Announcement that a Loan for Two Million Six Hundred Thousand Dollars Was Granted to Colombia on December 28, 1950

• ·-.:;-;-.~, ~'· '"'.~.' •. ,' ';;:f:. ,,, ~. ", ,'·"1'·;·.~ ...z:i-i .C, ; INTWTATIONAL BAM{ FOR BECONSTBUCTXON AND .DEVELOPMEN!' • FOR~ PRESS P:resa Release No. ,227 ,1 " FOB lMM?m!ATEBELEASE December 28, 1950 The International Bank for Reconstruction and Development today made a loan of $2,600,000 for electric power.development 1n: Colombia. The loan was mad.a to th~ Central :Hidr0electr1ca de Caldas, L:tmitada, a publicly-owned pow~r company, for the construction of the Larlnsiila l).ydroelectr1c peoject. Power from this project is eX.[)ec~ed to Sf\t!sfy the nee<la of Mam.z.alee, a fast-growing city 1n ' 0 () western Colomb1~', and to encourage eeon~c- devel,.opnent 0 · The :Bank has now made·loana totaU1ns $232,775,000 to :member countries in "' Lat1·n ~ertea., ThiQ 1a the :Ballk'·s th1X'd lo~ for develoment purposes in. Colo.tiibia • . In Ausust 1949., the CaJa de' CJ;"edito A~o In(l~strial y MJne:ro received $5,000,000 for the purchase of a~icuJ.tw:al mac~:nery,; and 1n November 1950., a loan of $3,530,000 was made to the Cent~l 1li.droalecrtr1ca del. Rio Anchl.oaya L1Initada for • ··t~e cons'truction of a hydr-o~!ectrio plant. The present loan is fo~ a term ot 20 years and oa~:tes an 1ntere·~, rate of 4i 1nolu.dins l.% co-1.ssion which,, 1n accordance wtth the :Bank's Art1cle~\pf Asree- ment, is allocated to its S1)ec1al rese~e fund. Ain,ortize.t:ton pa~nts, calcul4ted to retirEt the loan by maturity, wi:.Ll start on ,Auguet 15, 1952. The loan is f ~ gu.aranteed by the Be:pubJ.io of Col0Jllb1a. 0 The loan of $g,6oo,ooo will . be \\Beel to finance the Jnajor,pal.'t of th~ tore1sn ' ,,. exohanse cost of the Ia Ine~ project~ Ute the ~ql',J.1caya loan, this loan waf under considei-atio~ before tlle rece~t conipletioJ?. of t;lle rf)port· of the mission which, ~ponsored JointJJ by the I:twmat1oMJ. »ank ·and tJie CQlonit,1~ Gc>ve~nt, ma4e a senei-al ~ey ot the ,conomy of Col01;nb1a 1n 1949. ~ s report str-e~sed the !m~ portanee ot pQ.we;r dev~lQ~nt 111 Col~b~~ eii¢ reQOJm1encled that l11~pr1oritt be stven to· jnc~easq'· the. B'1PP11 ot elect:rio powe:r f?r t}).e Pity of Men1zalf)s @4 the B\ln'OUn(l.ing aree., ' .\  Men1zalee 1 a mun1cipaUty of 130,000, is 1;11tuated on the western slopes of • Colombia~s central mountain range. It 1s a city of considerable commerc;lal, e.nd industrial illlportance, loca~d in the center ~fa coffee srowins area, which sup- plies a:Jmost one-third of Colombia's total coffee production. Up tbc·the present, l Maltlizale~ bas been served bymun1ci:pally owned hydroelectric plants wit)l a total in$taUed capacity ot 6.,300 kilowatts. The si1pply, of electric eners.v is 1nsuf• ficient to m,eet t~~ needs Qt tbe city, and for th~ past few years there has been \l a cr1ttcal shol;'t~ge of power both fo~ residential an.d 1ndµstrial conawnpt1on. Adequate power will overcome the present