FOR OFFICIAL USE ONLY Report No: PAD3736 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PROJECT PAPER ON A PROPOSED GRANT FROM THE GLOBAL ENVIRONMENT FACILITY (GEF) IN THE AMOUNT OF US$4,063,927 TO THE DOMINICAN REPUBLIC FOR AN INTEGRATED LANDSCAPE MANAGEMENT IN DOMINICAN REPUBLIC WATERSHEDS PROJECT OCTOBER 4, 2021 Environment, Natural Resources and Blue Economy Global Practice Latin America And Caribbean Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective September 7, 2021) Currency Unit = Dominican Peso (RD$) RD$ 56.86 = US$1 FISCAL YEAR January 1 - December 31 Regional Vice President: Carlos Felipe Jaramillo Country Director: Michel Kerf Regional Director: Anna Wellenstein Practice Manager: Valerie Hickey Task Team Leader(s): Katherine Anne O’Gara, Hira Channa The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) ABBREVIATIONS AND ACRONYMS AC Advisory Committee AFOLU Agriculture, Forestry, and Land Use AOP Annual Operations Plan BD GEF Biodiversity Focal Area CIRAD French Agricultural Research Centre for International Development COVID-19 Coronavirus Disease of 2019 CRYN Yaque del Norte River Basin (Cuenca del Río Yaque del Norte) CSA Climate-Smart Agriculture CPS Country Partnership Strategy DA Designated Account DFIL Disbursement and Financial Information Letter Directorate of Environment and Natural Resources Information (Dirección de Información DIARENA Ambiental y Recursos Naturales) DR Dominican Republic DR-CAFTA Dominican Republic-Central America Free Trade Agreement E&S Environmental and Social EFA Economic and Financial Analysis END-2030 National Development Strategy 2010-2030 (Estrategia Nacional de Desarrollo) ER Program Emissions Reduction Program ESCP Environmental and Social Commitment Plan ESF Environmental and Social Framework ESMF Environmental and Social Management Framework ESRS Environmental and Social Review Summary ESS Environmental and Social Standards EX-ACT Ex-ante Carbon Balance Tool FAO Food and Agriculture Organization of the United Nations FCPF Forest Carbon Partnership Facility FEDOMU Dominican Federation of Municipalities (Federación Dominicana de Municipios) FM Financial Management FS Financial Statement FY Fiscal Year GAP Gender Action Plan GDP Gross Domestic Product GEF Global Environment Facility GHG Greenhouse Gas GoDR Government of the Dominican Republic GRM Grievance Redress Mechanism GRS Grievance Redress Service GTI Inter-institutional Technical Group (Grupo Técnico Interinstitucional) Ha hectare Dominican Institute of Agricultural and Forest Research (Instituto Dominicano de Investigaciones IDIAF Agropecuarias y Forestales) Page 3 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) IFR Interim Financial Report IICA Inter-American Institute for Cooperation on Agriculture ILM Integrated Landscape Management INDOCAFE Dominican Institute for Coffee (Instituto Dominicano del Café) INDRHI National Institute of Hydraulic Resources (Instituto Nacional de Recursos Hidráulicos) IPF Investment Project Financing IPCC Intergovernmental Panel on Climate Change LAC Latin America and the Caribbean LD GEF Land Degradation Focal Area LDN Land Degradation Neutrality LMP Labor Management Procedures M&E Monitoring and Evaluation MACS Mechanism for Attention to Complaints and Suggestions MAG Ministry of Agriculture (Ministerio de Agricultura) MARN Ministry of Environment and Natural Resources (Ministerio del Ambiente y Recursos Naturales) Ministry of Economy, Planning, and Development (Ministerio de Economía, Planificación y MEPyD Desarrollo) NDC Nationally Determined Contribution (Associated to the Paris Agreement) NGO Non-Governmental Organization NPV Net Present Value OHS Occupational Health and Safety ONE National Statistics Office (Oficina Nacional de Estadística) National Action Program to Fight Desertification (Plan de Acción Nacional de Lucha Contra la PAN-LCD Desertificación y los efectos de las Sequías) PF Process Framework PIU Project Implementation Unit POM Project Operational Manual PPE Personal Protection Equipment PPG Project Preparation Grant PPSD Project Procurement Strategy for Development REDD+ Reducing Emissions from Deforestation and Forest Degradation SC Steering Committee SEP Stakeholder Engagement Plan SIGEF Integrated Financial Management System (Sistema Integrado de Gestión Financiera) Social Indicators System of the Dominican Republic (Sistema de Indicadores Sociales de la SISDOM República Dominicana) SLM Sustainable Land Management SOEs Statements of Expenditures STEP Systematic Tracking and Exchanges in Procurement tCO2-eq Tons of carbon dioxide-equivalent TSA Treasury Single Account UEPEX Executive Unit for External Projects (Unidad Ejecutiva de Proyectos Externos) UNCBD United Nations Convention on Biological Diversity Page 4 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) UNCCD United Nations Convention to Combat Desertification US United States WB World Bank WBG World Bank Group Page 5 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) DATASHEET BASIC INFORMATION Is this a regionally tagged project? Country (ies) No Dominican Republic Financing Instrument Classification Investment Project Financing Small Grants [ ] Situations of Urgent Need or Assistance/or Capacity Constraints [ ] Financial Intermediaries (FI) [ ] Series of Projects (SOP) OPS_BASI CINFO_TABLE _3 Approval Date Closing Date Environmental and Social Risk Classification 04-Oct-2021 30-Sep-2026 Substantial Approval Authority Bank/IFC Collaboration Country Director No GEF Focal Area Multi-focal area Financing & Implementation Modalities [ ] Multiphase Programmatic Approach (MPA) [ ] Contingent Emergency Response Component (CERC) [ ] Series of Projects (SOP) [ ] Fragile State(s) [ ] Performance-Based Conditions (PBCs) [ ] Small State(s) [ ] Financial Intermediaries (FI) [ ] Fragile within a non-fragile Country [ ] Project-Based Guarantee [ ] Conflict [ ] Deferred Drawdown [ ] Responding to Natural or Man-made Disaster [ ] Alternate Procurement Arrangements (APA) [ ] Hands-on Enhanced Implementation Support (HEIS) Page 6 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) Proposed Development Objective(s) The objective of the project is to strengthen integrated landscape management in targeted watersheds in the Dominican Republic. Components Component Name Cost (US$, millions) Enabling environment for Integrated Landscape Management (ILM) and Land 0.73 Degradation Neutrality (LDN) Scaling up sustainable rice production systems to improve productivity, water use 1.38 efficiency, and biodiversity conservation Restoration of biodiversity and hydrological services in critical ecosystems 1.58 Project Management and Monitoring and Evaluation 0.36 Organizations Recipient: Dominican Republic Implementing Agency: Ministry of Environment and Natural Resources PROJECT FINANCING DATA (US$, Millions) SUMMARY -NewFin1 Total Project Cost 4.06 Total Financing 4.06 of which IBRD/IDA 0.00 Financing Gap 0.00 DETAILS -NewFinEnh1 Non-World Bank Group Financing Trust Funds 4.06 Global Environment Facility (GEF) 4.06 Expected Disbursements (in US$, Millions) Page 7 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) WB Fiscal Year 2022 2023 2024 2025 2026 2027 Annual 0.13 0.34 0.62 1.11 1.60 0.26 Cumulative 0.13 0.47 1.09 2.20 3.80 4.06 INSTITUTIONAL DATA Practice Area (Lead) Contributing Practice Areas Environment, Natural Resources & the Blue Agriculture and Food Economy SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Rating 1. Political and Governance ⚫ Low 2. Macroeconomic ⚫ Low 3. Sector Strategies and Policies ⚫ Substantial 4. Technical Design of Project or Program ⚫ Moderate 5. Institutional Capacity for Implementation and Sustainability ⚫ Substantial 6. Fiduciary ⚫ Moderate 7. Environment and Social ⚫ Substantial 8. Stakeholders ⚫ Moderate 9. Other ⚫ Substantial 10. Overall ⚫ Substantial COMPLIANCE Policy Does the project depart from the CPF in content or in other significant respects? [ ] Yes [✓] No Page 8 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) Does the project require any waivers of Bank policies? [ ] Yes [✓] No 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 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 Not Currently Relevant Financial Intermediaries Not Currently Relevant NOTE: For further information regarding the World Bank’s due diligence assessment of the Project’s potential environmental and social risks and impacts, please refer to the Project’s Appraisal Environmental and Social Review Summary (ESRS). Legal Covenants Sections and Description Section 2.03(b) of the Annex to the Grant Agreement. Not later than thirty (30) days after the Effective Date, the Recipient, through MARN, shall hire a procurement specialist, a financial management specialist, an environmental and a social specialist, with qualifications, terms of reference, and under terms and conditions acceptable to the Bank, and as further described in the Project Operational Manual and the ESCP. Section 2.03(d) of the Grant Agreement. No later than three (3) months after the Effective Date, the Recipient shall establish and thereafter operate and maintain, at all times during Project implementation, an advisory committee (the “Advisory Committee”) comprised of representatives, with functions and responsibilities acceptable to the Page 9 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) Bank and defined in the Project Operational Manual, including, inter alia, the responsibility to ensure coordination and synergies among the different Project stakeholders, provide inputs for the Annual Operations Plan and the budget and assist the PIU to define the selection criteria for Sub-projects. Section 2.03(g) Upon approval of a Sub-project and prior to the carrying out of said Sub-project, the Recipient, through MARN, shall enter into an agreement with the pertinent Eligible Beneficiary (the “Sub-project Agreement”) under terms and conditions satisfactory by the Bank. Condition Type Description Effectiveness Section 5.01 (a) of the Annex to the Grant Agreement. The Inter-institutional Agreement referred to in Section 2.03(e) of this Annex has been executed by the parties thereto. Type Description Effectiveness Section 5.01 (b) of the Annex to the Grant Agreement. That the Recipient has prepared and adopted the Project Operational Manual in a manner acceptable to the Bank. Type Description Effectiveness Section 5.01 (c) of the Annex to the Grant Agreement. That the PIU has been established in a manner acceptable to the Bank and staffed with a Project Coordinator, in a manner acceptable to the Bank, with qualifications, terms of reference, and under terms and conditions acceptable to the Bank and as further described in the Project Operational Manual. Type Description Effectiveness Section 5.01 (d) of the Annex to the Grant Agreement. That the Steering Committee has been established as provided under Section 2.03(c) of the Annex to the Grant Agreement and in a manner satisfactory to the Bank. Type Description Effectiveness Section 5.01 (e) of the Annex to the Grant Agreement. That a National Public Investment System (SNIP) Code has been assigned to the Project. Page 10 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) TABLE OF CONTENTS I. STRATEGIC CONTEXT ........................................................................................................ 12 A. COUNTRY CONTEXT .................................................................................................................... 12 B. SECTORAL AND INSTITUTIONAL CONTEXT ....................................................................................... 12 C. HIGHER LEVEL OBJECTIVES TO WHICH THE PROJECT CONTRIBUTES ..................................................... 15 D. YAQUE DEL NORTE AND YUNA WATERSHEDS .................................................................................. 17 II. PROJECT DEVELOPMENT OBJECTIVES (PDO)...................................................................... 18 A. PDO ........................................................................................................................................ 18 B. PDO-LEVEL RESULTS INDICATORS ................................................................................................. 18 III. PROJECT DESCRIPTION ..................................................................................................... 18 A. PROJECT COMPONENTS............................................................................................................... 18 B. PROJECT COST AND FINANCING .................................................................................................... 22 C. PROJECT BENEFICIARIES............................................................................................................... 22 D. LESSONS LEARNED AND REFLECTED IN THE PROJECT DESIGN ............................................................. 23 IV. IMPLEMENTATION ........................................................................................................... 24 A. INSTITUTIONAL AND IMPLEMENTATION ARRANGEMENTS .................................................................. 24 B. RESULTS MONITORING AND EVALUATION ...................................................................................... 25 C. GENDER.................................................................................................................................... 26 D. GRIEVANCE REDRESS .................................................................................................................. 26 E. SUSTAINABILITY .......................................................................................................................... 27 V. KEY RISKS ........................................................................................................................ 28 A. OVERALL RISK RATING AND EXPLANATION OF KEY RISKS ................................................................ 28 VI. APPRAISAL SUMMARY ..................................................................................................... 30 A. LEGAL OPERATIONAL POLICIES ..................................................................................................... 30 B. FIDUCIARY................................................................................................................................. 30 C. GLOBAL ENVIRONMENTAL BENEFITS AND GEF INCREMENTAL ANALYSIS .............................................. 30 D. ECONOMIC AND FINANCIAL ANALYSIS............................................................................................ 32 E. ENVIRONMENTAL AND SOCIAL ...................................................................................................... 33 VII. WORLD BANK GRIEVANCE REDRESS ................................................................................. 34 VIII. RESULTS FRAMEWORK AND MONITORING ....................................................................... 35 ANNEX 1: IMPLEMENTATION ARRANGEMENTS AND SUPPORT PLAN ................................................. 49 ANNEX 2: DETAILED PROJECT DESCRIPTION AND SELECTION OF PROJECT SITES ................................. 56 ANNEX 3: ECONOMIC AND FINANCIAL ANALYSIS .............................................................................. 61 ANNEX 4: GENDER ANALYSIS AND ACTION PLAN .............................................................................. 66 ANNEX 5: GHG ANALYSIS.................................................................................................................. 68 ANNEX 6: THEORY OF CHANGE ......................................................................................................... 70 ANNEX 7: PROJECT AREA MAP.......................................................................................................... 71 Page 11 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) I. STRATEGIC CONTEXT A. Country Context 1. The Dominican Republic (DR) is a Caribbean island nation with almost 11 million inhabitants located on Hispaniola Island, which it shares with Haiti. Over the past 25 years, the DR has experienced a remarkable period of robust economic growth.1 The economy continued its rapid expansion in the years leading up to the Coronavirus Disease of 2019 (COVID-19) pandemic, and between 2015 and 2019 the DR’s annual Gross Domestic Product (GDP) growth rate averaged 6.1 percent. Tourism, remittances, foreign direct investment, mining revenues, free-trade zones, and telecommunications have helped make the DR one of the fastest-growing economies in the Latin America and the Caribbean (LAC) region, and as of 2019, the country was on track to realize its ambition of achieving high-income status by 2030. 2. However, the global shock triggered by the COVID-19 pandemic has significantly impacted the DR’s economy, causing a sharp contraction in 2020 across critical sectors such as tourism, construction, and mining.2 The COVID-19 pandemic has pushed the DR into its first recession in nearly 25 years; GDP contracted by 6.7 percent in 2020 and is projected to remain below its potential in 2021 and 2022.3 An estimated 191,273 jobs were lost in 2020, with especially negative implications for poor households and informal workers. By December 2020, the employment rate improved to 61 percent from 57 percent in June 2020. The government’s macro-financial response policies will benefit the formal sector, but most employment remains informal. The impact of the pandemic is putting intense pressure on both revenues and expenditures, but a combination of economic recovery, especially in the tourism sector, and improvements in the efficiency of public spending are contributing to returning the fiscal deficit to a sustainable trajectory during 2021. B. Sectoral and Institutional Context 3. The DR is endowed with abundant natural resources and biodiversity on which its economy relies. The country’s geographic location, renowned beaches, and productive landscapes have enabled robust development within the agricultural and tourism sectors. The country’s complex and diverse habitats support a high degree of unique and globally significant terrestrial biodiversity characterized by a high level of endemism – the DR, Haiti, and Cuba are the largest contributors to the Caribbean’s biodiversity and are known collectively as the “Caribbean Islands hotspot.”4 For example, the country hosts 18 bird species classified as “Globally Threatened” by the International Union for Conservation of Nature (IUCN).5 Extensive watersheds connect the DR’s landscapes, livelihoods, and ecosystems from the highest mountain range in the Caribbean to tropical forests, pastureland, and agricultural fields, and then continuing downstream to mangrove forests and other coastal habitats. 1 World Bank (July 2021). “Overview”, The World Bank in Dominican Republic. https://www.worldbank.org/en/country/dominicanrepublic/overview 2 Ibid. 3 Ibid. 4 Convention on Biological Diversity. Dominican Republic – Main Details. https://www.cbd.int/countries/profile/?country=do. Accessed 14 July 2020. 5 These include the Rideway’s hawk ( Buteo ridgwayi), La Selle’s thrush (Turdus swalesi), Bay breasted cuckoo (Hyetornis rufigularis), Black rail (Laterallus jamaicensis), and the West Indian whistling duck (Dendrocygna arborea). Keystone endangered species inhabit the coastal areas, including the Antillean manatee (Trichecus manatus) and four sea turtle species. https://www.iucnredlist.org/search?landRegions=DO&searchType=species. Accessed in July 2021. Page 12 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) 4. The agri-food sector, particularly rice production, is critical for the country’s economic resilience, and recovery from the effects of the COVID-19 pandemic, while being highly dependent on natural resources and ecosystem services. The primary agriculture, livestock, forestry, and fisheries sectors contribute about five percent of GDP, and grow about four percent annually6; while agroindustry contributes an additional 11 percent annually.7 Rice represents 14 percent of agricultural GDP and is an important source of jobs and food security as a staple of the Dominican diet. Rice production is concentrated in an area of about 93,000 hectares (ha) in the Northeast and Northwest of the country, characterized by unsustainable practices and low productivity. About half of the 27,000 farms dedicated to rice production in DR belong to small producers with less than 3 ha, and rice production employs 400,000 people.8 5. While the country’s economy depends heavily on natural resources and ecosystem services such as biodiversity, water, and soil, they are threatened by climate change, extreme climatic events, and land use change driven by weak land use planning and management at the landscape level. The DR is highly exposed to extreme weather-related disasters (tropical storms, hurricanes, cyclones, floods, and landslides), accounting for GDP losses of 0.69 percent annually between 1961 and 2014.9 Projected temperature increases of 0.5 to 1 degree Celsius and an 11 percent decline in total annual rainfall by 2030 have the potential to drive the desertification on 48 percent of sensitive or degraded land in the country. Specifically, arid regions of the northwest are experiencing increasing temperatures and higher risks of drought that reduce water supplies and affect crop yields. With regards to land use change, the country was successful at combining outstanding economic growth performance with an increase in forest cover from 22 percent in 1973 to 38 percent in 2012; however, more recently, it lost 3 percent of its forest cover, and preliminary maps show that sections of forests are degraded.10 Most deforestation (60 percent) and land degradation are caused by the expansion of low productivity slash-and-burn agriculture, and poor livestock and agricultural practices11, which are aggravated by a lack of land use zoning and limited capacities from environmental authorities to manage land use at the landscape level. Unarticulated decision-making between key stakeholders, limited capacities, and insufficient information are significant barriers for integrated territorial planning. 6. Climate and land use change have resulted in biodiversity loss and land degradation that has led to soil erosion, reduced productivity, and increased sedimentation. Cloud forests, home to many endemic species, have been reduced as a result of land use change and fires, and may disappear completely as a result of increased temperatures and reduced moisture levels related to climate change impacts.12,13 6 World Bank, World Development Indicators. Accessed August 2020. 7 Junta Agroempresarial Dominicana, 2009: Estrategia para el Desarrollo Agropecuario y Agroindustrial Sostenible para la RD. 8 Inter-American Development Bank (IDB). (2018). Políticas Agropecuarias, el DR-CAFTA y Cambio Climático en la República Dominicana. Banco Interamericano de Desarrollo. 9 World Bank Group and Ministry of Economy, Planning & Development. (2015). Financial Management and Disaster Risk Assurance in the Dominican Republic (Spanish: Gestión Financiera y Aseguramiento del Riesgo de Desastres en República Dominicana). 10 Ovalles, P. (2018). Consultation Drafting of Land Use and Land Cover 2015 Analysis of Changes and Map of Deforestation in the Dominican Republic. Emissions reduction due to deforestation and forest degradation (REDD+). 11 Ministerio del Ambiente y Recursos Naturales (MARN). (2017). Neutralidad en la Degradación de las Tierras: informe final línea de base. 12 Convention on Biological Diversity https://www.cbd.int/countries/profile/?country=do 13 Lloyd, J.D., and León, Y.M.(2019). Forest change within and outside protected 2 areas in the Dominican Republic, 2000-2016. Page 13 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) Additionally, nearly 40 percent of the DR’s soils are considered degraded14, especially on steep slopes in upper watersheds. This degradation results in soil erosion, which has important economic impacts for the agriculture sector, due to productivity losses and increased costs related to maintenance of irrigation and water supply infrastructure, as well as for dam and hydroelectric generation capacity and coastal water quality and biodiversity. In addition, a reduction in the availability and quality of water is a major concern. Besides rainfall reductions associated with climate change, water resources are being further depleted by unsustainable agricultural practices, especially those of irrigated rice production, which increases soil salinity; negatively impacts biodiversity; increases methane emissions; and pollutes water sources in rice areas and downstream due to the significant use of agrochemicals, including herbicides, pesticides, and fertilizers.15 7. The Government of the Dominican Republic (GoDR) is committed to improving biodiversity conservation and achieving Land Degradation Neutrality (LDN) through Integrated Landscape Management (ILM)16 of forests, water, and agricultural landscapes. LDN is a concept promoted by the United Nations Framework Convention on Climate Change (UNFCCC) that describes a scenario under which the amount and quality of land resources necessary to support ecosystem functions and services, and enhance food security, remains stable or increases within specified temporal and spatial scales and ecosystems.17 The GoDR has committed to LDN as embodied in the National Development Strategy 2010- 2030 (Estrategia Nacional de Desarrollo 2030, END-2030)18, which identifies sustainable environmental management and adaptation to climate change as a strategic axis with four main objectives: (i) protect and use natural resources in a sustainable manner and improve environmental quality; (ii) manage water resources; (iii) develop an efficient and comprehensive national risk management system, with active communities’ participation; and (iv) adapt to climate change and mitigate its causes. 