Announcement of IDA Credits to Benefit Six Million Six Hundred Thousand Dollars in Afghanistan on March 23, 1978

FOR l,MMEDIATE RELEASE •World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 IDA NEWS RELEASE NO. 78/48 MARCH 23, 1978 • IDA CREDITS TO BENEFIT 6.6 MILLION IN AFGHANISTAN Some 6.6 mill ion people, or about half the population of Afghanistan, will benefit from two agricultural projects to be assisted with credits totaling $40 million from the International Development Association (IDA). The credits from the affiliate of the World Bank are for an irrigation project to increase agricultural production ($22 mill ion) and fruit and vegetable produc- tion and exports ($18 mill ion). IDA credits are for 50 years, including 10 years of grace. They bear no interest but carry a service charge of 3/4 of 1% per annum to meet administrative costs. Fruit and Vegetable Export Project • A credit of $18 million from the International Development Association (IDA) will help finance a project to improve fruit and vegetable production and provide markets for these products. The project will benefit about 6.5 mill ion people, including 2.7 mill ion in the country's absolute poverty group. Fruits and vegetables account for about 6% of Afghanistan's total cultivated area. While horticulture gives direct employment to about 100,000 farmers, almost all the farmers in the country are involved in growing fruits and vegetables. In the past two years, they have produced about 900,000 tons of fruits and 720,000 tons of vegetables annually. Fresh and dried fruits, nuts and medical herbs make up about 40% of total exports. Such exports will be increased as a result of the project. The main features of the project include the prov1s1on of assistance to the Afghan Raisin Institute, Afghan Seed Company and the Afghan Vegetable Export Company to enable them to uograde their production and marketing facilities, and the supply of credit to farmers, especially for grape and vegetable production. Credit will also be made available to help develop such agro-industries as small fresh-fruit packing plants. The $27.6 mill ion project will be of special importance to some 2.7 mill ion people with per capita incomes of less than $84 a year, the country's absolute poverty level. At project completion, their per capita incomes will rise from $69 at present to $79 a year, and Afghanistan will earn about $7.1 million a year • from export of fruits and vegetables . NOTE: Money figures are expressed in U.S. dollar equivalents.  - 2 - Second Khanabad Irrigation Project An IDA credit of $22 million for the Second Khanabad Irrigation Project will help finance operations to increase rice and wheat production by about 20,500 tons, cotton by about 18,000 tons and other crops including maize, melon and vegetables by ~bout 14,ooo tons. • Increased foodgrain production will replace imports of wheat and contribute to self-sufficiency in food in the country. The $28.7 million project aims at raising agricultural production through e irrigation rehabilitation and drainage on 40,260 hectares and construction of new irrigation facilities on 1,200 hectares in the Khanabad Valley in northern Afghanistan. Agricultural supporting services including provision of seasonal loans to fa rrne rs w i 11 be provided for the tota 1 project area amounting to 41,460 hectares. Also included in the project are a 20-hectare pilot area for testing dif- ferent irrigation methods on loess soi ls and a malaria control program to i mp rove the hea l th of fa rme rs a n d the i r fa mi 1 i es 1 i v i ng i n the pro j ec t a rea • Some 108,000 people 1 iving in the country's rural areas wil 1 benefit from the project. Their per capita incomes will increase from $94 at present to $131 . IDA support for irrigation development in the Khanabad Valley was first made in 1971 with a credit of $5 mill ion supplemented by a $10 million credit. • This first project will be completed at the end of 1978. • FORM NO. 1121 (5-76) T ECHN I CA L D A T A • PROJECT: COUNTRY: TOTAL COST: Fruit and Vegetable Export Republic of Afghanistan $27.6 million I DA FINANCING: $18 mill ion, standard IDA terms. OTHER FINANCING: Government of Afghanistan, $5.23 million; Export Promotion Bank, $1 .23 million; Agricultural Development Bank of Afghanistan, $1.24 million; Sub-borrowers, $1 .90 mill ion. IMPLEMENTING ORGANIZATION: Export Promotion Bank Agricultural Development Bank of Afghanistan, Kabul, Afghanistan Afghan Raisin Institute, Afghan Seed Company, Kabul, Afghanistan Afghan Vegetable Export Company and Ministry of Commerce, Kabul, Afghanistan • PROJECT DESCRIPTION: The project aims to expand market access for horticultural exports such as raisins, vegetable seeds, potatoes, onions, and fresh fruit through the prov1s1on of cleaning, packing and trucking equipment, grading and export certification systems and marketing, and on-farm credits. It will be executed through two financial intermediaries, three entities and other sub-borrowers. PROCUREMENT: Purchases above $25,000 of equipment and materials {aggregated cost $7 million) which may be subjected to international com- petitive bidding will consist of vehicles, farm machinery, cold storage plants, refrigerat- ed trucks, greenhouse equipment, grading and packing equipment, poles, reinforcing rods and wires for trellising. The purchase of equipment and materials costing less than $5,000 each and limited to a total of $55,000 may be made on the basis of at least three indepen- dent price quotations. Common items, including vehicles and farm machinery, costing less than $150,000 may be procured on the basis of competitive bidding advertised locally with procedures acceptable to IDA incl·uding, for purchases greater than $25,000, timely notifica- tion to IDA member countries which have diplomatic representation in Afghanistan. The total amount of such purchase shall not exceed $4,500,000. Specialized items, including raisin drying mats, and greenhouse and laboratory equipment, may be procured on the basis of competitive bidding advertised locally. with procedures acceptable to IDA including timely notification to IDA member countries which have diplomatic representation in Afghanistan, and, additionally, international shopping if so desired. Contracts for small civil works may be procured on the basis of competitive bidding advertised locally. The total amount of such contracts not to exceed $5,000,000. CONSULTANTS: • Technical assistance tot~ling $4.8 million will be procured internationally . ECONOMIC RATE OF RETURN: 38% ESTIMATED COMPLETION DATE: 1984 - 0 - FORM NO. 1121 (5-76) T EC HN I CAL D A T A PROJECT: COUNTRY: TOTAL COST: Second Khanabad lrrigation Republic of Afghanistan $28.7 million • IDA FINANCING: $22 million, standard lDA terms. OTHER FINANCING: Government of Afghanistan, $5.58 mill ion; Project Farmers, $0.38 million; Agricultural Development Bank of Afghanistan, 0.74 mill ion. IMPLEMENTING ORGANIZATION: Khanabad Irrigation Project Department (KIPD), Kunduz, Afghanistan. Khanabad Extension Unit, Ministry of Agriculture, Kabul, Afghanistan. Malaria Institute, Ministry of Public Health, Kabul, Afghanistan. Agricultural Development Bank of Afghanistan, Kabul, Afghanistan PROJECT DESCRIPTION: The project aims to develop agriculture by constructing, rehabilitating and extending irrigation and drainage schemes~ extending agricultural credit to farmers and pruviding an efficient extension service. It also aims at controlling maiaria in the project area, and includes a feasibility study for a dam about 90 km upstream of the project area for water resources development. PROCUREMENT: Goods estimated to cost about $21.3 million will be procured either following international competitive bidding or after local competitive bidding; about $2.2 mill ion for fertilizer, seeds and other inputs to be financed under short-term agriculturai credit might be procured by the recipients of such credit through normal commercial channels. All procurement will be in accordance with IDA guidelines. All irrigation and drainage works (about $16.6 million) will be constructed under one contract, which will be awarded following international competitive bidding amongst prequalified bidders. Equipment and vehicles, drugs for the Malaria Control Program and farm equipment (about $4 million) will be • grouped into suitably sized contracts, which will also be awarded following international 11 competitive bidding. Domestic bidders for civil works contracts will be granted a margin , of preference of 7-1/2%; for locally manufactured goods a margin of preference of 15% will; be applicable. Procurement estimated to cost about $0.7 million, and consisting of (a) contracts for equipment and vehicles estimated to cost less than $20,000 each; (b) contracts for buildings estimated to cost less than $200,000 each; and (c) farm equipment and implements estimated to cost less than $20,000 each will be arranged following local competitive bidding procedures provided the aggregate cost of contracts awarded under these categories do not exceed respectively $150,000, $800,000 and $200,000. ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 25% 1982 - 0 - •