eWorldBank
1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360
Bank News Release No. 77/23 September 23, 19 76
ARGENTINA RECEIVES $115 MILLION WORLD BANK LOAN FOR ELECTRICITY
The World Bank is providing Argentina with a loan of $115 million to help finance
an electricity transmission and distribution program in the Greater Buenos Ai res area.
In 1976 Argentina spent $450 million to import about ll% of its petroleum and 15%
of its natural gas requirements. Petroleum and natural gas accounted for 85% of national
energy consumption in 1975. At the same time only about 4% of the country's· hydroelectric
potential of 45,000 MW has been developed. Consequently the Government plans to reduce
rts petroleum and natural gas consumption and to expand the production of hydroelectricity,
nuclear energy and possibly coal. The Argent!ne Government has asked the World Bank to help
it prepare a national power expansion plan and a national power sector organization study.
The.World Bank project forms part of the 1977-1981 electricity transmission and dis-
• tribution program of SEGBA, a Government-owned.corporation which is the main distributor
of electricity in the Greater Buenos Aires Area~ the country's largest market for
electricity. The project wi 11 enable SEGBA to better mee'. the city's increasing demand
for power due mainly to accelerated national industrial grmo.Jth. This is the fourth World
Bank loan to Servicios Electricos del Gran Buenos Aires, S.A. since 1962.
The $495.3 million project will provide electricity service to 65,000 new consumers
every year and wi 1 l improve the efficiency of SEGBA's operation by the incorporation of
urgently needed communications, telecontrol, telemetering and load dispatching equipment.
In recent years, the low-·income population of the Greater Buenos Airesarea has grown
very rapidly due to immigration from rural areas and neighboring countries; as a result,
large shanty trn,vns have developed. SEGBA intends, by agreement, to sell energy in bulk
to the municipalities for distribution within each shanty town! There are also about
25,000 dwellings in new low-cost housing developments without electricity which SEGBA
intends to service within the next three years, as part of the project.
The World Bank loan is for a term of 15 years, including three years of grace,
at 8.9% interest per annum. To date World Bank loans to Argentina have totalled
$532 • 3 mi 1 l i on •
~ote: Money figures are expressed in US dollar equivalents.
FORM NO. '1121
(5-76)
T E C HN I CA L D A T A
PROJECT:
COUNTRY:
TOTAL COST:
The Fourth Buenos Aires Power (SEGBA IV)
Argentina
$495.3 million
•
BANK FI Nl~NC I NG: $11 5 mi l 1 ion, for 15 ye a rs , wi th 3 ye a rs of
grace, at 8.9% interest per annum
OTHER FINANCING: Internal cash generation and loans from foreign
and local sources. A private co-financing of up to
$50 mill ion, when it materializes, wi 11 replace funds to be obtained from local sources.
IMPLEMEN71NG ORGANIZATION: Servicios Electricos del Gran Buenos Aires, S.A.
Balcarre 184, Buenos Aires, Argentina
PROJECT DESCRIPTION: The project consists of the main elements of
SEGBA 1 s investments in transmission lines, sub-
stations and distribution facilities in the Greater Buenos Aires region for the years
1977-1981, and the preparation of a national power expansion plan and a na'tional power
sector organization study, both to be cnrried out by the Government. •
PROCUREMENT: Two-thirds of all equipment and materials wi 11 be
procured in accordance with Bank guidelines on the
basis of international competitive bidding with a margin of preference to local suppliers
of 15% or the applicable import duties, whichever is lower. The remaining one-third will
be awarded to an Argentine bidder, provided that this bid is not more than 38% above the
successful foreign bidder or he is willing to reduce his bid to such level. If the re-
maining third goes to an Argentine supplier under this arrangement, the contract with
that supplier wi 11 not be financed by the Bank. The Bank wi 11 finance 100% of the cif
cost of imported equipment; 60% of the cost of equipment procured in Argentina (the
estimated foreign exchange component) under international competitive bidding, and 100%
of the cost of consultant services.
CONSULTANTS: 60 man-months of consultant services will be used
fo r the p ro j e ct •
INTERNAL RATE OF RETURN:
ESTIMATED COMPLETION DATE:
21%
1981
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