Document of The World Bank FOR OFFICIAL USE ONLY Report No: ICR00004652 IMPLEMENTATION COMPLETION AND RESULTS REPORT TFA4496 ON A SMALL GRANT IN THE AMOUNT OF US$0.25 MILLION TO THE GOVERNMENT OF NEPAL FOR FOREST INVESTMENT PLAN PREPARATION GRANT (P160523) March 15, 2019 Environment and Natural Resources Global Practice South 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 March 12, 2019) Currency Unit = Nepalese Rupees (NPR) NPR 111.55= US$1 FISCAL YEAR July 16-July 15 (Government of Nepal) July 1-June 30 (World Bank) ABBREVIATIONS AND ACRONYMS CF Carbon Fund CIF Climate Investment Funds CMU Country Management Unit CPS Country Partnership Strategy CSO Civil Society Organization DFID U.K. Department for International Development DGM Dedicated Grant Mechanism ENR GP Environment and Natural Resources Global Practice ERP Emission Reduction Program ERPD Emission Reduction Program Document FCPF Forest Carbon Partnership Facility FIP Forest Investment Program GA Grant Agreement GoN Government of Nepal IP Investment Plan IPLC Indigenous Peoples and Local Communities M&E Monitoring and Evaluation MoEP Ministry of Environment and Population MoF Ministry of Finance MoFE Ministry of Forests and Environment MoFSC Ministry of Forests and Soil Conservation NGO Nongovernmental Organization PDO Project Development Objective REDD+ Reduced Emissions from Deforestation and Forest Degradation, Sustainable Forest Management and Enhancement of Forest Carbon Stocks REDD IC REDD Implementation Center UN United Nations Regional Vice President: Hartwig Schafer Country Director: Idah Z. Pswarayi-Riddihough Senior Global Practice Director: Karin Erika Kemper Practice Manager: Magda Lovei Task Team Leader(s): Andrea Kutter ICR Main Contributor: Nimanthi Attapattu TABLE OF CONTENTS ABBREVIATIONS AND ACRONYMS ......................................................................................... 2 DATA SHEET ....................................................................... ERROR! BOOKMARK NOT DEFINED. I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 3 II. OUTCOME ...................................................................................................................... 6 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 11 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 12 V. LESSONS LEARNED AND RECOMMENDATIONS .............................................................. 13 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 16 ANNEX 2. PROJECT COST BY COMPONENT ........................................................................... 24 ANNEX 3. RECIPIENT, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ...... 25 ANNEX 4. SUPPORTING DOCUMENTS (IF ANY) ..................................................................... 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name P160523 Nepal - Forest Investment Plan Preparation Grant Country Financing Instrument Nepal Investment Project Financing Original EA Category Revised EA Category Not Required (C) Organizations Borrower Implementing Agency Government of Nepal represented by Ministry of Ministry of Forestry and Environment Finance Project Development Objective (PDO) Original PDO The objective of this project is to support the Government of Nepal with the preparation of Nepal's Forest Investment Plan and enhance its capacity for implementation. FINANCING FINANCE_TBL Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) Donor Financing TF-A4496 250,000 248,650 248,650 Total 250,000 248,650 248,650 Total Project Cost 250,000 248,650 248,650 Page 1 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) KEY DATES Approval Effectiveness Original Closing Actual Closing 06-Dec-2016 26-Dec-2016 30-Sep-2018 30-Sep-2018 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions KEY RATINGS Outcome Bank Performance M&E Quality Satisfactory Satisfactory Modest RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 25-Jun-2018 Satisfactory Satisfactory 0.22 ADM STAFF Role At Approval At ICR Regional Vice President: Annette Dixon Hartwig Schafer Country Director: Qimiao Fan Idah Z. Pswarayi-Riddihough Senior Global Practice Director: Karin Erika Kemper Karin Erika Kemper Practice Manager: Kseniya Lvovsky Magdolna Lovei Task Team Leader(s): Andrea Kutter Andrea Kutter ICR Contributing Author: Nimanthi A. Attapattu Page 2 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES Context 1. The livelihoods of over three-quarters of Nepal’s population depend on agriculture and forest resources. Over the past years, the number of people dependent on natural resources and ecosystem services from forests, grasslands, and wetlands for their livelihoods and security has increased quite significantly. The recent fuel crisis and the 2015 earthquake have led to a skyrocketing need for fuelwood and timber for reconstruction of damaged housing and human settlements. 2. Nepal is also heavily vulnerable to the impacts of climate change and natural disasters. Recent records show increasing incidents of drought, flood, hailstorms, landslides, and crop disease. Climate change is expected to increase these incidents, with glacier outbursts, floods, droughts, and ecosystem degradation directly affecting the economy, especially the livelihoods of the poor. Nepal is located on the edge of a tectonic plate that gave rise to the Himalayas, and hence it is also subject to high earthquake risks, particularly in the Kathmandu valley. 3. Nepal’s environmental policies and programs have generally aimed at making a good match between economic development and conservation. Nepal’s 13th Plan (FY13–16) (‘Plan’) has the ambitious vision of upgrading Nepal from its current status as a least-developed country to that of a developing nation by 2022. It also includes the goals of eradicating economic poverty and human deprivation prevalent in the country and improving living standards. In meeting these goals, the implementation of the Plan will also ensure that Nepal achieves the Sustainable Development Goals by addressing the issues of sustainable development, human rights, climate change, and other matters it committed to at the regional and international levels. The Plan also promotes green economy. 4. Despite Nepal’s commitment to environmental protection, the modest economic growth achieved in recent decades has come at a high environmental cost. Impacts linked to increasing human population have led to deforestation on steep mountain slopes, causing massive soil erosion and flooding on the plains. Forests and forest habitats are threatened by unsustainable harvesting and clearing for fuelwood collection and subsistence agriculture. Mountain biodiversity is suffering from forest degradation and deforestation, poor management of natural resources, and inappropriate farming practices. Encroachment into wetland habitats, unsustainable harvesting of wetland resources, industrial pollution, agricultural runoff, the introduction of exotic and invasive species into wetland ecosystems, and siltation have severely degraded the quality of the ecosystems and the services they provide. 