Nicaragua - Seventh Power Project

RESTRICTED l'ILE CWI IReport No. P-593 This report was prepcired for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE EMPRESA NACIONAL DE LUZ Y FUERZA IN NICARAGUA FOR THE SEVENTH POWER PROJECT May 3, 1968  INTERNATIONAL BANK FOR RECONSTUJCTION AND DE-VELOPMENT REPORT AND RECOMMENDATION OF TH3 PRiESIDENT TO TIE EXECUTlVE DIRECTORS ON A PROPOSEI) LOAN TO EMPRESA NACIONAL DE LUZ Y FUERZA TO BE GUARANTEED BY THE REPUBLIC OF NICARAGUA, FOR THE SEVENTH PWER LOAN 1e I submit the foJ.owing report and reccznmendation on a proposed loan in an amount in various currencies equivalent to $15,25 million to Empresa Nacional de Luz y Fuerza (ENALUF), to be guaranteed by the Republic of Nicaragua, for a power project (Seventh Power Project). PART I HISTORICAL 20 The Bank has been associated with ENALUF since 1955; during the last 13 years the Bank has made four loans to ENALUF, totalling $26.2 million, to finance its development program. The proposed project was submitted to the Bark in mid-1967; it was appraised in September 1.967; and negotiations took place in .ashington on March 11 through 21.) 1968. The Borrower was represented by its Chairman. Dr. Luis Manuel Debayle; its General Managerp, Ing, Octav.io Salinas; and by Dr. Gustavo Roman, a finance officer. Dr. Gustavo Escoto, the Embassy's Minister Counselor for Economic Affairs; represented the Government. 3, Since 1951, the Bank has made 14 loans and one IDA credit to Nicaragua for a totatl original amount of $50.1 million, The proposed l.oan would increase the total amount of Bank lending and IDA credits to $65(4 million. Following is a summary statement of Bank loans and IDA credits to Nicaragua as of March 31, 19682 including the $4 million loan for Education signed on April 10, 1968 which is not yet effective. (US$ M4illion) Undis- Year Loan Borrower Purpose Bank IDA bursed 1951-1963 12 loans and 1 credit 35.6 3 - 1966 470 ENALUF Power 5,0 - 0