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The International Fund for Agricultural Development For Official Use Only PEOPLE’S REPUBLIC OF CHINA HUNAN AGRICULTURAL AND RURAL INFRASTRUCTURE IMPROVEMENT PROJECT project design completion report Stage: DESIGN COMPLETION Main Report and Annexes Asia and the Pacific Division Programme Management Department REPORT No. 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 the authorization of the International Fund for Agricultural Development (IFAD). PR CHINA: HUNAN AGRICULTURAL AND RURAL INFRASTRUCTURE IMPROVEMENT PROJECT PROJECT DESIGN REPORT - MAIN REPORT Table of Contents Page Currency Equivalents iii Weights and Measures iii Fiscal Year iii Abbreviations and Acronyms iii Map of the Project Area iv Map of IFAD Operations in the Country v Executive Summary vi I STRATEGIC CONTEXT AND RATIONALE 1 A Country and rural development and poverty context 1 B Rationale 2 II PROJECT DESCRIPTION 4 A Project area and target group 4 B Project development objective 10 C Project components/outcomes 10 Component A – Community infrastructure improvement 10 Component B – Sustainable agriculture development and market access support 13 Module activities: a step wise process towards sustainable co-operatives.Error! Bookmark not defined. Component C – Project coordination and management 16 D Lessons learned and compliance with IFAD policies 18 III PROJECT IMPLEMENTATION 20 A Approach 20 B Organizational framework 21 The main implementing agencies and their roles 21 Technical partners in implementation 23 Institutional outcomes 24 Links with complementary projects 24 D Planning, M&E, learning and knowledge management 25 E Financial management, procurement and other fiduciary aspects 28 F Supervision 30 G Risk identification and mitigation 30 IV PROJECT COSTS, FINANCING AND BENEFITS 32 A Project costs 32 B Project financing 33 C Summary benefit analysis and economic analysis 33 D Sustainability 36 i PR CHINA: HUNAN AGRICULTURAL AND RURAL INFRASTRUCTURE IMPROVEMENT PROJECT PROJECT DESIGN REPORT - MAIN REPORT ANNEXES 1. Country and rural context background 2. Poverty, Targeting and Gender 3. Country Performance and Lessons Learned 4. Detailed Project Description 5. Institutional aspects and implementation arrangements 6. Planning, Monitoring and Evaluation and Learning and Knowledge Management 7. Financial Management and disbursement arrangements 8. Procurement 9. Project Cost and Financing 10. Economic and Financial Analysis 11. Draft project implementation manual 12. Compliance with IFAD policies 13. Contents of the Project Life File WORKING PAPERS 1. Community Infrastructure Improvement 2. Sustainable Agricultural Development 3. Household-based Agro-Forestry Development 4. Gender and Social Development 5. Environmental and Social Completion Note 6. Project Costs and Financing 7. Project Economic and Financial Analysis 8. Grant Proposal for Scaling-up & Research and Development of Roots and Tuber Crops 9. Minutes of meeting of the field visit DCM ii PR CHINA: HUNAN AGRICULTURAL AND RURAL INFRASTRUCTURE IMPROVEMENT PROJECT PROJECT DESIGN REPORT - MAIN REPORT CURRENCY EQUIVALENTS Currency Unit = Yuan (CNY) USD 1.00 = CNY 6.40 CNY 1.00 = USD 0.1563 WEIGHTS AND MEASURES International metric system, unless specifically described in text; except: 1 ha = 15 mu 1 mu = 0.067 ha 1 kg = 2 Jin 1 Jin = 0.5 kg FISCAL YEAR 01 January – 31 December ABBREVIATIONS AND ACRONYMS ACWF All-China Women Federation AWPB Annual Work Plan and Budget BOA Bureau of Agriculture BOL Bureau of Livestock BOT Bureau of Transportation BOWR Bureau of Water Resources CID Community Infrastructure Development CNY Chinese Yuan COSOP Country Strategic Opportunities Programme of IFAD CPMO County Project Management Office DOA Department of Agriculture DCM Design Completion Mission DOF Department of Finance DOT Department of Transportation DOWR Department of Water Resources DRC Development and Reform Commission GDP Gross Domestic Product GOC Government of China IA Implementing Agency IFAD International Fund for Agricultural Development IGA Income Generating Activity ITSC Integrated Technical Service Centre M&E Monitoring and Evaluation iii PR CHINA: HUNAN AGRICULTURAL AND RURAL INFRASTRUCTURE IMPROVEMENT PROJECT PROJECT DESIGN REPORT - MAIN REPORT MDG Millennium Development Goal MOA Ministry of Agriculture MOF Ministry of Finance MOST Ministry of Science and Technology MOU Memorandum of Understanding MTR Mid-Term Review NDRC National Development Reform Commission PAO Poverty Alleviation Office PBAS Performance Budget Allocation System (IFAD) PLG Project Leading Group PMO Project Management Office PPMO Provincial Project Management Office RCC Rural Credit Cooperative REO Rural Energy Office RIMS Results and Impact