5. Nepal has the potential to deliver higher and more inclusive growth by sustainably managing its natural resource base. Planning and managing the country’s vast water resources in a sustainable manner—including through investments to protect catchments areas—will support long-term growth, especially from irrigated agriculture and hydropower generation. Conservation and sustainable management of forests and biodiversity have the potential to sustain considerable growth in the tourism sector, especially nature-based tourism. Healthy forests also provide a stable subsistence base for the rural poor, curb soil erosion and enhance flood resilience, and provide a natural social safety net to external shocks such as earthquakes or political turmoil. Page 3 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) 6. Forests play an important role in Nepal’s national economy. (NFA (20081) has estimated that Nepal’s forestry sector contributed 3.5 percent to the gross domestic product of the country in 2000 and 4.4 percent during 1990–2000. The forest sector contributes 9.23 percent of total national employment. Majority of the forest sector employment (91.30 percent) is in the informal sector with the formal sector contributing only 8.70 percent. The largest employment category is elementary unskilled forest workers accounting for 61.83 percent of total forest sector employment (ERI 20112). 7. Estimates of foregone timber revenues are a partial indicator of the significance of the current shortfall in the performance of the forest sector. At a conservative estimate for production and prices, Nepal’s forestry sector could sustainably generate US$180 million a year from timber harvests. In contrast, officially recorded forest revenue decreased from US$9.5 million in 2004 to US$4.18 million in 2006. This shortfall is characteristic across the other sources of value from forest resources. They are compounded, not compensated, by similar shortcomings in contributions to poverty reduction, biodiversity conservation, hydrology, and tourism (PROFOR 20133). 8. In May 2015, Nepal was selected to participate in the World Bank-managed Forest Investment Program (FIP) as a pilot country. The FIP is part of the Climate Investment Funds (CIF) to support developing countries’ efforts at Reducing Emissions from Deforestation and Forest Degradation (REDD+) by providing up-front bridge financing for readiness reforms and public and private investments identified through national REDD readiness strategy building efforts taking into account opportunities to adapt to the impacts of climate change on forests. FIP projects also seek to contribute to additional climate co- benefits such as biodiversity conservation, protection of the rights of indigenous peoples and local communities (IPLC), poverty reduction, and rural livelihoods enhancements. 9. As a first step to access FIP financing, each country receives a preparation grant to help develop an investment plan (IP) that articulates priority transformational changes for FIP financing. 10. The purpose of the project preparation grant was to support the development of Nepal’s FIP IP and to enhance the Government’s and stakeholders’ capacity to lead and implement forestry and forest- smart investments. The IP focus is consistent with the World Bank Group Country Partnership Framework (CPF) FY19–234 that supports Nepal’s long-term vision to upgrade the country’s status from least- developed to that of a developed nation within the next decade. It aligns in particular with the CPF Pillar 2 on “Inclusive Growth and Opportunities for Shared Prosperity� and with the cross-cutting dimensions of tackling climate change and natural disasters. 11. The development of an FIP IP follows the ‘Operational Guidelines’ of the FIP5 (‘Guidelines’). The Guidelines provide that the Government will take the lead in coordinating the preparation of the IP. A key feature is the engagement at the country level with local communities, indigenous peoples’ groups, the private sector, the United Nations (UN), and bilateral and other potential partners. Governments of FIP countries should establish or identify an existing, cross-cutting multi-stakeholder national-level Steering 1 NFA (2008) Contribution of Forestry Sector to Gross Domestic Product in Nepal, Dept. of Forest Research and Survey, Government of Nepal, Kathmandu 2 ERI (2011) Employment in Nepal’s Forest Sector, Livelihoods and Forestry Program, Kathmandu 3 PROFOR (2013) Nepal Forest Sector Survey: Policy priorities and recommendations. Washington, DC. Program on Forests (PROFOR) 4 Report No. 121029-NP 5 https://www.climateinvestmentfunds.org/sites/cif_enc/files/meeting-documents/fip_3_fip_operational_guidelines_2_0.pdf. Page 4 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) Committee to assist in program planning, implementation, and monitoring and evaluation (M&E), which should include representatives of provincial, state, and local authorities; IPLC; nongovernmental organizations (NGOs); the private sector; and other members of civil society. The Guidelines also suggest that “[l]ead country agencies/institutions may wish to consolidate background material� to inform the FIP IP. 12. The FIP IP preparation activities in Nepal were coordinated by the REDD Implementation Center (REDD IC) in the Ministry of Forests and Environment (MoFE)6 under the guidance of a Steering Committee which included members from the Ministry of Forests and Soil Conservation (MoFSC), Ministry of Environment and Population (MoEP), and Ministry of Finance (MoF). Indigenous peoples, local community groups, and private sector representatives were actively involved in the preparation process too. Theory of Change Project Development Objectives (PDOs) 13. The objective of the project was to support the Government of Nepal (GoN) with the preparation of Nepal’s Forest Investment Plan and enhance its capacity for implementation. Key Expected Outcomes and Outcome Indicators 14. To achieve the objective, the following outcomes were envisaged: (a) A series of technical and social studies and assessment that have informed the Investment Plan (Number) (b) Government Institutions provided with capacity building to improve management of forest resources (number) (c) Potential co-financing partners identified and donor coordination (number) 15. The Nepal FIP IP was to be developed consistent with the Guidelines. During and through the development process, the GoN and other stakeholder sought to build their capacity on the main features of the FIP, including how to apply investment criteria, and address the needs of different financing modalities for future FIP co-financed projects. 16. To achieve the objective of the preparation grant, existing technical and social studies and assessments were compiled and reviewed by the GoN representatives to inform the various sections of the FIP IP as per an outline provided in the Guidelines. Priority needs for transformational change in the forestry sector and sectors affecting forest ecosystems were then discussed and debated through a series of geographically dispersed workshops and consultations with stakeholders, including relevant government institutions. Consensus derived from this process was subsequently reflected in the final FIP IP design. As an outcome of this process, changes were translated into a plan comprising investment projects for downstream FIP co-financing. This plan was subsequently endorsed by the Government Steering Committee comprising members informed by their active engagement in the development process and was submitted by the GoN to the FIP Donor Subcommittee for approval. Active involvement 6 The MoFE was created as a merger of the former MoFSC and the MoEP. Page 5 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) of potential development partners, including the World Bank and bilaterals such as the Republic of Korea, in the plan development process was ensured to help attract co-financing downstream. Components 17. Consistent with the theory of change, the project financed five components as follows: Table 1. Project Cost by Component Component Costs (US$, millions) (a) Analytical Work 0.070 (b) Stakeholder Consultations 0.075 (c) Capacity Building 0.030 (d) Finalizing FIP Investment Plan for Nepal 0.050 (e) Project Management 0.025 Total 0.250 Significant Changes during Implementation (if applicable) 18. No significant changes were made during implementation. However there is a small discrepancy between the performance indicators listed in the Grant Agreement (GA) where three indicators are shown, while the Project Paper presents only two. The additional indicator not tracked focused on in- depth technical trainings and joint meetings for sector agencies. Because of the close alignment of the REDD+ readiness activities financed by the Forest Carbon Partnership Facility (FCPF) and this preparation grant (and comingling of resources in one account), in-depth technical trainings and capacity building were mainly supported through the Readiness Grant but benefited the staff working on the FIP IP as well. II. OUTCOME Assessment of Achievement of Each Objective/Outcome 19. The objective of the grant was achieved as evidenced by the two indicators listed in the Project Paper:7 (a) FIP Investment Plan for Nepal reflects the results from a participatory development process; (b) Increased political will to address Nepal’s forest challenges (that is, indicated by active inter- ministerial committee or equivalent) has been achieved. 