Kenya International Union for Conservation of Nature (IUCN)

Transcription

1 Dryland Resilience Kenya: Ecosystem-Based Adaptation through Rangeland and Forest Landscape Restoration for Resilient Communities, Land, Water and Infrastructure in Frontier Counties of Kenya Kenya International Union for Conservation of Nature (IUCN) 22 December 2016

2 Programme Title: Dryland Resilience Kenya: Ecosystem-Based Adaptation through Rangeland and Forest Landscape Restoration for Resilient Communities, Land, Water and Infrastructure in Frontier Counties of Kenya Country/Region: Kenya Accredited Entity: IUCN (International Union for Conservation of Nature) National Designated Authority: National Treasury of Kenya

3 GREEN CLIMATE FUND PAGE 1 OF 5 A. Project / Programme Information A.1. Programme title A.2. Project or programme Please submit the completed form to fundingproposal@gcfund.org 1 Dryland Resilience Kenya: Ecosystem-Based Adaptation through Rangeland and Forest Landscape Restoration for Resilient Communities, Land, Water and Infrastructure in Frontier Counties of Kenya Programme A.3. Country (ies) / region A.4. National designated authority(ies) A.5. Accredited entity A.6. Executing entity / beneficiary Kenya National Treasury of Kenya IUCN (International Union for Conservation of Nature) Executing Entity: State Department of Livestock, Ministry of Agriculture, Livestock and Fisheries will be the lead executing agency and will be supported by relevant line Ministries and State agencies as well as county governments, CBOs, NGOs and International Organizations. *The Full list of the key partners are listed under B.5. Implementation Arrangement. Beneficiaries: Rural populations of the 7 Frontier Counties A.7. Access modality Direct International A.8. Project size category (total investment, million USD) A.9. Mitigation / adaptation focus A.10. Public or private Micro ( 10) Small (10<x 50) Medium (50<x 250) Large (>250) Mitigation Adaptation Cross-cutting public Which of the following targeted results areas does the proposed project/programme address? A.11. Results areas (mark all that apply) Reduced emissions from: Energy access and power generation (E.g. on-grid, micro-grid or off-grid solar, wind, geothermal, etc.) Low emission transport (E.g. high-speed rail, rapid bus system, etc.) Buildings, cities, industries and appliances (E.g. new and retrofitted energy-efficient buildings, energy-efficient equipment for companies and supply chain management, etc.) Forestry and land use (E.g. forest conservation and management, agroforestry, agricultural irrigation, water treatment and management, etc.) Increased resilience of: Most vulnerable people and communities (E.g. mitigation of operational risk associated with climate change diversification of supply sources and supply chain management, relocation of manufacturing facilities and warehouses, etc.) Health and well-being, and food and water security (E.g. climate-resilient crops, efficient irrigation systems, etc.) Infrastructure and built environment (E.g. sea walls, resilient road networks, etc.) Ecosystems and ecosystem services (E.g. ecosystem conservation and management, ecotourism, etc.) A.12. Project / programme life span 5 years 1 Please use the following naming convention for the file name: [CN]-[Agency short name]-[date]-[serial number] (e.g. CN-ABC ).

4 GREEN CLIMATE FUND PAGE 2 OF 5 A.13. Estimated implementation start and end date Start: 1 July 2017 End: 30 June 2022 B. Project/Programme Details The Fund requires the following preliminary information in order to promptly assess the eligibility of project/programme investment. These requirements may vary depending on the nature of the project/programme. Kenya is a dryland country with over 80% arid or semi-arid land where pastoralism is the dominant land use. Dryland communities are most affected by climate change and confronted with increasing climate uncertainty and higher temperatures, which lead to more extreme climatic events including drought and flood. Ecosystem degradation, which affects roughly one third of Kenya s drylands, is increasing the frequency and severity of droughts whilst reducing the capacity of communities to adapt. Human development is low in the drylands, and land tenure is insecure, both of which reduce adaptive capacities. At the same time, potential large scale infrastructure projects have a high propensity to degrade ecosystems and weaken livelihoods unless they are well managed. Kenya s 2008 Post Disaster Needs Assessment highlighted the impact of drought emergencies in the drylands on the national economy as a whole. Drought led to costs of 12billion USD due to loss and damage and required a further 2 billion USD for recovery and reconstruction. Kenya s economic growth declined from an average of 6.5% in preceding years to less than 1.5% in the drought year. Strengthening resilience in the most vulnerable Counties is therefore expected to provide benefit to the whole of Kenyan society. The principle behind this programme is adaptation to build resilience within the unique conditions, challenges and opportunities of dry rangelands including; climate uncertainty, ecological fragility, seasonal and annual water deficits, historical marginalization, low human capital, large-scale commons, new (but rapidly developing) devolved public structures, and strong cultural grass-roots natural resource management institutions and practices. B.1. Project / programme description (including objectives) The programme will be located in Kenya s Frontier Counties economic bloc consisting of Isiolo, Garissa, Marsabit, Wajir, Mandera, Tana River and Lamu. The programme will use an Ecosystem-based Adaptation (EbA) approach with emphasis on integration of restoration and sustainable land management options between natural resource sectors - rangelands, agriculture, forests, and water - as well as mainstreaming rangeland and forest concerns into other sectors such as energy and infrastructure. The programme will provide science and policy guidance and dialogue mechanisms to the latter sectors to mitigate the impact of large infrastructure on dry rangeland social and ecological systems. Goal: Climate resilient ecological, social and economic systems strengthened in the dry rangelands of Kenya s frontier counties and harmonised with large-scale infrastructure and developments. Specific Purpose: Dry rangeland and forest landscapes and their water resources are resilient, safeguarded, restored and sustainably managed through stronger local governance, evidencebased decision-making and dialogue, targeted investments, and increased societal benefits from ecosystem services. Outputs/Results/activities: 1. Restore and Safeguard: Range and forest lands and water resources are restored, safeguarded and sustainably managed (sites will include rangelands, woodlands/forests, rivers, wetlands, catchments, and croplands) Restoration activities include restoration of degraded grasslands and forests (e.g. dry woodlands and savannahs), bush clearance, control of Invasive Alien Species, restoration of critical water infrastructure, and decommissioning/modification of harmful water infrastructure Adoption of sustainable land management practices in restored and non-degraded landscapes including establishment of managed grazing regimes, seasonally protected pasture zones, introduction/protection of locally-adapted high-value pasture and tree

