Colombia - First and Second San Carlos Hydro Power Project

Document of The World Bank FOR OMCLAL USE ONLY MICROFICHE COPY Report No. 10237-CO Type: (PCR) MAUPRIVEZ,/ X31709 / T9 069/ OEDD3 ,S,tN 10237 PROJECT COMPLETION REPORT COLOtBIA SAN CARLOS I AND II HYDRO POWER PROJECTS (LOANS 1582-CO AND 1725-CO) DECEMBER 27, 1991 Infrastructure and Energy Operations Division Department III Latin America and the Caribbean Regional Office This doeiment has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otberwise be disclosed without World Bank authorization.  ABBREVIATIONS ISA - Interconexi6n El6ctrica S.A. BEB - Empresa de Energia de Bogot& EMCALI - Empresas Piblicas de Cali EPH - Empresas Publicas de Medellin ICEL - Instituto oolombiano de Energia Elctrica Cvc - Corporaci6n Aut6noma Regional del Cauca CORELCA - Corporaci6n El6ctrica de la Costa Atlantica JNT - Junta Nacional de Tarifas FODEX - Fonda de Moneda Extranjera FEN - Financiera El6ctrica Nacional LRMC - Long-Run Marginal Cost CURRENCY EOUIVALENTS Currency Unit = Colombian Peso (ColS) Col$ 433.92 (12/31/89) = US$1 FISCAL YEAR = CALENDAR YEAR  FOR OFFICIAL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.S.A. Office of Dwectot-weta Opeations Evaluition December 31, 1991 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Colombia San Carlos I and II Hydro Power Projects (Loans 1582-CO and 1725-CO) Attached, for information, is a copy of a teport entitled "Project Completion Report on Colombia - San Carlos I and II Hydro Power Projects (Loans 1582-CO and 1725-CO)" prepared by the Latin America and the Caribbean Region Office, and Part II contributed by the Borrower. No audit of this project has been made by the Operations Evaluation Department at this time. '~~ Attachment This document hits a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  FOR OFFICIAL USE ONLY COLOMBIA PROJECT COMPLETION REPORT SAN CARLOS I AND II HYDRO POWER PROJECTS (Loans 1582-CO and 1725-CO) TABLE OF CONTENTS Page No. Preface i Evaluation Summary ii I. PROJECT REVIEW FROM BANK'S PERSPECTIVE 1. Project Identity 1 2. Background 1 3. Project Objectives and Description 2 4. Project Design and Organization 3 5. Project Implementation 4 6. Project Results 5 7. Project Sustainability 8 8. Borrower Performance 9 9. Bank Performance 10 10. Cofinancing Agencies 10 11. Consulting Services 11 12. Project Documentation and Data 11 13. Lessons Learned 11 II. PROJECT REVIEW FROM BORROWER'S PERSPECTI'E 1. Construction Schedule 12 2- EauiDment 13 3- Bank and ISA Performnance 13 III. STATISTICAL DATA 1. Related Bank Loans 15 2. Project Timetable 17 3. Loan Disbursements (Loan 1582-CO) 18 (Loan 1725-CO) 19 4. Allocation of Loan Proceeds 20 5. Planned and Actual Completion Dates of Components 21 6. Project Costs and Financing 24 7. Project Results A. Direct Benefits 25 B. Economic Impact 26 C. Financial Impact 28 D. Studies 29 8. Status of Loan Covenants 30 9. Use of Bank Resources A. Staff Input (Loan 1582-CO) 33 B. Mission Data (Loan 1582-CO) 34 B. Mission Data (Loan 1725-CO) 35 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  Page No. TABLE OF CONTENTS (CONT.) Annexes: 1 Interconexion Electrica S.A. (ISA) 36 Comparison of Forecast and Actual Income Statements (1978-1989) 2 Interconexion Electrica S.A. (ISA) 40 Balance of Accounts Receivable at year-end 3 Interconexion Electrica S.A. (ISA) 41 ISA's Shareholders/Annual Level of Performance 4 Interconexion Electrica S.A (ISA) Sector Installed Capacity (MW) 42  COLOMBIA SAN CARLOS I AND II HYDRO POWER PROJECTS (LOANS 1582-CO AND 1725-CO) PROJECT COMPLETION REPORT PREFACE This is the Project Completion Report (PCR) for the San Carlos I and II Hydro Power Projects in Colombia, for which Loans 1582-CO and 1725-CO in the amount of US$126.0 million and US$72.0 million were approved on May 5, 1978 and June 12, 1979, respectively. Loan 1582-CO was closed on June 30, 1986, two years behind schedule. It was fully disbursed and the last disbursement was on February 26, 1987. Loan 1725-CO was closed on June 30, 1988, three years behind schedule. It was fully disbursed, except for some US$26,083 canceled due to misprocurement. The last disbursement was on May 5, 1989. The PCR was prepared by the Infrastructure Division of the Latin America and the Caribbean Regional Office (Preface, Evaluation Summary, Parts I and III), and the Borrower (Part II). Preparation of this PCR is based, inter alia, on the Staff Appraisal Report; the Loan, Guarantee, and Project Agreements; supervision reports; correspondence between the Bank and the Borrower; and internal Bank memoranda.  - ii- COLOMBIA SAN CARLOS I AND II HYDRO POWER PROJECTS 1/ (LOANS 1582-CO AND 1725-CO) PROJECT COMPLETION REPORT EVALUATION SUMMARY Proiect Obiectives 1. The main project objectives were: (i) to enhance ISA's role in harnessing the large hydro potential to meet future power requirements; (ii) to coordinate through ISA sound overall sectoral developments; (iii) to enable the efficient and economic operation of the interconnected system; (iv) to encourage the financial viability of the various entities of the sector and to institute operational policies designed to increase efficiency and allow monitoring of performance throughout the sector (para. 3.01). Implementation Experience 2. San Carlos I, the first stage of the San Carlos Hydro Plant (units 1-4, 620 MW) was completed in February 1984, about eight months behind schedule. San Carlos II, the second stage (units 5-8, 620 MW), was completed in December 1987, three and a half years later than expected at appraisal (para. 5.02). Delay in completing San Carlos II was due to four circumstances2 First, severe financial constraints, especially during the 1981-82 period, forced ISA to concentrate its scarce financial resources on completing San Carlos I and delayed San Carlos II (para. 5.03). Second, the penstock passed through a roughly 35-meter fault that required a change in its design and the construction of an intermediate access tunnel. Third, the discharge tunnel collapsed twice. Fourth, geological problems in the portal of the discharge tunnel made it necessary to construct an additional access tunnel (para. 4.04). 3. The Calderas power station, a small hydro plant that was part of San Carlos II, was flooded by the river in mid-1990, which destroyed the generating equipment. At present, ISA is repairing the powerhouse and will replace the generating equipment (para. 4.04). Proiect Results 4. The projects achieved most of their objectives. The country's demand for power was met and the reliability of the power service improved when the project was commissioned (para. 6.11). Delays in project completion did not significantly affect the quality of service, because demand did not J The San Carlos I and II Hydro Power Projects are parts of the same hydro power plant, the San Carlos Hydro Power Plant. The construction of this plant was divided in two stages which were named San Carlos I and San Carlos II respectively.  - iii - grow as forecast at appraisal (para. 6.04). A high economic internal rate of return (20 percent) confirms the economic benefit of the projects compared with Colombia's other generating resources (Part III, Section 7). However, the projects had less effect than anticipated on overall sectoral performance and ISA's role as the prospective executing agency of large hydro developments (para. 6.12). This was due to lack of both mandate to monitor the sector utilities' performance and acceptance of ISA's role by its shareholders (para. 8.02). At the completion of the projects, ISA's financial position was weak, as was that of most of the other power utilities, who were unable to pay their overdue accounts to ISA (para. 6.12). Project Sustainability 5. It is expected that the facilities, as well as the institutional development, created by the projects will continue to produce benefits. ISA has proved able to maintain its facilities properly and the institution has developed substantial planning, technical, and managerial capabilities (para. 7.01). Issues Remaininq Outstanding 6. The current issues of the power sector in general, and ISA in particular, are financial and institutional. The sector is facing a severe financial crisis that is demanding large government contributions and impairing its expansion. Causes for this crisis have been an over-ambitious and inflexible investment program, the collapse of the program's financing plan because of lack of expected availability of resources from the international capital market as a result of the Latin American debt crisis, major devaluation of the Colombian peso without tariff compensation, high level of accounts receivable and high energy losses (para. 6.03). To remedy this situation, the government should define explicitly the objectives of the sector in the context of macroeconomic policies, strengthen the regulatory body, and delimit accountability of the sector utilities. 6. The role and structure of the sector's institutions should be re- examined realistically, since ISA's role has been controversial and not totally accepted by its shareholders (para. 6.12). Nevertheless, a centralized sectoral planning should be preserved, as much for long-term expansion as for the operation of the interconnected system. Lessons Learned 7. The most important lessons are the following (para. 13.01). (a) Covenants undertaken by companies not directly involved in the project have little chance of being met without specific authority, mechanism and political will to enforce them. In the present case, a strong regulatory body would have helped to establish and oversee the decisionmaking mechanism connecting planning, financing and project implementation. (b) An expansion plan shouid consider potential departures from macroeconomic scenarios and market projections to allow adjustments in the investment program to meet new conditions.  - iv - Expansion plans should include a margin of flexibility to allow for periodic revision. (c) A rainfall in the basin where the Calderas powerhouse is located, apparently greater than a hundred year storm, caused the river to flood the powerhouse with a large amount of boulders and destroyed its two generating units. The risk of this kind of events should be taken into account in the selection of the powerhouse site and type. (d) Project implementation should not underestimate the risk of delays caused by factors external to the project, such as legal processes for the acquisition of land, obtaining import licenses, and financial constraints of the project owners.  COLOMBIA SAN CARLOS I AND II HYDRO POWER PROJECTS (LOANS 1582-CO AND 1725-CO) PROJECT COMPLETION REPORT PART I. PROJECT REVIEW FROM BANK'S PERSPECTIVE 1. Project Identity - Project Name: San Carlos I and II Hydro Power Projects - Loan No.: Loans 1582-CO and 1725-CO - RVP Unit: Latin America and the Caribbean Region, Country Department III - Country: Colombia - Sector: Energy - Subsector: Power 2. Project Backaround 2.01 Public electricity services in Colombia are provided by eight major utilities. These include three municipal companies in the main cities: Empresa de Energia de Bogot& (EEB), Empresas Publicas de Medellin (EPM), and Empresas Pdblicas de Cali (EMCALI); three Government-owned companies: Instituto Colombiano de Energia Electrica (ICEL), Corporaci6n Aut6noma Regional del Cauca (CVC), and Corporaci6n Electrica de la Costa Atlantica (CORELCA); and two companies owned by the other utilities of the sector: Interconexi6n Electrica S.A. (ISA) and Central Hidroel6ctrica Betania (CHB). 2.02 ISA was established in 1967 to provide a rational framework for sector development by interconnecting the systems of its shareholders. The intention was to create a national grid capable of sustaining large hydroelectric developments and, by pooling the shareholders' financial resources through ISA, to allow for much larger and more economical projects than would have been feasible for each utility indepenldently. 2.03 At the time of the project appraisal (May 17, 1978), the government had set broad sector development objectives. These consisted of meeting demand within justifiable limits (including compensation for past under-investments), achieving an efficient sector expansion, using resources optimally, and achieving financial self-sufficiency. 2.04 Government strategy to reach the above objectives was to centralize in ISA the planning of sector expansion. It assigned to ISA the construction, ownership, and operation of all plants requiring joint efforts by its shareholders, and responsibility for the studies needed to improve sectoral operating and financial efficiency. 2.05 The projects were consistent with the sector objectives and government strategy. The energy requirements of the interconnected system were expected to grow at an average annual rate of about 10.6 percent. To satisfy these requirements, ISA defined a least-cost expansion plan for the period 1978 to 1985. This plan allowed for new generating power plants,  -2- including the project, with an aggregate installed capacity of 2,133 MW. To improve the sector's efficiency and finances, the project also included two studies: one on energy losses and another on the operation of the interconnected system. 3. Proiect Obiectives and De. k'etion 3.01 The specific objeL.a.ves of the San Carlos I and II Hydro Power Projects were: (i) to enhance ISA's role in harnessing the large hydro potential to meet future power requirements; (ii) to coordinate through ISA sound overall sectoral development; (iii) to facilitate the interconnected system to operate efficiently and economically; this included the CORELCA system where, after completion of the 500-kV line interconnection project, part of the expensive thermal generation was to be replaced by hvdro generation available in the Central System; (iv) to encourage the financial viability of the various entities in the sector, and to institute operational policies designed to increase efficiency and allow the monitoring of performance on a common basis, throughout the sector. 3.02 The San Carlos I and II Hydro Power Projects consisted of the following: San Carlos I (a) An earth dam 75 m high; two concrete intake towers connected to two vertical shafts 150 m deep? a power tunnel, 4,500 m long; a surge tank; an inclined pressure tunnel bifurcating into two penstocks; two caverns, one for ten turbine-generators and one fo- transformers; an access tunnel to the powerhouse; and a discharge tunnel, 1,570 m long; (b) four Pelton turbines; four vertical shaft generators rated 183 MVA; two 3-phase banks of single-phase transformers; a 230 kV switchyard; and a control building for operation of the power station and the substation; (c) a 244-km double-circuit 230-kV transmission line, and corresponding substations; and (d) a study of losses in the systems of ISA and its shareholders. San Carlos II (a) Four Pelton turbines; four vertical shaft generators rated 183 MVA; two 3-phase banks of single-phase transformers; electrical equipment; and expansion of the switchyard; (b) 290 km of double-circuit 230-kV transmission lines; (c) a study for operating the interconnected system at least cost; a training program for dispatch personnel; and a study of ISA's manpower requirements and execution of a program to train professional staff; and  (d) tho Calderas hydro power plant, a small plant cumposed of a concrete gravity-type dam 25 m high; pressure tunnels; a surface power station; two turbine-generators of 9.2 MW each; and ancillary equipment including transformers. 