Guatemala - Chixoy Power Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 1709h-GU STAFF APPRAISAL REPORT GUATEMALA CHIXOY POWER PROJECT June 15, 1978 Regional Projects Department Latin America and the Caribbean Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Currency Unit = Quetzal (Q) Q 1.00 = 100 centavos = US$1.00 ACRONYMS CABEI = Central American Bank for Economic Integration CEL = Comisi'n Ejecutiva. Hidroelectrica del Rio Lempa (El Salvador) EEG = Empresa El-ctrica de Guatemala, S.A. FIV = Fondo de Inversiones de Venezuela INDE = Instituto Nacional de Electrificacion IDB = Inter-American Development Bank LAMI = Lahmeyer-Motor Columbus - International Engineering Co. UNITS AND MEASURES kW = kilowatt MW = megawatt = 1,000 kW kWh = kilowatt hour GWh = gigawatt hours = 1,000,000 kWh kV = kilo volt MVA = mega volt-ampere m = meter = 3.28 feet km = kilometer = 0.621 mile kcal = kilocalories = 1,000 calories FISCAL YEAR INDE's fiscal year ends December 31 FOR OFFICIAL USE ONLY GUATEMALA STAFF APPRAISAL REPORT ON THE CHIXOY POWER PROJECT TABLE OF CONTENTS Page No. 1. THE SECTOR.............................................. 1 Energy Consumption and Resources...................... 1 Power Sector.......................................... 2 Prior Bank Involvement in the Sector.................. 2 Sector Review......................................... 4 System Expansion and Planning......................... 4 Organization and Management........................... 5 Tariffs and Finances.................................. 7 Service Extensions.................................... 7 Future Expansion...................................... 8 2. THE BORROWER............................................ 9 Organization and Management........................... 9 Accounts and Audit.................................... 10 Figure 2.1 INDE's Organization Chart................ 11 3. THE MARKET .............................................. 12 Load Forecast......................................... 12 Energy and Capacity Balance........................... 13 Table 3.1 Sector Energy Requirements................ 14 Table 3.2 Energy and Capacity Balance............... 15 4. PROGRAM AND PROJECT..................................... 16 The Program........................................... 16 The Project........................................... 19 Project Objectives.................................... 19 Project Features...................................... 19 Project Cost.......................................... 21 Engineering and Project Execution..................... 23 Procurement and Disbursement.......................... 24 Environment........................................... 25 Project Risk.......................................... 26 Table 4.1 Sector Investment Program................. 27 Table 4.2 Project Implementation Schedule........... 28 Figure 4.1 Project Construction Schedule.-(End of Chapter 4) Figure 4.2 Map IBRD 12449R.........** *(End of Chapter 4) Figure 4.3 Map IBRD 13048...............*(End of Chapter 4) 5. FINANCES................................................ 30 Background............................................ 30 Past Earnings and Financial Position.................. 30 Financing Plans....................................... 33 Future Earnings and Financial Position................ 35 Performance Indicators................................ 37 This report was prepared by Messrs. C.F. Mena and C. Warren. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. - ii - Table of Contents (Cont'd) Page No. Table 5.1 Power Sector-Key Financial indicators......... 38 Table 5.2 Power Sector-Investment and Financing Program (1978-1982).................................. 39 Table 5.3 Power Sector-Consolidated Income Statement and Sources and Uses of Funds.................... 40 Table 5.4 Power Sector-Consolidated Balance Sheets (1971-1983) and Forecast Tariffs............. 41 6. ECONOMIC ANALYSIS........................................... 42 Least-Cost Solution....................................... 42 Return on Investment...................................... 43 Table 6.1 Cost Streams-Least-Cost Comparison with Mixed Thermal/Hydro Alternative.................... 44 Table 6.2 Cost and Benefit Streams-Rate of Return....... 45 7. SUMMARY OF PROPOSED AGREEMENTS AND RECOMENDATIONS.......... 47 ANNEXES ANNEX A Table Al INDE's Income Statements and Sources and Uses of Funds Table A2 INDE's Balance Sheets and Debt Statement Table A3 EEG's Income Statement and Sources and Uses of Funds Table A4 EEG's Balance Sheets and Debt Statement Table A5 Power Sector Borrowing Terms Table A6 Power Sector Fuel Expenditures, 1977-1983 Table A7 Power Sector Performance Indicators ANNEX B Selected Documents and Data available in the Project File GUATEMALA STAFF APPRAISAL REPORT CHIXOY POWER PROJECT CHAPTER I THE SECTOR Energy Consumption and Resources 1.01 Gross energy consumption in Guatemala, although accelerating sub- stantially in recent years (from an average growth rate of 3.9% p.a. in the 1960's to 4.7% p.a. in 1970-75 is still at a low level by Central American standards. It amounted to 2,080 M.T.o.e. 1/ (0.34 T.o.e. per capita) in 1975, which is about one-quarter of the highest national consumption level in the area (1.22 T.o.e. per capita in Panama) and well below the regional average (0.49 T.o.e. per capita). This reflects the fact that about 40% of the population has yet to be integrated into the modern sector of the economy. While commercial energy (petroleum derivatives and hydroelectricity) has been growing in importance, a high proportion of total consumption (46% in 1975) was derived from traditional energy sources (wood and bagasse). Total gross consumption of electric energy generated by public utilities and self producers is estimated at 1,140 GWh (about 188 kWh per capita) in 1975. 1.02 Thus far Guatemala has had to import all of its petroleum fuels. However, spurred on by major oil discoveries in southern Mexico and the en- ergy crisis, exploration for oil and gas by private oil companies was inten- sified and commercial finds have been recently reported. Unfortunately, the oil discovered so far is apparently high in sulfur and paraffin content, making it unsuitable (without special processing) for use in the existing refinery in Guatemala. On the other hand, Guatemala has a large, technically exploitable hydroelectric potential which has recently been calculated at 4,300 MW. This contrasts sharply with 121 MW (2.5% of the potential) in installed hydroelectric capacity. Moreover, being a country with geological characteristics similar to El Salvador's and Nicaragua's -- where geothermal potential is being either successfully defined or exploited -- Guatemala may also have an exploitable geothermal potential. A comprehensive exploration program recently completed in the Moyuta geothermal field disclosed that it could not be economically exploitable for power generation. Nevertheless, the exploration program continues in other potential fields (Zunil and Amatitlan). 1.03 Consumption of electric energy generated by public utilities increased from 370 GWh in 1966 to 906 GWh in 1976, representing an average growth rate of 9.4% p.a. The main factor contributing to this growth rate has been the substantial development of the industrial sector which in 1976 accounted for 47% of the total power consumption, while residential consump- tion amounted to 26%. The remainder, 27%, was absorbed by the commercial and government sectors. The relative market share of the industrial sector is expected to continue to grow during the project period, as shown below for sales in the central interconnected system, which represents 85% of the total market: I/ T.o.e.: tons of oil equivalent, approximately 107 kcal. M.T.o.e. = 1000 T.o.e. - 2- Actual Forecast 1966 1976 1982 GWh % GWh % GWh % Industrial 147 42 359 47 632 50 Residential 107 31 197 26 290 23 Commercial, municipal, and governmental 95 27 212 27 341 27 349 100 768 100 J 63 100 Power Sector 1.04 The power sector consists of Instituto Nacional de Electrificacion (INDE), Empresa Electrica de Guatemala (EEG), and numerous (though consider- ably smaller) private and municipal utilities and self-producers. Some of the smaller utilities have their own generating capacity and are not intercon- nected with INDE or EEG systems; the remainder purchase bulk energy from INDE or EEG. EEG, established in 1922 by foreign investors to serve the country's most lucrative market (Guatemala City and its environs) is currently controlled by the Government. INDE was created in 1959 by the Government to serve the rest of the country and to assume responsibility for expansion of power generation. 1.05 The relative shares in total public service generation and sales to consumers in 1976 were as follows: Retail Generation Sales INDE 68% 10% EEG 30% 76% Others 2% 14% Present total generating capacity amounts to 492 MW. Of this, 314 MW (64%) are in the interconnected system located in the southern half of the country; 16 MW (3.3%) correspond to isolated INDE, privately and municipally-owned utilities; and 161 MW (32.7%) belong to miscellaneous self-producers. Prior Bank Involvement in the Sector 1.06 In 1960-62 the Bank served as Executing Agency for a UN Special Fund (UNDP) project consisting of the preparation of a hydroelectric resource survey and master plan for the power sector. Subsequently, the Bank made three loans for the power sector in Guatemala, all to INDE. Loan 487-GU of US$15 million equivalent, signed in March 1967, assisted in financing the 60 MW Jurun-Marinala hydroelectric project and associated facilities, transmission - 3 - lines, installation of a 12.7 MW gas turbine, and some diesel units. The project was completed close to the original schedule; actual construction costs were 12 percent higher than the estimates prepared at the time the project was appraised. The investment in Jurun-Marinala compared with an equivalent thermal plant was found, according to the appraisal report, to be the most economic alternative at discount rates of 10 percent or less; however, due mainly to the subsequent large increases in fuel prices, it will be the most economic alternative even at discount rates higher than 10 percent. 1.07 The second loan, 545-GU of US$7 million equivalent, signed in June 1968, financed the foreign exchange component of a 33 MW steam unit, and site investigations, pre-investment studies and design of the first stage of the Atitlan hydroelectric project. The original site for the steam unit was ruined by a flood in September 1969, after works had already started. The flood revealed that the proposed site lay in an ancient river bed, and works had to be restarted at a new site, involving substantially greater civil works. This incident was the main factor causing a 22-month delay in completion of the unit and a 60 percent cost overrun. Given the delays in preparing hydro- electric projects that had occurred, the 33 MW steam unit was probably the best system addition that could be made at the time. INDE did not achieve the financial rates of return contained in the tariff covenants under the two loans. The poor financial performance has its roots in INDE's weak position vis-a-vis EEG. The Bank appraised a power project in 1972, which did not go forward as a result of a disagreement between the Bank and the Government over a proposed bid award for two thermal generating units, the main components of the project. However, discussions during the preparation of said project led to the development of a new master plan with technical assistance from the Federal Republic of Germany. The priority of the Chixoy project was estab- lished in this plan. 1.08 A project performance audit report prepared by the Operations Evaluation Department on the First and Second Power Projects was distributed to the Executive Directors on February 14, 1975. The main conclusions of this report were that, although the Bank had played a large part in the expan- sion of Guatemala's power supply and in helping to establish INDE as the major institution in the power sector, it could have contributed more to the solution of the two most serious problems in the sector--the poor financial performance arising mainly from the unsatisfactory arrangements between INDE and EEG, and the lack of development of Guatemala's hydroelectric resources. Subsequently, a review of the power sector was carried out in August 1975. The conclusions of this review and of the performance audit guided the prepara- tion of the third Bank loan to INDE. 1.09 Loan 1426-GU (signed in June 1977) provided US$55 million equiv- alent to finance the foreign exchange component of the 90 MW Aguacapa hydro- electric plant and a part of the management consulting services required for INDE's institutional improvement program. All contracts for the Aguacapa project have been awarded and construction of project works is generally on schedule; while delays have been experienced in carrying out the studies included in the project (see paras. 1.21, 2.03, and 5.06), some management consultants have already been hired and the remainder are expected to be hired soon. The assurances obtained under said loan are intended to substantially improve the efficiency of the Guatemalan power sector. Effectiveness of the loan was delayed by five months as a result of delays in implementing an adequate tariff increase and executing an agreement between the Government, EEG, and INDE on bulk tariffs and sector coordination (see paras. 1.17 and 5.06). 1.10 The proposed loan, which would be the fourth operation of the Bank Group with the sector, is also designed to assist INDE in developing its hydroelectric resources by financing the 300 MW Chixoy project, the largest item in Guatemala's 1977-82 power sector investment program. The project was prepared by INDE and its consultants; appraised in March 1977 by a Bank mission composed by Messrs. C.F. Mena, J. Parker, and C. Warren and updated through supplemental missions by Mr. Mena in May and November 1977. Sector Review 1.11 A Bank mission visited Guatemala in August 1975 to review the power sector. The mission's findings were discussed with the Guatemalan authorities in March and July 1976. They are summarized in the following paragraphs, which also report the current status of the Government's actions to increase the power sector's efficiency. System Expansion and Planning 1.12 After the 1960-62 master plan exercise, there was no sound follow-up or long-term planning for the expansion of the system. INDE, which is respon- sible for generation expansion, failed to discharge this function effectively, particularly in project preparation. The development of the country's abun- dant hydroelectric resources fell behind the pace recommended in the master plan. Only 40% of additions in generating capacity since 1962 have been hydroelectric, compared with a recommended 95% in the 1960-1962 master plan. The high thermal component rendered power sector finances vulnerable to the worldwide increase of fuel prices which began in 1973. 1.13 The Government which took office in 1974 adopted as a major policy objective the development of the country's hydroelectric potential and the overall strengthening of the energy sector. The Government's new emphasis coincided with the completion of the first phase of a new master plan for the development of the electric system which was financed by a technical assistance grant from the Federal Republic of Germany. A Master Plan Group was formed which issued its report 1/ in May 1976. The report identifies 121 exploitable hydroelectric projects with an estimated aggregate firm capacity of about 4,300 MW. After a detailed investigation of these projects, 20 hydro and 8 thermal projects have been selected to meet the anticipated load growth through the year 2000. 1/ "Plan Maestro de Electrificacion Nacional, 1977-2000," dated May 1976. -5- 1.14 This work enabled the Government for the first time to base its power investment program on a comprehensive long-range plan. The medium-term program which had been developed from individual project studies was confirmed by the master plan -and includes the 90 MW Aguacapa hydroelectric project for operation in 1979 and the 300 MW Chixoy hydroelectric project for 1982. To fill capacity requirements before Aguacapa comes on stream, the program includes two individual 25 MW gas turbine units (in operation since February 1977) and one 53 MW steam plant (operating since April 1977). The program also called for development of a first (30 MW) geothermal plant at Moyuta by 1981, but since this field has not proved economically exploitable for power generation, the Government has pursued an alternative solution (para 4.01) which would add a net 34 MW of combined cycle plant to generating capability. Organization and Management 1.15 The sector has been marked by conflict between INDE and EEG, both in operating style and outlook. EEG has been relatively well managed. However, despite the acquisition of 93% ownership by Government in 1972, it continues to view its functions rather narrowly. INDE had been less well managed, financially weak and, in particular, had not until recently discharged its responsibility for expanding power generation in an effective manner. 1.16 With the objective of strengthening the sector, Government cre- ated a special commission on sector reorganization in January 1976 to study alternatives for the future organization of the sector and to develop rec- ommendations for action by the Cabinet-level National Economic Commission. The special commission's terms of reference also required it to propose broad policies in the areas of tariffs and the strengthening of INDE. The commission submitted a report to the National Economic Commission in late September 1976. With regard to sector reorganization the report recommends principally that only one entity be responsible for public electricity service, and that INDE absorb EEG's operations as well as those of all other private and municipal electric utilities. In May 1977, prior to reacting to this recommendation and upon the expiration of EEG's concession, the Government declared the company a non-profit, mixed-ownership public utility reporting to the Minister of Economy. 1.17 In connection with Loan 1426-GU, the Government stated its intention to reorganize the sector to develop an improved institutional structure cover- ing generation, transmission and distribution. Although the Government planned to communicate its decision on this matter to the Bank by June 30, 1977, its decision was delayed because of the complex issues involved. The most sensitive of these are the need to reconcile the relatively favorable conditions enjoyed by EEG's unionized employees with INDE's much lower pay scales, and the treatment of EEG's minority shareholders. The discussion on sector organization was also complicated by the upcoming elections. In view of these factors the Government rejected any appearance of Bank review of its decisions on sector reorganization. However, the agreements for Loan 1426-GU contain adequate assurances that sector coordination and finances will be improved. These assurances, which have been reconfirmed under the proposed loan, are summarized below: - 6 - (a) The Government agreed to take all actions necessary to ensure the economic operation of all generating and transmission facilities in the interconnected system. Expansion of these facilities would be based on economically justified programs. (b) The Government agreed to an improved tariff covenant, which specifies targets for consolidated sector revenues (including those of EEG). (c) The Government and INDE have entered into a subsidiary agreement with EEG, providing for: (i) compliance with (a) and (b) above by EEG; (ii) transfer by EEG to INDE of any funds in excess of its own requirements; and (iii) participation of EEG in a tariff structure study, an asset revaluation study and provision of other information required by INDE. (d) INDE agreed not to create or acquire any company if such action would adversely affect its financial condition or the efficiency of its management and personnel; and that any change in INDE's charter, which would materially or adversely affect INDE or the passage of a resolution for the dissolution of INDE, without the agreement of the Bank, would be an event of default. These provisions ensure that there will be adequate consultation between Government and the Bank prior to the implementation of any major decision on organization which might affect INDE. 1.18 A Guatemalan delegation informed the Bank in September 1977, that Government had decided not to act on the recommendation of the special commission on sector reorganization for the present. Instead, it wished to preserve INDE and EEG as separate entities, while moving toward an improved allocation of responsibilities between them. The principal measure now proposed would be the transfer of all EEG's generating plants to INDE. The Government appointed a new study committee to assess the merits of the estab- lishment of a commission to regulate the sector, and prepare the transfer of the plants. The work program calls for two parallel activities: transfer of EEG's generating plants to INDE, 11 by December 31, 1979, and study of sector regulation, scheduled to be completed by March 31, 1978 (if this study were to recommend the creation of a regulatory body, initiation of its functions is scheduled for December 31, 1979). The tasks and schedule of activities of the committee have been found satisfactory by the Bank. The Government agreed to carry out the power sector reorganization and use its best efforts to complete it by December 31, 1979. Government was not able to assume an absolute obligation to complete the reorganization by the indicated date because Congressional approval is required for completion. I/ The possibility of transfering some of INDE's distribution facilities to EEG would also be assessed. -7- Tariffs and Finances 1.19 EEG's concession agreement gave it the power to set tariffs within ample limits and INDE's charter gives it full discretion in this area. In practice, however, tariff increases have been subject to Government approval. Tariffs of the two utilities have been developed independently, without adopting a common focus. EEG's tariffs were reviewed and updated in 1975 and 1978 with the help of consultants, but this was done from the perspective of EEG as a distribution utility, planning only a few years ahead and not con- cerned with overall sector policies. INDE's retail tariff structure has not been changed since 1967. 