Announcement of Romania Receives Sixty Million US Dollars for Irrigation and Agricultural Development on April 29, 1976

eWorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 76/42 APRIL 29, 19 76 ROMANIA RECEIVES $60 MILLION FOR IRRIGATION & AGRICULTURAL DEVELOP~ENT The World Bank has approved a $60 mill ion loan to Romania to help finance the Rasova-Vederoasa Irrigation and Agricultural Development Project. The project is part of Romania's irrigation investment program designed to increase and stabilize agricultural production in a country where half of the population still lives in rural areas. Some 6,000 members of cooperatives and their families are expected to more than double their incomes through the project which will provide an area southeast of the Dan- • ube with a large irrigation system and with related agricultural develop- ment. The project will provide irrigation to about 65,400 hectares (ha.) of land, presently rainfed; establish eleven dairy units consist:ng of 830 cows each and two beef fattening units to produce about 2,000 tons of meat annually; provide a grain silo and a feedmill; and provide water supply to 17 rural communities with a population of about 15,000. The project is located in a relatively less developed region of the country where production under rainfed agriculture fluctuates consid- erably from year to year. The project is expected to increase the gross value farm output to a relatively stable $32,5 million annually~ an in- crease of 280%. Net foreign exchange earnings as a result of the project are estimated at $10 million annually. The Bank loan is made to the Bank for Agriculture and Food In- dustry of Romania, with the guarantee of the Socialist Republic of Romania. The loan wi 11 have a term of 20 years, including 5 years of grace, with interest at 8t% per annum. To date, Bank loans to Romania have totaled • $46 0 mi 11 i on . Note: Moneyfi gures are expressed in U.S. do 11 ar equi va 1ents. Form No. 1121 (9-75) PROJECT: COUNTRY: T ECHNI CAL DATA Rasova-Vederoasa Irrigation and Agricultural Development • Romania TOTAL COST: $141.3 million BANK FINANCING: $60 million, for 20 years, including 5 years of grace at 8!% interest per annum. OTHER FINANCING: The Romanian Government, the Bank for Agriculture and Food Industry (BAFI) and cooperatives. LMPLEMENTING ORGANIZATION: The Bank for Agriculture and Food Industry (SAFI), Strada Smirdan 3, Bucharest, Romania. PROJECT DESCRIPTION: It includes: a) a 65,400-ha. system of irrigation works including on-farm sprinkler and furrow equipment, land • leveling and soi1 erosion control works; b) farm machinery implements and establishment of a vineyard (450 ha.) and an orchard (350 ha.); c) a livestock component, which would include 11 dairy units, 2 beef fattening units, 1 feed mill and a 44,000-ton grain siio; and d) a rural water supply component. PROCUREMENT: The Bank loan will finance equipment and materials required for the project. All items to be financed under the Bank loan wi 11 be subject to international competitive bidding under the Bank's Guidelines for Procurement. For purposes of bid comparison, Romanian suppliers wi11 be accorded a pre- ference of 15% or applicable customs duty, whichever is lower. ECONOMIC RATE OF RETURN: 17.4% • ESTIMATED COMPLETION DATE: 1980 - 0 -