Jordan - Seventh Power Project

Document or The World Bank FOR OFFICIAL USE ONLY Report No. P-4417-JO REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN AN AmOUNT EQUIVALENT TO US$70.0 MILLION TO THE HASHEMITE KINGDOM OF JORDAN FOR A SEVENTH POWER PROJECT May 14, 1987 This documnt bas a restricted dIstribution and may be used by recipients only in the performance or their offcial duties. Its contents may not otherwise be disclosed without World Bank authorization.  HASHEMITE KINGDOM OF JORDAN CURRENCY EQUIVALENTS Calendar 1986 March 1987 Currency Unit = Jordan Dinar (JD) US$1.00 u JD .350 JD .340 JD 1.00 * US$2.86 US$2.94 Exchange rate used in the Appraisal Report JDl - US$2.85 GOVERNMENT OF JORDAN AND JORDAN ELECTRICITY AUTHORITY FISCAL YEAR January 1 to December 31 ABBREVIATIONS AND ACRONYMS ATPS - Aqaba Thermal Power Station GWh - Gigawatt Hour (1000 MWh) HTPS - Hussein Thermal Power Station ICB - International Competitive Bidding IDECO - Irbid District Electricity Company IAEA - International Atomic Energy Agency JEA - Jordan Electricity Authority JEPCO - Jordanian Electric Power Company kWh - Kilowatt Hour (1000 Watthours) kV - Kilovolt (1000 volts) MEMR - Ministry of Energy and Mineral Resources MVA - Megavolt Ampere (1000 Kilovolt Ampere) iw - Megawatt (1000 Kilowatts) MWh - Megawatt Hour (1000 Kilowatt hours) TPC - The Aqaba Port Corporation  FOR OFFICIL USE ONLY HASHEMITE KINGDOM OF JORDAN SEVENTH POWER PROJECT Loan and Prolect Summary Borrower: The Hashemite Kingdom of Jordan. Beneficiary: Jordan Electricity Authority (JEA). Amount: US$70.0 million equivalent. Terms: 17 years, including four years of grace, at the standard variable interest rate. Relending Terms: The proposed Bank loan would be made to the Government and onlent on the same terms as the Bank loan to JEA. The foreign exchange and variable interest rate risks would be borne by JEA. Project Description: The project is part of JEA's high priority 1988-95 investment program for the development of Jordan's power subsector and includes: (i) the expansion of the existing sea-water-cooled steam power plant at Aqaba by the addition of 2x130-MW units initially firing heavy fuel oil and with the boilers and power station layout suitable for future coal firing; (ii) upgrading the substations at Aqaba and Amman-South to 400 kV; and (iii) the consulting services associated with (i) and (ii). The proposed project would help meet Jordan's future power demand at least cost to the economy and would help the Government to potentially reduce the country's dependence on imported oil by introducing the possibility of substituting oil with coal in Jordan's future power generation should coal prove more economical. It would also help improve the quality of power supply services and continue institution-building efforts to further develop JEA as a technically efficient entity. There are no major risks associated with the project, as it is an extension of an existing power station. However, a delay in the decision to convert the power station to coal firing, should the switch be economical in the future, would lead to higher operating costs for JEA. Adequate provisions have been made to deal with this risk. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  ;-~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 'i : Local Foreign Total 0 ~~~~~~~~~~~~~---------(USI ~Milllons) -------- - Estimated Cost*: Power Station 31.3 162.8 194.1 Civil works (13.4) (20.1) (33.5) Equipment (12.5) (134.5) (147.0) Engineering (5.4) (8.2) (13.6) Amman-South Substation 2.1 11.8 13.9 Civil works (0.9) (0.6) (1.5) Equipment (0.9) (11.0) (11.9) Engineering (0.3) (0.2) (0.5) Base Cost 33.4 174.6 208.0 Physical Contingencies 2.4 12.3 14.6 Price Contingencies 2.9 16.9 19.9 Total Project Cost 38.7 203.8 242.5 Interest during Construction - 15.3 15.3 Total Financing Required 38.7 219.1 257.8 Financing Plan: Proposed World Bank Loan - 70.0 70.0 Cofinancing Arab Fund - 24.0 24.0 Kuwait Fund - 24.0 24.0 OPEC Fund - 5.0 5.0 Islamic Development Bank - 14.0 14.0 Export, Suppliers' Credits - 48.5 48.5 JEA's Cash Generation 38.7 33.6 72.3 Total Financing 38.7 219.1 257.8 Estimated Disbursements: Bank FY 1983 1989 1990 1991 1992 1993 1994