FOR IMMEDIATE RELEASE- World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.* Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 90/85 Contact: Ciro Gamarra IDA NEWS RELEASE,NO. 90/77 (202) 473-8721 WORLD BANK AND IDA LEND $32 MILLION FOR CARIBBEAN PROJECTS WASHINGTON, May 24, 1990 -- The Caribbean Development Bank (CDB) will receive a $20 million loan from the World Bank and a credit of SDR 9.1 million ($12 million) from the International Development Atsociation (IDA), the Bank's concessionary lending affiliate, to finance development projects in the Caribbean region. This is the fifth World Bank group lending operation to the regional development bank, which is based in Barbados. CDB will use the World Bank and IDA funds to finance public and private- sector projects in agriculture, agroindustry, manufacturing, tourism, transpor- tation, water and sewerage, power and housing. Emergency recovery assistance for projects such as hurricane reconstruction will also be supported. All member countries of the World Bank and the CDB in the Commonwealth Caribbean, which are creditworthy and have not been graduated from World Bank lending, will be eligible to borrow World Bank funds under this project. The Commonwealth Caribbean consists of 12 independent countries--Antigua and Barbuda, the Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, St. Lucia, St. Vincent and the Grenadines, St. Kitts and Nevis, and Trinidad and Tobago--and five United Kingdom dependencies--Anguilla, Cayman Islands, Monse- rrat, Turks and Caicos Islands, and the British Virgin Islands. The Bahamas, with a per capita income level of $10,570, is no longer eligible for World Bank loans. Eastern Caribbean countries which have sound economic policies or would have agreed to adopt adjustment programs acceptable to the World Bank, IDA and the CDB, will be eligible for IDA financing blended with World Bank funds. Guyana may also be eligible for receiving part of the IDA credit once arrears to the multilateral institutions are cleared. Lending through the CDB enables the World Bank and IDA to support projects which otherwise would be too small for direct World Bank and IDA involvement. This arrangement increases both the value and diversity of development opera- tions in the region. The World Bank and IDA have been associated with the CDB since the latter's inception in 1970, providing technical assistance and four lending operations for a total of $63 million. The first three operations were lines of credit to finance projects which were too small and costly to administer. In April 1987, IDA made a $6 million credit to the CDB for an education project in five Eastern Caribbean countries. -2- In addition to the $32 million from the World Bank Group, the balance of the financing for the $102 million project will be provided by the CDB ($28 mil- lion), CDB's cofinanciers ($18 million), and participating enterprises ($24 mil- lion). The World Bank loan and IDA credit will be disbursed over eight years. The World Bank loan to the CDB is for 17 years, including five years of grace, with a variable interest rate, currently 7.75 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.25 percent on the undisbursed balance. The IDA credit to the CDB is for 40 years, including five years of grace; it carries no interest but has an annual charge of 0.75 percent on the disbursed balance and a variable annual commitment charge of up to 0.5 percent (currently zero percent) on the undisbursed balance. NOTE: World Bank money figures are expressed in U.S. dollar equivalents. IDA credits are denominated in SDRs (Special Drawing Rights), which are valued on the basis of a "basket" of currencies. The U.S. dollar equivalent of the SDR amount of the IDA credit reflects the exchange rates existing at the time of the negotiation of the credit.