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Implementation Completion Report (ICR) Review - Forest Development Support Project

1. Project Data:   
Project ID:
Project Name:
Forest Development Support Project
Forestry, Agriculture
L/C Number:
Partners Involved:
Parallel financing: European Investment Bank and Denmark and Sweden
Prepared By:
Ridley Nelson, OEDST
Reviewed By:
Andres Liebenthal
Group Manager:
Gregory Ingram
Date Posted:

2. Project Objectives, Financing, Costs, and Components:

Total Project Costs at Appraisal: US $335.4 m; Total Project Costs Actual: US $247.1 m; IBRD Financing at Appraisal: US $146.0 m; IBRD Financing Actual: US $102.0 m; European Investment Bank Actual: US $16.3 m; Bilateral Assistance from Denmark and Sweden: US $0.1 m.

There were three main objectives: (i) assistance in introducing biologically and environmentally sound management practices in the forestry sector and amelioration of environmental damage; (ii) improvement in the efficiency of forestry activities; (iii) improvement in the organization, management, and financial structure of the General Directorate of State Forests (GDSF) and the government's programs to modernize, restructure, and privatize elements of the GDSF and the downstream wood industry sector.

Main components were: (a) environmental forest management, including funds for labor-intensive activities, restoration of air pollution damaged forests to protect fragile watersheds, afforestation of land moving out of agriculture, and a genetic conservation program; (b) modernization of harvesting, skidding, and transport equipment, and development of a privatization plan for harvesting, skidding and transportation activities; (c) ecosystem conservation in national parks - including the development of National Park protection plans.

3. Achievement of Relevant Objectives:

The project objectives were largely achieved. Project actions had significant environmental impact. Afforestation targets were surpassed and with high rates of survival. Alternative forest management procedures were attempted but there was controversy over technical management that persisted unresolved throughout project implementation. Achievements in the development of national parks fell short of appraisal targets due to a lack of grant funds. Improvement in the efficiency of forest management made progress with the physical achievements exceeding targets but again there remained some unresolved technical/management questions about efficiency of the systems. The project had significant effect on supporting the transition of forest institutions to the market economy, forest management previously undertaken by forest stations was shifted to private operators. However, so far this has had an insignificant overall impact on reducing State Forest Department costs.

4. Significant Outcomes/Impacts:

Most silviculture operations exceeded targets at lower than estimated cost, for example, reafforestation in polluted areas reached 100 percent of target at 83 percent of budget. Reacting quickly to a disease problem, the Bank supported addition of a nun moth biological control program and an impressive 875,000 hectares were covered. The program was very effective and created new attitudes towards pro-environmental protection methods which will have longer term impact. Support was given to the design of planning guidelines for park management which were prepared on the basis of a consultative process including social assessments to ensure support by stakeholders. This has led to later completion of 19 management plans for parks - an important achievement.

5. Significant Shortcomings (include non-compliance with safeguard features):

Project preparation did not carry out sufficient analysis of the technical and economic implications of different silvicultural practices. generalized thinning prescriptions were adopted as the planning basis which ignored traditional Polish methods producing tall trees, natural pruning, and high biomass. This problem was recognized early on but, as noted above, never resolved. Achievement in the component developing national parks was limited because it anticipated a further $10 million would be financed by grant funds and government was unable to raise significant complementary funds during implementation. The component was therefore reduced to more limited activities. There were no initial performance indicators in the SAR and it is not clear from the ICR whether, with the M&E consultants, these were ever developed and agreed. There remain some questions about the relevance of the scale and some components of the project which are hinted at in the ICR and noted in Lesson 1 below. Was the substantial forest planting really the most important issue or should the focus have been somewhat more on the testing of new forest management systems and institutional strengthening within a somewhat smaller project?

6. Ratings:ICROED ReviewReason for Disagreement/Comments
Institutional Dev.:
Bank Performance:
Borrower Perf.:
Quality of ICR:

7. Lessons of Broad Applicablity:

1. In a country with strong implementation capacity, the main benefits of a development project lie more in the introduction of modern technologies and institutional strengthening than in simply expanding forest production. 2. Forest management innovations need to be supported by evidence of technical, financial, environmental, and economic advantages. 3. Significant components relying on financing from other sources should be based on clear indications of the availability of these funds, or should be designed flexibly so that independent activity is possible in the event the funds do not materialize. 4. Financial sustainability should be central to the design of institutional development components. 5. Proactivity in addressing emerging problems early and with the right skills and reaching agreement on action is important to avoid persistent implementation problems.

8. Audit Recommended?  No


9. Comments on Quality of ICR:

Exemplary in most respects. It covers the issues thoroughly and thoughtfully. Weak areas are the Future Operations section and the economic analysis section, where it is difficult to trace the ERR figures quoted. There is no discussion of, or plan for, M&E for future operation which is particularly relevant for an environment-related project with uncertain sustainability.

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