Management System (IFAD) SOE Statement of Expenditures TPMO Township Project Management Office USD United States Dollar VIG Village Implementation Group WA Withdrawal Application WFP The World Food Programme WUA Water Users ‘Association iv PR CHINA: HUNAN AGRICULTURAL AND RURAL INFRASTRUCTURE IMPROVEMENT PROJECT PROGRAMME/PROJECT DESIGN REPORT - MAIN REPORT v PR CHINA: HUNAN AGRICULTURAL AND RURAL INFRASTRUCTURE IMPROVEMENT PROJECT PROGRAMME/PROJECT DESIGN REPORT – MAIN REPORT vi PR CHINA: HUNAN AGRICULTURAL AND RURAL INFRASTRUCTURE IMPROVEMENT PROJECT PROGRAMME/PROJECT DESIGN REPORT - MAIN REPORT HUNAN AGRICULTURAL AND RUAL INFRASTRUCTURE IMPROVEMENT PROJECT Executive Summary Initiating Institution: IFAD Borrower: Government of the People's Republic of China Executing Agency: Government of the Hunan Province Total Project Cost: USD 93.2 million Amount of IFAD Loan: SDR ___ million (equivalent to approximately USD 46.0 million) Amount of IFAD Grant: SDR ___ million (equivalent to approximately USD 1.0 million) Terms of IFAD Loan Modified ordinary terms and conditions, namely eighteen years, including a grace period of five years with an interest rate equal to the reference interest rate per annum as determined by IFAD. Contribution of Borrower: Approximately USD 45.6 million Contribution of beneficiaries Approximately USD 0.6 million Appraising Institution: IFAD Supervision: Directly supervised by IFAD Project goal: The goal of the Project is rural development and poverty reduction in targeted areas of Hunan Province. The achievement of these will be demonstrated through 35% of households recording improved asset ownership index compared to the baseline (from RIMS data), and a 15% drop in child malnutrition prevalence in the area compared to the baseline, disaggregated by gender (from RIMS). Project objective: The specific project objective is to increase revenues, improve family food security, and strengthen the resilience of 182,000 rural households in 9 project counties, from improved agricultural production and rural infrastructure. By the end of project implementation, the following results will have been achieved: incomes of the rural poor in targeted areas increased by 25%, at project closing; and 70% of beneficiary households report improved food security as compared to the baseline.. Project Components include: (i) Community Infrastructure improvement, which will be the basis for expanded and improved agricultural production, decreased physical isolation and thus improved integration into the marketing value chains, and improved productive and daily-life assets for the benefit of the rural community and the households in the project area. Support is provided for irrigation facilities, village roads, drinking water supply facilities, and rural electricity grid upgrading. These activities will be critical for the project area to strengthen the community resilience to frequently-occurring climate related calamities, improve the access of the rural poor to markets, information and technical services, and develop commercialized production of agriculture, which are regarded as effective measures for rural development and poverty reduction at the current stage. The project will provide related tailor-made training to beneficiaries for the purpose of improved community- based operations and maintenance of infrastructure. Thus, increased beneficiary participation and ownership will help ensure the sustainability of project-built community assets. (ii) Sustainable agricultural development and market access support, which aims to support the sustainable development of diversified and adaptive agriculture through the provision of improved production inputs, technologies, technical services support, and market access. The modular approach will be adopted for the component, while the concepts and techniques of sustainable development and environment protection will be integrated within all project activities. The production modules are designed to help strengthen the farmers’ resilience and adaptability to uncertainties, mainly caused by climate change and market transformations. Mainstreaming the targeted farmers into the marketing value chains for their products, and production specialisation or diversification will be achieved through the support to farmers’ cooperatives. The above mentioned modular interventions will be complemented by the module of technical service support, which intervenes at the supply side. (iii) Project management will involve the establishment of an effective management structure of PMOs at provincial and county levels, and for the prefecture of Xiangxi. vii PR CHINA: HUNAN AGRICULTURAL AND RURAL INFRASTRUCTURE IMPROVEMENT PROJECT
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