Mali - Power - Water Project

Document of The World Bank F>AA COPY FOR OFFICIAL USE ONLY Report No.P-2954-MLI REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF MALI FOR A POWER/WATER PROJECT June 16, 1982 This document has a restricted distributin and may be used by recipients only in the performance of their official duties. Its eontents may not otherwise be dfsclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit = Malian Franc (MF) MF 1 million = US$2,000 US$1 M MF 500 ABBREVIATIONS AND ACRONYMS CCCE - Caisse Centrale de Cooperation Economique DHE - Direction de l'Hydraulique et de l'Energie EDF - Electricite de France EDM - Energie du Mali FAC - Fonds d'Aide et de Cooperation OERHN - Office pour l'Exploitation des Ressources Hydrauliques du Haut Niger OPEC Fund - Organization of Petroleum Exporting Countries Fund for International Development FISCAL YEAR January 1 - December 31  FOR OFFICIAL USE ONLY MALI POWER/WATER PROJECT CREDIT AND PROJECT SUMMARY Borrower; Republic of Mali Amount: SDR 20.4 million (US$24.0 million) Terms: Standard Relending Terms: Government to EDM: 5 years grace, 20 years term, 9.6 percent interest per annum. Foreign exchange risk to be borne by EDM. Project Description: The project is aimed at ensuring extended, more reliable and cost-effective service, primarily to urban but also to rural inhabitants through alleviation of the major managerial and operational constraints of the parastatal water supply and power utility Energie du Mali (EDM). The project would consist of: (i) a water supply component consisting of distribution system works; (ii) construction of facilities, supply of vehicles, and equipment for EDM operations; and (iii) a power component, including construction of a 2MW biomass power plant and distribution system works. To provide support for insti- tutional rehabilitation, the project would also include financing of 65 work-years of consultant services for technical assistance to EDM management and for carrying out operational and sector policy studies. In addition, technical studies and preliminary designs would be carried out pursuant to the second stage of the program. The risks involved in implementation of the physical aspects of the project are no greater than normal for works of this type although in the case of the biomass plant, the final decision to proceed will be made by the Government and the OPEC Fund on the basis of a study now underway to resolve problems which have recently developed in the Cameroon prototype project. If these problems are resolved satisfactorily and a final decision to proceed is made, we do not expect the risks to be abnormally high. Institutional rehabilitation will essentially revolve around the technical assistance effort, which carries the risk of failure typical of skills transfer between expatriates and their local counterparts. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  Estimated Costs: Foreign Local Total ----------US$ million-------- A. Technical Assistance and Studies 1/ 16.8 0.3 17.1 B. Power Component Biomass Power Plant 5.0 0.5 5.5 Distribution System Works 5.0 0.6 5.6 Rehabilitation Dar Salam Power Plant 3.5 - 3-5 Extension powerline carrier communication system 0.2 - 0.2 Subtotal 13.7 1.1 14.8 B. Water Supply System Works 1.7 0.2 1.9 C. Equipment and Vehicles 0.8 - 0.8 D. Engineering Fees 1.4 0.2 1.6 Base Costs 34.4 1.8 36.2 Contingencies: Physical 1.7 0.1 1.8 Price 5.1 0.1 5.2 Total Project Costs 41.2 2.0 43.2 1/ Includes US$0.97 million PPF advance. Financing Plan: IDA 24.0 - 24.0 OPEC Fund 6.4 - 6.4 CCCE 6.0 - 6.0 FAC 4.8 - 4.8 Government (EDM) _ 2.0 2.0 Total 41.2 2.0 43.2 Estimated Disbursements: IDA Fiscal year 1983 1984 1985 1986 1987 Annual 2.5 5.3 5.7 5.6 4.9 Cumulative 2.5 7.8 13.5 19.1 24.0  - iii - Rate of Return: The estimated ERR is 21 percent for investment in the power distribution system and 11 percent in the biomass power plant, each representing about 17 percent of total project costs. The ERR calculated for investment in the water supply system (about 5 percent of total project costs) is estimated at 11 percent. The rehabilitation of the Dar Salaam power plant presents the least-cost solution to meet reserve requirements; otherwise a new plant would have to be built. An ERR has not been calculated on the costs of financing consultant services for technical assistance. Appraisal Report: No. 3227-MLI. Maps: IBRD 15332 IBRD 15472   INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE REPUBLIC OF MALI FOR A POWER/WATER PROJECT 1. I submit the following report and recommendation on a proposed development credit for the equivalent of SDR20.4 million (US$24.0 million) on standard IDA terms to the Republic of Mali to help finance a proposed Power/Water Project. The Organization of Petroleum Exporting Countries Fund for International Development will contribute US$6.4 million equivalent at no interest for 20 years including a five year grace period. The Caisse Centrale de Cooperation Economique will contribute US$6.0 million equivalent, at about 5 percent interest for 15 years, including a five year grace period. The Fonds d'Aide et de Cooperation will contribute US$4.8 million equivalent on a grant basis. Proceeds of the IDA Credit would be relent to Energie du Mali for 20 years, including 5 years of grace, with interest at 9.6 percent per annum. PART I - THE ECONOMY 1/ 2. Two reports entitled "Economic Memorandum on Mali" (3200-MLI) and "Mali-Special Economic Study--Planning Institutions and the 1974-78 Plan" (3333-MLI) were distributed to the Executive Directors on June 30, 1981. The following paragraphs are based on these reports and findings of World Bank and IMF economic missions during April-June, August-September, and November-December, 1981. Annex I gives country data. Background 3. Mali is one of the poorest countries in the world. Covering 1.24 million square kilometers in the middle of sub-Saharan West Africa, seven million inhabitants had a 1980 GNP per capita of only US$190. It manifests all the signs of a least developed country, including a subsistence-oriented economy (85 percent of the population depends on the primary sector), depen- dence on a few commodity exports, an extremely low rate of domestic savings (minus 3.6 percent of GDP in 1980), a high population growth rate (2.7 percent), a low level of education (10 percent literacy), and difficult living conditions that give a life expectancy of only 43 years. 4. There are serious structural constraints to growth in Mali. Exploi- tation of mineral resources--including petroleum--is severely hampered by lack of geological data, by isolated deposits where access is difficult, and by 1/ This section has been updated from the Second Telecommunications Project President's Report dated December 8, 1981.  - 2 - high investment costs. Industrial growth is limited by narrow domestic markets, by poor infrastructure, and by inexperienced management. Prospects for significant and rapid growth in the agricultural sector which comprises 42 percent of GDP are also limited. Low-yielding rainfed crops (millet and sorghum) and traditional livestock herding appear to have little potential for intensification. Rainfall is uncertain. Soils are fragile and prone to exhaustion and erosion. Human resources are impoverished, in part because access to basic amenities like clean water, better health care, and educa- tional opportunities remains quite limited. Transportation and communication are extremely expensive by world standards, both because Mali is landlocked (Bamako is 1,200 kilometers from both Dakar and Abidjan) and because internal distances are vast (Kayes in the west is 1,750 kilometers from Gao in the east). Finally, Mali is an open economy; imports and exports together amount to more than half of GDP. Trade is concentrated --cotton and livestock e comprise four-fifths of exports, and petroleum and foodstuffs, one-third of imports--making the country extremely vulnerable to changes in world prices. 5. Although these constraints make it difficult to achieve growth in the short and medium term, Mali has long-run potential. Malian farmers are among the most proficient in West Africa. Rainfed maize production could be significantly expanded in the south. Mali has more irrigated rice land than any other Sahelian country, as well as the largest physical scope for expan- sion, although at present there are problems of maintaining existing irriga- tion facilities and of developing profitable production techniques. Potential hydroelectric generating capacity on the Niger and Senegal rivers is estimated at 2,000 megawatts, although it is difficult to envisage viable uses for this power. Mineral resources remain largely unexplored and unexploited but may offer longer-term opportunities. 6. In view of its limitations, the economy appears to have performed well during the 20 years after independence (1960-80). Real GNP per capita grew 30 percent (1.3 percent annually), more than most other Sahelian countries. 1/ But trends mask wide swings from year to year caused by climatic conditions; GNP declined in 1969, 1973, 1974, 1978, and 1980 but grew by more than 10 percent in 1975, 1976, and 1979. Nor has the growth been evenly distributed among sectors. For 1965-80--the longest period for which detailed data are available--GDP growth was 4 percent per year, but the primary and secondary sectors lagged (3.0 and 2.9 percent) while the tertiary sector--comprising 48 percent of GDP by 1980--grew more rapidly (5.3 percent). Food production per capita has performed especially poorly-- as in most of sub-Saharan Africa--declining by 13 percent between 1970 and 1980. 7. Faced with severe structural constraints and lack of sufficient resources to overcome them, economic management in Mali is particularly difficult. Since independence, the government has attempted to promote growth while trying to improve social equity and raise consumption from very low 1/ Economic growth rates given here are compound annual rates, calculated from end points. For GNP and GDP, rates are always in constant prices.  - 3 - levels. But the process has led by the end of the 1970s to very large finan- cial and trade imbalances. There are multiple causes for these imbalances, though not all are necessarily bad. On the negative side, there have been continuing mistakes of economic management begun in the early 1960s, and poor allocation of public resources. On the more positive side is the impact of increased aid which was specifically intended to finance increased imports and government programs. Evolution 8. Mali's economic history can be divided into three periods (1960-67, 1967-74, and 1974-80) based roughly on changes in economic and political conditions. After independence, the first government undertook a major program of modernization that included an independent monetary system, an ambitious five-year development plan, a program of industrialization based on state enterprises, and a welfare orientation intended to keep prices down and to assure consumers an adequate supply of basic commodities. During this period, GDP increased at 3.1 percent per year and the structure of the economy shifted somewhat away from agriculture--with the secondary sector increasing from 10 to 13 percent of GDP and the tertiary, from 35 to 37. By 1966, 27 state enterprises were in existence, and their share of sales in the modern sector had increased to 71 percent from only 24 percent in 1961. But public pricing and investment policies created imbalances that could not be sustained. Government budgetary deficits, which often exceeded 5 percent of GDP, and state enterprise losses were financed through bank credit, which grew at an annual rate of over 30 percent. This created excess demand that was met through imports, and by 1967 the resource gap had risen to 16 percent of GDP (compared to 4.1 in 1960) and the current account deficit amounted to 28 percent of GDP. Net foreign assets had declined from a positive level to a minus US$ 56 million, and the debt service ratio had risen to 19 percent. The economic crisis led to the signature in early 1967 of monetary accords with France, to a 50 percent devaluation in mid-1967, and to reintegration with the franc zone in early 1968. At that time, the French Treasury opened an Opera- tions Account for Mali to provide overdraft facilities to support the conver- tibility of the Mali franc. 9. In late 1968--early in the second period, a new government assumed power and launched an ambitious but pragmatic reform program that was to include increases in official commodity prices and more liberalized private trade--especially in cereals. The government was immediately confronted by the shock of the severe Sahelian drought that began in 1968--when per capita food production fell by 9 percent. By the end of the drought in 1974, the loss of human life--though not fully known--had been severe among nomadic groups, the young, and the elderly; two million head of cattle, or over one-third of the herd, were lost; food production per capita had fallen by 30 percent, turning Mali from an exporter into a net importer of food. As the country was just beginning to recover from 6 years of drought, it was hit by a second shock: a sudden rise in world petroleum prices, which quintupled between 1972 and 1974. The legacy of economic disequilibria from the previous government, coupled with these massive shocks, made it extremely difficult for the new government to follow a course of sound economic management.  10. Compared to 1960-67, performance during 1967-74 was poor. GDP grew at only 1.8 percent per year and real per capita income declined. Output in the primary sector fell at 1.4 percent per year, although the secondary and tertiary sectors--fueled in part by rapidly increasing foreign assistance-- continued to grow, at over 4 percent per year. To finance losses incurred by state enterprises that imported and sold subsidized goods, larger amounts of bank credit were used, ultimately adding to external indebtedness. Efforts to suppress domestic price rises, particularly of foodstuffs, depressed domestic food production and increased cereal imports. By 1974, the economic imbalances--already large 7 years earlier--had either not improved or had deteriorated. The resource gap was one-third of GDP, reflecting partly the large inflow of foreign aid to sustain consumption after the 1968-1973 drought. Domestic dissaving--as conventionally defined--was nearly one-fifth of GDP (reflecting to some extent the convention in estimating national accounts that all aid is invested, not consumed). And the current account deficit remained high at 18 percent of GDP. Net foreign assets had fallen by over 100 percent to a minus US$139 million--the result of continuing recourse to borrowings on the Operations Account, and public external debt more than doubled. The government budget deficit stood at 3.5 percent of GDP. 11. After the end of the drought in 1974, economic performance in the third period began to recover although financial imbalances continued to worsen. GDP grew by 6.7 percent per year between 1974 and 1980. Agriculture led this growth as it recovered from low drought levels, with 8.7 percent per year, despite a significant decline in the terms of trade for farmers during most of this period and poor crops in 1977 and 1979. The secondary sector, however, virtually stagnated. As in many countries at this time, inflation began to pose an additional problem for the country's economic management; prices doubled in only 6 years. Though improved over 1974, the resource gap was equal to almost 19 percent of GDP in 1980; and domestic savings were still negative. The deficit on current account remained high at 17 percent of GDP. By the end of 1980, net foreign assets had fallen by almost another 100 percent to minus US$249 million. This increase in foreign liabilities, largely to the Operations Account, mostly reflected the 16 percent annual growth in credit to the economy over the period, which was needed to finance large government Treasury deficits (4.0 percent of GDP in 1980, including modest capital expenditures) and large losses in the state enterprise sector (US$60 million in 1979, or 5 percent of GDP). As the result of borrowings to finance the 1974-78 plan, external public debt doubled again to over US$850 million. 12. The continuing financial deterioration was basically caused by the inability of the government to reverse poor policy orientations in the face of large, external shocks. The government's wage bill increased sharply and although budget revenues did increase, the government Treasury deficit tripled during the period. Losses of the public enterprises were 17 times greater (at current prices) in 1979 than in 1975. These consumption-oriented policies kept demand above levels sustainable by the domestic economy, causing imports  to rise more than exports, which were financed by reducing net foreign assets and of diverting scarce external resources from productive investment. While mistakes of public economic management should not be minimized, some additional explanations for these imbalances should be noted. Their size reflects in part the significant growth of foreign aid during this period, which both increases imports and--by definition--the resource gap. Moreover, accounting conventions lead to estimates of domestic savings that are misleadingly low. When some of this foreign aid is actually used to increase consumption (as with food aid), real domestic savings are in fact higher than shown by the differences between investment and net imports. Finally, larger government expenditures and budget deficits have been induced to some extent by addi- tional costs linked to foreign-financed investments. In any case, faced with worsening financial disequilibria coupled with reduced access to central bank financing, the Malian government at the end of 1980 requested technical and financial assistance from both the Bank and the IMF to help it carry out a program of economic reform and adjustment. 13. Despite difficult circumstances including poor rains in 1980 and a further deterioration in the terms of trade, the government has been able to initiate several major fiscal improvements in 1981, including credit restraint, improved tax collection, higher taxes on basic consumer goods and petroleum, fewer subsidies to offset price increases, restraint on government personnel costs, savings on maintenance of government material, reductions in scholar- ships, and suspension of some education expenditures. During 1981, budgetary revenue grew by 16 percent, while expenditures grew by less than 5 percent. Credit expansion was kept at less than 9 percent (seasonally adjusted). Initial steps have been taken to restructure the state enterprise sector and to improve the medium-term viability of key enterprises. To improve incentives for agricultural production, the government has substantially raised commodity prices (by 21-23 percent for cereals and by 18 percent for cotton). Official consumer prices for cereals were raised by 15 to 36 percent. With technical assistance financed by IDA, the role of OPAM--the cereals marketing board--is being reduced. In May 1982, the IMF approved a one-year Standby Loan with the IMF for SDR 30.375 million (about MF 20 billion). The government has also formally asked to rejoin the West African Monetary Union (WAMU), a move that would improve Mali's financial and monetary position. 14. While these are positive signs, it is still too early to judge if the measures can be sustained. Similar efforts have been initiated in the past but postponed because drought, world inflation, structural constraints and poverty leave the country little margin for maneuver. On balance however, the government's actions warrant cautious optimism that economic reform will be continued. Planning 15. The government has recently drafted a new Five-Year Plan for Economic and Social Development for 1981-85. Like those of the previous Plan (1974-78), its broad objectives continue to give priority to water develop- ment--for the rural population, livestock, and irrigation; to agricultural  - 6 - and livestock production--especially for achieving food self-sufficiency, for supplying an expanded agro-industrial sector, and for increasing commodity exports; to energy development; and to conservation of natural resources-- especially forests and pastures. These investment objectives seem to accord fairly well with the major economic constraints facing the country. The new Plan represents an important departure, however, from the past in terms of development strategy. It puts special emphasis on the need for policy reforms to re-establish fundamental financial and economic equilibria, notably by balancing the government budget, reducing the balance of payments deficit, reducing the losses of the state enterprises, and controlling training and recruitment for the Civil Service. The new Plan clearly accepts the co- existence of the public, mixed, and private sectors, and it seeks to increase local private participation. 