Ex-Ante Evaluation (for Japanese ODA Loan)
1. Name of the ProjectCountry: India
Project: Nagaland Forest Management Project
Loan Agreement: March 31, 2017
Loan Amount: 6,224 million yen
Borrower: The President of India
2. Background and Necessity of the Project(1) Current State and Issues of Forestry Sector Development in India
Since the start of tree planting and other forest conservation activities, the amountof forest land in India has been increasing since the 1990s, and the forest coveragerate was 21.3% in 2015. Despite these efforts, forest degradation has not improved
due to illegal or over-logging and other factors, and the ratio of open forest in theforest areas (forest with 10 to 39% tree canopy cover) rose to 42.8% (2015). Many
people in the poverty class live around forest areas and depend on the forests forlivelihood materials such as animal feed and fuel wood as well as sources of revenue.
Degradation of the forests threaten the livelihood of these people and may cause
decline in the water source protection, soil conservation, and other functions of forest
ecosystems, resulting in floods and other natural disasters or decreased crop harvest
due to irrigation water shortages. The situation has become especially pronouncedwith the recent increase in population, and forest conservation by alleviating thedegradation of forests that are closely linked to residents’ lives is an urgent task.
Nagaland, a state in Northeast India, has forests covering more than 78.2% (2015)of the land area. It is one of the top places for biodiversity in India and Myanmar thatare hot spots for biodiversity. In the state’s population of 1.98 million (2011), 86%
belong to a Scheduled Tribe, and each tribe has a different language and governing
system, leading traditional lifestyles. Their lifestyles and customs are closely
connected to shifting cultivation that is traditionally carried out in the state. Meanwhile,
Nagaland is located in a valley, and its weak infrastructure is partly cause by its poor
access from other states. While the ratio of the population that was below the poverty
line for all of India dropped by 15% from 2004 to 2011, the ratio for Nagalandincreased by 10%. More than 70% of the population of Nagaland lives in rural villages,
leading lives dependent on agriculture and forest resources. The topography ofNagaland features large height differences and steep gradients, and the flatlands thatare suitable for agricultural production are separated into small sections, so shifting
cultivation is widely practiced and generates over 60% of food provisions. Although
the shifting cultivation left forestland fallow for 10 to 12 years, allowing the land toretain its fertility and its water, the fallow period has dropped to about 5 to 6 yearsrecently, causing a problematic drop in productivity of crops. The rice output is 2.4 t/ha
for terrace farming, but only 1.7 t/ha for shifting cultivation. This has resulted in avicious cycle in which the scale of the shifting cultivation must then be increased as
new farmland is sought. In addition, forest resources such as fuel wood and minor
forest products are being over-exploited to secure food and means of subsistence.
The forest land area dropped from 13,044 km in 2013 to 12,966 km in 2015, and theNagaland has the fourth greatest decrease in forest land area of all the states. The
reduction in forest land area further diminishes the living standards of farmers inpoverty who rely on forest resources for their livelihood.
(2) Development Policies for Forestry Sector Development in India and the Priority ofthe Program
Forest conservation policies are considered a part of climate control measures in
the Green India Mission established by the Indian government in 2014. The purpose
is to achieve sustainable forest management and preservation of ecosystems and tohave communities around the forests carry out actions against climate change, andthe objectives are increasing forest land by 5 million ha in 10 years, improving
ecosystem services in 10 million ha through improvement in forest quality,
conservation of biodiversity, and protection of water sources, and improving thelivelihood of 3 million residents around the forests. Other goals are recognition of theimportance of the communities in forest protection activities, capacity building of theJoint Forest Management Committee, and building of an appropriate forest
management system through cooperation between residential groups and thegovernment. Moreover, Nagaland is one of the states in northeastern India that isbehind in development. The Indian government prioritizes fund allocation to Nagalandand its North Eastern Region Vision 2020 campaign places importance onmaintaining and expanding the forests, with the government initiating activities in joint
forest management. In a joint India-Japan statement at a top-level meeting in
September 2014, it was confirmed that the governments would actively support
economic development and raising prosperity in the northeastern states. The
Nagaland Forest Management Project (below, “the Project”) aims to restore theNagaland forests that shrunk due to shifting cultivation and promote development of
the northeastern states through community participation-based forest preservation
activities, and this Project is in line with the policies of the Indian government.
(3) Japan and JICA’s Policy and Operations in India’s Forestry Sector
In Japan’s Country Assistance Policy for India (March 2016), ‘supporting
sustainable and inclusive growth’ is set as one priority area. The policy states thatJapan will carry out programs to increase income to people living in poverty andprovide assistance to the forestry sector to cope with environmental and climatechange problems. JICA’s Country Analysis Paper for India (March 2012) identified
priority areas as afforestation activities, actions for sustainable forest management

