Rwanda - Second National Agricultural Research Project

Af~ '7 - 61L& Dooument of The World Bank FOR OFFICIAL USE ONLY Reput NO. P-5955-W 1EMORAND AND RECOMMENDATION OF THE PRESIDENT OF THE IDA TO THE EECUTIVE DIRECTORS ON A PROPOSED CREDIT SDR 10.9 MILLION TO THE RANDESE REPUBLIC FOR A SECOND NATIONAL AGRICULTURAL RESEARCH PROJECT SEPTEMBER 16, 1993 MICROGRAPHICS Report No: P- 5955 RW Type: MOP 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. CURRENCY AND EQUIVALENTS Currency Unit = Rwandese Franc (FRw) US$1 FRw 140 FRwl US$0.0071 (as of November 5, 1992) MEASURES AND EQUIVALENTS Metric System ABBREVIATIONS AND ACRONYMS EEC European Economic Community IFAD International Fund for Agricultural Development IRAZ Regional (Rwanda, Burundi, Zaire) Agricultural Research Institute (Institut de Recherche Agronomique et Zootechnique) ISAR National Agricultural Research Institute (Institut des Sciences Agronomiques du Rwanda) NARC National Agricultural Research Council NGO Non-Governmental Organization UNR National University of Rwanda (Universit Nationale du Rwanda) FISCAL YEAR January 1 - December 31 FOR OFFICIAL USE ONLY RWANDA SECOND NATIONAL AGRICULTURAL RESEARCH PROJECT CREDIT AND PROJECT SUMMARY Borrower: Republic of Rwanda Beneficiaries: National Agricultural Research Council (NARC) and National Agricultural Research Institute (ISAR) Amount: SDR 10.9 million (US$15.0 million equivalent) Terms: Standard IDA terms with 40 years maturity Onlending Terms: Proceeds of the Credit would be passed on as a grant to NARC and ISAR Economic Rate of Return: Not Applicable Financing Plan: Government : US$ 8.4 million Beneficiary Institutions : US$ 1.4 million Other Donors : US$ 11.5 million Private Sector US$ 0.2 million IDA : US$ 15.0 million Total : US$ 36.5 million 1/ Staff Appraisal Report: No. 11326-RW Poverty Category: Not Applicable Map: IBRD No. 24298 11 Including about US$4.4 million for taxes and duties. 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. MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE IDA TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO RWANDA FOR AN AGRICULTURAL RESEARCH PROJECT 1. 1 submit for your approval the following report and recommendations on a proposed development credit to Rwanda for SDR 10.9 million, the equivalent of US$15.0 million, on standard IDA terms with a maturity of 40 years to help finance a project for agricultural research. Parallel financing will be provided by France, Switzerland, Germany, Canada, the European Economic Community (EEC), and the International Fund for Agricultural Development (IFAD).2/ 2. Country Background. Rwanda, a small landlocked country with a total population of about 7.8 million increasing at an annual rate of 3.0 percent, is the most densely populated country in Africa (295 people per km. GDP per capita, estimated at about US$250 (1992), ranks among the lowest of the continent. More than 90 percent of the population lives in rral areas and derives its livelihood from subsistence agriculture and the cultivation of coffee and tea. From 1970 to mid-1980, Rwanda experienced financial stability, low inflation and sustained growth (averaging 4 percent per annum). Since early 1987, it has been faced with precipitous declines in world coffee prices and unfavorable climatic conditions which had an adverse impact on agricultural production. As a result, by 1989 real income per capita dropped by almost 16.5 percent from its 1986 level. The initial policy response to adverse economic developments was not appropriate and serious internal and external imbalances and declining per capita income persisted through the end of 1990. 3. To correct these economic imbalances, the Government embarked in 1990 on a comprehensive economic reorm program, supported by a first adjustment operation approved by the Bank in June 1991. This program has been implemented despite political difficulties and an internal conflict which have caused security problems which affected some areas of the country since October 1990. The Government's program aims at achieving macroeconomic stability, improving the competitiveness of the economy, and stimulating economic recovery. The Government is adhering to its undertakings under the adjustment program including maintaining positive real interest rates, but has failed to contain the budget deficit which reached 15 percent of GDP in 1992 (compared with