PROJECT IDENTIFICATION FOR) #PIF$

PROJECT T!PE: F"%%-SI=ED PROJECT T&E EF TR"ST F"ND

PART I: PROJECT IDENTIFICATION EFSEC PROJECT ID1: 3223

Submission Date: October 31, 2007 Re-submission Date: 11/01/2007 INDICATI>E CA%ENDAR )i:estones E71e/te2 Dates %or' Progra0 "1or )SP# N(A= under ,) C.O .ndor*e0ent(A ro/al Bune 200@ -.) Agenc4 A ro/al Bul4 200@ ,0 le0entation Start October 200@ 3id-ter0 !e/ieA "i1 lanned# )ebruar4 2010 ,0 le0entation Co0 letion ;ece0ber 2011

EF A ENC! PROJECT ID: P090376 CO"NTR!#IES$: China PROJECT TIT%E: Shanghai Agricultural and Non- oint Pollution !eduction "SANP!# ro$ect EF A ENC!#IES$: %orld &an' OT&ER E'EC"TIN PARTNERS: N(A EF FOCA% AREAS: )ull-*i+ed Pro$ect,nternational %ater*)ull-*i+ed Pro$ect EF-( STRATE IC PRO RA)#S$: ,%-SP 2 NA)E OF PARENT PRO RA) / ")*RE%%A PROJECT: -.)(%& Strategic Partner*hi ,n/e*t0ent )und 1or Pollution !eduction in the 2arge 3arine .co*4*te0* o1 .a*t A*ia5

A5

PROJECT FRA)E+OR, ".6 and table a* nece**ar4# P-o.e/t Ob.e/ti0e: 7o de0on*trate e11ecti/e and inno/ati/e ollution reduction acti/itie* in Shanghai8* rural area* in order to reduce the rural(agricultural ollution load "e* eciall4 nutrient*# to the .a*t China Sea5
P-o.e/t Com1onents 1< REEN FIE%D SITES - C&ON )IN IS%AND Com1onent 1: Domesti/ Anima: +aste #DA+$ T-eatment in C4on8min8 In2i/ate 34et4eE71e/te2 Out/omes in0estment5 TA5 oSTA66 &oth "a#;A% con/erted to in/e*t0ent organic 1ertili+er "t# ( and 7A ollution reduced<<< "ton* &O;, N and P#= *igni1icant >uantit4 o1 *oil rehabilitated "ha#= *u*tainable agriculture 0ethod* de0on*trated "b#bene1it* o1 *e aration o1 li/e*toc' 1ro0 hu0an habitation de0on*trated5 E71e/te2 Out1uts In2i/ati0e In2i/ati0e EF CoFinan/in86 9inan/in86
"9 0# : "9 0# @ ?560 : 92 6510 05?0

Tota: #; m$

"a# organic 1ertili+er roce**ing ilot* e*tabli*hed= "b# dedicated ani0al roduction +one e*tabli*hed

Pro$ect ,; nu0ber Aill be a**igned initiall4 b4 -.)S.C5

Com1onent 2: E/oA8-i/u:tu-a: +aste "se Demonst-ation5 ?ian3ei >i::a8e

&oth in/e*t0ent and 7A

,ncrea*ed ublic outreach, aAarene**, and education= rural Aa*te bene1iciall4 utili+ed ( ollution reduced "ton* o1 &O;, N and P# NeA technolog4 *ucce**1ull4 de0on*trated "ton* o1 &O;, N and P ollution reduced#= Aetland *ucce**1ull4 re*er/ed and 0anaged

,0 ro/ed, 0oderni+ed, e6 anded eco-/illage

057?

1@

353?

@2

C510

Com1onent @: A-ti9i/ia: +et:an2 Se3a8e T-eatment in C4en.iaA4en

&oth in/e*t0ent and 7A

"a# decentrali+ed arti1icial Aetland *eAage treat0ent *4*te0 in lace= "b# 0anage0ent lan e*tabli*hed and re*ource* dedicated 1or natural Aetland "a# increa*ed ca acit4 1or 1ar0 relocation= "b# ilot bio1er0entation Aa*te treat0ent lant in lace "a# inno/ati/e technologie* i0 le0ented "b#Den/iron0entall4 1riendl4 agricultural +one e*tabli*hed= "c# garden t4 e treat0ent *4*te0 e*tabli*hed

05@?

