Announcement of Ten Million Eight Hundred Thousand US Dollars Loan for Second Power Project in Papua New Guinea on May 30, 1974

.. I 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Subject: $10.8 million loan for Bank Press Release No. 74/39 second power project in May 30, 1974 Papua New Guinea The World Bank has approved a $10.8 million loan to help Papua New Guinea develop its power sector. The loan will assist Papua New Guinea to strengthen the nation's Electricity Commission. The project consists of two main components. It will provide technical assistance for the Electricity Connnissionts in-service training program during the period from 1974 until 1979. Secondly, it will enable the Electricity Commission of Papua New Guinea (ELCOM) to expand its distribu- tion network. The project also includes financing to cover the cost over-run under the first Bank-financed power project (Upper Ramu Hydro-Electric Scheme) which is attributable to exchange rate adjustments. This is the World Bank's second power project in Papua. New Guinea, and the ninth project financed by the World Bank ~nd the International Dev~lop- • ment Association. Bank Group lending has been for agriculture, telecommu- nications, highways and port improvement projects • Since the early 1970's, the. Bank has assisted Papua New Guinea in improving its power sector by providing finance to help construct a hydro-electric plant at the Upper Ramu river and to expand ELCOM's distribution network. Papua New Guinea has a vast hydro potential totalling some 20,000 megawatts. ELCOM has an able management and staff. The training part of the project is designed to maintain this level of competency, and help achieve the Government's prime objective of rapid localization in a major sector of Papua New Guinea's economy. The total cost of the project is estimated at $17.3 million of which the Bank will finance $10.8 million in foreign exchange costs, includi~g Australian dollar costs.· The loan is being made to Papua New Guinea with the guarantee of Australia. It will be for a term of 20 years, including five years of grace, with interest at 7 1/4 per cent. • Note: Money figures are expressed in US dollar equivalents •  TECHNICAL DATA May 30, 1974 • PROJECT: Second Power COUNTRY: Papua New Guinea TOTAL COST: $17.3 million BANK FINANCING: $10.8 million, 20 years, including 5 years of grace with interest at 7~% per annum. OTHER FINANCING: The Electricity Commission of Papus New Guinea and Government loans will cover local expenditure& of $6.5 millionG IMPLEMENTING ORGANIZATION: Papua New Guinea Electricity Commission (ELCOM), Port Moresby, Papua New Guin~a~ which has general responsibility for administration, construction and maintenance of the power system, will be responsible for the execution of the project. PROJECT DESCRIPTION: The proj~ct consists of three components: (1) techni- ~ cal assistance for ELCOM's in-service training period from 1974-79; (2) expansion of ELCOM's distribution network; and (3) financing of the shortfal~ in foreign exchange due to currency exchange ad- justments affecting the Upper Ramu project financed by a previous World Bank loan. PROCUREMENT: All procurement, except services, will be on the basis of international competitive bidding. Ths number, qualifications and selection of technical assistance personnel will be by mutual agree- ment between ELCOM and the Bank. ESTIMATED COMPLETION DATE: 1979 Note: Money figures are expressed in US dollar equivalents. ~- •