ANNUAL PROGRAM STATEMENT
APS No. 525-06-A-002 IN
“Improved Management and Conservation of Critical Watersheds”

USAID/Panama
AUGUST 2005
Issuance Date: December 5, 2005
Closing Date: December 5, 2006

Pursuant to the Foreign Assistance Act of 1961, as amended, the United States Government (USG) as represented by the U.S. Agency for International Development (USAID/Panama), is seeking applications from any U.S. or Non-U.S. Non-Profit, Non-Governmental Organizations to implement activities as described in the following Annual Program Statement (APS). Awards to U.S. organizations shall be administered in accordance with 22 CFR 226 and the Standard Provisions for U.S. Non-governmental Grantees (see Mandatory Reference, 22 CFR 226, Standard Provisions for U.S. Non-governmental Grantees, and Optional Standard Provisions for U.S. Non-governmental Grantees). Awards to non-US organizations shall be in accordance the Standard Provisions for Non-US organizations. Please also refer to www.usaid.gov/policy/ads/300/303.pdf for governing regulations, standard provisions, and required certifications that will need to be submitted by applicants at the time of award.

USAID/Panama (USAID/P) invites applications from prospective partner organizations to form public-private alliances to carry out activities in support of USAID/P’s development objective called Improved Management and Conservation of Critical Watersheds in Panama. Alliance partners are expected to bring significant new resources, ideas, technologies, and/or partners to address watershed management problems in selected watersheds deemed to be of critical importance by the GOP, the Panamanian private sector and USAID/P. Successful applications will provide at least a 1:1 resource leveraging to focus on priority development activities within USAID manageable interests.

1.0 BACKGROUND

USAID/P is committed to improving the management of critical watersheds in Panama to promote sustainable economic growth in selected areas that meet a certain set of social, economic and environmental criteria. The initial stage of the new proposed activities is planned for a three-year duration (FY 2007-2009) and would reside within the Mission’s economic growth and environment office (SO2-IR2). The expected total funding for these initiatives will be approximately US $3.0 million ($1 million annually), depending on the nature and scope of the activities identified, and on the availability of funds. USAID anticipates that up to six awards may be result in response to this APS.

USAID/P views sustainable environmental management and biodiversity conservation as a necessary condition for both economic growth with equity, and the reduced probability of social conflict. The Mission is implementing activities that serve as catalysts for improving environmental policies, regulatory, and institutional frameworks, as well as the adoption of management approaches and practices that balance environmental protection with rational use of natural resources for sustainable economic development. The next phase of the program will build upon the foundations laid with GOP and private counterparts to improve watershed management, apply improved policies, replicate best practices, promote adequate land use and improve environmental governance in Panama by involvement of local government, communities, and the private sector in more meaningful ways in sustainable management of the environment. The Mission will emphasize a demand driven approach that seeks to leverage other sources of funding to the extent possible in activities that are economically, socially, environmentally and culturally feasible. An integrated watershed management approach will bring together the various elements of the program in a coherent and synergistic way to achieve environmental sustainability and conservation objectives in the critical landscapes identified.

2.0 GEOGRAPHICC FOCUS

At least three geographic areas will be targeted: the Panama Canal Watershed and two others based upon the following criteria:
- Must be related to protection and conservation of biodiversity and natural resources,
- Must contribute to increased employment,
- Must have economic importance to Panama and the potential for export-led growth in ecotourism, forestry, clean production, sustainable ranching, fisheries, horticulture or dairy,
- Must be linked to increased competitiveness,
- Must provide services to residents of the watershed and involve communities in design, implementation and decision making,
- There must be a private sector champion for protection and improved management of the watershed with private companies willing to invest resources in partnership with USAID and the GOP or local government,
- Must be sustainable.

2.1 Panama Canal Watershed-Eastern Region: The crucially important Panama Canal infrastructure is a high economic and national security priority for both the Government of Panama and the U.S., and will continue to be at the center of USAID/Panama’s activity under this set of activities. Each transit through the Panama Canal requires 55 million gallons of freshwater. Environmental services from the 550,000-hectare Panama Canal Watershed (PCW) ecosystem, including the availability of sufficient water of good quality, is essential to guarantee continued effective operation of the Canal’s locks system and provide safe drinking water for the cities of Panama and Colon.

