Ukraine - Seed Development Project

Document of The World Bank FOR OFFICIAL USE ONLY LAN 3g?9/-dA Report No. 1-f!;6',6-UA MEMORANI)I'XH ANI) RECOMMEN DATI ON OF T'HEE I'RES I l)i.N'r OF l'liE INTERNAT IONAL. BANK FOR RECONS'IRUCTION AND) Dl;M:F.cWMENT TO THE EXECULT E VE DIRECTORS ON A PROPOSED WOAN IN AN AMOUNT E-QUIVALENT TO US$32.0 MILLION TO UKRAINE FOR A SE.D DEVELO.I.(PMFNT PROJF CT APR11. 27, 1995 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 EIQ'IVALI.ENTS as of.lanuary J1)) Qt Currency unit: Karbovan1jets (Krb) IExchange rates: Krli ler II.S. dollar September 1993 16,46(0 = US$1 March 1994 30,153 == S$1 September 1994 48.954 = US$1 December 1994 10,367 = IJS$1 January 1995 125.000) = IJS$I WEIGHTS ANI) MEASURES Metric system ABRREVIATIONS AND ACRONYMS BOtl Bank Ukraina ERR economic rate of return FAO/CP IBRD/Food and Agricultural Organization. Cooperative Prograni FRR financial rate of return FSU Former Soviet Uniop ICB International Competitive Bidding IS International Shopping LA l oan Agremcent LCB Local Competitive Bidding MOAI Ministry of Agriculture and Food MOF Ministry of Finance NMP Net Material Product PMU Project Managcment Unit PSC Project Steering Committee SAR Staff Appraisal Report SCSQC State Commission for Seed Quality Control of the MOAF SCTPPV State Commission for Testing and Protection of Plant Varieties of the MOAF UAAS Ukrainian Academy of Agricultural Sciences UkrExlmBank Ukrainian Export-Import Bank VAT value added tax FISCAL YEAR Ja.auary I to December 31  UKRAINE FOR OFFICIAL USE ONLY SEED DEVELOPMENT PROJECT LOAN AND PROJECT SUMMARY Borrower: Ukraine Beneficiaries and Imulementing Agtencies: Private Seed Production Conipanies, Regulatory Agencies of the Ministry of Agriculture and Food (MOAF), and Institutes of the Ukrainian Academy of Agricultural Sciences (UAAS). Poverty Categorv: Not applicable Amount: US$32.0 million equivalent Terms: Standard IBRD terms with 17 years maturity including five years of grace. Commitment Fee: 0.75 % on undisbursed credit balances, beginning 60 days after signing, less any waiver. Onlending Terms: Subloans to the seed production enterprises ($US 23.9 million, 75% of Bank loan proceeds) would carry an interest rate spread that is 4.30 percentage points above the Bank's lending rate and would be repayable in up to eleven years, including a maximum of four years grace. Loan funds benefitting public regulatory agencies, the UAAS and the Project Management Unit and technical assistance to the seed enterprises would be passed on as budgetary allocations (25% of Bank loan proceeds). Financing Plan: IBRD US$32.0 million Seed Enterprises US$31.3 million Total US$63.3 million Closing Date: September 30, 2000 Economic Rate of Return: 19% Staff ADvraisal Renort: Report No. 13228-UA MaP: IBRD 26088-R 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.  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE IBRD TO TIIE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO UKRAINE FOR A SEED DEVELOPMENT PROJECT 1. I submit for your approval the following memorandum and recommendation on a proposed loan to Ukraine for the equivalent of US $32.00 million to help finance a seed development project. The loan would be at the Bank's standard variable interest rate, with a maturity of 17 years, including five years of grace. About 75 % of the proceeds of the loan would be passed on to three private seed processing enterprises for up to eleven years, including a maximum four years grace, at interest of 4.30 percentage points above the Bank's standard variable interest rate. Country/Sector Background 2. With a land area of 0.6 million kM2 and a population of 52 million, Ukraine is the second largest country in Europe (after the Russian Federation) in total area, and the fifth largest in terms of population. GNP per capita was estimated at US $1,912 for 1993 down from US $2,635 in 1991. 3. Ukraine declared its independence from the Soviet Union in August 1991. It now faces the immense challenge of creating the institutions of a sovereign state, and at the saene time securing the transition from a centrally planned to a market-based economy. Until recently, efforts at stabilization and structural reform had been piecemeal; under the newly elected government, Ukraine's first comprehensive reforn program has been formulated in an attempt to restore macroeconomic stability and to restructure the economy, including the transformation of the land tenure and enterprise structure in agriculture. 