Malawi - Second Wood Energy Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 5914-lSI STAFF APPRAISAL REPORT MALAWI SECOND WOOD ENERGY PROJECT Februarv 26, 1986 Eastern Africa Projects Department Southern Agriculture Division 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 2uthorization.  CURENCY EQUInVENTS Currency Unit Malawd Rvacha (MK) USSI.00 MK 1.80 (January 1986) MK 1.00 US$0.56 (January 1986) 100 tamhala MK 1.00 WEIGHTS, VOLUMES AND MEASURES 1 .3 (solid) wood - 1.43 m3 (stacked) wood 1 .3 (stacked) wood - 0.70 ,3 solid wood 1 *3 (solid) hard wood - 0.70 ton of wood I m3 (stacked) hard wood - 0.49 ton of wood I ton of charcoal - 7 giga calories I ton of hard wood - 3 giga calories I meter (i) - 3.3 feet I cubic meter (m3) - 35.3 cubic feet I hectare (ha) - 2.47 acres I kilometer (km) - 0.62 niles I square kilometer (km2) - 0.39 square miles ABBREVIATIONS ACU - Area Control Unit ADD - Agricultural Development Division ARD - Agricultural Research Depar:ment CDC - Conoawealth Development Corporation CFO - Chief Forest Offlcer co - Clerical O#ficer DA - Development Are& DCFO - Deputy Chief Forest Officer DFO - Division Forest 'fficer EVA - Extension Planning Area(s) ESU - Energy Studies Unit FAO/CP - Food and Agriculture Organization/Coperative Program FD - Forestry Department FEU - Forestry Extension Unit FG - Forest Guards FRIM = Forest Research Institute of Malawi COM - Government of Kalowi IDRC - International Development Research Center INDEBANK - Investment Development Bank of Malawi MAI - Mean Annual Increment HCF - Malawi CoLlege of Forestry MDC - Malawi Development Corporation H & E - Monitoring and Evaluation MFNR - Min'stry of Forestry and Natural Resources NH - Nurserymen NRDP - National Rural Development Program PM - PaLrolmen. PO - Professional Officer RCP = Revenue Collection Posts RDP - Rural Development Project RFO - Regional Forestry Officer TA - Technical Assistant STA - Senior Technical Assistant STO - Senior Technical Officer TO - Technical Officer WED - Wood Energy Division WEP - Wood Energy Project WEPI - NRDP II Wood Energy Project GOVERNMENT FISCAL YEAR April 1 to March 31  FOR OmCIAL USE ONLY MALAWI SECOND WOOD ENERGY PROJECT Table of Contents Page I. BACKGROUND .**............... ......a ............**** 1 A. Introduction ................................. o............. I B. Economic Setting ......O..*..... .............................. 1 C. The Agricultural Sector ...........* ................... a.. 2 D. The Forestry Sub-Sector....................O...*.. ....... . 3 E. Bank Involvement in the Sub-Sector ...................... 5 F. Review of NRDP II Wood Energy Project ................... 6 II. THE PROJECT 8 I. TH.POJ.T....*........ ................................. A. Project Rationale and Objectives....................j... 8 B. Project A r e a ..ritO......................... 10 E. General Project DeCost 10ptin........................19 D. D etailed Featurel ............................. , 11 E. Project Cost ............................ 19 A. Financing an .anae. en.. .. ........ .* .......... , 21 B. EPvironmental Impact . ..... ............................ .. 21 I DI. PROJECT IMPIHNTATION ........e ............................ 23 A. Orvanization and Management ........................... .. 23 B. Pr ourement Prepaatio.................................. a.. 26 C. Disbursement ARET..DPICS.............................. 37 D. Accounts, Audits and Reports ........................... .......... 28 E. S uperv ision and R eviews ............................... 29 F. Status of Preparation ......................................... 29 IV. PRODUCTION, MAJ KETS AND PRICES SK................... 31 A. Wood Production and Markets ...................................... 31 B. Prices ............ .......... ............... 0.......... 32 V. BENEFITS, JUSTIFICATION AND RISKS .................................... 36 A. General ............. ... 0............................... 36 B. Project Budgetary Implications ........ .................... 36 C. Economic Returns ................ ................... ..... 37 VI. AGREEMENTS REACHED AND RECOMMENDATIONS ..................... 42 I This document has A rsticd ditbution and may be used by raipients only in the perfomanc Lo