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Annual Review - Summary Sheet

Title: Proyecto Ganadería Colombiana Sostenible – Sustainable Cattle Ranching Project, Colombia Programme Value: £15,258,478 Review Date: September 2018 Start Date: June 2017 End Date: June 2018

Summary of Programme Performance

Year 2013-14 2014-15 2015-16 2016-17 2017-18 Programme Score B A B A A Risk Rating High Medium High High Medium

Summary of progress and lessons learnt since last review Overall the project has been scored an A: outputs met expectations. The project is designed to promote a transition towards sustainable cattle ranching in Colombia by gathering evidence on whether introducing silvopastoral agroforestry systems (SPS), which combine tree planting with cattle ranching, can help reduce the deforestation caused by cattle ranching and alleviate poverty amongst small-medium scale ranchers. SPS systems allow ranchers to sustainably intensify production on existing land, reducing the need for farmers to expand onto new land and clear forests. Deforestation is a major cause of greenhouse gas emissions in Colombia and across much of Latin America, and this pilot project could pave the way for a much wider transition to sustainability in this sector. Last year’s annual review found that implementation of this project was rapidly accelerating but that delivery of outputs lagged behind targets in absolute terms. This year’s review has found that the recommendations made last year have been taken forward and that the acceleration in progress has now translated into good results ‘on the ground’, with the project’s outputs in-line with our expectations at this point. The project has now implemented silvopastoral systems on almost 27,000ha of land, with 80,000ha of land under more sustainable management practices, split across 3873 farms. As a result, this year’s review has found that the programme is currently delivering good value for money. The project has now been running for long enough to gather data about the impacts it is having in terms of avoiding deforestation, improving biodiversity and improving the livelihoods of participating ranchers, many of whom are very poor. Although full analysis of this data will not take place until the project’s independent impact evaluation in 2019, emerging results taken from a sample of 101 participating farms show that they have benefited from an average increase in the production of meat (23%), and milk (36%), whilst the cost of production has fallen by 19%. As these emerging results have become available, the project team have stepped up their work to disseminate these findings and learning, increasing the probability that this pilot programme will contribute to a wider transition towards sustainability in Colombia’s cattle ranching sector. This review explores progress over the period June 2017 to June 2018 in detail and provides a number of discrete recommendations to help ensure the full potential of this project is realized in the remaining period of implementation. Summary of recommendations for the next year • The project needs to continue prioritizing technical assistance support to highly motivated farmers that show a

high interest in undertaking land change transformations towards SPS, and downscale support to those ranchers that, despite dedicated TA support, are undertaking land changes at a very slow pace.

• It is important for the project to establish a mechanism to report the activities that are implemented by the

project partners around the promotion of SPS systems outside the direct scope of the GCS project, as these activities represent important indirect outcomes of the project.

• The project has accumulated significant experience in (i) the provision of planting materials through in-situ

farm production and commercial nurseries; and (ii) land conversion monitoring mechanisms. It is important to speed-up the preparation of learning notes on these two topics to be disseminated to external audiences. This recommendation was made during the supervision missions, but it has not yet been implemented by the project team.

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• The project needs to continue strengthening the links between on-farm biodiversity monitoring (carried out by CIPAV) and landscape biodiversity monitoring (carried out by TNC).

• FEDEGAN needs to continue strengthening monitoring mechanisms to ensure that all the activities (and

associated results) funded or co-funded by the project and implemented through the project partners are properly recorded and disseminated through the project’s communication media outlets.

• It is crucial that the project’s partners ensure the timely delivery of commitments linked to the preparation of

the livestock NAMA. The project is leading the preparation of this strategic document (together with WRI), under the guidance and oversight of a NAMA committee led by MADR and MADS. Fedegan should appoint a member of the project team to assume responsibility for delivering this important task, which may require recruiting. This person should be appointed by 20th November 2018.

• BEIS and the World Bank should work together to ensure that high-quality monitoring and reporting for KPI 8

continues going forward. • As this project draws to a close BEIS, the World Bank and the project team should seek to convene a multi-

stakeholder discussion on the future of sustainable cattle ranching in Colombia.

• Over the past year the World Bank and the project’s implementing partners have made good progress towards scaling up work to communicate and disseminate the project’s emerging results. To maximize the impact of this project it is essential that this work continues; particular emphasis should be placed on engaging parties that could play a role in taking SPS to scale.

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A. Introduction and Context Link to Business Case:

https://beisgov.sharepoint.com/:w:/r/sites/beis/201/_layouts/15/Doc.aspx?sourcedoc=%7B0E01C563-A51C-41A9-B212-EC5AA4C78027%7D&file=Colombia%20SPS%20Business%20case.docx&action=default&mobileredirect=true

Link to Log frame:

https://beisgov.sharepoint.com/:w:/r/sites/beis/201/_layouts/15/Doc.aspx?sourcedoc=%7B67B60B27-E245-4FDD-93EA-D61E0B4FB3E3%7D&file=SPS%20Results%20Framework%20live%20document%20Nov17%20onwards.docx&action=default&mobileredirect=true

