Announcement of Twenty-Five Million US Dollars Loan for Electric Power in Colombia on May 10, 1960

FOR IMMEDIATE RELEASE WORLD • 1818 H STREET, N.W., WASHINGTON 25, D. C. TELEPHONE: EXECUTIVE 3-6360 PRESS RELEASE NO. 633 SUBJECT: $25 million loan for May 10, 1960 electric power in Colombia The World Bank today announced a loan equivalent to $25 million for the expansion of electric power facilities in the Cauca Valley, one of the most rapidly growing industrial and agricultural areas in Colombia. Present generating capacity in the power system serving the Cali area will be nearly doubled by the installation of 93,000 kilowatts of new generating capacity and. the system will be extended to serve most of the towns and villages in • the cauca Valley. Five private banks are participating in the loan., without the World Bank 1 s guarantee, to the extent of $559,000 representing the first two maturities and. pa.rt of the third and fourth maturities which fall due between November 15, 1963 and May 15, 1965. The participating banks are The Bank of New York, Manufacturers Trust Company, The Philadelphia National Bank, Grace National Bank of New York and Girard Trust Corn Exchange Bank. The loan was made jointly to Corporacion Autonoma Regional del Cauca (Cauca Valley Corporation), an autonomous regional organization responsible for developing the resources of the Cauca Valley, and to Central Hidroelectrica del Rio An.chicaya Limitada (CHIDRAL), whose majority shareholder is the Cauca Valley Corporation. CHIDRAL received three earlier Bank loans totaling $10,830,ooo which helped to finance the 25,000-kilowatt Yumbo thermal plant ~ near Cali and 44,ooo kilowatts of capacity in the Anchicaya hydroelectric plant,  t • - 2 - together with the expansion of transmission and distribution facilities. The work being undertaken with the help of today's 1:oa.n consists of the addition of a 33,000-kilowa.tt unit at the Yumbo steam plant; the construction of a new hydroelectric power plant on the Calima River with an ultimate capacity of 120,000 kilowatts; the extension of CHIDRAL's trans- mission system to serve 25 towns a110.· villages in the Cauca Valley and to interconnect it with the power system serving the Depart.ment of Caldas; and. expansion of' the distribution E,ystems in Cali and in the towns and villages to be served. The Calima hydroelectric project will be located about 37 miles ( 6o kms) northwest of Cali;. it includes the construction of a dam to create a reservoir with a useful storage capacity of 320,000 acre feet (4o8 million cubic meters), a powerhouse and associated facilities. Space • will be provided in the underground powerhouse for four generating units which will bring the Calima. plant to its full capacity of 120,000 kilowatts; init,ially two 30,000-kilowatt units will be installed. The Yumbo extension should be in operation by mid-1962 and -the Calima plant by 1964. A substantial part of the new generating capacity to be provided by CHIDRAL will be needed to meet the increasing load in Cali and its immediate neighborhood. Cali, with a population approaching 500,ooq is the industrial and commercial center o:t" 'the Cauca Valley and is experiencing a rapid growth of population and indust:cy. Industrial activity at present covers the produc- tion of a wide range of products including cement, che.micals, drugs, canned food, textiles; beverages, tires, plywood, electric wire and fabricated steel products. Power requirements in the Cali area have grown in recent years at the rate of about l&/o a year and are expected to continue at this • rate for the next few years. About 6cF/o of total power sales are to industrial and commercial ~onsumers; this demand will continue to grow because of new • - 3- plants now being built, among them a paper mill and expansion of the cement mill. Several foreign firms a.re also either builc1i*1.g or considering the con- struction of manufacturing plants in the Cali area. outside Cali a.re a number of smaller towns and villages whose development will ibe advanc·~~d by the availability of a firm supply of power. CHIDRAL' s transmission sys}em will now be extended to serve an area of some 1,750 square miles {4, 500 sq. kms) of the Cauca Valley with a total population of some 1. 3 miJ.lion. Funds from the loan will be made available by the borrowers to a number o:t' the towns and villages now to be served to assist in financing the necessary expansion of their distribution facilities. The new transmission system, which will interconnect the CHIDRAL system with the power system serv- ing Caldas, will permit an interchange of power between the two systems. • The total cost of the works to be undertaken is estimated to be equiva- lent to $37 million. The Bank's loan will cover the foreign exchange require- ments of $25 million; most of the local currency requirements will be pro- vided by CHIDRAL and by the Cauca Valley Corporation; the towns and villages now being brought into the CHIDRAL system will pay part of the local cost of expanding their distribution facilities. All major pieces of equipment are being procured through international competition. The Bank's loan is for a term of 25 years and bears interest of 6% per annum including the 1% commission which is allocated to;> the Bank's Special Reserve. Amortization will begin in November 1963. The loan is guaranteed by the Government of Colombia. Including the loan made today, the World Bank has made 16 loans in Colombia totaling $173 millio~ -t·~~·: the development of electric power and agriculture and fo~ highway and. railwa:y construction. After having been approved by the Bank's Executive Directors, the loan documents were signed by His Excellency Dr. Carlos Sanz de Santamaria, J\~bassa- • dor of Colo.mbia in Washington, on behalf of the Republic of Colombia, by Dr • Bernardo Garces Cordoba, Executive Director, on behalf of corporacion Autonoma Regional del Cauca and of Central Hidroelectrica del Rio Anchicaya Limitada, and by Mr. J. Burlte Knapp, Vice President, on behalf of the World Bank.