Announcement of Nine Million Two Hundred Thousand US Dollars for Malawi Rural Development Project on June 17, 1976

. • ,. World3ank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 76/79 Jµne 17, 1976 $9.2 MILLION FOR MALAWI RURAL DEVELOPMENT PROJECT The \forld Bank is lending $9.2 mi 11 ion on "Thi rd Window'' terms to Malawi, to help finance the second phase of the Karonga Rural Development Program (KRDP). The first phase of the program (1971) was designed as part of the Government's integrated rural development scheme to increase agricul- tural production in the Karonga and Chitipa districts of Northe.rn Malawi. Agriculture is the principal sector of Malawi's economy, providing employment for about 90 percent of the population. In addition to rai~ing productivity, the Government seeks to accelerate rural development nationally and provide more opportunities for Malawi's farmers. The present project is designed to continue support over a 4-year period for the program already underway. It will also cover the preparatory investments required in the first 2 years of the Government's National Rural • Development Program, and provide rehabilitation of the Chipoka Lake terminal and improvement of the transport services on Lake Malawi. The main features of the project include the fol lowing: Karonga and Chitipa Continuation and expansion of the extension and training services provided under Phase I Expansion of animal husbandry and veterinary services to farmers Civil works, including housing facilities for about 75 addi- tional staff and construction or improvement of; 90 miles of rural roads, bridges and culverts, and some 80 boreholes Continuation of the agricultural and the hydrological research program Continuation of the seasonal and medium-term credit program Construction and operation of nine market complexes Construction, staffing and operation of health facilities, including health education, maternal and child care, and communicable disease control • Continuation of the project evaluation program begun under the first project NOTE: Money figures are expressed in U.S. dollar equivalents.  ' . -- 2 -- ... • · Continuation of the provision of management and accounting services National Rural Development Program (NRDP) Preparatory investments for the NRDP Lake Transport Construction of berthing and associated facilities of the Chipoka Lake terminal At full development of Phases I and I I, the estimated value of annual incremental agricultural production in the Progr· area is over $2 mi 11 ion. About 10,000 farmers now at the absolute pc, erty level wi 11 be able to double their earnings from crop production. More farm families wi 11 benefit from the investments in health and water facilities and the improved rural roads system. Temporary additional employment will be provided for about 1,000 people. The improved berthing facilities at Chipoka will increase port capacity, improve cargo handling and reduce cargo damage. The total cost of the project is estimated at $12. 1 million. The "Thi rd Window 11 loan of $9.2 is for a term of 25 years, including 7 years of grace with interest at 4.85%. An additional 4% wi 11 be paid to the World Bank by the Interest Subsidy Fund, representing the differ- ence between the Bank's standard interest rate and the charge to Malawi. • - 0 - •  Form No. 1121 (9-75) • ·' T E CHNI CAL DAT A PROJECT: Karonga Rural Development, Phase I I COUNTRY: Malawi TOTAL COST: $ 12. 1 mi 11 ion BANK FINANCING: $9. 2 mi ·11 ion Thi rd Window 1oan for '.£5 years inc 1ud i ng 7 years of grace with interest at 4.85% OTHER FINANCING: Government of Malawi, $2.1 million Agricultural Development and Marketing Corporation (ADMARC), $0.8 million IMPLEMENTING ORGANIZATION: The Ministry of Agriculture and Natural Resources (MANR) Post Box 30134, Capital c;ty, Lilongwe 3, Malawi • PROJECT DESCRIPTION: The project consists of the follo.ving major elements: Karonga and Chitipa: (i) Extension and Training (ii) Animal husbandry and veterinary services {iii) Civi 1 works (iv) Research (v) Seasonal and Medium-term Credit (vi) Crop Markets and Stores (vii) Health Facilities (viii) Project Evaluation (ix) Management and Accounting Services. National Rural Development Program (NRDP): (x) Preliminary investment for the first two years' activities of the NRDP. Lake Transport: (xi) construction of berthing and associated facilities of the Chipoka Lake terminal. PROCUREMENT: Vehicles, machinery and equipment in orders over $50,000 will be procured through international competitive bidding. The orders will be grouped whenever possible. Farm inputs and drugs will be procured on the basis of competitive bidding advertised locally. The Ministry of Works will undertake by force account the construction of houses and other required infrastruc- tural facilities in Karonga and Chitipa district. ADMARC will construct and operate the permanent markets and input stores. Boreholes will be constructed by the Geological Survey Department of MANR. Civil works under the Chipoka harbor improvement works wi 11 be awarded through international competitive biddingc CONSULTANTS: If necessary, short term consultants would assist MANR for specialized studies on national credit organization. ECONOMIC RATE OF RETURN: Component A (Karonga-Chitipa) - 14% Component C (Lake Transport) - 18% • ESTIMATED COMPLETION DATE: 1980 -0-