Announcement of Bank Group Lends Eight Million Six Hundred Thousand Dollars for Livestock Development in Paraguay on June 18, 1969

FOR IMMEDl'ATE RELEASE • INTERNATIONAL BANI( FOR RECONSTRUCTION AND DEVELOPMENT IN'rEHNA'l'IONAL DI~~VELOPMENT ASSOCIATION 1818 H STREF.:T N \V WASHINGTON D.C.20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 69/46 Subject: Bank Group lends $8.6 million IDA Press Release No. 69/24 for livestock development in Ju.ne 18, 1969 Paraguay The World Bank and its affiliate, the International Development Association (IDA), are lending the equivalent of $8.6 million for the third stage of a live- stock development program successfully under way in Paraguay. Beef production ~c the country's principal industry and accounts for more than a third of the cr,:. mt:ry' s foreign exchange earnings. A program to increase productivity through the application of modern techniques has been in progress since 1964, assisted by • C··~;o earlier IDA credits of $11- 1 million. The new loan and credit will assist in financing the program for another four years. Under the program loans are made to ranchers for development plans which in- clud2 fencing, water supply, cattle handling and disease control facilities, pas- tu;:-e improvement, drainage works, farm buildings, and for the purchase of breeding stock. Contractors also receive loans to import heavy machinery for constructing wat1;:7 facilities and for land clearing. Ranchers have been impressed with the results achieved in increasing the pro-· ductivity of cattle raising, and the number of participants in the program has ex- ceeded original projections. About 700 ranchers have already obtained loans, and hy the end of the third stage 1,000 ranchers, or 60% of those operating ranches ,,f 2 !400 acres or more will be participating. By 1974 the full impact on meat :-i-:-r1d.1Jction resulting from the first two stages of the program is expected to 1 • )B felt, and further substantial increases are envisaged subseqncntly froITI the thi.rd st.age. Since most of the increased out~mt will be export~d, the co·nt ri·· Tile /more * • Bank P.R. No. 69/46 - PaLaguay•Livestock Development I.DA. r.,R .. Ne,. 69/24 - 2 - Government, therefore, considers the program to be of paramount importance tc Paraguay's economic development. The Bank loan and IDA credit, amounting to $4.3 million each, will be extended to the Republic of Paraguay. The Bank loan will be for a term of 30 years, in- cluding 10 years of grace, with interest at 6-1/2%. The IDA credit will be for a term of 50 years,. including 10 years of grace; it will be interest-free, but a ser- vice charge of 3/4 of 1% will be made to cover IDA's administrative expenses. A Livestock Fund to be created as an affiliate of the Central Bank will ad- . minister the loan and credit through the National Development Bank (NDB). A special Livestock Project Division will be established in NDB to execute the project and to provide the nucleus of a p~rmanent organization to provide con- • tinuing technical services to ranchers. livestock technicians associated with the program. A Technical Director will supervise all A Coordinating Committee, consisting of senior representatives of the two banks and the Technical Director, will manage the Livestock Fund and approve all loans to ranchers and machinery contractors. The total cost of the project over the four-year period is estimated at the equivalent of $15.5 million. The Bank and IDA funds will cover the foreign ex- change costs (55%); the ranchers will contribute about 15% and the Government 30%, Loans to ranchers will be for a period of 12 years, including four years of grace, with interest at 9%. Loans to contractors will be for shorter terms with 9% interest~ Repayments of these loans, in excess of the amounts needed to repay the Bank and IDA loans, will be held by the Livestock Fund and be used for continuing the livectock development program for a period of 30 years from the • d.ate of the loan/credit agreements. - 0 ..