Bolivia - Fourth Power Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 3715 PROJECT PERFORMANCE AUDIT REPORT BOLIVIA: ENDE FOURTH POWER PROJECT (LOAN 1238-BO) December 10, 1981 Operations Evaluation Department This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT BOLIVIA: ENDE FOURTH POWER PROJECT (LOAN 1238-BO) TABLE OF CONTENTS Page No. Preface ...................... i Project Performance Audit Basic Data Sheet .............. ii Highlights .................................. ......... iv Attachment: Project Completion Report I. Introduction and Background .......................... 1 II. Project Description ................................... 1 III. Project Implementation and Cost ....................... 3 IV. Market and Financial Performance ...................... 5 V. Institutional Performance .................... ... 7 VI. Project Justification .................................. 8 VII. Bank Performance ....... . ..................... 9 VIII. Conclusions ............. . ............. .... 9 Annexes: 1. Supplier of Main Equipment .......... 10 2. Project Cost ............................... 11 3. Original and Actual Project Cost at constant.......... (1976) prices ............................... .... 12 4. Inflation Rates 1975-79 ................................ 13 5. Accumulated Disbursements from the Loan Account ....... 14 6. Allocation of Loan Proceeds ....................... 15 7. Actual and Forecast Sales and Revenues 1976-1980 ...... 16 8. Performance Indicators ....................... 17 9. Income Statements 1976-1980 ........... .. 18 10. Actual and Estimated Sources and Applications ......... of Funds 1976-80 ..................... .............. 19 11. Actual and Estimate Balance Sheets 1976-80 ............ 20 12. Assumptions used in Least-Cost Analysis and........... Economic Rate of Return ............................. 21 13. Ex-post Least-Cost Analysis - Extension Sta. Isabel ... vs. Steam Plant Alternative ......................... 22 14. Economic Rate of Return - Project Costs and Benefits .. 23 15. Cost Data for Sta. Cruz Gas Turbine .......... ....... 24 16. Main Undertakings in Loan Documents .......... 25 Map This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  PROJECT PERFORMANCE AUDIT REPORT BOLIVIA: ENDE FOURTH POWER PROJECT (LOAN 1238-BO) PREFACE This report presents the results of a performance audit of Bolivia: ENDE Fourth Power Project for which Loan 1238-BO of US$25.0 million was made to Empresa Nacional de Electricidad (ENDE) in June 1976 1/. The loan was fully disbursed and closed by June 1980. The report consists of Highlights prepared by the Operations Evalua- tion Department (OED) and a Project Completion Report (PCR) prepared by the Latin America and the Caribbean Regional Office. In preparing the PCR, the Region took into account the findings of a project completion mission carried out in March 1981 and also the information provided in a completion report prepared by the Borrower. Following its abbreviated procedure, OED has reviewed the Appraisal and President's Reports, the loan documents, the Minutes of the Board discus- sions, the Borrower's completion report, and the PCR. OED has also discussed the project with Bank staff. On the basis of this limited review, OED finds no reason to disagree with the general conclusions of the PCR. Following normal OED procedures, a draft copy of this report was sent to the Government and ENDE for comments. However, none were received. 1/ Project Performance Audit Reports (PPARs) on Bolivia: ENDE Second Power Project (Credit 148-BO) and ENDE Third Power Project (Credit 433-BO) were distributed to the Board on March 7, 1977 and November 7, 1979 respectively.  - ii - PROJECT PERFORMANCE AUDIT BASIC DATA SHEET BOLIVIA: ENDE FOURTH POWER PROJECT (LOAN 1238-BO) KEY PROJECT DATA Appraisal Actual or Item Expectation Current Estimate Total Project Cost (US$ million) 33.1 36.2 Overrun (%) - 9 Loan Amount (US$ million) 25.0 25.0 Disbursed - 25.0 Date Physical Components Completed 03/31/80 12/31/80 Proportion Completed by Appraisal Target Date - 80 Proportion of Time Overrun (%)- 19.5 Incremental Financial Rate of Return (%) 19 2 Financial Performance Rate of return Met through 1978 of at least 9% but not in 1979 on assets and 1980 Institutional Performance - Satisfactory Cumulative Estimated and Actual Disbursements (US$million) Dec. 31 1976 1977 1978 1979 1980 (i) Appraisal Estimate 1.5 8.4 16.0 22.6 25.0 (ii) Actual 0.2 7.4 14.3 23.6 25.0 (ii) as % of (i) 14 89 89 105 100 OTHER PROJECT DATA Original Actual or Item Plan Current Estimate First Mention in Files or Timetable 06/25/74 Government's Application 05/07/75 Negotiations 03/01/76 03/02/76 Board Approval 04/06/76 04/06/76 Loan Agreement Date 06/02/76 06/02/76 Effectiveness Date 08/02/76 09/02/76 Closing Date 06/30/80 06/30/80 Borrower Empresa Nacional de Electricidad (ENDE) Fiscal Year of Borrower Calendar Follow-on Project Name None - ill - MISSION DATA Month/ No. of No. of Man- Date of Item Year Weeks Persons weeks Report Identification 06/74 1 1 1 06/25/74 Preappraisal 04/75 1 2 2 05/02/75 Appraisal 10/75 2 2 4 03/14/76 Total 7 Supervision I 06/76 1.5 1 1.5 06/28/76 Supervision II 04/77 1 1 1 04/15/77 Supervision III 12/77 0.5 2 1 12/19/77 Supervision IV 08/78 1 1 1 08/28/78 Supervision V 12/78 2 2 4 01/03/79 Supervision VI 03/80 1.5 2 3 04/01/80 Supervision VII 04/80 1.5 1 1.5 05/02/80 Total 13 COUNTRY EXCHANGE RATES Name of Currency: Bolivian Peso ($b) Year: Exchange Rate: Appraisal Year Average US$1 = $b20 Intervening Years Average US$1 = $b20 Completion Year Average US$1 = $b25 - iv - PROJECT PERFORMANCE AUDIT REPORT BOLIVIA: ENDE FOURTH POWER PROJECT (LOAN 1238-BO) HIGHLIGHTS The project comprised additions to the generating capacity and transmission system of Empresa Nacional de Electricidad (ENDE), a bulk power supplier created at the time of the Bank's first lending operation to the Bolivian power sector in 1964. After appraisal, the project was slightly modified for justifiable reasons (PCR, para. 2.02) and was executed about nine months behind schedule for a total cost which was marginally higher than the appraisal estimate (PCR, paras. 