Announcement of Two Loans Totaling One Hundred Thirty Million US Dollars for Electric Power and Steel in Romania on July 9, 1974

·' • 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 74/69 Subject: Two loans totaling $130 million July 9, 1974 for electric power and steel in Romania The World Bank has approved two loans totaling $130 million to assist the development of key sectors of the Romanian economy -- electric power and steel production. A Bank loan of $60 million will help to finance the construction of a 1,320 MW thermal power station and associated transmission lines. The other loan of $70 million will finance a portio~l of the foreign exchange costs of a special steel project. The $185.3 million project includes engineering and construction of a cold rolling mill complex designed to produce 30,000 tons of stainless steel sheet and strip a year and a rod and bar rolling mill complex designed to produce about 120,000 tons of alloy steel rod and bar products. Both the loans are being made to the Investment Bank of Romania with the guarantee of the Government of Romania. The power loan is for a tenn of 25 years, including 5~ years of grace. The steel loan is for a term of 15 years, including • 5 years of grace. Both loans carry interest at the rate of 7~ per annum • The $60 willion loan for electric power The Government of Romania attaches high priority to the.development of the electric power sector as a prerequisite for the economic development of the country. The Government plans to invest about $5,000 million to support the planned growth in the power sector over the years 1974-80. Of this, ~ome 60% will be for new generating plant. Thermal power development will be largely based upon indigenous solid fuel, principally lignite. The Turceni project being financed by the Bank loan is typical of this approach. The Turceni power plant will be among the largest of the lignite-fueled plants in Romania comparable to the existing plants at Craiova and Roinari. The project includes the construction of a thermal power station with four 330-MW lignite-fired units complete with realignment of the Jiu River for cooling water intake purposes and flood control, road and rail links for construction and genera- tion purposes; and 400-kV and 110-kV transmission lines, about 600 kilometers long, connecting Turceni with Mintia and Brazi substations including a switching station and inter-connection with the existing 400 kV system. The project is scheduled for completion in 1978. $70 million for Otelinox Special Steel Project • Romanian development policy during the last 25 years has emphasized industry in general and producer goods in particular. The 1971-75 Five-Year Plan calls for a Note: Money figures are expressed in US dollar equivalents. Bank P.R. No. 74/69 -- Romania -- electric power and steel - 2 - continued emphasis on heavy industry and stresses technical improvement, product diversification and increased capacity utilization. Crude steel pro- duction grew at an annual rate of nearly 14% throughout the 1960s, increasing • from 1.8 million tons in 1960 to 6.5 million tons in 1970. It is projected to grow at the annual rate of 10% during the present decade. Rapid growth is foreseen in the sectors which consume alloy and stainless steel. The project being assisted by the Bank loan is important for the development of the Romanian metal processing and machine building industries. It includes the construction of a cold rolling mill complex designed to produce annually about 30,000 tons of stainless steel sheet and strip from hot-rolled coils; a rod and bar rolling mill complex to produce annually 120,000 tons of alloy steel rod and bar products from billets; and staff training, application of special production processes and studies on the end use of finished products. The project is scheduled for completion by June 1978. • •  • I . NJ,< ' ' T' 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 July 9, 1974 TECHNICAL DATA PROJECT: Otelinox Special Steel COUNTRY: Romania TOTAL COST: $185.3 million BANK FINANCING: $70 million, for a term of 15 years including 5 years of grace. Interest at the rate of 7-1/4 per annum. OTHER FINANCING: Government of Romania IMPLEMENTING ORGANIZATION: Otelinox Special Steel Enterprise, Romania Pro- curement Agency: METAROM, No. 1..2 Boulevard Gh. Gheorghia-Dej., Bucharest, Romania PROJECT DESCRIPTION: a) engineering and construction of a cold rolling mill complex designed to produce about 30,000 tons per year of stainless steel sheet and strip from hot rolled coils; b) engineering and con- struction of a rod and bar rolling mill complex designed to produce about 120,000 tons per year of alloy steel rod and bar products from billets; c) training of staff in the application of special production processes and techniques and in plant management and operation; and d) studies on the end uses of Otelinox's products. PROCUREMENT: Two single-responsibility packages--one for the cold mill, and the other for the bar mill~will be procured through inter- national competitive bidding in accordance with Bank guidelines and following a staged bidding procedure. ESTIMATED COMPLETION DATE: 1978 '  ' ,. PROJECT: TECHNICAL DATA Turceni Thermal Power July 9, 1974 • COUNTRY: Romania TOTAL COST: $353.5 million BANK FINANCING: Loan of $60 million, for a term of 25 years including 5-1/2 years of grace, interest at the rate of 7-1/4% per annum OTHER FINANCING: Government of Romania and the Investment Bank of Romania IMPLEMENTING ORGANIZATION: T~rceni Enterprise, Bucharest, Romania Procurement Agency: ROMINEREO Boule.vard Dacia, Nr. 33 • Bucharest, Romania PROJECT DESCRIPTION: Construction of a) a thermal power station with four 330 MW lignite fired units, complete with Jiu river realign- ment for coolirLg water intake purposes and flood control, road and rail links for construction and generation purposes; b) 400 kV and 110 kV transmission lines, about 600 kilometers long, connecting Turceni with Mintia and Brazi substations including a switching station and inter-connection with the existing 400 kV system. PROCUREMENT: The Bank loan will finance equipment, materials for manufacture of major equipment, and some construction equipment. All items to be financed under the Bank will be procured on the basis of international competitive bidding under the Bank's guidelines. ESTIMATED COMPLETION DATE: 1978 '