Announcement of Loan Granted to a Public Power Company in Colombia on November 2, 1950

ZltrERNA'l'IOK\L .!,\M{ FOR . - ~ O N : ~AND DEVELOPMENr !(r. ' \ FOR THE mss () JOR']M.ml)!ATE RELFASE Press Be~ase No.. 225 1 -~:ovember 21 1950 The Internatlc~·Benlt for·Reconstruction and Development today ~de a loan of $3,530,000 to the Central111droelectrica del Rio Ant,~caya L1m1tada, a publicl)" owned electric power company ·in the Republic. of Oolam~a., for the ·constncti on of a h~oelectric plant on the Anch1caya R1ver.. · Power from this installa.tion is expected. to aid economic developme~ in the Cauo~ ·-valley, a resion of coµs~4erable a~icu1~ tural a:ric1 1 industrial. promise in the·we1;1tern part of Colombla. Tpe ;oan ~s foe a terni o~ 20 year~ and carries an interest of 3'/o plus oom• JQJfSd;~ aii the ~ate of 1% wh1~r., in accordance with the Bank's Articles of Asr,ement., is allqcated to its special reserve fund~ Amortiz~tion payments, calculated ·to re- tire the loan by maturity, will start on May 1 1 1954. The loan :is fully gUaranteed • by the Bepublic of Colombia • Thie is the second loan granted by the Bank to Colombia for.development purposes. On Ausust 1~, 1949., the Eank lent $5.,000,000 to the Caja de Credito Agrario Industrial y Minero for the purchase and 1mportat1on into Colombia. :9f. agrioultura; machinery and spare parts for the development of Colombian asr~c~ture. The present loan of $3,530,000 will be used to finance the major part of the i foreign e~llanse cos~ ot the llydroelectr1Q proJect! The loan was under e~neideration before·the recent comple~ion of the repQrt of a mission, sponsored 301~~11 by the Internatlonal :Bank and·the :Bank of ~he:Bepubl1o of Colomb:!.~, which made a general survey ot ·colombta• e econ¢1DY las:t. year., .That rep~J;'t stresses the importance of power ciev~lopment in ·oolombia ·.~d ·.the :econom:l;c·. a..evelopmen~ of. 1ihe Ca'\lca Valley. The·proJ,c;t·1s situated ·on'the Bio A.nch~caya:f~pprox1mately 30 miles from the c1t1 of Cali.· :The prot1ect ·wt:µ lx;xclu(l~ the const~ction of a _concrete dam wl11ch w1U 4". :o~te a reserr,1r 'Wttb,, a • ~ ·water :sto"88 c~itJ •of ab~t .3,000,000 cubic ' .,...,. ·a ·power·,Statio:q. 'tcFbe ::e~11tpPed··W1tb two .gen;ex-ato:rs· of 12.iooo kilowatts each,  .. - 2 ... and with two step~up transformers; .a double. cir(?uit.power transm1seion 11~~ ap- • p~tel,y 30 miles lOng, and a stepdownstat1onat the end of the trensmis81on line for reducins the transmission voltase to d1Btribution voltase levels •. The power to 'be generated by the Anchicaya hydro-plant will be tr~.tted to Cali, a city of about 133 ,ooo inhabitants and one of the four ma.Jor industrial centers of Colombia. ,., Cali and the eurroundins area have been served so far by the municipally-o,;:ned \,I hydroelectric and diesel plants which have an ass:resate capacity of 8,400 kw~ A recentJ.Y. installed diesel 1U11t raises the capacity to 10,100 kW. In additton 1 t~ere is available 4,500 kw from the hydro-stations in the near-by ctty of Palmira. The total supply of enerey, however, is below Cali•s needs. During the last ten years there has been a considerable shortage of power, both for residential and industrial •/. coneum.ii,tion, and many potential customers have-been denied connection to an already o'terloaded system. Cali s1ves great promise for industrial development as it is located in the Cauca Valley, a region with considerable agi¢ultural and industrial potential1~1es and a fast-srowins population. Furthe~ore, it ie the center of an air, rail ·and h1Ghwa.y network conneot1ns other population centers euoh as Popayan in the south, Manizales and Medellin in the north, and Buenaventura, which is the major Pacif:tc port of Colomb·1a. Industry so tai· b,~e been relatively uniml)ort~nt, the larse scale plants beins few and limited mainly to textiles and ausar ~efining, It 1s hoped, however, tha.t tbe availability of smple electric power at this (.Jae will boost greatly the industrial development of'··· the area. ,_1 The borrower, the Central Bidroelectr:tca del llio ~~chicaya Ltda (Cla.DBAL) was ,--:::::-~,.·- \_,"-, • formed 1n 1944 to develop the hydroelectric potential ·of"the Anchicaya r:tver in ., order to increase the· power supply of the city of Cali ~nd other pe.rts of the Depat't- ment of Valle del Cauca. OlttDRAL is orsanized under Colomb!~ law as a commerc1.al. o~ny of limited liability •.. All stoct is owned by the Government of Col0111b1a, ·. C. \,  - ·3 - !J the .DepartJnent of Valle del Ceuca and the Municipality of Cali~ :Relative part1c1• • pat1on of the three shareholders 'is 51~, 23~ and 26'/o of the stock reJ;pectively. ,, Con- stJruction work started late 1n 1945, but progress was slow due to· .