INTERNATIONAL TROPICAL TIMBER ORGANIZATIONINTERNATIONAL TROPICAL TIMBER ORGANIZATIONInternational Organizations Center, 5th Floor, Pacifico-Yokohama, 1-1-1, Minato-Mirai, Nishi-Ku, Yokohama, 220-0012, Japan
Tel 81-45-223-1110 Fax 81-45-223-1111 Email itto@itto.or.jp Web www.itto.int© ITTO 2009

ITTo

GI SERIES

13

Manual for project formulation
Third edition

2009

MANUAL FOR PROJECT FORMULATION – THIRD EDITION	
GI SERIES 13

ITTo

GI SERIES

13

Manual for project formulation
Third edition

2009

INTERNATIONAL TROPICAL TIMBER ORGANIZATION

ITTO Manual for project formulation

1

ITTO Manual for project formulation
Third Edition
General Information Series #13
The International Tropical Timber Organization (ITTO) is an intergovernmental organization promoting the conservationand sustainable management, use and trade of tropical forest resources. Its 60 members represent about 80% of theworld’s tropical forests and 90% of the global tropical timber trade. ITTO develops internationally agreed policy
documents to promote sustainable forest management and forest conservation and assists tropical member countries
to adapt such policies to local circumstances and to implement them in the field through projects. In addition, ITTO
collects, analyses and disseminates data on the production and trade of tropical timber and funds projects and otheractions aimed at developing industries at both community and industrial scales. All projects are funded by voluntary
contributions, mostly from consumer member countries. Since it became operational in 1987, ITTO has funded more than
750 projects, pre-projects and activities valued at more than US$300 million. The major donors are the governments ofJapan, Switzerland and the United States.
© ITTO 2009This work is copyright. Except for the ITTO logo, graphical and textual information in this publication may be reproduced
in whole or in part provided that it is not sold or put to commercial use and its source is acknowledged.
ISBN 4-902045-47-8
Cover photo: E. Mueller

2

ITTO Manual for project formulation

Foreword
This third edition of the ITTO Manual for Project Formulation will be an invaluable resource formember countries as they seek assistance, through ITTO-funded projects, in pursuing ITTO’s
objectives in general and the ITTO Objective 2000 in particular. It should be used to guide thedesign, content and format of project and pre-project proposals to be submitted to ITTO.
The second edition of the ITTO Project Formulation Manual was published in May 1999. This third
edition takes into account the experiences gained in the formulation, appraisal, implementation andevaluation of over 500 projects and pre-projects submitted to ITTO by member countries in the
period 1999–2007. It also accommodates the recommendations made in various decisions of theInternational Tropical Timber Council, reports of ITTO’s Expert Panel for the Technical Appraisalof Project and Pre-project Proposals, ITTO project evaluation reports, and reports of ad hoc ITTO
working groups and expert panels. It has been produced simultaneously with the ITTO Manual onStandard Operation Procedures, which constitutes the framework for the entire ITTO project cycle
and contains procedural and organizational elements which are also relevant to project formulation.
This third edition of the ITTO Project Formulation Manual, which should be used in conjunction
with the ITTO ProTool software, is simpler and more user-friendly than its two predecessors. I haveno doubt that it will greatly assist ITTO member countries in preparing project proposals for
submission to ITTO and, in the long run, help to increase the value of projects.
Emmanuel Ze Meka
Executive Director
Yokohama, December 2008

ITTO Manual for project formulation

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4

ITTO Manual for project formulation

Table of Contents
Foreword. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

3

Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

7

Acronyms and Abbreviations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

8Chapter I

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

9What is a project?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

9What is a project proposal?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

9The logical framework approach. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

11

The project cycle. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

13

Submitting project proposals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

14

Chapter II

Project Formulation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

16

Project brief. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

16

Cover page and table of contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

16

Map of project area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

17Part 1: Project context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

19

Origin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

19

Relevance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

20Target area. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

21

Expected outcomes at project completion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

21Part 2: Project rationale and objectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

22

Rationale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

23

Objectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

36Part 3: Description of project interventions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

39

Outputs and activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

39

Implementation approaches and methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

42Work plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

42Budget. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

45

Assumptions, risks and sustainability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

55

Part 4: Implementation arrangements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

58

Organizational structure and stakeholder involvement mechanisms. . . . . . . . . . 

58

Reporting, review, monitoring and evaluation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

61

Dissemination and mainstreaming of project learning. . . . . . . . . . . . . . . . . . . . . . 

61

Project proposal annexes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

63Annex 1: Profile of the executing agency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

63Annex 2: Curricula vitae of personnel provided by executing agency . . . . . . . . . 

63Annex 3: Terms of reference of key personnel and consultants to be
funded by ITTO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

63

ITTO Manual for project formulation

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Chapter III

Small Project Formulation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

64

Chapter IV

Pre-Project Formulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

68

Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

72

Glossary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

73

Appendix A Guidelines for ensuring stakeholder participation in the project cycle. . . . . . 

78

Appendix B Guidelines to take account of the environmental impact of projects. . . . . . . 

82

Appendix C Examples of logical framework matrices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

86

List of Tables
Table 1

Format of a project proposal cover page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

17

Table 2

Table of contents for ITTO project proposal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

18

Table 3

Example of stakeholder analysis table: East coast mangrove project,
Republic of Silvania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

26

Table 4

Example of stakeholder analysis table: Project to strengthen timber
processing capacity, northern Silvania. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

27

Table 5The logical framework matrix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

33

Table 6

Example of work plan for project of 3-year duration . . . . . . . . . . . . . . . . . . . . . . . 

44

Table 7

Budget categories and layout of yearly budget by source. . . . . . . . . . . . . . . . . . . 

47

Table 8

Example of master budget table, Northern Hills Forest Reserve project. . . . . . . . 

49

Table 9Consolidated budget by component. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

51

Table 10

Example of ITTO yearly budget. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

53

Table 11

Example of executing agency yearly budget. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

54

Table 12

Contents of an ITTO small project. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

65

Table 13

Format of an ITTO pre-project proposal cover page . . . . . . . . . . . . . . . . . . . . . . . . 

69

Table 14

Contents of an ITTO pre-project proposal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

70

List of Figures

6

Figure 1

Project conceptual model. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

12Figure 2

Stages in an ITTO project. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

13

Figure 3

Steps in ITTO project formulation, appraisal and approval . . . . . . . . . . . . . . . . . . 

15

Figure 4

The problem tree . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

28

Figure 5

The four basic steps in problem tree analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

28

Figure 6

Example of a problem tree, Northern Hills Forest Reserve . . . . . . . . . . . . . . . . . . 

29

Figure 7

Turning problems into solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

30

Figure 8

Example of an objectives tree, Northern Hills Forest Reserve . . . . . . . . . . . . . . . . 

32

Figure 9

The logical role of assumptions in the logical framework matrix . . . . . . . . . . . . . 

35

Figure 10

The order in which the logical framework matrix should be completed. . . . . . . . 

35

Figure 11

Work breakdown structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

42

Figure 12

Decision tree for the analysis of assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

56

Figure 13

Organizational structure, Northern Hills Forest Reserve project . . . . . . . . . . . . . . 

60

ITTO Manual for project formulation

Summary
Since its inception, ITTO projects have helped member countries to link policy development withaction on the ground. Projects can lead to direct improvements in the forests sector and also help
members to develop their human resources. This manual is a step-by-step guide to the preparationof project proposals suitable for submission to ITTO for funding.
ITTO uses the logical framework approach in project design. This rigorous, objectives-oriented
methodology starts with a project idea and progresses with a stakeholder analysis, a needs assessment,
and the identification of the key problem and its causes and effects. The diagnostic process leads tothe definition of project objectives and interventions. The design is summarized in a logical frameworkmatrix, which sets out, in tabular form, the intervention strategy, measurable indicators, means ofverification, and the key assumptions. A monitoring and evaluation system must also be created.
Project proposal formulation requires the involvement of stakeholders in the identification of needs,interests, conflicts, resources, potentials, capacities and responsibilities and the review of all issues
that might influence project implementation.
Chapter I of the manual defines concepts such as project, project proposal, project cycle, the logicalframework approach, inputs, activities and outcomes. It sets out the three types of ITTO proposals:
project, small project and pre-project. It presents a conceptual model of an ITTO project and describes
the process for preparing and submitting project proposals.
Chapters II explains how to prepare a full ITTO project proposal, guiding formulators through suchaspects as conformity with ITTO’s objectives and priorities, relevance to the submitting country’s
policies, the social, cultural, economic and environmental aspects of the target area, the project rationale,
stakeholder analysis, problem analysis, the logical framework matrix, the objectives, outputs and activities,
the work plan and budget, assumptions, risks and sustainability, and implementation arrangements.
Chapter III provides guidance for formulators of small project proposals. A small project has a durationthat does not exceed two years and seeks funds from ITTO not exceeding US$150,000. As in thecase of a full-sized project, the formulators must provide an adequate justification, indicating theneeds that will be addressed. They must describe how those needs will be addressed through the choiceof strategy, and present a work plan and budget. Chapter IV sets out requirements for the formulationof pre-project proposals. Appendix A provides additional guidelines for ensuring stakeholder
participation in the project cycle, Appendix B guidelines to take account of the environmental
impact of projects, and Appendix C an example of a completed logical framework matrix.

ITTO Manual for project formulation

7

Acronyms and Abbreviations

8

EA

Executing Agency

ITTA

International Tropical Timber Agreement

ITTO

International Tropical Timber Organization

Logframe

Logical framework matrix

NTFP

Non-timber forest productNGO

Non-governmental organization

SMART

Specific, measurable, appropriate, realistic, time-boundUS$

United States dollar

ITTO Manual for project formulation

Chapter I: Introduction
The objectives of the International Tropical Timber Agreement (ITTA), 2006 are to promote theexpansion and diversification of international trade in tropical timber from sustainably managed andlegally harvested forests and to promote the sustainable management of timber producing forests.
In order to achieve these two mutually reinforcing objectives, ITTO undertakes policy work andproject activities in an integrated manner. ITTO’s governing body, the International Tropical Timber
Council, uses an action plan to guide policy activities and to identify priorities for project work.
Since its inception, ITTO projects have helped member countries to link policy development withaction on the ground. Projects can lead to direct improvements in the forests sector and also help
members to develop their human resources. They can, for example:• Assist in national policy development (eg by helping to create a national standard for sustainable
forest management or supporting a revision of forestry laws)• Demonstrate good practice (eg through the establishment of a reduced impact logging
demonstration site or a pilot wood-processing plant)• Build capacity (eg by supporting training centres or assisting in the transfer of wood-processing
technology)• Carry out research (eg on the social impacts of mangrove forest protection or on export markets
for high-value products).
This manual guides project proposal formulators through each step of project (or pre-project)
identification and formulation. Chapter I provides an overview of the process, describing key
concepts such as the logical framework approach and the project cycle, the types of proposals thatcan be formulated and submitted, and principles to guide the development of proposals.
Chapter II sets out the project identification and formulation process, describing in detail the steps
that must be taken to prepare a high-quality project proposal. Examples are provided to help clarify
concepts. The contents of project proposal annexes are also described. Chapter III sets out therequirements for small project proposals and Chapter IV the requirements for pre-project proposals.
The appendices contain further guidance on stakeholder involvement in the project formulation
process and on taking into account potential environmental impacts.

What is a project?
A project is a time-bound intervention consisting of a set of planned and interrelated activities
executed to bring about a beneficial change. It has a start and a finish, involves a multidisciplinary
team collaborating to implement activities within constraints of cost, time and quality, and has ascope of work that is unique and subject to uncertainty. Projects link policy initiatives at a higher
level (eg national or sectoral) with a specific problem faced by a target group of local-level stakeholders
or by institutions or organizations.

What is a project proposal?
If a project idea is to be funded and implemented, its formulator must communicate it in a clear
and concise manner. To this end, a document known as a project proposal is written to summarize
the project rationale and design. It contains four parts (Table 1):• project context – comprising project origin, relevance, conformity with ITTO’s objectives andpriorities, relevance to the submitting country’s policies, description of the target area, andexpected outcomes at project completion

ITTO Manual for project formulation9• project rationale and objectives – comprising rationale, stakeholder analysis, problem analysis,
logical framework matrix, and objectives• description of project interventions – comprising outputs and activities, implementation
approaches and methods, work plan, budget, and assumptions, risks and sustainability• implementation arrangements – comprising organization structure and stakeholder involvement
mechanisms, reporting, review, monitoring and evaluation, and dissemination and mainstreamingof project learning.
ITTO recognizes three types of project proposals.
A project proposal is the most substantial document described in this manual and is required forany set of activities with a total ITTO budget of more than US$150,000; its formulation is set out
in Chapter II. The preparation of a project proposal requires substantial work to communicate andcoordinate with stakeholders, collect and analyse information, and draft an adequate document.
A small project proposal may be formulated for projects with a duration not exceeding two years
and requiring funds from ITTO not exceeding US$150,000. Chapter III sets out the requirements
for such proposals.
A pre-project proposal, described in Chapter IV, is designed to facilitate the set of preparatory and/or experimental activities necessary to formulate a project proposal. A pre-project might help to:• Describe a problem situation in detail, highlighting issues or factors that might interfere with or
facilitate the development of a full project• Identify stakeholders and describe in detail the characteristics and needs of beneficiaries and theeffect of the problem situation on them
• Collect baseline data against which to measure the effects and impacts of the project• Design a project.
Pre-projects differ from small projects in that the main outputs are project proposals. A pre-project
should assist in identifying the core problem to be addressed and the activities and outputs of the
anticipated project. Besides the project proposal, other outputs of a pre-project might include:
results of surveys and technical studies; and the identification of the anticipated project’s executing
agency and collaborating agencies. The relevance of the anticipated project proposal to ITTO willbe crucial to the pre-project’s acceptance. Therefore, the pre-project proposal should clearly explain
the preliminary rationale and objectives of the anticipated project proposal.

Regional or global projects
If an ITTO member plans to submit a project proposal that involves activities that will take placein the territory of another member, it should formally seek the agreement of the latter. A proposal
can also be developed that is regional or global in coverage. Global or regional proposals presented
by a single member should show evidence of support by the other countries involved. Such proposals
should include firm commitments from participating members to pursue common objectives
and conduct joint activities. They should be backed by letters of support from all participating
countries signed by the official ITTO contact point of each member (or a duly designatedrepresentative). Other documents showing how the project was conceived and designed
should also be submitted.

10

ITTO Manual for project formulation

The logical framework approach
ITTO uses the logical framework approach in project design. This is a rigorous, objectives-oriented
methodology, also known as objectives-oriented project planning. It starts with a project idea andprogresses with a stakeholder analysis, a needs assessment, and the identification of the key problem
and its causes and effects. This diagnostic process leads to the definition of project objectives andinterventions. The design is summarized in a logical framework matrix, or logframe, which sets out, intabular form, the intervention strategy, measurable indicators, means of verification, and key assumptions.
A monitoring and evaluation system must also be created. Project proposal formulation requires theinvolvement of stakeholders in the identification of needs, interests, conflicts, resources, potentials,
capacities and responsibilities and the review of all issues that might influence project implementation.
Figure 1 presents a conceptual model for ITTO project design, showing the basic elements of a project’s strategy
of intervention – inputs, activities, outputs, outcomes and impacts – needed to achieve desired results.
• Inputs are the means for executing activities, such as human resources, equipment, facilities,
expendables, spare parts, financial resources and time.
• Activities are the actions – such as training, mapping, surveys and extension – that transform
inputs into outputs.
• Outputs are the goods and services that a project produces and delivers to beneficiaries.
• An outcome is the change that is brought about under the influence of the project.
• An impact is a longer-term effect of the project intervention.
• A result is a describable or measurable change that is derived from a cause-and-effect relationship:
it can be an output, an outcome or an impact.
Working backwards, the project proposal formulator identifies the outcomes that are needed toachieve the desired impact, the outputs needed to achieve the desired outcomes, the activities thatmust be carried out to achieve the outputs, and the inputs needed to carry out the activities. With
this model, the focus of the project management cycle is on intended outcomes and impacts. Thisis far preferable to focusing on outputs and activities, which tends to direct attention to the use ofplanned inputs and diminishes the potential for achieving the desired outcomes.
The formulation of all project proposals submitted to ITTO should follow this model. The proposal
must describe which actions will be taken by the project at three levels – inputs, activities and outputs– in order to bring about change. The design of project interventions is based on these three elements.
An intervention is therefore the strategic combination of inputs, activities and outputs.
If the project is executed as planned and if its assumptions are sound, its outputs should lead to outcomes.
ITTO considers that a project proposal is of an acceptable quality if it has satisfied the assessment
criteria of the ITTO Expert Panel for the Technical Appraisal of Project and Pre-project Proposals.
In assessing proposals, this Expert Panel takes into account:• Their relevance to the objectives of the ITTA and the requirement that projects and pre-projects
should contribute to the achievement of one or more of the Agreement’s objectives• Their environmental and social effects• Their economic effects• Their cost-effectiveness• The need to avoid duplication of efforts• Where applicable, their relationship and integration with ITTO policy work and their consistency
with the ITTO Objective 2000 and the ITTO guidelines series and other ITTO policy documents.1
1

Including the ITTO Guidelines for Sustainable Management of Natural Tropical Forests, the ITTO Guidelines for the
Establishment and Sustainable Management of Planted Tropical Production Forests, the ITTO Guidelines for the Conservationof Biological Diversity in Tropical Production Forests, and the ITTO Guidelines on Fire Management in Tropical Forests,

ITTO Manual for project formulation

11

Figure 1: Project conceptual model
How?

InputsWhat do we want?

Activates

Why?

Outputs

Outcomes

Impacts

Intermediate
results(intermediateusers)

End-of-project
results(end users)

Long term
results(society)

Principles of ITTO project proposals
The following eleven principles should guide the development of project, small project, and preproject proposals:
1) Focus on outcomes2) Promote local ownership of the project and its results3) Work in partnership with others, building alliances and partnerships4) Ensure accountability by seeking ways in which executing agencies and their partners can beheld accountable to stakeholders
5) Pay due attention to the social dimension of development projects
6) Promote empowerment of local communities to fully participate in the management of forest
resources by supporting their rights, responsibilities and aspirations
7) Seek sustainable results by developing strategies and approaches to ensure lasting benefits
for target groups, including sustainable incomes8) To maximize the impact of the project in the country or region concerned, promote actions
that have wider value
9) Promote innovation by supporting elements such as the application of new technologies,
the testing of new scientific methods and policy reforms, and the design of methods ofstakeholder participation
10) Demonstrate a sound scientific, technical and economic foundation
11) Develop mechanisms to ensure proper disclosure and the sharing of information.

