zambia - livestock infrastructure support project - appraisal report
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AFRICAN DEVELOPMENT FUND
PROJECT : LIVESTOCK INFRASTRUCTURE SUPPORT PROJECT
COUNTRY : ZAMBIA
APPRAISAL : REPORT
OSAN DEPARTMENT
June 2013
Appraisal Team
Regional Director : Mr. C. OJUKWU, Director, ORSB
Sector Director : Mr. A. BEILEH, Acting Director, OSAN
Division Manager : Mrs. J. MWANGI, Division manager, OSAN.3
Team Leader : Mr. J MENG-LIHINAG, Principal Agricultural Economist,
OSAN.3
TABLE OF CONTENTS
Page
Currency Equivalents, Fiscal Year, Weights and Measures, Acronyms i
Loan Information ii
Project Summary iii
Results Based Logical Framework (Project Matrix) iv
Project Time Frame/Implementation Schedule v
I. STRATEGIC THRUST AND RATIONALE 1
1.1 Project Linkages with Country Strategy and Objectives 1
1.2 Rationale for Bank’s Involvement 1
1.3 Donors Coordination 2
II. PROJECT DESCRIPTION 3
2.1 Project Objectives and Components 3
2.2 Technical Solutions Retained and Other Alternatives Explored 4
2.3 Project Type 4
2.4 Project Cost and Financing Arrangements 4
2.5 Project Target Area and Population 6
2.6 Participatory Process for Project Identification, Design and
Implementation
7
2.7 Bank Group Experience and Lessons Reflected in Project Design 7
2.8 Project Performance Indicators 7
III. PROJECT FEASIBILITY 7
3.1 Economic and Financial Performance 7
3.2 Environmental and Social Impacts 8
IV. IMPLEMENTATION 10
4.1 Implementation Arrangements 10
4.2 Monitoring 13
4.3 Governance 13
4.4 Sustainability 14
4.5 Risk Management 14
4.6 Knowledge Building 15
V. LEGAL INSTRUMENTS AND AUTHORITY 15
5.1 Legal Instruments 15
5.2 Conditions Associated with Bank’s Intervention 15
5.3 Compliance with Bank Policies 16
VI. RECOMMENDATION 16
LIST OF APPENDICES
Appendix 1.
Zambia - Comparative Socio-economic Indicators
Appendix 2. AfDB’s Active Portfolio in Zambia
Appendix 3. Projects Financed by the Bank and Other Development
Partners in the Country
Appendix 4. Map of Project Area and Definition of Livestock
Infrastructures
Appendix 5. Calculation of Economic and Financial Internal Rate of Return
i
Currency Equivalents
(March 2013)
1 UA = 1.535 USD
1 UA = 1.1538 Euro
1 UA = 8,127.94 ZMK
1 UA = 8.12794 ZMW (Rebased)
1 USD = 5,295.07 ZMK
1 USD = 5.29507 ZMW (Rebased)
[Note: The Zambian currency (ZMK) was rebased on 1st January 2013 to the new alphabetic ISO Code ZMW.
The ZMK will cease on 30th
June 2013. Consequently, the rebased currency (ZMW) is used in the cost tables]
Fiscal Year
1st January to 31
st December
Weights and Measures
1 metric tonne (t) = 2,204 pounds (lbs)
1 metre (m) = 3.28 feet (ft)
1 millimetre (mm) = 0.03937 inch
1 kilometre (km) = 0.62 mile
1 hectare (ha) = 2.471 acres
Acronyms and Abbreviations
ADF ………… African Development Fund
AfDB ………… African Development Bank
ASF ………… African Swine Fever
CAADP ………… Comprehensive Africa Agriculture Development Programme
CBPP ………… Contagious Bovine Pleuro-pneumonia
FMD ………… Foot and Mouth Disease
GoZ ………… Government of Zambia
LIMS ………… Livestock Information Management System
LISP ………… Livestock Infrastructure Support Project
M&E ………… Monitoring & Evaluation
MAL ………… Ministry of Agriculture and Livestock
NALEIC ………… National Livestock and Epidemiological Information Centre
NCD ………… Newcastle Disease
NGO ………… Non-Governmental Organization
PCT ………… Project Coordination Team
PS ………… Permanent Secretary
PY ………… Project Year
SESA ………… Strategic Environmental and Social Assessment
SNDP ………… Sixth National Development Plan
UA ………… Unit of Account
USD/$ ………… United States Dollars
ZMK ………… Zambian Kwacha (Old)
ZMW ………… Zambian Kwacha (New/Rebased)
ii
Loan Information
Client’s information
BORROWER: Republic of Zambia
EXECUTING AGENCY: Ministry of Agriculture and Livestock
IMPLEMENTING AGENCY: Ministry of Agriculture and Livestock
Financing plan
Source Amount (UA million) Percentage Instrument
ADF 12.001 87.6% Loan
GoZ 1.69 12.3% N/A
Beneficiaries 0.02 0.1% N/A
Total Cost 13.71 100.0%
Important Financial Information (ADF Loan)
Loan Currency UA
Interest Type N/A
Interest Rate Spread N/A
Commitment Fee 0.5% per annum, on undisbursed portion of loan.
Service Charge 0.75% per annum, on outstanding balances.
Tenor 600 months (50 years)
Grace Period 120 months (10 years)
FIRR, NPV (base case) 20%, NPV at 12% = USD 4.02 million
EIRR (base case) 22%, NPV at 12% = USD 4.38 million
Timeframe - Main Milestones (expected)
Concept Note Approval
14
th March 2013
Project Approval 19th June, 2013
Effectiveness August, 2013
Completion July, 2018
Last Disbursement December, 2018
Last Repayment July 2073
1 The proceeds of the ADF loan will also be used to reimburse the PPF advance of UA 300,000.
iii
PROJECT SUMMARY
1.1 Project Overview: The Livestock Infrastructure Support Project’s (LISP) objectives
are to improve smallholder livestock production and productivity, create market linkages and
increase household income. LISP will be implemented in 9 Districts in Northern and
Muchinga Provinces. LISP comprises 3 components (1) Livestock Infrastructure
Development, (2) Capacity Building, and (3) Project Management. The main outputs are (i)
177 livestock service centres2 (LSC) tier 1, 1+ & 2 at community level, (ii) 2 livestock
service centres tier 3, (iii) 3 milk collection centres, (iv) 2 livestock markets, (v) 8 livestock
slaughter facilities, (vi) 80 km of feeder roads, (vii) 2 Regional and 7 District veterinary
laboratories, (viii) 2 veterinary quarantine stations, and (ix) 5 veterinary check points.
1.2 The LISP will be implemented over a period of 5 years (2013-2018) and the executing
agency is the Ministry of Agriculture and Livestock (MAL). Project activities will be
coordinated by a Project Coordination Team (PCT) using the existing Government structures.
The Project cost is estimated at UA 13.71 million of which ADF Loan is UA 12.00 million
(87.6%), Government’s contribution is UA 1.69 million (12.3%) and the beneficiaries’
contribution is UA 0.02 million (0.1%). A Project Preparation Facility (PPF) of UA 300,000
has already been granted and will be repaid from the said loan amount.
1.3 LISP is expected to directly benefit 100,000 livestock keeping households including
33,600 female headed households. LISP will mobilise participating farmers into fully trained
and empowered farmer groups. It will increase employment opportunities in livestock
husbandry and marketing, and livestock products value chain. Public service capacity for the
delivery of livestock services mainly disease prevention and control will be enhanced. The
Project will also facilitate participation of the private sector through leasing out some of the
structures within the LSC which will be used as outlet for veterinary drugs and livestock
feeds supplements. About 800,000 people, including 400,000 women, will indirectly benefit
from increase in supply of quality livestock products.
1.4 Needs Assessment: In line with its strategy of economic diversification, GoZ has
launched a nationwide programme to scale-up the development of the livestock sub-sector
and enhance its contribution to the national economy. The GoZ has requested the Bank’s
financial support for the implementation of LISP. The livestock sub-sector is an important
source of economic growth and job creation to foster poverty reduction.
1.5 Bank’s Added Value: The Bank’s Agricultural Sector Strategy (AgSS: 2010-2014)
Pillar I focuses on agricultural infrastructure. The Bank, as a result of its long term
involvement in the livestock sub-sector, has developed sound experience in satisfactory
development of rural infrastructures. Lessons learned include the need to involve intended
beneficiaries in infrastructure selection, siting, construction and management inorder to
enhance ownership and sustainability which have been mainstreamed in the design of LISP
and would be instrumental during implementation.
1.6 Knowledge Management: Knowledge gained through implementation of previous
projects has been used in designing LISP. Knowledge that will be generated through
implementation of LISP will be helpful during design and management of future projects.
Lessons learned will be documented through quarterly and annual progress reports, mid-term
review report, beneficiary impact assessment survey report and project completion report.
2 Description of livestock infrastructures is in Appendix 4b of this report (Volume I of II).
iv
RESULTS-BASED LOGICAL FRAMEWORK (PROJECT MATRIX)
Country and Project Name: Zambia – Livestock Infrastructure Support Project (LISP)
Purpose of the project: To improve smallholder livestock production, productivity, market linkages and household income.
RESULTS CHAIN
PERFORMANCE INDICATORS MEANS OF
VERIFICATION
RISKS /MITIGATION
MEASURES Indicator (including CSI) Baseline Target
IMP
AC
T
1.1 Contribute to poverty reduction
1.1 Proportion of population living in poverty
Baseline 2012
1.1. 70%
Target 2020
1.1. 65%
Poverty Reduction Strategy Paper
Household surveys
OU
TC
OM
ES
2.1 Decreased prevalence of
the main diseases
2.1. Prevalence rates for CBPP, FMD, ASF
and NCD (%)
Baseline 2012
2.1. CBPP (0.03), FMD (0.35), ASF (0.10) and NCD (0..25)
Target 2019
2.1. CBPP (0.02), FMD (0.30), ASF (0.09) and NCD (0.20)
Periodical epidemiological
surveys (for
prevalence rates).
Project reports.
2.2 Improved livestock
performance.
