Announcement of One Million Five Hundred Thousand Dollar Credit to Papua and New Guinea for Agriculture on January 16, 1969

\"I\',, I\ l.o ,,.11 -<\.;. • INTERNATIONAL DEVELOPMENT ASSOCIATION (~) 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 69/2 Subject: $1.5 million credit to Papua January 16, 196Y and New Guinea for agriculture Palm oil production, a new industry in Papua and New Guinea, will be expanded with the assistance of a $1.5 million credit from the International Development Association (IDA). The Territory of Papua and New Guinea is administered by Australia. The project will support the Administration's efforts to develop new cash crops on a commercial scale, relieve population pressures by opening new lands to settlement and cultivation, and establish techniques for land settle- • ment which could eventually be applied elsewhere in the Territory and with other crops. The area to be developed for the growing of oil palms is located on the island of New Britain, adjacent to a nucleus estate and an oil mill belonging to a newly established company, New Britain Palm Oil Development Limited (NBPOD). The project consists of the settlement of about 580 families from other parts of the Territory on 15-acre holdings, and the planting of eight acres of oil palms on each holding totaling 4,640 acres. Supplies of planting material will be pro- vided by NBPOD, which will also process and market overseas the output of the smallholders. The Administration will provide suitable infrastructure, including a small port and a road and bridge leading to it from the'settlement area, and the necessary welfare and extension services. The credit will be extended to the Administration of the Territory of Papua • and New Guinea for a period of 50 years with 10 years of grace. It will be free of interest but a service charge of 3/4 of 1% will be made to meet IDA's admin- istrative costs. /more IDA P.R. No. 69/2 - Papua and New Guinea • Agriculture - 2 - The total cost of the project is estimated at ·the equivalent of $3.3 mil- lion. The IDA credit will finance $1.5 million of this total and the remainder will be financed by the Administration,. An amount of $600,000 from the IDA credit will be lent to the Papua and New Guinea Development Bank for a period of 25 years with interest at 1-1/4%. the Development Bank will relend these funds to the small- holders for 11 years at an interest rate of not less than 6%, for on-farm develop- ment and subsistence during the initial period of planting. - 0 - • •