Sudan - Roseires Irrigation Project

R E S T R I C T E D E COPY R e p o r t N o. P-253 P (IDA) 2 This report was prepared for use within the Bank and the Association. It may not be published nor may it be quoted as representing their views. The Bank and the Association accept no responsibility for the accuracy or completeness of the contents of the report. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATIONS OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS CONCERNING A PROPOSED LOAN FROM THE BANK AND CONCERNING A PROPOSED DEVELOPMENT CREDIT FROM THE ASSOCIATION TO THE REPUBLIC OF THE SUDAN ROSEIRES IRRIGATION PROJECT June 7, 1961  INTERNATIONAL BANK FOR RECONSTRUCTION AIM DEVELOPivENT INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMNENDATIONS OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS CONCERNING A PROPOSED LOAIN FROM TIHE BANK AND CONCERNING A DEVELOPMENT CREDIT FROM THE ASSOCIATION TO THE REPUBLIC OF THE SUDAN ROSEIRES IRRIGATION PROJECT 1. I submit herewith the following report and recommendations on a proposed loan from the Bank in an amount in various currencies equivalent to $19.5 million and a proposed development credit from the Association in an amount in various currencies equivalent to $13.0 million, to the Republic of the Sudan, to finance part of the foreign exchange cost of the Roseires Irrigation Project. PART I - HISTORICAL 2. In 1958 the Sudan Government requested the Bankts assistance in financing the foreign exchange cost of the Managil Irrigation scheme and of the proposed storage dam at Roseires. The Bank agreed to study the technical and economic aspects of the projects with the reservation, however, that it would not consider participation in the financing of these projects until an adequate agreement was reached on the use of Nile waters. In October 1958 a Bank mission visited the Sudan. Its report was circulated to the Executive Directors on April 20, 1959 (R59-34). The Mission reported favorably on both projects, recommended priority for the completion of the Managil Irrigation Project and indicated the need for further investigation and study of the Roseires Irrigation Project. An agreement on the Nile waters between the Sudan and the United Arab Republic was reached in November 1959. This agree- ment makes provision for dealing with claims of other riparian states. In March and May 1960, Bank missions visited the Sudan for further examination of the projects. On June 17, 1960, the Bank made a $15.5 million loan to Sudan to meet part of the foreign exchange cost of the Managil Irrigation Project. 3. During my visit to the Sudan in May 1960, I agreed witlh the request of the Government that the Bank explore whether capital-exporting members of the Bank might be interested in participating in the financing of the project. I then informed the Government that in view of Sudants development needs and its balance of payments position, I would give sympathetic consideration to providing from the Association a portion of the required foreign exchange for this project.  - 2 - 4. In response to the Bank's approach to several member countries, the Government of the Republic of West Germany advised in December 1960 that it would be prepared to take part (through the Kreditanstalt fur Wiederaufbau) in the financing of the project to the extent of