2.3 Improved income of livestock farmers
including women/youth
2.2.1 Average population increase rate (%) for
cattle, goats and chickens
2.2.2 Carcass weight (kg) for cattle and goats 2.2.3 Milk production (litres/year) per cow
2.3 Average annual income of livestock
farmers
2.2.1 Cattle (6.3), goats (12) and
chickens (15)
2.2.2 Cattle (126) and goats (18) 2.2.3 Milk (1,500)
2.3 USD 364
2.2.1 Cattle (10), goats (15) and chickens (22)
2.2.2 Cattle (168) and goats (23)
2.2.3 Milk (2,500)
2.3 USD 512
OU
TP
UT
S
3. Livestock Infrastructure
Development
3.1 Rural Community Infrastructures improved
3.2 Public infrastructures
improved
4. Capacity building 4.1 Farmers and staff
empowered/trained
5. Project Management
5.1 Project properly
managed.
3.1.1 Number of LSCs Tier 1, 1+ & 2
3.1.2 Number of milk collection centre
3.1.3 Number of livestock marketing centres
3.1.4 Number of slaughter facilities
3.2.1 Length (km) of all-weather feeder roads
3.2.2 Number of laboratories
3.2.3 Number of small quarantine stations 3.2.4 Number of LSC Tier 3
3.2.5 Number of veterinary check points
4.1.1 Number of farmers & staff trained. 4.1.2 No of livestock cooperatives formed.
4.1.3 Number of rural households reached.
4.1.4 No. of women/youth livestock groups (pass-on scheme) formed.
4.1.5 No. of women/youth hides/skins
processing groups formed. 5.1.1 Number of quarterly progress reports
5.1.2 Number of mid-term review reports
5.1.3 Number of audit reports per year 5.1.4 Number of procurement plans per year
5.1.5 Number of work plans per year
5.1.6 Disbursement rate (average per year)
Project Area – Baseline 2013 3.1.1 30
3.1.2 2
3.1.3 0
3.1.4 2
3.2.1 0
3.2.2 2 3.2.3 0
3.2.4 0
3.2.5 1
4.1.1 0
4.1.2 0
4.1.3 0 4.1.4 0
4.1.5 0
5.1.1 0
5.1.2 0 5.1.3 0
5.1.4 0
5.1.5 0 5.1.6 0
Project Area - Target 2018 3.1.1 177
3.1.2 3
3.1.3 2
3.1.4 8
3.2.1 80
3.2.2 9 3.2.3 2
3.2.4 2
3.2.5 5
4.1.1 100,000 farmers & 120 staff (>50% female)
4.1.2 248 by year 5
4.1.3 190,000 HH (33,600 Female HH) 4.1.4 27
4.1.5 18
5.1.1 4 per year
5.1.2 1 (project life) 5.1.3 1
5.1.4 1
5.1.5 1 5.1.6 20%
Project reports
Risk: Incompetent Contractors
Mitigation: (i) use
stringent evaluation
process, and (ii) follow-
up contract execution.
Risk: Low Livestock
Population Mitigation: Continued
GoZ restocking programme.
Risk: PCT base in
Lusaka.
Mitigation: The core PCT staff will be based
in the project area
(Kasama District), about 800km from Lusaka for
effective project
supervision.
KE
Y
AC
TIV
ITIE
S
Components Inputs
Component 1: Livestock Infrastructure Development (UA 9.31 million, 67.9%)
Component 2: Capacity Building (UA 3.42 million, 25.0%) Component 3: Project Management (UA 0.98 million, 7.1%)
Total: UA 13.71 million
Project Total Cost: UA 13.71 million
ADF loan: UA 12.00 million (87.6%).
Government: UA 1.69 million (12.3%).
Beneficiaries: UA 0.02 million (0.1%).
v
PROJECT TIME FRAME/IMPLEMENTATION SCHEDULE3
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
1 Appraisal Mission
2 Loan Negotiations
3 Board Approval
4 Signature
5 Appointment of Government Staff for the Project
6 Fulfilment of Loan Conditions
7 Project Launch/Start Off
8 Project Preparation - Infrastructure Design
Component 1: Livestock Infrastructure Development
9 Rural Community Infrastructure Support
9.1 Preparatory Activities
9.2 Construction of LSC Tier 1
9.3 Construction of LSC Tier 1+
9.4 Construction of LSC Tier 2
9.5 Rehabilitation of Milk Collection Centres
9.6 Construction of Livestock Market Centres
9.7 Construction of Livestock Slaughter Houses
10 Public Infrastructure Support
10.1 Preparatory Activities
10.2 Rehabilitation of Rural Feeder Roads
10.3 Construction of Regional Veterinary Laboratories
10.4 Construction of District Veterinary Laboratories
10.5 Establishment of Quarantine Stations
10.6 Construction of LSC Tier 3
10.7 Construction of Vet Check Points (Full Model)
10.8 Construction of Vet Check Points (Boom Gate)
Component 2: Capacity Building
11 Support to Participating Institutions
12 Women/Youth Empowerment
Component 3: Project Management
13 Project Management
14 Bank: Supervision Missions
15 Bank: Mid-Term Review Mission
16 Bank: Project Completion Mission
Notes: Q1 = First Quarter (January, February, March); Q2 = Second Quarter (April, May, June); Q3 = Third Quarter (July, August, September) and Q4 = Forth Quarter (October, November, December)
PY1 = Project Year 1
PY1 PY2 PY3Description of ActivitiesNo PY5
Financial Year = Calendar Year
PY4PY0
3 This is a general implementation schedule. Consequently, the detailed annual work schedule will be developed by the Project Coordination Team (PCT) before the beginning of each fiscal year, based on the
component activities and the associated detailed cost tables.
1
REPORT AND RECOMMENDATION OF THE MANAGEMENT TO THE BOARD
OF DIRECTORS ON A PROPOSED LOAN TO FINANCE THE ZAMBIA LIVESTOCK
INFRASTRUCTURE SUPPORT PROJECT
Management submits the following Report and Recommendation on a proposed ADF Loan for UA
12.00 million to finance the Livestock Infrastructure Support Project (LISP) in Zambia.
I – STRATEGIC THRUST & RATIONALE
1.1. Project Linkages with Country Strategy and Objectives
1.1.1. The GoZ development agenda is articulated in the National Vision 2030 which reflects the
aspirations and determination to be a prosperous middle-income country by year 2030. The Sixth
National Development Plan (SNDP: 2011-2015) and Medium Term Expenditure Framework
(MTEF: 2013-2015), which operationalize the National Vision 2030, have prioritised agriculture
among the key growth sectors of the economy. With regard to the livestock sub-sector, the main
thrust is to improve livestock production and productivity mainly through infrastructure
development, creation of Disease Free Zone (DFZ), and processing of livestock products.
1.1.2. The Bank’s Results-Based Country Strategy Paper (CSP: 2011-2015) for Zambia focuses on
(i) support to economic diversification through infrastructure development (Pillar 1) and (ii) support
to economic and financial governance (Pillar 2). The LISP aims at development of various livestock
infrastructures, mainly for disease control, and is in line with Pillar I of the CSP (2011-2015) Mid-
Term Review (MTR) Productive Sector. It is also in line with the Bank’s AgSS (2010-2014) and
the Ten Year Strategy (2013-2022).
1.2. Rationale for Bank’s Involvement
1.2.1. The agriculture sector is well liberalised. Government sector policy has focused on reforms
to the maize production and market subsidies that consume more than 8% of the national budget.
Major stakeholders have been urging government to rationalize food reserve management and
reform the way the input subsidy is managed to encourage private sector participation. In the
livestock sub-sector, Government’s presence is mainly in the control of diseases of national
economic importance. Livestock sub-sector has potential to stimulate the Zambian economic
growth and create jobs. However, inadequate livestock infrastructures, high disease incidence and
poor livestock service delivery have been identified as main bottlenecks for sustainable growth of
the sub-sector. Consequently, the Bank’s strategy is to contribute to the Government’s drive to
enhance the contribution of the livestock sub-sector to the national economy and poverty reduction.
1.2.2. The Bank’s focus on infrastructure fills a vital but missing financial gap not fully covered
by other partners and is urgently required to support economic diversification. The 2012 Country
Portfolio Performance Review (CPPR) assessed the overall portfolio performance as satisfactory,
with implementation objectives and development outcomes of 2.19 and 2.52 respectively. The
invaluable portfolio implementation experience and lessons learned were mainstreamed in the
design of the LISP and would be instrumental in its implementation. The agriculture project (Small-
scale Irrigation Project-SIP) has attained physical completion rate of 60% of the planned 3
irrigation schemes and the performance rating is satisfactory. The SIP is now setting up institutional
management mechanism and the timely establishment of management arrangements for
infrastructure projects is a useful lesson for LISP. Appendix 2 presents the Bank’s active portfolio
2
in Zambia. The closed Agriculture Sector Investment Programme (ASIP: 1996-2008) had a
significant component of livestock development. The project completion report indicated
satisfactory progress on completion of most outputs. However, the livestock markets were not fully
completed and operationalized by the time the project ended due to (i) delay in start-up when ASIP
implementation was entrusted to the MAL, (ii) lack of designs/drawings at project start-up which
resulted in delay in implementation, and (iii) inadequate consultation of stakeholders in selection of
sites for the infrastructures. In this regard, LISP will be implemented using the Project Coordination
Team whose capacity will be enhanced by recruitment of professional staff and the Project Preparation
Facility will be used to produce detailed drawings and tender documents for the infrastructures. There
has been wide consultation with stakeholders.
1.3. Donors Coordination
Table: 1.1
Donor Support to Agriculture (2012)
Sector or subsector*
Size
GDP Exports Labour Force
Agriculture 13 20 67
Players - Public Annual Expenditure (average) : 2012 Budget
Government Donors AfDB 3.4% FAO 1.1% Finland 4.4%
UA m UA 229.4 m UA 68.9 m WB 36.3% JICA 3.4% USAID 7.9%
% 70.0% 30.0% EU 4.7% WFP 9.3% Norway 7.0%
DFID 5.1% IFAD 17.4%
Level of Donor Coordination
Existence of Thematic Working Groups (this sector/sub-sector) [Y]
Existence of SWAps or Integrated Sector Approaches [N]
ADB's Involvement in Donors Coordination [M]
Key: L: Leader. M: member but not leader. None: no involvement. Y: Yes. N: No
1.3.1 Donor contribution to the agriculture budget was about 30% in the 2012 fiscal year, with an
active portfolio totalling UA 68.9 million. The Development Partners (DPs) percentage
distributions are indicated in Table 1.1. The DPs’ contributions are coordinated by the Ministry of
Finance. The Agriculture Cooperating Partner Group (Ag-CP), whose current chair is USAID, has
been coordinating activities in the sector and engaging Government in dialogue on key policy
developments. The Zambia Field Office (ZMFO) chaired the Ag-CP in 2012 and has played a
pivotal role in donor coordination activities and overall portfolio management. The current DPs’
activities are indicated in Appendix 3. The national livestock development programme that
Government has embarked on is coordinated with various CPs who are funding different aspects or
specific geographic zones. The World Bank is covering Southern Central and Eastern provinces.
