Announcement of Eight Million One Hundred Thousand US Dollars Loan to Colombia for Land Colonization on May 6, 1971

7) ;~3_ INTERNATIONA.L BAI\JK FOR • RECONS.TRUCTION AND DEVELOPrv1ENT 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 71/23 Subject: $8.1 million loan to Colombia May 6, 1971 for land colonization The World Bank will help finance the second phase of a land coloniza- tion program in the Caqueta region of Colombia with a $8.1 million loan, it was announced today. The project is designed to consolidate and expand a largely spontaneous settlement along the eastern foothills. of the Andes mountains which started several years ago. The project is part of a national plan for land r~form. It is intended to provide an alternative means of livelihood to small farmers in the over- • crowded rural areas, where subsistence farming still predominates, and to the urban unemployed. Colombia has a total area of 439,500 square miles and some 22 million inhabitants. The tropical Amazon basin where the Caqueta project is located covers one-third of the land area but contains only 1% of the population. The project will be implemented in a three-year period and includes the construction of about 236 miles of penetration and access roads in the Caqueta area to service some 3,500 partially established settlers and/:to open up nearly 7()0,000 acres of undeveloped land for 2,800 new settlers. It will provide credits for farm development and improvement for about 4,500 old and new settlers. • /more Bank P.R. No. 71/23 - Colombia - land colonization - 2 - In addition, 90 schools and six health centers will be built and • equipped and a small experimental program aimed at improving rice and pasture production will be initiated. The land colonization project will be administered by the Colombian Institute for Agrarian Reform (INCORA), an autonomous body established in 1961. IN CORA (Avenida El Dorado, Bogota, Colombia) has undertaken a wide range of projects, among them land reclamation, land acquisition and subsequent sub-division, colonization and consolidation of uneconomic small- holdings. It is also engaged in supervised farm credit and technical assist- ance. Total project cost is estimated at $21.6 million equivalent. The Bank loan will finance about 38% of that amount, including the $5.5 million foreign exchange component. The contribution by the farmers, themselves, will aIOOUI!~ to 32% of the investment costs. • The loan is being made to the Government of Colombia £of.-\, a term of 20 years, including a four-year grace period, and will bear interest at 7!,.% annually. - 0 - •