5 GREEN CLIMATE FUND PAGE 3 OF 5 species, implementation of fire management protocols, establishment of community conserved grazing and forest areas, protection of riparian zones and wetlands Secure land and resource rights through communal management agreements, conservancies, bylaws and recognition of institutions, including education and awareness for communities and government on legal options for communal land tenure, development of bylaws and other community level natural resource management agreements, capacity building of community institutions and government legal and extension/advisory services. 2. Devolved Decision-Making: Dialogue, awareness and evidence-based decision making on climate adaptation is enhanced by effective, gender sensitive, dialogue process, supportive policies, and the use of risk analysis and effective decision support tools Institutional support and capacity building to community groups (including customary institutions and specific institutions representing women and youth) to strengthen their accountability and representation and to engage in participatory mapping and spatial planning, landscape restoration, sustainable land management, and influencing public decision making Support to formulate bylaws and incorporate into county laws Mechanisms established to improve the collection and use of appropriate evidence in decision-making at all levels, including Participatory Rangeland Assessment, establishment of technical platforms with spatial data and underpinned by decisionmaking support tools (SHARED methodology), establishment of an Independent Scientific and Technical Panel (ISTAP), implementation of environmental and social impact assessment and safeguards, participatory/action learning and monitoring on adaptation and resilience, research on the climate mitigation potential of rangelands Implementation of annual integrated County land use plans based on multistakeholder consultation, including multistakeholder dialogue, participatory action planning, landscape dialogue, policy formulation and advocacy. This will include support to review the new forest conservation and management Act. 3. Supportive investment and incentives: Public, private and community investments effective, applied, and supporting productive and sustainable value chains, gender, youth responsive, and livelihoods options Establishment of Community Resilience Revolving Fund (CRRF), Sharia compliant Community Environmental Conservation Fund (CECF) model linked with the Climate Smart Lending Platform (CSLP) underpinned by VSLA groups, align Ward Adaptation Funds with community adaptation priorities, performance based incentives programme for community land-use and resilience plans Value chain analysis, business planning and support, and private sector engagement through providing eco-credit, working on specific rangeland value chains (livestock and products, gums and resins, sustainable biomass production), and tourism. B.2. Background information on project/programme sponsor Tools: This programme will benefit from a range of tools that have been tried and tested at different scales and can be applied for scaling up and out. Risk assessment for ecosystems and ecosystem services (IUCN Red List of Ecosystems). Restoration Opportunities Assessment Methodology (ROAM), ROOT, INVEST. Participatory Rangeland and Grassland Assessment (PRAGA). Independent Scientific Advisory Panel (ISAP). Community validation of water infrastructure (IUCN). StakeHolder Approach to Risk-informed and Evidence-Based Decision-Making (SHARED - ICRAF). Decision support tools (ICRAF). Community Rangeland Management Plans (CRMP) and variants. Sub-Catchment Management Plans for ASALs (SCMPA). County Adaptation Fund (Adaptation Consortium). About IUCN Created in 1948, IUCN is the world largest environmental union with its 1,300 membership uniquely composed of both government and civil society organisations together with some 16,000 experts. It provides public, private and non-governmental organisations with the knowledge and tools that enable human progress, economic development and nature

