Document of The World Bank FOR OFFICIAL USE ONLY Report No: PAD2662 INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT PAPER ON A PROPOSED ADDITIONAL LOAN IN THE AMOUNT OF US$7.00 MILLION AND A PROPOSED ADDITIONAL GRANT IN THE AMOUNT OF US$12.39 MILLION UNDER THE STRATEGIC CLIMATE FUND (SCF) TO THE REPUBLIC OF GHANA FOR THE GHANA FOREST INVESTMENT PROGRAM (FIP)-ENHANCING NATURAL FOREST AND AGROFOREST LANDSCAPES PROJECT April 11, 2019 Environment and Natural Resources Global Practice Africa Region 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. CURRENCY EQUIVALENTS (Exchange Rate Effective February 28, 2019) Currency Unit = Ghana Cedi (GHS) GHS 5.5 = US$1 FISCAL YEAR January 1 - December 31 Regional Vice President: Hafez M.H. Ghanem Country Director: Henry G. R. Kerali Senior Global Practice Director: Karin Erika Kemper Practice Manager: Maria Sarraf Task Team Leaders: Timothy H. Brown, Asferachew Abate Abebe, Philippe Ambrosi ABBREVIATIONS AND ACRONYMS AF Additional Financing AfDB African Development Bank ASGM Artisanal Small-scale Gold Mining ASM Artisanal Small-scale Mining COCOBOD Ghana Cocoa Board CPS Country Partnership Strategy CREMA Community Resource Management Area DGM Dedicated Grant Mechanism ENFAL Enhancing Natural Forest and Agroforest Landscapes EPA Environmental Protection Agency ERPA Emission Reductions Purchase Agreement ER-Program Emission Reductions Program ESMF Environmental and Social Management Framework FC Forestry Commission FCPF Forest Carbon Partnership Facility FIP Forest Investment Program FM Financial Management GEF Global Environment Facility GNASSM Ghana National Association of Small-Scale Miners GCFRP Ghana Cocoa Forest REDD+ Program GDP Gross Domestic Product GHG Greenhouse Gas GHS Ghana Cedi GoG Government of Ghana GRS Grievance Redress Service GSGDA Ghana Sustainable Growth and Development Agenda HFZ High Forest Zone IDA International Development Association IDH Sustainable Trade Initiative IFR Interim Financial Report IIED International Institute for Environment and Development ISDS Integrated Safeguards Data Sheet LSM Large Scale Mining M&E Monitoring and Evaluation MC Minerals Commission MDA Ministries, Departments and Agencies (of Ghana’s government) MESTI Ministry of Environment, Science, Technology and Innovation MLNR Ministry of Lands and Natural Resources MMIP Multi-sectoral Mining Integrated Project MoF Ministry of Finance MoFA Ministry of Food and Agriculture MRV Measurement, Reporting and Verification NCRC Nature Conservation Research Centre NDPC National Development Planning Commission NGO Non-governmental Organization PADO Private Afforestation Developers Organization PDO Project Development Objective PF Process Framework PMEH Pollution Management and Environmental Health PMP Pest Management Plan PMU Project Management Unit PPMED Policy, Planning, Monitoring and Evaluation Division PPSD Project Procurement Strategy for Development REDD+ Reducing emissions from deforestation and forest degradation, conservation of forest carbon stocks, sustainable management of forest, and enhancement of forest carbon stocks in developing countries SCD Strategic Country Diagnostic SDR Special Drawing Rights SESA Strategic Environmental and Social Assessment SCF Strategic Climate Funds SMTDP Sector Medium-term Development Plan SSM Small Scale Mining TCC+ Technical Coordination Committee + TFs Trust Funds UGBS University of Ghana Business School UNFCCC United Nations Framework Convention on Climate Change WBG World Bank Group The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) BASIC INFORMATION – PARENT (Ghana FIP - Enhancing Natural Forest and Agroforest Landscapes Project - P148183) Country Product Line Team Leader(s) Ghana Recipient Executed Asferachew Abate Abebe Activities Project ID Financing Instrument Resp CC Req CC Practice Area (Lead) P148183 Investment Project GENA2 (9268) AFCW1 (6547) Environment & Natural Financing Resources Implementing Agency: Ministry of Lands and Natural Resources ADD_FIN_TBL1 Is this a regionally tagged project? Bank/IFC Collaboration No Original Environmental Approval Date Closing Date Current EA Category Assessment Category 27-Feb-2015 30-Jun-2020 Partial Assessment (B) Partial Assessment (B) Financing & Implementation Modalities Parent [ ] Multiphase Programmatic Approach [MPA] [ ] Contingent Emergency Response Component (CERC) [ ] Series of Projects (SOP) [ ] Fragile State(s) [ ] Disbursement-Linked Indicators (DLIs) [ ] Small State(s) [ ] Financial Intermediaries (FI) [ ] Fragile within a Non-fragile Country [ ] Project-Based Guarantee [ ] Conflict [ ] Deferred Drawdown [ ] Responding to Natural or Man-made disaster [ ] Alternate Procurement Arrangements (APA) Page 1 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Development Objective(s) The Project Development Objective is to improve forest and tree management practices by cocoa farmers, CREMA communities andforest reserve managers to reduce forest loss and degradation in selected landscapes in Ghana's High Forest Zone. The overall goal of FIP-financed activities in Ghana is to reduce GHG emissions from deforestation and forest degradation, whilereducing poverty and conserving biodiversity. Ratings (from Parent ISR) RATING_DRAFT_ NO Implementation Latest ISR 06-Jun-2016 18-Dec-2016 22-Jun-2017 19-Dec-2017 25-Jun-2018 27-Dec-2018 Progress towards achievement of MS S MS MS S S PDO Overall Implementation MS MS MS MS S S Progress (IP) Overall Safeguards S MS MS MS MS MS Rating Overall Risk M M M M M M BASIC INFORMATION – ADDITIONAL FINANCING (Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project - P163745) ADDFIN_TABLE Urgent Need or Capacity Project ID Project Name Additional Financing Type Constraints P163745 Additional Financing for Restructuring, Scale Up No Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project Page 2 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Financing instrument Product line Approval Date Investment Project Recipient Executed 02-May-2019 Financing Activities Projected Date of Full Bank/IFC Collaboration Disbursement 30-Jun-2023 No Is this a regionally tagged project? No Financing & Implementation Modalities Child [ ] Series of Projects (SOP) [ ] Fragile State(s) [ ] Disbursement-Linked Indicators (DLIs) [ ] Small State(s) [ ] Financial Intermediaries (FI) [ ] Fragile within a Non-fragile Country [ ] Project-Based Guarantee [ ] Conflict [ ] Deferred Drawdown [ ] Responding to Natural or Man-made disaster [ ] Alternate Procurement Arrangements (APA) [ ] Contingent Emergency Response Component (CERC) Disbursement Summary (from Parent ISR) Net Source of Funds Total Disbursed Remaining Balance Disbursed Commitments Grants 29.50 18.95 10.55 64 % PROJECT FINANCING DATA – ADDITIONAL FINANCING (Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project - P163745) PROJECT FINANCING DATA (US$, Millions) SUMMARY -NewFi n1 SUMMARY (Total Financing) Page 3 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Proposed Additional Total Proposed Current Financing Financing Financing Total Project Cost 32.50 19.39 51.89 Total Financing 32.50 19.39 51.89 Financing Gap 0.00 0.00 0.00 DETAILS - Additional Financing NewFinEnh1 Non-World Bank Group Financing Trust Funds 19.39 Strategic Climate Fund Credit 7.00 Strategic Climate Fund Grant 12.39 COMPLIANCE Policy Does the project depart from the CPF in content or in other significant respects? [ ] Yes [ ✔ ] No Does the project require any other Policy waiver(s)? [ ] Yes [ ✔ ] No INSTITUTIONAL DATA Practice Area (Lead) Environment & Natural Resources Contributing Practice Areas Agriculture Energy & Extractives Page 4 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Gender Tag Does the project plan to undertake any of the following? a. Analysis to identify Project-relevant gaps between males and females, especially in light of country gaps identified through SCD and CPF Yes b. Specific action(s) to address the gender gaps identified in (a) and/or to improve women or men's empowerment Yes c. Include Indicators in results framework to monitor outcomes from actions identified in (b) Yes PROJECT TEAM Bank Staff Name Role Specialization Unit Team Leader (ADM Timothy H. Brown Team Leader GENGE Responsible) Asferachew Abate Abebe Team Leader Team Leader GENA2 Philippe Ambrosi Team Leader NRM Specialist GENA2 Procurement Specialist (ADM Thomas Kwasi Siaw Anang Procurement Specialist GGOPA Responsible) Robert Wallace DeGraft- Financial Management Sr. FM Specialist GGOAS Hanson Specialist (ADM Responsible) Anita Bimunka Takura Environmental Specialist (ADM Environmental Safeguards GENA2 Tingbani Responsible) Social Specialist (ADM Charles Ankisiba Social Safeguards Specialist GSU20 Responsible) Ajai Nair Team Member Financial Sector Specialist GFCAS Carlos Leonardo Vicente Team Member Financial sector specialist GFCAS Charity Boafo-Portuphy Team Member Program Assistant AFCW1 Ivo G.P. Imparato Team Member Program Leader AFCW1 Jorge Luis Alva-Luperdi Counsel Legal specialist LEGAM Joseph Yaw Appiah- Team Member Monitoring & Evaluation GEN01 Gyapong Page 5 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Kadir Osman Gyasi Team Member Sr. Agriculture Economist GFA01 Natural Resource Maclean Asamani Oyeh Team Member GCCFM Management Mamadou Barry Team Member Senior Mining Specialist GEEXI Neeta Hooda Team Member Sr. NRM Specialist GENA2 Salli Wondergem Team Member Program Assistant AFCW1 Steven Jay Silverstein Team Member Environmental Specialist GENA2 Yasmina Oodally Team Member Operations Officer GENA1 Yesmeana N. Butler Team Member Program Assistant GENA1 Extended Team Name Title Organization Location Page 6 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) TABLE OF CONTENTS I. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING ........................................ 8 II. DESCRIPTION OF ADDITIONAL FINANCING .................................................................... 11 III. KEY RISKS ..................................................................................................................... 29 IV. APPRAISAL SUMMARY .................................................................................................. 34 V. WORLD BANK GRIEVANCE REDRESS .............................................................................. 43 VI. SUMMARY TABLE OF CHANGES ................................... ERROR! BOOKMARK NOT DEFINED. VII. DETAILED CHANGE(S)................................................... ERROR! BOOKMARK NOT DEFINED. VIII. RESULTS FRAMEWORK AND MONITORING ................................................................... 49 ANNEX 1: PROJECT COST AND FINANCING BREAKDOWN...................................................... 64 ANNEX 2. DETAILED PROJECT DESCRIPTION ......................................................................... 65 ANNEX 3. FIDUCIARY ARRANGEMENTS ................................................................................ 75 ANNEX 4: IMPLEMENTATION SUPPORT PLAN ...................................................................... 82 ANNEX 5: LESSONS LEARNED ............................................................................................... 86 ANNEX 6: ASGM AND THE MULTILATERAL MINING INTEGRATION PROJECT ......................... 89 ANNEX 7. RELATED WORLD BANK AND PARTNER PROJECTS THAT WILL INFORM AND WORK WITH THE FIP AF .................................................................................................................. 92 ANNEX 8: FIP ENFAL AF ALIGNMENT WITH GLOBAL FIP PURPOSE AND CRITERIA .................. 96 Page 7 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) I. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING 1. This Project Paper seeks approval of the Executive Directors of the World Bank Board to provide an additional loan and grant in an amount of US$19.39 million to the Republic of Ghana for an Additional Financing (AF) to the Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes (ENFAL) Project (P163745). The proposed AF is based on two new tranches of funding approved by the FIP governing body based on Ghana’s requests: a) US$9.50 million for Reducing Degradation and Deforestation due to Artisanal Small-scale Gold Mining (ASGM) in Forest Landscapes was approved by the FIP Sub-Committee in October 2015; and b) US$9.89 million1 to build private sector engagement in Reducing Emissions from Deforestation and Forest Degradation (REDD+) Strategy was approved for transfer from International Finance Corporation (IFC) to the World Bank in June 2017. 2. The proposed additional loan and grant would help finance the costs associated with augmenting the REDD+ and FIP in Ghana by supporting: (i) the reduction of degradation and deforestation due to artisanal small-scale mining (ASM) in forest landscapes; and (ii) the enhancement of private investment in forest plantation development, with community job creation, in forest and cocoa landscapes in Ghana’s High Forest Zone (HFZ), which includes areas of Brong-Ahafo, Western, Ashanti and Eastern Regions. 3. The proposed AF activities are designed to fit into the existing FIP ENFAL implementation structures, demonstration pilot approaches, community engagement efforts, land use planning and management processes, and outreach and communication tools. The proposed AF follows the existing component structure of the ENFAL project, by adding substantial funds for additional field components focused on site reclamation and plantation establishment, as well as resources to expand policy engagement, communication and coordination activities. 4. The proposed AF activities are focused on supporting the Government of Ghana (GoG)’s efforts to address the impacts of illegal ASM on forests, community agroforestry areas and natural landscapes through improved coordination and implementation of policies, testing of mine site clean-up and reclamation approaches, including tree planting and plantation establishment, with community and media engagement, and communication, outreach and training activities. While supporting the GoG’s overall efforts to control illegal ASM for gold, known also as galamsey or ASGM, these AF activities will focus mainly in technical areas where the Ministry of Lands and Natural Resources (MLNR), Forestry Commission (FC), Minerals Commission (MC) and the Environment Protection Agency (EPA) already have a comparative advantage and in geographic areas where the project already has established engagements with communities, civil society organizations, and local government agencies. Ghana will be able to utilize these funds effectively, efficiently and quickly through the operational systems established under the original FIP ENFAL project, with the World Bank as partner agency. 5. Progress of the original project towards the achievement of its project development objective (PDO) was 1 The original FIP allocation to IFC consisted of US$7 million of concessional finance and US$3 million in grants. Of the grant amount, US$250,000 was allocated for a project preparation grant (PPG). Of this amount, US$114,850 was used for a market assessment of the role of private sector in the context of Ghana’s FIP Investment Plan. Page 8 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) rated as Satisfactory in the recent ISR filed in December 2018. There is evidence of success for many activities implemented on a local scale with communities, including livelihood activities, establishment of timber tree nurseries, boundary planting of forest reserves, enrichment planting of forest reserves, and watershed rehabilitation planting. The project has established Community Resource Management Areas (CREMAs) that will improve landscape and forest management on 85,000 ha within five blocks of area that connect forest reserves in the Western Region. This mutually reinforcing package of interventions – including engagement of communities, establishment of CREMAs, provision of technical know-how, supplemented with seedling and planting inputs, together with tree registration as an ownership incentive – can deliver the expected transformation of landscape management in the target districts. Cocoa extension agents and FC field staff have been trained to promote shade-grown cocoa and counter the misinformed practice of removing shade trees from cocoa farms. Tree seedlings have been distributed to cocoa farmers seeking to increase shade on farms and a tree registration system has been established to allow farmers to own and benefit from planted trees. These demonstrations of better forest and land management practices are also building improved collaboration among key agencies, which is resulting in improvements on the ground as well as replication. The Ghana Cocoa Board (COCOBOD) and FC are self-financing some activities and replicating models to new areas beyond the FIP implementation areas. At the national level, substantial progress was made on moving forward three major policy initiatives: tree tenure and benefit sharing; wood procurement of domestic legal timber; and the plantation strategy. Institutional systems have been put in place as a coordination and communication platform for work planning, implementation and monitoring of performance among the key implementing agencies. The original project is also supporting consultation, communication and outreach to build constituency for improved forest and tree management practices. 6. However, drivers of deforestation and degradation continue to degrade Ghana’s rural landscape. The pace of expansion of illegal ASM in recent years has accelerated forest and agroforest loss in affected areas. This FIP AF will further support demonstration pilots that can inform and influence the important steps that the GoG is taking to address illegal mining through scaled up action. The Government’s renewed attention to these issues creates new opportunities for FIP to support action needed to accelerate implementation, replicate good practices, and roll out reformed policies on a larger scale. However, addressing the full scope of the ASGM issue will also require mobilization of additional resources on a much grander scale, both from Ghana’s own budget and from external partners and sources. Mobilization of additional resources will be critical to realize Ghana’s ambitions to protect remaining forests, increase trees on farms, increase cocoa production under shade, and improve the lives of smallholders working in the rural landscape. 7. This operation also aligns with the Ghana Sustainable Growth Development Agenda (GSGDA-II, 2014- 2017), which seeks to achieve socio-economic transformation to create a significant number of quality jobs to raise average incomes. The GSGDA notes critical forest and natural resource management challenges, including the need to: (i) improve the enabling environment and incentives for better stewardship and investment by local institutions, communities, and farmers; (ii) improve and diversify livelihoods for communities as an alternative to forest degrading activities; (iii) coordinate and harmonize incentives across multiple layers of institutions and stakeholders for improved livelihoods; and (iv) capitalize on climate change as a focal initiative and financing opportunity. The GSGDA-II focuses on leveraging Ghana’s natural resource endowments, agricultural potential, and human resource base for accelerated economic growth Page 9 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) and job creation. 8. This operation is well aligned with Ghana’s National Strategy for REDD+2, which provides the framework for action and investment under FCPF, FIP, and other global sources of climate finance. The National REDD+ Strategy aims to significantly reduce emissions while also addressing threats that undermine ecosystem services and environmental integrity to maximize the co-benefits of the forests. REDD+ is a key pillar of action for the national climate change agenda and an important step toward sustainable, low emissions development. The GoG’s broader REDD+ engagement includes World Bank support to REDD+ Readiness through readiness grants (P124060) of US$8.80 million in total under the Forest Carbon Partnership Facility (FCPF) Readiness Fund, a US$30.00 million FIP Project (P148183), this FIP AF, a potential US$50.00 million of performance based payments under Ghana’s Emission Reductions Program for the Cocoa Forest Mosaic Landscape (GCFRP, P160339, for which the Emission Reductions Purchase Agreement (ERPA) is expected to be signed by May 2019, and the related ongoing project on Dedicated Grant Mechanism for Local Communities (US$5.50 million, P145316). 9. This operation also supports Ghana’s National Climate Change Policy (2012), the National Climate Change Policy Action Program for Implementation: 2015–2020, the Environment Policy (2012), and the Low Carbon Development Strategy (2013). This operation also supports Ghana’s efforts to achieve Sustainable Development Goal 13 (Take urgent action to combat climate change and its impacts) and Goal 15 (Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss). 10. The proposed AF is fully consistent with the World Bank Group's (WBG) goals to end extreme poverty and to promote shared prosperity with environmental, social, and fiscal sustainability. It is also well-aligned with the Country Partnership Strategy (CPS) for FY13-FY163, which aims to assist Ghana in the transition to middle-income status. A Performance and Learning Review4 extended the CPS to FY18. The CPS recognizes that Ghana's natural resource wealth is a platform for economic and social development but needs prudent and transparent management as well as strategic actions to prevent negative outcomes. The AF is also aligned with the recent Systematic Country Diagnostic (SCD)3 which prioritized the need for taking immediate measures, including implementing the ‘Cocoa Forest Mosaic Landscape’ and control and mitigation of artisanal mining, to stop deforestation and degradation. Preparation of a new World Bank Group’s Country Partnership Framework (CPF) for Ghana is on-going and expected to be discussed by the Board in August 2019. The proposed AF activities will contribute to improved livelihoods of communities in the target areas (through engagement in landscape restoration and tree planting) and to enhanced environmental services (through land stabilization and enhanced forest cover). Finally, the proposed AF directly delivers on the targets set out in the World Bank’s Africa Climate Business Plan, notably in relation 2 Reducing emissions from deforestation and forest degradation, conservation of forest carbon stocks, sustainable management of forest, and enhancement of forest carbon stocks in developing countries. REDD+ is a key element of the UN Framework Convention on Climate Change (UNFCCC). 3 Report No. 76369-GH, discussed by the Executive Directors on August 20, 2013. 4 Report No. 105606-GH, 2016 3 Report No. 132010-GH, 2018 Page 10 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) to forest landscapes, which commits to support the climate and forest agenda in Africa through a range of instruments that will help slow deforestation, prevent forest-related carbon emissions, and promote sustainable use of forests for improved livelihoods and enhanced resilience to climate change. 11. Rationale for World Bank and FIP Further Engagement. Ghana’s FIP Program is already implementing projects focusing on agricultural drivers of deforestation by working with cocoa farmers and rehabilitating and protecting forest reserves. These are the ENFAL project with the World Bank and the Engaging Local Communities in REDD+ (ELCIR+) project with the African Development Bank (AfDB). Ghana’s Forest Investment Plan (2012) also noted that ASGM is an important driver of deforestation and this was confirmed in Ghana’s Emission Reduction Program Document, 2017. The investment plan also noted that engaging the private sector in plantation development is needed to reduce pressure on natural forests and to meet the construction, housing and furniture needs of a growing economy. Engaging the private sector is also emphasized in the Ghana Forest Plantation Strategy: 2016-2040 and the Ghana Forestry Development Master Plan (2016-2036). The AF is also designed to align with FIP Investment Criteria, as noted in Annex 7. 12. This AF is timely as Ghana’s current government is accelerating efforts both to address ASGM’s environmental degradation and to promote sustainable jobs in the rural sector. Through government financed Multilateral Mining Integrated Project (MMIP), the GoG has prioritized efforts to control the negative environmental impacts of ASGM under a multi-sectoral initiative (see Annex 5). However, this AF is relatively small and aimed at developing pilot demonstrations that cannot address all the concerns of uncontrolled ASM in Ghana, nor cover all the areas affected by illegal ASM. The World Bank and GoG are preparing the Ghana Artisanal and Small-Scale Mining Formalization Project (P168002, US$30.00 million) to support a broader engagement with the sectoral, institutional and regulatory issues associated with ASGM (see Annex 6). 13. Public funding for these activities is justified by the benefits that go well beyond the private or community-owned goods, which include rehabilitated lands and timber stands that can be used for economic purposes. Pilots will demonstrate approaches to and benefits of reclamation of mining sites, which will reduce erosion that is currently polluting public water courses. Developing timber stands will help to reduce logging pressure on natural forests. Reclamation, replanting and tree planting will also sequester carbon relative to the degraded situation, provide downstream environmental services (e.g., water retention), and eventually return habitat suitable for biodiversity. II. DESCRIPTION OF ADDITIONAL FINANCING Country Context 14. Ghana is a lower middle-income country with population of 28.8 million and land area of nearly 240,000 square kilometers. Ghana’s government is a multi-party democracy known in Africa for freedom of speech and the press. Two decades of growth and political stability have improved the economic situation and reduced poverty. The current government was elected in December 2016 and sworn in January 2017. The election conferred enough mandate to carry out the government’s agenda, which Page 11 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) includes pledges to reduce the budget deficit and cut waste. 15. Despite recent growth and poverty reduction, Ghana still faces challenges, including fiscal deficits, rural poverty, youth unemployment, and difficulty in maintaining natural resource sustainability. Ghana has made good progress in reducing the number of Ghanaians living below the poverty line from over fifty percent in 1991 to less than one quarter in 2013, with less than 10 percent in extreme poverty. Sustained economic growth, broadly shared, has been a major factor in the reduction of poverty, but structural transformation, including the increasing shares of services and industry in the economy have also contributed. Increased productivity in agriculture has led to higher rural incomes. Improved education and skills have also contributed to better wages and hence the reduction in poverty. 16. Ghana’s near-term economic prospects are good, but challenges remain. In September 2017, Ghana’s economy expanded for the fifth successive quarter by 9.3 percent compared to just 4.3 percent in September 2016. This reflects continued high levels of growth in the industry sector, driven by mining and petroleum. Ghana’s fiscal deficit of 4.6 percent of gross domestic product (GDP) for the first three quarters of 2017 suggests that fiscal policy is on track to meet the full-year target of 6.3 percent of GDP (Ghana Economic Outlook, February 2018). The service sector bounced back from the weak performance in the first quarter but the momentum in the agriculture sector seems to be waning. Growth in the services sector improved to 5.6 percent from 3.7 percent in Q1 but is still below the June 2016 level of 6.6 percent. The pick-up of the services sector is due to improved growth in information and communication technology (15. 6 percent); health and social work (18.3 percent); education (9.6 percent); and real estate (7.6 percent) sub-sectors. 17. Ghana’s extreme poor are mainly rural and natural resource dependent. More Ghanaians live in the moister, richer south, while deeper poverty occurs in the semi-arid, rural north. There is more poverty in rural, agriculture and natural resource sectors. While the coastal belt accounts for only six percent of Ghana’s land mass, it is one of the country’s most densely settled. The coastal areas have stubbornly persistent extreme poverty as they face several challenges, including coastal erosion and flooding, overexploitation of natural resources, marine and coastal pollution, loss of biodiversity and of ecosystem services, severe weather, rapid urbanization and unsustainable land use, and overall poor environmental governance. More heavily forested areas are below the national average of extreme poverty incidence (Ghana Living Standards Survey, 2012-2013; 2010 Population and Housing Census, 2015). 18. Natural resources are critically important in Ghana’s economy. Activities based on use of land, water, forest and fisheries resources contribute more than 20 percent of GDP and about 40 percent of jobs, especially in rural areas, where most of the poor live. Though the economic structure is shifting to services, 35 to 45 percent of jobs are still based in renewable natural resource sectors: agriculture, forests, livestock, fisheries (GLSS6, Aug. 2014; and 2015 Labour Force Report). 19. Ghana’s export earnings are mainly from natural resource commodities. In 2016, export earnings of gold, cocoa and oil accounted for 77 percent of exports (MIT Observatory of Economic Complexity). Gold exports were valued at US$9.4 billion; Cocoa beans at US$2.2 billion; and Crude oil at US$1.2 billion. Page 12 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Sectoral and Institutional Context 20. Ghana’s natural resources are being severely degraded through poor land and water management practices, which also undermine agricultural productivity. A recent assessment 5 estimated the annual cost of environmental degradation as 10.9 percent of GDP. Net primary productivity has declined across Ghana (except a few pockets in south), over the 15 years from 2000. The Northern Savannah, where people are poorest, is experiencing severe land degradation, coupled with water stress. Reduced output and earnings also increase pressures for rural farmers to encroach into forest areas. This creates a vicious cycle by removing forest cover and disturbing ecosystem processes, which increases rural vulnerability to weather variability, climate change and economic shocks. 21. Forestry and agroforestry, together with agriculture, account for more than 50 percent of land use . Ghana is the world’s second largest exporter of cocoa, which is important for both the economy and rural employment. Although global demand for chocolate continues to increase, Ghana’s cocoa production faces economic, environmental, and sustainability challenges. Increasing global demand for sustainable cocoa is creating a positive incentive for cocoa producers, buyers, and regulators to move to more sustainable and climate-friendly production practices. Unsustainable agricultural practices contribute to lower soil quality, more erosion, and lower output. Soil erosion is just one indicator of degradation processes that contribute to the reduction of environmental services that would otherwise regulate water flows, stabilize soils and maintain their quality and productivity, cycle nutrients through ecosystems, and moderate climate and weather extremes. 