3.01, 3.02, 3.05 and 3.06). The project has been operating successfully, except for an incident with the gas turbine unit, which failed; the consequential damage took about a year to repair and cost ENDE a little under US$1 million. However, this incident apparently did not have a major adverse effect on the system supply (PCR, para. 3.12). During the project period 1976-80, ENDE's total energy sales in- creased by 17.4% p.a., which is about the same as the appraisal forecast. Financial performance through 1978 was satisfactory but deteriorated in 1979 and 1980 because tariff increases were inadequate and the rate of return on assets fell below the 9% stipulated in the loan agreement (PCR, paras. 4.02- 4.04). The recalculated incremental financial rate of return on the project is 2%, which is lower than the 19% estimated at the time of appraisal, mainly due to inadequate tariffs (PCR, para. 6.03). The PPAR on the ENDE Third Power Project highlighted the need for Government commitment in order to reduce ENDE's accounts receivable. Although such a commitment was obtained under the Fourth Power Project, the Government still did not take the necessary action, and consequently ENDE was unable to collect the amounts owed by public enterprises. Largely because of this, ENDE's accounts receivable throughout the project period remained at a very high level and well above the levels stipulated in the Loan Agreement (PCR, para. 4.05).- Additionally, under the Loan and Guarantee Agreements, ENDE is required to charge a two-part tariff, i.e. a tariff based on demand and energy, to all bulk supply customers; this has been done, except in the case of a regional distribution company, which resisted the change (PCR, para. 5.04) The institutional performance of ENDE has been satisfactory. ENDE, however, may have difficulties in increasing its higher level staff in order to meet its prospective additional responsibilities; ENDE's salary scales for higher level staff are not competitive with those in the private sector (PCR, paras. 5.01 and 5.02). Bank lending to Bolivia has contributed generally to the sound development of the power sector and to the strenghtening of ENDE in particu- lar. Furthermore, the Bank has helped to reinforce the role of the Government Regulatory Agency, Direccion Nacional de Electricidad (DINE), in the overall coordination of the sector entities (PCR, para. 7.01). -v - The following points may be of special interest: - local contractors' apparent lack of relevant experience con- tributed to project implementations delays (PCR paras. 3.02, 3.10 and 3.11); - frequent changes in the Government contributed to lack of necessary Government action to support increases in ENDE's tariffs, reduction in accounts receivable, and implementation of two-part tariff for one distribution entity (PCR para. 7.02). ATTACHMENT BOLIVIA: ENDE FOURTH POWER PROJECT (LOAN 1238-BO) PROJECT COMPLETION REPORT I. INTRODUCTION AND BACKGROUND 1.01 Loan 1238-BO is the latest of a total of five Bank Group lending operations made so far with the Bolivian power sector; the first two IDA credits (61-BO and 62-BO) were made simultaneously in 1964 for a total of US$15 million, of which US$10 million was received by the newly-established ENDE for the construction of the Corani dam and associated facilities, and US$5 million by the then Canadian-owned Bolivian Power Co. (BPC) for the construction of the Chururaqui dam and associated lines. The third IDA credit (148-BO) was signed in 1968 for US$7.4 million to be used by ENDE for the construction of the Santa Isabel plant and associated facilities. Credit 433-BO was signed in 1973 for an amount of US$6.0 million and used by ENDE to finance a gas turbine (22.8 MW) in Santa Cruz, the extension of transmission and substation facilities in the Oriental and Central Systems, and a new office building. All four projects were completed without major problems (see Performance Audit Reports No. 1496 and 2733). Loan 1238-BO, which is the object of this report, was made to ENDE in 1976 to finance the ENDE IV Power Project, and the Bank is currently preparing the ENDE V Power Project which would include, inter alia, the Central-Oriental interconnection and the fourth unit of the Santa Isabel hydroplant. 1.02 Following satisfactory tariff actions by the Government in 1975 in order to alleviate ENDE's financial difficulties, the ENDE IV Project, which had been identified during a mid-1974 Bank mission, was appraised in October 1975 and the loan made effective on September 2, 1976. 1.03 The Project was intended primarily to help meet the growth in electricity demand from existing and new consumers in ENDE's system through 1981. The Bank also intended to continue to support the dominant role of ENDE, an institution which it had helped to create, in the development of the Bolivian power sector. II. PROJECT DESCRIPTION Original project description 2.01 The original ENDE Fourth Power Project included the following items: (a) Expansion of the Santa Isabel hydroelectric power station with the incorporation of a third unit (18 MW) and the installation of the second penstock (about 2,650 meters); (b) Cinstruction of a compensating pond with a capacity of 100,000 m , to be located at the Santa Isabel power station intake, to store water from the Corani power station; (c) Collection of water from the Swo arms of the Vinto river at a maximum discharge rate of 3 m /second for diversion to the Santa Isabel tunnel; - 2 - (d) Installation of a gas turbine with a capacity of approximately 22.8 MW at the Santa Cruz power station; (e) Construction of a 150 km long, 115 kV single circuit transmission line between the Sacaba and Vinto substations; and (f) Construction of the Vinto substation, expansion of the Cochabamba and Sacaba substations and installation of shunt capacitors at the Oruro substation. Changes to the Project 2.02 In general, the scope of the project remained as envisaged at appraisal. The most important change was the incorporation of substation equipment (and installation) related to the new gas turbine in Santa Cruz, which originally was not considered as part of the project; such equipment included 5 circuit breakers, 2 transformers, 1 switchgear and miscellaneous control and protection devices. Other minor changes were introduced as follows: (a) the