Announcement of Uruguay Launching Power Engineering Project on January 10, 1985

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. BANK NEWS RELEASE NO. 85/19 Contact: Ciro Gamarra January 10, 1985 (202) 477-5320 URUGUAY LAUNCHES POWER ENGINEERING PROJECT Uruguay's national power company is launching a project which will enable it to meet power demand in an efficient and economic way. The project includes a series of studies, training, and the implementation of a new tariff structure. The World Bank has approved a loan of $4 million for the project. In Uruguay, access to electric power is extensive. But the power networks are generally old and some sections are overloaded. A comprehensive study of the power system will be carried out to improve the planning, design, and engineering of the distribution system. Other aspects of the study include the evaluation of a load dispatching distribution center for Montevideo, the capital city. Studies on reducing power losses and on remodeling or expanding the distribution systems are also included. Because of irregular runoff, energy production from hydroplants on the Negro and Uruguay rivers varies greatly. A review of power models and practices of the Administracion Nacional de Usinas y Trasmisiones Electricas (UTE), the national power company, will be carried out to ensure that these plants run efficiently. The condition of the Gabriel Terra Hydroplant in the midwest is being reviewed to determine the feasibility for its rehabilitation. This plant was built during the period 1937-48 and its powerhouse was damaged by floods in the early 1960s. Rehabilitation of the plant is expected to make the facility more profitable. About 10,000 electricity meters will be installed as part of the implementation of a revised tariff structure. The new tariff is based on a study carried out under an earlier project, also supported by The World Bank. This tariff structure is aimed at rationalizing the use of electricity. The project is expected to be completed by mid-1987 at a cost of $5.2 million. Besides the World Bank loan, financing will come from UTE, the national power company. The World Bank loan is for 13 years including four years' grace, with a variable interest rate, currently 9.29 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.