16. Investments proposed by the new Plan are estimated to cost US$2.2 billion (in 1981 prices and exchange rates), of which US$1.7 billion would be required during the five-year planning period. Roughly 70 percent would be used to finance actual capital investments, the rest being for supporting expenditures. Foreign sources will be expected to provide over 85 percent of the financing (compared to more than 90 percent for the 1974-78 Plan). Although comparisons are difficult, the implied annual investment level appears to be over 50 percent higher than the one attained in the previous planning period (1974-80), during which roughly US$1.5 billion (in 1981 prices) were actually commited over 7 years. Judging from past experience implementation of the Plan may encounter delays and difficulties in project preparation and execution. IDA financing for sound productive investment, including a high level of recurrent, local-cost financing may help reduce delays in project implementation. Foreign Aid 17. Foreign aid finances practically all planned public investment in Mali and is therefore critical for promoting future growth. The inflow of foreign aid has increased rapidly--especially since the drought--with net disbursements of official development assistance rising from only US$4 per capita in 1970 to over US$28 per capita in 1979, an increase of 130 percent in constant prices. More than half of this aid is in the form of grants, and almost 95 percent of the rest is loaned on highly concessional terms by official aid agencies. Long-term external public debt has also increased substantially, rising from US$288 million in 1970 to US$853 by the end of 1980, about three-fourths of which is disbursed. Despite the absolute in- crease in debt, it has declined in relative importance in the economy over the last 10 years, falling both in terms of real debt levels per capita and as a share of GDP. This shift reflects both the increase in official grant aid and growing recourse to short-term liabilities drawn on the Operations Account, which added another US$224 million (including unpaid interest) to total public external debt at the end of 1980. Bilateral sources hold 59 percent of the long-term debt; multilateral agencies provide another 39 percent; and private sources account for the remainder. The USSR and the People's Republic of  - 7 - China (PRC) hold three-fifths of the bilateral debt (about US$300 million), most contracted in the 1960s. The other important bilateral lenders include Egypt, France, Iraq, Kuwait, and Saudi Arabia. IDA is by far the largest multilateral lender, accounting for over half the multilateral loans and for 21 percent of total debt committed and outstanding. Actual debt service payments on long-ternm debt have been modest, amounting to US$11.1 million in 1980, or only 4.1 percent of exports of goods and non-factor services. This ratio is lower than in the late 1960s and the early 1970s, and has been made possible by rescheduling some debts (as was done for USSR and PRC debts until 1983) and by conversion of some loans into grants (as was done for US$92.9 million in 1978 by Canada and the Federal Republic of Germany). However, the debt-service ratio could rise significantly in the future unless further rescheduling and conversion occurs, which seems probable. PART II - WORLD BANK GROUP OPERATIONS IN MALI 18. The proposed credit would be the Association's twenty-sixth credit extended to Mali (including two supplementary credits), which would bring total commitments of IDA funds to US$237.9 million equivalent. Of the twenty- five operations already approved, ten have been for agriculture, eight for transport, two for education, two for telecommunications, and one each for small scale industries, urban development, and petroleum exploration promo- tion. Transportation and agriculture represent the largest share of past commitments, representing respectively 29 and 37 percent of total commitments. The experience with ongoing operations has been mixed, the cotton project doing reasonably well, while groundnuts/cereals and livestock projects have experienced ccnsiderable difficulty. Highway reconstruction and improvement has been successful while highway maintenance has lagged. The railway and education projects are being implemented, though somewhat behind schedule. Implementation is beginning on forestry, urban and small-scale enterprise projects. In general, project implementation and subsequent cost recovery has been hampered by Mali's difficult public finance situation. Notes on the execution of ongoing projects are set out in Annex II. 19. The Bank Group's strategy in Mali is governed by (i) the extreme poverty, poor health and low level of basic skills of a largely rural population; (ii) a harsh natural environment with large fluctuations in the availability of basic food supplies; (iii) a landlocked position with long distances and difficult access to foreign markets; and (iv) an extremely difficult macro-economic situation, in particular in the public sector. The principal objectives of Bank Group assistance are (a) to support the adoption of policies designed to encourage balanced economic growth, and to redress the financial imbalances of the public sector and correct the biases of expenditures now disfavoring rural areas; (b) to help finance investments that will increase agricultural production; (c) to help meet the needs of the rural population in terms of health, literacy and rural infrastructure; and (d) to help provide an adequate transport and communications network. Given the close linkages between macro-economic policy performance and project implementation, the Government's ability to address policy issues is an important determinant of the scope and timing of Bank Group lending.  - 8 - 20. Future Bank Group lending for Mali will reflect a close liaison between project objectives and related policy and institutional reform. In the agricultural sector, follow-up operations to the sucessful Mali-Sud cotton project (Cr. 669-MLI) and the Office du Niger technical assistance project (Cr. 854-MLI) are scheduled. In both cases a major focus will be on pricing and institutional issues. The recently approved Road Maintenance Project (Cr. 1104-MLI) addresses the problem of generating and allocating adequate recurrent cost financing in the road transport sector. The recently approved Second Telecommunications Project and the proposed project aim at improving financial and technical management. Interventions are also envisaged for rural health, water supply, and for the production of biomass alcohol as a blend for gasoline. PART III - THE ENERGY AND WATER SUPPLY SECTORS Energy resources and consumption 21. With a total current energy consumption of about 700,000 tons of oil equivalent per year, Mali's per capita energy usage is one of the lowest in the world (115 kg). To meet this consumption need, the country has relied on its precarious non-commercial supply of firewood (2.2 million tons per year), some hydroelectricity (30 GWh per year), and imports of petroleum products (159,000 tons in 1979). Solar energy is being used experimentally in a number of small water pumping installations. The country's hydroelectrical potential is estimated at 10,000 GWh, of which less than 1 percent has been developed so far. Mali's oil prospects are still uncertain; a petroleum exploration project is being financed by the Association. The use of agri- cultural residues is limited at present. There are good prospects for the production of gasohol from biomass, however, and a project to produce ethanol from surplus molasses at two sugar refineries is under preparation for IDA financing. 22. Electricity accounts for six percent of final energy consumption. Public electric service is supplied almost exclusively to consumers in urban areas, with Bamako absorbing 86 percent of the total. This service covers about 30 percent of the urban population and less than 5 percent of the total population. Peak demand in Bamako has grown at an average rate of 12 percent from 7 MW in 1971 to an estimated 20 MW in 1980, since generating capacity is well below this figure because of frequent breakdowns and poor maintenance. A 48 MW hydroelectric power plant has been built at Selingue to meet Bamako's and southern MaliTs power requirements. Its average annual generation is estimated at 218 GWh. Power generation from this plant started in August 1981. Substituting hydroelectric energy from Selingue for diesel-electric generation will reduce Mali's oil imports, with consequent foreign exchange savings.  -9- Water Supply and Sanitation 23. The public water system adequately serves about 20 percent of the urban population in Mali. Bamako has the largest level of service with 40 percent of the population served. There is no sewage disposal system, and Bamako's limited drainage system is clogged due to a lack of maintenance. An estimated 25 percent of the rural population is served by boreholes and water wells, but many rural water supply projects are under way or about to start with external aid. The Association is currently assisting Mali in preparing such a project in the western part of the country. Sectoral Institutions 24. In addition to Energie du Mali (EDM) (see para. 25), two govern- mental institutions have responsibilities in the water and power sectors. The Directorate of Hydraulics and Energy (DHE), under the Ministry of Industrial Development, is theoretically responsible for the planning and the imple- mentation of water supply projects and large power schemes, but in fact does limited planning and implements only water projects. L'Office pour l'Exploitation des Ressources Hydrauliques du Haut Niger (OERHN), under the same Ministry, is currently operating the Selingue hydropower project, as a bulk supplier principally to EDM. 25. Energie du Mali. EDM, the proposed project implementing agency, is a parastatal water supply and power utility jointly owned by the Malian government (55 percent of the share capital), and two French public agencies, the Caisse Centrale de Cooperation Economique (CCCE) holding 39 percent, and Electricite de France (EDF) holding 6 percent. EDM has been operating since 1961 under a 30-year concession agreement, covering the production and the distribution of power and water over most of the country. CCCE and EDF par- ticipate in EDM's management, but the Malian government retains control over policy issues. 