ecosystems and urban adaptation in lao pdr...change threats at basin’s scale are floods, drought,...

Ecosystems and Urban Adaptation in Lao PDR Lao PDR | United Nations Environment Programme (UNEP)

3 July 2015

Project/Programme Title: Ecosystems and Urban Adaptation in LAO PDR

Country/Region: Lao PDR

Accredited Entity: UNEP

National Designated Authority: Water Resources and Environment Administration, (WREA), Department of Environment

PROJECT / PROGRAMME CONCEPT NOTE GREEN CLIMATE FUND | PAGE 1 OF 45

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I. Project / Programme Information 1.1. Project / Programme

Name Ecosystems and Urban Adaptation in LAO PDR

1.2. Project or Programme Project 1.3. Country (ies) / Region Lao PDR / South East Asia 1.4. National Designated Authority(ies)

Water Resources and Environment Administration, (WREA), Department of Environment

1.5. Accredited Entity UNEP 1.6. Executing entity / Beneficiary

Executing Entity: MONRE (Ministry on Natural Resources and Environment)

1.7. Access modality Direct ☐ International ☒

1.8. Project size category (total investment, million USD)

Micro (≤10) ☐ Small (10<x≤50) ☒

Medium (50<x≤250) ☐

Large (>250) ☐

1.9. Mitigation / Adaptation focus

Mitigation ☐ Adaptation ☒ Cross-cutting ☒

1.10. Results areas (mark all that apply)

Which of the following targeted results areas does the proposed project/programme address?

Reduced emissions from: □ Energy access and power generation

(E.g. on-grid, micro-grid or off-grid solar, wind, geothermal, etc.) □ Low emission transport

(E.g. high-speed rail, rapid bus system, etc.) □ Buildings, cities, industries and appliances

(E.g. new and retrofitted energy-efficient buildings, energy-efficient equipment for companies and supply chain management, etc.)

☒ Forestry and land use (E.g. forest conservation and management, agroforestry, agricultural irrigation, water treatment and management, etc.)

Increased resilience of: ☒ Most vulnerable people and communities

(E.g. mitigation of operational risk associated with climate change – diversification of supply sources and supply chain management, relocation of manufacturing facilities and warehouses, etc.)

☒ Health and well-being, and food and water security (E.g. climate-resilient crops, efficient irrigation systems, etc.)

☒ Infrastructure and built environment (E.g. sea walls, resilient road networks, etc.)

☒ Ecosystems and ecosystem services (E.g. ecosystem conservation and management, ecotourism, etc.)

1.11. Project / programme life span ………5…… years

1.12. Estimated implementation start and end Date

Start: …01/01/2016……………………... End: …31/12/2020……………………….

1 Please use the following naming convention for the file name: “[CN]-[Agency short name]-[Date]-[Serial number]” (e.g. CN-ABC-20150101-1).

mailto:[email protected]


II. Project/Programme Details The Fund requires the following preliminary information in order to promptly assess the eligibility of project/programme investment. These requirements may vary depending on the nature of the project/programme.

2.1. Project/programme description (including objectives)

Project baseline situation Lao PDR is a Landlocked Least Developed Country (LLDC) characterized by low levels of per capita income (2013 GDP per capita, $US 16602), low levels of human resource development, and lack of economic diversification. It has been successfully transitioning from a centrally- planned economy to a much more market-based system since the introduction of the New Economic Mechanism (NEM) in 1986. This has contributed to relatively high economic growth over much of the past two decades including GDP growth averaging more than 7 percent per annum between 2001 and 2010; economic growth has been largely driven by private investments which account for 60% of growth. The fast-growing economy of Lao PDR is largely based on its wealth of natural resources, with over 50% of GDP derived from agriculture, forestry, mining and hydropower over the past decade. Overall poverty has almost halved over the past two decades from 46 percent in 1992-93 to 26.7 % in 2007-08 and significant progress has been achieved with regard to a number of other MDGs. Over the same period the Human Development Index for Lao PDR improved steadily from 0.240 to 0.497. Nevertheless, poverty persists throughout the country and the major challenges include food security, access to clean water, sanitation, and limited access to cultivation land, education and employment. 3

Cities have been pre-identified for an urban EBA intervention (final choice will be done together with representatives from the national government), based on a combination of urban and climate criteria, i.e. we chose fast-growing cities presenting specific opportunities for EBA interventions:

� Greater Vientiane (capital city, population: 570,000) 4, � Savannahkhét (“secondary city”): 81,4015, � Luang Prabang (“secondary city”), Luang Prabang (population: 55,027)6.

All three are located along the Mekong River (see map in ANNEX I), particularly exposed to climate change.

Key features

./ One of Asia’s least-developed, yet most natural resource-rich countries, with substantial

direct dependence on natural resources both for the livelihoods and incomes of its population, and income for the national treasury. Biodiversity is a major source of wealth for the country.

./ Urbanization is growing (urbanization rate is currently 4.9% 7 ) in a country still predominantly rural (current estimate: 27% of the population live in urban areas), with urban populations along the Mekong at risk of climate change, especially of extreme events such as storms and flooding.

./ The country is already vulnerable to climate variability and disasters. Losses from floods account for some 2.8-3.6% of the country’s GDP and about 2.7% of the government’s total spending annually 8 .The Human Development Report states that persistent vulnerability threatens human development. Reducing the impact of disasters in Lao PDR is a priority of the government due to the increasing number of persons affected and economic development caused by disasters.

2 The World Bank, http://data.worldbank.org/indicator/NY.GDP.PCAP.CD 3 United Nations Development Programme, Country: Lao PDR, Programme Document, Realizing the MDGs in Lao PDR - Consolidated Programme of Support to MPI for the Achievement of the Valuable Goals of the 7th NSEDP 2011-15 4 ADB, LAO PDR - Urban Development Sector Assessment, Strategy, and Road Map, 2012 5 ADB, ibid 6 ADB, ibid 7 The World Factbook. Available from: https://www.cia.gov/library/publications/the-world-factbook/geos/cb.html 8 World Bank, 2014 (from a presentation made by MONRE at the 2nd Mekong CC Forum)

http://data.worldbank.org/indicator/NY.GDP.PCAP.CD

http://www.cia.gov/library/publications/the-world-factbook/geos/cb.html


Effects of climate change

A current high vulnerability to climate variability Being a landlocked country, the country is highly vulnerable to flooding and drought. The extended amount of rainfall during the wet season results in the flooding of lowly elevated provinces located in the southern and northern parts of the country. In the dry season, the observed temperature has become hotter resulting in prolonged dry season thus inhibiting the planting of crops and rearing of livestock and fisheries, the consequence of which is shortfalls in agricultural production and land productivity9. An estimated 188,000 households in Lao PDR are estimated to be currently at risk of food insecurity caused by drought10. Natural disasters are very common in Laos – droughts, river basin floods, flash floods and storms. From 1970 to 2010, 33 natural hazard events were logged, mostly floods and droughts; they affected almost 9 million people and caused economic damages of over US$400 million11. A specific climate change exposure of the Mekong Basin area The Mekong River is considered to be one of the most vulnerable rivers in Southeast Asia to global change (flash floods, base flows); the vulnerability of the rivers in this region is due to the low storage capacity associated with steep slopes and shallow water. Maximum monthly flows in the Mekong Basin may thus increase by 35-41%, while minimum monthly flows will drop by 17-24% by 2100, further exacerbating flood and drought risks.12 Common climate change threats at basin’s scale are floods, drought, water and food security. Climate change will have impacts on hydrology, ecology, agriculture, fisheries and aquaculture, navigation and hydro-power development, all of which are core interests to the Mekong River countries and particularly Lao RDC. Biophysical changes due to climate change will impact on people’s livelihoods, with implications for sustainable development and the well-being of people of the region. Significant climate change impacts expected for Lao PDR Recent reviews13 that draw on Asia-specific projections in the Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report and other research summarizes the expected climate change impacts in Lao PDR as follows: � Annual mean temperatures will continue to rise by 0.1-0.3°C per decade, and the number

of days with temperatures above 33°C will increase; � The number of cooler days with temperatures below 15°C will drop by two to three weeks

per year; � Dry seasons will get longer; � There will be more intense rainfall events, and more frequent and severe droughts and

floods.

The country profile by the Global Facility for Disaster Reduction and Recovery (GFDRR) notes that country-specific data are very limited; Lao PDR having very distinct climatic zones, it is even more difficult to extrapolate from regional models14. The review finds that mean average temperatures are projected to increase by 1.4°C – 4.3°C by 2100. The models differ on whether warming will also be similar across all of Laos’ regions, or less pronounced in the south than in the north and north-central zones. Mean annual rainfall is projected to increase, particularly in the wet season. More wet days are also expected across the southern Mekong River Basin. All models project an increase in the magnitude and frequency of extreme events. Food security is expected to decrease as agriculture – especially rice production – is affected by rising temperatures and shifts in rainfall, evaporation, run-off water, and soil moisture; existing food insecurity could be worsened by increased drought occurence. The agricultural lands along the Mekong River and its tributaries, meanwhile, are expected to be harder-hit by floods, which have already destroyed vast areas of rice paddy in recent years. The risk of epidemics could also increase: in the past four decades, Laos has experienced eight epidemics, including a cholera outbreak in 1994 that killed 500 people and affected 8,000; these epidemics are associated with floods and droughts. Rising temperatures will increase the incidence and range of pests and, and water supplies may be affected. Disasters and increased poverty could lead to increased migration and displacement.

9 UNDP, Improving the Resilience of the Agriculture Sector in Lao PDR to Climate Change Impacts (IRAS Lao Project), 2011 10 EcoLao, Scoping Assessment of Climate Change Adaptation Priorities in the Lao PDR, 2012 11 EcoLao, Ibid 12 Costa-Cabral et al., 2008 - Hydrol. Process. 13 Global Facility for Disaster Reduction and Recovery’s recent country profile (The World Bank, 2011); additional content from Inagaki et al. (2011), an AKP report. 14 ibid


The government is fully aware of climate issues and has shown a strong commitment. A

National Adaptation Program of Action (NAPA) was approved in 2009, which identified water, agriculture and forestry, and public health as high-priority, at-risk sectors due to climate change. 45 projects were identified and 12 classified as urgent and immediate for an estimated total cost of 85 Million US$.

City scale Climate vulnerability characterization at city or provincial scale is not available – it will be delivered during the programme. As a first approach, the 3 pre-tagged cities share common threats related to monsoon flooding and to food and water security in a context of growing urbanization. Evidently each of the city will present specific vulnerabilities and opportunities depending on the city characteristics and dynamics but also on the surroundings interacting / provisioning the city. Some key impacting features are presented below as illustration: > Vientiane: encroachment of the built-up areas on the marshlands located around the core urban area as well as from the impact on surrounding forests (total area of the forests decreased from more than 2354 km2 in 1995 to approximately 1353 km2 in 2011) and on agricultural land; connected to a high priority wetland (That Luang swamp); > Luang Prabang: Situated at the crossing of the Mekong and Nam Khan rivers with consequent increased exposure to floods; a World Heritage site, with a growing prestige entailing an exponential growth in tourism over the past decade and consequent pressures on urban services; > Savannahkhét: Situated on East–West Economic Corridor – and on the intercorridor link, which is inducing a continued and potentially rapid urban growth that necessitates action to strengthen physical infrastructure and urban management capacities in a sustainable way; potentially interacting with a high priority wetland (Xe Champhone wetlands – Ramsar Site). The Savannahkhét has been ranked as the most vulnerable province in terms of rice production by the Ministry of Agriculture (2012).

