GEF SECRETARIAT REVIEW FOR FULL/MEDIUM-SIZED PROJECTS Country/Region : Mexico Project Title : Integrating Trade offs between Supply of Ecosystem Services and Land use Options into Poverty Alleviation Efforts and Development Planning GEFSEC Project ID : 3813 GEF Agenc(ies) : UNEP GEF-4 Strategic Prog : Anticipated project financing ($ million) : PPG : Co-Financing : PIF Approval Date : Program Manager : Mark Zimsky At PIF/Work Program Inclusion 17.94 GEF Project Grant : 5.90 Total Project Cost : 23.84 Target Work Program Date : GEF Agency Contact Person : Robert Erath At CEO endorsement (FSP)/Approval (MSP) A. Eligibility 1. Is the Participating Country eligible? October 17, 2008 Yes. 2. Has the operational focal point endorsed the project? October 17, 2008 Yes, in a letter dated January 21, 2008. 3. Which GEF Strategic Objective/Program does the project fit into? October 17, 2008 Strategic Program Four, Strengthening the policy and regulatory framework for mainstreaming biodiversity. October 20, 2008 Page 1 of 9 At PIF/Work Program Inclusion At CEO endorsement (FSP)/Approval (MSP) 4. Does the Agency have a comparative advantage for the project? October 17, 2008 The project is aligned with UNEP's program on ecosystem services. Please clarify how UNEP is going to add value in terms of coordination, collaboration, and cross-fertilization amongst a number of GEF-supported projects on ecosystem services that are promoting the development of tools to analyze ES trade-offs and apply this information to policy responses and land-use decisions. There appears to be overlap between the projects and none of the PIFs make any mention of how UNEP as the GEF IA will facilitate cross-project learning through its program at headquarters. The PIF makes mention of UNEP's core competencies being aligned with this project, but it is not clear how in this project and the other GEF-projects on the same theme, that this competency is being applied in practical terms. B. Resource Availability 5. Is the proposed GEF Grant (including the Agency fee) within the resources available for (if appropriate): - The RAF allocation? October 17, 2008 Yes. - The focal areas? October 17, 2008 NA October 20, 2008 Page 2 of 9 At PIF/Work Program Inclusion At CEO endorsement (FSP)/Approval (MSP) - Strategic objectives? October 17, 2008 NA - Strategic Program October 17, 2008 NA C. Project Design 6. Will the project deliver tangible global environment benefits? October 17, 2008 Not Applicable at CEO Endorsement (FSP)/Approval (MSP) The Mixteca region of northern Oaxaca is one of the hardest hit by poverty and environmental degradation (land and soil erosion) with the highest migration rate in the entire state, thus, it is difficult to see how the project would generate tangible global environmental benefits. Please clarify the condition of the 100,000 hectares where the project will intervene and make a more explicit case for the generation of global environmental benefits consistent with the size of the GEF investment. Given that this is being submitted as a biodiversity project and not a land degradation project, the global environmental benefits should be expressed in terms of the biodiversity benefit. 7. Is the global environmental benefit measurable? Not Applicable at PIF/Work Program Inclusion 8. Is the project design sound, its framework consistent sufficiently clear (in particular for the outputs)? October 17, 2008 October 20, 2008 Page 3 of 9 At PIF/Work Program Inclusion At CEO endorsement (FSP)/Approval (MSP) Given the serious environmental degradation in Mixteca, and the fact that the PIF does not identify exactly where the area of intervention will be in the Mixteca region, it is difficult to assess how biodiversity conservation will be mainstreamed into natural resource use and development planning, when recovering basic productive capacity of the land and addressing chronic water shortages are paramount. Thus, the focus on trade-offs on ecosystem services actually seems too sophisticated when the focus should likely be on regenerating soil fertility, increasing vegetation cover etc; that is, addressing serious problems and repercussions of land degradation. The PIF fails to demonstrate how the integration of ES considerations into land-use decision making in Mixteca will benefit biodiversity of global significance. Please clarify in the PIF the exact area of the project intervention in order to clarify the biological context of the intervention and the value of the remaining biodiversity that the project proposes to conserve through this mainstreaming approach. Under Component Four, please eliminate the funding and activities designated to making the tools and methodologies "available to the GEF portfolio". Please focus this component on taking the lessons and capacities developed from this intervention and extending them to the parts of Mixteca that lie outside of Oaxaca (Puebla and Guerrero) as this makes the most practical sense given that these states share similar pressures on land and share similar ecological constraints and challenges with regards October 20, 2008 Page 4 of 9 At PIF/Work Program Inclusion At CEO endorsement (FSP)/Approval (MSP) to soil and water conservation. Please note in Table B, that the PPG amounts should not be included. Please delete and recalculate the budget tables. 