26. The organization of EDM does not segregate power and water activi- ties, and direct authority for functional, operational and technical services is heavily concentrated in the General Manager who is appointed by Presiden- tial Decree. EDM management has recognized the serious shortage of skilled and experienced management and staff and commissioned EDF to conduct an organization, manpower and training study. Recommendations based on the preliminary study constitute the basis for technical assistance provided under the proposed project (paras 35-37). Compounding the organizational and staffing problems, EDM's operations are hampered by poor and difficult internal communications between headquarters, the Bamako unit and the out- stations. Moreover, the company's financial constraints resulted in in- adequate maintenance. Poorly organized commercial activities do not coordinate effectively with technical services. Financing of block-mapping and updating of customers' files for the Bamako area are included in the proposed project, as well as construction of facilities to ease communication problems (paras 34-35). A PPF-financed audit of EDM's 1977 accounts revealed serious accounting weaknesses. During negotiations, assurances were obtained  - 10 - that the Government will provide EDM with appropriate book values for all EDM-operated public assets in the water sector by December 31, 1982 (DCA Section 3.02). In addition, EDM will implement a complete cost accounting system to allow separated financial management of the power and water sectors by January 1, 1984 (PA Section 4.01(b)). Future Investment Program 27. The long-term electricity needs of southern and western Mali are expected to be met by the proposed 200 MW Manantali hydroplant (annual generation 800 GWh). However, since power from Manantali would not be available before 1989/90 and additional generation will be needed to meet peak demand in the dry season from 1987 onwards, an extension of the Sotuba hydroelectric plant is planned to meet this demand in the short term. 28. Over the past five years, most investments in the water supply sector have been concentrated on the extension of existing systems in several urban areas. A four-year plan, submitted by DHE in mid-1980 to the Ministry of Plan calls for the extension of water supply services in twelve towns, and for a study of water and sanitation in seven others. DHE has assumed that all operations would be financed externally. In spite of some interest expressed by bilateral and multilateral agencies, it is doubtful that the proposed DHE targets will be fully met. PART IV - THE PROJECT 29. The proposed project was identified by an IDA mission in January/ February 1979. In October 1979, an advance of US$0.97 million was extended through the Project Preparation Facility (PPF) for preparatory studies. The project was appraised in June 1980 and post-appraised in April 1981 because of change in EDM management. Negotiations were held in Washington, D.C., in December 1981 and May 1982. The Malian delegation was headed by the Minister for State Enterprises and the Minister of Planning, respectively. A credit and project summary appears at the beginning of this report, and a supple- mentary project data sheet is given in Annex III. The Staff Appraisal Report No. 3227-MLI is being circulated separately to the Executive Directors. Project Objectives and Description 30. The project would assist the parastatal power utility prepare future works to be carried out as part of a long-term program of rehabilita- tion and expansion. It is aimed at alleviating EDM's managerial and opera- tional constraints and at ensuring extended, more reliable and cost-effective services, primarily to urban, but also to rural, inhabitants. The proposed project would consist of:  - 11 - (a) a power component, comprised of reinforcement and extension of Bamako's distribution system, construction of a biomass power plant at Mopti/Sevare, rehabilitation of the Dar Salam power plant and extension of the powerline carrier communication system at Balingue; (b) a water supply component to resolve the main bottlenecks in distribution and production facilities in Bamako; (c) construction of facilities and supply of vehicles and equipment for EDM operations, including extension of EDM's training center; and (d) technical assistance to strengthen EDM management, to carry out operational and sector policy studies, and to complete preparatory studies and designs for future works. 31. Power Component. In terms of primary distribution the project consists of: (i) a 30 kV underground cable link between the Badalabougou substation south of the Niger river and the Dar Salam diesel electric power plant that will reinforce the existing link; (ii) two new 15 kV feeders out of the Balingue substation; and (iii) a 30 kV overhead link between the Sotuba hydroplant and Balingue. In addition, the distribution system would be extended to ten new sections of the city with about 5,000 potential customers. The project also provides for the rehabilitation of the Dar Salam power plant in order to meet the reserve requirements, and the extension of the powerline carrier communication system between Balingue substation and the power plants at Sotuba and Dar Salam, which at present are linked with only unreliable radio communication. 32. The proposed biomass power scheme consists of the construction of a thermal power plant at Mopti/Sevare that would use rice husks as fuel. The 2 MW power plant would be located adjacent to an existing 13,000 tpy rice mill at Sevare which will be expanded in 1983 to 45,000 tons capacity. The tech- nology for this type of plant is relatively new, and a study is currently underway to resolve problems pertaining to the quality of rice husks, that have been encountered in a prototype plant in Cameroon. A decision to proceed with this component will be made after satisfactory results of the study are available. 33. Water Supply Component. The water supply component would: (i) re- inforce pumping stations supplying treated water to the main network and, if necessary, add new raw-water pumping facilities for the new treatment plant; (ii) convert the old treatment plant into a pilot filtration unit to investi- gate the feasibility of continuous utilization of the Niger River after direct filtration only; (iii) supply water meters and meter repair facilities; (iv) supply and lay 6 km of trunk and secondary mains for the improvement of distribution flows to peripheral areas; and (v) provide spare parts and equip- ment to rehabilitate existing production facilities of EDM-s secondary center systems in the course of a water supply training program.  - 12 - 34. Facilities, Vehicles and Equipment. Construction of facilities included in the proposed project would help to centralize staff and provide adequate space for data processing equipment. The EDM training center would be expanded, to complement increased training activities supported by tech- nical assistance. Approximately 22 vehicles would be provided for various purposes, with a mobile maintenance shop, tools and instruments to re-equip EDM's maintenance shops and power plants, and office equipment. 35. Technical Assistance and Studies. Approximately 52 work years of expert services will be included. A team of 12 managers/technicians to be provided to EDM under contract for four years would be financed under the project. The signing of their contracts would be a condition of effective- ness. The experts would both advise EDM management and have direct opera- tional responsibilities, and each would conduct on-the-job training for Malian counterparts. It is anticipated that experts would be seconded mainly from EDF because of (i) the desirability of having the team supported and supervised by a major power utility; (ii) EDF's experience and well estab- lished competence in technical assistance; and (iii) their knowledge of local problems. In addition, an experienced project manager would be engaged independently of the team provided by EDF, to be in charge of the coordination of the project, including supervision of consultants and periodic reporting to cofinanciers. His appointment would be a condition of effectiveness. To complement the work of the technical assistance team and contribute to the rehabilitationr of EDM operations, several specific tasks and studies would be carried out by specialized firms or consultants. The tasks are aimed at improvement of internal operating procedures such as strengthening of account- ing procedures, review of the billing system and updating of customer files; and also would include overall planning in the optimal operation of the Bamako system and in organizing a preventive maintenance system. In addition, sectoral studies would be carried out regarding medium/long-term system planning for power and water supply, including tariff issues, advisability of continuing the concession system for the power utility and of the optimal system for management of power and water activities. A total of 156 months of consultant services is estimated necessary for carrying out these tasks and studies. 36. Technical assistance in the form of approximately 155 workmonths of engineering services would be financed to assist EDM in engineering design, the preparation of tender documents and to supervise construction, and for completing three tasks pursuant to planned future works, namely: (i) designs and cost estimates for extension of the Sotuba hydroelectric plant capacity to supply additional power demand in Bamako between the commissioning of Selingue and Manantali dams; (ii) designs and tender documents for a transmis- sion link between Bamako and Segou based on the PPF-financed feasibility study; and (iii) design and cost estimates for an initial extension and reinforcement of the Bamako water supply production and distribution system.  - 13 - 37. Terms of reference for all proposed experts and studies have been drawn up. Training is emphasized and would largely be accomplished on the job under the supervision of the expatriate assistants. Three members of the team would be full-time training specialists to assist the EDM chief training officers and to implement EDF's manpower and training study recommendations. Project Cost and Financing 38. Total estimated project cost is US$43.2 million equivalent, of which US$41.2 million or 95 percent would be foreign exchange expenditures. This estimate includes refinancing of the PPF advance of US$0.97 million, and excludes duties and taxes, which are not applicable. For the studies, base line costs have been estimated at an average of US$14,500 per work-month, which includes travel, subsistence and overheads. Physical contingencies of 10 percent have been applied for civil works and equipment in the power component, and price contingencies have been included at the rate of 9 percent for 1981, 8.5 percent for 1982 and 7.5 percent for 1983, and 6 percent there- after. Total contingencies amount to US$7.0 million, or 16 percent of total project cost. Project costs are detailed in the credit and project summary. 39. The OPEC Fund will finance the Mopti/Sevare biomass power scheme for a cost of US$6.4 million on a parallel basis, representing about 15 percent of total project costs. This financing will be extended to the Government at no interest for a 20 year term, including five years of grace. The CCCE and FAC will provide joint financing of approximately 50 percent of the cost of the technical assistance component and the rehabilitation of the Dar Salam power plant, or US$10.8 million, representing about 25 percent of total project costs. The CCCE will provide US$6.0 million equivalent at about 5 percent interest for a term of 15 years including a five year grace period, while the FAC contribution of US$4.8 million equivalent will be in the form of a grant to the Government. The terms of the CCCE loan will be finalized shortly, including on-lending from Government to EDM. Effectiveness of the OPEC, CCCE and FAC financing would be a condition of effectiveness The proposed IDA credit of US$24.0 million would represent 55 percent of total project costs and would cover the balance of foreign exchange required to implement the project. The Government's participation of US$2.0 million or 5 percent of total project costs, would cover the local cost component, and would be financed by EDM through internal cash generation. Project Execution 40. A project coordinator, responsible for supervision of works, imple- mentation, and liaison with IDA and other cofinanciers, will report directly to the General Manager (PA Section 2.01(b)). EDM plans to employ EDF to prepare detailed designs and to supervise the construction of the biomass power plant at Mopti/Sevare and of the extension to the Bamako electric distribution system. For the water supply component, EDM plans to continue with the services of the consulting firm SAFEGE, which prepared the Master Plan for the water supply of Bamako. Engineering consultants would be employed by EDM to carry out the different design studies contemplated in the project (para 36) and to supervise civil works under the project.  - 14 - 41. Monitoring criteria and reporting requirements were reviewed with EDM during negotiations. Assurances were obtained that EDM will submit progress reports to the Association on a quarterly basis, and a project completion report after project implementation is finished. In view of the current poor state of EDM's accounts and the time required to significantly improve them, for FYs 1981 and 1982, brief joint reports on EDM-s annual accounts will be submitted to IDA by EDM and the consulting firm hired under the project for improvement of the system, along with an external audit of project-related expenditures. Beginning in FY83, audited annual accounts will be made available to IDA, within four months of the end of each fiscal year (PA Section 4.02). Procurement and Disbursement 42. All contracts for supply of equipment or civil works construction, except the rehabilitation of Dar Salaam, would be awarded as a result of international competitive bidding in accordance with Bank Group Guidelines, with a 7.5 percent margin of preference for local contractors on civil works. ICB would not be required for Dar Salaam, since it involves rehabilitation of existing equipment and purchase of spare parts. The selection of consultants other than those financed by CCCE/FAC would be done by EDM in accordance with the August 1981 "Guidelines for the use of Consultants by World Bank Borrowers" (PA Section 2.02). 43. Disbursement of the proposed IDA Credit of US$24.0 million would cover 100 percent of foreign exchange expenditures in the following cate- gories: electrical works, equipment and installation (US$6.1 million); water supply civil works, equipment and installation (US$1.8 million); services of consultants and fellowships, (US$7.6 million); studies (US$2.1 million); vehicles, tools and office equipment (US$0.9 million). Civil works for EDM headquarters, data processing and training center buildings (US$1.7 million), would receive disbursements of 100 percent of foreign exchange expenditures, or if purchased locally, 80 percent of local expenditures. Disbursements would cover 10 percent of foreign exchange expenditures for the rehabilita- tion of Dar Salam power plant (US$0.4 million). In addition, the PPF advance of US$0.97 would be refunded upon effectiveness of the Credit and US$2.4 million would remain unallocated. Withdrawal requests for disbursements from the Credit would be fully documented. The Credit is expected to be fully disbursed by December 31, 1987. 44. In March 1980, independent auditors prepared a report on EDM-s finances based on the data as of December 31, 1977. That report plus some unaudited information obtained from EDM, form the basis of IDA-s review of EDM's past financial achievements and present financial position. In view of the numerous accounting deficiencies of EDM the financial figures should only be considered as indicative - orders of magnitude are plausible but a large possibility of error remains. As a consequence, the basis for designing a financial recovery plan is not available at the moment and the project focuses rather on two basic objectives: (i) improvement of EDM-s accounting and commercial organization; and (ii) securing enough local funds for proposed project which is estimated at about 10 percent of the total investment costs.  - 15 - Financial Position of EDM 45. Revenues from power operations did not cover operating expenses in FY 1979, while revenues from water operations did not cover operating expenses in any of the past five FYs. Had adequate maintenance been performed both power and water sectors would have shown larger deficits. Using EDM-s provisional balance sheet as of December 31, 1979, information given by DHE on the public domain water sector assets, and adjusted cumulated depreciation for the public domain assets, total assets amount to MF 14 billion (US$28 million). In accordance with Malian law, all EDM's assets and the public domain assets are valued at historical cost. In order to allow sound monitoring and manage- ment of its operations, EDM has agreed to revalue assets annually on a pro forma basis by December 31, 1983, in a manner satisfactory to IDA (PA Section 4.03). 46. Current assets as of December 31, 1979 include receivables amount- ing to about MF 4 billion (US$8 million). These debts represent about 8.5 months of billing for FY79. They are owed by: private consumers, 60 per- cent; municipalities, 14 percent; Government departments, 11 percent; and state enterprises, 15 percent. Reduction of EDM's receivables would require the implementation of the specific actions included in the proposed technical assistance component (para 40), and additional EDM and Government measures. To this effect, Government: (i) has recently paid all its outstanding electricity and water bills to EDM, and (ii) has authorized EDM to disconnect the delinquent consumers including the State owned enterprises and municipali- ties. During negotiations, it also gave assurances that it will continue to pay its own bills on time and will continue to support the above disconnection policy. More specifically, assurances were obtained that (i) its budgets for 1982 and subsequent years will allocate its agencies sufficient funds for prompt payment of water and electricity bills, (ii) by September 30, 1982, municipalities, state agencies and enterprises will adopt procedures to ensure prompt payment, (iii) beginning December 31, 1982, arrears by these agencies and enterprises will be kept at levels not exceeding 2 months' billing, and (iv) beginning June 30, 1983, arrears by the municipalities will be kept at levels not exceeding 2 months' billing (DCA Section 3.03). Assurances were also obtained from EDM that it will carry out the above mentioned commercial improvement program as detailed and scheduled in the rehabilitation plan proposed by EDF (paras. 26 and 35), in such a way as to reduce overall con- sumer arrears to not more than 3 months' billing by the end of 1982 and to not more than 2 months' billing by the end of 1983 (PA Section 4.04). Projected Operations 47. Tentative capital expenditure for the two sectors for the period FY82-87 totals MF 21.6 billion (US$43.2 million). The proposed project would represent about 98 percent of the total program for the power and water sector over the 1982-87 period.  - 16 - 48. EDM has uniform national tariffs for power and water. Water tariffs at present do not allow EDM to recover expenses of supplying services and are approximately half the level of tariffs in neighboring Sahelian countries for commensurate service. The proposed project includes financing of tariff studies for power and water to be completed in time for an exchange of views with the Association before December 31, 1983 (PA Section 2.08). 49. Given the lack of adequate financial information, the definition of suitable long-run financial objectives is difficult at this time for either the water or power sectors separately or for EDM as a complete entity. The definition of such targets would therefore be deferred until a later phase of the rehabilitation program. In addition, because of the poor services that EDM has been providing to its power customers, it has been difficult to ask EDM to raise its power tariff. However, since the recent introduction of a reliable supply of power from Selingue is gradually improving service in the Bamako area, a tariff increase is now considered justifiable. During nego- tiations, the Government and EDM agreed that appropriate managerial and tariff actions would be taken so that beginning in FY84, EDM-s net cash generation be sufficient to finance not less than 10 percent of annual capital expenditures for the power and the water sectors individually. This will allow EDM to generate sufficient cash to finance local costs of the proposed investment program. In order to achieve the above minimum targets, the Government agreed that EDM will (a) by July 1, 1982, increase electricity tariffs by an additional 8 percent; (b) automatically adjust tariffs to cover any changes in the cost of purchased electricity; (c) automatically adjust tariffs to compensate for increases in the cost of operations due to infla- tion; and (d) by January 1, 1983, increase water tariffs by 10 percent. Appropriate long-term arrangements would be adopted based on more accurate financial data and the completed tariff studies (PA Section 4.06 and DCA Section 3.04). 50. It was agreed during negotiations that the Government would on- lend the IDA credit to EDM under a subsidiary loan agreement at 9.6 percent interest for a period of 20 years including five years' grace. However, as the financial condition of EDM permits, the 9.6 percent rate will be reviewed annually by the Government and IDA with a view to its progressive modification to conform to the then generally applicable relending rate for proceeds of IDA-s credits (DCA Section 3.01(b)). The signing of the subsidiary loan agreement between the Government and EDM would be condition of Credit effectiveness. It was agreed that the foreign exchange risk will be borne by EDM. It has been assumed that future external assistance would bear an average interest rate of 7 percent p.a. and have an average repayment period of 15 percent years. On the basis of these assumptions the proposed tariff increases would permit EDM to cover its debt service from FY82 onward. 51. In order to be assured that debt service will not be excessive, and that availability of both local and foreign costs will be assured, the Government and EDM agreed during negotiations: (i) to exchange views with the Association on the costs and benefits and on the economic justification of the investment before incurring any debt in excess of US$1 million for each  - 17 - operation on behalf of the power or the urban water sectors; and (ii) to submit to IDA annually by March 31 a program detailing all investments planned in the power and the water sectors, and corresponding sources of both local and foreign funds, for the next three years (PA Section 4.05). Furthermore, Government will assume debt service on facilities in the public domain which until now have been covered by EDM. This arrangement will be reviewed upon completion of the concession study to be financed under the proposed project (DCA Section 3.06). Benefits 52. The project will, through institution building seek to alleviate EDM's managerial and operational constraints thereby ensuring extended, more reliable and cost-effective service primarily to urban but also to rural inhabitants. 