Announcement of World Bank Lends One Hundred Nine Million US Dollars to Continue Tropical Agricultural Development in Mexico on March 6, 1986

FOR IMMEDIATE RELEASE INTERNATIONAL MONETARY FUND JOINT LIBRARY World Bank MAR 14 1986 INTERNATIONAL BANK FOR 1N1£RNATIONAL flAN!( -- )NS!RUCTIOK ,II.ND • 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.!lEi:8~1:!lfl~i>Wcffl9'p.~MENT av~a~ p .... WASHIN\,10\t'"'D. · BANK NEWS RELEASE 86/57 Contact: Ciro Gamarra March 6, 1986 (202) 477-5320 WORLD BANK LENDS $109 MILLION TO CONTINUE TROPICAL AGRICULTURAL DEVELOPMENT IN MEXICO Mexico will continue its efforts to develop the agricultural potential of its tropical lowlands with the help of a World Bank loan of $109 million. The project is expected to have a significant impact on alleviating poverty in these areas. This Second Tropical Agricultural Project (PRODERITH II), whose total cost is $217 million, will improve agricultural support services and strengthen the institutions responsible for agriculture in the region. It is intended to ensure effective coordination of development programs in the Gulf Coast and the southeast region, where Mexico's tropical lands are located. The project will benefit 40,000 families in an area of 850,000 hectares (ha), of which about 143,000 ha of new land will be brought into rainfed crop production, and will intensify crop and livestock production and productivity on existing areas which currently suffer drainage problems. It will comprise eight areas. Four will expand the pilot projects under the first phase of the program (PRODERITH I) - Panuco, Vera Cruz, Tabasco and Yucatan. One will reestablish a project planned for Tesechoacan, in the state of Vera Cruz. The remaining areas will be new pilot projects to be selected from a list to be studied in the first two years of project implementation. The Bank's loan will help finance the construction of about 1,500 km of farm service roads, another 700 km of drains and supporting structures such as culverts, fords and bridges. It will also support general civil works including storage, silos, repair and maintenance facilities for heavy equipment, and office complexes for field staff. The new project will draw heavily on the experience of the first phase of the program, which was supported by the Bank with a $56 million loan and resulted in an increase of the crop area by about 40,000 ha, significantly raising the production of basic crops and settling over 950 farmer groups in the pilot areas. The $109 million loan to Nacional Financiera, S.N.C. (NAFINSA) will have a term of 15 years, including three years of grace, with a variable interest rate, currently 8.5 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on undisbursed balances. NOTE: Money figures are expressed in u.s. dollar equivalents.