Document of The World Bank FOR OFFICIAL USE ONLY Report No: PAD2612 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PROJECT PAPER ON A PROPOSED ADDITIONAL FINANCING IN THE AMOUNT OF EURO 12.00 MILLION (US$ 14.89 MILLION) TO THE REPUBLIC OF BELARUS FOR A Belarus Forestry Development Project - Additional Financing February 21, 2018 Environment & Natural Resources Global Practice Belarus, Moldova and Ukraine Country Unit Europe And Central Asia Region 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 January 31, 2018) Belarusian Ruble Currency Unit = (BYN) Euro 1 = BYN 2.46 FISCAL YEAR January 1 - December 31 Regional Vice President: Cyril E Muller Country Director: Satu Kristiina J. Kahkonen Senior Global Practice Director: Karin Erika Kemper Practice Manager (Acting): Ruxandra Maria Floroiu Task Team Leader(s): Andrew Michael Mitchell, Vladislava I. Nemova ABBREVIATIONS AND ACRONYMS AF Additional Financing BYR Belarusian Ruble (currency) CPF Country Partnership Framework DA Designated Account ECA Europe and Central Asia EIA Environmental Impact Assessment EMP Environmental Management Plan ERR Economic Rate of Return ESMP Environmental and Social Management Plan EXACT Ex Ante Carbon Accounting Tool FAO Food and Agriculture Organization FDP Forestry Development Project FM Financial Management GEF Global Environment Facility GHG Greenhouse Gas GRS Grievance Redress Service ha Hectare IBRD International Bank for Reconstruction and Development IFR Interim Financial Report IRR Internal Rate of Return MOF Ministry of Forestry NPV Net Present Value PDO Project Development Objective PIU Project Implementation Unit PPSD Project Procurement Strategy for Development RF Results Framework STEP Systematic Tracking of Exchanges in Procurement SCF Standard Conversion Factor SFE State Forest Enterprise WB World Bank WBG World Bank Group The World Bank Belarus Forestry Development Project - Additional Financing (P165121) BASIC INFORMATION – PARENT (Forestry Development Project - P147760) Country Product Line Team Leader(s) Belarus IBRD/IDA Andrew Michael Mitchell Project ID Financing Instrument Resp CC Req CC Practice Area (Lead) P147760 Investment Project GEN03 (9271) ECCEE (1607) Environment & Natural Financing Resources Implementing Agency: Ministry of Forestry, BellesExport ADD_FIN_TBL1 Is this a regionally tagged project? No [ ] Situations of Urgent Need or Bank/IFC Collaboration Capacity Constraints No [ ] Financial Intermediaries [ ] Series of Projects Original Environmental Approval Date Closing Date Current EA Category Assessment Category 27-Mar-2015 31-Aug-2020 Partial Assessment (B) Partial Assessment (B) Development Objective(s) The Project Development Objective is to enhance silvicultural management and reforestation and afforestation, increase the use of felling residues and improve the public good contribution from forests in targeted forest areas. Ratings (from Parent ISR) RATING_DRAFT_ NO Implementation Latest ISR Feb 21, 2018 Page 1 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) 29-Jun-2015 02-Dec-2015 01-Apr-2016 25-Oct-2016 18-Apr-2017 30-Oct-2017 Progress towards achievement of S S S S S S PDO Overall Implementation S S MS MS S S Progress (IP) Overall Safeguards S S S S S S Rating Overall Risk M M M M M M BASIC INFORMATION – ADDITIONAL FINANCING (Belarus Forestry Development Project - Additional Financing - P165121) ADDFIN_TABLE Additional Financing Urgent Need or Capacity Project ID Project Name Type Constraints P165121 Belarus Forestry Cost Overrun, Scale Up No Development Project - Additional Financing Financing instrument Product line Approval Date Investment Project IBRD/IDA 14-Mar-2018 Financing Projected Date of Full Bank/IFC Collaboration Disbursement 31-Aug-2021 No Is this a regionally tagged project? No [ ] Situations of Urgent Need or Capacity Constraints [ ] Financial Intermediaries [ ] Series of Projects PROJECT FINANCING DATA – PARENT (Forestry Development Project - P147760) Feb 21, 2018 Page 2 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) Disbursement Summary (from Parent ISR) Net Source of Funds Total Disbursed Remaining Balance Disbursed Commitments IBRD 40.71 22.52 18.19 55 % IDA % Grants 2.74 0.58 2.16 21 % PROJECT FINANCING DATA – ADDITIONAL FINANCING (Belarus Forestry Development Project - Additional Financing - P165121) FINANCING DATA (US$, Millions) FIN_SUMM_NEW SUMMARY Total Project Cost 14.04 Total Financing 14.04 Financing Gap 0.00 DETAILS PUB_FIN_DETAIL Counterpart Funding 0.04 Borrower 0.04 International Bank for Reconstruction and Development (IBRD) 14.00 COMPLIANCE Policy Does the project depart from the CPF in content or in other significant respects? [ ] Yes [ ✔ ] No Does the project require any other Policy waiver(s)? [ ] Yes [ ✔ ] No Feb 21, 2018 Page 3 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) INSTITUTIONAL DATA Practice Area (Lead) Environment & Natural Resources Contributing Practice Areas Climate Change and Disaster Screening This operation has been screened for short and long-term climate change and disaster risks Gender Tag Does the project plan to undertake any of the following? a. Analysis to identify Project-relevant gaps between males and females, especially in light of country gaps identified through SCD and CPF Yes b. Specific action(s) to address the gender gaps identified in (a) and/or to improve women or men's empowerment Yes c. Include Indicators in results framework to monitor outcomes from actions identified in (b) Yes PROJECT TEAM Bank Staff Name Role Specialization Unit Team Leader (ADM Andrew Michael Mitchell Forestry GEN03 Responsible) Vladislava I. Nemova Team Leader Natural Resources GEN03 Procurement Specialist (ADM Alexander Balakov Procurement GGOPC Responsible) Financial Management Irina Babich FM GGOEE Specialist Aimonchok Tashieva Social Safeguards Specialist Social GSU03 Feb 21, 2018 Page 4 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) Environmental Safeguards Arcadii Capcelea Environment GEN03 Specialist Hanna Shvanok Team Member Operations ECCBY Luis M. Schwarz Team Member Disbursement WFACS Luz Meza-Bartrina Counsel Legal LEGLE Natural Resource Nina Rinnerberger Team Member GEN03 Management Extended Team Name Title Organization Location Kairat Nazhmidenov Economist Bishkek Food and Agriculture Louis Bockel Policy Support Officer Organization of the United Na Feb 21, 2018 Page 5 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) REPUBLIC OF BELARUS BELARUS FORESTRY DEVELOPMENT PROJECT - ADDITIONAL FINANCING TABLE OF CONTENTS I. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING ........................................ 7 II. DESCRIPTION OF ADDITIONAL FINANCING .................................................................... 13 III. KEY RISKS ..................................................................................................................... 15 IV. APPRAISAL SUMMARY .................................................................................................. 16 V. WORLD BANK GRIEVANCE REDRESS MECHANISM ......................................................... 20 VI. SUMMARY TABLE OF CHANGES .................................................................................... 21 VII. DETAILED CHANGE(S).................................................................................................... 21 VIII. RESULTS FRAMEWORK AND MONITORING ................................................................... 26 Feb 21, 2018 Page 6 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) I. