Announcement of Nine Million Five Hundred Thousand US Dollars Loan for Telecommunications in El Salvador on April 6, 1972

• 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No~ 72/18 Subject: $9.5 million loan for tele- April 6, 19 72 conmnm.ications in El Salvador A World Bank loan of $9.5 million will assist a project in El Salvador to increase local and l(.>n.g-distance telecommunications facilities. It will be the second Bank loan for telecommunications in El Salvador, and follows loan, also for $9.5 million, made in 1963. Development of telecommunications in El Salvador has lagged behind the rapidly. growing needs of indust:t'Y and commerce which have pL,,,yed an important role in the country's economic growth and are expected to become even more important in the future. At present, insufficient capacity and spread of the local telephone exchanges and the long-distance network have become a serious bottleneck, and have prompted the Govern- ment to rank teleco1D1nunications high among immediate development priorities. The Bank lc>an is being made to El Salvador's telecommunications agen~y • Administracion Nacional de Telecomtmicaciones (ANTEL) -- which will have the responsi- bility of implementing the project.. ANTEL was established in 1963, on the advice of the Bank, as a Government autonomous agency responsible for all domestic and interna- tional telecommunications services in El Salvador. Since then the Bank has assisted the company in strength,ening the managerial, financial and technical organization. The project would be carried out during 1972-75 with the purpose of increasing local automatic telephone exchange line capacity by about 37% thus removing the con- gestion in the local networks; providing a 150% increase in long-distance circuits to improve service and meet the growth of the demand; satisfying the back-log of applications for telet•hone service in metropolitan San Salvador and meeting part of the-new demand for telephones. As a result of the project, telephone density in El Salvador would increase from the present 1.1 telephones per 100 persons to 1.3. The project is estimated to cost $12.7 million equivalent, of which the Bank loan will cover the foreign exchange cost. The project forms part of ANTEL's $20.5 mil- lion investment program for 1971-75, of which about $15.3 million account for foreign exchange expenditures. The program includes completion of the Salvadoran section of the Central American microwave network. • All procurement mder the Bank loan will be subject to international competitive bidding, except for certain additions (about $0.6 million) to existing equipment where compatibility is essential. Salvadoran suppliers and suppliers from other Centrai American Common Market member cotmtries will receive a preference of 15% of the c.i.f. cost or 50X of the customs duties, whichever is lower. The Bank loan will have the guarantee of the Republic of El Salvador and will be for a term of 20 years, including a five-year grace period, at~% interest per annum. - 0 -  • April 6, 19 72 PROJECT: Telecommunications - II COUNTRY: Repub lie of El Salvador TOTAL COST: $12.7 million equivalent BANK FINANCING: $9.5 million loan, 20 years, 5 years of grace, 7~% interest. OTHER FINANCIWG: Internal cash generation. IMPLEMENTING ORGANIZATION: Adm:i.nistracion Nacional de Telecomtmicaciones (ANTEL), San Salvador, El Salvador; Cable Add1·ess: ANTEL; Telephone • No: 21-80-20; Telex Noe: 20101. PROJECT DESCRIPTION: Project is part of El Salvador's telecomm1.lll~cation program for the expansion and improve~nt of local and long-distance services and provision of cable network and subscdbers' facilities. PROCUREMENT: (Bank financed). Installation of 18,000 addition~! lines of local automatic telephone exchange equipment; expansion of local cable network and subscriber facilities to provide about 14,500 additional telephone exchange connections; installation of long-distance equipment on various routes to provide about 750 additional circuits. All materials and equipment will be procured through international competiti11e bidding, except for certain additions (about $0.6 million) to existing equipnent where compatibility is essential. Salvadoran suppliers and suppliers from other Central American CoimDOn Market member countries will receive a preference of 15% of the c.i.f. cost or 50% of the customs duties, whichever is lower. CONSULTANTS: Being selected; to assist in procurement and in planning and project preparation for ANTEL's 1976-80 program. ESTIMATED COMPLETION DATE: 19 75. - 0 - •