Sustainable Tourism Development Project (Phase 2): Report and Recommendation of the PresidentReport and Recommendation of the President to the Board of Directors
Project Number: 51422-002 October 2021
Proposed Loan and Administration of Grant Mongolia: Sustainable Tourism Development Project (Phase 2)
Distribution of this document is restricted until it has been approved by the Board of Directors. Following such approval, ADB will disclose the document to the public in accordance with ADB’s Access to Information Policy.
CURRENCY EQUIVALENTS
Currency unit – togrog (MNT) MNT1.00 = $0.00035
$1.00 = MNT2,848.18
ABBREVIATIONS
ADB – Asian Development Bank ASDIP – Aimags and Soums Green Regional Investment Development
Program CAREC – Central Asia Regional Economic Cooperation CBO – community-based organization COVID-19 – coronavirus disease CRF – community revolving fund CSO – civil society organization EMP – environmental management plan GDP gross domestic product ha – hectare JFPR – Japan Fund for Poverty Reduction KKNP – Khan Khukhii National Park KUNNP – Khar Us Nuur National Park MET – Ministry of Environment and Tourism MSMEs – micro, small, and medium-sized enterprises O&M – operation and maintenance OP – operational priority PAM – project administration manual PIU – project implementation unit TSC – Tsenkher Cave UVSPA – Uvs Nuur Basin Strictly Protected Area UVTC – Uvs tourism complex WASH – water, sanitation, and hygiene
GLOSSARY
In this report, “$” refers to United States dollars.
Vice-President Ahmed M. Saeed, Operations 2 Director General M. Teresa Kho, East Asia Department (EARD) Director Thomas Panella, Environment, Natural Resources, and Agriculture
Division (EAER); EARD Team leaders Mark R. Bezuijen, Principal Environment Specialist, EAER, EARD Ongonsar Purev, Senior Environment Officer, Mongolia Resident Mission
(MNRM), EARD Team members Tahmeen Ahmad, Financial Management Specialist, Public Financial
Management Division; Procurement, Portfolio and Financial Management Department
Erika Joy Arcillas, Project Analyst, EAER, EARD Tuul Badarch, Senior Project Officer (Infrastructure), MNRM, EARD Carmen M. Garcia Perez, Regional Cooperation Specialist, Regional
Cooperation and Operations Coordination Division, Central and West Asia Department
Annabelle C. Giorgetti, Environmental Economist, EAER, EARD Arnaud Heckmann, Principal Urban Development Specialist, Urban and
Social Sectors Division, EARDa Yoshiaki Kobayashi, Principal Water Resources Specialist, EAER, EARD Christopher L. Morris, Principal Social Development Specialist, NGO and
Civil Society Center, Sustainable Development and Climate Change Department (SDCC)
Heekyung Nam, Counsel, Office of the General Counsel Erdenesaikhan Nyamjav, Associate Social Development Officer
(Safeguards), MNRM, EARD Arun Ramamurthy, Senior Infrastructure Specialist (Digital Technology),
Sustainable Infrastructure Division, EARD Noreen Joy Ruanes, Senior Operations Assistant, EAER, EARD Nogendra Sapkota, Senior Social Development Specialist, EAER, EARD Steven Schipani, Unit Head, Project Administration, Viet Nam Resident
Mission, Southeast Asia Department Peer reviewers Hong Soo Lee, Senior Urban Specialist (Smart Cities), Urban Sector
Group (SDSC-URB), SDCC Aldrin B. Plaza, Urban Development Officer, SDSC-URB, SDCC Francesco Ricciardi, Senior Environment Specialist, Safeguards Division,
SDCC a Outposted to the Mongolia Resident Mission.
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.
CONTENTS
Page
I. THE PROPOSAL 1
II. THE PROJECT 1
A. Rationale 1 B. Project Description 5 C. Value Added by ADB 6 D. Summary Cost Estimates and Financing Plan 7 E. Implementation Arrangements 8
III. ATTACHED GRANT ASSISTANCE 9
IV. DUE DILIGENCE 9
A. Technical 9 B. Economic and Financial Viability 10 C. Sustainability 10 D. Governance 10 E. Poverty, Social, and Gender 10 F. Safeguards 11 G. Summary of Risk Assessment and Risk Management Plan 12
V. ASSURANCES 12
VI. RECOMMENDATION 12
Project Classification Information Status: Complete
PROJECT AT A GLANCE
Source: Asian Development Bank This document must only be generated in eOps. 20052021081454926202 Generated Date: 24-May-2021 17:44:05 PM
1. Basic Data Project Number: 51422-002 Project Name Sustainable Tourism Development Project
(Phase 2) Department/Division EARD/EAER
Country Economic Indicators
https://www.adb.org/Documents/LinkedDocs/ ?id=51422-002-CEI
2. Sector Subsector(s) ADB Financing ($ million) Agriculture, natural resources and rural development
Land-based natural resources management 2.30
Rural sanitation 2.30
Industry and trade Trade and services 20.00
Water and other urban infrastructure and services
Renovation and protection of cultural heritage 0.80
Total 30.00
Accelerating progress in gender equality
Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability Making cities more livable
Promoting rural development and food security
Strengthening governance and institutional capacity
Fostering regional cooperation and integration
GHG reductions (tons per annum) 3,343.800 Climate Change impact on the Project
Medium
Adaptation ($ million) 0.00
Mitigation ($ million) 0.00
Sustainable Development Goals Gender Equity and Mainstreaming SDG 1.5 SDG 5.5 SDG 6.2, 6.3, 6.6 SDG 8.9 SDG 10.2 SDG 11.4, 11.7, 11.a, 11.c SDG 13.a SDG 15.4
Effective gender mainstreaming (EGM)
Poverty Targeting Geographic Targeting
4. Risk Categorization: Low .
.
ADB 30.00
Cofinancing 2.00
Japan Fund for Poverty Reduction - Project grant (Full ADB Administration) 2.00
Counterpart 0.30
Government 0.30
Total 32.30
Altan Els
Tes River
Tourist Street
Tourist Street Rock Art and Nomadic Culture Center and Digital Museum
Uvs Tourism Complex
Khan Khukhii National Park
Ulgii
Tsengel
TA -MON: Aimags and Soums Green Regional Investment Development Program
UWHS Uvs Lake Basin
Protected Area
Border Crossing: Loan -MON: Regional Improvement of Border Services Project (Additional Financing)
Loan -MON: Western Regional Road Corridor Investment Program (Tranche ) Loan -MON: Western Regional Road Corridor Investment Program (Tranche )
MONGOLIA SUSTAINABLE TOURISM
DEVELOPMENT PROJECT (PHASE )
MONGOLIA
210135 17 MON ABV
This map was produced by the cartography unit of the Asian Development Bank. The boundaries, colors, denominations, and any other information shown on this map do not imply, on the part of the Asian Development Bank, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries, colors, denominations, or information.
