Announcement of Bank Lends Twenty-Three Million Two Hundred Thousand US Dollars to Territory of Papua and New Guinea for Power Project on April 29, 1971

INTERNATIONAL BAN-K FOR .RECONSTRUCTION AND DEVELOPME·NT' 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 71/20 Subject: Bank lends $23.2 milliqr'j.to April 29, 19 71 Territory of Papua and(Jew Guinea for power project The World Bank has approved, a $23. 2 million loan to the Territory of Papua and New Guinea for a hydroelectric power project on the Upper Ramu river that will help meet fast growing demand in ~he New Guinea highlands and in the ports of Lae and Madang. Electric power consumption in the project area has increased as a result of rising population, industrial expansion and successful development • of cash crops and forest products. A continued rise of 25% ~nnually to about 55 megawatts by 1978 is forecast. The project is designed to meet this growing demand, replace decent ral -- ized, costly diesel gene.ration, and unify several e~ds r:fri.g lvcal power net- works. It includes construction of a 45 megawatt hydroe.lectric power station on the Upper Ramu river about 85 miles northwest of Lae. Tr)1e power st.at ion will be underground and have space for five 15 mega- '.\ . watt generating unit~-~ :~!though only three will be installed initially. About 320 miles of transmis$ion lines will also be installed to link the power plant to the principal highland centers of Goroka, Kainantu, Ktmdiaw~ and Mt. Hagen, as well as the two ports. The $33e9 million project is the initial phase of a power development program planned by the Electricity Commission of Papua and New Guinea (Elcom) • for the Upper Ramu river. A second phase o.f the program, to be undertaken later, includes installation of two additional generating units and con- struction of an upstream dam to regulate. Tun-off. /ffVJra Bank P.R. No. 71/20 - Papua & New Guinea - power - 2 - The Bank loan is being made to the Territory of Papua and New Guin~a • and will be guaranteed by the Commonwealth of Australia. It is for 25 ye.a ts, including a five year grace period, with interest at 7~%. Elcom (P .o. Box 1105, Boroko, Terl'itory of Papua and New Guinea) is the beneficiary of the loan and will implement the project, which is scheduled for completion in the last quarter of 1975. Local costs of the project, estimated at $10.6 mill~on equivalent, will be financed from internal cash generation and Administration loans. The Bank loan will finance the off-shore costs. Procurement will be on the basis of interna- tional competitive bidding. Nine financial institutions are participating in the loan for a combined total amount of $925,000: Manufacturers Hanover Trust Co., New York; National Bank of Detroit; Crocker-Citizens National Bank, San Francisco; Franklin National Bank, New York; Detroit Bank & Trust Company; • American National Bank and Trust Co. of Chicago; The Northern Trust ,Company~ Chicago; Central National Bank of Cleveland; and Union Bank, Los Angeles. - 0 - •