4. Project Desian and Organization 4.01 The San Carlos Hydro Power Projects were part of the expansion program prepared by ISA in June 1973 anI based on a comparison made between thermal and a limited number of hydroelectric options. At the time of the appraisal, not many options had been thoroughly studied, and a study on a hydro survey and long-term expansion plan with assistance from the Federal Republic of Germany was still under way. 4.02 The feasibility studies and conceptual design of the San Carlos Hydro Development were carried out by EPM with the assistance of a local consulting company. Final designs for the projects were carried out by ISA with the assistance of the same local consultant. Final designs were available in time for the appraisal. The Bank engaged an independent consultant to review the project design and participate in the appraisal. This consultant agreed in substance with the project design. 4.03 On the basis of the studies on the projects, favorable geological conditions at San Carlos Power Plant were expected. It was foreseen that the dam, the intakes and the greater part of the pressure tunnels (80-85 percent) would be located on and in sound igneous rocks. The remainder of the pressure tunnels, the power house, and the discharge tunnels would be located in metamorphic rock requiring some supports; only a small portion (5-8 percent) of tunnelling would be done across fault zones. Excavation of the caverns was not expected to present any major problems; however, to minimize the risk of unforeseen situations caused by the huge volume of the excavation work and the width of the galleries, it was proposed that the construction of exploratory tunnels along the caverns would better determine the rock conditions and define the orientation of the caverns. The bidding documents allowed for this contingency and indicated the limits for location of the powerhouse. In contrast with the above, only limited studies on the Calderas small power plant were available at the time of the appraisal. 4.04 In general, the geological conditions found at the San Carlos Power Plant during project construction were consistent with those expected at the design stage, except in the penstock and discharge tunnel, where the conditions were worse than expected. The penstock passed through a fault of about 35 meters in length, which required a change of the penstock design and the construction of an intermediate access tunnel. The diacharge tunnel collapsed twice and an additional access tunnel had to be opened. Conditions found at Calderas power plant were very much worse than expected at appraisal and substantial changes were introduced in the design of this plant during project implementation. After a few months of operation, in September 1990, its power station suffered substantive damage caused by an exceptional flooding of the river. A heavy rainfall in the basin where the Calderas powerhouse is located caused the formation of numerous landslides on the surrounding hillsides, overflow of the river and inundation of the powerhouse. The rainfall recorded was apparently greater than a hundred year storm. The river carried a large amount oi material including boulders that flooded the  -4- powerhouse and caused damage to the two generating units and other components. At present, ISA is clearing the site to repair the powerhouse, new equipment will be ordered, and protective measures will be taken. Repairs of the power house, and manufacturing and installing equipment are expected to take some two and a half years. 4.05 ISA's assessed the environmental effect of the project at the time of the appraisal, and no major impact was expected. The project area is extremely hilly, with poor soiis ard high rainfall, making the entire area unsuitable for farming or stock raising. One small village of about seventy families was to be displaced by the project, and an adequate program for acquiring all properties and evacuating residents was submitted to the Bank before appraisal. Completion of evacuation was a condition for loan effectiveness. 4.06 ISA was responsible for the construction of the projects. ISA established a project unit to manage the project and coordinate related activities. This unit had the assistance of the same local consultants that had carried out the project studies. They assisted in the preparation of construction designs and bidding documents, bid evaluation, procurement of equipment and supervision of the project construction. 5. Proiect Implementation 5.01 Loan Effectiveness and Proiect Start-up: Loan 1582-CO was approved on May 30, 1978, signed on July 14, 1978, and effective on April 5, 1979. Loan 1725-CO was approved June 12, 1979, signed on November 30, 1979, and effective on June 19, 1981. The long time elapsed between loan signature and loan effectiveness was due, in the case of Loan 1582-CO. to legal difficulties to have the Shareholders' Agreement ratified by the government; and in the case of Loan 1725-CO, to delays in resolving the large size of accumulated arrears in payments to ISA of its shareholders and the Government. 5.02 Implementation Schedule: The San Carlos I Project was completed in February 1984, eight months later than expected at the appraisal. The San Carlos II Project was originally scheduled to be completed by June 30, 1984, but it was commissioned only in December 1987. The Calderas power plant was commissioned in April 1988. 5.03 Financial constraints on ISA and the civil work contractor were the main cause of delay. ISA's shareholders did not pay in their contributions, which were higher than initially expected, on time. At the same time, the civil works contractor was unable to get temporary financing to bridge the delays in ISA's payments. Other delays were caused by (i) adverse geological conditions found in the construction of the penstock and the discharge tunnel (para. 4.04); and (ii) lengthy procedures for acquisition of lands and rights of ways.  -5- 5.04 Procurement: In general, procurement actions proceeded satisfactorily and in accordance with Bank guidelines, except in the case of a minor contract. A Bank procurement specialist visited ISA at the beginning of project implementation to assist it in planning the procurement process. A contract for US$26,083.41 was declared misprocurement by the Bank, and the corresponding amount was canceled. The generators at the Calderas powerhouse failed during commissioning. The supplier remedied the generator defects, but its response to do it was slow due to intricate administrative procedures within the supplier's country. 5.05 Proiect Costs: At appraisal, the estimated cost of the San Carlos I Hydroelectric Project was US$367.0 million excluding interest during construction (IDC). The final cost of this project amounted tp US$443.7 million. This final cost includes the cost of the underground works (US$101.7 million) of the second stage of San Carlos, whose construction was added to San Carlos I by amendment of the Loan Agreement to use the savings obtained in the implementation of San Carlos I. These savings arose from lower than expected unit prices quoted by the civil works contractor. 5.06 Exclusive of the underground works mentioned above, the appraisal estimate of the cost of San Carlos II was US$156.1 million, while the final cost was US$166.3 million (excluding IDC). The difference was due to: (i) the higher engineering and supervision costs of the longer project implementation period; and (ii) higher than estimated costs of civil works for the Calderas power plant, due to the substantial modifications to its design. The above cost does not include the cost of repairing the Calderas power station. 