I. THE PROPOSAL 1. I submit for your approval the following report and recommendation on a proposed loan to Mongolia for the Sustainable Tourism Development Project (Phase 2). The report also describes the proposed administration of a grant to be provided by the Japan Fund for Poverty Reduction (JFPR) for the Sustainable Tourism Development Project (Phase 2), and if the Board approves the proposed loan, I, acting under the authority delegated to me by the Board, approve the administration of the grant. 2. The project will support the development of tourism in three aimags (provinces) of western Mongoliaan area of national priority for economic developmentfocused on inclusive benefits for communities, nature-based solutions to protect wilderness and heritage values, and post- coronavirus disease (COVID-19) recovery and resilience.1 The project will build the capacity of residents and a small but growing private sector for community-based tourism, create jobs through the establishment of tourist streets and visitor complexes, and strengthen the management of five globally important protected areas and heritage sites through improved visitor and sanitation facilities. The designs are based on post-COVID-19 tourism recovery projections, sanitation measures aligned with health and border procedures, and building standards for green and climate-resilient infrastructure. About 16,296 residents are expected to benefit from the project through tourism-related skills and income.
II. THE PROJECT A. Rationale 3. Prior to the outbreak of COVID-19, tourism was the largest and fastest-growing sector of the global economy. Ecotourism, a major subsector, has comprised up to 20% of global tourism and is a key contributor to rural incomes and the financing of protected areas in many countries.2 Mongolia has a small but emerging tourism sector. In 2019, tourism accounted for 7.2% of Mongolia’s gross domestic product (GDP), generating $989.2 million, 7.6% of total employment, and 88,500 jobs. International visitor arrivals in 2019 (577,300) increased by 6.4% compared with 2018, and the tourism sector’s annual GDP growth (11.9%) significantly exceeded national GDP growth (5.6%).3 By 2030, tourism was forecast to comprise 11% ($1.5 billion) of GDP, provide 95,000 jobs, and attract 1 million international arrivals annually. The global spread of COVID-19 in 2020 resulted in national border closures in Mongolia, the decline–to almost zero–of international arrivals, and estimated losses in tourism revenue of more than $421 million.4 Long-term projections of the impact of COVID-19 on Mongolia’s tourism sector are not yet available, but recovery scenarios for Asia and the Pacific suggest that a return to pre-COVID-19 international visitor numbers will only occur by about 2023 (footnote 4). 4. Developing Mongolia’s tourism sector is a high national priority to diversify the economy and create jobs. As short-term emergency efforts to address the immediate impacts of COVID-19 are completed, there is a need for longer-term projects which contribute to economic revitalization combined with strengthening resilience to the risk of future disease outbreaks. Mongolia ranks moderately in the Travel and Tourism Competitiveness Index (in 2019, Mongolia was ranked 93rd
1 The Asian Development Bank (ADB) provided technical assistance to design the project. ADB. 2021. Technical
Assistance to Mongolia for the Sustainable Tourism Development Project (Phase 2). Manila. 2 Ecotourism is defined as “responsible travel to natural areas that conserves the environment, sustains the well-being
of local people, and involves interpretation and education.” The International Ecotourism Society. 2015. 3 World Travel and Tourism Council. 2020. Travel and Tourism Economic Impact 2020 Mongolia. London. 4 United Nations World Tourism Organization. 2021. UNWTO Tourism Data Dashboard.
out of 140 economies evaluated).5 Existing challenges include low service standards, inadequate infrastructure, and a short tourism season due to harsh winters. Government plans to develop tourism focus on nature- and heritage-based tourism in protected areas, yet most of these sites are underfunded and located in remote regions of high poverty. Tourism, if inadequately managed, may result in negative ecological and cultural impacts, and provide few local benefits. Domestic tourism, although largely undocumented, is increasing rapidly in Mongolia and will also be an important component of post-COVID-19 economic recovery. 6 To address these issues, the government is implementing the National Program on Tourism Development, 2016–2025, which aims to establish Mongolia as a global destination for nomadic culture.7 The program outlines a phased approach that prioritizes investments in visitor facilities, transport and sanitation infrastructure, and community-based products and services. Following projects initiated in northern and central Mongolia, including support from the Asian Development Bank (ADB) (para. 10), western Mongolia is prioritized by the government for tourism development. 5. Western Mongolia comprises the three aimags of Bayan-Ulgii, Khovd, and Uvs, and borders the People’s Republic of China and the Russian Federation. Much of the area is characterized by extreme remoteness and limited economic development. It also supports a unique cultural heritagethe richest and most well-preserved rock art (ancient images on rock) in northern Asia, the highest number of ethnic groups in Mongolia, and a network of protected areas which includes two World Heritage sites and four Wetlands of International Importance. Each aimag supports small but operational domestic airports, new roads linking with the national capital (Ulaanbaatar), and international border crossings. Poverty rates are high and rural populations depend largely on subsistence agriculture. Visitor numbers are small, but prior to COVID-19 were increasing rapidly.8 Growing attractions include five locations with road access from the aimag centers and border crossings: Altai Tavan Bogd National Park (Bayan-Ulgii), Khar Us Nuur National Park (KUNNP) and Tsenkher Cave (TSC) (Khovd), and Khan Khukhii National Park (KKNP) and Uvs Nuur Basin Strictly Protected Area (UVSPA) (Uvs). These sites encompass over 2.1 million hectares (ha) of wilderness, biodiversity, and rock art.9 The early stage of tourism development in western Mongolia provides a timely opportunity to support sector planning, livelihoods, and conservation. To achieve this will require a focus on four key areas, as follows. 6. Limited inclusive planning and community benefits. Few residents in western Mongolia are currently able to derive income from tourism.10 This is due to several linked factors. At the institutional level, a regional planning approach is required to promote priority destinations;
5 World Economic Forum. 2019. The Travel & Tourism Competitiveness Report 2019. Geneva. 6 M. Helble and A. Fink. 2020. Reviving Tourism amid the COVID-19 Pandemic. ADB Briefs No. 150: 1–13. Manila. 7 Government of Mongolia. 2015. National Program on Tourism Development, 2016–2030. Ulaanbaatar. 8 In 2020, the population of western Mongolia was 279,121. Youth (15–34 years old) comprised 32.9% (91,831) of the
population versus a national mean of 30.0%, and households headed by women comprised 10.4% (29,029) versus a national mean of 7.7%. The poverty rate was 24.3% (Bayan-Ulgii), 40.1% (Khovd), and 29.6% (Uvs) versus a national mean of 28.4%. GDP per capita was $1,305 (Bayan-Ulgii), $1,579 (Khovd), and $1,688 (Uvs) versus a national mean of $3,696. During 2015–2019, annual tourist numbers to western Mongolia increased from about 44,725 to 141,360: 24,477 to 67,908 (Bayan-Ulgii), 12,668 to 42,538 (Khovd) and 7,580 to 30,914 (Uvs). Visitors comprised domestic (81%) and international (19%) tourists, the latter largely from Kazakhstan, the People’s Republic of China, and Russian Federation, via overland travel. National Statistical Office. 2021. www.1212.mn. Ulaanbaatar.
