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World Bank Document Document of The World Bank Public Disclosure Authorized FOR OFFICIAL USE ONLY Report No: 68990-CN PROJECT APPRAISAL DOCUMENT ON A PROPOSED LOAN Public Disclosure Authorized IN THE AMOUNT OF US$80 MILLION TO THE PEOPLE’S REPUBLIC OF CHINA FOR THE HUNAN FOREST RESTORATION AND DEVELOPMENT PROJECT Public Disclosure Authorized November 21, 2012 China & Mongolia Sustainable Development Unit Sustainable Development Department East Asia and Pacific Region Public Disclosure Authorized This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective March 1, 2012) Currency Unit = Renminbi (RMB) Yuan (Y) RMB6.25 = US$1 US$0.16 = RMB1 FISCAL YEAR July 1 – June 30 ABBREVIATIONS AND ACRONYMS CPMO County Project Management Office CPS Country Partnership Strategy DA Designated Account EA Environmental Assessment EIRR Economic Internal Rate of Return EMDP Ethnic Minority Development Plan EMP Environmental Management Plan EPG Environmental Protection Guidelines FIRR Financial Internal Rate of Return FMM Financial Management Manual GoC Government of China HPAO Hunan Provincial Audit Office IA Implementing Agency IBRD International Bank for Reconstruction and Development ICB International Competitive Bidding ICR Implementation Completion Report IFR Interim Financial Report IP Indigenous People IRR Internal Rate of Return ISP Implementation Support Plan km kilometer m2 square meter m3 cubic meter M&E Monitoring and Evaluation MOF Ministry of Finance NCB National Competitive Bidding NPV Net Present Value OCC Opportunity Cost of Capital ORAF Operational Risk Assessment Framework PDO Project Development Objective PDRC Provincial Development and Reform Commission PFA Provincial Forestry Academy PFinB Provincial Finance Bureau PFB Provincial Forestry Bureau PFSDI Provincial Forest Survey and Design Institute PIP Project Implementation Plan PMP Pest Management Plan PLG Project Leading Group PMO Project Management Office PPM Participatory Planning Manual PPMO Provincial Project Management Office PRA Participatory Rural Appraisal QBS Quality Based Selection QCBS Quality &Cost Based Selection SA Social Assessment SIL Specific Investment Loan SSG Scientific Supporting Group SW Staff Week VSL Variable Spread Loan WA Withdrawal Application Regional Vice President: Pamela Cox, EAPVP Country Director: Klaus Rohland, EACCF Sector Director: John Roome, EASSD Sector Manager: Mark Lundell, EASCS Task Team Leader: Liu Jin, EASCS CHINA Hunan Forest Restoration and Development Project CONTENTS I. STRATEGIC CONTEXT .........................................................................................1 A. Country Context ................................................................................................ 1 B. Sectoral and Institutional Context ..................................................................... 1 C. Higher Level Objectives to Which the Project Contributes.............................. 2 II. PROJECT DEVELOPMENT OBJECTIVES ....................................................2 III. PROJECT DESCRIPTION ..................................................................................3 A. Project Components .......................................................................................... 3 B. Project Financing .............................................................................................. 4 C Lessons Learned and Reflected in the Project Design ...................................... 5 IV. IMPLEMENTATION ...........................................................................................6 A. Institutional and Implementation Arrangements .............................................. 6 B. Results Monitoring and Evaluation .................................................................. 7 C. Sustainability..................................................................................................... 7 V. KEY RISKS AND MITIGATION MEASURES ................................................8 VI. APPRAISAL SUMMARY ....................................................................................9 A. Economic and Financial Analyses .................................................................... 9 B. Technical ......................................................................................................... 10 C. Financial Management .................................................................................... 11 D. Procurement .................................................................................................... 11 E. Social (including Safeguards) ......................................................................... 