20. The FIP IP was developed in a highly participatory manner and in close coordination with the ongoing REDD+ readiness project supported by the FCPF Readiness Fund and the preparation of Nepal’s Emission Reduction Program (ERP) under the FCPF Carbon Fund (CF). The agreed goal is to “Strengthen 7There are only two PDO-level indicators listed in the Project Paper while the GA lists three indicators. The indicator “At least three in-depth technical trainings related to forests (including on forest-smart sector investment opportunities and forest accounts) and joint meetings for sector agencies developed� listed in the GA is not listed in the Project Paper. The Results Framework in the Project Paper is inconsistent, and the listed indicators and relevant descriptions differ as well. Page 6 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) resilience of forest ecosystems for emissions reductions and increased environmental, social and economic benefit� at a time of major political transformation. The Inter-ministerial Committee working on REDD+ reviewed and endorsed the FIP IP—members of that committee are the MoF, the MoFE, and the National Planning Commission. 21. During the preparation of the FIP IP, the GoN organized a two-day initiation workshop to familiarize all relevant stakeholders with the features of the FIP and identify priority areas for investment consistent with the Guidelines. The workshop also provided an opportunity to invited stakeholder groups to provide their views on the forest challenges in Nepal and generate political will to undertake transformational changes. The workshop was followed by several focus group discussions at subnational levels. A final validation workshop for Nepal’s FIP IP was held in November 2017. The Inter-ministerial Committee endorsed the FIP IP. The committee was chaired by the Secretary of the MoFSC and attended by the MoF, the National Planning Commission, and the MoEP. The FIP IP was also endorsed by the REDD+ multi-stakeholder group that has been working closely with the GoN on the REDD+ agenda. 22. Throughout the FIP IP preparation process, a transformation in stakeholder engagement and collaboration could be observed. While at first, distrust and reluctance to believe the proposed collaborative process was visible, especially between the Government and the IPLC, at the end, the FIP IP became new platform for an open and constructive dialogue between the Government, IPLC, and the private sector on Nepal’s forest sector. There was a significant change in indigenous peoples, and local community groups were engaged by the end of the process, who are now leading the start-up of the Dedicated Grant Mechanism (DGM) in close collaboration with the Ministry of Forestry and Environment. 23. Nepal’s FIP IP was endorsed by the FIP Sub-Committee on December 13, 2017, and a notional amount of US$24.0 million was allocated to co-finance identified priority investments (US$6.1 million in grants and US$17.9 million as a concessional loan). An additional grant of US$4.5 million was set aside for the DGM, which will complement the investment project. Nepal’s FIP IP received positive feedback from the members and observers of the FIP Subcommittee as it presented a convincing case for a necessary transformational change in Nepal’s forest sector and sectors affecting forests. The IP lists five strategic projects that will contribute to the change: (a) Strengthen Sustainable Forest Management through Community-based Forest Management in Terai and Chure Regions (b) Promote Forest Management for Forest-based Economy (c) Support Private Land Forest Development (d) Enhance Environmental Services through Nature-based Tourism (e) Implement Watershed Management through Innovative Technologies Page 7 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) 24. During the IP preparation phase, awareness on FIP Nepal was built within the national, provincial and local governments; IPLC; and the private sector. Other development partners were appraised as well and close collaboration was sought. Technical capacity was increased (for example, REDD IC with 13 staff is now engaged in all three phases of REDD+), and stakeholders have a solid understanding of the FIP process, investment criteria, and financing modalities. The dissemination process of the content of the FIP IP and the DGM took place over a period of 8 months at the national, provincial, and local government levels. The Ministry of Forest and Environment have made the FIP investment project a priority at the highest level as it builds on the REDD+ readiness activities and will implement actions, which will result in greenhouse gas emission reductions, leading to carbon payments from the FCPF CF. The GoN has expressed interest in a longer-term engagement with the World Bank and begun the preparation of the investment project ‘Nepal - Forests for Prosperity’ to be financed by the FIP with the possibility to tap and IDA19 resources in the near future. Overall Outcome Rating Relevance 25. The project outcomes were agreed with the GoN and remained highly relevant throughout the implementation of the preparation grant. The FIP IP remains an important government document with strong ownership, which is now guiding the preparation of an investment project with FIP and IDA financing. The awareness and capacity created on the FIP IP process, including main principles of operations, are highly relevant for the preparation and implementation of future investment projects. The DGM project that will complement the larger investment has already advanced (national steering committee has been selected) and provided an immediate opportunity for the indigenous peoples and local community groups to apply the new knowledge on the FIP in advancing the preparation of the DGM. 26. The project remains consistent with the CPF for Nepal as natural resources management, including forests, is a main contributor to Nepal’s economic development. Efficacy 27. The project produced the anticipated results as detailed in the following paragraphs. Outcome 1: Produce a comprehensive Forest Investment Plan that would provide a vision for Nepal’s forest resources by incorporating forests and climate change considerations into Nepal’s Sustainable Development agenda and identify priority areas of actions to sustainably manage forests and trees to improve the livelihoods of forest-dependent people and rural poor. 28. The FIP IP with its agreed goal to ‘Strengthen resilience of forest ecosystems for emissions reductions and increased environmental, social and economic benefit’ at a time of major political