9 Altai Tavan Bogd National Park (630,000 ha, designated in 1996) includes one World Heritage site, the Petroglyphic Complexes of the Mongolian Altai (11,300 ha, 2011). The KUNNP (850,272 ha, 1997) and UVSPA (424,298 ha, 1993) are Wetlands of International Importance; the UVSPA is part of the Uvs Nuur Basin World Heritage Site (898,064 ha, 2003). The KKNP (221,598 ha, 2000) includes Khyargas Lake, a popular tourism destination. The TSC is an unprotected cave system with the oldest rock paintings in Mongolia. In 2019 (i.e., pre-COVID-19) these sites received about 36,339 visitors (about 25.7% of total visitor numbers to western Mongolia). They are located in 13 soums, which in 2020 supported 113,106 residents (40.5% of the population of western Mongolia).
10 Tourism-related income includes guiding services, handicraft sales, food supply chains, and tour camp employment.
develop travel routes that maximize benefits to communities; and define minimum standards for accommodation, goods, and services. Aimag tourism plans, prepared during 2015–2019, prioritize community-based tourism; support for micro, small, and medium-sized enterprises (MSMEs); and capacity building but lack specific actions to support these. Tour camps present a potential source of local jobs, yet the issuance of tour camp concessions is not based on systematic procedures or social and environmental standards.11 Elsewhere in Mongolia, these issues have favored external operators (who have greater access to finance and external markets), provided few benefits to local communities, and caused environmental damage. Communities also have inadequate access to credit and training to produce quality goods (e.g., handicrafts) or services (e.g., food supplies, guiding). These limitations are greater for women, who have fewer job and leadership opportunities despite higher educational standards, and have worsened because of COVID-19, which has disproportionately impacted rural communities.12 7. Insufficient enabling infrastructure. There are few public facilities in western Mongolia to catalyze tourism. The aimag centers of Khovd and Uvs are the gateways by land and air for most visitors to the area, yet there are no visitor centers or other facilities to provide information, promote local goods and services, or highlight the region’s tourism values. Protected areas close to urban and rural centers (para. 5) support rising visitor numbers, yet public access is uncontrolled and there are few barrier gates, signs, or car parks. This is contributing to seasonal congestion and damage to sensitive habitats and is impacting the visitor experience. 8. Inadequate sanitation and waste management. There are no organized systems for solid-waste collection and sewage treatment for protected areas, and tour camp sanitation standards are low. Public toilets are mostly unlined pits, and sewage seeps into the soil and waterbodies. The KKNP, KUNNP, and UVSPA support unique lake systems within closed river basins, rendering them especially vulnerable to disturbance, and some lakes already exhibit seasonal eutrophication (algal blooms) due to nutrient inputs from unmanaged sewage and other land use. Poor sanitation poses health risks and is also a key factor in low visitor satisfaction. Tourists can be high-risk vectors for disease spread, especially to remote communities, and there is a need to establish health and sanitation standards for key tourism sites. Improved sanitation is a critical component for post-COVID-19 tourism recovery and strengthening the resilience of rural areas to the risk of future disease outbreaks.13 Solutions to address these issues need to include small, decentralized sanitation systems at tourism sites, tailored to local conditions and visitor numbers, and health and safety measures established at tour camps and public campsites. 9. Inadequate management of cultural heritage sites and protected areas. The rock art of western Mongolia is a unique resource that, if managed sustainably, can provide jobs through guiding and the preservation of cultural heritage. Yet most sites are unmanaged and subject to increasing damage. The TSC is a key stop on visitor itineraries yet is unprotected, and some cave paintings have been damaged by vandalism or theft.14 There is also no centralized facility in Mongolia to document and promote rock art. For protected areas, visitors are an important source of potential revenue, yet most sites lack ticket collection stations, campsites are poorly managed,
11 Western Mongolia has a small and undeveloped private sector, focused mainly on agriculture. In 2020, (i) 4,803
registered MSMEs were located in western Mongolia (5.5% of the national total), yet only 184 (7.8%) were involved in accommodation and/or food services; (ii) only 1.1%–2.4% of employed residents (1,486 women and 101 men) worked in accommodation and food services; and (iii) 45 tour camps (Bayan-Ulgii–15, Khovd–11, Uvs–19) with a total of 117 employees) were operating, compared with some locations elsewhere in Mongolia which support more than 80 tour camps in a single park. National Statistical Office. 2021. www.1212.mn. Ulaanbaatar.
12 In 2020 over 58% of rural households in Mongolia were unable to generate income due to lockdowns followed by rising food prices. World Bank. 2021. Monitoring COVID-19 Impacts on Households in Mongolia. Washington, DC.
13 Goretti et al. 2021. Tourism in the Post-Pandemic World. Washington, DC: International Monetary Fund. 14 E. Jacobson-Tepfer. 2006. The Rock Art of Mongolia. The Silk Road. 4 (1). pp. 5–13.
and staff do not have the training to plan for and manage tourism growth. Government management plans exist for most sites, yet they focus on biodiversity conservation and lack guidelines or targets for livelihoods, tourism, and sanitation. Site management also requires the assessment of natural hazards and climate change since western Mongolia is experiencing rising temperatures and increasing frequency and severity of storms and drought, which may threaten visitor safety and the integrity of tourism infrastructure. 10. Government and donor efforts are addressing some of these issues. Cross-border tourism agreements have been established to facilitate regional travel, and in 2019 under a national skills program, about 970 residents in western Mongolia received free tourism training to improve existing tourism services. Support for protected area management is being provided, especially by two civil society organizations (CSOs), The Nature Conservancy and World Wide Fund for Nature, and two development agencies, GIZ and KfW. For rock art, a digital inventory of archaeological values in Bayan-Ulgii aimag has been developed,15 and a management plan for the TSC has been prepared. Support by ADB for western Mongolia that has benefited tourism includes the upgrade of roads, border crossings, health facilities, urban infrastructure, agriculture value chains, and private sector development.16 At the national level, tourism feasibility studies, training in service standards, and small grant support have been provided by the United Nations, CSOs, and development agencies. During 2015–2019, ADBwith JFPR funding supportled the development of the first grant and lending projects for tourism in two national parks in northern Mongolia. These projects, termed phase 1, resulted in new models for community-based tourism and a basis to scale up ADB support for tourism to other priority regions in Mongolia.17 11. Strategic fit. The project is aligned with Mongolia’s National Program on Tourism Development, 2016–2025 (footnote 7) which prioritizes the development of western Mongolia. It supports ADB’s draft country partnership strategy for Mongolia, 2021–2024 for green development; is listed in the country operations business plan, 2021; and supports ADB’s Strategy 2030 seven operational priorities for addressing poverty, gender equality, climate resilience and environmental sustainability, livable cities, rural development, governance, and regional cooperation and integration.18 The project has been designed in parallel with preparation of the ADB-supported Central Asia Regional Economic Cooperation (CAREC) Tourism Strategy 2030, and its associated regional tourism investment framework, 2020–2025. Western Mongolia is part of the Altai priority cluster group, one of seven regions identified in the strategy for tourism support. The project is among the first tourism projects to be developed since approval of the strategy and responds to the need for improved visitor sanitation facilities in the Altai priority cluster group.19 12. Lessons. The project incorporates lessons from ADB support under phase 1 (footnote 17) and projects by other agencies. These experiences highlight the need for a multisector approach that addresses the linked issues of tourism, livelihoods, waste, and conservation
15 University of Oregon. 2009. Archaeology and Landscape in the Altai Mountains of Mongolia. 16 ADB. 2021. Technical Assistance to Mongolia for Preparing the Aimags and Soums Green Regional Development
Investment Program. Manila; ADB. 2019. Additional Financing: Regional Improvement of Border Services Project in Mongolia. Manila; ADB. 2019. Completion Report: Fostering Value-Added Activities in Western Mongolia. Manila; and ADB. 2020. Western Regional Road Corridor Investment Program-Tranche 2. Manila.