design of the Vinto river intake Ias modified to bring the maximum discharge rate from 3 to 10 m /second, as a result of more refined hydrological studies; (b) the decision was taken to construct a new substation at Cochabamba (Valle Hermoso) instead of expanding the existing one in Sacaba; this change was justified as it increased the reliability of the system, and in light of inadequate space in the Sacaba station for a ring bus system; (c) additional communication equipment was installed at the Sacaba substation; (d) three 69 kV bays were installed in addition to the capacitor bank at the Vinto substation. - 3 - III. PROJECT IMPLEMENTATION AND COST Project Execution 3.01 All the project items were completed with some delays as shown in the following table: Completion Date Project item Original Actual Delay (months) Santa Isabel expansion 3/31/80 12/31/80 9 Compensating pond 2/29/80 6/30/80 4 Rio Vinto intake 2/29/80 12/31/80 10 Santa Cruz gas turbine 4/30/78 6/15/78 1.5 Sacaba-Vinto line 11/30/79 6/30/80 7 Substations 11/30/79 9/30/80 10 Shunt capacitors - Oruro 11/30/79 N.A. N.A. 3.02 Late completion of the Santa Isabel plant expansion and the Rio Vinto intake was due primarily to difficulties encountered in the supply of major equipment and materials and poor performance by the local civil works contractor (para. 3.10). Delays in the construction of the transmission line and substations were caused mainly by the poor performance of the local civil works contractor (para. 3.11). The capacitors for the Oruro substation have been purchased but not yet installed because of difficulties encountered with BPC (the owner of the substation); the resulting delay is not, however, critical to ENDE's operations. Procurement 3.03 Procurement of Bank-financed items was carried out under the usual consultation with the Bank and no significant problems were reported in relation to bidding procedures and contract awards. 3.04 Countries of main contractors and suppliers are listed below (a complete list of contracts is included in Annex 1). Contract Firm Civil works Sta. Isabel and intakes Bolivia Civil works lines and substations Bolivia Gas turbine (turn-key) Japan Pelton turbines W. Germany Pennstock Switzerland Steel structures for lines Mexico Transformers and circuit breakers Sweden -4- Project Cost 3.05 Detailed breakdowns of the original and actual costs of the project in current and constant (1976) prices are shown in Annexes 2 and 3 respec- tively. The local and foreign price deflators used in the latter are shown in Annex 4. A summary of project costs is shown in the table below: Project Cost (thousands of US$) Appraisal Actual Increase Base Cost (1976 prices) 21,079 25,163 Physical contingencies 1,728 - Project Cost in constant 1976 prices 22,807 25,163 +10% Price contingencies 6,009 6,134 Total Project Cost in current prices 28,816 31,297 +9% Interest during construction 4,264 4,885 3.06 The total project cost shows an overrun of about 9% (US$2.5 million) in current prices and about 10% in constant (1976) prices. Cost increases resulted largely from: (i) changes in project scope for the Santa Cruz gas turbine and the Cochabamba and Vinto substations (para. 2.02); (ii) delays in project construction for the engineering and administration component; and (iii) depreciation of the Bolivian peso against the currencies of some large contracts, i.e. Yen, Swiss franc and Deutsche Mark (para 3.04). Disbursement of the Bank loan 3.07 About 95% of the loan had been disbursed by the original project completion date (January 1980) and the loan was fully disbursed by the original closing date (June 30, 1980). A summary of estimated and actual loan disburse- ments is shown in Annex 5, and a comparison of original and final allocation of loan proceeds by categories is shown in Annex 6. Performance of Consultants and Contractors 3.08 A firm of consulting engineers (USA) was hired by ENDE to prepare and review the bidding documents and offers for the Santa Cruz gas turbine; in association with a local consulting firm, they also assisted ENDE for the final design and supervision of the Sacaba-Vinto line and associated substations; although their performance was generally satisfactory, ENDE indicated that some errors had been made in the designs and bidding documents while the local firm had shown a tendency to use an excessively high number of personnel. - 5 - 3.09 ENDE hired a firm of consulting engineers (Canada) in associa- tion with a local consulting firm as consultants for the expansion of the Santa Isabel plant and the construction of the compensating pond and Rio Vinto intakes; ENDE found the local consultant's performance unsatisfactory, due to lack of qualified personnel; the Canadian firm's performance was judged generally satisfactory. 3.10 The local civil works contractor in charge of the Sta. Isabel expansion, compensating pond and intakes, showed little experience in carrying out this kind of work; in addition, apparently due to financial problems, it sought to reduce both labor and construction equipment, which led to substantial delays in project completion. 3.11 The local civil works contractor for the lines and substations, performed satisfactorily in the construction of the Sacaba-Vinto line but showed little experience in the erection of the two terminal substations for this line. Operating performance 3.12 Shortly after the expiration of the guarantee period (December 1979), an accident occurred in the Santa Cruz gas turbine caused by a gas leak from a loose gas nozzle injector, resulting in overheating of the machine; repairs took longer than expected (about one year), at a cost of about US$900,000. However, no critical effect was reported to the system (except for one and a half day of load shedding in the Santa Cruz area) due.to the large reserve capacity of-the oriental system. 