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Document ofThe World Bank

FOR OFFICIAL USE ONLY

Report No: RES12285

RESTRUCTURING PAPER

ON A

PROPOSED PROJECT RESTRUCTURING

OF

THE ADAPTATION TO CLIMATE CHANGE IMPACTS ON THE COASTAL WETLANDS IN THE GULF OF MEXICO PROJECT (P100438)

GLOBAL ENVIRONMENT FACILITY TRUST FUND GRANT FROM THE SPECIAL CLIMATE CHANGE FUND (SCCF) (TF 96681)

MAY 11, 2011

TO THE

UNITED MEXICAN STATES

OCTOBER 13, 2015

Mexico and Colombia Country Management Unit Latin America and the Caribbean RegionEnvironment and Natural Resources Global Practice

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

ABBREVIATIONS AND ACRONYMS

ANP Natural Protected Area(Área Natural Protegida)

CONAGUA National Water Commission(Comisión Nacional del Agua)

CONANP National Commission of Protected Areas(Comisión Nacional de Áreas Naturales Protegidas)

GEF Global Environment FacilityGEO Global Environmental ObjectivesGoM Government of Mexico

(Gobierno de México)IMTA Mexican Institute of Water Technology

(Instituto Mexicano de Tecnología del Agua)INECC National Institute of Ecology and Climate Change

(Instituto Nacional de Ecología y Cambio Climático)NAFIN National Development Banking Institution

(Nacional Financiera)PDO Project Development ObjectivesSHCP Minister of Finance and Public Credit

(Secretaría de Hacienda y Crédito Público)SSCF Special Climate Change FundUNAM National Autonomous Mexican University

(Universidad Nacional Autónoma de México)

Regional Vice President: Jorge Familiar Country Director: Gerardo M. CorrochanoSenior Global Practice Director:Practice Manager:

Paula Caballero Raúl Ivan Alfaro Pelico

Task Team Leader: Renán A. Poveda

DATA SHEETMexico

Adaptation to Climate Change Impacts on the Coastal Wetlands in the Gulf of Mexico (P100438)LATIN AMERICA AND CARIBBEAN

Environment and Natural Resources.

Report No: RES12285.

Basic Information

Project ID: P100438 Lending Instrument: Specific Investment Loan

Regional Vice President: Jorge Familiar Original EA Category: Partial Assessment (B)Country Director: Gerardo M. Corrochano Current EA Category: Partial Assessment (B)

Senior Global Practice Director: Paula Caballero Original Approval Date: 23-Nov-2010

Practice Manager/Manager: Raul Ivan Alfaro Pelico Current Closing Date: 31-Oct-2015

Team Leader(s): Renan A. Poveda.

Borrower: United Mexican States

Responsible Agency: Ecology and Climate Change National Institute - INECC

.

Restructuring Type

Form Type: Short Form Decision Authority: Country Director Approval

Restructuring Level:

Level 2

.

Financing ( as of 1-Oct-2015 )

Key Dates

Project Ln/Cr/TF Status Approval Date Signing Date Effectiveness

DateOriginal Closing Date

Revised Closing Date

P100438 TF-96681 Effective 10-May-2011 11-May-2011 07-Oct-2011 31-Oct-2015 31-Oct-2016

Disbursements (in Millions)

Project Ln/Cr/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed

P100438 TF-96681 Effective USD 4.50 4.50 0.00 2.40 2.10 53.

Policy Waivers

Does the project depart from the CAS/CPF in content or in other significant respects? Yes [ ] No [ X ]

Does the project require any policy waiver(s)? Yes [ ] No [ X ].

A. Summary of Proposed ChangesThis Restructuring Paper reflects the Government of Mexico (GoM) proposed changes to the Adaptation to Climate Change Impacts on the Coastal Wetlands in the Gulf of Mexico Project (TF 96681, P100438), financed through a Global Environmental Facility (GEF) grant. GoM’s request seeks to reflect the following key modifications: (i) withdraw all activities and implementation arrangements associated to the pilot site in Tamaulipas; (ii) reallocate grant proceeds in order to make use of the released funds from the Tamaulipas pilot and enable remaining Project activities to be finalized; (iii) adjust the Project counterpart from INE to INECC and modify the implementation arrangements accordingly; (iv) modify the definition of operational cost and add training and workshops as an eligible expenditure in order to broaden eligible expenses under this grant; (v) modify the definition of the proposed activities related to the pilot sites in Laguna de Alvarado (Veracruz), and in the Sistema Lagunar Carmen-Pajonal-Machona (Tabasco); (vi) adjust Project indicators in order to better reflect and measure the achievement of the Project’s Development Objective (PDO) and Intermediate Results; and (vii) extend the closing date of the Project for one additional year (October 31, 2016), in order to undertake key pending activities and attain the Project’s Development Objectives (PDO) and the Global Environmental Objective (GEO). No changes will be made to the PDO or safeguards arrangements..

B. Project StatusThe Project was approved by the World Bank Board on November 23, 2010 and became effective on October 7, 2011. The closing date is October 31, 2015. The $4.5 million grant has disbursed 53.3 percent of its total amount, from a 15.3 percent in December 2014. The recent improvements in implementation and disbursements have led to a Moderately Satisfactory upgrade of the “Progress towards achievement of PDO” and “Overall Implementation Progress”.

Cumulative delays have been a result of several factors including: (i) the sequencing structure of Project design which required that complex key studies be developed for the design of pilot activities (reforestation, infrastructure works, land management plans, etc.) prior to the implementation of specific investments; (ii) complex institutional arrangements agreed during negotiations which involve a number of agencies with multiple responsibilities in the technical, administrative and decision making process (including INECC, IMTA, NAFIN, CONANP, CONAGUA, and SHCP); (iii) changes within INECC’s team composition which led to new institutional priorities and a revision of the work done so far and to a new focus in terms of the studies and investments done; (iv) the cumbersome and long procurement processes; and (v) weak teams at INECC and IMTA.