5.07 Disbursements: The expected and actual disbursements of Loans 1582-CO and 1725-CO are given in Section 3 of Part III. The disbursements were delayed due to the delays in implementation of the projects. The original closing date for Loan 1582-CO was June 30, 1984, but it was closed on June 30, 1986 after two one-year extensions. The original closing date for Loan 1725-CO was June 30, 1985, but it was closed only on June 30, 1988 after three one-year extensions. Disbursements against commitments were made until May 5, 1989. 5.08 Loan Allocation: The original and revised allocations of the proceeds of both loans are shown in Section 4 of Part III. 6. Proiect Results 6.01 Proiect Obiectives: The projects achieved most of their objectives. They succeeded in (i) meeting the country's power demand through an efficient expansion of generating capacity; (ii) enhancing ISA's planning and technical capabilities, and achieving substantive institutional development of ISA (para. 8.01); (iii) allowing a more efficient and economic operation of the interconnected system through ISA (para. 6.11); (iv) achieving some sectoral developments, particularly the carrying out of studies applicable to the whole sector; these included the study on tariffs based on marginal costing, and the one on energy losses. However, the projects were not effective in achieving the financial viability of the sector's utilities or in improving operational policies. This was attributed in part to the fact that ISA's shareholders, which are the major utilities of the country, did not have the will to impose themselves financial policies and monitoring.  -6 - 6.02 Physical Results: The physical targets of the projects were substantially achieved, but in the case of San Carlos II, the completion of the project was achieved some three years later than planned. The destruction of the Calderas power station that occurred in mid-1990 (para. 4.04) will impede its operation until the end of 1993, when commissioning of new equipment is expected. 6.03. Financial Performance. Annex 1 compares the appraisal forecast and actual income statements, sources and applications of funds, balance sheets, and performance indicators for the period 1978 to 1989. ISA's performance was adequate during the period 1978-82; however, from 1983 the sector, and consequently ISA, experienced financial constraints due to an over-ambitious and inflexible investment program, the collapse of the program's financing plan because of lack of expected availability of resources from the international capital market as a result of the Latin American debt crisis, major devaluation of the Colombian peso without tariff compensation, high level of accounts receivable and high level of energy losses. The financial rate of return on revaluated assets was generally close to the covenanted figure during the period (para. 6.07), but the debt-equity ratio, debt-service coverage and self-financing ratio that were generally satisfactory before 1983, deteriorated significantly after this year. 6.04 ISA's internal cash generation was lower than expected and it had difficulties in covering its debt service, even though the average tariff increased substantially in current prices during the period. ISA's income was affected by energy sales lower than forecast at the appraisal and an average tariff between 50 percent and 60 percent of the long-run marginal cost (LRMC) at interconnection level. Sales grew much less than they had been forecast, as a result of the slowdown in the economy. In the 1980s, energy demand grew at a rate of 6 percent per year compared with rates of 10 percent per year during 1970s. If energy purchases are deducted from sales shown in the income statements, sales of ISA's generated energy were only 70 percent of those expected in 1985, the last year forecast in the appraisal (7,445 GWh actual compared with 10,502 GWh forecasted). 6.05 The average tariff for long-term sales, in current prices, increased from Col$0.52 per kWh in 1978 to Col$8.5 in 1989. Expressed in end- 1989 prices, it raised from Col$7.35 to Col$9.66 that represents a 31 percent increase. Average revenues, including long and short-term sales increased from Col$0.49 in 1978 to Col$6.48 in 1989. Expressed in end-1989 prices it raised from Col$6.88 to Col$7.36 that represents an increase of 7 percent. As ISA operates the interconnected system, all sales and purchases within the power sector are reflected in its statements, and the average income does not represent the tariff of ISA's energy. Until 1988, ISA's tariffs were adopted by its board of directors; now, tariffs are defined by Junta Nacional de Tarifas (JNT). In October 1990, JNT issued Resolution 089, which defines goals for bulk tariffs based on LRMC, and Resolution 091, which adopted a one- time increase of 16 percent for energy prices and an 11 percent increase for the demand charge. ISA's long-term average tariff in April 1991 was Col$16.04/kWh (US$0.0265/kWh), that is about 70 percent of the LRMC at the interconnected level. It is expected that for 1994 tariffs will be around 89 percent of LRMC. 6.06 The level of accounts receivable on electricity sales as a percentage of annual sales revenues increased from 42 percent in 1978 to 91.4  -7- percent in 1989, compared with 17 percent established as a performance indicator. The level of this ratio was extremely high during all the years covered by this report (1978-89), and was one of the main reasons for ISA's financial difficulties. Annex 2 shows accounts receivable by shareholder. Expressed in US$ million, ISA's claims against its shareholders were: 1980, $77; 1984, $227; 1987, $199; and 1989, $352. Out of the total accounts receivable, 70 percent represented arrears, which were concentrated in EEB, CVC, CORELCA and ICEL, companies that also experienced financial difficulties during the period. Partly due to this situation, ISA had to negotiate loans with the Fondo de Moneda Extranjera (FODEX) and with the government to cover the debt service. The Bank, during the supervision of the project, pressed ISA and the government to solve the problem of overdue accounts receivable, but without success. This problem was also addressed under the Power Se;tor Adjustment Loan (Loan 2889-CO), where it was agreed that all debts from ISA's shareholders should have been settled by end-1988, but the results were not satisfactory. 6.07 The rate of return on revalued assets (ROA) was somewhat lower than covenanted. Thus, even though the ROA was technically close to the covenahted value, ISA in much of this period barely covered or was unable to cover its debt service and finance an adequate portion of its construction program with internally generated funds. It appears that the ROA was not an adequate revenue covenant and also that rates were overstated, because the method used to revaluate assets did not fully reflect their actual value. As Colombia law and accounting practice allow only partial revaluation, the full revaluation process was done on a proforma basis only to determine the ROA indicator for the purpose of the Bank loans. Power sector utilities use the Consumer Price Index (CPI) to calculate asset revaluation. The Bank staff believed that this index did not reflect fully the costs of the sector, and under Loan 2401-CO to FEN, it was agreed with the Colombian government that an appropriate price index for the electricity sector would be prepared. This index was prepared and discussed with the Bank, but it has not yet been used to calculate asset revaluation. 