Ex-ante Evaluation Paper (for Japanese ODA Loan)
South Asia Division 1, South Asia Department, JICA
1. Name of the ProjectCountry: India
Project: Project for Himachal Pradesh Forest Ecosystems Management and Livelihoods
Improvement
Loan Agreement: March 29, 2018
2. Background and Necessity of the Project(1) Current State and Issues of the Forest Biodiversity Sector in India
At the beginning of the 20th century, forests covered roughly 40% of the land in India.
However, due to massive land changes such as the large-scale conversion of forests tofarmland as well as unregulated deforestation, forest cover decreased to below 20% at onepoint.
In 2015, forest coverage improved to 21.3% (Source: Indian State of Forest Report 2015)as a result of recent forest conservation efforts such as massive afforestation. Nevertheless,in India as a whole the percentage of open forests (defined as forest with canopy density of10–40%) remains high at 42.8% (at 2015; Indian State of Forest Report 2015) principally
due to the progressive implementation of large-scale development projects in addition toincreased strain on forests from over-harvesting of firewood/animal feed by inhabitants living
nearby forests. This situation not only directly threatens residents' livelihoods, but also
impairs the watershed-recharging and soil erosion prevention functions of the forest
ecosystem (called "ecosystem services"), decreases agricultural crop yields due to theshortage of agricultural water, invites landslide disasters, and threatens the living standardsof residents.
Thus, conserving forest ecosystems through further expansion of forested area andimproving degraded forest conditions is an urgent issue.
India contains four biodiversity hotspots, and the Government of India has been focusingefforts on strengthening biodiversity conservation systems by establishing national parksand other protected areas; enacting laws related to biodiversity conservation; and prohibiting
the hunt or trade of animals and harvesting of certain plants. Nevertheless, the measurestaken by the Government still have some space for further development as the scientific
databases necessary for biodiversity conservation are underdeveloped and adequate
management plans for biodiversity conservation have yet to be fully prepared.
In 2014, the Indian government formulated the 'Green India Mission' to respond to thesituation. To achieve sustainable forest management, ecological conservation, and to helpcommunities living near forests cope with climate change, Green India Mission's goals wereto expand forest area by 5 million ha over 10 years from 2014, improve the quality of 5
million ha of existing forest, and improve ecosystem services in 10 million ha throughbiodiversity and watershed conservation activities.
The State of Himachal Pradesh (hereinafter, "Himachal Pradesh"), located in the westernpart of the Himalayan mountainous region with a population of 6.865 million, contains adiverse ecosystem due to its wide-ranging terrain from lowland hills to alpine areas. The
state has four large rivers that serve as water sources, supporting the society and economyof north and west India by supplying water to downstream regions such as Delhi and Punjab.
Therefore, preservation and betterment of the watershed recharging capacity of forest
ecosystems of this area is extremely important.
The state has committed efforts towards forest conservation for many years, improving theforest coverage rate from 27.1% in 2005, to 28.2% in 2015 (Indian State of Forest Report2015). Despite these efforts, in recent years, it has been confirmed increased strain on forest
resources from population growth, deforestation from development projects and forest fires,
which have resulted in 34.6% of forest remaining as open forest.
In addition to frequent occurrence of slope failures, there have also been reports ofgrassland degradation from over-grazing in some areas. Strengthening ecosystemservices―specifically the watershed-recharging and soil-protecting abilities provided byforests and grassland in the state―is a serious issue.
Himachal Pradesh is part of a Himalayan biodiversity hotspot (Note 1), an important area
in terms of biodiversity, which has been confirmed to contain multiple endangered species
that have been red-listed by the International Union for Conservation of Nature. Even so,
there has not been enough cooperation from residents from a conservation or protection
standpoint. Namely, many endangered and rare species do not have a clearly-defined
territory or habitat since the scientific database on biodiversity is inadequate at a state level,and not enough is being done to enlighten or promote awareness in local forest officers orcommunities living in and around protected areas. Even outside protected areas, because ofchanges in the habitat from forest depletion, there have been increasingly more encounters
between humans and wildlife, and incidents of injury or harm to humans and livestockincrease by the year. Strengthening biodiversity conservation in conjunction with forest
conservation is an urgent issue that must be addressed quickly to deal with this situation.
As a response to the situation, building on the recognizing that sustainable forest
ecosystem management contributes to the sustainable social and economic development ofits citizens, Himachal Pradesh established the 'H.P. Forest Sector Policy & Strategy 2005',
which set a target of raising the forest coverage rate from 27.1% at the time of inception, to35.5%. Under the initiative, the state is promoting sustainable conservation of forest
ecosystems, conservation of biodiversity, and also strengthening the livelihood foundation

