Colombia - Second Guatape Hydroelectric Project

DOCUMENT OF INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Not For Public Use Report No. PU-104a APPRAISAL OF THE GUATAPE II HYDROELECTRIC PROJECT EMPRESAS PUBLICAS DE MEDELLIN COLOMBIA December 19, 1972 Latin America and the Caribbean Projects Department This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report.  CURRENCY EQUIVALENTS US$1 = Colombian Pesos (Col$) 21.4 Col$l = US$00o47 Col$1 million = Us$46,729 UNITS AND EQUIVALENTS 1 kilometer (km) = 0.6214 miles (mi) 1 kilovolt (kV) 1v000 volts (V) 1 megawatt (MW) 1,000 kilowatts (iW) 1 gigawatt haur (GWh) = 1 million kilowatt hours (kWh) 1 gallon (gal) = 3.785 liters (1) 1 cubic foot (ft3) = 0.028 cubic meters (m3) ACRONYKS AND ABBREVIATIONS CHEC - Central Hidroelectrica de Caldas CHIDRAL - Central Hidroelectrica del Rio Anchicaya, Ltda. CORELCA - Corporacion Electrica de la Costa Atlantica CvC - Corporacion Autonoma Regional del Cauca DANE - Departamento Administrativo Nacional de Estadistica EERB - Empresa de Energia Electrica de Bogota EMCALI - Empresas Minicipales de Cali EPH - Bgreaas Publicas de Medellin GDP - aros Dometic Product ICEL - Instituto Colmbiano de Energia Electrica IDB - Inter-American Developmnt Bank IDEA - Instituto de Desarrollo Economico de Antioquia ISA - Interconexion Electrica S.A. FISCAL YEAR January 1 - December 31  COLOMBIA EMPRESAS PUBLICAS DE MEDELLIN APPRAISAL OF THE GUATAPE II HYDROELECTRIC PROJECT TABLE OF CONTENTS Page No. SUMMARY AND CONCIUSIONS i I. INTRODUCTION 1 II. THE POWER SECTOR 2 Economic Background 2 The Sector 2 Organization of the Sector 2 Sector Finance 3 Sector Planning 3 Tariffs 4 III. THE BORROWER 5 Organization and Management 5 EPM's Facilities 6 Electricity Sales 6 Tariffs 6 Accounting, Billing and Collection 7 IV. THE PROJECT 8 Description of the Project 8 Engineering 8 Cost Estimates 9 Unit Cost 10 Amount of the Proposed Loan 10 Procurement 11 Disbursements 11 Ecological Aspects 12 V. JUSTIFICATION OF THE PROJECT 13 Demand 13 Power Supply 13 Alternatives 13 Return on Investment 14 This report was prepared by Messrs. E. Friedmann and K. Stichenwirth and is based on the findings of missions to Colombia in December 1971 and March 1972.  VI. FINANCIAL ASPECTS 15 Finances, Past and Present 15 Inter-Departmental Borrowing 16 Financing Plan 16 Return on Assets 18 Future Finances 19 Audit 19 Lien Limitation 19 VII. AGhEIMBWTS RMAHED AND REONafDATICNS 20  LIST OF ANNEXES 1A. EPM - Organization Chart lB. EPM - Water, Sewerage and Telephone Departments 2. EPM's Power Facilities 3A. Actual and Forecast Sales (GWh) and Peak Load (MW) 3B. Peak Demand and Installed Capacity 4A. Interconnected System - Installed Capacity and Peak Demand 4B. Interconnected System - Energy Demand and Availability (Dry year) 5. Return on Investment 6. Description of the Project 7. The Colombian Power Sector 8. Estimated Schedule of Disbursements 9. Actual and Forecast Income Statements 1969-1978 10. Forecast Sources and Applications of Funds Statements 1972-1978 (Page 1 of 2 pages) Debt Service Requirements (Page 2 of 2 pages) 11. Actual and Forecast Balance Sheets 1969-1978 12. Ecological Aspects 13. EPM - Tariff Schedule Map No. 3947: General Layout of EPM's Electric System Map No. 3948: Electric Power Sector   QOLOMBIA 2IPREbAS PUBLICAS DE MEDELLIN APPR&ISAL OF THE GUATAPE II HYDROELECTRIC PROJiCT SUMMARY AND CONCLUSIONS i. This report is an appraisal of a Project consisting of the second stage of the Guatape hydroelectric scheme, a 220-kV transmission line, and expansion of the distribution system serving the Medellin area. The recently completed first stage consisted of a small diversion dam and the first four generating units of the Guatape power station. The hydroelectric works under the Project would double the station's present installed capacity of 280 NJ and substantially enlarge the Santa Rita Dam to create a reservoir providing multi-annual storage on the Nare River. ii. The estimated cost of the Project is US$98.2 million equivalent, half of that amount being the foreign exchange cost. Turbines and generators would be financed by suppliers' credits. A Bank loan of US$56 million is proposed ihich would finance the balance of the Project's foreign exchange cost, interest during construction, and $4.3 million of local currency ex- penditures for engineering services and civil works. iii. The borrower would be Empresas Publicas de Medellin (EPM), an autonomous public utility which supplies power in and around Medellin and is also responsible for providing the city's water, sewerage and telephone services. Separate accounts are maintained for the various departments of EHM. The utility has had three power loans from the Bank, which have helped finance about 70% of its present installed capacity of 730 MW. The projects were well executed and the facilities they provided have been operating satisfactorily under EPM's efficient technical and financial management. iv. The proposed loan would be the Bankts eighteenth loan to the Colombian power sector. Previous loans have assisted, among other things, in achieving interconnection of the power systems of the four major power utilities in central Colombia, one of which is EPM. The creation of Inter- conexion Electrica S.A. (ISA) in 1967 to construct and operate intercon- nection facilities has resulted in some rationalization of power planning in Colombia; however, there is a need for fuller coordination of sector development -- a task only recently undertaken by the government planning authorities. In conjunction with the proposed loan the Government has there- fore agreed to establish a national power development plan that would be the basis for scheduling future power sector investments and mobilizing finance for them. v. The Project is the least-cost solution for meeting the load growth of the interconnected system, which constitutes 80% of the country's power market. The return on the Project is at least 16%.   COLOMBIA EMPRESAS PUBLICAS DE MEDELLIN APPRAISAL OF THE GUATAPE II HYDROELECTRIC PROJECT I. INTRODUCTION 1.01 The Colombian Government has requested Bank financing for a project comprising the second stage of the Quatape hydroelectric plant, involving an installation of 280 MW, and associated transmission and distribution facilities. The cost of the Project is estimated at US$98.2 million equivalent excluding interest during construction. A Bank loan of US$56 million is proposed, to be made to Empresas Publicas de Medellin (EPM). 1.02 The Bank has been active in the Colombian power sector for some 20 years. The proposed loan would be its eighteenth loan to the power sector and its fourth to EPM. The previous loans to EPM -- US$12 million in 1959, US$22 million in 1961 and US$39 million in 1964 (extended in 1967 to cover additional works) -- helped finance hydroelectric plants with an aggregate capacity of 531 MW, or 72% of EPM's present installed capacity. All of these facilities are operating satisfactorily. 