Announcement of Romania Receives World Bank Loans for Electric Power, Livestock, and Irrigation Works on December 24, 1980

~ World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 81/43 December 24, 1980 ROMANIA RECEIVES WORLD BANK LOANS FOR ELECTRIC POWER, LIVESTOCK, AND IRRIGATION WORKS The World Bank today announced the approval of three loans totaling $280 mil- lion to help finance the implementation of three development projects in Romania. A $125 million loan will assist the expansion of the country's thermal and hydro-electric power generation and distribution capacity as part of a power dev- elopment program intended to minimize oil and gas consumption. The loan to the !nvestment Bank of Romania is for 15 years, including 2-1/2 years of grace, with interest at 9.25% per annum. The agricultural sector wil 1 benefit from a $75 million loan for irrigation and drainage works in the southeastern part of the country and from an $80 million loan • to help finance investments in beef and dairy farms and processing facilities throughout Romania. Both agricultural loans are to the Bank for Agriculture and Food Industry (BAFI) for 15 years, including 3 years of grace, and with interst at 9.25% per annum. Al 1 three World Bank loans are to be guaranteed by the Sociali~t Republic of Romania. Electric Power Project The Government of Romania attaches high priority to the development of the electric power sector which it considers to be a prerequisite for the overall economic development of the country. Energy pol icy is aimed at diverting Romania's limited oil and gas reserves increasingly for use as feedstock in the chemical industry, while additional power generation is based on low grade domestic solid fuels such as lignite and shales, and on hydropower and nuclear power. The World Bank loan will assist the mid-1980 to mid-1983 time slice of the 1980-1985 investment program of the two Centrals of the Ministry of Electric Energy (Industrial Central for the Production of Electrical Energy and Heat-- CIPETT--and Industrial Central of Power Network Enterprises--CIRE) and the depart- ment responsible for load-despatching (National Electrical Energy Dispatch System --DEN). Under the $3.01 billion program supported by the World Bank loan, 31 hydro-electric generation plants, six straight steam condensing thermal generation plants and 17 thermal power and heat generation plants will be constructed. In addition, 1,363 kilometers (km) of 400 kilovolts (kV) transmis$ion 1 ines and 206 km • of 220 kV transmission 1 ines will be built and the distribution system will be expanded. NOTE: Money figures are expressed in U.S. dollar equivalents.  - 2 - .. .'1" ·• . ;.,;-rigation Proj~ct Crop production is expected to increase and stabilize in a total area of 158,485 ~ectares (ha) in the four separate regions of Bucsani, Buzau, Siret, and Prut in the southeastern part of Romania as a result of the construction of irrigation and drainage systems and related facilities. The project is expected to more than double labor productivity; and increase production of maize, wheat, and other crops from an annual but fluctuating average value of about $106. l mil lio11 to a relatively stable average value of about $242.8 mi 11 ior•• The $37503 million project supported by a $75 million World Bank loan, pro- vides for the construction of :~4 kilometers (km) of open canals, 187 km of pipe conduits, nine repumping, two fixed pumping,and 97 pressure pumping stations. Surface and tile drainage system~ and soil erosion control works will be con- structed. In addition, valley training and saline soil-- reclamation works will be carried out. The pr9ject also provides for the construction of concret~silos for a total capacity of 0.18 million tons to meet the additional cereal storage requirement. The project is expected to create about 2,000 new jobs during construction and 1,500 thereafter. Livestock Project Domestic consumption of beef and milk is expected to increase as a result of an investment of $412.2 million in livestock'subprojects supported by the $80 mil- ~ lion World Bank loan. At full development o~ the project, incremental production of milk is expected to reach about 3.8 million hectoliters (he), and an additional 40,000 tons of carcass beef and 33,000 breeifing heifers are expected to be produced. Substantial production efficiency improvem~t is expected through technical innova- tions including an improved design of cow housing and the introduction of herring- bone milking parlors into all dairy subprcjects, and through institutional improvements. The project will finance investments in 92 new and 32 modernized dairy farms, and in 17 new specialized breeding heifer production farms. It also wi 11 provide for 19 new beef fattening units, 109 improved pasture units, and milk and beef processing and storage facilities. A line of credit wi 11 be provided for individual producers. Assistance will also be provided for pasture ~mprovement to enable the country to make better use of its relatively underdeveloped pasture resource. 0 • toRM NO. 1121 •• (5-76) T ECHNI CAL DAT A PROJECT: Fourth Power COUNTRY: Socialist Republic of Romania TOTAL COST: $3,011. 