Announcement of Twenty-One Million Loan to Tanzania for a Cashew Nut Development Project on May 23, 1974

INTERNATIONAL BANK .FOR • RECONSTRUCTION AND DEVELOPMENT 1818 H STREET. N.W .. WASHINGTON D. C. 204 33 TELEPHONE: EXECUTIVE 3-e3eo Bank Press Release No. 74/33 Subject: $21.0 million loan to Tanzania May 23, 1974 for a cashew nut development proj,.. -:·:- Tanzania's efforts to improve the cashew nut industry will be assisted by a World Bank loan of $21.0 million. It will help to finance the Government's $30.0 million program for increased production, and domestic processing. Agriculture is the largest sector in the Tanzanian economy, occupying about 90 percent of the population. The Government's policy of rural development aims at improvement of output, incomes and living conditions. Cashew nut production_ is largely based on smallholders. Although Tanzania is the world's second largest producer, the yield could be increased by improved practices. The Government's strategy for improvement of the industry involves increased production, and ex- pansion of domestic processing capacitye Coordination of production, processing and marketing of cashew nuts is the responsibility of the Cashew Nut Authority of Tanzania (CATA). 'l'he project will • support CATA's next five year development program (1974/75 - 1979/80), by pro- viding for the construction of five processing factories in the cashew-growing areas of southern Tanzania, port storage facilities for cashew nut shell liquid, office and.housing facilities for CATA, the maintenance of farm access roads, extension and grading services, improved research facilities, improved water supplies, and education facilities in selected villages of the areas and technical services. In addition to increased annual production of about 20 percent i.n the project area, the five factories are expected to produce about 9,000 tons of cashew kernels and 2,500 tons of cashew shell liquid annually. Farm family cash incomes will also increase by about 24 percent. At present these farmers are among the poorest in the country. By full development it is expected that the project will provide an additional 5,000 jobs in processing, extension, grading and research. The total cost of the project is estimated at $30.3 million and the World Bank loan of $21.0 million will finance the estimated foreign exchange component. About $19.0 million of the loan will be onlent to CA~A by the Government of Tanzania at 8.5 percent per annum for 20 years including a five-year grace period. The World Bank loan is being made to the United Republic of Tanzania for a term of 20 years including five years of grace, with interest at 7-1/4 percent per annum. - 0 - • Note: Money figures are expressed in U.S. dollar equivalents.  TECHNICAL D4TA May 23, 1974 • PROJEcr: Cashew Nut Development P.roject a>UNTRY: ' United Republic of Tanzania TOTAL OOS T: $ 30. 3 million BANK FINANCING: $21. 0 million, 20 years, including five years of grace, 7-1/4 pe~cent interest per annum. OTHER FINANCING:· Government of Tanzania, $4. 6 million, Cashew Authority of Tanzania (CATA), $4.7 million. IMPLEMPETING ORGANIZATION: CATA, which was established in 1973 as a statutory authority to coordinate production processing and marketing of cashew nuts, will have its headquarters in Mtwara, and be the pdncipal executing authority. (Cashew Authority of Tanzania, P.O. Box 9234, Dar Es Salaam, Tanzania). PROJECT DESCRIPTION: Construction and operation for five years of five cashew nut • processing factories, of port storage facilities for cashew nut shell liquid, the establishment of cashew extension and grading services and research ·facilities; the construction of office and staff acconnnodations, water supply and education facilities; and the provision of technical services. PROCUREMENT: Intemational competit.ive bidding for five factories on a turnkey basis and for other machinery, equipment and motor vehicles where contracts exceed $30,000; local manufacturers will be allowed a preferential margin of 15 percent or the existing rate of import duties, whichever is the lower; local competitive bidding or force account for construction of staff housing, CATA headquarters, education and water facilities and other civil works other than those included in the turnkey; local civil works contractors will be allowed a 7-1/2 percent preference; existing Government procurement procedures in cases where individual contracts exceed less than US$ 30 , 000 • ESTIMATED CDMPLETION DATE: 1980 - 0 - •