12

ITTO Manual for project formulation

The project cycle
Project formulation is one phase in the project cycle: it is the process by which solutions to the causesof a problem are identified and a structure created for their implementation. Its aim is to set out themost efficient and effective means for achieving a desired change. A project cycle has six stages: identification,
formulation, appraisal and approval, funding, implementation, and evaluation (Figure 2).
Figure 2: Stages in an ITTO project
Identification

Evaluation

Formulation

Monitoring,
progress reports,
completion report

Submission
to ITTO

Implementation

Inception

Appraisal and Approval

Funding

The management of these six stages is the responsibility of the executing agency, but it must also fit
in with ITTO’s 9-stage project cycle, which is the Organization’s framework for identifying, formulating,appraising, approving, financing, implementing and evaluating projects and pre-projects. The ninestages are:1) Identification
2) Formulation
3) Submission to ITTO
4) Appraisal and approval5) Funding6) Inception7) Implementation

ITTO Manual for project formulation

138) Monitoring (including progress and completion reports)
9) Evaluation.
Figure 3 shows how the formulation of an individual project fits into the ITTO project cycle.
Relationship to other manuals
This manual is complemented by a set of other project-related manuals and guidelines, comprising:• The ITTO Manual on Project Standard Operating Procedures, which contains procedures thatshould be followed for the entire cycle of the project (see below)• The ITTO Manual on Project Monitoring, Review, Reporting and Evaluation (third edition),
which provides guidance to executing agencies and the ITTO Secretariat on the procedures for
implementing, monitoring and evaluating projects. It also contains advice for executing agencies
on setting up and implementing monitoring systems and producing reports.
• ITTO Guidelines for the Selection and Employment of Consultants and Procurement ofGoods and Services (second edition), which governs the selection and employment of consultants,
and the procurement of goods and services.
• The ITTO ProTool software and accompanying ITTO ProTool User’s Manual, which greatly
facilitate project proposal development, budgeting and monitoring.
Project proposal formulators and executing agencies should be fully aware of the requirements set
out in these manuals and guidelines for project formulation, implementation, monitoring and evaluation.
The use of ITTO ProTool for formulating project, small project, and pre-project proposals isstrongly encouraged. All these documents and tools are available on the ITTO website.

Submitting project proposals
ITTO project and pre-project proposals are usually developed by a proponent in an ITTO member
country in consultation with the ITTO official contact point.2 Only ITTO member countries, throughthe official contact point, may submit project or pre-project proposals to ITTO for financing.3 To
be considered for funding, project proposals must show how they will contribute to the achievementof the objectives of the ITTA and one or more of the priority areas of work or thematic programs
identified in the Organization’s action plan. Each project and pre-project proposal is appraised by
the ITTO Expert Panel for the Technical Appraisal of Project and Pre-project Proposals using thecriteria and appraisal system approved by the Council. Based on this appraisal, the Expert Panel makes
recommendations to the Council’s technical committees about the relevance and suitability of proposals.
Project and pre-project proposals must be submitted in one of the ITTO working languages –English, French or Spanish. They should adhere to the correct format, the principles of good project
design, and other guidance set out in this manual. No section or subsection of the format should
be excluded; if the project formulator believes certain sections or subsections do not apply to a
specific proposal, he or she should justify this belief in writing under the relevant heading. The project
document should not exceed 33 pages and additional supporting information should be containedin annexes. Proposals should be presented in Arial font with a point size of 10. A hard copy of the
proposal printed on A4-sized paper, and an electronic copy in Microsoft Word format saved on a compact
disk or in another convenient format, should be submitted.

2
3

14

The contact details of ITTO official contact points can be obtained from the ITTO Secretariat.
Under the ITTA, 2006, the ITTO Executive Director is also able to formulate and submit project and pre-project proposals.

ITTO Manual for project formulation

Figure 3: Steps in ITTO project formulation, appraisal and approval
Proponent Level

Official ITTO
Contact Point

1 Initial project idea

2 Check the relevance withcontact point. Decision to
identify a project

3 Elaborate a project concept

4 Project concept to thecontact point. Decision toproceed with formulation

ITTO Level

5 Institutional and stakeholder analysis

6 Problem and objectives analysis

7 Definition of objectives and design ofinterventions (outputs and activities)
8 Identification of assumptions
and preconditions

9 Definition of indicators

10 Completion of logical framework matrix

11 Work plan and budget

12 Finalize proposal writing

13 Appraisal by contact
point and national
clearing house

14 Project submitted
to ITTO

17 Proponent makes necessary revisions

16 Contact point receives
Expert Panel’s
recommendations

15 Appraisal by
ITTO Expert Panel(max. 2 revisions)
18 ITTO committee reviews
Expert Panel’s report

20 Contact point informedof Council decision

19 Council approves
proposal and decides
financing

ITTO Manual for project formulation

15

Chapter II: Project Formulation
This chapter explains, step by step, the project formulation process that project formulators should
follow in developing an ITTO project proposal. It should be used in conjunction with ITTO ProTool,a software package specifically designed to assist in the formulation of ITTO project proposals.

Project brief
The formulator should write a 2–3 page project brief that clearly sets out the key messages of the
proposal. It should:• Describe the existing situation and the problems to be addressed by the project• State the development and specific objectives and show how their achievement will be measured• Briefly describe the beneficiaries, expected outcomes and the main outputs that will lead to theseoutcomes• Briefly describe how the project will be implemented, and indicate how it will influence theparticipation of stakeholders• Indicate how the project’s results will be sustained after its completion and state whichorganizational structures will sustain those results• Describe the key assumptions and risks and how these risks will be mitigated• Indicate the budget amount requested from ITTO, the contribution of the executing agency,
and other funding sources. Of the ITTO budget, indicate the percentages allocated to personnel
and capital items.

Cover page and table of contents
Cover page
Table 1 shows the required format of a project proposal’s cover page. The project title should contain
20 words or less and reflect the project’s specific objective, or its key outcome, in order to indicate
what will be achieved at completion. Ideally, it will also refer to the project’s location. The following
is an example of an adequate project title:

The sustainable management of the timber production area in the Northern Hills Forest
Reserve, Republic of Silvania

The cover page contains an executive summary, which should consist of one paragraph of 10–15
lines. This summary should provide an overview of the proposal and be a compelling invitation todonors to read more. It should provide information on the following key questions:• What problems will be addressed, and where?
• What are the development and specific objectives, and the main outcomes at the completion of
the project?
• How will these objectives and outputs be met?
• How will the results be sustained when the project ends?

16

ITTO Manual for project formulation

The cover page also includes:• A serial number [project formulators should leave this blank, as it will be provided by ITTO on
submission of the proposal]• ITTO committee [ITTO has three technical committees: Reforestation and Forest Management,
Forest Industry, and Economic Information and Market Intelligence. If in doubt, formulators should
leave this field blank to be assigned by the ITTO Secretariat]• Name of submitting country• Original language• Executing agency (and collaborating agencies, if any)
• Duration• Approximate starting date
• Total project cost in US dollars, by potential funding source.
Table 1: Format of a project proposal cover page
International Tropical Timber Organization
ITTO
Project Proposal
Title[Reflect the specific objective of the project, or its key outcome]Serial Number[This will be provided by ITTO after submission of the proposal]

Committee[ie Reforestation and Forest Management (F) and/or
Forest Industry (I) and/or Economic Information andMarket Intelligence (M). if in doubt, leave blank]

Submitted By

Government of [name of member country]

Original Language[English, French or Spanish]

Summary[One paragraph of up to 15 lines providing a concise overview of the essential elements of the proposal]
Executing Agency[Full name of the proposed executing agency]

Duration[Estimated length of the project in months]

Approx. Starting Date

[Upon approval and financing]

Proposed budget and otherfunding sources:

SourceITTO
Government of [name of submitting country]
Total

Contribution (in US$)
––––
––––
––––

Table of contents
If the main text of the proposal is longer than ten pages, a table of contents (Table 2) should be included andplaced immediately after the cover page. All proposals should contain a list of abbreviations and acronyms.

Map of project area
For project proposals in which the geographic location is significant, including all proposals forfield-based projects, a map at an appropriate scale should be provided.

ITTO Manual for project formulation

17

ITTo

Table 2: Table of contents for ITTO project proposal
PartPart 1
1.1
1.2
1.2.1
1.2.2
1.3
1.3.1
1.3.2
1.4
Part 2
2.1
2.1.1
2.1.2
2.1.3
2.1.4
2.2
2.2.1
2.2.2
Part 3
3.1
3.1.1
3.1.2
3.2
3.3
3.4
3.4.1
3.4.2
3.4.3
3.4.4
3.5
3.5.1
3.5.2
Part 4
4.1
4.1.1
4.1.2
4.1.3
4.1.4
4.2
4.3
4.3.1
4.3.2
Annex 1
Annex 2Annex 3Annex 418

Heading
Project Brief
List of Abbreviations And Acronyms
Map of Project Area
Project Context
OriginRelevance
Conformity with ITTO’s objectives and priorities
Relevance to the submitting country’s policies
Target area
Geographic location
Social, cultural, economic and environmental aspects
Expected outcomes at project completion
Project Rationale and Objectives
Rationale
Institutional set-up and organizational issues
Stakeholder analysis
Problem analysis
Logical framework matrix
Objectives
Development objective and impact indicators
Specific objective and outcome indicators
Description of Project Interventions
Outputs and activities
Outputs
Activities
Implementation approaches and methods
Work plan
BudgetMaster budget schedule
Consolidated budget by component
ITTO budget by component
Executing agency budget by component
Assumptions, risks, sustainability
Assumptions and risks
Sustainability
Implementation Arrangements
Organization structure and stakeholder involvement mechanisms
Executing agency and partners
Project management teamProject steering committee
Stakeholder involvement mechanisms
Reporting, review, monitoring and evaluation
Dissemination and mainstreaming of project learning
Dissemination of project results
Mainstreaming project learning
Profiles of the executing and collaborating agencies
Tasks and responsibilities of key experts provided by the executing agency
Terms of reference of personnel and consultants and sub-contracts
funded by ITTO
Recommendations of ITTO expert panel

ITTO Manual for project formulation

Indicative no. of pages
2–3
0.5–1
1
1
1

2 + map

0.5
3 + figures

2
1

3

1 + figures
14

1

1.5 + figures

1
1

Part 1: Project Context
Part I of the proposal provides background information on the social, economic, cultural andenvironmental issues relevant to the project.

Part I: Project Context
1.1 Origin
1.2 Relevance1.2.1 Conformity with ITTO’s objectives and priorities
1.2.2 Relevance to the submitting country’s policies
1.3 Target area
1.3.1 Geographic location
1.3.2 Social, cultural, economic and environmental aspects
1.4 Expected outcomes at project completion

OriginEach project has an origin which may be:• A recommendation from a pre-project• An earlier project phase• A particular study• An ITTO diagnostic mission• A conference or workshop• An initiative from an interest group• An idea stemming from an institution or individual, etc.
When the origin is an earlier ITTO pre-project or project activity, the proposal should identify theorganizations that supported the implementation of that activity. It should also provide a shortsummary of the relevant findings and outcomes of the activity, show how the project will build on
them, and discuss the lessons learned from past evaluations of similar projects and how they havebeen taken into account in the formulation of the project proposal.

Under 1.1: Origin:• Where applicable, describe how the proposal derives from a recommendation of an ITTO
pre-project or a completed project phase, a particular study, etc.
• Identify the organizations that supported the implementation of the earlier activity thathas led to the current proposal.
• If the proposal stems from an ITTO pre-project, provide a short summary of the relevant
findings and show how the project will build on the outcomes.

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RelevanceConformity with ITTO’s objectives and priorities
The proposal must be in compliance with the objectives of the ITTA, 2006 (available on the ITTO
website); Article 1 of the Agreement indicates how these objectives can be met. The proposal should
quote the relevant paragraphs of Article 1 and explain how and to what extent the project willcontribute to these objectives. The proposal must also demonstrate conformity with the priorities
and operational activities specified in the current ITTO Action Plan (also available on the ITTO
website) by quoting the Action Plan’s relevant actions and activities and providing a short explanationof how it conforms with them. Decisions made from time to time by the International Tropical
Timber Council might also set policies and priorities, and these should also be considered.

Under 1.2.1: Conformity with ITTO’s objectives and priorities:• Explain briefly how the project is related to the objectives of the ITTA, 2006, as definedin its Article 1.
• Explain how the proposal is related to the priorities and operational activities set out inthe current ITTO Action Plan and in relevant ITTO decisions.

Relevance to the submitting country’s policies
The proposal should conform with the host government’s policies and strategies and complement
other efforts towards their implementation. Where these policies and strategies are nonexistent or
under formulation, the proposal should conform with stated government priorities. For national
projects, the proposal should indicate clearly how it takes advantage of an opportunity to help solvea particular problem. The problem might, for example, be:• A constraint (such as a lack of basic information)• A failure to exploit apparent opportunities (such as a continuing low production level or low
price for timber products)• The sub-optimal management of resources (for instance wasting potentially valuable forest byproducts).
The collection and analysis of information on the country’s forest development policies and programs
should therefore precede the formulation of a project proposal. For regional or global projects, theproposal should indicate clearly the project’s wider values and benefits and the ways and extent towhich it will contribute to the implementation or development of relevant national, regional or
global policies and programs. Deliverables should be replicable, and there should be a strategy forreaching out to the national level and to other ITTO members.

Under 1.2.2: Relevance to the submitting country’s policies:• Briefly describe how the project conforms to the host country’s forest policies.
• Indicate other existing relevant sectoral policies.

20

ITTO Manual for project formulation

Target area
Geographic location
Social, cultural, economic and environmental aspects
The proposal should include a map of the project area (see above) as well as descriptions of the locationand its social, economic, cultural and environmental contexts, making use of relevant data fromresearch or other reliable sources. As much as possible, key information should be presented intabular form, with short comments in the text, and should give the reader an effective snapshot of
the socioeconomic baseline and issues in the project area. The target population should be describedin sufficient detail, including an estimate of the number of beneficiaries, by social category or group(defined with quantitative and qualitative data). The target population could, for example, be disaggregatedinto groups such as men, women, youth, forest-dependent, poor households, elites, etc.
One of the key criteria for a project proposal is compliance with the requirements of the host country’s
environmental legislation and relevant international conventions. The proposal should describe
environmental aspects of the project area. Appendix B of this manual provides guidelines for taking
into account the environmental impact of projects; this should be consulted at the stage of project
identification.

Under 1.3.1: Geographic location:• Briefly describe the location of the proposed project, referring to the location map.
• If relevant, provide a short description of the area’s major physical features and ecologicalcharacteristics as they pertain to the project.
Under 1.3.2: Social, cultural, economic and environmental aspects:• Describe the social, cultural, economic and environmental background of the project areaat the time of project identification.
• Provide appropriate demographic and social data for the people living in the project area.

Expected outcomes at project completion
The project proposal should describe the intended changes (outcomes) that the project will bringabout for the beneficiaries and other stakeholders – that is, the effect that will be gained by achieving
the specific objective. The specific objective will be achieved if all the outputs have been realized andthe assumptions about their effects have proved valid. The outcomes should be clearly described interms of:• Envisaged use of the outputs by the beneficiaries after the completion of the project• Other consequences of project implementation: eg changes in awareness and attitudes, timber
supply, markets, land use or the environment.
Section 1.4 of Part I should be written after the logical framework matrix has been completed basedon the information provided in the indicators of the specific objective.

ITTO Manual for project formulation

21

Under 1.4: Expected outcomes at project completion:
Describe the main outcomes that the project will achieve at or before completion.
The description should address the following questions:• What are the intended immediate effects of the project?
• What are the benefits, and for whom?
• What improvements or changes will the project bring about?
• What will the target groups be doing after project completion as a consequence of the project?
• Avoid describing here the outputs, activities or long-term impacts.

Part 2: Project Rationale and Objectives
Before proceeding to project formulation, the formulator should first confirm that the potential
intervention is relevant to ITTO’s objectives and priorities and to the host country’s policies, programs
and strategies. To do so, the formulator should send a 3–4 page note to the country’s ITTO official
contact point, describing the problem and its significance, the beneficiaries of the intended project,
and an outline of the project identification process. An informed estimate of the project budget
should also be provided. Once the relevance of the idea is confirmed, the project planning process,which should be participatory and objectives-driven, can commence.
This section presents all the information needed to justify the project and addresses the following
questions:• What are the needs and who has those needs?
• What changes will the project bring about?
• Why is it important to make those changes?
• How will the project verify whether the changes have taken place and the objectives reached?

Part II: Rationale and Objectives
2.1 Rationale
2.1.1 Institutional set-up and organizational issues
2.1.2 Stakeholder analysis
2.1.3 Problem analysis
2.1.4 Logical framework matrix
2.2 Objectives
2.2.1 Development objective and impact indicators
2.2.2 Specific objective and outcome indicators.

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ITTO Manual for project formulation

Rationale
Institutional set-up and organizational issues
Institutional capacity assessment is particularly important for projects that will rely on local partners
for the implementation of activities. In particular, the project formulator must assess the adequacy of
institutional capacity and organizational set-ups to ensure the success of project interventions. Relevant
governance issues, including organizational adequacy, accountability and transparency, should also beassessed.
Since it influences the choice of partners with whom the project formulator will interact in proposal
formulation, institutional capacity assessment should be done at an early stage. Attention should be paid to:• Appropriate partners for project implementation and the degree of coordination between them
• The likely relevance of the project to institutional and organizational needs• The specific roles and responsibilities of different agencies• The capacities of different institutions and agencies to participate in project implementation• The design of appropriate capacity-building elements in the project and thus the formulation ofa feasible implementation strategy.

2.1.1: Institutional set-up and organizational issues (A hypothetical example)
There is no integrated coordination of forest management and industry development projects
in the northern provinces of the Republic of Silvania. At present, the protected areas are under thecontrol of a separate division within the Forest Department. The forest industry is under the
Ministry of Industry and Mining, while timber exports are controlled by the Ministry of Commerce.
The Northern Region Forest Development Committee, which was set up to coordinate thesevarious activities, does not have in-line operational control of forest interventions. Moreover,no management system or structure exists to coordinate forest activities on the ground. Thereis no system for the collection and dissemination of information or for learning. There has beenno attempt to prioritize the use of human and financial resources. Regional development interventions
and forestry development programs are uncoordinated. The absence of a harmonized strategy
hinders the development of a sustainable forest industry.
Forestry personnel are insufficiently trained to adapt to the changing environment in whichsustainable development and the contribution of forestry to export earnings are increasingly
emphasized. As the Forest Department evolves from an institution identified with the unsustainable
exploitation of natural forests to a modern agency striving to ensure sustainable use and to involve
stakeholders in its activities, organizational inertia persists. In the past, the Forest Department
was oriented towards law enforcement but increasingly a more people-oriented approach is
required. The challenge for the Department is to develop the right mix of skills and knowledge
to allow its staff to handle the sometimes conflicting roles of law enforcement and positive
community engagement.
The use of transient logging personnel in the northern region is a threat to forest condition. Recent
press reports have described the impact of unskilled workers without proper wages who
sometimes engage in illegal activities.

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23

Stakeholder analysis
A high-quality project proposal is the end-result of a participatory process that involves discussions,
meetings and workshops with key stakeholders. Project design begins, therefore, with a systematic
analysis of stakeholders. Stakeholders are the people, groups, organizations and institutions who
might influence or be influenced by a problem or by the potential solution to a problem; stakeholder
analysis clarifies their views and interests. The following key guiding questions should be addressed:• What is the level of consensus for the project?
• Are the stakeholders convinced of the need for change?
• What steps are needed to ensure the participation of stakeholders, including local communities,
in the implementation of the project?
• Who are the target and beneficiary groups and how will they benefit from the project?
The proposal should describe the characteristics and size of the target and beneficiary groups (eg by age,gender and ethnic composition).
Stakeholder identification offers an opportunity to encourage interested individuals and groups toparticipate in the project from its outset. Their participation at this stage allows the planning ofparticipatory activities in subsequent stages.
The stakeholder analysis should include a gender analysis. This will help to:• Identify gender-based differences in resource access• Determine how different members of target communities will participate in and be affected byproject interventions• Incorporate gender equity and empowerment in the project design process• ‘Gendering’ the logical framework by defining indicators relating to gender equity and empowerment.
The first step in stakeholder identification is to make a list of those who might be interested in oraffected by the project. The second step involves classifying them, for the purposes of the project, into
operational categories, such as:• Primary stakeholders: those who are dependent on a resource or service that the project is concerned
about and who will benefit from the project or could be adversely affected by it. Primary
stakeholders could include local populations (individuals and community-based organizations)in the project area, or particularly poor and marginalized groups who in the past have been excluded
from participating in development efforts. They might also include potential mainstream
providers who are experiencing problems that the project can help address.
• Secondary stakeholders: intermediaries in the process of delivering services or aid to primary
stakeholders. Secondary stakeholders provide the main support for the project and might beimportant partners in project implementation. They include government service providers, line
ministries and project staff, government agencies, local governments, civil-society organizations,private-sector organizations, voluntary groups, and donors.
• Tertiary stakeholders: those stakeholders not directly involved or affected by the project butwith the ability to influence opinion for or against it; they might include local opinion leaders,religious leaders, policymakers, business or trade union leaders, teachers, local celebrities, themedia, universities and research institutes.
Not all projects will have stakeholders in all three categories.

