Proposed grant from the global environment facility trust fund
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FirmsContracts for firms valued over $200,000.00 each would be procured using Quality and Cost-Based Selection (QCBS). Contracts estimated to cost $200,000 equivalent or less would be procured using Consultants Qualification Procedures. Audits services would be contracted using the Least Cost Selection Procedures. IndividualsSpecialized advisory services would be provided by individual consultants selected by a comparison of qualifications for three candidates and hired in accordance with the provisions of paragraphs 5.1 through 5.3 of the Consultant Guidelines, up to an aggregate limit of $50,000. See Part ??? of the Grant Agreement. Where included in a Procurement Plan accepted by the Bank or justified to the satisfaction of the Bank, direct contracting would be allowed. Operating Costs: The project will cover the salaries, office and administrative costs related to managing a project. These costs have been reviewed and found acceptable by the Bank, and will follow the procurement guidelines outlined above. Prior and Post Review:
The procurement procedures and SBDs to be used for each procurement method, as well as model contracts for works and goods procured, are presented in the Project’s Operational Manual. B. Assessment of the agency’s capacity to implement procurement An assessment of the procurement capacity of the Borrower will be carried out at Appraisal. The overall project risk of procurement management and an action plan to include corrective measures will be included here. No particular issues or risks concerning procurement for implementation of the project have been identified. The overall project risk for procurement is medium. C. Procurement Plan The Borrower, at appraisal, developed a procurement plan for project implementation which provides the basis for the procurement methods. This plan has been agreed between the Borrower and the Project Team on [date] and is available at [provide the office name and location]. It will also be available in the project’s database and in the Bank’s external website. The Procurement Plan will be updated in agreement with the Project Team annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. D. Frequency of Procurement Supervision In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment of the Implementing Agency has recommended [frequency] supervision missions to visit the field to carry out post review of procurement actions. E. Details of the Procurement Arrangements Involving International Competition FILL IN ONCE DETAILS ARE AVAILABLE 1. Goods, Works, and Non Consulting Services (a) Not envisioned the need for ICB.
2. Consulting Services (a) List of consulting assignments with short-list of international firms. [Please identify contracting with foreign firms. Please also identify needs for sole source contracting.]
(b) Consultancy services estimated to cost above [fill in threshold amount] per contract and single source selection of consultants (firms) for assignments estimated to cost above [fill in threshold amount] will be subject to prior review by the Bank. (c) Short lists composed entirely of national consultants: Short lists of consultants for services estimated to cost less than [fill in threshold amount] equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. Annex 9: Economic and Financial Analysis Introduction The GEF – financed Argentina Sustainable Forestry Project’s development objective is to mainstream biodiversity conservation into plantation forestry practices. This objective is also consistent with the Global Environment Objective of conserving globally and regionally significant biodiversity in production landscapes located in critical Argentine ecosystems. The project’s objective would be achieved through the following proposed components: (i) institutional development; (ii) improved plantation practices and technology transfer for biodiversity conservation; (iii) biodiversity conservation and plantation forestry; and (iv) project implementation, monitoring and evaluation. The main products from the project would be (i) development of programs to integrate and promote biodiversity conservation in forestry plantations by federal, provincial and local forestry institutions; (ii) improved development, validation, and dissemination of practices that improve and conserve biodiversity in target areas; (iii) small, medium and large producers assisted in adopting best practices for biodiversity-friendly plantations; and (iv) Effectively managed mainstreaming program with strengthened institutional monitoring and evaluation capacities. The proposal is also consistent with the National Biodversity Strategy adopted in 2003 by the Secretary of Environment and Sustainable Development (Resolution 91/03). The proposed project would assist the government to strenghthen the capacity of policy making through training and technical assistance. Meanwhile support would be also provided for field trials and extension including the use of native species and various innovative production techniques favoring biodiversity conservation. Producers would be assisted with incremental costs associated with biodiversity-friendly planting including extension services for planting native species and other inputs such as native seedlings and other production inputs. The present economic analysis has been prepared to evaluate the economic benefit brought about by the project in addition to the local environmental benefits and global environmental impacts achieved. Since the most of economic benefits are not measurable from a monetary perspective, the evaluation method most applicable is cost-effectiveness analysis. The financial analysis will focus on native species plantation options and various technical treatments. The analysis applies the hectare-model and evaluates internal rate of return (IRR), net present value (NPV) and potential soil value (PSV). Economic Analysis In general, the economic value of biodiversity is difficult to be measured in monetary term. Evaluating biodiversity conservation from an economic standpoint may involve using proxies for measurement and valuation including soil improvements, water quality, vegetation, and wildlife increases, among other ways to measure the cost to conserve/restore biodiversity. The project approach is to improve management and plantation techniques that would reduce potential cost to maintain and restore biodiversity as opposed to the current trend in which biodiversity is not priority consideration in agro-forestry and plantation forestry. Baseline surveys and studies have been prepared by SAGPyA which the present analysis has used as inputs. Identify economic benefits Component 1 aims to create the required capacity at federal and provincial levels of government to spearhead the mainstreaming process. It will also update the legal and policy frameworks needed to improve sustainable plantation planning and establishment, and invest in tools critical to biodiversity-friendly plantation location and design. The direct economic benefits derived from the activities would include: Strengthened capacities of the government policy makers will allow greater understanding of the importance of biodiversity conservation. Policies favoring biodiversity conservation would be supported and drafted tied to efficient measurement mechanisms (subsidy, taxation). The researchers would be strengthened in their capacities by updating their awareness, knowledge, and skills in this field. As a result it is expected that additional resources would be allocated on research on biodiversity conservation including genetic research on native species and developing new techniques for plantation. The extensionist capacities would also be strengthened since they play an important role in introducing production practices and technology to the producers. The quality of the service would be enhanced thereby improving efficiency in production practices. The indirect economic benefits would go to the producers. The producers would receive economic benefit from government policies favorable to biodiversity conservation. In addition, they would receive services through technical assistance for their production. Component 2 will document and disseminate improved forestry practices that integrate conservation with production. It will support field trials and extension of biodiversity-conservation techniques to be integrated into production practices. A special focus will be placed on practices for establishing native and mixed species plantations, opening up the understory to the surrounding ecosystem, and creating set asides. Economic implications of these practices will be monitored through component 4. Native seed banks and nurseries will be supported, and field trials carried out to analyze different management approaches. Dialog on these issues will be stimulated at a series of workshops, and best practices will be disseminated at a major regional workshop. The direct economic benefits would be enriching the country’s genetic resources (native seed bank) and the producers who would adopt the new technique and grow native species. Introduction of best practices and technology transfer would focus on least cost practices that maximize economic benefits to the producers. Component 3 will work with producers directly to assist in maintaining profitability while conserving biodiversity in private plantation settings. This process will require the promotion (and convincing) of alternative paradigms directly within the production regions. Both small- and large-scale producers will need to be involved, each group with its very different needs and resources, the project includes two sets of complimentary activities. For small producers, a demand-driven program of grant supported subprojects will be included, complemented by environmental education and monitoring. The objective is being to support and compensate owners for the inclusion of biodiversity-friendly practices in production landscapes. This will be done through cost sharing and grant funding. The component will also facilitate dialog with large producers on conservation friendly practices, standards, and certification, and provide technical assistance needed to improve biodiversity-friendly techniques. The establishment of buffer and transition zones in areas of high biodiversity will also be supported. The direct economic beneficiaries would be the forest producers, especially small producers. They not only receive education on biodiversity conservation, which makes them realized that their plantation would be benefit from the conservation, but also the grant program will provide financial sources for their adoption of practices and to cover incremental costs associated with alternative methods. In addition, when the producers compile the various treatments and adopt the technique, potentially the pest risks would be reduced, also reducing their production costs. Certification may also improve the value of their products for export. This may be particularly important for the larger producers. The indirect economic benefit would be accrued by the government. This grant-support pilot program would provide a model for the government to adopt, and lessons-learned from the experience of success or failure of the program. The success of the program for the government to adopt could be a cost-savings practice. Cost Effectiveness The project is designed to assist the GoA to strengthen its biodiversity conservation strategy and program. There are always several alternative to achieve this goal. This project has been designed to maximize the benefits with least costs. The project would provide training to government policy makers in the responsible ministries and institutions to develop/improve strategies and programs in biodiversity conservation. The project has also sought to reduce administrative costs