transformation provides a comprehensive vision for a more effective and efficient way of managing Nepal’s forest resources in a sustainable manner. Supported by the new constitution, Nepal is in a fundamental transformation process moving toward federalism. Decision power on natural resources, including forests, is being devolved from the national level to provincial and municipal levels. The proposed investments in the FIP IP support the devolution process while also improving the existing forest management modalities such as community-based forest management. Page 8 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) 29. The five projects presented in the IP address Nepal’s main challenges and opportunities to sustainably manage forests, thereby improving the livelihoods of forest-dependent people. Cumulatively, the five projects will contribute to reducing 1.5 million tons CO2eq in emissions over an eight-year project period, contributing significantly to Nepal’s ERP in the Terai Arc Landscape and toward Nepal’s Nationally Determined Contributions to the United Nations Climate Change Convention goals. The plan was modularized into separate projects to help attract funding and for coherence of focus but may be combined or aggregated depending on finance source and timing. Project 1 will scale up and support the transfer of forest management responsibilities from the Government to community groups. Project 2 will link community forest user groups with private entrepreneurs to improve timber harvesting and to set up small- and medium-size timber utilization industries. Project 3 will establish plantations of fast-growing tree species on degraded and underutilized agricultural land in the hills and Terai region. Project 4 will create livelihoods and income-earning opportunities by introducing ecotourism activities in selected forest areas straddling the border to India. Project 5 will manage watersheds through innovative technologies, thereby addressing flood and excessive sedimentation risks downstream, including in India. Outcome 2: Undertake necessary studies and assessments to inform the investment plan. 30. The REDD IC led the preparation of the FIP IP with the support of a national-level consultant team with international backstopping and coordination and under the guidance of a national FIP IP Steering Committee established for the purpose. Representatives from the World Bank in Washington, DC, and Kathmandu also attended many meetings and discussions. The initial basis of the FIP IP was a core set of assessments and analytical studies supported through the REDD+ readiness project and data and information generated during the extensive consultation process. These studies and assessments included: (a) Drivers of deforestation and forest degradation; (b) Capacity assessment of government agencies and other relevant stakeholder groups; (c) Assessment of challenges and opportunities for Nepal’s forests and the forestry sector; (d) Analysis of the forest portfolio of development partners; and (e) Capturing lessons from the implementation of the Multi-Stakeholder Forest Program supported by the U.K. Department for International Development (DFID), the Swiss Development Cooperation, and the Government of Finland. 31. The preparation of the FIP IP was closely linked with the development of a plan for Nepal’s DGM to ensure that the future investment project(s) and the DGM activities were fully complementary and main priorities addressed. 32. All major stakeholder groups in Nepal’s forestry sector were involved and/or consulted during the preparation of the FIP IP, including the GoN (the Ministry of Forests and Soil Conservation and its different departments, MoEP, Ministry of Livestock Development, MoF, and National Planning Commission); representatives from the private sector including entrepreneurs in the forest sector; trade and industry federations; banks and financial institutions; community-based organizations including community-based forest user groups in different parts of the country; civil society including NGOs, federations, and Page 9 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) associations and their members; individual experts; representatives of Nepal’s development partners and international NGOs; and elected representatives (at a local level). 33. During the consultative process, participants representing different stakeholder groups and their constituencies were encouraged to identify additional priorities, make suggestions, and initiate new investment ideas. Although a diversity of suggestions arose, these mostly represented potential investments that had already been identified in the draft REDD+ strategy, although with more details based on actual experiences, local innovations, and stakeholder perceptions. Suggestions for implementation modalities and roles for specific forest sector institutions were also commonly shared. A common issue raised during the consultative process was that the identified drivers of deforestation and forest degradation in the draft REDD+ strategy were not necessarily equally important. 34. Several consultations took place with representatives of the main federations representing IPLC in Nepal’s forestry sector including Nepal Federation of Indigenous Nationalities (NEFIN), Federation of Community Forest User Groups of Nepal (FECOFUN), Association of Collaborative Forest User Groups of Nepal (ACOFUN), Dalit Association for Natural Resources (DANAR), and Himalayan grassroots women’s natural resource management association of Nepal (HIMAWANTI). Consultation events were held in 17 districts with a total of 1,042 participants. Outcome 3: Bring together other development partners that plan or implement forest-relevant activities and discuss support for the investment plan and identify areas for development 35. During the preparation phase of the Nepal’s FIP IP, key stakeholders and development partners, both locally and internationally, were closely consulted. The GoN’s main ministries such as the Ministry of Forests and Soil Conservation and its different departments, the MoEP, and the Ministry of Livestock Development; representatives from the private sector including entrepreneurs in the forest sector; trade and industry federations; banks and other financial institutions; community-based organizations; civil society including NGOs; and international development entities such as the World Bank, the Food and Agriculture Organization of the United Nations (FAO), UN REDD, DFID, German Agency for International Cooperation (Deutsche Gesellschaft fur Internationale Zusammenarbeit), and the Swiss Agency for Development and Cooperation participated in various consultations. 36. In July 2018, the REDD IC held a workshop with various development partners to raise, in addition to the allocated FIP resources, funding for the implementation of the FIP IP and the ERP. These fund- raising efforts will continue during the investment project preparation period and the finalization of the FCPF Emission Reduction Payment Agreement. 37. The World Bank is currently developing the ‘Forest for Prosperity’ project which will be financed initially with FIP resources—there is an opportunity to add IDA19 resources and develop a longer-term forest engagement in Nepal. 