# FY 2003 Congressional Budget Justification Narratives

# for Environment and Energy SOs

# by Operating Unit 

# 

# 

# BOLIVIA

**PROGRAM TITLE**: Natural Resources Sustainably Managed (Pillar:
Economic Growth, Agriculture, and Trade)

**STRATEGIC OBJECTIVE AND NUMBER**: Forest, Water and Biodiversity
Resources Managed for Sustained Economic Growth, 511-004

**STATUS**: Continuing

**PLANNED FY 2002 OBLIGATION AND FUNDING SOURCE**: \$6,053,000 DA

**PRIOR YEAR UNOBLIGATED AND FUNDING SOURCE:** \$0

**PROPOSED FY 2003 OBLIGATION AND FUNDING SOURCE**: \$5,080,000 DA

**INITIAL OBLIGATION**: FY 1997 **ESTIMATED COMPLETION DATE**: FY 2004

# Summary: USAID's program to improve the management of Bolivia's natural resources falls into three areas and includes technical assistance and training to: 

-   promote sustainable forest management;

-   improve park and protected area management; and

-   promote cleaner production practices among local industries.

**Inputs, Outputs and Activities:** *FY 2002 Program:* USAID proposes to
increase planned funding by more than 10% of the amount notified in the
FY 2002 Congressional Budget Justification. USAID will provide technical
assistance to continue support for forestry programs that have made
Bolivia the global leader in certified tropical forestry. USAID will
also provide technical assistance and training to initiate programs to
conserve three globally important protected areas along the eastern
slope of the Andes (Carrasco, Amboró, and Pilón Lajas) and work with the
Icozeño Indians to consolidate the management of Bolivia's largest
protected area, the Kaa Iya del Gran Chaco National Park. Furthermore,
USAID will continue to provide technical assistance to engage the
private sector in promoting cost-saving pollution prevention and energy
efficiency measures. USAID personnel will also work with the Government
of Bolivia (GOB) and local non-governmental organizations (NGOs) to
establish a private grant-making foundation (PUMA). USAID will also
initiate analyses to inform a new country strategy which will begin in
FY 2004.

SUBMISSION OF THIS PROGRAM DATA SHEET CONSTITUTES FORMAL RENOTIFICATION
OF USAID'S INTENT TO OBLIGATE FY 2002 RESOURCES FOR THE ACTIVITIES
DESCRIBED ABOVE.

*Planned FY 2003 Program:* USAID will use FY 2003 resources to provide
technical assistance and training to consolidate ongoing activities in
the areas of sustainable forest management, park and protected areas
management, and cleaner production practices among local industries.

**Performance and Results:** With support from USAID and the Wildlife
Conservation Society (WCS), an Icozeño organization has consolidated
land titles for the Kaa Iya national park and indigenous territory. Kaa
Iya is the largest national park in Bolivia and the largest managed by
an indigenous organization in the Americas. These efforts helped earn
them a prestigious award from the Spanish government for exceptional
contributions to environmental conservation and defense of the cultures
of native people. Support to other protected areas has also resulted in
the approval of the management plan of the high Andes' most important
protected area, Eduardo Avaroa. USAID-supported tourism activities there
currently provide some of Bolivia's poorest communities with five times
more resources than all GOB programs combined. In addition, The Nature
Conservancy and the Protection of Tarija's Environment (both NGOs) have
partnered with local residents of Tariquia National Park, which is now
well managed and will not require additional USAID resources.

As a result of changes catalyzed with USAID support, Bolivia remains the
global leader in commercial tropical forests which are internationally
(and voluntarily) certified as well managed, with 983,263 hectares. Over
the last year, the sustainable forestry program focussed mainly on
community forestry efforts that have resulted in titling of lands for
municipal groups in two important forest production areas and land
consolidation of indigenous territories and state-owned forest lands. A
deforestation study of the Department of Santa Cruz was completed to
help direct future policies.

In 2001, USAID's cleaner production program (supporting the Center for
the Promotion of Sustainable Technologies, CPTS) demonstrated how
public-private partnerships can promote economic development while
reducing environmental waste and pollution. CPTS worked with the
country's largest smelter to complete an environmental audit,
identifying production changes that will significantly reduce production
costs and eliminate volatized arsenic and other contaminants from the
air near the city of Oruro (and thereby greatly reducing a significant
threat to human health). CPTS provided technical assistance to companies
that resulted in annual water savings equivalent to two months of
consumption of Bolivia's capital city (La Paz) and close to \$1 million
in cost savings. Finally, CPTS successfully partnered with the
Municipality of La Paz to improve the management and extend the life
span of the local solid waste facility.

USAID/Bolivia's environmental programs have achieved the following
results to date: (a) the area of independently certified forest areas
and protected areas with adequate management have reached 2,753,579
hectares; (b) the value of certified forest products exported has
increased from \$178,689 in 1997 to \$17,280,000; and (c) the confirmed
number of industrial plants and other pollution sources that have
adopted cleaner production practices is 26 as compared to only 17 in
1999. These accomplishments demonstrate the progress being made to
improve the management of Bolivia's natural resources.

USAID\'s continued efforts will improve the management of commercial
forests and protected areas and reduce pollution generated by
manufacturers and hospitals. In 2001 the total area of forest
internationally certified as \"well managed\" is expected to climb to
1.4 million hectares and certified sales will surpass \$15 million. By
2003, 2.5 million hectares of forest will be certified and exports of
certified products should surpass \$21 million. Progress in these areas
will produce local benefits, build upon equitable and participatory
governance, foster economic development, and create incentives for
resource stewardship.

**Principal Contractors, Grantees or Agencies: USAID** activities are
implemented by Chemonics International (prime), the Forest Management
Trust/University of Florida (sub), Wildlife Conservation Society
(prime), World Wildlife Fund (prime), Conservation International
(prime), The Nature Conservancy (prime), the Center for International
Forestry Research (prime), US Forest Service (prime), National
Oceanographic and Atmospheric Agency (prime), International Resources
Group (prime), and PA Consulting (prime).

**[BRAZIL]{.underline}**

**PROGRAM TITLE**: Environment Program (Pillar: Economic Growth,
Agriculture, and Trade)\
**STRATEGIC OBJECTIVE AND NUMBER**: Environmentally and
socioeconomically sustainable alternatives for sound land use adopted
beyond target areas, 512-001\
**STATUS**: Continuing\
**PLANNED FY 2002 OBLIGATION AND FUNDING SOURCE**: \$2,930,000 DA\
**PRIOR YEAR UNOBLIGATED AND FUNDING SOURCE:** \$0

**PROPOSED FY 2003 OBLIGATION AND FUNDING SOURCE**: \$5,680,000 DA\
**INITIAL OBLIGATION**: FY 1998 **ESTIMATED COMPLETION DATE**: FY 2003

**Summary**: USAID/Brazil's Environment Program contributes to USAID\'s
objectives to reduce the threat of global climate change and conserve
biological diversity. It includes assistance to:

-   identify, promote, and adopt systems for sustainable land use and
    forest conservation in target areas;

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-   strengthen target institutions and local human capacity;

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-   adopt and/or implement target policies to support environmentally
    sustainable land use and forest management; and

-   disseminate sound land use systems beyond target areas.

**Inputs, Outputs and Activities**: *FY 2002 Program*: USAID proposes to
increase planned funding by more than 10% of the amount notified in the
FY 2002 Congressional Budget Justification. Building on successful
models developed under earlier stages of this program, USAID will
continue outreach of these models to contribute to reducing climate
change through conservation and sustainable use of forest resources in
select areas of the Brazilian Amazon and in the highly threatened
Atlantic Forest. Development Assistance (DA) funds will be used to
support the development and improvement of conservation units, private
reserve management, and sustainable forest management techniques, such
as reduced-impact harvesting alternatives and fire management. DA funds
will also be used to strengthen institutional capacity and provide
training on sustainable forest management and fire preparedness; support
policy-related activities that promote environmental enforcement and
compliance; and support the dissemination of successful models for
alternatives to deforestation and lessons learned through media,
education, policy dialogue and advocacy. The immediate impact will be
full protection, or reduced-impact use, of key critical tropical forest
resources. USAID continues to fund, for example, the largest rural fire
mobilization activity in Brazil, equipping tens of thousands of small
farmers and forest dwellers throughout the Amazon to combat accidental
fire with simple tools and agricultural practices that diminish use of
fire in land preparation.

*Planned FY 2003 Program*: FY 2003 DA funds will be used to continue the
implementation of those activities that focus on sustainable
alternatives for sound land use under a new country Strategic Plan to be
approved in FY 2002 and initiated in FY 2003. USAID anticipates using FY
2003 DA funds to restore forest protection in select areas through
scheduled dissemination of forest management, agroforestry production,
and fire protection practices at the community level and through key
actors in the public and private sectors.

**Performance and Results:** As a result of USAID\'s environmental
program in Brazil, the number of forest holdings independently certified
in accordance with environmental and social standards has increased.
USAID training and reduced-impact management models, for example, helped
four Amazon timber producers respond to market demand by having 280,000
hectares of forest holdings independently certified. USAID continues to
capitalize on a growing demand for certified forests by supporting the
creation of a permanent forest-management training center which will
manage an estimated two million hectares of certified forests in the
Brazilian Amazon by 2003. USAID also contributed to increased local
understanding of the need for public/private partnerships to conserve
public spaces interspersed with private properties in the highly
threatened Atlantic Forest. This heightened awareness is responsible for
averting harmful beach-front development and attracting sound
investments in resort hotel and parkway road development that value the
forest for its appeal to upscale eco-tourists. USAID has experienced
similar success in its capacity-building efforts to equip local NGOs
with the technical skills to meet new environmental challenges. The
Brazilian Government made an unprecedented request for assistance to a
USAID-funded partner NGO to use its land classification techniques to
define options for creating ten million hectares of new parks and
reserves in the Brazilian Amazon on formerly disputed lands. Another
partner was asked to apply USAID-funded climate and forest modeling
methodology to help monitor the impact of a major GOB road-paving
project in the Amazon. Yet another partner responded positively to a
request by Amazonas state officials to share their expertise on
biodiversity mapping and monitoring methodology.

During the remainder of the current strategy period (FY 1998 - FY 2002),
USAID expects to further these accomplishments, resulting in the
adoption of systems for sound land use in target areas, strengthened
institutions and local human capacity, and implementation of policies
that support environmentally sound land use.

**Principal Contractors, Grantees, or Agencies:** USAID implements its
activities through U.S. private voluntary organizations (PVOs), USG
agencies such as the United States Department of Agriculture\'s Forest
Service and the Smithsonian Institution, and several U.S. academic
institutions (University of Florida and the State University of New York
at Albany), in cooperation with local partners. U.S. prime contractors
and grantees are World Wildlife Fund (WWF), The Nature Conservancy
(TNC), Conservation International (CI), Woods Hole Research Center
(WHRC), and the Tropical Forest Foundation. Fundaçao Floresta Tropical
(FFT), a Brazilian affiliate to the Tropical Forest Foundation, is a
sub-grantee.

**USAID MISSION**: Brazil\
**PROGRAM TITLE**: Energy Program (Pillar: Economic Growth, Agriculture,
and Trade)\
**STRATEGIC OBJECTIVE AND NUMBER**: Increased adoption by key actors of
concepts, methods, and technologies for clean and efficient energy
production and use, 512-002\
**STATUS:** Continuing\
**PLANNED FY 2002 OBLIGATION AND FUNDING SOURCE**: \$1,000,000 DA\
**PRIOR YEAR UNOBLIGATED AND FUNDING SOURCE:** \$138,600 DCA

**PROPOSED FY 2003 OBLIGATION AND FUNDING SOURCE**: \$1,000,000 DA**\
INITIAL OBLIGATION:** FY1999 **ESTIMATED** C**OMPLETION DATE**: FY2003

**Summary**: The energy program is designed to help the Government of
Brazil (GOB) and other public and private actors in the energy sector to
contribute to reducing global climate change through reduced carbon
emissions and includes assistance to:

-   develop and implement policies that foster clean and efficient
    energy production and use;

-   improve access of key actors to information on operating and
    financing clean and efficient energy production and use;

-   increase availability and use of financing for clean and efficient
    energy production and use; and

-   expand technology cooperation between U.S. and Brazilian firms for
    clean and efficient energy production and use.

