Announcement of Two Hundred Ten Million Dollars Loan to Argentina for the Yacyreta Hydroelectric Project : Largest World Bank Loan to a Latin American Country on October 18, 1979

FOR IMMEDIATE RELEASE. . 9J\/orld Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 80/14 October 18, 1979 $210 MILLION LOAN TO ARGENTINA FOR THE YACYRETA HYDROELECTRIC PROJECT ,. Largest World Bank Loan to a Latin American Country The World Bank has approved a loan of $210 million to help finance the Yasyreta hydroelectric project to be built jointly by Argentina and Paraguay on the Parana River, which forms the international boundary between the two countries. This is the largest World Bank loan to a Latin American country to date. The primary objective of the project is to provide least-cost base-load hydroelectric energy of up to 17,500 gigawatt hours annually when it is completed in 1990. The project wi 11 also improve navigation on the Parana River by eliminating the rapids of Apipe, facilitate future irrigation projects in both Argentina and Paraguay, and develop fishery. In all, the project will benefit the Argentine population at large by supplying electricity for its continued economic development, and also provide • substantial earnings for Paraguay through payments made for its share of electricity sold to Argentina. The project consists of a 70-kilometer earth dam; a power house with 20 units each of 135 megawatt capacity to be installed between 1986 and 1990, and intake structures for 10 additional units; a navigation lock; fish passage facilities; irrigation intakes and four dikes--at Aguapey, Jacuary, Caraguata, and San Martin--to prevent flooding; and ancillary works. An important component of the project is the relocation of infrastructure and resettlement of about 33,000 people on both banks of the Parana River as a result of the creation of the main reservoir, a complex program to be implemented under careful supervision by both the Bank and the Inter-American Development Bank (IDB). The project wi 11 be implemented by the Entidad Binacional Yacyreta established under the Yacyreta Treaty between Argentina and Pardguay. The Entidad will be responsible for the execution, maintenance, and operation of the project. It will be the beneficiary of $208.25 million of the World Bank loan to ArgentinA of $210 million. The remaining $1.75 million of the loan will finance 50% of the cost of studies to be undertaken by the Argentine government. Total cost of the project has been estimated at $3,781 million. Total financing requirement during the construction period, 1979-90, has been estimated at $7,040 million. Other financing includes a $210 million loan approved by the IDB in December, 1978, export credits, and loans from foreign commercial sources • and from local sources • NOTE: Money figures are expressed in U.S. dollar equivalents.  • - 2 - The World Bank loan is being made to the Argentine l\epuhlic which will relend $208.25 million to the Entidad Binacional Yacyreta on the same terms as the Bank loan: 15 years, including six ye~rs of grace, with interest at 7.9% per annum. The six-year grace period has been granted in view of the 10-year construction period of the project and the need to minimize refinancing before the project starts to generate revenues. " - 0 - • •  FORM NO. 1121 (5-76) T E C HN I CA L DA T A • PROJECT: COUNTRY: TOTAL COST: Yacyreta Hydroelectric Argentina $3,781 mi 11 ion BANK FINANCING: $210 million, 15 years including 6 years of grace, interest at 7.9% per annum. OTHER FINANCING: Inter-American Development Bank (IDB) loan of $210 million; exports credits of $830 million; loans from foreign commercial banks about $945 million including amounts provided through co-financing operations related to the World Bank and IDB loans; local funds and cash generation. IMPLEMENTING ORGANIZATION: Entidad Binacional Yacyreta Junin 1060, Buenos Aires, Argentina - TELEX 122659 Humaita 357, Asuncion, Paraguay - TELEX 268-PY PROJECT DESCRIPTION: To provide least-cost base-load electric energy to improve navigation on the Parana River, to facilitate future irriga- tion projects in Argentina and Paraguay, and to develop fishery. The project includes • (a) a 70-km earth dam; (b) a power house with 20 units each of 135 MW capacity to be installed between 1986-90 and intake structures for 10 additional units; (c) a naviga- tion lock; (d) fish passage facilities; (e) irrigation intakes and four dikes to prevent flooding; (f) ancillary works, including housing for personnel during and after construc- tion; (g) relocation of infrastructure and resettlement of ahout 33,000 people; and (h) Argentine power sector studies on transmission systems and small hydroelectric plants. PROCUREMENT: The civil works contract to be financed by the Bank loan will be procured according to Bank's guidelines. All major electro-mechanical equipment such as turbines and generators a· well as major construc- tion equipment with a unit price above $100,000 for the civil works contract to be financed with export credits. All other contracts for goods and services with a value .above $500,000 to be awarded on the basis of local competitive bidding; contracts for relocation and resettlement to be restricted to Argentine and Paraguayan contractors. ' CONSULTANTS: In addition to existing national and international consulting services contracted by the implementing organization, consultants will be hired as needed to advise on accounting, auditing, and other matters, and for carrying out the studies by the government • • ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 14% 1990 - 0 -