Announcement of Twenty-Two Million US Dollars Electric Power Loan in Colombia on May 12, 1961

FOR tMMEDIATE R,ELE;A.~E WORLD 11 .. NK • INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT 1 81 8 H STREET. N. W., WASHINGTON 2 5 1 D. C. TELEPHONE: EXECUTIVE 3-6360 PRESS RELEASE NO. 684 SUBJECT: $22 million electric power May 12, 1961 loan in Colombia The World Bank today made a loan equivalent to $22 million for the expan- sion of hydroelectric installations supplying power to the metropolitan area of Medellin, an important manufacturing center in Colombia. The project provides for the addition of 138,000 kilowatts of new capacity to the system serving the area and the extension of transmission and distribution facilities. Four commercial banks are participating in the loan, without the World Bank's guarantee, for a total amount of $300,000 representing the first maturity which • falls due in March 1966. The participating banks are Continental Illinois National Bank and TrUst Company of Chicago, The First National City Bank of New York, The Marine Midland Trust Company of New York, and Grace National Bank of New York. The loan was made to the Empresas Publicas de Medellin, an autonomous public enterprise which provides power, telephone, water and sewage services in the metro- politan area of Medellin, the capital of the Department of .Antioquia.. Empresas will also sell power to another public enterprise, the Electrificadora. de .Antio- quia, for distribution to small towns and rural customers in the Department. In the past 20 yea.rs industry in the Medellin area ha.s expanded rapidly, particularly in textile and metal products manufacturi.ng, and. the population has increased threefold to the present number of 843,400. The demand for electric power has been growing at an average rate of lli annually., and that • rate is expected to continue for some years to come. of power have been in effect for the past several years. Restrictions on the use While Empresas tries  - 2 - • to confine rationing to household consumers in order to maintain the industrial growth of the community, industry is also affected by the power shortage. large textile plants adjacent to Medellin have had to install their own power Two plants a.nd most large factories are equipped with standby units to meet their requirements at times of power rationi11g. To bring power supply abreast of den1and, Empresas is car1•ying out a long- range expansion program. Today's loan will help to finance the second stage of the Guadalupe hydroelectric power project, a central pa.rt of the program. In May 1959 the Bank made a loan of $12 million to finance the first stage: works on the Tenche River to divert its flow into the Guadalupe River; the Troneras dam on the Guadalupe to create a storage reservoir; a power plant at the dam equi~ped initially with a 18,000-kilowatt generator; and a second power plant known as Guadalupe III, equipped with two 40,000-kilowatt generators. • The works now being financed include the installation of a second 18,000-kilowa.tt unit at the Troneras power plant, the installation of three additional 40,000- kilowatt units at Guadalupe III, the construction of the Miraflores dam on the Tenche River, to create a reservoir to supplement the Troneras reservoir. Addi- tional transmission, distribution and substation facilities will also be con- structed to accommodate the increased genera.ting capacity. Altogether the power projects will add 236,000 kilowatts of new capacity to Empresas' system which now operates plants with a combined capacity of 136,000 kilowatts, and should meet the needs of the area until 1968. Before that time, Empresas plans to undertake further expansion of its system in view of the expected increase in residential consumption, in demand from sales of power to Electrificadora, and the probability that industrial consumption will • expand when additional power is available •  - 3- • The first 40,000-kilowa.tt genera.ting unit at the Guadalupe III power plant is expected to be in operation in early 1962; the entire first stage of this project is expected to be completed early in 1963. The second unit at Troneras should be in operation in late 1963 and the three additional units at Guadalupe III in 1964 and 1965. Construction of the Miraflores dam will be finished in 1964. The Bank loan will cover the foreign exchange requirements of the second stage of the Guadalupe project, the total cost of which is estimated at $25.83 million, and certain supplementary costs of the first stage. Empresas will finance the local currency costs from its own resources. The Bank loan is for a term of 25 years and bears interest of 5-3/4% per annum including the 1% commission al.located to the Bank's Special Reserve. Amortization will begin in March 1966. The loan is guaranteed by the Government of Colombia. • After having been approved by the Bank's Executive Directors, the loan documents were signed by His Excellency Dr. Carlos Sanz de Santamaria, Ambassador of Colombia. in the United states, on behalf of the Government of Colombia, by Mr. Ignacio Mesa, Minister of the Colombian Embassy in Washington, on behalf of the Empresas Publicas de Medellin, and by Sir William Iliff, Vice President, on behalf of the world Bank • •