Guinea - Forestry and Fisheries Management Project

Document of The World Bank FOR OFFIOAL USE ONILY Report No. P-5093-GUI MEMOR.hNDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT IN AN AMOUNT OF SDR 6.3 MILLION (US$8.0 MILLION EQUIVALENT) TO THE REPUBLIC OF GUINEA FOR A FORESTRY AND FISHERIES MANAGEMENT PROJECT September 8, 1989 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank autborization.  CURRENCY EQUIVALENTS Currency Unit = Guinean Franc (GF) US$1.00 = GF 590 a/ SDR1.OO = US$1.2 b/ 'WEIGHTS AND MEASURES Metric System ABBREVIATIONS AND ACRONYMS CCCE - Caisse Centrale de Cooperation Economique (France) CIDA - Canadian International Development Agency KfW - Kreditanstalt fUr Wiederaufbau (Federal Republic of Germany) FAC - Fonds d'Action et de Cooperation (France) FISCAL YEAR January 1 - December 31 a/ The exchange rate is established through an auction system and was FG 590 to the U.S. dollar at the time of negotiations (August 1989). bl As of August 1989.  FOR OMCL41 USE ONLY REPUBLIC OF GUINEA FORESTRY AND FISHERIES MANAGEMENT PROJECT CREDIT AND PROJECT SUMMARY Borrowert Government of Guinea Beneficiaries: Ministry of Agriculture and Animal Resources, National Forestry Department, State Secretariat for Fisheries. Amount: SDR 6.3 million (US$8.0 million equivalent) Terms: Standard, with 40 years maturity Onlending Terms: Not applicable Tentative Financing Plan: Government US$ 6.0 million IDA USS 8.0 million KfW US$ 5.5 million CCCE US$ 2.0 million CIDA US$ 1.5 million TOTAL US$23.0 million Economic Rate of Return: 392 Humid Forest Management Component 32? Fisheries Management Component Staff Appraisal Report: No. 7830-GUI Maps: IBRD Nos 21653, 21599, 21598 This document has a restricted distribution and may be used by recipients only in the perfcrmnrc; of their official duties. Its contents may not otherwise be disclosed without World Bank authuaAdon.  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF GUINEA FOR A FORESTRY AND FISHERIES MANAGEMENT PROJECT 1. The following memorandum and recommendation on a proposed credit to the Republic of Guinea for US$8.0 million equivalent is submitted for approval. The proposed credit would be on standard IDA terms with 40 years maturity and would assist in financing a project to strengthen national forestry and fisheries services. 2. Background. Although once densely forested, Guinea has today a forestry cover of only 4Z of its area. Less than 2Z has commercial value although adequate wood stocks remain in degraded forest, bush and mangroves. Forestry accounts for about 7Z of GDP. Demand for wood is strong and concentrated in the coastal zone as is the demand for farm land. As a result, there is heavy localized environmental deterioration, particularly in major watersheds. Guinea is also well endowed with marine fisheries resources, but the sector contributes only IU to Guinea's GNP, provides annually about 7 kg of fish per capita and generates little budgetary support. Because of inadequate management of fisheries licensing, remaining stocks are being rapidly depleted. 3. Guinean authorities have begun to recognize that the natural resource base of the country is being over-exploited. It has, for example, launched an intense program to develop an Environmental Action Plan in which several donors, including IDA, are actively participating. While adequate strategies and corrective action plans are being prepared, Guinean institutions are far from adequate to execute them. Institutional development has thus been given high priority, along with urgent actions to introduce rational resource management practices. 4. Proiect Obiective. The project's objective is to establish sound institutions for managing forestry and fisheries, as well as to launch priority operations. In the case of forestry, the project would strengthen the National Forestry Department within the Ministry of Agriculture and Animal Resources and several regional forest departments so that they progressively become more effective and begin needed forestry management work. In the case of fisheries, the project would reinforce the State Secretariat for Fisheries in the monitoring, control and surveillance of fishing fleets, to increase the sector's economic contribution and to preserve fish stocks. 5. Project Description. The project's forestry components would (a) improve the mobility, funding, training, and technical capacity of the national and several subordinate prefecture-level forestry departments; (b) prepare and  execute programs for protecting and managing about 300,000 hectares of forest reserves in ecologically sensitive areas, which would be supported with a pilot operation to establish and record farmers' land rights around the areas to be protected; and (c) provide support to upgrade the skills of about 80 forest engineers. Its fisheries component would (a) improve the operations of the State Secretariat for Fisheries through specialized Assistance and material support in investment planning, fisheries licensing, revenue collection, and fisheries research; and (b) launch an operation to monitor and control fishing in the Exclusive Economic Zone, conforming to the Fisheries Code. 6. The project would be executed over a four-year period. The forestry components would be managed by the National Forestry Department, headquartered in Conakry, which would rehabilitate the Forestry Center at Seredou, in the forest zone, tn supervise forestry work. Training would-be conducted in the existing Forestry Faculty located at Faranah. The fisheries components would be executed by the State Secretariat for Fisheries, Conakry, with research conducted through the existing Fisheries Research Center at Boussoura. 