Most of the issues raised above, however, have been addressed through the following actions, which have resulted in the recent notable progress in Project implementation: (i) a more agile and functioning implementation system between INECC, IMTA and NAFIN (which have led to key agreements on how to reduce the cumbersome lengthy process for issuing contracts from 9 to 6 months); (ii) periodic meetings among the key agencies and the Bank in order to identify bottlenecks, mitigation measures and monitor progress in implementation; (iii) adoption of a scheme of small scale adaptation measures which do not require as a precondition the conclusions of complex key studies; and (iv) increased technical and administrative capacity within the teams of both INECC and IMTA.

Progress in Project implementation has also been a result of a notable involvement and commitment from all key government agencies, including from the Secretary of Finance (SHCP). Key staff has been appointed and regular staff from INECC have been increasingly involved in the supervision and implementation of the Project. INECC, NAFIN and SHCP have stated that this Project is a top priority for the country, and that it is currently the only operation addressing adaptation efforts to the effects of climate change. Counterpart funding in terms ($1.8 million from Japanese and US sources) allocated for technical assistance, have been delivered.

Among the activities financed so far by the Project are: (i) Hydraulic models of data with climate variables and scenarios for the pilot watersheds; (ii) Reports on lost temporal and spatial data in the pilot watersheds; (iii) Geo-referencing of the climate station network in the pilot watersheds; (iv) Acquisition of mareographs (tide-gages to be installed by UNAM); (v) development of management plans for wild life conservation units (incorporating adaptation measures); (vi) design of small scale adaptation measures for Veracruz and Tabasco; (vii) delivery of technical workshops; (viii) development of Ecological Land Zone Planning for the pilots in Veracruz and Tabasco, and (ix) repopulation of Sian Ka’an’s coastal reefs.

.

C. Proposed Changes.

Financing

Change in Loan Closing Date(s):

Explanation

Beyond the administrative delays encountered in processing contracts and the acquisition of goods, the implementation of key activities (namely subprojects) has had encountered delays in implementation due to atypical weather events in pilot sites. Based on the above, GoM has requested that the closing date of the Project be extended for an additional twelve months until October 31, 2016. This is the first extension requested for this Project and would allow the completion of eleven activities currently under implementation which are at risk of not been able to finalize key outputs by Project closing, and processing seven new strategic contracts (many that are under review by SHCP) which under the current schedule will not able to be launched. Both the Bank and GoM agree that not completing these activities would put in jeopardy the achievement of the PDO, the GEO and would hinder the ability to replicate key lessons and activities of the Project.

In addition, granting an extension to the closing date would enable the development of the following activities: (i) the systematization and dissemination of the material related to results, lessons learned and findings developed through the Project (including disseminating the Project’s achievements to the 3 levels of government strengthening the sustainability and replicability of the adaptation measures; (ii) assessing and monitoring the evolution of the adaptation measures that have been concluded (or are close to concluding) enhancing the knowledge base at INECC, IMTA and participating entities; (iii) delivering training and workshops in participating communities to foster the ownership and maintenance of their adaptation measures to promote its sustainability, but also in selected sites to encourage the expansion and replicability of adaptation measures; (iv) development and implementation of a communications strategy to broadly present the outcomes of the Project; and (v) undertake a review process of the key adaptation studies and develop a strategy for its eventual implementation.

A work plan has been prepared and agreed among all counterparts for the implementation of the proposed changes through the period remaining in the Project, and until October 2016, assuming the extension to the closing date is granted. The work plan, has been reviewed and found to be acceptable by the Bank. The

work plan and disbursement projections focus on the fulfillment of key contracts by agreed dates and is already is on track since 82 percent of key contracts of the Project are either completed or under implementation. An assessment of the fulfillment of the revised Project indicators has been undertaken.

Ln/Cr/TF Status Original Closing Date

Current Closing Date

Proposed Closing Date

Previous Closing Date(s)

TF-96681 Effective 31-Oct-2015 31-Oct-2015 31-Oct-2016

Reallocations

Explanation

The proposed reallocation of grant proceeds reflects the withdrawal of the Tamaulipas pilot site, the liberation of the respective budget, and a redistribution of resources among tasks according to Project demands (namely to finance activities under component 2).

Ln/Cr/TF Currency Current Category of Expenditure Allocation Disbursement % (Type

Total)

Current Proposed Current Proposed

TF-96681 USD GO,CW,CS,Non-CS,OP under Pt.1 744,400.00 673,600.00 100.00 100.00

GO,CW,CS,Non-CS,OP under Pt.2(a) 900,000.00 0.00 100.00 100.00

GO,CW,CS,Non-CS,OP under Pt.2(b) 730,000.00 1,130,000.00 100.00 100.00

GO,CW,CS,Non-CS,OP under Pt.2(c) 785,000.00 1,236,000.00 100.00 100.00

GO,CW,CS,Non-CS,OP under Pt.2(d) 541,200.00 711,000.00 100.00 100.00

GO,CW,CS,Non-CS,OP under Pt.3 500,000.00 500,000.00 100.00 100.00

GO,CW,CS,Non-CS,OP under Pt.4 299,400.00 249,400.00 100.00 100.00

Designated Account 0.00 0.00 0.00 0.00

Total: 4,500,000.00 4,500,000.00

ADAPTATION TO CLIMATE CHANGE IMPACTS ON THE COASTAL WETLANDS IN THE GULF OF MEXICO PROJECT

CONTENTS

PageDATA SHEET A. SUMMARYB. PROJECT BACKGROUND ................................................................................................8C. PROJECT STATUSD. PROPOSED MODIFICATIONSANNEX 1: REALLOCATION OF GRANT PROCEEDSANNEX 2: MONITORING ADJUSTMENT TO PROJECT INDICATORSANNEX 3: ANNEX 4: ANNEX 5: ANNEX 6: FULFILLMENT OF REVISED PROJECT INDICATORS