38. However, while some other development partners have shown some initial interest in the FIP, no development partners have yet confirmed their support for the Nepal’s forestry sector. The two development partners that have shown the greatest interest to date are the European Investment Bank and the Government of Korea. Page 10 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) Other Outcomes and Impacts 39. The FIP IP has been developed to be fully consistent with Nepal’s draft REDD+ strategy and will comply with Nepal’s Strategic Environment and Social Assessment—funded through the FCPF as part of Nepal’s REDD+ readiness finance. The FIP IP and future investment project build directly on the work done under the REDD+ readiness project. The FIP co-financed investment project will support the implementation of interventions 1 and 2 planned for Nepal’s Emission Reduction Program Document (ERPD). Therefore, the FIP investment will have direct impacts on emissions reductions from deforestation and forest degradation in the Terai—where these are currently the highest in Nepal. As a result, the World Bank will support Nepal’s move toward results-based payments with providing up-front finance. III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME (a) Commitment by all parties. All major stakeholder groups including relevant ministries, NGOs, civil society organizations (CSOs), IPLC, and private sector representatives were consulted during the FIP IP preparation process, and this high level of stakeholder engagement was a key factor of success. REDD IC, under the guidance of the FIP Steering Committee, led the preparation work of the FIP IP with the support of national-level teams, consultants, and relevant international entities. The FIP IP was validated by these stakeholders during a workshop in November 2017. During the workshop, representatives declared their full commitment to the implementation of the investment project, which would be developed consistent with the FIP IP. (b) Willingness of the Government and the IPLC to work together. A series of national-, state- and local-level consultations, workshops, and interviews were carried out during June– December 2017, with stakeholders to obtain valuable insight, address issues and concerns, and seek opportunities for continued collaboration during the design and implementation of the investment project and the DGM. Close collaboration with REDD IC, supported by the World Bank, contributed to outreach and awareness workshops organized by the IPLC on the FIP and DGM. The relationship between the GoN and the IPLC community has significantly improved because of the FIP IP development process and supported DGM- related activities. In the past, the relationship between the Government and IPLC groups used to be challenging and driven by mistrust. This difficult relationship was observed during the initiation workshop. Over the course of the year, the relationship significantly improved as the FIP IP development process was transparent, inclusive, and participatory. The ministry continues its collaboration with the IPLC groups through the FCPF and FIP processes. The availability of a special grant for the development of the DGM made an important contribution to an atmosphere of collaboration and will be used to help sustain it ahead. (c) Federalization process—an opportune political moment. The ongoing federalization process has created opportunities at the local, state, and national levels to redefine the roles and responsibilities for the planning and management of Nepal’s natural resources, including forest resources, in a sustainable manner and equally share benefits from the expected revenue streams. The process also poses significant challenges as new structures and institutions are now in charge of the planning and management of natural resources, including forest resources. The lack of capacity of the new structures was identified as a main Page 11 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) challenge for Nepal’s forest sector; hence, capacity development at this level was identified as a priority for the future investments. (d) Nepal Forest Note provided a basis for the FIP IP. The FIP IP was developed in parallel with a World Bank Nepal Forest Note to help define priorities for longer-term, more programmatic engagement. Nepal is a priority country under the World Bank Group Forest Action Plan (2016–2020). The objective of the programmatic engagement in Nepal is to support the GoN with exploring the untapped potential of Nepal’s forests for economic growth, job creation, and social stability and addressing climate change. This programmatic engagement is implemented through the ‘forest smart - climate smart’ projects presented in the FIP IP. IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME 40. The World Bank’s overall performance during preparation and implementation was satisfactory. Quality at Entry 41. The project was prepared within six months using the guidelines for eligible preparation activities under the FIP and similar preparation grants provided to the other FIP pilot countries. The task team worked closely with the client to provide appropriate guidance and use the preparation process to enhance the capacity of the counterpart to engage in World Bank projects. 42. M&E quality at entry was modest as there were inconsistencies in the presentation of the objective-level indicators in the main text and the Results Framework in the annex and GA. While in the main text, there are only two objective-level indicators listed, the Results Framework and the GA list three indicators. These discrepancies were not noted during the review and approval process. However, given the limited resources of the grant in any case, it did not have a material impact on final outcomes that were still fully achieved. Quality of Implementation Support 43. The task team undertook three implementation support missions to support the REDD IC as the coordinator for the development of the FIP IP. The World Bank hired an international consultant who provided technical advice to the REDD IC and led the IP writeup. 44. The grant has fully disbursed within the agreed time frame and the anticipated outcomes. The project objective was fully achieved. Procurement guidelines were followed and there were no environmental or social safeguards considerations for this project. 45. Regarding financial management, it was discovered midstream that FIP accounts were maintained as a single account rather than separate from the REDD+ readiness project account. The comingling of resources for two projects posed the risk that project-related expenditures could not be easily followed for final donor source reporting. Good practice is to establish separate designated bank accounts for different projects to be able to link eligible expenditures to project activities. In June 2018, the task team advised the project team to maintain separate accounts to manage expenditures accurately to be compliant with the GA. A mission in December 2018 assessed compliance with the advice. Page 12 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) 46. The World Bank team had to alert the government counterparts to the emerging risk that the allocated FIP resources will not be fully available when the Strategic Climate Fund began to experience a funding shortfall of US$51.0 million. While the concessional funding is fully secured, it became uncertain whether US$6.1 million in grant funding will be available. The CIF Administrative Unit is actively engaged in raising additional grant resources to try to fill this gap. If the financial gap is not closed, it has the potential to delay implementation of Nepal’s FIP IP until other resources can be secured. 