Announcement of Five Million Three Hundred Thousand US Dollars Loan to Ecuador for Fisheries Project on September 4, 1968

r, -;,_/ 18 (! 8 H ST R EE T, N . W., WAS H I NG TO N :::, D. sC. 2 0 4 3 3 TELEPHONE: EXECUTIVE ,) 3-6360 Bank Press Relea,se No. 68/ 45 Subject: $5.3 million loan to Ecuador ·Se?ter.,ber 0 4, 196'3 ;; /' fo~,fisheries project Ecuador will be a9le to exploit more fully its abundant off-shore fish re- sources with the acquisition of modern tuna fishing vessels ~nd the training of )) key crew members for which the World Bank is ma~ing a }oan e'.quivalent to $5 .3'",}µil- •) ,, l lion. The project will ena1!_le the fishing industry to more than doubl~ its catch \ of !!tuna and inc~fase export earnings by an estimated $3 million annually, whic=h. represents nearly 45% of the foreign. exchange now ecrned by Ecuador ~,s ,J entir,,e fish~. ,, !; tne • ing industry. It will also support "~n activity which is hfJ~:.>ming important in ,::;_-::::::;.)·~-<"_./ country's effort to diversHy its economy. Ecuadorian fish production has incr.eased rapidly, since the early 1950s largely because of United States demand for shrimp, lobster and tuna which are plentiful off ~he coast of Ecuador. Most of Ecuador's ~una fleet, consisting of about 60 " vessels ranging widely in s·ize, uses the so-called pole and line method, which is \1 ' ~ less efficient than seine fishing. Furthermore, the vessels have no refrigeration plant aboard which further limits their range. The Bank loan will help to finance the design, construction and equipping of 12 tuna purse seiners with an over-all length of 90 feet, a carrying capacity of 150 short tons, equipped with 'freezing systems. Since purse seining is relatively new to Ecuador the,training of key crew members is essential to the success of the project. Funds from the loan will be provided for this purpose so that by the time '\:./ • the vessels are built they can be manned by Ecuadorian crews • /more  Bank 68/45 - Ecuador - 2 - The Bank loan also includes funds for feasibility studies of harbor facili- ., ties required for further increases in fish production, both for export and domestic markets. The studies will be made of two areas: the Santa Elena penin• sula and bay where landings are now made on beaches, and the port of Manta which is the base for the tuna fleet. Facilities at Manta can handle the new tuna vessels but further expansion will require extensions to berthing and servicing 0 facilities. The Food and Agriculture Organizatinn of the United Nations assisted Ecua- dorian authorities in the identification of the project and participated with the Bank in its preparation under the Bank/FAO Cooperative Program. The Executive Directors began consideration of this loan before the new interest rate of 6-1/2% went into effect on August 1, 1968 and agreed that, if and when approved, it should carry interest at the rate of 6-1/4% per annum. The loan was made to the Republic of Ecuador for a term of 20 years, including 6 years of grace. The Government will relend the portion of the loan allocated to the vessels • to its wholly-owned development fin,ance corporation, Corporacion Financiera , ·. Nacio11al (CFN) on the same terms. CFN will in turn lend these funds to private fishing companies and individuals for a term o.f 14 years, including two years of grace. Procurement of the vessels will be on the basis of international competi- tive b~~~ding. The National Fisheries Institute, under the Ministry of Industries and Com- merce, will operate the training program for key crew members and provide tech- nical advice to CFN. The harbor studies will be carried out by the National Planning Board with the assistance of consultants. The total cost of the project is estimated at the equivalent of $6.6 mil- lion, including working capital. The Bank loan will cover most of the foreign exchange component estimated at the equlvalent of $5.9 million. The remainder of the ~oreign exchange reqqired will be provided by the individual fishing enterprises which will also meet the local currency cost3 relating to their sub-projects. The Balance of the local currency expenditures for the harbor . studies and training programs will be covered by the Government. - 0 - •