Announcement of Five Million US Dollars Power Loan in Thailand on March 1, 1967

I NTERf"~Acrl EiA I~ r=-C)R • REC:ONSTF~ p 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELE'.PHONE: EXECUTIVE 3-6360 Bank Press Release No. 67/9 Subject: $5 million power March 1, 1967 loan in Thailand The World Bank has approved a loan equivalent to $5 million to the Yanhee Electricity Authority which supplies power in the most populated and developed part of Thailand. The loan will assist tn financing transmission facilities which are included in the current expansion program of the Authority; generating capacity will also be increased by a third, to about 670,000 kilowatts. The pro- gram is being undertaken to keep pace with power requirements of the Authority's service area where demand is now growing at the unusually high ~ate of 34% annually. • Thirteen conmercia.l banks have agreed to participate in the loan, without the World Bank's guarantee, for a total iunount of $1,220,000 representing the first eight maturities which fall due between February 15, 1970 and August 15, 1973. The p~rticipants will be The Bank of New York; Manufacturers Hanover Trust Company, New York; The Philadelphia National Bank; The ChL~tered Bank., New York; Bank of America, New York; First National City Bank, New York; Crocker- Citizens National Bank, San Francisco; Gi~.ard Trust.' Bank, Philadelphia; National Bank of Conmerce of Seattle; The Chase Manhattan Bank, N.A., New York; The First Pennsylvania Banking and Trust Company, Philadelphia; Chemical Bank New York Trust Companyj New York; and The }lank of Tokyo- Trust Company, New York. Crocker-Citizens National Bank and The First Pennsylvania Banking and Trust Company are also pur- chasing from portfolio $100,000 of the April 15, 1970 maturity of a loan made to Thailand in 1957. • The Yanhee Electricity Authority (YEA) was created in 1957 when the Bank made a loan of $66 million toward the construction of the Bhumibol (Yanhee) Dam entity in 1961. - 2 - and power plant on the Ping River in northern Thailand, and became an operating Its service area extends from Chiengmai in the north to both • sides of the Gulf of Thailand in the south. YEA sells bulk power to two utili- ties, one which distributes power in Bangkok and the other which distributes power in rural areas; it also sells directly to a few large industries. The Bangkok metropolitan area is the primary market and account.~ for about 851 of energy sales. Load growth on the YEA system has been high by normal standards since YEA first began operations five years ago, rising from 21% to 341 annually. Bank loans in 1963 and 1965, totaling $12.6 million, were made for the.installation of additional units at the Bhumibol Dam and for extension of the transmission system. The rapid rate of growth has been due to the integration and modernization of distribution facilities in Bangkok, reliable bulk power supplies adequate to meet all demands, an incentive type of rate structure, and major economic expansion • which is occuring primarily in the Bangkok area. The current growt~ ,ate of 34% is not expected to decrease during the next year or two. The system. is expected to become short of firm energy by 1970, if not sooner, even assuming some taper- ing off in the next three years. To meet requirements, the YEA.management decided in mid-1966 to provide addi- tional capacity by 1969. This includes the installation of an 87,500-kilowatt unit at its 150,000-kilowatt steam plant i.n northern Bangkok and the installation of the fifth and sixth 70,000-kilowatt units at the Bhumibol Dam. The 19;J7-69 program also includes the construction of a third 230-kilovolt transmissi~n line extending 281 miles from Yanhee to Bangkok, the installation of a third 60 MVA synchronous con- denser in Bangkok, the installation of 40 KVA 230/115-kilovolt transformers at two substations in Bangkok, and the construction of a 230-kilo·volt transmission line from Bangkok to a,new substation to be built about 15 miles south of Bangkok. The Bank loan will help to finance the-=third transmission line between Yanhee and Bangkok and the condensers and transformers in Bangkok. The total cost of the program is estimated at the equivalent of $31.4 million, of which $21.1 million will be in foreign exchange. The World Bank loan will finance $5 million of the foreign exchange costs and the Bank of Thailah<\ is providing an additional $10 million. The remaining costs will be provided from YEA's own re- sources. All equipment and supplies financed under the Bank loan are being pro- cured on the basis of international competitive bidding. The loan will be for a term of 15 years and bear interest at the rate of 6% per annum. Amortization will begin February 15, 1970. The loan will be guaranteed • by the Kingdom of Thailand.