Announcement of World Bank Lends Eight Million Eight Hundred Thousand Dollars for Engineering Project in Peru on November 2, 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. 79/17 NOVEMBER 2, 1978 WORLD BANK LENDS $8.8 MILLION FOR ENGINEERING PROJECT IN PERU The World Bank announced today the approval of an $8.8 million loan to help finance a water supply and power engineering project in Peru. The project will lay the basis for a long-term solution to Lima's water supply problems and for an expansion of the electric power generating capacity in Peru's central region. The project will include studies and programs for a more effective water distribution and sewerage system for Lima and will determine the technical and economic feasibility of transferring water from the Mantaro River across the continental divide to Lima. The project's total cost is estimated at $11.1 mi 11 ion. The Empresa de Saneamiento de Lima (ESAL), Lima's government-owned water company, will carry out the first part of the project. This component includes the assessment of water resources and demand in the Lima metropolitan • area; development of a water supply and sewerage master plan; a metering and leak detection and correction program; preparation of a future water supply project; and strengthening of ESAL's organization, management, and finances. In 1977, ESAL provided water and sewerage services to about 2.9 mil lion people, or 71% of Greater Lima's population. Another 230,000 people are served by private wells outside the ESAL system. An estimated one mill ion people do not have access to piped water or sewerage services and depend on water delivered by trucks or from public standpipes. The Mantaro Transfer would entail pumping of up to 32 cubic meters per second from the Man taro River -- a tributary of the Aniazon -- through the existing Transandean Tunnel to the Santa Eulalia River. It would be used for power generation and would also ensure Lima's water supply until the end of the century. The $8.8 million loan to the Republic of Peru will have a term of 10 years, including two and a half years of grace, with interest at 7.35% per annum. NOTE: Money figures are expressed in U.S. dollar equivalents • • FORM NO. 1121 (5-76) T ECHN I CAL DAT A PROJECT: COUNTRY: Water Supply and Power Engineering Peru • TOTAL COST: $ 1 l • l mi 1 1 i on BAN KF! NAN CI NG : $8.8 million for a term of 10 years, including 2-1/2 years of grace, with an interest rate at 7.35% per annum. OTHER FINANCING: Government of Peru, $1.07 mi::ion Empresa de Saneamiento de Lima (ESAL), $1.23 million IMPLEMENTING ORGANIZATION: 1) Empresa de Saneamiento de Lima (ESAL) Avenida Venezuela 812 Brena~ Lima, Per6 2) Comision Multisectorial del Transvase del Rfo Mantaro c/o Ministerio de Vivienda y Construcci6n Jiron Domingo Cueto 120, 8£ Piso Jesus Marfa, Lima, Per~ PROJECT DESCRIPTION: .c It will establish the basis for a long-term solution to Lima 1 water supply problems and update studies for a major hydropo~ plant. Its elements are: a) The ESAL Component: Assessment of water resources and demand in the Lima metropolitan area -- including a leak detection, correction and metering progran1; development of a water supply and sewerage master plan; preparation of a future water supply project; and strengthening of ESAL's organization, management,and finances. b) The Mantaro Component: Completion of studies for the Mantaro Transfer and Sheque hydro- electric projects which would expand generating capacity in Peru's central region and assure Lima's water supply in the long term. PROCUREMENT: Equipment and meters will be procured under international competitive bidding, except in cases, such as pipes and fittings for the leak repair program, where contracts would be too small to make inter- national bidding practical. When international bidding is used, local manufacturers will be allowed a margin of preference of either 15% of the CIF price or the applicable import duty, whichever is lower. Contracts of less than $50,000 and for an aggregate maximum of $500,000 will be awarded according to ESAL's normal procurement procedures, which require at least three quotations. CONSULTANTS: An estimated 1,100 man-months of consulting services will be required. Studies under the project will be carried out by qualified consultants, selected in accordance with Bank guidelines. A British consulting firm, Binnie & Partners, has been selected to carry out the Mantaro Transfer component • ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: n.a. 1981 • - 0 -