INTERNATIONAL BANK FOR .RECONSTRUCTION AND DEVELOPMENT 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 73/23 Subject: $4.7 million loan to Panama May J, 1973 for livestock development The World Bank has appro:ved a $4. 7 million loan in support of a live- stock development project to be undertaken in Panama. The pr~j;c\ will require an estimated total investment of $13.5 million in the next five years. The Panamanian agricultural sector, including livestock production, provides employment for about half the country's 1.5 million population. It also accounts for some 75% of exports. Although agriculture's annual growth rate has been 5.3%, the sector's contribution to Panama's gross domestic product declined so•what in. recent • years. Panama is a net importer of meat, meat products and dairy products, and rising demand required imports amounting to $9.6 million in 1971. The project being helped by the World Bank is expected to make a sipifi- cant contribution to meet demand and reduce imports. It is expected to result in additional meat production estimated at 8,300 tons a year, or 30% of p~reaent total beef production, and 7,400 tons more of milk and dairy products, or about 10% of present domestic production, and about 17% of current milk and dairy products imports. The Government will also benefit through higher retul'D8 in taxes and fees which would be about $400,000 at full development. The project is the first stage of the Panamanian Government's long-range livestock development program. It includes investments in about 570 cattle enterprises, including small dairy farms, combined meat>' and dairy ranches, • breeding and fattening ranches, and pure breeding centers to upgrade the national herd. ........ / Bank P.R. No. 73/23 -- Panama -- livestock development • - 2 - The project is expected to help expand commercial livestock production, initiate new techniques for small viable dairy farms, and develop large-scale commercial livestock production in land reform settlements. Technical services for the preparation and supervision of investment plans, and consultant services will be provided under the project. Main on-farm invest- ments will be in livestock purchase, pasture development, seeds and fertilizers, fencing and purchase of agricultural machinery and equipment. Most of the participating farm/ranch enterprises will be in the provinces {if Chiriqui, Veraguas, Herrera, Los Santos and Cocle where beef and dairy cattle are concentrated. The project is expected to contribute to a more equitable income distribution by raising earnings in the agricultural sector. • The loan is being made to the Banco Nacional de Panama (BNP), with Government guarantee. BNP will administer the project and channel funds to the Banco de Desarrollo Agropecuario and participating private banks for lending to farmers and ranchers. Procurement will be through local c0D1Dercial channels. The World Bank loan will be for a term of 16 years, including five years of grace, with annual interest at 7~%; it would be on-lent to beneficiaries at terms ranging from 7 to 12 years, including grace periods from 3 to 4 years, at an interest rate of 10%. Seven financial institutions in Puerto Rico and the United States are participating in the Bank loan for a total ammmt of $610,000. They are: Security Pacific National Bank, Los Angeles; Central National Bank in Chicago; The First National, Bank of Washington, D.C.; Marine Midland Bank - New York; Seattle-First National Bank; Banco de Economias y Prestamos, San German, · Pue.rte Rico; and First Empire Bank - New York. - 0 - • 1818 H STREET. N.W., WASHINGTON 0. C. 20433 TELEPHONE: EXECUTIVE 3-6360 May 3, 1973 Tla1NICAL DATA PBOJIC'l': Livestock developaant COUNTRr: Panaaa Ta?AL OOST: $13.5 aillion BANK filfANCING: $4. 7 million equivalent at 16 years, including 5 years of grace, ~ inteTeat per annum. OTBEB. HNANCIHG: Panaaanian banks, Government, participating farmers. • EXECUTING AGEHCY: Banco Nacional de Panaa, Ave. Sa. y Calle 33, Panaaa l; Apartado 5220, Panama S. Cable Addreas: BANCX>NAL. PRDJEC'l' DESCRIPTIClf: Support develop•nt on about 570 cattle enterprises: small dairy fal'118; beef/dairy farms; breeding/fattening ranches; breeding/fattening ranches on land refo:m settlements; purebred breeding centers. Help finance a feaaibility study to serve as a basis for future livestock development on the Atlantic coast and to determine priorities of repona and phasing of development. PROCUREMENT: Goods and vehicles to be procured through existing comercial channels because the diversity, small size of individual purchases, free choice to be left to the individual borrower would 111ake interna- tional bidding impractical. TECINICAL ASSISTANCE: A consulting firm will be retained to carry out the feasibility study for li veatock development on the Atlantic coast. ESTIMATED COMPLETION DATE: June 1978. - 0 - •