Updated Project Information Document (PID)
Report No: AB365
Project Name MOLDOVA - AGRICULTURAL POLLUTION CONTROL PROJECT
Region Europe and Central Asia Region
Sector General agriculture, fishing and forestry sector (80%); General public
administration sector (20%)
Theme Other environment and natural resources management (P); Other rural
development (P); Environmental policies and institutions (S)
Project P075995
Borrower(s) GOVERNMENT OF MOLDOVA
Implementing Agency(ies) MINISTRY OF ECOLOGY, CONSTRUCTION AND TERRITORIAL
DEVELOPMEN
Address:
Contact Person:
Tel: Fax: Email:
Environment Category B (Partial Assessment)
Date PID Prepared October 1, 2003
Auth Appr/Negs Date September 23, 2003
Bank Approval Date June 15, 2004
1. Country and Sector Background
Environmental Issues: During the last few decades, the Black Sea suffered severe environmental damage,
mainly due to coastal erosion, eutrophication, conversion of wetlands, increased nutrient run-off from
agriculture, invasion of exotic species, and inadequate resource management all of which led to a decline of
its biological diversity, loss of habitat and long-term ecological changes. Black Sea Environmental Program
(BSEP) studies revealed that 58% of the total dissolved nitrogen and 66% of the total dissolved
phosphorous flowing into the Black Sea come from the Danube river basin. More than half of all nutrient
loads into the Danube river originate from agriculture, about one-fourth from private households and about
10-13% from industry.
The entire territory of Moldova (33,800 sq km) lies in the Black Sea Basin. About 34 % of the country
drains into the Prut River, a tributary of the Danube, approximately 60% into the Nistru (Dniester) River
and the rest into a series of small rivers that empty directly into the Black Sea. For over five decades,
unsustainable land use, excessive application of inputs, such as fertilizers, and use of heavy machinery
resulted in severe degradation of the land and environment (notably soil, water and biodiversity). Soil
erosion washes away an estimated 10 million tons of fertile soil annually. During the Soviet era, large
cattle, pig and poultry farms were established near rivers that lacked efficient manure management
practices. The discharge of untreated animal waste and manure is, in fact, one of the major pollutants of
Moldova's surface and ground water. The continued lack of efficient manure management practices is
having significant implications for groundwater pollution and drinking water supply for rural settlements in
Moldova. Samples analysed from about 70% of shallow wells which are the main source of drinking water
supply for rural communities revealed nitrogen concentrations in excess of the maximum acceptable levels.
(UN/ECE. The Republic of Moldova: Environment Performance Review. Geneva, 1998)
Nutrient discharge from agriculture is the most important contributor of water pollution in Moldova. Other
sources are inadequately managed municipal and industrial wastewater treatment plants. Nutrient run-off
to the rivers stems from: (i) environmentally unsustainable crop and soil management practices; (ii)
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inappropriate management, storage and disposal of animal manure, including dumping of manure in
household backyards and river banks; (iii) over-grazing; and (iv) mismanagement of wetlands. From the
Prut River basin alone, approximately 12.5 thousand tons of nitrogen and 1.5-2.0 thousand tons of
phosphorous are being discharged each year. Annual run-off from manure is estimated at 10.5 thousand
tones for nitrogen and 2.5 thousand tones for phosphorus (Nutrient Balancer for Prut River Basin Project,
1994).
Agricultural pollution, together with over-fishing, mismanagement of game sources, poaching, draining of
wetlands, excessive tree cutting have also led to the degradation of biodiversity, which has reached a severe
level in the Lower Prut River Basin. Hydropower stations built upstream have exacerbated the problem by
changing the site conditions in the area. Native flora and fauna species are severely threatened and, in
some cases, facing extinction. Privatization of farm land assets has led to farmers keeping livestock near
their households - in backyards or barns adjacent to houses - which is resulting in nutrient pollution
problems for the local drinking water supply. Groundwater pollution with nitrates and microbial organisms
has major implications from the point of view of drinking water supply for rural settlements in Moldova.
Agricultural Issues: Agriculture is the mainstay of Moldova's economy contributing approximately 33%
to GDP and accounting for 65% of the country's exports. With agricultural land covering 85% of the
country's territory (33,800 sq. km), in good years the agri-business sector accounts for 75% of the
country's total exports. The sector employs 40% of the republic's estimated population of 4.3 million (54%
of the country's population lives in rural areas where almost all of the labor force is engaged in agriculture).