IFAD is covering livestock disease control throughout the country. EU is providing institutional
capacity building within the MAL. AfDB is covering the northern part of the country. The WB and
AfDB projects are quite similar in design, focusing on disease control, though WB’s project has
small infrastructure component. The Government is also funding some livestock development
programme from its own resources.
3
II – PROJECT DESCRIPTION
2.1. Project Objectives and Components
2.1.1. The Project objectives are to improve smallholder livestock production, productivity, create
market linkages and increase incomes of livestock farmers. The LISP has 3 components as
indicated in Table 2.1.
Table 2.1
Description of Project Components
No Component
Name
Total Cost
(UA million)
Component Description4
1 Livestock
Infrastructure
Development5
9.31
(67.9%)
Sub-component 1: Rural Community Infrastructure Support
156 demand-driven livestock service centres tier 1 constructed.
16 livestock service centres tier 1+ constructed/rehabilitated.
5 livestock service centres tier 2 constructed.
3 milk collection centres constructed/rehabilitated.
2 livestock market centres constructed.
8 livestock slaughter facilities constructed.
Project Preparation Facility – Detailed Designs
Sub-component 2: Public Infrastructure Support
80 km of feeder road rehabilitated.
2 Regional veterinary laboratories rehabilitated.
7 District veterinary laboratories rehabilitated.
2 veterinary quarantine stations established.
2 livestock service centres tier 3 constructed (within existing
Government livestock ranches/breeding centres).
2 veterinary check points constructed.
3 veterinary check points (with boom gate only) constructed.
Assorted equipment for CVRI’s Public Health Laboratory.
2 Capacity
Building 3.42
(25.0%)
Sub-component 1: Support to Participating Institutions
Consultancies (including NGO services) on pilot livestock-pass on
scheme and biogas digesters, forage production and management
and local training-institutions.
Community mobilisation activities and formation of groups and
cooperatives.
Procurement of office equipment and furniture.
Staff and farmer training on livestock management (at least 50%
women).
Support to Livestock Information Management System (LIMS)
under National Livestock and Epidemiological Information Centre
(NALEIC).
Pilot livestock stocking (cattle and goats).
Livestock management-field demonstration centres.
Pasture and rangeland management (within LSC Tier 3).
Environmental and social management.
Sub-component 2: Women/youth Empowerment
Formation/strengthening of 45 women/youth groups.
4 The details have been provided in the Technical Annexes (Volume II of II). 5 Description of livestock infrastructures is in Appendix 4b of this report (Volume I of II).
4
No Component
Name
Total Cost
(UA million)
Component Description4
Income generating activities (small-stock pass-on scheme) for 27
participating women and youth groups.
Training and empowerment of 18 women and youth groups in skin
and hides processing units (leather and leather products - mini
backyards vegetable tanneries).
Nutrition, HIV/AIDS and malaria awareness (at least 50% women)
Artisan (youth) training for maintenance of LSC tier 1.
3 Project
Management 0.98
(7.1%)
Project management including supervision.
Progress review meetings including MTR and PCR.
Financial management including audit.
Support to PCT - recruitment of professional and support staff.
Participatory monitoring and evaluation (M&E).
Total 13.71
2.2. Technical Solutions Retained and Other Alternatives Explored
The Project will promote investments in public and community livestock infrastructures
since they mutually enforce each other. This will cultivate a sense of ownership and sustainability
during and beyond the Project lifespan. Most of the investments are in animal health area due to the
extensive production system and the exposure to potential sources of diseases from Tanzania and
Democratic Republic of Congo. Table 2.2 indicates other alternatives which were explored.
Table 2.2
Alternatives Considered and Reasons for Rejection
Alternative Name Brief Description Reasons for Rejection
Installation of spray
races
Use of spray races
for control of
ticks.
High operation and maintenance costs and also uses a lot of water for
the spray race which is not readily available in remote rural areas.
Discharges chemicals into the environment.
Improved feeding Provide higher
quality feed to
livestock to
enhance growth
The initial performance is low (126 kg carcass). The potential for cattle
production in the area can be higher by improving reproductive, health
management and genetics. The ecosystem is dealt with as an extensive
type of production system but still its potential is not attained.
2.3. Project Type
LISP is a stand-alone Investment Project funded by the ADF XII Loan resources.
2.4. Project Cost and Financing Arrangements
2.4.1 The total Project cost is UA 13.71 million, at year 2013 price level, including average 7.0%
physical and 6.4% price contingencies, which will be financed by (i) ADF Loan6: UA 12.00 million
(87.6%) covering all major activities, (ii) the Government contribution: UA 1.69 million (12.3%)
through value for Government office space rental, salaries for Government staff and utilities such as
electricity and water, and (iii) beneficiaries’ contribution: UA 0.02 million (0.1%) in form of
6 The ADF Loan information is provided on page (ii), PAR volume I of II.
5
operation and maintenance of the LSC tier 1 and 1+ as per Government’s policy to ensure
sustainability. The Bank is the lead financier. The cost details are indicated in Tables 2.3 to 2.7.
2.4.2 Project Preparation Facility (PPF): The Government was provided with a Project
Preparation Facility (PPF) from ADF resources to produce detailed designs for the livestock
infrastructures. Pursuant to Section 3.7 of the “PPF Operational Guidelines” adopted by the ADF
Board of Directors on 14/02/2000 (ADF/BD/WP/99/87/Rev.3), a provision of UA 300,000 has been
earmarked in the Project cost to repay the PPF amount.
2.4.3 Justification for Local Cost Financing: The ADF Loan will finance about 80.4% of the total
local costs (UA 7.01 million) and 100.0% of the total foreign costs (UA 4.99 million). The local
cost is 80.4% because the project is oriented towards development of rural infrastructures using
locally available materials.
Table 2.3
Summary of Project Cost by Components
Component Name
(ZMW '000)7 (UA million)
Foreign Local Total Foreign Local Total %
Foreign
1. Livestock Infrastructure
Development 31,028.2 34,040.2 65,068.4 3.82 4.19 8.01 48
2. Capacity Building 4,381.0 19,803.0 24,184.0 0.54 2.44 2.98 18
3. Project Management 700.0 6,144.0 6,844.0 0.08 0.76 0.84 10
Total Baseline Cost 36,109.2 59,987.2 96,096.4 4.44 7.39 11.83 38
Physical Contingencies 3,135.3 4,121.4 7,256.6 0.38 0.50 0.88 43
Price Contingencies 1,359.0 6,714.3 8,073.3 0.17 0.83 1.00 17
Total Project Cost 40,603.5 70,822.8 111,426.3 4.99 8.72 13.71 36
Table 2.4
Sources of Financing, Amount (UA million) and Percentage Contribution (%)
Source of Finance Amount (UA million) and Percentage Contribution (%)
Foreign % Local % Total %
ADF Loan 4.99 100 7.01 80.4 12.00 87.6
Government 0 0 1.69 19.4 1.69 12.3
Beneficiaries 0 0 0.02 0.2 0.02 0.1
Total 4.99 36.4 8.72 63.6 13.71 100.0
7 Exchange rates/currency equivalents are provided on page (i).
6
Table 2.5
Project Cost - Categories of Expenditure (Summary)
Category of Expenditure (UA million)
% Foreign Foreign Local Total
A. Works 3.34 3.64 6.98 48%
B. Goods
1. Vehicle 0.24 - 0.24 100%
2. Equipment 0.35 - 0.35 100%
B sub-total 0.59 - 0.59 100%
C. Services
1. Training - 0.76 0.76 0%
2. Contractual Services 0.44 - 0.44 100%
3. Audit 0.07 - 0.07 100%
C sub-total 0.51 0.76 1.27 40%
D. Operating Cost
1. Personnel - 0.75 0.75 0%
2. Daily Subsistence Allowance - 0.81 0.81 0%
3. General Operating Costs - 1.43 1.43 0%
D sub-total - 2.99 2.99 0%
Total Baseline Cost 4.44 7.39 11.83 38%
Physical Contingencies 0.38 0.50 0.88 43%
Price Contingencies 0.17 0.83 1.00 17%
Total Project Cost 4.99 8.72 13.71 36%
Table 2.6
ADF Loan - Categories of Expenditure (Summary)
Category of Expenditure ADF Loan Amount (UA million)
Foreign Cost Local Cost Total
A. Goods 0.64 - 0.64
B. Works 3.82 4.34 8.16
C. Services 0.53 0.30 0.83
D. Operating Costs - 2.37 2.37
Total Project Cost 4.99 7.01 12.00
Table 2.7
Expenditure Schedule by Component
Component Name Amount (UA million) including Contingencies
Percentage PY1 PY2 PY3 PY4 PY5 Total
1. Livestock Infrastructure
Development 0.51 5.74 2.66 0.21 0.19 9.31 67.9%
2. Capacity Building 0.98 0.84 0.61 0.50 0.49 3.42 25.0%
3. Project Management 0.26 0.18 0.19 0.17 0.18 0.98 7.1%
Total Project Cost 1.75 6.76 3.46 0.88 0.86 13.71 100.0%
7
2.5. Project Target Area and Population
The Project will be implemented in the Northern and Muchinga Provinces covering 9
Districts, as indicated in Appendix 4a and 4b. The human population within participating Districts
is 1,338,456 out of which 51% are women whilst the total number of households (HH) is 233,300
with 33,600 female headed HH. The Project will directly benefit 248 registered groups with a total
of 100,000 HH who have fully-paid-membership status (33,600 female headed HH). In addition,
90,000 livestock keeping HH, within participating Districts, will indirectly benefit from improved
livestock services. About 800,000 people, including 400,000 women, will indirectly benefit from
increase in supply of quality livestock products. The main anticipated Project related outcomes
include increase in incomes of small scale livestock farmers and empowerment of livestock farmer
groups/organisations to deliver services.