17 ADB. 2015. Integrated Livelihoods Improvement and Sustainable Tourism in Khuvsgul Lake National Park Project. Manila; and ADB. 2019. Mongolia: Sustainable Tourism Development Project. Manila. Outputs included the design of community revolving funds (CRFs), decentralized toilet systems, and improved park zoning.
18 ADB. Forthcoming. Country Partnership Strategy: Mongolia, 2021–2024. Manila; ADB. 2019. Country Operations Business Plan: Mongolia, 2021. Manila; and ADB. 2018. Strategy 2030: Achieving a Prosperous, Inclusive, Resilient, and Sustainable Asia and the Pacific. Manila.
19 ADB. 2020. CAREC Tourism Strategy 2030. Manila. CAREC is a partnership of 11 countries working to promote regional development. The strategy aims to promote sustainable, safe, and inclusive tourism development.
tailored to local conditions; green and climate-resilient infrastructure designs that incorporate growth projections and cost efficiency; decentralized sanitation solutions for remote sites; capacity building, focused especially on the role of women and youth; and measures that address the crosscutting issues of climate change and resilience to COVID-19. B. Project Description 13. The project is aligned with the following impact: sustainable tourism development in Mongolia improved and diversified (footnote 7). The project will have the following outcome: sustainability and inclusiveness of tourism in western Mongolia increased.20 14. Output 1: Inclusive planning and capacity for community-based tourism enhanced. This output will strengthen the institutional framework for tourism and increase the number of local beneficiaries from tourism. The project will (i) prepare the first tourism master plan for western Mongolia, which will define limits for tourism development based on stakeholder consensus and growth projections, travel routes which maximize benefits for communities, and actions to support post-COVID-19 sector recovery; (ii) strengthen the three aimag tourism plans to establish targets for livelihoods, conservation, and sanitation aligned with parallel ADB projects on health and border procedures; (iii) establish the first tour camp concession manual and certification program for western Mongolia to embed social and gender targets and environmental standards in commercial operations, strengthen links with local goods and services, and provide a stable business framework for about 45 tour camps with 117 employees; (iv) construct two tourist streets in the Khovd and Uvs aimag centers and nine women-led markets, to showcase and sell local products; and (v) implement a pilot tourism development program for communities and MSMEs, comprising vocational training, a community revolving fund (CRF), youth incubator, and the establishment of about 13 community-based organizations (CBOs).21 About 8,162 residents (50% women and 30% youth) will benefit from tourism-related businesses and value chains. 15. Output 2: Enabling infrastructure constructed. This output will (i) construct the first tourism center in western Mongolia—the Uvs tourism complex (UVTC) in Uvs aimag; (ii) establish supporting infrastructure for the UVTC, including car parking and extension of the aimag power line to the site; (iii) establish traffic management plans, safety signs, and barrier gates, and upgrade 12 small car parks for a total capacity of 240 vehicles at five protected areas and cultural heritage sites to control public access and halt off-road vehicle damage; and (iv) develop institutional arrangements for operation and maintenance (O&M) of the project facilities. The UVTC will help catalyze tourism development for western Mongolia and will have an operational mandate focused on education, heritage, and nature. It will prioritize local employment and community goods and services and work closely with the community beneficiaries and MSMEs under output 1 for tourism planning. The designs apply a best practice green standard for water and energy efficiency, low-carbon emissions, and the use of cost-effective local materials.22 16. Output 3: Sanitation and waste management improved. This output will (i) facilitate the installation of about 60 low-cost and gender-sensitive toilet systems at tour camps, campsites, and
20 The design and monitoring framework is in Appendix 1. 21 The program will focus initially on rural communities in five protected areas and cultural heritage sites (para. 5) and
be developed in partnership with aimag youth centers, universities, and tour operators. The revolving fund will apply a design piloted with previous JFPR support and will be the first such fund for community-based tourism in western Mongolia. The youth incubator will comprise (i) training venues in two tourism complexes (outputs 2 and 4) as safe learning spaces to foster innovation and entrepreneurship, and (ii) training and links with local enterprises to develop tourism goods and services. The CBOs will help implement the program and coordinate community participation.
22 The UVTC will comprise a 2-storey complex with a capacity for 1,000 people per day to meet visitor projections (Para. 28). The infrastructure designs apply the Excellence in Design for Greater Efficiencies standard.
project-funded car parks at five protected areas and cultural heritage sites. The project will replicate successful JFPR-funded toilet designs and O&M procedures from phase 1, including CBO-led management of the campsites and toilets, and sustainable financing from campsite fees; (ii) establish waste disposal procedures for the project facilities, including safe transport and treatment at rural and urban wastewater treatment plants and landfills to be upgraded under ADB’s Aimags and Soums Green Regional Investment Development Program (ASDIP) (footnote 16); and (iii) implement a water, sanitation, and hygiene (WASH) program. This will establish sanitation, health, and safety standards and procedures for the project communities and facilities as well as for tour camps. The WASH program will be planned with aimag health and border agencies and will be integrated in the aimag tourism plans (output 1) and aligned with guidelines of the World Health Organization for infection prevention and control.23 These measures will strengthen post-COVID- 19 resilience for over 16,296 residents and 36,000 visitors per year to these protected areas. 17. Output 4: Management of cultural heritage sites and protected areas strengthened. This output will (i) construct the first rock art and nomadic culture center in Mongolia, including a digital museum, and will be in Khovd aimag. It will include high-quality two- and three-dimensional virtual displays of the rock art of the TSC and other sites, establish a digital inventory for rock art, and develop an online platform to promote digital tourism for cultural heritage.24 The center, museum, and access to the TSC will be managed under an integrated approach including O&M, entry fees, and guided visits to and protection of the TSC; (ii) establish at least 35 small management facilities at five protected areas and cultural heritage sites, comprising public campsites, information centers, public cooking cabins, bird watching towers, ranger stations, and fee collection stations to protect habitats and improve facilities in locations subject to high visitor use; (iii) strengthen site management plans to integrate O&M procedures for the project facilities; and (iv) train about 120 residents and 12 local agencies to implement the revised site plans. The project facilities will be operated and maintained by about 13 CBOs in coordination with the park administrations, generating about 176 jobs (40% of these for women). Overall, these measures will help strengthen the management of five globally important protected areas. C. Value Added by ADB 18. Key features and innovation. ADB has become a lead development partner for Mongolia’s emerging tourism sector. The project is the first tourism project to be developed since the COVID-19 pandemic and only the second loan-funded tourism project for Mongolia, with both funded by ADB. The multisector approach developed under phase 1 has been applied and scaled up to include three aimags, rock art heritage, and a focus on post-COVID-19 recovery and resilience. Project features include (i) replication of selected components from phase 1, benefiting from tested methods and lessons learned;25 (ii) initiatives led by women and youth; (iii) private sector participation; (iv) application of a green building standard for energy and water efficiency; (v) use of high-level technology to establish a digital museum; and (vi) synergy with other projects by ADB, CSOs, and development partners.26 The designs support the strategic pillars of the
23 World Health Organization. 2020. Infection prevention and control guidance (COVID-19). 24 To supplement the loan financing and scale up the design and benefits of the digital museum, additional funding of
$0.65 million is being sought from the High-Level Technology Fund (financing partner: the Government of Japan). 25 The components on revolving funds, CBOs, and toilet designs (outputs 1 and 3) are applied from phase 1. Lessons
from phase 1 are described in M. R. Bezuijen. 2019. Blue skies and green steppe – developing sustainable tourism in Mongolia. ADB Blog; and ADB. 2020. Building the Climate Change Resilience of Mongolia’s Blue Pearl. Manila.
