacity for biodiversity and 0.96 nature-based tourism Project management and monitoring 0.10 Total Costs Total Project Costs 2.00 Total Financing Required 2.00 E. Rationale for Bank Involvement and Role of Partners 36. The World Bank has a long history of collaboration with the Kazakh forestry sector starting with several analytical studies in the early 2000s and continuing with the preparation and implementation of the Forest Protection and Rehabilitation Project (FPRP) in 2005-2014 and through the Central Asia Transboundary Biodiversity Project (P042573) in 2007 which supported the first visitor center in the oldest reserve in Central Asia, based in Kazakhstan. The World Bank is currently implementing a GEF project (P171577), of which this project is a natural follow on and part of regional umbrella of resilient landscape restoration projects (RESILAND program). 37. Role of Partners. The world bank has been working closely with partners and will engage UNDP (including through FOLUR), FAO and relevant agencies who are working on eco-tourism related projects. Parallel to the project, the United Nations Food and Agriculture Organization (FAO) is implementing a US$1.94 million complementary project in Kazakhstan under the GEF-7 Sustainable Forest Management Impact Program. This Project will ensure collaboration and cross-learning between the two projects, through a joint Advisory Committee which was established with representatives from MENR and MOA and local representatives of Akimats from Kyzylorda and Zhambyl, Aktobe and Pavlodar with the World Bank and FAO sitting as observers. This is also a step forward in implementing and operationalizing the Kazakhstan Country Climate and Development Report (2022) as described in para 17 38. Other successful forest landscapes projects delivered in the region are (most of which are GEF/IBRD blended projects) the Kyrgyz Integrated Forest Ecosystem Management Project (P151102) IFEMP), the Belarus Forestry Development Project (P152636), the Environmental Services Project in Albania (P172543) and the Sustainable Forest and Landscape Management Project (P129961) in Bosnia. The World Bank, therefore, brings a unique mix of experience and international best practice in the preparation of this project. Implementation of the proposed project alongside the North Aral Sea Development and Revitalization Project (P170187) provides a unique opportunity to add grant-financed global environmental dimensions (such as reduced land degradation and reduction of GHG emissions) to a substantial development portfolio in Kazakhstan, which will in turn provide considerable parallel co- financing resources and scale up the impact of the smaller PROGREEN project. Page 21 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) F. Lessons Learned and Reflected in the Project Design 39. The proposed project will draw lessons from the World Bank sustainable landscapes and forestry projects – GEF, RESILAND initiative across Central Asia and projects implemented by other development partners and international organizations (GIZ, UNDP) in Kazakhstan and other Central Asia countries. The Forest Protection and Rehabilitation Project (FPRP, P078301/P087485) generated several valuable lessons23, like piloting an innovative bottom-up approach of working with local communities and farmers to restore degraded lands; and using a grant program for innovative environmental activities. The Central Asia Transboundary Biodiversity Project (P042573) in 2007 helped demonstrate the importance of establishing regional coordination and cooperation for biodiversity conservation and investing in eco- tourism that boosts incomes, increases awareness of biodiversity issues, and helps protect ecosystems and natural habitats. The project will also draw on experience and findings of GIZ-financed support for private afforestation in Kazakhstan prepared by UNIQUE Forestry and Land Use GmBH24 and on the recommendations of the recent World Bank report on community-private plantations (CPP) in Kazakhstan funded by PROFOR25, which identified important constraints to development of CPP, such as lack of consensus among key stakeholders on a vision for the development of private plantations, lack of technical knowledge on sustainable agroforestry practices and landscape restoration, and lack of incentives for farmers to practice sustainable land management. It will also pilot the climate resilience tool developed by PROGREEN, under the Global Environment and Natural Resources Global Practice Unit to take climate change related hazards and risks for selected sites. 40. The project considers international experience from similar activities. Building and maintaining good relationships with local communities by supporting awareness initiatives and capitalizing on local values was a key success factor in many projects including Tunisia-Oases Ecosystems and Livelihoods Project (P132157), Burundi Sustainable Coffee Landscape Project (P127258), Tajikistan ENVIRONMENTAL LAND MANAGEMENT AND RURAL LIVELIHOODS PROJECT ( P122694 ), and two Loess Plateau Watershed Rehabilitation Projects (P003540 and P103573 ). 41. Key lessons include: • Community engagement: i) direct investment support to farmers is effective but requires considerable capacity and allocation of sufficient time and resources; ii) the Rayon (District) Review Committees could be instrumental to reinforce relationships between communities and local authorities, as well as to build ownership at the district level; iii) local technical consultants served as interlocutors for maintaining dialogue among the project beneficiaries and building ownership at the local level. The proposed project will draw upon these lessons for Component 1 activities involving communities, farmers, and local authorities. 23 For example, establishment of selected seed orchards, enrichment planting with transplanted wildlings and semi-mature trees, and direct seeding. 24 For more information, see the report “Support of the development of State subsidies for private afforestatio n in Kazakhstan - Extended work bench and technical advice in the frame of the Regional Programme on Sustainable and Climate Sensitive Land Use for Economic Development in Central Asia�, prepared for GIZ by UNIQUE Forestry and Land Use, dated December 2018. 25 World Bank (2018). Kazakhstan Community-Private Plantations: Analysis to better understand the potential for developing forest plantations. Washington DC: Program on Forests (PROFOR). Page 22 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) • Farmers engagement for agroforestry activities: when farmers provided labor, the China Loess Plateau projects provided free trees and shrubs, but farmers signed the “Use and Management“ contracts. It is important to experiment with contract terms, tree varieties and planting techniques to optimize the survival rate and profitability in the long-term. The proposed project could build upon this experience from China and envisage that foresters in Zhambyl and Kyzylorda region will provide technical advice to local farmers, and that farmers can be trained in nursery and planting techniques. The proposed project in Kazakhstan could envisage development of a manual on agroforestry for local farmers and disseminate it widely in the country. • A combination of soft and hard investments helps to boost incomes of communities, increase awareness about protection of biodiversity and helps promote ecosystem health and landscape restoration. Demonstration investments in visitor centers, vehicles, equipment, as well as training and capacity building reflected in increase in protected areas coverage (from 125% in number and 184% in area), increasing coverage of vulnerable flora and fauna in Western Tien Shan by 55% and financing for protected area management had increased for Kazakhstan, As these changes go against the mainstream of deeply rooted views and practices, they will require sustained