China - Gansu and Inner Mongolia Poverty Reduction Project

Document of The World Bank Report No: 1 8982-CHA PROJECT APPRAISAL DOCUMENT ON A PROPOSED LOAN OF US$60 MILLION AND A PROPOSED CREDIT OF SDR 73.8 MILLION (US$100 MILLION EQUIVALENT) TO THE PEOPLE'S REPUBLIC OF CHINA FOR THE WESTERN POVERTY REDUCTION PROJECT June 1, 1999 Rural Development and Natural Resources Sector Unit East Asia and Pacific Region  CURRENCY EQUIVALENTS (Exchange Rate Effective April 1, 1999) Currency Unit = Yuan (Y) Y1.00= US$0.12 US$1.00 = Y8.30 FISCAL YEAR January 1 - December 31 GLOSSARY OF TERMS Banner Mongolian equivalent of a County Sumu Mongolian equivalent of a Township Gacha Mongolian equivalent of a Village mu Measure of land: I mu=0.067 ha ha Hectare Mcm Million cubic meters Bcm Billion cubic meters Vice President: Jean-Michel Severino Country Director: Yukon Huang Sector Manager: Geoffrey B. Fox Task Team Leader: Petros Aklilu  ABBREVIATIONS AND ACRONYMS ABC Agricultural Bank of China O&M Operation and Maintenance ACWF All China Women's Federation PAB Provincial Audit Bureau CPADO County Poverty Alleviation Office PADO Poverty Alleviation and Development Office CAS Country Assistance Strategy PEdC Provincial Education Committee CCICED China Council for International PFB Provincial Finance Bureau Cooperation on Environment and Development CIF Cost, Insurance and Freight PIC Public Information Center CSA Counterpart Special Account PIP Project Implementation Plan D&E Demonstration and Extension PLB Provincial Labor Bureau EIA Environmental Impact Assessment PLG Project Leading Group EPA Environmental Protection Agency PMO Project Management Office EPB Environmental Protection Bureau PP Project Province ERR Economic Rate of Return PPEO Provincial Project Execution Office (Qinghai) FAD Financial and Accounting Division PPMO Provincial Project Management Office FAO Food And Agriculture Organization Qinba Qinba Mountains Poverty Reduction Project FCPMC Foreign Capital Project Management RAP Resettlement Action Plan Center FMSM Financial Management System Manual REB Rural Enterprise Bureau FRR Financial Rate of Return SA Social Assessment FSR Farming System Research SAB State Audit Bureau GMS Grassland Monitoring Station SDR Special Drawing Right ICB International Competitive Bidding SOE Statement of Expenditure ICLS Integrated Crop/Livestock System SSB State Statistical Bureau ICR Implementation Completion Report STW Shallow Tube Well IDA International Development Association SU Sheep Unit IFAD International Fund for Agricultural SW Shallow Well Development IMRG Inner Mongolia Regional Government SWPRP Southwest Poverty Reduction Project LGPRD Leading Group for Poverty Reduction and TAG Technical Advisory Group Development of the State Council LMDC Labor Market Development Center TW Tube Well LMIS Labor Market Information System TWS Township Work Station MBD Model Bidding Document UNDP United Nations Development Program M&E Monitoring and Evaluation VSIP Voluntary Settlement Implementation Plan MED Monitoring, Evaluation and Dissemination VPIG Village Project Implementation Group MOE Ministry of Education WBO World Bank Office (Gansu) MOF Ministry of Finance WBLEC World Bank Loan Execution Committee (Gansu) MOU Memorandum of Understanding WCB Water Conservancy Bureau NCB National Competitive Bidding WFP World Food Program NPV Net Present Value XB Xiangride-Balong OD Operational Directive XRWCA Xiangride River Water Conservancy Administration (Qinghai)  CHINA WESTERN POVERTY REDUCTION PROJECT CONTENTS Page A. Project Development Objective 1. Project development objective .............................................................3 2. Key performance indicators .............................................................3 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the Project ...................3 2. Main sector issues and Government strategy .............................................................4 3. Sector issues to be addressed by the Project and strategic choices ............................................4 C. Project Description Summary 1. Project components .............................................................6 2. Key policy and institutional reforms supported by the Project .................................................7 3. Benefits and target population .............................................................8 4. Institutional and implementation arrangements .............................................................9 D. Project Rationale 1. Project alternatives considered and reasons for rejection ........................................................ 17 2. Major related projects financed by the Bank and other development agencies .......................1 8 3. Lessons learned and reflected in the Project design ............................................................ 18 4. Indications of borrower commitment and ownership ............................................................ 19 5 . Value added of Bank support in this Project ............................................................ 19 E. Summary Project Analyses 1. Economic ............................................................ 20 2. Financial ............................................................ 20 3. Technical ............................................................ 20 4. Institutional ............................................................ 21 5. Social ............................................................. 22 6. Environmental assessment ............................................................ 28 7. Participatory approach ............................................................ 3- F. Sustainability and Risks 1. Sustainability ............................................................ 34 2. Critical risks .......... 35  G. Main Loan conditions 1. Effectiveness conditions ....................... 38 2. Other ....................... 38 H. Readiness for Implementation ....................... 41 I. Compliance with Bank Policies ....................... 42 Annexes Annex 1: Project Design Summary .43 Annex 2: Detailed Project Description .48 Annex 3: Estimated Project Costs .81 Annex 4: Cost Benefit Analysis Summary .84 Annex 5: Financing Plan .93 Annex 6: Procurement and Disbursement Arrangements .94 Annex 7: Project Processing Schedule .99 Annex 8: Documents in Project File .100 Annex 9: Social Aspects .101 Annex 10: Environmental Aspects .113 Annex 11: Statement of Loans and Credits .136 Annex 12: CountryataGlance .139 Maps Qinghai Province No. IBRD 29993 Gansu Province No. IBRD 29994 Inner Mongolia Autonomous Region No. IBRD 29995  CHINA Western Poverty Reduction Project Project Appraisal Document East Asia and Pacific Region Date: June 1, 1999 Team Leader: Petros Aklilu Country Director: Yukon Huang Sector Manager: Geoffrey B. Fox Project ID: CN-PE-46564 Sectors: Al - Irrigation & Drainage, AL - Livestock, AM - Agro-Industry & Marketing, AQ - Annual Crops, and TR - Rural Roads Lending Instrument: Specific Investment Loan (SIL) Theme: Community-Based Development Poverty Targeted Intervention: Yes Project Financing Data Loan [X] Credit [X] Grant [] Guarantee [] Other (Specify) [] For Loans/Credits/Others: Amount (US$M/SDRM) Loan of $60/Credit of SDR 73.8 ($100 equivalent) Proposed Terms: []To be defined []Multicurrency [X] Single currency []Standard variable []Fixed [X] LIBOR-based Grace period (years): 5 Loan/10 Credit Years to maturity: 20 Loan/35 Credit Commitment fee: 0.75% Loan/0.5% Credit Service charge 0.75% Credit Front end fee on Bank loan 1.00% of Loan 4E^~ A-KWa""='VE'- }=gi=) MI In M 9