J ' • (\ 1818 H STREET. N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 69/1 Subj_~ct: \_.,,\ $6 milli~n road loan January 8, 1969 to Gabon A World Bank loan of $6 million to Gabon, announced today, will be the second made by the Bank for the const~uctlon of roads to open the interior of the country to logging operations. By making possible a~ increase in timber production, Gabon's second most impor~ant.industry, the roads will · make a substantial contribution to Gabon's £~reign exchange earnings and fiscal revenue. The Bank loan will be for a term of 20 years, including a four-yea1· • I'· lj grace period, and with interest at 6-1/21 • The greater part of Gabon's land area is covered with thick tropical forest=s which traditionally were its most important resource. In recent years the production and export of manganese, petroleum and uranium have II grown in importance, now accounting for ssi of the country's exports. However, the forest industry will continue to be important~ It accounts for.about 401 of export receipts and. 20% of the Government's revenues, //, not indluding general income taxes paid by logging operators, and employs more than twice as many people as mining. There is a strong demand for Gabon's timber, partic~larly o~oume, one of the most valuable tropical woods for the manufacture of plywood. Gabon and Congo (Brazzaville) are virtually the only producers of okoume. The d.rop in Gabon's timber production in recent years has been due to transportation difficulties,. Commercially exploitable timber in the /more ,,,:J Bank Pr~ess Release 69/1 - Gabon 2 .. forest areas along the coast and navigable rivers, called the "first zone", is nearly exhausted, and forest exploitation is movbig farther from the coast into the "second zone". This development requires considerable public investment in roads. Road investments, including the highway project fi- nanced by the $12 million BankJloan made in June 196,4, have enabled the logging companies gradually to_ transfer their activities ,fr,om the first to the second zone which now accounts~for more than half of the country's timber production. The project now being financed will open up additional areas of the . second zone. to logg:l:ng operations. It consists of the construction of two roa4s with a total length ~f 74 miles; feasibility studies of about 143 miles \ of additional roads and a bridge over the N'Gounie River and, if justified, • detailed en~ineering of about 112 miles of road and the bridge. It also in· eludes the procurement of maintenance equipment and spare parts. The two roads will open an area of about 1,230,000 acres for ti.Luber ex- ploitation. It is estimated that the stands of timber to which the roads will give access are sufficient.to produce about 2 million tons over the next 20 years. Private logging companies have taken up ,concess·ions and op~ra- tions will start as soon as the project roads are completed. In additi,1:>n to ·, generating substantial increases in timber production, one of the project roads will also improve transpor't connections to agricultural areas in ntlrth- east Gabon and serve as an international link with Cameroon. The Department of Public Works and Transportation in the Ministty of Public Works will be responsible for executing the prqject. Consultants will s;upervise construction and will carry out the feasibility studies and detaited -engineering. The project is scheduled for completion by the end of 1g71 at a total coat equivalent to $8 million. The Bank loan of $6 mil- lion will cover the estimated foreign exchange costs; The contract for road construction is being awarded on the basis of international competitive bidding and the road maintenance equipment and spare parts will be pur- chased on the same basis. A specialist from the Food and Agriculture Organization of the United Nations assisted in appraising the project under the Bank/FAO. Cooperative • Program. - 0 ..