Mexico - On-Farm and Minor Irrigation Networks Improvement Project

Z-, ,5 I/ C) L-? Doc_=t of The World Bank FOR FMCJAL USE ONLY Repot No. P-6149-NE MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN AN AMOUNT EQUIVALENT TO US$200 MILLION TO NACIONAL FINANCIERA S.N.C. WITH THE GUARANTEE OF TRE UNITED NMEXCAN STATES FOR AN ON-FARM AND MINOR IRRIGATION NETWORKS IMPROVEMENT PROJECT JANUARY 24, 1994 MICROGRAPHICS Report No: P- 6149 ME Type: MOP This document has a restricted ditribution and nu . w^ v i wsiy in w e penornmce o0 their official dudes. Its contents may not otherwise be dsdosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit = Mexican New Peso (N$) US$1 N$3. 10 N$1,000,00 = US$322,581 (December 1993) Note: All US$ values in this report should be understood as US$ equivalents. FISCAL YEAR January I - December 31 WEIGHTS AND MEASURES 1 meter (m) = 3.28 feet (ft) 1 kilometer (Iam) = 0.62 mile (mi) I hectare (ha)= 10,000 in2 = 2.47 acres I square kilometer (kI2) = 100 ha 1 metric ton (m ton) = 2,205 pounds 1 liter per second (Ips) = 0.26 gallons per seconid (gps) ABBREVIATIONS CNA National Water Conunission FAO Food and Agriculture Organization FIRA Trust Fund for Agriculturc sof the Bank of Mexico) ICB International Competitive Bidding ID Irrigation District IDSP Irrigation and Drainage Sector Project (Loan 3419-M-S) IMTA Mexican Water Technology Institute IU Irrigation Unit LCB Local Competitive Bidding NAFIN National Finance Institution, S.N.C. NAFTA North American Free Trade Agreement O&M Operation and Maintenance SHCP Ministry of the Treasury WUO Water User Organization  FOR oMCJ4L USE ONLY MEXCO ON-FARM AND MINOR IRRIGATION NETWORKS IWROVEMENT PROJECT LOAN AND PROJECT SUMMARY Borrower: Nacional Financiera, S.N.C. (NAFN Guaranto.: United Mexican States Execting Ageney: Comisi6n Nacional del Agua (CNA) Beneficiaries: Irrigation farmers (over 40,000) in 14 Irrigation Districts (IDs) among nine states, covering about 400,000 ha. Additionally, some 52,000 people will benefit from the provision of new jobs The project components related to technology actions will benefit the entire area of participating IDs (1.5 million ha). Amount: US$200.0 million equivalent Terms: Repayment in 15 years, including three years of grace at standard variable rate. Financing Plan: Local Forein Total b/ - ~US$ Million- IBRD 66.0 134.0 200.0 Federal Government 136.9 0.4 137.2 Rural Credit and Rediscount 111.5 34.6 146.2 Private Sector a/ 65.9 19.5 85.4 Total b/ 380.3 188.5 568.8 a/ Farmers and private banks b/ Includes taxes and duties Economic Rate of Return: The ERR for the project is estimated to be in excess of 19%. Rates of return for investments for 10 sample subprojects range between 13% and 26%. To be eligible for inclusion in the project, subprojects must show an ERR of at least 12%. Staff Appraial Report: Report No. 12280-ME, dated January 24, 1994 Map: IBRD No. 25140 This document has a restricted distribudon and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be discloed without World Bank authorization.  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE IBRI) TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO NACIONAL FINANCIERA, S.N.C. FOR AN ON-FARM AND MINOR IRRMGATION NETWORKS IMPROVEMENT PROJECT 1. 1 submit for your approval the following memorandum and reconmmendation on a proposed loan to Nacional Financiera, S.N.C. (NAFIN) with the guarantee of the United Mexican States for the equivalent of US$200.0 million to help finance a project for on-farm and minor irrigation networks improvement. The proposed loan would be repayable over 15 years, including five years of grace, at the Bank's standard variable interest rate. The National Water Commission (Comision Nacional del Agua, CNA) would be the executing agency. 