Announcement of Twenty-Four Million US Dollars Loan to Nicaragua for Power Project on June 29, 1972

INTERNATIONAL BANK FOR • RECONSTRUCTION AND DEVELOPMENT 1818 H STREET. N.W.·, WASHINGTON o. c. 20433. '!'ELEPHONE: EXE<iUTIVE 3-6380 Bank Press Release No. 72/47 . ~bJ~c~: . $24~0 million loan to Nicaragua June 29, 1972 · fqr .power project The World Bank has approved a $24.0 million ·equival~t ·1~an to Ernpresa Nacional de Luz y Fuerza (ENALUF) of Nicaragua to finance jointly with the Central A11M:9rican Bank for Economic Integration (CABEI) a power project which will be the first step in a coordinated development program of ~ne Nicaragu~ and Honduran power sectors based on interconnection and -- in the longer run -- in the integrated power development or the whole Central American region. This will be the eighth loan to ENALUF. The· Bank, since ·~95.3, bas assisted in financing practical~ all or PNALUF's expansion in generation and .transmission through seven loans, totaling $42.3 million.. · · An adequate and reliable supply of ~er has piayed a key ·rc:,1e·· i:n the .industrial growth or the 196os in Nicaragua •. '!he annual increase in power gener~tion averaged an impressive 23% from 1958 to 1966 and r~ained at a substantial 14% from 1966 to 1971. Per capit$ generation., 245.;,kilowatt hours in 1970., is second only to Costa Rica (500- kilowatt hours) among the Central American ·countri~s. . . • Power demand in Nicaragua is projected· to increase by 13% in 1972-76 and 10% in 1977-85 as a result or growii,g industrial requirements ·and village electrification. Prelimina:ry explorations of geothermal resources have, given favorable results. These resources: . however, are insufficient to meet the expected demand. Identification or major hydro resources is ··in.its early stages, and for the ·next. decade ENALUF 1 s require- ments will have to be met· mainly by thermal plants, unless power is .imported f'rom neighboring countries. ·· . . The project will help to meet the rapidly growing demand for energy and to build the Nicaraguan portion. or the interconnectioq between the power·· systems of Nicaragua and Honduras. , ·· The. project includes. a 100.,000-kilowatt steam-el~ctric station at Puerto Somoza; a 110-mile, 230-kilovolt transmis1;1ion system to connect the Puerto Somoza station to ENALUF•s syst~m and to the system or Empresa·Nacional de Energia Electrica of ~onduras; a 138-kilovolt ·r1ng around Managua, the capital ·or Nic.aragua; •· 55.:.m11e, 138..;ldlovo~t line to . extend ENALUF' s service area ·in the· n9rthern. part ·of the ·country.; 'alld. manage- ment consultants' services to as.sist ENAIDF i.n impfoving it~ organization an.d administration. . · · . .. . ·. ·: ·.· · .) The est:l.inated total financing r$q~irement·. for the proje~t .is $4).9 million equiv- alent, including $30.9 lll;illion in .foreign currency •..In addition to. the Bank's $24.0 million loan·, CABEI will lend ENALUF .$6 .l million·. The· rest. will come from ·ENALUF •s own resources .and a $700,000 loan CABEI made ~·arli~r in ~he.year~ _'!he German Govem-· m.ent is qona±dering ~. cont.ribution to 'ijle .#rianqing or ;the· proj..:rct by: providing a loan to CABE!. . . ·· . . .. . · · ·· .. ' · · · ~ · . · · • The Bank loari, vith··the gua~ant·ee .or ·the Gqv~mment. of the ~public or Nicaragua, ,is for a peri~- or 24 years;,. 1nciu~ng a four -and orie-half year. grace period, at an annual interest rate of 7-;%. · · · ~ 0 ~  • June 29, 1972 TECHNICAL DATA PBOJEcr: Power COUNTRY: Nicaragua TOTAL COST: $43.9 million BANK FINAHCii-lG: $24.0 million, 24 years,, ~ years of grace, M interest per annum. OTHER FINANCING: Internal cash generation and loans from the Central American Bank for Economic Integration (CABEI). • IMPLEMENTING ORGANIZATION: F.mpresa Nacional de Luz y Fuerza (ENALUF)!, Apartaclo 55, Managua, Nicaragua. cable Address: ENALUF. PROJECT DESCRIPTION: Construction and installation of the.\ Nicaraguan portion of the interconnection line between the powe~sys~em of ENALUF and the system of Empresa Nacional de Energia E~c~rica (ENEE) of Honduras; a new 100-megawatt stea--electric st&tion at Puerto Somoza, on the Pacific Coast, and associated 230-kilovolt transmission lines; exte1!18iODS to EN.ALUF's 138-kilovolt transmission I) system; and consultant studies for management improvement. PBOCUREMElfr: Goods financed by ·the Bank and CABEI will be procured through ·international competitive bidding. Manufacturers wf thin the Central American Comm~ Market will ~eceive a preference of 15% of the c.i.f. price or SO% of the customs duties, whichever is lower. CONSULTANTS: Kuljian Engineers/C~tr'actors of the U.S.A.; Electroconsult of Italy. ESTIMATED COMPLETION DATE: 1976. - 0 - ()