Announcement of Eleven Million Two Hundred Thousand US Dollars Loan to Uruguay for Fourth Livestock Development Project on April 27, 1972

• INTERNATIONAL BANK FOR RECONSTRuc1·10N AND DEVELOPMENT 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 72/23 Subject: $11. 2 million loan to Uruguay for April 27, 1972 fourth livestock development project The World Bank has approved a loan of $ll.2 million to finance the foreign exchange oosts of a fourth livestock project in Uruguay, the total cost of which is $24.3 million. The project will help to provide ranchers and fanners with financial and technical assistance under the Government's on-going livestock development program. present loan will bring the World Bank I s lending for livestoch: in Uruguay to The $41.2 million. The Bank's association with livestock in Uruguay began in 1950 when it advised the Government on a pilot pasture improvemait scheme which eventually led to the first livestock loan in 19.59. The results of this and subsequent projects have been impressive. The new technology in pasture management has already been applied to about 2.9 million acres, and has resulted in a significant rise in cattle production. A recent survey of representative ranches under the World Bank-assisted third livestock project indicated that beef output increased from about 62 pounds per acre on unimproved • natural pastures to an average of oone 200 pounds per acre on improved pastures • side, Beef exports have increased by one-third between 1968 and 1970. On the industrial 15 meat packing and processing plants were modernized in the 1969-70 period. As in previous Bank loans, the project will support on-ranch development activities, seed production and processing, contractors for ranch infrastructure work and technical services to ranchers and farmers and the meat packing industry. A new feature in this project is assistance in pig production for domestic ~nsumption and the introduction of dairy beef for export. There will also be financing for purchases of breeding heifers and retention of heifers normally sold for slaughter. About 3,600 ranchers and farmers (ranging from holdings of over 101 000 acres to those with less than 250 acres) will participate in the project. Project funds will be lent through the Livestock Fund of th3 Central Bank to local participating commercial banks, including the state-owned Bank of the Republic, for on-lending to individual sub-borrowers. Repayments, in Uruguayan pesos, on these sub- loans will be adjusted through a system of indexing based on the price increases of beef and wool to compensate for inflation in Uruguay. It is expected that loan funds will be fully committed in about a year. While the World Bank will finance about 46% of project costs, the remaining .54% of local oosts will be financed by: the Government 7%; the Central Bank 13%; participating commercial banks 18% and the sub-borrowers 16%. The Bank loan is being made to the Republic of Uruguay for a tenn of 14 years, including a four-year grace period., at an interest rate or 7!% per annum. - 0 -  • April 20, 1972 TECHNICAL DATA PROJECT: Fourth livestock development COUNTRY: Republic of Uruguay TOTAL COST: Estimated at .$24. 3 million • BANK FINANCING: $11.2 million loan, 14 years, 4 y~rs of grace, 7~% interest per annum. OTHER FINANCING: Intemal sources, including the Government, Central Bank of Uruguay, private and parastatal commercial banks, participa·ting • ranchers and farmers. IMPLEMENTING ORGANIZATION: Honorary Livestock Commission, Ministry of Agriuclture and Livestock (Plan Agropecuario of the Ministrio de Agricultura y Ganaderia) Nontevideo, Uruguay. PROJECT DESCRIPTION: There will be some 3,600 ranch development loans made through participating commercial banks to project ranchers and farmers; incremental working capital loans to participating farmers and ranchers; short-term loans to importers of rock phosphate, fertilizer and pasture seeds to be used in carrying out the ranch development plans; loans to contractors working on ranch infrastructure, and loans to farmers and seed processors for pasture seed machinery. Technical services and related goods will be provided to support the credit program, local training and the improvement of the meat processing industries. PROCUREHENT: Bulk procuremant of pas·ture seeds and fertilizers, equipment for technical services, and machinery for seed producers and contractors will be made on the basis of the Bank's Guidelines for international competitive bidding. Internat.i·onal bidding for rock phosphate for local grinding and direct application would be restricted to those sourcP-s agronondcally tested under Uruguayan conditions at the time of bidding. Individual purchases made by f~rmers of fencing, farm machinery, building materials and other goods will be m1de locally. An ·adequate selection of imported goods are available in t:he local market. ESTIMATED COMPLETION DATE: End of 1973. - 0 - •