aoute slJ.ortase @d should greatly assist the eoo:nom1c developinent of the area.! . ~e tQtal capital cost of tlle I,a Ineula proJect, which the :a~•s loan of $2.,600,000 will help to tinance, is estimated at the equivalent of about $9,429,000, The lQca+ currency costs, a?ld a small p8):'t of the foreign e~ohanse coats, will be met by the borrowei- out of its own :reeou;rces. ConatJ;'Uction wo~k on the project ) •. started in 19441 and the hydroeleot;t'i.c p~t ia ~t p~e~ent about 80% complete. It 1s expected that the proJect will be l"eady for operation by the ~ddle of 1951 • • ~he :to. Insula p~ojeot wi~ consist of a hydroelect,:-1c development located about seven miles SO\lth and 1est of ~n1zal~s, end an jJnproved d1stribU.t1on system ~n tlle city itself. 'I'he hydroeleot:ric developnent will ;tnclu~ the consti,ict!on of a diversion dam and intake on the Chineh1na Bive~; a syat~ of open C81l8ls 1 siphons I\ and srav1ty tunpel about 3.7 mil~e)llons, whJch w1U. eJa,PtY into tlie /! C~ de Guadua River. An earth -~ will be l:>wllt acl;'oee tll1s streein which wiU create a reservoir "3:; t with a usable storage cape.City of ~bQUt 1,400,000 ~ubic m~te:rs, qr abollt U30 acre feet, Sijff'Jcient to reGU1ate the f1QW Qf water to tllf3 ;powerh~4:3e ill wh;lch two 10,000 kw gen~mt1ng units, t()sethex- wit'.h two step,-up tranaf Jrme;rs, will be in-. 1 stalled. Elect1"tc enerSY gen-:,rated at ta ?nsula will be dGl.iverad to ~z~lee Via a ·si:paJ,e-c1~1i1it tJ-an,QJnise~on line about 7 m1lei:s 1Qll8 wl},lch Will teuniJMtt• in a •• etep-.down substation f.or red4CinG th& tra.tUmlise1on voltage to distribution voltase  (I 0 • ·- 3 • levels. A JX1odernized and expanded d1Eitribut1on system nth an initial capacity • . of 12,000· kva will turriish electric·· power within the city of Msnize.les. The tl1a• tr1but1on system has been BO destgned aS to proviae for future expansion as the defll8~d tor power increases. !l.'he Central· 1t,.droelectr1ca de Ca1das, L1nl1 tad.a, the borrower, was formed . !.n 1944 to oonst1'1,et the La Insula hydl:'oelectr1c project and incrc3aee the power supply oi1the ctty . of Menizales and the surrounding area. It is organized unde;r Colombian law as a commercial company of 11m1ted 11abilj.ty. The stock 1s owned by the Gove~t of Col~bi~, the Department ot Caldas, the Municipality of Manizales 81ld several smaller municipalities. The Company will own and operate the new hydroelectric system. at l,a InQUla as well as the enst1ns generatins and dist~bµtion facilities which it has purchased from the Munio1pal1ty of ;. Man1z,les. Afte:r ·~l:'oval by tlle l3ank' s :Executive 'D:1.reQto~--s, the Loan an.d Guarantee Agreements wer.e signed by the. Colai,.l>i~n Ambae~dor, :or. Edu"rdo Zuleta•Ansel, repreaent,.na the Central Hid,roeleQt~ica a.e Caldas, I4m1t~da an~ th,e Colombian Government, . ~n(i by Robei;wt L. Ge.r.ner ~ Vioe 'J?::rea1dent:, 'on', beli'alt of "the. ·I~rnattona1 ~ to~ lleotm.etrmrt1on ..and.,J)e-v,eloPlll8nt.  