24

ITTO Manual for project formulation

Be aware that the primary stakeholders might not be a homogeneous group
One particular category of primary stakeholders is the target group: those people directly
affected by the key problem that the project will address and who might benefit from the
proposed solutions. They might, for example, be members of specific communities (target
communities), or small wood-processing operators based in a specific geographic area (target
area). Within the target communities or a target area there might be considerable differences
between social groupings in terms of resource access and development opportunities. It isessential that information is obtained on how different groups within the target communities
or area are affected by the key problem.
A common error in field projects is to consider the local community as a homogeneous group.
To avoid this, the community should be divided into subgroups on the basis of how they might
be affected by the project. Inevitably, some stakeholders will benefit more than others froma project; it is imperative, however, that project ‘losers’ are not decided on the basis of factors
such as gender, age, wealth, power, ethnicity, small-scale/large-scale farmers, rural/urban
dwellers, landowners/landless or farmers/traders.
The third step in stakeholder analysis is to analyse the primary, secondary and tertiary stakeholders.
One way to do it is to identify their:• characteristics: social and economic status, organizational structure, attitudes, etc• problems: unsatisfied needs, interests, objectives• potential: resource endowment, knowledge, experience• involvement in the project: beneficiary, support, resistance, etc.
The involvement of stakeholders in the identification process is particularly important for creating
a sense of ownership among them that will help ensure their full commitment to the project. This,in turn, will assist in the effective and smooth implementation of the project and the sustainabilityof activities after completion. Appendix A of this manual provides guidelines for ensuring stakeholder
participation in the project cycle.
The required inputs from and actions by the various stakeholders during project implementation
should be carefully identified. Special attention should be given to identifying possible conflicting interests
among different stakeholders and the project proposal should describe how the project strategy willaddress such conflicts. Tables 3 and 4 provide examples, for two projects, on how the findings can besummarized. Such tables can potentially oversimplify complex situations; project formulators should
ensure they are compiled using accurate information and resist an overreliance on assumptions or
generalizations.
As far as needs assessment is concerned, the beneficiaries’ perceptions of needs are likely to fall into
three categories:
1) Felt needs: ie needs perceived within the community
2) Normative needs: those resulting from external (national and international) standards for
acceptable conditions
3) Relative needs: the need within target communities compared to (for example) national standards.

ITTO Manual for project formulation

25

Usually, the identification of needs involves a combination of these, making it difficult to choose amethod for doing so. Felt needs can be assessed through participatory rural appraisal, but normativeneeds might be better determined through the collection of quantitative data on relevant standards.
The methods for assessing stakeholders’ needs, therefore, are complementary. This is why proposals
must provide the sources of information used to assess needs.
Table 3: Example of stakeholder analysis table
East coast mangrove project, Republic of Silvania
Stakeholder
group

Characteristics

Problems,
needs, interests

Potentials

Involvementin the projectPrimary stakeholders
Local farmers

Derive income
from mangrovebased activity;
active groupBase for livelihoods
threatened

Local knowledge

Primary project
beneficiaries

Villageadministrations

Responsible formaking andimplementing
village development plans

Lack of capacity
for integrated
planning

Authority andinfluence inthe village

Main actors inmicro-planningat village level

Experienced
in working
with villages

Sub-contracting
implementationof community
development
activities

Secondary stakeholders
Development
NGOs

Actively involved
in implementing
rural development activities

Lack skills forvillage development microplanning

Provincial forestry
services

Lack enabling
framework
conditions for
effectiveness (lawenforcement, etc)

Insufficient
Can mobilize staff
financial means to for mangrove
implement yearly extension workplans

Directly involvedin project
implementation

Tertiary stakeholders

26

Educationand research
institutions

Have education
and research
missions

Lack means
to financecollaboration

Competence inresearch, studies
and surveys

Might collaborate
in implementing
relevant activities

Financeinstitutions

Finance local
development
activities

Lack means
to financecollaboration

Experience inproviding development loans

Will be contacted
for involvement in
the local credit
systemITTO Manual for project formulation

Table 4: Example of stakeholder analysis table
Project to strengthen timber-processing capacity, northern Silvania
Stakeholder
group

Characteristics

Problems,
needs, interests

Potentials

Involvementin projectPrimary stakeholders
Rural forest
ownersLack formal titles
for their forests,
which impedes
management

Lands without
title; insufficienteconomic options

Desire to receive
assistance; belief
in institutions

Primary project
beneficiary

Loggers

Have logging
equipment

Obsolete technology; lack ofinvestment capitalfor suitable equipment; lack oftraining

Desire to receive
assistance; belief
in institutions

Primary project
beneficiary

Sawmillers

Have sawmills

Insufficient andDesire to receive
irregular supply of assistancetimberPrimary project
beneficiaryTransport
operators

Have mules or
motor vehicles

Lack of training
and organization
for drying andstorage

Belief ininstitutions

Primary project
beneficiary

Secondary stakeholders
Sawmillers
Association

Provide service
and advice totheir members

Needs to improve
capacity to serve
its members

Desire to receive
assistance

Can assist the
project to reachsawmillers

Provincial forest
agencyServices weakened Needs support forby years ofland cadastre
conflict

Are close to forest
industry operators;
can implement
forest development
plans

Provincial forest
personnel cancooperate withproject

Problem analysis
Although the project formulator might already have identified a general problem or rationale, ITTO
requires the use of a logical framework approach. Problem analysis follows stakeholder identification andanalysis. It gives primary and secondary stakeholders an opportunity to identify the causes and effectsof the key problems and to learn about potential opportunities and risks. It also allows them to express
their expectations, identify their resources, and clarify their mandates. Problem analysis can be achieved
through interviews, observations, tracing, questionnaires or workshops, or a combination of these.

ITTO Manual for project formulation

27

Figure 4: The problem tree

Like a real tree, the problem tree has three parts:
a trunk, roots, and branches. As Figure 4 illustrates,
the trunk represents the key problem. The roots
represent the causes of the key problem and thebranches its effects. The causes of the key problem
might not be immediately apparent; effort isrequired to understand the causes in order toaddress the problem. The project formulator
should establish cause-and-effect relationships
via the following steps (see also Figure 5):

EFFECTS

1) Identify the key problem – the ‘trunk’ of thetree. If there is a strong need to look at morethan one problem, draw one tree per problem.
2)	Identify the immediate effects of the key
problem: these become the branches of the
problem tree. If required, list the secondary
effects of each immediate effect as secondarybranches (ie higher up the tree).

KEY PROBLEM

3)	Identify the immediate causes of the key
problem. For each cause, ask the question:‘How does this lead to (cause) the key
problem?’4)	Identify the sub-causes that lead to each
immediate cause. These sub-causes become
the roots of the problem tree.

CAUSES

Figure 5: The four basic steps in problem tree analysis
2nd Step

Effect

1st Step

Key Problem

3rd Step

4th Step

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ITTO Manual for project formulation

Effect

Cause

Cause

Sub-cause

Sub-cause

Sub-cause

Sub-cause

Figure 6 shows an example of a completed problem tree. Note the following:• The problem is stated as a negative situation. For example, ’forests are degraded’ is a problem.
• Each tree has only one key problem, which should be written as succinctly as possible.
• Put all primary causes in the first row below the key problem; usually there will be at least twocauses for a key problem.
• Determine the sub-causes for each cause and make these the second row below the key problem;
there should be at least two sub-causes per cause.
Figure 6: Example of problem tree, Northern Hills Forest Reserve project
The forest resource baseis degrading rapidly

The agricultural
frontier is expanding

Forest habitats
are being lost

The livelihoods of local
populations are threatened

The forests of Northern Hills Forest Reserve are not sustainably managed
Stakeholders lack consensus
on management options

There is no integrated
resource use
management plan

Forest harvesting
operations are inefficient

There is insufficientmobilization of stakeholders

Land tenure issues
are unresolved

There is a lack ofsupport for logging
operator training

There is a lack of interinstitutional coordination

Deforested land under
existing law is not
subtracted

There is a low level ofcapitalization in
logging technology

There is a lack of a
stakeholders’ consultative
framework

There is no zoning
in the Northern Hills
Forest Reserve

There is insufficient support
for business development

Post-logging assessment
is not conducted

Logging operators are
insufficiently organized

Regional technical services
have limited capacity

There is a lack of
information on non-timber
forest product options

As shown in Figure 7, the problem tree can now be turned into a solution tree, using the following process:• Label the solution to the key problem as the specific objective of the project, the solutions to thecauses as the outputs, and the solutions to the sub-causes as the activities. The ‘end’ level above
the specific objective is the development objective level.
• Identify vertical activity-output chains (possible interventions) which might already be implemented
by another project, agency or organization identified earlier as a potential partner.
• Remove those possible interventions that are irrelevant to ITTO.
• Look carefully at the remaining possible interventions and consider those that can be combined
as an ITTO project, taking into account the expected level of available resources and implementation
capacity.
The selected interventions might be incapable of addressing all conditions to the extent necessary toachieve the development objective. In some cases, conditions that remain outside the scope of the
project might be defined as key assumptions.

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29

Figure 7: Turning problems into solutions
The impacts identify
the development objective

EffectEffectThe key problem becomes
the specific objective

Specific
objective

The causes identify
outputs

The sub-causes
identify activities

OutputActivity

OutputActivity

Activity

Activity

Under 2.1.3: Problem analysis:• Describe the key problem identified and its causes and effects.
• Show how these affect society and explain how the needs of the target group are a directconsequence of the key problem.
• Explain how addressing the causes will lead to the eradication of the key problem. The
description should be clear, concise and convincing.

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ITTO Manual for project formulation

The use of stakeholder workshops for problem and objective analyses
Stakeholder workshops can be used to bring stakeholders together to help identify the key
problem(s) to be addressed and to build coherence between project objectives, outcomes, outputs
and activities. In the logical framework approach, the tools of the stakeholder workshop include
teamwork, visualization, communication, and cooperation among stakeholders. Workshop
participants can work as one group or be divided into smaller working groups of 5–8
participants. In each group, participants are invited by the group chairperson to write theirproblem ideas on 20x10 cm cards (one idea per card). Each group compiles the cards according
to cause/effect relationships and proceeds in the following four steps (see also Figure 5):1) Agree on the key problem: In each group the the the chairperson writes the key problem
in the centre of a flip chart or board. This becomes the ‘trunk’ of the tree.
2) Identify the major causes: The group chairperson asks the participants to identify thecauses of the key problem. For each cause, the chairperson asks: How does this (cause)
lead to the key problem? The explanations provided by the group are written down.
3) Identify the sub-causes: the group chairperson solicits views on the sub-causes that leadto each major cause. These sub-causes become the roots of the problem tree.
4) Identify the effects: These become the branches of the problem tree.
If the work is conducted in smaller groups, the formulator organizes presentations in a plenary
session. The discussions aim to achieve a consensus view on a final cause/effect analysis. In
the discussions, the project formulator might ask the group some of the following questions,depending on the context:• Are all economic, social, cultural, political, technical, biological, environmental and market
dimensions of the problem considered?
• Which causes/effects are getting better or worse or staying the same?
• Which causes are easier/more difficult to address?
• Where could a policy change help address a cause or effect, or create a solution?
Problem analysis compares the different viewpoints of stakeholders in order to identify theunderlying causes of the key problem. This kind of workshop should be carried out during the
project’s identification stage. Its main output should be a logical framework matrix, which isa condensed 1–2 page summary of the project design.
Assuming there is consensus on the problem analysis, the next step is an objectives analysis, which
is preferably conducted in plenary. While the problem analysis identifies problems in a cause/
effect relationship, the objectives analysis organizes the solutions in direct relation to the
problems. To ensure easy comparison, the exercise uses cards of a different colour than thoseused in the problem analysis and involves reformulating the problem on each card into asolution: that is, the desired future situation. The solution is formulated in a way that shows
how things will be once the situation has improved. At the level of the main causes, potential
solutions describe possible ways of solving the key problem. In this way, causes and effects
are turned into solutions or objectives. The root causes become root solutions, which determine
the project’s entry points.

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Figure 8: Example of an objectives tree, Northern Hills Forest Reserve project
The recovery of
degraded forest
resources is ensured

Permanent forest
estate isdemarcated

Forests in the reserve
are sustainably
managedLivelihoods of local
populations have
improved

Forests in Northern Hills Forest Reserve are sustainably managed

A concsensus on forest
management exists
among stakeholders

Forest management
plan preparedand implemented

Efficient forest
use systems adopted
by most operators

Stakeholders mobilization
undertaken

Land tenure problems
have been resolved

Trained operators
have improved
harvesting practices

Inter-institutional
coordination
strengthened

Deforested areas
classified as forests
in 1959 subtracted

Financial instruments
developed and usedby operators

Stakeholder consultative
structures created

Permanent forest
estate and rural
reserves identified

Business development
support provided

Baseline information
system formonitoring exists

Local cooperatives andassociations trained

Forest Department has
higher operational
capacity

Information on non-timber
forest product options
is disseminated

Logical framework matrix
The logical framework is presented in tabular form as the logical framework matrix in Section 2.1.4of the project proposal. It summarizes the scope and essential building blocks of the project andconsists of:• four columns ( ‘strategy of intervention’, ‘measurable indicators’, ‘means of verification’ and ‘key
assumptions’)• three rows ( ‘development objective’, ‘specific objective’ and ‘outputs’) (Table 5).

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ITTO Manual for project formulation

Table 5: The logical framework matrix
Strategy ofintervention

Measurable indicators

Development objective

Impact indicators

Means of verification

Key assumptions

Cost-effective methods
The higher objective to Indicators that measure and sources for collecting
which the project will
impacts: ie longer-term quantitative information
effects. They are often on the indicators
contribute and whichis in line with ITTO’s
standardized as goals
objectives and those of beyond the reach of anational sector programs single project

Sustainability
assumptions

Specific objective

Outcome indicators

The major change thatmust take place in thepractices, conditions,attitudes, performance,
resource use or systems
of primary stakeholders
in order to solve thekey problem. It resultsfrom the combined
effect of the project’s
outputs and the realization of assumptions
at the output level

Indicators that measure
the immediate effects(ie outcomes) expected
to be achieved by the
project

Development
hypothesis, linking
specific objective todevelopment objective

Outputs

Output indicators

The direct/tangible
goods and services thatthe project delivers inorder to bring about theabove changes. They
are under the control
of project management

Indicators that describe
the targets to bereached through theimplementation of the
project. They should
specify the quantityand quality of goods
and services and thetime period for theirdelivery, the locations
at which they will bedelivered, and their
expected users

Cost-effective methods
and sources for collecting
quantitative informationon the indicators

The external conditions
beyond the control ofproject managementthat must be realized
for sustaining project
results in the long term

The external conditions
that must be realized if
the achievement of thespecific objective is tocontribute to theachievement of thedevelopment objective

Cost-effective methods
and sources for collecting
quantitative informationon the indicators

Implementation
assumptions linking
outputs to the specificobjective
The external conditions
that, if unrealized,
are liable to impede
progress from outputs
to specific objective

The logical framework matrix provides a baseline for the monitoring and evaluation of the project’s
achievements, and for reporting on progress. It is based on the vertical cause/effect logic and provides
answers to the following questions:• Where does the local, regional or national society want to be in the medium and long terms?
(specific objective, development objective)

ITTO Manual for project formulation33

• How will the stakeholders get there? (outputs, activities, inputs)• How will they know they have got there? (measurable indicators)• What will provide the evidence they have reached there? (means of verification)• What are the potential obstacles along the way? (key assumptions)• What kinds of decisions or actions beyond the control of the project must be taken before theinception of the project? (preconditions).
Column 4 of the logical framework matrix, on key assumptions, should depict the conditions thatmust be fulfilled for the results of the project to be sustainable (ie to continue after projectcompletion). Figure 9 shows the role that key assumptions play in project design and implementation.
The logical framework matrix can be interpreted, from bottom to top, as follows:• If certain preconditions are met, project activities can start.
• If the activities are executed successfully, and if management assumptions are realized, theoutputs will be realized.
• If the outputs are realized and if the implementation assumptions are met, the outcomes of the
project will be realized and the specific objective of the project will be reached.
• If the specific objective is reached, and if the development assumptions are met, then the projectwill have contributed to the development objective.
• If the project has successfully contributed to the development objective and if the sustainability
assumptions are met, the impacts of the project will be sustainable.
The project formulator should now carry out a check by analysing the logical framework matrix inthe order indicated in Figure 10, reformulating project elements as required. In steps 1–4, thevertical logic is checked. In step 5, the formulator checks whether there are preconditions that must
be met before the activities can start. At the 6th step, the formulator checks whether there aremanagerial assumptions that must be fulfilled so that the activities can produce the outputs. In steps
7–9, the formulator checks the existence of external factors that could negatively influence theproject work. In steps 10–12, the formulator checks the adequacy and precision of the indicators.
The last step, step 13, allows any necessary adjustment of costs.

Under 2.1.4: Logical framework matrix:• Insert the logical framework matrix, which should indicate that: when the inputs are provided
and activities of the project implemented, the outputs will be produced; the completionof outputs will lead to the achievement of outcomes and the reaching of the development
objective; and this will lead to the achievement of the development objective.
• The logical framework matrix must also show the indicators, the means of verification, andthe assumptions that must be met to ensure the success of the project.

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ITTO Manual for project formulation

Figure 9: The logical role of assumptions in the logical framework matrix
Intervention strategy

Measurable indicators

Means of verification

Sustainable
impacts

Key assumptions
PLUS
Sustainability
assumptions

Development objective

Specific objective

PLUS
Development
assumptions

Outputs

PLUS
Implementation
assumptions

Activities

PLUS
Management
assumptions

Preconditions (if any)

Figure 10: The order in which the logical framework matrix should be completed
Intervention
strategy

Indicators

1

Development
objective

Impact indicators

2

Specific objective

3

4

Means ofverification

Assumptions

10

Sources of
information

Assumptions

9

Outcome indicators

11

Sources of
information

Assumptions

8

Outputs

Output indicators

12

Sources of
information

Assumptions

7

Activities

Means

13

Sources of
information

Assumptions

6

Pre-conditions

5

ITTO Manual for project formulation35

Checklist to ensure project logic
1)

The development objective is clearly defined and its achievement is beyond the
responsibility of the project management team.

2)

There is one specific objective which shows clearly the focus of the project and is not areformulation of the project outputs.

3)

The outputs are clearly defined.

4)

All the outputs are necessary and sufficient to reach the specific objective.

5)

The “If … then” relationship between the specific objective and the development objective
is logical.

6)

The outputs plus their assumptions are necessary and sufficient conditions for reaching
the specific objective.

7)

The specific objective plus their assumptions are critical but insufficient conditions forreaching the development objective.

8)

The activities for each output are sufficient for achieving that output.

9)

The indicators at the level of the specific objective are independent of the outputs.