4. In October 1994, the Ukrainian President announced Ukraine's first comprehensive economic reforn program which has stabilization and structural reformn aspects. The stabilization measures aim at bringing about a reduction in inufation by implementing tight fiscal and monetary policies. The structural reform measures focus on promoting enterprise restructuring and competition by removing the inhibiting role of the state towards the private sector and letting markets function by transforming state enterprises into commercial entities, and by hardening the budget constraint on enterprises. Specific reform measures include the lifting of most price controls, the unification of the exchange rate, the elimination of most export quotas, the sharp reduction of subsidies on bread and public utilities, the adjustment of imported energy prices to full cost recovery levels, as well as the implementation of a targeted social safety net. The implementation of these reform measures is creating a conducive environment for implementing reforms and privatization in the agriculltural and food sectors. 5. Agriculture has historically been a significant sector in the diversified Ukrainian economy, wbich also has a large industrial sector and a relatively small service sector. Agriculture contributes about 30% to Net Material Product (NMP), employs some 20% of the labor force, and provides for approximately 30% to Ukraine's total merchandise trade. Given the country's abundant and fertile land resources, agriculture should continue to play an important role in the country's economic development. 6. Although agricultural production grew until the late 1980's at an average rate of about 2% per annum, factor productivities remained low, despite operating on some of the best land resources within a temperate climate. Crop yields and conversion factors in the livestock industry are 25-50% lower than in countries with comparable resource endowments. Inefficiencies in the system of central economic management and collective agriculture, along with an increasingly outdated production  -2- tuchnologies anid low-qualitv inputs - including seeds - and a poorly performing agricultural marketing and processing system, prevented the sector from realizing its high potential. 7. Ukraine has a long tradition in plant breeding and in supplying improved germplasmn to Western and Eastern Europe. Prior to World War 1, most West European seed breeders operated in Ukrainc because the dry weather at harvest time helped produce seeds of superior quality as compared witlh those in Western Europe. After 1917, Western involvement in Ukrainian seed production came to an end, and exports were confined to the republics of the Soviet Union, for which Ukraine became a major supplier of germplasm and foundation seeds,' especially for maize and sugarbeet seeds, and to a lesser cxtent for sunflower seeds. With the mounting economic difficulties since independence, plant breeding suffered significantly, the production of quality seed declined, and with it the capacity to maintain the level of crop production and exports of grains and seeds. Proiect Objectives 8. The principal objective of the project is to raise agricultural productivity and agricultural export earnings by improving the national seed system's capacity to produce high quality seed efficiently. In the short-term, the project aims at arresting the decline in domestic availability and exports of quality seed by supporting the establishment of private production of high quality commercial seed on the basis of domestic and imported germplasm. The project would facilitate the development of a competitive seed system in the medium term, by demonstrating the efficiency and effectiveness of private seed production, by improving the regulatorv framework for the seed system, and by assisting in the establishment of an efficient system for germplasm maintenance and plant breeding. With the liberalization of pricing, marketing, and exports (recently agreed with the Bank under the Ukraine Rehabilitation Loan), domestic seed prices are expected to rise substantially over the medium term to reflect the contribution of quality seed to crop yields, thereby allowing seed production and processing to become a financially self- sustaining activity. The participating seed enterprises will also bolster their viability by exporting sizeable shares of their output, mainly to FSU markets vwhere Ukraine has demonstrated ability to sell hybrid seed. Proiect Descridtion 9. To meet the project's short term objective, the project would provide financial and technical assistance for: (a) the development of three private enterprises specializing in the multiplication of domestic and imported hybrid seed for maize, sunflower, sugarbeet, and their processing and marketing; and (b) the germplasm maintenance and development for three leading domestic suppliers of hybrid maize, sunflower and sugarbeet germplasm. To help meet the project's medium term objective of