a target of 6.6 percent, excluding grants). The higher than expected deficit was largely because of military expenditure, rising from about 2 to 8 percent of GDP. The peace agreement signed on August 4, 1993 should facilitate reaching an agreement with the Bank and the Fund on a new fiscal framework. The project is an important element of the strategy to improve Rwanda's growth and diversification performance, with the agricultural sector playing a key role. 4. Agricultural Strategy. The most important challenge the country has to address is the pressure of population on scarce land resources. Farm size is diminishing and holdings are becoming increasingly fragmented. Over half of one million farm holdings are less than one hectare. As arable land is no longer freely available, future production increases must come from productivity gains. The development model of the past, emphasizing self-sufficiency in a tightly regulated society, is no longer viable. Export diversification and growth is now a major 2/ The Country Assistance Strategy for Rwanda was discussed on June 14, 1992. A revised strategy is expected to be presented to the Board, together with a new Policy Framework Paper, later in FY94. 2 objective. To achieve this, the Government is committed, under the adjustment program, to deregulate agriculture and privatize parastatals active in trade. On the supply side, a major effort is needed in developing and disseminating appropriate agricultural technology to conserve the natural resource base while expanding the production of cash crops, improving the quality of export crops and introducing new, high-value added crops to provide farmers with the means t. purchase inputs. The strengthening of research and extension services is thus vital for Rwanda's survival. Extension services are being strengthened under an ongoing agricultural services project (Cr. 2026-RW). The proposed project would Improve the effectiveness of agricultural research institutions to generate appropriate technology. 5. Agricultural Research. Support to agricultural research was initially made through components within investment projects. An IDA credit (Cr. 1546-RW) for the first self-standing national agricultural research project was approved in December 1985. The National Agricultural Research Institute (Institut des Sciences Agronomiques du Rwanda, ISAR) was created just before independence in 1962, and established as a public enterprise under the tutelage of the Ministry of Agriculture. It was given the mandate for all publicly-funded research dealing with agriculture. This mandate is, however, not exclusive, as numerous rural development projects and regional extension services carry out adaptive research. Also the Faculty of Agriculture and the Department of Geography of the National University of Rwanda (Universit6 Nationale du Rwanda, UNR) undertake some agricultural research. Other significant research initiatives are funded separately by donors. Regional cooperation between Rwanda, Burundi and the Kivu Province of Zaire is reflected in the regional research organization, Listitut de Recherche Agronomique et Zootechnique (IRAZ). There is also close cooperation with three International Agricultural Research Centers (the Centro Internacional de Agricultura Tropical, the Centro Internacional de la Papa and the International Center for Research in Agro-Forestry). The main problem areas for agricultural research in Rwanda are: (i) insufficient responsiveness to identified farmer constraints and natural resources management considerations; (i) inadequate funding of research operating expenditures; (iii) inefficiency and fragmentation due to a lack of donor coordination; and (iv) insufficient collaboration with neighboring countries to make maximum use of economies of scale. 6. Project Objective. The principal objective of the project is to ensure that adequate technology will become available to farmers as a means to increase agricultural growth to at least 4% per annum. The project would improve quality, relevance and accountability for results of priority agricultural research programs through institutional reforms. To achieve this, emphasis would be on: expanding and moving faster towards on-farm testing of new technologies; refocussing research on conservation of the natural resource base; and seeking closer regional and international collaboration in adapting promising technologies developed elsewhere. 