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING A. Introduction 1. This Project Paper seeks the approval of the Executive Directors for provision of an Additional Financing (AF) loan in the amount of EURO 12.00 million to the Republic of Belarus in support of the Forestry Development Project (FDP) (P147760). It also seeks the Executive Directors’ approval to: (i) address a financing gap and scale up investments in forest nurseries and some low-impact forest harvesting equipment and (ii) amend the Results Framework to reflect the additional activities and investments supported under the proposed AF. 2. The Project’s Development Objective (PDO) is to enhance silvicultural management and reforestation and afforestation, increase the use of felling residues and improve the public good contribution from forests in targeted forest areas. The PDO will not be revised as it remains relevant and achievable under the proposed AF. 3. The AF will help finance the costs associated with the scale-up of selected activities (particularly investments in nurseries and forestry machinery/forwarders) initiated under the original project, which will strengthen the developmental impact of the FDP. The proposed AF will also address a gap in financing for some of the activities under the original project that resulted from Government budget constraints due to recent macro-economic imbalances. There will be no new type of activities introduced and the project design and implementation arrangements will remain the same. The implementation period is three years with the closing date on August 31, 2021. B. Original Objectives, Design and Scope 4. Belarus is one of the most forested countries in the Europe and Central Asia region (sixth out of 30 countries) with forest cover of 8.1 million hectares, accounting for nearly 39 percent of the territory (in comparison to 18 percent in 1944). Forests provide multiple environmental goods and services including carbon sequestration and storage, raw material to forest industry, employment in the forest and forest products industries, woody biomass for generation of heat and power, and non-timber forest products for both commercial production and subsistence consumption by local communities. In 2016, the forestry sector contributed 2.7 percent to GDP. However, in more developed forest based economies (e.g. most of Scandinavia and Canada) contribution to GDP is higher, indicating that there is further potential for growth of the forestry sector in Belarus. 5. The FDP was designed to support Belarus strengthen its forestry sector by modernizing some forestry operations, improving the public goods function of forests, and increasing its contribution towards a more prosperous and dynamic rural sector through creating desirable skilled or semi-skilled employment opportunities. The World Bank Board of Executive Directors approved the project for a loan in the amount of US$40.71 million and a grant from the Global Environment Facility (GEF) Trust Fund in the amount of US$2.74 million on March 27, 2015. 6. The Project has three components: Component 1: Improvement of Silviculture and the Sustainability of Forest Management Feb 21, 2018 Page 7 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) Improving silviculture and forest management effectiveness through, inter alia: • the increased intensity of silviculture activities by thinning of young and middle-aged stands through the provision of necessary equipment (including harvesters and forwarders), and including the carrying out of training.; • the development of the use of woody biomass from logging residues to enhance the forest management productivity through the provision of necessary equipment (including heavy duty chipper machines); and • the improvement of forest nurseries for afforestation and reforestation through the modernization of selected forest nurseries through, inter alia: (i) carrying out of civil works including construction of greenhouses, warehouses, cold stores, wells and water storage facilities (ii) the provision and installation of new seeding lines, greenhouses, cooling machinery and watering systems; (iii) the provision of other forest nursery equipment, and (iv) the carrying out of training. Component 2: Improvement of Forest Fire Prevention, Monitoring, Detection and Suppression Reducing the incidents of forest fire hazards through, inter alia: • the enhancement of the Borrower’s capacity to respond to fire incidents through, inter alia: (i) the carrying out of public awareness activities; (ii) the development of a fire- fighting zone system; and (iii) the carrying out of an inventory of depleted peat lands; • (i) the strengthening of fire detection and monitoring measures through the provision of the necessary equipment; and (ii) the enhancement of communication mechanisms among state-owned forestry enterprises; and • the improvement of fire suppression efforts through the provision of: (i) modern fire- fighting vehicles; and (ii) other modern fire-fighting equipment. Component 3: Capacity Building for Sustainable Forest Management. Strengthening the Borrower’s capacity for sustainable forest management through, inter alia: • the facilitation of an enabling environment for sustainable forest management through, inter alia: (i) the review and update of the Borrower’s forest policy and legal framework and forestry sector strategy; (ii) the development of the necessary methods and techniques to improve the biological and landscape diversity in forest management, including through the piloting of trial new silvicultural approaches; and (iii) the carrying out of training activities to raise awareness of state-owned forestry enterprises on international best practices in the forestry sector; • the strengthening of the forest management information system and forest management planning capacity through, inter alia: (i) the provision of equipment; (ii) the development of a web-based interface for sharing information among relevant forest sector stakeholders; (iii) the development of a geo-information system-based map and database of potential forestry carbon (non-Project) investments; • the use of advanced forest management technologies through the provision of training; Feb 21, 2018 Page 8 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) • (i) the design and implementation of a monitoring system of radiological conditions of forests in the Borrower’s territory; and (ii) the strengthening of the existing system of protective measures of radiological monitoring activities; and • the provision of support for the implementation, monitoring and evaluation of the Project, including: (i) the carrying out of the Project audits; and (ii) the implementation and supervision of site specific Environmental and Social Management Plan (ESMP). 7. The original scope of the project envisioned modernizing four nurseries (sub-component 1.3.) through the supply of equipment and materials, with the building works and installation of the machinery to be undertaken with Government funding. However, due to a shortage of funds it became necessary to also include the civil works and installation services within the remit of the loan financing, which has resulted in a financing gap. 8. In addition, for silvicultural thinning in young and middle-aged stands (sub-component 1.1.) it was originally intended to procure and use some of the new harvesters (machines which fell the trees, remove the branches and tops and cross-cut the logs into the required lengths) in combination with older tractor trailer units, to extract the felled timber to roadside. However, implementation has now shown that more agile machinery is needed, requiring the procurement of additional forwarders (low impact purpose designed machines, which extract the logs from the forest to roadside). To address these issues, the AF will support strengthening and expanding sub-components 1.1. and 1.3. C. Project Progress to Date 9. The FDP became effective on July 30, 2015 and is now in its third year of implementation. Overall project implementation has maintained either a Satisfactory or Moderately Satisfactory rating, while progress towards achieving its PDO was continuously Satisfactory from the start of the project. Procurement is now Satisfactory, following the initial low disbursement due to the Project Implementation Unit's (PIU) limited procurement capacity and the complicated nature of the international competitive bidding required for the forestry harvesting machinery. A procurement post review (conducted in December 2016) found that all the contracts reviewed were procured and implemented in accordance with the agreed provisions of the Loan Agreement. 