ADAPTATION TO CLIMATE CHANGE IMPACTS ON THE COASTAL WETLANDS IN THE GULF OF MEXICO PROJECT

RESTRUCTURING PAPER

A. SUMMARY

1. This Restructuring Paper reflects the Government of Mexico (GoM) proposed changes to the Adaptation to Climate Change Impacts on the Coastal Wetlands in the Gulf of Mexico Project (TF96681, P100438), financed through a Global Environmental Facility (GEF) grant. GoM’s request seeks to reflect the following key modifications: (i) withdraw activities and implementation arrangements associated to the pilot site in Tamaulipas; (ii) reallocate grant proceeds in order to make use of the released funds from the Tamaulipas pilot and enable remaining Project activities to be finalized; (iii) adjust the project counterpart from INE to INECC and modify the implementation arrangements accordingly; (iv) modify the definition of operational costs and add training and workshops as an eligible expenditure in order to broaden eligible expenses under this grant; (v) modify the definition of the proposed activities related to the pilot sites in Laguna de Alvarado (Veracruz), and in the Sistema Lagunar Carmen-Pajonal-Machona (Tabasco); (vi) adjust Project indicators in order to better reflect and measure the achievement of the Project’s Development Objective (PDO) and Intermediate Results; and (vii) extend the closing date of the Project for one additional year to October 31, 2016, in order to undertake key pending activities, and achieve the Project’s Development Objectives (PDO) and the Global Environmental Objective (GEO). No changes will be made to the PDO or safeguards arrangements.

2. Project performance has greatly improved in recent months after it has suffered a slow rate in implementation and disbursements in the past years. This improvement is namely due to the recent adoption of small scale adaptation measures to be implemented in the pilot sites, which do not require the conclusion of the key studies (which suffered delays in the contracting process), but which have facilitated overall disbursements. As of today, the US$4.5 million grant has disbursed 53 percent of its total amount. Furthermore, there has been a commitment from the key government agencies to move forward Project implementation, in spite of institutional challenges dating from Project design. The proposed restructuring is therefore not only justified, but necessary to contribute to the achievement of the Project’s development objective and to provide the necessary base to enable a realistic evaluation of the expected achievements and outcomes of this Project.

B. PROJECT BACKGROUND

3. The objective of the Project is to promote adaptation to the consequences of climate impacts in the coastal wetlands of the Gulf of Mexico, through the implementation of pilot measures that would provide information on the costs and benefits of alternative approaches to reduce their vulnerability. The Project also seeks to assess the overall impacts of climate change on national water resource planning, including the identification of potential response options, with a focus on coastal wetlands and associated watersheds. The experience from the Project pilots is intended to inform the government's future adaptation strategy and development programs in the Gulf region.

4. The Project is implemented under four components: (1) Design of Selected Adaptation Measures and Technical Coordination of the Project; (2) Implementation of Pilot Adaptation Measures in Highly Vulnerable Wetlands; (3) Assessment of the Impacts of Climate Change on Water Resources Planning at a National Level and in Coastal Wetlands including the Identification of Potential Response Options, and (4) Project Management. Under component (2) there are four sub-components, associated to each of the selected pilot sites: Sub-component 2.1: Wetlands Panuco-Altamira (Tamaulipas); Sub-component 2.2: Wetlands of the Papaloapan Rivershed, Alvarado Lagoon (Veracruz); Sub-component 2.3: Wetlands of Carmen-Pajonal-Machona (Tabasco); and Sub-component 2.4: Sian Ka’an, Biosphere Reserve in Punta Allen (Quintana Roo).

5. The institutional arrangements for this Project consist in a close collaboration among three agencies, with involvement of several partner agencies. The Ecology and Climate Change National Institute (INECC) is responsible for the technical coordination of the Project and for the implementation of components 1 and 2 (the Protected Areas National Commission– CONANP co-implements sub-component 2.4). The Water Technology National Institute (IMTA) is responsible for the administrative and financial controls of the Project, and for the implementation of components 3 and 4 (component 3 is implemented in collaboration with the National Water Commission -CONAGUA, and component 4 is co-implemented with INECC). Monitoring and evaluation of Project outcomes/results (both intermediate and end-of-Project) are coordinated by both, IMTA and INECC with the support of Nacional Financiera (NAFIN) while financial and procurement management is led by IMTA. Financial information on inputs, outputs, budgeting, treasury, accounting, and audits are monitored by IMTA and NAFIN.

C. PROJECT STATUS

6. The Project was approved by the Board on November 23, 2010 and became effective on October 7, 2011. The closing date is October 31, 2015. The $4.5 million grant so far has disbursed 53.3 percent of its total amount, from a 15.3 percent in December 2014 and committed amount is over 82 percent. The recent improvements in implementation and disbursements have led to a Moderately Satisfactory upgrade of the “Progress towards achievement of PDO” and “Overall Implementation Progress”.

7. Cumulative delays have been a result of several factors including: (i) the sequencing structure of Project design which required that complex key studies be developed for the design for pilot activities (reforestation, infrastructure works, land management plans, etc.) prior to the implementation of specific investments; (ii) complex institutional arrangements which involves a number of agencies with multiple responsibilities in the technical, administrative and decision making process (including INECC, IMTA, NAFIN, CONANP, CONAGUA, and SHCP); (iii) changes within INECC’s team which led to a change of institutional priorities and to a revision of the work done so far and to a new focus in terms of the studies and investments done; (iv) the cumbersome and long procurement processes; and (v) weak teams at INECC and IMTA.

8. Most of the issues raised above, however, have been addressed through the following actions, which have resulted in the recent notable progress in Project implementation: (i) a more agile and functioning implementation system between INECC, IMTA and NAFIN (which have led to key agreements on how to reduce the cumbersome lengthy process for issuing contracts from 9 to 6

months); (ii) periodic meetings among the key agencies and the Bank in order to identify bottlenecks, mitigation measures and monitor progress in implementation; (iii) adoption of a scheme of small scale adaptation measures which do not require as a precondition the conclusions of complex key studies; and (iv) increased technical and administrative capacity within the teams of both INECC and IMTA. In addition, the Bank and GoM agreed to accelerate disbursements through the identification and implementation of small scale adaptation measures/investments (with currently existing information at INECC and at the states) without the benefit of fully fledged adaptation studies. It was also agreed that the conclusions and recommendations of the design studies (which are under implementation) could eventually be implemented by INECC with its own resources beyond the closing date of the Project.