2. Background. Irrigated agriculture is very important in Mexico. It covers 5.2 million hectares (ha), anJ accounts for 30% of all cultivated land, ovei 50% of the total value of agricultural production, and 65% of agricultural exports. A total of 3.2 million ha is organized under 78 Irrigation Districts (IDs), and the remaining 1.8 million irrigated hectares is under more than 27,000 Irrigation Units (lUs). Cropping intensities (repetition of annual crops in the same area) in IDs are only 1. i to 1.2 on average, and due to past agricultural incentives and policies, about 75 % of the irrigated area is cultivated with relatively low-value grains and oilseeds. Production, especially in the second cropping season, is limited by the scarcity of water. Only 35-40% of irrigation water actually goes to the crops due to water conveyance losses and waste in distribution, and on-farm applications average 65-70% due to inadequate minor distribution networks, incomplete on-farm irrigation and mninor networks, poor water management, lack of incentives for individual farmers to save water, and in some cases, low water prices. Water losses stem partly from the traditional reliance on unlined ninor network and on-fann gravity systems; another contributing factor has been the low level of expenditure for operation and maintenance, especially during the 1982-90 economic crisis. In addition, subsidized energy rates have led to the intensive use of groundwater in IlUs, endangering the long-term sustainability of aquifers by lowering water pressure and water levels. Salinity and water- logging, in various degrees of severity, affect about 7% (450,000 ha) of the irrigated area. 3. A rapid expansion of irrigation occurred during 1960-80, when over 2.6 milliob ha of irrigated agricultural land were developed. Further expansion of the irrigated area is technically challenging, expensive, and in some cases, of doubtful economic feasibility due to the difficulty of tapping more groundwater on a sustainable basis and of developing new surface water resources. The most economic strategy to increase production from irrigated land is through the completion and improvement of existing systems, where gains in production can come from improved water management and infrastructure, increased cropping intensity, and the conversion of low-value cropping patterns to higher-value ones. The on-going Irrigation and Drainage Sector Project (IDSP, Loan 3419-ME, approved in December 1991) supports investments to complete and rehabilitate or modernize existing major off-farm systems within IDs. It also establishes targets for expenditure and cost recovery for operations and maintenance, and supports the transfer of management responsibility for 21 major IDs (two-thirds of the total ID area) from the CNA to water user organizations (WUOs). This project is complementary to the IDSP, addressing the completion or improvement of the minor off-farm and on-farm systems, neither of which is supported by the IDSP. 4. The Government's continuing priority is to liberalize the agricultural sector and to promote private investment in it-a process that should be strengthened under the North American Free Trade Agreement (NAFTA). This priority is having, and will contime to have, a significant impact on irrgated agriculture. Policies and subsidies encouraging the growing of staple grains are being eliminated, forcing producers to become more competitive and to diversify their crops. The new  -2 - Agra,ian and Water Laws (November 1991 and December 1992) provide a legal framework that supports private sector participation in irrigation investments. A Government policy letter was issued in support of the project which spells out subsector policies, the priority of the project, and assurances of adequate annual budget allocation. With NAFrA, there will be an expanded market for higher value crops, such as vegetables, fruits and nuts, and the current trend to diversification and intensification of irrigated production will accelerate. With the gradual reduction of subsidies for electricity between 1989 and 1992 (at the rate of 3% per month, although this was reduced to 0.5% in 1993, and was stopped altogether on October 5, 1993), the electric fees for pmunping inicreased from 18 % to 55% of the long-run marginal cost, resulting in many energy-intensive pumping systems becoming uneconomic. As a result, it is possible that the total irrigated area in Mexico, especially in lUs (over two-thirds of which are fed by groundwater), will decrease gradually but become more economically viable and environmentally sustainable. 