10. Regular implementation support missions have been undertaken since June 2015 to work with the project’s implementing agencies to review activity progress, including staffing of the PIU, procurement plans, and steps and timeline for implementing the GEF grant. The Project is in compliance with key loan covenants, including audit and financial management reporting requirements. 11. As of January 30, 2018, the FDP had disbursed US$ 21,5 million (53 percent of the loan), with US$ 37.6 million (92 percent) committed. Around 21 percent of the GEF grant (US$ 576 thousand) has been disbursed and 48 percent committed. 12. Essential forestry machinery and equipment has been procured, including: harvesters and forwarders (142 units including an additional six heavier duty harvester and forwarder units to strengthen the capacity of forestry enterprises to cope with the clearing of the windblown timber arising from the catastrophic storms of July 2016); mobile wood chippers; forestry equipment for mechanized cleaning of felling areas from felling waste (branches and tops left after harvesting); forest fire protection and Feb 21, 2018 Page 9 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) response equipment, such as all-terrain light water tankers and/or transportation of personnel/forest guards, and video surveillance systems designed for monitoring and early detection of fires. In addition, the first three new forest nursery complexes, in Ivatsevichi Forest Enterprise (Brest Oblast), Glubokoye Experimental Forest Enterprise (Vitebsk Oblast), and in Minsk Oblast have now been tendered. Construction at the Ivatsevichi nursery began in June 2017 and works are progressing according to schedule (completion is expected during the first half of 2018). Construction commenced at the Glubokoe Forest Experimental Enterprise and the nursery complex (Republican Forest Selection and Seed Center) in Minsk Oblast in September 2017. GEF investments include four simulators for training harvester and forwarder operators, equipment enhancing the nursery infrastructure, specialized equipment for forest fire detection, prevention and suppression, and a number of important technical assignments to improve forest management capacity. 13. Progress towards achievement of the PDO is being monitored and reported by the PIU through its bi- annual progress reports. Table 1 reflects the progress to date. Table 1. Progress Towards Achievement of PDO The PDO is to enhance silvicultural management and reforestation and afforestation, increase the use of felling residues and improve the public good contribution from forests in targeted forest areas. PDO Indicator Baseline Current End Target Current Status Area of young and middle-aged 132,500 151,574.20 165,000 On track with results framework production-forest thinned estimates. according to approved management plans (hectare) Economic performance of 0.00 7 680 000 15,826,000 This indicator measures net participating SFEs enhanced revenue less expenditure (amount, USD) (inclusive of all financing sources) and is on track with RF estimates. Capacity to produce high quality 0 0 4,000,000 The capacity will be increased as seedlings increased (number of the new nurseries are container grown seedlings per commissioned, Ivatsevichi is year) expected in spring 2018. Average utilizable volume of 28.50 33.50 35.00 On track with results framework commercial timber harvested estimates. In fact, current value during intermediate felling in slightly exceeds estimate for year targeted SFEs increased (Cubic 2 of implementation. Meter per hectare) 14. In 2016, Belarus suffered from a catastrophic windblow event that blew over some 14,000 ha (approx. 20,000 football pitches) of forest. The damage was not restricted to forests, but houses and buildings were destroyed, power lines downed and transport disrupted. Belarus frequently suffers from these intense windblow events (and other climate related issues such as damage from snow and freezing rain) and this is likely to increase with climate change. The impact of the storms caused significant financial and economic losses to the forestry sector and increased costs in terms of the recovery and rehabilitation operations. In response to the request from the Minister of Forestry in February 2017, the Bank team obtained additional grant funding from the Global Facility for Disaster Reduction and Feb 21, 2018 Page 10 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) Recovery to help undertake forest rehabilitation and restoration activities. This includes assessing the current losses and improving the economic analysis of the costs of the on-going climate related catastrophic forestry events based on international experience. D. Rationale for Additional Financing 15. The proposed AF supports the Government’s development goals for the forestry sector to increase the efficiency of afforestation and reforestation, and – in the future – increase revenues from forestry activities. The Ministry of Forestry (MOF) and the State Forest Enterprises strongly support the original project and have requested additional financing to respond to a financing gap for some of the activities under sub-component 1.3. and to scale-up some interventions under sub-components 1.1. and 1.3. 16. Covering the financing gap under the original project. The AF will cover the financing gap that resulted from Government budget constraints arising from the recent macroeconomic imbalances. In 2016, the ongoing recession put additional pressure on fiscal accounts. Declining general government revenues (by 6.4 percent in real terms year on year) prompted the government to tighten real spending (by 6.5 percent in real terms year on year) mainly cutting public capital expenditures (by 14.3 percent in real terms year on year). Government state support to enterprises fell from 1.5% of GDP in 2015 to 0.6% of GDP in 2016. 17. Originally, under sub-component 1.3., only the supply of specialized equipment and materials for four nurseries in the Brest, Vitebsk, Minsk and Gomel Oblasts was envisaged under the loan, such as greenhouses, cooling machinery, field irrigation systems, and multifunctional loaders. The building works and installation of the machinery was to be undertaken with Government funding. However, due to the shortage of funds (due also in part to declining revenues due to timber product market conditions and increasing costs) it was agreed between the Government and the World Bank to include the civil works and installation services within the remit of the loan (totaling US$16.67 million). Other options for financing were considered but were not found to be available to the MOF. The AF will now fully cover the funding for the Gomel nursery, including the construction works. 