The World Bank Blueing the Black Sea GEF Regional project (P173890) Project Information Document (PID) Appraisal Stage | Date Prepared/Updated: 09-Jan-2023 | Report No: PIDA31543 Jul 25, 2022 Page 1 of 10 The World Bank Blueing the Black Sea GEF Regional project (P173890) BASIC INFORMATION OPS_TABLE_BASIC_DATA A. Basic Project Data Country Project ID Project Name Parent Project ID (if any) Europe and Central Asia P173890 BBSEA: Blueing the Black Sea GEF Regional project Region Estimated Appraisal Date Estimated Board Date Practice Area (Lead) EUROPE AND CENTRAL ASIA 11-Jan-2023 16-Mar-2023 Environment, Natural Resources & the Blue Economy Financing Instrument Borrower(s) Implementing Agency GEF Focal Area Investment Project Financing Organization of the Black Permanent International International waters Sea Economic Cooperation Secretariat of Black Sea Economic Cooperation (BSEC) Proposed Development Objective(s) The Project Development Objective (PDO) is to strengthen the capacity and preparedness of governments and the private sector in the Project Focus Countries to take actions to reduce pollution in the Black Sea. Components Economic Case to Invest in Pollution Prevention and Reduction Green & Innovative Financing Project Management PROJECT FINANCING DATA (US$, Millions) SUMMARY -NewFin1 Total Project Cost 6.39 Total Financing 6.39 of which IBRD/IDA 0.00 Financing Gap 0.00 DETAILS -NewFinEnh1 Non-World Bank Group Financing Jul 25, 2021 Page 2 of 10 The World Bank Blueing the Black Sea GEF Regional project (P173890) Trust Funds 6.39 Global Environment Facility (GEF) 6.39 Environmental and Social Risk Classification Moderate Decision The review did authorize the team to appraise and negotiate Other Decision (as needed) Regional Context 1. The Black Sea region may be described as an expression of multifaceted networks . The wider Black Sea area includes a population of 332 million people. Many of the region’s littoral1 and adjacent states2 belong to different sub-regions (i. e., Southeast Europe, the South Caucasus, Central Asia, and Mediterranean). Such multifaceted networks are reflected in the geographical inter-connectedness in the region, linking the Aegean and the Mediterranean seas, as well as the Danube River, Dnieper and Don rivers. Despite such inter-connectedness, the wider Black Sea region structurally heterogeneous, as is illustrated by the diverse links each country has with trading partners and economic blocks, with varying impacts on domestic and foreign economic policies. Sectoral and Institutional Context Sectoral context 2. Over the past two decades, the Black Sea has become one of the most polluted seas in Europe, with eutrophication3 being one of the most pressing issues before the war. Despite the additional environmental damages created, eutrophication remains the most significant process causing degradation of the Black Sea. Eutrophication has harmful environmental, socio-economic and human health impacts, causing the death of animals and fish, degrading waters used for both drinking and irrigation, impacting recreation, among others. Eutrophication is caused by nitrogen and phosphorus compounds, coming largely from agricultural, domestic, and industrial wastewater sources. The rapid growth of fertilizer use and manure application has resulted in over-fertilization. This phenomenon has changed the entire Black Sea ecosystem and is expected to worsen as agriculture sector faces new challenges related to climate change and invasive pests. 3. The eutrophication issue is a transboundary problem that is generated from multiple sources and involves multiple stakeholders. Data collection, research, policies and institutions dealing with 1 Republic of Bulgaria, Georgia, Romania, Russian Federation, Republic of Türkiye, Ukraine 2 Armenia, Azerbaijan, Greece, Moldova 3 Eutrophication is the process by which an entire body of water, or parts of it, becomes progressively enriched with minerals and nutrients. It has also been defined as "nutrient-induced increase in phytoplankton productivity". Jul 25, 2021 Page 3 of 10 The World Bank Blueing the Black Sea GEF Regional project (P173890) eutrophication in the Black Sea are fragmented. No systematic analyses have been done on nutrient inputs to the Black Sea which resulted in the difficulty to address the issue and to formulate policy options to manage the eutrophication in coastal areas of the Black Sea countries. 