10) The indicators of the specific objective will measure the desired changes or outcomes.
11) The indicators for development objective, specific objective and outputs are SMART (see below).
12) The ‘means of verification’ column identifies the source of information needed to verify
each indicator.
13) The assumptions are clearly spelled out and no assumptions at the output and activity
levels are likely to be ‘killer’ assumptions.

Objectives
There should be one development objective and one specific objective and they should be described
clearly and succinctly in one sentence each.

Development objective and impact indicators
The development objective is the broader or higher-level objective to which the project – along withother projects and initiatives – will contribute and which is in line with the objectives of ITTO andnational sector programs. It can be derived from the top-level problem of the problem tree by
converting it into a positive statement. It should be formulated in terms of a goal to be achieved
rather than activities to be executed. The project, by achieving its specific objective, will contributeto the realization of the development objective. For an ITTO proposal:• There should be only one development objective• The development objective should be connected to a wider vision of sustainable development• It should be possible to prove the project’s contribution to the vision by means of verifiable indicators.
The project contributes to the development objective through impacts – the long-term effects ofthe project and the ultimate signs of its success. In order to ascertain these impacts, baseline data
are needed on the social, economic and environmental contexts against which the changes inducedby the project can be measured. If insufficient reliable information exists, a pre-project should beconsidered. The following is an example of a development objective and its indicators:

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ITTO Manual for project formulation

To contribute to integrated socioeconomic development and environmental
protection in the Northern Hills Forest Reserve, Republic of Silvania.
The long-term impact indicators are:• By 2018, deforestation has stopped.
• By 2015, the rate of logged timber waste has decreased from the current 60–70% to lessthan 40%, and the income levels of users have increased by 30–50%.
• By 2015, forest management in the Northern Hills Forest Reserve qualifies for certification.

Under 2.2.1: Development objective and impact indicators:• State clearly and concisely the development objective to which the project is intended tocontribute.
• This objective should have a clear relationship to ITTO’s mandate and objectives andcomply with relevant developmental goals of the host country.
• List the indicators that will be used to measure how the project is contributing to theachievement of the development objective.

Specific objective and outcome indicators
The specific objective is a statement of the effects to be achieved in the short term as a result of theuse of the project’s outputs by its target group(s). In other words, it is a hypothesis for the changes
that will take place as a result of producing and using project outputs. These are usually changes inpractices, policies and laws, systems and services rather than in knowledge or attitudes. They should
be clearly linked to target groups and should be achievable by the project in its planned duration.
The definition of the specific objective should not be much larger than the sum of the results thatare planned to achieve it. In short, the specific objective:• should provide adequate justification: ie through its achievement, the project should solve thekey problem through the benefits it provides to project beneficiaries• should reflect the main change that is intended to take place by the end of the project• should be formulated in terms of the change to take place rather than the activities to be executed• is formulated by positively converting the negative statement of the key problem as it was
identified and presented in the problem tree.
The specific objective statement should be specific and concrete and, whenever possible, quantifiable:• Indefinite and weak terms such as improve, support, promote and create awareness should be avoided.
• Definite and stronger terms such as install, establish, accomplish, reduce, increase and develop should
be used instead.
• Whenever the use of an indefinite term is unavoidable, its meaning should be made operational
through the establishment of appropriate indicators.
The achievement of the specific objective should be quantitatively or qualitatively verifiable. A wellformulated specific objective identifies directly or implicitly WHO will be reached, WHAT change
will occur, in WHAT time period and WHERE the change will take place. It should be SMART:ITTO Manual for project formulation

37• Specific: to avoid differing interpretations• Measurable: to allow the monitoring and evaluation of implementation• Appropriate: to adequately address the problems• Realistic: achievable and meaningful• Time-bound: with a specific time for achieving it.
Below is an example of a poorly written specific objective, and how it can be corrected:

Example of poorly written specific objective• To increase capacity in sustainable forest management.
Why is this specific objective poorly written?
• It does not refer to a key problem to be addressed. The formulator should ask: why is capacity
in sustainable forest management important? What will happen if capacity is increased?
• It does not refer to the target area or target stakeholders, and is not time-bound.
A better formulation of the specific objective would be:• To initiate a participatory process to bring about the sustainable forest management of
the Northern Hills Forest Reserve, Republic of Silvania. In this formulation, initiate relates
to a stage in time, participatory process refers to the role of target stakeholders, sustainable
forest management refers to the key problem to be addressed, and Northern Hills Forest
Reserve is the target area.

ITTO project proposals should have one specific objective, regardless of project size. It is possiblethat two key problems are identified, which would apparently justify two specific objectives. The
greater management complexity that this would imply, however, would mean that the project would
be less likely to achieve all its desired impacts. In such cases, the formulator should consider
proposing two separate projects. If more than one specific objective is considered essential, theyshould be complementary and avoid overlap: i.e. each output should contribute to only one specificobjective.
Outcome indicators are used to describe the targets to be reached through project implementation:• They should specify the quantity and quality of goods and services and the time period for their delivery,
the locations at which those goods and services are to be delivered, and their expected users.
• They provide the information that is used to write subsection 1.4 on expected outcomes at
project completion.

Under 2.2.2: Specific objective and outcome indicators:• Clearly and concisely state the specific objective of the project.
• Avoid giving more than two specific objectives.
• List the outcome indicators that will serve as the quantitative measures or qualitative
judgments by which the achievement of the specific objective will be judged.
• The indicators should be SMART.

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ITTO Manual for project formulation

Part 3: Description of Project Interventions
ITTO project proposals should include a description of outputs, activities, the implementation
approach, work plan, budget, assumptions, risks, and sustainability. This section shows how theseelements are presented in Part 3 of the proposal.

Part 3: Description of Project Interventions
3.1 Outputs and activities
3.1.1 Outputs
3.1.2 Activities
3.2 Implementation approaches and methods
3.3 Work plan
3.4 Budget
3.4.1 Master budget schedule
3.4.2 Consolidated budget by component
3.4.3 ITTO budget by component
3.4.4 Executing agency budget by component
3.5 Assumptions, risks and sustainability
3.5.1 Assumptions and risks
3.5.2 Sustainability

Outputs and activities
Outputs
Outputs should:• address the direct causes of the key problem faced by project beneficiaries and be identified on
the basis of real needs• be produced and utilized in order to achieve the specific objective• be the actual direct result of project implementation; their achievement is the responsibility ofthe project management team• clearly relate to the specific objective and be stated in such a way that their achievement can bemeasured in quantity, quality, time and space• be achievable with the available resources• not be confused with activities.
In practice, there may be 3–6 outputs, depending on the number of main causes of the key problem.
Outputs are broken down into activities, which are packages of work or tasks to be performed inorder to obtain the outputs.

• The output of a training activity might be: 50 trained people are using their acquired skills• The output for research activity might be: Research results have been published• Research conducted on prevention of fungal damage to timber is an activity, not an output.

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39

The two most important questions to ask when selecting project outputs are:1) Is the set of outputs sufficient to achieve the specific objective?
2) Is each output necessary or are there alternative outputs, requiring fewer inputs, that would yield
the same result?
Project formulators should check that outputs and activities can be easily scheduled, organized andmonitored. If not, they might be too general and should be deconstructed into more detailed tasks.
On the other hand, too much deconstruction can be inefficient, consuming time and energy but
producing no significant improvement in the accuracy of cost estimates or the task of preparingschedules.
The statement of outputs should:• outline the finished or completed results in qualitative and quantitative terms• be written in the present continuous tense (eg 50 trained people are using their acquired skills) or
the present perfect tense (eg research results have been published) in order to indicate the expected
situation at project completion• be as clear and definite as possible so as to leave no qualitative or quantitative uncertainty about
what will be achieved• be time-bound.
The results of support activities, such as setting up a management structure or a project office, androutine tasks carried out by the executing agency such as the recruitment of the project leader andother project personnel are not considered to be outputs.
To be efficient, formulators should specify outputs in ITTO ProTool, which will then automaticallygenerate the following components of the proposal:• logical framework matrix template• work plan template• budget tables• the ITTO project proposal document template.
ITTO ProTool ensures that the generated document is in the correct format, thus eliminating theneed to format it manually. It also helps ensures consistency in the information that is presented indifferent sections of the proposal.

Activities
The proposal must list activities under their respective outputs. Activities can include:• those defined from the outputs in the logical framework matrix• those related to general project management, which cannot be assigned to a logical frameworkmatrix output• those that originate from the analysis of assumptions aimed at reducing risks (which can be
assigned to respective outputs)• those that relate to the means of verification, such as surveys to obtain data on indicators tomonitor the use of project outputs. They can also be assigned to respective outputs• those involved in mainstreaming the lessons learnt from the project.

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ITTO Manual for project formulation

Example: Outputs and indicators, forest management projectOutput 1:

Groups interested in the Northern Hills Forest Reserve are contributing to thedevelopment of a consensus-based vision for the integrated management of
natural resources
Indicators:• By the end of the first year, recommendations have emerged from consultations• By the end of the project, at least 80% of interested groups are satisfied with
their involvement in the forest management process.

Output 2:

Forest management plan developed and implemented
Indicators:• By the end of the first year, zoning has been completed• By the end of the first year, the executing agency has strengthened capacity tosupport technological changes in forest uses and to monitor management plans• By the end of the second year, the executing agency has adopted amanagement plan
• In the third year, the management plan is put into implementation.

Output 3:

Efficient forest harvesting practices adopted by most operators
Indicators:• 150 users are trained in the first two years of the project and 50 in the thirdyear and, by the end of the third year, they all indicate their satisfaction• By the end of the project, 90% of users have adopted at least one new technology(eg tree-felling, transport, timber drying or storage)• By the end of the project, at least ten beneficiaries per municipality have been
assisted to gain access to credit facilities• By the end of the project, 25 model farms have made progress with theirproduction systems.

Project formulators should use reference numbers to help identify activities with regard to theirrespective outputs (which are also numbered). For example, if Output 4 of a project has three
activities, they would be identified as Activity 4.1, Activity 4.2 and Activity 4.3.
Activities should be broken down sufficiently to allow an accurate estimate of the resources required, but
no further. They should be stated in such a way that they describe precisely the actions or tasks to beundertaken by project staff. Activities should indicate what will be done to transform inputs into outputs,
thus providing a fundamental linkage with the project rationale. Each output will have a corresponding
set of activities (no fewer than two per output). The four steps for developing activities are:
1) Examine each output listed in the logical framework matrix.
2) Establish the complete set of activities necessary to achieve each output.
3) Check the set of activities for a given output to verify that they are sufficient to achieve the output.
4) Check the level of detail given for each activity to verify that they allow an accurate estimate of the
inputs necessary for implementation.

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Tasks that are very general in scope often have a level of complexity that prohibits accurate budgetingand scheduling. In setting the project’s activities, the aim should be to identify tasks of relatively low
complexity, thereby allowing an accurate estimate of the human and material resources needed tocarry out a successful project.
A good tool for establishing activities is the work breakdown structure, which identifies groups ofactivities related to each project output and presents them in a hierarchical structure. It is usually constructed
as a simple block diagram showing each of the project’s outputs and the related set of activities thatwill allow their achievement (Figure 11). Each set of activities, or work packages, provides the meansfor organizing the implementation of the activities and distributing their execution between the project
staff in such a way that responsibilities are well established and manageable.
Figure 11: Work breakdown structure
Specific objective

Output 1

Output 2

Output 3

Output 4

Activity 1.1

Activity 2.1

Activity 3.1

Activity 4.1

Activity 1.2

Activity 2.2

Activity 3.2

Activity 4.2

Activity 1.3

Activity 2.3

Activity 3.3

Activity 4.3

Implementation approaches and methods
The intended project must be strategic – not a gap-filling budget support action. To demonstrate
this, lists of outputs and activities are insufficient. The proposal must describe the approaches andmethods to be used to address the key problem in order to bring about the intended changes andto meet the expectations of stakeholders. Attention could be paid, for example, to the chosendevelopment models, such as the development of small-scale local wood industry, and to stakeholder
participation approaches such as participatory monitoring and evaluation. The process and methods
for implementing and operationalizing the chosen approaches should be outlined and illustrated ina chart, showing key milestones. The proposal also needs to show how it will resolve possible
problems related to the participation of women in the project. In a thoughtful analysis of the mostappropriate approaches and methods, the project formulator should:• reflect the linkage between the problem and needs to be addressed, and the proposed solutions• incorporate scientifically sound and holistic development approaches• allow for the effective participation of stakeholders, including women, in all stages, and provide
a participation plan
• include appropriate capacity building for the successful implementation of field activities.

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ITTO Manual for project formulation

Example of how to write section 3.2: Implementation approaches and methods
The project will work collaboratively with all stakeholders directly or indirectly interested in the
resources of the Northern Hills Forest Reserve. Using a participatory approach it will help interested
groups to participate in the development of a consensus-based vision for the sustainable use
and management of forests in the region. The development of processes to mobilize and train
beneficiaries will take into account the need to advance one step at a time, helping to raiseawareness, change perceptions, analyse problems, and identify socioeconomic priorities. The
following steps will be taken to implement this participatory development approach.
Organize consultations to review the current situation: Participatory workshops will be
convened in each municipality to examine the status of forest use and management and todevelop a common vision of the threats to forest resources, their potential, and solutions thatwill contribute to their rational use. In addition, workshops will help develop and validate aforest zoning proposal to serve as a basis for the development of a management plan.
Zoning for management: A participatory mapping exercise of actual forest areas will be
undertaken and production, protection and conservation areas and rural reserves identified.
Management plan: A regional management plan will be prepared on the basis of biophysicaland socioeconomic data and the outcomes of the consultations.
Forest management plans: In addition to the legal need to develop management plans, apilot and demonstration scheme will encourage forest owners to plan the integrated utilizationof their resources.
Strengthen local forest utilization and management organizations: The project will support
existing cooperatives and associations and efforts to create a consultation space amonginterested groups on the management and use of forests in the region.
Participatory monitoring and evaluation: A participatory monitoring and evaluation system
will be established to monitor progress in the implementation of the management plan.

Work plan
The work plan will be an important reference for project staff showing the expected timing of eachactivity and the party responsible for it. The work plan is also useful for project monitoring andreviews by both the executing agency and ITTO. Among other things, the work plan:• ensures that efficient use is made of resources and time throughout the life of the project• provides the basis for preparing the project budget and assists in estimating installment amounts
and ITTO disbursements, taking into account the starting point and duration of each activity.
As it is important to show the sequence and dependence of each activity, the work plan is presented
as a Gantt chart, which is a bar chart that plots the duration of project activities, as illustrated inTable 6. Black horizontal bars show when the activity starts and ends.
For projects that have a planned duration of more than two years, quarterly rather than monthly
divisions of time may be used. The starting quarter of the first activities and the ending quarter ofthe last activities determine the total duration of the project.
In preparing the work plan, project formulators should:• allocate responsibility for activity execution to staff• identify, for each activity, a meaningful beginning, duration and end• identify the linkage in time with other activities and the sequence in which they will occur.

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Under 3.3: Work plan:• Use a Gantt chart to indicate, for each activity, the starting and end date, and responsibility
for execution.
• In the Gantt chart, use a black horizontal bar to indicate the execution period of each activity.
• For each activity, indicate when it will be executed and which member of the team will be
responsible for its execution.

Table 6: Example of work plan for project of 3-year duration

Outputs/activities

Responsible
party

Output 1

Coordinator

A1.1 Support inter-institutional coordination

Coordinator

A1.2 Organize workshops for interested
groupsCoordinator

A1.3 Support the creation and operationof municipal and inter-municipal
consultation spaces

Territorial
unit offices

Output 2
A2.1 Support municipal operations tosubtract non-forested areas classified
as forests

Territorial
unit offices

A2.2 Support municipal operations
to legalize private property

Territorial
unit offices

A2.3 Zoning of Northern Hills Forest Reserveand development of the management plan

CoordinatorA2.4 Design a monitoring and evaluation Coordinatorsystem for management plan
implementation
A2.5 Establish the coordination of the
project and increase operational capacityof the executing agency’s territorial units

ExecutingagencyOutput 3
A3.1 Organize the training of operators

Territorial
unit offices

A3.2 Design modalities to support theoperators for access to credit

CoordinatorA3.3 Provide support and advice on
the management of 25 model farms

Territorial
unit offices

A3.4 Support the strengthening oforganizational capacity of forest users

Coordinator

A3.5 Conduct a study on potential
uses for non-timber forest products anddisseminate the information

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ITTO Manual for project formulation

Year 1
QuarterYear 2
QuarterYear 3
Quarter

1 2 3 4 1 2 3 4 1 2 3 4

BudgetIf ProTool has been used to create the objectives tree, specify outputs and activities and identify
inputs it will automatically generate activity budget plan tables as excel files, with all the necessary
formulas for the real-time computation of budgets. The user needs to enter the unit costs, the budget
component categories and the year in which each budget line will be needed. Table 7 shows thebudget categories and layout of the yearly budget.

Master budget schedule
The next step is to identify the inputs – human resources, equipment, facilities, expendables, spareparts, financial resources, time, etc – required to carry out each activity. Since the project budget will
be derived directly from these inputs, their type, quality, quantity and unit cost should be clearly indicatedfor each activity in the master budget table. The degree of detail in the inputs should make it possible
to draw up an accurate and transparent budget. Table 8 shows an example of a master budget tableshowing the inputs needed to carry out activities and the schedule by which funds will be spent.
The master budget shows the cost of activities and the budget schedule in the form of a resource plan
for activity implementation. It is a useful tool for project management because it allows the planningand monitoring of expenditure by activity over time. It provides information on cost categories byactivity and output and on disbursement needs over the course of implementation. ITTO budgets
have two types of costs:
1) activity-based costs2) non-activity-based costs.
Activity-based costs are those required for conducting the activities directly related to the achievementof specific outputs. Non-activity-based costs might include project infrastructure, the salaries of the
project coordinator and administrative/finance staff, operational costs, monitoring and evaluation,
steering and technical committee meetings, independent financial auditing, etc.
Independent financial audits are required for all projects and pre-projects. ITTO requires annual audits
for projects with an ITTO budget of more than US$200,000 and a duration of more than two years.
Executing agency management costs are budgeted at a fixed percentage of 15% of the overall projectbudget, not including ITTO monitoring and support costs. The costs incurred by members of the
project steering committee in attending committee meetings (ie transport to the venue and daily
subsistence allowance) are excluded from the ITTO budget; they are usually met by their respective
organizations or by the executing agency.
Certain project costs are not included in the activity budget plan because those budget lines are
executed directly by ITTO. These include:• Project monitoring and review: this budget item covers the costs of visits by the ITTO Secretariat
to attend meetings of the project steering committee. The ITTO Secretariat project manager
will usually carry out at least one monitoring visit per year.
• Evaluation costs: this budget item covers mid-term and ex-post evaluations of eligible projects (asset out in the ITTO Manual on Project Standard Operating Procedures). These evaluations are
conducted on an as-needed basis.
• ITTO program support costs: this budget item covers the cost of ITTO project administration andis calculated as a fixed percentage (at the time of publication, 8%) of the total project funds
requested from ITTO.
• Refund of pre-project costs: If a project proposal is the result of a pre-project, the ITTO budget ofthe pre-project is to be reimbursed to ITTO but does not appear in the activity budget plan.

ITTO Manual for project formulation

45

Consolidated budget by component
The proposal should provide a consolidated budget table by component, showing the budget for all
sources of project funds (Table 9).

Under 3.4.2: Consolidated budget by component:• Provide yearly summaries of the consolidated budget by component.
• Break down the categories into detailed sub-categories.

ITTO budget by component
The proposal should provide a consolidated yearly budget table, by component, for ITTO funding(Table 10). Remember to exclude from ITTO’s budget items such as national experts, project offices
and executing agency overheads, which are normally financed by the executing agency.
The presence of contingencies in a budget reflects poor budgeting and should be avoided. If an
unexpected development with budget implications arises, the project manager, in consultation withthe project steering committee and ITTO, should seek a solution within the existing budget.