such as water and soil preservation activities, and assistance in biodiversity
conservation to achieve preservation and sustainable use of natural resources as wellas assistance with activities to improve the livelihood of local residents who depend
on forest resources. This Project is in line with these policies and analysis results.
JICA previously received authorization to provide ODA loans to India of the amount of225.8 billion yen for 23 projects in February 2017.
(4) Other Donors’ Activities
The World Bank, Asian Development Bank, and other donors have been supporting
environmental preservation fields, but there is no overlap between their projects andthis Project.
(5) Necessity of the ProjectThis Project is congruent with the development policies of the Indian government,
the needs of Nagaland, and the assistance policies and analyses of JICA. Moreover, it
may contribute to sustainable development goal (SDG) 1 that is to eradicate poverty
and goal 15 that is to sustainably manage forests and halt biodiversity loss. Therefore,
it is necessary to assist in the implementation of this project.
3. Project Description(1) Project Objective
The project will restore forests in the lands under shifting cultivation in Nagaland innortheast India, and provide means to improve livelihood in order to improve the forest
ecosystem and secure livelihood means other than shifting cultivation to contribute tosustainable forest environment conservation and improved livelihood for local
residents.
(2) Project Site/Target Area: Nagaland(3) Project Components
1) Community participation-based forest preservation activities (e.g. restoring
shifting cultivation sites and forests through afforestation, forest ecosystemconservation activities) (direct management)
2) Activities to improvement livelihood and develop the communities (e.g.
income-generating activities targeting Self Help Groups (SHGs)) (directmanagement)
3) Capacity building activities for Executing Agencies (e.g. skill-building workshops)(international competitive bidding)4) Consulting services (implementation supervision) (short-list method)(4) Project Cost
Loan: 8,534 million yen (Loan amount: 6,224 million yen)
(5) Project Implementation Schedule/Cooperation Period
March 2017 to March 2027 (121 months in total). The project completion is definedas the completion of all activities.

(6) Project Implementation Structure1) Borrower: The President of India
2) Executing Agency: Department of Environment, Forest and Climate Change,Government of Nagaland3) Operation and Maintenance System: Work to develop afforested areas is carriedout by the Joint Forest Management Committees that are the target of thisProject. The Joint Forest Management Committees jointly accumulate part of theprofits by selling forestry products and use expenses necessary for developmentwork. Technical and financial management capacity building of Joint Forest
Management Committees is carried out as part of the Project activities.
Department of Environment, Forest and Climate Change, Government ofNagaland will continue operating monitoring and assessment systems even after
the Project ends. As Department of Environment, Forest and Climate Change
carries out monitoring and assessment for Nagaland’s own projects, there are no
particular concerns about technical implementation capacity.
(7) Environmental and Social Considerations/Poverty Reduction/Social Development
1) Environmental and Social Considerations① Category: FI② Reason for Categorization: This Project is classified as Category FI because
no sub-projects can be identified before the approval of JICA’s loans according
to the JICA Guidelines for Environmental and Social Considerations (put intoeffect in April 2010) and such sub-projects are estimated to have anenvironmental impact.
③ Other/Monitoring: In this Project, the Executing Agency receives assistancefrom consultants hired with loan funds to categorize the sub-projects based on
India’s laws and systems as well as the JICA Guidelines for Environmental andSocial Considerations and takes the necessary measures for the respective
category. No Category A sub-projects are included.
2) Promotion of Poverty Reduction: Although the poverty rate for all of India
dropped by 15% from 2004 to 2011, the rate for Nagaland increased by 10%. As
many of the people who would derive benefit from the Project are living in forest
areas in poverty, this Project helps control poverty.
3) Promotion of Social Development (e.g. Gender Perspective, Measures toPrevent Infectious Diseases Including AIDS, Participatory Development,
Consideration for Persons with Disabilities, etc.) In this Project, community
participation-based afforestation activities and livelihood improvement andcommunity development activities that incorporate gender considerations andconsideration for people with disabilities are carried out through Joint Forest
Management Committees and SHGs.

