Document of The World Bank FOR OFFICIAL USE ONLY Report No: 41252-BR PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT FROM THE RAIN FOREST TRUST FUND IN AN AMOUNT EQUIVALENT TO US$ 4.50 MILLION TO THE FEDERATIVE REPUBLIC OF BRAZIL FOR AN AMAZON REGION CARTOGRAPHY PROJECT October 23, 2007 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. 1 CURRENCY EQUIVALENTS (Exchange Rate Effective September 28, 2007) Currency Unit = Brazilian Real R$ 1.85 = US$1 FISCAL YEAR January 1 ­ December 31 ABBREVIATIONS AND ACRONYMS ANA Agência Nacional de Águas ­ National Water Agency CONCAR Comissão Nacional de Cartografia - National Cartography Committee DNIT Departamento Nacional de Infra-estrutura de Transportes ­ Brazilian National Department for Infrastructure of Transports DSG Diretoria do Serviço Geográfico ­ Directorate of Geographic Services ­Ministry of Defense EPE Empresa de Pesquisa Energética ­ Energetic Research Company IBAMA Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis Brazilian Institute for Environment and Renewable Resources IBGE Instituto Brasileiro de Geografia e Estatística ­ Brazilian Institute for Geography and Statistics INCRA Instituto Nacional de Colonização e Reforma Agrária ­ Brazilian Agrarian Reform Institute INTERMAT Instituto de Terras de Mato Grosso ­ Mato Grosso's Land Institute ITERPA Instituto de Terras do Pará ­ Land Institute of Pará LCB Least Cost Bidding MMA Ministério do Meio Ambiente ­ Brazilian Ministry of Environment NCB National Competitive Bidding NRPP Natural Resources Policy Program PRODEAGRO Programa de Desenvolvimento do Agronegócio ­ Agribusiness Development Program NSDI Infraestrutura Nacional de Dados Espaciais - National Spatial Data Infrastructure RFPP Rain Forest Pilot Program RFT Rain Forest Trust Fund SEAIN Secretaria de Assuntos Internacionais ­ Secretariat for International Affairs ­ Ministry of Planning SECTAM Secretaria Executiva de Ciência, Tecnologia e Meio Ambiente ­ Executive Secretariat for Science, Technology and the Environment SEPLAN/MT Secretaria de Planejamento do Estado de Mato Grosso ­ Mato Grosso's Planning Secretariat SFC Secretaria Federal de Controle Interno da Controladoria-Geral da União ­ Federal Internal Control Secretariat of the Controller General SIAFI Sistema Integrado de Administração Financeira do Governo Federal ­ Federal Government's Integrated Financial Management System SPDS Secretaria de Políticas de Desenvolvimento Sustentável ­ Sustainable Development Policies Secretariat SPU Secretaria de Patrimônio da União ­ Federal Secretariat for Assets ST Secretaria Técnica (SPRN) ­ NRPP's Technical Secretariat STN Secretaria do Tesouro Nacional ­ National Treasury Secretariat 2 Vice President: Pamela Cox Country Manager/Director: John Briscoe Sector Manager: Glenn Morgan Task Team Leader: Garo Batmanian 3 BRAZIL AMAZON CARTOGRAPHY PROJECT Contents 1. STRATEGIC CONTEXT AND RATIONALE................................................................................ 1 2. PROJECT DESCRIPTION ............................................................................................................... 5 3. IMPLEMENTATION ........................................................................................................................ 6 4. APPRAISAL SUMMARY ................................................................................................................. 9 ANNEXES: ANNEX 1: COUNTRY AND SECTOR OR PROGRAM BACKGROUND ........................................ 17 ANNEX 2: MAJOR RELATED PROJECTS FINANCED BY THE BANK AND/OR OTHER AGENCIES................................................................................................................................................. 20 ANNEX 3: RESULTS FRAMEWORK AND MONITORING.............................................................. 21 ANNEX 4: DETAILED PROJECT DESCRIPTION.............................................................................. 24 ANNEX 5: PROJECT COSTS.................................................................................................................. 28 ANNEX 6: IMPLEMENTATION ARRANGEMENTS ........................................................................ 29 ANNEX 7: FINANCIAL MANAGEMENT AND DISBURSEMENT ARRANGEMENTS ............... 33 ANNEX 8: PROCUREMENT ARRANGEMENTS................................................................................ 37 ANNEX 9: ECONOMIC AND FINANCIAL ANALYSIS...................................................................... 39 ANNEX 10: SAFEGUARD POLICY ISSUES......................................................................................... 40 ANNEX 11: PROJECT PREPARATION AND SUPERVISION.......................................................... 41 ANNEX 12: DOCUMENTS IN THE PROJECT FILE.......................................................................... 42 ANNEX 13: STATEMENT OF LOANS AND CREDITS...................................................................... 43 ANNEX 14: COUNTRY AT A GLANCE................................................................................................ 44 ANNEX 15: MAPS..................................................................................................................................... 45 1. STRATEGIC CONTEXT AND RATIONALE PROJECT BACKGROUND COUNTRY AND SECTOR ISSUES 1.1 The Amazon, as defined by law in Brazil, comprises about 5.1 million sq km, of which about 4.0 million sq km are rain forest and transition forests1. There are nine states in the legal Amazon with a population of 21 million people. The Amazon is a dynamic economic frontier where activities such as cattle ranching, logging, agriculture, mining and energy production are booming and causing significant changes to land use. Over the last three decades, the economic growth in the region was high with an annual average of 7.2%, or more than double the national rate. This was mainly driven by the primary sector (agriculture, ranching, logging and mining). Despite its rapid growth, though, the region accounts for only 6.7% of the Brazilian GDP. 1.2 The Amazon also contains by far the largest portion of the world's remaining tropical rain forests. Its global environmental value is seen both in its extremely rich biodiversity and in its potential negative impact on the regional and global climates if it were to disappear. Deforestation, perhaps the epitome of land use change in the tropics, accounts for 75% of green house gases emissions for Brazil. 1.3 Deforestation averaged about 21,000 km2 per year from 1978 to 88, then declined to 16,000 km2 per year in the 1990s, but has risen again since 2000. The latest estimate is 14,039 km2 for the 12-month period 2005/06 -- substantially less than in previous years, but still about 18% above the average of the 1990s. A significant share of these cleared lands was abandoned and currently has no economic use. The absence of government in these frontier areas, as shown by the poor enforcement of property rights, is deemed to be one of the causes of this socially inefficient natural resources appropriation pattern. 1.4 The Brazilian government has been pursuing ways to conciliate social and economic development with environmental protection in the Amazon through a number of policies, programs and projects. In many cases the programs and projects produced cartographic information as a means to assist government decisions in areas such as infrastructure planning, agrarian reform and environmental protection. 1.5 However, because of the lack of protocols to produce, publicize and officially validate those products, the information produced by the projects undertaken is seldom available and mostly non-compliant with the present national cartographic standards. According to the current paradigm for this type of work, the cartographic work was undertaken within the limited context of specific projects, often by private firms with few concerns about publicizing the information produced. In many cases maps were not made official, which restricted their use for purposes that require reliable, officially recognized 1. The remainder is mainly "cerrado" (savannah forests, shrub and grass lands) concentrated in the states of Mato Grosso, Tocantins and Roraima. 1 and certified cartographic data, e.g. law enforcement, land tenure regularization, credit concession. 1.6 Additionally, a significant part of the Amazon is not covered by cartographic work in the semi-detail (1:250.000) and detail scales (1:100.000 or greater): the so called vazio cartográfico ("cartographic void") which covers about 15% of the Amazon (see map in Annex 15). 1.7 Improving governance is a significant challenge to the sustainable development promotion in the Amazon. A challenge that becomes monumental given the sheer size of the region. In order to enhance their chances of success, government investments in the region would have to take into account spatial concerns. Factors such as scale-gains and transportation costs may have a key role in the outcome and sustainability of government actions. 1.8 Recent developments in information technology such as the advent of geographic relational databases and geoprocessing techniques are providing new tools which may help government assess the spatial implications of its decisions. Moreover, the consolidation of new scientific areas such as spatial econometrics may help government agencies adopt concepts such as scale-gains, regional polarization, etc, into their planning. 1.9 The issue then is to provide a reliable, officially recognized and certified digital cartographic base for the entire Amazon region and make it in an easily accessible form so as to assist government at various levels to perform its role more efficiently. PROJECT DEVELOPMENT OBJECTIVE AND KEY INDICATORS 1.10 The project's development objective is to elaborate a digital, continuous cartographic base of the Legal Amazon Region in the 1:100.000 scale, which will then become part of the Brazilian National Cartographic System to be used by government agencies and private sector in the performance of their activities. 1.11 The principal outcome of the project would be the public availability of a reliable, comprehensive, officially approved and legally valid seamless digital cartographic database for the entire Legal Amazon region. The nine states of the Legal Amazon have already produced 1:100.000 scale digital databases. However, these databases are not legally valid, neither public, nor technically compliant with Brazilian official standards. Additionally, each state has produced digital databases for their own territory. The proposed seamless database would be at a 1:100,000 scale, which is deemed adequate for planning, land administration, environmental licensing of rural properties, authorization of forest management plans, and environmental law enforcement. The cartographic base would be an important enabling element for effective management of natural resources in the Amazon and thus contribute to the higher level objective: strengthening of natural resource management in the Amazon region as a means to promote socially and environmentally sustainable economic growth. 2 1.12 The key indicator for the development objective would be the loading into DSG and IBGE official databases and the delivery to designated public agencies of the nine Amazon states of officially approved (by IBGE or DSG) cartographic databases, with identical structure, including topographical and hydrographical data as well as political boundaries, road network, land marks and perennial vegetative cover of the entire Brazilian Amazon basin, consisting of 1,815 digital maps. The same databases would also be available from DSG and IBGE to the public, upon request and registration, for download or as printed map sheets. The two implementing agencies have agreed on common methodology2 and quality criteria that have to be satisfied prior to homologation. RATIONALE FOR BANK INVOLVEMENT 1.13 The Bank's involvement in the project is justified because: 1) the Bank has had a significant participation in cartography work in the Amazon in the last 20 years, and; 2) it may catalyze a paradigmatic shift in the production and use of spatial information within the Brazilian government through its convening power; and 3) the projects outputs (digital cartographic base) could generate synergies with other Bank projects and activities, thus generating efficiency gains. 