Announcement of Four Million Six Hundred Thousand Dollars Power Loan in Colombia on January 30, 1959

·, - - 1 FOR IMMEDIATE RELEASE WORLD •.... INTERNATIONA , REC<)N ' fil818 H STREET, N.W., WASHINGTON 25, D. C. TELEPHONE: EXECUTIVE 3-6360 PRESS RELEASE NO. 572 SUBJECT: $4.6 million power loan January 30,1959 in Colombia. fl·• The World Bank to,day made a loan of $4. 6 million for a project to increase Jhe supply of electric power to Manizales, the center of Colombia's coffee trade, , a.hd neighboring town~""· The project, by providing 26, 6oo kilowatts of new generating capacity, will ·more than double present capacity in an area where (; industr-ial and commercial growth has been hampered by a shortage of electricity. The loan was made to the Central Hidroelectrica de Caldas, Ltda;. (CHEC). ' This corporation, owned by national and local government agencies, supplies power • in the Department of Caldas. The corporation initiated the development of the hydroelectric potential of the Chinchina and cdmpoalegre rivers by constructing the 16,000-kilowatt La Insula power plant fr,r which the World Bank made a loan of $2.6 million in 1950. The/project for which today's loan was made is the second stage of this I/ development and co!lsists of the corietruction at La Esmeralda of' a 26,600-kilowatt power plant with assodated substations and 76 miles. of transmission lines, and the rehabilitaticn and expansion of distribution systems in several towns. CEEC's ::.nstalled ca:pa.city is at present 22,800 kilowatts, consisting of the La Insula plant and five small plants. CHEC now distributes about 80% of its power di:rectly in Martizales and six smaller towns, and. sells the rest in bulk to a number of other sr.1all towns and several f~ctories outside its present retail area. The Esmera\da project will enable CHEC to extend its services to ., 19 additional towns, where facilities are short of capacity and expensive·to operate. CHEC will build transmission lines to six of the towns and sell power to th~!ll. in bulk; in the 13 others it will build bot;h connecting tranJtnission \ -,.,;J - ••  • f f' ! - 2 - • lines and take over their distribution systems, which it Will expan_d and operate as part of its system. By taking over this operation CHEC Will be able to realize va.rious economies which should,, reduce the cost of, distribution. a Estimates show th_at from mid-1959 until the La Esmeralda plant comes into operation in mid-1961, CBEC will have no reserve capacity, and rationing will be 1\ necessary. Even the,additiotial power from La Es:titeralda Will be absorbed by 1963 or 1964, To avoid or mitigate the ratit,nin.g of power during the 1959-61 period, p ' \\·J\ CHEC is now studying possible ways of increasing i''ts generat:ing capacity before the new plant comes into o:peration. CHEC also plans to co;11plete by about 1964 ~he third and final stage of the utilization of the ~ters of the Chinchina and Campoalegre river basins, by the·construction of what will be known as the San Francisco power project. The total cost of the La Esmeralda project is estimated at the equivalent • of $6.9 million. The Bank's loan will cover the foreign exchange requirements and CBEC will meet the'local currency costs from its own resources. Contracts for the power plant and most of the ()transmission lines and substations have 1> already been awarded (')D the basis of international bidding.. other imported equipment still to be puz:,chased Will be procured on the same basis. The Ban.k's loan is tor a term of 20 years and bee.rs interest of 5-3/41,, including the 11, commission which is allocated to the Bank's Special Reserve. Amortization will begin in November 1962. The loan is guaranteed by the Govern- ment of Colombia. The loan documents were signed on behalf of the Government of Colo1nbia by His Excellency, nr. Jose Gutierrez-Gomez, Colombian Ambassador in Washington, and on behalf of the Central Hidroelectri~a de Caldas, Ltd&. by Dr. Santiago • Sala~ar-Santos, Bconomic Counsellor of the Embassy of Colombia in Washington •