Romania - Second Livestock Project

Document of : E The World Bank FOR OFMFCIAL USE ONLY Repr No. P-2480-RO REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE BANK FOR AGRICULTURE AND FOOD INDUSTRY WITH THE GUARANTEE OF THE SOCIALIST REPUBLIC OF ROMANIA FOR A SECOND LIVESTOCK PROJECT March 6, 1979 This documt h a retIeted dW%titon *d my be md by redplbualy In the peufonmee of their clal dutes&. Bs eotemb my mg iadbere be dibskoi wtheu Wod Bak auorizadIon.  CURRENCY EQUIVALENTS Currency Unit : Leu (plural Lei) 1. Official Rate Lei 4.47 = US$1.00 Leu 1.00 = US$0.22 2. Tourist Rate Lei 12.00 = US$1.00 Leu 1.00 = us$0.08 3. Conversion Rate for Traded Goods Lei 18.oo = us$1.oo Leu 1.00 = us$o.o6 The Official Exchange Rate of lei 4.47 per US$1 is used only for accounting purposes. The rate used for tourist transactions is lei 12 per US$1, having been revalued from a rate of lei 14.38 per US$1 in October 1974. Beginning in March 1978, a trading rate of lei 18 per US$l has been used to convert the prices of all traded goods; this rate is considered representative of the average cost of convertible foreign exchange. Fiscal Year January 1 to December 31 GLOSSARY OF ABBREVIATIONS BAFI - Bank for Agriculture and Food Industry CAP - Agricultural Production Cooperative ICA - Intercooperative Association Romagrimex Romanian Foreign Trade Company for Agriculture.  ROMANIA FOR OFFICIAL USE ONLY LIVESTOCK II PROJECT LOAN AND PROJECT SUMMARY Borrower: Bank for Agriculture and Food Industry (BAFI) Guarantor: Socialist Republic of Romania Beneficiaries: State enterprises and Cooperative complexes Loan Amount: US$75 million equivalent Terms: Repayable in 15 years, including a 3-year grace period, through semi-annual installments. Interest at 7% percent per annum. Relending Terms: Relending to State enterprises at 2 percent per annum during construction and 4 percent after construction. Relending to cooperatives at 3 percent per annum. State enterprise subloan maturities would be for up to 10 years but would take into consideration the capacity of respective subprojects to repay from incremental income generated therefrom. Relending to individual producers for 5 years at 3 percent per annum. For cooperatives, subloan terms would not exceed 18 years including three years of grace (see para. 52). The Government would bear the foreign exchange risk. Project Description: Agricultural credit subprojects to be financed under the proposed loan are estimated to include investments to be undertaken in 1979 and 1980 for 27 new fattening farms, 25 new crossbred gilt 1/ production farms, moderni- zation of 37 pig breeding and fattening units, a line of credit to agricultural cooperative members and private individuals, provision of facilities to augment existing pig nutrition research, and construction of slaughter- house, cold storage and processing facilities; this would include modernization of existing facilities to improve health and hygiene standards as well as provi- sion of new facilities. Annual incremental pork pro- duction resulting from project investments is expected to reach 200,000 tons (carcass weight) at full develop- ment. In addition, slaughtering and processing through- put capacities would be increased by 275,000 tons (carcass weight). The project is expected to reach full production in 1984 and face no special risks. 1/ Young sows. This document has a restricted distribution and may be used by recipients only in the performance | of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - Cost Estimates: Foreign % Local Exchange Total F.E.