7. Project Description. To meet these objectives the project would: (a) support the establishment of an autonomous National Agricultural Research Council (NARC), through which all official funding for agricultural research would be coordinated; (b) support the transformation of ISAR into an autonomous institution, and reorganize and strengthen it to improve research efficiency and accountability for results; (c) strengthen internal linkages (research - farmer - extension) to ensure research relevance and to accelerate the dissemination of research results; (d) strengthen exgrap linkages and support the participation of Rwandese institutions and scientists funded through NARC in regional and international collaborative research programs; (e) strengthen human resources development and provide in-country and overseas training; (f) support research contracts with public and private institutions, and non-governmental 3 organizations (NGOs), both inside and o-tside Rwanda, funded through NARC; and (g) rehabilitate and renew research plant and equipment. 8. Project costs are estimated at US$36.5 million, including about US$4.4 million for taxes and duties. Financing will be on a parallel basis, shared with the following donors: France, Switzerland, Germany, Canada, the EEC and IFAD. The private sector will participate for US$0.2 million and ISAR for US$1.4 million. Project costs and financing arrangements are summarized in Schedule A. Procurement and disbursement arrangements are shown in Schedule B. A timetable of key processing events and the status of IDA operations are given in Schedule C and D respectively. A note on IDA-financed projects with substantial disbursement lags is provided in the attachment to Schedule D. 9. Project Implementation. The project would be implemented under the umbrella of NARC. The focus would be on fostering regional and international collaboration and maximizing the use of available research capacity by making funds available for ISAR, UNR, the National Science and Technology Institute, private sector operators, NGOs and other research institutes. An Executive Secretariat would ensure the coordination and mobilization of Government and donor funds for the execution of research contracts by pre-qualified institutions. The Executive Secretariat would be responsible for organizing independent scientific and financial audits, jointly endorsed by participating donors (including Government). Within ISAR, training of scientists would focus on participatory research methodologies; the users of research results and extension staff would participate in reviewing research proposals and evaluating research results; and iudget management would be decentralized at station level. Weaknesses identified in the first project in station management would be corrected through the appropriate training of key staff and further strengthening of central support services (laboratory and accounting). Agreement on terms of reference and a time schedule for the establishment of a Human Resources Management and Development Plan have been reached during negotiations. 10. Project Sustainability. Given the challenge facing Rwanda's agriculture, a research effort of about 0.4 to 0.5 percent of agricultural GDP is appropriate. The government contribution to this effort should not be less than the present 23 percent, assuming continued external support for the remainder. This is consistent with the allocations agreed upon in the 1993-1995 Public Expenditure Program. Therefore, the sustainability of the national agricultural research system depends for 77 percent on continued external support and for 23 percent on steady government commitment. To achieve this, the proposed project provides Government through NARC with a mechanism to enhance donor coordination for the funding of priority research activities consistent with the national agricultural research strategy. Under the proposed project, assurances have been obtained that the government contribution will remain at an appropriate annual level of FRw 110-120 million (about US$0.8 million). 