SUPPL!MEt'TAL STA~~ ON THE I/JAN FOR ~ • IA .INSUIA BYDROELECTIUC PROJECT IN .COLOMB!A Recent Deve}Ep_merrts.,m'-tgEconom.y of .Colombia The ·ma1n trends in tlle Col~bian economy are favorable. Econ~c deve,lopment Jil~s ~ee~ prqceedinS weU, part1c\ll~lY 1n the last five years.·, Oal)i.tal· fo~$101, · is a~· a rel.~tively high level w1tll private 1D.veErt]llent=.1>rov1d1~ some. t~e..·quarte~Q· .. ·qt· tllO. .,totai.. There has. been a notable expanaio~of~!JrOduotion,and it :ts estimated: . t~t·.th~.volume· ot. industnal production has increased 143~ from 1939' to, 1~48., . . 'ne produ.etto:Q.· is becoming 1ncnasingly d1ve~s1.t'1ed, eru~bling Colombia to . · ut1JJ.te ~ inore of her qwn :resoUl'oes to Jlleet her conSUl?lption re~tuirexnents •. Hov~ver, the co~'"'.ltry et1U remains· heavily depen<lent upon the ~xport:; of a s i ~ C$m~d1t;y,. coft:eeo · · · The eXJtort. ·.position continues to be favorable., .. Althwsh ~xporte of coffee hav~ ~oniewbat de(?~f.ned during 1949-50 season, expoJ;'b ~ecetpts did. not -su:ffer ~eoause · of· the oQnside~ble increase ~n coffee p;r1ces at the end of 1949. :tt ts expected that ··tlle former expoxwt ·vol'Uil1e$ .wiU be reswned, and prospects for coffee prices·· a.re good. The·prospects fo~ oil., the s,co~d largest exP<>~, have been recentlg ~;rovc,d by al) agreement satisfactory both to the Colombian Gov"nment an(! the fore1sn oil · --eOJ;np~es Q~noii~e<l:, U11d~~ this a~eeJnent the de Mares con.cession, the· 1argest · pre;;a.uo~n~ f'tel~ 't.1.nd the a1te of ·the ~ef1ne:ry, has been t:ranefe~d to the Gover;m.i~ntJ · ret1ne:ry _oa:pacit~nll b~ enl.8.J;'Sed under Gove~nt owne~hip a·nd foreisn man$g~ment, • and petrole~ prodi~cts will be distribiited within Colombia by t:be ·;tWetinel9s.: \ . . . E:x;port exohanse purohaeed by ~he Central :SaJlk totaled US $232 ·m1uion 1n the :first rp.ne ~onths of ~950, COlllPa~ed w1tll US $172.:million 1n the Sf4m.e pexi.od'· last .:_year, But p.ue to a ~ore liberal a~t~tuQ.e in the 1sSU.anoe of jJnport Uc.e.nses dur:tns . that pe~U>d, it ~s not possible to inc:r~aee off:tc.ial foreisn exchange. }l:oldinge which, on. September 301 1950, etood at t,J$ $lll 1D1111on, ·exactly the· sa:tlle. ~vel as e.t th~ end 9f 1947 and 1949. · JolJ.owitJS t}J~ pub;J.1cat1on ot the Colaubian Mise:ton Report, the C.olap.b1fUl Govern~ ment aJ;l:po1nted ~. C~ttee on Eco~~c J.>~velo~ent, comprised ot me~ber.e c.b;o~~n fr.om · both majQr ·political .parties. Tlua b:t-partisf;Ul oOJJm1ittee has be$n e:iitivetedf with the task of :analyzµis the report e.nd 9f lllakiilS reco~ndat1one to -tJ>,e Gq.ve~n.t-· op th~. measures to be takep. tor the development of tbe country' e econQlnY s ·~e· ·oQXJttllitte$ has not yet :1seued 'its t~l "cQDlJDend.ations 'upon. c1evelopm~nt probloms., al~he)Ugh 1t 1e bel.feved ·to be f'~ r,,.dvenced in tp.eti- cons:t~eX'e.ti.cii~:, · :··. · ·. ·. · .. · · · · . A resurgence ot ',nflat:tonary tendenc~es has ~evelc;,ped. 1~ Colom1)1~, 1ih«t money supply