3.13 All other project components have been operating satisfactorily. IV. MARKET AND FINANCIAL PERFORMANCE Actual and Forecast Market 4.01 The annual and total actual sales per region in the 1976-1980 period were lower for the Southern system and higher for the Oriental and Central Systems than those estimated at appraisal, as shown in detail in Annex 6. Overall, however, ENDE's average annual sales growth was in line with the appraisal estimate (17.4% p.a. vs. 17.6% p.a. forecast). The unus- ually high growth rate of 1977 (31%) is due to the abnormally low level of ELFEC's own generation due to a dry spell in the Central Region. Operating Results 4.02 Annexes 9 through 11 show ENDE's forecast and actual financial statements for the 1976-1980 period. ENDE's operating income slightly exceeded appraisal expectations between 1976 and 1978, corresponding to an - 6 - average annual rate of return on revalued assets of 9.2% (vs. 8.8% expected), higher than the minimum of 9% provided by the Electricity Code and included in a loan covenant (Annex 16). ENDE's operating ratio remained at a reasonable 44% by 1978 (vs. 50% forecast). However, starting 1979, ENDE's earnings performance started to deteriorate primarily due to the absence of tariff increases during most of 1979 (rates were increased by 25% on average only in December), while local inflation reached 45% in that year; as a result ENDE's rate of return declined to 7.2% in 1979. As frequent government changes prevented further tariff actions to be taken during 1980 (rates were finally increased by 55% in January 1981), and in the face of continuing high local inflation (25% p.a. during 1980), ENDE's financial performance deteriorated further and its rate of return declined to 6.8% (est.) for 1980. Due to insufficient tariff increases, ENDE's average revenue per kWh declined, in constant terms, by about 20% between 1977 and 1979. For the whole 1976-1980 period, ENDE's average annual rate of return was only 8.3%; other major financial ratios are shown in Annex 8. Financing Plan 4.03 A summary of ENDE's estimated and actual financing plans for the 1976-1980 period is shown below: Appraisal Est. Actual SOURCES OF FUNDS: $b 106 % $b 106 % Gross internal cash generation 1,135.4 42 1,161.1 43 Less: Debt Service (357.9) (13) (301.7) (11) Net internal cash generation 777.5 29 859.4 32 Borrowings 1,787.4 67 1,655.3 61 Equity contributions 100.4 3 114.7 4 Other sources 13.4 1 98.3 3 TOTAL SOURCES 2,678.7 100 2,727.7 100 USES OF FUNDS: Investment expenditures (incl. IDC) 2,513.0 94 2,663.5 98 Increase (dec.) in working capital 69.1 3 4.9 - Other uses 96.6 3 59.3 2 TOTAL USES 2,678.7 100 2,727.7 100 - 7 - 4.04 Although ENDE's average net internal contribution to its invest- ments during the whole 1976-1980 period was a reasonable 32% (vs. 29% forecast), the annual ratio showed a steady deterioration from a high of 75% in 1976 to a low of 19% in 1979 (Annex 8), reflecting the erosion of ENDE's tariffs in real terms during the latter part of the period (para. 4.02). As much as 86% of ENDE's construction expenditures were financed through borrowings in 1979, in the absence of any substantial government equity contributions. ENDE's annual debt service coverage ratio also started decreasing in 1979 but still remained within a comfortable range (3.6 in 1980), a reflection of the long maturities obtained on ENDE's past borrowings (mainly IDA, IDB and IBRD). 4.05 ENDE was unable, during the whole 1976-1980 period, to reduce significantly the level of its overdue accounts receivable (mainly from public enterprises such as COMIBOL, the state mining concern). Although ENDE and the Government, in a loan covenant (Annex 16), had agreed to a reduction in the level of ENDE's receivables to three months of billings by January 1, 1977 and two months by Jannuary 1, 1978 and thereafter, they have remained at an excessively high level (US$4.8 million, equivalent to 119 days of billings as of January 31, 1981); in spite of ENDE's efforts and of repeated Bank requests, this situation could not be improved because the various Government agencies involved (Ministries of Energy, Mines and Finance) were not able to agree on specific procedures for settlement of arrears. 1! V. INSTITUTIONAL PERFORMANCE Organization and Management 5.01 ENDE, established in 1965 as a limited liability company, and owned almost entirely by the Government, has been able to adapt successfully to a rapid growth of its activities. Necessary administrative changes were handled satisfactorily with the assistance of ENDE's management consultants, whose services were partially financed by Credit 433-BO. As required under the Loan Agreement, a training program prepared in consultation with the Bank, was carried out satisfactorily. ENDE's staff is generally competent and now counts 490 employees; installed capacity per employee is about 353 kW, which is satisfactory for this type of company. 5.02 However, ENDE seems to have attained the limit of its project executing capability with its current organization and staffing; at the same time, ENDE has not been able to attract highly qualified personnel because of its low salaries. The Bank has thus strongly recommended to the Government that ENDE's higher-level salaries be increased so as to avoid staffing problems and their potential negative impact on ENDE's heavy expansion program. This issue may become all the more important in the face of the possible take-over by ENDE of BPC's operations in the near future. A management and organization study is to be included in the proposed ENDE Fifth Power Project. 1/ The Government has informed the Bank that it is in the process of setting up a clearing mechanism for intragovernmental debts. -8- Auditors 5.03 ENDE's accounts have been audited by external auditors satisfactory to the Bank (Arthur Young & Co. from 1976 to 1978 and Deloitte, Haskins and Sells in 1979-1980). Audited statements have sometimes been received late by the Bank, but with delays usually not exceeding one month. Compliance with main covenants 5.04 Annex 16 lists the major covenants included in Loan 1238-BO. ENDE has not been able to comply with three of them: (i) its rate of return fell short of the required 9% in 1979 and 1980 (para. 4.02); (ii) its accounts receivable have exceeded the covenant limit (para. 4.05); and (iii) steadfast opposition by CRE (the Santa Cruz distributing company) and the lack of Government support have prevented ENDE to charge this company a binomial tariff (energy and demand) as it was required to do for all bulk consumers. In all three cases, however, ENDE's non-compliance can be largely