Announcement of World Bank Provides Nineteen Million Five Hundred Thousand US Dollars for Rural Settlement Project in Colombia on May 23, 1975

INTERl'~,l\. flONAL BANK FOR • RECOI'~ST.RlJCl~l()N AND DEVELOPMENT 1818 H STREET, N.W .. WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank News Release No. 75/42 May 23', 1975 WORLD BANK PROVIDES $19.5 MILLION FOR RURAL SETTLEMENT PROJECT IN COLOMBIA The World Bank has approved a $19.5 million loan for a rural settlement project in Caqueta, Colombia. The $37.1 million project is the second phase of a land colonization project started in the Caqueta region with assistance of an $8.1 million Bank loan made in 1971. The rural settlement project will give emphasis to follow-up assistance to established farms, environmental protection and social services. An estimated 2,850 small farmers will receive medium and long-term credit. The ~dditional economic and social infrastructure will benefit a larP' :_.,roportion of the overall 0 population of the region, which has grown to 12,000 t·amilies ( some 70,000 persons). Under the project, credit. will be provided for acquisition of cattle and related expenses, reflecting the fact that the poor soils in the project Make them suitable only for extensive livestock farming. • The project includes clearing of land now under forest to establish pastures, as well as supervised long-term credit, mainly for breeding cattle and other basic farm investments, and supervised medium-term credit for cattle fattening. Under this project, about 200 kilometers of roads will be constructed and 30 primary schools will be built. Ten health posts and two health centers will be constructed and supplied with the necessary equipment. Some 200,000 hectares of pastures, capable of supporting a cattle population of about 226,000 heads will be improved. At full development, this will result in annual sales of some 40,000 heads. The cattle fattening element will add an estimated additional 3,000 steers annually to sales. The project will be implemented by INCORA (Colombian Institute for Agrarian Reform). By facilitating the economic progress of the Caqueta region's farmers, who are highly motivated to improve the income of their families by migrating to an area requiring extremely hard physical work in a difficult environment, the project will serve the Government's objectives of increasing output, improving the income of the poor, particularly in the rural · .reas, and reducing the pressure of urban mi- gration. It is estimated that per capita incomes of the families participating in the project will be raised, at full development, from about $100 to $250 for families working 30 hectares, and $550 for 200 hectares farms. The Bank loan is for 20 years, including 4 years of grace, at 8 1/2% annual rate of interest • • Note: Money figures are expressed in US dollar equiva~ents. PROJECT: COUNTRY: T E CHNI CAL DAT A Caqueta Rural Settlement Project (Phase II) Colombia • TOTAL COST: $37.1 million BANK FINANCING: $19.5 million OTHER FINANCING: Government of Colombia and Settlers IMPLEMENTING ORGANIZATION: Instituto Colombiano de Reforma Agraria (INCORA) Avenida El Dorado, Bogota D.E. Colombia PROJECT DESCRIPTION: The project is a continuation of the ongoing Caqueta Land Colonization Project (1971) and will help finance assistance to settlers in the Caqueta region. In this project emphasis w i l . be given to follow-up assistance to established farms, environmental protection and soci services. An estimated 2,850 small farmers will receive medium and long-term credit in Phase II. As under the first project, loans will be made for acquisition of cattle and related expenses, reflecting the fact that the project area has poor soils only suitable for extensive livestock farming. Under Phase II, some 200,000 hectares of pasture will be improved. The project will include the following elements: a) farm development comprising the clearing of land now under ·forest and establishing pasture, as well as supervised long-term credit, mainly for breeding cattle and other basic farm investments; b) supervised medium-term credit for cattle fattening; c) road construction, upgrading and initial maintenance; d) construction and equipping of schools, health centers, supply ~tores and administrative centers; e) water supply and sewerage; f) malaria eradication; ~) forestation and·erosion control; h) technical assistance and training; and i) supply stores, administrative centers, vehicles and equipment for strengthening of INCORA's project administration. PROCUREMENT: Road construction and road maintenance equipment will be procured through international competitive bidding. A 15% preference will be accorded to suppliers of equipment manufactured in Co- lombia. School construction and all other construction, equipment and services will be procured under local bidding procedures. CONSULTANTS: INCORA will employ engineering consultants to assist in analyzing bids and supervising road construction. ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 1979 •