The challenge to address Failing to see the linkages between functional ecosystems and water security, food security, and disaster risk reduction is already placing millions of lives and livelihoods at risk. Securing ecosystem services for urban populations is not only a climate change issue, but also a societal development, equity and justice issue. It is the poorest people in developing countries who most directly rely on ecosystem services for their livelihoods. And where low income urban dwellers are pushed to the physical margins of the city (e.g. steep slopes) they may become even more vulnerable to extreme weather events, as well as undermine the ecosystem services that would otherwise be provided to all city dwellers Insufficient attention is paid so far to the symbiotic relationship between functioning ecosystem services and the urban populations benefiting from those services. This is in part due to the complex nature of the urban environment with its own pressures and challenges; a lack of knowledge on the multiple values and benefits of ecosystem services; as well as a lack of institutional capacity (and therefore ability to respond) regarding long term climate scenarios and impacts at the city level. It is also a consequence of political and administrative boundaries, limiting municipal authorities to consider a landscape-scale approach to ecosystem services management as part of their city development and urban adaptation planning processes. In the case of LAO PDR, the country is facing a rapid and accelerating urbanization – more particularly along the economic corridors - that may threaten highly valuable ecosystems while being exposed to significant climate threats. There is then a current window of opportunity to act now to build a more resilient future for cities, by ensuring that ecosystems provide long term cost effective adaptation benefits for growing urban populations.

The solutions to mobilize The future resilience of urban landscapes will largely depend on how climate and non-climate drivers are tackled together. Addressing the urban adaptation agenda will require innovative initiatives that are appropriately scaled to incorporate not only the cityscape but also the broader surrounding biophysical landscape that, both directly and indirectly, influences the health of the urban system and the populations that live in them.


This requires conservation and restoration efforts on inner-city and surrounding ecological

systems to secure the services these ecosystems provide to the urban population. Services include provisioning services such as food and water; regulating services such as climate and flood control; and supporting services, such as nutrient cycling and crop pollination. Ecological components that run though a city (i.e. rivers) and those within the boundaries of the urban area (i.e. green spaces) have a vital role to play in maintaining a healthy city. The management of urban ecosystems has the potential to contribute very significantly to the overall resilience of the city to climate-induced disturbances and other pressures, what requires interventions at different scales, beyond city’s boundaries (e.g. watershed boundaries) but also within the city (e.g. green and blue spaces), to embed in the national policy framework and institutional context.

The overarching objective of the project The programme prioritises the provision, access and use of essential ecosystem services to urban populations; these include provisioning services such as food and water; regulating services such as climate and flood control; and supporting services, such as nutrient cycling and crop pollination that maintain the conditions for life on Earth. It will invest in restoration and management of ecosystems surrounding and interacting with urban areas, as well as investment in city level planning, green infrastructure and building codes, and will promote ecosystems based adaptation as a cost-effective and inclusive climate adaptation strategy. Given the complexity of issues to address, ecosystem-based measures will be completed by complementary solutions to secure the overall cost-effectiveness of the programme. Intervention at national scale will be a prerequisite in order to frame the most relevant and efficient ways for local intervention, while ensuring overall consistency of the operations and enabling the upscaling of the project’s results.

The project’s overview The project’s activity components are introduced thereafter. A provisional result’s framework is provided in ANNEX IV.

The process

� Component 1: Scoping phase (national scale)

• Kick-off mission


• Evidence base framing: knowledge on the effectiveness of urban EbA collated,

reviewed and synthesised to guide the implementation in the Lao context • Multi-stakeholders consultation: key stakeholders are identified and engaged in a

consultation process • Selection of target cities: we pre-identified 3 cities as potentially relevant from an

urban EBA perspective but the final selection will be made with the EE, building on the work previously done under the GEF funded programme on urban EBA in Asian countries including Lao PDR.

� Component 2: Policy and Planning Support

National scale • Support adjustments of urban policy and planning processes; identify national y level

adaptation activities to build on, and pursue opportunities for mainstreaming ecosystem based adaptation into key sectoral planning processes

City scale • Assessment of critical urban services delivery (final list will be defined with the local

teams based on the city’s specificities) • Assessment of ecosystems services interacting with the delivery of urban services

(see illustrative table below) • Characterization of potential pressures to the urban system (short term to long term):

city-level climate scenarios will be realized - differentiating stresses / slow onset changes and shocks / disasters, and will nourish the definition of a Theory of Change at the city level

• Framing the contribution of ecosystems services • Support adjustments of urban policy and planning processes

At city scale, specific work will be done to get a full understanding of interactions between urban services and ecosystem services provisioning the city15, e.g. informing a table as illustrated below.

� Component 3: Institutional strengthening (national and city scale) • National, municipal and provincial endorsement to lead the cross sectoral

coordination and implementation urban ecosystem activities • Capacity building of all relevant institutions; determine capacity gaps and deliver

intensive operational and technical capacity building activities on urban ecosystem management for adaptation

15 List of urban ecosystem services adapted from Gomez&al, Urban Ecosystem Services, Chapter 11 of the book Urbanization, Biodiversity and Ecosystem Services: Challenges and opportunities, 2012

Interactions to characterize

Urban services

Water security

Food security Health and well

being Infrastructure management

Disaster risk prevention and management

Ecosystems services

Type

Food, timber and raw material supply Provisioning services Water supply Provisioning services

Urban temperature regulation Regulating services Noise reduction Regulating services

Air purification Regulating services

Moderation of climate extremes Regulating services

Runoff mitigation Regulating services

Waste treatment Regulating services Pollination, pest regulation and seed dispersal

Regulating services

Global climate regulation Regulating services

Recreation Cultural services

Aesthetic benefits Cultural services

Cognitive development Cultural services

Place values and social cohesion Cultural services

Habitat for biodiversity Supporting services

Disservices Disservices


� Component 4: Sustainable Financing Schemes National scale • Analyse private sector barriers for investment in urban adaptation activities (how to

make projects "bankable") • Analyse insurance opportunities for urban adaptation infrastructure

City scale • Design new income-generating models • Support a city's creditworthiness scheme if relevant • Assess interest from insurance firms, tax incentive schemes, and other city financing

options (e.g. local financing facilities) to provide sustained finance for urban ecosystem adaptation activities

� Component 5: Urban Ecosystem Conservation and/or restoration (city scale)

• Identification, analysis and selection of preferred restoration sites for ecosystems inside the city (green spaces), passing through the city (rivers) and ecosystems surrounding of the city (source watersheds, productive landscapes). The location of the project’s EbA interventions will be carefully selected to maximise the return on investment. For example, priority interventions would include: re-vegetation of soil types that are particularly erosive, and restoration of degraded riparian zones that are well positioned for trapping sediment before it enters rivers.

• Initiate urban ecosystem restoration activities (see examples below) collaboratively with national and city institutions, engaging local communities. The restoration of the degraded ecosystems needs to be carefully tailored – based on rigorous scientific research – to manage the expected climate change conditions. For example, depending on the particular environment, plant species that are drought-resilient, tolerant of extreme temperatures, and/or effective at binding topsoils during extreme rain events would need to be selected.

• Implement processes to ensure the completion, the functioning and the maintenance of the initiatives, taking into account potential disturbances; define prevention, information (e.g. early warning) and recovery processes

Examples of potential interventions:The type of physical EbA intervention implemented in the proposed GCF project will vary according to the particular location and ecosystem involved. The large-scale EbA will focus on restoring degraded ecosystems to increase the supply of ecosystem goods and services under climate change conditions. Examples of potential ecosystem conservation and or restoration interventions at urban scale: - Riverine coastal defence through the maintenance and/or restoration of coastal

vegetation, reduces coastal flooding and coastal erosion - Sustainable water management (river basins, aquifers, flood plains and associated

vegetation): water storage, flood regulation - Conservation and restoration of forests and natural vegetation to stabilise slopes and

regulate water flows, preventing flash flooding and landslides as rainfall levels and intensity increases

- Establishment of sustainable agroforestry systems (peri-urban and urban areas) in changing local climatic conditions; using local knowledge of crop and livestock varieties, maintaining genetic diversity

- Establishing and effectively managing protected-area systems In peri-urban areas, the EbA interventions will also focus on peri-urban agricultural production using conservation farming techniques, and by establishing productive ‘home gardens’16 of herbs, shrubs and trees. The diversity of local and exotic plant species in such home gardens ensures that there is consistent agricultural productivity through the year and during extreme climate events, thereby providing an important buffering effect against climate change. The dense cover of vegetation in these home gardens also provides suitable habitat for a wide variety of wildlife (e.g. birds, mammals, reptiles, amphibians), which enables effective conservation of biodiversity within an agriculturally productive landscape.

16 Nguyen et al. 2013. Multipurpose agroforestry as a climate change resiliency option for farmers: an example of local adaptation in Vietnam. Climate Change. Doi: http://dx.doi.org/10.1007/s10584-012-0550-1.

http://dx.doi.org/10.1007/s10584-012-0550-1


� Component 6: Knowledge sharing • Involvement of communities and stakeholders at all stages, combining horizontal

(bottom-up and top-down) and vertical flows of information • Establish a framework for upscaling urban EBA within the country • Establish a research framework • Communicate the project approach among similar cities and engage city mayors in

global discourse to bridge knowledge gaps on urban ecosystems and adaptation • Building of a strong evidence base on ecosystems contribution to urban adaptation

and resilience to contribute to international, national, local knowledge bases � Component 7: Monitoring and evaluation processes, with a specific attention to:

National scale • Establishement of an innovative M&E scheme for urban EBA intervention City scale • Implementation of M&E scheme at city mevel

Describe project/programme sponsor’s operating experience in the host country or other developing countries. Describe financial status and how the project/programme sponsor will support the project/programme in terms of equity, management, operations, production and marketing.

The Ministry of MONRE will be the Executing Entity (see implementation arrangements).

MoNRE was created in 2011 to centralize the management of natural resources in order to better protect the environment and ensure sustainable development. It was formed by merging the Water Resources and Environment Authority, the National Land Management Authority (NLMA), and several portfolios from other ministries including forestry management and protection, disaster management, and geology. 2.2. Background MoNRE focuses on the management, monitoring and assessment of the use of natural information on resources, and the contribution they make towards poverty reduction and economic growth in project/programme Lao PDR. sponsor MONRE will conducting its work through the Division of Climate Change Adaptation

(DDMCC), but other key departments will be engaged, such as the NLMA, which is engaged in land surveying, mapping, allocation, and certification; it also determines and collects land taxes. As populations with insecure land rights and/or food supply are often more vulnerable to climatic impacts, NLMA has a prominent role to play in adaptation within Lao PDR. Other important issues concerning land management involve biodiversity and conservation, such as who has the rights to occupy land and access its botanical and zoological resources. It is also important to note that MoNRE is the lead implementing agency for the Lao PDR national activities in the new project ‘Mekong Integrated Water Resources Management’ (2012-2017), supported by the World Bank. The project has some focus on climate change impacts for water resources, particularly flood and drought events.17

2.3. Market Overview

Describe the market for the product(s) or services including the historical data and forecasts. Provide the key competitors with market shares and customer base (if applicable). Provide pricing structures, price controls, subsidies available and government involvement (if any).

The proposed GCF project will develop an enabling environment for natural resource-based businesses to capitalise on the goods and services derived from the EbA interventions at city- scale and promote the development of a viable market.

Promoting new income-generating schemes Depending on goods and services, income streams may not be generated within the project’s timeline because more than five years will be required for the natural resources to establish and to yield products such as fruit, fibre, medicine, timber and wildlife. The information below highlights potential income streams most particularly relevant from interventions in urban areas.

