Announcement of Multipurpose Project in Colombia Will Benefit Eighty Thousand Households, Businesses

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. BANK NEWS RELEASE NO. 84/102 Contact: Ciro Gamarra June 25, 1984 (202) 477-5320 MULTIPURPOSE PROJECT IN COLOMBIA WILL BENEFIT 80,000 HOUSEHOLDS, BUSINESSES A multipurpose project to be launched shortly by Colombia will provide a safe and reliable water supply to about 61,000 households currently without water, or receiving poor service. Some 10,000 commercial establishments and 8,700 manufacturing concerns will also benefit. The Rio Grande Multipurpose Project is being supported by The World Bank with a loan of $164.5 million. It will cost just over $418 million, and will serve the Department of Antioquia, located in the northwest. Works include the Tasajera hydropower plant, to be constructed on the Rio Grande River about 28 kilometers northeast of the city of Medellin. An earthen dam will be built on the Rio Grande, and will include a spillway, intake tower, tunnels, and a powerhouse. Water and power facilities will be built in the town of Niquia. They will include a tunnel, tanks, and a power station. Transmission facilities will include two substations and transmission lines connecting different towns. The power aspect of the project will help ensure the supply of electricity in the department, in line with Colombia's efforts to reduce reliance on hydrocarbon energy resources. Consultants will be hired to provide design and construction supervision, and other technical advice. Staff of the Empresas Publicas de Medellin (EPM), the implementing agency for the project, will receive training in power, water, administrative, and financial operations. EPM's data processing system will be expanded. The project area consists of some 5,700 hectares of land, including some 1,100 hectares to be occupied by the reservoir for the Tasajera dam. EPM has a long-term program to create recreation facilities within a forest area to be developed under the project. The forest will help reduce soil erosion in the area, and siltation of the reservoir. Besides the loan from The World Bank, a cofinancing loan of over $65 million is expected to be arranged with commercial banks. Suppliers' credits will cover some $23 million of the project cost, and the government and Fondo Nacional de Desarrollo will provide loans of nearly $14 million. EPM will contribute some $152 million. The World Bank loan is for 17 years including four years' grace with a variable interest rate, currently 10.08 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on undisbursed balances and a front-end fee of 0.25 percent on the amount of the loan. NOTE: Money figures are expressed in U.S. dollar equivalents.