18. Scale-up of investments and restructuring due to financing gap under the Original project. The AF will also scale-up the nursery production by including two more nursery complexes in Mogilev Oblast and Grodno Oblast under sub-component 1.3. (six nurseries in total, one for each Oblast in Belarus). The production from all six nurseries is required, partly to increase the efficiency and cost saving of afforestation and reforestation activities and partly to address the need to improve forest structure (in terms of both species mix and age class distribution) as a response to changing climatic conditions and to make the forest more resilient to climatic (e.g. wind blow, snow/ice damage), pest (e.g. bark beetle infestations), and other stresses (e.g. forest fires). Also, the sectorial programme for growing container grown planting material in the organizations of the Ministry of Forestry (adopted on May 30, 2014) stipulates an increase in container grown seedlings from currently 2 percent to 30 percent by 2020. The additional nurseries will help increase the capacity of State Forestry Enterprises to produce high quality, container grown seedlings. The increased nursery capacity will help provide the planting stock necessary for rehabilitation of windblown and other damaged forests and support Belarus in the design and management of more climate resilient forests. Feb 21, 2018 Page 11 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) 19. The AF will also procure reusable cartridges for container grown seedlings that are needed for the new nurseries. These cartridges are part of the additional capital investment required. Replacement of the cartridges over time will be part of the annual operation and maintenance costs to be funded by the enterprises own budgets. Overall, container grown planting material offers a number of advantages (e.g. shorter growing time in the nurseries, a longer planting out season; higher survival rates; reduced need for replacing failures and lower weeding costs) and it allows for a lower density of planting (around 2,700 seedlings per hectare – down from more than twice this, thus realizing considerable savings). Higher survival rates and reduced spacing will have a number of benefits: it will improve stand structure allowing the trees more space to grow into, making the stands more stable in later years; allow more light to hit the forest floor encouraging a more diverse ground flora in the initial years, providing benefits to biodiversity; and reduce the need for early thinning to waste. 20. Under sub-component 1.1. of the original loan, 74 harvesters and 52 forwarders designed to undertake first and young to medium age thinning operations were procured. It was originally intended to use harvesters with older tractor trailer combinations but during implementation these were found not to be sufficiently agile in all situations. This machinery needs to be lightweight and maneuverable to move in between the crop trees to be left after the thinning operation. Once the machines were used, it was found that the best combination of machinery was to use one lightweight harvester in tandem with a lightweight forwarder. As fewer forwarders than harvesters were ordered, there is a shortfall in the number of forwarders. The AF will address this shortfall in the most urgent cases by procuring two additional forwarders. 21. Overall, the AF will expand the impacts of the FDP in terms of improved forest nurseries and production of seedlings and support the achievement of other project indicators (area thinned, and volume of thinnings removed during harvesting). 22. Cascade Approach: The World Bank Group (WBG) is intensifying and systemizing its commitment to Maximizing Finance for Development (MFD). The March 2017 Forward Look – A Vision for the World Bank Group in 2030 – Progress and Challenges, introduced the “Cascade Approach" as a concept to guide the WBG’s efforts to leverage the private sector for growth and sustainable development. This approach seeks to help countries maximize their development resources by drawing on private financing and sustainable private sector solutions to provide value for money and meet the highest environmental, social, and fiscal responsibility standards, and reserve scarce public financing for those areas where private sector engagement is not optimal or available. 23. In Belarus, there is good private sector involvement in the wood haulage and wood processing sectors. There are well established large scale investments in timber processing, and board (e.g. chipboard, plywood, medium density fiberboard), pulp and paper production, much of which is exported. The project therefore supports this commercial sector by helping the state forest enterprises sustainably produce raw materials for the industry. Forest management however is solely a function of the state. There are no large-scale forest nursery production facilities in the private sector in Belarus (apart from a few small garden centers geared for the production of ornamental plants for sale to the public). Indeed, even in Western Europe, the control and supervision of seed collection, treatment, production and storage is usually a function of the state (to ensure the purity of provenance, disease control, quality assurance, etc.). The private sector would also find that the investments required are large and with little guaranteed demand for forestry species and sizes, except from the forest enterprises themselves. Feb 21, 2018 Page 12 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) 24. As mentioned in the Belarus Forest Policy Note prepared by the World Bank in 2013, there is scope in the forest harvesting sector for contractors to participate more in harvesting and extraction. The support that the original project and AF is providing however is specifically targeted at harvesting young and small sized timber. These operations are usually done as a silvicultural requirement (often at either break-even or even at a loss), rather than as a commercial operation and thus do not compete with the private sector. The thinning of these younger stands will contribute to making the later thinnings and harvest more interesting commercially. Commercial contractors are much more interested in larger, semi mature thinnings and final harvesting. II. DESCRIPTION OF ADDITIONAL FINANCING A. Proposed Changes. 25. The original PDO will remain unchanged and the AF activities are in line with the original development objective. The only new activities are construction works in the new nurseries and related training. The remaining project design and implementation arrangements will remain the same. The AF is in line with the current and new CPF under development, which includes the cross-cutting theme of environmental sustainability and disaster risk management and supports Belarus’ government programs on green growth, forestry and energy efficiency. 26. Results framework. The project Results Framework (RF) was revised and agreed to reflect the proposed AF investments and scale-up of some activities. The following indicators were adjusted as shown in Table 2: Table 2. RF Indicators original and revised targets Indicator Name Unit Measure Original Target Revised Target Project Development Objective Indicator number of 4 million seedlings 23.7 million Capacity to produce high quality container grown per year seedlings per year seedlings increased seedlings per year Global Environmental Objective Indicator metric tons, CO2- 5,065,508 mt CO2-e 5 245 627 mt CO2-e Amount of carbon (CO2) sequestered equivalent Intermediate Indicator Nursery lines for container grown seedlings of native tree species number 4 6 established Number of people trained number 2,380 3,000 of which female number 145 150 Direct project beneficiaries number 35,000 35,500 of which female percentage 10 17.5 27. Implementation arrangements. No changes will be required under the AF. The MOF, which is the national authority in charge of state forest sector management in Belarus, has the overall responsibility for project coordination and monitoring of implementation progress. The MOF has Feb 21, 2018 Page 13 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) formally delegated the responsibility for managing the day-to-day implementation to the Republican Unitary Enterprise Bellesexport, within which a Project Implementation Unit has been created. B. Additional Financing Scope. 