8. The GoDR has also been testing approaches on the ground to reduce land degradation and biodiversity loss in the agricultural sector. Locally adapted and more productive rice varieties and management techniques are developed and tested by the Dominican Research Institute of Agriculture and 14 Izzo, M., Araujo, N., Aucelli, P., Maratea, A., and A. Sánchez. (2013). “Land Sensitivity to Desertification in the Dominican Republic: An Adaptation of the ESA Methodology.” Land Degradation & Development 24: 486-498. 15 Irrigated rice is the second largest source of greenhouse gas (GHG) emissions from the agricultural and livestock sector. See https://unfccc.int/sites/default/files/resource/Dominican%20Republic-%20BUR1.pdf 16 The project uses the definition presented by the Landscapes for People, Food and Nature Initiative, a collaborative partnership of leading environmental and agricultural non-governmental organizations (NGOs), United Nations agencies, and governments: “A long-term collaboration among different groups of land managers and stakeholders is required to achieve the multiple objectives required from the landscape. These typically include agricultural production, provision of ecosystem services (such as water flow regulation and quality, pollination, climate change mitigation and adaptation, and cultural values); protection of biodiversity, landscape beauty, identity, and recreational value; and local livelihoods, human health, and well- being. Stakeholders seek to solve shared problems or capitalize on new opportunities that reduce trade-offs and strengthen synergies among different landscape objectives. Because landscapes are coupled with socio-ecological systems, complexity and change are inherent properties that require management.” 17 https://www.thegef.org/topics/land-degradation-neutrality 18 Some high level commitments that support the END-2030 Strategy include participation in United Nations Convention to Combat Desertification (UNCCD); LDN commitments; a National Action Program to Fight Desertification (Plan de Acción Nacional de Lucha Contra la Desertificación y los efectos de las Sequías , PAN-LCD); development of sustainability criteria for different sectors aligned with the United Nations Convention on Biodiversity (UNCBD); the Nationally Determined Contribution (NDC) goal of reducing GHG emissions by 25 percent by 2030; development of a National Strategy and the Program for Reducing Emissions from Deforestation and Forest Degradation (REDD+); and the declaration of 2016-2020 as the “Quadrennium of Water” (el Cuatrienio del Agua) and a four-pillar strategy for addressing water problems. Page 14 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) Forests (Instituto Dominicano de Investigaciones Agropecuarias y Forestales, IDIAF). These, and the BioArroz program19 of the Ministry of Agriculture (Ministerio de Agricultura, MAG) are expected to increase yields and reduce agrochemical inputs, water use, and greenhouse gas (GHG) emissions. Similarly, shaded coffee, cocoa, and other agroforestry systems have the potential to improve productivity while reducing soil erosion, better regulating hydrological supply and cycles, and mitigating GHG emissions. By increasing forest cover, coffee, and cocoa agroforestry, systems can also contribute to reducing land degradation while maintaining or increasing connectivity between protected areas and key ecosystems, hence improving biodiversity outcomes. Agroforestry systems have been promoted by the Sustainable Agroforestry Development Program and, under the country’s Emissions Reduction Program (ER Program) for Reducing Emissions from Deforestation and Forest Degradation (REDD+), private sector coffee and cocoa producers have been engaged in adopting agroforestry systems and sustainability standards to access specialized markets. However, further work is needed to scale up sustainable rice and agroforestry approaches and to achieve adoption by farmers. MAG has identified that on-farm demonstrations, adequate measurement of benefits at the farm level, analysis of impacts on biodiversity and water use, and calculation of the cost- effectiveness of changes in system management are needed to facilitate uptake of sustainable rice and agroforestry approaches. 9. The GoDR is committed to addressing land degradation and biodiversity loss through an ILM approach; however, poor territorial planning at local levels, and inadequate institutional coordination and technical capacities remain major challenges. Food security, poverty alleviation, and ecological conservation are inter-connected issues for sustainable development that require a holistic and integrated approach, linking agricultural practices, institutions, and policies with other landscape-scale activities.20 Furthermore, the management of water, land, biodiversity, and climate change are inextricably linked, but the management of these issues is often fragmented within governments, including in the DR, where the Ministry of Environment and Natural Resources (Ministerio del Medio Ambiente y Recursos Naturales, MARN), MAG, Ministry of Economy, Planning, and Development (Ministerio de Economía Planificación y Desarrollo, MEPyD), and others, all have responsibilities for these issues. In addition, at the local level, unarticulated decision-making by and among stakeholders and their lack of capacity are significant barriers for ILM. Due to gaps in technical capacities to develop, apply, and monitor land use plans at both the local and landscape-level, there is limited mainstreaming of environmental sustainability criteria in land use decisions, including those related to biodiversity, ecosystem services flow (including water), and climate change, among others. C. Higher Level Objectives to which the Project Contributes 10. The project is consistent with the World Bank Group's (WBG’s) strategic goals—to end extreme poverty and to promote shared prosperity with environmental, social, and fiscal sustainability. It is also fully aligned with the WBG’s Dominican Republic Country Partnership Strategy (CPS) for the period FY15- FY18, approved by the World Bank Board of Executive Directors on September 25, 2014, and revised in the Performance and Learning Review of the CPS considered by the same Board on January 11, 2018 (Report #89551), which extended the CPS period to FY19. The activities under this project contribute to building resilience through an integrated approach and improved natural resource management, which reflect one of 19BioArroz is MAG’s Rice Directorate, which implements the national extension program for rice producers, in place from 2017. 20Reed, J., Deakin, L. & Sunderland, T. What are ‘Integrated Landscape Approaches’ and how effectively have they been implemented in the tropics: a systematic map protocol. Environ Evid 4, 2 (2015). Page 15 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) the five strategic results areas of the revised CPS (Results Area 3: Supporting the Government in building resilience to external shocks). Furthermore, the project addresses the following key challenges for achieving more inclusive and sustainable growth, identified in the 2018 Systematic Country Diagnostic (SCD)21: (i) lack of investments in human capital; (ii) degradation of the country’s natural capital, mainly caused by a lack of territorial planning and natural resource management, and (iii) exposure to natural disasters. Finally, the project also contributes to the WBG’s corporate commitments on forests and climate change and complements the portfolio of interventions under the WBG Climate Change Action Plan 2021-202522 and the Climate Change Forest Action Plan (FAP)23, including its Focus Areas (Sustainable Forestry and Forest Smart Interventions) and Cross-Cutting Themes (Climate Change and Resilience, Rights and Participation, Institutions and Governance). It will also contribute to the implementation of REDD+ Readiness, the ER Program, and Agriculture, Forestry, and Other Land Use (AFOLU) interventions described in the DR’s 2020 Nationally Determined Contribution (NDC), all of which receive support from the WBG. 11. The project activities are aligned with Global Environment Facility (GEF)-7 Land Degradation (LD) and Biodiversity (BD) Focal Area objectives. Specific to BD, the project contributes to Focal Area Objective BD-1- 1 (Mainstream biodiversity across sectors, as well as landscapes and seascapes through biodiversity mainstreaming in priority sectors). Specific to LD, the project contributes to both Focal Area Objective LD-1- 1 (Maintain or improve the flow of agro-ecosystem services to sustain food production and livelihoods through Sustainable Land Management (SLM)), LD-1-3 (Maintain or improve flows of ecosystem services, including sustaining livelihoods of forest-dependent people through Forest Landscape Restoration (FLR)), and LD-2-5 (Create enabling environments to support scaling up and mainstreaming of SLM and LDN).24 It also complements the DR’s GEF-6 Project implemented by the United Nations Development Program “Mainstreaming Conservation of Biodiversity and Ecosystem Services in Productive Landscapes in Threatened Forested Mountainous Areas”, which promotes a landscape approach to the conservation of threatened ecosystems in the country’s mountain ranges. 12. The project forms part of the GoDR’s broader program (henceforth referred to as GoDR’s ILM Program) aimed at creating strategic coherence in forest and landscape interventions. These are conducted via an integrated development model that advances sustainable economic opportunities and environmental management by coordinating institutions, policies, land use practices, and stakeholders. The project is expected to contribute to the GoDR’s ILM Program, which includes government, civil society, and private sector interventions to support ILM and LDN. This ILM Program includes national and international commitments related to the environment, land use, and climate change.25 With regards to the GoDR’s 21 Dominican Republic - Systematic Country Diagnostic (English). (06/30/2018). Washington, D.C.: World Bank Group. http://documents.worldbank.org/curated/en/980401531255724239/Dominican-Republic-Systematic-Country-Diagnostic 22 World Bank Group. 2021. World Bank Group Climate Change Action Plan 2021–2025 : Supporting Green, Resilient, and Inclusive Development. World Bank, Washington, DC. https://openknowledge.worldbank.org/handle/10986/35799 23 World Bank Group. 2016. World Bank Group Forest Action Plan FY16–20. World Bank, Washington, DC. World Bank. https://openknowledge.worldbank.org/handle/10986/24026 License: CC BY 3.0 IGO 24 Furthermore, the project will also report on GEF-7 Core Indicators 3.1 (Area of degraded agricultural land restored), 4.1 (Area of landscapes under improved management to benefit biodiversity), 4.3 (Area of landscapes under sustainable land management in production systems), 6.1 (Carbon sequestered or emissions avoided in the AFOLU sector, and 11 (Number of direct beneficiaries disaggregated by gender as co-benefit of GEF investment). 25 Including the END-2030; DR’s LDN targets under the UNCCD addressed by the PAN-LCD; UNCBD and the Aichi Biodiversity Targets under Strategic Goal A (address the underlying causes of biodiversity loss by mainstreaming biodiversity across government and society; targets 1 and 4), Strategic Area B (reduce the direct pressures on biodiversity and promote sustainable use; targets 5, 7, and 8) and Strategic Area E (enhance implementation through participatory planning, knowledge management Page 16 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) targets under the UNCCD, the project incorporates LDN principles26 to deliver ‘win-win’ outcomes whereby gains in natural capital and ecosystem services contribute to improved and more sustainable livelihoods, increased resilience to climate change, and reinforcement of responsible and inclusive governance of land. D. Yaque del Norte and Yuna Watersheds 13. The project will be implemented in Yaque del Norte and Yuna watersheds, known conceptually as the “Madre de las Aguas” or “Mother of Waters”, which are part of the Central mountain range and connect a biologically diverse natural and productive landscape extending from mountains to reefs. The Yaque del Norte river basin is a diverse landscape hosting a range of different ecosystem services essential for productive sectors and livelihoods, including for the nation’s second largest population center. This basin connects the country’s most prominent protected areas and wetlands27, and is the source of most of the DR´s rivers, supplying water to nearly 80 percent of the country’s people, as well as to the neighboring country of Haiti, which shares the Hispaniola island. Due to its ecological and economic importance, the GoDR aims to improve land use planning and water availability in Yaque del Norte as part of its broader ILM Program. The GoDR has established and financed a basin-level secretariat (Presidential Decree 57-18): The Presidential Commission for the Yaque del Norte River Basin (Cuenca del Río Yaque del Norte, CRYN), led by the regional NGO Plan Sierra, to plan, coordinate, and monitor land use in the basin. 14. The Yuna watershed contains the second most important river in the country (the Yuna River); it is a priority watershed identified by MARN and the strategic cornerstone of this GEF project. The Yuna basin is one of the largest watersheds in the country, encompassing 5,265 km2 spanning 12 protected areas, six of which have national park status28, and hillside agriculture and livestock zones, with an estimated population of approximately 2.1 million inhabitants, representing 22.6 percent of DR´s population. While the Yaque del Norte watershed has been a focus of the GoDR’s ILM Program, the Yuna basin does not have a similar governance structure, creating challenges for landscape-level planning, coordination, and monitoring within Yuna and across the two contiguous watersheds. In addition, both watersheds lack baseline data and monitoring procedures for hydrologic balance, biodiversity, and agricultural impacts. 15. Due in part to their agricultural importance, both the Yaque Norte and Yuna basins have been significantly degraded as a result of agricultural practices that continue to pose threats to natural ecosystems, ecosystem services, and biodiversity. On slopes, subsistence agriculture causes soil erosion, pollution of downstream water resources, reduced water filtration, and increased flooding. At intermediate and lower elevations, inefficient rice irrigation systems increase water demand, generate GHG emissions, and contribute to soil and water contamination through salinization and increased fertilizer and pesticide runoff.29 A common issue among these challenges and impacts is the encroachment of agriculture on natural and capacity building; targets 14 and 15); wetlands commitments under the Ramsar Convention on Wetlands of International Importance especially as Waterfowl Habitat; the fulfillment of the United Nations Sustainable Development Goal #15 (promoting sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, halt and reverse land degradation, and halt biodiversity loss); and the mitigation of GHGs under the NDC, including for the AFOLU sector. 26 The project adopts the land degradation response hierarchy of “Avoid, Reduce, Reverse” by means of (i) focusing on improving enabling conditions, governance, coordination, and monitoring of land use management at various hierarchical levels involving multiple stakeholders (Avoid); (ii) emphasizing increased sustainability and productivity of rice production systems (Reduce); (iii) and using agroforestry systems and active ecosystem restoration to restore and reduce ecosystem services (Reverse). 27 https://ambiente.gob.do/cuencas-hidrograficas-/yaque-del-norte/ 28 Ibid. 29 https://www.crc.uri.edu/download/14_LevelOneProfileDraft_SamanaBay_2004.pdf. Page 17 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) habitats and water pollution, both of which result in land degradation and habitat loss and pose significant threats to biodiversity conservation and management, especially in sensitive riverine, coastal and marine ecosystems. More details on the project area and site selection criteria for its activities can be found in Annex 2. II. PROJECT DEVELOPMENT OBJECTIVES (PDO) A. PDO The objective of the project is to strengthen integrated landscape management in targeted watersheds in the Dominican Republic. B. PDO-Level Results Indicators 1. Area of productive land under improved practices to enhance climate resilience and environmental sustainability as a result of the project (excluding protected areas) (Hectares); disaggregated by lower watershed areas (mainly rice production) and upper watershed areas (mainly restoration and agroforestry) 2. Farmers adopting climate-smart and sustainable rice production practices as a result of the project (Number; reports will be disaggregated by gender) 3. Area of degraded agricultural land restored as a result of approved sub-projects (Hectares) 4. Area of landscapes under approved management plans to benefit biodiversity as a result of the project (Hectares) III. PROJECT DESCRIPTION A. Project Components 16. The proposed project will address challenges for LDN and biodiversity conservation, namely inter- sectoral coordination, governance, and capacities; adoption of sustainable agricultural practices; and restoration of critical landscapes. Project activities are based on participatory, multi-sector ILM, and LDN approaches, which consider upstream and downstream causes and impacts of land degradation across priority areas within the targeted watersheds. The project will benefit both Yaque del Norte and Yuna watersheds and will effectively target resources to enable the uptake and scaling-up of successful ILM approaches. More details on the project’s design and components can be found in Annex 2. Component 1: Enabling Environment for Integrated Landscape Management and Land Degradation Neutrality (GEF US$733,528) 17. The objective of this component is to develop an enabling environment for ILM-LDN30 through two complementary and mutually reinforcing approaches: a) Improving local governance, capacities, cooperation, and dialogue in two mancomunidades31 to forge institutional agreements, commitments, and better planning of the watersheds; and 30 Training and capacity building activities under the Project will incorporate the checklist for LDN transformative projects and programs, developed to help country‐level project developers and their technical and financial partners to design effective LDN projects, tools, and resources for LDN implementation in the UNCCD Knowledge Hub. 31 The innovative approach of working with associations of municipalities through mancomunidades has been strongly encouraged by the GoDR, based on the positive results and impact of the Madre de las Aguas mancomunidad and the Presidential Commission for the CRYN, hoping to use this project to scale up this approach. Mancomunidades are legally Page 18 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) b) Developing an information base, monitoring system, and knowledge platform for tracking progress, enabling data-informed decision making and adaptive management, and the dissemination of information to a variety of users. 18. Sub-Component 1.1. Promote a Governance Structure for Planning and Dialogue on Integrated Landscape Management. The objective of this sub-component is to build capacities and strengthen the country’s institutional architecture for land use planning at the micro-basin, sub-basin, and basin levels in the Yaque del Norte and Yuna Watersheds.32 This will be done through analyses and training to clarify and improve ILM at the watershed level, for example analyzing permit conflicts, clarifying overlapping roles and responsibilities for land use and management, and identifying potential public-private partnerships (PPP). These activities will benefit watershed management more broadly in Yaque del Norte and Yuna. 19. This sub-component will also support the establishment of ten micro-basin committees, three representative sub-basin organizations, and a river basin council or committee (referred to collectively as Basin Committees33) to facilitate dialogue, decision-making, communication, and knowledge sharing for land use planning and management at the landscape level. These Basin Committees will include groupings of neighboring municipalities and multi-stakeholder groups such as water users and regulators at various levels to facilitate collaboration.34 Specifically, this sub-component will support the development of operational guidelines for Basin Committees, participatory processes, and analyses for ILM in each Committee’s jurisdiction, and monitoring, communications, and knowledge management of good practices and lessons learned by the Basin Committees, including knowledge sharing among Basin Committees and between Yaque del Norte and Yuna. The Basin Committees will be developed primarily in Yuna due to the existence of CRYN in Yaque del Norte. 20. Sub-Component 1.2. Strengthen capacities for land-use planning and monitoring. The objective of this sub-component is to improve the capacities and inputs needed for informed ILM decision-making based on information gathering and sharing by the Basin Committees. Critical baseline information will be generated to better inform biodiversity and environmental considerations in Yaque del Norte and Yuna, including: i) a Social and Environmental Characterization at the regional landscape level to determine the impacts and needs of land management and environmental services with inputs from provinces, municipalities, and local communities; and ii) a biodiversity baseline study. 21. The outputs of these baseline analyses will provide direction for the development of an Environmental Agenda for Yaque del Norte and Yuna watersheds, which will document the collective vision of the future of each river basin as expressed by its stakeholders, including formal roles, responsibilities, commitments and coordinated actions, which will also be gender sensitive. Specifically, this incorporated in municipal law 176-07. The selection of mancomunidades that will develop Strategic Plans for Mancomunal Territorial Development will be informed by the Social and Environmental Characterization under Subcomponent 1.2. 32 Specifically, this sub-component will strengthen capacities for ILM through MARN’s Vice Ministry of Soils and Water, Vice Ministry of Protected Areas and Biodiversity, and Ministry Provincial Directorates; the UNCCD Inter-institutional Technical Group (GTI); MAG; and MEPyD’s National Water Coordination Board. 33 The creation of Basin, Sub-basin and Micro-basin Committees is regulated by MARN’s resolution 0022-2020. These are usually created as NGOs to pursue the sustainable use and management of natural resources for the provision of ecosystem services (e.g. freshwater), among other objectives. Land use and water management are currently embedded in existing statues of Basin Committees. Basin committees act as lobbying structures and are able to capture both public and private funding. 34 Participation of women in these Basin Committees will be facilitated through sensitization workshops for men and women on creating gender safe spaces, reducing cultural marginalization of women, encouraging female leadership, and promoting the safety and security of women participating in agricultural activities. Page 19 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) sub-component will support the drafting, participatory processes for its formulation and approval, and communications and dissemination activities for the Environmental Agenda. 