1.03 The Bank fostered the establishment of the central interconnected system in Colombia by two loans to Interconexion Electrica S.A. (ISA), a company created in 1967 for the purpose of building and administering the interconnected system. A 220-kV transmission system now interconnects the systems serving the cities of Bogota, Cali, Manizales and Medellin -- EPM's area of operations. The Project would operate as part of the interconnected system. 1.04 This report was prepared by Messrs. E. Friedmann and K. Stichenwirth and is based on the findings of missions to Colombia in December 1971 and March 1972.  II. THE POWER SECTOR Economic Background 2.01 Colombia has a population of 22.3 million, which is growing at 3.2% per year and is almost entirely concentrated in the more highly developed regions -- Costa Atlantica (northern) and Andina (central and western). In 1970 some 56% of the population was urban compared with 4h% in 1951. The GDP has been growing rapidly, averaging 6.4% in the 1968-70 period, with manufacturing increasing by 7-8% per year. In 1970 the GDP per capita was about US$325. Despite inflation, which has been a chronic problem (averaging 11% per year during the past decade), the outlook for the economy continues to be good, with estimated rates of growth approaching 7% per year by the mid-1970s. 2.02 The country is well-endowed with energy resources. Coal reserves, estimated at 18 billion tons, are the largest in South America, Oil reserves, of possibly 3 billion barrels, rank Colombia third on the continent after Venezuela and Ecuador. Hydroelectric potential is estimated at 60,000 MW, of which only about 3% is utilized. Hydroelectric generation (76%) is pre- dominant in the central region (Bogota-Medellin-Cali-Manizales), while thermoelectric generation (241) utilizing coal, oil and gas is concentrated in the northern region. The Sector 2.03 Over the past 20 years, power demand in Colombia has grown at the relatively high average rate of 11% per year. Installed capacity per capita, however, is still only 103 watts, which is less than in most Latin American countries. Only about 45% of the population enjoys uninterrupted electricity supply; about 30% has no supply at all, and the remaining 25% is supplied part time. The national development plan aims to provide at least 95% of the population with electricity supply by 1980 (see Annex 7). Organization of the Sector 2.04 Electricity in Colombia is generally supplied by public corporations owned by the central, departmental or municipal governments. Captive indus- trial plant accounts for about 10% of installed capacity. Since 1967 signi- ficant progress toward national integration of supply has taken place. The main areas of service are the Central region, which became interconnected in 1972 (see Map IBRD-3948); the Northeast, which will become part of the inter- connected in system in 1974; and the Atlantic Coast region) planned for interconnection to the rest of the country in the late 1970s. 2.05 Four utilities supply 95% of the public electricity: Empresas Publicas de Medellin (EPM), Empresa de Energia Electrica de Bogota (REEE), Instituto Colombiano de Energia Electrica (ICEL)$ and Corporacion Autonoma Regional del Cauca (CVC), Public power generation was as follows in 1970 (in GWh):  -3 - EPM EEEB ICEL CVC Others Total % Hydro 1,965 2,122 990 564 281 5,922 76 Steam, - 149 746 238 - 1,133 14 Diesel - - 210 8 83 301 4 Gas Turbines - 482 _ 482 6 Total 1,965 2,271 2,428 810 364 73838 100 % 25% 29% 31% A 5 100% Public sector supply came from the following sources in 1970: % GWh Hydro 76 5,922 Natural Gas 10 772 Coal 7 556 Oil 7 588 Total 100 7,838 Sector Finance 2.06 Anmnal investment in-the power sector has been consistently around 15% of total public investment. About 52% of this expenditure on power has been in foreign currency, of which the Bank provided some 73% during 1950-1970. In recent power loans, Bank financing has been supplemented by joint or parallel financing of equipment for the projects. 2.07 Raising sufficient funds for the local currency cost of power project-s has been a problem at times, as the normal complements to internal cash genera- tion have been limited. There is on2ly a limited domestic capital market and Government policy is to confine its financing for power to projects which have a low financial return (such as slum-area and rural electrification) but important economic and social benefits. The proposed Project would represent a new depar- ture in domestic capital mobilization: it is planned to finance a substantial part of the local cost by loans from local banks and a domestic bond issue. Sector Plannin 2.08 While Bank support of Interconexion Electrica S.A. (ISA) has helped provide considerable rationalization of the planning process, overall coord- ination of sector planning is still limited and there is no national power development planning. A national power development plan properly coordinated with Colombia's overall development objectives and with a national energy policy is needed to ensure that the limited financial resources available to the sector are applied to the most needed projects. Such a plan, which should be reviewed annually, would include a generation and transmission program on the basis of which the construction of major facilities would be authorized, and would serve as a guide for investments in urban and rural distribution systems. A start on this has been made with funds under ISA's first Bank loan (575-co), with which it is carrying out a number of river basin and feasibility studies  for new hydroelectric plants. A broad national plan would suggest insti- tutional reorganization and reforms to increase planning and operational efficiency and would help to improve the coordination of foreign lending to the sector. Consequently, the Government has agreed during negotiations to establish during 1973 a national power development plan along the above lines and the Bank will be given the opportunity to comment on it and on later re- visions before they are made final. Tariffs 2.09 In 1969 the Junta Nacional de Tarifas was set up as part of the National Planning Office to have jurisdiction ever tariffs and, by this means, help direct national savings toward development. The utilities submit tariff applications to this agency, which has full authority to act on them. Current policy is that tariffs should be adequate to cover all of the partic- ular utility's operating expenses, including debt service, and generate enough funds to cover a substantial part of its expansion program; tariffs should cover fully the cost of service to different categories of consumers except for low-income residential consumers, for whom a subsidized price is provided. 