Announcement of Colombia Improves Rural-Road Network on January 18, 1990

FOR IMMEDIATF RELUASI s World Bank .818 H Street, N.W., Washington, D.C. 20433, U.S.A.*Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 90/44 Contact: Ciro Gamarra (202) 473-8721 COLOMBIA IMPROVES RURAL-ROAD NETWORK January 18, 1990 -- Colombia will maintain, improve or construct a total of 7,000 kilometers of rural roads under a project assisted by a $55 million World Bank loan. The project is expected to stimulate economic growth in rural areas and reduce poverty. The project is Colombia's third rural-roads development effort to be supported by the World Bank. The World Bank loan will support the investment and maintenance program of the National Agency for Feeder Roads (FNCV) for the 1990-1993 period. The program includes maintenance of 4,400 kilometers of roads, improvement of 1,650 kilometers, and construction of 950 kilometers. Spare parts for road-maintenance equipment, consulting services to design and supervise civil works, training activities, technical assistance and studies are also part of the project. The total cost of the project, which will be carried out over four years, is estimated at $157.1 million. Financing for the project will also be provided by the government ($90.2 million) and by external sources ($11.9 million). The project will directly benefit the rural population by improving their access to markets and social services and lowering transport costs. The project will result in a decentralized roads sector, with FNCV, regional and local authorities becoming more responsive to rural needs. The World Bank has played a major role in the development of Colombia's transport system. Since 1950, the Bank has approved about $968 million for 20 transport projects in the South American nation. The Bank approved a $33 million loan in 1981 and a $62 million loan in 1986, both to FNCV in support of Colombia's rural-roads development efforts. The World Bank loan to FNCV, with the guarantee of the Republic of Colombia, is for 17 years, including a five-year grace period. It carries a variable interest rate, currently 7.75 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on the undisbursed balance. NOTE: Money figures are expressed in U.S. dollar equivalents.