Announcement of World Bank to Assist Rural Electrification Project in Colombia’s Poorest Region on May 22, 1981

FOR IMMEDIATE RELEASE . eA/orld Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 81/100 May 22, 1981 WORLD BANK TO ASSIST RURAL ELECTRIFICATION PROJECT IN COLOMBIA'S POOREST REGION Colombia's efforts to integrate its poorest and most backward region, the North Atlantic, into modern national life will be assisted by a rural village electrification project. The World Bank has approved a $36 mill ion loan for the project, which is expected to have considerable impact on vast rural areas of Colo~bia 1 s underdeveloped north coastal region. With an estimated total cost of $68.7 million, the project comprises the first stage (1981-85) of the 15-year rural electrification program of the Corporacion Electrica de la Costa Atlantica (CORELCA). This program aims to expand and improve electrical supply to 215,000 households in the main villages of the largely agricultural region, covering seven departments of • the Atlantic coast . The project includes the extension of existing transmission and sub- transmission facilities to 120 villages presently without service, and the construction of distribution networks; the rehabilitation of deteriorated distribution networks in six small towns and villages; and the connection to the regional power system of 25 small towns presently using unreliable and costly diesel generators. The project works will extend and improve service to 43,000 households and wi 11 support an agro-industrial load of 33 megawatts. A training center will also be established for the technical personnel of CORELCA and its local subsidiaries, and wi 11 provide an estimated 1,800 man-months of training per year to existing and new staff members. The project also calls for a study to be carried out on the causes of distribution losses in the system (technical losses, billing deficiencies, and theft), and a program to reduce such losses. Increased availability of electricity in the north coastal region is ex- pected to stimulate increased farm activity, agro-industry, and commerce, as well as improve the standard of living of the rural population in the villages. The project will also assist CORELCA in strengthening its financial and opera- tional capability, as well as that of the eight departmental companies under its supervision. The World Bank loan is for 17 years, including four years of grace, with • interest at 9.6% per annum . NOTE: Money figures are expressed in UoS. dollar equivalents. FORM NO. 1121 (5--76) T EC HN I CAL D A T .A PROJECT: COUNTRY: TOTAL COST: Village Electrification Colombia $68.7 million • BANK FINANCING: $36 million, for 17 years, including four years of grace, with interest at 9.6% per annum OTHER FINANCING: CORELCA, $3.5 million; Government of Colombia, $13.7 mill ion; Electrificadoras, $3.5 mill ion; and Project beneficiaries, $12 miliion IMPLEMENTING ORGANIZATION: CORELCA Apartado AE(reo 2741 Barranquilla, Colombia Telex: 33309 COREL PROJECT DESCRIPTION: The project comprises the first stage (1981-85) of Corpora- cion Electrica de la Costa Atlantica's (CORELCA) 15-year rural electrification program to expand and improve electricity supply in the main vil- lages of the North Atlantic region. The project will: (a) provide electricity supply to about 120 rural villages; (b) rehabilitate old, deteriorated distribution networks in six villages; (c) connect 25 villages now dependent upon unreliable and costly ~ local diesel generation with the CORELCA system; (d) establish a training program t ~ strengthen the technical skills of CORELCA and Electrificadoras' (departmental companies) staff; and (e) finance a study to help minimize heavy power losses in the Electrifica- doras' distribution systems. PROCUREMENT: Procurement of goods and services to be financed by the World Bank loan wi 11 be effected through international competitive bidding under the Bank's procurement guidelines. Colombian manufacttirers will receive a margin of preference of 15% or the applicable duties, whichever is lower, for purposes of bid evaluation. CONSULTANTS: Consultant services will be required for project superv1s1on, a study of distribution losses, and a loss-reduction program. • ECONOMIC RATE OF RETURN: 13% ESTIMATED COMPLETION DATE: 1985 - 0 -