PROJECT INFORMATION DOCUMENT (PID)

PROJECT PREPARATION REVIEW STAGE

Report No.: AB1190

Project Name

/ Kiribati Adaptation Project – Pilot Implementation Phase (KAP II)

Region

/ EAST ASIA AND PACIFIC

Sector

/ General agriculture, fishing and forestry sector (40%);General water, sanitation and flood protection sector (40%);General public administration sector (20%)

Project ID

/ P089326

GEF Focal Area

/ Climate Change – Strategic Priority on Adaptation
Borrower(s) / KIRIBATI

Implementing Agency

Ministry of Finance & Economic Development
PO Box 67
Bairiki, Kiribati
Tel: 686 21660 Fax: 686 21307

Environment Category

/ [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined)

Safeguard Classification

/ [ ] S1 [X] S2 [ ] S3 [ ] SF [ ] TBD (to be determined)
Date PID Prepared / October 25, 2004
Estimated Date of Appraisal Authorization / June 1, 2005
Estimated Date of Board Approval / September 30, 2005

1.  Key Development Issues and Rationale for Bank Involvement

The Republic of Kiribati is one of the most isolated countries in the world. With a population of 90,000 it consists of 33 low-lying atoll islands spread over a vast area of 3.5 million km2 of ocean in the central and western Pacific. Gross Domestic Product per capita was US$618 equivalent in 2002, growing at 1.4% per year. Nearly half of the population lives in South Tarawa, a highly dense area with a population growth of 3 percent per year. At current rates, the national population will increase by 55% by 2025, placing even greater challenges on the fragile atoll environment. The arid climate and poor atoll soil offer limited potential for agricultural development. At the same time, the immense area of ocean encompasses some of the richest fishing grounds in the world, and, together with revenues from a phosphate derived trust fund, provides Kiribati with its most important source of revenue.

Kiribati is one of the most vulnerable countries in the world to climate change and sea level rise. Most of the land in urban Tarawa (the capital) is less than 3 meters (m) above sea level, with an average width of only 450 m, rendering retreat options untenable. For the past 14 years, sea level has shown at the end of the period an asymptotic trend of +4.7 mm/year[1], though with substantial inter-year fluctuations. Even though the islands lie outside the cyclone path, they are exposed to periodic storm surges and droughts, particularly during La Niña years. Already, Kiribati is becoming increasingly vulnerable to climate events due to its high population concentration, accelerated coastal development, shoreline erosion, and rising environmental degradation. The 2000 World Bank Regional Economic Report estimated that by 2050, if no adaptation measures were undertaken, up to 25-54 % of areas in Bikenibeu, South Tarawa and 55-80 % of Buariki, North Tarawa, could become inundated. Changes in rainfall, sea level rise and higher temperatures could result in a 19-38 % decline in the thickness of the Tarawa groundwater lens. Higher temperatures could increase the epidemic potential for dengue fever, decrease agriculture productivity, and divert critical tuna resources from Kiribati waters. Overall, in the absence of adaptation, Kiribati could face economic damages due to climate change and sea level rise of US$8-$16 million a year by 2050, or 17-34 % of its 1998 Gross Domestic Product.

The Government of Kiribati has been active on climate change issues since 1995, when it ratified the United Nations Framework Convention on Climate. Since then, through the Pacific Island Climate Change Assistance Programme (funded by the Global Environment Facility through the United Nations Development Programme), it produced a National Communication (1999) on vulnerability and adaptation, and a Climate Change National Implementation Strategy (2003). It is also in the process of preparing a National Adaptation Program of Action (NAPA). The Kiribati Adaptation Program (KAP) started in 2003 under World Bank/Japanese assistance. Climate change is recognized as one of the key issues affecting economic growth in the 2004-07 National Development Strategy. These combined efforts have helped establish solid national capacity and commitment for adaptation.

The World Bank has been involved in climate change adaptation in Kiribati since 1999-2000, both in analytical and project work. In 1999-2000, as part of its Regional Economic Report, the Bank funded a major study of vulnerability and adaptation. The Bank’s role in adaptation economic mainstreaming also complements the Asian Development Bank’s Kiribati assistance program on macro-economic planning and water and sanitation, enabling activities funded by the United Nations Development Programme (particularly the NAPA and government programs in the outer islands), and vulnerability mapping and planning activities funded by the European Commission.