promotion efforts at the national scale. IV. IMPLEMENTATION ARRANGEMENTS A. Institutional and Implementation Arrangements 42. The project will rely on existing institutional framework setup by the GEF RESILAND Kazakhstan Landscapes Restoration (P171577) project. This includes the FWC under the MENR, which will be the project Implementing Agency and hosts a fully staffed and operational Project Implementation Unit (PIU). The PIU is in Astana and handles most administrative duties, including procurement and financial operations. The PIU is fully staffed and operational and includes a director, a technical specialist, a procurement and finance professional, and an environment and social protection specialist. Additional procurement officer and technical specialist will be hired to avoid staff overburden. The Ministry of Agriculture and regional offices are the key national stakeholders. The project will also work with national scientific institutes to boost its creative components, including the Kazakh Scientific Research Forestry Institute and the Kazakh Scientific Research Institute of Animal Husbandry and Forage Production. The project also benefits from the project advisory committee setup by the GEF RESILAND project. This committee is chaired by the Vice-Minister of MENR and includes representatives from FWC, MOA, and akimats from Kyzylorda, Zhambyl, Aktobe, and Pavlodar. The committee will oversee project activities and ensure inter-institutional coordination with other WB programs and international development partners, such as GEF, FAO SLDP, NAS, GIZ, and UNDP. The PIU will be responsible for the project M&E. 43. FWC, a government agency, is responsible for implementation of forestry policies and controls wildlife use and reproduction. The central body consists of 30 personnel, however, FWC has territorial bodies in all regions of Kazakhstan and field offices, including in forest reserves, national parks, and protected territories. Regional and field office personnel total 2,000. FWC is financed from the national budget and has adequate capacity to implement activities for which it is responsible, however, has just started to gain capacity and experience in implementing innovative activities like farmer-centered Page 23 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) landscape restoration. This project will lean on guidance coming from the technical solutions of the GEF RESILAND project POM. Capacity on fiduciary and safeguards compliance is covered in other sections. Hence, technical assistance and demonstration of international best practice would be transformational towards implementation of landscape restoration. 44. Project activities related to agroforestry plots will be implemented on the forest fund lands open to be leased by private agricultural producers. Grants will be used to implement activities on demonstration plots near protected areas. Due to the modest number of planned beneficiaries for demonstration plots, they will be selected case by case in conjunction with local authorities based on land tenure rights and willingness to contribute in-kind labor and/or financial resources towards project operations. A technical specialist will work with local authorities to mobilize the community for plan- related activities. Grants’ disbursement will be controlled by PIU. The Project Operations Manual (POM), developed for the GEF RESILAND project includes a concise grant operation manual, which could be mirrored for this project and can be used as the basis to sign the grant agreement. The POM will guide technical solutions on the demonstration plots and disbursement procedures to both beneficiaries and workers. Eligible activities will include contractual services for civil works and consultancy as well as various equipment and material. POM may be updated as needed to incorporate incoming results of previous grants including possible additional benefits to communities from agro-forestry grants, details about labor and maintenance costs of facilities, or revisions related to the land use agreements. 45. The project will engage with the broader PROGREEN and RESILAND Central Asia Program through its support for the Central Asia Landscape Restoration Platform under the Central Asia Climate Information Platform (CACIP), involving regional stakeholders, development partners, private sector for south- south cooperation opportunities, trainings, workshops, knowledge management, communication programs, analytics, and knowledge products. These efforts will enhance regional cooperation and implementation of green growth agenda in Central Asia. This project will also contribute with progress on its indicators to the broader PROGREEN program M&E. B. Corporate Commitments 46. Climate Change. Climate change is compounding land degradation patterns in Kazakhstan as highlighted in sector context section. This project will yield both climate change adaptation and GHG emission mitigation benefits. Specifically, mitigation co-benefits are derived from improved management of forests, grasslands, and pasture under the agroforestry plots in Component 1 as well as biodiversity preservation in Component 2. Benefits from carbon sequestration assessed using the EX-ACT carbon balance tool developed by World Bank and FAO were estimated at annual net GHG emissions of just over - 4 000 tCO2 eq per year. Maintaining and creating a seed bank for the arboretum and dendrological park will boost availability of climate resilient gene bank of species, at the same time fast-growing fruit and fodder trees plantations in demonstration plots will improve soil productivity while providing shade and forage to livestock, adding to the climate adaptation co benefits of the project. 47. Gender. The laws, institutions and processes in Kazakhstan make provisions for gender equality, however, gender gaps persist. While significant progress has been made in education and health, unequal political representation and labor force participation still detract from national development Page 24 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) achievements.26 Gender gaps in employment persists with 77.1 percent of males participating in the labor market compared to 65.2 percent of women.27 Gender wage gap is also prevalent, as employed men earned 27-31 percent more than women between 2011 and 2013 regardless of skills and location.28 Recent trends reveal that the gender gap in Kazakhstan has been steadily increasing in the past decade. Kazakhstan is currently ranked 72nd (out of 153 countries) in the 2020 Global Gender Gap Report, reflecting a 12-rank drop from 201829 and a 40-rank drop from 2013.30 The gender wage gap is most prominent in the agricultural sector where men earn 112 percent more than women, although men (18.9 percent) and women (17.1 percent) are almost equally represented in Agriculture, Forestry and Fisheries.31 About half of all self-employed women work in the agriculture sector therefore women are more likely to be vulnerable to production and income losses from natural resource degradation and climate change.32 Women contribute significantly to the forestry sector particularly serving as a major source of labor for creating nurseries and planting forest crops.33 However, the amount of employment opportunities available for women in the forestry sector is declining. Women in Kazakhstan are also underrepresented in agriculture cooperatives, user-groups, and committees due to lesser land ownership and high demands on their time. Therefore, women often lack access to information about agricultural policies and development initiatives, which often fail to address their needs.34 48. Women will be hired to maintain the arboretum and ecotourism facilities including visitor centers, which will ensure that local women have sustainable jobs and income beyond the project period. Women will receive equal compensation (as men) for engaging in the project activities. In addition, the project will facilitate women’s participation in trainings on innovative agroforestry techniques through targeted messages, scheduling training during family-friendly hours, and providing adequate transportation to the demonstration plots. The project team will monitor the number of female land users adopting sustainable landscape management practices (as indicated with gender disaggregated indicator in results framework) as well as the number of female participants in trainings and natural resources management groups and the number of women employed for tourism as part of the overall jobs monitoring effort. Currently no gender gap analysis exists, and this project will lean on analysis led by GEF RESILAND project. 