9. Progress in Project implementation has also been a result of a notable involvement and commitment from all key government agencies, including from the Secretary of Finance (SHCP). Key staff has been appointed and regular staff from INECC have been increasingly involved in the supervision and implementation of the Project. INECC, NAFIN and SHCP have stated that this Project is a top priority for the country, in that it is currently the only operation addressing adaptation efforts to the effects of climate change. Counterpart funding in terms (US$1.8mln from Japanese and US sources) allocated for technical assistance have been delivered.

10. Among the activities financed so far by the Project are: (i) Hydraulic models of data with climate variables and scenarios for the pilot watersheds; (ii) Reports on lost temporal and spatial data in the pilot watersheds; (iii) Geo-referencing of the climate station network in the pilot watersheds; (iv) Acquisition of mareographs (tide-gages to be installed by the Mexico’s National Autonomous University - UNAM); (v) development of management plans for wild life conservation units (incorporating adaptation measures); (vi) design of small scale adaptation measures for Veracruz and Tabasco; (vii) delivery of technical workshops; (viii) development of Ecological Land Zone Planning for the pilots in Veracruz and Tabasco, and (ix) repopulation of Sian Ka’an’s coastal reefs.

Table 1: Financing Status (as per September 11, 2015 from Portal)

Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed

TF-96681 Effective USD 4,500,000 4,500,000 0.00 2,397,402 2,102,598 53.28

D. PROPOSED MODIFICATIONS

11. The following changes to the grant agreement are proposed by GoM:

(i) Withdrawal of the Tamaulipas Pilot. The pilot investment in Tamaulipas has been withdrawn upon request from the state government based on the ongoing insecurity in the State. Therefore, the related studies and investments within this pilot will be discontinued and the related

implementation arrangements will be removed from the grant agreement (IMTA will continue, however, its hydrological analysis in the Tamaulipas wetland).

(ii) Reallocation of Grant Proceeds. The reallocation of grant proceeds reflects the withdrawal of the Tamaulipas pilot site, the release of the respective budget, and a redistribution of resources among tasks according to Project demands (namely for component 2). More specifically, the reallocation of grant proceeds among categories will assure the successful implementation of the remaining activities. The detailed reallocation proposal is attached (Annex I).

(iii) Adjustment from INE to INECC. During 2012 the General Climate Change Law was passed congress and included additional institutional and technical attributions, including administrative and legal autonomy, to the National Institute for Ecology (INE), which from this date, became the National Institute for Ecology and Climate Change (INECC). This institutional change, and the continuation of legal responsibilities of INECC to the Project need to be reflected through the current amendment to the grant agreement.

(iv)Modification of the definition of operation costs. Upon request from GoM, the definition of operational costs under the grant agreement would include the word “inter-alia” and the inclusion of training and workshops as eligible expenditure is included in order to reflect a broader range of eligible expenses.

(v) Adjustment to Project Indicators. After a thorough evaluation between the Bank and GoM, it was agreed that while a number of the original indicators were either expected to be met or had already been met, others needed to be adjusted or eliminated in order to allow for an adequate evaluation of the Project´s activities and outcomes during the life of this grant. It was noted that many of the indicators were neither realistic nor did they provide the elements to undertake an accurate evaluation of the Project’s outcomes. The basis for the proposed changes in Project indicators are described in Annex 2. Annex 3 reflects the updated Results Framework and Monitoring. These changes would be reflected in the Project’s Operational Manual.

(vi)Adjustments to the definitions of the proposed activities for the Pilots in Laguna de Alvarado (Veracruz), and in Cardenas (Tabasco). During Project design, a number of activities were foreseen which, after a thorough assessment by GoM and the Bank, became no longer relevant. The proposed modifications for subcomponents 2.2 and 2.3 focus on the following:

(a) Change in the Operational Manual the focus and definition of the pilot in Alvarado to reflect the elaboration of Ecological Territorial Zoning (instead of Protected Area Management Plans) since there are no protected areas in the pilot area, but which requires to include a conservation and management strategy;

(b) elimination of proposed works (e.g. sand barriers) in Cardenas which are known to have adverse collateral impacts, and replacing them with adaptation and conservation measures in the pilot through equipment, reforestation of mangroves and riparian forests, introduction of eco-technologies such as stilt housing and rainwater harvesting systems, among other activities; and

(c) elimination of the term ‘buffer zone’ associated to the pilot in Veracruz, since there are no protected areas (nor the foreseen creation of protected areas) in the proposed pilot site.

(vii) Extension of the closing date of the Project. Beyond the administrative delays encountered in processing contracts and the acquisition of goods that have been stated above, the implementation of key activities (namely subprojects) have encountered delays in implementation due to atypical weather events in pilot sites. Based on the above, GoM has requested an additional twelve month extension of the closing date to October 31, 2016. This extension would allow the completion of twelve activities currently under implementation which are at risk of not being able to finalize key outputs by the Project closing date, and processing seven new strategic contracts (many that are under review by SHCP) which will not able to be launched without an extension. Both the Bank and GoM agree that not completing these activities would put in jeopardy the achievement of the PDO, the GEO and would hinder the ability to replicate key lessons and activities of the Project.

In addition, granting an extension to the closing date would enable the development of the following activities: (i) the systematization and dissemination of the material related to results, lessons learned and findings developed through the Project (including disseminating the Project’s achievements to the 3 levels of government strengthening the sustainability and replicability of the adaptation measures; (ii) assessing and monitoring the evolution of the adaptation measures that have been concluded (or are close to concluding) enhancing the knowledge base at INECC, IMTA and participating entities; (iii) delivering training and workshops in participating communities to foster the ownership and maintenance of their adaptation measures to promote its sustainability, but also in selected sites to encourage the expansion and replicability of adaptation measures; (iv) development and implementation of a communications strategy to broadly present the outcomes of the Project; and (v) undertake a review process of the key adaptation studies and develop a strategy for its eventual implementation.

