Colombia - Village Electrification Project

Document of The World Bank E COPY FOR OFFICIAL USE ONLY Report No. 3395b-CO STAFF APPRAISAL REPORT COLOMBIA VILLAGE ELECTRIFICATION PROJECT May 6, 1981 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 Average Calendar 1979 Average Calendar 1980 (Estimated) Currency Unit = Peso - Col$ US$1 = Col$47.274 US$1 = Col$42.587 Col$l US$0.02115 Col$1 US$0.02348 WEIGHTS AND MEASURES 1 meter (m) = 3.281 feet (ft) 1 square kilometer (km2) = 0.386 square mile (mi ) 1 cubic meter (m3) = 35.315 cubic feet (ft3) = 264.2 gallons (gal) = 6.290 bbl 1 kilogram (kg) = 2.206 pounds (lb) 1 ton (t;metric;1,000 kg) = 1.100 short tons (sh. tons) 1 kilowatt (kW) 1,000 Watts (103 kW = 106 W) 1 kilowatt-hour (kWh) = 830.0 kilocalories (kcal) 1 Megawatt (MW) = 1,000 kW (103 kW = 106 W) 1 Gigawatt (WG) - 1,OOO MW (106 kW = 109 W) 1 Gigawatt\hour (GWh) - 1,000,000 kWh (106 kWh) 1 kilovolt (kV) = 1,000 Volts (V) 1 kilocalorie (kcal) = 3.968 Btu I trillion cubic feet = 1012 cubic feet per annum /a GLOSSARY OF ABBREVIATIONS CARBOCOL Carbones de Colombia CONPES = National Economic and Social Policy Council CORELCA = Corporacion Electrica de la Costa Atlantica CVC = Corporacion Autonoma Regional del Valle del Rio Cauca ECOPETROL = Empresa Colombiana de Petroleo EEEB = Empresa de Energia Electrica de Bogota EMCALI = Empresas Municipales de Cali EPM = Empresas Publicas de Medellin FDE = Fondo de Desarrollo Electrico GTZ Deutsche Gesselschaft fur Technishe Zusammenarbeit GmbH IBRD = International Bank for Reconstruction and Development ICEL = Instituto Colombiano de Energia Electrica IDB = Inter-American Development Bank ISA = Interconexion Electrica S.A. JNT = Junta Nacional de Tarifas de Servicios Publicos NPD = Nationa Planning Department OED Operationas and Evaluation Department (IBRD) PEFF = Permanent Electricity Financing Facility FISCAL YEAR January 1 - December 31  FOR OFFICIAL USE ONLY COLOMBIA CORPORACION ELECTRICA DE LA COSTA ATLANTICA - CORELCA VILLAGE ELECTRIFICATION PROJECT TABLE OF CONTENTS Page No. IL. THE SECTOR Energy Resources ............................................. 1 Power Sector Organization ........................... 3 Regulation, Planning and Coordination ............... 4 Present Developments ........................................ 5 World Bank Participation in the Sector ...................... 8 Sector Market Statistics and Forecasts ...................... 9 Rural Electrification ....................................... 12 Sector Investment Program ....................... 12 Finances and Tariffs ........................................ 13 2. CORELCA AND ITS SUBSIDIARIES General ...................................................... 14 Organization . ............................................... 15 Personnel . ................................................... 16 Training . ................................................... 17 Accounts and Auditing ....................................... 17 Insurance . ................................................... 17 Tariff and Rates .......... .................................. 17 General Outlook for the Electrificadoras .................... 18 3. CORELCA'S MARKET Supply Area . ................................................. 19 Access to Service ........................................... 20 Historic Development ........................................ 20 Captive Plants ............ .................................. 21 Forecasts . ................................................... 22 4. THE PROGRAM AND TPE PROJECT The Generation and Transmission Program ..................... 23 The Atlantic Coast Village Electrification Program .... ...... 24 The Project . ................................................. 25 Objectives ........... .................................. 25 Description ............................... 25 Location ............................... 26 Cost ............................... 27 Financing ............................... 27 Engineering, Training, Studies .............................. 29 Training ............................... 31 Studies ............................... 31 Project Unit ............................... 31 This report is based on the findings of an appraisal mission which visited Colombia during November-December 1980. The mission comprised Ms. Garcia-Zamor, Mr. Linder, and Mr. Claude Besse (Consultant). 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.  Table of Contents (Continued) Page No. Execution .......... 32 Implementation Schedule ...... o ..... o................... 32 Procurement ....... I ........................... .... O... 32 Disbursement ................................ .......... 32 Environment ............................................ 32 Project Risks .......................................... 33 Project File .................... ....................... 