Niger - Industrial Development Project

Document of The World Bank FILE COPY FOR OFFICIAL USE ONLY Report No. P-3131-NIR REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF NIGER FOR AN INDUSTRIAL DEVELOPMENT PROJECT March 17, 1982 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.  CURRENCY EQUIVALES Currency Unit CFAF US$1 = CFAF 270 ABllREVIATIONS AfDB African Development Bank BCEAO Banque Centrale des Etats de l'Afrique de l'Ouest BDRN Banque de Developpement de la Republique du Niger CCCE Caisse Centrale de Cooperation Economique CEAO Communaute Economique de I'Afrique de l'Ouest DEG Deutsche Entwickluags Gesellschaft ECOWAS Economic Comunity of West African States KfW Kreditanstalt fur Wiederaufbau OPEN Office de Pronotion de 1'Enterprise Nigerienne STB Societe Tunisieime de Banque UMOA Union Monetaire 1uest Africaine UNDP United Nations Development Programme UNIDO United Nations International Development Organization FISCAL YEAR October 1 - September 30  FOR OFFICIAL USE ONLY REPUBLIC OF NIGER INDUSTRIAL DEVELOPMENT PROJECT Credit and Project Summary Borrower: Republic of Niger Beneficiary: Banque de Developpement de la Republique du Niger (BDRN), Centre des Metiers d'Art du Niger (CMAN), Office de Promotion de l-Entreprise Nigerienne (OPEN) Amount: Special Drawing Rights 14 million (US$16 million) Terms: Standard Relending Terms: Government would onlend the proceeds of the credit as follows: (i) a US$12 million line of credit to BDRN for a term of 18 years including 3 years of grace. The on-lending from government to BDRN would be at Central Bank conditions prevailing at time of nego- tiations, i.e. 10.5 percent for most loans (including a foreign exchange risk fee of 0.5 percent). The portion of the line of credit earmarked for small-scale enter- prises and labor intensive subloans would be passed on to BDRN at BCEAO's preferential rate of 8 percent (including a foreign exchange risk fee of 0.5 percent). A commitment fee of 0.5 percent on the undisbursed balance would apply to BDRN (Section 3.01 (b) - (e) draft Credit Agreement and Schedule to Project Agree- ment). BDRN would onlend the funds at a rate of at least 3 percentage points above its costs of funds. The terms of the subloans would vary from three to 15 years with grace periods of up to three years; (ii) US$0.8 million as a grant to BDRN for technical assistance and in-house training; (iii) US$1.88 million as a grant to OPEN to address operating constraints, help establish a technical assistance unit and construct a new office building; (iv) US$1.2 million to CMAN for technical assistance and training facilities. An amount of US$0.12 million would remain unallocated. Project Description: The project would support the diversification of the economy beyond agriculture and mining, and would consist of: (i) a US$12 million line of credit to BDRN to finance productive small and medium scale investments; (ii) technical assistance to strengthen BDRN, OPEN and CMAN, three institutions dealing with the financing, promotion and training of Nigerien entrepreneurs; and modest capital assistance to OPEN. Project Risks: There are no significant project risks. 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 - Estimated Cost: Project costs are estimated at US$19.5 million, ex- cluding US$1.8 million for taxes to be paid by BDRN, entrepreneurs and other local sources. The proposed IDA credit would cover 82 percent of total costs net of taxes. Local Foreign Total ------US$ thousand------ BDRN Line of credit 4,900 11,600 16,500 Technical assistance 280 800 1,080 OPEN General support 75 600 675 Construction unit 90 750 840 Office building 140 530 670 CMAN Common services 60 300 360 Training 180 240 420 Technical assistance 135 525 660 Unallocated - 120 120 Total 5,860 15,465 21,325 Total net of taxes 4,033 15,465 19,498 Financing Plan: Local Foreign Total %