SECONDARY&FEEDER RDS

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The Second Feeder Roads Project assists BNDE's program under which funds are onlent to sub-borrowers for construction and improvement of rural feeder roads. Three groups of states have been designated to make it easier for lower income states to participate in the project. The low-income states will contribute only 20% of project costs; middle-income states will contribute 30%, and the comparatively high-income state of Sao Paulo will contribute 40% of project costs. The Bank's contribution of US$110 million or 32.5% of total project costs (equivalent to the estimated foreign exchange cost), will match the contribution of the National Economic Development Bank (BNDE). The National Highway Department (DNER) will contribute 8.9% of project costs. The risks involved in the project are minimal since it is a continuation of a program being financed by Loan 1207-BR, commitments under which are well advanced. The new administration, which took office on March 15, 1979, has indicated that agricultural development will be given high priority, and past experience has shown that the Brazilian Government gives effective support to programs which it considers to be of importance.