Announcement of IDA Credit to Help Improve Irrigation System in Nepal on January 20, 1983

FOR IMMED1.ATE RELEASE · eWorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 ~ IDA NEWS RELEASE NO. 83/36 Contact: Hugh Blackman January 20, 1983 (202) 477-3879 IDA CREDIT TO HELP IMPROVE IRRIGATION SYSTEM IN NEPAL About 4,700 small farm families in Nepal will benefit from the second phase of an irrigation project supported by an SDR 15.1 million ($16 million) cre~it from the International Development Association (IDA). IDA is the concessionary lending affiliate of the World Bank. The Bhairawa-Lumbini Groundwater Project, begun in 1976, is the first relatively large size tubewell development scheme in Nepal. The follow-up project will ensure effective operation and management of works built under the first phase, due for completion by mid-1983. With the help of an IDA credit of $9 million, 64 tubewells have been constructed under the first project to irrigate 7,600 hectares in the Terai region of southern Nepal. In addition to completing works and services under the first phase, • the second IDA credit will finance the installation of 15 tubewells on a pilot basis. If the new systems prove to be more efficient and more suitable for Nepal, they will be used in future groundwater development projects, Funds will also be provided to maintain 28 wells constructed in the central Terai under the Birganj Irrigation Project, completed in mid-1981. The training and visit system of agricultural extension will be strengthened in the entire Rupandehi District, comprising 75,000 hectares of agricultural land. The extension effort will focus on farm water management and on improved use of high yielding variety seeds for major crops. With tubewell irrigation, annual foodgrain production of rice, whea-.. . , and maize will increase by about 185% over five years, to 27,300 tons. The average per capita income of project farmers is expected to double under the second phase from $67 to $148, nearing Nepal's per capita income of $156. Employment in agricultural as well as non-farm sectors will increase as a result of additional need for marketing, transport, and processing facili- ties. Another project benefit will be safe drinking water from the tubewells. The Kingdom of Nepal will provide $3.2 million towards the $16 million second phase project. The IDA credit is for 50 years, including 10 years of grace; it carries no interest but has a small service charge (0.5% on the undisbursed balances of the credit and 0.75% on the disbursed balances) . • NOTE: IDA credits are denominated in SDRs (Special Drawing Rights), which are valued on the basis of a "basket" of currencies. The U.S. dollar equivalent of the SDR amount of the IDA credit reflects the exchange rates existing at the time of the negotiation of the credit.