Under 3.4.3: Yearly ITTO budget by component:• Provide yearly summaries of the project budget by component for ITTO funding.
• Break down the categories into detailed sub-categories.

Executing agency budget by component
Table 11 shows the executing agency budget using the categories listed in Table 7 and broken down
into sub-categories as required. To complete each row, use Table 7 to compile information on eachcategory and spending year. For category 10, for example, add up the costs of each sub-category
given in Table 7 and insert the sum in the relevant row and year in Table 11.

Under 3.4.4: Executing agency budget by component:• Provide yearly summaries of the budget of the executing agency.
• Break down the categories into detailed sub-categories.

46

ITTO Manual for project formulation

Table 7: Possible budget categories and layout of yearly budget by source
Category

Description

10.

Project personnel
11.

National experts (long-term)
11.1 Project coordinator11.2 Forester 1, etc
11.3 Market/industry expert, etc
11.4 Administrator

12.

Other Personnel
12.1 Assistant 1, etc
12.2 Other labour

13.

National consultants (long-term)
13.1 Consultant on forest technology
13.2 Consultant 2, etc

14.

International consultant (long-term)
14.1 Consultant in reduced impact logging training
14.2 Consultant 2, etc

15.

Fellowships and training
15.1 Training 1 (specify beneficiaries)
15.2 Training 2, etc

19.
20.

30.

Component total:

Sub-contracts
21.

Sub-contract (Topic 1; eg mapping, etc)

22.

Sub-contract (Topic 2)

29.

Component total:

Travel31.

Daily subsistence allowance
31.1 National expert(s)/consultant(s)31.2 International consultant(s)31.3 Others

32.

International travel
32.1 National expert(s)/consultant(s)32.2 International consultant(s)32.3 Others

33.

Local transport costs
33.1 National expert(s)/consultant(s)33.2 International consultant(s)33.3 Others

39.

Component total:

ITTO Manual for project formulation

47

Category

Description

40.

Capital items
41.

Premises

42.

Land

43.

Vehicles44.

Capital equipment
44.1 Computer equipment (specify)
44.2 Forestry equipment (specify)
44.3 Others

49.
50.

60.

70.

Component total:

Consumable items
51.

Raw materials

52.

Spares53.

Utilities

54.

Office supplies

59.

Component total:

Miscellaneous
61.

Sundry62.

Audit costs

63.

Contingencies

69.

Component total:

National management costs/executing agency management
71.

Costs

72.

Contact point monitoring

79.

Component total:

Sub-total
80.

Project monitoring & administration
81.

ITTO monitoring and review

82.

ITTO mid-term evaluation
ITTO ex-post evaluation
Sub-total

90.

83.

ITTO program support costs (8% on items 10–82 above)84.

Donor monitoring costs

89.

Component total:

Refund of pre-project costs (pre-project budget)
Subtotal:

100.

48

GRAND
TOTAL

ITTO Manual for project formulation

Executing
agencyYear 3

Year 2

ITTO
Year 1

Units

Total cost US$

Year 3

Year 2

Year 1

Outputs/
activities Description

Budgetcomponent

Quantity

Unit cost US$

Table 8: Example of master budget table, Northern Hills Forest Reserve projectOutput 1 Groups interested in the Northern Hills Forest Reserve are contributing to the development of aconsensus-based vision for the integrated management of natural resources
A1.1

Support inter-institutional coordination
3 x 2-day meetings; 15
participants per meeting

A1.2

31

30

30

30

Participantday

50 4500 1500 1500 1500

Organize workshops for interested groups
3 workshops; 25
participants per workshop:

A1.3

Transport

605

25

25

25

Participant

25 1875 625 625 625

Daily subsistence allowance

605

25

25

25

Participant

40 3000 1000 1000 1000

Support the creation and operation of municipal and inter-municipal consultation spaces
6 x 2-day inter-municipal
meetings; 15 participants
per meeting:Transport

606

30

30

30

Participant

25 2250 750 750 750

Daily subsistence allowance

606

30

30

30

Participant

40 3600 1200 1200 1200

Output 2 Forest management plan developed and implemented
A2.1

Support municipal operations to subtract non-forested areas classified as forests
1 technician permunicipality for 6
months; 5 municipalities

A2.2

30

Person-month 1000 30000 30000

Support municipal operations to legalize private property
1 technician permunicipality for 6
months; 5 municipalities

A2.3

608

608

30

1000 30000 30000

Zoning of Northern Hills Forest Reserve and development of the management plan
Mapping specialist(EA personnel*)

13

5Person-month 2000 10000 10000

Sub-contracted forest
management specialist

32

2Person-month 2000 4000 4000

Specialist in digitalsatellite photo processing

25

4

Person-month 1200 4800 4800

satellite images

52

5

Image

3000 15000 15000

Production of maps
at 1:5,000 scale

53

100

Copy

20 2000 2000

Management plan

55

300

Copy

10 3000 3000

One-day inter-institutional
meeting for validation

32

15

Participant

Computer with 50 gigabyte
hard drive and 2 GB RAM
for EA’s mapping unit

41

1

Unit

6100 6100 6100

HP-DESIGNJET 450 plotter

42

1

Unit

15600 15600 15600

50

750 750

ITTO Manual for project formulation49

Paper and ink for plotter:
total cost estimate:
US$3,000
A2.4

543000 3000

26

6Person-month 2000 12000

12000

Establish the coordination of the project and increase operational capacity of the executing
agency’s territorial units
EA personnel at headquarters, over 3 years:
1 coordinator, 1 foresterand 1 accountant

11

6

6

6

Person-month 1600 28800

28800

2 engineers (EA) in the field

12

24

24

24 Person-month 1600 115200

115200

1 technical expert permunicipalities; fivemunicipalities in total

16

60

60

60 Person-month 800 144000

144000Computers and their
peripherals

43

7

Steering committee meeting(transport and organization)

609

1

1

Consultative committee
meeting (transport andorganization)

610

1

Information, media,
various publications

611

Duty travel

Unit

2000 14000 14000

1

Event

1500 4500 1500 1500 1500

1

1

Event

1500 4500 1500 1500 1500

1

1

1

Year

1000 3000 1000 1000 1000

31

1

1

1

Year

15000 45000

45000

Offices at headquarters

41

1

1

1

Year

1200 3600

3600

Offices in territorial units

42

1

1

1

Year

1200 3600

3600

Offices in municipalities

43

1

1

1

Year

900 2700

2700

Miscellaneous
consumables

51

1

1

1

Year

1800 5400

5400

Office supplies

52

1

1

1

Year

1200 3600

3600

Annual audit

612

1

1

1

Year

2000 6000 2000 2000 2000

Output 3 Efficient forest harvesting systems adopted by most operators
A3.1

Organize the training of operators
Training in equipment
maintenance, sharpening
chainsaw chains, timberbucking, safety andongoing follow-up:

A3.2

3 experts for 2.5 years

11

18

36

36 Person-month 1500 135000 27000 54000 54000

200 beneficiaries

601

40

80

80

Participant

15 3000 600 1200 1200

Design modalities to support the operators for access to credit
Consultants

50

ExecutingagencyYear 3

Year 2

Year 1

Total cost US$

Unit cost US$

Year 3

Year 2

Units

ITTO

Design a monitoring and evaluation system for management plan implementation
3 specialists (1 forest
engineer, 1 socio-economist,
1 systems engineer)

A2.5

Year 1

Outputs/
activities Description

Budgetcomponent

Quantity

ITTO Manual for project formulation

21

2

Person-month 1600 3200 3200

Contribution to management costs of financial
institutions Total costof US$20,000
A3.3

602

ExecutingagencyYear 3

Year 2

ITTO
Year 1

Units

Total cost US$

Unit cost US$

Year 3

Year 2

Year 1

Outputs/
activities Description

Budgetcomponent

Quantity

20000 20000

Provide support and advice on the management of 25 model farms

A3.4

Regular support by experts

12

Miscellaneous support(study travel, etc): total
cost US$1,000

603

12

24

24 Person-month 1500 90000 18000 36000 36000
10000 2000 4000 4000

Support the strengthening of organizational capacity of forest users

A3.5

Consultancy to identify
needs and design training

222

Person-month 1500 3000 3000

1 x 2-day training event
per municipality, 5municipalities

601

75

Participant

40 3000 3000

Conduct a study on potential uses for non-timber forest products and disseminate theinformation
Specialists

24

3

Information sheets

24

1000

Person-month 2000 6000
Sheet

1

1000

6000
1000

* EA = executing agency

Table 9: Consolidated budget by component
Category

Description

10

Personnel
111 3 experts for user training

20

Total

Year 1

Year 2

Year 3135000

27000

54000

54000

112 Project coordinator

57600

19200

19200

19200

121 2 experts for property management

90000

15000

37500

37500

122 2 Officers in charge of land units

115200

38400

38400

38400

131 Mapping specialist

80000

80000

141 1 x forest engineer (headquarters)

57600

19200

19200

19200

151 1 x accountant

57600

19200

19200

19200

161 5 x technicians in municipalities

144000

48000

48000

48000

19 Subtotal

73700026600023550023550021 Consultations with financial institutions

3200

3200

22 Consultant in organizational capacity

3000

3000

23 Consultancy for certification process

12000

12000

24 NTFP study

6000

25 Zoning and management plan

8800

26 Monitoring and evaluation system

6000

29 Subtotal

39000

Sub-contracts

6000
8800
6000
27000

12000

ITTO Manual for project formulation

51

Category
30
311
312
320
39
40
411
412
421
422
431
432
49
50
511
512
521
522
53
54
55
59
60
601
602
603
604
605
606
607
608
609
610
611
69
70
80
81
82
83
84
85
89
100

52

Description
Total
Duty travel
Inter-institutional coordination support
4500
Travel costs
45000
Zoning and management plan
750
Subtotal
50250
Capital items
1 x 50 GB computer
6100
Offices in main city3600
1 x plotter
15600
Offices in land units
3600
7 x computers for project coordination
14000
Offices in municipal councils
2700
Subtotal
45600
Consumable items
NTFP information dissemination
1000
Miscellaneous consumables
5400
5 satellite images
15000
Office supplies
3600
Mapping
2000
Paper and ink
3000
Production of management plan
3000
Subtotal
33000
Miscellaneous
Training of 200 users
3000
Financial institution costs
20000
Miscellaneous support to property
10000
management
Support in organizational capacity
6000
Workshops for interested groups
4875
Operation of consultation spaces
3900
Support to municipalities / Law 2 of 1959
30000
Support to municipalities for land
30000
tenure legalization
Steering committee meeting
4500
Consultative committee meeting
4500
Information, media, publications
3000
Subtotal
119775National management cost
153694
Project monitoring and administration
ITTO monitoring & review
12000
ITTO mid-term evaluation–
ITTO final evaluation
15000
ITTO ex-post evaluation–
Subtotal (11–82)
448725
ITTO programme support (8% of 1–82)
35898
Subtotal
484623
GRAND TOTAL
1241217

ITTO Manual for project formulation

Year 1

Year 2

Year 3

1500
15000
750
17250

1500
15000

1500
15000

16500

16500

1200

1200

1200

1200

900
3300

900
3300

1000
1800

1800

6100
1200
15600
1200
14000
900
39000

1800
15000
1200
2000
3000
3000
26000

1200

1200

4000

3000

1000
4000
3000

1000
8000
3500

1000
8000
3500

1625
1300

1625
1300

1500
1500
1000
19425

1500
1500
1000
19425

6000
1625
1300
30000
30000
1500
1500
1000
80925

Table 10: Example of ITTO yearly budget
Category

Description

10

Personnel

20

30

40

Total

Year 1

Year 2

Year 3

11 3 experts for user training

135000

27000

54000

54000

12 2 experts for property management

90000

15000

37500

37500

19 Subtotal

225000

42000

91500

91500

21 Consultations with financial institutions

3200

3200

22 Consultant in organizational capacity

3000

3000

23 Consultancy for certification process

12000

12000

24 Non-timber forest products study

6000

25 Zoning and management plan

8800

Sub-contracts

60

8800

26 Monitoring and evaluation system

6000

29 Subtotal

39000

27000

12000

6,000

31 Inter-institutional coordination support

4500

1500

1500

1500

32 Zoning and management plan

750

750

39 Subtotal

5250

2250

1500

1500

6100

6100

-

-

Duty travel

Capital items
41 1 x 50 GB computer

50

6000

42 1 x plotter

15600

15600

43 7 x computers for project coordination

14000

14000

49 Subtotal

35700

35700

Consumable items
51 Non-timber forest products
information dissemination

1000

1000

52 5 satellite images

15000

15000

53 Mapping

2000

2000

54 Paper and ink

3000

3000

55 Production of management plan

3000

3000

59 Subtotal

24000

23000

1000

-

601 Training of 200 users

3000

1000

1000

1000

602 Financial institution costs

20000

4000

8000

8000

603 Miscellaneous support to property
management

10000

3000

3500

3500

604 Support in organizational capacity

6000

6000

605 Workshops for interested groups

4875

1625

1625

1625

1300

1300

Miscellaneous

606 Operation of consultation spaces

3900

1300

607 Support to municipalities /Law 2 of 1959

30000

30000

608 Support to municipalities for land
tenure legalization

30000

30000

ITTO Manual for project formulation

53

Category

Description

Total

Year 2

Year 3609 Steering committee meeting

4500

1500

1500

1500

610 Consultative committee meeting

4500

1500

1500

1500

611 Information, media, publications

3000

1000

1000

1000

69 Subtotal

119775

80925

19425

19425

70

National management cost

80

Project monitoring and administration
81 ITTO monitoring & review
82 ITTO mid-term evaluation

100

Year 1(see executing agency budget)
12000–

83 ITTO final evaluation

15000

84 ITTO ex-post evaluation–

Subtotal (11–82)

48462385 ITTO program support (8% of 11–84)

35898

89 Subtotal

484623

GRAND TOTAL

511623

Table 11: Example of executing agency yearly budget
Category Description
10

30

40

50

Total

Year 1

Year 2

Year 311 Project coordinator

57600

19200

19200

19200

12 2 x Officers in charge of land units

115200

38400

38400

38400

13 Mapping specialist

80000

80000

14 1 x forest engineer (headquarters)

57600

19200

19200

19200

15 1 x accountant

57600

19200

19200

19200

16 5 x technicians in municipalities

144000

48000

48000

48000

19 Subtotal

51200022400022400022400031 Travel costs

45000

15000

15000

15000

39 Subtotal

45000

15000

15000

15000

41 Offices in main city

3600

1200

1200

1200

42 Offices in land units

3600

1200

1200

1200

43 Offices in municipal councils

2700

900

900

900

49 Subtotal

9900

3300

3300

3300

Personnel

Duty travel

Capital items

Consumable items
51 Miscellaneous consumables

5400

1800

1800

1800

52 Office supplies

3600

1200

1200

1200

59 Subtotal

9000

3000

3000

3000

SUBTOTAL all categories

575900245300245300245300Management cost (8%)

153694

GRAND TOTAL

54

ITTO Manual for project formulation

729594

Assumptions, risks and sustainability
Assumptions and risks
Assumptions refer to the conditions that must exist for a project to succeed but that are external toit; the project team, therefore, has little or no control over them. A decision tree (Figure 12) can beused to decide how to deal with assumptions, along the following lines:• Is the external factor important for the success of the project? If not, exclude it from the logicalframework matrix.
• If yes, what is the probability that the external factor will jeopardize the project?
– If improbable, exclude it from the logical framework matrix.
– If probable, include it in the 4th column of the logical framework matrix (‘assumptions’).
– If very probable, is it possible to redesign the project in order to diminish its influence?
- If yes, the project should be redesigned: the specific objective might need to be modified
or activities or outputs added.
- If no, it is a ‘killer assumption’; from a technical point of view, the project is unviable.
A risk is the probability that an assumption stated in the logical framework matrix will not be fulfilled.
At any given level of the logical framework matrix, assumptions and risks are determined by asking
the question: what conditions must be in place in order to achieve the next level (eg from output tospecific objective)? Some risks can be mitigated through judicious project management. The proposal
should clearly indicate the measures to be undertaken to mitigate the effects of identified risks.
The achievement of objectives and outputs and the implementation of activities depend on whether
the assumptions hold true. In reality, the assumptions constitute hypotheses; they should be made explicit
so they can be assessed. This is important because projects with unrealistic assumptions should be
rejected or redesigned in order to eliminate the risks. Assumptions vary, depending on their level:• At the development objective level, the assumptions are those conditions that must be inplace for the development objective to be sustained in the long run.
• At the specific objective level, the assumptions are those conditions that must be in place
to achieve the development objective.
• At the outputs level, the assumptions are those conditions that must be in place to achieve
the specific objective.

Excluded from the above list are those assumptions linking activities to outputs (management
assumptions). Risks associated with these, if present, should be reduced by internalizing them inproject design. If this is not done, the project will lack accountability.
Assumptions are very important in the chain of project results. When an important assumption does
not hold, the chain breaks. Assumptions might reflect:• Unpredictable natural conditions, such as for successful plantation establishment: There will be
sufficient rainfall at the time of seedling establishment.
• Unpredictable socio-political upheavals, such as those required before a project can start: thenegotiations to end the war will be successfully concluded by the end of 2009. This is a ‘killer’ assumption
because the project will not start if the conflict does not end.
• Favourable situations and factors needed for success, such as for a project on timber export
promotion: timber prices on the international market will remain stable.

ITTO Manual for project formulation

55

• Other actions that must be carried out in conjunction with the proposed project, such as for the
management of a protected area: The project on illegal settlers will be financed and will commencein April 2010.
Assumptions should be formulated as positive statements of what is expected to happen. For
example:• If there is a risk that the Ministry of Forestry will not provide staff for the project, the assumption
could be written: The Ministry of Forestry will provide the staff for the project.
• If there is a risk that the industry will not adapt equipment in order to use the project’s research
results, the assumption could be written: The industry will update its equipment to be able to use
the results of the project.
All assumptions must be written in the logical framework matrix and assessed in the section on risks.
An objective can have more than one assumption but not all objectives have assumptions. ITTO
does not require descriptions of assumptions at the activity and input levels.

Under 3.5.1: Assumptions and risks:• Based on the assumptions in the logical framework matrix, describe the specific risks
beyond the control of project management that could impede the achievement of project
outputs or objectives. Show the risk mitigation measures to be employed and how theyshould be monitored in the course of project implementation.