26 Design synergy with the ASDIP (footnote 16) comprises: integration of the CRF, youth incubator, and training (output 1) with an ASDIP agribusiness fund and training centers; and waste collection for the project facilities linked with - ASDIP-supported landfills. Development coordination was established during project preparation with GIZ, KfW, The Nature Conservancy, United Nations Development Programme, and WWF, who are implementing projects in western Mongolia, and project components were refined to maximize synergy. Dialogue will continue for implementation.
Table 1: Summary Cost Estimates ($ million)
Item Amounta A. Base Costb 1. Inclusive planning and capacity for community-based tourism enhanced 4.6 2. Enabling infrastructure constructed 9.2 3. Sanitation and waste management improved 0.3 4. Management of cultural heritage sites and protected areas strengthened 12.7 Subtotal (A) 26.8 B. Contingenciesc 4.7 C. Financial Charges During Implementationd 0.8 Total (A+B+C) 32.3
a Includes taxes and duties of $2.8 million. Such amount does not represent an excessive share of the project cost. The Asian Development Bank will finance taxes and duties of $2.5 million. The government will finance taxes and duties of $0.3 million through exemption from duties and value-added tax for works and goods under the loan. In addition, the government will apply exemption of taxes and duties to works financed under the grant.
b In 2021 prices as of March 2021. c Physical and price contingencies and a provision for exchange rate fluctuation are included. d Includes interest, commitment, and other charges on all sources of financing. Source: Asian Development Bank estimates.
21. The government has requested a regular loan of $30.0 million from ADB’s ordinary capital resources to help finance the project. The loan will have a 25-year term, including a grace period of 6 years; an annual interest rate determined in accordance with ADB’s London interbank offered rate (LIBOR)-based lending facility; a commitment charge of 0.15% per year (the interest and other charges during implementation to be capitalized in the loan); and such other terms and conditions set forth in the draft loan agreement. Based on the straight-line method, the average maturity is 15.75 years, and the maturity premium payable to ADB is 0.10% per year. The government has also requested a grant of $2.0 million from the JFPR.29 22. The summary financing plan is in Table 2. ADB will finance the expenditures in relation to works, goods, consulting services, and taxes and duties of $30.0 million for eligible ADB-financed expenditures amounting to 92.9% of the total project costs through the loan. The JFPR will provide
27 World Tourism Organization. 2004. Indicators of Sustainable Development for Tourism Destinations. Madrid; Leung
et al. 2018. Tourism and visitor management in protected areas. Gland, Switzerland: IUCN; and International Council on Monuments and Sites. 1999. International Cultural Tourism Charter. Mexico.
28 Project Administration Manual (accessible from the list of linked documents in Appendix 2). 29 Japan Fund for Poverty Reduction Grant (accessible from the list of linked documents in Appendix 2).
grant cofinancing equivalent to $2.0 million, to be administered by ADB. The government will finance taxes and duties. No land acquisition costs apply.
Table 2: Summary Financing Plan
Source Amount ($ million)
Share of Total (%)
Asian Development Bank Ordinary capital resources (regular loan) 30.0 92.9 Japan Fund for Poverty Reduction (grant)a 2.0 6.2
Central and local governments 0.3 0.9 Total 32.3 100.0
a To be administered by the Asian Development Bank. Source: Asian Development Bank estimates.
23. Climate mitigation is estimated to cost $4.89 million and climate adaptation is estimated to cost $0.50 million. ADB and the ADB-administered grant will finance 100% of mitigation and 100% of adaptation costs. Details are in the PAM and the climate change assessment.30 E. Implementation Arrangements 24. Implementation arrangements are summarized in Table 3 and described in detail in the PAM.
Table 3: Implementation Arrangements Aspects Arrangements Implementation period December 2021–December 2027 Estimated project completion date 31 December 2027 Estimated loan/grant closing date 30 June 2028 Management (i) Oversight body Project steering committee (chaired by the state secretary of the MET) (ii) Executing agency MET (iii) Key implementing agencies MET Department of Tourism Policy Coordination (for the loan) and
MET Department of Protected Areas Management (for the grant) (iv) Implementation unit To be based at MET head office in Ulaanbaatar and one field office
per aimag. Staff: 12 individual consultants hired under the loan. Procurement Open competitive bidding
(internationally advertised) 4 contracts $19,925,954
Open competitive bidding (nationally advertised)
7 contracts $1,235,108
Request for quotations 3 contracts $137,751 Community participation 13 contracts $162,000
Consulting services Quality- and cost-based selection 6 contracts $2,491,710 Consultant qualifications selection 1 contract $60,000
Advance contracting Advance actions to recruit project implementation unit staff and consulting firms will be initiated before loan effectiveness.
Disbursement Disbursement of the loan and JFPR grant proceeds will follow ADB's Loan Disbursement Handbook (2017, as amended from time to time) and detailed arrangements agreed between the government and ADB.
ADB = Asian Development Bank, aimag = province, JFPR = Japan Fund for Poverty Reduction, MET = Ministry of Environment and Tourism. Source: Asian Development Bank estimates.
30 Climate Change Assessment (accessible from the list of linked documents in Appendix 2).
9
III. ATTACHED GRANT ASSISTANCE 25. The grant will focus on improving livelihoods for rural communities in 13 soums (districts) at the five project protected areas and heritage sites (para. 5), which are characterized by high rates of poverty. The grant will have three components, which are linked with the project: (i) inclusive planning and capacity for community-based tourism enhanced, (ii) sanitation and waste management improved, and (iii) management of cultural heritage sites and protected areas strengthened. Component 1 will support the establishment of the first pilot tourism development program for Mongolia (para. 14) to provide training, low-interest finance, and market venues for about 2,449 poor and vulnerable residents. Component 2 will support the installation of about 60 public toilets at visitor sites and the first WASH program for the tourism sector in western Mongolia (para. 16). Component 3 will support the establishment of at least 35 small public facilities at the protected areas and heritage sites (para. 17), generating about 176 jobs (30% for the poor). 26. The grant and loan have been designed for synergy. Beneficiaries of the pilot tourism development program will be prioritized for vendor spaces at the loan-funded tourist streets and complexes to promote and sell community goods and services developed with the grant funding. For the TSC, a grant-funded information center and training of local guides will be linked with O&M of the loan-funded rock art and nomadic cultural center to support the first community-led approach in Mongolia for jobs, livelihoods, and preservation of rock art heritage. The grant designs apply measures piloted under a previous JFPR-funded project in Mongolia (footnote 17) and match these with new features. Overall, the grant will benefit about 8,162 residents of the total project beneficiaries (para. 2), linked with the improved management of globally important protected areas and heritage sites. 27. The grant will be administered by ADB and implemented through the project with the Ministry of Environment and Tourism (MET) as the executing agency and the MET’s Department of Protected Areas Management as the implementing agency. A project implementation unit (PIU) will be established for the project and funded under the loan to reduce grant administration costs. The government will provide counterpart support in the form of project coordination, counterpart staff, office facilities, and financing of taxes and duties for the grant (footnote 28).