1.20 In the past, tariffs have not been set at levels sufficient to provide an adequate contribution to sector expansion. Increases in consumer charges in the last two years have not been sufficient to offset increasing operating costs. Consequently, the financial position of the sector has been weak. This situation can only be improved by increasing sector reve- nues. However, because of the bulky nature of the investment program ahead, and since average consumer charges are already relatively high (US 6.57/Wh), it would not be reasonable to raise the substantial funds required solely through tariffs; a blend of tariff increases, borrowings and government contributions would be more appropriate. 1.21 Under Loan 1426-GU Government and INDE agreed to carry out a compre- hensive tariff structure study by January 30, 1978. The conclusions of this study and proposals for implementation would be discussed with the Bank. Because of the need to concentrate on the short-term tariff study carried out in the context of effectiveness of the Aguacapa loan, INDE decided to defer the initiation of the comprehensive tariff structure study. However, INDE has now submitted to the Bank generally satisfactory terms of reference for the comprehensive tariff study and is expected to invite consultants to present proposals within the next 60 days. The report of the consultants would be furnished to the Bank by July 31, 1979. Service Extensions 1.22 Sales of electricity to final consumers totalled 1038 GWh, or about 160 kWh per capita in 1977. In addition to being low by Central American standards, this per capita consumption masks an extremely uneven regional distribution of the electricity load. Consumption per capita in Guatemala City and environs amounted to 456 kWh, which is about 14 times the consumption per capita of 33 kWh in the rest of the country. Of about 6.5 million inhabitants in 1976 only about 20% received electrical service. This figure is among the lowest in Latin America. The Government is aware that electricity must be made available to a greater proportion of the population and, through INDE, it has initiated a series of rural electrification programs to meet this objective. 1.23 To reduce the heavy imbalance in access to electricity between the EEG concession area and the rest of the country, INDE early in 1976 began preparing for the first time a national rural electrification program. Some limited efforts in this area had been initiated in recent years. In 1971, - 8 - the United States Agency for International Development (USAID) with a US$7.0 million loan, financed transmission lines and related substations through the Western Highlands (San Marcos, Huehuetenango and Quiche) and the Northern Lowlands (Baja Verapaz and Alta Verapaz). These transmission lines were connected to distribution systems to serve 61 towns and villages, thereby providing reliable, full-time power to these areas. The transmission network now in place is adequate to serve a large number of other villages as well. INDE has recently built some substations and distribution networks in the eastern part of the country, laying the foundation for further expansion in this area. The new program, preparation of which has now been completed, is designed to expand the rural electrification effort substantially, both in size and in geographical coverage. INDE expects to obtain financing from USAID and the Inter-American Development Bank (IDB) for this program. Since the construction and operation of rural distribution systems are relatively simple and do not require a large number of skilled workers, INDE will have the capacity to expand services to the rural population while construction of large hydro projects is being carried out. The 69 kV subtransmission works to be financed by the proposed loan would complement the rural electrification programs by providing facilities needed to link INDE's existing system with new markets and by strengthening existing lines to support increased transfers and increase service reliability. Future Expansion 1.24 The sector expansion program is described in Chapter 4 and the major installations involved appear on the map. Discussions have been proceeding for the past two years between representatives of INDE and the Comision Ejecutiva Hidroelectrica del Rio Lempa (GEL) of El Salvador concerning a transmission line to tie their electric systems by year-end 1980. Consultants for a feasibility study (Courtoy Traction of Belgium) completed a preliminary report on the line in September 1977, with financing from the Central American Bank for Economic Integration (CABEI). The report shows that the proposed transmission line could prove to be of benefit to both countries. If an agreement is reached between El Salvador and Guatemala, the line could be in operation by year-end 1980. Initially, reserve capacity would be provided by El Salvador to Guatemala, because El Salvador would have available spare capacity to sell outside its market. After 1982, when the Chixoy project is expected to be in operation, the reverse could take place. Both INDE's and GEL's finances should benefit significantly from the proposed interconnection. The Bank would continue to follow the progress of the study in the course of its supervision of the project and of CEL's Ahuachapan Expansion Project (Loans 1288-TES and 1289-ES). CABEI is expected to finance the line. 1.25 In addition to the study mentioned above, the United Nations Eco- nomic Commission for Latin America is conducting a study on the long-range possibilities for interconnection among the Central American countries. INDE and CEL are cooperating in this study; its first stage was recently completed and indicated that an integrated electric system operation would be beneficial. A second stage of the study is currently underway, with financial support from CABEI, IDB and UNDP, which will examine further the potential benefits of an integrated system operation and will attempt to provide a basis for regional sector planning. -9- CHAPTER 2 THE BORROWER 2.01 The borrower would be INDE, a Government-owned autonomous institu- tion responsible for bulk electricity supply and retail distribution outside the area (Guatemala City) supplied by EEG. INDE's Board of Directors is composed of five directors and three alternates, all appointed by the President of Guatemala. Management is entrusted to a General Manager and four Deputy Managers. INDE is exempted from taxes and import duties. Organization and Management 2.02 INDE's organization, which had not changed significantly since the second project was appraised in 1968, is being strengthened. To achieve this objective, INDE's management is currently carrying out a program agreed with the Bank under Loan 1426-GU. The areas covered by this program are the improvement of personnel management, planning, financial management and office facilities and procedures. INDE's recently adopted new organization arrange- ment appears in Figure 2.1 (Organization Chart). 2.03 Under the program mentioned above, INDE has hired an advisor to prepare terms of reference for a personnel upgrading program, introduced improved office procedures and presented for Bank review terms of reference for asset revaluation. These terms of reference were found generally satis- factory by the Bank and the studies are expected to be initiated soon. During the next two years INDE has agreed to reorganize its planning and financial groups into departments and implement new personnel and salary policies. Preparation of the comprehensive personnel improvement program has fallen behind the schedule agreed under Loan 1426-GU, because the personnel advisor was diverted to more urgent matters. These included advising on important day-to-day management problems, such as recent labor unrest, review of salary increases, terminations undertaken to improve efficiency and recruitment of needed construction supervisory staff. The personnel advisor has now prepared terms of reference for management consultants to implement the personnel upgrading program. These consultants are expected to be hired in the fourth quarter of 1978, and new target dates (postponed about a year) have therefore been agreed to complete the various steps of the program. The new personnel management system is expected to be operational by December 31, 1980. The Bank obtained assurances from Government under Loan 1426-GU that INDE's management consultants will base their study on INDE's need to provide compen- sation that would be competitive with other potential employers and that the appropriate Government agencies 1/ would review the consultant's study with the Bank and to discuss with the Bank the proposals for implementing the consultant's recommendations. I/ e.g. INDE, the Civil Service Commission, the Planning Commission, and the Ministry of Finance. - 10 - 2.04 Loan 1426-GU includes US$250,000 to assist INDE in carrying out the asset revaluation, accounting and personnel portions of the improvement program. A further US$200,000 would be provided by the proposed loan for the tariff study (para. 1.21). Accounts and Audit 2.05 While the quality of INDE's accounts is generally adequate, their timeliness needs to be improved. INDE recently acquired an electronic computer to speed data processing and analysis and is expected to hire soon consulting services to train INDE's personnel in modernization of the utility's billing and accounting procedures as well as in the efficient operation of the new computer. INDE's financial statements are audited by a local auditing firm (Lizarralde y Ayestas Asociados) whose work has been satisfactory. INDE should agree to continue appointing independent auditors satisfactory to the Bank and to send to the Bank the audited financial statements together with the auditor's report within four months from the end of each fiscal year. APPRAISAL OF CHIXOV POWER PROJECT INSTITUTO NACIONAL DE EilECTRIFICACION (INDE) ORGANIZATION CHART IIf G L AUINT -.A AUDI G"NERAL MANAGER tast RELTION SECETA.AT DEPUTY MANAGER EPT AAE EUYMANAGER DEPUTY MANAGERn (ADMINISTRATION) IFINANCE1SI -PLANwING& ENGINEEaNGI (CNTaUCTI0N & OPERIAT"OSi ^DMNISIATIVI OTE OPERATIONS MINIARV 66A.IcEs p W.~ .--48 - 12 - CHAPTER 3 THE MARKET Load Forecast 3.01 Acting on the recommendation of the Bank's August 1975 power sector mission, a working group composed of INDE and EEG personnel, prepared early in 1976 a demand and generation forecast for the 1976-89 period. This forecast was evolved by trend analysis of electricity consumption in the country during the preceding 25 years. It assumes an average growth rate in electricity con- sumption of 11.1% p.a. for the country as a whole and a 9.2% p.a. growth rate for consumption in the central area. 1/ These figures are high in view of past growth rates (1972-1977) which have averaged 9.2% p.a. and 7.9% p.a. for the whole country and for the central region respectively. This appraisal assumes growth rates closer to the historical ones. While the central region, which includes Guatemala City, is a fairly well developed market, other areas have low penetration and low levels of consumption. As a result of continuing incorporation of isolated distribution systems into the national interconnected system and INDE's rural electrification programs, energy demand has been increasing rapidly outside the central region. Thus, while in 1972-1977 central region sales grew by 7.9%, combined sales in all other regions grew by 20%. For this appraisal this latter rate of growth is assumed to decrease with time as electrification of towns and rural areas progresses, and in 1987 it is projected at 8.7% as compared to a projected central region growth of 8.1%. For the period 1978-1983 the assumed average sales growth rates are 8.4% for the central region, 18% for the rest of the country, and 9.7% for the whole country. 2/ The resultant generation and power forecasts for 1978-1983 are shown in Table 3.1. 3.02 Not included in the aforementioned growth rate forecasts are the electricity requirements of the nickel mining company, Exmibal, located in the Atlantic coast department of Izabal. This mine has a power plant, consisting of a steam unit (60 MW) and stand-by diesels (10 MW), which use imported fuel. Mining operations have been initiated and the power plant is expected to be generating about 390 GWh per year by 1982 with an annual production of 14,000 tons of 75% nickel matte. Cheaper electric generation may play an important role in the decision on further expansion of Exmibal's processing facilities. Although INDE's system would not have the capability to supply Exmibal until the Chixoy project comes on stream (1982), connection of the Exmibal load to INDE's system should be studied soon. A component of the proposed loan would finance foreign costs of individual transmission line consultants to advise INDE's staff on the preparation of the required study. Since the Exmibal load 1/ The central region consists of the departments of Guatemala, Sacatepequez, Escuintla, and Chimaltenango; in 1976 it accounted for 87% of total electricity consumption. 2/ Sales growth in 1978 is expected to be below the trend in the last five years due to the probable attenuating effect of the tariff increase applied in May 1978. - 13 - represents a large increment in sector demand figures, it has been treated separately in the forecast shown in Table 3.1. Energy and Capacity Balance 3.03 The central interconnected system, which serves about 87% of public service requirements in the country, operated without adequate reserves in the period 1975-1977. INDE had programmed commercial operation of two new 25 MW gas turbine generating units for June 1976 and one 53 MW steam plant for December 1976. The earthquake of February 1976 delayed final procurement arrangements for the gas units as well as delivery to the site of major components of the steam plant which had to be transported through El Salvador because the road from the Guatemalan port (Puerto Barrios) to the site had been severely damaged. Initial testing of the gas units took place in February 1977 but their reliable operation has only recently been obtained, mainly because substantial redesign of principal components has been required. At the same time the Jurun Marinala hydro plant's firm capacity was reduced by 30% due to storage depletion, brought about by a severe dry season and heavy operation to offset inadequate thermal capability. These problems left the system without reserves in generating capacity and long service outages occurred between February and May of 1977, when the new 53 MW steam generating unit went on stream. The situation has since improved and the margin of reserve capacity over peak demand is currently about 44%. The sector energy and capacity balance is shown in Table 3.2. POWER SECTOR SECTOR ENERGY REQUIREMENTS_ (GWh) ACTUAL -------- FORECEACST--T 1976 1977 1978 1979 1980 1981 1982 1983 ENERGY REQUIREMENTS 1/ Central Region 768 2/ 872 924 999 1080 1168 1263 1365 All Other Regions 138 166 203 247 292 345 392 448 Total 906 1038 1127 1246 1372 1513 .1655 1813 Exmibal (Captive Plant) 3/ - 90 230 270 310 350 390 390 SALES INDE - Retail 4/ 138 166 203 247 292 345 392 448 - Bulk to EEG 558 683 811 964 1036 1191 1364 1474 - Total 696 849 1014 1211 1328 1536 1756 1922 EEG - Retail 768 872 942 999 1080 1168 1263 1365 Total Sales 906 1038 1127 1246 1372 1513 1655 1813 GROSS GENERATION 5/ .1045 1214 1295 1432 1577 1739 1902 2084 PEAK-DEMAND (MW) 6/ 200 239 246 272 300 331 362 396 I/ Ercludes requirements covered by private captive plants, (other than E)mibal) but includes requirmento covered by INDE's isolated plants. 2/ Consumption was below average as result of February 1976 earthquake. 3/ Exploraciones y Explotaciones Mineras Izabal, S.A. (Exmibal), a nickel mining enterprise, installed 70 MW in thermal 4/ Includes some small bulk sales to Municipalities. 5/ Losses at 13%. 6/ Load Factor at 60%. - 15 - TABLE 3.2 GUATEMALA - POWER SECTOR ENERGY AND CAPACITY BALANCE ---------------------Forecast-------------------- 1978 1979 1980 1981 1982 1983 GENERATION (GWh) 1295 1432 1577 1739 1902 2084 PEAK DEMAND (MW) 246 272 300 331 362 396 PLANTS Installed Capacit Generation- (MW) (GWh) 1978 1979 1982 INDE Itydro Small (various) 96 96 96 293 290 293 293 293 293 293 Aguacapa 3 x 30 MW 882' 88 395 - 277 395 395 395 395 Chixoy t x 60 MW 2702 1720 - - - - 860 1369 S.b-total 96- 184 4 2408 Thermal Escuintla I (Steam) 33 33 33 190 - - 155 - - Escuintla II (Steam) 53 53 53 329 388 414 420 - - Escuintla 1 & II (Gas) 30 30 30 20 - - - - - Escuintla III & IV (Gas) 50 50 50 141 - - - - - San Felipe (Diesel) 2.5 41 - - - - - - Melendres (Diesel) 1.5 4/ - - - - - _ - Puerto Barrios (Diesel) 3.0 3.0 3.0 10 24 25 26 27 27 Sub-total 173.0 169.0 169.0 TOTAL INDE 269.0 5-3.0 623.0 FFG Thermal Laguna I & II (Steam) 74 - - - - - - - - Laguna II & III (Steam) 26/ - - 187 - - - - - Laguna I (Gas) 125/ - - 13 - - - - - Laguna II & III (Gas) 40 - 115 - - - - Laguna I (Diesel) /- - - - La Castellana I (Diesel) -4- - - - . - Combined Cycle Plant (Gas II & III with Steam 11 & 111) 60 6 - 450 450 450 327 - TOTAL SF0 60 -To- TOTAL SLCTOR 329 413 683 TOTAL GENERATION 1295 1432 1577 1739 1902 2084 INSTALLED CAPACITY (MW) 329 413 413 413 683 683 Largest Unit (m) 60 60 60 60 60 60 Firm Capacity (MW) -26-9 353 35-3 35 3 -623 623 I/ At year-end. 2/ Average Annual. 3/ Firm Capacity. 4/ Retired at year-end. / In combined Cycle Plant (Net 60 MW) - 16 - CHAPTER 4 PROGRAM AND PROJECT The Program 4.01 The sector expansion program is substantially the same one analyzed in conjunction with Loan 1426-GU. However, the proposed Moyuta geothermal plant has been deleted because it did not prove economic and two gas turbines for combined cycle operation at EEG's existing La Laguna plant have been added. The La Laguna extension was originally proposed by EEG to improve system reliability, which appeared poor during the temporary outages described in Chapter 3, and reduce expensive operation of INDE's gas units. In the course of its consultation with the Bank on the proposal, the Government has been able to demonstrate its economic merit. The two 20 MW gas turbine units are proposed to operate in combined cycle with two existing 13 MW steam units, with a resulting total capacity of 60 MW. Through the utilization of a fuel purifier the plant would burn locally produced crude oil instead of the much more expensive diesel fuel. The proposed units could be in full operation by year-end 1978 and could produce annual savings averaging about US$3 million at present prices (15% of total fuel expenditures) until Chixoy begins commercial operation. The Bank concurred in the investment after the Government agreed that EEG's existing generating plants, which are inefficient, should be retired, and on the understanding that the proposed new plant would be transferred in property and operation to INDE by year-end 1979 (when sector reorganization is expected to be completed), in order for INDE to maintain its role of bulk supplier. 4.02 The sector's expansion program during the period 1977-1982 consists of the following works (see Figure 4.2 - Map IBRD 12449R): INDE (a) Generation: - Aguacapa hydro plant - 90 MW (1979) I - Chixoy hydro plant - 300 MW (1982) - Improvements on small hydro plants (b) Transmission: Lines: - Escuintla - Guatemala Sur, 43 km, 2 circuits, 230 kV (1979) - Guatemala Sur - Guatemala Norte, 30 km, 2 circuits, 230 kV (1981) - Aguacapa - Escuintla, 23 km, I circuit, 230 kV (1979) - Guatemala - El Salvador, 105 km, 1 circuit, 230 kV (1980) 2/ I/ Parentheses indicate expected commissioning dates. 