developing a competitive seed system, the project would provide financial and technical assistance for: (a) improving the regulatory framework for the seed system; and (b) the development of an agricultural research strategy and plan. In addition to these specific interventions in the seed system, the liberalization of seed pricing, marketing, and trade, and the establishment of private seed production, implemented within the context of the project, would enhiance the efficiency of the national seed system. To facilitate efficient project implementation, the project would also support a Project Managemen: Unit (PMU) which would report to a Project Steering Committee (PSC). The geographical location oL the proposed investments are indicated in the attached map. I Foundati(on seed is the seed population used to produce the seeds planted by the fanner (commercial seeds). Foundation seed is also known as parent seed, basic seed, or elite seed.  -3- Project Implementation 10. The project's principal component is hybrid seed production, which would be implemented by three newly established private joint stock companies specializing in the production, processing, and marketing of hybrid maize, sunflower, and sugarbeet seed. Implementation of this component would be monitored by the Ukraine Export-Import Bank (UkrExlmBank)), which would act as the financial agent of the Government. UkrExlmBank would also monitor the accounting, financial, and managerial performance of the three seed enterprises. 11. The PMU, legally part of the Ministry of Finance, would be responsible for: (a) liaising between the implementing agencies, the Government, and the Bank; (b) ensuring compliance with World Bank requirements for reporting on implementation progress, financial control, and monitoring of project impact; (c) determining eligibility of disbursements for project and loan funds; (d) providing assistance to the implementing entities in matters of procurement and disbursements; and (e) administering the proj_:ct's technical assistance and training component. 12. The PMU is headed by a project manager who is supported by one assistant, one administrative staff, and will have suitably qualified technical assistance for a total of It person-months. The Bank has agreed on the qualifications and terms of reference for this technical assistance. The project manager reports to a Project Steering Committee (PSC), composed of representatives of the Ministry of Finance (MOF), the Ministry of Agriculture and Food (MOAF), the Ukrainian Academy of Agricultural Sciences (UAAS). UkrExlmBank (as the Borrower's financial agent, Bank Ukraina (as the principal supplier of working capital), and representatives of the Board of Directors of each of the three seed enterprises. The Steerinlg Committee is chaired by a Deputy Minister of Finance. 13. The shareholders of the new companies are private individuals, privatized collective farms, private Ukrainian firms, and public entities involved in the seed industry. Agreement has been reached with the Governmmnt that public entities would not hold more than 49% of the shares in each of the companies. Statutes, shareholders agreements and feasibility studies have been prepared for all three participating seed enterprises, and these enterprises have been legally registered. They will enter into subsidiary loan agreements, satisfactory to the Bank, with the Ministry of Finance, as representative of the Borrower. Foreign companies are expected to become shareholders in these companies. The contributions of these prospective foreign partners to the companies' share capital, estimated at the equivalent of about US $500,000 each, would cover part of the companies' working capi.al needs. 14. The improvements in the regulatory framework for the seed industry supported by the project would be the responsibility of the corresponding regulatory agencies of the MOAF, the State Comrnission for Seed Quality Control (SCSQC), and the State Commission for Testing and Protection of Plant Varieties (SCTPPV). These components would be supervised by the MOAF. 15. The germplasm maintenance program, including the proposed review of the agricultural research system, would be the responsibility of the UAAS, which would be supported by suitably qualified consultants with terms of reference and qualifications satisfactory to the Bank. Project Sustainability 16. The project design includes three crucial aspects which provide for institutional, financial, and economic sustainability of the project. First, the Government of Ukraine agreed to liberalize the pricing, domestic m-;rketing, and foreign trade regimes regulating the three hybrid seed types covered by the project. These policy reform measures facilitate the