17 EcoLao (2012). Scoping Assessment of Climate Change Adaptation Priorities in the Lao PDR. Regional Climate Change Adaptation Knowledge Platform for Asia, Partner Report Series No. 6. Stockholm Environment Institute, Bangkok. Available online at www.asiapacificadapt.net or www.weADAPT.org.

http://www.asiapacificadapt.net/

http://www.weadapt.org/


Natural resource-based income streams:

The fast-growing economy of Lao PDR is largely based on its wealth of natural resources. Non-timber forest products such as medicinal plants, wild fruits bamboo shoots, and vegetables contribute to food security and are often the main source of livelihood for communities even in urban areas. House construction and handicraft production rely on natural materials like bamboo, rattan or paper mulberry. Agricultural and forest resources have a high commercial value. Ecosystem products such as non-timber forest products account for about half of the cash income of rural households in Laos. Small-scale economic activities such as agriculture, fishponds and aquaculture are based on natural resources.18

The lower Mekong Basin represents one of the most productive inland fisheries in the world and is the main source of protein for the local population. Over 2.5 million tonnes of wild fish are caught annually, worth over USD 2.5 billion: these represent an estimated one-quarter of global freshwater fish catches19. Urban and peri-urban agriculture can play a particularly important role as an income-provider; in Vientiane, 100% of the rice urban supply used to come from the city (2007)20.

Water management income streams: If access to water and sanitation in urban areas has well progressed in LAO PDR with currently 83% of urban population having access to drinking water and 87% to sanitation, there are still progress needed to secure the water access (quantity and quality issues), as well as to develop adequate sewage system. To date (2014), are still missing master plans on waste water treatment system (waste water drainage/sewage system, storm water drainage and treatment plant)21; a strategy for sanitation and waste water system development is under development based on Decentralized Wastewater Management Systems (DEWATS), including a potential integration to expected urban projects (Savannakhet, Pakse, Oudomxay, Thakhek, Paksan). Project’s intervention in relation to water management will help to secure consequent services and generate business, with potential income for private actors as well as for local communities – depending on the financing scheme implemented.

Waste management income streams: EBA intervention can also help to improve waste management at urban level, entailing job creation and livelihood improvement.

Tourism: Tourism in Lao PDR is growing rapidly with specific focus on ecotourism (protected forests, conservation areas) and on cultural tourisms (World Heritage Site such as Luang Prabang, one of our pre-selected city), with significant expected income in the coming years/decades22

that can benefit at different scales (from individual entrepreneurs to national administration via taxes).

Promoting a new financial market The GCF project will develop credible financial models which are needed to underpin bankable business plans for large-scale EbA. The proposed GCF project will calculate the return on large-scale EbA investments using on-the-ground, well-replicated experiments as well as modelling. For example, the monetary value of increasing: a) supplies of ecosystem- derived products (e.g. venison, fish, fruit, fibre, fuel wood, timber, medicines, honey, and water); b) agricultural production (e.g. groundnuts, maize, rice, cattle, goats and sheep); and c) ecosystem services (e.g. soil conservation, enhanced water supplies, improved water quality in feeder streams and the Mekong River, enhanced groundwater recharge, and greater biodiversity) will be determined by the project. Furthermore, the commercial viability of establishing private sector businesses in sectors such as ecotourism, aquaculture and tropical hardwood export will be analysed.

18 PROCEED, GIZ, 2012 19 Baran et al. 2007 20 Moustier, Urban horticulture in Africa and Asia, en efficient corner food supplier, ISHS, Acta Horticulturae, 2007 21 Waste Water Management and Sanitation Practice in Lao PDR, PPT Presentation at a Regional Workshop, 19-21 March 2014. 22 Lao PDR Tourism Strategy 2006-2020


Precedents for such analyses include: market studies by the IFC within the Pilot Program for

Climate Resilience23, cost-benefit analyses of EbA in Lami Town, Fiji project24, and IRR calculations for restoration of degraded subtropical thicket25, grasslands, wetlands, shrubland and forests26.

2.4. Regulation, taxation and insurance

Provide details of government licenses, or permits required for implementing and operating the project/programme, the issuing authority, and the date of issue or expected date of issue. Describe applicable taxes and foreign exchange regulations. Provide details on insurance policies related to project/programme.

Interventions will be designed in consistency with current and expected regulation and strategy frameworks. As a first approach, we identified the following institutional frameworks that have to be taken into account when designing the project (the list highlights key documentation while not intending to be comprehensive):

� Land Use planning: since the early 1990s, a Land-use Planning and Land Allocation (LUP/LA) program has been implemented throughout Lao PDR to secure land tenure security; from June 2011, Land Management Authority has been transferred to be a section under the Ministry of Natural Resources and Environment;

� National Biodiversity Strategy to 2020 and action plan to 2010 � "National Urban Sector Development Strategy", launched in 2012, that includes action

plans for town greenery, solid waste management, wastewater treatment, sanitation and hygiene, infrastructure and housing, and urban services. Concrete actions cover the integration of green city concept in urban design, a focus on area development rather than on traditional city master plans, the adoption of site and building codes, and the organization of annual meetings / urban forum.

� Disaster Risk Management National Strategy (2003-2020) � National Strategy for Women's Advancement implementation (2011-2015) � Decentralization institutional framework � Urban water management institutional framework: potential interaction with the

current deployment of Decentralized Wastewater Management Systems (DEWATS) � Environmental and Social Impact Assessments (ESIA): they have been

institutionalized under the 7th NSEDP with inter alia the objective that “before approving any more projects, we will ensure that a thorough survey and allocation of land is undertaken”; tools have been developed for different projects’ stakeholders

Specific attention will be given to property right arrangements for green infrastructure, given the competition with other land uses particularly fierce in urban settings. Opportunities for diverse and new forms of property rights arrangements will be considered under the regulation framework on land use.

2.5. Implementation Arrangements

Describe construction and supervision methodology with key contractual agreements. Describe operational arrangements with key contractual agreements following the completion of construction. Provide a timetable showing major scheduled achievements and completion for each of the major components of the project/programme.

The MONRE - Ministry of Natural Resources and Environment will be the Executing Entity (EE), conducting its work through the Division of Climate Change Adaptation (DDMCC). UNEP will be the Accredited Entity (AE) responsible for: a) overseeing the implementation of the project in coordination with the Project Management Unit (PMU); and b) providing technical assistance. The EE and the AE will form part of the Project Steering Committee (PSC), along with the Project Coordinator (PC) (see paragraph below for a description of the role of the PC) and the

23 Access Pilot Program for Climate Resilience market studies through the following links: i) Mozambique - http://www- cif.climateinvestmentfunds.org/country/mozambique; ii) Niger - http://www-cif.climateinvestmentfunds.org/country/niger; Zambia - http://www-cif.climateinvestmentfunds.org/country/zambia 24 Rao et al. 2013. An economic analysis of ecosystem-based adaptation and engineering options for climate change adaptation in Lami Town, Republic of the Fiji Islands. A technical report by the Secretariat of the Pacific Regional Environment Programme. Apia, Samoa 25 Mills AJ, Turpie J, Cowling RM, Marais C, Kerley GIH, Lechmere-Oertel RG, Sigwela AM, Powell M (2007) Assessing costs, benefits and feasibility of subtropical thicket restoration in the Eastern Cape, South Africa. Pages 179-187 In: Aronson J, Milton SJ, Blignaut J (eds) Restoring natural capital. Science, business and practice. Island Press, Washington D.C. 26 Blignaut et al. 2014. Restoration of natural capital: a key strategy on the path to sustainability. Ecological Engineering. Doi: http://dx.doi.org/10.1016/j.ecoleng.2013.09.003

http://www-/

http://www-cif.climateinvestmentfunds.org/country/niger%3B

http://www-cif.climateinvestmentfunds.org/country/zambia

http://dx.doi.org/10.1016/j.ecoleng.2013.09.003


Chief Technical Advisor (CTA). City and provincial representatives will be part of the steering

committee. The project steering committee will interact with other key institutional actors (most relevant framework for engagement will be discussed during the scoping study, with the objective of building on existing interministerial structures if relevant): � Primary institutional partners: • Ministry of Public Works and Transport (MPWT): in Charge of Urban Water Supply; in

charge of urban planning (Department of Housing and Urban Planning – DHUP; Urban Environmental Management and Community Development Unit), liaising with on-going initiatives and programmes (e.g. the Environmentally Sustainable Cities programme, the Decentralized Wastewater Management Systems programme);

• Ministry of agriculture and forestry (MAF) : directly responsible for cooperation and coordination with concerned agencies on biodiversity-related issues, including both central and local administration authorities and international agencies

� Additional institutional partners • Ministry of Planning and Investments (MPI), in charge of the socio-economic

development planning, • Key agencies and research institutes engaged with the government for strategy

development: STEA (Science Technology and Environment Agency), National Economic Research Institute (NERI),

• Mekong River Commission (Office of Climate Change Adaptation OCCA) � Provincial and city representatives for the 3 cities (once the selection process is

finalized)

The CTA will be employed as a part-time consultant to provide technical guidance on EbA. The chair of the PSC will be the Secretary of the MONRE. The mandate of the PSC will include: i) overseeing project implementation; and ii) reviewing annual workplans and project reports. The PSC will meet at least twice a year – with ad hoc meetings held as and when necessary – to discuss the project's main performance indicators and provide strategic guidance. Any changes made by the PSC to the project’s results framework or timeline will be communicated to the PMU by the PC. The PMU will consist of a Project Coordinator (PC), a Climate Change and Development Expert, and a Financial and Administrative Officer. The PMU will coordinate activities between the project’s Accredited Entity, Executing Entity and various partners to oversee the implementation of the project’s activities. The PC will be a full-time employee who will: a) lead and direct the PMU; b) provide administrative and technical expertise; c) be responsible for the day-to-day implementation and management of the project, and d) serve as the focal point for interactions between the project stakeholders and partner organisations (e.g. government departments, NGOs, civil society groups). The Climate Change and Development Expert will be hired on a part time basis to ensure that project activities result in building climate resilience from city level to national government level. A full time Administrative and Financial Officer will provide the administrative, logistical and financial support/expertise to the project and will work under the direct supervision of the PC. A Monitoring and Evaluation (M&E) Expert will be hired part-time to coordinate the M&E process of the project. A team of consultants with skills on inter alia ecosystems, adaptation, economics, finance, private sector business development, community empowerment will also be put in place to support the implementation of this project. At city-level, a transverse working group will be implemented, building on existing structures if relevant, engaging teams from the different sectors concerned (e.g. water supply, infrastructure, disaster risk management).

For further details on implementation arrangements see the diagram in ANNEX II.

III. Financing / Cost Information


3.1. Description of financial elements of the project / programme

Please provide: • a breakdown of cost estimates analyzed according to major cost categories.

• a financial model that includes projection covering the period from financial closing through final maturity of the proposed GCF financing with detailed assumptions and rationale;

• a description of how the choice of financial instrument(s) will overcome barriers and achieve project objectives, and leverage public and/or private finance.

Detailed economic and financial justification will be provided during the project development phase after conducting an in-depth feasibility study.