**Inputs, Outputs and Activities:** *FY 2002 Program*: Working in close
collaboration with the Government of Brazil (GOB) through its energy
regulatory agencies and its energy efficiency and rural renewable energy
programs, USAID\'s efforts will build on past successes for further
expanding renewable energy applications and energy efficient
technologies. The program supports GOB efforts in two major areas. The
first aims to improve the performance of the national clean energy
program for delivering renewable energy to 20 million consumers situated
in 60,000 rural communities at market-determined prices. The second
program area emphasizes technical assistance and capacity building to
energy-regulatory agencies and the national energy efficiency program.
It focuses on identifying, selecting, and proposing policies and
regulations that will effectively impact the rational use of energy in
the industrial and household sectors. FY 2002 DA funds will be used to
provide technical assistance and training through the Brazil Energy
Training and Outreach Program (BETOP); continue the activities of the
Brazil Clean and Efficient Energy Program (BCEEP); and provide technical
assistance for identifying potential Development Credit Authority (DCA)
initiatives. These activities will focus on promoting clean
energy-related policies; supporting capacity-building efforts;
increasing the availability of financing for clean and efficient energy;
facilitating technology cooperation, and providing technical oversight
and monitoring

*Planned FY 2003 Program*: It is anticipated that a new country
Strategic Plan will be approved in FY 2002. Under this Strategic Plan,
USAID plans to use FY 2003 DA funds to continue to provide technical
assistance and training to the National Energy Policy Council, the
Brazilian Electricity Regulatory Agency (ANEEL), and the National Energy
Efficiency Program to expand the program to other key actors. Other
partners may include the Brazilian Oil Agency and the National Program
for the Rational Use of Natural Gas and Oil, key entities for developing
an energy policy which would be committed to efficient energy use, clean
energy technologies, and global climate change awareness.

**Performance and Results:** To date assistance under the Energy Program
has resulted in advances in policy and regulation issues, the
application of technologies for clean and efficient energy production
and use, and climate change mitigation. Key public- and private-sector
partners that have received training and technical assistance insist
that the program has demonstrated its capacity to add considerable value
to focused initiatives in the energy sector. As a result of USAID\'s
assistance, new guidelines for energy efficiency projects annually
presented to ANEEL from utilities companies were more focused in
measurement, verification, and evaluation of results, as recommended in
the BETOP's training workshops. In addition, USAID has fostered a
fruitful partnership between ANEEL and the United States Energy
Association, which has encouraged an exchange of experiences in
regulation and system operation between American and Brazilian
regulatory institutions. In FY 2001, a successful partnership was signed
between ANEEL and the Pennsylvania Public Utilities Commission. USAID is
also supporting a wider national debate and enhanced awareness in the
global climate change arena through a series of workshops with local
partners and has been successful in utilizing the Development Credit
Authority (DCA) loan guarantee program to support clean energy projects.
Four projects were positively evaluated and will be eligible for DCA
guarantee. USAID efforts in these areas will result in the consolidation
of clean energy markets and improved energy policies, which will
positively impact the way Brazil meets its growing energy needs through
approaches that are not harmful to the environment and are socially
just.

**Principal Contractors, Grantees, or Agencies:** USAID implements
activities through Winrock International (prime).
Sub-contractors/grantees include 13 Brazilian partners (NGOs, capital
venture companies, energy company associations, and universities), the
Institute for International Education (IIE), PA Consulting (formerly
Hagler Bailly), and Vibhava Consultoria Empresarial, Ltda.

**[COLOMBIA]{.underline}**

**PROGRAM TITLE:** Alternative Development (Pillars: Democracy,
Conflict, and Humanitarian Assistance; Economic Growth, Agriculture, and
Trade)

**STRATEGIC OBJECTIVE AND NUMBER:** Provide Economic and Social
Alternatives to Illicit Crop Production, 514-008

**STATUS:** Continuing

**PLANNED FY 2002 OBLIGATION AND FUNDING SOURCE:** \$56,500,000 ACI

**PRIOR YEAR UNOBLIGATED AND FUNDING SOURCE:** none

**PROPOSED FY 2003 OBLIGATION AND FUNDING SOURCE:** \$75,000,000 ACI

**INITIAL OBLIGATION:** FY 2000 **ESTIMATED COMPLETION DATE:** FY 2006

**Summary:** The alternative development (AD) program seeks to create
economic and social incentives that encourage small producers of coca
and opium poppy to permanently abandon illicit crop cultivation. USAID
will provide technical assistance and training to:

-   expand licit economic opportunities;

-   develop rural social and productive infrastructure;

-   improve management of natural resources and the environment; and

-   strengthen national and local institutions.

**Inputs, Outputs and Activities:** *FY 2002 Program:* The AD program is
implemented in close coordination with the government of Colombia's
(GOC's) drug control program which is supported by several U.S.
Government entities. GOC resources provide immediate assistance to
35,000 families that signed GOC coca eradication pacts. USAID
complements GOC efforts in several ways. First, USAID provides medium
and long-term production, credit, and marketing assistance for larger
agro-industrial activities with groups of farmers who want to eradicate
coca. USAID seeks to focus these activities in areas with reasonable
conditions for success such as road access to regional markets and a
reasonable security environment. Second, USAID works with communities
that want to voluntarily eradicate coca in exchange for assistance with
small-scale social or productive infrastructure projects selected by the
community (small roads, bridges, potable water systems, schools, health
facilities, etc). These projects generate employment and income while
providing infrastructure to support licit productive activities. Third,
USAID helps farmers and indigenous families improve small scale,
farm-level production of food crops or livestock in exchange for
eradication of drug crops. USAID has also carried out a limited number
of immediate assistance activities with farmers who signed GOC
eradication pacts. As a result of a recent assessment, USAID plans to
fund larger labor intensive infrastructure construction to provide
temporary employment opportunities in areas to be subjected to extensive
aerial fumigation of coca. The program is focused in southern Colombia,
but extends to other drug crop production areas in the country.

*Planned FY 2003 Program:* USAID plans to use FY 2003 resources to
further these efforts and gradually expand the scope of activities to
the western half of the country.

**Performance and Results:** USAID's technical assistance team began
fieldwork in May 2001. In southern Colombia, the following results were
achieved to date: 2,377 families participating in GOC eradication pacts
received immediate, short-term USAID assistance (which supplements
assistance provided by the GOC); projects to establish 260 hectares (ha)
of palm hearts and 2,500 ha of rubber were initiated; six local
government infrastructure and productive projects are completed and an
additional 56 are underway. Beyond southern Colombia, projects are
underway to develop 2,650 ha of agro-forestry products in Bolivar and
Norte de Santander Departments. Altogether, communities involved in
USAID-financed efforts have agreed to eradicate 14,000 ha of coca. In
Tolima, Huila, Cauca and Nariño Departments, 21 voluntary poppy
eradication agreements have been signed with small farmer associations
covering 1,740 small farm families. To date 680 hectares of poppy have
been eradicated. USAID's five-year goal is to assist 17,000 small farm
families establish 72,000 hectares of licit crops (including forestry
and livestock). Combined with GOC eradication and interdiction programs,
this will encourage small farmers to permanently abandon 3,000 hectares
of opium poppy and 30,000 hectares of coca.

While commendable in many respects, these accomplishments fell short in
relation to expectations created by GOC eradication pacts and the
expansion of aerial fumigation capability. Early signs of implementation
difficulties led USAID to conduct an in-depth review that identified
four main constraints to more rapid progress:

-   Security - The lack of GOC control over southern Colombia
    significantly delays implementation of the Alternative Development
    program when mayors and alternative development workers are
    questioned, harassed or murdered by illegal armed groups.

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-   High Costs and Low Productivity - Southern Colombia is not
    competitive in the production of most commercial agricultural
    products relative to other areas of Colombia or northern Ecuador.

-   Limited GOC Implementation - The GOC has limited implementation
    capacity in relation to the large number of eradication pact
    participants.

-   Limited Social Cohesion - Social cohesion at the community level is
    weak limiting social constraints to drug cultivation and increasing
    the likelihood that coca is replanted after aerial eradication.

Based on this analysis, USAID is initiating a number of adjustments that
will be phased in over the next year, including:

-   continuing support for hearts of palm, rubber and wood products
    projects in southern Colombia; however, at this time USAID will not
    promote additional large-scale agro-industrial activities;

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-   focusing on larger infrastructure construction projects in areas
    that will be subjected to intensive aerial fumigation to provide
    farmers with employment and income when their agricultural
    livelihoods are severely diminished or destroyed by spraying;

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-   focusing future assistance on community-selected, small-scale social
    and productive infrastructure activities that provide employment and
    income while improving local infrastructure needed for both social
    and economic development;

-   tightening the links between alternative development and local
    government activities and conditioning support for municipal
    infrastructure projects on coca eradication progress in the
    surrounding area;

-   structuring local government and alternative development programs to
    create incentives to enhance community cohesion;

-   expanding the range of partners involved in the program (private
    sector entities, NGOs, local churches, communities, and local or
    regional governments); and

-   accelerating the original plan to expand alternative development
    efforts to selected areas of the country beyond southern Colombia.

Expansion of alternative development activities to the north and west
(along with the other adjustments) will allow USAID to focus its efforts
on selected areas where: capable partners are already working; security
problems are less pronounced; markets are more accessible; and community
cohesion or state presence are more pronounced. These adjustments will
greatly increase the probability that the alternative development
program will be implemented successfully.

**Principal Contractors, Grantees, or Agencies:** USAID's principal
contractor is Chemonics (prime), which works in close coordination with
another U.S. firm, Associates in Rural Development (prime), in municipal
development. Both contractors are active on the ground in Putumayo. All
activities are closely coordinated with the GOC's National Alternative
Development Program and INL supported GOC eradication and interdiction
efforts.

**[DOMINICAN REPUBLIC]{.underline}**

**PROGRAM TITLE**: Economic Growth (Pillar: Economic Growth,
Agriculture, and Trade)

**STRATEGIC OBJECTIVE AND NUMBER**: Policies Adopted that Promote Good
Governance and Sustained Economic Growth; 517-007

**STATUS**: Continuing

**PLANNED FY 2002 OBLIGATION AND FUNDING SOURCE**: \$175,000 (DA)

**PRIOR YEAR UNOBLIGATED AND FUNDING SOURCE**: \$0

**PROPOSED FY 2003 OBLIGATION AND FUNDING SOURCE**: \$0

**INITIAL OBLIGATION: FY** 2000 **ESTIMATED COMPLETION DATE:** FY 2003

**Summary:** USAID program to increase economic growth includes four
components:

-   a more competitive Dominican economy;

-   rural electrification and energy service management through
    public-private partnerships;

-   policies in place for environmental protection and risk management;
    and

-   improved basic education through community and private sector
    participation.

**Inputs, Outputs and Activities:** FY *2002 Program:* FY 2002 is the
final year of obligations for this Strategic Objective. Program
activities will provide a segue to the new economic growth strategic
objective that commences this fiscal year. In order to bring economic
opportunities to rural Dominicans that lack electricity service, USAID
will utilize DA funds to access the Development Credit Authority (DCA)
facility. USAID will provide technical assistance through U.S. and local
NGOs to help form DCA-funded partnerships to begin to implement the
National Rural Electrification Plan developed with USAID assistance. The
Plan builds on previous USAID assistance that helped privatize power
generation and distribution systems, established U.S.-Dominican energy
regulatory partnerships, and developed viable alternative renewable
energy sources.

*Planned FY 2003 Program:* This Strategic Objective will end on
September 30, 2002.

**Performance and Results:** Program results include seven key economic
policy reforms that are leading to sustainable economic growth; eight
partnerships established for competitiveness initiatives, rural
electrification and educational improvement; and increased civil society
and community participation in competitiveness, trade, environment and
education reform activities. USAID believes that the benefits of growth
in the Dominican Republic\'s economy are transferred to all Dominicans
through improved economic and social policies, and greater participation
in the policy dialogue, formulation and implementation processes. These
processes have yielded important results in the economic, education,
environment and energy sectors.