Outline of the programme This project is designed to promote the adoption of silvopastoral agroforestry systems (SPS) in Colombia. The aim is to increase the environmental and economic sustainability of cattle ranching in Colombia. Extensive ranching on degraded land is a major driver of tropical deforestation and this in turn generates significant greenhouse gas emissions. SPS systems aim to shift land-use practices by promoting farming techniques that restore degraded land. This can increase the efficiency of cattle production, providing better incomes for the rural poor, and deliver environmental benefits including reduced greenhouse gas (GHG) emissions; decreased soil erosion and water pollution; and enhanced biodiversity. The project seeks to convert 35,500 hectares of often degraded (i.e. open, treeless) pastures into a richer and more productive environment, where trees and shrubs are planted interspersed amongst fodder crops such as grasses and leguminous herbs. The project is gathering evidence on whether introducing SPS can help reduce the deforestation caused by cattle ranching, restore land, conserve forest and biodiversity and alleviate poverty through increased milk and beef production, and the provision of alternative income through forestry products and payments for environmental services. The programme contains innovative quasi-experimental components which allow the effectiveness of different interventions to be compared and evaluated; a key part of the programme’s value therefore lies in testing whether (and how) SPS can be effectively rolled out at scale to inform larger scale programmes in the future. The project was initially funded by the Global Environment Facility with US$7 million, using the Colombian Cattle Ranching Association, FEDEGAN, as lead executing agency and involving a range of NGO partner agencies (Fundación Centro para la Investigación en Sistemas Sostenibles de Producción Agropecuaria (CIPAV), the Nature Conservancy (TNC), and Fondo Acción). UK funding is being used to expand the reach, scope and duration of the project. This includes piloting a new payment for ecosystem services scheme which rewards farmers for land-management practices which capture carbon; extending the project to two new ‘deforestation hotpots’ to test whether introducing SPS in these areas can have a positive impact on reducing deforestation; and supporting the greater provision of technical assistance to farmers to help them implement more sustainable practices. The project was originally due to close in January 2018. In November 2017, it was extended by two years to January 2020. The BEIS project manager joined the World Bank’s mission to Colombia in April 2018 to verify and gather evidence on progress so far; take the views of other stakeholders, including the Colombian Government, and to assess progress towards implementing the goals of the project in the extension phase. This annual review is based on this and other missions over the course of the last year, and on the results reported in the biannual reports submitted in February and August 2018 from the lead implementing organisation, FEDEGAN.

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B: PERFORMANCE AND CONCLUSIONS Annual outcome assessment The Theory of Change for the project lists the following expected outcomes and impacts: Impacts:

1. Reduced impact of cattle farming on climate change and the environment. 2. Reduced poverty amongst small-scale livestock farmers in five regions of Colombia.

Outcomes:

1. Reduced GHG emissions from cattle farming as a result of SPS adoption. 2. Increased productivity of cattle farming and increased incomes for farmers. 3. Wide range of environmental benefits including to biodiversity, water and soil, and increased climate

resilience. 4. Wider adoption of SPS in Colombia and further afield as a result of the project demonstrating benefits. 5. Better informed Government and REDD+ policy and legal support mechanisms for SPS.

Good progress has been made towards developing methodologies for ICF KPIs 6 and 81, which have been finalised after a process of in-depth technical review by the World Bank. Consequently, the project has started collecting valuable information regarding the extent to which implementing SPS leads to reduced GHG emissions, and under what circumstances this occurs and through which mechanism, as well as the extent to which adopting SPS systems lead to avoided deforestation. The data collected to-date has not been fully verified in time to describe in detail here, but emerging conclusions illustrate the extent to which carbon is captured above and below-ground in different locations and according to the type of SPS which is implemented; data which will be valuable in the design of future programmes. The methodologies developed represent an important step towards enhancing Colombia’s capacity to report emission reductions attributable to this sector. The project has generated an excel tool for reporting emission reductions at the farm level and a mobile application is currently under development to make it easier for cattle ranchers and project staff to submit these reports. Emerging findings also show that on average, farms which implement SPS benefit from both an increase in productivity and a reduction in the cost of inputs, implying improvements in income (although a causal link will not be explicitly tested until the project’s impact evaluation is conducted). Specifically, the project team have conducted a study across 101 farms spread across the five areas in which the project is active. They found that, relative to traditional production systems on open pasture, farms engaged in the programme have benefited from an average increase in the production of meat (23%) and milk (36%), and that milk quality increases in terms of fat and protein content (this attracts a higher premium in Colombia). Simultaneously, the reduced requirements for fertiliser, fodder and other inputs means that participants have benefited from a 19% decrease in the cost of production (per kilo). These emerging results will need to be validated in full as part of the end of project impact evaluation. The project has also collected good evidence to show that on farms which implement SPS, biodiversity increases and soil erosion decreases. Although it is still too early to point to concrete examples and attribute those to this project, over the past year the BEIS team has seen increasing interest in initiatives which are considering scaling up SPS approaches, including through private finance. For example, sustainable cattle ranching is one of the priority areas which is likely to be championed by the private-sector led Food and Land Use Coalition in Colombia and it is also an area which the BEIS-funded arm of the Partnerships for Forests programme is considering for targeted support. More broadly, the project team have made good progress towards putting dissemination and outreach activities at the heart of what they do; it will be important to maintain momentum here over the next year as evidence regarding the benefits of SPS continues to crystallise.

1 KPI 6: Change in Greenhouse Gas (GHG) emissions as a result of ICF support

KPI 8: Number of hectares where deforestation and degradation have been avoided through ICF support

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Overall output score and description Overall, the project has been scored A – outputs met expectations. Last year’s annual review found that implementation was rapidly accelerating but lagged behind in absolute terms. In November 2017 BEIS approved a two-year extension of the project, allowing further time for outputs to be delivered. This year’s review has found that the increased rate of implementation has translated into good results ‘on the ground’ with a number of project-wide and component-specific indicators reaching or exceeding their end of project targets, and with others in-line with expectations. Indicators of particular note include the area of land converted to silvopastoral systems (PDO indicator two in the table below) which has more than doubled over the past year to 26,730ha, and the number of cattle ranching farms engaged in the project, which has increased by over 1000 following a successful fourth call for additional participants. The table below sets out progress against the project-wide indicators. Progresses against the more detailed component specific indicators are included on the following pages. These are all taken from the project’s results framework. In-line with previous annual reviews, the table shows results reported by FEDEGAN in their 6-monthly technical implementation report, covering the period leading up to June 2018. The only exception to this is for PDO indicators 4 and 5, shaded grey below, which report progress that was made as of December 2017: this is because biodiversity / emission monitoring is done in the second half of each year, so this is the most recent data available. It is important to clarify that the emission reduction value reported does not yet include emissions from avoided deforestation (KPI8), which will be included in the next reporting period. Finally, it should be noted that although milestone targets for August 2018 were provided to BEIS, this was within a month of this review taking place and for this reason we have not included them. Instead we have compared progress against the January 2020 end of project targets for each output, allowing a more objective assessment of progress made over the past year.

