Announcement of Project to Tap China's Hydropower Potential on January 8, 1987

FOR IMMEDIATE RELEASE 1WorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 87/33 Contact: P. B. Sison (202) 477-3573 PROJECT TO TAP CHINA'S HYDROPOWER POTENTIAL WASHINGTON, January 8 -- The People's Republic of China's hydropower potential is among the largest in the world, but only about 4 percent of it has been developed. A $140 million World Bank loan will help the country tap into this energy source. The loan for the Shuikou Hydroelectric Project will assist China in alleviating its acute shortage of energy and peaking capacity in the East China Grid (ECG), which now has a predominantly thermal capacity. It will also meet the growing energy requirements of Fujian Province. China is already the fifth largest producer of electricity in the world, 30 percent hydro, the rest thermal. The area to be served by the project includes the provinces of Fujian, Zhejiang, Jiangsu and Anhui, and Shanghai Municipality. The project will help to develop a major hydro site to serve primarily as a peaking station for ECG; to introduce modern technology for speedy construction of a large 101-meter (about 400 feet) high concrete gravity dam, power station, spillway, and navigation lock; and to provide training for management in the Fujian Provincial Electric Power Bureau (FPEPB), a state-owned enterprise. In addition, there is an environmental aspect to the project; it involves resettlement of 63,000 people in the reservoir area and includes a program to identify substitute land and a diversified agricultural package designed to help reconstruct their production systems and social communities. Indirect benefits of the project include navigational improvements on the Min River, and expansion of the capacity of the Waiyang-Fuzhou railway. To be completed in 1995, the total project cost is $1.087.8 billion, with much of the financing coming from local bank loans and foreign exchange loans. The World Bank loan is for 20 years, including five years of grace, with a variable interest rate, currently 7.92 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on the undisbursed balances. NOTE: Money figures are expressed in U.S. dollar equivalents.