2.10 The application of this policy has been uneven. Since the Junta's establishment, Bank borrowers generally have received adequate tariff adjust- ments. Other utilities, however, for political reasons, have not always applied for tariff adjustments and have therefore not received them. The Junta has no legal power to establish new tariffs by itself; it is only when these utilities request Government budgetary support that the National Planning Office can press them to make adequate tariff adjustments.  - 5 - III. THE BORROWER 3.01 Empresas Publicas de Medellin (EPM), created in 1955 from municipal departments, is one of the best organized and administered public utility enterprises in Colombia. The Bank was instrumental in establishing it as an autonomous public entity responsible for providing Medellin and some of the surrounding areas with electricity, water, sewerage and telephone services, thus minimizing political influence and ensuring independent management. Organization and Management 3.02 EPM has a nine-member Board of Directors consisting of: the Mayor of Medellin, who serves as ex-officio Chairman; a representative of the Government of Antioquia, the Department in which Medellin is located; the Chief of the Municipal Planning Office; and six members elected by the Munic- ipal Council, three from among the Council members and the other three from business, the professions and labor unions. With the exception of the Mayor, the directors serve for two years; they cannot be reelected more than once. Previous loan agreements with EPM contain an undertaking which requires con- sultation with the Bank before any amendments to either EFM's statutes or the legislation affecting them are proposed; this has been retained in the proposed loan. 3.03 The Board appoints a general manager who is the company's chief executive officer. EPM's internal structure is organized along functional lines so as to charge each manager, in his respective professional field, with the responsibilities arising from all sectors combined in the enter- prise, i.e. power, water, sewerage and telephone (see Annex 1A). EPM's accounts, however, are kept separately by sector, thus providing a precise breakdown of assets and liabilities on the one hand, and expenses and revenues on the other hand. The quality of management is satisfactory. Recent appointees to positions that were vacant because of retirements are well qualified. Political events of the last 2-3 years seem to have hampered the ability of the Board of EPM to appoint the General Manager. Three persons have held this position since July 1970, and at present only an Acting General Manager is in charge. To ensure continued efficient management, and because the statutes are silent in this respect, EPM agreed during negotiations that only persons with appropriate qualifications will be appointed to managerial positions and that the Bank will be consulted in advance with respect to the nominees for the post of General Manager. 3.o4 EPM employs a total staff of about 3,300, out of which 870 are directly concerned with the operations of the power department. In addition, about 500 employees of the general services group which serves all the sectors, have to be allocated to power thus raising the total work force engaged in electricity supply to about 1,370 (about 2 per MW installed), which is reasonable considering the scope of the department's activities - generation, transmission and distribution - and compares favorably to similar companies in Colombia and elsewhere. Some training in the field of distri- bution techniques is required (para. 4.07). For further reference on EPM's activities other than power see Annex 1B.  -6- EPM's Facilities 3.05 EPM distributes energy in the city of Medellin and, in addition, sells power in bulk to Electrificadora de Antioquia, a governmental agency in charge of distribution to other urban and rural areas within the Depart- ment of Antioquia. This service area has a total population of some 1.5 million. 3.06 EPM's installed capacity in 1971 was 727 MW and is entirely hydro- electric. As one of the owners and shareholders of ISA, EPM is entitled to a share of the output of ISA's generating capacity; when Chivor, ISA's first plant, is completed in 1976, EPM's share will be about 16%, or 80 MW. Details ofEPM'stransmission and distribution networks, which serve about 190,000 customers in both urban and rural areas, are in Annex 2. 3.07 The distribution system for Medellin has as its backbone a llO-kV ring. Sub-transmission and distribution lines are generally overhead, except in the high-density center of the city, where underground cables are used. EPM builds the primary feeders for the distribution system, but in new urban areas the building developers install the distribution transformers and secondary feeders, which are then turned over to EPM and become its property 4 EPM is responsible for providing secondary distribution facilities other than those provided by developers but has not had an entirely free hand in this, for reasons explained in the next paragraph. 3.08 For some years the Government's policy of discouraging rural migration to urban areas was implemented in part by limiting public service, including power supply, to urban "squatter areas" resulting from such md- gration. Under this policy) EPM was not permitted to provide service - nearby areas In 1969 the Government changed this policy, and a substantial portion of the proposedi distribution expansion included in the Project is for improving electricity supply in such areas. Electricity Sales 3.09 Sales have been increasing in recent years by some 12% annually, to reach maximrum demand of 422 MW in 1971. Losses from theft and illegal connections have been a serious problem in recent years, increasing from about 14% in 1960 to 28% in 1968. A major reason for the increase was the considerable theft of electricity in squatter areas up to 1969, largely due to the lack of service which encouraged the inhabitants to make illegal connections to nearby secondary power circuits. In 1969, regular service to such areas was begun and in 1971, with a concurrent meter control program, losses were reduced to 22%. They are expected to decrease steadily hereafter, by some 2% per year until reaching the 12-14% level which would be normal for the EPM system size and the nature of its market. Tariffs 3.10 EPM's tariffs (see Annex 13) are the lowest in Colombia because of the favorable hydroelectric resources available to the company. On average,_ the tariffs amount to USA per kWh. Availability of power at reasonable cost has been an importaiit faictor in Xedellin's industrial development. I/EPM acquires these facilities at no cost and they are shown in its books at nominal value.  - 7 - 3.11 The structure of EPM's tariffs is generally adequate. Charges for industrial consunption are substantially lower than for residential and commercial, and low-income residents enjoy a subsidized tariff (para. 2.09). Large industrial customers are charged separately for day and night- time energy and for peak demand. In the past, tariffs have increased an average of 10% annually to maintain their real value in the face of rising prices. Accounting, Billing and Collection 3.12 Most of EPMts accounting is computerized. The staff is well qualified and efficient. Collections are prompt as consumers are surcharged 5% if bills are not paid within 10 days.  -8- IV. THE PROJECT Description of the Project 4.01 The Project (see Annex 6 ) would consist of: (i) construction of the 280 MW second stage of the Guatape hydro- electric power station, involving the heightening of the Santa Rita dam and duplication of most of the civil and electro- mechanical features of the first stage (see Annex 6/Map No. 6742); (ii) a 230-kV power transmission line from Guatape to load centers and associated sub-stations; and (iii) expansion of the distribution system in EPM's service area. 4.02 The existing Santa Rita Dam is a small structure, 27 m high, which impounds a headpond permitting only run-of-river operation as the 70 mil- lion m3 storage capacity is very small. The enlarged earth and rock-filled dam would be 26 m higher, with a size of over 3 million m3. The water storage capacity provided by the enlarged dam would be 1,240 million m3, providing an additional reliable peaking capability of 280 MW and an energy storage of 3,000 GWh, equivalent to the average yearly production of the site. This energy wauld be available to supplement the interconnected system's energy production during poor hydrological years. The present intake towers, headrace and tailrace tunnels, underground penstock, and underground power station of Stage I would be duplicated. 4.03 A 230-kV line from the Guatape station to the Miraflores sub- station in Medellin is proposed. But an alternative which would link Guatape with the Barbosa substation and Guadalupe power station is under study. Costs would not change significantly if the second alternative is chosen. 4.04 The distribution expansion includes additional bays and trans- former capacity for about 240 MVA at the 10 main substations of the 110 kV ring. In addition, the underground network for the central part of Medellin, which is overloaded due to the increase in high-rise building construction, would be substantially increased; about one-third of the distribution facili- ties being provided would be for the squatter reclamation areas. Engineering 4.05 Hydroelectric development of the Nare River was first studied in the early 1960s by Edison S.P.A. (Italy) and Integral Ltd. (Colombia). The latter, in association with Harza Engineering (USA), designed and supervised the first stage. Its design included all the main elements of the second stage now proposed, including the heightening of the Santa Rita dam. 4.o6 EPM has retained Integral, a firm with considerable experience in designing and building hydroelectric projects in Colombia, as its main consultant for the second stage. Foreign specialists will assist Integral in reviewing seismic design and ecological aspects of the Project. The firm will also be assisted by foreign consultants in procurement and super- vision of electro-mechanical installation. During negotiations, EPM agreed  - 9 - to retain consultants acceptable to the Bank to assist in design, preparation and evaluation of bids, and supervision of construction. 4.07 The distribution facilities proposed under the Project were planned by rPFFs engineers after detailed analysis of load growth and network studies. B3's plans for further development of sub-transmission and distribution facili- ties call for increased personnel training; the proposed loan therefore includes US$100,000 to train EFM staff abroad in the planning, design, and naintenance techniques of distribution systems. The training program will be submitted to the Bank for approval. Cost Fstimates 4.08 The estimated cost of the Project is summarized in the following table: (Million Col$) (Mllion US$) Local Foreign Total Local Foreign Total A. Generation Civil aineerin Works Santa Rita Dam 130.1 181.3 311.4 6.1 8.5 14.6 Guatape II Power Station 167.7 265.3 433.0 7.8 12.4 20.2 Miscellaneous V/ 227.2 - 227.2 10.7 10.7 Electrical and Mechanical Equi-pment Turbines and Generators 12.6 145.2 157.8 o.6 6.8 7.4 Other 17.7 100.9 118.6 0.8 4.7 5.5 E=n4neeriinz 77.5 3.4 80.9 3.6 0.2 3.8 Contingencies - Physical 86.2 64.6 150.8 4.0 3.0 7.0 - Price 152.1 8 231.9 .1 3.7 10.8 Sub-total, Generation 871.1 840.5 1,711.6 40.7 39.3 80.0 B. Transmission Transmission Line 8.0 27.9 35.9 0.4 1.3 1.7 Sub-station 1.3 28.4 29.7 - 1.3 1.3 Contingencies - Physical 0.7 3.9 4.6 - 0.2 0.2 - Price _X2 77 11.6 0.2 004 0.6 Sub-total, Transmission 13.9 67.9 81.8 65; 3.2 3-T C. Distribution Equipment 124.5 117.6 242.1 5.8 5.5 11.3 Training - 2.1 2.1 - 0.1 0.1 Contingencies - Physical 8.7 8.3 17.0 0.4 0.4 0.8 - Price 34.4 13.4 47.8 1.6 o.6 2.2 Sub-total, Distribution 167.6 309.0 6.6 . TOTL P-ROJECT-5f CO Li9. 8 212 L9. V. L. D. Interest During Construction on Bank Loan - 233.5 233.5 - 10.9 10.9 I/ Roads, relocation of El Penol village, rim treatment of reservoir, land acquisition.  - 10 - 4.09 The cost estimates, which were prepared in detail by the consult- ants early in 1971, were revised in January 1972 to reflect subsequent local inflation and devaluation of the peso and the U.S. dollar. Physical contin- gencies to provide for uncertainties during construction of the various items of the Project are based on the considerable experience gained during the construction of the first stage (see Annex 6). The following values were adopted: 20% for the Santa Rita Dam and miscellaneous civil engineering works; 7% for the power station civil works and tunnels; 4% for the foreign costs and 10% for the local costs of electro-mechanical plant; and 7% for transmission and distribution. Contingencies to cover price escalation were based on an assumed annual increase of 4% in foreign costs and 10% for local costs, in line with recent and currently expected trends. Overall, physical contingencies amount to US$8.0 million and price contingencies to US$13.6 million, repre- senting 10% and 17% of direct costs, respectively. This should be adequate. Unit Cost 4.10 The cost per kilowatt installed of the Guatape II plant would be US$299. The cost of the first 280 MW stage, completed in early 1972, was US$220JkW. The average unit cost for both stages would be about US$260/kW, which is attractive for this type of project. Amount of the Proposed Loan 4.11 The proposed loan covering 46% of the Project cost, plus interest during construction, would finance the following items: US$ Million Fquivalent (i) 62% of the total cost of main civil works contracts - $27-5 consisting of: direct foreign exchange cost $20.9 contingencies on foreign exchange cost 4.4 local currency cost 2.2 (ii) Foreign costs of electromechanical equipment, exclud- ing turbines and generators - 5.5 consisting of: direct foreign exchange cost 4.7 contingencies of foreign exchange cost 0.8 (iii) Foreign costs of transmission line and substation materials and equipmrient - 3.2 (iv) Foreign costs of distribution and equipnent and