UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Project Document (final draft 21 March 2018) (1) Project in the Republic of India Project number: 170113 Project at the selected states of Bamboo for Products and Fuels: strengthening and diversifying North Eastern Region (NER) of inclusive bamboo value chains for sustainable livelihoods in India North East India Thematic area code Creating shared prosperity; and Safeguarding the environment Starting date: Q1, 2018 Duration: 1 year (inception and pilot) + 3 years (main implementation) Project site: Assam; Arunachal Pradesh; Meghalaya; and Nagaland (North East India), Government Department of Industrial Policy and Planning (DIPP); Ministry Co-ordinating agencies: of Development of North East Region (MDONER); National Bamboo Mission; Government of Assam; Government of Arunachal Pradesh; Government of Meghalaya; Government of Nagaland; Counterparts: Numaligarh Refinery Limited (NRL) Nagaland Bamboo Development Agency (NBDA) Arunachal Pradesh Bamboo Resource Development Agency (APBRDA) Integrated Basin Development and Livelihood Promotion (IDBLP) Government of Meghalaya Executing agency: United Nations Industrial Development Organization (UNIDO) Project Inputs (USD) (2) NRL Funding
Granted through UNIDO NRL directly (indicative) Phase 1 Phase 2 Phase 1 Phase 2 Net Project Costs $ 237,000.00 $ 866,000.00 $ 302,000.00 $ 1,437,000.00 Project Support costs $ 30,810.00 $ 112,580.00 0 0 (13%): Grand Total $ 267,810.00 $ 978,580.00 $ 302,000.00 $ 1,437,000.00
1 Subject to final approval by NRL and UNIDO. 2 The partnership project will be funded in full by NRL i | P a g e
Brief description The proposed partnership project of Numaligarh Refinery Limited (NRL) and the United Nations Industrial Development Organization (UNIDO) aims to strengthen, diversify and expand value chains for production of bamboo-based products and fuels for income and employment creation in North East India, in particular in the States of Assam, Arunachal Pradesh, Meghalaya and Nagaland and improving viability of bamboo use for bioethanol production. The project aims to maximize value creation from abundant bamboo resources by producing both bamboo products as well as providing bamboo as feedstock for the new to establish ethanol plant (bio-refinery), by NRL and its Joint Venture partners. The project will work by means of establishment of community-based bamboo collection and processing clusters and supporting these to develop marketable products and connect to domestic and international markets, whilst also providing bamboo feedstock to the bio- refinery in a cost-effective and sustainable manner.
The partnership project aims to contribute to improving livelihoods for impoverished communities in North East Region by creating diverse and demand-driven sustainable bamboo supply chains that provide opportunities for employment and income generation in selected communities in Assam, Arunachal Pradesh, Meghalaya and Nagaland. In addition, the project aims to set up competitive and reliable bamboo feed stock system for bioethanol plant and thereby contribute to realization of aims and objectives of bioethanol policy and national action plan on climate change The project therefore works towards (1) improved provision of knowledge, technical, management, marketing and financing support for market-driven and inclusive expansion and diversification of supply chains for bamboo products and bamboo-derived fuels and (2) establishment of community-based enterprises that sustainably manage and harvest bamboo, produce and market bamboo products and supply bamboo feedstock to bio-refinery.
The project will be jointly implemented through a development partnership of UNIDO and NRL. It will be conducted in two phases. Phase I (up to 12 months) concerns inception and pilot and serves primarily to operationalize the cluster-based bamboo supply model, including initial assessment and planning for up to four clusters. Phase I serves to demonstrate the feasibility of the cluster-based supply chain model and thereby also contribute to reducing uncertainties in regard to volume and price of cluster-based bamboo feedstock supply to the biorefinery. Phase II (up to 36 months) is the main implementation stage, organized in two successive batches of clusters development. It will bring supply of bamboo feed stock to scale (e.g. in range of 30-50% of the biorefinery requirement) from up to 25 clusters, based upon detailed performance criteria arising from the phase I. Approved: Signature: Date: Name and title:
On behalf of the Government of India:
On behalf of UNIDO:
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Table of Contents
I. CONTEXT...... 1 A. BAMBOO IN NORTHEAST INDIA ...... 1 1. Resource Base ...... 2 2. Bamboo utilization and industries ...... 7 3. Bamboo for Bioethanol ...... 8 4. Problem Description ...... 9 5. Project Beneficiaries ...... 10 B. GOVERNMENT POLICY AND STRATEGY ...... 11 II. REASONS FOR UNIDO ASSISTANCE ...... 12 III. THE PROJECT ...... 14 A. OBJECTIVE OF THE PROJECT ...... 14 B. THE UNIDO APPROACH...... 14 C. RBM CODE AND THEMATIC AREA CODE ...... 19 D. EXPECTED OUTCOMES...... 19 E. OUTPUTS AND ACTIVITIES ...... 20 F. TIMELINE OF ACTIVITIES ...... 22 G. RISKS AND MITIGATION MEASURES ...... 24 IV. INPUTS ...... 25 A. COUNTERPART INPUTS ...... 26 B. UNIDO INPUTS ...... 27 V. BUDGET ...... 28 VI. MONITORING, REPORTING AND EVALUATION ...... 30 A. PROJECT MONITORING AND EVALUATION ...... 30 B. STAKEHOLDERS CUM ADVISORY COMMITTEE ...... 30 C. REPORTING ...... 30 D. MONITORING & IMPACT EVALUATION ...... 30 VII. PRIOR OBLIGATIONS AND PREREQUISITES ...... 31 VIII. LEGAL CONTEXT ...... 31 IX. PROJECT MANAGEMENT AND COMMUNICATIONS STRATEGY ...... 31 ANNEX 1: PROJECT LOGICAL FRAMEWORK ...... 32 ANNEX 2: MOU BETWEEN NRL AND UNIDO ...... 35
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ABBREVIATIONS AND ACCRONYMS
ADC Autonomous District Council APBRDA Arunachal Pradesh Bamboo Resources and Development Agency BAC Bamboo Advocacy Coalition BDAs Bamboo Development Agencies CBTC Cane and Bamboo Technology Centre CII Confederation of Indian Industry DC (H) Development Commissioner (Handicrafts) DIPP Department of Industry Policy and Promotion EBP Ethanol Blending Programme FSI Forest Survey of India FINER Federation of Industry and Commerce of the North Eastern Region GoI Government of India INBAR International Network of Bamboo and Rattan ISID Inclusive and Sustainable Industrial Development JFMC Joint Forest Management Committee KVIC Khadi and Village Industries Commission MoC&I Ministry of Commerce and Industry MoEFCC Ministry of Environment Forests and Climate Change MoMSME Ministry for Micro, Small and Medium Enterprises MSME Micro, Small and Medium Enterprise NBM National Bamboo Mission NBDA Nagaland Bamboo Development Agency NER North Eastern Region NGOs Non-Government Organizations NRL Numaligarh Refinery Limited PMC Project Monitoring Committee PwC Price waterhouse Coopers SDG Sustainable Development Goal SPV Special Purpose Vehicle TOF Tree Outside Forest UNDAF United Nations Development Assistance Framework UNFCC United Nations Framework Convention on Climate Change UNIDO United Nations Industrial Development Organization UNSDF United Nations Sustainable Development Framework VBDC Village Bamboo Development Committee VGF Viability Gap Funding
CURRENCY
1 US$ = 64.89 Indian Rupees (INR): UN Operational Rate of Exchange, March 2018.
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I. CONTEXT
A. Bamboo in Northeast India
The North-East Region of India comprises of eight landlocked states in the furthest northeastern corner of India: Arunachal Pradesh; Assam; Meghalaya; Manipur, Mizoram; Nagaland; Sikkim; and Tripura. The States are landlocked between Bangladesh, Bhutan, Nepal, China and Myanmar, and its highlands, mountains and valleys are part of the Hindu Kush Himalaya region. Total population reaches some 45 million, with 2/3rd thereof residing in Assam. The total North East is home to less than 4% of India’s population. Apart from oil extraction and processing in Assam, through Numaligargh Refinery Limited (NRL) and others, and selected plantation industries (tea, forest products and silk), the level of industrialization has remained low with manufacturing contributing only about 1% to the economy of the North East.
Figure 1: North-East India (source www.wikipedia.com)
Bamboo is a vital element of India’s North-Eastern Region (NER). It is widely used for rural housing, fencing and some firewood, whereas it is also used on a limited scale by industry for production of floor and other boarding, furniture, incense sticks and woven basketry. Large scale use of bamboo for paper production has turned uneconomic which resulted in – temporary - closure of paper mills in the NER. Bamboo is a lifeline resource that generates jobs and economic opportunity, while contributing to ecological security, environmental conservation, and rural development.
Bamboo is a fast-growing woody grass. Bamboo species found in India are clump forming where the culms are closely spaced and grouped together which makes it more difficult to harvest. The bamboo plant has an extensive underground network, of which the singular feature is the rhizome. Above the ground, a stem (culm) arises from the rhizome. The culm is normally a hollow cylinder tapering towards its top, with mature culms reaching 35-40 feet. Tulda (Jati), hamiltonii (Kakoo) and balcooa (Bhaluka) are most abundant in NER, and have an average green culm weight of respectively 25, 30 and 33 kg respectively. Most bamboos are monocarpic plants, meaning that they flower (and fruit) once in their lifetime and then die.
The importance of bamboo to the NER has been widely recognized by the Government of India (GoI) through numerous policies and programs, notably by the revived National
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Bamboo Mission (NBM) as well as by the presence of bamboo development agencies in some states.
Bamboo is classified as a non-timber forest resource. Its felling and transportation were subject to approval under forestry regulations. In a landmark announcement in November 2017, GoI ruled that bamboo sourced from non-forest land will no longer be considered a forestry resource and hence be exempted from approval for harvest and transport. It is widely expected that the lifting of restrictions on bamboo from non-forest land will indeed promote agro-forestry, either as bamboo plantations or with bamboo integrated in cropping systems, and open new opportunities for bamboo based value chains and industries.
An emerging opportunity is the use of bamboo as a feedstock for production of bio-ethanol and other valuable chemicals. NRL wishes to capture potential of bioethanol for blending in transport fuels. NRL therefore entered into a Memorandum of Understanding (MoU) with Chempolis Oy of Finland to develop and establish a bio-refinery based on bamboo feed stock, using Chempolis formicobio™ proprietary technology. Chempolis’ formicobio™ is a technology for the production of cellulosic sugars and further ethanol. The technology has been specially developed for non-food raw materials (e.g. bamboo, bagasse, straws, oil palm biomass, and other agricultural residues), and it is based on selective fractionation of biomass with fully recoverable bio-solvent containing formic acid. The formicobio™ technology avoids the main problems associated with other technologies developed for non-food raw materials and represents a true third-generation (3G) technology for the production of cellulosic sugars and further ethanol. The technology enables co-production of platform chemicals, such as acetic acid and furfural, which are used as raw materials in the production of paints, adhesives, and plastics, and as solvent and raw material for resins. Furfural can also be converted into synthetic diesel or gasoline ingredient by hydrogenation. In addition, combustion of co-produced solid biofuel (biocoal) can generate all the energy needed in the bio-refinery, with some surplus to be used for other purposes.
