Announcement of Romania Receives World Bank Loans for Livestock and Irrigation on March 22, 1979

FOR IMMEDIATE RELEASE . ' eVVorld Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.•Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 79/58 MARCH 22, 1979 ROMANIA RECEIVES WORLD BANK LOANS FOR LIVESTOCK AND IRRIGATION Agricultural production in Romania is expected to increase substantially as a result of two loans totaling $i45 mill ion approved by the World Bank. A $75-million loan will help finance investments in pig farms and processing facilities throughout the country, and a $70-million loan will help to extend and modernize irrigation and drainage works in areas surrounding the Mostistea and Calmatui rivers, both in southeastern Romania. The World Bank loans to the Bank for Agriculture and Food Industry (BAFI), to be guaranteed by the Socialist Republic of Romania, are for 15 years, including 3 years of grace, with interest at 7% per annum. Livestock Proiect The government's plans for the livestock subsector emphasize the production of pork which acc~unts for half of all meat consumption. The $435.5 million project, supported by the $75 million Bank loan, is a continuation of an earlier pig production and processing project which was assisted by a 1977 World Bank :oan. The second project is expected to result in an annual increment of 200,000 tons in pork production, and the two projects together will support an increase in per capita ~ork consumptlon by about 7% per annum .tween 1975 and 1985 as well as expanding export earnings. The project will finance investments in new fattening farms, new crossbred young-sow production farms, and modernization of pig breeding and fattening units. A line of credit will be provided to individual producers. Existing pig nutrition research facilities will be ex.panded,and slaughterhouse, cold storage, and processing units will be constructed. The project is expected to provide jobs for about 10,000 people. Substantial co-financing from foreign cormiercial banks is at an advanced stage of nego- tiation. Irrigation and Drainage Project Increased agricultural production and the prevention of flood damage are the major benefits expected from two irrigation and drainage systems in southeastern Romania. The $409.2 million project, with a $70-million World Bank component, provides for irrigation and drainage of 158,540 hectares (ha.) at Mostistea and drainage of 66,930 ha. at Calmatui with irrigation of one third of the area. At Mostistea, the existing supply canal from the Danube will be widened and the floating pumping station extended. Four low-pumped storage dams will be built, and seven fixed pumping stations and six repumping stations installed. Surface ·:'.nd ti le drainage and soi 1 erosion control works wi 11 also be carried out. At Ca1matui, the existing floating pumping station will be extended and irrigation works constructed. Provision is being made for surface and subsurface drainage works and reclamation of saline soils. Farm machinery and equipment for the operation and maintenance of both components, will be furnished. Bank Leumi Le-Israel (Switzerland), Zurich, has agreed to participate in the first maturity of the loan . .A Increased crop yields resulting from the project are expected to range from 33% to 400%, ~ d about 2,000 people will benefit directly from preve~t!ar. of flood damage. About 66,000 workers should achieve benefits through increases in wages. Grain exports and self-sufficiency in some other crops are expected to earn and save foreign exchange. NOTE: Money figures are expressed in U.S. dollar equivalents. FORM NO. 1121 (5-76) T ECHN I CAL DA T A PROJECT: COUNTRY: TOTAL COST: Second Livestock Socialist Republic of Romania $4 35. 