Zambia - Coffee Production Project

Document of FILE COPY The World Bank -VOR OFFICIAL USE ONLY Report No. P-239la-ZA REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF ZAMBIA FOR A COFFEE PRODUCTION PROJECT November 30, 1978 This document lhs a restdrted dItributI u nd may be sd by recipents only In the performance of their ofical dts. Its conents may not othenrise be disclosed without World BDank authorbation.  CURRENCY EQUIVALENTS Currency unit = Kwacha (K) US$1.00 = K 0.83 K 1.00 = US$1.20 WEIGHTS AND MEASURES 1 meter (m) = 3.28 feet (ft) 1 kilometer (km) 2 - 0.62 miles (mi) 1 square kilometer (km ) = 0.386 square miles (sq mi) 1 metric ton (m ton) = 2,204 pounds (lb) GLOSSARY OF ABBREVIATIONS CBC - Consumer Buying Corporation INDECO - Industrial Development Corporation LINTCO - Cotton Parastatal Mi - Ministry of Industry MLA - Ministry of Lands and Agriculture NIEC - National Import and Export Corporation OSZ - Overseas Services Zambia, Ltd. RDC - Rural Development Corporation RUCOM - Rucom Industries, Ltd. ZIMCO - Zambia Industrial and Mining Corporation ZAMHORT - Zambia Horticultural Parastatal FISCAL YEAR Government of Zambia - January 1 - December 31 RUCOM - April 1 - March 31  FOR OFFICIAL USE ONLY ZAMBIA COFFEE PRODUCTION PROJECT CREDIT AND PROJECT SUMMARY Borrower : Republic of Zambia Beneficiary : RUCOM Industries, Ltd. Amount : US$6.0 million Terms : Standard Relending Terms : US$4.5 million would be relent to RUCOM for a term of 20 years, including five years grace at an interest rate of not less than 10 percent per annum. Project Description : The proposed project would develop coffee production through: (a) rehabilitating and developing Ngoli and Kateshi coffee estates to 450 ha producing, at full development, about 800 tons of clean coffee plus about 2,000 tons of maize; (b) rehabilitating and developing smallholder coffee production in the Northern and Northwestern Provinces and (c) strengthen- ing the national coffee research institutions. The project would save for the country about US$2.2 million per annum in coffee import substitution and earn about US$0.2 million per annum in maize exports. It would provide annual employment for about 960 persons. The risks include firstly, a slower than anticipated rate of implementation which could result if the required technical assistance were not obtained on schedule. However, arrangements have already been initiated for the early recruitment of suitable key staff. Secondly, there is uncertainty concerning attainment of projected coffee production. However, the targets have been realistically estimated well below the technical yield potential. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  Estimated Costs: US$ Million Foreign as a Item Local Foreign Total % of Total A. Estate Coffee, Production and Processing 2.65 2.53 5.18 49 B. Smallholder Coffee Development 0.45 0.33 0.78 42 C. Coffee Research 0.28 0.16 0.44 36 D. Physical Contingencies 0.36 0.33 0.69 48 E. Price Contingencies 0.68 0.50 1.18 42 Total Project Cost 4.42 3.85 8.27 47 Total Project Cost (3.72) (3.85) (7.57) 51 (Net of Taxes and Duties) US$ Million Local Foreign Total % of Total Financing Plan: IDA 2.15 3.85 6.00 79 Republic of Zambia 0.90 - 0.90 12 Project Generated Funds 1/ 0.70 - 0.70 9 TOTAL 3.75 3.85 7.60 100 Estimated Disbursements: Bank/FY 1979 1980 1981 1982 1983 1984 --------------