Announcement of Six Million Eight Hundred Thousand Dollars Credit to Help Power Expansion in Quito, Ecuador on February 3, 1972

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET, N.W .. WASHINGTON 0. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 72/11 Subject: $6.8 million credit to help power February 3, 1972 expa.nslon in Quito, Ecuador The International Development Association, a World Bank Group member, has approved a credit equivalent to $6.8 million to assist the expansion of electric power supply in Quito, the capital city of Ecuador and one of its main industrial regions. The proceeds will help Empresa El.ectrica "Quito" (EEQ), the company responsible for the generation and distribution of electricity in Quito and its surrounding area, to finance a program to in- crease electricity supply by 48 megawatts. Two earlier World Bank loans had assisted EEQ in financing its expinsion program in the late 1950s. The development of Ecuador's power sector has not kept pace with national needs, and the country's per capita generation has remained among the lowest in La.tin America. In the coming years, oil development is expected to stimulate a rapid growth of the country's industry, causing the demand for power to increase at a rate even faster than in the past. In the Quito area, the demand is projected to increase at about 11% annually, compared with an average annual increase of about 9% in the period 1947-1970. The IDA credit will assist in financing part of the foreign exchange needed for the construction of a JO-megawatt hydroelectric plant at Nayon, on the San Pedro River; a new diesel power station with 18 megawatts near Quito; and transmission and distribution • facilities to improve and extend the distribution system, including street lighting in the city of Quito and village electrification in the northwest part of Canton Quito. In addition, the credit will finance consultant services for management, administration, and ta.riff matters of EEQ; a study of EEQ's next power generation expansion, and a study of the social costs and benefits of village electrification. The total cost of the project is estimated at $18.7 million equivalent. It is expected that the additional generating capacity to be produced by this expansion program will satisfy electricity requirements in EEQ's area of service until 1975. Additional facilities should become available by that time. All contracts for the equipment and works to be financed by the IDA credit will be awarded on the basis of international competitive bidding. There will be some retroactive financing for urgent items for which contracts have been awarded after international competitive bidding. The credit is being ma.de to the Republic of Ecuador on usual IDA terms: 50 years, including a 10-year grace period, at no interest except for a service charge of 3/4 of 1% for administrative expenses. The Ecuadorean Government will re-lend the credit funds to EEQ for a tenn of 24 years, including a 4-year grace period, at 7~ interest per annum. - 0 - •  February 3, 19 72 • TECHNICAL DATA PROJECT: Third Power Project COUNTRY: Ecuador TarAL COST: $18.7 million equivalent IDA FINANCING: $6.8 million credit, 50 years, 10 years of grace, no interest except for 3/4 of 1% service charge. IMPLEMEMTING ORGANIZATION: Empresa Electric·a Quito, S .A. (EEQ), Casilla 473, Quito, Ecuador.· PROJECT DESCRIPTION: Construction of a JO-megawatt hydroelectric station at Nayon on the San· Pedro River. and an 18-megawatt diesel electric plant near Quito; improvement and expansion of the transmission and distribution system for the capital city of Quito and a village • electrification program; consultant services for management, administra- tion and tariff matters of EEQ, studies of the company's future power gen~ration, and of social costs and benefits of village electrification. PROCUREMENT: Civil works for the Nayon hydroelectric plant and all bypass works; equipment and services for diesel station construction; line switching and substation equipment; transmission, distribution facilities; engineering and supervision services; drilling and survey services for the La ?U.ca hydroelectric plant; management assistance; studies. All contracts for the works have been or will be awarded on the basis of international competitive bidding; 15% preference for local manufacturers. The contract· for 9 megawatts of diesel plant and the civil works for Nayon. plant have already been let. CONSULTANTS: Electric Power Development Co. Ltd., (EPDC) of Japan for engineering and supervision of the Nayon plant and bypass; supervision of drilling and surveys for. the La Mica plant; study of the thermal alternative for the La Mica plant; network study; management assistance; study for next stage in EEQ's power generation; village electrification study. ESTIMATED COMPLETION DATE: 1974. - 0 - •