Announcement of Two Million US Dollars IDA Credit for a Transport Engineering and Services Project in Malawi on June 10, 1974

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 74/31 Subject: $2.0 million IDA credit for a transport June 10 fl 19 74 engineering and services project in Malawi Malawi's plans to exploit forest resources on the Viphya plateau in the Northern Region will be assisted by a credit of $2.0 million from the International Development Association (IDA), an affiliate of the World Bank~ A market study made in 1970/71 by the United Nations Development Programme (UNDP) led· to further -- pre-feasibility -- studies of the potential uses of the resources of Viphya. These indicated that wood pulp for export constituted the best alternative. The Government, besides recognizing the need for eAl)ert pre-investment investiga- tions has established a Pulp and Paper Corporation (VIPCOR) to coordinate and control • preparatory activities and negotiate necessary contracts. The present project represents a further preparatory step in the Government's program to develop the wood processing scheme based on Viphya forestry resources. Detailed studies are required of costs, engineering, transportation and other aspects of the scheme. Technical assistance to help identify and secure financial, teclmical and commercial partners is also necessary. A preparation program has been drawn up jointly between the Government, UNDP, FAO, the United Kingdom and IDA, organizations which would be participating in the financing and execution of the overall program. The total cost of project preparation, including new planting, has been estimated at about $6.4 million. The IDA financing is for_ the foreign exchange component of planning and engineering of the transportation needs, and provision of some of the necessary teclmical expertise. · The credit is being made to the Republic of Malawi for a term of ten years with a • grace period of five years, and will be refinanced through any future Bank Group loan or credit for construction of the plant, or ancillary infrastructure requirements. Note: M:>ney figures are expressed in U.S. dollar equivalents.