6 GREEN CLIMATE FUND PAGE 4 OF 5 conservation to take place together. It is a leading provider of conservation data, assessments and analysis. IUCN s status as a membership organisation, and its excellence in convening multistakeholder dialogue, has been capitalised on to develop this programme. The programme concept has been developed through the active involvement of seven directorates from the National Ministries of Agriculture, Environment and Water, in addition to the Frontier Counties Development Council, two further Government departments, and two national Research Institutes (details below).iucn s Eastern and Southern Africa Regional Office (ESARO) was established in Nairobi in 1985 and covers 24 countries in the Horn of Africa, eastern and southern Africa and the western Indian Ocean. IUCN has implemented its People and Landscapes Programme in Kenya since 2008, including dryland management and forest landscape restoration. IUCN has worked in close partnership with government and NGOs and has recent and ongoing programmes in 4 of the 7 frontier counties. The programme has developed approaches to strengthening dryland governance, restoring and sustainably managing rangelands and forest landscapes, strengthening value chains at the local level, promoting incomes from biodiversity, economically valuing dryland ecosystem services, and promoting measures to enable local benefits. IUCN s experiences in climate change adaptation in Kenya include: support to the Ministry of Water to adapt sub-catchment management planning to the arid and semi-arid lands; crossborder adaptation dialogue between pastoralist communities in Kenya, Ethiopia and Tanzania; adapting built and natural water infrastructure for livestock in Isiolo and Garissa Counties; developing a resilience framework to support climate change adaptation in Mt. Elgon region; demonstrating natural infrastructure as a nature-based solution to climate change; and promoting transboundary river governance in the IGAD region. In January 2016, IUCN established a knowledge, learning and technical support Hub for Forest Landscape Restoration. The hub supports countries, organizations, communities and enterprises in adopting a forest and landscape restoration approaches. This programme will draw on IUCN s global programmes of work on Rangelands/Drylands, Forests, Water, Ecosystem-based Adaptation and Disaster Risk Reduction, and Business and Biodiversity. It will also contribute to IUCN s efforts to strengthen global understanding of ecosystem based approaches to building resilience, particularly in neglected ecosystems like the drylands. IUCN is an active member, and co-chair, of The Forest Dialogue (TFD), created in 1998 to provide international leaders in the forest sector with an ongoing, multi-stakeholder dialogue (MSD) platform to promote collaborative solutions for achieving sustainable forest management and conservation around the world. The goal of TFD is to reduce conflict among stakeholders over the use and protection of vital forest resources. The TFD experience will support landscape dialogue within the programme. IUCN has also supported the establishment and management of Independent Scientific Advisory Panels - ISTAP (for procedures for establishing and managing IUCN-ISTAP see from its global business engagement programme to provide independent advisory and technical solutions, e.g. with Shell in the Niger Delta, Nigeria and Gazprom in the Sakhalin Islands, Russia. This will be essential to harmonise major energy and infrastructure projects with dryland management in a preventative and collaborative way. B.3. Market overview Drylands provide various ecosystem goods and services ranging from forage and water for livestock, livestock products (e.g. meat, milk, hides), fuelwood, non-timber forest products (e.g. gums and resins, honey, fibre and medicine), water infiltration, nutrient cycling, carbon sequestration, biodiversity, aesthetic, spiritual, cultural and heritage values. These goods and services are essential for socio-economic and ecological resilience and overall human wellbeing. In this market overview, some most economically important goods that can be produced from sustainably managed rangelands and dry forests are described. Livestock Pastoralism is the main livelihood in Kenya s drylands, providing 50% of Kenya s agricultural GDP. Approximately 70% of the national livestock herd is from drylands with a total capital value of almost 3 billion USD (Behnke and Muthami, 2011). The total value of the pastoral sector is