47. The CMU and the Environment and Natural Resources Global Practice (ENR GP) South Asia Region team have confirmed the importance of the forest agenda for Nepal and acknowledged the past and current engagement of the World Bank in Nepal’s forest sector through a range of instruments, including Advisory Services and Analytics, technical assistance, policy dialogue, and cross-sectoral work. It was agreed to elevate the forest dialogue to the political level involving relevant stakeholders, particularly to reengage with the MoF. The CMU confirmed that the preparation of the FIP trust fund-financed project could be a useful vehicle for capacity building needed in the context of federalism. A future IDA allocation would further support the implementation of the IP and contribute to generating carbon reduction results for which Nepal could receive payments up to US$45 million. V. LESSONS LEARNED AND RECOMMENDATIONS (a) Active engagement and commitment by all parties are essential for successfully delivering the FIP IP. All relevant groups having a stake in Nepal’s forest resources were consulted during the preparation of the FIP IP. Stakeholders actively engaged in making decisions on the prioritization of FIP-financed projects and activities. For instance, during one of the consultations, in October 2016, some CSOs strongly urged the Government not to accept the loan provided by the FIP. In their opinion, Nepal, as a least-developed country, has played no role in contributing to climate change. Therefore, climate finance provided to Nepal should only be grants. In addition, they believed, grants would also encourage community forest user groups to continue conserving the forests. Other stakeholder groups such as the private sector and MoF stressed that forestry is a productive sector that contributes to income generation, employment creation, and poverty reduction—hence, the Government believed that concessional loans would be an appropriate instrument for investments. The inclusive and participatory consultation process and commitment by all stakeholder groups resulted in a compromise to move forward with the FIP IP development process. (b) Strong technical support coordinated across different programs allowed for an IP that is based on available and newly produced scientific data and reflects a common vision for Nepal’s forests sector endorsed by all stakeholders. The REDD IC led the preparation of this FIP IP with the support of a national-level consultant team and under the guidance of a FIP IP Steering Committee established for the purpose. The World Bank hired a strong technical forest expert with experience working in Nepal who supported the REDD IC in leading the FIP IP development process. The FIP IP built on strong analytical work produced under the REDD+ readiness project, including a study on drivers of deforestation and forest degradation and the identification of priority investment areas. Page 13 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) (c) Nepal is engaged in all three phases of REDD+, which has provided an opportunity for developing a long-term and strategic engagement in Nepal’s forestry sector. The overlap of several forest-related activities supported under REDD+ and other forest-related climate programs under the same ministry and unit (REDD IC) allowed for a good coordination and use of technical documentation and dialogue forums as well as the use of capacity built through the REDD+ readiness process. (d) The involvement and consultation with all relevant stakeholder groups in Nepal’s forestry sector during the preparation period was essential for the successful delivery of the FIP IP. The preparation of the FIP IP involved a national consultative process during June–October 2017 to raise awareness among different stakeholders and interest groups about the FIP and to seek inputs and suggestions including identification of areas of concern and opportunities in Nepal’s forestry sector. Based on earlier analysis of national-level stakeholder consultations in Nepal,8 attempts were made to improve the design of the consultative process to identify new and more effective means of reaching a larger number of people including the use of workshops, focus groups discussions, and key informant interviews considering the relatively limited time and resources available. Some of the newer tools, especially the use of focus group discussions with specific stakeholder groups, were found to be effective. (e) Concurrent development of the DGM and FIP IP increased the trust and willingness of the IPLC to engage in the Government-led process for defining investment priorities and securing FIP resources. The development of the DGM will strengthen the technical capacity of IPLC, including women, and other forest-dependent poor people to participate fully in FIP IP-related activities and REDD+ programs at local, state, and national levels. Through the FIP investment project and the DGM, the communities’ capacity will be developed to sustainably manage forests through community-based forest management groups, on-the- job training on forest management, timber utilization, skills development to seek employment in the forestry sector, making handicrafts and marketing, and so on. The concurrent discussion on the FIP IP and the DGM as well as mutual support by the groups for each initiative created an atmosphere of trust and willingness to collaborate in and support efforts to improve Nepal’s forest management agenda. (f) Lack of clarity and clear communication by the CIF Administrative Unit (TF unit) on status and prospects for follow-up on funding intentions introduced midstream risks for the GoN and the World Bank. At the December 2017 FIP Subcommittee meeting, the CIF Administrative Unit informed the task team that the FIP is currently experiencing a funding shortfall of US$51 million, especially related to available grant resources. During the FIP IP process in Nepal, the discussion on the use of grants versus loans was one of the central issues discussed. The IPLC was especially vocal and politically sensitive to the use of grant resources as these groups did not want to be burdened with a loan for actions that were linked to the global climate agenda. Better communication and consideration of the sensitivities would have helped convey a more nuanced message to an ongoing challenge. 8For example, Bastakoti, R., and Davidsen C. 2015. “Nepal’s REDD+ Readiness Preparation and Multi-Stakeholder Consultation Challenges.� Journal of Forest and Livelihood 13 (1). Page 14 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) This is still a challenge and discussions between the ENR GP and the CIF Administrative Unit are ongoing. . Page 15 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: The objective of this project was to support the Government of Nepal with the preparation of Nepal's Forest Investment Plan and enhance its capacity for implementation. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion FIP Investment Plan for Nepal Yes/No N Y N Y reflects the results from a participatory development 15-Dec-2016 15-Dec-2016 28-Sep-2018 process Comments (achievements against targets): The Nepal FIP Investment Plan was developed through a highly participatory process over the course of one year. The plan was also endorsed by the Nepalese FIP Steering Committee which is led by the Secretary of MoFSC. The FIP-IP was endorsed by the FIP Sub-Committee on December 13, 2017. The FIP IP with its agreed goal to ‘Strengthen resilience of forest ecosystems for emissions reductions and increased environmental, social and economic benefit’ at a time of major political transformation pr ovides a comprehensive vision for a more effective and efficient way of managing Nepal’s forest resources in a sustainable manner. Supported by the new constitution, Nepal is in a fundamental transformation process moving toward federalism. Decision power on natural resources, including forests, is being devolved from the national level to provincial and municipal levels. The proposed investments in the FIP IP support the devolution process while also improving the existing forest management modalities such as