2/ Subject to confirmation of its economic merits. Feasibility reports under review by INDE and GEL. - 17 - - 300 km, 1 circuit, 69 kV and lower (1981) - Guatemala-Chimaltenango, I circuit, 69 kV (1979) Substations: - Escuintla expansion, 100 MVA, 230/138 kV (1978) - Guatemala Sur, 150 MVA, 230/69 kV (1979) - Guatemala Norte, 300 MVA, 230/69 kV (1980) (c) Distribution: - Ongoing low-voltage system expansion (d) Rural Electrification:- Ongoing program (1978) - El Peten, Altiplano, and Southwestern regional programs (1982) (e) Studies: - Future generating and transmission facilities (f) Building: - New headquarters for INDE's central offices in Guatemala City (1980) EEG (a) Generation: - Combined cycle plant - 60 MW (1978) (b) Distribution: - Ongoing system expansion 4.03 These works call for an investment of US$557.2 million during the period 1978-1982, summarized as follows (for details see Table 4.1 - Sector Investment Program): - 18 - US$ millions INDE A. Ongoing and continuing works: a. Aguacapa hydroelectric project 74.0 b. Small hydro improvements 0.8 c. Transmission expansion (Escuintla-Guatemala Sur- 43 km, Guatemala Sur substation) 8.1 d. Subtransmission expansion (69 kV) 16.7 e. Distribution expansion 6.1 f. Chimaltenango subtransmission 1.0 g. Studies 32.4 Sub-total A 139.1 B. The Project a. Chixoy project works (total cost US$354.7 million) 273.8 b. Subtransmission expansion (69 kV) 17.7 c. Consulting services 0.3 Sub-total B 291.8 C. Future Works: a. Transmission expansion (Guatemala Sur-Guatemala Norte-30 km, Guatemala-El Salvador) 14.9 b. Guatemala Norte substation - 300 MVA 15.8 c. Escuintla substation - 100 MVA 2.9 d. Rural electrification (El Peten, Altiplano, and Southwestern regional programs) 50.7 e. Headquarters building 6.4 Sub-total C 90.7 Sub-total (INDE) 521.6 EEG A. Ongoing and continuing works: a. Combined cycle plant 6.7 b. Distribution system expansion 28.9 Sub-total (EEG) 35.6 Total 557.2 The financing plans for these programs are discussed in Chapter 5, Finances. - 19 - The Project 4.04 The project comprises the major component in INDE's construction program, its Chixoy project (see Figures 4.2 and 4.3 - maps), as well as subtransmission expansion and studies. IDB,Fondo de Inversiones de Venezuela (FIV) and CABEI have already provided substantial financing for Chixoy; preliminary works of the Chixoy project were initiated early in 1976 and the major civil contract (for the tunnel) was awarded in May 1977 to Hochtief A.G. (Germany). This contract is being financed by IDB and FIV. Project Objectives 4.05 In order to maintain adequate service reliability of the inter- connected system, additional capacity will need to be operational by 1982. The Chixoy plant will provide the additional capacity required by utilizing Guatemala's hydroelectric resources. The commissioning of Chixoy will make possible a substantial reduction in thermal generation, thus reducing the country's dependence on imported fuel. The 69 kV subtransmission facilities would complement the rural electrification programs by providing the means to link INDE's existing system with new markets and by strengthening existing lines to support increased transfers and increase service reliability. The proposed loan will allow the Bank to participate in the financing of this needed project and, equally important, to continue assisting Government in the implementation of sector reforms and the institutional strengthening of INDE. 4.06 A reliable supply of electric power is essential to Guatemala's economic growth and the improvement of the standard of living of its popula- tion. Industry is the largest consumer of electricity in the country (para. 1.03). While the future needs of the largest industrial enterprises could be met with captive generation rather than through INDE's system, medium and small-scale industries would in many cases find this alternative excessively costly. In addition, this approach would be wasteful of the country's resour- ces, since it would result in duplication of investment and retain reliance on costly fuel. The project, therefore, is expected to facilitate the devel- opment of medium and small-scale industrial activity in the country. Project Features 4.07 The Chixoy plant site is located in the department of Alta Verapaz, in the country's central region and about 100 km north of Guatemala City see Figure 4.2 - map IBRD 12449R). The climate of the area is temperate (150-230C temperature) and humid (1,000 mm average annual rainfall) and the sparse population, dependent on subsistence agriculture and living in the nearby mountains, plant vegetables, beans, and corn. This zone is located in the northern mountain group, composed of metamorphic and igneous intrusive rocks and a thick layer of sedimentary rocks, where the Chixoy river flows. This river is the main tributary of the Usumacinta, the largest river in the country which also serves for part of its length as the boundary between Guatemala and Mexico. However, as the Chixoy project would not divert any water from the Usumacinta or adversely affect its regime (except for an - 20 - insignificant reduction during the six-month period of reservoir filling), the project would not adversely affect the downstream riparian state (Mexico). The rainy season starts in May and ends in October. During reservoir filling which, at the earliest, would start in February 1981 and would not extend beyond the end of the rainy season, the average annual flow of the river at the Mexican border point is not expected to be r duced by more than 10% (the tributary area to the Chixoy reservoir--5,700 km --represents no more than about 6% of the total Usumacinta watershed). The proposed hydroelectric development of the Chixoy river would be carried out by damming its course and conveying the impounded waters through a 25.6 km tunnel and a drop of 550 meters to obtain 300 MW of power. The project's principal works are described below, with the financing source involved for each principal component: (a) Generation (see Figure 4.3 - Map IBRD 13048): - rockfill dam 108 m high with a volume of 2.8 million cubic meters that would form a reservoir with a volume of 424 million cubic meters. The dam would be located about 57.5 km upstream of the confluence of the Chixoy and Quixal rivers (80 km north of Guatemala City) -- IBRD; - power tunnel 25.6 km long, concrete lined, 4.8 m in diameter, to develop a gross head of 550 m -- IDB; and - surface powerhouse with 5x60 MW generating units driven by vertically mounted Pelton turbines -- IDB and suppliers' credits. (b) Transmission -- IBRD: - step-up substation (400 MVA, 13.8/230 kV); - 230 kV double circuit transmission line to Guatemala City (120 km); and (c) Subtransmission lines and substations (69) kV, construction of which would be initiated by January 1, 1979 and completed by December 31, 1981 -- IBRD; (d) Engineering and studies: - Engineering and construction supervision for Chixoy -- IDB; - individual transmission line consultants (para 3.02), 13 man months -- IBRD; and - tariff study (para 2.04), 28 man months -- IBRD - 21 - 4.08 The dam will be designed to prevent uncontrolled release of the reservoir under a maximum credible earthquake (MCE) of 7.7 magnitude; 1/ waich will result in peak horizontal ground accelerations of 0.69 g and a diration of strong shaking of 33 sec at the dam site; under operating basis earthquake (OBE) the works would safely function under a peak horizontal acceleration of 0.3 g. Spillway design will allow discharge of a maximum flood with recurrence period of 1 in 10,000 years (spillway peak discharge of 4,000 m3/sec), while maintaining a minimum free-board in the dam of 1.5 m. With a probable high sedimentation rate of 977 cubic meters per square kilometer, the expected useful reservoir life would be about 200 years. The tunnel siphon, located about 8 km downstream of the dam, will be designed for safe shutdown after a potential displacement of 3.5 m horizontal and 1.0 m vertical along the Polochic-Chixoy-Cuilco fault (see Figure 4.2--map) during the postulate MCE. The works, designed with these criteria, should behave reliably and safely under the worst foreseeable conditions. 4.09 The transmission system arrangement as well as sizing and siting of substations proposed by INDE and its consultants is adequate for the system and within acceptable levels of voltage regulation, losses and reliability. On completion of the project, the ratio of step-down substation capacity to maximum demand at INDE's points of delivery in the Central system would have increased from a relatively low 1.10 to a more adequate level of 1.25. In the remaining systems served by INDE alone, the ratio would range from 1.25 to 1.5, which is satisfactory. EEG has programmed the expansion of its distribu- tion substations in coordination with INDE's substation expansions and the adopted incremental transformation capacities in EEG's system would provide correspondingly adequate reserves and reliability. The envisaged improvement in reserve capacity indicates that reliability would be substantially improved without overinvestment. Froject Cost 4.10 The project's estimated cost is US$372.7 million, with a US$204.1 willion foreign component. Total financing requirements, including interest during construction, are US$414.1 million, as shown in the following table. ]/ The February 1976 earthquake had an estimated magnitude of 7.5. - 22 - -- million of US$ and Q -- Foreign Local Total Infrastructure 11.03 9.42 20.45 River diversion 3.77 2.11 5.88 Dam and spillway 24.76 11.97 36.73 Power tunnel 60.07 63.15 123.22 Powerhouse 8.71 13.05 21.76 Turbines 11.57 1.00 12.57 Generators and transformers 9.83 1.00 10.83 Hydromechanical equipment 5.25 0.60 5.85 Transmission system 11.04 1.96 13.00 Subtransmission expansion 12.25 2.07 14.32 Engineering and administration 7.31 21.43 28.74 Other consulting services 0.30 - 0.30 Sub-total 165.89 127.76 293.65 Physical contingencies 18.77 23.68 42.45 Price contingencies 19.42 17.16 36.58 Total Costs 204.08 168.60 372.68 Financing charges during construction /1 41.40 - 41.40 Financing requirements 245.48 168.60 414.08 /1 Interest and other charges on Bank, CABEI, IDB, and other loans. 4.11 The Chixoy project components, other 1978-1982 expansion program components, and corresponding expenditures to be financed with the proposed Bank loan are shown below: -- million of US$ and Q -- Foreign Local Total Dam and spillway 24.76 11.97 36.73 Transmission system 11.04 1.96 13.00 Subtransmission expansion 12.90 2.30 15.20 Consulting services 0.30 - 0.30 Sub-total 49.00 16.23 65.23 Physical contingencies 4.64 5.65 10.29 Price contingencies 7.56 3.33 10.89 Financial charges during construction 10.80 - 10.80 Total 72.00 25.21 97.21 - 23 - Financing of interest on the Bank loan during construction is proposed in order to alleviate the heavy financial strain caused by INDE's large invest- ment program, which is far in excess of its revenue-generating capacity based on its present assets. INDE will have to obtain substantial additional financing for the program and is already expecting a high level of Government financing. It would, therefore, not be reasonable to expect that the finan- cial charges on the Bank loan during the construction period be financed by sources other than the Bank. 4.12 The above costs are based on September 1977 prices and, with the exception of the transmission system, and subtransmission lines and sub- stations, on actual contracts for project works. Costs for the items not yet contracted were based on recent (October 1977) estimates by INDE's staff and consultants, LAMI. 1/ All base costs are reasonable and physical contingency allowances of 5% for equipment, 10% for minor civil works, and 24% for the dam and tunnel are adequate. The physical contingengy allowance for the dam is sufficient to cover the mean in the range of estimates by LAMI and INDE's Board of Consultants 2/ of the additional costs for foundation excavation and treatment that could be required, in case subsurface conditions prove to be less favorable than expected. The physical contingency allowance for the tunnel is based on a probability analysis made by Bank staff. 4.13 Allowances for price increases have been added to the cost estimate using the following annual escalation: International Local 1978-79 7.5% 9% 1980-82 7% 8% Engineering and administration expenditures reflect an existing contract 3/ between INDE and LAMI for design engineering and construction supervision of the project. The amount of foreign consulting services proposed for Bank financing has been estimated on the basis of an average cost of US$4,750 per man-month (excluding travel and subsistence). All these costs are reasonable. Engineering and Project Execution 4.14 All engineering phases of the Chixoy project are being carried out by LAMI who will also perform construction supervision. INDE expects to execute the project by contracting all major works, as well as the supply and instal- lation of equipment. During project execution INDE will receive advice from its Board of Consultants on all phases of final design and construction. 1/ Consulting engineering joint-venture of Lahmeyer International (Germany), Motor Columbus (Switzerland) and International Engineering Company (USA). 2/ Messrs. J.W. Hilf, Phd (soils); J.S. Libby, Phd (hydraulic structures); and A.H. Merrit, Phd (geology); who are well known U.S. authorities in their respective fields. 3/ Financed by IDB. - 24 - 4.15 The Chixoy project is expected to be in commercial operation by June 30, 1982. Table 4.2 contains the project implementation schedule, which will serve as a basis to monitor project progress. Figure 4.1 shows the project's construction schedule. Procurement and Disbursement 4.16 Procurement of equipment, materials and construction services to be financed by the Bank for the project will be through international competitive bidding (ICB) in accordance with Bank procurement guidelines. In order to meet INDE's construction program for the project, the diversion works had to be initiated before the 1977 rainy season (June to October). Although con- struction of the main dam could be started a year later, the possibility existed that contractors would tend to bid lower for the combined works (diversion and main dam) than if they were tendered separately. On this assumption, INDE requested that advance bidding for the main dam be allowed. The Bank accepted, under the condition that contract signing for the dam would only take place after Bank approval of the proposed loan. The bidder with the lowest evaluated responsive bid for both diversion and the dam was COGEFAR (Italy). INDE, in April 1977, with Bank concurrence issued a letter of intent to COGEFAR to sign both contracts. River diversion work has already commenced and is being financed by INDE. In order not to delay the contractor's mobil- ization for main dam construction INDE has already given the contractor a down payment for both diversion and the dam (although contract signing for the dam would not take place until the Bank approves the proposed loan). Retroactive financing under the proposed loan for expenses incurred after October 14, 1977, in the amount of approximately US$7 million for the foreign exchange component of the down payment and progress payments for the dam is recommended. Procurement of all other major project items (except for transmission and subtransmission works) has been completed. 1/ 4.17 Disbursements from the Bank loan would be made for: (a) 62% of total expenditures for the dam and spillway (repre- senting the estimated foreign cost component); (b) 100% of the foreign cost of imported equipment and materials for the transmission system and for the subtransmissio7, (69 kV) lines and substations; (c) 100% of the foreign cost of services of consultants and transmission line specialists; and (d) 100% of the financial charges on the Bank loan up to December 31, 1981. I/ Under procedures of IDB, tunnel and powerhouse contracts were awarded in May 1977 to Hochtief (Germany) and ICA (Mexico), respectively. Through ICB, under Guatemalan procurement regulations, contracts were awarded in January and February 1978 for the turbines to Escher Wyss (Switzerland); for generators and transformers to Mitsubishi (Japan); and for hydro-mechanical equipment to SOREFAME (Portugal). - 25 - The following table shows estimated loan disbursements, assuming loan effec- tiveness to be September 30, 1978. Disbursements in million US$ IBRD Fiscal Year During Cumulative at and Semester Semester End of Semester 1979: first (12/31/78) 9.2 9.2 second (6/30/79) 7.5 16.7 1980: first (12/31/79) 12.2 28.9 second (6/30/80) 13.1 42.0 1981: first (12/31/80) 13.7 55.7 second (6/30/81) 7.7 63.4 1982: first (12/31)81) 8.0 71.4 second (6/30/82) 0.6 72.0 The closing date would be June 30, 1982, expected date of Chixoy project works completion and about six months after the estimated completion of the project components to be financed with the proposed Bank loan. Environment 4.18 Studies performed by INDE's consultant ecologists and covering human ecology, flora, fauna, hydrology, and archaeology indicate that the project's environmental effect would not be significant. Although the area to be flooded by the reservoir is sparsely populated, about 1,500 people would need to be relocated; measures would have to be taken to ensure adequate public health conditions in the construction camps; and measures should be taken to safeguard archaeological treasures that could be found. In order to prepare a program to protect the environment in the project zone of influence, Government obtained on January 25, 1977 from the IDB a grant of US$1.51 million for technical assis- tance. This grant would also finance the preparation of a program for the economic and social development of the project zone. In order to safeguard the project area's archaeological treasures, INDE signed an agreement in January 1977 with the Instituto de Antropologia e Historia to carry out all required investigations in this area and take appropriate action. With respect to public health, INDE has made official arrangements with the Direccion General de Servicios de Salud and the Instituto Guatemalteco de Seguridad Social. In addition, for the Aguacapa (Loan 1426-GU) and Chixoy project's principal construction camp sites, specific areas for squatter settlement have been defined and basic services will be provided in these areas for water, waste disposal, and security. The Bank has received for review the respective plans for the orderly development of the camp sites and squatters settlements. The environmental protection program to be undertaken is comprehensive. Neverthe- less (in addition to the normal commitment to carry out the project with due regard to ecological matters), the Bank obtained assurances from Government and INDE that a program will be implemented to compensate adequately and, if - 26 - necessary, resettle, those residents (about 1,500) of the area to be flooded by the reservoir whose living and working conditions have been adversely affected by such flooding. INDE will prepare such a program and present it for Bank review by December 31, 1979. In order to effectively control erosion in the watershed contributing to the proposed Chixoy reservoir, INDE will prepare a suitable program and present it to the Bank for review also by December 31, 1979, and Government will start to implement it by June 30, 1980. Project Risk 4.19 All bids received for the project have confirmed that INDE's project construction schedule is attainable, although somewhat optimistic. Under its present schedule, INDE expects commercial operation of the Chixoy plant by October 1981. Considerable and comprehensive geologic investigations have been carried out and the tunnel contractor is financially liable if, under normal circumstances, the tunnel is not completed by August 1981. Nevertheless, considerable risks are involved in constructing a tunnel of this length (25.6 km), under unfavorable geological conditions (heterogeneous and karstic formations) and with only three headings. Based on the probability analysis performed by Bank staff (para. 4.12), commercial operation by June 1982 appears more likely, and this assumption has been incorporated in the cost estimates and the economic analysis contained in Chapter 6. 4.20 Geophysicists who have studied the effects of the February 1976 Guatemala earthquake are in agreement that its cause appears to have been the movement of lithospheric plates producing a massive rupture along the Motagua fault (see Figure 4.2). Geologic investigations at the site of the proposed Chixoy hydroelectric project have not disclosed adverse effects from the quake; the proposed project works would be located at about 50 km north of the Motagua fault. Another major fault (Polochic-Chixoy-Cuilco), which runs parallel to the Motagua fault and about 50 km north of it, passes within 5.5 km of the site of the proposed Chixoy dam. No relative movements with respect to the Polochic-Chixoy-Cuilco fault have been observed and INDE's consultants have confirmed this through precise geologic surveys recently carried out. In addition to these precautions, the project works will be designed to with- stand severe seismic effects (para. 4.08). INDE's Board of Consultants has reviewed the project's design; the board's recommendations are being imple- mented in final designs and construction procedures for the project works. The Board of Consultants would be retained to advise INDE through project completion. INDE agreed to cause major project works (dam, waterways, earthworks, and reservoir banks) to be inspected periodically in accordance with appropriate engineering practice, in order to determine whether there are any deficiencies or potential deficiencies in the condition of such structures and earthworks which may endanger the safety of such works. - 27 - TABLE 4.1 SECTOR INVESTMENT PROGRAM (Pereign and Loan Costa in Million Q - Us$) ----1978----- ----1979----- ----1980----- -----1981----. .