11. Lessons Learned from Previous IDA Involvement in Agilculture. Seven Project Completion reports and one Project Performance Audit report have been issued. Common issues relate to: paucity of technical messages, insufficient knowledge of complex farming systems, weak links between research and extension, lack of experienced local managers, insufficient counterpart funding and unclear sector policies and priorities. The overall objectives of the National Agricultural Research Project (Cr. 1546-RW), which ended in December 1991, were generally achieved, in that ISAR now has a small core of experienced and well trained scientists; Government has developed a national agricultural research strategy (master plan) setting clear priorities, refocussing research on farmer responsiveness, and emphasizing natural resource management considerations; ISAR now has a reliable accounting system as a sound management 4 tool; and research installations have been rehabilitated. It was less successful in the following areas: (a) the master plan has not yet been used to guide research planning; (b) the donor coordination mechanism failed to produce coherence in research planning, execution and funding; (c) linkages with extension services and development projects and NGOs have suffered from a donor induced "enclave" approach; (d) ISAR's organizational structure is unsatisfactory and Its statutes as a public enterprise provide no autonomy in personnel management; and (e) staff Is not accountable for research results and senior researchers' time is too often taken by station management tasks. The proposed project design reflects these lessons in that: (a) decentralization and program review procedures would increase awareness of farmers constraints and bolster liaison with extersion services; (b) the creation of NARC would formalize donor coordination and foster cempetitiveness in research contracting; (c) research priorities would be determined by the master plan; (d) ISAR's organization and statutes would be reviewed towards greater autonomy in human resources management and better representation o' users' interests on its Board; and (e) staff training would focus on participatory research methodologies, quality enhancement and station management. 12. Rationale for IDA Involvement. The Bank Group's current assistance strategy in Rwanda was discussed by the Executive Directors in June, 1992 and stressed the need to get the country back on the path of sustained growth with equity. The long-term strategy is to further increase per capita income by reducing population expansion, diversifying the economy's sources of growth, improving income distribution and protecting the environment. In the agricultural sector IDA is assisting Government in formulating its agricultural strategy which would provide an enabling environment for agricultural export promotion and diversification and promote the private sector as well as initiatives and involvement by NGOs. The Bank is actively involved in agricultural development operations and technology dissemination in the food crop and forestry sub-sectors, through the Agricultural Services Project and the Second Forestry Project. It is also currently assisting Government in the implementation of its National Environmental Action Plan formulated in 1991. When the first agricultural research project was conceived, it was recognized that a long-term commitment of external donors, including the Bank, was essential. 13. Actions Agreed. A Letter of Agricultural Research Policy, supporting project objectives, was finalized and signed by the Prime Minister. The draft statutes for ISAR and NARC were revised by the Government to reflect the outcome of negotiations and submitted to the Council of Ministers. Agreement was reached on ISAR's 1993 consolidated budget and an action program to prepare a Human Resources Management and Development Plan. The establishment of NARC with an appropriate accounting system, the signing of an implementation agreement with NARC, the amendment of ISAR's statutes to provide for financial and management autonomy and increased involvement of users in setting the research agenda and evaluating its results, the staffing of key positions in NARC and ISAR, and the deposit by the Government of FRw 26 million into the NARC Project Account are conditions of Credit Effectiveness. To ensure funding adequacy and continuity, NARC will gradually introduce research contracting arrangements with ISAR and other pre-qualified research institutions. Not later then December 31, 1995, NARC will organize a mid-term review, to assess progress made with institutional reforms, and to decide on further steps with respect to the introduction of contractual arrangements for all research funded through NARC, as from January 1, 1996. 