2C

257?

76

3560

2< *RO+N FIE%D SITES: "PPER &"AN P" AREA Com1onent (: Dai-B Fa-m +aste T-eatment Com1onent C: Re1:i/ation o9 En0i-onmenta::B F-ien2:B )o2e-n A8-i/u:tu-a: Po::ution Cont-o: Te/4niDues

&oth in/e*t0ent and 7A

;ecrea*ed ollution 1ro0 dair4 1ar0* "ton* o1 &O;, N and P to a>uatic en/iron0ent#= neA technolog4 de0on*trated and ado ted ,nno/ati/e technologie* and 0ethod* that contribute to ollution reduction ado ted broadl4= ollution reduced "ton* o1 &O;, N and P to a>uatic en/iron0ent#

05@?

11

7500

@9

75@?

&oth in/e*t0ent and 7A

05@?

11

6597

@9

75@2

Com1onent E: 7A St-en8t4enin8 Ru-a: A-ea En0i-onmenta: P-ote/tion Dissemination an2 T-ainin8

!e*ult* o1 ro$ect acti/itie* re licated and a ;i*trict )inancing Eehicle ";)E# t4 e 0echani*0 ro/ed to be an e11ecti/e in*titutional tool 1or agricultural ollution reduction5

"a# target grou * o**e** neAl4 ac>uired ca acit4 to di**e0inate and re licate acti/itie* de0on*trated in C1 F C? "b# international con1erence *ucce**1ull4 carried out

0599

91

0510

1509

(<7F 1C 2E<G7 GC @1<EE < 2i*t the 9 b4 ro$ect co0 onent*5 7he ercentage i* the *hare o1 -.) and Co-1inancing re* ecti/el4 to the total a0ount 1or the co0 onent5 << 7A G 7echnical A**i*tance= S7A G Scienti1ic H technical anal4*i*5 <<< ollution a0ount* to be deter0ined during re aration

7< P-o.e/t mana8ement Tota: P-o.e/t Costs

1510

100

1510

*<

INDICATI>E FINANCIN P%AN S"))AR! FOR T&E PROJECT #; )$

-.) -rant Co-1inancing Tota:

P-o.e/t P-e1a-ation 05212 050@0 05292

P-o.e/t C57@@ 265@70 3156?@

A8en/B Fee2

Tota: ?500 2659? 3159?

6 Plea*e include the re/iou*l4 a ro/ed P;)* and lanned re>ue*t 1or neA PP-, i1 an45 ,ndicate the a0ount alread4 a 1ootnote here and i1 the -.) 1unding i* 1ro0 -.)-35

Plea*e note that both the PP- and Pro$ect a0ount "total IS9 ? 3# Aere a ro/ed b4 -.) Council in the Bune 2007 3eeting a* art o1 the Strategic Partner*hi ,n/e*t0ent )und, 7ranche 1b5
C5 INDICATI>E CO-FINANCIN FOR T&E PROJECT *! NA)E #IN PARENT&ESES$5 IF A>AI%A*%E #; )$ Sou-/es o9 Co-9inan/in8 Pro$ect -o/ern0ent Contribution Pro$ect -o/ern0ent Contribution Tota: /o-9inan/in8 PART II: PROJECT J"STIFICATION A< STATE T&E ISS"E5 &O+ T&E PROJECT SEE,S TO SO%>E IT5 AND T&E E'PECTED EN>IRON)ENTA% *ENEFITS TO *E DE%I>ERED:
%O*A%

"including ro$ect re aration a0ount# *! SO"RCE AND

TB1e o9 Co-9inan/in8 Ca*h Jind

Amount 265@7 050@ 2659?

