|1. Project Data:
ICR Review Date Posted:
|Bosnia and Herzegovina|
|Forest Development & Conservation Project
Project Costs(US $M)
Loan/Credit (US $M)
|Agriculture and Rural Development
Cofinancing (US $M)
|Italian Government; FIRMA (funded from USAID and SIDA)
Board Approval Date
|Forestry (50%), Central government administration (50%)|
|Other environment and natural resources management (29% - P)
Land administration and management (29% - P)
Environmental policies and institutions (14% - S)
Rural non-farm income generation (14% - S)
Other public sector governance (14% - S)|
||ICR Review Coordinator:
|John R. Eriksson
||George T. K. Pitman
|2. Project Objectives and Components:|
a. Objectives:The Development Credit Agreement, dated July 7, 2003, for the Forest Development and Conservation Project states the project development objective was:
"... to assist with the Borrower in the implementation of reforms in forest organization and management, both at the Entity and canton level" (p.16).
The Project Appraisal Document, dated May 14, 2003, states the objective was:
".. to assist with the implementation of legislated reforms in forest organization and management, which are expected to increase revenues from forest resources, improve forest management, and enhance biodiversity conservation through participatory approaches in forest land use planning" (p.3).
This IEG assessment uses the Credit Agreement's statement of the objective as it is more concise and evaluable.
b. Were the project objectives/key associated outcome targets revised during implementation?
c. Components: The project had four components but components 2 and 3 were modified at Mid-Term Review (MTR). In addition, some subcomponents were specific to the states comprising Bosnia-Herzegovina, Republika Srpska and the Federation of Bosnia-Herzegovina (which is composed of ten cantons).
1. Accelerating the implementation of new legal, institutional and economic frameworks (US $2.54 million, including US $0.82 additional financing in 2007; actual total disbursed was US$2.54 million).
A. Supporting the sector's institutional reforms. Assist both Entities, largely through technical assistance (TA) and training, in implementing new legal and institutional frameworks to set up a modern forest management regime to help ensure the sustainable use and protection of forest resources, leading to an autonomous and self-financing forest sector competitive at European levels. In the Federation support was to be provided at the cantonal and Federation levels to strengthen newly created Cantonal Forest Offices, finalization of contracts between cantonal forestry ministries and Cantonal Forest Companies, as well as support to forest guards and inspectors to improve transparency and forest governance. In Republika Srpska the sole forest company, Srpske Sume, would receive tailored training packages similar to those for the Federation.
2. Strengthening of Technical Capacity for Sustainable Forest Management (US $5.66 million, including US $3.05 million additional financing in 2007; actual total disbursed was US$5.66 million).
B. Improving the economic and financing framework. Improve financial management and forest sector revenue generation, while assuring sustainable forest management practices. Technical assistance, training, study tours, workshops, and software were to be funded in both Entities in the following categories:
(a) Financial flows: Review of accounting procedures, comparing them with good practices, and consolidating information at the Entity level.
(b) Alternative financing options: Rather than from business taxes, explore funding Cantonal Forest Officers directly from the budget or from a fund financed from timber sales.
(c) Timber marketing: Improve timber pricing, the assortment of timber products and market information to reflect international best practices.
(d) Non-timber Forest Products: Support activities to increase forest revenues through management of non-timber forest products and designation of forest non-timber product use.
This was to facilitate implementation of economically and environmentally sound forest management in Forest Management Units in both Entities, including technical instruments to ensure monitoring and sustainable use. It was also aimed at helping Bosnia-Herzegovina to develop National Standards to provide sustainable forest management and forest certification.
A. Development of a GIS-based (Geographic Information System) Forest Management Information System. Provide TA, equipment and training to develop, establish and maintain a forest management information system to be used as a tool in the field and in head offices for planning, management, monitoring and supervision of forest operations. The management system was to cover all public and private forests where ownership is formally registered.
B. Implementation of a State Forest Inventory. Carry out over a 2-year period in both Entities, in synergy with development of the forest management information system, an independent inventory to improve the quality of state forest resource data and provide a basis for forest monitoring, forest strategy and priority setting for forest research and development. Information on critical forest ecosystems was to be supplied to provide a base line for forest and biodiversity conservation.