---1982----- TOTAL(1978-1982) Foreign Local Foeign Local Foreign Loc Foreign Local Foreign Local Foreign Local Total INDE I. ON0IN1 AND0 CONTINUING W081KS StAd N U W 2.92 4.85 2.36 3.96 3.81 4.06 1.86 3.36 2.08 3.17 13.03 19.40 32.43 Sorkts 38.45 14.44 6.66 5.64 0.46 0.30 1.26 0.34 2.19 0.37 49.02 21.09 70.11 W or c 1/ 41.37 19.29 9.02 9.60 4.27 4.36 3.12 3.70 4.27 3.54 62.05 40.49 102.54 Prict cnseencies 8.18 7.52 10.53 7.75 0.13 0.10 0.54 0.19 1.18 0.43 20.56 15.99 36.55 Sae-total e49.13 26.81 19.55 17.35 4.40 4.41 3.66 3.89 5.45 3.97 82.61 56.48 139.09 2. ,lUXOY ROJECT WORKS InfrastrAuture 0.55 3.49 - - - - - 1.53 3.16 2.31 laoer1 ivtio143 1.15 1 .43 1:15 2.-50 Lv r d ivloon 4.7 3.67 6.26 4.86 8 06 3 99 4 26 2.28 - - 23.20 14.80 36.08 Damr ann spIlw 18.44 20.17 10.71 11.67 11.09 12.09 8.37 13.55 4.14 4.50 52.75 61.91 114.66 Powerhtune 1.59 2.32 2.16 3.23 1.63 2.40 0.56 0.95 - - 5.94 8.90 14.84 G rot and transformere 1.21 0.13 5.04 0.56 1.92 0.18 1.66 0.13 - - 9.03 1. .93 Turbinmes and govenors 1.71 0.15 4.57 0.40 0.03 0.44 0.26 0.01 - - 10.5 1. Oydromechanical equipm-en 0.53 0.10 2.05 0.21 0.19 020 0.53 009 -60 5.5 - rnrslrytm- - 1.73 0.33 5.91 1 .10 395 07 - - 11.59 2.16 13.75 Tranmision adstel rt· n2 37 3.72 1.32 3.37 1.05 3.44 0.86 3.43 0.35 2.62 5.95 16.58 22.53 Egnerinan 3253 34.83 3379 24.U3 36.88 23.84 20.45 21.17 . 7.12 128.14 011.59 239.73 Dirc cos es 1.09 1.39 3.28 2.94 6.65 4.77 5.01 5.88 1.32 1.75 17.35 16.73 34.08 So_-onngce33.62 36.22 37.07 27.52 43.53 20.61 25.46 27.25 5.81 8.87 145.49 128.32 273.81 3. SUBTRANSMISSION EXPANSION (69 kV) LENGTi (CIRCUIT-k.) 3 3. Loe -ýMSSO acapa - Chiquimulilla 29 - - 0. - - - Chiquimulilla - Esclavos 0.43 0.08 - - - -0 0. Pana3achel - Pochata 2- 0. 0.07 - - - - - -- 0.4 0.05 .34 Pochuta - Cocales 20 - - 0.493 0.01 - - - - - - 0.43 0.08 Y.51 Cabnas- Pana.a 03 - - 0.437 0.08 - - - 7 -37 0. 7 5.44 EC ula - Quzg tpqu 49 0.43 0.08 0.36 0.06 - - - - 0-79 0.14 0.93 Progreso - Jalap 34 -041 0.07 - .41 0.07 0.4 Jalapa-Sanarate 28 - - 0.43 0.08 0.06 0.01 - - - - 0.49 0.09 0.56 39 - - 0.43 0.08 0.33 0.06 - - - - 0.76 0.14 0.90 nala Cabnas-0.37 0 .06 - - - - 0.37 0.06 0.43 Gaemla nrs ol0 - - - - 0.12 0.00 - - . - 0.12 0.02 2.14 Sa arc-Xela 32 - - 0.43 0.08 0.17 0 03 - - - - 0,0 0.41 0.71 Guotm ar-Chialtenango 2042 -5 0 7. D-r1trot 4.50 0.83 2.24 0.30 6.74 1:21 7:95 Price contigecies - - 0.0 0.12 0.44 0.09 - - - - 0.98 0.01 1.19 Sal-total - - 5.04 0.95 2.68 0.47 - - - - 7.72 1.42 9.14 3.2 Subsnations - CAPACITY(MVA) S anarane Switching bay - - 0.04 0.01 - - - - - - 0.04 0.01 0.05 Panajachl Soitching bay - - 0.04 0.01 - - - - - 0 .0 Chaquimulilla Switching boy - - 0.04 0.01 -• - -- -- Esclavos Switching bay - - 0.04 0.01 - - - - - - 0.24 0.01 5.05 Jalapa 5.0 - - 0.30 0.05 3.40 0.07 - - - - 0.70 0.12 0.82 El Porvenir Sttching bay - - 0.30 0.05 0.03 0.01 - - - - 0.33 0.06 0.39 Chimaltenango 5.0 - - 0.30 0.05 0.42 0.08 - - - - 0.72 0.13 0.85 Xela Switching bay - - - - 0.07 0.01 0.03 0.01 - - 0.1 0.02 0.12 Noella Switching bay - - - - 0.07 0.01 - - - - 0.07 C.01 0.08 Sanarate Swithing bay - - - - 0.20 0.03 - - - - 0.00 0.03 0.23 Cabanas Switching bay - - - - 0.20 0.03 - - - · 0.20 0.03 0.23 Panaluya Switching bay - - - - 0.03 0.31 - 0 - - 3.03 0.01 .04 Progreso 5.0 - - 0.30 0.05 0.42 0.07 - - - - 0.72 3.11 0.04 Isclavos 5.0 - - 0.30 0.05 0.43 0.07 - - - - 0.70 0.12 0.02 mazateango 5.0 - - 0.30 0.05 0.38 0.07 - - - - 0.68 3.12 0.0 San Sobastian 5.0 - - 0.30 0.05 0.38 0.07 - - - - 0.68 0.,2 0.80 Sacapulas 5.0 - - - - 0.26 0.04 0.38 0.07 - - 0.64 0.11 0.7> Escaintla Switchang bay - - - - - - 0.17 0.03 - - 0.15 0.03 0.20 3uiche Saltching bay - - - - -- - 003 0.01 - - 0.03 0.01 0.04 Huehuetenorgo Switching bay - - - - - 0.03 0.01 - - 0.03 0.01 3.04 Direct coat · - 2.26 0.39 3.26 0.57 0.64 0.13 - - 6.16 1.09 7.25 Price contirgenc-es - 0.27 0.06 0.64 0.12 0.18 0.04 - - 1.09 0.22 1.31 Sab-total - - 2.53 0.45 3.90 0.69 0.82 0.17 - - 7.25 1.31 8.56 4. FUTuRE WORKS Gaateonala orte sbstation (00 MVA) 1.72 0.83 3.29 2.06 3.21 1.10 - - - - 8.22 4.07 12.29 Escant1 a tie substanion 138/69 4V(100 MVA) 1.82 0.41 - - - - - - - - 1.82 0.41 0.23 Gatemala Nonte - Guatemala So line 0.40 0.14 0.61 0.28 0.01 0.56 - - - - 3.02 0.70 2.72 Eaemala - tI Saloador line 0.80 0.01 2.90 0.75 2.00 1.79 - - - - 5,70 3.15 8.85 Raral ElerI,r fiction E1 Pete 0.23 0.34 0.35 0.21 0.30 0.26 - - - - 0.88 0.81 1.69 Coast (Soath west) - - - - 1.60 0.90 2.08 1.17 4.32 2.43 B.00 4.50 12.50 Altiplaro 0.03 0.01 1.66 3.10 1.60 3.11 3.83 2.55 0.56 1.70 4.77 10.4/ 15.24 Atlantio Coase 1.22 0.30 0.00 0.21 1.41 0.89 2.01 1.19 0.87 1.13 5.60 0.80 9.40 leadquarter building - 0.50 0.25 2.25 0.92 1.08 - - - - 1.17 3.83 5.00 Diroot cost 6.22 3.22 9.35 8.86 11.94 9.49 4.90 4.91 5.75 5.26 38.18 21.74 69.92 Pricerontingencaea 0.07 3.30 1.91 1.98 0.03 3.12 1.76 2.15 0.71 3.01 10.10 11.64 20.02 Sab-total 6.99 3.60 11.26 10.84 14.97 12.61 6.68 7.06 8.46 8.27 48.36 42.38 90.74 TOTAL (INDE) Direct Cost 80.12 57.34 58.92 44.31 58.59 38.64 29.13 29.91 14.51 15.92 241.27 186.12 427.39 Prace Cooairgences 10.04 9.29 16.53 12.05 10.89 8.20 7.49 8.26 5.21 5.19 50.16 43.79 93.95 Total 90.16 66.63 75.45 57.16 69.48 46.04 36.62 38.17 19.72 21.11 291.43 229.91 521.34 EEc Generaton 4.40 1.09 - - - - - - - - 4.40 1.09 5.19 Distribution 2.90 1.95 2.84 2.25 2.73 2.04 2.56 1.87 2.47 1.81 13.50 9.92 23.42 Direct Coat 7.30 3.C4 2.84 2.25 2.73 2.04 2.56 1.07 2.47 1.81 17.90 11.01 78.91 Prior contingencies 0.14 0.14 0.39 0.37 0.67 0.64 0.99 0.95 1.22 1.15 3.41 3.25 6.66 Sb-total 7.44 3.18 3.23 2.62 3.40 2.68 3.55 2.82 3.69 2.96 21.31 14.26 35.57 SUMM2LARY (SECTOR) Direct cost 87.42 60.38 61.76 46.56 61.32 40.68 31.69 31.78 16.98 17.73 259.17 197.13 456.30 Price contingercaes 10.18 9.43 16.92 13.22 11.56 8.84 8.45 9.21 6.43 6.34 53.57 47.04 100.61 TOTAL (SECTOR)2/ 97.60 39.81 78.68 59.78 72.88 49.52 40.17 40.99 23.41 24.07 312.74 244.17 556.91 1/Irclades physical contingeacieos. 2/ Doesrotn inlude costs (foreign only) for tariff and transmiasion line studies (1978, 0.05; 1979, 0.15; 1963, 0.10). TABLE 4.2 - 28 - Page 1 INSTITUTO NACIONAL DE ELECTRIFICACION (INDE) Project Implementation Schedule 1/ Expected Completion Date 1. Loan effectiveness 10/2/78 2. Power tunnel -- IDB 4/30/82 3. Main dam and spillway -- IBRD 10/31/81 4. Powerhouse -- IDB 11/30/81 5. Generating equipment installation -- SUPPLIERS 6/30/82 6. Transmission line -- IBRD (a) issue bidding documents 2/1/79 (b) bid opening 4/2/79 (c) contract signing 5/31/79 (d) completion of installation 9/30/81 7. Step-up substation -- IBRD (a) issue bidding documents 2/1/79 (b) bid opening 4/2/79 (c) contract signing 5/31/79 (d) completion of installation 9/30/81 8. Subtransmission expansion (69 kV) -- IBRD Lines: (a) issue bidding documents 9/29/78 (b) bid opening 11/30/78 (c) contract signing 2/1/79 (d) completion of installation 9/30/81 Substations: (a) issue bidding documents 11/1/78 (b) bid opening 1/3/79 (c) contract signing 3/1/79 (d) completion of installation 9/30/81 1/ Showing major financing source. TABLE 4.2 -29- Page 2 Expected Completion Date 9. Transmission system study (Exmibal interconnection) -- IBRD (a) terms of reference sent to Bank for review 6/30/78 (b) hire consultants 9/29/78 (c) send to Bank consultants' report 3/30/79 10. Tariff study -- IBRD (a) amended terms of reference received by the Bank for review 2/28/78 (b) hire consultants 11/30/78 (c) send to Bank consultants' report 7/31/79 APPRAISAL OF CHIXOY POWER PROJECT INSTITUTO NACIONAL DE ELECTRIFICACION (INDE) PROJECT CONSTRUCTION SCHEDULE FinancIng 18 Siuaci 1976 1977 1978 1979 1980 1981 1982 Source CHIXOY PROJECT WORKS ACQUISITION OF LAND AND RIGHTS INDE CIVIL WORKS Commercial Operation Bid Invitation (Chixoy Plant) Access Roads and Camps CABEI Contract Award Reservoir Filling and River Diversion INDE Deep Grouting Dam and Spillway IBRD sines Power Tunnel DB Powerhouse OB I I B EQUIPMENT FABRICATION AND Equipment Te st INSTALLATION Turbines and Governors SUPPLIER Generators and Auxiliaries SUPPLIER Hydromechanical Equipment SUPPLIER Transmission System IBRO SUBTRANSMISSION EXPANSION (69 KV) Lines IBRD Substations IBRD I II I World Bank - 18527 - *-- -- - - - - --t -* - *---;- - - -- - - ... 1. .. E ..| . -L INSTITUTO NACIONAL DE ELECTRIFICACION I F I UICHE . .. · I.- I.. I .4- GOo. aaplsI \ .II - ,- . . SANTA CRUZ \ SAN M COS -~~OLGi - sqp as0 TÇTNC ?N 4 - -- -i - - -J--Å-LaN - \-I *thCmcenpngu- 0 ~ gAT I Csocco Poyhuta .=A== RETALHULE? * r- -- • :Sc . 0,. i -.L tL ['."'F ___ __ __ _____ __._..._.._.._____ __ __ ' 個胞 蘿， _ 1BRD 13048 F r сеь�п �soo "л � 8 �' � �е°�8 °�'г � ;�' 0�0 о , \� ` о е�дд�'е�_��-вq0 � � �о sегrемв е iэп - г г � DAM $1ТЕ . г°! , � г_ � � о' ioo zoo заа аоо � `�� �- � :" . - t . МЕГЕRS I � __ � , о°' %.,а� �о���Р0�_ }1,Ипр1h7,951т,д�а.д.9Э �/-'�`� flow-� �� г��е� 1en�1h18, �п�iа�4�3� ���,� �хо1 � 7i .. � ' _ � г -' =п00г2 ��- - - - s0.а00ь ьОг � к�ппг ��° е>, � , � ��г' о� . �,: � ,�1� О �у �f'� ар09 вi м �оа °оЬо . �ио°. � 1 . . . - а srte� 8 i f � Q �га� глwегнопеь ТТН i i ,�_ � �� �°п гГ - � я '� �, � J � i о 9Ип0 + �1 i PUEBLO V1EJ0 � � °� 4Г',�Ку � S 1`7 dORROW AREA .� ` - 1; Н хп1 � � 3 1 / i �� � .� G� _ ��.г 000 � 3р хЬоо p0 �п //''�� ,1� ' � oBS°° ` / i - '� rJOO J• �о �� г Р -- � -�-_� �1х iпг0 К � vo: оо�'^ь�� о�� PROJECT LOCATION PLANO .�' F�`°°Оь ti° ' �_ ,�=� �- гигв POWeГ г Пei 0 . в ° ,п° � _- ,'`, %� i � - - ----- --- ------ ---- -- ------------- � °`п� �в00 � -"'"�� . . , sаига лил' ' i i ------ -- - --- ------ --------- -- - ро 0 р �� о s п ь в ' воевоw аеел / i j �` b• $$$}}} i /' О? 'L�' � KILOMETERS " ' // �l дсгвгг гоод „Л `1' /2о00 _ � _' _ . . ' г/Г � . � _ . �l _ (,%рб"J ,,рΡ � 0 п`N �./ /'� \\ S°� W д' � � �R7н // _S� .1 ' . 1 . 1� - ioGualemalaNorH/ � `8 £�° ;�оо \, (�" Ejd р� � '��' еоьеlпьОп т а���-ь11,2(пе//i-� а ь0о б�s0 °Кb.г i г 9so _ . ��`� 1. $ ,1 \CHi=�yl�.. � \� аЙч � \� � � GUATEMALA � F:�'- п� - - :-,""r,- :. . \ 1 '��• o,��r�f ° ,,' э .�,�"� � � � �_ ��пп0 9п 1NST1TUT0 NACIONAL DE ELECTRIFICACION (1NDE) �_s.-- ,.г �• ��д � � , � jj50 СНIХОУ PROJECT WORKS й, �J ��'Е�,._r./ ` ; � �_' i � . _ _Fd ��00 �°0° ьfEVarioи соиrоиРS iи мfreas !-� ��• ` гу` i 1 J А«ег оод Normal м' 0 , � �` ��w5o ➢000 _ W /f oroge 1evg�m т7� ''�'. •..�.''':_/ : ,. �,� ' , -- \ i-�00 '/ и rad' - -�оо -- __ ' 1 � -- _ -� s ' . е� �� г 0\ �' \�----� ' ",, --1 _ , - s �.� _в--�� 9 � � - � ' _ , :+ "" е ' �в,0 ' ,, и:�1LигУ: - ---_ ._ ' �ь ����а� ,,.�е,е,..х,.,.,�,.о.е..,,,п.....�� . "' � '" =+ s'�� ���э, о �ь е\ �� 0� .п..�.т.п� вW„л..... ' '. 'PLS': �е'и..�г., °°Ро � `-�---- � --, LONGITUDINAL PROFILE ON TUNNEL CENTERUNEea е$ ���а l-~`-_\д° �п� � 84 Оо�в ��в4� о 2 д е е io K1lOMEiERS -I I г-�го MEiERS - ип (lоод 1eve1 Е1 809.0- '• 1- Е1 д12 0 800 = __ Ио.по1 пахiппт rarermo�r 1а.е1 Е1 х9КС „i+ _ MEifRS� MEiERS' 2.д00- LeLapunaHill - ' 0 -- /.�. •1.4,hQ1.o -2,400 _ 9 ���r' _; - -- ��� --Min'iтитгеиrvоiгlв.вl)д0] ��`5��0 �f1LiER ��о 2,ООГ �� ' i в ... ii . )50 - . �3о • _ Мь,"г°i яюппд ьигFойв 20 п��v�tr ;`ROCK F LL � _ �j���,.,_ дОСК F1lL � 1,50г � " - --- _ - , � � пп.. �r„�лп�,,.r..п�.п.�п .. _-' - � . :'1� ` - �`' ' ",�- . � . .,..--_ "" �У - 1.00( - i. i �� �. - -- � J00 - ' .. - _-- ----- - удh'ip�1, -----.. . _ - _ _�__ .- _.-_•.-_ - -- .р�д'�:�п ' '-- ьiа 1:�.пF - - - ' ' _ _- _ -. � '�1�И• . ' --�_ . . -- - ' - - _ _ е."•y�Fl1'-- - --- -- ------ - -. soc - � .., ... ., , � . � . ,. �. ., _ _ . , .., _ 7д�� i , . .i. - -- - --•- •- г . , . г _ . 650 - ' � . � - .. -. С -- ___в.. 1в л1 - - -- _ _ - - -- - � -, - - -- , . . . TFнNjVEP.�E CRL$;; SECT�vN r��F G�M � F1G 4.3 - 30 - CHAPTER 5 FINANCES Background 5.01 Despite the recent Government decision to maintain the separation between INDE and EEG (para. 1.18), this chapter retains the sector (INDE/EEG consolidated) approach of the report dealing with the Aguacapa project (Loan 1426-GU). Because the main market for INDE's generation is served through EEG's distribution system, individual company analysis provides only a partial and less meaningful evaluation of financial performance than that which is obtained on a consolidated basis. Moreover, it is essential to assure finan- cing not only for INDE but for EEG as well, both through an adequate blend of consumer-based resources, borrowings and capital investment by Government. The mobilization of a reasonable proportion of consumer-based resources relative to the overall expansion investment depends, in turn, upon the development and implementation of a coordinated, economically and financially sound sector tariff policy. Accordingly it was agreed under Loan 1426-GU that the power sector's pricing policy should be based on providing an adequate internally generated contribution to the sector investment program, and that the Government should meet with its own capital investment the short-term financing shortfalls arising from the need to carry out a substantial hydro- electric expansion program to alleviate the country's dependence on imported fuel. This policy is appropriate considering the special circumstances of the sector explained in Chapter 1. It is also consistent with the findings of the project performance audit of INDE's first and second power projects and of the August 1975 sector mission (paras. 1.08-21). Past Earnings and Financial Position 5.02 The power sector's financial performance in 1971-73 was satisfactory (see Tables 5.1, 5.3 and 5.4). It achieved an average rate of return of 10% on historically-valued assets, a high debt-service coverage ratio (4.2 times) and a substantial contribution to its modest investment program (51%). This satisfactory performance, however, resulted from the high earnings achieved by EEG, which more than offset INDE's poor performance. During the same (1971-73) period, INDE's rate of return on historically-valued assets averaged 5.9% , only, which in turn resulted from its not charging adequate bulk tariffs to EEG, its principal customer. 5.03 The sector's financial performance in 1974-75 was unsatisfactory, primarily because the sharp rise in fuel costs was not fully passed on to ultimate consumers. Consolidated net income dropped in 1974 to 58% of the previous year's level and did not reach its 1973 level until 1976. During this period (1974-75) the sector's rate of return on historically-valued assets averaged 6.3%; INDE's, 4.2%. While debt service coverage remained satisfactory (2.4 times), the sector was only able to finance 17% of its investment program from internal resources despite the fact that it had not undertaken any major investment to counter the increase in fuel costs. By 1976 the sector rate of return had improved to 8.2% and the internal contribution was 32%. - 31 - 5.04 A further improvement was expected in 1977, as the Government had agreed that prior to the effectiveness of Loan 1426-GU it would increase tariffs to enable the power sector to finance 15% of its investment program from internal resources during 1977-79. By September 1977 the Government had not taken action because it considered that introduction of an increase during a period of poor electricity service (para. 3.03) would have been politically unwise. After discussions with a Guatemalan delegation, the Bank informed Government in October 1977 that it was prepared to waive the 1977 revenue requirement. However, effectiveness of Loan 1426-GU would be dependent on Government confirmation that tariffs would be raised in order to meet the 13% contribution required for 1978, and an introduction of at least a 6% tariff increase in 1977. On November 1, 1977 Government increased tariffs by US$0.004/kWh (approximately 7%). Despite the delay in increasing tariffs, the sector achieved a 21% contribution to its investments in 1977. 1/ This resulted from a larger than previously expected reduction in working capital (mainly due to a high level of accounts payable). As a result of the delay in raising tariffs, sector operating income declined from US$8.1 million in 1976 to about US$3.6 million in 1977; this compares with a forecast of US$17.7 million in the Aguacapa appraisal report. 5.05 In view of the likelihood that the March 1978 presidential elections could delay a governmental decision on the tariff increases necessary to ensure the financial soundness of the sector, presentation of the proposed loan to the Executive Directors was made contingent on the implementation of the balance of the tariff adjustments required to provide a contribution of 13% from internally generated funds to sector investment in 1978. The Government decided to implement a 10% tariff increase for INDE and EEG retail consumers effective May 1 and a further 8.5% increase not later than December 1978. 2/ These increases should achieve the 13% contribution in 1978, provided delays are not experienced in commissioning the fuel purifier in EEG's La Laguna plant (para 4.01). 5.06 The Government agreed under Loan 1426-GU that the power sector should earn a rate of return of at least 9% on its average revalued net fixed assets in operation after the Aguacapa project is completed. INDE agreed to hire consultants to carry out a revaluation study of all existing sector assets and to design a procedure by which assets can be revalued annually by means of the application of standard indexing, though annual application of the procedure was not required under the Loan Agreement. The consumer price index in Guatemala increased at an average annual rate of 10% during the years 1973-76 and the cost of electric power plants, as measured by the U.S. Bureau of Reclamation, increased at about the same rate. Even if Guatemala returns to the price stability it enjoyed before, the power sector should still be protected against inflation in the countries from which it purchases the bulk 1/ This is a preliminary figure based on EEG's 1977 audited accounts and INDE's unaudited accounts. 2/ Tariff to INDE's bulk supply customers (mainly the municipal power companies) were increased by 10% on June 1, 1978. These customers represent about 4% of INDE's sales revenues. - 32 - of its equipment. The Government agreed that the sector's net fixed assets would be valued on an annual basis after completion of Aguacapa. At the same time, the required rate of return was reduced from 9% to 8%, which, combined with annual review.of asset values, should result in adequate resources being contributed by power sector consumers to finance future investment. 5.07 Though the sector's overall current position was good during 1975-1976, it reflected the strong position of INDE rather than the weaker one of EEG. At the end of 1976 INDE's accounts receivable were equivalent to 59 days of sales, 1/ while EEG's totalled 83 days, mainly as a result of its excessive accounts receivable from public agencies. Under Loan 1426-GU, Government agreed to take all necessary measures to reduce the sector's accounts receivable from public agencies to a maximum of 60 days of billings by the end of 1977. As a move to achieve this goal, Government decided to settle EEG's accounts receivable of US$4.4 million (September 1977) with EMPAGUA, the Guatemala City municipal water utility (which accounted for about half the sector's accounts receivable from public agencies at the end of 1976), through a commitment to pay the debt in five years, starting in 1978. In addition, Government decreed to provide funds through June 30, 1978 to ensure payment of EMPAGUA's debt to EEG to that date, and to pay 75% of EMPAGUA's electricity billings until December 31, 1978 or initial operation of the new Xaya-Piscaya water supply project, whichever event is sooner; the new project would substantially reduce EMPAGUA's electricity consumption. Since the tariff arrangements under Loan 1426-GU should protect EEG from any insuffi- ciency of funds, 2/ the net effect of the arrangement will be that Government will have to increase its contributions to INDE to offset the deferral of the US$4.4 million over the next five years. As a result of the above, there has been an improvement in sector accounts receivable from public sector entities which have been reduced from the equivalent of 365 days of sales as of the end of 1976 to 220 days as of the end of 1977. Despite a substantial improvement, the 60-day target was not achieved, largely because several municipalities which buy power in bulk from INDE for distribution within their jurisdiction have refused to pay a fuel surcharge applied by INDE in 1977. The situation became critical at one point and troops had to be called in to quell disturb- ances (including the burning of an INDE office in one of the towns concerned). As a result of these problems, INDE's accounts receivable from other public sector entities (excluding EEG) have risen from the equivalent of 277 days at the end of 1976 to 350 days at the end of 1977. It should be noted that the amounts involved are not large (totaling US$1.8 million for EEG and US$3.1 million for INDE as of December 1977). It should therefore not be difficult for Government to secure a settlement of these accounts. Therefore, it was agreed that the terminal date for compliance with the covenant on accounts receivable be postponed from December 31, 1977 to December 31, 1978. In addition, during negotiations on the proposed loan, a satisfactory program for achieving the revised target was defined. I At the same time, INDE's accounts receivable from customers other than EEG stood at 126 days (see Table 5.1). 