bavins 1Ilcrea'3eQ. .16% 1n the fi~fft m.ne inolltb1, ·ot; l950. · · Pr.tees· ;!ave· 1no.reased by 24~ d~µl8 tlle same per.lad, t;,ompa,;-e4 with 5%.. for the wnole yetn,:·1949tt The .Econcu4c Peve.lQ~~t C~tt~e has ts·sued e. Nl)c,rt··lUld· ~Qo=ieJ1datJo~ on t.bt· 1nf!lat10.n11ry p0$1tion. re.c~ncUns stab1l1Jat1on et ·the moiiey · nppl..Y, ~ttt~U.1,zatto~ · ot the -~ta:i, doinestie commei'Qial bank reeerve1;1, inQrea~e of the Centi;'al· Bat«, 41~.. ~ount iii~. trOJ11 4~ to. 6'/o,. t'eetrtcttQ~ Qt .GQve,=e~~ .91;9e~t ··o~e:f(lt1QZ,llm!}~ · tl.14t the ptiese¢ budget ~ooo~ta $.~cl be clc:>Becl . wi~ ~ ;reeQ. ~1ue. ni.e 00:ve,~nt has au • not Y$t e.41-o»'.becl t:be.ee NCOllllJlen®tlOQ I but ~s. ~btained the Col~~~. 'b811ks'  • agreement that Qred.it wlll·be stabilized. at the September·1950 hvel·as recommerid.ed nyPtho Coimr11ttee. . . •• \ .... : • - . . .. ". ·. '• . . . ·, .It . • · The prospects for fioulld futul:'e development, :for which ColO?nbia has s1.1batent:tal ;-esourcesi thex-e:f'ore 1 e.ppear aood.o Even though foreseeable ~xpo~ d1vers1f1~at1on ·Can only be l1m1 ted, developent should ease real pressures for J2.<>n•diepensable imports. Need for the Loan ~e bonstX'1.lct1on of the· La Inau4 hydrt?elect:r:-ic project war;, de~:!.ded upon in.· . order· to satisfy the ·demand· tor power in the c1ty of ~zalee and the euri"oundil:lB fU'ea-. . ManizaleC:J 1a a fast develop~ city Qf considerablo cOJl'lmeroial and 1:nd.ustr1e impor:tanoe located in. the center of a coffee growing area in the·Department of Caldas wl;l1Qh ·supplies almost one-:th1rci of the tota1 p~duotion o:f.:. ooffee in Colomb1a~1 '!I • • . . . . t rt ha·s long been reeQsn,1zed theit the available powe~ for Manizales was in•. a~quate and. .tl:!at ~ ·Qubst·a~t1a1 expa~is1on of ~ane~tins ;f'ac111ti.es "1S.S .r(;)quire,~. I:n recent ~e~ra, ·haw&vie:r, Qnly a min.Qr addition to these fa~111tieC:J ~a be~n made., ,while.t~e:pol)ulation ·ct Menizales grew :t'r~,86,ooo in 193a to,an est~ted 130,000 in lQ50. ·. · · · . The e).e~tr1~· p~e; situation :ts now. critica;L, During tJi~ p~~ hours the · . voltaa~ ~ops a,s lJlUQh as 2oc/a. Since there is :no reserve. ·C~pacity encl. t};e genera• ting. plan,ts_ a~ . in· bad repair, 1nte?TUpt:J.ons are frequent, and. prolollG~d~ :Powei- · shortage fQrced.Wi?.lY es1;iabl1abmentaoto inetall tlle:tr· own :lndividu~l pO'Wer.pJ.ants~ The hish ,w.tial~Einci opera.tins cost of these p!J.ents has 'been• deterrent to the c;ty•s eoonom1c. devel.oPnt. · · · · The coristruction ot the la Insula hy~oelectric da;tvelopment 1s coneid~ed .ae . the. moet app1:0px-:f,ate vay to ~edy tb.1,.s $1:~,lat~on s1.nce nc,ither ooel nor oil are· .: to be found vf:thin,;, or near th$ Departine~'U of Caldas ~pd th• S"%.Pp1y of wdod fuel eve. in ~u ~~m>:tit1e, for domestic ~~sea llas become a .serious ;P~blem~ Descripri~n o:f ~he. P~?,1e~t The·t,a. Ineula.proJe~t wiU Qons1et of a by<ll9oelectr1e develo~ent located 't'eet ~ south of Manizales end a -~:t'str1but:ton sys·te:m. !f,n. the Mun~P1PQl1ty Qf Men1zale.s. · .flt a po·1nt -t\l)~t :~~ven a1~·~J.etJ dJstant fi{Pm ~~zales, a (l;tv.e~$1Qn dam an<l. 1n~e w.ill b~ bU,.lt on ~Jie ChincMiia ~ver·b.elow its co!lf';Lµenee .witll ~e Bio Claro. The we.t,r Wil+ be oar:i-~e~ f'~ ~ elevfltio11- o·t abaqt .