Announcement of World Bank Lends Thirty Million Five Hundred Thousand Dollars for Power Project in Honduras on November 16, 1978

" FOR IMMEDIATE RELEASE, World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 79/21 November 16, 1978 WORLD BANK LENDS $30.5 MILLION FOR POWER PROJECT IN HONDURAS The World Bank approved a $30.5 million loan to help finance the Nispero Power Project in Honduras. The project will help to meet Honduras' electricity requirements through 1983 and will make public service available to low-income areas in the western part of the country. 'The Nispero Power Project wi 11 have an estimated total cost of $58 million. The project comprises the construction of a 22.5 megawatt (MW) hydroelectric plant on the Palaja River, near the town of Nispero, and a 30 MW diesel plant at Puerto Cortes, on the Atlantic Ocean. It will also expand the distribution system to new areas in Tegucigalpa, San Pedro Sula, La Ceiba, Tela, El Progreso, and Puerto Cortes. The project will cover Honduras' electricity requirements during • 1980-1983, while, if present plans are carried out, the large hydroelectric project of El Cajon, with a potential of 1,300 gigawatt-hours per year, would be built to meet the needs for power over the remainder of the 1980s. The Nispero project will also help to strengthen the Empresa Nacional de Energ(a Elictrica (ENEE) 's management and capacity, and to improve the energy sector organization. Five studies of the sector--among them a national electrification master plan--are included in the project. With about· 158 k i 1owatt-hours per capita, Honduras has the lowest primary energy consumption of the five Central American republics. ENEE provides almost 100% of the public electricity service in the country and currently serves about 21% of the total population. The $30.5 million loan to ENEE, with the guarantee of the Republic of Honduras, has a term of 20 years, with a five-year g~3ce period and an interest rate of 7.35% per annum. This is the seventh Bank operation with ENEE. The Central American Bank for Economic Integration (CABEI) is expected to provide two loans totaling $3.5 million for the Nispero hydro .project engineering studies and distribution works for the 1980-1981 period. ENEE has also a1r~ady negotiated suppliers credits of $6.7 million to help finance the project . • NOTE: Money figures are expressed in U.S. dollar equivalents. FORM NO. 1121 (5-76) T ECHN I CAL D A T A • PROJECT: Ni spero Power COUNTRY: Honduras TOTAL COST: $58 million BANK F r NANC ING : $30.5 million for a term of 20 years, including a grace period of 5 years, with interest at 7.35% per annum. OTHER FINANCING: Central American Bank for Economic Integration (CABEI): $3.S million. Suppliers Credit: $6.7 million. Empresa Nacional de Energ(a Elictrica (ENEE): $17.3 mj 11 ion. IMPLEMENTING ORGANIZATION: Empresa Nacional de Energfa Elictrica (ENEE) Apartado 99, Tegucigalpa D.C., Honduras Cable address: ENEE, Tegucigalpa D.C., Honduras PROJECT DESCRIPTION: It consists of (a) Nispero 22.5 megawatt (MW) hydro- electric plant in western Honduras and its substation connection; {b) Puerto Cortes 30 MW diesel plant and connection at Puerto Cortes substation; (c) extension of ENEE's primary distribution system in new areas in Tegucigalpa, San Pedro Sula, La Ceiba, Tela, El Progreso,and Puerto Cortes; instal- • lation of capacitors to reduce transmission and distribution losses; provision of metering equipment for load surveys and management; ~d) study of energy sector organization; study of ENEE management systems, organization and trafning needs; national electrification master plan; hydropower inventory updating; prefeasibility study at Piedras Amarillas hydro project;and (e) training of ENEE management and staff. PROCUREMENT: All equipment, materials,and services financed by the loan will be procured through international competitive bidding (ICB), following the Bank's guidelines .. Loc,:Jl suppliers will be given a margin of preference of 15%, or the applicable import duty, whichever is lower. To avoid delaying the installation of the Puerto Cortes diesel plant, the Bank in mid-1977 agreed that ENEE could initiate the!r procurement, and bids under ICB were received in November 1977. ENEE awarded the contract to Alsthom (France) in August 1978. CONSULTANTS: About 328 man-month of consulting services will be required to carry out the five studies included in the project. ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 9% 1982 - 0 - •