This specialization in agricultural production is due to favorable climatic conditions and higher than
average soil fertility. Fertile chernozem soil dominates over 72% of the total agricultural land within the
country, which represents the highest percentage anywhere in the world.
Arable land represents 71% of the agricultural land; perennial plantations comprising orchards and
vineyards account for 14%. Pastures take up the remaining 15% of agricultural land. As a result of land
reform efforts started in 1992, over 80% of the agricultural land, and the overwhelming majority of state
and collective farms were privatized. Individual farmers now supply about 75% of the country's
agricultural produce. In all there are approximately 400,000 individual farms, averaging 1.5 ha in size.
Main agricultural products include grains such as wheat and maize, vegetables, fruits, tobacco, sugarbeet
soya beans, etc.
Agriculture provides the raw materials for Moldovan food processing industries such as wine and
beverages, sugar, oil and fats, bakeries, food concentrates, dairy products, meats, canned fruits and
vegetables, etc. It's share of over 50% in total industrial output reveals the importance of the food industry
to the Moldovan economy. Agricultural exports are the single most important source of foreign exchange
income.
For nearly a decade since independence in 1991, Moldova's agricultural sector performed poorly, with a
decline in production and exports. Agricultural GDP in 2000 was less than half of its 1990 level. While the
overall economy grew by 2% in 2000, agricultural GDP declined by 3%. Most of the decline was the
result of lower productivity with yields down 20-60% due to withdrawal of subsidies, fewer opportunities
to obtain credits and reduction in input use. The contraction in the agricultural sector resulted in farmers
opting for subsistence agriculture which emerged as the dominant food supply chain for immediate
households as well as extended families in urban areas. However, in the past few years, with the growing
acquisition of private land by farmers and the increasing dominance of private initiatives, the agricultural
sector is rebounding. Farm lands that were left fallow in the rural areas in the early years of transition are
now increasingly under cultivation. A vibrant and efficient commercial agricultural production sub-sector
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is also gradually emerging. Outputs from subsistence as well as commercial private farming are generally
not captured by official statistics since these ouputs often move through informal channels. The resurgence
in the agricultural sector provides a window of opportunity for the proposed project to ensure that the
benefits accruing from the improved agricultural sector are sustainable. As the agricultural sector grows, it
is critical to sensitize and educate the new farmers and agro-processors to the need for mainstreaming
environmental concerns into their agricultural practices so that the resultant agricultural sector is healthy
and sustainable and does not become a candidate for "clean up" efforts in the future.
With the agricultural sector's importance to the economy, in terms of GDP, employment, population, and
the large and increasing incidence of poverty among the rural population (55% of population lives below
national poverty line), Moldova will not be able to achieve sustainable overall economic growth without
generating sustainable growth in the agricultural sector. Key policy, structural and institutional issues and
constraints identified in the "Agricultural Strategy for Moldova � Accelerating Recovery and Growth"
includes the weak institutional capacity, a less than conducive legal, regulatory and operating environment
for the adoption of environmentally sustainable agricultural practices, the still fragile private enterprises in
rural areas with a tendency to try to revert to old style collective approaches and the slow transformation of
the agro-processing sector. The RISP addresses many of these constraints and the proposed APCP will
create synergies and provide additional grant funds to complement the RISP's credit and advisory
components, with support for tackling environment problems related to agro-industry and crop and
livestock production.
2. Objectives
The development objective of the project is to increase significantly the use of environmentally friendly
agricultural practices by farmers and agro-industry in Moldova in order to reduce nutrient discharge from
agricultural sources to the Danube River and Black Sea. In support of this, the project will assist the
Government of Moldova to: (i) promote the adoption of mitigating measures by farmers and agro-industry
for reducing nutrient loads (nitrogen and phosphorous) entering local water bodies; (ii) strengthen national
policy, regulatory enforcement and institutional capacity for agricultural nutrient pollution control and
organic farming; and (iii) promote a public awareness campaign and replication strategy so that project
activities could be replicated in similar areas within Moldova and other Black Sea riparian countries.
The proposed Agricultural Pollution Control Project (APCP) would provide a mix of investments and
policy related activities to mainstream environmental concerns in Moldova's agricultural sector. It will be
implemented in close association with the US$25 million IDA-funded Rural Investment and Services
Project (RISP), an Adaptable Program Lending (APL), which has been "designed to foster
post-privatization growth in the agricultural sector by improving the access of new private farmers and
rural businesses to what they need to succeed - legal ownership status, knowledge, know-how, and
finance". The first tranche of the APL, in the amount of US$10.5 million was approved in mid-2002. The
APCP will assist farmer and agro-industry beneficiaries of RISP to put in place the mitigating measures
necessary to reduce nutrient discharge from the agricultural sector. It would also assist the Government of
Moldova in harmonizing its legislative framework with relevant European Union (EU) directives and
honoring its international commitments to reduce nutrient loads to the Danube River and Black Sea.
