INTERNATIONAL BANK FOR
•   RECONSTRUCTION AND DEVELOPMENT
    1818 H STREET. N.W.·, WASHINGTON      o. c.   20433. '!'ELEPHONE: EXE<iUTIVE 3-6380


      Bank Press Release No. 72/47 .                      ~bJ~c~: . $24~0 million loan to Nicaragua
      June 29, 1972 ·                                               fqr .power project
           The World Bank has approved a $24.0 million ·equival~t ·1~an to Ernpresa Nacional
      de Luz y Fuerza (ENALUF) of Nicaragua to finance jointly with the Central A11M:9rican
      Bank for Economic Integration (CABEI) a power project which will be the first step in
      a coordinated development program of ~ne Nicaragu~ and Honduran power sectors based
      on interconnection and -- in the longer run -- in the integrated power development or
      the whole Central American region.

           This will be the eighth loan to ENALUF. The· Bank, since ·~95.3, bas assisted in
      financing practical~ all or PNALUF's expansion in generation and .transmission through
      seven loans, totaling $42.3 million..              · ·

           An adequate and reliable supply of ~er has piayed a key ·rc:,1e·· i:n the .industrial
      growth or the 196os in Nicaragua •. '!he annual increase in power gener~tion averaged an
      impressive 23% from 1958 to 1966 and r~ained at a substantial 14% from 1966 to 1971.
      Per capit$ generation., 245.;,kilowatt hours in 1970., is second only to Costa Rica (500-
      kilowatt hours) among the Central American ·countri~s.
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•          Power demand in Nicaragua is projected· to increase by 13% in 1972-76 and 10% in
      1977-85 as a result or growii,g industrial requirements ·and village electrification.
      Prelimina:ry explorations of geothermal resources have, given favorable results. These
      resources: . however, are insufficient to meet the expected demand. Identification or
      major hydro resources is ··in.its early stages, and for the ·next. decade ENALUF 1 s require-
      ments will have to be met· mainly by thermal plants, unless power is .imported f'rom
      neighboring countries.                                 ··
                                      .                                                   .
           The project will help to meet the rapidly growing demand for energy and to build
      the Nicaraguan portion. or the interconnectioq between the power·· systems of Nicaragua
      and Honduras. ,           ··

           The. project includes. a 100.,000-kilowatt steam-el~ctric station at Puerto Somoza;
      a 110-mile, 230-kilovolt transmis1;1ion system to connect the Puerto Somoza station to
      ENALUF•s syst~m and to the system or Empresa·Nacional de Energia Electrica of ~onduras;
      a 138-kilovolt ·r1ng around Managua, the capital ·or Nic.aragua; •· 55.:.m11e, 138..;ldlovo~t
      line to . extend ENALUF' s service area ·in the· n9rthern. part ·of the ·country.; 'alld. manage-
      ment consultants' services to as.sist ENAIDF i.n impfoving it~ organization an.d
      administration.            .           ·            ·   . ..    . ·. ·: ·.·   ·       .)

           The est:l.inated total financing r$q~irement·. for the proje~t .is $4).9 million equiv-
     alent, including $30.9 lll;illion in .foreign currency •..In addition to. the Bank's $24.0
     million loan·, CABEI will lend ENALUF .$6 .l million·. The· rest. will come from ·ENALUF •s
     own resources .and a $700,000 loan CABEI made ~·arli~r in ~he.year~ _'!he German Govem-·
     m.ent is qona±dering ~. cont.ribution to 'ijle .#rianqing or ;the· proj..:rct by: providing a loan
     to CABE!.         .        . ··    . . .. . · ·  ··    .. ' · · · ~  ·     .      · ·

•          The Bank loari, vith··the gua~ant·ee .or ·the Gqv~mment. of the ~public or Nicaragua,
     ,is for a peri~- or 24 years;,. 1nciu~ng a four -and orie-half year. grace period, at an
     annual interest rate of 7-;%.                 ·                        ·                    ·
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                                                                 June 29, 1972


                                    TECHNICAL DATA


     PBOJEcr:         Power

     COUNTRY:         Nicaragua

     TOTAL COST:      $43.9 million

     BANK FINAHCii-lG: $24.0 million, 24 years,,   ~   years of grace,   M   interest
           per annum.

     OTHER FINANCING: Internal cash generation and loans from the Central American
           Bank for Economic Integration (CABEI).




                                                                                        •
     IMPLEMENTING ORGANIZATION: F.mpresa Nacional de Luz y Fuerza (ENALUF)!,
           Apartaclo 55, Managua, Nicaragua. cable Address: ENALUF.

     PROJECT DESCRIPTION: Construction and installation of the.\ Nicaraguan
           portion of the interconnection line between the powe~sys~em of
           ENALUF and the system of Empresa Nacional de Energia E~c~rica
           (ENEE) of Honduras; a new 100-megawatt stea--electric st&tion at
           Puerto Somoza, on the Pacific Coast, and associated 230-kilovolt
           transmission lines; exte1!18iODS to EN.ALUF's 138-kilovolt transmission          I)

           system; and consultant studies for management improvement.

     PBOCUREMElfr: Goods financed by ·the Bank and CABEI will be procured through
          ·international competitive bidding. Manufacturers wf thin the Central
           American Comm~ Market will ~eceive a preference of 15% of the c.i.f.
           price or SO% of the customs duties, whichever is lower.

     CONSULTANTS: Kuljian Engineers/C~tr'actors of the U.S.A.; Electroconsult
           of Italy.

     ESTIMATED COMPLETION DATE:   1976.


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