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World Bank Document Document of The World Bank FOR OFFICIAL USE ONLY RqwetNo. 7752-MOR Public Disclosure Authorized STAFF APPRAISALREPORT KINGDO4OF MOROCCO SECONDFORESTRY DEVELWPIEMT PROJECT Public Disclosure Authorized November 28, 1989 Public Disclosure Authorized Agriculture Operations Division Country Department II Europe, Middle East and North Africa Regional Office Public Disclosure Authorized TKs dounet bo a rested JIstdbuton and may be used by recipients only In the performnce of dutls.klat onotets may not otherwise be discled wiout Word Bank autborlaion. CURRENCY EOUIVALENTS (February1289) US$ 1.00 - Dirham (DH) 8.25 DH 1 - USS 0.121 WEIGHTSAND MEASURES The metric system is used throughout this report GLOSSARYOF ABBREVIATIONS ASAL - AgriculturalSector Adjustment Loan B - Billion (thousandmillions) CHB - Compte Hors Budget (extra-budgetaryfund) CRABVF - Regional Center for Watershed and Forest Management Planning CRIA - Regional Center for Forest Inventoryand Management Planning DEFCS - Departmentof Forestry and Soil Conservation DPA - ProvincialDepartment of Agriculture FAO - Food and AgricultureOrganization of the United Nations FAO/CP - FAO/WorldBank CooperativeProgramme FNF - National Forestry Fund H - million MARA - Ministry of Agricultureand Agrarian Reform MOI - Ministry of the Interior UNDP - 7nited Nations DevelopmentProgram U.b. - Under bark, i.e. the volume wood excludingthe bark GOVERNMENTOF MOROCCO FISCAL YEAR January 1 to December 31 FOR OFFICALULSE ONLY STAFF APPRAISALREPORT KINGDOMOF NOROCCO SECONDFORESTRY DEVELOPMENT PROJECT Loan and Proiect Summary Amr-ower: Kingdom of Morocco Amount: US$ 49 million equivalent ITrms: Repaymentin 20 years, including5 years of grace, with interestat the Bank's standard variable rate. ExecutingAfency: Departmentof Forestry and Soil Conservation (DEFCS) ProiectDescription: The Project representspriority investmenLsfrom DEFCS's 5-year investmentbudget plus forestry investmentsfinanced by the communes and executedby DEFCS. The project would strengthen forestryplanning and policies and assist Morocco in maintainingand improving its forestrypotential and meet the country'swood needs and protect its watersheds in harmony with other demands on the areas such as domestic stock grazing. Main components are (a) forestry planning (includingnational forest inventory, forest demarcation,forest management planning and a national reforestationplan; (b) field operations,including those paid by the communes,consisting of regenerationof natural forest (36,000ha), plantationestablishment (32,000ha), watershed management (development of low cost techniqueson some 10,000 ha), forest range management (works 57,000 ha, plans 97,000 ha), pest management (25,000ha), stabilisationof dunes (370 ha), forest road construction(580 km) and rehabilitation(1,450 km); and (c) support activities,including nature conservation,forest research,staff housing rehabilitation,equipment purchases, trainingand technicalassistance. This document has a restricteddistribution and may be used by recipientsonly in the performance of their officialduties. Its contents may not otherwisebe disclosedwithout World Bankauthorization. - (ii) - Project Risks: The two major risksfacing the projectare a slowerthan projected growth rate for project plantationsand continuedgovernment failure to provideadequate and timelyfunding. The former risk is reducedby the introductionof vegetativelyreproduced (clonal) planting material,which has dramaticallyincreased yieldsin othercountries, and the fundingrisk is lessenedby the fact that projectinvestments are in the Government'score investmentprogram. The potentialrisk of failureof the forest populationsto participateand to complywith plansto organiselivestock grazing in project areas has been taken into account in the project designby choosingareas where the populations are :-avourableto projectoperations and by priornegotiated agreements. Estimated Project Costs S Loual Eoxeign Total ----- -US$ million ------ A. Forestry Planning 4.5 3.1 7.6 B. Forest Operations Regeneration of Natural Forest 8.3 1.3 9.6 Plantation Establishment 13.8 7.5 21.3 Watershed Management 3.9 1.3 5.2 Forest Range Development 6.2 1.9 8.1 Forest Roads 3.2 2.3 5.5 Communal Component 10.8 4.6 15.4 C. Support Activities Nature Conservation 0.5 0.5 1.0 Forest Research 2.1 0.9 3.0 Institution Development 0.1 - 0.1 Housing & Equipment 2.6 1.7 4.3 Training Q.7 0A1 0. Base Costs 56.7 25.2 81.9 Physical Contingencies 3.2 1.4 4.6 Price Contingencies 9.4 4.1 13.5 Total Project Costs 69.3 30.7 100.0 Financing Plan Local oireifn Total - USA million -- Goverment 31.2 1.0 32.2 Rural Communes 18.8 - 18.8 Bank 12.3 29.7 49.0 Total ,69.3 30.7 100.0 Estimated Disbursements FY90 PY91 FY92 F FY94 FY95 FY96 Annual 0.6 5.4 8.0 9.0 10.0 9.0 7.0 Cummulative 0.6 6.0 14.0 23.0 33.0 42.0 49.0 Rate of Return: 39% Mag Number: IBRD 21506 a/ Includes US$19.9 million of taxes and duties. STAPP APPRAUSALREPORT KIIoDOM OF MOROCCO SECOND FORESTRY DEVZLOPMENTPROJECT Table of Contents Page no I. INTRODUCTION . 