2.6. Participatory Process for Project Identification, Design and Implementation
Consultations with the main stakeholders were done during the identification, preparation
and appraisal phases. During each phase, the Mission held discussions with GoZ officials, potential
beneficiaries, DPs and the private sector, on the Project design including definition of key project
activities, implementation and sustainability arrangements. This participatory approach will be
enhanced during the implementation phase. The LISP will be implemented through the GoZ
existing structures and farmer organizations. Opportunities for cooperation and parallel financing
were discussed with IFAD although they were not conclusive.
2.7. Bank Group Experience and Lessons Reflected in Project Design
2.7.1. Lessons learnt from Bank’s past operations include (i) inadequate consultation with
stakeholders in selection of sites and types of infrastructures leading to non-utilisation or lack of
ownership, (ii) weak project M&E system resulting in poor assessment of implementation progress
and impacts, (iii) weak implementation capacity of Ministries, mainly in the area of procurement,
and (iv) lack of infrastructure drawings at project start-up leading to implementation delay.
2.7.2. The weaknesses highlighted were addressed and mainstreamed in LISP design as follows (i)
development of community infrastructures will be demand driven, (ii) through the use of Project
Preparation Facility, detailed designs/drawings and tender documents for livestock infrastructure will
be ready when LISP starts-off, (iii) LISP design has ensured that MAL implementation and M&E
capacities will be enhanced with the external recruitment of the Project Coordinator, Procurement
Specialist, Project Accountant and M&E Specialist.
2.8. Project Performance Indicators
The logical framework has identified a number of outcome indicators. They include increase
in livestock productivity in terms of carcass weight and milk production and reduction of
prevalence rate of the main livestock diseases (CBPP, FMD, ASF and NCD) in the Project area.
The rate of physical and financial implementation of planned activities, including infrastructures,
will measure the trend towards the achievement of Project’s objective. The impact indicator against
which the Project development objective will be measured is the percentage increase in the income
of the beneficiary livestock farmers. A baseline study has been included as part of the Project
Preparation Facility in order to fine-tune performance indicators. Quarterly and annual progress
reports, supervision missions and mid-term review reports, impact assessment survey report and
project completion report will record data on project progress and impacts. The Project’s M&E unit
will be responsible for data collection, analysis and dissemination.
8
III – PROJECT FEASIBILITY
3.1. Economic and Financial Performance
3.1.1 The Economic and Financial Analyses have been carried out on the assumption that, for any
business to flourish, it requires incentives and conducive environment which will be provided by
LISP. In this regard (i) facilities such dip tanks, spray races, crush pens for vaccination and other
veterinary services, feeding and watering infrastructure will enable farmers to raise healthy animals,
(ii) breeding centres will aid in the stocking programme resulting in increase in livestock numbers,
(iii) marketing structures, slaughter facilities, milk collection centres and connecting feeder roads
will give farmers incentive to keep livestock and feed them appropriately for high prices, while
accessibility will encourage private traders for both inputs and livestock products to operate in the
area, (iv) infrastructure facilities will also attract private operators such as health inspectors and
veterinary officers to invest in livestock development in the area, (v) the small-stock pass-on
scheme for women and youth will hasten livestock multiplication, (vi) capacity building will train
farmers to raise healthy fattened animals. The Project will, through infrastructure for disease
control, reduce livestock mortality resulting in higher livestock numbers. Improved animal growth
rate through better feeding practices and breed improvement for growth and milk production will
improve carcass weight and also milk yields. All these aspects will, in the final analysis increase
livestock production and productivity.
3.1.2 The project is also expected to generate a number of indirect economic benefits. They
include (i) enhanced food security with overall increase in the supply of good livestock products,
(ii) increased demands for livestock related services accruing to service providers, fostering the
development of animal related business and job, and (iii) empowerment of livestock farmer
organizations to provide adequate services to their members. The main assumptions underlying the
calculations of EIRR and FIRR are: (i) cattle, goat and chickens’ average annual population will
increase from 6.3% to 10%, 12% to 15%, and 15% to 22% respectively; (ii) livestock off-take will
increase from the current 12% to 16% for cattle and 31% to 38% for goat by year 6; (iii) average
weight will increase from the current 126 kg to 168 kg for cattle and from 25 kg to 33 kg for goats;
and (v) milk production from 1,500 to 2,500 litres per year (cow). The EIRR and FIRR
computations are provided in Appendix 5. Summary output is tabulated below:
FIRR, NPV (base case) 20%, NPV (12%): USD 4.02 million
EIRR (base case) 22%, NPV (12%): USD 4.38 million
NB: detailed calculations are available in Appendix 5 and also Technical Annex B.6
3.2. Environmental and Social impacts
3.2.1. Environment: The Project is classified as Environment Category 2 according to the Bank’s
Environmental and Social Assessment Procedures (ESAP) which was validated by the Quality
Assurance and Results Department (ORQR.3) on 8th
May 2012. The infrastructure investments
supported by the Project (LSC, livestock market centres, milk collection centres, slaughter houses
and rural feeder roads) will generate site-specific and short-term negative environmental impacts
which will mainly occur during the construction phase and will include: soil erosion particularly in
degraded lands, increased turbidity in water sources from soil run-off, limited reduced vegetation
cover due to cleared land to pave way for construction activities, increased localized noise and dust
due to earthmoving equipment and machinery. During the operational phase the likely impacts
would include solid waste and effluent from slaughter houses, milk collection centers, LSC and the
9
markets, bio-medical waste from veterinary activities and hazards to workers. MAL has prepared a
Strategic Environmental and Social Assessment (SESA) report describing measures to mitigate the
negative impacts which include re-vegetating cleared land, restoration of borrow-pits, appropriate
drainage systems to control erosion, installation of systems for solid waste and effluent
management and providing appropriate Personal Protective Equipment (PPE) to the workforce. The
SESA (which includes the Environmental and Social Management Plan - ESMP) was cleared for
disclosure, by ORQR.3, on 23rd
April 2013. The cost of environmental activities including
mitigation measures is UA 165,300 (from the ADF resources) in addition to amounts incorporated
in the civil works and to be reflected in contractors’ bidding documents (details are in Technical
Annex B.6). Environmental monitoring is one of the LISP activities.
3.2.2. Climate Change: The Project activities will promote climate change adaptation and foster
livelihoods diversification which will ultimately enhance the climate change adaptive capacity of
the pastoralists and the livestock production systems. The Project will support (i) sustainable
management of rangeland and pasture, and (ii) adoption of biogas digesters that will promote use of
livestock dung for generation of energy for lighting and cooking. In building capacity of the
livestock farmers and the livestock production systems, a complementary GEF project support
breeds that are resilient to climate change and develop models for community management of
endemic livestock and habitat (pasture and grazing management techniques), strengthen adaptive
capacity of communities through training and mounting of demonstration sites for feed
conservation during the dry seasons, restoration of degraded pasture and increased vegetation cover
with different drought tolerant plants.
3.2.3. Gender: Zambian women comprise 51% of the population. In the Project area, cattle are
predominantly owned by men whilst women own small livestock (goats, sheep and chickens). The
major constraints faced by women in the livestock sub-sector include livestock diseases, low
productivity and slow growth rates, poor access to livestock services and credit. The Project will
address many of the challenges through interventions targeted at women including access to
livestock services, information and training in modern livestock management. Immediate benefits
to women will be increased livestock production and improved productivity which will lead to
increased household incomes. Review of the on-going and closed projects implemented by MAL
with regard to gender impact have lessons including (i) a detailed engendered log frame with a
robust set of gender sensitive indicators is critical for monitoring gender impact (ii) the need to
promote gender friendly technologies in particular labour saving technologies; (iii) empowerment
programmes directed at women and youth to access resources to improve their economic status.
The lessons have been incorporated into the LISP design by (i) reviewing and updating the LISP
log frame indicators to accommodate gender issues; (ii) promoting labour saving technologies like
biogas digesters and also draught power which have the benefit of reducing workload for women;
(iii) incorporating a youth and women empowerment schemes.
3.2.4. The Project will support a youth and women empowerment programme aimed at training
them in value addition skills (such as skins/hides processing) and skills training to run Income
Generating Activities (IGAs). This will have significant potential in reducing poverty among
women and youth by increasing their access to new employment opportunities and developing
women as contributors to economic growth. Women will comprise at least 50% of the beneficiaries
of the LISP. Women and youth participation to livestock development will also be enhanced
through pilot small stock pass-on scheme. The Project will establish a gender monitoring, results
and impact tracking system. The gender audit will be part of the beneficiary impact assessment
which will be carried out in PY5 to access the progress made in achieving gender equity.
10
3.2.5. Social: The social impact of the LISP is expected to be positive since it will provide income
and better livelihoods to participating communities. The Project will help participating communities
to diversify agricultural output. Other positive effects will include an improvement in nutritional
and food safety status of the population through consumption of wholesome meat and milk products
rich in proteins and also supply of draught power for crop production. Livestock dung will enhance
crop yields and also used to generate energy (para 3.2.2). Rehabilitation of feeder roads will
facilitate sale of livestock and related agro-products which will generally improve trade. The
increased economic activities will significantly boost local development. Value addition training
will improve skills and provide employment to women and youth. The anticipated economic well-
being resulting from higher family incomes will generate positive multiplier effects on social
stability which will help curb rural exodus by retaining local population especially youth within the
participating Districts. The Project will mitigate the risk posed by HIV/AIDS, malaria and
malnutrition through awareness campaigns.
3.2.6. Involuntary Resettlement: There will be no involuntary resettlement. The community
infrastructures will be developed on demand driven basis, consequently they will be located in areas
which have already been identified by the local communities requiring no resettlement. Most of the
public infrastructures will be rehabilitated and where new ones will be constructed they will be on
public land requiring no resettlement. The feeder roads earmarked for rehabilitation will follow the
existing alignment requiring minor adjustment within the road reserve.