training - 6.6 (v) 50% of total cost of engineering - 2.3 consisting of: foreign exchange 0.2 local currency 1.8 contingencies 0.3 (vi) Interest on the Bank loan during construction period - 10.9  W4ith the exception of US$4.3 million for local currency expenditures (US$2.1 million for engineering services and US$2.2 million for civil works), the loan would cover only foreign cost of the Project. The only items involving foreign exchange not included in the Bank loan would be the turbines and generators for which suppliers' credits are envisaged (para. 6.11). Suppliers' credits, however, finance neither the down payments (15%) required at the time of award of a contract nor interest during construction and this foreign exchange there- tore (US$2.2 million) will have to be provided by FPM. Procurement 4.12 Two large civil engineering contracts which will attract inter- national bidding, are contemplated, one of about US$20 million for the intake towers, tunnels, and cavern of the power station and the other of about US$14 million for the heightening of the Santa Rita Dam. The latter would be started about one year earlier than the former in order to fill the reservoir by 1977 when the project is to commence operations. Tenders for the dam contract were opened on October 24, 1972, and are being evaluated by EPM. The contract will not be signed until after the Bank loan is made. Minor civil engineering con- tracts for roads, town relocation and reservoir rim treatment would not be financed by the loan and would be contracted locally. 4.13 The equipment to be financed by the loan is not manufactured in Colombia and will be procured through international competitive bidding. EPM intends to reserve for local suppliers certain distribution equipment (13.2 kV and below) which is manufactured in Colombia; this equipment would not be eligible for Bank financing. The need for granting preference to Colombian manufacturers does not seem to arise. However, in over to accommodate local industry should it become competitive in the future, the loan documents, at the request of the Government, provide a preference for domestic suppliers in bid comparisons of the applicable customs duties or 15% of the c.i.f. price, whichever is smaller. Though Colombia as a member of the Latin American Free Trade Association (LAFTA) belongs to a trading bloc granting tariff preferences, the fact that EPM is exempt from import duties eliminates this factor from bid evaluation. Disbursements 4.14 Disbursements for the two civil work contracts would be made against 62' of the amount billed in the contractors' periodic invoices provided that this 62'p of the cost does not exceed the estimated US$27.5 million (para. 4.11). If the 62% of the cost of these contracts were to exceed US$27.5 million, this percentage would be reduced to insure that no more than US$27.5 million be disbursed and that these payments are made over the whole period of execution of the contracts. 4.15 Disbursements for equipment and training would be made only against the foreign exchange costs. For engineering consulting costs, disbursement would be made against 50% of expenditure as in earlier power loans in Colombia. No disbursements would be made for expenditures incurred prior to signing of the loan. The estimated schedule of disbursements is given in Annex 8. Any / A possible case is the supply of some transmission structures.  - 12 - loan funds remaining undisbursed upon completion of the Project would be cancelled, unless their disbursement on other works associated with the Project were considered appropriate. Ecological Aspects 4.16 _ The heightening of the Santa Rita Dam will flood the small town of El_Penol, which has a population of 3,000. EPM and the Municipality of El Penol have already agreed that EPM will compensate and relocate those displaced and will ensure that their standard of living and means of live- lihood will not be impaired (see Annex 12). 4.17 A reconnaissance of the ecological aspects of the Project, in- cluding a field visit and evaluation of reports relevant to this problem was carried out by a foreign consultant in 1972. No adverse consequences were identified. A number of suggestions were made to preclude problems which might arise if the riparian lands around the reservoir are not adequately protected from undue agricultural or forestry exploitation. A program is also proposed to encourage the multi-purpose utilization of the reservoir for tourism, sports and fishing. EFM has written to the Bank giving assurances that it will take adequate steps to implement the consultant's recommendations (see Annex 12).  - 13 - V. JUSTIFICATION OF THE PROJECT 5.01 The primary purpose of the Project is to help meet the growing demand for electricity for Colombian industry,commerce and households already connected to the Central interconnected system, but it will also provide for connecting new consumers in and near Medellin who do not now have access to electricity. Demand 5.02 Although Guatape II will primarily serve the EPM market, the need for the Project is based on the requirements of the power market of the entire interconnected system, representing about 80% of the country's consumption. The 1972-78 forecast of system demand, which was prepared by ISA's partners and reviewed by the Government Planning Office, is based mainly on a review of the historical trends and the economic outlook in each sub-system -- Bogota, Medellin, Cali, Manizales and the Northeast. Average rates of growth have been remarkably stable in these five sub- systems. The individual annual growth rates adopted were: EPM 8.7%; EEEB 12.9%, decreasing to 10%; CVC 9.4%; ICEL/CHEC 7.8%; and the Northeast 10.2%, decreasing to 8%. On this basis the overall growth rate for the interconnected system was forecast at 9.5%, which is reasonable in the light of the 6-7% growth expected in GDP. 5.03 EPM?s sales forecast is based on an analysis of past consumption trends, for which there are statistics since 1936, and on an evaluation of prospective industrial activities, urban growth and electricity distribu- tion expansion policy. Because of the relative importance of industry in EPM's market area,its energy demand shows the effects of economic cycles. For this reason,the sales forecast reflects a 10 year perspective on the past, which includes periods of growth as low as 51 and as hieh as 12%. The forecast is conservative considering Colombia's presently favorable economic outlook. The expected average growth of b.7% per year'comprises industrial growth at 9.8%, residential growth decreasing from 11.5% in 1972 to 6.2% in 1978, and commercial growth at 8.6%. These rates have been applied to each type of consumer considering that industrial, residen- tial, commercial and others are 31%, 50%, 8% and 11% respectively of EPM's sales. Power Supply 5.04 Annexes 4A-4B show projected peak demand and energy consumption in tae interconnected region, with the installed capacity and energy