First approximation of costs estimates are presented below.

i) Costs decomposition by activity component and type of expenses ii) Costs decomposition by year

iii) Costs decomposition by scale

3.2. Project

Financial Instrument Amount Currency Tenor Indicative

Pricing

Project Component

Personnel

Training

Investments

Component sub- total

Miscellan- eous (5%)

Project management (5%)

Total

1. Scoping Phase 500000 500000 25000 25000 550000 2. Policy and planning support 1000000 1000000 50000 50000 1100000 3. Institutional strengthening 1000000 1000000 50000 50000 1100000 4. Sustainable Financing Schemes 500000 500000 25000 25000 550000 5. Urban Ecosystem Restoration 6000000 6000000 300000 300000 6600000 6. Knowledge sharing 1000000 500000 1500000 75000 75000 1650000 7. Monitoring and evaluation 500000 500000 25000 25000 550000 Total 3500000 1500000 6000000 11000000 550000 550000 12100000

Project Component Total 2016 2017 2018 2019 2020 1. Scoping Phase 550 000 550 000 2. Policy and planning support 1 100 000 366 667 366 667 366 667 3. Institutional strengthening 1 100 000 366 667 366 667 366 667 4. Sustainable Financing Schemes 550 000 275 000 275 000 5. Urban Ecosystem Restoration 6 600 000 1 100 000 2 200 000 2 200 000 1 100 000 6. Knowledge sharing 1 650 000 275 000 275 000 275 000 825 000 7. Monitoring and evaluation 550 000 91 667 91 667 91 667 275 000 Total 12 100 000 825 000 2 475 000 3 300 000 3 300 000 2 200 000

Project Component

City-scale (X3)

National-scale/

Transverse 1. Scoping Phase 500000 2. Policy and planning support 200000 400000 3. Institutional strengthening 250000 250000 4. Sustainable Financing Schemes 500000 5. Urban Ecosystem Restoration 2000000

6. Knowledge sharing 1500000 7. Monitoring and evaluation 100000 200000 Sub-total 2550000 3350000 Miscellaneous (5%) 127500 167500

Project management (5%) 127500 167500

Total 2805000 3685000


Financing Information

Total Project Financing

(a) = (b) + (c)

$12.1 million

Options

(i) Senior Loans

(i) to (v) is not applicable

$11.6 million

(ii) Subordinated Options ( ) years ( ) %

Loans Options ( ) years ( ) % (iii) Equity Options ( ) % IRR (iv) Guarantees Options

(b) (v) Reimbursable Options Requested

GCF Amount grants *

(vi) Grants * Options

* Please provide detailed economic and financial justification in the case of grants.

Total Requested (i+ii+iii+iv+v+vi)

…………………

Options

(c) Co- financing

Financial Instrument

Amount

Currency Name of

Institution

Seniority

Options

Options

Options

Options

$0.5 million

…………………

…………………

…………………

Options

Options

Options

Options

UNEP

…………………

…………………

…………………

Options

Options

Options

Options

Lead financing institution: ………………………

(d) Covenants

(e) Conditions

precedent to disbursement


IV. Expected Performance against Investment Criteria

Please explain the potential of the Project/Programme to achieve the Fund’s six investment criteria as listed below. Specify the climate mitigation and/or adaptation impact. Provide specific values for the below indicators and any other relevant indicators and values, including those from the Fund’s Performance Measurement Frameworks. Total tons of CO2 eq to be avoided or reduced per annum

Despite being an adaptation project, because of its restoration approach, mitigation benefits will be sought. Although the proposed GCF project is primarily an adaptation project, the restoration of woods, wetlands, agricultural soils and the development of urban green infrastructure will result in sequestration of carbon in biomass and soils. Expected total number of direct and indirect beneficiaries and number of beneficiaries relative to total population (e.g. total lives to be saved from disruption due to climate-related disasters)

Direct beneficiaries: qualitative and quantitative characterization Expected directed impacts are the reduction of the vulnerability of urban populations to climate change impacts by ensuring that urban ecosystems functions sufficiently, under current and future climate and socio-economic scenarios, provide services that generate multiple adaptation benefits and help secure the continuity of critical urban services. The programme prioritises the provision, access and use of essential ecosystem services to urban populations under climate-induced disturbances (differentiating slow onset changes from sudden events). Potential trade-offs will be analyzed. Synergy with mitigation will be given specific attention, more particularly regarding carbon storage opportunities.

4.1 Climate

Impact Potential [Potential to achieve the GCF's

The project will deliver a cost-effective and long term contribution to cities’ climate resilience, focusing on strengthening the role of ecosystems and urban institutions to address a range of issues facing cities including: flooding, freshwater and food insecurity, landslides and soil subsidence, urban heat island effects. Even if still sparse, the weight of current evidence, when combined with the social, environmental and economic costs and benefits, points to EbA being an effective approach to adaptation. Following graph27 illustrates key areas for EBA effectiveness as analyzed in the literature.

objectives and results]

Ultimate direct beneficiaries will then be urban inhabitants becoming less vulnerable / more resilient to

climate impacts compared to the baseline, i.e. able to anticipate, manage, recover from events and less affected when events occur. A baseline will be assessed, defining counterfactual situation. Special attention will be drawn on informal settlements/most marginalized population. Securing ecosystem services for urban populations is indeed not only a climate change issue, but also a societal development, equity and justice issue -it is the poorest people in developing countries who most directly rely on ecosystem services for their livelihood. We consider as first approximation that direct beneficiaries are the total population of cities where the project will take place (estimates from ADB, 201228):

27 Munroea&al, Does EbA Work? A review of the evidence on the effectiveness of ecosystem-based approaches to adaptation, 2011 28 ADB, LAO PDR - Urban Development Sector Assessment, Strategy, and Road Map, 2012


� Vientiane (capital city): 570,000 (9 districts in Vientiane Prefecture–‘Greater Vientiane’)

� Savannahkhét (“secondary city”): 81,401 � Luang Prabang (“secondary city”): 55,027

The 4 cities rank among the 4 largest cities in the countries (only 10 urban centers have a population of over 20,000).29

Expected total number of direct beneficiaries is then approx. 700,00 people, i.e. approx. 10% of the total population in Lao PDRR, and 40% of total urban population.

Intermediate beneficiaries will be the institutions (national and local / 3 cities) benefitting from the support provided within the programme.

4.2 Paradigm

Shift Potential [Potential to catalyze impact beyond a one-off project or programme investment]

Provide the estimates and details of the below and specify other relevant factors.

• Potential for scaling-up and replication (e.g. multiples of initial impact size) • Potential for knowledge and learning • Contribution to the creation of an enabling environment • Contribution to the regulatory framework and policies

Addressing a transverse challenge: reconnecting people in urban areas to the biosphere30

Cities have disproportionate environmental impacts at the local, regional, and global scales well beyond their borders. They appropriate vast areas of functioning ecosystems for their consumption and waste assimilation. Most of the ecosystem services consumed in cities are generated by ecosystems located outside of the cities themselves. Wide-scale intervention is then urgently needed to go beyond what is sometimes referred to as the ecology in cities, which often focuses on single scales and on designing energy-efficient buildings, sustainable logistics, and providing inhabitants with functioning green urban environments, to put more focus on the ecology of cities characterized by interdisciplinary and multi-scale studies with a socio- ecological system approach. The relevant scope of urban ecosystem analysis reaches beyond the city area itself; it comprises not only the ecological infrastructure within cities, but also the hinterlands that are directly affected by the energy and material flows from the urban core and suburban lands, including city catchments, and peri-urban forests and cultivated fields.

The potential to catalyze action beyond the project’s scope is then multifaceted:

� Upscaling opportunities within LAO PDR to other cities, building on lessons drawn from the first

serie of implementation while taking into account context-specific characteristics; Promoting A new national urban EbA agenda: The viability of large-scale urban EbA in Lao PRD will depend strongly on the participation and support of a wide range of stakeholders and economic sectors, from urban communities to national government. The proposed GCF project will be closely developed with Laotian national and local authorities to develop this support and to ensure that the needs of recipient local communities are taken into account. There will be a close collaboration with the GEF funded programme on urban EBA in Lao PDR in order to maximize overall efficiency and effectiveness of both projects. During the project, a national strategy on urban EbA will be promoted in consultation with a wide range of economic sectors. We aim at embed this strategy into the relevant institutional framework, i.e: Climate Change framework, Urban Planning framework, Socio- Economic Development Planning process. It will build on all available material, such as the study led by by EcoLao under the auspices of the Regional Climate Change Adaptation Knowledge Platform for Asia (AKP) that looked more particularly at Institutions, mandates and mechanisms regarding climate-related policies and institutional mechanisms and policies concerning adaptation31.

� Replicability in other countries by contribution to evidence-base building on the impacts of

urbanization on biodiversity and ecosystems as well as the potential benefits from ecosystem restoration in urban areas - which remains so far poorly understood32;

29 ADB, ibid; Source of Population estimates : National Census 2005. 30 Gomez&al, Urban Ecosystem Services, Chapter 11 of the book Urbanization, Biodiversity and Ecosystem Services: Challenges and opportunities, 2012 31 EcoLao (2012). Scoping Assessment of Climate Change Adaptation Priorities in the Lao PDR. Regional Climate Change Adaptation Knowledge Platform for Asia, Partner Report Series No. 6. Stockholm Environment Institute, Bangkok. Available online at www.asiapacificadapt.net or www.weADAPT.org. 32 e.g. McDonald and Marcotullio, 2011




We will build on existing knowledge sharing and networking platforms. Specific effort to share

lessons at regional level will be done (Mekong River Commission, related programmes and initiatives). Urban EBA findings may be easily disseminated and leveraged within the Greater Mekong Sub- region (GMS) grouping Lao PDR with five other countries (Cambodia, People’s Republic of China, Myanmar, Thailand and Viet Nam). Successful communication under that organization is all the more needed than interdependency and interaction between the different countries is very high more particularly concerning ecosystems services related to water and food security.

� Downscaling at individual, behavioural, cultural level in the sense that it will support the urgent need

to reconnect (or avoid to disconnect) urban inhabitants to nature in a growing urbanization context, with a specific attention on vulnerable groups and on next generation (involving children). Increasing people’s awareness of how their actions impact the biosphere is not just a matter of close proximity to green areas, but also will come from getting them involved. Governance of urban ecosystem services will benefit from local stakeholder involvement. Opportunities for diverse and new forms of property rights arrangements will be considered under the land use regulation framework.

Innovative financing for leveraging of funds at scale The EbA interventions will be specifically tailored to increase existing income streams for local communities, and to create opportunities for new businesses. All costs and benefits of the EbA interventions will need to be rigorously analysed. The evidence base that emerges from this analysis will be used for leveraging additional funds from municipal budgets, national budgets, private sector investors and international donors; building on the synergy with interacting projects such as a GEF funded programme on urban EBA in Asian countries including Lao PDR. There will also be a strong focus within the project on developing financial instruments for scaling up EbA interventions. Potential models include: green bonds and municipal bonds, local facilities, concessional loans; risk- sharing facilities (e.g. insurance schemes), micro-finance and crowd-funding; community-level companies owned by the community as well as private investor-owned and public/private partnerships or citizens/public/private partnerships schemes. If community -level companies are promoted, long-term leases to enable the companies to use the natural resources would need to be brokered. A principle of maximising the return on natural resources, whilst ensuring sustainable use of the resources, and appropriate sharing of benefits amongst community members would need to be upheld. Bankable business plans would need to be developed by the local stakeholders, with technical support provided by the project on aspects such as market research, development of contracts and company structuring.

4.3 Sustainable Development Potential [Potential to provide wider development co-benefits]

Provide the estimates of economic, social and environmental co-benefits. Examples include the following:

• Economic co-benefits - Total number of jobs created - Amount of foreign currency savings - Amount of government’s budget deficits reduced

• Social co-benefits - Improved access to education - Improved regulation or cultural preservation - Improved health and safety

• Environmental co-benefits - Improved air quality - Improved soil quality - Improved biodiversity

• Gender-sensitive development impact - Proportion of men and women in jobs created

Economic co-benefits

Eba solutions are usually considered as cost-effective solutions compared to “hard” infrastructure, even if evidence base is still to consolidate particularly at city scale – which is one the project’s objective. Systematic assessment of economic costs and benefits including the monetary cost of implementation and the value of assets protected or co-benefits of the approach will help to demonstrate long term cost-effectiveness of ecosystems-based solutions. As previously commented, the commercial viability of establishing natural-resources-based private sector businesses in sectors such as ecotourism, aquaculture and tropical hardwood export will be analysed.


