Announcement of Twenty Five Million Dollars for a Power Project in Malawi on March 31, 1977

• World Bank 1818 H Street1 N.W., Washington 1 D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NE\-JS RE.LEASE tJO~ 77/73 March 31, 1977 !DA N~WS RELEASE NO. 77/39 $l5 MILLION FOR A Pm/ER PROJECT IN MALAl:JI The \vorld Bank announced today the approval of two loans and one credit from its affiliate, the International Development Association (IDA), for a total amount of $25 mill ion to help finance b third power project in the Republic of Malawi. The project is for the construction of the second stage of the Nkula Falls Hydro- electric plant on the Shire River of Mala1.vi. The project's total financing require- ments are estimated at $78 million and will provide for 90 M\J of generating capacity when completed. The project consists of: a) a rock-fi 11 darn ahout 7 meters high and 700 meters long; b) a pressure cut u,1d cover conduit, headrace tunnel, penstock and tail race outlet system, and a powerhouse designed to accommodate five 18-MW hydro units of which two would be installed at this stage; c) consulting services; and d) training. • The African Development Bank, the Commonwealth Development Corporation, the FedP-ral Republic of Germany and the Fonds Europeen de neveloppernent are expected to participate in the financing of the project in an aggregate amount of up to about $34 rn i l l ion. The S9 million Bank loan wi 11 be made to the Electricity Supply Commission of Malawi for a term of 20 years, including 4-1/2 years of grace and at an interest rate of 8.5?~ per annum. The Bank's "Third \Jindow 11 loan of $8 riillion will carry interest at 4.5~- An additional 4% wi 11 be raid to the Bank by the Interest Subsidy Fund, representing the difference between the Bank's current interest rate of 8.5% and the charge to Malawi. The IDA credit of $8 riillion is for 50 years, including 10 years of grace. It is interest free e.\cept for a se11ice charge of 0.75% to cover IDA's administrative costs. NOTE: Money figures are expressed in US dollar equivalents • • ~ORM NO. 1121 (5-76) T E CHN I CAL D A T A PROJECT: COUNTRY: TCTAL COST: Thi rd Pov1e r Malawi $ 78 mi 11 ion • BANK FINANCING: Sq million at 8.S% per annum for 20 years, i n c 1ud i n g 1• 1/ 2 ye a rs o f g race ; $8 mi 11 i on on Thi rd \n ndow Terms. I DA F I NAN C I NG : $8 mil lion on standard IDA terms. OTHER FINANCING (EXPECTED): African Development Bank $6 million; Common- wealth Development Corporation $13.7 million; European Development Fund $9.5 million: Federal Republic of Germany ~p tq $5 million. IMPLEMENTING ORGANIZATION: Electricity Supply Commission of Malawi (ESCOM), P • 0 • 8 ox 30 2 2 4 Ch i ch i r i , Bl ant y re 3 , Ma l aw i ~ PROJECT DESCRIPTION: a) A rock-fill dam about 7 m high and 700 m long on the Shire River at Nkula Site; b) pressure cut and cover conduit, headrace tunnel, penstock and tail race outlet system of about 1300 m and a powerhouse designed for five 18-MW hydro units of which two 18~MW hydro units would be installed at this as a first stage; d) consulting services; and. e) training. PROCUREMENT: The civl l works contract, which would be financed from Bank Group funds, is expected to be awarded shortly (April 7). The procurement procedures followed the Bank quide- lines for international competitive bidding. Procurement for items to be finan~ed by other institutions would be in accordance with the rules of the institutions concerned. CONSULTAN.TS: Two British consulting firms -- \.Jatermeyer, Legge, Piesold and Uhlman (civil works) and Kennedy and Donkin (mechanical and electrical works) -- are carrying out the detailed engineering of the project. It is expected that these consultants will supervise the construction of the project (about 160 man-months). ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 10% 1980 - 0 - •