Indicator(s) Progress reported at June 2017

Progress reported at June 2018

Target (end of project)

Area under environment-friendly cattle ranching production systems implemented in project areas (ha) 62,402 80,107 84,000

Land area where sustainable land management practices have been adopted as a result of the project (ha) 12,511 26,730 35,500

Increase in the production of beef and/or milk per intervened hectare in participating farms 17% 17% 10%

Improved presence of globally important biodiversity in project areas, as measured by an increase in the Environmental Services Index (ESI) resulting from the adoption of environment-friendly SPS in participating farms in project areas, over baseline

237,578 1,023,125 1,522,000

Reduction in GHG emissions from avoided deforestation and forest degradation and increase in carbon sequestration at the farm-level through adoption of environment-friendly SPS in participating farms (tonnes CO2eq)

602,503 840,122 1,600,000

Number of cattle ranching farms benefitting from project instruments (technical assistance, PES, or support for establishment of on-farm nurseries)

2555 3873 4000

Key actions: progress made towards 2017 Annual Review recommendations Recommendations which have been completed BEIS should assess the World Bank’s extension request by October 2017, ensuring thorough due diligence to ensure an extension represents good value for money. BEIS approved a two-year extension to the programme in November 2017 at a cost of £258,478. The full extension assessment can be found at the following location: https://aidstream.org/files/documents/SPS-extension-Business-Case-20171219041200.pdf

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The project implementation team should recruit a new project coordinator as soon as possible. A new coordinator was recruited promptly following approval of the project extension. If BEIS approve an extension to the project, the World Bank and the project team should conduct an updated assessment of the resources required to fully deliver the outputs expected in the extension phase. This could form part of the risk assessment referenced in section E. Following approval of the project extension, the World Bank carried out an internal restructuring of the programme to incorporate the additional UK funds, to validate and update the revised targets for the extension phase and to re-allocate resources between project components to reflect these revised targets. This included increasing the target for the number of technicians to be trained on SPS outreach and technical assistance from 500 to 550. This review has found that the project’s outputs are in-line with expectations, indicating that the programme is adequately resourced for the extension phase at the current time. BEIS and the British Embassy in Bogota should consider how they can encourage greater cooperation between the various initiatives which BEIS and the ICF fund in Colombia. Significant progress has been made over the past year, most notably through the recruitment of a full-time forests and land-use officer working for BEIS but based in the British Embassy in Bogota. This has allowed BEIS to improve co-ordination between ICF forests and land-use projects in Colombia, and also between forests and land-use projects and other ICF activity taking place in Colombia, for example under the new UK funded Technical Assistance Programme. BEIS / British Embassy Bogota should continue to engage with the Colombian Ministry of Agriculture as regards its intentions to pursue further sustainable cattle intensification programmes.

In September 2017, the UK Ambassador in Colombia hosted a breakfast at the embassy in Bogotá to support the project’s disseminating efforts. The breakfast was attended by high level authorities, both from the Ministry of Agriculture and Rural Development (MADR) and the Ministry of Environment and Sustainable Development. In August 7, 2018, a new administration took place in Colombia, which offers opportunities to strengthen cooperation and opportunities to mainstream innovations generated by the project. If the project is extended, an updated risk assessment should be conducted by the World Bank identifying any further risks to implementation and to the potential of the project to deliver the intended long-term outcomes and impacts. Appropriate mitigation plans should be put in place. This has been completed: see ‘overview of project risk’ for an overview of the current key risks which are being monitored. Recommendations where work is ongoing BEIS and the World Bank team should work with the project’s implementing agencies to ensure that they recognise the value of the project’s work to disseminate learning, and to ensure that they are effectively recording activity undertaken in relation to this work. The project’s implementing team should also consider maximising the learning which can be drawn from this project by producing a specific report on land conversion to iSPS, describing the lessons that have been learnt and explaining how these could be applied to similar future interventions. The BEIS team and the World Bank team have both taken opportunities to emphasise the importance of work to record and disseminate learning when engaging with the project’s implementing partners, for example during the two supervisory missions held in January and April 2018. During those trips it was clear that the importance of this was understood and this review has found that the project team have increasingly placed further emphasis on this activity. The project’s impact evaluation is due to commence in spring 2019 and the efficacy of different interventions, including land conversion to iSPS, will be explored in depth as part of that work. In the meantime, the World Bank has commissioned a consultancy to consolidate the information emerging from the project and put together a business case for investments in SPS systems, the report is to be finalized by early November 2018. Furthermore, as part of the final evaluation of the Project, the Work Bank and the project partners will each prepare an Implementation Completion Report, highlighting results and lessons learned. This assessment will also analyze

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the efficacy and efficiency of the project’s interventions and the sustainability of the project’s results. An Impact Evaluation be carried out by an external party. Results will be published and publicized through dissemination events. As part of the project’s end of programme assessment the project team and the World Bank should produce a joint report setting out their experiences relating to the design and implementation of PES schemes. This should set out specific recommendations in PES design for the Colombian Government. We recommend that the team engage the Colombian Agricultural ministry with this work, and that consideration be given to producing these reports earlier if it becomes apparent that this would be beneficial to other initiatives seeking to replicate this approach (enabling the learning from this programme to more effectively drive wider transformational change). Plans to cover this area have been built into the design of the end of project assessment, and specific recommendations will be made based on lessons learned and results. Beyond this, the implementing partners will prepare a final document highlighting their experiences of implementing the project, the main outcomes and impacts, lessons learned, insights on the sustainability of the project’s interventions, and opportunities for scaling-up the transformation promoted by the project through public and donor-funded initiatives and private-led initiatives.

The World Bank, the project team and the Colombian Government should consider how the project’s interventions can be used to deliver results in regional and national results-based payments programmes such as the BioCarbon Fund Initiative for Sustainable Forest Landscapes.

The project is currently working with 539 farms in Meta that could contribute to emission targets under the BioCF project. We anticipate that a strong collaboration between these two programs can be established once the BioCF become fully operational. The project team are also in contact with the new BEIS programme Partnerships for Forests to consider the case for piloting an approach for working with private companies to mainstream SPS systems as part of their supplier development programs (a company in Meta department and another one in Caquetá department have been identified as potential candidates). The project has developed a series of tools (e.g. participatory on-farm planning; self-monitoring of farm improvements towards sustainable livestock production; tools for monitoring and reporting emission reductions, etc.), which should be mainstreamed through BioCF funded operations implemented through the Ministry of Agriculture and by the World Bank through IFC, but also through other donor funded programs providing support to sustainable livestock production in Colombia.

