Announcement of Sixty Six Million Dollars Thailand Loan Signed on September 12, 1957

:;:1,,µ'~~ r;)6JbD Iii C ~ (\ ;o 0= ~OR IMMEDIATE RELEASE INTERNATIONAL BANK FOR R--ECONSTRUCTION ,:AND DEVELOPMENT 1818 H STREET, N.W., WASHINGTON 25, D. C. TELEPHONE: EXECUTIVE'3-6360'' ~RESS RELEASE NO. 499 SUBJECT: $66 ;nillion Thailand loan signed. September }2, 1957 The World Bank and the Ya.nhee Electri'city Authority of Thailand to~~y \ ,-:, ,: )r I: ;_::::!} signed an agreement for a loan equivalent to $66 million to help finance the "' Yanhee multipurpose p:t{6ject [! for the development of electric power, flood control and irrigation. The Yanhee projeet-··is ;·tl't~ ---l~ge:::t ever undertaken in Thailand and one of the largest\of its kind in Asia. When its :full power potential is realized, • \ installed geri~~rating capacity will be 560,000 kilowatts and a national power grid will bring power to 33 of Thailand's 71 provinces. The power to be ultimately generated by the project should be suf'ficient to meet most of Thailand's needs for the next 15 to 20 years and Will be an important impetus to further economic growth. The Bank's loan will help finance the first stage of the project. That stage includes the construction of a dam 500 feet high,on the Ping(River in western Thailand and the installation of 140,000 kilowatts of generating capacity to supply Bangkok and 11 other conmrunities with electricity. The dam will help (;0nt:;.·ol floods 'Which periodically cause severe crop damage; and, by providing water for irrigation in the dry season, it will make possible an increase in agricultural production valued at about $15 million annually • • The loan had been approved by the Bank's Executive Directors on August 20, and signing, awaited the enactment of legislation by the Thai  - 2 - National Assembly establishing the new Ya.nhee Electr:icity Authority, which \\ -was to be the borrower. The Authority was established by law on September 8, 1957 as an inde~~ndent government agency to.operate the Ya.nhee project and (,'/' all large power generati11g plants and transmissidh facilities in central Thailand. The loan is for a term of 25 yea.rs and bears interest of 5-3/4%, L including t9,e ,) 1.% commission which is allocated to the Bank's Special. Reserve. Amortization will begin 0~1tober 15, 1963. l} The 1oa.n is guaranteed by the Kingdom of' Thailand • .·. ~he loan documents were signed today by Sawet Piampongsant, Deputy ~ .... , ·-·-· .. - II. ,, Kambhu, Member of the Board, on behalf of the Yanhee Electricity Authority; • and by Eugene R.; Black, President, on behalf of the World Bank . Description of' the Yanhee Multipurpose Project The Yanhee project will be located 2,tO miles northwest of Bangkok on the Ping River, which is part of the Chao Phya River system. The first stage, tor which the Bank's loan was made, consists of the construction of a 500-foot high arch dam {t~ be called the Bhumiphol Dam in honor of the King of Thailand) across the Ping River to create a. reservoir capable of storing 12 billion cubic meters of water; a powerhouse installed with two generating units having a tota: capacity of 140,000 kilowatts; a switchyard; two transmission lines to Bangkok with a total length of 650 miles, which will supply 11 load centers en route; and the necessary substations. The total cost of the first stage of the project is estimated at the • equiva.lent. of $100 million. The Bank's loan ·will be used for imported equip- ment, materials and. services, for which contracts will be awarded on the basis of internation~J- bidding.  /l / •• - 3- Electric --PCWf"!' 1) (/ Electric power development is the most important element of the Yanhee G project. For several years Thailand has been suffering from an acute power shortage, particularly in Bangkok, the capital and largest city, where dem~d has risen at the rate of 15% a.nnua!ly during the p~lst six years. Despite ' . \ -; ,:1 \ strict power restrictions, publ.ic facilities have been inadequate to meet the needs and most large consumers have had to install their own generating units. T(~;>-ft minimum power needs before the Yanhf!e power plant comes into ·,________ ,.~ operation in 1963, twenty diesel units with a total capacity of 20,000 kilo- watts will be installed in the Bangkok area~ a.~d the dis~ribution systems , \ be modernized-a.nu ~~xpw.ded...!, will _ Also preliminary st~dies are in pro.gress for a new 20,000-kilowatt steam pI'ant. The thermal installations and distribution • systems are not part of the Bank-finance~:p59u'ect but will be carried out concurren·tly with construction of Ya.nhee. A±'ter the first stage of the Ya.nhee project is completed in 1963, f'uture development will comprise the successive installation of generating units in step with the growing power demand until the full capacity is reached. At that time there will be eight generat-ing units of 70,000, kilowatts each, of which one will be used as reserve capacity. The transmission system will ultimately extend to 33 of Thailand's 71 provinces. According to present Ii estpnates, the entire capacity of the Ya.nhee power installations will be fully utilized by 1975. // Irrigation The project will also benefit::==f"fi'igation, a matter of great ;tmportance to Thailand which depends on agriculture, especialJ.y on rj,ce, for the greater • part of its national income and its earnings from exports. reservoir will hold about 12 billion cubic meters of water, equivalent to half' the storage of all 22 reservoirs in the TVA system. The Yanhee The water will be (\  0 C, - 4 () •• available for use throughout the dry season to maintain a·flow down to the large new irrigation system which has been constructed in the Chao Phya River basin with the help of a.Bank loan of $18 million made in 1950. The main features of this 'project are the recently completed Chai~at barrage, about 100 miles above,;iBangkok, and a system of canals and water distribution <·~-' cha..rmels to irrigate an area of abou~ 2,260,000 acres in the central plain of Thail~d. This system, however, has comparatively little storage and is (] ,. dependent mainly on the flow of the Cha.o Phya, which is fully adequate for (~, ir'rigatioti for only six to;, seven months of the year. The water from the Yanhee reservoir will therefore make possible the irrigation of large areas - throughout the year and ai1ow cultivation of new dry-season crops, such as .- beans, corn and sugar, over a .large area. The value of increased agricultural production is estimated at about $16 million annually, of which $5 million will • be from additional rice available for export • Flood Control The Ping River is an important tributary of the Chao Phya, Thailand's most important river. During the rainy season the flow of all the ri~~rs in the 1/ Chao Phya basin is greatiy enlarged, and there are annual floods in the central plain above Bangkok. Control of the Ping River is expected to reduce the annual flood crest to a point where damage in the plain will be greatly reduced in normal seasons. Regulation of the flow of the Ping and Chao Phya Rivers will also be of great value to river navigation, which is a..~ ; mpQrtE1.nt ,, (/ means of t~ansport in Thailand . Bank Lending in Thailand The Bank has now made six loans in Thailand, totaling $106.8 million. In addition to today's loan and the one for the Chao Phya irrigation project, • the loans have been for railways and for' improvements at the port of Bangkok.