Mongolia: Integrated Livelihoods Improvement and Sustainable Tourism at Khuvsgul Lake National Park

Sovereign Project | 48216-001

Summary

Khuvsgul Lake National Park (KLNP) in Khuvsgul aimag supports a rapidly expanding but uncontrolled tourism industry, and a small local population which is poor, receives few benefits from tourism, and is dependent on subsistence use of natural resources. The proposed grant will support local livelihoods through improved capacity for sustainable tourism and subsistence activities, in participation with the park administration and other key stakeholders. The project design adopts an integrated approach for livelihoods, tourism, waste management, and land use planning, and will serve as a model for other protected areas in Mongolia.

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Project Name Integrated Livelihoods Improvement and Sustainable Tourism at Khuvsgul Lake National Park
Project Number 48216-001
Country Mongolia
Project Status Proposed
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant: Integrated Livelihoods Improvement and Sustainable Tourism in Khuvsgul Lake National Park
To be determined US$ 3.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Partnerships
Sector / Subsector

Agriculture and Natural Resources - Agriculture, natural resources and rural development

Gender Equity and Mainstreaming Effective gender mainstreaming
Description Khuvsgul Lake National Park (KLNP) in Khuvsgul aimag supports a rapidly expanding but uncontrolled tourism industry, and a small local population which is poor, receives few benefits from tourism, and is dependent on subsistence use of natural resources. The proposed grant will support local livelihoods through improved capacity for sustainable tourism and subsistence activities, in participation with the park administration and other key stakeholders. The project design adopts an integrated approach for livelihoods, tourism, waste management, and land use planning, and will serve as a model for other protected areas in Mongolia.
Project Rationale and Linkage to Country/Regional Strategy

The KLNP was established in 1992. It encompasses 1.2 million hectares of forests and mountains which surround Khuvsgul Lake, one of the most important reservoirs of fresh water in the world. The lake has a volume of 380.7 cubic kilometers, is the largest freshwater lake in Mongolia, and supports 70% of Mongolia's fresh water and 1% of global fresh water. Water quality is high and there are no dams. Khuvsgul Lake is also of trans-boundary importance as it drains via the country's largest river, the Selenge, into Baikal Lake in the Russian Federation. Most of the park's population is located in two settlements, Khatgal and Khankh, at the south and north ends of the lake, respectively. Khatgal is the main entry point to the park. Khankh and the northern area of the park can only be accessed by an unsealed road from Khatgal, or from the Russian Federation. The park borders the Russian Federation and a highway extends from the nearest Russian City, Irkutsk, to Khankh.

Khuvsgul aimag is the second poorest of Mongolia's 21 aimags. In 2014, gross domestic product per capita was $2,008 and mean annual salary was $2,940 per employee (versus mean national values of $3,920 and $5,363, respectively), and unemployment was 15.1% (versus a national rate of 7.9%). The KLNP is located within five soums, of which four have the highest poverty rates in Mongolia. In 2014, the total population of the five soums was 16,000 people, including 3,093 (943 households) and 2,648 (819 households) in Khatgal and Khankh, respectively. Human population densities in the park are low. In Khatgal and Khankh, poverty-stricken households comprise 43.4% (410) and 81.5% (668) of households, respectively, and herding households comprise 30.2% (285) and 44.5% (365), respectively (footnote 3).

The KLNP is becoming one of the most popular tourism destinations in Mongolia. Tourist numbers and facilities are expanding rapidly: between 2010 and 2014, annual tourist visits to the KLNP rose from 11,000 to 60,000 due to improved road access and reduced visa restrictions. No projections for future growth are available, but Khuvsgul aimag and the KLNP is targeted as a key region for the development of tourism and associated infrastructure. This expansion is occurring in the absence of planning. There is no framework for coordination among the KLNP Administration, communities, and tour operators (the key stakeholders in the KLNP), nor any shared vision, targets, or codes of conduct for tourism. Vehicle access and camping are uncontrolled and some camps are unlicensed. Enforcement of park regulations by the KLNP Administration is an important but only partial solution to these issues, which requires the active support of other stakeholders. Tourism presents a major opportunity to support local livelihoods, yet few residents derive such benefits due to limited capacity and resources to develop tourism goods and services. Constraints include a lack of technical and marketing skills and capital to produce quality goods (e.g., handicrafts) and provide reliable supplies and services (e.g., food supplies and guiding).

Grazing of livestock in the area of the park has occurred for centuries and provides meat, wool and dairy products for residents. Livestock grazing will continue to be a principal livelihood for many residents in the KLNP and buffer zone, especially those that graze their livestock in remote areas far from tourism-related opportunities. These benefits are declining due to over-grazing, caused by increasing human and livestock populations and limited grazing lands. In 2014, there were about 62,160 livestock in the KLNP, including 21,502 (35%) goats and 15,161 (24%) sheep. There is no organized management of herding in the area, and herding families have limited capacity and resources to improve the sustainability of their practices and diversify their income. Over-grazing is also causing soil exposure, permafrost melt, tree dieback, and conversion of forest to steppe, in a continuous cycle which also increases fire risk.

