Announcement of a Loan of Five Hundred Fifty Thousand Dollars to Nicaragua on October 29, 1951

INTE&"VATIONAL BAM{ FOR BEC011STRUCTION AND DEVELOPMENT FOR THE PBESS FOR DlMEDIATE RmIJ!'ASE Preas Release No. 267 October 29, 1951 The. International Bank for Reconst~ction and Development today made a loan of $550,000 to Nicaragua for the construction of a plant for drying and storins grain. Thie is the third loan which the Inter:- nat:J,.onal Bapk has made in Nicaragua. Qn1. June 8, 1951, the Bank .lent $3,500,000 to the Goverm:nent for tbe purchase of equipment and machine~ for hisµ.w~y construction, and $1,200 ,ooo to the Banco Nacional de. Nicaragua for the purchase of agricultural machinery. The new plant will. 1)e an eff'ective first step toward reducing • the country's heavy losses f'roni grain spoilage, Nicaragua's chief f ooq. crops, corn and beans, are pro<;luced in suffi(.dent quantity to. meet the domestic demand, with a small surplus for export. Since these crops do not "cure" well in the damp tropicai climte· of Cen~ral . .America, between 20°/o and 30% of the harvest is spoiled by mold and insects befo~e it reaches the consumers, and farmers must plant an acreage same 25% greater than would otherwise be required to provide enough grain to satisfy domestic needs. The modern xnethod of avoiding spoilage is to dry the grain artificially as soon as it is harvested and to store it in moisture-proof, a!rtignt containers. At present there are no facili~ies in :tUcaragua for dryins and storing grain properly. The Dlant, which will ~ave a storage capacity of 6,000 tons, • will be loQateC,. at Manasu~, the ca:pit(ll of the country apd its largest il. consuming center. - 2 - It will be owned by the Gov~rnment and operated under the supervision of the Minister of Economy. To get the oper- ation under way the Ministr,J of Economy w111 at first buy raw grain and sell the :processed product. Eventually, however, the Ministry expects to o~erate the plant chiefly as a service organization to private growers and traders, processing and storing gJ:'ain for a fee an~ issuing warehouse receipts against which owners. of stored ara.in can borrow. In addition to stabili;:lng the supply and :price of food in Managua, the plant will serve ~s a pilot for additional graip. :process- ing in Nicaragua, will imp~ove the quality of foo~ consumed and, through savings from spoilage, will increase the quantity and quality of grain available for export. The loan ie for a term of ten years, and ca~~ies an interest rate of 4 3/8% :per annum, including the usual 1% connnission charge which,· in accordance with the Bapk•s Articles of Agreement, i~ allocated to its Spec!al Reserve Fund. Amortization payments, calculated to retire the loan by ~turity will start on September 15, 1954. After approval. by the Bamcrs Executive Directors; the loan aaree- ment was signed by Senor D~. Don Guiilermo Sevilla~s~, Nicaraguan Amba~sador in the United States, on behalf of the Repqblic of Nicaragua and by Rober.t L. Garner, .. Vic~ P~esident, on l;>ehalf of the International Bank f o.r Reconstruction and Development. \',