Announcement of Eighteen Million Five Hundred Thousand Dollars for Power Program in Bolivia on July 24, 1964

INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET, N.W. WASHINGTON, D. C. 20433 DU 1-2408 INTER-Af\/\ERICAN DEVELOPMENT BANK 808 17TH STREET, N.W. WASHINGTON, D. C. 20577 DU 2-4965 JOINT PRESS RELEASE IDA Pl·ess Release No. r:J+/17 Subject: IDA/IDB lend $18.5 million !LB I->ress Release NR. 35/ 64 for power program in Bolivla. July 24, 1964 The Inter-American Development Bank and the International Development Asso- ciation (IDA), an a.ff'iliate of the World Bank, extended loans totaling $18.5 mil- lion today to the Government of Bolivia to help finance an electric power develop- ment program which will increase that country's installed capacity by 38,000 kilo- watts. The IDA loans are the first extended to Bolivia by the World Bank or its • a.:..Pfiliates • The assistance consists of two IDA credits totaling the equivalent of $15 mil- lion and a loan equivalent to $3.5 million from the Inter-American Bank's Fund for Special Operations. The credits will help build two hydroelectric plants and re- lated works in Central Bolivia. These will increase the power supply for the Catavi and Oruro mining areas; for Cochabamba, the nation's second largest city, and tor La. Paz, the capital. In addition to helping to relieve a critical shortage of electric power, which has resulted in rationing throughout the country, the program will provide Bolivia with a so1md basis for power expansion in the future. Two electric power entities will benefit from the financing. One is the FA!lpresa Nacion.al de Electricidad (ENDE), a company in the process of being estab- lished by the Government, which will be responsible for most of Bolivia's future power requirements except those in the areas of La Paz and the city of Oruro. The •  - 2 - second <?Ompa.ny is the Bolivian Power Company Ltd. ( BPC), owned by United States aml Canadian investors. With a total capacity of 61,200 kilowatts, the company is as of now the largest power producer in Bolivia and serves La Paz, Oruro and the min::1s • around Oruro. Its largest customer is the Government-owned mining company, Corpo- racion Minera de Bolivia ( COMlJ30L) • An IDA credit of $10 million and the Inter-American Bank loan of $3.5 million Will be used by ENDE to construct a hydroelectric powei project on the Corani River, a~out 28 miles from Cochabamba. The initial capacity of the power station will be 27,000 kilowatts, but its design provides for expansion to about 40,000 kilowatts. J.nitially, ENDE 1 s principal customers will be the city of Cochabamba and CCMIBOL's mines in the Catavi area. The project includes the transmission and distributing facilities for this service, and also provides an interconnection at Catavi between the ENDE and BPC systems. A ere di t of $300,000 from an Inter-American Bank loan ex- tend.ed to the Bolivian Development Cor!X)ration in 1961 was used for the feasibility • studies of the project. The total cost of the Cora.ni project is estimated at $15.5 million. The credits of IDA and the Inter-American Bank account for $13. 5 million of this cost. The re- maining $2 million is being contributed by the Bolivian Government. The latter will provide ENDE with buildings, equipment, tranoportation vehicles and working capital. The other IDA credit, Of $5 million, will be re-lent by the Government to BPC to build a hydroelectric plant at Chururaqui to increase power supply to the La Paz system. The Chururaqui project includes the construction of a new power plant in the Zongo Valley, downstream from six existing plants operated by BPC. The new plant will have an initial capacity of 11,000 kilowatts, which can be doubled without any additional construction work. Transmission lines to cormect the plant with the La. Paz system will also be built a~1'1. the La Paz distribution system will be extended • • . ' • - 3- The estimated cost of the Chururaqui project is $7.7 million; the IDA credit will cover the foreign exchange requirements, and BPC will contribute $2. 7 million to cover local costs. Up to $3,100 1 000 of the Inter-American Bank loan will be extended in dollars and up to $400,000 in Bolivian pesos. The loan was extended for a term of 25 years at an interest rate of 41, per annum. It will be repaid in 41 semi-a.nnual install- ments, beginning five years from the date of the contract. The loan will be re- paid in Bolivian pesos or dollars, at the borrower's option. The loan raises the total volume of credits extended by the Bank to Bolivia to $37.8 million. In addi- tion the Bank has extended some $755,000 in non-reimbursable technical assistance to Bolivia. • Both IDA credits a.re for a term of 50 years. Repayments of principal Will begin November 1, 1974, after a 10-year period of grace. Thereafter 1i of the r~:-incipal will be repayable annually for 10 years and 31, will be repayable annually for the final 30 years. The ere dits are free of interest, but a service charge of 3/4 of 11, per annum on the amounts withdrawn and outstanding will be ma.de to meet IDA's administrative costs" I'he Government is re-lending the proceeds of 1 the $5 million credit to BPC over a period of 25 years, including a 3-year grace period, with interest at 5-1/'Z/, per annum • •