(8) Collaboration with Other Donors: In livelihood improvement and community
development activities, the Forestry Department collaborates with relevant state
government organizations and local NGOs to carry out all steps from formulating
to carrying out action plans that are in line with residents’ needs.
4. Targeted Outcomes(1) Quantitative Effects
1) Operation and Effect Indicators
Indicator
Afforestati
on area(ha)

Survival
rate ofplantedtrees(%)
Forestcoveragerate(%)

Agroforestry model in shifting
cultivation sites (Model 1)
Afforestation model in shifting
cultivation sites that are lying fallow(Model 2)
Switching model from shifting
cultivation to forests (Model 3)
Transition model from shifting
cultivation to community protectedzones (Model 4)Model for developing andexpanding existing community
protected zones (Model 5)
Model 1Model 2Model 3Models 4 and 5

Baseline(recorded in 2017)

Target (2029)[2 years afterprojectcompletion]*1

10,094*2*1

4,601*2*1

4,601*2*1

3,640*2*153,050*2

*1*2

*1*2

*1*2

*1*2

*1*2
Model 1
*1*2
Model 2
*1*2
Model 3
*1*2
Model 4
*1*2
Model 5
Number of SHGs that have completed two cycles*1
227of borrowing and returning funds*1 Set based on the results of baseline surveys conducted at the start of theProject.
*2 Based on the micro plan created after the Project began, target values wererevised and set with the assistance of consultants.

2) Impact: None in particular.
(2) Qualitative Effects
E.g. forest preservation, biodiversity conservation, improvement in living

standards of residents, promotion of social participation and economic activities
by women, and climate control(3) Internal Rate of Return
Based on the following preconditions, the economic internal rate of return(EIRR) of the Project is 11.2%. As making profit was not the purpose of thisProject, the financial rate of return (FIRR) was not calculated.
[EIRR]
Cost: Project cost (excluding tax), O&M cost
Benefit: Income from minor forest products
Project Life: 40 years
5. External Factors and Risk Control
Political and economic deterioration as well as natural disasters in India and the areasurrounding the project sites.
6. Evaluation Results and Lessons Learned from Past Projects(1) Results of Evaluation of Similar Past Projects
From the ex-post evaluation of the Gujarat Forestry Development Project,participation in sustainable forest management by resident organizations after theproject ended greatly affected the outcomes of the project. It is therefore necessary to
select community activities in target villages that are based on residents’ needs andencourage participation by local residents in formulating detailed activity plans. Doingso absolutely requires capacity building of facilitation skills in sire forest managers.
(2) Lessons for the ProjectIn this Project, forest preservation activities and livelihood improvement activities
will be carried out through resident organizations. However, special efforts must be
given to endure the Project is carried out smoothly, such as encouraging active
participation by local residents from the planning stage onwards and carrying out
workshops to increase community participation-based forest management related
skills in sire forest managers of the Executing Agency.
7. Plans for Future Evaluation(1) Indicators to be Used
1) Afforestation area of models 1 to 5 (ha)2) Survival rate of planted trees of models 1 to 5 (%)3) Forest coverage rate of models 1 to 5 (%)4) Number of SHGs that have completed two cycles of borrowing and returning
5)
6)

funds
Economic internal rate of return (EIRR) (%)

(2) Timing
Two years after project completion.
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