22. Ghana’s forest cover has almost halved since 2000. Deforestation contributes to the loss of environmental services, soil erosion and loss, reduced agricultural productivity, declining crop yields, and economic losses to the country. Conversion of forests to agricultural land is the primary driver of deforestation. Forest degradation and deforestation across this agro-forest mosaic, which covers 5.9 million ha of Ghana’s HFZ, is being driven by continued cocoa farm expansion and other types of agriculture, coupled with a recent up-surge in illegal mining and illegal logging (Ghana Emission Reduction Program Document, GCFRP, 2017). About a third of this was due to cocoa expansion. The MLNR, FC, the Ministry of Food and Agriculture (MoFA), COCOBOD, the private sector, and non- governmental organizations (NGOs) are working in the supply chain to improve productivity and returns to farmers, increase trees on farms, and reduce environmental degradation. More recently however, a recent Carbon Assessment Report for 2014 - 2017, “Estimation of Total Greenhouse Gas Emission Reductions Plus Enhancement of Carbon Stocks” prepared by MLNR and FC at the mid-term evaluation of FIP ENFAL, showed that FIP and FCPF interventions are having an impact. The annual deforestation in closed forest in the FIP target areas for the 3 years to 2017 was only -0.30 percent, indicating substantial slowdown of the rate of loss, while in the open forest category there was a gain in forest area at a rate of 0.4 percent per year. So, overall deforestation for both forest categories was net 0.1 percent - a net gain of 860 hectares of forest cover. For the wider Brong Ahafo and Western Regions together, the closed 5 The cost of environmental degradation was prepared for the Ghana County Environmental Analysis which is currently under preparation. The Country Environmental Analysis is expected to be published in September 2019. Page 13 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) cover deforestation rate was -3.8 percent per year (still very high) but balancing that was a gain in forest cover in the much larger area of open forest – so that on balance for both regions there was a gain of 16,000 ha of (open) forest area and a rate of forest gain of 0.15 percent per year. While more evidence on attribution would be needed, it appears that the Government’s FIP and FCPF financed interventions have shown very good results in the target areas and substantial influence on the wider provincial areas, due to outreach, education, new practices and new policies. 23. Timber harvesting, and accompanying illegal chainsaw practices, also contribute to forest loss and degradation and loss of trees in farming systems. The forest sector provides jobs - approximately 50,000 formal jobs and 260,000 informal – and revenues and critical inputs for a growing economy. There are, perhaps, another 100,000 illegal, unregulated chainsaw loggers and millers. Illegal logging results in at least US$18 million in lost timber stumpage revenue each year. Domestic timber production (which accounts for 85 percent of total output) comes mainly from informal and illegal sources using inefficient and unsustainable practices (World Bank, 2012). Timber demand is high, and Ghana could grow more trees for domestic use and processing, but the enabling conditions are weak for long-term private plantation investments (e.g., poor access to land and credit and low security of land tenure). The tree tenure system does not provide positive incentives for farmers to protect naturally occurring trees on farms. The Government recognizes this issue and has developed tree registration guidelines, so that farmers can register and claim ownership of trees that they nurture. The Government has also developed new legislation to codify this reform and submitted it to Parliament for approval. At the same time, the practical change in policy interpretation is being rolled out to farmers and facilitated by NGOs assisting with tree registration. Women and men use forest and land resources differently and play different roles in community-based institutions. Women tend to participate less in forest policy-decisions and do not receive forest landscape related information and skills enhancement opportunities as much as men. Furthermore, in the context of climate change, women might face more challenges in protecting themselves and their households. See more details in Project Design, Section III. Page 14 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) 24. Gold mining is a major contributor to national economic wealth and to poverty reduction. In 2016 Ghana produced 110 tons of gold; 31 percent of this came from artisanal and small-scale miners Figure 1: Ghana Gold Production and ASM Share (MC, 2017). Mining contributes to the economy, foreign exchange, and jobs. Galamsey may account for over 1.1 million jobs, half of which are informal (UNECA, 2011). Indirect economic benefits accrue to 4.4 million people, including women who work in supporting services (World Bank, 2015). Small-scale gold mining is of three types: i) hard rock (lode), ii) deep alluvial mining, and iii) shallow alluvial mining. Though data are scarce, the first two types are mostly licensed, and the third type is most unlicensed, and is referred to as galamsey. Small scale production increased substantially since 2010 (see Figure 1) both in overall volume and as a share of total gold production. This increase in ASGM in recent years was a response to high gold prices, high unemployment and a slump in agricultural production, and thus benefited the poor. However, there are also other drivers of the increase, particularly in the illegal alluvial mining operations, which are highly visible and destructive. Gold mining attracts not only poor local miners, but also entrepreneurial and politically connected Ghanaians, foreign investors and equipment providers, and itinerant, non-local (often immigrant) laborers. 25. ASGM also raises gender issues and specific impacts on women. The MC (2016) conducted a limited survey that showed that about 28 percent of the galamsey workers are women (though very few are mine owners or managers). Typically, in the open pit mines that characterize galamsey mining, women serve as planners, carriers, and processors, transporting heavy loads of ore on their heads to washing sluices. Women are also involved in providing ancillary services to mining communities, such as petty trading and food preparation. Thus, women’s estimated participation in artisanal mining-related activities could be around half of the workforce. When gold amalgamation occurs at home, women and children are disproportionately exposed to toxic mercury fumes, leading to serious long-term health consequences. 26. Poorly regulated and destructive mining practices threaten health, wealth, water, food, cocoa, and forests. Although ASGM is an important source of jobs and income for rural communities, the rural poor and smallholder farmers are also among those most affected by the adverse environmental effects of illegal mining. Uncontrolled ASGM has resulted in serious deforestation and land degradation, interfering both legal mining activity and cocoa production – both key economic sectors. The destructive and polluting practices that need to be controlled, include degradation of stream beds and riparian zones, and incursion into agricultural land, including high value cocoa plantations. Mining associated degradation, siltation and pollution affects 60 percent of water courses in various ways including: Page 15 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) restricted stream flow, upstream flooding, and downstream loss of access to clean water. Use of mercury in gold amalgamation threatens water supplies and the human food chain. Beyond these environmental and health impacts, uncontrolled ASGM represents a cross-sectoral, inter-disciplinary challenge with wide ranging social and economic impacts. Through the loss and degradation of forested areas, uncontrolled mining practices negatively affect people who depend on forests, habitat and biodiversity, and cocoa agroforestry systems, which are critical to rural jobs and the wider economy. The GoG has requested broader engagement and support from the World Bank in addressing these sectoral and regulatory issues. This AF operation is focused only on rehabilitation of a limited number of mined out sites. Beyond this AF operation, the World Bank and GoG are preparing a new Artisanal and Small-Scale Mining Formalization Project (P168002, US$30.00 million) in FY 20 which is further described in Annex 5. 27. Climate change will undermine Ghana’s efforts to achieve poverty reduction and economic growth. An important share of economic activity depends on climate-sensitive resource and land-based sectors. Agriculture, cocoa, forestry and fisheries contribute most to the livelihoods of the rural poor and will be significantly affected by climate change. Climate impacts are expected to include increase of mean annual temperature, decline in total annual rainfall, changes in seasonality of rainfall, and substantial sea level rise by 2050. Climate change is expected to adversely affect crop yields, leading to a decline in agricultural GDP of 3 to 8 percent. Unpredictable rainfall, in combination with increased energy demand, is expected to result in energy shortfalls due to the reliance on hydropower. Increases in frequency and intensity of extreme weather events will have negative economic impacts. Agronomic zones and weather patterns will shift, increasing uncertainty for already vulnerable rural households. The most suitable zone for cocoa cultivation will likely shrink over a generation, while varying rainfall and seasons will add uncertainty and weather shocks. Ghana has “high hazard” flood potential – with the potential to affect 20 percent of the population, particularly in greater Accra ( http://thinkhazard.org/en/report/94- ghana/FL). 28. Weak institutional coordination and ineffective law enforcement contribute to these environment, climate and resource challenges. Natural resource management institutions have overlapping mandates, but also gaps in coverage of key issues. Consultation and participation with communities and civil society stakeholders can be improved, recognizing that they are the intended beneficiaries of rules and programs for improving natural resource and environmental outcomes. Proposed Additional Activities under the AF 29. The PDO will become the following (with changes in boldface): to improve forest and tree management practices by cocoa farmers, CREMA communities and forest reserve managers to reduce forest loss and degradation and demonstrate rehabilitation of mined-out sites in selected landscapes in Ghana's High Forest Zone (HFZ). 30. The ultimate project beneficiaries of this operation are the rural communities (current and future generations) in the target regions who are currently being affected by the environmental damage and pollution associated with destructive mining practices. Community members engaged in ASM, including Page 16 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) women, will gain access to greater awareness of risks, as well as new skills and economic opportunities through pilot rehabilitation activities at inactive mining sites, including opportunities created by tree planting and plantation establishment. Under the parent project, women have significantly engaged and benefitted from project activities, particularly in enrichment planting and plant nurseries. This will continue and be further enhanced under the AF. Plantation establishment in nearby areas will further help to create jobs for community members, contribute to knowledge sharing and uptake, increase awareness of sustainable forestry management practices, and increase opportunities for promoting positive private sector contributions to Ghana’s overall REDD+ effort. In the HFZ, the proposed activities will contribute to reducing pressure on high biodiversity areas. Through replication and up-scaling of lessons from pilot sites, communities, landowners, farmers and cocoa growers could gain through reduced impact of mining activities on production systems, as well as improvement of their local environment. MLNR, FC, EPA, and MC, charged with forest, landscape and mining management, will also benefit from clarified policies and guidance, capacity development programs, and outreach programs. Other stakeholders, including the private sector and civil society, will benefit through improved stewardship of land, plus outreach activities. 31. To reflect and monitor the activities under the AF, a new PDO level indicator on Number of mining sites that have been rehabilitated (to a standard agreed with local stakeholders) has been included, and targets for most of the PDO-level indicators and intermediate indicators have been revised upwards (see Section VIII). 32. Project components. The Ghana FIP has four components: 1) Policy Reforms and Institutional Strengthening; 2) Pilot Investments for Improved Forest and Landscape Management with Communities; 3) Innovation, Capacity Building; and Communications; and 4) Project Management, Monitoring and Coordination. The proposed AF will follow the same structure. 33. Component 1: Policy reforms and institutional strengthening (US$2.00 million SCF grant). This AF will expand support for strengthening institutional coordination across a wider array of central, regional and local government agencies. This will particularly include the MC and the Ministry of Environment, Science, Technology and Innovation (MESTI), which has a leadership role in the effort to control destructive mining practices, as well as the EPA, which has a key role in setting standards for reclamation activities, controlling water pollution and toxic materials associated with all types of mining. The Ministry of Chieftaincy and Traditional Affairs, local chiefs and traditional authorities, and District Assemblies will need to be more proactively engaged in addressing ASGM issues at the local level. Legal analysis and policy development will specifically look at putting in place a policy on mined-out lands; standards and guidance for mine site rehabilitation (based on international good practices); and systems and capacity at national, regional and local level to sustainably protect rehabilitated sites. These institutional capacity building activities will engage relevant institutions, develop and disseminate guidance, and build capacity at national, regional and local level to sustainably regulate and manage ASGM and protect rehabilitated sites. Institutional strengthening activities will include improved information exchange and coordination across institutional mandates, for example, of FC, MC, EPA and district authorities. This can improve mine siting decisions and contribute to a more transparent and collaborative licensing process. Page 17 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) 34. The AF will support additional analytical and policy studies that aim to assess the magnitude and geographic spread of ASM impacts on forest and draw lessons from previous and existing activities/strategies – including those of legally operating firms – with regards to rehabilitation and restoration of mines-out sites. Based on this, guidance will be developed for practitioners on the ground, taking a multi-stakeholder approach. Policy and guidance development will have opportunities to collaborate with and learn from several projects and partners working toward similar goals (see Annex 6). It is important to mention that the GoG under the Natural Resource and Environmental Governance Technical Assistance Project (P129769) has developed an ASM Framework (2015) and several studies on alternative livelihoods and on rehabilitation costs. Also, the GoG and the World Bank are developing a Global Environmental Facility (GEF)-financed regional project for Reducing environmental health risks in artisanal gold mining and e-waste in Ghana (GEF Program ID: 9444) and expected to be approved in October 2019. This AF will support workshops and dialogue platforms to ensure the widespread understanding and uptake of these technical learnings and analytical results to address the environmental footprint of ASGM. Component 2: Pilot investments for improved forest and landscape management with communities (US$15.39 million including loan and grant) 35. Component 2a. Pilot demonstration of clean up and reclamation practices with alternative livelihood support after forest and land degradation and loss due to ASM (US$5.50 million SCF grant). This pilot activity aims to reclaim and rehabilitate mined-out areas in a small number of selected sites as localized demonstrations of appropriate technical approaches, analysis and testing technologies and policies, and clean up/reclamation practices. Selected sites will undergo detailed sampling and testing for contaminant presence (including on potential backfill material) before design of interventions at each site. Interventions will include rehabilitation of degraded land and river banks, remediation and clean-up of contaminated sites, and restoration of vegetation to reclaimed areas. Activities will be targeted to inactive illegally mined areas in Tarkwa and Bibiani Forest Districts in Western Region and Begoro and Kade Forest Districts in Eastern Region. After site visits and technical assessment, these four districts were chosen to represent a geographic diversity of sites and a range of reclamation issues and socio- economic conditions. 36. This proposed activity is coordinated with a larger GoG initiative to control and manage ASGM. Beyond the initial enforcement campaign and ban on small scale mining, the GoG’s MMIP has a longer-term forward plan to shift incentives, consolidate ASM locations, regulate mining better, and engage communities in more sustainable livelihood alternatives. The proposed activities in this package will be implemented and integrated within this larger governance framework fully coordinated with MESTI and MLNR leadership of the MMIP. Activities financed under Component 1 will engage relevant institutions, conduct policy analysis, develop and disseminate guidance, and build capacity at national, regional and local level to sustainably control illegal artisanal mining and protect rehabilitated sites. This investment is designed to develop lessons and successful models that can be scaled up and replicated. Page 18 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) 37. Rehabilitation, in this document, means that a degraded and disturbed site is returned to a condition where pollutants and runoff are contained, and some economically productive activities can be pursued with minimal risk to site users. The expected use of the land would have to be agreed upon by all stakeholders and the rehabilitation approach would be designed accordingly. This component will finance the following approach and activities for the design and implementation of rehabilitation interventions at specific sites:  Site selection and characterization for clean-up will include mapping, prioritization and characterization of mining degradation in forest reserves and cocoa landscapes in the HFZ. This will include site sampling and assessment of potential clean up approaches and techniques,6 which will inform site-specific rehabilitation plans.  Community engagement in planning and preparation. The AF will support assessments and stakeholder consultations on issues related to site selection, land status and suitable land uses, and complementary livelihood activities with a focus on gender issues and the potential differential uses of the site and replanted areas by men and women. It will finance engagement with local and traditional authorities and land use planning processes to improve district government collaboration with communities on forest and land protection. Training will be provided for communities, including miners, and local governments on responsible management and protection of reclaimed areas. More targeted training for women and youth on how they can better benefit from project activities will also be provided as needed.  Clarification of legal status in advance of implementation. An important aspect of site selection will be to consult and agree on basic principles and legal status of the land in advance of implementation of rehabilitation. This may require negotiation and resolution of land use and ownership claims in advance of spending public funds. Public funds should support rehabilitation in areas that enjoy wide public support and wide sharing of benefits.  Community engagement in implementation will create opportunities for local people, men, women, youth, and Community Resource Management Area (CREMA) members in reclamation activities, using appropriate land contouring and replanting approaches.  Alternative livelihood activities will be supported through engagement with communities, particularly miners, to identify suitable and beneficial alternative livelihood activities that can complement reclamation efforts.7 Women’s participation is essential to the development of alternative livelihood activities. Women and men will have different preferences over which livelihood activities are offered as alternatives to engagement in mining. Women will benefit from awareness and outreach about the negative effects of mining pollution on water and health. The parent project has already communication and outreach activities designed to facilitate knowledge sharing and replication.  Private sector will be engaged for lessons. Engagement with legally operating small- and large- 6 Through a collaboration with the Pollution Monitoring and Environmental Health Trust Fund program on Contaminated and Toxic Land Pollution, the World Bank team will access resources for a Rapid Screening Assessment that will help to help identify and characterize up to 100 contaminated sites, in collaboration with Ghanaian institutions. 7 Proposed activities will draw on the surveys and assessments on Alternative Livelihood Programs in Mining Communities conducted by MC under the NREG TA (June 2016). Page 19 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) scale mining operations will help to generate support, understanding of incentives, lessons on good practices from existing sites, technical assistance and potential visits to demonstration sites. Specific activities will learn from and be developed in collaboration with projects and partners that are already engaging in this area (see Annex 6).  Guidance on improved practices and promotion of replication. The AF will finance development and roll out of guidance materials on site assessment, clean up / reclamation approaches and success stories, as well as the preparation and studies needed in advance of reclamation efforts. The AF will support site visits, media engagement and outreach activities to ensure that successful small-scale demonstrations are used to influence policy makers and local land use decision makers. These efforts will be supplemented with communication and awareness raising activities financed under Component 3. 38. Specific activities will learn from and be developed in collaboration with projects and partners that are already engaging in this area. Annex 6 provides some examples of organizations and their work. Implementation will be combined with effective engagement of land owners, traditional authorities, mine managers and workers, and community members. 39. Screening criteria for selection of mined-out sites for rehabilitation will seek to identify sites with inactive operations, near Forest Reserves or water bodies, with clear legal status, no existing plans for reclamation and local communities willing to participate in reclamation. Strength of local institutions including both traditional and District Assembly and proximity of potential partner institutions (training, service delivery) will also be considered. To support preparation of this operation, the MLNR commissioned an assessment8 of illegally mined areas in the four target regions. The study confirmed the approaches proposed in this AF and contributed to the design of activities recommended for implementation at selected sites. The assessment mapped the areas, examined and characterized the degraded sites, conducted sampling and analysis for key contaminants (i.e., Mercury, Arsenic and Cadmium), conducted consultations with nearby stakeholders and communities, developed and costed reclamation approaches for several example sites. Site selection is being informed by the results of this assessment, as described in Annex 2. 40. Theory of change. The transformative nature of this activity is to provide positive demonstrations of the potential for local community action (with technical and scientific support) to reclaim and rehabilitate locally affected sites and waterways following the destructive impacts of improper mining. The siting of these pilots, the lessons learned, and the outreach activities aim to promote replication and scale up with non-FIP resources. If successful, these demonstrations will influence wider scale Government- driven, locally-owned interventions, with support from the MMIP, and potentially other development partners. The AF interventions, albeit on a small scale, will help to show the uses of alternative livelihoods, reduce environmental risks in target mined-out areas and support communities to engage in more sustainable forest and land management, which will enhance carbon stocks. Land reclamation has the potential to create sustainable local economic opportunities through production of timber, bamboo 8 Scoping Study of the Potential of Reclamation of Mined-Out Areas in Forest Landscapes - Eastern & Western Region. Final Report. Traffic & Environmental Network, Tema-Accra. Commissioned by MLNR/GFIP. September 2018. Page 20 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) and other fast-growing species, along with the nurseries that support them, which will help to diversify livelihoods at those sites. Local communities will benefit from improved ecosystem services, through soil stabilization, erosion control, and increase in biodiversity. Rehabilitation co-benefits include reduced erosion of riverbanks, sediment pollution of waterways, use and release of toxic materials into the environment, reduced human health effects in reclaimed areas, reduced impact of sediment and pollution on aquatic species, and improved recognition of the rule of law, as well as awareness of the long-term health and environmental effects. 41. The demonstration sites should become focal points for learning-by-doing as part of an effort to promote wider replication and scale-up to other degraded, mined-out areas across Ghana. These demonstrations and knowledge transfers will also inform and involve local officials, traditional authorities and regulators, who will learn practical approaches, and inform national authorities who will be improving guidelines and policies under Component 1. 42. Component 2b. Pilot for incentivizing investment and local level job creation in timber plantations (US$7 million concessional loan). This pilot activity will provide financing incentives and technical assistance to support tree planting by small and medium-scale plantation enterprises (SMPEs). SMPEs that access loan funds will provide employment benefits to nearby community members who will engage in site preparation, nursery establishment, tree planting, plantation maintenance and other activities. This could reach up to 2,000 beneficiaries in local communities), with up to half being women (the project will ensure that women have equal access to resources). Where feasible, these investments will be located near mined-out site rehabilitation pilots as described above. 43. Specific activities may include financial assistance for (small and medium) private plantation developers (including nurseries) to expand planted areas, focusing on trees in high demand for specific markets. Firms will be selected based on technical and financial viability (independently assessed), level of interest, willingness, business model to promote local employment opportunities (targeting vulnerable groups and forest fringe communities) and to promote quality wood products for domestic markets (criteria to be further refined). Support may include: low cost tree seedlings of economic species; business and marketing skills development; transport and delivery of the seedlings; training, tools and equipment for site preparation, planting/spacing, and care. Firms will have to demonstrate viable businesses based on financial assessment, business track record and due diligence by an independent financial assessment. SMPEs will be expected to comply with quality standards for seedling quality and stand maintenance practices, assessed through regular monitoring. 44. The design of the financing mechanism addresses specific needs identified during preparation, including the small and medium plantation enterprises (SMPEs) need for long-term financing; entrepreneurial and business management training (e.g., book keeping, financial reporting); and technical and extension support. Other needs are being addressed under the FIP ENFAL policy component: clarification of processes for acquiring land for plantations on forest reserves; improving management of wildfires; simplification of the timber harvest permitting process; and guidelines for forest investors. This financing mechanism design also recognizes past difficulties with SMPE loan schemes in Ghana and brings in Page 21 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) lessons from other countries and studies. There is recognition of the need to select credit-worthy beneficiaries, build a history of loan performance success, and move from a culture of reliance on government grants to a system of using public funds to catalyze investment in productive forestry enterprises and repayment of funds that can continue to support the sector. 45. The on-lending arrangements will involve partnership between public and private sector institutions, building on the strengths of each to deliver services and manage risks. The SMPEs will develop loan applications based on sound business plans and experience in the sector. Applications will be reviewed by a Joint Loan Appraisal Committee comprised of government representatives and a competitively selected commercial financial institution. Beneficiary forest plantation firms will receive both technical and business management support and regular monitoring visits to help in assuring successful plantation establishment (under Component 2c). Building the SMPE’s direct relationship with the financial institution has the potential co-benefit of addressing SMPE’s short term financing requirements (outside of the plantation financing facility). Successful SMPEs will sign legal agreements with MLNR and the financial institution that include conditions and requirements, including agreed repayment plans. The design is based on analytical studies, consultant recommendations, and discussions among GoG institutions. The design is further described in Annex 2, Detailed Project Description. 46. Theory of change. Forest plantation development by private firms in Ghana has been constrained by a weak enabling environment and a poor investment climate, especially for small and medium plantation enterprises. The transformative nature of this activity is to stimulate private sector investment in tree planting which will in turn create employment for local communities and timber supply for local markets. It will also empower communities to engage in local timber production and processing. Components 2b and c will reduce pressure on natural forests, create alternative livelihood options, rehabilitate degraded landscapes and sequester carbon. This activity supports and operationalizes the GoG’s plans to augment the legal, sustainable supply of timber through a plantation development program, which aims to enhance and promote private sector investments. It also helps to demonstrate an approach to promote SME investment in plantations, which has been constrained by a weak enabling environment and a poor investment climate. In addition to direct employment generation, plantation development has the potential to generate local economic opportunities through seedling production and service delivery or out-grower arrangements. Local government, traditional authorities and the state will benefit from increased revenue, as well as increased economic activity and business opportunities. Ecosystem services will be enhanced also, especially when plantations are located as part of a natural and planted forest mosaic, with enrichment planting of indigenous species under the original ENFAL project. 