Announcement of Twenty-One Million Loan for Electric Power in Ceylon on July 23, 1969

• INTERNATIONAl BANK FOR R,ECONSTRUCTJOf\1 AND DEVELOPMENT 1818 H STREET, N.W., WASHINGTON D. C. 20433 , TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 69/5~ Subject: $21 million loan for, electric 0 July 23, 1969 power in Ceylon The World Bank has approved a loan cquiv~lent to $21 million to the Ceylon Electricity Board for the installation of 115 megawatts of eJ,ectric generating capacity and associated transmission facilities. This will increase the ,Board's power generating capacity by nearly half. The loan will be for a term of 25 years, including a 5-year grace period, with inte~est at 6\%. it will be guaranteed by the Government of Ceylon. Most of Ceylon's power generation and distribution facilitie's acre now Ad- • ministered by the Department of Electrical Undertakings. They (;:~iill soon be transferred to the Ceylon Electricity Board, a recently established power authority. Present capacity of the system is 261 MW, of which 125 MW were con- ,\ structed with the assistance of three earlier World Bank loans totaU:ng $37 .3 mil- Eon. Although agriculture continues to be the larg2st sector in Ceylon, :much at- ~eution is now being given to industrial expansion. Factories newly built or uuder construction include those producing textiles, plywood, ceramics, cement, rubber tires. and tubes, and primary steel products. The annual increase in power sales, which has averaged a~out 8% since 1961, is expected to continue over the next ~everal years as industrial activity increases and new factories come into pr::,duction. • The project being assisted by the Bank loan should meet Ceylon's electric power requirements until 1974. It consists of ,the second stage of a three-stage /more  (\ \) • Bank P.R. No. 69/59--Ceylou-Power - 2 "!" development of the Maslr.eliya ,J:{iver which incluqes a. diversio~_~datn, a pressure 'i::;~;/1 '~' '' 0: ~· tunnel and penstocks, a 90~MW hydroelectric station, a 132-KV switchyard and 1.'. , (•, about five miles of transmissipn lines to con11ect the plant to the existing network. ii Also included is a 25-MW gas turbine" extension to the existing Grandpass thermal;~tatipn at Colombo, and the services of consultants. The ~as t11rbine is to be conmissioned about the end of 1971 to, meet the deficit b" in energy which would otherwise '-'arise until the hydroelectric plant is com- missioned i~ late 1972; thereafter it Jdll be used for peaking purposes. The ,)i Board will execute the proj~ct and prd,:c urement is being carried o~t on the 1 \\ basis of internati6i1al competitive bidhing_. The total cost of the proje~'t is estimted at the equivalent of $31.5 mil- lion. , D The Bank loan of $21 million will covi!r the foreign exy.h'.ange cost of major , ' c civil works, of eleptrical and mechanical11· equipment, interest on the Bank loan i( ./ U during construction, and tt;ie services o~ engirt~~rJ.;>,g and other consultants to 6 /;._,J /~ • help:, the Ceylon Electr,~city Board set, up its.:··:rt~lf o~gani.zation, reorganize its accounting system and revalue its atJsets. the remaining costs will be financed by the Ceylon Electricity Board from domestic· sourc·es. 0 •