Colombia - Agricultural Credit Project

RESTRICTED FILE COPY Report No. P-716 This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE REPUBLIC OF COLOMBIA FOR AN AGRICULTURAL CREDIT LOAN June 5, 1969  INTERNATIONAL BANK FOR RECONSTRUCTION AID DEVELOPMENT REPORT AND RECO01ENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE REPUBLIC OF COLOMBIA FOR AN AGRICULTURAL CREDIT PROJECT 1. I submit the following report and recommendation on a proposed loan in an amount in various currencies equivalent to $17.0 million to the Republic of Colombia, the proceeds of which are to be made available to the Colombian Institute for Agrarian Reform (INCORA). PART I - HISTORICAL 2. The proposed loan would be the Bank's fifth loan for agriculture in Colombia, and the second for the benefit of INCORA. Two loans (18 CO and 108 CO) for $5 million each to finance the importation of agricul- tural equipment have been fully repaid. The third loan (448 CO) of $16.7 million was made in October, 1966 for a livestock development pro- ject; and the fourth loan (502 CO) of $9 million was made in June, 1967 to INCCRA for the first phase of the Atlantico No. 3 Irrigation Project. 3. The agricultural credit project was identified as being of high priority by a Bank mission which reviewed INCORA's program and operations in 1967, and was subsequently prepared by INCORA with assistance from the FAO/IBRD Cooperative Program. 4. A Bank mission to Colombia appraised the proposed loan during July - December, 1968, and negotiations were held in Washington during May 6 - 8, 1969. The Government was represented by Dr. )Aisael Pastrana Borrero and Dr. G6itanf'rttln (Ambassador and Counsellor respectively of the Colombian Embassy in Washington), INCORA by Dr. Hernando Durana and Dr. German Arias, and the Caja de Credito Agraria, Industrial y 1Minero by Dr. Eduardo Lopez. 5. The proposed loan, which would be the thirty-eighth made to Colombia, would increase the total amount of Bank loans to Colombia to $600 million (net of cancellations and including the $25 million loan to the Banco de la Republica for the third Development Finance Companies project which is submitted to the E :,cutive Directors together with this loan). IDA has made one credit of $19.5 million for highways to Colombia.  -2- The following is a summary statement of Bank loans and IDA credits to Colombia as at April 30, 1969: Amount (US$ million) Loan Undis- No. Year Borrower Purpose Bank IDA bursed Fully disbursed 19.5 Total (less cancellations) 313.8 345 1963 Acerias Paz del Rio, S.A. Steel 30.0 2.8 369 1964 Empresas Publicas de Medellin Power 42.0 17.5 448 1966 Government Agriculture 16.7 8.h 451 1966 Banco de la Republica Industry 25.0 L.7 499 1967 Empresa Nacional de Communica- Telecomunicaciones tions 16.0 12.2 502 1967 Instituto Colombiano de la Reforma Agraria Irriga- 9.0 8.8 tion 534 1968 Banco de la Republica Industry 1265 12.1 536 1968 Empresa de Acueducto y lWater Alcantarillado de Bogota Supply 1.0 11