attributed to the fact that the Government failed to take decisive action to permit compliance by ENDE (as it was required to do under Section 3.02 of the Guarantee Agreement). As ENDE's maximum future debt service coverage ratio as calculated under the loan covenant is presently, and is expected to continue to be, below the 1.5 benchmark, ENDE will have to submit to the Bank for its agreement any future loan contract it intends to sign. VI. PROJECT JUSTIFICATION Least-Cost Analysis 6.01 The appraisal report included a least-cost analysis comparing the expansion of the Santa Isabel plant and associated transmission facilities with an alternative consisting of the installation of an 18 MW steam power plant (using natural gas) in Oruro. A similar ex-post comparison (Annexes 12 and 13) shows that the Santa Isabel expansion is still the least-cost solution for discount rates lower than 27% (vs. an equalizing discount rate of 23% calculated at appraisal). 6.02 The appraisal report stated that the adoption of a 22 MW-sized gas turbine for the expansion of the Santa Cruz power station was the least-cost solution compared to gas turbines ranging between 13 MW and 22 MW, the only feasible alternative. This is still valid, given the higher capital cost per kW of smaller units, and the urgent need, at the time, to transfer existing small diesel units (4 x 3.3 MW) from the Sta. Cruz plant to Sucre. Internal rate of return 6.03 The rate of return of the program had been estimated at appraisal at 18.9%. An ex-post calculation of the internal rate of return for the whole project (Annexes 12 and 13) gives rates of 2% at the retail level (i.e. including distribution costs) and 7% at the bulk level, based on the latest tariffs effective in Bolivia (US14.3 per kWh for bulk and US15.5 for retail as of March 1981) and updated forecasts of fuel prices. Considering that - 9 - the opportunity cost of capital in Bolivia is presently estimated at 11%, these results tend to show that, even in spite of the recent increases, power tariffs remain inadequate (retail tariffs even more so than bulk tariffs), particularly in the face of expected real increases in the price of natural gas. VII. BANK PERFORMANCE 7.01 Working relations between the Bank and ENDE and the Power sector authorities have remained excellent over the project implementation period. Following four previous power lending operations (Credits 61-BO, 62-BO, 148-BO and 433-BO), Loan 1238-B has contributed to ensure the sound development of the Bolivian power sector and to strengthen ENDE's role in it. Examples of the Bank's positive impact include: (i) development of the sector's expansion plan according to economic criteria; (ii) reinforcement of DINE's role in the overall coordination of sector entities; and (iii) mandatory annual revaluation of ENDE's assets for tariff-setting purposes. 7.02 However, the Bank's ability to promote Government actions on other specific important issues such as tariff policy and government arrears was reduced by frequent Government changes and the fact that, on several occasions during the latter part of the project implementation period, the Bank was led to reassess its lending program to Bolivia based on creditworthiness consider- ations; this resulted in delays in the preparation of the Fifth ENDE Power loan, the most effective vehicle for addressing such issues. Significant improvements have .taken place with respect to tariffs and government arrears in late 1980 - early 1981. as the Bank was stepping up its preparation of the ENDE V project. VIII. CONCLUSIONS 8.01 This project was carried out with only minor problems and no special lesson can be learnt from it. 8.02 As already noted in the Project Completion Report for Credit 438-BO (ENDE III Power Project), the following could have helped in improving the Borrower's performance during project execution: (i) obtaining a formal commitment from the Government itself (rather than from ENDE only) with respect to specific procedures for the settlement of public arrears (paras. 4.05 and 5.04); (ii) strengthening of ENDE's organization in view of its large future investments (para. 5.02). These aspects will be focused on during the upcoming appraisal of the ENDE V Project. Latin America and the Caribbean Region April 6, 1981  8- -- ~ 3 8 g 88 o 8 08o o - 4j B r 8 8 5 flo 5 ö & p - o fo n- -r 0 - - o e 0 0 - 0 g---to 0 5 5 0 0-0 0 01- 0- 8l2 - 0 0 00 0 0 o5 50 5 0 ;o£ oo; s.. fl* 0 £ 0 0 5 3 0 2O 0 0 z o < a 0.0'i 5 n m 0 - 0- 0 0 - e . . . - - .. o . .f o ~ 0o =5 0 0 o . .0 o e - , e 0 0 0 - 0 0 -0o e - 0 0 . - 0 - - ~ 0 - . . - 8 0 0 - - 0- 0 * 0 0 0 - 0 0 00 0 0 - 0 0 0 f - 0 0 0 0o 0 0 o - 0 0 0 0 - 0 0 5 3 : eue0 0 0 0 00 fle0 3 s-8oooococ. o o o - - .0 - - 0 5 0e - 0 oee e -e e o 0 0 - 0 0 0 lo 4 IBRD LOAN 1238 - BO ENDE FOURTH POWER PROJECT - BOL(VIA PROJECT COST (thousands of current US$) 0 A 1 I N A L F I N A L LC FC TOTAL LC FC TOTAL I GENERATING FACILITIES 0 SANTA ISABEL POWER PLANT 1175 4576 - 5751 I 379 I 7 462 1 8 841 2 b SANTA ISABEL COMPENSATING POND, 789 555.- ),344.- 793 4 603 I 1 596 5 c RIO VINTO INTAKES 328 821- 1,1 55- 496.5 252- 748 5 d GAS TURBINE UNIT AT SANTA CRUZ 479 3340- 3,819- 4928 7 0727 7 565 5 e SUB-TOTAL 2771 9.298- 12.069- 3 161 8 15 389.9 18,5!S 7 2 TRANSMISSION FACILITIES A SACABA VINTO TRANSMISSION LINE I 392 3986 - 5.378.- 826 2 3 135 9 3 964 I b EXPANSION SACABA SUBSTATION 17.- 148 . 