Figure 12: Decision tree for the analysis of assumptions
Step 1: Is the external factor important for the successs of the project?
Yes

No
Do not include in logical framework matrix

Step 2: What is the probability that the external factor will jeopardize the project?
Very probable

Probable

Improbable

Include in logical framework matrix

Do not include in logical framework matrix

Step 3: Is it possible to redesign the project to reduce the influence of the external factor?
Yes

No

Redesign project: adjust specific objective or add outputs and activities‘Killer’ assumption: the project is unviable

Sustainability
The sustainability of a project can be assessed in terms of its ability to sustain results even after the withdrawalof donor support. Project sustainability depends on a number of factors, such as:• Political support for the project

56

ITTO Manual for project formulation

• The appropriate choice of technology• The institutional and managerial capacity of the beneficiary• Economic and financial considerations.
The project should therefore be designed to be sustainable in technical, financial, social, economic
and institutional terms. Questions to address include:• Social sustainability: Have local needs been considered? Are the approaches to involve local
communities in project implementation adequate? Do the activities, including the plannedchanges in the target group’s attitudes, take into account local traditions, beliefs and social
practices? Will the target group feel a sense of ownership of the results? What is the strategy forpromoting ownership? Have gender issues been adequately analyzed and taken into account?
Will all stakeholders consider the project’s strategy to be fair and equitable?
• Technical sustainability: Is the choice of methods and technologies appropriate given the
resource needs for maintenance? Do the technologies maximize the use of local labour? Will
planned capacity building allow the continued use of new technologies?
• Institutional sustainability: Do the implementing institutions have the technical and financial
capacity to continue the activities after project completion? Does the proposal include activities
to ensure that the capacities of institutions are developed to the required extent and will be inplace at project completion?
• Financial sustainability: What guarantee is there that project results will be sustained at the end of
ITTO’s financial involvement? What level of operational costs will need to be met after projectcompletion? What sustainable financing mechanisms are envisaged beyond project completion?
• Economic sustainability: If the project intends to promote activities for income generation, will
there be an adequate framework for providing beneficiaries with adequate market access? Has
thought been given to the impact of trade and market forces?
• Political sustainability: Has the policy environment been adequately assessed and taken into account?
Is there sufficient political support and commitment to the objectives of the project? Will thatcommitment continue after project completion? Are supportive laws adequate and enforced?
For some projects, some of these questions will be irrelevant and can be ignored. Others will be considered
to be external to the project and can be included in the logical framework matrix as assumptions. Others
might require modifications to the project proposal. The thorough analysis of all these questions
will assist the project formulator in developing an exit strategy; that is, the end-of-project strategy.

Under 3.5.2: Sustainability:• Specify whether institutional arrangements have been made to ensure the continuation
and/or further development of the activities initiated by the project.
• Describe the ways in which local personnel will be equipped to assume responsibilities
after project completion.
• Clarify whether other resources will be required to ensure the continuation and further
development of activities initiated under the project.
• As much as possible, refer to specific decisions and commitments made by the authorities
concerned and, in a few lines, present an exit strategy.
• Be aware that sustainability is not materially addressed in this section; it is built into the designof the project. The bottom line is: project activities and outcomes should be designed tobe sustainable.

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Part 4: Implementation Arrangements
This section shows how to present the institutional arrangements, partnerships and collaborations
that will ensure the successful implementation of the project. It provides guidance on describing themanagement structure and on reporting, review, monitoring and evaluation. It also addresses therequirements for the section on the dissemination and mainstreaming of project results.

Part 4: Implementation Arrangements
4.1 Organization structure and stakeholder involvement mechanisms
4.1.1 Executing agency and partners
4.1.2 Project management team
4.1.3 Project steering committee
4.1.4 Stakeholder involvement mechanisms
4.2 Reporting, review, monitoring and evaluation
4.3 Dissemination and mainstreaming of project learning
4.3.1 Dissemination of project results
4.3.2 Mainstreaming project learning

Organizational structure and stakeholder involvement mechanisms
Projects should have a simple structure that fits within the existing structures of the beneficiary
country, as illustrated by the example in Figure 13. In some cases, projects will be implemented almost
entirely through sub-contracts and consultancies.
The project proposal should describe and illustrate in a chart the project’s management and organizational
structure; the chart should clearly show the functional and hierarchical relationships within the
project structure. The project management team comprises the coordinator, project experts andproject consultants; it is responsible for the coordination, management, implementation and monitoringof activities under the authority of the project coordinator. The project coordinator is under the line
authority of the executing agency. The project management team directly supervises the executionof activities.
The proposal should describe the qualifications of the members of the project management team.
Their tasks and responsibilities should be specified in an annex of the proposal.

Under 4.1: Organization structure and stakeholder involvement mechanisms:• Describe the organizational set-up of the project.
• Specify the executing agency and collaborating agencies (if any), the composition of the
project management team, the mechanisms for stakeholder participation, and the roles andresponsibilities of the different entities involved (eg project management team, project
steering committee, consultative committee and user groups).
• Include, in the text or as an annex, an organizational chart.

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Executing agency and partners
An important element for the sustainability of a project’s results is their institutionalization in thehost country. This has implications for the designation of executing agency and for the way the
project is set up. Instead of establishing a separate organization, the project should seek to link up
with agencies or services within the existing system in order to support and strengthen them.
Each project must have a single executing agency, which is the organization, agency or institution
with overall responsibility for the project. It can be governmental or non-governmental; its role isto provide overall guidance and policy support for the project. The responsibilities of the executing
agency for the implementation of the project are spelled out, in general terms, in the ITTO Manualon Project Standard Operation Procedures and, specifically, in the contract signed between ITTO
and the executing agency. The executing agency is described in the proposal’s Annex I.
The executing agency can use collaborating agencies for the co-execution of certain activities and it
can sub-contract activities to other bodies. A research institute, for example, might undertake
research specified in the project document, and a trade association might distribute information andpromote the active participation of its members. ITTO approves the involvement of collaborating
agencies in project execution on the basis of their experience and track records. Such agencies musthave a demonstrated ability to provide inputs during the implementation phase. The responsibilitiesof the collaborating agencies are established in memoranda of understanding between them and theexecuting agency.

Under 4.1.1: Executing agency and partners:• Nominate an agency or organization as the project’s executing agency. Describe its capabilities
by referring to its previous record. Explain why it is an appropriate choice and describe its
relationship with the target group, its constituency, and the kinds of expertise it can provide.
If other partners are to be involved as collaborating agencies, describe their capacity. Set
out the key obligations of the executing agency for the successful implementation of the
project (eg ‘nominating the coordinator and other team members’, ‘providing office facilities’).
List the key project personnel, showing their roles in the implementation of the project.
Curricula vitae and other additional information should be provided in annexes.

Project management teamThe executing agency appoints an experienced and professional project coordinator for day-to-day
project management and additional professional, administrative and financial staff to make up the
project management team. The project coordinator is usually a full-time position. The names andcurricula vitae of the project management team should appear in Annex II of the project proposal.
The executing agency also recruits the consultants specified in the proposal. The terms of referenceof consultants and sub-contractors should appear in Annex III of the proposal.

Project steering committee
As part of its responsibilities, the executing agency must establish a project steering committee, theprimary role of which is to oversee project implementation, approve expenditures within the budget,
review the activities that have been carried out, and review and propose changes in budgets andactivities. The project steering committee monitors the overall strategic management of the project

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and ensures that it proceeds in a timely, efficient and effective manner in accordance with its logicalframework matrix, work plan, and other aspects of the project document. Typically, the project
steering committee comprises:• A chairperson appointed by the executing agency• A representative of ITTO
• Representatives of relevant ministries• Representatives of research and educational institutions• Representatives of relevant non-governmental organizations (NGOs)• Representatives of donors• The project coordinator (observer and secretary of the project steering committee).

Stakeholder involvement mechanisms
The executing agency can also establish a consultative committee comprising, for example,
representatives of local and regional authorities and organizations, local communities, research andeducational institutions, citizens’ groups and NGOs, as well as independent experts, members ofparliament and other stakeholders. The purpose of the consultative committee is to keep stakeholders
informed about and involved in project implementation and to provide a platform by whichstakeholders can provide input into the project. The consultative committee can request and receive
information and give advice but has no formal responsibility for the project. Its recommendations
are forwarded to the chairperson of the project steering committee.
Figure 13: Organizational structure, Northern Hills Forest Reserve project

Project Steering committee
Executing Agency:
Forest Department (FD)Collaborating Agency

Project Advisory committee
Project Coordinator(at FD’s Headquarters)
Project Accountant

Management Unit 1

Technician
Zone 1A

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Technician
Zone 1B

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Management Unit 2

Technician
Zone 1C

Technician
Zone 2A

Technician
Zone 2B

Reporting, review, monitoring and evaluation
Monitoring helps ensure that the project is on schedule and is meeting its objectives. It targets not only
the activities and outputs but also the outcomes, impacts and assumptions.
The project proposal should indicate the arrangements that will be made for project monitoring, reportingand evaluation. A preliminary monitoring and reporting schedule should be provided, indicating
the dates of presentation for the project inception report, progress reports and technical reports.
Dates for ITTO monitoring visits to the executing agency should be nominated. The proposal should
also indicate how and when the project management team will monitor the progress of the project,and how and when internal participatory evaluations involving stakeholders will be conducted.
A project monitoring system should be designed and a baseline of data established that will serve asa reference for measuring the progress and impacts of the project. These activities should be budgeted
for in the proposal. The project monitoring system should be compatible with the ITTO Manualon Project Monitoring, Review, Reporting and Evaluation and should include the following aspects:• Baseline survey/study• Identification of key indicators• Schedules and monitoring timetables and responsibility for monitoring• Formats and protocols for data collection and analysis• Ways of obtaining feedback on project implementation from stakeholders• Staff and skills required to implement the monitoring and evaluation system, including training needs.

Under 4.2: Reporting, review, monitoring and evaluation:• Provide a schedule for reporting on project progress and finances according to the ITTO
Manual on Project Standard Operating Procedures.
• Indicate how, where and when the project team will conduct activities to monitor the
progress of the project.
• Describe the role of stakeholders in the monitoring and evaluation process and how
monitoring reports will be distributed.
• The monitoring design should be based on the indicators, and means of verification andassumptions and can be refined during the baseline study.

Dissemination and mainstreaming of project learning
Dissemination of project results
The project proposal should describe how the project management team will disseminate project
results and learning, such as through workshops, conferences, newspaper and journal articles, radio
broadcasts, books, guided visits of user groups, brochures and the internet. Specially designed activities
for the dissemination of results can be included in the budget.

Under 4.3.1: Dissemination of project learning:• Describe the communication strategy and methods of the project team and how the
project results and learning will be made useful to users through conferences, articles, useof the internet, books, guided visits, etc.

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Mainstreaming project learning
The project should demonstrate innovation, such as the application of technologies or consultative
methods that are new to the country or region or the testing of scientific methods or policy reforms.
Setting up a forest inventory in a country that has little experience with such inventories might beconsidered to be an innovative action for that country.

Points to be considered in mainstreaming and project learning
For mainstreaming:• Include as an assumption in the logical framework matrix the party responsible for adopting
a policy or new practices that the project will develop or demonstrate.
• Include indicators showing how to measure the mainstreaming results and the sources ofevidence that will show how the parties concerned are taking the decisions necessary formainstreaming.
• Plan activities for outreach such as media and open-door events.
• Plan mechanisms to involve mainstream actors in the implementation of the project (suchactors could, for example, chair the project steering committee, participate in a study tour
in a country that has made relevant advances in policy or practice, or network withdecision-makers).
• Plan visibility events for the launch and completion of the project, in which decisionmakers can publicly make or renew commitments to the objectives pursued by the project.
For project learning:• When designing the project, bear in mind the area of knowledge to be addressed, basedon what needs to be changed.
• Develop a plan for information capture and sharing and assign the responsibility for
project learning to a specific team member.
• Plan thematic monitoring events for the exchange of experiences.
• Ensure there is a dedicated budget for activities relating to project learning.
• Plan information dissemination (eg through brochures, media, technical publications, websites).

The project should also have wider value, which means that project benefits should reach beyond
those institutions and people directly involved in a project. The country as a whole and othermember countries should also benefit from a project. ITTO gives preference to projects with wider
value and the potential for replicating results within and beyond the host country. The proposal
should leave no doubt that the project can contribute to knowledge, the use of appropriatetechnology and best practice, etc. It should describe not only the ability of the project to mainstream
what will be learnt but also provide information on the mainstreaming framework to be used.
Projects could aim, for example, to bring about:• Changes in policy and legislation• The adoption of best practices• Better forest law enforcement and governance.

Under 4.3.2: Mainstreaming of project learning:• Show convincingly how the project has wider value and describe how its results will bemainstreamed into national policies and plans.

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Project Proposal Annexes
ITTO project proposals usually have three annexes: a profile of the executing agency, the terms ofreference of personnel and consultants to be funded by ITTO, and the curricula vitae of the personnel
to be appointed by the executing agency. For proposals that have been reviewed by the ITTO Expert
Panel for the Technical Appraisal of Project and Pre-project Proposals and require amendment, thecomments of the Expert Panel should be included as a fourth annex.

Annex 1: Profile of the executing agency
This annex provides the following information on the executing agency:
1) Background, including:– Name and location of Headquarters and a description of mission– Year of establishment– Fields of expertise– Organizational chart– List of the main projects or studies conducted in the previous three years, indicating, if
applicable, donor agencies– List of projects and pre-projects submitted to ITTO, indicating whether they were funded
and, if so, their status2) Infrastructure (as far as relevant):– Facilities for carrying out the work related to the proposal, such as laboratories, experimental
facilities, training facilities, etc
3) Budget:– To the extent that is relevant to the project, the financial status and resources and the overallbudgets for the previous three years
4) Personnel:– Total number of personnel in relevant fields, showing:- number of personnel with postgraduate degrees- number of personnel with graduate degrees- number of middle-level technicians- number of administrative personnel.

Annex 2: Curricula vitae of personnel provided by executing agency
Curricula vitae of project management team personnel and project consultants should include:• Personal data: name, age, gender• Professional education: school, university, and field of specialization• Position in the present organization• Experience relevant to the project.

Annex 3: Terms of reference of key personnel and consultants to be fundedby ITTO• Provide a summary of the tasks to be executed by the individual and the number of work months
involved.
• Describe the responsibilities of the individual(s) to be engaged. For what process, activity or
output will the person be responsible? In cases of shared responsibility, name the person(s) withwhom the responsibility is to be shared.
• Describe the required competence of the person(s) to be engaged in the fulfillment of the assignment.

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Chapter III: Small Project Formulation
This chapter provides guidance to formulators of small project proposals. A small project has a durationthat does not exceed two years and seeks funds from ITTO not exceeding US$150,000. As in the caseof a full-sized project, the proposal must provide an adequate justification for the project, indicating
the needs that will be addressed. It must describe the strategy by which those needs will be addressed,
and present a work plan and budgets. For detailed information on the topics covered below, formulators
should consult Chapter I of this manual. Small project proposals should be developed with the assistanceof ITTO ProTool, a software package specifically designed to assist in the formulation of ITTO
project proposals.
The size of the proposal should not exceed 20 pages.

Small project proposal writing
Table 12 shows the headings that should be followed in project formulation; it also shows that oneof the main differences with a full proposal is that no logical framework matrix is required. If themain text of the proposal is longer than ten pages, a table of contents should be included. No section
or subsection of the format should be excluded; if they do not apply to a specific proposal, theformulator should explain why the required information has not been provided.

Cover pageThe format of the cover page is the same as for a full project proposal. The cover page should be
drafted after all other sections of the proposal have been completed.

OriginExplain the stimulus or process that has prompted the preparation and submission of the proposal
to ITTO. It could be an ITTO pre-project, a feasibility study, technology assessment, research anddevelopment, policy implementation, workshop or conference recommendation, etc. In all suchcases, give specific details so that the source is clearly identifiable.

Relevance
Conformity with ITTO’s objectives and priorities
The proposal to be submitted to ITTO must be in compliance with the objectives of the ITTA, 2006
(available on the ITTO website); Article 1 of the Agreement indicates how these objectives can be
met. The proposal should quote the relevant paragraphs of Article 1 and explain how and to what extent
the project will contribute to these objectives. The proposal should also demonstrate conformity
with the priorities and operational activities specified in the current ITTO action plan (also available
on the ITTO website) by quoting the action plan’s relevant actions and activities and providing a short
explanation of how it conforms with them. Decisions made from time to time by the International
Tropical Timber Council might also set policies and priorities, and these should also be considered.
Relevance to the submitting country’s policies
Explain how the project is linked to national policies and priorities in the forestry sector and to
relevant ongoing sectoral activities.

Target area
Describe the location of the project and its most relevant social, economic, cultural and environmental
aspects. As required, divide this section into sub-headings such as: 1.3.1 Target area; 1.3.2 Socioeconomic
and cultural contexts; 1.3.3: Environmental context.

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Table 12: Contents of an ITTO small projectPart

Heading

Indicative no. of pages

LIST OF ABBREVIATIONS AND ACRONYMSPART 1PROJECT CONTEXT

1.1

Origin0.5

1.2

Relevance

1.5

1.2.1

Conformity with ITTO’s objectives and priorities

1.2.2

Relevance to the submitting country’s policies

1.3

Target area3

1.4

Outcomes at project completion

0.5

PART 2PROJECT RATIONALE AND OBJECTIVES

2.1

Stakeholders analysis

1

2.2

Problem analysis

1

2.3

Objectives

0.5

2.3.1

Development objective and impact indicators

2.3.2

Specific objective and outcome indicators

PART 3DESCRIPTION OF PROJECT INTERVENTIONS

3.1

Outputs1

3.2

Activities and inputs

2

3.3

Strategic approach and methods

1

3.4

Work plan1

3.5

Budget3

PART 4IMPLEMENTATION ARRANGEMENTS

4.1

Executing agency and organizational structure

1

4.2

Project management

0.5

4.2

Monitoring and reporting

1

ANNEXESANNEX 1PROFILE OF THE EXECUTING AGENCY

ANNEX 2TASKS AND RESPONSIBILITIES OF KEY EXPERTSPROVIDED BY THE EXECUTING AGENCY

ANNEX 3TERMS OF REFERENCE OF PERSONNEL AND
CONSULTANTS FUNDED BY ITTO

ANNEX 4

RECOMMENDATIONS OF ITTO’S EXPERT PANEL AND
RESULTING MODIFICATIONSITTO Manual for project formulation

65

Outcomes at project completion
Describe how the stakeholders in general and the beneficiaries in particular will use the outputs ofthe project at its completion. There should be a clear relationship between the project’s outcomes
and objectives. The description of the outcomes should include how many people (men, women,
families, communities, etc) will benefit from the project. How many will be directly involved inproject activities and how many will benefit indirectly? The social change that the project will bringabout (locally and beyond) should be described. Will the project receive public attention frommedia such as radio, TV and newspapers?

Stakeholder analysis
Provide a summary of the stakeholder analysis, showing the process followed in the formulation of
the project. In particular, show the involvement of key national agencies, NGOs, community-basedorganizations, and other stakeholders in the identification of the project.

Problem analysis
Provide a clear statement of the key problem and its causes and effects. Show how these affect society
and explain how the needs of stakeholders are a direct consequence of the key problem. Where
applicable, describe complementary efforts to tackle the problem.

Objectives
Under 2.3.1: Development objective, state the development objective to which the project willcontribute. This objective must have a clear relationship to ITTO’s mandate and to the development
policies of the recipient country. Describe indicators of improvement in the conditions or situations
to which the project is expected to contribute. Under 2.3.2 Specific objective, state the specificobjective in concise terms that express the major change that must take place in the primary
stakeholders’ practices, conditions, attitudes, performances, resource use or systems in order to solve
the key problem or address stakeholder needs. Define indicators of improvement for the target
population and other stakeholders that the project is expected to achieve. There should be only one
specific objective.

Outputs
List the results (services, goods) to be produced or achieved by the project. For each output, provide
concise, objectively verifiable indicators. Remember to check whether the outputs listed are necessary
and sufficient for achieving the specific objective. There should be at least two outputs.

Activities and inputs
Provide a list of activities that the project plans to implement in order to realize the desired outputs.
Here the formulator can use the same structure for presenting activities and inputs as for a full-sized
project (Figure 11).

Work plan
Provide a work plan following the same guidance for project proposals. Using Table 6 as a model,
indicate all the human resources, materials and financial inputs necessary to realize the activities,
and respective unit costs. The Gantt chart should show the starting point of each activity and its
expected duration.

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BudgetThe project budget should be organized according to the same standard budget categories as for fullsized proposals; budget tables should also have a similar format and be presented by source of funding.
Three kinds of budget tables are presented: for the ITTO budget, by activity, for the ITTO yearlybudget, and for budgets showing the contributions of other sources. ITTO’s project administration
costs should be included in the yearly budget as an additional 8% of the project subtotal.