7 GREEN CLIMATE FUND PAGE 5 OF 5 poorly estimated, particularly for the primary product, milk, much of which is consumed domestically and is not marketed. Formal meat marketing largely revolves around organized groups that take products to established abattoirs and butcheries while informal marketing is also widespread with live animals sold to local markets or transported through various means. Beef is the leading meat consumed in the country, and more than 80% of the beef consumed in the country is produced by pastoralists, either domestically or in neighbouring countries (Tegemeo, 2014). The market price of the livestock products from the pastoralist areas is not pegged on any structure system, but based on willing buyer and seller principle, and prices fluctuate based on various aspects including the demand, season and occurrence of the drought conditions. The government, through the formation of the Meat Commission, has tried to secure favourable prices for livestock, but the bulk of the sellers do not use the facility due to challenges including late payment. Government in collaboration with various actors are engaged in interventions targeted to improved market chain for livestock products including market linkages and value addition. Domestic consumption of meat increased from 361,115 tonnes in 1991 to 606,169 tonnes in 2007, and Kenyans consume on average 15kg of red meat per capita annually. Live animals and packed meat are also exported to other countries, particularly in the middle east. The demand from Egypt and Middle East countries currently stand at 100,000 MT which the country is unable to meet. The average beef production recorded for period is 148,000 MT. Despite high levels of auto-consumption by pastoralists, milk is Kenya s most economically important livestock product, with a value of 2.5 billion USD in 2009, or about 70% of the total gross value of livestock s contribution to the agricultural sector. Camel milk produced from pastoralist areas is receiving recent attention in terms of consumption due to associated health and nutritional benefits. Camel milk production has been estimated at USD169 million (Behnke and Muthami 2011). Gums and Resins Non timber forest and rangeland products are important to the livelihoods of dryland communities. Gum Arabic from Acacia senegal or Acacia seyal and commercial gum resins such as myrrh from Commiphora myrrha, hagar from Commiphora holtziana and Frankincense from Boswellia neglecta have important domestic and international market value. They are renewable resources that can be sustainably exploited for household income and enterprise development and still conserve biodiversity and ecosystem functions while increasing overall productivity of the land. The current annual world demand for gum arabic is about 100,000 MT against a current supply of about 70,000 MT which is projected to reach 150,000 MT by 2020 (Muller and Okoro, 2004). In Kenya, the potential for gum Arabic production is about 12,000 MT (export value USD 30 million) against an average production of 100 MT. The annual world demand for resins is estimated at more than 6,000 MT. The annual potential resin production in Kenya is estimated at 8,000 MT (export value USD 40 million) against an actual average production of around 3,500 MT. Kenya is the third largest exporter of resins (myrrh, hagar and frankincense) after Ethiopia and Somalia. Key markets for gum arabic are found in Europe and Asia while resins are sold mainly to Pakistan, Vietnam, China, Hong Kong and India. The pricing mechanism for gums and resins products is not structured, and markets are not well developed in the country. Prices vary according to a number of factors including point of origin, demand, and quantity supplied. Cartels dictate the price of goods along the value chain. The government is involved in carrying out relevant research and capacity building, issuance of the movement, export permits and phytosanitary certificates. For some of the gums, synthetic resins are competing for market share as a substitute. Honey Beekeeping in Kenya is mainly practiced on the subsistence level, but there is much focus on enterprise development towards income generation and livelihood development. The country has production potential of 100,000 metric tonnes, but the current annual production is estimated at 700, the bulk coming from the arid and semi-arid lands which has high potential. According to the study carried out in Northern Kenya in 2007, honey production is expanding, but data on production trends, processing and marketing is fragmented. A National Beekeeping Policy in Kenya has been put in place as well as a monitoring plan highlighting best practices in the honey industry with quality and standards as the core objects. There is need to develop the sector in terms of value chain development and engagement of the all stakeholders. The livelihood enhancement and complimentary income generation potentials need to be given consideration in the phase of climate change as an adaptation mechanism.

8 Tourism PROJECT / PROGRAM CONCEPT NOTE GREEN CLIMATE FUND PAGE 6 OF 5 Tourism sector contributes about 10% to country s GDP and employs about 9 percent of the total wage workforce. The Kenya Vision 2030 recognizes the importance of the sector as its growth stimulates further development in other sectors of the economy. About 75% of the wildlife population and 92% of the protected areas are found in the dryland (Barrow and Mogaka) and form bulk of the tourism attraction in the country. The pastoral heritage of the pastoral communities is another major attraction attributed to dryland of the country. Community conservancies that work closely with the private sector and other agencies including government have a base in drylands of Kenya, and focus has been given to them as conservation platform and livelihood enhancement initiatives. The grazing patterns that recognize the role of the traditional systems and conventional practices are in some instances integrated in some conservancies which play the role of sustainable resource management and climate change adaptation mechanism among the pastoral groups. To ensure that tourism follows a sustainable path, the Department of Tourism is mandated with provision of clear direction and leadership in the tourism policy and development in the country by Executive Order No.2 of In this regard, the Department plays the role of overseeing and coordinating all-inclusive processes of policy direction, planning, product development and diversification. Other actors are actively involved in development of the eco-tourism sector in the drylands including private sector, research organization and developmental non-governmental organizations. In principle, the programme doesn t require specific permits or licenses to start operating, but needs to follow national laws and the operating conditions of each institution. There is legislation and policies in Kenya that require issuance of permits for specific activities/interventions undertaken by the programme. The key ones include: Environmental Management and Coordination Act (1999): related to issuance of EIA permits for various projects. Forest Management and Conservation Act (2016): movement and export permits. Community Land Act (2016): involved with operations in community lands in collaboration with the county government. National Livestock Policy: license related to commercial feed and fodder production. Water Act (2002): abstraction of water from various water sources. B.4. Regulation, taxation and insurance B.5. Implementation arrangements Taxes: Kenyan government imposes Value Added Tax (VAT) which is levied on the supply of taxable goods and services in Kenya, as well as on the importation of taxable goods and services into Kenya. The VAT is governed by the VAT Act, Some organisations such as IUCN are exempt from the VAT based on their status in the country. The government also imposes payroll tax administered through the pay-as-you-earn (PAYE) mechanism of deducting income tax from employment income (e.g. salaries, wages, bonuses, and commissions). PAYE also applies to taxable non-cash benefits. The PAYE is deducted on monthly basis and obligation of the employer to account for it. Foreign exchange regulations: Kenya is an open economy, and the Central Bank of Kenya regulates the financial system and plays a supervisory role with regard to the management of the foreign exchange. Central bank of Kenya engages in controlling currency volatility which is aimed at smoothing out temporary market fluctuations. The country has no restrictions on transferring and converting funds associated with grants and donor funding. Central Bank has in place foreign exchange guidelines which all actors have to adhere to. Insurance policies: The programme is not expected to insure the interventions with specific companies or corporations. Some of the programme interventions will have a component of guarantee, in particular model sharia compliant community environment conservation fund (incentivised resolving fund for community members to engage in environmental conservation and climate change adaptation and resilience work) that will be piloted at the community level. The livestock insurance scheme for pastoralist communities that face recurrent drought is another element involving insurance in the programme that is of relevance to climate resilience. Preliminary implementation arrangements are based on the extensive consultations that have been carried out during concept development. Where it has a particular comparative advantage, IUCN will execute or technically support execution of specific programme components. Links to other sectors such as education and health will be explored as appropriate. Specific roles of technical supporting institutions will be defined during proposal development.

