Announcement of One Million Five Hundred Thousand Dollar Credit to Ecuador for Livestock Development on September 5, 1969

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET. N.W., WASHINGTON 0. C. 20433 TELEPHONE: EXECUTIVE 3.6360 IDA Press Release No. 69/29 Subject: $1.5 million credit to Ecuarlor September 5, 1969 for livestock development The International Development Association (IDA), a World Bank affiliate, has approved an interim credit equivalent to $1.5 million to Ecuador to help provide additional finance for a livestock development prograrr1 started with a World Bank loan of $4 million in 1967. The project seeks to increase beef cattle production fer domestic consumption and export, by introducing modern techniques and develop- ing standards which could eventually be applied throughout Ecuador. •• The Ecuadorean Government and IDA are now preparing a broader second project which is intended to follow the first project being financed by the World Bank loan and the IDA credit. The funds provided by the Bank were fully committed much earlier than expected, as there has been a strong demand for credit by Ecuadorean cattle ranchers. The interim IDA assistance is proposed to fill the gap and keep the program adequately financed. The IDA funds will be used in the coastal area of some 8.1 million acres, two-thirds of which are already in production. The area includes some 2.4 mil- lion acres of improved and natural pastures. At least an additional 1.2 million acres of still unused land could be utilized for improved pastures in the beef cattle development progran1. The IDA credit funds will be made available to ranchers for land clearance, pasture renovations, fencing, water supplies, yards and dips, machinery, improved • breeding stocks and other related improvements • It is expected that 50 to 60 /more  • IDA P.R. No. 69/29 - Ecuador-Livestock - 2 - cattle ranchers will participate in the project, in addition to about 140 ranchers being assisted with funds provided under the Bank loan. The project financed by the IDA credit announced today will be coordinated and supervised by the same agencies and officers involved in the earlier Bank project. The total cost of the project is estimated at the equivalent of $2.5 million, of which the IDA $1.5 million credit will cover 60%. The balance of the project cost will be financed equally by participating credit institutions and the ranchers. The IDA credit will be made to the Government of Ecuador for a term of 50 years, including 10 years of grace, and is interest free. A service charge of 3/4 of 1% will be made to cover IDA's administrative expenses. -~ The Ecuadorean Government will re-lend the IDA funds to the participating credit institutions on identical terms as under the Bank-assisted first project: 18 years, including six years of grace, at 6-1/2% annually. The participating ranchers will receive loans from these institutions for 8 to 12 years, including grace periods of 3 to 5 years, at 10% annually. - 0 -