Announcement of 3.8 Million Dollars Credit to the Republic of Rwanda for an Agricultural on November 8, 1973

• .J • INTERNATIONAL DEVELOPMENT ASSOCIATIOJ\l 1818 H STREET. N.W .. WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 73/82 Subject: $3.8 million credit to the November 8, 1973 Republic of Rwanda for an agri- cultural project The International Development Association, an affiliate of the World Bank, has approved a $3.8 million credit to Rwanda to help finance an agri- cultural project that will develop, over a period of five years, food and cash crops and livestock production through organized cropping and ranching settlement. '!be project area is in the Mutara region, west of the Akagera National Park in the northeast of Rwanda. • With about $60 per capita income, Rwanda is included in the United Nations list of the 25 least developed countries. The economy is predominantly agricultural and agriculture is the principal source of employment, production and exports. Due to the heavy population pressure and the scarcity of arable land, increases in fann production can only be achieved by improving farming methods. The Government has engaged in the establishment of "paysannats," which are Government-organized settlements of farmers, to intensify agricultural production by using improved farming methods. The project being assisted by IDA will comprise the establishment of a "paysannat" of 4,250 plots and 120 group ranches for graziers who are prepared to manage their cattle collectively. Two cash crops -- groundnuts and coffee -- have beem selected for cultivation by the "paysannat." The • Note: Money figures are expressed in US dollar equivalents. /more IDA P.R. No. 73/82 -- Rwanda -- agriculture - 2 - Project will also include establif5hment and operation of a bull-breeding ranch, to support the group ranches. • Infrastructure will be provided, consisting of plot and grazing area layout, road construction, water supply, staff housing and cattle handling facilities. Technical and marketing services will be made available to project participants. The project will also provide for eradication of the tsetse fly from the project area and for a feasibility study of complete tsetse fly eradication from Rwanda. One major benefit to be derived from the project is an increase by about 7% in the estimated annual national beef production of approximately 12,000 tons. Cattle will be improved throuE;h crossing with bulls bred at the bull-breeding ranch. Groundnut production from the project will substitute for about 20% of current edible oil imports. In addition, the project will provide substantial employment opportunities. At full development, about five years after project implementation, farmers are expected to earn annual cash incomes of $120 A.nd graziers about $240, which will be several times their pre~,ent cash incomes. These amounts will be in addition to $180 per year for products ur-ed for the participants' own consumption. The average net annual income of settlers also is expected to increase • to about $60 per CA.pi ta., the national average. In addition, settlers will obtain substantial social benefits, such as security of land tenure, better housing and water supply, D.nd health and education facilities. An autonomous authority named "Office pour la Val·Jrisation Pasto~ale et Agricole du Nutara 11 (OVAPAN) will be established to carry out the project, which is expected to be completed by June JO, 1979. The project was prepared by the Goverment with the assistance of the Food and Agriculture Organization/ ~orld Bank Cooperative Program. The total cost of the project is estimated at $4.3 million including a foreign exchange component of $2 .1 m.i.llion. The IDA credit will amount to $3. 8 nLi.llion. The Goverment will contribute $260,000 and participating graziers will contribute $2L.1J,JOO for veterinary supplies. Out of the IDA credit funds, the Goverment will lend $2.7 million to OVAPAM, while the remainder of $1.1 :million will be used to finance foreign and local staff second.ed to OVAPAH. The IDA credit is being mEi.de to the Republic of Rr/Vanda for a te:..m of 50 years, including 10 years of grace. It will be interest free, but will carry a service charge of 3/4 of 1% to cover IDA's aciJ"n.:.1_nistrative expenses. - 0 - • • November 8, 1973 TECHNICAL DATA PROJECT: Agricultural Development COUNTRY: Republic of Rwanda TOTAL COST: $4. 3 million IDA FINANCING: $3.8 million, 50 years, 10 years of grace, interest free except for 3/4 of 1% service charge to cover IDA's administrative expenses. OTHER FINANCING: Government of Rwanda and partici!)ating graziers. • IMPLEMENTING ORGANIZATION: Office pour la Valorisation Pastorale et Agricole du Mutara (OVAPAM). PROJECT DESCRIPTION: The establishment of a "paysannat" comprising 4,250 plots and about 120 group ranches, including infrastructure consisting of plot and grazing area layout, road construction, water supply, staff housing and cattle handling facilities; technical and marketing services for project participants; the establishment and operation of a bull-breeding ranch; and tsetse fly eradication from the project area and a study of the feasibility of completely eradicating the tsetse fly from Rwanda. PROCUREMENT: Goods would be procured as follows: contracts expected to cost less than $2,000 equivalent would be placed upon the authoriza- tion of the Project Director in accordance with normal Government procedures; contracts expected to cost between $2,000 and $20,000 equivalent would be tendered among local suppliers; contracts estimated to cost $20,000 or more would be awarded after intentational competitive bidding in accordance with IDA guidelines. CONSULTANTS, TECHNICAL ASSISTANCE: To be selected. ESTIMATED COMPLETION DATE: June 30, 1979 • Note: Money figures are expressed in US dollar equivalents. - 0 -