Shanghai 3unici alit4 i* one o1 1our ro/incial-le/el citie* in China, Aith 0ore than 1@ 0illion re*ident*5 O1 it* total area o1 6,300 *> '0, onl4 10:, or 630 *> '0, con*titute* the core cit4= eight rural(*uburban di*trict* and one count4 "Chong0ing ,*land# co/er the re0aining 90:5 7he rural area* account 1or *o0e 60-70: o1 the load* o1 nitrogen, ho* horu*, and organic 0atter di*charged to Aatercour*e*, largel4 1ro0 the agriculture(li/e*toc' *ector5 ,n the area ad$acent to the Chang$iang "Kangt+e# !i/er e*tuar4 and Lang+hou &a4, in the .a*t China Sea, h4 o6ia i* a *eriou* roble0, and olluted agricultural run-o11, and untreated indu*trial and do0e*tic Aa*teAater di*charge*, are 0a$or *ource* o1 ollution5 3 Since the 19@0*, the u*e o1 che0ical 1ertili+er* ha* greatl4 increa*ed and the run-o11 o1 the*e *ub*tance* into the a>uatic en/iron0ent ha* cau*ed eutro hication to be ubi>uitou*5 7he nutrient loading to the 0arine en/iron0ent through 1re*hAater in1loA ha* re*ulted in an increa*ed 1re>uenc4 o1 har01ul algal bloo0* "LA&*# in the .a*t China Sea5 ,n 2003, there Aere @6 LA&* Aith a total area o1 u to 12,990 *> '05 7he*e bloo0* had a 0ea*urable i0 act on 1i*h *toc'* and other eco*4*te0 *er/ice*5 7he Aater >ualit4 in the Luang u !i/er "di*charging to the .a*t China Sea#, the 0ain *ource o1 drin'ing Aater 1or the 0unici alit4, ha* beco0e increa*ingl4 olluted o/er the a*t ten 4ear*, noA rendering it 0arginall4 acce table a* a *ource o1 drin'ing Aater5C Shanghai 3unici al -o/ern0ent "S3-# recogni+e* the need to addre** the Aater ollution i**ue* in order to achie/e it* ob$ecti/e o1 beco0ing a Aorld-cla** econo0ic and trade center5 An a0bitiou* o/erall rogra0 Aa* launched in 2003, *u orted b4 the 1ir*t ,&!; ada table rogra0 loan "AP2# to China o1 IS9700 0illion, *u orting a IS915? billion in/e*t0ent rogra0 "Shanghai Irban .n/iron0ent Pro$ectAP2#, Aith the ob$ecti/e o1 i0 ro/ing en/iron0ental condition* in the -reater Shanghai 3unici alit4 b4 rogre**i/e de/elo 0ent and i0 le0entation o1 integrated, 0etro olitan-Aide en/iron0ental 0anage0ent 0ea*ure*5 Inder the ongoing AP22, Shanghai i* ur*uing inno/ati/e Aa4* o1 e6tending
2

Agenc4 )ee recei/ed at the ti0e 7rance A o1 the ,n/e*t0ent )und 1or Pollution !eduction in the 2arge 3arine .co*4*te0* o1 .a*t A*ia Aa* a ro/ed b4 the Council5 3 ,n1or0ation deri/ed 1ro0 IN.P ( -.) ( Jal0ar -lobal ,nternational %ater* A**e**0ent "-,%A# the .a*t China Sea5 C Shanghai i* Aith AP2 *u ort con*tructing a neA Aater inta'e *4*te0 on Mhangt+e ri/er, otentiall4 to 1unction in a con$uncti/e 0ode Aith the e6i*ting Luang u ri/er inta'e5 3