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Has the logframe been updated since the last review? The results framework (logframe equivalent) was updated following approval of the extension assessment, to reflect new targets that account for a longer implementation period, an increased focus on dissemination and outreach, and lessons learnt from the preceding period of implementation. These changes were made and formally approved in January 2018 as part of the World Bank’s project restructuring exercise, necessary following BEIS approval of the project extension in November 2017. The changes which were made are as follows:

• Area converted to iSPS in participating farms: increased from 4000 to 4500ha

• Number of cattle ranching farmers sensitized and trained on SPS and sustainable cattle ranching production: increased from 5,500 to 18,500

• Number of professionals and technicians trained on SPS establishment and management: increased from 500 to 550

• Area under PES-2 (Carbon) scheme in project areas: increased by 500ha to 4500 ha

• Land area under sustainable landscape management practices: increased by 500ha to 35,500 ha

• Improved presence of globally important biodiversity in project areas, measured by an increase in the ESI resulting from the adoption of environment-friendly SPS in participating farms, over baseline: increased to 152,2000 – reflecting that the original EOP target was an underestimation.

• Reduction in GHG emissions from avoided deforestation and forest degradation and increase in carbon sequestration at the farm-level through adoption of environment-friendly SPS in participating farms: revised to 1,600,000 tCo2e

• Number of cattle ranching farms benefitting from project instruments (technical assistance, PES, or support for establishment of on-farm nurseries) – increased from 2700 to 4000

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C: DETAILED OUTPUT SCORING

Output Title Component 1. Improving productivity in participating cattle ranching farms in project areas through SPS

Output number per LF n/a Output Score A

Risk rating (H, M or L): M Impact weighting (%): 35%

Risk revised since last AR? Yes Impact weighting % revised since last AR? No

Key Points The acceleration in implementation identified during the 2017 annual review has continued, and this year the project has reported good results ‘on the ground’, with progress in-line with expectations against all indicators. The final call to add additional participants to the project was successful and over-subscribed, and the project team have made good use of their network of demonstrative farms to sensitise a significant number of ranchers who are not direct participants in the project to sustainable cattle ranching techniques. The project team have made good progress over the past year, converting over 1000ha of degraded land to intensive silvopastoral systems; sensitising 7579 farmers to sustainable silvopastoral practises and recruiting and training an additional 93 technicians to the project team. Climatic conditions during the main planting season have been favourable, although planting in some regions has been slightly delayed owing to excess rainfall. A major milestone for the project was achieved in April, with the fourth and final call to add additional participants to the project concluding successfully: during this period the project team held 113 outreach events, attracting over 2000 people and leading to 1802 applicants from interested ranchers – on oversubscription rate of 25%. The project team have been busy screening applicants for eligibility and 885 have been approved to-date, bringing an additional 20,000ha of land into the project. The success of this call for participants reflects the project team’s learning from previous calls: to improve the number of high-quality applications, workshops were held to support applicants in completing the necessary paperwork and a simplified process was put in place. A second milestone worth noting under this component was the successful completion of an intensive course for outreach technicians, held in April, through which 104 new technicians were trained in implementing silvopastoral systems. A third milestone is the consolidation of a strategic alliance of the project with the National Training Service (SENA) to incorporate SPS modules in the regular technical training programs of the institution, with the potential to reach hundreds of students in technical careers now and in the future, as well as the training of 100 of SENA’s instructors.

Recommendations The project needs to continue prioritizing technical assistance support to highly motivated farmers that show a high interest in undertaking land change transformations towards SPS, and downscale support to those ranchers that, despite dedicated TA support, are undertaking land changes at a very slow pace. It is important for the project to establish a mechanism to report the activities that are implemented by the project partners around the promotion of SPS systems outside the direct scope of the GCS project, as these activities represent important indirect outcomes of the project.

Indicators Progress, June 2017

Progress, June 2018

Target – End of project

Area converted to iSPS in participating farms 1859 2899 4500 Increase in average stocking rate (cows/ha) in project areas 15% 15% 10% Number of cattle ranching farmers sensitized on SPS and informed about availability of credit sources

5,628 13,207 18,500

Number of professionals and technicians trained on SPS establishment and management

370 463 550

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Output Title Component 2: Increasing connectivity and reducing land degradation through differentiated PES schemes

Output number per LF n/a Output Score A Risk: L Impact weighting (%): 35 Risk revised since last AR? Yes Impact weighting % revised

since last AR? No

Indicators Progress at

June 17 Progress, June 18

Target (end of project)

Area under PES schemes in project areas (PES-1 and PES-2) 41,321 (PES-1) 1,584 (PES-2)

55,637 (PES-1) 2615 (PES-2)

49,000 (PES-1) 4,500 (PES-2)

Number of cattle ranching farms benefitting from a PES scheme (biodiversity or carbon)

1,681 (PES-1) 1,099 (PES-2)

1,685 (PES-1) 1341 (PES-2)

1700 (PES-1) 1255 (PES-2)

Number of focal plant species used/conserved in cattle ranching farms (25 of which are globally important species)

50 50 50

Number of market-based / consumer initiatives designed, (including large-scale PES mechanisms), that could support the broader adoption of SPS by the end of the project

