RESILAND: ARMENIA RESILIENT LANDSCAPES PROJECT The Project Development Objective (PDO) are (i) to increase the area under sustainable landscape management in selected locations and (ii) to promote sustainable economic activities to communities in targeted landscapes in Armenia. Note: Disbursement data provided is cumulative and covers disbursement made by the project Agency. 1. The project will implement innovative measures in integrated forest and wetland restoration including rebuilding of fragmented forests and mining site restoration to the benefit of local communities in Armenia. Project sites in Ararat, Lori and Syunik provinces as well as in vicinity of Lake Sevan in Gegharkunik province that were selected based on restoration opportunity and relevance to local communities and will jointly contribute to improved land conditions on 25,800 hectares of land, while acting as a replicable model for scaling-up resilient landscape restoration in other vulnerable rural areas in Armenia. Landscape restoration and sustainable land management practices are a core pillar of Armenia’s Mitigation, Adaptation and Disaster Risk Reduction strategies[1], with estimates suggesting 0.16 percent of GDP at risk of floods alone that could be reduced by NBS[2][3]. The project will furthermore implement measures to support and grow non-timber forest production and infrastructure for ecotourism development, generating sustainable employment and income diversification opportunities in vulnerable communities.  2. The EIRR is calculated at 11.9 percent and the NPV at US$4.87million with a 6 percent discount rate, which proves the project’s overall economic viability. The EIRR is estimated higher for the investment Components 2 and 3 (at 15.3 percent and 13.2 percent, respectively). Direct and indirect economic benefits are expected from multiple sources, of which this analysis quantifies the following direct benefits under conservative assumptions: (i) avoided costs associated with resilience gains (reduced infrastructure damage from mudflows, reduced crop loss from floods, among others); (ii) benefits from increased GVA of non-timber forest production and ecotourism respectively; (iii) benefits from increased carbon sinks. This analysis compares the component and total project costs with their estimated economic benefits for the first 25 years, discounted to 2023. Costs are discounted assuming disbursement will take place during 2024-2028. The NPV remains positive under alternative discount rates (11.2 percent, US$0.37million) and increases significantly when adding the economic benefits of additional carbon sink from the analysis (NPV is US$13.35million at 11.2 percent discount rate and a carbon price of $10/tCO2, EIRR at 32 percent).  3. Development Impact and Poverty Reduction. The project makes significant effort to address the situation of poverty in forest villages, where income is heavily reliant on forest dependent sources. By improving agricultural productivity and diversifying incomes away from forest products, the project is projected to increase incomes of direct beneficiaries by generating additional ecosystem services per farming household.  4. Non-quantifiable and in-direct benefits. In addition to the quantifiable benefits described above, the project is expected to generate other non-quantifiable benefits that will contribute to improving the resilience and well-being of local communities. These include indirect use values that determine the reduced loss of lives, pollution abatement and better water resource regulation, while other non-quantified benefits include the future use of recreational areas, ecotourism and bioenergy, but also benefits of biodiversity preservation.          [1] See NDC 2021-2030 of the Republic of Armenia (2021); National Adaptation Plan of the Republic of Armenia (2021); Disaster Risk Management National Strategy of the Republic of Armenia (2017)      [2] World Bank (2021), Overlooked: Examining the impact of disasters and climate shocks on poverty in the Europe and Central Asia region      [3] In addition, according to the Disaster Risk Management National Strategy of the Republic of Armenia (2017), one third of the country’s territory is located on landslide-prone area and a total of 470,000 people or 15% of the whole population is subject to landslides