*uch 0ea*ure* to it* le** a11luent, groAing di*trict* out*ide the core cit4 "ho0e to about ?0: o1 the o ulation#, in articular 1or *anitation "Aa*teAater# and *olid Aa*te 0anage0ent5 7he go/ern0ent i* al*o 0a'ing *igni1icant *tride* in changing the role o1 go/ern0ent 1ro0 a ro/ider o1 *er/ice* to 0ore o1 an enabler and 1acilitator5 %hile Shanghai ha* underta'en "and i* underta'ing# 0an4 critical en/iron0ental i0 ro/e0ent ro$ect*, Aith and be4ond ,&!; *u ort, the*e ha/e 0o*tl4 1ocu*ed on urgent 0unici al and indu*trial Aa*teAater need*5 A* a re*ult, rural non- oint ollution ha* noA beco0e the riorit4 ollution roble0 1or the Shanghai Aater en/iron0ent5 7he rural(*uburban di*trict* o1 Shanghai 1ace 0uch greater ob*tacle* than the core cit4 in rai*ing *table, long-ter0 1inancing 1or en/iron0ental in1ra*tructure in/e*t0ent, and ha/e le** e6 erience in en/iron0ental 0anage0ent5 ,n order to u*e ShanghaiN* *trength to hel the*e outl4ing di*trict* underta'e 'e4 en/iron0ental in/e*t0ent*, Shanghai e*tabli*hed a de0and-dri/en ;i*trict )inancing Eehicle ";)E# in 200? to a**i*t the*e di*trict* Aith ro$ect 0anage0ent and 1inance 0obili+ation5 ,n the co0 le6 *ubnational in*titutional en/iron0ent in China, thi* 0echani*0 i* a 0a$or organi+ational brea'through, Ahich to date ha* ro/ed *ucce**1ul5 ,t i* e6 ected that thi* initiati/e Aill be re licated in other 0unici alitie* acro** China5 Additional in*titutional and olic4 ad/ance* under the AP2 to date include re/i*ed regulation* 1or agricultural Aa*teAater ollution control, *trengthened ca acit4 o1 the Shanghai %ater Authorit4 1or 0unici al-Aide lanning, and a I er Luang u Catch0ent 3anage0ent Plan, all re1lected in trigger* 1or AP22 and AP235 7he ;)E i* being i0 le0ented through the Shanghai Chengtou .n/iron0ental A**et 3anage0ent Co5 2td5 "C.A3#, initiall4 Aith a IS930 0illion ,&!; contribution under AP22, and another IS930 0illion ,&!; *u ort ha* been re>ue*ted under the AP23, currentl4 under re aration5 7he ;)E-*u orted *ub- ro$ect* under AP22 and AP23 ha/e 1ocu*ed on i0 ro/ed *eAerage *4*te0*, Aa*teAater treat0ent, and *olid Aa*te 0anage0ent in toAn* in the *uburban di*trict*(count4, largel4 becau*e the technolog4 1or non- oint *olution* ha* not been de0on*trated5 %ith it* 0etro olitan-Aide co/erage, hoAe/er, it i* antici ated that C.A3 in 1uture 4ear* could al*o *u ort non- oint ollution ro$ect*, ba*ed on re>ue*t* 1ro0 *uburban di*trict*5 7he -.) ro$ect Aould build on the ;)E e6 erience to i0 le0ent a nu0ber o1 en/iron0ental rotection de0on*tration acti/itie* in Shanghai8* outer di*trict*, to addre** agricultural and non- oint ollution roble0*, and ro/ide >uic' re*ult* that could be u*ed to in1luence 1uture 1unding 1ro0 ,&!; and re lication throughout coa*tal China5 7he di**e0ination and re lication o1 the*e acti/itie* on a large *cale in 1uture ha*e* o1 the AP2, Aould contribute to i0 ro/ed Aater >ualit4 in the .a*t China Sea, a *hared Aater bod4 and large 0arine eco*4*te05 ,&!; 1inancing o1 IS9120 0illion re0ain unco00itted Aithin the Shanghai AP2 rogra0 "a ro/ed b4 the &an' in 2003#, 1or an AP2 Pha*e C, Ahich becau*e o1 thi* catal4tic ro$ect Aould be con*idered 1or 1urther agricultural(non- oint ollution in/e*t0ent* a* a 1olloAu to thi* -.) ro$ect5 7he ro$ect co0 onent* include: 1<
REEN

FIE%D SITES - C&ON

)IN

IS%AND

Com1onent 1: Domesti/ Anima: +aste #DA+$ T-eatment in C4on8min8 "a# *u ort ilot ro$ect* that con/ert ;A% into organic 1ertili+er, ro0ote organic 1ertili+er* to re lace che0ical 1ertili+er* to graduall4 rehabilitate the *oil, and de/elo 0ore ecologicall4 1riendl4 and *u*tainable agriculture5 "b# de0on*trate a dedicated ani0al roduction +one i*olated 1ro0 hu0an habitation5

