Announcement of 13.6 Million Dollars Credit to Ghana for an Oil Palm Project on February 20, 1975

• INTERN.A.TIONAL DEVELOPMENT ASSOCIATION 1818 H STREET. N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA News Release No. 75/7 February 20: 1975 $13.6 MILLION CREDIT TO GHANA FOR AN OIL PALM PROJECT The International Development Association, an affiliate of the World B&nk, has approved a $13.6 million credit to the Republic of Ghana to help finance an oil palm project. The project is the first phase of a 25,000-acre integrated oil palm development program based on the concept of a nucleus plantation with outgrower holdings. It involves planting 13,000 acres of oil palm about 90 miles northeast of Accra. The project includes the establishment and operation of a 10,000 acre nucleus plantation; 3000 acres of outgrower plantings accessible by moto~able roads; a 10 ton/hour palm oil mill; a fruit collection system, training of personnel; • field trials with palm oil; construction of 10 miles of road and a provision of technical assistance to the Agricultural Development Bank (ADB). The project is expected to generate.an annual production of 14,000 tons of palm oil and 3,000 tons of palm kernel; sustain and develop an industry generating a gross income of $17 million annually in a poor and relatively underdeveloped region of Ghana; anu will result in a net annual foreign exchange saving of about $5 million at full production. The nuclem~ plantation will provide employment for 600 staff and laborers and the outgrower program will benefit about 250 farmers who would serve as a base on which to expand the outgrower program in the second :phase of the project. In addition, the nucleus plantation is expeeted to have a beneficial demonstration effect on the standard of husbandry in the outgrowrr farms. The credit is for 50 years with 10 year grace period. It is interest-free except for a service charge of 3/4 of 1% to cover IDA's administrative expenses. • 1 Note: Money figures are expressed in US dollar equivalents. PROJECT: T E CHNI CAL DAT A Oil Palm Project • COUNTRY: Ghana TOTAL COST: $22 • 5 million IDA FINANCING: $13.6 million OTHER FINANCING: rThe Government of Ghana; (the outgrowers will contribute 1% of total project cost--$120,000) IMPLEMENTING ORGANIZATION: The Ghana. Oil Palm Development Corporation ( GOPD) , c/o Ministry of Economic Planning P.O. Box M-76 Accra, Ghana PROJECT DESCRIPTION: The project comprises the following: a) estab- lishment and operation of a 10,000-acre nucleus ~ plantation, and carrying out of field trials with oil palms; b) provision of technical services and credit facilities to assist smallholders develop 3,000 acres of outgrower holdings; c) construction and operation of a 10 ton/hour palm oil mill, and establishment of a fruit coll,ection system for outgrowers; d) training of personnel; e) construction of 10 miles of road in project area; and f) provision of technical assistance to the Agricultural Development Bank. PROCUREMENT: Fertilizer and insecticides; vehicles and the construction and equipment of the oil palm mill valued at $10.7 million will be procured on the basis of international competition. Civil works contracts for non-plantation roads valued at $0.3 million will be exe- cuted by contractors selected through competitive biddin. ~ locally advertised. Contracts for land clearing($1.l million) will be awarded through competitive bidding locally advertised. Portions may be carried out on a piece work basis. Retroactive financing of about $600,000 equivalent for GOPD (only a small proportion of this may now be required) and about $200,000 equivalent for technical assistance to ADE. CONSULTANTS: A consulting firm will be retained to provide the senior staff of GOPD; a plant breeding consultant will be employed during the planting period; consulting engi~eers will draw up specifications and tender documents for the oil mill and also supervise construction; and consultants have been engaged for the technical assistance to ADB. ESTI~. .ATED COMPLETION DATE: 1983/84 •