Announcement of Eighteen Million US Dollars to Tanzania for the Kilombero Sugar Development Project on September 9, 1974

• INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION 18 18 H ST R E ET, N W WASHINGTON D.C.20433 TELEPHONE; EXECUTIVE 3-6360 Bank Press Release No. 74/74 ·Subject: $18.0 million to Tanzania for IDA Press Rele:ase No. 74/5 7 the Kilombero Sugar Development September 9, 1974 Project Tanzania's efforts to achieve self-sufficiency and full development in the sugar industry will be assisted by a loan of $9.0 million from the World Bank and a credit of $9. 0 million from the International Development Associa- tion (IDA), a World Bank affiliate. Denmark and Holland are also participating in the project. The Danish Government will provide $17.3 million and the Dutch Government, $11. 0 million. Agriculture is an important part of the Tanzanian economy. About 90 per • cent of the population live in the rural areas where agricultural activities are the main source of employment. Sugar is grown on four estates in the country including one in the Kilombero Valley where· the Kilombero Sugar Com- pany (KSC) is located. Two previous investments totalling $4. 7 million from the International Finance Corporation (IFC) have helped to support the develop- ment of the Kilombero estate which was first established in 1962. The present project is in two parts. Part I will help the development of a new sugar estate and nearby outgrowers' land and Part II will provide for con- struction of a new factory an<l related facilities. The existing training program is to be upgraded under the terms of the project. It is anticipated that production of refined sugar will be increased by 45,000 metric tons. The project will also help to increase· net foreign exchange earnings, to about $14 million annually. Out grower Uj arriaa farm families are expected to be able to earn an average annual income of $275 by the second year and $725 after about 6 years. The project will be executed by KSC which will also supervise out- growers' activities. The estimated total cost of the project is $55.8 million. The borrower is the United Republic of Tanzania and the Bank loan of $9 million is for a term of 25 years including 5 years of grace with interest at 8 per cent • per annum. The IDA credit of the same amount is for a term of 50 years with ten years of grace. It is interest-free except for a service charge of 3/4 of 1% to cover IDA's administrative expenses. Note: Money figures are expressed in US dollar equivalents.  • September 9, 1974 TECHNICAL DATA PROJECT': Kilombero Sugar Project COUNTRY: United Republic of Tanzania TOTAL COST: $55.8 million IDA/BANK FINANCING: Bank: $9.0 million, 25 years including 5 years of grace, interest at 8% per annum. IDA: $9.0 million, 50 years including 10 years of grace, no interest, with a service charge of 3/4 of 1% to cover IDA's administrative expense. OTHER FIN&~C ING: Danish Government: $17.3 million Dutch Government: $11. 0 million Tanzanian Govt. : $ 9. 5 million IMPLEMENTING ORGANIZATION: The Kilombero Sugar Company (KSC), P.O. Box 1988, Dar-es-Salaam, Tanzania PROJECT DESCRIPTION: Kilombero Sugar Project provides for construction of an additional sugar factory and development of an associated estate and outgrowers development capable of producing 45,000. metric tons per annum; related facilities, including staff housing, water supply and community installation and technical services and training; and a sugar development survey. PROCUREMENT: Part I - Land Development and Ancillary Facilities International competitive bidding:-for land development equipment, cane transport equipment and vehicles, furniture and equipment for non-factory building and water and elec- tricity supply equipment where contracts exceed $30,000; for offices, staff houses ard other civil works. Local bidders will be allowed a preferential margin of 15% or the existing rate of import duty, whichever is lower. Part II - Factory Turnkey contract with consortium of Dutch and Danish manu- facturers signed on April 5, 1974. Supervision of construction to be carried out by HVA International Ltd. CONSULTANTS: A full-time trainer is provided for under the project. Also two additional qualified agronomists and supporting staff have been included. ESTIMATED COMPLETION DATE: 1980 •