9. Is the project consistent with the recipient country’s national priorities and policies? October 17, 2008 The project is consistent with national development strategies, but the linkage to the NBSAP is not clear. Please be more explicit in demonstrating the linkage of the project to the priorities expressed in the NBSAP. 10. Is the project consistent and properly coordinated with other related initiatives in the country or in the region? October 17, 2008 The project is not yet coordinated with other related initiatives but a list of potential projects is listed. Please review this list as all are not operational. Please provide more details on coordination with the following projects given the overlap in Agencies implementing the projects and the subject matter: WB Environmental Services Project, and WB Sustainable Slope Management Project. 11. Is the proposed project likely to be cost-effective? October 17, 2008 Not Applicable at CEO Endorsement (FSP)/Approval (MSP) The argument for cost-effectiveness is not convincing. The project outcome of improving land-use protocols for 100,000 hectares at the cost of 24$ million is very expensive. Please strengthen the argument. October 20, 2008 Page 5 of 9 At PIF/Work Program Inclusion At CEO endorsement (FSP)/Approval (MSP) 12. Has the cost-effectiveness sufficiently been demonstrated in project design? Not Applicable at PIF/Work Program Inclusion 13. Is the project structure sufficiently close to what was presented at PIF? Not Applicable at PIF/Work Program Inclusion 14. Does the project take into account potential major risks, including the consequences of climate change and includes sufficient risk mitigation measures? October 17, 2008 Risks are identified and mitigation measures proposed. Please clarify why a "work-force" will be needed for the project and what activities they will implement. Given the region's aridity, soil ersion and water shortage problems, please discuss the climate change risks. D. Justification for GEF Grant 15. Is the value-added of GEF involvement in the project clearly demonstrated through incremental reasoning? October 17, 2008 Please improve this section and try to more clearly present the incremental reasoning. This will be easier when the area of the intervention is more carefully described with regards to its importance from a biodiversity perspective. Please remember that the GEF increment should generate global environmental benefits and as presented in the PIF, the predominant benefits will be local. Ecosystem goods and services that may be conserved or more sustainably used as a result of the project are not globally significant, per se, unless the "good" is the existence of biodiversity of global importance, which has October 20, 2008 Page 6 of 9 At PIF/Work Program Inclusion At CEO endorsement (FSP)/Approval (MSP) not been clearly justified and described in the PIF. Please clarify. 16. How would the proposed project outcomes and global environmental benefits be affected if GEF does not invest? Not Applicable at PIF/Work Program Inclusion 17. Is the GEF funding level of project management budget appropriate? 18. Is the GEF funding level of other cost items (consultants, travel, etc.) appropriate? Not Applicable at PIF/Work Program Inclusion 19. Is the indicative co-financing adequate for the project? October 17, 2008 Not Applicable at CEO Endorsement (FSP)/Approval (MSP) The cash cofinancing is far less than a 1:1 match. Given that this is a mainstreaming project that will generate considerable local and national benefits, this is surprising. Please clarify why the cash cofinancing ratio is so weak. Please explain how a $10 million in-kind donation from CONAFOR was calculated given that this is very large amount of in-kind cofinancing. Please clarify how much cofinancing UNEP is providing as the GEF agency that has an institutional focus on Ecosystem Services. 20. Are the confirmed co-financing amounts adequate for each project component? Not Applicable at PIF/Work Program Inclusion 21. Does the proposal include a budgeted ME Plan that monitors and measures results with indicators and targets? Not Applicable at PIF/Work Program Inclusion E. Secretariat's Response to various comments from: - STAP October 20, 2008 Page 7 of 9 At PIF/Work Program Inclusion At CEO endorsement (FSP)/Approval (MSP) - Convention Secretariat - Agencies’ response to GEFSEC comments Not Applicable at PIF/Work Program Inclusion - Agencies’ response to Council comments Not Applicable at PIF/Work Program Inclusion F. Secretariat Decisions 22. Is PIF clearance being recommended? October 17, 2008 Not Applicable at CEO Endorsement (FSP)/Approval (MSP) No. The PIF requires considerable revisions to address the eligibility issues referenced above and to complete sections that are not adequate. Please also edit the document and remove terms like "encino" and replace with "Oak" and eliminate acronyms like BAU (business as usual), etc. In other words, please conduct a copy edit of the document before submission. 23. Items to consider at time of CEO Endorsement. Not Applicable at CEO Endorsement (FSP)/Approval (MSP) 24. Is CEO Endorsement being recommended? Not Applicable at PIF/Work Program Inclusion REQUEST FOR PPG APPROVAL 1. Are the proposed activities for project preparation appropriate? October 20, 2008 Page 8 of 9 At PIF/Work Program Inclusion At CEO endorsement (FSP)/Approval (MSP) 2. Is itemized budget justified? 3. Is the consultant cost reasonable? 4. Is PPG being recommended? 5. Other Comments October 20, 2008 Page 9 of 9