Announcement of Peru’s Upper Mayo Valley to be Developed with World Bank Assistance on December 16, 1982

FOR IMMEDIATE RELEASE • World Bank 1818 H Street, N.W., Washington, 0.C. 20433, U.S.A. •Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 83/27 Contact: Ciro Gamarra December 16, 1982 (202) 477-8034 PERU"S UPPER MAYO VALLEY TO BE DEVELOPED WITH WORLD BANK ASSISTANCE Peru will develop its upper Mayo valley with the assistance of a $30 million loan, the World Bank announced today. The loan, to be drawn from the International Bank for Reconstruction and Development (IBRD), will provide funds for raising farm production in a 120,000-hectare area in northern Peru. The area's main towns are Moyobamba and Rioja. The population in the area has grown rapidly in the last decade with the construction of roads into the eastern foothills of the Andes where the project is located. About 73,000 people now live in the area and these new settlers have made an impact on increasing farm production in this fertile area~ The Alto Mayo rural development project, which will cost about $84 million to complete, should improve incomes and living conditions in the area by expanding • local agricultural production--mostly for rice, fruits, coffee, tea, and oil palm, as well as for grazing--and by providing improved roads, health care, and educational facilities. important feature is the provision of farm credit which will take up An about 40% of the project costs. The International Fund for Agricultural Development, based in Rome, will provide funds for this under an SOR 17.9 million ($19 million) loan. The project area's native Indian communities will receive special attention to safeguard their interests and enable them to share in the project's various benefits. To help spur Peru's agricultural development, the World Bank has made 13 loans to Peru totaling $219 million. The loans have helped provide agricultural credit, farm machinery, and irrigation works. The loan is for 17 years, including four years of grace, with interest at a variable rate linked to the cost of borrowing. The loan also carries an annual commitment charge of 0.75% on undisbursed balances and a front-end fee of 1.5% on th amount of the loan. NOTE~ Money figures are expresse in U.S. dollar amounts • •