53. Bamako Distribution. Power service in Bamako has been heavily curtailed in the last few years by breakdowns of the generating units due to poor maintenance, and inadequate distribution capacity. A number of power users had to install and run private diesel electric power sets. This situa- tion should improve with the commissioning of Selingue, and sales should rebound by about 25 percent between 1980 and 1981. From 1981 to 1990 load growth should develop at an average of 10 percent per year and under the project, EDM would strengthen and extend the distribution system to accommo- date load growth up to 1985. Using current tariff levels for the calculation of benefits, the rate of return for the proposed investment in power distribu- tion is 21 percent. 54. Mopti/Sevare Biomass Power Plant. The biomass power plant units would use low-heat value gas and gas oil produced from burning of rice husks. The only alternative to the proposed biomass power scheme is a diesel based power plant. A least-cost comparison results in an equalizing discount rate of 25 percent, assuming an increase of diesel oil cost at 3 percent per year. The rate of return of this component is computed at 11 percent using current tariff levels to calculate benefits. 55. Water Supply. The investment carried out for water supply under the project would complement the ongoing works on the treatment plant financed from German bilateral aid. Whereas the latter consists of extending the production facilities, the project investment would supply and install the necessary pumping installations and distribution network to make the water available to customers. Areas would be selected which so far have not bene- fitted from a distribution system or from adequate water pressure in their neighborhood. As a result, with a minimum amount of investment the project would benefit approximately 60,000 people who thus far have had to rely on unsafe and more expensive sources of water supply, and would increase the reliability of service to the 150,000 people already served. Project Risks 56. The risks involved in the implementation of the physical aspects of the project are normal for projects of this type, since all phases of work would be supervised by suitably qualified consultants. In the case of the  - 18 - biomass power plant, recent problems have arisen in the Cameroon prototype project and EDF is now studying them. If, as is expected, the Government and the OPEC Fund decide, on the basis of the study results, to proceed with the project, we do not expect the risks to be greater than normal. In case of interruption with the gas production, the generating sets can operate solely on diesel oil, so that electric supply would not be compromised. 57. Experience in West Africa with technical assistance to power and water utilities indicates that concrete results can only be achieved through sustained effort over a number of years. In EDM's case the considerable tech- nical assistance included in the project can go a long way to arrest further deterioration of EDM's operations. Nevertheless, it must be recognized that there is still some risk of failure and that further technical assistance is likely to be necessary beyond the project period. PART V - LEGAL INSTRUMENTS AND AUTHORITY 58. The draft Development Credit Agreement between the Republic of Mali and the Association, the draft Project Agreement between the Association and Energie du Mali, and the Recommendation of the Committee provided for in Article V, Section 1(d) of the Articles of Agreement of the Association are being distributed to the Executive Directors separately. 59. Special conditions of the project are listed in Section III of Annex III of this report. Special conditions of effectiveness would be that: (a) EDM recruit a project coordinator whose qualifications are acceptable to the Association (para. 40); (b) EDM sign a contract for the provision of a team of experts to assist EDM's management, on terms and conditions acceptable to the Association (para 35); (c) the subsidiary loan agreement between Government and EDM be signed (para 49); and (d) all conditions precedent to disbursement of the FAC grant and OPEC Fund and CCCE loans be fulfilled (para 39). 60. I am satisfied that the proposed Development Credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 61. I recommend that the Executive Directors approve the proposed Development Credit. A.W. Clausen President Attachments Washington, D.C. June 16, 1982  Annex 1 Page I TABLE 3A MALI - SOCIAL INDICATORS DATA SHEET MALI REFERENCE GROUPS (WEIGHTED AVERAGES LANh AKi.A 1HoU6S.D SU. E. ) - MOST RECENT ESTIMATE)-a 12M.il f'40.0 MOST RECENT LOW INCOME MIDDLE INCOME (Ci 1.1,KA,. 320.5 1960 /b 1970 /b ESTIMATE /b AFRICA SOUTH OF SAHARA AFRICA SOUTH OF SAHARA ,,NP PER CAPITA (LSS) 50.0 70.0 140.0 238.3 794.2 EEhRKY woNSUPIPTION PER iLAP(T'A (KIL(kAMS OF COAL FQI'IVALENT) 14.9 21.2 29.7 70. 5 707. 5 FU?LLC.IION AND VITAL S1A'ISTICS POPULATION, MID-YEAR (THOLUSANDS) 4224.0 5362.0 6750.0 LkiANA POLLLAT1ION (PERCENT OF TOTAL) II.( 14.9 19.3 17.5 27.7 PS'PULATIUN PRkOJECTIONS POPULATION IN YEAR 200U (MILLIONS) 12.2 STArIONARY POPLLATION (MILLIONS) 35.0 YEAR STATIONARY POPULATION IS REACHEID 2130 'P(LLATION DENStTY PEER Sq. KM. 3.4 4.3 5.4 27.7 55.0 PER ,,. K.1. AOHICULrURAL LAND 13.3 16.9 20.5 /3.7 130. 7 iCPLLATION ;(1. STRUCTIRE IPERCENT) U-14 YES. 43.7 44.7 45.3 44.8 46.0 15-t4 Yk,. S3.7 52.6 52.0 52.4 51.2 65 YRE. AND A8GVF 2. b 2.7 2. 7 2.9 2.8 POPL LA 11(N GROWTH RATE (PERCENT) TOTAL 2.1 2.4 2.6 2.6 2.8 LRbAN 5.2 5.4 5. 5 6.5 5.1 ,NED4lF7 5Th11T RAT'E (PER IH()USAND) 49.8 49. 1 49.4 46.9 46 9 CHUDE DEATH RAI'E (PER THOUSAND) 26.5 23.6 21.5 19.3 15.8 ,RUSS REPRODUCTION RATE 3.3 3.2 3.3 3.1 3.2 FAMILY PLANNING ACCEPTOkS, ANNUAL (TH()USANDS) USERs (PERCENT OF MARRIE-D WOMEN) .. FOOD AND NUTRITION INDEX OF' FOOD PRODUCTION PER CAPITA (1969-71'100)) 103.0 100.0 85.0 89.5 89.9 PEK iAP1TA SUPPLY OF CAL//RI ES (PERCENT IN REOUIKEMENTS) 86.D 94.0 90.0 90.2 92.3 PROTEINS (GRAMS PER DAY) 56.0 59.0 57.0 52.7 52.8 OIF WHIC.H ANIMAL AND PULSE 15.0 16.0 15.0 17.8 16.1 C*IILD (AGES 1-4) MORTALITY RATE 41.U 34.7 31.3 27.3 20.2 HEAL IH LIFE EXPECTANCY AT BIRTH (YEARS) 37.2 40.4 43.0 45.8 5O.R INFANT MHOl ALITY RATE tPER THOUSAND) .. . . A(.bCI., rI) CAk I. WAIEK (PLRCENT OF PFREE LAT) UN ) rOlAI. .. .. 9.0 23.9 27.4 URbAN M 29.0 42.0 55.0 74.3 RUKAL .. .. 3.0 18.5 12.6 ACC.ESD IO EXNRE'IA DISPOSAL. (PERCENT IF POPLLA II()N) rOTNI. .. 8.D .. 26.2 IRAN .A. 63.0 .. 63. 5 t<hKAi .. .. ..* 20.3 POPUILATIOU PER PdYSIC1AN 67047.6 44314.0 25145.7 31911.8 13844.1 i'oPULAI'ION PER NURSING PERSON 4982.0/c.d 4124.6 3232.4 3674.9 2898.6 POPULATION PER HOSPITAI. BED TOTAL 1472.0/c e 1480.0/e 1818.6 1238.8 1028.4 CK.bAN 302.0c.e 1310.8 617.1 272.8 423.0 RUKAI 2849. llfc, 1604.7 .. 1745.2 3543. 2 XDMIsSIONS PER HUSPIrAL HED . . 27.3 .. . HOL SING AVE.RAGE SIlE OF HOUSEHOLD T(TAL .. .. 4.8 URbAN .. .. .. hURAL .. .. .. AVF RAGE N1,MRER OF PERSONS PER ROOM T(]TAl .. .. . .. TL T A I LEHAI. .. .. .. AC.CESS l. ErLXTRiCIT) (PERCENT i'RAN .. .. RUKAL .. ..  - 20 - Annex 1 Page 2 TABLE 3A MALI - SOCIAL INDICATORS DATA SHEET MALI REFERENCE GROUPS (WEIGHTED AVEyAGES - MOST RECENT ESTIMATE)- MOST RECENT LOW INCOME MIDDLE INCOME 1960 /b 1970 /b ESTIMATE /b AFRICA SOUTH OF SAHARA AFRICA SOUTH OF SAHARA EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 10.0 24.0 28.0 56.4 73.7 MALE 14.0 31.0 36.0 70.7 96.8 FEMALE 6.0 17.0 20.0 50.1 79.0 SECONDARY: TOTAL 1.0 5.0 9.0 10.0 16.2 MALE 1.0 8.0 13.0 13.6 25.3 FEMALE 0.3 2.0 5.0 6.6 14.8 VOCATIONAL ENROL. (% OF SECONDARY) 15.0/f 10.0 9.0/ 8.0 5.3 PUPIL-TEACHER RATIO PRIMARY 45.0 40.0 43.0 46.5 36.2 SECONDARY 14.0 15.0 .. 25.5 23.6 ADULT LITERACY RATE (PERCENT) 3.0/c .. 10.Ojj 25.5 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 2.0 1.6 2.1 2.9 32.3 RADIO RgCEIVERS PER THOUSAND POPULATION 1.9 11.2 13.2 32.8 69.0 TV RECEIVERS PER THOUSAND POPULATION .. .. .. 1.9 8.0 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION 0.2 0.5 0.5 2.8 20.2 CINEMA ANNUAL ATTENDANCE PER CAPITA 2.0 .. .. 1.2 0.7 LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) 2431.3 2964.8 3604.2 FEMALE (PERCENT) 47.6 47.4 47.2 34.1 36.7 AGRICULTURE (PERCENT) 94.0 91.0 88.4 80.0 56.6 INDUSTRY (PERCENT) 2.7 4.1 4.9 8.6 17.5 PARTICIPATION RATE (PERCENT) TOTAL 57.6 55.3 53.4 41.7 37.2 MALE 60.6 58.6 56.9 54.3 47.1 FEMALE 54.5 52.0 50.0 29.2 27.5 ECONOMIC DEPENDENCY RATIO 0.8 0.9 0.9 1.2 1.3 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS HIGHEST 20 PERCENT OF HOUSEHOLDS .. .. LOWEST 20 PERCENT OF HOUSEHOLDS .. .. LOWEST 40 PERCENT OF HOUSEHOLDS .. .. POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 98.0 136.0 381.2 RURAL *- *- 60.0 84.5 156.2 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN . .. 61.0 99.1 334.3 RURAL .. .. 37.0 61.2 137.6 ESTIMATED POPULATION BELOW ABSOLUTE POVERTY INCOME LEVEL (PERCENT) URBAN .. .. 27.0 39.7 RURAL .. .. 48.0 68.8 Not available Not applicable. NOTES /a The group averages for each indicator are population-weighted arithmetic means. Coverage of countries among the indicators depends on availability of data and is not uniform. /b Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969 and 1971; and for Most Recent Estimate, between 1976 and 1979. /c 1962; /d Government Personnel; Le Government hospital establishments; /f Not including private vocational schools; /g 1975. May, 1981  - 21 - Annex 1 Pegs 3 DEFINITIONS OF SOCIAL SSICATORS tot.: Although the data are dsan from source. ge.e.ally' judged the mas a-haitttins end reliable, it should also be noted that they may to be itote- trationslly comparable because of the lack of etaodsodieedYdefintitte end o--opt. used by diffeet- otu..eniesSorllo itg he date. The data ate tote-.. thelese... cefu1l.t e-otihe orders of eagritude, itdicate -reds, aad rhruefacr -tejotdtfee beahttrssnurr.e. ..ereernc stoop are (- h eoutyaoP of nhesubjntcou...tryas.d I atnuory' grou.P oiht o.