Malawi - Local Government Development Project

Document of The World Bank FOR OFFICIAL USE ONLY FILE COPY Report No. P- 5720-MAI Type: (PM) RprN.P52-A ZEILJON, A/ X34392 / 711127/ AF6IN ReportNo. P-5720-MAI MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT IN THE AMOUNT EQUIVALENT TO SDR 17.6 MILLION TO THE REPUBLIC OF MALAWI FOR A LOCAL GOVERNMENT DEVELOPMENT PROJECT MAY 12, 1992 This document has a restricted distribution and ma} be used bv recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit - Malawi Kwacha (MK) US$1.00 - MX 2.96 (July 1991) MK 1.00 - 100 Tambala SDR 1.00 - MR 3.53 FISCAL YEAR (FY) April 1 to March 31 WEIGHTS AND MEASURES 1 millimeter (m) - 0.039 inch (in) 1 meter (m) = 3.28 feet (ft) 1 kilometer (km) - 0.62 mile (mi) 1 square kilometer (km2) - 0.386 square mile (sq mi) - 247 acres (ac) 1 imperial gallon (Ig) - 1.2 U.S. gallons - 4.55 liters 1 cubic meter (m3) - 220 Ig - 264.2 U.S. gallons ABBREVIATIONS AND ACRONYMS BCC - Blantyre City Council BMLP - Building Materials Loan Program CDP - Council Development Plans CSP - Country Strategy Paper CTA - Chief Technical Advisor DEVPOL - Statement of Development Policies DFLA - Development Fund for Local Authorities DLV - Department of Lands and Valuation DTCP - Department of Town and Country Planning ECMAC - Entrepreneurship and Capital Market Adjustment Program ESAF - Enhanced Structural Adjustment Facility GDP - Gross Domestic Product GOM - Government of Malawi HRID - Human Resource and Institutional Development Project ICB - International Competitive Bidding IDA - International Development Association LAs - Local Authorities LASC - Local Authorities Service Commission LCC - Lilongwe City Council LGDP - Local Government Development Project LGSC - Local Government Service Commission LCB - Local Competitive Bidding MHC - Malavi Housing Corporation HIM - Malawi Institute of Management MLG - Ministry of Local Government HOF - Hinistry of Finance HOW - Hinistry of Works NDF - Nordic Development Fund ODA - Overseas Development Administration OPC - Office of the President and Cabinet PPF - Project Preparation Facility PSIP - Public Sector Investment Project SCDP - Secondary Centers Development Project SRP - Special Rating Procedure STC - Staff Training College (Hpemba) TA - Technical Assistance THAs - Traditional Housing Areas USAID - United States Agency for International Development WTP - Willingness to Pay ZMC - Zomba Municipal Council  FOR OFFICALA USE 01 5) MALAWI LOCAL GOVERNMENT DEVELOPMENT PROJECT CREDIT AND PROJECT SUMMARY Borrower: Government of Malawi Beneficiaries: Ministry of Local Government Amount: SDR 17.6 million (US$24.0 million equivalent). Terms: Standard IDA terms with a maturity of 40 years. On-lending Terms: An amount of US$18.5 million will be onlent to selected local authorities to finance