Announcement of World Bank Lends Fourteen Million US Dollars to Improve Argentina's Power Distribution System on September 18, 1986

- .... FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. BANK NEWS RELEASE NO. 87/14 Contact: Ciro Gamarra (202) 477-5320 WORLD BANK LENDS $14 MILLION TO IMPROVE ARGENTINA'S POWER DISTRIBUTION SYSTEM WASHINGTON, D.C., September 18 -- Argentina's efforts to improve the efficiency of its regional power distribution system will be assisted by the World Bank. A $14 million loan has been approved by the Bank to help finance a power engineering project that represents the first step towards that objective. The project will assist the government in implementing measures to improve the distribution of electricity in the country by providing the beneficiaries with modern equipment and methodologies to improve their service, planning, and design capability. The engineering project is part of the government's broad-based efforts to improve the efficiency of Argentina's regional power distribution system, notably by strengthening coordination between the national and provincial utilities and the efficiency of the latter companies. The national utilities participating in the project will be Servicios Electricos del Gran Buenos Aires (SEGBA) and Agua y Energia Electrica Sociedad del Estado. The provincial utilities will be Direccion de Energia Electrica de la Provincia de Buenos Aires, Empresa Provincial de Energia de Cordoba, Direccion Provincial de Energia de Santa Fe, and Energia Mendoza, Sociedad del Estado. The project seeks to remove the bottlenecks that impede coordination and efficiency within the sector. It consists mainly of four studies: on service standards and the high level of losses; distribution planning criteria; standards for equipment and materials; and operations and accounting systems. Additionally, the project will improve the coordination between the government and the national and provincial utilities regarding the supply of distribution services and train sector professionals and executives. The engineering project represents a significant expansion in the Bank's involvement in the institutional development of the power sector and will contribute to a more active dialogue among the Bank, the government and the provincial utilities regarding specific policy reforms needed to improve the sector. NOTE: Money figures are expressed in U.S. dollar equivalents.  - 2 - The results of the studies to be carried out under the project will be implemented first under a proposed loan to SEGBA and, subsequently, under prospective lending to provincial utilities. The total cost of the project is estimated at $21.5 million. The Bank loan will finance all the foreign exchange costs. Local costs will be financed by the government and the participating utilities. The project is expected to be completed by December 1991. The World Bank loan is for 15 years, including three years of grace, with a variable interest rate, currently 8.23 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on undisbursed balances. - 0 - ·-