49. Citizen engagement: The Stakeholder Engagement Plan details the mechanism to enhance the dialogue between diverse stakeholders of the forestry sector and monitor the level of satisfaction with the project activities among the stakeholders over time and lean on existing stakeholder engagement plan under the GEF project. The project seeks to ensure effective and equitable stakeholder participation, tailored to the sociocultural conditions, and needs of the beneficiary communities including youth. The project will create a feedback mechanism for citizens, especially the marginalized and vulnerable, to voice their opinions and suggestions regarding project activities at various stages of the project cycle. An 26 Asian Development Bank. (2018). Kazakhstan Country Gender Assessment. 27United Nations Development Programme. (2019). Kazakhstan: Human Development Indicators 28 World Bank Group. (2019). Country Partnership Framework for the Republic of Kazakhstan. 29 World Economic Forum. (2020). Global Gender Gap Report 2020. 30 World Economic Forum. (2013). Global Gender Gap Report 2013 31 World Bank Group. (2015). Kazakhstan – Gender at a glance 32 Asian Development Bank. (2018). Kazakhstan Country Gender Assessment . 33 World Bank. 2018. Kazakhstan Community-Private Plantations: Analysis to better understand the potential for developing forest plantations. Washington DC: Program on Forests (PROFOR). 34 Asian Development Bank. (2018). Kazakhstan Country Gender Assessment. Page 25 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) example of this activity is: Karatau reserve intends to conduct a survey of citizens to understand their needs, assess demand for ecotourism to national parks and expectations from visitor centers and access to protected landscapes. C. Results Monitoring and Evaluation 50. PIU will be responsible for project monitoring and evaluation (M&E). M&E will be done in accordance with the Results Framework presented below and make use of the existing data sources, supplemented by data collection within the project and special surveys and assessment updates undertaken by contracted specialists as needed. The Project implementing agency will have the overall responsibility for the project monitoring and for collecting the appropriate data and reporting on the project progress with periodicity as agreed by the Bank. 51. The M&E system will facilitate achievement of several key objectives: 1) accountability toward achievement of the PDO and the PROGREEN project objective, 2) transparency of activities and outputs, and 3) lessons learned to be used in future projects. The M&E system will also play a crucial role for evaluations at the mid-term review and at completion. In addition, the midterm review will provide an opportunity for the Bank and counterpart teams to closely review implementation progress, as well as to determine if any modifications to indicators and/or target values are required. During implementation and routine assessment of progress, the M&E system will help to assess whether the PDO and the PROGREEN objectives are on track to be achieved, identify gaps, and provide evidence to the project management for taking remedial actions. Methodologically it will include the application of the EX-ACT tool to measure GHG emission levels at mid-term and completion. 52. Monitoring Arrangements: The M&E Plan will be prepared and implemented by PIU. The PIU Director will have overall responsibility for data collection, collating, analysis, and reporting as part of the semi-annual and annual reporting to the World Bank, PROGREEN and other relevant stakeholders. He/she will ensure consistent organization and timely submission of M&E reports and related contributions (e.g., success stories); maintain and update the Results Framework and a data system that links and compiles semi-annual progress results reports; and the mid- and end-term reports. To accomplish these tasks effectively and in a timely manner, PIU may draw on other World Bank staff and consultants from time to time during project implementation based on the team’s assessment of M&E capacity strengthening required and type of results to monitor. 53. Reporting: The semi-annual progress report will include the updated Results Framework. On the annual basis these reports will be streamlined with the World Bank’s routine reporting requirements, i.e. annual progress reports for BETFs, the obligations for PROGREEN in reporting requirements for the mid- term review (MTR) of the project and the final project completion report. 54. Budget Planning: The M&E Services are budgeted under Component 3: on Monitoring, Evaluation and Reporting. This budget covers the activities described in this section, including focus on updating the PROGREEN Core Indicators, monitoring and reporting on the Results Framework, and managing the work planning tool. The budget expenditure for M&E is expected to be higher in the first and last years, in line with expectations of respective workloads at the start and end of the project. Page 26 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) D. Sustainability 55. Experience from the earlier Bank involvement in forestry in the Europe and Central Asia (ECA) region in general and in Kazakhstan particularly through implemented earlier FPRP strongly supports the expectation of sustainable impact. Institutional sustainability will be addressed by training and increased hands-on experience to develop long-term management skills in project management, communication, policy analysis, as well as better technical equipage of the key implementing agencies. The Project is relying on existing administrative and organizational structures especially at the local levels to implement activities. The intention of continued expansion of the government investment program (possibly with donor support) will enable the continuation of the incremental field activities beyond the life of the project. Staff and routine operating expenses are and will continue to be provided by the Government and beneficiary organizations operational budget. Environmental sustainability will be addressed through the introduction of environmentally sound forest management plans and detailed environmental protection and monitoring guidelines for the forest plantation and management activities. Social and cultural sustainability at the village level will be addressed by ensuring representation of key groups in developing the participatory natural resource management plans. Financial sustainability will be partially addressed through the overall fiscal incentive structure including established contractual payments, and in some cases through returns to local communities arising from participatory natural resource management activities. Improved tourism infrastructure in the protected areas is expected to increase number of visitors and help support financial self-sufficiency of beneficiary organizations. V. KEY RISKS A. Overall Risk Rating and Explanation of Key Risks 56. Project overall risk rating is assessed as moderate and is in line with risk rating of GEF Resilient Landscapes Restoration Project (P171577). This covers moderate risk level in different SORT risk categories including political, macroeconomic, sector strategies and polices, technical design, fiduciary, and stakeholders. Institutional capacity risk is currently rated as High in view of the FWC limited experience in implementing agroforestry practices but is expected to moderate as the project progresses and early results from the GEF project can inform the PROGREEN project. 