Announcement of Two Million Eight Hundred Thousand US Dollars Power Loan in Colombia on December 15, 1958

WORLD • INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT 1818 H STREET, N.W., WASHINGTON 25, D. C. TELEPHONE: EXECUTIVE 3-6360 PRESS REL.EASE No. 567 SUBJECT: $2.8 -million power loan December 15, 1958. in Colombia The World Bank today made a loan of $2.8 million to expand electric power supplies in Cali, the main city of the cauca Valley in Colombia. Although the supply of power in the Cali area has been increased sixfold in the past three years, population growth and rapid industrialization continue to create.new demands for electricity. The loan will finance a second 10,000-kilowa.tt unit at a steam plant at Yumbo, near Cali. Chemical Corn Exchange Bank is participating in the loan, without the World • Bank's guarantee, to the extent of $280,000 representing the first six maturities which fall due between March 15, 1961 and September 15, 1963. The loan was :made to the central Hidroelectrica del Rio Anchicaya, Limitada (CHIDRAL), a company whose majority shareholder is the cauca Valley Corporation, an. autonomous regional development agency; the other two shareholders are the Department of the Cauca Valley and the Municipality of Cali. This is the Bank's third lo~=i to CHIDRAL for the expansion of its electric power system. Two loans totaling $8,030,000, made in 1950 and 1955, helped to finance a 44,000-kilowatt hydroelectric installation on the Anchicaya river and the first unit of 10 1 000 kilowatts at the Yumbo thermal power plant, together with transmission facilities. In the past several years Cali has become one of Colombia's most importan~ indust~iaJ. cities. The ·many new industries that h~ve been established there have • been opera.ting successfully and some of them have been expandj_ng recently, notably Colombian- and foreign-owned cement., paper and pharmaceutical plants. The expansion of electric power supplies has greatly aided this industrial growth.  ,- • - 2 - • Prior to 1955 Cali's only sources of power were umall hydroelectric and diesel plants with a total capacity of 12,500 kilowatts, and power sales were determined entirely by the available capacity, rather than by demand. Between July 1955, 'When the Anchicaya power plant began operation, a.nd the end of 1957, the peak load jumped by some tlYfo and sales ~f power more than doubled, reflecting a large unsatisfied demand. The largest increase was in industrial and coannercial users, whose total consumption increased .from 42 million kilowatt hours to 101 million; they now represent about f:IJ% of the sales. It is estimated that power from ·the new 10,000-kilowatt Yumbo unit will be absorbed by about 1962. To make adequate distribution of the energy to be produced by the new thermal unit a.t Yumbo, the distributi.on system, which is even now overloaded, ·must be expanded. The principal consuming center is Cali, where power is dis- tributed by a semi-autonomous municipal agency, Empres.as Municipales de Cali. CHIDRAL will re-lend $550,000 of the Bank loan' to this agency for the expansion of the distribution system. Most of CHIDRAL's present capacity is generated by the Anchicaya hydro- • electric plant which was recently expanded to 64,oao kilowatts. An amount of $4oO,OOO of the loan has been allocated for the purchase a.nd installation of a suction dredge and auxiliary equipment to keep the Anchicaya Reservoir free from silt and debris. The loan will also cover the cost of equipment and services required to carry out studies for the further expa.ns j_on of the Yumbo plant. The loan is for a. term of 20 yea.rs a.nd bears interest of 5-3/41o per annum including the 1% commission which is allocated to the Bank's Special Reserve. Amortization will begin in March 1961. The loa.n is guaranteed by the Government of Colombia.. • 'l't;.e World Bank has now made 12 loans in Colombia totaling $114 million. The previous loans have been for the development of electric power, highways, railroads and agriculture.  - 3 - • Af'ter having been approved by the Bank's Executive Dir~ctors, the loan documents were signed by His Excellency Dr. Don Jose Gutierrez-Gomez, Ambassador for Colombia in the United States, on behalf of the Colombian Government, by Mr. Santiago Salazar Santos, Economic Counselor of the Colombian Embassy in Washington, on behalf of CHIDRAL, and by Mr. J. Burke Knapp, Vi~e Pr~sident, on behalf of the World Bank • • •