Asian Development Bank

POVERTY AND ENVIRONMENT FUND

Annual Report
RSES

2011

Table of Contents I. Introduction...................................................................................................................................3 II. Eight Catalytic Years of the Poverty Environment Fund.............................................................3 III. Outputs of Mainstreaming Environment for Poverty Reduction................................................6 A. Output 1: Environment mainstreaming at the country level ...................................................6 B. Output 2: Subproject implementation....................................................................................10 C. Output 3: Knowledge capture and dissemination ................................................................14 D. Output 4: TA management and administration ....................................................................16 IV. Conclusion................................................................................................................................18 Annex 1: PEP Technical Assistance Completion Report............................................................20 Annex 2: Status of Grant..............................................................................................................23

I.

Introduction

1. This progress report describes the implementation progress and achievements of the Poverty and Environment Fund (PEF) in 2011. The report was prepared by the Environment and Safeguards Division - Regional and Sustainable Development Department (RSES-RSDD). 2. The total contribution committed to PEF stands at around US$8.6 million equivalent US$5.0 million and US$3.6 million from the Governments of Norway and Sweden, respectively. The total amount available is nearly $8.9 million including income from investments, interest earnings and gains or losses from change in value of currency. II. Eight Catalytic Years of the Poverty Environment Fund 3. Accelerated Learning (2004-2008): The Poverty Environment Program (PEP), the first regional technical assistance (RETA) funded under PEF, was approved in 2003 and began implementation in 2004. At the time, ADBs environmental lending was worth $305 million, with seven projects approved with environmental sustainability (ES) as a theme. In addition, shortly before the approval of PEF, a reorganized ADB had just 18 environment specialist positions, including 13 in the five regional departments.1 4. PEP was designed to accelerate learning on poverty-environment linkages by promoting targeted interventions that contribute to poverty reduction and environmental improvement and systematically capturing and disseminating knowledge on poverty-environment relationships. With grant inputs of $3.92 million, PEP primarily focused on implementing subprojects in three thematic areas (i.e. sustainable use of natural resources, reduction of air and water pollution, and vulnerability reduction), establishing the Poverty Environment (PE) Net website, and capturing and disseminating knowledge on poverty-environment linkages. Subprojects: The implementation of 15 subprojects (12 pilot interventions, 2 analytical studies, and 1 information dissemination) showed how local actions can lead to sustainable benefits in poverty reduction, while simultaneously improving the environment. They also provided opportunities to demonstrate that community-based environmental management approaches can be scaled-up to influence the mainstreaming of environmental aspects into ADBs business processes. Knowledge products: The publication, Nature and Nurture: Poverty and Environment in Asia and the Pacific, compiled and synthesized the experience and lessons learned from subproject implementation through the presentation of case studies. A set of documentary films on selected PEP subprojects was also prepared to highlight the important lessons from PEP subprojects in addressing poverty and environment issues at the local level. Support to the Poverty Environment Partnership: The PE Net website (www.povertyenvironment.net) was established to compile promising practices from around the world and helped support the Poverty Environment Partnerships2 work on

1 2

ADB. 2002, November. Environment Policy. Manila.

The Poverty Environment Partnership was established in 2001 as an informal network of practitioners from development agencies and nongovernment organizations working on poverty reduction and the environment. The

knowledge management and exchange of information. In 2008, PEP also co-organized the 13th Poverty Environment Partnership Meeting in ADB, where lessons learned from the subprojects were shared. 5. The implementation of PEP coincided with, and contributed to, a period of an increased emphasis on environment at ADB. By December 2008, when PEP was completed3 (see Annex 1 for the PEP Technical Assistance Completion Report), environmental lending had risen to $2.6 billion (a nearly 9x increase since 2004), with 26 loans and grants having an ES focus (a 4x increase). 6. Environmental Mainstreaming (2009-2011): The second RETA being implemented under PEF is Mainstreaming Environment for Poverty Reduction (MEPR). With the groundwork of establishing poverty-environment linkages already laid by PEP, this second phase expanded the scope of activities. Most notably, it opened new opportunities for mainstreaming environmental considerations into ADB operations and business processes, in addition to continued support for subprojects and knowledge development on poverty-environment linkages. Environment mainstreaming: As a new feature, the RETA funded locally-recruited consultants in six of the seven participating resident missions (RMs) 4 to add upstream environmental capacity that might otherwise be largely or completely lacking in these RMs. 5 Over the past three years, these specialists have supported the implementation, monitoring and evaluation of loan and TA projects in their respective countries, assisted in the preparation of country program reports, and enhanced environmental safeguard capacity at the country level. Subprojects: The RETA adopted an improved process of approval and implementation of subprojects and gave more flexibility and ownership of subprojects to the RMs. Since the approval of the new Guidelines for Subprojects in October 2009, over 30 proposals have been reviewed, with 15 eventually selected for implementation. Together, these subprojects are worth nearly $3.3 million, with about $2.6 million of MEPR funding (about $1 million of which are for subprojects developed and implemented by the RMs). Knowledge capture and dissemination. The PE Net website that was established under the TA not only continues to serve as a medium of communication among the members of the Poverty Environment Partnership, it has also become a primary knowledge repository of poverty-environment documents globally. MEPR is also supporting eight analytical studies on poverty-environmental linkages. A knowledge product will be developed at the end of the RETA that will synthesize lessons learned.

7. While MEPR has been advancing ADBs environment agenda over the past three years, ADBs overall environment program has grown substantially. The approval of ADBs Long-Term Strategic Framework (Strategy 2020) in April 2008 further demonstrated
Partnership was set up to improve coordination and collaboration among organizations working on poverty reduction and the environment, build a consensus on poverty-environment linkages, and review the activities of development agencies to build on common themes and address gaps in knowledge.
3 4

This refers to the physical completion of the RETA. The RETA was financially closed in March 2010.

These resident missions are: Bangladesh (BRM), Lao PDR (LRM), Mongolia (MNRM), Pakistan (PRM), Peoples Republic of China (PRCM), and Viet Nam (VRM). The resident mission in India (INRM) already has an Environment Specialist on board as a regular ADB staff.
5

Two of these environment specialists have since become staff, one in ADB headquarters and the other in the Bangladesh RM.