1.14 The Bank has significant knowledge about the implications, benefits and challenges of producing cartographic information in the Amazon. The Bank has been involved in the funding of cartographic work and Geographic Information Systems (GIS) in several Amazon states since the 80's. Cumulative investments in cartographic work, under Bank projects in the Amazon, would amount to about US$ 65.0 million3. Thus, the experience of the Bank would add-value to the design and implementation of the proposed project. 1.15 The involvement of the Bank in the project would promote a paradigmatic shift in the production and use of spatial information by the Brazilian government. Under the current paradigm of spatial data production, many government institutions produce and use their own spatial information. This has led to the proliferation of databases and work within public institutions. In many cases, because of the lack of commonly shared specifications, these databases and works are not compatible with each other, hence limiting their usefulness. This often implies the inefficient use of scarce public resources. Part of the problem could be solved if agencies that use and produce spatial data would convene to discuss ways to rationalize their work and share their data. Given the Bank's access to relevant institutions (e.g. Chief of Staff's Office, DNIT, EPE and ANA) the Bank would provide support to the Ministries of Planning and Environment in developing 2This is already a significant outcome of the proposed project. After more than 15 years of intense discussions, both DSG and IBGE reached an agreement for defining a unique cartographic standard for Brazil: the MDN ­ Mapoteca Digital Nacional, because of the proposed project. 3This is a rough estimate given the work in the four zonings in Mato Grosso (1992 and 2002) and Rondônia (1988 and 2001), the zonings that were funded with the Natural Resources Management Project in most of the Legal Amazon States. 3 this dialogue. This could promote a shift in the current paradigm by providing an approach consistent with the development of a National Spatial Data Infrastructure4. 1.16 Finally, the Bank is re-engaging in the Amazon and in some activities that will benefit from the outputs and outcomes of the proposed project. These include: (a) The Pará State Project. Pará is mapped mostly in the 1:1.000.000 scale that is insufficient for detailed land use planning activities, as foreseen in the Pará Rural Project. The proposed Bank project in Pará has a 1:250.000 scale zoning component which will be complemented by 1:100.000 surveys in the areas intended for economic intensification. The cartographic base produced under the Amazon Cartography project will be an essential input for the proposed zoning work as it serves as a base for thematic survey at the 1:100.000 scale. Hence the proposed work will complement the work under the Pará Rural Project. (b) The Amazonas/Alto Solimões state project, an area that coincides with cartographic void. 1.17 Additionally, the Amazon Cartography project may strengthen the activities of the Ministry of Planning and Chief of Staff's Office regarding the use of Geographical Information Systems (GIS) for multi-year planning preparation and federal budget allocation. The proposed project may: a) enable the environment for multi-sector dialogue within the Brazilian Government and; b) provide a testing ground for some ideas related to the creation of a National Spatial Data Infrastructure. For the latter, it is expected that the project would contribute to laying down the foundations for a new paradigm for the use of GIS in government planning. HIGHER LEVEL OBJECTIVES TO WHICH THE PROJECT CONTRIBUTES 1.18 The higher level objective to which this project will contribute is the strengthening of natural resource management in the Amazon region. This is in line with the overall objectives of the Pilot Program to Conserve the Brazilian Amazon "to maximize the environmental benefits of Brazil's rain forests consistent with Brazil's development goals, through the implementation of a sustainable development approach that will contribute to a continuing reduction of the rate of deforestation". It is also consistent with the results framework of the Country Assistance Strategy 2003-2007. The CAS states as one of the three lines of action in support of sustainable development in the Amazon: "Enhance institutional capacity (public, private, and civil society), improve land use management, and support environmentally sound economic activity and infrastructure, especially in the poorest areas of the Amazon and in areas of serious or anticipated land use conflict." 4A National Spatial Data Infrastructure could be defined as the technologies, policies, and people necessary to promote sharing of geospatial data throughout all levels of government, the private and non- profit sectors, and the academic community. 4 2. PROJECT DESCRIPTION LENDING INSTRUMENT 2.1 The proposed instrument is a grant from the Rain Forest Trust Fund having the Bank as its trustee, in the amount of US$4.50 million. Co-financing would be provided by the Brazilian Government in the amount of US$500,000 (financial resources). PROJECT COMPONENTS 2.2 The project has five components: (a) Review, revision and validation of existing digital cartographic databases produced by the states of Acre, Amapá, Maranhão, Rondônia, Roraima and Tocantins, involving 622 map sheets, or one third of the total. These databases have been produced by private firms under contract, with funds from the NRPP. However, official approval by the federal government requires checking and corrections, as there was no audit of delivered products for quality. Cost of component: $0.59 million. (b) Digitalization, updating and validation of existing analog maps available in the National Cartographic Systems, for a total of 461 map sheets, or one fourth of the total. This would incorporate existing analog cartography to the official cartographic base. Cost of component: $1.51 million. (c) Production of digital maps from geo-referenced satellite images for currently un-mapped spaces in the States of Amazonas, Mato Grosso and Pará (450 sheets or one fourth of the Amazon). This would fill the "cartographic void" of the Brazilian Amazon, directly in digital form. Cost of component: $1.44 million. (d) Adjustment and correction of the digital cartographic base of the State of Mato Grosso (282 sheets or one sixth of the total). These maps were produced with funds from the Mato Grosso Natural Resources Management Project (PRODEAGRO). Cost of component: $0.96 million. (e) Project management, training, dissemination, monitoring and evaluation. This component includes management of the project by the Technical Secretariat in the Ministry of the Environment. Cartography teams in the nine state governments and of relevant federal government agencies would be trained in the use of the cartographic digital databases. Training in the process and technology of production and quality control of digital maps would be imparted to interested private sector firms. Monitoring would be based on agreed upon quantitative milestones for the various sub-products, and on agreed quality standards and include quality audits of digital maps produced. Cost of component: $0.20 million. 5 LESSONS LEARNED AND REFLECTED IN THE PROJECT DESIGN 2.3 While the NRPP has supported the production of digital maps in several Amazon states under contract to private firms, the quality of the results has left much to be desired, as there is as yet limited capacity5 in the private sector with mapping technology and the exacting quality requirements of maps to be used for official purposes. The lesson learned is (a) that private production of analog or digital maps must be audited for quality and precision, and validated by competent official agencies continuously from the beginning if the results are to be used in administrative and legal proceedings; (b) that technology and experience accumulated in the official agencies with production of high- quality digital maps should be transferred to the private sector so that firms will eventually produce readily acceptable products that require less proofing and checking for certification by the authorities; and (c) a work protocol between public sector agencies and private sector firms should be established so that future government procured cartographic work is compliant with official standards and that adequate provisions for its auditing and validation are made. ALTERNATIVES CONSIDERED AND REASONS FOR REJECTION 2.4 The alternative of leaving the project activities to the private sector under contract has been considered, but was rejected since the certification and validation work is an exclusive prerogative of IBGE and DSG. Moreover, timely and high-quality production can only be ensured, at this time, within the limited period for the project implementation, if the agencies that currently have the highest competence, experience and capacity in the field are put in charge. Also, it is known that private firms are reluctant to work under Amazon conditions in as far as field work is concerned. The need for technology transfer to the private sector in the medium term is, however, recognized and would be addressed through training activities under the project. National standards for cartographic work applicable to private contracts are just now being developed by the National Cartography Commission (CONCAR). 3. IMPLEMENTATION INSTITUTIONAL AND IMPLEMENTATION ARRANGEMENTS 3.1 Overall responsibility for the project lies with the Ministry of the Environment (MMA) which has responsibility for the National System of Environmental Management and for the coordination of the RFPP. Within MMA, the Secretariat for Extractivism and Sustainable Rural Development (SEDRS) has established a Technical Secretariat (ST) as project management unit. MMA would oversee the implementation of the project, but would not carry out the bulk of it. Financial resources would be made available to the two executing agencies by MMA under norms established by the Treasury Secretariat 5By limited capacity one understands specifically the human, technical and logistic limitations for the performance of field work which is necessary for validating cartographic information. This is specifically true in the Amazon where transportation difficulties make field work specially challenging. 6 (Ministry of Finance). The ST would handle the financial, contractual and administrative processes, including procurement and logistic support, as well as the technical supervision of the cartographic production. 3.2 The official certification and maintenance of national cartographic databases lies, by law, with two federal agencies, the Brazilian Institute of Geography and Statistics (IBGE, an agency under the Ministry of Planning) and the Directorate of Geographical Services (DSG, an agency of the Army Command, under the Defense Ministry). Implementation of the main project activities (cartography) is assigned to DSG and IBGE, both institutions of excellence in Brazil in this field, with long standing expertise and experience in cartography. (Brazilian scientific cartography dates back to the late 19th century and has been systematically developed since the early 1900s, initially mostly by the military). These are also the only institutions in Brazil legally designated to officially approve analog and digital maps for entry into the National Cartographic System. The tasks to be performed by the two agencies are routine and straightforward, but methodologies might have been different. Thanks to the proposed project, both agencies have recently reached an agreement on the precise steps, methods and criteria to be used to produce a national digital cartography standard. 3.3 The workload has been divided spatially between the two agencies by assignment of subsets of the 1,815 map sheets for each component (see Annex 4). Overall, 1232 sheets would be processed by DSG and 583 sheets by IBGE. This roughly reflects the respective processing capacities of the two agencies. They would execute the cartography components under Implementation Agreements with MMA to the satisfaction of the Bank. 3.4 State agencies concerned with land and environmental management (e.g. INTERMAT-MT, ITERPA-PA, SECTAM-PA) would support DSG and/or IBGE as required with geographic information and logistic support, as they have a firm interest in the results of the project. However, no specific formal agreements would be necessary for this support to materialize. 