5 mi 11 Ton • BANK FINANCING: $75 million for 15 years, including 3 years of grace, and an interest rate of 7% per annum OTHER FINANCING: Sub-borrowers' contributions: $125.6 million. Ministry of Agriculture research grant: $1.5 million. Bank for Agriculture and Food Industry: $135 mill ion. Syndicated loan from private foreign conmercial banks: $100 million (To be arranged. Currently at an advanced state of negotiations). IMPLEMENTING ORGANIZATION: Bank for Agriculture and Food Industry (BAFI), Strada Smirdan No. 3, Bucharest, Romania. (Cable address: AGROBANK, Bucharest, Romania; Telex: 11622 AGBANC R.) PROCUREMENT ORGANIZATION: Romanian Foreign Trade Company for Agriculture (ROMAGRIMEX), Str. Alex. Sahia 16, Bucharest, Romania. PROJECT DESCRIPTION: Agricultural credit subprojects to be financed under the loan will include investments to be undertaken in 1979 and 1980 for: 27 new fattening farms; 25 new crossbred young-sow production farms; modernization of 37 pig breeding and fattening units; a line of credit to agricultural cooperative • members and private individuals; provision of facilities to augment existing pig nutriti research, and construction of slaughterhouse, cold storage, and processing facilities, including modernization of existing facilities to improve health and hygiene standards and provision of new facilities. PROCUREMENT: Construction of project facilities will be carried out by Romanian construction enterprises. List of items estimated to cost $75 mill ion will be procured by ROMAGRIMEX under international competitive ~idding in accordance with Bank guidelines. These items include reinforcing steel for concrete ($12.7 million},structural steel ($9.5 million), steel piping ($2.2 million), electric cables ($14.8 million), asbestos sheets ($4.5 million), and slaughterhouse and meat processing equipment ($31.3 million). Romanian manufacturers will be accorded a preference of 15% of the c. i.f. price. or the applicable customs duty (\iJhichever is lowed. It is anticipated that foreign suppliers will be awarded contracts for about $7.8 million, mainly for slaughterhouse and meat processing equipment not manufactured in Romania. ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 30% 1984 - 0 - • FORM NO. 'I 121 (5-76) T ECHN I CAL D A T A • PROJECT: COUNTRY: TOTAL COST: Mostistea and Calmatui Irrigation and Drainage Socialist Republic of Romania $409.2 million BANK FINANCING: $70 mill ion for 15 years, including 3 yearf of grace, and an interest rate of 7% per annum OTHER FINANCING: State budget: $266.7 mill ion. Bank for Agriculture and Food Industry: $42.5 million. Sub-borrowers' contributions: $30 million. IMPLEMENTING ORGANIZATIONS: Ministry of Agriculture and Food Industry, Bulevardul Republ icii, 24 Bucharest, Romania. National Water Council, Bulevardul Republicii, 24 Bucharest, Romania. PROJECT DESCRIPTION: Mostistea: Irrigation and drainage of 158,540 ha. gross (155,871 ha. net) through: widening of existing supply canal from the Danube including extension of an existing floating pumping station; construction • of four low-pumped storage dams on Mostistea River; installation of seven fixed pumping stations and six repumping stations for feeding the new irrigation systems; surface drain- age for 82,683 ha.; tile drainage for 4,238 ha.; soil erosion control works to protect an area of 13,344 ha. Calmatui: Drainage of 66,930 ha. gross (64,527 ha. net) and irrigation of about one third of this area through: extension of existing floating pumping station; irrigation works to serve 23,980 ha. gross (23,000 ha. net); surface drainage works to serve 66,930 ha.; subsurface drainage works for 14,455 ha.; reclamation of saline soils covering 9,200 ha. Farm machinery and equipment for operation and maintenance of both project components. PROCUREMENT: Construction of irrigation works will be carried out by Romanian construction enterprises. Equipment and materials equivalent in cost to the Bank loan ($70 million) will be procured under international competitive bidding in accordance with Bank guidelines. Romanian manufacturers will be allowed a preference of 15% of the c. i .f. price or the applicable customs duty (whichever is lower). It is expected that :oreign suppliers will win contracts estimated to cost about $25 mill ion for most of the construction equipment. Inquiries on procurement should be directed to ROMAGRIMEX -- lntreprinderea de stat Pemtrau Comert Exterior, Str. Alex. Sahia 16, Bucharest, Romania -- the Romanian trade company responsible for procurement . • ECONOMIC RATE OF RETURN: ESTIMATED COMPLET10N DATE: 15% 1985 - 0 -