Com1onent 2: E/o-A8-i/u:tu-a: +aste "se Demonst-ation5 ?ian3ei >i::a8e .6 and and 0oderni+e the e6i*ting eco-de0on*tration 1acilit4 at OianAei Eillage, Ahich ha* /a*t otential 1or ublic outreach5 Create a 0odern eco-agricultural *ite Aith organic 1ood roduction, co0 rehen*i/e u*e o1 rural Aa*te, 0ethane ga* roduction, and do0e*tic *eAage eco-treat0ent5 Com1onent @: A-ti9i/ia: +et:an2 Se3a8e T-eatment in C4en.iaA4en "a# con*truct a decentrali+ed arti1icial Aetland *eAage treat0ent *4*te05 "b# e*tabli*h a lan and dedicate re*ource* to enhance and rotect a natural Aetland, and u*e it 1or educational ur o*e*5 2< *RO+N FIE%D SITES: "PPER &"AN P" AREA Com1onent (: Dai-B Fa-m +aste T-eatment "a# de/elo a ro riate technical, in*titutional and 0anagerial ca acit4 1or relocating dair4 1ar0* "b# i0 le0ent a ilot bio-1er0entation Aa*te treat0ent lant, Ahich i* *tandardi+ed, ha* loA energ4 con*u0 tion, loA co*t, and loA labor re>uire0ent*5 Com1onent C: Re1:i/ation o9 En0i-onmenta::B F-ien2:B )o2e-n A8-i/u:tu-a: Po::ution Cont-o: Te/4niDues "a# de0on*trate inno/ati/e techni>ue* to reduce the utili+ation o1 che0ical 1ertili+er* and e*ticide*, and ro0ote organic 1ertili+er*, accurate 1ertili+er a lication, *a1e che0ical u*e, bio- e*ticide*, and non-che0ical technologie*5 ;i**e0inate in1or0ation and e*tabli*h a lant di*ea*e and in*ect e*t earl4 Aarning netAor'5 "b# e*tabli*h an en/iron0entall4 1riendl4 agricultural +one to de0on*trate loA che0ical 1ertili+er* and e*ticide u*e5 "c# *et u garden-t4 e arti1icial Aetland *eAage treat0ent lant "do0e*tic *eAage treat0ent, co00unit4 greening, and land*ca ing# 1or neA re*idential >uarter* 1or 1ar0er*5 Com1onent E: St-en8t4enin8 Ru-a: A-ea En0i-onmenta: P-ote/tion Dissemination an2 T-ainin8 "a# di**e0inate e6 erience 1ro0 Acti/itie* 1-? and ro/ide training 1or technical re lication to the ublic, local Shanghai 1ar0er*, *choolchildren, ro1e**ional* 1ro0 uni/er*itie*, re*earch in*titute*, and to go/ern0ent e6ten*ion de art0ent* in China and be4ond in coo eration Aith P.3S.A5 "b# international 7echnical .6change and ;i**e0ination Con1erence betAeen e6 ert* 1ro0 0anage0ent de art0ent* in Shanghai and other coa*tal area* o1 China, Aith the ai0 o1 re licating the re*ult* in China and be4ond5 *< DESCRI*E T&E CONSISTENC! OF T&E PROJECT +IT& NATIONA% PRIORITIES/P%ANS 7he current ro$ect 1it* Aithin the &an' -rou and China8* Countr4 Partner*hi Strateg4 "CPS#, Ahich *tate* that, Pbetter re*ource 0anage0ent i* e**ential to *u*tainable de/elo 0ent5P 7he CPS *tate* that the &an' -rou Aill hel to 0ain*trea0 en/iron0ental concern* into the de/elo 0ent roce**5 P7a'ing *te * to 0ini0i+e Aater ollutionQP and iloting and *caling u P olicie* and 0echani*0* to addre** agriculture non- oint ollutionQP are area* Ahere &an' engage0ent can be u*e1ull4 e6 anded5 7he ro$ect co0e* under the %&(-.) ,n/e*t0ent )und 1or Pollution !eduction in the 2arge 3arine .co*4*te0* o1 .a*t A*ia "the )und#, Ahich i* 0anaged in coo eration Aith the -.)(IN;P Partner*hi * 1or .n/iron0ental 3anage0ent o1 the Sea* o1 .a*t A*ia "P.3S.A#5 P.3S.A i* art o1 the regional i0 le0entation lan o1 the IN .n/iron0ent Progra0 -lobal Progra00e o1 Action "-PA# 1or the Protection o1 the 3arine .n/iron0ent 1ro0 2and-ba*ed Acti/itie*5 7he ob$ecti/e o1 the )und i* to *cale u in/e*t0ent to reduce land-ba*ed Aater ollution in coa*tal area* and 0a$or ri/er ba*in* in .a*t A*ia5

