Announcement of Ten Million Dollars IDA Credit to Ecuador for Livestock Development Program on November 25, 1970

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 70/52 ~ubject: $10 million IDA credit to Ecuador November 25, 1970 for livestock development program A lending program to increase livestock production in Ecuador, successfully launched three years ago with financing from the World Bank Group, will enter its second stage with the assistance of a $10 million credit from the International Development Association (IDA). Credits to ranchers for beef cattle development in the tropical Coastal Region will continue, and the program will be expanded to include credits to dairy fanners in the temperate Sierra Region. The Ecuadorian Government and the World Bank Group have been working closely • on the livestock development program which is designed mainly to meet domestic requirements for meat and milk products. It seeks to increase total cattle numbers and herd productivity through on-farm investment and improvements in animal husbandry, nutrition and health. A $4 million World Bank loan made in 1967 was fully committed earlier than had been expected because of the strong demand for credit by Ecuadorian ranchers. A $1.5 million IDA credit was there- fore extended in 1969 to keep the program adequately financed until the second stage was prepared. Under the second stage, loans will be made to some 350 additional beef cattle ranchers and to about 225 dairy farmers for pasture improvements, fencing, water- ing facilities, yards and dips, machinery, improved breeding stock and other re- lated inputs. Funds are also included for a research and training program for beef production, a seed production and certification program, and technical ~ assistance for project administration. /more IDA P.R. No. 70/52 - Ecuador -Livestock • - 2 In the next decade annual beef production in the project areas is expected to increase by about 7,500 metric tons and milk production by some 40 million liters, or 2si and 20% respectively, above present levels. Coordination and supervision of the program will continue t:o be carried out by a Project Connnission which includes representatives from the various Ministries, agencies and organizations concerned. A Project Director, supported by Regional Directors, will have technical responsibility for its implementation. Qualified livestock technicians will assist ranchers and dairy farmers in the preparation and supervision of their development plans. Funds from the IDA credit will be ch.anneled through the Central Bank for long-term lending by participating credit institutions. These will include the Banco Nacional de Fomento, a public entity, and Ecuatoriana de Desarrollo (COFIEC), a private development finance company, which are participating in the first stage of the program, and private commercial banks which are ex- pected to participate for the first time. • The participating banks will pay 8% per annum on IDA funds borrowed from the Central Bank, and will grant loans to the beef ranchers and dairy farmers at 12% interest with repayment periods of from 7 to 12 years, including 2 to 5-year grace periods. The total cost of the project is estimated at the equi- valent of $19~7 million. The IDA credit will cover 51% of the total; the balance will be financed by participating institutions, ranchers, dairy farmers and the Central Bank. The IDA credit to the Republic of Ecuador will be for a term of 50 years, including 10 years of grace, and will be interest-free. A service charge of 3/4 of 1% will be made for IDA's administrative costs. - 0 - •