available from the system during dry hydrological years. The reserve capacity provided for is about 15%, a security standard adequate in the Colombian interconnected system. Alternatives 5.05 ISA studied the least-cost expansion program for the inter- connected system after 1975, iee, after commissioning of the power plants presently under construction. Only projects for which firm engineering  - 14 - data had been developed could be considered as alternatives. These were Guatape II (280 MW), Chivor II (500 MW), Samana I (572 MW), Mesitas I (515 MW) and a thermal power project. Since all these projects are needed for the period up to 1985, the various permutations in the scheduling of the projects were compared and the sensitivity of the choice to various param- eters was analyzed. Comparisons were made with discount rates varying between 8% and 12%, exchange rates varying from US$1 = Col$20 to Col$30, and fuel costs varying between the present price of Col$90 per ton and the Col$108 per ton expected in due course. The sequences of plant construction which scheduled Guatape II as the next generation station were the least- cost solutions within the whole range of variations of the above-mentioned parameters. Return onIvesnt 5.o6 The return on the Project is estimated to be at least 16% (see Annex 5). In this calculation, the stream of costs includes capital and operating costs, exclusive of all duties, taxes and depreciation. Shadow pricing was not considered necessary for foreign exchange or local labor costs. The stream of benefits consists of the increase in revenues from sales attributable to the Project. The only alternative to the proposed project would imply a decision to avoid meeting the forecast increase in demand, thereby reducing system reliability and affecting adversely economic activity in the entire interconnected system service area.  - 15 - VI. FINANCIAL ASPECTS 6.01 Bank lending to EPM has been confined exclusively to the Power Department; 90% of the department's borrowing has come from the Bank (para. 6.04). Foreign currency loans to the other departments included MDB-loans totalling US$41 million for the water department and about US$3 million suppliers' credits for the telephone department. 6.02 The consolidated financial situation of EPM as well as that of each of its various Departments (Power, Water and Sewerage, Telephones) has been thoroughly investigated and found satisfactory. Since EPM's accounts are kept strictly separated (para. 3.03), a detailed financial analysis has been made only for the power department; however, the financial implications of the other departments on EPMts situation as a whole or on the Power Depart- ment have been investigated and, where necessary, appropriate covenants were agreed on (paras. 6.05, 6.o6 and 6.21). Unless otherwise indicated, the following paragraphs deal only with the Power Department. For a brief descrip- tion of EPM1s other Departments see Annex 1B. Finances, Past and Present 6.03 Management of the Power Department of EPM has been prudent and efficient. Internal cash generation, traditionally the main source of local- currency finance, has contributed on average about 45% of investment in the past few years. This was made possible by substantial tariff increases of 6o% in 1963, 39% in 1966 and 37% in 1968, which enabled the level of tariffs to be maintained in real terms in the face of inflation and achieved rates of return of 13%-16p on revalued net fixed assets in operation. More re- cently, the rate of return has been lower; in 1972 it will be about 9%, the level generally aimed at by the larger utilities in Colombia. 6.04 Local borrowings have had only a secondary role in EPM financing, and accounted for about 6% of the total debt outstanding in 1971. Foreign borrowing consisted almost exclusively of the three Bank loans. Capitaliza- Aion, after taking into account revaluation of assets (para. 6.13) as of December 31, 1971 was as follows: Col$ Million % Equity Initial Equity Capital and Retained Earnings 896.0 27 Revaluation Reserve 946.6 29 1,842.6 56 Long-Term Debt IBRD Loans 1,320.8 40 Municipal External Debt 29.1 1 Local Loans 86.6 3 1..436.5 44 Total Capitalization 3,279.1 100  - 16 - Apart from the revaluation reserve, equity consists of the initial capital, representing the net value of assets transferred to EPff during the period 1955-59, and retained earnings. The Bank loans were made during 1959-64 and are for periods of 25-35 years at interest rates of 5.5% to 6%. Terms of the other outstanding debt are shown in Annex 11. Inter-Departmental Borrowing 6.05 Due to an insufficient departmental cash situation in the Water and Sewerage Departments, which had not been experienced before, the Power Department's 1969 cash surplus (about Col$14 million) was loaned to these departments. Further borrowing increased this debt to Col$ 51.4 million by the end of 1971. EPM agreed during negotiations to arrangements for repay- ment of these fbnds to the Power Department. A financing plan, satisfactory to the Bank, providing for payments of Col$ 5 million in 1973, Col$ 26.4 million in 1974 and Col$ 20 million in 1975 has been submitted. Furthermore, EPM agreed not to make in future loans from the Power Department to other departments for terms longer than six months; the aggregate outstanding amount of such loans will not exceed the total of revenues earned from the sale of electricity during the month preceding the date of such transfer. 6.06 The proposed loan retains the covenant in Loan 369-Co which stipulates that each operating department, other than the Power Department, will set tariffs to yield revenues sufficient to cover all expenses including interest and depreciation and debt service in excess of depreciatior and leave a reasonable surplus to finance new investment. The above covenant should be sufficient to enable the Bank to ask EPM for corrective measures in other than the Power Department should they become necessary. (See para. 6.14 for power covenanat.) Financing Plan 6.07 EPM's financing plan for the power department is, in general based on the proposed Bank loan and suppliers' credits for financing the foreign exchange requirements, and on internal cash generation and local borrowing to cover the local component. 6.o8 Annex 10 shows in detail EPM's financing plan for the Power Depart- ment for 1972 through 1978. A condensed version covering the project con- struction period, 1972-77, is given below:  - 17 - Condensed Financing Plan Project Construction Period 1972 - 1977 SOURCES Col$ Equivalent Internal Million US$ Million j Internal Cash Generation 2,457.9 114.9 - Less: Debt Service 1,291.7 60.4 - Net Internal Cash Generation 1,16624 External Borrowings Propo8ed Bank Loan 1,198.4 56.o 42.2 Drawdown Loan 369-Co 47.5 2.2 1.7 Suppliers' Credits 143.3 6.7 5.1 Mediun-Term Loans 175.0 8.2 6.2 (1973-75) Overdraft 1972 20.0 0.9 0.7 Total Borrowings 1,584.2 74.0 55.9 Reimbursement Samana Studies 15.4 0.7 0.5 Dividends Received from ISA 19.6 0.9 0.7 Repayments of Internal Loans 51.4 2.4 1.8 TOTAL SOURCES 2,836.8 132.5 100.0 APPLICATIONOS Construction Expenditures (Excl. Interest During Construction) 2,264.7 105.8 79.8 Investments in ISA 482.2 22.5 17.0 Increase in Working Capital and Cash _ 90.0 4.2 3.2 TOTAL APPLICATIONS 2,836.9 132.5 100.0 6.09 The Project represents $98.2 million out of the total $105.8 million of construction expenditures (excl. interest during construction) planned for the period 1972-1977. The balance corresponds to other expansions which will be started at the end of this period. 