28. Table 3 below shows current and AF costs by sub-component. Specific investments under sub- component 1.1. include the purchase of two multi-purpose forest loading and transportation machines intended for extraction (forwarders) for a total amount of EUR 0.20 million. Under sub- component 1.3., investments will include: • Complex for Cultivation of Container Grown Planting Material, Gomel Oblast (EUR 3.8 million); • Complex for Cultivation of Container Grown Planting Material on the Territory of the Basic Nursery of Mogilev Forest Enterprise (Krasnitsa-2 village, Mogilev region) (EUR 3.3million); • Construction of a Nursery for Cultivation of Container Grown Forest Forming Species' Planting Material in Shchuchin Forest Enterprise, Grodno Oblast (EUR 4.1 million); and • Reusable cartridges for container grown seedlings (EUR 0.60 million). Table 3. Costs by sub-component for the Original Project (US$ million) and the AF (Euro €, million) CURRENT ADDITIONAL LOAN FINANCING Sub-components US$ millions Euro € millions Sub-component 1.1. Development of more intense silviculture specifically optimizing the intensity of 18.55 silvicultural interventions in young and middle- aged stands Two forwarders 0.20 Sub-component 1.3. Improving the quality of seedling production for afforestation and 16.67 reforestation Gomel Oblast Nursery 3.80 Mogilev Region Nursery 3.30 Shchuchin, Grodno Oblast 4.10 Reusable Cartridges 0.60 Total 35.22 12.00 C. Contribution to poverty reduction 29. Many rural areas in Belarus are becoming depopulated with some villages being completely abandoned as people move to urban areas. The proposed AF will contribute towards a more prosperous and dynamic rural sector by creating more desirable skilled or semi-skilled employment Feb 21, 2018 Page 14 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) opportunities for both men and women in rural areas. At the same time, an equal opportunity training program will be implemented to ensure technical and nursery staff can operate the new equipment to be procured. 30. The project and AF are helping to support and increase the sustainable production from the forestry sector, while sequestering carbon and providing habitats for biodiversity as well as other environmental services. As well as producing direct employment opportunities in forestry, the production from the forests is the raw material for significant wood processing, wood energy production, value adding and exports from Belarus. III. KEY RISKS 31. The overall Project risk is rated Moderate. This rating considers risks to achieving the development results based on analysis of each of the risk categories. The risk assessment for the original project will remain relevant to cover implementation risks and mitigation measures under the AF. However, the institutional capacity risks is downgraded from substantial to moderate because the PIU has now gained experience of implementing the FDP. No additional risks are expected as a result of the proposed AF. The Bank task team will continue to monitor potential risks. The risk ratings summary is provided in Table 4. Table 4. Risk Rating Summary Risk Category Rating Political and Governance Moderate Macroeconomic Moderate Sector Strategies and Policies Moderate Technical Design of Project or Program Low Institutional Capacity for Implementation and Moderate Sustainability Fiduciary Substantial Environment and Social Low Stakeholders Low Other / Overall Moderate Feb 21, 2018 Page 15 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) IV. APPRAISAL SUMMARY A. Economic and Financial (if applicable) Analysis 32. The project’s overall cost is currently estimated at US$57.45 million, including the original project (US$40.71 million), GEF grant (US$2.74 million) and AF (US$14.00 million). The economic benefits of the original project estimated during the project preparation included: (i) increasing the intensity of thinning operations; (ii) increasing the utilization of forest production by using felling arisings, which are currently wasted; (iii) reducing costs and increasing survival rates for forestry planting stocks; (iv) reducing the losses from forest fires. They will remain the same under the AF, although some of them will be generated in greater amounts thanks to the additional investments in improved harvesting equipment and forest nurseries. 33. All benefits described above also generate carbon benefits, either through increasing carbon sequestration through increased forest growth, or reducing emissions by substituting use of fossil fuels or reducing carbon released through forest fires. Greenhouse Gas (GHG) accounting was undertaken to both estimate the amount of carbon benefits, but additionally to assess the carbon footprint of the project which is expected to be positive. 34. Based on the GHG emissions accounting, the project net carbon balance is estimated at 5 245 627 tCO2-e of avoided emissions or increased carbon sequestration over the full analysis period (30 years). Assuming a baseline estimate of the social value of carbon of US$66 per tonne on average, this would translate into a net benefit of the project of around US$213 million over a period of 15 years that is covered under the economic analysis. 35. Given the above benefit streams, the base case Economic Rate of Return (ERR) of the combined operations (original project + AF) is estimated at 40.4 percent. The base case Net Present Value (NPV) of the net benefit stream, discounted at 10 percent, is US$78.1 million in economic terms. The underlying economics of the combined operations remain robust and their economic return is higher than that of the original project (ERR 20.1 percent) because the AF investment will contribute to greater generation of the expected economic benefits. If a low estimate of the carbon social price is taken into account, then ERR would be 35.8% with NPV equal to USD 57.3 million; if a high estimate of the carbon social price is taken into account, then ERR would be 44.4% with NPV equal to USD 99.0 million. The project is economically viable without accounting for carbon benefits. 36. A financial analysis assessed the financial viability of the improved technologies and systems promoted by the original project and AF and the increase in incomes and benefits from indicative investments. Conservative assumptions were made both for inputs and outputs. In line with the current Government policy, the models assume a VAT tax rate of 20 percent on local sales. Prices of commodities/inputs reflect annual averages and those actually paid/received by the market players. Several financial models were prepared to identify and quantify benefits deriving from the project investments in improvement of forest thinning, better use of forest biomass and nursery production. 37. Improvement of forest thinning. The financial model, which was prepared during the original project preparation in order to estimate financial return from the investment in improvement of thinning, shows an Internal Rate of Return (IRR) of 47.1 percent over 10-year project period with a positive Feb 21, 2018 Page 16 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) NPV. In general, the original project and AF’s investments in improvement of thinning will generate an incremental benefit stream of about US$8.3. million per year. 38. Improved nursery production. The benefits derived from these investments will be due to the reduced costs and increased survival rates for forestry planting stocks. The financial model which was prepared during the original project preparation demonstrates establishing a nursery with a capacity of about 1.2 million container-grown planting stocks per year. With the AF, the project will invest in six nurseries and each of them will have a production of around 23 million seedlings per year. Apart from purchasing of the seeding lines, greenhouses and cold storages, the investments will also include all the ground and construction works. The economic gains will come from cheaper plants as they will only spend one year in the nursery as opposed to two to three years in the current situation. In addition, the survival will be higher which in turn will lead to lower planting costs because seedlings can be planted at wider spacing. Cost-benefit analysis of the planned investments shows that the IRR on the incremental net benefits is about 14.8 percent with a positive NPV and it is greater than the discount rate (10 percent). This proves that the investments in the nurseries are economically viable. 