3.5 The project would be implemented within 18 months, closing by March 31, 2009. The ST in MMA, in consultation with IBGE and DSG, would be responsible for preparing annual operating plans, including the physical and financial implementation schedules for both implementing agencies. The federal budget will include allocations for the project covering all estimated expenditures, for both sources of funding (RFT grant and domestic counterpart). Federal budget funds would be advanced by the Finance Ministry (Treasury Secretariat) to MMA, would be committed by MMA and transferred to the two implementing agencies under the implementation agreements (convênio/destaque orçamentário), as required. MMA will prepare Interim Financial Reports (IFR) on the basis of accounts received from the implementing agencies and of its own accounts. The Ministry of Finance will submit withdrawal applications to the Bank with the IFRs for reimbursement.. Bank reimbursements will be made to the single treasury account so no designated account is anticipated. 7 3.6 MMA will prepare progress reports at each disbursement request. The amount to be reimbursed will be based on project payments actually made and recorded in SIAFI but the amount disbursed will not be superior to the proportion of grant proceeds corresponding to the outputs (maps) delivered. MMA will prepare a final implementation report to the Bank. MONITORING AND EVALUATION OF OUTCOMES/RESULTS 3.7 Indicators for project outcome and results have been defined (see Annex 3). The ST would collect the pertinent information from the implementing agencies and perform crosschecks for validity. A working group is being set at the Ministry of Planning, which heads the National Cartography Commission (CONCAR), to overview the projects implementation and certify the delivery and quality of project outputs. Availability of newly approved digital map sheets would be widely publicized to interested parties in the federal and state governments, the judicial system and the general public. The cost of collection of indicator data is low and included in the cost estimate of the project under Component E. SUSTAINABILITY 3.8 Sustainability of the project outcome is linked to the likelihood of continued maintenance and periodic updates of the digital cartography produced. The availability of a high-quality cartographic base is in the interest not only of government agencies and courts but also of private stakeholders who may be affected by decisions made using such base. With the continued improvements in the natural resources management system in general, public and private demand for high quality digital maps should support decisions to keep up the cartographic base's maintenance and update. Brazil's MultiAnnual Plan 2004-2007 specifically includes production, improvement and maintenance of the Brazilian cartographic base. 3.9 The National Cartography Commission (CONCAR), within the Planning Ministry, is a recognized, active body intended to assure a National Cartographic System of excellence and to guarantee the integrity of an up-to-date national infrastructure of spatial data. It includes 12 ministries in the federal administration, the key cartographic agencies and some private sector participants, and is likely to be expanded to include other ministries as well as state and municipal agencies. The Commission has conducted cartographic demands surveys across states and is in the process of elaborating a strategic National Cartography Plan. The interaction of cartography producers and users within the Commission is an added element to enhance sustainability of the project's outcome. CRITICAL RISKS AND POSSIBLE CONTROVERSIAL ASPECTS 3.10 There is a possibility that the lack of experience on federal administrative practices of newly recruited, permanent MMA staff in the ST may affect the management and coordination of project implementation. Staff is currently undergoing specific training in rules and procedures both from the Federal Government and from the Bank.. 8 LOAN/CREDIT CONDITIONS AND COVENANTS 3.11 In order to carry out the project, MMA shall establish and maintain an adequately staffed unit (the Secretaria Técnica). MMA shall also ensure that budget and resources are made available for the implementing agencies (IBGE and DSG) for the efficient and timely execution of the project. 3.12 The ST shall prepare, together with IBGE and DSG, an annual implementation plan (POA) and a procurement plan agreeable to the Bank. These two documents would be linked to the implementation schedule. Disbursement would be made in accordance with the delivery of outputs foreseen in the implementation schedule. The amount to be reimbursed to the Brazilian Government would be based on project payments actually made and recorded in SIAFI but the amount disbursed will not be superior to the proportion of grant proceeds corresponding to the amount of outputs delivered. 3.13 Audits will be performed by the Secretaria Federal de Controle, in accordance with the standard practice in the Rainforest Pilot Program. The Secretaria Técnica shall keep adequate records of all expenditures incurred by the project. 3.14 The National Cartography Commission shall establish a working group to follow up the projects implementation. This working group will certify the delivery of project outputs to the Bank for the submission of statements of expenditures. 4. APPRAISAL SUMMARY ECONOMIC ANALYSIS 4.1 The magnitude of economic benefits resulting from the use of reliable cartographic resources is highly uncertain. However, since the proposed project will make the information produced by several other projects (e.g. NRPP, PRODEAGRO) available to the public, it is deemed that the proposed project will make these prior investments, amounting to more that sixty millions of dollars, indeed effective. FINANCIAL ANALYSIS 4.2 n/a TECHNICAL 4.3 A capacity assessment was carried out at IBGE (in Rio de Janeiro) and at DSG (in Manaus, Rio de Janeiro and Brasília). The assessment covered staffing, physical installations, cartographic production procedures and fiduciary controls. 4.4 DSG and IBGE will commit respectively 400 and 100 fully qualified staff to the project. DSG staff includes senior cartographic engineers (PhD level), cartographic 9 technicians and field work staff (note: all the field work under the project will be carried out by DSG). IBGE staff allocated to the project also includes senior staff, all based in Rio de Janeiro ­ eventual support may be provided by staff in local IBGE offices in the Amazon states. It should be noted that DSG has allocated most of its human resources to this project as this is considered a national priority. 4.5 Both institutions have significant physical assets (e.g. buildings, vehicles, and computers). However, in many cases these assets are obsolete or in poor condition and may fail if subject to an increased work load ­ this is specifically true for vehicles, computers and other field equipment to be used in the Amazon. Hence, new and productive equipment to avoid compromising the projects implementation schedule. 4.6 Cartographic production procedures by both institutions may be considered state- of-the-art. All types of quality controls are in place in the production line, thus avoiding the finalization of unsatisfactory products and the need for re-work. These procedures have been tested and refined for many years, and technical coefficients for each production step are deemed to be reliable. This ensures the realism of the proposed implementation schedule. 4.7 The fiduciary controls were assessed for DSG and IBGE as they will handle financial resources including, in case of DSG, cope with field work activities. The assessment concluded that the fiduciary controls in place at DSG (SIAFI) are adequate to provide timely and accurate information on the allocation and expenditure of grant funds. These controls are capable of tracking absolutely all expenditures, and of providing both digital and hard copy information to auditors and project supervision teams. FIDUCIARY 4.8 A financial management risk assessment was carried out to determine whether MMA, IBGE and DSG have acceptable financial management and disbursements arrangements in place to implement the project. The assessment concluded that financial management arrangements for the project that satisfy the Bank's minimum requirements are in place and operational, and that a financial management system (SIGMA) is in place that can effectively control and monitor the Project, and provide reasonable assurance, and accurate and timely information on the progress of Project implementation. SIGMA is operational in all executing agencies to provide monitoring and financial reports. The Financial Management risk associated with the Project has been rated as low. The assessment further recommended that Audit Costs be included in grant financing, allowing the use of the Bank's procurement guidelines rather than the Brazilian law. (For further information on the FM Assessment, see Annex 7.) 4.9 An assessment of MMA's capacity to implement procurement actions for the project was also carried out by the Bank It concluded that MMA is experienced in procurement implementation, both under Bank rules and procedures and under Brazilian Law 8666-93, and has been consistent with the application of rules and handling of 10 documents. While current technical staff in the ST has little prior experience with Bank- financed procurement (although the Ministry has some specialized staff with longer experience in that regard), MMA would avail itself of technical cooperation by UNDP under an existing cooperation agreement (for the NRPP) which would be suitably extended for the purposes of this project, in order to facilitate procurement under the project. UNDP has ample experience with procurement according to Bank rules and procedures. Based on this arrangement, the procurement assessment has rated the project as low risk. 4.10 The ST has prepared a detailed project implementation schedule for the period 2007-2009. The components which would receive grant support have been identified, with an aggregate amount of US$4.5 million, or 96% of the estimated project cost. On the basis of the implementation schedule and the list of goods and services to be acquired, the ST prepared a preliminary procurement plan, which identifies packages, categories, methods of procurement and amounts, to be completed and updated by Appraisal. The Bank would review the annual procurement plans and carry out ex-post reviews during supervision missions, with an initial frequency of 6 months. SOCIAL 4.11 n/a STAKEHOLDER INVOLVEMENT 4.12 The project, its objectives, outcome and components were extensively discussed with the Brazilian Institute for Environment and Renewable Resources (IBAMA), and with the Ministries of Transport, Energy and Mines and Agrarian Development. SOCIAL IMPACTS 4.13 The project produces maps and digital data, and as such has no direct social impacts. Indirect impacts expected are the improved security of land tenure and property rights, including those of underprivileged groups in the Brazilian society. ENVIRONMENT 4.14 The project produces maps and digital data, and as such has no direct environmental impacts. Indirect impacts expected are the improved environmental management, more rational land use and more sustainable use of natural resources in the Amazon. 11 SAFEGUARD POLICIES 4.15 None of the Bank's safeguard policies are applicable to the proposed project. 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] POLICY EXCEPTIONS AND READINESS 4.16 No exceptions to Bank policy are required or sought. The project meets the regional criteria for readiness to implementation. 