165 235 5 235 5 EXPANSION COCHABAMBA 140- 663 a03 415 1 I 778 7 2 193 a a VINTO SUBSTATION 86- 597 - 6 - 257 1 1 339 1.596 9 e SHUNT COMPENSATION- ORURO I8 - 50 68- 6 3 68 3 I SUB-TOTAL I 653 - 5444 7097- I 500.4 6 558 2 8.058 6 3 . ENGINEERING AND ADMINISTRATION 908- I 00- I 913- 3 149 8 1 537 2 4 66T - TOTAL DIRECT COST 5 352- 15747 21 079 - 7 812- 23.485 3 31 297 5 4 CONTINGENCIES o PHYSICAL CONTINGENCIES 509 I 219- I 728 - b PROVISION FOR PRICE INCREASE 2239 3770 6009- C SUB - TOTAL 2748- 4989 7737- 5 INTEREST AND OTHER FINANCIAL CHARGES DURING CONSTRUCTION 4264 4264 - 4,884.7 4,884.7 TOTAL PROJECT COST 8080 25,000 33080- 7 812 - 28,370.0 36,182.0 BOLIVIA Empresa Nacional de Electricidad (ENDE) Completion Report - Loan 1238-CO Original and Actual Project Cost at constant (1976) prices (US$ '000) Local Cost Foreign Cost Total Cost Original Actual -A % Original Actual M5(%) Original Actual % 1. Base Cost Generation: (a) Sta. Isabel power plant 1,175.0 1,037.6 (12) 4,576.0 5,536.2 20 5,751.0 6,753.8 17 (b) Sta. Isabel compensat. pond 789.0 559.9 (30) 555.0 458.9 (18) 1,344.0 1,018.8 (25) (c) Rio Vinto intake 328.0 350.1 6 827.0 183.5 (78) 1,155.0 533.6 (54) (d) Gas turbine unit-Sta.Cruz 479.0 443.5 (8) 3,340.0 6,442.2 92 3,819.0 6.885.7 80 Sub-total 2,771.0 2,391.3 (14) 9,298.0 12,620.6 35 12,069.0 15,011.9 24 Transmission (a) Sacaba-Vinto line 1,392.0 617.3 (44) 3,986.0 2,585.7 (36) 5,378.0 3,203.0 (41) (b) Expansion Sacaba substation .17.0 - n.a. 148.0 190.7 28 165.0 190.7 15 (c) Exp. Cochabamba substation 140.0 320.5 129 663.0 1,411.8 112 803.0 1,732.3 115 (d) Vinto substation 86.0 187.3 117 597.0 1,060.9 77 683.0 1,248.2 S2 (e) Shunt compensat. Oruro 18.0 - n.a. 50.0 55.7 11 68.0. 55.7 (19) Sub-total 1,653.0 1,125.2 (32) 5,444.0 5,304.8 (3) 7,097.0 6,430.0 (10) Engineering and Administration 908.0 2,471.1 172 1,005.0 1,249.9 24 1,913.0 3,721.0 94 2. Physical Contingencies 509.0 - n.a. 1,219.0 - n.a. 1,728.0 - n.a. Total Base Cost (1976 US$) 5,841.0 5,987.5 2 16,966.0 19,175.3 13 22,807.0 25,162.8 10 Price Contingencies 2,239.0 1,824.5 (19) 3,770.0 4,310.0 14 6,009.0 6,134.5 2 Total Project Cost (current US$-excl.interest) 8,080.0 7,812.0 (4) 20,736.0 23,485.3 13 28,816.0 31,297.3 9 IBRD LOAN 1238 - BO ENDE FOURTH POWER PROJECT - BOLIVIA INFLATION RATES 1975 -1979 L 0 C A L F 0 R E I G N INFLATION DEFLATOR INFLATION DEFLATOR RATE % RATE % 1975 - 1.000 - 1.000 1976 4 4 1,022 1.0 .005 1977 8.2 I 087 9 7 1.059 I 1978 tO 4 I [88 14 5 I 108 1979 19 7 1.370 12 0 1 345 1980 47.0 1.6101/ 12.5 1.513 SOURCE . LOCAL-BOLETIN ESTADISTICO BANCO CENTRAL DE BOLIVIA FOREIGN - Index of International Inflation. 1/ After adjustment for devaluation of peso implemented at end-1979 (from $b20 to $b25 per US dollar). 41 IBRD LOAN 1238 - BO ENDE FOURTH POWER PROJECT - BOLIVIA ACUMULATED DISBURSEMENTS FROM THE LOAN ACCOUNT (IN THOUSANDS OF US S EQUIVALENT) IDA ACTUAL TOTAL APPRAISAL ACTUAL DISBURSEMENTS FISCAL YEAR AS A PERCENTAGE OF AND SEMESTER DISBURSEMENTS ESTIMATE APPR ESTIMATE DEC 76 221.0 I 534.0 14.4 JUNE 77 493.9 3 522.0 14.0 DEC 77 7 409 0 8 375.0 88.5 JUNE 78 10.587.2 12 996.0 81.5 DEC 78 14.259.2 15 998.0 89.1 JUNE 79 18.488 0 20 274.0 91.2 DEC. 79 23.587 3 22.563 0 104.5 JUNE 80 24 855.8 25000 0 99.4 DEC 80 24 999.5 25 000 0 100.0 18RD LOAN 4238-80 ENDE FOURTH POWER PROJECT - BOLIVIA ALLOCATION OF LOAN PROCEEDS (In US$ equivalent) 0 R I G I N A L F I N A L C A T E G O R Y AMOUNT OF THE CREDIT AMOUNT OF THE CREDIT ALLOCATEO EXPRESED IN US S ALLOCATED EXPRESED IN US S (1) MATERIALS, AND EQUIPMENT INCLUDING INSTALLATION 7 800 000- 7,660,622.24 (PARTS A B AND C OF THE PROJECT) (2) MATERIALS AND EQUIPMENT INCLUDING INSTALLATION 3 900 000- 7,072,700.00 l/ (PART D OF THE PROJECT ) (3) MATERIALS, AND EQUIPMENT INCLUDING INSTALLATION 5 400 000- 5,905,302.48 I/ (PARTS E AND F OF THE PROJECT) (o )IMPORTED (D) LOCALLY PRODUCED (41 ENGINNEERING SERVICES I 300 000- 1,261,478.92 (5) INTEREST AND OTHER CHARGES 4.300. 000.- 3,099,896.36 (6) UNALLOCATED 2.300 000-- TOTAL 25 000.000- 25,000,000.00 1/ Bank records show disbursements of US$3,692,824.26 for Category 2 and US$9,285,138.22 for Category 3 but those figures have to be corrected due to errors made in allocation among loan categories. IRO LOAN 1238 - 80 ENDE FOURTH POWER PROJECT - BOLIVIA ACTUAL AND FORECAST SALES AND REVENUES 1976 -1980 978 1977 1978 1979 1980 TOTAL YEAR ENDING DECEMBER 31 1978 1980 ESTIMATED ACTUAL ESTIMATED ACTUAL ESTIMATED ACTUAL ESTIMATED ACTUAL ESTIMATED ACTUAL ESTIMATED ACTUAL ENERGY SALES (GWh) CENTRAL SYSTEM 192 3 200.2 227 9 269 2 265 3 293 8 289 3 309 9 310 5 3g.1 1.253 1,442.2 SOUTHERN SYSTEM 44.3 38 2 61 2 so 9 79.9 5 4 III I 566 1298 65.8 426 3 269.9 ORIENTAL SYSTEM as 6 94 2 99 4 116.3 123 9 139 I 156 6 163 3 1772 197.6 642.7 710.7 TARIJA SUB SYSTEM T - - - - - 10.5 - 11.3 . - 21.8 TOTAL 322 2 3326 368 5 9364 469 I 491 3 5570 540 3 6175 2.3543 a27444.6 CENTRAL SYSTEM 52.88 50 Is 52.60 si 84 53.25 52 01 63.16 54 es 68.71 69.10 59.05 56.72 SOUTHERM SYSTEM 55.58 55 91 55 70 61 19 68,03 63 06 84.33 64 T3 115.13 87.70 83.56 68.06 ORIENAAL SYSTEM 48,42 9 838 50.00 S' 30 50.00 51 26 55.38 51 92 66.22 62.30 55,57 54.10 TARWA SUB SYSTEM - - - - - - - 76 eI - 95.70 - . TOT 52,07 so 32 52.42 52 79 54.91 53 2 65.20 55 44 77.75 69.40 62.54 57.48 OPERATING REVENUE (in 000 Sb) CENTRAL SYSTEM 101,694 1oU 423 119,874 139 565 141,265 152 605 182,733 170 019 213,342 255.213 758,908 818.825 SOUTHERM SYSTEM 24,623 21.356 34,084 31 146 54,357 36 b,4 93,696 36 650 149,444 57,718 356,204 183,694 ORIENTAL SYSTEM 41,451 43 57T 49,700 59 664 61,950 71 334 86,732 B4.793 117,344 123.147 357,177 384.515 TARIJA SUB SYSTEM - - - - - 8 065 10.779 - 18.864 TOTAL 167,768 167 3s6 203,658 230 375 257,572 260 963 363,161 289 s27 480,130 446,877 L,72,289 1,605,098 PLUS OTHER OPERATING REVENUES - 16 - - - - - 32.850 - 33.018 TOTAL OPERATING REENUES 167,768 17 524 203,658 230 375 257,572 260 963 363,161 299 527 480,130 479,727 1.49s590 1,438,116 IBRD LOAN f238-SO ENDE FOURTH POWER PROJECT - BOLIVIA PERFORMANCE INDICATORS 1976 1977 1978 1979 1980 ESTIMATED ACTUAL ESTIMATED ACTUAL ESTIMATED ACTUAL ESTIMATED ACTUAL ESTIMATED ACTUAL EFFICIENCY INDICATORS NUMBER OF EMPLOYEES 275 279 300 337 325 459 370 472 400 496 ENDE SALES GWh 322 332 6 368 436 4 469 491 Z 557 540 3 6i7 643.7 GWh SOLD/EMPLOYEE 1 17 I 19 I 29 I 29 I 44 I 07 I 50 I 14 I $4 1.30 I) ENERGY NOT SUPPLIED DUE TO TRANSMISSION OUTAGES IN mWh/YEAR 6 060 13 600 7 I70 17 729 7 950 19 456 7 500 20 259 6 200 n.a. I) AS PERCENT OF SALES 1%) 1 90 4 09 I 84 4 06 I 69 3 96 I 35 3 75 1 00 n.a. FINANCIAL INDICATORS DEBT/EQUITY RATIO 38/62 36/64 41/59 42/58 45/55 40/60 46/54 47/33 47/53 38/62 AVERAGE REVENUES PER KWh SOLD (US 1 ) 0 6 2.5 2.6 2.6 2.7 2.7 3.3 2.8 3.1 3.0 OPERATING RATIO 1%) 45 41 45 41 50 44 4 48 52 44 52 WEIGHTED AVERAGE REPAYMENT PERIOD OF DEBT (ORIGINAL TERMS) OF YEAR-END IS 7 21 36 IA 5 20 6 17 6 20 0 17 I 1B 0 16 4 17.8 WEIGHTED AVERAGE INTEREST RATE OF DEBT AT YEAR-EN 6 I 6 06 6 8 6 0 7 3 7 2 7 6 9 3 3 0 9.1 NET CONTRIBUTION TO INVESTMENT FROM INTERNAL RESOURCES 44 75 23 33 22 32 36 19 32 42 DEBT-SERVICE COVERAGE