3.2.7. Value Addition and Entrepreneurship: During appraisal, it was noted that very little is done
in terms of value addition. Livestock products are mostly consumed fresh and milk is consumed
raw due to (i) inadequate investments in processing equipment, (ii) inaccessible milk collection
networks, and (iii) the culture of consuming raw milk prevails. This leads to considerable loss due
to spoilage and disincentive to production. The proposed livestock infrastructures and the capacity
building will enhance value addition and improve produce-shelf-life. The Project will facilitate
beneficiaries’ study tours to existing dairy cooperatives within Zambia, especially where the dairy
industry is more developed. Livestock and agro-industry skill development, as envisioned under the
Project, will promote self-employment and service provision at community level. IFAD has
expressed interest in supporting small scale enterprises in processing and value addition, in their
next fiscal year, through training and credit provision which are good ingredients for small and
medium enterprises creation. The Project area has low commercial livestock population and milk
production. Consequently, the activities will concentrate on value added processing of available
livestock products and entrepreneurship development through investment in milk collection centres
and slaughter houses. The pilot livestock stocking will improve the livestock population which will
generate employment to the participating farmers. Currently, rearing of cattle provides incomes for
cattle-owning households and also for people herding cattle, transporting livestock and livestock
products within the value chain although much of this employment is informal and limited.
Through pilot livestock stocking and also IGAs for rural women and youth, the Project will increase
the number of informal jobs by raising the number of households that keep livestock.
11
IV – IMPLEMENTATION
4.1. Implementation Arrangements
4.1.1. Executing and Implementing Agencies: Based on past experiences, the Project will be
implemented under the Project Coordination Team (PCT) using the existing MAL structures. The
PCT will be established for day to day management of LISP, comprising a Project Coordinator
(PC), a Procurement Specialist, an M&E Specialist, a Project Accountant, a Civil Engineer, 2 Focal
Points (1 from Northern Province and 1 from Muchinga Province), 2 Gender Specialists (1 from
Northern Province and 1 from Muchinga Province), and 2 Accountants (1 from Northern Province
and 1 from Muchinga Province). The PC, Procurement Specialist, Project Accountant and M&E
Specialist will be national experts recruited competitively and will be based in Kasama District
(provincial headquarters of the Northern Province, except for the Project Accountant who will be
based in Lusaka - MAL Hq) . The GoZ will appoint, within the existing structures, the rest of the
PCT members who will be attached to the Project. The assigned Civil Engineer from Ministry of
Works (MoW) will supervise the construction of livestock infrastructures. The Provincial Focal
Points will submit progress reports to the PC. The PCT will be under the MAL’s Director of
Livestock Development (DLD). The MAL Chief Accountant and Procurement Officer will also
facilitate the LISP implementation. A Project Steering Committee (PSC) will be set-up by GoZ
with a maximum of ten members who will have oversight responsibility and oversee project
compliance with sub-sector National Policies and Strategies. The PSC will consist of (1) Secretary
to Treasury (Ministry of Finance) - Chairperson, (2) Permanent Secretary (PS) - MAL, (3) PS -
Northern Province, (4) PS - Muchinga Province, (5) PS - Ministry of Works, (6) representative
from Zambia Environment Management Authority, (7) 2 livestock farmers’ representatives from
Muchinga and Northern Provinces, and (8) 2 representatives from the private sector (beef and dairy
industries). The PC shall be the Secretary of PSC. At the Provincial level, the responsibility for
delivery rests with the existing institutional structures of MAL under coordination of the PACO.
ZMFO will support LISP through regular supervision missions, informal meetings, and processing
of all fiduciary documents.
4.1.2. Procurement Arrangements: The Bank’s assessment of the country’s National Procurement
Procedures (NPP), dated June 2011, identified areas of weaknesses which are yet to be fully
addressed by GoZ within the overall country dialogue with DPs. Therefore, the NPP cannot be used
and all procurement of goods, works and acquisition of consulting services to be financed by the
Bank will be in accordance with the Bank’s Rules and Procedures for Procurement of Goods and
Works”, dated May 2008, revised July 2012; and “Rules and Procedures for the Use of
Consultants”, dated May 2008, revised July 2012 and as amended from time to time, using the
relevant Bank Standard Bidding Documents, and the provisions to be stipulated in the Loan
Agreement. The Bank assessment of MAL’s procurement capacity was found to be adequate and
the necessary agreed measures to mitigate against the identified weaknesses are indicated in Annex
B.5 (Technical Annexes8). The MAL will be responsible for procurement activities under the
Project. A procurement plan is indicated in Annex B.5 of the Technical Annexes. The procurement
arrangements under LISP are summarised in Table 4.1.
8 Technical Annexes = Project Appraisal Report Volume II of II.
12
Table 4.1
Procurement Arrangements (UA million9)
Item Description NCB Short List10
Other11
N.B.F. Total
A. GOODS
Vehicles - - 0.26 (0.26) - 0.26 (0.26)
Equipment - - 0.38 (0.38) - 0.38 (0.38)
B. WORKS 7.99 (7.99) - 0.17 (0.17) - 8.16 (8.16)
C. SERVICES
Training - - 0.08 (0.08) - 0.08 (0.08)
Contractual Services - - 0.38 (0.38) - 0.38 (0.38)
Project Preparation Facility (PPF) - 0.30 (0.30) - - 0.30 (0.30)
Audit - - 0.07 (0.07) - 0.07 (0.07)
D. PERSONNEL - - 0.57 (0.57) 0.31 0.88 (0.57)
E. OPERATING COSTS - - 1.80 (1.80) 1.40 3.20 (1.80)
Total 7.99 (7.99) 0.30 (0.30) 3.71 (3.71) 1.71 13.71 (12.00)
4.1.3. Civil Works: Contracts of works valued at less UA 3 million will be carried out under
National Competitive Bidding (NCB) procedures, and using the Bank Standard Bidding
Documents. Works procured under this method, estimated in aggregate at UA 8.10 million would
include all livestock infrastructures. Goods: Contracts for goods valued below UA 300,000 will
procured under shopping procedures. Goods procured under this method, would include: vehicles
(UA 0.23 million) and equipment (UA 0.39 million). Consulting Services: Procurement of
consulting services valued at UA 0.57 million covering consulting firms and individual consultants
will be under shortlisting using Selection Based and Consultants Qualifications (CQS) and Least
Cost Selection (LCS). Training amounting to UA 0.13 million will be carried out on the basis of
approved annual training programmes and work plan that will specify the training needs and nature
of activities which will be prior reviewed and approved by the Bank.
4.1.4. Operation Costs: amounting to UA 4.35 million will be undertaken using existing GoZ
operational systems to cover office space, staff salaries, staff allowances, operation and
maintenance of office blocks, equipment and vehicles.
4.1.5. Prior Review: the following documents will be subject to prior review and approval by the
Bank before promulgation (except for those indicated under Post Review, below): (i) general
procurement notices; (ii) specific procurement notices; (iii) prequalification invitation documents;
(iv) tender documents and requests for proposals from consultants including shortlist; (v) tender
evaluation reports or reports on evaluation of consultant proposals, including recommendations for
contract awards; (vi) draft contracts, if these have been amended and differ from the drafts included
in the tender documents; and (vii) modification of signed contracts. Post Review: Post procurement
review procedures will be applied for individual contracts of value less than the following
thresholds (i) Civil Works: UA 100,000, (ii) Goods: UA 50,000, and (iii) Services: UA 20,000.
4.1.6. Financial Management: The Bank carried out a financial management assessment of MAL
as the executing agency, in accordance with the Bank’s Guidelines for Financial Management and
Financial Analysis of Projects (2007) and ORPF FMS Tool Kit (Provisional, June 2010) to
9 Figures in parenthesis are the respective amounts financed by the ADF Loan. 10 Shortlist procedures in compliance with para 2.6 of the Bank rules. CQS = QBS applies to both Firms and Individual Consultants. 11 Other may be Shopping, identification of national/regional training institutions, recruitment of individual consultant and use of
approved Government procedures (Detailed methods for “other” are provided in the Annex B.5, Volume II of II).
13
determine whether MAL has acceptable financial management arrangements in place to ensure
judicious use of Project resources for the intended purpose. The overall residual risk for the Project
was assessed as moderate. The assessment therefore concluded that MAL’s financial management
capacity satisfy the Bank’s minimum requirements. The Bank will therefore use the existing
country financial management systems for managing LISP with appropriate mitigation measures.
4.1.7. Financial Reporting and External Audit: The overall responsibility for financial reporting
rests with the MAL Chief Accountant, as the head of the Finance Department. The Project
Accountant will work hand in hand with the Chief Accountant. Provincial and District Accountants
will provide the necessary backstopping at the local levels. In accordance with the Bank’s financial
reporting and audit requirements, the Project will be required to prepare and submit to the Bank
Interim Quarterly Progress Report (IQPR) not later than 30 days after the end of each calendar
quarter. Annual financial statement prepared and audited by the Office of the Auditor General
(OAG), including the auditor’s opinion and management letter will be submitted to the Bank not
later than six (6) months after the end of each fiscal year. The audit of the Project can be
subcontracted as necessary to a private audit firm to be procured through short-lists (with the
involvement of OAG) using the Bank rules and procedures. The cost of audit will be financed from
the loan if carried out by a private firm. Detailed financial management, disbursement and auditing
arrangements are included in Annex B.4 of Technical Annexes.
4.1.8. Disbursement Arrangement: The Project will use the Bank’s disbursement methods
including (i) Direct Payment, (ii) Special Account (SA) and (iii) Reimbursement methods in
accordance with rules and procedures as stipulated in the Disbursement handbook. A foreign
currency denominated Special Account in the Bank of Zambia (BoZ) and a local currency account
(ZMW) in the BoZ will be opened to be operated by MAL and used for financing eligible operating
and other recurring costs under the Project. To facilitate payment of eligible operating costs in
Lusaka as well as the PCT to be based in the Northern Province, two sub-accounts to be managed
by MAL as per the existing financial rules and regulations would be opened at two local
commercial banks (1 in Lusaka and 1 in Kasama) acceptable to the Bank.. Preparation of
withdrawal applications for funds into the SA, and documentation for all direct payments would be
under the overall responsibility of the MAL Chief Accountant. The Bank will issue a Disbursement
Letter of which the content will be discussed and agreed during negotiations.