3. Promoting Biodiversity and Forest Conservation in Both Entities (US $0.78 million Italian Government Grant; no additional financing; actual total disbursed was US$0.78 million).
This was to support both Entities to leverage the country’s landscape and biodiversity endowment into expansion of protected areas (PAs). This component was to be fully funded by an Italian Government grant that was intended to pave the way for a GEF project on biodiversity conservation and PAs. Three complementary sets of activities were to be developed:
4. Project Implementation, Monitoring and Evaluation (US $1.07 million, including US $0.60 million additional financing in 2007; actual total disbursed was US$1.07 million).
A. Development of a National Biodiversity Strategy. The institutional arrangements planned for developing and implementing the Strategy were to build on the National Environmental Action Plan. A wide range of participatory processes and stakeholder groups were be to be utilized.
B. Drawing up of proposals for a country-wide protected area network. Several workshops were to be held to agree on a first draft national PA network. GIS mapping and ground-truthing under the State Forest Inventory were to provide detail for longer-term PA planning. These activities were expected to take at least 18 months.
C. Setting up procedures for a comprehensive consultation process for protected area establishment. A broad stakeholder community comprised of a number of public sector levels, civil society and the private sector was to participate in the decision process for establishing new PAs, drawing on best practices locally and internationally. Field-testing was to be undertaken in an area proposed as a National Park (Igman-Bjelasnica).
Project management was undertaken by two small Project Implementation Units (PIUs) within each of the two Entity Ministries responsible for forestry. Permanent staffing was to include two PIU directors each supported by an administrative assistant. This component was also to strengthen donor coordination around the national forest agenda and examine the feasibility of harmonizing donor procedures. The PIUs were to be responsible for monitoring progress based on indicators developed during project preparation and provide quarterly implementation reports and activity plans in a format acceptable to the Bank.
d. Comments on Project Cost, Financing, Borrower Contribution, and DatesProject Costs. Through the amended Credit Agreement of 8-31-2007 an IDA Credit in the amount of US $3.35 million was added to the original 2003 IDA credit of US $ 3.74 million.
Financing: The original IDA credit approved in June 2003 was US$3.74 million. By project closing in November 2010 this had increased to US$4.30 million as a result of SDR appreciation against the US$. For the same reasons, the amount actually disbursed was US$4.19 million. The additional credit of US$3.35 million, approved in June 2007 similarly appreciated to US$3.66 million. At closing US$2.69 million of the additional financing was disbursed and US$0.88 million was cancelled. The Government of Italy cofinanced the project with a grant of US$0.78 million equivalent, 30% more than planned.
Borrower Contribution: Originally Bosnia-Herzegovina planned to contribute US$0.75 million and at the time of additional financing this was increased by US$1.43 million. By project closing, this was US$2.27 million or 302% more than planned.
Dates: In anticipation of the additional IDA credit, the project closing date was extended 45 months, from February 28, 2007, to November 30, 2010.
|3. Relevance of Objectives & Design:|
a. Relevance of Objectives:Substantial. For Bosnia-Herzegovina, objectives are not only fully consistent with national forestry and environmental management priorities but also helped shape them (ICR p.9). Indirect evidence of relevance to the Government is provided by an ICR statement that Component 3 of the project "would respond to government commitments to leverage the country’s unique landscape and biodiversity endowment to expand protected areas and increase opportunities within them" and that "throughout the Project, government ownership and commitment was good" (ICR pp.5,8). However, no specific Government documents are cited in support of these statements.
At project preparation the objectives reflected the strategic objectives of the Country Assistance Strategy and continued to be relevant to the FY08-FY11 Country Partnership Strategy priorities for governance and natural resource management. The Partnership Strategy cites this forest project under its first Pillar dealing with private sector led growth and convergence to Europe. The project is cited again under environmental protection to improve governance, transparency and support tourism (ICR pp.24, 28). Thus, while some evidence is provided to support the relevance of the objectives to the Bank, specific evidence of relevance to Government priorities is lacking.