57. The COVID-19 pandemic related risks have been moderate in Kazakhstan. However, the project will keep abreast with and follow current World Bank and World Health Organization COVID-19 Guidelines. The project will take precautionary measures to reduce further the risk of COVID-19 spread. Project activities will follow the requirements of the WB COVID-19 Guidance document and will be mindful of the non-digitalized delivery of cash/in-kind benefits and try to avoid mass gatherings in accordance with the government-provided, WHO and other UN agencies guidance. Contractors will be asked to adjust the work requirement for cash-for-work to focus on usage of protective equipment. The project will monitor food availability and accessibility situation in the project areas to ensure affordable food provision for workers, contractors, and project staff. Page 27 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) VI. APPRAISAL SUMMARY 58. Almost all project activities (except for restoration and preservation of the unique plant collection and arboretum and some technical assistance) will be conducted on the territory of protected areas situated in southern part of Kazakhstan. The project is expected to significantly boost the institutional capacity of the protected areas and improve environmental conditions in adjacent territories. The project has significant livelihood benefits for local communities. The establishment and management of four agroforestry plots in Aksu-Zhabgly and Karatau State Nature Reserves will involve local people. The protection of the apple orchard in the Sayram-Ugam State National Nature Park and its operation will open new agro-forestry perspectives in the region. Together these activities will create 30 permanent jobs, and 90 seasonal jobs every year (Table 7, Annex 1). The seasonal jobs will involve the harvesting of apples from the orchard and produces from the agroforestry plots, and the manufacturing of apple products. Moreover, by improving the technical capacities and services, the project will help increase revenues and secure a financial budget on a continuous basis from the Kazakhstan Government for the Aksu-Zhabgly and Karatau State Nature Reserves and the KazRIFA. (a) Economic Cost – Benefit Analysis 59. Economic analysis35 – conducted by using the cost-benefit analysis (CBA) method – suggests that the project is economically viable with an economic internal rate of return (EIRR) of 21.76% and 27.88% at low and high shadow prices of carbon, respectively.36 At the low shadow price of carbon, the economic benefit-cost ratio (EBCR) is 2.77. At this price, the economic net present value (ENPV) with a 6% discount rate totals nearly US$ 4.35 million and the discounted sum of all benefit flows is US$ 6.81 million for the entire analysis period of 25 years. At the high shadow price of carbon, the EBCR is 3.77, while the ENPV amounts to US$ 6.82 million, the discounted sum of all benefits to US$ 9.28 million. The project’s average annual investment is US$ 0.47 million during the implementation period of 4 years. The discounted sum of all costs is US$ 2.46 million over the entire analysis period. 60. The project is expected to generate a wide range of benefits in terms of ecosystem services, climate change mitigation, income and livelihood, human capital development, employment, and green growth. Only a handful of these benefits - due to a lack of necessary socio-economic and biophysical data at the time of conducting this economic analysis – could be monetarily valued. These include: (i) net negative GHG emissions from improved protection or management practices of forests, pasture, grassland, agroforestry, orchard, and arboretum, (ii) tourism revenue from visitors in Aksu-Zhabgly and Karatau State Nature Reserves, (iii) ecosystem services (habitat/species protection, watershed conservation, soil erosion control and other non-wood forest products (NWFPs)) by forests and water services by the glaciers in these two reserves, (iv) provisioning services by an orchard in the Sayram-Ugam 35 The total length of the analysis period is 25 years including 4 years for project implementation and 21 years for capitalization. A discount rate of 6% is used, which is determined by following the guidance given by World Bank. 2016. Discounting Costs and Benefits in Economic Analysis of World Bank Projects. Washington D.C. 36For deriving the economic value of the net greenhouse gas (GHG) emissions, a low shadow price of US$ 42/tCO2eq and a high price of US$ 84/tCO2eq (see the Sensitivity Analysis on carbon price and other factors in Annex 1) – as per the guidance given by the High-Level Commission on Carbon Prices (HLCCP) in the World Bank (2017). Guidelines for the social price of carbon. Washington D.C. A sensitivity analysis is conducted with higher carbon prices. See Sensitivity Analysis section below. Page 28 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) State Endowment National Nature Park (i.e. apples produced from the apple orchard and apple products), (v) community benefits from agroforestry produces in Aksu-Zhabgly and Karatau State Nature Reserves, and (vi) revenue of KazNILHA from its services improved by project interventions. The benefits are the ‘incremental impacts’ of the project as they are quantified by comparing the ‘with project’ scenario with a ‘no-project’ one. Further details presented in Annex. 61. The project is expected to generate a total net GHG of -0.1 million metric tons (t) of carbon dioxide (CO2) equivalent (eq) over the 25-year analysis period. This corresponds to an average annual net GHG emissions of just over - 4 000 tCO2 eq per year37 (see, the majority of the net negative emissions (i.e. ~>50% removal) come from the improved protection of forests, grassland, and pasture in Aksu-Zhabagly and Karatau State Nature Reserves and the enhancement and improved management of dendrological park and arboretum in KazRIFA (). The protection of the apple orchard in the Sayram-Ugam State Endowment National Nature Park and agroforestry38 in the two nature reserves mentioned above also remove a significant volume of GHG from the atmosphere (see Annex 1 for the details). (b) Procurement 62. Procurement under the proposed project will be governed by the World Bank’s Procurement Regulations for IPF Borrowers of November 2020 or any updated version (Procurement Regulations) and will also be subject to the World Bank’s Anti-Corruption Guidelines (dated July 2016). The procurement approach, procurement risks, arrangements and procurement plan for the project duration recommended by the Borrower will be presented in the Project Procurement Strategy for Development (PPSD). Simplified PPSD will be prepared by the Borrower with the support of the Bank’s team and will be finalized before or by negotiations. The PPSD and the Procurement Plan will be updated during the project implementation to reflect any substantial changes in procurement approaches and methods to meet the actual project needs. Considering the total cost of the project, US$2 million, the overall procurement risk under the project is assessed as moderate. No high value or complex contract is foreseen. (c) Financial Management 63. The overall responsibility for financial management will be with the existing PIU under FWC. The most recent FM Implementation Support and Supervision Mission (FMISSM) for the Kazakhstan Resilient Landscapes Reforestation Project (P171577) implemented by the PIU, was conducted in June 2022, and found the FM arrangements to be adequate and acceptable to the Bank. In addition, the Interim Unaudited Financial Reports (IFRs) under the current Project were in general submitted on time and found to be acceptable to the Bank. The assessment of the FM arrangements for the proposed Project, based on the above FMISSM concluded that the FM risk is moderate with no recommended additional mitigation measures. For capacity building purposes, the PIU will update their POM to include the proposed project as well as the accounting system at the beginning of implementation. 