-J.ack of capital and adequate equipment. It we;s stopped in 1948 primarily because technical d1ffi• culties developed that calle4 for ~edesisn of the pro~ect. 0lll:1'RAL will own and operate the Anch1c&1,a byclroelectric system when completed, as well as the extstins senerat1ns facilities whicbi it has P'lll'Chaeed from the Munici• pality of Cali. On the basis of an agreement between CHIDBAL and the Municipality, CHIDRAL will ee the only supplier of power to the city of Cali at rates previaqsly agreed upon and acceptable to the :Bank. The distribution system will continue to be owned and operated by the Municipality which has undertaken the obligation to expand it. The total capital cost of the Anchicaya ~'droelectrio proJect which the Bank's • loan of $3,530,000 w111 help to finance is estimated at the equivalent of about $i3,231,ooo. The ~ 1;e4;e! currency costs wtll be met by the compa?l1 out of its own resources. The company w:lll also finance ·about 26"/a of the foreign currency cost of the pro.;3ect. It 1s expected that the civil works will have been completed by mid 1953 and that the project will be 1n op,~tion at ,about the same tme,e \; After approval· bf the Bank's .Executive D!re;tctors J) the Loan and Guarantee Agree- ments w:ere s1~ed by the Colombian .Ambassador~ Dr. Eduardo Zuleta•Ansel, re!)resent- ., l'ffrl"T\n11.L 4/ th . 1ng v.lUJJ~ ~, e Colombian .Goven,nent, a~d )by. Eugene · · . R, Black, . President, on ,· ~,.../',.._/ / / I behalf of the International Bank for Reconstruction end Development. . ,,  jp • - 4- Supplemental statement on the • Anahica7a.B1ver ff.ydroelectrio ProJeet ,, Becen~ Developments in the Econom,y of Colombia - The general economic situation of Colombia is good. Industrial and agricul- tural production are increasing steadily. Receipts from the exports of coffee and oil, which accounted for 75</., and 1~ respectively of total exports in 1949, are at an all-time hish. The short-run prospects for earning from the sale of coffee a#e excellent, despite a recent temporary decrease in output. A considerable rise in prices has caused a steep increase in foreign exchange proceeds from this source. Exports of petroleum have reached a new high in 1949 due to intensi1re drilling in the oil ce?)• tare under e.xploitation. The prospects for oil exports, however, will depend on the rate of exploration for new oil wells, which in t~rn will be determined by the policy of the Govermnent towards the foreign oil c~~1es operatins.in Colombia. Furthermore, the srowing internal demand for oil produ.cts will tend to diminish oil exports f'rom Colombia. Colombia's balance of trade has been very favorable lately, !eayins a net balance of $51 million in 194:9 and of $31 million in the first four months of 1950. This development 1ff1S mainly due to a drastic reduction of imports through the im- poai tion of strict import control regulations, a.nd to a considerable increa·se in the do~estio production of consumer soods. • There is, however., in Colombia a iJrowing demand for imports which cannot be expected to be met in the long run by the proceeds of the export of one or two com• modities. Colombia will have to develop the production of commodities for export which will earn additional foreign exchange and;\ of other agricultural and indus- trial products for do:nestic con~umption which are now being imported from abroad. The potentialities for future development in·· Colcnnbia are sreat. The country is rich in the basic sources of power and in forest resources. ~ood land is limited, but there are a number of ex9ellent asric~tura.l areas and othe~s capable of improve .. ment by ir;-isation or drainase. The. growins season lasts twelve IJlOnths of the year and diversity in ~ltitudes perm.4zs a great variation of-:asr1cultural production. < ,./:-"; ) J'-t-, A t the request of the Colombian G9vernment a mis~:lo~ headed by Di-. Lauchlln · Currie and eponso:recl by the International :Bank and the l38neo de. · te. Republ1ca of Colombia visited the country f:rom July until November 1949.i The mission made a de- tailed analysis of the Colombian economic situation and out~ined a basis for a devel· t,Pment program designed to r~iee the standard of livins of the ColOJ11bian people. The report :of the mission is now under ,study by a committee of eminent Colombians repre• sent1ns the country•s two major political parties. · Includ.ine the und1sb1U'sed balance of several Eximbank: credits and after allowine for other proposed, but not yet effective bon:-owins, the total outstandins external debt of Colombia amoimts to approximately $190 million (mostly 1n u,s. currency and wlli requi~e an annual debt service of about $20 to $22 million., in the next five 0. years or 6% to 7% of expected receipts in current account. · Colombia's sold and forei&1 exchan~~ hold:l.r.lss etood ~t $111 million in Decemb.e.r 1949J. r. eeohed $128 Jllillion in February 1950., and feU back to $106 million by June 30, 1~50. .  , .. •'"5. - • Need for the Project• The Anch1caya River ey~;·,ctric p~ject ~11 supply the city ot Cali and the. s ~ n s area with electric power. 0$11 ta one of the four major industrial cen.. ters ot Colanbia and has the fastest sroying.populat1on 1n the country: •. It is loca• ted 1n the Cs.uca Valley, a ,r.eSion vtth considerable asricultij.X'al and industrial potential1t1e~, · There has been a ehortase of power 1n Cali dur1ns the ].o.$t. ten years.With the srowth of the city, the ·consumption of electricity 1ncreaaed without a correspondins increase in the senerat1Qn of power. Consequently, it bee~ impossible to meet even the res1dent1al demand. Because of the power shortage, :many of the c1ty•s industrial esta'blishmente have been forced to instaU their own 1nd1,ridual power plants. The additional capital investment required tor individual power plants when stertiDG a new industry or expandinS an existing one, the difficulty of securins trained opera... tors and the relatively hish coat of power thus produced have been deterrent factors on the Q\,owth of the cityts industries. It is hoped that the availability ot ample electric power will boost the industrial dev~lopment of Cali, whose seo~ph!Qal location and proximity to natural resources, manpcwai,, and transportation fac1I1t1es provide it with a favorable background for the expansion of its industries~ , ·· The need for an :lmn.ediate increase ofi power in Colombia hes been underlined .by the l3ank-sponsored Currie Mission. In its report the mission noted that the use of ele~trio power in Colombia has expanded at a rate considerably faster than the in• creel,e in· generatins capacity fUld pointed out that cheap and adequate ~ . . ,. power, and partic\~arly electr1cjty, 1s a fun4amental requieite fO:J:" 1nd'1etr1al development 1n • Colomb:t;fa •.. The miss1on recommended an increase d'1%'-1?l8 the next five-year period of 75% ove,r the present level of Colombia's generat1ns capacity, most of the new faciliJ1es to be hyd:l,oeleotric. Deacription of the Project• The Anchicaya River whi.oh runs throllSh the Cauca '\Talley is estimated to have a power potential of between 350,000 and 400,.000 kw. !l'he h~oeleotr:tc project of CBIDP.AL will be constructed on the Anch1caya river at a point below its confluence with the river Dasua. A concrete ~v1ty desisn dem will be built across the Anch1cqa River. .It will have a heigllt of ·180 feet, a crest length of 625 feet and a ·spillway of 487 fe~t. The ~aervoir will have a useful storage capacity of approximately 3,000 1 000 cubic yards.· · !he ~~er will be conducted from the ~se"oir via f concrete-lined power•t\Ul.. nel:: about ~,~oo feet lons, and will. be co:rmected to a pe1im.to£;k equ1pped with suit- able valves and connections to the turbines. \\::,~/ · !11;:fi power station Will be of the above-around type. It will be equipped with two FreJicis-type turbines, each of which w1U be capable of develop1ns 17,000 ::H,P. when opere,tins at 257 r.p.ms snd at a head ot 238 feet. The. two seneratora will be rated at 15,000 ltva at o.a l)OW&r factox-,senerat1ng 6,600 volts and 60 cyolee. The·power st~tion Will be of "intorced concrete With room for the installation Of ad.d1t1onal units. The~ ~ll be a e1:qsj].e transformer fo~ eeJ,Ch senerator, to Step a u.p the· voltose ~rqa ·6.6 ~ to . 'the t~sJ,ton 11;tie voltage of ll,5 kV• 15  · ts ,. ' ~.- :·, ~"'.: ~ ;~ ',/ ' .. 6 -~ ~ transm111at.0t;1, Una. will b.~ approxtinately 30 m!l~e in length end ~'ii. bd c~~2'lct~d'.ntb.. steel tciwe~ end. aluminum cable~ the cable having a_ steel_ ~ore tb 1 stve added.,etre~.: 1'here Will be a tota1··of six power cables and two srouhd wtrea, which w!U male& it possible to have two . ~ 1 3-phase c:i.rcu!ts. · In C~l:L~ :the tendnal.,·potnt-o-r 1;he main tratlSJPiesion line there w;~:t. be an o\ttdoor, s~bstat1on of coment1onal.dee1sn tq redu.ce the voltase trom.).1; ~ to 13.2 Jty: whfch'.· ts th.e· vo.ltase- a~ which power wUl be supplied to the Mut11c!paJ.1ty, t r~/ • IL,_ ' •.