Announcement of The World Bank's Social Development and Compensation Fund for Peru on December 20, 1993

FOR IMMEDIATE RELEASE s WorId Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. *Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 94/42 Contact: Antonio Pimenta-Neves Tel: (202) 473-8722 Peru Social Development and Compensation Fund The following is information on a project approved by the World Bank's Board. DATE: December 20, 1993 WORLD BANK GROUP SUPPORT: World Bank loan: $100.0 million. The World Bank loan is for 20 years, including five years of grace, with a variable interest rate, currently 7.43 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: $495.00 million. OTHER PROPOSED FINANCING: Government of Peru: $200.0 million; Inter-American Development Bank: $100.0 million; Beneficiaries: $42.0 million; Other Donors: $53.0 million. IMPLEMENTING AGENCY: Fondo Nacional de Compensacion y Desarrollo (FONCODES). ESTIMATED COMPLETION DATE: 1997 PROJECT DESCRIPTION: The objectives of the Social Development and Compensa- tion Fund Project are to: (a) sustain Peru's poverty alleviation efforts; (b) mitigate the social costs of macro-economic adjustment; and (c) strengthen the institutional capacity of the Fondo Nacional de Compensacion y Desarrollo Social (FONCODES), the social development agency which manages a fund to finance demand-driven, labor-intensive projects focussing on employment generation, education, health, and nutrition programs and supports small-scale enterprises and farmers. The project consists of two components: (a) support to FONCODES' community-based projects ($468.5 million), focussing on health and nutrition and education and (b) institutional development of FONCODES ($26.5 million) which would finance office rehabilitation and renovation, staff training in project management, technical assistance for project appraisal and supervision, community-based project preparation and implementa- tion, and poverty studies.