C< DESCRI*E T&E CONSISTENC! OF T&E PROJECT +IT& PRO RA)S:

EF STRATE IES AND FIT +IT&

STRATE IC

7he )und and the SANP! are con*i*tent Aith -.)N* Conta0inant-&a*ed O erational Progra0 10 "OP10#, Ahich ai0* to de0on*trate Aa4* o1 o/erco0ing barrier* to the ado tion o1 be*t ractice* that li0it conta0ination o1 ,nternational %ater*5 7he4 are al*o con*i*tent Aith -.)8* current Strategic Ob$ecti/e 2, Rto catal4+e tran*boundar4 action* addre**ing Aater concern*,S * eci1icall4 to reduce land-ba*ed coa*tal ollution, and Aith Strategic Progra0 2, Rreducing nutrient o/er-enrich0ent and o64gen de letion 1ro0 land-ba*ed ollution o1 coa*tal Aater* in 23.* con*i*tent Aith the -PA5S A* noted abo/e regarding h4 o6ia and eutro hication, the a>uatic en/iron0ent ad$acent to ShanghaiN* coa*tline i* one o1 the 0ain ollution hot* ot* in the .a*t China Sea5 7he a0ount o1 nutrient* reduced Aould be clo*el4 0onitored in the area* o1 inter/ention5 D< O"T%INE T&E COORDINATION +IT& OT&ER RE%ATED INITIATI>ES: 7he SANP! i* art o1 a larger *trateg4, P.3S.AN* Su*tainable ;e/elo 0ent Strateg4 o1 the Sea* o1 .a*t A*ia, and i* the 1ir*t ro$ect under the )und to addre** agricultural, and non- oint ollution5 A* *uch it bring* great /alue to the )und and P.3S.A5 7he SANP! i* incre0ental to the Shanghai Irban .n/iron0ent AP2, Ahich ai0* at i0 ro/ing the en/iron0ental 0anage0ent Aithin the -reater Shanghai 3unici alit4, * eci1icall4 in Aater >ualit4, *olid Aa*te, and *anitation5 ,t i* clo*el4 related to the e6i*ting ;)E rogra0 under AP22 and AP23, Ahich i* al*o 1ocu*ing on outl4ing area* o1 the 0unici alit45 7he SANP! originated in con$unction Aith the re aration o1 the AP22, Ahen *tudie* carried out under the AP2 deter0ined that the rinci al *ource o1 Aater ollution a1ter 0unici al Aa*teAater Aa* agricultural, and non- oint ollution5 ,t i* there1ore integral to the *trateg4 o1 the AP2, Ahich to date ha* 1ocu*ed on 0ore traditional 0unici al en/iron0ental roble0*5 E< DISC"SS
T&E >A%"E-ADDED OF INCRE)ENTA% REASONIN

