Announcement of World Bank Supporting Electric Power Development in Colombia with One Hundred Seventy Million Dollar Loan on April 2, 1984

FOR IMMEDIATE RELEASE World Bank 1818 H S reet, N W., Washington, D.C. 20433, U.S.A. *Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 84/59 Contact: Ciro Gamarra April 2, 1984 (202) 477-5320 WORLD BANK SUPPORTS ELECTRIC POWER DEVELOPMENT IN COLOMBIA WITH $170 MILLION LOAN The World Bank has approved a loan of $170 million to Financiera Electrica Nacional (FEN) to help finance Colombia's electricity development program for 1984-85. Projects under the program will supply the energy required to continue the country's industrial and commercial growth. They will also provide electricity to a larger segment of the population, only 54 percent of which has access to electric power. The projects have a combined cost of $1.6 billion. Colombia needs support to sustain the scheduled construction of several high priority electric power projects. Delays attributable primarily to unforeseen geological problems and lack of financing have already added up to two years to the estimated completion dates of various hydroelectric projects. Further delays could result in the rationing of electric power. The projects include power generation and transmission, distribution, and additions to plant and facilities needed to transmit power to consumers. The World Bank is also considering participating in two syndicated loans totalling $200 million. The Bank's share would be up to 15 percent. These loans, known as a "B-loans," are newly-adopted financing instruments of The World Bank. They will be the fourth and fifth such loans to be approved. Other financing will come from existing foreign loans and from sources of capital in Colombia. FEN, the recently-established financial arm of the power sector, will also be providing local currency loans. Another objective of the program is to help strengthen FEN, which was created to tap domestic and foreign capital markets for the financing of power projects. FEN is in charge of coordinating financing in the sector, mobilizing domestic savings, and conducting foreign credit operations. Subloans for the projects in construction under the electricity development program will be processed by FEN. The World Bank loan is for 17 years including four years' grace with a variable interest rate linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on undisbursed balances and a front-end fee of 0.25 percent on the amount of the loan. NOTE: Money figures are expressed in U.S. dollar equivalents.