22. From the Environmental Agenda, Strategic Plans for Territorial Development (Planes de Ordenamiento Territorial Mancomunal) will be developed specifically for two mancomunidades35 facing emblematic environmental and degradation issues identified by the Environmental and Social Characterization. The Strategic Plans will be the first of their kind in DR to support ILM at the mancomunidad level and, once developed, will enter into force by Municipal Ordinance. Specifically, the project will support a consultancy to draft the Strategic Plans; meetings, workshops, and consultations to agree on the Plans; and communication and dissemination activities.36 Moreover, the project will also support the establishment of Mancomunidad Planning Offices37 responsible for implementing and updating the Strategic Plans for Territorial Development, especially, considering that these Plans will be novel for DR. These offices will benefit from the training supported by the project, including for governance and ILM-LDN. 23. Finally, this sub-component will support the development of a public-accessible Knowledge Platform to monitor and track the long-term impacts of the Environmental Agenda, Strategic Plans for Territorial Development, and ILM approaches tested in Yaque del Norte and Yuna watersheds. The platform will make such information available to stakeholders and the general public. Information will be disaggregated by gender where relevant and possible. Component 2. Scaling up sustainable rice production systems to improve productivity, water use efficiency, and biodiversity conservation (GEF US$1,383,965) 24. The objective of this component is to demonstrate approaches that reduce the negative environmental impacts associated with rice production, while improving its profitability in the middle and lower Yuna watershed.38 To maximize resource efficiency, the component will focus in Yuna area to complement and scale-up activities being tested in Yaque del Norte under the GoDR’s ILM Program.39 25. Sub-Component 2.1: Identify and develop environmental and social baselines for sustainable rice demonstration plots. This sub-component will provide support to identify sustainable rice production demonstration plots in Yuna and to establish baselines for monitoring the environmental and social impacts of these practices on environmental and social variables, including, inter alia, the financing of equipment (including, inter alia, sampling equipment and metering wells) for the scoping, establishment, and monitoring of demonstration plots. This will entail: 35 The selection of the two mancomunidades will involve a discussion with all Municipal governments and the regional office of the Dominican Federation of Municipalities (Federación Dominicana de Municipios, FEDOMU). 36 In addition, Directorate of Environment and Natural Resources Information (DIARENA) will produce the cartography needed for these activities. 37 The GoDR will provide parallel staff and other in-kind resources to support the offices. Mancomunidad Planning Offices will be part of the governance structure of the mancomunidades and will coordinate directly with MEPyD’s regional planning officers. 38 The component will be led by MAG, with the collaboration of MARN, other relevant ministries, IDIAF, the private sector, local NGOs involved in the sustainable management of rice production, and local rice grower organizations. 39 Sites for implementation of activities under Component 2 will be selected based on agreed criteria, including willingness of producers to adopt sustainable rice production practices and the outcomes of analyses supported under this component. Page 20 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) a) Siting sustainable rice production demonstration plots.40 b) The establishment of baseline data for rice production in the demonstration plot sites.41 This analysis will inform the development of guidelines for sustainable rice production that will be tested in the demonstration plots. 26. Sub-Component 2.2. Sustainable rice production demonstration plots. This sub-component will support the establishment and maintenance of approximately 130 ha of demonstration plots in the Yuna watershed, as identified under Component 2.1, to validate and disseminate sustainable rice production technologies, including through: (a) management of the demonstration plots; (b) monitoring agricultural and environmental indicators; (c) soil fertility, pesticide, and metal content detectors and lab analysis equipment; (d) surveys and validation workshops; (e) improvements in extension services for sustainable rice production; (f) dissemination of good practices for the carrying out of activities to increase and promote uptake of sustainable rice production practices; and (g) coordination among demonstration plots to share lessons learned and ensure consistent project implementation. Component 3: Restoration of biodiversity and hydrological services in critical ecosystems (GEF US$ 1,582,489) 27. The objective of Component 3 is to expand environmental and climate-smart land use practices to enhance ecosystem services, LDN, forest management and biodiversity in priority areas.42 This will be done through, inter alia: (a) the development of the criteria and guidelines for proposals and selection of sub-projects; (b) the carrying out of workshops and the provision of technical assistance for the preparation of sub-project proposals; (c) the carrying out of five sub-projects; and (d) training and technical support for, inter alia, sub-project management and implementation, gender inclusion and monitoring. Through a competitive process, sub-projects will be selected that provide incentives for farmer adoption of shade- grown coffee and cocoa agroforestry systems; restoration and protection of riverbanks, wetlands, and riparian forests; restoration of degraded and fragmented forest ecosystems; and diversification of environmentally sustainable livelihoods (e.g., beekeeping or other non-timber forest products) that contribute to ILM and LDN. Component 4: Project Management and Monitoring & Evaluation (GEF US$363,945). 28. The objective of this component is to facilitate project management and coordination among the various institutions and partners involved in the implementation of the above components. This component will provide support to: (a) facilitate project management and coordination for the implementation of the project, including the preparation of Annual Operations Plan (AOP) and budget; fiduciary aspects, which includes financial management (FM) and procurement; human resource management; safeguards compliance monitoring; monitoring and evaluation (M&E); knowledge management and sharing; and the implementation of strategies for communication and stakeholder 40 Based on analyses conducted under Component 1 related to soil, biodiversity, water, and other environmental services, as well as criteria such as the willingness and commitment of producer organizations to participate, the potential to engage small and medium-sized and women farmers, and cost-effectiveness (e.g. geographic proximity of different plots). 41 Including variables such as soil type and fertility, agricultural inputs and response (fertilizers, pesticides, etc.), climatological data, pest incidence (insects, disease, weeds), water consumption and quality, biodiversity in plots and downstream, among others, together with other critical information such as institutional arrangements and authorities. 42 Areas in Yaque del Norte may be included depending on the finalization of selection criteria for sub-projects in the Project Operational Manual (POM). Focus will be given to upper watershed areas, as appropriate, to improve downstream outcomes. Page 21 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) engagement, including Steering Committee (SC) meetings and national level events as needed; and (b) finance the project’s annual audit. B. Project Cost and Financing 29. The project is financed by US$4.06 million from GEF Biodiversity (US$1.63 million) and Land Degradation (US$2.44 million) focal areas. The project combines GEF grant funds with a total of US$16 million43 counterpart contributions (parallel financing) from MARN (US$7 million in-kind and US$1.5 million investment mobilized), MEPyD (US$0.5 million in-kind), IDIAF (US$6 million in-kind), and beneficiary rice producers (US$0.6 million in-kind)3 C. Project Beneficiaries 30. The direct beneficiaries of this project are 3,275, including at least 30 percent women. This specifically includes smallholder farmers, communities, institutional personnel at all levels of government, as well as project staff who benefit from capacity building and training and policy development, and participants who receive technical or financial assistance in Component 3 sub-projects. Component 1 is expected to impact 306,900 ha (70 percent of the area of both mancomunidades) via the promotion of improved governance, management, and the ILM-LDN approach, while benefiting 400 people through capacity building for ILM. Under Component 2, sustainable rice production technologies will be validated on 130 ha, while 65 technicians and extensionists and 1,850 rice farmers will be trained in the application of sustainable land use practices in production systems, which includes 180 producers who will receive training on gender inclusion. It is expected that 1,200 farmers will take up sustainable rice production on a total of 3,600 ha, equivalent to 3.1 percent of the total area of annual crops in the watershed, which will be leveraged by further uptake supported by Plan Sierra. Under Component 3, it is expected that 5 sub-projects will be approved, implementing 1,080 ha of agroforestry and 210 ha of restoration with 960 beneficiaries, including 360 people who will receive training on gender inclusion in the sub-projects. In addition to these communities, farmers, and technicians, several governmental and non-governmental institutions will benefit from capacity building and technical assistance, including MARN, MAG, MEPyD, IDIAF, National Institute for Hydraulic Resources (Instituto Nacional de Recursos Hídricos, INDRHI), BioArroz, Presidential Commission for the CRYN, Inter-institutional Technical Group (Grupo Técnico Interinstitucional, GTI), and the Dominican Federation of Municipalities (Federación Dominicana de Municipios, FEDOMU). Moreover, the project will contribute to the restoration of critical habitat and corridors for biodiversity, and will benefit seven Key Biodiversity Areas, seven National Parks, and 10 endangered species, while also improving the health of ecosystems and reducing threats in the project area. 31. Expected indirect beneficiaries of the project include the agricultural producers, local communities, and municipal governments within Yaque del Norte, who do not participate directly in the project’s activities. In Yuna, there are approximately 2,000 producers of irrigated rice, four irrigation boards, and one cooperative; in Yaque del Norte, approximately 30,000 irrigated rice producers, three irrigation boards, and two cooperatives. In addition, there are about 635 dryland farmers in Yuna and 696 in Yaque del Norte who produce a variety of crops, including rice, coffee, cocoa, and livestock, and are represented through unions, irrigation boards, crop cooperatives, or peasant unions. Government and NGOs are another group of actors with a role and interest in governance approaches to integrate the management of the watersheds and ensure food security, extension services, and soil and water conservation. In addition to those directly 43 The total co-financing is pending confirmation and it is expected to be higher. Page 22 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) benefitting (cf. above), the following are expected to indirectly benefit from the project: the Biodiversity Round Table, the Dominican Institute for Coffee (Instituto Dominicano del Café, INDOCAFE), the Cocoa Commission, Plan Sierra, producer associations, and irrigation boards. The project includes measures to increase the uptake of ILM approaches, including for rice production, agroforestry, and restoration by these indirect beneficiaries. 32. In general, the 2.45 million inhabitants of the Yaque del Norte and Yuna watersheds will indirectly benefit from the improved environmental services that are expected to result from this operation. These populations will also benefit from the enhancement of land use governance systems, land use planning and technical assistance, contributing to reduced erosion, improved productivity, and better water management. 33. Private sector engagement and linkages. The private sector is engaged as a parallel in-kind financier and stakeholder. Under Component 1, the private sector will participate in the development of the governance structure, alongside government agencies and civil society representatives, with the aim of establishing a common vision for development in the Yaque del Norte and Yuna watersheds. The participation of private sector actors, such as rice, coffee, and cocoa producer stakeholders in the Basin Committees will be critical in the development of the Environmental Agenda and Strategic Plans for Territorial Development, and for the implementation of better land management, conservation, and monitoring of productivity and ecosystem services. Participation of small and large rice producers as parallel in-kind financiers and beneficiaries of capacity building in Component 2 will be essential for validating sustainable management practices and disseminating results. As stakeholders, private rice producers have a vested interest in reducing production costs and increasing profitability as a response to greater competition resulting from tariff reductions under the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA). A similar role for private sector producers of coffee and cocoa is envisioned in Component 3 where producer groups may be direct implementors and co-financiers in sub-projects, beneficiaries of technical assistance, as well as disseminators of information and promoters of sector development. D. Lessons Learned and Reflected in the Project Design 34. The current project builds upon the DR´s implementation and experience of related projects, including projects with the GEF and the World Bank (WB). Concrete examples of knowledge transfer and lessons learned from other projects include: the methodology and protocols for the development of the Social and Environmental Characterization of the Watershed and Environmental Agenda of Component 1; tools and resources from the UNCCD44 for transformative LDN implementation; capacities for participatory landscape management developed under the ER Program; and broad participatory diagnoses of land and forest management, problems, and interventions developed by MARN, community, civil society, and private sector stakeholders in the Northern Macro Region of the country which includes the project area. The project will leverage this information and knowledge to improve territorial planning, agricultural sustainability, and ecosystem restoration in the Yaque del Norte and Yuna watersheds. The project also incorporates information and feedback from Agrofrontera´s and Counterpart International´s experience with sustainable rice production, as well as eight GEF and the National Fund for Agricultural Technology´s sustainable rice production pilots. Prior experience has also been incorporated into the project´s risk mitigation measures 44Especially the Scientific Conceptual Framework for LDN, concepts from the land degradation neutrality checklist for LDN Transformative Projects and Programs, and the tools and resources for land degradation neutrality implementation in the UNCCD Knowledge Hub. Page 23 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) where a wide and integrated stakeholder approach, resource allotment and budgeting, conflict management, targeted training programs, and active gender inclusion will help to reduce social, political, and technical risks. Box 1. Relevant GEF and World Bank Projects in the DR The GEF has funded the following projects that are relevant to the current project: • Biodiversity Conservation and Management in the Coastal Zone of the Dominican Republic (GEF Grant: US$3 million) • Re-engineering the National Protected Area System in Order to Achieve Financial Sustainability (Total Cost: US$11.98 million; GEF Grant: US$3.2 million) • Demonstrating Sustainable Land Management in the Upper Sabana Yegua Watershed System (Total Cost: US$30.1 million; GEF Grant: US$4.4 million) • Mainstreaming Conservation of Biodiversity and Ecosystem Services in Productive Landscapes in Threatened Forested Mountainous Areas (Total Cost: US$62.4 million; GEF Grant: US$8.2 million) • Promoting Climate-Smart Livestock Management in the Dominican Republic (Total Cost: US$9.7 million; GEF Grant: US$1.5 million)Resilient Agriculture and Integral Management of Natural Resources in the River Basins of Yaque del Norte and Ozama-Isabela Project (P163260) • National Strategy for Reducing Emissions for Deforestation and Degradation (P151752) • FCPF Carbon Fund Dominican Republic Emissions Reduction Program (P161182) IV. IMPLEMENTATION A. Institutional and Implementation Arrangements 35. The institutional arrangements for the project will be multi-sectoral, to mirror the activities to be implemented. The institutional arrangements include a Steering Committee (SC), an Advisory Committee (AC), a Project Director, and a Project Implementation Unit (PIU). The SC will be composed of MARN (Chair), MAG, and MEPyD. The SC will make strategic decisions to guide the implementation of the operation, as well as approve the AOP and the budget. The AC will include technical officers from different departments within MARN (Protected Areas and Biodiversity, Soils and Water, Forest Resources, International Cooperation, Social Participation and Gender); MAG (Vice-Ministries of Planning and Extension, BioArroz, and the Agroforestry Unit); MEPyD (Land Use Planning Directorate); and others, such as the IDIAF, INDRHI, CRYN Presidential Commission, GTI, FEDOMU, Biodiversity Round Table, Food and Agriculture Organization of the United Nations (FAO), Inter-American Institute for Cooperation on Agriculture (IICA), INDOCAFE, Cocoa Commission, Plan Sierra, producers associations, and irrigation boards. The AC will ensure coordination and synergies among the different stakeholders involved, according to the ILM approach, provide inputs for the AOP and the budget to be approved by the SC, and assist the PIU to define the selection criteria for sub-projects, and will hold quarterly meetings. The Project Director is responsible for carrying out the commitments to the UNCCD, and therefore to the GEF Land Degradation focal area. Institutional arrangements will be formalized between MARN, MAG, and MEPyD through a signed inter- institutional agreement in line with the Project Operational Manual (POM) indicating commitment to project implementation, as a condition of effectiveness of the grant agreement. 36. MARN will be the implementing agency and designated Recipient of the GEF resources. Project implementation will also involve MAG and MEPyD. The POM will reflect the project’s institutional and implementation arrangements, which have been confirmed in principle to ensure there are adequate staff resources within the watersheds to implement the project, project management costs are sufficient, and Page 24 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) clarifying roles and responsibilities. The preparation and adoption of the POM is a condition of effectiveness of the grant agreement. 37. The PIU will oversee day-to-day project implementation and will be responsible for generating technical inputs for each component. MARN will host the PIU and will be responsible for administration, reports, audits, fiscal and legal aspects; compliance with fiduciary and procurement procedures; as well as guidance, necessary training, supervision, and reporting on the implementation of the WB's Environmental and Social Standards (ESSs), the Environmental and Social Management Framework (ESMF), Environmental and Social Management Plans (ESMPs) and its instruments, and the Environmental and Social Commitment Plan (ESCP). The PIU will be led by a Project Coordinator, who will report to the Project Director and interact with the AC through them. The Project Coordinator will oversee a Regional Coordination Office, established in one of MAG´s facilities in Monseñor Nouel, which is easily accessible to both Yuna and Yaque del Norte watersheds. The Project Coordinator will also have under their leadership a group of Technical Personnel, including a Social Specialist, Environmental Specialist, Procurement Specialist, and Financial Specialist. MARN will provide support to the PIU in all matters related to administrative, financial, and logistical issues. In addition, a Technical Support Group, composed of specialists from MARN, MAG, and MEPYD, will provide support in addressing issues related to biodiversity, forest resources, soil conservation, water management, sustainable livelihoods, environmental management and education, social inclusion, gender, communications, and legal matters. The PIU operational costs (e.g. transport, offices, desks, among others) will be co-financed by MARN and MAG. 38. The PIU’s role in implementation also includes managing the sub-projects under Component 3. Together with the AC, the PIU will formalize the selection criteria and prepare the terms of reference for calls for sub-project proposals. The selection of sub-projects will be conducted following the provisions of Community-Driven Development (CDD) and procurement for sub-project beneficiaries will be completed by the PIU following the provisions of the WB Procurement Regulations. The POM will describe in detail the responsibilities of the PIU in this aspect, from sub-project selection to procurement and implementation. The Technical Support Group will assist the PIU, with specialists from the ministries involved to oversee and monitor sub-project implementation. Budget estimations for Component 3 have provisions for technician oversight and monitoring activities related to the implementation of the sub-projects. 39. Knowledge management and experience-based learning. The PIU will be responsible for ensuring that there are strong links between M&E, knowledge management, and strategic communication. The information generated by the M&E system through baseline studies and project monitoring will be captured in the publicly accessible Knowledge Platform, created under Sub-Component 1.2. The M&E evaluation system will also generate other knowledge products and services that will be disseminated among project beneficiaries through a wide range of communication channels, using user-friendly communication tools. During project implementation, MARN will ensure continued learning exchanges among existing projects, including those under GEF-6, through the project´s AC. B. Results Monitoring and Evaluation 40. M&E arrangements. To ensure the correct implementation toward achieving project objectives as described in the Theory of Change (see Annex 6), the PIU will be primarily responsible for overall monitoring, with guidance and support from the Project Director. Technical reports will be prepared and presented to the SC and the WB every six months. The project’s M&E system includes an accountability mechanism comprising stakeholder engagement, a mid-term review, and a final evaluation. The project will ensure that stakeholders/beneficiaries have access through various channels to timely, relevant, and unambiguous Page 25 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) information about the project’s M&E findings and are also able to incorporate their views in the project’s review and decision-making process. This will be accomplished through the Basin Committees, consultations, and stakeholder engagement events during project implementation, as outlined in the Stakeholder Engagement Plan (SEP). Results of these engagements will be incorporated in the Environmental Agenda and the Strategic Territorial Development Plans as well as adaptive management measures, as evidenced in the Results Framework, which includes an indicator on the incorporation of stakeholder feedback in the project throughout its implementation. Accountability will also be facilitated by the publicly accessible Knowledge Platform, as well as the Grievance Redress Mechanism (GRM), details of which can be found below. C. Gender 41. During project preparation, a preliminary analysis of gender issues relevant to the project was conducted (Refer to Annex 4). This analysis built upon the gender work undertaken during the preparation of the REDD+ Strategy to better identify gender needs, including conditions of women in terms of access to resources, services, and opportunities, and strategic gender interests in terms of decision-making and the identification of opportunities to incorporate a gender focus in existing programs and initiatives. Results of the diagnosis indicate that 40 percent of rural women are affected by poverty; one of the highest rates among population groups in the country. Their economic empowerment and participation in economic activities in rural areas are challenged by land rights, significant participation in non-remunerated activities, and low educational endowments. 