EF IN>O%>E)ENT IN T&E PROJECT DE)ONSTRATED T&RO" &

7he -.) ro$ect Aill de0on*trate inno/ati/e techni>ue* in order to catal4+e 1urther in/e*t0ent 1or rural, agricultural and non- oint ollution reduction, Ahich can be carried out b4 the di*trict*(count4 Aith *u ort o1 the ;)E or otherAi*e, a* re>uired, in con$unction Aith AP23 and(or in o**ible *ub*e>uent ha*e* o1 the AP2 " ha*e ,E#5 &ecau*e o1 the di11icultie* in treating agricultural ollution in rural area*, and in * ite o1 ShanghaiN* e11ort* to control non- oint ollution *ource*, there are ca ital and technical barrier* to the ollution reduction5 So 1ar, there are /er4 li0ited non- oint ollution reduction ro$ect* in Shanghai addre**ing rural area* and agriculture, i5e5 loA co*t, energ4-e11icient *olution* that u*e Aa*te* a* re*ource*, *uitable a* re1erence* and 1or re lication5 Agricultural entitie* ha/e *carce re*ource* and are *el1-1inancing, Ahich account* 1or li0ited rogre** on thi* *ub$ect to date, and a* a re*ult technical ad/ance* ha/e been lagging5 7he Shanghai 3unici al and ;i*trict(Count4 -o/ern0ent* ha/e to date e0 ha*i+ed 0unici al "urban# and indu*trial ollution control and related in/e*t0ent*5 7hi* to *o0e e6tent al*o re1lect* olic4 and in*titutional Aea'ne**e* in addre**ing agricultural and non- oint ollution5 7he ro o*ed ro$ect i* e6 ected to ha/e a *igni1icant catal4tic e11ect on the abo/e5 Inder the ba*eline *cenario, agricultural and non- oint ollution in Shanghai Aould not be addre**ed, or Aould be addre**ed in a iece0eal, li0ited, and uncoordinated Aa45 A coordinated a roach toAard* addre**ing li/e*toc' and other rural area Aa*te Aould be ab*ent, and ollution load* to the .a*t China Sea Aould increa*e5 %ater and *oil >ualit4 Aould continue to deteriorate5 .6i*ting e11ort* to addre** ollution Aould be i0 le0ented onl4 artl4, and o/er a longer eriod, and Aould ha/e li0ited li'elihood o1 re lication5
6

7he Shanghai Irban .n/iron0ent AP2, *u orted b4 ,&!;, i* to date ro/iding Aa*teAater 1acilitie*, but 0ainl4 to the Shanghai cit4 center and other urban area* "toAn*#, and Aill ha/e li0ited o/erall i0 act in the 3unici alit4N* rural area* in the outl4ing di*trict*5 7he e6i*tence o1 the ;i*trict )inancing Eehicle ";)E# in Shanghai, e*tabli*hed under the AP2 in 200?, Aho*e ur o*e i* to utili+e ShanghaiN* e6i*ting ro$ect 0anage0ent, 1inancial and technical ca acit4, Ahich i* high, to *u ort ro$ect* in the outl4ing di*trict*, i* S3-N* a roach to *trengthen ollution 0itigation in the di*trict*5 LoAe/er, the ;)E acti/itie* are 1or the 1ore*eeable 1uture 0o*tl4 oriented toAard* the toAn* in the outer di*trict*5 %ithout a dedicated co00it0ent and catal4tic contribution 1ro0 a -.)-1inanced ro$ect, it i* unli'el4 to be a*'ed b4 the di*trict*(count4 to addre** non- oint ollution in an4 rural area*5 7hu* the /alue-added o1 -.) in/ol/e0ent to underta'e a de0on*tration rogra0 to te*t the u*e o1 a ;)E t4 e 0echani*0 1or agricultural ollution reduction i* through increa*ed in/e*t0ent that can la4 a catal4tic role in the AP2 1or re lication, i0 ro/ed in*titutional coordination, and clear de0on*tration o1 inno/ati/e technologie* that Aould otherAi*e not ha en, or ha en in a /er4 li0ited Aa45
F< INDICATE RIS,S5 INC%"DIN C%I)ATE C&AN E RIS,S5 T&AT )I &T PRE>ENT T&E PROJECT O*JECTI>E#S$ FRO) *EIN AC&IE>ED5 AND IF POSSI*%E INC%"DIN RIS, )EAS"RES T&AT +I%% *E
TA,EN

7he SANP! i* the roduct o1 a length4 anal4tical and o erational roce**, and i* 1ra0ed Aithin a large &an' engage0ent "together, AP2 ,, ,, and ,,, add u to about IS9 15? billion o1 in/e*t0ent*#5 7he ro$ect ha* a *trong ro$ect i0 le0entation organi+ation, Aith *olid technical, anal4tical, *a1eguard*, and 1inancial *'ill*, 0a'ing the o/erall ri*' 3ode*t5 Ne/erthele**, the ro$ect 1ace* the 1olloAing otential ri*'*, *hoAn beloA Aith rele/ant 0itigation 0ea*ure*:
RisH )iti8ation 2oA u ta'e b4 1ar0er* o1 Ligh e0 ha*i* on bene1it* o1 techni>ue* de0on*trated techni>ue* de0on*trated including health and econo0ic bene1it* !e*i*tance to change i1 a ro riate .cono0ic bene1it* o1 inno/ation* to be de0on*trated econo0ic incenti/e* are lac'ing a* art o1 ro$ect Ligh co*t o1 *caling u Pro$ect Aill target 0o*t co*t-e11ecti/e technologie* de0on*tration acti/itie* Cli0ate change "CC# ri*'* "e5g5 %ithin ro$ect li1eti0e, CC i* li'el4 to be negligible reduced rain1all, 1lood, drought, *ea le/el ri*e# O0e-a:: -isH -atin8 H - High, S - Substantial, M - Modest, N - Negligible < DESCRI*E5 IF POSSI*%E5 T&E E'PECTED COST-EFFECTI>ENESS OF T&E PROJECT: RisH -atin8 3 3 3 N )

