Announcement of IDA Lends Ten Million Seven Hundred Thousand Dollars for Agriculture in Malawi on June 8, 1978

FOR IM,MEDL~TE RELE·A·s·E . . .. • World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. a Telephone: (202) 393-6360 IDA NEWS RELEASE NO. 78/86 June 8, 1978 IDA LENDS $10~7 MILLION FOR AGRICULTURE IN MALAWI Malawi's efforts to develop one of the poorest regions of the country, the Shire Valley, will be assisted by a $10.7 million credit from the International Development Association (IDA), a World Bank affiliate. The credit will help finance the Shire Valley Agricultural Consolidation Project, designed to provide rural development services and agricultural production assistance to nearly all of the 70,000 families living in the Valley. The I DA-assisted project, which will constitute the third phase of the Shire Valley Agricultural Development Program, will consolidate the investments made and draw on the experience gained under the program over the past five years. Its major objectives will be to intensify the provision of agricultural extension services, establish an irrigated seed multiplication farm and an afforestation program and provide credits for small-scale farmers. It is also expected to improve livestock extension services, expand the fisher- ies development program, improve village health facilities and potable water supply, and finally, extend the networks of rural roads. • About 350,000 people, will benef1t through the provision of social and infrastruc- tural services. The project is also expected to enable about 40,000 smallholder families in the Valley to increase their annual farm incomes from $75 to $120. The development of the Shire Valley has been given high priority since the late 1960 1 s, by the Malawi Government. The first phase of the comprehensive program was initiated in 1968. The project, assisted by an tDA credit of $3.7 million, was aimed primarily at in- creasing crop production on 50,000 hectares in the Va11ey. It included the provision of credit to farmers, improved agrrcultural extension services, settlement of farmers, con- struction of essential infrastructure such as boreholes and markets, and construction and improvement of roads. After it was completed on schedule ,n March 1973, a follow-up project was initiated immediately. Also assisted by IDA with a credit of $10.5 million, the second phase of- fered a more broadly based rural development program and has provided agricultural ser- vices to a larger area than under Phase 1. The total cost of the present project is estimated at $12.6 million. The IDA credit of $10.7 million will finance 85% of the costs, whilst the Government will provide the remaining 15%, or about $1.9 million. The IDA credit is repayable in 50 years, jncluding 10 years of grace. It will bear no interest except for a service charge of 3/4 of 1% per annum for IDA's administrative expenses . • NOTE: Money figures are expressed in U. S. dollar equivalents. FORM NO. 1121 (5-76) T E CHN I CA L D A T A PROJECT: COUNTRY: TOTAL COST: Shire Valley Agricultural Consolidation Malawi $12.6 million • IDA FINANCING: $10.7 million, standard IDA terms. OTHER FINANCING: Government of Malawi: $1.9 million IMPLEMENTING ORGANIZATION: Shire Valley Agricultural Development Program, Ministy of Agriculture and Natural Resources, Lilongwe, Malawi PROJECT DESCRIPTION: The project will assist the further development of Malawi's Shire Valley region and will consolidate the agricultural and infrastructural development investments made in the region since 1968. It will intensify the provision of agricultural extension services; establish an irrigated seed multiplication farm and an afforestation program; • provide production credit; improve livestock extension services; expand the fisheries development program; improve village health facilities and potable water supply; and extend farm to market road networks. PROCUREMENT: Procurement of vehicles, machinery and equipment, worth $1.6 mi 11 ion, in orders of $50,000 or over 1 will be subject to international competitive bidding according to IDA guideiines; orders would be bulked whenever possible. Civil works and boreholes ($1 (· '.Jill ion) which, due to their small sizes and dispersed locations, would not attra:::::.:. ··.·,ter- national competitve bidding, will be constructed after local competitive bidding, or by force account. Purchase of office equipment ($15,500) will be subject to local competitive bidding in accordance with existing government tender procedures, which are satisfactory to IDA. CONSULTANTS: n.a. ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 20% 1982 - 0 - •