64. The project will use traditional disbursements method, which is the Statement of Expenditures (SOE) based. The project’s Designated Account (DA), in US dollars, will be opened in a financial institution 37 Since all project activities will be completed only at the end of 4 years, it is realistic to assume that the climate change mitigation benefits will be realized from year 5. Therefore, the annual average net GHG emission is calculated for the 21 years. 38 FAO EX-ACT is used for estimating net GHG emissions. Page 29 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) acceptable to the Bank. Other methods of disbursement the project could include direct payments and special commitments. Further details of the disbursement arrangements, including the DA authorized allocation, will be specified in the Disbursement and Financial Information Letter (DFIL). Semi-annual Interim Unaudited Financial Reports (IFRs) will be used for the Project monitoring and supervision. These reports will be prepared by the PIU and submitted to the Bank within 45 days of the end of each calendar semester. Audit of the project financial statements will be conducted by (i) independent private auditors acceptable to the Bank, on Terms of Reference acceptable to the Bank, and (ii) according to the International Standards on Auditing issued by the International Auditing and Assurance Standards Board of the International Federation of Accountants. Annual audited project financial statements will be submitted to the Bank within six months after the end of each fiscal year, also at the project closing. The Recipient will disclose the audit reports for the project, within one month of their receipt from the auditors, by posting the reports on the website of the MENR or any other website agreed with the Bank. Following the Bank's formal receipt of these reports from the Recipient, the Bank will make them publicly available according to the World Bank Policy on Access to Information. A.. Legal Operational Policies . Triggered? Projects on International Waterways OP 7.50 No Projects in Disputed Areas OP 7.60 No . B. Environmental and Social 65. The overall ESF risk level is moderate as the environment and social risks are both rated moderate. No large, significant, or irreversible adverse environmental impacts are foreseen, in fact, positive environmental benefits are fundamental to the project development objective and outcomes. These include reduced desertification, salt and dust control, reforestation of degraded lands, improved conservation, and sustainable use of biodiversity in selected ecosystems, and reduced use of potentially harmful pesticides. The risk of Sexual Exploitation and Abuse/Sexual Harassment (SEA/SH) is moderate to low. There are no anticipated negative long-term environmental or social effects. The following World Bank’s Environment and Social Standards (ESSs) are relevant: 1, 2, 3, 4, 6, 8, and 10. VII. World Bank Grievance Redress 66. Grievance Redress. Communities and individuals who believe that they are adversely affected by a project supported by the World Bank may submit complaints to existing project-level grievance mechanisms or the Bank’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project affected communities and individuals may submit their complaint to the Bank’s independent Accountability Mechanism (AM). The AM houses the Inspection Panel, which determines whether harm occurred, or could occur, as a result of Bank non-compliance with its policies and procedures, and the Dispute Resolution Service, which provides communities and borrowers with Page 30 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) the opportunity to address complaints through dispute resolution. Complaints may be submitted to the AM at any time after concerns have been brought directly to the attention of Bank Management and after Management has been given an opportunity to respond. For information on how to submit complaints to the Bank’s Grievance Redress Service (GRS), please visit http://www.worldbank.org/GRS. For information on how to submit complaints to the Bank’s Accountability Mechanism, please visit https://accountability.worldbank.org. . Page 31 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) VII. RESULTS FRAMEWORK AND MONITORING Results Framework COUNTRY : Kazakhstan PROGREEN Kazakhstan Resilient Landscapes Restoration Project Project Development Objectives To pilot agroforestry practices using a community-centered approach and to strengthen government capacity for landscape management and restoration in protected areas. Project Development Objective Indicators Unit of Data Source / Responsibility for Indicator Name Corporate Baseline End Target Frequency Measure Methodology Data Collection Name: Land area under ✔ Hectare(H 0.00 245.00 Twice a year. PIU progress reports. PDO The PIU and the sustainable landscape a) indicator 1 area under Forestry and management practices sustainable landscape Wildlife Committee management helps will be responsible capture the adoption for data collection of agroforestry practices and reporting. using a community- centered approach by measuring the extent of land area covered by new practices. This is also a CORE PROGREEN indicator and aligned with the Page 32 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) Unit of Data Source / Responsibility for Indicator Name Corporate Baseline End Target Frequency Measure Methodology Data Collection Central Asia RESILAND resilient landscapes initiative. Description: The indicator measures, in hectares, the land area for which new and/or improved sustainable landscape management practices have been introduced. Land is the terrestrial biologically productive system comprising soil, vegetation, and the associated ecological and hydrological processes; Adoption refers to change of practice or change in the use of a technology promoted or introduced by the project; Sustainable landscape management (SLM) practices refers to a combination of at least two technologies and approaches to increase land quality and restore degraded lands for example, agronomic, vegetative, structural, and management measures that, applied as a combination, increase the connectivity between protected areas, forest land, rangeland, and agriculture land. Name: Key Number 0.00 3.00 Annually PIU progress reports The PIU and the Transboundary Habitats Forestry and Protected Wildlife Committee will be responsible for data collection and reporting. Description: This indicator helps capture the three different types of protected area landscapes (habitats) that is all major natural parks in the South Kazakhstan - Aksu- Zhabagly State Nature Reserve, Karatau State Nature Reserve, and Sairam-Ugam State Natural Reserve. Key habitats protected is an indicator for the PROGREEN Trust Fund. This project will strengthen capacity to prevent land degradation on the border of protected area landscapes, in this case the border of countries - Kazakhstan, Uzbekistan and Kyrgyz Republic. The transboundary scope of this indicator helps measure and link progress towards regional Central Asia RESILAND Resilient Landscape Umbrella program. Page 33 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) Intermediate Results Indicators Unit of Data Source / Responsibility for Indicator Name Corporate Measur Baseline End Target Frequency Methodology Data Collection e Name: Visitors to key Number 2,000.00 4,000.00 Twice a year. PIU progress reports. The