2.2 Existing Activities: The current USAID portfolio consists of the following major activities:

Panama Canal Watershed: A three-pronged approach is currently supported which combines policy support in the PCW and active participation of all stakeholders in the design and implementation of tangible actions on the ground at the sub-watershed level in both protected and non-protected areas.
Darien Community Strengthening: Under a Special Objective, USAID is focused on community development, increased economic opportunities, and more effective government and NGO presence, with special emphasis on community participation and self-help.

Trade Capacity Building: In relation with the Free Trade Agreement between the US and Panama, the Mission is supporting a program to help Panama implement the agreement and strengthen competitiveness of the business sector, with an emphasis on agriculture, ranching and ecotourism.

Ruling Justly: Transparency in government and measures to reduce corruption are being implemented with several GOP institutions and civil society. Measures will also be taken to strengthen rule of law.

Other non USAID/Panama Programs: Activities supported directly by the Central American regional Mission as well as the Latin American and Caribbean Bureau in USAID/Washington complement the work of the bilateral programs including: a regional program to increase participation in global markets, improve environmental management in the Mesoamerican Biological Corridor, increase sales of high end specialty coffee, and enhance Panama’s capacity to respond to the HIV/AIDS crisis.

Through its Parks in Peril program, activities supported by the LAC Bureau mitigate threats to conservation in the Amistad Biosphere Reserve. Two Debt-for-Nature Swaps have been initiated to help protect the Charges National Park and the Darien National Park.

In the Panama Canal Watershed, the protection of the natural environment is vital to safeguarding the freshwater resources upon which both the canal's hydrology and watershed residents depend. A healthy vegetative cover helps to regulate the timing and intensity of hydrologic cycles, essential for a steady and sustained source of water supply for both Canal operations and human use. Preventing high levels of soil erosion will maintain the functioning and longevity of holding capacity of the lakes and reservoirs where water for the Canal and other users is stored. Good water quality also directly impacts both the operation of the Canal and the welfare of downstream human users. Sources of pollution in the rural and urban settings must be controlled.

The rural economy in several Darien watersheds that feed the Gulf of San Miguel is also strongly dependent on natural resources. Diverse ethnic groups have derived their livelihoods for centuries from rich tropical forests, extensive river systems, and coastal zones, resources which are increasingly at risk. Although the Darien region is home to the largest drainage basin in the country, water services are inadequate and inequitable, as much of the population suffers from insufficient access to water for domestic use or sustained economic development. Faced with increased population pressures and introduction of different types of economic activities, the adoption of sustainable land use and resource management practices is essential, in conjunction with increased basic service delivery within the context of community-based participatory models of decision-making regarding the shared use of limited resources.

Other watersheds that have been explored to some extent and should be considered are in the “arcoseco” which includes the Rio Santa Maria and Rio Chico and important rivers in Chiriqui province.

To achieve Mission objectives, the prospective partners should consider an examination of integrated watershed management options that address at least the following components and others that applicants consider important:

• Strengthened Environmental Governance: The foundation of all long-term natural resource sustainability is participatory and democratic governance ranging from community-based approaches to a sound enabling environment at the larger watershed and national level. Many opportunities exist to build local capacity, strengthen public and civil society institutions and improve the legal and policy framework in ways that facilitate and promote improvement in the ways in which ecosystems are managed and enforce existing environmental regulations.

• Sustainable Economic Activity: There are significant opportunities to promote sustainable economic development, through clean production initiatives, adequate waste disposal and an expanding eco-tourism sector. In addition, developing public-private partnerships that recognize the economic value of conserving watersheds with high biodiversity and significant tropical forest resources offer complementary opportunities to leverage funding. Other sectors to consider are livestock, agriculture, agribusiness, forestry and handicrafts. The Mission will seek to leverage other sources of funding to the maximum extent possible and only work in those areas that demonstrate adequate demand for continued sustainable development.

• Cross-Cutting Activity: USAID also considers that a cross-cutting and integrated approach provides many opportunities to take advantage of programmatic intersections and possible areas of additional synergy across its current portfolio. Opportunities should be explored to link activities across sub sectors of activity as well as across the two target watershed regions.

