Announcement of the Electric Power Loan in Colombia on February 7, 1964

.,, ·~ lN.rERNATJONAL BANK FOR • RECONSTHUCl-lON AND DEVELOPMENT 1818 H STREET, N.W .. WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 64/3 Subject: Electric po~r loan February 7, 1964 in Colombia The World Bank today· made a loan equivalent to $45 million to Empresas Publi- cas de Medellin for the expansion of electric power in Medellin, one of the largest and most industrialized cities in Colombia. The loan will assist in financing a large hydroelectric development on the I'Jare River which will have an initial capa- city of 132,000 kilowatts. When the project is finished in late 1968, Bank loans will have helped finance projects generating 383,000 kilowatts out of a total of 520,000 kilowatts in Empresas' power system • • Six private banks are participating in the loan for a total of $560,000, repre- senting the first maturity and part of the second maturity which fall due between April 15 and Octo·ber 15, 1969. The participants a.re The Chase Manhattan Bank, New York; Bank of America National Trust and Savings Association, San Francisco; The Marine Midland. Trust Company of New York; The Meadow Brook National Bank, New York; Grace National Bank of New York; and The First Permsylvania Banking and Trust (! Company, Philadelphia. Empresas Publicas de Medellin is an autonomous public agency 'Which pr-ov:i. d:?s electricity, water, sewerage and telephone services in Medellin. Empres.9,s ! po~,,~:;... system serves Medellin and a number of small adjacent communitieB and, through a distributing agency, some other towns and rural custoniers ih the Department of Antfoqula. Since 1938 the population of Empresas' service area has increased • from 239,000 to 945,000, With the growth rate averaging about 6.';!'/o since 1950 •  1 - 2 - Med~llin is the oldest industrial community in Colombia and the center of the ~ r, ·! country's textile and clothing industry. It is also an important producer o~ aluminum products, electrical appliances, construction, industrial and farm equipment, leather products and glass. Empresas has been carrying out a. continuing program to strengthen and en- large its system to meet the growing requirements of its service area. Its system now has a genera.ting capacity of 217,000 kilowatts which will be in- creased to 388,000 kilowatts by early 1966 when plants already under construc- tion are finished. Growth of electricity sales averaged about 11-1/'Z'/o annually until 1957 "When the rate dropped somewhat ma.inly because of .restrictions"im- posed on residential consumption in each of the years since then. Future sales are expe~ted to increase at an average annual rate of about 1oi. The hydroelectric development being assisted by today's loan is located on the Na.re River about 25 miles east of Medellin. The first stage of the project includes the construction of a small diversion dam on the Nare River.; an inlet • pressure tunnel 3 miles long; an inclined penstock tunnel about three-quarters of a mile long; a powerhouse cavern excavated for "four 66,000-kilow~t~ ur1its, of which only two Will,.be installed initially; and a free-flow tailrace tunnel 3 miles long. The power plant cavern will be excavated in solid rock at a depth some 2,300 feet below ground level. The project ''a.1so includes about 50 miles of double f1ircuit high-voltage transmission lines to Medellin with terminal facili- ti~s, and an expansion of Empresas' distribution system. The total cost of the project is estimated at the equivalent of $75.5 mil- lion. The Bank loan will cover the foreign exchange requirements, while the bulk of the local currency required will be provided by Empresas from its own resource~. Empresas Publicas de Medellin, with the assie;tance of its consultant, is respon- .\;, sible for the design and execution of the_j>roJect. \. \ ~ A contract for the, initial \ ......... :;.  /) • - 3 - civil works has already been placed. All main contracts arEf being awarded on the \~ basis of international competitive bidding. · The loan is for a term of 35 years an(~ bears interest at the rate of 5-1/ Z'/o per a.n:ium including the l°/o commissiop.Jwhich is allocated to the Bank's Special ijeserve. Amortization will.begin in April 1969. The loan is guaranteed by the Republic of Colombia. Including today's loan the Bank has now made 14 loans totaling $205.8 mil- lion for the developme.~t of electric power in Colombia. The loans have helped '-~ finance projects that have·added or will.add nearly one million kilowatts to the power systems serving the a.J~eas of Bogota, Cali, Medellin, Manizales, Buc~amanga I and Cartagena. · The Banl~ has lent an additional $183 million for Colombian rail- ways, roads, steel production and agriculture • • II (·, • ' '