RATIONALE FOR GEF SUPPORT

39. This project is fully consistent with the Waterbody-Based Operational Programme in the GEF Operational Strategy.

40. It responds to Governments requests, both through the existing short-term action plan (The Odessa Ministerial Declaration) and the medium/long-term Black Sea Action Plan, which it will help to consolidate into a single policy framework.

41. This transitional project will help facilitate the development of the GEF strategic Black Sea Basin approach.

SUSTAINABILITY AND PARTICIPATION

42. The present project proposal takes into account and directly addresses the continuing challenge in ensuring the sustainability, not only of project-generated benefits, but rather of all benefits created during the past several years of regional environmental cooperation. The three elements of the project are designed to ensure that the various legal, institutional and human 'resources' which have thus far been created and mobilised do not simply dissipate following the conclusion of the GEF Pilot Phase project, but rather are further enhanced. Only this combination of enhanced human, financial and legal resources can ensure the ultimate sustainability of regional benefits.

43. Particular features of this project designed to enhance the sustainability of its benefits include the following:

  1. The approach taken is one of stepwise implementation of control measures and technologies in parallel to efforts to improve the rational exploitation and economic yield of the Black Sea environment.

  1. The involvement of Black Sea country Governments in the design and management of the programme, including financial planning and review on an annual basis.

  1. The application of a "top-down-bottom-up" approach which balances the role of authorities with that of the general public and the use of regional expertise and mechanisms and avoiding over-reliance on outside expertise.

  1. The continued development of a network which uses local resources and infrastructure and balances the responsibilities for its maintenance among the six Black Sea countries.

  1. The use of modern, cost-effective means of electronic communication, thus avoiding unwarranted travel and associated expenses.

  1. The creation of co-funding packages which enable donors to add value to the initial investments of GEF funds.

  1. An emphasis on on-the-job training which encourages the formation of local teams, rather than on the training of individuals who may easily be lost to the network.

  1. The translation of regional policies and laws to national policy and legislation in order to achieve effective management of the commons.

44. The current project proposal has evolved through a careful process involving Governments of the region (including environment and other ministries), NGO representatives and external project evaluators. The result is a project which has been endorsed by all six national coordinators and which will enjoy the widespread support and involvement of relevant actors in the region.

LESSONS LEARNED AND TECHNICAL REVIEWS

45. The above-mentioned evaluation mission report constitutes an independent appraisal of the management and implementation of the Pilot Phase project and contains recommendations to the GEF Council regarding future projects. It recommends the extension of the Pilot project for some six months in order to permit the conclusion of "current tasks", which include the urgent investment portfolio (UIP) executed by the World Bank. It also recommends the formulation of a second phase project to permit the transfer of responsibilities and functions from the PCU in order "to guarantee the success of the activities of the first years of the Istanbul Commission and its Secretariat". Operationally, it is not possible to provide supplementary funding to extend a GEF Pilot Phase project and the present self-standing project therefore constitutes a compromise which enables the recommendations of the evaluators to be fully embraced, whilst keeping in line with the new GEF Operational Strategy for International Waters. All elements of the Pilot Phase project should be completed prior to the starting date of the present proposed project, except for the World Bank implemented UIP which will be completed in early 1997.

PROJECT FINANCING AND BUDGET

46. The indicative total cost of the project (including the baseline) is $8.805,000. The share which is proposed to be covered by the GEF amounts to $1.790,000 that of the Black Sea Governments is estimated at $170,000 and that of the collateral donors (pipeline contributions) stands at $2.473,000. The existing commitments consist mainly of funds from TACIS and PHARE programmes of the European Union, though significant contributions are currently being negotiated from other donors, such as the Governments of the Netherlands, Denmark, Japan, UK and Switzerland. The contributions of the Governments will include the support to the Istanbul Commission and for the implementation of the Bucharest Convention and Odessa Ministerial Declaration at a national level estimated at $100,000. The Government of Turkey is making an additional contribution, estimated at US$70,000 by providing the office space and maintenance costs for the PCU.

INCREMENTAL COSTS

47. The Black Sea represents an environmental resource shared across national boundaries. Six countries -- those having Black Sea coastlines -- are the main consumers of the numerous environmental and economic benefits represented by this resource. However, nationals of other countries also utilise or benefit from the resources of the Black Sea in different ways, e.g., as a tourist resource, a source of fish for their consumption, a sink for their pollutants, or a transit point for migratory birds which they value. Thus, improvements in the capacity of the coastal countries to manage the Sea, eventually leading to physical improvements in its environmental quality, will generate both regional as well as extra-regional, or global, benefits.

48. The transitional project will facilitate the completion of the strategic work started during the pilot phase project. The completion of the SAP and the National Action Plans is the process which is needed to enable the countries to comply with the GEF Operational Strategy. Therefore, the full discussion on Incremental Costs does not apply here. However, a significant co-funding both from the countries themselves and from other donors has been mobilized. Further details concerning incremental cost issues associated with the specific project activities are shown in Table 1. From this, it is evident that there are three 'categories' of incremental cost being supported by the proposal:

  1. costs to remove transaction barriers in most cases the baseline is defined by the existing national arrangements, and occasionally, for the purposes of the project, the incomplete international arrangements.
  2. costs to extend on-going national programmes to serve the commons/transboundary programme of action.
  3. zero baseline costs specific to the purposes of the international programme .

49. Finally, it should be noted that the running costs of operating the Secretariat of the Istanbul Commission will be funded by Governments. GEF funding will not be utilised for this purpose.

50. Table 1, presented as an integral part of the current text, highlights the nature of the incremental costs for each of the sub-objectives. It estimates the "baseline" (actions serving domestic interests alone), and the "alternative" (actions which would cover both the domestic interests and those of the Black Sea commons and, by difference, the incremental costs). The table estimates the share of the other donors, as well as the GEF, in covering the incremental costs shown. As stated earlier, the donor contributions are best estimates in some cases. This is a consequence of the "leverage" of GEF funds and several donors are awaiting the GEF core fund commitment before making their own final commitments. In the case of the European Union, ECU 1.5 million has already been committed in parallel funding to be exercised in 1996. Contributions for subsequent years are in the pipeline and will follow GEF's response.


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