12. A work plan has been prepared and agreed among all counterparts for the implementation of the proposed changes through the period remaining in the Project, and until October 2016. The work plan, has been reviewed and found to be acceptable by the Bank. The work plan (attached as Annex 4) and disbursement projections (Annex 5) focuses on the fulfillment of key contracts by agreed dates and is already is on track since 82 percent of key contracts of the Project are either completed or under implementation. Without an extension, it is estimated that Project disbursements would only reach 72.4 percent of total grant amount. An assessment of the fulfilment of the revised Project indicators has been undertaken and is reflected in Annex 6.

Annex 1

Reallocation of Grant Proceeds

Disbursement Category

Actual Amount of the Grant

Allocated(expressed in

USD)

Proposed Adjustment

Variation per category+ and -

(1) Goods, works, consultants’ services, non consultant services, Training and Workshops and Operational Costs under Part 1 of the Project

744,400 673,600 -(70,800)

2 (a) Goods, works, consultants’ services, non consultant services and Operational Costs under Part 2(a) of the Project

900,000 0 -(900,000)

2 (b) Goods, works, consultants’ services, non consultant services, Training and Workshops and Operational Costs under Part 2(b) of the Project

730,000 1,130,000 +(400,000)

2 (c) Goods, works, consultants’ services, non consultant services, Training and Workshops and Operational Costs under Part 2(c) of the Project

785,000 1,236,000 +(451,000)

2 (d) Goods, works, consultants’ services, non consultant services, Training and Workshops and Operational Costs under Part 2(d) of the Project

541,200 711,000 +(169,800)

(3) Goods, works, consultants’ services, non consultant services and Operational Costs under Part 3 of the Project

500,000 500,000 No change

(4) Goods, works, consultants’ services (including external audits), non consultant services and Operational Costs under Part 4 of the Project

299,400 249,400 -(50,000)

TOTAL AMOUNT 4,500,000 4,500,000 -

Annex 2Adjustment to Project Indicators

PDO Outcome Indicators Proposed Outcome Indicators Nature of proposed revision(a) Design documents for pilot adaptation measures that facilitate prompt implementation and include sustainability strategy as well as monitoring provisions.

(b) Three wetland management plans, a revised protected area management plan, and land zoning regulations, incorporating climate change adaptation activities, discussed with stakeholders, and at least one plan submitted for approval to decision making authorities and supported by local and state institutions.

(c) A target of 15,000 ha presented to Municipal Councils for consideration to be entered into conservation status in local land use plans; a target of 5,000 ha reforested with native species that would add to climate-resilience of coastal wetlands; a target of 3,000 meters of coastal bars stabilized addressing threat of sea level rise; and increased thermal resilience of coral populations in the Biosphere Reserve Sian Ka’an through repopulating genetically diverse temperature resistant coral genotypes in six areas of 25 m x 25 m (3,750 m2) in selected locations.

(d) Production and dissemination of practical guidance document on cost and benefits of adaptation measures in coastal wetlands as a basis for replication efforts.

(e) Climate change impact scenarios developed for selected basins and for coastal wetlands supporting knowledge base required to mainstream CC into water resources

(a) Design documents for pilot adaptation measures that facilitate prompt implementation and include sustainability strategy as well as monitoring provisions developed.

(b) Two land use plans and a revised protected area management program, incorporating climate change adaptation activities, discussed with stakeholders, and at least one land use planning program submitted for approval to decision making authorities and supported by local and state institutions (depending on the aptitude of the territory in each pilot site, the land use planning will incorporate conservation elements).

(c) More than 50 ha of mangrove ecosystem and riparian zones reforested, more than 70 ha of water fluxes rehabilitated in Veracruz and Tabasco, and at least six areas in the Sian Ka’an Biosphere Reserve with repopulated temperature-resistant coral genotypes.

(d) Unchanged but moved to intermediate indicators.

(e) Unchanged.

(b) The two wetland management plans were substituted by two land use plans, given that there are no Natural Protected Areas (ANP) in Veracruz or Tabasco to be responsible of boosting a conservation and management plan for wetlands.

(c) The amount of 15,000 ha to be considered for conservation status, was eliminated because the Government of Mexico, through CONANP, has not planned to establish ANP in Veracruz or Tabasco. Conservation areas would be defined by the land use plans, which include considerations of adaptation to climate change. The objective of 5,000 ha to be reforested, was modified because this surface had been overestimated in the initial project, and it was observed that in some pilot sites it was not viable to reforest this amount of hectares due to the characteristics of the soils and its environmental conditions.

The construction of 3,000 m of coastal barriers was eliminated because the project has rethought the objective focusing on “adaptation based on ecosystems”, which promotes the conservation of biodiversity and ecosystem services

and wetland management and planning.

as a strategy of adaptation to climate change for human communities. This approach includes the adoption of adaptation measures that are reversible, because the impacts of climate change are uncertain. Due to the uncertainty of the magnitude of the effects of climate change and of the sea level rise, building coastal barriers results in an unviable and ineffective measure.

There are multiple adaptation actions that can be done but, since financial resources are not enough conduct them all, it was necessary to prioritize and implement actions that allow populations to adapt more immediately.

Therefore, it was decided to develop actions that contribute to the adaptation of populations to floods, lack of clean water, food security issues, and mangrove conservation, as in the case of the Management Units for Wildlife Conservation (UMA) for the sustainable use of mangroves, in addition to equipment and infrastructure, accompanied by local training to reduce vulnerability to climate change of populations by strengthening its adaptive capacity.

CONANP specified that the reserve does not have the stated surface of 3750 m2 of coral reefs, thus, this amount of coral to be replanted was removed and it will be determined in the design and implementation proposal currently in development by Oceanus, A.C.