3.0 GUIDING PRINCIPLES

Applications must meet the following criteria:

USAID/Panama Requirements:

• Be consistent with and support the Mission’s strategic objectives, goals, and programs.
• Take advantage of programmatic synergies by coordination with other USAID/Panama activities under democracy and governance, trade and economic growth, as well as other USAID activated funded by the regional Mission, LAC/RSD, or other USG agencies working in Panama.
• Mainstream consideration of the ongoing FTA negotiations in all activities considered, and identifies possible strategic opportunities for support in the context of program priorities.
• Focus on activities where USAID has comparative advantage, and USAID resources can achieve the most impact consistent with the Mission’s goals.
• Build on the most important “lessons learned” from past and current investments of USAID/Panama, including recommending continuation and consolidation of ongoing activities when it is appropriate and strategic.
• Meet all requirements in application of the USAID Biodiversity Earmark, including that: (1) the program have at least one explicit biodiversity objective; (2) the program monitor indicators for biodiversity conservation; and (3) site-based programs be implemented in biologically significant areas.
• Be demand driven and leverage private sector resources to the extent possible.
• Maximize leveraging possibilities with other donors and fill programmatic and strategic gaps not filled by other aid institutions.
• Be economically, socially and culturally feasible.
Programmatic Requirements:
• Take a cross-cutting, integrated approach to water resources and watershed management that maximizes benefits for all major sectors, including ecosystem uses of water and associated resources.
• Take a multi-front strategic approach, including a full range of technical interventions and modes of action, including:
o good governance and sound, participatory decision-making processes regarding allocation and use of watershed resources as the foundation for sustainable resource management, involving the public, private and civil society sectors;
o policy and legal reform for natural resources management, to ensure an adequate enabling environment and legal and regulatory framework to ensure protection of the public interest.
o best practices and technology in watershed management in all sectors, to improve resource use efficiency and minimize adverse environmental impacts.
o sustainable financing of sustainable natural resources management activities by both the public and private sectors.
o market-based mechanisms and incentives for coordination and collaboration between providers of water services and technologies.
o public awareness and education programs to build a strong and active constituency for sustainable and integrated watershed management.
• Include the most strategic mix of actions at all geographic scales ranging from the local (municipality/corregimiento) to the basin level, and including national level interventions as appropriate.
• Provide specific opportunities for new or strengthened public/private linkages and partnerships to achieve sustainable management ends in the target watersheds.
• Promote innovative activities and the use of new and clean technologies
• Seek opportunities to use USAID regional and central innovative mechanisms
• Must have clearly defined objectives that have been agreed to by all partners
• Application must be feasible from a technical, economic, financial, environmental and social perspective.

It is expected that programs may last from 12 to 36 months. Priority will be given to applications that can be launched rapidly, have more private sector input and for which there is a higher level of demonstrated demand.

4.0 PARTNER ELIGIBILITY CRITERIA

Partners could include a wide array of organizations such as: U.S and Panamanian non-government organizations (NGOs), foundations, private businesses, business and trade associations, international organizations, U.S. and Panamanian universities, civic groups. All prospective partners must be legally established, must be organizations with a reputation for integrity and the highest standard of conduct, and a proven track record in their particular area of expertise. They should be able to provide evidence of a strong commitment to the proposed alliance, have experience in working in partnerships with others and have proven ability to handle and account for funds.

5.0 APPLICATION/CONCEPT PAPER INSTRUCTIONS

The Office of Economic Growth and Environment will be responsible for reviewing all applications submitted under this APS and management of the award and monitoring process. Applicants are required to submit a short concept paper of no more than five pages, which outlines the program and estimated costs. Those organizations with concept papers that are deemed to be acceptable in accordance with the requirements of this APS, will be instructed to prepare a full application, including analysis, certifications, etc. The point of contact and address for delivery is:

Maria Eugenia Solis de Blay at:
USAID/Panama
American Embassy Panamá
Apdo. 0816-02561, Zona 5, Panamá, Rep. Panamá

Or

Maria Eugenia Solis de Blay at:
USAID/Panama
Plaza Regency
2o. piso (arriba de Adams)
Via España, Panama
(507) 208 – 1000 or email: msolis@usaid.gov

Concept papers may be submitted in one of the following means:
1) electronically via email; or 2) one hard copy and an accompanying 3.5”diskette or CD).

6.0 CRITERIA FOR APPLICATION REVIEW

The factors to consider in descending order of priority are:

- Technical Approach/Innovation/Replicability
- Demonstration of Significant Result and Sustainability
- Gender: Development impact on men and women – clearly describe the project impact of men and women and how they will be involved.”
- Past Performance

7.0 REPORTING

Program implementation reporting will be determined based on the project and delineation of roles and responsibilities, but not less that semi-annual. An annual work plan and monitoring plan, using established baseline data and specific targets and indicators will be agreed upon. Financial reporting will be in accordance with requirements of the obligating