development of commercial seed production  -4- by private enterprises and provide sufficient incentives for state-owned seed enterprises to reEtructure themselves along commercial lines. This lays the groundwork for an efficient, competitive seed sector in Ukraine. Secondly, the beneficiary seed enterprises under the project are all majority privately owned and therefore adequately motivated to pursue financially viable production and marketing activities. This will enable the enterprises to pay back the sub-loans to the Ministry of Finance. In addition, the substantial tax revenue collected from the enterprise profits will be more than enough to finance the quasi- budgetary outlays by public sector seed agencies and institutes under the project. Thirdly, by improving the seed system's regulatory framework, seed quality, and potential for productivity increases, the project yields high economic returns. By increasing crop yields through improved seeds, growth in the agricultural sector would be achieved in an environmentally sustainable way. Lessons Learned from Previous Bank/IDA Involvrement 17. So far, Bank lending to Ukraine has ben confined to an institution-building loan, a rehabilitation loan, and a hydropower rehabilitation loan Accordingly, there is only limited country and sector-specific implementation experience on the Bank side and no exposure of the Ukrainian institutions to the specific procedures governing the implementation of Bank investment operations. These factors are reflected in the modest scope of the proposed project, the introduction of a PMU and the provision of technical assistance to the implementing agencies, as well as to the PMU. The mutual lack of experience in working with each other may require a supervision intensity exceeding standard Bank allocations. &8. The Bank's experience worldwide with seed development projects suggest that: (a) interventions should embrace the whole seed system and be oriented towards long-term growth as opposed to short-term, ad hoc involvement; (b) seed sector policies should be conducive to the development of a self-sustaining seed industry and the active participation of the private sector; (c) the linkages between the seed system and agricultural research need to be reinforced; (d) free-standing seed projects outperformed interventions based on a component approach; and, (e) investments in institutional development, technical assistance, and training have generally been decisive elements for good performing seed projects. Rationale for Bank Involvement 19. In developing private seed production, marketing, and exporting, as well as strengthening the regulatory framework for seeds, the project would be consistent with the Bank's strategy of promoting transition to a market-based agricultural system. The private sector approach of the proposed project is a vehicle to test and demonstrate the viability and effectiveness of an alternative mod_-l of seed production to the current public sector system. Bank involvement has already helped in the formation of private seed enterprises as well as in the liberalization of seed pricing, marketing, and trade, and continued involvement would be critical for the needed improvements in the regulatory framework. It would be beyond the reach of the private sector to bring about and sustain changes in the institutional, economic, and regulatory framework without formal agreement with the Government within the framework of a Bank-supported project. Bank participation is also justified to help ensure effective implementation of seed system reform within an environment of policy and administrative changes. This project is  -5- consistenit witlh the limited Country Assistance Strategy as discussed with the Board of Directors during the presentation of the Rehabilitation Loan (report no. P-6446 UA) on December 22, 1994. Ag,reed Actions 20. Assurances have been obtained during negotiations that: (a) loan effectiveness would be subject to the Borrower's providing the Bank with (i) a Financial Agencv Agreement signed between the Borrower and UkrExlmBank; (ii) Subsidiary Loan Agreemcnts signed between the MOF and at least two of the three participating seed enterprises; and (iii) evidence satisfactory to the Bank that the PMU and the PSC are established and staffed; (b) disbursements of Loan proceeds for investments in the Plant Variety Testing and Protection System would be subject to receipt by the Bank of a plan (prior to March 1, 1996), acceptable to the Bank for the rationalization and reorganization of this System; (c) the MOAF and the UAAS would, following the review of the current seed legislation, present a specific proposal to Parliament (by March 31, 1996) for amending or modifying the existing