9 GREEN CLIMATE FUND PAGE 7 OF 5 1. Lead executing agency: The State Department of Livestock, Ministry of Agriculture, Livestock and Fisheries (Directorate of Rangelands). a. Principal roles: overall direction and leadership, representation to government, national policy dialogue, national inter-sectoral planning and partnership management. 2. Co-executing agencies, including: State Department of Natural Resources; State Department of Environment, Ministry of Environment, Natural Resources and Regional Development Authorities; Ministry of Water and Irrigation; Frontier Counties Development Council. a. Principal roles: county level planning, local level interventions, inter-county resource planning and negotiation, establishment of local level legal agreements, and policy dialogue communications. 3. Contributing institutions, including: Directorate of Climate Change; Kenya Water Towers Agency; Kenya Forest Service; Kenya Wildlife Service; Kenya Forestry Research Institute; National Environment Management Authority; National Drought Management Authority; Kenya Agricultural & Livestock Research Organization; Department of Resource Surveys and Remote Sensing; Council of Governors; Northern Rangeland Trust; World Agroforestry Centre; International Livestock Research Institute; The Adaptation Consortium/IIED; Eco- Agriculture Partners; Kenya Private Sector Alliance; Kenya Markets Trust; Kenya Insurance Regulatory Authority; Climate Smart Lending Platform F3Life. a. Principal roles: provision of technical services (e.g. monitoring and assessment, capacity building), innovations in restoration and SRM, research and technology generation, programme learning, and political leadership/representation. The programme will be governed by a simple structure comprising a National Steering Committee (NSC) and County Technical Advisory Committees (TACs). The NSC will guide the overall programme direction and will serve as an advisory mechanism to the programme implementation unit. The NSC will in turn receive technical advice from the Independent Scientific and Technical Panel (ISTAP), which is a project deliverable. TACs will provide a similar function at the County level and will play an additional role of supporting the programme to strengthen inter-sectoral coordination at County level. The TAC will advise the Programme Implementation Unit at County level. The TAC will ensure representation from key technical advisors and sectors at the County level and will additionally receive technical support from the ISTAP. This is illustrated in the following organogram. Detailed Terms of Reference for each component of programme governance, including membership structure, will be defined and agreed during the inception period. The NSC will be chaired by the Principal Secretary (PS), MoALF-SDL. Member of the PSC will include (but not limited to): Permanent Secretaries from the relevant state departments; Chair of Agricultural Sector and Chair of ASAL committee of Council of Governors; the Chair of Frontier Counties Development Council; and representatives from participating counties and the ASAL NGO Consortium. Membership of the TACs will differ between Counties according to agreement over relevant programme partners. Government structures are not identical in all Counties, and the TAC will be constituted based on local consultations and agreement with the County Governments. Members will include Chief Officers from the relevant county departments together with representatives of civil society and the private sector.