4. Improved management of sludge and organic waste from agricultural sector is critical in avoiding the eutrophication in the Black Sea. Not just wastewater, but the solid component of organic waste from the agricultural sector and sludge are often left out from the solid waste management system. Lack of collection and treatment system for the solid organic waste can cause leakage of pollution into water bodies. Institutional context 5. The Governments of the riparian states have agreed to collaborate to address pollution in the Black Sea region since the 90s. The Convention on the Protection of the Black Sea Against Pollution also referred to as "Bucharest Convention� was signed in 1992. The lessons learned section of this PAD highlights a series of projects in the Danube watershed. These interventions collectively contributed to the decrease in the level of pollution from nutrients in the Danube River. Additional projects in the region have contributed to effective integrated nutrient pollution control. The lessons learned from these past experiences are valuable for the Black Sea where nutrient level remains high. The momentum of the Bucharest Convention was renewed by the process that led to the adoption of the Common Maritime Agenda (CMA) in 2019. 6. The implementation of the CMA is supported by the Organization of the Black Sea Economic Cooperation (BSEC) and by the Black Sea Commission4 (BSC). The BSEC is a multilateral political and economic initiative aimed at fostering interaction and harmony among the Member States. It serves as a forum for cooperation in a wide range of areas for its 13 Member States5. The BSEC was launched as a regionally owned initiative, when the Heads of State and Government signed the Summit Declaration and the Bosphorus Statement on 25 June 1992, in Istanbul. The BSC6 was established based on the Bucharest Convention that entered into forced in 1994. It is the basic framework of agreement and three specific Protocols, which are (i) the control of land-based sources of pollution, (ii) dumping of waste and (iii) joint action in the case of accidents (such as oil spills). 7. The proposed Project will benefit four Project Focus Countries (Georgia, the Republic of Moldova, the Republic of Türkiye, and Ukraine) through capacity building and knowledge exchange. Country level activities are funded by the GEF in Georgia, Moldova, Türkiye and Ukraine7. The proposed Project is the first step towards building the broader BBSEA Program. Through the proposed interventions, the Project aims at strengthening the commitment of the Governments of the Project Focus Countries to address the issue of marine pollution in a sustainable way. The Project will also facilitate the collaboration with private sector/SMEs and innovators, thus allowing for piloting innovative pollution prevention/reduction solutions. It is envisaged that these interventions will create an enabling environment for systemic and coordinated actions in the Project Focus Countries and will also contribute to building momentum through knowledge creation and regional knowledge sharing to combat marine pollution and develop other sectors of the Blue Economy. 8. The proposed Project will support strengthening the capacity and preparedness of governments and the private sector in participating countries to take actions to reduce pollution in the Black Sea. In 4 The BSC full name is Commission on the Protection of the Black Sea Against Pollution. 5 Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Republic of North Macedonia, Romania, Russian Federation, Serbia, Türkiye and Ukraine. 6 BSC comprises of Bulgaria, Georgia, Romania, Russia, Türkiye and Ukraine 7 The GEF Focal Points of these four countries have endorsed this Project. Jul 25, 2021 Page 4 of 10 The World Bank Blueing the Black Sea GEF Regional project (P173890) terms of outcomes, the project aims to increase awareness of relevant institutions of the costs and consequences of inaction, as well as opportunities for actions to reduce pollution (through dedicated technical assistances); will help enhance the legal and institutional environment for harmonized action to reduce nutrient pollution in the Black Sea (by developing recommendations for policy harmonization and regional and national workshops); and, increase the preparedness of the Project Focus Countries to undertake high impact investments to reduce nutrient pollution (through knowledge exchange activities, study tours, regional meetings, as well as national reports for prioritizing investments for pollution prevention and dissemination workshops and investment pre-feasibility study). Through regional and national eco-innovation challenges, the Project will support innovations developed for taking action on pollution reduction in the Black Sea. All these will contribute to the long-term outcome of improving the environmental health of the Black Sea and increasing the social and economic benefits for the population. Project Development Objective PDO Statement 9. The Project Development Objective (PDO) is to strengthen the capacity and preparedness of governments and the private sector in the Project Focus Countries8 to take actions to reduce pollution in the Black Sea. PDO Level Indicators • PDO Indicator #1: “Strengthened agencies’ capacities to reduce or prevent pollution in the Black Sea as a result of the project� (Number). • PDO Indicator #2: “Completed investment preparation activities (pre-feasibility studies etc.)