Having considered the comments and recommendations of the Project and Programme Review Committee (PPRC), the Adaptation Fund Board decided:

(a) To endorse the concept for the proposal AFB/MIE/Water/2010/1, in accordance with the operational policies and guidelines;

(b) To request the secretariat to transmit technical review sheet, contained in document AFB/PPRC.1/7, to the United Nations Development Programme (UNDP);

(c) To further request the secretariat to transmit to UNDP the observations made by the members of the PPRC on the project when discussing it at the first meeting of the PPRC and listed under item (e) below and contained in annex III to the present report;

(d) To request UNDP to transmit the comments of the PPRC together with the technical review sheet to the Government of Nicaragua; and

(e) To encourage the Government of Nicaragua to submit a fully-developed project proposal through UNDP, and request UNDP to provide to the Adaptation Fund Board the clarifications requested in the technical review sheet, and in the comments of the PPRC, specifically:

i. The project should elaborate on the link with the two other on-going projects that seem to encompass some common activities.

ii. Component 2 should be better described, especially regarding the adaptation issue it addresses, and its cost should be better justified. The project proposal should clarify how it addresses the causes and not only the symptoms of drought and flooding. The issue of watershed management needs to be addressed, including consideration of effectiveness of ecosystem-based approaches.

iii. The proposal should provide a clear analysis of the expected measurable impact of the project, in relation to the overall challenge of flood management.

iv. More scientifically based information on precipitation and temperature baselines, anticipated impacts of climate change, as well as information on local ecosystems needs to be provided, together with explanation on how this information will be used in monitoring.

v. The planned investment of USD 1 million to capacity building and knowledge management seems high and needs to be clarified.

vi. The project will need to clearly identify which technical standards will be followed and the measures to be undertaken to ensure that these standards are met. The technical capacity of MARENA and how it will be augmented should be explained.