IV. DUE DILIGENCE A. Technical 28. The project is technically feasible. The scope and design capacity of the project facilities was developed based on market analysis of pre-COVID-19 visitor numbers, and visitor projections for the project sites based on post-COVID-19 recovery scenarios issued by the United Nations World Tourism Organization. Engineering solutions were designed considering costs of construction and O&M; durability; climate; and impacts on aesthetic, cultural, and wilderness values. Climate resilience and mitigation measures for the tourist streets and complexes include using solar panels, recycling treated wastewater for toilet flushing and greening, and orienting buildings for passive solar heating and cooling. Designs for the two tourist complexes include on- site wastewater treatment plants with proven, low-cost technology suitable for cold climates and tested elsewhere in Mongolia. For the protected areas, the toilet designs apply decentralized, non-flushing dry units developed under phase 1 to avoid wastewater generation. The designs comply with a green building standard for water and energy efficiency (footnote 22).
10
B. Economic and Financial Viability 29. The economic analysis indicated that the project is economically viable, with an overall economic internal rate of return of 18.3% and an economic net present value of MNT81.8 million. Three major benefits were evaluated: the willingness-to-pay of domestic and international tourists to visit the project facilities (i.e., use value) and of domestic tourists to support efforts to protect natural and cultural assets (i.e., non-use value), and the income generated by increased international tourism at project sites. Sensitivity analysis indicated that the project is robust to negative scenarios, including increases in investment and/or O&M costs, and reduced benefits. The economic benefits of the project are expected to be significantly higher, as some effects such as ecological benefits are not easily quantifiable. The project will also contribute to regional economic benefits through the provision of new tourism goods and services in the CAREC region. The financial analysis concluded that the overall project is financially sustainable. C. Sustainability 30. The sustainability of the outcome and outputs will be maintained over the economic life of the project by the establishment of O&M arrangements and cost recovery from visitor entry fees and revenue from sales to visitors. The government will be responsible for O&M of the tourist streets and complexes. The CBOs will be responsible for the small public facilities in the project protected areas and heritage sites. Procedures for O&M and financing of the project facilities will be integrated within the project-funded regional tourism master plan, aimag tourism plans, and site management plans. Mitigation measures relating to the project’s institutional, environmental, social, economic, and financial risks have been incorporated into the project designs to minimize adverse impacts on cultural heritage and natural values. D. Governance 31. The legal and regulatory frameworks required for a well-functioning public sector are by and large in place in Mongolia, but that there are gaps in applied practices and in the enforcement of rules. Corruption is perceived to be endemic and increasing, and the anticorruption institutional system lacks independence and is subject to political pressure.31 The assessed premitigation financial management risk for the project is moderate, mainly due to a lack of qualified financial management staff within the implementing agencies. Measures to mitigate these risks include the appointment of a qualified accountant within the PIU and training on ADB disbursement. The assessed premitigation procurement risk is medium, mainly due to a lack of qualified personnel within the implementing agencies to conduct procurement. This risk will be mitigated by recruiting a qualified procurement specialist for the PIU. Open competitive bidding is specified for most of the project goods and works to ensure that qualified firms are recruited. ADB’s Anticorruption Policy (1998, as amended to date) was explained to and discussed with the government and MET. The specific policy requirements and supplementary measures are described in the PAM. E. Poverty, Social, and Gender 32. Poverty and social. The project is classified general intervention for poverty reduction. A poverty and social analysis was undertaken and a social development action plan was prepared, based on stakeholder consultations and social surveys during project preparation. The project will contribute to poverty reduction and inclusive development in Bayan-Ulgii, Khovd, and Uvs aimags. About 16,296 residents are expected to benefit from the project through access to new and
31 ADB. 2020. Country Governance Risk Assessment: Mongolia. Manila.
11
expanded tourism activities, including the provision of goods and services to tour camps and visitors, and employment with tourism businesses. The project will create about 1,349 jobs, comprising about 1,125 jobs during construction and 224 jobs for O&M of the project facilities. The project training, low-interest finance, and women-led markets will strengthen local businesses and tourism value chains. The social development action plan includes targets for the poor and youth. The project design incorporates universal access including wheelchair ramps for the tourist streets, complexes, and toilets. A project consultation and participation plan and stakeholder communication strategy have been prepared and are described in the PAM. These are based on stakeholder consultations, conducted with guidance from ADB’s NGO and Civil Society Center, and require continued public consultation and participation during implementation. 33. Gender. The project is classified effective gender mainstreaming following ADB guidelines, and a gender action plan has been prepared.32 Gender targets include (i) the CBOs and CRF committees comprise at least 40% women, (ii) 60% of recipients of the CRF loans and market stalls are women, (iii) women comprise 50% of participants in the capacity building activities, (iv) nine women-led markets established, and (v) 40% of jobs are provided to women. F. Safeguards 34. In compliance with ADB’s Safeguard Policy Statement (2009), the project’s safeguard categories are as follows.33 35. Environment (category B). An initial environmental examination, including an environmental management plan (EMP), has been prepared and disclosed on ADB’s website. The project is designed to achieve environmental benefits, including the improved management of five globally important protected areas and protection of rock art heritage. The initial environmental examination is based on the project feasibility study and domestic environmental assessment, site visits, and stakeholder consultations. The project designs comply with ADB safeguard requirements for works in protected areas and Mongolia’s Law on Special Protected Areas. MET, through the PIU, will be responsible for the implementation of and compliance with the EMP. The PIU will include a qualified environment safeguard specialist, who will coordinate EMP implementation. Risks include short-term noise and dust disturbance during construction, the proximity of some works to heritage sites, cumulative pressures on water resources and flora and fauna resulting from increased tourism development, and health and safety risks due to COVID-19 and/or operation of equipment and facilities. Measures to address these risks include the restriction of project works in protected areas to small facilities in the multiple-use zones, compliance with the park management plans, delineation of heritage sites before works, and health and safety requirements. A project grievance redress mechanism has been prepared. 36. Involuntary resettlement (category C). The project is not expected to involve involuntary land acquisition, economic or physical displacement, or involuntary restrictions on land use or on access to protected areas. All civil works will be implemented within existing sites or on state- owned lands without involving acquisition of private or community lands or restriction on land use or access to protected areas which would lead to physical or economic displacement of people as defined under ADB’s Safeguard Policy Statement. During the detailed design phase, the PIU will update the project due diligence report developed during project preparation, and screen project components to avoid involuntary resettlement impacts.