infrastructure investments, vehicles and equipment at 13-15 percent p.a. over 5-20 years depending on the component being financed. The Government of Malawi will bear the foreign exchange risk. US$ million Financing plan: IDA 24.0 Government and Councils 8.8 Municipal Development Program 0.3 ODA 0.8 UNDP 1.7 USAID 0.7 Total 36.3 Economic Rate of Return: 16Z Staff Appraisal Report: No. 10342-MAI IBRD No. 23560 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  -6- Schedule B Page 1 of 2 MALAWI LOCAL GOVZRNMENT DEVELOPMENT PROJECT Procurement Method and Disbursements A. Procurement Table 1.3: PROCUREMENT ARRANGEMENTS US$ mfflln- Projeci E lniwds ICa LCB CB 1/ OTHER TOTAL A. ChI Works and k1fsa7ctuo 15.0 3.8 18.8 (15.0) (0.5) (15.5) B. V.h*1. and Equ4xint 3.7 3.7 (3.7) (3.7) Subtot 18.7 3.8 22.5 (18.7) (0.5) (19.2) C. St idle, Uanig, 3.5 4.2 7.7 nAurt.nciM and adv1y (4.1) (4.1) D. Op. exp. and Ower 8.1 6.1 (0.7) (0.7) Sub.1W 3.5 10.3 13.8 (4.8) (4.8) Total Project Comt 18.7 3.8 3.5 10.3 36.3 (18.7) (0.5) (4.8) (24.0) Not.: Figures in parertheis are ti respecte amounts financed by IDA. 1/ Competitive bidding, I.@., procurement In line with cofinanciers' guidellnes.  -7- Schedule B Page 2 of 2 MALAWI LOCAL GOVERNMENT DEVELOPMENT PROJECT Estimated Costs and Financing Plan B. Disbursement Pereet of Expenditmree t be ffnanced Category krout of Crdit (USS mrillion) Cavl wori and iau r 13.4 100% of oreign opendr, 85% of loc dtp idtr Vehice and equIpment 3.1 100% of foreign expenditres Studb, tabing, c ulancies and 3.2 100% of al expernditu Incrnta operng ependitue 0.4 100% yew 1 and gradually reduced to 25s% af 5 yeam Reundkng of Proet Preparaton 12 Amount due Advance Unalocated 2.7 Tota credit aunt 24.0 Estimated IDA D _sbursemena CA Fiscal Year FY93 FY94 FY9S FY98 FY97 FY98 FY99 -- US$ rnlki 1.7 2.0 2.a 4.4 4.4 52 3.5 1.7 3.7 6.5 10.9 15.3 20.5 24.0  -8- Schedule C RBPUBLIC OF MALAWI LOCAL GOVEPURMNT DEVZLOPMENT PROJECT Timetable of Key Credit Processing Events Time taken to prepare: 18 months Prepared by: The Government of Malawi with IDA assistance 1/ First IDA mission: November 1989 Appraisal Mission Departure: May 1991 Date of Negotiations: April 1992 Planned date of effectiveness: August 1992 List of relevant PCRs: (i) Lilongwe Water Supply Engineering (Credit 1272-MAI, Report no. 8642 dated 05/07/90) (ii) Technical Assistance II (Credit 1428-HAI, Report no. 8958 dated 08/13/90) 1/ Bank staff involved in the preparation of the project include Anders Zeijlon (Task Manager), George Gattoni (Principal Urban Planner) and Gibwa Kajubi (Urban Planner).  