Announcement of Peru to Implement Rural Development Project with World Bank Loan on March 29, 1984

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. 84/56 Contact: Ciro Gamarra March 29, 1984 (202) 477-5320 PERU TO IMPLEMENT RURAL DEVELOPMENT PROJECT WITH WORLD BANK LOAN Some 20,000 rural families in the tropical highlands of central Peru will benefit from a project designed to increase family incomes through the expansion of agricultural and forestry production. A World Bank loan of $40 million will support the project to develop the potentially rich Ceja de Selva region through controlled growth accompanied by conservation measures for the protection of the environment and indigenous communities. Project funds, to be used for credit, will enable farmers to finance land clearing and to purchase equipment and supplies for establishing small farms. The climate, with its abundant rainfall, makes the area suitable for production of coffee, citrus and other fruits, and vegetables. Two centers for agricultural research will be established to study crop diseases and to help train local farmers. Many roads in the region, most of which are now merely dirt tracks, will be upgraded to all-weather standards to provide year-round acc2ss to the three main towns, San Ramon, La Merced, and Satipo. Each of two marketing centers will have the capacity to process 14,000 tons per year of fruit, to be sold primarily in the country's largest market, Lima, the capital. To protect the area from erosion and landslides, forestry resources will be conserved, ensuring regular renewal of the timber. The project will establish nurseries and provide for setting up a local office of the National Forestry Agency and six forestry police control points. Other funding for the $67.4 million project will come from the government and beneficiaries ($10.1 million) and the Peruvian Agricultural Bank ($17.4 million). The World Bank loan is repayable in 17 years, including four years of grace, with a variable interest rate linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on undisbursed balances and a front-end fee of 0.25 percent on the amount of the loan. NOTE: Money figures are expressed in U.S. dollar equivalents.