Announcement of Four Million US Dollars Loan to Guatemala for Livestock Development on January 7, 1971

71/( INTERNATIOJ\IAL BANK FOR ~EciONSTRUCTION AND DEVE:LOPMENT 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 \ \1 Bank Press Release No. 71/ i Subject: " $4 'million loan to Guatemala January 7, 1971 for livestock development The first stage of a livestock development program on the Pacific coast of Guatemala to assist some 300 ranchers increase beef production ·by improving \\ pastures and~cattle raisin,g techniques will be supported by a $4.0 million loan appro~ed by the World Bank. ii Thei_proje·ct, which has been given h_igh priority within Guatemala's recently (,dopted Five-Year Development Plan, is art i,mportani: part of the diversificatio.n of the economy. ,:.:, Agriculture is one of the co\D'ltry's economic mainstays. It accounts for approximately 30% of gross national product, generatee some 80% of exports and employs 65% of the labor force. ;I> /'1.• Livestock repti!sents one-fifth of total agricultural production but its growth has been slower than that of other agricultural sectors. Increased beef production resulting ·from the project is expected to help Guatemala maintain its share of the export market and meet domestic 'demand, which is rising sharply. Credits and technical services will assist 't'atu;:hefs. in improving pastures and introducing beu:er herd managemenc met:hods. These, in tum, will raise calving percentages, reduce mortality and increase the number of slaughter stock available , . for sale • The project area is in the Pacific coastal plains and has good acc.ess to markets. It stretches from the border with Mexico .~o the border with El Salvador . .•... --~ Soils in the area are generally fertile and main crops at present are cotton, corn and sug~.r as well as a variety of grasses. /more Bank P·.R,, No. 71/1 - Guatemala - livestock J - 2 - The World Bank loan of $4.0,, milliqn will be made to the Governmen~ of 'Guatemala for 16 years, including a'~ ,five-yea; 1 period of grace, at 7-°i/4% interest per year. The proceeds ::of the loan will be handled by the Bank of G,uatemala, the central bank, through a Livestock Development,Fund. Ffnancing will be channeled to ranchers through the Guatemalan banking system. 0 Technical assistance will be provided by a Technical Services Unit estab- lished in the Ministry of 'Agric_uttur~. The coordination of all activities will " be the responsibility of a Project Commission, operating at ministerial leve'l. An experienced Project Director will have the technical responsibility for executing the program. It is expected that about 120 commercial ranchers will participate in the project in the first year, and 180 during the second year. They will carry out their investment plans in the first three years of their participation in the project and are expected to increase beef production after 10 years by () about 18 million pounds annually, equivalent to 24% of current national production. Participating credit institutions will extend loans to ranchers for terms of 12 years, including a four-year period of grace, at 10% annually inclusive of all charges. The World Bank loan will cover 52% of the total cost of the project, estimated at $7 .8 million equivalent. Ranchers will cont,ribute 20% of total investment, the Government another 20%, and participating credit in- stitutions the remaining 8%'. The Food and Agricultural.Organization of the United Nations (FAO) assisted i11 the preparation of the project lUlder th~, World, Bank/FAO Cooper~tive Program. - 0 -