12 F. Environment (including Safeguards) .............................................................. 13 Annex 1: Results Framework and Monitoring ............................................................15 Annex 2: Detailed Project Description ...........................................................................18 Annex 3: Implementation Arrangements ......................................................................28 Annex 4: Operational Risk Assessment Framework (ORAF) .....................................41 Annex 5: Implementation Support Plan ........................................................................44 MAP IBRD 39235 ............................................................................................................47 . CHINA HUNAN FOREST RESTORATION AND DEVELOPMENT PROJECT PROJECT APPRAISAL DOCUMENT EAST ASIA AND PACIFIC EASCS . Basic Information Date: 21-November-2012 Sectors: Forestry (100%) Country Director: Klaus Rohland Themes: Climate change (50%), Other environment Sector Mark R. and natural resources management (50%) Manager/Director: Lundell/John A. Roome Project ID: P125021 EA: B - Partial Assessment Category Lending Instrument: Specific Investment Loan Team Leader(s): Jin Liu Joint IFC: No . Borrower: People’s Republic of China: Ministry of Finance Responsible Agency: Hunan Provincial Forestry Bureau Contact: Mr. Li Shuming Title: Project Management Office Director Telephone No.: 86-731-8555-0019 Email: [email protected] . Project Implementation Start 31 -January - End 31-December – Period: Date: 2013 Date: 2018 Expected Effectiveness 30-April-2013 Date: Expected Closing Date: 31-March-2019 . Project Financing Data(US$M) [ X ] Loan [ ] Grant [ ] Other [ ] Credit [ ] Guarantee For Loans/Credits/Others Total Project Cost (US$M): 115.2 Total Bank Financing (US$M): 80.0 . Financing Source Amount(US$M) Borrower 35.20 International Bank for Reconstruction and 80.00 Development Total 115.20 . Expected Disbursements (in USD Million) Fiscal 2013 2014 2015 2016 2017 2018 2019 Year Annual 3.00 10.00 15.00 20.00 15.00 12.00 5.00 Cumulati 3.00 13.00 28.00 48.00 63.00 75.00 80.00 ve . Project Development Objective(s) The project development objective is to enhance the resilience and environmental function of selected ice storm affected ecological forest plantations in Hunan Province by increasing forest species diversity and vegetative tree cover in those areas. Components Component Name Cost (USD Millions) Component 1: Reforestation and rehabilitation of damaged 103.3 ecological forest plantations Component 2: Institutional support and technology enhancement 11.7 . Compliance Policy Does the project depart from the CAS in content or in other significant respects? Yes [ ] No [ X ] . Does the project require any waivers of Bank policies? Yes [ ] No [ X ] Have these been approved by Bank management? Yes [ ] No [ X ] Is approval for any policy waiver sought from the Board? Yes [ ] No [ X ] Does the project meet the Regional criteria for readiness for implementation? Yes [ X ] No [ ] . Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 X Natural Habitats OP/BP 4.04 X Forests OP/BP 4.36 X Pest Management OP 4.09 X Physical Cultural Resources OP/BP 4.11 X Indigenous Peoples OP/BP 4.10 X Involuntary Resettlement OP/BP 4.12 X Safety of Dams OP/BP 4.37 X Projects on International Waterways OP/BP 7.50 X Projects in Disputed Areas OP/BP 7.60 X . Legal Covenants Name Recurrent Due Date Frequency Institutional Arrangements X Yearly Description of Covenant Throughout the period of implementation of the project, Hunan shall maintain Provincial and County Leading Groups, Provincial and County Project Management Offices, as well as a technical support team with terms of reference, staffing and other resources acceptable to the Bank. Name Recurrent Due Date Frequency Project Implementation Manual X Yearly Description of Covenant The Project Implementing Entity shall carry out the Project in accordance with the Project Implementation Plan and shall not amend, suspend, or waive the said plan or any part thereof without the prior written agreement of the Bank. Name Recurrent Due Date Frequency Safeguards Instruments X Yearly Description of Covenant The Project Implementing Entity shall implement the Environmental Management Plan (EMP, including therein the Environmental Protection Guidelines and the Pest Management Plan) and the Ethnic Minorities Development Plan (EMDP) in a manner and substance satisfactory to the Bank, and shall not, amend, suspend, or waive the EMP and the EMDP without the prior written concurrence of the Bank. Name Recurrent Due Date Frequency Procurement Management X Yearly Description of Covenant All goods,
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