The Netherlands – Mongolia Trust Fund for the Environment

Progress Review Meeting Ulaanbaatar

June 22nd, 2005

04/22/23 2

Outline

Mongolia: Context Environmental Challenges

The Netherlands – Mongolia Trust Fund for the Environment (NEMO TF) Component I: Self-standing AAA Component II: Co-financing of Environment

Components in World Bank Ongoing Projects Component III: Project Development

Disbursements & Commitments

Implementation Issues

Next Steps

04/22/23 3

Mongolia - Context

Mongolia: Is a large, landlocked country (1.564

Km2) in Central Asia Has a total population is 2.3 million

(2000 Census): 30% of which lives in Ulaanbaatar; Overall, 78% of total population lives in

ger areas; about 60% of urban population still lives in ger areas

Is one of the most sparsely populated countries in the world (1.63 people per Km 2)

Is heavily dependent on natural resources and the environment for its development and economic growth

04/22/23 4

Mongolia – Environmental Challenges

Growing population and changing lifestyles are intensifying pressure on the country’s fragile ecosystems

Overgrazing is degrading significant areas and displacing wildlife from his habitats

Pollution from industrial and urban sources is negatively affecting environmental quality

Human and financial resources for environment and natural resources management are limited, and institutional capacity is weak

04/22/23 5

Environmental Hotspots

04/22/23 6

The Netherlands – Mongolia Trust Fund for the Environment (NEMO TF)

NEMO TF was established in November 2004, with an endowment of US$ 5.88 million from the Dutch Government

It has three components: Bank-executed technical assistance ($ 1.1

million + $ 0. 380 million for contingency) Government-executed support for on-going

projects ($ 3.6 million) Government-executed preparation of new

projects ($ 0.8 million)

NEMO TF represents an outstanding opportunity to achieve progress on environmental governance in Mongolia

04/22/23 7

Component I: Self-standing Technical Assistance AAA activities under this component focus on the Green

and Brown Agendas; specifically: Green Agenda

Illegal Wildlife Trade in Mongolia Forest Cover Mapping of Arkhangai, Khuvsgul and Bulgan

Aimags Assessment of the Success of Reforestation Projects in

Mongolia Updating Nomenclature of Selected Groups of Animals

and Plants of Economic and Conservation Importance Conference on Buddhism and the Environment

Brown Agenda Tourism development in Mongolia and its Impacts on the Natural

and Social Environment Moving up the value-chain in livestock-based industries:

Implications for Environmental Policy, Regulations and Management Urban Environmental Services in Secondary Cities in Mongolia Review of Toxic Chemicals Used in Mongolia

Total Netherlands TF Financing is US$ 1.1 million

04/22/23 8

Disbursements & Commitmentsfor Component I

Self—standing AAATF Funding

Delivery Milestone

Disbursed Commitments

Illegal Wildlife Trade in Mongolia. 100,000 October 2005 80,000 20,000

Tourism Development in Mongolia and its Impacts on the Natural and Social Environment.

150,000 October 2005 25,000 145,000

Moving up the value-chain in the livestock-based industries: implications for environmental policy, regulation and management

200,000 September 2005 20,000 160,000

Activity 2 and 3 sub-total350,000 45,000 305,000

Urban Environmental Services in Secondary Cities in Mongolia Study

150,000 September 2005 53,000 97,000

Forest Cover Mapping of Arkhangai, Khuvsgul and Bulgan Aimags

Assessment of the Success of Reforestation Projects in Mongolia

100,000 August 2005 ??? 74,000

Updating of Nomenclature of Certain Groups of Animals of Plants of Economic and Conservation Importance 200,000 November 2005 ??? 66,000

Review of Toxic Chemicals Used in Mongolia, with Special Attention to Pesticides Used Against Rodents and Grasshoppers

100,000 September 2005 46,000 54,000

Conference on Buddhism and the Environment 100,000 July 2005 75,000 25,000

Component I Sub Total 1,100,000 302,000 631,000

04/22/23 9

Component II: Co-financing of Environment Components in WB Projects

Activities under this component complement already on-going loans and grants activities; specifically:

Second Urban Services Improvement Project Total Loan Amount: US$ 20 million (an IDA Credit of US$16 M;

an AusAID Grant of US$3.35 M, and an UB Municipality

contribution of US$2.3 million); Total Dutch Co-financing: US$ 1,850,000 for Community

Development Sanitation in Ger Areas of Ulaanbaatar and the

Geser Sum Sacred Urban Landscape Protection Initiative

Sustainable Livelihood Project Total Loan Amount: US$ 22 million (APL) Total Dutch Co-financing: US$ 200,000 for Well Rehabilitation

on Wild Ass in the Gobi Desert

04/22/23 10

Component II: Co-financing of Environment Components in WB Projects (II)

Dynamics of Biodiversity Loss and Permafrost Melt in Lake Hovsgol National Park Project

Total Grant Amount: US$ 1 million (GEF MSP) Total Dutch Co-financing: US$ 250,000 for the

organization of the Workshop and Associated Training Program on Ecosystem Dynamics and Environmental Management

Strengthening Environmental Management Capacity at National and Local Level Project

Total Grant Amount: US$ 270,000 (IDF Grant for IDA Countries)

Total Dutch Co-financing is US$ 1.2 million for Strengthening Environmental Management Capacity

04/22/23 11

Disbursements & Commitmentsfor Component II

Co-financing of Environmental Components in World Bank Projects TF Funding

Delivery Milestone

Disbursed Commitments

Ulaanbaatar Second Urban Service Improvement Project

Community Development Sanitation in Ger Areas of Ulaanbaatar Geser Sum Sacred Urban landscape Protection Initiative

1,750,000100,000

September - November

2005

Sustainable Livelihood Project

Impacts of Well Rehabilitation on threatened Species in the Gobi Desert

200,000October 2005

Dynamics of Biodiversity Loss and Permafrost melt in Lake Hovsgol National Park

Workshop and Associated Training Program on ecosystems Dynamics and Environmental Management

250,000

March – May 2005

120,000

Strengthening Environmental Management Capacity at National and Local Level

Strengthening Environmental Management Capacity 1,200,000

October – November

2005

Component II Sub-Total 3,500,000

04/22/23 12

Component III: Project Development

The main objective of this component is to facilitate the development of environment and natural resources management projects; current effort focus on: Forest Resources Management Project

Proposed Loan Amount: US$ 5 million (IDA credit Total Dutch Co-Financing: US$ 750,000

Retrofitting of Polluting and Inefficient Heat-only Boilers in Ulaanbaatar and Selected Aimags

Proposed Grant Amount: US$ 4 million (GEF grant) Total Dutch Co-Financing: US$ 150,000

04/22/23 13

Disbursements & Commitmentsfor Component III

Component III Project Development TF Funding

Delivery Milestone

Disbursed Commitments

Forest Resources Management Project750,000 November 2005

Retrofitting of Polluting and Inefficient Heat-only Boilers in Ulaanbaatar and Selected Aimags

150,000 August 2005

04/22/23 14

Implementation Issues The Bank-executed activities (all under

Component I) are complex; however, their implementation is relatively straightforward and on schedule

The implementation of the Government-executed activities involves six agencies, it is proving challenging, and experiencing delays due to:

The formulation of the Grant Agreement and financial management arrangements;

The need for the new Special Accounts to be opened in bank/s approved by the World Bank;

MoF has worked to simplify the disbursement processes for the NEMO TF by making itself the only signatory on Withdrawal Requests

04/22/23 15

Next Steps Take stock of the status of disbursements

and discuss/decide about possible reallocations of funds

Complete the contracting within USIP2 and SLP – allowing for work to be continued after final payments

Define the Forestry project and determine what can be spent (and on what) by December 1st, 2005

Advance the work on retrofitting boilers

Review the existing timeline for components II and III to ensure timely completion of all the activities