2/ INDE's tariffs to EEG are to be adjusted to allow EEG to cover its requirements from internally generated funds. - 33 - Financing Plans 5.08 INDE's and the sector's (INDE/EEG consolidated) capital investment requirements and proposed financing plans during the disbursement period of the proposed Bank loan (1978-82) are detailed in Table 5.2 and summarized below: Million Q (or US$) % of INDE SECTOR Sector Total Investment Requirements Construction program: Aguacapa 74.0 74.0 12 Chixoy 291.8 291.8 49 Other 155.9 191.5 32 521.7 557.3 93 Interest during construction 43.6 43.6 7 Total investments 565.3 600.9 100 Financing /1 Net internal cash generation 140.2 169.4 28 Borrowings: For Chixoy: Proposed IBRD Loan 72.0 72.0 12 Other 137.5 137.5 23 For Aguacapa 58.1 58.1 10 For other projects 50.9 59.2 9 Sub-total (borrowings) 318.5 326.8 54 Government capital contributions 105.7 105.7 18 Reduction in cash 0.9 - - Total sources of funds 565.3 600.9 100 /1 See Table 5.2 for details. 5.09 INDE would be responsible for US$565.3 million or 94% of the sector's investment; EEG for US$35.6 million (6%). Tariff increases referred to in para. 5.15 should provide consumer-based resources sufficient to cover rapidly increasing debt service requirements and provide self-financing for 28% of the sector's large investment requirements (13% and 16% in 1978 and 1979 of the respective average annual investments, and 14% of the total 1978-1979 invest- ment). Borrowings (drawdowns) totalling US$326.8 million for the sector would cover an additional 54% of the financing requirements. They would be as follows: - 34 - (a) US$58.1 million for the Aguacapa project including US$55.0 million from Loan 1426-GU, and US$3.1 million from CABEI. (b) US$209.5 million for Chixoy including loans already secured from the IDB (US$80.0 million), CABE1 (US$8.6 million), supplier's credit (US$25.9 million), and loans yet to be secured which include the proposed Bank loan (US$72.0 million), and US$23.0 million from undetermined sources. (c) US$59.2 million for other ongoing and future projects (para. 4.03) as follows: US$ million Status - CABEI (transmission) 8.2 Secured - CABEI (G. Sur-G. Norte line) 12.5 Under negotiations - CABEI (Guatemala-El Salvador Interconnection) 6.1 Requested - First National City Bank (EEG generation) 5.8 Secured - USAID (rural electrification) 8.6 Under negotiations - IDB (Rural electrification) 11.3 Requested - Local (New INDE building) 4.2 - Commercial Bank (EEG) 2.5 Planned 59.2 5.10 Details of the above borrowings are shown in Annex A (Table A5). The Bank loan was assumed to be for a period of 17 years (including 4 years of grace) with interest at 7.5% p.a. The financing plan also includes provision of US$105.7 million in Government capital contributions to INDE. Government secured a loan (US$32.8 million of which US$12.9 million would be disbursed in 1978-82) from FIV in 1976 to be contributed to INDE as equity for the Chixoy project. A second loan of US$30 million from FIV was obtained in 1977 for equity contribution to the Aguacapa project. A third loan to the Govern- ment for Chixoy from FIV (US$37.2 million) is anticipated in 1979, and is also expected to be contributed by the Government as equity. Details of the sector financing plan (para 5.08) are shown in Table 5.2. 5.11 The Bank has offered INDE assistance in obtaining, through cofinancing arrangements, part of the funds that they require. INDE has already received several proposals on attrative terms from commercial banks. The Bank obtained assurances from Government that it will provide or cause to provide to INDE the following funds: - 35 - (a) the balance of the financing required for the Chixoy project (US$23 million in future borrowings and US$50.1 million in equity contributions); 1/ (b) equity contributions for the Aguacapa project, other committed projects, and the Guatemala Sur-Guatemala Norte 230 kV transmission line and Guatemala Norte substation 2/ which will deliver Chixoy power to Guatemala City; these contri- butions total US$55.6 million in 1978-1982 1/ (see Table 5.2). 5.12 The financing plan is satisfactory. The sector still has to secure US$45.2 million of borrowings for its program exclusive of Chixoy in the period 1978-82. Of this amount US$38.5 million is expected to be provided by USAID, IDB, and CABEI for INDE projects; the balance should be available from commercial banks. To ensure adequate review of future sector investments and financial planning, the Government and INDE agreed to the following provisions (similar agreements were reaclned under Loar 1426-GU): (a) EEG's investments would not exceed US$11.5 million in 1978, US$5.9 million in 1979, US$6.1 million in 1980, US$6.4 million in 1981 and US$6.7 million in 1982, without the agreement of the Bank; and (b) INDE would not incur any debt without the agreement of the Bank if its most recent 12-month internal cash generation is less than 1.5 times the maximum debt service requirement in any future year. 5.13 For reasons noted in para. 6.02, a provision of the Aguacapa loan agreement requiring the Bank's approval of major new projects undertaken by INDE prior to completion of Aguacapa would be amended. Future Earnings and Financial Position 5.14 As noted in the appraisal of the Aguacapa Project, the tariff policies pursued in the power sector during the construction period of the Chixoy project will have to strike an appropriate balance between long- term economic considerations (which indicate that tariffs should reflect the lower production costs which will be achieved when the project is com- missioned) and the short-term financial needs of the sector, resulting from the high cost of fuel and the large size of its investment program. I/ The agreed Government contributions to INDE include US$14.3 million of funds which would be offset by repayment of an interest free advance to INDE in 1977. Thus, the gross 1978-82 equity contributions for Chixoy and other program work is US$120 million. 2/ This component (line and substation) of the investment program is esti- mated to cost US$18.4 million; a loan of approximately US$12.5 million would be provided to INDE by CABEI to finance it. - 36 - The assumptions underlying the 1978-83 projections are similar to those used in the Aguacapa appraisal, with adjustments to reflect changes in the investment program and cost increases and the actual timing and amounts of tariff increases. 5.15 The projections assume an 8.5% retail tariff increase effective December 1, 1978 and increases in 1979 which would raise average tariffs for the year by 7.6% over the December 1978 level. I/ With these increases the sector would finance 13% and 16% of the annual average investments in 1978 and 1979, respectively. Over the remaining construction period of the Chixoy project (1978-82) the sector would finance 28% of its investment program from internal resources; the annual contributions would be 33%, 43% and 77% in 1980, 1981 and 1982, respectively (see Table 5.1). 5.16 Debt service coverage under these assumptions would be adequate, as shown in Table 5.1, averaging 2.1 in 1978-1982. The sector's debt equity ratio would rise from 29/71 in 1977 to a high of 45/55 in 1980-1981 and decline thereafter. Although data is not available on revalued assets (see para. 5.06), a rough estimate indicates that the sector's rate of return on revalued net plant in operation would be approximately 6% in 1978 and that it would exceed 8% in 1979-1982. 5.17 Individual projections for INDE and EEG as presently constituted are shown in Annex A (Tables Al to A4). These projections assume that INDE's bulk tariffs to EEG would be adjusted annually to transfer to INDE any funds generated by EEG in excess of the latter's requirements for operations, debt service, working capital and construction. Government and INDE agreed under Loan 1426-GU to implement this tariff policy. 5.18 The Government and INDE agreed to revenue requirement covenants under the proposed loan similar to those incorporated in the agreements for Loan 1426-GU: (a) Sector retail tariffs would be set at levels sufficient to achieve a 13% and 16% annual contribution to investment in 1978 and 1979, respectively; (b) Starting with 1980, retail tariffs would be set at levels sufficient to earn an 8% rate of return on average revalued consolidated net fixed assets in operation, valued annually; (c) INDE's bulk tariffs to EEG would be adjusted annually to transfer to INDE any funds generated by EEG in excess of the latter's requirements for operations, debt service, working capital and construction; 1/ Exclusive of any additional increases which may be required to cover fuel price rises (see para. 5.18(d)). - 37 - (d) fuel price increases will be passed on automatically to consumers; and (e) power sector tariff rates would not be reduced without the agreement of the Bank before the project is completed. Performance Indicators 5.19 Annex A (Table A7) contains a representative selection of indicators of INDE's operating and financial performance (other than those covered by proposed covenants) through the year following project completion. Perfor- mance as measured by these indicators would be monitored during project execution. GUATEM4ALA - POWER SECTOR KEY FINANCIAL. INDICAFORS ---------------------AClJPL-------------- -- -- --------- ----FORECAST------------------------------------------- 4/ 'TOTAJ 1972 1973 1974 3975 1976 1977 1978 1979 1980 198 1982 1978-1982 1983 Rate of Return Average Net Plant in Service at Acquisition Cost (Q million) 70.96 76.48 81.65 84.26 95-19 116.34 145.5 231.93 335.53 374.39 580.12 778.24 Rate of Return (W) 10.3 9.6 6.1 6.5 8.2 2.8 9.5 19.7 17.1 15.6 13.0 11.1 Operating Ratio (%) 66 67 84 86 83 94 81 52 49 53 65 42 Debt Service Coverage Gross Debt Service (Q million) 1.79 1.90 3.96 3.37 6.o2 9.03 17.35 27.85 32.49 41.69 44.09 163.47 56.0 Ratio (times) 5.8 5.7 2.3 2.6 2.1 1,2 1.4 2.1 2.3 1.9 2.4 2.1 2.5 Debt/Equity Ratio 2/76 24/76 27/73 32/68 31/69 29/71 39/61 42/58 45/55 44/56 40/60 35/65 Receivables - days 1NDEl 192 173 143 115 126 141 109 88 62 62 62 62 EEG IL6 52 87 81 83 51 40 40 - 40 40 40 40 SECT)RV 62 67 94 85 90 68 54 50 45 46 46 46 m Depreciation ($ 3.1 3.0 3.2 3.1 2.8 3.6 4.1 3.3 3.4 4.1 3.2 3.7 Contribution to Investment Total Investment Requirements amillim) 10.2 12.2 16.2 27.8 44.3 117.6 145.6 162.4 132.7 92.6 50.7 600.8 81.6 Internal Contribution (%) 37 46 2 22 32 21 13k/ 16 ' 33 43 77 28 91 1/ Excluding EEG's account payable to INDE and the corresponding revenue from INDE's sales to EEG. g Net cash gernration as a percentage of total construction requirements. 3/ The construction requirement in this year is the average of tnis year's investment and that of the preceding year, as requirod by Loan 1426-CU. The total internal contribution for 1978 and 1979 combined, is 14%. 4/ Based on 1977 audited EEC accounts and unaudited INDE accounts. I POWER SECTOR INVESTMENT FINANCING PROGRAM: 1978-1982 US$ million = Q million 1978-1982 -----------------------------------SOURCES OF FUNDS 1978-1982--------------------------------------- Total Investment Loans Secured = Total Sources or Being Loan Future Loan 4 Government Net Internal INVESTKENT PROGRAM ITEM of Funds Negotiated Designations' Loans Designations Equity Cash Generation Chixoy Project: Generation 274.1 160.7 abedgklmng 23.j v 50. 40.3 Subtransmission Expansion 17.7 15.0 3 50. Subtotal 291.8 175.7 2. 014. Interest 1)uring Construction 34.5 10.8 5 - 23.7 TOTAL 326.3 186.5 23.0 50.1 66.7 Aguacapa Project: Project Works 74.0 58.1 eio - 15.9 - Interest During Construction 6.5 - - 6.5 TOTAL 80.5 58.1 15.93 6.5 Other Committed Projects: ILDE. Guatemala Sur/Norte transmission 18.4 12.5 p -593 Other 65.1 8.2 fhj - 33. 23.1 Eu: Generation and Distribution 35.6 5.8 w 2.5 x Subtotal 119.1 2.5 39.7 50.4 Interest During Construction 1.8 - - 1.8 TOTAL 120.9 26.5 2.5 39.7 52.2 Future Projects: INDEi Works 72.4 - 30.2 rstu - 42.2 Interest During Construction 0.8 - - 0.8 TOTAL 73.2 - 30.2 - 43.0 Totals: Works 557.3 260.3 55.7 105.7 135.6 Interest During Construction 43.6 10.8 - - 32.8 600.9 271.1 55.7 105.7 168.4 1/ During negotiations, a Government commitment to make this amount available to INDE in the form of loans and/or equity, was obtained. 2/ During negotiations, a Government commitment to make this amount of equity available for the Chixoy project was obtained. Government has already borrowed US$32.8 million in 1976 from FlV to be contributed as equity to the Chixoy project. A second loan from FIV to the Government of US$37.2 million in 1979 is anticipated. / During negotiations, a Government commitment to make these amounts available to INDE as equity for committed works was obtained. A US$30 million loan to Government from FIV was secured in 1977 to be contributed as equity for the Aguacapa project. j/ Letters designate the loans as follows (in the order that they appear in Annex A, Table A5): a. IDB 81/0C-oU f. USAID 520-L-019 k. Chixoy Lot 4 p. CABEI Transmission (G. Sur/G. Norte line) u. IDB Rural Electrification b. TB g CAET o. 7 1.Chioy ot 5q. SR] Chxoyv. Finance Gap Loans b. IDB 301/0C-GU g. CAREI No. 75 1. Chixoy Lot 5 q. iBRD Chixoy (proposed) w. F.N. Bank of Chicago c. IDB 302/DC-GU h. CABEI No. 101 m. Chixoy Lot 6 r. USAID Rural Electrification x. Future (EEG) d. IDB 454/SF-GU i. CABEI No. 102 n. CABEI No. 75 a. CABEI Guatemala - El Salvador line e. IBRD 1426-Gu j. CABEI No. 101 extension o. CABEI No. 102 extension t. Local New H.Q. Building -40- TABLE 5. 3 POWER SECTOR C01ISOLIDATE, IN00E STA'IEMEITS AND SOURCES AND USES 0F WnLS 7.971-1983A' Poo:r Sector Cunsjiidated Income St.tement: INDE and EEG (Q illions - US$ millIons) 1971 1972 1973 1974 175 1976 977 1978 79 1980 .1 8 81 1983 -----------.--.--.--. t u ------------------------- ------------- -----re.st------.-..------------- Final Sales in GW EEG 532.G 596.6 658.8 694.9 729.9 768.2 872.5 924 999 1080 1168 1263 1365 0DE 45.9 53.4 6.12 80.7 117.3 138.0 165.6 203 247 292 145 392 448 Total 577.9 650.0 720.0 77.56 8T4.2 976.2 1038.1 1127 1246 l' 72 7513 1659 1813 dlnean kWh Sald (/kWhY/ E. 3.290 3.230 3.20 4.220 5.04G 5.449 5.577 6.354 7.586 8.117 8.117 8.117 8.117 iNDF 3.'50 3.83 3.930 4,200 3.615 4.703 6.079 6.692 8.00 8.148 8.548 8.58 8.548 Sector Average 3.327 3.775 ..262 4.218 4.842 1.321 5.659 6.415 7.670 8.209 8.215 8.219 8.223 Operating Revnues GES 17.45 1,.i7 21,07 29.34 76.80 41.80 46.68 58.71 75.80 87.66 94.81 102.52 110.80 INDE 1.72 2.02 2.40 3.39 4.23 6.49 10.37 13.38 18.76 24.96 29.L9 33.51 38.30 Tota! ale. Re-enu 19.17 21.29 23¯7 32.73 41.03 48.29 58.75 72.29 95.56 112.62 ~14.30 136.03 149.10 ethei operating Incoe .14 .27 .51 .39 .58 .86 .73 .80 .88 .97 1.07 1.18 1.29 Total Operating Reverne 19.31 21.56 23.98 33.12 41.61 49.15 59.48 73.09 98.44 113.59 125.37 137.21 150.39 Opetrin iFxpenses Salaries 4.95 6.47 5.96 6.1:3 5.65 6.94 7.05 5.41 9.22 10.07 11.36 12.34 13.59 FE 2.83 3.83 5.06 15.47 2.41 24.54 35.80 33.01 19.61 19.68 24.27 7.36 1.13 materialg .30 0 .26 .27 .94 1.32 o.38 1.51 1.66 1.95 2.25 3.10 3.21 Orher Administratlon 1.10 0 .93 1.29 2.-0 3.35 3.98 4.34 4.73 5.11 5.52 5.96 .41 Otne socasF Espenes .18 .19 .23 .26 .29 33 .39 1.50 1.20 1.70 1.51 1.50 1.49 DoprcQ.atioo 2.58 2.79 3.08 3.43 3.57 3.89 6.14 8.64 11.7? 15.18 19.55 28.75 34.66 :ax .32 .35 .38 .48 .71 .82 1.00 1 17 3.92 1.75 7.90 3.05 2.2, 1n.re Taxes .28 .27 .24 .08 .22 .2! .70 .27 .26 .35 .32 .35 .73 Tol 12.94 14.16 16.14 27.71 35.70 4¯03 5¯5.84 537 50.26 55.59 66.37 61.31 63.46 operating Incor~ 6.37 7.40 7.84 5.41 5.91 8.12 3.64 14.22 !6.18 58.00 59.00 75.6 86.94 Other 1ncosi) 0 -.12 - +9 -.43 -.44 -.28 -.41 -.45 -.47 -.51 -.55 -.59 -.63 Nes Income Befare Interest 6.37 7.28 7.35 4.98 5.47 7.04 3.23 13.77 45.71 57.49 58.45 75.30 86.31 Inerest Charged to operations 99 i.04 .1.12 -..3_22 -66. .6 1.2 .1.j ik3L 4.3 _2.92 12 26 _.271 20,.76 NEt INCOME .Sħ AcP Änåg L åg je1 =~ 1.67 _40. A8.0 _6.1o 55.19 pj-55 POer Sectt Consolidated Scurce, and Uses of Yunds Statement: INDE and EEG (Q milliena - I08 nillicns) TOTAL 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1978-1982 2983 -------------cl - -. ---.----Farnan--------t- nternal Sources ----_-- --------¯¯¯----¯¯¯¯-.ForecIG--.-- - ----------- --¯~ - Net income before interest 7.28 7.33 4.97 5.46 7.84 3.23 13.77 45.71 57.49 58.44 75.30 250.71 86.30 - Depreciation 2.79 3.08 3.43 3.57 3.89 6.14 8.66 11.77 15.18 19.55 28.65 83.81 34.66 - Other .nonash expenses .19 .23 .26 .29 .33 .39 1.50 1.50 1.50 1.50 1.50 7.50 1.49 -Consumer ontribut:-as .09 .19 .34 .56 .60 .22 .23 .24 .25 .27 .28 1.28 .29 Total 10.33 10.63 9.00 9.48 12.66 9.98 24.16 59.22 74.42 79.76 105.73 343.30 122.74 Operationsal Requirements - Working ca?-tal without cash 1.47 .05 4.68 -.80 -7.57 -20.89 -6.00 17.79 7.68 9.73 25.48 54.68 -4.40 - Repaymento .75 .78 2.57 2.71 4.41 4.51 3.76 10.98 11.35 18.01 21.14 69.24 29.30 - Interest oharged a operations 1.04 1.12 1.39 1.66 1.60 1.56 3.39 4.31 10.92 12.26 19.71 50.59 20.76 - Davidends 3.29 3.29 .08 .u8 .88 .08 .78 .8d .88 .08 .0 .40 .02 Total 6.55 5.24 8.72 3.65 -1.47 -14.= 5.23 33.16 30.03 40.08 66.41 174.91 48.74 Net Cash Generation d/ 3.80 5.59 .28 6.23 14.13 24.72 18.93 26.06 44.39 39.68 39.32 168.39 74.00 Changes in other assets and liabillties .03 .09 -.24 -.03 -.08 4.05 -1.47 -.90 -.90 -.78 0 -4.05 0 Chage in ncsh __....6 _14 5.76 . 360 7.60 .55 -1.26 -.59 -2.15 -3.73 -7.18 2.61 Net Available from Opetions 3.11 4.99 .38 .50 10.61 13.07 19.85 28.22 45.88 42.61 43.05 '179.61 71.39 Constructio: Requrements - Ongog nawos 9.29 11.14 15.43 24.97 38.42 55.95 86.98 42.75 14.94 13.92 16.07 174.66 18.58 - Proposed project .87 1.06 .87 2.84 5.93 59.73 69.89 73.76 79.98 53.50 14.68 291.81 0 - Future projecta 0 0 0 0 0 0 10.59 22.10 27.5 13.74 16.73 90.74 63.00 - Interest duing constrcetion . n 0 1.96 6.20 12.56 18.22 11.42 3.24 43.64 0 T.ol 10.16 12.20 16.30 27.81 44.3R 117.64 173.66 151.17 132.72 92.58 50.72 600.85 81.58 Balance to finance 7.05 7.21 15.92 27.91 33.74 104.57 153.81 122.95 86.84 49.97 7.67 421.24 10.19 Fisnaed by: - Loans 4.23 2.88 9.89 16.98 15.24 31.92 104.76 88.41 85.27 39.85 8.52 326.81 0 - Equity 2.57 4.49 6.37 9.68 22.36 79.43 63.71 33.00 9.00 0 0 105.71 0 Total 6.80 7.37 16.26 26.66 37.60 TIl-.5 168/ fl.4 94.7 39.5 8.52 7+~7 u Other applicatios (net) -.25 .16 .34 -.65 3.86 6.78 7 0 0 0 0 0 0 Surplus (deficit) of Sands 0 .0 0 0 0 0 14.66 -1.54 7,43 -10.12 .85 11.28 -10.29 - Acculated 0 0 0 0 0 0 14.66 13.12 20.55 10.43 11.28 19.28 1.09 et tash generation/ - Conscruction requirements () 37 46 2 22 32 21 11 17 33 43 78 28 91 _a/ See Tables Al to A4 for the separage financial projectirs tsr INDE and EEG from which the consolidated statements are derived. The footnotes to those tables explain the projection methodology. b/ Table 5.4 details the tariff increases in 1978 and beyond- _l Intlodes changes in the ite "EMPGUJA receivablel of the balance sheets (Table 5.4). See footnote e/ of Table A4 for a full explanation of this itea. d/ This is net cash gner-atio as defined in the Guarantee Agreenrt as a basis for calculating the sector contribution to investnent. - 41- TABLE 5.4 POWER SECTOR CONSOLIDATED BALA1CE SHEETS (1971-83) AND FORECAT TARIFFS Power Sector Consolidated Balance Shee s: INDE and EED (Q millions = US$ milli .) 1971 1972 1973 1974 1975 1976 1977 1978 192 1980 1981 1982 1983 ASSETS -------------------------------Ac-al --------------------------..---- -----------------------F-ea.- plant in Operation 86.60 91.29 103.36 1o.06 115.61 137.43 168.02 210.72 361.20 44.86 473.65 904.52 933.21 Loss: D preciation 6 6 22.33 2580 l9 3 39.48 &8.14 59.91 75.09 94.64 123.29 197.90 Less epecatisa9 . 81.0-3 82._ i6.25 134.13 128.54 162.58 301.29 7-977 379.01 701.23 3T~ Work in progress 8.21 12.80 10.94 '1.67 39.89 69.23 162.48 293.44 294.13 343.19 1:06.98 26.83 79.72 orrent Assets -.Csh and Banks operational requirements 1.32 1.98 2.49 2.63 8.39 1t.99 19.59 20.14 18.898 18.59 16.14 12.41 15.02 Temporary surplus 0 0 0 0 0 0 0 15,31 13.17 20.69 10.67 11.50 2,09 - Accounts receivableb/ 2.77 3.66 4.42 8.56 9.75 12,14 11.11 10.76 13.29 11.04 15.62 17.17 18.91 - Inventories z.45 2.72 3.11 3.94 5.26 5.43 8.84 8.08 13.57 16.92 18.46 33.75 35.44 -Othesr crreent 78 .58 1.28 2.03 .22 .36 1.07 1.90 1.00 1.00 .88 .10 .10 Total 3.32 8.94 11.30 12.16 23.62 29.92 40,61 -5,29 59.91 -70.94 61-i.77 -74.93 4T8895 2toer Assets 5.42 5.80 6.06 6.44 7.55 9.00 9.24 7.74 6.24 4.74 3.24 1.74 ,25 ,MPAGUA receivable 2 0 0 0 0 0 4.02 2.58 1.68 78 0 0 0 TOrAL ASSETS 90.93 9947 109.53 527.53 137.35 21 ,28 855.00 894.73 926,79 LIABILITIES - apital 48.82 51.38 55.62 62.16 71.85 98.43 171,83 141,54 283.54 283.54 283.54 283.54 283.54 - Retained earnings 16.14 19.09 20.52 23.44 Z6.66 32.27 33.90 44.22 83.52 132.01 178.11 233.62 '99 08 Tota9 6 7r47 786.34 85.60 9T8.51 130.30 21 1.73 28-5.74 360.06 415.55 y6:g5 51776 Long-term debt 19.16 22.64 24.74 32.06 46.83 58.66 86,07 103.07 260.50 334.42 356.26 343.64 314.34 .lurrent Liabilities - Accounts payableb/ 2.14 2.31 3.79 5.05 5.49 13.63 36,93 41.22 30.87 26.66 19.26 9.11 13.16 - Other current 3.39 2.71 3.03 2.81 3.87 6.00 6.68 7.21 7.79 8.42 9.09 9.82 10.60 Overdrafts I 0 0 0 0 0 0 .65 .05 .4 .24 .22 1.00 Total 5.53 5.02 6.82 7.86 9.36 1T.63 T3,61 49.29 -38.71 30.22 2T8.59 19.15 2476 osumer Contributios 1.06 1.15 1.33 1.67 2.24 2.84 3.06 3.29 3.53 3.78 4.05 4.33 4.62 ther liabilities .22 .19 .10 .34 .37 .45 .42 .45 .45 .45 .45 .45 45 TOTAL LAILLTIES 90.93 99.42 129.33 521.53 957.31 21258 344.8 521.63 683.25 789.42 851.00 684.23 926.79 See Tables Ai to A4 for the separate financial pro-ections for INDE and EEG from which the consolidated statements are derived. The footnotes to those table eplain the proj tion methodology. b/ Eaclodes INDE's account receivable from EEG, which is EEG's payable to INDE. Power Sector : INDE and EEG Projected Tariff Levels 1978-1983 (cents/kWh) 1977 Atual - 1978 1/1979 19B0 -981 1982 !983 Average Tad of Year Average End of Year Aege A 777ge Aerage avege Average <3 other sales:(//'Wh) 6.08 6.23 6.69 7.43 8.00 . 