-ehat bighera-erge booms tha teOuttyru of the bujeo onr esarto Cat upu Oil fuportate" grouP abat Middls brut North AfoSus an.d Kifdd1lE-te`e het ess Iob etInge snt"utrlfffnhtiee. Inteteeeu gopd tht ha nrgssepplro egtdalhel tt foe etch I md . Scto and ehoo suly ohe sajoltno of rho conrea Ir goonp ha. data for ha I oiollso... Shon the . c neage of ..u.trleaaIa the lndi--t' Ospeded on tdhe aailahilltry ofIdta and isnrubIc.cuto uth .s..s. i relaingn--gee of one Sod iceo osohr bsesoa t sflS opro the Iau f 1d04 ARdA (thousan eqRo) oultft1 e I o'l t,uIfd - total -rbor and rus .. Fopulatiot (-ota, Tatel- To tal eufcl te np fe.Ping. land arsa sod inlardeesre.urhr,and total) dhndedby tbhSet -p-toti-ne tuoet o hosyttL beds,, E.luloal-ttieote ofn ioolua raue rmohyo eenly y_iobl ft i puhllo and Prf-te ge...tsI ardseilsd h.spital Itdre for croye, patue, sket ard Aitth- garden. or to Ie falow 1978 'data hahil itahtctor ryteaoeeti-iSaneta emcn.tfe GNP P UIA~~~~~~~~~~11!.lk ~~~~~~by or leas ..e phy.iictc. ttbuhsteooiigphofalce olIed by' I Iec _nre senhd Ia Mt Soo Ate (97-9hsi)itInd sdta etr -oeatnl tffon by a chya;iofa (hut by a 1970, sod 1979 data. medici as..tnt -ntt, ondoiff, er.) ohtoh offer tn-ptatSni ooo ENth CO iNSUMNPTION Ff0 CAPITA - hsua1 coteosytuon of uo--ctl e..orsy (coitol. lpuno utha b hoepttais trohuda anyep 1trpl getera hepittals, end lagefte, Ostroleum naua gesdhydro,-.P, ulear and geothsmal also- and rus hoepfna1, loca or -uro hoap1tol and eed'dfo'l d artot tly atfofy) inAfoossa f col eqinsn I Peo a"it; 1990 970,97 an 99cnes ynad hoyttlsIte irludad onl under toa.1 daEa, Adgissi-n :per fterlnl la.d - Tots) nuabet of adsitto, to or disuhoogos foot hnap..a. doded byht nuber of bode. POPULATIONAD VeI tTAL STATISTICS Total Popubation, Mtid-Yean (thousan.ds) - be If July i; 1960, 1970. and 1070 HOUSING dats. Aorsa lo f 1uabl (rere re h.u..d. -ttl ubn ndotl tes orlono rr to toa)-O Iiof ulben to tota PIyP on;A oshl,cnIt f su f fIdlidul aeho share lt1Nit utr diffferrt d Ifntit f utbat areas maYffccmpr y of faeInd their al acl.hhune ldger may orta 00y h I ncbi.luded Sn ssng iuotfe; 1965,17,ad17Oao the househol fr ai aIca upee Poouaafr Projecn..e Anetage nuber of rorsons p Ott o- tunl,l urhet, sod rural - IA'rlg S- Pogoith- ir yeae 1000 - Currant poyulaoo poecfi chae n -ttt ban of pensoce yet ... Ir al urban t ua coyenoenIonoI totalpoultnby Sge and sea and ohet arltin etliytns doIli;,g,, e-pe-tto-ly'. arIinetcldo -ptaottuaead ing iff sopectncy athtrth Scooihgofithb . unony,' pen capita Sonnet Acosee tofeti t Prcn fdtin total, urban, tod ruos1 - lenel, an fetols ife ropetencysrtltaing an 77.5yar. Th at-Cann fai doli Ig noob tloorfity' in lco noos5 meesFo lethcyrte ale oh-en three lvs eing decline in ofttlIrhan, Ind ..uoul d-Itlftfars-p-ocooy. friiyacring to .nco. lanaiIand oe ..fl p Ingnna pefrrDUCtoIO tact c--try to then assiged ono of these i.eonb. ain of marna.loy ffCTO and fertilSty tren As f-r ...cuo upns Ad)uated toro1lset Retios tSrioaypoo _tinIneIs_i ....n pouato thea S n gostaine 'rtar schol -tool -mae ad fmnor iteotu G , sale. and fetalt the bltnth rare Se equalto the death rat. ondal the aeItruture ra nol o l aget at the pitmay' IeI asytcoA.....rspcSO maiscc 'at his St hsend cnly aflter forotliryoso d delto to prOm_ry shol-g poyu1lofoa omiyicudschde gd6l rho reptoose..nt lo-c of unit ne rpeodu...nir rote, oh..eth gee oyears hut adjusted f- diffane"t l.eoshe of prniar'educac Ion o of scenracace t eIf .o..tly'. Th. suationary pupulenfon aloeot c-otttirsonih Int Iraoua oterlletm p aneed 100 pelnoet estimatd on lthe bai of the oo Ioa uhroafrt.fth nuafosneenappi r - or bone the offitna1l shot age. Sn the Year 2000, ard tho runs of denlioc of fertilifry rate to relae-Snt ldr soho1l -total, maa and femal - Cnmpuned as ahy'; secodaty -on lere... -dntorqufreaI Ibeer four Y Iae fapprocd prIar tot'Y tn cearng Pirar ilclato le oolhad - Th. Ysat then t.tar...ay popilasacn ponoides genatl.1 -n-tinnu.. or Iteto ernah ig.,tccf forpoi ense baa ast reachetd. usually of 12 to 17 yeaoe of aga; no-ropondeoc lorssargnerallyi 'Popultiot lese.ity' eldd. Pet so. ke. -sod-year population per equate kiloe..a 1. 100 heotaree) of Vnn...atal e_ oloant(teos of *soondsrt) - V..atfoa ... fcuhon totl ae;161, 10_~701 and 1979 det Snlullds . r I'tl ..otra , r ther peogteas.. ahitob operate indpod- PetsoIfo .aofuualan -neptdashefosgcurtlsod-stlynoa depatent. fscnay otttans oly;. 196. 197.en 179 datt. "Punltah"Irrt- rso.ar eedec t ud-ets...nllId inn Populatio Aae Seoutars foeosot) C-ilfdren (0-14 Years). noo,ki, to-g (15- prm :-adscndar'y len-ds dndad Fby nathara of t-as_ Sn the 6uyas,ad nesoalI S I Int sd -te) aspt Itae of md-Y-n PIPu- trrep-oding level. .laron 19 1 1'970 d17 date.nAduLt.litteteon rate ont)-Liaet-- adults (able to read and -st,a) Poolatoo ooh. tars lonat -. to:61tal l- annualol gtoh rate. of itel. ofa- seIaoeog f t-Isldult popolatton egad 15 y'a_ atd _oet peer.. pplsine fur 1950_60, _161TI nsd 1900-79. Foprulainof ..nesh RoAI (oroot - urban - Atua growth retee of urban papa- CNShT latinoe fot 19506, 10 ~9t-7. ad 10970-79.- CNUPTee ONurar(rttu.ncclsf)-Fasgrce opisst poplaltio-n;%90,170 nd 1979 dt.mltarntfcee bode Death Oat (pEr, thousand) - A-ua dsothe Par- thosande of mnd-y..o t1,dioPchee(e husdrrlnoi-Altpso asnr o ah ynyulstto-;1960, 1970 h 97 ae horadastogsnral uhh t per floter2 o tpoyclort.s; esiudu- ,itY' rate; u-ue'Y f syeraaaa nfgi 90 00 n 99 mosthcfntohe ahlsed1Senu FanSl FlaninaAcoeoona unnal (housnds)- Antual 6Oer of~' areft ' annes(e baan outSt)-T eor for hr n facst of lnn-noorl dnnee nde septesof attna failyolnora poges.gesta pulI pe thusndt oyuounn;euludeot dened I _cetet F bilth-l-t-I TV~~~~~~~~~~~phhcto dne yiarl o snniggeea ros. It t cotiena teaurcIeouhludd) Agoae prdcinn ahnopyl.. is9 hfo oni. i,dn y -ti-n ndo noioa naetg grdus price4 o -hta 196 i-6. b1970, andt97 af.Ine -P Iit-lPn ic n (touans -h tcuiotcllty' scfne pesot oud In u.. tItfosusa Pd- - In fodFintabadbss nOaoiui DoqSoslysicu in f (pret) p.labor foc..it farm ing, fnIary- hotk gan mees ntsearSeredbymS asr o yhsflngca needs ton9norma act-. fihtnna A5Foceost ftotllbrfre 00 00ad17 aa cityand aalt cothueIng onrontto ispynr,boyd tgt,og nuty nereI) Lbo turns t. -of --log, cotttfht manufatotf andt . son ..st fhulo o pouiti.t, and;alloingI Id... lD der Ind forose tdn sdi ektn .idhy Ilie an gasY - t paroodnage fttllbrdo 90 hoobld -ct 96-h5,197. an-d 1977 - data 1970d.(.% g and 1979. daita..d .int d -i - net spyl of hfoo per Iday. No InPdy fon ist def-I ted as shone ITa-sent'rtsstcmue stt ae o eaalbrfrea qufteentefor ll,igccootnt sedtaitebo by.. hSI proid tnt.. mito peOrFOREntgeo ca,ml n oaeppltn falagsreef alateohIgrteo totli phtnlnflpot6 day end9 00 tnds1of9sdftel and 1960,o1971. sod 1979 data. T-est ateibased orJv --0'e prtOOpadinst pu.lse proteSt, of Im.1 gfane shouldh onaabl poen beesad Inflsutyn age-sen tonotuI e f she. poplation, ind -long. tfmetoend an,mal prtIn as,, an snenlge fI.h old ryedbyFGS h :uPfod foonomfcdDsOeodiecy Satin F -1 natlof populatIon un to 5 1n 65bc and une Onl .od uny 191-5 17 sod 1977_data tot the octal Dabon..t trots.l In tet nadnayoronan 50mbf .n aIma and 01.0i-IFo.redn suply of1 foo de-l S. --d - - otoY nmaiasanh ussS rm erdy 016,17 end 1977 daa. IcnqDDfISOIl at~~~~~~~' bithI96,191an 97 dt, o soldb inoepee olhontealeauin of Pnti" thoulynd 1197foa u Indiute povety nnaSolS ha ooaln)hl hc iia eater auth as thoc from protanted horeholes, springs,2 sod saitary tiIf)t Octa roanc ynnro t Indma 1 lootS o one- bir of 1 en gaee ayt pecfaeso h hin h tepcan poplatra nnuhnoaph. i yfrooal g..... Itt-e ut.ry. Patlocel- Os d d 1-oa tons ~ Ah us fountInInoPt..ndys otdntmr Ihao000 eter pf,nnmoT hones may' ho60 lee ntadutatdt itrca c ai ubnae hosloed0 bein Ifbi 7sanohi .....sIofl So, os.I oa resftmndFnliorlioaeln ont Incm ae rosr resnal 1961t s 6ul 1970httehaaof raasr ftebushl o oa Inrco197o7potulatcc Iur i- sod -- rul hc sot "absolut dorttc tospnd a .a flptnnlrae to t he1 . day It ecigthe z, Foot". .. faintly'' s t. h.ot..eIr toods.l. Anc-deSiucc lt Disnsal torcot o o uatr-tncal unba,PtY total d - theild cto o dsoa, tbo sinou trast19e1t6, uf 7 hmnd 197t7t IconIcNandEncDISTatsBUTIOtN lan Snatis-lhotSndtsh.P--hay 196d1i Poonlatio ret FtysSan- Fhpldttointh lIodad by Puo;r f yradctnc poa physt-"'- Fi- n Ih n- cisnaqudltftd-idfnooamlitsiecbunlar196 ceostndleied. Poyulaitou yen nunaSta yerent- Popuhatio d Ind d byh 'no f rctcn aaheandfeeolegrodoarooursos.pouctttslnuoooe.snd aP Ietooures  - 22- ANNEX I Page 4 ECONOMIC INDICATORS GROSS NATIONAI PRODUCT IN 1980 ANNUAL RATE OF GROWTH (%, constant prices) US$ Mln. 7 1960-67 1967-74 1974-80 1980 GNP at Market Prices 1,416.9 10C.0 3.5 1,8 6.8 -1.2 Gross Domestic Investment 210.8 14.9 6.1I/ -2.1 8.2 -3.7 Gross National Saving -16.8 -1.2 -8.1 -16.2j, 3.52 33 .3- Current Account Balance -261.5 -18.5 -15.5_/ -6.6 -1.2- 5.4- Exports of Goods, NFS 268.3 18.9 12.0 2.8 11.6 25.1 Imports of Goods, NFS 529.8 37.4 13.7 4.9 6.2 9.8 OUTPUT, LABOR FORCE AND PRODUCTIVITY IN 1980 Value Added Labor Force 4/ V.A. Per Worker U5S Mln. _ Mln. ,I US$ % 5/ Agriculture 588.2 41.9 3.28 88.4 179 47.2 Industry 145.5 10.4 0.18 4.9 808 213.2 Services 672.0 47.8 0.25 6.7 2,688 709.2 3/ Total/average - 1,406.1 100.0 3.71 100.0 379 100.0 ('OVERNMENT FINANCE 6/ General Government Central Government (MF Bln.) X of GDP - MF Bln.) Z of GDP 1980 1980 1977-79 1980 1980 1977-79 Current Receipts 97.9 16.5 14.0 59.4 10.0 11.6 Current Expenditures _114.QZ/ 19.2 15.1 80.9- 13.6 13.3 Current Surplus -16.1 -2.7 -1Li -21.54/ -3.6 -1.7 Capital Expenditures 2.5A/ 0.4 0.8 2.5- 0.4 0.8 External Assistance (net) 73.4 12.4 15.0 14.2 2.4 1.4 MONEY, CREDIT AND PRICES-/ 1977 1978 1979 1980 1980 1981 March March (Billion MF outstanding end period) Money and Quasi Money 83.6 103.0 120.2 125.6 132.3 131.0 Bank Credit to Government 94.4 96.8 101.8 99.4 101.9 101.0 Bank Credit to Economy 107.2 131.6 152.2 164.0 162.3 174.2 (of which State Enterprises) (64.4) (71.9) (89.2) (104.6) (86.1) (114.5) Money and Quasi Money as Z GDP- / 21.1 24.3 22.9 21.1 General Price Index (1977=100) - 10.0.0 109.7 122.4 140.4 Annual percentage changes in: General Price Index 7.7 9.7 11.6 14.7 Bank Credit to Government 31.1 2.5 5.2 -2.4 Bank Credit to EcDnomy -12.5 22.8 15.7 7 .8 (of which State Enterprises) (-25.1) (11.6) (24.1) (17.3) Note: All conversions to US dollars in this table are at the average exchange rate prevailing during the period covered. Not available indicated by ".." and not applicable, by". 1/ Net factor income is not available in constant prices; therefore these growth rates are for gross domestic savings. 2/ A negative sign indicates a growing current account deficit. 3/ Figures may not sum to totals because of rounding. 4/ Preliminary estimates subject to revision. 5/ Percent of country average. 6/ 1980 figures not strictly comparable to those for 1977-79; 1979 is provisional. 7/ Includes 4.0 for accrued but unpaid expenditures and net unallocated expenditures 8/ From International Financial Statistics. 9/ Based on year-end levels, not monthly averages 10/ GDP deflator. March 25. 1982  23- ANNEX I Page 5 TRADE PAYMENTS AND CAPITAL FLOWS BALANCE OF PAYMENTS MERCHANDISE EXPORTS, FOB (AVERAGE 1978-80) 1978 1979 1980 US$ Mln. % (Millions US$) Exports of goods, NFS 144.5 193.0 268.3 Cotton and products 79.3 51.4 Imports of goods, NES 339.5 434.1 529.8 Livestock and products 43.5 28.2 Resource gap (deficit = -) -195.0 -241.1 -261.5 Groundnuts and products 8.1 5.2 Fish (dried and smoked) 2.1 1.4 Factor Payments (net) -10.9 -11.8 -14.4 All other co. sodities 21.4 13.9 Private Transfers (net) 37.1 32.2 35.0 Total 154.4 100.0 Balance on Current Account -168.8 -220.7 -240.9 EXTERNAL DEBT, DECE24BER 31, 19806/ Government Transfer (net) 103.9 106.7 108.3 US$ Mln. MLT Capital (net)2/ Receipts 71.7 91.9 124.2 Public Debt, incl. guaranteed 852.6 (cf which public debt) (68.7) (75.0) (84.8) (of which disbursed) (621.1)- Payments -19.3 -15.7 -18.6 (of which public debt) ( 8.7) (8.8) (11.1) Subtotal 52.4 7 105.6 DEBT SERVICE RATIO for 1980 - Other items, n.i.e. -8.7 1.9 -13.8 I Increase in Reserves (+) -21.2 -36.4 -40.8 Public Debt, intl. guaranteed 4.1 Gross Reserves (end year)- 855 S.8 15.3 Net Reserve (end year) 3'41 -229.4 -258.5 -248.9 IBD/IDA LENDING, AUGUST 31, 1981 (Million 12$): IBRD IDA imports of petroleum 43.7 55.5 82.8 Imports of foodstuffs-' 52.3 47.9 78.8 Outstanding & Disbursed 0.0 130.0 Undisbursed 0.0 69.8 Outstanding incl. Undisbursed 0.0 199.8 RATE OF EXCHANGE US$ 1.00 = NF: 451.27 425.45 422.60 MF 100 = US5: 0.22 0.24 0.24 (As of August, 1981: US$ 1.00 = MF 598.15 MF 100 = US$ 0.17) NOTE: Not available indicated by ".." and not applicable by 1/ Trade data from World Bank; factor payments, transfers, and capital flows from various IMF sources. 