Announcement of World Bank Assists Electric-Investment Program in Mexico on April 19, 1990

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. *Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 90/73 Contact: Ciro Gamarra (202) 473-8721 WORLD BANK ASSISTS ELECTRIC-INVESTMENT PROGRAM IN MEXICO WASHINGTON, April 19, 1990 -- One million new customers will gain access to electricity under Mexico's program to expand transmission and distribution networks and renovate thermal plants. A $450 million World Bank loan will help finance this project, which forms the first two-year period (1991-1992) of a ten-year investment program of Comision Federal de Electricidad (CFE), the agency in charge of electricity service in Mexico. The World Bank loan will help finance the expansion and improvement of high voltage transmission and substation installations and the improvement of the distribution system. The project also includes the renovation of thermoelectric power plants to improve their efficiency, as well as related environmental and pollution-control studies. The project will enable CFE to reduce electric-energy losses, ensure reliable service and continue with a program to improve the commission's organization, financial and technical structures under a hydroelectric development project assisted by a World Bank loan of $460 million approved in June 1989. The Inter-American Development Bank (IDB) and bilateral agencies are expected to cofinance the $7.1 billion project. The balance of financing will be provided by CFE, the government of Mexico, consumer contributions, and suppliers credits. The World Bank loan was made to Nacional Financiera (NAFIN), under the guarantee of the government of Mexico, and will be disbursed over a period of three and a half years. The loan is for 17 years, including five years of grace, with a variable interest rate, currently 7.75 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.25 percent on the undisbursed balance. NOTE: Money figures are expressed in U.S. dollar equivalents.