8.55 8.55 8.55 8,55 - oles:(c/kWh) 5.58 5.91 6.35 7.06 7.59 8.12 8.12 8.12 8.12 :LE sales to EEG:($/kWh) 3.84 4.02 4.50 4.74 5.15 5.55 5.55 5.55 5.55 / Tariff increases for INDE and EEG sales are 107. effective May 1, and 8.5% effective December 1. The tariff increase Sor 11DE sale, to EEG is 11 effective May 1. - 42 - CHAPTER 6 ECONOMIC ANALYSIS Least-Cost Solution 6.01 During the Bank appraisal of the Aguacapa power project in March 1976, the least-cost generation expansion program for the sector in the period 1979-1989 was identified as consisting of the Aguacapa and Chixoy hydroelectric projects and the Moyuta geothermal plant. Since that appraisal, the Chixoy project's estimated cost has increased by 17%; the planned Moyuta geothermal plant has not proved economic because of inadequate steam temper- atures; a combined cycle thermal plant (para. 4.01) has been added to the program; and construction of the Chixoy project is underway. The adequate system reserve margins incorporated in the original program would be main- tained with the proposed combined cycle plant, which would in addition result in reduction of investment and operating costs. Consequently, the program segment to 1982 (when additional capacity would be required) is even more attractive than the originally defined least-cost program. According to the recent report (July 1977) prepared by the Master Plan Group, the Serchil hydroelectric plant (110 MW), which would be operated for peaking, would follow Chixoy. In order to determine whether Chixoy has been a sound invest- ment decision, a retrospective economic comparison was carried out using 1976 as base year. The Chixoy-Serchil program segment was compared with an alter- native program consisting of the only feasible alternative to meet the load in 1982, i.e., a steam generating plant to be commissioned in that year, followed by the Xalala hydroelectric plant (installed capacity 348 MW, firm 227 MW) which, from the Master Plan study, has generating capabilities similar to Chixoy and could be commissioned by mid-1985. The result of the comparison shows that the Chixoy-Serchil program has a lower cost at discount rates below 13%. The Chixoy-Serchil program was further compared with an all thermal program composed of four steam generating units, to enter in operation sequen- tially between 1982 and 1985. The latter comparison shows that the Chixoy- Serchil program is a lower cost alternative of discount rates below 18%. Treating the 1977 investment (US$75 million) in Chixoy as sunk cost, the Chixoy-Serchil program, compared to the thermal-Xalala alternative, has a lower cost at discount rates below 21%. A summary of the comparisons is shown in Table 6.1. 6.02 Government informed the Bank during negotiations that it was considering two changes in the investment program identified in the course of appraisal. The first would be the addition of a hydro plant of about 50 MW (Santa Maria II) I/ to the program. The second would be to advance the work on the next major project after Chixoy (which might not be Serchil because, according to INDE, recent geological investigations have indicated that it may be less attractive than other projects under study). A decision to proceed with Santa Maria II and earlier construction of the next project 1/ The proposed plant would be located at the site of the existing but inoperable Santa Maria I hydroplant near the city of Quezaltenango; would be designed as a run-of-the-river station by utilizing the waters of the Samala river; and, through a drop of about 450 meters, develop between 30 and 50 MW. - 43 - might be justified if sales growth is substantially higher than forecast in Chapter 3. If the results of the study of the feasibility of supplying Exmibal from the central system (para. 3.02) demonstrate the justification of such a link, however, additional capacity may be required earlier than presently anticipated. If increases in the demand on the interconnected system cannot be substantiated, however, the program with such modifications is likely to be less economically attractive than the present program (which envisages commissioning of the next major project in 1987). The uncertainty on the proposed new investments cannot be resolved until further studies, presently being prepared by INDE and its consultants, are received and reviewed by the Bank. Assurances were obtained from INDE that until the completion of the Chixoy project INDE will inform the Bank of any proposed capital expendi- ture in excess of US$5 million 1/ for investments not included in the expan- sion program (para. 4.02) and furnish to the Bank, within a reasonable period before the proposed date of such expenditure, a report for comment showing the economic and financial justification of such expenditure. This provision amends the more stringent requirement under Loan 1426-GU, wherein the Bank reserved for itself the right of approval of projects not included in the expansion program. During negotiations on the proposed loan Government representatives requested the change stating that the previous provision had complicated Congressional ratification of Loan 1426-GU. The revised language was accepted in view of the provision of the proposed Guarantee Agreement (see para. 1.17(a)), under which Government agreed to take all action necessary to coordinate expansion and operation of generating, transmission, and distribution facilities of all electric utility entities, operating within the interconnected system, in order to prevent waste of energy, duplication of facilities and unnecessary investment, and ensure that expansion of such facilities is based on economically justifiable programs. This requirement would cover both INDE and EEG investments in the interconnected system. Return on Investment 6.03 The return on investment for the 1978-1982 investment program has been estimated to be 13%. This return has been calculated by equating the present worth of the stream of incremental system investment and operating costs associated with the program with the present worth of benefits as measured by forecast revenues from sale of electricity at the retail level and fuel savings (Table 6.2). The main uncertainties which may affect this return are those associated with large civil works projects (which should be adequately covered by the physical contingency allowances) and the possiblity of lower- than-expected sales revenues, which could result from failure to raise tariffs as required to comply with the revenue covenants or lower than forecast growth in sales. Finally, as noted in para 6.02, the Government may decide to under- take additional generation investments which would reduce the benefits from fuel savings and sales revenues attributable to the projects comprising the 1/ Increased from US$1 million under Loan 1426-GU to reduce the frequency of Bank involvement. - 44 - present program. 1/ Should investments on the agreed 1978-1982 program be 10% higher than estimated and sales be 15% lower than forecast, the corres- ponding return would be 11%. 6.04 The above calculations probably understate the benefits of the project as the electricity rates, which were used as the measure of benefits, may not fully consider the indirect benefits to industry and commerce, whose production and employment depend on a reliable electricity supply, or the benefits of residential and public uses. However, even on the basis used, the range of rates of return obtained for the program indicate that it is economically justified, and that electricity prices will, on average, be in line with incremental system costs, suggesting that wasteful use of energy will be avoided. The tariff structure studies referred to in Chapter 1 will permit Government and the utilities to introduce adjustments to eliminate any distortions which may be identified in particular tariff categories. 1/ If Government decides to develop Santa Maria II for commissioning by 1982, the return on investment would be about 12%. The impact of advancing the next major project does not show up in the present calculation, since such a project could not be commissioned.by 1982. - 45 - TABLE 6.1 INSTITUTO NACIONAL DE ELECTRIFICACION (INDE) COST STREANS - LEAST COST CUIPARISON I. Chixoy Hydroelectric Project (300 MW - 1982) Followed by Serchil Hydroelectric Project (110 EW - 1987) ----Investment----------- ---------Operation and Maintenance ----- Serchil Total Generation Transmission Total Total Costs 1 1977 74.98 - 74.98 - - - 74.98 2 1978 67.36 - 67.36 - - - 67.36 3 1979 58.42 - 58.42 - - - 58.42 4 1980 60.72 - 60.72 - - - 60.72 5 1981 41.62 - 41.62 - - - 41.62 6 1982 11.61 - 11.61 - - - 11.61 7 1983 - 15.00 15.00 2.10 0.53 2.63 17.63 8 1984 - 45.00 45.00 2.10 0.53 2.63 47.63 9 1985 - 60.00 60.00 2.10 0.53 2.63 62.63 10 1986 - 22.50 22.50 2.10 0.53 2.63 25.13 11 1987 - 7.50 7.50 2.10 0.53 2.63 10.13 12 to 50 - - - 3.10 0.80 3.90 3.90 II. Thermal Plant (2 x 70 MW - Unit No. 1, 1982; Unit No. 2, 1983) Followed by Xalala Hydroelectric Project (348 MW - 1985) Fherml 0 &M FuelA XalalAl 0 & M Transmission Total Costs 1 1977 - 2 1978 - 3 1979 8.44 - - 16.90 - - 25.34 4 1980 18.57 - - 25.30 - - 43.87 5 1981 20.26 - - 46.40 - - 66.66 6 1982 15.18 - 20.71 73.90 - - 109.79 7 1983 5.05 1.11 32.96 31.70 - - 70.82 8 1984 2.22 36.53 14.05 - - 52.80 9 1985 2.22 27.01 5.45 - - 34.68 10 1986 2.22 12.64 - 1.17 1.63 17.66 11 1987 2.72 12.64 - 1.17 1.63 17.66 12 1988 2.22 34.40 - 1.17 1.63 39.44 13 to 23 - - 2.22 34.42 - 1.17 1.63 39.44 24 2000 8.44 2.22 34.42 - 1.17 1.63 47.88 25 2001 18.57 2.22 34.42 - 1.17 1.63 58.01 26 2002 20.26 2.22 34.42 - 1.17 1.63 59.70 27 2003 15.18 2.22 34.42 - 1.17 1.63 54.62 28 2004 5.05 2.22 34.42 - 1.17 1.63 44.49 29 2005 - 2.22 34.42 - 1.17 1.63 39.44 30 to 50 III. Equalizing Discount Rate = 13.0% IV. All Thermal Schee 4 x 70 MW (Unit No. 1, 1982; Unit No. 2, 1983; Units Nos. 3 & 4, 1985) 1 1977 - - - - - 2 1978 - - - - .- 3 1979 8.44 - - - 8.44 4 1980 18.57 - - - - - 18.57 5 1981 36.76 - - - - - 36.76 6 1982 34.98 - 20.71 - - - 55.69 7 1983 24.85 1.11 32.96 - - - 58.92 8 1984 9.90 2.22 36.53 - - - 48.65 9 1985 - 4.39 55.81 f/ - - - 60.20 10 1986 - 4.39 70.21 - - - 74.60 11 1987 - 4.39 70.21 - - - 74.60 12 1988 - 4.39 92.02 - - - 96.41 13 to 23 - 4.39 92.02 - - - 96.41 24 2000 8.44 4.39 92.02 - - - 104.85 25 2001 18.57 4.39 92.02 - - - 114.98 26 2002 36.76 4.39 92.02 - - - 133.17 27 2003 34.98 4.39 92.02 - - - 131.39 28 2004 24.65 4.39 92.02 - - - 121.26 29 2005 9.90 4.39 92.02 - - - 106.31 30 to 50 - 4.39 92.02 - - - 96.41 V. Equalizing Discount Rate = 18%. a/ Excluding US$5.9 million of 1976 expenditures (sunk costs). Audited confirmation of 1977 expenditures not yet available; actual expenditures are expected to be lower than estimated amount, therefore, the results shown in above comparison slightly penalize the Chixoy-Serchil program. b/ At 0.77. of investment for hydro; 3.5% for tramsmission; and 3.3% for steam units. c/ At US480/kW for Units Nos. 1 & 2, and US$470/kW for Units loo. 3 & 4. / Chixoy average annual generation (1720 GWh) at US$0.024/kWh (new steam unit at Dec. 1977 price (US$14.4/barrel)); Serchil average annual generation (325 GWh) at average generating cost (US$0.043/kWh) of new gas units - Diesel at US$18.9/barrel; less Xalala's average generation at generating cost of new steam unit--US$0.024/kWh, and scheduling Xalala's initial operation on July 1, 1985. e/ Increased by US$2.7 million to cover larger (60 MVA) substation required for Isala. f/ Increased by Kalala's average annual generation (1200 GWh), valued at generating cost (US$0.024/kWh) of new steam unit. January 1978 INSTITUTO NACI0NAL DE ELECTRIFICACION (INDE) COST AND BENEFIT STREAMS-RATE OF RETURN 1. COSTS - in million US$ ----- Investments-------- -----------Operation and Maintenance----- Transmission Increase in Total Total Cost Chixoy Generating Subtrsnsmission Total Cost if Investment with Invtment Year Project Other Total Stations & Distribution Sub-total Costs Cost 107. Higher Cost 10% Higher 1 1978 67.36 80.44 147.80 0.18 0.56 0.74 148.64 14.78 163.42 2 1979 57.42 49.90 108.32 1.05 1.16 2.21 110.53 10.83 121.36 3 1980 60.72 41.28 102.00 1.05 2.33 3.38 105.38 10.20 115,58 4 1981 41.62 21.85 63.47 1.05 2.94 3.99 67.46 6.35 73.81 5 1982 11.61 23.10 34.71 1.84 4.77 6.61 41.32 3.48 44.80 6 - 25 - - - 2.63 4.77 7.40 7.40 - 7.40 II. BENEFITS ---------------------- Savings - Fuel --------------el.----- Revenue Total Benefits Total if Sales if Sales 151 Increase in Total Revenues due Combined Cycle Plant Ag.acapa Hydra Chi.oy Hydro Total Savings Benefits 15% Lower Lover Sales over 19/7 h6US e16US 106US$ 106US$ (C0Wh) GW82hh 15S$ c/ Wh6 10'S GWh/ 14 10 H$ g110 1$ 10 3§$io- ~ 1 1978 105 - 75 0.45 - - - - 0.45 0.45 - 0.45 2 1979 224 - 450 2.70 277 13.85 - - 16.55 16.55 - 16.55 3 1980 350 - 450 2.70 395 19.75 - - 22.45 22.45 - 22.45 4 1981 491 - 450 2.70 395 19.75 - - 22.45 22.45 - 22.45 5 1982 633 - 327 1.96 395 19.75 860 20.64 42.35 42.35 - 42.35 6 1983 791 - - 395 19.75 1369 32.86 52.61 52.61 - 52.61 7 1984 953 - - 395 19.35 1720 41.28 61.03 61.03 - 61.03 8 1985 1133 - - 395 19.75 1720 41.28 61.03 61.03 - 61.03 9 1986 1315 - - 395 19.75 1720 41.28 61.03 61.03 - 61.03 10 1987 1508 - - 395 19.75 1720 41.28 61.03 61.03 - 61.03 11 L988 1766 105.43 - - - - - 105.43 89.62 89.62 12 L989 2018 123.47 - - - - - 120.47 102.40 102.40 13 - 25 120.47 - - - . - 120.47 102.40 102.40 a/ At 0.7% for hydro; 3.3% for thermal and 3.5% for transmission and distribution. h/ Valued at average sector tariff (US$0.0597/kWh) of 1/1/78. Chixoy capacity would be needed from 1982 onward but since the corresponding energy would be negligible between 1982-1987, Chixoy benefits have been valued only as fuel saving in this period. c/ Vslued at Us$0.006/kWh (difference between generating costs for existing new and old steam units - US$0.027/kWh - and combined cycle generating plant - US$0.021/kWh). d/ Since plant would be operated for peaking, savings have been valued at average generating cost of existing new and old gas units, US$0.05/kWh. e/ At average genera ting costs of existing new steam unit, US$0.024/kWh. t - 47 - CHAPTER 7 SUMMARY OF PROPOSED AGREEMENTS AND RECOMMENDATIONS 7.01 During negotiations agreements were reached with Government and INDE on the following points: - With Government, that it will: (a) cause the power sector to take all action necessary to: (i) coordi- nate the expansion and operation of generating, transmission and distribution facilities of all electric utility entities operating within the Interconnected System in order to prevent waste of energy, duplication of facilities and unnecessary investment; and (ii) ensure that expansion of such facilities will be based on economically justifiable programs (para. 1.17(a)); (b) carry out the power sector reorganization and use its best efforts to complete it by December 31, 1979 (para. 1.18); (c) put into effect by June 30, 1980 a program aimed at controlling erosion in the watershed tributary to the reservoir to be formed by the Chixoy dam (para. 4.18); (d) cause EEG's construction expenditures to be limited to $11.5 mil- lion in 1978, $5.9 million in 1979, $6.1 in 1980, $6.4 in 1981, and $1.7 in 1982 (para 5.12(a)); (e) cause revenues of the power sector to be sufficient to finance sector investments from internally generated funds no less than 13% in 1978, 16% in 1979, and 18% thereafter until the Aguacapa project has been completed, and achieve an 8% rate of return on annually valued assets thereafter (paras. 5.06 and 5.18); (f) cause power sector accounts receivable from public agencies to be reduced to two months of billings by December 31, 1978 (para 5.07); (g) make loans, or cause loans to be made to INDE or make contri- butions to INDE's equity aggregating to not less than $36 million, $23 million, $19 million, $17 million, and $17 million during 1978, 1979, 1980, 1981, and 1982, respectively; provided, however, that such Government contributions to INDE during 1978, 1979, and 1980, amount to not less than $22 million, $14 million, and $5 million, respectively (para. 5.11); (h) cause EEG to transfer to INDE all funds available to EEG in excess of EEG's requirements for operations, repayment of debt, net working capital and capital expenditures (para 5.18(c)); - 48 - (i) cause power sector rates to be adjusted automatically to cover additional operating expenses resulting from variations in the prices paid for fuel by the power sector (para 5.18 (d)); and (j) not reduce power sector rates without the agreement of the Bank before the project is completed (5.18(e)). - With INDE, that it will: (a) cause consultants to carry out a tariff study and to complete it by July 31, 1979 (para 1.21); (b) carry out a study with consultants on the feasibility of supplying Exmibal, located in the Atlantic coast, through the Interconnected System, and complete the study by March 31, 1979 (para 3.02); (c) furnish to the Bank by December 31, 1979 a program of action to adequately compensate and, if necessary, resettle, those residents of the area to be flooded by the Chixoy reservoir (para 4.18); (d) present to the Bank, not later than December 31, 1979 a program aimed at controlling erosion in the watershed tributary to the Chixoy reservoir (para 4.18); (e) make arrangements by June 30, 1982 to cause the dam, waterways, and earthworks included in the project to be periodically inspected (para 4.20); (f) not incur any debt without the agreement of the Bank if its most recent 12-months internal cash generation is less than 1.5 times the maximum debt service requirement in any future year (para. 5.12(b)); and (g) (i) inform the Bank on any proposal of INDE to make any capital expenditure for its expansion program, other than expenditures required for the agreed program; and (ii) furnish to the Bank within a reasonable period before the proposed date of such capital expenditure, for comment, a report showing that such capital expenditure is economically justified and financially sound, and that financing is available under terms and conditions which will not adversely affect INDE's financial position, the carrying out of the project or any other power project financed by the Bank (para 6.02). 7.02 Before declaring the loan effective, the Bank should receive satis- factory evidence that the subsidiary contract between Government, INDE, and EEG has been amended to reflect therein the execution and delivery of the Loan and Guarantee Agreements of the proposed loan and that the satisfactorily - 49 - amended subsidiary contract has been duly authorized or ratified by, and executed and delivered on behalf of, respectively, Government, INDE and EEG (para. 1.18(c)). 7.03 With the above agreements, the project constitutes a suitable basis for a Bank loan of US$72 million equivalent. The loan would be repaid over a period of 17 years, including 4 years of grace. June 1978 INDe' INCGE _ST_ATEMENT AND SOURCES AND USES OF FJNni T2 Al INC.M STATEMENT Q00,000 1971 1972 1973 1974 1975 1976 1977 1979 1979 1980 190 1992 1993 7 - SALES IN GWH o/Actu data hae taken Tron IDR' audited tinni srtafns for 1971-1976 nd ...dited ___ _----rt-statemets f-r 197/. 1977 funds flow figue ar prlm. ay Re...fcto hsbe BULK TO EEG 324.4 373.8 457.1 480.6 494.2 531.1 6n3,6 683.0 964 0 1063.0 90 1364.0 1474.0 '-ade a rtequr for the 00 of 7.ono lidation OTHER SALES -__A2 --- 53n4 _ _61.2 _---0n2 --112-3 -_1320 --1656 --2030 -22.0 _-222.0 _-Sä3450 __322.0 --440rp TOTAL 370.3 427,2 519.3 561.3 611.5 669.0 049.2 0060 211.0 0355.0 1536.0 1756.0 1922,0 b/ bl Solen volu.me are t sae hs s-hown n Chapter 3, Table 3.1. REVENUE/KWH SDLD _/ In aEordac with se-tion 5.03 of the Aganapa Lon Agreement (1426->1 this pri0 nill be -1t, year i sh a a ~oransfer toI llNDE EEG fund i.n ees of EEG' LK TO AEE-CENTS 1.720 1.770 1.660 2.810 3.020 3.523 3.039 4.498 5.154 5.550 5.550 5.550 5.550 £ rrement fooerto repayment of dlt, net wki,ng cpital, and capital 0x20nd1tur09 OTHER SALES-CENTS --3250 --3-200 ..30 -4200 __3.610 --4-703 -_*6.022 __60622 --D001 -_6540 --.541 _8.542 --B-5AO 6 AVE REVM/H SOLD 1.971 1.987 1.929 3,009 3.132 3,766 4.276 5.000 5.734 6.196 6.223 6.219 6.240 d/ t.e T,ln 3.4 fo assumptions osed Lo 1rojing average tarn~iff l l from 010 onwardo. Theso ariffsoexludernue n-raed thlroghl pplication of the power se.tor fue adeustmentclause. A62 PRICE PER KWH 1.971 1.987 1¯929 3,009 3.132 3.766 4.276 5.000 5.734 6.196 6.223 6.219 6.249 PERATING REVENUES / Prjecd fr relinary alysi ,O ponel nees lo 197-1983 by 0000, and the -.990 00001 asumptn of L`n ae In tho ara salary of 20. in 1008 (doro sub n tantal nree gant- 9ALES TO EE 559 646 756 1350 1493 1871 2624 3072 4960 5900 6610 7570 9190 of rivll servant 0arly l nlth yar) And 8% p., On 1979-83. INE1 prIlininary analy,Is of OTHER SALES __--122 ---222- 40 ...339 --...423 ----649 _--102 --1358 -.._122 ---2826 ---228 -.