5. Management in 21 IDs is being dramatically changed through the transfer, with Bank (IDSP) support, of management functions to WUOs. This helps to resolve the chronic problem of deferred maintenance and creates a better environment for private investment. Establishing bulk volumetric allocation and water delivery in those IDs is also an IDSP target. The new Water Law has created the legal framework for incentives to save water and the transfer of water rights. Further steps in this direction is being addressed by the Government, in the context of this project, through the formulation of supplementary policy, regulatory, and administrative changes. To facilitate the implementation of these changes, some modifications in the design and operation of minor irrigation networks are also required, including the establishment of efficient, dependable, and flexible water supplies, volumetric water rights, and volumetric allocation of water to farmers. 6. Project Objectives. The proposed project fits within the Bank strategy of increasing the efficiency of the agricultral sector in Mexico through promoting both economically and financially viable private sector investments in agriculture, and the overall efficiency of the sector. The strategy includes a limited "public good" role for Government. The project's main objective is to assist irrigation farmers in transferred IDs complete the transfer process, consolidate existing irrigation investments through direct user participation in decision-making and investment, move to diversified agricultural production, and increase their efficiency in the use of land and water resources. Specific project objectives are to: (a) reduce the loss and waste of irrigation water; (b) promote decentralization and private investment in irrigation; (c) increase cropping intensities and yields; and (d) increase crop diversification into higher value crops. 7. Project Description. The three major components are: (a) Tecbnological Support, Communications, and Traning (US$39.6 milolon total cost). This would assist farmers and their WUOs develop and implement improvements in mnior network and on-farn irrigation systems. Investments would be made in: training technical staff (from WUOs, CNA's Irrigation and Drainage Engineering Field Offices, private banks, FIRA, technical assistance consultants, and others); field surveys and studies to support the implementation of on-farm and minor network improvements; adaptive research for water management; technical assistance to WUOs; and equipment and material for training. (b) Minor Network Improvements (US$259.5 millon). This component comprises mainly field sL-veys, engineering works, small irrigation and drainage networks, water measurment and control structures, access roads, electrical distibution systems, regulating works and equipment. The component is designed to help farmers and their WUOs to improve off-farm minor irrigation and drainage networks related to command areas of between 80 and 500 ha. The completion or improvement of  - 3 - such works will allow farmers to save water and to develop more frequent, flexible, and dependable irrigation schedules; together, these actions would increase productivity, and permit diversification into higher value crops or intensified cropping. The investment cost of this component will be shared equally by farmers and the Government. Financing will be channelled through CNA, which will be responsible for recovering the farmers' 50% share of capital costs through an addition > and specific surcharge on the water fees (which are paid by all irrigated farmers and _ollected by WUOs.) (c) On-fa Improvements (US$269.6 million). This component mainly comprises land leveling, on-farm distribution and drainage systems, control and measurement devices, internal regulating tanks, and pressurized irrigation systems. These improvements would be entirely financed by fatmers through cash from savings (10%), labor contributions (10%), and money borrowed from the rural credit system (80%). 