47. Component 2c. Field activity and technical assistance (US$2.899 million SCF grant). This sub-component will finance technical assistance and follow up to ensure that investments, financial management (FM), and plantation maintenance remain on track during the loan period. Technical assistance activities will focus on advising on tree planting and nurturing techniques, business planning and FM and reporting, species selection, mapping and land titling services. The FC and a partner financial institution will provide 9 This activity is noted separately to indicate the different forms of financing available in this tranche of FIP financing, which includes both grants and concessional finance. Page 22 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) the technical assistance and may draw on the work of service delivery organizations such as Solidaridad, International Institute for Environment and Development (IIED), Nature Conservation Research Centre (NCRC), the Sustainable Trade Initiative (IDH), and the National Board for Small Scale Industries (NBSSI), a GoG agency providing technical assistance to small businesses. Training and assistance for SMPEs will draw on established certification standards and systems that are operating in Ghana and accepted in timber markets. 48. The activities will include mobilization of community members (in targeted, degraded, mined-out areas) to engage in planting of economic trees and plants (possibly including indigenous bamboo) that can contribute to short-term livelihoods, longer-term economic options, landscape restoration, and soil/stream bank stabilization. Support may also include local livelihood opportunities, including (carefully selected) crops that can be grown within plantation systems at the early planting stage before the canopy closes (in Ghana this practice is well established and referred to as the Modified Taungya System). Community members engaged in agricultural production where plantations are being established help with weed control around the tree seedlings. The agricultural products also provide an early income source in advance of the first thinning and timber harvest. For communities organized into CREMAs, support may include technical assistance in business planning for value addition so that the tree/timber output is eventually used efficiently to contribute to local economic development (processing of timber into sawn wood, poles, building components and other value added/downstream markets). 49. Component 3: Innovation, capacity building, and communications (US$1.00 million SCF grant). Following the structure of FIP ENFAL, this AF will expand support for communication, outreach and regular reporting on trends and results of the activity by MLNR to coordination bodies and higher authorities engaged in the MMIP implementation and follow on planning, including MESTI, EPA, MC and others. It will support scaled up communication and outreach activities to engage communities and miners (both legal and illegal) with awareness campaigns about the government’s plans and programs. Outreach activities will be designed to engage miners on good environmental practices in artisanal gold mining and mine site rehabilitation, including use of established, legal small-scale mining operations as learning sites Where useful, training programs will be conducted with communities, mine owners and workers, local and traditional authorities and others to introduce improved practices, raise awareness of health impacts, environmental degradation costs and impacts. Outreach activities will also aim to promote replication of good practices and scale-up of mine site rehabilitation at additional sites across Ghana. 50. Component 4: Project management, monitoring, and coordination (US$1.00 million SCF grant). Additional support for management, monitoring and coordination recognizes the need to expand the G- FIP Steering Committee to include key agencies, such as the Ministry of Chieftaincy and Traditional Affairs and others as needed. Project management and reporting functions will expand to ensure regular reporting on and integration of the FIP ENFAL- and AF-funded activities with larger scale Government programs to address and control the negative effects of illegal ASM. Page 23 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) 51. Results monitoring and evaluation (M&E). Under a national framework reporting to the National Development Planning Commission (NDPC), each sectoral ministry, including MLNR, is responsible for sector M&E. Section 10 of the National Development Planning (Systems) Act, 1994 (Act 480) requires the Ministries to monitor the implementation of their Sector Medium-term Development Plans (SMTDPs) and submit reports at intervals in prescribed formats to the NDPC. MLNR is also responsible for ensuring that its associated agencies, including the FC, operate and report within this M&E framework. Under this system, the Minister and the Chief Director have ultimate responsibility for: (i) Development and implementation of Sector M&E Plans; (ii) M&E capacity building within the Ministry; and providing the necessary funds and supporting conditions for M&E in the sector. Within MLNR, the Policy, Planning, Monitoring and Evaluation Division (PPMED) is responsible for M&E, plus reporting into the national system. 52. Project-level M&E will be implemented under the current MLNR M&E system, with FIP indicators incorporated into the national M&E system. Project M&E will serve to: (a) monitor and report on implementation progress; (b) identify gaps that require corrective actions; and (c) assess and report on results (see section VIII for Results Framework). Project level M&E will also feed into the country FIP Program reporting per the guidelines on "Result monitoring and reporting in the FIP" approved by the Sub-Committee on October 30, 2013. The FIP Coordination Unit will be responsible for data collection and upstream annual reporting of progress on results to the World Bank and into the global FIP M&E system, directly to the FIP Steering Committee and the CIF / FIP Administrative Unit. Cost for collection of monitoring information is embedded in the overall budget. 53. Climate change benefits. As a FIP-funded operation, the proposed AF is designed to contribute directly to climate change mitigation by enhancing carbon sequestration into soil and vegetation. Through a complementary package of investment financing, technical assistance, capacity building, and outreach, the Project will demonstrate local level rehabilitation approaches to address the degradation and deforestation of forest landscapes caused by AGSM. Investments in Component 2 (remediation of mined-out sites, timber plantation development), where a significant share of financing is directed, are thus expected to result in close to 3,000 additional hectares of land to be a-/re-forested leading to significant emission reductions. 54. Gender aspects. In the current environment, where illegal artisanal mining is prolific, negative environmental effects have a disproportionate effect on women, children, and other vulnerable populations. There is the differential impact of mining pollution, specifically from mercury, on women and children through toxic exposure in water and diet. Galamsey also contributes to restricting, and in many cases precluding, access to resources, such as clean water and fuel wood—which women and children are most often tasked with obtaining—as well as agricultural lands, most notably cocoa farms. Contributing to these impacts is the fact that women and children often have lower levels of awareness about the risks and costs of artisanal mining to their health and to their households. Implementation will assess and monitor potential gender gaps arising from access to project benefits, including access to revenues from alternative livelihoods and jobs created – in reclamation, maintenance, and monitoring and enforcement of private woodlots and community resource areas. The project will ensure that Page 24 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) women actively participate in, and have decision-making authority, on committees, groups, or any governmental on non-governmental bodies making project, program or policy decisions with respect to community forest management and natural resource management. It will also ensure that women have access to livelihoods support schemes offered by the project. 55. The project will take the following steps to address potential gender gaps. The project will follow international best practices in transitioning women in pilot sites away from illegal mining, including lessons from previous projects, e.g. the recently closed Ethiopia: Support to Artisan Miners project (P125487). The project will use and leverage toolkits on gender and extractives to best meet the needs of women involved in or affected by ASM at target sites. The project will strive to support women’s organizations, which can help to represent women’s interests within the community and help to create “economic groups” that can support and exchange knowledge, training, and alternative livelihood pathways. Currently under the ENFAL project, women are increasingly benefitting economically from tree planting as part of village work groups, as well as work on local plant nurseries. Finally, the project will look at the linkages between mining, natural resources management, and gender; typically, job and revenue generation are accorded the highest priority. Under its communications component, the project will help to raise awareness of this nexus to the highest levels of state, as well as to the international community, with the potential to showcase case studies and lessons learned at international conferences and venues. 56. The AF will work within existing implementation structures include primarily MLNR, NREG Technical Coordination Committee, FC, COCOBOD, EPA and the Forest Research Institute of Ghana (FORIG. Under the AF, the institutional engagement will expand to include the MC, the minerals and land directorates within MLNR, the local Mineral District offices and the EPA. 57. Project steering committee. This project will be adopted by the existing GFIP project Steering Committee (NREG TCC+) for coordination of policy, resources and priorities. The proposed FIP implementation arrangement is integrated with the existing Natural Resources and Environmental Governance Technical Coordination Committee + (NREG TCC+), established in 2010 to facilitate the implementation of all natural resource and environment donor funded programs. The TCC+ also supports the implementation of Ghana's REDD+ agenda and includes representatives of key Ministries, Departments and Agencies (MDAs) including (MC and Local Government), plus the private sector, civil society and traditional authorities. For wider sharing and stakeholder engagement, the TCC+ can invite community-based organizations, women's groups, research institutions, etc. The Dedicated Grant Mechanism (DGM) is represented in the GFIP Steering Committee. 58. Implementing agency. The MLNR, which host the Minerals Directorate and the proposed Multilateral Mining Integrated Project (MMIP) which seeks to tackle illegal mining and ensure that legal mining is done in a sustainable way, will be the lead Implementing Agency responsible for overall management, coordination and project reporting. MLNR has responsibility for policy and legislation formulation and for M&E for the forestry and natural resources sectors including mines and lands. The Ministry has a dedicated team of technical staff responsible for the implementation of the on-going Ghana Forest Page 25 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Investment. 59. Project management unit (PMU). The existing Forest Investment PMU in the MLNR will coordinate the project under the Technical Director (Forestry) of MLNR. The FIP Management Unit in MLNR consists of a Project Coordinator (at Senior Director level), a Project Manager, a Project M&E unit, headed by the Director, Policy, Planning, PPMED, a Procurement Officer, a Planning/Desk Officer FIP, a Financial Controller, and a Project Accountant. PMU staff resources may be supplemented as needed with consulting expertise for communications, reporting, and logistics. 60. A broader project coordination unit will include the PMU and the dedicated project Focal Points from the FC, MC, Environmental Protection Agency and Ministry of Local Government and Rural Development and may include representatives of other collaborating agencies as needed. FC will implement field activities and provide services to local committees (of CREMAs and other CBOs) as outlined in paragraph 4. The FORIG, which undertakes forestry research, will lead on activities related to selection of appropriate tree species for the plantation activities and be a collaborating partner under Component 2. The MC and the district offices in the pilot areas will be responsible for supporting project activities including field activities and policy and legislation reforms to ensure that reclaimed lands are not explored again. The EPA which represent MESTI at the district level will ensure compliance with all environmental regulations. District Assemblies in the pilot areas will be members of local implementation committees and will be responsible for monitoring implementation of field activities. A subcommittee of the PCU made of representatives from the District Forestry Offices, District Minerals Offices, district EPA offices, and the District Assemblies will be directly responsible for overseeing implementation of field activities including monitoring of the reclamation activities, and Alternative Livelihood activities at community level. 61. Stakeholders to be engaged in consultations, policy dialogue processes and implementation of activities under this project include the following:  Communities and institutions supporting the development and implementation of CREMAs  Traditional authorities and land owners  District and Local Governments  Local and International NGOs  The Ghana Investment Promotion Centre  Professional communication enterprises, plus other intermediate service providers that may bring skills in training, visual communication, survey design, and M&E approaches  Ghana National Association of Small-Scale Miners (GNASSM) and the Private Afforestation Developers Organization (PADO). 62. Financial management assessment and arrangements. Consistent with the guidelines of the Financial Management Manual for World Bank-Financed Investment Operations issued on March 1, 2010, a FM assessment was conducted for MLNR, the key implementing agency under the Project, and FC. MLNR has in the past successfully implemented a series of IDA projects and is presently managing the original FIP project for which the FM arrangements are rated as Satisfactory Likewise, the FC is also presently Page 26 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) managing several Trust Funds (TFs) and their ratings are moderately satisfactory. 63. Even though the technical design of the Project is anchored between the MLNR/FIP Secretariat and the FC, the FM will be managed by the Accounts Department of the MLNR. The FM staffing strength at MLNR is strong and has been further strengthened by the assignment of a dedicated qualified Project Accountant. 64. MLNR. The overall FM responsibility throughout implementation will be handled by the Financial Controller at the MLNR. The responsibility of the Financial Controller is to ensure that throughout implementation there are adequate FM systems in place which can report adequately on the use of project funds. As recommended during the first AF, the MLNR has now assigned the daily transactional processing to a fully dedicated qualified accountant and this has helped in ensuring improved fiduciary arrangements. Under the direct technical oversight of the Financial Controller, the overall FM responsibility will be handled by the dedicated Project Accountant assigned by the Director and imbedded as part of the PIP/PIU. The responsibility of the Project Accountant is to ensure that throughout implementation there are adequate FM systems in place which can report adequately on the use of project funds. In addition, and with the supervisory role of the Director, the Project Accountant will be tasked with maintaining oversight responsibilities with regards to ensuring compliance with financial covenants such as submitting Interim Unaudited Financial Reports (IFRs), maintaining internal controls over project expenditure and engaging external auditors. The Project Accountant will also be responsible for maintaining and operating the designated account and support the processing of payments to contractors and service providers and verifying and authorizing payments for all contracts and activities. 65. The Project Accountant, working closely with the Project Director/Coordinator will be the focal person for fiduciary oversight and is expected to interact frequently with accountants at the various implementing agencies (FC, COCOBOD, EPA, MC) to ensure timely submission of imprest reports and documentation of expenditure in a manner that facilitates their consolidation into the project’s financial system. In sum, the Financial Controller of MLNR, supported by the Project Accountant would be responsible for ensuring compliance with financial covenants such as submitting unaudited IFRs to the World Bank, maintaining internal controls over project expenditure and engaging external auditors. 66. Forestry Commission (FC). Even though FC will play a critical role in the technical aspects of implementation, it has been proposed that in terms of FM their role will be limited to receiving funds from the single designated account, to be operated by the MLNR. Transfers will be made to the FC to support eligible project activities based on quarterly releases as per the approved annual work plans. As such the FM assessment focused on the systems in place at the FC to ensure that there will be adequate record keeping and documentation of project activities. The Finance Section of the FC is headed by the Director of Finance who is a qualified accountant with relevant years of experience and supported by a team of accounts officers with varying levels of qualification. As done in the current projects, a dedicated Project Accountant will be assigned the role of managing the FIP project to ensure that there is more focus on project financial activities. It is expected that the Project Accountant will be directly supervised and accountable to the Director of Finance. Page 27 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) 67. Compliance with FM covenants. Throughout the implementation of the original grant the project has generally complied fully with the covenants (submitting acceptable interim quarterly financial reports and audit reports). The 2018 IFRs were submitted on time and in form and content that is acceptable to the World Bank. With regards to the submission of audited financial statements, the project has complied satisfactorily. The most recent audit report was for the year ending 2017 and the audit report was received on July 9, 2018 which was beyond the six months’ period after the end of the fiscal year and thus slightly non-compliance with the provision of the Financing Agreement. In addition, the audit indicated that the control environment for implementation was adequate and that minor issues noted were not material or significant to affect the underlying records. 68. In conclusion, the assessment of the FM arrangements at the MLNR and FC concludes that there are adequate systems in place that satisfy the World Bank’s minimum requirements Bank Policy and Bank Directive: Investment Project Financing and the overall FM risk has been assessed as Moderate. Page 28 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) 69. Strengths and weaknesses of the Financial Management System. MLNR has a fully functioning accounts unit overseen by a qualified accountant (meaning officer has passed professional exams and is a member of a professional society) and assisted by additional staff with varying degrees of experience particularly in public sector accounting. The presence of an existing accounting unit with established processes and procedures as complemented by adequate staffing who are already conversant with IDA projects is the key advantage of the finance and accounting team within the MLNR. As part of the ongoing implementation of the FIP project (original grant), the accounts team has been further strengthened by the assignment of a fully dedicated qualified accountant who oversees the transactional processing and reporting arrangements. This has helped to ensure full compliance with IDA FM guidelines. 70. A possible weakness could arise from the inherent risk associated with challenges in inter-departmental coordination, oversight and controls between the MLNR and the key implementing agencies e.g. EPA, COCOBOD, FC, MC etc. Specifically, for FM this could result in delays in preparing and approving consolidated budgets, delays in releasing of fund and challenges in providing appropriate supporting documentation. In addition, a major challenge has been delays in preparing and submitting acceptable financial returns from the implementing agencies. To address this risk, the World Bank has recommended that the Project should transfer additional funds to the beneficiary agencies only if they have documented up to 75 percent of the outstanding balances (advances). Furthermore, the accountants should understand that the funds are not “earmarked” and so they can be used for any eligible project activity as determined in the approved AWP& Budget. This should help address the issue of funds being requested for new activities even though funds are still available for planned activities which are yet to be initiated. The proposed changes have been discussed and agreed and will be amended in the revised Project Implementation Manual (PIM) by June 2019. 71. In general, the assessment indicates that both primary implementing agencies have in-depth prior experience of implementing World Bank and donor-financed projects. They thus have the requisite know-how and experience to carry out the accounting function of the proposed project when supplemented by dedicated incremental staff over the life of the project. III. KEY RISKS 72. Overall project risk is substantial. (The current project is rated moderate in risk). During site visits and meetings with decision makers and stakeholders, the complexity of the small-scale mining issues and the risks associated with stakeholder engagement to prevent further environmental degradation and scale up rehabilitation efforts was noted. Implementation risks are increased overall due to rehabilitation of mining areas and the addition of new implementation partners. The project design is being adjusted to mitigate risks where possible but engaging with the mining sector in Ghana will have its own set of risks. 73. Political and governance (Moderate). The GoG’s vision for reform and improved management of the sector is sound but complex and involves multiple levels of government and society, which need to work together to address key priorities. The project will need to deliver tangible results to communities to sustain support for the overall change process. The election of the new government in late 2016 created Page 29 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) new opportunities and entry points for improving natural resource governance. 74. Mitigation Actions. The issues of governance, vested interests and distorted incentives will be addressed by using technical criteria and technically-sound established institutional frameworks for making decisions on allocation of project support at the community level. Engagement will be increased with traditional authorities and will aim to be led by community demand and interest to the extent possible. 75. Macroeconomic (Moderate). Ghana is classified amongst the most stable economies in the West African sub-region. The economy rebounded strongly after years of decline, from 3.4 percent in 2016 to 8.1 percent in 2017 and projected to remain robust at 6.2 percent in 2018. The fiscal deficit also fell consistently from 7.3 percent of GDP in 2016 to 4.8 percent of GDP in 2017 and further to 3.9 percent of GDP on provisional basis in 2018. With regards to general price levels, recent trends reveal a consistent decline in the inflation rate from 15.4 percent in December 2016 to 9.2 percent in February 2019 and projected to remain in the Central Bank’s target range of between 6 percent and 10 percent in the medium-term. Despite the fiscal deficit challenges experienced over the years during election years, measures being implemented including the passage of the Public Financial Management, Act 2016, the Fiscal Responsibility Act, 2017, the establishment of the Fiscal Council in 2019, and other anti-corruption measures such as the establishment of the Office of the Special Prosecutor are expected to reduce these risks. The activities of illegal miners (galamsey) have been brought under increasing control by the work of an anti-galamsey task force. 76. No mitigations for these risks are proposed as risks are external to the Project and beyond its scope. 77. Sector strategies and policies (Substantial). GoG, and particularly MLNR, has high engagement and interest to address the problems of illegal ASM. A new GoG initiative, the MMIP, see Annex 5, has been developed and will add resources and political resolve to addressing the issues. However, this initiative will require coordination across a range of national agencies with different mandates, as well as engagement with local governments and law enforcement entities at several levels. This yields a complex playing field. Likewise, policies will need to be updated and strengthened to ensure that the legal authorities and mechanisms are in place to address degradation, contamination, and illegality issues. 78. Mitigation Measures. The AF does not propose to take on all ASGM issues; it is expected to function as one part of a larger GoG effort, with support from the World Bank and other development partners (see Annex 6). AF activities will be coordinated with the Ghana Artisanal and Small-Scale Mining Formalization project (P168002) now being prepared and expected to be approved in December 2019. The AF activities allocate substantial resources to policy assessment, coordination and implementation among key agencies – and consultative processes to ensure that policies are developed and improved with a sound basis of stakeholder input. Rehabilitation activities will focus on a few sites in 4 targeted districts in a pilot testing approach to determine what forms of intervention – considering both land reclamation and timber plantations for livelihoods – have prospects for success. The proposed design includes resources for consultation, communication and dissemination of lessons and successful practices. These allocations aim to build the role of change agents in communities and to build constituency for practical and legal Page 30 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) solutions to the problems at hand – and to demonstrate the potential for scale up using other financing sources. 79. Technical design of project (Moderate). The project design does not rely on complex technologies or procedures. There is a need to pay attention to site selection criteria, consultation with affected communities, and the potential replicability of interventions, such as tree planting, community engagement and monitoring. Developing community and company partnerships for establishment of timber plantations may be challenging in terms of convening and negotiating. There are financial risks associated with the potential for non-repayment or default under the plantation financing loan scheme for SMPEs, as has occurred in past SMPE loan schemes in Ghana. This risk does not apply to the loan portion of this operation from the World Bank to the GoG; the MoF agrees to repay through a standard loan agreement. The risk of non-repayment is for the on-lending from Government to financial institution to SMPEs. This risk is mitigated through the design, which benefited from consultation with experts and with private financial entities plus SMPEs to ensure that the incentives and risk bearing are well defined and aligned. The design includes criteria and methods for selection of credit-worthy beneficiaries, technical assistance on plantation establishment and business skills, and frequent field monitoring both by the financial institution and by the FC. As a last resort, loan recovery can be achieved at the time of sale of harvested timber, which requires a harvesting permit from the FC. 80. Institutional capacity for implementation and sustainability (Substantial). Implementation capacity under the current project has improved so that the risk is currently rated Moderate. However, the proposed AF will introduce new implementing agencies that have less experience with implementation of World Bank projects and less experience with MLNR acting as a coordinating agency. This will create some growing pains for implementation of new activities in new areas under the AF. In addition, the design of the on-lending mechanism requires that public and private entities work together, though they have differing goals and cultures that will have to be managed. 81. Mitigation Measures. The project will work from a good institutional base and coordination procedures. The new institutions brought into the implementation framework will have access to training, learning by doing, and examples of success among their partner agencies. This should help to bring all parties up to speed relatively rapidly. The PIM will be updated and disseminated for training, on the job learning, and practical application among new members of the coordination team. The risk in the public-private financing approach will be mitigated through regular management processes, joint training efforts, and the work of the Joint Loan Appraisal Committee. Ghana’s institutions already engaged in FIP ENFAL have demonstrated success in overcoming weak coordination and communication, for example, between FC and COCOBOD. Promoting collaboration between public and private sector actors in this pilot will demonstrate approaches and build capacity that will have wider benefits for future funding and development of small and medium scale private commercial plantation enterprises and reforestation activities. 82. Fiduciary (Substantial). FM risks under the current project arise from the capacity of MLNR to manage World Bank funds and from the multiple agencies involved in implementation. These risks were rated Page 31 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) moderate after implementation of key recommendations requiring dedicated FM staff and additional training, plus close monitoring. 83. Mitigation Measures. The current set of mitigating actions has allowed the current project to obtain a moderate risk rating and a satisfactory performance rating. The moderate risk rating is because of the positive changes in the FM arrangements due to the coming on board of a new and more experienced accountant, and more proactive involvement of the senior project management team in the fiduciary matters of the project. It is expected that this level of performance will be maintained. However, continued attention is needed with the addition of more implementing agencies and work with district assemblies and communities. 