NRL and Chempolis Oy conducted a feasibility study for commercial bio-ethanol production at a scale of 49,000 ton ethanol per annum, requiring around 300,000 ton bone dry bamboo (equivalent to 500,000 ton green weight bamboo). It is foreseen to source bamboo from adjacent bamboo rich districts in the states of Assam, Arunachal Pradesh, Meghalaya and Nagaland. The bioethanol plant is schedule to be constructed adjacent to NRL. Environmental clearance has been obtained in 2017. A joint venture is being created for the establishment and operation of the bioethanol plant, comprising of NRL, Chempolis Oy, Fortum (renewable energy company) and Finfund (Finland sovereign wealth fund). Construction is expected to commence mid 2018 and would take a maximum of three years.
1. Resource Base
India ranks second to China as the country with the most bamboo genetic resources. According to the Forest Survey of India (FSI), the diversity of bamboo in India covers 18 genera and 126 species distributed over an area of 8.9 million hectares, which constitutes about 12.8% of total forest area of the country. Bamboo occurs naturally throughout the country, except in the states of Jammu and Kashmir. The inventory of bamboo resources in India is an on-going process. The most recent FSI data on bamboo dates back to 2011. Updated information is only expected in 2018. Out of the total bamboo forest area, nearly 28% is found in the NER, followed by 20.3% in Madhya Pradesh, 9.9% in Maharashtra, 8.7% in Orissa, 7.4% in Andhra Pradesh and 5.5% in Karnataka, and the remaining 20.1% in other States. NER covers 66% of growing stock of bamboo in India. NER also has the richest diversity of bamboo, comprised of 58 species belonging to 10 genera. These points towards the clear comparative advantage the NER has towards leveraging bamboo as a resource to
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create sustainable livelihoods and industries taking advantage of high concentration and abundance of raw materials.
Table 1 provides a summary of forest and bamboo inventory in NER states. Total bamboo growing stock in NER is estimated at 55.14 million MT (metric ton), among which Arunachal Pradesh has the maximum growing stock of 14.43 million metric ton (MMT) followed by Manipur (13.73 MMT), Assam (12.22 m MT), Meghalaya (7.49 m MT) and Nagaland (7.27 m MT). Annual bamboo use in NER was estimated at 64,600 MT per annum, approximately 0.1% of the growing stock.
Summary of Forest and Bamboo Areas of 8 States Total Forest % of Total Reserved Unclassifie Bamboo Bamboo Protected States 2 Geographic Forest 2 d Forest Bearing Area / Total Area (km ) 2 2 Forest (km ) 2 2 Area (km ) (km ) (km ) Area (km ) Forest area Arunachal 51,540 62% 10,546 9,528 31,466 16,083 31% Pradesh Nagaland 9,222 56% 86 508 8,628 4,903 53% Meghalaya 9,496 42% 1,113 12 8,371 4,793 50% Assam 28,832 34% 17,864 0 8,968 7,238 25% Mizoram 16,717 57% 9,245 55% Manipur 17,418 78% 1,467 4,171 11,780 9,303 53% Tripura 6,294 60% 3,588 3,607 2,195 3,246 52% Sikkim 5,841 82% 3,392 1,181 20% Table 1: Forest and bamboo areas in NER (source, FSI, 2011)
Despite the great abundance of bamboo resources, the NER faces great challenges in exploiting the socio-economic potential of bamboo. The NER remains the least industrially developed part of India and is most in need of roads and infrastructure for socio-economic and industrial development. Most of the bamboo occurs in the forest areas that are difficult to access, resulting in poor pre- and post-harvest management. The International Network for Bamboo and Rattan (INBAR) has estimated that 2.35 million tons of bamboo stock is depleted annually due to suboptimal harvests. Compared to other countries like China, Thailand and Vietnam, India is still highly reliant on bamboo from forests and has been slow to develop bamboo plantations under intensive management. Through programs like the NBM, as well as through work by UNIDO and other international organizations, awareness about solutions to problems in the bamboo sector is increasing and public and private initiatives are on the rise.
One of the key challenges for bamboo value chain development is the low density of harvested bamboo, around 0.25 ton/m3 for green bamboo poles and around 0.33 ton/m3 for flattened or split bamboo. Combined with rough terrain and limited road infrastructure and seasonal disruption due to monsoon rains, transportation and distance to bio-ethanol plant become major challenges to the feasibility of the bioethanol plant. This partnership project therefore focusses on bamboo rich areas within closest geographic proximity of NRL. These fall within the states of Assam (home to NRL), Arunachal Pradesh, Meghalaya and Nagaland. A further selection of priority sourcing districts will be made as part of the project, based on additional data collection and a wider set of objectively verifiable criteria, including distance to NRL, ease of access of bamboo growing areas, volume, maturity and sustainability of bamboo resources, and technical and socio-economic support infrastructure. As per FSI (2011), in the TOF (Tree Outside Forest) areas, the total number of culms estimated at national level is 2127 million with an equivalent weight of 10.20 million tonnes. The North- Eastern plain is estimated at 289 million. The equivalent weight is 1.72 million tonnes. The inventory results indicate that the maximum number of green sound culms are found in Arunachal Pradesh 2666 million followed by Assam 2046 million, Manipur 2035 million and Mizoram 1953 million.
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Assam The state of Assam shares borders with Bhutan and Arunachal Pradesh to the north; Nagaland and Manipur to the east; Meghalaya, Tripura, Mizoram and Bangladesh to the south; and West Bengal to the west via the Siliguri Corridor, a 22 km strip of land which connects the state to the rest of India.
Assam has 29,237 km2 of forests, which accounts for over 37% of its geographical area. The extent of the bamboo bearing areas is 7,238 km2 (724 thousand ha), which is nearly 25% of the total forest area of the state. There are 105 km2 (10,500 ha) of pure bamboo areas, 4,049 km2 (404,900 ha) of dense bamboo areas, and 2,878 km2 (287,800 ha) of scattered bamboo areas within the state forests (FSI, 2011).
There are different categories of forest such as reserved, protected, community, unclassified and private. With the exception of reserved and protected forests, communities, clans or villages own the forests. The ownership structure varies from one Autonomous District Council (ADC) to another. The revenue from the forest is retained by the ADCs. Along with the ADCs, the federations of Joint Forest Management Committees (JFMC) and Village Bamboo Development committees (VBDC) play a key role in the procurement of bamboo.
34 bamboo species have been identified in Assam. The most common species are Dendrocalamus hamiltonii (Kako), Schizostachyum dullooa (Dolu), Melocanna baccifera (Muli), Oxytenanthera parviflora (Hill Jati), Dendrocalamus longispathus (Khang), Oxytenanthera albociliata (Kala sundi), Oxytenanthera nigrociliata (Kaligoda), Bambusa pallida (Hill Jati) and Bambusa balcooa (Bhaluka).
Bamboo occurs throughout the state in pure bamboo forests and in mixed forests. Cachar and the North Cachar Hills have the highest concentration of bamboo, followed by Central Assam (Nagaon, Diung Valley), Upper Assam (Lakhimpur, Sibsagar), Lower Assam, and Goalpara. The total bamboo production in these regions is estimated at 725,000 MT (NEDFI Databank). It is estimated that the availability of homegrown bamboo is more than 400 thousand MT per annum. Much of the bamboo that was harvested was sold to pulp and paper mills.
Arunachal Pradesh Arunachal Pradesh is situated in the Eastern Himalayan Range and borders the states of Assam and Nagaland to the South, Bhutan to the west, Myanmar to the East and China to the North. Itanagar is the capital of the state.
Arunachal Pradesh ranks second to Madhya Pradesh as the state with the most extensive forest cover. Bamboo is an extremely important resource and accounts for 31% of the state’s forest cover. The government body responsible for managing the bamboo resources of the state is the Arunachal Pradesh Bamboo Resources and Development Agency (APBRDA). The recorded forest area in the state is 51,540 km2, which is 61.55% of its geographical area. Reserved forests, protected forests and unclassified forests constitute 20.46%, 18.49% and 61.05% of recorded forest area respectively. Of the total forest area, over 5 million ha is state- owned and only 15,500 ha are under private ownership. The protected areas constitute 11.68% of the geographical area of the state. In terms of the forest density classes, the area covered by very dense forests is 20,868 km2, that with moderately dense forests is 31,519 km2 and open forests are 15,023 km2. The extent of bamboo bearing area in the forests of the state is 16,083 km2 (or 1.6 million ha) with a total bamboo growing stock of 14.43 million MT (FSI, 2011).
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Bamboo is largely found mixed with other species throughout the state’s vast forest area. Some districts however have a high concentration of pure bamboo forests, as shown below.
District Geographical Area under pure Area (Ha) bamboo (Ha) Papum Pare 339,189 4,616 Changlang 510,634 3,074 West Kameng 485,058 2,782 Lohit 450,765 2,582 Upper Siang 651,106 2,574 Kurung Kumey 673,635 2,384 Upper Subansiri 661,223 2,373 West Siang 831,942 1,934 Dibang Valley 916,355 1,832 Tirap 196,824 1,714 Lower Subansiri 282,611 1,527 East Kameng 524,951 1,296 Lower Dibang Valley 416,746 1,171 Anjaw 712,438 1,160 East Siang 395,692 977 Tawang 236,727 578 Total 8,285,896 32,574 Source: State Forest Research Institute of Arunachal Pradesh, 2011. Arunachal Pradesh has a population of 1.3 million (2011 Census). Over 500 thousand people are directly dependent on bamboo for their livelihood. It is estimated that each individual uses 35 bamboo culms per year, which accounts for 0.5 million MT. The state has various bamboo industries at different locations. The bamboo consumption of industries is estimated to be around 883 MT of raw material per annum.
Meghalaya The state of Meghalaya is bounded to the south by the Bangladeshi divisions of Mymensingh and Sylhet, to the west by the Bangladeshi division of Rangpur, and to the north and east by India's State of Assam. The northern borders with Assam run along the districts of Goalpara, Kamrup and Nowgong, while the districts of Karbi Anglong and North Cachar Hills form the eastern frontier with Assam. The state capital is Shillong.
The state’s forested area covers 17,853 km2, which makes up approximately 80% of its geographical area. The area under bamboo totals 4,793 km2 (479 thousand Ha), which accounts for 27% of the forest area of the state (FSI, 2011).
37 bamboo species have been identified in the state. The most dominant species are Melocanna baccifera, Bambusa nutans, Dendrocalamus hamiltonii and Bambusa tulda. Other species that occur widely in the state include Dendrocalamus strictus, Bambusa bambos, are Bambusa pallida.
Bamboo forests are controlled by 3 Autonomous District Councils (ADC) of Meghalaya, namely the Khasi Hills ADC, the Garo Hills ADC, and the Jaintia Hills ADC. The distribution of bamboo in these areas is summarized below:
Region Bamboo Area (Ha) Khasi Hills 172,952 Garo Hills 123,302 Jaintia Hills 14,018 Total 310,272 Source: Meghalaya Forest Department, 2011
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Bamboo is an important source of income generation in Meghalaya. People harvest bamboo from areas belonging to their respective communities. Most of the bamboo that is harvested is consumed locally. Presently there are no large-scale buyers, though there are traders who organize the procurement of bamboo for export to users in other states.
Nagaland The state of Nagaland has borders with Assam to the west, Arunachal Pradesh and part of Assam to the north, Myanmar to the east, and Manipur to the south. Its capital is Kohima and the largest city is Dimapur, which lies in the immediate vicinity of Assam. Dimapur has immense potential to serve as one of the nearest supply and storage bases for the proposed bio-refinery at Numaligarh.