Project Global Environmental Objectives: The global environmental objective of the project is to reduce
the discharge of nutrients into surface and groundwater in watersheds draining into the Danube River and
Black Sea. An ancillary benefit is increased carbon sequestration from tree planting and ecologically
sustainable land use practices and decreased methane emissions from farming and livestock practices, both
of which have significant implications for climate change mitigation. The Project will help introduce
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improved manure and nutrient management practices as well as organic farming which, over the long run,
will help reduce the discharge of nitrogen, phosphorus and other agricultural pollutants into the surface and
ground waters of Moldova and the Black Sea. Project activities are directly linked to the "Strategic Action
Plan for the Protection and Rehabilitation of the Black Sea" (BSSAP), formulated with the assistance of
the GEF. The nutrient reduction component is being prepared under the umbrella of the Black Sea/Danube
Strategic Partnership-Nutrient Reduction Investment Fund under which riparian countries are eligible for
Global Environment Facility (GEF) Grants for projects that help control or mitigate nutrient discharge into
the Black Sea.
The proposed project is Moldova's contribution to a regional effort seeking to reduce nutrient flow to the
Danube River and Black Sea. It is one in a series of pilot projects that have been successfully launched in
several Black Sea riparian countries to reduce non-point source pollution from agriculture and thereby
improve the waters of the Black Sea - Agricultural Research, Extension and Training Project in Georgia,
Agricultural Pollution Control Project in Romania and Wetlands Restoration and Pollution Reduction
Project in Bulgaria.
3. Rationale for Bank's Involvement
Bank and GEF support for the Project will assist in synergizing efforts of the Danube River and Black Sea
riparian countries to reduce nutrient loads from agricultural sources flowing into the Danube and Black
Sea. The Agricultural Research, Extension and Training (ARET) Project in Georgia and the Agricultural
Pollution Control Project in Romania are already implementing GEF-funded investment and training
programs for the promotion of environmentally friendly agricultural practices to reduce nutrient loads to
the Black Sea. Turkey and Russia are in the process of preparing similar investment and training
programs. Several Bank projects under the Danube River Basin Environment Program and the Danube
Pollution Reduction Program are also under currently implementation. The additional value added of Bank
and GEF support will help facilitate regional workshops and study tours to allow the sharing of
experiences, identification of common issues and constraints, possible remedial / mitigation measures to
address transboundary water problems. The exchange of such information and lessons learned would help
in establishing "good practices" for nutrient discharge measures and create a store of global knowledge that
would be of much benefit to countries seeking to address nutrient reduction concerns.
4. Description
Project Area: Project actions will be implemented at two levels:
country-wide in conjunction with RISP where the 400,000 farms (on 2.3 million ha), whether
farmed individually or in association, as well as agro-processors would be potential beneficiaries of
information on, and investments in, environment-friendly agricultural practices;
at a selected pilot watershed area in the Lapusna Judet (county) about 30 km south west of
Chisinau.
Geographically, the watershed pilot area lies in central Moldova within the basin of River Lapusnita, a
main tributary of River Prut which in turn is a large tributary of the Danube River. Lapusna judet was
selected as the pilot watershed area as it met the following criteria: (a) country representativeness in terms
of agro-industrial practices as well as soil, climate and other geo-ecological conditions; (b) catchment
represents national agricultural patterns - arable lands, grasslands, vineyards, orchards, processing industry
(vine factories, mill processing, etc.); (c) nutrient pollution of ground and surface water excessive and
typical of most streams in Moldova - studies revealed that nitrates pollute over 65% of the shallow wells
within residentual areas which exceeds national and international standards; (d) local
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authorities/communities aware and concerned about environmental problems and actively motivated to
address these; (e) accessible road network and communication necessary for demonstration and
dissemination of project activities.
