Romania - Fourth Power Project

Documentof FILE COPY The World Bank FOR OFFICIAL USE ONLY Report No. P-2919-RO REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE INVESTMENT BANK OF ROMANIA WITH THE GUARANTEE OF THE SOCIALIST REPUBLIC OF ROMANIA FOR A FOURTH POWER PROJECT December 2, 1980 This document bas a retricted distribution and may be used by recipients only in the perfonnance of their oMcil ddutes. Its contents may not otherwise be disclosed witbout World Bank mntboriation.  CURRENCY EQUIVALENTS Currency Unit: Leu (Plural Lei) 1. Official Rate Lei 4.47 = US$1.00 Leu 1.00 = US$0.22 2. Tourist Rate Lei 12.00 = US$1.00 Leu 1.00 = Us$0.08 3. Conversion Rate for Traded Goods Lei 18.00 US$1.00 Leu 1.00 = US$0.06 The Official Exchange Rate of lei 4.47 per US$1 is used only for accounting purposes. The rate used for tourist transactions is lei 12 per US$1. Beginning in January 1981, a trading rate of lei 15 per US$1 will be used to convert the prices of all traded goods; this rate is considered representative of the average cost of convertible foreign exchange. Fiscal Year January 1 to December 31 GLOSSARY OF ABBREVIATIONS CEM - Country Economic Memorandum CIPEET - Industrial Central for the Production of Electrical Energy and Heat CIRE - Industrial Central of Power Network Enterprises COMECON - Council for Mutual Economic Assistance DEN - National Electrical Energy Dispatch System TCH - Trust for the Construction of Hydro Power Projects GNP - Gross National Product GWh - Gigawatt hour ICB - International Competitive Bidding ISPE - Institute of Power Studies and Designs ISPH - Institute of Hydro-electric Studies and Designs kV - Kilovolts LIBOR - London Interbank Offering Rate MEE - Ministry of Electric Energy MVA - Megavolt ampere MW - Megawatt ROMELECTRO - MEE's foreign trade enterprise  FOR OFFICIAL USE ONLY ROMANIA FOURTH POWER PROJECT Loan and Project Summary Borrower: The Investment Bank of Romania Guarantor: Socialist Republic of Romania Project Entities: State enterprises and Centrals of the Ministry of Electric Energy Loan Amount: US$125 million Terms: Repayable in 15 years, including a 2-1/2 year grace period, through semi-annual installments. Interest at 9.25 percent per annum. Project Description: The project consists of the mid 1980-mid 1983 time slice of the 1980-85 investment program of the two Centrals of the Ministry of Electric Energy (Industrial Central for the Production of Electrical Energy and Heat (CIPEET)) and Industrial Central of Power Network Enterprises (CIRE))and the department responsible for load-despatching (National Electrical Energy Dispatch System (DEN)). This program, which includes projects begun prior to 1980 and others to be completed after 1985, contains (i) 24 hydro-electric generation plants (total capacity 3,400 MW); (ii) 7 small hydro-electric generation plants generation plants (total capacity 80 MW); (iii) 6 straight steam condensing thermal generation plants (total capacity 4,280 MW); (iv) 17 thermal power and heat generation plants (total capacity 2,680 MW); (v) 27 transmission substations (6,700 MVA); (vi) 40G kV transmission lines (1,363 km); (vii) 220 kV transmission lines (206 km); (viii) distribution system expansion; (ix) other items. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  The principal risks to the project relate to the ability to execute the program of works on schedule and the possibility that the very rapid expansion in coal production will not be attained. In view of the close monitoring of progress of project implementation and the high national priority being accorded to the energy sector, the Borrower and MEE are expected to be able to take necessary actions to minimize these risks. Cost Estimate: The time slice of the program included in the project is estimated to cost as follows: I/ Local Foreign Total