The Nagaland Bamboo Development Agency (NBDA) is the GoI authority responsible for guiding the development of bamboo resources and enterprises in the state.
The state has a unique land ownership system wherein over 88% of the forests are owned by communities or private individuals. The land ownership system, falls under Article 371(A) of the Indian Constitution, which relates to customary laws of the Nagas.
Bamboo has a long cultural tradition in the arts and crafts culture of Nagaland. The indigenous artisanal use of the plant has been passed on from generation to generation. Bamboo thus constitutes one of the most important forest resources of the state. It is a basic material that Naga communities rely upon for their livelihood.
Nagaland has a forest area of 9,222 km2 (922 thousand hectares), nearly half of which is taken up by bamboo stands. The state has 448,000 hectares of bamboo, which is about 5% of India’s growing stock (FSI, 2011).
Bamboo is found extensively all over the state. It occurs as a predominant plant in portions of the districts of Dimapur, Peren, Mon and Mokokchung. In all other districts it is found mixed with other forest species.
22 bamboo species have been identified in the state. The dominant species are Dendrocalamus hamiltonii (Kakoo), Schizostachyum dullooa (Daloo) and Bambusa tulda (Jati). They occur along the lower belts in the border with Assam.
NBDA has targeted the establishment of 50 thousand hectares of managed plantations during the 11th five-year plan and another 50 thousand hectares during the 12th five-year plan. To support plantation development, NBDA has established 81 nurseries across the State.
By the end of the 12th five-year plan, about 1 million tons of bamboo raw material from the new plantations is envisaged to be available for value addition. The expected amount to be generated from the resource development and the subsequent value addition is estimated at Rs 5000 crores (approximately 750 million USD).
Originally it was expected that around 350 thousand tons of raw material from the new plantations would be utilized by Tuli paper mill, while 650 thousand tons would be used for processing other bamboo products. The Tuli paper mill has however become defunct, and the bamboo resources it would have otherwise absorbed can be made available for production of bamboo-based products and/or fuel, including at the proposed bio-refinery.
NBDA and its Village Bamboo Development Committees (VBDCs) have identified the districts of Peren, Dimapur, Wokha, Mokokchung, Longleng and Mon as having the best accessibility and adequate and sustainable quantities of bamboo. With regard to the present
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project, NRL has signed an MOU with NBDA for the supply of 200 thousand tons of semi- processed bamboo per annum.
2. Bamboo utilization and industries
Bamboo has traditionally been used in the NER for basic construction and scaffolding, woven mats and basketry, incense sticks, and a wide variety of other handcrafted items. The utilization and trade of bamboo sector is dominated by large informal sector comprising farmers, artisans, and family owned cottage industries located in remote villages.
For many years bamboo has been used as the primary raw material of India’s pulp and paper industry, which is largely based in the NER. It is also increasingly being considered and part used as a wood substitute for a range of industrial products including particleboard, bamboo mat boards, and bamboo mat corrugated sheets. Bamboo is cultivated in a small scale in homesteads but most of the material that is processed into finished products is extracted from state owned forests.
Currently the formal bamboo sector in the NER is made up of a limited number of industries. With the exception of the paper industry, most of the manufacturers are small to medium sized enterprises using relatively small volumes of bamboo. The two government-owned paper mills in Assam have combined annual capacity of 260,000 MT. However, both the mills are currently inoperative and chances of their revival remain very uncertain. Paper however is produced in a private paper mill at Jogighopa in Assam. The processing of bamboo shoots is dominated by two companies (one in Assam and one in Nagaland) with a combined annual output of 1,100 MT. Industrial production of window blinds, floor mats, and place mats is done by two companies in Assam with a combined annual capacity of 670 thousand m². Bamboo flooring is produced at two factories (one in Assam and oe in Tripura) with a combined capacity of 150 thousand m². Bamboo particleboard is produced at one factory in Meghalaya with an annual capacity of 6 thousand MT. The production of bamboo matboards and bamboo mat corrugated roofing sheets amounts to 240 thousand units p.a., which are manufactured in four factories (two in Arunachal Pradesh, one in Mizoram, and one in Meghalaya).
Despite the bamboo manufacturing activities in the NER, local products have not yet succeeded to expand to domestic markets in India or international markets. This is due to many factors, including undoubtedly the lower accessibility arising from the remote location. The bamboo sector is dominated by traditional handicrafts produced in villages where market information and product design capacity are lacking, and these need to become available for successful sector development. The industrial bamboo products sector of the NER has great potential, but the quality and design of products is insufficient to access markets, compared to those of other countries. The industrial sector is still in relative infancy, and lags far behind China and other countries such as Vietnam and Thailand. Global export markets for bamboo products are growing rapidly and the development of innovative products is a continuous process in many countries, especially in China. The utility of bamboo has expanded to include its transformation into various structural composite panels. Bamboo composites offer in principle several advantages due to renewable and biodegradable properties, relative to other construction materials, which though need to be further substantiated through detailed technical, socio-economic and environmental evaluation
Some initiatives to promote local industries and develop applications to maximize the use of available bamboo resources are being implemented in the NER, but it is necessary to improve and develop the raw material resource base in a sustainable manner. In this regard the program of developing bamboo plantations represents an important step forward. Interventions to improve supply chain management, from raw materials (culms and edible Page | 7
shoots), preprocessed materials (e.g. split culms and slivers), and semi-processed products (e.g. woven mats), up to finished products (boards, furniture, handicrafts, textiles) are essential, and have also been prioritized by the NBM, but more concrete interventions are urgently required.
3. Bamboo for Bioethanol
Government of India recently stepped up its support for production of bio-ethanol, most prominently by means of the new bio-ethanol policy, draft of which was announced on 23rd November 2017. The new bio-ethanol policy aims to spur investments of the tune of INR 50 billion (USD 750 million) for setting up projects with a total production capacity of 1 billion liters of fuel ethanol every year. The policy is also aimed at cutting down the country’s significant energy import dependence as well as meet Nationally Determined Contributions (NDCs) committed to the Paris Agreement on Climate Change.
The new policy is expected to promote production of bio-ethanol from ligno-cellulosic biomass as against the conventional approach of molasses based ethanol production for Ethanol Blending Programme (EBP) which aims at 20 percent ethanol blending in petrol by 2030. The scheme under the policy provides for financial support in order to incentivize investment in the initial few commercial scale, second generation (2G) ethanol bio-refineries. Under the scheme, Viability Gap Funding (VGF) subject to a maximum of 20 per cent of the project cost or Rs 5 crore (USD 750,000) for every 10 lakh litres summed to bio-refinery name-plate capacity will be provided to make the projects commercially viable. Maximum VGF disbursement of Rs 150 crore (USD 22.5 million) will be made for every project.
Numaligarh Refinery Limited (NRL) is a joint venture between Bharat Petroleum (61.65%), Oil India (26%) and the Government of Assam (12.35%). NRL has identified bamboo as an appropriate feedstock for the production of bioethanol, using a processing technology developed and tested by the Finnish company Chempolis Oy (hereafter Chemopolis). NRL plans to set up a bio-refinery at Numaligarh, Assam for production of fuel grade ethanol from bamboo. The plant will have capacity to process 300 thousand metric tons (TMT) of bamboo (bone dry) and will produce 49 TMT of ethanol together with associated platform chemicals.
NRL plans to source the feedstock from the states of Assam, Arunachal Pradesh, Nagaland and Meghalaya. The technology can accept bamboo material in any form. Hence to facilitate logistics it is currently foreseen that bamboo would be preprocessed into cut strips of bamboo at the village level and then transported to the bio-refinery by truck or rail, or if possible through river channels. The monthly feedstock requirement for processing into ethanol at the bio-refinery location is about 30,000 thousand BDT. The remaining bamboo could be stored at various stockyards located near to roadways and railheads.
The proposed bio-refinery will be set up as a Joint Venture company with equity participation of NRL, Chempolis, Fortun and Finnfund with at an estimated cost of Rs. 950 crores (around 150 M USD). The term sheet for the JV has been signed in September 2017 and preparations for a final agreement are underway, with the JV to be formally incorporated during first quarter of 2018.
NRL has already signed MoUs with Nagaland Bamboo Development Agency (NBDA) and Arunachal Pradesh Bamboo Resources Development Agency (APBRDA) for the sourcing of bamboo for the bio-refinery. The MoUs between the respective parties specify the required quantities, pricing and other terms and conditions related to the supply of bamboo feedstock. Under this project it is expected that about 50% of the bamboo for the bio refinery will be sourced from the states of Nagaland and Arunachal Pradesh. Page | 8
The feasibility study prepared by Price Waterhouse Coopers (PWC) for NRL indicates that there is significant potential to promote bamboo-based industries in the NER through skill creation, technology upgrading and facilitating strategic alliances with technical institutions and value chain partners. The proposed way for achieving this is by applying a cluster approach and organizing beneficiaries into professional networks to enhance industrial efficiency, marketing and trade. Forests in the area are rich in bamboo suitable for quality feedstock for biofuels, and there is a huge potential for promoting community-based enterprises at the village level and common bamboo processing at the cluster level.
4. Problem Description
Poverty is still widespread in NER and job and income opportunities are limited, due to multiple reasons, including the remote geographic and landlocked location and topography with limited transport infrastructure as well as complex and part tribal socio-economic structure and weak governance. Many people in the region are therefore dependent on unsustainable natural resource based livelihoods.
Despite praiseworthy success in some localities, the region as a whole has not yet been able to benefit from its abundance of bamboo. This results from interplay of several constraints: Lacking of market driven approach: past initiatives have in the main focused on supply of bamboo and bamboo-based products, yet scaling up has not materialized due to insufficient emphasis on development of markets and hence a mobilization of market-pull for bamboo based industries (which in turn has dampened investments in sustainable bamboo resource management and harvesting). Deficiencies in skills and entrepreneurship: unlocking bamboo’s potential is dependent on enterprise creation, either private, government or community/village based, with suitable business models that share revenue between growers/collectors, initial processors and product manufacturers. There is a need for upskilling across the value chain to ensure sustainable harvest and (agro)forestry, improve quality and productivity, adapt new product designs and techniques, and the professional running of enterprises. Uncertainty on bamboo resources and access: treating all bamboo as forest product, regardless of its source, has posed unnecessary restrictions on accessing bamboo resources on non-forest lands and development of bamboo agroforestry (either plantations or intercropping). The landmark November 2017 announcement to exempt bamboo sourced from non-forest areas is expected to facilitate access to bamboo, even though some uncertainty still remains on the exact procedures and systems to proof origin of bamboo throughout value chain. Unfavourable logistics, resulting in high transport costs and transportation losses: areas abundant in bamboo are most often remote from roads, resulting in high initial collection efforts and costs, whereas bamboo also has low density (particularly as poles) resulting in low payloads per collection van. Moreover, local markets are limited and products would require long distance transport to reach market or export port.