At the regional level, adaptation and risk management have become one of the pillars of World Bank program in the Pacific since the Regional Economic Review 2000, with support to five country-level projects and regional strategic assistance. Together with other donors and regional organizations, the World Bank helped organize two High Level Adaptation Consultations in the Pacific in 2003-04 which concluded that adaptation, to be effective, needed to be mainstreamed into national development plans, policies and budgets. These principles became the basis for KAP’s design, and represented the beginning of regional efforts to merge the climate change adaptation and disaster risk management agendas.

KAP is the first World Bank pilot project fully dedicated to adaptation in the East Asia and Pacific Region. Given its combination of Least Developed Country and small island status, extreme vulnerability and good progress in mainstreaming, Kiribati is ideally positioned to become one of the first countries to implement the new Global Environment Facility (GEF) Strategic Priority “Piloting an Operational Approach to Adaptation”. Lessons learned from this pilot are expected to become important for global strategies on adaptation investment, and help move internal incentives towards hazard risk prevention. KAP II was accepted to GEF’s pipeline on July 12, 2004.

2.  Proposed Objective(s)

The key goal of the Kiribati Adaptation Program is to reduce Kiribati’s vulnerability to climate change, climate variability and sea level rise. The program is expected to involve the following phases:

·  KAP I: Preparation (2003-05; on-going, US$0.95 million). This phase is aiming to mainstream adaptation into national economic planning, prepare a National Adaptation Program of Action, and design priority pilot adaptation investments. It is funded by a US$645,580 grant from the Japan Policy and Human Resources Development Fund Climate Change Initiative, a US$99,100 GEF Project Development Fund Grant (through the World Bank), and a US$200,000 NAPA grant from the Least Developed Countries’ fund (through the United Nations Development Programme).

·  KAP II: Pilot Implementation (2005-08; US$3.1 million). This phase (the focus of the current document) aims to implement pilot adaptation measures, and consolidate adaptation mainstreaming into national economic planning. It is proposed for financing under GEF’s Strategic Priority “Piloting an Operational Approach to Adaptation”.

·  KAP III: Expansion (2009-2015; Costs to be determined). This phase would assist Kiribati in adapting to climate change, climate variability and sea level rise. It would gradually scale up the investments piloted under Phase II to cover all major islands and vulnerable sectors of Kiribati. This phase may be eligible for funding under one or more of the three future global funds for adaptation (Least Developed Countries Fund, Special Climate Change Fund or Adaptation Fund), complemented by baseline financing. Care would be taken to ensure no duplication of activities funded under the GEF Strategic Priority and those funded under the global funds, should they be accessed..

The key objective of the proposed Pilot Implementation Phase of KAP (KAP II) is to implement pilot adaptation measures, and consolidate mainstreaming of adaptation into national economic planning. Since lessons learned from Kiribati would be relevant to many other small island states around the world, this is also the project’s global (GEF) objective. Key indicators will be developed at pre-appraisal.

3.  Preliminary Description

KAP II is expected to include the following components:

·  Component 1. Priority National Adaptation Investments (US$1.5 million). This component would finance public adaptation investments in key vulnerable sectors, identified as priorities in the KAP I national consultations and NAPA processes, and mainstreamed into sectoral Ministries’ Operational Plans. Its objective would be to progressively reinforce adaptation investments across the Government’s budget and sectoral plans, by matching Government contributions with GEF grant funds. The goods, works and services funded by the component are expected to be relatively modest initially, and focus on public sector programs in Tarawa. They are likely to include: information materials on early climate warning and climate change; improved water management to protect wells and reduce piping leakage; coastal management and protection, including mangrove replantation and protection of public infrastructure; strengthened regulations, particularly on coastal aggregates removal, infrastructure zonation, and fisheries; population settlement planning; and waste management in vulnerable areas.

·  Component 2. Pilot Island Adaptation (US$0.2 million). This component would fund community adaptation investments in two selected outer islands, in order to engage local communities in the adaptation process, and test a whole-island approach to adaptation planning. It would fund small grants provided directly to communities for integrated activities which they could do themselves with little outside help, identified through participatory planning.

