Announcement of World Bank Lends Seventy Million Eight Hundred Thousand US Dollars in Colombia on June 5, 1970

76/~ , ~'\·\ONAL 11,i • '()~':" ,\-.f.-<>o ,f> ~-"' ~\\i~ K r I lNKJ R' t'""'"',:.n i'"' • '( }''~ ; ci >:, {'" '\. f'\J , JL. D ir I\_~;"') \' L~ 1818 H STREET. N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 70/36 Subject: World Bank lends $70.8 mil- June 5, 1970 lion in Colombia A World Bank loan of $52.3 million will assist in financing the largest electric power undertaking in Colombia -- the Chivor hydroelectric project which will initially add 500 megawatts to the interconnected system supplying the four largest cities -- Bogota, Medellin, Cali and Manitales. This will be the Bank's seventeenth loan for the development of electric power in Colombia, bringing the total to $293 million. A second loan, of $18.5 million, has been made for the improvement and ex- • pansion of the water supply and sewerage system in Cali, a city with a popula- tion of some 900,000 and growing at the rate of nearly 8% a year largely as a result of an influx from the countryside. $52.3 million 30-year (7 years of grace) 7% Bank loan to Interconexion Electrlca S.A. (ISA), guaranteed by ISA's principal ,shareholders and the Republic of Coloubia Colombia has a total generating capacity of approximately 2,000 MW, of Which half is in plants built with the assistance of earlier Bank loans. For over a decade power demand has been growing at an annual rate of 11% and this trend is expected to continue. The Bank has long supported the concept of power integra- tion in Colombia since interconnecting 1the regional power syi'~tems to create a national system would result in significant economies~ ISA was created in September 1967 as a vehicle for this interconnection and for developing and operating major new generation plants. ISA is owned by the utilities operating the electricity systems of Bogota, Medellin, Cali and Manizales which produce some two-thirds. ti£ all the electric power generated in Colombia. An $18 million Bank loan, together with joint financing from supplier countries, was made to ISA in 1968 for the construction of a 332-mile, 230-kv network interconnecting the four systems; this will be completed by mid-1971. The Chivor project will be the first generating plant to be built by ISA and • will have an ultimate capacity of 1,000 MW. The Bank loan will assist the first phase which includes the construction of the Esmeralda Dam on the Bata River, a powerhouse with an initial capacity of 500 MW, and a 112-mile double-circuit transmission line to link the power plant with ISA's interconnected network near Bogota. The power plant is scheduled to start operation in mid-1975. Th,e total /more Bank P.R. No. 70/36 - Colombia-Power & Water Supply - 2 - estimated cost of the project is equivalent to $114.2 million. The Bank loan will cover part of the foreign exchange costs; the remainder will come from bilateral sources of financing. The local currency costs of about $48 million will be covered by ISA's stockholders. §18.5 million 25-year (4 years of grace) 1i Bank loan to Establecimiento Publico • Empresas Municipales de Cali (EMCALI), guaranteed by the Republic of Colombia Pending the completion of a nation-wide study of the water supply and sewer- age sector, the Colombian Government is giv1.ng priority to the expa.nsion programs of the larger cities where population is growing rapidly. This loan for the Cali system is the seco~q to be made by the Bank in Colombia's water supply and sewer- age sector. A loan of $14 million was made two years ago for the Bogota system. Cali is the thh:.l largest city in Colombia and the political, administrative and industrial center of the Department of Valle. The project being assisted by the Bank loan will enable EMCAL! to provide water and sewerage services for more than a million people in 1973, compared with the 710,000 who are now served. It will permit the extension of service to areas inhabited by the city's lowest in- come groups where, because of inadequate sanitation, health conditions 3re in- ferior to the level generally prevailing in the city. The water supply portion of the project includes a new intake and water treatment plant on the Cauca River, new supply/distribution pipelines and house connections, and improvements to some existing supply lines and house connec- tions. The sewerage portion includes a major sewerage interceptor, which will • reduce pollution of water at the intake of the water treatment plant, a pumping station, trunk and secondary sewers, and drainage canals for the relDC\val of storm water. The project is scheduled for completion by the end of 1973 at a total esti- mated cost equivalent to $33.5 million. The Bank loan of $18.5 million will cover the foreign exchange requirements and part of the local costs. - 0 - •