The activities programmed for Tampico have been eliminated.

(d) The indicator serves better to measure intermediate outcomes.

Intermediate Outcomes Intermediate Outcome Indicators

Comments

Component 1: Design of Selected Adaptation Measures and Technical Coordination of the Project

• At least 3 pilot adaptation measures count with sound technical design documents

The contemplated activities are: (i) to design adaptation measures for Tabasco and Veracruz, (ii) to replant

• Experience gained in incorporating climate change in plans and a program, and designing interventions to increase resilience.

• Wetland monitoring capabilities strengthened as input to improved management of sensitive and vulnerable ecosystems.

• Facilitate the development of long-term management and monitoring of selected ecosystems.

including analysis of financial, economic, social and environmental aspects and are ready for implementation.

• Modeling, generation of data, analysis, and access to information and long-term remote sensing.

• Pilot adaptation measures will include a sustainability strategy.

• Two management plans for Wildlife Conservation, Management, and Sustainable Utilization Units (UMA) in mangrove ecosystems developed.

• Infrastructure and equipment to reduce vulnerability to CC applied in pilot sites.

• Strengthening capacities for adaptation to CC in at least three municipalities.

corals resistant to high temperatures and rehabilitate water flow in Sian Ka’an, (iii) to reforest mangrove and dredge canals in Tabasco and Veracruz, and (iv) to enable ecotecnias for Tabasco.

The use of ALOS images was eliminated as these are no longer in operation. Currently, the Government of Mexico has SPOT images.

The technical reports will be included as sustainability strategies in each of the adaptation measures.

Component 2: Implementation of Pilot Adaptation Measures in Highly Vulnerable Wetlands • Increased knowledge of estimated

cost and benefits of adaptation in coastal wetlands in Mexico.

• Increased ability to mainstream climate change considerations in land use planning.

• Increased competence to incorporate wetlands protection in municipal land use planning.

Papaloapan:

• Alvarado Municipality under land use planning incorporating CC impacts as well as adaptation and conservation measures.

• Reforestation of mangrove ecosystem and riparian zones for a target of at least 30 ha.

• Infrastructure and equipment (cleaning, desilting and rehabilitation of at least 3 km of water fluxes; and one tide gauge and meteorological instruments) to reduce vulnerability to CC.

• One management plan for Wildlife Conservation, Management, and Sustainable Utilization Units (UMA) in mangrove ecosystems.

• Strengthening capacities for adaptation to CC in at least one location.

Tabasco:

The term buffer zone was removed, as these areas are defined for the creation of an ANP, and the establishment of these has not been considered for the mentioned pilot sites.

• Land use planning updated incorporating CC impacts as well as adaptation and conservation measures.

• Reforestation of mangrove ecosystem and riparian zones for a target of at least 20 ha.

• Infrastructure and equipment (cleaning, desilting and rehabilitation of at least 3 km of water fluxes; one tide gauge and meteorological instruments; and at least two stilt houses and one rainwater harvesting) to reduce vulnerability to CC.

• One management plan for Wildlife Conservation, Management, and Sustainable Utilization Units (UMA) in mangrove ecosystems.

• Strengthening capacities for adaptation to CC in at least one location.

Sian Ka’an:

• Protected area monitoring system strengthened including climate change parameters.

• Protected area management program revised to include climate change considerations.

• A target of repopulating genetically diverse temperature-resistant coral genotypes in six areas.

• Infrastructure and equipment (one tide gauge and meteorological and oceanographic instruments) to reduce vulnerability to CC.

• Rehabilitation of water fluxes of El Playón mangrove ecosystem for a target of at least 70 ha.

Component 3: Assessment of the Impacts of Climate Change on Water Resources Planning at a National Level and in Coastal Wetlands including the Identification of Potential Response

• Climate change impact scenarios developed for national water resources and for coastal wetlands including identification of response options.

Options • Support the strengthening of the

knowledge base required to mainstream climate change in water resources management and planning.

Component 4: Project Management • Coordination of the administrative,

financial management, procurement, and safeguard aspects of the Project.

• Established processes for articulation and coordination among the agencies involved. Time reduction of drafting contracts and administrative processes.

Annex 3Updated Results Framework and Monitoring

*(Given delays in implementation the first years are left blank for some of the indicators)

Target Values Data Collection and Reporting

Project Outcome Indicators

Baseline YR1 YR2 YR3 YR4 YR5 YR6Frequency and

Reports

Data Collection

Instruments

Responsible for Data

CollectionDesign documents for pilot adaptation measures that facilitate prompt implementation and include sustainability strategy as well as monitoring provisions

No adaptation measures in selected coastal wetlands

* * *

Three design documents under preparation

Three design documents with specific measures under preparation

Three design documents completed.

Annual supervision reports

Annual review, supervision visits, photographic records, satellite images, land cover and land use data, GIS

INECC with local coordinators

Two Land Use Planning Programs (LUPP) and a revised protected area management program, incorporating climate change adaptation activities, discussed with stakeholders, and at least

Limited availability of Wetlands Management Plans (exception Sian Ka’an); existing ones do not consider CC information or expected impacts

* * * The Sian Ka’an protected area management program revised to include climate change considerations

LUPP of Alvarado Lagoon under

LUPP of Alvarado Lagoon submitted for approval to deciding authorities

At least two LUPPs of approved by deciding authorities

Annual reports

Annual review, photographic records, satellite images, land cover and land use data, GIS





Reports

Data Collection

Instruments


Collectionone LUPP submitted for approval to decision making authorities and supported by local and state institutions (depending on the aptitude of the territory in each pilot site, the LUPP will incorporate conservation elements)

implementation

LUPP of Tabasco revamped

Two management plans for Wildlife Conservation, Management, and Sustainable Utilization Units (UMA) in mangrove ecosystems

There is no sustainable use of mangrove

* * * *At least 2 UMA’s established

At least 2 UMA’s established in mangrove ecosystems

Annual report



Strengthening capacities at a local level

Communication and training for local actors on adaptation

Limited information about CC

* * *Pre-scanning workshops concluded

Three workshops concluded

Follow-up workshops

Capacities at a local level strengthened and communication strategy and training/workshops for local

Annual report

Supervision visits, and photographic records





Reports

Data Collection

Instruments


Collection

to CCactors on adaptation to CC delivered.

