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PROJECT INFORMATION DOCUMENT (PID)
CONCEPT STAGE
Report No.: AB4428
Project Name
NELSAP Regional Agricultural Trade and Productivity TA (Phase
II)
Region
AFRICA
Sector
Irrigation and drainage (40%); Agricultural marketing and trade
(30%);Crops (20%);General agriculture, fishing and forestry
sector (10%)
Project ID
P115414
Borrower(s)
NILE BASIN INITIATIVE
Nile Basin Initiative
P.O. Box 192
Entebbe, Uganda
Tel: +256 414 321424/321329
Fax: +256 414323757
[email protected]
Implementing Agency
NILE EQUATORIAL LAKES SUBSIDIARY ACTION
PROGRAMME COORDINATION UNIT (NELSAP-CU)
Nile Equatorial Lakes Subsidiary Action Programme (NELSAP)
Inyota House, P.O. Box 6759
Kigali, Rwanda
Tel: +250 08307334 Fax: +250 580100
[email protected]
Environment Category
[ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined)
Date PID Prepared
March 2, 2009
Estimated Date of
Appraisal Authorization
June 29, 2009
Estimated Date of Board
Approval
October 30, 2009
1. Key development issues and rationale for Bank involvement
Competition for water resources is increasing in the Nile Basin
Within the Nile Basin’s ten riparian countries 160 million people depend for their livelihoods on
the river and its tributaries. Demand for water is expected to increase in coming decades.
Population increases alone will double water demand over the next quarter century, and to this
will be added demand emanating from new investments particularly for hydropower and
agriculture. Given the increased pressure on regional water resources, it is in the interest of all
riparian states to manage shared water in a more sustainable and equitable manner. Joint action is
also needed to reduce the costs of extreme water events such as floods and droughts.
Recognizing the importance of cooperation, in 1999 nine Nile riparian states1 established the
Nile Basin Initiative (NBI) as a partnership to “achieve sustainable socio-economic development
through equitable utilization of, and benefit from, the common Nile Basin water resources.”
Management of Nile Basin water requires an understanding of Basin agriculture
Within this broad mandate to manage transboundary water resources for development, the NBI
has developed capacity since 1999 for integrated water resource management in NBI’s
implementing bodies, through the Shared Vision Program (SVP). It has also initiated a first
generation of investments through the Subsidiary Action Program (SAP), with particular focus
on hydropower. This work has been supported by donors through the Nile Basin Trust Fund,
managed by the World Bank.
Water resource management at basin level requires good monitoring capability and forward
planning capacity. Agriculture is one of largest water users in the region, and the ambitious
agricultural development plans of riparians will increase demand on the Basin’s finite water
resources. Under the Comprehensive Africa Agricultural Development Program, African
countries are seeking to increase agricultural growth rates to an average of 6 percent per year.
Four areas of support are emphasized of which one, land and water management, will affect the
demand for water directly by increasing investment in irrigated agriculture. Others activities will
stimulate water demand through expansion of commercially oriented crop and livestock products
that use water as an input. It is important for the Basin manager to anticipate these new water
uses and weigh them against competing uses across the Basin. Conversely, agricultural
investments of individual riparians need to take account of the increasing opportunity cost of
Basin water as early as the appraisal stage, and such costs need to be monitored and regularly
updated. Without such an accounting, country investments are likely to employ inefficient
technologies, and riparian projects may not be economically viable in the long run.
The riparian countries through the NBI have asked the Bank to help integrate agricultural
production and trade into the regional water management agenda. Bank assistance for
agriculture-related activities began in April 2008 with initiation of the first phase of the Regional
Agricultural Trade and Productivity Project (RATP).2 This Preparatory Phase, which ends in
June 2009, is on track to complete its three main tasks: identification of activities for Bank
1
The NBI includes Burundi, DRC Congo, Egypt, Ethiopia, Kenya, Rwanda, Sudan, Tanzania and Uganda.
2
The Grant Agreement for RATP-1 was signed in April 2008. The total grant amount is US$1m.
assistance in the second phase; consultation with regional stakeholder on the proposed activities
and preparation of an implementation manual. This PCN is therefore being presented for the
second, or Implementation Phase of RATP. The technical assistance provided under the project
is financed under a recipient-executed trust fund. Because the grant exceeds the US$5m
threshold, a Project Concept Note (and later PAD) is required.
RATP’s sustainability depends on close collaboration with the Institutional Strengthening
Project (Nile-ISP)
RATP will operate within the institutional framework for NBI that is being consolidated, with
Bank support, under the recently launched Nile Institutional Strengthening Project. The Nile-ISP
builds on the activities of the NBI, enhancing the knowledge base and skills for integrated water
management across the entire Basin and in key Basin bodies, in particular the Nile Secretariat
(NBI-Sec) and its two sub-basin coordinating units (ENTRO, covering Eastern Nile and
NELSAP-CU, covering the Equatorial Lakes to the south). There is a particular need to
strengthen skills in strategic planning, resource mobilization, and response to emerging issues
such as climate change. In addition to this internal harmonization, linkages with other regional
institutions will be strengthened, including bodies that have emerged since NBI’s inception such
as the Lake Victoria Basin Commission. All of these activities will help the NBI move to status
of a permanent River Basin Organization (RBO).