2 2 2

Key Points The project team have made good progress against this component, with the area of land benefiting from the PES-1 incentive and the number of ranchers participating in the PES-2 scheme exceeding end of project targets. Other component indicators are in-line with expectations. This component is focused on preserving and increasing the connectivity of ecosystems in the landscape by establishing riparian and inter-farm forest corridors, as well as increasing carbon sequestration on farms through intensive SPS. This is achieved by providing short-term Payment for Ecosystem Services (PES) incentives to incentivize the initial uptake of activities which are unattractive for ranchers in the short term but profitable in the medium-long term. The project team have made good progress, with the area under the PES-1 scheme (which pays for measurable increases in biodiversity) exceeding the EOP target and good progress made towards the PES-2 target, which pays for carbon sequestration driven through iSPS cultivation. Notably, the number of ranchers participating in PES-2 exceeds expectations whilst land-area converted is below target. This reflects learning noted in previous years: the project generally selects ranchers with small areas of land as they need it’s support the most, but this means their capacity to convert tracts of their farm to iSPS is lower than anticipated. This result is therefore unsurprising and simply reflects trade-offs within the programme. The project team have made good progress towards developing long-range PES schemes for water quality, which should be operational by January 2020, and towards supporting the green market dialogue, aiming at developing market-based incentives for sustainable production, through supporting the development of sustainability criteria that can be recognised by the market in Colombia. Within the past year the project’s team also provided significant contributions towards the National Policy on Payment for Environmental Services (CONPES 3886) launched in June 2017 by the National Development Department. The project is supporting the department to pilot the first long-term PES scheme for SPS systems, which was designed by the project. The scheme has been designed for the Chinchina river watershed and involves the participation of local institutions and private firms such as Fondo de Agua Vivo Cuenca, the electricity provider in the region, the environmental local authority Corpocaldas and the metropolitan sanitation company. Recommendations The project has accumulated significant experience in (i) the provision of planting materials through in-situ farm production and commercial nurseries; and (ii) land conversion monitoring mechanisms. It is important to speed-up the preparation of learning notes on these two topics to be disseminated to external audiences. This recommendation was made during the supervision missions, but it has not yet been implemented by the project team.

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Output Title Component 3: Strengthening Sub-sector Institutions, Dissemination and Monitoring & Evaluation

Output number per LF n/a Output Score A

Risk: L Impact weighting (%): 20

Risk revised since last AR? No

Impact weighting % revised since last AR?

No

As implementation has scaled to the point where data has become available on the efficacy of different interventions, the project team have made good progress in capturing emerging findings and sharing them to inspire further action. As a project which is designed to trial different approaches for driving land conversion to silvopastoral systems and gather evidence regarding ‘what works’, M&E is central to the design of the programme. Metrics which are being tracked and assessed include changes in land use at the farm and landscape level, changes in socioeconomic status of participants, farm level biodiversity, changes in animal productivity, and monitoring of carbon emissions / sequestration at project sites. These efforts are now being supported through an improved IT system which allows better sharing of data between implementing partners, and crucially, as implementation has progressed and emerging lessons / results have materialised, the project team have started to place increasing emphasis on disseminating learning. Highlights include contributions which the project has made to a ‘Biodynamic’ model which helps show how different land-use interventions can lead to social and environmental returns (the model was used as the basis for the development of a financial scheme being piloted under the Vision Amazonia initiative); a new website; a number of video testimonials from participants and new documentaries highlighting the benefits of sustainable practises; trials of community-based monitoring approaches; and work undertaken to socialise journalists in Colombia to SPS, which has led to national newspapers running features on the programme. As an example of a key emerging result, the project has gathered data showing that (on average) ranchers who implement SPS benefit from both increased yields and quality of meat and milk, whilst the cost of production simultaneously falls owing to a reduction in the inputs required. Continuing to capture and share these emerging findings will be important to inspire further action prior the results of the full impact assessment becoming available. Recommendations The project needs to continue strengthening the links between on-farm biodiversity monitoring (carried out by CIPAV) and landscape biodiversity monitoring (carried out by TNC). FEDEGAN needs to continue strengthening monitoring mechanisms to ensure that all the activities (and associated results) funded or co-funded by the project and implemented through the project partners are properly recorded and disseminated through the project’s communication media outlets. It is crucial that the project’s partners ensure the timely delivery of commitments linked to the preparation of the livestock NAMA. The project is leading the preparation of this strategic document (together with WRI), under the guidance and oversight of a NAMA committee led by MADR and MADS. Fedegan should appoint a member of the project team to assume responsibility for delivering this important task, which may require recruiting. This person should be appointed by 20th November 2018.

Indicators Progress at June 2017

Progress at June 2018

Target, end of project

Number of strategic alliances established with key public and private, national and regional entities for the promotion of SPS in Colombia

9 10 10

M&E system established and providing timely and relevant information on project’s activities and results.

Yes Yes Yes

Communication Strategy implemented for different target audiences (mainly policy makers and farmers)

Yes Yes Yes

Information system in place for reporting farms adopting SPS, including those not directly participating in the Project.

No Yes Yes

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Output Title Component 4. Project management

Output number per LF n/a Output Score A

Risk: L Impact weighting (%): 10

Risk revised since last AR? Y Impact weighting % revised since last AR?

No

Key Points The 2017 annual review found that good progress had been made in addressing fundamental issues with how the project was being managed and that progress appeared to be accelerating rapidly as a result. This year’s review shows that implementation has continued along this positive trajectory, and this is backed up by results ‘on the ground’ which are in-line with expectations. The project team were quick to appoint a new co-ordinator following approval of the extension request and key milestones around recruitment of additional technicians and beneficiaries to the project have been met. The projects’ implementing partners have improved the way they co-ordinate their activities and are working together effectively. Reporting to BEIS: The project implementation team provides 6-monthly reports to the World Bank. The most recent technical report was published in August and covers the period January-June 2018. These reports are of a good quality and are useful for assessing progress; this most recent report was used to inform the findings of this review. The BEIS project manager, the World Bank team and the BEIS forests and land-use officer in Colombia have regular meetings to discuss implementation progress. Finally, project results are reported for the ICF-wide results collection exercise at the beginning of each year, this year’s inputs were of high quality and were provided in a timely manner. Supervisory missions: The World Bank team has conducted two supervisory missions to the project since the last annual review, in January 2017 and April 2017. The BEIS project manager and BEIS’s forests and land-use officer in Colombia joined the team for the latter of these trips, to validate progress to-date and to agree priorities for the extension phase with the project’s implementing partners. We consider that the project is currently being managed effectively by the World Bank team and note no specific recommendations for ongoing project management at this stage, beyond those recommendations noted under other components which have implications for project management.

