Announcement of China to Boost Fertilizer Production and Use with World Bank Support on June 18, 1987

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. BANK NEWS RELEASE NO. 87/87 Contact: P.B. Sison (202) 477-3653 CHINA TO BOOST FERTILIZER PRODUCTION AND USE WITH WORLD BANK SUPPORT WASHINGTON, June 18 -- China is launching a project that will help increase agricultural output by expanding, upgrading and diversifying fertilizer availability. The World Bank is supporting the project with a $97.4 million loan. China is the world's third largest user of chemical fertilizers, yet its level of fertilizer application is only about a third of that in neighboring Japan and Korea. Although China has about 1,900 fertilizer plants, it still must import almost a third of the fertilizer it consumes. The Bank-supported project aims at developing the country's fertilizer sector by improving the efficiency of medium-scale plants through technical renovation and energy conservation; reducing nutrient imbalances in agriculture by building the capacity to produce phosphate fertilizers; and improving institutional efficiency through the introduction of modern economic, financial and operational systems and techniques. To meet these objectives, the project will establish phosphate fertilizer production capacity at a nitrogenous plant in Yunnan Province, convert four nitrogenous fertilizer plants into high-grade fertilizer production facilities that use energy-saving technologies, conduct a study to help introduce improved enterprise management systems, and establish an information management system for the Ministry of Chemical Industry. The project, which will be implemented over five years, complements an earlier fertilizer rehabilitation and energy saving project (approved by the Bank in 1985), which focuses on efficiency improvements in large nitrogen fertilizer plants. In addition to the Bank loan, financing for the project will be provided by domestic loans ($54.2 million), internal funds from fertilizer companies ($32.3 million), and the government ($100,000). The World Bank loan is for 20 years, including five years of grace, with a variable interest rate, currently 7.92 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on the undisbursed balances. Note: Money figures are expressed in U.S. dollar equivalents.  / / !