Brazil: Global Environment Facility Approves US$ 4 Million Grant for Biodiversity in Espírito Santo Contacts: World Bank: Mauro Azeredo (+55 61) 3329-1059 mazeredo@worldbank.org GEF: Maureen Shields Lorenzetti (+ 1 202) 473-8131 mlorenzetti@thegef.org WASHINGTON, November 19, 2008 —The World Bank’s Board of Executive Directors yesterday approved a US$ 4 million grant from the Global Environment Facility (GEF) to the Government of the State of Espírito Santo for the Biodiversity and Watershed Conservation and Restoration Project, which will support the State’s efforts to reduce the rate of biodiversity loss. The project will support the adoption of environmentally friendly land use practices in two key Atlantic forest watersheds in Espírito Santo, thereby contributing to improved biodiversity conservation. Amongst the different activities supported by the project, it will develop innovative pilot Payment for Environmental Services (PES) mechanisms in collaboration with water users (such as the state water utility CESAN and hydroelectric power producers), which will also contribute to support protected areas. Farming in the Jucu and the Santa Maria da Vitoria watersheds has led to a reduction of forest cover and fragmentation, encroachment of steep slopes and protected riparian forest, soil erosion, water pollution, silting of rivers, and pasture degradation. Habitat loss and degradation are significant threats to biodiversity in the State. The project will help conserve globally significant biodiversity, including critically threatened endemic species, protect and enhance biodiversity conservation within the Atlantic Forest Biome, create research links between land use change and environmental services, and will help create a long- term financing instrument for biodiversity conservation that could be replicated and serve as a model for other states within the country. It will also contribute to higher income for farmers and improved water supplies. “This is an innovative project, that seeks to integrate Payment for Environmental Services into a broader watershed management program,” said John Briscoe, Country Director for Brazil at the World Bank. “Considering that the basic situation experienced in the Espírito Santo watersheds is common in the country, there is considerable potential for replicating the approach elsewhere. There is also considerable potential for replication of the approach in other countries, both in the region and worldwide.” The activities supported by this GEF donation will integrate closely with the Ecological Corridors Project, which is part of the Pilot Program to Conserve the Brazilian Rain Forests (PPG7), and the Espírito Santo Water and Coastal Pollution Management (Águas Limpas) Project, which aims to secure long-term water supply and water quality in the coastal regions of the State, both of which have World Bank support. There are four components to the project: Strengthening watershed management, including (a) establishing and strengthening watershed management committees, (b) prioritizing intervention areas, and (c) preparing economic-ecological zoning plans for both watersheds. Targeted biodiversity protection and protected area management. Restore and enhance the protection of critical areas for biodiversity conservation, including actions to (a) rehabilitate degraded areas; (b) implement the management plan for Pedra Azul State Park; (c) develop and implement new instruments for biodiversity conservation, such as a conservation trust fund; and (d) support the implementation of two ecological corridors. Integrating biodiversity in production landscapes: (a) remove obstacles to the adoption of environmentally friendly land use practices; and (b) stimulate their adoption, focusing particularly on biodiversity conservation and water services protection. Monitoring and evaluation, and project management. “These two watersheds are unique in the State, and in the Atlantic Forest biome, because they retain more than 40 percent of their original forest cover, represent more than a third of the remaining rainforests in the State and provide about 95% of water supplies for half the States population who reside in the Greater Vitória Metropolitan Area”said Gunars Platais, World Bank Project Manager and a Specialist in PES mechanisms. “Despite human pressure, the area still harbors extremely high levels of biodiversity across all categories, and thus the State Government has defined it as a priority for biodiversity conservation. The establishment of a PES mechanism in the two watersheds will contribute to guaranteeing the sustainability of land use practices that generate global environmental benefits. Experience shows that well-designed PES mechanisms can be sustainable because they depend on the mutual interests of service users and service providers.” On GEF and the World Bank The Global Environment Facility (GEF) is an instrument for providing grant and concessional funding to achieve global environmental benefits in the six focal areas - climate change; biological diversity; international waters; persistent organic pollutants; land degradation; and ozone layer depletion. GEF also supports the work of the global agreements to combat desertification. The World Bank Group is one of GEF’s implementing agencies and supports countries in preparing GEF co- financed projects and supervising their implementation. The Bank plays the primary role in ensuring the development and management of investment projects. The Bank draws upon its investment experience in eligible countries to promote investment opportunities and to mobilize private sector, bilateral, multilateral, and other government and non-government sector resources that are consistent with GEF objectives and national sustainable development strategies. ### For further information on Bank’s GEF program, visit http://www.worldbank.org/gef . For further information on GEF, visit http://www.gefweb.org. For additional information on theEspírito Santo Biodiversity and Watershed Conservation and Restoration Project, please visit: http://web.worldbank.org/external/projects/main?pagePK=64283627&piPK=73230&theSitePK=40941&menuPK=228424&Projectid=P094233 For more information on the World Bank’s work in Brazil, please visit: http://www.worldbank.org/br