Announcement of IDA Assists Integrated Rural Development Project in Sri Lanka on April 2, 1979

' FOR IMMEDIATE RELEASE eWorldBank ~818 H Street, N.W., Washington 1 D.C. 20433, U.S.A.• Telephone: (202) 477-1234 IDA NEWS RELEASE NO. 79/56 APRIL 2, 1979 IDA ASSISTS INTEGRATED RURAL DEVELOPMENT PROJECT IN SRI LANKA Sri Lanka will implement an integrated rural development project designed to increase incomes and living standards of about 170,000 farm families with the help of a credit of $20 million from the International Development Association (IDA), an affiliate of the World Bank. The $30 mill ion project will cover the entire administrative district of Kurunegala. It represents the first attempt in Sri Lanka to develop an entire district in an integrated manner. The project will serve as a model for rural development in other districts in the country. The project includes the rehabilitation of existing irrigation schemes accompanied by improved water management practices to fully exploit the irrigation potential; rehabilitation and improvement of coco- • nut lands; strengthening of agricultural extension services; improvement in the availability of agricultural supplies and services and credit; groundwater exploration; rural roads and rural water supply; health and vocational education. Sri Lanka has achieved social progress far beyond that of other countries with comparably low per capita incomes. Literacy, health and life expectancy are high; nutrition is adequate, and mortality and popu- lation growth rates have been declining. These impressive gains have been achieved despite generally low output and employment growth. The Government of Sri Lanka is currently engaged in the task of increasing food production, reducing the country's dependence on food imports and raising productivity, employment, incomes and 1 iving standards of the rural population. The project being assisted by the IDA credit is in support of the Government's efforts. At full development in 1991, the project is expected to lead to annua1 incremental production of about 32,000 tons of paddy and about 155 million coconuts together valued at about $21 million. As a result of the project, Sri Lanka will be able to save about $16 million in foreign exchange each year. The project will generate additional employment. Over two thirds of the beneficiaries will be small farmers with holdings of three acres or less and with per capita incomes below the national average of $200 per annum. The IDA credit to Sri Lanka is for 50 years with 10 years of • grace. It is interest free except for a service charge of 3/4 of 1% per annum to meet IDA's administrative costs. NOTE: Money figures are expressed in U.S. dollar equivalents. FORM NO. 1121 (5-76) T ECHN I CAL 0 A T A PROJECT: COUNTRY: TOTAL COST: Kurunegala Rural Development Sri Lanka $30 million • IDA FINANCING: $20 mill ion, standard IDA terms OTHER FINANCING: Government of Sri Lanka, Peoples Bank and Bank of Ceylon and participating farmers IMPLEMENTING ORGANIZATION: Project Coordinating Committee for Kurunegala District Integrated Development Project Kurunegala, Kurunegala District Sri Lanka PROJECT DESCRIPTION: It aims to assist the development of the District of Kurunegala in an integrated manner for purposes of raising productivity, employment, incomes and 1 iving standards and to develop a replicable model for rural development ~>r other districts in Sri Lanka. The project will provide for rehabilitation of existinq irrigation schemes accompanied by improved water manage-. ment practices to fully exploit the irrigation potential, and for programs for replanti . underplanting, intercropping and fertilizing of smallholder coconut plantations. The proj- ect will all strengthen agricultural extension services, improve the supply of input ser- vices such as fertilizer distribution and seeds supplies, and lay the foundation for a viable agriculture credit system. These directly productive investments will be complemen- ted by investments in transportation, health, education, water supply and rural electrifi- cation. PROCUREMENT: Equipment, vehicles and spares ($2.5 million) will be pro- cured after international competitive bidding (ICB) in accordance with IDA guidelines. A preference limited to 15% of the c. i.f. price of im- ported goods or the import duty, whichever is lower, will be extended to local manufac- turers in the evaluation of bids. Because most civil works ($6.5 million) will be labor intensive, relatively small, restricted to seasonal construction, scattered over a wide area, they are not suitable for ICB. ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 32% 1984 - 0 - •