for residents living near forests through enhancing its participatory forest management
system. The above strategy was also emulated in the '12th Five Year Plan (2012–17)', which
laid out policies on encouraging afforestation; sustainable management and conservation offorests/natural resources/wildlife outside protected areas; and awareness programs onforests, forestry and biodiversity. Accordingly, the 'Project for Himachal Pradesh Forest
Ecosystems Management and Livelihoods Improvement' (hereinafter, "the Project") has
been positioned as an initiative for dealing with these issues.
Note 1: Biodiversity hotspots represent key conservation areas around the world. Althoughmore than 1,500 unique vascular plants have been identified, areas where over 70% of theoriginal vegetation has been altered or lost are designated in each eco-region byConservation International, an international NGO.
(2) Japan and JICA's Biodiversity Sector Policy and the Positioning of this Project
The Country Assistance Policy for India (March 2016) set "cooperation toward
inclusive and sustainable growth" as a priority issue, stating the intention to provide
cooperation in dealing with environmental and climate change issues of forests, and tosupport fields that contribute to raising income levels among the impoverished segment ofthe population.
The JICA Country Analysis Paper for India (March 2012) concluded the importance ofproviding support for: sustainable forest management including afforestation and water/soil
conservation; biodiversity conservation; and livelihood improvement for local residents whodepend on forest resources.
Therefore, this project is consistent with the policy and plan. Among ODA loans to India,
there have been 25 loans totaling 246.5 billion yen to the forest sector as of January 2018.
There is also a past record of support to Himachal Pradesh with the ODA loan project, 'Swan
River Integrated Watershed Management Project (2006–2016)'.
(3) Other Donors' Activity
World Bank, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ, GermanCorporation for International Cooperation), and German government-owned developmentbank Kreditanstalt für Wiederaufbau (KfW) have been involved in projects concerning
watershed conservation, forest ecosystem management, and biodiversity conservation. The
Global Environment Facility (GEF) has also been providing support for formulation of anaction plan.
3. Project Description(1) Project Objective
This project aims to manage and enhance ecosystems in the project area, by sustainable
forest ecosystem management, biodiversity conservation, livelihood improvement supportand strengthening institutional capacity, thereby contributing to environmental conservationand sustainable socio-economic development in the project area in the State of HimachalPradesh.
(2) Project Site/Target Area:
The State of Himachal Pradesh(3) Project Components
1) Sustainable forest ecosystem management (afforestation, grassland management,
soil conservation activities, etc.)
2) Biodiversity conservation (provision of training, equipment, and materials to reduce
human-wildlife conflict)3) Livelihood improvement support (provision of training, equipment, and materials forlivelihood improvement)
4) Institutional capacity strengthening (training to the Forest Department and communityorganizations)5) Consulting services (managing project implementation, etc.)(4) Estimated Project Cost
13.921 billion yen (of which, the ODA Loan amount is 11.136 billion yen)(5) Schedule
Scheduled for March 2018–March 2028 (121 months in total). The project completion isdefined as the completion of all activities.
(6) Project Implementation Structure1) Borrower: President of India
2) Guarantor: None
3) Executing Agency: Forest Department, Government of Himachal Pradesh4) Operation and Maintenance Agency: O&M of afforestation is the responsibility ofcommunity organizations covered by the Project. After project completion, they areexpected to continue activities independently. A portion of revenues gained throughactivities conducted by the community organizations will provide funding for operationand maintenance expenses.
(7) Collaboration with Other Schemes and Donors
1) Related aid activities by Japan: None in particular.
2) Aid activities of other aid organizations: In the livelihood improvement support, theForest Department collaborates with relevant state organizations, NGOs, etc., andcarries out the planning and implementation of action plans designed to conform toresidents' needs.
(8) Environmental and Social Considerations/Poverty Reduction and Social Development
1) Environmental and Social Considerations①Category: FI②Categorization Rationale: Based on 'JICA Guidelines for Environmental and Social
Considerations' (promulgated in April 2010), sub-projects cannot be specified before
JICA's loan approval and it is also assumed that such sub-projects will have an impact
on the environmental.