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D: VALUE FOR MONEY & FINANCIAL PERFORMANCE Key cost drivers and performance As of June 2018, the World Bank had disbursed 79% of total resources to the project, equating to 72% of BEIS funding and 100% of GEF funds. The higher disbursement rate of GEF funds reflects their involvement in the project from an earlier date, and the lower amount of overall GEF funding allocated to the project (see program outline on page 2). It was expected that 65%- 70% of BEIS funds would be disbursed by Jan 2018, the original programme closing date. Currently disbursements have only slightly exceeded that figure, however if funds continue to be disbursed at a similar rate as over the last year, funds should be fully disbursed by project close. This demonstrates that the programme has overcome the slow disbursement noted in previous annual reviews. As noted in previous annual reviews, this slow disbursement was in part due to the depreciation of the Colombian peso against the US dollar. Given this, the value of project resources has increased on the ground which has enabled targets for some outputs to be increased. The allocation of financial resources between project components has been adjusted as part of the World Bank’s project restructuring exercise previously referred to in this review. This was done to reflect the expanded outreach of the project in the extension phase, and the increased emphasis on building awareness / capacity building, and to cover operating costs. The allocation between components pre and post restructuring is set out in the first table below; the second table sets out the state of execution of project funds as of June 2017 / June 2018.

Original Allocations (USD) Restructuring (USD) GEF BEIS TOTAL GEF BEIS TOTAL

Component 1 1,790,690 9,535,186 11,325,877 3,126,935 8,742,930 11,869,865 Component 2 3,631,307 7,869,853 11,501,160 2,092,047 7,115,151 9,207,198 Component 3 896,003 2,613,483 3,509,486 1,220,968 3,066,455 4,287,423 Component 4 682,000 681,478 1,363,478 560,050 1,775,464 2,335,514

TOTAL 7,000,000 20,700,000 27.700.000 7,000,000 20,700,000 27,700,000

Component June 2017 amount executed ($) (BEIS)

June 2018 amount executed ($) (BEIS)

% of BEIS allocated budget executed June 20182

Component 1 4,964,800 6,548,959 75% Component 2 2,958,271 4,837,671 68% Component 3 863,878 1.352.749 44% Component 4 492,993 863,009 49% Total 9,279,942 13,602,388 66%

2 The data in this table shows the amount executed on the ground, by Fedegan, as opposed to the amount disbursed by the World Bank to Fedegan. This explains the difference between the total BEIS budget executed in this table (66%) and the disbursement rate of 72% noted in the text above.

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VfM performance compared to the original VfM proposition in the business case

Economy

Administration fees have not changed since the last annual review.

Efficiency

As shown in the detailed output scoring, in most cases the programme has scored well against output targets that are central to delivering the desired outcomes of the programme. This shows that the World Bank has continued to allocate resources efficiently, having overcome the inefficiencies outlined in previous annual reviews.

One area for improvement is the area converted to iSPS. This indicator is not currently on track, which is a risk to achieving the expected climate and poverty alleviation impacts. This year implementation has been pushed back due to weather impacts, however the programme team are confident that target will be achieved, as the area planned for conversion to iSPS (as detailed in working plans with 1630 of the beneficiary ranchers) cover 5576ha of land, a significantly greater amount than the 4,500 hectares end-of-project target.

Cost Effectiveness

1. Leverage ratio of ICF resources to private / public investment.

The amount of public financed mobilised is no longer being reported against. This is because project participants have not been able to access credit from the Government’s FINAGRO credit line as originally envisaged.

There has been an increase in the expected private finance mobilised since the last annual review. The end of project expected UK attributed amount is £12.9m representing a leverage ratio of 1:0.85. This is an increase of £8.4m. This increase is mainly reflects that we now have better data on the amount which farmers contribute to project activities, which is the main source of private leverage. The remainder of the increase in this figure is attributable to the increase in area which we expect to be converted to iSPS by project close.

2. Abatement costs in terms of £ per tonne of CO2e abated - this is calculated from data on project costs and outcomes

Using the latest figures for the expected reduction in GHG emissions, the expected end of project UK attributed abatement cost is £13.2/tCO2e abated. This is greater than the amount expected in the business case (£8.2/tCO2e) as the original end of project target for emissions reductions was previously revised downward. The decrease in the expected cost per tonne since the last annual review is due to the extension period allowing more emissions reductions to be achieved.

3. Cost per hectare converted to Silvopastoral systems.

The expected end of project attributed cost per hectare is £530, which is slightly lower than the original business case estimate (£540). This can be explained by the increased target for land converted to iSPS following the extension.

4. Increase of income for small-scale farmers

As in other annual reviews, the main indicator of this is the production rate of beef or milk per intervened hectare in participating farms. The programme has achieved an increased rate of production at 17%, exceeding the 10% target.

Effectiveness

The project is on track to achieve key output and outcome targets, therefore the project is expected to deliver well against climate objectives. The expected cost per tonne of CO2 abated falls within the ICF standard portfolio range

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of £6-£37/tCO2e which indicates value for money despite not being on track to achieve the original business case expected cost per tonne. The overall climate impact is expected to be greater than the cost per tonne suggests as CO2 benefits are only accounted for up to project close date, however the lifetime of the adopted systems which sequester carbon are beyond this timeframe. Furthermore, the programme is targeted at addressing a significant driver of deforestation however the CO2e impact of this is not currently accounted for. If these carbon benefits were accounted for then it’s likely the project cost per tonne would be in line with the ICF portfolio spend weighted average of £8/tco2e

Additionally, the project is likely to have had a significant impact on improving the income of small scale farmers. As noted, increased production of beef and milk has surpassed its targets whilst the target for number of famers benefiting from PES schemes is likely to be achieved, highlighting the scale of this impact.

Assessment of whether the programme continues to represent VfM

The project extension period has enabled the project to build on improved performance in the last review period. Funds have continued to be disbursed efficiently so that climate and poverty alleviation targets are likely to be achieved. The overall impact of achieving these targets is judged to represent strong value for money. Quality of financial management

Date of last narrative financial report August 15, 2018 Date of last audited annual statement May 31, 2017

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E: RISK

Overall risk rating Medium Overview of programme risk An extension to the project has allowed the programme team further time to deliver outputs, building on the accelerated rate of progress observed as part of the 2017 annual review. The project is now on track to meet its revised output targets for January 2020, increasing in turn the likelihood of the project delivering longer-term outcomes. Implementation risks remain, particularly around the following key areas:

• Weather: as of 27th August, the US National Oceanic and Atmospheric Administration’s Climate Prediction Centre forecasts a 60% chance of an El Niño event in the Northern Hemisphere between September-November and a 70% chance during winter 2018-19. The last El Niño severely impacted this project by causing mortality of trees which had recently been planted. The project team are monitoring forecasts routinely and have mitigation strategies in place, including acquiring hydrogel to improve the probability of recently planted areas surviving, and shifting the timing of planting in different areas according to the most recent forecasts, but this risk cannot be mitigated entirely and residual risk must be tolerated.