-....3351 -...3830 Personl nes il a- f-ollows: 1976 177 197 1979 1980 1981 1982 TOTAL 02400 REV 730 046 996 1629 0906 2520 3631 4430 6944 1390 9559 10921 12011 Prmnent saff (ntbr) 0288 1323 1523 1103 1673 ¯1750 103. UTHER -----11 -----42 -----9A -----3 _--56 -___-94 --_20 ---22 -----05 ----_23 ----12 ----113 ----124 TOTAL .---2å2 ----822 ---10a5 ---1225 --..1222 ...--2604 ...---3201 -..502 _...-2022 ---02 _--2661 ...-11034 --12135 f/ See Table A6 fTo IND's projectd f~el nosts. Futl -ot ore based dn year-rd 1977 funl prie- because o. f rE dofficulty ot prot fuel prce in Guatemala. Thea fuel adjustmen DPERATING EXPENSES aueapidbth eorwudalwrcvrofnynras. SALARIES- 230 276 303 341 218 267 323 432 493 552 624 723 817 2/ 6/ Thio is the non of materials-cost proJ-liono fr each nO INDE nRating plants, its trans- FIKEL 91 148 225 756 1136 1356 2429 2110 1038 1045 1504 116 113 ission ods ond its distribution works, horod o 1971-1976 hostorical dan, Fr 1971-1974 MATERIALS 0 0 0 0 60 08 90 90 99 123 147 226 230 ~tiarialnrootisionclded n a ADMINISTRATION 0 0 0 0 120 172 203 221 240 260 281 304 328 hd OTHER NON-CASH E¥P 15 16 17 16 19 22 26 150 150 150 150 150 149 lt/o 1971-1974 ot s inlded 00 " hlies". Administration 0001ude adminstrative oalry DEPRECTIIDN ----....162 ----13 .. 202 --.--235 ......-222 ---25 ..-412 ---.543 ---825 --1132 --1542 -..2420 ---2992 2/ 0o. It ns expected no increase an nhe annoual p-r~c escalaion rae a9sumed Tom -local TOTAL ---- 503 .---625 --...252 ...-1350 ---15 ---2128 ...3483 ---3558 ..2n46 .- ..3262 . 249 -.3230 -421 supplae in t investment program (9% n 197-79, 3~ --o lu..29). tPERATING INCME 239 247 293 370 177 434 218 949 4083 5222 5413 7995 7510 95ER INCDME NET ---=t9 - ----=2 1/ Othernon-cash expenses co.onts of the a=art 1zat00n of "othear asst" (see 0NDE'= balance HET INCOME BEF INT 231 234 237 327 124 371 161 687 4117 5150 5335 7011 7421 eheeta). T e fomecan asse that InE illO amortize oeix-year pro d beginning in INT CHAR9ED OP -., ..-104 ---112 ---. 123 ---~121 ..___- 122 ----112 ----252 ----318 ----..,95 ---1140 ---1206 ---2032 0978 ohe aumul-ted nale nf tudis (Q 8.90 millin) largEly relatng aa the Atitlon powar 'SgT 0901090 132 139 125 294 3 249 49 635 3799 4165 4195 5105 5399 projea- and the Moy.ta geOthernal paoject, af inh hane ben abandonad, jf Provlson or depreciato wil oInEo I a-d at ex.stn -rae hich are r ~aonble. ey ar ~ummared a - d~ydro plant 25 Other-generating plnt, 5.0 Transsion. and distr-bution 4.0 Buildngs 2.5% _1kNo-operatng incamr/(expens ~onsiss malofrental ad nce from oemErary invstent an surpluo rash. It,aloinldt, omissor. aahleo h Bano da Guoatemal at the nate of 3.500 0on~ INDE00financarnsacton, whichn outweig its misellanous inomeo. The na rpen.e s rojected to0grow 00 00 in~1978-83. 17 Ser INDE'. debt suEary, Tbl A2. SOU1CE A0ND USE-9 09 91911/ e Changas l other liabiliti-s. Q 10.000 n/ Prla-minay figure for 1983. -n .. - 1m.g,OTEo nf Ths tol 1970 budaoted Gnornment equty onrbuoan nI Q70 n,lion In 19008l islsow nnr net of 1973 1974 1975 1976 1977 1979 197¯9 7 19W3 INDE's 0ebt o the Governent of (14.00 million at the end of 0000. 0ERNAL 90DURC0EB _Pd- fl.w data for 19/ are prelImary. -*ET INCOME BEF IN ¯ 234 237 327 124 371 161 8117 4117 5150 5335 7011 22500 7421 -IEPRECIATION 183 207 235 242 265 412 543 825 1037 1542 2420 6467 2987 -OTHER IN 060H _.- 1_- 12 - 12 - .22 - 26 --.-150 --..-15û -__- 150 .......15 - ----250 -..-149 TOTAL 433 460 579 385 65B 599 1510 5092 6437 7027 9581 29717 00557 WERATIONAL RE- GUIREMENTS78 114 71 9 58 16 -2 -WUK0NO CAP W/ CAS 32 -20 298 -365 -662 -1472 -706 1014 721 922 2597 5176 -220 -fEPAYMENTS - 75 78 102 126 242 301 633 955 882 1569 182 5921 2699 8/ -INTEREST _-__104 ---112 ----123 ---121 ____122 ----112 ---22 _-_-318 ----25 ---114 ---1906 ---4621 ...2032 1/ BLBTOTAL ----211 ----120 --_. 523 ---=11B ___222 --=1052 --_-122 _-2882 ---2569 ---3621 .__6325 -15628 -_-500 NET CASH E9NERATIO 222 291 55 503 956 1651 1403 2205 3849 3356 3206 14019 6048 -0aTER CANGES 3 9 -24 -3 -8 3 -3 0 0 0 0 -3 0 -CHANGE IN CASH 42- 12 _-33 .-423 __-0-82 .-031 _...=lS _-222 ---=10 --=228 -=432 = _. 1231 _ 23 HET AVAI LABLE -9 123 32 FROM OPERATIONS 172 265 112 33 80 617 1565 2427 3989 3634 3636 00253 5125 CCNSTRUCTION _REQUIREMENTS7 -000OING WORK 765 883 1204 2146 3443 4342 7632 3690 696 755 942 13909 075 -PROSED PROJECT 07 106 B7 284 593 5973 6989 7376 799B 0350 1468 29161 0 -FUTURE PROJECT 0 0 0 0 0 0 1059 2210 2758 1374 1673 9074 6300 1 -INT DUR CONSTR 04_-- -- --- ---1 ---- 620 ---1256 ---1022 _-112 ~_324 ---11431__ TTAL ----n852 ._282 --- 1221 ---42330 --10511 _163D& --14532 -_12å66 .-621 --_4402 --5652 --2025 BALANCE TO FINANCE 680 724 1179 2397 3156 9894 14730 12105 967 4997 769 41275 1250 FINANCED BY: -LOAN. 423 289 539 1448 1274 2729 9899 a591 9527 3985 852 31954 0 -0EULTY --252 ---2 --__.632 _--_968 ---2236 --__223 ___6321 _ -3300 -20 ----0 ----0 -10521 ------ o/ TOTAL 6B0 737 1176 2400 3510 10712 06270 1191 9427 3985 052 42425 0 OTHER APPLICATIONS 0 13 -3 19 354 018 0 0 0 0 0 0 0 E/ SURPLUS(DILFICIT) OF FUNDS 0 0 0 0 0 0 131 -214 752 -1002 83 1150 -1790 -ACCUULATED 0 O 0 0 0 0 0501 1317 2069 0067 115n 1050 -100 NET CASH GENMER AT I N/ 07 5 9, -CONSTRUCTION RE 26 29 4 71 24 / 16 9 15 30 09 73 25 85 -FLNT IN OFR 0 4.2 4.5 7.0 7.1 10.6 03,9 9.7 7.6 10,5 9.0 3,9 7.0 7.2 I:iUL'в BAIA`1СЕ SHEETS АИр ➢Е➢Т SТАТЕМliиТ ?/ � А TAHLE А рgВв INDE BALWCE SвЕЕТS q 10,Ооо а! Accw1 алса Ьая ьееа [аые¢ from wpE'в аиаlгеа Е3папс1яl ч в Еот 1971- 19]6 апд uvaudlced s в tor 1Ч)]. ReclasslflcaCloe has Ъееа таде as теqиlтвд £ог Che purposc ok соп5п1ц1ат[iоп. 1971 19]г 177з 19Ja 1975 1976 1977 1978 1779 19в0 1ve1 19BZ 19Вз ыаlв ь7 е1�ва аьваеь ата гяггlва аг сЬе+г ас9и1в1[1оп (Ъ1н[огlсаl)совг. А88ИТ5 - с1 cash ьаlапсе претяипп reyulтesencs аге ргоlессеа яг сме га[е оЕ 5ю (one тл¢гь) оЕ еЪе PLRNT IN OFERATION 9933 5261 Ь939 6680 70Ч� 8991 1104Ь 14482 28945 36703 38945 В136] В3542, Ь/ fu11ov1ug costв: salar3es, fue1, тнгегiяlв, adminlяtratlo¢ а¢д ео[а1 еопь[гиегlоv тв- LE95: BEFRECIAT30N .___230 __..1129 ___1364 ___1845 -__233В ___2ВВ1 ___324G __112У2 qulremmts. The сетРогагу чиерlиь 1s the д1££егепсе Ъе[иее¢ воигсев а¢д иеев оЕ Еи¢дн, ----416 ---1Ы7 ___9В43 ___Ь385 ___8Вр5 on the саsЪ flav statemenC. If thue 1в а¢ NET FLANT 4203 4345 5315 5311 5475 7096 950В 11601 �5239 318Ь0 32560 725Ь2 71750 нhоvп л.ч [Ъе аспишиlа[ед surplus of ЕиМь ч асситиlагед деЕlсlг о£ fuvds, thls 1в ehmav аь "overdraf[e" и¢дех сихтеаС 11a6111t1ee. ЧОКК IN PFOGFE55 807 1267 3036 'О33 3928 Ь7В8 15^_43 ?В911 28980 33886 40265 2250 7150 д/ 1НDь's е<eivaбle Erov EGG hлв Ьеел Ргпjессед а[ 11% оЕ INOE'в т ие frew CUftRENT ASSET5 EEG; lгahasuбeev в[ арртохiтв[е1у thiв 1eve1 ехсерС иhev Che вverage prleeeEEG раlд[[о -САSН Аир BANKS INDE rnse яhягрlу 1¢ 19]4 (дие [л the гlее 1п п11 ргlсеч), 1v vЪ1ch year СЬе ассоии OFERATIOMAL hERU ]4 321 13В t05 57В бб2 169:5 1534 1312 1172 ВЧ9 q62 А85 £/ гесагvаЫ е stood а[ 17S of TNПF,'н няlеч [о НеС. TEMPORARY SUkP 0 0 0 0 0 0 0 1331 1317 2Ub9 1067 1150 0 е/ 2илЕ'ч а о в т celvaбe froa ocher ввlев have Ьеео ркоjас[ед а[ 30% о£ о[hвг ваlев -Асс0иит АеС е5г, so ьs s9 251 1з9 171 4гь Ззв s4ь ь49 727 еЭз 9оо 1 - геуа ие а�аио�Ъегег ае с 3п 19]а, гь% 1п 1979 апа vz (".л т¢сьв> 1а 19sо-19Вз. тье -RCC'Т3 ftEC OTHEft 96 119 137 147 151 254 415 430 495 440 519 589 6]2 fa11 1п other а с¢ипtв гвсеlvаЫе 1в екресtед [о оее т вs в ви1[ о£ actlo¢ Ъу -хиvЕитОВIЕS 3ь3 19г zz3 zзz 29ь Эзв ьоз 492 9В4 1248 132а 27ЬЬ 2в4о � covar®апс [ геаисе гнпЕ'в аггаил[в гесе3няЫе £тотириЪцс sевсог аgеы3ев, иь1еЬ о _ -OTHER CUfYRENT _____69 52 114 14З _____13 -_____В В______0 ______р ______р � вгоод в[ арргохlта[е1у Q Э.1 т1111оп (350 даув) аС Che е¢д о£ 1977. _____ '___ -___ ______ _"___р _-_---и __-_'_0 / TBTAL 447 549 6]Ь 927 1177 1433 Э137 4325 4654 557В q531 5800 5097 Е/ Рто.7есСед аг Э.47. of илтеяяlиед Ктчч р1т[ 1¢ орега[1оv о¢ tha Ъавiв of hletarlul OTHER Аа5ЕТ5 ____525 ____525 ____бр? ____643 ____259 ____g44 ____423 ____223 ____62Э 9Z3 ____323 ____12З _____29 JJ япяlувtч ot [his га[1о 1¢ 1971-77. ТПТАЕ 5982 Ь736 ]629 8914 11334 16216 ?9811 45610 59496 71797 77679 В0785 В4021 - _______ _____'' _______ ___---_ __°___ _______ "_'°®: _"___' _"'-_'-- ____-__ ртерв саре¢5ев геко ЕIАВппхвs ------- ------- ==='O" ______- '°'_" ______= g/ Thaea вта 3а лпа лтогииЫе ааввга avd ьаvе ьееа ртоfеесеа ае � ___________ 1е the future. EOUITY h{ 'Л.iя сппя3нсн leegely of [he аегитиlа[ед value of в[идlеа (Q 8.99 тц11я¢ 1¢ 19]6) -CAPiTAL 3913 збб9 4113 479] 5пб 8374 1ьЭV ?2ьеВ 2598В 2ЬВВВ 2Ье88 2ьеее гбаее f/ largely eelauvg го гhе Аг11яп Рп„яг чго{еес в¢а те моуиса 8еогьектаl ртоlегс, -RETAINEp EДRNIКGS -___А29 ____609 ____Z22 ____426 410 ___1159 .__120В _-_18Ф3 ___5Ь92 ___4В02 __19рП2 -_1$102 -_29446 � ' vhlch hяve Ъе-еп лИвпдппед. Theee аге wr1C[еп off ovex а вц уеат ретl.од. TOTAL 3887 4273 4835 56%3 6626 9533 17525 29531 31Ь30 ЭЬЬ95 40890 95995 51384 i/ Capltal lvгreaees 1v INDP. соггеsравд [а Goverwavt со¢гг1ЪиС1о¢в. LBNG TERN ➢ЕВТ 1916 2264 2q]4 2911 4233 536Ь 7827 17093 24729 32З]9 34790 33760 31062 � Сив'NT LIABIL7TIE5 ,i/ 5ее IBDE'в deбt atatrmeпc be1w. -ACCBUNTB PAYAALE 198 172 265 25% 368 1156 32Ь4 37J6 2914 2490 1796 7Ь0 1187 k/ k/ АссоиаСв рауаЬlе have Ьееп projected а а ретсед[аgе оЕ екреvдlсигев о¢ fue1, -OTHER CURRCNT 9 8 43 39 l0 116 153 165 17В 193 20(Э 225 243 1/ таСетlаlа ялЛ г[я1 с чсгисеlоп ргоgгат reqvlrements. Тм1а евсlо Ъан been а п w в -uVEkBRAFTS ____-_В ______П "___'0 ______0 -"_'_В ______и ____-_0 '"____0 _--_-_В ______0 _"___В ______0 ___-1G0 � follws 1п 19]1-1977: TBTAL 157 180 310 296 438 1272 3417 3941 3092 2ЬВ3 1954 985 1530 19]1 19]2 19]Э 1974 1975 1976 1977 BTHER LIABILITIE6 _____22 _____14 -____10 __._,_39 ___-_3Z _____45 _____92 _____95 _____95 -____95 _____45 _____95 _____35 J 21% 17Х 21% 12b 1а% 22S 25S TBTPL 5982 6736 7629 8914 11334 1Ь216 28811 45610 5949Ь 71797 77Ь79 80785 84021 ==='а:= :.'=:пт з=====_ _"°___ ______' °______ _______ _____° __"__' `_____ ------- '______ `--____ __°___= Iv [he fuCUre 1С 1в еар¢ССед Chat Che hlgh 1eve1 еГ tЪе end оЕ 19]] v111 Ье тедисед� 11ЕВТ/ВЕВТ Е EПUITY 37 35 34 34 39 36 31 41 44 47 4б 42 38 hence Che рто]ег[1оv аавитеа 20й 1v 19]В, dea11n1vq Ьу ove parcenc а уват [о 16Z (tvo топсhн) 1п 19В2-а3. - 11ЕВТ/EBl1ITY 0.5 р.5 0.5 0.5 0.6 О.Ь 0.4 0.7 0.В о.9 0,9 0.7 0.6 CURRENT RATIB 2.8 З.О 2,2 3r3 2.7 3,1 0.9 1.1 1.5 2.1 г.3 5.9 3.3 1/ Provlяlone Еог v atlo¢в and lndanntftcaelovн, г ev[1о¢в оя со¢tтас[в а¢д етрlлуее RECEIVAHLE9/ftEV й 20 21 19 г3 15 16 23 17 15 17 13 13 13 паlагу deductiooв. Projeccad to Brw аС 8% р.в.вс RECEIVABLE5-pAYS 71 76 ЬВ 83 53 59 82 б1 53 96 46 4Ь 47 ИЕТ/GRB55 PLANT Х 85 83 83 '80 77 79 80 АО 87 87 @4 89 86 т/ 5ее vo г/ PIANT INCREASE Х 0 7 22 q Ь г7 32 -- 100 27 6 109 З - п/ Сопаитет деровl[s. ' , п/ 5ее ТаЬlн. д9 for Лгtяilч пЕ Aпгruving сегтв. ItiDE DEHT SLilцlffilI, Q 10.000 ТПАL . 197� 1979 1980 1981 19В2 1983 19В4 34В5 19 -1 5 � 197В 1979 1980 1981 1982 1987 19В4 19В6Р 1977�Н5 IDB В1/OC-GU IBRp AGUACAPp г -Пt10ftTIZATION 1В 18 1В 1В 1() 18 9 0 117 -BORROWINGS 9967 1033 0 0 0 0 р 0 5300 О -BALANCE 99 В1 ЬЗ .45 27 9 0 0 р -ANOftTI2ATION 0 0 0 407 407 407 407 407 2035 -INTEREBT 6 5 q 3 2 1 0 0 22 -BALANCE 4467 5500 5500 5093 4Ь86 4279 ЗВ72 3465 0 -INTEREST 1В3 409 451 934 403 ЭЬВ 334 301 2вЕ1 IDB 301/OC-Gl1 -CПMMITNF.N7 CNGE 9 4 0 О 0 0 0 0 В -BORROWINGS 237 132 105 Э7Ь 38 0 -IpC-Y 100 100 0 0 0 0 0 0 0 -AMПRT3ZДTION 0 0 0 р 0 0 В88 -IpC 187 913 р 0 0 0 0 0 б00 -8ДLАИСЕ 349 4Ei1 5ВЬ 962 9'%-0 921 ВЬВ В15 18р -INTEREST 18 3Э 43 Ь2 77 76 72 67 4qg ueAIO 520-L-019 -COMMITNENT CHGE 4 7 Ь 3 0 0 0 0 21 'BORRBWINGS 1 0 0 0 0 0 0 0 1 --IBC-X 100 100 100 100 50 0 0 0 0 -AMORT3ZATIBN 0 0 0 17 34 39 34 34 153 -IBC 23 41 49 б5 39 0 0 0 215 -BRLANCE 700 700 700 683 б99 615 5е1 547 0 -INTEREST г1 21 21 23 20 39 1В 17 158 IDB 302/OC-GU ` -AMORTIZATION 137 г73 273 273 27Э 271 0 0 1500 CABEI 74 CHIX ENG -BRLANCE 1363 1090 В17 54q 271 р 0 0 0 -AMUfiTIZATIBN 80 80 0 О 0 0 0 0 160 -INTEREST 129 110 86 61 37 1? 0 0 435 -AALANCE ВО 0 0 0 0 0 0 0 0 -IBC-X 100 100 100 10U 50 0 0 0 0 -INTEBEST 7 2 0 0 0 0 0 0 10 -IOC 129 110 ВЬ 61 18 0 0 0 40°� -IDC-Y. 100 100 0 0 0 0 0 р 0 -IBC 7 2 0 0 0 0 0 0 10 ь 3ВВ 454/5F-GU -BПRAOWINBB 1312 1092 9г0 6?7 54 0 0 0 4005 CABEI 75 CHIX AOAI� -BДLANCE 1807 2(Э99 3819 4446 9500 4500 4500 4500 0 -BOkkПWING5 112 0 0 0 0 0 0 0 11г -INTEFE3T 12 24 34 41 45 45 q5 95 ?90 -AMOFTIZATION 0 0 0 54 gq 5q 54 54 270 -CBMMITNENT СЧПЕ 7 11 6 2 0 0 0 0 25 -BRLANCE `90 540 540 486 q32 37В 32q 270 р -IDC-X 100 100 100 100 50 0 0 0 0 -INTEREST 39 43 43 41 3/ 32 28 24 2В7 -1рС 18 34 Э9 43 22 0 0 0 157 -IПС-Х 100 100 100 100 50 0 0 0 0 IpA Ь/VF-GU -IBC 37 43 q3 41 ta 0 0 0 185 -BOFROWIN65 ЕЭВ9 54г 927 714 38 0 0 0 3110 CAFE1 101 ТКдИ5МТ5 -AMORTIZATION 0 0 0 0 92 184 180 1В4 644 -BORROWINGS 492 200 0 0 0 0 0 0 692 -BALANCE 1279 1В21 2%48 3462 340(Э 3224 3040 2А56 0 -ANORTIIAГION 0 П 0 8] В7 В] 87 87 435 -INTEREBT 67 129 183 248 ?75 2Ь5 '.51 236 1Ь4В -FAIANCE 672 872 А]� 79.чi ЬЧ8 611 °24 43] 0 -CBMXITMENT CHGE 14 2q 15 5 1 1 0 0 ЬО -INTEREBT ,14 6'2 70 бб 59 52 45 38 42J -IpC-X l00 100 100 100 50 0 0 0 0 -COMMITMENT CHGE 1 1 0 0 0 0 0 0 1 �lВС В1 14В 19В 253 13В 0 0 0 818 -IpC-X 1П0 50 0 0 0 р 0 О 0 IBFIi 4В]-GU -IOC 35 71 О 0 0 U 0 0 GG -дМОКТIСПТIПИ 54 5] 61 fi4 ЬВ 72 76 ВО 532 CAAEI 102 AGVACAFA -BALANCE 1196 1089 1028 96q 896 В24 798 668 0 -BOFROWING5 1г8 38 0 0 0 0 0 0 166 -INTEFEST 70 67 64 ЬО 56 5? 47 42 458 -AMORTIZATION 54 10b 106 106 106 0 0 0 478 -РА1 АИСЕ 3Е16 318 ?12 10Г, 0 0 0 0 0 IAkB 545-GU INTEFEST ;+1 ?1 16 10 .-i 0 0 О )1 -AMOfiTIZqГ1UN 2В 30 31 33 35 ЗВ 90 42 277 �-Г[1MMITMCNT С'НГF 0 1 1 0 0 0 0 0 -ВАЕАИСЕ 530 500 лб9 q36 401 ЗЬЗ 323 2В1 0 -ILC-X 100 100 0 0 0 0 0 0 р INTEkC.�iT 34 32 30 28 26 24 г1 19 ?15 -tBC ,1 ,_ 0 � г 0 о р 43 必卜 魚｀ хл�оЕ nезт SтятЕиеит (conxinuea) лиивх л ' q IO,ooo тдв1.Е Аг Pege 2 тотц. тотдr, �- 1978 1979 198U 1981 1982 1983 19В4 I9B.`, 197�65 197£Э 1Ч79 1990 ]9ЕЭ1 1982 1983 19В4 19В5 1 77-19 r I=pREI 101 ЕХТЕИ97П СДВЕ1 1йАИ5М1Ч£;ТдИ - I BpftFПWINCiS 0 333 0 0 0 0 0 0 133 -FUййПW1NCiB 2l7 491 517 0 0 0 0 0 1248 ' � -pMB5TI7ATTON 0 0 0 0 7 13 i3 -pMBRTILpl1ПN 0 0 0 0 0 0 1?4 124 -BALANCE 0 133 133 133 1�6 113 100 р7 40 -BALAMCE 237 72В 1245 7.245 324.`.i 1245 1121 997 0 -�1NTEF'Е5Т 0 6 12 12 ]1 10 9 р 68 -1:NTEkE57 9 .3Ч 79 100 100 lb0 . 95 В5 605 --С8ММТТМЕИТ CHLiE 0 0 0 0 0 0 0 0 1 --СПММТТМЕИ'Г CNGE 4 Ь : 0 0 0 0 0 11 'IBC-Y. 100 5д 0 0 0 0 0 0 0 -InE--% 100 100 50 0 0 0 0 д О , -IOC 0 З 0 0 0 0 0 0 q -IPC 1:й 44 40 0 0 0 0 0 98 LOCAL ВОИВВ IBFD CMIXOY F'ROF05 • -RMORTIZpTIpN 133 133 334 134 13А 134 13А 13д 1070 -kOFRBWINGS 919 1974 2ЬВ4 1623 0 0 0 0 7200 -BALANCE 1543 1А10 1276 1142 100В 67д 7q0 ЬОЬ 0 -RMeEiT1ZATIBN 0 0 0 0 0 554 554 554 1662 -INTEREST 121 111 101 91 В1 71 61 50 685 -FALANCE 919 2В93 �577 7200 7200 Ь646 6092 553В 0 -INTEREST 9 164 318 470 534 4ЬВ 423 З7В 2752 � .. CHIXBY LBT 4 -CПMMSTMENT СНАВВЕ 13 56 27 l3 О 0 0 О 109 -BOйROWING6 � -IЛС--Х 100 100 100 100 0 0 0 0 0 '� 1-1 50q i92 1Вб 0 0 0 0 1003 -ТПС �� 2?0 345 492 0 0 0 0 1078 -AMORTI2ATIUN 50 100 100 100 100 100 100 100 750 ' -@PLFlNCE 71 475 5Ь7 Ьч3 553 453 353 253 0 11SA7B 1978 ' -INTEКEST 1' 33 39 3р З? 26 19 ?07 -BПRftOWING5 0 22S 469 80 86 0 0 0 860 ' -CBMMITMENT СНВЕ 1 1 1 0 0 0 0 Ь -PALдNCE 0 225 694 774 ЯЬО ЯЬО 860 8б0 О ' -IЛС-Х 100 100 100 100 50 0 0 0 0 -1NTEfiESf 0 � 9 15 1Ь 37 17 1] ' 9� ' -IDC 3 29 34 40 19 0 0 0 116 ___ _ CHIXBY 1.07 5 CpBEI Г!1-F.F.I.INE �`_ _ -BOFROWINGB -BORRBWINGS 0 348 257 0 0 0 0 `0 605 331 3В1 44Ei 25 0 0 0 0 985 -pMURTIZATIBN О 0 О 0 0 0 Ы b1 322 -pMOFTIZpTION 49 9В 99 9В 99 90 99 9В 738 -BpLANCE 0 348 605 605 60S 605 544 483 0 -RqLANCE 82 365 714 641 542� 444 345 2д7 0 -INTEBES7 0 14 38 48 48 48 46 41 2В4 -INTEREST ' 3 18 43 54 47 39 3:? 24 261 -СОММIТМЕИТ CHGE О 1 1 0 0 О 0 0 2 -COMNITMENT CHGE 2 q 2 1 0 0 0 11 -IDL;-% 0 100 300 0 0 0 0 0 0 -IDC-% 100 100 100 100 50 0 0 6 0 -IBC 0 15 39 0 0 0 0 0 S� -IDC Ь �� 45 56 2д 0 0 0 152 -- - LBCpL - NF.W И С7 CHIXBY LOT б -ВВГ'йOWINGS 0 ?79 145 0 0 0 0 0 �2А -POййOWINGS S4 219 257 Ьр 0 0 0 0 59р -AMПRTIZqTIПN 0 0 0 В5 85 85 85 84 �21 -AMOFTIZATION 30 60 ЬО 60 60 -BRI-ANCE 0 279 424 339 254 169 В4 О --0 -BRLRNCE 24 60 ЬО ЬО 4S'0 -INTEREST 0 7 1R 19 15 11 6 2 ' 77 183 380 38В 32Е3 26р 20В 148 0 -IOC-% 0 100 100 0 0 0 0 0 0 -INTEREST 1 8 -CBMMITMENT СНВЕ 2 q ��_ 3'+ �1 ?0 ]0 1р 118 -117С 0 7 УВ 0 0 О О 0 '2а�� -IЛС-7. 200 ,100 100 100 50 0 0 0 0 - - -IBC � 3 12 25 32 1,5 0 0 О 87 Ip8 йИйАL ELECTR , ' -BUFFBWINGS 0 0 2рб 2ВЬ 636 0 0 0 112Q CRBEI 75 E%TENSION -RAfANCE 0 0 206 492 1128 1128 1128 1128- 71' -@ORRBWINGS 750 0 0 0 0 0 0 0 750 -INTEREST 0 0 7 16 23 23 23 93_ -AMBRTIXATIBN 0 0 0 0 0 75 75 75 -CBMMITMENT СНВЕ 0 0 3 8 3 0 0 0 il --BALpNCE 750 750 750 750 750 675 h00 525 ��0 _ -I7JTERE$Т 30 ЬО ЬО ЬО ЬО 57 51 45 433 � ' -3ВС-У. i00 100 100 100 50 0 0 0 0 FINANCE 1iAF' LC1AN -IBC 30 ЬО ЬО ЬО 30 0 0 0 2q0 -@BFROWINGS 0 900 1400 0 0 0 0 0 2300 -RMBRTIZATIBN 0 0 0 0 164 328 32В 32В 1146 CABEI 102 E%TEMSIB -BALANCE 0 900 2300 2300 2136 1В08 1480 3152 0 -BORROWINGS 49 10д 0 0 0 0 0 0 149 -INTEREST 0 40 i44 207 200 177 148 118 1035 -pMПRiZZATION 0 0 0 33 ЗЗ 33 33 i7 149 -COMMITMENT CHGE 0 3 3 0 0 2 З $. ц. -BRLANCE 49 149 149 116 ВЗ 50 37 0 0 , , -INTEREST 9 13 32 9 Ь 3 1 54 '" -COMMITMENT СНрЕ 0 0 0 0 0 0 0 0 1 -- -IBC-X 100 t00 0 0 0 U 0 0 0 -IpC 3 9 0 0 0 0 0 9 12 INDE DеВт 5UP@1АНУ q 10,000 тОТец. 1978 1979 1980 19П1 19А2 19А3 19&4 19А,� 1977-1985 YS00 ЛЕР7 SUMMAFY Ч510 -BUКkOWLN1iS 9fl99 Н591 р5'7% 39В.`i p:i? 0 0 0 .й1ЯS4 95�0 -Hf:F'pYMFNTS ЬЗЗ 955 Bq? 1�бЧ tB8^ ,'69Я 2610 "°Ft9 l.ifl1Fl 9и30 -UALANCE 17093 :'47'_'9 32374 З4790 337h0 ,;7D6? 7Е74`:? ?5Bh3 '_+.`18f3 Ч5`i0 �(;pNMITHENT FCCi 53 124 71 3i 7 3 301 9i50 -iNTEkESi 819 1449 1936 2�47 2_':д ?р;!у tti?0 1f,15 1413В 9.`,70 -INTEFEST 8 Cf� 07, 1 i74 7007 2202 ?230 203'? 1р]:д 16?0 14440 95В0 --11Е=НТ pEF'Vif:F 1:i05 2529 �8ВЧ .3В`i1 4112 А7.30 44.3Т' 4209 �'l329р 9590 --ТПС 620 12°6 102: i14; 724 0 0 0 4564 Ч59`� 707FЭ1 ПF'FИ1ИГ ]6:7J 0 р 0 0 0 0 0 0 ANNEX А TABLE АЭ 8EG'а 2NCDtAE 3TATEMEN'f ANO 30URCE AND U585 ОР PUNDS 8/ INCOME 3'ЛАТЕМI:NТ Q 10,000 Ч71 1ч7ч 1Ч7з 47а �9/; ---1ч76 (9л t47н �1Ч9э 1ЧНо �Чн1 i9ы? tvoз ио,Г,Е �- -А�гиа1---------- ____________ ______________________Ротесвяг__.________________ а/ Ас[иа1 даСв hав Ьееп eaken £тпт cL+G'в audited financiel всаСетеп2в £ог 1971-1977. Яе- _______`_--`------------- 'tA1 Fti ТИ fiW11 - _____.__,._ _, cleesiflcaClon hae Ъееп таде ав requiгed £ог the ригрове о£ conaolldation. ]3111h ANTi kFГA[I __53..0 .SцG,6 ..Ь50.Е7 ..Ь'3.А.4 _!^_Ч.ц 16tI.1 Hi:.� __ц24.Sг ._4Ч4.0 _1U(ЗО.О _i16ii.G _.12Ь3..0 ,..136�.(1 ь_� 7oTAL 53?.0 .'i46.6 65НеЕ1 ЬУ4.9 1'_'Ч.9 %6FJ.2 8%:!.5 9�4.0 999.0 101t0.0 11ЬП.0 i,^.G3.0 1.ЗЬ'.Э.О Ъ/ &пlев volumea аге the вате ав [hоье ehaw in Сhархек 3, ТаЫе 3.1, КCVI:NWEIKWH SOLD ._._,,,_,,,,,,,,,,,,,,_-,-, с/ еее ТаЫе 5.4 for Che aььvmpfiions иаед in р ajecting аvееаде Сах11£ 1evele Егот 1'ГNI!�/kWH 3.1Чо . 3.230 . 3..'.'.00 . 9.^20 _ �.,QqO .,,5. 940 ._u.:-:r7Y 1978 onwaxde. Тhеве tariEfв ехсlиде каvапиегgвпехвгед through application of che роиет . .6.359 ...7.�ы8 ..ы�112 ..11..111 ..В..11Т __1Э.11Z J весСох £ие1 adjuatmant сlаиве (аее по[е f/). АVГ FF:V/KWH !��Пlll 7�.�itЧ T.2;i0 ,3.:�oU 4,и19 �.04(1 5,440 .,.i79 б..й54 7.5НН P.ilJ Г1.117 fl.117 ы.117 д/ Projected [а grow at 10Х р.а. Thiь iпсlидеа с ес[ion £еев апд о[her char8ee� i xclvdes reported in ЕЕГ,'а ассомtа кeяul[ivg Lrom energy СтапврогТед £ог INUE Ъу ЕЕС (qc764 гhеивапд iя 1976). 11Гt.f1AY]ИГ' С(ГVГNПFi е/ Ia 1972 СЫа includes "таСегiяlв" апд "adminlstret3oŭ' совСа. Th1a ltem 1псlидев а11 non-cap1ta11zed � _ .. ........ . ... гоs[в �?cilon о£ tta евlату апд �рlоуее benefl[ and 1в Ъавед оп ЕЕС's рхо requlxemen[в. Grыth о С е ПИ1 К АЫ RL ГRIt __1S9'.. .._ 1ц27 .__11(17 :'Ч34 36ИU 41Н(1 4k3bd - :ч13/1 - 1'3ГЭ0 .. д766 _Ч4В1 102�2 ..1141Э0 ваlагу Ьц1 1в ebout 6% р.а. 1п 197А-198Э. Ia 1977 EEG hed an aveкage of 668 реетао¢п[ and 70 t®рокагу ГПТДL 5Af F9 RF'V 1]4!i 19^_% _'107 .'934 3hH0 4150 4НЬН �П71 ]чПU П/Г,Ь Ч4lЭ1 10: �^ 310130 етрlпуееа. t11411:R 3 3 в 3 - _ -` _ `' - -_ 3 _ --' 3 -"--_-9 - ---4 - - - 4 ,__10252 ..,.110В'х J hulk рихсhавев ГПТА1 __ 124Н __ 1ц3П 11()Ч :'Ч31 -_36Н': .41б� ..4ti71 5F3]4 _.2SH4 . 9Z2П ._.ц4ы5 Е/ See ТаЫе АЬ Еог ЕЕС pxojecYed fuel совСа, avd ТаЫе 3.l £от EEG'а ' о£ anergy £кат INDE. Fue1 со ге Ъавед on уеат-епд 1977 fuel pxicea Ъесаиае of * UFI:ПATTN1i [.XF'fN:iE'i Cha difficulty of projecCing £иеlаргiсее i¢ GvaCemвla. R'Ье £иа1 adju.viment сlаиье _ applied Ъу the вегсо would я11оv гесоvеху о£ апу inc еааеь. ТаЫе 5.4 аhоца [hc ргоjес[ед pxice оЕ enexgy pvrchaaed Ьу EEG Ехот iN08.r Гп а агдапсе ыi[h 8eceion 3.05 EiA1 ПR1ГS 76,`i :3F1'1 !Чi .3(f7 ;34% ;;ы7 'SГ3:' 4П`.i А'?9 4."i,i 48:'. i1] 542 , оЕ [he Aquacapa Loвn Agreement (1426-(ц) thia price wi11 Ьесаех evexy уеах 1n euch Г11t'I_ 1Ч.' .'41 1'Н1 ]НЧ 10l1i 10ЧF1 1i,'71 1113:i Ч?3 Ч23 9?:i h2U 0 � а vay аа го tranafer [о INDE а11 BEG funda in енсевь о£ EEG'в raquirements fox 1'U1:ГНАЭЕ:Л CNEf�tGY '.1f0 696 7:,Н 1.З!Т1 14'эд 141/1 ЧЬ:'q 3о]? дЧЬП 5ЧП0 651l1 1i]0 R1Hl , ореха[1опа, гераутеп[ о£ деЬ[, пеС weгklrtg capital апд capital еь�репдiгихев. NЛTEFLAL 5 :i0 0 ?