6.08 The covenanted figure of 9 percent ROA reflects ISA's bylaws at the time of appraisal, which required the utility's revenues to cover only its debt service and operating costs. Therefore, a negligible contribution from internal cash generation to the construction program was expected. The construction program was to be financed mainly with the shareholders' contributions. Therefore, the self-financing performance indicator (33 percent average during the period) was defined to include the contributions by the nongovernment shareholders. As the power utilities also suffered financial difficulties during the period, their equity contributions were lower than were needed by ISA to maintain a sound debt level. 6.09 ISA's debt-equity ratio and debt service coverage ratio, which were generally satisfactory before 1983, deteriorated significantly from this year. ISA's high indebtedness level and costly debt service resulted not only from the reduced capitalization from shareholders and internal cash generation, but also from peso's devaluation against the dollar and the dollar's depreciation against other currencies. A higher Colom.bian peso devaluation against the U.S. dollar than had been expected started in 1983 and extended through the mid-1980s. Although this devaluation corrected for increases in the real value of the peso during the 1970s and early 1980s, the power utilities were not prepared to handle the cost of debt servicing that  8 - come with it. Government did not take any steps to compensate through tariff adjustment or otherwise to smooth out this impact and the utilities, unable to cover their debt service, became debtors of FODEX, who honored the government guarantee. 6.10 Annex 3 presents the appraisal and actual annual level of performance for the period 1978-89 for ISA's shareholders: EEB, EPM, CVC and CORELCA. The performance indicators were generally below those established at appraisal. The power utilities were affected by: (i) reduced sales, as a result of the economic slowdown during this period and their substantial increase in non-technical energy losses; (ii) tariffs that did not reflect the economic cost of service; and (iii) the high devaluation of the Colombian peso and depreciation of the U.S. dollar against other currencies, without a corresponding tariff adjustment. EEB, committed to a large expansion program and unable to reduce its energy losses, ran into financial difficulties to cover its debt service and accumulated arrears in its payments to ISA. EPM was the utility least affected by this situation, but even its indicators fell short of the expectations held at appraisal. CVC and CORELCA were the worst affected and their performance indicators show that, after 1983, they were unable to cover their debt service. 6.11 Impact of Proiects: The projects made a major impact by meeting the country's power needs and improving the quality of service. Generation by the project represents over 15 percent of total current demand of the country. The cost of the project energy is very economical compared with the LRMC. Additionally, the projects contributed to a reduction in the operating and maintenance cost of the system, by reducing the use of fuel, and improved the reliability of service. The projects also have made a major institutional impact on ISA. The experience obtained in the construction of the San Carlos facilities and the planning and management tools developed during project implementation strengthened substantially the planning and technical capabilities of ISA. 6.12 On the other hand, the impact on the sector's overall performance and ISA's anticipated role in developing future larger hydro power projects was only limited. This was because ISA's role was not only unclear and controversial from the beginning, but subject to numerous tacit changes during the project. In addition, the lack of a strong regulatory body and more specific and consistent government policies on the sector impaired efforts to achieve financial viability of the sector's utilities. At the completion of the project, ISA's financial position was vulnerable, and all the other power utilities, with the exception of EPM, were in a very weak financial position and unable to pay their overdue accounts to ISA. 7. Proiect Sustainabilitv 7.01 San Carlos is the largest power plant in the country and its energy production is reliable. Its installed capacity, 1240 MW, represents about 14 percent of the total installed capacity, and its annual generation is consistent with what was expected during its studies. The projects include facilities for the installation of two-155 MW additional units. The facilities built under the projects will continue to produce benefits for both ISA and the country for a long time. They are safe, lasting, productive, and demand low operation costs. Those facilities were designed and built in  -9- accordance with international standards and with the assistance of well- qualified consultants. Their lives will probably extend further than projected. Since the cost of the energy generated by San Carlos is low and will remain almost constant through its life, it will help to keep down the average cost of electricity in the country. The problem presented at the Calderas powerhouse, which is a very small part of the projects, is being addreased satisfactorily and protective measures will be taken to prevent the powerhouse from any further river flooding (para. 4.04). 7.02 As to the institutional issues, the government is now (in 1991) working on the establishment of a regulatory framework for the power sector and reexamining the role of ISA and the other institutions in the sector, as well as options for its financial restructuring. 8. Borrower Performance 8.01 As noted, ISA suffered severe financial constraints after 1983 (para. 6.03). At the same time, its institutional development was substantial. The projects were implemented effectively and efficiently, and their performance indicators, with the exception of the accounts receivable indicator, were very close to the values expected at the time of the appraisal. ISA's installed capacity grew from 1,000 MW to 2,693 MW (about 31 percent of the installed capacity across the country), and ISA's internal structure was significantly strengthened. In 1977, administrative, financial, and operations departments were created, as well as an internal audit unit. In 1979, the Planning Unit was created, which has developed strong technical capabilities and played a decisive role in the development of ISA and the sector as a whole. In 1983, the Dispatch Center was commissioned, and since then, has been decisive in coordinating the systems operated by ISA and the other utilities. Finally, the recently created Environmental Unit has taken a clear leadership in its field within the sector; it has developed a methodology to include the environmental factor in the planning process, prepared guidelines for resettlement and environment protection, and carried out significant studies in these fields for future hydro projects. Implementation of the project's physical components was carried out efficiently and the costs kept within the appraisal estimate. All this is attributable to ISA's effectiveness. Delays in project implementation and the deterioration of the accounts receivable indicator cannot be blamed on ISA. Annex 1, page 4, contains the comparison between forecast and actual performance indicators of ISA. 8.02 However, the severe financial constraints experienced by ISA during project implementation revealed weakness in the power's institutional framework and the lack of adequate mandate for ISA to meet its anticipated dominant role in the sector. These deficiencies were demonstrated mainly in the following ways: (a) ISA lacked the mandate to monitor the implementation of the expansion plan by other utilities, and assess the need for corrective measures in a timely manner.  - 10 - (b) The system for approving expansion plans was painful and rigid as much for ISA's board as for the government. This made the updating of the plans and adoption of corrective measures difficult. 