The establishment of a bioethanol plant at NRL creates a unique opportunity to kick-start inclusive and diverse bamboo value chains in NER, which this partnership project aims to capitalize upon. The bioethanol plant serves as a large volume anchor buyer for bamboo feed stock. As it can accept any bamboo material, regardless of physical shape, size and structure, there is a possibility for sequential and comprehensive utilization of bamboo poles, allowing higher value products from poles and utilization of remaining bamboo materials as feedstock for the bio-refinery. The announced easing of government policy is expected to further facilitate emergence of diversified and scaled-up bamboo industry. Yet, the desired multiplier effect of the bio-refinery in terms of sustainable job and income opportunities for people in the NER can only materialize with dedicated support to communities in key bamboo growing districts in the NER, in terms of (cluster) enterprise development, identification and Page | 9
establishment of markets, improving designs and skills and sustainable bamboo resources management.
The project will NOT deal with the bioethanol plant to convert bamboo materials efficiently into ethanol and other valuable chemicals. The project is thus de facto based on the assumption that NRL jointly with Chempolis Oy as its technology partner will succeed in establishing and operating the bioethanol plant. The profitable future operation of the biorefinery though remains, amongst others, dependent on cost effective and reliable supply of bamboo feed stock in mid and long run. Given the unprecedented scale and nature of bamboo use for the future biorefinery, NRL and its Joint Venture partners do take a supply chain risk, which this project will contribute to mitigating, by forging long term supply partnerships with bamboo rich communities and enabling them to set up community-based bamboo businesses (‘clusters’).
5. Project Beneficiaries
The main beneficiaries of the project are the most underprivileged groups, including women, who form part of communities that will be organized into clusters (3) in the states of Assam, Arunachal Pradesh, Nagaland and Meghalaya. Activities within clusters will be arranged to maximize economic opportunity for women, youth and possibly disadvantaged groups; every step in the bamboo value chain should be economically rewarding so that employment opportunities are generated among community members. The clusters will serve as models that can be replicated at a later stage throughout the NER thereby contributing to poverty alleviation, job creation and enterprises creation. The main beneficiaries involve women and men from the following target groups, as also illustrated in figure 2:
1. Members of communities with access to bamboo forests and plantations will benefit from training on clump management and sustainable harvesting of bamboo for improved yield and thereby, additional income generation. 2. Selected individuals within the clusters who have outstanding abilities will undergo a “training-for-trainers” program and will support cluster development, including capacity building and on the job training of cluster producer groups under the project. 3. Pre-selected groups of individuals in remote villages will receive training in entrepreneurship, networking, marketing, and other technical matters, according to their respective needs. 4. Workers involved in pre-processing bamboo would benefit from technical training and the use of appropriate tools, equipment and machinery, which will ease their workload, improve productivity and quality and enhance earnings. 5. Artisans in village-based enterprises will receive basic tools and training on the production of product designs with market potential. 6. Employees of NRL, GoI staff in the Forest Department, NBDA and APBRDA and other agencies who are directly involved in the project. They will benefit from project activities related to the feedstock management, cluster logistics operations and from project workshops.
3 The term ‘cluster’ is used here as a shorthand for the envisioned community based-economic model to be promoted through the present partnership project. Each cluster will within a given bamboo sourcing locality bring together individuals involved in the farming/growing, collection and processing of bamboo into bamboo products and feedstock material for the bio-refinery. The legal structure and business model, as well as the specific bamboo products will be determined during project execution, with the aim to ensure fair income and employment opportunities for all involved in the new to establish bamboo value chains. The UNIDO approach and experiences in cluster development have been summarized in UNIDO (2013), The UNIDO Approach to Cluster Development: key principles and project experiences for inclusive growth, which can be accessed through following web-link: https://www.unido.org/sites/default/files/2014-01/UNIDOs_CLUSTER_APPROACH_0.PDF Page | 10
Figure 2: Value propositions for different target groups
Ultimately, NRL will itself benefit from the project through the development of a region wide network of clusters that realizes the timely and predictable delivery of the feedstock requirements for the operations of its bio-refinery in a cost-effective manner.
B. Government policy and strategy
The present project contributes to the realization of aims and objectives of several government initiatives, including amongst others:
Biofuels Policy and contribution to Paris Accord on Climate Change: GoI is pursuing rapid change over to all forms of renewable energy as part of its Nationally Determined Contributions to the Paris Accord on climate change. The GoI launched its National Policy on Biofuels in 2009 to meet the increasing energy needs of the country and to provide energy security. The goals of the policy are development and utilization of indigenous non-food feed stocks raised on degraded or wastelands, thrust on research and development on cultivation, processing and production of biofuels and a blending mandate of 20% Ethanol and Bio-diesel from 2017. The objective of the biofuel programme is to support R&D, pilot plant/demonstration projects leading to commercial development of 2nd Generation biofuels. The ministry supports R&D projects for development of technologies for production of biofuels through Biogas (bio- methanation), pyrolysis and gasification, besides promoting deployment of technologies for pilot and full-scale projects on biofuels in general. The project will provide support to national counterparts in promoting sustainable high-yield biofuel production, through sharing lessons learned by the project and engaging in policy dialogue with counterparts in government, industry and civil society, at regional and national levels. National Bamboo Mission (NBM) (revived from the earlier National Agroforestry and Bamboo Mission): fully funded by the Central Government, NBM seeks to provide a coordinated approach to development of bamboo and related agroforestry industries so as to provide fair and adequate returns to growers and processes. NBM invests in R&D into species and technologies with improved productivity and promotes expansion of agroforestry acreage. NBM puts in place a tiered coordination structure between Central and State Governments, provides capacity building and training, facilitates formation of self-help and local producer groups, and indeed stream-line the value chain and reduce the inequalities and uncertainties it currently experiences as a result of the dominance of middlemen. Development Commissioner (Handicrafts) (Ministry of Textiles): The Office of DC (Handicrafts) is the nodal agency in the Government of India for craft and artisan-based activities. It assists in the development, marketing and export of handicrafts, and the promotion of craft forms and skills. The assistance is in the form of technical and Page | 11
financial support, including in the form of schematic interventions implemented through its field offices. The agency has 62 field offices around the country, including those in the NER states of Assam, Nagaland, Meghalaya, Arunachal Pradesh, Manipur, Sikkim and Mizoram. Khadi and Village Industries Commission (KVIC) is statutory body of the Government of India reporting through the Ministry of MSME that is charged with the planning, promotion, organization and implementation of programs for the development of Khadi and other village industries in the rural areas. The KVIC has a separate directorate for the bamboo sector. It has been involved in the expansion and modernization of traditional village industries and has been entrusted with the task of providing financial assistance to institutions and individuals for the development and operation of village industries in the NER. The KVIC encourages and promotes research in the production techniques and equipment used in village industries and provides facilities for the study of the problems and dissemination of salient results with a view to increasing productivity and enhancing their competitive capacity. Further, the KVIC provides guidance and support through the supply of designs, prototypes and other technical information. In implementing KVI activities, the KVIC takes steps as to ensure the genuineness of the products and to set standards of quality and ensure that the products of Khadi and village industries do conform to the standards.
II. REASONS FOR UNIDO ASSISTANCE
United Nations Industrial Development Organization (UNIDO) is the specialized organization in the United Nations System that supports it developing country member states in facilitating industrial development for poverty reduction, inclusive globalization and environmental sustainability. The organization facilitates industry contributions to the 2030 Sustainable Development Agenda, in particular towards Sustainable Development Goal (SDG) 9: built resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation. UNIDO therefore supports its developing country member states to transition to inclusive and sustainable industrial development, by enhancing economic competitiveness, ensuring environmental sustainability and creating shared prosperity.
UNIDO has been delivering technical assistance projects in India since its establishment in 1966, during which period the focus transitioned to keep pace with the changing industrial development landscape in India as well as abroad. A recurring element in UNIDO assistance is the cluster model, to bring producers within selected geographies together for individual and collective benefit through the adoption of lean manufacturing processes, quality management, and product development and marketing. Specifically to the bamboo sector, UNIDO implemented during 1999-2004 a technical cooperation project that amongst others resulted in the establishment of the Bamboo and Cane Technology Centre, in Guwahati (Assam), which until date continues to serve as a reference and training centre for the development of the bamboo handicrafts and products sector, through training, product development support and technology demonstration. In a further project, during 2009-2013, UNIDO provided cluster development and networking support, targeting five clusters in the NE states of Assam, Meghalaya, Mizoram, Nagaland and Tripura, focused on skills development, product development and diversification and technology upgradation. Internationally, UNIDO has been supporting bamboo and handicrafts projects in many localities, including in the recent past for example in Sri Lanka and Vietnam.
In India, UNIDO contributes to the priorities of the United Nations as a whole, as agreed between the United Nations Country Team and the Government of India, through NITI Aayog (National Institute for Transformation of India). 2018 sees the start of implementation of the 2018-2022 United Nations Sustainable Development Framework (UNSDF) as a
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replacement for the earlier United Nations Development Assistance Framework (UNDAF). UNSDF 2018-2022 includes eight results areas, respectively: 1. Poverty and urbanization; 2. Good health, water and sanitation; 3. Inclusive, quality education and employability; 4. Nutrition and food security; 5. Natural resources management, community resilience and energy efficiency; 6. Skilling, entrepreneurship and job creation; 7. Gender equality and youth development; and 8. India and the United Nations.
UNIDO continued during the 2017 implementation of its Country Programme of Cooperation between the Republic of India and UNIDO, 2013-2017. The Programme was aimed at raising the competitiveness of industrial enterprises through technology-oriented initiatives to increase productivity, quality, energy efficiency, occupational health and safety and environmental sustainability of industrial enterprises. The programme had two main pillars, respectively: green industrial development and inclusive economic development. This was complemented with selected initiatives on South-South industrial development in developing countries outside India. Under the Country Programme 2013-2017 UNIDO was able to operationalize and implement 24 main projects (several thereof with multiple components), with a total budget of USD87 million.
A total of 16 projects is under ongoing implementation in India at the start of 2018. This includes 9 projects under the pillar of green industrial development, each of these funded by the Global Environment Facility, and implemented in cooperation with several line ministries, including Ministry of Micro Small and Medium Enterprises (MoMSME), Ministry of New and Renewable Energy (MNRE) and Ministry of Environment, Forests and Climate Change (MoEFCC). These projects are aimed at environmentally sound management of chemicals and wastes; industrial energy efficiency; application of renewable energy for productive uses; and clean technology incubation. Under the economic development pillar, 7 projects are continuing, including projects under the International Centre for Inclusive and Sustainable Industrial Development (IC-ISID), focused on amongst others the leather, paper, cement and bicycle sectors and the cluster development partnership with the Automotive Components Manufacturing Association (ACMA).
UNIDO and Department of Industry Policy and Promotion (DIPP) of the Ministry of Commerce and Industry (MoC&I) are working on the finalization of the UNIDO Country Programming Framework 2018-2022, which is expected to be officially agreed upon during first quarter of 2018. The overall framework has been validated during stakeholders’ consultations in November 2017. It is foreseen to continue and expand the ongoing work in regards to competitive and resilient MSMEs and climate, environment and resource solutions, complemented with new results areas in regard to inclusive value chains and responsible business and strategy for industrial transformation. In addition to expanding upon the current project portfolio, it is foreseen to launch selected flagship initiatives aimed at transformative change towards inclusive and sustainable industrial development. It is expected this will include a flagship on industrial development for improving north-eastern livelihoods.