~,480 fo~~ ,.. ~l.lsh a system of~.· open· Cariale. atJ.4. siphoJ;1$. ~nd ·a: ~vity tUME!l nth ~. total length of about 3 .. 7 Dd:lee ~sc~g~~:at a somew}u.lt: l.OW$X- elevation into the ·e't~em,bed of.the Cams de Gu,adue Ari ea~,~. ~vUlS··•.·~ be1sht ~f ~bo'1t 50,t,~, and a -~<?tal l~netJJ. ot .about ' " 820 teet nu ·be b\lilt .ac;ro.ss t~s streaJJl, ;reatt~s· ·a :rese:rvo1J- ~ th a u~ble storage eapaei1lt·o.f ~bout 1,13.0 ~ore t,et·or 1.4 ~U~on cu'b~c·tiiete:rs; to reSUr1ate tlle flow of wate~ to.· t.iie l>oVE?X- station. · · Th•· i,~we1:b~~., ~U. 1;,;J 1ocated. at :ta. ~ ~ C$pO~()s;"e :Bi~~ ab~t 4,00Q feet •.. The eft~~~tive heAd on ·the· tux-p1n,s .~·u .be •boµt elev~t;f.o~ .. ot· Qn a, M 4qO feet; ) The .PCW&t'hOU$8 will b~ abov·e ~~d, ftf ·:OOi\C;rf;lte· C~~~:l;ruo'.t~9~·, ~Jld i~s Sene~t1Il8 e~~~nt nu c~p.ats~ ot two 1Jm..tS. ueJne ~ois ~ype. t~b!r;e~, eaeh •:senei,ato,..·rat,d ~t u,~oo kva at 85%pow;:r facto:r 8~ d~c~~connectea. to f$e118J;'flt~.,t 4;160 VQJ.te, 60 Qyc~e. q • ·- 6.·- • .__ ._The. ·~betati<>n. ·at -~he power Pllmt ·w1~ be ... Of tlie .OUtdQor tn,e. Two. 9, 000/12,,oc kva 'tllr.ee~phase trf;lllSform.e~, · eacb dir~ctl.1 connected to eacJi. of the generators, will step up the senertttorvoltage ~o t~e t1.""iu.mi1ss1on vc;,ltese of' 33,000 volts. . .~)J,eo~ ~oit ~ill$le--e1rcu1t transniiee1qn line wiU_ be run n-c>m ~e powe~ ~ a~t1on to the tmti31d.rts of:;Manizales vhex:e a coJnbined step.-delm tmbstat1on, and - ~-tc~~g stat1~n 'Will be const~o_tea,. The step-down aub~tation wiµ i;e ·equ!l,)Pe4 wi~ll twq 33/~.16 kV' transformer~ hav1tis a- rated capacity of 9,000/12;000 kVe., end with the nece~ee.ry ew1toh1ng, prt?teQttve 1 and 9ontrol d,Vi~es. . . The d1st~1but1on systeJA tc;,~ the Mun1cipe:Uty of M~zaie,~ ~U have an_ Jnit-~J capaoit1 of 12,,000 k:v'ai wit&. px-ovi~!on for fQ.~ ,xpe.ttS1on ~e th~ do=and tor powe~ 1ncree.sea. The basic scheme 1nvoivee tlie initial subd1v1e1on° of the City of' · . .. G Melµza~a into four. ;one.s: Cent~ai, Ind°"stx-1ai, Be.e,1dent:ta1. ~nd ~-logrand~.:.Jmoa. TheQe. wJU be aupp1,-ed 1:?Y efgbt ~<Ual pr;lm!ry ff}edere of l ,500 k.va ~~µal · . capacity ~a.9hj ;paJ'tly of underground :r1-1bbex- izisulated cab:;Le and partly Of' ·Weather- 0 proofed cablf> ·Jt;tlllS on steel posts • . The prima;ey- · 4',str:tbution voltage of 4,160 ! vol.~~ wilJ. be ~ed1~ed by ·~ans of tre,n.sfO:t'Jil8;t9S to tho t1mil conamJiption volt~se~ of 240 and ~Oa Faoh t~ansf'o~~ will be ~onneoted to jts own eeconda17 d.i.etribu.. t;oll EW1~,. Inte;-colllieQt,1<>~s W1ll Qe prov1.ded for 'bo1;h tbe pr:lma:ey and secondary, distributton syat~, in ·o~er to furnish.a. ~SA- def51!'ee of continuity of service~ • I