84. Procurement Management. Procurement management has improved under the current project implementation but is still assessed as substantial. This is due to the potential for weak planning due to insufficient capacity, lack of use of the procurement plan as a monitoring, evaluation and management tool, and delays in the procurement process due to delays in evaluation and clearance of bids. 85. Mitigation Measures. The most recent ISR rated procurement processes and compliance, record keeping and contract administration and performance as Moderate, noting that MLNR’s PMU adheres to the general principles of procurement, the World Bank’s Guidelines and the Project Implementation Manual (PIM). Continued close engagement with the PMU procurement team are expected to manage risks appropriately. Procurement under the AF is likely to be for small items, such as field tools, seedlings, and the like. 86. Environment and social (Substantial). A key activity of the project is to design, consult, and pilot test interventions that can improve the environment around abandoned mining sites through reclamation and replanting, including with timber plantations. However, beyond the project, there is substantial risk of continuing environmental degradation related to the pace and scale of galamsey activities. Also, newer excavation or processing technologies could come into play that make subsoil extraction easier or less costly, further exacerbating the issues of illegal mining, even to the point of allowing re-entry to mined-out areas (as has happened in Rwanda). There is also the potential for toxics (e.g. mercury) used in mineral processing to contaminate the soil in the reclamation areas or to make those areas unsuitable for certain agricultural uses, including food crops. In addition, there will be a significant risk of polluting surface and ground water as well as impacting public health with heavy metals. 87. Mitigation Measures. Through the safeguards documentation, the project has developed strong implementation guidelines on what kinds of rehabilitation and replanting can be undertaken, depending on the level of site contamination. In some cases, replanting may include only timber or construction materials, such as bamboo. Proper monitoring and oversight of the reclamation process will be needed to ensure that project activities do not contribute to hazardous materials entering the environment or food chains. Participation, consultation, and communication will be needed to ensure that the right messages go out to project participants and affected communities. Training and communication components will aim to ensure that people understand the contamination risks and have the skills to Page 32 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) conduct activities without increasing contamination through crops or livelihood activities. The Environmental and Social Management Framework (ESMF) provides procedures for reclaiming mined- out sites to avoid and mitigate impacts of heavy metals on human health and the ecosystem. 88. Social risks arise from multiple aspects. The project will focus on community engagement and land/forest rehabilitation plus timber stand establishment. These will provide alternative livelihoods for some in the near term. However, earnings in these alternative activities may be substantially lower (though more sustainable) than what illegal miners can earn. Also, the project activities will occur alongside government actions, such as increased law enforcement and other efforts to deter illegal ASM. These may further curtail the livelihoods of substantial numbers of people in wider areas than the project interventions. This may also lead to conflict between groups or with the implementing agencies. There are also social risks associated with working in illegal ASGM areas, which feature a range of unlawful activities, high financial rewards along with potential corruption, a mix of local, in-migrant and foreign influences, and the potential for violence (to gain access to land, to protect assets, etc.). The GoG’s efforts to curtail illegal mining by force in some areas adds to the potential for violence or repression or rights. The risks of encountering illegal activity and violence in rehabilitation areas financed by this project are mitigated by careful selection of sites (no current mining activity), full consultations with local communities (which need to express support for the interventions) and full consultation with local authorities (which need to support and authorize the interventions). 89. Mitigation Measures. Project activities will focus in a few areas and on some technical activities that can pilot test steps toward improvement. Participatory and consultative approaches will be followed in conjunction with a functional Grievance Redress Mechanism (GRM) that serves as an avenue for addressing any issues resulting from project implementation. Assessments and international comparisons will be used to advise the government on sound approaches that lessen the risk of conflict and social exclusion. Communication activities will be designed to ensure that participants and observers understand the pilot nature of the activities and the need for scale up beyond the existing project resources. 90. Stakeholders (Substantial). Numerous sets of stakeholders need to be engaged and satisfied, including communities; district level authorities; small, large and legal miners; land owners and land users. It may be difficult to obtain equal buy-in from different groups. There may also be competing claims to land that is planned to be reclaimed/rehabilitated or to lands where the government determines to grant concessions to small scale miners (who have been registered and legalized). 91. Mitigation Measures. Consultative processes will be followed when engaging communities and stakeholder groups. Pilot activities will be localized to a small set of districts where political will and community awareness are already aligned toward positive action. Strong communication and outreach activities will be planned. Educating and raising awareness with traditional authorities and organized local groups such as farmers, traders, religions, youth and women will be an important element of stakeholder engagement. Page 33 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) IV. APPRAISAL SUMMARY A. Economic and Financial Analysis 92. This intervention is expected to generate significant and positive benefits that outweigh the costs. This expectation is based on the rationale that the mined-out sites are currently generating negative costs and externalities, including erosion/soil loss, river siltation, loss of productive forest and agricultural areas, and waste and chemical pollution. Without intervention, negative externalities will continue to flow from these sites affecting both the local and downstream communities (yielding a discountable stream of future costs imposed on Ghanaian society). This project aims to begin the process of reducing this stream of negative costs, in a few pilot sites, while also mobilizing community labor and leveraging wider GoG interventions, such that the basic investment costs are limited, while the potential benefits are great. 93. The AF activities are focused on two main interventions, plantation establishment and mine site rehabilitation, which are both expected to generate significant and positive benefits that outweigh the costs. For plantation establishment, this expectation is based on a detailed financial modeling exercise conducted by FC, explained below. For the mine site rehabilitation, this expectation is based on the rationale that the mined-out sites are currently generating negative costs and externalities, including erosion/soil loss, river siltation, loss of productive forest and agricultural areas, and waste and chemical pollution. Without intervention, these negative externalities will continue to flow from these sites, affecting both the local and downstream communities (yielding a discountable stream of future costs imposed on Ghanaian society). This project aims to begin the process of reducing this stream of negative costs, in a few pilot sites, while also mobilizing community labor and leveraging wider GoG interventions, such that the basic investment costs are limited, while the potential benefits are large. 94. Plantation establishment returns. During project preparation, the FC conducted an analysis of returns on plantation investments, based on a 100-hectare timber plantation over a 25-year period with plantings of three types: Teak, Cedrela, and mixed timber. Both Teak and Cedrela are exotic species and are the first and second most common timber plantation species in Ghana. Mixed indigenous timber species plantations consist of some mix of Mahogany, Ofram, Wawa, Emire, and others. The model accounted for plantation establishment costs, seedling production, annual maintenance (e.g., weeding, pruning, fire patrols), labor and management costs for supervision and administration, machinery and vehicle operation and maintenance, plus returns on thinning, selective harvest, and commercial harvests at later periods. The model provided a detailed financial analysis framework for examining different scenarios of costs and potential revenues, based on realistic commercial timber assumptions for Ghana’s markets. The analysis showed that timber plantation investments can achieve positive long-term returns, though with wide variability based on the type of timber. The Internal Rate of Return (IRR) calculated for Teak plantation was 19 percent, for Cedrela it was 11 percent and for mixed indigenous species, the IRR was 6.8 percent. Teak is a higher value timber, is relatively fast growing, and has well developed markets, particularly as compared to indigenous species. For Teak, the modeled 100 ha plantation yields positive cash flow by year 10 due to returns on thinning and some harvesting. In contrast, the slower growing Cedrela and mixed plantations do not achieve positive cash flow until year 20. This shows that plantations Page 34 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) can yield attractive returns, but only in the relative long term, thus confirming the premise of this AF activities to support awareness raising and practical learning within the financial sector. The FC model was a partial analysis that did not measure climate / carbon and other benefits, which together would make the analysis even more positive. Additional quantifiable benefits from the plantation investments include: increased tree cover due to plantations and associated carbon benefits plus greater habitat connectivity, productive economic activities of communities engaged in alternative livelihoods, and the multiplier effects of processed wood products in the economy. 95. Mined-out site rehabilitation. For the pilot mine site rehabilitation effort, a qualitative analysis is presented, recognizing that this is proposed as an experimental approach to promote learning and uptake. While rehabilitation and maintenance costs can be estimated, the actual costs of implementation will depend on the sites chosen and the extent of contamination (fully known only after site investigation, sampling, and analysis). The benefits of clean up and rehabilitation can be enumerated readily but quantified only with great effort and uncertainty. The benefits of avoided contamination include improved effects on human health, environmental health, and water quality – which can be monetized only with an excess of assumptions about exposure rates, numbers affected, and the degree of effects. The value of reducing negative effects on human life or health can be quite large. However, within this small pilot project, negative consequences will be reduced or avoided only on a small scale for the few sites targeted for intervention and rehabilitation. 96. Under contract to MLNR, the Traffic and Environmental Network (TEN) conducted a “Scoping Study on the Potential of Reclamation of Mined Out Areas in Forest Landscapes.” This study provides information on techniques and costs of site rehabilitation for several potential sites. The costing analysis covers sampling and laboratory analysis, backfilling of illegally mined pits, restoration of river banks along forest buffers and off Forest Reserve sites, restoration of plant biodiversity on reclaimed sites, remediation of contaminated sites, and maintenance of the site and monitoring after clean-up. The study examined eight mined out sites with an area of 1,465 ha located within forest reserves and rivers along the buffer zones of FRs. Total intervention costs were estimated at about US$9.5 million for all these sites, or an average cost of about US$6,500 per hectare. Learning from these sites should lower implementation costs at future sites and foster uptake and replication from other financial sources. Not all these areas can be covered within the budget allocated for this project. 97. Livelihood activities promoted for local communities (on small scale) will be selected and agreed with communities based on technical feasibility, plus their potential to produce positive economic returns relative to the lack of economic activities in the selected mined-out areas. Because the areas selected have no current mining returns, opportunity costs are assumed to be at or near zero. However, the potential returns to ASGM will remain large relative to the investments or returns possible in the limited areas targeted for intervention under this AF. 98. The AF activities related to mine site rehabilitation will also generate local and off-site benefits and public goods that are difficult to quantify or estimate. These benefits include improvements to land stabilization in riparian zones, water quality in demonstration sites, resilience building, and risk reduction associated Page 35 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) with reduced illegal activity and community control over local resources. Assisting the government and the communities to address and control a widespread environmental problem promotes learning and social mobilization, and builds social capital, institutional confidence, and respect for the rule of law – all societal goods that are not generally quantified, though of high value to Ghana in the current situation. These potential and less tangible benefits help to justify the cost of the small-scale mine site rehabilitation pilot tests. 99. Less tangible benefits. This project will generate local and offsite benefits and public goods that are difficult to measure in advance. These benefits would be focused in a few pilot sites primarily. However, the potential for wider replication is also recognized and would be an unquantified benefit. These benefits include improvements to land stabilization in river banks and associated riparian zones close to the mined out and rehabilitated sites, water quality in demonstration sites, resilience building, and risk reduction associated with reduced illegal activity and community control over local resources. Assisting the government and the communities to address and control a widespread environmental problem promotes learning and social mobilization, and builds social capital, institutional confidence, and respect for the rule of law – all societal goods that are not generally quantified, though of high value to Ghana in the current situation. Enumerating unquantified benefits raises the confidence that project costs are justified by the benefits achieved. B. Technical 100. The project design follows international good practice guidelines in the interventions supported. Activities are designed to fit within the responsibilities of MLNR and FC, as institutions with mandates for forest conservation, management, and improvement. Due to the cross-cutting nature of the illegal ASGM challenge, the project design involves additional agencies with relevant mandates – MESTI, EPA, MC, the minerals and land directorates within MLNR, the local Mineral District offices – and amplifies the project’s outreach to communities, local governments, and traditional authorities. The project dovetails with the GoG’s wider efforts to control illegal ASM and mitigate its consequences, though it is focused in a few sites. To promote alternative livelihoods at local level, the project provides the means, capacity building, and incentives to engage more effectively with: a) rural communities, providing a role in rehabilitation which becomes a source of alternative livelihoods; b) the private sector, supporting investment in plantations, to create jobs and develop a source of sustainable timber; and c) the traditional authorities, to identify alternatives to land allocation for ASGM. Communication efforts build on the original project design and will promote coordination within the government and among stakeholders, including communities, while outreach and awareness raising efforts will target illegal miners, their communities, and traditional authorities. The components work together to enable key GoG agencies to work more fully and cooperatively with citizens to prioritize, incentivize, and render durable the sustainable use of forest lands, shifting away from destructive practices. If the demonstration value of the pilots is high, scaling up should occur in other illegal mining-affected areas and regions of the country. 101. The technical design draws on best practices from complementary analytical studies and synergies with Page 36 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) ongoing and planned projects operating in related areas. The analytical studies informing this project include: a) in-depth analysis of natural resources issues, including those related to artisanal and small- scale mining and their effects on forests10, conducted by MC under the Natural Resources and Environmental Governance NREG Technical Assistance (NREG TA) Project; b) a PROFOR-financed Forest Smart Mining – Identifying Good and Bad Practices of Artisanal and Small-Scale Mining in Forested Landscapes11; and c) the Frugal Reclamation report from Mongolia, financed by the Asia Foundation12, which looks into ways in which Mongolia can mitigate environmental negative impacts from illegal ASM and formalize the sector. Simultaneous to the FIP AF are related projects that create opportunities for collaboration and will strengthen overall support to the GoG in this complex area. The GEF-funded Reducing environmental health risks in artisanal gold mining and e-waste in Ghana (GEF Program ID: 944413). One subcomponent is dedicated to addressing mercury pollution and will complement this project by pilot testing cost-effective and environmentally sound extraction technologies and support policy enhancements for improving monitoring and enforcement of mercury use regulations. Under the World Bank’s Pollution Management and Environmental Health PMEH program (Toxic Sites Identification and Land Based Pollution (P161890), a trust-funded analytical program), there is a plan to offer rapid assessment screening of the public health risks posed by mercury toxicity. Under this project PMEH is providing resources to identify and characterize approximately 100 contaminated and toxic sites across Ghana and to carry out in-depth analysis/research of a few sites to assess the health and related economic effects of toxic land pollution. Additionally, multiple organizations operating in Ghana have expertise and some years of experience in reclamation practices. The AF will leverage the work in rehabilitation that has been done or is currently ongoing by large scale mining companies, non- governmental organizations, and universities. Annex 6 provides more details on these projects and organizations. 102. Component 1 (Policy Reforms and Institutional Strengthening) responds to the need for cross-sectoral coordination and improved policy to control illegal ASM and mitigate damage. The design recognizes that agencies need to work together given the complexity of the situation. The project expands on existing institutional platforms for cross sectoral coordination that help to synchronize the ability of relevant agencies to use their mandates in a more holistic approach toward the goal of halting and remediating the effects of ASGM. The project also provides resources to correct policies and incentives to discourage galamsey and foster reclamation and rehabilitation. The project provides technical expertise, private sector experience, and international best practices to equip project implementers with knowledge on how to cost effectively engage in rehabilitation with community engagement and how to protect these sites from re-entry. These policy, coordination and information interventions come at an opportune time where higher level decision-makers are seeking effective approaches to address an issue with national political visibility. 10 MLNR/ MC. Reclamation /Remediation Plans for Selected Old Mining Sites with High Risks of Pollution in the Tontokrom Area of Amansie West District. Final Phase Four Report. Sal Consult Limited. Accra. December 2016. Minerals Commission. Artisanal & Small-Scale Mining (ASM) Framework. November 2015 11 https://www.profor.info/knowledge/extractive-industries-forest-landscapes-balancing-trade-offs-and-maximizing-benefits 12 https://asiafoundation.org/resources/pdfs/MongoliaESECFactSheet.pdf) 13 https://www.thegef.org/project/ehpmp-environmental-health-and-pollution-management-program-africa Page 37 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) 103. Component 2 includes two pilot demonstrations that aim to influence wider perceptions and investments. The first pilot (Demonstration of Clean Up and Reclamation Practices with Alternative Livelihood Support) responds to the need to show action on the ground, as well as more sustainable economic alternatives. This activity contributes to the effort to characterize the extent of mining-affected areas, which will assist the GoG in planning for nationwide rehabilitation efforts. The pilot interventions also aim to highlight and strengthen currently weak local land use planning and allocation processes, which do not sufficiently engage community stakeholders. This intervention will also build (to the extent possible based on site selection) on the CREMA approach, which is being expanded under the original FIP ENFAL project. Working through communities and local authorities, the project aims to foster greater participation and increased benefits through demonstration of better planning and management of forests, trees and natural resources within mined-out areas in key target landscapes. This community- based approach holds the potential to help transition former illegal miners onto sustainable livelihood paths, including in timber production. The approaches will also be informed by technical knowledge and guidance from legal mining enterprises that have demonstrated positive experience with site reclamation and rehabilitation in targeted sites. These interventions should contribute to reviving ecosystem functions, improving soil productivity, increasing tree cover, and restoring water courses, which will benefit both the targeted community and wider users of the landscape, especially those downstream from the affected area. 104. The MLNR mine site rehabilitation assessment provides some perspective on the community level political economy of ASGM (further described in Annex 5). ASGM is lucrative enough that miners will not move to alternative livelihoods for economic reasons alone, but rather due to a combination of awareness raising, health information, enforcement of rules, and establishment of safer, more contained mining approaches. At the same time, it is clear from press reports and community engagement during project preparation that community members and local governments are ready to support changes to contain and reduce environmental degradation due to illegal and destructive practices. Local level rehabilitation activities under this project will be focused on mined-out sites, where the gains have already been extracted. Remaining actors would gain from reclaiming the mined-out sites into less degraded, more productive land and creating alternative livelihood to reduce the impact of galamsey on natural forests. Along with the rehabilitation proposed in this project, the GoG is proposing wider changes to regulate and localize ASGM to better regulate it and reduce environmental impacts. 105. The second pilot activity (Incentivizing Investment and Local Level Job Creation in Timber Plantations) responds to the need to augment legal, sustainable sources of timber for the domestic market and to reduce illegal logging and unsustainable exploitation of forest resources. The pilot also addresses credit constraints for long term capital needed for forest plantation development. Pilots aim to demonstrate plantation timber as a viable business model that is currently under-recognized in the commercial banking sector due to slow returns on investment. The activity follows a financial assistance scheme based on Uganda’s demonstrated experience, which generated revenue for timber farmers and helped rebuild that country’s commercial timber sector. The transformative nature of this activity is to empower communities and entrepreneurs to engage in local timber production and processing, which will also create livelihoods, rehabilitate landscapes and sequester carbon. Technical assistance activities – a Page 38 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) related subcomponent to the second pilot – provide a range of services to timber farmers, including agronomic advice, business planning and land and tree tenure services. Local communities should also benefit from employment and opportunities for service delivery, maintenance and out-grower business opportunities, such as seedlings for nurseries, transport and logistics. 106. Plantations can be considered/targeted in rehabilitation plans for near mined-out areas or other degraded areas. Tree plantations as part of a rehabilitation plan for mined-out sites would stabilize and rehabilitate degraded land and provide alternative livelihoods to community members, but would also have to be technically suitable, financially viable, and determined in consultation with the local population. Species to be used for reclamation / rehabilitation sites will be selected on the basis of their ability to grow fast and rehabilitate mined-out sites, with a preference for native species, and in accordance with the World Bank’s environmental and social policy. Selection of tree species for rehabilitation will be based on community needs and interests, including differences between women’s and men’s interests in timber and non-timber products for construction, fuel wood, medicinal use and other purposes. The potential for economic output and value addition will be taken into consideration. However, there is potential to support 20 to 40 small scale plantations of 10 to 100 ha, while the number of mining reclamation sites will be small and localized. Also, SMPEs that want to borrow to invest in timber plantations are likely to already have locations proposed, closer to markets. So, there will not be exact matching of plantation and rehabilitation investments. The tree and bamboo planting on degraded areas may not result in commercially viable plantations, though the project will seek opportunities to support community enterprises. 107. Environmental assessments of tree planting and other reclamation efforts will consider the environmental baseline in degraded and mined-out areas. Cocoa farms, river banks, and forested areas will have been degraded or destroyed in some cases, resulting in erosion, sedimentation and downstream water pollution. Against this baseline, interventions to stabilize the soil, rehabilitate the degraded land, and control/contain contaminants will have positive benefits for local and downstream communities. Planting of tree species and bamboo expressly for soil and bank stabilization can be organized with local communities. Species to be used will be selected on the basis of their ability to grow fast and rehabilitate mined-out sites, but also considering community interests with preference for native species. Activities at pilot sites will aim to demonstrate what species and methods result in positive impacts and reduced risk of exposure to environmental harms. As such, rehabilitation of mined-out sites will have positive environmental and social impacts. 108. Component 3 (Innovation, Capacity Building, and Communications) responds to the needs of the government to strengthen engagement with illegal miners and the communities in which they operate. This builds on existing communication and outreach efforts and increases focus on public health and environmental awareness raising, training, and good environmental practices. The project will leverage the experiences of legal LSM and SSM practitioners to transfer knowledge and aid in the rehabilitation of degraded forest landscapes. Improved communication with and outreach to illegal miners and illegal mining communities should lead to improved relations, reduced conflict, and more cooperative and informed reclamation efforts. Page 39 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) 109. Component 4 (Project Management, Monitoring, and Coordination) responds to the needs of an already complex institutional environment for proper coordination and communication channels between the multiple agencies involved in combatting galamsey. The activity will expand and support existing institutional governance structures and build skills and networks to strengthen and align GoG priorities, objectives, and interventions. This should facilitate ongoing efforts to address the galamsey challenge and channel GoG capacity in a concerted effort to protect the environment and preserve natural resources. C. Financial Management 110. The MLNR follows the budget preparation guidelines as per the Public Financial Management Act (921) 2016 and the annual budget guidelines issued by the MoF. Specifically, for this project (FIP), the budget and expenditure allocations have been agreed between the government and IDA and will form the basis of the annual work plans and budgets. The current budgetary control processes used mostly for the government’s discretionary budget are capable of monitoring commitments and outstanding balances. The assessment indicates that budgeting processes are satisfactory and can be relied upon to reflect the various components of the project. See Annex 3 for details on FM arrangements. D. Procurement 111. The procurement management arrangements remain unchanged. The implementing agency will be the MLNR, which will be responsible for the project’s procurement and contract management, in collaboration with the FC, MC and other relevant agencies under the MLNR. See Annex 3 for details on Procurement Management Arrangements. E. Social and Environment (including Safeguards) 112. This AF includes new activities: 2a. Pilot demonstration of clean up and reclamation practices with alternative livelihood support after forest and land degradation due to ASM; and 2b. Pilot for incentivizing investment and local level job creation in timber plantations. These components will be implemented in forest and cocoa landscapes in Ghana’s High Forest zone, which includes areas of Brong- Ahafo, Western, Ashanti and Eastern Regions. These activities will have positive social and environmental benefits; possible adverse impacts will be mitigated by safeguard instruments prepared for FIP ENFAL. The project is classified as Environmental Assessment (EA) Category B. 113. Under component 2a there is a plan to rehabilitate some pilot sites from a mined-out and degraded state to an economically usable state. Since mined sites may be contaminated with heavy metals, including Mercury, which is toxic to humans and the environment, care will be introduced in the practices and approaches deployed – including appropriate water and soil testing – in the process of reclaiming mined-out sites to protect people and the environment from contamination. Soil management measures such as liming are required to prevent the contaminant migration from the topsoil into the subsoil and groundwater as well as to provide suitable conditions for planting trees. As noted in safeguards analysis Page 40 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) and ESMF, the choice of species for rehabilitation of degraded land must consider the potential for soil (and water) contamination, for example timber trees or bamboo may be preferred to vegetation that could be handled or processed for consumption. Component 3 includes outreach activities to ensure that community members, especially women, can benefit from education and awareness about the negative effects of mining pollution on water and health. The ESMF has been updated to provide a procedure on how contaminated sites will be reclaimed to avoid adverse impacts on people and the environment. 