As a result of USAID activities and assistance that supported
public-private sector partnerships developing and advocating for policy
reforms, Dominican lives have tangibly improved. For example, the
workforce will, for the first time, have a universal system of health
and pension coverage under the recently approved Social Security Law.
With USAID assistance, management of internal Dominican debt improved by
investigating expropriation claims and proposing a transparent procedure
to resolve the claims and fix the quantity of debt. The regulations for
the Capital Markets Law, under final review, will provide new sources of
investment capital through securities markets that will help spur
economic growth. A new Competitiveness Strategy Center was established
which will continue to assist in establishing public-private
partnerships that increase Dominican competitiveness in a global market.
New environmental norms and standards, developed with USAID technical
assistance, will give Dominicans greater protection from noise, solid
waste, air and water pollution. USAID assistance increased environmental
NGO participation and improved their effectiveness as advocates. As a
result of USAID assistance, the country has a new mandate for improving
basic education quality through a monitoring and evaluation system.
Finally, the recently approved General Electricity law allowed USAID to
focus its resources on rural electrification. This assistance is
enabling the Dominican government to develop a national rural
electrification plan, with implementation to begin through the
above-mentioned DCA-funded partnerships. USAID anticipates that other
donors, as well as the Dominican private financial sector, will apply
and replicate this financial model that will help bring electricity to
much of the remaining population that does not have electricity service.

**Principal Contractors, Grantees, or Agencies:** USAID anticipates the
continued involvement of key partners in economic growth activities
including Chemonics International (prime for competitiveness/trade
activities), the Boston Institute for Developing Economies (prime for
economic policy reform), International Resources Group (prime for
environment), National Rural Electrification Cooperative Association
International, Creative Associates (prime for education) and the U.S.
Department of Agriculture. USAID will select new implementing partners
for education-related activities involving public-private partnerships
to improve educational quality.

**[ECUADOR]{.underline}**

**PROGRAM TITLE:** Biodiversity Conservation (Pillar: Economic Growth,
Agriculture, and Trade)

**STRATEGIC OBJECTIVE AND NUMBER:** Biodiversity conserved in selected
protected areas and their buffer zones, 518-001

**STATUS:** Continuing

**PLANNED FY 2002 OBLIGATION AND FUNDING SOURCE:** \$5,375,000 DA,
\$2,000,000 ESF

**PRIOR YEAR UNOBLIGATED AND FUNDING SOURCE:** \$0

**PROPOSED FY 2003 OBLIGATION AND FUNDING SOURCE:** \$5,000,000 DA,
\$2,000,000 ESF

**INITIAL OBLIGATION:** FY 1997 **ESTIMATED COMPLETION DATE:** FY 2003

**Summary:** USAID's program to conserve Ecuador's rich biological
resources includes:

-   technical assistance to improve the country's environmental policy
    and legal framework;

-   technical assistance and funding support to develop improved natural
    resource management practices and training to support their
    adoption; and

-   technical assistance and training to strengthen the capabilities of
    local groups to carry-out effective conservation action.

**Inputs, Outputs and Activities:** *FY 2002 Program**: ***USAID will
use DA funds to support conservation and sound resource use in critical
bio-diverse areas. These funds will provide technical assistance and
training to help NGO partners and communities develop and implement
participatory natural resource management plans, to protect not only the
resources that provide their livelihood, but also up to 70% of Quito's
water supply. Additional technical assistance will accelerate
development of long-term financing for conservation of Quito's
watershed, basic to the region's economic and social development. Land
titling for the 300,000 hectare Afro-Ecuadorian Ethnic Reserve will be
completed, and training will support broader adoption of low-impact
forestry management practices. The Awa Indigenous Federation (bordering
one of the most conflictive areas of southern Colombia) will receive a
second year of technical assistance and training (e.g. forestry and
wildlife management) to improve its capabilities to manage the Chocó
biodiversity "hotspot."

A new activity will be initiated, in coordination with the on-going
Northern Border program, to provide technical assistance and training
for biodiversity conservation and to consolidate land tenure (boundary
definition and marking) for indigenous peoples groups along the northern
border. This will help stabilize this conflict-prone area and prevent
unauthorized colonization and conversion of some of the world's richest
habitats. A community-based ecotourism program on Isabela Island
(Galapagos) will be further developed, laying the foundation for
alternatives to environmentally destructive over-fishing. This should
also help reduce conflict, as GOE-enforced catch limits have repeatedly
led to violent protests by local fishermen.

USAID will use ESF funds to enhance the Galapagos National Park's
capabilities to monitor and protect the Galapagos Marine Reserve through
the purchase of specialized equipment. Scientific assessments
demonstrate that commercial tuna fishing in the Reserve can negatively
affect the Galapagos' biological diversity through heavy bycatch on sea
lion, shark, turtle, albatross, and other endangered species. Enhanced
GNP response capabilities will help ensure that the Reserve's biological
diversity is adequately protected, even as Ecuador increases its tuna
exports. Also, these additional assets will greatly enhance Ecuador's
abilities to monitor and address the illegal movement of precursor
chemicals and drugs in the Galapagos.

*Planned FY 2003 Program:* In December 2000 USAID carried out an
external evaluation of its environment program, which is now being used
to guide the revision of the environment strategy. The findings and
recommendations of the evaluation have been used to improve program
focus by identifying priority program areas for FY 2003 resources. The
first area is enhanced protection of Quito's watershed, which will work
with local partners, communities, other donors and the GOE to help
consolidate and improve management of the watershed's five protected
areas. Adequate water provision is an increasingly high priority for
Quito, especially given that this region reportedly has the highest
concentration of biological diversity. The second high-priority program
area is conservation of the Galapagos Islands, especially the Marine
Reserve. Activities will include technical assistance and training to
further develop low-impact community-based ecotourism, and conflict
reduction with broader engagement of stakeholder groups including the
commercial fishing sector. The third program area (to be funded in part
with ESF funds) includes expanding work with indigenous groups along the
fragile northern border, to build their technical and administrative
capabilities to manage rich biological resources and reduce
vulnerabilities to the pressures from southern Colombia. Technical
assistance to develop endowment funds for these groups for long-term
conservation will be a priority, exploring opportunities such as
collaboration with local oil companies and the Tropical Forestry
Conservation Act.

**Performance and Results:** Ecuador may have more biological diversity
per unit area than any other country on earth and USAID's program is
helping to conserve substantial areas of this globally significant
habitat. In 2001, 1.4 million hectares were better managed with USAID's
support through implementation of participatory natural resource
management plans. This number is expected to exceed 3.0 million hectares
by the mid-point of the new Strategy period. Capacity-building has
played an important role in this success, and by 2001 the program's five
local NGO implementing partners considerably improved their
administrative and financial capability (e.g., active Board of
Directors, accurate financial reporting) and leveraged almost \$7
million in non-USAID funds to support their efforts. Improved policies
and legal frameworks helped to facilitate better management of the
Galapagos Marine Reserve. At the same time, resource-based conflicts in
the Galapagos are likely to continue, and USAID will provide expert
technical assistance (e.g., through the National Marine Fisheries
Service) to strengthen the scientific basis for consensus on fisheries
management. During this reporting period, Quito's electric company (an
important water user) agreed to provide \$45,000 per year to the Quito
Water Fund, bringing the Fund's total capital to approximately
\$500,000.

An important outcome of this program will be to accelerate consolidation
of indigenous territories strategically located along the northern
border, thereby providing a stronger social and physical barrier to the
spread of the coca economy and related violence. Improved policy and
legal frameworks will greatly contribute to the protection of this rich
bio-diverse region and encourage better conservation and management
practices by citizens. Finally, USAID support will contribute to the
growth of the Quito Water Fund to assure long-term financing for
conservation of the watershed.

**Principal Contractors, Grantees or Agencies:** USAID works with CARE
(through FY 2002), The Nature Conservancy, and the World Wildlife Fund,
and their local NGO partners. Activities in the Galapagos are
implemented through the Galapagos National Park and the Charles Darwin
Foundation, and USAID anticipates their continued involvement in the
future. USAID expects to issue a competitive procurement in FY 2002 for
its new activity with indigenous groups along the northern border.

**[EL SALVADOR]{.underline}**

**PROGRAM TITLE:** Clean Water Access (Pillar: Economic Growth,
Agriculture, and Trade)

**STRATEGIC OBJECTIVE AND NUMBER**: Increased Access by Rural Households
to Clean Water, 519-004

**STATUS:** Continuing

**PLANNED FY 2002 OBLIGATION AND ACCOUNT:** \$3,200,000 DA

**PRIOR YEAR UNOBLIGATED AND FUNDING SOURCE:** \$0

**PROPOSED FY 2003 OBLIGATION AND ACCOUNT:** \$4,100,000 DA

**INITIAL OBLIGATION**: FY 1998 **ESTIMATED COMPLETION DATE:** FY 2004

**Summary:** USAID is providing access to clean water for the rural
poor, especially women and children, in 18 municipalities through an
integrated and environmentally sustainable approach to improving and
conserving water resources. The program has three major components,
including (a) institutional coordination and policy, (b) integrated
water management in municipalities, and (c) citizen awareness,
participation and action. USAID is providing training and technical
assistance:

-   to improve water source quality through environmentally sustainable
    agricultural practices;

-   to improve performance of water delivery systems by strengthening
    infrastructure as well as management capacity;

-   for more effective citizen actions to address water issues through
    public education campaigns and training; and

-   for improved municipal management of water resources through
    training at the municipal level and promoting a coordinated
    approach.

**Inputs, Outputs, and Activities:** *FY 2002 Program*: The program
emphasizes the protection of watersheds. Protected and healthy
watersheds provide natural water storage during dry periods and tend to
normalize peak flows during heavy rainfalls, reducing flooding. FY 2002
DA funds will provide technical assistance and training to improved
agricultural practices that involve farmer groups organized to implement
reforestation, soil conservation, and ecologically friendly production
methods. The number of water distribution systems that provide rural
communities with access to clean water will be expanded. Demonstration
projects will be carried out to promote the use of wastewater treatment
and solid waste disposal through appropriate technology methods and
recycling. In addition, USAID will support educational campaigns to
increase citizen understanding of the causes and consequences of unclean
water and the solutions for obtaining clean water. Finally, USAID will
work to resolve water-related issues through organization and training
efforts aimed at small community groups, municipalities, and national
water agencies that will improve the ability of these entities to manage
water resources. These interventions will reach an estimated 179,000
rural residents providing access to clean water. The number of actions
taken to resolve water-related issues will increase to 300 from the
current level of 43 demonstrating effective citizen action. Municipal
government participation in the management of local water resources will
facilitate the development and implementation of at least 18 municipal
water resource management plans.

*Planned 2003 Program*: USAID intends to use FY 2003 DA funds to
continue activities in watershed protection, potable water systems
development, water education, and related community participation in the
resolution of water-related issues. Those activities with measured
success will continue to be supported. They may include technology
demonstration projects in (a) improved agricultural practices through
demonstration farms, (b) solid and liquid waste treatment, and (c) water
storage reservoir irrigation. For instance, USAID may test the viability
of water storage reservoirs, initially viewed primarily as a mechanism
for irrigation, to provide for other uses such as potable water and
energy generation.

One of the deficiencies that USAID has uncovered is the inability on the
part of local operators to diagnose and repair water systems. USAID will
consider support to a regional level, technical support model that will
provide services to operators of rural water systems and help guarantee
the sustainability of rural systems. User fees are key to this
sustainability.

**Performance and Results:** Substantial gains have been made through
activities that emphasize improved extension practices, watershed
conservation, and production of high value commodities. A total of 325
demonstration farms have worked with 3,859 neighboring farms to increase
the area of land conserved to almost 9,000 hectares, more than double
the original end-of-activity target. In all, 50 potable water systems
already have been completed, rehabilitated, or improved, serving 50% of
the households in the 18 municipalities.

End products of our program include the improvement of three
micro-watersheds, 5,000 farms in these watersheds using improved
agricultural and environmental conservation practices, 55% of households
in areas targeted by USAID with access to clean water, and 18 focus
municipalities with water resource management plans.