8. Project Cost and Financing. Total project cost is estimated at US$568.8 million. On-farm improvements will be mostly financed by US$224.6 million from rural credit, farmers' savings and contributions in kind, and loans from private banks (average proportion: farmers' cash and kind 207, rural credit rediscount system 64%, private banks 16%). Minor network (off-farms improvements will be financed through a combination of Bank and government funds channelled through CNA on a 50% cost-sharing basis with WUOs; 50% of such funds to capital cost investnents will be recovered through water fees. On-farm improvements will be done at full cost by farmers, using material procured by CNA and thei sold to farmers. Given the project's high reliance on WUO's for subproject design, execution and operation, only those that are self-sufficient in operations and maintenance (O&M) expenditures will participate in the project. The technological support, comumnications and training component, due to its public good nature, would be financed by government grants. To promote the smooth start-up of project implementation, retroactive financing of up to US$20 million is recommended for key project expenditures incurred after June 21, 1993 (e.g., for feasibility studies, field surveys, engineering services, construction designs, and the first batch of machinery and construction materials for the subprojects to be initiated in 1994). Schedule A reflects the estimated project costs; Schedule B shows the amounts and methods of procurement and disbursement, as well as the disbursement schedule; Schedule C shows the processing time table and the last five completed subsector loans to Mexico; and Schedule D reflects the current status of Bank Group Operations in Mexico. 9. Project Implemenion. The implementing agency will be the National Water Commission (CNA). The Mexican Institute of Water Technology (IMTA), under CNA supervision, will be responsible for implementing sub-components related to adaptive research, communications, and training. In order to coordinate, supervise, and monitor project implementation, CNA would establish a small project unit within the General Sub-Directorate of Infrastructure. Operating Regulations have been designed and agreed upon to guide project implementation and monitoring. The minor network and on-farm improvements components will be planned and implemented through "subprojects" which will encompass entire transferred modules (3,000 to 18,000 ha) in IDs. Feasibility studies for these subprojects will be prepared under CNA supervision in coordination with the WUOs. Each subproject will have its own financing, cost recovery, and implementation scheme, consistent with the project's operating regulations. Under the technological support, communications and training component, CNA will also prepare and supervise field surveys, monitoring of drainage and salinity, and environmental check lists. Performance and impact monitoring indicators were developed during appraisal, and will be maintained in project management systems, and reviewed in Bank/Government annual and mid-tvrm reviews.  -4 - 10. Project Sustanabillty. This projer: is expected to have a positive effect on sustainable irrigated agriculture and on the consolidation of the private sector's role in the agricultural sector. Under the project, the new regulatory and administrative reforms related to water and land use will create an environment conducive to private investnents and to the more efficient use of land and water resources. In addition, the project will introduce priority-setting mechanisms for public infucture cost sharing between the Govermnent and the private sector, as well fo- improved water use and better drainage of irrigated land. 11. Lemons learned fhm previous Bank involvement. During the past 25 years, Mexico has received 19 Bank loans for the irrigation and drainage sub-sector, amounting to about US$1.4 billion, These projects, excluding IDSP, contributed to the creation of about 500,000 ha of irrigated land and to rehabilitation of an additional 900,000 ha in central and northern Mexico. 12. The five main lessons learned from thece operations, including the on-going IDSP, have been reflected and incorporated in the design of this project. These are the need for: (a) training in modern irrigation .ethods and technology; (b) early preparation of a manual for minor hydraulic structes; (c) ensuring substantial farmer participation through improved communications; (d) improvement of field monitoring of yields, water table movement, salinity levels, irrigation schedules, and water distribution efficiency; and (e) strengthening the capacity for subproject preparation (notably through feasibility studies and construction designs). 