39. Economic analysis. The period of analysis is 15 years to account for the long-term benefits and phasing periods of the interventions within the original project and AF. The scenario presented in the economic analysis is based on conservative assumptions and estimates. The analysis is indicative and demonstrates the scope of economic profitability originated as a result of the conditions prevailing at the time of the preparation. The analysis attempts to identify quantifiable benefits that relate directly to the activities undertaken following implementation of the project components and activities, or that can be attributed to the project’s implementation. Price estimates for tradable commodities have been based on the World Bank’s Global Commodity Price Projections. All local costs were converted into their approximate economic values using a Standard Conversion Factor (SCF) of 0.8. B. Technical 40. The AF is designed to meet Belarus’ needs in the forestry sector to establish and strengthen forest management techniques that support the multiple goods, services and functions that forests provide. As with the original project, AF investments in the forest nursery component will be from tried and tested standards and will produce higher quality seedlings which will increase viability and survival rates. The specifications for the harvesting machines will be based on modern, but established and well-proven technology, taking into account experience gained during the implementation of the original project. 41. The forest enterprises have a good track record in maintaining and continuing financing of the forestry equipment procured. Indeed, much of the equipment purchased under a previous World Bank loan (which closed in 2003) including a seed treatment plant, is still in use and is still well-maintained. The operation and maintenance costs are met from the Forest Enterprises’ own budgets, much of which is derived from the sale of timber and forest products (including seedlings). The new nurseries will produce seedlings more inexpensively, as these containers grown seedlings are raised in a single year as opposed to two or three in conventional and bare root nurseries. The seedlings will also have better survival rates which will reduce the planting costs as the plant spacing can be widened (i.e. less stems can be planted per hectare) and the need to replace failures will be reduced. Replanting, reforesting and afforestation according to approved management plans is an obligation of all the Forest Enterprises and has to date always been undertaken (the forest area of Belarus has been increasing over the last 60 years). Feb 21, 2018 Page 17 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) C. Financial Management 42. The PIU has built its FM capacity during the implementation of the main loan through on the job learning and attending World Bank organized learning events that are being periodically offered. Given that the project FM performance under the main loan is satisfactory, identical FM and disbursement will be put in place for this AF operation. 43. Specifically, the same PIU staff will be responsible for handling the transactions under AF loan, similar internal control procedures will be used. Under the AF loan, interim IFRs will also need to be submitted on a quarterly basis, and annual project audits will be required. As the currency of the AF loan is in Euro, a new set of Designated Accounts and Transit Accounts will be required. D. Procurement 44. Since the original FDP was approved in 2015, the World Bank has adopted a new Procurement Policy Framework, which requires clients to prepare a Project Procurement Strategy for Development (PPSD) and then follow the new Systematic Tracking of Exchanges in Procurement (STEP) system. The AF loan falls under this new framework, while the original FDP follows the old procurement guidelines (January 2011). As the AF is for a limited number of procurement packages a simplified form of the PPSD has been prepared by the PIU, and has been approved by the Bank (November 2017). The PIU has also already prepared a draft Procurement Plan for the AF activities. Due to the introduction of the new procurement procedures, the fiduciary risk rating has been assessed as substantial. This risk will be mitigated through training on the new STEP system to be organized by the Bank in early 2018 for the procurement staff from the PIU to participate. E. Social (including Safeguards) 45. Women are not well represented in the traditionally male-dominated forestry sector due to its labor intensity and tough working conditions (i.e. heavy manual work, outside in all types of weather). Gender aspects will be monitored as part of the Results Framework indicators on number of people trained (female) and percentage of female direct project beneficiaries. The project will also engage the PIU and stakeholders at the national and Oblast level to build their awareness of opportunities for quality citizen engagement, and addressing gender-specific constraints in the forestry sector. The site- specific Environmental and Social Management Plans (ESMPs) for the proposed new nurseries consider gender aspects. Training opportunities for women will be provided, particularly in the nursery sector, and this will be tracked through the above-mentioned indicator. 46. All project activities will be implemented within state owned nurseries and/or state owned forest areas and thus no resettlement issues are anticipated. Similarly, to the original project, OP 4.12 is not triggered for AF activities. Proposed project activities are unlikely to result in loss of access to resources and/or economic displacement to communities. The project areas are located on forestry enterprises lands (i.e. publicly owned). The PIU will be responsible for monitoring the implementation of the EMP, and will oversee any social safeguards-related issues that arise from the AF activities during implementation. There is a public inquiry/complaint handling mechanism that was used under the original project, and the AF will build on and strengthen this system. Although OP 4.12 is not Feb 21, 2018 Page 18 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) triggered for the AF, all social issues that may arise as a result of the project will be handled through said Grievance Redress Mechanism as per the requirements of OP 4.01. 47. The Borrower, through Bellesexport, will continue to carry out the Project in accordance with the ESMP. Except as the Bank shall otherwise agree, the Borrower, through Bellesexport, will not assign, amend, abrogate or waive the ESMP or any of its provisions. 48. The Borrower will also ensure, that the terms of reference for any consultancy in respect of any Project activity under the Project will be satisfactory to the Bank following its review thereof and, to that end, such terms of reference will duly incorporate the requirements of the Bank Safeguards Policies then in force, as applied to the advice conveyed through such technical assistance F. Environment (including Safeguards) 49. The AF remains classified as environmental category B-partial assessment since there are no significant or irreversible adverse impacts expected. The project interventions are expected to have largely positive environmental impacts. The World Bank safeguard policies that are triggered are: OP/BP 4.01 on Environmental Assessment, OP/BP 4.36 on Forests (same as in the original project), and OP 4.09 on Pest Management (new). The latter is triggered due to the possibility that improving forest nurseries could stimulate increased use of pesticides, and because the project could provide an opportunity to promote Integrated Pest Management methods in the nurseries. This issue will be addressed by providing information, guidance, and training to all participating nurseries, rather than preparing a separate pest management plan. This will be completed no later than February 2018. 50. The site specific Environmental and Social Management Plans (ESMPs) for Mogilev, Rechitsa and Schuchin have been disclosed (http://www.bellesexport.by/novosti/1802/) and publicly consulted with all interested parties and the local population in the participating districts. The participating forestry enterprises have posted the EA documents on their websites (November 2, 2017) as well as provided hard copies to the key stakeholders and conducted face-to-face public consultations on November 20, 2017. Overall, the draft ESMPs have been supported by the participants and no specific questions and issues have been raised. 