ADBs growing recognition of the linkages between environmental sustainability and poverty. Strategy 2020 identified environmentally sustainable growth as one of the main complementary development agendas of ADB and established the environment as one of the key operational areas. As a clear indication of ADBs emphasis on environment, lending for environmental projects has risen steadily from 2008 onwards, reaching record levels in 2011 (see paragraph 16 below). 8. Along with increased lending levels for environment projects, more environment specialists were added to ADB, along with increased recognition of the value of placing environment specialists in the RMs (a trend supported by MEPR). In July 2009, ADB approved its Safeguard Policy Statement, which indicates that, where appropriate, priority to increase staff capacity can be given to RMs. 6 In 2011, the number of environment specialists throughout ADB rose to 45 professionals, up from 34 in 2009, 7 with five of these stationed in different RMs. 9. Scaling Up (2012-2020): Looking ahead, ADB will continue to pursue the objectives established under Strategy 2020 reducing poverty in the region while promoting environmentally sustainable growth, including meeting the climate change challenge. The recent publication, Environment Program: Greening Growth in Asia and the Pacific, presents a snapshot of the ADBs environmental strategies, programs, initiatives, and partnerships, and also previews ADBs strategies to strengthen its operational emphasis on the environment, including climate change, that would help realize green growth in Asia and the Pacific. 10. In further pursuit of this agenda, ADB is in the process of finalizing its Environment Operational Directions (EOD) for 2012-2020, which will provide ADB staff with an operational framework that can help guide the development of country partnership strategies, investment projects and associated technical assistance activities.8 11. In this overall effort, ADB will draw on its extensive experience in the energy, transport, urban, water, agriculture and natural resources sectors, to go further in helping its developing member countries (DMCs) shift toward green growth and more resilient development,9 promote integrated approaches to environmental challenges, and develop or strengthen regional programs and platforms. ADBs new publication with UNESCAP and UNEP, Green Growth, Resources, and Resilience provides valuable guidance to policymakers and other stakeholders on how to make such a shift by bringing economic growth strategies in closer alignment with the objective of sustainable development. This green growth agenda is gaining significant momentum in the leadup to the United Nations Conference on Sustainable Development (or Rio +20). 12. To meet the needs of DMCs, including trillions of dollars required in the region for new green investments,10 there is now a need for an upscaling phase to expand activities that will promote green growth, including addressing climate change, across the region. Addi6 7

ADB. 2009. Safeguard Policy Statement. Manila. Ibid.

ADB operations on environment will be guided by three mutually-supportive operational directions: (i) promoting transitions to sustainable infrastructure; (ii) improving natural resource management and maintaining ecosystem integrity; and (iii) building sound environmental governance and management capacities (cross-cutting).
9

One of the themes of the upcoming (June 20-22, 2012) United Nations Conference on Sustainable Development (Rio+20) is a green economy in the context of sustainable development and poverty eradication.

tional resources are in strong demand from DMCs to meet these challenges, as shown by an increasing number of requests from regional departments and resident missions.

III.

Outputs of Mainstreaming Environment for Poverty Reduction

13. MEPR has four main outputs, as follows: (i) increased environment capacity in resident missions (to promote environment mainstreaming); (ii) subproject interventions supporting poverty reduction and improvement in living conditions are successfully implemented; (iii) knowledge on poverty-environment linkages captured and disseminated; and (iv) adequate management and administration of the TA is in place. Each of these outputs are discussed in the subsections below.

A. Output 1: Environment mainstreaming at the country level

14. As shown in Table 1, MEPR is easily meeting its targets for increasing environmental capacity in RMs through increased environmental mainstreaming. In 2011, the MEPR-funded environmental specialists based in the RMs continued their work in promoting environmental mainstreaming. More information on their work is presented below.
Table 1: Performance Targets for MEPR Output 1 Performance Targets/Indicators At least 20% annual increase in amount and number of projects with environmental objectives or elements. Status and MEPR Support In 2011, ADB's reached its highest level of projects with environmental sustainability as a theme (both in terms of number of projects and amount). The proportion of such projects to ADBs total lending portfolio was 43% from 2009 to 2011, easily surpassing its 3-year rolling average target of 25%. MEPR will continue to provide catalytic support in developing environment-related projects to ensure further increases. From 2009 to 2014, CPSs will be updated for 34 out of 40 DMCs (85%). All eight CPSs that were finalized in 2011 included clear environment objectives.11 MEPR has contacted the team leaders of all 13 CPSs that will be developed in 2012.12 Of these, MEPR will provide assistance to at least 4 to ensure that environmental considerations are fully integrated. For the others, we have been assured that environmental objectives will be included. The environment specialists in the RMs supported five such activities in 2011, as follows: 1) High-Level International Seminar on Climate Change and Green LowCarbon Development (PRC) 2) Earth Temple Forum (PRC) 3) South-South Dialogue on Land Use Planning (MNRM specialist attended conference in Namibia)

Environment objectives are integrated in country partnership strategies (CPS) and CPS update of at least 50% DMCs by 2015.

One or two environment training/capacity building activities are conducted for environment agencies.

10

About two-thirds of the $8 trillion needed for infrastructure in the region between 2010 and 2020 will be in the form of new investment, such as green buildings, transport systems and other sustainable infrastructure.
11

CPSs were prepared for the following DMCs in 2011: Bangladesh, Cambodia, Lao PDR, Malaysia, Maldives, Philippines, Sri Lanka, and Timor-Leste.
12

In 2012, CPSs will be developed or finalized for the following DMCs: Armenia, Bhutan, PRC, Kazakhstan, Kyrgyz Republic, Marshall, Nepal, Samoa, Solomon Islands, Thailand, Tonga, Uzbekistan, and Viet Nam.

4) Damage Needs Assessment (Pakistan) 5) Training on Environmental Safeguard and EMP Implementation Monitoring (Viet Nam)

15. Supporting loan and technical assistance projects. In 2011, the environment specialists recruited and funded under MEPR continued to support the implementation, monitoring and evaluation of various loan and TA projects in their respective countries. Their support included the following: The BRM Environment Specialist (ADB staff) supported the implementation of various technical assistance projects, including Supporting Implementation of Bangladesh Climate Change Strategy and Action Plan under the Bangladesh Pilot Program for Climate Resilience (PPCR). He also supported the processing of other investment projects under PPCR and administered a MEPR-funded subproject (see below). The PRCM Environment Specialist took part in a dozen loan review missions, where he helped identify current or potential adverse environmental issues and provided suggestions on how these can be addressed. He also participated in project completion missions, where he evaluated the project environmental safeguard performance and provided environment-related inputs to the project completion reports. The MNRM Environment Specialist helped administer two MEPR subprojects (see below) and also supported other loan and TA projects by participating in consultation, factfinding, inception, and review missions for investments in the energy, urban development, health sectors. The Environment Specialist in PRM participated in 12 fact-finding, inception, and loan review missions, where she provided environment-related inputs to the mission leader. The VRM Environment Specialist has been assisting in the administration of two MEPR subprojects in Viet Nam (see below). He also participated in nine loan review missions and assisted in the implementation of two other TA projects.