1 II. FORESTRY IN MOROCCO . 1 A. Forest Resources . 1 B. Contributionto the Economy . 2 C. Forestry Institutions. .3 General.. ... Forest Department (DEFCS) . 3 D. Forest Operations . 5 E. Marketingof Forest Products . 8 F. The Forest Industry . 9 G. Forestry Legislationand Policies . 11 Forestry Legislation . 11 Financingof Forest Operations . 13 GovernmentPlans and Policies . 14 H. Constraintsto Development . 15 I. Bank Involvementin Agriculturein Morocco . 15 J. Lessons Learned . 17 III. THE PROJECT AREA . 18 A. General . 18 B. Climate, Soils and SpeciesDistribution . 18 C. Populationand Infrastructure. 19 This report is based on the findings of an appraisalmission which visited Morocco in January-February1989. Mission memberswere: Harald Stier (Task Manager), Colin Holloway (ForestrySpecialist) and Isabelle Schirmer (Economist)Bank, and Gilles Mille (ForestManagement Specialist),Consultant. The forest range managementand nature conservationcomponents were essentiallyappraised during an earliermission, in September-October1988 by Philippe Ardouin-Dumazet(Livestock Specialist) FAO/Bank CooperativeProgramme and Maryla Webb (NatureConservation Specialist) Consultant, respectively. i - Table of Contents (continued) - E~~~~~~~~~~aLe_no IV. THE PROJECT.............. 20 A. Objectives,Rationale and Main Features.20 Objectives . 20 Rationale for Bank Involvement . 20 Main Components . 20 B. Detailed Description.21 Forestry Planning.21 ForestryOperations .22 Support Activities .26 C. ProjectCosts .30 D. Financing.32 E. Procurement.33 F. Disbursements.35 G. Accounts and Audit .36 V. ORGANIZATIONAND MANAGEMENT.37 A. Project Irplementationand Operation . 37 B. Participation of Local Populations and Social Issues . 38 C. Consultancy Services . 39 D. Monitoringand Evaluation .. 40 E. Status of Project Preparation. 40 VI. PRODUCTIONMARKETS, PRICES AND FINANCIALRESULTS . 41 A. Yields and Management.41 PlantationEstablishment .41 Regeneration.41 Silvo-pastoralDevelopment . 42 B. Production .42 C. Markets.44 D. Prices . ... 44 E. Impact on GovernmentBudget and Cost Recovery . 45 VII. BENEFITS AND JUSTIFICATION.46 A. Benefits and Beneficiaries.46 Productionand Foreign Exchange Savings . 46 EmploymentCreation .46 Environmentaland Other Benefits . 47 B. Economic Analysis.48 C. SensitivityAnalysis .49 D. Project Risks .50 VIII. AGREEMENTSAND RECOMMENDATION................ 50 iii - STAFFAPPRAISAL REPORT KINGDOMOF MOROCCO SECONDFORESTRY DEVELOPMENT PROJECT LIST OF ANNEXES ANNE 1 - BACKGROUNDDATA Table 1: Action Taken on WJater Catchments ANNEX 2 - COST ESTIMATES Table 1: Project Cost Summary Table 2: Project Components by Year Table 3: Summary Accounts by 'Year Table 4: DisbursementSchedule ANNEKX3 - PROJECT PROGgaMS Table 1: Regeneration of Natural Forest Table 2: Annual Program of New Boundary Marking Table 3: Annual ReforestationProgram by Forest Serviee and Model Table 4: Annual WatershedManagement Program Table 5: Research Components:Annual PhysicalTargets and Unit Costs ANNEX 4 F-FINANIAL ANTDECONOMIC RESULTS Table 1: Internal Rates of Return and Net Present Valu4 of Project Components Table 2: Cost Recovery for Regenerationand PlantationComponents Table 3: Cost Recovery for BouhasoussenForest SilvopastoralDevelopment Table 4: Distributionof the Pro*iction nerementalWood Productionfrom the Project Table 5: Selected Project Streams Table 6: Economic and FinancialPrices for Selected Outputs and Inputs ANNEX 5 - LIST OF DOCUMENTSIN PROJECT FILE CHART Organisation of Forest Services (WB 44431) Project Sites-IBRD21506 SAP APPRAISALRO KINGDOMOF MOROCCQ SECONDFORESTRY DEVELOPMENT PROJECT I. INTRODUCTION 1.01 With active Bank encouragement,Morocco has been giving increasing priority to natural resourcemanagement and forestryover the last decade or so. During this period, the Bank has supportedforestry through important (.omponentsin four rural developmentprojects (Fes-Karia-TissaFY 79, Loukkos rF 80, Middle Atlas FY 82 and Oulmes-RommaniFY 83). The experiencefrom the earlier of these project componentswas included in a first forestryproject (Gharb-Mamora,FY 82) for a loan of US$27.5 million which is expected to close on June 30, 1990. All of these projects includedexperimental or innovative improvedpractices for forestry plantations,exploitation, soil conservation, pest management,eX.c., and institutionbuilding. Technically,implementation of these forestry activitieswas successfuland, in the anticipationof their completion,a Bank mission visited Morocco in October 1985 to discuss
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