51. Climate Change Commitments. The WB climate change corporate commitments for investment projects include climate and disaster risk screening, greenhouse gas (GHG) accounting to determine ex-ante GHG emissions, identifying climate mitigation and/or adaptation co-benefits and applying a shadow price of carbon to account for carbon externalities in the project economic analysis. 52. Climate and disaster risk screening. The WB Climate Action Plan 2016-2020, endorsed in April 2016, commits risk screening to be undertaken for IBRD operations as a proactive approach to considering short- and long-term climate and disaster risks in projects. A risk screening was undertaken for the AF to assess current and future climate and disaster risks using the World Bank’s Original Screening Tool for natural resource / forestry projects, which is built around an exposure – sensitivity – adaptive capacity framework. Specifically, the screening assessed: (i) current and future exposure at the project location to climate and geophysical hazards for extreme temperature, strong winds, and freezing rain; (ii) potential impacts on the project given the hazards; and (iii) adaptive capacity to modulate the potential impacts. Based on this assessment, the overall project risk from climate change is considered moderate. The proposed AF interventions consider climate implications, which were also a key part of the original project design, including physical (i.e. climate-resilient seedlings) and non-physical (i.e. Feb 21, 2018 Page 19 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) training of forestry professionals) aspects that will help address the threats and opportunities created by climate change. 53. Greenhouse gas accounting. An ex-ante assessment of the GHG impacts of the project (including the original and AF activities) was completed with support from the Food and Agriculture Organization (FAO) and in coordination with the MoF and the PIU. The results of the analysis demonstrate a positive net carbon balance estimated at 7.95 million tCO2-e (metric tons of CO2-equivalent) of avoided emissions or increased carbon sequestration over 20 years. This improvement is primarily due to afforestation using tree seedlings, extended areas of forestry thinning that improves forest management and wood use as bioenergy that reduces gas consumption. 54. Climate Co-benefits. The project was assessed by the World Bank at 100 percent for climate co- benefits, which demonstrates the project’s contribution to climate action in terms of both mitigation and adaptation co-benefits. Mitigation co-benefits result from developing improved forest nurseries for afforestation and reforestation, increasing the intensity of silviculture through thinning and increased productivity of the stands, and developing the use of woody biomass and logging residues for bioenergy, replacing imported gas used for heating. Adaptation co-benefits result from investments in climate-resilient seedlings and improved quality of stands through silvicultural selection. 55. Shadow price of carbon. Based on the GHG assessment and assuming a baseline estimate of the social value of carbon of US$30, the project’s net benefit is estimated at around US$238 million over the 20 year period. V. WORLD BANK GRIEVANCE REDRESS MECHANISM 56. Communities and individuals who believe that are adversely affected by a World Bank (WB) supported project may submit complaints to existing project-level grievance redress mechanisms or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of WB non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/en/projects-operations/products-and-services/grievance-redress-service. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org Feb 21, 2018 Page 20 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) VI. SUMMARY TABLE OF CHANGES Changed Not Changed Change in Results Framework ✔ Change in Components and Cost ✔ Change in Loan Closing Date(s) ✔ Change in Disbursements Arrangements ✔ Change in Safeguard Policies Triggered ✔ Change in Implementing Agency ✔ Change in Project's Development Objectives ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Change of EA category ✔ Change in Legal Covenants ✔ Change in Institutional Arrangements ✔ Change in Financial Management ✔ Change in Procurement ✔ Change in Implementation Schedule ✔ Other Change(s) ✔ VII. DETAILED CHANGE(S) RESULTS FRAMEWORK _DETAILED CHA NGES Project Development Objective Indicators detailed cha nges PDO_IND_TABLE Capacity to produce high quality seedlings increased (number of container grown seedlings per year) Feb 21, 2018 Page 21 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 23,700,000.00 Revised Date 27-Mar-2015 30-Jun-2017 31-Aug-2021 Amount of carbon (CO2) sequestered Unit of Measure: Metric ton Indicator Type: Custom Baseline Actual (Current) End Target Action Value 4,643,384.00 4,727,809.00 5,245,627.00 New Date 27-Mar-2015 30-Jun-2017 31-Aug-2021 Intermediate Indicators IO_DETAILED_TABLE detailed change s Nursery lines for container grown seedlings of native tree species established Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 6.00 Revised Date 27-Mar-2015 30-Jun-2017 31-Aug-2021 Number of people trained Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 2,243.00 2,330.00 3,000.00 Revised Date 27-Mar-2015 30-Jun-2017 31-Aug-2021 Number of people trained - female Unit of Measure: Number Indicator Type: Custom Breakdown Baseline Actual (Current) End Target Action Value 110.00 130.00 150.00 Revised Feb 21, 2018 Page 22 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) Date 27-Mar-2015 30-Jun-2017 31-Aug-2021 Direct project beneficiaries Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 35,000.00 35,500.00 Revised Date 27-Mar-2015 30-Jun-2017 31-Aug-2021 Female beneficiaries Unit of Measure: Percentage Indicator Type: Custom Supplement Baseline Actual (Current) End Target Action Value 0.00 17.40 17.50 Revised COMPONENTS Current Component Name Current Cost Action Proposed Component Proposed Cost (US$, (US$, millions) Name millions) Improving silviculture and 36.47 Improving silviculture 36.47 the sustainability of forest and the sustainability of management forest management Improving forest fire 4.88 Improving forest fire 4.88 prevention, monitoring, prevention, monitoring, detection and suppression, detection and improving forest suppression, improving management information forest management systems information systems Building the capacity for 2.10 Building the capacity for 2.10 sustainable forest sustainable forest management (including GEF management (including Project management) GEF Project management) Feb 21, 2018 Page 23 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) TOTAL 43.45 43.45 LOAN CLOSING DATE(S) Ln/Cr/Tf Status Original Closing Current Proposed Proposed Deadline Closing(s) Closing for Withdrawal Applications IBRD-84740 Effective 31-Aug-2020 31-Aug-2020 31-Aug-2021 31-Dec-2021 DISBURSEMENT ARRANGEMENTS Change in Disbursement Arrangements Yes Expected Disbursements (in US$, millions) DISBURSTB L Fiscal Year 2015 2016 2017 2018 2019 2020 2021 2022 Annual 0.00 0.12 12.35 11.95 13.29 14.00 2.75 0.25 Cumulative 0.00 0.12 12.47 24.42 37.71 51.71 54.46 54.71 SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Latest ISR Rating Current Rating Political and Governance  Moderate  Moderate Macroeconomic  Moderate  Moderate Sector Strategies and Policies  Moderate  Moderate Technical Design of Project or Program  Low  Low Institutional Capacity for Implementation and  Substantial  Moderate Sustainability Fiduciary  Substantial  Substantial Environment and Social  Low  Low Stakeholders  Low  Low Other Overall  Moderate  Moderate Feb 21, 2018 Page 24 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) Safguard_Table