12 Annex 1: Country and Sector or Program Background BRAZIL: AMAZON CARTOGRAPHY Project The Amazon, as defined by law in Brazil, comprises about 5.1 million km2, of which about 4.0 million km2 are rain forests and transition forests6. There are nine states in the legal Amazon with a population of 21 million people. The Amazon is a dynamic economic frontier where activities, such as cattle ranching, logging, agriculture, mining and energy production are booming and causing significant land use changes. Over the last three decades, the economic growth in the region was high with an annual average of 7.2%, or more than double the national rate. This was mainly driven by the primary sector (agriculture, ranching, logging and mining). The region accounts for only 6.7% of the Brazilian GDP. The Amazon also contains by far the largest portion of remaining tropical rain forests of the world. Its global environmental value is seen both in its extremely rich biodiversity (a key global asset for adaptation in face of climatic uncertainties) and its possible negative impact on the regional and global climates if it were to disappear. Deforestation, perhaps the epitome of land use change in the tropics, is the major source of green house gases emissions for Brazil. The Brazilian government has been pursuing ways to conciliate social and economic development with environmental protection in the Amazon through a number of policies, programs and projects. Specifically, the Brazilian government has been trying to tackle deforestation by implementing several command-and-control measures. However, the effectiveness of such measures is being hampered by a number of causes, and specifically by the lack of appropriate controls on land tenure. Deforestation averaged about 21,000 sq km per year from 1978 to 88, then declined to 16,000 sq km per year in the 1990s, but has risen again since 2000. The latest estimate is of 14,039 sq km for the 12-month period 2005/06 -- substantially less than in previous years, but still about 18% above the average of the 1990s. A significant share of these cleared lands was abandoned and currently has no economic use. The absence of government in these frontier areas, as shown by the poor enforcement of property rights, is deemed to be one of the causes of this socially inefficient appropriation pattern. Improving governance is a significant challenge to promote sustainable development in the Amazon. A challenge that becomes monumental given the sheer size of the region is considered. In order to have their chances of success enhanced government investments in the region would have to take into account spatial concerns. Factors such as scale- gains, transportation costs may have a key role in the outcome and sustainability of government actions. 6. The remainder is mainly "cerrado" (savannah forests, shrub and grass lands) concentrated in the states of Mato Grosso, Tocantins and Roraima. 13 Recent developments in information technology such as the advent of geographic relational databases and geoprocessing techniques are providing new tools which may help government to assess the spatial implications of its decisions. Moreover the consolidation of new scientific areas such as spatial econometrics may help government agencies to adopt concepts such as scale-gains, regional polarization, etc into their planning. A challenge exists however in bringing these tools to widespread use within the Brazilian government. The current paradigm in the use of geographical information system is that each government institution builds its own databases with limited consideration to issues such as inter-operability, data interchange, common standards, etc. This proliferation of databases is inefficient and represents an unnecessary work redundancy. Currently, several government activities depend on this kind of spatial information, and have their effectiveness limited because of the lack of an integrated data infrastructure: (a) Land tenure regularization which is deemed to be one of the major issues behind the inefficient use of natural resources in the Amazon and a significant impediment to its sustainable development. Currently the federal land agencies, INCRA and SPU, do not have a land cadastre of public lands. State land institutes face the same challenges. Providing basic spatial data, such as a public cartographic base would ensure a common ground for these institutions to work with. (b) Credit concession for forestry and agricultural intensification in the Amazon has been hampered by the lack of land tenure regularization among other things. Thus, providing spatial data for land tenure regularization is likely to have a positive effect on the expansion of credit markets and on the intensification of land uses in the Amazon. (c) Law enforcement effectiveness has been hampered by the lack of official cartographic information. In many cases, court action and punishment have been questioned because the spatial information used to build some cases was not official. This creates room for never-ending litigation and decreases the credibility of the judiciary. (d) Public sector planning has had its effectiveness limited also because there is currently no spatial consideration to investments. Thus very little advantage is taken of possible scale-gains due to the agglomeration of public investments. The Ministry of Planning is considering the use of this criterion on the next PPA. As such it has commissioned a spatial database that may use the digital database proposed for the Amazon as means of improving its plans. An additional challenge lies in the fact that a significant part of the Amazon is not covered by any cartographic work, neither analog nor digital, in the 1:100.000 scale, which is adequate for natural resources management and conflict management - the so called vazio cartográfico ("cartographic void"). This represents about 15% of the Amazon (see map in Annex 15). 14 The Bank has already supported numerous initiatives regarding the production of spatial data in the Amazon. These activities include the zonings of Rondônia and Mato Grosso, several zonings in all Amazon states and the production digital cartographic bases in all Amazon states. However, this work was not mainstreamed into the National Cartography System that encompasses official and legally valid cartographic information. Thus it is now necessary to take the final steps to complete this phase of cartographic work in the Amazon. Consistent means to share geographic data among all users could produce significant savings for data collection and use, and enhance decision making. This calls for the establishment of the National Spatial Data Infrastructure (NSDI), as sought by the National Cartography Commission (CONCAR) defined as the technologies, policies, and people necessary to promote sharing of geospatial data in all levels of government, the private and non-profit sectors, and the academic community. Within CONCAR, the official certification and maintenance of national cartographic databases lies, by law, with two federal agencies, the Brazilian Institute of Geography and Statistics (IBGE, an agency under the Planning Ministry) and the Directorate of Geographical Services (DSG, an agency of the Army Command, under the Defense Ministry). Implementation of the main project activities (cartography) is assigned to DSG and IBGE, both institutions of excellence in Brazil in their area of work, with long standing expertise and experience in cartography. These are also the only institutions in Brazil legally designated to officially approve analog and digital maps to be included into the National Cartographic System. The goals of this structure are to reduce duplication of efforts among agencies, improve quality and reduce costs related to geographic information, make geographic data more accessible to the public, increase the benefits of using available data, and establish key partnerships with states, counties, cities, academia and the private sector in order to increase data availability. The NSDI provides the technology, policies, criteria, standards and people necessary to promote geospatial data sharing in all levels of government, the private and non-profit sectors, and academia. It provides a base or structure of practices and relationships among data producers and users that facilitates data sharing and use. It is a set of actions and new ways of accessing, sharing and using geographic data that enables far more comprehensive analysis of data to help decision-makers chose the best course(s) of action. The issue then is to provide a reliable, officially recognized and certified cartographic base for the entire Amazon region in an easily accessible, digital form to allow government to perform its role efficiently. Certain unmapped spaces of the Amazon still require their first mapping, from available aerial and satellite images, directly digitized and entered into the official digital cartographic base. 15 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies BRAZIL: AMAZON CARTOGRAPHY PROJECT Project Agency Sector Issues Addressed Rating IP PDO National Rural Cadastre IDB Security of rural property rights, registration, land Project tenure regularization n/a n/a National Environment IBRD Environmental management, strengthening of Program II environmental state and municipal agencies, management and protection of environmental n/a n/a assets (under preparation) Pará Rural Development IBRD Land tenure regularization, sustainable rural Project development, land use zoning n/a n/a Tocantins Sustainable IBRD strengthened land management capacity; Regional Development consolidated environmental protection system; MS MS Project regulation and promotion of sustainable land use 16 Annex 3: Results Framework and Monitoring BRAZIL: AMAZON CARTOGRAPHY PROJECT Project Development Objective Outcome Indicators Public availability of a reliable, comprehensive, (a) Cartographic data bases, with identical structure, officially approved and legally valid digital including topographical and hydro-graphical data as cartographic database of high quality for the entire well as political boundaries, road network, urban Legal Amazon region, for use in administrative and settlements, land marks and perennial vegetative law enforcement procedures related to land tenure cover of the entire Brazilian Amazon basin, and use of land and natural resources (such as consisting of 1,815 digital maps, delivered to forests and timber). designated public agencies of each of the nine Amazon states. (b) State agencies trained in use of databases (c) databases or derived products available to the public over the Internet Intermediate Results Results Indicators for Each Component By Component Existing digital cartographic databases of Acre, 622 digital map sheets revised and loaded into Amapá, Maranhão, Rondônia, Roraima and database by IBGE or DSG Tocantins validated and approved Existing analog maps available in the National 461 digital map sheets prepared, revised and loaded Cartographic System digitized and approved into database by IBGE or DSG New digital maps of un-mapped spaces in the States 450 digital map sheets prepared, revised and loaded of Amazonas, Mato Grosso and Pará produced and into database by IBGE or DSG approved to date Digital cartographic base of Mato Grosso state 282 sheets digital map sheets revised and loaded adjusted, corrected and approved. into database by IBGE or DSG (a) State agencies trained in the use of cartographic (a) State agencies in each state certify in writing that databases delivered and at least ten private agencies they have acquired the relevant knowledge and skills trained in methodology and quality standards to work with the cartographic database provided expected from official cartography. (b) Existence and availability of databases and their (b) Availability of digital cartographic database and geographic information disseminated to relevant instructions for access published in IBGE's and target audiences. DSG's website. Seminars held involving relevant stakeholders. (c) Events (workshops, seminars, courses) for the dissemination of the national cartographic databases methodology (required standards of production). to (c) Confirmation of events. the private sector 17 Arrangements for Results Monitoring Data Collection and Reporting Outcome Indicators Baseline Year 1 Year 2 Frequency and Data Collection Responsibility for Data Collection Reports Instruments (a) Cartographic data bases n/a 8 blocks of 9 blocks of Half-yearly Verification on IBGE/DSG MMA/ST with identical structure, 96 sheets 96 sheets servers including topographical and loaded in loaded in