• Currency: the project team based their projections for what they could achieve during the extension phase on a $ USD to Colombian Peso exchange rate of 1:2800. Fluctuations below this level could still mean that activities need to be scaled back. However, over 2018 the Peso has consistently traded above this mark and as of 29th August the Peso is trading at 1:2890 so the probability of this risk materializing is assessed as low. The project team mitigate this by monitoring exchange rates and submitting disbursement requests to the bank when the Peso is trading at a favorable rate. A second level of exchange rate risk relates to the £ GBP to $ USD exchange rate: until the final disbursement is made from the UK promissory note, the bank team do not know exactly what they have in $ for the remainder of implementation. We anticipate receipt of the final disbursement request from the UK promissory note within Autumn 2018, once disbursed this element of the risk will be closed.

• Political risk: Colombia have recently held presidential elections and a new government took office on August 7th 2018. It is unlikely that this change will directly affect the activities of the project, however, it could pose challenges in terms of coordination with the ministries of environment and agriculture. Ensuring an early linkage of the project with the new administration is critical to ensure government support, which is essential for the support of actions that allow the future scaling of the project. Meetings with the respective Vice ministers in the ministers of agriculture and environment will take place during the upcoming World Bank supervision mission planned for late Oct-early Nov 2018.

• Staff retention: As the project closing date approaches, it is likely that project staff will start looking for new job opportunities. During the next supervision mission, the World Bank will work with FEDEGAN to ensure that there is a contingency plan in place so that if key staff members are lost before the project closes and remainder of implementation can proceed as planned.

Outstanding actions from previous risk assessment None.

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F: COMMERCIAL CONSIDERATIONS Delivery against planned timeframe Given progress noted in this review and approval of the project extension, at this stage we anticipate the project delivering in full within the planned timeframe.

Performance of partnership(s) BEIS’s primary relationship is with the World Bank. This relationship is working well and the World Bank has been responsive and helpful throughout the year. FEDEGAN is the lead implementing organisation and the March 2018 mission attended by the BEIS project manager showed FEDEGAN’s relationship with the World Bank is open and collaborative, and that the project’s implementing partners are working together effectively. Asset monitoring and control The World Bank has visited the project twice in the last year. The BEIS project manager joined for the March mission directly engaging with the central project implementation team and the Colombian Environment Ministry, and the BEIS project manager and World Bank manager are in regular contact. Monitoring and control of all BEIS ICF programmes in Colombia has been bolstered this year through the recruitment of a full-time forests and land-use team member based in Bogota, who co-ordinates activities between programmes as part of the role.

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G: MONITORING & EVALUATION Evidence and evaluation The monitoring and evaluation system is now fully established and integrated. The project is reporting actual results against all of the project specific indicators allowing a quantitative assessment as well as a qualitative one to be made. KPI 6 - Net Change in Greenhouse Gas Emissions (tCO2e) – tonnes of GHG emissions reduced or avoided and KPI 83 - Number of hectares where deforestation and degradation have been avoided through ICF support (ha). The project team, with the support of the Work Bank, have continued working with TNC on the methodologies for reporting against ICF KPI 6 and KPI8. The methodology for reporting on KPI6 has been completed and results were reported during the March 2018 annual results collection exercise. Ecometrica have also provided capacity building support to TNC to support the reporting of KPI8 on their platform. The Bank has received the final report for KPI6 and KPI8 indicators from TNC. This has been subject to considerable review and will be finalized in the immediate future. We anticipate that this methodology will be agreed and results against this indicator reported for the first time by September/October.

As Ecometrica’s central contract with BEIS is due to expire this Autumn, and Ecometrica own the reporting platforms which are being used by this project, it will be important for BEIS and the World Bank to find a way of ensuring the project can report progress against KPI 8 going forward.

KPI 12 - Volume of private finance mobilised for climate change purposes as a result of ICF funding (£) Results were collected during the March 2018 results collection exercise. As of December 2017, the value was £12,144,963. This is based on the actual amount which ranchers receiving support from the project invest in implementing SPS and iSPS on their land (an average, per hectare figure) multiplied by the number of hectares converted to both land-use types to date.

KPI 15 – Transformational Change

A Methodology for assessing Transformational Change has been developed and full scoring is set out in annex H. The programme is currently assessed as scoring a 2 (Some early evidence suggests Transformation likely).

Impact Evaluation

A quasi-experimental impact evaluation is being delivered under the responsibility of the World Bank. The evaluation will assess the average treatment effect of the project on participants by comparing this against a matched group of farms from a control group. The Bank will also prepare a final completion report (ICR), which essentially represents a performance evaluation of the project. The selection of study participants has been subject to data limitations on key socio-economic variables and their self-reported nature. However, the use of this innovative case-control approach means the study should be able to distinguish the varying impact of various forms of treatment offered, including the various types of payments and the provision of technical assistance. The evaluation will also aim to see whether impacts varied among participants. In particular, it will examine the extent to which poorer farmers adopted silvopastoral practices as a result of the project’s interventions. Further details are available in the 2017 annual review. Interim data regarding increases in productivity Emerging results taken from a probabilistic sample of 101 participating farms show that ranchers which have implemented SPS have benefited from an average increase in the production of meat (23%), and milk (36%), whilst the cost of production has fallen by 19%. At the start of the project it was estimated that establishing SPS could lead to an increase in the production of meat and milk of 10%. To evaluate this hypothesis a probabilistic sample of 101 farms were selected across the 5 regions

3 These refer to ICF-wide KPIs rather than the KPIs which are specific to this project, which are assessed within this review and referred to as ‘project development objectives’

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in which this project operates (control lots were identified within each farm which received traditional management methods). Three metrics were assessed during two periods; the first semester of 2017 (the dry season), and the second during the second semester of the year, which is the wet season:

• Stocking rate (number of cows per hectare) – which serves as a proxy for meat production. • Milk production (liters per hectare per annum) • Income (per hectare per year)

Lots within the farms receiving the project’s intervention were compared with lots within the farms implementing traditional grassland pasture systems. The results are set out below: Stocking rate: farms implementing SPS had an average of 3.5 cows/ha, an average increase of 23% relative to traditional pasture systems in control lots (the average stocking rate at a national level is significantly lower at 0.53 cows / hectare). Milk production: the estimated milk production per annum was 2,620 liters per ha per annum, an increase of 36% relative to control farms. Fat content increased by 1.9%, protein by marginal levels (0.18%) and milk solids by 1.5%, indicating increases in quality as well as quantity. On farms receiving the project’s interventions, production costs also fell by 18.5% per lire of milk and per kilo of meat. These figures will also be reported during 2019.