Executing agency and organizational structure
Nominate an agency or organization as the project executing agency. Describe its capabilities byreferring to its previous record. Explain why it is an appropriate choice and describe its relationshipwith the target group, its constituency, and the kinds of expertise it can provide. Describe the institutional
set-up, responsibilities, and project organization. The project should be integrated into the existing
structure of the executing agency.

Project management
Describe the composition of the team in charge of project implementation. Provide, in annexes,
profiles of the key experts and the terms of reference of project personnel and consultants.

Monitoring and reporting
Given the limited duration and budget of small projects, the proposal should describe only simple
monitoring systems.

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Chapter IV: Pre-Project Formulation
This chapter provides guidance on the formulation of pre-project proposals. Usually, pre-projects
are designed to assist in the identification and elaboration of full project proposals. Formulators
should clarify the purpose of the ultimate project and the additional information the pre-projectwill gather to support project formulation. Clearly formulated pre-project objectives can adequatelytransmit the intent of the proposed full project intervention. A fundamental output of pre-projectinterventions is usually a full project proposal document. Proposals should be developed with theassistance of ITTO ProTool, a software package specifically designed to assist in the formulation of
ITTO project proposals.
A pre-project proposal should not exceed 12 pages.

Cover page
Table 13 shows the required format of the cover page.

Pre-project proposal writing
Table 14 shows the headings that should be followed in pre-project formulation. If the main text ofthe proposal is longer than ten pages, a table of contents should be included. No section or subsectionof the format should be excluded; if they do not apply to a specific proposal, the formulator should
explain why the information has not been provided.

Origin and justification
Explain the stimulus or process that has prompted the preparation and submission of the pre-project
proposal. It could be a feasibility study, technology assessment, research and development, policy
implementation, workshop or conference recommendation, etc. In all such cases, give specific details
so that the source is clearly identifiable. Indicate what additional information should be gathered tosupport project identification, design and/or the formulation of a full project document.

Relevance
Conformity with ITTO’s objectives and priorities
Briefly and clearly show that the proposal is in compliance with the objectives of the ITTA, 2006
(available on the ITTO website) and in conformity with the priorities and operational activities
specified in the current ITTO action plan (also available on the ITTO website).
Relevance to the submitting country’s policies
Explain how the intended project (a proposal for which will be an output of the pre-project) is
linked to national policies and priorities in the forests sector and to relevant on-going sectoral
activities.

Objectives
Development objective
State the development objective to which the intended project (ie the project that will be developed
as part of the pre-project proposal) will contribute. This should have a clear relationship to ITTO’s
mandate and objectives and should also comply with the host country’s development objectives andplans in the forests sector.

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Specific objective
State a concise, well-focused specific objective for the pre-project; usually, it will relate to theidentification and formulation of a full project proposal. There should be only one specific objective
and it should be achievable in the duration of the pre-project.
Table 13: Format of an ITTO pre-project proposal cover page
International Tropical Timber Organization
ITTO
Pre-Project Proposal
Title[Concisely state the main theme of the proposal and indicate its purpose]

Serial Number[This will be provided by ITTO after submission of the proposal]

Committee[Reforestation and Forest Management, Forest Industry and/or
Economic Information and Market Intelligence. If in doubt, leave blank]

Submitted By

Government of [name of member country]

Original Language[English, French or Spanish]

Summary[Briefly describe the pre-project, stating its objectives and major outputs]
Executing Agency[Full name of the proposed executing agency]

Collaborating Agencies[Full names of proposed collaborating agencies]

Duration[Estimated length of the project, in months]

Proposed budget and otherfunding sources:

SourceContribution (in US$)
ITTO
––––
Government of [name of submitting country]
––––
Total
––––

Preliminary problem identification
Describe the key problem and its main causes and effects. A problem tree can be provided (but is
optional). Describe the groups affected by the problem and show how they will benefit from theintended project. Where appropriate, provide a map indicating the location of the intended project.
Describe the problems that hinder the elaboration of a full project proposal; these might be, forexample, a lack of social, economic or market information about the project target area. Local needs
might be poorly known, as might the interests of stakeholders.

Outputs
Outputs are the products that are necessary and sufficient to achieve the specific objective of the
pre-project. There will be at least two outputs. Whenever possible, they are stated in qualitative andquantitative terms as finished or completed results: ie the past tense is used in order to indicate theexpected situation at the completion of the pre-project. The statement of outputs should be sufficiently
clear so as not to leave doubts on what will be achieved, qualitatively and quantitatively.

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ITTo
70

Table 14: Contents of an ITTO pre-project proposal
Part

Heading

Indicative no. of pages

List of Abbreviations and Acronyms
Part 1

Pre-Project Context

1.1

Origin and justification

1.2

Relevance

1.2.1

Conformity with ITTO’s objectives and priorities

1.2.2

Relevance to the submitting country’s policies

Part 2

Justification of Pre-Project

2.1

Objectives

2.1.1

Development objective

2.1.2

Specific objective

2.2

Preliminary problem identification

Part 3

Pre-Project Interventions

3.1

Outputs1

3.2

Activities, inputs and unit costs

1

3.3

Approaches and methods

1

3.4

Work plan1

3.5

Budget3

Part 4

Implementation Arrangements

4.1

Executing agency and organizational structure1

4.2

Pre-project management

0.5

4.2

Monitoring and reporting1

Annex 1

Profile of the executing agency

Annex 2

Tasks and responsibilities of key experts provided by
the executing agency

Annex 3

Terms of reference of personnel and consultants fundedby ITTO

Annex 4

Recommendations of ITTO’s expert panel and resulting
modifications

ITTO Manual for project formulation

0.5

1.5

0.5

1

Activities, inputs and unit costs
Provide, in a table, the activities that will be carried out to achieve pre-project outputs. For eachactivity, describe the required inputs and corresponding unit costs.

Implementation strategy
Describe how stakeholders will be identified and consulted. Relevant stakeholders might include
local communities, collaborating agencies, government, the private sector, NGOs and others.
Explain how studies or surveys will be conducted and indicate the other sources of information thatwill be used during pre-project implementation. Set out the approaches and methods that will beapplied to build ownership for and secure commitment to the intended project.

Work plan
Elaborate a work plan, in the form of a Gantt chart, containing all the information needed to
implement the pre-project. It should show the starting point of each activity and its expected duration.

BudgetOn the basis of the accurate costing of required inputs, provide tables (one per funding source)
showing the pre-project budget by activity. The budget categories used for full project budgets should
also be used for pre-projects. Pre-projects do not require ITTO monitoring visits. ITTO project
administration costs should be included in the budget as an additional 8% of the pre-project subtotal.

Pre-project implementation
Nominate an agency or organization as the pre-project executing agency and describe the structure
under which implementation will take place. Identify partner agencies, if any, and their intended roles.
Describe any specific arrangement for the implementation of the pre-project, such as a pre-project
management team or a steering or coordination committee. Include an organizational chart showing
the general management structure of the project and the line of authority.

Monitoring and reporting
Describe an arrangement for monitoring and reporting on pre-project implementation in conformity
with ITTO’s requirements.

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Glossary
Activity

An action – such as training, mapping, surveys and extension – thattransforms inputs into outputs

Assumption

A condition that must exist if a project is to succeed but which is external
to it and therefore the project team can exercise little or no control over it

Collaborating agency

Agency/organization responsible for the implementation of specified
blocks of activities and which is accountable to the executing agency

Completion report

On project completion, the final formal account summarizing allplanned project elements versus their actual implementation, establishingthe impact and expected sustainability of the project in the post-project
period and presenting lessons learned

Consultant

Professional or expert person or firm contracted to perform relevant
services for a project
National consultant: a consultant from the country in which the projectis executed with experience pertaining to the relevant project limited
to that country
International consultant: a consultant with proven global or multicountry experience pertaining to the relevant projectCouncilSee International Tropical Timber Council

Development
objective

A broader or higher-level objective to which the project (along withothers) will contribute and which is in line with ITTO objectives andnational sector programs

Evaluation

The collection of information and the assessment and analysis of theperformance and impact of a project. The process is systematic and as
objective as possible
Mid-term evaluation: the collection of information, on-the-spot assessment
and in-depth analysis of the performance and impact of a project during
its implementation stage, with the purpose of guiding or advising the project
management team on all factors relevant to the further implementationof the project, including any necessary revision of project design
Ex-post evaluation: the collection of information, on-the-spot assessment
and in-depth analysis of the performance and impact of a project after
completion with the aim of establishing the extent to which it served its
purposes, its degree of effectiveness and efficiency, and its sustainability

Executing agency

Agency with overall responsibility for the implementation of a project.
It is directly accountable to ITTO for project implementation

ExpertQualified professional person from an ITTO member country engaged
by ITTO to provide services and assistance to its work such as theappraisal of projects and evaluation of contracted work

Ex-post evaluation

See evaluation

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Financial report

A bi-annual report showing a project’s opening and closing balance,
the expenditure incurred against each heading of the project budget,and any income earned or accruing

Gantt chart

A bar chart that shows project activities as blocks over time. The beginningand end of the block correspond to the beginning and end of the activity

Gender analysis

The identification and understanding, in a target group, of genderroles, rights and responsibilities in relation to, for example, production,
resource access, the management of households and the community,and decisions on resource management and use

ImpactA longer-term effect of the project intervention

Implementation
strategy

The choice of project elements (ie objectives and outputs) and themeans (ie activities, applied technologies and methods) for achieving
them. The justification of the rationale of the chosen route versus alternativeroutes should be based on criteria of effectiveness and efficiency

Inception report

The formal notification that the project is about to commence. It
comprises confirmation that all conditions have been met, provisions
are in place, and formalities have been concluded for a smooth start toproject implementation

Indicator

Quantitative or qualitative parameter that can be assessed and thatindicates the level of achievement of a project objective or output

InputsThe means for executing an activity, such as human resources, equipment,
facilities, expendables, spare parts, financial resources and time

International
consultant

See consultant

International
Tropical Timber
Agreement (ITTA)

An agreement established under the auspices of the United Nations
Conference on Trade and Development which establishes ITTO’s
objectives and modes of operation. Three such agreements have been
negotiated: the ITTA, 1983, the ITTA, 1994, and the ITTA, 2006

International Tropical
Timber Council

ITTO’s governing body

International Tropical
Timber Organization

An intergovernmental organization, established under the International
Tropical Timber Agreement, promoting the conservation and sustainable
management, use and trade of tropical forest resources

ITTO action plan

The translation of ITTA objectives into priority areas and possible
actions for policy and project work to be undertaken by ITTO over a
designated period

ITTO ProTool

A user-friendly package of computerized tools to assist project
formulation based on the ITTO Manual for Project Formulation.
Downloadable from the ITTO website, it helps proponents to structure
problem trees and to produce budget tables

Key problem

The central issue that a project aims to address and can feasibly resolve

Logframe

See logical framework matrix

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Logical frameworkmatrixA dynamic planning and management tool that summarizes the resultsof the project planning process and communicates the key features ofa project in terms of interventions, indicators, means of verificationand key assumptions. It provides the basis for monitoring progress achieved
and for evaluating the project. Also referred to as a logframe

Means of verification

The sources of information for checking the values of an indicator

Mid-term evaluation

See evaluation

Monitoring

The collection and analysis of data (indicators) with a view to
identifying the need (or otherwise) for corrective actions to ensure thata project is executed according to plan

National clearinghouse

In-country mechanism responsible for screening project and preproject proposals, taking into account national priorities and relevanceto ITTO goals, prior to submission

National consultant

See consultant

Official ITTO
contact point

Person and/or institution designated by a member country and registeredby the ITTO Secretariat to handle ITTO matters (also referred to as
focal point)

Outcome

The change brought about due to the influence of a project. Project
outcomes are achieved from the utilization of delivered outputs

Outputs

The immediate results or deliverables of a project

Post-project strategy

Facilitating conditions which enable participating groups to continue
the work autonomously after project completion. The strategy should
be based on an analysis of the human resources and financial andinstitutional provisions needed to guarantee sustainability

Pre-project

A set of preparatory and/or experimental activities undertaken with the aimof formulating a project proposal. The main output is a project proposal

Problem tree

A cause/effect diagram of problems placed below (causes) and above(effects) the key problem, which is the trunk of the tree

Progress report

A bi-annual formal and objective report prepared by the executing
agency for higher levels of administration on a project’s executed
activities, expenditures and achieved outputs in the period covered by
the report. Progress reports present essentially managerial information

Project

A concerted effort directed at the achievement of a well-articulated
specific objective and related to a wider development objective, withclearly identified performance time and cost characteristics

Project agreement

Agreement on project implementation between ITTO and theexecuting agency, signed after the project has been approved by theInternational Tropical Timber Council and fully funded. It specifies
the roles and responsibilities of the member government, the executing
agency, and ITTO in implementing a project (or pre-project)

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Project cycle

The various phases through which a project moves from first conception
to completion, including: project identification and formulation;
submission; appraisal; approval; funding; inception; implementation;
monitoring and evaluation; completion and closure

Project closure

The closure of the account of a project in the financial records of ITTO
after: (i) approval of the completed project by the relevant technicalcommittee of the International Tropical Timber Council ; (ii) acceptanceby the ITTO Executive Director of the final audit; and (iii) receipt of
any unused funds by ITTO and disposal of capital goods by the
executing agency

Project completion

Official acceptance of the completion report by the relevant technicalcommittee of the International Tropical Timber Council

Project design

One phase in the project cycle: the process by which solutions to thecauses of a problem are identified and a structure created for theirimplementation

Project document

Project proposal that has been approved by the International Tropical
Timber Council

Project elements

The development objective, the specific objective, the outputs and activities

Project formulation

The process of developing a project proposal including: check of
relevance to ITTO; project identification, including the description of
the formulation process; project design; project outcome and impact;
and project management

Project identification

The process of identifying a constraint or problem impeding a desired
developmental change and of actions to remove such constraints

Project intervention

The actual activities ‘in the field’ and the results of those activities

Project proposal

Project description submitted to ITTO for appraisal and approval. The
description contains all the relevant information for the implementationof a project, including clearly identified performance, time and costcharacteristics, usually with a request for funding

Project steeringcommittee

A group of representatives of key stakeholders responsible for providing
guidance on the overall strategic direction of a project. It is composedof one representative of ITTO, at least one representative of thegovernment or government(s) in the country or countries in which the
project is being implemented, and, optionally, representatives of thegovernments providing funds to ITTO’s Special Account throughwhich the project is financed

Proponent

Agency or institution that is the legal entity that submits and has
responsibility for the project

ResultA describable or measurable change that is derived from a cause/effectrelationship. It might be an output, outcome or impact

Review

Formal examination of work plan progress and of the factors influencing
it. A part of project monitoring control activities

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Risk

External factor that might jeopardize the project’s expected results. Risks
are related to assumptions at each level of the logical framework matrix

Small projectA project with a duration not exceeding two years and requiring from
ITTO no more than US$150,000

Specific objective

The outcome which, if all outputs are produced by the project andused by the stakeholders, will be achieved by the end of the project

Stakeholder

An individual, group, organization, institution or company who will help
to implement and sustain the project and/or will likely be affected by itStandard operatingprocedures

Practices associated with the project cycle that have evolved as normsof ITTO based on decisions of the International Tropical Timber
Council and the Organization’s guidelines/proceduresSub-contract

The engagement by the executing agency of consultants or any othercontractors to undertake an aspect of project implementation withapproval from ITTO

Sustainability

The availability of sufficient means, funds and human resources tocontinue the work after project completion

Targets

The quantitative descriptions of desired changes in indicators thatreflect the intended project results

Target beneficiaries

The individuals, groups, or organizations who are the intended direct
beneficiaries of the project intervention

Technical report

The means to record and transmit the results of work carried out under
ITTO research, development and demonstration projects. Technicalreports usually contain technical and scientific data, analyses of thedata, and project results

Wider value

The concept that benefits of the project should reach beyond thoseinstitutions and people directly involved in the project (such as theexecuting agency, collaborating agencies and immediate stakeholders).
The country as a whole and other member countries should somehow
benefit from project outcomesWork breakdown
structure

A tool which assists in the identification of groups of activities related
to each project output and their presentation in a hierarchical structure.
It is usually presented as a simple block diagram showing each of the
project’s outputs and the related set of activities that will enable theirachievement

Work plan

Table showing the start and duration of each activity and the responsible
agencyMany of these terms and concepts are further elaborated in the main text of this document and inother manuals, including the ITTO Manual on Project Standard Operating Procedures.

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Appendix A
Guidelines for ensuring stakeholder participation in the project cycle(Government, Private Sector and Civil Society, Emphasizing Local Communities)

Introduction
The aim of these guidelines is to help in the identification and involvement of stakeholders in ITTO
projects, including those from government, the private sector, and civil society, and to show how tobest incorporate social – including cultural – concerns in project formulation and implementation.
Section I addresses all stakeholders. Section II provides specific and additional guidance on the procedures
to be adopted regarding local community participation in project formulation, implementation,
monitoring and evaluation.

Section I: Stakeholders
Stakeholder analysis
Stakeholder analysis is the identification of a project’s key stakeholders and the assessment of theirinterests and the way in which those interests are likely to affect the process of change, project risks
and viability. Stakeholder analysis also helps in designing a project so that it is adaptable in the faceof change and in identifying the most appropriate forms of stakeholder participation. Stakeholder
analysis is a tool used to identify the primary and secondary and, where relevant, tertiary stakeholders
and the relationships between them.

Why do a stakeholder analysis?
A stakeholder analysis can help to:• draw out the interests of stakeholders in relation to the problems that the project is seeking toaddress (at the identification stage) or the purpose of the project (once it has started)• before funds are committed, identify conflicts of interests between stakeholders that might
influence the assessment of a project’s risks• identify relationships between stakeholders that can be built upon. This might enable the developmentof coalitions of project sponsorship, ownership and cooperation• assess the appropriate type of participation by different stakeholders at successive stages of the
project cycle.

A four-step approach to stakeholder analysis
Stakeholder analysis can be conducted in many different ways, but essentially it involves thefollowing four steps:
Step 1: Identifying and listing major stakeholder groups. Groups can be divided into smaller
units (eg men and women, ethnic groups, localities, organizational departments). Often it is betterto do this with the help of knowledgeable resource persons who are familiar with the socioeconomic
and geographical contexts.

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Step 2: Determining interests. Draw out the key interests of each stakeholder group in the initiallist. Whether they are primary, secondary or tertiary stakeholders, it is critical that their interest in
the project and the potential impact of the project on their interests are assessed. This assessment
will help to identify the aspects of the project in which each group will need to participate, and any
potential or actual conflicts of interest between stakeholders.
Step 3: Determining importance and influence. The influence and importance of eachstakeholder is assessed. Influence refers to how powerful stakeholders are: i.e. the ability to shape andcontrol decisions that may help or hinder the project; importance is the extent to which the problems,
needs and interests of stakeholders coincide with the aims and priorities of the project.
Step 4: Establishing strategies for involvement. Strategies should be devised for approaching andinvolving each stakeholder in the project. How to do this, and the extent to which each stakeholder
should be involved, will usually depend on the results of the previous analysis. There is no need to
involve reluctant stakeholders and, for those that are involved, the extent of their involvement mightchange as the process continues.

Section II: Additional Considerations for Community Participation
Past experience
The lessons learnt by many international and national agencies show that, all too often, projectinterventions designed to improve the economic and social conditions of communities living in ornear forest areas have instead harmed them and, over time, have helped to destroy their relatively
independent way of life. In addition, projects have often had unexpected, harmful side-effects, orthe benefits have been insufficiently enduring to create lasting improvements in the lives ofbeneficiaries.

