Announcement of Seventeen Million Five Hundred Thousand US Dollars Loan for Electric Power in Peru on September 8, 1967

• 1818 H STREET. N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 67/43 Subject: $17.5 million loan for electric September 8, 1967 power in Peru The World Bank has approved a loan equivalent to $17.5 million to Empresa$ Electricas Asociadas (Lima Light and Power Company) in Peru. The loan will assist in financing the 120,000-kilowatt Matucana hydroelectric plant and associated transmission and distribution facilities. Empresas Electricas' service area centers on Lima; it contains about a quarter of the total population and is the main indus- trial, commercial and administrative region of Peru. The new plant will increase the generating capacity of Empresas' system to a total of 605,000 kilowatts which should be sufficier,t to su,!ply power requirements of the area until 1973 .. • Ten commercial banks have agreed to participate in the loan for a total amount of $450,000 representing the first two maturities which fall due on November 15, 1972 and May 15, 1973. The participants will be: Bank of America National Trust and Savings Association, San Francisco; The First National Bank of Chicago; Crocker- Citizens National Bank, San Francisco; Detroit Bank and Trust Company; J. Henry Schroder Banking Corporation, New York; City National Bank of Detroit; The Citizens & Southern National Bank, Atlanta; The First National Bank of Memphis,; The First Pennsylvania Banking and Trust Company, Philadelphia; and Banco de Credito del Peru, Lima. Electric generating capacity in Peru now totals 1,470,000 kilowatts, of which approximately half is accounted for by private pla~ts in industq and mining, nearly 600,000 kilowatts by private companies serving the public, and the remainder by government-owned autonomous corporations or small plants supplytng rural areas. • Empresas Electricas, together with its associate, Energia Hidroelectrica Andina, S.A., is the largest of the private companies serving the public, accounting for BS7. of the power supplied from this source.  - 2 - Power demand in Empresas' se-l'rice area has been growing at an average annual • rate of 101 over the past 20 years and is expected to continue to grow at this rate during the next several years. This will be the fourth Bank loan for the expansion of Empresas• electric power system; earlier loans totaling $49 million assisted in financing the 240,000-kilowatt Huinco hydroelectric power plant and extensions to the company's transmission and distribution systems·. The Matucana plant is needed to meet the company's power requirements until power is available from a large power project the Government is building on the Mantaro River in the Andes. The Matucana power plant will be located on the Rimac River, about 50 miles from Lima. In addition to the 120,000-kilowatt power plant, the project includes the construction of a 220-kilovolt double-circuit steel tower transmission line from the power station to Lima and associated substations, and meters, communica- • tions equipment, cables and other items for the expansion of the distribution system. The project is scheduled for completion by the end of 1971 at a total esti- mated cost equivalent to $50.S million. The Bank loan of $17.5 million will finance the foreign exchange costs of goods and services procured through international com- petitive bidding, and interest during construction. The remaining finance will be provided by Empresas :J~lectricas through funds obtained from its operations and the sale of its securities, mainly in Peru and Switzerland,! The Bank loan will be for a term of 25 years and bear interest at the rate of 62. per annum. Amortization will begin November 15, 1972. The loan will be guaranteed by the Republic of Peru. •