Announcement of World Bank Resumes Operations in Portugal with Thirty-Six Million US Dollars Loan for Power on June 28, 1976

•world Bank 1818 H Street, N.W. 1 Washington, D.C. 20433, U.S.A. • Telephone: (202) 393·6360 BANK NEWS RELEASE NO. 76/90 June 28 , 1976 WORLD BANK RESUMES OPERATIONS IN PORTUGAL WITH $36 MILLION LOAN FOR POWER A World Bank loan of $36 mi 1 lion for power development in Portugal marks the re1umption of Bank operations in that country, it was announced today. The loan will be the sixth for the Portuguese power sector, and the first since 1966. It will be made to Electricidade de Portugal-Empresa Publica (EdP), an autonomous national power enterprise which will commence operations on July 1, 1976 under a recently approved charter. The five projects previously supported by the Bank have been completed and are in operation. The power project now being assisted by the Bank is the 1976-78 tra:.che costing $1,124 million of a 10-year investment program for the sector designed • to improve and increase generation capacity and transmission and distribution facilities. The financing plan for the project includes a loan of $40 million by the European Investment Bank, other foreign and local loans, supplier credits, Government equity participation in EdP, and cash generation. At completion in 1986, the overall program will provide electricity for industriai and domestic consumers through an integrated power sector. The project will be executed by EdP. In addition to related transmission and distribution faci 1 ities, the project includes about 3,300 MW of new generation capacity comprising 47% of hydroelectric plan and 53% of thermal power plant. The added generating capacity is expected to permit EdP to engage in mutually advantageous power exchanges with other European countries through a 400-kV tranmission line between Portugal and Spain to be constructed under the project to improve the existing interconnections. The World Bank loan of $36 million is being made to EdP with the guarantee ~f the Republic of Portugal, for a term of 15 years, including tt1ree years of grace, with interest at 8.85% per annum . • NOTE: Money figures are expressed in U.S. dollar equivalents. FORM NO. 1121 (5-76) T E C HN I CA L DAT A PROJECT: COUNTRY: TOTAL COST: Sixth Power Portugal $1,124 million • BANK FINANCING: $36 mi 11 ion, 15 years includ.ing three years of grace, 8.85% annual interest. OTHER FINANCING: European Investment Bank (EIB) loan, $40 million, Government equity participation and internal ca5h generation, $347 million; local loans, $605 miilion, foreign loans and supplier credits, $9 6 mi l 1 ion. IMPLEMENTING ORGANIZATION: Electricidade de Portugal - Empresa Publica Lisboa, Portugal PROJECT DESCRIPTION: The project consists of the1976-78 tranche of the company's investment program foj the years 1976 through 1986 to improve generation, transmission and distribution facilities. The project includes about 3300 MW of new capacity- of which 47% will be hydroelectric power, 53% • the rma 1 power. PROCU.REMENT: All contracts for works to be financed by the Bank wi 11 be awarded after international competitive bidding consistent with Bank's "Guidelines for Procurement 11 and the list of goods agreed for the project. Domestic bidders wi 11 have a 15% margin of preference or applicable duties, wh i ch eve r i s 1owe r. CONSULTANTS: Consulting services will be contracted for assistance with engineering and studies related to the program, if needed. ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 8. 3% 1979 • • - 0 -