32 Gender Action Plan (accessible from the list of linked documents in Appendix 2). 33 ADB. Safeguard Categories.
37. Indigenous peoples (category C). The project is not expected to impact vulnerable ethnic minorities that would trigger ADB’s Safeguard Policy Statement requirements on indigenous peoples. The due diligence undertaken for project preparation confirmed that the project activities will not impact any vulnerable ethnic group in the project area. G. Summary of Risk Assessment and Risk Management Plan 38. Significant risks and mitigating measures are summarized in Table 4 and described in detail in the risk assessment and risk management plan.34
Table 4: Summary of Risks and Mitigating Measures Risks Mitigation Measures New coronavirus disease outbreaks result in travel restrictions which delay project implementation and/or recovery of the tourism sector.
The extended implementation schedule (2021–2027) partly addresses potential delays. Progress will be closely monitored by the government and the Asian Development Bank.
Government fiscal resources become insufficient to support the counterpart funding, debt servicing, and/or operation and maintenance of the project- funded infrastructure.
Timely and adequate provision of counterpart funds for operation and maintenance of the project-funded facilities is included as a covenant in the loan agreement.
Corrupt practices affect project design, procurement, and/or implementation.
An interministerial project steering committee will be established and provide oversight for anticorruption monitoring.
Source: Asian Development Bank.
V. ASSURANCES
39. The government and MET have assured ADB that implementation of the project shall conform to all applicable ADB requirements, including those concerning anticorruption measures, safeguards, gender, procurement, consulting services, financial management, and disbursement as described in detail in the PAM and loan and grant documents. The government and MET have agreed with ADB on certain covenants for the project, which are set forth in the draft loan and grant agreements.
VI. RECOMMENDATION 40. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Asian Development Bank (ADB) and recommend that the Board approve the loan of $30,000,000 to Mongolia for the Sustainable Tourism Development Project (Phase 2), from ADB’s ordinary capital resources, in regular terms, with interest to be determined in accordance with ADB’s London interbank offered rate (LIBOR)-based lending facility; for a term of 25 years, including a grace period of 6 years; and such other terms and conditions as are substantially in accordance with those set forth in the draft loan agreement presented to the Board.
Masatsugu Asakawa President
4 October 2021
34 Risk Assessment and Risk Management Plan (accessible from the list of linked documents in Appendix 2).
Appendix 1 13
DESIGN AND MONITORING FRAMEWORK Impact the Project is Aligned with Sustainable tourism development in Mongolia improved and diversified (National Program on Tourism Development, 2016–2025)a
Results Chain Performance Indicators
Data Sources and Reporting
Assumptions Outcome By 2028: Sustainability and inclusiveness of tourism in western Mongolia increased
a. Governments of Bayan-Ulgii, Khovd, and Uvs aimags (provinces) meet specific targets for livelihoods, conservation, and waste management in the approved regional tourism master plan (2020 baseline: Not applicable) (OP 4.2.1)
a.–d. Protected area and aimag and soum (district) annual reports, and project technical and progress reports
R: Tourism declines again because of COVID-19, other pandemics, or slow economy
R: Changes in political leadership and/or development priorities disrupt project implementation
b. About 1,349 jobs (40% women, 60% men) generated, of which at least 30% filled by youth and 30% poor (2020 baseline: 0) (OP 1.2, OP 2.1, OP 5.1)
c. At least 90% of tour camp operations in about five sites (ATBNP, KKNP, KUNNP, TSC, UVSPA) comply with tour camp concession manual, including targets for local employment and sanitation (2020 baseline: Not applicable) (OP 3.3.4) d. ATBNP, KUNNP, KKNP, and UVSPA meet the social, environmental, and sustainability criteria of the IUCN Green List of Protected Conserved Areasb
(2020 baseline: 0)
Outputs By 2027: 1a.–f. Protected area and soum annual reports, project technical and progress reports, workshop and/or training attendance forms, and reports on participant surveys
R: Decreased support from commercial operators to involve communities in tourism
1. Inclusive planning and capacity for community- based tourism enhanced
1a. One regional tourism master plan developed, and three aimag tourism plans revised to include targets for tourism, livelihoods, gender, sanitation, and conservation, and support cross-border tourism arrangements (2020 baseline: 0) (OP 2.3.2, OP4.2.1, OP 7.2.2)
1b. Tour camp concession manual and certification program produced, implemented by the Ministry of Environment and Tourism, and piloted for at least five sites (ATBNP, KKNP, KUNNP, TSC, UVSPA) (2020 baseline: Not developed) (OP 3.3.4)
1c. Two tourist streets and nine women-led tourist marketsc
constructed (2020 baseline: 0) (OP 2.1.4, OP 5.1.1)
With JFPR support 1d. Pilot tourism development program established and at least 1,855 residents (50% women and 30% youth), 13 CBOs, and 80 MSMEs trained and report improved skills in tourism business planning, goods, and services (e.g., food supply, accommodation, tour camp services, guiding) (2019 baseline: 970 residents)d (OP 2.2)
1e. At least 230 loans issued under the pilot tourism development program to households, CBOs, and MSMEs of which at least 60% of loan applications are by women and 30% by youth (2020 baseline: 0) (OP 2.1.3)
14 Appendix 1
Risks and Critical
Assumptions 1f. About 13 CBOs established, of which at least 50% of members are women (2020 baseline: 0) (OP 2.3)
2. Enabling infrastructure constructed
2a. UVTC constructed and meets EDGE green building standarde (2020 baseline: 0) (OP 3.2.5)
2a.–c. Protected area annual reports, local authorization for state inspection reports, engineering company reports, and project technical and progress reports
2b. 1.2 circuit-kilometers of new transmission line to UVTC are installed (2020 baseline: 0)
2c. 12 car parks with capacity for 240 vehicles are constructed at ATBNP, KKNP, KUNNP, TSC, UVSPA, with associated gates, signs, and speed humps (2020 baseline: Eight car parks) (OP 3.3.4)
3. Sanitation and waste management improved
With JFPR support 3a. About 60 gender-sensitive toilets (at least 50% for women, 10% with wheelchair access) constructed at public campsites and car parks in five sites (ATBNP, KKNP, KUNNP, TSC, UVSPA) (2020 baseline: 0) (OP 2.4.1, OP 3.3.1, OP 3.3.4, OP 5.1.1)
3a.–c. Protected area annual reports, local authorization for state inspection reports, engineering company reports, and project technical and progress reports
3b. WASH training program implemented for about 3,710 residents including about 50% women, 30% youth, and 30% poor, in 22 soums (2020 baseline: Not implemented) (OP 3.3.4)
3c. At least 95% of beneficiaries under the pilot tourism development program (output 1) and 95% of 22 soum governments in the project sites report adoption of new WASH protocols (2021 baseline: Not applicable) (OP 3.3)
4. Management of cultural heritage sites and protected areas strengthened
4a. RANCC is constructed and meets EDGE green building standarde (2020 baseline: Not constructed)
4a.–g. Protected area annual reports, local authorization for state inspection reports, engineering company reports, project technical and progress reports, workshop and/or training attendance forms, and reports on participant surveys
4b. Digital museum is established, operational, and promotes rock art, education, and tourism (2020 baseline: Not established) (OP 3.2.5)
With JFPR support 4c. At least 35 small management facilities constructed in five sites (ATBNP, KKNP, KUNNP, TSC, UVSPA), including about six campsites, three information centers, 11 information points, two bird watching towers, two cooking cabins, three ranger stations, six fee collection stations, and upgrade of two existing public trails (2020 baseline: Not established) (OP 5.1.1)
4d. The small management facilities are managed by CBOs and employ about 176 residents (40% women, 30% youth, and 30% poor) (2020 baseline: 0) (OP 1.2, OP 2.1)
4e. At least 120 people (40% women and 30% youth) from CBOs, tour camps, park administrations, and soum agencies trained and report improved skills in O&M of project facilities (2020 baseline: 0) (OP 2.2, OP 6.1.1)
4f. At least two sites (ATBNP, TSC) with revised management plans (2020 baseline: 0) (OP 3.3.3)
Appendix 1 15
Risks and Critical
Assumptions 4g. Management effectiveness score of at least two sites (ATBNP, TSC) rated as 70% or greater (2021 baseline: not applicable)f (OP 3.3.4, OP 6.1)
Key Activities with Milestones
1. Inclusive planning and capacity for community-based tourism enhanced 1.1 Recruit ecotourism firm by Q1 2023. 1.2 Recruit design firm for the tourist streets and women-led markets by Q1 2023, complete detailed designs and
award the contract by Q1 2024, and complete works by Q3 2026. 1.3 Establish CBOs by Q4 2023. 1.4 Prepare tourism concession manual and eco-certification program by Q4 2023. 1.5 Establish, implement, and monitor pilot tourism development program Q1 2023–Q4 2027. 1.6 Prepare regional tourism plan by Q4 2023 and revise aimag tourism master plans by Q2 2024.
