Announcement of Bolivia to Receive First World Bank Structural Adjustment Loan in Latin America on June 5, 1980

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.* Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 80/115 June 5, 1980 BOLIVIA TO RECEIVE FIRST WORLD BANK STRUCTURAL ADJUSTMENT LOAN IN LATIN AMERICA The World Bank has approved a $50 million loan to Bolivia to help the country carry out a program of economic recovery and structural adjustment. This is the first structural adjustment loan to a Latin American nation since the World Bank decided to expand the scope of its non-project lending to developing countries. The loan will provide $48.7 million for general balance of payments and budgetary support for the government's economic recovery program. Foreign exchange will be used for essential imports of raw materials, intermediate goods, spare parts, and capital goods. The loan will finance about 8% of such imports in 1980. The remaining $1.3 million will be made available to finance technical studies in the areas of mining tax reform and agricultural export promotion, and prefeasibility studies in mining and agriculture sectors. The loan will be disbursed in two tranches of $25 million each. The first tranche will be available for disbursement after the loan is declared effective; the second, after a performance review by August 31, 1980. Procurement under the Bank loan will be made from member countries of the World Bank and Switzerland. Purchases will be on the basis of normal commercial practices, except that contracts of over $5 million will be procured by international competitive bidding. The loan will assist the government in implementing a realistic public investment program and will help ensure, through counterpart funds generated, that execution of high priority projects is not delayed because of the government's fiscal problems. The loan will also help in the formulation and adoption of a more export- oriented long term development strategy, based on selective action in the agricultural and mining sectors. The $50 million loan to the Republic of Bolivia is for a term of 20 years, including five years of grace, with interest at 8.25% per annum. NOTE: Money figures are expressed in U.S. dollar equivalents.