Announcement of Romania Receives World Bank Loans for Electric Power and Pipe Production on January 15, 1979

- ' . . ,FOR IMMEDIATE RELEASE ' •World Bank 1818 H Street, N.W,, Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 J a nu a ry 15 , 1979 BANK NEWS RELEASE NO. 79/39 ROMANIA RECEIVES WORLD BANK LOANS FOR ELECTRIC.POWER AND PI PE PRODUCT ION · The World Bank today announced the approval of two loans totaling $110 million to help finance the implementation of two development projects in Romania -- electric power and steel pipe production. A $70 million loan will assist the construction of the second stage of the thermal power itation a: Tutce~i in southwestern Romania with associated power lines. The other loan of $40 million will help finance construction of a' "Pilger" mill for production of large diameter seamless wall steel pipes at Roman in the northeastern.part of the country. The World Bank loans to the Investment Bank of Romania, to be • guaranteed by the Socialist Republic of Romania, are for 15 years, including 3 years of grace, with interest at 7.35% per annum. Electric Power Project The government of Romania attaches high priority to development of the electric power sector which it considers to be a prerequisite for the over- all economic development of the country. Energy policy is aimed at diverting Romania's 1 imited gas reserves increasingly for use as feedstock in the chemicai industry, while additional power generation is based on low grade domestic sol id fuels such as lignite and shales; and on hydropower and nuclear power. The $482.7 million second Turceni thermal power project, supported by the $70 million Bank loan, forms part of a least cost investment program which was selected from available alternative schemes. Construction of a thermal power station with four 330 Megawatt (MW) units is a second stage extension to the first 1,320 MW thermal power station under construction at Turceni with assistance from a 1974 World Bank loan. The new faci 1 ity, uti 1 izing 1 ignite fuel, wi 11 deliver 7,920 Gigawatt hour (GWh) per annum to the existing interconnected system. The northern city of Cluj will be connected to the Turceni power station by 288 kilo- meters (km) of 400 kilovolts (kV) transmission lines to be built as part of the project. / ... • NOTE: Money figures are expressed in U.S. dollar equivalents.  -·~·- Seamless Pipe Project The rapid expansion of Romania's industrial sector and the continued exploration for and production of oil and gas will increase d~mestic demand for steel pipes. Large diameter seamless wall pipes have wide a~plications across • Romanian industry. Uses include, oil and gas exploration, production and trans- portation, chemicals, boiler, machine tool and earthmoving equipment manufacture, shipbuilding, and marine platform manufacture. The Roman seamless pipe project will contribute to meeting domestic demand, thus making a major co~tribution to Romania's continuing development effort, and will enable the country to earn scarce foreign exchange by increasing its exports of large seamless pipe products. The $139.4 mill ion project, with a $40 mill ion Bank component, comprises construction of a "Pilger" mill with capacity to produce about 130,000 tons per year of about 100 different types of large diameter seamless wall pipe from carbon and alloy steel. Included will be ingot preparation facilities, a main "Pilger" line, a hot expansion, press and finishing and auxiliary facilities. The "Pilger" process-invorves the pi'ercir.g of a cast steel ingot with a cylindrical bar to produce a bottle-shaped ingot. The interior is expanded on an elongator, and the pipe achieves its final dimensions by being forced through rolls mounted on the "Pilger" mill after a solid bar or mandrel of the diameter of the finished pipe has been inserted. After extraction of the mandrel, the heavier end of the pipe is cut off before it goes through a ffnal finishing process. The Romanian pipe industry will benefit from the transfer of this highly specialized technology. Employment will be provided for about 900 people in a region with relatively 1 ittle industry. • - 0 - • FORM NO.1121 (5-76) T ECHN I CA L D A T A • PROJECT: COUNTRY: TOTAL COST: Second Turceni Thermal Power Socialist Republic of Romania $482.7 million BANK FINANCING: $70 million for 15 years, including 3 years of grace, at an interest rate of 7,35% per annum. OTHER FINANCING: Turceni Enterprise and Government of Romania. IMPLEMENTING ORGANIZATfON: Turceni Enterprise Turceni, Filiasi Judet Golj Romania Romania Procurement Agency: ROMENERGO M Boulevard Lacul Tei, Sector 2 • Bucharest 1 Romania Telex: #011-525 ROMENG PROJECT DESCRIPTION: Coi1struction of (a) a thermal power station with four· 330 MW lignite-fired units delivering 7,920 GWh per annum to the interconnected system; (b) 288 km of 400 kV transmission lines connect- ing Turceni with the city of Cluj. PROCUREMENT: Contracts for three complete turbine generator sets and minor electrical and mechanical equipment will be awarded through international competitive bidding in accordance with the Bank's guide- lines. Romanian manufacturers will be accorded preference of 15% of c. i.f. price or the applicable customs duty (w~lchever is lower). Advance contracting on items other than the three turbine generator sets (totaling about $8.9 million) has been allowed . • ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 6.4% 1982 - 0 - FORM NO. 1121 (5-76) T ECHN I CA L D A T A PROJECT: COUNTRY: TOTAL COST: Roman Seamless Pipe Socialist Republic of Romania $139. 4 mi 11 ion • BANK FINANCING: $40 million for 15 years, including 3 years of grace, at an interest rate of 7,35% per annum. OTHER FINANCING: Government of Romania Suppliers or financial credits or a mixture of both, $20 million IMPLEMENTING ORGANIZATION: Roman Enterprise Roman Judet Neamt Romania Romania Procurement Agenc_y_: METAROM Boulevard Gh. Gheorghia-Dej, Nr. 42 Bucharest • Romania Te 1ex: 1170 5 PROJECT DESCRIPTION: Construction of a 11 Pilger 1 ' mill with capacity of about 130,000 tons per year of large diameter seamless wall pipe. It includes: a) ingot preparation facilities; b) a main 11 Pilger 11 line; c) a hut expansion press; and d) finishing and auxiliary facilities. PROCUREMENT: The main technology/equipment package for the core of the 11 Pi lger" mi 11, estimated to cost $32 mi 11 ion, i:3 beingI procured under international competitive bidding (ICB) in accordance with thE Bank s guide l i nes. Other imported equipment ar-~ spa res, not manufactured in ?toman i ci at present, and estimated to cost $28 mill ion> w:11 be procured through ICB. Roianian suppliers will be accorded preference of 15% of the c. i .f. price or the appi lcable customs duty (whichever is lower) for $8 million worth of less specialized equipment which is also subject to ICB and for which qualified Romanian suppliers exist. Im- ported equipment and spares in all the categories described above, but either avail- able from a limited number of suppliers or needed at a critical juncture, or costing 1ess than $250,000 up to a total of $2 mi 1 ·1 i (,n may be purchased after so 1 i citation of bids from at least three member countries and Switzerland, subject to prior Bank approval of the lists of items concerned. CONSULTANTS: Technical assistance on engineering, procurement, erection, training, com~;ssioning, and operation of the project will be provided by the supplier of the i;p; 1ger 11 mi 11. ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 12% 1981 - 0 - •