Announcement of IDA Assists Pulp and Paper Project in Tanzania on May 23, 1983

FOR IMMEDIATE RELEASE • "' I • •.woddBank c? 1818 "H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 (/ IDA NEWS RELEASE NO. 83/86c Contact: Pushpa Schwartz May 23,, 11'83 (202) 477-3294 IDA ASSISTS PULP AND PAPER PROJECT IN TANZANIA The largest industrial venture underway in Tanzania, a pulp and paper plant, will receive further assistance from the I~ International Development Association (IDA), the World Bank's affiliate for concessionary lending. - The SDR 16. 7 million ($18 million) credit will support a $45 n4.llion follow-up project to the Mufinsli Pulp and Paper project, whicli was financed in 1979 by the World Bank Group, the Swedish International Development Authority/ the Federal Republic of Germany, the Commonwealth Development Corporation, the Kuwait Fund, the OPEC Special Fund, and the Nordic Investment Bank. Co-financing for the follow-up project will be provided by the Swedish International Development Authority, and the Federal Republic of Germany. At present, the plant, located in Iringa District, some 800 • kilometers southwest of Dar-es-Salaam, is under construction and will be completed in mid-1984. To strengthen the management, operation, and marketing capabilities of the Southern Paper ~~lls Company, the implementing agency, the project will provide m~nagement and training = a~s is tance. · 1 Because of the. high cost of importing coal and oil, the project will launch an energy conversion program which will enable the Mufindi plant to start production by uJing local fuel resources. The fkxisting power boiler will be modified to one tha,t can use fuelwood from the nearby Sao Hill forestry plantations, in addition to coal and fuel oil. Equipment to harvest, prepare, and deliver fuelwood to the plant will be provided.This will help the country to achieve significant foreign exchange benefits through import substitution. The project will also provide funds for the supply of imported raw materials for the first three years of the plant's operation. The IDA credit is for 50 years, including 10 years of grace; it carries no interest but has a small annuAl service charge (0.5% on the undisbursed balances of the credit and 0.75% on the disbursed balances). \~. NQ=i,E::-!:·. IP~::~: credits are·: Jlet1omi:µated in SDRs ( Special Drawillg Rights), • which are valued o'J1. ·t.he basis of a "basket" of currencies • The U.S. dollar equi-ialent of the SDR amount of the IDA credit reflects the exchange rates existing at the time of the negotiation of the credit.