16. These efforts are part of a marked upward trend in ADB projects with environmental sustainability (ES) as a theme (Figure 1). Fifty-nine projects13 with ES as a theme, totaling about $7 billion, were approved in 2011. This number represents 51% of the total financing and 50% of the total number of projects in 2011. Compared with 2010, there was an increase of 11% in the number of projects and an increase of 50% in the amount financing. ADB's 2011 record of projects with ES as a theme also pushed up the proportion of such projects to 43% (of ADBs total lending portfolio) from 2009 to 2011, nearly doubling its 3-year rolling average target of 25%.14 17. In addition, 135 technical assistance projects, totaling about $182 million, and 16 grants totaling more than $160 million, were approved with ES as a theme in 2011. Technical assistance projects continued to be used for capacity development of countries and
13

Projects include loans funded by ADB Ordinary Capital Resources (OCR) and the Asian Development Fund (ADF), and ADF-financed grants.
14

A project classification system guides ADB project team leaders in classifying projects with ES as a theme. The classification system allows as many as four themes to be selected based on their importance to the total project impact.

subregions, project preparation, and policy and advisory activities. Projects have also greatly helped in intensifying the efforts of DMCs to address climate change. 18. It is worth noting that, of the 59 projects approved in 2011 with ES as a theme, 40 were developed in the seven RMs that are part of MEPR (14 in PRC; 14 in India; 4 in Bangladesh; 4 in Viet Nam; 2 in Lao PDR; and 2 in Pakistan). In total, projects approved in these seven RMs accounted for about 68% of the total ES-themed projects in 2011. In 2012, the Environment Specialists will continue to stay busy, providing support to develop loan and TA projects and ensuring that existing ADB projects conform to ADBs environmental safeguards policies and requirements.
F ure1: P ig rojects with E nvironm ta S ta bility a a T em en l us ina s h e: Am nt a Num of P ou nd ber rojects (2003-2011)

8000 7000 6000 5000

70

60

50

40 4000 30 3000 2000 1000 0 2003 2004 2005 2006 2007

Yea r

$ ( t n u o m A ) l i

20

10

0 2008 2009 2010 2011

Amount

Number

* Source: ADB Strategy and Policy Department.

19. Promoting country environmental analysis. In 2011, ADB stepped up its efforts under MEPR to strengthen the quality of environmental inputs into the Country Partnership Strategy (CPS) process, as well as sector and thematic assessments. This is an important feature of the RETA given that Country Environmental Analyses (CEAs) 15 are now undertaken independently from the development of CPSs.16 Notable accomplishments included the following:

15

Although no longer required under ADB guidelines, Country Environmental Analyses (CEAs) can still serve as important inputs into the preparation of CPSs and Country Operations Business Plans (COBPs). CEAs provide valuable information on the environmental challenges, needs, and opportunities in the DMCs, thereby helping them prioritize environmentally sustainable development.
16

Under new streamlined guidelines for preparing CPS, information and knowledge generation (including thematic, country and sector information) will be undertaken independently from the CPS process. This will help ensure that various assessments and analytical studies, such as CEAs, are undertaken at a time convenient and appropriate for the Government and other development partners.

s t c j P f o r e b m u N

A CEA for the Philippines was finalized in March 2011 through funding from MEPR. The CEA served as the basis for the Environment Assessment Summary in the Philippines CPS (2011-2016). The Philippines CPS identified environment as one of three focal areas for ADB operations, with investments focusing on strengthening ecosystem functions and the preservation of natural resource, enhancing climate change adaptation and disaster risk management, and improving sustainable environmental infrastructure in urban areas.17 A CEA for the Peoples Republic of China (PRC) is being finalized and will be launched in June 2012. MEPR provided funding to support the publication of the CEA and a consultation workshop, held on 24-25 March 2011 in Qingdao. The workshop was attended by representatives from various PRC government ministries, civic sector, and the academe, who discussed the final draft of the CEA. In addition, the PRCM Environment Specialist assisted in the preparation of the CEA by coordinating with relevant ministries and experts and also helped organize the workshop. The BRM Environment Specialist provided inputs to the Bangladesh Environment Assessment, which was incorporated into the Bangladesh CPS for 2011-2015 and the Country Operations Business Plan (COBP). In 2011, MEPR also developed new streamlined guidance for the CPS process in the form of the Country Environment Note (CEN).18 As a result of these efforts, MEPR received, reviewed, and approved two proposals from the Central West Asia Department (Armenia and Azerbaijan), one proposal from Southeast Asia Department (Indonesia), and one proposal from the Nepal RM requesting assistance in developing CENs, with a view to integration into the CPS preparation.

20. In 2012, it is expected that there will be a continued demand for MEPR support for the preparation of focused CENs. A number of regional departments have expressed interest in availing of MEPR resources for DMCs that will begin CPS preparation in late 2012. MEPR will continue to actively seek proposals for the development of CENs or CEAs. 21. Improving environmental safeguard capacity. Through project review and supervision, ADB ensures that borrowers implement safeguard plans and meet ADBs safeguard requirements by helping them to strengthen their safeguard systems and develop the capacity to manage environmental and social risks. The environment specialists help improve environmental safeguard capacity as follows: The Environment Specialist in BRM assisted in the implementation and monitoring of environmental and climate change components of TAs and loans in the following sectors: agriculture and natural resources, water, urban, transport, and energy. PRCM Environment Specialist reviewed 16 environmental monitoring reports (EMR), and the environmental management plans (EMP) of subprojects under a loan project on soil conservation and rural development. The Environment Specialist in MNRM conducted reviews of subprojects EMRs for a loan and a grant project.

