The objective of the project is to introduce an integrated energy and ecosystems-based approach to grid/isolated-grid-based mini/small hydro-electricity generation in Sao Tome and Principe by leveraging $ 20.7 million in multilateral and private sector financing over its five-year implementation period. This, in turn, is expected to generate direct global benefits of 137,200 tons of CO2 over the same period and 36,850 tons CO2/yr thereafter in avoided greenhouse gas (GHG) emissions. In addition, in order to ensure the availability of hydro resources for electricity generation (and irrigation for job creation), the project will implement an integrated watershed management approach. It aims at integrating natural resource management with community livelihoods improvement in a sustainable way and within a landscape approach. The project will introduce innovative participative methods of natural resource management, conservation farming and agro-ecology. This will be achieved through watershed level land use planning and implementation of community forests over 6,000 ha, sustainable agricultural land management practices over 10,000 ha, and income generating activities (such as mushrooms, medicinal plants, ecotourism, etc.) for rural communities. This landscape approach will be sustained by a financial mechanism between the private hydroelectricity producers and the upstream communities, based on the maintenance of environmental services (water supply regulation).