The largely pristine nature of Khuvsgul Lake is the foundation for livelihoods and tourism, but uncontrolled sewage and litter from tourism is threatening the lake water quality. There is no system of organized waste management in the KLNP. Toilet facilities are mostly unlined pits and sewage seeps into soil and the lake. Resources for litter collection are inadequate and the lake already contains plastic litter. Traditional solutions of large-scale waste management infrastructure are not appropriate for the KLNP, due to the fragile and very cold environment, limited value of flushing systems (water is frozen from November to June), and location in a protected area. Waste management at the KLNP requires innovative and small-scale methods which are simple, cost-effective, involve communities, can be replicated locally, and minimize or avoid the use of water. Baseline data on polluting sources are required to guide waste management, yet no waste assessment or extended monitoring has been conducted.

The internal zoning of a protected area is a critical policy tool to support livelihoods. At the KLNP, the current zones exhibit inconsistencies with land use. Given the rapid increase of tourism and likely expansion of associated infrastructure, a best-practice approach to strengthen the park zoning would provide a strong basis to support communities, tourism, and conservation. Improved zoning could: (i) support the residents of Khankh, an isolated enclave in the KLNP; (ii) support herding livelihoods; (iii) identify strategic areas for tourism and future investment; (iv) help secure the lake water quality; and (v) improve the sustainability of actions in the current project through long-term planning.

Government and donor initiatives are addressing some of these issues. The park's first management plan was approved in 2014 and mentions tourism and waste management, but provides no targets or actions. Between 2013 and 2014, a river basin authority and buffer zone councils were established, yet have limited training or funds. A small community market place in Khatgal for tourist products was constructed in 2015. Research on natural resources has been conducted in the KLNP since the 1950s. Civil society organizations (CSOs) have provided support for park management, ranger training, sanitation, and green education programs. The need to support community-based tourism and waste management in the KLNP is widely acknowledged by government, communities, and tour operators.

At a national level, there is an urgent need for an integrated approach to balance livelihoods, tourism, waste management, and biodiversity conservation within protected areas. Government efforts to expand tourism are centered on Mongolia's unique wilderness values and large network of protected areas, which comprise 18% of the country's area. These are generally located in poor regions with limited infrastructure, which presents challenges for maintaining ecological values, providing benefits to communities, and sustainable tourism. Few such models are available, although previous projects have confirmed the benefits of tourism for communities in protected areas. For improving the livelihoods of herding families, previous Japan Fund for Poverty Reduction (JFPR) projects in Mongolia provide strong models for the current project, provided they are tailored to local conditions.

The project will be among the first in Mongolia to address the linked issues of livelihoods, tourism, and waste management in a protected area. New participatory mechanisms for the KLNP will be piloted, including co-management approaches for tourism and waste management and community-led revolving funds for livelihood improvement. Measures have been designed to promote community ownership and entrepreneurship. For waste management, toilet systems will be piloted which are suitable f

Impact

Household income is raised and unemployment reduced in up to five soums of Khuvsgul Aimag (Khuvsgul Aimag Socio-Economic Development Action Plan)

Improved management of natural resources in the KLNP (KLNP Management Plan; Integrated Water Resources Management Plan for Khuvsgul Lake and Eg River Basin)

Outcome Livelihoods improved through sustainable tourism in up to five soums of the KLNP
Outputs

Community benefits from tourism promoted in the Khatgal and Khankh areas

Community management of land and water resources at Khuvsgul Lake strengthened

Effective project implementation and monitoring

Geographical Location
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services 46. The project is expected to require 3 person-months of one international consultant and 487 person-months of 16 national consultants for project implementation. These 17 positions comprise seven administrative staff (PMU manager, PIU field coordinator, Khankh officer, implementation specialist, accountant, procurement specialist, driver) and 10 specialists. The executing agency will engage all the consultants through individual consultant selection method, following ADB's Guidelines on the Use of Consultants (2013, as amended from time to time).
Procurement

The PMU, on behalf of the executing agency, will be responsible for procurement. All procurement financed by the JFPR grant will be carried out in accordance with ADB's Procurement Guidelines (2015, as amended from time to time) and Mongolia's Ministry of Finance (2014) Procurement Manual. The selection and engagement of contractors for works, goods, and/or consulting services to be financed by the grant will be subject to ADB approval. The project procurement plan is in Section VI.B. The plan describes the thresholds and review procedures, and contract packages for goods, works, and consulting services. Any necessary modifications or clarifications to the recipient procurement procedures will be documented in the procurement plan.

The relevant sections of ADB's Anticorruption Policy (1998, as amended to date) will be included in all procurement documents and contracts. Before the start of any procurement, ADB and the executing and implementing agencies will review GOM's public procurement laws to ensure consistency with ADB's Procurement Guidelines (2015, as amended from time to time).

Responsible ADB Officer Mark R. Bezuijen
Responsible ADB Department East Asia Department
Responsible ADB Division Environment, Natural Resources & Agriculture Division, EARD
Executing Agencies
Department of Protected Areas ManagementGovernment Building 2, United Nations
Streer 5/2, Ulaanbaatar-15160, Mongolia
Timetable
Concept Clearance 08 May 2015
Fact Finding 04 Jun 2015 to 21 Jun 2015
MRM 22 Jul 2015
Approval 07 Dec 2015
Last Review Mission -
Last PDS Update 11 May 2015

Evaluation Documents

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