While the Nile-ISP is developing an essential hydrology-based framework for water resource
tracking and decision-making, as currently conceived it leaves out sector-specific information
and tools needed to evaluate the interaction of Basin water resources with country growth plans
and investments. The RATP will fill this gap for agriculture and complement the Nile-ISP's
hydrology modeling with needed sectoral detail. At the end of the Project, the NBI’s main
implementing bodies will have an agricultural database and planning model, and staff skilled in
its use, that is well integrated into the water balance model.
The Nile-ISP will locate responsibility for coordination of Basin water management in a new
body to be created in the Nile-SEC, the Sustainable Water Planning and Management Unit. The
Unit will develop the Nile Basin Sustainability Framework to help countries align their water,
environmental and other relevant policies to common principles in one transboundary
framework. Ongoing and future development projects within the Basin will take place within the
agreed Framework. Knowledge generation and capacity building activities under RATP II will
mainstream agricultural issues into this emerging management and planning framework.
RATP and other regional initiatives
RATP is aligned with major pillars of the Bank’s Regional Integration Assistance Strategy for
Sub-Saharan Africa. Specifically it involves: (i) coordinated investments in support of regional
public goods by focusing on shared water resources and agricultural productivity and (ii)
institutional cooperation with a focus on reduction of tariff and non-tariff barriers, regional
policy harmonization, and regional business environment. RATP also meets regional project
eligibility criteria.3
3
It involves three or more countries; is designed so that its benefits spill over country boundaries; has the support of RECs;
provides a platform for policy harmonization; and is part of a regional agricultural strategy.
RATP complements other on-going Bank operations and analytical work in the region, including
the DFID-funded Developing Agricultural Markets program (with COMESA), the EU
Agricultural Commodities Program, Eastern Africa Regional Grain Trade ESW, and ESW on
Non-Tariff Measures for Trade in Goods in the East Africa Community. Finally, the Project is in
line with the Bank efforts to respond to the global food crisis by promoting regional approaches
for sustainable water management and regional integration.
Rationale for Bank involvement
Since 1999 the Bank has intensively engaged Nile Basin countries to promote cooperation in
management of the Nile. Regarding agriculture, this culminated in a late October 2008 meeting
in Kigali, Rwanda, that included all RATP Steering Committee members and produced a
consensus on the basic elements of the RATP design. That meeting agreed on the core focus of
the Bank assistance (which is reflected in this Concept Note) and based on those results
requested the NELSAP-CU to submit a formal project proposal to the Bank for the
Implementation Phase, with a budget of US$6.8m. A long-term process of engagement has paid
off, building trust and a perception of common interest among a large and diverse group of
stakeholders, and providing an invaluable foundation for future activities.
The Bank is well-positioned technically to support future consultations, having long experience
dealing with development of agriculture, water resources and trade at regional level, as well as
within individual riparian countries. Development partners support the Bank’s involvement,
through their commitments to the Nile Basin Trust Fund. The Canadian International
Development Agency (CIDA), the key financier of RATP, has consistently welcomed Bank
leadership and program development, and provided technical support to the RATP task team
during the concept and preparation stages of the project.
2. Proposed objective(s)
The project development objective (PDO) is to increase the knowledge in the Nile Basin on
agricultural issues for support of economically viable agriculture that uses Basin water resources
in a sustainable and efficient manner.
The key outcome indicators will include: (i) institutional options for supporting agriculture by
the NBI and future RBO prepared; (ii) a baseline database on water use for productive
agriculture established and incorporated into the Nile Basin Decision Support System (DSS); (iii)
analyses of outlooks for agricultural development and water use in the Basin prepared and
disseminated; (iv) the in-house and regional stakeholder capacity on integrating the virtual water
concept into regional and national agricultural and water planning developed; (v) technical
studies on cross-border agricultural trade completed and disseminated; (vi) at least one regional
commodity group strengthened, with a stronger voice in relevant national and regional trade and
policy development; (vii) the capacity of NELSAP-CU for identifying and guiding projects with
transboundary relevance strengthened.
3. Preliminary description
The proposed technical assistance will be financed from the Nile Basin Trust Fund. Project
activities will include four components: (1) Defining NBI’s core agricultural functions; (2)
Integration agriculture into Basin strategic water resource planning and management; (3)
Building capacity to support more productive and economically sustainable agriculture in the
Basin through regional trade; and (4) Project management and M&E).
