The World Bank and the Department of Forest and Park Services (DoFPS) of the Royal Government of Bhutan are launching an analytical study to support increasing the use of wood and the economic contribution of sustainable forest management to Bhutan’s development. The activity will identify options to strengthen efficiency; production capacity; value addition; marketing; and governance in the supply and use of wood and wood-based products. This analytical work aims to sustainably increase the utilization of timber resources for socio-economic benefits; especially the creation of employment and rural income in Bhutan. The specific objectives are to analyze Bhutan’s potential to increase its sustainable use of forest resources and local supply of raw materials for structural components of buildings; construction; furniture; and associated wood-based products in Bhutan and GMC. The study will analyze all wood-based value chains; identifying existing gaps in each identified value chain and opportunities to a) improve production; timber harvesting; supply; waste; and resource management; b) the use of modern technologies; value addition; available vocational training; and skills demand from the industries; marketing and increase labor productivity and potential employment generation. In addition; the potential for reducing timber imports and increasing exports of value-added wood products will be explored; including a technological assessment of existing wood-based enterprises and a cost-benefit analysis of investments in more advanced processing.The key government institution leading this analytical work is the Forest Resources Planning and Management Division; Department of Forests and Park Services; which will be engaged throughout the activity as the lead agency. Furthermore; NRDCL will be mainly targeted for market studies on timber and feasibility assessments to increase the sustainable yield of forestry resources. There are also private sector players such as the Association of Wood-Based Industries; which has 140 members nationwide and is involved in various stages of timber processing and sale.This analytical work will be carried out in close coordination with the relevant agencies and other stakeholders of the Royal Government of Bhutan and the World Bank team responsible for the Activity. These TORs describe the scope of work; deliverables and expected outputs; and special terms and criteria required for the assignment. Given that these TORs are issued in support of a World Bank-executed activity; the scope of all tasks is limited to analytical work; advisory services; technical assistance; supporting capacity building; and knowledge dissemination.