Social co-benefits Direct social benefits will derive from securing an adequate access to environmental goods for all, including marginalized population. It is all the more important than poorest people in developing countries most directly rely on ecosystem services for their livelihoods. Within-city green infrastructure can offer specific opportunities and new contexts for people to become stewards of ecosystem services. The development of ecosystem services locally provided with easy access and use by a greater set of city-inhabitants (e.g., daily nature encounters, noise reduction, absorption of pollutants in water and air) will have impact on well-being and on public health. Contribution to health and human well-being will be key areas of impacts, with direct positive impacts related to the use of green commodities and spaces, but also indirect positive impacts via the reinforcement of place values and social cohesion.

Gender-sensitive development impact

As women are usually the one in charge of providing food and water to the households, the proposed EbA interventions, which will improve productivity from and access to ecosystems services, will have direct benefits. Specific attention will then be brought to women when designing locally the activities. We will build on the National Strategy for Women's Advancement implementation (2011-2015) and related findings/tools. Gender disaggregated targets will be developed and used to monitor indicators.

Environmental co-benefits EBA interventions generate multiple environmental benefits33, mainly: • Water: ecosystems provide cities with freshwater for drinking and other human uses and by

securing storage and controlled release of water flows. Vegetation cover and forests in the city catchment influences the quantity of available water.

• Air quality: Vegetation in urban systems can improve air quality by removing pollutants from the atmosphere, including Ozone, sulfur dioxide, nitrogen dioxide, carbon monoxide and particulate matter PM10. Difference in performance between plant species (e.g. bteween deciduous and evergreen species), urban trees especially important in intercepting air pollutants. Removal of pollution takes place as trees and shrubs filter out airborne particulates through their leaves.

• Noise reduction: Urban soil and plants can attenuate noise pollution through absorption, deviation, reflection and refraction of sound waves. In row plantings of trees, sound waves are reflected and refracted, dispersing the sound energy through the branches and trees. Different plant species mitigate noise differently.

• Waste management: Ecosystems filter out and decompose organic wastes from urban effluents by storing and recycling waste through dilution, assimilation and chemical re-composition. Wetlands and other aquatic systems filter wastes from human activities; this process reduces the level of nutrients and pollution in urban wastewater. Plant communities in urban soils can play an important role in the decomposition of many litter types.

• Biodiversity: Pollinators, pest regulators and seed dispersers are threatened by habitat loss and fragmentation; allotment gardens, private gardens and other urban green spaces are important source areas. Urban biodiversity is very specific; diversity of species - native and non-native species - may peak at intermediate levels of urbanization.

• Soil quality: Conservation and restoration of ecosystems, promotion of sustainable practices (urban and peri-urban agriculture) will address soil degradation issues

33 Adapted from Gomez&al, Urban Ecosystem Services, Chapter 11 of the book Urbanization, Biodiversity and Ecosystem Services: Challenges and opportunities, 2012


4.4 Needs of

Recipient [Vulnerability to climate change and financing needs of the recipients]

Describe the scale and intensity of vulnerability of the country and beneficiary groups and elaborate how the project/program addresses the issues. Examples of the issues include the following:

• Level of exposure to climate risks for beneficiary country and groups • Does the country have a fiscal or balance of payment gap that prevents from addressing the needs? • Does the local capital market lack depth or history? • Needs for strengthening institutions and implementation capacity

LAO PDR as a lower middle-income country does not have access to sufficient resources to cope with expected climate change impacts (see a description of Lao PDR climate change vulnerability in the baseline description) and secure the transition towards a sustainable urban development – while graduating from the LDC status (objective 2020).

The project will support LAO PDR in this transition, by addressing specific challenges yet identified by the government as listed below (consistent with the National Strategy on Climate Change and with the objectives of the 8th socio-economic development plan - under development):

� Conservation and valuation of its natural resources, from which livelihoods and incomes of the population as well as income for the national treasury depend;

� Coping with current and expected climate threats (floods, drought, water and food security) with major potential impacts (population and assets) in cities, particularly on border cities along the Mekong river (risk of extreme events such as storms and flooding). Biophysical changes due to climate change will impact on people’s livelihoods, with implications for sustainable development and the well-being of people of the region;

� Avoiding consequent damages that heavily impact the economy: losses from floods account for some 2.8-3.6% of the country’s GDP and about 2.7% of the government’s total spending. Reducing the impact of disasters in Lao PDR is a priority of the government due to the increasing number of persons affected and economic development caused by disasters.

� Enabling a sustainable urbanization in a context of accelerating dynamics, more especially in major cities and in cities situated in the economic corridors.

4.5 Country

Ownership [Beneficiary country ownership of project or programme and capacity to implement the proposed activities]

Provide details of the below and specify other relevant factors.

• Coherence and alignment with the country’s national climate strategy and priorities in mitigation or adaptation

• Brief description of executing entities (e.g. local developers, partners and service providers) along with the roles they will play

• Stakeholder engagement process and feedback received from civil society organizations and other relevant stakeholders

The project will be consistent with and build on the climate change strategy, published in 2010, which highlighted the following priorities (covering mitigation and adaptation): Agriculture & Food Security, Forestry and Land Use Change, Water Resources, Energy and Transport, Industry, Urban Development, Public Health. Concerning urban development, actions initially identified concerned mainly the climate-proofing on urban development plans and of infrastructure.

Systematic alignment will be organized with strategies and action plans potentially interacting with Urban EBA interventions, such as:

� The overarching institutional framework designed within the National Socio-Economic Development Plan (NSEDP), integrated in a National Strategy on Socio-Economic Development until 2025 and a Vision until 2030. The next Five Year National Socio-Economic Development Plan VIII (2016-2020) (8th NSEDP) is currently under definition and insists on the need of ensuring a quality growth. The Plan is designed as a results-oriented plan and sets the following aims: (i) facilitate eligibility for graduation from LDC status by 2020; (ii) consolidate regional and international integration in the context of the launching of the ASEAN Economic Community in 2015; (iii) take further steps towards industrialization and modernization and to enhance the well-being of the people and the prosperity of the country in order to achieve the ranking as a upper-middle-income country by 2030. It acknowledges that current economic growth relies mainly on exploitation of natural resources while the management and utilization of the natural resources in many cases is still carried out in an unsustainable, wasteful and environmentally unfriendly manner. It highlights the need to tackle this issue, given the harmful impacts on the local people as well as on the environment of the country.


Specific outcomes and outputs defined in the 8th NSEDP relate directly to our programme;

more particularly the Outcome 3: Reduced effects of natural shocks as required for LDC graduation and sustainable management of natural resources exploitation: • Output 1 – Environmental Protection and Sustainable Natural Resources Management:

To ensure sustainable development, initiatives on environmental protection and disaster risks management are essential. Develop green, clean and beautiful economy for the people’s well-being, health and pollution free by sustainable urbanization. Increase capacity. (Includes the development of mechanisms for” green and clean cities”)

• Output 2 – Preparedness for Natural Disasters and Risk Mitigation: Further develop sustainable ownership to protect the environment, ready to cope and reduce the risk of various disasters, economic green people live a good, healthy, strong and safe from pollution of water, sound and air. Increase and improve the ability to adapt, to reduce the impact of climate change by reducing greenhouse gas emissions to a minimum.

• Specific attention is drawn to the urban water issue, building on on-going urban infrastructure projects (e.g. urban development along the sub-Mekong region corridor, completion of financial contract for Pakse environment improvement project, completion of water supply and sanitation project in the North and central region completion of participatory water supply and sanitation, water supply and sanitation in small town and 1st district group …)

• Interesting interaction may be also underlined on the explicit objective of developing diversified rural livelihood to avoid economically-driven migration in urban areas (likely to end in informal settlements); this position echoes one component of our programme that focuses on securing peri-urban agriculture.

� Potential interactions exist with different strategies and programmes (different scales). A

detailed list will prepared during the scoping study in order to build on potential interactions and then strengthen country’s ownership of the project, as well as reinforce its effectiveness and efficiency.

� Specific synergy is to organize with the National Urban Sector Development Strategy

(launched in 2012) and the ESC programme (“Environmentally Sustainable cities”), currently under implementation with the support of JICA (pilot implementation underway).

4.6 Effectiveness

and Efficiency [Economic and financial soundness and effectiveness of the proposed activities]

Provide details of the below and specify other relevant factors (i.e. debt service coverage ratio), if available.

• Estimated cost per t CO2 eq (total investment cost/expected lifetime emission reductions) • Co-financing ratio (total amount of the Fund’s investment as percentage of project) • Economic and financial rate of return

- With the Fund’s support - Without the Fund’s support

Cost-effectiveness of the EBA portfolio

The proposed GCF project will primarily achieve cost-effectiveness by using large-scale EbA. A growing body of scientific research demonstrates that past initiatives which included EbA measures resulted in a greater ratio of benefit-cost compared with the use of infrastructural measures for adaptation34, 35. Similarly, in a recent in-depth review of strategies for sustainability, restoration of natural capital was deemed the most cost-effective approach when compared with: a) technology change; and b) social behavioural change36. This conclusion is further supported by a recent economic analysis of the restoration and rehabilitation of grasslands and woodlands which showed internal rates of return (IRRs) of 20–60% and benefit:cost ratios of up to 35:137.

Nevertheless, as previously commented, the urban scale is a new field for EBA implementation, with potential limited applicability of the above-mentioned results. Given the specificities and the complexity of urban landscapes, a mix of measures will be considered when relevant, which will impact the overall analysis.

34 De Groot et al. 2013. Benefits of investing in ecosystem restoration. Conservation Biology 27: 1286-1293. 35 Rao et al. 2013. An economic analysis of ecosystem-based adaptation and engineering options for climate change adaptation in Lami Town, Republic of the Fiji Islands. A technical report by the Secretariat of the Pacific Regional Environment Programme. Apia, Samoa. 36 Blignaut et al. 2014. Restoration of natural capital: a key strategy on the path to sustainability. Ecological Engineering. Doi: http://dx.doi.org/10.1016/j.ecoleng.2013.09.003 37 De Groot et al. 2013. Benefits of investing in ecosystem restoration. Conservation Biology 27: 1286-1293.

http://dx.doi.org/10.1016/j.ecoleng.2013.09.003


V. Brief Rationale for GCF Involvement and Exit Strategy

An economic analysis undertaken in Lami, Fiji 38 is particularly pertinent. This study included assessments of the costs and benefits of three approaches to watershed management: a) only EbA measures; b) engineering options; and c) a hybrid approach combining both engineering and EbA interventions. The analysis demonstrated that EbA interventions for watershed management are at least twice as cost-effective as engineering options – e.g. a benefit:cost ratio of US$19.50 for EbA compared with US$9 for hard engineering. The cost-effectiveness of urban EBA is still to demonstrate, which is one of the expected outcomes of the project. Some useful results are

Cost-effectiveness and efficiency at the project’s level

The proposed GCF project will strive to maximise the cost-effectiveness of the EbA interventions as follows. Firstly, during the implementation phase of the project, cost-benefit analyses of different types of EbA will be undertaken to ensure that the most efficient interventions are undertaken. Secondly, a dedicated project management unit will be established to ensure that all EbA interventions are implemented in a rigorous and timeous manner according to detailed protocols for different landscapes. Thirdly, implementing actors including local communities will be intensively trained in the implementation of EbA. And fourthly, the project will build on other projects that are implemented to increase urban climate resilience in Lao PDR, such as the GEF funded programme on urban EBA in Asia (Bhutan, Cambodia, Lao PDR, Myanmar).

Overall efficiency of the project will be ensured by UNEP considerable experience implementing climate change adaptation projects in developing countries - and providing scientific guidance in the field of climate change. The proposed project built on UNEP’s experience gained through the implementation of more than 90 adaptation projects (GEF and non–GEF) at global, regional and national levels. Through the implementation of those projects, UNEP works to develop innovative solutions for national governments and local communities to adapt in an environmentally sound manner to climate change. UNEP has a particularly long-standing engagement with many Asian countries in helping them to address climate change impacts. This includes, inter alia i) integrated environment assessments and capacity building at sub-regional, national and city level on adaptation to climate change in Bangladesh; ii) integrating climate change adaptation into city level planning in the Phillipines; and iii) training government officials on mainstreaming ecosystem-based disaster risk reduction and adaptation in development planning.

