Announcement of Bank Lends Sixteen Million US Dollars to Zambia for Forestry and Road on September 25, 1968

fOR IMMEDIATE RELEASE r~\Jr( FOR f\JD DEVELOPMEN~r 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 68/53 Subject: Bank lends $16 million to September 25, 1968 Zambia for forestry and roads Two World Bank loans totaling $16 million will assist Zambia in launching a long-range afforestation program to meet industry's requirements for wood and in rebuilding 235 miles of the Great North Road which forms part of the Tanzam High- way linking the Zambian copperbelt with the Tanzanian port of Dar es Salaam. The road. loan, amounting to $10. 7 million, will be for a term of 20 years, including a two-year grace period. The afforestation loan, of $5.3 million, will be for a term of 25 years with 10 years of grace. The interest rate on both loans will • be 6-1/2% • $10.7 Million Road Loan As a landlocked country heavily dependent upon imports and exports, Zambia must concern itself with ensuring reliable access to the sea as well as with building an internal transportation ne~work to facilitate economic development. Traditionally the greater part of Zambia's copper exports and all its petroleum imports were transported over the Rhodesia Railways. Since attaining independence the Zambian Government has had as a long-term goal the developing of alternative outlets to the sea. The unilateral declaration of independence by Rhodesia and the subsequent United Nations sanctions restricting movement of goods to or through Rhodesia transformed this long-term aim into an inunediate transport problem for Zambia. One of the measures undertaken to meet this crisis has been the upgrading and • resurfacing of the Great North Road so that it can withstand the increased volume of traffic it is now bearing. This road is the main highway to the sea via the /more  Bank No. 6?,/~J - Zambia-Forestry and Roads r_,, • - 2 - port of Dar es Salaam, and in 1967 it carried an average of 30,000 tons :a month of imports and exports. A Bank loan of $17.5 million in 1966 helped to finance the reconstruction and paving of a 122-mile section of this road and the detailed engineering of another 147-mile section. The loan announced today will finance the reconstruction of the 235-mile section from Mpika to Tunduma. It will also finance the detailed engineering of a 63-mile section of the Great East Road; the earlier Bank loan financed the improvement of two sections of this road totaling 250 miles. The Great East Road connects Lusaka, the capital, with Zambia's agri- culturally rich Eastern Province and also provides a route to the sea via the road/railway systems of Malawi and Mozambique. The total cost of the road project is estimated at the equivalent of $17~5 mil- lion. A grant equivalent to $2.2 million from the United Kingdom financed expendi- tures on the ~roject through early this year. The Bank loan of $10.7 million will • finance the remaining foreign exchange requirements and the Government will finance the remaining local currency costs. Contracts for construction have already been awarded after international competitive bidding. $5.3 Million Afforestation Loan Zambia has always been a net importer of forest products. Apart from some teak, its forests are limited to a slow-growing, low-yielding wood that is used mainly in the copper industry and for firewood. Economically accessible reserves of this type will have been largely exhausted by the late 1970s. Under the afforest-ation program, fast-growing, high-yielding wood species suitable for various uses will be planted. The entire program calls for the establishment by 1993 of 30,000 acres of eucalypt and 75,000 acres of pine planta- tions located within the copper mining region. The project being assisted by the Bank loan is an eight-year portion of this program, under which 20,000 acres of eucalypt and 20,000 acres of pine will be planted, 2,500 acres of each every year. • Market prospects are good for the output in the mining and building industries • /more  Bank No. 68/53 - Zambia-Forestry and Roads • - 3 - Furthermore, the p.roject will contribute to a diversification of Zambia's primary production, save substantial amounts of foreign exchange, and stimulate the estab- lishment of secondary wood-using industries. The total cost of the project is estimated at the equivalent of $11.1 mil.- lion. The Bank loan will cover the estimated foreign exchange component; the local currency requirements will be met by the Government of Zambia. The project will be managed by the Industrial Plantations Division of the Forest Department of the Ministry of Natural Resources and Tourism. The Govern- ment has taken measures to ensure that the activities of the Division will be carried out on a commercial basis. This will allow the Division to run on com- mercial lines and at the same time have the benefit of various connnon services shared by the Division with other entities of the Forest Department. The Food and Agriculture Organization of the United Nations (FAO), operating under the Bank/FAQ Cooperative Program, assisted the Forest Department in pre- paring the project for presentatio¥.. for Bank financing. Contracts amounting to $15,000 or more for the purchase of tractors, bull- dozers, graders, trucks and personnel vehicles and for land clearing will be • awarded on the basis of international competitive bidding. Construction of buildings and roads and the planting and maintenance of trees will be done by the Industrial Plantations Division with its own labor. - 0 - • ... \\.