Announcement of World Bank Approves First Emergency Assistance to Nicaragua on November 15, 1979

1 . , . FOR. IMM~DfATE . RELEASE , •World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE November 15, 1979 WORLD BANK APPROVES FIRST EMERGENCY ASSlSTANCE TO NICARAGUA The World Bank has agreed to restructure three projects currently being implemented in Nicaragua to meet urgent reconstruction needs and provide emergency financing. This move is the Bank's first response to the government's request for emergency assistance to support the economic recovery of the country. The World Bank is preparing substantial additional emergency assistance. Under the agreement, the Bank-assisted projects have been revised in scope, two being reduced because of the extreme scarcity of local financial resources. The Bank's total financial commitments remain unchanged, although in the two reduced projects the Bank's share of financing will increase. For each project, a revolving fund will be established to facilitate quick disbursement of the Bank funds. • The loans for which the Bank has approved changes are a $22 million loan of April 22, 1977 for the Ninth Power Project; a $10. 1 million loan of January 30, 1978 for the Third Managua Supply Project; and a $11 million loan of May 4, 1976 for the Second Education Project. The total undisbursed balances of these Bank loans are $35.9 million. The Ninth Power Project includes the construction of the Nicaraguan portion of a transmission line designed to connect the Nicaraguan with the Costa Rican power systems. Completion of the Managua transmission system and distribu- tion facilities in low-income urban areas are also included. As a part of the revision of this project, the Bank will finance the full costs of the reconstruc- tion of installation damaged during the civil war and the replenishment of the lnstituto Nicaraguense the Energia (INE) 1 s inventory of distribution equipment. The amount still available for disbursement on this project is $16.2 million. The Third Managua Water Supply loan provides financing for expanding the Managua water supply system. Among the changes proposed for this loan, the Bank will finance the purchase of vehicles and radio equipment destroyed during the war, and will increase local cost financing from $1.8 million to $3. 1 to include household connection costs in poor areas of Managua. At present, $9.1 million of this loan remains undisbursed. The Second Education Project is designed to support Nicaragua's education system and training strategy. Some of the funds of the loan will be reallocated to about 22 secondary schools, constructed under the first Bank education project, to • finance the replacement of furniture and equipment destroyed during the war. The undisbursed portion of the Bank loan is $10.6 million. NOTE: Money figures are expressed in U.S. dollar equivalents.