Announcement of Mozambique Receives US70 Million Dollars for the Third Poverty Reduction Support Credit on January 25, 2007

Mozambique Receives US$70 million for the Third Poverty Reduction Support Credit (PRSC3) Contacts In Washington: John Donaldson (202) 473 1367 jdonaldson@worldbank.org In Maputo: Rafael Saute (258-21) 482324 rsaute@worldbank.org Gregor Binkert gbinkert@worldbank.org WASHINGTON , January 25, 2007 – The World Bank Board of Executive Directors today approved an International Development Association (IDA) credit* of US$70 million to support the implementation of the Third Poverty Reduction Support Credit (PRSC 3). This PRSC 3 begins a new series of credits whose main objective is to support the implementation of Mozambique ’s Second Action Plan for Reduction of Absolute Poverty (known as PARPA II). This new PRSC series will include three annual operations to be delivered in 2007-09. The credit is designed to be disbursed against the upfront completion of a number of specific reforms agreed upon by the government and the 18 external partners (G18) providing general budget support. “The operation will help the Government implement the PARPA II which focuses on poverty reduction through broad-based growth, particularly in rural areas. It will also support key governance reforms in public financial management and procurement and the improvement of the business environment, ”said Gregor Binkert, the World Bank Task Team Leader of the project. PARPA II is structured around three pillars (Governance, Human Capital, and Economic Development) and is the Government’s five-year operational program. The PRSC series is designed to focus first on key constraints in cross-cutting areas such as public financial management and the business environment. The series then evolves to support decentralization and shared growth. All the prior actions and triggers of the PRSC series support the government’s own monitoring framework and are in line with the donor harmonization for general budget support. The new PRSC series will support: (1) Macroeconomic management by consolidating and deepening institutional reforms. (2) Reforms in the governance area by supporting efforts to enhance public investments and service delivery at the provincial and district level, and by supporting public sector reform. (3) Economic development by improving the business environment, removing constraints and promoting agricultural growth. ### For more information, please visit on the World Bank’s work in sub-Saharan Africa visit: www.worldbank.org/afr For more information on the World Bank’s work in Mozambique visit: www.worldbank.org/mozambique * The credit is provided on standard International Development Association (IDA) terms, with a commitment fee of 0.35 percent, a service charge of 0.75 percent over a 40 year period of maturity which includes a 10-year grace period.