Announcement of World Bank Helps Finance Third Agricultural Credit Project in Colombia on June 25, 1979

FO,.R ' IMMEDIATE RELEASE . ,. •World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 79/118 June 25, 1979 WORLD BANK HELPS FINANCE THIRD AGRICULTURAL CREDIT PROJECT IN COLOMBIA A World Bank loan of $20 million will help finance an agricultural credit project in Colombia to assist the country's land reform beneficiaries. The Third Agricultural Credit Project will support a four-year supervised agricultural lending program and development of a small number of agro-industrial ventures by farmers' cooperatives. The total cost of the project is estimated at $50 million. Project activities will be concentrated in 12 regions of the country, in which there are high concentrations of beneficiaries of the Colombian Institute for Agrarian Reform (lNCORA) who have economically viable potential investments. • The project will provide supervised credit, including incremental working capital, to about 7,600 farm families who have limited access to credit. It will also assist in the development of small agro-industries and provide technical assistance and training programs for INCORAis field staff and beneficiaries. Project monitoring and evaluation studies wi 11 also be made. The project is designed to increase the productivity, employment, and incomes of the beneficiaries and to expand agricultural production. The net annual foreign exchange savings of the project, at full development, are estimated to be $13.5 million (in 1979 prices). Incremental production of corn, cocoa, and milk is expected to reduce import requirements, while increased rice, panela (a molasses cake), and beef production will result in higher exports. Under the project, farm incomes ~i]l !~c~ease in real terms by 25% to 50%. The project is also expected to gener~tP. annually about 1.5 million man-days of additional labor, equivalent to 6,450 fu11-time jobs, 75% of it to be filled with hired labor and the remainder with currently underutilized family labor. The $20 million loan to INCORA has a term of 17 years, including 4 years of grace, with interest at 7.9% a year. The project was prepared by INCORA with assistance of the Cooperative Program of the Bank and the Food and Agriculture Organization of the United Nations (FAO) • • NOTE: Money figures are expressed in U.S. dollar equivalents. FORM NO. 1121 (5-76) T EC HN I CAL D A T A PROJECT: COUNTRY: TOTAL COST: Third Agricultural Credit Colombia $50 mi 11 ion • BANK FI NANC I NG : $20 mil lion for a term of 17 years, including 4 years of grace, with interest at 7.9% per annum / OTHER FINANCING: lnstituto Colombiano de la Reforma Agraria (INCORA), $24.6 million; Sub-borrowers, $5.4 million IMPLEMENTING ORGANIZATION: lnstituto Colombiano de la Reforma Agraria (INCORA) Centro Administrativo Nacional 44-88-8 2 Avenida El Dorado Telephone: Bogota, D.E., Colombia CABLE: INCORA PROJECT DESCRIPTION: It includes: the provision of a) agricultural credit for about 7,600 farm families, b) credit for up to 60 srnal 1- scale agro-industries, and c) consultant services, training, vehicles, and equipment for techni~al assistance to farmers; and d) the establishment of a monitoring and evaluation unit. • PROCUREMENT: Vehicles required for the project (about $1.6 million) will be procured under international competitive bidding in accordance with Bank guidelines. The project beneficiaries will purchase the items required for the investments through local established commercial channels. Inputs, equipment, machinery, and on-farm civil works will be varied and not suitable for competitive bidding. CONSULTANTS: Twenty-four man-months of consultant services for monitoring and evaluation including the training of INCORA technicians will be financed under the project. ECONOMIC RATE OF KETDRN: ESTIMATED COMPLETION DATE: 38% 1983 - 0 - •