Announcement of World Bank Supports Sustainable Forestry in China on April 16, 2002

World Bank Supports Sustainable Forestry In China WASHINGTON, April 16, 2002--The World Bank today approved a US$93.9 million loan for the China Sustainable Forestry Development Project. The loan supplements a US$16 million grant from the Global Environment Facility (GEF) and a US$15 million grant from the European Commission. The project aims to protect some of China's most important remaining natural forests and associated biodiversity. It also aims to protect vital watersheds and reduce the risk of downstream flooding, and ensure a supply of wood to meet China's growing demand, in a way that takes pressure off forests elsewhere in Asia. The forestry sector plays a critical role in the Chinese economy, providing 40 percent of rural household energy, almost all the lumber and panel products for the large construction sector, and raw material for the large domestic pulp and paper industry. "The China Sustainable Forestry Development Project will help local communities affected by a recent natural forests logging ban to maintain or improve their standards of living by switching to other, more environmentally friendly, sources of income," says World Bank Task Manager for the project Mohamed Benali. The project will establish forest plantations, participatory planning and management in selected natural forests and nature reserves, community development activities targeting selected rural communities in the project areas, and training and capacity building for forest management. The project has three components: Protected Areas Management (GEF funding, with additional in-kind contributions from the World Wildlife Fund and The Nature Conservancy). This component will support the conservation and improved management of significant biodiversity in 13 high-priority nature reserves in natural forest areas, through components focused on participatory Nature Reserve planning and management; community-based nature conservation; and training and capacity building. Natural Forest Management (EC grant). This component will support the development and dissemination of improved sustainable management techniques in natural forest areas which are protected under the Government's Natural Forest Protection Program (NFPP); training in forestry management to employees as well as vocational training to laid-off workers of State Forest Enterprises in the project areas; and community development activities targeting selected rural communities in the project forest management areas that are most affected by the NFPP restrictions, in particular the logging ban imposed in 1998, because of their reliance on forest resources for their livelihood. Plantation Establishment (IBRD loan). This component will support increasing the production of wood to meet the growing gap between domestic supply and demand, and to generate new employment and income for forestry farms and rural households affected by the logging ban and other restrictions on forest land use. This will be accomplished through the establishment of timber and economic tree crop plantations; demonstrations of pre-commercial thinning of selected timber plantations; and provision of related technical support services. All project activities will be implemented in three key provinces--Sichuan, Hainan, and Hunan. These three key provinces were selected based on their interest and willingness to participate in the project, natural forest resources, biodiversity value, and commitment to natural forest protection. In addition to these three key provinces, the Protected Areas Management component will be implemented in four adjacent provinces of Gansu, Hubei, Yunnan and Guizhou in order to strengthen transboundary biodiversity protection and exchanges between provinces. The Plantation Establishment component will be extended to eight other provinces with suitable conditions for high yield commercial plantations to meet the increasing demand for wood and other forest products as a result of the logging ban. The GEF provides grant and concessional funds to developing countries and those with economies in transition for projects and activities that address four aspects of the global environment--biological diversity, climate change, international waters, and the ozone layer. Activities concerning land degradation, primarily those addressing deforestation and desertification, as they relate to the focal areas are also eligible for funding. For more information on the GEF, contact Hutton Archer in Washington at (202) 458-7117. For more information on the World Bank's work in China, visit www.worldbank.org.cn