Component 1: Defining NBI’s core agricultural functions. Component 1 will define the role
of NBI and its successor RBO in agricultural development. It will critically assess the
agriculture-related core functions of other RBOs and the recommendations prepared by the firstgeneration NBI projects. The work under this component will analyze the advantages and
disadvantages of various mandates (i.e. water resource management vs. development functions)
to inform the process by which the NBI’s core mandate is defined. It will be very closely
coordinated with NBI-ISP, focusing on complementary activities related to agriculture. This
component will also include consultation, communication, and capacity building activities for
the NBI and other regional stakeholders.
Component 2: Integrating agriculture into Basin strategic water resource planning and
management. This component includes two activities. First, it will support the collection of the
basin-wide data on agricultural sector and water use from sector activities (i.e. irrigated systems,
rain-fed agriculture, livestock, etc.) that will be integrated into the Nile Basin Decision Support
System (DSS).4 DSS is the information system that provides a common and shared basis for NBI
planning and decision making processes, locally, sub-regionally, and Basin wide. It will provide
the means to estimate the impact of climate change on agricultural production and water use in
productive agriculture, as well as to evaluate the impact of agricultural investments on water
resources and the impact of water costs on the economic viability of emerging investments.
17.
Second, this work will allow modeling of future demand and supply of agricultural
products and assessment of the implications for Basin water demand. It will provide the DSS and
the NBI Water Management and Planning Unit with the analytical tools to predict changes in
agricultural demand and trade, inform riparian countries on required interventions to adjust food
supply in terms of improvement of water productivity and irrigation expansion, estimate the
outlook for exports and imports, and assess likely changes in land use and the sectoral product
mix.
Component 3: Building capacity to support more productive and economically sustainable
agriculture in the Basin through promoting regional trade. This component will support
three activities: assessment of “virtual water” trade, analysis of actual cross-border trade in
agricultural commodities, and liaison with selected private commodity groups operating within
the region. First, it will introduce and help operationalize the concept of “virtual water” by
emphasizing the importance of trade for water resource management. Water is traded in virtual
forms, i.e. in forms of agricultural commodities. Although invisible, import of virtual water can
be an effective means for water-scarce countries to preserve their domestic water resources. The
training and capacity building activities will be prepared together with the World Bank Institute
that has recently developed the innovative training course of relation between international trade
and water resource management.
Second, it will finance technical studies on selected cross-border agricultural trade corridors, for
example those that monitored by the USAID-supported Famine Early Warning System Network
(FEWSNET) and the World Food Program. These studies will identify opportunities for greater
trade, document major constraints to trade, both spatial and seasonal, and prepare
recommendations for public investments and trade facilitation measures. The objective is to
4
The activities under this component will be jointly implemented with the NBI Water Resources Planning and
Management Project that is developing the DSS.
proactively advocate the importance of promoting regional agricultural trade as a means to
increase the efficiency of productive water use in the Basin. This work will be done jointly with
COMESA and EAC; building partnerships with these RECs is critical as they are the venues for
trade policy discussion and trade reforms at the regional level.
Third, the above work will be complemented by supporting one or more selected regional
commodity groups. The aim is to empower and strengthen the capacity of the private sector and
civil society to participate in policy dialogue on regional trade and in the marketing assessment’s
work on cross-border trade corridors, and to strengthen agribusiness linkages in the Nile Basin
region. Building partnerships with regional networks such as FEWSNET, the Eastern Africa
Grain Council, the Horticulture Council of Africa and others is also critical for RATP and the
NBI in order to engage with private sector and access reliable market information.
Component 4: Project management unit. This component will provide support to the project
management unit, and the monitoring and evaluation of project performance and results. RATP
will use institutional arrangements similar to those that are currently used in the preparatory
phase. The Project Management Unit will be responsible for implementing the project activities.
Project implementation will be guided by the Regional Project Steering Committee, which is
comprised of two experts from each country, from ministries responsible for irrigation,
agriculture, and trade. Regional stakeholders such as RECs and the private sector will participate
as observers in the Steering Committee meetings. National Liaison Officers have been identified
who will support project activities at the national level. The NELSAP-CU will coordinate RATP
activities with other NBI bodies, including the Nile-SEC, NELSAP-Technical Advisory
Committee and NEL Council of Ministers.
4. Safeguard policies that might apply
RATP-2 is classified as Category C project. RATP-2 does not include or directly finance any
activity that has safeguard impacts. The Project will use the NBI Strategy for Addressing
Environment and Social Safeguards, the compliance with which will be ensured through NBIISP. This Strategy describes NBI’s approach to address and manage safeguard issues, related
public consultations and disclose documents.
5. Tentative financing
Source:
($m.)
Borrower
0
Nile Basin Initiative Trust Fund
6.8
Total
6. Contact point
Contact: Sergiy Zorya
Title: Economist
Agriculture and Rural Development Unit (AFTAR), Africa Region
6.8
Tel: (202) 458-4867
Email: [email protected]