Principles of local community participation
Local communities can contribute towards success by a firm belief in the need for change, by contributing
their special knowledge and experiences, and, in appropriate cases, by accepting responsibility forcertain elements essential for project implementation and monitoring. In particular, apart from theirunique sociocultural heritage, forest‑dwelling communities are often a valuable source of knowledge
on tropical plant and animal species and on proven technologies for the management of fragile
ecosystems. When this knowledge is procured, understood and used, forest-dwelling communities will
make a substantial contribution to solving problems which might adversely affect the environment.
Projects should avoid any encroachment on territories used or occupied by Indigenous forestdwelling groups unless:• the affected communities are fully informed about and in agreement with the objectives of the proposal• the intended executing agency is fully committed to, and capable of, implementing effective
measures to safeguard those communities against harmful side-effects (in health, for example),to protect their territorial security, and to enable them to gradually adapt to the changes affecting
their culture as a result of increasing contact with the rest of society.

Baseline data
In general, the minimum aim should be that, at project completion, no local communities affectedby the project should be worse off. Their situation should be at least as good as, and preferably better than,
before the project was launched. To assess the achievement of this aim, baseline data are needed.

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As a basis for the design of projects, it is necessary to:• identify all forest users and the nature of their claims on the forest resources• analyse the extent to which forest users depend on those resources for their livelihoods• map the territories claimed by different users (which might vary seasonally), showing areas ofoverlap and conflict• describe systems of land tenure or customary rights• identify those people who makes decisions over the use of the resources and how the decisions
are taken (eg through formal or informal decision-making structures)• describe the traditional ways of regulating resource use and resolving conflicts between users• determine how far the project can and should build on traditional social institutions or,alternatively, if it will need to create new structures to ensure its sustainability. In conducting
this study, sociologists should pay particular attention to the roles and needs of women.

Consultation procedures
The consultation process is designed to facilitate the exchange of information so that a final
consensus among the various interested parties on the appropriate objectives and, in some cases,
methodologies can be developed. When consultation starts, information on the intended proposal
and what it is meant to achieve should be presented in a clear form with the aim of stimulating a
dialogue and eliciting verbal or written reactions to the proposal and its possible impacts.
Proposal originators should bear in mind that, for some groups, open meetings might not be acustomary means of public dialogue and that large public meetings in particular are often dominatedby local elites, who do not necessarily express the views of the majority. Men and women might need
to be consulted at different times because of cultural practices or differing work patterns. In all cases,
three essential elements of the consultation process are:1) the establishment of a trusting relationship, in which communities or their representatives canspeak frankly and usefully2) steps for overcoming language barriers through skilled interpretation
3) encouragement and explanation to help communities understand and envisage the changes(including potential negative ones) that a project might bring about.
The consultation process should identify and discuss the risks of negative effects and should also be used
to identify and discuss possible countermeasures, which could be incorporated in the project proposal.
Possible measures for tackling the problems raised include:• Steps to clarify the interests and legal rights of affected local communities, including their rights
to land. The absence of a legal title to land, for example, should not be a bar to compensation
for disturbances or disruptions that adversely affect the community’s way of life.
• Steps to set aside and demarcate areas traditionally used and inhabited by communities withinor adjacent to intended project areas.
• Steps to involve the chosen representatives of local communities in bodies concerned with the
day-to-day implementation of the proposed project.

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• Steps to ensure that the pace of change and the rate of introduction of the intended development
will not be disruptive to the local community’s way of life.
• Measures in health and education and support for the production and marketing of agricultural,fishery or forest products by local communities.
• Steps to create permanent structures to facilitate open communication, interactive problemsolving and social learning by strengthening the institutions that will deal with local communities
throughout the project cycle. Among other things, such institutional strengthening should
include the development of an explicit plan of operation for the project consultative committee
to ensure regular, on‑going interaction with local communities and clear two‑way communication
about community concerns, project goals, project activities and project outputs.
• Where relocation or resettlement is involved, preparation of a detailed resettlement plan,
including timetable and budget. The plan should include steps to ensure social and cultural
homogeneity among the relocated groups and to provide adequate land assignments, housing
solutions, basic infrastructure and support, training and, if necessary, technical assistance to help
ensure the longer‑term economic and financial viability of the new communities. Hostcommunities that accept settlers should be considered during the planning process and. where
necessary, assisted.
• Where members of a local community affected by the proposal are to be relocated, steps toensure prompt payment of fair and adequate compensation. In this regard, cash compensation
alone is usually inadequate and often counterproductive. Preference should therefore be given
to land‑based resettlement strategies that focus on restoring the economic base of the relocatedcommunity.

Project cycle phases
Project identification and formulation. Local communities might have more immediate orpressing interests in the provision of income or improved social facilities than in the objectives ofthe project itself. Thus, as set out above, local communities likely to be affected by the project should
be fully consulted after the initial collection and analysis of baseline data, as well as beforehand.
Project implementation. Wherever possible, local communities should play an active role in project
implementation. In addition, their chosen representatives should participate in the local project
consultative committee (or similar body) that oversees project implementation.
Project monitoring and evaluation. Monitoring by executing agencies should involve a check onwhether the ongoing participation achieved with local communities, and their resulting cooperation,
are as originally foreseen. If not, this might signal that the impact of the project on local communities
and any measures to deal with them are unexpectedly negative or inadequate.

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Appendix B
Guidelines to take account of the environmental impact of projects
Aim
The aim of these guidelines is to ensure that all projects directly funded by ITTO identify and takes
steps to prevent, control or mitigate any negative environmental impacts that might arise from theirimplementation and, where possible, to improve the environmental quality of such projects.

Approach
Environmental factors should be taken into account at the earliest stage of a proposal and in all
stages of the project cycle, from design to ex‑post evaluation.
Environmental aspects of a proposal should be considered as part of a multidisciplinary approachthat examines economic, technical and social issues.

Project identification, formulation and design
I. Baseline data
Proposals should include:• a description of the physical environment to be affected• the environmental factors that will affect the project’s sustainability as well as the demographic,
cultural and socioeconomic contexts (especially those aspects related to potentially direct andindirect environmental impacts)• the institutions and national laws involved in or related to the potential impacts, and therequirements they impose on the design and operation of the project.
If the originator of a project idea has insufficient data with which to make an initial assessment ofenvironmental impacts, a pre-project proposal can be prepared and submitted to ITTO. Wheninsufficient facts are available on which to judge whether a full environmental impact assessment isneeded, rapid environmental appraisal (sometimes called ‘scoping’) can be a useful method for
determining risks.
II. Risk assessment and reduction
Project proposal formulators should have clearly in mind the potential benefits and risks associatedwith any project involving forest management, reforestation, or forest industry development.
Benefits might include, for example:• maintaining the stability and fertility of the soil
• providing protection to catchment areas• supplying valuable timber and other products such as fruit, fibre and fuelwood• maintaining stores of highly diverse genetic material• providing the necessities of life and cash income for forest dwellers• providing a habitat for wildlife, and opportunities for possible tourism.

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Risks might include:• soil erosion, both in the development area and as a result of supporting infrastructure such asaccess roads, and loss of soil fertility• changes to the hydrological cycle (ie adverse impacts on the water balance or reductions in water
quality through stream sedimentation)• loss of wildlife habitat and biodiversity• disruption to the socioeconomic and cultural way of life of local communities• the possible spread of disease.
Forest industry-related proposals might also involve environmental risks common to industrial
processes such as:• air, soil or water pollution• high demands for local or brought‑in energy inputs or natural resources (eg water)• health hazards to workers.
Where risks are identified, the project proposal should incorporate measures designed to address
and minimize them. In addition, project proposal formulators in the areas of natural forest
management, forest restoration or forest plantations should consult the relevant ITTO guidelines.4
Appendix 4 of the ITTO Guidelines on the Sustainable Management of Planted Tropical Forests
also sets out criteria and guidelines for designing man‑made forests that might be useful foravoiding negative environmental impacts in projects involving planted forests.
III. Selection of monitorable indicators
In the development of proposals it is important to include indicators of environmental impact aswell as of other aspects of progress. The selection of these indicators will depend on the risks thathave been perceived and addressed, and their monitoring should be timed accordingly.

Project monitoring and evaluation
Regular reviews of projects, and any evaluations at project completion, should examine, using themonitorable indicators, the effectiveness of environmental measures taken to address particular risks
and whether any unexpected risks have emerged (and need to be tackled, possibly by the modificationof the project or in future projects). Provisions should be made for such reviews in the terms ofreference of project steering committees and other relevant bodies.
If ITTO decides that a particular project should be the subject of an ex‑post evaluation, its termsof reference should always include an examination of the environmental history and impact of the
project and any lessons learnt in this regard. A specialist ex‑post environmental impact analysis
might be required.

4

ITTO Guidelines for the Sustainable Management of Natural Tropical Forests; ITTO Guidelines for the Establishment
and Sustainable Management of Planted Tropical Forests; ITTO Guidelines for the Conservation of Biological Diversity
in Tropical Production Forests; ITTO Guidelines on Fire Management in Tropical Forests; ITTO Guidelines for the
Restoration, Management and Rehabilitation of Degraded and Secondary Tropical Forests; Revised ITTO Criteria andIndicators for the Sustainable Management of Tropical Forests

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83Pre-projects
In addition to activities designed to fill gaps in the baseline data and in the understanding of thefactors at play in an intended project location, ITTO can consider pre-projects which will make awider assessment of the likely environmental impact of an intended project. An example of thepossible terms of reference for a full environmental impact assessment of this kind is given below.

Outline of terms of reference: environmental impact assessment
The terms of reference for a mission to carry out a full environmental impact assessment of a project
could be structured as follows:
Introduction• Purpose of the terms of reference• The project to be assessed• ITTO and national requirements and related laws and conventions• Envisaged executing arrangements
2. Background• Agencies and institutions involved• Brief description of project• Current status and timetable of project• Relationship to ongoing or past studies• Related or adjacent projects
3. Objectives and modus operandi• Specific objectives of the environmental impact assessment• Objectives of overall project preparation and analysis• Working relationship with other project studies and study team
• Required approach (if any) for consultations with affected groups
4. Study area (include map)
• Specify location
5. Scope of work
The contractor will:
5.1 Describe the project in detail• Emphasise features or activities that pose risks or will generate impacts
5.2 Describe the environment of the study area
• Physical environment• Biological environment• Social and cultural characteristics; terms of reference should specify special surveys, mapping, etc
5.3 Describe legislative and regulatory considerations

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5.4 Determine potential impacts• Characterise baseline and other data used and note reliability or deficiencies• Describe impacts – negative and positive, reversible or irreversible, temporary or long-lasting• Identify measures to reduce or mitigate impacts• Quantify and assign financial and/or economic values to impacts and mitigating measures• Where necessary, design studies to fill gaps in needed information
5.5 Describe and analyse alternatives• Describe alternatives that have been studied by others• Identify those alternatives studied (or others) that could achieve project objectives• Perform comparative technical, economic and environmental analyses of alternatives
versus the proposed project
5.6 Develop plan to mitigate negative impacts• Include objectives, executing or implementation modes, proposed work program and budget
5.7 Design a monitoring plan
• Plan to monitor implementation of mitigating or compensatory measures and project impacts
during construction and operation, including design of baseline studies and cost estimates
5.8 Identify institutional requirements and needs related to implementation of mitigating
measures and monitoring
5.9 Present a report containing the following:• An executive summary• A description of the proposed project• A description of the environment• A description of significant environmental impacts• An analysis of alternatives to the project proposal• A mitigation management plan, including costs• A monitoring plan, including estimated costs and schedule of work
• An outline of the policy, legal and institutional frameworks and the need for change,
strengthening, reform, etc, relative to mitigation and monitoring• An environmental management and training needs plan, and estimated costs• Interagency management and public involvement strategies• A list of references and resources
Appendices, maps, technical documentation
Required composition of the consulting team and schedule of work.

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Appendix C
Examples of logical framework matrices
Logical framework matrix, forest management project
Strategy ofintervention

Verifiable indicators

Means ofverification

Key assumptions

Aerial photographs, • Public security
Development• By end of 1st year, deforestation
reports and fieldcontinues toobjective:
has been stopped
checksimprove
To contribute to• By end of 2nd year, the rate ofintegrated socio• The government’s
logged timber waste decreased
economic developdetermination tofrom the current 60–70% to lessment and environimprove forest use
than 40%, and users’ income levels
mental protectionin the Northernhave increased by 30–50%
in northern Silvania
Hills Forest Reserve• By end of 4th year, Northern Hills
continues
Forest Reserve management is certified• Public security• Project reports
Specific objective: • A consensus-based management
continues to
To launch a partiplan implemented by the end• Reports ofimprove
cipatory forestof the 3rd year of the project
consultative
management• Interested groups• By the end of 1st year, all plans are committee
process to foster
collaborate
meetings
under the Forest Department’s
the rational use ofcontrol and follow-up• management plan • The Forest
production forests
Department• In the 2nd year, over 80% of the• surveys ofand environmental
appoints suitableinterested groups have favourable
interested groups
protection
staff to implement
views on the consultation process
the projectOutput 1: Groups • By the end of 1st year, over 80%• Workshop andinterested in theof interested groups are pleased
meeting reports
Northern Hills
with their involvement in the forest • Survey outcomes
Forest Reserve aremanagement process in the Northern
contributing to theHills Forest Reserve
development of a
• Recommendations emerge fromconsensus-based
consultations
vision of the integrated managementof natural resources

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ITTO Manual for project formulation• Interested partiesare collaborating

Strategy ofintervention

Verifiable indicators

Output 2: Forest
management plandeveloped andimplemented• Non-forest area subtraction
operations (Law of 1959)
completed before the 9thmonth of the project• Forest zoning completed before
the 12th month of the project,thus allowing forest management

Means ofverification

Key assumptions• Municipal
authorities• Management plan
cooperate towards• Management
the solution ofplan approvalcadastre issues
document
over private
forest properties• Project Reports• Over the 1st year the Forest
Department has strengthened land
unit capacity to support technologicalchanges in forest uses and tomonitor management plans• Before the end of the 2nd year theForest Department has adopted the
management plan, which is being
implemented during the 3rd year
Output 3: Efficient • In the first 2 years, 150 users have • Project report
forest use systems
been trained and 50 in the 3rd year, • Field controls
adopted by mostand they all indicate their satisfaction• Satisfaction
operators
by the end of the 3rd year
survey of• At the end of the 2nd year, 90% of beneficiaries
users have adopted at least one
new technology (eg tree felling,transport, timber drying andstorage, etc)

• Interested groups
are collaborating• The project helps at least 10
beneficiaries per municipality
gain access to credit facilities• Before the end of the project, 25
model farms have made progresswith their production systems

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Logical framework matrix, market Intelligence project
Strategy ofintervention

88

Verifiable indicators

Means ofverification

Key assumptions

Development• The proportion of forest sector
objective: To increase products in total exports increases
forest sector products
by 5% per year and reaches 25%
as a proportion of
by end of project
overall exports• Reports by the• National forestry
National Statistics
policies maintain
Bureau and theemphasis on
National Forest
sustainable
Statistical Informanagement
mation Systemand forestry
development

Specific objective: • Reliable information available at
To improve exporters’
the national level
access to the national
forest products
export database• Audit reportsof regional andnational datacollection andprocessing
networks• Ministry ofEnvironment andMinistry of Forestry
work together toestablish a common
statistical system

Output 1:
Methodology tocollect, register,process, analyseand disseminate
information
established• Operational procedures established • Report on theand validated
operational
methodology
adopted by the
Forest Sector
Statistical Information System• No relevant
assumption

Output 2: Designof the systemelaborated• Database characteristics andsystem requirements (hardware
and software) established• No relevant
assumption

Output 3: Central
Processing Unit
installed and inoperation• System statistical reports available • Monitoring visit• Project progress
report• Monitoring visit• Project reports• Regional departments provide
relevant dataand information

Output 4: Infor• Operational procedures andmation subsystems
methodologies for data collection
at regional levelestablishedestablished• Monitoring visits • Departments ofdifferent ministries• Project reports
integrated inproject work

Output 5:
Personnel trained• List ofparticipants• Workshops implemented

ITTO Manual for project formulation• No relevant
assumption

Logical framework matrix, forest industry project
Strategy ofintervention

Verifiable indicators

Means ofverification

Key assumptions

Development• Sustainable eaglewood production • Technical report • All stakeholders(government, local
objective: Tofrom natural and plantation• Recommendation
communities andpromote andresources
traders) support
sustain eaglewood • Increase in local and national
the projects
production from
earning
natural forest and• Government’s• Decreasing pressure on natural
eaglewood-based
willingness toforestindustries toward
conserve, manage
sustainable forest
and to utilize
management andEaglewood properly
forest communities’• Communities needwelfareand willingness
to have alternative
income from
EaglewoodSpecific objective 1: • Eaglewood production increased
To introduceby 100% in five years
inoculation technology for increasing
Eaglewood production• Recommendation • Positive attitude
and technicaltoward implemenreporttation ofEaglewoodstakeholders• Full participation
by local communities,
and government
officials to theprojects• Availability of
reliable Eaglewood
stands

Output 1.1:
Identified
tree species
susceptibility• Availability of Information on four
important eaglewood species
improved• Report on• Availability ofsome importantreliable eaglewood
eaglewood species, stands forpotency andexperiment
distribution• Local communityof eaglewood
owner willingness
to cooperate
in this projectOutput 1.2:
Selected pathogen
for inoculation• Availability of applicable inoculants • Report on theagent in the second quarter
best pathogen
for inoculation• Availability of
reliable eaglewood
data from
respondents• All stakeholders
prefer to give
all required
information

ITTO Manual for project formulation

89

Strategy ofintervention
Output 1.3. Better
inoculationengineering

Verifiable indicators• Availability of three selected
inoculation engineering

Means ofverification• Report on
inoculation
technique

Key assumptions• Availability of
reliable eaglewood
stands forexperiment• Availability of raw
materials fromvarious sourcesand qualities

Specific objective 2: • Improving knowledge and skill of
To disseminate
local community on eaglewood
the technology to
production
communities living
in and around theforest• Recommendation • Full participation by
and progress
local communities,
reporttraders and government officials tothe projects

Output 2.1:
• Two demonstration plots for
Two establishedplantation is established, covering
demonstration trial
100 ha in total
plots of Aquilaria sp
at West Kalimantan
and Banten provinces• Report on imple- • Full participation
local communities
mentation ofand local governdemonstration
ment officials totrial plots inthe trial port
two locations• Positive responsesof eaglewood
stakeholders on
providing real
information• Monitoring visits• Report on cost
analysis of establishing trial plots

90

Output 2.2: Trained • Training module developed
forest communities • Two training conductedof the inoculation• 25 participants trained
technology• Report on
training

Output 2.3:
Conducted
workshop• Proceeding and • Positive attitude
report on national from eaglewood
workshopstakeholders• Two workshop conducted• 100 participants in total attended

ITTO Manual for project formulation• Full participation
local communities,
and government
officials to theprojects

INTERNATIONAL TROPICAL TIMBER ORGANIZATIONINTERNATIONAL TROPICAL TIMBER ORGANIZATIONInternational Organizations Center, 5th Floor, Pacifico-Yokohama, 1-1-1, Minato-Mirai, Nishi-Ku, Yokohama, 220-0012, Japan
Tel 81-45-223-1110 Fax 81-45-223-1111 Email itto@itto.or.jp Web www.itto.int© ITTO 2009

ITTo

GI SERIES

13

Manual for project formulation
Third edition

2009

MANUAL FOR PROJECT FORMULATION – THIRD EDITION	
GI SERIES 13