Terms of Reference IMPLEMENTATION AND MONITORING PLAN FOR PES INITIATIVES IN MID- MARSYANGDI WATERSHED

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1 Terms of Reference IMPLEMENTATION AND MONITORING PLAN FOR PES INITIATIVES IN MID- MARSYANGDI WATERSHED 1. BACKGROUND INFORMATION Hariyo Ban Program is a USAID funded program with a major goal to reduce adverse impacts of climate change and threats to bio-diversity. There are three key objectives of the program focused on reduction of threats to bio-diversity, ensure effective sustainable landscape management with strong emphasis on reducing emissions from deforestations and forest degradation (REDD+) and increasing capacity to adapt to adverse impacts of climate change. Livelihood, governance along with gender and social inclusion are three cross cutting themes. PES is one of the mechanisms to promote sustainable landscape management. Hariyo Ban Program aims to initiate some PES piloting in its working areas. An ecosystem is the most basic level of a natural unit defined by the network of interactions among biotic (flora, fauna and micro-organisms) and biotic (physical environment) components linked through nutrient cycling and energy flows. Well-functioning ecosystems provide wide range of services such as consistent and clean flows of water, productive soil, relatively predictable weather and various other services essential for human well-being - collectively known as Ecosystem Services (ESs) (Forest Trends, the Katoomba Group and UNEP, 2008). Principally, these ESs in many cases, have the public goods nature (non-excludability) that it is very difficult for the ES owners or the ES providers to exclude others from using the services (free-ridding). Further, ESs, in other cases, are non-rivalry and overlapped that the use of ESs by one does not reduces the opportunity for other to use and producing one ES produces another at the same time as positive externality. Biodiversity conservation, watershed functions, carbon sequestration, landscape beauty generated from the managed ecosystems are few examples of positive externalities which provides benefits to the society as a whole but the cost of managing such ecosystem is incurred by a specific entity whether the state, community or individual. However, the beneficiaries pay little or nothing for maintaining and enhancing the ecosystem services that they have received so far. In most of the cases, the forests are undervalued in comparison to their alternative land uses leading to deforestation and forest degradation. This necessitates the proper incentivizing mechanism so that the producers maintain the ESs in long run without diminishing them. Payment for Ecosystem Services (PES) attempts to correct this market failure by providing benefits from the service users to the ecosystem service providers. The key intention is to internalize the benefits and cost associated with the ecosystem services. The absence of payment may trigger the ESs owners or producers to avert or change the practices posing threat to the sustained supply of the ESs in long run. For example, in extreme cases, the forest owner (private or community) can change the land use, management type and intensity having direct impact on sustained flow of ESs. PES is the market based mechanism in which the transaction of a welldefined ES takes place voluntarily between at least a buyer (service user) and a seller 1

2 (service provider) provided that the service provider ensures continuous provisioning of the ES (Wunder, 2005). As the PES is one of the mechanism to promote sustainable landscape management, Hariyo Ban Program also aims to initiate some PES practices in its working area. Recently a preliminary assessment for piloting PES has done in Lamjung as one of the working districts of Hariyo Ban Program with enough natural resources. The study has identified Hydropower and Eco-tourism as top two important ecosystem services in Lamjung. For the effective valuation and mapping of ESs, Mid-Marsyangdi Watershed was divided into five subwatersheds during the assessment. The analysis at sub-watershed level showed that the southernmost part of the Mid Marsyangdi watershed is the priority one sub-watershed considering the sediment loss amount (173.08t/ha), sediment retention capacity ( t/ha) and sediment export (42.11 t/ha). The overlay of VDC boundaries to the sediment export map showed that Bahundanda, Bajhakhet, Balungpani, Bansar, Besishahar, Bhujung, Bhulbhule, Chandisthan, Chiti, Gaunshahar, Ghanpokhara, Hiletaksar, Khudi, Nalma, Puranokot, Simpani, Taghring, Tarku, Udipur, Uttarkanya that fall under sub-watershed 5 are the VDCs losing maximum amount of soil. In addition, Mid-Marsyangdi Hydropower Project records showed the increasing trend in the silt at intake and consequent increase in damage to the runner blades and other turbine components. In fiscal year 2069/70 alone, Mid Marsyangdi Hydropower Project spent more than NRs. 8,000,000 in maintenance of dam site equipments and the turbine components. With increase in the sediment load in Marsyangdi river this expense is likely to increase in future. Thus, sedimentation, indeed, is a serious threat to hydropower production in Mid- Marsyangdi Watershed. Therefore, reduction in sediment export is essential in the prioritized zone of Mid Marsyangdi Watershed to minimize the cost of electricity production of Mid Marsyangdi Hydropower as well as to continue its production for future. Based on the stakeholder's consultation workshop, priority 1 sub-watershed including Ghermu VDC are prioritized for PES piloting in Lamjung and the project has named as Payment for Sediment Retention (PSR). Following the study findings, key stakeholders committee of five members including District Development Committee (DDC), District Forest Office (DFO), District Soil Conservation Office (DSCO), District Agriculture Development Office (DADO) and Federation of Nepal Chambers of Commerce and Industry (FNCCI) is formed to discuss and decide on strategies and to initiate further steps for PES mechanism in Lamjung. A local implementing partner for capacity building activities on PES has also been contracted as per CARE's partnership guidelines which is facilitating for PES sensitization in the priority area. Meanwhile, an explicit PES implementation and monitoring plan is necessary to track all PES initiatives and its timely monitoring through the responsible persons to accomplish the PES initiatives on time. To accomplish this task, Hariyo Ban Program, CARE Nepal is hiring an external consultant. 2

