Ecuador - Quito Power Expansion Project

g C - / 3 7 R E S T R I C T E D Report No. T.O. 102-a This document was prepared for internal use in the Bank. In making it available to others, the Bank assumes no responsibility to them for the accuracy or completeness of the information contained herein. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT APPRAISAL OF THE POWER EXPANSION PROJECT IN QUITO, ECUADOR March 9, 1956 Department of Technical Operations  TABLE OF EQUIVALENTS U.S. $1.00 - EcuadorianSucres 15.15 Ecuadorian Sucre 1.00 U.S. $0.066 Ecuadorian Sucres 1,000,000 U.S. $66,000  TABLE OF CON2E.ITS Page No. I, Introduction I IIo The Company and Its Facilities 1 III. The Power iMiarket 2 Existi ng Market 2 Estimated Future Market 4 IV. Tihe Project 4 V. Cost of the Project 6 VI. Method and Schedule of Construction 7 VII. Method of FinanciLng the Project 8 V1III. Financial Aspects 8 Earnings Record 8 Rate Structure 9 Estimated Future Earnings 9 Forecast of Cash Flow 10 Future Financial Position 10 rebt Service 11 Security 11 TX. Relation of Projeet to National Economy 11 X. Conclusions and Recorrmendations 12 Map  POI_ER EXPAINSEJCN P`IOJECT QCII TO, ECUADOR I.- Introduction 1. This report covers an appraisal of a project for the expansion of the generation, transmission and distribution facilities of the Empresa Electrica Quito, S.A. an autonomous pub'icly owned corporation, whnich supplies the city of Quito Nith electricity. The appraisal is based on field investigations by a Bank engineer, data supplied by the Empresa, and a prelimin- ary engineering study prepared by the John J. -larte Company, con- sulting engineers of Atlanta, Oeorgia. The project is estimated to cost the equivalent of about si9.2 million0 The Banlk has been requested to finance the foreign exchange cost of the project, estimated at the equivalent of $5.0 million. II. - The Company and Its Facilities 2, The Empresa Electrica Quito, S.xi. is a new cor- poration organized under an Executive Decree dated June 18, 1955. Its charter became effective in September, 195> after having been revie-wued by the Bank. The new corporation is the successor to the Empresa blectrica 1:unicipal whicn was a department of the 1uiunicipal- ity of Quito. The Empresa Slectrica Xunicipal was established in 1934 for the purpose of building the 3,400 kw G-uangopolo hydro plant cn the San Pedro River, a transmission line and a distribution system in Quito, to supplement the capacity of the American owned Quito Electric LJ ght and power Company which was then supplying the city of euito iLth electricity frora two hydro plants having a total installed capacit,y of 2,680 kw. In 19L6 the Zmpresa Electrica Mun- icipal purchased all of tlhe facil_ties of the American Company, in- cludinig its se-arately operated distribution system, and increased its own hydro generati;ng caipacity by h,000 lkw,. In l953 the Empresa adde-d 2,000 kw nore or hydro power to its capacity which brought its total installed capacity up to 12,080 kW. There have been no further additions since 1953. The ace of the equipment in each of the Erm,presa's plants, all of which are hydro, is given below:  -2- Year Years of