10 GREEN CLIMATE FUND PAGE 8 OF 5 advise National Steering Committee guide Programme implementation Unit (national) Oversight/management Independent Scientific and Technical Panel Oversight Execution by national programme partners advise Technical Advisory Committee guide Programme implementation unit (x7 Counties) Oversight/management Execution by County/local programme partners Implementation Timetable Feasibility study to be submitted with programme proposal. By 2018, community and government institutions carry out improved participatory assessment and action planning in order to strengthen natural resource governance, adaptive management, and security of tenure for rural men and women. By 2022, rangeland and forest landscapes are restored and sustainably managed through appropriate public and private investments which respond to locally-determined objectives and priorities (sites will include rangelands, woodlands/forests, wetlands, and croplands). By 2022, livelihood strategies are strengthened and diversified through investments in value chains and capitalisation on an expanded range of ecosystem services. By 2022, supporting policies are developed and implemented based on improved action learning and use of evidence in decision-making. C. Financing / Cost Information The breakdown of cost estimates against major interventions is attached as a Supporting Document. C.1. Description of financial elements of the project / programme The financial model will be developed during the feasibility and proposal development stage when the programme will further identify a micro-credit finance institution and other private partners and examine economically viable activities. The restoration of the rangeland/dryland ecosystems and services in northern Kenya has not received adequate public funding, and thus a greater degree of public investment from GCF is needed.

11 GREEN CLIMATE FUND PAGE 9 OF 5 The proposed GCF grants together with the co-financing from IUCN and partner organisations will help catalyse public and private finance for potential commercial activities based on the livestock, livestock products, non-timber products and tourism. To support public, private and community investments and incentive components of the programme (refer to Output 3 under B.1. in page 3), the private sector partnerships will be built with micro finance institutions through co-investments for village lending schemes to catalyse sustainable financing from the private sector and communities. Total project financing (a) = (b) + (c) Approximately 19,500,000 USD will be channelled for this, and 25-30% initial investment by the private sector and communities are envisaged. This will build into a long-term revolving fund to support commercially viable activities. Financial Instrument 89 Amount Currency Tenor Pricing million USD ($) (i) Senior Loans (ii) Subordinated Loans (iii) Equity (iv) Guarantees (v) Reimbursable grants * (vi) Grants * 60 Options Options Options Options Options million USD ($) ( ) years ( ) years ( ) % ( ) % ( ) % IRR C.2. Project financing information (b) Requested GCF amount This programme requires grants to be provided for a number of reasons. Market failures in Kenya s drylands are widespread, particularly in relation to the range of ecosystem services that are provided from sustainably managed rangelands and forests. At the same time, these areas have above average levels of poverty, relatively low capacity (human and institutional), and security challenges. The programme will contribute to building the institutional and human foundation on which sustainable development and climate change adaptation can be more widely promoted, including through the private sector. Through partnerships with the private sector including a micro credit finance institution, it is expected to attract further private sector capital flows towards investments in commercially viable activities on a longer term basis. Total Requested (i+ii+iii+iv+v+vi) 60 million USD ($) (c)cofinancing Financial Instrument Amount Currency Name of Institution Seniority

12 GREEN CLIMATE FUND PAGE 10 OF 5 Grant Grant Grant Grant million USD ($) million USD ($) million USD ($) million USD ($) IUCN State Department of Livestock, MoALF FCDC KEFRI Options Options Options Options Lead financing institution: GCF (d) Covenants (e) Conditions precedent to disbursement D. Expected Performance against Investment Criteria Please explain the potential of the Project/Programme to achieve the Fund s six investment criteria as listed below. D.1. Climate impact potential [Potential to achieve the GCF's objectives and results] The measurement framework and indicators set out here are indicative and will be further elaborated during programme proposal development and implementation. GCF Indicator: Coverage/scale of ecosystems protected/rehabilitated in response to climate variability and change. The GCF investment will support restoration of rangeland ecosystems as the basis for resilient livelihoods and local economies. Soil erosion is used here as a proxy for degradation in the 7 counties and analysis has shown that the median probability of severe erosion is 67%. This means that 116,000 km2 (or ~33%) of the 7 counties (c.353,000 km2) have more than 75% of extreme erosion. Degradation reduces ecosystem resilience and hence the capacity of vulnerable communities to adapt climate extremes. The programme will target the equivalent of Land Degradation Neutrality in target Counties, ensuring that degradation processes are balanced by an equivalent area of land under improved management leading to restoration. It is recognised that the programme can initiate restoration processes, but such processes require longer than a single project window to be complete. GCF Indicator: Change in expected losses and disruptions of lives and economic assets (US$) due to the impact of extreme climate-related disasters in the seven counties. Restored rangelands will contribute to increased productivity in the natural resource sector, including livestock and forest production. The overall reliability of production will be improved in order to reduce vulnerability, for example by ensuring seasonal access to buffer resources for rural communities. Restoration will contribute to reviving the diversity of rural livelihoods, not only in periods of climate stress but year round, for example by diversifying incomes from different livestock products and natural resources (e.g. gums and resins). Finally, restoration will contribute to rehabilitation of ecosystem functionality which will provide important externalities that benefit the livelihoods of non-rural populations, for example improved food, water and energy security. Due to the shortage of current data, it is necessary to provide a more precise value of reduced losses during the baseline assessment. GCF Indicator: Number of men and women benefiting from the adoption of diversified, climate-resilient livelihood options. The 7 counties have a total population of 3.1million people (46% female). The programme will work with an estimated 1.34 million people in vulnerable rural communities, 60% of which will be indirect beneficiaries (800,000) whose lives will be less disrupted due to climate change. The programme will work directly with 1 person (10%) from each of the 150,000 households that this represents. The programme will provide target activities for women, including support for appropriate diversification activities and support for marketing of products that are traditionally managed and controlled by women.