114. The original ENFAL project has benefited from parallel environmental and social assessments and due diligence developed under the FCPF support to the REDD+ Readiness Process, including development of a Social and Environmental Strategic Assessment (SESA) that has identified possible social and environmental risks. The FIP ESMF, Pest Management Plan (PMP) and Process Framework (PF) identified specific safeguard activities, roles and responsibilities, capacity building and budget requirements. The ESMF and PF have been updated to include the new areas that have been added in this AF. The update provides for a revised budget incorporating the capacity building needs of the additional implementation agencies. 115. The updated PF continues to be applicable to project activities that impose restriction on access to forests areas including the historically admitted farms. On the other hand, the new activities to be undertaken under the AF on degraded land on mined-out sites will be clearly marked out and mitigation measures have been developed to address any potential social risks and impacts identified in the ESMF. The criteria for the selection of project sites for plantation development in mined-out sites will be discussed in a participatory manner with the local communities to ensure that these lands are abandoned and not currently under any use, since they would have been degraded by the illegal mining activities and may be contaminated. To that extent, it is envisioned that the rehabilitation of tree plantations on such lands would not result in restriction nor access to the use of the land. Potential social risks and impacts that may be identified would be mitigated by appropriate measures in the ESMF. 116. The following safeguard policies remain applicable to this AF. • Environmental Assessment OP/ BP 4.01. The project will continue to engage in many activities that use forest resources in selected sites and potentially impact other environmental areas. However, key to the AF is the rehabilitation of degraded areas as a result of artisanal mining. Due to the general processing methods used by artisanal miners, additional land pollution risks with chemicals such as mercury and arsenic have been further elaborated in an updated ESMF to provide for testing of areas to be rehabilitated. The updated ESMF has been consulted upon and disclosed in-country on January 28, 2019 and cleared and disclosed by the World Bank on January 17, 2019. • Natural Habitats OP/BP 4.04. The project activities within the AF will still involve forest areas which may contain critical ecosystems; the project will enhance the quality of the management of these critical ecosystems and reduce risks associated with cocoa production, degraded land restoration and other agroforestry practices. The updated ESMF provides guidance on avoiding or mitigating impacts on natural habitats. • Forests OP/BP 4.36. Forest policy and management are a primary focus of this project, in addition Page 41 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) to trees in the agroforestry landscape. The project will explore integrated and participatory forest management as part of a strategy of storing carbon through sustainable forest management. The ESMF includes guidance on managing forestry issues. • Pest Management OP 4.09. The project will not directly finance the use of pesticides but will promote integrated pest management (IPM) to minimize risks to human health and the environment, particularly in situations when pesticide is used for project activities such as promotion of suitable food crops as part of degraded landscape activities. The project-specific PMP has been updated based on this background and the potential crops to be promoted, to ensure that the project does not increase the environmental impacts of pesticide use, and where possible these are managed responsibly, in line with sound environmental and human health protection objectives. The PMP was disclosed in-country on January 28, 2019 and was disclosed by the World Bank on January 17, 2019. • Physical Cultural Resources OP/ BP 4.11. The ESMF and PF incorporate screening to ensure that the project would not have any negative impact on sacred sites. Decisions on pilot activities will be made in consultation with local communities; the location of sacred sites is local knowledge and rarely (if ever) documented or mapped. Screening of sites for pilot activities will include specific screening under the ESMF to avoid adversely affecting physical cultural heritage, such as sacred groves. • Indigenous Peoples OP/BP 4.10. Based on portfolio review, previous experience, and World Bank guidance, this policy is not triggered for projects in Ghana. • Involuntary Resettlement OP/BP 4.12. No involuntary resettlement is anticipated as a result of activities undertaken under the AF. However, as part of the plans for ensuring forest reserves are protected and mined-out sites are restored through investment in tree planting and other rehabilitation activities, these activities may reduce or restrict access to locations or resources by community members. The reclamation of mined-out sites, including regrading and replanting, for example, may have adverse impacts on livelihoods. Livelihoods may be restricted by the introduction of new land uses (e.g., stream banks, timber plantations) or by the introduction of remedial actions or regulations on for example, space needed for water treatment / settling needs, or restrictions on activities due to contamination. These restrictions of access will be negotiated with farmers through consultative processes, and alternative livelihoods support, and other inputs and incentives will be offered to increase agricultural productivity. Similarly, use and access to resources may be restricted due to changes in forest management, delineation of boundaries and resource management plans, including those developed voluntarily by CREMAs. A Grievance Redress Mechanism has been set up under the FIP ENFAL project and will continue to be improved for more functional application in collaboration with the communities to provide avenues for complaints redress and social accountability. These activities will be guided by the PF to ensure participatory processes are incorporated into resource management plans and appropriate alternative livelihood support. The updated PF has been consulted upon and disclosed in-country on January 28, 2019 and by the World Bank on January 17, 2019. 117. Recipient’s Institutional Capacity. The GoG has gained significant experience in implementing projects that are similar to this project using the World Bank safeguards instruments. Since the thematic areas Page 42 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) under the proposed AF are similar to the original project and past projects, the team is confident that the Government has the appropriate capacities to properly prepare and enforce the safeguard instruments prepared for the project. The MLNR, the main implementing agency, will regularly conduct safeguard capacity building activities at the district levels. Since the AF will be implemented within the same Ministry, it would benefit from existing experience and knowledge transfer from the main FIP project. The MC, being introduced under this AF, already has experience with the implementation of other World Bank projects. EPA will be instrumental in developing regulations and standards to address adverse impacts of artisanal mining. However, to bridge any capacity gaps and to ensure consistency in knowledge across the implementing agencies, the World Bank will continue to provide guidance and training on safeguards policies and procedures to key project staff during implementation to ensure the project is in compliance with safeguards requirements. 118. The safeguards policies that are triggered under the original project are relevant for the AF activities and no new safeguards policies are triggered under this AF. However, because of the additional activities under the AF, the existing safeguard documents (ESMF, PF and PMP) have been updated and re-disclosed both in-country (on January 28, 2019) and by the World Bank (on January 17, 2019). To describe these changes, the integrated safeguards datasheet (ISDS) was also updated and re-disclosed, which is why “Safeguards policies triggered” under section VI (summary table of changes) below, is checked as “changed”. V. WORLD BANK GRIEVANCE REDRESS 119. Communities and individuals who believe that they are adversely affected by a World Bank (WB) supported project may submit complaints to existing project-level grievance redress mechanisms or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of WB non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/en/projects-operations/products-and-services/grievance-redress-service . For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org Page 43 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) VI. SUMMARY TABLE OF CHANGES Changed Not Changed Project's Development Objectives ✔ Results Framework ✔ Components and Cost ✔ Loan Closing Date(s) ✔ Safeguard Policies Triggered ✔ Procurement ✔ Implementing Agency ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ EA category ✔ Legal Covenants ✔ APA Reliance ✔ Other Change(s) ✔ VII. DETAILED CHANGE(S) PROJECT DEVELOPMENT OBJECTIVE Current PDO The Project Development Objective is to improve forest and tree management practices by cocoa farmers, CREMA communities andforest reserve managers to reduce forest loss and degradation in selected landscapes in Ghana's High Forest Zone. Page 44 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) The overall goal of FIP-financed activities in Ghana is to reduce GHG emissions from deforestation and forest degradation, whilereducing poverty and conserving biodiversity. Proposed New PDO To improve forest and tree management practices by cocoa farmers, CREMA communities and forest reserve managers to reduce forest loss and degradation and demonstrate rehabilitation of mined-out sites in selected landscapes in Ghana's High Forest Zone (HFZ). COMPONENTS Current Component Name Current Cost Action Proposed Component Proposed Cost (US$, (US$, millions) Name millions) Component 1. Policy 3.00 Revised Component 1. Policy 5.00 Reforms and Institutional Reforms and Strengthening Institutional Strengthening Component 2. Pilot 22.94 Revised Component 2. Pilot 38.44 Investments for Improved Investments for Forest and Landscape Improved Forest and Management with Landscape Management Communities with Communities Component 3. Innovation, 2.80 Revised Component 3. 3.80 Capacity Building, and Innovation, Capacity Communications Building, and Communications Component 4. Project 3.76 Revised Component 4. Project 4.76 Management, Monitoring, Management, and Coordination Monitoring, and Coordination TOTAL 32.50 52.00 LOAN CLOSING DATE(S) Ln/Cr/Tf Status Original Closing Current Proposed Proposed Deadline Closing(s) Closing for Withdrawal Applications TF-18842 Effective 30-Jun-2020 30-Jun-2020 30-Jun-2023 30-Oct-2023 Page 45 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Expected Disbursements (in US$) DISBURSTBL Fiscal Year Annual Cumulative 2015 54,834.92 54,834.92 2016 1,028,232.31 1,083,067.23 2017 1,786,012.90 2,869,080.13 2018 2,250,674.86 5,119,754.99 2019 2,865,202.13 7,984,957.12 2020 2,983,927.10 10,968,884.22 2021 2,855,584.69 13,824,468.91 2022 3,067,847.02 16,892,315.93 2023 2,497,684.07 19,390,000.00 2024 0.00 19,390,000.00 SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Latest ISR Rating Current Rating Political and Governance  Substantial  Moderate Macroeconomic  Substantial  Moderate Sector Strategies and Policies  Low  Substantial Technical Design of Project or Program  Moderate  Moderate Institutional Capacity for Implementation and  Moderate  Substantial Sustainability Fiduciary  Moderate  Substantial Environment and Social  Substantial  Substantial Stakeholders  Moderate  Substantial Other Overall  Moderate  Substantial Safguard_Table Page 46 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) COMPLIANCE Change in Safeguard Policies Triggered Yes Safeguard Policies Triggered Current Proposed Environmental Assessment OP/BP Yes Yes 4.01 Performance Standards for Private No No Sector Activities OP/BP 4.03 Natural Habitats OP/BP 4.04 Yes Yes Forests OP/BP 4.36 Yes Yes Pest Management OP 4.09 Yes Yes Physical Cultural Resources OP/BP Yes Yes 4.11 Indigenous Peoples OP/BP 4.10 No No Involuntary Resettlement OP/BP 4.12 Yes Yes Safety of Dams OP/BP 4.37 No No Projects on International Waterways No No OP/BP 7.50 Projects in Disputed Areas OP/BP 7.60 No No LEGAL COVENANTS2 LEGAL COVENANTS – Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Sections and Description The Recipient shall, by no later than six (6) months after the date on which this Agreement becomes effective, appoint and maintain at all times during the implementation of the Project, external auditors with qualifications, experience and under terms of reference satisfactory to the World Bank, and in accordance with the provisions of Page 47 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Section III of Schedule 2 to this Agreement. (Grant Agreement, Schedule 2, Section II, B, 4) Conditions Type Description Effectiveness The Recipient has adopted and submitted to the World Bank, an updated version of the Project Implementation Manual, in form and substance satisfactory to the World Bank (Grant Agreement, Article 4, 4.01(a)) Type Description Effectiveness The SCF FIP Loan Agreement has been signed and delivered by the parties to said agreement, and all conditions precedent to its effectiveness (other than the fulfillment of effectiveness of this Agreement) have been fulfilled (Grant Agreement, Article 4, 4.01(b)) Type Description Effectiveness The Recipient, through a counsel satisfactory to the World Bank, has issued a legal opinion satisfactory to the World Bank, stating that this Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, the Recipient and is legally binding upon the Recipient in accordance with its terms (Grant Agreement, Article 4, 4.01(a); Article 4, 4.01(b); Article 4, 4.01(c)) Type Description Disbursement Under Category (5) until the Borrower has submitted evidence satisfactory to the World Bank showing that: (i) the CLOM has been issued; (ii) the Participation Agreement has been executed; and (iii) a legal opinion has been issued by the Borrower stating that the Participation Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, the Borrower and is legally binding upon the Borrower in accordance with its terms (Loan Agreement, Schedule 2, Section IV, B, 1(b)) Page 48 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) VIII. RESULTS FRAMEWORK AND MONITORING Results Framework COUNTRY: Ghana Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project Project Development Objective(s) To improve forest and tree management practices by cocoa farmers, CREMA communities and forest reserve managers to reduce forest loss and degradation and demonstrate rehabilitation of mined-out sites in selected landscapes in Ghana's High Forest Zone (HFZ). Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_T BL_ PD O Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 Improved forest and tree management practices in selected landscapes in Ghana's High Forest Zone People in forest&adjacent community with monetary/non-monetary 0.00 45,000.00 106,000.00 106,000.00 benefit from forest (Number) Action: This indicator has been Revised People in forest and adjacent community 0.00 27,000.00 53,000.00 53,000.00 with benefits from forest-female (Number) Page 49 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) RESULT_FRAME_T BL_ PD O Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 Action: This indicator has been Revised Area under improved CREMA management or climate smart cocoa management practices in 0.00 0.00 10,000.00 40,000.00 50,000.00 50,000.00 80,000.00 targeted landscapes due to Project intervention (Hectare(Ha)) Action: This indicator has been Revised including under climate smart cocoa 0.00 0.00 10,000.00 20,000.00 30,000.00 40,000.00 40,000.00 management practices (Hectare(Ha)) Action: This indicator has been Revised including under CREMA management 0.00 0.00 10,000.00 40,000.00 50,000.00 50,000.00 80,000.00 (Hectare(Ha)) Action: This indicator has been Revised Direct project beneficiaries (Number) 0.00 2,110.00 4,352.00 6,711.00 9,180.00 12,501.00 12,501.00 Action: This indicator has been Revised Female beneficiaries 0.00 45.00 46.00 47.00 49.00 50.00 50.00 (Percentage) Page 50 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) RESULT_FRAME_T BL_ PD O Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 Action: This indicator has been Revised Reduced forest loss and degradation in selected landscapes in Ghana's High Forest Zone Area of forest in targeted 303,885.00 374,121.00 412,064.00 417,518.00 landscapes (Hectare(Ha)) Action: This indicator has been Revised including closed forest 132,312.00 135,818.00 139,298.00 139,298.00 (Hectare(Ha)) including open forest 171,573.00 238,303.00 272,765.00 278,220.00 (Hectare(Ha)) Action: This indicator has been Revised Total greenhouse gas emissions reductions plus enhancement of carbon stocks, estimated in millions 0.00 483,349.00 1,038,262.00 4,628,548.00 tons equivalent CO2e/year (Metric ton) Action: This indicator has been Revised including greenhouse gas emission reductions - closed forest (Metric 0.00 247,937.00 973,322.60 973,322.60 ton) Page 51 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) RESULT_FRAME_T BL_ PD O Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 Action: This indicator has been Revised including greenhouse gas emission reductions - 0.00 112,262.00 2,279,534.39 2,279,534.39 open forest (Metric ton) Action: This indicator has been Revised including enhancement of carbon stock - closed 0.00 34,150.00 50,620.00 50,620.00 forest (Metric ton) Action: This indicator has been Revised including enhancement of carbon stock - open 0.00 89,000.00 1,375,691.00 1,375,691.00 forest (Metric ton) Action: This indicator has been Revised Demonstrated rehabilitation of mined-out sites in selected landscapes in Ghana's High Forest Zone (Action: This Objective is New) Number of mining sites that have been rehabilitated 0.00 5.00 (Number) Action: This indicator is New PDO Table SPACE Page 52 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Intermediate Results Indicators by Components RESULT_FRAME_T BL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 Component 1. Policy Reforms and Institutional Strengthening Reforms in forest policy, legislation or other No Yes Yes Yes Yes Yes Yes regulations supported (Yes/No) Govt institutions provided w/ capacity buildg to 0.00 23.00 23.00 23.00 23.00 30.00 30.00 improve mgt of forest resources (Number) Action: This indicator has been Revised Component 2. Pilot Investments for Improved Forest and Landscape Management with Communities Community based natural resources management institutions provided with access to improved 0.00 0.00 1.00 3.00 5.00 5.00 5.00 management practices for sustainable landscape management (Number) Farmers / participants provided with capacity building support to improve management practices for 0.00 50.00 450.00 1,050.00 1,650.00 3,500.00 3,500.00 tree planting or nurseries (Number) Page 53 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) RESULT_FRAME_T BL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 Action: This indicator has been Revised including female (Number) 0.00 33.00 283.00 633.00 983.00 1,750.00 1,750.00 Action: This indicator has been Revised Area restored or 0.00 2,550.00 5,250.00 8,000.00 10,750.00 17,100.00 17,100.00 re/afforested (Hectare(Ha)) Action: This indicator has been Revised Area restored 0.00 2,500.00 5,000.00 7,500.00 10,000.00 12,500.00 12,500.00 (Hectare(Ha)) Area re/afforested (Hectare(Ha)) 0.00 50.00 250.00 500.00 750.00 4,600.00 4,600.00 Action: This indicator has been Revised Farmers / participants in targeted landscape corridors reporting satisfaction with service 0.00 25.00 325.00 725.00 1,125.00 6,500.00 6,500.00 delivery or benefits received under the Project (Number) Action: This indicator has been Revised including female 0.00 15.00 190.00 415.00 640.00 3,250.00 3,250.00 (Number) Page 54 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) RESULT_FRAME_T BL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 Action: This indicator has been Revised New areas outside protected areas managed 0.00 0.00 10,000.00 40,000.00 50,000.00 80,000.00 80,000.00 as biodiversity-friendly (ha) (Number) Action: This indicator has been Revised Component 3. Innovation, Capacity Building, and Communications Forest users trained 0.00 100.00 500.00 1,000.00 1,500.00 4,500.00 4,500.00 (Number) Action: This indicator has been Revised Forest users trained - Female (Number) 0.00 60.00 310.00 580.00 850.00 2,250.00 2,250.00 Action: This indicator has been Revised Government officials / extension agents and service providers trained 0.00 60.00 150.00 250.00 350.00 550.00 550.00 (Number) Action: This indicator has been Revised including agricultural / cocoa extension agents / 0.00 18.00 45.00 75.00 105.00 180.00 180.00 service providers (Number) Page 55 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) RESULT_FRAME_T BL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 Action: This indicator has been Revised including local government officials 0.00 6.00 15.00 25.00 35.00 70.00 70.00 (Number) Action: This indicator has been Revised including Forestry Commission staff 0.00 36.00 90.00 150.00 210.00 300.00 300.00 (Number) Action: This indicator has been Revised including female 0.00 18.00 48.00 85.00 126.00 220.00 220.00 (Number) Action: This indicator has been Revised IO Table SPACE Monitoring & Evaluation Plan: PDO Indicators Mapped Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection This indicator measures the National M&E People in forest&adjacent community extent to which local Field agents collecting system and Project Mid Term and with monetary/non-monetary benefit people have seen improved MLNR data Project Completion from forest livelihood as a result of the reports intervention. This may Page 56 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) cover both monetary income and non-monetary benefits like improved and easier access to fuelwood as well as cultural and spiritual services. The baseline value is expected to be zero. People in forest and adjacent community with benefits from forest- female Measures the area which, as a result of Bank project, has been brought under management by CREMA to protect and enhance Area under improved CREMA Project forests and trees in the Field agents collecting management or climate smart cocoa activity landscape. Includes area FC data Annual management practices in targeted reports, field for which certified cocoa landscapes due to Project intervention assessments management schemes have been prepared, endorsed and are also in the process of implementation. including under climate smart cocoa management practices including under CREMA management Direct beneficiaries are National M&E Field agents collecting Direct project beneficiaries MLNR Annual people or groups who system, data. Page 57 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) directly derive benefits project from an intervention. activity reports, field assessment Female beneficiaries Measures total area of forest in targeted landscapes including closed and open forest. The baseline is established based on the FPP data provided by the RMSC. The forest cover is expected to decrease during the Project Field agents collecting National MRV Project Mid Term and Area of forest in targeted landscapes period but to a lesser FC data. system Completion degree than in the without- project scenario. Ghana’s definition of forest is: as an area of land greater than or equal to 1.0 hectare, with more than 15% tree canopy cover and a minimum tree height of 5 meters at maturity. including closed forest including open forest Total greenhouse gas emissions Calculated from forest area National MRV MRV system Project Mid Term and FC reductions plus enhancement of carbon change, relative to 2012 system Completion Page 58 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) stocks, estimated in millions tons reference level based on equivalent CO2e/year Ghana’s REDD+ MRV system. including greenhouse gas emission reductions - closed forest including greenhouse gas emission reductions - open forest including enhancement of carbon stock - closed forest including enhancement of carbon stock - open forest National M&E system, Field agent collecting Number of mining sites that have been To a standard agreed with Annual project MLNR data. rehabilitated local stakeholders. activity reports ME PDO Table SPACE Monitoring & Evaluation Plan: Intermediate Results Indicators Mapped Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection National M&E system, Reforms in forest policy, legislation or MLNR project Annual other regulations supported activity reports Page 59 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) The Government institutions targeted include: MLNR, FC, FORIG, COCOBOD, MESTI, EPA, MOFA, MOF, MOLRG, Project Field agents collecting Govt institutions provided w/ capacity Ministry of Mining, 6 MLNR activity data. Annual buildg to improve mgt of forest resources District Assemblies in reports Western Region and 8 District Assemblies in Brong-Ahafo Region Community based natural resources Project management institutions provided with activity access to improved management FC Annual reports, field practices for sustainable landscape assessments management Measures capacity building efforts aimed at improving skills in plantation development, tree establishment and nursery Farmers / participants provided with Project supply and management. Field agents collecting capacity building support to improve activity Training needs to be FC data. Annual management practices for tree planting reports, field targeted to specific or nurseries assessments audiences, not general awareness campaigns. Do not double count same individuals participating in a series of training events. Page 60 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) including female There was an error in defining the target for the sub-indicator on Area FC / FSD Activity Area restored or re/afforested re/afforested. This has District reports, field Annual been corrected to read a Offices assessments target of 1,000 ha. Area restored Area re/afforested Farmers / participants in targeted Periodic landscape corridors reporting satisfaction At Project Mid Term and MLNR community with service delivery or benefits received Completion level surveys under the Project including female This indicator measures the number of terrestrial hectares outside protected Project areas where, as a result of Field agents collecting New areas outside protected areas activity the World Bank operation, FC data. Annual managed as biodiversity-friendly (ha) reports, field the site is managed at least assessments in part to obtain biodiversity gains. This measures the number Training Field agents collecting Forest users trained of forest users and FC Activity data Annual community members that Completion Page 61 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) have received capacity Reports building through training as a result of the project. The baseline value is expected to be zero. Forest users trained - Female Measures capacity building efforts aimed at strengthening government officials and extension agents to improve service Training Field agents collecting Government officials / extension agents provision and community MLNR, FC, activity data. Annual and service providers trained relations / responsiveness. COCOBOD completion Training needs to be reports targeted to specific audiences, not general awareness campaigns. including agricultural / cocoa extension agents / service providers including local government officials including Forestry Commission staff including female ME IO Table SPACE Page 62 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Page 63 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Annex 1: Project Cost and Financing Breakdown GHANA FIP ENFAL AF (P163745) - US$ 19.39 million Financing Breakdown with Original FIP ENFAL (P148183, TF18842) Additional Finance from Strategic Climate TOTAL Existing Fund (SCF) Sources GoG In Proposed AF Activities ENFAL Grant for Concessional Grant for Kind Mining Finance for Plantation Reclamation Plantations TA Component 1: Policy reforms 2,500,000 500,000 2,000,000 5,000,000 and institutional strengthening Comp. 2: Pilot Investments for Improved Forest and Landscape 20,935,000 2,000,000 22,935,000 Management with Communities Comp 2a. Pilot demonstration of clean up and reclamation practices with community 5,500,000 5,500,000 livelihood support after forest and land degradation due to illegal ASM Comp 2b. Pilot for incentivizing investment and 7,000,000 7,000,000 local level job creation in timber plantations Comp. 2c. Field Activity Monitoring and Technical 2,885,000 2,885,000 Assistance Comp 3: Innovation, capacity 2,600,000 200,000 1,000,000 3,800,000 building, and communications Comp 4: Project management, 3,465,000 300,000 1,000,000 4,765,000 monitoring, and coordination TOTAL 29,500,000 3,000,000 9,500,000 7,000,000 2,885,000 51,885,000 Page 64 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Annex 2. Detailed Project Description 1. The Project Development Objective (PDO) will become the following (with changes in boldface): to improve forest and tree management practices by cocoa farmers, CREMA communities and forest reserve managers to reduce forest loss and degradation and demonstrate rehabilitation of mined-out sites in selected landscapes in Ghana's HFZ. 2. The ultimate project beneficiaries of this operation are the rural communities (current and future generations) in the target regions who are currently being affected by the environmental damage and pollution associated with illegal ASM practices. Community members engaged in ASM, including women, will gain access to greater awareness of risks, as well as new skills and economic opportunities through pilot rehabilitation activities at inactive mining sites, including opportunities created by tree planting and plantation establishment. Plantation establishment in nearby areas will further help to create jobs for community members, contribute to knowledge sharing and uptake, increase awareness of sustainable forestry management practices, and increase opportunities for promoting positive private sector contributions to Ghana’s overall REDD+ effort. In the HFZ, the proposed activities will contribute to reducing pressure on high biodiversity areas. Through replication and up-scaling of lessons from pilot sites, communities, landowners, farmers and cocoa growers could gain through reduced impact of mining activities on production systems, as well as improvement of their local environment. MLNR, FC, EPA, and MC, charged with forest, landscape and mining management, will also benefit from clarified policies and guidance, capacity development programs, and outreach programs. Other stakeholders, including the private sector and civil society, will benefit through improved stewardship of land, plus outreach activities. 3. Project Components. The Ghana FIP has four components: 1) Policy Reforms and Institutional Strengthening; 2) Pilot Investments for Improved Forest and Landscape Management with Communities; 3) Innovation, Capacity Building; and Communications; and 4) Project Management, Monitoring and Coordination. The proposed AF will follow the same structure. 