42. The project has developed a Gender Action Plan (GAP) that details specific activities through which the project will address gender gaps in the project watersheds. To better incorporate considerations of gender, the project will support and monitor women’s participation in all project activities, including through specific indicators, and will provide targeted capacity building for women at both governance and production levels: a) Component 1 will include the participation of women in decision-making processes in managerial positions and decision-making at various levels. b) Components 2 and 3 will promote improving the capacity and participation of women as producers and entrepreneurs in agribusiness. D. Grievance Redress 43. The project has developed a GRM. This system, known as the Mechanism for Attention to Complaints and Suggestions (MACS), is consistent with Law 176-06 (National District and Municipalities Law), END-2030 (which established a cross-cutting policy for citizen participation in the design and implementation of policies, programs, and projects), as well as WB’s Environmental and Social Framework (ESF). It will receive and effectively respond to complaints and suggestions that may arise during the execution of the Project, and generate lessons learned to improve implementation. MARN is directly responsible for the management of the MACS through the Department of Social Participation with support from the PIU. It will be supported by the Social Management Unit of MAG´s Vice Ministry of Planning. 44. Use of this system is open to all stakeholders affected by the project, as well as the general public, and will not impede access to other judicial or administrative remedies. Suggestions or complaints can be submitted via community suggestion boxes, email, telephone, Short Message Service (SMS) and WhatsApp, in writing or in person, presented in offices of community organizations, mayors’ offices, provincial offices of MARN, regional agricultural directorate offices, and the project’s regional office. MACS will address the Page 26 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) suggestions and complaints received, anonymous or otherwise, with transparency, speed, and efficiency, without cost or compensation. MACS will also inform project-affected parties about the resolution process for cases filed and will also record the responses to all complaints, comments, or suggestions received in an electronic registry. 45. The implementation of this MACS will be monitored and evaluated periodically during the execution of project activities. Monitoring will be done by telephone, email and/or field visit by MARN representatives. On a monthly basis, the PIU will prepare a report on the number of reports and the nature of the cases presented, as well as the status of the responses. Quarterly reports to the WB will also be prepared and will contain information on the nature of the cases submitted and the response status. This information will also be incorporated into the project's M&E system and Knowledge Platform. E. Sustainability 46. The overall sustainability of the outcomes of the project is facilitated by generating stakeholder participatory structures and processes, capacities, and knowledge that will continue to exist beyond the timeframe of the project. The promotion of participatory processes will be guided by the SEP. The Basin Committees, which are participatory governance structures, will aid in coordinating long-term ILM by serving as a vehicle for dialogue and commitments for watershed-wide actions that maintain a balance between social, economic, and environmental needs. In addition to the Basin Committees, via extension, MARN and MAG will disseminate lessons learned throughout Yaque del Norte and Yuna watersheds and to other areas of the country. The outcomes of the project are also expected to be sustained through the public-private partnership models being developed under each component. By engaging the private sector in governance and implementation of sustainable rice production, agroforestry, restoration, and other sustainable livelihood approaches, the project’s outcomes and lessons learned can ideally be scaled up and sustained in the absence of government or donor financing. In addition, the public-private nature of the Environmental Agenda, and its related signed declarations, safeguard the continuity of the process through times of political change. 47. ILM and productive skills and capacities will be developed through the incorporation of capacity building in all project components, implementation levels, and stakeholder groups, including institutions, authorities, communities, organizations, producers, and women. Capacity building activities, whether focused on improving coordination and management of land use, sustainable rice production, agroforestry, or restoration, are intended to sustain skills and knowledge over the long-term. This is especially clear in Component 2, where extensionists will be trained to disseminate knowledge and good practices beyond the lifetime of the project. Also, the training and multi-stakeholder processes involved in developing the Environmental Agenda will enhance the capacities of municipal governments and provincial offices to train a new generation of technicians to understand the relationship of local actions on the greater ecosystem. 48. The project will contribute to building a knowledge base, through a participatory approach, for long- term sustainability of ILM and LDN. Through its M&E system and the public Knowledge Platform, the project will address critical information gaps related to environmental and production system characteristics and responses. This information will also serve as a basis for decision-making as well as long-term adaptive land management, M&E, capacity-building, awareness, and future expansion of the Knowledge Platform to other watersheds in DR. A strategy will be developed during implementation to ensure ownership and continuity for data maintenance and use, and to systematize and disseminate lessons learned from the project implementation. Page 27 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) V. KEY RISKS A. Overall Risk Rating and Explanation of Key Risks 49. The overall risk rating for the project is Substantial. Key risks include: Risk Categories Rating Political and governance Low Macroeconomic Low Sector Strategies and Policy Substantial Technical design of Project Moderate Institutional Capacity for Implementation and Sustainability Substantial Fiduciary Moderate Environmental and Social Substantial Stakeholders Moderate Other Substantial Overall Substantial 50. Sector Strategies and Policies (Substantial). Conflicting land use policies persist in the DR, resulting in unsustainable land use. For instance, MAG policies and instruments to finance the agricultural sector lack environmental criteria, consequently affecting the sustainability of ecosystem services. The uncertainty of the full range of impacts of the global COVID-19 pandemic, including the availability of resources to implement policies that could enhance environmental outcomes of the agriculture sectors, may also affect priorities during the lifetime of the project. This risk is partially mitigated through the integrated approach the project will take to watershed management in two critical watersheds in the country, thereby testing whether policies, interests, and priorities can be balanced and coordinated to deliver economic, environmental, and inclusive outcomes. Multi-sectoral decision-making bodies, including the Basin Committees, will provide space for strengthening priorities and policies that at times conflict. The residual risk is substantial given these mitigating measures. The landscape approach is a fairly new concept adopted by DR, and it may take time for all sectors involved in the project to make decisions with this approach top of mind. 51. Institutional Capacity for Implementation and Sustainability (Substantial). Although MARN and MAG have a track record in designing and implementing natural resource management and agricultural policies and programs, their institutional ability to lead a multi-sectoral project is relatively weak and will need important efforts to build the capacity within these institutions. To address this issue, multi-sectoral coordination will build on existing and effective inter-institutional governance bodies, such as those created in Yaque del Norte. The project will further rely on MEPyD’s experience as the entity that oversees territorial planning and coordinates across ministries. Within the government, the environmental sector, led by MARN, has traditionally had limited influence over other sectors and ministries. However, the project has been successful in establishing coordination channels between MARN, MEPyD, and MAG during its preparation, which are expected to continue during implementation, including through multi-sectoral institutional arrangements and the Basin Committees to be established. Therefore, the leadership of MARN, with the assistance of the SC, will enhance the coordination mechanisms for sectors and government entities to pursue the objective of the project. The residual institutional risk is substantial after taking into account these mitigating measures provided the current capacity of MARN to lead on multi-sectoral projects. Page 28 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) 52. Environmental and Social (Substantial). The overall environmental and social risk classification of the project is substantial. The environmental risk classification is considered to be Moderate due to the small- scale investments in sustainable rice production and restoration activities. Key environmental risks include: i) loss or conversion of natural and semi-natural vegetated land to other types of land cover classes; ii) water overuse for seedling production in nurseries and sustainable rice production; iii) introduction of invasive species through restoration activities; iv) contamination due to the use of agrochemicals and pesticides in sustainable rice production and agroforestry systems; v) site-specific impacts from small-scale infrastructure and rehabilitation/refurbishment works related to restoration and/or coffee and cacao production; and vi) workforce exposure to Occupational Health and Safety (OHS) hazards while using machinery or managing hazardous substances. The social risk classification for the project is Substantial. Key risks and impacts include: i) project workers’ exposure to the COVID-19 virus and transmission to communities, ii) transmission of the virus within communities and beneficiaries, especially during workshops, iii) economic displacement due to access restrictions as part of Component 3 that could impact vulnerable and resource- dependent groups, iv) conflicts over competing interests and demands of different land and water users, and iv) the need to consider tradeoffs between stakeholder interests. To address and mitigate these risks and impacts, the Recipient has prepared an ESMF in line with the WB ESSs and the WBG Environment, Health, and Safety (EHS) Guidelines; Labor Management Procedures (LMP); a Process Framework (PF) prepared to address issues of restricting access to resource users in restoration areas in line with ESSs; a SEP; and specific environmental and social instruments. The latter include Biodiversity Management Guidelines, an Integrated Pest Management Plan, an Integrated Waste Management Plan, an OHS Plan, a COVID-19 Response Plan, an Emergency Response Plan, a Cultural Tangible and Intangible Heritage Management Procedure, and Voluntary Land Donation and Willing Buyer/Willing Seller protocols. The Environmental and Social Review Summary (ESRS) and ESCP outline a series of capacity building and institutional strengthening activities during project implementation. 53. Other risks associated with the COVID-19 pandemic (Substantial). The proposed project area is being greatly affected by the COVID-19 pandemic. Rice growing areas in the lower Yuna watershed were one of the hardest hit by the COVID-19 pandemic, however, it is expected that demand and supply for rice will remain steady, and jobs in both production and processing will be secure. The COVID-19 pandemic poses two types of risks to the project: i) it may cause widespread pressure on land and natural resources that could overwhelm project resources and capacities, due to loss of employment or income and the need for food security; and ii) project planning and implementation may be compromised due to travel restrictions, increased illness, and social distancing. The first risk underscores the importance of the operation’s support for rapid progress on participatory land use planning and management and the widespread dissemination of related information as mitigation measures, especially under Component 1. With regards to the second risk, the project has developed an assessment of COVID-19 related risks and guidelines for their mitigation in line with protocols issued by the GoDR as well as the World Health Organization (WHO), which will be reviewed and updated regularly. The following additional measures are contemplated: i) MARN and MAG will provide health insurance to workers; ii) a worker database will be developed to serve to record data on outbreaks, number of suspected and confirmed cases, number of absences, and any other relevant epidemiological information; iii) before participating in activities, employees or service providers will be screened to avoid or reduce the possibility of contagion; iv) during activities, precautions similar to those mentioned above will be taken; and v) training will be provided to project beneficiaries related to COVID-19 and its prevention. Given these mitigation measures, the residual risk of the COVID-19 pandemic to the project is substantial. Page 29 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) VI. APPRAISAL SUMMARY A. Legal Operational Policies Triggered? Projects on International Waterways OP 7.50 No Projects in Disputed Areas OP 7.60 No . B. Fiduciary 54. Financial Management. The WB conducted a simplified FM assessment of MARN as grant executor and concluded that MARN has the FM capacity to implement the project. The project will be administered by MARN, which has experience implementing WB projects, including through the Climate Change division that already has an established PIU for the DR Forest Carbon Partnership Facility (FCPF) REDD+ Readiness Preparation project (P151752). MARN is also the grant recipient for the ongoing Project Preparation Grant (PPG) for this project, also executed by the PIU. All fiduciary aspects for GEF execution will be managed by the fiduciary staff from MARN, which has experience in implementing WB-financed projects with the support of fiduciary specialists from the PIU. Overall, MARN has demonstrated the capacity to administer fiduciary aspects of the proposed project complying with minimum WB’s requirements – it has experienced fiduciary staff, and the size of the project and nature of the expenditures to be financed does not require complex fiduciary arrangements. MARN will assign qualified staff to support project implementation, and fiduciary training will be provided by the WB. More details on the FM assessment and institutional arrangements can be found in Annex 1. 55. Procurement. Procurement will be carried out in accordance with the World Bank’s Procurement Regulations for Investment Project Financing (IPF) Borrowers” (Procurement Regulations) dated July 2016 and revised in November 2020, with due consideration to “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by International the Bank for Reconstruction and Development (IBRD) Loans and International Development Association (IDA) Credits and Grants”, dated October 15, 2006, revised January 2011 and as of July 1, 2016. In accordance with paragraph 5.9 of the Procurement Regulations, the WB’s Systematic Tracking and Exchanges in Procurement (STEP) system will be used to prepare, clear, and update Procurement Plans and monitor all procurement transactions for the Project. A simplified Project Procurement Strategy for Development (PPSD) was prepared to define the applicable procurement arrangements, appropriate selection methods, including market approach, and the type of review to be conducted by the WB. A first draft of the Procurement Plan has been prepared for the first year of the Project and agreed with the WB. C. Global Environmental Benefits and GEF Incremental Analysis 56. Project implementation in two critical watersheds will contribute to various global environmental benefits: LDN and sustainable land and forest use, including degraded land restoration, the reduction of desertification, the reduction of direct pressures on biodiversity, and the mitigation of GHG from the AFOLU sector. While large-scale global environmental benefits are not expected to be achieved during the life of the project, localized contributions to global benefits will be achieved through improved land management at the watershed level, sustainable rice production, agroforestry, and restoration of areas within the watershed that have been analyzed as critically important and likely to generate biodiversity and Page 30 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) ecosystem services impacts, through the analyses supported under Component 1, including the Environmental and Social Characterization and the biodiversity baseline assessment. Given the project’s geographic focus and use of analyses to target activities in critical areas, it is expected to have direct positive impacts on globally important biodiversity. The project’s components collectively will directly reduce pesticide discharge, soil erosion, land degradation, and water use, as well as restore and more sustainably manage areas critical for biodiversity, including upstream areas that will have downstream impacts, including in Samaná Bay.45 The collective impacts and benefits will be seen in the watercourses and deltas through the biological monitoring activities of Component 1 and on-farm biodiversity analysis and monitoring supported by Component 2. Global benefits will also accrue from the targeted investments in Component 3. Based on environmental service values from the GEF Re-engineering of the Protected Areas System project in the DR46 and the project’s GHG mitigation potential, financing for restoration and agroforestry systems will enhance the resilience of the wetland and upland ecosystems. Furthermore, collaboration between MARN, MAG, and the private sector under this project aims to establish long-term tracking of environmental benefits and enable the flow of information needed for improved land management and decision-making. 57. Land degradation and biodiversity. LDN will aid in reducing biodiversity loss and is expected to be improved on 4,890 ha. This includes 200 ha of land restored, 3,600 ha under more sustainable rice production, and 1,080 ha under agroforestry. Direct beneficiaries include 3,275 people, including technicians, extensionists, farmers, governance bodies, communities, and entrepreneurs. The Basin Committees are also expected to produce benefits for ILM-LDN in two mancomunidades, including through municipal approval of Strategic Plans for Territorial Development covering 306,900 ha. 58. The project contributes to innovation for transformation at scale. The technical (sustainable rice and agroforestry production), institutional (governance for land use planning and multi-stakeholder platforms), and policy (Strategic Plans for Territorial Development) innovations developed under the project’s components and activities enable a new paradigm in decision-making and adaptive resource management for the country. The Strategic Plans and Mancomunidad Planning Offices are particularly innovative given they will be the first of their kind in DR for ILM at the mancomunidad level. 59. GHG analysis. Based on an Ex-Ante analysis using the Ex-ante Carbon Balance Tool (EX-ACT) tool 47 over a 20-year period, the project is a carbon sink of 531,409 tons of carbon dioxide equivalent (tCO2-eq). By the end of the project (year 5), 72,157 tCO2-eq are expected to be reduced or avoided. The improvement to rice 45 As mentioned in the context section, the wide altitudinal range (from 0 to 2800 meters above sea level) hosts multiple ecosystems with globally important Caribbean biodiversity. The targeted area hosts seven Key Biodiversity Areas (Loma Quita Espuela, Los Haitises, Manglares Bajo Yuna, Loma Guaconejo, Reserva Científica Ebano Verde, Valle Nuevo, and Loma la Humeadora), seven National Parks, and the habitat of 10 IUCN Red List endangered species (Anguilla rostrate, Laterallus jamaicensis, Calidris pusilla, Calidris canutus, Setophaga striata, Antrostomus carolinensis, Chaetura pelagica, Cypseloides niger, Epilobocera wetherbeei, and Epilobocera haytensis). This landscape connects ecosystems such as the Upper and Lower Montane Humid Forests to Lower Yuna National Park, a Ramsar site declared in 2013 to protect the important lowland coastal forests, wetlands, mangrove swamps, seagrass beds, and marine areas of the Samaná Bay, the mouth of the Yuna River. This is the largest semi-enclosed bay in the Caribbean, which contains the most extensive mangrove forest and shrimp fisheries in the country and is an important sanctuary for humpback whales in the North Atlantic. 46 https://www.thegef.org/project/re-engineering-national-protected-area-system-order-achieve-financial-sustainability 47 An estimate of the GHG mitigation potential of the project was prepared using the FAO tool Ex-Ante Carbon-balance (EX- ACT), applying Tier 1 Intergovernmental Panel on Climate Change (IPCC) emission factors. The preliminary analysis draws a comparison between the current system (without the project or “business as usual”) and the improved system (with the land use and land use change improvements to be implemented by the project). Page 31 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) production, under Component 2, constitutes the greatest contribution to reducing emissions. The agroforestry systems (coffee, cacao) under Component 3 are a close second. The uncertainty was calculated at 22.5 percent for the analysis. Details on the methodology and findings may be found in Annex 5. 60. GEF Incremental Analysis. In the absence of GEF funds (baseline scenario), business-as-usual practices resulting in land, water, and biodiversity degradation would be expected to continue and disparate projects in the upper and lower watersheds would remain uncoordinated. Responses would be small and site- specific, lacking a strategic framework with a landscape lens. Without a framework based on documented root causes, actionable management objectives, or adequate M&E, natural resources will continue to be used in a way that disregards long-term protection of ecosystem services that benefit the communities who depend on the biodiversity of these areas. Due to a lack of institutional enabling conditions for sustainable land use at multiple levels, especially in the Yuna watershed, deforestation of around 0.6 percent/year and degradative rice production practices will continue, with deleterious effects on soil erosion and productivity, water quantity, and quality, habitats and biodiversity, and vulnerability to extreme climate change and weather events. The sustainability of rice production systems and related livelihoods will also become more threatened since United States (US)-produced rice may become cheaper than Dominican-produced rice as soon as 2021 or 2022.48 61. GEF financing will support the DR to meet these challenges in two key watersheds via the establishment and consolidation of institutional enabling conditions for ILM and LDN, an Environmental Agenda and Strategic Plans for Territorial Development, more sustainable rice and agroforestry systems, the restoration of ecosystems, and ecosystem services and reduced impacts on hydrological cycles and biodiversity. The project is addressing critical gaps for which there are not yet existing funds. More importantly, the project will directly inform the GoDR’s ILM Program in Yaque del Norte and Yuna watersheds, and nationally as it scales up to other watersheds, by sharing lessons learned with existing and future co-financiers and incorporating ILM-LDN in governance structures. This approach will enable the conceptual and operational linkage of upper and lower watershed areas as well as the linking of successful project initiatives with the programmatic approach in Yaque del Norte (through Plan Sierra, Plan Yaque, and government investments in agroforestry and reforestation), Yuna, and other watersheds in the country. D. Economic and Financial Analysis 62. The Economic and Financial Analysis (EFA) of the project indicates a net present value (NPV) of each product over 20 years to determine financial feasibility (See Annex 3). The financial NPV (without considering the benefits of carbon sequestration) for the project is estimated to be US$6.92 million, with an internal rate of return for the agricultural sector of 47 percent. In accordance with the WBG's Environmental Strategy49 and Climate Change Action Plan50, the carbon balance (net GHG emissions reduction) of the project has been evaluated and integrated into the economic analysis as well. The economic benefit from agriculture comes from a cost-benefit analysis, which considers the increase in production given by the incorporation of sustainable landscape management, comparing the situation with and without the project. 