The pilot watershed area covers eight comunas and comprises about 50,000 hectares with a population of
more than 43,000, or 14,000 households, in 18 villages. Over 66% of the pilot area is used for agricultural
purposes. The principal activity of local farmers is crop farming; main crops include grains (mainly wheat
and maize), vegetables (cabbages, cucumbers, beets and carrots) and fruits (grapes, tomatoes) grown on
arable lands. Other important crops include tobacco, sugarbeet and soya beans. Vineyards and orchards
comprise a significant share of the land: 17% and 7% respectively. Over 15% of the agricultural area
comprises grasslands and pastures used for livestock grazing. Most of the livestock is held by private
individual owners. Livestock in the watershed area include: cattle (over 5,000 heads); pigs (over 9,000
heads); sheep and goats (15,000 heads); horses (1,000 heads); and poultry (166,000 heads). The principal
agro-industrial activity in the region is associated with wine production and a number of important wine
making factories are situated within the pilot area. The agro-processing sector is also characterized by
small enterprises such as flour mills, oil pressing plants, fruit and vegetable processing plants, canning
factories, etc.
Project Components: The project will support activities under four components to be implemented over
five years as follows:
(i) Promotion of mitigation measures for reducing nutrient loads in water bodies. The component
would be implemented at two levels: (a) in close association with the Rural Investment Services Project's
components for business development, rural support services and rural finance; and (b) in a pilot watershed
area comprising part of the Lapusna tributary of the Prut river.
(a) Activities under RISP
RISP is providing post-privatization support to increase rural incomes and living standards by
promoting rural entrepreneurship, agricultural production, economic diversification, and trade in the
rural areas. These objectives are sought to be achieved through the provision of technical and financial
assistance. The project comprises institutional beneficiaries, e.g. local NGOs of advisory and
extension agencies, service providers, etc. as well as a broad range of private entrepreneurs in rural
areas. RISP accords priority to high value commodities, such as fruits and vegetables with export
potential. RISP's four components include: (i) Rural Advisory Services; (ii) Rural Business
Development Services; (iii) Rural Finance; and (iv) Project Management. The Rural Finance
Component is providing two credit lines, namely: (a) General Commercial Credit Line that is open to
a broad range of rural entrepreneurs at commercial terms and conditions through commercial banks;
and (b) a Special Credit Line with a matching grant targeted for newly formed farmer organizations
and cooperatives, to support "new clients" without past credit history to access commercial credits and
to be implemented through commercial banks. In addition, the component supports the provision of
technical assistance to participating financial institutions, State Supervisory Body, and Savings and
Credit Associations
RISP-APCP Collaboration. APCP will comprise a GEF-funded environmental addition to the RISP
with the objective of mainstreaming environmental considerations into agricultural activities undertaken
by RISP. The RISP-APCP collaboration would broadly be on two levels: (i) Provision of grants to
implement mitigation measures for nutrient discharge stemming from RISP-supported activities; and
(ii) Training for rural advisory service providers and RISP credit officers.
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(i) Provision of Grants. Entrepreneurs/enterprises who borrow under RISP (individual farmers,
farmers organizations, co-operatives and agricultural processors) and wish to invest in environmentally
sustainable agricultural practices would receive a grant from the GEF fund to offset the incremental
cost of nutrient reduction investments. The GEF will provide grant funds of up to US$2 million to
support the Special Credit Line of the RISP, specifically to cover a reasonable cost of mitigation
measures required to reduce nutrient discharge. These grants are to encourage and serve as a financial
incentive for the installation of agricultural pollution mitigation structures and procedures to protect
Moldova's environmental resources while encouraging agri-business development. The types of
businesses that might benefit from this component would include animal production businesses that
produce animal wastes that are rich in nutrients, crop production of any kind that have a large nutrient
discharge potential, processing units for juice production, vegetable oil extraction, and wine production
(vinery) that may produce biomass waste requiring appropriate disposal methods, etc. The eligibility
criteria for the provision of a GEF grant will be primarily to support those activities that will reduce
nutrient loads to waterbodies. The APCP environmental mitigation grant application and approval
process would be conducted in two phases: phase I would determine the eligibility of RISP Credit
applicants for the mitigation grant, review the mitigation strategy to be implemented, and establish a
cost basis for the grant. Phase II would involve implementation of the mitigation procedures and
disbursement of grant funds on a mutually-agreed schedule.
(ii) Training. The project will also train RISP-financed rural advisory service providers in several
nutrient reduction practices, including crop nutrient management, conservation tillage practices, crop
rotation and tree planting of buffer strips etc. Credit officers of the participating banks and rural
business developers will be trained in the mechanisms of grant provision; the training will allow them
to inform credit recipients of the availability of the grants, the eligibility criteria and the application
procedures for grant funds.
The mechanism for APCP support and the eligibility criteria for the provision of a GEF grant are
detailed in an Operational Manual and available with the Project Management Unit.
