Announcement of Tanzania Receives Forty-Five Million Dollars for Textile Production from World Bank and IDA on June 30, 1978

FOR IMMEDIATE RELEA E eVVorld Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 78/126 June 30, 1978 fDA NEWS RELEASE NO. 78/95 TANZANIA RECEIVES $45 MILLION FOR TEXTILE PRODUCTION FROM WORLD BANK AND IDA Over four thousand jobs will be created by a textile mill project in Tanzania to be assisted bi a loan and a credit totalling $45 million from the World Bank and its affi 1iat\?, the International Development Association (IDA). The World Bank wi 11 lend $2.5 mi 11 ion and IDA wi 11 provide $20 mil 1ion for the Morogoro Textile Project. The project consists of an integrated textile mill located at Morogoro, with spinning, weaving, and processing facilities to produ~e about 21.5 million square meters of blended fabrics. as well as 650 tons of polyester/rayon yarn. ·Morogoro is about 200 kilometers west of Dar-es-Salaam, the major Tanzanian port. The mill will use locally grown cotton and imported polyester and rayon, and the output from the.factory will represent about 11% of 1anzania's projected • total fabric production in the mid-1980s • The main objective of the project is to help Tanzania meet the growing but .J arge 1y uh sat i sf i ~rl demand· for b1e.nded fabrics. The project is part of the Government•s program to: expand the domestic production of textiles with the aim of reducing imports of essential consumer items. Since the project is basically directed at import substitution, no significant quantities of the fabrics produced are expected to be available for export. The textile mill will be owned and operated by the Morogoro Polyester Textiles Limited, a new company ~stabl ished in February 1978, .under the sponsorship of the National Textile Corporation of Tanzania (TEXCO). Both th~ company and TEXCO will· receive technical assistance under the project for staff training. A special training center will be established at Morogoro·for operators, maintenance personnel and craftsmen required· at the mi 11. Because of its 1·ocation in Morogoro; the project wi 11 help reduce the population pressure on Dar-es-Salaam, thus assisting the Government's effort to promote a more balanced regional development in Tanzania. The $25 million World Bank loan and the $20 million IDA credit will togeth~r finance about 42% of the total project cost, es~imated at abo~t $106.9 million. The remaining project costs will be financed by the Tanzanian Government ts own re.sources and borrowings from other sources. · The World Bank loan wil'I be repayable in 20 years, including 5 years of • grace, at ].5% interest per annum. The IDA credit will be on standard terms of 50 years, including 10 years of grace. It bears no interest but carries a charge of 3/4 of 1 per~ent per annum for administrative expenses. NOTE: Money figures are expressed in U.S. dollar equivalents. FORM NO. 1121 (5-76) T E C HN I CA L D A T A PROJECT: COUNTRY: TOTAL COST: Morogoro Text i 1e Tanzania $ 106 • 9 mi 1 1 ion • BANK FI NAN,C I NG: $25 million IDA FINANCiNG: $20 million OTHER FINANCING: Government of Tanzania, $32.6 million Tanzanian Investment Bank (TIB), $10 million Supplier credits, $20 million IMPLEMENTING ORGANIZATION: National Textile Corporation (TEXCO) Dar-es-Salaam Tanzania PROJECT DESCRIPTION: The project consists of an integrated textile mill with spinning, weaving and processing facilities to produce about 21.5 million square meters of blended fabrics as well as 650 tons of polyester/ rayon yarn. The mi 11 wi 11 use locally grown cotton and imported polyester and rayon, and the project output will represent about 11% of Tanzania's projected total fabric • production in the mid-1980s. The project includes provision of financing for technical assistance to the National Textfle Corporation, and a training component. PROCUREMENT: Goods and services (except consultants) financed by the Bank/lDA wi 11 be procured through i ntern,:3t i ona 1 competitive bidding in accordance with the Bank's guidelines except: (a) items costing less than $100,000 but not exceeding the aggregate amount of $2 million may be purchased through international shopping on the basis of suitability, availability and price considerations; and (b) proprietary items and items in limited supply crftical to the timely completion of the project whose aggregate cost is estimated not to exceed $1 mlllion may be procured follow- ing bidding from a list of qualified suppliers acceptable to the Bank/lDA. Contracting for civil works to be financed with Bank/lDA funds (about 58%) will be by international competitive bidding in accordance with the Bank's gufdelines, with local contractors being given a 7.5% preference. CONSULTANTS: A management agency firm wilt be appointed six months before mechanical completion of the project to operate the mill for at least the initial three years of plant operations, under terms and conditions satis- factory to the Bank. ECONOMIC RATE OF RETURN: 19% ESTIMATED COMPLETION DATE: 1984 - 0 - •