③Other/Monitoring: While enlisting the assistance of consultants hired through the ODA
loan, the executing agency will categorize each sub-project according to the domestic
laws of India and 'JICA Guidelines for Environmental and Social Considerations', andadopt the necessary measures of the applicable category. Category A projects are not
to be included in sub-projects.
2) Cross-cutting Items: This project promotes sustainable forest management including
afforestation, and contributes to CO2 absorption and carbon capture as a means to
mitigate climate change.
3) Gender Classification: GI (S) Gender Integrated Project<Activities/Classification Rationale> Once the project starts, gender awareness training
will be provided to the Forest Department and community organizations. Activities will
also be implemented from a gender-centric viewpoint by collecting information ongender and analyzing issues.
(9) Other Important Issues: None in particular.
4. Target Outcomes(1) Quantitative Effects
Outcomes (Operational and Effect Indicators)
Indicator

Baseline(Actual value in2018)

Coverage of area underplantation (ha)0Survival rate of tree
plantedTall Plants (Note 1)
Normal Plants

080%
70%

The cases of
Human-Wildlife Conflict(Note 2)

Reduction in the project area

Number of community
organizations attending
biodiversity related
training

060 organizations

The number of livelihood
improvement activities
planned0460(Note 2)

(Note 3)

Percentage ofenhancement ofTarget (2030) (Note 3)[2 Years after Completion]
10,984household annual
income in the project
area
Number of community
institutions participatingin the capacity
development training
The number ofofficers/staff participatingin the capacity
development training

01,380 organizations

0359 people(Note 1): Seedlings grown larger than normal. The time required to grow seedlings depends
on the tree species.
(Note 2): Baseline value depends on results of a baseline survey conducted after projectstart.
(Note 3): Target value is reviewed based on a Detailed Activity Plan and Baseline Survey.
(2) Qualitative Effects
Qualitative effects include conservation of forest ecosystems (including biodiversity
conservation); livelihood improvement; promotion of women's social participation andeconomic activity; and mitigation of climate change through forest carbon fixation.
(3) Internal Rate of Return
Based on the following assumptions, the Economic Internal Rate of Return (EIRR) of thisproject is 9.6%. Since the Executing Agency will not collect revenues in this project, theFinancial Internal Rate of Return (FIRR) is not calculated.
[EIRR]
Cost: Project cost (excluding taxes etc.), operation and maintenance cost
Benefits: Income from special forest products; income from other livelihood activities;
greenhouse gas capture.
Project life: 40 years
5. External Factors and Risk Control(1) Preconditions: None in particular(2) External Factors: None in particular
6. Lessons Learned from Past Projects and Applications to this Project
The following lessons were learned from ex-post evaluation results etc. of the 'Gujarat
Afforestation and Development Project' implemented through ODA loan to India: Given that
community organizations' participation in sustainable forest management after the projecthas great impact, it is essential to encourage the residents of affected villages to participate
in preparing a Detailed Activity Plan and selecting activities based on it to ensure that projectcontent is rooted in the needs of residents. To accomplish this, it is also vital to build up thefacilitation skills of local forestry officers.
The activities of this project include community organization based forest ecosystemmanagement, biodiversity conservation, and support for livelihood improvement. In addition
to encouraging the active participation of local residents from the planning stage, the projectwill also strive for smooth implementation by providing skill development training to local
forestry officers in the areas of natural environment and ecosystem management based oncommunity participation.
7. Evaluation Results
This project is consistent with the Government of India's policies on development, Himachal
Pradesh's strategy, as well as Japan and JICA's assistance policy and analysis. Supporting
the implementation of this project is considered highly necessary based on the judgment that
it will contribute to SDG Goal 15: "to sustainably manage forests and preserve biodiversity."

8. Plan for Future Evaluation(1) Indicators to be Used
As described in sections 4 (1) - (3)(2) Timing of the Next Evaluation
Ex-post evaluation: Two years after the project completion