Confirmation of delivery by hydro-graphical data as well as database database state agencies political boundaries, road and and network, urban settlements, delivered delivered landmarks and perennial vegetative cover of the entire Brazilian Amazon basin, consisting of 1,815 digital maps delivered to designated public agencies of each of the nine Amazon states. (b) State agencies trained in the use of databases (c) databases or derived products available to the public over the Internet Results Indicators Component A : Existing - 109 sheets 112 sheets Half-yearly Verification on IBGE/DSG MMA/ST digital cartographic databases DSG DSG servers of Acre, Amapá, Maranhão, 200 sheets 203 sheets Confirmation of delivery by Rondônia, Roraima and IBGE IBGE state agencies Tocantins validated and approved Component B: Existing analog - 204 sheets 204 sheets Half-yearly Verification on IBGE/DSG MMA/ST maps available in the National DSH DSH servers Cartographic System digitized 16 sheets 20 sheets Confirmation of delivery by and approved IBGE IBGE state agencies 18 Data Collection and Reporting Outcome Indicators Baseline Year 1 Year 2 Frequency and Data Collection Responsibility for Data Collection Reports Instruments Component C: New digital - 200 sheets 204 sheets Half-yearly Verification on IBGE/DSG MMA/ST maps of currently un-mapped DSG DSG servers spaces in the States of 62 sheets 64 sheets Confirmation of delivery by Amazonas, Mato Grosso and IBGE IBGE state agencies Pará produced and approved Component D: Digital - 148 sheets 151 sheets Half-yearly Verification on IBGE/DSG MMA/ST cartographic base of Mato DSG DSG servers Grosso adjusted, corrected and Confirmation of delivery by approved state agencies Component E: Project - - - - Regular communication MMA/ST management, policy dialogue with Project Coordination, and dissemination of project implementing agencies and products. partners. 19 Annex 4: Detailed Project Description BRAZIL: AMAZON CARTOGRAPHY PROJECT The project area is the "Legal Amazon", covering an area of 5,088,271-km2. The project splits the mapping responsibility for the Legal Amazon between the Brazilian Institute for Geography and Statistics - IBGE and the Directorate for Geographic Service - DSG. Overall, there are 1,815 map sheets involved at a 1:100,000 scale, and each sheet covers about 2,800 km2. Figure 1 shows the assignment of work responsibilities between the two institutions and the geographical distribution of the four principal activities. The project has five components: (a) Review, revision and validation of existing digital cartographic databases in the states of Acre, Amapá, Maranhão, Rondônia, Roraima and Tocantins (622 sheets, 1.74 million km2, 34% of legal Amazon); (b) Digitalization, updating and validation of existing (analog, printed) maps already available in the National Cartographic Systems (461 sheets, 1.29 million km2, 25% of legal Amazon); (c) Production of digital maps from geo-referenced satellite images for currently un-mapped spaces in the States of Amazonas, Mato Grosso and Pará (450 sheets, 1.26 km2, 25% of legal Amazon); (d) Adjustment and correction of the digital cartographic base of the State of Mato Grosso (282 sheets, 0.19 million km2, 16% of legal Amazon); (e) Project management, training, dissemination, monitoring and evaluation. The final product of the project will be the officially approved cartographic base of the Legal Amazon, as part of the National Cartographic System, at the scale of 1:100,000, loaded into the IBGE and DSG databases. It would consist of 1,815 digital map sheets, structured, validated and loaded into a publicly accessible geographic information system. The content of the cartographic base would include topography, rivers, water courses and lakes, roads, railroads, urban settlements, large infrastructure, landmarks, special areas (conservation units, indigenous lands, military areas) and permanent land cover. A. Assessment and validation of existing digital cartographic bases (US$ 0.59 million) 20 Digital cartographic bases at the scale 1:100,000 are already available for the states of Acre, Amapá, Maranhão, Rondônia, Roraima and Tocantins, or about a third of the legal Amazon. These maps/databases were produced by private firms under contract with state agencies from existing analog maps and satellite imagery. These databases have not been audited for quality and are thus not yet officially approved by the relevant federal authorities (IBGE and DSG). These agencies will, therefore, assess and review the available digital cartography in these states for errors, to assure the quality of the final database. The work for this component would follow a methodology agreed among the agencies involved and include the following steps: · Review and revision of vectorized map data · Topological validation (including in-loco verification) · Linking of sheets into cartographic blocks · Loading into official database The IBGE would validate and approve 421 sheets for Rondônia, Roraima and Amapá states, and the DSG 201 sheets for Acre state. The states will provide geographic information and logistical support. The implementation period would be 2 years. B. Digitalization, update and validation of existing printed (analog) maps (US$ 1.51 million) Existing traditional (analog) maps exist for parts of the states of Amazonas and Pará, representing about a quarter of the legal Amazon. Most of the digitalization work would be carried out by DSG (425 sheets), and only a small part by IBGE (36 sheets). The work involves the following steps: · Scanning of original maps in the National Cartography System into bitmaps · Geo-referencing of digitized maps (17 points per sheet) · Vectorization of features and critical revision · Topological validation and linking of sheets into blocks of 96 sheets each · Uploading into database · Updating of cartography (features, classification of land cover) using satellite images · Identification and adjustment of political-administrative boundaries, conservation units and indigenous lands · Loading of updated data into the official database. C. Production of digital maps from geo-referenced satellite images for un-mapped spaces (US$ 1.44 million) About a quarter of the Legal Amazon has not been mapped at all thus far, and obviously has not been digitized. These unmapped spaces are found in the northern part of the state 21 of Amazonas, as well as in central and northern Pará. DSG will implement 324 sheets, and IBGE 126. Rather than producing analog maps first, the production of digital maps will be based directly on medium resolution satellite images (or better, if available), and only to a limited degree on aerial photography. The work would involve the following steps · Acquisition of images · Adjustment and geo-referencing of images · Identification, classification and vectorization of map features · Identification and adjustment of the political-administrative boundaries, conservation areas and indigenous lands · Topological validation and linking of sheets into blocks of 96sheets each · Loading of updated data into the cartographic database. The States of Amazonas and Pará will provide geographic information and logistical support. D. Correction and approval of the digital cartographic base of Mato Grosso (US$ 0.96 million) Mato Grosso already has a complete digital cartographic database, which is not recognized nor officially approved by federal authorities yet. The validation, correction and approval will be carried out by DSG only. The methodology to be used for adjusting and correcting the digital database of Mato Grosso has been agreed among MMA, IBGE, DSG, and the Planning Secretariat and Land Institute of Mato Grosso. The steps involved are essentially the same as those mentioned in Component A. In summary, the cartographic components and responsibilities, by number of map sheets, will be as follows: Assignment Evaluation and Digitizing of Production of Correction of TOTAL validation of existing analog digital maps the digital existing digital maps for unmapped database of databases areas Mato Grosso Institution IBGE DSG IBGE DSG IBGE DSG IBGE DSG IBG DSG E Sheets 421 201 36 425 126 324 - 282 583 1232 TOTAL 622 461 450 282 1815 E. Project management, training, dissemination, monitoring and evaluation (US$0.20 million) This component includes: 22 · Operation of the Technical Secretariat as project management/coordination unit within MMA, including administrative activities such as financial management, procurement (with assistance from UNDP) and reporting. · monitoring of activities and evaluation of intermediate results; · training of state personnel in the use of digital databases; · training of private firms in methodology, best practice and quality criteria for digital mapmaking; · workshops to exchange experiences among implementing agencies (MMA, DSG and IBGE) and state agencies; and · auditing of project accounts. The training would be provided by IBGE and DSG staff. Workshops would be organized and conducted by ST/MMA. Auditing would be conducted by an independent auditing firm selected per Bank guidelines. 23 Annex 5: Project Costs BRAZIL: AMAZON CARTOGRAPHY PROJECT Project Cost By Component and/or Local Foreign Total Activity US US US $million $million $million Assessment and validation of existing 0.28 0.29 0.57 digital cartographic basis Assessment and validation of existing 0.68 0.66 1.34 digital cartographic basis Assessment and validation of existing 0.64 0.64 1.28 digital cartographic basis Correction and approval of the digital 0.43 0.43 0.86 cartographic base of Mato Grosso Project management, training, 0.0 0.18 0.18 dissemination, monitoring and evaluation Total Baseline Cost 2.03 2.20 4.23 Physical Contingencies 0.11 0.12 0.23 Cost Contingencies 0.12 0.12 0.24 Total Project Costs 4.70 Total Financing Required 4.70 24 Annex 6: Implementation Arrangements BRAZIL : AMAZON CARTOGRAPHY PROJECT The Technical Secretariat (ST) in MMA will act as the managing and coordinating unit. As such it will provide annual operating plans and budgets, arrange for implementation agreements with the executing agencies DSG and IBGE, request funds from the Finance Ministry, transfer resources to DSG and IBGE, prepare quarterly Interim Financial Reports (IFRs) as the basis for disbursement requests, monitor and verify physical implementation, and prepare half-yearly project reports to the Bank. It will also organize training events for state agencies and for interested private firms, as well as workshops to exchange experiences among executing agencies. It will also have the project accounts audited each year. The ST will count with a minimum structure in information technology to support management and coordination, as well as with funds for travel expenses, consultant services, workshops and training necessary to carry out its functions. The executing agencies for the cartographic work are the two institutions responsible for the National Cartography System: IBGE and DSG. These are the only institutions capable of approving and certifying cartographic work (maps and digital databases) for inclusion in the National Cartography. The Directorate for Geographic Services (DSG) is a technical-normative support body of the Army Command and as such is in charge of managing all cartographic activity related to the preparation of products, supply and maintenance of material. Most of its budget and workload are not from/for the Army itself, but results from agreements (convênios) for specific projects and tasks with other agencies of government. DSG coordinates the work of four Survey Divisions and of the Army's Geographic Image and Information Center, at five locations throughout Brazil. DSG has fifty higher-level staff (engineers, geographers) with M.A.s and doctorates in cartography and information technology. Furthermore, DSG has some 400 middle-level technical staff trained by the Army's School for Specialized Instruction and on-the-job. Available staff has accumulated substantial expertise and experience in digital cartography. IBGE, the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatistica), is the agency responsible for statistical, geographic, cartographic, geodetic and environmental information in Brazil. IBGE is subordinated to the Ministry of Planning, and would compose with IPEA two important pillars of federal government planning structure. The directorate of Geosciences (Diretoria de Geociências ­ DGC) is responsible for producing and organizing cartographic, geodetic, natural resources and environmental information. DGC has a staff of 400 (including 50 higher level staff) distributed in six regional units7 which are responsible for cartographic work. 7In the states of Bahia, Ceará, Goiás, Distrito Federal, Pará and Santa Catarina. 