13. Rationale for Bank involvement. Bank involvement will support the reorientation of the irrigation sub-sector away from centralized management toward greater private sector control and investment, and away from dependence on the subsidized provision of inputs and prices toward the use of technologies and crops appropriate to market conditions. Both shifts are central to the Bank's country assistance strategy (CAS) of promoting rational and sustainable agricultural resource utilization (the most recent CAS Board discussion took place on June 3, 1993). Bank participation will help ensure that sub-sector policies are consistent within themselves and in relation to the broader agricultural strategy. It will also help the Government make further progress in the following desirable but difficult areas: (a) adjustment to the new economic environment that will follow NAFTA; (b) decentralization; (c) privatization; and (d) improved efficiency of resource use. Bank involvement is also important as this project is a direct complement to the investment and institutional changes taking place under ll)SP. The proposed project will benefit about 20% of the area transferred to users under IDSP. The remaining transferred area will require similar on-farm and minor network development, but whether this requires Bank support is an issue that should be examined later, in the light of project implementation and other operational considerations. 14. Actions Agreed. Project identification, design and preparation have required of the Government significant up-front action related to institutional and legal-regulatory changes. During preparation, several studies were carried out by CNA regarding key legal, regulatory, and administrative issues, and a mnmber of decisions were taken to create a better environment for private investments in irrigation. As a result, new provisions were developed under the new Water Law; priorities were set to speed up the creation of the Water Committees and District Regulations; implementing regulations for the new Water Law was put into effect by January 12, 1994; and a small project unit was created within the CNA Directorate of Infrastructure. 15. During negotiations, agreement was reached on: (a) participating IDs; (b) prepatation of construction designs under agreed terms of reference; (c) schedules to prepare feasibility studies and construction designs; (d) indicators to measure project implementation and impact; (e) maintenance within CNA of a PU with structure, func.ions, staff satisfactory to the Bank; (f) preparation and use * the 'Minor Irrigation Structures Design Manual,; (g) reporting schedules, semi-annual and annual ,.Aews; (h) the scheduling of a project mid-term review no later than October 31, 1997; (i) CNA  -5- providing tinely information to allow the Bank to monitor its annual budget allocations for the project and the Government providing the Bank with evidence of the actual release of sufficient funds to CNA; 0) project accounts and audits, in accordance with procedure; acceptable to the Bank; (k) adjustments of the regulations of the participating IDs, and of the statutes of the WUOs in these IDs, in accordance with the requirements of the Water Law; (I) use of standard legal agreements for (i) design commlitments and (ii) project implementation and cost recovery between the WUOs and CNA; (m) the signing before June, 1996, of all the Implementation and Cost Recovery Agreements for the participating WUOs; (n) Government giving evidence of budget funds release before March 31 of each year; and (o) Government ensuring that adequate credit facilities for projects with long maturation periods would be available to the on-farm financing of the project. 