Announcement of Madagascar to Receive IDA Credit for Second Forestry Project on June 18, 1981

. . . FOR IMMEDIATE~RELEASE •World Bank 1818 H Street, NW., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 IDA NEWS RELEASE N0.81/101 June 18, 1981 MADAGASCAR TO RECEIVE IDA CREDIT FOR SECOND FORESTRY PROJECT --------~----~~. The International Development Association (IDA) has approved a credit of SOR 16.3 million ($20 mill ion) to Madagascar for a second forestry project. The project will continue the afforestation program begun under the first project, and will assist the government's efforts to establish a forest in- dustry complex in the Mangoro Valley, about 75 kilometers (km) east of the capital, Antananarivo. The IDA credit will help finance the establishment and maintenance of about 18,000 hectares (ha) of pine and 500 ha of eucalyptus, which will pro- vide raw material for sawn wood, wood chips, and ~,ood pulp. The new planta- tions will be served by 60 km of new service and primary roads, 180 km of sec- ondary roads, and 360 km of tracks to be constructed under the project. Three new villages for about 300 families each will also be established in the areas • to be planted. These villages will accommodate plantation workers who are now living in temporary dwellings. Maintenance and protection measures to be provided for the new and exist- in9 plantations include pruning, controlled burning, sanitary control, and treatments with trace elements or fertilizers. The project also provides for fire protection and control, as well as for vehicles, fire-fighting tools, and equipment. Research and trials aimed at improving yields, rates of growth, and the genetic quality of pine and eucalyptus trees will be undertaken, and pasture- lands in the area will be improved by planting grasses suitable for cattle grazing. Training for the staff of the Mangoro Forest Company (FANALAMANGA) is included, as are studies for the preparation of projects in the lumber in- dustry. The project, to be carried out over a three-year period, will provide employment for 1,600 workers employed by FANALAMANGA. This number is expected to increase to 5,000 when logging and industrial operations become established. At full project development, exports of sawn wood and wood pulp produced will have the potential for earning considerable foreign exchange for Madagascar. The IDA credit is for 50 years, including tO years of grace, and is in- terest-free, except for a service charge of 3/4 of 1% per annum to cover IDA's administrative costs. The credit will be committed when funds are available . • NOTE: IDA credits are denominated in SDRs (Special Drawing Rights), which are valued on the basis of a 11 basket 11 of currPncies. The U.S. dollar equivalent of the SOR amount of the IDA credit reflects the exchange rate existing at the time of negotiation of the credit. FOAM NO. 1121 (5-76) T ECH N I CA L DA T A PROJECT: COUNTRY: TOTAL COST: Second Mangoro Forestry Madagascar $30 . 2 m i 11 i on • IDA FINANCING: SOR 16.3 million ($20 million),standard IDA terms OTHER FINANCING: Government of Madagascar, $5. 1 million; Banque Arabe pour le Developpement Economique de L'Afrique (BADEA) $4.2 million (under consideration); dnited Nations Development Programme, $0.9 million IMPLEMENTING ORGANIZATION: FANALAMANGA (Mangoro Forestry Company) B.P. 4127 Antananarivo, Madagascar PROJECT DESCRIPTION: The project will continue assistance to the government for the development of a silvo-industrial complex in the Mangoro Valley through: (a) establishment of about 18,000 hectares (ha) of pine and 500 ha of eucalyptus plantations, their maintenance and protection; (b) the maintenance and protection of the existing plantations (about 70,000 ha); and the • maintenance of roads, buildings, and infrastructure in the project area; (c) the construction and maintenance of roads, and buildings; (d) pasture improvement; (e) research and training; and (f) studies for industrial development planning and preparation of projects in the forestry and agriculture sector. PROCUREMENT: Procurement of a major share of the equipment and vehicles ($5.7 million) and of fertilizers and chemicals ($3 million) in orders exceeding $100,000 will be by international competitive bidding, in accord- ance with World Bank guidelines. Most of the buildings and roads, afforestation, maintenance of the plantation, and of roads, and buildings, and pasture improvement will be carried out by FANALAMANGA by force account. CONSULTANTS: A total of eight man-years of consultant services will be required under the project for research and project preparation studies. ECONOMIC RATE OF RETURN: 12% ESTIMATED COMPLETION DATE: 1984 - 0 - •