legislation to implement the recomnmendations of the review; (d) the GOU would in the context of its econom.c reform program, implement and maintain the agreed liberalization of production, marketing anid trade without limitation to the seed sector as specified in the Seed Policy Letter by the Minister of Economy dated September 9, 1994; and (e) the GOU and the Bank would determine whether loan funds provided for technical assistance, training and the operation of the PMU would be reallocated to other categories or cancelled in case bilateral grant funds would become available for these purposes. Poverty Category - Not Applicable Environmental Aspects 21. The proposed project would not create any substantive environmental hazard. The potential occupational hazards in seed plant through the generation of dust and handling of hazardous chemicals would be mitigated by including appropriate dust removal systemns and storage facilities for chemicals in design of the seed plants. Inclusion of such systems was agreed upon during negotiations. 22. The project has been classified as a category B project. No separate environmental analysis was deemed necessary, but design criteria and operational procedures covering potential occupational hazards have been included in the specifications for the plants in the bidding documentation. Assurances have been obtained during negotiations that evaluation of bids and awards for the supply and creation of cht: seed plants will take these criteria into account. Moreover, the plants are subject to existing regulations permitting environmental supervision by the Ministry for Environmental Protection. Program Objective Categories 23. The project primarily aims at Private Sector Development (PV). It would also contribute to improved Economic Management (EA).  -6- P'arficipatory Approach 24. The UAAS seed institutes, Ministry of Agriculture seed commissions, and thc participat.ng private sced enterprises have all actively participated in the preparation, appraisal, and negotiation of the project. At the same time, the UAAS and the Ministry of Agriculture are the implementing agencies for the germplasm maintenance and regulatory framework project components. The potential profitability of seed production and processing should provide sufficient incentive to the private seed enterprises to efficiently implement the seed production componenit. Project Benefits 25. The project benefits would be, first and foremost, the contribution to safeguarding the supply of improved seeds for both the domestic and export markets and the resulting favorable impact on productivity, production. and foreign exchange earnings. The production of hybrid foundation and commercial seed by the project at full development is estimated to reach about 2,100 tons and 10,400 tons. Of this, approximately 60% is expected to be utilized domestically and 40% is expected to be exported. The incremental commercial seed produced by the project and used domestically would be equivalent to 10%, 35%, and 2% of the current demand for sugarbeet hybrids, sunflower hybrids, and maize hybrids, respectively. The annual foreign exchange earnings from exports of project foundation and commercial hybrid seeds are projected at an equivalent of US $18 million at full development. 26. Second, the project is expected to demonstrate the viability of financially sustainable seed production systems. In so doing, it would pave the way for increased private sector participation in seed production and a corresponding freeing of Government resources, as well as an increased foreign participation in the establishment of a modern seed production system. 27. The project is also expected to enhance the international competitiveness of Ukrainian seed through: (a) improved access to high-quality foreign germplasm and foundation seed by Ukrainian breeders and seed producers; (b) improvements in seed legislation, including plant breeders' rights; and (c) improved plant variety registration and seed testing. 28. The financial benefits of the three seed plants are sufficiently robust to provide for the plants' viability in case of implementation delays, reduced output levels, and unfavorable cost and price developments. In the base scenario, which includes a foreign exchange surrender of 50 %, a value added tax of 20%. an import tax rate of 10%, and a profits tax of 30%, the after-tax financial rate of return (FRR) is estimated at 29% for the sugarbeet seed enterprise; and 25% for both the mnaize and the sunflower seed operations. Sensitivity analysis indicates that the sugarbeet seed enterprise would remain viable2 if costs increased by 15%, if sales fell by 11%, or if implementation were to be delayed by one year. The corresponding switching values3 for both the maize and sunflower enterprises are about 15% for cost increases and 10% for sales reduccions. Risks 29. The technical aspect of producing seeds is not a major risk. The technology involved is quite straightforward and well known in Ukraine, and there are sufficient suitably qualified technicians available. The modern seed production and processing equipment to be procured under the project, along 2FRR equal to or greater than 15%. 