GLOBAL ENVIRONMENTAL FACILITY

REQUEST FOR PROJECT DEVELOPMENT FUNDS (PDF)

COMPLEMENT TO BLOCK “B” GRANT

Countries:Argentina, Brazil, Paraguay and Uruguay

GEF Focus Area:International Waters (OP#8 – Waterbody-Based Operational Program)

Project Name:Environmental Protection and Sustainable Integrated Management of the Guarani Aquifer

Requesting Agency:World Bank

Executing Agency (PDF)Organization of American States (OAS)

National Executing Agency: Governments and Universities of the four countries

Total Project Cost:US$15.0 to US$25.0 million

Financing Plan:US$10.0 to 14.0 million (GEF)

US$5.0 – 11.0 million (Governments of Argentina, Brazil, Paraguay and Uruguay; Brazilian States)

Project Duration:4 years

Preparation Cost:US$741,000 (initial) + US$286,600 (planned complement)

PDF, Block B, funds required:US$350,000 (initial) + US$192,600 (complement requested)

  1. Bases of the Request for Complementary Funding

Background. In March 2000, the GEF approved a PDF – Block B Request for US$350,000 aimed at the preparation of the “Environmental Protection and Sustainable Integrated Management of the Guarani Aquifer Project.” Through this contribution, the four countries involved are currently being supported in the preparation of a project for the development and implementation of a joint institutional framework of action for the management and preservation of the Guarani Aquifer, for current and future generations.

The need to prepare this project arose from joint research carried out by universities in the region on the Guarani Aquifer System and from the level of awareness with regard to its regional and global importance, realized by government institutions responsible for water resources administration in the four countries. Thus, at the end of 1999, there was a fortuitous coincidence of factors that made evident the need to protect this important Aquifer and to begin a coordinated effort by the four countries’ governments, as the only way to bring about this protection, with the objective of increasing knowledge about it and ensuring its sustainable use. Therefore, there were no prior agreements, except on an academic level, nor any specific regional institutions that could serve as a background and facilitate bringing about the current willingness to move toward an agreement with the stated objective.

Institutional Complexity. Upon approval of the Block B, project preparation began with a Launch Seminar held in Santa Fé, Argentina in July 2000 and with strong expectation from the parties involved and from society in general. To date, management of project preparation has been complex due to various factors: Two of the countries have a federal structure (Argentina and Brazil), in which provinces or states have legal authority over the Guarani’s waters, while the other two countries have a centralized structure (Paraguay and Uruguay). In addition, the four countries have major assymmetries, in terms of knowledge of the resource, national interests in developing the aquifer’s potential and of institutional capacity for its management, but with a common characteristc of general weakness in national legislation for groundwater management and the lack of adequate frameworks to channel the participation of civil society involved toward the sustainable management, protection and use of groundwater. These assymmetries and weaknesses constitute difficulties that must be overcome in order to move toward joint agreements on the Aquifer’s management during the project preparation phase.

The four countries have made a major internal effort, establishing National Project Preparation Units (NPPUs) which meet periodically and actively support the project through collection of data, revision of material prepared by consultants and definition of project activities. In the case of Brazil, also State Project Preparation Units (SPPUs) had to be established in the eight states involved. This means making additional efforts to move forward on internal agreements that will then facilitate international agreements. All these internal efforts have been carried out with the financing of the countries, provinces and states, as the case may be. Moreover, in a very short period of time a Project Preparation Coordinating Unit (PPCU) had to be established, and the operational groundwork had to be carried out in order to proceed with technical baseline studies needed to prepare a properly and mutually agreed Project. This unit has proven to be of critical importance to establish, multiply and fortify the links with a growing network of actors involved in the aquifer’s behavior and future.

Technical-scientific complexity. Added to existing institutional and legal complexities in terms of project preparation are scientific and technical complexities stemming from the current level of knowledge about the Guarani Aquifer System (GAS) in the four countries. The geophysical, hydrological, hydrogeochemical and thermal features of the hydrological system are not yet well understood, and their vulnerability to pollution and overexploitation has only been identified for those zones where conditions are more obvious, such as in evident recharge and discharge zones or places where there are concentrations of registered wells or where a powerful driving force such as water supply stress focuses attention on a specific exploitation area. However, the size and complexity of the GAS, and its inter-relationships with other groundwater bodies as well as surface water systems, are little known and wells are in most cases drilled without the necessary information and registration. Furthermore, severe risks to water quality and availability are derived from ill-designed wells.

