Announcement of Romania Receives Sixty Million Dollars World Bank Loan to Assist Agriculture on February 18, 1977

•World Bank 1818 H Street, N.W., Washington, D.C. 20433 1 U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 77/58 FEBRUARY 18, 1977 ROMANIA RECEIVES $60 MILLION WORLD BANK LOAN TO ASSIST AGRICULTURE Agricultural production in two districts of Eastern Romania will be boosted by a large irrigation project that is being assisted by the World Bank. The World Bank has approved a $60 mil 1 ion loan to the Bank for Agri- culture and Food Industry of Romania, with the guarantee of the Socialist Republic of Romania, to help finance the lalomita-Calmatui Irrigation project. The project wi 11 increase, and at the same time help to reduce year-to-year fluctuations in, agricultural production in the districts of lalomita and Brai la, 120 kilometers northeast of Bucharest and west of the Danube in eastern Romania, and will increase labor productivity by about 250 percent. The project consists of construction of a 148,500-hectare • irrigation system and related facilities . Irrigation water wi 11 be pumped from the lower Danube by a floating pumping station, and this water will be further lifted and distributed through the canal system by seven fixed pumping stations. About 28,000 hectares of State farms and about 120,500 hectares cultivated by coopera- tives will get water distributed through concrete-1 ined canals to about 115 pressure pumping stations. The pressure pumping stations wi 11 supply water to about 2,760 kilo- meters of distribution pipeline. There wi 11 be about 17 surface drainage networks and 23 related pumping stations to serve about 82,350 hectares, and subsurface drainage networks to serve about 14,400 hectares. Portable furrow and sprinkler irrigation equipment, operation and main- tenance equipment, and farm machinery wi 11 be acquired. About 240 kilometers of 110-ki lovolt and 20-ki lovolt power lines, about 400 observation wells to monitor groundwater levels, and buildings for operation and maintenance of the irrigation system wi 11 be built. Other works to be completed include land leveling on about 40,000 hec- tares, soil erosion control on about 6,100 hectares, and windbreaks to pro- tect about 38,600 hectares. The $60 mill ion loan will have a term of 15 years, including three years • of grace, and carry interest at 8.5 percent per annum . Note: Money figures are expressed in U.S. dollar equivalents. FORM NO. 1121 (5-76) T ECH N I CA L DA T A PROJECT: COUNTRY: TOTAL COST: Ia 1om i ta-Ca 1mat u i I r r i g a t i on Romani a $195 million • BANK FINANCING: $60 mi 11 ion to the Bank for Agriculture and Food Industry of Romania, with the guarantee of the Socialist Republic of Romania. The loan will have a term of 15 years, includin9 3 years of grace, with interest at 8.5% per annum. OTHER FINANCING: Government, $109.8 million; Bank for Agriculture and Food Industry, $2R.6 mill ion; and cooperatives, $12 mill ion. Interest and other charges during con- struction wi 11 total $15.4 mi 11 ion. IMPLEMENTING ORGANIZATION: Ministry of Agriculture and Food Industry (MAIA) bd. Republ icii 24 Bucharest, Romania PROJECT DESCRIPTION: The project consists of construction of irrigation infrastructure and supply of related facilities to serve an area of about 148,500 hectares. It includes a floating pumping station and 7 fixed pumping stations; a system of concrete-lined main, branch and distributary canals; about 115 pressure pumping stations to supply water to about 2,760 kilometers (km.) of distribution pipeline; about 17 surface drainage networks and 23 related • pumping stations to serve about 82,350 ha., and subsurface drainage networks to serve about 14,400 ha.; portable furrow and sprinkler irrigation equipment, operation and maintanance equipment, and farm machinery; about 240 km. of power lines; land level- ing works on about 40,000 ha., soil erosion control works on about 6,100 ha., and wind- breaks to protect about 38,600 ha.; about 400 observation wells to monitor groundwater levels; and construction of buildings for operation and maintenance of the irrigation system. PROCUREMENT: A1thougli Romani an 1aws provide for i nternat i ona 1 compet i - tive bidding and for joint ventures involving foreign and domestic enterprises, in practice all irrigation works ··re constructed by Romanian Con- struction Trusts, which are experienced and familiar with local conditions, methods and regulations. Therefore, only procurement of equipment and materials equivalent in cost to the estimated direct and indirect foreign exchange cost of the project will be financed under the loan. Items costing $45 million including contingencies will be procured fol- lowing international advertising and competitive bidding in accordance with Rank ~,Jide- guidelines. Romanian manufacturers will be al lowed a margin of preference of 15% or the applicable custom duty, whichever is lower, but the application of the preference is riot expected to significantly affect the outcome of bidding. It 1s expected that foreign sup- pliers will win contracts for most construction equipment (canal trimming and 1 ining machines, tile laying machines, dewaterin~ equipment and some motor scrapers) estimated to cost about $6.5 mi 11 ion. ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 16.3% December 1981 - 0 - •