4.2. Monitoring
Monitoring and Evaluation (M&E) will enable the PCT, MAL and key stakeholders to track
project implementation using indicators and targets as presented in the Result Based Logical
Framework (RBLF) at community (beneficiary), District, Provincial, PCT and MAL levels. The
M&E specialist will be responsible for the establishment of an M&E system using a participatory
approach in data collection, analysis and dissemination that will provide intermittent
methodological backstopping at the design, implementation and completion phases. The M&E
system will monitor physical and financial implementation progress while providing insights on
Project impact on beneficiaries. The GoZ has set up, within the NALEIC, the LIMS in animal
health, animal production, livestock and livestock products marketing and trade. LIMS aims at
serving as an effective tool for monitoring progress towards the livestock policy objectives. The
M&E system will be linked to LIMS. The Project will provide financial resources to facilitate the
required training, proper data gathering and processing. The generated LIMS reports will be
annexed to the LISP annual reports. The Project will provide funds for mid-term review, project
completion report and annual external audits, as indicated in the table below. The PCT will submit
to the Bank quarterly progress reports and annual work plans and budgets using Bank’s format. The
14
Bank will supervise the implementation of the Project through regular supervision missions which
will track implementation progress using key indicators including gender specific ones.
Time-Frame Milestones Monitoring Process (Feedback Loop)
Year 1 Baseline Survey/PPF – (Separate Activity) MAL, Provinces, Districts, NALEIC and
Consulting Firm (short-term consultancy).
Years 1 to 5 Project Implementation Communities, Districts, Provinces, PCT and MAL.
Years 1 to 5 Quarterly Progress and Annual Financial
Audit Reports PCT and External Audit Firm (Annually).
Year 3 Mid-Term Review Communities, Districts, Provinces, PCT, NALEIC
and Consultant.
Year 5 Beneficiary Impact Assessment Beneficiaries, PCT, NALEIC and Consultant.
Year 5 Project Completion Review Communities, Districts, Provinces, PCT and
Consultant.
4.3. Governance
Zambia has made significant progress in the area of accountability and transparency and has
relatively improved on key indicators of governance including control of corruption, rule of law,
regulatory quality and Government effectiveness. However, weaknesses remain in ensuring budget
credibility, non-fully compliance with internal control regulations, timely follow-up and
implementation of both internal and external audit recommendations. Mitigation measures to
address these issues include: (i) production of tailor-made financial management procedures manual
that will provide guidance to staff; (ii) using MAL Internal Audit to undertake pre-audit of Project
transactions; and (iii) procurement of off-the-shelf accounting software to record and process
transactions and interface it with IFMIS to facilitate timely project financial reporting given the
operational challenges with IFMIS, and (iv) enforcing a system of submitting interim quarterly
progress report (IQPR) not later than 30 days after end of each quarter.
4.4. Sustainability
LISP falls within the framework of the Government nationwide programme to enhance the
diversification of its economy through among others, development of livestock sub-sector. The
participatory approach adopted by the Bank in the design and the implementation of LISP is an
important step towards ensuring the relevance of the investments made and laying of an
institutional capacity at community level for sustainability of planned activities. To address critical
issue of poor maintenance services, the beneficiaries will be mobilised, organised into viable self-
reliant groups, trained and empowered to fully operate and maintain community infrastructure
developed by the Project. Community infrastructures will be wholly operated and maintained by the
beneficiaries through either registered cooperatives or leased out to the private sector after extensive
training, as per Government’s policy to ensure sustainability. The beneficiaries will be sensitized to
assume ownership of the community infrastructure. Public infrastructures will be managed by
District Councils or where appropriate by the Government Department which will include them in
the annual budget. Mechanisms will be put in place to collect fees from the use of infrastructures in
order to generate revenue for use during operation and maintenance.
15
4.5 Risk Management
4.5.1. Incompetent contractors: LISP will (i) pre-qualify contractors based on past performance,
(ii) use stringent evaluation methods and, apart from the technical details which the contractors and
suppliers will submit, before signing the contract, the contractors will be scrutinised through
contacting the previous employers and physical verifications, (iii) determine how many on-going
contracts the bidding contractors have, (iv) strictly follow-up contract execution, and (v) provide
contract management training to staff to ensure adequate capacity to execute signed contracts.
4.5.2. Low livestock population will result in underutilisation of the infrastructures: MAL/GoZ
has commenced the stocking programme to assist beneficiaries to increase livestock numbers and
performance with participating Provinces. LISP will enhance this programme through (i) building
capacity of livestock breeding centres, in LSC tier 3, to scale-up livestock production (ii) strategic
siting, design and prioritisation of proposed infrastructures to ensure their relevance and optimal
use by beneficiaries, (iii) building capacity of livestock owners in improved animal husbandry
practices, and (iv) the small-stock pass-on scheme and the pilot livestock stocking programme.
4.5.3. PCT base in Lusaka as opposed to the Project area: Lusaka is about 800 km from the
Project area, consequently PCT (core team) will be based in Kasama District (headquarters of
Northern Province) for proper monitoring of planned activities, on daily basis.
4.6 Knowledge Building
4.6.1. The Project is expected to generate considerable knowledge which will add value to the
overall design and management of similar future interventions. Lessons and experiences will be
shared within the Bank and other institutions interested in implementing projects. The Project will
promote the community participation and management of the livestock infrastructures. For
sustainability, the rural community infrastructures will be constructed or rehabilitated by the
community, either using their own workforce (cooperatives) or recruiting an artisan, with full
support from the Project. The Project will demonstrate that the livestock infrastructures can be ably
managed by the community if given the necessary support including start-up capital for the
livestock pass-on scheme which will revolve with time. The process of community engagement and
participation will be a learning pilot intervention point for the success and sustainability of LISP
and also useful database for other potential development projects being planned by GoZ. The
Project will work closely with gender related organisations (NGOs) and key stakeholders for
purposes of sharing information and learning materials on gender and women empowerment in
relation to livestock development.
4.6.2. LISP will also focus on capacity building for key staff and farmers (beneficiaries) who will
be fully involved in the planned activities based on the training needs assessment. Such activities
will be conducted throughout the Project period and is aimed at enhancing the knowledge transfer.
At LSC tier 3, the Project will construct a training centre mainly for smallholder farmer-courses.
The Project will also mount demonstrations on the use of biogas digesters, pasture development and
rangeland management. LISP has made adequate provision for periodic meetings of technical staff
and other livestock stakeholders to jointly review progress of implementation. This will provide a
good learning opportunity to the implementing communities. Scheduled PSC annual meetings and
also the quarterly meetings between PCT and Provincial/District staff will be conducted. DPs and
NGOs that plan to establish similar livestock infrastructures will benefit from the quarterly and
annual progress reports which will be produced and distributed by the PCT as these will form part
of the knowledge transfer and dissemination tools.
16
V – LEGAL INSTRUMENTS AND AUTHORITY
5.1. Legal Instruments
5.1.1 ADF Loan to the Republic of Zambia
5.2. Conditions Associated with Bank’s Intervention
5.2.1 Conditions Precedent to Entry into Force: The entry into force of the Loan Agreement shall
be subject to the fulfilment by the Borrower of the provisions of Section 12.01 of the General
Conditions of the Fund.
5.2.2 Conditions Precedent to First Disbursement: The obligation of the Fund to make the first
disbursement of the Loan shall be conditional upon entry into force of the Loan Agreement and the
following conditions, namely, the Borrower/Recipient shall have provided evidence in form and
substance acceptable to the Bank:
a. of having opened one (1) foreign currency Special Account and one (1) local currency account
at the Central Bank of Zambia for the deposit of the proceeds of the Loan, and two (2) sub-
accounts to be managed by MAL in accordance with the Fund’s financial rules and
regulations at two (2) local commercial banks that are acceptable to the Fund in Lusaka and
in Kasama (para 4.1.11).
5.2.3 Other Conditions: The Borrower shall have:
a. provided evidence of recruitment of the local experts in form of Project Coordinator,
Procurement Specialist, M&E Specialist (to be based in Kasama District) and Project
Accountant (to be based in Lusaka, MAL Hq) with skills and qualifications acceptable to
the Bank (para 4.1.1), within six months upon signature of the loan agreement; and
b. provided evidence for the establishment of the Project Steering Committee (para 4.1.1),
within six months upon signature of the loan agreement.
5.3. Compliance with Bank Policies
This Project complies with all applicable Bank policies.
Non-standard conditions (if applicable): N/A
VI – RECOMMENDATION
Management recommends that the Board of Directors approve the proposed ADF Loan not
exceeding an amount of UA 12.00 million to the Government of Zambia to finance the Livestock
Infrastructure Support Project (LISP), subject to the conditions stipulated in this report.
I
Zambia - Comparative Socio-economic Indicators (June 2012) Appendix 1
II
ADB’s Active Portfolio in Zambia (January 2013) Appendix 2
No Sector Long name Finance
Source
Loan Number Approval
Date
Signature
Date
Effective
Date
Closing
Date
Approved
Amt. (UA)
Disbursed
Amt. (UA)
Disb.
Ratio
IP DO PFI STATUS Age (Yrs)
National Operations (Public)
1 Agriculture COMMUNITY WATER
MANAGEMENT IMPROVEMENT
AWTF 5600155001751 12-Nov-09 23-Apr-10 23-Apr-10 31-Dec-13 659,218 527,769.66 80.1% 2.33 3.00 NON PP / NON
PPP 3.05
2 Agriculture FINISH SUPPORTED SMALL
SCALE IRRIGATION
Trust
Fund
2100150001106 28-Dec-09 30-Oct-10 30-Oct-10 5/30/2014 8,137,881 3,857,355.7
9
47.4% 2.29 2.75 NON PP / NON
PPP 2.93
Sub-Total (Agriculture) 8,797,099 4,385,125 49.8%
3 Water &
Sanitation
NKANA WATER SUPPLY
AND SANITATION PROJ.
ADF 2100150018345 27-Nov-08 22-Dec-08 12-Jun-09 31-Dec-13 35,000,000 11,130,000.
