Announcement of World Bank Lends Ten Million Five Hundred Thousand Dollars for Regional Development in Honduras on May 25, 1978

I • F:OR IMMEDIATE REL~ASE •World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 78/97 May 25, 1978 WORLD BANK LENDS $10.5 MILLION FOR REGIONAL DEVELOPMENT IN HO~DURAS Over 2,700 farm families in Honduras will benefit from a development project that would eventually cover the entire Guayape River valley in the central part of the country. The World Bank has approved a $10.5 million loan for the fir!t phase of the scheme. The Guayape Regional Development Project will provide an integrated package of assistance and services. The beneficiaries will be about 1,200 small farmers with holdings of less than 20 hectares, and 70 agrarian reform settlements with over 1,500 families in selected areas of the valley. The total cost of the project is estimated at $14.6 million. The project wf;l include investment and production credit, extension services, • machinery pool services, small-scale irrigation schemes, rural road improve- ment, and improved research facilities. The project will benefit low-income small farmers and increase agricultural production in the Guayape valley, mainly of basic grains, soybeans, and cotton. It will also help consolidate the agrarian reform program in the region and lay the basis for extension of similar techniques in other areas of the country. At full development, 1t is expected that the average annual family net cash income will increase at least four times, and as much as eight times in the case of some agrarian reform participants. The project will also be directly responsible for the employment of 600 people and 333,000 man-days of hired labor, equivalent to 1,280 full-time jobs. The $10.5 million loan to the Republic of Honduras will have a term of 20 years, including 5 years of grace, with interest at 7.5% per annum. NOTE: Money figures are expressed in U.S. dollar equivalents • • FORM NO. 1121 (5-76) T ECHN I CAL D A T A PROJECT: COUNTRY: TOTAL COST: Guayape Regional Development Honduras $1 4. 6 mi 11 ion • BANK FINANCING: $10.5 million, for a term of 20 years, including 5 years of grace, with interest at 7.5% per annum. OTHER FINANCING: The Government of Hondura~, $3.8 million; beneficiaries, $0 • 3 mi 11 i on . IMPLEMENTING ORGANIZATION: Ministerio de Recursos Naturales Tegucigalpa, Honduras PROJECT DESCRIPTION: The project includes: (1) subloans for on-farm investments and agricultural production for: (a) 1,200 smal 1 farmers, (b) 54 rainfed agrarian reform settlements, and (c) 16 irrigated agrarian reform settle- ments. (2) Supporting services: (a) machinery pool equipment including four tractors, four land levellers, four grain harvesters,and one truck; (b) expansion of the • Catacamas Research Station; (c) construction and improvement of about 35 kilometers of r·ural roads; and (d) road maintenance equipment. (3) Technical assistance: (a) 120 man- months of consultants' services to support project unit activities; and (b) a project preparation study. PROCUREMENT: The purchase of vehicles, road e4uipment, tractors, and farm machinery and equipment will be procured through interna- tional competitive bidding according to Bank procedures in case of individual contracts exceeding $100,000. Purchases of these items of less than $100,000, and furniture and office equipment will be procured through local competitive bidding procedures. Procure- ment of farm inputs will be carried out by farmers through normal commerctal channels. Road \"K>rks will be undertaken by the Ministry of Public Works and Communications by force account. Civil works for project facilities and Irrigation will be carried out through locai competitive bidding procedures. CONSULTANTS: Consultant assistance for the project unit and training of local staff will be provided by four international recruited specialists in irrigation, agricultural extension and credit. ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 21% 1982 - 0 - ••