17

ADB. 2011. Country Partnership Strategy: Philippines, 2011-2016. Manila The Country Environment Note (CEN) is a succinct analytical document prepared as part of the CPS process that reflects ADBs priorities and promotes logical integration of environmental interventions into the CPS program. After preparation of the CEN, it should be discussed as part of the regular Country Consultations and then finalized during the preparation of the first and second drafts of the CPS.
18

PRM Environment Specialist conducted orientations and briefings on ADB environmental safeguards to members of project teams of loan projects in Pakistan, reviewed EMRs and EMPs for different loan projects, and assisted in the finalization of other environmental documents including environmental categorization and Initial Environmental Examination (IEE) reports. VRM Environment Specialist conducted a training course on ADB environmental safeguard policy under ADB Safeguard Policy Statement 2009, reviewed EMRs and IEE reports, and provided inputs to the environmental categorization of loan projects. B. Output 2: Subproject implementation

22. Through the implementation of subprojects, MEPR promotes targeted interventions that improve the environment and contribute to poverty reduction through the provision of funding for pilot interventions and targeted analytical studies. 23. As shown in Table 2 below, MEPR will surpass the original target of implementing 13 subprojects, as 15 have already been approved. Together, these subprojects are worth nearly $3.3 million, with about $2.6 million of MEPR funding. The remaining amount, about $700,000, will come from partner contributions, in cash and/or in kind. See Table 3 for a more descriptive overview of the approved subprojects.
Table 2: Performance Targets for MEPR Output 2 Performance Targets/Indicators At least 13 subprojects are successfully implemented. At least 50% of the pilot interventions show improvements in the living conditions or result in at least 15% increase in income of target beneficiaries. Status and MEPR Support Fifteen subprojects have been approved. MEPR supports proposal development and provides administrative support during implementation. Pilots have been selected that have sustainable project benefits and demonstrate impacts on poverty reduction and/or improvement in quality of life.

At least 50% of the analytical studies are Studies have been selected that provide useful guidance for cited as useful references in related policies environmentally sustainable planning, programming, and or projects project implementation. At least 50% of successful environmental Only subprojects that have operational relevance and have intervention approaches ready for upscaling the potential for upscaling/replication have been selected. and integration into ADB technical assistance or loan portfolio, or taken up by governments by 2012.

24. By category: To implement these subprojects, a total of $3.36 million is available for regional departments and RMs. The six regional departments 19 are provided an allocation of $350,000 each (for so-called Category 1 subprojects), while the seven participating RMs20 are provided an allocation of $180,000 each (for Category 2 subprojects). Of the 15 approved subprojects, there are nine Category 1 subprojects worth about $1,700,000 and six Category 2 subprojects worth $900,000.
19

Central and West Asia Department (CWRD), East Asia Department (EARD), Pacific Department (PARD), Regional and Sustainable Development Department (RSDD), South Asia Department (SARD), Southeast Asia Department (SERD) 20 See Footnote 4.

10

25. By thematic area: The subprojects can also be classified by thematic areas as follows: a) Protection, conservation, and sustainable use of natural resources and ecosystem services to maintain the livelihoods of the poor (nine subprojects); b) Reduction of air and water pollution and waste that directly impacts the health and productivity of the poor (three subprojects); and c) Reduction of vulnerability to natural hazards and disaster prevention (three subprojects). Table 3: MEPR Subprojects
Title Classification Description Completed projects Improving grassland and water management with participation of local community in degraded areas Pilot intervention; Category 2 (Mongolia); Theme: Natural resources The objective of this subproject was to implement a comprehensive grassland management plan in the Gobi region of Mongolia. Participatory solutions were presented to help improve the environmental conditions and socio-economic well-being of the communities in the project area of Bayanjargalan district of Dundgovi province. The subproject achieved all of its planned outputs within 10 months of implementation. This included conducting a baseline survey of pasture resources, the results of which will be used by decision-makers in pasture planning. A comprehensive grassland management plan for pasture and water use was developed with the cooperation and participation of the local communities. To build capacity for development and implementation of the plan, trainings for local land and environmental officers and communities were organized. Awareness building activities for the herders were also conducted to encourage their involvement and participation. This subproject aimed to build support and partnerships for the Coral Triangle Initiative by highlighting the value of coral reefs and other coastal and marine ecosystem in building climate change resilience and supporting livelihoods and cultures in the region. To achieve this, a unique knowledge product The Coral Triangle was developed. The book was launched in two high-profile events. On October 2011, the first launch was held in Jakarta, Indonesia during the CTI 7th Senior Officials Meeting and Ministerial Meeting. A second launch was held in Washington, D.C. USA on November 2011 during the Global Environment Facility (GEF) Council Meeting. This subproject was designed to integrate poverty-environment indicators into city policies in Ulaanbaatar. This was achieved by developing a Poverty-Environment Mapping tool and a web geographic information systems resource application that distributes spatial data to various users through a web browser (www.ubgeodata.mn). The tool, which can be applied throughout Mongolia, contains urban development, socioeconomic, and environmental data for the city of Ulaanbaatar. The spatial information can also aid ADB in selecting areas for new projects and investments in the city.

Capturing biological and cultural diversity in the Coral Triangle

Analytical study; Category 1 (RSDD); Theme: Natural resources

Povertyenvironment mapping to support decisionmaking

Pilot intervention; Category 2 (Mongolia); Theme: Natural resources

Implementation to be completed by December 2012 Testing effective models for governance and implementation of REDD+ Pilot intervention; Category 1 (PARD/ Solomon Islands); Theme: Natural resources This subproject aims to enable forest-dependent communities to participate in a Reducing Emissions from Deforestation and Forest Degradation (REDD+) demonstration activity by developing tools for education, engagement, and capacity building that will be piloted through practical demonstration activities. Beginning in April 2011, a climate change and REDD+ education program was developed, followed in October by a detailed analysis of relevant land, property, forestry, and incorporation laws in Solomon Islands. Field work on defining carbon market strategy options

11

for the community then commenced in November 2011. Learning outcomes will also be developed, as part of a climate change/REDD+ education toolkit, including an animated film. Strategies for pro-poor adaptation to climate change in small island communities Analytical study; Category 1 (PARD/Fiji and Solomon Islands); Theme: Vulnerability reduction The subproject aims to develop a strategic framework for targeted climate change adaptation measures in two countries to help them sustain their livelihood and provide guidelines for upscaling pro-poor climate change adaptation measures in other Pacific countries. In early 2011, participatory poverty and environment assessments and field surveys were conducted in select communities in the two target countries Findings were used to develop a strategic framework for climate resilience investment and capacity building in small island communities. In November 2011, the draft strategic framework was presented in participatory community and national consultations with stakeholders in the two countries. This subproject is producing the study entitled Ecological Footprint and Natural Capital in the Asia and Pacific Region. The publication will analyze the current demand for natural resources in the region and present examples of strategies that promote the creation of wealth and alleviation of poverty through more sustainable management of the natural capital of the region. The report was prepared by the implementing agency, WWF. It will be published in May 2012 in time for the UN Conference for Sustainable Development (Rio+20) in June. This project is piloting a model to reduce the disaster risk posed by the climate-induced extreme weather events and other natural disasters and improve the livelihood and food security of the vulnerable population. The subproject is being implemented in four rural villages in Satkhira, one of the most climate vulnerable coastal districts in Bangladesh. After the preparation of a climate vulnerability map and development of a baseline survey of the target communities, the subproject implemented pilot community-based adaptation activities and conducted capacity-building with the local communities to cope with adverse climate. The subproject aims to implement a rapid integrated wetland ecosystem/biodiversity, livelihood and economic assessments, identify key issues, and propose preliminary innovative ecosystem finance options. Results of the rapid assessments have been presented and discussed with local government officials, and the preliminary reports of the study were disseminated during the International Conference on Eco-Compensation in Jiangxi Province in November 2011. The study identified eco-compensation as a policy tool to encourage the engagement of local communities in natural resources management and the paper presented during the conference is being finalized. This subprojects main objective is to reduce environmental pollution in Viet Nam by improving existing environmental legislation as well as its enforcement and application. At the start of implementation, a nationwide survey was conducted to assess the impact and status of implementation of current environmental laws and wastewater fee policies. The results of the study were consolidated in a report which was reviewed by relevant government agencies and ADB. The report also contains recommendations for improving the existing system for wastewater collection charging.

