Announcement of Sri Lanka to Rehabilitate Tea Industry with Twenty Million US Dollars IDA Credit on May 6, 1982

. ' FOR IMMEDIA . TF RELEASE •World Bank 1818 H Street, N.W., Washington, D.C. 204331 U.S.A.• Telephone: (202) 477-1234 IOA NEWS RELEASE NO. 82/66 Contact: Hugh Blackman May 6, 1982 (202) 477-3879 SRI LANKA TO REHABILITATE TEA INDUSTRY WITH $20 MILLION IDA CREDIT Rehabilitation of the tea industry in Sri Lanka will be carried out with the support of an SOR 17.8 million ($20 million) credit, the International Development Association (IDA) announced today. Funds from the World Bank's affiliate for con- cessionary lending will help finance the tea rehabilitation and diversification project aimed at improving the quality of tea and reducing production costs by improving management and confining tea production to a smaller area. The $33.1 million project will also introduce spices and trees for fuelwood in the area released from tea production. To stem further deterioration of land and silting of water reservoirs, the four-year project will support soil conserva- tion measures. No increase in tea production is expected. Under the project, rehabilitation of tea plantations will involve block replanting (1,760 hectares) and infilling programs for replacing old bushes (3,900 hectares) as well as soil conservation works on 5,350 hectares. Spices and fuelwood trees will be planted on about 8,000 hectares of former tea dreas. To improve the processing of tea, 84 factories will also be renovated. Field and nursery equipment for tea, spices, and fue1wood ·trees will be provided as well as processing and storage facilities for spices. To ensure that the te.e leaves remain in top condition when moved from field to factory, the project wi1, provide new transport vehicles9 Living conditions of tea estate workers will be improved through the construction of 400 cottages, re- habilitation of 3,750 existing housing units, and provision of better water and medical facilities. Other provisions to be made under the project are staff development and training facilities, extension support for smallhoider tea producers, and technical assistance to decentralize management and strengthen the financial control systems. The IOA credit is for 50 years, including 10 years of grace; it carries no interest but bears a small annual service charge of 0.5% on the undisbursed balances of the credit, and 0.75% on the disbursed balances. , ,J NOTE: IOA credits are denominated in SDRs (Special Drawing Rights), which are valued on the basis of a 11 basket 11 of currencies. The U.S. dollar equivalent of the SOR amount of the IDA credit reflects the exchange rates existing I at the time of negotiation of the credit. ' '