Economic Rate of Return

The Economic Rate of Return (ERR) and Net Present Value (NPV) of the proposed GCF project’s benefit streams will be calculated during the project development phase. Furthermore, a sensitivity analysis of various lags in the realisation of benefits and effects on economic viability will be undertaken.

38 Rao et al. 2013. An economic analysis of ecosystem-based adaptation and engineering options for climate change adaptation in Lami Town, Republic of the Fiji Islands. A technical report by the Secretariat of the Pacific Regional Environment Programme. Apia, Samoa.

Please specify why the GCF contribution is critical for the project/programme. Alignment with GCF strategies Climate-compatible cities has been identified as one of the five high value areas of investment for the Fund, i.e. around which focused efforts can be made to both support country programming and steer investment. Investing in climate- compatible cities can offer substantial mitigation and adaptation benefits, under a more integrated and holistic approach, with a specific attention needed on safeguarding livelihoods, particularly of the urban poor. Africa and Asia are tagged as the fastest urbanizing regions in the world, where the Fund has the potential to help shift public and private investment in cities towards lower emission and more resilient systems, departing from a situation of relatively modest volumes of support from existing climate funds. The Fund aims at unlocking requisite investments with financing tailored to addressing the particular risks that impede greater investment in more resilient or lower emission approaches to urban development, building on new emerging partnerships to encourage climate action in cities and to finance implementation.


VI. Risk Analysis

VII. Multi-Stakeholder Engagement

Our ecosystems-based approach for cities will provide a clear contribution to the Climate-compatible cities priority, and has also the potential contribute to the other key areas of investments, i.e.: � Sustainable climate-smart agriculture, particularly in Africa and Asia with a focus on LDCs: our programme includes

the support of a sustainable development of peri-urban and urban agriculture; � Scaling up finance for forests and climate change in Latin America, Asia and Africa: depending on the specific location

of the cities, our programme may include intervention on forests surrounding cities or on urban forests; � Enhancing resilience in small island developing States (SIDS): if the proposed project is located in LAO, one

component is to build evidence on the interrelations between ecosystems services and urban management with lessons to draw for a wider implementation; being highly exposed to climate change, SIDS are a potential scope of implementation with yet existing initiatives (see work done with Lami town39).

� Transforming energy generation and access in Africa and Asia: we may indirectly address the energy issue for cities still heavily dependent on timber provision.

Please explain the exit strategy (i.e. how the project/programme will be sustained after GCF intervention).

A well-prepared exist strategy is a key factor for the long term sustainability of the project, which requires to take into account the “after the project perspective” at the early stage of the development of the project (as it impacts the design of solutions). During the development phase, we will define a detailed roadmap for the exit strategy with the objective of securing the transition towards a self-sustaining phase (engaging local authorities and beneficiaries). Specific attention will be drawn to: • Conditions to maintain the benefits generated by the natural capital assets; • Regulatory framework for ensure the sustainability of the livelihoods and businesses generated by the project; • Conditions for the completion of initiated projects defined and secured (e.g. long term financing and organization

schemes); • Maintenance processes for implemented projects defined and secured with a priority to low costs maintenance

processes (e.g. involving users in maintenance) • Wide-scale dissemination of findings to ensure visibility of the initiated projects.

To ensure the sustainability of the activities initiated during the project, the proposed GCF project will focus strongly on developing institutional capacity in government and the private sector for maintaining the natural capital assets created by the project.

39 Rao et al. 2013. An economic analysis of ecosystem-based adaptation and engineering options for climate change adaptation in Lami Town, Republic of the Fiji Islands. A technical report by the Secretariat of the Pacific Regional Environment Programme. Apia, Samoa

Please describe the financial and operational risks and discuss mitigating measures. Please briefly specify the substantial environmental and social risks that the project/programme may face and the proposed risk mitigation measures.

The risks and the success of the risk management strategies will be evaluated as part of the monitoring and process.

A provisional risk analysis is provided in ANNEX III. Based on this initial screening, further risks characterization will be done in collaboration with the Steering Committee during the scoping phase.

Please specify the plan for multi-stakeholder engagement, and what has been done so far in this regard. During the project development phase, intensive engagement with ministries and key stakeholders will help adjust the project to contextual and conjectural specificities.


VIII. Status of Project/Programme

IX. Remarks

40 EcoLao (2012). Scoping Assessment of Climate Change Adaptation Priorities in the Lao PDR. Regional Climate Change Adaptation Knowledge Platform for Asia, Partner Report Series No. 6. Stockholm Environment Institute, Bangkok. Available online at www.asiapacificadapt.net or www.weADAPT.org. 41 SRC, The Resilience Renaissance, 2010; ARUP, City Resilience Framework, 2014; IARWG, The Characteristics of Resilience Building - A discussion paper, 2012

When preparing the consultation work, we will build on the work done by EcoLao40 that identifies key institutions in Lao PDR potentially concerned by adaptation-related projects and provides detailed explanation of their mandates in relation to adaptation. Specific attention will be drawn to feed-back from the consultation work undergone under the GEF funded programme on urban EBA in Lao PDR (on-going work) and further interaction will be organized.

Once the choice of cities finalized, consultations will also be conducted to ensure that project activities are well aligned with the city’s requirements.

1) A pre-feasibility study is expected to be completed at this stage. Please provide the report in Annex

A detailed feasibility study will be conducted during the project development phase, using the findings provided in this concept note and its Annex.

2) Please indicate whether a feasibility study and/or environmental and social impact assessment has been conducted

for the proposed project/programme: Yes ☐ No ☒

(If ‘Yes’, please provide them in Annex II.)

3) Will the proposed project/programme be developed as an extension of a previous project (e.g. subsequent phase), or based on a previous project/programme (e.g. scale up or replication)? Yes ☒ No ☐ (If yes, please provide an evaluation report of the previous project in Annex II, if available.) As commented, a UNEP-led Urban EBA programme is just starting in LAO PDR (current status: scoping phase) that will work in one city in LAO PDR (as well as in one city in the following countries: Bhutan, Cambodia, Myanmar). Interaction and synergy will be sought during the implementation of both projects. No report is available at this date.

Project’s theory of change

A Theory of Change for the project will be designed during the development phase in collaboration with engaged stakeholders.

Provisional inputs for the TOC design are provided in ANNEX V: a TOC (draft scheme) for urban EBA in general (LDCs perspective) and an initial overview of: i) the baseline situation, ii) a BAU/counterfactual scenario, iii) the project’s vision.

M&E scheme

A comprehensive M&E scheme will be defined for the project (component 7 of the project). It will be structured so as to provide valuable input to GCF performance assessment tools. An indicative structure is presented in ANNEX VI, based on GCF M&E documentation.

Complementary methodological benchmark for designing the M&E scheme comes from the literature on resilience. Departing from available findings41, we will build an assessment framework taking into account around 6 key components of resilient (socio-ecological) systems / communities: Robust, Diverse, Redundant, Flexible, Inclusive, Integrated (multi- scale).




Annex I. MAP Map indicating the location of the project/programme.

3 cities have been pre-identified as relevant for urban EBA interventions. The final selection will be done during the scoping phase.


Annex II. Implementation arrangements Following implementation arrangements have been pre-defined and will be adjusted during the scoping study.

Indicative lists of key representatives to get involved in the process (yet involved in the Environmentally Sustainable Cities programme):

� MONRE: Mme. KeobangA KEOLA, Director General of Pollution Control Department � MPWT: Dr. Aphisayadeth INSISIENGMAI, Director of Urban Planning Division � MPI:

o Mme. Sirivanh KHONTHAPANE, Assistant to Minister o Mr. Khouankham VONGKHAMSAO, Technical Staff of Planning Department

� Vientiane Capital: Dr. BangOn SAYARATH, Director General of DONRE


Annex III. Risks management The risks and the success of the risk management strategies will be evaluated as part of the monitoring and process. Initial risks characterization will be done in collaboration with the Steering Committee during the scoping phase, based on the following table, entailing some adjustments of the mitigation measures if relevant.

Identified Risks Mitigation Measures Political commitment, macro-economic context Government commitment to support � High level communication targeted at the policy level the integration of EBA into the urban � High level communication targeted at donors’ level (Round Table Process)42 planning framework is weak � Demonstration of EBA feasibility and cost-effectiveness based on available

data � Enhancing the innovation perspective and hence the visibility of the project

Up front political commitments to a � Enhancing the consistency with the strategic priority for a “quality growth” development course are so strong � Demonstration of EBA co-benefits (environmental, social, economic) that actions with short term effect are � Valuation of ecosystems services given high priority � Promoting a rights-based approach for adaptation

� Providing the whole picture for integration EBA in urban planning, including the complementarity of green and grey infrastructure

Some transboundary issues (Mekong � Collaborative work with the Mekong River Commission basin) may have to be considered � Building on existing structures and programmes (e.g. MIWRM project, (related to water management) Mekong Integrated Water Resources Management Project) Specific issues may arise from the � Taking stock of the projects’ development, current issues and mitigation dams’ development projects (users’ measures conflicts) � Specific consideration of potential impacts / interactions when designing the

project Many international organisations � MRC as a key partner to engage as an exchange platform with adaptation- become involved in Mekong related initiatives in the region adaptation initiatives creating � Regular meetings to share ideas and experiences helping to reduce confusion and competition in confusion and enhance synergy concepts, tools and approaches

National level coordination Coordination at national level fails to � Specific consideration to institutional arrangements, checking that all ensure involvement of all the relevant institutions needed to get a successful implementation are on board institutions and agencies � Regular update on the projects’ progress will be disseminated among

partners � Continual networking effort to facilitate engagement of partners

Lack of efficiency in the programme � Demonstration of the potential positive and cost-effective impact of urban EbA implementation due to low-level of institutional support and potential overlap with other programmes (national level)

�

�

interventions Identification of potential interactions with on-going programmes and definition of collaborating measures (e.g. sharing effort on data collection) Continual strengthening of the technical and institutional capacity of national

authorities to plan, implement, monitor and upscale urban EBA interventions

Implementation

Competition / conflict between EBA � Demonstration of EBA co-benefits (environmental, social, economic) with perspective and economic impacts on well-being and long term development development perspective (e.g. on � Engaging all stakeholders in the design of the project; awareness-raising urban land use planning) and capacity-building activities

� Valuation of ecosystems services; payment for ecosystem services approaches if revelant

Lack of efficiency in the programme � Demonstration of the potential positive and cost-effective impact of urban EbA implementation due to low-level of institutional support and potential overlap with other programmes (city level)

�

�

interventions Identification of potential interactions with on-going programmes and definition of collaborating measures (e.g. sharing effort on data collection) Continual strengthening of the technical and institutional capacity of city

management authorities to plan, implement, monitor and upscale urban EBA interventions

Lack of data to design and implement measures

� Significant investment on data collection and analysis,

42 The Round Table Process (RTP) is the Government’s main mechanism for the mobilization and coordination of Official Development Assistance (ODA) for the achievement of the country’s development goals


Identified Risks Mitigation Measures

� Mutualized with other on-going programmes (e.g. GEF funded programme on urban EBA, MRC programmes, national and local initiatives - see above)

Target communities do not recognise the benefits of adaptation and fail to cooperate during and/or after project implementation

� Public awareness programmes on climate change impacts and the benefits of urban EbA interventions will be established.

� The benefits of appropriate city-specific urban EbA interventions will be demonstrated in pilot cities.

� Capacity building and training of important stakeholders will be conducted to increase their understanding/awareness of the benefits of urban EbA.