community-based forest management. The five projects presented in the IP address Nepal’s main challenges and opportunities to sustainably manage forests, thereby im proving the livelihoods of forest-dependent people. Cumulatively, the five projects will contribute to reducing 1.5 million tons CO2eq in emissions over an eight-year project period, contributing significantly to Nepal’s ERP in the Terai Arc Landscape and toward Nepal’s Nationally Deter mined Contributions to the United Nations Climate Change Convention goals. The plan was modularized into separate projects to help attract Page 16 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) funding and for coherence of focus but may be combined or aggregated depending on finance source and timing. Project 1 will scale up and support the transfer of forest management responsibilities from the Government to community groups. Project 2 will link community forest user groups with private entrepreneurs to improve timber harvesting and to set up small- and medium-size timber utilization industries. Project 3 will establish plantations of fast-growing tree species on degraded and underutilized agricultural land in the hills and Terai region. Project 4 will create livelihoods and income-earning opportunities by introducing ecotourism activities in selected forest areas straddling the border to India. Project 5 will manage watersheds through innovative technologies, thereby addressing flood and excessive sedimentation risks downstream, including in India. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Active inter-ministerial Yes/No N Y N Y committee 15-Dec-2016 15-Dec-2016 28-Sep-2018 Comments (achievements against targets): The plan was endorsed by the Nepalese FIP Steering Committee (inter-ministerial committee) which is led by the Secretary of the Ministry of Forest and Environment (MoFE) (former MoFSC). Members included: MoF, National Planning Commission and the Ministry of Agriculture. The FIP-IP was endorsed by the FIP Sub-Committee on December 13, 2017. In addition, the plan was endorsed by the REDD+ Working Group which has members from indigenous peoples and local community groups as well as the Ministry of Forest and Environment. A.2 Intermediate Results Indicators Component: Analytical Work Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion A series of technical and social Number 0.00 3.00 6.00 Page 17 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) studies and assessment that 15-Dec-2016 15-Dec-2016 28-Sep-2018 have informed the Investment Plan. Comments (achievements against targets): The REDD IC led the preparation of the FIP IP with the support of a national-level consultant team with international backstopping and coordination and under the guidance of a national FIP IP Steering Committee established for the purpose. Representatives from the World Bank in Washington, DC, and Kathmandu also attended many meetings and discussions. The initial basis of the FIP IP was a core set of assessments and analytical studies supported through the REDD+ readiness project and data and information generated during the extensive consultation process. These studies and assessments included: (a) Drivers of deforestation and forest degradation; (b) Capacity assessment of government agencies and other relevant stakeholder groups; (c) Assessment of challenges and opportunities for Nepal’s forests and the forestry sector; (d) Analysis of the forest portfolio of development partners; and (e) Capturing lessons from the implementation of the Multi-Stakeholder Forest Program supported by the U.K. Department for International Development (DFID), the Swiss Development Cooperation, and the Government of Finland. Component: Stakeholder Consultations Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Potential co-financing partners Number 0.00 2.00 3.00 identified and donor coordination 15-Dec-2016 15-Dec-2016 28-Sep-2018 Comments (achievements against targets): During the preparation phase of the Nepal’s FIP IP, key stakeholders and development partners, both locally and internationally, were closely consulted. The GoN’s main ministries such as the Ministry of Forests and Soil Conse rvation and its different departments, the MoEP, and the Ministry of Livestock Development; representatives from the private sector including entrepreneurs in the forest sector; trade and industry federations; banks and other financial institutions; community-based organizations; civil society including NGOs; and international development entities such as the World Bank, the Food and Agriculture Organization of the United Nations (FAO), UN REDD, DFID, German Agency for International Cooperation (Deutsche Gesellschaft fur Internationale Page 18 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) Zusammenarbeit), and the Swiss Agency for Development and Cooperation participated in various consultations. In July 2018, the REDD IC held a workshop with various development partners to raise, in addition to the allocated FIP resources, funding for the implementation of the FIP IP and the ERP. These fund-raising efforts will continue during the investment project preparation period and the finalization of the FCPF Emission Reduction Payment Agreement. The World Bank is currently developing the ‘Forest for Prosperity’ project which will be financed initially with FIP resources—there is an opportunity to add IDA19 resources and develop a longer-term forest engagement in Nepal. However, while some other development partners have shown some initial interest in the FIP, no development partners have yet confirmed their support for the Nepal’s forestry sector. Three development partners that have shown the greatest interest to date are the Eur opean Investment Bank, the European Commission and the Government of Korea. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Content of FIP Investment Plan Number 0.00 3.00 20.00 and DGM dissiminated through dedciated events 15-Dec-2016 15-Dec-2016 28-Sep-2018 Comments (achievements against targets): The preparation of the FIP IP was closely linked with the development of a plan for Nepal’s DGM to ensure that the future investment project(s) and the DGM activities were fully complementary and main priorities addressed. All major stakeholder groups in Nepal’s forestry sector were involved and/or consulted during the preparation of the FIP IP, including the GoN (the Ministry of Forests and Soil Conservation and its different departments, MoEP, Ministry of Livestock Development, MoF, and National Planning Commission); representatives from the private sector including entrepreneurs in the forest sector; trade and industry federations; banks and financial institutions; community-based organizations including community-based forest user groups in different parts of the country; civil society including NGOs, federations, and associations and their members; individual experts; representatives o f Nepal’s development partners and international NGOs; and elected representatives (at a local level). During the consultative process, participants representing different stakeholder groups and their constituencies were encouraged to identify additional priorities, make suggestions, and initiate new investment ideas. Although a diversity of suggestions arose, these mostly represented potential investments that had already been identified in the draft REDD+ strategy, although with more details based on actual experiences, local innovations, and stakeholder perceptions. Suggestions for implementation modalities and roles for specific forest sector institutions were also commonly shared. A common issue raised during the consultative process was that the identified drivers of deforestation and forest degradation