Wood energy II project
   Report No: ; Type: Report/Evaluation Memorandum ; Country: Malawi; Region: Africa; Sector: Forestry; Major Sector: Agriculture; ProjectID:
                                                                                                                                    P001630


Malawi : Wood Energy II Project (Loan 2670-MAI)

The Project Completion Note (PCN) on the Malawi Wood Energy II Project (Loan 2670-MAI approved in FY86)
was prepared by the Africa Regional Office. The US$16.7 million loan for this project was closed on March 13,
1989, with an undisbursed balance of US$15.9 million.

The objective of the project was to reduce the gap between sustainable fuelwood supply and demand by increasing
fuelwood production and improving utilization efficiency, as part of a long-term wood energy program. Project
components included: (i) increasing fuelwood production through supporting the planting of trees by small farmers
and the establishment of Government fuelwood plantations in ecologically fragile areas, where further depletion of
existing forest resources would have a significant negative impact on the local environment or on endangered
wildlife; (ii) reducing fuelwood consumption by introducing more efficient charcoal kilns and household stoves; and
(iii) technical assistance to develop policy instruments and incentives to encourage tree plantings on a national
basis, and to support institutional development, research and training.

Both the Bank and the Borrower strongly supported the objectives of the Project. However, Malawi's external debt
situation deteriorated, and neither the Bank nor the Government considered it prudent to continue financing the
project under IBRD terms and conditions. The project was, therefore, folded into the IDA financed Energy I Project,
which was approved by the Board on March 14, 1989, and is still under implementation.

The Operations Evaluation Department (OED) will evaluate its outcome, sustainability and institutional
development impact in the context of the ICR for the Energy I Project. Bank performance until closure of this loan
is rated as satisfactory.