Status of Preparation and Impacts of Limited Resources. The complexity of the case was foreseen during the preparation of the original PDF-Block B request and considered in defining the terms of the original Block B Proposal submitted, whose activities were focused on the following components:

  • Expansion and consolidation of the current knowledge base about the Guarani Aquifer System;
  • Joint development and implementation of a Guarani Aquifer Management Framework;
  • Public participation through an appropriate information and institutional framework;
  • Project monitoring and evaluation; and
  • Implementation of measures to deal with pollution.

These activities and their results could still be developed and attained with the originally approved financing. Nevertheless, the US$350,000 financial ceiling available in the GEF fundamentally: i) limits the ability to develop a more comprehensive focus and analysis of available water resources, for example leaving the exceptional hydro-thermal values of the GAS without major consideration; ii) weakens the ability to assess the possibilities for civil society organizations to express their willingness to participate, since there capacity to respond to the requests of these organiztions, the private sector and, notably, indigenous communities (see section 4) for more information about the project and deeper consultations; iii) drastically limits the possibilities of expanding the network of pertinent actors relevant to the project as well as of interacting and negotiating partial and global proposals for programs and actions with key actors in each country; and finally; iv) limits the capacity for international information, coordination and agreement in a project which begins without the groundwork of prior agreements. The purpose of this request for supplementary funding is to address these vital issues.

  1. Project Activities to Date

Preparation has been on-going since July and the contemplated activities and consultancies are underway according to plan. National support has been very strong in all countries. The Government of Uruguay has established a General Secretariat for the project in Montevideo. The Secretariat is staffed with two junior water resources experts who support the project’s Secretary General.

The National Project Preparation Units are working and active in all countries. In addition, the Bank project team has facilitated and participated in three video conferences on Bank premises between PPSC (Project Preparation Superior Council) members of the four countries (which include the countries’ Water Resources Secretaries or equivalent) to lay the basis for ongoing, transparent communication and cooperation, and for decision making about project preparation issues.

A mid-term Project Workshop was held in Asunción, Paraguay, from November 28 through 30, 2000 and consisted of three parts: (i) a Technical Meeting for evaluation of the on-going technical consultancies by the NPPUs and selected consultants, that was followed by a one-day workshop on technical topics that yielded concise and valuable proposals from each NPPU; (ii) a Legal-Institutional Workshop, bringing together international expertise on transboundary groundwater law and institutions, the members of the Project Preparation Superior Council and selected participants from the project countries, in order to increase and level the knowledge between the countries regarding institutional and legal options for transboundary groundwater management as well as regarding current national groundwater legislation; and (iii) a working meeting of the Project Preparation Superior Council.

The workshop results showed that all activities committed to in the PDF Block B Request and in the Project Preparation Plan agreed to between all parties at the Launching Seminar in Santa Fé, July 2000, are on-going. Specifically, these are:

  • Component 1: Expansion and consolidation of the current knowledge base about the Guarani Aquifer

Consultancies are on-going, in all four countries to (i) assess and analyse information regarding the physical and hydrological characteristics of the aquifer, (ii) define relevant information for the Aquifer Monitoring Network, (iii) study current and potential future uses of the Aquifer’s waters, (iv) design technically and conceptually the Aquifer Information System (based on GIS). The workshop in Asunción brought together the different consultant teams to discuss and analyze intermediate findings and recommendations. A first draft of the documentation has been submitted by the consultants and is under revision by the General Secretariat. Furthermore, with the corresponding coordination by the CPPU, the consultants have been working in teams when appropriate, to enrich proposals and avoid omissions.

  • Component 2: Joint development and implementation of a Guarani Aquifer Management Framework

Consultancies are on-going to assess the legal and institutional framework in each country. Intermediate results were presented at the workshop in Asunción. In addition, the workshop had the purpose to provide international expertise as an input to decision makers in the countries regarding options for an appropriate institutional and legal framework for the Aquifer. To this effect, internationally renowned lawyers in the matter of transboundary groundwater law, financed through additional resources (FAO and ECLAC), participated in the seminar.

  • Component 3: Public participation through an appropriate information and institutional framework

Consultancies are on-going to (i) identify stakeholders and needs for education / social communication as well as (ii) define mechanisms for communication and public participation for Project Implementation. Furthermore, efforts are being made to prepare the basis for a public participation plan. In addition, four NGOs from each country were invited to participate in the NGO-organized “Water in the Third Millennium Festival” in Caxambu, Brazil, on November 24 and 25, 2000 to get to know the Guarani project. The purpose was to present preparation activities to date, to solicit input from the NGOs as to their perspective for possible collaboration. The consultants have used this event and the discussions it has facilitated to build the participatory process into their analysis, further work plans and recommendations.