Actions initiated for reforestation of mangrove ecosystem and riparian habitat for a target of at least 50 ha, reforested with native species that would add to climate-resilience of coastal wetlands

No adaptation measures in pilot sites

Local initiatives with limited effectiveness

* * * *

Reforestation of at least 50 ha initiated

Completion of at least 50 ha of reforestation of mangrove ecosystems and riparian habitats.

Annual report, reforestation plan

Annual review, photographic records,satellite images, land cover and land use data, GIS


Increased thermal resilience of coral populations in the Biosphere Reserve Sian Ka’an through repopulating genetically diverse temperature-resistant coral genotypes in at least six areas

No adaptation measures in pilot sites

Coral bleaching in the Biosphere Reserve Sian Ka’an

* * *

Repopulation program designed and selection of adequate species and nurseries developed

Start with the establishment of genetically diverse temperature-resistant coral patches

At least six areas of the Sian Ka’an Biosphere Reserve have been repopulated with genetically diverse temperature-resistant coral.

Bi-annual and annual reports, repopulation plan

Bi-annual and annual review, photographic records,satellite images, supervision visits, GIS


Infrastructure and equipment (cleaning, desilting and

Limited infrastructure and equipment

* * * *

Start with the infrastructure and

At least 70 ha of water fluxes rehabilitated

Annual report

Annual review, photographic records, supervision visits,





Reports

Data Collection

Instruments


Collectionrehabilitation of water fluxes; tide gauges and meteorological instruments; and stilt houses) to reduce vulnerability to CC

equipment implementation

through infrastructure and equipment.

satellite images

Production and dissemination of practical guidance document on cost and benefits of adaptation measures in coastal wetlands as a basis for replication efforts

Limited information * * *

Data collection initiated

Cost and benefits of adaptation approaches in wetlands and are compiled in a guidance document

Document is being disseminated and serves as basis for replication efforts

Completion and dissemination of guideline

Draft and final Guidance document

Final document INECC

Climate change impact scenarios developed for selected basins and for coastal wetlands

No response options defined yet on cc impacts in national water resources management

Scenarios of CC impacts on national water resources

Response options identified 4° report IPCC

Response options identified 4° report IPCC

Response options identified 5° report IPCC Supporting studies at one emblematic

At least one national water resources management response option

Climate change impact scenarios developed for selected basins and for costal

Annual report, minutes of meetings with IMTA/CON-AGUA

List of viable policy options

IMTA/CON-AGUA




Reports

Data Collection

Instruments


Collectionsupporting knowledge base required to mainstream CC into water resources and wetland management and planning

developed

basin concluded

identified that considers CC impact scenarios

wetlands. Supporting knowledge base to mainstream CC into water resources and wetland management planning developed

Intermediate Outcome Indicators

Component 1: Design of Selected Adaptation Measures and Technical Coordination of the Project




Reports

Data Collection

Instruments


CollectionAt least three pilot adaptation measures count with sound technical design documents including analysis of financial, economic, social and environmental aspects and are ready for implementation

Pilot sites do not consider adaptation yet

* * *Three measures under design

At least three measures under execution

At least three pilot adaptation measures implemented

Annual report, design progress reports, costs and benefits

Final designINECC with local coordinators

Modeling, generation of data, analysis, and access to information and long-term remote sensing

Limited monitoring of pilot wetlands, limited monitoring of CC data in pilot site areas

* * *

Satellite images acquisition and capacity to store and assess data and images

Modeling, generation of data, analysis, and access to information and long-term remote sensing

Finalization of the modeling, generation of data, analysis, and access to information and long-term remote sensing

Wetland monitoring programs

Satellite images, other monitoring data

INECC

Designs on pilot adaptation measures will include a sustainability strategy.

No adaptation pilots

* * * Three measures under desing.

Sustainability strategy updated based on Project results seeking continuatio

Designs on pilot adaptation measures completed

Sustainability incorporated

Preparation and supervision reports

INECC




Reports

Data Collection

Instruments


Collectionn of results

Component 2: Implementation of Pilot Adaptation Measures in Highly Vulnerable WetlandsSite 2 Papaloapan:Alvarado Lagoon under Land Use Planning Program (LUPP) incorporating CC impacts as well as adaptation and conservation measures

Conservation management plans do not take CC impacts into consideration and unsustainable land use practices in the buffer zone prevail

* * * *

LUPP of Alvarado Lagoon submitted for approval to deciding authorities

LUPP of Alvarado Lagoon approved



INECC with local coordinator

Site 2 Papaloapan:Actions initiated for reforestation of mangrove ecosystem and riparian zones for a target of at least 30 ha.

No buffer zone around the Lagoon

* * * *


Reforestation of at least 30 ha completed

Annual report



Site 2 Papaloapan:Infrastructure and equipment (cleaning, desilting and rehabilitation of at least 3 km of water fluxes; and one tide


* * **

Infrastructure and equipment implementation initiated

At least 3 kms of water fluxes rehabilitated through Infrastructure and equipment completed.

Annual report

Annual review, photographic records, supervision visits, satellite images





Reports

Data Collection

Instruments


Collectiongauge) to reduce vulnerability to CCSite 2 Papaloapan:One management plan for Wildlife Conservation, Management, and Sustainable Utilization Units (UMA) in mangrove ecosystems


* * * *At least one UMA’s established

At least one UMA’s established

Annual report



Site 2 Papaloapan:Strengthening capacities for adaptation to CC in at least two locations



One workshop concluded

Follow-up workshops

Capacities for adaptation to CC strengthened in at least two locations through follow-up workshops

Annual report



Site 3 Tabasco:Land Use Planning Program (LUPP) revamped incorporating CC impacts as well as

Deforestation and land conversion are frequent

* * * LUPP of Tabasco revamped

LUPP for Tabasco approved

Annual reports






Reports

Data Collection

Instruments


Collectionadaptation and conservation measuresSite 3 Tabasco:Infrastructure and equipment (cleaning, desilting and rehabilitation of at least 3 km of water fluxes; one tide gauge; and at least two stilt houses) to reduce vulnerability to CC


* * * *

Infrastructure and equipment implementation initiated

At least 3 kms of water fluxes rehabilitated through Infrastructure and equipment completed.