� Emphasis on participation of target stakeholders in the adaptation planning process and focus on those measures that bring clear development benefits are embedded.

Variation in local adaptation capacities may reduce efficiency in project execution and impede coordination.

� City management authorities in each of the cities will be trained in the design, planning and implementation of urban EbA interventions.

� International experts will be engaged to assist local authorities to implement the city-specific urban EbA interventions.

Capacity and mandate constraints of local institutions may limit the ability to undertake the required research/assessments and project interventions.

� Collaboration and exchange between local and national institutions and international research institutes will be initiated.

� Human resource capacity will be developed as required. � National and international experts will be engaged to assist local researchers

and institutions Potential social environmental impacts (e.g. conflicts for use in resources)

� Social safeguards will be defined and implemented

Potential negative environmental impacts (e.g. ecosystem disservices)

� Environmental safeguards will be defined and implemented

The cost-effectiveness of implementing Urban EbA interventions is lower than expected which will negatively the potential for upscaling.

� Cost-effectiveness will be a core principle in the selection and implementation of city-specific urban EbA interventions. Detailed information will be recorded regarding cost effectiveness.

The monitoring and evaluation requirements meet with resistance from government and project staff. The monitoring framework is too complex and burdensome .

� Careful design of the monitoring system so that it collects useful information with a clear goal and in an easy way.

Complexity of partner arrangements make management difficult

� Specific attention will be drawn on the management of partnerships, building on UNEP’s specific expertise and capacity on multi-partners project’s management.

� Partnerships will be set up step by step for progressive consolidation of the overall organization

� “Early warning” procedure will be defined in the project’s management process to react quickly (e.g. in case of a partner’s failure in delivering)

Failure in incorporating a broad- based gender perspective into its development and management

� A number of gender responsive measures will be built in as activities and indicators

� Gender specialists will be engaged in the project’s design Long term sustainability

Measures initiated during the project halt after the project’s completion

� Exit strategy defined and secured � Conditions for the completion of initiated projects defined and secured (e.g.

long term financing and organization schemes) � Maintenance processes for implemented projects defined and secured with a

priority to low costs maintenance processes (e.g. involving users in maintenance)

� Wide-scale dissemination of findings to ensure visibility of the initiated projects Failing in attracting sufficient funds to implement the project in its integrity and effectiveness.

� A detailed financial sheme will be secured at the start of the project. � When engaging financial partners (public and private), conditions for securing

their engagement will be clearly defined (which may require support from lawyers)

Monitoring and evaluation on the performance of the project is not done

� An “after the project” M&E framework will be defined annexed to the exit strategy

� Specific attention will be drawn to performance assessment (which is a key current challenge for adaptation projects), building on current innovative approaches for adaptation M&E

� Priority will be given to low costs M&E processes (e.g. participatory monitoring processes)

� Wide-scale dissemination of findings to ensure visibility of the initiated projects


Annex IV. Results framework (provisional) A provisional results framework is presented below; it will revised during the feasibility study.

INDICATIVE ACTIVITIES

EXPECTED OUTCOMES

EXPECTED OUTPUTS

COSTS (except miscellaneous and project

management)

Component 1: Scoping phase 500,000

National scale 500,000 Kick-off mission

1.1. Guidelines for embedding our programme in the national policy framework are framed

1.1.1. A scoping report is delivered; it includes the screening of existing policies and programmes potentially in relation with our programme (specific attentionwill be drawn to the land use framework) and of data availability; it proposes a consultation framework

Evidence base framing

1.1.2. Knowledge on the effectiveness of urban EbA collated, reviewed and synthesised to guide the implementation in the Lao context

Multi-stakeholders consultation

1.1.2. Stakeholders are identified and engaged in a consultation process; focus on the selection process of target cities 1.1.4. Cities are selected 1.1.5. A detailed workplan is defined (national scale)

Component 2: Policy and Planning Support 1,000,000

National scale 400,000 Support adjustments of urban policy and planning processes; identify national level adaptation activities to build on, and pursue opportunities for mainstreaming ecosystem based adaptation into key sectoral planning processes

2.1. A detailed framework for embedding our programme in the national policy framework is designed

2.1.1. Consultation with national stakeholders 2.1.2. Workshops discussion 2.1.3. A "mainstreaming report" is delivered; it informs specific opportunities for urban EBA integration and expected benefits (adaptation and co-benefits); focus on most vulnerable groups; policy recommendations are provided

City-scale (3 cities) 600,000 Assessment of critical urban services delivery

2.2. A detailed framework for embedding our programme in the national policy framework is defined, based on an intense consultation work

2.2.1. Knowledge on the city's urban functionalities (e.g. water security, food security and raw material provision, infrastructure management, public health and well-being, disaster management) is collated, reviewed and synthesised; focus on the informal settlements if relevant



EXPECTED OUTCOMES

EXPECTED OUTPUTS COSTS (except

miscellaneous and project management)

Assessment of ecosystems services interacting with the delivery of urban services

2.2.2. Knowledge on the city's urban ecosystems( within-city ecosystems, crossing and surroundings’ ecosystems) is collated, reviewed and synthesised; economic valuation of ecosystem services for direct and indirect use is assessed (level of assessment will depend on the data vailability)

Characterization of potential disturbances to the urban system

2.2.3. Knowledge on climate-induced disturbances potentially impacting the city is collated, reviewed and synthesised (city-level climate scenarios, differentiating stresses / slow onset changes and shocks / disasters); focus on the consequences in terms of failure of urban services delivery and on the impacts on ecosystems

Framing the contribution of ecosystems services

2.2.4. Understanding of the interaction between ecosystems services delivery and urban services delivery is collectively built and documented; identification and documentation of relevant interventions, including comparative assessment with alternative solutions (pure EbA options, hybrid EbA options)

Define implementation arrangements; consult with stakeholders, and with urban planners to get them involved in development activities; consider in and outside of the city administrative boundary relating to ecosystem services interacting with the city

2.2.5. Implementation arrangements are designed taking into consideration the consultation' results; specific attention is drawn on the boundary issues

Support adjustments of urban policy and planning processes; identify city level adaptation activities to build on, and pursue opportunities for mainstreaming ecosystem based adaptation into key sectoral planning processes at the city level. Integrate EBA into the municipal policy and operational framework; Promote use of green infrastructure initiatives as well as improved building codes aligned to climate scenarios

2.3. EBA is translated in the municipal policy and operational framework

2.3.1. An action plan for promoting green infrastucture is designed and approved 2.3.2. Building codes take into account climate scenarios

Component 3: Institutional strenghtening 1,000,000

National scale 250,000



EXPECTED OUTCOMES



National endorsement and targeted capacity building of appropriate national level institution to lead the cross sectoral coordination and implementation urban ecosystem activities

3.1. Strengthened technical and institutional capacity of national planning authorities to integrate urban EbA into urban development planning.

3.1.1. High level roundtables and communication targeted at the policy level and high level representation of national climate change representatives as wess at sectoral ministries 3.1.2. Institutional arrangements are defined for the programme implementation

Capacity building of all relevant city institutions; determine capacity gaps and deliver intensive operational and technical capacity building activities on urban ecosystem management for adaptation

3.1.3. Cross-sectoral awareness-raising and training workshops are organized for national authorities

City-scale (3 cities) 750,000

Municipal and provincial endorsement and targeted capacity building of appropriate city and provincial level institution to lead the cross sectoral coordination and implementation urban ecosystem activities

3.2. Strengthened technical and institutional capacity of city management authorities to integrate urban EbA into urban development planning.

3.2.1. High level roundtables and communication targeted at the municipal and provincial level 3.2.2. Institutional arrangements are defined for the programme implementation

Capacity building of all relevant city institutions; determine capacity gaps and deliver intensive operational and technical capacity building activities on urban ecosystem management for adaptation

3.2.3. Decision-making tools developed to integrate urban EbA into development planning. 3.2.4. Training on urban EbA provided to city management authorities in pilot cities.

Component 4: Sustainable Financing Schemes

500,000

National scale 500,000 Analyse private sector barriers for investment in urban adaptation activities (how to make projects "bankable")

4.1. Conditions for accessing private finance for urban adaptation activities in the Lao context are improved

4.1.1. Consultation with national and international experts 4.1.2. Stock-taking report (conditions for accessing private finance for urban adaptation activities in the Lao context) 4.1.3. Interventions on the regulation framework; focus on the regulation framework for Private-Public-Partnerships and for Citizen-Private-Public- Partnerships



EXPECTED OUTCOMES



Analyse insurance opportunities for urban adaptation infrastructure

4.2. Guidelines for the implementation of climate- insurance for urban adaptation infrastructure are defined

4.2.1. Consultation with national and international experts 4.2.2. Framing potential insurance schemes and related implementation conditions

City-scale (3 cities)

Design new income-generating models

4.3. Conditions for developing new income-generating models in relation to urban EBA are defined and addressed

4.3.1. Consultation with national and local stakeholders 4.2.2. Potential alternative livelihoods based on the benefits of city-specific urban EbA interventions are documented; focus on the Payment for Ecosystem Approach

Support a city's creditworthiness scheme if relevant

4.4. City has been through the creditworthiness process

4.4.1. Screening the opportunity and feasibility of creditworthiness scheme 4.4.2. Technical support to the city through the process

Assess interest from insurance firms, tax incentive schemes, and other city financing options (e.g. local financing facilities) to provide sustained finance for urban ecosystem adaptation activities

4.5. A detailed financial scheme for EBA mainstreaming in the municipal management is in place

4.5.1. Consultation with international, national and local stakeholders; special attention to legal issues (local tax schemes) 4.5.2. Define guidelines for a tailored financial scheme for EBA mainstreaming in the municipal management

Component 5: Urban Ecosystem Conservation and/or restoration

6,000,000

City-scale (3 cities) 6,000,000

Identification, analysis and selection of preferred restoration sites for ecosystems inside the city (green spaces), passing through the city (rivers) and ecosystems surrounding of the city (source watersheds, productive landscapes)

5.1. City-specific urban EbA interventions appropriate to the social, cultural and environmental contexts – including urban reforestation, urban agriculture and wetland restoration – are identified, documented and prioritized

5.1.1. Process to collect and disseminate relevant information (traditional knowledge, historical data) from and among local communities (including social networks) is defined and implemented 5.1.2. Potential interventions are informed and prioritized 5.1.3. Implementation plans are defined: technical, organizational, financial aspects

Initiate urban ecosystem restoration activities collaboratively with national and city institutions, engaging local communities

5.2. A set of high priority interventions are implemented

5.2.1. Coordination of the implementation 5.2.2. Synergy with interacting sectoral initiatives is secured



EXPECTED OUTCOMES



Implement processes to ensure the completion, the functioning and the maintenance of the initiatives, taking into account potential disturbances; define prevention, information (e.g. early warning) and recovery processes

5.3. Conditions for the completion, the maintenance, the resilience of interventions are secured

5.3.1. Long term implementation and maintenance plans are defined: technical, organizational, financial aspects 5.3.2. Based on scenario findings, prevention and recovery plans are defined to take into account potential disturbances

Component 6: Knowledge sharing 1,500,000

National scale 1,500,000

Involvement of communities and stakeholders at all stages, combining horizontal (bottom-up and top-down) and vertical flows of information

6.1. Strengthened knowledge base and ressources for supporting the design of urban EbA interventions at national and local scale

6.1.1. Develop knowledge products and tools on methodology for long term climate scenario planning at the city scale 6.1.2. Establishment of research & training centers; of educational modules for targeted institutions

Establish a framework for upscaling urban EBA within the country

6.2. National upscaling strategies are developed and institutionalized to promote urban EbA approaches

6.2.1. National and local consultation 6.2.2. Lessons learned from urban EbA interventions reviewed, synthesized and disseminated to local authorities and the public. 6.2.3. Define guidelines for national upscaling strategies to promote urban EbA approaches

Establish a research framework

6.3. Research frameworks are in place

6.3.1. Long-term research programmes established in scientific institutions to assess the long-term societal, economic and ecological benefits of urban EbA in pilot cities. 6.3.2. Collaboration with regional institutions for cross-boundary research and implementation

Communicate the project approach among similar cities and engage city mayors in global discourse to bridge knowledge gaps on urban ecosystems and adaptation

6.4. The Lao experience is communicated at international scale

6.4.1. Participation to international conferences and technical workshops 6.4.2. City's membership to city networks



EXPECTED OUTCOMES



Building of a strong evidence base on ecosystems contribution to urban adaptation and resilience to contribute to international, national, local knowledge bases

6.5. Strengthened knowledge base for supporting the design of urban EbA interventions, and increased public awareness of the potential of urban EbA interventions to reduce vulnerability to climate change impacts

6.5.1. Knowledge on integrating urban EbA into city planning and management processes generated and made available on local, national and international platforms to facilitate the upscaling of urban EbA approaches throughout the region.