## Principal Contractors, Grantees, or Agencies: The principal prime grantee is CARE in a consortium with three local Salvadoran organizations: SalvaNatura, FUNDAMUNI--PROCAP, and SACDEL, all of which are sub-grantees. Other prime grantees include: World Vision, Catholic Relief Services, IICA Camagro, Project Concern International, and Border Development Services. 

**[GUATEMALA]{.underline}**

**PROGRAM TITLE**: Improved Natural Resources Management (Pillar:
Economic Growth, Agriculture, and Trade)

**STRATEGIC OBJECTIVE AND NUMBER**: Improved Natural Resources
Management and Conservation of Biodiversity, 520-005

**STATUS:** Continuing

**PLANNED FY 2002 OBLIGATION AND FUNDING SOURCE**: \$4,070,000 DA

**PRIOR YEAR UNOBLIGATED AND FUNDING SOURCE:** \$0

**PROPOSED FY 2003 OBLIGATION AND FUNDING SOURCE**: \$3,510,000 DA

**INITIAL OBLIGATION**: FY 1997 **ESTIMATED COMPLETION DATE**: FY 2003

**Summary:** USAID's natural resources management program has four
components:

-   training to assist rural families and entrepreneurs adopt
    environmentally sound practices for sustainable agriculture, timber
    and nontimber forest products, and ecotourism;

-   technical assistance and public awareness campaigns to promote
    policies to improve environmental management;

-   technical assistance and training to strengthen capabilities of
    local organizations to analyze policy and implement corrective
    measures in forest management concessions and other areas; and

-   technical assistance to foment public-private partnerships and
    increased local participation (private, municipal, and community) in
    the decision‑making process for natural resources management,
    including the administration of parks and forest reserves.

**Inputs, Outputs and Activities:** *FY 2002 Program:* DA funds will be
used to improve management and conservation of biodiversity in three
selected bioregions. Technical and financial assistance will support
community-based forestry management activities in the Maya Biosphere
Reserve (MBR), strengthening capacity in business management and
marketing to achieve more sustainable use of resources and higher family
incomes. Activities will be launched with FY 2002 funds in two new
geographic locations under The Nature Conservancy/USAID Parks in Peril
Program (Lake Atitlan and Motagua/Polochic watershed). Technical
assistance will continue for the design and application of selected
environmental policies at the national level, strengthening the newly
created Ministry of Environment. A performance monitoring system will be
developed and implemented in the three targeted bioregions.

*Planned FY 2003 Program:* USAID plans to use FY 2003 DA resources to
consolidate activities in the three selected bioregions. The program
will work with 14 community organizations to strengthen their business
capacity for forestry management. The area of focus will continue to be
the consolidation of management activities in one protected area in the
Maya Biosphere Reserve (Sierra Lacandon National Park). Work will
continue toward the institutional strengthening of local organizations
and application of key environmental policies for enhanced stewardship.

**Performance and Results:** As a result of USAID activities, the Master
Plan for the Maya Biosphere Reserve was developed and approved in 2001
with the participation of approximately 100 representatives from 34
organizations active in the Petén region. Sustainable practices were
adopted in fire control, forest management, and nontimber forest
products management, reducing fires to near zero in zones that had been
significantly affected the year before. Over 46,000 hectares of forest
were protected in 2001 by trained fire brigades. In protected areas, an
additional 67,642 hectares of forest were internationally certified this
year and 21,000 hectares are in the certification process. Improved
policies are allowing greater participation of civil society
organizations and delegated stewardship in management of protected
areas.

With successful completion of the program in FY 2003, USAID anticipates
that 700,000 hectares will have been conserved, the total area certified
under sustainable management contracts and concessions will exceed
400,000 hectares, and a biological monitoring system will be
operational.

**Principal Contractors, Grantees, or Agencies:** Key partners include
The Nature Conservancy, Academy for Educational Development, Chemonics,
Inc., and the International Resources Group. Guatemalan partners include
the Ministry of Environment and Natural Resources, National Council for
Protected Areas (CONAP), and local NGOs such as the Centro Maya and
Defenders of Nature. The Center for Tropical Agriculture Investigations
and Studies (CATIE) is a regional institution involved in the program.
Collaborating U.S. agencies include the Environmental Protection Agency,
U.S. Fish and Wildlife Service, the Department of the Interior National
Park Service, and the U.S. Forest Service.

**[HAITI]{.underline}**

No Congressional Budget Justification narrative was prepared for
Environmental Degradation Slowed, 521-002, since no new FY 2002 or FY
2003 funding was being requested

**[HONDURAS]{.underline}**

**PROGRAM TITLE:** Effective and Sustainable Water Management (Pillar:
Economic Growth, Agriculture, and Trade)

**STRATEGIC OBJECTIVE AND NUMBER:** Improved Management of Watersheds,
Forests, and Protected Areas, 522-002

**STATUS:** Continuing

PLANNED FY 2002 OBLIGATION AND FUNDING SOURCE: \$2,800,000 DA

**PRIOR YEAR UNOBLIGATED AND FUNDING SOURCE:** \$ 0

PROPOSED FY 2003 OBLIGATION AND FUNDING SOURCE: \$2,600,000 DA

**INITIAL OBLIGATION:** FY 1995 **ESTIMATED COMPLETION DATE:** FY 2005

## Summary: USAID\'s program to improve natural resource management aims to:

-   improve local water and sanitation services;

-   reduce flooding and water pollution;

-   increase hydroelectric generation and irrigated agriculture;

-   increase forest area under sustainable management;

-   improve management of environmentally sensitive protected areas;

-   strengthen local government capacity for water management, including
    allocation, regulation, and taxation; and

-   increase integration of regional water management functions and
    decisions.

**Inputs, Outputs, and Activities:** *FY 2002 Program:* This program is
being renotified due to the increasing focus on water services and the
addition of new components involving resource management by local
governments. USAID will provide training, technical assistance, and
supplies to local governments and non-governmental organizations (NGOs)
to improve their ability to develop and manage critical water supplies
and water services. This direct water management assistance will be
complemented by ongoing activities that support sustainable forestry and
watershed management through the National Forestry School, as well as by
small operational grants to local environmental organizations that
manage environmentally sensitive protected areas. The forestry
activities will focus on watersheds that are critical to drinking water
supplies. The protected areas will serve as models of effective water
management in highly sensitive ecological systems. Training will include
collection and management of basic hydrological and land use data,
analysis of water resource constraints and opportunities, water use
planning, and organization and administration of inter-municipal water
districts.

***Planned FY 2003 Program:*** USAID plans to continue the above
activities. In addition, USAID\'s Hurricane Mitch reconstruction program
has highlighted new opportunities that USAID will consider implementing
in FY 2003, including direct support for improving integrated water
management.  Technical assistance will help local governments improve
the application of user fees, enforcement of regulations governing the
protection of water supplies, allocation and use of water resources, and
administration of public services related to water use.  Additional
assistance may include technical input or funding to support the design
or installation of water and sanitation systems, development of
small-scale hydroelectric generation, development of low-cost micro
irrigation, small-scale water harvesting, water quality monitoring, and
design of flood and landslide management infrastructure. \
Grants will be made to local governments and water stakeholder groups
that could include materials and supplies to permit improving the
management and quality of water systems, irrigation, etc. with a focus
on complementing sustainable economic growth while safeguarding one of
the most vital of all natural resources, water. 

**Performance and Results:** This program will result in increased
access to potable water; improved water quality; better use of water for
household, agricultural, and industrial wastes; reduced damage from
landslides and flooding caused by seasonal rainfall patterns; less
susceptibility of agriculture to seasonal droughts; and a more equitable
allocation of limited water resources among competing stakeholders. More
land in critical watersheds will be dedicated to sustainable forestry
management. There will be an increase in the recreational and
educational use of protected areas, and a decrease in illegal poaching,
logging, and settlement in these areas.

The aggregate impact of these results will be seen in the improved
health of participating communities, increased income through energy and
irrigation uses of water, more equitable access to water for domestic
and productive uses, and reduced damage and loss of property and life
from flooding and drought.

USAID has a history of successful achievement of natural resource
management objectives in Honduras, which have historically been targeted
at the individual family or farmer. To date, 32,000 hectares of forest
land have been converted to sustainable management, and 6,500 hectares
of farmland have adopted land and soil conserving technologies. Under
the current program, these results will be broadened through a shift of
focus from the family and farm to the community, municipality, and
regional management organizations.

**Principal Contractors, Grantees, and Agencies:** USAID will continue
to develop the long-standing and successful relationships in natural
resource management that have been developed over many years with
Honduras\' centers of excellence, including the Honduran Environmental
and Development Foundation (Vida), the National Forestry School, the
Central American Technological University, and the Pan-American
Agricultural School (Zamorano), (all primary partners). Technical
assistance will be provided through an existing Integrated Water
Resource Management Indefinite Quantity Contract and through
limited-scope Participating Agency Service Agreements with U.S.
Government agencies that have been successful partners in Hurricane
Mitch reconstruction, including the U.S. Geological Survey, U.S. Army
Corps of Engineers, and U.S. Department of Agriculture. Grantees under
the program will include local and U.S. NGOs, municipalities, and
regional water management organizations.

**[JAMAICA]{.underline}**

**PROGRAM TITLE:** Sustainable Improvement of Natural Resources (Pillar:
Economic Growth, Agriculture, and Trade)

**STRATEGIC OBJECTIVE AND NUMBER:** Improved Quality of Key Natural
Resources in

Selected Areas that are Both Environmentally and Economically
Significant, 532-002

**STATUS:** Continuing

**PLANNED FY 2002 OBLIGATION AND FUNDING SOURCE:** \$ 3,203,000 DA

## PRIOR YEAR UNOBLIGATED AND FUNDING SOURCE: \$ 0 

**PROPOSED FY 2003 OBLIGATION AND FUNDING SOURCE:** \$ 3,642,000 DA

**INITIAL OBLIGATION:** FY 1999 **ESTIMATED COMPLETION DATE**: FY 2004

**Summary:** USAID's program to improve the quality of key natural
resources within selected areas of Jamaica involves:

-   a small grants program to local non-governmental organizations
    (NGOs) to implement community-based environmental management
    projects;

-   technical assistance and training to the government, the private
    sector, community-based organizations (CBOs), and NGOs to develop
    and implement environment management systems and policies;

-   technical assistance and training to wastewater treatment plant
    operators; and

-   an enhanced public awareness campaign.

**Inputs, Outputs and Activities:** *FY 2002 Program*: FY 2002 DA funds
will be used to improve watershed/hillside management and its effects on
coastal water quality by providing technical assistance to local NGOs to
help implement community-based environmental projects in the Great River
Watershed, in areas such as water and sanitation, disease resistant
crops, biological soil conservation, and waste management. Approximately
10 wastewater plant operators will be trained in effective wastewater
management and the development of a broad program that will enable
certification for wastewater operators will be introduced. In addition,
technical assistance will be provided to private sector entities, NGOs,
and CBOs to carryout water quality sampling and monitoring exercises.
Environmental audits will be conducted on 35 small and medium hotels,
and seven small manufacturing companies. Promotional materials will be
developed to educate the general public on environmental awareness and
suggest environmentally friendly methods that could be used while
carrying out day to day activities. Technical assistance will be
provided to government organizations to develop, adopt, and implement
two additional environmental management policies.

*Planned FY 2003 Program:* During FY 2003, USAID plans to use DA funds
to provide technical assistance and training and other support to the
following planned activities: watershed/hillside management in the
Portland Watershed with emphasis on improving farming practices;
development and implementation of a tourist attraction program in the
Great River area; drafting of two additional environmental policies; and
additional support for on-going environmental interventions.