33 5. FINANCES Introduction ............. ................................... 33 Earnings History ........................ .................... 33 Rate Base . .................................................. 34 Financial Structure ......................................... 34 Investment and Financing Plans .............................. 35 Future Finances ............................................. 38 Fuel Prices . ............................................... 39 Investment Limitation ....................................... 40 Financial Outlook for CORELCA's Subsidiaries .... ............ 40 Atlantico . ................................................. 41 Bolivar . .................................................... 42 Magdalena . .................................................. 42 Cordoba . .................................................... 43 Sucre .................. .................................... 43 Cesar ............ o .......................................... 44 Guajira . .................................................... 44 San Andres and Providencia .................................. 44 6. ECONOMIC ANALYSIS Load Forecast .............................................. 45 Least-Cost Solution ......................................... 46 Subprojects Ranking ......................................... 47 Return on Investment ........................................ 48 7. AGREEMENTS REACHED AND RECOMMENDATION Agreements reached ........................................... 50 Conditions of Effectiveness ................................. 52 Conditions of Disbursements ................................. 52 Recommendation .............................................. 52 ANNEXES 1.1 Energy Supply and Demand . .......................... 53 1.2 IBRD Power Loans ........................ ............... 54 1.3 National Generation Development Program .... ............ 55 3.1 CORELCA'S System Effective Capacity ..... o .............. 56 3.2 Energy Consumption and Supply Data 1982-1988 .... ....... 57 3.3 Electrificadoras Energy Balance 1979-1980 .... .......... 59 4.1 Diesel Units to be Eliminated under the Project .... ..... 60 4.2 Project Cost Estimate .................................. 61 4.3 Project Implementation Schedule ........................ 62 4.4 Loan Disbursement Schedule ............................. 63 4.5 Contents of Project File .............................. 64  Table of Contents (Continued) Page No. ANNEXES (Continued) 5.1 Schedule of Existing and Proposed Debt .... ............. 66 5.2 Actual and Forecast Income Statement 1977-1986 .67 5.3 Sources and Applications of Funds 1980-1986 .68 5.4 Actual and Forecast Balance Sheets 1977-1986 .69 5.5 Forecast Loans Disbursement Statement 1980-1986 .70 5.6 Forecast Debt Amortization Statement 1980-1986 .71 5.7 Forecast Interest Charge to Construction .... ........... 72 5.8 Forecast Interest Charged to Operation 1980-1986 ....... 73 5.9 Electrificadora del Atlantico S. A. Historic and Forecast Income Statements 1977-1986 .... 74 Sources and Applications of Funds 1980-1986 .... ...... 75 Historic and Forecast Balance Sheet 1977-1986 ........ 76 5.10 Electrificadora de Bolivar S. A. Historic and Forecast Income Statements 1977-1986 .... 77 Sources and Applications of Funds 1980-1986 .... ...... 78 Historic and Forecast Balance Sheet 1977-1986 ........ 79 5.11 Electrificadora del Magdalena S. A. Historic and Forecast Income Statements 1977-1986 .... 80 Sources and Applications of Funds 1980-1986 .... ...... 81 Historic and Forecast Balance Sheet 1977-1986 ........ 82 5.12 Electrificadora de Cordoba S. A. Historic and Forecast Income Statements 1977-1986 .... 83 Sources and Applications of Funds .... ................ 84 Historic and Forecast Balance Sheet 1977-1986 ........ 85 5.13 Electrificadora de Sucre S. A. Historic and Forecast Income Statement 1977-1986 ..... 86 Sources and Applications of Funds 1980-1986 .... ...... 87 Historic and Forecast Balance Sheet 1977-1986 ........ 88 5.14 Electrificadora del Cesar S. A. Historic and Forecast Income Statements 1977-1986 .... 89 Sources and Applications of Funds 1980-1986 .... ...... 90 Historic and Forecast Balance Sheet 1977-1986 ........ 91 5.15 Electrificadora de la Guajira S. A. Historic and Forecast Income Statements 1977-1986 .... 92 Sources and Applications of Funds 1980-1986 .......... 93 Historic and Forecast Balance Sheet 1977-1986 ........ 94 6.1 Main Agricultural Production of the Atlantic Coast ..... 95 6.2 Project Energy Sales ................................... 96 6.3 Subprojects: Location and Main Features .... ........... 98 6.4 Rate of Return on Project .............................. 99 MAPS IBRD 15511 - Colombia - Atlantic Distribution Project   COLOMBIA CORPORACION ELECTRICA DE LA COSTA ATLANTICA VILLAGE ELECTRIFICATION PROJECT 1. THE SECTOR Energy Resources 1.01 Colombia