RATIO 3.4 4.6 2.8 4.4 3.2 4.6 4-6 3.1 2.6 3.6 IBRD LOAN 1238 - BO ENDE FOURTH POWER PROJECT - BOLIVIA INCOME STATEMENTS 1976 - 1980 I PH ThOUSANDS OF BOLIVIAN PESOS) 1976 i?7 1978 1979 1980 YEAR ENDING DECEMBER 31 ESTIMATED ACTUAL fSTIMATED ACTUAL ESTIMATED ACTUAL ESTIMATED ACTUAL ESTIMATED ACTUAL OPERATING REVENUES 167,768 6T SU4 203,65H 230 373 257,572 a60 94s 363,161 299 527 480,130 479,725 OPERATING EXPENSES FUEL II 9ol 68968 IN O70 10.779 22.028 It 814 24,144 j7.84j 31,123 28,803 DEPRECIATION AND AMORTIZATION OF INTANGIBLES 35,772 35 Ioo 44 49 SO 3B2 56743 62 07S 88 131 74 936 lOS 383 127,391 OPERATING AN MAINTENANCE 26 164 22 95 32 950 31 596 48 108 40 191 so 35 1t5C ' 7! in 91,180 TAXESi I' I 21v I 409 I 634 I 710 I 796 2 031 L975 .2 448 2.233 TOTAL 75,092 66 326 93 378 94 591 ID8 589 115 879 174 6s? 155 151 214 1o 249,607 NET OPERATING INCOME 92,676 99 198 110,280 1SS 784 130,983 145 084 190,504 144 376 266,020 230,119 OTHER INCOME 5 982 16 381 4 00 6 902 2 e6? t? Y8 2.921 19 905 2 9s9 15,113 AMORTIZATION OF STUDIES 3 226 4 83' 3 16 - 2.659 S 130 - 4 504 - OTHER DEDUCTIONS - * 3 181 - 13 001 - 31 549 INCOME BEFORE INTEREST CHARGES 1oS 492 I10 728 111,124 139 505 129,191 149 801 186,295 164 230 264,425 244,683 INTEREST: TOTAL INTEREST PAYABLE 35 835 30 260 44 001 40 081 53 590 38 09? 76 826 62.965 147 953 149,015 LESS INTEREST CAPITALIZED IN 914 9.294 IS IRS 9 934 22 05 '2.739 45 003 24 226 59 326 102,556 INTEREST CHARGED TO OPERATIONS 24 921 20 966 30 41 SO 2? 32 435 2-35 5S 823 38 739 88,629 46,457 PLUS INTEREST OWN FUNDS - - 1 486 - II 119 - 19 205 - 18.365 NET INCOME 80.571 69 T6 80,312 1108.44 97,756 135 562 154,472 144.696 175.796 226,318 RATE BASE '1,106 078 1,186,308 1,190,183 1,366,100 1,403,6K 1,582,100 2,037,49C ,002,200 2,904,88 3.365,046 RATE OF RETURN 8.4 %o 8.4 % . 9 o t 9.2 % 9% 2/ 7.2 % 9% 2/ 6.82 1/ Considering revaluation of assets in eAe year. 2/ When inclUding amwrtization of studes in operating expenmes.  ―갼  IAD LOAN 123 - 0 ENDE FOUTH POIIIIIIER PROJECT BOLIVIA ACTUAL AND ESTIMATE BALANCE SHEETS 1976 - 190 (IN THOUSANDS OF BOLIVIAN PESOS) 197F 1977 1978 1979 YEAR ENDING DECEMBER 31 ESTIMATED ACTUAL ESrM ATED ACTUAL ESTIMATED ACTUAL ESTIMATED ACTUAL ESTIMATED ACTUAL ASSETS FIXED ASSET IN OPERATlON 1,261,668 I 321 065 1,400,998 I 484 936 1,802,613 1 80z 40 2,802,728 2 233 612 3,714,872 5.278,391 ACCUILATED DEPRECIATION 175,167 .161 323 237,909 217 057 318,996 292 327 440,315 407 6 583,151 719.536 NET FIXED ASSETS IN OPERATION 1,086,481 1 59 742 1,163,089 I 267.8rs 1,483,617 I SD? 1S 2,362,413 I 825 944 3,131.721 4.558.855 CONSTRUCTION WORK IN PROGRESS 390 692 137 056 026 962 478 720 I 204 21? 689 106 1 050 922 I SI9 som I InI - 13 3 342 TOTAL NET FIXED ASSETS 17-,V3 I 291 79a 1.990,D51 1 744 399 2 19 041 3,13,335 3s 942 * ( 950,197 INVESTMENTS AND LONG - TERM RECEIVABLES 62,716 64 572 60,902 63 492 59,075 75 939 57,237 so 46 55,372 75.649 CURRENT ASSETS CASH AND EQUIVALENT 37,924 es os 28,658 10 las 27,994 1os 954 27,461 120 05s 23,023 47.014 33 PVAES50 T S?97? 74 215 94 973 74 64 91 399 107 946 121 448 L41S.22 OTHER RECEIVABLES 935 5 333 962 6 79 I 031 6 299 I 083 15.364 I 13T 21.032 MATERIALS AND SUPPLIES 20 292 14 291 25 677 10 557 32 15 37 CRs 42 400 43 495 5 631 76.026 OTHER 1 575 9 664 1 654 28 363 1 73" 5SI 1 823 6 105 1 914 3123 TOTAL CURRENT ASSETS 106,173 177 616 107,948 276 to 127,809 229 $15 164,25- 294 032 ZU,1 DEFERRED ASSETS 0 000 Z35 3 000 2 384 3 000 5.400 3 000 13 924 3 000 19,767 STUDIES 60 542 24 004 92 259 39 0IS 103 S60 5S 342 107 430 229 150 129 795 311,212 TOTAL ASSETS 1,721,404 I 563 225 2,254,160 2 129 9on 2,981,378. 2 559 s35 3,745,256 3 932 447 4,678,958 5,645.541 - CAPITAL AND LIABILITIES CAPITAL AMID RESERVES 1,055,550 91s an 1,319,305 I 103 721 1,611,949 I 497 502 1,985,664 I 992 694 2,434,00) 3,361,810 LONG-TERM DEBT IDA CREDITS 238 Hs 242 962 232 700 246 001 226 150 122 103 219 137 - 211 oS - PROPOSED LOAN 30 659 4 503 14? s0 ISO 996 319 950 190 103 451 265 569 079 492 340 600."9 OTHER LOANS 371 784 315 546 500 179 502 lt 781 242 587 152 I 042 71G I 197 637 I 474 024 1,461,190 TOTAL LONG-TERl DEBT 641 787 83 OIl 900 360. 699 mg I 327 50 999 66 1.713 190 1.786 716 a7 0 2,061,639 LESS CURRENT MTURTItS 24 609 29 000 27 493 59 333 29 435 _ s 434 3 2n so e90 E 899 43,086 NET LONG- TERM DEBT £14 479 530 OIl 972 890 960 376 a 29 s's 9463 424 I 9see 75 'm 2 its *1 2.018.735 CURRENT LIABILTIES CURRENT MATURITIES OF LOS- TERM DEBT 26 809 25 000 27 490 39 333 28 435 36 434 53 222 30 950 6t.93* 43.086 NOTES AND ACCOUNTS PAYABLE 7 127 a 010 14 021 35 212 10 21 II 230 is 700 63 484 .7 400 142.648 INTEREST PAYABLE 960 52 332 It 000 63 246 13 400 9 996 19 200 17.633 37 000 19*48 TAXTS PAYABLE , 300 : 674 400 3 025 1 500 3 941 1 700 7 fu 19 850 TOTAL CURRENT LIABILITIES 44 196 a' IE 55 911 140 919 El 599 Al 909 89 822 119 223 119 s1 211.116 OTHER LIABILITIES 40 O- U 399 A 054 25 063 a 928 36 S00 9 902 64 764 1a 616 661 TOTAL CAPITAL AND LIABILITIES 1,721,404 5 se3 225 2,254,160 2 129 996 2.981.378 2 539 335 3.745.256 6-11,7_-958 5 645.5U1 - 22 - ANNEX 12 BOLIVIA ENDE Completion Report - Loan 1238-B0 (ENDE IV) Assumptions used in Least-Cost Analysis and Economic Rate of Return 1. Sta. Isabel hydroelectric plant extension Total 0 & M costs: US$55,000 per year (1980 prices) Useful life of plant: 50 years Useful life of associated transmission facilities: 30 years 2. Steam power plant alternative Capital cost: US$845/kW (1980 prices) Fixed 0 & M costs: US$14/kW-year (1980 prices) Variable 0 & M costs: US$720/GWh (1980 prices) Opportunity cost of gas: assuming gradual increases up to US$5.1 per thousand BTU (1980 prices)in 1986 (forecast date for commissioning of gas line to Brazil) and constant thereafter. Heat rate: 12,000 BTU/kWh Useful life of plant: 25 years 3. Sta. Cruz gas turbine Variable 0 & M costs: US$4,00/GWh (1980 prices) Opportunity cost of gas: same as above Heat rate: 12,400 BTU/kWh Useful life of plant: 20 years 4. Distribution system Capital costs: assumed at 70% of generation and transmission capital costs (same as appraisal) O & M costs: US$0.01/kWh (1980 prices) Useful life of distribution facilities: 30 years 5. Revenues Based on average tariffs effective February 1, 1981: bulk: US44.3/kWh retail: US45.5/kWh BOLIVIA Completion Report - Loan 1238-B0 Ex-post Least-Cost Analysis - Extension Sta. Isabel vs. Steam Plant Alternative (thousands of 1980 USS) 18 MW Steam Power Plant Alternative Extension Sta.lsabel Bydro-plant Differential Cost Fuel Capital Cost Year Invest. Cost Fixed OM Variable 0& Price of Fuel GWh Fuel Cost Total Generat. Transm. 