Announcement of IDA Support of Basic Education and Institutional Development in Nicaragua on March 20, 1995

FO IMEIA RELEASE The World Bank 1818 H Street, N.W., Washington, D.C., 20433, USA News Release No. IDA95/4 ILAC Contact: Ciro Gamarra, tel. 202 473-8721 IDA SUPPORTS BASIC EDUCATION AND INSTITUTIONAL DEVELOPMENT IN NICARAGUA WASHINGTON, March 20, 1995 -- Nicaragua's efforts to improve its basic education and reform and modernize its public institutions wviII be assisted by two credits from the International Development Association (IDA), the World Bank's concessionary lending affiliate.' The first IDA credit, of SDR 23.1 million (US$34 million), will help finance a project which aims to improve the efficiency and quality of basic education in Nicaragua, benefiting almost 3 million children over four years. The second credit, of SDR 15.7 million (US$23 million), xilll support the institutional restructuring and modemization of up to 20 ministries and decentralized agencies over a five-year period, as well as civil service and financial management refon, plus investments in information technology. The Basic Education project, with an estimated total cost of $39.3 million, focuses on pre- primary and primary public education where the vast majority of students come from poor segments of the population. The project also supports decentralization of the school system at the primary and secondary levels to help improve quality and efficiency at both levels and mobilize additional financial resources for the sector The objectives of the project will be achieved by reducing the repetition and dropout rates and enhancing student academic achievement; ensuring sustainable financing to meet recurrent and capital cost needs; and proNiding suitable schools for a satisfactory learning environment. The project includes assistance to decentralize administration of 191 public secondary schools and 4,700 primary schools; distribution of about 2 million re-usable textbooks and 3.9 million workbooks; expansion of pre-primary education from 34,000 to about 92,000 children per year; and rehabilitation of about 1,000 dilapidated primar\ school classrooms. ID-1 credits are denominated in SDRs (Special Drawing Rights), which are valued on the basis of a "basket" of currencies. The US dollar equivalent of the SDR amount reflects the exchange rates existing at the time of the legolialions ofthe redit. Archives/Records Center, H B1-001 ( 1) The government of Nicaragua will provide about $5.3 million to cover the balance of project costs. The Institutional Development project wvill be a major source of support of the public sector reform and modernization effort put forward by the government. Its objectives are the improvement in service delivery by those public institutions restructured and modernized under the program and associated increases in public savings. The project xill finance consultant services to assist the Committee for the Reform of the Public Administration (CERAP) which was created in October 1994 to oversee the public sector modernization program. The consultant services wvill assist CERAP to undertake diagnostic studies of the mission, structure, and functions of institutions nominated to enter the program as well as support implementation of the institutional restructuring process. The project \will also finance three critically important cross-cutting components (civil service reform, financial management reform, and investments in information technology) necessary to sustain improved service delivery in the restructured institutions. The IDA credit, to be disbursed over five years, vill finance the cost of consultant services, training, information technology, and reform management requirements. Total project costs are estimated at $33.5 million. The balance of costs will be provided by the government ($2.3 million), and other international donors ($8.2 million). Both IDA credits were made to the Republic of Nicaragua for 40 years, including 10 years of grace; they carry no interest but have an annual charge of 0.75 percent on the disbursed balances and a variable charge of up to 0.5 percent (currently zero percent) on the undisbursed balances. -0- Nicaragua/HDA 2