by executing the project through IBRD-financed project coordination unit under SAGPyA. The grant administrative unit only has three technical coordinators and an administrative assistant. The incremental operation cost for administrating the grant is minimized. This same strategy applies to biodiversity information as well. Rather than creating a series of new institutions, the project will link existing centers and institutions, allowing them to share information and build synergies much more effectively, and at a much lower cost. Only where critical gaps have been identified will new organizations be created. The project has also chosen to work through subprojects which test proposed solutions to identified problems. These subprojects will serve as pilots. The lessons learned through their application (funded through the project), and the successful approaches they validate, will then be able to be applied throughout Argentina at a much lower risk, making their extensive application more attractive. This approach both minimizes project costs and, in the long term, risks, while increasing impact. Financial Analysis The financial analysis uses the results of an economic analysis report carried out by the counterpart consultants (Universidad de La Plata), and a report titled “Comparative Timber Investment Return for Selected Plantations and Native Forest in South America and the Southern United State” done by Cubbage et al.. Both works were based on actual survey data. The former compared different treatment options in plantations, and the latter compared plantations of exotic species to plantations utilizing native species. The both analyses applied a plantation model (hectare model) for financial analysis. The former used internal rate of return (IRR), net present value (NPV), and potential soil value (PSV) to evaluate the results. While the latter used IRR, NPV, land or soil expectation value (LEV, SEV), equivalent annual income (EAI), and benefit/cost ratio (BCR). Plantation of Native Species Exotic species have a comparative advantage of fast growth, and short rotation periods as opposed to native species. Producers therefore prefer to grow exotic species in their plantations based on the higher income they obtain. This has become a common practice in Argentina’s forest plantations. However, the planting of exotic species does not necessarily provide a habitat for wildlife that native species provide in forest ecosystems. The project would propose to encourage the producers to grow native species, Araucaria, Nothofagus, Prosopis, etc. within relevant provinces and around forest ecosystems while focusing more on encouraging improved planting and management techniques in grassland ecosystems that conserve the native habitat to the greatest extent possible. Given that plantation techniques vary by species, land quality, climate, timber markets, and capital, among other factors, results can vary. From Cubbage’s analysis, the plantation of native species has disadvantages compared to the plantation of exotic species in IRR, NPV, LEV and BCR, which is not surprising. The IRR is lower than the discount rate, which in general is not viable from a production standpoint. However, the contribution to biodiversity conservation would be highly valued. The project proposes as one of its components to cover incremental costs of shifting towards growing native species. This would provide a reference for the government to establish policies for subsidizing plantation of native species. Following is a table indicating suggested values for plantations in Argentina (adapted from Cubbage et al.).
Cubbage concluded that Argentina has excellent growth rates but only moderate prices. Better markets and higher prices could enhance producer returns. With fairly plentiful and cheap land in Misiones and northern Corrientes, Argentina offers attractive investment returns, especially if more wood processing capacity is added. While our calculations of native species returns are preliminary, they do help explain pervasive problems in conservation of these forests. They do suggest that forest management can contribute to positive financial returns for native species, but those returns are likely to be much less than for plantations. The subsidy would also increase financial rate of return by 3-5%. Improved forestry management The production practice also could contribute to biodiversity conservation, particularly within grassland settings. The treatments and management options applied to exotic plantations can improve the results in favor of biodiversity conservation. The treatments in plantations include (i) lower density of planting; (ii) set asides; (iii) wildlife cuts; and (iv) restoration of natural vegetation or creation of natural vegetation (mosaics). Lower density of plantation The example analyzed for the treatments generating lower densities was for a plantation of Pinus ponderosa in northern Patagonia. The comparison between the lower density model and traditional model resulted in favor in lower density model. Table 1 Financial Analysis between Traditional Model & Low Density Model
The lower density treatment would enable the plantation to leave more space for native understory vegetation and for wildlife. The result in the table above shows that the lower density is not only designed from the point of view of biodiversity conservation, but also results financially attractive. Set asides (SA) The example analyzed for set aside treatments is the plantation of Eucalyptus grandis in the NE of Entre Rios and SE of Corrientes provinces. The treatment applied is to leave a given percentage of land surfaces without planting. This practice will bring the plantation’s economic benefit down but it will promote natural vegetation and potentially reduce pest risk generating both conservation and cost benefits. Table 2 Result of Set Aside by Hectare (36 years cycle)