On the other hand, the ICR makes a strong case regarding the relevance of forest resources to the economy and development of Bosnia-Herzegovina. Following the project Midterm Review (MTR) in December 2005, the project team adopted the Credit Agreement's definition of the objective although the ICR notes that this was not treated as a formal restructuring at the time, since the legal agreements remained valid and the objective as stated in the PAD was unchanged. However, some project activities were "reassessed and refined" (p.3). A Project Paper of May 10, 2007 (p.2) obtained Board approval on a non-objection basis for additional financing to meet financing gaps for certain project components but did not seek approval for modification of the objective and instead reiterated the Credit Agreement's formulation.
b. Relevance of Design:Modest. There was no results framework in the PAD so it is not possible to assess project objectives against it. There is a retrofitted "Results Framework" in Annex 2 of the ICR (pp.25-26) but it lacks precision. The framework reveals that at the time of project effectiveness no expectations or targets had been set at the intermediate level for achieving results (e.g. for training). These were added later and further refined after the MTR. The ICR (p.8.) states: "The Project was designed with ambitious indicators and an unclear notion of methodology for monitoring progress, outcomes or impacts". It indicates that by the MTR these deficiencies were recognized, in particular, that the financing and time needed to "complete the consultative and implementation process" were not sufficiently anticipated (pp.6-7). While the first project component was judged to be largely on track, targets for the second component were reduced to: (1) an incremental approach for the Forest Management Information System, including basic computerization and organizational reforms; and (2) completion of the Inventory's first phase, covering some 5–10 percent of the total area. This information would provide lessons and data to develop a plan for the full second phase, which was estimated to cost at least US$2-3 million. This was more than four times the original estimate of about US $0.66 million as it was based on other country experience and the mountainous terrain of Bosnia-Herzegovina.
Pursuant to the MTR, the third component was re-focused on site-specific analyses and frameworks for PAs and high conservation value forest areas, which in turn were expected to contribute to the design of the new Forest Management and Protected Areas Project in 2008. The Component was closed 11-30-07 and was not included as a component financed by the additional IDA resources under the project.
|4. Achievement of Objectives (Efficacy) :|
Assist with the Borrower in the implementation of reforms in forest organization and management, both at the Entity and canton levels: Substantial.
Reforms in Forest Organization
Reforms in forest administration were to be implemented and operational in the two Entities. More effort was required in the Federation and its cantonal forest offices since they were starting from a less developed stage than in the Republic Srpska, although training was also provided in the latter Entity. The ICR claims a positive role for the project, noting a new forest law in the Republic Srpska but the need for further work in the Federation. It asserts that the project helped Bosnia-Herzegovina as a whole to develop sustainable forest management certification as a result of:
- advancing the legal and institutional framework needed for good forest management
- creating the capacity to plan and implement transparently
- supporting institutional and regulatory framework reforms, and
- strengthening operational capacity of the different forest agencies
It is fairly clear from different passages in the ICR that forest administration in general was strengthened and that such units as Cantonal Forest Offices and Cantonal Forest Comapnies were established in the Federation. Considerable training was provided as well as TA for the development of plans and strategies. Unspecified corporate governance improvements and compliance with forest certification were said to be realized. But specific evidence of these achievements is not always cited nor is it always clear to what extent these developments can be attributed to the project.
The ICR does give specific evidence on the achievement of forest management certification, which is seen as one aspect of reform of the legal and institutional framework. In February 2009, Republic Srpska achieved certification for all of its forests, winning international recognition. Several Federation cantonal enterprises had begun the certification process with 55,000 ha certified and an additional 405,000 ha underway. The project team stresses the importance of these achievements, but the ICR does not indicate their significance in the Federation relative to total needs (pp.10-11).
The second part of the reform program calls for separation of the economic and administrative functions in forest management enterprises. The Results Framework reports that the separation of these two functions was completed in both Entities and in the Federation cantons. This is seen as an important step in reducing the opportunity for corruption, thereby improving governance. This achievement is also emphasized by the Task Team.
Reforms in Forest Management
Although it took almost eight years (as opposed to the original four) to complete the two activities that were deemed critical to achieving forest management reform, they were largely achieved.