In recognition of the alignment of the NRL Bio-refinery project and the mandate of UNIDO, UNIDO and NRL entered on 13th September 2017 into a Memorandum of Understanding (included as annex 2 to this project document). The MoU identified as possible areas of cooperation between UNIDO and NRL (and possibly its Joint Venture partners in the bio- refinery):
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1. Sustainable and efficient bamboo feedstock harvesting, collection and distribution value chain including regeneration of quality bamboo stock: 2. Developing capacities of the value chain actors as well as government institutions to effectively participate in the development of the bamboo sector; 3. Demonstration of viable technologies for primary processing of bamboo at cluster level; 4. Expanding access of youth to job-oriented and demand-driven skills focusing on industrial skills development within the bamboo value chain; 5. Establishing bamboo processing centres at suitable locations from where bamboo will be sourced; 6. Souring bamboo directly from the farmers through village level entrepreneurs and community based organizations; and 7. Helping to establish specific purpose vehicle for the purpose of supplying bamboo to the bio-refinery. The present UNIDO NRL partnership project is a practical means for achieving the objectives of this MoU. It contributes to the outcomes and results areas of UNIDO as identified in its 2018-2021 Medium Term Programmatic Framework (in particular towards shared prosperity) as well as in its draft India Country Programming Framework (in particular towards inclusive value chains and responsible business conduct).
III. THE PROJECT
A. Objective of the Project
This partnership project is designed to maximize the development benefits of the bamboo bio- refinery in terms of: sustainability of bamboo resources; creation of employment and incomes for communities; and techno-economic and environmental performance of the bio-refinery itself. Each of these hinges on development of community or village-based harvesting, collection and processing units (‘clusters’) that produce bamboo products and feedstock for fuel (bioethanol) production in the bio-refinery.
The development objective of the partnership project is therefore to start contributing to improving livelihoods for impoverished communities in North East Region (NER) by creating diverse and demand-driven sustainable bamboo supply chains that provide opportunities for employment and income generation in selected communities in Assam, Arunachal Pradesh, Meghalaya and Nagaland.
This development objective is relevant to the 2030 Agenda for Sustainable Development, in particular through tangible contributions to specific Sustainable Development Goals, respectively: SDG1 (ending poverty); SDG9 (industry, innovation and infrastructure); SDG13 (climate action); SDG7 (clean and affordable energy) and SDG17 (partnerships for sustainable development).
B. The UNIDO Approach
The bio-refinery will produce bioethanol starting with chipping and pulping of the bamboo into a feedstock slurry for fractionation. The bio-refinery therefore only requires that bamboo material is supplied in a predictable and cost-efficient manner at appropriate large scale (to meet the required 300,000 MT bonedry material per annum). The bio-refinery is thus in principle flexible with regard to the physical form in which bamboo is supplied as feedstock, as e.g. poles, flattened or split bamboo or even chipped, or combinations thereof. This makes the bio-refinery ideal for sequential and comprehensive utilization of bamboo resources, in a manner that first high value bamboo products are made and the remaining biomass supplied as feedstock for the bio-refinery. Higher value-added bamboo products are for example food Page | 14
(bamboo shoots), bamboo handicrafts and homewares, flooring, boards and furniture, incense sticks, and paper and other fibre products (including textiles), as shown schematically in a generic bamboo value chain in figure 3. By and large these higher value products are labour intensive (hence most valuable with regard to income and employment creation at local level), use proven and often relatively simple techniques, have established markets (in India and elsewhere) and are wasteful (resulting in high % of biomass left unutilized and potentially available as feedstock material for the bio-refinery).
Farmers / Associations / Community Groups
Planting Plantation Management Harvesting Initial pre-processing with low investment technology
Village collection points Shoots, Construction Mat. Wholesale / Transport
Baskets, household goods
Rural LevelLevel Rural Rural
Rural & Urban Entrepreneurs (SME) / Associations
Further Processing (Semi finished & finished products)
Food Pre-Products, Shoots Construction Material, Household goods Woven Mats, Furniture Laminated Boards
Wholesale / Transport
Industrial Companies / Associations
Further Processing (Finished products) Urban Level Urban Urban Level Urban Furniture Floor board Mat board Food Products, Shoots
Wholesale / Transport
Trading & Marketing Companies / Organizations / Chamber of Commerce
Retail
Domestic Market Export Market
Figure 3: Schematic presentation of generic bamboo value chain
Several product classes can be made from bamboo and a combination of products will be chosen based on the best possible use of the bamboo resource and potential to generate sustainable returns to the stakeholders. As an initial consideration, the following table 2 shows key product options along with a preliminary appraisal of their economic and environmental impacts. This will need further refinement as part of the project, whereas in Page | 15
addition the potential volume of bamboo use and possibly byproduct generation as bamboo feedstock would then need to be ascertained.
Economic Opportunity Environmental Impact Product/Sector Description Employment Regular Value Pollution Use of Ran- Income Addition Genera- Resources king tion (energy, water, chemicals Bamboo culms Unprocessed (building sector) culms for scaffolding Moderate (3) Low (1) Low (1) Low (5) Low (5) 15 and traditional construction. Handicrafts, basketry, Manual woven mats processing Moderate 23 High (5) High (5) Low (5) Low (5) (Cottage industries, using simple (3) artisans) tools Edible Bamboo Shoots Food crop (Agriculture, forestry) sold fresh, Moderate 23 High (5) High (5) Low (5) Low (5) tinned or (3) bottled Industrial Products Premium Semi-mechanized and processing Moderate Moderate mechanized processing (e.g. flooring, Moderate (3) High (5) High (5) 19 (3) (3) of large volumes of laminated bamboo culms. The furniture) industrial processing Medium value sub-sector offers many processing opportunities for major (e.g. mat Moderate growth and pro-poor boards, Moderate (3) High (5) Low (5) Low (5) 21 (3) impacts on rural farming window communities. Industrial blinds, processing can be further incense sticks) divided according to the Low value value of the processing and bulk Moderate Moderate and the grade of material processing Moderate (3) High (5) High (1) 15 (3) (3) used. (e.g. charcoal, paper & pulp)
Table 2: Initial appraisal of bamboo product categories
This notion of sequential and comprehensive utilization of bamboo has informed the UNIDO approach. UNIDO and NRL jointly will work to establish, diversify and expand bamboo value chains for bamboo products and fuel feedstock in some 25 bamboo-resource rich communities. This involves both project level activities that support and facilitate demand- driven bamboo products markets as well as community level activities that actually establish community-based processing and production units (‘clusters’) running as enterprises that generate incomes and employment whilst sustainably managing the available bamboo resources.
At the community level, the UNIDO approach is based on forming clusters that bring together bamboo growers, harvesters, processors, handicraftsmen and women and bamboo product manufacturers into a village- or community-based enterprise or producer group that collectively produces marketable bamboo products and supplies feedstock bamboo material to the bio-refinery. This involves a step-wise approach for each of the selected communities in proximity to the bio-refinery that are endowed with abundant bamboo resources (4):
4 This approach follows the main lessons learned by UNIDO and its partners in cluster development internationally, as amongst others documented in UNIDO (2013), The UNIDO Approach to Cluster Development: key principles and project experiences for Page | 16
1. Baseline Assessment (cluster diagnostic): this is aimed to inform the development and business planning for the cluster, and covers both sustainability of bamboo feedstock as well as human resources. The present and possible future (through agroforestry in plantation or integrated cropping) bamboo stock and sustainable harvest and necessary resources (seedlings, labour, equipment, transportation, etc.) and infrastructures (including access paths/roads) will be determined as well as requirements for sustainable management of land and bamboo stocks. Moreover, the assessment will cover available human resources, traditions and skills, viz-a-viz bamboo management, bamboo processing and production, including crafting as well as business and entrepreneurship skills. ;
2. Cluster Development Plan: a specific plan for the development and operation of each cluster that defines:
a. target products and markets, adopting the proven One Village One Product (OVOP) model, and supply of feedstock material for bio-refinery;
b. necessary investments in establishment and ongoing sustainable management of bamboo stocks;
c. structure and organization of the cluster including its business model and compensation structures to cluster members;
d. necessary investments for acquiring equipment and facilities; and
e. training and capacity building needs;
The cluster development plan will also identify measures and investments needed to extract and remove bamboo from forest and non-forest areas, including means of access (paths, roads) for efficient supply of bamboo poles to the pre-processing cluster (and onward supply of bamboo feedstock material to NRL);
3. Cluster Establishment: implementation of the agreed cluster plan, through:
a. provision of training and ongoing capacity building in all aspects of growing, harvesting and pre-processing and bamboo products manufacturing;
b. formalization of the cluster’s organization structure, legal entity and financial and business processes and systems;
c. provision of identified equipment and tools and establishment of infrastructure for transport and storage; and
d. facilitation of market linkages; and
4. Cluster Mentoring: ongoing handholding support to facilitate and support development, formalization and growth of the cluster in a sustainable and inclusive manner, including review of ongoing implementation of the cluster plan and documentation and promotion of results achieved at cluster level.
inclusive growth, which can be accessed through following web-link: https://www.unido.org/sites/default/files/2014- 01/UNIDOs_CLUSTER_APPROACH_0.PDF Page | 17
The project level activities are aimed to support the successful establishment of clusters in each of the targeted bamboo rich communities and facilitate sustainability and scaling up of resulting bamboo supply chains. These project level activities comprise:
1 Site selection: the selection of states and bamboo-rich localities therein as targets for creation of clusters. A two-stage selection is foreseen, firstly at state level and secondly at community level. The selection of states will confirm interest and feasibility to implement the cluster based model in each of the target states provisionally selected during project design, respectively: Assam, Arunachal Pradesh, Meghalaya and Nagaland. This will consider such factors as: distance from NRL bio-refinery; road, rail and/or water connectively to NRL refinery; bamboo stocks and their accessibility; institutional framework; and socio-political interest. The state selection will also provide an initial longlist of potential villages/communities for cluster development, for which a baseline assessment will then be conducted (as outlined under the cluster-level activities above). Table 3 below contains an initial longlist, based on discussions with state government representatives during project formulation, which though will be reconfirmed and refined during project execution. The baseline assessment of each potential location will then confirm suitability of respective location for actual cluster development, based on multiple criteria, including: sustainable bamboo harvest potential and accessibility; available human resources and skill levels in regard to each aspect of bamboo value chain development and management; necessary investments in training, equipment and facilities; and community endorsement.
State District Village/Location Arunachal Pradesh: Papum Papre Yupia Papum Papre Poma Village Papum Papre Kimin Lower Subansiri Dollung Mukh West Kameng Bhalukpong West Saiang Likabali East Saing Niglok, (Pasighat) Namsai Namsai, Dibang Valley Rowing Nagaland: Peren Jalukie Dimapur Niuland Wokha Bhandari Mon Tizit Mockakchung Tuli Meghalaya: Ri Bhoi 2 locations to be identified East Garo Hills 1 location to be identified West Garo Hills 1 location to be identified Jaintia Hills 1 location to be identified Assam Golaghat Locations to be identified Karbi Along Locations to be identified Dima Haso Locations to be identified Nagaoan Locations to be identified Lahimpur /Dhemaji Locations to be identified Table 3: Provisional long list of potential locations and villages to consider for cluster development
2 Knowledge base: the development and promotion of individual clusters will benefit from a central knowledge base. Key areas to cover by means of background study, expert and community consultations are: a. Efficient logistics: determination of suitable large volume supply option for bamboo feedstock to bio-refinery and export logistics for bamboo products to consumer markets outside NER, including rest of India as well as international; b. Cluster based business models: determination of possible organizational and governance models for running of clusters in enterprise-fashion, including necessary legal structure, business processes and cluster remuneration models;
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c. Bamboo product markets: information on domestic and international markets for bamboo based products and trends therein, along with quality and volume requirements, pricing etc.; and d. Appropriate techniques: available tools, techniques and machinery for harvesting, transport and processing of bamboo, along with costs, productivity and quality, and human resource requirements (including skills for operation and maintenance).