3Switching value - the level at which the FRR drops below 15%  -7- with the private business involvement of the seed enterprises, will provide for the technical efficiency and for the attention to details required for high-quality seed production. Ukraine is less well equipped to effectively handle the managerial, financial, and marketing functions of comrnmercially-oriented seed enterprises, but these potential problems are expected to be reduced by the private nature of the enterprises, the participation of foreign firms, and by the provision of technical assistance and training. 30. Success in demonstrating the viability and replicability of a system of private seed producers depends considerably on reaching and maintaining a reasonable degree of macroeconomic stability. It also depends on continued Government support for the liberalization of pricing, marketing, and trade of agricultural inputs in general and seeds in particular. Such a supportive macroeconomic and sector policy framework will only develop over time. However, the financial attractiveness of hybrid seed production will demonstrate the feasibility and viability of private seed production in the medium term, even in an imperfect macro and sector policy enviroment. The favorable and robust economics of seed production as indicated by the ERR would further justify taking the implicit risk. 31. Other risks for the proiect are the timely availability of key production inputs, and the uncertainties about the level of the domestic demand for improved seeds. This would greatly depend on the profitability of crop production, which is dependent on successfully resolving pricing and trade problems in agriculture. Under this scenario, the domestic demand for improved seeds may decline in the short run. However, this risk of reduced demand would appear manageable considering that: (a) the project would concentrate on the production of hybrids, which farms need to be replace annually; and (b) the sale of produced seeds can be reoriented to the export market. 32. A final risk factor affecting project implementation is the borrower's unfamiliarity with procedures and regulations associated with the implementation of Bank-supported projects. This risk has been taken into account by projecting an implementation period longer than technically necessary for commercial turn-key projects of this size and by providing for a PMU and the needed technical assistance to support its functions. Recommnendation 33. 1 am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank and I recommend that the Executive Directors approve it. Lewis T. Preston President by Sven Sandstrom Attachments: Schedules A - D Washington, D.C. April 27, 1995  -8- Schedule A Ukrainie Seed Developinent Project Estimated Costs and Financing Plan 'Ie 0o Base Foreign l.ocal Total Cost HYBRID SEED PRODUCTION: Maizc: Equipmcnt & machincry 10.15 2.49 12.64 Civil works 1.50 1.50 Working capital 8.21 8.21 Tcchnical assistance and training 0.30 0.30 Sunflowcr: Equipmcnt & machinery 3.81 0.94 4.75 Civil works 0.67 0.67 Working capital 3.93 3.93 Tcchnical assistancc 0.30 0.30 Sugarbeet: Equipment & machinery 5.03 1.22 6.25 Civil works 0.42 0.42 Working capital 7.32 7.32 Technical assistance 0.30 0.30 Subtotal 19.89 26.70 46.60 90 Equipment & machinery 18.98 4.65 23.63 Civil works - 2.59 2.59 Working capiLal - 19.46 19.46 Technical assistance 0.91 0.91 REGULATORY FRAMEWORK: Equipment 2.21 2.21 Technical assistance & training 0.14 0.14 Subtotal 2.34 2.34 4 GERMPLASM M.ANTENANCE: Equipment 2.13 0.13 2.26 Technical assistance & training 0.62 0.03 0.65 Subtotal 2.75 0.16 2.91 5 PROJECT MANAGEMENT: 0.28 0.06 0.34 1 TOTAL BASE COST 25.26 26.92 52.19 100 CONTINGENCIES: Physical contingencies 4.55 4.85 9.40 18 Price contingencies 0.84 0.87 1.70 3 TOTAL PROJECT COST 36.65 32.64 63.30 121 Sources of Finance Amount % of Total IBRD 32.00 51 Seed Enterprise 31.30 49 TOTAL 63.30 100 Including value-added taxes and import duties equivalent to US$ 15.48 million.  -9- Scedle[ (pr2ugL 1 *f 3) Ukraine Seed Dlevelopmcnl pro.jct Summary of Procurement Arrangements (US$ millions equivalenit) Component Procurcmcnt Mcthod NBF TOTA 1. ICB LCB Othcr Turnkev Contracts Construction of onc and reftirhishing of 2 28.7 28.7 secd plant buildings and cquipping 3 sccd (21.5) (21.5) plants Goods Agricultural niachinery for (hrec sccd 3.0 3.0 comipanies (2.5) (2.5) Agricultural machinery & cquipment for thrce 2.5 2. UAAS institutes (2.5) (2.5) Machinery and equipment for rcgulatory 2.5 2.5 agencics (2.5) (2.5) Laboratory equipment, chemicals, and data 0.82! 