Announcement of Nicaragua Borrows Twenty-Two Million Dollars for Power Project on April 14, 1977

e\1\/orld Bank 1818 H Street, I\J, \:\,.r Washingtori, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 77/85 APRIL 14, 1977 NICARAGUA BORROWS $22 MILLION FOR POWER PROJECT The World Bank today announced the approval of a loan of $22 mill ion to help ftnance a project for the development of electric power generation and transmission in Nicaragua. The loan to Empresa Nacional de Luz y ~uerza (ENALUF) is the ninth operation for the Bank in Nicaragua's power sector and brings the tctal of such assistance to $88.35 million. ENALUF grew out of an initial consolidation of several electricity companies that operated in its present concession areas. The effective • generating capability of ENALUF's national interconnected system is 193 Megawatts (MW). 1981. The installed capacity is expected to reach 428 MW by The project being ass:sted by the Bank loan includes the provision of the Nicaraguan portion of an interconnection line to Costa Rica and transmission and distribution to complement the facilities supplied under the Bank's eighth power project. The large increase of transmission and distribution facilities re.sulting from the project would allow ENALUF to provide electricity to 400,000 additional people. The project will also bring benefits to industry,commerce and agriculture. The Bank loan to ENALUF will have the guarantee of the Government of Nicaragua. The Joan is for 17 years, including 3-1/2 years of grace, with interest at 8-1/2% per annum. NOTE: Money figures are expressed in U.So dollar equivalents . • FORM NO. 1121 (5-76) • T E CHN I CA L DA T A PROJECT: Ninth Power COUNTRY~ Nicaragua TOTAL COST: $32.4 mill ion BANK FI NANC I NG : $22 million loan, for 17 years, including 3-1/2 years of grace, with interest at 8-1/2% per annum OTHER FINANCING: Empresa Nacional de Luz y Fuerza (ENALUF) IMPLEMENTING ORGANIZATION: ENALUF, Managua, D.N. Nicaragua, C.A. PROJECT DESCRIPTION: It consists of the constructfon of about 145 kilometers or a 230-kV transmission line for interconnection with Costa Rica; about 22 kilometers of a i38-kV transmission line; construction, addition or con- version of substations with about 122 MVA; relocation of about 75 MVA transformer cap~city, installation protective and metering equipment and circuit breakers; installation • of about 65 MVAR capacitors and of distribution lines and transformers; construction of a national load dispatch center and installation of equipment to operate the Honduras- Nicaragua-Costa Rica interconnection; and consultants services. PROCUREMENT: International competitive bidding (ICB) for all Bank- financed works and equipment except for (i) special imported protective rel2ying and metering equipment for substations amounting to about $0.35 million which is not suitable for ICB because of need for standardization and (ii) other small imported equipment amounting to $0.2 million required in small quantities. In accordance with the Central American Agreement on Fiscal Incentives for Industrial Development, manufacturers from the Central American Common t1arket (CACM), incl1!ding Nicaragua, will be allowed a regional preference of 15~ of the CIF price or the CACM preferential tariff (which is 50% of the applicable ir.1port duty) whichever is lower. CONSULTANTS: For carrying out the physical works of the project; preparation of 1) a master plan for power system expansion; 2) a study of alternatives and specifications for the national load dispatch center; 3) a nationwide tariff study; 4) implementation of a program of improvements of ENALUF manageme~t; and 5) the preparation of a sector organization study. ECONOMIC RATE OF RETuRN: 13 % ESTIMATED COMPLETION DATE: 1981 • - 0 -