Announcement of Eleven Million US Dollars Power Loan in Mexico on January 14, 1958

FOR IMMEDIATE RELEASE F ·._.·.,,I,"..•.. . • ;,,:,_ REC()NSTRU (J8i 8 H STREEJ", N,W., WASHINGTON 25, D, C, TELEPHONE: EXECUTIVE 3-6360 PRESS RELEASE NO. 519 SUBJECT: $11 millinn power loan January 14, 1958 in Mexico • (( II The World 13ank today ma.de a l(.)an equivalent t~ $11,million tn the"privately- (\ \ " ~~-. G f} 1: . {\ owned Mexican Light and Power Company I.,fmited o(Mexlight) ·+,"or :the expansion of the 1 Company's electric power system. ' Mexlight is extenq'ing its transmission and ' ) ' ;) distribution systems and'· increasing its genera.ting capacity by aboutc95,000. kilo- watts, or about one-fifth.· Seven private financial ins'titutions ~e· ..pa.rti'c:~ipatiµg ,,,.. . in the loa.l'l., without " •. -, ~ ~ '=-· "- the World Bank's gua:t:"antee, for a total amount of $1 million o,f ~he first six , , ' ' . ) maturities which fall due between September 1959 and March 1962. The participa:1ts are Credit Suisse, Sofina of Belgium, Canadian Bank of Connnerce, First National City Bank of New York, Chemical Corn Exchange 13ank, National 13a.nk of Washington and United states Trust Company of New York. ~ Mexlight distributes power in Mexico City Jmd the surrounQ,ing area, not only from its own plants but also frn111 the plants of the Miguel Aleman system of the Federal Electricity Comnission. The area served by Mexli~ht is the chief governmental, industrial and.commercial .::, center of Mexico. It covers a.bout 12,000 square miles and, besides Mexico Ci'.ty and the other important cities of Toluca, cuernavaca ~d Pachuca, it includes a.bout 4oo towns and villages. Q Mexlight has over 635,000 customers. They include, in addii'ion to residential consumers, factories, mines, commercial ienterprises and public services. During the years I' 1955-57, the a.mount of energy sold by Me~igh.t increased b:y an average . of some 121, annually. In 1956, 53.5cfo of the kilowatt-hour sales were to industrial consumers and mines, 181, r,, to commercial and small ·industrial consumers  0 - 2 - ~d 15~ to domestic ~onsum~rs. The bale.nee represents sales to public services and tramways. Major industries in th~ area include textiles;· metallurgy, cement, paper, ,rubb~r goods, engineering pro·ducts, electrical e.ppliances and oil pumping installations. A B~k l~an of $26 millioil in April 1950 helped to finance projects which added 155 ,6oo kiJowa.tts of gen~rating capacity to Mexlight 's system and correspond- \, ~ ' ing additions to)the transmission and d.fstribution systems. ,All of the worl,{ on th~se projects was completed by December 1955. c) ,, . ii ,. ·The expansir,n now being und.erte.ken in~ludes the a.d.dition of a 82,400-kilojm,tt unit to the ,::::,_ 66,000-kilowatt Lecheria therma.lcplant, which Wa$1Cpnstructed.:with the _help of the earlier Bank loan;·· the modification of two genera.ting units in the .:-\.. . Ncnoalco' thermal plant to increase capacity by--'12# 509 kilowatts; and the f'urlll.e.r ...~ _r;_.. i,__ ,. • extehsiufr, of Mexlight's transmission and distribution networks • New construction at the Lecheria plant was started in mid-1956, and much of' the equipment has ~lready arrived at the site; complet~on is scheduled for April 1958. Work at ~he NonoaJ.co thermal plant is expected to be finished this yea:r. Part of the extension of the transmission and distribution systems was carried out in 1956 and 1957, and the rest will be :finished by the end of 1958. At that time, Mex.light's system will have a. total. genera.ting capa.city of 585,000 kilowatts. In addition Mexlfght distributes the power from about 350,000 kilowatts of genera.ting capacity of the M:i.guel Aleman system. This system was extended with the help of' part of Bank loans totaling $53.8 million to the Federal Electricity Commission. The total cost of the expansion now being un.dertaken by Mexlight is estimated a.t the equivalent of $28 million. The Bank's loan will cover the costs of im- ported equipment. Mexlight is meeting the local currency requi.ru~cnts through $ • loan equivalent to $8 million from Naciona.l Firia.nciera, _a. govern!!lent agency, and  J) - 3- from its own resources. D The Bank's loan is for a,,term of 20 years and bears interest of 5-5/&fo; including the 1i commission which is ~located to the Bank's ~pecial Reserve. I\ Amortization will begin September 15, 19,59. The loan is guaranteed by the Govern- ment · of Mexifo. G "' 11he Banlt ,has now lent a net total c,f $152. 3 million in Mexico, of which CJ - II $90. 8 million has been" for the developme~t of electric power, $61 million'' for railway" improvements, and the remainder for industrY. ,:P \\ r1 \\ . After ·having been approved by the Bank's ~tecutive Dlrectors, the loan· documents were1:=-~igned by Manuel s. Valladares of .NacionaJ. Fina.nciera, Washington, D. c., on /; II . behaJ.f of the Mexican Government, by William H,, Dra.p,er, Jr., Chairman of the Bo~d, on behalf of Mexlight, and by W. A. B.. Iliff, Vice President, on behalf' of the • World Bank.