**Performance and Results:** Important outcomes of this program will be
improved coastal water quality and enforcement of environmental
regulations. As a result of USAID activities, data for 2001 at targeted
sites reflected water quality within the standards set by both the
Government of Jamaica's National Environment and Planning Agency (NEPA)
and the U.S. Environmental Protection Agency (USEPA). The faecal
coliform data for Ocho Rios indicate that for 2001, the percentage of
samples falling within USEPA standards exceeded the target of 77% by
2.4%. Also, coastal water quality continues to improve. Six
organizations have demonstrated tangible benefits from adopting
environmental awareness and best practices during 2001. These
organizations introduced environmentally friendly agricultural practices
to farmers, and disseminated environmental information in the target
areas. For example, through a grant to an NGO, integrated pest
management principles are being applied by farmers in the Walkerswood
community. The project is helping to reduce soil erosion and pesticide
runoff that affects coastal water quality. The farmers are linked to a
processing facility for hot pepper sauce that provides a guaranteed
market. Encouraging hotels to "go green", environmental audits were
conducted on small and medium hotels, an increasing number of which are
eagerly embracing more cost effective "green" management practices.
Participating hotels have reported significant financial savings and
greater prestige in the eco-tourism marketplace. In the policy area,
progress was made in the development of two policies with on-going
efforts being made toward their adoption and implementation. The Ocean
and Coastal Zone Management Policy was tabled in Cabinet and is now
being circulated to the public for national consensus. The Environmental
Management Systems (EMS) Policy, which brings the number of policy
interventions to the targeted five, is awaiting Cabinet's approval.

**Principal Contractors, Grantees, or Agencies:** The main partners and
stakeholders include the National Environment and Planning Agency
(NEPA), National Water Commission, the Jamaica Hotel and Tourist
Association, the Jamaica Manufacturers' Association, and various
non-governmental (NGO) and community-based organizations. Prime
contractors and grantees are the P.A. Consulting Group, The Nature
Conservancy, and Associates in Rural Development (ARD). ARD has
sub-contracts with Cargill Technical Services and Camp, Dresser, McKee.

**MEXICO**

**PROGRAM TITLE**: Environmental Conservation (Pillar: Economic Growth,
Agriculture, and Trade)

**STRATEGIC OBJECTIVE AND NUMBER**: Critical Ecosystems and Biological
Resources Conserved, 523-006

**STATUS**: Continuing

**PLANNED FY 2002 OBLIGATION AND FUNDING SOURCE**: \$3,765,000 (DA)

**PRIOR YEAR UNOBLIGATED AND FUNDING SOURCE:** \$ 0

**PROPOSED FY 2003 OBLIGATION AND FUND0ING SOURCE**: \$5,265,000 (DA)

**INITIAL OBLIGATION**: FY 1999 **ESTIMATED COMPLETION DATE**: FY 2003

**Summary:** USAID's program to conserve critical natural resources in
Mexico works to:

-   strengthen management and infrastructure in protected areas;

-   increase involvement of local people in decisions on resource use
    and conservation;

-   support development and application of alternative uses for forests
    and other resources;

-   identify and work to improve policies that promote conservation of
    critical resources; and

-   build capacity of key institutions and individuals to implement
    resource management programs in selected regions in Mexico.

Starting in FY 2003 USAID/Mexico, in coordination with USAID/G-CAP
(USAID's Central America Regional Office in Guatemala), will carry out
Partnership for Prosperity (PfP) activities in coordination with the
Government of Mexico in the areas of environmental risk management,
disaster preparedness, and forest fire prevention and management.

**Inputs, Outputs and Activities: *FY 2002 Program****:* USAID proposes
to increase planned funding by more than 10% of the amount notified in
the FY 2002 Congressional Budget Justification. In FY 2002, USAID will
continue to consolidate basic management capacity in five critical
sites. USAID will also encourage those it has already trained to use
their new skills to foster ecological planning on a regional and
national scale. USAID partners will provide technical assistance and
resource information to local and national agencies and organizations to
ensure that environmental issues and priorities are incorporated into
the large-scale economic development planning, targeted at three
biologically sensitive regions of Mexico. This assistance will foster
collaboration between stakeholders to help them determine how to
mitigate negative impacts from economic plans being developed. USAID
will continue to support local capacity-building activities and
appropriate technology development so experts and communities can
develop improved approaches to monitor resources, damage mitigation, and
restoration of degraded habitat. Many of the activities will address
global climate change issues, such as developing improved criteria and
methods to measure change in forested areas and to calculate emission
and retention of carbon dioxide.

***Planned FY 2003 Program:*** The FY 2003 funds will continue to
support USAID's successful programs that build site and regional
ecological management capacity, as well as to respond to opportunities
to expand support of Mexican institutions and organizations charged with
management of forests, water, and protected areas. Improved management
of forest and water resources is a top priority of the Fox
Administration. Emphasis will be placed on supporting capacity building
and participation of local stakeholders in well-coordinated efforts from
local, state and federal agencies to decentralize natural resource
management decisions. Best practices will be applied to help improve
conservation of the Meso-American Reef and the Selva Maya forests of the
Yucatan Peninsula in cooperation with Guatemala and Belize. USAID is in
a strong position to assist in addressing these priorities, since it
helped develop resource management capacity in support of the northern
watersheds shared with the United States, and is working to improve fire
management and prevention.

Through the new Partnership for Prosperity initiative, environmental
risk management and disaster preparedness systems will be strengthened
and consolidated by preparing vulnerability assessments and implementing
mitigation strategies that improve collaboration. Mexican and Central
American capability to detect, control, and prevent forest fires will be
enhanced through cooperation with Mexico's improved national fire
prevention system and its capacity to integrate and coordinate regional
forest fire early warning, prevention, and management systems.

**Performance and Results:** USAID has strengthened site management,
financial planning, and infrastructure in eight areas (11 parks) under
Parks in Peril activity to transform these "paper parks" into
functioning units within the newly formed Mexican National Protected
Areas Commission. The program also assisted local communities in
priority conservation areas to find economically viable alternatives to
sustainably develop resources. For example, the two municipalities that
share Santa Maria Bay came together to form a joint strategy for its
conservation and development by forming the first community-developed
marine park in Mexico.

In Quintana Roo (located in the Yucatan Peninsula), regional funds
spurred cooperation across Mexico's southern border to Belize to address
pollution in Chetumal Bay, a high-priority threat to the Meso-American
Reef. In Chiapas, regional funds are helping to coordinate efforts to
protect the Selva Lacondon, the most extensive tropical rainforest north
of the Amazon, shared by Guatemala.

Training local communities in ecologically based tourism and sustainable
mariculture, is creating new opportunities in the context of newly
declared conservation areas and ecological zoning plans. Development of
information on trends and status of resources will support resource
monitoring plans, local policy development, and integrated management of
resources.

Based on lessons learned, the Wildfire Prevention and Restoration
Program reorganized its priorities in FY 2001 to ensure long-lasting
fire management priorities. Accomplishments to date include:

1\) developed know-how to address fires and restoration in and around
protected areas (with 2,600 local participants trained); 2) established
close working relationships between NGOs, communities, and GOM agencies
near critical areas; and 3) established an interactive hot-spot
information system showing fire activity nationwide on a daily basis,
shortening response time from days to hours.

With completion of the environmental conservation program in FY 2003,
USAID anticipates that 11 critical ecosystem sites will have the
capacity to continue conservation of their resources. In addition, the
capacity of communities and government agencies to implement compatible
policies and economic activities in and around conservation sites will
be consolidated in targeted areas.

**Principal Contractors, Grantees, or Agencies:** USAID anticipates the
continued involvement of prime partners including The Nature Conservancy
(particularly through its Parks in Peril program), the University of
Rhode Island, World Wildlife Fund, Conservation International, the
Mexican Conservation Fund, Pronatura, Winrock International, the U.S.
National Fish and Wildlife Foundation, and the USDA Forest Service, with
subcontracts to Amigos de Sian Ka'an, the Sonoran Department of Ecology,
the Institute of Natural History in Chiapas, and the University of
Quintana Roo.

### PROGRAM TITLE: Energy Conservation and Pollution Reduction (Pillar: Economic Growth, Agriculture, and Trade)

**STRATEGIC OBJECTIVE AND NUMBER:** Carbon Dioxide Emissions and
Pollution Reduced, 523-007

**STATUS:** Continuing

**PLANNED FY2002 OBLIGATION AND FUNDING SOURCE:** \$1,750,000 (DA)

**PRIOR YEAR UNOBLIGATED AND FUNDING SOURCE:** \$ 0

**PROPOSED FY2003 OBLIGATION AND FUNDING SOURCE:** \$1,500,000 (DA)

**INITIAL OBLIGATION:** FY 1999 **ESTIMATED COMPLETION DATE:** FY 2003

**Summary:** The USAID energy program in Mexico contributes to reduced
carbon dioxide emissions by improving energy conservation via the
following set of activities:

-   showing the viability of energy efficiency, renewable energy, and
    pollution prevention technologies through implementation of pilot
    projects, followed by replication on a larger scale;

-   supporting local partners' promotion of policy reforms that foster
    those technologies;

-   strengthening technical and managerial capabilities of Mexican
    partners for resources management systems and renewable energy
    development; and

-   identifying other funding for broader or nationwide replication of
    resource management and renewable energy technologies.

**Inputs, Outputs and Activities:** *FY2002 Program:* USAID proposes to
increase planned funding by more than 10% of the amount notified in the
FY 2002 Congressional Budget Justification. USAID-supported technical
assistance, working closely with Mexican partners, will continue to
support programs designed to demonstrate use of resource management
systems and renewable energy technologies that show the viability of
energy efficiency, renewable energy, and pollution prevention
technologies. This is accomplished through implementation of pilot
projects, followed by replication on a larger scale. These activities
will provide models for reducing greenhouse gas emissions, and improving
estimation of the emissions reductions produced by energy efficiency and
renewable energy projects.

USAID has adjusted its energy strategy to focus on replicating the
success of an initial pilot program during the remaining two years of
the strategy. This replication will: 1) reduce carbon dioxide emissions
by providing technical assistance to the large public oil company,
PEMEX, to help it substantially slow its growth of such emissions
nationally; 2) promote policy reforms for energy and water subsidies
that encourage significant resource conservation by using more efficient
pumping and irrigation technologies; 3) provide technical assistance for
improved renewable energy applications that benefit schools, e.g.
televised classroom programs; and 4) promote distribution of electrical
power to impoverished, indigenous rural communities in order to improve
health services, education, and economic production.

New financing for efficiency projects by energy service companies, using
the Development Credit Authority (DCA) in Mexico, will be underway in FY
2002.

*Planned FY 2003 Program:* The focus on maximizing the impact of the
lessons learned from the pilot phase (FY 1999-2001) will bear its
greatest fruit in FY 2003 as it moves towards sustainability through
widespread replication of programs. USAID's Mexican partners will be
dedicated to consolidation of capacity building activities and to
ensuring that local collaborators can skillfully develop, manage,
monitor, and evaluate their ongoing energy programs without the support
of USAID. Creation of a \$100 million revolving fund exclusively for
energy efficiency projects is planned, and GOM re-engineering efforts
are expected to be in full swing by FY 2003.

**Performance and Results:** Significant progress has been made in the
achievement of the principal objective. Carbon dioxide emission
reductions achieved to date are more than double the initial objective
of 232,700 tons. Over 440,000 tons of emissions have been avoided by the
pilot projects carried out from FY 1999 to FY 2001. In FY 2001, an
additional demonstration project in two sugar mills in Veracruz and
Oaxaca avoided 66,604 metric tons of carbon dioxide emissions (measured
over the lifetime of the 15-year technologies adopted).

USAID established a new relationship with Mexico's largest company,
PEMEX, fostering an internal emissions trading market by strengthening
its energy efficiency program. A train-the-trainers approach was
implemented in each of the four PEMEX subsidiaries to carry out energy
and environmental audits.

Significant progress was also made on improving measurement of
greenhouse gas reduction as a benefit of energy efficiency and renewable
energy projects.

In FY 2001, continued support to Mexico's national Shared Risk Trust
Fund and the World Bank's Renewable Energy for Agriculture Program
funded the installation of 200 renewable energy systems, with 1,000 more
planned for FY 2003. Increased adoption of renewable energy technologies
was also promoted in collaboration with the Secretariat of Public
Education, with installation of approximately 80 systems and parallel
training courses at each installation. The MREP team continued to work
with the Secretariat of Environment to install additional renewable
energy systems in protected areas, beyond those initially scheduled.

USAID anticipates substantial future savings in energy and carbon
dioxide emissions as a result of the replication of activities being
implemented on a long-term basis by its Mexican partner institutions.
With successful completion of the program in FY 2003, USAID anticipates
that there will be 2.5 million of metric tons of carbon dioxide offset
annually by energy efficiency and alternative energy use. This will
represent about 60% of Mexico's projected annual growth in carbon
dioxide emissions (4.16 million cubic tons per year), for 2003. The
level of energy and emissions savings will grow substantially as the
energy conservation programs continue into the future.