00
31.8% 2.57 2.67 NON PP / NON
PPP 4.01
4 Water &
Sanitation
RURAL WATER SUPPLY &
SANITATION PROGRAM
ADF 2100150013198 31-Oct-06 17-May-07 15-Nov-07 30-Jun-13 15,000,000 4,543,500.0
0
30.3% 2.50 3.00 NON PP / NON
PPP 6.09
Sub-Total (Water & Sanitation) 50,000,000 15,673,500 31.3%
5 Power ITEZHI-TEZHI POWER
TRANSMISSION PROJECT
ADF 2100150027396 13-Jun-12 TBD TBD 31-Dec-18 30,000,000 0.00 0.0% 0.00 0.00 NO
SUPERVISION 0.47
NTF 2200160000989 13-Jun-12 TBD TBD 31-Dec-18 6,400,000 0.00 0.0% 0.00 0.00 NO SUPERVISION
0.47
Sub-Total (Power/Energy) 36,400,000 - 0.0%
Multi-National Operations
6 Multinational PROG. D'AMENAG. LAC
TANGANYIKA(ZAMBIA)
ADF 2100150009044 17-Nov-04 18-May-05 29-Sep-09 30-Sep-13 3,260,000 1,070,258.0
0
32.8% 1.50 1.75 NON PP / NON
PPP 8.04
7 Multinational BOTSWANA/ZAMBIA-
KAZUNGULA BRIDGE PROJECT
ADF 2100150025694 7-Dec-11 10-Feb-12 3-Sep-12 31-Dec-18 51,000,000 0.00 0.0% 2.50 2.33 NON PP / NON
PPP 0.99
8 Multinational NACALA CORRIDOR
PROJECT PHASE
II(ZAMBIA)
ADF 2100150022945 27-Sep-10 20-Jan-11 10-Jun-11 31-Mar-15 69,369,000 194,233.20 0.3% 2.31 3.00 NON PP / NON
PPP 2.18
Sub-Total (Transport) 123,629,000 1,264,491 1.0%
Private Sector Operations
9 Power ITEZHI-TEZHI POWER PROJECT
ADB 2000130008981 13-Jun-12 TBD TBD 31-Dec-18 23,174,818 0.00 0.0% 0.00 0.00 NO SUPERVISION
0.47
10 Power ITEZHI-TEZHI POWER
STAND BY PROJECT
ADB 2000130009331 13-Jun-12 TBD TBD 31-Dec-18 1,986,413 0.00 0.0% 0.00 0.00 NO
SUPERVISION 0.47
11 Finance PFSL- FAPA TA - ZAMBIA FAPA 5700155000601 13-Jul-09 13-Jul-09 4-Sep-09 31-Dec-14 935,000 805,035.00 86.1% 0.00 0.00 NA 3.39
Sub-Total (Finance/Private Sector) 26,096,231 805,035 3.1%
Portfolio Summary 244,922,330 22,128,152 9.0% 2.42 2.86 2.71
III
Projects Financed by the Bank and Other Development Partners Appendix 3
Donor
Agency Program Title Project Coverage
Total Budget
(USD)
Implementation
Organisation
Project
Status
AfDB
Lake Tanganyika Regional
Development Programme
(PRODAP)
Mpulungu, Kaputa 5,004,100
Ministry of Lands,
Environment and natural
Resources
On-going
Community Water
Management Improvement
Project for traditional Farmers
Mkushi, Kapiri
Mposhi, Masaiti
and Chingola
942,140 Development Aid from
People to people (DAPP) On-going
Finland Small-scale Irrigation Project
(SIP)
Chongwe,
Mazabuka,
Sinazongwe
12,600,000 Ministry of Agriculture
and Livestock On-going
Norway
Conservation Agricultural
Program Phase II AEZ 1&2 28,000,000
Conservation Farming
Unit (CFU) On-going
Expanded Food Security Pack AEZ 2 2,571,429
Min of Community
Development. Mother and
Child Health
On-going
Community Markets for
Conservation - COMACO Eastern Province 8,600,000
Wildlife Conservation
Society/COMACO On-going
European
Union
Agricultural Sector
Performance Enhancement
Programme
Nationwide 11,659,000 Ministry of Agriculture
and Livestock On-going
FAO
Integrated Land Use
Assessment II Nationwide 3,953,096
Ministry of Land, Natural
Resources &
Environmental Protection
Forestry Department
On-going
UN-REDD Programme –
Zambia Quick Start Initiative Nationwide 2,180,000
Ministry of Land, Natural
Resources &
Environmental Protection
Forestry Department
On-going
IFAD
Smallholder Livestock
Investment Project (SLIP)
North-Western,
Western, Southern,
Eastern and
Northern
14,990,000 Ministry of Agriculture
and Livestock On-going
Smallholder Agribusiness
Promotion Programme (SAPP) 20-30 districts 24,500,000
Ministry of Agriculture
and Livestock On-going
Smallholder Productivity
Promotion Programme (S3P)
(co-financed by Finland)
Luapula and
Northern Provinces 39,900,000
Ministry of Agriculture
and Livestock On-going
JICA
Rural Extension Service
Capacity Advancement Project
(RESCAP)
Northern, Western
and Lusaka
provinces
9,000,000 Ministry of Agriculture
and Livestock On-going
Rural and Agriculture
Development Advisor Nationwide 1,300,000
Ministry of Agriculture
and Livestock On-going
Food Crop Diversification
Support Project Focusing on
Rice (FoDiS-R)
Muchinga, N/P&
WP and follow up
in EP, SP, WP &
Lusaka P
3,100,000 Ministry of Agriculture
and Livestock On-going
Technical Cooperation Project
for Community based
Smallholder Irrigation (T-
COBSI)
Main Luapula,
Northern and
Muchinga,
Copperbelt and
North Western
Provinces
5,800,000 Ministry of Agriculture
and Livestock On-going
USAID
Production, Finance &
Technology (PROFIT +) Eastern Province 24,000,000 ACDI/VOCA On-going
Food Security Research Project
(FSRP), Phase III Nationwide 12,499,501
Michigan State University
(MSU), Indaba
Agricultural Policy
Research Institute
(IAPRI)
On-going
IV
Donor
Agency Program Title Project Coverage
Total Budget
(USD)
Implementation
Organisation
Project
Status
Expanding Impact in USAID
Supported Value Chains Eastern Province 1,998,519
Action for Enterprise
(AFE) On-going
Horticulture Global
Development Alliance
Eastern Province
and Peri-urban
Lusaka
4,800,000
ASNAPP, Freshmark,
Freshpikt, Stellenbosch
University and CETZAM
On-going
Zambia Agriculture Research
and Development Project Eastern province 18,000,000
CGIAR: IITA, CIMMYT,
ICRISAT, CIP, CIAT,
World Fish Center,
Harvest Plus,
On-going
Better Life Alliance Global
Development Alliance (GDA) Eastern Province 6,626,605
COMACO; General Mills
and Cargill. On-going
World
Bank
Agriculture Development
Support Program National 37,200,000 MAL On-going
Irrigation development and
Support project 3 Sites 115,000,000 MAL On-going
Livestock Development and
Animal health project Selected provinces 50,000,000 MAL On-going
WFP
Home grown school feeding
programme
Western, Southern,
North-Western,
Northern, Luapula,
Muchinga, Central
And Eastern
Provinces
34,672,210 MoE, MAL On-going
Milk for schools Nationwide 629,412 MAL On-going
Disaster Risk Management Nationwide 780,000 DMMU, FAO On-going
Food Security for vulnerable
groups Nationwide 15,480,006 UNHCR, On-going
DfID
Support to Musika - Making
Agricultural Markets Work for
Zambia
Nationwide 7,144,000 Musika on-going
Access to Finance (includes
rural finance) Nationwide 21,432,000 Bank of Zambia and FIs on-going
V
Map of the Project Area Appendix 4a
Muchinga
Northern
LISP Provinces
VI
Project Provinces and Districts12
with Tentative List of Livestock Infrastructures Appendix 4b
No
Pro
vin
ce
District
Rural Community Infrastructures (Qty = Number) Public Infrastructures (Number, unless stated)
1 2 3 4 5 6 7 8 9 10 11 12 13
LSC13
Tier 1
LSC
Tier 1+
LSC
Tier 2 Mil
k
Co
llec
tio
n
Cen
tres
Liv
esto
ck
Ma
rket
Cen
tres
Liv
esto
ck
Sla
ug
hte
r
Fa
cili
ties
Fee
der
Ro
ad
s
(km
)
Reg
ion
al
Vet
erin
ary
La
bo
rato
ries
Dis
tric
t
Vet
erin
ary
La
bo
rato
ries
Qu
ara
nti
ne
Sta
tio
ns
Liv
esto
ck
Ser
vic
e
Cen
tre T
ier
3
Vet
erin
ary
Ch
eck
Po
ints
Vet
erin
ary
Ch
eck
Po
ints
(Bo
om
Ga
te)
1
Mu
chin
ga
1. Mafinga 18 1 1 0 0 1 5 1 0 0 0 0 114
2. Isoka 9 1 0 0 0 0 5 0 0 0 0 0 0
3. Mpika 12 3 1 1 0 1 10 0 1 0 0 115
0
4. Nakonde 21 2 1 0 1 1 5 0 1 1 0 0 116
5. Chinsali 15 2 1 0 0 1 15 0 1 0 1 0 0
Sub-total 75 9 4 1 1 4 40 1 3 1 1 1 2
2
No
rth
ern
1. Mbala 24 3 1 1 1 1 10 0 1 1 0 117
0
2. Kasama 18 1 0 1 0 1 10 118
119
0 0 0 0
3. Mungwi 18 2 0 0 0 1 5 0 1 0 0 0 0
4. Mporokoso 21 1 0 0 0 1 15 0 1 0 1 0 1
Sub-total 81 7 1 2 1 4 40 1 4 1 1 1 1
Project Total 156 16 5 3 2 8 80 2 7 2 2 2 3
12 The Districts were selected on the basis of livestock population, potential growth trends, despite the current low population, animal movements/routes to and from Tanzania and Malawi and also high marketing potential in the
border Districts leading to demand for livestock infrastructures for disease control. 13 LSC = Livestock Service Centre. 14 Check point located at Katanga on the Chama-Muyombe road. 15 Mpika check point will be located at Kanona (existing ZAWA Check Point) in Chitambo District (Central Province), junction Great North Road and Mpepetwe Road. 16 Check point located at Nteko at Chozi Turn Off on the Mbala-Nakonde road. 17 The Mbala check point will be located along Mbala – Kasama Highway. 18 The Government (2013) has made provision for construction of Regional Laboratory in Kasama District. LISP will provide additional equipment only, if need be. 19 Misamfu Livestock Feeds Mini-Laboratory and Equipment (Kasama District).