in the draft Page 19 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) REDD+ strategy were not necessarily equally important. Several consultations and outreach events took place with representatives of the main federations representing IPLC in Nepal’s forestry sector including Nepal Federation of Indigenous Nationalities (NEFIN), Federation of Community Forest User Groups of Nepal (FECOFUN), Association of Collaborative Forest User Groups of Nepal (ACOFUN), Dalit Association for Natural Resources (DANAR), and Himalayan grassroots women’s natural resource management association of Nepal (HIMAWANTI). Consultation and outreach events events were held in 17 districts with a total of 1,042 participants. Component: Capacity Building Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Govt institutions provided w/ Number 0.00 3.00 0.00 3.00 capacity buildg to improve mgt of forest resources 15-Dec-2016 15-Dec-2016 28-Sep-2018 Comments (achievements against targets): The FIP IP process has created strong ownership for the sustainable forest management agenda for Nepal, which is now guiding the preparation of an investment project with FIP financing. The three major workshops on FIP created awareness and capacity created on the FIP IP process, including main principles of operations, are highly relevant for the preparation and implementation of future investment transforming Nepal's forest sector from a conservation and subsistence operated model to a conservation and sustainable production model. The DGM project that will complement the larger investment has already advanced (national steering committee has been selected) and provided an immediate opportunity for the indigenous peoples and local community groups to apply the new knowledge on the FIP in advancing the preparation of the DGM. Component: Finalizing FIP Investment Plan for Nepal Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion A series of technical and social Number 0.00 3.00 6.00 Page 20 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) studies and assessment that 15-Dec-2016 15-Dec-2016 28-Sep-2018 have informed the Investment Plan. Comments (achievements against targets): The REDD IC led the preparation of the FIP IP with the support of a national-level consultant team with international backstopping and coordination and under the guidance of a national FIP IP Steering Committee established for the purpose. Representatives from the World Bank in Washington, DC, and Kathmandu also attended many meetings and discussions. The initial basis of the FIP IP was a core set of assessments and analytical studies supported through the REDD+ readiness project and data and information generated during the extensive consultation process. These studies and assessments included: (a) Drivers of deforestation and forest degradation; (b) Capacity assessment of government agencies and other relevant stakeholder groups; (c) Assessment of challenges and opportunities for Nepal’s forests and the forestry sector; (d) Analysis of the forest portfolio of development partners; and (e) Capturing lessons from the implementation of the Multi-Stakeholder Forest Program supported by the U.K. Department for International Development (DFID), the Swiss Development Cooperation, and the Government of Finland. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Govt institutions provided w/ Number 0.00 3.00 0.00 3.00 capacity buildg to improve mgt of forest resources 15-Dec-2016 15-Dec-2016 28-Sep-2018 Comments (achievements against targets): The FIP IP process has created strong ownership for the sustainable forest management agenda for Nepal, which is now guiding the preparation of an investment project with FIP financing. The three major workshops on FIP created awareness and capacity created on the FIP IP process, including main principles of operations, are highly relevant for the preparation and implementation of future investment transforming Nepal's forest sector from a conservation and subsistence operated model to a conservation and sustainable production model. The DGM project that will complement the larger investment has already advanced (national steering committee has been selected) and provided an immediate opportunity for the indigenous peoples and local community groups to apply the new knowledge on the FIP in advancing the preparation of the DGM. Page 21 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) Component: Project Management Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Govt institutions provided w/ Number 0.00 3.00 0.00 3.00 capacity buildg to improve mgt of forest resources 15-Dec-2016 15-Dec-2016 28-Sep-2018 Comments (achievements against targets): The FIP IP process has created strong ownership for the sustainable forest management agenda for Nepal, which is now guiding the preparation of an investment project with FIP financing. The three major workshops on FIP created awareness and capacity created on the FIP IP process, including main principles of operations, are highly relevant for the preparation and implementation of future investment transforming Nepal's forest sector from a conservation and subsistence operated model to a conservation and sustainable production model. The DGM project that will complement the larger investment has already advanced (national steering committee has been selected) and provided an immediate opportunity for the indigenous peoples and local community groups to apply the new knowledge on the FIP in advancing the preparation of the DGM. Page 22 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) B. ORGANIZATION OF THE ASSESSMENT OF THE PDO Objective: The objective of this project is to support the Government of Nepal with the preparation of Nepal’s Forest Investment Plan and enhance its capacity for implementation 1. FIP Investment Plan for Nepal reflects the results from a participatory development process (Date) Outcome Indicators 2. Government institutions provided w/ capacity building to improve management of forest resources (number) 3. Active inter-ministerial committee (or equivalent) • Series of technical and social studies and assessments that have informed the Investment Plan • Government institutions provided w/ capacity building to improve management of forest Intermediate Results Indicators resources • Potential co-financing partners identified and donor coordination • Content of FIP Investment Plan and DGM disseminated through dedicated events 1. Analytical Work Key Outputs 2. Endorsed FIP IP for Nepal (linked to the achievement of the Objective) Page 23 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) . ANNEX 2. PROJECT COST BY COMPONENT Amount at Approval Actual at Project Percentage of Components (US$, millions) Closing (US$, millions) Approval (%) Analytical Work 0.070 0.070 28 Stakeholder Consultations 0.075 0.075 30 Finalizing FIP Investment Plan for Nepal 0.050 0.050 20 Project Management 0.025 0.025 10 Capacity building 0.030 0.030 12 Total 0.250 0.250 100 Page 24 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) ANNEX 3. RECIPIENT, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS Page 25 of 26 The World Bank Nepal - Forest Investment Plan Preparation Grant (P160523) ANNEX 4. SUPPORTING DOCUMENTS (IF ANY) (a) FIP Investment Plan for Nepal, November 2017 (b) Forest Investment Program (FIP), Joint Mission, Aide Memoire, October 17–26, 2016 (c) Forest Investment Program (FIP) and Forest Carbon Partnership Facility (FCPF) Second Consultative Mission, Aide Memoire, February 13–17, 2017 (d) Nepal: Forest Carbon Partnership Facility (FCPF) and Forest Investment Program (FIP) Implementation Status Review, Aide Memoire, April 9–14, 2018 (e) Implementation Status and Results Report, June 25, 2018 Page 26 of 26