4. Component 1: Policy reforms and institutional strengthening (US$2.00 million SCF grant). This AF will expand support for strengthening institutional coordination across a wider array of central, regional and local government agencies. This will particularly include the MC and the Ministry of Environment, Science, Technology and Innovation (MESTI), which has a leadership role in the effort to control destructive mining practices, as well as the EPA, which has a key role in setting standards for reclamation activities, controlling water pollution and toxic materials associated with all types of mining. The Ministry of Chieftaincy and Traditional Affairs, local chiefs and traditional authorities, and District Assemblies will need to be more proactively engaged in addressing ASGM issues at the local level. Legal analysis and policy development will specifically look at putting in place a policy on mined-out lands; standards and guidance for mine site rehabilitation (based on international good practices); and systems and capacity at national, regional and local level to sustainably protect rehabilitated sites. These institutional capacity building activities will engage relevant institutions, develop and disseminate guidance, and build capacity at national, regional and local level to sustainably regulate and manage ASGM and protect rehabilitated sites. Institutional strengthening activities will include improved information exchange and coordination across institutional mandates, for example, of FC, MC, EPA and district authorities. This can improve mine siting decisions and contribute to a more transparent and collaborative licensing process. Page 65 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) 5. The AF will support additional analytical and policy studies that aim to assess the magnitude and geographic spread of ASM impacts on forest and draw lessons from previous and existing activities/strategies – including those of legally operating firms – with regards to rehabilitation and restoration of mines-out sites. Based on this, guidance will be developed for practitioners on the ground, taking a multi-stakeholder approach. Policy and guidance development will have opportunities to collaborate with and learn from several projects and partners working toward similar goals (see Annex 6). It is important to mention that the GoG under the Natural Resource and Environmental Governance Technical Assistance Project (P129769) has developed an ASM Framework (2015) and several studies on alternative livelihoods and on rehabilitation costs. Also, the GoG and the World Bank are developing a Global Environmental Facility (GEF)-financed regional project for Reducing environmental health risks in artisanal gold mining and e-waste in Ghana (GEF Program ID: 9444) and expected to be approved in October 2019. This AF will support workshops and dialogue platforms to ensure the widespread understanding and uptake of these technical learnings and analytical results to address the environmental footprint of ASGM. 6. Component 2a. Pilot demonstration of clean up and reclamation practices with alternative livelihood support after forest and land degradation and loss due to ASM (US$5.50 million SCF grant). This pilot activity aims to reclaim and rehabilitate mined-out areas in selected sites as localized demonstrations of appropriate technical approaches, analysis and testing technologies and policies, and clean up / reclamation practices. Selected sites will undergo detailed sampling and testing for contaminant presence (including on potential backfill material) before design of interventions at each site. Interventions will include rehabilitation of degraded land and river banks, remediation and clean-up of contaminated sites, and restoration of vegetation to reclaimed areas. Activities will be targeted to inactive illegally mined areas in Tarkwa and Bibiani Forest Districts in the Western Region and Begoro and Kade Forest Districts in the Eastern Region. These four districts were chosen to represent a geographic diversity of sites and a range of reclamation issues and local socio-economic conditions. 7. This proposed activity is coordinated with a larger GoG initiative to halt and reverse the destructive activities associated with illegal ASM sites. Beyond the initial enforcement campaign and ban on small scale mining, the GoG’s Multilateral Mining Integrated Programme (MMIP) has a longer-term forward plan to shift incentives, consolidate ASM locations, regulate mining better, and engage communities in more sustainable livelihood alternatives. The proposed activities in this package will be implemented and integrated within this larger governance framework fully coordinated with MESTI and MLNR leadership of the MMIP. Activities financed under Component 1 will engage relevant institutions, conduct policy analysis, develop and disseminate guidance, and build capacity at national, regional and local level to sustainably control illegal artisanal mining and protect rehabilitated sites. This investment is designed to develop lessons and successful models that can be scaled up and replicated. 8. Rehabilitation, in this document, means that a degraded and disturbed site is returned to a condition where pollutants and runoff are contained, and some economically productive activities can be pursued with minimal risk to site users. In 2016, the MC (with NREG TA support) prepared a study on the approaches and costs of old mine site rehabilitation.14 Rehabilitation includes a reclamation phase, with regrading of land and filling of 14 Reclamation/remediation plans for selected old Mining Sites with high risks of pollution in the Tontokrom Area of Amansie West District. Final Phase Four Report. SAL Consult Limited for the Minerals Commission and MLNR. Accra. December 2016 Page 66 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) pits, followed by a remediation or replanting phase (some details in Box 2.1). The MC report recommended “Phytoremediation” as a cost-effective approach that uses plants to remove, transfer, stabilize, or destroy contaminants in soil, sediments and groundwater. Bamboo, grasses, and rushes have been researched or successfully used in phytoremediation, per the MC report. Sites rehabilitated under this approach would not be suitable to grow edible crops but could be suitable for timber or bamboo plantings. The expected use of the land would have to be agreed upon by all stakeholders and the rehabilitation approach would be designed accordingly. 9. This component will finance the following approach and activities for the design and implementation of Box 2.1: Rehabilitation of Old Mining Sites rehabilitation interventions at specific sites: Reclamation Phase (Engineering Works) - Clearing of access roads  Site selection and characterization for clean-up will - Dewatering & Backfilling of pits include mapping, prioritization and - Hauling of additional fill materials characterization of mining degradation in forest - Topographic survey/Leveling reserves and cocoa landscapes in the HFZ. This will - Trimming of drainage channels include site sampling and assessment of potential - Preparation of reclaimed land clean up approaches and techniques,15 which will - Maintenance and monitoring of rehabilitated lands inform site-specific rehabilitation plans. Early assessments have been initiated with results Replanting Phase (Phytoremediation) reported below. - Demarcation of contaminated zones - Design of appropriate phytotechnology options  Community engagement in planning and - Implementation of phytotechnology in all mediums preparation. The AF will support assessments and (soil and water) stakeholder consultations on issues related to site - Maintenance and monitoring of rehabilitated areas selection, land status and suitable land uses, and / plantings complementary livelihood activities with a focus on gender issues and the potential differential uses of the site and replanted areas by men and women. It will finance engagement with local and traditional authorities and land use planning processes to improve district government collaboration with communities on forest and land protection. Training will be provided for communities, including miners, and local governments on responsible management and protection of reclaimed areas.  Clarification of legal status in advance of implementation. An important aspect of site selection will be to consult and agree on basic principles and legal status of the land in advance of implementation of rehabilitation. This may require negotiation and resolution of land use and ownership claims in advance of spending public funds. Agreements reached with local assemblies, traditional authorities, land owners, land users and local communities should specify outcome and benefit sharing arrangements for the sites and the rehabilitated resources after the reclamation. Public funds should support rehabilitation in areas that enjoy wide public support and wide sharing of benefits.  Community engagement in implementation will create opportunities for local people, men, women, youth, and Community Resource Management Area (CREMA) members in reclamation activities, using appropriate land contouring and replanting approaches. Replanting efforts will consider appropriate crops 15 Through a collaboration with the Pollution Monitoring and Environmental Health Trust Fund program on Contaminated and Toxic Land Pollution, the World Bank team will access resources for a Rapid Screening Assessment that will help to help identify and characterize up to 100 contaminated sites, in collaboration with Ghanaian institutions. Page 67 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) and materials after analysis of site contamination requirements and the need to avoid uptake in potential food crops. Use of climate-smart agriculture or restoration of cocoa plantations may not be appropriate in some cases. Species to be used will be selected on the basis of their ability to grow fast and rehabilitate mined out sites, with a preference for native species, and in accordance with the World Bank safeguards.  Alternative livelihood activities will be supported through engagement with communities, particularly miners, to identify suitable and beneficial alternative livelihood activities that can complement reclamation efforts.16 Women’s participation is essential to the development of alternative livelihood activities. Women and men will have different preferences over which livelihood activities are offered as alternatives to engagement in mining. Women will benefit from awareness and outreach about the negative effects of mining pollution on water and health. The parent project has already communication and outreach activities designed to facilitate knowledge sharing and replication. Livelihood support would be designed in collaboration with community members and could include nursery stock for timber and bamboo planting, value added processing and sale of more beneficial natural resource products, equipment rental and operation for land contouring, monitoring and patrols to prevent re-entry into reclaimed sites (see Component 2b).  Private sector will be engaged for lessons. Engagement with legally operating small- and large-scale mining operations will help to generate support, understanding of incentives, lessons on good practices from existing sites, technical assistance and potential visits to demonstration sites. Specific activities will learn from and be developed in collaboration with projects and partners that are already engaging in this area. Annex 8 provides some examples of organizations and their work. Implementation will be combined with effective engagement of land owners, traditional authorities, mine managers and workers, and community members.  Guidance on improved practices and promotion of replication. The AF will finance development and roll out of guidance materials on site assessment, clean up / reclamation approaches and success stories, as well as the preparation and studies needed in advance of reclamation efforts. The MC has already developed an ASM Framework (2015) and benchmarking studies that can form the base for more locally oriented guidance. The AF will support site visits, media engagement and outreach activities to ensure that successful small-scale demonstrations are used to influence policy makers, resource allocators, and local land use decision makers. These efforts will be supplemented with communication and awareness raising activities financed under Component 3. 10. Screening criteria for selection of mined-out sites for rehabilitation will seek to identify sites with inactive operations, near Forest Reserves or water bodies, with clear legal status, no existing plans for reclamation and local communities willing to participate in reclamation. Strength of local institutions including both traditional and District Assembly and proximity of potential partner institutions (training, service delivery) will also be considered. Site selection will be further informed by the results of an assessment and case studies, which are further described below. 11. Theory of change. The transformative nature of this activity is to provide positive demonstrations of the potential for local community action (with technical and scientific support) to reclaim and rehabilitate locally affected sites and waterways following the destructive impacts of ASGM/ galamsey. The siting of these pilots, 16 Proposed activities will draw on the surveys and assessments on Alternative Livelihood Programs in Mining Communities conducted by MC under the NREG TA (June 2016). Page 68 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) the lessons learned, and the outreach activities aim to promote replication and scale up with non-FIP resources. If successful, these demonstrations will influence wider scale Government-driven, locally-owned interventions, with support from the MMIP, and potentially other development partners. The AF interventions, albeit on a small scale, will help to show the uses of alternative livelihoods, reduce environmental risks in target mined-out areas and support communities to engage in more sustainable forest and land management, which will enhance carbon stocks. Land reclamation has the potential to create sustainable local economic opportunities through production of timber, bamboo and other fast-growing species, along with the nurseries that support them, which will help to diversify livelihoods away from illegal ASM at those sites. Local communities will benefit from improved ecosystem services, through soil stabilization, erosion control, and increase in biodiversity. Rehabilitation co-benefits include reduced erosion of riverbanks, sediment pollution of waterways, use and release of toxic materials into the environment, reduced human health effects in reclaimed areas, reduced impact of sediment and pollution on aquatic species, and improved recognition of the rule of law, as well as awareness of the long-term detrimental effects of destructive mining practices. 12. The demonstration sites should become focal points for learning-by-doing as part of an effort to promote wider replication and scale-up to other degraded, mined-out areas across Ghana. Increased community engagement and activity in these areas – plus involvement of the traditional authorities and negotiated agreements about the legal uses of the reclaimed land – should also serve as a buffer to further illegal degradation practices and re-entry for mining or other encroachments. These demonstrations and knowledge transfers will also inform and involve local officials, traditional authorities and regulators, who will learn practical approaches, and inform national authorities who will be improving guidelines and policies under Component 1. 13. Assessment study. To support preparation of this operation, the MLNR commissioned an assessment17 of illegally mined areas in the four target regions. The study confirmed the approaches proposed in this AF and contributed to the design of activities recommended for implementation at selected sites. The assessment mapped the areas, examined and characterized the degraded sites, conducted sampling and analysis for key contaminants (i.e., Mercury, Arsenic and Cadmium), conducted consultations with nearby stakeholders and communities, developed and costed reclamation approaches for several example sites. 14. Assessment results. A total of 18,863 ha of mine-degraded areas were found in the four forest districts, including both legal concessions and illegal sites. The assessment identified 22 illegally-mined sites in the four forest districts and screened these down to 8 sites (with estimated area of 1,465 ha) as potential pilot sites for implementation of reclamation activities. Criteria for site selection were noted above. Through consultations, nearby communities affirmed willingness to participate and traditional leaders committed to institute measures to protect the reclaimed lands, including forming a local task force. The study identified four main pollution concerns in areas degraded by (illegal, alluvial) ASM: high turbidity, oil and grease, arsenic and mercury. The assessment conducted limited laboratory analysis on water, soil and sediment samples, 17 Scoping Study of the Potential of Reclamation of Mined-Out Areas in Forest Landscapes - Eastern & Western Region. Final Report. Traffic & Environmental Network, Tema-Accra. Commissioned by MLNR/GFIP. September 2018. Page 69 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) which showed heavy metal levels within available guideline values18, though the water samples had higher electrical conductivity than Ghana EPA guideline value. 15. Cost estimate. Based on literature values and independent estimates, plus the experience of mining companies, and the engagement of community labor in some activities, the assessment study produced an itemized reclamation cost estimate that comes to US$6,450 per hectare on average for all the interventions in all sites and districts. This rehabilitation cost estimate included filling of open pits and holes; housekeeping and general clean-up of sites; salvaging of abandoned heavy-duty equipment; characterization of site geochemistry; pumping and treatment of polluted waters; phytoremediation of affected land and wetlands; revegetation of disturbed areas with native, non-edible plants; and monitoring of surface water quality, rehabilitated sites and maintenances of facilities until parameters meet the Ghanaian EPA and Best Management Practices. The bulk of the cost (84 percent) was for reclamation and restoration of land and river banks; 6 percent of the estimate was for remediation and cleanup of contaminated sites; 9 percent for maintenance and monitoring of revegetated lands; and 1 percent for sampling and laboratory analysis. Actual implementation costs will vary by site and local conditions. The number and extent of sites that can be targeted for intervention will be limited by the available GFIP AF budget for this component. Sites and associated activities will need to be chosen to maximize visibility and demonstration potential, so that these activities can lead to more support from communities, from district assemblies, from key government departments, and from other development partners who may be interested to take up and replicate successful models demonstrated under this project. 16. Community engagement and enforcement. The assessment also confirmed the need for continuous engagement with traditional authorities and community members to ensure that reclamation is carried out in a technically sound manner and that reclaimed lands are not encroached for any other purpose apart from project objectives. District Assembly can contribute by instituting by-laws and setting up community task forces to monitor and ensure compliance with site limitations. Concerned agencies of the Government (MLNR, FC, MC, EPA) would assist with legal guidelines, monitoring protocols, training, and law enforcement. Policy, monitoring, outreach and training activities in Component 1 will also contribute to improving mining practices and preventing encroachment into rehabilitated mining sites. The GoG has plans to further regulate, control and license ASGM, to reduce the impacts of illegal artisanal mining on forests, landscapes and watersheds. EPA and other regulators will be engaged to establish regulatory and monitoring approaches to transition artisanal mining to a more environmentally and socially acceptable form (outside the scope of this operation). 17. Component 2b. Pilot for incentivizing private investment and local job creation in timber plantations (US$7 million concessional loan). This pilot activity will provide financing and technical assistance to support plantation development by small and medium-scale plantation enterprises (SMPEs). SMPEs that access financing are expected to provide local employment for site preparation, nursery establishment, tree planting, plantation maintenance and other activities. Up to 2,000 seasonal jobs in local communities are expected to be generated, with up to half being women. Where feasible, the SMPEs will be located near mined-out site rehabilitation pilots as described in Component 2a above. Locating Pilot 2a and 2b pilots close by in the 18 This could be because inactive sites were selected; some contamination has been leached away by heavy rains; and because most soil samples were acidic, which does not support retention of metals Page 70 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) landscape will help to provide livelihoods support, increase engagement with communities and traditional land owners, and support productive enterprises for the medium term. 18. The financing provided can be used for a wide range of activities and will be complemented by technical assistance. These activities include: purchasing tree seedlings; business and marketing skills development; transport and delivery of the seedlings; training, tools and equipment for site preparation, planting/spacing, and care. Following the learning of the Uganda Sawlog Production Grant Scheme19 (SPGS), this activity will provide technical assistance to supplement the financial assistance. SMPEs will be selected based on criteria identified in the project’s operational manual and including technical and financial viability (independently assessed), level of interest, willingness, business model to promote local employment opportunities (targeting vulnerable groups and forest fringe communities) and to promote quality wood products for domestic markets (criteria to be further refined). SMPEs will have to demonstrate viable businesses based on financial assessment, business track record and due diligence by an independent financial assessment. SMPEs will be expected to comply with quality standards for seedlings used and stand maintenance practices, assessed through regular monitoring. 19. The financing mechanism and provision of technical assistance addresses specific needs identified during preparation and internationally accepted good practices on use of public credit lines. Analytical work undertaken during preparation confirms that SMPEs need long-term financing; entrepreneurial and business management training (e.g., book keeping, financial reporting); and technical and extension support. Other needs are being addressed under the FIP ENFAL policy component: clarification of processes for acquiring land for plantations on forest reserves; improving management of wildfires; simplification of the timber harvest permitting process; and guidelines for forest investors. The proposed financing mechanism recognizes past difficulties with SMPE loan schemes in Ghana and brings in lessons from other countries and studies.20 There is recognition of the need to select credit-worthy beneficiaries, build a history of loan performance success, and move from a culture of reliance on government grants to a system of using public funds to catalyze investment in productive forestry enterprises and repayment of funds that can continue to support the sector. 19 Lessons from Uganda’s SPGS. Under SPGS, plantation establishment and maintenance costs are partially reimbursed (50 percent) in staggered payments over the first two years. Payments are conditional on operator compliance with standards for tree seedling quality, maintenance and weeding. Operators are monitored closely and provided technical assistance to improve the chance of longer-term success. Commercial plantations supplied timber at a lower cost than illegally logged timber. Over time, SPGS built the confidence of the private sector and leveraged more investment, while also contributing to development of a modern, commercial timber subsector, with improved planting material, certified nurseries and contractors supplying forest advisory services (SPGS, 2014). 20 The design of the plantation financing approach was informed by recent analytical studies, including:  Market Oriented Forest SME Financing Feasibility Study, by CDC Consult for World Bank, October 2018.  Evaluation and Learning Partnership on Forest-Related Enterprises. Report by IIED/LTS under contract to the Climate Investment Funds Administrative Unit. Draft. Washington, DC. October 2018.  Ghana Private Equity and Venture Capital Ecosystem Study. Finance and Markets GP. World Bank. 2016.  Analysis of Forest Plantation Development Fund Operations on Plantation Development of PADO. Report by N. Tackie- Otoo, C. Baah and S. Asante for Private Afforestation Developers Organization. Accra. 2013. Page 71 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) 20. The financing mechanism will involve partnership between public and private sector institutions, building on the strengths of each to deliver services and manage risks. Based on analytical studies, consultant recommendations, and discussions among GoG institutions, the plantation financing mechanism is designed with the following features:  The MoF / Debt Management Department will ensure that the financial arrangements are in line with Ghana’s New Public Financial Management Act, 2016 (PFMA Act 921), including compliance with legal requirements and documentation, as well as repayment terms (interest rate and repayment period) that provide appropriate incentives to the SMPEs.  MLNR will provide overall management of the project and process, convening regular meetings of the partner organizations, managing procurement processes, and establishing and enforcing legal agreements that define the roles of the partners, including accountability clauses. MLNR will also provide outreach to the SMPEs intended as the primary beneficiaries of the financing and technical assistance.  The FC will provide technical expertise in forest plantation management through technical assessment, extension and advisory services. The FC will also monitor the technical performance of the SMPE loan beneficiaries in the field. The FC will receive project funds to support the delivery of these services.  A regulated, well performing financial institution will be selected competitively to manage the credit line. The project operational manual will provide detailed criteria for financial institutions that would be eligible to compete. Among others, the selected institution will need to be financially sound, compliant with regulatory requirements, and have expertise in credit/loan application appraisal, portfolio management, and client financial performance monitoring through assessment and advisory services. The financial institution will assess the creditworthiness of SMPEs, disburse funds to approved applicants, monitor the portfolio of loans, and take corrective actions, in case of default.  Among other factors, the competitive selection process would request the financial institutions to indicate their willingness to leverage the funds provided by the project, the expectation of credit-risk sharing by the project, and interest margin over the rate at which funds are made available to them.  However, the applicants will also need to meet the technical qualifications and to ensure this, the financial institution will coordinate closely with the project officials in MLNR and FC. Building the SMPE’s direct relationship with the financial institution has the potential co-benefit of addressing SMPE’s short term financing requirements (outside of the plantation financing facility).  Through regular meetings and coordination, MLNR and FC officials and representatives from the private financial institution will assess or provide inputs on the financial and technical eligibility / viability of SMPE loan applicants. Loan applications that are approved will result in a loan agreement/contract signed with the financial institution, indicating that the financial institution takes responsibility for diligently managing the loans and bears a substantial share of the credit risk. Not all applicants will be successful.  A key feature of the proposed financing mechanism is the linkage between the issuance of timber cutting permits by the FC and repayment of loan funds to the financial institution. This arrangement will be stipulated in the legal agreements signed with SMPEs. When cutting permits are issued, fees are paid to FC, and timber buyers would need to pay any outstanding loans to the financial institution before paying the SMPEs. This arrangement is expected to significantly enhance the assurance to a private financial institution that it can recover the loans made to SMPEs.  Pre-financing and post-financing business development services (e.g., training, coaching and business counselling) will be offered to SMPEs by a competitively selected service provider. The service provider will Page 72 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) be required to tailor services with the goal of helping SMPEs meet the technical and financial requirements necessary to allow the access and effectively utilize financing. This may include a role for the National Board for Small Scale Industries (NBSSI) and its Business Advisory Centers located in regions and districts. 21. To receive financing under the project, in addition to any agreements that may have to be signed with the financial institution, the SMPEs will also need to enter into agreements with the MNLR committing them to:  Receive technical management support and regular monitoring visits from FC to help in assuring successful plantation establishment (under Component 2c).  Develop a plantation management plan, a fire management plan, a plan for social and environmental safeguards and an estimate of employment generation potential. 22. Theory of change. Forest plantation development by private firms in Ghana has been constrained by a weak enabling environment and a poor investment climate, especially for small and medium plantation enterprises. The transformative nature of this activity is to stimulate private sector investment in tree planting which will in turn create employment for local communities and timber supply for local markets. It will also empower communities to engage in local timber production and processing. Components 2b and c will reduce pressure on natural forests, create alternative livelihood options, rehabilitate degraded landscapes and sequester carbon. This activity supports and operationalizes the GoG’s plans to augment the legal, sustainable supply of timber through a plantation development program, which aims to enhance and promote private sector investments. It also helps to demonstrate an approach to promote SME investment in plantations, which has been constrained by a weak enabling environment and a poor investment climate. In addition to direct employment generation, plantation development has the potential to generate local economic opportunities through seedling production and service delivery or out-grower arrangements. Local government, traditional authorities and the state will benefit from increased revenue, as well as increased economic activity and business opportunities. Ecosystem services will be enhanced also, especially when plantations are located as part of a natural and planted forest mosaic, with enrichment planting of indigenous species under the original ENFAL project. 23. Component 2c. Field Activity and Technical Assistance (US$2.8921 million SCF grant). This sub-component will finance technical assistance and follow up to ensure that investments, FM, and plantation maintenance remain on track during the loan period. Technical assistance activities will focus on advising on tree planting and nurturing techniques, business planning and FM and reporting, species selection, mapping and land titling services. The FC and a partner financial institution will provide the technical assistance and may draw on the work of service delivery organizations such as Solidaridad, IIED, NCRC, the IDH, and the National Board for Small Scale Industries (NBSSI), a GoG agency providing technical assistance to small businesses. Training and assistance for SMPEs will draw on established certification standards and systems that are operating in Ghana and accepted in timber markets. 