The PIU and the habitats in South state reserves and national Forestry and Kazakhstan park offices monitor total Wildlife Committee number of visitors on a will be responsible regular basis. The baseline for data collection is based on existing data and reporting. from the Forestry and Wildlife Committee. Description: Key Habitats are defined as : All major natural parks in the South Kazakhstan - Aksu-Zhabagly State Nature Reserve, Karatau State Nature Reserve, and Sairam-Ugam State Natural Reserve that are included as project's beneficiary institutions. This project will upgrade facilities in protected areas- such as install observation decks, design touristic routes, construct water well and visitor centers. These upgrades will help boost visitor capacity, which will be captured by this indicator. Name: Pictures of Number 500.00 1,000.00 Twice a year. PIU progress reports. The PIU and the animals caught by Forestry and camera traps Wildlife Committee will be responsible for data collection and reporting. Description: This project will finance equipment installation such as camera traps, drones and technology. It will also help build fodder base for wildlife and include horse patrols. These activities are expected to lead to increase in sighting and instances of wildlife and animals by camera traps. If more animals are being sighted within protected landscapes, animals would not need to stray and overgraze outside protected landscapes, preventing land degradation. Page 34 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) Unit of Data Source / Responsibility for Indicator Name Corporate Measur Baseline End Target Frequency Methodology Data Collection e Name: Land-users Number 0.00 100.00 Twice a year PIU progress reports. The PIU and the adopting new practices in Forestry and targeted landscapes Wildlife Committee will be responsible for data collection and reporting. Of which female Number 0.00 30.00 Description: Farming community adopting new agroforestry or sustainable landscape management practices. This will be used to calculate an estimate for the PROGREEEN indicator - 'share of land-users adopting new practices in targeted landscapes'. Name: Roadmap for Yes/No N Y Twice a year. PIU progress reports The PIU and the ecotourism development Forestry and developed Wildlife Committee will be responsible for data collection and reporting. Description: Roadmap for ecotourism development produced to include biodiversity and climate change implications in strategy and roadmap. This will help strengthen resilience of biodiversity to climate change impacts. This indicator also contributes to the PROGREEN indicator “Countries wi th policy and institutional framework improved". Page 35 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) Target Values Project Development Objective Indicators FY RESULT_FRAME_TBL_ PD O Indicator Name End Target Land area under sustainable landscape management practices 245.00 Key Transboundary Habitats Protected 3.00 Intermediate Results Indicators FY RESULT_FRAME_TBL_ IO Indicator Name Baseline End Target Visitors to key habitats in South Kazakhstan 2000.00 4,000.00 Pictures of animals caught by camera traps 500.00 1,000.00 Land-users adopting new practices in targeted landscapes 0.00 100.00 Of which female 0.00 30.00 Roadmap for ecotourism development developed N Yes Page 36 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) ANNEX 1 Project Economic Analysis Kazakhstan Resilient Landscape Restoration (RESILAND) Project 67. The economic analysis is done based on a sub-set of expected benefits of the project that could be valued monetarily. The benefits are quantified by comparing the development impacts expected to be generated ‘with the project’ with the ‘without the project’ scenarios. This ensures that the benefits quantified are the ‘incremental or additional impacts’, and do not include the ones that would be generated even without the project. 68. The benefits that could be monetarily valued in the economic analysis include: (a) Net negative GHG emissions: The interventions of the project such as the construction of a well for providing drinking water to the inspectors, and capacity building and technical support will improve the protection of forests, grassland, and pasture in Aksu-Zhabgly and Karatau State Nature Reserves (see Table 1 for various land uses associated). The establishment of agroforestry plots in both reserves does the same by reducing pressure from forests, grassland, and pasture for the provisioning services like fuelwood, fodder, and foods39. Therefore, improved protection results in net negative GHG emissions (i.e. removal). Reconstruction and enhancement of dendrological park and arboretum in KazNILHA, establishing agroforestry plots as well as protection of apple orchard in the Sayram-Ugam State Endowment National Nature Park also remove GHG from the atmosphere. (b) Tourism revenue from visitors in Aksu-Zhabgly and Karatu State Nature Reserves: Because of the construction of various tourism infrastructures (e.g. observation decks, visitor centers, guest house, water well, new eco-trail), the number of visitors in both nature reserves is expected to grow. This will bring more revenue to both. (c) Ecosystem services by protected areas supported by the project: Improved protection of forests due to the project interventions in Aksu-Zhabgly and Karatu State Nature Reserves will enhance the supply of several ecosystem services. These services notably include habitat/species protection, watershed conservation, soil erosion control, and other non-wood forest products (NWFPs). Moreover, improved protection of the glaciers in both Nature Reserves will also improve watershed conservation leading to an increasing supply of freshwater. (d) Provisioning services by apple orchard: Building a fence and installing drip irrigation facilities will save the apple orchard in the Sayram-Ugam State Endowment National Nature Park from being damaged. This will save a considerable portion of the apple harvest from being lost. The local community members will be able to harvest the apples from the orchard at a nominal fee that will be far below the market price of apples in the area. This will allow them to establish facilities for producing apple-based products such as jam, jelly, and juice for commercial purposes. 39 This way agroforestry helps improve the protection and productivity of grassland and pasture (see, World Bank 2020). Improved protection and productivity results in increased GHG removal from the atmosphere by these two land uses. Page 37 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) (e) Community benefits from agroforestry: The agroforestry plots in the Aksu-Zhabgly and Karatau State Nature Reserves will provide food, fuelwood, raw materials (e.g. timber), and fodder to the local community members. This way the plots will also reduce pressure from the forests, grassland, and pastures for provisioning services in these two nature reserves. (f) Revenue of KazNILHA from its services that will be improved by project interventions: Improved infrastructure (e.g. trail network and lighting, new routes, training and seminar facilities), as well as the enhancement of stock in the dendrological park and the arboretum, will help KazNILHA improve its services, and thus increase the revenue. KazNILHA’s revenue-generating services will include the provision of training, renting venues for seminars, conferences, and other scientific events, and pilot production inspections. Table 1: Various land uses affected by the project interventions Type Area, ha Aksu-Zhabagly Karatau State Kazakh Research Sayram-Ugam State Nature Nature Reserve Institute of State Reserve Forestry and Endowment Agroforestry National Nature Research Park Forests 27,471 2,843 - - Pasture and 15,894 17,232 - - grassland Glaciers 88,195 14,184 - - Farms 12 - - Waterbodies 274 40 - - Sandy lands and 48 - - - roads Agroforestry 10* 10* - - Dendrological Park - - 32 - Arboretum - - 14 - Apple orchard - - - 136 *Established on pastureland. 