COMPLIANCE Change in Safeguard Policies Triggered Yes Safeguard Policies Triggered Current Proposed Environmental Assessment OP/BP Yes Yes 4.01 Natural Habitats OP/BP 4.04 No No Forests OP/BP 4.36 Yes Yes Pest Management OP 4.09 No Yes Physical Cultural Resources OP/BP No No 4.11 Indigenous Peoples OP/BP 4.10 No No Involuntary Resettlement OP/BP 4.12 No No Safety of Dams OP/BP 4.37 No No Projects on International Waterways No No OP/BP 7.50 Projects in Disputed Areas OP/BP 7.60 No No LEGAL COVENANTS2 LEGAL COVENANTS – Belarus Forestry Development Project - Additional Financing (P165121) Sections and Description Finance Agreement: Section I.B.2 of Schedule 2 to the Additional Financing Loan Agreement | Description: The Borrower, through Bellesexport, shall ensure that no activities to be carried out under the Project involve Involuntary Resettlement. | Frequency :CONTINUOUS Feb 21, 2018 Page 25 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) VIII. RESULTS FRAMEWORK AND MONITORING Results Framework COUNTRY : Belarus Belarus Forestry Development Project - Additional Financing ( P165121 ) RESULT_YES_PDO Project Development Objectives The Project Development Objective is to enhance silvicultural management and reforestation and afforestation, increase the use of felling residues and improve the public good contribution from forests in targeted forest areas. Project Development Objective Indicators Unit of Data Source / Responsibility for Action Indicator Name Core Baseline End Target Frequency Measure Methodology Data Collection No Change Name: Area of Hectare(Ha) 132,500.0 165,000.00 SFEs/MOF/PI Bi-annual Bi-annual young and 0 U progress reports middle-aged production-forest thinned according to approved management plans Description: This indicator is linked to the PDO to enhance silvicultural management of forests. No Change Name: Economic Amount(USD) 0.00 15,826,000. SFEs/MOF/PI Bi-annual Bi-annual performance of 00 U progress reports Feb 21, 2018 Page 26 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) participating SFEs / analysis of SFE enhanced accounts Description: This indicator measures the excess of revenue over expenditures inclusive of all financing sources Revised Name: Capacity to Number 0.00 23,700,000. SFEs/MOF/PI Bi-annual Bi-annual produce high 00 U progress reports quality seedlings increased (number of container grown seedlings per year) Description: This indicator measures the number of container grown seedlings for afforestation and reforestation purposes. No Change Name: Average Cubic 28.50 35.00 SFEs/MOF/PI Bi-annual Bi-annual utilizable volume Meter(m3) U progress reports of commercial timber harvested during intermediate felling in targeted SFEs increased Description: This indicator covers the use of felling waste in participating State Forest Enterprises. The unit of measure is actually m3 per hectare New Name: Amount of Metric ton 4,643,384. 5,245,627.0 carbon (CO2) 00 0 sequestered Description: RESULT_YES_IO Feb 21, 2018 Page 27 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) Intermediate Results Indicators Responsibility Unit of Data Source / Action Indicator Name Core Baseline End Target Frequency for Data Measure Methodology Collection Revised Name: Nursery lines Number 0.00 6.00 SFEs/MOF/PIU Bi-annual progress Bi-annual for container grown reports seedlings of native tree species established Description: This indicator monitors the capacity to produce high quality container grown seedlings No Change Name: Improved Yes/No No Yes MOF/PIU This indicator Bi-annual thinning regime includes improved developed biodiversity friendly management of stands Description: This indicator includes biodiversity friendly management of stands. Revised Name: Number of Number 2,243.00 3,000.00 MOF/PIU Bi-annual progress Bi-annual people trained reports Revised Number of people Number 110.00 150.00 MOF/PIU Bi-annual progress Bi-annual trained - female reports. Description: This indicator refers to the number of forest professionals and or community members that have received capacity building through training as a result of the project No Change Name: Reforms in Yes/No No Yes MOF/PIU Bi-annual progress Bi-annual forest policy, reports Feb 21, 2018 Page 28 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) legislation or other regulations supported Description: No Change Name: Govt Number 0.00 11.00 MOF/PIU Bi-annual progress Bi-annual institutions provided reports w/ capacity buildg to improve mgt of forest resources Description: No Change Name: New areas Number 1,226,700. 4,500,000. MOF/PIU Bi-annual progress Bi-annual outside protected 00 00 reports areas managed as biodiversity-friendly (ha) Description: This indicator measures the number of terrestrial hectares outside protected areas where, as a result of the World Bank operation, the site is managed at least in part to obtain biodiversity gains. No Change Name: Project- Yes/No No Yes MOF/PIU Bi-annual progress Bi-annual supported reports organization(s) publish reports on inputs and effect of consultation and information dissemination activities on project/program/poli Feb 21, 2018 Page 29 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) cies (Yes/No) Description: Revised Name: Direct project Number 0.00 35,500.00 MOF/PIU Biannual Progress Biannual beneficiaries Reports Revised Female Percentage 0.00 17.50 beneficiaries Description: Direct beneficiaries are people or groups who directly derive benefits from an intervention (i.e., children who benefit from an immunization program; families that have a new piped water connection). Please note that this indicator requires supplemental information. Supplemental Value: Female beneficiaries (percentage). Based on the assessment and definition of direct project beneficiaries, specify what proportion of the direct project beneficiaries are female. This indicator is calculated as a percentage. Feb 21, 2018 Page 30 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) RESULT_YES_TARGET_VALUES Target Values Project Development Objective Indicators FY_Result1 Action Indicator Name Baseline YR1 YR2 YR3 YR4 End Target No Change Area of young and middle-aged production-forest thinned 132,500.00 140,000.00 150,000.00 160,000.00 165,000.00 165,000.00 according to approved management plans No Change Economic performance of 0.00 605,000.00 4,939,000.00 10,496,000.00 12,723,000.00 15,826,000.00 participating SFEs enhanced Revised Capacity to produce high quality seedlings increased 0.00 0.00 2,000,000.00 2,000,000.00 4,000,000.00 23,700,000.00 (number of container grown seedlings per year) No Change Average utilizable volume of commercial timber harvested 28.50 30.00 31.50 33.00 35.00 35.00 during intermediate felling in targeted SFEs increased New Amount of carbon (CO2) 4,643,384.00 5,245,627.00 sequestered Intermediate Results Indicators FY_Result1 Action Indicator Name Baseline YR1 YR2 YR3 YR4 End Target Revised Nursery lines for container 0.00 0.00 2.00 2.00 4.00 6.00 grown seedlings of native tree Feb 21, 2018 Page 31 of 32 The World Bank Belarus Forestry Development Project - Additional Financing (P165121) species established No Change Improved thinning regime No N N Y Y developed Revised Number of people trained 2,243.00 2,250.00 2,330.00 2,340.00 2,380.00 3,000.00 Revised Number of people trained - 110.00 115.00 130.00 140.00 145.00 150.00 female No Change Reforms in forest policy, legislation or other regulations No N N N Y Y supported No Change Govt institutions provided w/ capacity buildg to improve mgt 0.00 0.00 2.00 5.00 8.00 11.00 of forest resources No Change New areas outside protected areas managed as biodiversity- 1,226,700.00 1,226,700.00 1,226,700.00 2,536,020.00 3,845,340.00 4,500,000.00 friendly (ha) No Change Project-supported organization(s) publish reports on inputs and effect of consultation and information No N Y Y Y Y dissemination activities on project/program/policies (Yes/No) Revised Direct project beneficiaries 0.00 35,500.00 Revised Female beneficiaries 0.00 17.50 Feb 21, 2018 Page 32 of 32