48 Sindler, D., Useche, P., Tucker, C. and Zhao, X. (2018) Moving toward Sustainable Rice Production in Northwest Dominican Republic. Natural Resources, 9, 468-504. https://doi.org/10.4236/nr.2018.912029 49 Toward a Green, Clean, and Resilient World for All: A World Bank Group Environment Strategy 2012 – 2022. https://openknowledge.worldbank.org/handle/10986/23746 50 World Bank Group Climate Change Action Plan 2021–2025: Supporting Green, Resilient, and Inclusive Development https://openknowledge.worldbank.org/handle/10986/35799 Page 32 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) The economic discount rate is based on the WB’s guideline recommendation (6 percent). However, an extra 4 percent was considered to add rigorousness by contemplating different risks and inflation associated with the country and sector. Thus, a 10 percent discount rate was used to determine its NPV, and therefore its economic feasibility, over 20 years. 63. Considering the assumptions underlying the analysis and without considering the benefits of the GHG estimates, the total NPV of the GEF investment is estimated to be US$7.01 million, with an internal 40 percent rate of return. A sensitivity analysis illustrates that the project will create economic and financial benefits even if it faces contingencies that increment investment costs or delay benefit generation. The agroforestry investments are particularly attractive in terms of returns, and even more so when ecosystem services are quantified. In terms of rice, the project extension services should promote best practices to receive the return needed to abate the projected impacts of changing approaches and to achieve the desired resilience of production over time. E. Environmental and Social 64. The World Bank due diligence under the ESF on screening of environmental and social risks and impacts of the project identified the relevance of the following ESS: ESS1 Assessment and Management of Environmental and Social Risks and Impacts, ESS2 Labor and Working Conditions, ESS3 Resource Efficiency and Pollution Prevention and Management, ESS4 Community Health and Safety, ESS5 Land Acquisition, Restrictions on Land Use and Involuntary Resettlement, ESS6 Biodiversity Conservation and Sustainable Management of Living Natural Resources, and ESS10 Stakeholder Engagement and Information Disclosure. 65. Environmental Risk. Overall the project is expected to promote the adoption of more sustainable and resilient land-use practices to contribute to the conservation of regional and globally critical ecosystems and biodiversity, reduce forest and soil degradation, control erosive processes, promote water efficiency practices, adopt robust agricultural practices, including the reduction of agrochemical and pesticide use in sustainable rice production and agroforestry systems, and contribute to GHG emissions reductions. Identified environmental risks and impacts include: i) loss or conversion of natural and semi-natural vegetated land to other types of land cover classes (if good practices in land restoration are not applied correctly); ii) water overuse for seedling production in nurseries and sustainable rice production (even though this practice is expected to reduce the water needs by up to 30 percent compared to traditional rice production); iii) introduction of invasive species through reforestation and/or agroforestry activities; iv) potential contamination due to the use of agrochemicals and pesticides in sustainable rice production and agroforestry systems; v) site-specific impacts related to small-scale infrastructure works and rehabilitation/refurbishment of nurseries, which may include soil and vegetation removal, residual construction waste, dust, vibration and noise nuisance; and vi) OHS hazards for the workforce due to the careless use of machinery and equipment. Possible negative impacts are expected to be site-specific, short- term, and reversible. 66. Social Risk. While the overall social benefits are expected to be positive, identified social risks and impacts include: i) project workers exposure to COVID-19 and transmission to communities, ii) transmission of the virus within communities and among potential beneficiaries, especially during workshops, iii) economic displacement due to access restrictions as part of Component 3 that could impact vulnerable and resource-dependent groups, iv) conflicts over competing interests and demands of different land and water users, and iv) the need to consider tradeoffs between different stakeholder interests. No physical displacement is envisaged under the project. The project will include elements to minimize exclusion risks Page 33 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds Project (P170848) and put a strong focus on inclusive stakeholder engagement through the SEP, particularly regarding small producers, community/day/rotating workers, migrant workers, women, and youth. 67. Risk Mitigation Measures. Mitigation measures for the above-mentioned environmental and social (E&S) risks are set out in the ESMF, which includes a PF, a SEP and LMP, Biodiversity Management Guidelines, an Integrated Pest Management Plan; an Integrated Waste Management Plan, an OHS Plan, a COVID-19 Response Plan, an Emergency Response Plan; and a Cultural Tangible and Intangible Heritage Management Procedure. The commitments from these instruments are captured in the ESCP and include: i) comprehensive community and workforce health and safety measures; ii) hazardous substances and pollution prevention measures; iii) waste management measures; iv) biodiversity management considerations; (v) measures to mitigate impacts related to small-scale infrastructure and rehabilitation/refurbishment work; vi) labor and contract management procedures, including the enforcement of codes of conduct, transparency; vii) inclusiveness and participation of beneficiaries in designing and implementing the project activities; viii) communication and stakeholder engagement activities to continue throughout project implementation; and ix) a grievance mechanism, covering both workers and project stakeholders at large. The PIU will include one environmental and one social specialist who shall be maintained throughout project implementation. The ESMF, associated E&S risk management instruments and ESCP have been prepared and disclosed by MARN.51 A detailed description of E&S risks and impacts and a summary of proposed mitigation measures are included in the ESRS. VII. World Bank Grievance Redress 68. Communities and individuals who believe that they are adversely affected by a WB supported project may submit complaints to existing project-level GRM or the WB’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 WB’s independent Inspection Panel, which determines whether harm occurred or could occur, as a result of WB non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the WB's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the WB’s corporate GRS, please visit http://www.worldbank.org/en/projects-operations/products- and-services/grievance-redress-service. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org. . 51Disclosed December 18, 2020. https://ambiente.gob.do/transparencia/informes-de-seguimientos-a-los-programas-y- proyectos/ Page 34 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) VIII. RESULTS FRAMEWORK AND MONITORING Results Framework COUNTRY: Dominican Republic Integrated Landscape Management in Dominican Republic Watersheds Project Development Objectives(s) The objective of the project is to strengthen integrated landscape management in targeted watersheds in the Dominican Republic. Project Development Objective Indicators RESULT_FRAME_TBL_ PD O Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 To strengthen integrated landscape management in targeted watersheds in the Dominican Republic Area of productive land under improved practices to enhance climate resilience and environmental sustainability as 0.00 0.00 480.00 1,602.00 3,480.00 4,680.00 a result of the project (excluding protected areas) (Hectare(Ha)) Area of productive rice land in lower watersheds under climate-smart and 0.00 0.00 480.00 1,170.00 2,400.00 3,600.00 sustainable land management as a result of the project (Hectare(Ha)) Area of productive land in upper watersheds under 0.00 0.00 0.00 432.00 1,080.00 1,080.00 climate-smart and Page 35 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) RESULT_FRAME_TBL_ PD O Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 sustainable land management as a result of the project (Hectare(Ha)) Farmers adopting climate- smart and sustainable rice 0.00 0.00 160.00 390.00 800.00 1,200.00 production practices as a result of the project (Number) Area of degraded agricultural land restored as a result of 0.00 0.00 0.00 84.00 210.00 210.00 approved sub-projects (Hectare(Ha)) Area of landscapes under approved management plans to benefit biodiversity as a 0.00 0.00 0.00 250,967.00 306,900.00 306,900.00 result of the project (Hectare(Ha)) PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 1: Enabling environment for Integrated Landscape Management Established and effective Basin 2.00 2.00 6.00 10.00 14.00 16.00 Committees (Number) Multi-stakeholder knowledge platform in place for No No Yes Yes Yes Yes monitoring the climate and environmental sustainability of Page 36 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 the Yaque del Norte and Yuna watersheds (Yes/No) Basin Committees using the multi-stakeholder knowledge 0.00 0.00 4.00 8.00 14.00 16.00 platform for watershed management (Number) Inclusive, participatory and ILM-based strategic plans and 0.00 0.00 1.00 2.00 3.00 3.00 agendas developed as a result of the project (Number) Beneficiaries trained in integrated watershed management as a result of the 0.00 50.00 210.00 320.00 380.00 400.00 project (Number) Technicians trained in land use planning and monitoring of biodiversity 0.00 50.00 150.00 200.00 200.00 200.00 as a result of the project (Number) Beneficiaries trained to promote women leadership in Basin Committees as a 0.00 0.00 60.00 120.00 180.00 200.00 result of the project (Number) 2: Scaling up sust. rice production sys. to improve productivity, water use efficiency, and BD consv Beneficiaries trained to apply climate-smart and sustainable rice production technologies as 0.00 305.00 725.00 1,415.00 2,095.00 2,095.00 a result of the project (Number) Technicians and extension 0.00 30.00 65.00 65.00 65.00 65.00 officers (Number) Page 37 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 Farmers (Number) 0.00 250.00 600.00 1,230.00 1,850.00 1,850.00 Beneficiaries trained on gender inclusion issues for sustainable rice production 0.00 25.00 60.00 120.00 180.00 180.00 as a result of the project (Number) Area of sites established demonstrating climate-smart and sustainable rice production 0.00 50.00 130.00 130.00 130.00 130.00 technologies as a result of the project (Hectare(Ha)) 3: Restoration of biodiversity and hydrological services in critical ecosystems Restoration and agroforestry climate-smart sub-projects approved by the project 0.00 0.00 2.00 5.00 5.00 5.00 (Number) Restoration and agroforestry climate-smart sub-projects 0.00 0.00 0.00 0.00 2.00 5.00 completed by the project (Number) Beneficiaries of sub-projects financed by the project 0.00 0.00 0.00 240.00 500.00 600.00 (Number) Beneficiaries received training on gender inclusion issues 0.00 0.00 150.00 250.00 350.00 360.00 relevant to sub-projects as a result of the project (Number) 4: Project Management and Monitoring & Evaluation Actions proposed by beneficiaries during 0.00 5.00 7.00 8.00 9.00 9.00 consultation and/or Page 38 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 stakeholder engagement events that have been incorporated into project implementation (Number) Carbon sequestered or emissions avoided in the 0.00 13,542.00 72,157.00 AFOLU sector (Number) IO Table SPACE UL Table SPACE Monitoring & Evaluation Plan: PDO Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Sub-indicator methodologies. When reporting to GEF on their Core Indicator 4, hectares will Area of productive land under improved not be double counted / Aggregate indicator of sub-indicators. Sub-indicator practices to enhance climate resilience and Annual reported if there is overlap in MAG reporting environmental sustainability as a result of the areas under this indicator and Corresponds to GEF Core Indicator 4.3. project (excluding protected areas) the indicator on area of land under improved management plans. Sustainable land management is defined as Agricultural specialists will Planting implementation of sustainable rice monitor uptake of sustainable Area of productive rice land in lower reports; production technologies and approaches. rice production techniques as a watersheds under climate-smart and Annual survival MAG Productive rice land in lower watersheds is result of activities under sustainable land management as a result counts; site the equivalent of targeted areas under Component 2. This will be done of the project visits Component 2. primarily through site visits and reports of rice production areas Page 39 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) Assumptions for this indicator: annually after trainings are - Multiplying farmers adopting conducted under Component technologies (indicator 2) by average parcel 2. These site visits will be size of approx. 3ha (based on input from conducted through random MAG). selection of participants in training under Component 2. Written reports with photographic evidence will be requested of training participants annually regarding planting, survival, and implementation of sustainable rice production technologies and approaches. Sustainable land management is defined as the implementation of agroforestry techniques, or other approved activities funded by the sub-projects under Component 3. Upper watersheds are the equivalent of Agricultural specialists will eligible areas for support under sub-projects monitor the implementation of in Component 3, according to the eligibility sub-project activities under criteria. Component 3. This will be done primarily through progress Assumptions for this indicator: Sub-project reports and site visits, the Area of productive land in upper - If 3 of 5 sub-projects are for reports; site outcomes of which will be watersheds under climate-smart and agroforestry, 60% of beneficiaries of sub- Annual visits; MARN/MAG documented in a validation sustainable land management as a result projects (indicator 13) would adopt stakeholder report by the specialists. of the project agroforestry, totaling 360 people. interviews Progress reports, site visits, and - Average size of cocoa/coffee plot validation reports will be adopting agroforestry is 3ha (based on input completed for every sub- from Plan Yaque). project annually after they are - Therefore, considering 360 people approved. with an average area of 3 ha, the project is assumed to cover a total area of 1,080 ha. - Intermediate targets follow the rate of approved sub-projects (indicator 11), one year after approval as follows: - YR3: 40% Page 40 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) - YR4: 100% Agricultural specialists will monitor the uptake of sustainable rice production techniques as a result of activities under Component 2. This will be done primarily through site visits and reports Farmers that adopt sustainable rice of rice production areas production technologies and approaches as a Planting annually after trainings are result of training provided under Component reports; conducted under Component 2. Results will be disaggregated by gender. survival 2. These site visits will be Farmers adopting climate-smart and Annual counts; site conducted through random MAG sustainable rice production practices as a Assumption of farmers adopting rice visits; selection of participants in result of the project production technologies assumed to be 65% stakeholder training under Component 2. of those trained (Indicator 9B) one year after interviews Written reports with the training. 65% uptake rate estimated by photographic evidence will be MAG. requested of training participants annually regarding planting, survival, and implementation of sustainable rice production technologies and approaches. Results will be disaggregated by gender. Restoration of degraded agricultural land is Specialists will monitor the defined as the implementation of approved implementation of sub-project restoration activities funded by the sub- activities under Component 3. projects under Component 3. This will be done primarily Sub-project through progress reports and reports; site Corresponds to GEF Core Indicator 3.1. site visits, the outcomes of Area of degraded agricultural land restored Annual visits; MARN which will be documented in a as a result of approved sub-projects stakeholder Assumptions for this indicator: validation report by the interviews - 2 sub-projects are focused on the specialists. Progress reports, restoration of degraded land. site visits, and validation - Total funding for sub-projects is reports will be completed for assumed to be $1.42m. Therefore, if every sub-project annually assuming the same funding for each sub- after they are approved. Page 41 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) project, the 2 restoration sub-projects would have $0.58m in funding (combined). - The average cost of restoration of degraded landscapes is assumed to be $2,754/ha (from Plan Quisqueya Verde). - Therefore, given the envelope of $0.58m, there is potential for restoration on 210 ha. - Intermediate targets follow the rate of approved sub-projects, one year after approval (below) as follows: o YR3: 40% o YR4: 100% Improved management plans to benefit biodiversity are equivalent to the Strategic Plans for Territorial Development. Approval of these Plans is done at the municipal level and is documented in a Municipal Ordinance. The area of the municipality in which these Plans are approved will constitute the area under Evidenced by the formal the Plans. approval, through a Municipal Ordinance, of a Strategic Plan Corresponds to GEF Core Indicator 4.1. Strategic for Territorial Development. Plans for When reporting to GEF on their Assumptions for this indicator: Area of landscapes under approved Territorial Core Indicator 4, hectares will - Area de Madre de las Aguas: Annual MEPyD management plans to benefit biodiversity as Development not be double counted / 358,525 ha a result of the project /Municipal reported if there is overlap in - FEDOMU: 79,999 ha Ordinance areas under this indicator and - Expectation is 70% of municipalities the indicator on area of will approve the Strategic Plans for Territorial productive land under Development (provided by MEPyD). improved practices. - Therefore, the total end target is 70% of the area of Madre de las Aguas and FEDOMU (as an average given size of each municipality cannot be predicted at this time), totaling 306,900 ha. - Madre de las Aguas is expected to approve their Strategic Plan first (in year 3) and FEDOMU is expected to approve in year Page 42 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) 4. Therefore, the timing of approval by municipalities is assumed to be: o Year 3: 57% of the total area (70% of Madre de las Aguas) o Year 4: 70% of the total area (which includes 70% of FEDOMU) ME PDO Table SPACE Monitoring & Evaluation Plan: Intermediate Results Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Basin Committees include micro-basin committees, representative sub-basin organizations, and river basin councils or committees. To be established and effective, these Basin Committees must be created, Governance documents, like have active membership, and have the capacity to incorporation documents, facilitate dialogue and make decisions. Governance charters, or operational documents; manuals/guidance and Assumptions: incorporation Established and effective Basin Annual meeting minutes must be MEPyD - Baseline (2): CRYN (YdN); Cuenca Rio Jamao documents; Committees formally documented and (Yuna). meeting available, providing evidence - End target: 14 total: ten micro-basin minutes of sufficient capacity to committees, three representative sub-basin function effectively. organizations, and a river basin council or committee. - Assumption for timing is 4 committees are effective each year between years 2 and 4 of the project with a final 2 becoming effective in the final year of the project. The platform is defined as a monitoring system of key Operational guidance for the indicators related to the environmental sustainability institutional arrangements, Operational Multi-stakeholder knowledge of the river basin. The platform will consolidate governance, technical guidance; platform in place for monitoring the information from relevant analyses, projects, functionality, data Annual knowledge DIARENA climate and environmental cartography, and reports. The platform will be requirements, data platform; outpu sustainability of the Yaque del Norte considered ‘in place’ when it is available publicly and collection processes, and/or t reports and Yuna watersheds functional. The platform will be improved over the reporting processes for the lifetime of the project and a basic version will first be platform must be formalized available. and agreed upon by Page 43 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) DIARENA. The platform must Assumption it is completed in year 4 given analytical be available publicly (online) and governance work required before it can be and functional. Output established/functional. reports from the platform should be provided to provide evidence of its functionality. Basin Committees will be encouraged to reference the multi-stakeholder knowledge platform in the management of the micro-basin, sub-basin A survey of Basin organizations, or rivers in their jurisdiction. Those Committees will be actively using this platform to inform their conducted annually by Basin Committees using the multi- management, including in decisions, will indicate as Annual Surveys MEPyD, including a question MEPyD stakeholder knowledge platform for such in surveys. on the use of the knowledge watershed management platform for watershed Assumptions: management. - Once the knowledge platform is available, assumed 75% use in year2, 80% in year 3, and 100% from year 4 onwards. Plans and agendas are defined as the Environmental Evidence of formal approval Agenda and the Strategic Plans for Territorial of the Environmental Agenda Development that will be supported under and the Strategic Plans for Component 1. Approval will either be at the national- Environmental Territorial Development will level (Environmental Agenda) or sub-national or local- Agenda and be documented through level (Strategic Plans for Territorial Development). Strategic Plans Inclusive, participatory, and ILM- signed declarations Annual for Territorial MEPyD based strategic plans and agendas (Environmental Agenda), Assumptions are: Development; developed as a result of the project meeting minutes, public - Environmental Agenda is approved in year 2 formal postings, and/or Municipal based on analytical work/baselines being completed approvals Ordinances (in the case of in the 1st year of the project. the Strategic Plans for - 1 Municipal Territorial Management Plan Territorial Development). (Madre de las Aguas) approved in year 2 and another in year 3 (FEDOMU) as envisioned by MEPyD. Aggregate of sub-indicators. Results will be Beneficiaries trained in integrated Sub-indicator disaggregated by gender. Annual Sub-indicator methodologies MEPyD/MARN watershed management as a result of reporting the project Corresponds to GEF Core Indicator 11. Page 44 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) People trained on technical issues related to land use planning and biodiversity monitoring under Component 1. Results will be disaggregated by gender. Attendance for training Technicians trained in land use Assumptions: Training events will be disaggregated planning and monitoring of - Initial trainings in the first year while Annual plans; attendanc MEPyD/MARN by gender and formally biodiversity as a result of the analyses/baselines are being done (50 people to e documents documented. project attend) - Additional trainings in year 2 once the analyses are available and environmental agenda are completed (100 people more) - Additional trainings in year 3 by rolling out of the Environmental Agenda (50 people more) People trained on gender inclusion in Basin Committees under Component 1. Results will be disaggregated by gender. Assumptions: - 25 people are actively involved in Basin Committees on average (provided by MARN). - If 14 Basin Committees will be supported by Attendance for training Beneficiaries trained to promote Training the project, the total number of people actively events will be disaggregated women leadership in Basin Annual plans; attendanc MEPyD/MARN involved would be 350. by gender and formally Committees as a result of the e documents - Assumption that roughly 60% of those documented. project people actively involved in Basin Committees would receive training on gender issues, totaling 200 people. - Timing follows the intermediate targets for the establishment of Basin Committees (indicator 5): o Year 2: ~30% o Year 3: ~30% o Year 4: ~30% o Year 5: ~10% Beneficiaries trained to apply Aggregate indicator of sub-indicators. Results will be Sub-indicator Sub-indicator climate-smart and sustainable rice disaggregated by gender. Annual methodologies. Results will MAG reporting production technologies as a result of be disaggregated by gender. the project