24. The activities will include mobilization of community members (in targeted, degraded, mined-out areas) to engage in planting of economic trees and plants (possibly including indigenous bamboo) that can contribute to short-term livelihoods, longer-term economic options, landscape restoration, and soil/stream bank 21 This activity is noted separately to indicate the different forms of financing available in this tranche of FIP financing, which includes both grants and concessional finance. Page 73 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) stabilization. Support may also include local livelihood opportunities, including (carefully selected) crops that can be grown within plantation systems at the early planting stage before the canopy closes (in Ghana this practice is well established and referred to as the Modified Taungya System). Community members engaged in agricultural production where plantations are being established help with weed control around the tree seedlings. The agricultural products also provide an early income source in advance of the first thinning and timber harvest. For communities organized into CREMAs, support may include technical assistance in business planning for value addition so that the tree/timber output is eventually used efficiently to contribute to local economic development (processing of timber into sawn wood, poles, building components and other value added/downstream markets). 25. Component 3: Innovation, capacity building, and communications (US$1.00 million SCF grant). Following the structure of FIP ENFAL, this AF will expand support for communication, outreach and regular reporting on trends and results of the activity by MLNR to coordination bodies and higher authorities engaged in the MMIP implementation and follow on planning, including MESTI, EPA, MC and others. It will support scaled up communication and outreach activities to engage communities and miners (both legal and illegal) with awareness campaigns about the government’s plans and programs. Outreach activities will be designed to engage miners on good environmental practices in artisanal gold mining and mine site rehabilitation, including use of established, legal small-scale mining operations as learning sites and mentors (to the extent possible). Where useful, training programs will be conducted with communities, mine owners and workers, local and traditional authorities and others to introduce improved practices, raise awareness of health impacts, and raise awareness of environmental degradation costs and impacts. Outreach activities will also be aimed to promote replication of good practices and scale-up of mine site rehabilitation at additional sites across Ghana. 26. Component 4: Project management, monitoring, and coordination (US$1.00 million SCF grant). Additional support for management, monitoring and coordination recognizes the need to expand the G-FIP Steering Committee to include key agencies, such as the Ministry of Chieftaincy and Traditional Affairs and others as needed. Project management and reporting functions will expand to ensure regular reporting on and integration of the FIP ENFAL- and AF-funded activities with larger scale Government programs to address and control the negative effects of illegal ASM. Page 74 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Annex 3. Fiduciary Arrangements Financial Management Arrangements 1. Disbursement arrangements have been designed in consultation with the MLNR and MoF after considering the assessments of the Implementing Agency’s FM capacities and anticipated cash flow needs of the operation. 2. This operation is a concessional loan in the amount of US$7.0 million in the form of an AF to the original project (TF 18842) and a TF of US$12.39 million. Proceeds of the finance will be used by the MLNR and other beneficiary agencies for payment for eligible expenditures as defined in the respective Financing Agreements and further detailed in the yearly Annual Work Plans & Budgets and Procurement Plans. The proposed arrangement is to have a pooled account for all two sources of funding using the existing Designated Account (DA) located at the Bank of Ghana (denominated in US dollars) to support the implementation of the current AF activities and the ongoing ENFAL Parent financed through TF 18842.The Designated Account is under the direct responsibility of the Chief Director but managed and operated by Director of Accounts in collaboration with the Project Coordinator. 3. Disbursement arrangements and use of funds. Proceeds of the financing will follow the standard World Bank procedures for Investment Project Financing, for use by the Borrower for eligible expenditures as defined in the Financing Agreement. 4. Funds flow and disbursement will be implemented under the principles of traditional IPF arrangements using the report-based disbursement arrangements. Under this arrangement, the allocated resources will be advanced to the MLNR’s Pooled Designated Account on the basis of an approved six-monthly forecast of expenditures and replenished quarterly for further periods of six months using IFRs. 5. Upon effectiveness, the initial request for advance will be based on the consolidated expenditure forecast for six months, subject to the World Bank’s, i.e. Task Team Leader (TTL) and FMS, approval of the estimates and cashflows. Subsequent replenishments of the Designated Account will be done quarterly based on the forecast of the net expenditures for the subsequent half-year period. The IFRs (including the ‘procurements subject to prior reviews’ and ‘Designated Account reconciliation statement’) will serve as the basis for requesting for advances and for documentation. 6. These shares of the expenditure to be financed from the additional finance are reflected in the tables below. Page 75 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) A. Disbursement Categories22 – Additional TF US$12,390,000 Amount of REVISED Amount of Percentage the Percentage Total the New of AF Grant Original of Original Original + Category AF Grant Expenditures Grant Expenditures AF Allocated to be Allocated to be Funding (in US$) Financed (in US$) Financed (1) Non-consulting services, consultants’ services, 2,500,000 56% 2,000,000 44% 4,500,000 Operating Costs, and Training under Part 1 of the Project (2) Goods, works, non- consulting services, consultants’ services, 20,935,000 71% 8,385,000 29% 29,320,000 Operating Costs, and Training under Part 2 of the Project, except part 2b of the AF (3) Non-consulting services, consultants’ services, 2,600,000 72% 1,000,000 28% 3,600,000 Operating Costs, and Training under Part 3 of the Project (4) Goods, non-consulting services, consultants’ services, 3,465,000 78% 1,000,000 22% 4,465,000 Operating Costs, and Training under Part 4 of the Project TOTAL AMOUNT 29,500,000 12,385,000 41,885,000 22 The total Disbursement Categories for Grant and Loan do not include government in kind contributions, so the total is US$48.89 instead of US$51.89 (which includes in kind contributions). Page 76 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) B. Disbursement Categories – AF of US$7,000,000 Amount Amount of Percentage of the Total the AF of AF Loan Original Original + Category Loan Expenditures Grant AF Allocated to be Allocated Funding (in US$) Financed (in US$) (5) Sub-loans to support small scale timber plantation development on-lent 0 7,000,000 100% 7,000,000 through a partner financial institution under part 2b of the project TOTAL AMOUNT 7,000,000 7,000,000 7. Withdrawal Conditions: For funds allocated under AF and for Category (5) for part 2b of the project:  The Borrower has prepared a Credit Line Operations Manual in form and substance acceptable to the Association  A Fund Manager or Financial Institution is engaged using procedures acceptable to the Association  Provide legal clearance from the Attorney General’s Office on the contractual arrangement between the MLNR and the Financial Institution 8. Additional instructions for disbursements are provided in the Financial Management & Disbursement Letter issued for this project. Procurement Management Arrangements 9. New Procurement Framework. Because the Project Concept Note (PCN) dates after July 1, 2016, procurement will be carried out, per the New Procurement Framework, in accordance with the (a) WORLD BANK Procurement Regulations for IPF -Borrowers PROCUREMENT IN INVESTMENT PROJECT FINANCING Goods, Works, Non-Consulting and Consulting Services, dated July 2016, revised November 2017 and August 2018; (b) the ‘Guidelines on Preventing and Combating Fraud and Corruption in Projects financed by IBRD Loans and IDA Credits and Grants’, dated October 15, 2006, revised in January 2011; and (c) the provisions stipulated in the Legal Agreement. The bid documents will be based on the Standard Procurement Document, recently enhanced with the Environment, Social Health and Safety. As required, the Government prepared a Project Procurement Strategy for Development (PPSD), submitted and cleared by the World Bank (dated: 30 October 2017). This section summarizes the PPSD. 10. Procurement implementation arrangement and capacity assessment. The implementation arrangements remain unchanged. The implementing agency will be the M LNR, will be responsible Page 77 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) for the project’s coordination, procurement, contract management, FM, and compliance with safeguards policies, in collaboration with the FC, MC and other relevant agencies under the MLNR. 11. The procurement capacity assessment, in accordance with OCSPR guidelines and Procurement Risk Assessment and Management System (P-RAMS), the summary assessment of the procurement risk is SUBSTANTIAL for the project and the prior review thresholds have been set to reflect this rating. Procurement post-reviews and technical audits will be carried out annually by the World Bank Procurement Specialist and Technical Specialist or independent auditors and based on the findings of the reviews the prior review thresholds will be reviewed. The main risks identified are the following:(i) the use of the Procurement Framework (ii) inadequate monitoring; (iii) weak contract management; (iv) delays in processing procurement and payments; (v) some political interference; (vi) fraud and corruption. The proposed mitigation will include (i) World Bank to organize and deliver training session for MLNR, FC and MC, on the NPF during the appraisal and immediately after effectiveness, with hands-on support to the implementing agencies to ensure the proper use of the borrower regulations (ii) intensify training in Procurement and Contract Management by the World Bank. Table 3.1 below depicts the thresholds and procurement methods to be used under the Project for a risk rating of Substantial. Table 3.1: Thresholds and Procurement Methods Prior Review Threshold in (US$ '000) Procurement Method s Thresholds (in US$'000) Shortlist of National Consultants Works Goods, IT and non-consulting services Consultants Single Source Goods, IT Request for Request for Engineering & Direct Open Open Open Open Systems+ Quotation/ Quotation/ Consulting & RISK RATING Works Firms Individuals Contract International National or International National or Non Con. National National services construction or ICB NCB or ICB NCB Serv Shopping Shopping supervision SUBSTANTIAL ≥$10,000 ≥$2,000 ≥$1,000 ≥$300 ≥$100 ≥15000 <15000 ≤200 ≥3000 <3000 ≤100 <300 ≤500 12. These thresholds are for the purposes of the initial procurement plan for the first 18 months. The thresholds will be revised periodically based on re-assessment of risks. All contracts not subject to prior review will be post-reviewed. Additional Notes: - Based on Specific needs and circumstances, shopping thresholds for the purchase of vehicles and fuel may be increased up to US$500,000 equivalent. - Operating expenditures are neither subject to the Procurement Framework nor prior or post reviews mechanism. Operating expenditures are normally verified by TTLs and FM Specialists. - Irrespective of the thresholds and category of risk, the selection of all consultants (firms or individuals) hired for legal work or for procurement activities are respectively cleared by the LEG VPU unit with the relevant expertise and the designated PS/PAS or RPM as required. - Prior Review Contracts for the Hiring of Individual Consultants: Apart from legal work and procurement assignments, irrespective of the thresholds and category of risk, which shall respectively be reviewed by LEG VPU Unit with the relevant expertise and the designated PS/PAS or RPM as required, review of the selection process for all other individual consultants (Technical Experts) shall be solely by the TTL. - Special cases beyond the defined thresholds are allowed based on applicable market conditions. Page 78 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) - Thresholds for which a shortlist may comprise only national consultants, the Borrower does not need to publish in UNDB online. 13. Procurement Plan. The Borrower prepared, following its PPSD, and the World Bank cleared the Procurement Plan which covers the first 18-months of project implementation. The Procurement Plan is available in the project’s database and a summary of it will be disclosed on the World Bank’s external website once the AF is approved by the Board. The Procurement Plan will be updated in agreement with the World Bank at least annually or, as required, to reflect the actual project implementation needs and improvement in institutional capacity. 14. Systematic Tracking of Exchanges in Procurement (STEP) will be the primary software or platform to be used to submit, review, and clear all Procurement Plans and prior review procurements. For each contract to be financed by the project, the different procurement methods, or consultant selection methods, the need for prequalification, estimated costs, prior review and methods requirements, and time frame will be agreed between the Government and the World Bank in the Procurement Plan. In preparing the Procurement Plan, the prior review and methods thresholds associated with the recommended/prevailing procurement risk rating are always applicable. Page 79 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Table 3.2: 18-months Procurement Plan Component Implementing Estimated Procurement Expected Proposal Agency Cost US$ Approach/Competiti Submission Date ('000) and World on (National, Contract Title, Description and Risk Bank International, Open, Ref Number Category Rating Overs Limited, Direct, Sole ight Source, QCBS, QBS etc., Negotiations, BAFO) Development of guidelines/manual 1 MLNR/EPA/FC/ 50 for rehabilitation of Artisanal & FoRIG 1.1b.2 Small-Scale Mining (ASM) mined Post Open/National-CQS 5-July-19 out areas -CONSULTANCY Drafting of Legal Framework for 2 MLNR/EPA/FC/ 30 Forest Plantation Development Loan 2.3b.1 FoRIG Post Open/National-CQS 22-June-19 Scheme -CONSULTANCY Business Development Services for 2 MLNR/EPA/FC/ 100 Beneficiaries of Forest Plantation FoRIG Development Loan Scheme- 2.4b1 Post Open/National-LCS 17-July-19 CONSULTANCY Supply and Delivery of Lot 1: 3 No. MLNR/EPA/FC/ 670 Station Wagon (Mid-Range), Lot 2: 5 FoRIG/MC/DA/T MLNR/RDDMFL/G No Station Wagon (Low Range), Lot 1.2b.1, A/FC/COCOBO DS/NCB/1/19 Post Open/National-NCB 10-June-19 3: 5 No. Double Cabin Pick-Ups and 4.2b.1 D Lot 4: 1 No. Saloon Car -GOODS Supply and Delivery of Lot 1: 10 No. 1.2b.1 MC/EPA/RC/Fo 50 Laptop Computers and Accessories, RIG 10 No. Monochrome Printers and 10 MLNR/RDDMFL/G No. Digital Scanners, Lot 2: 10 No. DS/SH/1/19 Post Limited/RFQ 8-May-19 Digital Cameras and Lot 3: 3 No Heavy-Duty Photocopiers, -GOODS Page 80 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Supply, Delivery and Installation of 2.2b.4 MC/EPA/RC/Fo 150 MLNR/RDDMFL/G Tools, Machinery and Equipment - RIG DS/NCB/2/19 Post Open/National-NCB 27-May-19 GOODS Reclamation of Selected 8 No. 2.1b.4 MLNR/EPA/DA/ 500 MLNR/RDDMFL/W Degraded Mined out Sites (100Ha) - FC/FoRIG/TA KS/SH/1/19 Post Open/National-NCB 25-June-19 WORKS NGO/CBO Services for Community MLNR/RDDMFL/N 2.2b.4 MC/EPA/RC/Fo 50 Livelihood Activities CS/SH/1/19 RIG/DA/TA Post Limited/RFQ 6-June-19 -NON-CONSULTING SERVICES Fund Management Services for 2.3b.2 FC/COCOBOD/F 50 MLNR/RDDMFL/N Plantation Development Loan oRIG CS/SH/2/19 Post Limited/RFQ 6-June-19 -NON-CONSULTING SERVICES Design and Print 1,000 No. 3.2b.1 MC/EPA/DA/TA 20 Communication Packages on Effects MLNR/RDDMFL/N FC/COCOBOD/F of AGSM CS/SH/3/19 oRIG Post Limited/RFQ 6-June-19 -NON-CONSULTING SERVICES SUMMARY Goods 870 Works 500 Consultancy Services 180 Non-Consulting Services 120 Grand Total for first 18 Months 1,670 Page 81 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Annex 4: Implementation Support Plan Strategy and Approach for Implementation Support 1. The strategy for Implementation Support has been developed based on the nature of the project and its risk profile. The aim is to provide timely and efficient implementation support to the client to ensure smooth implementation and achievement of the PDO. 2. Implementation support will include: (i) strong coordination with other FIP implementing partner in Ghana, AfDB; and (ii) coordination of activities with Ghana’s REDD+ program, including the proposed Ghana’s Emission Reductions Program for the Cocoa Forest Mosaic Landscape (GCFRP, P160339, for which the ERPA is expected to be signed by May 2019, and the related ongoing project on Dedicated Grant Mechanism for Local Communities. 3. Safeguards. Safeguards implementation support will be part of the regular implementation support. Specifically, implementation support will include: (i) advisory support on application of the updated safeguards instruments, including ESMF, PMP and PF, and (ii) review of detailed implementation of activities to ensure their compliance with the Bank safeguards policies. 4. Procurement. Procurement post-reviews and technical audits will be carried out annually by the Bank Procurement Specialist and Technical Specialist or independent auditors and based on the findings of the reviews the prior review thresholds will be reviewed. Post review consist of reviewing technical, financial and procurement reports carried out by the Client executing agencies and/or consultants selected and hired under the Bank project according to procedures acceptable to the Bank. 5. Financial management. Disbursement arrangements have been designed in consultation with the MLNR and MOF after considering the assessments of the Implementing Agency’s FM capacities and anticipated cash flow needs of the operation. Proceeds of the financing will follow the standard Bank procedures for Investment Project Financing, for use by the Borrower for eligible expenditures as defined in the Financing Agreement. Funds flow and disbursement will be implemented under the principles of Bank Directive: Investment Project Financing arrangements. Under this arrangement, the allocated resources will be advanced to the MLNR’s Pooled Designated Account on the basis of an approved six-monthly forecast of expenditures and replenished quarterly for further periods of six months using IFRs. 6. Upon effectiveness, the initial request for advance will be based on the consolidated expenditure forecast for six months, subject to the World Bank’s, i.e. Task Team Leader (TTL) and FMS, approval of the estimates and cashflows. Subsequent replenishments of the Designated Account will be done quarterly based on the forecast of the net expenditures for the subsequent half-year period. The IFRs (including the ‘procurements subject to prior reviews’ and ‘Designated Account reconciliation statement’) will serve as the basis for requesting for advances and for documentation. 7. Based on the risk rating of the project and the current FM arrangement, it is expected that in the first year of implementation there will be two onsite visits to ascertain adequacy of systems and how effectively the country systems are being used to support implementation. The FM implementation support mission’s Page 82 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) objectives will include ensuring that strong financial management systems are maintained throughout project tenure. In adopting a risk-based approach to FM supervision, the key areas of focus will include assessing the accuracy and reasonableness of budgets, their predictability and budget execution, review of compliance particularly at the FC, compliance with payment and fund disbursement arrangements, and the ability of the systems to generate reliable financial reports. 8. Legal support. Implementation support will include verification that legal conditions have been met, to the extent that these are included. Implementation Support Plan 9. Technical inputs. The Technical Specialists and the Co-TTL are based in Headquarters (HQ). The TTL is based in the Ghana Country Office. The fiduciary and safeguards team are based in the Ghana Country Office. Technical specialists on the following aspects, both HQ and Country Office-based, will be part of the team: forestry, carbon, and environment. The team will also include an Operations Officer (HQ-based). Technical specialists will be part of formal implementation support and field visits, to be carried out twice annually. 10. Fiduciary requirements and inputs. Training will be provided regularly by the World Bank's financial management specialist and procurement specialist to enhance project implementation. The team will also help stakeholders to identify capacity building needs to strengthen their financial management capacity and to improve procurement management efficiency. Formal financial management and procurement supervision will be carried out semiannually, while fiduciary ad-hoc advice and review of IUFRs and No Objection requests will be provided on a timely basis as required by the Client and the TTL. Post- procurement reviews will be carried out annually. 11. Safeguards. Due to the nature of the investments, the project will require close safeguards implementation support due to the high visibility of environmental and social aspects of REDD+. As such, the project will require support from two senior safeguards specialists with experience in the implementation of similar projects. Table 4.1: Implementation Arrangements for the Project Period Resource Partner Role Time Focus Skills Needed Estimate First Guidance on institutional 8 staff twelve arrangements and project Task Team Leader n/a weeks months supervision Guidance on institutional Co-Task Team Leader arrangements and project / Environmental 8 staff weeks n/a supervision Specialist FM Training and Supervision 2 staff weeks FM Specialist n/a Procurement Training and 2 staff weeks Procurement Specialist n/a Supervision Page 83 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Disbursement arrangements Finance Officer 1 staff week n/a 2 staff weeks Technical input M&E arrangements M&E Specialist Safeguards supervision / Environmental 4 staff weeks Technical input environmental safeguards Safeguards Specialist Safeguards supervision / social Social Safeguards Specialist 4 staff weeks Technical input safeguards Technical supervision: technical Carbon Finance / Forestry 2 staff weeks Technical input aspects / carbon Specialist Technical supervision: Environmental technical aspects / environment 4 staff weeks Technical input Specialist Technical supervision: institutional and implementation Operations Officer 4 staff weeks Technical input arrangements 12-48 Project implementation 12 staff Task Team Leader n/a months supervision weeks Co-Task Team Leader Project implementation 12 staff / Environmental n/a supervision weeks Specialist Financial Management supervision 6 staff weeks FM Specialist n/a 6 staff weeks Procurement supervision Procurement Specialist n/a 3 staff weeks Disbursement monitoring Finance Analyst n/a M&E implementation support 3 staff weeks Technical input M&E Specialist Safeguards monitoring / Environmental 8 staff weeks n/a environmental safeguards Safeguards Specialist Safeguards monitoring / social Social Safeguards Specialist 8 staff weeks n/a safeguards Technical supervision: technical Carbon Finance / Forestry 6 staff weeks Technical input aspects / carbon Specialist Technical supervision: Environmental technical aspects / environment 6 staff weeks Technical input Specialist Technical supervision: institutional and implementation Operations Officer 6 staff weeks Technical input arrangements Page 84 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Table 4.2: Bank Team Skill Mix Required Number of Staff Skills Needed Number of Trips Comments Weeks Task Team Leader 8 staff weeks Two missions per year HQ-based annually Co-Task Team Leader / Natural Resources 8 staff weeks Site visits as needed CO-based Management Specialist annually FM Specialist 2-4 staff weeks Site visits as needed CO-based annually Finance Analyst (Disbursements) 2-4 staff weeks n/a Based in the region annually Procurement Specialist 2-4 staff weeks Site visits as needed CO-based annually Environmental Safeguards 2-4 staff weeks At least one mission per HQ-based Specialist annually year Social Safeguards Specialist 2-4 staff weeks At least one mission per HQ-based annually year Technical aspects / forestry 2-4 staff weeks At least one mission per HQ-based annually year Technical aspects / carbon 2-4 staff weeks At least one mission per HQ-based annually year Technical aspects/mining 2-4 staff weeks At least one mission per annually year Technical aspects / environment 2-4 staff weeks Site visits as needed CO-based annually Technical aspects / operations 2-4 staff weeks At least one mission per HQ-based annually year Table 4.3: Partners Name Institution/Country Role Tabi Karikari African Development Bank MDB partner of FIP Program Paolo Dalla Stella Chair, Environment Sector Working Group, Ghana SWG Isaac Bonsu Karikari Project Coordinator, Multilateral Mining Partner in addressing Integrated Project (MMIP) illegal ASGM Page 85 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Annex 5: Lessons Learned 1. The following lessons or approaches have been demonstrated in the implementation of FIP ENFAL and Other Projects. These lessons inform the design of the AF activities. 2. Government ownership is important. The mainstreamed implementation model, used currently under the original project, will continue for the AF activities with expanded efforts to reach local government entities. This AF is further strengthened by the strong desire at the highest levels of the GoG to address the galamsey challenge. The lesson of ownership and leadership also emerges from the NREG TA, which concluded that use of existing institutional structures for project implementation is the way forward, not use of an independent PMU. This is particularly important for building institutional capacity, shared practical experience, and social capital for addressing cross sectoral challenges. The NREG process also recognized that strong leadership and institutional mandate is important – and this project has that in MLNR. In a related point, it is also important to recruit and retain key technical expertise and project managers for continuity of project implementation. This aspect has been reasonably achieved under FIP ENFAL, though there are inevitably changes in personnel at district field offices. Having training and manuals in place help to bring new staff up to speed quickly. The AF will also build on the trust and stability that the World Bank and Government core teams have achieved during the past 2 years of implementation. 3. Community-level activities are essential to success but require significant start up time and planning. ENFAL has demonstrated success in engaging communities in livelihood activities (snails, bees/honey, climate smart cocoa) but only after extensive consultations. Now that systems are set up for reaching communities with necessary goods and services (training, seedlings, field equipment), implementation is proceeding effectively. Sufficient time will be needed for good preparation and establishing of sound implementation plans at district level. 4. Engagement of all stakeholders is essential for successful implementation of project interventions on the ground. The AF will continue stakeholder engagement approaches developed under the original project and resources are provided in Components 2 and 3 for both activities and outreach. Galamsey represents and increased challenge because of the value of the resource and the illegal nature of the activity. However, activities have been designed to engage miners and the support structure (local administrations, investors), to provide information and training, and to engage them in the context of their surrounding communities. On the policy side, efforts to simplify licensing procedures and provide sites for legal ASGM stand to benefit workers currently engaged in illegal and destructive practices and provide an incentive for their engagement in project activities. 5. Ambitions and expectations need to conform to the project budget and time frame. The NREG TA was ambitious in the time and resources that were eventually to deliver good analytical products and action plans. Actions plans also need to be connected to financing sources to ensure implementation. These lessons also related to the need for a results framework that captures the essential indicators to gauge success. This AF benefits by highlighting the nature of the pilots as demonstrations that point the way to Page 86 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) larger solutions and notes that wider application plus greater resources will be required to address the galamsey challenge comprehensively. 6. The multi-sectoral approach – as adopted in FIP ENFAL and in NREG – is an effective means of managing natural resources. The wellbeing of the environment and natural resources is fundamental to the long- term sustainability of many sectors. Hence, bringing practitioners from various sectors together, creating and enhancing synergies, promoting collective processes and encouraging adaptation to joint decision- making are bases for a good governance mechanism. Although recognized as important, this lesson was not very effectively applied under NREG. ENFAL benefits from a PMU based in the MLNR which oversees land, forests and minerals agencies, so has the higher-level convening power needed as a base for multi- sector coordination. 