(b) Promotion of Improved Watershed Management Practices
This component would prepare and implement improved watershed management practices for the
Lapusna basin, with the objective of reducing nutrient loads into the Prut River. The project will
provide for investments in:
l Manure Management Practices. This sub-component will finance and provide incentives for the
installation of up to 8 improved manure storage facilities and equipment for manure collection
and application in the eight communas at both the household and communa level. Villages and
households wishing to participate in the investment program would be selected against agreed
criteria and cost-sharing arrangements. Community training and awareness on good practices for
waste collection and manure management including composting, testing, and field application
would be provided.
l Promotion of Environmentally-friendly Agricultural Practices. This sub-component will promote
the adoption of environmentally friendly agricultural practices that would improve agricultural
production while reducing nutrient discharge into waterbodies. Technical assistance and
financial support will be provided for sustainable agricultural practices, including: (i) nutrient
management � the application of animal waste materials on agricultural land areas at rates
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determined by the nutrient needs of crops and nutrient content of the waste; (ii) conservation
tillage- crop production in which the crop residues from the previous crop remain on the soil
surface to provide erosion protection; (iii) integrated cropping management � the use of crop
rotations and strip cropping to prevent erosion and provide adequate supplies of animal feed and
forages in integrated farming systems; (iv) vegetated buffer areas � permanent vegetated strips
would be established at field and stream riparian boundaries and in water courses that will
reduce and help prevent soil loss and its associated nutrient loss loads, and (v) promotion of
organic farming � as soon as organic farming certification procedures are defined at national
level, small organic farming areas would be established in villages throughout the Judet to
demonstrate and help educate farmers on appropriate procedures for the production of organic
fruits and vegetables.
l Shrub and Tree Planting. This sub-component will support the development of a shrub & tree
planting program that includes: (i) planting of forest belts for the protection of water bodies; (ii)
anti-soil erosion forest belts; (iii) ecological reconstruction of forests; and (iv) agro-forestry
practices. The APCP assistance would primarily consist of providing planting material,
appropriate equipment and technical assistance. The program will be implemented by the State
Forestry Service "Moldsilva" with significant contributions from local communities
l Wetland Restoration and promotion of sustainable management practices. This sub-component
will enhance the nutrient filtration capacity of the wetland at the intersection of the Lapusna and
Prut rivers and help to restore the degraded wetland to its former natural state. Activities under
the sub-component include: (i) forestry activities such as planting of forest vegetation with
species that have high capacity for nitrate uptake and retention both in floodplain areas and
terraces exposed to erosion; (ii) hydrologic enhancement practices, such as embankment
reinforcements for the stabilization of water level, small bridges to provide access to different
parts of the wetland, etc. (iii) sanitation activities; and (iv) public awareness activities to educate
local inhabitants of the importance and fragility of wetland ecosystems.
l Monitoring soil, water quality and environmental impacts. An extensive soil and water quality
testing program will be established for the proposed pilot area to monitor the changing quality of
surface and groundwater bodies (in response to the implmentation of the new and better
agricultural and livestock practices) that eventually drain into the Danube River. This
sub-component will strengthen the capacity of MECTD (water quality laboratory and
hydrological department of the Hydrometereology Service) as well as the central and regional
laboratories of the State Environmental Inspectorate and Institute of Soil to carry out
comprehensive soil and water quality testing and monitor environmental requirements.
Internationally approved monitoring procedures will be employed that will include the use of
paired-watershed and upstream-downstream hydrologic and soil and water quality monitoring
designs. A modeling sub-component will extend lessons learned from Lapusna basin to other
watersheds in the country.
(ii) Strengthening National Policy, Regulatory Enforcement and National Capacity. The project will
also support strengthening of the national legislative, regulatory and institutional capacity of the
government of Moldova in agricultural pollution control. It will assist MECTD and MAFI in: (i)
harmonizing relevant legislation with the requirements of the European Union, specifically the Nitrates
Directive (91/676/EEC), in close cooperation with other on going projects in the area; (ii) developing the
Code of Good Agricultural Practices; and (iii) strengthening the capacity of the Government of the
Republic of Moldova in its efforts to promote scientifically grounded organic farming and land use
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management. Certification procedures for internal and external marketing will also be developed under this
component. Activities under this component would increase capacity of the government for addressing
agricultural pollution control measures and honoring its international commitments to reduce pollution to
the Danube River and Black Sea.