16. Conditions of Board Presentation were: (a) Congressional approval of a 1994 budget allocation for the project of not less than US$27.6 million equivalent; (b) CNA submission to the Bank of draft feasibility studies for all modules larger than 10,000 ha in the second group of subprojects; (c) CNA presentation to the Bank of a copy of the implementing regulations for the Water Law; and (d) receipt of a satisfactory signed Policy Letter. Conditions of Loan Effectiveness are: (a) establishment of a project monitoring system in the CNA's project unit; (b) NAFIN entering into contractual arrangements, satisfactory to the Bank, with the Government and CNA for the transfer of the loan proceeds; (c) signing of a contract between CNA and a specialized firm, satisfactory to the Bank, for inventory control of construction materials and machinery; (d) delivery to the Bank of construction designs for all subprojects included in the first group of modules; (e) issuance by all participating IDs using surface water of their regulations; (f) signing of a contractual arrangement between CNA and IMTA for implementation by IMTA of its parts of the project; and (g) presentation of a satisfactory draft 'Minor Irrigation Structures Design Manual." Conditions of Disbursement are: no disbursement will be made for (a) construction and maintenance machinery after June 30, 1998, and (b) construction materials after June 30, 1999. 17. Project Benefits. The "core" project area wiUl cover over 400,000 ha and will directly benefit 42,000 farmers in the 14 IDs that have been rehabilitated and transferred to users under the IDSP. Expected benefits are an increase in the value of production from irrigated agriculture, greater returns on public and private investment in irrigation, water and energy savings, improved management of groundwater resources, reduction of salinity and water-logging risks, and the generation of employment. The project will also help farmers in participating IDs make the necessary transition to new cropping patterns and practices. From farm models of ten sample subprojects, the ERR is estimated at 19%. No subproject with an ERR below 12% would be accepted in the implementation portfolio. 18. Although on-farm and minor network improvements activities will be implemented only in a core area, wider areas would also benefit from the technological support, communications and training component. This component will benefit also over 1.5 million ha in the 14 participating IDs. The expected project impact on poverty will be indirect. The project is expected to generate about 52,000 new jobs through incremental harvested land (150,000 ha) and diversification into high value crops (50,000 ha) like fruits and vegetables, which are labor intensive. 19. Enviromental Aspects. The project has been rated "B." It will not fince any new irrigation system nor any increased exploitation of groundwater, there therefore will be no direct negative environmental in'pact. It will include investments for environmental monitoring. The project will also reduce risks of waterlogging and salinity through the development of more efficient water distribution and drainage systems, and by providing incentives to save water. Reduced water- logging would also help the control of water-borne diseases.  - 6- 20. Project Risb. There are three principal risks involved in the implementation of the project. One relates to the provision of adequate and timely government counterpart funds. This risk will be addressed, through: (a) monitoring of CNA's annual budget reviews, and (b) the Government's Policy Letter ensuring priority to the project and its adequate annual budget allocation. A second risk telates to the timely availability, for each subproject, of feasibility studies, field surveys, detailed designs, and up-front agreements with the beneficiaries for implementation and cost-sharing. The timely availability and delivery of construction materials and machinery to WUOs is also critical. These risks will be addressed by: (a) CNA having already completed the preparation of all subprojects to be included in the first year of project implementation before effectiveness, and thereafter ensuring subprojects are prepared one year in advance of need; and (b) ensuring reliable planning, monitoring and supes-+%ion of procurement, pooling and distribution of materials and equipment. A third risk relates to the farmers' willingness to invest in on-farn improvements by borrowing money from private bavks, and the availability of credit from banks. This will be addressed by an active extension program (using analytical results of farm models), technical assistance, demonstration plots, and training for farmers and local banks' staff. 