Already during project execution, the emerging knowledge base will be actively promoted for establishing and supporting further bamboo-based clusters and value chains, in particular, but not limited to the North Eastern region. Towards project completion, lessons learned will be documented and made available to policy makers, states and industry and community stakeholders for their consideration in development, operationalization and implementation of bamboo and biofuel related policies, strategies and support schemes.
3. Product Support Facility: the knowledge base developed will be operationalized for the clusters by means of a product support facility, with the dual function of assisting individual clusters with product design and setting up of production base, and facilitating market access, through such means as marketing, participation in relevant fairs and facilitation of business to business meetings between clusters and potential buyers. The product support facility will for the duration of the partnership project be ran by the project and initially focus on the target clusters that also provide feedstock bamboo to the bio-refinery. It is though foreseen that as the project progresses, the product support facility could start to serve bamboo development in NER region at large and would be transferred to suitable entity upon project completion for scaling up and sustaining project impact.
Project management, monitoring and evaluation: day to day planning and management of the project activities and monitoring and evaluation of project achievements under outputs and activities section. This will include an independent terminal evaluation along with summation and dissemination of policy relevant findings and recommendations to key government, industry and community stakeholders.
C. RBM Code and Thematic Area Code
The project will contribute to UNIDO’s Result Based Management (RBM) as per the Medium Term Programme Framework 2018-2021, specifically to C.1.1.1, creating shared prosperity, and C.1.1.3, safeguarding the environment, with specific focus on clean energy access.
D. Expected Outcomes
The partnership project sets out to achieve lasting supply and development partnerships between NRL and bamboo-rich communities in the vicinity of the NRL refinery and bio- refinery. UNIDO will provide technical support and guidance for this development effort to then result in community-based bamboo collection and processing units that operate in a business-like fashion, i.e. clusters.
The intervention logic with outcomes, outputs, indicators and conditions is provided in Annex I (logical framework), and is summarized here. The partnership project has two expected outcomes, respectively:
Outcome 1: Enabling Framework (for competitive, inclusive and sustainable bamboo value chain): improved provision of knowledge, technical, management, marketing and financing Page | 19
support for market-driven and inclusive expansion and diversification of supply chain for bamboo products and bamboo-derived fuels. This outcome will enable the establishment, diversification and operation of bamboo clusters, particularly those expected to supply bamboo feedstock to the bio-refinery as well as bamboo clusters at large. The support covers knowledge, in particular on sustainable bamboo stocks and harvest and necessary management. It covers support that covers product designs and appropriate technology, market knowledge and linkages, cluster organization and business models and accessing financing, each with a view to facilitate emergence of diverse supply chains (having multiple bamboo-derived products to increase resilience) that rewards growers, collectors and processors in the community with decent employment and fair income.
Outcome 2: Bamboo Clusters (establishing long term bamboo supply partnerships): community-based enterprises established that sustainably manage and harvest bamboo, produce and market bamboo products and supply bamboo feedstock to the bio-refinery. This outcome concerns the actual establishment of bamboo clusters in the near vicinity of the bio- refinery and getting these operational in managing bamboo resources, producing and marketing bamboo products and supplying bamboo feedstock, in business-like manner with participation of community members, particularly women and youth. It is aimed to establish some 25 bamboo clusters, spread over the states of Assam, Arunachal Pradesh, Meghalaya and Nagaland, with initial target to collectively supply in range of 30 to 50% of the bamboo requirement for the biorefinery.
E. Outputs and Activities
In concurrence with the outcomes set above, the project has the following outputs, to be achieved through the key activities introduced under UNIDO approach (in section III.B).
Outputs contributing to Outcome 1: Enabling Framework for Competitive, Inclusive and Sustainable Bamboo Value Chain Output 1.1 Knowledge Base: technical, management, marketing and resource information for sustainable market-driven community-based bamboo industry readily available to interested stakeholders in particular in NER; Output 1.2: Product and Technology Facility: common support facility available to new and existing bamboo clusters to establish, expand and diversify; and Output 1.3 Advocacy and Policy (Support) Dialogue: increased recognition of potential of bamboo sector for livelihood creation and production of renewable products and fuels
The main activities involved are (see also section III.B for additional justification):
1. Site selection: two-stage selection of firstly states and secondly bamboo-rich localities therein as targets for creation of clusters, through government, community and stakeholders outreach and consultation and conducting of baseline assessments for potential sites, covering: sustainable bamboo harvest potential and accessibility; available human resources and skill levels in regard to each aspect of bamboo value chain development and management; necessary investments in training, equipment and facilities; and community endorsement;
2. Knowledge base: background studies and operationalisation of the findings thereof in operational guidance for bamboo cluster development, in regard to: efficient logistics; cluster-based business models; bamboo products and their markets; and appropriate techniques and designs; and
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3. Product Support Facility: creating and delivering a service portfolio to customize and operationalize the bamboo knowledge to the development needs and opportunities in each of the individual clusters.
Outputs contributing to Outcome 2: Bamboo Clusters Establishing Competitive and Long Term Supply Partnerships Output 2.1 Cluster Establishment and Operation: community-based enterprise-like units have been set up and are sustainably harvesting and processing bamboo to supply bamboo feed stock to bio-refinery and quality and demand-driven bamboo products to markets
The main activities follow established UNIDO cluster development approaches that will be customized and further refined with the first batch of clusters during the inception period. These include: (see also section III.B for additional justification):
1. Baseline Assessment/Diagnostic: this is aimed to inform the development and business plan of the cluster, and covers both sustainability of bamboo feedstock as well as human resources. The diagnostic will be undertaken in consultative manner with community representatives and related stakeholders. The detailed information needs for each cluster will be refined and confirmed in the pilot phase, yet would include the present and possible future (through agroforestry in plantation or integrated cropping) bamboo stock and sustainable harvest and necessary resources (seedlings, labour, equipment, transportation, etc.) as well as requirements for sustainable management of land and bamboo stocks. Moreover, the assessment will cover available human resources, traditions and skills, viz-a-viz bamboo management, bamboo processing and production, including crafting as well as business and entrepreneurship skills;
2. Cluster Development Plan: a specific plan for the development and operation of each cluster that defines:
a. target products and markets (adopting the proven One Village One Product (OVOP) model) and supply of feedstock material for bio-refinery; b. necessary investments in establishment and ongoing sustainable management of bamboo stocks; c. structure and organization of the cluster including its business model and compensation structures to cluster members; d. necessary investments for acquiring equipment and facilities; and e. training and capacity building needs;
3. Cluster Establishment: implementation of the agreed cluster development plan by and in the community, through: a. provision of training and ongoing capacity building in all aspects of growing, harvesting and pre-processing and bamboo products manufacturing; b. formalization of the cluster’s organization structure, legal entity and financial and business processes and systems; c. provision of identified infrastructures, equipment and tools; and d. facilitation of market linkages; and
4. Cluster Mentoring: ongoing handholding support to facilitate and support development, formalization and growth of the cluster in a sustainable and inclusive manner, including review of ongoing implementation of the cluster plan and documentation and promotion of results achieved at cluster level.
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Output 3.1 concerns project management, monitoring and evaluation, to ensure efficient management and implementation of project activities with due participation of beneficiaries and other stakeholders, including monitoring and impact evaluation. This will involve: Establishment and operation of project team and management unit: the project team will comprise of NRL appointed (project) staff and UNIDO appointed project staff, with NRL taking the overall lead in particular in engaging with beneficiary states and potential beneficiary communities and agreeing and supporting implementation of the cluster development plans, and UNIDO acting in the main as overall facilitator and technical advisor on all aspects of bamboo value chain development, including products (and designs), appropriate techniques and markets. The project team would have its base (office location) at NRL. Establishment of stakeholders cum advisory committee: the committee is foreseen to act as sounding board for project management on strategies and practices for inclusive bamboo chain value chain development. The committee would comprise representatives of State Governments of Assam, Arunachal Pradesh, Meghalaya and Nagaland, of relevant Central Government (possibly Ministry of Development of North East Region and Department of Industry Policy and Promotion) and selected bamboo knowledge initiatives (including for example Cane and Bamboo Processing Centre, International Network for Bamboo and Rattan, Centre for India Bamboo Resource and Technology, Rhizome, etc.)). The full membership will be determined during inception phase. The committee would be expected to meet at least annually. Monitoring and evaluation: establishment of set of Key Performance Indicators (during inception phase) and collection of requisite data for KPIs over project implementation, by the project team. Moreover, an independent evaluation is foreseen at project conclusion, which will include an impact analysis for the established clusters (based on comparison of data collected during baseline assessment/cluster diagnostic and socio-economic status of community upon project completion). The extraction of policy relevant achievements, lessons learned and recommendations will also be undertaken, as well as their promotion through dialogue with and advocacy towards national and state governments, industry and community.
F. Timeline of Activities
The project activities are split in two phases. Phase 1 concerns inception and pilot and will be concluded in no more than 12 months. It will involve operationalization of project management and steering functions, start of development of knowledge base (particularly in regard to efficient logistics and cluster business models) and launch of actual cluster development in up to four localities (first batch of clusters), provisionally one each in the four beneficiary states (Assam, Arunachal Pradesh, Meghalaya and Nagaland). Phase II will be the main project implementation phase and is scheduled to be completed in no more than 3 years. It will expand and further consolidate the knowledge base and advocacy and establish and operate the product support facility. Most importantly it will scale up the clusters, by adding a second batch of some 9 clusters at the start of implementation phase and a third batch of some 12 clusters one year into the implementation phase.
Phase I will be undertaken with and on behalf of NRL, whereas it is foreseen that during phase I in parallel the bio-refinery joint venture will become legalized, allowing phase II to be undertaken with and on behalf of the bio-refinery joint venture. Whilst phase I and II are essentially sequential, phase II could start prior to completion of phase I, once project partners have gained sufficient insight and confidence that the key features of the proposed cluster based bamboo supply chain model will work.
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The table overleaf provides an indicative and macro level work planning, which will serve as input for detailed planning during inception phase and thereafter biannually updated to ensure the project can learn and benefit from its own lessons from establishing the first and subsequent batches of bamboo clusters.