Corresponds to GEF Core Indicator 11. Technicians and extension Sustainable rice production training specifically for Annual Training Attendance for training MAG officers technicians and extension officers. Results will be plans; attendanc events will be disaggregated Page 45 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) disaggregated by gender. e documents by gender and formally documented. Assumptions: Expected ~2 technicians per parcel (there will be a total of 32 parcels). Sustainable rice production training specifically for Attendance for training farmers. Results will be disaggregated by gender. Training events will be disaggregated Annual plans; attendanc MAG Farmers by gender and formally Assumptions for this indicator (provided by MoA): e documents documented. around 600 farmers can be trained per year once the parcels are established. People who receive training on gender inclusion in sustainable rice production. Results will be Attendance for training Beneficiaries trained on gender Training disaggregated by gender. events will be disaggregated inclusion issues for sustainable Annual plans; attendanc MAG by gender and formally rice production as a result of the e documents Assumptions: 10% of trained producers will receive documented. project additional training on gender inclusion issues (provided by MAG). Sites are defined as demonstration plots for sustainable rice production technologies and MAG will develop reports on approaches established under Component 2. the establishment of demonstration plots with Area of sites established Assumptions for this indicator: MoA reports; photos, area size, practices demonstrating climate-smart and Annual MAG - 50 Ha (5 parcels) will be established by site visits being implemented, and sustainable rice production Bioarroz in the first year other relevant information. technologies as a result of the project - 80 Ha (27 parcels) will be established by Site visits will be conducted, IDIAF in the second year. including by the World Bank. - The parcels will be supported for 3 consecutive years. Sub-projects approved under Component 3. Approval of sub-projects will be formalized and Assumption is 5 sub-projects total (based on budget), Restoration and agroforestry climate- Sub-project documented approved by a with selection starting in year 2 and culminating in Annual MARN smart sub-projects approved by the approvals committee including MARN, year 3 (due to work required before proposal process) project MoA, INDRI, and members of and expected learning process from the first civil society. approvals to the final approvals (hence some being approved in year 3). Restoration and agroforestry climate- Completion of sub-projects approved under Sub-project The final annual sub-project Annual MARN smart sub-projects completed by the Component 3. reports report will be a completion project report. Site visits will validate Page 46 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) Assumption that each project will take 2 years to this information for all sub- complete (follows timing in indicator 11). projects through stakeholder interviews. Number of people who benefit from sub-projects under Component 3. Results will be disaggregated by gender. Corresponds to GEF Core Indicator 11. Input information from Asociación de Productores Agroforestales de Zambrana-Chacuey (APA) which states that an agroforestry/mixed use/restoration The number of expected Project over 875 hectares had direct and indirect beneficiaries will be included beneficiaries totaling 1,750 (assumption is this in the proposals sub-projects includes families that benefit). submit and evidence of the Sub-project actual beneficiaries will be Assumptions for this indicator: reports; site provided in the annual - End target is roughly one-third of results Beneficiaries of sub-projects financed Annual visits; reports they provide to MARN from APA expected for this project given that the by the project stakeholder MARN on the status of average family size in DR is 3.2 people (and interviews implementation of agreed beneficiaries for this project are not expected to activities. Site visits will extend to indirect family benefits), totaling 600. In validate this information for addition, this conservative estimate takes into all sub-projects through account averages over the 5 sub-projects, the much stakeholder interviews. shorter timeline (as compared to APA), and targeted activities. - Benefits are expected to reach a proportion of beneficiaries within one year of approval of sub- projects (indicator 11) according to the following proportions: o 40% in year 3 o 83% in year 4 o 100% in year 5 (when final project completed) People who receive training on gender inclusion Training Attendance for training Beneficiaries received training on related specifically to the sub-projects. Results will be Annual plans; attendanc events will be disaggregated MARN gender inclusion issues relevant to disaggregated by gender. e documents by gender and formally sub-projects as a result of the project documented. Page 47 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) Corresponds to GEF Core Indicator 11. Assumptions: - 60% of beneficiaries of sub-projects will receive training on gender issues. - Timing is consistent with when workshops will be held to prepare proposals (year 2) and implementation of sub-projects (years 3-5). Consultation reports or Feedback from beneficiaries will be received through meeting minutes must be processes described in the project’s Stakeholder made public and must note Engagement Plan. Actions may be proposed and Consultation how the proposed action has Actions proposed by beneficiaries documented through these processes. Incorporation reports; been incorporated in the during consultation and/or of actions must be formally documented. Annual meeting project and how it has or will MARN stakeholder engagement events that minutes; project be implemented. This can have been incorporated into project Assumption is most will be incorporated in the first progress reports also be documented in implementation year, but as engagement continues throughout regular progress reports on implementation, more actions would be incorporated, the project submitted to the as expected in the Stakeholder Engagement Plan. World Bank. Carbon sequestered or emissions avoided in the AFOLU sector will be reported in tCO2e using the EX- ACT Tool, according to GEF requirements. At mid-term and end of the Assumption: project, the EX-ACT Tool will Mid-term - According to the GHG analysis for the be used to update the GHG and Final EX-ACT Tool Carbon sequestered or emissions project at Appraisal stage, the total tCO2e expected analysis and analyze the MARN (years 3 and Outputs avoided in the AFOLU sector to be sequestered or avoided totals 72,157 by the end emissions avoided or 5) of the project. reduced due to the project’s - Expected exponential increase in emissions interventions. sequestered or avoided over the lifetime of the project. Corresponds to GEF Core Indicator 6.1. Page 48 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) ANNEX 1: Implementation Arrangements and Support Plan I. General Organizational Structure for Project Implementation 1. The institutional arrangements include an SC, an AC, a Project Director, and a PIU. A POM has been developed that includes a detailed description of the project’s institutional arrangements, as well as the rules and procedures that will govern the implementation of the project (See Figure A1.1). The POM will be agreed with the WB as a condition of effectiveness of the grant agreement. Institutional arrangements will be formalized between MARN, MAG, and MEPyD through a signed inter-institutional agreement in line with the POM indicating commitment to project implementation, also as a condition of effectiveness of the grant. MARN will be the implementing agency and the designated Recipient of the GEF resources. Project implementation will also involve MAG and MEPyD. The Project Director will be a senior official of MARN’s, responsible for fulfilling the commitments to the UNCCD, and therefore to the GEF Land Degradation focal area. The PIU will report to the Project Director. 2. AC. The AC promotes coordination on public policies to inform the Environmental Agendas and the Strategic Plans for Territorial Development in the watersheds and investments for production, sustainable rice production systems, and agroforestry systems. The AC will guide the SC in compliance with the ESMF since its members are the competent authorities in the country in environmental and social matters for rural territories. The AC will meet quarterly, according to the specific needs of the project. 3. SC. The SC will oversee the operation of the project and will be governed by internal regulations, which will be outlined in the POM. The SC will be advised by the AC for the coordination of actions in the watershed that facilitate compliance with the ESMF. The SC will meet at least twice a year and will request reports from the PIU. The SC will be responsible for the final selection of proposals for services and sub- projects to be submitted to the call for proposals in Components 2 and 3. Its main functions are: (a) Direct and guide, at a higher political level, the implementation of the project; (b) Ensure consistency with the objectives and strategic actions of the project; (c) Ensure national political and institutional processes for the implementation and fulfillment of project objectives; (d) Ensure that political processes are conducted in strict compliance with the guidelines and regulations pertaining to institutional arrangements. 4. PIU. This unit will be responsible for coordinating activities and ensuring compliance with the project's objectives and indicators, in conjunction with MARN, MAG, MEPyD, and other stakeholders involved. The PIU will train, support, and supervise the ministry staff in the compliance and management of the ESSs for the Project. In turn, the WB will support MARN and the PIU in the environmental and social management of the project, as needed, during implementation. The PIU will be responsible for the implementation of all the project´s components. It will supervise the implementation of the project as a whole and will be responsible for generating technical information for the different components. This unit will be responsible for administration, reports, audits, annual work plans and budgets, fiscal and legal aspects, compliance with fiduciary and procurement procedures, as well as guidance, necessary training, supervision, and reporting of the implementation of the ESMF, its corresponding Plans, and the ESCP. Page 49 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) Figure A1.1. Implementation Arrangements 5. The PIU will be headed by a Project Coordinator, who will report to the Project Director and interact with the SC and the AC. The Project Director will be a senior official of MARN’s, responsible for fulfilling the commitments to the UNCCD, and therefore to the GEF Land Degradation focal area. The PIU will be comprised of specialists hired by MARN, who will be responsible for social, environmental, procurement, M&E, communications, agricultural, financial, and general project support aspects. In addition, as part of the PIU, there will be a Regional Coordination Office (See Figure A1.2), staffed by a Sub-Project Coordinator, physically located in one of MAG´s facilities in Monseñor Nouel, which is easily accessible to the Yuna and Yaque del Norte basins. 6. MARN. The PIU will operate under the Vice Ministry. In this sense, MARN also participates by providing administrative, financial, and logistical support to the PIU. In addition, the Ministry is part of the Technical Support Group, providing technicians from the areas of biodiversity, forest resources, soil conservation, water management, sustainable livelihoods, environmental management, environmental education, and social participation and gender. Technical support will also include communications and legal aspects. 7. MAG. The MAG is part of the project's SC, as well as the AC. In the AC, it will participate through the Vice-Ministries of Planning, Extension, and Training, as well as BioArroz and the Agroforestry Unit. Additionally, MAG is part of the Technical Support Group for project implementation, providing technicians for the deployment of sustainable technologies in rice cultivation. Technical support will also include communications and legal aspects. Page 50 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) Figure A1.2. Institutional Arrangements 8. MEPyD. MEPyD will be part of the project’s SC, as well as the AC. In the latter, MEPyD will participate through the Land Use Planning Directorate. Additionally, MEPyD participates in the Technical Support Group for project implementation, providing technicians for activities related to territorial planning, water resources governance, and inter-institutional coordination. Technical support will also include communications and legal aspects. 9. Mancomunidades and Basin Committees. The innovative approach of working with associations of municipalities through mancomunidades has been strongly encouraged by the GoDR, based on the positive results and impact of the Mancomunidad Madre de las Aguas and the CRYN Presidential Commission, The GoDR is hoping to use this project to scale up this approach. Mancomunidades are legally incorporated in municipal law 176-07. Since the Strategic Plans for Territorial Development will be without precedent, the Government noted the need for Mancomunidad Planning Offices to oversee these efforts. To secure the sustainability of these Offices, MEPyD will provide in-kind resources for their operation to complement the project’s support for capacity building and equipment. Similarly, the creation of Basin, Sub-basin, and Micro- basin Committees is regulated by MARN’s resolution 0022-2020. The bottom-up approach for the implementation of the project will link Basin Committees and mancomunidades to create synergies for the management of natural resources at the local and landscape scales. 10. Technical Support Group. In parallel, a Technical Support Group composed of specialists from MARN, MAG, and MEPyD will provide support to address issues related to biodiversity, land management, soil conservation, integrated water management, sustainable rice technologies, sustainable livelihoods, municipal environmental management, as well as communication and dissemination, gender, social participation, environmental education, and legal affairs. 11. Other stakeholders. It is important to highlight the participation of key stakeholders like IDIAF, the CRYN, FEDOMU, FAO, and IICA, among others, within the AC, to gather the national and international expertise on key issues like sustainable rice production, multi-stakeholder governance mechanisms, Page 51 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) public/private partnerships, and the alignment of central and local government policies in matters related with territorial planning. II. Institutional Capacity to Implement the Project, Including Safeguards 12. MARN, MAG, and MEPyD will be responsible for the implementation of the safeguards and operational aspects in the territories. The project will train and provide constant support to the institutions to develop and strengthen their institutional technical and management capacities, including safeguards. MARN, as the implementing agency, developed the current ESMF in line with the WB's ESSs. MARN has demonstrated capacity in preparing and implementing projects with the WB, including the FCPF REDD+ Readiness Preparation project (P151752) and the ER Program (P161182). 13. Implementation will be the responsibility of the PIU, which will coordinate the inter-institutional efforts. MARN and MEPyD will be in charge of the technical aspects related to instruments for the territorial management of the basins. MAG will be responsible for the technical aspects related to the field activities of Components 2 and 3, whereas MARN will input to the land degradation, climate change, biodiversity, natural protected areas, and forest conservation aspects of Components 2 and 3. III. FM Arrangements for the Project 14. The WB conducted an FM assessment of MARN as the implementing agency of this GEF project, applying simplified FM procedures for small grants.52 All fiduciary aspects for the GEF execution are expected to be managed by the fiduciary staff from MARN, with the support of fiduciary specialists specially hired for this operation. The FM arrangements for the project have been confirmed with MARN, including its Financial Directorate. Overall, MARN has demonstrated the capacity to administer fiduciary aspects for ongoing projects complying with WB requirements. The FM assessment concluded that to ensure acceptable FM arrangements mitigation measures must be in place at MARN as described in the FM action plan. Table A1.1. FM Action Plan Description of Action/Condition By When i) FM team in place for the project. The core qualified team has been confirmed by MARN no later than 30 days after the effectiveness date; MARN shall ensure that FM professionals are set forth in the POM. The WB will grant no objection to the terms of reference of consultants. ii) Confirmation of grant funds flow, budget accounting, Completed. reporting, and Internal Control processes acceptable to the WB. iii) Interim Financial Reports (IFRs) should be developed in By project Effectiveness. Executive Unit for External Projects (Unidad Ejecutiva de Proyectos Externos, UEPEX), and the templates are attached to the project FM section of the POM. iv) Financial section of the POM includes procedures to By project Effectiveness. control the execution of sub-projects (component 3) and is adopted in a manner satisfactory to the WB. 52 Small Recipient-Executed Trust Fund Grants Guidance Note Page 52 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) 15. Planning and Budgeting. Tentative budget allocation is required. MARN shall ensure budget determination during the project life. The budget, and any modifications made to it, will be recorded and monitored through the Integrated Financial Management System (Sistema Integrado de Gestión Financiera, SIGEF). 16. Accounting and financial reporting. IFRs and annual Financial Statements (FS) will be prepared by MARN in compliance with the applicable National Accounting Standards in UEPEX. MARN shall submit to the WB the project IFRs on a semiannual basis and digitally. Budgeting, accounting, and treasury functions are integrated within the National SIGEF system. The project information will be added through a specific cost center. 17. Internal controls. MARN has in place a set of internal administrative manuals that regulate the administrative process of the Ministry and cover, among others, accounting, budgeting, financial reporting, and internal control matters, to ensure the safeguard of assets, the accuracy of the financial information, and compliance with all financial and operational requirements. MARN shall provide adequate segregation of duties during the whole administrative and financial cycle and shall periodically include, on a risk-basis, the project processes as part of its internal audit process. 18. Disbursement of project funds will be processed in accordance with WB procedures, as stipulated in the Disbursement and Financial Information Letter (DFIL) and the Disbursement Guidelines for IPF, dated February 2017. Disbursement methods for MARN will be: (i) reimbursement; (ii) advance; and (iii) direct payment; advances being the primary disbursement method. The ceiling for advances to a segregated Designated Account (DA), has been determined as US$300,000, and will be held at the Central Bank of the DR (BCRD). Subsequently, the funds will be transferred to the Treasury Single Account (TSA) at the Ministry of Finance, in the name of the Project, from which MARN will proceed with the payments to the Project beneficiaries. 19. The supporting documentation for withdrawal applications will be through Statements of Expenditures (SOEs) in the format attached to the DFIL, except for direct payments, to be documented by spending records, contract references, a copy of payment clauses, procurement orders, invoices, and receipts, as applicable. The Project will have a four-month grace period to document expenditures incurred before the closing date. The frequency of submitting eligible expenditures to be paid from the DA will be every three months, with the flexibility of processing them more often, when needed. 20. The SOEs and supporting documents for withdrawal applications for financing with the proceeds of the grant will be submitted by MARN to the WB through its online Client Connection system. The Ministry of Finance will authorize the request online through the Client Connection System for the Bank to process an e- transfer to the Budget TSA, as defined in the DFIL. 21. MARN shall retain all records (contracts, orders, invoices, bills, receipts, and other documents), evidencing expenditures under their respective parts of the project until at least the later of: (i) one year after the WB has received the audited FS covering the period during which the last withdrawal from the grant account was made; and (ii) two years after the closing date. MARN shall enable the WB’s representatives and the external auditors to examine such records. The records should identify the expenses made with reference to the Bank grant funds to establish its financing source. 22. Access to information. The access to information policy for the WB-financed operations states that the borrower/grantee will disclose the audited project FS on its website. Following the WB’s formal receipt of these statements from the Recipient, the WB will make them available to the public. Page 53 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) 23. Implementation support and supervision strategy. The WB FM team will monitor all FM action plans to ensure successful implementation and that the deadlines are met, and it will update the FM-assessed risk for the project as needed. During project implementation, FM supervisions will be conducted as part of the WB’s general implementation support, taking into consideration FM risk ratings and the review of IFRs and audited FS for the project. 24. The IFRs will be generated from UEPEX, under formats agreed with the WB and documented in the project financial section of the POM. MARN shall comply with the procedures and timeline to prepare and submit quality IFRs of the grant funds. MARN FM staff will upload the IFRs to Client Connection on a semiannual basis within 45 days after the end of each period. The IFRs will serve as a basis for the audited FS. 25. External audit arrangements. The project’s annual FS will be audited by a private firm under terms of reference acceptable to the WB. Each audit shall cover the period of one FY of the Recipient or other period agreed with the WB and included in the DFIL. The audited FS will be uploaded to the WB’s Client Connection system no later than four months after the end of each audited period and will be considered public. MARN, as the Recipient for the grant funds, will be part of the overall project external audit, and the grant will finance the cost of the project’s annual audit. IV. Procurement arrangements 26. Procurement will be carried out in accordance with the “World Bank Procurement Regulations for IPF Borrowers” dated July 2016, revised in November 2020 (Procurement Regulations). For each contract to be financed by the Grant, the applicable selection method, the need for prequalification, estimated costs, prior review requirements, and time frame are agreed between the government and the WB in the Procurement Plan. The PPSD and a first draft of the Procurement Plan for the first year of the Project have been prepared and agreed with the WB. The Procurement Plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. The procurement procedures and standard procurement documents to be used for each procurement method, as well as standard forms of contracts, are posted on the WB’s website. In accordance with paragraph 5.9 of the Procurement Regulations, the WB’s STEP system will be used to prepare, clear, and update the Procurement Plans and review procurement transactions for the Project. This text, along with the Procurement Plan tables in STEP, constitute the Procurement Plan for the Project. The following conditions apply to all procurement activities in the Procurement Plan. The other elements of the Procurement Plan, as required under paragraph 4.4 of the Procurement Regulations, are set forth in STEP. 27. The WB’s standard procurement documents shall be used for all contracts that are subject to international competitive procurement. When approaching the national market, the Recipient may use procurement documents acceptable to the WB. The Procurement Plan in STEP will determine which contracts are subject to national and international market approaches. When approaching the national market, the country’s procurement procedures may be used in accordance with the National Procurement Procedures (paragraph 5.3) of the Procurement Regulations. This will be specified in the Procurement Plan in STEP. When the Recipient uses its own national open competitive procurement arrangements, as set forth in the Procurement Law 340-06, such arrangements shall be subject to paragraph 5.4 of the Procurement Regulations and its following conditions. When national procurement arrangements other than national open competitive procurement arrangements are applied by the Recipient, such arrangements shall be subject to paragraph 5.5 of the Procurement Regulations. 