Announcement of World Bank Supports First Rural Development Project in Ecuador on December 22, 1978

WO FOR IMMEDIATE RELEASE ' . • World Bank 1818 H Street, N.W., Wa.shington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 79/36 December 22, 1978 WORLD BANK SUPPORTS FIRST RURAL DEVELOPMENT PROJECT-iN ECUADOR An $18 million World Bank loan will help finance a rural development project in Ecuador. The project aims at improving rural incomes, expanding agricultural production, promoting economic and social development, and improv- ing living conditions of the rural poor. This project will be the fiist rural development project supported by the World ft~nk in Ecuador. It will be carried out in the province of Tungurahua, a densely populated area of the Ecuadorian Andes, approximately 140 kilometers south of Quito. With an estimated total cost of $30 mil lion, the project wil 1 improve living conditions for some 16,000 poor rural families (about 83,000 people) in • the Tungurahua province. It will increase their incomes and productivity through rehabilitating and expanding irrigation in an area of about 9,600 hectares (ha) and intensifying cropping on about 18,000 rainfed ha, and through the provision uf credit and agricultural extension services. It will also provide them with an improved infrastructure base and social servjces, including rural roads, rural electrification, storage facilities, potable water, and health services. Most of the beneficiaries will be poor 11 minifundistas 11 with holdings under three ha per family. They are engaged in subsistence agriculture. Their princ;pal crops are potatoes, vegetables, and fruits. About 65% of the benefi- ciaries presently have annual per capita incomes at or below $60, the "absolute poverty" level in Ecuador. The project will also contribute to attaining self-sufficiency in fruits, vegetables, and milk production; and help decrease income disparities between rural and urban areas. Finally, the project will afford valuable experience for carrying out similar rural development projects in other parts of the country. The $18 mi 11ion loan to the Republic of Ecuador has a term of 17 years, including 6 years of grace, with interest at 7.35% per annum • • NOTE: Money f,gures are expressed in U.S. dollar equivalents. FORM NO. 1121 (5-76) T ECHN I CAL D A T A PROJECT: COUNTRY: TOTAL COST: Tungurahua Rural Development Ecuador $30 million • BANK FINANCING: $18 million for a term of 17 years, including 6 years of grace,at 7.35% interest per annum. OTHER FINANCING: Government of Ecuador, $11 million Beneficia.ries, $1 million IMPLEMENTING ORGANIZATION: Ministerio de Agricultura y Ganaderfa (MAG) Guayaquil 1740 Quito, Ecuador TELEX: 3291-MAG-ED CABLE ADDRESS: Minagricultura Qui to, Ecuador PROJECT DESCRIPTION: It includes: a) rehabilitation and ~xpansion of irrigation systems and on-farm works, on 1,800 hectares (ha) in the Quero-Ladrillos area serving about 2,300 farm families; b) on-farm works on 7,800 ha of irrigated land in the Huachi-Peli leo area benefitting about 9,700 farm families; c) support services to improve agricultural production on the 1rrigated area and on 18,000 ha of rainfed lands in the Quero and Chibuleo areas serving about 4,000 farm families; d) construction and improvement of rural roads and rural electrification networks; e) provision of social services comprising potable water, latrines and health facilities, and community centers; and f) consultant services. • PROCUREMENT: Most of the civil works components will be carried out on the basis of individually negotiated contracts or through MAG and the Institute Ecuatoriano de Recurses Hidraulicos (INERHI) force account. In cases where individual jobs exceed $150,000, contracts will be awarded on the basis of local compe- titive bidding, according to local procedures acceptable to the Bank. Goods and services financed through the agricultural credit component will be procured through normal commercial channels. Electrical equipment will be procured through international compe- titive bidding in accordance with Bank guidelines. Other equipment, vehicles, and spare parts will be procured according to local competitive bidding procedures acceptable to the Bank. CONSULTANTS: The project requires 90 man-months of consultant services, including a project administrator, an agricultural engineer, an agricultural extension expert, a horticulturalist, and various specialists, who wil 1 assist the project executing unit in the preparation of a monitoring and evaluation system, marketing, agricultural, and social servicesa ECONOMIC RATE OF RETURN: 21% ESTIMATED COMPLETION DATE: 1985 - 0 - •