7. Rationale for IDA Involvement. IDA's participation in the project is consistent with its concern for promoting action to protect the environment and for ensuring sound management of renewable natural resources. It is also consistent with the policy of strengthening public institutions when in the public interest, improving fiscal performance, and mobilizing donor assistance. 8. Agreed Actions. The project's objectives and design have been agreed, and no unusual project conditionality is being recommended. The standard legal conditions of credit effectiveness would apply. For the forestry activities, disbursement would be conditional upon (a) all conditions of cross-effectiveness being met; (b) signature of technical assistance contracts; (c) modification of a number of legal texts covering the project's executing agencies; and (d) a Project Account being opened and an initial deposit of US$136,000 equivalent made by the Government. For the land rights pilot operation, disbursements would be conditional upon the opening by the Government of a Project Account and an initial deposit of US$17,000 equivalent. For the fisheries component, disbursement would be conditional upon (a) all conditions of cross-effectiveness being met; (b) approval by the Government of a new Fisheries Code; (c) adoption of a satisfactory fishing plan which would specify the level of fishing to be authorized and the regulations governing licencing; (d) adopticn of a revised structure for the State Secretariat for Fisheries; (e) conclusion of subsidiary agreements for the provision of sea transport and air services necessary for the surveillance of the Exclusive Economic Zone; and (f) a Project Account being opened, and an initial deposit of US$211,000 equivalent made by the Government. 9. Benefits and Risks. Tangible benefits within the project period are expected in terms of (a) increased wood and fish supplies for local consumption and, eventually, exports; and (b) increased state revenues and improved levels of land use security. In the loager term, the project would assist Guinea to apply more coherent environmental policies and programs through improved institutions. There do not appear to be major technical risks to the project. Risks are greatest in the area of stabilizing land use around the managed natural  - 3 - forests and a pilot approach is being adopted. The risk also exists that staff may not perform as expected, which demands additional training and improved personnel management. A number of vested interests remain in the present fisheries management system, which may interfere with the project's operations. However, the new legal framework, ir vell applied, will help manage this risk. Nonetheless, the situation will require close supervision. 10. Recommendation. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association and recommend that the Executive Directors approve the proposed credit. Barber B. Conable President Attachments Washington, D.C. September 8, 1989  4 Schedule A REPUBLIC OF GUINEA FORESTRY AND FISHERIES MANAGEMENT PROJECT ESTIM&TED COSTS AND FINANCING PLAN of Local Foreign Total Bave Cost (USS$ million)-------------- Estimated Costs a/ Forest Management and Land Rights Institutional Support 0.5 2.7 3.2 18 Management and Protection 1.5 3.5 5.0 28 Training 0.3 1.0 1.3 7 Land Rights 0.3 1.3 1.6 9 Sub-total 2.6 8.5 11.1 62 Fisheries Management Institutional Support 0.2 1.5 1.7 9 Surweillance 1.8 1.7 3.5 20 Research 0.1 1.6 1.7 9 Sub-total 2.1 4.8 6.9 38 Total Base Cost 4.7 13.3 18.0 100 Physical Contingencies 0.4 0.7 1.1 Price Contingencies 2.1 1.8 3.9 Total Project Cost 7.2 15.8 23.0 (including taxes) Taxes ..0 - 2.0 Total Project Costs 5.2 15.8 21.0 (net of taxes) a/ Including PPF advance of US$500,000. Tentative Financing Plan Local Foreign Total ------(US$ million)------ Government 4.1 1.9 6.0 IDA 1.6 6.4 8.0 KfW 1.4 4.1 5.5 CCCE 0.1 1.9 2.0 CIDA 1.5 1.5 Total 7.2 15.8 23.0  S,chedule B Page 1 of 2 REPUBLIC OF GUINEA FORESTRY AND FISHERIES MANAGEMENT PROJ?ECT PROCUREMENT METHOD AND DISBURSEMENTS a/ Procurement Methods Other Total Project Element ICB LCB Other Source Costs b/ -----------------(US$ million)---------------- Civil Works 0.6 0.6 - 1.0 2.2 (0.6) (0.3) - (0.9) Planting - - 0.5 cl 0.5 Vehicles 1.3 - 0.2 1.5 (1.0) (0.2) (1.2) Equipment - 0.5 - 0.8 1.3 (0.5) (0.5) Consultants 3.2 - - 4.2 7.4 (3.2) (3.2) Salaries - - 2.0 - 2.0 (0.7)4/ (0.7) Operating Costs 6.3 1.3 7.6 (l.0)e/ (1.0) PPF - 0.5 0.5 (0.5) (0.5) 5.1 1.1 9.0 7.8 23.0 (4.8) (0.8) (2.4) (8.0) a/ Amounts in parentheses indicate IDA financing. b/ Parallel financing by other donors would be under their own procurement procedures. c/ To be executed under force account as lots to be planted are scattered geographically. d/ Salaries of newly recruited observers and inspectors of SEP. e/ Operating costs for vehicles, travel and office expenses following acceptable government procedures.  Schedule B Page 2 of 2 Disbursements aI Amount 2 of Expenditures Category (US$ million) to be Financed bl 1. Civil Works 0.9 100? net of taxes 2. Vehicles and Equipment 1.5 100l net of taxes 3. Consultants 2.8 l00. 4. Operating Costs Land Rights 0.5 952 Fisheries 1.1 382 PYI, 27Z PY2, 132 PY3, 62 PY4. Refinancing PPF 0.5 Unallocated 0.7 P0 a/ Special Accounts of US$150,000 equivalent (for Forestry) and US$200.000 equivalent (for Fisheries) would be established. b Disbursements for eligible expenditures for all operating costs and contracts equivalent to less than US$50,000 would be made against Statements of Expenditures. Estimated IDA Disbursements IDA Fiscal Yir 1990 1991 1992 1S.93 1994 1995 1996 ----------