China - National Afforestation

 ICRR 10148 Report Number : ICRR10148 ICR Review Operations Evaluation Department 1. Project Data : OEDID: OEDID : C2145 Project ID : P003463 Project Name : National Afforestation Country : China Sector : Forestry L/C Number : C2145 Partners involved : Prepared by : Charles Derek Poate, OEDST Reviewed by : Robert J. Van Der Lugt Group Manager : Roger H. Slade Date Posted : 08/13/1998 2. Project Objectives, Financing, Costs and Components : The objectives of the National Afforestation Project (NAP) - the largest forestry investment ever funded by the Bank Group - were to: (i) expand forest resources, by establishing about one million hectares of intensively managed forest stands in 15 (later 16) provinces; (ii) improve their quality through use of superior planting stock and planting and maintenance techniques; (iii) strengthen research and extension programs; (iv) initiate an accelerated three breeding program; and (v create the organizational and managerial infrastructure to plan appraise, finance implement and evaluate plantation programs on a permanent basis. Total project cost amounted to US$560.2 million (as compared to the appraisal estimate of US$500 million). The IDA Credit of US$300 million equivalent was approved on May 29, 1998 and closed, fully disbursed, on December 6, 1997 one year after the original envisaged date. 3. Achievement of Relevant Objectives : NAP exceeded its physical objectives and goals for technological improvement . The re-estimate ERR is 23.5 per cent slightly above the SAR estimate and the project has had significant, though difficult to quantify, environmental and institutional benefits . 4. Significant Achievements : NAP succeeded in planting about 1.4 million hectares, 40 per cent over the SAR target. This was made possible by the devaluation of the Chinese currency against the SDR and lower unit planting cost . An efficient administrative system was established at the provincial anc county levels . Important and large environmental and institutional benefits, including soil conservation and the fixation of carbon dioxide will accrue. And, although not defined at appraisal, NAP had an important socio-economic impact in remote poor areas, leading to poverty reduction. 5. Significant Shortcomings : There were no significant shortcomings, but more could have been done . The forestry research agenda remains somewhat isolated from commercial and environmental needs despite NAP's positive contributions. Also institutional linkages remain uneven depending more on personal relationships or expedient financing arrangements than on in-built incentives or structures . To ensure more investment in forestry, financing and taxation policies need to be made more attractive to private investors . 6. Ratings : ICR OED Review Reason for Disagreement /Comments Outcome : Highly Satisfactory Highly Satisfactory  Institutional Dev .: Substantial Substantial Sustainability : Likely Likely Bank Performance : Highly Satisfactory Highly Satisfactory Quick initial reaction to government proposal; focus on results that could be achieved; good continuity and emphasis on technological and strategic issues. Good partnership with the government and its agencies. Borrower Perf .: Highly Satisfactory Highly Satisfactory Excellent and totally dedicated local team, with good continuity. Strong ownership and commitment at all levels. Seizing opportunities as they arose. Good understanding of and full compliance with Bank requirements. Quality of ICR : Exemplary 7. Lessons of Broad Applicability : Project success is likely where it is initiated and supported at the highest level of government . Where institutional capacity is robust, an investment project can also achieve key sector issues, much as a program or sector loan. The linkage of financial control with technical standards was critical to project success (a financial intermediary model would not have worked in this case ). 8. Audit Recommended? Yes No Why? Partly because this was the largest investment in forestry by the Bank group and partly to verify that the highly satisfactory results were in fact maintained and development objectives thus sustained. It would be very good also to forge this into a sector impact evaluation of the whole Bank funded forestry program in China. 9. Comments on Quality of ICR : The ICR is exemplary. It is comprehensive, includes an estimate of the economic returns of the project, and presents the lessons learned very well . The project is presented within the wider forestry program in China. The borrower made a substantial input in the evaluation process though its own ICR, a very concise, analytical and well presented document, among the best included in Bank ICRs .