2. Enabling infrastructure constructed 2.1 For UVTC, complete detailed designs and award contract by Q1 2024, and complete construction by Q3
2026. Prepare business management and O&M plan by Q4 2025. 2.2 For car parks and traffic management plans in five sites (ATBNP, KKNP, KUNNP, TSC, UVSPA), complete
detailed designs and construction by Q4 2025. 2.3 Make assets operational by Q4 2026.
3. Sanitation and waste management improved 3.1 Design WASH program by Q3 2023 and implement during Q4 2023–Q4 2027. 3.2 For toilet systems in five sites (ATBNP, KKNP, KUNNP, TSC, UVSPA), recruit design firm by Q2 2023,
complete detailed designs and award contract by Q2 2024, and complete construction by Q3 2026.
4. Management of cultural heritage sites and protected areas strengthened 4.1 For RANCC, complete detailed designs and award contract by Q2 2024, and complete construction by Q3
2026. Prepare business management and O&M plan by Q4 2025. 4.2 For digital museum, recruit information technology design firm by Q2 2024 and make digital museum
operational by Q4 2025. 4.3 Conduct assessment of protected area management capacity for five sites (ATBNP, KKNP, KUNNP, TSC,
UVSPA) using METT by Q1 2023. 4.4 For the small facilities in five sites (ATBNP, KKNP, KUNNP, TSC, UVSPA), recruit design firm by Q2 2023,
complete detailed designs and award contract by Q1 2024, and complete construction by Q3 2026. 4.5 Complete revision of two site management plans (ATBNP, TSC) by Q4 2025. 4.6 Conduct training for O&M of the project facilities during Q3 2024–Q4 2027.
Project Management Activities Establish project implementation unit by Q1 2022. Prepare annual work plans. Meet targets in the design and monitoring framework, social development action plan, gender action plan, consultation and participation plan, stakeholder communication strategy, and project administration manual (2022–2027). Monitor and evaluate the project outcome and outputs using sex-disaggregated project performance monitoring system, and submit semiannual progress reports and inception, midterm, and final reports (2022–2027). Implement the environmental management plan and submit semiannual reports (2022–2027). Conduct inception, annual, midterm, and final review missions (2022–2027). Submit project annual financial audit reports (2022–2027). Submit the project completion report by 2028.
Inputs ADB: $30.0 million (loan) JFPR Grant: $2.0 million (grant) Government: $0.3 million Beneficiaries: in-kind: (i) residents’ time to implement CBOs; and (ii) private sector costs – time and costs by MSMEs and tour camp companies to attend project trainings and adopt standards for eligibility in the eco-certification program and sanitation standards ADB =Asian Development Bank, ATBNP = Altai Tavan Bogd National Park, CBO = community-based organization, COVID-19 = coronavirus disease, EDGE = Excellence in Design for Greater Efficiencies, IUCN = International Union for Conservation of Nature and Natural Resources, JFPR = Japan Fund for Poverty Reduction, KKNP = Khan Khukhii National Park, KUNNP = Khar Us Nuur National Park, METT = management effectiveness tracking tool, MSMEs = micro, small, and medium-sized enterprises, O&M = operation and maintenance, OP = operational priority, Q = quarter,
16 Appendix 1
R = risk, RANCC = rock art research and tourism center, TSC = Tsenkher Cave, UVSPA = Uvs Nuur Strictly Protected Area, UVTC = Uvs tourism complex, WASH = water, sanitation, and hygiene. a Government of Mongolia. 2015. National Program on Tourism Development, 2016–2030. Ulaanbaatar. b IUCN. 2016. IUCN Green List of Protected and Conserved Areas: Standard, Version 1.0. Gland, Switzerland. c The markets will be managed by local women’s groups and will allocate most stalls to female vendors. Two will be
funded under the loan and seven will be funded under the grant. d The beneficiary target of 1,855 residents represents 1,855 households in the project area with a total 2020 population
of 8,162 residents. No training was conducted in 2020 because of the COVID-19 pandemic. e Excellence in Design for Greater Efficiencies standard. f Baseline values will be measured using the management effectiveness tracking tool. S. Stolton and N. Dudley. 2016.
METT Handbook: A Guide to Using the Management Effectiveness Tracking Tool. London: World Wide Fund for Nature-United Kingdom.
Contribution to Strategy 2030 Operational Priorities The expected values and methodological details for all OP indicators to which this operation will contribute results are detailed in Contribution to Strategy 2030 Operational Priorities (accessible from the list of linked documents in Appendix 2 of the report and recommendation of the President). In addition to the OP indicators tagged in the design and monitoring framework, this operation will contribute results for: OP 1.3 Poor and vulnerable people with improved standards of living (number) OP 2.1.1 Women enrolled in technical and vocational education and training and other job training (number) OP 3.1 Total annual greenhouse gas emission reductions in tons of carbon dioxide equivalent per year (tCO2e/year) OP 6.2 Entities with improved service delivery (number) Source: Asian Development Bank.
1. Loan Agreement
2. Grant Agreement
3. Sector Assessment (Summary): Multisector (Agriculture, Natural Resources, and Rural Development; Industry and Trade; Water and Other Urban Infrastructure and Services)
4. Project Administration Manual
11. Climate Change Assessment
12. Gender Action Plan
13. Initial Environmental Examination
16. Strategic Procurement Planning
18. Project Innovation and Knowledge Dissemination