Announcement of Twelve Million Dollars Power Loan in Colombia on May 20, 1959

WORLD • INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT 1818 H STREET, N.W., WASHINGTON 25 1 D. C. TELEP.HONE: EXECUTIVE3-6360 PRESS RELEASE No. 587 SUBJ'ECT: $12 million power loan May 20, 1959 in Colombia The World Bank today made a loan equivalent to $12 million for a. hydroelectric power project which will provide 96,000 kilowatts of addi- tional generating capacity for Medellin and neighboring to'WtlS in west central Colombia. The Grace National Bank of New York is participating in the loan, with- out the World Bank's guarantee, to the extent of $100,000, representing pa.rt • of the first maturity which falls due February 15, 1963 • · The loan was made to the Empresas Publicas de Medellin, an autonomous public agency which provides power, t(elephone, water and sewage services in the Medellin area. Medellin, the cerLter of Colombia's textile industry, is a rapidly growing city. Since 1948 its population has risen from 170.,000 to about 500,000; the population of the entire service area of the Empresas is now 716,000. While the area is M,ghly industrialized, expansion has been hampered :for several years by a shortage of· power. It has become commQn practice :for industrial plants to have standby diesels and the two largest textile mills 1n the· area have built thelr own power plants • . The present capacity of the Empresas' power system is 136,500 kilowatts in :four hydroelectric power plants, two of which a.re on tlle Guadalupe river. Market studies show that the peak load ~ll more than double by 1964 and • triple by 1968. The Empresas are therefore undertaking the installation of 246,ooo kilowatts in hydroelectric plants on the Guadalupe and Na.re rivers · by 1964.  ' - 2 - The project which the Bank :.Loan will help to finance is the ti~Jt phase of this program. It consists of· :works to divert the Concepcion and Tenche rivers into the Guadalupe to increase its flow; the Tr~neras earth-fill dam • on the Guadalupe to create a reservoir With a useful. storage capacity of about 32 lDillion cubic meters; a power plant at the foot ·of the Troneras dam to be equipped with a 16,000-kilowa.tt generator; and a ~econd power plant to be known as Guadalupe III, equipped With two 40,000-kilowatt genera- tors. ~LSO included in the project are transmission lines to ~onnect the new plants with existing ones and with the city of Medellin, and extension of the distribution system in Medellin. Funds from the Bank loan will also be used to finance preliminary engineering studies for the power project~ to be built on the Na.re river as the second phase of the expansion program. The Guadalupe III power plant is scheduled for operation by :mid-1961 and the entire project should be completed in 1962. equivalent of $19,350,000~ The total cost is the The Bank loan will cover the foreign exchange re- • quirements. The loan is for a term of 25 years and bears interest of &/o including the ii commission which is allocated to the Bank's Special Reserve. .Amortiza- tion will begin February 15, 1963. The loan is guaranteed by 'the Government of Colombia. After having been approved by the Bank's Executive Directors, the t?a.n documents were signed by Mr_. Ignacio Mesa, Charge d'Affaires of the Colombian Embassy in Washington, on behalf of the Government of Colombia, and by Dr. Oscar Baquero, .General Manager, on behalf of the Empresas Publicas de Medell.in. •