14. Environmental Aspects. The National Environmental Action Plan identified the following priority areas for action: (i) arresting and reversing soil degradation resulting from population pressures; (ii) preventing further exhaustion of soil nutrients from over-cultivation; (iii) seeking alternatives to the destruction of forests for fuel wood; and (iv) generating and 5 disseminating technologies linked to resources conservation. With only limited areas of natural forest and park land remaining, and population growth increasing, farmers in this densely populated country are the major custodians of its natural resources. Generating technologies for the sustainable use of these resources is one of the main objectives of the project. The environmenta! impact of the project should therefore be largely positive. 15. Program Objective Categories. The project would relate to the Bank's following program objectives: public sector reform, including improved funding of agricultural research, enhanced management autonomy and better scrutiny of the use of public funds by end users; poverty alleviation, through its focus on generating new and improved technologies for the sustainable production of food and export crops by small ftrmers; and promotion of women farmers, through a better understanding of their contribution to farm revenue under the farming systems research program. 16. Project Benefits. Benefits are expected from: agricultural productivity gains; improved management of Rwanda's natural resources; and increased foreign exchange earnings. Most of these benefits are obtained through improved priority setting, better research quality and relevance, and greater research efficiency (earlier availability of appropriate technology at the farm level, higher returns to investment, and lower cost). 17. Risks. The principal risks of the project are: implementation delays as a result of continued political instability; inadequacy of public funding; weak research management; and Government reluctance to rely on regional collaboration. The design of the project includes measures to reduce the non-political risks by providing an institutional platform and mechanisms through the NARC to address these issues. 18. Recommendation. I am satisfied that the proposed Credit would comply with the Articles of Agreement of the Association and recommend that the Executive Directors approve it. Lewis T. Preston President Attachments Washington, D.C. September 16, 1993 6 Schedule A Section A PROJECT COSTS AND FINANCING PLAN (US$ million equivalent) Estimated Costs: Fw (mittion US (thousan s % % Total Foreign ease Local Foreign Total Local Foreign Total Exchange Costs A. Stations 1.198 470 1 668 8,556 3,354 11r910 28 37 B. Research Program 1,117 554 1.671 7,977 3,959 11.936 33 37 C. Central Services 249 138 387 1,778 989 2,767 36 9 D. NARC Permanent 42 11 53 301 77 378 20 1 Executive Secretariat- E. Training 226 135 361 1.611 968 2.579 38 8 F. Consultant Services 20 354 374 140 2 531 2r671 95 8 Total Baseline Costs 2,851 1,663 4,514 20,364 11,877 32,241 37 100 Physical Contingencies 148 38 186 1,054 272 1,326 21 4 Price Contingencies 310 96 406 2,211 686 2,897 24 9 Total Projects Costs 3,308 1,797 5,105 23,629 12,835 36,464 35 113 Schedule A Section B Financing Plan: (US$ million) Local Foreig Total % Total Goverment 8.4 0.0 8.4 23 Beneficiary Institutions 1.4 0.0 1.4 4 Other Donors 7.6 3.9 11.5 32 Private Sector 0.2 0.0 0.2 1 IDA 6.0 9.0 15.0 41 Total 23.6 12.8 36.5 100 7 Schedule B Section A PROCUREMENT METHODS AND DISBURSEMENT Disbursement Categories Category Amount of the % of Expenditures to be Credit Allocated Financed (US$ 1000) (1) Civil Works 2,600 100% of foreign expenditures 90% of local expenditures (2) Vehicles & Equipment 100% of foreign expenditures (a) ISAR 1,900 90% of local expenditures (b) NARC 70 (3) Consultants Services 100% of expenditures (a) ISAR 1,000 (b) NARC 11000 (4) Training 500 100% of expenditures (5) Research Contracts 2,000 100% of expenditures (6) Operating Costs 100% of expenditures (a) ISAR 3,000 (b) WARC 200 (7) Refinancing of the PPF 1,500 Amount due (8) Unatlocated 1,230 TOTAL 15,000 Schedule B Section B Estimated IDA Disbursements: IDA Fiscal Year (US$ million equivalent) 1994 1995 1996 1997 