Component 7: Monitoring&Evaluation 500,000

National scale 200,000 Establishement of an innovative M&E scheme for urban EBA intervention

7.1. Implementation and performance of urban EbA interventions is monitored and assessed.

7.1.1. Design of "SMART" indicators (process-based and performance-based indicators), taking into consideration emerging methodological schemes for assessing projects' performance against resilience 7.1.2. Design M&E procedures, including access to data, opportunity for using new data-providing technologies (e.g. satellite imagery) 7.1.3. Design an evaluation process; specific attention will be drawn to performance assessment, building on current innovative approaches for adaptation M&E 7.1.4 Organize the data management: central consolidation of cities' results, dissemination of results to different accountability targets

City-scale (3 cities) 300,000 Implementation of M&E scheme at city level

7.2. Implementation and performance of urban EbA interventions in pilot cities is monitored and assessed.

7.2.1. M&E processes are implemented in consistency with existing M&E frameworks of relevant; Priority will be given to low costs M&E processes (e.g. participatory monitoring processes)


Annex V-1. Theory of change for urban EBA: a general LDCs perpective


Annex V-2. Urban EBA in LAO PDR: a draft baseline


Annex V-3. Urban EBA in LAO PDR: a BAU / counterfactual scenario


Annex V-3. Urban EBA in LAO PDR: a draft project’s vision


Annex VI. M&E Indicators’ framework (provisional)

A provisional indicators’ framework is presented below; it is defined in consistency with the GCF result’s framework. It will be revised during the feasibility study, and will be used as an input to the M&E scheme.

GCF result’s area: Climate impact potential

GCF Criteria GCF Assessment indicators Projects' indicators (provisional)

Contribution to increased climate- resilient sustainable development

� Expected total number of direct and indirect beneficiaries, (reduced vulnerability or increased resilience); number of beneficiaries relative to total population, particularly the most vulnerable groups

./ Direct ultimate beneficiaries: inner-city inhabitants

./ Indirect ultimate beneficiaries: inhabitants of the suburban area ./ Intermediate beneficiaries: institutional actors and engaged stakeholders ./ Focus on the most vulnerable: informal settlements (both dependent on ecosystems services and exposed to climate- induced disturbances)


� Degree to which the activity avoids lock-in of long- lived, climate- vulnerable infrastructure

./ Ecosystems-based infrastructure = more flexible in time compared to hard infrastructure


� Expected reduction in vulnerability by enhancing adaptive capacity and resilience for populations affected by the proposed activity, focusing particularly on the most vulnerable population groups and applying a gender-sensitive approach � Expected strengthening of adaptive capacity and reduced exposure to climate risks � Expected strengthening of awareness of climate threats and risk- reduction processes

./ Ultimate beneficiaries actively engaged in the whole process; use of traditional / local knowledge to design solutions ./ Preventing discontinuity of services; securing access to critical services even in case of climate-induced disturbances ./ Avoided damages, both from slow onset changes (e.g. the most common way cities try to obtain more water is tapping into groundwater to meet urban water needs, with potential consequent problems of soil subsidiency) and from disasters



./ Stewardship on ecosystems services

./ Diversification of livelihoods

./ Improved knowledge and awareness regarding potential risks ./ Engaging women and children in the infrastructure design and maintenance


� Expected strengthening of institutional and regulatory systems for climate-responsive planning and development

./ Linking ecosystem (and natural resources) management to urban services delivery; mainstreaming into the right policy processes in relation to adaptation planning ./ Strengthening institutional capacity of cities’ representatives to deal with climate change impacts ./ Focus on key institutional issues/ opportunities for change: land use regulation, property rights, tax system


� Expected increase in generation and use of climate information in decision-making

./ Design of city-scale climate scenarios, production and use of tailor-made climate data; screening opportunities for innovative ways of cost-efficient data production (e.g. satellite imagery, big data, social networks, participatory processes)

./ Design of tools and methodologies adequate to local conditions and available data


GCF result’s area: Paradigm shift Potential

GCF Criteria GCF Assessment indicators Projects' indicators (provisional) Potential for knowledge and learning

� Contribution to the creation or strengthening of

knowledge, collective learning processes, or institutions

To inform � Existence of a monitoring and evaluation plan and a plan

for sharing lessons learned so that they can be incorporated within other projects

Contribution to the creation of an enabling environment Contribution to the regulatory framework and policies

� Sustainability of outcomes and results beyond completion of the intervention

� Market development and transformation � Potential for strengthened regulatory

frameworks and policies to drive investment in low-emission technologies and activities, promote development of additional low-emission policies, and/or improve climate-responsive planning and development

To inform � Arrangements that provide for long-term and financially sustainable continuation of relevant outcomes and key relevant activities derived from the project/programme beyond the completion of the intervention

Overall contribution to climate- resilient development pathways consistent with a country’s climate change adaptation strategies and plans

� Potential for expanding the proposal’s impact without equally increasing its cost base (scalability)

� Potential for exporting key structural elements of the proposal to other sectors, regions or countries (replicability)

To inform � Scaling up the scope and impact of the intended project/programme without equally increasing the total costs of implementation � A theory of change for replication of the proposed activities in the project/programme in other sectors, institutions, geographical areas or regions, communities or countries

� Degree to which the programme or project reduces proposed risks of investment in technologies and strategies that promote climate resilience in developing countries

GCF result’s area: Sustainable development Potential



Environmental co- benefits

� Expected positive environmental impacts, including in other result areas of the Fund, and/or in line with the priorities set at the national, local or sectoral level, as appropriate

To inform � Degree to which the project or programme promotes positive environmental externalities such as air quality, soil quality, conservation, biodiversity, etc.

Social co-benefits

� Expected positive social and health impacts, including in other result areas of the Fund, and/or in line with the priorities set at the national, local or sectoral levels, as appropriate

To inform � Potential for externalities in the form of expected improvements, for women and men as relevant, in areas such as health and safety, access to education, improved regulation and/or cultural preservation

Economic co-benefits

� Expected positive economic impacts, including in

other result areas of the Fund, and/or in line with the priorities set at the national, local or sectoral level, as appropriate

To inform � Potential for externalities in the form of expected improvements in areas such as expanded and enhanced job markets, job creation and poverty alleviation for women and men, increased and/or expanded involvement of local industries; increased collaboration between industry and academia; growth of private funds attracted; contribution to an increase in productivity and competitive capacity; improved sector income-generating capacity; contribution to an increase in energy security; change in water supply and agricultural productivity in targeted areas, etc.

Gender-sensitive development impact

� Potential for reduced gender inequalities in climate change impacts and/or equal participation by gender groups in contributing to expected outcomes

To inform � Explanation of how the project activities will address the needs of women and men in order to correct prevailing inequalities in climate change vulnerability and risks


GCF result’s area: Needs of recipients

GCF Criteria GCF Assessment indicators Projects' indicators (provisional) Vulnerability of the country

� Scale and intensity of exposure of people, and/or

social or economic assets or capital, to risks derived from climate change

To inform � Intensity of exposure to climate risks and the degree of vulnerability, including exposure to slow onset events � Size of population and/or social or economic assets or capital of the country exposed to climate change risks and impacts

Vulnerable groups and gender aspects

� Comparably high vulnerability of the beneficiary

groups

To inform � Proposed project/programme supports groups that are identified as particularly vulnerable in national climate or development strategies, with relevant sex disaggregation

Economic and social development level of the country and the affected population

� Level of social and economic development of the

country and target population

To inform � Level of social and economic development (including income level) of the country and target population (e.g. minorities, disabled, elderly, children, female heads of households, indigenous peoples, etc.)

Absence of alternative sources of financing

� Opportunities for the Fund to overcome specific

barriers to financing

To inform � Explanation of the existing barriers that create absence of alternative sources of financing and how they will be addressed

Need for strengthening institutions and implementation capacity

� Opportunities to strengthen institutional and implementation capacity in relevant institutions in the context of the proposal

To inform � Potential of the proposed programme or project to strengthen institutional and implementation capacity


GCF result’s area: Country ownership

GCF Criteria GCF Assessment indicators Projects' indicators (provisional) Existence of a national climate strategy

� Objectives are in line with priorities in the

country’s national climate strategy

To inform � Programme or project contributes to country’s priorities for low- emission and climate-resilient development as identified in national climate strategies or plans, such as nationally appropriate mitigation actions (NAMAs), national adaptation plans (NAPs) or equivalent, and demonstrates alignment with technology needs assessments (TNAs), as appropriate

Coherence with existing policies

� Proposed activity is designed in cognizance of

other country policies

To inform � Degree to which the activity is supported by a country’s enabling policy and institutional framework, or includes policy or institutional changes

Capacity of accredited entities or executing entities to deliver

� Experience and track record of the Accredited

Entity or executing entities in key elements of the proposed activity

To inform � Proponent demonstrates a consistent track record and relevant experience and expertise in similar or relevant circumstances as described in the proposed project/programme (e.g. sector, type of intervention, technology, etc.)

Engagement with civil society organizations and other relevant stakeholders

� Stakeholder consultations and engagement

To inform � Proposal has been developed in consultation with civil society groups and other relevant stakeholders, with particular attention being paid to gender equality, and provides a specific mechanism for their future engagement in accordance with the Fund’s environmental and social safeguards and stakeholder consultation guidelines. The proposal places decision-making responsibility with in-country institutions and uses domestic systems to ensure accountability


GCF result’s area: Effectiveness and effciciency

GCF Criteria GCF Assessment indicators Projects' indicators (provisional) Cost-effectiveness and efficiency regarding financial and non-financial aspects

Financial adequacy and appropriateness of concessionality

To inform � Proposed financial structure (funding amount, financial instrument, tenor and term) is adequate and reasonable in order to achieve the proposal’s objectives, including addressing existing bottlenecks and/or barriers � Demonstration that the proposed financial structure provides the least concessionality needed to make the proposal viable

Programme/project financial viability and other financial indicators

Expected economic and financial internal rate of return

Financial viability in the long run

To inform � Economic and financial rate of return with and without the Fund’s support (i.e. hurdle rate of return or other appropriate/relevant thresholds) � Description of financial soundness in the long term (beyond the Fund’s intervention)

Industry best practices

Application of best practices and degree of innovation

To inform � Explanations of how best available technologies and/or best practices, including those of indigenous peoples and local communities, are considered and applied � If applicable, the proposal specifies the innovations or modifications/adjustments made based on industry best practices


Annex VII. PRE FEASIBILITY STUDY Please provide the pre-feasibility study report for the project/programme. Please also provide the feasibility study report, environmental and social impact assessment, and/or evaluation report, if available.

A detailed feasibility study will be conducted during the project development phase, using the findings provided in this concept note and its Annex.

ecosystems and urban adaptation in lao pdr...change threats at basin’s scale are floods, drought,...

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