Project Task Team Led by Mr. Douglas Olson Rural Development and Natural Resources Sector Unit East Asia and the Pacific Region World Bank September, 2002 GEF Hai River Basin Integrated Water and Environment Management Project

Talk Outline I.Project Overview II.Background and Ongoing Efforts III.Project Components IV.Project Cost and Timetable V.Summary

I. Project Overview Overall Objective: –Catalyze a more integrated approach to water and environment management in the Hai Basin –Improve the quality of the Bohai Sea environment. Focus: –Assist the Chinese Government to address the issues of water pollution in the river basin and serious water shortage –Promote integrated water and environmental management throughout the Hai Basin Global Significance: –The global benefits are the improvements of the Bohai Sea coastal and marine environment

II. Background and On-going Efforts Global significance – Bohai Sea A semi-enclosed sea with globally important ecological resources Provide significant fishery benefits to China, North Korea, South Korea, and Japan –Important reproduction and nursery areas for fish stocks Important for maintaining fishery stocks and biodiversity

II. Background and On-going Efforts Issues – Bohai Sea Over-fishing Pollution –Subject to heavy land-based pollution –One-third of the wastewater and half of the pollutant loading discharged into seas bordering China –Lead to mass mortalities of aquaculture species and contribute to an increasing frequency of harmful alga blooms (red tides) Reduction of freshwater inflows Habitat loss

II. Background and On-going Efforts Hai River Basin One of the most important agricultural and industrial regions in China One of the largest and most important basins draining into the globally significant Bohai Sea Major contributor to pollutant loadings in the Bohai Sea Main Issues: –Water shortage –Pollution

II. Background and On-going Efforts On-going Efforts China Environmental Improvement Priorities (China: 9 th National Five Year Plan, ) –Three Rivers (Huai, Hai, and Liao) –Three Lakes (Tai, Cao, and Dianchi Lake) –Two Air Quality Issues (SO2 and acid rain) –One Municipality (Beijing) –One Marine Area (Bohai Sea) The proposed project would directly address two of the China’s environmental priorities –Restoring the Bohai Sea –Pollution Control and water management in the Hai Basin

II. Background and On-going Efforts Ongoing Efforts (Cont’d) GEF Efforts –GEF/UNDP Project: Building Partnerships for the Environmental Protection and Management of Asian Seas (PEMSEA) –GEF/UNDP Project: Reducing Environmental Stress in the Yellow Sea Large Marine Ecosystem Chinese Government –Blue Sea Action Plan (State Environmental Protection Agency) –The 10 th Five Year Plan of Water Pollution Prevention and Treatment in the Hai River Basin (Hai River Plan) –The Capital Water Resources and Sustainable Utilization Plan

II. Background and On-going Efforts Ongoing Efforts (Cont’d) World Bank’s Involvement –Implementation of policies on water resources protection and water pollution control in large cities –Water Quality Management Plan (Beijing) calls for full secondary treatment of wastewater by 2015 –2 nd Tianjin Urban Environment Project –Hebei Urban Environment Project –National Irrigated Agriculture Water-Saving Program (MWR) –FY 01 Water Conservation Project (MWR) II. Background and Ongoing Efforts

II. Background and On-going Efforts Ongoing Efforts (Cont’d) Rationale for the Proposed GEF-Financed Project –To address water pollution from small or medium sized cities (less than 500,000 people) –To address non-point sources –To promote integrated water and environment management Significance of the GEF Participation –Help secondary towns address the important problems of limited financial resources and management capacity. –Help improve cross-sectoral cooperation between different government entities and stakeholders to achieve integrated water and environment management

III. Project Components 1.Hai River Basin 2.Key Sub-Basin 3.Beijing and Hebei Counties 4.Tianjin Municipality 5.Central IV. Project Components

III. Project Components Component 1 : Hai River Basin Tasks –Support formulation of a basin action plan of water resources protection and water environment quality improvement Outcomes –Facilitate the establishment of institutional coordinating mechanisms for integrated water and environmental management –Improve basin-wide measurement, monitoring, modeling, and database management for water and environmental management (Knowledge Management, KM) –Address important policy and strategy issues for water and environment management