Asia Pacific Living Planet Report

Analytical study; Category 1 (RSDD); Theme: Natural resources

Community based adaptation in vulnerable coastal areas

Pilot intervention; Category 2 (Bangladesh); Theme: Vulnerability reduction

Developing a framework for wetland ecocompensation mechanism in JiangsuYancheng coastal wetlands Development of economic tools for water pollution control to improve the livelihood of the poor

Analytical study; Category 1 (EARD/PRC); Theme: Natural resources

Analytical study; Category 2 (Viet Nam); Theme: Pollution and health

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Calculating carbon benefits from improved land and water resource management

Pilot intervention; Category 2 (PRC); Theme: Natural resources

The objective of this subproject is to develop methodologies to calculate the carbon benefits from improved land management practices in Ningxia. The calculation will enable potential project financiers or managers to assess a projects impacts more effectively and scientifically. Development of these methods may eventually allow poor farmers to obtain financial support for implementing improved land and water management practices, in Ningxia and other dryland irrigated agriculture areas in the PRC. At the end of the subproject, one key output will be the presentation of a feasible carbon finance project based on the adoption of improved land and water management practices in viticulture in Ningxia.

Implementation delayed Air quality interventions: improving air quality monitoring systems in Asian cities Analytical study; Category 1 (RSDD); Pollution and health This subproject aims to contribute to improving the availability and reliability of air quality data in Asian cities to assist policymakers in effective policy and investment decision-making, policy and project impacts monitoring, and communicating to the public on the status of air pollution. The study will conduct benchmarking for Asian cities according to ambient air quality levels, assess technical soundness of air quality monitoring systems of selected cities with the highest and lowest air quality scores, establish twinning arrangements between cities with good air quality levels and monitoring systems and cities that can learn from them on air quality monitoring and management. Status: This project has experienced delays in start-up due to contracting issues. Its expected implementation period is set at 14 months. Recruitment of consultants is ongoing. This subproject aims to support the improvement of sanitation facilities and sewerage systems for selected communities in Colombo, Sri Lanka. Subproject activities include the construction of toilets in individual households and sewerage systems for underserved urban settlements. The subproject will also support capacity building activities for the community members to construct and maintain the new facilities. Status: The subproject has experienced a delay in commencing implementation due to contracting issues. We are currently awaiting finalization of the letter of agreement This study aims to mainstream environment factors in policies and poverty reduction strategies in Pakistan through the identification of povertyenvironment linkages and indicators in some of the main ecosystem types of the country. The results from the study will also guide environmentally sustainable development planning and provide facts and figures for evidence-based policy making. Status: Government approval of the subproject in Pakistan was held up because the focal point for MEPR activities in the country transferred to the Ministry of National Disaster Management from the Ministry of Environment in November 2011. The subproject is now pending endorsement of the current government focal point and is scheduled for a 16-month implementation period. This subproject aims to develop and pilot livelihood improvement and poverty reduction activities that will be implemented as part of a proposed ADB loan project. Skills development will be aimed at improving on-farm

Piloting pro-poor and genderresponsive sanitation options in under-served urban settlements in Colombo Povertyenvironment analysis for ecosystems; integration of indicators in policy

Pilot intervention; Category 2 (Sri Lanka); Theme: Pollution and health

Analytical study; Category 2 (Pakistan); Theme: Natural resources

Shaanxi Weinan Luyanghu integrated saline

Pilot intervention; Category 1

13

and alkaline land management

(EARD/PRC); Theme: Natural resources

livelihoods through improved technical skills and enhancing employability and self-employment in off-farm field, primarily through provision of vocational training in areas such as ecotourism and other services that will benefit from improved environmental conditions in the degraded areas. Status: The government of PRC's approval process for the subproject

has taken longer than expected and delayed the recruitment process.
Recruitment of consultants is now ongoing. Support for the national roll-out of payments for forest environmental services and benefit sharing mechanisms Analytical study; Category 1 (SERD/Viet Nam); Theme: Natural resources The subproject aims to expand existing benefit sharing mechanisms in Quang Nam province to distribute payments for ecosystem services in the A Vuong and Song Bung IV hydropower investment areas. The subproject will also support the development of a knowledge product that demonstrates how to value ecosystem services and how to design a system that will generate revenues through their maintenance, provision and improvement. Status: Government endorsement of the subproject has taken a long

time to ensure coordination among different government agencies. Recruitment of consultants is now ongoing.

26. By type: Seven of the 15 subprojects are pilot interventions, which were chosen to demonstrate potential direct and relevant impacts on poverty reduction and/or improvement in quality of life. These interventions should also have potential for upscaling or replication and should use participatory approaches with strong collaboration among stakeholders. Eight analytical studies were also selected to enhance the analytical basis for policy dialogue on poverty-environment linkages, and raise awareness and build capacity when such linkages are identified. 27. By status: Three of the 15 subprojects have already been completed, while implementation is ongoing for seven subprojects. Implementation has been delayed for five of the approved subprojects. For these subprojects, government endorsement and contracting issues have slowed down the process of implementation. C. Output 3: Knowledge capture and dissemination 28. As part of an overall effort at ADB to promote knowledge management, MEPR seeks to capture and disseminate knowledge on poverty-environment linkages. Table 4 shows that the RETA is doing quite well in delivering on this output.
Table 4: Performance Targets for MEPR Output 3 Performance Targets/Indicators At least five knowledge products (KPs) are prepared Status and MEPR Support Eight analytical studies are being developed under MEPR. In addition, towards the end of the TA, a final knowledge product will synthesize lessons learned.

