SUSTAINABLE FINANCING FOR « PROTECTED AREAS » IN MADAGASCAR – A SHORT OVERVIEW

1. SUSTAINABLE FINANCING FOR « PROTECTED AREAS »IN MADAGASCAR – A SHORT OVERVIEW Jean-Paul Paddack WWF Madagascar and West Indian Ocean Programme ABCG Meeting – Washington, DC, 09 June 2005

2. President Marc Ravalomanana announced his “Durban Vision” at the World Parks Congress -- here with WWF International’s DG, Claude Martin, and Luc Hoffmann, Founder and WWF VP Emeritus

3. September 17, 2003: « …je veux vous faire partie de notre résolution à porter la surface des aires protégées de 1.7 millions d’hectares à 6 million d’hectares dans les cinq ans à venir, et en référence aux catégories des aires protégées de l’UICN. »

4. MADAGASCAR’S BIODIVERSITY • One of the 17 mega-biodiversity countries representing 80% of world’s biodiversity • 10,000 plant species identified, of which 80% endemic • Close to 100% of lemurs are endemic • 280 bird species, 110 endemic • 346 reptile species, 314 endemic « The single highest major biodiversity conservation priority in the world » page 4

5. Madagascar’s Protected Areas Network

6. Madagascar’s Future Protected Areas Network “Durban Vision”

8. CONTEXT

9. HISTORICAL CONTEXT • NEAP: Launched in 1990, divided into three 5-year phases: • EP1 (1991-1996): Regulatory framework and institutions • EP2 (1997-2002): Consolidation and scaling-up • EP3 (2003-2008): Mainstreaming and sustainability

10. Launching the Process • July 2000: First workshop on sustainable financing in the environment sector (middle of EP 2) • September 2000: establishment of the Sustainable Financing Commission (SFC). • March-April 2001: Study tour to the Americas. • May 2001: International Symposium on Sust.Financing of PAs/Biodiversity orgnaised by IUCN, WWF & ANGAP • September 2001: Creation of Steering Committee for Foundation/Trust Fund

11. A Typology of Financing Instruments • Special Instruments such as trust funds, debts swaps • Tourism-related fees, concessions or taxes • Sector-based environmental fees • Ecological payments for environmental services • Private sector investments

12. Feasibility Analysis: Priorities Will most likely be used and is relatively easy to implement Will likely be used with some implementation difficulties Will be difficult to implement Difficult and unlikely in short to medium term

13. Specific Mechanisms Strategic Framework Public Funds Trust Fund HIPC Debt conv.

14. Fees from Tourism Sector Park fees Concession Activity Diving Plane Cruises Hotel rooms

15. Taxes and fees Ext N.R. Ext Petroleum Ext Fisher. Bioprospect FFN Fuel Lottery

16. Potential new sources of funding? • Mining sector through some form of taxation? • Private mining sector through partnerships: QMM in Fort Dauphin? Phelps Dodge in Ambatondrazaka?

17. Private Sector Mobil. Environmental Services Grants Loans Watershed Cons.Conc. CO2

18. A FOUNDATION AND TRUST FUND

19. STEERING COMMITTEE Created by Minister of Environment on September 2001 to « set up a Trust Fund to contribute to the funding of biodiversity and protected areas conservation in Madagascar » Includes 7 members from the National Park Service (ANGAP), Sustainable Financing Commission, banking, legal and private sectors, and, national and international NGOs. Mandate includes: - Conceive the Trust Fund’s profile - Draft Procedures Manual - Develop fund-raising strategy - Develop investment policy - Operationalize Trust Fund

20. FUNDING SOURCES SECURED – In Sum: USD • CI and WWF (1 M each): 2,000,000 • BMZ/KfW (Germany): 3,200,000 • Malagasy Government: 12,000,000 (over 19 yrs) • World Bank: 7,500,000 (grant) • GEF: 10,000,000 • BMZ/KfW (Germany) 3,200,000 (2nd tranche) • Private Sector ???? ______________ 37,700,000

21. MOBILISING PUBLIC FINANCINGFOR THE ENVIRONMENT SECTOR

22. Summary of Main Findings (1) • PRSP environmental strategy does not reflect finalization of the third phase of the environmental program (PE3) and the “Durban Vision” aiming at increasing protected areas from 1.7 million ha to 6.0 million ha. • Full costing of the environmental strategy remains to be completed and extended to take into account the implementation of the “Durban Vision”. • Less than 1% of the freed HIPC resources since 2001 have been used for environmental purposes, compared with an initial commitment of using up to 10% of the total debt relief for this purpose.

23. Summary findings (2) • The treatment of the environmental sector in the government’s budget is not transparent and prevents effective reviews of public expenditure in the sector: (i) the relations between the budget and executing agencies of the environmental policy are not apparent; and (ii) foreign-financed projects include large amounts of current expenditure that are recorded in investment under the current economic classification of expenditure. • Sustainable financing of the environment and biodiversity conservation should be treated as a global issue of public finance and budgetary policy, not an issue of tax policy

24. Some Lessons Learned (1) • 1. LEADERSHIP – PRESIDENT, MINISTRY OF ENVIRONMENT, NGOs, DONORS. • 2. ENVIRONMENT SECTOR MULTI-DONOR SECRETARIAT, AND PARTNERSHIPS.  • 3. FORMALISING THE DIALOGUE ON SUSTAINABLE FINANCING, WITH MANDATE FROM THE MINISTER OF ENVIRONMENT. • 4. COLLABORATION OF MINISTRY OF FINANCE AND ENVIRONMENT.

25. Some Lessons Learned (2) • 5. DEVELOP ECONOMIC JUSTIFICATIONS TO “SELL” / EXPLAIN THE ENVIRONMENT TO PUBLIC FINANCE MINISTRIES. BIODIVERSITY CONSERVATION CONTRIBUTES TO POVERTY ALLEVIATION. • 6. DEVELOP PROPER COSTING PROJECTIONS – PROTECTED AREAS AND FOUNDATION, EARLY ON. • 7. BUILD ONE SUCCESS FIRST, THEN ANOTHER… SUCCESS BREEDS SUCCESS.

26. THANK YOU FOR YOUR ATTENTION!