(iii) Public Awareness and Replication Strategy. A local and nationwide public information campaign
will be undertaken to disseminate the benefits of proposed project activities and achieve replicability of the
same. At the local level, the main audience will be the direct stakeholders of the project (local and county
officials, farmers, community groups and NGOs). The efforts at the national level would concentrate on
institutions and groups (Government agencies, national environmental or professional associations,
academia, NGOs, etc.) and the population at large. The aim would be to familiarize the population with the
project and its benefits and thereby raise the interest of potential future clients. Leveraging RISP project
funds would improve the replicability of these practices among agricultural enterprises and small farmers
nation-wide. The project will draw on the Agency for Consultancy and Training in Agriculture, entrusted
with specific extension activities under RISP, to undertake a nation-wide public awareness campaign to
disseminate information on proven low-cost, environmentally-sound technologies provided under APCP.
The project will provide for the organization of national and regional workshops, field trips, visits, training,
publication in international agriculture and environmental journals and other activities to promote
replication of project activities in other similar areas of Moldova as well as Black Sea riparian countries.
Watershed modeling based on developing management strategies from experience in the pilot watershed
area, would be a component of the replication strategy. The project will work closely with ongoing similar
efforts in Georgia, Bulgaria, Poland, Romania, Turkey and Ukraine, and the exchange of experiences will
help in contributing significant reductions in the nutrient loads entering the Danube River and Black Sea.
(iv) Project Management Unit. The project would support a Project Management Unit (PMU) to be
established under the umbrella of the Consolidated Agricultural Projects Managemet Unit (CAPMU). The
existing Project Preparation Unit, already established in the MECTD offices, would evolve into the PMU.
The GEF funds would provide support for hiring relevant staff to implement APCP activities who will
work closely with the RISP implementing staff. The PMU staff for APCP will include: a Project
Manager, Technical Specialist (who would also handle project monitoring/evaluation), Financial
Management Specialist, Procurement Specialist, Accountant, Secretary/Translator and Drivers. Payment
for services provided by CAPMU, including procurement and financial management, will be shared by
APCP. The PMU will co-ordinate project implementation by the different implementing agencies, and will
be responsible for all procurement, financial management and monitoring/evaluation matters.
Promotion of mitigation measures for reducing nutrietn loads in water bodies
- grant for agro-industries supported by RISP
- training for RISP farm advisors
- pilot watershed interventions
National Level Strengthening of Policy and Regulatory Capacity
Public Awareness, Capacity Building & Replication Strategy
Project Management Unit
5. Financing
Source (Total ( US$m))
BORROWER/RECIPIENT ($1.00)
LOCAL COMMUNITIES ($0.76)
GLOBAL ENVIRONMENT - ASSOCIATED IBRD FUND ($3.93)
GLOBAL ENVIRONMENT FACILITY ($5.16)
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LOCAL GOVTS. (PROV., DISTRICT, CITY) OF BORROWING COUNTRY ($0.10)
Total Project Cost: $10.95
6. Implementation
The MECTD and MAFI would be the main agencies responsible for project implementation; MECTD has
been designated by the Ministry of Finance as the line ministry responsible for preparation and
management of the proposed project.
Project Steering Committee (PSC): Co-ordination at the national level would be ensured by a Steering
Committee established by the Government (Decision nr. 529, from 28.06.2001) that is in charge of
supervising CAPMU activities. The Steering Committee comprises representatives from Ministry of
Agriculture and Food Industry, Ministry of Ecology, Construction and Territorial Development, Ministry
of Finance, National Bank of the Republic of Moldova, and National Association of Food Production and
Processing. The Minister of Agriculture and Food Industry, who is also the country's Prime vice-minister
is the chair of the Steering Committee. The Committee will be responsible for providing project oversight
advice and assistance in resolving issues associated with project implementation, and will ensure
commitment of the concerned Ministries.
Project Co-ordination Committee (PCC) at Judet-level: Co-ordination at the Lapusna Judet-level will be
ensured by a Project Co-ordination Committee. The PCC will provide technical oversight and ensure
co-operation and co-ordination of the implementing institutions at the local level, including local offices of
Ministry of Agriculture, Ministry of Health, State Forestry Service "Moldsilva", State Concern "Apele
Moldovei" (Moldovan Waters), County Agencies, and other central and local institutions (See Annex 2,
Table 1 for detailed Implementation Responsibilities by Component).