VII
Basic Definition of Livestock Infrastructures Appendix 4c
Rural Community Infrastructure
Construction of 156 livestock service centres Tier 1, each with basic structures including
crush pen, holding pen, water trough, feeding trough, water supply (borehole & overhead tank)
and improved pit latrines.
Construction of 16 livestock service centres Tier 1+, each with basic structures as for Tier 1
plus either a dip tank or spray race.
Construction of 5 livestock service centres Tier 2, each with structures as for Tier 1+, in
addition loading and off-loading bays, resting-shelter, 2 low cost staff houses, office/store
room, office-equipment, Artificial Insemination (AI) mini-kit, and electricity (national grid,
solar or wind-power).
Construction of 3 milk collection centres with reception hall, office/store room and
appropriate equipment (like cooler tank, lactoscan), water supply (borehole & overhead tank),
electricity, waste management area and improved pit latrines.
Upgrading of 2 livestock market centre in Nakonde and Mbala Districts through provision of
modern facilities including off-loading and loading bays, holding pens, cages/shelves, ablution
(waste room/garbage yard), office block, store room, drainage system, borehole & overhead
tank, pit latrines, gravel-access road, security fence and parking area.
Construction of 8 slaughter facilities/houses each with office block/store room, external
drainage system, waste management area, separate hygienic slaughter facilities (for cattle and
small-stock) with amenities, hides and skins treatment and storage sheds, water supply
(borehole & overhead tank), electricity (national grid, solar or wind-power), improved pit
latrines, gravel-access road, security fence, parking area, sewage reticulation and septic tank.
Public Infrastructures
Rehabilitation of 80 km (total length) of existing rural feeder roads with proper drainage
system and crossing points like culverts.
Construction/rehabilitation of 3 livestock service centres (Tier 3), each with structures
including crush pen, holding pen, water trough, feeding trough, dip tank, weighing scale,
loading and off-loading bays, marketing unit, 1 high, 2 medium, and 7 low-cost camp/staff
houses, office & store room, appropriate equipment, training centre/dormitories, biogas
digester (for demonstration), demonstration structures (goat housing, pig pens and poultry
pens/housing), borehole & overhead tank, improved pit latrines, proper landscaping, external
drainage system and waste management area. Tier 3 facilities shall be constructed in Mbesuma
and Kalungwishi Livestock Ranches.
Upgrading of 2 Regional and 7 District Veterinary Laboratories involving renovation of
buildings and improvement of external works, water reticulation system or borehole &
overhead tank, provision of essential laboratory furniture and equipment.
Establishment of 2 Quarantine Stations with holding area, office block, 3low cost staff
houses, and borehole & overhead tank and power source.
Construction of 3 veterinary boom gate check points each with 1 boom gate, a guard house,
1 low cost staff house, borehole & overhead tank, electricity (national grid, solar or wind-
power) and improved pit latrines.
Construction of 2 Veterinary Check Points each with loading/offloading bays, holding pen,
mini-quarantine station, crush pen, 1 office block including store room, 2 medium and 3 low
staff houses and a block of 3 self-contained rooms, borehole & overhead tank, electricity,
provision of essential equipment and communication facilities.
VIII
Calculation of Economic and Financial Internal Rates of Return Appendix 5
2013 1 2 3 4 5 6 7 to 20
Inventory growth rate without project 1,063 1,063 1,063 1,063 1,063 1,063 1,063 1,063
Inventory without project 68801,2 73 136 77 743 82 641 87 847 93 382 99 265 105 519
Offtake without project 0,12 8 776 9 329 9 917 10 542 11 206 11 912 12 662
Inventory growth rate withproject 0,1 1,06 1,06 1,06 1,10 1,10 1,10 1,10
Inventory with project 68801,2 73 136 77 743 82 641 90 905 99 996 109 995 120 995
Offtake with project 0,16 8 776 9 329 9 917 14 545 15 999 17 599 19 359
Incremental offtake - - - 4 003 4 793 5 687 6 697
Incrmental carcasse weight (kg) 168 - - - 640 501 766 958 909 992 1 071 509
Economic Price 50 50 50 50 50 50 50 50
Economic value - - - 16 012 529 28 760 929 45 499 618 53 575 468
Inventory growth rate without project 1,12 1,12 1,12 1,12 1,12 1,12 1,12 1,12
Inventory without project 63772,15 71 425 79 996 89 595 100 347 112 388 125 875 140 980
Offtake without project 0,31 22 142 24 799 27 775 31 107 34 840 39 021 43 704
Inventory growth rate withproject 1,15 1,12 1,12 1,12 1,15 1,30 1,30 1,30
Inventory with project 63772,15 71 425 79 996 89 595 150 541 195 703 254 414 330 738
Offtake with project 0,38 22 142 24 799 27 775 57 205 74 367 96 677 125 680
Incremental offtake - - - 26 098 39 527 57 656 81 977
Incrmental carcasse weight (kg) 23 - - - 600 254 909 115 1 326 088 1 885 462
Economic Price 45 35 35 35 35 35 35 35
Economic value - - - 21 008 875 31 819 012 46 413 086 65 991 187
Additional poultry production - - - 20 408 621 30 909 897 45 086 998 64 105 724
Economic value - - - 6 897 106 16 208 199 28 571 261 44 775 149
Incremental heifers 0 - - - 1 835 3 968 6 438 9 286
Additional milk production (l) 2500 - - - 4 586 578 9 920 768 16 095 536 23 214 290
milk cash flow 4,5 - - - 20 639 601 44 643 458 72 429 913 104 464 307
Total incrimental cash flow - - - 64 558 111 121 431 596 192 913 877 268 806 110
Production costs
catlle 0,45 - - - 7 205 638 12 942 418 20 474 828 24 108 960
goats 0,65 - - - 13 655 769 20 682 357 30 168 506 42 894 272
poultry 0,6 - - - 4 138 263 9 724 919 17 142 756 26 865 089
Milk 0,6 - - - 15 479 701 62 248 530 105 295 861 158 489 052
Total incrimental costs - - - 40 479 371 105 598 224 173 081 951 252 357 373
Investment costs 13 910 969 56 719 204 27 355 395 7 163 966 6 824 218
Recurrent cost -
Total costs 13 910 969 56 719 204 27 355 395 47 643 338 112 422 443 173 081 951 252 357 373
Project cash flow 13 910 969 - 56 719 204 - 27 355 395 - 16 914 774 9 009 154 19 831 926 16 448 737
NVP (12%) 4.38 million
EIRR 22%
ECONOMIC ANALYSIS
IX
2 013 1 2 3 4 5 6 7 to 20
Inventory grow th rate w ithout project 1,06 1,06 1,06 1,06 1,06 1,06 1,06 1,06
Inventory w ithout project 68 801 73 136 77 743 82 641 87 847 93 382 99 265 105 519
Offtake w ithout project 0,12 8 776 9 329 9 917 10 542 11 206 11 912 12 662
Inventory grow th rate w ithproject 0,10 1,06 1,06 1,06 1,10 1,10 1,10 1,10
Inventory w ith project 68 801 73 136 77 743 82 641 90 905 99 996 109 995 120 995
Offtake w ith project 0,16 8 776 9 329 9 917 10 909 15 999 17 599 19 359
Incremental offtake - - - 367 4 793 5 687 6 697
Incrmental carcasse w eight (kg) 168 - - - 61 644 805 306 955 492 1 125 085
market Price 30 30 30 30 30 30 30 30
gross income - - - 924 654 18 119 385 28 664 759 33 752 545
Inventory grow th rate w ithout project 1,12 1,12 1,12 1,12 1,12 1,12 1,12 1,12
Inventory w ithout project 63 772 71 425 79 996 89 595 100 347 112 388 125 875 140 980
Offtake w ithout project 0,31 22 142 24 799 27 775 31 107 34 840 39 021 43 704
Inventory grow th rate w ithproject 1,15 1,15 1,15 1,15 1,15 1,15 1,15 1,15
Inventory w ith project 63 772 71 425 79 996 89 595 103 035 118 490 136 263 156 703
Offtake w ith project 0,38 22 142 24 799 27 775 29 365 45 026 51 780 59 547
Incremental offtake - - - 1 743 - 10 186 12 759 15 843
Incrmental carcasse w eight (kg) 23 - - - 40 080 - 234 272 293 452 364 395
Price 35 35 35 35 35 35 35 35
gross income - - - 1 402 816 - 8 199 512 10 270 834 12 753 821
Additional poultry production - - - 1 362 735 - 7 965 240 9 977 381 12 389 426
gross income - - - 6 897 106 16 208 199 28 571 261 44 775 149
Incremental heifers - - - - 1 835 3 968 6 438 9 286
Additional milk production (l) 2 500 - - 2 981 276 6 448 499 10 462 099 15 089 289
milk cash flow 4,50 - - - 13 415 741 29 018 247 47 079 443 67 901 799
Total incrimental cash flow - - - 19 834 685 71 545 343 114 586 297 159 183 314
Production costs
catlle 0,65 - - - 601 025 11 777 600 18 632 093 21 939 154
goats 0,55 - - - 771 549 - 4 509 731 5 648 959 7 014 602
poultry - - - 4 138 263 9 724 919 17 142 756 26 865 089
Milk 0,60 - - - 8 049 445 17 410 948 28 247 666 40 741 080
Total incrimental costs - - - 12 017 185 43 423 199 69 671 474 96 559 925
Investment costs 13 910 969 56 719 204 27 355 395 7 163 966 6 824 218
Recurrent cost 23 143 400
Total costs 13 910 969 56 719 204 27 355 395 19 181 151 50 247 418 69 671 474 119 703 325
Project cash flow 13 910 969 - 56 719 204 - 27 355 395 - 653 534 21 297 925 44 914 822 39 479 989
NVP (US$ 12%) 4.02 million
EIRR 20%
Catlle
Goats
Milk
FINANCIAL INTERNAL RATE OF RETURN
Poultry
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