Announcement of World Bank Loan of Fifty-Two Million Dollars for Rural Development in Colombia on December 27, 1976

REVISED COPY eWorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 77/42 December 27, 1976 WORLD BANK LOAN OF $52 MILLION FOR RURAL DEVELOPMENT IN COLOMBIA The World Bank approved a $52 mi11ion loan to assist the financing of an integrated rural development project in Colombia that wil 1 benefit directly and indirectly 1 .5 million people in fiv~ departments in the country. The project, which has an estimated total cost of $131 million, will help ra!se living standards in rural areas by increasing the incomes of farm families and by improving social services and facilities in rural communities. The project will include advisory services and training courses for farmers; construction and improvement of rural roads; provision of furniture and equip- ment for rural primary schools; and extension of health services, water supply • schemes and electricity networks in rural areas • The Integrated Rural Development Program, which forms part of the National Food and Nutrition Plan, is aimed at assisting families with less than 20 hectares to increase their farm productivity by providing supervised credit for development, operational expenses and the improving of marketing. With few exceptions, the beneficiaries of the project wi 11 be among the poorest 50% of the population. Many of them wi 11, for the first time, have access to credit facilities, markets, training and education opportunities, health care, water and electricity delivery ~ystems. and advisory services. The loan has been made for a term of 17 years, including 3 1/2 years of grace, at 8.7% annual interest. • Note: Money figures are expressed in US dollar equivalents. FORM NO. 1121 , (5-76) T E C HN I CA L DA T A PROJECT: COUNTRY: TOTAL COST: Integrated Rural Oevelopment Colombia $131 mi 11 ion • BANK FI NANC I NG : $52 million at 17 years, including 3 1/2 years of grace, at 8.7% annual interest OTHER FINANCING: The Government and Government agencies will provide $65~9 million, including contributions of Caja Agraria ($23 million) and National Apprenticeship Service- SENA ($3. 1 million). The beneficiaries will be required to finance 10% (13. 1 million) of totai project costs. IMPLEMENTING ORGANIZATION: Program Management Unit - National Department of Planning (DNP) and Department of Rural Development of Caja Agraria Director General Programa de Desarrollo Rural lntegrado, Departamento Macional de Planea- ci~n, Carrera 10, No. 27-27, piso 11, Bogota, D.E., Colombia PROJECT DESCRIPTION: The project will help finance the intensification of farm production on holdings of less than 20 hectares in three highland~ gions with serious problems of rural poverty. It will include training courses for staff and farmers at centers and through mobile training units; and also advisory. services for farm development and operation, tree planting, soi 1 conservation and prod marketing. Rural roads will also be constructed and improved within the project areas. Furniture and equipment will be provided to rural primary schools and the rural health service will be extended to cover 80% of the rural population in the area. Domestic water supply schemes and the rural electricity network wi 11 also be extended. PROCUREMENT: International competitive bidding, in accordance with Bank Guidelines, wi 11 be required for orders estimated to cost more than $100,000; for vehicles estimated to total $2. l million; and water pumps and piping, estimated to total $1 million. Domestic manufacturers wi 11 be granted a pre- ferential margin in bid evaluation equal to the prevailing tariff, or 15% of the c.i.f. cost of imports, whichever is lower. Farmers will purchase their requirements through existing commercial channels. Construction of health post and centers, potable water systems, rural roads and electrification will be small subprojects widely dispersed geographically and will therefore be carried out by force account or local competitive bidding procedures. CONSULTANTS: No local or foreign consultants are proposed to be contracted under the project. UNDP will provide technical assistance in marketing for the overall National Integrated Rural Development Program • ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 22% The loan will be disbursed over a period of six years. • - 0 -