21. Recommendation I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank and recommend that the Executive Directors approve it. Lewis T. Preston President Attachments Washington, D.C. January 24, 1994  -7- Schedule A MEXICO ON-FARM AND MINOR iRRGATION NETWORKS MROVEMENT PROJECT Estimated Project Costs and Financing Plan f (US$ million) PROJECT COSTS Project Components LocalW Forekn Total A. Teabal Support, Communications and 2S.3 12.1 37.4 Traing - Pesibility Studies 2.1 0.8 2.8 - Training Program 1.8 3.2 5.0 - Communicauions 1.4 2.1 3.5 - Field Monitoring and Soil Surveys 10.6 1.3 11.9 - Consltants and ixernal Technical 1.6 2.8 4.5 Assistaco - Adaptive Research 7.7 1.9 9.6 B. Minor Network Improvements 142.1 83.2 2253 - Constuction Materials and Equipment 28.5 34.2 62.8 - Machinery 9.9 44.5 54.4 - Surveys, Engineering Services and Designs 13.7 3.9 17.6 - Civil Works 88.3 0.0 88.3 - Invantory Control 1.6 0.6 2.2 C. On-farm Imp ovements 171.4 67.6 238.9 - Construction Materials 17.0 20.4 37.3 - On-trm Works 107.2 0.0 107.2 - Pessurized Equipment 47.2 47.2 94.4 Tota Baseline Cots 338.7 162.9 S01.6 Physical Contingencies 5.0 10.S 1S.6 Price Condngencies 36.6 15.0 51.6 To Project Costs 380.3 188.S 568.8 FINANCING PLAN L:oal Foreign Tota IBRD 66.0 134.0 200.0 Federal Government 136.9 0.4 137.2 Rural Credit Rediscount 111.5 34.6 146.2 Private Sector (Farmers and Prit Banks) 65.9 19.5 85.4 Total 380.3 188.S S68.8 gI Totals may not add up due to rounding. / Including duties and taxes of US$20.6 million and recurrent cost of US$15.8 million.  - 8- Schedule B Page 1 of 2 MEXICO ON-FARM AND MINOR IRRIGATION NETWORKS IMPROVEMENT PROJECT Pocurement Angements (US$ million) Comm ICB I LCD a/ Shopping hi Other I NBF r/ Total Wor!k8 A. Off-fam Civil Woks - - - - 98.2 98.2 L. On-tam Civi Wossm - -A/ - 231.6 231.6 C. Fied Surveys, Engieering Services, - 1.6 9.7 11.3 DriUlg and Topographic Serimces (1.5) (8.8) (10.3) Goods D. Construction Materals 94.0 23.5 - - 117.5 (84.6) (21.2) (107.8) L. Construction Machiney and 66.1 - - - 66.1 Equipmen (59.5) (59.5) F. Labortory and Electronic 1.3 0.5 0.5 - - 2.3 Equipment (1.2) (0.5) (0.4) (2.1) 3. Vebiles - - - - 0.7 0.7 Swvices and C _nultn it. Suprvison of Wors - - - 5.5 - 5.5 (5.0) - (5.0) 1. Consulting, Training, - - 19.0 0.8 19.8 Communications and (17.3) - (17.3) Technical Assistance ot J. Recurnt Costs - - 15.8 15.8 Totd 161.4 25.6 10.2 24.5 347.1 568.8 (145.3) (23.2) (9.2) (22.3) (200.0) N.D Figures in parenthesis are amounts, including contingencies expected to be financed by the Bank. 11 Bank financing excludes taMes. hi Shoppiag wil includo Itnational and local (with at leat three price quotations). g/ Non-Dank fnancing. (Includes rul credit, CNA incromental recurrent costs, private fiancing, forcm account, taxes and recurrent costs.) Inludesupraesurized rrigation equipmen. 5/ Includes supervision of works.  -9- Schedlde B Page 2 of 2 MEXICO ON-FARM AND MINOR IRRIGATION NETWORKS IMPROVEENT PROJECT Intal Alloaion of Loan Proceeds Amblt of L Atllocated Percet of Expenditure Cateplr (Ul# ittion) to be Financed Ai 1 Works 10.0 90% 2 Consulting services for supervision of 4.7 100X works 3 Construction materials 100.0 90% 4 Construction and maintenance machinery 50.0 90X 5 Laboratory and electronic equipment 2.3 90% 6 Technical assistance and training 15.0 100% 7. Unallocated 18.0 Total 200.0 - 3V Excluding taxes. Estmted World Bank DisbursemeWt (US $ Mifon) Bank Financial Year 1995 1996 1997 1998 1999 2 _ Annual 35 S/ 40 40 40 30 15 Cumulative 35 75 115 155 185 200 a/ A special account would be opened in the Central Bank with an initial deposit of up to US$14 million equivalent. Retroactive financing of up to USS20 million equivalent is proposed for expenditures incurred after June 21, 1993.  - 10- Schedule C MEXICO ON-FARM AND MINOR IRRIGATION NETWORKS IMPROVEMENT PROJECT Timetable of Key Project Processing Events (a) Time taken to prepare: 11 months (b) Prepared by: CNA and consultants with assistance of Bank-FAO/CP missions (c) First Bank mission: August, 1992 (d) Appraisal mission departure: June 21, 1993 (e) Negotiations: November, 1993 (f) Planned date of Effectiveness: June, 1994 (g) List of relevant PCRs and PPARs: Loan No. Project PCR Date Report No. 1643-ME Small-Scale Infrastnre Project May, 1988 7253 2100-ME Bajo Bravo/Bajo San Juan Second Irrigation Project December, 1988 7578 1706-ME Rio Fuerte/lRio Sinaloa Irrigation Project June, 1993 N/A' 2191-ME San Fernando Agricultural Development Project December, 1992 11419 1858-ME Apatzingan Irrigation Project June, 1993 11979 a/ Unpublished as of January 24, 1994.  - ;1 - Schedule D Page I of 3 STATUS OF BANK GROUP OPERATIONS IN MEXICO A. STATEMENT OF BANK LOANS (As of December 31, 1993) Amount in USS Million (less cancellation) Creditl Fiscal Loan No. Year Borrower Purpose Bank IDA Undisbursed 108 loans fully disbursed 13,014.72 Of whch SECALs, SALs, Program Loans, and Interest Support a> Ln. 1929-ME 1981 BANOBRAS Railway IV 14e.88 Ln. 2331-ME 1983 BANCOMEXT Export Development 349.33 Ln. 2882-ME 1988 BANCOMEXT Trade Policy Loan II 500.00 Ln. 2918-ME 1988 NAFIN Agricultural Sector Loan 300.00 Ln. 3169-ME 1990 BANCOMEXT Interest Support Loan 1,260.00 Ln. 3207-ME 1990 BANOBRAS Road Transport & Telecom. 380.00 Ln. 3087-ME 1989 NAPIN Industrial Sector Policy 497.61 Ln. 2745-ME 1987 BANCOMEXT Trade Policy Loan I 498.63 Ln. 3086-ME 1989 NAFIN Public Enterprise Reform 499.39 Ln. 2777-ME 1987 BANCOMEXT Export Development II 246.37 Ln. 2919-ME 1988 NAfIN Fertilizer Sector 240.20 Subtotal 4 213 Ln. 2526-ME 1985 NAFIN Chiapas Agricultural Dev. 58.00 4.61 Ln. 2575-ME 1985 BANOBRAS Railways V 300.00 3.28 Ln. 2668-ME 1986 NAfIN Agricultural Dev. Proderith II 88.30 41.10 Ln. 2666-ME 1986 BANOBRAS Municipal Strengthening 40.00 17.34 Ln. 2669-ME 1986 BANOBRAS Solid Waste Management Pilot 25.00 11.27 Ln. 2824-ME 1987 BANOBRAS Urban Transport 90.98 26.64 Ln. 2868-ME 1987 NAFIN Small/Medium-Scale Industry IV 100.00 20.42 Ln. 2875-ME 1987 BANOBRAS Highway Maintenance 135.00 2.78 Ln. 2916-ME 1988 NAFIN Steel Sector Restructuring 321.01 70.13 Ln. 2946-ME 1988 BANOBRAS Ports Rehabilitation 50.00 4.17 Ln. 3047-ME 1989 NAfIN Industrial Restructuring 260.00 44.35 Ln. 3083-ME 1989 NAFIN Hydroelectric Development 460.00 106.43 Ln. 3085-ME- 1989 BANOCOMEXT Financial Sector Adjustment 487.14 1.19 Ln. 3116-ME 1990 NAFIN Forestry Development 45.60 36.66 Ln. 3140-ME 1990 BANOBRAS Low-income Housing II 360.00 55.79 Ln. 3141-ME 1990 NAFIN Agricultural Marketing II 100.00 0.49 Ln. 3189-ME 1990 NAFIN TransmIsson & Distribution 450.00 11.98 Ln. 3208-ME 1990 BANOBRAS Telecomm. Technical Assistance 22.00 6.79 Ln. 3271-ME 1991 BANOBRAS Water Supply & Sanitation 300.00 21.27 Ln. 3272-ME 1991 NAFIN Basic Health Care 180.00 105.95 Ln. 3310-ME 1991 NAfIN Decentralization & Regional Develop. 360.00 121.55 Ln. 3357-ME* 1991 NAFIN Agricultural Sector Adj. ll 400.00 15.89 Ln. 3358-ME 1991 NAFIN Technical Training III 162.00 105.93 Ln. 3359-ME 1991 NAFIN Mining Sector Restructuring 200.00 117.85 Ln. 3407-ME 1992 NAFIN Primary Education 250.00 150.57 Ln. 3419-ME 1992 NAFIN Irrigation & Drainage Sector 400.00 239.23 Ln. 3461-ME 1992 BANOBRAS Environmental 50.00 37.84 Ln. 3466-ME 1992 NAFIN Agricultural Technology 150.00 141.34 Ln. 3476-ME 1992 NAFIN Science & Technology Infrastructure 189.00 168.65 Ln. 3497-ME 1992 BANOBRAS Housing Market Development 450.00 236.83 Ln. 3518-ME 1993 NAFIN tnial Education 80.00 71.98 Ln. 3642-ME 1993 NAFIN Labor Market & Prod. Enhancement 174.00 151.50 Ln. 3543-ME b> 1993 NAFIN Transport Air Pollution Control 220.00 220.00 Ln. 3659-ME b> 1933 BANOBRAS Medium Cities Transport 200.00 200.00 Ln. 3628-ME 1993 BANOBRAS Highway Rehab. & Traffic Safety 480.00 454.89 Total 20.612.65 3,126.6 Of Which has been repaid 6,317 81 Total now held by the Bank 14,294.84 Amount sold : 92.34 Of which has been repaid: 92.34 Total Undisbursed 3,510.86 3,610.86 a> Approved during or after FY80 and fully disbursed. SAL, SECAL, or Program Loan under implernentatIon. MdeS: LA2C1 Fie: WB-12-93.xls 24-Jan-94  - 12 - B. SUNMARY OF IFC IN7ESTMENTS Schedule D (As otSeptember 30, M3) Paqot3 L EI4^ - --h$ T4et 2 P o"t3 F#Ql~~~~~~~~~~~~~o~ 50avaaS?S IFC 1nw Pwt _ g 1058150 tnda,auajo fU.I.ztc* 5.A JiL tiau&st?w lusgm,iIt a.so - - 0.80 - - ,osa Ufi1f@6+.Mt