Announcement of Thirty-Nine Million US Dollars to El Salvador for Power Expansion Project on June 21, 1976

eWorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 Bank News Release No. 76/81 June 21, 1976 ---$39 M!L.LION TO EL SALVADOR FOR POWER EXPANSION PROJECT The World Bank wi 11 provide $39 million to help finance an expansion project of the Ahuachapan geothermal power plant in El Salvador. The Bank's financing includes $30 million on standard Bank terms, and $9 million on Thi rd Window terms. The $43.8 mi 11 ion project wi 11 be carried out by the Comision Ejecutiva Hidroelectrica del Rio Lempa (CEL), and autonomous agency in charge of the development of all public-service power generation in El Salvador. The Bank loans wi 11 cover foreign exchange costs plus internal during construction. CEL wi 11 cover the balance of the project's estimated cost through a local bond issue and its 01,vn revenues. • The project represents about one-fifth of CEL's 1976-80 investment program, designed to meet growing power demand and reduce dependence on imported fuel. Under the project, a thi~d 30MW geothermal unit will be added to the Ahuachapan plant, 115 kV subtransmission lines wi 11 be constructed. Existing 69 kV transmission lines wi 11 be converted to 115 kV and 10 substations wi 11 be constructed or improved. The loan wi 11 also finance studies of other geothermal fields. The Bank loan wi 11 be to Comision Ejecutiva Hidroelectrica del Rio Lempa with the guarantee of the Republic of El Salvador, for 25 years, including 4 1/2 years of grace, at 8. 85% annual i nte rest. The Thi rd Window 1oan wi 11 be to the Reoub 1 i c of E1 Sa 1vado r for 25 years, including 7 years of grace, at 4.85% annual interest~ On the Third Window loan an additional 4% will be paid to the World Bank by the Interest Subsidy Fund, re- presenting the difference between the Bank's standard interest rate and the charge to El Salvador. The Government of El Salvador will on lend the proceeds of the Thi rd Window Joan to CEL on the same terms and conditions as those applicable to the Bank loan to CEL. NOTE: Money figures are expressed in US dollar equivalents • • ~JRM NO. 1121 (5-76) T EC HN I CAL DAT A ---- PROJECT: COUNTRY: TOTAL COST: A.h uachapan. Power Expansion El Salvador $ l.f3. 8 mi 11 ion • B,t.\NK FINANCING: $30 million, 25 years, 4 1/2 years of grace, at 8.85% interest p.a., and $9 million on Third Window terms, 25 ye,ars, 7 years of grace, 4.85% interest p.a. OTHER FINANCING: Local bond issue $8 mil lion, and internal cash generation . IMPLEMENTING ORGANIZATION: Comision Ejecutiva Hidroelectrica del Rio Lempa (CEL) 9a. Calle Poniente No. 950, entre 15a y 17a. Avenida Norte San Salvador, El Salvador, C.A. PROJECT DESCRIPTION: Supply and installation of a third unit (about 30 MW) at the Ahuachapan geothermal plant; construction of about 39 circuit-km of new 115 kV transmission lines; conversion of about 83 circuit-km of 69 kV transmission lines to 115 kV; construction of about 20 circuit-km of 46 kV subtransmissio~ lines; construction and/or improvement of 10 substations, including the addition of about..., 150 MVA to the system; improvements and additions to CEL 1 s communication and control system; study of other geothermal fields. PROCUREMENT: International competitive bidding for all Bank-financed works and equipment. Regional preference of 15% of the CIF price or the Central American Common Market preferential tariff, whichever is lower, to Central American bidders in accordance with the Central American Agreement on Fiscal Incentives for Industrial Development. CONSULTANTS: Consultant services will be contracted for tariff studies, geothermal studies and detailed engineering and supervision of construction. ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 14% 19 81 • • - 0 -