1998 1999 Annual 2.1 2.4 3.0 2.4 2.7 2.4 Cumulative 2.1 4.5 7.5 9.9 12.6 15.0 8 Schedule B Section C Procurement Table (US$ '000 equivalent) Project Element ICS LCB Other N.B.F. Total 1. Civil Works 3,545 760 4,305 (3,191) (3,191) 2. Vehicles, Equipment 2,983 440 2,109 5,532 (2,230) (344) (1,574) 3. Consultants & T.A. j/ 2,671 2,671 (2,671) (2,671) 4. Training Long-term 174 1,067 1,241 (150) (150) Short-term 406 1,179 1,585 (350) (350) 5. Operating Costs ISAR 3,734 8,355 12,089 (3,490) (3,490) MARC 275 275 (247) (247) 6. Research Contracts (MARC) 2,490 6,276 8,766 (2,327) (2,327) Total 2,983 3,545 10,190 19,745 36,464 (2,230) (3,191) (9,579) 0 (15,000) Notes : Figures in parenthesis are the respective amounts financed by the IDA credit. N.B.F.: Non-Bank Financed. 1/ Services should be procured in accordance with World Bank guidelines: Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency (Washington, D.C. 1981). 9 Schedule C TIMETABLE OF THE PROJECT'S KEY PROCESSING EVENTS First IDA mission 1991 Preparation by Government 1991-1992 Preparation mission November 1991 Appraisal mission departure September 1992 Negotiations February 1993 Board presentation September 1993 Planned Date of effectiveness December 1993 Relevant Project Completion Report PCR First Agricultural Res6arch Project (Draft, October 1992) Preparation of this project was started under the National Agricultural Research Project (Cr. 1546-RW). 10 Schedule D Section A Page 1 of 3 STATUS OF BANK GROUP OPERATIONS IN RWANDA PFDBR25 - Summary Statement of Loans and IDA Credits (LOA data as of 7/30/93 - MIS data as of 08/11/93) Amount in US$ million (less cancellations) Loan or Fiscal Bonowe umse Bank M Undisb- Closing d Credit No. Yem urged Credis 250.57 26 Credits closed C16410-RWA 1986 Rwanda Hwys. VI 11.00 .36 12/31/92 (R) CA0081-RWA 1988 Rwanda Hwys. VI 10.00 9.15 12/31/93 (R) C16500-RWA 1986 Rwanda BRD IV 9.00 3.01 12/31/93 C16780-RWA 1986 Rwanda Family health 10.80 .23 06/30/94 (R) C16830-RWA 1986 Rwanda Education III 15.60 9.72 12/31/93 (R) C17830-RWA 1987 Rwanda Water sup. II 15.00 5.10 12/31/94 C17960-RWA 1987 Rwanda Pub.Sct.Mgmt 7.40 5.92 12/31/94 C18110-RWA 1987 Rwanda Forestry II 14.10 8.96 06/30/94 (R) C20260-RWA 1989 Rwanda Agr. Services 19.90 14.81 06/30/95 C20410-RWA 1989 Rwanda Urban Inst. 32.00 33.03 12/31/96 C21130-RWA 1990 Rwanda Public Eat 4.40 3.55 12/31/94 C21360-RWA 1990 Rwanda Trans. Sect 40.00 35.86 06/30/97 C21890-RWA 1991 Rwanda Second communication 12.80 8.93 12/31/95 C22270-KNA 1991 Rwanda Education Sect. Cr. 23.30 21.59 09/30/96 C22710-RWA (S) 1991 Rwanda SAC 1 90.00 38.57 12/31/93 C22720-RWA 1991 Rwanda Population 19.60 19.00 06/30/98 C23880-RWA 1992 Rwanda Food sec and social ac 19.10 19.52 12/31/97 C24560-RWA* 1993 Rwanda Energy Sector 26.00 25.79 12/31/98 380.00 262.62 TOTAL number Credits = 17 Total- 630.57 of which repaid 141 Total hc1d by Bank 615.84 and IDA Amount sold of which repaid Total undisbursed 6 Notes: * Not yet effective ** Not yet signed *** Total Approved, Repayments, and Outstanding balance represent both active and inactive Loans and Credits. (R) Indicates formally revised Closing date (S) Indicates SAC/SECAL Loans and Credits. The Net Approved and Bank Repayments are historical value, all other are market value. The Signing, Effective, and Closing dates are based upon the Loan Department official data and are not taken from the Task Budget file. 11 Schedule D Page 2 of 3 Implementation Issues 1. Overview. In all sectors in which the Bank is active, the Government has generally been receptive to the Bank's advice on sectoral development and general implementation issues. Following a decline in recent years, implementation performance has improved in FY93, despite the unsettled country situation, as a result of increased supervision and an intensified implementation dialogue. Disbursement for investment operations, which decreased in FY90-92, bounced back in FY93. In addition, the size of the portfolio has been reduced; in FY92 and FY93, five credits were closed but only two were approved. During this period, the undisbursed amount for investment projects has declined by 25%. 