Announcement of Malawi Borrows Seven Million Eight Hundred Thousand US Dollars for Projects in Industry and Agriculture on December 23, 1985

FOR IMMEDIATE RELEASE WTEBNI\TIG1iAJ. M0.1,iciA..oY .fuND JOINT LLJ;E[iY World Bank J .-1;-1:·· ·:;";o;: ,: 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: {202> 477-1"234 _, . ,_ ,- ~' ·. BANK NEWS RELEASE NO. 86/45 Contact: Loso Boya December 23, 1985 (202) 477-3294 MALAWI BORROWS $7.8 MILLION FOR PROJECTS IN INDUSTRY AND AGRICULTURE Malawi will continue its efforts to expand its industrial base to increase productivity in the agricultural sector and to diversify its agricultural exports with the help of a World Bank loan of $7.8 million. Part of the loan ($3 million) will be used by the Investment and Development Bank of Malawi Limited (INDEBANK) to provide term financing for viable projects in industry, commerce, transportation and tourism. INDEBANK'S excellent performance as a development finance company will be supported as it expands its lending to agriculture and begins to attract its own financial resources, which will allow it to become a more self-sufficient institution. INDEBANK and two other financial institutions will use $4.5 million of the Bank loan to provide credit for agricultural investments: irrigation and drainage; processing facilities; and equipment and machinery. This element of the project will support the country's overall structural adjustment program by financing investments that will improve agricultural productivity, and help diversify the agricultural base which is currently largely devoted to only three crops, tobacco, sugar and tea. This effort will permit increased stability in export earnings to support continued economic growth and development. The project will also provide funding for technical assistance to help INDEBANK expand its role in agricultural lending. INDEBANK will provide $2.22 million from its own resources, and other borrowings, totalling $4.33 million, will complete the financing for the $14.35 million project. The World Bank loan is for 15 years, including four years of grace with a variable interest rate, currently 8.82 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on undisbursed balances. NOTE: Money figures are expressed in U.S. dollar equivalents.