Announcement of IDA Supports Wood Energy Project in Malawi on May 1, 1980

FOR IMMEDIATE RELEASE eWorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 IDA NEWS RELEASE NO. 80/59 May l , 1980 IDA SUPPORTS WOOD ENERGY PROJECT IN MALAWI The International Development Association (IDA), the World Bank's affiliate for concessionary lending, has approved a $13.8 million credit for a wood energy project in Malawi. The project is the first in the Government of Malawi 1 s long-term energy development program aimed at increasing the country's forest resources. It provides for the establishment of a national network of 88 nurseries to produce seedlings for sale to smallholders, who will be encouraged to establish their own woodlots. A number of fuelwood and pole plantations will also be established to help meet the increasing demand from the commercial and industrial sectors, as well as from urban dwellers. • The Wood Energy Division in the Forestry Department of the Ministry of Agriculture and Natural Resources will be strengthened by the appointment of key staff,with responsibility for directing and coordinating all matters related to wood energy. The Wood Energy Division will carry out charcoal trials to explore the possibilities for expanding charcoal production and marketing. An Energy Unit will also be established in the Forestry Department to carry out studies of alternative sources of energy. Funds will be available under this project to finance the pre- investment activities required for launching Phase I I I of the National Rural Development Program. The present project is Phase I I of the program. Phase being implemented now with IDA assist?nce is aimed at increasing smallholder production by improving agricultural extension, input supply, and marketing and credit services. Besides increasing wood supplies in Malawi's wood-deficit areas, the project will help to meet the fuel needs of some of the low-income population while promoting forestry conservation and strengthening forestry management. Some 9,500 farmers wi 11 b(~ able to plant seedlings and provide for their households' wood needs. The burden on women of household fuelwood collection will thus be reduced. The project will create additional employment for skilled and unskilled labor. The $13.8 million IDA credit to Malawi is for 50 years, including 10 years of grace. It is interest free but will carry a service charge of 3/4 of • 1% to cover IDA's administrative costs • NOTE: Money figures are expressed in U.S. dollar equivalents. FORM NO. 1121 (5-76) T ECHNI CAL D A T A PROJECT: COUNTRY: TOTAL COST: Phase I I of National Rural Development Program (Wood Energy Project) Ma 1awi $ 16 • 3 mi 11 i on • I DA FI NANC I NG : $13.8 million, standard IDA terms OTHER FINANCING: Government of Malawi, $2.5 million IMPLEMENTING ORGANIZATION: Forestry Department Ministry of Agriculture and Natural Resources Lilongwe 3, Malawi CABLE: MINAGRIC, Lilongwe, Malawi PROJECT DESCRIPTION: It provides for: (i) the establishment of a national network of 88 nurseries for production of seedlings for sale to small- holders, who will be encouraged to establish their own woodlots; (ii) the establishment of fuelwood and pole plantations to help meet commercial and industrial demand; (iii) the strengthening of the Wood Energy Division, in the Forestry Department of the Ministr~ of Agriculture and Natural Resources (MANR), by appointing key staff and carrying out ~ charcoal trials to investigate possibilities for increased production and marketing; (iv) the establishment and staffing of an Energy Unit in the Forestry Department of MANR to carry out studies of alternative sources of energy; and (v} a pre-investment phase in preparation for Phase II I of the National Rural Development Program. PROCUREMENT: Procurement of vehicles, machinery, and equipment ($1 mill ion) in orders of over $100,000 will be subject to international competitive bidding in accordance with IDA guidelines; orders will be grouped whenever possible. Orders for less than $100,000 will be filled in accordance with local procedures acceptable to IDA. Contracts for civil works for housing and other buildings ($4 mill ion) will be constructed in accordance with gover~ment standards acceptable to the Association. Due to their small sizes and widely distributed locations, however, they will not attract international interest and wil~ be awarded after local competitive bidding, or will be constructed by force account a~ no likely bulking is expected to exceed $500,000. ECONOMIC RATE OF RETURN: 14% ESTIMATED COMPLETION DATE: 1985 - 0 - •