Announcement of Five Million Dollars Loan in Ecuador on March 29, 1956

,. . .. JJ' .,,FOR IMMEDIATE RELEASE ... ' tNTERNATIONAL BANK FOR .ECONSTRUCTION AND DEVELOPMENT (WORLD BAN'K) 1818 H STREET, N.W., WASHINGTON 25, D.C. TELEPHONE: EXECUTIVE 3-6360 J>RF.SS RELEASE NO. 438 SUBJECT: $5 million loan in March 29·, 1956 Ecuador The World Bank today made a loan of $5 million for the expansion of electric power in Ecuador. The loan will help to finance hydroelectric and therm.al power projects which will nearly triple the supply o.f power to Quito., the capital. The demand for power there for both industrial and residential use is already about twice the available supply~ The Bank of America N.T. & S.A. is participating in the loan, without the • I World Bank's guarantee, to the extent of $197,000, representing the first two maturities which fall dm~ on August 1, 1959 and. february 1, 1960. The loan was made to the Empresa Electrica Quito, S,A,, a corporation which is the sole supplier of power to the Quito area. ·This area has a population of 225 1 000 and is one of Ecuador's most important. industrial regions. It is the center of textile manufacturing, the country's leading industry, and of the (,' fastr,growing pharmaceutical industry. Because of the shortage of power many industrial concerns have had to operate their own high-cost di.esel uni ts. The Empresa now operates three hydroelectric stations with a combined cape.city of 12.,080 kilowatts., and two di.stribution systems. The new projects will add 181 980 kilowatts of power to Empresa's system bringing the total capacity to 31,060 l(ilowatts, With these facilities Rmpresa wi.11 be able to handle the backlog of demand from industrial consurrH3rs and provide for the j• • expected future industrial: and other demands for the next few years • Th~ projects consist of~ a new 3,000-kilowatt thermal power plant to be built in Quito., a 14,480-kilowatt hydroelectric plant to be constructed at \ r: ,.,-: Cunueyacu·on the San Pedro River, about 6 miles southeast of Qui.toJ and a • 15-1/2 rn.i.le transnrl.ss:Lon line to bring l,:;oo kilowatts of powr:r from the nearby town of Machach:i ,, In add:L tion, the older of the two distr:i.bution systems will be replaced and the other syr:.r'GGm 1-Jill be improved and expanded; substation capa.ei ty will be i.ncrensed to deliver the a.d(li tional power to the renovated ,, distributid::·n systemsJ and the number of meters wiil be increased to measure electricity delivered to about 8.5~t of the consumers, The total cost of the projects is estimate:id at the eq_l1ivalent of about $? million; the foreign exchange component of $5 million will be financed by the Bank's loano '11he loan w:i.11 p~y for the importation of such equipment as generators, switchgear, transf,)rm0rs I cablos and transrrj.ssion ·towers, The construction of the Cmmcyacu hydroel~)ctr:Lc pLmt should be finished in 1958" The trc::.nsmission line bringing in power from }13.chachi and tho thermal • plant are scl10d.uJ.ed for completion in 1957 and will meet the pont~up demand for power prior to compl0tion of the hydroc:ilectric planto rrhere af't0r tho Qui to thermal plant wj.11 bG operRted to suppiement hydroc:loctric cnpaci ty d_uring tho dry season, The work on the distribution systems will keep pacG with the ex-r. pansion of genci·ating capad.t.y, Today's loun is .for a term of 20 ycf"r-rs and ban.rs interosi of 4-J/4>1t, incl ud.. ing the statutory 1% commission charged b:y the Bank, Amortiz&ticm will begin August 1 1 19.59, The lor:m is eua-rantoed by the Government of Ecuador. This is tho B~nkJs second loan in Ecuador,. bringing the total of lending there to $13,5 mi.lllon, Tho earlier lor.m was $8 • .5 miS:{ior~ to th0 Comi te Ejecuttvo de Vi,:.l.J.idad for the highway consti··u.ction program in Guayas Province, After having been approved by the Ba:ri.k I s E,cecuti vc DirE.ctors, the loan documents were signed today by Dr~ Benj am.in. Pcri:~l tG., Chan,~e d 1~·fair es of the • \\ Embassy of Ecuador in Washington, on behalf of the Ecuadorian Gov·ernment, by Mr, R1.cardo Espinosa, General Manager o.f the Empresa, on behalf of the Empr~sa .. S.,A,., and by Mr,. Robe~t L, Garner, Vice President,. on behalf Electfictl. Qui.to·, of the World Bank. •t .,• •