**Major Contractors and Grantees:** USAID manages two main activities in
this program: the RMSI and MREP. PA Consulting Group is the prime
contractor on the RMSI program and the U.S. Department of Energy's
Sandia National Laboratories leads the MREP program. Ultimate customers
are industrial firms and rural communities that receive support from
these USAID partners and their Mexican counterparts. Collaborating
agencies and subcontractors include the Secretariat of Energy (SENER),
the National Energy Savings Commission, the Energy Savings Trust, the
Mexican Center for Cleaner Production, the Association of Professionals
and Technicians for Energy Applications, the Tlalpan Delegation, Mexico
City's Government, Petróleos Mexicanos (PEMEX), the Shared Risk Trust
Fund (FIRCO), Secretariat of Environment, and the Secretariat of Public
Education.

**[NICARAGUA]{.underline}**

**PROGRAM TITLE:** Sustainable Economic Growth (Pillar: Economic Growth,
Agriculture, and Trade)

**STRATEGIC OBJECTIVE AND NUMBER:** Sustainable Growth in Small Producer
Employment and Income, 524-002

**STATUS:** Continuing

**PLANNED FY 2002 OBLIGATION AND FUNDING SOURCE:** \$ 9,930,000 (DA);
\$4,204,000 (P.L. 480)

**PRIOR YEAR UNOBLIGATED FUNDS AND FUNDING SOURCE:** \$ 0

**PROPOSED FY 2003 OBLIGATION AND FUNDING SOURCE:** \$ 12,520,000 (DA);
\$5,814,000 (P.L. 480)

**INITIAL OBLIGATION:** FY 1995 **ESTIMATED COMPLETION DATE:** FY 2003

**Summary**: USAID\'s economic growth objective seeks to increase
incomes and employment opportunities of small producers by providing
technical assistance and training focused on:

-   helping small farmers diversify production and increase output in a
    sustainable way;

-   increasing small- and micro-businesses in rural and urban areas;

-   fostering the rational use of natural resources; and

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-   increasing Nicaragua's competitiveness.

In working to strengthen economic activity, especially in rural areas,
USAID will work within the framework of the Agency's new Partnership for
Prosperity initiative for Central America and Mexico in building
stronger ties with the region to reduce poverty.

**Inputs, Outputs and Activities**: *FY 2002 Program*: FY 2002 economic
growth activities will be directed towards increasing incomes and
employment opportunities for poor Nicaraguans especially in rural areas.
This program will also begin to address problems arising from the sharp
decline in international coffee prices, the effects of the drought, and
the economic effects of last year\'s bank failures.

By channeling DA funding to U.S. private voluntary organizations (PVOs)
and Nicaraguan non-governmental organizations (NGOs), USAID will help
small farmers to adopt environmentally sustainable agricultural
practices, as well as increase the use of improved and certified seeds.
The USAID microenterprise program will continue to strengthen credit
unions in FY 2002, enabling them to provide financial services and
mobilize savings in rural areas. The program will also provide DA funds
to expand microenterprise lending for value-added activities, including
post-harvest processing and storage, food processing, equipment
manufacture and repair, and commercial services. USAID's natural
resources management activities will help protect important ecosystems
by strengthening management of protected areas, introducing
environmentally sustainable agricultural practices into the buffer zones
surrounding the protected areas.

Nicaragua's P.L. 480 Title II program, implemented by four U.S. PVOs, is
an integral component of USAID's economic growth strategy. Approximately
half of the annual Title II funding is focused on increasing the income
of small agricultural households, directly addressing the cause of rural
poverty. The program promotes production of higher-value crops and
investment in production, including drip irrigation systems.

*Planned FY 2003 Program*: USAID plans to use DA funds to implement a
modified economic growth strategy in FY 2003, a transition year to a
full new country strategy. The change in emphasis will shift activities
to those that help Nicaragua become more competitive in international
agricultural markets. USAID will build upon successes from prior years
and lessons learned from the Hurricane Mitch Reconstruction and Recovery
Program. In FY 2003, USAID will focus on increasing the productivity of
small farmers by providing technical assistance and training to support
improved agricultural techniques, crop diversification, strengthened
financial markets in rural areas, and adoption of government policies
conducive to private investment in rural areas.

**Performance and Results:** The Nicaraguan agricultural sector, slowly
recovering from Hurricane Mitch, has recently suffered further setbacks.
A series of droughts has led to substantial losses in grain production,
particularly in the northern departments damaged earlier by Hurricane
Mitch. In the past, farmers were able to compensate for crop losses by
taking employment in the coffee sector. (Nicaraguan coffee production
has traditionally employs nearly 200,000 people, roughly 30% of the
agricultural workforce.) This option is no longer available.
International coffee prices fell more than 60% in the last 18 months,
drying up this source of employment \-- as well as Nicaragua's most
important source of export earnings. To further exacerbate the problem,
bank failures and a \$500 million government bailout diverted funds that
could have been used for poverty alleviation programs, and led to the
evaporation of credit, particularly for the agricultural sector.

Despite these problems, USAID\'s program has helped to mitigate the
effects of these crises in many rural areas. Crop diversification,
improved soil and water conservation, adoption of environmentally sound
cultivation practices, and improved post-harvest storage, have led to
higher incomes for farmers and entrepreneurs and more resilience for
agricultural producers. To combat the drought the United States combined
a variety of resources from the Office of Foreign Disaster Assistance,
Title II and emergency food aid to provide relief assistance to
approximately 38,000 families.

USAID\'s Technical Services to Small Farmers Program provides grants to
local agricultural NGOs. The activities carried out under these grants
have brought about a 70% increase in production and a 19% increase in
annual family income for over 16,650 farm households. Average production
has increased substantially for coffee, basic grains, cacao, and
vegetables. Similarly, the 1,600 farmers working with the Cooperative
League of the USA (CLUSA) have received net incomes that are five times
higher than the incomes of neighboring farmers who have not worked with
CLUSA. Meanwhile, World Relief\'s Sustainable Agriculture Project is
reaching 3,580 beneficiaries and generating average increases in income
of 119% for those households.

The USAID National Seed Improvement Project (PROMESA) reduced tariff and
non-tariff barriers to regional trade of seeds and plant materials and
persuaded the Ministry of Agriculture to improve efficiency by
privatizing seed certification services. PROMESA also increased small
farmer access to improved seed and played a key role in expanding black
bean exports, leading to the export of 730 metric tons of black beans to
Costa Rica and benefiting 1,580 small farmers.

USAID-supported credit unions have continued to increase their
membership and levels of both savings deposits and loans with the loan
portfolio growing from \$73,600 to \$4 million today. Credit unions are
also introducing new financial services, such as insurance protection
for credit union members. USAID's micro-enterprise activities have
increased the income-earning and asset-building capacity of over 107,000
entrepreneurs through improved business skills, productivity, and market
access. Approximately 85% of the beneficiaries are women.

USAID expects that activities undertaken in support of this objective
will result in increased crop diversification, increased access to
improved seed, increased use of sound environmental practices and
improved post-harvest storage, all leading to increased agricultural
production and increased family incomes in rural areas. In addition, the
income-earning and asset-building capacity of entrepreneurs is expected
to increase.

**Principal Contractors, Grantees, and Agencies:** Contractors working
in support of this objective include Winrock International; Development
Alternatives Inc.; Boston Institute for Developing Economies; Associates
in Rural Development; World Relief Corporation; the Cooperative League
of the USA; the Adventist Development and Relief Agency; Catholic Relief
Services; Project Concern International (PCI); Save the Children; the
GON P.L. 480 Secretariat; the World Council of Credit Unions; Foundation
for Microenterprise Support; International Foundation for Community
Assistance; the Chispa/Confia Foundation; Promujer; the Cocibolca
Foundation; and Alistar Foundation. All are prime contractors.

**[PANAMA]{.underline}**

**PROGRAM TITLE**: Protection of Panama Canal Watershed (Pillars:
Democracy, Conflict, and Humanitarian Assistance; and Economic Growth,
Agriculture, and Trade)

**STRATEGIC OBJECTIVE AND NUMBER:** Panama Sustainably Manages the Canal
Watershed and Buffer Areas, 525-004

**STATUS:** Continuing

**PLANNED FY 2002 OBLIGATION AND FUNDING SOURCE:** \$4,500,000 DA

**PRIOR YEAR UNOBLIGATED AND FUNDING SOURCE:** \$0

**PROPOSED FY 2003 OBLIGATION AND FUNDING SOURCE:** \$7,000,000 DA

**INITIAL OBLIGATION:** FY 2000 **ESTIMATED COMPLETION DATE**: FY 2006

**Summary:** The program consists of technical assistance and training
to:

-   strengthen the capacity of the Inter-Institutional Watershed
    Commission (CICH) of the Panama Canal Authority to effectively
    coordinate management of the Panama Canal Watershed (PCW);

-   promote the development and implementation of a sound legal and
    regulatory framework for the PCW;

-   establish mechanisms for the financing of watershed management
    activities;

-   support CICH implementation of PCW monitoring;

-   strengthen the management of protected areas in the PCW;

-   foster income-generating activities that contribute to biodiversity
    conservation;

-   strengthen sustainability and outreach skills of selected NGOs
    active in the PCW;

-   promote local government and NGO involvement in the PCW
    decision-making process; and

-   implement local environmentally sound practices, including liquid
    and solid waste disposal systems.

**Inputs, Outputs and Activities:** *FY 2002 Program*: DA resources will
support new initiatives and continue activities with the highest
prospects for the achievement of program results. Current technical
assistance and training efforts to strengthen the management and
coordination capability of the CICH will continue. Moreover, new
initiatives will seek to expand investments and involvement through
in-kind contributions by line ministries, local governments,
non-governmental organizations (NGOs), and community-based
organizations. New efforts will seek to elevate the status of the CICH
and its importance to its member institutions through effective
coordination and utility to its members. A new incentive fund to finance
four innovative pilot activities that address and help to solve key
environmental problems in the PCW will be established. This incentive
fund will leverage additional resources from the Panama Canal Authority
and other members of the CICH, which at a minimum will more than double
USAID annual contributions. Also, earnings of the Ecological Trust Fund
(FIDECO) will be increasingly focused on financing activities in the
PCW. A water pollution control system in a small PCW town with a
population of less than 50,000 is planned with funding from the LAC
Bureau under the Environmental Health Program.

*Planned FY 2003 Program*: DA resources requested in FY 2003 will be
used to consolidate capacity building in local governments, NGOS, and
the grassroots community-based organizations. The increased financial
resources raised by NGOs or generated by incentive ecological trust
funds will be marshaled, under the coordination of the CICH, into a
consensual and concerted effort to address key issues related to the
conservation and protection of the PCW. In addition, DA resources are
critical to strengthen its support of ecotourism and co-management for
protected areas as means of securing the long-term ecological and
financial security of the parks. Technical assistance will be provided
to further develop ecotourism opportunities for local communities,
create co-management mechanisms for protected area management and
increase the involvement of the private sector in conservation programs
in the PCW. Specific activities include but are not limited to a
co-management arrangement for one protected area, updating and
completion of management plans for all PCW protected areas, completion
of signage and interpretation plans for all PCW parks, and drafting of a
public relations strategy for the Panama Canal Authority.

**Performance and Results:** The CICH is fully operational and engaging
GOP entities in developing policies for sound environmental management
of the PCW. USAID continued to provide technical assistance and training
aimed at strengthening management and coordination skills of the CICH.
Training of park guards and selected local NGOs was also provided.
Significant progress was made towards the creation of an Environmental
Information Center in the CICH. The approval of the Strategy for the
CICH information center and the subsequent design of a web page to
facilitate data dissemination were important milestones towards the
establishment of this center. Also completed was an assessment of
nature-based microenterprises in the PCW. This assessment provides a
useful tool in guiding the promotion of sound, environmentally friendly
activities as alternatives to current activities that adversely affect
the environment in the PCW. Local authorities have begun to show the
political will to make the hard choices in support of sound
environmental management. As a result, local communities are playing a
proactive role in addressing environmental issues. One community has
already organized a waste disposal service paid for by over 1,000
households, while five other communities are heading in the same
direction. Strategic plans and environmental action plans are already in
place in many of these communities. USAID will initiate technical
assistance and training to develop and implement replicable
community-based solutions to solid and liquid waste management on the
east side of the Panama Canal.