Ь 'Jl .i4 44 41t Ь1 б/ 1:2 /11 СЭ4 91 � AI�M1k]TiiFiRI1ПN 1 i0 0 3 У:'Ч 370 16.i 19'.i F'1i l3^ :!°0 :]0 2Э: 31:"i J g/ Fox L972 iC is 3псlидед in "ваlахlва". 8ased on hiвtoгical екрехгепсе, ChiS hаь Ъееп Г1fHFR Nf]И1'A5W ЕХ1' 3 .Э �б '10 10 11 1,3 0 0 0 0 0 0 ,/ pioj¢eted et 0.93Х о£ unrevalued gховв plant 1п aparatian. 11И-1'F2F'L1АIТПИ ЧА Ч5 1о1 10И УУ5 t^4 гП': .й'),й .3!�7 .йПУ 4У.5 qq5 П/У ,I� !;А1Е!1ТАКЕ5 3? 35 ,ТН 4!1 %1 П:' 100 ]1/ 1;i^ 1]5 7'10 ?0`, 1:2 f1/ 1 Ы 1 197883h Ъ j д 1 Th1e 1в the provlelon for ипсоllесСlЪlе ассоиа[в. АссеипСь го ес 1Иl:ОМЕ 1'АХ1:!1 .. .'2ы .. ._'7 .... �4 ... П . 23 -- 24 -. 1о . 27 ----26 .- .3'� -- .32 - 35 23 t/ - С f th1 1в1 th1 11 1 1 h f тесе va е п - ove ее¢ р Се 7Г17А1. . i3:i1 _....,iA37 ... i6::f1 ,...2/%! _3^Ьц ЗНо4 __4/^:; 5901 _7194 В1Ч) __ н44'З _'ЭJЬЗ .чч03 пе о в prav ап, вп а пс в¢его n[ е и[ите. ПРЕНАТIИГJ iNL:C1ME 3Ч/ 4Ий 9NЧ lb5 д13 Э>it У46 А]д 9,й'� i]Р 4Пб 4'1q t1i1:! 1о 1JГНГ1: 1NCUHF NF1 _. tl.. . 1. _.] . _`.i _ Ч___ _3� _ 16 .. 17 .. i'1 ... 21 _ _>3 . .:!П . 37 � ]_ ➢ереесlаС и ир Уо Мау 19]7 wав саlспlлtед пп а global Ьав1ь 1п ап amount аи[horized anvually Ъу ИГ1 1NГПМЕ П1 Г ГИ1 40',i 4'l9 4ЧЬ l)0 q1? 413 16:' ЯЧО 4`,4 _`i9Ч 509 �1Ч t;?ОЧ ehe М1о1а[гу оЕ РиЫ1с Flпапсев. 5tartlog £гот [ЬаТ даСе EEG юав authrolдed [о иае aCealght 11пе дереесlаеlоп Ъавед оп ваяеС ехрессед есопотlс 11Еес1тев. 1И1 LNt1f:Lk11 ПI• ._ 0 _ - _.U _ ._0 .. 1Ь . 4� 3ii _. 49 ._ ы7 __ 113 _ 1П] _ _L36 __ _6S - 44 Ип Сигиме 4о'., 4Ч4 4чь и;4 arr :{�л; t1г! 4о:д ---.ч4! аЧ2 яГ':а 4s4 1гы; ЕЕс 1 г г гм г £ zз 1 £ тп --.---. ..-. ... -.__ -... "--.-`- .- .... ._ - __.." _ _.. __- ___ ____ Рвув sa ев ах а е гв ¢ п о g яs еа е5 revenue. Тпд р у по ааlеа tax. __ "----- ---"-... ..-...""" ."""--_ "_ ..--_..- --."--- ------- 1/ EEG реув г lпсоте ЪеЕлте ваlев and lпсоте еахеь. Тпе Сак r е ie 57.. Leglalaelon 1в репдlпg сЪаггwоига енетрс еее £гпт ваlев впд lпсоте гак. пгпЕ раув по income гахев. т/ Чon-opera[1ng 1ы е(expense) с пвlвсв таlпlу пЕ тепСаls апд lпсоте £хот [етрохаеу lnves[тепс оЕ аиерlиа caah. I[ 1а еыыииеЛ grow яс 9% 1п 1978-83. v_/ prpjec[ед [е grew Ьу 5Х аппиаllу. о/ see Евс'в даьс e2acement, Твы е ль, хп[атаа[ 1а п¢[ л£ 1п[етеа[ аигlпg сопа[тис[1ла. souACe Аии Esas ох yewOS р/ se¢ £ооеаосев е/ ваа п1 со еес'ч Ьа1ап<а аЪаасн. q 1о,ооо - - - g/ Tn1s с vвlв[в о£ тlьсеllапеоаs s апд иаеа о£ £иадв, висh в ealvage value оЕ гегlтед в гОтАг епд lvcome from ineuxance сlаlта.игIпв1977 ваlе апд ыаlvвgе оЕ Eixed а евllед Q0.76 т1111оп ввегв [п 14]"-' 1Ч73 19/4 '11:� Ivl6 1Ч// 1.Ч%ы iЧ/Ч lЧИо А9fЭ,6 1'ЭНJ 1978-19В2 _19д3 ИПз.g. avd accouvC Еох the majox paTt оЕ ehe Q1,4 т1111оп of other воигсев appeaкing here. -------------'__-__'_"`_Асlыаi___'------------_'____ _________-'_________________'Fогесвяс"--'__-___"_"_---- 1NIГRNAL 5U11F'Г1�`i -ИГ7 7NГПМ1 ЛF1 [И А94 49.5 ]/0 4?2 41.F 1h: 4Ч() 4`,Я :Ч9 `iUЧ 51Ч iы71. 1?.tl9 Г11"Г'HFf' ГА f IПN 96 1 U1 1 ПЕ1 11:i i 24 2(1'l 3:"Э :i5:" 3f31 41,i 44,, 1 gTq д7у пrнге ииИ г.дsы з Ь 1о 1о 11 Es а о 0 о о о о 17 '^ -23 _ _'4 _ 7� _." 2J. ' _.2ы . _..12Н S!9 й� C:ANr11MG2 CПNIh'IN - 1 _". 1'3 . 34 ._.�Ь ."Ь(1 - --_... _ _ Т117А1 ЬО:! 67'.' З:�:г 50.'r ЬОЕ1 ЗЧЧ f1З6 B;iO 1оо"i 949 4'Э2 461й 1]6] С1С'ГГгП1 ГПИА1 NF П11I FEM4 И 1 р Wk.[Nfi CAF W/(3 ГАti 11`i 1)0 '.'Р:', -9� -61] 10П CfiF 4] i] -,5Ч =Ч� Н1 2i -RЕГFlУМГИТП 0 0 1;", ]А°, .'ПП 14.i 14,5 i43 2.".l ^:й2 13.� 1003 ,^.32 � IИIСГ2ГП1 и 0 1б 4ti ,fП 44 ы7 ]1:{ l07 Rh 6S 45N q4 � � -П1V1[iЕИП9 "."_З�ц .-. 314 _ Е1 _ Lt __ П " F1 -- _В __ .. (Э . . _(3 ,_. _8 _ ..,.,_tS 4П _ _.8 S11HTП7AL -... П44 -."354 .--.39't ,. 963 _ 1'�1 --41:' 396 ___ 4`i -_.""41� "-. 33! ""_ 266 . 1743 "'_36� NF.T 1:A9W GLNFHAГIII i:-7чз ^ЬП -:'] t?0 4_il Н21 49о П01 b90 61:' %26 2ы20 1352 -�1:НП ГИ EMF'р1ЭUА ftF 0 о 0 0 0 40:! -194 -ЧО -ЧО -7Н 0 -402 0 �/ �1.f1AN1i! 1N 1:AtiN .._ 1'3 __ 34 _.. 9% ._iП3 . .216 ._'71 -_'14 ЧЬ __ _N1 --..ЬЗ ..__ 3'2 ___у13 _ ЗВ � NCT AVA11_ПВLС ГЧОМ 17РЕГ'RТ1ПИ5 1.iY 234 -74 1) 1E11 h90 4.'0 .iЧ:: !-�ЧЧ Ь?7 bhJ ^70В 1.йУ4 C0N5Ift1J[;Т7ПN FkE[7UIFl:MFNTR -ПИ(iП1Nfi WL1FK4 ,....,,1ЬА , __.'1.31 . . 334 . 3S1 -. -3ЧЧ - -1:.'S3 . 1об2 _- 56� ____6П8 _.-637 -__.665 - 3557 ._ 19[13 ТПТА1 .. 169 -._-231 _ _ 33ц ..-"3:i1 .- 194 _1".'53 1о62 "___'31З5 --"_60[З , 637 --".ЬЬS ---35.�i7 __ 1S1П3 ЧА1_АNГЕ ТП F1ИПИ[:1" ^ti ,3 А13 334 ^]Е1 5h:i 64] iЧ0 'l i0 _ П49 231 ИINqNCEll h'У: -CПANS ." "0 .--"" -0 4:iC1 _ г�П :'SO 923 ._ _5]7 ."_.".�50 -"".. -0 --. ,П ". 0 -__-82Z _ "___П ТОТА1_ V 0 4i0 :':�0 ".'�() 4?3 S77 ?50 0 0 0 92] 0 OTHE:F RFГLIГATION� ..i 3 З% -F4 i'% '14П П П 0 0 0 0 0 g/ 6UFF'lU9(HГFIГ,Г1) ОГ fUNПS 0 0 0 0 0 U -ЬЬ (,0 Ч -10 - :31 ДСГПМUIRTFU 0 0 0 0 о 0 -Г,` -.i -tП -2Ч -�? -... 209 ИГ_Т f AFH GENF.FATIПN/ -1:ПИ5ГFiПГТiГJИ RЕПА 4б 11б -11 ,-5А 115 бб 4б 69 97 96 1ПН 79 l75 PLRN7 IN ПFEft-% 4.1 Ь•9 -0.] �,] 9.G ]Ь.б 7.4 :5.h 7.Ь ].3 Н.О ].2 13.В ПЕНТ fiFГNICE COVF.R 0.0 0.0 о.0 0.0 0.0 0.0 R.9 .`7.ы 4.0 4.1 4,3 4.Ь 7.4 EEG'. 8AAC£ SSES ANlD DEPT STATENW 1T BALANCE SEETS 9 10,000 1971 1972 1973 1974 1975 1976 1977 1979 1979 1990 1981 1902 1¯90¯ TEm -------- - ----- --.-- t -------- ASSETS af Actol data has been taken from EE-a oudited finsial otatemeenta for 1971-1977. Re- p,.M5IN PERATION 4727 7060 3097 4120 4469 4752 4956 650 7175 7783 8420 905 9779 / elassification has been rade as reqnuire for the purpoe of cnseolidatSon. LESS DEPRECIATION .. --932 .1020 ----1109 --1211 . -1319 - --1435 --1610 . .1933 -- 2285 . -2666 - 3079 ...3524 ...4003 5/ SET PLANT 2795 2048 780 2915 3150 .317 3346 4627 4090 5117 5341 5561 5776 ]/ Fixed assets are carried at their acqui,ition (historiael) cost. ORK IN PROGRES 14 13 50 134 61 135 1005 433 433 433 433 433 822 c/ see note i/ of Em!', incoe etatement for a p oge-, CURENT A10ST/ Cah balance nperatinal requirementp are projected at the rate of 8% (one month) of the -84C6N ASSE5 fo1lng coste: slarie, fel, purchased energy, mteriale, admiistration and total ~C ATIAN 0REU 50 77 111 150 261 537 266 400 576 657 720 779 817 4/ coentren requireents. Te teoraT aaqloa she differens betnen souces a TE5MPORAaY 0000 0 0 0 0 0 0 0 0 0 0 0 209 be of funde, shown s the acemulqtetd -^urpha ef ftd'an the .sb flaeeae . ACC TO RECEIVARLE 101 247 305 709 824 960 696 646 034 964 1043 9128 1210are acclatd defieit. of fud. a hn on th, fund, fl t -INVENTORIES B2 80 09 162 230 705 201 316 373 444 522 609 704 f. -OTHER CURRENT 14 6 - 0 11 - -2 -.-28 ---- 102 ...0D 100 ...100 ---- -10 --10 _. At the end of Sptember 1977 E90 had en accout eeivable of Q 4.38 eiln w110 5eAGU6 TOTAL 335 410 5 3 1040 9424 1730 1350 1542 1883 2165 2373 2526 2959 the mnicipal water company. In October 1977 the Goern9at entered Into agreeet with 0M and ]ENPAGUA ahereby Go-vement would a~sVne ep1ne,il.Oty for thI. ecnat reeivable OTHER ASSETS 17 5 4 1 1 1 1 1 1 1 1 1 1 end pay it off In flos anual instellments esrting In 1978, The eurrent portion of the EMPAGUA RECEIVABLE 0 0 - 0 -------0 -- a -0 --- --402 .29 -- . 28 ..----0 - 0 -- - ~0 hf recvable is elas.ified as an other eurrent aset in 1977-1982, while the non-urrent TOTAL 311 3276 3363 4090 4536 5103 6104 6991 7375 7794 0140 8521 9558 portion le lited belen es "FAGUA recelvablq", 1978.1982 acconse Ze~evble are projeoted == -a-,-1% groearoeee, -o-sisting af jO dess af ressOables re. r±blia agednies sed th. LIABILITIES 40 days ire all sther eaetoae.. - TAL 0469 1469 1469 1469 1469 1469 1466 1466 1466 1466 1466 1466 1 Pröjeted t 4-8% of 6al6ed gen plAnt L^ .pete 1 -RETAINED EARNINGS ---1140 1305 .-.1330 .1418 ..1256 ~206e -- 2182 ....2522 - 2210 ---.3324 3802 4255 5412 n the hase sf hitorlal analysie of ti1s Fatio in 197r1977. TOTAL 2609 2774 2799 2807 3225 3537 3640 4043 4376 4860 5275 5721 6878 g/ Frojeoted at Q 100',000 in the future plua the eurreep pnrtiqaet of MAGUA'se dent inEE L0N TERM DEBT 0 0 0 295 450 500 780 1214 1321 1068 936 604 372 w/ ohich ]s Teing p8d by the Goerent (se note _ / of this table). CUR'NT LIABILITIES p/ TIs Is the non-rrent portion of 242AGtA-a debt to 401 ihich le being pad by the Ger- -ACCT'S PAY GTHER 66 59 114 249 181 207 429 346 173 176 100 151 129 met (see nte (e) of thi table). -ACC'S PAY 0NGE 50 65 59 251 139 171 1 426 338 546 649 727 833 900 k OTHER CURRENT 330 263 258 242 317 484 515 556 601 649 701 757 817 / See EE's debt at.trent beln. OD FTS --44 6 3 -. 430 741. . 3- - 6 30 1305 256 - d/4 sed an htiserial eperlene, thie bss been prjeed si 10% sf -sterls-, fue se- - ntl ncoens ise expedIe in 1978 sd LI. Lm 1979. CONSUaR CONTRIBUT --1Q6 L-U --- lå ---- 22&--- - 2 6 --- --- -45 -3 0 --434 -!f. /44 n- 5OTAL 3161 3276 3363 4690 4136 5103 6104 6891 7371 7794 --9140 9521 95580 - / ejented at 1IX fS p-e~ee ~sy7epes 198 -917 (hi~Or~±lass) 1- This nasista of taxes pjysbTe, ceslaer 04T.00- an Afl'Engesy-prestds. lheee-ee EBT/DEBT % EUITY 0 0 0 9 12 12 i0 23 23 18 14 10 5 prjentö d grwa 8% afnually, bsd sa the ave-dga 1971-1976 gen esoe nd epested DERT/EDUITY 0.0 0.0 0.0 0.1 0,1 0.1 0.2 0,3 0.3 0.2 0,2 0,1 0.1 slea g . C2988097 R91 0,8D 0. 1 1i2 1.4 2.1 2;0 1i0 0.2 14l 1,5 1,1 1.41 1,6 RECEIVABLES REU % 10 3 14 4 22 23 14 1 11 1 01 01 11 9/ COmualaive valae of r cemntib,uo~s (see fund. flev erat-t. RECEIVABLES-DAYS 37 46 52 97 01 83 51 40 40 40 40 40 40 "ET/GROGG PLANT %. 75 74 72 71 70 70 68 71 68 66 63 61 59 nf Sea Tcble A5 for detaIl, of borrng ten~., rANTnRFrF o . o 4 1 6 6 4 .3 0 0 DEBT STATEMENT 2 0 00071 9 TOTAL 1978 1979 1980 1901 1982 1903 1984 1985 1977-1985 FNCB -AMORTIZATION 143 143 71 0 0 0 0 0 357 -BALANCE 214 71 0 0 0 0 0 0 0 -INTEREST 23 11 3 0 0 0 0 0 37 FN BANK OF CHICAGO -BORROWINGS 577 0 0 0 0 0 0 0 577 -AMORTIIATION 0 0 102 102 107 i82 102 90 1000 -BALANCE 1000 1000 018 636 454 272 90 0 0 -INTEREST 64 90 02 65 49 33 16 4 403 FUTURE -F0RRN8GS 0 250 0 0 0 0 0 0 250 -AMDRTIZATION 0 0 1 50 50 50 50 50 250 -BALANCE 0 250 250 700 150 100 50 0 0 -1NTERE9T 0 11 22 20 16 11 7 2 90 DEPT SUMMARY -BRRDWINGS 577 250 0 0 0 0 9 0 07 -REPAYMENTS 143 143 253 737 232 22 732 0040 607 -BALANCE 1714 1371 108 836 604 372 140 0 -INTEREST 07 114 107 86 61 44 23 1 531 -(7RET 0 C 7 13 07 84 -0E07 SERVICE 230 250 360 310 297 27, 5 146 2170 TUTA OPEN N3 79 0 0 0 0 9 0 0 AF MAT Y.R S 2 4 22 97. 04 0.0 2,7 AVE INT %.7 09 0,06 9.07 9.03 90.0 ,9 0.57 0.90 b ( POWER SECTOR BORROWING TERMS (in millions of U.S.$ - Quetzales) T E RMS Through Dec.51. 1977 Outstanding Amount Total Amount Amount Balance Available Amortistion Grace Interest Commitment Other INDE Project Year Currency Amount Disbursed Amortized 12/31/7 1978 Period (Years) Rate(% p.a.) F.e(% p.a.) Fees I (81/00-Ons Los Keelavos 1964 US$ 3.15 3.15 1.98 1.17 - 1967/1984 3 5.75 0.75 a. IDB (301/nC-G1n) Chixoy 1976 US$ 10.00 1.12 - 1.12 8.88 1982/2001 7-1/2 8.o 1.25 b. IDB (302/0C-GU) Chixoy 1976 US$ 15.00 100 0 - 15.00 - 1978/1983 2-1/2 LIORk1l375 0.625 0.625% flat c. DB (454/SF-GU) Chixoy 1976 US$ 45.00 4.95 - 4.95 40.05 1986/2016 10-1/2 1 - ' 0.5 d. iDB (6/vF-nj) Chixoy 1976 _ 35.0 .90 - 3.90 31.10 1982/2001 6-1/2 8.00 1.25 28.12 1.98 26.14 80.03 IBED (487-GU0) Jurun/Marinala Hydro 1967 US$ 15.00 15.00 3.00 12.00 - 1971/1992 4 6.00 0.375 IBRD (545-oU) Guacalate Thermal Plant 1968 US$ 7.00 7.00 1.42 5.58 - 1972/1991 4 6.25 0.75 e. IBRD (1426-GU) Aguacapa 1977 US$ 55.00 - - 55.00 1981/1994 4 8.20 0.75 77.00 22.00 4.42 17.58 55.00 f. U.S. A.I.D (520-L-019) Rural Electrification 1971 US$ 7.00 769 - 0.01 1981/2002 10 211- 36/ - CABE (No. 74) Chixoy Studies and Engineering 1974 US$ 2.40 2.40 0.80 1.60 - 1977/1979 2-1/L 6.00 0.75 g. CABEI (No. 75) Chixoy Roads 1974 US$ 5.4o 4.27 - 4.27 1.13 1980/1989 5-1/2 8:00 0.75 h. CAREI (No. 101) Transmission 1975 US$ 8.72 1.80 - 1.80 6.92 1981/1990 5-1/2 8,00 0.75 i. CABBI (No. 102) Agua.apa & Other Studi es 1975 US$ 4.78 3.11 - 3.11 1.67 1978/1982 3 6.00 0.75 J. CABEI(No.101 extension) Transmission 1977 US$ 1.33 - - - 1.33 1982/1992 5 8.75 0.75 22.63 11.58 0.80 O 8 T BONDS (local) Thermal Plant 1973 Q 20.00 20.00 3.24 16.76 - 1974/1988 - varios - 0.25% p.a. B. Chixoy Lot 4(CredSulsse) Chixoy 1978 US$ 10.03 - - - 10.03 1978/1988 1/2 6.375 0,25 1. Chixoy Lot 5slapanEximbenk) Chixoy 1978 US$ 9.85 - - - 9.85 1978/1988 1/2 8.0 0.5 m. Chixoy Lot 6 (Suppliern credit) Chixoy 1978 US$ 1.98 5.88 1978/1988 1/2 8.0 0.75 0.1% exchange comt.ion 45.86 2000 3.24 16.76 25.8 Total Existing Borrowings 260.64 88.69 10.44 78.25 171.95 Proposed Borrowingal) e. CABEL (No.75 Extesalon) 1978 us$ 7.50 - - - 7.50 1983/1992 5 8.75 0.75 c. CABEI(No.102 ExtensLon)Aguacapa & other studies 1978 US$ 1.49 - - - 1.49 1981/1985 2-1/2 8.75 0.75 P: WRI Trassumiasi.n work. 1978 08$ 12.45 ---- 14B411993 5-1/2 8.0 0.75 q I (proposed) - 1978 us w 72.00 - - 193/1995 4 7.90 0.75 r. U.S.A.I.D. Rural Electrification 1978 US$ 8.60 - - - - 1988/1998 10 1X - 32 - Total Proposed Borrowings 102.04 - - - 8.99 Future Bornrowigs e. CABEI 6/ Guatemala-El Salvador line US$ 6.05 - . - - 1984/1993 9-1/2 8.0 0.75 t. local Row Headquarters Bldg. q 4.24 - - - - 1981/1985 2 1/5.0 - u. IDB 6/ Rural Electrification US$ 11.28 - - - - 1986/2006 7 -3 0.5 v. Finace Gap Loans US$ 23.00 - - - - Total Future Borrowings 44.57 - - - - 7 years 2 9.0 - TOTAL INDE 407.25 88.69 10.44 78.25 18094 E Eb,i,ting Bowig First Bn y Rank (Guatenala)Working Cap. 1975 Q 5.00 5.00 1.43 3.57 - 1977/1980 1-3/4 8. average - First National Bank of Chicago Gs Turbines 1977 US$ 10.00 4.23 -4,1 5.77 1979/1984 2-1/2 LIBOR + 1.375% 0.5 Total Existing 17.00 9.23 1.43 7.80 5.77 N. F (Commere Bank - Working Capital) 1979 US$ 25 - - - 1981/1985 2 9.0 a. TA Fooe e EGlRs origCptl 17.50 9.23 1.43 7.80 5.77 TOTAL POWER SECTOR (INDE + 1EM) 800107 97.92 11.87 86.0,5 186.71 IT During the grace period. 2/ During the amortisation period. 3 Of this total, US$30.0 million is denominated in U.S. dollars and US$5,0 million (Bol$21.5 million equivalent) in Bolivares. / nterest rates varies depending on holder: Banco de Guatemala, 2-1/2% p.a.; comercial banks and insurance companies 6% p.a.; other, up to 10% p.a. An average of 7-1/2% is assumed in the debt statement. Thes loans are either pending a decision by the lending institution or ratificatton by the Guatemalan congress. 6/ These are informa reqes;s by INDE to the spurce in question and are not yet being negotiated. GUATEMALA - POWER SECTOR > FUEL EXPENDITURES Capacity Unit CosF/ -------------------Forecast---------------------- (MW) US4/GWh 1978 1979 1980 1981 1982 1983 -------------million US$ = Q------------------------ INDE Escuintla Steam I 33 29,200 5.55 - - 4.53 - - Escuintla Steam II 53 24,100 7.93 9.35 9.37 9.39 - - Escuintla I & II (Gas) 30 62,100 1.24 - - - - - Escuintla III & IV (Gas) 50 42,800 6.03 - - - - - Puerto Barrios (Diesel) 3 43,000 0.43 1.03 1.08 1.12 1.16 1.13 TOTAL INDE 21.18 10.38 10.45 15.04 1.16 1.13 EEG Diesels 9 43,000 6.79 - - - - - Laguna Steam I, II, III, IV 33 36,300 0.77 - - - - - Laguna Gas I 12 59,000 - Laguna Gas II & III 40 29,200/ 4.27 - - - - - Combined Cycle Plant 60 20,500 - 9.23 9.23 9.23 6.20 TOTAL EEG 11.83 9.23 9.23 9.23 6.20 - TOTAL SECTOR 33.01 19.61 19.68 24.27 7.86 1.13 1/ Based on year-end 1977 fuel prices as follows: Bunker C Diesel Crude ------US$/Barrel--------- Escuintla 14.36 18.88 - Laguna 14.99 19.61 12.76 2/ With oil purifier, burning crude. POWER SECTOR PERFORMANCE INDICATORS 1977 1978 1979 1980 1981 1982 1983 A. INDE Sales (Gh) Bulk to BEG 684 683 964 1,063 1,191 1,364 1,474 Other 166 203 247 292 345 392 448 Transmission Losses (Z) 1/ 5.5 5.5 5.3 5.0 5.0 5.0 5.0 No. of Retail Customers (thousand) 83.9 94.0 105 115 127 137 148 No. of Employees: 2/ Administration 362 Commercial 103 Operations 3/ 858 Construction 1,800 Financial Ratios Operating Ratio % 94 79 40 38 44 36 38 Debt Service Coverage (times) 0.98 1.0 2.0 2.2 1.8 2.3 2,2 Debt/Equity Ratio 31/69 41/59 44/56 47/53 46/54 42/58 38/62 Receivables (days) 82 61 53 46 46 46 47 B. EEG Sales (GWh) 872 924 999 1,080 1,168 1,263 1,365 Distribution Losses (Z) 7.5 7.5 7.5 7.5 7.5 7.5 7.5 C. SECTOR Financial Ratios Operating Ratio (Z) 94 81 52 49 53 45 42 Debt Service Coverage (times) 1.2 1.4 2.1 2.3 1.9 2.4 2.5 Debt/Equity Ratio 29/71 39/61 42/58 45/55 44/56 40/60 35/65 Receivables (days) 4/ 68 54 50 45 46 46 46 1/ The total annual difference in kWh metered at the step-up substations (low-voltage level) and the delivery substations (low-voltage level), expressed as a percentage of kWh metered at the step-up substation. 2/ The figures for 1977 are actual numbers of personnel. A personnel plan is currently being prepared by INDE; when this has been received and reviewed by the Bank the appropriate performance indicators would be provided for future years. 3/ Personnel engaged in system operations, including related administrative services. 41 Excluding EEG's account payable to INDE. ANNEX B Page 1 SELECTED DOCUMENTS AND DATA AVAILABLE IN THE PROJECT FILE A. REPORTS AND STUDIES ON THE SECTOR A.1 Chixoy Hydroelectric Project Prefeasibility Study, June 1973, by the joint venture of Lahmeyer International - Motor Columbus - International Engineering Co. (LAMI); 6 volumes. A.2 Pronostico del Mercado de Energia Electrica de la Republica de Guatemala (Load Forecasts for Guatemala), January 1976 by INDE-EEG. A.3 Plan Maestro de Electrificacion Nacional--1977-2000 (National Electrification Master Plan Study) May 1976, by the joint venture of Lahmeyer-Salzgitter- Fichtner (LSF); 5 volumes. A.4 Master Plan for Electricity Supply--Xalala, Chulac, El Carmen, Serchil-- Preinvestment Study, July 1977, by the joint venture of Lahmeyer-Salzgitter- Fichtner; 3 volumes. B. REPORTS AND STUDIES ON THE PROJECT B.1 Chixoy Hydroelectric Project Feasibility Report, 1973/1974, by LAMI; 7 volumes. B.2. Informe Preliminar de Geofisica Aplicada a Geotermia - Estudio Geotermico, Jalpatagua-Moyuta (Preliminary Geophysical Study - Geothermal Study of Jalpatagua - Moyuta Fields),April 1974, by INDE. B.3 Technical Report No. 26, Preliminary Study on the Pampur Diversion Scheme, 1974/1975, by LAMI. B.4 Technical Report No. 34, Detailed Project Cost Estimate, 1974/1975, by LAMI. B.5 Optimization Study requested by IBRD and IDB, 1974/1975, by LAMI. B.6 Technical Report No. 3, Additional Analysis Requested by IBRD, November 1975, by LAMI. B.7 Bidding Documents, 1975-1976, for Lot 1 (Diversion and Dam - 4 volumes);Lot 2 (Power Tunnel - 4 volumes), Lot 3 (Powerhouse - 4 volumes), Lot 4 (Turbines - 4 volumes), Lot 5 (Generators and Transformers - 4 volumes), Lot 6 (Hydro- mechanical Equipment - 4 volumes) and Lot 7 (Transmission System - 4 volumes) by LAMI. B.8 Escuintla - Guatemala Transmission Line - Final Report, May 1976, by Electrowatt. B.9 Plan de Electrificacion Rural de la Region de la Costa Sur Occidental (Rural Electrification Study for the Southwestern Coast), undated, by INDE. ANNEX B Page 2 B.10 Informe del Avance de los Estudios en la Zona Atlantica y Peten (Progress Report on Studies for the Atlantic Zone and Peten (Rural Electrification)), July 1976, by INDE. B.11 Guatemala Sur - Guatemala Norte Transmission Line and Guatemala Norte Substation - Feasibility Report, October 1976, by Electrowatt. B.12 Plan Nacional de Desarrollo Electrico (National Plan for Electric Development (Subtransmission expansion)), December 1976, by INDE. B.13 Electrificacion Rural, January 1977, by INDE. B.14 Analisis Economico para la Adquisicion de Dos Turbinas a Gas de 25 MW Cada Una (Economic Analysis for Procurement of Two 25 MW Gas Units), April 1977, by EEG. B.15 Informe Sobre la Decision del Gobierno de Guatemala con Respecto a la Ampliacion del Sistema de Generacion Electrica Nacional Antes de la Entrada del Proyecto Hidroelectrico Aguacapa (Report on Guatemalan Government's Decision Related to Expansion of Generating Facilities Prior to Commissioning of the Aguacapa Hydroelectric Project), June 1977, by Government ad-hoc study group. B.16 Interconexion Guatemala - El Salvador, September 1977, by Courtoy-Traction. B. 17 Special Reports and Documents - Technical Letter DM-38 No. 1: Rio Chixoy Medio Hydroelectric Project, Power Tunnel, October 14, 1975, from Andrew H. Merrit (Consultant) to IDB. - Review of Seismic Design - Chixoy Hydroelectric Project, Guatemala (Final Report to the Inter-American Development Bank), December 1976, by M.G. Bonilla/R. Page (U.S. Geological Survey), Prof. K.L. Lee (Consultant) and Prof. H. Bolton Seed (Consultant). - Interim Report on the Guatemalan Earthquake of February 4, 1976, and the Activities of the U.S. Geological Survey Earthquake Investigation Team (Project Report - Guatemala Investigations - IR GU-1), March 1976, by United States Department of Interior Geologic Survey. - Geologic and Engineering Studies of the Guatemala Earthquake of February 1976, April 9, 1976, by the Office of Earthquake Studies, U.S. Geological Survey (Reston, Virginia). - Minutes of the First Meeting of INDE's Board of Consultants, February 18, 1977, by INDE. - Board of Consultants Report No. 1, February 18, 1977, by Messrs. J.W. Hilf and A.H. Merritt. ANNEX B Page 3 - Memoria Tecnica No. 5 - Comentarios Sobre el Informe del "Board of Consultants" (Technical Report No. 5 - Comments on the Report by the Board of Consultants), April 29, 1977, by LAMI. - Board of Consultants Report No. 2, May 13, 1977, by Messrs. J.W. Hilf, J.W. Libby and A.H. Merritt. C. WORKING PAPERS PREPARED BY BANK STAFF C.1 Miscellaneous working papers covering load studies, economic comparison, and financial analysis, March 1977 - February 1978, by C.F. Mena (Power Engineer, LCPEN) and C. Warren (Financial Analyst, LCPEN); bound volume.