Indicative master-planning for partnership project Main activities Phase I (inception and Phase II (project implementation) (max 3 year) pilot) (max 1 year) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Outcome 1: Enabling Framework for Competitive, Inclusive and Sustainable Bamboo Value Chains 1.1 Site selection State Selection Cluster Batch Batch 2 Batch 3 Selection 1 1.2 Knowledge base Part 1 (logistics, business model) Part 2 (complete) 1.3 Product and Technology Support Facility Establish- ment Support batch 1 Support batch 2 Support batch 3 Outcome 2: Establishment of bamboo clusters for long term bamboo supply partnerships 2.1 Baseline assessment/cluster diagnostic Batch 1 Batch 2 Batch 3 2.2 Cluster development plans Batch 1 Batch 2 Batch 3 2.3 Cluster establishment, including training, equipment provision etc. Batch 1 Batch 2 Batch 3 2.4 Cluster mentoring Batch 1 Batch 2 Batch 3 Project Management, Monitoring and Evaluation Project team and office Stakeholders Committee KPI establishment Management and monitoring report Independent evaluation
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G. Risks and Mitigation Measures
Following risks were identified during project formulation and summarized here with main mitigation measures. These will from time to time be reviewed and further updated on the basis of the actual findings and experiences during inception, pilot and main implementation phase. Production risks and resource access: Although bamboo grows in most of the districts, due to the steep hills and absence of link roads its harvesting and transportation are currently unviable and hence require special consideration and support during the project (e.g. optimization of harvesting methods, maximization of poles and biomass collection, suitable off-road pole collection system, access roads). Moreover in most cases, farmers have community allocated land and utilize it partially for growing horticulture products and are reluctant to use their remaining land for growing bamboo, as they perceive it to be of too little economic value. This is largely due to the fact that the community members are unsure of the income bamboo will fetch and are therefore unwilling to invest their time, labour and possibly other resources (e.g. fertilizers, tools) in cultivating bamboo. As a result, the existing bamboo industries face the challenge of sourcing specific types of bamboo from villages to meet their production requirements. The project will address this by educating the community members about the income generation options that bamboo can provide including working for the industry in pre- processing and treatment of bamboo. Awareness creation, training and tools/equipment required for growing, harvesting and pre-processing of bamboo will be provided to the select villages. The scaled up and pre-processed bamboo will generate more income to the bamboo farmers than the sale of raw bamboo as cut poles. The community members will also be trained on plantation and sustainable harvesting of bamboo, with possible increases in yield and density. This will potentially improve the availability and steady supply of bamboo, and provide income directly to the hands of community members. Organizational risks: The bamboo processing and bamboo handicraft and product clusters are foreseen as village or community-based enterprises (or producer groups) and these would require time and handholding support to attain maturity and organizational capacity to run their business effectively. In addition to training on design, production, packaging and marketing, training to operate and manage the cluster in enterprise-like manner is essential for sustainable operations in the long term. In case of bamboo cluster, to meet the bulk supply commitment, the members will have to divide the work as per function (e.g. preparation of bamboo, slivering, crafting, finishing, packing) to increase the productivity and share the labour instead of working in the traditional way where each person is responsible for production of one item (which usually takes anywhere between one to three days depending upon the product). Further, the bamboo handicraft and products supply chain would require entrepreneurs to connect with larger volume buyers, ensure the production of bamboo items is efficiently scheduled, and take responsibilities of packaging, branding and shipment to showrooms, trade fairs and markets within and outside the state. UNIDO through its experts will provide support and coaching to people involved in the entire supply chain from bamboo farmers, village pre-processing units, handicraft cluster and engineered bamboo industries through technical and organizations experts. Quality risk: Consistency of bamboo products in terms of quality, size and shape is among the factors expected at the retailers and customers end. Standardization of product in shapes, colours and finishes are essential requirements to maintain quality of the bamboo products. Artisans and manufacturers will be sensitized about these essential attributes and will be trained to use moulds, jigs and fixtures, which will be provided under the present partnership project. Treatment of bamboo is mandatory to impart long shelf life to the handicraft products. Collection centre and logistics for Page | 24
transportation of processed bamboo to bio refinery needs proper checking. Political risk: Changes in policies and programmatic activities at the state level may lead to the questioning of the project activities and setting up of regulatory barriers which would make the conservation efforts stricter. The setting up of new village based bamboo clusters may fall out of favour due to lack of support from the government in maintaining and developing infrastructure (e.g. electricity supply and maintenance of rural roads). However, the project will strengthen linkages with policy makers, department officials and various stakeholders in the bamboo sector in the state. The project will work to make the policy regime conducive to support the holistic development of bamboo sector to supplement the income of community members through value addition to raw bamboo. The project will mitigate the risk by working closely with the forestry department from the beginning in developing best practices for sustainable cultivation and harvesting of bamboo which, will be shared with community members to reduce encroachment in forest and indiscriminate harvesting of bamboo. Market risk: In the NER, the activities related to bamboo usages were started without giving serious attention to developing market linkages, and hence largely supply driven instead of market/demand driven. The products that artisans and the processed bamboo units are producing have a very small and limited market because reaching markets outside the state has been not been factored in. Therefore, the products do not yet meet the expectations of buyers in terms of quality and price. Market is though the driving factor for the product cycle, which needs to be studied thoroughly through field research and product trials. Cost of product is directly linked to its design, raw material usage, productivity, and transportation cost. These are important factors to consider while designing a product. UNIDO will provide trainings to the stakeholders in bamboo handicraft and others in the value chain of the bamboo sector and help in product design, pricing, packaging and inventory management to ensure the products are sold in bulk in markets outside the state and provide a steady income to stakeholders engaged in bamboo supply chain. Bamboo Flowering: The gregarious flowering of bamboo, which leads to the death of the plant, is a risk for some species of bamboo. The best way this risk can be minimized and spread out is by developing multi-species bamboo plantations, as well as by forest management strategies for species diversification to prevent monocrops of bamboo species. Bamboo Pricing: Bamboo pricing would play a critical factor for the sustainability of the NRL bamboo feedstock system. A finer balance among the competitive users will be required to keep the value chain sustainable.
Finally, natural calamities such as floods might divert the project plans; for instance, as has been seen in recent years, the flooding of the Brahmaputra valley might put at risk the agricultural sector and/or technology diffusion to the beneficiaries thereby diverting development efforts to relief services.
IV. INPUTS
The partnership project reflects a co-investment in supply chain and community development accompanying the construction of the bio-refinery. The bio-refinery will be established, owned and operated by Joint Venture of NRL, Chempolis Oy, Finnfund and Fortum. As this joint venture is not yet legally established, NRL will be the only provider of resources for the inception and pilot phase. Even though it is expected that thereafter for the main implementation phase, the project resources will be provided by the Joint Venture, for Page | 25
ease of reference all counterpart inputs to be provided throughout both project phases are within this document referred to as NRL resources and inputs. The project will be executed as a partnership project in which UNIDO appointed project personnel/resource persons will team up with NRL appointed project manager and project staff. UNIDO will provide technical expertise and overall guidance on all aspects of bamboo value chain development, cluster establishment, technology, product designs and markets, including training and capacity building, knowledge collection and dissemination and advocacy. NRL on its part will take lead in facilitating access to financing for clusters (through combination of grants, favorable loans and/or guarantees for facilities, tools and machinery) and to guarantees for bamboo feedstock procurement contracts for the future operation of the bio-refinery.
A. Counterpart Inputs
NRL on its own as well as acting on behalf of the bio-refinery joint venture will provide following inputs: Full time project coordinator to take charge of day to day management and coordination of the partnership activities and act as main liaison for agreements with beneficiary communities on project support extended for bamboo cluster development and associated supply of bamboo feedstock for the bio-refinery; Functional support for the project coordinator, covering secretariat and administration, finance and procurement, as appropriate from time to time; Remuneration of community representatives engaged for setting up, developing and initial running of each of the clusters; Operational office space for project team, for both NRL as well as UNIDO team members, including routine recurring office expenses (e.g. phone and internet access, routine printing); Project travel covering all travel and accommodation for NRL appointed team members and covering travel and accommodation for UNIDO appointed team members whilst in NER; Workshop costs, covering, as appropriate, venue and equipment hire, refreshments, invitations and handouts for all project related training activities, community workshops and consultation and advocacy meetings; Contracting of third party services related to preparation of information materials (print and/or online) for training, knowledge dissemination and/or advocacy; and Procurement of tools, equipment, machinery and/or other requirements identified in cluster development plan for supply to beneficiary clusters. It is expected that part of procured goods will be donated to clusters and part will be provided through some concessional financing scheme to be consolidated during pilot phase. The costs associated with these inputs will be borne directly by NRL, and the necessary funding will therefore not flow through UNIDO but be paid directly by NRL to respective providers. In addition, NRL will provide grant to UNIDO to fund the execution of UNIDO assigned project tasks, as outlined in Section IV.B. The Governments of Assam, Arunachal Pradesh, Meghalaya and Nagaland will provide support for acquiring the required land and physical infrastructure for setting up the bamboo clusters at select bamboo villages. These include: Allocation of land to the village council for setting up bamboo collection, processing and storage and bamboo products manufacturing and associated infrastructure for transport and storage;
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Physical infrastructure to connect the bamboo clusters in villages with roads, electricity and water; and Continued support by all the key state departments such as industries, forest, trade and commerce, for sale and marketing of bamboo-based producers.
B. UNIDO Inputs
The UNIDO input will be in the main through allocation of UNIDO staff and assignment of UNIDO-hired experts, and operational budget for their activities and services delivery.
UNIDO will assign on part time basis one of its international staff based at UNIDO headquarters in Vienna as the UNIDO project manager to plan, manage, administer and monitor the UNIDO project activities. Moreover, UNIDO will also part time involve its UNIDO Representative for India (based in New Delhi) to assist with overall guidance on project execution, in particular in regard to coordination with Government of India and pursuing possible synergies with other projects and initiatives of UNIDO and/or the United Nations in India. As per prevailing UNIDO rules and regulations, the time of UNIDO staff is not charged to this project, only the associated operational costs, in particular for staff travel.
UNIDO will further provide expertise through:
International experts – it is foreseen to engage on long term, part time basis an international bamboo industry expert, and complement her/his expertise and experience with short term assignments for specific studies, technical inputs or training on selected aspects of bamboo processing, markets and value chain development. National experts – it is foreseen to engage long term, full time cluster development expert to be working from project office to oversee all aspects of cluster development, including baseline assessment, cluster planning, cluster establishment and mentoring. In addition, multiple and possibly repeat short-term term expert assignments are foreseen for development of the knowledge base (background studies), baseline assessment, cluster plan development and training and capacity building of target clusters. Study tours – exposure visits for key project stakeholders to bamboo processing centres/clusters nationally and/or internationally as well as for participation in and promotion at prioritized trade exhibitions or industry events.
This will also require some operational costs, in particular for domestic and international travel of experts and their accommodation, and procurement for supportive equipment – including notebook, professional camera and portable projector.
Mainstreaming: benefits for women and minority groups
The Project aims to demonstrate good practices in mainstreaming inclusiveness with regard to women and minority groups wherever possible, and to avoid negative impacts on people in general, including due to their gender, ethnicity and/or religion. Although the Project is not primarily designed for empowerment, gender dimensions and inclusiveness will be considered throughout the whole project cycle.
The Project will as well promote awareness among key stakeholders about the relevance of gender equality for development and the guiding principle that both women and men must have equal opportunities to access, participate in, and benefit from the Project. Gender- sensitive recruitment will be practiced at all levels where possible, especially in selection of project staff. Gender-responsive Terms of Reference will be used to mainstream gender into
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subcontracted activities and services. The Project will strive at a gender ratio of 50% (women): 50% (men) with respect to staff and contracted (individual) services.
The Project aims at a share of at least 40% female participants in training activities. Sex- disaggregated indicators have been provided in the results framework. A gender expert will assist with preparation of gender analysis during the inception phase and identification of specific means to strengthen the project’s contribution to empowerment of women, and minority groups, and engagement of youth.
Efforts will be made to collect sex-disaggregated data. The terminal evaluation will take the gender dimension into account in the assessment to be conducted.