At the end of this program there will be an improved legal and
regulatory environment and practices for the PCW with mechanisms
established for the financing of watershed management activities
supporting increased income-generating opportunities that are friendly
to biodiversity. The CICH will have a much better capacity in the
management, coordination and monitoring of PCW activities safe-guarding
the fresh water resources upon which the canal hydrology depends.
Finally local government and communities will be much more involved in
the decision-making process and sustaining locally environmentally sound
practices.

**Principal Contractors, Grantees or Agencies:** USAID activities are
implemented in partnership with the following prime grantees and
contractors: International Resources Group, which provides assistance
and training to improve the institutional capacity for the management of
the PCW. GreenCom provides assistance in environmental awareness,
education and communication. Management Services International, in
association with local NGOs (including the National Society for Business
and Rural Areas Development and International Center for Environmental
Training) is contributing to improvements in the management and
financial sustainability of local NGOs active in the PCW, as well as
their outreach skills. USAID is also in the process of contracting the
Cooperative Housing Foundation to provide specialized technical
assistance related to local environmental services.

**[PARAGUAY]{.underline}**

No Congressional Budget Justification narrative was prepared for
Improved Management of Protected Areas, 526-002, since no new FY 2002 or
FY 2003 funding was being requested.

**PROGRAM TITLE:** Environment (Pillar: Economic Growth, Agriculture,
and Trade)

**STRATEGIC OBJECTIVE AND NUMBER:** Management of Globally Important
Ecoregions Improved, 526-005

**STATUS:** Continuing

**PLANNED FY 2002 OBLIGATION AND FUNDING SOURCE:** \$1,000,000 (DA)

**PRIOR YEAR UNOBLIGATED AND FUNDING SOURCE:** \$0

**PROPOSED FY 2003 OBLIGATION AND FUNDING SOURCE:** \$1,000,000 (DA)

**INITIAL OBLIGATION:** FY 2001 **ESTIMATED COMPLETION DATE:** FY 2006

**Summary:** The Environment program consists of:

-   technical assistance and training to improve the capacity of
    Paraguayan leaders and non-governmental organizations (NGOs) to
    manage three globally important ecoregions (Pantanal wetlands,
    interior Atlantic rainforest, and the Chaco dry forest); and,

-   technical assistance to develop the necessary policy, legal, and
    financial tools for improved and effective ecological management
    that are integrated with efforts in Argentina, Bolivia, and Brazil.

**Inputs, Outputs and Activities:** *FY 2002 Program:* USAID proposes to
increase planned funding by more than 10% of the amount notified in the
FY 2002 Congressional Budget Justification. Development Assistance (DA)
funds will be used to strengthen the technical capacity and financial
self-sufficiency of local NGOs, better coordinate international efforts
through improved ties to international organizations, develop
environmental leaders at departmental and municipal levels, and continue
a policy dialogue on national environmental issues. Through these
efforts, Paraguayan organizations will be better equipped to manage
three ecologically important regions it shares with its neighbors and
coordinate management efforts with those neighbors.

*Planned FY 2003 Program:* DA funds will be used to continue activities
with local NGOs and local governments with increased emphasis on
developing legislation to promote financial and structural incentives
for ecological management and forest conservation in the three regions.

Performance and Results: Activities under this objective began in late
FY 2001, following the many accomplishments of USAID\'s previous
environment program in Paraguay. The overall impact of this program will
be to reduce environmental destruction. Environmental destruction can
lead to loss of economic opportunity and increased rural poverty, which
are destabilizing factors in Paraguay\'s still fragile democracy. When
Paraguayan leaders are trained, NGOs are strengthened, and the necessary
policy, legal, and financial tools are developed, overall sustainable
management and protection of the globally important ecoregions that
Paraguay shares with its neighbors will be improved. Further development
of an active civil society and local government capacity will also serve
to advance USAID\'s democracy goals in Paraguay.

Success will be measured by the level of adequate and competent
Paraguayan participation in the completion and initial implementation of
regionally-coordinated conservation plans. Funding for implementation of
these plans will come primarily from non-USAID sources. Successful
models, experiences, and lessons learned will be shared at the regional
level. The conservation of biodiversity found in the three regions
Paraguay shares with Argentina, Bolivia, and Brazil depends upon
Paraguay\'s capacity to coordinate its environmental management
activities with those of its neighbors.

Principal Contractors, Grantees, or Agencies: The Nature Conservancy and
the World Wildlife Fund are U.S. prime contractors and grantees. Local
grantees (primes) are the Foundation for the Sustainable Development of
the Chaco Region, the Paraguayan Birding Association, and the
Environmental Law Institute. The Natural Land Trust receives a local
subgrant.

**[PERU]{.underline}**

No Congressional Budget Justification narrative was prepared for
Strengthened Environmental Management to Address Priority Problems,
527-004, since no new FY 2002 or FY 2003 funding was being requested.

**[USAID/CARIBBEAN REGIONAL PROGRAM]{.underline}**

**PROGRAM TITLE:** Improved Environmental Management (Pillar: Economic
Growth, Agriculture, and Trade)

**STRATEGIC OBJECTIVE AND NUMBER:** Improved Environmental Management by
Public and Private Entities, 538-005

**STATUS:** Continuing

**PLANNED FY 2002 OBLIGATION AND FUNDING SOURCE:** \$ 3,100,000 ESF

**PRIOR YEAR UNOBLIGATED AND FUNDING SOURCE:** \$ 0

**PROPOSED FY 2003 OBLIGATION AND FUNDING SOURCE:** \$ 2,500,000 DA

## INITIAL OBLIGATION: FY 2000 ESTIMATED COMPLETION DATE: FY 2004

**Summary:** USAID\'s program to improve environmental management within
the Eastern Caribbean involves technical assistance and training to
facilitate:

-   adoption of best environmental management practices, policies, and
    standards in small hotels;

-   environmental marketing and education awareness; and

-   access to financing for environmental improvements.

**Inputs, Outputs and Activities:** *FY 2002 Program*: Building upon
successful environmental activities that have shown results under
USAID's program in Jamaica, FY 2002 funds will be used to provide
technical assistance to develop protocols for approximately 100
environmental \"walkthroughs\" (audits) for small hoteliers. These
walkthroughs identify ways for small hoteliers to save water, energy,
and materials, thereby reducing operating costs. Instructional coaching
toolkits, training materials (including videos and software), and
training programs featuring best environmental management practices will
be developed. Technical assistance will help establish at least 11
resource centers throughout the Caribbean region that will make
environmental management information available to the small tourism
sector. A marketing system focusing on the \"Caribbean experience\" will
be developed to market a Caribbean brand that promotes small hotels
using sound environmental practices. USAID will also develop a
community-based risk reduction activity that demonstrates the linkages
between sound environmental practices and natural hazard management. It
will also help Caribbean countries implement their national disaster
mitigation and prevention strategies.

*Planned FY 2003 Program:* USAID plans to use FY 2003 resources to: 1)
implement environmental audits to meet policies and standards for
possible green property certification; 2) develop an eco-destination
certification for Dominica; 3) provide technical assistance for the
development of an investment fund for environmental improvements; 4)
provide technical assistance to develop environmental public awareness
programs; and 5) provide technical assistance to develop renewable
energy sources and technologies to reduce environmental damage and
enhance economic growth.

> **Performance and Results:** USAID has made great strides in exposing
> organizations to environmental information. Approximately 25
> environmental walkthroughs were conducted at small hotels, and
> volunteers provided technical assistance to about 15 small hoteliers
> to implement environmental improvements identified by the
> walkthroughs. Environmental information has been disseminated by the
> new USAID-established environmental Resource Center in Dominica, and
> organizations helped review brands and standards for small hotels.
> Some 61 diverse organizations received environmental information,
> including hotels that are adopting best practices in areas such as
> electricity use, equipment selection and maintenance, and
> implementation of policies related to energy conservation.

With the successful completion of the program in 2004, ecosystems that
are vital to tourism and economic diversification will be better
protected. In addition, land-based sources of coastal and marine
pollution will be reduced. The goal is to help improve economic
wellbeing through better-protected critical ecosystems, and the income
generating activities tied to them.

**Principal Contractors, Grantees, or Agencies:** Major implementing
partners under this program include the CARICOM Secretariat, the
Organization of Eastern Caribbean States and its member countries, and
the Organization of American States. The prime contractor is P.A.
Consulting Group, with Caribbean Alliance for Sustainable Tourism as its
subcontractor. Another prime contractor is Oak Ridge National
Laboratories.

**[USAID/CENTRAL AMERICA REGIONAL PROGRAM]{.underline}**

**PROGRAM TITLE:** Regional Environment (Pillar: Economic Growth,
Agriculture, and Trade)

**STRATEGIC OBJECTIVE AND NUMBER:** Improved Environmental Management in
the Meso-American Biological Corridor (MBC), 596-006

**STATUS:** New

**PLANNED FY 2002 OBLIGATION AND FUNDING SOURCE:** \$5,342,000 (DA)

**PRIOR YEAR UNOBLIGATED AND FUNDING SOURCE:** \$0

**PROPOSED FY 2003 OBLIGATION AND FUNDING SOURCE:** \$10,742,000 (DA)

**INITIAL OBLIGATION:** FY 2001 **ESTIMATED COMPLETION DATE:** FY 2007

**Summary:** The USAID Regional Environmental Program for Central
America, known by its Spanish acronym, PROARCA (Phase II), supports
sound environmental management, including disaster mitigation, working
in the following areas:

-   technical assistance, training and program support to improve
    protected area management in the Meso-American Biological Corridor
    (MBC);

-   information dissemination and capacity building to access financial
    resources and expand markets for environmentally sound products and
    services;

-   technical assistance and training to harmonize environmental
    standards and regulations;

-   development of local capacity and promotion of private sector
    participation and alliances for increased use of less-polluting
    technologies by municipalities and the private sector; and

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-   TA and training activities to prevent forest fires, reinforce early
    warning systems and disaster preparedness, and manage key watersheds
    to mitigate disasters and environmental degradation.

**Inputs, Outputs and Activities:** *FY 2002 Program:* USAID will use FY
2002 DA funds to improve environmental management in the MBC. Technical
assistance and financial support will be provided for conservation
policies, development and implementation of business plans, design of a
small grants fund, and establishment of a biodiversity monitoring
database. To widen market access for environmentally sound products and
services, USAID will expand information on certification options and
benefits to producer and service groups. Demand for these products will
be fomented through the creation of internet databases and web linkages.
USAID will help to identify credit programs and opportunities to finance
certification. Sustainable tourism practices will be promoted through
alliances, accreditation, and mapping of tourism operations in targeted
sites. Technical assistance will help identify target markets and
develop marketing strategies for "green" products and ecotourism. In
conjunction with the System for Central American Integration (SICA),
USAID will support the harmonization of regional environmental norms and
support the implementation of international environmental agreements and
conventions. To increase the use of less-polluting technologies, USAID
will finance an assessment of opportunities for addressing pollution
problems and potential sources of financing for pollution reduction
projects.

*Planned FY 2003 Program:* USAID will use FY 2003 DA resources to
continue the above activities. A subgrants program, complementing these
activities, will move into full implementation and build capacity among
Central American NGOs to promote environmentally sound practices.
Expanded cooperation to advance U.S. interests will draw on resources
made available in FY 2003 under the Partnership for Prosperity (PfP)
initiative. In the first year of a five-year regional effort for
mitigation of disasters and environmental degradation, the program will
build on USAID's experience under the post-Mitch Hurricane Disaster
Mitigation program and on Mexico's experience of cooperation with the
U.S. Department of Agriculture's Forest Service and the National Oceanic
and Atmospheric Agency (NOAA). Activities under PfP will strengthen
forest fire prevention, reinforce early warning systems and data
management, assist consolidated vulnerability mapping and preparedness,
and support continued watershed management activities to mitigate
disasters and environmental degradation. In addition to upgrading the
Regional Center for Prevention of Natural Disasters in Central America
(CEPREDENAC) by developing a regional fire prevention plan and enhanced
regional response capacity, work will support Central American
countries' efforts to monitor and protect key watersheds, among these
the Usumacinta border area watershed between Guatemala and Mexico.

