Announcement of Nicaragua’s Efforts to Rehabilitate Industrial Sector to be Assisted by World Bank on June 29, 1981

FOR IMMEDIATE RELEASE •World Bank 18'18 H StrPet. ,~.'v\/., Washington, D.C. 2043 3, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 81/127 June 29, 1981 NICARAGUA'S EFFORTS TO REHAB I LI TATE INDUSTRIAL SECTOR TO BE ASSISTED BY WORLD BANK Nicaragua's efforts to rehabilitate its industrial sector will be assisted by the World Bank. A Bank loan of $30 million will help finance an industrial rehabilitation credit project aimed at assisting industrial and mining enterprises which suffered damage in the 1979 civil war. The $43 mill ion project will provide funds mostly to firms with export potential, whose rehabilitation would result in significant foreign exchange earnings, such as processed sugar, refined gold and silver, chemicals, plastic, metal, and wood products. 0f the lean proceeds, $27.5 million wi 11 be allocated to provide credit mainly to export oriented enterprises. These funds wil 1 be used to finance the provision of raw materials, parts, machinery replacements, balancing equipment and related civil works and services enabling industrial and mining enterprises in the public and private sectors to restore lost pro- ductive capacity. The beneficiary of the loan will be the Special Development Fund (FED), which would channel rehabilitation sub loans to industrial firms using five intermediary institutions. The remaining $2.5 mill ion will help provide technical assistance for strengthening the capability of the FED, financial intermediaries, state corporations, and private industrialists. The project is expected to result in the recovery of a substantial number of jobs lost due to the decline in industrial production following the civi 1 war; it is estimated that about 5,000 jobs wi 11 be restored by the project. The impact on Nicaragua's balance of payments should be substantial. The $30 mil lion World Bank loan to the Republic of Nicaragua is for a term of 20 years, including 5 years of grace, at 9.6% interest per annum. In December 1979 the World Bank and the International Development Associa- tion lent $30 million to Nicaragua to assist an agricultural and industrial rehabilitation project . • NOTE: Money figures are expressed in UoS. dollqr equivalents.