The Netherlands - Mongolia Trust Fund for Environmental Reform (NEMO TF) A New Approach to Environmental Partnerships fo

1. The Netherlands - Mongolia Trust Fund for Environmental Reform (NEMO TF)A New Approach to Environmental Partnerships for IDA Countries Tony Whitten and Giovanna Dore January 18th, 2007 Washington D.C.

2. Outline • Context • Environmental Challenges • The NEMO TF • Lessons Learned

3. Mongolia - Context Mongolia: • Is a large, landlocked country (1.564 Km2) in Central Asia • Has a total population is 2.3 million (2000 Census): • 30% of which lives in Ulaanbaatar; • Overall, 78% of total population lives in ger areas; about 60% of urban population still lives in ger areas • Is one of the most sparsely populated countries in the world (1.63 people per Km 2) • Is heavily dependent on natural resources and the environment for its development and economic growth

4. Mongolia – Environmental Challenges • By the standards of many other countries, Mongolia’s environment is relatively unspoilt. However, emerging areas of concern include: • Growing population and changing lifestyles are intensifying pressure on the country’s fragile ecosystems • Overgrazing is degrading significant areas and displacing wildlife from his habitats • Pollution from industrial and urban sources is negatively affecting environmental quality • Human and financial resources for environment and natural resources management are limited, and institutional capacity is weak

5. Environmental Hotspots

6. NEMO TF • NEMO TF was established in November 2004, with an endowment of US$ 5.88 million from the Dutch Government, and a disbursement timeline of 12 months • NEMO TF I had three components: • Bank-executed technical assistance ($ 1.1 million + $ 0. 380 million for contingency) • Government-executed support for on-going projects ($ 3.6 million) • Government-executed preparation of new projects ($ 0.8 million) • NEMO TF was an outstanding opportunity to achieve progress on environmental governance in Mongolia • Phase I focused on strengthening the existing knowledge-base and filling knowledge gaps, raised the visibility of environmental affairs, and broadened the pool of environmental practitioners • Phase II aims at establishing a multi-year, thematic program focusing on few key areas

7. Component I: Self-standing TA • AAA activities under this component focused: • Natural Resources Management • Illegal Wildlife Trade in Mongolia • Forest Cover Mapping of Arkhangai, Khuvsgul & Bulgan Aimags • Assessment of the Success of Reforestation Projects • Updating Nomenclature of Selected Groups of Animals and Plants of Economic and Conservation Importance • Conference on Buddhism and the Environment • Environmental Management • Social and Environmental Impacts of Tourism Development • Moving up the value-chain in livestock-based industries: Implications for Env. Policy, Regulations and Management • Urban Environmental Services in Secondary Cities in Mongolia • Review of Toxic Chemicals Used in Mongolia • Environmental Footprint of the Infrastructure Strategy • NEMO TF Independent External Review

8. Component I - Highlights Mongolia An Innovative Approach to Toxic and Hazardous Substance Management Mongolia Investment Climate Assessment 2007

9. Highlights - Conference on BuddhismEcology and Development • June 20-24,2005, attended by 230 people, including 100 monks from Mongolia and 30 others from neighboring countries • Active Presidential involvement • The Conference featured sessions about the ways in which Buddhists are engaging in environmental management as well as education, governance, transparency and financial management

10. Component II: Co-financing of Environment Components in WB Projects Second Urban Services Improvement Project • Total Loan Amount: US$ 20 million (an IDA Credit of US$16 M; an AusAID Grant of US$3.35 M, and an UB Municipality contribution of US$2.3 million); • Total Dutch Co-financing: US$ 1,850,000 for Community Development Sanitation in Ger Areas of Ulaanbaatar and the Geser Sum Sacred Urban Landscape Protection Initiative Sustainable Livelihood Project • Total Loan Amount: US$ 22 million (APL) • Total Dutch Co-financing: US$ 200,000 for assessment of Impacts of Well Rehabilitation (such as those financed under the project) on Wild Ass in the Gobi Desert

11. Highlights - Second Urban Services Improvement Project • The implementation of the co-financed activities under USIP 2 was one of the two most successful sub-components • The MNE signed an MOU with the Ulaanbaatar Municipality to formalize the collaboration between the two agencies • Covered drainage works, park rehabilitation, plant nurseries, urban greening, hayfever study, ger camp sanitation

