Announcement of Dollar 30 Million Loan in Yugoslavia on July 11, 1962

WORLD • INTERNATIONAL ;BANK FOR RECONSTRUCTJON AND DEVELOPMENT 1818 H STREET. N.W., WASHINGTON 25 1 D. C. TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 62/24 SUBJECT: $30 million loan in July 11, 1962 Yugoslavia The World Bank today made a lean equivalent to $30 million for the con- tinuation of a national power expansion program in Yugoslavia. The loan will help to finance construction of a 24o,OOO-kilowatt hydroelectric plant in cen- tral Yugoslavia, and the extension of the country-wide electric power network 'Jy the installation of 362 miles of transmission lines and associated sub- • stations • The loan was made to the Yugoslav Investment Bank, a Federal Government institution which channels investment funds for development. The Investment Bank will re-lend the proceeds of the Bank loan to the enterprises responsible for constructing and operat:ing the power plant and the transmission system. Power sales in Yugoslavia. have increased at an average annual. rate of about 16% over the past five years, reflecting the substanttal. economic growth of the C'o.untry. The power market is characterized by high industrial consumption, which in 1961 was 70"/, of the total. The largest industrial users are plants producing aluminum, carbide, ferro-alloys, copper, lead, zinc, iron, steel cables, chemicals, electrical and mechanical equipment, and textilee.. The supply of power to residential and commercial consumers is limited ma.inly to urban canters, ~o that at present only about half the population has electricity • • The hydroelectric·installation for which today's loan was made is·the Bajina Basta project on the Drina River. It 1,. part of a f.tve-year program being carried out by YUgoslavia to install 1,751,000 kilowatts of new generating  - 2 - c.e.pacity, increasing total capacity to 4,161,000 kilowatts by 1965. The program • includes the construction of about 1,100 miles of transmission lines, together with asso'ciated transformer and switching stations. Ill addition, the capacity of inter-connections with Austrian and Italian networks is being expanded and equipment installed to permit the Yugoslav system to operate in parallel with the integrated power system of Western Europe. Construction of the Bajina Basta installation has been given high priority in the expansion program because of the importance of developing the power poten- tial of the Drina River Basin. Most of Yugoslavia's hydroelectric installations are run-of-the-river plants which must be supplemented by reservoi.r and thermal plants, since the lower water flows in late summer reduce the power production to about 60% of that produced in late winter. The Drina River Basin has an unusually • heavy rainfall and offers the possibility of creating large volumes of storage • Furthermore, the location of the plant is favor;.ble because of its proximity to consuming centers. The project consists of the construction of a hollow concrete gravity dam with a maximum height of 295 feet above the foundation and a contiguous power- house containing three 80,000-kilowatt generating units With space for a fourth u..nit. The dam will create a reservoir having a useful storage volume of 177,000 acre-feet. The new transmission facilities Will connect generating stations with new or larger consuming centers. Construction of the power station has already started and should be fin:J.shed in four years. Construction of the transmission lines will be started in 1962 and finished in 1965. The tota2 cost of the new facilities is estimated at the equivalent of $83 million. Imported equipment needed for the project will be purchased on the basis of international competition. The loan is f"or a term of 25 yes.rs and bears interest of 5-3/4"/, includi!.1g the 11, commission which is allocated to the Bank's Special Reserve. Amortiza ... tion will begin December 1, ·1966. The loan is gua.r~nteed by The Federal Peoples • Republic of Yttgoslavia.