The set aside treatment of keeping a part of plantation idle for maintaining biodiversity will reduce economic efficiency. The compensation however would be to increase unit output in the rest of the plantation. The treatments of wildlife cuts, (which involves establishing a given plot in a plantation for wildlife habitat), and restoration of natural vegetation or creation of natural vegetation mosaics, (which take trees off in several plots within the plantation), would have similar results as the previous options in that economic efficiency would be reduced, but benefits to biodiversity conservation would be significant. Again, the treatment would not have any incentive for producers to adopt unless an adequate compensation is provided or incremental cost is covered. Development of relevant policies to deal with the issue of increased costs for biodiversity conservation could also be reviewed within this context. Annex 10: Safeguard Policy Issues This annex will be updated before appraisal. The safeguard screening category of the project is S2. The project is classified as Category B, requiring an Environmental Analysis but not a full-scale Environmental Assessment (EA) study. Despite this, an EA including an environmental management plan, will be prepared as part of project preparations. The detailed safeguard policy studies will be made available in the project files. In accordance with the Bank’s Information Disclosure Policy (BP 17.50), copies of the Environmental Analysis report in Spanish will be available for public view at the Bank’s Public Information Centers in Argentina and on relevant websites. A copy of all final documents will also be forwarded to the World Bank's InfoShop. The sections below briefly consider each of the safeguard policies that are triggered by the project. Environmental Assessment (OP 4.01) No large-scale impacts are expected given that the majority of project activities deal with policies, incentives, and information. However, certain limited pilot subprojects with small producers may have limited environmental impacts. A full-scale EA is being carried out as part of project preparation in order to identify potential direct impacts provoked by the subprojects, as well as any indirect impacts from other project activities. The EA will develop appropriate mitigation measures for any negative impacts and recommend enhancement measures for positive impacts. These mitigation and enhancement measures will be summarized in an Environmental Management Plan (EMP) that will include screening criteria and environmental procedures. The EA will also evaluate whether other environmental safeguards are triggered, and develop appropriate procedures, if necessary. Natural Habitats (OP 4.04) The project will support the mainstreaming of biodiversity-friendly criteria into environmentally sustainable plantation forestry activities. The EA for the project will ensure that proposed actions are consistent with the policy and specifically address the issue of natural habitats, and be used to guide the final project design in the use of best practices. Pest Management (OP 4.09) The EA will examine any potential use of pesticides in activities financed under this project, and will develop concrete guidelines for pest management, with emphasis placed on integrated pest management. Forests (OP 4.36) This project conforms fully with OP 4.36. The only activities working with forests on the ground will focus on small and medium producers. Most subprojects are expected to focus on existing stands or on stands established under the partially-blended IBRD project (which is fully in compliance with relevant safeguards). Any establishment will be extremely small in scale, and will be fully in compliance with guidelines established under 4.36. No industrial-scale commercial planting or harvesting is planned under the project. The EA will specifically address the issue of forests, and ensure that the project is consistent with this concept. Policies NOT Triggered It has been determined that the following Safeguard Policies have not been triggered by the proposed project: Cultural Property (OPN 11.03) The project is not expected to have any negative impact on movable or immovable objects, sites, structures, groups of structures, natural features or landscapes with archeological, paleontological, historical, architectural, religious, aesthetic, or other cultural significance. The assessment carried out during project preparation indicated that it would be very unlikely that any project activity would have any conceivable impact, positive or negative, on physical cultural resources. Nevertheless, in the unlikely event that project activities were to have such a potential impact, such activity would be immediately stopped until a protection plan in accordance with OPN11.03 could be put into place. Indigenous Peoples (OP 4.10) As the proposed project sites are not inhabited by indigenous groups, and the identified project activities have been evaluated and determined not to have any direct impact, positive or negative, on indigenous people, OP 4.10 was not triggered. Involuntary Resettlement (OP 4.12) The proposed project will involve no resettlement of any kind, and will not include any involuntary economic displacement. Participation in project activities, including subprojects, is entirely voluntary. All work toward formation of new protected areas will consist only of baseline surveys and assistance to stakeholders for other preparatory work for consideration of new protected areas -- not their actual establishment. Safety of Dams (OP 4.37) The project does not involve any dams. Projects on International Waterways (OP 7.50) The project does not involve international waterways. Projects in Disputed Areas (OP 7.60) The project does not involve disputed areas. Annex 11: Project Preparation and Supervision
* At the time of the PCN review this project was partially blended with the IBRD lending Sustainable Forestry Development Project (P088258). Key institutions responsible for preparation of the project: |