Announcement of Fifty-Five Million US Dollars Power Loan in Argentina on January 24, 1968

R 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 68/6 Subject: ,.$55 million power loan January 24, 1968 in Argentina A ,World Bank loan equivalent to $55 million, announced today, will he~p· Argentina car_ry out" a $300 million program t:o expand and improve the electri- ) city supply in greater Buenos Aires. About 8 million people -- one third of the population of:'JArgentina -- live in thisco area, center of the nation's govern- ment, industry, commerce and transport. The loan will be made to Servicios Electricos del Gran Bue,µos Aires, S.A. ,':,'·\., jcl\i 1 ,1 :i (SEGBA), one of South Amei?:ica' s largest utilities. Thirteen fi;~ancial insti- tutions (j have agreed to participate iu the loan for a total amount ol $1,675,000. In 1962, SEGBA received a World Bank roan of $95 million which helped it c0mplete _.\\,, constructfon of a ,,600-megawatt plant and expand its transmission and ("~.) s;_~, ., d'istriliution systems. That project relieved the acute power shortage in Buenos Aires. The present program aims to provide better service,,, gain new .customers and gradually connect industries now ope!'ating their own power plants. The <::,\ program, being carried out over the four years 1967-70,,>involves the installa- tion of 370 megawatts of additional generati11g capacity, extension of the trans- mission system, and the strengthening and extension of the distribution system. r; The new Bank loan will assist in financing SEGBA's expenditures on the program during the period October 1967-March 1,69, It is the policy of the Gove~e_rit to improve the pattern of public inve~:t- I ment and promote changes in the economic ·structure in order to facili.tate rapil,',d and sustained growth of the economy. The program being financed has been given high priority within the Government's pr;oposed overall investment effort. /more  I. - 2 - ,About $200 million of· tot~l exp~nditure on the program will be fo:r dis· \\ tribution. Although service has .improved,since 1962~ there are still large_ ··areas that need extensiv~ reh~_!]ilitation. Many sectfons of the distribution 0 networks are overloaded, resulting in low voltage at. peak demand time and occasional power failures·~ The World Bank loan will be used mainly for transmission and distribu- tion ·equipment to be purchased on the basis of international competitive bidding, in which Argentina suppliers will participate. Orders for generating equipment, also based on co~petitive biddinS,, have already been awarded, and , the cost is being financed largely from supplying countries. The loan, to be guaranteed by the Argentine Government,· will be for 20 years and bear interest of 6-1/4%. The 13 financial institutions which have agreed to participate in the loan will take up all ~f the first maturity and ~ part of the second maturity which fall due between April and October 1971. Th9 participants will be: Chemical Bank New York Trust Company, New York Bank ,of America, New York The American Express Company, Inc., New York Q National Bank of North America, New York Crocker-Citizens National Bank, San Francisco United California Bank, Los Angelef:l · () Provident National . Bank~ Philadelphia The First National Bank nf Chicago First National Bank of Minneapolis,, Minnesota The First fennsylvania Banking and Trust Company, Philadelphia Marine Midland Grace Trust Company of New York J. Henry Schroder Banking Corporatinn, New York Algemene Ban~ Nederland N.v., Amsterdam 0 - 0 - •