The World Bank Approves Single-Largest Grant Ever for the Environment in Support of Madagascar's Third Environment Program

Posted 26th of May 2004

The World Bank Board yesterday approved an International Development Association (IDA) Development Grant of US$40.0 million equivalent and a Global Environment Facility (GEF) Trust Fund Grant of US$9.0 million to support the implementation of the third phase of Madagascar's National Environment Action Plan.

The grant constitutes the single-largest concessional financing package for the environment provided by the Bank in its 60-year history.

The Third Environment Program Support Project, as it is known, is primarily focused on strengthening the results of its previous two phases. It will expand Madagascar's protected areas network to include key missing habitats, establish conservation sites in natural forests and transfer forest management responsibilities to communities. These will be complemented by measures aimed at reducing existing pressures on natural forests, including reforestation and the scaling-up of the usage of efficient wood-fuel technologies.

"The project aims at ensuring that the long-term management of Madagascar's unique natural habitats and biodiversity resources are set on a more sustainable footing", said Martien van Nieuwkoop, the World Bank's Task Team Leader for the project.

Habitat protection and biodiversity conservation are expected to contribute directly to poverty reduction and economic growth in Madagascar.

"Biodiversity conservation efforts are essential in unleashing the significantly high revenue-generating potential of the eco-tourism sector in Madagascar", van Nieuwkoop pointed out, adding that the substantial hydrological benefits generated under the project will highly benefit poor farmers in particular.

As a member of a broad coalition of bilateral and multilateral donors and international NGOs, including Conservation International, the World Wildlife Fund for Nature, and the Wildlife Conservation Society, the Bank has supported Madagascar's National Environmental Action Plan since its inception in the early 1990s. So far, the Plan is credited with achieving a number of tangible results, including: (i) reduced deforestation and erosion rates; (ii) greater ownership by communities through forest management transfers of sustainable natural resource management; (iii) secured diversity of key habitats and species; and (iv) increased revenue generating capacity of conservation efforts as testified by the growing number of visitors to Madagascar's national parks.

Funding for the project is provided jointly by IDA, the World Bank's financing arm for the poorest countries, and by the Global Environmental Facility Trust Fund (GEF), which is a mechanism for providing new and additional grant and concessional funding to meet the incremental costs linked to initiatives taken to achieve agreed global environmental targets in four focal areas. The areas are: climate change; biological diversity; international waters; and ozone layer depletion. GEF also supports the work of the global agreements to combat desertification and eliminate persistent organic pollutants. The World Bank Group is one of GEF's implementing agencies and supports countries in preparing GEF co-financed projects as well as in backstopping their implementation.