Announcement of Five Million Dollars Power Loan in Ecuador on September 20, 1957

~\ WORLD .,,INTERNATlONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT 1818 H STREET, N.W., WASHINGTON 25 1 D. C. TELEPHONE: EXECUTIVE 3-6360 PRESS RELEASE NO. 501 SUBJECT: $5 million power loan September 20, 1957. in Ecuador ~\ ~~ The World Bank today made a second loan of $5 million to the Empresa \j Electrica, Quito, S.A. of Ecuador to help finance a project for the expansion of facilities to supply electric power to Quito and its suburban area. The area served by the Empresa is one of the most important in Ecuador. Quito is not only the capital city, but is also the center of one of Ecuador's main industrial regions. At present this area suffers from a severe lack of power. In the peak hours municipal. water pumping is cut off and various • sections of the city have to be disconnected. No new loads can be accepted a.ud industries have had to install their own diesels which are costly and uneconomic. Even with the severe restrictions which a.re now imposed, all equipment is operated at heavy overloads, which is technically most undesirable. An earlier loan of $5 million was ma.de in March 1956 for a proje~t com- prising a 14,48o-kilowatt hydroelectric pla..ut,a 3,000-kilowatt diesel plant, transmission lines and . the expansion of the distribution system. The project has now been revised to provide more power both for immediate needs ~d for the future. The revised project consists of a hydroelectric plant located at a new site to develop 20,000 kilowatts of power., a 6,000-kilowatt diesel plant instead of one of 3,000 kilowatts, transmission lines of greater IJ • capacity than in the original. project and expansion of. the distribution system to accommodate the increased generating power.  () - 2 - The larger diesel p:Lant will alleviate the serious shortage of power while the hydroelectric plant is being built. Thereafter, it will be used as standby capacity f<(t peak loads and fo~ emergencies when service from hydro- • electric power plants might'be disruptet The C:e:w site ot the hydro~lectric plant is, capable of developing 1\ 40,000 kilowatts of power and provision is , being made for the inotallation of another 20,000 kilowatts of capacity at a later date. When the 20, 000-kilowatt hydroelectric plant is in operation there will be sufficient power to meet the needs of the area until 1962; and with the additional 20,000 kilowatts of capacity, until 1967. The cost of power under c> the revised project will be about the same Eis under the original project. ii ,I Wtlen the second 20,000 kilowatts of generating capacity is installed, however, the cost will be substantially lower. \ The total cost of the revised project is estimated at $16 million, an ,·, increas~ of $5 million in foreign exchange and of $1 million in local currency • -, overt, the original project. The Bank's loans totaling $10 million will be used (< to pay for imported equipment, materials and services. ('. ,,,, , Today's. loan is for a term of 20 years and bee.rs interest of 5-~3f4'/o including the 1i connnission which is allocated to the Bank's Special Reserve. Amortizatimi will begin February l, 1962. The loan is guaranteed by the Government of Ecuador. (~~ 1 After \ having been approved by the Bank's Executive Directors, the loan documents were signed· by His Excellency Dr. Jose R. Chiriboga V. , Ambassador /for Ecuador in Washington, _/ on behalf of the Govel'!llllent of Ecuador, by Ricardo Espinosa Palacios, General Manager, on behalf of Empresa Electrics., Quito, S.A., and by Eugene R. Black, President, on behalf of the World Bank • •