5 million BANK FINANCING: $125 mill ion for 15 years, including 2-1/2 years of grace, at an interest rate of 9.25% per annum OTHER FINANCING: State Budget and Investment Bank IMPLEMENTING ORGANIZATION: Ministry of Electric Energy PROCUREMENT ORGANIZATION: ROMELECTRO Boulevard Lacul Tei, Sector 2 Bucharest 1 Romania TELEX:011~525 ROMELE PROJECT DESCRIPTION: Assistance for the mid-i980 to mid-1983 time slice of the 1980-85 investment program of the two centrals of the Mi~istry of Electric Energy (Industrial Central for the Production of Electrical Energy and Heat .(CIPEET) and Industrial Central of Pm11Jer Network Enterprises (CIRE) and the department responsible for load-dispatching (National Electrical Energy o·ispatch System (DEN). It includes:i) 24 hydro-electric generation plants (total capacity 3,400 megawatt (MW); ii) 7 small hydro-electric generation plants (tot~l 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 megavolt ampere (MVA)); vi) 400 kilovolts transmission lines (1,363 kilometers (km)); vii) 210 kilovolts transmission lines (206 km); and viii) distribution system expansion. PROCUREMENT: Equipment for hydro and thermal power stations and the trans- miss[on system, equipment for civil works on the hydropower facilities, and materials and supplies for construction,equivalent in cost to the Bank loan ($125 million),will be procured under international competitive bidding in accordance with Bank guidelines. Romanian manufacturers will be allowed a preference of 15% of the c. i .f. price or the applicable customs duty (whichever is lower). ECONOMIC RATE OF RETURN: 10. 7% ESTIMATED COMPLETION DATE: 1984 • 0 FORM NO. 1121 t •• (5-76) T E C H N I CAL DA T A PROJECT: Bucsani-Buzau-Siret-Prut Irrigation (BBSP) COUNTRY: Socialist Republic of Romania TOTAL COST: $375.3 mil 1 ion BANK FINANCING: $75 million for 15 years, including 3 years of grace, and an interest rate of 9.25% per annum OTHER FINANCING: State budget: $228 million Bank for Agriculture and Food Industry: $55.6 mil lion Sub-borrowers contributions: $16.6 million IMPLEMENTING ORGANIZATION: Ministry of Agriculture and Food Industry Bulevardiu Republ ici i, 24 Bucharest, Romania PROCUREMENT ORGANIZATION: Romanian Foreign Trade Company for Agriculture (ROMAGRIMEX), Str. Alex. Sahia 16, Bucharest, Romania (Cable address: ROMAGRIMEX, Bucharest, Romania TELEX: 11522 or 11693 ROMEX R.) PROJECT DESCRIPTION: Irrigation and drainage of 158,485 hectares (ha) gross (lSlf,350 ha net) in four separate sub-projects in the arA of Bucsani, Buzau, Siret and Prut in Southeastern Romania. It includes construction~ 184 kilometers (km) of open canals and 187 km of pipe conduits, nine repumping, two fixed and 97 pressure pumping stations; surface and tile drainage systems; soil erosion control; and valley training and saline soil reclamation works. Equipment for operation and main- tenance and farm machinery will be provided under the project. Concrete silos for a total capacity of 0. i8 million tons will also be constructed to meet the additional cereal storage requirement. PROCU.REMENT: Equipment and materials equivalent in cost tu i..he Bank loan ($75 mi 11 ion) 1,,. ;i 11 be procured under inter;iatior·a: competitive bidding in accordance with Bank guidelines. Romanian manufacturers ~111 b~ allowed a preference of 15% of the c. i.f. pric~ ; the appl i8able customs duty (whichever is lower). It is expected that foreign suppliers will win contracts e$tlmated to cost about $7.5 mil I ion for some of the construction and maintenance equipment. ECONOMIC RATE OF RETURN: 22% EST IMATED COMP LET I ON DATE: 1987 0 • 1,FORM NO. 1121 (5-76) T E C HN I CA L DA TA • • PROJECT: Livestock IV (Cattle) COUNTRY: Socialist Republic of Romania TOTAL COST: $412. 2 mi 11 ion BANK FINANCING: $80 million for 15 years, including 3 years of grace, and an interest rate of 9.25% per annum OTHER FINANCING: Sub-borrowers' contributions: $109. 1 million. Bank for Agriculture and Food Industry and Cofinanciers: $223.1 million IMPLEMENTING ORGANIZATION: Bank for Agriculture and Food Industry (BAFI), Strada Smirdan No. 3, Bucharest, Romania (Cable address: AGRCBANK, Bucharest, Romania; TELEX: 11622 AGBANC R.) PROCUREMENT ORGANIZATION: Romanian Forefgn Trade Company for Agriculture (ROMAGRIMEX), Str. Alex. Sahia 16, Bucharest, Romania (Cable address: ROMAGRIMEX, Bucharest, Romania; TELEX: 11522 or 11693 ROMEX R.) • PROJECT DESCR l PT I ON: Agricultural credit sub-projects to be financed under the loan will include investments to be undertaken in 1981-84 for: 92 new and 32 modernized dairy farms; 17 new specialized br0eding heifer production farms; lS new ~eef fattening units; 109 improved pasture un!ts; milk and beef processing and storage facilities; a line of credit for individual producers for milk, meat and breeding animal production; and technical services and research. PRO~UREMENT: Equipment and materials costing $78 million will be procured under international competitive bidding in accordance with Bank guidelines. $1.75 ~.1 llion of specialized equipment for feed and forage analysis · laboratories and milking machine testing and maintenance kits will be procured through limited international tendering after soliciting bids from suppliers in at least three countries. Romanian manufacturers will be allowed a preference of 15% of the c.i .f. price or the applicable customs duty (whichever is lower). It is expected that foreign supplies will win contracts for about $4.8 mill ion for slaughterhouse and meat processing equipment and specialized research equipment ~hich are not manufactured in Romania. ECONOMIC RATE OF RETURN: 22% ESTIMATED COMPLETION DATE: 1985 • 0