China - Gansu Provincial Development Project

Docant of The World Bank FOR OFFICIAL USE ONLY Report No. P-4526-CHA MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOANI IN AN AMOUNT EQUIVALENT TO $2O.O MILLION AND A PROPOSED CREDIT OF SDR 119.1 MILLION (M150.5 MILLION EQUIVALENT) TO THE PEOPLE'S REPUBLIC OF CHINA FOR A GANSU PROVINCIAL DEVELOPMENT PROJECT April 17, 1987 IThis document has a r=tricted dtistbution and may be used by recipients only in the performance | |of their official dutiei. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVAlENTS Currency Unit - Yuan (Y) 1 Yuan - 100 Fen Calendar 1986 March 1987 $1.00 - Y 3.5 $1.00 - Y 3.7 Y1.0 = $ 0.28 Y1.0 - $ 0.27 FISCAL YEAR January 1 to December 31 ACADEMIC YEAR September 1 to August 31 WEIGHTS AND MEASURES I meter (m) - 3.28 feet (ft) I kilometer (km) - 0.62 miles 1 hectare (ha) - 2.47 acres 1 ton (t) - 1000 kg - 2,205 pounds I kg - 2.2 pounds PRINCIPAL ABBREVIATIONS NAND ACRONYMS USED ABC - Agricultural Bank of China GDP - Gross Domestic Product GEC - Gansu Economic Commission GITC - Gansu Investment and Trust Company GPC - Gansu Planning Commission GVIAO - Gross Value of Industrial and Agricultural Output ICBC - Industrial and Commercial Bank of China MOF - Ministry of Finance SDR - Special Drawing Right  CHINA FOR OMCIL USE ONLY GANSU PROVINCIAL DEVELOPMENT PROJECT Loan/Credit and Project Summary Borrower: The People's Republic of China Beneficiaries: Gansu Provincial Government Gansu Investment and Trust Company (GITC) Amount: Loan of US$20.0 million equivalent and credit of SDR 119.1 million (US$150.5 million equivalent). The loan/credit wculd be divided into three parts: Agriculture Component - $130.0 million equivalent IDA Education Component - $20.0 million equivalent IDA Industrial Diversifica- - $20.0 million equivalent IBRD tion Component $500,000 equivalent IDA Terms: Loan: 20 years, including 5 years of grace, at standard variable interest rate Credit: Standard Onlending Terms: The People's Republic of China would relend the proceeds of the loan/credit to Gansu Province on the same terms and conditions that apply to the Bank/IDA loan and credit. Subloans through GITC would be onlent to light and rural industrial enterprises. Subborrowers would pay a fixed interest rate of 8.5% on foreign exchange subloans (which would be denominated in US dollars) and assume the US dollar risk, while Gansu Province would assume the foreign exchange risk between the currency pool and the US dollar, and the interest rate risk. Subloans in domestic currency would carry a variable rate that would be consistent with rates charged for similar loans to light industrial and rural enterprises by the Industrial and Commercial Bank of China (ICBC) and the Agricultural Bank of China (ABC), respectively. The current rate for loans from ICBC and ABC is 10.08%, which would be the initial rate charged by GITC. Foreign exchange and interest rate risks on local currency sublQans would be borne by the Province. Financing Plan: Local Foreign Total ------(US$ million)-----