The PCC will be chaired by the Prefect of Lapusna Judet with the Head of County Council as vice-chair
and membership including Department for Agriculture and Food Industry, Department for Financial and
Cadastral Relationships, Country Center for Preventive Medicine, Department for Education and Sports,
Department for Environmental Protection and Natural Resource Utilization, Lapusna Territorial Ecological
Agency, Regional Center for Consultancy and Scholarship in Agriculture and Mayors of the eight
communes. The Prefect would ensure co-ordination of local government agencies, while the President of
the County Council would ensure co-ordination of all communes participating in the project. The Project
Manager will be the ex-officio Secretary of the PCC. The Project Co-ordination Committee was established
in April 2002.
Project Management: A Project Management Unit (PMU) will be established under the umbrella of the
CAPMU and comprise: a Project Manager, Technical Specialist (who would also handle project
monitoring/ evaluation), Financial Management Specialist, Procurement Specialist, Accountant, Secretary/
Translator and Drivers. The existing Project Preparation Unit, already established in the MECTD offices,
would evolve into the PMU. The Project Management Unit will be entrusted with the responsibilities for
assuring that Government of Moldova and World Bank procedures are followed in project implementation,
provide financial management and procurement services, report on project activities, overall project
monitoring against agreed performance indicators, and evaluation of the project's impact on beneficiaries.
Responsibility for the technical monitoring of the impact on nutrient load reduction would be the
responsibility of the Environmental Protection Inspectorate and the Public Health Directorate. The role of
each existing agency that will implement one or more project activities is set out in Annex 2.
At the national level, the Project Manager will report to the Minister (or his designated representative),
MECTD; at the local level, the Project Manager will report to the Prefect who is the Head of PCC.
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Project Monitoring and Evaluation: A well-designed monitoring and evaluation system will be critical for
ensuring the project's timely and successful implementation, and enhancing its impact by a systematic
analysis of lessons learned and their effective dissemination. Project monitoring and evaluation would be
the responsibility of the PMU. Monitoring will be based on the baseline survey undertaken during
preparation of the project. The Project Preparation Unit has developed performance indicators based on
Annex 1. The PMU would annually monitor and evaluate project performance through conducting
beneficiary surveys. The results of M&E activities will be fed back into the implementation process as
improved practices.
The PMU will design a simple Management Information System for M&E, reporting formats for each
component, including targeted annual performance objectives and monitoring indicators using Annex 1
details as the basis. These indicators include evaluating the project's impact by monitoring soil and water
quality. Quarterly reports will cover progress in physical implementation, the use of project funds and
project impact. The Quarterly reports will be consolidated by the PMU into half-yearly progress reports to
be submitted through MWEP to the Bank within two months of the end of each six-month reporting period.
These half-yearly progress reports will also include an implementation plan and work program for the next
six months following the reporting period. The format of reports will be agreed with the Bank.
A mid-term review will be carried out to assess overall progress. Lessons learned, with recommendations
for any improvements, would be used in restructuring the project, if necessary.
7. Sustainability
Institutional sustainability - The PMU, which will be part of CAPMU, will work closely with the
RISP-supported agencies in the implementation of components at the national level. With regard to
interventions in the pilot watershed area, PMU will work with a Local Consultative Committee which
comprises key local officials and stakeholders. The MOF, MECTD and MAFI at the national level as well
as the local government agencies, comuna Mayors and farming communities are in full support of the
project. The project will provide assistance for capacity building in policy and regulatory matters which
will enable MECTD and MAFI to establish a sound basis for overall management of the project.
Social sustainability - the project has emphasized the early involvement of key stakeholders in project
preparation and implementation, including policy makers, local public officials and community leaders,
farmers, their associations, NGOs. Such involvement will create a sense of ownership and contribute to
social sustainability.
Financial Sustainability - The project would benefit the farmers by promoting yield-enhancing agricultural
practices that will improve productivity and overall agricultural production. Also, the promotion of organic
farming has the potential to open new markets for the local farmers. Such project interventions will assist
in raising farm and household incomes and improving the standard of living in the project area.
Sustainability of funding for watershed management operations after the life of the project will be ensured
once the long-term economic benefits of project interventions become evident to the local and national
populations and government.
8. Lessons learned from past operations in the country/sector
Key lessons learned from rural environmental and agricultural operations in the regions and reflected in the
Proposed Project include:
l the early involvement of local administrations, communities and key decision makers in project
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preparation, is essential in order to ensure ownership and successful project implementation;
l successful investment in support services requires a strong Government commitment and the financial
and operational sustainability of service providers with a gradually increasing self-financing ratio, and
the strong participation by farmers' organizations from the planning phase;
l adoption of mitigation measures to reduce nutrient load should yield tangible benefits for key the
expected users, specifically local communities, in order to ensure adoption;
l effective monitoring and evaluation mechanisms need to be developed and applied to measure project
impact and feed lessons leant into project design;
l decentralized responsibility for financial and project management (e.g., as in the Romania Danube
Delta Biodiversity Project) builds local ownership and sustainability of project activities; and
l dissemination of information is critical to the widespread adoption of new technologies and practices.