III. Project Components Component 2 : Key Sub - Basin Tasks –Water resources integrated utilization and water pollution prevention demonstration in key sub-basin; Outcomes –Improve the water utilization and water environment in a key subbasin of the Hai River Basin –Provide a demonstration for carrying out similar programs in the rest of the Hai River Basin and elsewhere in China

III. Project Components Component 3 : Beijing and Hebei Counties Tasks –Support pilot programs on integrated management of water and environment in selected counties in Beijing Municipality and Hebei province Outcomes –Support preparation of integrated Water and environment plans –Help improve and implement policies, legal, administrative and institutional instruments for county-level integrated water and environment management –Demonstration of the “Bottom-Up” strategy recommended in the World Bank’s China Country Water Resources Assistance Strategy (CWRAS): Experience obtained at the county level could be extended throughout the Hai Basin and elsewhere in China to develop a water and environmental management system from bottom-up

III. Project Components Component 4 :Tianjin Municipality Tasks –Wastewater treatment and integrated water and environment management in Tianjin Municipality Outcomes –Provide grant financing to construct wastewater treatment plants in secondary towns in Tianjin Municipality –The GEF grant would provide incentive to encourage secondary towns to invest in wastewater treatment facilities –The secondary town program addresses the municipality’s and the Bohai Sea’s) water pollution problems –Facilitate the establishment of institutional coordinating mechanisms for integrated water and environmental management –Support the formulation of a Municipal integrated water and environmental management plan

III. Project Components Component 5 : Central Tasks –Capacity building at the central level in water resources and water environment management Outcomes –Support the development of policy, legal, administrative and institutional instruments for integrated water and environment management –Provide support to MWR and SEPA to establish policy, mechanisms and instruments fro improved water and environmental management at the basin, provincial/municipal and county level –Demonstration of the “Top-down” strategy recommended in the World Bank’s China Country Water Resources Assistance Strategy (CWRAS)

IV. Project Cost and Time Table Preliminary Cost ComponentFinance Source and Amount (US$) Component Total (US$) 1. Hai River BasinGEF: 2.5M National and Provincial Government: 6.5M 9M 2. Key Sub-BasinGEF: 2M National and Provincial Government: 3M 5M 3. Beijing and Hebei Counties GEF: 4.5M County Government: 2.5M 7M

IV. Project Cost and Time Table Preliminary Cost(Cont’d) ComponentFinance Source and Amount (US$) Component Total (US$) 4. Tianjin Secondary Towns IWEP GEF:7M GEF: 5M Towns/TUEP: 30M * GEF: 2M Municipal Government: 2M 39M 5. CentralGEF: 1M National government: 1M 2M Total Costs and Financing GEF Government (all levels) 17M 45M Total Project Cost62M Note: Financing for the secondary towns will partially be provided by the TUEP

IV. Project Cost and Time Table Tentative Project Timetable TasksSchedule Preparation MissionOctober 15 – 30, 2002 Pre-Appraisal MissionJanuary , 2003 GEF Project Proposal SubmissionApril 30, 2003 Bank Appraisal MissionJune 1 – 15, 2003 GEF Council ApprovalAugust 2003 Bank NegotiationsSeptember 2003 GEF CEO EndorsementOctober 2003 Bank BoardNovember 2003 Grant EffectivenessFebruary 2004

V. Summary Overall Objective: –Catalyze a more integrated approach to water and environment management in the Hai Basin –Improve the quality of the Bohai Sea environment. Focus: –Assist the Chinese Government to address the issues of water pollution in the river basin and serious water shortage –Promote integrated water and environmental management throughout the Hai Basin Global Significance: –The global benefits are the improvements of the Bohai Sea coastal and marine environment

V. Summary Justification for the GEF Support The proposed project falls under the GEF International Waters Focal Area, specifically under Operational Program Number 10: Contaminant-Based Program The proposed project has direct relevance for the Global Program Action (GPA) for the Protection of the Marine Environment from Land-based Activities The global benefits are the improvements of the Bohai Sea coastal and marine environment, and the demonstration- dissemination-replication nation-wide and region-wide of compliance with the GPA The proposed project addresses an important missing link in efforts to improve the Bohai Sea Environment

Thank you!