� (Number) • PDO Indicator #3: “Pilot projects implemented by private entities� (Number) • PDO Indicator #4: “Innovations successfully promoted through the Eco-Innovation Challenge� (Number). Project Components 10. Component 1. Economic case to Invest in Pollution Prevention and Reduction (GEF US$1.128 million; includes consultancy services, training, awareness raising campaigns, consultations): Good understanding of the cost of pollution at the national and regional levels are an indispensable basis for further developing the Blue Economy in the region. Building on the analytical work prepared under Turning the Tide of Pollution9 specifically the “cost of inaction� and the “legal and institutional analysis�, this component will develop policy and regulation as well as investment recommendations to the governments of the Project Focus Countries. 11. Subcomponent 1.1: National Policy and Institutional Framework (GEF US$0.323 million; includes consultancy services, consultations): The sub-component would build on the on-going and planned national investments for rural development, wastewater treatment, rivers basin and coastal zone management, as well as current institutional reforms that may present further opportunities for improved coordination. Good policy and governance at the national and regional levels are an indispensable basis for further 8“Project Focus Countries� means Georgia, the Republic of Moldova, the Republic of Türkiye, and Ukraine. 9The analytical work under BBSEA referenced P173334. The work has been initiated in early 2021 and will be completed in 2022 Jul 25, 2021 Page 5 of 10 The World Bank Blueing the Black Sea GEF Regional project (P173890) developing the blue economy in the region. The sub-component will provide an assessment of the current national policy and legal framework and examine the alignment with regional and international instruments (regulations/conventions) on pollution related to water management, agriculture, aquaculture, tourism and shipping. It will provide recommendations for legislative and administrative reforms at national and municipal levels, aligning with regional engagements for improved coordination between sectoral agencies and for pollution control. National level analysis will take place in Türkiye, Georgia and Moldova. 12. Subcomponent 1.2: National investment recommendations, knowledge exchange and regional dialogue (GEF US$ 0.805 million; includes consultancy services, training and consultations): The sub- component will include development of national investment recommendations for pollution reduction and management in Türkiye, Georgia and Moldova. Building on the findings from the Institutional, Policy and Legal Analysis prepared under Turning the Tide of Pollution, the sub-component will establish dialogue with the line ministries and ministries in charge of finance as well as key regional stakeholders. Within the framework of relevant regional and international frameworks, the sub-component will then identify the potential infrastructure investment recommendations at pollution hot spots, including investment concept, investment roadmap with baseline data, targets and monitoring mechanism. This subcomponent will also support assessing the pollution impacts and selection10 and preparation11 of small clean-up activities in Ukraine for specific pollution generated by the ongoing war such as debris and rubble, once the situation permits it. 13. Component 2. Green & innovative financing (GEF US$ 4.961 million). This component will improve the readiness of both the public and private sectors in the four Project Focus Countries and provide them with access to financial investment, innovation and technologies for pollution reduction and management. The component will follow a phased approach, with Türkiye and Georgia being targeted first through the Eco-innovation Challenge, and Moldova in a second phase. Ukraine will undergo specific preparation of clean-up interventions to address the pollution impacts of the war (once the situation permits it). 