Announcement of Two Million Three Hundred Thousand Dollar Credit to Somalia for Roads on June 26, 1968

' FOR IMMEDIATE RELEASE • INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET. N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 68/17 Subject: $2.3 million credit to June 26, 1968 Somalia for roads A supplementary credit of $2.3 million from the International Development Association (IDA) will help complete construction of a 125-mile two-lane, all- weather road between Afgoi and Baidoa in Somalia. The road will pass through the most important grain-growing area in Somalia which accounts for two-thirds of the country's crop land. It will reduce the costs of transporting agricultural products to Mogadiscio, the largest consuming center, and encourage further production of food crops. The area has promise of mineral resources development as well, which is now being investigated with the assistance • of the United Nations DevelopmE•.nt Programme (UNDP). Construction of this road is part of a comprehensive approach to solving Somalia I s road transport probh\ms. The first step in this direction was taken in March 1965, when the European Development Fund (FED) and the UNDP joined IDA to provide $13.5 million for highway development. This included the construc- tion of the Afgoi-Baidoa road, pr01vision of offices for the highway department, road maintenance equipment, assistance in creating an effective highway organiza- tion, and transportation studies. IDA's share in this total, $6.2 million, was for the construction of the Afgoi-Baidoa road. The cost of building the road was originally estimated at $8 million on the basis of preliminary engineering studies. Subsequent detailed engineering led to an upward revision of the cost tc, $10.8 million. The new IDA credit will provide • $2.3 million to meet part of the increased cost; the Government of Somalia will cover the balance. The credit will be extended to the Govcr11ment of Somalia for a period of 50 years. It will be free of interest but will carry a service charge of 3/4 of 1% to meet IDA's administrative costs.,