·  Component 3. National Consultation and Mainstreaming (US$0.4 million). This component would consolidate the mainstreaming and adaptation process initiated under KAP I and prepare the expansion phase (KAP III) of the program. It is expected to include: technical assistance for continued mainstreaming of adaptation priorities into national and sectoral planning processes; local consultations on outer islands not included in Component 2, to prepare for the expansion phase; national consultations and workshops to continue to inform the mainstreaming of adaptation priorities into government operations; and awareness campaigns.

·  Component 4. Program Management and Capacity Building (US$0.7 million). This component would provide overall support to the project. It would include: workshops and training to raise capacity in adaptation-related areas; studies on the technical, social and economic analysis of vulnerability and adaptation options in priority sectors and islands (to advise the adaptation process and prepare for the expansion phase); and project management support, including technical assistance, facilitators for the island pilots, and incremental operating costs.

The national consultations conducted in 2003 led to the identification of two priority adaptation options: those for which Government support was needed; and those which communities could implement on their own, with little outside assistance. Components 1 and 2 were designed to fund these two type of pilot adaptation investments. Components 3 and 4 are a natural continuation of the adaptation mainstreaming process started under KAP I.

The size of Component 1 could increase depending on how much baseline financing the Government will be able to commit for KAP II (to be confirmed during preparation).

4.  Safeguard Policies that Might Apply

Safeguard Policies Triggered by the Project / Yes / No
Environmental Assessment (OP/BP/GP 4.01) / [x] / [ ]
Natural Habitats (OP/BP 4.04) / [ ] / [x]
Pest Management (OP 4.09) / [ ] / [x]
Cultural Property (OPN 11.03, being revised as OP 4.11) / [ ] / [x]
Involuntary Resettlement (OP/BP 4.12) / [x] / [ ]
Indigenous Peoples (OD 4.20, being revised as OP 4.10) / [ ] / [x]
Forests (OP/BP 4.36) / [ ] / [x]
Safety of Dams (OP/BP 4.37) / [ ] / [x]
Projects in Disputed Areas (OP/BP/GP 7.60)[*] / [ ] / [x]
Projects on International Waterways (OP/BP/GP 7.50) / [ ] / [x]

The environmental impacts of the project are expected to be small, as the main intent is to mitigate potential negative impacts resulting from climate change. There may, however, be some small scale construction associated with the project, e.g. in the form of coastal protection works. An Environmental Analysis will be carried out during preparation to (i) identify the potential environmental impacts of the national adaptation investments and propose appropriate mitigation solutions; (ii) identify the procedures for conducting an environmental screening of the sub-grants under the Pilot Island Adaptation component; (iii) describe the monitoring system to be put in place to evaluate the potential environmental impact of the investments; and (iv) identify and describe the capacity building efforts to allow for proper environmental monitoring in compliance with Government of Kiribati and World Bank’s environmental analysis requirements. Criteria for adaptation investments to be funded during KAP II would exclude those with significant environmental impacts (as this is a leading cause of island vulnerability).

The major social issue that Kiribati will need to consider in the long term is whether sea level rise warrants population evacuation or shifts in settlement patterns for specific atolls or areas that might become partially or fully submerged as a result of climate change. At present, the Government is considering incentives to attract population settlements to Kiritimati Island (where all land belongs to the Government). Such settlement would be voluntary and dependent on the attractiveness of Kiritimati as a new growth center. Population relocation within Kiribati and possible migration to neighboring countries is a long-term least desirable solution, and will very likely fall outside the lifetime and scope of KAP II – however, the project may help identify areas of high vulnerability for coastal population, strengthen population policies, and stimulate a national debate on adaptation options which may include relocation or emigration of parts of the population. A Land Acquisition and Resettlement Policy Framework will be drafted during project preparation which will form the basis of agreement with the Government concerning approaches to be taken in the event land acquisition and/or resettlement becomes necessary during project implementation.

The approach taken during the preparation phase of the project has ensured that safeguard approaches are developed in the context of an overall adaptation strategy which makes sense within the Kiribati context, and are genuinely owned by the I-Kiribati, while at the same time meeting World Bank requirements.

5.  Tentative financing

Source: / ($m.)

Recipient

/ 0.86
Global Environment Facility / 1.54
Japan PHRD Climate Change Grant (for Phase II) / 0.68
Total / 3.08

6.  Contact Point