Announcement of World Bank Approves Eighty Million Dollars Loan to Romania for Irrigation on April 23, 1981

. . FOR IMMEDIATE REt~ASE .. . eWorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 81/73 Apr i 1 2 3 , 1981 WORLD BANK APPROVES $80 MILLION LOAN TO ROMANIA FOR IRRIGATION The World Bank announced today the approval of an $80 mill ion loan to Romania for an irrigation project to be located in the south central and scutheastern regions of the country. The project is expected to increase and stabilize crop produc- tion in a total area of 130,677 hectares (ha) in Caracal and Titu regions, on the Olt and Arges rivers, which are tributaries of the Danube. The Bank loan will help finance irrigation and drainage systems, soil erosion control, reclamation of sandy areas, the construction of four flood retention dams, and the training of streams. Maintenance equipment and farm machinery wi 11 also be provided . • One of the main objectives of Bank lending in Romania is to help alleviate the country's shortage of foreign exchange by providing long-term external capital and by financing projects which wi 11 expand foreign exchange earnings. The irrigation project will substantially increase earnings from grain exports, while benefiting the economy at large by ensuring stable raw material supplies to food processing and marketing channels. Toward the $379.3 million total cost of the project, Romania's Bank for Agriculture and Food Industry and the state budget, in con- junction with foreign commercial banks, are providing $32 mill ion and $256.6 mill ion, respectively. Other sub-borrowers will provide $10.7 mi 11 ion. The World Bank loan is repayable in 15 years, including 3 years of grace, and carries an interest rate of 9.6% per annum. NOTE: Money figures are expressed in U.S: dollar equivalents . • FOAM NO. 1121 (5-76) T EC HN I CA L DA T A PROJECT: COUNTRY: TOTAL COST: Caracal-Titu Irrigation Romania $379.3 mill ion • BANK FINANCING: $80 million for 15 years, including a 3-year grace period, with interest at 9.6% per annum OTHER FINANCING: Bank for Agriculture and Food Industry (Romania), $32 mill ion; Romanian state budget, including foreign commercial banks, $256.6 million; Sub- borrowers, $10.7 million. IMPLEMENTING ORGANIZATION: Ministry of Agriculture and Food Industry Bucharest, Romania. PROJECT DESCRIPTION: The project is expected to increase and stabilize crop production and raise productivity in an area of 130,677 hectares (ha) consisting of two subproiects in C~racal and Titu regions • in so~th central and southeastern Romania, respectively. This will be accomplished through construction of irrigation and drainage systems and related facil iti~s, soil erosion control, sandy area reclamation, construction of four flood reten- tion dams and training of streams. Equipment for operation and maintenance, and farm machinery will also be provided. PROCUREMENT: Construction equipment and materials equivalent in cost to the Bank loan will be procured following international competitive bidding (ICB) procedures in accordance with Bank guidelines. These items include mobile concrete pumps, truck cranes and canal trimming and lining machines. Romanian manufacturers will be allowed a prefer- ence of 15% or the applicable customs duty, whichever is lower. The rema1n1ng equipment and materials, all domestically produced, wlll be procured under Romanian procedures. CONSULTANTS: Romanian personnel will fill all management posts. ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 20% 1986 - 0 - •