13 GREEN CLIMATE FUND PAGE 11 OF 5 D.2. Paradigm shift potential [Potential to catalyze impact beyond a one-off project or programme investment] Governance and representation are important components of the programme, and all such activities will insist on effective representation of women, individually or through CBOs, with tailored support and capacity building to enable women to play a more prominent role in local decision-making. GCF Indicator: Number of food-secure households (in areas/periods at risk of climate change impacts). The programme aims to have an impact on food, water and energy security for an estimated 150,000 households. A detailed baseline assessment will evaluate the status of food security, including seasonal deficits (and seasonal surpluses where relevant) to inform impact assessment. The programme aims to reduce seasonal hunger and ensure year-round access to adequate nutrition for all groups, with particular attention to food security of women and vulnerable groups. GCF Indicator: Value (US$) of ecosystem services generated or protected in response to climate change The programme will provide detailed economic valuation of ecosystem services to evaluate the different services that are rehabilitated and protected. This is an integral programme component that will inform dialogue on public and private investment options. It is anticipated that the programme will contribute to significant increases in food, water and energy supply, increases in marketable biodiversity, increased options for wildlife and nature tourism, and sequestration of carbon. GCF Indicator: Number of key targeted institutions with evidence of their strengthened capacity and coordination mechanisms to mainstream climate resilience The programme will build on the decentralization process in Kenya by strengthening the capacity of county government to implement restoration and SLM actions at scale. The most significant transformations will be in: 1) Enabling and strengthening local decision-making processes (governance, participation, stronger capacity to mobilise evidence and to promote adaptive management); 2) Implementing targeted land restoration actions through financial assets and incentives for communityled solutions; and 3) Monitoring progress and impact on resilience. The programme will contribute to County Institutions in 7 counties as well as up to 50 community institutions per County. GCF Indicator: Number of effective regulations/policies introduced/adjusted to address climate change risks. The programme will contribute to the development of multiple local resource agreements, bylaws and policies in each County. A more precise number will be estimated after the baseline and inception period based on the Free, Prior and Informed Consent of participating communities. The programme will contribute to 7 County level climate change response strategies and the development of 7 climate change adaptation policies and laws at the county level that are harmonized with other County and National policies and laws. GCF Mitigation Indicator: Estimated tonnes of carbon dioxide equivalent (t CO2eq) reduced or avoided (including increased removals) as a result of the programme in the 7 counties. Carbon sequestration will be one co-benefit of this programme, but is not the primary objective. The programme cannot confidently predict sequestration potential due to the diversity of the landscape and the combination of sustainable management and restoration approaches that will be deployed. However, potential may be high, and Dabasso et al. (2014) found average carbon stocks of ± tonnes ha 1 across landscape types and seasons in Northern Kenya. The programme will evaluate the mitigation potential of adaptation/restoration approaches as well as any associated socioeconomic-ecological costs or co-benefits and will thereby contribute knowledge that will allow Kenya to evaluate its potential to capture and store carbon in its vast rangelands. Potential for scaling-up and replication (e.g. multiples of initial impact size) This programme will support scale up within the target counties, which are themselves geographically extensive, and nationally throughout Kenya, based on stronger capacities and institutionalization of effective land use planning and integrated management of natural resources. The programme provides technical and capacity building support to county governments at a time when Kenya is implementing its new policy of devolution and the programme is designed to accelerate implementation of this policy. The counties of Northern Kenya are among the greatest beneficiaries of the new policy and have great potential to improve governance and investments at the local level in Kenya s arid and semi-arid lands. Kenya s northern pastoralist are already climate resilient surviving in dry landscapes and adapted to climate variability. Coupling devolution with the recognition and enabling of these strong (albeit weakened) community governance structures and marginalised knowledge of the dry rangelands will be a powerful recipe for transformation. The programme will provide major impetus towards institutionalizing inter-sectoral land use planning and citizen consultation for more responsive and accountable governance and investment.