25 These two institutions were selected as implementing agencies because of technical know-how, skills and capacity, but also for legal reasons. According to the Federal Constitution (Art. 21, paragraph XV), the Union is responsible for organizing and maintaining official services for statistics, geography, geology and cartography at the national level. This responsibility has been regulated, as far as cartography is concerned, by Decree-Law no. 243 of 1967. Its Article 15 sets forth that all cartographic work performed in Brazil must comply with the technical norms established by the competent federal bodies. According to the decree, the establishment of technical norms for Brazilian cartography is a responsibility of IBGE, as far as the essential geodesic network is concerned and the overall charts, at scales smaller than 1:250,000; and DSG, of the Army, as far as overall charts at a 1:250,000 scale and above are concerned. Additionally, according to the Decree, all public, semi-governmental, para-governmental bodies, mixed economy societies and foundations that may prepare charts - either direct or indirectly - for any purposes at scales between 1:1,000,000 and 1:250,000, are obliged to comply with the standard and norms of the National Cartography System, except when other technical requirements exist. As Executing Agencies DSG and IBGE will carryout field work activities and will be responsible for monitoring operational costs incurred, which will include travel and subsistence expenses, fuel, office consumables, and minor services. Purchases would be made after local shopping from least-cost providers. They may also carry out bidding processes for acquisition of goods (vehicles, computers, images, softwares and productive equipment) required for carrying out the proposed activities. The fiduciary controls were assessed for DSG since it will handle financial resources to cope with field work activities. The assessment concluded that the fiduciary controls in place at DSG (SIAFI) are adequate to provide timely and accurate information on the allocation and expenditure of grant funds. These controls are capable of tracking absolutely all expenditures, and of providing both digital and hard copy information to auditors and project supervision teams. In addition, the MMA will, through the National Cartography Commission (CONCAR), establish a working group for the purposes of, inter alia, monitoring and guiding the implementation of the Activities, including the endorsement of Grant outputs prior to submitting to the Bank written applications for withdrawal Grant funds (including submission of the IFRs). The organizational structure of the project is summarized in the following figure: 26 Ministry of Environment Secretariat for Extractivism Monitoring Working and Sustainable Rural Group Development Guiding the project implementation and certification of outputs. Directorate of Territorial Zoning UNDP Technical Secretariat for the Tech. Cooperation in Project procurement of goods and services. DSG IBGE Implementing Implementing Agency Agency 27 Annex 7: Financial Management and Disbursement Arrangements BRAZIL: AMAZON CARTOGRAPHY PROJECT The Grant will be implemented under the coordination of the Environment Ministry through its Sustainable Development Policies Secretariat, and will be executed by IBGE ­ the Brazilian Institute for Geography and Statistics (Planning Ministry) and DSG ­ Geographic Services Division (Defense Ministry). I- Financial Management Assessment: A financial management risk assessment was carried out in accordance with OP/BP 10.02 and the Guidelines for Assessment of Financial Management Arrangements in World Bank Financed Projects issued by the Financial Management Sector Board on October 15, 2003. The purpose of the assessment is to determine whether the IA (Implementing Agencies) has or will have by effectiveness acceptable financial management and disbursements arrangements in place to adequately control, manage, account for and report about the funds to be allocated to this Project. These arrangements include, but are not limited to its capacity to: (a) properly manage and account for all Grant's proceeds, expenditures and transactions, (b) produce timely, accurate and reliable financial statements and reports, including financial monitoring reports (IFRs) for Project Management and other Bank purposes, (c) safeguard the Project's assets, and (c) disburse Bank funds in the most efficient way, in accordance with applicable Bank rules and procedures. The assessment involved analysis of: a) Budgeting, financial, accounting and reporting system; b) financial and administrative staff to be engaged in the Project; c) review of funds flow mechanism, d) review of internal controls and administrative procedures, e) disbursement methodology; f) reporting requirements, including format, contents and frequency of IFRs submission to the Bank, and g) external audit arrangements. Conclusion of the Financial Management Assessment: The conclusion of the FM assessment is that the financial management arrangements as set out for this Grant, satisfy the Bank's minimum requirements and that financial management systems are in place that can effectively control and monitor the Project preparation financed by the Grant, and provide with reasonable assurance, accurate and timely information on the progress of Project implementation. Financial Management Risk Analysis: The overall financial management risk associated with this project is considered moderate, as demonstrated in the Risk Framework below: 28 Risk Framework Risk H S M L Comments Inherent Risks i. Federal Government X ii. Entity specific X iii. Project specific X Control Risks iv. Implementing Agency X Not much experience and more than one IA involved v. Flow of funds X Funds flow directly to National Treasury single account vi. Staff X Need training on WB procedures vii. Accounting policies and procedures X SIAFI and SIGMA, see para.7 & 8 viii. Internal Audit Not applicable ix. External Audit X SFC x. Reporting and monitoring X IFRs xi. Computer Systems X SIAFI and SIGMA H ­ High, S - Substantial, M ­ Moderate, L - Low Mitigation measures for all risks identified as Modest include Training on WB procedures and policies, Close supervision made by PIU staff on the convenios (Intergovernmental agreements), implementation and proper use of funds, segregation of functions, operational manual, review of audit report and close follow up with UNDP use of grant proceeds. This is a federal Project and there are no major FM or accountability risks. FM strengths: full integration with overall PFM of STN, good SIAFI and SIGMA systems. Risk mitigation measures: annual supervision missions, review of quarterly reporting (IFRs), annual audit. II - Financial Management Arrangements Project Implementation Unit & Staffing: The Grant will be implemented under the Coordination of the MMA (Environment Ministry) through its Secretariat for Extractivism and Sustainable Rural Development (SEDRS). Co-executors will be IBGE (Planning Ministry) and DSG (Defense Ministry). The PIU will have a Technical Coordination in charge of elaborating the cartographic base for the Project and review of existing maps, and a Financial Coordination in charge of all Administrative/Financial matters, "convênios" and legal documentation, accounting, disbursement, reporting and systems operation. UNDP will provide assistance in the procurement for goods, services and hiring of consultants. Most of the 29 staff will be transferred from the SPRN Project (RFT TF 21958) which will be closed by year end. The financial staff is experienced in dealing with Bank financed Projects. Flow of funds and disbursement of Grant funds: As per procedures currently in place determined by STN (Treasury Secretariat of the Finance Ministry), all the resources required for the Project, including those for UNDP will be advanced by STN through a budgetary Unit (UG ­ Unidade Gestora) to be established in SIAFI8. Once the annual federal budget is approved, this UG will receive its share of the federal annual budget and all payments and expenses will be charged to this budgetary Unit. As the Project implementation process advances, the PIU will book all commitments (empenhos), payments (liquidações) and Bank's payment orders through SIAFI. UNDP will document all payments made from the advances received, through its own SAP system which will be accessed by the PIU for monitoring and controlling. Copy of invoices should be available for Bank review. Disbursements by the Bank (reimbursements) will be report-based (IFR) and will be requested quarterly, after monitoring the delivery of maps, as per the table below, based on payments actually made and recorded in SIAFI. The amount disbursed at each quarterly disbursement will not be superior to the proportion of grant proceeds used to produce the maps, as per the table. A payment order (OB ­ Ordem Bancária) will be periodically obtained from SIAFI (e.g. monthly or quarterly), classified by cost category, and included in the IFR, which will then be submitted to the Bank. Payments made by UNDP will also be included in the IFR. For this purpose, the PIU will have access to UNDP's SAP/R3 to check payments for the same period to be included in the IFR. The amounts reimbursed by the Bank will be deposited directly in the National Treasury single account. Quarters Q1 Q2 Q3 Q4 Q5 Q6 Q7 Maps delivered at each quarter, by component and Executing executing agency. Component Agency Total 1. Review, revision DSG 65 - 24 28 28 28 28 201 and validation IBGE 118 50 50 50 51 51 51 421 2. Digitalization, DSG 51 51 51 51 119 51 51 425 updating and validation of existing maps IBGE 8 4 4 5 5 5 5 36 3. "Cartographic DSG 80 40 40 41 41 41 41 324 void" IBGE 30 16 16 16 16 16 16 126 8Sistema Integrado de Administração Financeira 30 4. Adjustment and DSG 40 40 40 40 40 40 42 282 correction of the digital cartographic base of the State of Mato Grosso - 392 201 225 231 300 232 234 1815 TOTAL - 22% 11% 12% 13% 17% 13% 13% 100% above. WB RFT Grant STN Single Account Disbursement SIAFI IFR PIU Executing SIGMA UG Agencies Accounting Policies, Information system and internal controls: Budgeting accounting and financial execution will be made via SIAFI. Once the annual federal budget is approved by the Congress, the Financial/Budget Unit of the Environment Ministry (MMA) will record the approved budgetary resources in SIAFI for the Project in its specific UG. All commitments (empenhos), liquidations (liquidações) and payments must be made through SIAFI. MMA uses an internally developed system ­ SIGMA to control, monitor, account for and prepare financial reporting for all of its Projects. Besides all these functions, SIGMA is able to issue all required reports in IFR format. SIGMA is also accessible via Web which facilitates data input from the various Project's partners and participants. SIAFI and SIGMA should jointly fulfill the requirements established in section 5 of the Annex to the Grant Agreement. Disbursements and Reporting ­ IFRs: The following quarterly IFRs will be issued directly from SIGMA for disbursements purposes. The reports below will be forwarded to the Bank not later than every quarter, 31 with any other form requested by the Loan Department, and sent with the Disbursement Letter. Sample of the IFRs are available in SIGMA and were approved by the Bank. 1-A: Sources and Use of Funds by disbursement category as per Loan Agreement 1-B: Statement of Investments by Project Components and Activities 1-C: Actual Disbursement (attached with latest Bank Statement) 1-D: Disbursement Forecast 1-E: Contract above Thresholds (attached with copy of the invoices) All the IFRs will be in local currency (R$), and expenditures figures will be stated by quarter and accumulated for the Project. IFRs will be submitted to the Bank not later than 45 days after the closing of each quarter. Year end IFRs could be used for external auditing purposes. External audit/supervision: External audit will be performed by SFC ­ Secretaria Federal de Controle Interno da Controladoria-Geral da União, as part of their regular annual audit of all Federal Projects. At least one supervision Mission will be carried out by the Bank each year. For cost effectiveness reasons, it was suggested that in case the implementation starts in the second semester of the calendar year, the first audit report would cover 18 months, which is the maximum period allowed by WB guidelines to be covered by the first auditing report scope. On the other hand, if implementation starts in the first semester, the first audit report should cover from loan effectiveness until end of such calendar year. In both cases, the audit report should be delivered to the bank up to six months after end of prior calendar year, as stated in the Financial Management Audit Guidelines, dated June 2003. The scope of the audit will be determined by each borrower in accordance with the Bank, based on project specific circumstances and audit TOR will be issued accordingly. The bank must approve audit TOR before negotiations take place. It should be included in the Operation Manual. The scope should cover but not be limited to: (i) fully review of the fourth IFRs (for each calendar year), (ii) review the appropriate observance of the financial management arrangements included in this Annex as well as any other WB official documentation, (iii) proper use of SIAFI and SIGMA, (iv) internal control arrangements and, (v) timely availability of counterpart funds. At least one supervision Mission will be carried out by the Bank each year, and should review the arrangements set forth in this annex and the impact of any change. 