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At least 1,000 additional documents and articles are uploaded on the Poverty Environment Net (PE Net). 20% increase in number of hits and visits annually. At least one regional workshop is conducted to share lessons learned.

By the end of 2011, 2,175 documents had been listed in the index. Articles and documents are being uploaded regularly. PE Nets pages are being read at a rate of about 3,500 per day, up from 2,000 per day last year. PE Net is continuously maintained and updated. In 2011, MEPR supported the 16th PEP meeting. In 2012, MEPR will support the 17th PEP meeting. A final regional workshop will be conduced at the end of the RETA.

29. Poverty Environment Net. The website is maintaining its regular upload schedule of poverty-environment documents. As of January 2012, 2,175 documents have been listed in the index. These cover analytical studies, news articles, press releases, brochures, fact sheets, project papers, and other types of poverty-environment related knowledge. The website also features embedded rich media content, such as streaming video (usually via Youtube), presentation displays via Slideshare, and document previews through Scribd. The PE net site has also begun to include in its index relevant Facebook pages created by PEP partners and other agencies. 30. PE Net's pages are being read at a rate of about 3,500 per day (on average, visitors read nearly 5 pages per visit). From January to December 2011, the site received an average of 22,500 visits per month. The most visits came from the following locations: United States, Philippines, India, United Kingdom, Australia, Canada, Kenya, the Netherlands, and Tanzania. Based on Google rankings, the site is still one of the top results when searching for the relevant keyphrase "poverty environment." Relevance of site content to search engines is still a significant factor in how documents are uploaded, as nearly 80% of the site's traffic comes from keyword searches on Google, Yahoo and Bing. 31. The site extensively covered the 16th Poverty Environment Partnership (PEP) meeting in Vienna, Austria in February 2011, providing registration info and background papers, posting updates, and uploading session materials and presentations from the event. The site will continue to be used for future PEP meetings, including the 17th PEP meeting in India in February 2012. 32. Since the website caters to a global audience, ADB believes that it is of vital importance that it be maintained even beyond the life of the program. Therefore, in 2012, ADB will explore possible options to sustain it, including cooperating with other bilateral agencies and the PEP. 33. Conferences and workshops. MEPR provided support for the Catalyzing Sustainable Urban Transport and Development in Asia workshop held on 14-15 February 2011. The workshop brought together senior level representatives from urban, environment and transport ministries from Bangladesh, PRC, Indonesia, Mongolia, Philippines, and Sri Lanka to discuss opportunities to develop sustainable urban transport and development in Asian cities. It was also organized with a view of developing a new Asian Sustainable Transport and Urban Development Program (ASTUD).21
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Submitted for Global Environment Facility (GEF) funding worth $13.6 million in September 2011, ASTUD has been given the GEF Council Approval in November 2011. Pending GEF CEO Endorsement, the five-year program will enable policy environment and mechanisms created for technology transfer, promote the adoption and

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34. The national Environment Specialists stationed in the RMs also organized a number of environment-related workshops and seminars, with some actively assisting in preparing or giving presentations in different events. This includes workshops on environmental safeguards and on climate change mitigation and adaptation opportunities. The events organized and participated in by the Environment Specialists are as follows: The PRCM Environment Specialist assisted and worked closely with ADB staff to prepare a presentation relevant to ADB climate change issues for the High-Level International Seminar on Climate Change and Green Low-Carbon Development organized by the National Development and Reform Commission. The seminar was held in Beijing on 22-24 June 2011. He also participated in the Earth Temple Forum organized by the city government of Beijing on 25-26 June 2011. The MNRM Environment Specialist was invited to present during the South-South Dialogue on Land Use Planning held in Windhoek, Namibia on 20-24 June 2011. Her presentation entitled Mining Development, Climate Change and the Need for More Comprehensive Land Use Planning/Land Governance highlighted one of the MEPR subprojects in Mongolia, Improving Grassland and Water Management with Participation of Local Community in Degraded Area. The PRM Environment Specialist participated as a member of the Environment Sector team during the kick-off meeting of the ADB and World Banks Damage Needs Assessment for the 2011 Pakistan floods (on 18 October). She also conducted an orientation on ADB Safeguard Policy Statement (SPS) for project teams of various approved loans from May to October 2011. The VRM Environment Specialist conducted a Training on Environmental Safeguard and EMP Implementation Monitoring for the approved Integrated Rural Development Sector Project in the Central Provinces of Viet Nam. The training was designed to strengthen the capacity of the project management units to carry out EMP monitoring for the project.

35. To exchange knowledge about poverty and environment linkages, as well as lessons learned from the subprojects, a regional workshop will also be held towards the end of the RETA. 36. Knowledge products. In addition to the analytical studies listed in Table 3, a report will be developed towards the end of the RETA (after completion of most of the subprojects) that will compile and synthesize experience and lessons learned from the MEPR subprojects. The report will be accompanied by a documentary film that will illustrate successes and challenges in addressing poverty and environment issues at the local level. These knowledge products will be widely disseminated across the region and will also be available online through the ADB website and the Poverty Environment Net portal.

D. Output 4: TA management and administration

implementation of sustainable transport and urban policy and regulatory frameworks, and encourage increased investment in low-carbon transport and urban systems.

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37. Table 5 reflects some of the procedural and institutional arrangements that were adopted given the experience from implementing the first RETA under MEPR. One significant feature of the RETA is the role of ADBs Environment Committee in its management. This Committee, composed of 15 staff members who represent each of ADBs operational departments, serves as the Steering Committee of the RETA (along with other responsibilities). This helps ensure that the objectives and activities of the RETA are communicated and coordinated throughout ADB. It also helps the RETA stay attuned to other knowledge generation and management activities coordinated by the Environment Committee.
Table 5: Performance Targets for MEPR Output 4 Performance Targets/Indicators At least three Environment Safeguards Division (RSES) staff are designated as members of the core team to administer the TA. MEPR Support Three staff are members of core team. The Environment Committee (15 staff) is designated as the Steering Committee for MEPR

At least three of the environment specialists hired Two environment specialists have been hired as regular in resident missions are absorbed as regular ADB staff, one in ADB headquarters (from the Pakistan RM) and the other in the Bangladesh RM. staff by 2012. At least two Steering Committee meetings are held annually. Guidelines for subproject implementation are prepared by early 2008. Timely submission of progress reports of the TA. Regular Steering Committee review and approval of subproject proposals. The guidelines for subprojects have been prepared and are being implemented For 2011, an annual report for the March 2012 consultations was prepared.

