Announcement of Papua New Guinea Oro Smallholder Oil Palm Development Project on June 11, 1992

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.* Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 92/92 Contact: Pastor Sison Tel: (202) 458-0344 PAPUA NEW GUINEA: ORO SMALLHOLDER OIL PALM DEVELOPMENT PROJECT The following is additional information about a project announced in the latest issue of World Bank News. DATE: June 11, 1992 WORLD BANK GROUP SUPPORT: World Bank loan: $27 million. The World Bank loan is for 20 years, including five years of grace, with a variable interest rate, currently 7.73 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.25 percent on the undisbursed balance. TOTAL COST: $36.8 million OTHER FINANCING: Government of Papua New Guinea, $6.4 million; Farmers, $3.4 million IMPLEMENTING AGENCY: Oil Palm Industry Corporation, Department of Agriculture and Livestock ESTIMATED COMPLETION DATE: 2000 PROJECT DESCRIPTION: The objective of the Oro Smallholder Oil Palm Develop- ment Project is to increase agricultural production and exports, providing employment opportunities, generating incomes for poor farmers, maintaining the incomes of existing smallholders established under the previous World Bank- assisted Smallholder Development Project, and protecting the habitat of the endangered, world's largest butterfly species. The project includes: (a) smallholder development, including: establishing new oil palm blocks in two areas of Oro Province; planting about 3,000 hectares of oil palm on the reserve land of existing blocks in the Popondetta area; strengthening the oil palm extension services, including recruitment and training of additional staff, construction and maintenance of houses and office facilities, and provision of vehicles and agricultural equipment; building and maintaining agricultural roads; and building and maintaining social infrastructure, including schools, health posts, and rural police stations; (b) main road improvement, including upgrading and maintaining sections of the national road from Popondetta to Kokoda (59 kilometers); (c) environmental protection, including protecting an endangered species of butterfly in the Popondetta area; (d) institutional strengthening, including strengthening the Department of Agriculture and Livestock's capacity for policy formulation and project preparation in the tree crop subsector through staff recruitment and training, strengthening the Oil Palm Industry Corporation's (OPIC) management capacity, and supporting oil palm research; (e) technical assistance for OPIC; and (f) studies in the tree crop subsector, including the identification and prepara- tion of future tree crop projects.