Announcement of China to Increase Electricity Output in Special Economic Zones on September 2, 1992

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. * Telephone: (202) 477-1234 IBRD News Release No. 93112EAP Contact: Erin Burns (202)459-2210 External Affairs - EAPVP CHINA TO INCREASE ELECTRICITY OUTPUT IN SPECIAL ECONOMIC ZONES World Bank Loan Will Support Completion of Shuikou Hydroelectric Scheme Washington, D.C., September 2, 1992 --- Fujian Province will increase its electricity supply to meet rapid demand with the completion of the Shuikou Hydroelectric Scheme, located on the Min River 84 km from the provincial capital of Fuzhou. A $100 million World Bank loan approved yesterday will support the second and final phase of the project. A 101 meter high dam will generate 1400 Megawatts of electricity. This will enable the province to meet a near-term growth in electricity demand estimated at 15 percent a year. which is being driven by dynamic economic performance in Fujian Province, home to a number of the special economic zones in China open to foreign investment. According to Shahid J. Burki, Director of the China Country Department, "The loan will help Fujian Province sustain its impressive economic growth rate and will contribute to an improvement in living standards for.the general population.w On an annual basis, the project will also avoid the burning of 1.6 million tons of coal and the corresponding atmospheric pollution. The project's first phase was supported by a World Bank loan of $140 million, approved in January of 1987. It included the construction of 70 percent of the dam, river bed work, the provision of seven 200 Megawatt generating sets, and it introduced modern planning and procurement methods for these. A 93.5 square kilometer dam reservoir will require the resettlement of around 67,000 people. The first phase of the project initiated the resettlement program. The Second Shuikou Hydroelectric Project includes completion of dam construction and installation of the generating sets; the construction of a shiplift to increase navigation facilities; the implementation of an action plan for tariff reform; continued environmental management; and the completion of the resettlement program. An Independent Evaluation of Resettlement (IER) will take place from 1992 through 1996. The project also includes technical assistance and training and a study to explore options for hydro-based seasonal energy in the Province. The cost of the final phase of construction is approximately $321 million. The State Energy Investment Corporation is providing $221 million in financing. The total cost of Shuikou Hydroelectric Scheme is approximately $800 million. The loan is repayable over twenty years, with five years of grace, at the Bank's standard variable interest rate, currently 7.63 percent. NOTE: Money figures are expressed in U.S. dollar equivalent.