14 GREEN CLIMATE FUND PAGE 12 OF 5 The programme will strengthen the use of participatory assessment and monitoring of landscape health and resilience which will enable better targeting of investments, better identification of successful approaches, and prioritization of future investment needs. It will also contribute to scaling up the strengthening of local (community) governance and management of land, which is a major bottleneck to Sustainable Rangelands Management (SRM). The programme will apply proven and innovative financing mechanisms in partnership with private investors (including finance institutions) and will support the development of investment plans that can take advantage of the improvements in local governance and tenure. Overall, the aim is to create the conditions that catalyse more spontaneous adoption of SRM by communities and local government. The programme will mobilize untapped capacities at the local level to catalyse County-led processes. This will enable a more coherent approach to scaling up the numerous small-scale approaches to sustainable development and restoration, but which are currently fragmented and poorly validated. Potential for knowledge and learning IUCN is a science-based organization and pays significant attention to Knowledge and Learning including nature-based solutions to climate change. This programme will draw on the expertise of the 6 IUCN Scientific Commissions as well as working closely with national scientific institutions. The programme will use improved assessment and monitoring to inform scaling up and to demonstrate effective landscape approaches and good practices. Rangelands and drylands are currently not well covered in work on Landscape Restoration and present a particular case for which the programme will provide valuable lessons that will have relevance beyond Kenya (e.g. some types of tree increase are a form of degradation). The programme will conduct learning into resilience approaches that are specifically adapted to the unique climatic, ecological and socio-economic challenges of the rangelands. The programme will use a Knowledge Management approach that recognizes the rich foundation of local and indigenous knowledge, the added value of scientific knowledge, and the need to build capacities and mechanisms through which that collective knowledge can be enabled and mobilized to influence decision making at all levels. Contribution to the creation of an enabling environment The programme is designed to establish an enabling environment for large scale adoption of landscape restoration approaches and Sustainable Rangelands Management (SRM). This will include integrating trees and shrubs into grazing systems (pastoral managed natural regeneration among others) as well as agroforestry for crop production systems. The programme will build human and institutional capacities, as well as enabling and incentivizing existing capacities, and will strengthen the collection and use of evidence to establish stronger and more equitable decision-making processes. The programme will contribute to stronger governance and resource tenure which will enable collective action for SRM and will support the establishment of improved planning processes. Support will be provided to community organizations to better represent communities in county planning, and to county governments to ensure effective space for public dialogue and this will be used to improve input into policy development. Particular attention will be paid to enabling women to claim their rights and to assert their roles in natural resource management and community adaptation. The programme will support devolution to the most appropriate level, which in some case may mean below the level of the county (e.g. community level decision-making) and in other cases may require decision making at higher levels, including planning over resource shared between counties or decision making at the national level. The programme will provide both ward level and community-level funds. At the community level, this will be a performance based fund that will remain as a long-term asset within the community but also provide a social safety net. Through partnerships with the private sector including a micro credit finance institution, it is expected to attract further private sector capital flows towards investments in viable commercial activities on a longer term basis. Contribution to the regulatory framework and policies In general, Kenya has many supportive policies and legal framework under the 2010 constitution, and new legislation has recently being enacted on communal land and forests. Many of these polices are not yet implemented in many counties and have not been integrated with existing policies and laws. Implementation and monitoring of policy and laws remain a challenge, and the programme will put this ahead of advocating for new policies and laws. This will require the above mentioned support for dialogue and innovation as well as scientific and technical support and the building of local capacities.

15 GREEN CLIMATE FUND PAGE 13 OF 5 Figure: IUCN framework for contribution to the SDGs D.3. Sustainable development potential [Potential to provide wider development co-benefits ] KEY: Primary Goals: Life on Land (15), Climate Action (13), Peace, Justice and Strong Institutions (16), Responsible Consumption and Production (12). Secondary Goals: Clean Water (6), Sustainable Energy (7), Gender Equality (5), Partnerships (17), Green Economy (8). Tertiary Goals: Industry, Innovation & Infrastructure (9), Sustainable Cities and Communities (11), Reduced Inequality (10). Ultimate Goals: Zero Hunger (2), No Poverty (1), Health (3), Quality Education (4). IUCN has developed a nested approach to the Sustainable Development Goals (SDG). The framework for this recognizes that in a landscape the economic system of the community is a subset of their social system. People live in and depend on the landscape and hence the social system is nested within predominant ecosystem or ecosystems of the landscape. The ecological system is influenced by the climate system and the changes that is undergoing and is seen as nested within climate. At the landscape level, these systems are influenced by events at lower levels (e.g. villages and wards), and at the higher levels, county, regional, national and supranational policies influence and happen. Thus, it is possible to see that the dryland landscapes of Northern Kenya are home to pastoralist communities, with their social, cultural and economic system based on livestock. National policies and development initiative influence these. Wherever possible, the GCF and SDG indicators will be used for these targets in the programme, currently these are under development and will be developed further in the feasibility and programme proposal development stage. Economic co-benefits - Incomes and livelihoods: estimated increase in household incomes of 25% in target households. - GDP saved from reduced disasters (e.g. from 2011 drought). - Provision of rangeland direct sales e.g. livestock (meat, milk, hides), tourism, bio-enterprise (gums, resins, aloes), and crop agriculture (PPP around value chains and investments). - Community incentives by climate smart lending and eco-credit as co-investment in ecosystem services (CECF & CSLP).