Bolivia - Second Beni Livestock Development Project

RESTRICTED FILE COPY Report No. P-758 This report was prepare,d for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO TIHE REPUBLIC OF BOLIVIA FOR AN INTERIM LIVESTOCK PROJECT December 4, 1969  REPORT AND RECOMMEDfATION OF THE PRESIDENT TO TBE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE REPUBLIC OF BOLIVIA FCR AN INTERIM LIVESTOCK PROJECT 1. I submit the following report and recommendation on a proposed development credit in various currencies equivalent to US$1.4 million to the Republic of Bolivia for an interim livestock project. PART I - HISTORICAL 2. On May 26, 1967, IDA made a credit of $2 million to Bolivia for livestock development in the Department of Beni. The proceeds of that credit were relent by the Government to Banco Agricola de Bolivia to support a lending program to ranchers and provide them with technical services. The project has been launched successfully. Demand for loans by ranchers, and their readiness to cooperate writh specialized technicians in the preparation of ranch development plans, resulted in a much faster commitment of the proceeds of the credit than originally expected. By July 1969, it became clear that the credit proceeds allocated to long- term loans would be fully committed at the end of September. 3. In August 1969, the Bolivian Government applied to IDA for a credit of $6.4 mi lion to help finance the second stage of its livestock development program. As it iras clear that the preparation and appraisal of a new and much larger project would take several months, the question arose how to preserve during this period the momentum of livestock develop- ment lending and the efficient technical organization set up under the 1967 credit. Consequently, the Government requested IDA to consider an interim project which would continue for one year from October 1, 1969 the lending program to the Beni ranchers on the terms and conditions adopted in 1967. 4. After a brief project appraisal in the field, negotiation of the proposed credit took place in WJashington in the middle of October with His Excellency Julio Sanjines Goytia, Bolivian Ambassador to the United States, and Ing. Alberto Valdes Loma, General Manager of Banco Agricola. 5. The status, as of October 31, 1969, of previous IDA credits and the only previous Bank loan is as follows: Credit/ Loan Amount (US$ Million) Number Year Borrower Purpose Bank IDA Undisbursed 61 1964 Republic of Bolivia Power - 10.0 o.6 62 1964 Republic of Bolivia Power - 5.0 - 107 1967 Republic of Bolivia Livestock - 2.0 0.7 148 1969 Republic of Bolivia Power - 7.4 7.4 635 1969 Compania Yacibol Bogoc Gas Transportadores (YABOG) Pipeline 23.2 - 23.2  - 2 - Total ncw held by Bank and mDA 23.2 24.4 Total undisbursed 23.2 8.7 31.9 The loan made on July 22, 1969 for the gas pipeline project is not yet effective. The date set in the Loan Agreement for fulfillment of effective- ness conditions has recently been postponed to February 3, 1970, to give time for the parties concerned with the project to study the effects of the recent nationalization of the assets of Bolivian Gulf Cil Company, and determine whether, and if so, in what form, it would be possible to proceed with the project. 6. A mission organized under the UI'ESCO/IBRD cooperative program visited Bolivia in late August and early September 1969 to help the Govern- ment prepare an education project for consideration by IDA. However, in view of Bolivia's current serious fiscal problems, which make it difficult for the Government to contribute to the cost of building and operating new schools, this education project is currently in abeyance. 7. FolloTing a United Nations Development Programme financed Transport Study, discussions have been held between Bolivia and the Bank with a view to rehabilitating the country's railways and relieving the burden they place on the budget. The Government has informed the Bank of policies it intends to pursue towTard this end, and the Bank is assisting the Government in preparing a new request to the United Nations Develop- ment Programme for technical assistance designed to help implement those policies. PART II - DESCRIPTION OF THE PROPOSED DEVELOPMENT CREDIT 8. Borrower: Republic of Bolivia Beneficiary: Banco Agricola de Bolivia Amount: In various currencies equivalent to US$1.4 million. Purpose: To help finance the continuation of a credit program for livestock producers in the Beni Department. Amortization: In 50 years, including 10-year period of grace, through semi-annual installments of 1/2 of 1% from May 15, 1980 through November 15, 1989 and of l1