Type of SPS implemented

Stocking rate (cows / ha) Milk production (litres / ha / year)

Productivity of forage vegetation (kg/ha)

Without SPS With SPS Without SPS With SPS Without SPS With SPS Scattered trees in pasture

2,2 3.0 690,0 887,0 10.175,0 11.306,0

Living fences 2,5 3.6 953,0 1.627,0 15.715,0 20.928,0 Intensive SPS 1.7 5.2 794,0 2.849,0 15.638,0 23.479,0

These emerging results will need to be fully validated as part of the project’s impact assessment, due to commence in spring 2019. Note that the increase in productivity of 17% reported against PDO 3 differs from these figures: this is because the PDO 3 figure reflects project-wide reporting across 1532 farms; whereas these figures come from a more in-depth study across a smaller sample of farms, designed to look at how productivity increases vary according to intervention type and according to region. Monitoring progress throughout the review period See ‘asset monitoring and control’. Recommendations BEIS and the World Bank should work together to ensure that high-quality monitoring and reporting for KPI 8 continues going forward.

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H: TRANSFORMATIONAL CHANGE Rating The project has been given a score of 2 (Some early evidence suggests Transformation likely) for transformational change. Evidence and evaluation Transformational Change is being assessed using cross-cutting, enabler and driver criteria. Indicators against the relevant criteria are a combination of Key Performance Indicators (KPI), Project Specific Indicators (PSI) and identifiable actions in Colombia that are known already. The end of project (Jan 2020) targets for each indicator and progress as of June 2018 are indicated in bold after each indicator: Cross-cutting Political will and local ownership: The project will seek to galvanise action by the Colombian Government and the cattle ranchers to continue the implementation of SPS and iSPS beyond the life of the project and across a greater geographical reach. The ultimate ambition would be to see SPS being implemented across Latin America as the cumulative impact of a number of interventions demonstrates SPS’s value.

• PSI: Number of strategic alliances established with key public and private, national and regional entities for the promotion of SPS in Colombia – Target = 10 Progress = 10

• National Planning Department to include a meaningful role for SPS in the next National Development Plan being issued in 2015 (identifiable action) Incomplete.

Enablers Sustainability: The longevity of the intervention once the project ends will not be monitored, however evidence from previous projects suggests that SPS systems are retained for at least 4 years even once payments to farmers end. This indicates that SPS can be sustained without support once implemented. This year, emerging evidence regarding the economic benefits of SPS in terms of improved productivity and reduced input costs, amongst others, indicates that this is indeed likely to be the case. The project will build on the political support for SPS to promote a larger scale intervention driven and owned by Colombia, potentially in the form of market-based mechanisms or regulation, although it should be noted that this year we have also seen increasing interest in scaling up this approach from private actors – given the long-term returns which it appears SPS can bring (see ‘Innovation’ below).

As noted previously in this review, this year the project team have also made good progress towards designing and implementing a long-term PES scheme which reflects the benefits of upstream SPS for watershed protection.

• PSI: Number of market-based/consumer initiatives designed, (including large-scale PES mechanism), that could support the broader adoption of SPS by the end of the project. Target = 2 Progress = 2

Drivers Capacity and capability can be increased: countries and communities have the capacities and capabilities necessary to bring the change about;

• PSI: Number of professional and technicians trained on SPS establishment and management Target = 550 Progress = 463

Innovation: innovative technologies are piloted, with the potential to demonstrate new ways of doing things, which could lead to wider and sustained change;

• Over the past year we have seen further evidence that innovative approaches being piloted by this project are starting to demonstrate that implementing SPS is a viable alternative to business as usual. In particular, we have seen increasing discussion regarding how projects like this could be scaled up with private sector investment, as opposed to ongoing government subsidy, in recognition of the increasing evidence base that investing in SPS can deliver long-term returns for both environmental protection and productivity. Scaling up sustainable cattle ranching has been identified as one of the potential priority areas for the BEIS-funded Partnerships for Forests programme, which became operational in Colombia earlier this year, and the World Bank have commissioned research into the business case for implementing SPS in different parts of Colombia, in order to further build the evidence base, which is due to be complete in November.

• During the March 2018 project the BEIS project manager saw evidence of the demonstration effect first-hand, albeit on a very small scale: in some instances, ranchers who are not direct participants in the project are learning from their neighbours who are, having witnessed the benefits first hand, and are implementing

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what they can with their own resources. This type of localised demonstration is a good example of how this project is driving change beyond its direct areas of intervention

Evidence of effectiveness is shared: approaches which have proved successful in one location are made widely available and lessons on their usefulness are credible and shared widely;

• PSI: Communication strategy implemented for different target audiences (mainly policy makers and farmers.) Complete

• Over the past year, BEIS and the World Bank have consistently pushed the project team to put activities which can drive transformational change at the heat of their work, and the project team have made good progress towards this objective, with greater emphasis on dissemination and outreach activities than in previous years, which were focused more heavily on building the project’s foundations and implementation. This year the project team have made good use of their network of demonstrative farms to expose a wide range of actors to SPS, including ranchers who are not direct participants in the project, policy makers and journalists. They have also organised a number of successful seminars and regional forums, have increased the quality of communications through social media and their new website, and have taken steps to better record data and make this more readily available to outside organisations.

Recommendations As this project draws to a close BEIS, the World Bank and the project team should seek to convene a multi-stakeholder discussion on the future of sustainable cattle ranching in Colombia. Over the past year the World Bank and the project’s implementing partners have made good progress towards scaling up work to communicate and disseminate the project’s emerging results. To maximize the impact of this project it is essential that this work continues; particular emphasis should be placed on engaging parties that could play a role in taking SPS to scale.