2. Several factors affected portfolio performance. Traditionally, implementation issues in Rwanda included institutional and management weaknesses, slow decision-making, inadequate accounting and auditing practices, and cumbersome procurement procedures. Since the war erupted these problems were compounded by shortages of counterpart funding and disruptions of project activities due to hostilities and government instability. To address the deterioration in performance, the Bank intensified supervision and strengthened the resident mission's involvement. The country dialogue focussed on sensitizing the Government of the critical linkage between substantially improved portfolio implementation and availability of new Bank assistance. 3. As a result of increased supervision, the performance of the portfolio improved noticeably in FY93. The Bank carried a Country Portfolio Performance Review (CPPR) in Kigali in July 1993 to discuss with decision makers and managers implementation issues and seek concrete actions for further improvement to the portfolio. The CPPR was well attended by government officials and project managers and generated considerable interest. As an important outcome of the CPPR review, the Government is in the process of streamlining its PIP to take account of severe fiscal constraints. Project directors are assessing their funding requirements for 1993 and 1994 as a basis for a detailed agreement on counterpart funding for Bank-financed projects to be reached shortly. Projects which are no longer high priority under present circumstances will be adjusted or cancelled. 4. Progress in improving the portfolio. The implementation of the Agricultural Services Project (Cr. 2026-RW) has improved after a staff member was posted in Rwanda to intensify the supervision effort. The Closing Date of the Second Integrated Forestry Credit (Cr. 181 1-RW), which has had serious implementation problems (with the exception of the Nyungwe component which has been progressing well) has been extended to complete a series of studies and pioneering actions in support of the preparation of the forthcoming Environment Project. The Fourth Credit to the Rwandese Development Bank (Cr. 1650-RW) has been entirely committed and is expected to close as scheduled on December 31, 1993. A restructuring of the Public Enterprise Reform Project (Cr. 2113-RW) is underway. Procurement problems under Highway VI (Cr. A0081) have been resolved; construction of earth roads was started in late 1992 and is expected to be completed within the next two years. Under the Transport Sector Project (Cr. 2136-RW), construction of the Gitarama-Kibuye started in June 1993 as an agreement on resettlement of the affected population was reached. The Water Supply II project (Cr. 1783-RW) was affected by the hostilities; with security reestablished implementation will resume in the project area. The Urban Institutions Project (Cr. 2041-RW), which has progressed slowly, is being restructured. Good progress has been made in improving the disbursement performance of the Family Health Sector Project (Cr. 1678-RW) following a change in management, which justified the extension of its closing date to June 30, 1994, at which time it will be fully disbursed. The credit for the Third Education Project (Cr. 1683-RW) will be closed in December 1993; almost all physical targets have been met. The Population Project (Cr. 2272-RW) suffered from poor management. New arrangements have been agreed with the Government, recently. The Education Sector Project (Cr. 2227-RW) has had a slow start because of co-financing problems. These problems have been resolved and implementation is expected to improve. The Credit for the Food Security and Social Action Project (Cr 2388-RW) has been declared effective recently after a long delay due to the Government's inability for political reasons to appoint the Minister in charge of Credit ratification. 12 Schedule D Page 3 of 3 STATUS OF BANK GROUP OPERATIONS IN RWANDA B. STATEMENT OF IFC INVESTMENTS IN RWANDA EXPRESSED IN US$ (June 30, 1993) Amount Investment -----------Amount---------- Number XWE ohlimoS Type of Business Loan Egujty Total 337-RW 1975 Sorwathe Tea processing and marketing 0.53 0.53 470-RW 1979 Sorwathe 0.23 0.06 0.29 764-RW 1985 Sorwathe 0.29 0.29 1028-RW 1988 Sorwal Manufacturing (*) 0.20 0.20 Total Gross Commitments: 1.05 026 31 Less: Cancellations, termination, exchange adjustments, 1.05 0.06 1.11 repayments, write-offs, and sales Total commitments hold by IFC 0.00 0.20 0.20 Total undisbursed 0.00 0.00 0.00 Total disbursed 0.00 0.20 0.20 () Loan guarantee of USS42.1 million provided by IFC. IBRD 24298 輪