12. Component II: Co-financing of Environment Components in WB Projects (II) • Dynamics of Biodiversity Loss and Permafrost Melt in Lake Hovsgol National Park Project • Total Grant Amount: US$ 1 million (GEF MSP) • Total Dutch Co-financing: US$ 250,000 for the organization of the Workshop and Associated Training Program on Ecosystem Dynamics and Environmental Management • Strengthening Environmental Management Capacity at National and Local Level Project • Total Grant Amount: US$ 270,000 (IDF Grant for IDA Countries) • Total Dutch Co-financing: US$ 1.2 million for Small Grants Program through Open Society Forum

13. I’ll insert a hovsgol pic or two

14. Highlights – Impacts of Well Rehabilitation on Wild Ass in the Gobi Desert Internationally-renowned lead consultants, a Mongolian team, and a supplier for appropriate radio collars performed the forage and the tracking parts of the work

15. Highlights – The NEMO Small Grants Facility • A $1 million dollars, small-grant facility was established, managed on behalf of MNE by the Open Society Forum • Grants for outcome-oriented capacity building activities at national/local levels • 400 proposals submitted, 62 chosen, ranging from reviews of legislation, to children’s cartoon books, to soil pollution, to conservation of deer, to EIA training for banks, and recycling of plastic bottles and bags to make fences, etc. • The OSF team travelled 20,000 km across Mongolia to advertise and explain the small grant program, and supervise the activities • Grantees participated in networking fairs, and TV series have further disseminated the accomplishments of the program

16. Component III: Project Development • The main objective of this component was to facilitate the development of environment and natural resources management projects • Effort focused on: • Forest Resources Management Project • Proposed Loan Amount: US$ 5 million IDA + GEF • Total Dutch Co-Financing: US$ 300,000 • Retrofitting of Polluting and Inefficient Heat-only Boilers in Ulaanbaatar and Selected Aimags • Proposed Grant Amount: US$ 4 million (GEF grant) • Total Dutch Co-Financing: US$ 150,000

17. NEMO TF Lessons Learned • ‘Where there is a will there is a way’ ; NEMO I disbursed 95% of its total endowment in 18 months … but: • The Bank-executed activities (all under Component I) were complex; however, their implementation has been straightforward and on schedule • The implementation of the Government-executed activities involved six agencies, experienced same delays, and extensive supervision • A one-year timeline to complete the implementation of the activities and disbursements of funds proved to be challenging in the context of a country like Mongolia

18. NEMO TF Lessons Learned • Flexibility is a key for the success of partnerships (‘Flexibility is the charm of the NEMO program’): • allowed to meet the demand of clients and also support additional activities not originally included in the program • helped strengthen cross-sectoral linkages with the ongoing urban, energy and rural development agendas

19. NEMO TF Lessons Learned • Broad coverage initiatives are effective • raised the visibility of environmental affairs, both at national and local level • strengthening the existing knowledge-base and filling knowledge gaps • supported MNE shifting toward a more consistent and outcome–oriented approach to addressing key issues in the natural resources and environment sectors well aligned with government’s development policies • helped broaden the pool of environmental practitioners accessing resources to improve their skills and fund small and medium-size activities at the local level, with the participation of local communities

20. NEMO TF Next Steps • NEMO II is in its preparation stage and it is likely to: • Be structured across a four-year period, be launched in January 2007, and have a total endowment of 5 million dollars, with an annual allocation of 1.25 million dollars • Emphasize mainstreaming and cross-sectoral coordination on the environmental agenda, supporting capacity building of government agencies and working in partnership with civil society organizations and local communities • Focus on two to three key themes per year, which could be repeated and/or carried over subsequent years (if appropriate/needed) • Include a contingency window to allow support for additional activities (no more than one and/or two), not originally included in the program

21. NEMO TF Next Steps • Discussions with MNE and Dutch counterparts have identified Natural Resources Management, Pollution Management, and Environmental Governance as themes for NEMO II • These are areas of interest because: • Mongolia still needs to make significant progress to be able to meet its MDG targets • there remains substantial knowledge, technical, institutional and financial gaps in spite of the various lending and non-lending programs being developed and implemented by the Bank and other donors