32 Annex 8: Procurement Arrangements BRAZIL AMAZON CARTOGRAPHY PROJECT A. General Procurement for the proposed project would be carried out in accordance with the World Bank's "Guidelines: Procurement Under IBRD Loans and IDA Credits" dated May 2004 and revised October 2006; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004 and revised October 2006, and the provisions stipulated in the Legal Agreement. The various items under different expenditure categories are described in general below. For each contract to be financed by the Grant, the different procurement methods or consultant selection methods, the need for pre- qualification, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank in the Procurement Plan. The Procurement Plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. Procurement activities following Bank's Guidelines under this project will comprise acquisitions from MMA, DSG and IBGE, each one with its own procurement arrangements, with a total estimated amount of $ 4.7M. Procurement takes place in all five project components, i.e., the revision and validation of existing digital cartographic databases in the states of Acre, Amapá, Maranhão, Rondônia, Roraima and Tocantins; digitalization, updating and validation of existing (analog, printed) maps already available in the National Cartographic Systems; production of digital maps from geo- referenced satellite images for currently un-mapped spaces in the States of Amazonas, Mato Grosso and Pará; adjustment and correction of the digital cartographic base of the State of Mato Grosso; and project management, training, dissemination, monitoring and evaluation. Procurement of Works: No procurement of works is anticipated under this project. Procurement of Goods: Procurement of vehicles, GPSs, IT equipment, software, satellite images, fuel, and air-line tickets are anticipated under the project and the procurement methods for those services will be Bank's Shopping procedures, NCB or "electronic pregão" through ComprasNet system, ICBs, and Direct Contracting. Procurement of non-consulting services: Procurement of non- consulting services are anticipated under this project by MMA for training purposes, and IBGE and DSG for operational costs, such as vehicle and computers maintenance, mailing services, etc. The procurement methods for those services will be Bank's Shopping procedures, NCB or "electronic "pregão" through ComprasNet system. Procurement procedures for IBGE and DSG's operational costs are detailed bellow. Operational Costs: Operational costs are listed under the Procurement Plan as "custeio" and represent costs with transportation, fuel, vehicle parts, food, office supplies, perdiem, 33 sundries, incidentals, and other project implementation related expenses which would be financed by the project and would be procured using the implementing agency's administrative procedures, which were reviewed and found acceptable to the Bank. Air line tickets and large fuel contracts shall be part of the procurement plan and follow Bank's Procurement Guidelines either through Shopping or NCB or electronic "pregão" through ComprasNet system procedures. Procurement by IBGE and DSG under operational costs for amounts bellow USD5,000 per purchase, where shopping procedures can't be followed because 3 quotations are impossible to get, can be directly contracted without Bank's prior no-objection, following their current procurement procedures known as "Suprimento de Fundos". Such processes will be entitled for procurement post review. Selection of Consultants: MMA is the only agency where selection of consultants is anticipated, both for Firms and Individuals, and these services will be hired through Quality and Cost Based Selection (QCBS), Selection Based on Consultants Qualification (CQS), Single Source Selection (SSS ­ with due Bank's No-objection Letter on a case by case basis) and Individual Consultants (IC). Short lists of consultants for services estimated to cost less than $500,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. The procurement procedures and SBDs (Standard Bidding Documents) to be used for each procurement method, as well as model contracts for works and goods procured, are part of the Project Operational Manual Summary: Expenditure Contract value Procurement Contracts subject to prior review category threshold a method (US$ thousands) Goods >500 ICB All processes 500 < 100 NCB or pregão First process for each implementing agency and all eletrônico cases to cost over US$ 250,000 100 Shopping First process for each implementing agency Non-consulting >500 ICB All processes services 500 < 100 NCB or pregão First process for each implementing agency and all (incl. training, eletrônico cases to cost over US$ 250,000 communication) 100 Shopping First process for each implementing agency Consulting >200 QCBS First process for each implementing agency and all (firms) cases above US$100,000 200 QCBS/CQS/SSS First process for each implementing agency and all cases above US$100,000 Consulting Section V in the All cases above US$50,000 and all single-source (individual) Guidelines contracts Direct All cases regardless of the amounts involved contracting 34 The thresholds will be reviewed when the implementing agencies gain experience in Bank's rules and regulations. All single-source selection of goods and works, regardless of the amount of the contract, will be subject to prior review by the Bank. B. Assessment of the agency's capacity to implement procurement Procurement activities will be carried out by MMA ­ through UNDP, IBGE ­ through Geosciences Department, and DSG ­ through DCT (Army Department of Science and Technology). MMA capacity has been accessed in a recent past as the Ministry already countersigns a number of Bank's grant agreements. MMA's Procurement is processed through a PRODIC with UNDP. IBGE capacity has also been accessed in a recent past as they countersign a Bank's HD Technical Assistance Loan. DSG is the only "new to the Bank" institution and DCT ­ their procurement agent ­ is staffed by one Administrative Manager Colonel and one President for the Permanent Bidding Commission Major, and the procurement function is staffed by 7 procurement agents. An assessment of DCT's capacity to implement procurement actions for the project has been carried out by Frederico Rabello on September 05, 2007. The assessment reviewed the organizational structure for implementing the project and their procurement practices. It also analyzed the Procurement Department capacity to handle procurement in accordance with Banks Guidelines. The amount of funds to be spent by DCT in a short period of time, i.e. USD 1.6M in 6 months, is considered high when compared to their current budget and the Administrative Manager Colonel foresees the need to increase the Procurement Department work force. The key issues and risks concerning procurement for implementation of the project under DSG have been identified and include 1) the fact that DSG/DCT has never dealt with Bank's Guidelines and 2) the lack of English language knowledge to handle international procurement. The corrective measures which have been agreed are: Procurement Action Plan Action Timeframe 1 Revision of the General Procurement Plan for the life of the Before effectiveness. project for each of the participating agencies to cover line items that are possibly listed as Operating Costs but need to be listed as Procurement of Goods. 2 Training DSG/DCT staff on Bank-procurement policies. By effectiveness. 3 Identification of an in-house professional or an ad-hoc By effectiveness. consultant to handle Bank's SBDs in English. 4 Revision of the section on procurement in the operations By negotiations manual including a detailed description of all procurement methods allowed, and when to apply the national law, 35 especially the "pregão eletrônico" 5 Implement a procurement monitoring system capable of By effectiveness. capturing and consolidating all relevant procurement information. The overall project risk for procurement is HIGH. C. Procurement Plan At appraisal, a procurement plan for project was developed which provides the procurement method to be used for each procurement action. This plan needs revision to incorporate procurement of items that were, by mistake, left out of it. The final version needs to be approved before Grant signature and it will be available at the Department of Special Projects (DSP), at the project's database and at the Bank's external website. The Procurement Plan will be updated in agreement with the Project Team annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. D. Frequency of Procurement Supervision In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment of the Implementing Agency has recommended annual supervision missions to visit the field to carry out post review of procurement actions. The procurement documents for the first procedure under each acquisition method and under each implementing agency, irrespective of its estimated amount, will be subject to prior review, therefore assuring quality and consistency for subsequent procurement activities. The procurement documents for all ICB will be subject to Bank's prior review, irrespective of the estimated amount of contract. The first NCB or pregão eletrônico and all of them to cost above $250,000 will be subject to Bank's prior review. Contracts for consultant firms estimated to cost above $100,000 will be subject to prior review by the Bank; individual consultants for contracts estimated to cost above $50,000 will be subject to prior review by the Bank. The Bank's review of selection of consultants will be in accordance with Appendix 1 of the Guidelines for Selection and Employment of Consultants and the provisions stipulated in the Grant Agreement. Consultant contract documents to be reviewed will include TORs, shortlists, evaluation reports, and contract forms. E. Details of the Procurement Arrangements Involving International Competition 36 1. Goods, Works, and Non Consulting Services (a) List of contract packages to be procured following ICB and direct contracting: 1 2 3 4 5 6 7 Ref. No. Contract Estimated Procurement Review Expected Comments (Description) Cost Method by Bank Bid-Opening (Prior / Date Post) 1 DSG's ICB USD ICB Prior January for IT 583,000 review 2008 equipment 2 DSG's Direct USD Direct Prior January Contracting 204,800 Contracting review 2008 for software (b) All ICB and all direct contracting will be subject to prior review by the Bank. 2. Consulting Services (a) List of consulting assignments with short-list of international firms. N/A (b) Consultancy services estimated to cost above $100,000 per contract and single source selection of consultants for firms, and individual consultants for assignments estimated to cost above $50,000 will be subject to prior review by the Bank. (c) Short lists composed entirely of national consultants: Short lists of consultants for services estimated to cost less than $500,000 equivalent per contract, may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. 