Announcement of Nine Million US Dollars Loan for Agricultural Development in Costs Rica on May 18, 1972

() INTERN'ATIONAL BA(NK ,,FQ:R : 0 lfRECONSTRUCTION AND DEVELOPMENT 1818 H STREET, N.W., WASHINGTON 0. C. 20433 TELEPHONE: EXECUTIVE 3-6360 1, I Bank Preas Release No. 72/28 Subje,~t: $9. 0 million loan for agric ul- 1 I' May ,18, 1972 t ural development in Costs Rica ' The World Bank has approved a loa.~ for the equivalent of $9. 0 million to the Banco Central de "Costa Rica which will assist a second agriculture credit project for intensified development of about 350 commercial farms~, <:'overing ,about 180 , 000 1 acr~s !,fand 20 agro-lndustrial e~terprises. The lo~A is the second for agricultural credit to the Banco Central de Costa Rica. The first loan of $3.0 million 'was approved irt 1968. Agriculture plays an important role in Costa- Rica 's economic growth, contribut- 1 ing J)v~r 25% of gross .domestic product and 75% of total e·Al)Oit-earo:i.-ngs, and' p:'0'"'·-·· · -· viding eq,loyment for some 40% of the labor force. In the past five years output has increased at about 8.5% annually. Most of this increase has come 'from export crops, mainly bananas and livestock, while production for domestic' consumption (mainly ,;.basic grains) has barely kept pace with population growth. This has led to increasing food imports, now accounting for about 5% of total imports. For the future_,. considerable opportunities exist for both the iexpansic;,n of non-traditional exports such as beef, and for economical import substitution. The $16.5 million equivalent project is, in the main, a continuation of the fir11t agriculture credit p:roject for the development of tieef, bananas, cotton and pineapple but will also finance dairy produc~ion, a wide range of crops (maize, rice, fruit, oilseeds, vegetables and oil palm), forestry and agro-industries. The loan will finance medium and long-term investments in land and crop development, machineey and equipment, construction and installation, planting material and breeding stock and technica1 services and training. The loan ls made to the Banco Central which will channel the World Bank fmds through fo~ participating state-owned commercial banks to tile sub-borrowers. The loan with the guarantee of the Republic of O>sta Rica is mde for a term of .18 years including a .grace period of five years with an interest rate of 71,;% per annum. • Three United States fin$lcial institQtions are participating in the Bank loan for a total amount of $415,000. They are: Security Pacific National Bank, Los ·Angeles; Bank of America, New York; and Marine Midland ... New York. - 0 - _ .......... ••-s'-·' · . -.. ~ . · ~ - - .... - .... ~ . . . . •t•· ......... ·~····-