38. Staff and consultant support for RETA. Three RSES staff are designated as core members in administering the RETA. Day-to-day management is assigned to Kotaro Kawamata, Environment Specialist, while higher level support is provided by Daniele Ponzi, Lead Environment Specialist. Nessim Ahmad, RSES Director, provides final approval of the subprojects and chairs the Environment Committee, which also serves as the Steering Committee of the RETA. The Environment Committee consists of 15 members (representing each of the operational departments), who advise on emerging environment issues, sector/thematic work, knowledge products and services and human resource issues. It meets on a quarterly basis and is regularly sent subproject proposals for review and approval. 39. A Manila-based international consultant and a local consultant continue to administer and pursue the RETA objectives. Another local consultant was also retained for the purpose of maintaining the PE Net website. 40. The Environment Specialists stationed in Lao PDR and Mongolia RMs resigned from their posts in 2011. A new consultant for the Lao PDR RM came on board in September 2011. The Environment Specialist stationed in Mongolia ensured that the two subprojects being implemented in that country were completed prior to vacating her post. Recruitment of a new consultant to fill the vacancy is being carried out by RSES in coordination with MNRM. 41. Donor consultation meetings and reporting. An Annual Consultation Meeting for PEF was held on 22 March 2011 during the Annual Donor Consultation Meeting for Financing 17

Partnership Facilities and Cooperation Funds in ADB headquarters. During the meeting, ADB presented the progress and accomplishments on the activities and objectives of MEPR. Prior to the meeting, ADB submitted the annual report. A revised and updated annual report in response to the specific comments received from PEF donors was submitted on June 2011. 42. Status of Poverty Environment Fund. The total amount available is nearly $8.9 million including contributions from the Governments of Norway and Sweden ($5.0 million and $3.6 million, respectively), income from investments, interest earnings, and gains or losses from change in value of currency. As of 31 December 2011, the total utilized amount of PEF stood at more than $4.6 million, or over 52% of the total amount available in PEF (Annex 2). 43. Disbursements will continue to increase in the coming months, as the implementation of the MEPR continues. By the end of 2012, a majority of the project expenditures for MEPR will be disbursed, adding an estimated disbursement of at least $1.7 million (bringing the total utilized amount to $6.3 million, or about 70% of the total amount available). This amount is net of the administration costs and financial expenses. 44. One challenge faced in 2011 relates to the fact that the subproject start-up has consumed more time than anticipated. Five of the 15 approved subprojects have been delayed due to extra time for government endorsement and contracting issues and will not be completed by the end of 2012. 45. A further 12-month no-cost extension (up to 31 December 2013) of the funding agreement, as well as the MEPR technical assistance program, is recommended to allow completion of the subprojects and other MEPR activities that can only commence after subproject completion. This includes the production of the synthesis report, documentary film, and conduct of the regional workshop, which will all have to take place after all the subprojects have been completed. 46. In order to facilitate full utilization of the funds, there may also be a need to consider some internal budget reallocation. For instance, some funds originally set aside for funding subprojects could be reallocated to support environmental mainstreaming in country programming, specifically for the development of Country Environment Notes, due to the surge in demand for this type of support. Remaining funds may also be used to support analytical studies, which are also in high demand. IV. Conclusion

47. The Poverty Environment Fund has been highly instrumental in mainstreaming environment in ADB operations and specifically in pursuing opportunities to address poverty environment linkages. 48. The Poverty Environment Program (2004-2008) offered a period of accelerated learning, with significant progress made in terms of gaining experience, learning lessons and generating knowledge. This was done in this first phase through subprojects, analytical studies, and knowledge products centered on poverty-environment dimensions.

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49. In phase two, Mainstreaming Environment for Poverty Reduction (MEPR), significant progress was made in further mainstreaming environment in ADB operations and in particular mainstreaming poverty-environment issues in the formulation of country partnership strategies. In turn, this work contributed to a substantive increase in environmental lending and improved capacities in ADBs environment-related work. 50. With the strong foundations laid in the first two phases of PEF, the need is now for an upscaling phase to expand activities that will promote green growth across the region, by supporting transitions to sustainable infrastructure, catalyzing investments in natural capital to maintain ecosystems services, and strengthening capacities and institutions for environmental governance. In addition, the intensifying impacts of climate change are threatening the development of the region, further increasing the need to build climate resilience in vulnerable areas and sectors. Additional resources are in strong demand from DMCs to meet these challenges, as shown by an increasing number of requests from regional departments and resident missions. 51. Finally, an evaluation study for the second phase MEPR would also be useful in identifying lessons and provide guidance and operational directions for the up-scaling phase of PEF.

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Annex 1: PEP Technical Assistance Completion Report

Division: Environment and Safeguards
TA No., Country and Name TA 6150-REG: Poverty and Environment Program Executing Agency Asian Development Bank TA Approval 16 December 2003 TA Signing n/a Source of Funding Poverty and Environment Fund and TASF Fielding of First Consultants: April 2004December 2008 Amount Approved: $3,920,000 Revised Amount: (not applicable) Amount Undisbursed: $652,236 TA Completion Date Original: March 2008 Account Closing Date Original: September 2008 Amount Utilized: $3,267,764