06M Total (Steam Plant Legs Sta. Isabel) (US$ pvr 106 BTU) 1976 2.282 - - - - - 2.282 - - - - 2,282 1977 4,563 - - - - - 4.563 111 1.951 - 2,062 (2.501) 1978 6,084 - - - - - 6.084 2,289 4.116 - 6.405 (321) 1979 2.282 - - - - - 2,282 7,702 2,059 - 9,761 (7.479) 1980 - - - - - - - 2.2i2 1,621 - (3.663) 1981 - 252 68 1.6 95 1.824 2,144 - - 55 55 2.089 1982 - 1.7 95 1,938 2,258 - - 55 2.203 1983 - 1.9 95 2,166 2,486 - - 55 2.431 1984 - 2.2 95 2,508 2,828 - - 55 2.773 1985 - 2.4 95 2.736 3,056 - - 55 3.001 1986-2000 - 5.1 95 5,814 6.134 - - 55 6.079 2001 2.282 9.328 - - 55 9,273 2002 4,563 11,609 - - 55 11.554 2003 6.084 13,130 - - 55 13,075 2004 2.282 9.328 - - 55 9,273 2005 - 7,046 - - 55 6.991 2006 - 7,046 - 1,951 2,006 5.040 2007 - 7.046 - 4.116 4.171 2.875 2008 - 7,046 - 2,059 6,230 816 2009 - 7,046 - 1,621 1,676 5.370 2010-28 - 7,046 - - 55 6.991 2029 - 7,046 - (3,249)1/ (3,194) 10,260 Equalizing discount rate: 27% 1/ Residual value. BOLIVIA Completion Report - Loan 1238-BO Economic Rate of Return - Project Costs and Benefits (thousands of 1980 US$) --Total Cost at Wholesale Level--- --------Distribution Costs------ Sales -------Benefits----- Year Sta.Isabel Sta.Cruz GTl/ Total Capit.costs 0 and M Total (GWh) Wholesale Retail 1976 - - - - - - - - - 1977 2,062 7,677 9,739 6,817 - 6,817 - - - 1978 6,405 2,676 9,081 6,093 230 6,323 23 984 1,258 1979 9,761 1,365 11,126 7,088 530 7,618 53 2,268 2,899 1980 3,863 1,538 5,401 2,704 720 3,424 72 3,082 3,938 1981 55 2,146 2,201 - 1,850 1,850 185 7,918 10,120 1982 55 2,257 2,312 - 1983 55 2,480 2,535 - 1984 55 2,815 2,870 - 1985 55 3,038 3,093 - 1986-95 55 6,052 6,107 - 1996 55 14,089 14,144 - 1997 55 8,351 8,406 - 1998 55 6,416 6,471 - 1999-2005 55 6,052 6,107 - 2006 2,006 6,052 8,058 6,817 8,667 2007 4,171 6,052 10,223 6,093 7,943 2008 6,230 6,052 12,282 7,088 8,938 2009 1,676 6,052 7,728 2,704 4,554 2010-15 55 6,052 6,107 - 1,850 2016 55 14,089 14,144 - 2017 55 8,351 8,406 - 2018 55 6,416 6,471 - 2019-28 55 6,052 6,107 - 2029 (3,194) 882 (2,312) (7,567) (5,717) Economic rate of return: at wholesale level 7% at retail level 2% 1/ See Annex 15. - 25 - ANNEX 15 BOLIVIA ENDE Completion Report - Loan 1238-BO (ENDE IV) Cost Data for Sta. Cruz Gas Turbine (thousands of 1980 US$) ------------Fuel------------ Year Invest.Cost Variable 0 & M Price of Fuel GWh Fuel TOTAL (US$ per 106BTU) Cost 1976 - 1977 7,677 - - - 7,677 1978 2,299 92 1.0 23 285 2,676 1979 364 212 1.2 53 789 1,365 1980 - 288 1.4 72 1,250 1,538 1981 - 360 1.6 90 1,786 2,146 1982 - 1.7 90 1,897 2,257 1983 - 1.9 90 2,120 2,480 1984 - 2.2 90 2,455 2,815 1985 - 2.4 90 2,678 3,038 1986-95 - 5.1 90 5,692 6,052 1996 7,677 14,089 1997 2,299 8,351 1998 364 6,416 1999-2015 - 6,052 2,016 7,677 14,089 2017 2,299 8,711 2018 364 6,776 2019-28 - 6,412 2029 (5,170) 1/ 882 1/ Residual value. January 1981 - 26 - ANNEX 16 BOLIVIA ENDE Loan 1238-BO Main Undertakings in Loan Documents Loan Agreement 1. Section 3.02 provides that ENDE shall employ engineering consultants acceptable to the Bank. 2. Section 3.06 provides that ENDE shall, not later than December 31, 1976, prepare a training program for comment by the Bank, to be carried out thereafter. 3. Section 3.07 provides,that ENDE shall, one month after loan effectiveness, prepare a plan of action for comment by the Bank, including, inter alia, the introduction of a budgeting system and the carrying out of an inventory of its assets, to be carried out thereafter. 4. Section 5.02 provides that ENDE shall have its accounts audited annually by independent auditors acceptable to the Bank, and sent to the Bank within four months of the end of each fiscal year. 5. Section 5.04 requires ENDE to obtain a minimum annual rate of return on revalued assets of 9% calculated as provided in the Electricity Code; ENDE's assets shall be yearly revalued in accordance with methods acceptable to the Bank. 6. Section 5.05 requires ENDE to charge all its bulk consumers one month after loan effectiveness, rates based on demand and energy charges. 7. Section 5.06 provides that ENDE shall not incur any debt, without the Bank's prior agreement, if it cannot meet the standard debt service coverage test of 1.5 times. 8. Section 5.08 requires ENDE not to pay any dividends without the Bank's prior agreement. 9. Section 5.09 requires ENDE to maintain no more than 3 months' electricity billings outstanding, starting January 1, 1977 and no more than 2 months, starting January 1, 1978 and thereafter. Guarantee Agreement 1. Section 3.02 stipulates that the Government shall, from time to time, take or cause to be taken all actions necessary to enable ENDE to fulfill its obligations under Sections 5.04, 5.05, 5.08 and 5.09 of the Loan Agreement. - IBRD 16020 (PPA) BOLIV IA SEPTEMBER 1981 BRAZI L POWER SYSTEMS TO BE UNDER CON- EXPANDED FUTURE PROPOSED STRUCTION EXISTING G BG Gas turbine plants OH EH Hydro power plants CI ED Diesel power plants A Substations 220 kv transmission lines 115 kv transmission lines 69kv transmission lines Areas served by systems .ý1o Cities National capital euro -Rivers international boundaries N s-.. This map has been specifically , sprepared for the Project Performance Audit, and is based an 1BRD 10340 R3, T D February 1976. NTRRNIDAD SNORTHEN B R A Z l L SYSTEMý\ /A k.E MINA MATILDE HARCA VTI1CA CAHUA CHURURAQUI ESANTA ROSA BOT JLACA 8Plont, CUTVCCHO ACHACHICALA LA PAZ ZONG CARABUCO vitscO H CHOQUETANGA ANGOSTURA H, ·MSl i BUENAVISTA 1 JCO R O C O R O M I G U I L L A , MRE A R E A H S A N T A IS A B E L Y S T E M 0 HUJAYNACOTA Ht -GHOCAYA 'ORANI sH ACABA CENTRAL MONTERO COLQUIR g COCHABAMBA ARNES SYSTEM DM G VIN fl SANTA CRUZ ] N RURO-)5.1 tCHA CHALUM1 HUAN N CATAVI IHg CUR RE ROSITAS CHILE *"' caiposi C H l L E aPTS 'I POTOSIUH PARAGUAY HM SOUT HERN f PUNUTUMA SYS EM PULACAYO 0 50 200 250 KILOMETERS D TAZNA South D ITELEMAYO S 50 100 150 America _,CHILCOBUJA D MlES GETARI3JAOLIV 22' -d .M 22,- A R G E WT 64 N A 60