Rhodesia and Nyasaland - Kariba Hydroelectric Project

R E S T R I C T E D P-112 This document was prepared for internal use in the Bank. In making it available to others, the Bank assumes no responsibility to them for the accuracy or completeness of the information contained herein. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATIONS OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE FEDERAL POWER BOARD OF THE FEDERATION OF RHODESIA AND NYASALAND June 14, 1956  INiTERIATI0N BAN 1K FOR REKTPITSUCTION' AI'ID ML0POINBT REPORT AN)D RECal,M1iOT CtS OP TE; PSIDELT TO THE EXECUTIE riRECTMRS OIU A P^sU7C?L-6D LOA1 TO THE FEiERAL P?OWER BOARD OF THE FEDERTION OF RHOLESIA A0,DI NYASALAIM 1. I submit the following report and recommendations on the application by the Federal Power Board of the Federationi of Rhodesia and iirasaland for a loan of 930 million for thae Kariba hydroeLectric project on the Zambezi River. PART I - IFTRODUCTION AH1D HISTORICAL General 2. The Federation of Rhodesia amd I,:yasalands wuhich came into existence less than taree years ago, consists of Southern Rhodesia, "orthern Ihodesia and Kyasaland. Southern Rhodesia is a self-governing colonky, while the other two are British protectorates aTminiistered by; the United Iingdom. The Federation itself has a constitutional status which is close to that of the independent members of the Commonwealth. The Covernment of the United Kingdom, however, has conatrol over the Federation's external affairs, and also over Federal legislation wihich would subject A.fricans to discrimi- natory disabilities or which relates to certain electoral matters or to constitutional amencdhents. 3. Before federation, the Ban1 made two loans in Central Africa: one of $28 million to Southern Rhodesia in February 1952 for electric power, and one of t14 million to Thorthern Rhodesia in Xarch 1953 for the RThodesia Railways. Both of these loans were guaranteed by the United Hingdom. Sfter it came into existence, the Federation assumed factual responsibility for eternial borrowings and accordingly gave to the Bank its additional guarantee of the two loans. Of these loans, both of which are now fully disbursed, the Bark holds altogether about 'i;33 million. Histor.r of Negotiations 4. In December 1953 the Bank was requested by the United Kingdom Government and the Federation to assist in financing hydroelectric power development in the Federation and at the same time the 'United Kingdom Govenment indicated that it would be agreeable to