14. Subcomponent 2.1 Eco-Innovation Challenge (GEF US$ 3.918 million; includes consulting services, non-consulting services, goods, consultations): This sub-component will finance and promote innovation to address the eutrophication issue of the Black Sea that will allow public sector institutions, development partners and potential investors to identify, verify and invest in innovative solutions. The Eco-Innovation Challenge will include two different windows: (i) a region-wide challenge targeting early concept ideas; and (ii) three national challenges (one in Türkiye and Georgia in a first phase, and Moldova in a second phase) to support the pilot implementation of proven concepts and piloted ideas through provision of grants. Thus, selected eco-businesses could receive grants under the National Window. The overall theme of the challenges will be to “unlock the potential of eco-innovation to mitigate the impact of eutrophication in the Black Sea water�. 15. Subcomponent 2.2 Investments Preparation (GEF US$ 1.043 million; includes consulting services, non- consulting services, goods, consultations): The Project will support the preparation of investments through identification and selection of viable solutions and locations. Nutrient pollution from agricultural sector is the most pressing issue at stake in many of the beneficiary countries and financing gaps in green-gray 10 The selection will be undertaken based on the priorities to be advised by the counterparts in Ukraine, and on the environmental and social screening to make sure only Moderate risk activities are allowed for the financial support within the project scope. 11 This will include the development of feasibility studies, economic and financial analysis, detailed design and activity-specific environmental and social impact assessment. The screening process will be carried out in accordance with the provisions of the project ESMF. Jul 25, 2021 Page 6 of 10 The World Bank Blueing the Black Sea GEF Regional project (P173890) infrastructures to treat the pollution was also confirmed and recognized as investment urgently needed during the series of national consultations. The support will target investments for nutrient pollution treatment, urban wastewater treatment, water depollution, water recycling and reuse. The Project will select at least one potential investment project with the most pressing urgency for the purpose of Blueing the Black Sea to support the preparing of a more concrete project proposal. This subcomponent will also support the implementation of small clean-up pilot measures in Ukraine, selected and prepared under Subcomponent 1.2., once the situation permits it. 16. Component 3 - Project Management (GEF US$ 0.304 million). This component will support BSEC PERMIS in charge of the technical implementation of the project activities, financial management and procurement, overall monitoring of project results, production of progress reports, and ESF compliance, including the establishment of a culturally appropriate grievance redress mechanism. BBSEA PIU will be housed in the BSEC PERMIS and will be comprised by professional, administrative and support staff. BBSEA PIU will be responsible for the overall coordination of the three components and will inter alia: (a) oversee the preparation of annual operating plans; (b) prepare progress and other reports, as required by the GEF and the World Bank. The Project will deploy consultancy services to support the BSEC PIU in managing the Eco-Innovation Challenge and in meeting the requirements of the relevant ESF standards. Contribution to Corporate Commitments 17. Citizen Engagement. The project will adopt a participatory approach for the Eco-Innovation Challenge to ensure local stakeholders’ buy-in and commitment. The Citizen Engagement (CE) strategy -to be included in the POM- will inform the participatory planning approach. Participants in the Eco-Innovation Challenge will be able to actively provide feedback about the competition process from the phase of call for proposals through the implementation. A culturally appropriate grievance mechanism (GM) will be established and communicated to stakeholders during project implementation. This GM will be functional throughout the project duration and will be open to allow citizens to provide unrestricted feedback on any issue pertaining to the Project. 18. Gender. The Project will encourage women’s participation in the Eco-Innovation Challenge. Women entrepreneurs will be provided additional training support to enable their enterprises to compete on equal basis (training, capacity building activities etc.). Targeted measures are envisaged under the project Stakeholder Engagement Plan to reach out to women as the project beneficiaries. The Eco-Innovation Challenge awareness campaigns will reach out to vulnerable groups as well as business associations and female entrepreneurs. 