69. The project is expected to generate or contribute to a large number of benefits that could not be quantified and valued monetarily at the time of project appraisal due to a lack of necessary socio-economic and biophysical data. These benefits notably include nutrient cycling, hydrological regulation, wilderness and scenic beauty, pollination services, flood control, and prevention of land aridity by improved protection of forests, pasture, and grassland. These services are expected to improve agricultural productivity and ecosystem resilience as well as human health and wellbeing in areas where the project-financed activities will take place and far beyond. The unquantifiable benefits of the project will also include human capital development in the form of improved skills, capacities, and policy environment for sustainable land management, modernization of the nature-based tourism industry, and enhancement of research capabilities concerning forestry and agriculture in Kazakhstan. These will ultimately contribute to green growth in the country. Some of the quantifiable and unquantifiable benefits of the projects such as tourism Page 38 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) revenue, NWFPs, and benefits from the apple orchard and agroforestry will remain primarily within the country. Many benefits will also spill over to neighboring countries. As the Aksu-Zhabgly State Nature Reserve is near Kazakhstan’s borders with Uzbekistan and Kyrgyzstan, improved protection of the reserve will benefit these two countries in the form of reduced sedimentation and surface runoff, watershed protection, and enhanced water services. The net negative GHG emissions from this project will contribute to mitigating climate change globally. Therefore, the involvement of the World Bank in this project will generate public goods not only for Kazakhstan but also for neighboring countries and the entire world. 70. The benefits and costs40 of the CBA analysis are presented with associated assumptions and explanations in Table 2 and Table 3, respectively. Table 2: Benefits of CBA analysis Category Discounted Comments and assumptions value over 25-year (at a 6% rate) Net The US$2.47 The net GHG emissions are estimated by using FAO EX-ACT for the following elements negative low million of the project: GHG shado (i) Improved protection of forests, grassland, and pasture in Aksu-Zhabgly and emission w price Karatau State Nature Reserves. It is assumed that the improved protection s of due to the project interventions enhances the net negative GHG emissions carbon in forests, pasture, and grassland by 5% (as opposed to the ‘no-project The US$4.94 scenario). This is justified by the fact that the activities proposed do not high million directly address the protection of the above, but rather will contribute to shado that indirectly. Moreover, given both nature reserves have a total area of w price 166 243 ha, the budget proposed for them in this project – just under 1 of million over 4 years – is too little (about US$ 1.48 per ha per year). carbon Considering the above, it can be justified that the project’s contribution to the enhancement of net negative GHG emissions through protection is minimal. (ii) Establishment of agroforestry plots in the nature reserves mentioned above. (iii) Reconstruction and enhancement of dendrological park and arboretum in the Kazakh Research Institute of Forestry and Agroforestry. (iv) Protection of an apple orchard in the Sayram-Ugam State Endowment National Nature Park. It is assumed that the project will contribute to 50% of the net GHG emissions by the apple orchard. This is justified by the fact that half of the orchard is most likely to be damaged without the fence and the drip irrigation system that the project is planning to install. It is assumed that the net negative GHG emissions will be realized from year 5 after the completion of all project activities at the end of 4 years. By following the guidance given by World Bank (2017), a low shadow price carbon of US$42/tCO2eq and a high price of US$84/tCO2eq – both increasing at a 2.25% annual rate from the second year – are used for calculating the respective economic values of net GHG emissions. A sensitivity analysis is conducted with more ambitious shadow prices of carbon. Tourism revenue US$0.32 During 2019-2021, on average 5 171 visitors visited both nature reserves each year from visitors in million 40 All benefits and costs for the analysis period are expressed in constant US$ of 2022. All relevant input prices and values – if in other currencies than US$ and not for 2022 – are adjusted to 2022 by using appropriate exchange rates, GDP deflators and US$ inflation rates (see https://stats.oecd.org/index.aspx?DataSetCode=PRICES_CPI). Page 39 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) Category Discounted Comments and assumptions value over 25-year (at a 6% rate) Aksu-Zhabgly & which brought revenue of US$ 5.09 per visitor41. As set in the Reconstruction Paper for Karatau State this project (World Bank 202142), it is assumed that the visitor number will be doubled Nature Reserves in year 4 of the project. Ecosystem services US$ 2.50 The ecosystem services that could be valued monetarily include habitat/species by protected areas million protection, watershed conservation, soil erosion control, and other non-wood forest supported by the products (NWFPs). These services are available because of the improved protection of project the forests in the Aksu-Zhabgly and Karatau State Nature Reserves. The services also include watershed conservation through improved protection of the glaciers in these nature reserves. As in the case of net GHG emissions, it is assumed that only 5% of the ecosystem services mentioned above will be enhanced due to the project interventions (as opposed to the ‘no-project scenario). The justification given for net GHG emissions above also applies here: the project’s contribution to the improvement of the protection of forests and glaciers is minimal. It is also assumed that the enhanced ecosystem services will be available from year 5 after the completion of all project activities at the end of 4 years. Economic values of US$13.4 per ha per year for habitat/species protection, US$7.4 per ha per year for watershed protection/water supply, US$0.5 per ha per year for NWFP 43 and US$122.3 per ha per year for soil erosion control44 are used in the estimation of economic contribution of ecosystem services. Provisioning US$ 2.54 As the community members will get the apples almost for free, the farmgate price of services by the million apples (US$ 0.2 per kg) is used to estimate the community benefits from the apple apple orchard orchard. It is assumed that project intervention will help avoid a production loss from the orchard of 50%. This is justified by the fact that half of the orchard is most likely to be damaged without building the fence and installing the drip irrigation system that the project is planning. The first apple harvest is expected to be made in year 8 of the project. Naturally, the community benefits of the apple orchard will start from that year. The yield is expected to be 17.5 tonnes per ha per year which amounts to a total production of 2 380 tonnes per year from the orchard of 136 ha. Community US$ 0.01 Agroforestry benefits to the community in terms of products such as food, fodder, benefits from million fuelwood, and raw materials are estimated to be US$65 per ha per year45. It is assumed agroforestry that the benefits start to follow from year 3, in which 50% of the benefits will be realized followed by 75% in year 4 and 100% for the rest of the analysis period. Revenue improved US$ 0.47 KazNILHA’s revenue from the services it provides is US$0.39 per year on average during services by million 2019-2021. It is assumed that the revenue will increase by 10% due to the project (as KazNILHA opposed to the ‘no-project scenario). The assumption is justified by the fact that the project activities will improve only the limited infrastructures in KazNILHA. It is also assumed that the revenue will be realized from year 4 of the project implementation. 