Actual: December 2008 Actual: March 2010

Description ADBs Environment Policy (2002) recognized the need to promote environmental and natural resource management interventions to reduce poverty and integrate environmental considerations into development planning and management both within ADB itself and in its client countries. The policy also acknowledged that a broad approach to environmental management and poverty reduction needs to involve the public and private sector as well as civil society. This approach needed to be tested to demonstrate effective solutions to local environmental problems affecting the poor which can be upscaled and replicated. With funding of $3.92 millioncomprising $3.42 million from the Poverty and Environment Fund (PEF), funded by the Governments of Norway and Sweden, and $500,000 from ADBs technical assistance special funds (TASF), the Poverty and Environment Program (PEP) was established as a structured institutional learning program to enhance the effectiveness of poverty reduction efforts through sound environmental management. This is to be achieved by drawing out lessons and experiences from replicable on-the-ground interventions, targeted analytical studies and information dissemination activities and systematically capturing and disseminating knowledge on poverty-environment relationships and appropriate responses. PEP focused on three focal areas: (a) natural resources management and sustainable livelihoods; (b) pollution and health; and (c) environmental vulnerability. It was conceived to accelerate the mainstreaming of environmental concerns into the ongoing and future operations of ADB and most importantly into development and poverty reduction programs within ADB's developing member countries (DMCs). Expected Impact, Outcome and Outputs Impact: The TA was expected to impact on poverty reduction through effective environmental management by providing examples of locally specific actions and responses to address poverty-environment issues and lessons from their implementation. These impacts and lessons are expected to feed into ongoing and future projects and programs of ADB and lead to increased integration of environmental considerations in ADB operations (country partnership strategies (CPS), and program and project design). Outcome: Effective environmental management approaches to poverty reduction demonstrated through subproject implementation are replicated and upscaled in ADB operations and better integrated in ADB business processes. Outputs: The outputs of the TA are (i) identification and demonstration of self-sustaining environmental management interventions to reduce poverty; and (ii) systematic capture of knowledge on poverty-environment relationships to improve ability to design and implement effective environmental management approaches Delivery of Inputs and Conduct of Activities PEP had grant inputs of $3.92 million primarily used for the implementation and completion of 15 subprojects (12 pilot interventions, 2 analytical studies, and 1 information dissemination) consulting services, establishing the Poverty Environment (PE) Net website (www.povertyenvironment.net), capturing and disseminating knowledge on povertyenvironment linkages and producing knowledge products. Nine nongovernment organizations (NGOs), 6 local governments, and 1 research institution participated in the TA as implementing agencies of the subprojects under the supervision and monitoring of Project Officers from the relevant departments. Most NGOs were actively involved in conceptualizing the subprojects and this has led to enhanced engagement of ADB with NGOs interested in poverty-environment issues and actions. Also, these NGOs have partnered with local governments and local organizations in subproject implementation which encouraged better interactions among stakeholders.

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An administration specialist assisted in TA implementation from start to finish, supporting the TASU Officer assigned to manage the TA and ensure it achieved its objectives. A web-design specialist developed the PE Net website and provided system maintenance and technical support. Also, a website administrator was hired to regularly update, maintain and edit the site contents. An international consultant captured and synthesized the knowledge and lessons learned through the implementation of 15 PEP subprojects and similar projects supported by other organizations. A film production company prepared an institutional video and separate videos for 3 selected subprojects as educational and promotional materials on how local environmental management contributes to sustainable poverty reduction. Consultants were also hired for the subprojects to provide technical support and assist in implementation, supervision, monitoring and preparing progress and completion reports. A total of 26 consultancy contracts were issued under the TA and 25 of these are on individual basis. Most of the consultants were rated excellent/staisfactory after completion of work. Evaluation of Outputs and Achievement of Outcome The TA achieved its objectives of enhancing the integration of environmental concerns into the ongoing and future work of ADB and into development programs in ADBs DMCs by improving knowledge about poverty-environment linkages and effective approaches for poverty reduction. Subproject Implementation Fifteen subprojects were successfully implemented under the TA. A subproject was not implemented (Sri Lanka) due to the volatile security situation in the country making it difficult to field consultants to work on the project. Through the implementation of the subprojects, the TA was able to identify and demonstrate self-sustaining environmental management interventions to reduce poverty for possible replication and/or upscaling. More importantly, the subprojects have demonstrated in varying degrees their relevance in ADB operations and influence in integrating environmental considerations in ADBs business practices by providing inputs on the design of projects and CPS preparation. Knowledge Capture and Dissemination Knowledge capture and dissemination activities of PEP have been fully satisfactory with initial efforts focusing on the development of the PE Net website and later turning to the completion of other knowledge products. The PE Net website that was established under the TA has continued to be a primary knowledge repository of povertyenvironment documents, not only in Asia but globally, and became a top-ranked site for this specific topic based on several Internet search engines. It has served as a medium of communication among the members of the Poverty Environment Partnership by announcing Partnership events, publications, and event-related documents and through the creation of on-line working groups. The website is now being maintained through TA 6422: Mainstreaming Environment for Poverty Reduction, also financed under PEF. The publication, Nature and Nurture: Poverty and Environment in Asia and the Pacific, was prepared under the TA. It compiles and synthesizes the experience and lessons learned from subproject implementation, through the presentation of case studies and how such knowledge are feeding into ADBs ongoing projects and programs. These case studies, together with case studies from other organizations, were discussed at the 13th Poverty Environment Partnership meeting at ADB in Manila in June 2008 which was also funded under the TA. A set of documentary films on selected PEP subprojects was prepared to illustrate the challenges, as well as success stories, in addressing poverty and environment issues at the local level. The videos highlighted the important lessons from PEP subprojects implementation which are relevant to countries and peoples of the Asia-Pacific region and useful for policy- and decision-makers, the international donor community, other poverty-environment stakeholders and the general public. These videos were widely distributed across the region and featured in ADB and PE Net websites. The PEP has also supported other publications such as the Poverty, Health and Environment book co-published by the members of the Poverty and Environment Partnership including ADB, and various meetings with partners for knowledge capture and dissemination. Overall Assessment and Rating The TA was highly successful and proved to be a useful mechanism for accelerating learning about poverty-environment linkages and effective approaches for poverty reduction. The experiences and lessons from subproject implementation on how local actions can lead to reduction in poverty and environmental improvements fed into ADBs operations by providing learning opportunities for project design and influencing the development of country strategies.

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Major Lessons The implementation of 15 subprojects under PEP demonstrated the links between poverty and environment in various situations and showed how local actions can lead to sustainable benefits in poverty reduction while simultaneously improving the environment. Also, they provided opportunities to demonstrate that community-based environmental management approaches can be scaled-up and/or replicated and influence the mainstreaming of environmental aspects into ADBs business processes. Through PEP, ADB pursued a limited part of environment mainstreaming objectives of PEF. PEP implementation paved the way to learn that there is a growing range of opportunities to expand learning about the relationship between poverty and environment. Expanding the activities that PEF supports, other than those of PEP, could provide other avenues to further promote effective environmental management approaches that reduce poverty. Recommendations and Follow-Up Actions Based on PEP implementation, it is important to consider how activities to be funded by PEF can be configured to further catalyze and strengthen environmental mainstreaming and further contribute to ADB operations. Future TAs to be funded by PEF need to consider providing budgetary support for fact-finding and implementation review by Project Officers and the Secretariat in order to improve the process of developing proposals and reviewing implementation progress. Actively encouraging proposals from resident missions could also improve ownership and efficiency in project preparation and implementation. Currently, ADB is implementing RETA 6422 which expands the scope of PEP activities and opening new opportunities for environment mainstreaming. Learning from lessons of PEP implementation, the RETA adopts an improved process of approval and implementation, provides budgetary support for Project Officers to conduct fact-finding and implementation review missions, and gives flexibility and ownership of subprojects to the resident missions. Prepared by: Daniele Ponzi Designation: Lead Environment Specialist, RSES

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

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Annex 2: Status of Grant

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