6.10 Net internal cash generation is expected to finance about 41% of the planned investment and increase in working capital, on the basis of tariff increases of 25% in 1973 and 20% in 1976 (para. 6.17).  - 18 - 6.11 Suppliers' credits, amounting to US$6.7 million for a term of 12 years at 7.5% interest, are expected to cover the cost of the turbines and generators except for the 15% down payment. As manufacturing firms have expressed interest in financing this equipment, EPM should be able to obtain such credits without difficulty. 6.12 The additional funds to finance the local expenditure on the Project during 1973-75, amounting to about Col$ 175 million or approximately 6% of the financing plan, would be obtained as follows: Col$ Million Year IDEA Loan 25.0 1973-74 EPM Bond Issue 50.0 1973-74 Loan from Local Bank Consortium 100.0 1974 Total 175.0 The loan from IDEA (Economic Development Institute of Antioquia, a develop- ment bank) would be at 14% interest for a four-year term, the loan from the Local Bank Consortium (three banks) at 15% interest for a seven-year term, and the EPM bonds at 12% interest for a ten-year term. Evidence of author- ization for these transactions on the part of the Government has been received by the Bank as well as the necessary commitments by IDEA and the bank consortium. The bonds will be used mainly to buy from large landoners some of the land required by the Project. Return on Assets 6.13 It was not until 1967 that Colombian law penmitted companies to revalue foreign debts and assets. Prior to this, EFM assets which were all stated at historical cost were undervalued because of the depreciating local value of the Peso and the corresponding, if not always timely, change in the external value of the Peso. Under earlier Bank loans, therefore, tariff covenants were based on a contribution-to-investment rather than a rate-of- return concept. In recent years, however, a flexible exchange rate policy and the establishment of a realistic local cost index have made it possible to establish in Colombia a procedure for revaluation of assets which is satisfactory to the Bank. It should be noted that the Borrower's accounting practices do not include all of the above revaluation procedures and there- fore their official financial statements would not be identical with those prepared for Bank use. 6.14 As a consequence, the most recent Bank power loans to Colombia (EEEB and ISA) have contained conventional rate-of-return tariff covenants, stipulating a minimum 9% rate of return on revalued average net fixed assets in operation. This percentage has proven to be adequate for generating sufficient internal funds in companies of the power sector and has also been adopted by the Colombian Government as a yardstick for measuring the adequacy of power tariffs. During negotiations, EPM agreed to a similar covenant for the Power Department. The present contribution-to-investment covenants in prior Bank loans have been rescinded accordingly.  - 19 - 6.15 For determining the rate base and operating income under the new covenant, depreciation would be calculated by the straight-line method, and rates would be based on the useful lives of assets but with an average of not less than 2.5% for hydroelectric plant and 4% for thermal-electric plant. As in earlier power loans in Colombia, a review will be made by EPM every three months of the adequacy of tariffs to meet the rate of return target. Investments in ISA and the revenues received from them (dividends or interest on ISA shares or bonds) need not be included in these rate-of-return cal- culations since ISA's statutes provide, through such revenues, for an adequate return on the investments (presently 9%). Future Finances 6.16 EPM's Power Department financial prospect is satisfactory (Annexes 9-11). The forecast of the cost of operations includes increases of 11% per year, based on EPMVs past experience, as follows: the labor force is assumed to grow about 3% per year commensurate with the needs of the expanding power system, and wages to increase about 8% per year to provide for a rising cost of living and other higher costs. The cost of material is assumed to increase 11% annually, reflecting past experience and some ex- pansion in the scope of maintenance work. 6.17 Forecast revenues are based on tariff increases of 25% in 1973, 20% in 1976 and 10% in 1978. Authorization is now being sought by EPM for the first increase, which would compensate for the impact of inflation in recent years and enable a rate of return of 9% to be achieved through 1975. The increases projected for 1976 and 1978 are intended to maintain the rate of return at this level. 6.18 The debt/equity ratio (after asset revaluation) was 44/56 at the end of 1971; it is expected to reach about 49/51 in 1975 and subsequently decrease to about 41/59. The capital structure reflects the favorable earning level and prudent borrowing policy of the Borrower and is very satisfactory. 6.19 As shown in the Forecast Sources and Applications of Funds State- ment (Annex 10), on an annual basis debt service coverage by internal sources is expected to vary between 1.7 and 2.3, which is satisfactory. During negoti- ations ERM agreed to replace the 60/40 debt/equity covenant of the previous Bank loan with a debt service coverage test whereby EPM will not incur debt on behalf of the Fower Department without the Bank's approval unless its most recent 12- month internal cash generation from power assets is at least 1.4 times the maximum debt service requirement for any succeeding fiscal year. Audit 6.20 The financial statements of EPM have been audited for a number of years by Deloitte, Haskins and Sells. These arrangements have been satisfactory. To ensure that adequate auditing continues, the Bank standard audit covenant is included in the proposed loan agreement. Lien Limitation 6.21 In view of EPM's multiple activities, the covenant in Loan 369-Co was repeated which stipulates that none of EPM's operating departments, other than the Power Department, may incur debt unless the creditor explicitly waives any right to repayment from the assets or revenues of the Power Department.  - 20 - VII. AGREEM1TS REACHED AND RECa)ME1DATIONS 7.01 During loan negotiations, the following agreements were reached: (a) the Government will establish during 1973 a national power development plan and the Bank will be given the opportunity to comment on it and on later revisions before they are made final (para. 2.08); (b) the Bank will be consulted before any amendments to EPH4s statutes or legislation affecting them are proposed (para. 3.02); (c) only well-qualified persons will be appointed to managerial positions in EPM, and the Bank will be given the opportunity to comment on nominees for the post of General Manager (para. 3.03); (d) consultants acceptable to the Bank will be retained for the design, procurement arrangements, and supervision of construc- tion of the Project (para. 4.06); (e) no preferential tariffs for regional suppliers will be taken into account in bid evaluation (para. 4.13); (f) the loan from the Power Department to the Water and Sewerage Department of EPM will be repaid, and inter-departmental loans by the Power Department will not be made for terms longer than six months nor in excess of 1 month's Power Department revenues (para. 6.05); (g) tariffs for operating departments other than the Power Depart- ment will be adjusted to provide appropriate revenues (para. 6.06); (h) electricity tariffs will be set to produce a minimum 9% rate of return on the Power Department's average revalued net fixed assets in operation (para. 6.14 and 6.15); (i) no debt will be incurred by the Power Department without the Bank's concurrence, unless its maximum future debt service is covered at least 1.4 times by historical cash generation (para. 6.19); (j) EPM will have its books audited by independent auditors acceptable to the Bank (para. 6.20); and (k) no debt will be incurred by EPM's operating departments, other than the Power Department, unless the creditor explicitly waives any right to repayment from assets or revenues of the Power Department (para. 6.21).  - 21 - 7.02 With the above agreements reached, the Project is suitable for a Bank loan of US$56 million equivalent, for a term of 25 years including a grace period of five years. December 19, 1972   COLOMBIA EMPRESAS PUBUCAS DE MEDELUN (EPM) ORGANIZATION CHART | _.d d4 OoDeW Gonl M.nl Moo 4-, 1d, Po_ l, iOnogo.J.I O.,.oo,.ne S_rarD#/v_ > *1_0.o..raw Dro.q... Ma;hd Dasaqa,t ofes ZWaIrt~ ~ ~~o,a,ota, Ca,aaaa,,acaaaaa Co,oaao aoa 0 O.a.I O.aaOfOf't o,. To Mat, n,o.adaa,to aa,,a,aa1,aa,aov .-,oo,a i.~aWO.asde.-, -b1   ANNEX 1B Water, Sewerage and Telephone Departments Water and Sewerage Departments 1. As of December 1971, the Water Supply Department had 126,500 consumers (up 6%) with a total consumption of 82 million cubic meters (up 8%). Rationing, to which the company had to resort to during the dry periods at the beginning of each year in the late 1950s and early 1960s, has no longer been necessary in the recent past. 2. The current water tariff has been in effect since 1969. Average revenues per m3 sold reached 96 centavos. The rate of return on investment amounted to about 6.5%. During 1972, a 40% tariff increase will be implemented; this should enable EPM to strengthen the water department's internal cash position and help finance its investment program to a substantial extent. 3. EPMts sewer network was extended by about 55 km in 1971 and has reached 1,160 km by the end of that year. Sewer rates are related to water consumption, increasing sharply for consumptions above 30 cubic meters per month. 4. The Water and Sewerage Department has a direct labor force of 680 employees. In addition, about 390 employees for general services are allocated to this department. Telephone Department 5. As of the end of December 1971 there were about 125,000 instal- lations serving Medellin and some suburban municipalities. This number includes about 3,000 public telephones. The tariffs consist of a monthly fixed charge per line plus a charge for each call. 1971 revenues (Col$ 83.6 million) earned a rate of return on investment of about 10.5%. June 8, 1972   ANNEX 2 COLOMBIA Empresas Pablicas de Medellin Existing Facilities Existing Generating Capacity Number Installed Generating Stations River of Units Regulation Capacity - MW Guadalupe I Guadalupe 5 deasonal 40.0 Guadalupe II Guadalupe 1 10.0 Guadalupe III Guadalupe 6 270.0 Troneras Guadalupe 2 " 36.0 Piedras Blancas Piedras Blancas 1 daily 11.0 Rio Grande Rio Grande 3 " 80.0 Guatape I Nare 4 " 280.0 Total 727.0 Average yearly energy output of these plants is 3,890 GWh, giving an average utilization of 59%. Transmission The transmission system consists of 128 kilometers of 220 kV cir- cuits and 735 kilometers of 110 kV circuits. In addition, there are 160 km of 44 kVsab-transmission circuits. Substation capacity amounts to about 770 MVA. Distribution With the exception of the downtown area of Medellin, where an underground "network-meshed" type distribution system is installed, over- head feeders are employed. There are 1,680 km of primary feeders (13.2 kV), 43,500 km of secondary (low voltage circuit), and approximately 600 MVA of distribution transformers. June 8, 1972   COLObMBIA Empresas Publicas de Medellin Actual and Forecast Energy Sales (GWh) and Peak Load (MW) -' I. ACTUAL 1969 1970 1971 Increase over Share of Increase over Share of Tncre ase over Share of Sales previous year total sales Sales previous year total sales Sales previous year tuts.l Salen (GWh) (%) ---LI (GWh) (%) L-0 (W-h) (lo _(. Industrial 414 15.6 31.1 448 8.2 29.9 518 15.6 30.7 Commercial 108 12.5 8.1 124 14.8 8.3 136 9.7 9.1 Residential 637 3.2 47.9 742 16.5 49.6 852 14.8 50.6 Others : 172 16,2 12.9 182 5.8 12.2 179 (1.6) 10.6 Total Sales 1,331 9.2 100.0 1,496 12.4 100.0 1,685 12.0 100.0 MW MW MW Peak Load 350 7.0 - 371 6.0 - 13.7 - II. FORECAST 2: 1972 1973 1974 _ 1975 _ Increase over Share of Increase over Share of Increase over Share of Increase over Share of Sales previous year total sales Sales previous year total sales Sales previous year total sales Sales previous year total sales (GWh) (%W% (GWh) ()% (GWh) (% (%M (GWh) )(% Industrial 569 9.8 30.4 625 9.8 30.8 686 9.8 31.1 753 9.8 31.3 Commercial 148 8.8 7.9 160 8.1 7.9 174 8.8 7.9 189 8.6 Y.9 Residential 950 11.5 50.8 1,017 7.1 50.0 1,087 6.9 49.2 1,160 6.7 48.3 Others 203 13.4 10.9 230 13.3 11.3 262 13.9 11.8 300 14.5 12.5 Total Sales 11870 11.0 100.0 2,032 8.7 100.0 2,209 8.7 100.0 8.7 100.0 MW MW MW MW Peak Load 5 8.7 9 8.7 -5w 8.7 - 0 8.7 - 1976 1977 1978 Increase over Share of Increase over Share of Increase over Share of Sa.les previous year total sales Sales previous year total sales Sales previous year total sales (o,Wh) _ _Wh_ (%) (GWh) ( (% tGW ) () (6) Industrial 827 9.8 31.7 908 9.8 32.0 997 9. 32.3 Commercial 205 8.6 7.9 223 8.8 7.9 242 3.5 7.8 Residential 1,235 6.5 47.3 1,315 6.S 46.3 1,396 6.- 45.3 Others 343 14.3 13.1 3O2 'Y 3 13.R LLO idA 14.6 Total Sales 2 610 8.7 100.0 2,838 8.7 100.0 38.7 100.0 MW Mrw Peak Load vi 8.7 - v 8.7 757 5. 9/ Forecast for EPM' s service area, excluding the Cerro Matoso fer2-nickel proJect load and interchanges with ISA. B Sulk supply to adjacent municipalities and Medellin street lighting. June 12, 1972   I'd 0~~~~~~~~~~~~~~~~~~~~ o