Announcement of Bank and IDA Financing of Sudan on June 14, 1961

FOR IMM.EDIATE RELEASE .D l\ IN'l~RNA~ONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION I)//) ~: 18 t 8 H ST R EE T, N . W. yVASHINGTON 25, D. C. TELEPHONE: EXECUTIVE 3-6360 ~\, Bank Press Relee.s~'.=-.No. 693 SUBJECT: Bank and IDA financing IDA Press Release No. 5 in SUdan C, ,,, June 11~, 1961 The World Bank a.rid.,the Intemational Development Association (IDA) joined today ~G in ,;m~ available to th~ Republic of the SUdan the equivaient of $32.5 million to help, in financing construction of the Roseires Dam on the. Blue Nile. The Bank is •.. 1 . • . ·~ - (\ making a loan of $19.5 million and the IDA is extending a develop~nt credit of $13 million. C\ • The Federal German Government also µitends to contribute toward the foreign exchange "cost bf the Roseires Dem through a lo~-term loan, equivalent to $19 mil- lion, 1: by the Kreditanstalt fuer Wiedera.uf'bau. It is expected that this loan will be signed shortly. The water stored by the Roseires "-Dam will more than double the supplies avail- 0 ,\ able for irrigation in the SUdan during perio~ of seasonal shortage. It will make it possible to bring nearly 900.,000 acres under irrigation for th'.e first time., and ~•. also to greatly increase yields end. diversify crop~~duction in other areas where '\ watei; supplies are a.t present inadequate. New production 1n the areas affected will ~} ,, make an important contribution to hisher living standards and to increased na.tiona.l income. The World Bank loan is for a term of 25 years, and bears interest at 5·3/4 per • 0 cent per annum, including "the l'fo commission which is allocated. to the Bank's Special ~eserve. Anx>rtization will begin in July 19(>8. D  ' . . v - 2 - \) • The International.Develgpment ~sociation credit is for a term interest-free. ten-year period of gri~ce. It is repayable in foreign ,,exchange, amortization tq begin after a Thus the of fitty years, f.irst payment will be clue in July 1971. There- after, l'/o of the principal amount Will be repayable annually, for,, ten years, and :;::: \\ fr {\ 3% in each of the final thirty years. A service charge of 3/4 of l'/, annually .,oh the amounts withdrawn and outstanding will be made to meet IDA' s administrative costs. - This is the·second credit to be· extended by IDA, and its te:rms are sim:l.'1.ar to, those ;) of the first, a credit of $9 ~llion to Honduras for ro~p. development, announced last month. The sudaµ is an agricultural country, and agricultural products -- <?hiefly -long-·staple ' cotton -- earn_ vi~~ally all its .export .. income. ~e most product;i.ve ~ ' ~ ' - . . . ~ .. . .. ,··, parts of its ctiltivated . land. are the irrigated areas along the Blue and White Mile, most of the remainder being semi-arid and used only for grazing and sub- • sistence farming. The best lmo'Wll of these irrigated areas is that covered by the Gezira Irrigation Scheme, currently being enlarged through the Managil Extension ,, . \\ ' for which the World Ba.nk~made a loan of $15.5 million a year ago. TH:t system under which the irrigation schemes are operated permits ef:f.icient production by compara- tively unskilled labor, a.nd provides a satistactory cash income for the tenants. Expansion of crop production under irrigation has been limited'by the shortage of wa.te~ during the long season of low river flow, lasting from about January 1 to Jt.1ly 15. In November· 1959 an agreement on the .division of the Nile waters was \) reached between, the Sudan and the United Arab Republic. This agreem.er1t (nilich also sets up a mechanism for dealing with claims of other riparian countries) pro- vides for storage of water by a dam at Roseires. · The dam will be built on the Blue Nile at a point some 66 miles downstream )~ • £Tom the Ethiopian border. The concrete central section of the dam, 196 feet in J;ieight and o~er 1,200 yards. long., will be flanked on both sides ,by long earthfill  Q .. - 3 - • ,, embankments·, giving t!::: ,~am an overall le~h of a.bout ten miles: It w:111 create • 0 n a. reservoir with a 0 net storage ca.pa.city Of over 2,700 million cubic meters. The <.7 dam has been so designed that its height can ev~ntuall~ be :i.ncrea.sed by 33 'feet, thus adding 4,6oo 'million cubic meters to the capacity of the reservoir and a.l~o ma.king it possible to generate hydroelectric power a.ta later stage if required. ·construction is expected to take seveni yea.rs, partly because work must be interrupted for four months ea.ch year durini~ the flood season. \ Tenders for c;on- , } (J struction of the da~,. in~ted on an interna.