9. Bank Performance 9.01 Bank participation in the projects was generally satisfactory. During preparation of San Carlos I, the Bank was persistent in discussing conditions not only on the investment programs and the finance of ISA and of its shareholders but mainly on institutional issues. The reach of these conditions explains to an extent the long time it took to agree on them. They included (i) granting to CORELCA membership as a shareholder in ISA; (ii) changing of ISA's bylaws to indicate that (a) all major future expansion of national interest would be owned and operated by ISA; (b) ISA would charge tariffs to cover operating costs, depreciation and achieve 9.0 percent anual return on revalued assets; (iii) the cost of fuel to CORELCA, by the time of completion of the 500 kV line, would be equal to or greater than the delivered cost of energy purchased by CORELCA from ISA; (iv) shareholders of ISA to raise tariffs so to achieve anual return of 9.0 percent each on revalued assets; (v) implementation of Government plans to bring the price of fuels (petroleum and natural gas) in line with the cost of new domestic oil and world prices; (vi) measures to avoid the problem encountered under the Bank loan to ISA for the Chivor Project, namely, that several of the shareholders did not honor their financial obligations to ISA on time; (vii) preparation of a power sector development master plan. 9.02 The Bank exercised a close supervision of the projects. It spent about 125 staff-weeks in supervision, this is about 14 staff-weeks per year. During project implementation, the Bank supported ISA continuously with its shareholders and the government, and supported programs to strengthen ISA's planning and management capabilities. The Bank, through the supervision of its loans to EEB and EPM, kept alive their commitments to contribute and pay ISA for their electricity. Unfortunately, due to their financial difficulties, the utilities' accounts payable to ISA increased substantially (para. 6.06). The Bank showed flexibility by approving the use of savings from Loan 1582-CO to partially finance the civil works of San Carlos II and some local costs. To help to meet ISA's financial needs, the Bank supported the creation of FEN and approved Loan 2401-CO to it. To strengthen ISA's planning and managerial capabilities, the Bank pushed for and acted as executing agency for two technical assistance projects financed by UNDP. One was the Planning System for Power Expansion, and the other was the Design of a Planning and Monitoring System for the Execution of Hydroelectric Projects. 10. Cofinancina Aaencies 10.01 In addition to the Bank loans, the projects received financing from the International Development Bank, Eximbank from Japan, Orion Royal Bank and Bank of Tokyo. Relation and interaction between the Bank and the cofinancing agencies during project implementation were very little and no special effect was obtained from joint actions.  - 11 - 11. Consulting Services 11.01 The studies and design of the San Carlos hydro plant, and the inspection of its construction were performed satisfactorily by a local. consulting firm, assisted by external independent consultants. The technical assistance to develop a project management system, partially financed under the project, was provided satisfactorily by a foreign consulting firm. The other studies included in the project were performed, also satisfactorily, by local consulting firms. 12. Proiect Documentation and Data 12.01 The Loan and Shareholders' Agreements were adequate, in general, to the Project objectives, and the Staff Appraisal Report (SAR) provided a useful framework to both the Bank and ISA to review project implementation. However, the SAR did not assess ICEL's financial viability, one of ISA's major shareholders, because at the time of the appraisal there were not suitable information available for the preparation of financial projections. Consequently, the Shareholders' Agreement did not include specific covenants related to ICEL's performance. ISA prepared a project completion report and provided additional information requested. 13. Lessons Learned 13.01 The most important lesaons are the following. (a) Covenants undertaken by companies not directly involved in the project have little chance of being met without specific authority, mechanism and political wili to enforce them. In the present case, a strong regulatory body would have helped to establish and oversee the decisionmaking mechanism connecting planning, financing and project implementation. (b) An expansion plan should consider potential departures from macroeconomic scenarios and market projections to allow adjustments in the investment program to meet new conditions. Expansion plans should include a margin of flexibility to allow for periodic revisions. (c) A rainfall in the basin where the Calderas powerhouse is located, apparently greater than a hundred year storm, caused the river to flood the powerhouse with a large amount of boulders and destroyed its two generating units. The risk of this kind of events should be taken into account in the selection of the powerhouse site and type. (d) Project implementation should not underestimate the risk of delays caused by factors external to the project, such as legal processes for the acquisition of land, obtaining import licenses, and financial constraints of the project owners.  - 12 - COLOMBIA SAN CARLOS HYDROELECTRIC PROJECT (Loans 1582-CO and 1725-CO) PROJECT COMPLETION REPORT PART II: PROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE The Borrower's main comments are summarized below. Construction Schedule - The time periods initially defined for civil work construction proved to be very optimistic. A less-optimistic construction schedule should be adopted at the planning stage. - There were interferences between the erection of electromechanical equipment and the civil works. These interferences showed the necessity of having an integrated schedule available at all times. For the schedule to work, it is necessary to have a tight schedule monitoring and coordination between all the companies involved. Procurement - The utilization of standard outlines for bidding documents and contracts made the evaluation of bids and award of contracts easier. As a result, there was an important time saving in procurement activities. Civil Works - The development of the main civil works contracts had serious economic problems during the execution stage due mainly to: (i) low financial capacity of contractor, aggravated by the fact that the contractor was carrying out simultaneously the civil works corresponding to four (4) different contracts (Punchina dam, San Carlos I and II underground civil works, and Jaguas project); and (ii) payment delays by ISA. The contractor's financial capabilities should be highly analyzed when selecting and awarding this type of contracts. - Delays in the acquisition of land and right of ways for the project contributed to the delay of civil works. ISA has no control over the time period required to carry out the legal processes involved on this matter. - The fact that both supervisory and design activities were carried out by the same consulting company was positive. It facilitated communications and preparation of complementary studies, detail designs and modifications during the construction.  - 13 - The material excavated at the spillway that was useful for the dam embankment was 914,000 m3 less than expected due to a large quantity of rock-balls that restricted its utilization. Deeper drill holes during the earlier stages would have provided a better estimate. The design of the penstock coating surface was modified, replacing the hydraulic concrete for shotcrete. This meant a project benefit because it avoided important delays on operation starting date. Also, this change meant less construction costs. The industrial safety standards included on the bidding documents were unsatisfactory. Eauipment The Colombian legislation includes regulations to protect national industry against imported equipment. The duration of the procedures and requirements to import equipment are difficult to predict making it hard to schedule them in advance. To improve scheduling of these activities, a closer links with the governmental departments involved should be established. There were two problems affecting the storage of electromechanical equipment: (i) poor storage conditions and (ii) lack of enough storage areas. As a result, it was necessary to replace and repair some damaged equipment. There is a need for a carefully written plan that would outline the special equipment storage requirements on the area of the project. ISA had to negotiate advance payments with its contractors in order to get the Bank loans disbursed before the loan closing dates. Bank and ISA Performance The Bank and ISA performance met, in general, previous expectations. However, some delays in the disbursement of the loan proceeds occurred due to changes on Bank organization and its payment procedures, and ISA's financial constraints contributed to delays of the civil works. Recommendations A continuous flow of local currency to the project is needed in order to minimize the project's financial problems. This can be obtained through earlier arrangements with FEN, timely payments of the shareholders to ISA, and a higher participation of the Bank and IDB. Financing of loan financial charges would minimize the pressure of payments due to contractors and to the Bank, and avoid delays on the project schedule due to delays in payments to contractors.  - 14 - The financial conditions of Bank loans, especially duration of grace periods and closing dates, should be adjusted in accordance with the project construction period. It would be convenient that the Bank and the borrower monitor jointly the status of payments to contractors during project implenmentation to identify the cases and causes for payment delays. The Bank should consider to adjust the contract's currency proportion if the macroeconomic conditions changes.  - 15 - PART III - STATIST1CAL DATA I. felated Bank Loans Pago 1 of 2 Amount Disbur_ec (In US$ Year of So- as of Number and Titl million) Aooroval Borrower 02/28/91 P.urpose 1. 38-CO: 3.53 1950 CVCM 100% Anchicaya units i and 2 Achicaya Hydro- CHIORAL (2 x 12) MW hydro) electric 2.39-CO: 2.6 1950 CHEC 100% The Insula units I and 2 La Ineula Hydro- (2 x 10 MW hydro) electric 3. 54-CO: 2.4 1951 LABRIJA 100% Palmas units 1 and 2 Labrija Hydro- (2 x 4.4 MW hydro) electric 4. 113-CO: 4.5 1955 CHIORAL 100% Anchicaya unit 3(20 MW Anchicaya Yumbo hydra) and Yumbo unit I Power (10 MW thermal) 5. 215-CO: 2.6 1958 CHIDRAL 100% Yumba unit 2 (10 MW Yumbo Extension thermal) 6. 217-CO: 4.6 1959 CHEC 100% La Esmoraida units 1 and 2 La Esmelaida (2 x 13.3 MW hydro) 7.225-CO: 12 1959 EPM 100% Guadalupe units I and 2 Guadalupe (2 x 45 MW hydra) and Trana- ras unit 1 (18 MW hydro) S. 246 CO: 17.6 1900 EEEB 100% Laguneta unit 4 (16 MW Bogota Power hydro) and Zlpaquira unit 1 (33 MW termal) 9. 255-CO: 25 196o CVC/ 100% Yumbo unit 3 (33 MW Yumbo Ill Callma I CHIORAL thermal and Calima units Power I and 2 (2 x 30 MW hydro) 10. 282-CO: 22 1961 EPM 100% Tronoras unit 2 (18 MW Second Guadalupe hydro) and Guadalupe units 3. 4 and 5 (3x45 MW hydro) 11. 313-00: s0 1962 EElS 100% Zlpaquira unit 2 (37.5 MW Second Expansion hydra) and Coleglo units 1.2 and 3 (3 x 50 MW hydro) 12. 339-CO: 6.8 1963 CVC/ 100% Calima units 3 and 4 Power Expanslon CHIORAL (2 x 30 MW hydra) 13. 347-0C: 5 1963 ELECTRIBOL 100% Cosplque units 2 and 3 Coapique Power (2 x 12.5 MW thermal 14.360g0 45 1964 EPM 100% Quatape units 1.2.3 and 4 Nate (4 x 70 MW hydro) 15. 5370CO: 16 1966 s EES 100% El Cologlo units 4. 5 and 6 Third Expanslon (3 x 5' MW hydra) and Canoes (1 x 50 MW hydra) 1. 575-0C: 16 1966 ISA tO% Central System Intercon- Power Intercon- nectlon (230 kV transmis- nection laon line and substaton)  - 16 - Page 2 012 Amount Olsbureed (In US$ Year of Eoh as of Number and Ttlet mililon) Aporoval Borrower 02128/91 PUrDOCO 17. 6e1 COC 52.3 1970 ISA t00% Chivorl(4x1i5hydro) Chivor Hydro- eIsctric 18. 874-CO: 88 1973 EPM 100% Ouatape II units 1,2,3 and 4 Guatpe it (4 x 70 MW hydro) Hydroelectdic 19. 1582-CO: 126 1976 ISA 100I% San Carlos I (4 x 155 MW San Cadoe I hydro) Hydro Power 20. 1583-CO 50 1978 GOVERN- %00% 500 kV Interconnectlon 800 kV Intercon- MENT Central System/ Atlantic nection System 21. 1628-CO: 84 1978 EEEB 100% Mesitas Hydra (El Paralso Mesitas Hydro- 3 x o MW: La Cu ac 3 x 100 MW electric Power pumping 3 x 10 MHP: Sequile dam strengthening) 22. 1725-CO: 72 1979 ISA 100% San Carlos It San Carioc II (4 x 155 MW hydra) Hydro Power 23. 1807-CO: 87 1980 EEE8 100% Bogota dibtribution Bogota Power Distribution 24. 188e-CO: 125 1980 EPM 100% Guadalupe IV (3 x 71 MW Guadalupe IV hydro) Hydro Power 25 1953-CO: 85 1981 EPM 74% Playas (3 x 67 MW hydra) Playas Hydro Power 26. 1999-CO: 36 1682 CORELCA 84% Atlantic coast village Village olctrMfication Electrification 27. 2008-CO: 309 1982 EEE8 100% GuavIo (1 x 200 MW hydro) Guavia Hydra Power 28. 2401-CO: 170 1984 FEN 100% Power developmentfinance Powor Develop. ment Finance 28.2 1984 FEN 100% Power development finance (Cofinancing) 29. 2449-CO: 164.5 1984 EPM 51% Rlo Grande Hydro Rio Grando (3 x 100 MW hydro) Multipurpose 30. 2834-CO: 171 1986 EEE8 44% Bogota OIstribution If Bogota DIstrtbu- tion 11 31. 2889-CO: 300 1 98e GOVERN- 75% Power Sector Adjustment Power Sector MENT Adjustment  - 17 - 2 Proiget Timetabl, D &te Date Item Planned Actual San Carlos I (Loan 1582-CQ} Identitication 08/76 Preparatlon 01/77 Appralsal MIssion 04/77 Post-Appraisal Mission 09/77 Loan Nogotiatlons 04/04/78 Board Approval 05/30/78 Loan Signature 07/14/78 Loan Effectiveness 09/78 04/05/79 Project CompletIon 06/30/83 02/84 Loan Closing 06/30/84 06/30/86 Son Carlos IL (Loan 1725-CO) Identification 05/78 Preparation 10/78 Appralsal Mission 11/78 Post-Appraisal Mission 01/79 Loan Negotiatlons 06/12/79 Board Approval 06/12/79 Loan Signature 11/30/79 Loan Effectiveness 10/79 06/19/81 Project Completion 06/84 12/87 Loan Closing 06/85 06/30/88  - 18 - 3. Loan Disbursements Cumulative Estimated and Actual Disbursements (Loan 1582-CO) (In million of US$) Bank Fiscal Year Estimated Actual Actual as % of and Semester Cumulative Cumulative Estimated 1978-1979 December31, 1978 11.8 0.0 0% June 30.1979 23.4 7.0 30% 1979-1980 December31, 1979 35.0 12.6 36% June 30, 1980 54.8 18.5 34% 1980-1981 December31, 1980 74.6 24.9 33% June 30, 1981 85.4 33.6 39% 1981 -1982 D)ecember 31, 1981 96.7 46.2 48% June 30, 1982 106.5 58.2 55% 1982-1983 December31, 1982 115.5 74.4 64% June 30, 1983 123.9 90.4 73% 1983-1984 December31, 1983 126.0 105.3 84% June30,1984 126.0 107.6 85% 1984-1985 December 31, 1984 126.0 120.2 95% June30,1985 126.0 121.1 96% 1985-1986 December 31, 1985 126.0 123.5 98% June30,1986 126.0 125.3 99% 1988-1987 December 31, 1986 126.0 125.7 100% June 30,1987 126.0 126.0 100% 1987-1988 December 31, 1987 126.0 126.0 100% Date of Final Disbursement 2/26/87  - 19 - 3. Loop D!us!mmnts Cumulative Estimated and Actual Disbursements (Loan 1725-CO) (in million of US$) Bank Fiscal Year Estimated Actual Actual as % of and Semester Cumulative Cumulative Estimated 1979-1980 December 31, 1979 2.4 0.0 0% June 30, 1980 4.6 0.0 0% 1980-1981 December31, 1980 8.2 0.0 0% June 30, 1981 13.9 0.0 0% 1981-1982 December31, 1981 26.3 1.4 5% June 30,1982 50.4 4.8 10% 1982-1983 December 31, 1982 60.6 16.1 27% June 30, 1983 66.9 27.7 41% 1983-1984 December 31, 1983 69.8 31.8 45% June 30.1984 71.5 40.3 56% 1984-1985 December 31, 1984 72.0 58.2 81% June 30,1985 72.0 61.2 85% 1985-1986 December31, 1985 72.0 62.1 86% June 30. 