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

• World Bank 18'18 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NE\·JS RELF.ASE ~JO. 77/73 March 31 , 19 77 !DA NEWS RELEASE NO. 77/39 $25 MI LL I ON FOR A PO\/ER PROJECT IN MALAU I The World 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 mi 11 ion to help finance a third pmver 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 Malawi. The project's total financing require- ments are estimated at $78 million and will provide for ~O M\J of generating capacity v-then completed. The project consists of: a) a rock-fill darn ahout 7 meters high and 700 meters long; b) a pressure cut and cover conduit, headrace tunnel, penstock and tai lrace outlet system, and a powerhoLlse 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 Federal Republic of Germany and the Fonds Europeen de Oeveloppernent are expected to partiiipate in the financing of the project in an aggregate amount of up to about $34 mi 11 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 "Thi rd \Jindow"loan of $8 mi 11 ion wi 11 carry interest at 4.5~- An additional 4% wi 11 he paid to the Bank by the Interest Subsidy Fund, representing the difference between the Bank's current interest rate of 8.5% and the charqe to Malawi. The IDA credit of S8 riillion is for 50 years, including 10 years of grace. It is interest free except for a service charge of 0.75% to cover IDA's administrative costs. NOTE: Money figures are expressed in US dollar equivalents • • t=ORM NO. 1121 (5-76) T EC HN I CAL D A T A PROJECT: COUNTRY: TCTAL COST: Thi rd Pmver Malawi $ 78 mi 11 ion • BANK FINANCING: Sq million at 8.5% per annum for 20 years, including 4 1/2 years of.grace; $8 million on Thi rd \.Jindow Terms. IDA FINANCING: $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 up to $5 million. IMPLEMENTING ORGANIZATION: Electricity Supply Commission of Mala\vi (ESCOM), P. O. Box 30224 Chichiri, Blantyre 3, Malawi~ PROJECT DESCRIPTION: a) A rock-fill dam about 7 m high and 700 m long on the Shire River at Nkula Site; b) pressure cur and cover conduit, headrace tunnel, penstock and tail race outlet system of about 1300 m and a powerhouse designed for five 18-M\./ 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 civil 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- 1 ines 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~S: Two British consulting firms -- Watermeyer, 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 wi 11 supervise the construction of the project (about 160 man-months). ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 10% 1980 - 0 - •