V. BUDGET
NRL (or NRL on behalf of the bio-refinery consortium) will fund the partnership project in full, by (1) providing a grant to UNIDO for it to deliver the UNIDO assigned project inputs and (2) paying directly for the supply of the NRL assigned project inputs.
The UNIDO grant will upon approval of this project partnership document be fixed and confirmed to UNIDO by means of funding agreement, consecutively for Phases I and II, upon which NRL would transfer funding to the project’s dedicated Trust Fund in UNIDO’s account, Following UNIDO’s financial and related rules and regulations, and in accordance with the project document and updated workplans, UNIDO will then obligate funding for recruitment of experts, travel, study tours, contracting etc., and provide NRL periodic (biannual) financial statements on utilization of the grant. Any remaining balance would be returned to NRL upon operational completion and financial closure of the partnership project. The NRL project budget is indicative, recognizing differences in accounting methods and procedures in NRL. It is expected that NRL (potentially jointly with its bio- refinery partners) will make financial reservation and then spent such in accordance with its own financial rules and regulations for the different project inputs.
The budget for the partnership project is elaborated in the table overleaf (further indicative detailed budget is provided in Annex to this project document). The budget is presented in split between UNIDO component (for which NRL would provide grant to UNIDO) and NRL component (to be directly expended by NRL). The budget is provided both on output basis (deliverables) as well as input basis (using UNIDO budget lines). The output-based budget though has prevalence to facilitate efficient and effective project delivery. In accordance with UNIDO established practice, UNIDO will obtain prior approval from NRL (and possibly its joint venture partners) for any budget revisions that results in either (1) a change in the total project budget and/or (2) an increase or decrease of the budget for any project output by 15% or more of its original budget.
The direct project costs of UNIDO attract 13% project support costs, as a reflection of the indirect costs occurred by UNIDO support functions, including personal, finance, legal, etc.
The UNIDO total project costs (inclusive of project support costs) for Phase 1 (inception and pilot) mount up to USD 267,810 and for Phase 2 (main implementation) to USD 978,580.
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Partnership Project Budget Summary
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VI. MONITORING, REPORTING AND EVALUATION
A. Project Monitoring and Evaluation
The UNIDO Project Manager will monitor the project during periodic review missions and a mid-term self- review will be undertaken half way through the project life (one year into implementation of phase 2). This mid-term review report will assess the progress of the project and identify major problems and constraints. An impact assessment will also be conducted on project completion for the clusters in the States of Assam, Arunachal Pradesh, Meghalaya and Nagaland.
Performance indicators designed in the project outputs will be used to monitor project performance and measure achievements at each stage, and make recommendations for strategies and/or corrective actions as required by the project. At the end of the project, a Final Report will be prepared.
B. Stakeholders cum Advisory Committee
The proposed Stakeholders cum Advisory Committee is expected to act as sounding board for project management on strategies and practices for inclusive bamboo chain value chain development. The committee would comprise representatives of State Governments of Assam, Arunachal Pradesh, Meghalaya and Nagaland, of relevant Central Government (possibly Ministry of Development of North East Region and Department of Industry Policy and Promotion) and selected bamboo knowledge initiatives (including for example Cane and Bamboo Processing Centre). The full membership will be determined during inception phase. The committee would be expected to meet at least annually.
Every year, stakeholders of each of the clusters in the states of Arunachal Pradesh, Nagaland, Meghalaya and Assam under the chairmanship of the Project Manager, will organize stakeholder meetings to review the project achievements and conduct beneficiary self- evaluations based on agreed milestones and project objectives. Self-assessments will also be conducted for other beneficiaries of training and workshop activities (who are not included in the clusters). Representatives of the Project Management Unit and/or consultants will make visits to the field, and presentations and discussions will be conducted. This forum acts as a control mechanism to correct any problems that may arise and redirect the project to the right course.
C. Reporting
The project will submit biannual narrative and financial progress reports in accordance with UNIDO regulations.
D. Monitoring & Impact Evaluation
An independent team of experts would be engaged by UNIDO to conduct independent terminal evaluation, focusing on impact and sustainability of project interventions and effectiveness and efficiency of project execution. This terminal evaluation will be informed by streamlined socio-economic benefit analysis/survey of the beneficiary communities.
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VII. PRIOR OBLIGATIONS AND PREREQUISITES
The single prerequisite for project implementation is funding which has to be made available before the project implementation can start.
VIII. LEGAL CONTEXT
The Government of the Republic of India agrees to apply to the present project, mutatis mutandis, the provisions of the Revised Standard Technical Assistance Agreement concluded between the United Nations and the Specialized Agencies and the Government on 31 August 1956 and as amended on 3 October 1963.
IX. PROJECT MANAGEMENT AND COMMUNICATIONS STRATEGY
The project will be co-managed and co-executed by NRL and UNIDO as a means to enhance overall sustainability of project results and taking advantage of the local presence and stakeholders’ relations of NRL within NER on one hand and the substantive knowledge and oversight of UNIDO. The management arrangements are illustrated below.
On a day to day basis, the UNIDO appointed full time cluster development expert (to be located at NRL hosted project office) will coordinate with the NRL appointed project coordinator. A compact executive committee between NRL and UNIDO, comprising of two management representatives of NRL and two UNIDO technical staff (project manager (headquarter based) and UNIDO Representative (based in New Delhi)). This executive committee would approve rolling biannual workplans, review progress reports and endorse key project decisions and review progress on at least biannual basis. Routine business of executive committee could be done by email exchange, whereas the review meetings could be either by videoconference and/or in person in connection with major project activities.
The project will have extensive communication and advocacy component, to largest possible extent through internet and/or possibly mobile applications to make information easily accessible to target clusters and other stakeholders. It is foreseen that the information would be initially hosted by the project, either through UNIDO and/or NRL, yet latest on completion of the project be transferred to relevant bamboo sector development agent.
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Annex 1: PROJECT LOGICAL FRAMEWORK
Intervention logic Objectively verifiable indicators Sources of verification Assumptions Development Start to improve livelihoods for - Increase in income contribution from - Project reports and impact evaluation goal/impact impoverished communities in North bamboo activities at the household level - Secondary reports on socio-economic East Region by creating diverse and in beneficiary communities (sex- status of beneficiary communities demand-driven sustainable bamboo disaggregated) (relative to rest of NER) supply chains that provide opportunities - Increase in jobs and self-employment in for employment and income generation bamboo value chain in beneficiary in selected communities in Assam, communities (sex-disaggregated) Arunachal Pradesh, Meghalaya and Nagaland Outcome(s)/ 1. Enabling Framework: improved - Business models and logistical system for - Publication and use of knowledge - Favourable policy framework for harvest Immediate provision of knowledge, technical, bamboo feedstock supply developed and products (including reports, learning and trade of non-forest bamboo put in objective(s) management, marketing and financing promoted materials, guidelines etc.) on all aspects place as per Government’s 2017 support for market-driven and inclusive - Improved community access to of sustainable and inclusive bamboo announcements expansion and diversification of supply appropriate and affordable resources to supply and utilization - Continued and preferably scaled-up chain for bamboo products and bamboo- start and operate bamboo clusters - Community usage of product support government and community interest to derived fuels - Improved understanding of opportunities facility created by project develop large scale bamboo industry for and benefits of sustainable bamboo products and fuels in NER, including industries for inclusive development of commitment of effort towards realization NER among government, communities thereof and society at large 2. Bamboo Clusters: community-based - Volume of sustainably managed and - Project activity and monitoring reports - Successful erection and sustainable enterprises established that sustainably harvested bamboo - Independent project evaluation operation of bio-refinery manage and harvest bamboo, produce - Economic value generated from bamboo and market bamboo products and supply by clusters bamboo feedstock to bio-refinery - Number of jobs and self-employment created by bamboo activities in clusters (sex-disaggregated) Outputs (results) 1.1 Knowledge Base: technical, - Study of and publications on: - Stakeholders’ access to information - Continued and/or possibly expanded management, marketing and resource sustainable bamboo stocks and products and knowledge gathered by the market interest and demand for bamboo information for sustainable market- harvests in target states; project based products, in Indian and export driven community-based bamboo sustainable management of markets industry readily available to interested bamboo resources, including stakeholders in particular in NER suitable cultivars, on markets, products and techniques for different bamboo applications; and organization and business
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Intervention logic Objectively verifiable indicators Sources of verification Assumptions models for bamboo cluster development and operation 1.2 Product and Technology Facility: - Product and Technology Facility - Users feed-back from beneficiary clusters common support facility available to supported existing and potential future using support services provided by new and existing bamboo clusters to bamboo clusters with business planning product and technology facility establish, expand and diversify and financing, product and market development, technology selection and acquisition, cluster management, and training and capacity building 1.3 Advocacy and Policy Dialogue: - Conduct of awareness workshops, - Government and community support for increased recognition of potential of community and government consultation bamboo value chain development, as bamboo sector for livelihood creation and policy dialogues. Input to policy evidenced from policy and stakeholders’ and production of renewable products development and implementation initiatives and statements and fuels - Promotion to empowerment of women in value chain development and cluster development 2.1 Cluster Establishment and - Number of bamboo clusters established - Annual business and production reports Operation: community-based enterprise- (project target 25) of clusters like units have been set up and are - Number of people participating in - Training and procurement records under sustainably harvesting and processing clusters (disaggregated by gender and projects bamboo to supply bamboo feed stock to for minority groups, target: 40% - Procurement documentation of bio- bio-refinery and demand-driven and female participation) refinery quality bamboo products to markets - Drafting and approval of cluster plans - Supply of key tools and equipment - Number of capacity building and training activities and participants (disaggregated by gender and for minority groups, target: 40% female participation) - Volume of bamboo feed stock sustainably supplied by clusters to bio-refinery - Economic value generated from bamboo products produced and marketed by clusters 3. Management, Monitoring and - Develop and implement Key Performance - Biannual project management reports - Successful and timely mobilization and Evaluation: efficient management and Indicators - Independent evaluation deployment of adequate project resources implementation of project activities with - Set up and operation of project (financial, human etc.) due participation of beneficiaries and management and governance other stakeholders, including monitoring - Conduct baseline and project end socio- and impact evaluation
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Intervention logic Objectively verifiable indicators Sources of verification Assumptions economic survey in beneficiary communities - Conduct independent terminal evaluation
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Annex 2: MOU Between NRL and UNIDO
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Annex 3: Project budget detail
The following tables provide further details to the summary partnership budget provided in section V of this project document.
UNIDO input budget
The project budget is binding in regard to the total budgets for respectively Phase 1 and Phase 2 (i.e. an upper ceiling for the total project costs) and guided by the output level budgets, implying that UNIDO will seek prior approval from NRL and potentially its Joint Venture partners in case of perceived necessity to change the output level budget by 15% or more, relative to below project budget. The table provides allocations by input budget line of UNIDO, yet these are illustrative and indicative, allowing UNIDO flexibility to determine best contractual modality for delivering the detailed project inputs agreed upon from time to time in the detailed work plans.
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NRL input budget
To establish parity in budget between UNIDO and NRL as joint implementing partners of this project, following table provides also indicative input-based budgets for the project activities directly executed by NRL. This uses the same UNIDO input budget lines, even though it is recognized that such budget lines are unlikely to be maintained in NRL accounts. It is reiterated that also the total budget for the NRL component remains indicative, and is expected to be provided gradually as the investment and support needs for the clusters and the associated benefits to NRL get further clarified in the course of project execution.
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