1986 72.0 62.1 86% 1986-1987 December 31,1988 72.0 63.4 88% June 30,1987 72.0 66.8 93% 1987-1988 December 31,1987 72.0 67.0 93% June 30, 1988 72.0 68.3 95% 1988-199 December31, 1988 72.0 71.7 100% Jurn30, 1988 72.0 72.0 1/ 100% Date of Final Disbursemont 5/5/89 I/ US$ 28,083.41 was canceled because of misprocurement  - 20 - 4. Allocaon of Loan Proco,ds On USS Original Actual Cateoorv Allocation Disbursements LgM I C (1) CMI works for Part B of tho Project 54,500,000 75,942.413 (2) MIscellaneous mechanical and electric equipment for Part A, B and C of the Project 14,500,000 7,737,170 (3) CMI works and erectlon services for Parts D and E of the Project 2,000,000 0 (4) Equipment and materila for Part E of th Project, and control and communhatione' equipment for Part D and E of the Project 16,800.000 22,819,035 (5) Consultant's services (Including laboratory and other equipment, and vehicls thereftor) 1,500,000 4,624,382 (6) Interest and other charges on tho loan accrued on or before March 14,1983 24,100,000 14,877,000 (7) Unallocated 12,600,000 0 TOTAL 126.000,000 126,000,000 Loan 1725-CO (1) Equipment and materials (ncluding services for their Installatlon) for Parts A and B (excluding turbines and atemators for Part A of the Project) and equipment and materdals for Part C 40,900,000 42,081.605 (2) CIV; works for Part B of the Prolect 5,400,000 12,264,258 (3) Civil works and erectlon services for Part C of the Project 11,500,000 3,600,000 (4) Consultants' services (ncluding equipment and vehicls therefor) and training 6,500,000 9,669,245 (5) Surwys and drilling (Parts B and C of the Projec 600,000 1,039,322 (6) Unallocated 7,100,000 0 (7) CMI works for Part A of the Project 3,319,486 72,000,000 71,973,916 I/ 1/ US$ 26,083.41 was canceled because of misprocurement  - 21 - 5. Planned and Actual Comoletion Dates of ComRonents Page t o1 2 Appralasd Actual Months of Comments Prolect Components Completion Completlon Delay San Carlos Power Station Effectiveness of the Loan 1 582-CO Sep-78 Apr-79 1725-CO Oct-79 Jun-81 20 Access Completion evacuation Jun-79 Jun-79 0 Road relocalization Jun-80 NA NA Procurement Underground works Call for bids Jun-77 Jun-77 Award of contract Apr-78 Apr-78 Acceptance option 2nd tunnel Aug-79 Aug-79 Dam Call for bids Jun-77 Jun-77 Award of contract Apr-78 Jul-78 Power station equipment Call for bids Dec-77 Award of contract Sep-78 Nov-78 2 Transmission lines San Carlos - Guatape Call for bids (equipment) Sep-78 Dec-79 15 Award of contract (equipment) Feb-79 Jul-80 17 Call for bids (erection) Mar-79 Nov-80 20 Award of contract (erection) Aug-79 Mar-81 19 San Carlos - Bogota Call for bids (equipment) Aug-78 Dec-79 1 6 Award of contract (equipment) Dec-79 Jul-80 7 Cail for bids (erection) May-80 Nov-80 8 Award of contract (erection) Oct-80 Mar-81 5 Eameralda - Yumbo Call for bids (equipment) Jun-80 Sep-81 15 Include 200 MVAR of capacitors. Award of contract (equipment) Jan-81 Mar-82 14 Additional purchases completed 9/87 Call for bids (erection) Jun-81 NA NA Additional works completed by 9/87. Award of contract (erection) Oec-81 May-84 29 Additonal equipment delivered by 12/85  - 22 - Page 2 of 2 Appraisal Actual Months of Prolect Components ComD1ltion Completion Delay Proiect Execution Dam completion (1582-CO) Apr-82 Dec-83 20 First tunnel. caverns completion (t582-CO) Jul182 Nov-83 16 Second tunnel completion Jun-83 Jul-88 4 Flrst penstock completion (1582-CO) Jul-82 Oct-83 52 Second penstock completion (1582-CO) Jun-83 Jun.86 Filling reseivoir (1582-CO) Jul-82 Dec-83 Transmission San Calos - Guatape Una (I 582-CO) Dec-80 Jan-82 -11 San Carlos - Bogota Line (t582-CO) Jun-82 Jul-83 13 San Carlo - Medellin Jun-83 Nov-O5 Esmeraida - Yumbo Jun-83 May-84 Generation 0 Units - 4 (1 582-CO) Jun-83 May-84 I / I I Units 5 - 8 (I 725-CO) Jun-84 Dec-87 I / 43 Studies Losses Terms of reference to IBRO Jul-78 NA NA Invite proposals Aug-78 NA NA Award contract Oct-78 NA NA Discuss proposals with IBRD Jun-79 NA NA Dlspatch Terms of reference to IBRD Jul-79 Jul-79 0 Engagement of consultants Dec-79 May-80 5 Completion Dec-81 Dec-88 81 Training Engage consultant Dec-79 NA NA Program to ISRO Jun-80 NA NA Completion Jun-83 NA NA Calderas Power Station Access Land acquisition Dec-80 Dec-81 12 Access road completon Dec-80 Apr-82 18 Procurement Call for bids ctvil works Nov-79 Feb-81 15 Award of civil works contract Jul-80 Jul-8t 12 Call for main equipment bids Jan-80 Aug-81 19 Award of main equipment contracts Nov-80 Aug-82 21 Execution Underground work Jul-83 Sep-87 51 Clvil works power station Dec-82 May-88 29 Plant cornmissIoning Sep-83 Apr-88 58 It Refered to the last unit  - 23 - 6. Prolect Coafs and Financing (USS million) Page 1 of 2 ARpralsal and Actual Prolect Costs (Loan 1 582-CO) SAR ACTUAL LOCaa E,Qao Total L2, Al F2otn Th Enainoerlna. Studies and Administration 27.8 2.4 30.2 47.1 1.5 48.6 Power Station CMI Works Infrastructure 24.1 0.7 24.8 21.9 0.3 22.2 Access tunnel 4.3 3.3 - 7.6 27 2.0 4.6 Punchina dam 37.3 48.8 86.0 50.3 28.9 79.2 Underground works 44.9 57,0 101.8 112.0 83.9 195.9 Subtotal 110.5 109.8 220.2 186.9 115.1 301.9 Mechanical Eauloment Dam 2.2 3.4 5.7 2.1 2.5 4.7 Penstock 0.4 9.3 9.7 0.0 Turbines 2.2 21.8 24.1 1.6 15.4 17.0 Other 3.0 4.6 7.6 0.0 0.0 0.0 Subtotal 7.8 392 47.0 3.7 17.9 21.6 Eletical Fguiment Generators 1.9 16.6 18.5 0.9 14.4 15.2 Transformers 0.6 5.3 5.9 0.3 2.4 2.7 Other 2.8 8.8 11.5 5.3 2.6 7.9 Subtotal 5.2 307 35.9 6.4 19.4 25.7 Transmission Unes 7.8 17.5 25.3 14.6 8.2 22.9 Substations 1.3 2.7 4.0 4.1 14.0 18.1 Control building 2.2 0.0 2.2 2.3 2.6 4.8 CommunicatIons 0.6 1.6 2.1 0.0 0.0 0.0 Subtotal 11.9 21.8 33.7 21.0 24.8 45.8 Total Project Cost 1 2 L Financial Charges 54.1 40.1 Total Invostment .4Z 483 Prolect Financina IBRFG1 582 126.0 126.0 I1RF-1725 4.2 IBRF-FEN 21.3 IDB 70.0 60.0 Suppliers 40.0 24.1 ISA 185.3 232.8 Commercial Banks (Govemment) 15.4 GRAND TOTAL  - 24 - e. Prolect Costs and Financina (millons of U8SI Pag 2 ot 2 Aaaralsal and Actual Prolect Costs (Loan 1725-COI GAR ACTUAL Local Foreign Total Local Forolon Total A. POWER STATION SAN CARLOS II Engineerina and AdminIstrat on 15.1 2.0 17.1 31.3 0.4 31.7 Mechanical Eauioment Penstock 0.5 9.8 10.3 0.5 5.2 5.7 Turbines 2.2 21.3 23.5 0.5 11.4 12.0 Other 1.2 1.7 2.8 0.0 0.0 o0.0 6ubtota1 3.8 32.8 . 36.0 1.1 16.6 17.7 EloctdcRl Eauloment Generators 1.6 18.4 20.0 1.8 13.2 15.0 Transformer 0.3 4.1 4.3 0.1 2.0 2.1 Other 2.0 4.0 6.0 6.5 3.6 10.1 Subtotal 3.8 26.5 30.3 8.4 16.6 27.2 Transmisslon Unea 8.4 20.9 29.4 9.1 20.2 , 29.2 Substations 3.4 11.2 14.6 0.4 7.1 7.5 Subtotai 11.8 32.2 44.0 9.5 27.3 36.8 Total Cost-San Carloa II 34.6 93.4 127.9 50.3 63.0 113.3 B. POWER STATION CAL2OERAS Enginooerng. Administration 0.9 1.2 2.1 9.4 0.1 9.5 CMI works 6.2 6.8 12.0 20.1 6.6 28.7 Equipment 2.8 6.0 6.9 3.0 9.0 12.0 Total Cost-Caideras 9.9 13.1 22.9 32.4 15.7 48.1 C. STUDIES Dispatch 0.2 1.8 2.0 0.0 3.0 3.8 Training 0.9 2.3 3.2 0.3 0.7 1.0 Total Cost-Studies 1.1 4.1 5.2 0.3 4.5 4.8 Total Project Cost 1= taa 11n3 Financial Charges i1.3 Total Investment 1JiLl Prolect Financina IBRF 1/ 72.0 67.6 IBRF -FEN 60.9 Suppilera 30.5 20.2 ISA 53.6 76.5 Commercial Banks (Govemm*nQ 6.2 GRANO TOTAL 156.1 237.6 1/ US$4.2 millon financed civil works Included In the project financed under Loan 1582.CO  7. probd B_MA Apprlap l Actual diato* . EsUate Vaklues 1. Comirym Elect DltyaDemawd (GW'): 78 18,515 16,164 . Electricity Demrand and Sales (GWh) 79* .18,537 17,845 40,000 80 20,950 19.448 81 23,053 19,479 02 25,357 21,511 83 28,014 2434 30, 000 _0 84 30,423 24,&58 WAI Depl 85 33,340 25,733 86 27.548 87 29,41 20,0001 88 30,9732000 --