2/ Includes investment and borrowing. . 3I Converted at end of period exchange rates. 4/ Net foreign assets of banking system; differences between years do not necessarily correspond to changes in reserves, in part because different exchange rates may be used. 5/ Includes food aid. 6/ Medium and long-term. 7/ Includes US5$ 141.2 million in arrears on principal and interest. 8/ Ratio of Debt Service to Exports of Goods and Non-Factor Services. March 25. 1982  - 24 - ANNEX II Page 1 THE STATUS OF BANK GROUP OPERATIONS IN MALI A. Statement of IDA Credits as at April 30, 1982 Borrower: Republic of Mali Credit IDA Fiscal Amount Number Year Purpose IDA Undisbursed -----US$ million---- Ten Credits fully disbursed 61.6 383-1-MLI 1975 Second Highway 8.3 /1 1.04 538-MLI 1975 Livestock 13.3 1.91 599-MLI 1976 Third Highway 10.0 0.36 669-MLI 1977 Mali-Sud Agricultural 15.5 3.41 713-MLI 1977 Railway III 10.5 3.95 733-MLI 1978 Education II 10.0 3.16 753-MLI 1978 Mopti Rice II 15.0 0.81 854-MLI 1979 Technical Assistance 4.5 0.46 883-MLI 1979 Forestry 4.5 2.86 943-MLI 1979 Urban Development 12.0 7.57 986-MLI 1980 Industrial Sector Development 8.0 7.20 1104-MLI 1981 Road Maintenance 17.0 16.50 1134-MLI 1981 Petroleum Exploration Promotion 3.7 3.60 1174-ML1 1982 ODIPAC Technical Assistance 6.5 6.50 /2 1200-MLI 1982 Second Telecommunications 13.5 13.50 /2 213.9 72.83 of which has been repaid 0.7 Total now held by IDA* 213.7 Total undisbursed 72.83 * Prior to exchange adjustment. /1 Supplementary Credit to Credit 383-MLI. /2 The Credit was signed on April 30, 1982 and is not yet effective.  - 25 - ANNEX II Page 2 B. Statement of IFC Investment as at March 31, 1982 Loan Amount Number Year Borrower Purpose of Loan Undisbursed -----US$ million----- 403-MLI 1978 Societe Mamadou Sada Diallo et Fils Bleach and Plastic Products 0.6 0.0 612-MLI 1982 Societe Industrielle Sheanut butter de Karite du Mali, S.A. for export 2.6 2.6 1/ C. Status of Projects in Execution as of March 31, 1982 2/ Credit 538-MLI Livestock Project. US$13.3 million Credit of April 11, 1975; Effective Date: July 24, 1975; Closing Date: June 30, 1982. The project consists of (a) introduction at livestock extension services and grazing control schemes in three selected areas (b) provision for animal health services, (c) construction of 50 ponds and 70 wells, (d) construction of one slaughter house (e) provision for five livestock markets, (f) development of a pasture trial station (g) implementation of a training and functional literacy program and (h) preparation of a follow-up project. Although most components were successfully executed, there was no progress on the more innovative aspects, i.e. those elements aimed at establishing the rational use of land and water in the livestock area. Therefore remaining funds under the Credit have been focussed on financing the necessary research and pilot schemes, and on strengthening sector institutions, in order to lay a sound basis for an eventual follow-up project. 1/ Not yet effective. 2/ These notes are designed to inform the Executive Directors regarding the progress of projects in execution, and in particular to report any problems which are being encountered, and the action being taken to remedy them. They should be read in this sense, and with the under- standing that they do not purport to present a balanced evaluation of strengths and weaknesses in project execution.  - 26 - ANNEX II Page 3 Credit 669-MLI Mali-Sud Agricultural Project. US$15.5 million Credit of December 23, 1976; Effective Date: September 13, 1977; Closing Date: June 30, 1983 The project consists of (a) expansion of agricultural production in the project area: cotton, kenaf, maize and rice; (b) studies; (c) applied research; (d) development of livestock; and (e) strengthening of public health services. Project activities are progressing satisfactorily and have been extended to millet and sorghum. Except for rice, production is beyond apprai- sal estimates. Village Mutual Guarantee Groups and a blacksmith network are being developed beyond expectations. Major financial difficulties for the implementing agency arose in early 1981 as a result of inadequate adjustments in the cotton price structure by Government; in April, however, the immediate financial problem was solved by removal of input subsidies borne by the agency. Credit 713-MLI Third Railway Project. US$10.5 million Credit of June 10, 1977; Effective Date: November 22, 1977; Closing Date: June 30, 1982. Implementation of the bridge rehabilitation and repair program, the project-s main component, was finally set in motion in December 1979. The remaining small bridges, which had to be excluded from the project as the bid price exceeded the anticipated cost, will be financed with an EEC Special Action Credit for US$10 million. Mali Railways (CFM) main capacity and operational constraint continues to be the low availability of locomotives. This had thwarted efforts to increase CFM's utilization of imports from Dakar, where high stocks of Mali-bound products accumulated at the port awaiting transport to Bamako. The shortage of locomotive power was worsened by a collision in December 1979, leaving a gap which can only be filled by augmenting the locomotive fleet. This is envisaged with funds available under the EEC Special Action Credit. Credit 733-MLI Second Education Project. US$10.0 million Credit of September 30, 1977; Effective Date: January 30, 1978; Closing Date: June 30, 1983. To contain cost overruns caused essentially by construction delays of about two years, the Government has requested the deletion of the construc- tion of the National Institute for Management (IPGP), extension facilities for a Teacher Training College and housing for literacy supervisors. The deletion is equal to 10.4 percent of the original project cost estimates. Construction is completed for all other components except the Livestock Technician Training Center (EIV) which is expected to be completed by July 1982. The functional literacy program is proceeding satisfactorily. New curricula are being launched in nine experimental rural lower secondary schools. New programs for the Agricultural Training Centers and for the EIV are being prepared by a team of three technical assistants working in collaboration with Malian teams. Training of teachers and preparation of new programs for IPGP is proceeding satisfactorily.  - 27 - ANNEX II Page 4 Credit 753-MLI Mopti Rice II Project. US$15.0 million Credit of December 8, 1977; Effective Date: May 15, 1978; Closing Date: November 30, 1983. The project consists of construction of new polders (8,000 ha) and consolidation and improvement of existing polders (26,200 ha) for rice culti- vation under controlled flooding. Main components are civil works; deep ploughing; building; farm machinery and civil works maintenance; agricultural credit; applied agricultural research; technical assistance for ORM and adult literacy program. The project also provides assistance to the Study Bureau of the Genie Rural. In general, the physical progress is satisfactory, despite some delays in earthmoving works, deep ploughing, buildings, and hydraulic structure implementation. Credit 854-MLI Office du Niger - Technical Assistance/Engineering Project. US$4.5 million Credit of October 30, 1978; Effective Date: January 31, 1979; Closing Date: September 30, 1982. The project was designed to prepare (a) an infrastructure rehabilita- tion program, (b) a pilot program of on-farm works (1,500 ha), and (c) urgent spot repairs of the irrigation infrastructure. The technical assistance project consists of (1) engineering services to prepare plans required for the appraisal of an infrastructure rehabilitation program, (2) training of irriga- tion construction personnel, (3) audit, (4) livestock studies, (5) research and (6) a socio-economic study of the settler population. Except for the Kogoni rice research station equipment, all project components are underway and proceeding at a satisfactory pace. Due to initial problems, the project has fallen behind schedule, but some delays can be made up within the remaining months of the project. Credit 883-MLI Forestry Project. US$4.5 million Credit of May 25, 1979; Effective Date: June 30, 1980; Closing Date: December 31, 1984. A five year program to increase fuelwood and building pole supplies would establish 3,400 ha of industrial rainfed tree plantations near Bamako and on a trial basis, 60 ha of rainfed and 70 ha of partially irrigated plantations near Mopti; apply modern forest management techniques on 1,200 ha of natural forest; establish three rural forestry nurseries and rehabilitate a fourth, and carry out studies of more efficient wood use and ways to involve local population in rural forest activities. Technical experts' services would supplement the staff of the Forestry Department of the Ministry of Rural Development to assist with the implementation of the forestry program. The project has started satisfactorily, but a problem has recently developed with respect to availability of Government counterpart funds.  - 28 - ANNEX II Page 5 Credit 943-MLI Urban Development Project. US$12.0 million Credit of November 7, 1979; Effective Date: June 3, 1980 Closing Date: December 31, 1983. The project will assist Government in providing affordable urban services to low income urban residents. For the capital city of Bamako, the project provides shelter, services and related community facilities for about 44,000 low income residents; improves health and sanitary conditions; and carries out an investment study. In addition, new institutions will be created and outside expertise utilized to strengthen and develop the urban setor. Market facilities and financial assistance for the informal sector and promotion of local building materials would aid local entrepreneurs. The secondary centers of Mopti, Kayes and Gao will receive essential water and sanitation services. Project implementation is proceeding satisfactorily. Credit 986-MLI Industrial Sector Development Project. US$8.0 Million Credit of May 23, 1980. Effective Date: September 26, 1980. Closing Date: June 30, 1985 The project consists of support to the private industrial and traditional sector, including a US$3.5 million line of credit and a comprehen- sive institution building program; and the rehabilitation and expansion of Union Laitiere de Bamako (ULB), Mali