37 Annex 9: Economic and Financial Analysis BRAZIL: AMAZON CARTOGRAPHY PROJECT n/a 38 Annex 10: Safeguard Policy Issues BRAZIL: AMAZON CARTOGRAPHY ROJECT n/a 39 Annex 11: Project Preparation and Supervision BRAZIL: AMAZON CARTOGRAPHY PROJECT Planned Actual PCN review 09/09/2005 02/16/2006 Initial PID to PIC NA NA Initial ISDS to PIC NA NA Appraisal 11/28/2005 08/27/2006 Negotiations 05/02/2006 CMU Director's approval 05/13/2006 Planned date of effectiveness 06/01/2006 11/01/2007 Planned date of mid-term review 02/01/2008 NA Planned closing date 10/30/2008 03/31/2009 Key institutions responsible for project preparation : Ministry of Environment Directorate of Geographic Services ­Ministry of Defense IBGE - Brazilian Institute for Geography and Statistics Bank staff and consultants who worked on the project included: Name Title Unit Alberto Ninio Lead Counsel LEGEN Christoph Diewald Consultant LCSRF Susana Amaral Financial Specialist LCSFM Flávio Chaves Operations Specialist LCSPT Garo Batmanian Senior Environ. Specialist LCSEN Thomas Ludewigs Senior Environ. Specialist LCSRF Cristina Roriz Operations Analyst LCSRF Frederico Rabello Procurement Specialist LCSPT 40 Annex 12: Documents in the Project File BRAZIL: AMAZON CARTOGRAPHY PROJECT 1. Aide Memories 2. Minutes of Quality Enhancement Review (QER) 3. Minutes of the Decision Meeting 4. Procurement Plan 5. Integrated Safeguards Data Sheet 6. Financial Management Assessment and Arrangements Report 41 Annex 13: Statement of Loans and Credits BRAZIL: AMAZON CARTOGRAPHY PROJECT Difference between expected and actual Original Amount in US$ Millions disbursements Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev'd P089011 2007 BR Municipal APL1: Uberaba 17.27 0.00 0.00 0.00 0.00 17.27 0.00 0.00 P095460 2007 BR-Bahia Integr.Hway Mngmt. 100.00 0.00 0.00 0.00 0.00 100.00 0.07 0.00 P089793 2007 BR State Pension Reform TAL II 5.00 0.00 0.00 0.00 0.00 5.00 0.00 0.00 P082651 2007 BR APL 1 Para Integrated Rural Dev 60.00 0.00 0.00 0.00 0.00 60.00 6.67 0.00 P082523 2006 BR HD Technical Assistance Loan 8.00 0.00 0.00 0.00 0.00 7.98 5.70 0.00 P066535 2006 BR GEF Amazon Aquatic Res - AquaBio 0.00 0.00 0.00 7.18 0.00 7.18 0.90 0.00 P082142 2006 BR-Ceara Multi-sector Social Inclus Dev 149.75 0.00 0.00 0.00 0.00 35.09 25.09 0.00 P081436 2006 BR-Bahia Poor Urban Areas Integrated 49.30 0.00 0.00 0.00 0.00 45.34 18.21 0.00 Dev P081023 2006 BR- Sugar Bagasse Cogeneration Project 0.00 0.00 0.00 0.00 0.00 0.27 0.00 0.00 P052256 2006 BR-MG Rural Poverty Reduction 35.00 0.00 0.00 0.00 0.00 29.45 5.90 0.00 P095675 2006 BR-2nd Progr. Sustn.& Equit Growth 601.50 0.00 0.00 0.00 0.00 601.51 601.51 0.00 P093787 2006 BR Bahia State Integ Proj Rur Pov 54.35 0.00 0.00 0.00 0.00 10.62 -19.77 0.00 P089440 2006 BR-Brasilia Environmentally Sustainable 57.64 0.00 0.00 0.00 0.00 57.50 16.19 0.00 P090041 2006 BR ENVIRONMENTAL SUST. 8.00 0.00 0.00 0.00 0.00 7.88 5.60 0.00 AGENDA TAL P092990 2006 BR - Road Transport Project 501.25 0.00 0.00 0.00 0.00 501.25 76.67 0.00 P050761 2006 BR-Housing Sector TAL 4.00 0.00 0.00 0.00 0.00 3.99 -0.01 0.00 P069934 2005 BR-PERNAMBUCO INTEG DEVT: 31.50 0.00 0.00 0.00 0.00 25.26 16.31 0.00 EDUC QUAL IMPR P082328 2005 BR-Integ.Munic.Proj.-Betim Municipality 24.08 0.00 0.00 0.00 0.00 4.64 -2.48 0.00 P075379 2005 BR GEF-RJ Sust IEM in Prod Landscapes 0.00 0.00 0.00 6.73 0.00 5.93 2.16 0.00 P083533 2005 BR TA-Sustain. & Equit Growth 12.12 0.00 0.00 0.00 0.00 10.79 5.49 0.00 P087711 2005 BR Espirito Santo Wtr & Coastal Pollu 36.00 0.00 0.00 0.00 0.00 27.36 25.38 0.00 P076924 2005 BR- Amapa Sustainable Communities 4.80 0.00 0.00 0.00 0.00 3.98 2.28 0.00 P088009 2005 BR GEF-São Paulo Riparian Forests 0.00 0.00 0.00 7.75 0.00 5.13 2.23 0.00 P080830 2004 BR Maranhao Integrated: Rural Dev 30.00 0.00 0.00 0.00 0.00 23.93 18.68 0.00 P083013 2004 BR Disease Surveillance & Control APL 100.00 0.00 0.00 0.00 0.00 60.79 43.29 0.00 2 P060573 2004 BR Tocantins Sustainable Regional Dev 60.00 0.00 0.00 0.00 0.00 55.54 41.54 7.64 P087713 2004 BR Bolsa Familia 1st APL 572.20 0.00 0.00 0.00 2.86 11.89 14.75 0.00 P080400 2003 BR-AIDS & STD Control 3 100.00 0.00 0.00 0.00 0.00 29.10 29.10 0.00 P076977 2003 BR-Energy Sector TA Project 12.12 0.00 0.00 0.00 0.00 12.00 12.00 0.00 P049265 2003 BR-RECIFE URBAN UPGRADING 46.00 0.00 0.00 0.00 0.00 40.95 29.80 9.31 PROJECT P054119 2003 BR BAHIA DEVT (HEALTH ) 30.00 0.00 0.00 0.00 0.00 14.71 12.46 0.00 P058503 2003 GEF BR Amazon Region Prot Areas 0.00 0.00 0.00 30.00 0.00 14.61 30.00 0.00 (ARPA) P070827 2003 BR-2nd APL BAHIA DEV. 60.00 0.00 0.00 0.00 0.00 1.77 1.77 0.00 EDUCATION PROJECT P074777 2003 BR-Municipal Pension Reform TAL 5.00 0.00 0.00 0.00 0.00 4.20 4.20 4.20 P073192 2002 BR TA Financial Sector 14.50 0.00 0.00 0.00 4.57 4.04 8.61 -0.08 42 P070552 2002 GEF BR PARANA BIODIVERSITY 0.00 0.00 0.00 8.00 0.00 2.96 7.98 0.00 PROJECT P043869 2002 BR SANTA CATARINA NATURAL 62.80 0.00 0.00 0.00 0.00 23.05 12.45 0.00 RESOURC & POV. P060221 2002 BR FORTALEZA METROPOLITAN 85.00 0.00 0.00 0.00 86.49 34.02 84.02 21.13 TRANSPORT PROJ P051696 2002 BR SÃO PAULO METRO LINE 4 209.00 0.00 0.00 0.00 0.00 82.88 82.88 71.19 PROJECT P057665 2002 BR-FAMILY HEALTH EXTENSION 68.00 0.00 0.00 0.00 0.00 13.25 13.25 0.00 PROJECT I P057653 2002 BR- FUNDESCOLA IIIA 160.00 0.00 0.00 0.00 0.00 62.35 -7.65 0.00 P050880 2001 BR Pernambuco Rural Poverty Reduction 30.10 0.00 0.00 0.00 0.00 30.63 0.63 0.42 P050875 2001 BR Ceara Rural Poverty Reduction 37.50 0.00 0.00 0.00 0.00 14.92 -22.58 -22.58 Project P050772 2001 BR LAND-BASED POVRTY 202.10 0.00 0.00 0.00 58.13 100.03 89.16 -1.53 ALLEVIATION I (SIM) P050881 2001 BR BR-PIAUI RURAL POVERTY 22.50 0.00 0.00 0.00 0.00 22.50 0.00 0.00 REDUCTION P073294 2001 BR Fiscal & Fin. Mgmt. TAL 8.88 0.00 0.00 0.00 0.00 5.29 4.99 4.99 P059566 2001 BR- CEARA BASIC EDUCATION 90.00 0.00 0.00 0.00 0.00 13.68 13.68 11.73 P039199 2000 BR PROSANEAR 2 30.30 0.00 0.00 0.00 6.40 13.62 20.02 7.12 P006449 2000 BR CEARA WTR MGT PROGERIRH 136.00 0.00 0.00 0.00 0.00 16.18 16.18 1.35 SIM P048869 1999 BR SALVADOR URBAN TRANS 150.00 0.00 0.00 0.00 32.00 15.44 47.44 0.00 P038895 1998 BR FED.WTR MGT 198.00 0.00 0.00 0.00 40.00 50.00 40.00 0.00 P043421 1998 BR RJ M.TRANSIT PRJ. 186.00 0.00 0.00 0.00 0.00 12.51 12.51 12.51 P043420 1998 BR WATER S.MOD.2 150.00 0.00 0.00 0.00 125.00 13.04 138.01 1.89 P006474 1998 BR LAND MGT 3 (SAO PAULO) 55.00 0.00 0.00 0.00 10.00 9.68 19.68 8.42 Total: 4,670.56 0.00 0.00 59.66 365.45 2,382.98 1,612.95 137.71 STATEMENT OF IFC's Held and Disbursed Portfolio In Millions of US Dollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. ABN AMRO REAL 98.00 0.00 0.00 0.00 15.77 0.00 0.00 0.00 2005 2005 ABN AMRO REAL 98.00 0.00 0.00 0.00 15.77 0.00 0.00 0.00 2001 AG Concession 0.00 30.00 0.00 0.00 0.00 30.00 0.00 0.00 2002 Amaggi 17.14 0.00 0.00 0.00 17.14 0.00 0.00 0.00 2005 Amaggi 30.00 0.00 0.00 0.00 30.00 0.00 0.00 0.00 2002 Andrade G. SA 22.00 0.00 10.00 12.12 22.00 0.00 10.00 12.12 2001 Apolo 6.04 0.00 0.00 0.00 3.54 0.00 0.00 0.00 1998 Arteb 20.00 0.00 0.00 18.33 20.00 0.00 0.00 18.33 2006 BBM 49.40 0.00 0.00 0.00 49.40 0.00 0.00 0.00 2001 Brazil CGFund 0.00 19.75 0.00 0.00 0.00 18.15 0.00 0.00 43 2004 CGTF 54.01 0.00 7.00 65.12 54.01 0.00 7.00 65.12 1994 CHAPECO 10.00 0.00 0.00 0.00 10.00 0.00 0.00 0.00 1996 CHAPECO 1.50 0.00 0.00 5.26 1.50 0.00 0.00 5.26 2003 CPFL Energia 0.00 40.00 0.00 0.00 0.00 40.00 0.00 0.00 1996 CTBC Telecom 3.00 8.00 0.00 0.00 3.00 8.00 0.00 0.00 1997 CTBC Telecom 0.00 6.54 0.00 0.00 0.00 6.54 0.00 0.00 1999 Cibrasec 0.00 3.27 0.00 0.00 0.00 3.27 0.00 0.00 2004 Comgas 11.90 0.00 0.00 11.54 11.90 0.00 0.00 11.54 2005 Cosan S.A. 50.00 5.00 15.00 0.00 50.00 5.00 15.00 0.00 Coteminas 0.00 1.84 0.00 0.00 0.00 1.84 0.00 0.00 1997 Coteminas 1.85 1.25 0.00 0.00 1.85 1.25 0.00 0.00 2000 Coteminas 0.00 0.18 0.00 0.00 0.00 0.18 0.00 0.00 1980 DENPASA 0.00 0.52 0.00 0.00 0.00 0.48 0.00 0.00 1992 DENPASA 0.00 0.06 0.00 0.00 0.00 0.06 0.00 0.00 Dixie Toga 0.00 0.34 0.00 0.00 0.00 0.34 0.00 0.00 1998 Dixie Toga 0.00 10.03 0.00 0.00 0.00 10.03 0.00 0.00 1997 Duratex 1.36 0.00 3.00 0.57 1.36 0.00 3.00 0.57 2005 EMBRAER 35.00 0.00 0.00 145.00 35.00 0.00 0.00 145.00 1999 Eliane 14.93 0.00 13.00 0.00 14.93 0.00 13.00 0.00 1998 Empesca 1.33 0.00 2.67 0.00 1.33 0.00 2.67 0.00 2006 Endesa Brasil 0.00 50.00 0.00 0.00 0.00 50.00 0.00 0.00 2006 Enerbrasil Ltda 0.00 5.50 0.00 0.00 0.00 0.00 0.00 0.00 2006 FEBR 12.00 0.00 0.00 0.00 12.00 0.00 0.00 0.00 2000 Fleury 0.00 0.00 6.00 0.00 0.00 0.00 6.00 0.00 1998 Fras-le 4.00 0.00 9.34 0.00 4.00 0.00 6.04 0.00 2006 GOL 50.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2005 GP Capital III 0.00 14.00 0.00 0.00 0.00 0.14 0.00 0.00 GP Cptl Rstrctd 0.00 2.22 0.00 0.00 0.00 2.16 0.00 0.00 2001 GPC 0.00 0.00 9.00 0.00 0.00 0.00 9.00 0.00 GTFP BIC Banco 44.91 0.00 0.00 0.00 44.91 0.00 0.00 0.00 GTFP BM Brazil 4.22 0.00 0.00 0.00 4.22 0.00 0.00 0.00 GTFP Indusval 5.00 0.00 0.00 0.00 5.00 0.00 0.00 0.00 1997 Guilman-Amorim 18.08 0.00 0.00 14.37 18.08 0.00 0.00 14.37 1998 Icatu Equity 0.00 5.46 0.00 0.00 0.00 4.16 0.00 0.00 1999 Innova SA 0.00 5.00 0.00 0.00 0.00 5.00 0.00 0.00 1980 Ipiranga 0.00 2.87 0.00 0.00 0.00 2.87 0.00 0.00 1987 Ipiranga 0.00 0.54 0.00 0.00 0.00 0.54 0.00 0.00 2006 Ipiranga 50.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2006 Itambe 15.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2000 Itau-BBA 12.86 0.00 0.00 0.00 12.86 0.00 0.00 0.00 2002 Itau-BBA 70.61 0.00 0.00 0.00 38.47 0.00 0.00 0.00 1999 JOSAPAR 7.57 0.00 7.00 0.00 2.57 0.00 7.00 0.00 2005 Lojas Americana 35.00 0.00 0.00 0.00 35.00 0.00 0.00 0.00 1992 MBR 0.00 0.00 10.00 0.00 0.00 0.00 10.00 0.00 2006 MRS 50.00 0.00 0.00 50.00 0.00 0.00 0.00 0.00 2002 Microinvest 0.00 1.25 0.00 0.00 0.00 0.82 0.00 0.00 Net Servicos 0.00 10.93 0.00 0.00 0.00 10.93 0.00 0.00 2002 Net Servicos 0.00 1.60 0.00 0.00 0.00 1.60 0.00 0.00 2005 Net Servicos 0.00 5.08 0.00 0.00 0.00 5.08 0.00 0.00 44 1994 Para Pigmentos 2.15 0.00 9.00 0.00 2.15 0.00 9.00 0.00 1994 Portobello 0.00 0.59 0.00 0.00 0.00 0.59 0.00 0.00 2000 Portobello 4.28 0.00 7.00 0.00 4.28 0.00 7.00 0.00 2002 Portobello 0.00 0.90 0.00 0.00 0.00 0.90 0.00 0.00 2000 Puras 0.00 0.00 1.00 0.00 0.00 0.00 1.00 0.00 2003 Queiroz Galvao 26.67 0.00 10.00 0.00 26.67 0.00 10.00 0.00 2004 Queiroz Galvao 0.60 0.00 0.00 0.00 0.08 0.00 0.00 0.00 2006 RBSec 22.83 1.51 0.00 0.00 0.00 1.51 0.00 0.00 Randon Impl Part 2.33 0.00 3.00 0.00 2.33 0.00 3.00 0.00 1997 Sadia 2.55 0.00 2.33 3.28 2.55 0.00 2.33 3.28 1997 Samarco 3.60 0.00 0.00 0.00 3.60 0.00 0.00 0.00 1998 Saraiva 0.00 1.24 0.00 0.00 0.00 1.24 0.00 0.00 2000 Sepetiba 26.24 0.00 5.00 0.00 11.24 0.00 5.00 0.00 2002 Suape ICT 6.00 0.00 0.00 0.00 6.00 0.00 0.00 0.00 1999 Sudamerica 0.00 7.35 0.00 0.00 0.00 7.35 0.00 0.00 2006 Suzano petroq 50.00 0.00 10.00 140.00 39.50 0.00 10.00 110.50 2001 Synteko 11.57 0.00 0.00 0.00 11.57 0.00 0.00 0.00 2006 TAM 50.00 0.00 0.00 0.00 17.00 0.00 0.00 0.00 1998 Tecon Rio Grande 3.55 0.00 5.50 3.71 3.55 0.00 5.50 3.71 2004 Tecon Rio Grande 7.87 0.00 0.00 7.76 7.59 0.00 0.00 7.48 2001 Tecon Salvador 2.95 1.00 0.00 3.10 2.95 0.77 0.00 3.10 2003 Tecon Salvador 0.00 0.55 0.00 0.00 0.00 0.55 0.00 0.00 2004 TriBanco 10.00 0.00 0.00 0.00 10.00 0.00 0.00 0.00 2006 TriBanco 0.35 0.00 0.00 0.00 0.35 0.00 0.00 0.00 2002 UP Offshore 9.01 9.51 0.00 23.29 0.00 2.51 0.00 0.00 2002 Unibanco 16.89 0.00 0.00 0.00 16.89 0.00 0.00 0.00 Total portfolio: 1,164.15 253.88 144.84 503.45 703.91 223.86 141.54 400.38 Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic. 2000 BBA 0.01 0.00 0.00 0.00 1999 Cibrasec 0.00 0.00 0.00 0.00 2006 Ipiranga II 0.00 0.00 0.00 0.10 2002 Banco Itau-BBA 0.00 0.00 0.00 0.10 Total pending commitment: 0.01 0.00 0.00 0.20 45 Annex 14: Country at a Glance BRAZIL: AMAZON CARTOGRAPHY PROJECT 46 47 Annex 15: Maps BRAZIL: AMAZON CARTOGRAPHY PROJECT wb72896 C:\Documents and Settings\wb72896\My 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