Schedule D Page 1 of 2 M4AIt&WI LOCAL GOVERNNCENT DEVELOPMENT PROJECT Summary Statement of faLnk Group Loans and Credits A. Summary Statement of Loans and IDA Credits (as of May 12, 1992, USS million) Loan or Crdit Cscalig Number Yer Borrower Pu e Bank IDA Undisbursed Date 41 Credits closed 568.57 C15280MAL 1965 Muiawl Urban I 15.0 6.27 06/30/92 C15490-MAL 1985 Maial AQI reear:h 23.8 13.11 10/31/92 C162604AL 1986 MalavA Ext plurig 11.6 4.23 0V29/92 C17420.MAL 1967 Malawl U. wdcr 20.0 1.58 06/30/93 C17670-MAL 1987 Malawi Educ. scsr 27.0 6.14 12/15/93 C17680-MAL 1967 Malawi H4alVPop. I 11.0 .55 06/30/93 C18510-MAL 1988 MsaAI Agr,cult" 5.9 1.10 0630/95 C187904MAL 1988 MalavA Trarapot 1 13.4 5.23 06/30/94 C196604UAL 1989 MaLawI Agri mark 18.3 13.29 06/30/96 C19900-MAL 1989 MaIav4 Energy I 46.7 33.81 12/31/94 CX20360-MAL 1989 MabwI t.L devt 11.3 5.79 12131/94 C20690-MAL 1990 MaLaWI ra I 28.8 1&82 12/31/96 C20830-MAL 1990 MalavA Educ.sec. N 36.9 30.46 06/30/96 C21210-M&A 1990 Maaw Agi sec 70.0 1.13 12131/92 C22200-MAL 1991 Maiav PHN sec 55.5 49.16 0630/97 C22210-MAL 1991 Malawi Fin and ent 32.0 27.30 0630/97 C22250-MAL 1991 MalavA Fish.devt 8.8 8.11 06/30/99 Total number of Credits - 17 436.0 226.08 Loans 9 Loans closed 98.51 L26460-MAL 1986 MalavA Ind. and aga 7.8 1.38 06/30/93 TotaW number of Loans - 1 7.8 1.38 Total 106.31 1,004.57 of which repaid 38.12 19.65 Total held by Bank and IDA 69.18 984.92 Total undisbursed 227.46  -10- Schedule D Page 2 of 2 B. THE STATUS OF IFC INVESTMENTS IN MALAWI (as of March 31, 1992, US$ million) Investment Type of number FY Obligor Business Loan Equity Total 326-MAI 1976 618-MAI 1982 D Whitehead Textiles 10.8 10.8 & Sons 362-MAI 77/81/ Dwanga Sugar Sugar 11.3 11.3 85 Corp 434-MAI 1979 Indebank Dev't 0.6 0.6 finance 502-MAI 80/84 Halawi Tourism 2.1 2.1 Hotels Ltd 543-MAI 1981 614-MAI 1982 Ethanol Co Tourism 2.3 0.2 2.5 Ltd 832-MAI 1986 Leasing and Capital 0.7 0.2 0.9 Finance Co Market 741-MAI 1985 872-KAI 1987 Viphya Plywood 3.9 0.5 4.4 Plywood Total Gross 31.1 1.5 32.6 Commitments Less: Cancellations, 23.0 0.0 23.8 terminations, exchange adjustments, repayments, write- offs and sales Total Commitments held by IFC 7.3 1.5 8.8 Total undisbursed 0.0 0.0 0.0 Total disbursed 7.3 1.5 8.8  J IBRO 2356Q0 T. D~~~~, 1, S~~. ,, lb Da F , Salajut 16 0 M,S,,a a kt"t ' MALAWI Th. no hQI b.- Wre>Itd t I < \ by' Th. Wo,id Bo,,r -,H H,I-n0 -d- -d ,t, od h.nmo LOCAL GOVERNMENT -O.fO fs atTI. Wa,,d Boo 2 C-.ncru9. oi -howryid9onit CDEVELOPMENT PROJECT ond -h b-ud-.1e s _n-_ on th,, moo do no- olr On I 6. P. ,I rs. WoJi.-dRoG-p. o udgm nr on .t. .901 , -rntory 0 dR _ .ndors.,rmt.nt or oCc.o,onC. Of Ru/ - loch bodound.;. -- / L PROIECT SITES I' Icamod.In\ Lake - PRINCIPAL ROADS 0 TOWNS 5 tA. DISTRICT CAPITALS * NATIONAL CAPITAL * / i0 tf Chiounou DISTRICT BOUNDARIES Zi\MBIA - uom. - RECION BOUNDARIES INTERNATIONAL BOUNDARIES -/ 8 ' _ X vMa wi KILOMETERS 0 20 40 60 b0 100 A t Chqiu ( X A g ~~~~~~~~MILES o 2 40 . 0i --- f f 1S 20 dO 6 Jv V rd % {CS L ',\AOZNAMBIQUE 1 M~~ACHINGC\ ,NIOZ\A,\BIQUE. T. g RAzo N~ ~ ~~~~~sl Apri l 1 992