The project will incorporate these experiences and build on them through a participatory and transparent
approach to project preparation and implementation.
9. Environment Aspects (including any public consultation)
Issues : The environmental assessment was prepared which included undertaking visits to project
sites and holding consultative discussions with stakeholders within the project area. The environmental
situation in the project area is summarized in the EA which notes that poor agricultural practices are
exacerbating soil and water erosion and a lack of appropriate fertilisers is depressing productivity. Organic
fertilisers, which could replace up to a third of chemical fertilisers, are not being used because of a lack of
transport and spreading equipment or because of poor organisation to use existing equipment. Manure is
being dumped along roads, rivers and streams due to an absence of such facilities. The concentrations of
organic fertilisers are leaching into surface water and increasing the amount of N and P in the Danube
Delta, thus intensifying eutrophication rates. Also, N and P from dung is percolating into groundwater and
then into well water, causing potential health hazards. Also, existing animal numbers are greater than the
carrying capacity of the land and pastures and woodland resources are being over-used. In addition,
because `commercial' fuel availability has decreased, wood and residues are being used as substitutes.
This is further degrading forest areas and affecting the amount of residues being returned to the soil.
Vineyards and orchards are also suffering due to lack of inputs and depressed producer prices.
Agro-industries are experiencing declining profits as factories receive poor quality or a lower volume of
deliveries. These factories are also unable to afford proper disposal of effluents from (reduced) outputs and
much effluent is being disposed of in inappropriate ways, although there are (environmental) laws that
govern such disposals.
The EA determined that the impacts of the proposed project are overwhelmingly positive as it would
reduce the amount of nutrients leaching into the surface and groundwater flowing directly into the
river systems and subsequently into the Black Sea. All the project activities that may have direct
environmental implications concern Component 1: Promotion of Mitigation Measures to Reduce Nutrient
Load in Surface and Ground Water. (Component 2: National Level Strengthening of Policy and
Regulatory Capacity and Component 3: Public Awareness and Replication Strategy will be used to
facilitate and expand Component 1 activities). Therefore, only activities under Component 1 will be dealt
with in detail in relation to the Environmental Management Plan. The EMP has been designed to monitor
the soil and water quality and erosion so that immediate mitigation measures could be taken if the potential
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for environmental damage occurs. The environmental issues that are likely to require special attention
include: leakage of the manure from the village-level storage facilities (if construction is not made
according to specifications), inappropriate manure spreading in the fields and improper cleaning of the
individual manure storage tanks and large manure platforms.
A comprehensive soil and water quality monitoring program has been developed to provide decision-makers
and the public officials with reliable data on problems and trends in the quality of drinking water supplies
and the Lapusna River and its tributaries. The project will monitor: (i) stream water quality and quantity at
4 measuring stations; (ii) groundwater with 18 piezometers to determine the trends in subsurface water; (iii)
drinking water with the help of 12 piezometers; (iv) pollution (if any) from platforms using 32 piezometers;
(v) soil monitoring [erosion and nutrient loss]; (vi) changes in woody biomass; and (vii) wetland through
biomass changes, water quality analysis and sediment quality analysis. In addition climatic data will be
recorded daily. Data from piezometers and surface water bodies will help the project in quantifying the
reduction in nutrient loads entering the Prut river, a tributary of the Danube. Soil monitoring will be
undertaken on seven farm practices and soil nutrient loss and erosion will be undertaken on five fields in the
project area. The quality of manure will be determined from platform samples and plant growth will be
analysed from demonstration plots. Environmental evaluation indicators have been reflected in the EMP,
which meet the objectives and goals of this project.
10. List of factual technical documents:
Working papers are on file with the Project Preparation Unit in Moldova.
11. Contact Point:
Task Manager
Aleksandar Nacev
The World Bank
1818 H Street, NW
Washington D.C. 20433
Telephone: 202-473-0522
Fax: 202-614-0696
12. For information on other project related documents contact:
The InfoShop
The World Bank
1818 H Street, NW
Washington, D.C. 20433
Telephone: (202) 458-5454
Fax: (202) 522-1500
Web: http:// www.worldbank.org/infoshop
Note: This is information on an evolving project. Certain components may not be necessarily included
in the final project.