%hile * eci1ic *tudie* on co*t-e11ecti/ene** ha/e not been carried out, recent technical *tudie* underta'en under the Shanghai AP2 *hoA that, a1ter ShanghaiN* 0an4 large and ,&!; *u orted inter/ention* in recent 4ear* on 0unici al and indu*trial Aa*teAater, currentl4 rural non- oint ollution i* the 0ain ollution *ource o1 the Shanghai Aater en/iron0ent i5e5 rural non- oint ollution i* the ne6t target in order o1 riorit4 and co*t e11icienc45 7he SANP! choo*e* inter/ention* that co0bine /i*ibilit4 Aith inno/ation, co*t e11ecti/ene**, loA labor, reu*e o1 Aa*te, and that ha/e high otential 1or re lication5 ;uring re aration, >uantitati/e e*ti0ate* o1 ollution reduced er unit o1 in/e*t0ent Aill be 0ade 1or each ro$ect co0 onent, becau*e agriculture ollution reduction Aould be e6 ected to be 0ore co*t e11ecti/e than 1urther 0unici al and indu*trial Aa*teAater treat0ent5 7hi* Aill create a ba*i* 1or Shanghai to con*ider 1urther *i0ilar and larger ollution reduction in/e*t0ent* in a 1uture AP2 ,E ro$ect "*ee abo/e#5
7

&< J"STIF! T&E CO)PARATI>E AD>ANTA E OF T&E

EF A ENC!:

7he &an'N* co0 arati/e ad/antage in thi* ro$ect i* through the 0obili+ation o1 local 1und* "a0ounting to about 1i/e ti0e* the -.) grant#, and through direct in/e*t0ent* and integration Aith the ongoing AP2 rogra0 "ongoing AP21 and AP22, AP23 under re artion, and a o**ible 1uture AP2C ro$ect#5 .6i*ting ca acit4 under the AP2 Aill be utili+ed to i0 le0ent SANP!, both on the art o1 the Client "AP2 P3O in Shanghai 3unici alit4# and the &an' "ta*' tea0#5 7he %orld &an' ha* the co0 arati/e ad/antage to 0obili+e the 927 0illion in co1inacing needed 1or the ro$ect to *ucceed5
PART III: APPRO>A%/ENDORSE)ENT *! A ENCIES
A< *<

EF OPERATIONA% FOCA% POINTS AND

EF

EF A ENC! CO)PARATI>E AD>ANTA E "lea/e blan' i1 -.) Agenc4 i* Aithin the co0 arati/e ad/antage 0atri6# N/A RECORD OF ENDORSE)ENT OF EF OPERATIONA% FOCA% POINT #S$ ON *E&A%F OF T&E O>ERN)ENT#S$: "Plea*e attach the endor*e0ent letter"*# Aith thi* te0 late#5 3r Bin'ang %u -.) O erational )ocal Point in China ,nternational ;e art0ent 3ini*tr4 o1 )inance Peo leN* !e ublic o1 China

;ate: Augu*t 16, 2007

C<

EF A ENC!#IES$ CERTIFICATION 7hi* re>ue*t ha* been re ared in accordance Aith -.) olicie* and rocedure* and 0eet* the -.) criteria 1or ro$ect identi1ication and re aration5

3ahe*h Shar0a Pro$ect Contact Per*on Ste/e -or0an %& -.) .6ecuti/e Coordinator, 7he %orld &an' -rou ;ate: October 31, 2007

7el ( .0ail: 1-202-C?@-7339, 0*har0a1TAorldban'5org