Announcement of Four Million Five Hundred Thousand Dollar Loan to Colombia of March 24, 1955

FOR IMMEDIATE RELEASE INTERNATIONAL BANK FOR • RECONSTRUCTION AND DEVELOPMENT (WORLD BA~,~K) 1818 H STREET, N.W., WASHINGTON 25, 0.C. TELEPHONE: EXECUTIVE 3-6360 PRF,SS RELFASE NO. 394 SUBJECT: $4.-5 million loan in Colombia. March 24, 195S The World Bank today made .a loan of $4.5 million for the further expa.nsion of electric power in Cali,, ·One of the principal industrial centers of Colombia., where more power is essential to meet the heavy and growing demands of both industrial and residential consumers. Cali is Colombia's fastest growing city; since 19.38 the population has risen from 100.,000 to 36o.,ooo. During the past few years it has also been the sce,ne of extraordinary industrial growth. Scores of new businesses have been started there • and a nwnber of North American and Eur.opean firms have established subsidiary manufacturing plants in the area. The loan was ma.de to the Centra,l Hidroelectrica del Rio Anchicaya, Limi tada (CHID~L)., a publicly 01..ned corporation., which is to be the sole supplier of electric power to Cali. This is the second loan ma.de by the Bank :to CHIDRAL for power development11 A loan of $3,530,000 made in 1950 is helping to build a dam ani a hydroelectric power plant on the Anchicaya river about 30 miles from Cali, with transmission facilities. This plant has a capacity of 24,000 kilowatts of power and is expected to be in operation by June 1955. This power, however., will nQt long meet Cali's requirements., and the loan made today will provide CHIDRAL with the foreign currency needed for equipment to expand its power system by an additional 32,500 kilowatts of generating capacity. The • new facilities will consist of the. :installation of an additional unit at the Anchtcaya hydroelec·tric plant with a generating capacity of 20.,000 kilowatts,  i -2- \\ the construction of a 12 1 000-kilo/ratt thermal electric ~-:lant at Yumbo, just north /1 Ii of Cali, and additions to subst(ition capacity. The new hydroelectric unit at Anchicaya should be in commercial operation in November 1956, and the thermal plant at Yumbo., by the md of 1958. 'When the new facilities are in operation, the total generating capacity of the CHIDRAL system will be 67,000 kilowatts. The total cost of the expansion which is now being undertaken is estimated ~t the equivalent of $6.8 million. The loan of $4.5 million will pay for the imported equipment reqt1ired for the projects; CHIDRAL will finance the peso costs f~om its own resources and from local borrowings. The rate at which Ca.li and the surrounding area has been growing in population and in industrial importance can be attributed to location., transport facilities and excellent natural resources. Cali is located in the Upper Cauca • Valley., one of the most fertile agricultl1ral areas in Colombia. It is the center of an air, rail and highway n~twork connecting with other population centers, such as Bogota in the northeast, Popayan in the south, Manizales and Medellin in the north, and Buenaventura, Colombia•s· chief seaport on the Pacific. Cali has recently attracted many new industries, both foreign a.nd Colombia.n- owned, and its industrial potentialities are considered to be very substantial. It is now a principal producer of such items as rubber tires 1 pharmaceuticals, soap, vegetable oils and ':)everages. Many new manufacturing plants are backed by United States capital or are making well-lmown U.S. products on license agreements. r, The recent industrial expansion is the more noteworthy because f'or years Cali has been suffering from an inadequate powa- supply. The new Anchicaya plant coming ~to operation in June will ease the present shortage and the expimsion :,\ ',\ • or CHIDRA~• s system, for which today• s loan was made, will take ca.re of the expected demand through 1960. }. • 3 ... The" loan is for a term of 20 years and bears interest ot 4-3/1.% pe.r annW!l, including the statutory 1% commission charged by the Bank.. The loan is guaranteed by the Government or Colombia. This is the ninth Bank loan in Colombia, and brings the total of the Bank• a lending there to $78.8 million. or this amount, $13 nd.llion has been for the development of electric power, $30.9 million for hi~ways, $2$ million for railways and $9. 9 million for a gric ultural machinery. After having been approved by the Bank's Executive Directors, the documents for today's l<c>an were signed by Dr. Don Eduardo Zuleta-Angel., Colanbian Ambassador to the United States, on behalf of the Government of Colombia, by Dr. Luis- Palacios, Manager., on behalf of Central Hidroelectrica del Rio Anchicaya, Limitada, and by Eugene R. Black, President., on behalf of the World Bank • • •