**Performance and Results:** This program will begin in 2002, building
on the achievements under PROARCA's Phase I (1997-2001). Upon completion
of the strategy, this objective will have improved the management of
protected areas in the Meso-American Biological Corridor and built
capacity among Central American organizations and businesses to promote
environmentally sound practices and products. Specific targets are being
developed by partners recently awarded contracts under the program.

Over the life of this program, this activity will have an impact on
improving natural resource management and reporting, pollution
reduction, strengthening community management of local resources,
expanding market access for environment-friendly products and services,
and harmonizing norms for environmental impact assessments and
wastewater. Many of these activities will also help Central America
contribute to longer-term reduction of greenhouse gas emissions and
mitigation of global climate change.

**Principal Contractors, Grantees, or Agencies:** Key partners include:
a consortium formed by The Nature Conservancy (prime), the World
Wildlife Foundation (sub), and Rainforest Alliance (sub), for activities
to improve management of protected areas and to promote market access
for environmentally sound products and services; Associates in Rural
Development, Inc., for promotion of less polluting technologies to
municipalities and private sector industries; and a grant to SICA and
the Central American Council for Environmental Development (CCAD) to
strengthen environmental management in the region. The U.S.
Environmental Protection Agency (EPA) is a collaborating agency that
supports work on the legal and regulatory frameworks. A planned
cooperative agreement will provide subgrants to Central American
organizations collaborating under PROARCA.

**[LATIN AMERICA AND THE CARIBBEAN REGIONAL PROGRAM]{.underline}**

No Congressional Budget Justification narrative was prepared for
Protection of Selected LAC Parks and Reserves Important to Conserve the
Hemisphere\'s Biological Diversity, 598-004, since no new FY 2002 or FY
2003 funding was being requested.

**PROGRAM TITLE:** U.S.-LAC Environmental Partnership (Pillar: Economic
Growth, Agriculture, and Trade)

**STRATEGIC OBJECTIVE AND NUMBER:** Environmental Performance of
Targeted LAC Businesses and Communities Improved Through the Promotion
of Replicable Market-based Models, 598-018

**STATUS:** Continuing

**PLANNED FY 2002 OBLIGATION AND FUNDING SOURCE:** \$ 730,000 DA

**PRIOR YEAR UNOBLIGATD AND FUNDING SOURCE:** \$130,000 DA

**PROPOSED FY 2003 OBLIGATION AND FUNDING SOURCE:** \$ 500,000 DA

**INITIAL OBLIGATION:** FY 2000 **ESTIMATED COMPLETION DATE:** FY 2005

**Summary:** The U.S.-Latin America and Caribbean Environmental
Partnership (U.S.-LACEP) program seeks to improve the environmental
performance of targeted Latin American and Caribbean (LAC) businesses
and communities by advancing replicable policy, technology, and finance
mechanisms pertaining to:

-   key trade-related environment issues within the context of the Free
    Trade Area of the Americas;

-   sustainable forestry;

-   industrial cleaner production; and

-   sound water resources management.

**Inputs, Outputs and Activities:** *FY 2002 Program*: In FY 2002, USAID
will continue to support activities that promote replicable market-based
models for improved natural resource management. The trade-environmental
dialogue will be advanced through a program established with the
Organization of American States (OAS), domestic and international
environmental non-governmental organizations (NGOs), and key South
American institutions. This activity addresses environmental issues that
will arise in the proposed Free Trade Area of the Americas (FTAA),
emphasizing substantive research and technical dialogue. It aims to
address, in part, the asymmetry that exists in the hemisphere regarding
the ability to conduct meaningful environmental impact assessments of
the proposed FTAA. The activity has three major components: (1) a small
grants program to NGOs from the region for domestic analyses and
dialogue on trade-environment issues; (2) development of several country
reports to assess the magnitude of environmental impacts associated with
the FTAA; and (3) dissemination of findings through in-country workshops
and publications for wider distribution.

The U.S.-LACEP program will continue to support the adoption of cleaner
production technologies in LAC. Planned activities include: a regional
lessons learned workshop in the Dominican Republic to catalyze
North-South partnerships in support of cleaner production in the
Caribbean; establish a working group and facilitate a workshop to
develop options for a self-sustaining cleaner production fund in Mexico
that draws on resources from the North and South; finalize the
development, testing and application of financial models for the
establishment of revolving loan funds, loan portfolios, and/or loan
guarantee (e.g., Development Credit Authority) funds to support cleaner
production in Peru, Bolivia, and Ecuador; and conduct an assessment of
financing constraints to cleaner production in Central America and
recommend appropriate financial models, integrating the lessons learned
from Andean cleaner production and Caribbean hotel environmental
management systems programs.

To advance sound policies, technologies and practices in natural forest
management, USAID will continue support for the development of technical
guidelines, investment analyses, and stakeholder dialogue. Guidelines
for sustainably harvesting non-timber forest products (NTFP) will be
disseminated to the Brazilian personal care industry, NGOs and other
interested parties. NTFP guidelines will also be made available on the
internet. This activity will result in refined management guidelines for
up to four NTFP products, a plan for private/public partnerships, and a
plan for developing market linkages between community NTFP suppliers and
industry buyers. The U.S.-LACEP program also will assist Meso-American
forestry operations to prepare for and seek certification of their
operations and products.

U.S.-LACEP will identify suitable and replicable management models for
water supply and sanitation services in smaller towns and rural areas to
complement and support the tremendous regional movement towards
decentralization. In FY 2002, the program will focus on identifying
sustainable sanitation options for small towns. A general methodology
that incorporates technical, institutional and financing concerns will
be field tested through three pilot studies, one in each of LAC's
sub-regions.

*Planned FY 2003 Program*: In FY 2003, USAID will provide technical
assistance to: 1) enhance understanding of, and commitment by, LAC
governments to address critical trade-related environmental issues by
continuing the program with the OAS; 2) disseminate the results of the
seven-country forest sector review; 3) continue support for sanitation
interventions in small towns that follow-up on water and sanitation
decentralization activities; 4) develop regulatory frameworks,
addressing financing constraints, and promote the transfer of U.S.
environmental technologies and expertise for cleaner production; 5)
promote best management practices and demonstrate the economic benefits
of hotel environmental management systems, cleaner production and water
use efficiency in industry in targeted countries; and 6) identify market
opportunities for eco-certified products and for the provision of
environmental technologies/services.

**Performance and Results:** In Central America, USAID launched a
program with the World Wildlife Fund to develop a network of producers
to enhance the linkages between international markets and producers of
certified forest products. Further, the preliminary findings and
recommendations of an assessment of USAID-supported natural forest
management programs in seven LAC countries were presented at a workshop
in Bolivia attended by over 70 participants from 12 LAC countries,
including representatives from host country governments, industry, NGOs,
and USAID officers. U.S.-LACEP has demonstrated the business/trade
benefits of industrial cleaner production, introduced cleaner production
policy frameworks, increased industry demand for cleaner production
technologies, and enhanced government commitment to cleaner production.
As examples, the program: 1) leveraged \$1.4 million from the
Inter-American Development Bank (IDB) to support a Clean Production
Policy Framework in Panama; and 2) secured commitment from the World
Bank to support Bolivia's Clean Production Center for \$600,000 in 2002,
and the Swedish and Swiss donor agencies to contribute more funding to
Bolivia's Center. A field methodology was developed for providing
sanitation to small towns.

By the end of the program, the environmental performance of targeted LAC
businesses and communities will be improved through the introduction of
replicable market-based models, some of which are described above. The
adoption of improved policies, technologies and practices, and financing
mechanisms will support environmentally-sound economic and social
development.

**Principal Contractors, Grantees or Agencies:** USAID activities are
implemented by: PA Consultants (prime), Environmental Law Institute
(sub), World Environment Center (sub), Camp Dresser & McKee
International (prime), Training Resources Group (sub), Development
Associates, Inc. (prime), International Resources Group (prime), U.S.
Department of Agriculture (prime), Rainforest Alliance (prime), World
Wildlife Fund (sub), OAS (prime), and the University of Miami:
North-South Center (prime).

**PROGRAM TITLE:** Conservation of Biological Resources (Pillar:
Economic Growth, Agriculture, and Trade)

**STRATEGIC OBJECTIVE AND NUMBER:** Improved Conservation of the
Region's Biological Resources, 598-022

**STATUS:** Continuing

**PLANNED FY 2002 OBLIGATION AND FUNDING SOURCE:** \$ 7,235,000 DA

**PRIOR YEAR UNOBLIGATED AND FUNDING SOURCE:** \$ 47,753 DA

**PROPOSED FY 2003 OBLIGATION AND FUNDING SOURCE:** \$ 4,500,000 DA

**INITIAL OBLIGATION:** FY 2001 **ESTIMATED COMPLETION DATE:** FY 2006

**Summary:** This regional program consists primarily of a mix of
training and technical assistance to support:

-   Parks in Peril 2000: A Conservation Partnership for the Americas
    (PiP 2000);

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-   the Neotropical Raptor Conservation Program; and

-   studies and pilot activities.

In addition to site-based work, PiP 2000 will leverage the application
of sound conservation across multiple sites, help in the development of
national park systems, and develop national, international, and regional
alliances for conservation.

**Inputs, Outputs and Activities:** *FY 2002 Program:* USAID plans to
increase the funds to be obligated during FY 2002 by more than 10% of
the amount notified in the FY 2002 Congressional Budget Justification.
In FY 2002, funds will be used to expand the highly successful
site-based PiP model to include seven additional threatened parks and
reserves in the Latin America and Caribbean (LAC) region and to utilize
the extensive network of sites and partners to leverage conservation
activities across the region. Technical assistance will be provided
for: 1) strengthening and expanding the network of conservation
partners; 2) promoting national and regional systems of conservation
areas, including protected areas, private reserves, and indigenous
territories; and 3) promoting strategic alliances among host countries,
donors, multilateral development banks, and local and international
non-governmental organizations (NGOs) to focus and consolidate efforts
on critical regional conservation needs, such as trans-border ecosystem
management. In addition, funds will be used to support technical
advisors and to help develop an improved understanding of the region's
most critical conservation needs through regional conservation
initiatives such as workshops and special studies.

  -----------------------------------------------------------------------
  SUBMISSION OF THIS PROGRAM DATA SHEET CONSTITUTES FORMAL NOTIFICATION
  OF USAID\'S INTENT TO OBLIGATE FY 2002 RESOURCES FOR THE ACTIVITIES
  DESCRIBED ABOVE.

  -----------------------------------------------------------------------

*Planned FY 2003 Program:* In FY 2003, in addition to continuing the
activities begun in FY 2002, technical assistance will be provided to
expand the PiP model to include an additional four threatened parks and
reserves in the region, with an emphasis on trans-border ecosystems and
marine ecosystems. Funds will also be used for workshops, special
studies, and technical assistance.

**Performance and Results:** Started late in FY 2001, activities under
this objective are proceeding smoothly. Progress will lead to: (1)
increased conservation capacity at selected sites; (2) strengthened
local and national partners for improved conservation; (3) targeted
regional conservation initiatives being strengthened; and (4) innovative
conservation financing mechanisms being tested and adopted. In addition,
this objective will leverage significant and diverse funding sources for
biodiversity conservation in the LAC region through international
conservation organizations (e.g., The Nature Conservancy); universities;
in-country NGOs; national and local governments; local communities; the
Global Environment Facility; World Bank; Inter-American Development
Bank; United Nations Environment Program; U.S. government agencies
(e.g., the Department of Labor); other bilateral donor organization;
U.S. philanthropic organizations; and the private sector.

**Principal Contractors, Grantees or Agencies:** The Nature Conservancy
(prime), World Resources Institute (prime), The Peregrine Fund (prime)
and in-country NGOs (e.g. The Friends of Nature Foundation, Bolivia;
Defenders of Nature, Guatemala; ProNaturaleza, Peru; Pronatura, Mexico)
(subs).