28. As identified by the Procurement Plan, contracts for leased assets, procurement of secondhand goods, Page 54 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) and domestic preference will be bound by the Procurement Regulations. Procurement Regulations will be applicable as specified under paragraph 5.10 for leased assets and paragraph 5.11 of the Procurement Regulations for procurement of secondhand goods. Domestic preference will be specified under paragraph 5.51 of the Procurement Regulations (Goods and Works). 29. Sub-projects. Procurement under Subprojects included in Component 3 will be subject to the Procurement Regulations. Together with the AC, the PIU will formalize the selection criteria and prepare the terms of reference for calls for sub-project proposals. Purchases for sub-project beneficiaries will be completed by the PIU following the provisions of the WB Procurement Regulations. The POM will describe in detail the responsibilities of the PIU in this aspect, from sub-project selection to procurement and implementation. The Technical Support Group will assist the PIU, with specialists from the ministries involved to oversee and monitor sub-project implementation. Budget estimations for Component 3 have provisions for technician oversight and monitoring activities related to the implementation of the sub- projects. 30. Capacity Assessment. An assessment of the PIU was conducted for the preparation of the Project, fiduciary responsibilities will be managed by a PIU housed in MARN, it is recommended that a qualified Procurement Specialist with relevant experience in WB Procurement Regulations and procedures is hired for the Project. The TORs and candidates proposed for the Procurement Specialist position shall be approved by the WB. Given MARN’s previous experience in the implementation of WB Projects, a moderate procurement risk has been assigned for the Project.   31. POM. The POM will include the relevant procurement procedures, including detailed institutional procedures, accountabilities, the composition of technical and administrative evaluation committees, time frames for approvals, etc. The POM also covers topics related to conflicts of interest, fraud, and corruption. 32. Frequency of procurement implementation support. Contracts subject to post review would be reviewed by the WB once a year; and based on the findings of these reviews and the proposed ratings, the WB may determine the revision of the prior review requirements. Page 55 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) ANNEX 2: Detailed Project Description and Selection of Project Sites Detailed Project Description 1. Each component contributes strategically to the achievement of the PDO and LDN. Component 1 provides a platform for governance and knowledge and science-based land use zoning and planning, social inclusion of vulnerable populations, strengthening capacities, and learning through participation. This convening platform should lead to agreements on a shared vision for the watershed and future monitoring of long-term trends. Component 2 strengthens the adoption of sustainable rice production to reduce environmental impacts on surrounding ecosystems and improves in-country technical capacity to promote and monitor those impacts. Component 3 restores ecosystem services such as hydrological cycles, biodiversity, and habitat connectivity through biodiversity-friendly productive activities and active restoration practices, while increasing capacity through technical assistance, training, and information dissemination. All three components contribute to preparing the GoDR and stakeholders to monitor and evaluate environmental trends and impacts, such as changes in habitat connectivity, system-level water footprints, and biodiversity. 2. Training and capacity building activities under the Project will incorporate the checklist for LDN transformative projects and programs, developed to help country‐level project developers and their technical and financial partners to design effective LDN projects, tools, and resources for LDN implementation in the UNCCD Knowledge Hub. The project adopts the land degradation response hierarchy of “Avoid, Reduce, Reverse” by means of (i) focusing on improving enabling conditions, governance, coordination, and monitoring of land use management at various hierarchical levels involving multiple stakeholders (Avoid); (ii) emphasizing increased sustainability and productivity of rice production systems (Reduce); (iii) and using agroforestry systems and active ecosystem restoration to restore and reduce ecosystem services (Reverse). 3. The project includes analyses, knowledge management, and coordination efforts to benefit both Yaque del Norte and Yuna watersheds (see Project Area Map in Annex 7). Investments in on-the-ground activities to reduce land degradation and the establishment of governance bodies for watershed management will be targeted in a subset strategic area, prioritized due to its ecological and biodiversity significance, the opportunity to reduce land degradation, and the likelihood of stakeholders adopting and scaling up sustainable production practices. This targeted area drains into the Yuna River and includes 6 provinces and 18 municipalities. It includes a small upland portion (1 province and 2 municipalities) of the Yaque del Norte basin and the Madre de las Aguas mancomunidad (i.e. the Constanza and Jarabacoa municipalities) and a large portion of uplands and lowland of the Yuna basin (6 provinces and 16 municipalities). Activities will complement other ILM projects in the area, for example, through Component 1, experience with land use governance in Yaque del Norte under the GoDR’s ILM Program will be transferred to Yuna through this project’s activities. Similarly, existing resources for the broader ILM Program in the Yaque del Norte watershed, mainly from Plan Sierra, will enable the project to concentrate Component 2 in Yuna, ensuring that efforts are not duplicated and the potential for scaling up sustainable approaches is maximized across both watersheds. 4. Component 1 focuses on capacity building support and strengthening of the Recipient’s institutional architecture for land use planning at the micro-basin, sub-basin, and basin levels in the Yaque del Norte and Yuna Watersheds. Barriers to ILM and LDN will be resolved, such as: (a) weak and uninformed capacities and coordination between sectors to align and implement policies and regulations at the basin Page 56 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) and landscape levels, as well as between state, agencies, and municipal government authorities and civil society; and (b) insufficient baseline data, weak monitoring capacities, and lack of information to measure impacts within sectors and at the ecosystem level and to plan and manage land use. This component will be implemented in both the Yaque del Norte and Yuna watersheds and will be led by MARN, with close collaboration from the Ministry Provincial Directorates, MAG, and the Land Use and Territorial Planning Directorate of MEPyD. 5. Sub-component 1.1. will strengthen capacities for ILM through MARN’s Vice Ministry of Soils and Water, Vice Ministry of Protected Areas and Biodiversity, and Ministry Provincial Directorates; the UNCCD GTI; MAG; and MEPyD’s National Water Coordination Board. 6. Sub-component 1.2. will finance an Environmental Agenda, Strategic Plans for Territorial Development, and a Knowledge Platform for sharing best practices. 7. Component 2. is designed to evaluate and demonstrate the relative benefits of different approaches to sustainable rice production. By building producer capacity and establishing demonstration farms, the component intends to provide private producers in the Yuna watersheds with the knowledge, incentives, and skills to adopt sustainable technologies to increase productivity and soil fertility, while reducing water and agrochemical usage. These practices should positively impact critical habitats in Yuna such as rivers, coastal wetlands, estuaries, and aquifers, as well as the people who depend on their ecosystem services. 8. The component will be led by MAG, with the collaboration of MARN, other relevant ministries, IDIAF, the private sector, local NGOs involved in the sustainable management of rice production, and local rice grower organizations. The component will increase MAG’s ability to: i) establish a reliable baseline for rice production; ii) validate and demonstrate, through a participatory process, improved models for rice production; and iii) scale successful approaches to critical regions by 2025, including different geographies and socioeconomic groups within the country. 9. Sub-Component 2.1 will Identify and develop environmental and social baselines for sustainable rice demonstration plots. 10. Sub-component 2.2. aims to showcase improved rice production technologies in strategic on-farm locations identified by MAG as critical for exposing rice producers to sustainable practices, validating them against current technologies under realistic conditions, and increasing technical capacities and adoption through training, technical assistance, and information dissemination. The plots will provide learning opportunities and training sites for MARN and MAG extensionists, technical teams, and farmers, and will allow for the measurement of relevant parameters and impacts, including those on hydrology and biodiversity. Validated technologies will be disseminated to farmers through low-cost, highly effective techniques such as farmer-to-farmer exchanges, field days, fairs, farmer field schools, and competitions, and indirectly via information dissemination to private companies and input suppliers. Participants in demonstration plots will periodically share information and lessons learned to boost knowledge generation and assure consistent implementation. These activities will promote gender inclusion in rice production through workshops, seminars, and coaching sessions for men and women on business development, including regulations, opportunities for finance, public speaking, work/life balance, management of family businesses, and leadership. Moreover, all activities and results will be socialized through the Knowledge Platform included in Component 1 and through the broader GoDR ILM Program in Yaque del Norte and other watersheds. 11. Component 3 will finance a series of subprojects. Among others, five sub-projects selected based on Page 57 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) biodiversity and other criteria, including prioritization of areas identified as critical by the PAN-LCD and ER Program, to ensure that resources are used effectively to address land degradation and contribute to providing Global Environmental Benefits. Criteria for prioritization will be derived from the Environmental and Social Characterization and biodiversity baseline analyses developed under Component 1 with a specific focus on geographic areas that are relevant for biodiversity and ecosystem services conservation. This process will include the use of satellite images managed by the DIARENA within MARN. Some of the relevant priority ecosystems are those identified as currently degraded or used for agriculture and cattle ranching, with the potential for biodiversity connectivity or water recharge, or those areas bordering forests currently under high land use change pressure. These criteria will be agreed upon in the POM and approved by a committee of diverse stakeholders, including MARN, MAG, INDRHI, and members of civil society. 12. The sub-projects will benefit from inputs (goods and potentially small works53) for ecosystem restoration, economic diversification, and the establishment of agroforestry systems. Beneficiaries are expected to include agricultural producer organizations, local communities, or NGOs. Special provisions will be taken to ensure the participation of women, entrepreneurs, and young farmers, and those sub-projects that incorporate these aspects will be prioritized. The effective participation of sub-project participants will be enabled by technical assistance for the preparation of proposals. Once projects are selected, sub-project managers and beneficiaries will receive training and technical support for project management and implementation, relevant technical themes, gender inclusion, and monitoring. Furthermore, good practices and lessons learned identified as a result of the sub-projects will be disseminated via the Knowledge Platform of Component 1, the dissemination of communications materials, and public events. These efforts, as well as coordination and knowledge sharing among sub-projects, with the Yaque Basin Committee and with wider government programmatic efforts in the Yaque del Norte watershed, will also aid in scaling up results. Selection Process and Criteria for Project Activity Sites 14. The Yaque del Norte watershed was selected in 2017 through a process of consultation and dialogue between the WB and MARN, MAG, and MEPyD during multiple preparation missions related to the "Resilient Agriculture and Integrated Management of Water Resources in the DR" (P163260) project. The process is based on the analysis of the socio-environmental characteristics of the watersheds, principal problems, socio-economic priorities of the government, and the impact of these factors on ecosystem services, among others. To apply an ILM-LDN approach, the landscape should combine natural ecosystems, a variety of land uses, and economic and cultural activities in the area. Within the landscape, selection characteristics and criteria considered were (a) presence of a long-term vision and visible landscape collaboration among key groups; (b) location within Yuna and Yaque del Norte Watersheds; (c) Existing biodiversity or potential for restoration; (d) Forest cover and/or combat land degradation; (e) Existence of target systems; (f) Synergy with programs and projects. 53It is expected that the majority of sub-project inputs will be goods such as seedlings and equipment, but depending on sub- project proposals, this could also include small-scale infrastructure works and rehabilitation/refurbishment such as nurseries or other small works related to restoration or coffee or cacao production, for example. If included in sub-project activities, works would be done in a manner to ensure that any potential E&S risks and impacts are properly managed and are consistent with the World Bank’s Environmental and Social Framework (ESF) and national applicable legislation and it do not induce involuntary resettlement (in the case of using unoccupied government owned land, voluntary land donations or willing buyer-willing seller arrangements). Page 58 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) 15. Together, Yaque del Norte and Yuna Watersheds form the Atlantic drainages of an area known conceptually as the “Madre de las Aguas” or “Mother of Waters,” which covers approximately five percent of the country's territory and is critical for biodiversity, the economy, and delivery of water to DR residents. In this macro landscape, the majority of the Yaque del Norte watershed is drained by the river of the same name that flows toward the northwest corner of the country, while the smaller southeastern area of Yaque del Norte and most of Yuna flows into the Yuna River drainage area. Given the wide altitudinal range (from 0 to 2800 meters above sea level) multiple ecosystems are present, hosting critical biodiversity for the Caribbean region and globally. The targeted area hosts seven Key Biodiversity Areas (KBAs) and connects ecosystems such as the Upper and Lower Montane Humid Forests to Lower Yuna National Park, a Ramsar site declared in 2013 to protect the important lowland coastal forests, wetlands, mangrove swamps, seagrass beds, and marine areas of the Samaná Bay at the mouth of the Yuna River. More than 34 percent of Yaque del Norte is part of the National System of Protected Areas and includes seven national parks. Land use under agriculture accounts for 62 percent of the total area of the river basin and includes over 75,000 agricultural production units, covering 1.1 million ha with intensive annual crops (principally rice, bananas and plantains, and tobacco), representing 17 percent of the watershed. I. Site Selection Criteria, Component 1 16. Sites for biodiversity and climate monitoring will be selected through stakeholder consultation. During the initial stages of project implementation, MARN and supporting line agencies, such as the National Meteorological Office (Oficina Nacional de Meteorología), will select key ecosystems and elements based on current cartography and existing literature. This process will be concluded and presented at the project inception workshop targeted for 3 months after project effectiveness. 17. Site selection criteria for the two mancomunidades, one in the upper portion of the landscape and the other in the lower portion, include: the history of associations and cooperation between municipalities, their level of organization, the willingness of the municipalities to establish and implement common environmental agendas, and common characteristics of municipalities within a mancomunidad. An existing mancomunidad in the Madre de las Aguas region has been selected based on its history of working effectively with the government and NGOs. A second mancomunidad will be designated in the lower portion of the landscape. This decision will involve municipal forums, the Ministries of Economy, Planning, and Development, together with the Ministries of the Environment and Agriculture. II. Site Selection Criteria, Component 2 18. The selection criteria for demonstration plots for sustainable rice production technologies have been suggested by MAG and IDIAF scientific and technical experts. They consider the geographic concentration and accessibility of the sites to assure cost-effectiveness, the willingness of producer organizations to implement demonstration plots, and producer commitment to participate in the training and dissemination processes related to the improved technologies. The final site determinations will be based on the initial results of climate, agrochemicals, and biodiversity baseline studies that will be financed under this component, as well as edaphic, climatic, and hydrologic characteristics, and will be validated by experts. The definitive list of sites will be presented at the inception workshop . III. Site Selection Criteria, Component 3 19. The selection of the geographic and thematic areas of Component 3 will be determined through analytical and participative processes and will be based on the results of the environmental characterization activities and the Environmental Agenda at the watershed level (Sub-Component 1.2). Page 59 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) The Basin Committees led by MARN will produce the final eligibility and selection criteria and present them to the WB for approval. All GEF and WB policies will be incorporated into the eligibility, selection, and approval criteria. The approved criteria will be incorporated into the POM. The Basin Committees, including guidance from MARN and MAG, will define the areas or sites of intervention for sustainable production systems and will identify critical areas for the restoration of biodiversity and hydrological services. For the selection of sub-projects within these critical areas, MARN and/or MAG regional directorates will produce, publish, and promote the eligibility and selection criteria for qualified organizations, such as established NGOs, local water committees, and Civil Society Organization among others. Sub-projects for financing must meet the criteria established. IV. Activity Eligibility and Selection Caveats 20. Exclusion list. The project will not support the following activities, either financially, as a counterpart or as indirectly related activities, since they contradict the WB´s ESSs and the general spirit of the Project: (a) Activities that promote changes in cover and/or land use from natural vegetation to another cover or use; (b) The conversion, deforestation, degradation, or any other alteration of natural habitats, including among others, their conversion for agricultural uses or monoculture forest plantations; (c) Activities within Protected Areas of the National System of Protected Areas, with the exception of their areas of influence where pressure is exerted on the forest resource; (d) Alteration of the water course and/or damming; (e) Dam building; (f) Construction and/or rehabilitation of irrigation systems and/or wells for water supply; (g) Activities that may affect international waters or shared waters; (h) The purchase of chemical products to combat pests, such as synthetic pesticides; (i) Production or trafficking resulting from illegal activity under national legislation or international conventions and agreements; (j) Infrastructure works that can promote conversion, deforestation, degradation, or any other alteration of natural habitats; (k) Trade in wildlife or its products regulated by the Convention on International Trade in Endangered Species convention; (l) Activities that have not received the support of the communities that live in the areas where the activities will take place; (m) Activities that generate physical displacement of people; (n) Activities that take place in areas where cultural heritage is affected, or the requirements established in the ESMF are not taken to avoid affecting cultural heritage; (o) Activities carried out on disputed land; (p) Support for proselytizing or electoral campaigns; (q) The development of crops associated with the production of alcoholic beverages, tobacco or drugs; (r) The use of genetically modified organisms; (s) Activities that may violate human rights. Page 60 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) ANNEX 3: Economic and Financial Analysis I. Introduction 1. The EFA is an ex-ante evaluation of the project’s future performance, considering the projected outreach to beneficiaries, land, returns from improved productivity and cost efficiency, and projected cost streams associated with the interventions. The EFA of the project is undertaken to assess the economic soundness of the project’s proposed intervention and the likely impact on beneficiaries. The analysis takes into account the estimated incremental benefits and costs of the project-related investments to society as a whole. Crop budgets have been prepared to assess the financial impact from the point of view of the beneficiaries and to provide the basis for the economic assessment. 2. Co-benefits of the project interventions, including important climate co-benefits, will be carbon sequestration and mitigated/avoided GHG emissions, the conservation of biodiversity, reduction in forest loss and forest degradation, improved sustainable livelihoods for local communities, and improved climate change resilience. The GHG mitigation potential is calculated separately through the EX-ACT analysis. The economic value of the emissions mitigated through the project’s interventions is included in the EFA based on the latest WB guidelines. The social benefits and climate co-benefits expected from the project result from its focus on rural poverty reduction, job creation, and climate resilience enhancement. The project will provide additional sources of income for poor rural households, serve to diversify rural incomes, and improve environmental sustainability, thereby contributing to reduced exposure and vulnerability to climate change. 3. The crops and products considered in the EFA are rice, coffee, and cocoa (representatives of the middle and upper sections of the river basin). For each one, productive models were constructed based on official information provided by MAG (inputs, prices, outputs) to simulate the financial behavior considering the impact of the incorporation of sustainable landscape management proposed by the project in costs and yields. In addition, a key component of this project is the reforestation of degraded land, represented in the EFA by available data on broadleaf restoration. 4. The total investment cost considered for the financial analysis is the US$4.06 million being financed by the project. Benefits expected from the project include increased production, improved productivity, increased marketed production, and various climate co-benefits. Additional production and its value have been estimated using representative crop budgets benefiting from climate-smart agriculture (CSA) packages, while the GHG accounting has been estimated using the EX-ACT tool. 5. Increased output, income, and employment in the targeted zones will result in increased demand for goods and services, which is expected to generate additional income and employment effects beyond the agriculture sector. As the project is supporting the production of major food and commercial crops, the increased output from the targeted areas will increase national production and thereby contribute to growth in overall GDP and national food security. Furthermore, it is expected that consumers will benefit from reduced consumer prices and improved availability of better quality locally produced food commodities. 