(1) State Forest Inventory. This got off to a slow start mainly because of disagreement about the methodology to be used. After agreement was reached and financing for the full inventory was confirmed, the field survey and assessment work were completed by October 2009 (ICR, p.20). Among reported key results are:
The inventory methodology also aimed to combine assessment of forest resources with priorities for ecosystem protection. During the second phase of financing, there was some indication that (1) forest resources assessment and (2) priorities for ecosystem protection were integrated. The ICR Data Sheet Results Framework (p.v) indicates that inventory data were being used for strategic and operational planning in forestry sector.
- Bosnia-Herzegovina forest cover was 18 percent larger (3.2 million ha) than the previous official estimate of 2.7 million ha.
- Forests were in better condition than previously estimated (550 million cubic meters compared with 350 million cubic meters of standing volume).
- There was a potential total sustainable annual yield of 11 million cubic meters instead of 6 million (ICR p.10).
(2) Forest Management Information System. Variable capacity was a significant constraint on implementation. The project aimed to develop, introduce and operationalize the system in Republika Srpska and at least 5 Federation Cantons. This task was a particular hurdle in some cantons of the Federation. The second phase, beginning in 2006, aimed to develop a platform for a web-enabled GIS adapted to accommodate the reporting and planning needs of cantonal forest management companies. The ICR concludes that the project succeeded in helping develop well-functioning forest management information systems (pp.21-22). The ICR Data Sheet "Results Framework" (p.iv) indicates that the Republic Srpska and 3 Federation cantonal enterprises have "fully operational business MIS and have initiated use of some GIS applications." As noted above, no targets are given in the Framework for this indicator. The project team points out that three of the ten cantons in Federation had few if any forests, and the remaining four are said to be making progress toward establishing an operational MIS.
The main text of the ICR says nothing about efficiency except to note that neither the PAD nor the ICR estimate an economic rate of return since "an ERR would be impossible to estimate in the conventional way" (p.11). An Annex 3 is alluded to as providing "a few observations ... on the anticipated project benefits and costs." This annex begins by stating that: "as a technical assistance project, the project did not require a detailed quantitative economic or financial analysis" (p.29). The Task Team argues that ICR guidance supports the decision not to include efficiency analysis. However, the draft Guidelines for Review of ICRs of September 2010 clearly state that efficiency is assessed for "investment-type operations, including technical assistance loans, but not development policy operations" (p.22, italics added). The Bank's ICR Guidelines of 2006 indicate that efficiency analysis is required "for IL(investment loans) and GEF only" (p. 24). However, investment loans include TA loans, as cited in the above-mentioned ICR Review Guidelines. Accordingly, the IEG Review will assess and rate efficiency.
Even though it is not possible to refer to an ERR, there are other indicators of the extent to which the resources devoted to this project were proportional to the benefits derived; i.e., the extent to which there was value for money.
A key consideration regarding efficiency in the use of resources is that both the project closing date and the total cost were almost doubled. The interval between approval on 06-10-2003 and planned closing on 02-28-2007 was about 47 months, whereas the actual closing on 11-30-2010 resulted in a total project duration of about 92 months. Total project cost increased from a planned level of US $5.09 million to a final total of $10.05 million. The discussion on achievement of sub-objectives in Section 4 indicates that even with the near doubling of resources and time, it is not clear that some targets were achieved and in other cases where there was progress (e.g. Inventory and Forest Management Information Systems) targets were not fully achieved in spite of the reduction of some targets.
As noted above, the purpose of the "Economic and Financial Analysis" in ICR Annex 3 was to provide "a few observations...on the anticipated project benefits and costs." This one-page annex lists four findings to demonstrate the cost-effectiveness of the project. But these examples are either prospective, indicating what the PAD expected to be achieved in the future, are solely input-oriented or assertion-based (e.g. asserting that the 100 training programs "have had a substantial and lasting impact on the quality of staff work" (ICR p.29)).
Efficiency is rated as modest with significant shortcomings.
a. If available, enter the Economic Rate of Return (ERR)/Financial Rate of Return at appraisal and the re-estimated value at evaluation:
* Refers to percent of total project cost for which ERR/FRR was calculated