Announcement of Industrial Rehabilitation Project in Uganda to Receive IDA Credit on May 20, 1982

• ',ti) '4.:-."-- FOR ·1·MMI;DIATE RELEAS~. ,·~\ . . . World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 IDA NEWS RELEASE N0.82/74 Contact: Pushpa Schwartz May 20, 1982 (202) 477-5306 INDUSTRIAL REHABILITATION F1 ROJECT IN UGANDA TO RECEIVE IDA CR~OIT Industrial enterprises in Uganda will be rehabilitated wi~~ the help of an SOR 31.5 million ($35 million) credit from the International Development Association (IDA), the Wor1d Bank's affiliate for concessionary lending. Although the Ugandan government has recognized the industrial sector as an important potential contributor to the country's economic recovery, it has been con- strained by a lack of foreign exchange for the raw materials, spare par,s, and capital goods needed to repair damaged and run-down plants. The IDA credit will help to relieve this lack of funds. The project supported by IDA c<>nsists of two lines of credit to be channeled through the Uganda Development Bank (llDB) and the Uganda Commercial Bank (UCB) to companies needing assistance. Expenditures eligible for financing include replacement of obso 1ete or damaged equipment, spare parts, trans port equ i pmeint, repairs of · existing structures and civil works, and costs of management staff for two years after rehabilitation. The UDB will use most of its $30 million credit line to rehabilitate medium- and large-scale industrial enterprises in the country, Some 25 business firms have been selected for assistance by the government, IDA, and UDB on the basis of their ability to save foreign exchange through producing essential consumer goods and con- struction materials or their own potential to contribute to foreign exchange earnings through the production of essential agricultural supplies. The $5 million to be allocated to the UCB will be channeled to about 50 smaJ~ scale companies engaged mainly in food processing, production of rudimentary farr implements, and maintenance services. The project will assist in stabilizing economic conditions and generating foreign exchange. The IDA credit is for 50 years, including 10 years of grace; it carries no interest but bears a small annual service charge of 0.5% on the undisbursed balances of the credit, and 0.75% on the disbursed balances. NOTE: IDA credits are denominated in SDRs (Special Drawing Rights), which are valued on the basis of a 11 basket 11 of currencies. The U.S. dollar equivalent of the SOR amount of the IDA credit reflects the exchange rates existing at the time of negotiation of the credit.