0.8 processing equipmcnt for regulatory agencics (0.8) (0.8) and the UAAS Consultancies Technical assistancc and training to seed plants. 1.72' 1.7 regulatory agencies, and UAAS (1.7) (1.7) Technical assistance for Agr. Res. Review 0.221 0.2 (0.2) (0.2) Technical assistance for PMU 0.221 0.2 (0.2) (0.2) Miscellaneous Operating expenses for PMU 0.1' 0.1 (0.1) (({.1) Working capital 23.64' 23.6 TOTAL (29.0) (3.0) (32.0) Figures in parentheses indicatc expected Bank dishurscmcens. 1t - International Shopping 2/ - According to Bank Guidelines 3/ - Local Shopping 4/ - Financed by shareholder's equity and local borrowings by secd coimpanies.  -10- Schedulc B (page 2 of 3) Estimated Schedule of Disbursements (US$ millions) Semestcr sincc Loan disbursement Cumulative Disbursemcnt profile - approval This semester cumulative total M Sector' Regional' FY 1996 Dcc 95 0.5 0.5 2 0 0 Jun 96 9.5 13.0 41 6 3 FY 1997 Dcc 96 8.5 21.5 67 14 6 Jun 97 6.0 27.5 86 22 14 FY 1998 Dec 97 2.0 29.5 92 34 18 Jun 98 0.5 30.0 94 50 30 FY 1999 Dec 98 1.0 31.0 97 62 38 Jun 99 O. 31.5 98 78 46 FY 2000 Dec 99 0.3 31.8 99 90 58 Jun 2000 0.2 32.0 100 94 66 a. Agriculture Credit-Bankwide. b. Agriculture-ECA.  Schedule B (page 3 of 3) (from l oan Agrcement) Withdrawal or the Proceeds of the Loan Catcgory Amount of the Loan Percentage of Expenditures Allocated (expressed in to be Financed dollar equivalent) (I) Turnkey contract provided for Odesa Maize Seed Enterprise undcr Part A of the Project (a) Turnkey contract provided for Odesa 9,000,000 100% of foreign expenditures Maize Seed Enterprise under Part A of the project (b) civil works 750,000 50% of expenditures (2) Other goods and equipment provided for 1,150,000 100% of foreign expenditures. 100% Odesa Maize Seed Enterprise under Part A of local expenditures (ex-factory cost) of the Project and 75% of local expenditures for other items procured locally (3) Goods, equipment, and materials provided 4,120,000 100% of foreign expenditures under turnkey contract for Trostianetske Sugarbeet Seed Enterprise under Part A of the project (4) Other goods and equipment provided for 910,000 100% of foreign expenditures, 100% Trostianetske Sugarbeet Seed Enterprise of local expenditures (ex-factory cost) under Part A of the Project and 75% of local expenditures for other items procured locally (5) Goods, equipment, and materials provided 3.800,000 100% of foreign expenditures under turnkey contract for Zaporizhzhia Sunflower Seed Enterprise under Part A of the Project (6) Goods, equipment, and materials provided 2,210,000 100% of foreign expenditures, 100% under Part B of the Project of local expenditures (ex-factory cost) and 75% of local expenditures for other items procures locally (7) Goods, equipmenl and materials provided 2,260,000 100% of foreign expenditures, 100% under Part C of the Project of local expenditures (ex-factory cost) and 75 % of local expenditures for other items procured locally (8) Incremental operating costs under Part D of the Project 340.000 100% (9) Consultants' services and training 1,690,000 100% (10) Unallocated 5,770,000 TOTAL 32.000.000  -12- Schedule C Ukraine Seed Developmcnt Project Timetable of Kcy Project Processing Events (a) Timc takcn to prcpare the projec: 20 months, August 1993 - March 1995 (b) Prepared by: FAOICP, Foreign Consultants, UAAS, with Bank Assistance (c) First Bank mission: August 1993 (d) Appraisal mission departure: September 1994 (c) Negotiations: January 1995 (f) Planned date of effectiveness: August 1995 (g) List of relevant ICRs and PPARs: Not applicable (h) Planned closing date: September 30, 2000 The project was prepared by the following Department Director: Basil Kavalsky Division Chief: Geoffrey Fox Task Manager: Arndt Uhlig Deputy Task Manager: Mark R. Lundell  -1I3- Schedule D Ukraine Seed Development Project Status of Banqk Group Operations in Ukraine A. Statement of IBRD Loans LOAN No. FiSCAL BORROWER PROJECT AMouNT-US$ DISBURSEMENTS' Year MILLIONS MILLIONS 3614 - UA 1993 Government Institulion 27.0 2.0 of Ukraine Building 3831 - UA 1995 Government Rehabilitation 500.0 249.1 of Ukraine 3865 - UA 1995 Government Hydropower 114.0 0.0 of Ukraine Rehabilitation B. Statement of IFC Investments LOAN No. FISCAL BORROWER PROJLCT AMOUNT - US$ DISBURSEMENTS5 YEAR MILLIONS MILLIONS 3642 1994 Ukraine Fund Ukraine 2.0 2.0 Investment Fund ds of March 31. 1995 5 as of March 31. 1995  MBD 26086R 20 * 25 30 -, 35 40 BELARUS OLAND *_*_. _ * ;L, 35hostk\