~ional. basis, were received earlier this year. It is expected that the contract, will be a~ded. ver·l slloftly. The work will be carried out under the supervision of the Ministry .of Irrig~tion fu~d Ifydroelect:r;:lc Power ~d of their consult.ants .... __ ·- ~.. ·"· ·- ·~- ~ .. f-'· . ·- - - - · - .• -··-'--· ••. -- Ma.ri.y of'the benefits expected from the ~oseires Da.m 'Will be enjoyed w;Lthout further expenditure on irrigation works. Much of. the stored water will be re- • leased during the dry season for use on the existing Gezira and Managil areas, ma.king it possible to alter the existing pat~ern of crop rotation so that an addi- tional crop can be grown on about 300,000 acres. water will also be supplied for . \\ ,:::-..--:~' 0 pump irrigation of· ?'Jrea;~ totaling abou~ 350,000 acres where irri.ga.tion cannot now be permitted after the month of Ja.nua.ry because of water shortage. It is believed that with ad.equate irrigation, yields in these areas can be increased. by one-fifth or more. supplies from Rose ires will also be used to make good water shortages on " ensting schemes elsewhere. About one-third of the newly available water, however, will be used to bring land under irrigation for the l'irst time; some 6€o,ooo ~res are to be !n-igated by pumping,:,-1 and 210,000 acres, mainly on the fringes of the \ \ ,\J Gezira.-Managil Scheme, by gravity. The necessary ·works and farm g.evelopment will be started in the fourth year of the dam construction period. The financing of these 'Wt>rks, which will require substantial additional investmeI;tt, will have to be at"l,"anged by 1963.  ~· . - 4 - • {( \,, In the past, irrigation in the suaan has been used largely to produce ,,extra long-staple cotton. But with additional water available., other marketable crops could a;l.so be grow. While the dam is under construct;on, therefore, the SUdanese Government will intensify a program ofS.gdcultural research al.re~ commenced to determine which additi~pal crops would give the greatest economic return, and which techniques would be best for producing them. When the water from Roseires' (1, becomes available it is in,~ended to intrqduce these new crops ,:µito the pattern of' production as now practisecl. ~~ Roseires Dam itself, with its associated prel~a.rY ~rks, is expected to cost about $89_ million, inclu~~ more than $56 milUpn iri foreign exchange.· The -GOvernment of the SUdan will meet from its own resources tlie costs not covered by the .f'inan~ihg mentioned· a'!X>ve. The World Bank has now lent a total. of $74 million to the SU.dan. In ad.di- • tion to the loan of $15. 5 million f'or the Managil Extension, already mentioned, it lent $39 million in July 1958 for the development of the SUdan Railways • •  II ,; . . ' :, Supplemental Statement on the INI'ERNATIGN.AL DEVELOPMENI' ASSOCIATION ~• The International Development Association was created by member countries of the World Bank in the fall of 196ol! ,:, \°) IDA now has 45 members and initial subscrip- ' tions equivalent to $864 million. It is an independent legal entity with financial C: resou:rces separate from those of the world Ba.pk. IDA is intended to assist coun- tries which for reasons beyond their control are not able to achieve a satis~ factory rate of economic development on, the basis of their o·wn resources and con- \t,, ventional external financing. The terms-of IDA's financing are not specified in it~ \:charter, which prescribes only that they shall be flexible and shall bear less heavily on the balance of payments of underdeveloped. countries than do- conventional / ·.\ loans. Th~ terms of the credits so far announced, while not necessarily indi- cative of the general pattern of future IDA credits, a.r.e strikingly different from thy terms on which development funds have hitherto been available. • IDA is presently investigating projects situated in countries of Latin America, the Middle East, South Asia and the Far East, as well as in Africa. They include not only projects of the type the World Bank finances, such as road I', development, port facilities and irrigati,on works, but a much broade:rf range, such as industrial estates, municipal improvements and technical training programs. IDA is specifically designed to finance projects which contribute most to the development of the country concerned, whether or not they are directly produc- tive. In determining which projects to finance, IDA will apply the same standards Of project preparation and. executio~ as the Bank does. This will be facilitated by the fact that its affairs and those of the Bank are jointly administered. Mr. Eu.gene R. Black a.s president of the World Bank is ex officio President of IDA, and the officers and staff of the Bank serve in their same capacities in IDA • •