  • Component 4: Pilot Projects for Anti-Pollution Measures

A consultancy is on-going to identify potential pilot areas for anti-pollution measures in recharge and discharge areas of the Aquifer and to develop proposals for pilot projects. Pilot areas are being soundly evaluated in technical and social terms, with a strong participation by key actors in each country. Proposals are also being evaluated for possible pilot areas where aquifer over exploitation is assumed.

  • Component 5: Monitoring and Evaluation Plan for the Project

This consultancy will start when the technical works are finalized and project components are defined (expected in February/March 2001).

As can be seen from the above, all substance-related technical consultancies and activities are under way according to plan. In addition, interest has been expressed by the German Government, through BGR (German Geological Survey) to cofinance the project in Paraguay. The Paraguayan government representatives are informed and discussions are expected soon.

Also the International Atomic Energy Agency (IAEA) has demonstrated interest to participate in the project financially. IAEA representatives participated in the Asunción Workshop for information about project objectives and scope. An IAEA mission to the Aquifer Region is planned for the beginning of 2001 in order to concretely define possible IAEA support.

  1. Objectives of Use of the Complementary Preparation Funds

The experience of months of work has shown the importance of strengthening financing for the project’s preparation. This project implies a new partnership for the participating countries, which is unique, but at the same time constitutes an, as yet, delicate bond. For this reason, the consultative, transparent process, which has been developing over the past months is critical at this stage not only to achieve the objectives as outlined in the original PDF Request, but to deepen stakeholders’ engagement and to increase the ultimate sustainability of the project. This highly participatory process has came into existence through requests by the different stakeholders. The General Secretariat Office in Montevideo, for instance, was created because country representatives felt that the project – and the project coordinator – needed to be present in the region. Consultants are asked to visit the four countries and to participate in national Guarani events so they can do a better job in understanding the realities of all countries, not only the one they originate from. Civil society organizations have asked for more information and inclusion in project preparation.

The results of this participatory process will be ultimately highly beneficial for the project. Although the preparation process has been slower than anticipated (it is now expected that project documentation will be submitted to the GEF November Council) and implies a higher cost due to more requirements from stakeholders to interact with the Secretary General (Project Coordinator), the consultants and with each other, it is also clear that a new type of partnership is being created and that it has to be created in a constructive manner.

The additional financing will improve the original objective of the project, carrying out planned activities with a more comprehensive thematic focus, deeper consultation with stakeholders, including civil society organizations and indigenous groups, and reaching agreements on more solid, better assimilated technical bases. This strengthening will result in a more comprehensive, better developed project proposal with more secure, better developed co-participation and co-financing commitments.

The expansion of the financial ceiling approved by the GEF Council on November 3, 2000, increasing the grant funds available for project preparation (PDF – Block B) to US$700,000, for regional projects of a multinational nature, is timely in terms of improving conditions and overcoming limitations detected since the project’s conception.

  1. Complement Requested

The complement to the financing requested for the GEF-PDF Block B totals US$192,600, which would be used to execute the following principal activities:

4. 1 Study of the hydro-thermal characteristics of the GAS and their potential. As had been pointed out by GEFSEC in bilateral discussions, the hydrothermal characteristics and potential of the Aquifer should be given more value. However, due to funding constraints, it has up to now only been possible to superficially touch the subject as a sub-topic within broader consultancies. With supplementary funding, a consultant would be hired for two months to exclusively work on the hydrothermal topic. The consultant would collect data available in the four countries and analyze the level of understanding regarding the thermal characteristics and behavior of waters in the GAS. In this regard, the consultant would complete and go into further detail on the study already carried out, dealing with the geophysical and hydrogeological features of the GAS (Activity 1), using available data. The consultant would collect data about and in turn analyze the current and planned uses of hydro-thermal qualities (thermal tourism, agricultural and industrial use, etc.) and would present alternatives for the potential use of these thermal features within an integrated focus of water uses in the GAS, including the economic/financial analyses that the proposed uses imply and the benefits brought about by rationalizing the use of this resource’s different types of potential under current market conditions. The consultant would evaluate the possibility of executing a pilot project dealing with the use the Aquifer’s thermal energy. In this case, the consultant would prepare the terms of reference for the pilot project, under the framework of the project for the GAS. Cost: US$18,000.