Announcement of Malawi to Restructure its Wood Industries on January 18, 1985

41 FOR IMMEDIATE RELEASE 'World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. BANK NEWS RELEASE NO. 85/21 Contact: Dunstan Wai January 18, 1985 (202) 477-3294 MALAWI TO RESTRUCTURE ITS WOOD INDUSTRIES Malawi is to restructure its wood industries to help it meet domestic demand for wood products and improve the management of its forest resources. The World Bank is supporting the project with a loan of $6.4 million. The newly created Wood Industries Corporation (WICO) will receive technical assistance and equipment to help it restructure sawmills at Mazamba, in the north, and Dedza, in west central Malawi. A mill in the town of Zomba, northeast of Blantyre, will be rehabilitated. The World Bank loan will finance the purchase of urgently needed spare parts and equipment for the company's mills. And training programs will be established for WICO's technical, management, and maintenance staff. The project also includes feasibility studies for new processing facilities, the establishment of a major wood processing complex, and the installation of a sawmill at Mulanje, in the southeast. The project will also finance technical assistance to help develop industrial uses for forest resources, particularly those in the Viphya plateau, in the north. The project is expected to be completed by 1990 at a cost of $8.6 million. The Government of Malawi and WICO will together contribute $2.2 million towards the cost of the project. The World Bank loan is for 20 years, including five year's grace, with a variable interest rate, currently 9.29 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on undisbursed balances and a front-end fee of 0.25 percent on the amount of the loan. NOTE: Money figures are expressed in U.S. dollar equivalents.