7. The multi-sector approach requires substantial institutional coordination and takes time to set up and smooth out. This issue is a challenge in all projects, but at least ENFAL has the benefit of a multi-sector institution in the lead. ENFAL also has the experience of including COCOBOD, MESTI, and FORIG in implementation of activities with shared budgets. This AF calls for including and coordinating more agencies, which should be smoothly accomplished given the existing track record. With the addition of district-level agencies and MC as potential partners, systems for work planning and tracking funds will need to be expanded from the existing sound base. 8. The project integrates lessons learned from the World Bank’s Extractive Industries in Forest Landscapes program, specifically through a PROFOR-funded Technical Assistance document entitled “Forest-Smart Mining: Identifying Good and Bad Practices for Artisanal & Small-Scale Mining in Forest Landscapes.” “Forest smart” implies acknowledging the inter-linkages between forests and other land uses and adopting a development trajectory through an integrated landscape approach that avoids or minimizes adverse impacts on forest ecosystems and their biodiversity, and proactively seeks win-win solutions where both are fully incorporated into the design of interventions. The document uses case studies from 21 active mine sites across 12 countries — a representative range of geographies and forest ecologies, mine types, political and governance contexts, and landscapes, including those in which Artisanal and Small Scale Mining (ASM) occurs together with Large Scale Mining (LSM) — to identify and compile lessons learned in relation to ASM’s impacts on forests, barriers to forest-smart ASM (political/economic or governance), and solutions and mechanisms for promoting forest-smart ASM. Key lessons learned, applicable to this FIP AF and considered in its design include: 9. Prosperity rather than poverty drives increased impacts of ASM on forests. This is due to higher organization, mechanization, and potential for more intensive mining and suggests that current environmental governance mechanisms are unequal to the task. Strong policies and robust regulation of ASM become critical as developing countries transition to higher income levels and financial capital and mechanization become more readily available to ASM operations. The project aims to provide that underpinning by ensuring that rehabilitated areas remain protected from future incursion. Specifically, it attempts to do this by working across institutions and improving coordination for a more rigorous oversight of legal ASM operations, especially the monitoring of environmental effects and impacts on forests, while simultaneously disabling the conditions that allow illegal mining to flourish. Page 87 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) 10. Mining regulators need to be more strongly engaged in forest-smart management. As demonstrated in multiple case studies, the mining sector has often been unable or unwilling to exert sufficient influence on ASM’s impacts on forests. In some cases, mining sector policies and regulations may even facilitate forest degradation or impede improved forest outcomes. In Ghana, the MC will be engaged more effectively in the prevention and management of ASM’s forest impacts and MC is included in the project’s updated institutional arrangement. As recommended in the study, the project will channel investment into helping the MC, and MLNR, to develop better adapted policies and regulations for forest smart ASM; better coordination with FC and other relevant stakeholders; improve decentralized governance to help manage the forest impacts of ASM; better collection, management, and dissemination of geological information to plan or prevent mining in forested areas. 11. A forest-smart ASM sector calls for an integrated approach. Governments need to craft a strategy based on poverty reduction and resolving conflict, improved control of foreign investors, fighting corruption, macroeconomic planning, promoting pro-forest policies, improved gold sector governance (involving both fiscal and mining aspects), law enforcement, sector coordination, empowerment of local government, landscape-planning, recognition of indigenous rights, and land tenure. Such an approach should be based on inclusive ASM stakeholder engagement and capacity building. This AF intends to supplement the GoG’s MMIP with the support necessary to ensure that a forest smart development approach is followed. Some of the key activities that can facilitate such an approach, as recommended by the study, include: working with the overall poverty reduction agenda while ensuring that the regulatory environment of ASM keeps pace with the development of the sector; working with the environmental education agenda in the dissemination of facts related to the need to safeguard/protect forests; developing and implementing clear policies for land use allocation; improving the understanding of where ASM is occurring and its impacts on forests; considering the opportunities for positive synergy between ASM and LSM to enable ASM to perform better on forest impact mitigation; considering the role of protected areas and REDD+ in limiting the forest impacts of ASM; and taking special care to safeguard comparatively weaker communities/individuals. Page 88 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Annex 6: ASGM and the Multilateral Mining Integration Project Economic and Environmental Background 1. Gold mining is a major contributor to national economic wealth and to poverty reduction. In 2016 Ghana produced 110 tons of gold, and 31 percent of this came from artisanal and small-scale miners (MC, 2017). Mining contributes foreign exchange and jobs to the economy. Galamsey may account for over 1.1 million jobs, half of which are informal (UNECA, 2011). Indirect economic benefits accrue to 4.4 million people, including women who work in supporting services (World Bank, 2015). Small- scale gold mining is of three types: i) hard rock (lode), ii) deep alluvial mining, and iii) shallow alluvial mining. Though data are scarce, the first two types are mostly licensed, and the third type is most unlicensed, and is referred to as galamsey. Small scale production increased Figure 6.1: Ghana Gold Production and ASM substantially since 2010 (see Figure 6.1) both in overall volume and as a share of total gold production. This increase in ASGM in recent years was a response to high gold prices, high unemployment and a slump in agricultural production, and thus benefited the poor. However, there are also other drivers of the increase, particularly in the illegal alluvial mining operations, which are highly visible and destructive. Gold mining attracts not only poor local miners, but also entrepreneurial and politically connected Ghanaians, foreign investors and equipment providers, and itinerant, non-local (often immigrant), laborers. 2. Illegal ASGM threatens health, wealth, water, food, cocoa, and forests. Although ASGM is an important source of jobs and income for rural communities, the rural poor and smallholder farmers are also among those most affected by the adverse environmental effects of illegal mining. Galamsey has resulted in serious deforestation and land degradation. Illegal ASGM also undermines legal mining activity and cocoa production – both key economic sectors. Destructive and polluting practices associated with ASGM, include degradation of stream beds and riparian zones, and incursion into agricultural land, including high value cocoa plantations. Mining associated degradation, siltation and pollution affects 60 percent of water courses in various ways including: restricted stream flow, upstream flooding, and downstream loss of access to clean water. Use of toxic mercury in gold amalgamation threatens water supplies and the human food chain. Beyond these environmental and health impacts, illegal ASGM represents a cross-sectoral, inter-disciplinary challenge with wide ranging social and economic impacts. Through loss and degradation of forested areas, uncontrolled mining practices negatively affect the people who depend on forests, habitat and biodiversity, and cocoa agroforestry, which are critical to rural jobs and the wider economy. Page 89 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) 3. A political analysis23 of the galamsey issue, published by the University of Ghana Business School (UGBS), provides important insights and guidance. UGBS notes that galamsey persists “because of political leniency and law enforcement corruption,” not because of poverty or weak state capacity. The authors note also that poverty, cumbersome administrative processes, prior displacements, and perceived injustices are contributing factors. The problem is exacerbated both by political interests and by the complex land tenure system in Ghana. It persists also because it serves the interests of local, political and business elites that finance operations outside the legal mining framework. For this reason, an integrated and committed approach is needed, not simply technocratic fixes that have been unsuccessful in the past, including: simplifying the licensing process, alternative livelihoods, demarcation of ASM allowable areas, and irregular crackdowns. Policies and technocratic interventions are needed, they conclude, “but their effectiveness would be enhanced if combined with tackling the political drivers of the problem.” Multilateral Mining Integration Project 4. To tackle illegal ASGM, the GoG has initiated the Multilateral Mining Integration Project 24 (MMIP). The MMIP is planned as a five-year long project to be conducted jointly by MLNR, MESTI, EPA and the MC. The MMIP proposes a holistic framework to tackle illegal mining and ensure that legal mining is done in a sustainable manner.25 The holistic framework is based on a “Legislations Enforcement Civil Integration and Technical Approach,” which has three elements: legal reform, law enforcement, and the use of new technologies, to ensure transparency and sustainability in the mining sector. The first involves revision of Ghana’s mining laws and will include stricter penalties for illegal mining activities to serve as a deterrent to future illegal mining. The second will couple increased law enforcement surveillance with the new legal reforms. The third seeks to leverage innovation in the monitoring of the small-scale mining sector and will feature the use of drones and tracking devices on heavy machinery to guarantee that such mining is carried out in accordance with the country’s laws and regulations.26 The MMIP includes the following five key elements:  Review and enforce the legal regulatory regime  Reclaim degraded lands, dredge silted estuaries and free lands for agribusiness  Implement social interventions to facilitate livelihoods in mining communities  Adapt technology to ensure efficient mining, processing, environmental and monitoring activities  Capacity building of ASMs, regulators and project management. These include some ambitious targets, notably: 23 UGBS Policy Brief No. 5. The Galamsey Menace in Ghana: A Political Problem Requiring Political Solutions? June 2017. www.ugbs.ug.edu.gh 24 GoG/MLNR, Project Appraisal & Implementation Document for the Multilateral Mining Integrated Project (MMIP). Accra, June 2017. 25 https://www.ghanabusinessnews.com/2017/03/09/government-proposes-to-tackle-illegal-mining-through-collaboration 26 https://www.ghanabusinessnews.com/2017/04/17/ghana-government-rolls-out-programme-to-deal-with-galamsey- minister/ Page 90 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745)  Alternative livelihoods program – establish 20,000 ha of oil palm plantation  Train 1,000 miners in mining and processing  Reclaim 2,380 km2 of mined-out lands  Reduce ASM license acquisition time by 40 percent. 5. One objective of the MMIP is to transition illegal small-scale miners to the legal side of the sector, through the GoG strategy of civil integration. To offset the local economic impacts, the GoG plans to provide alternative employment to former miners through a two-step process. The first step is to provide jobs in land reclamation and tree planting projects.27 In balance, there would be an “aggressive approach” towards recalcitrant miners who attempt to return to illegal mining once reclamation efforts have begun. The second step is for GoG to explore prospective small-scale mining sites and to resituate activities on artisanal mining concessions under state supervision. Some of the prospective areas will include parts of large-scale concessions that have been willingly let go by industrial mining companies. This plan could be accompanied by provision of a machinery pool to be shared by relocated small-scale miners and establishment of a processing facility, where the miners can process their ore for a fee.28 29 6. Moratorium on ASM Gold Mining. As an early step, even before the announcement of the MMIP in June, the GoG implemented a moratorium on all small-scale mining in April 2017. The ban covered both licensed and unlicensed ASM and includes all types of small-scale mining – hard rock, and both deep and shallow alluvial. Some regarded the ban as over-broad because it covers not only unlicensed and environmentally destructive galamsey, but also legally operating hard rock mining that has much less impact on the environment and water bodies. The ban was enforced in military style by the Vanguard task force, reflecting the political mood of crisis around the issue. The GoG noted that the moratorium was an emergency response, not based on a full investigation or reliable data so could be described as a precautionary measure. The ban has been criticized) for failure to consider the impact on rural poverty by depriving ASM miners and their families of a source of income. 7. The GoG lifted the ban on small-scale mining on Monday, December 17, 2018 after an Inter-Ministerial Committee on Illegal Mining developed a framework to regularize small-scale mining. Only small-scale miners that have had mining concessions validated will be allowed to mine in designated areas. This Annex describes the ASGM situation and the Government’s MMIP, from direct sources and through media accounts. The proposed AF will not directly finance the implementation of the MMIP. It will focus on land rehabilitation activities with communities, in collaboration with MLNR, FC, MC and other key agencies and representatives of local government. The AF activities will need to be informed by MMIP lessons and integrated with follow on activities that aim to transition miners and communities to new forms of livelihoods and technical practices 27 http://citifmonline.com/2017/04/25/illegal-miners-will-be-engaged-in-tree-planting-program-amewu/ 28 http://citifmonline.com/2017/04/17/weve-suspended-issuance-of-mining-license-bawumia/ 29 http://citifmonline.com/2017/04/24/alternative-livelihood-programme-for-illegal-miners-to-cost-10m/ Page 91 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Annex 7. Related World Bank and Partner Projects that will Inform and Work with the FIP AF 1. This annex provides a brief overview of projects and organizations working in similar areas. These represent opportunities for learning, collaboration and synergy that will be pursued under the AF. 2. Reducing environmental health risks in artisanal gold mining and e-waste in Ghana (GEF Program ID: 9444): The objective is to “Reduce Environmental health risks related to use of mercury and open burning of e-waste in Ghana through strengthened institutional partnership and capacity.” The FIP AF Project will also synergize with a concurrent GEF project focusing on mercury pollution. Under its CHEM-2 Program 4 dedicated to tackling the challenge of mercury the GEF is providing US$ 4,587,156—with another US$ 4,587,156 for persistent organic pollutants (POPs), which is now under preparation. Unplanned and unregulated ASGM has generally left a legacy of severe adverse (and irreversible) environmental, health, economic, and social impacts, often affecting disproportionately the poorest and most vulnerable communities. Studies have shown that the health of artisanal miners and other people living within areas prone to mercury contamination may be negatively affected through inhalation of mercury vapor or contaminated dusts, direct contact with mercury, eating of fish and other foods susceptible to bioaccumulation, and ingestion of mercury-contaminated waters and soils. While there is a recognition that the use of mercury has serious environmental and health consequences, there are limited resources to demonstrate cleaner alternative technologies and exhibit clean and feasible practices related to mine closure as mandated in the Mining policy. 3. The Reducing environmental health risks in artisanal gold mining and e-waste in Ghana Program provides the opportunity for supporting further policy enhancements in small-scale mining, while building capacity for improving monitoring and enforcement of the regulations. The project has three components addressing the challenge of mercury contamination: Component 1a: Institutional strengthening, knowledge and capacity building; Component 2a: Support for Policy dialogue and regulatory enhancements; and Component 3a: Demonstrating application of technological tools and economic approaches. Component 1a focuses on strengthening institutional systems and providing capacity building for EPA and MC to manage the artisanal and small-scale gold mining sector, including through training at the national and local levels. It seeks to build the capacity of these institutions and support development of guidelines and monitoring systems in place for management of mercury usage and waste in ASGM. The Component incorporates three key lessons: (a) strengthening policy and regulatory aspects of mining to include provisions for recognition of legal import of mercury; (b) implementing a country level inventory and tracking of mercury import and use in the ASGM sector as part of a capacity building plan; (c) training artisanal miners to understand the cost-benefit analysis of mercury procured from illegal traders and its associated environmental health costs. Component 2a aims to support the EPA in strengthening the policy requirements targeted at ASGM. Finally, Component 3a seeks to pilot and demonstrate environmental improvements, based on cost-effective and environmentally sound technologies, on 2-3 abandoned mine sites, where there is a clear opportunity to partner with FIP in terms of criteria for site selection and approaches to be employed. Ghana Artisanal Mining for sustainable development: Structurally Addressing the Galamsay Crisis (P166265) (ASA) 4. The aim of this analysis is to strengthen our understanding and deepen the dialogue with the key Ghanaian authorities and experts on the contribution of artisanal mining to sustainable development in Ghana and explore next steps towards formalization of the sector. This is a small analytical project aimed at addressing an immediate need expressed by the government to look at international good practices for ASM formalization. Results will feed into the Ghana SCD and could begin to define the scope and directions for larger operations that could follow in the future. Page 92 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) The Ghana Artisanal and Small-Scale Mining Formalization (P168002, US$30.00 million) 5. This proposed project, which will be expected to be approved in December 2019, responding to a request from GoG, aims to create enabling conditions for the orderly, safe, sustainable, and environmentally sound development of artisanal and small-scale mining in Ghana. The project expects to assist the GoG and stakeholders with an agenda for improvement of policies and practices in the sector, leading to an increase in artisanal and small-scale miners who are registered and compliant with regulations, strengthened institutional capacity, demonstration centers to showcase safe, environmentally sound, and more efficient methods of extracting and processing gold and assistance for sustainable livelihood alternatives, such as farming on reclaimed land and improvement of rural access roads in galamsey areas. PMEH Contaminated and Toxic Land Pollution and Ghana – Rapid Screening Assessment 6. The AF project is also working with a PMEH trust funded program, which can help with a rapid assessment of the public health risks posed by mercury toxicity. The Pollution Management and Environmental Health (PMEH) Program was established in 2015 as a Multi-Donor Trust Fund (MDTF) under the Environment and Natural Resources Global Practice Group. The program aims to help client countries reduce air, land and waste pollution level and associated health risks. It establishes a systematic approach to enhance the government’s environmental management capacity and promote data-driven decision-making and pollution control planning. The Contaminated and Toxic Sites (CTS) management project is one of the Program’s three main components and supports countries’ effort to strengthen political prioritization and action-taking related to contaminated and toxic sites. Under this project PMEH is providing resources to identify and characterize approximately 100 contaminated and toxic sites across Ghana. PMEH support will also carry out in-depth analysis/research of two or three sites to assess the health and related economic effects of toxic land pollution. This analysis aims to gather enough knowledge to extrapolate conclusions to a general level and contribute to decision making. The analytical activity aims to: inform the identification and costing of mitigation and clean-up solutions; develop locally-adapted decision-making tools and guidelines on toxic sites/ land pollution management; organize technical events and educational activities on protocols and guidelines to increase awareness and build capacity; and establish monitoring systems. Learning from the Frugal Reclamation report from Mongolia 7. While large-scale mining operations often make headlines, there are an estimated 100,000 small-scale artisanal miners in Mongolia who work independently and make up nearly 20 percent of Mongolia’s rural workforce. Due to perceptions around the negative impact that their mining activities have on the environment, however, they are marginalized from society, further preventing them from achieving full economic potential and, crucially, from developing more sustainable environmental practices. Recently, however, better government recognition of artisanal miners’ large role in society, as well as an increase in public awareness, that perception is slowly changing. As a result, Mongolia’s artisanal miners are gradually becoming more formalized and recognized as important contributors to the economy. To maintain and scale- up this progress toward greater formalization, the artisanal mining sector needs to better address its negative environmental impacts. 8. The Asia Foundation is working through the Engaging Stakeholders in Environmental Conservation Project (ESEC II) to address the environmental challenges of ASM by helping to mitigate the negative environmental impacts of past and present mining practices through the provision of environmental tools, capacity-building, and encouraging a collaborative planning approach to permitting and environmental management. By introducing responsible and sustainable ASM rehabilitation approaches that are economically affordable and socially acceptable, the Asia Foundation is working to increase formalization through the development of a frugal rehabilitation methodology – a practical tool that, through eventual formal endorsement by national stakeholders, can provide the sector and the government with an accepted industry standard. Frugal Page 93 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) rehabilitation differs from more standard approaches to the rehabilitation of land in that it strives to be economically affordable to the artisanal and small-scale mining sector and to local government. It also needs to be socially acceptable, addressing the concerns and interests of the wider communities within which mining is occurring. Lastly and importantly, it needs to be ecologically viable so that the rehabilitated land can be used sustainably. 9. To develop a methodology that could win broad acceptance across both national and local stakeholders, the project incorporated practical approaches that met the above criteria at eight project sites across Mongolia. Sites were selected out of 12 areas of degraded and abandoned lands that had experienced informal artisanal mining of gold and fluorspar, two of the widespread forms of ASM in Mongolia. Most sites were areas where alluvial mining had occurred – the dominant form of gold mining in the country. However, both hard-rock gold and fluorspar mining areas were chosen to ensure that the resulting methodology was applicable to such situations. The eight pilot sites were spread across a range of ecological zones, from tall grass steppe in the east, to forest and forest steppe in the north, to mountain and desert steppe in the south and west. 10. The methodology is built on a toolkit that allows rehabilitation to be achieved in an economically affordable, socially acceptable and ecologically viable way. The Frugal Rehabilitation Manual emerged from the ESEC II’s collaborative efforts to implement Frugal Rehabilitation Demonstration (FRD) projects across 17 locations within nine aimags. The toolkit is designed to help ASM NGOs demonstrate their environmental responsibility through best practice and provide support to the formalization process within the ASM sub- sector by improving such organizations’ “license to operate” through encouraging and guiding positive engagement with stakeholders on social and environmental responsibility. (See https://asiafoundation.org/resources/pdfs/MongoliaESECFactSheet.pdf ) Forest Smart Mining – Identifying Good and Bad Practices of Artisanal and Small-Scale Mining (ASM) in Forested Landscapes. (PROFOR Financing) 11. Under the subject global analytical activity, the World Bank commissioned a case study in Ghana to provide early background information that could inform the FIP AF design. Levin Sources and SRC Consulting undertook the study, paying particular attention to policy reforms, institutional strengthening, pilot investments, innovation, capacity building and communication and monitoring and coordination. The early study developed conclusions and recommendations in the topic areas of policy and coordination, the design and location of pilot sites (include forested sites, cocoa agroforestry areas, CREMA sites, align with MMIP, etc.), the promotion of improved rehabilitation technology (particularly valuable for influencing wider MMIP investments), and coordination issues (use of focal points, using external contractors for implementation). Organizations and Projects Currently Rehabilitating Mined-Out Areas in Ghana 12 The following table briefly describes recent and ongoing activities of various organizations in Ghana that are conducting land rehabilitation exercises in mined-out areas. Page 94 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Table 7.1: List of Organizations and Projects Currently Rehabilitating Mined-Out Areas in Ghana Organization Project and Operation The Okyeman Organized a tree planting exercise at a former galamsey site at Bronikrom, Kyebi, Eastern Foundation Region. The Rebecca Mobilizing 1,500+ women in each region across the country to support land reclamation Akufo-Addo efforts. Foundation Kyebi Reclamation Planning to rehabilitate 18 illegal mining sites in Kyebi, Eastern Region. The project is a Project collaboration between the Ministries of Lands and Natural Resources; Environment, Science, Technology and Innovation; Local Government and Rural Development; other Ministries involved in the fight against illegal mining; and the Okyehene Foundation, Rebecca Akufo-Addo Foundation, and Richie Foundation. Newmont Ghana Conducts reclamation concurrent to operations and after mine closure.  Reclaimed 22 hectares with native and exotic tree species between 2009-2012 (Ahafo, Brong Ahafo Region).  Constructed a 70,000 seedling greenhouse; established a four-hectare vetiver plantation; planted 1,600 ornamental plants in Yayaaso resettlement village; establishing a ½ hectare medicinal plant farm; pursuing reforestation offset program with FC (Akyem, Eastern Region) Golden Star Conducts initiatives of progressive rehabilitation of pits and waste dumps; backfilling pits for future land use as agreed to with stakeholders; economic livelihood oil palm project for artisanal miners and community members (Bogoso and Prestea, Western Region).Golden Star Oil Palm Plantation (GSOPP) is a non-profit subsidiary of Golden Star whose objectives are to reduce poverty through employment generation and promote wealth creation through sustainable agribusiness. As of the end of 2016, GSOPP had 317 smallholder farmers and 350 contract workers cultivating 1,053 hectares of plantation. Proforest Limited Aims to reclaim 5,000+ ha of mined-out land in 20 major communities in the Fanteakwa District and the East Akyem Municipality of the Eastern Region by year 2020. Includes use of demonstration plot, nursing and planting of at least 2.5 million suitable tree and crop species, development of income generating ventures for women and youth, and use of reclaimed sites as a learning facility for inter-cultural tourism and youth placement programs. Page 95 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Annex 8: FIP ENFAL AF Alignment with Global FIP Purpose and Criteria This Annex describes how the AF responds to the FIP’s overall purpose (Design Document, CIF/FIP, Paragraph 10, 2009). The overall purpose of FIP is to finance efforts to address the underlying causes of deforestation and degradation and overcome barriers that have hindered past efforts, to support REDD+ efforts, to provide up-front bridge financing for readiness reforms, and for public and private investments identified through national readiness strategies. Country FIP programs should take account of opportunities to help adapt to the impacts of climate change and contribute to multiple benefits such as biodiversity conservation, protection of the rights of indigenous peoples and local communities, poverty reduction and rural livelihoods. This table shows where key FIP criteria are addressed in this Project Document. Table 8.1: Ghana FIP Alignment with FIP Investment Criteria FIP Criteria GHANA FIP AF a. Climate change mitigation Aims to rehabilitate selected mined-out areas and to promote timber potential plantations, which will ultimately contribute to enhancing carbon stocks in soils and vegetation. (Component 2). b. Demonstration potential at Interventions are designed as pilots for learning and wider dissemination. scale Component 2c aims at disseminating lessons learned for uptake and replication beyond pilot sites. Component 3 includes resources for communication and outreach. c. Cost-effectiveness Section IV provides an economic analysis of the projects benefits and costs, a FM analysis to ensure monitoring of commitments, and a fiduciary risk analysis and mitigation plan to ensure cost effective utilization of funds. d. Implementation potential The AF fits into and builds upon existing, successful FIP ENFAL implementation structures, demonstration pilot approaches, community engagement efforts, land use planning and management processes, and outreach and communication tools (Introduction). e. Integrating sustainable Project Background and Rationale (Section II) shows how the FIP AF effort fits development (co-benefits) into Ghana’s sustainable development program, as in the GSGDA, and into the WBG overall Country Partnership Strategy. Co-benefits and beneficiaries are discussed in Section III. f. Safeguards Section IV explains the safeguard instruments that will be used to avoid and mitigate adverse environmental and social impacts. Additional issues of interest to FIP Addressing drivers of Focuses on addressing two key drivers of deforestation: illegal ASGM and deforestation and unsustainable harvesting. Plantation activities aim to increase timber degradation production and mine site rehabilitation demonstrations aim to reduce land and forest degradation. See Background and Rationale. Capacity building Components 2c and 3 provide resources for learning, capacity building, and technical assistance. Component 2a reinforces the work with CREMA’s, which has been established under the parent project. Coordinating with other Background and Rationale describes how the FIP AF integrates with REDD+ REDD+ efforts related activities of other development partners, and the FCPF. Basically, it will build upon the existing coordination and collaboration platforms developed under Ghana’s REDD+ initiative. Page 96 of 97 The World Bank Additional Financing for Ghana Forest Investment Program (FIP) - Enhancing Natural Forest and Agroforest Landscapes Project (P163745) Forest-related governance Component 1 continues to improve policy interpretation / implementation and strengthen institutional capacity advancements made under FIP ENFAL to protect natural resources from the impacts of illegal ASM. Inclusiveness of process and FIP AF improves stakeholder inclusion and engagement through a broader PCU participation of stakeholders (Section IV, Change in Institutional Arrangements) and increased stakeholder consultations (Components 1, 2). The multi-sectoral and integrated approach in implementing the project will continue and open the way for more stakeholders to participate. Leveraging AF including Activities in Component 2b aim to further improve the enabling environment private sector for private investment in timber plantations, which is a critical aspect of FIP ENFAL. Measurable outcomes and Component 4 provides resources for the M&E system. Annex 1 provides the results-based approach complete results framework. (Source: FIP: Investment Criteria and Financing Modalities. CIF. June 29, 2010) Page 97 of 97