41 Source: Project Justification Document for Kazakhstan Resilient Landscapes Restoration Project – Additional Financing. 42 World Bank. 2021. Restructuring Paper on a Proposed Project Restructuring of Kazakhstan Resilient Landscapes Restoration Project. Washington DC. 43 Original values for 2013 (from Siikamäki et al. 2015) are converted to 2022 constant US$ through inflation adjustment. Source: Siikamäki, J., Santiago-�vila, F. J. and Vail, P. 2015. Global assessment of non-wood forest ecosystem services spatially explicit meta - analysis and benefit transfer to improve the World Bank’s Forest wealth database. PROFOR. 44 Original value for 2019 is from Li, J., Chen, H., Zhang, C. and Pan, T. 2019. Variations in ecosystem service value in response to land use/land cover changes in Central Asia from 1995_2035. PeerJ, DOI 10.7717/peerj.7665. 45 Source: Background data of World Bank (2020). Page 40 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) Table 3: Costs quantified for CBA analysis Category Discounted Summary of calculation and assumptions value over 25- year (at a 6% rate) Improvement in Aksu- US$0.37 The total cost (US$ 0.43 million) is distributed equally throughout the Ahabagly State Nature million project implementation period of 4 years. Reserve, total Improvement in Karatau US$0.48 The total cost (US$ 0.56 million) is distributed equally throughout the State Nature Reserve, total million project implementation period of 4 years. Orchard improvement in US$0.40 The total cost (US$ 0.47 million) is distributed equally throughout the Sayram-Ugam State million project implementation period of 4 years. Endowment National Reserve Park Improvement in Kazakh US$0.39 The total cost (US$ 0.45 million) is distributed equally throughout the Research Institute of million project implementation period of 4 years. Forestry and Agroforestry O&M costs US$1.03 It is assumed that O&M costs will be 5% per year of the construction costs million of infrastructures. O&M will be needed from the 5th year as the infrastructures will be constructed during the 4 years of the project. 71. Sensitivity analysis. The sensitivity of the economic viability of the project is tested with the changes in several benefit and cost factors. The factors include shadow price of carbon, discount rate, enhancement in net GHG emissions and visitation rate in nature reserves, farmgate price of apple and agroforestry benefits as well as the operation and maintenance costs of physical infrastructures. 72. Both EIRR and EBCR are sensitive – to varying degrees - to changes in all the above factors except the discount rate. These two indicators are highly sensitive to the changes in the enhancement of net GHG emissions, while marginally so to the changes in agroforestry benefits. 73. Table 4). The direction of change in EIRR and EBCR depends on the factors. For example, both indicators decrease with the decrease in the number of visitors to the nature reserves and farmgate price of apple, while increase with the decrease in the maintenance costs of physical infrastructure. The EBCR decreases with the increase in the discount rate46 (Table 4). Table 4: Sensitivity analysis with some key factors Factor Input value in Change EIRR EBCR the base case With a low With a high With a low With a high carbon price carbon price carbon carbon price price Base case 21.76% 27.88% 2.77 3.77 Enhancement of 5% 0% 14.77% 15.33% 1.83 1.90 net GHG +50% 57.48% 80.34% 11.21 20.65 emissions Agroforestry US$ -90% 21.72% 27.84% 2.77 3.77 benefits 64.72/ha/year 160% 21.84% 27.95% 2.78 3.78 Discount rate 6% 1% 21.76% 27.88% 3.99 5.44 46 EIRR is not a product of discount rate and thus does not change with the change in the former. Page 41 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) Factor Input value in Change EIRR EBCR the base case With a low With a high With a low With a high carbon price carbon price carbon carbon price price 11% 21.76% 27.88% 1.94 2.64 Number of 5 171/year -30% 20.61% 26.84% 2.63 3.63 visitors to +300% 23.52% 29.47% 2.99 3.99 nature reserves Farmgate price US$0.20/kg -30% 20.66% 27.07% 2.56 3.57 of apple +300% 29.80% 34.30% 4.83 5.84 Operation and 5% of 0% 24.10% 29.91% 4.14 5.64 maintenance construction +30% 7.33% 16.26% 1.04 1.42 (O&M) costs of costs per year physical infrastructure 74. The shadow prices of carbon suggested by HLCCP that are used in this economic analysis aim to limit global warming to 2oC by the end of this century. With the 2.25% growth rate, the price ranges between US$ 50/tCO2eq and of US$ 100/tCO2eq in 2030, and US$ 78/tCO2eq and of US$ 157/tCO2eq in 2050. IPCC (2018)47 - to limit global warming to 1.5oC by the end of this century - suggests a price starting from US$ 135/tCO2eq in 2030 and US$ 245/tCO2eq in 2050. To see the effects of more ambitious climate targets on this project’s economic viability, a sensitivity analysis with a carbon price ranging from US$ 100/tCO2eq to US$ 400/tCO2eq is conducted. Naturally, with higher shadow prices of carbon the EIRRs and EBCRs increase as the project is expected to generate net negative GHG emissions. The EIRR increases from 33.33% to 58.12%, while EBCR from 4.20 to 11.38 when the shadow price of carbon increases from US$ 100/tCO2eq to US$ 400/tCO2eq (Table 5). Table 5: Sensitivity analysis with shadow price of carbon The shadow price of carbon EIRR EBCR (US$/ tCO2eq) 100 30.33% 4.20 150 36.26% 5.40 200 41.49% 6.59 250 46.19% 7.79 350 54.45% 10.18 400 58.12% 11.38 Table 6: GHG emissions due to the project Activity Total emissions over 25 years tCO2 Average annual emissions, tCO2 eq* eq/year* Improved protection of forests; -57,502 -2 300 enhancement and improved management of dendrological park and arboretum 47IPCC. 2018. Global Warming of 1.5°C. Special Report on Global Warming of 1.5°C. [Masson-Delmotte, V., P. Zhai, H.-O. Pörtner, D. Roberts, J. Skea, P.R. Shukla, A. Pirani, W. Moufouma-Okia, C. Péan, R. Pidcock, S. Connors, J.B.R. Matthews, Y. Chen, X. Zhou, M.I. Gomis, E. Lonnoy, T. Maycock, M. Tignor, and T. Waterfield (eds.)]. Page 42 of 48 The World Bank PROGREEN Kazakhstan Resilient Landscapes Restoration Project (P179008) Improved protection of pasture and -36,560 -1 462 grassland Agroforestry -2 662 -106 Protection of apple orchard -4 039 -163 Net emissions -100 763 - 4 031 ‘-‘ denotes GHG removal; ‘+’ denotes GHG emissions or source 75. The project has significant positive employment impacts. The establishment and management of four agroforestry plots in Aksu-Zhabgly and Karatau State Nature Reserves will involve local people. The protection of the apple orchard in the Sayram-Ugam State Endowment National Nature Park through fencing and installing a drip irrigation system and its operation will also involve local people. Together these activities will create 30 permanent jobs, and 90 seasonal jobs every year (Table 7). The seasonal jobs will involve the harvesting of apples from the orchard and produces from the agroforestry plots, and the manufacturing of apple products. Moreover, by improving the technical capacities and services, the project will help increase revenues and secure a financial budget on a continuous basis from the Kazakhstan Government for the Aksu- Zhabgly and Karatau State Nature Reserves and the KazNILHA. Therefore, the project will help protect the existing 276 jobs in these institutions (Table 7). Table 7: Job impacts of the project Activity Number Jobs created 120 Permanent 30 Seasonal 90 Jobs protected 276 Aksu-Zhabagly State Nature Reserve 75 Karatau State Nature Reserve 97 Kazakh Research Institute of Forestry and Agroforestry Research 104 Page 43 of 48