19. Climate change. The Project will contribute to mitigation of GHG emission through national and regional actions to reduce pollution in the Black Sea and waterways. Eutrophication and wastewater lead to increased GHG emission whereas healthy marine ecosystems are natural carbon sinks. National investment recommendations for pollution reduction and management under component 1.2 will include nature-based solutions such as wetlands. 20. Maximizing Finance for Development. The project’s benefits come from strengthened regional collaboration and private sector engagement through strengthened economic, technical, and communication for pollution management. The Project will support mobilizing the public and private sector on prevention and mitigation of key marine pollutants in the Black Sea, by catalyzing innovation approaches, investing in pollution reduction innovations and alternative plans for reduction of marine pollution, as well as enhancing regional dialogue and facilitating strategic investments. Under sub-component 2.1, the Eco- Innovation Challenge will support regional entrepreneurs and business accelerators towards promoting new Jul 25, 2021 Page 7 of 10 The World Bank Blueing the Black Sea GEF Regional project (P173890) knowledge and ideas among entrepreneurs, eco-business and other participants. Entrepreneurs and accelerators will focus their efforts in promoting healthy and sustainable innovations in Blue Economy. Institutional and Implementation Arrangements 21. Project Implementation will rely on the well-established regional coordination mechanisms of the Permanent International Secretariat of BSEC (BSEC PERMIS). The BSEC PERMIS is based in Istanbul, Türkiye and performs the secretarial duties of the BSEC Organization. Building on its experience in working in all countries across the Black Sea region and its ability to craft consensus, BSEC PERMIS has played an active role in the negotiation of the regional initiative – the 2019 CMA, and its scientific pillar - SRIA. The latter has created a new dynamic in the regional dialogue on sustainable Blue Economy development and practically involved all littoral states and Moldova in spite of the intrinsic political differences between them. The Project will establish a Regional Steering Committee, Advisory Committee and a Project Implementation Unit. 22. The BSEC PERMIS/BBSEA Project Implementation Unit (PIU) will be responsible for the overall coordination and will inter alia: (a) oversee the preparation of annual operating plans; (b) prepare progress and other reports, as required by the GEF and the World Bank. The Project will deploy consultancy services to support the BSEC PIU in managing the Eco-Innovation Challenge and in meeting the requirements of the relevant ESF standards. The BSC will provide technical support to the BSEC as needed. BSTDB will be consulted during the implementation of subcomponent 2.1, especially to identify commercial banks interested in acquiring expertise on environmental standards. BSEC will hire consultants to manage the Eco- Innovation Challenge (subcomponent 2.1). International/regional acceleration firms are considered to support the acceleration program for the regional/national winners and grantees to improve the capacities of the innovators in the region. The PIU will be established not later than 30 days after the effective date of the Grant Agreement. . . Legal Operational Policies Triggered? Projects on International Waterways OP 7.50 No Projects in Disputed Areas OP 7.60 No Summary of Assessment of Environmental and Social Risks and Impacts . . CONTACT POINT World Bank Berengere P. C. Prince Jul 25, 2021 Page 8 of 10 The World Bank Blueing the Black Sea GEF Regional project (P173890) Lead Natural Resources Management Specialist Alexandru Cosmin Buteica Environmental Specialist Gulana Enar Hajiyeva Senior Environmental Specialist Borrower/Client/Recipient Organization of the Black Sea Economic Cooperation Lazar COMANESCU Ambassador lcomanescu@bsec-organization.org Implementing Agencies Permanent International Secretariat of Black Sea Economic Cooperation (BSEC) Venera DOMI Executive Manager venera.domi@bsec-organization.org FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects APPROVAL Berengere P. C. Prince Task Team Leader(s): Alexandru Cosmin Buteica Gulana Enar Hajiyeva Approved By Practice Manager/Manager: Country Director: Eavan O'Halloran 09-Jan-2023 Oct 03, 2021 Page 9 of 10 The World Bank Blueing the Black Sea GEF Regional project (P173890) Oct 03, 2021 Page 10 of 10