1
                                                                        f


    INTERNATIONAL BANK FOR
•   RECONSTRUCTION AND DEVELOPMENT
    1818 H STREET, N.W., WASHINGTON    D. C. 20433   TELEPHONE: EXECUTIVE 3-6360




           Bank Press Release No. 71/16              Subject:   $70.0 million World Bank
           April 5, 1971                                        loan for South Brazil
                                                                power development


                The construction of a 700 megawatt hydtoelectric plant and associated

           transmission facilities at Salto Osorio on.the Iguacu River, to meet

           expected growth of power demand in South Brazil, will be assisted by a
           World Bank loan of $70.0 million, it was announced today.

                The project, with an estimated cost of $152.3 million, is the major
           element in the 1971-76 construction program of the Centrais Eletricas do
           Sul do Brasil S.A. (Eletrosul) •


•                Power demand in South Brazil is increasing at a rate of more than

           10% a year.     The regio~'contains one-fifth of Brazil's population and

           accounts for about one-fifth of its GNP, 41% of agricultura;,production,

           and 9% of industrial production.

                The project will be located at a natural falls known as Salto Osorio
            in the State of Parana, and includes about 970 miles of 230 kilovolt

            transmission lines as well as engineering, training and managerial services.

            It resulted from a study of electric power in South Brazil which was com-

           pleted in 1969 under a United Nations Development Programme grant for
           which the World Bank was executing agency.

                 The project's main features include a rockfill dam 2,460 feet long
            and 183 feet high, two concrete spillway structures, a concrete gravity




•
            dam and a powerhouse for six 175 100gawatt gen:erators, of whi·ch four will be

            installed under the project.

                                                                                   /mre
                               /I
                               (J




                                                                                          •
Bank P.R. No. 71/16 - Brazil - power
                                      - 2


     The World Bank loan will finance the cost of electrical and
mechanical equipment to ,be purchased under intemational competitive

bidding in which Brazilian suppliers will participate, an.d the foreign

exchange costs of various services.        Civil works at the Salto Osorio

project are already under construction.       The first 175 megawatt unit

is expected to start operating in the first half of 1975 and the fourth

and last in early 1976.

     Illetrosul, which will be responsible for the execution of the
                                                           :'.



project, is an autonomous company established in 1968.                 It is a sub-

sidiary of Centrais Eletricas Brasileiras S.A., the Government-owned
company in charge of development of federally sponsored power projects.

Eletrosul serves the State of Parana, Santa Catarina and Rio Grande do

Sul and sells electricity in bulk to distributing companies.
                                      (i

     The loan to Eletrosul is for a term of 25 years, including
                                                                              (\
                                                                               a   six-
                                                                                          •
year grace period, with interest at 7~%.        It is the World Bank's twenty-
                                                                 './



second for electric power development in Brazil, and the first to Eletrosul.

It will raise total Bank lending for the sector to $692 million.




                                      - 0 -




                                                                                          •