Japan - Chubu Power Project : Loan 0091 - Press Release - Conformed

INTERNATIONAL BANK FO RECONSTRUCTION AND DEVELOPMENT FOR TEE PRESS FOR IMMEDIATE RELEASE PRESS RELEASE NO. 343 October 15, 1953 The International Bank for Reconstruction and Development today made three loans totaling $40,200,000 for the expansion of privately owned electric power facilities in Japan. The loans will help finance the construction of three high efficiency thermal electric power stations in central and south Japan. Increased supplies of power will help to meet the demands of industrial plants manufacturing metals, machinery, textiles, chemicals, and of coal mines and shipyards. These industries are expected to expand substantially over the next five years and are of key importance in Japan's efforts to improve its balance of payments position by increasing its exports. The loans, which are guaranteed by Japan, were made to the Japan Development Bank, a government agency established in 1951 to supply long-term credit for high priority industrial development and economic reconstruction. The Development Bank will re-lend the proceeds of the loans to three private companies as follows: $21,500,000 to the Kansai Electric Power Company, Inc.; $11,200,000 to the Kyushu Electric Power Company, Inc.; and $7,500,000 to the Chubu Electric Power Company, Inc. These concerns are three of nine private companies organized in 1951 to take over the operations of all electric utilities in Japan at the time when electric power generating facilities were denationalized. Together, the three companies serve 30% of the total area of Japan with about 40% of the population. In 1951 they generated 37% of all electric power produced in Japan. Each of the three loans is for a term of 20 years and bears interest of 5% per annum including the 1% commission which, under the Bank's Articles of Agreement, is allocated to a special reserve. Amortization payments on each of the loans will begin January 1, 1957. As collateral for the loans, the International Bank will receive from the Japan Development Bank a pledge of obligations which that bank will itself receive from the power companies. Westinghouse Electric International Company and International General Electric Company are prime contractors for the supply of equipment and services being financed by the Japan Development Bank from the proceeds of the International Bank's loans. The companies have entered into arrangements with the International Bank to participate in these loans to the extent of about $6.1 million, which amount the companies will receive back out of the early maturities of the loans. Although electric power production in Japan has increased markedly since the war, supply is still short of demand, and shortage of power is seriously limiting the growth of industrial production. A recent power survey estimated that the demand for power would increase by 31% between 1952 and 1957. To help meet the demand for power, Japan's private utility companies are planning to expand their installed generating capacity by 2.9 million kilowatts by 1957. The thermal power plants being built with the Bank's loans are part of this expansion program. In addition to the installation of new generating and distribution facilities, the Kansai, Chubu and Kyushu companies are taking measures to improve the efficiency of their existing systems. The Bank's loans will finance the foreign exchange costs of the three power projects, which include engineering and supervisory services as well as imported equipment. The plants are scheduled to begin operations during 1956. The Kansai plant will be located in central Japan at Tanagawa on Osaka Bay. It will consist of a complete 150,000 kilowatt steam power plant with two generating units of 75,000 kilowatts each, designed to operate at high temperatures and pressures. The area.to be served includes the cities of Osaka, Kobe, Sakai and Amagasaki, where the main industries include metals, machinery, chemicals, ceramics, textiles and shipbuilding. e.t~~~ ~~ ";t:'t , : i le r t : ,i. :tt i --nitii in d<i: in t ti a :t wil t L t at Karita, i. th i n.rth st L L e the~ i<den huin thiirn <pat~r,. ih': are,a pr Ilta n ti.e: ialf' Jakan'L mxai ndata ra te i te pr :xt ion ofI 1:au i' meirtal e hemi 'al: Ph~ iuu. lant il. ve 1?atIi at Mie n Ie Pay in tral Japah. !t i LI orI i ::'t ~ , i wkd t t prmcow t r plant w i h :2:.rvt iré * d . Th C t vAln tl itI kmf :g rya and. 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