Mauritania - Urban and Rural Development Project

Document of I L E Cu0 P Y The World Bank FOR OFFICIAL USE ONLY Report No. P-2451a-MAU REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE GOVERNMENT OF THE ISLAMIC REPUBLIC OF MAURITANIA FOR AN URBAN AND RURAL DEVELOPMENT PROJECT March 15, 1979 This documat bas a esictd dharbuetl ad may be ued by reci_et emay in the perforace of their officil duti. Its It te My adt .trwle be dlseliuuud withot Warld Bik a_toritioun.  CURRENCY EQUIVALENT Currency Unit = Ouguiya (UM) US$1.00 UM 45 UM 1 million . US$22,222. WEIGHTS AND MEASURES EQUIVALENTS 1 metric ton (m ton) = 2,205 pounds (lb) 1 kilometer (km) 2 5 0.62 mile (mi) 1 square kilometer (km ) = 0.386 square mile (sq mi) ABBREVIATIONS AND ACRONYMS BMDC - Banque Mauritanienne pour le Developpement et le Commerce CEPI - Centre d'Etude et de Promotion Industrielle CFAT - Centre de Formation de l'Artisanat du Tapis OMA - Office Mauritanien de l'Artisanat OMAT - Office Mauritanien de l'Artisanat et du Tourisme SONADER - Societe Nationale pour le Developpement Rural VIS - Village Irrigation Scheme FISCAL YEAR January 1 - December 31  FOR OFFICIAL USE ONLY ISLAMIC REPUBLIC OF MAURITANIA URBAN AND RURAL DEVELOPMENT FUND CREDIT AND PROJECT SUMMARY Borrower: Islamic Republic of Mauritania Beneficiaries: Banque Mauritanienne pour le Developpement et le Commerce (BMDC); Societe Nationale pour le Developpe- ment Rural (SONADER); Office Mauritanien de l'Artisanat et du Tourisme (OMAT) Amount: US$8.0 million equivalent Terms: Standard On-lending Part of the funds for the industrial component (US$2.1 Arrangements: million) will be on-lent by the Government to BMDC for re-lending to small- and medium-scale industrial enter- prises; the terms of this on-lending will correspond to the aggregate of the amortization schedules for BMDC's sub-loans (none of which will exceed 15 years), with interest at 7 percent per annum. All foreign exchange risks will be borne by the Government, but BMDC's in- dustrial sub-borrowers will pay Government a 1 percent fee per annum. The balance of Credit funds for the industrial component (US$0.4 million) will be passed on to BMDC as a grant. US$5.4 million of Credit funds will be passed on as grants to SONADER (US$3.5 million) and OMAT (US$1.9 million), partly to set up permanent revolving funds for loans to farmers and artisans, re- spectively, and partly to finance the provision of technical assistance to these ultimate beneficiaries. US$0.1 million will be used to finance two studies. Project The proposed project includes three separate components Description: to provide financial and technical assistance: (i) to the industrial sector for development of small- and medium-scale enterprises promising substantially lower investment costs per job than currently; (ii) to the artisan sector for rehabilitating and expanding the production of knotted carpets by decentralizing produc- tion and improving training of weavers; and (iii) to the agricultural sector for development of 30 new irri- gated schemes under village cooperatives, including an adequate credit scheme. The project also provides con- sulting services to study the feasibility of establish- ing a gypsum plaster brick industry to replace expensive imported cement with locally made bricks, and of creating a new industrial zone in the capital city of Nouakchott. 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.  - ii - In the short term, the proposed project would make a small, but important contribution to relieving rural ani urban poverty through creation of additional employment and income opportunities, and through increased food production. The long-term result would be easier and more sustained growth of the three sectors through sec- toral and institutional reforms to be introduced. The main risks facing the project stem from the fact that, apart from SONADER and agriculture, none of the project institutions or sectors has ever received direct Bank Group assistance, and this first intervention will therefore not be easy. However, technical assistance will be provided to all implementing institutions as necessary to achieve project objectives; and each insti- tution will be responsible for a particular sub-component whose success would be independent of performance under the rest of the project. Project Cost: Total project costs (net of taxes) are estimated at US$8.9 million equivalent, of which US$6.8 million in foreign costs (about 76 percent). The following is a summary table of cost estimates: (Taxes) Local Foreign Total