Announcement of Eight Million Eight Hundred Thousand US Dollars Loan in Costa Rica on February 3, 1961

0 FOR IMMEDIATE RELEASE WOIILD iiJ INTERNATIONAL BANK FOR RFCONSTRLJCTIOl'l AND DEVELOPf/iENT 1818 H STREET, N.W., WASHINGTON 25, D. C. TELEPHONE: EXECUTIVE 3-6360 Press Release No. 671 SUBJECT: $8.8 million loan February 3, 1961 in Costa Rica 1;~; ~ ij The World Bank today made a loan equivalent to $8.8 million fo(t the expan- \\ '): sion of electric generating and transmission facilities in Costa Rica. The loan will help to finance the construction of a 30,000-kilowa.tt hydroelectric plant /J - on the Rio Macho., the installation of 9,000 kilowatts of diesel generating ca- pacity at Colima and Limon, and the extension of the central transmission net- work. The new facilities will provide a 40% increase in power generating ca- • pacity in the central Zone, which contains the capital city of ··san Jose and is the area of greatest economic activity and of highest population density. The Bank of America and Grace National Bank of New York participated in the loan, without the World Bank's guarantee,to the extent of $120,000 repre- senting the first maturity and part of the second maturity which fall due in May and. November 1964. The loan was made to the Instit~to Costarricense de Electricidad (ICE), an autonomous Government corporation, which owns and operates 52% of Costa Rica's total installed electric generating capacity, as well as the central transmission network. Costa Rica, with an area of 19,700 square miles and a population of approx- imately one million, is the second smallest of the Central American Republics. About three-fifths of the population live in the Central Zone, a high plateau in the center of the country comprising some 1,500 square miles. Per capita income is the highest of the Central American countries and there is a rela- tively even distribution of wealth. While agriculture is the basis of the  ( ); - 2 - • economy, ll!anu:facturing industries hS.Ve been growing steadily in recent years, ' and progfess · has been made'J in developing power and transport. The economy is expanding and more power ·capacity is needed if development is to .~ontinue. . ' tJ 1{ . . I) .,. '~ Ertimat~s show that demand for energy to be supplied by ICE is expected to, grow -~; at the rate of nearly 11% a year during the next 10 yea.rs. The power proj~ct :s 1 r··. now to be undertaken with the assistance of the Bank loan will enable ICE to meet a large part of this demand. A new hyclJ:toelectric power plant with an initial installed capacity of \1::::::.::: 0 ' 30,, 000 kilowatts will be built on the Rio Macho. This will be the first stage i/ of the development of three sites on the Rio Macho; the tunnels and other works ' wl.11 be so constructed as to permit the future installation of additional units l.'t to a final capacity of 90 ,OOO kilowatts. At an existing diesel plant at Colima • 8,000 kilowatts of new capadity will be added to take care of the increasing load in the Central Zone until the Rio Macho plant is in operation in early 1963. To, ·meet local needs at Limon, a port on the Atlantic coast, l,QOO kilo- watts of new capacity will be added to an existing plant. New transmission facilities, consisting of about 48 miles of new lines and various substations, will enlarge the central transmission network to connect with the Rio Macho plant and also with a small network on the Pacific Coast. The total cost of the new facilities is estimated at the equ:t,valent of $18. 5 million. The Bank loan will cover the foreign exchange costs and the re- maining costs will be met by ICE from its own revenues, local borrowings and Government contributions. The major imported equipment and services will b·e ob'.'"'f tained on the basis of international competitive bidding. The loan is for a term of 25 yea.rs and bears interest of 5-3/41, per annum, • including the 1% commission which is allocated to the Bank's Special Reserve.  " Amortization will begin May l, 1964. The loan is guaranteed by the Republic = of Costa. Rica. 0 in~luding ,;today's loan, :tihe Bank has n9w lent $17.3 million in CostaDRica. " Three earlier loa:!ls were made t,o the Banco Central de Cost~ Rica. to finance the'' " import of capital equipment for 'the 9.~ielopfuent ··of agriculture and industry. 0 ,7· ~~ After having been approved by the Bank's Executive Directors, the loan docume.nts were signed by His Excellency Manuel G. Escalante, Costa Rican 0 Ambassador in Washington, on behalf of the Republic of Costa Rica, and by ~· Mr~ Edgar Jimenez .Andreoli,, Manager of the Institute Costarricense de Elec- tricidad; on behalf of the borrower • • • > 0 (I •