Annual report



Site 3 Tabasco:One management plan for Wildlife Conservation, Management, and Sustainable Utilization Units (UMA) in mangrove ecosystems


* * * *At least one UMA established

At least one UMA established

Annual report



Site 3 Tabasco:Strengthening


* * * Pre-scanning workshops concluded


Capacities for adaptation to CC

Annual report

Supervision visits, and photographic





Reports

Data Collection

Instruments


Collection

capacities for adaptation to CC in at least one location

Follow-up workshops

strengthened in at least two locations through follow-up workshops

records

Site 4 Sian Ka’an:Protected area monitoring system strengthened including climate change parameters

Monitoring of wetland does not include CC data

* * *

CC data identified and collection program and protocols defined

CC data part of monitoring program of the wetland

Monitoring systems with CC parameters developed for Sian Ka’an

Monitoring program with CC data; semiannual Project reports

Supervision, annual review and climate models

INECC and CONANP with local coordinator

Site 4 Sian Ka’an:Protected area management program revised to include climate change considerations

Protected area management plan does not include CC data

Identification of CC impacts initiated

The Sian Ka’an protected area management program revised to include climate change considerations

Protected area management program revised to include climate change considerations

Protected area management program and the monitoring system with CC data; semiannual Project reports

Supervision, and annual review,


Site 4 Sian Ka’an:A target of repopulating genetically diverse temperature-resistant coral genotypes in six areas

Repopulation not included in coral reef conservation programs

* * *

Repopulation program designed and selection of adequate species and nurseries developed

A target of genetically diverse temperature-resistant coral patches established in 6 locations achieved

At least six areas in the Sian Ka’an Biosphere Reserve with repopulated temperature-resistant coral genotypes.

Bi-annual and annual reports, repopulation plan

Bi-annual and annual review, photographic records,satellite images, supervision visits, GIS





Reports

Data Collection

Instruments


CollectionSite 4 Sian Ka’an:Rehabilitation of water fluxes and restoration of El Playón mangrove ecosystem for a target of at least 70 ha.

Degraded mangrove community

* * * *


Rehabilitation of water fluxes and restoration of El Playón mangrove ecosystem in at least 70 ha.




Site 4 Sian Ka’an:Infrastructure and equipment (one tide gauge and meteorological instruments) to reduce vulnerability to CC


* * * *

Infrastructure and equipment implemented

Infrastructure and meteorological instruments to reduce vulnerability to CC

Annual report



Site 4 Sian Ka’an:Strengthening capacities for adaptation to CC in at least one location




Follow-up workshops

Capacities for adaptation to CC strengthened in at least two locations through follow-up workshops

Annual report



Component 3: Assessment of the Impacts of Climate Change on Water Resources Planning at a National Level and in Coastal Wetlands including the Identification of Potential Response OptionsClimate change impact scenarios developed for national water

National policies do not yet incorporate cc impacts on water availability

Scenarios of CC impacts on national

Response options designed (IPCC fourth

Response options identified (IPCC fourth

Response options identified (IPCC fifth assessment

At least one national water resources management

Climate change impact scenarios for national water resources and

Annual report; studies; CC data on

List of viable policy options

IMTA/CONAGUA




Reports

Data Collection

Instruments


Collection

resources and for coastal wetlands including identification of response options

water resources developed

assessment report)

assessment report)

report)Supporting studies at one emblematic basin concluded

response option identified that considers CC impact scenarios

for coastal wetlands including identification of response options, developed

national and priority watershed level

Component 4: Project Management

Established processes for articulation and coordination among the agencies involved.

Reduced time in issuing contracts and administrative processes.

N/A

The Project Implementation Team (PIT) is consolidated.

Established Institutional arrangements.

Strengthening PIT

Institutional arrangements.

Strengthening PIT

Mid-term Review is performed and, if appropriate, restructuring is processed

Monitoring and evaluation from project activities

Strengthening PIT

Decreased administrative time

Monitoring and evaluation including counterpart funding is on track

Final evaluation finds the project management satisfactory

Final evaluation finds project management satisfactory

Biannual progress reports, the MTR report, the final report

Bank’s Supervision

INECC, IMTA, Bank

Annex 4Action Plan

Annex 5

Disbursement Projections until October 2016

EJERCICIO DESEMBOLSADO A SOL. 15

USD

PARA DESEMBOLSO ENJUL-SEP 2015

PARA DESEMBOLSO ENOCTUBRE-CIERRE 2015

PARA DESEMBOLSO ENENE-MAR 2016

PARA DESEMBOLSO EN

ABR-JUN 2016

PARA DESEMBOLSO ENJUL-SEP 2016

PARA DESEMBOLSO ENOCT-CIERRE 2016

2011 -

2012 97,115.

05

2013 106,854.3

3

2014 725,211.0

0

2015 1,303,504.

43 462,941.56 562,862.3

7 273,466.7

2 648,697.47 125,124.9

8 194,22

2.08 MONTO

ACUMULADO 2,232,684.

81 2,695,626.37 3,258,488.7

4 3,531,955.47 4,180,652.94 4,305,777.9

2 4,500,00

0.00 MONTO DONATIVO

4,500,000.00

% EJERCIDO 49.62% 59.90% 72.41% 78.49% 92.90% 95.68% 100.00%

MONTO POR EJERCER

2,267,315.19 1,804,373.63

1,241,511.26

968,044.53 319,347.06

194,222.08

-

Annex 6Fulfillment of Revised Project Indicators

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