3 2. OBJECTIVES The overall objective of this assignment is to establish a PES mechanism for hydropower generation in Marsyangdi watershed through sediment retention in the upper catchments. The specific objectives are: To prepare implementation plan (including key objectives, content, duration, strategy, process, budget, responsible person, tools, time of implementation) to specify potential buyers, fund generation strategy, payment mechanism, benefit sharing mechanism considering the equity and fairness criteria and fund utilization strategy To develop a PES monitoring plans including details like indicators, source of monitoring information, time frame, means of verification and responsible person for sediment retention in the upper catchments of Mid-Marsyangdi watershed to promote sustainable hydropower generation. Develop a template for the memorandum of understanding between the identified service providers and service receivers to implement the PES mechanism 3. SCOPE Review the final report of preliminary study for piloting PES in Lamjung and similar reports undertaken by Hariyo Ban Program and other agencies Gather the required information, review and document the previous meeting minutes regarding the PES implementation in Lamjung Specify the potential buyers of identified ecosystem service, sustainable fund generation strategy, payment mechanism, equity and fairness criteria for benefit sharing and priority activities to enhance sediment retention or fund utilization Develop an implementation and monitoring plan to have all planned activities on track including indicators, verifiers, time frame, methods of information collection, and means of verification and responsible person or institution Design a template for an appropriate contract/mou between service providers and service receivers Stakeholders consultations and sharing of draft findings and finalize it incorporating all the comments, feedbacks and comments received through the respective team members. 4. ACTIVITIES AND METHODS The consultant should follow the detailed methodology as follows: Review the final report of preliminary assessment for piloting PES in Lamjung and other relevant reports of other PES initiatives in and outside of Nepal. Consultation workshops to specify the detailed implementation plan to identify and negotiate for appropriate PES model (including buyers, receivers, ecosystem service, necessary claws), fund generation strategy, payment mechanism, equity and fairness criteria for benefit sharing, fund utilization strategy with specific activities to be implemented. Develop monitoring plan including indicators, source of monitoring information, time frame for monitoring, means of verification and responsible person or institution for each 3

4 of the elements of PES initiatives in Lamjung like PES model, fund generation strategy, payment mechanism, equity and fairness criteria for benefit sharing and fund utilization strategy with specific activities to be implemented. Prepare a template for the memorandum of understanding between the identified service providers and service receivers to implement the PES mechanism 5. TEAM COMPOSITION AND QUALIFICATION a. NRM Expert having MSc in NRM or other related field and having at least 5 years of demonstrated working experience and knowledge in ecosystem services, valuation and PES assessments and financing. b. Environment Lawer having previous experiences in PES like schemes. 6. DURATION Tentative 8 weeks of period starting from Mid September to December 2014 is planned period for this task. 7. SUPERVISION AND COORDINATION The consultant will closely work with and report to Ms. Pabitra Jha, REDD Specialist Hariyo Ban Program CARE Nepal, Pokhara. Overall technical advice will be provided by Mr. Keshav Prasad Khanal, Sustainable Landscape Coordinator, Hariyo Ban Program, Kathmandu, WWF Nepal. Administrative arrangement will be managed by Mr. Dev Raj Gautam, Team Leader, Hariyo Ban Program CARE Nepal. The consultant will contact relevant government line agencies and other Hariyo Ban Program core partners based on relevancy. 8. DELIVERABLES AND TIMEFRAME 1 st to 2 nd week: Inception report with detailed methodology 3 rd to 4th week: Field visit and stakeholders consultation 5 th week: Draft PES implementation and monitoring plan 6 th week: Draft MoU between service provider and service receivers 7 th to 8 th week: Submission of final report including the detailed PES implementation and Monitoring Plan and MoU template 9. ROLES AND RESPONSIBILITY 9.1. CARE/HARIYO BAN Program: Provide technical back-up through close cooperation and communication to the selected consultant to ensure that they clearly understand the work to be done and adhere to the agreed work plan. 9.2.CONSULTANT 4

5 Prepare a clear roadmap, detailed methodologies (based on participatory approaches), lists of required information (and standards for data management and analysis), work plan, schedule and risk log as required to accomplish the task Compile, interpret and elaborate the findings in line with the objectives Submit the deliverables within the contract time frame 9.3. LOGISTIC SUPPORT The consultant will manage their logistics for the completion of this assignment themselves. 5