6. The project will provide the key incremental financing to enable the Dominican rice industry by scaling up sustainable and productive rice production systems. The project will accomplish this by determining the best suite of improved rice production systems, gauge their environmental impacts and disseminate the lessons learned. The project will also directly finance the conversion of 1,080 ha to agroforestry and Page 61 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) restoration of 210 ha of forest areas. This will not be possible without the project. In addition, the project financing is expected to leverage parallel financing of approximately US$16 million. II. Financial Analysis assumptions 7. The analysis uses a cash flow model over a 20-year period that includes all investment and operational costs of the CSA packages, as well as the incremental net revenues derived from the financial models. The future scenario assumes no cropping pattern switches during project implementation. It also assumes a preliminary 30 percent failure rate of supported activities based on the results of similar projects in the region.54 The financial discount rate is assumed as 12 percent.55 For coffee and cocoa, scenarios of converting non-woody cultivations in degraded lands to agroforestry were modeled:56 i. Baseline Scenario: For coffee and cacao, the baseline scenario is non-woody crops. ii. For Agroforestry Cacao: Taken from the project of the National Confederation of Dominican Cocoa Farmers57, but also takes into account the parameters found in the preparatory studies for the Agroforestry Project of the Presidency and the corresponding IADB credit.58 iii. For Agroforestry Coffee: Based on the information provided by INDOCAFE, which considers an investment plan for a coffee task and allows establishing the association for shade with Guama trees. INDOCAFE does not consider associations with other types of crops or marketable species in its cost model. To extrapolate the model per coffee task at full exposure to a cash flow for one ha of coffee under shade an area occupation ratio of 91 percent for coffee and 9 percent for shade is considered. This is the relationship between the number of coffee and shade trees used in French Agricultural Research Centre for International Development (Centre de coopération internationale en recherche agronomique pour le développement, CIRAD) & World Agroforestry Center, 2018. iv. For all three production models mentioned above used in this analysis were originally developed for the ER Program.59 8. The baseline scenario for restoration of degraded areas utilizes data for broadleaf forest restoration given the available information. This assumes that these areas are gradually being degraded through the extraction of wood. It is assumed that each degraded ha, on average, allows for the extraction of wood for 15 years (until it is totally exhausted). The data used is consistent with the data used for the ER Program60. It is assumed that an establishment cost of US$1,773/ha and an annual maintenance cost of US$701/ha. These 54 This assumes success in only 70% of the area targeted to be financed under the project. For rice extension this success rate is slightly lower at 65%. 55 In the absence of standardized national parameters, the discount rates were estimated based on discussions with MARN experts and analysis from associated Projects in the country, including the DR Resilient Agriculture and Integrated Water Resources Management (P163260). 56 The NPV figures calculated using this method reflect the return of the investment but not the return to the beneficiary of the project, which is higher, since the initial investment/establishment cost is subsidized by the project. 57 Conacado, 2017 58 CIRAD & World Agroforestry Center, 2018 59 More details for the project are available in the detailed report developed for MARN by a consulting firm. MARN, 2019 “Evaluation of costs and benefits and preparation of a financing plan for the ER Program in the DR” 60 It is assumed that one degraded ha, on average, would present an economic flow equivalent to 29% of the flow of the totally degraded ha. Page 62 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) numbers were provided by MARN based on their experience with the Quisqueya Verde Program. The benefits of reforestation are derived from a study conducted by MARN. 9. For the Rice models, the production method is transplanted rice, the data for revenue and cost of rice production is taken from data from MAG website.61 A model of 20 years is used, with the first year modeled with the additional cost of investment and with operating costs of scenario without project. For rice three different changes in practices are modeled, if the crop structure remains constant during the lifetime of the project: i. Adoption of sustainable rice production, derived from Sustainable Rice Intensification (SRI) technology, on 80 acres. Based on data from an experimental trial conducted by IICA, an establishment cost of US$174/ha is assumed.62 Based on this data we assume an increase in yield of 9 percent and a decrease in the cost of 10 percent. ii. For the next scenario, we assume a yield increase of 9 percent on demonstration plots of 50 ha. This is based on data provided by BioArroz and assumes switching seed varieties to JUMA68-18. In addition, a 20 percent decrease in total costs is assumed.63 iii. For the third scenario, we assume a 9 percent decrease in agrochemical costs (translates to a 2 percent decrease in total costs) for a total area of 3,600 ha. This is based on the impact of training of extension officers on improved rice production financed under Component 2 and through the demonstration plots described in the first two scenarios.64 10. Assumptions: (i) Gradual inclusion into the project is in four stages: 20 percent of ha are incorporated into the project at year 1 of implementation, 50 percent at year 2, 20 percent at year 3, and the remaining 10 percent at year 4; (ii) A fixed exchange rate of 1 US$=58 RD$. 11. Total ha that will be benefited by the project are expected to be as follows: Table A3.1. Establishment costs and number of ha Ha in which Establishment Cost Product investment is (US$/ha) being made Rice-IDIAF 80 174 Rice-BioArroz 50 N/A Rice-Extension65 3,600 N/A Cacao 540 4,046 61 http://agricultura.gob.do/category/estadisticas-agropecuarias/costos-de-produccion-productos-agropecuarios/costos-de- produccion-por-productos-agropecuarios-2019/cereales/ 62 Communication from IICA to World Bank dated Mon, Aug 10, 2020. Establishment Cost was based on total cost for 10 farms of 5 ha each. Total cost was then divided by 50 ha. 63 Specific practices to be promoted include low water consumption, mechanized broadcast seeding, and varieties of high genetic quality. 64 The decrease of 2% in total costs is a conservative estimate, based on discussions with MAG experts, 65 Based on the assumption that 1,850 farmers will be trained in improved rice production practices and 65 percent of these farmers (1,200) will adopt these practices. An average farm size of 3 ha is assumed to get to the land area of 3,600 has. Page 63 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) Coffee 540 2,404 Restoration 210 1,773 III. Carbon sequestration and storage 12. The incremental carbon benefits were modeled over a period of 20 years, although it is expected that the impact would last longer. We considered a shadow price of US$38/tCO2-eq for the initial year of the project, with an annual incremental rate of 2.25 percent. IV. Financial Analysis Results 13. The NPV of each product over 20 years is reported to indicate its financial feasibility: Table A3.2. NPV of each investment Product NPV Financial (US$/ha) Rice-IDIAF 5,058 Rice-BioArroz 7,678 Rice-Extension 528 Cacao 10,564 Coffee 6,243 Restoration 435 14. Considering all these assumptions, the financial NPV (without considering the benefits of carbon sequestration) and the internal rate of return for the agricultural sector were estimated for the project. Total NPV is estimated to be US$6.92 million, with an internal rate of return of 47 percent. V. Economic Analysis Assumptions and Results 15. The economic benefit from agriculture comes from a cost-benefit analysis, which considers the increase in production given by the incorporation of sustainable landscape management, comparing the situation with and without the project. It considered the same assumptions that were specified in the financial analysis, but with the difference that the economic analysis included economic prices. Thus, the conversion factor for the price of unqualified labor and the factor for conversion inputs price are 0.94 and 0.867, respectively.66 16. The economic discount rate is based on the WB’s guideline recommendation (6 percent). However, an extra 4 percent was considered, to add rigorousness by contemplating different risks and inflation associated with the country and sector. Thus, a 10 percent discount rate is used. 17. The NPV of each product over 20 years is reported to indicate its financial feasibility. Table A3.3. NPV of each investment Product NPV Economic (US$/ha) Rice-IDIAF 2,634 Rice-BioArroz 8,744 Rice-Extension 79 66In the absence of official nominal value conversion rates for DR, Costa Rica’s parameters were applied as a proxy, considering the macroeconomic similitude. Page 64 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) Product NPV Economic (US$/ha) Cacao 9,355 Coffee 5,452 Restoration (Humid) 1,596 18. Considering all these assumptions, without considering the benefits of the GHG estimates, the total economic NPV is estimated to be US$7.01 million, with an internal rate of return of 40 percent. 19. In accordance with the WB’s Environmental Strategy and its Climate Change Action Plan, the carbon balance (net GHG emissions reduction) of the project has been evaluated and integrated into the economic analysis. Along the 20 years period of the analysis, the project would lead to a reduction of 531,409tCO2-eq. The economic value of the net reduction in tCO2-eq, given the project's interventions, is valued at shadow prices and is included in the economic analysis in accordance with the guidelines of the WB.67 When the benefits of GHG sequestration are included, the internal economic rate of return is 52 percent, and the economic NPV is US$13.07 million. VI. Sensitivity Analysis 20. A sensitivity analysis was conducted to simulate the behavior of profitability indicators considering variations for two key variables: increment in investment costs and reduction in benefits. Table A3.4. Sensitivity Analysis Economic analysis Variable Variation Total net present Internal Rate value (million US$) of Return Increment in 20% 12.56 46% investment costs 40% 12.04 40% Reduction in -20% 10.22 46% benefits -40% 7.36 40% Increase in costs Cost 40% increase and reduction in Benefits 40% 6.33 30% benefits decrease 21. The previous table shows that the robustness of the project and indicates that it will be creating economic and financial benefits even if the project faces contingencies that increment investment cost or that delay the benefit generation. 67 World Bank. “Guidance note on the shadow price of the carbon in the economic analysis”. Accessed 08/15/2020. http://pubdocs.worldbank.org/en/911381516303509498/2017-Shadow-Price-of-Carbon-Guidance-Note-FINAL-CLEARED.pdf Page 65 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) ANNEX 4: Gender Analysis and Action Plan I. Gender Analysis in Productive Agricultural and Forest Sectors 1. During project preparation, a preliminary diagnosis of gender-relevant issues to the Project intervention was carried out. This diagnosis is built on the gender analysis in progress under REDD+ to better identify gender needs, including women´s access to resources, services, and opportunities, and strategic gender interests related to decision-making. The diagnosis includes the identification of opportunities to align with existing programs and initiatives such as the Progressing with Solidarity Program of the Vice President of the Republic, among others. 2. According to the gender analysis, the DR has achieved important economic progress during recent years, but gender inequality remains. According to the latest Report on Human Development (2019), the DR has a gender inequality index value of 0.453 and is ranked 104 out of 189 countries in the 2018 index.68 There is a higher percentage of poor women (30 percent) than men (27 percent) at the national level, and within the group of women, those who live in rural areas are the most affected by poverty (40 percent).69 Significant gender gaps still exist, mainly in terms of economic opportunities, health, violence, and political leadership. Although women have more access to the educational system than men, women face a higher poverty rate, less participation in the labor force, lower income, little dynamism in their careers, and low participation in decision-making spaces. Women's entrepreneurial activities are characterized as low value-added activities (such as homemade sweets, beverages, eggs, etc.), little integration with international markets, and low productivity. Women have high mortality from sexually transmitted diseases, femicides, physical and sexual violence, and teenage pregnancy.70 The DR has the fifth highest rate of femicides within the LAC region. 3. In rural areas, women’s economic empowerment and participation in economic activities are challenged by land rights, significant participation in non-remunerated activities, and low educational endowments. Women do not obtain or enjoy fewer benefits accruing from their participation in agricultural production, which in part drives them to depend on additional income, in addition to taking care of social reproduction responsibilities (housework, family care, food, etc.). A qualitative study carried out in 201871, reported that a large number of rural women, in addition to their domestic tasks, perform unpaid work alongside men on crop and animal farms: planting, weeding, harvesting as well as raising livestock; feeding and taking care of sick animals; and cooking for other farm workers. Some women also work outside the home as seamstresses, employees, or owners of shops (such as grocery stores or kiosks), as well as administrative assistants, among other activities. 4. Women also have less access to land. A considerable number of women are formal or informal farm owners, yet they are unaware of land management. Limited participation in farmer organizations represent a barrier to access to certain programs, benefits, and international cooperation project activities. For example, training in agricultural issues and community development is linked closely to membership in local producers’ organizations. Limited access to training opportunities related to agricultural techniques and entrepreneurship limits women's participation in such activities, increasing skills gaps and low remuneration 68 Report on Human Development, 2019. 69 SISDOM, 2017 70 Inter-American Development Bank (IDB), 2019. Marques-Garcia Ozemela, Luana. Desigualdades de género en República Dominicana 2018 – 2020. 71 Oficina Nacional de Estadísticas (ONE), 2018. Medición del aporte de las mujeres en las actividades agropecuarias en República Dominicana. Page 66 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) comparing to men. In the agro-industrial sector, there are gaps related to gender equality, though data is scant. 5. In the Yaque del Norte basin, women make about 49.6 percent of the total population (approximately 1.8 million inhabitants), but only 16.3 percent of the 177,799 producers. In the Yuna basin, women make up 48.6 percent of the total population (611,077 inhabitants according to National Statistics Office (Oficina Nacional de Estadísticas, ONE) census) and about 19 percent of the producers. II. Preliminary GAP / Project Gender-Sensitive Activities 6. Within this legal and policy context, the project has developed a preliminary GAP that details specific activities through which the project will address gender gaps in the project watersheds. The GAP includes indicators to monitor the progress of specific activities in addition to the gender-sensitive indicators already included in the project's Results Framework. These indicators could be included in the POM to ensure regular monitoring and checking. Analytical activities are also envisioned to better understand women’s participation in project-supported production activities. The project will support and monitor women’s participation in all project activities. Gender inclusion will be promoted through the following: a) Targeted capacity building for women both at governance and production levels and promoting female entrepreneurs in agribusinesses. b) Promotion of participation of women in decision-making processes at the farm and community level. c) Promotion of participation in decision-making levels at the municipal, basin, watershed, and landscape levels. Activities will include targeted workshops for men and women on gender inclusion including related to planning, management, and the promotion and participation of women in governance and decision-making structures. There will be sensitization workshops for men and women on creating gender safe spaces, reducing cultural marginalization of women, female leadership, and promoting the safety and security of women participating in agricultural activities. d) Promotion of female leadership in efforts linked to agribusiness and income diversification activities. Activities will include targeted workshops, seminars, and coaching sessions for women on business development including regulations, opportunities for finance, public speaking, work/life balance, management of family businesses, and leadership. The project may also support the development of women's business networks. e) Gender promotion in hiring practices. The project will ensure fair and transparent consideration of all job candidates based on competence, skills, and objective criteria and will strive for a balanced gender ratio among employees. Men and women will receive equal wages for equal work. f) To ensure that the project promotes safe workspaces for women and prevents beneficiaries and workers from becoming victims of sexual harassment or social exploitation, the LMP included in the ESMF includes a Code of Conduct that addresses respectful interaction with the community in general, and on sexual harassment and sexual exploitation specifically. Both the LMP complaint response mechanism and the SEP include specific procedures and will train staff to register and submit complaints related to sexual harassment and sexual exploitation. Page 67 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) ANNEX 5: GHG Analysis I. Background and Methodology 1. The GHG analysis was done using the EX-ACT, which allows the assessment of a project’s net carbon balance, defined as the net balance of CO2 equivalent that was emitted or sequestered as a result of project implementation compared to a without project scenario. EX-ACT estimates the carbon stock changes (emissions or sinks), expressed in equivalent tons of CO2 per hectare and year. 2. Basic assumptions. For the GHG analysis, the selected soil type is High Activity Clay (HAC) soil, which is the dominant soil type in the lower part of the watersheds. The project's implementation period is five years, yet the GHG analysis was conducted for 20 years. The “without project scenario” is assumed to be equal to a “no project scenario” or “business-as-usual”. 3. Inputs to the analysis. The project interventions will directly and indirectly target an estimated area of 4,680 ha, including the adoption of improved rice production system in at least 3,600 ha, 1,080 ha of coffee/cacao agroforestry in the upper watershed, and 210 ha of degraded agricultural land restored, but indirectly a much larger area is expected to be improved through capacity building. Component 2 is mainly expected to result in sustainable rice production, whereas component 3 targets the implementation of sustainable productive activities of coffee and cacao systems and the restoration of degraded land. The improvements include sustainable management of soil (tillage, nutrient application), selection of improved genetic material, and agroforestry linked to sustainable coffee and cacao production. Table A5.1 provides information on the targeted systems by activity type. Tier 1 Intergovernmental Panel on Climate Change (IPCC) emission factors are applied for all estimations. 4. Outcomes. Over a 20-year period, the project is expected to reduce or avoid 531,409 tCO2-eq. By mid- term (year 3) and the end of the project (year 5), 13,542 tCO2-eq and 72,157 tCO2-eq are expected to be reduced or avoided, respectively; these targets are included in the project’s Results Framework. Table A5.1. Inputs for GHG accounting. Activities Description Direct and indirect contributions from improved rice production systems - Component 2 Sustainable rice Expansion of sustainable rice production systems is an economic and production systems environmental priority for the nation that realizes the need to reduce the heavy water footprint, reduce the heavy reliance on agrochemicals, and associated impacts on the environment, especially wetlands, river systems, and estuaries. Reducing water and agrochemical inputs and reducing the crop cycle are core strategies in reducing the costs of production. Consequently, lower chemical inputs will have a positive cascade effect across critical habitats. Only direct impacts of activities are used to estimate the GHG mitigation potential, such as improved water management before and during rice production, reduced production cycle, and more efficient inputs of agrochemical products Direct contributions - Component 3 Perennial agroforestry Agroforestry systems will be introduced mostly linked to coffee and cacao to systems (i.e. coffee, replace annual crops. This will improve soil conservation, upstream water cacao) management, and economic benefits for producers. Page 68 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) Improved soil and Using improved varieties, increasing crop residues, nitrogen (N) use efficiency, agrochemical and decreased N losses: adjusted application rate, timing, and location, reduced management in or zero tillage, with mulching, including conservation agriculture. degraded agricultural land Table A5.2. Total GHG mitigation potential of the project. Gross fluxes Components of the project (All GHG in tCO2-eq, Positive = source / negative = sink) Without project With project Balance Transformation to Agroforestry 0 -11,603 -11,603 Agroforestry systems (coffee, cacao) 0 -212,795 -212,795 Rice improvements 570,825 317,342 -253,483 Agricultural land restoration 0 -4,295 -4,295 Agrochemical inputs 238,759 189,526 -49,233 Total 809,584 278,175 -531,409 Per hectare 200.9 69.0 -131.9 Per hectare per year 10.0 3.5 -6.6 Table A5.3. Percent uncertainty in the estimations (mainly due to emission factors). Without 809,584 ±28.8% With 278,175 ±22.1% Net balance -531,409 ±22.5% Page 69 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) ANNEX 6: Theory of Change 1. The project forms an integral part of the GoDR’s ILM Program in Yaque del Norte and Yuna watersheds. Together with ongoing programs and existing and expected parallel financing for ILM activities, the project aims to address the causes of landscape degradation, soil and water contamination, and deforestation, which threaten biodiversity and agricultural sustainability, driven by unsustainable production practices, low levels of governance and institutional coordination, and limited technical capacities for land use planning that incorporates environmental sustainability criteria. Scaling up these activities and incorporating lessons learned more broadly in Yaque del Norte and Yuna will be a priority of this project, which will also leverage the broader ILM Program financed by the GoDR. Therefore, the Theory of Change differentiates between the expected outcomes for the project and the broader Program (see Figure A7.1). Overall, the project will benefit seven Key Biodiversity Areas, seven National Parks, and 10 endangered species. Incorporation of these results into the ongoing GoDR’s ILM Programs in Yaque del Norte and Yuna watersheds will extend these results to a wider geographical area and population, resulting in more sustainable integrated landscapes and improved LDN, improved livelihoods of the populations, and increased landscape resilience to climate change and extreme events. Figure A7.1. Theory of change Page 70 of 71 The World Bank Integrated Landscape Management in Dominican Republic Watersheds (P170848) ANNEX 7: PROJECT AREA MAP Figure A8.1 Map of the project area Page 71 of 71