RETURN TO- REPORTS DESK R E s T R I C T E D WITHIN R e pis r t N o. TO. 239b ONE WEEK This report was prepared for use within the Bank. In making it available to others, the Bank assumes no responsibility to them for the accuracy or completeness of the information contained herein. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT APPRAISAL OF YUMBO III THERMAL AND CALIMA I HYDRO PROJECTS COLOMBIA April 25, 1960 FILE COPY Depa rtment of Technical Operations CURRENCY EQUIVALENTS U.S. $ 1 - 7.0 Pesos 1 Peso - U.S. $ 0.143 1 million Pesos - US. $ 143,000 TABLE CF CONTENTS Page 1No. SUMARY 9AND CONCLUSIOTS i-i I. IMTRODUCTION 1 II. THE BOPROWERS 1 CVlC 1 Chidral 2 III. YEESEtI POW1ER IlQSTALLATIONS 3 IV. POWER MARKET 3 V. POWER E ,-PAiSION PROGRAM 5 VI. THE PROJECT 6 (a) Yumbo Thermal Plant 6 (b) Calima I Hydro Plant 7 Engineering and Planning 8 Construction 8 Status of Work and Schedule of Construction 8 (c) Transmission System 8 (d) Distribution Systems 9 Cost Estimates 10 VII. ECONOI,UC ASPECTS 11 Rates 11 Audits 12 Present Financial Position 12 Past Financing 13 Past Earnings Record 13 Proposed Financing 13 Estimated Future Earnings 14 Strengthening of Chidral's Financial Position 15 LIST CF ANNEXES 1. Corporacion Autonoma Regional Del Cauca. Financial Structure and Condition 2. Chidral. Percentage Distribution of Power Consumers 3. Chidral. Load Growth 4. Chidral. Installed Capacity in Power Stations and Maxdmum demand on System 5. Chidral. Calima Project Engineering Details 6. Chidral. Calima Project Construction Schedule 7. Chidral. Estimate of Costs 8. Chidral. Actual and Forecast Balance Sheets 1955- 1969 9. Chidral. Actual and Forecast Income Statements 1955-1969 10. Chidral. Forecast Sources and Applications of Funds 1960-1969 11. Chidral. Comparison of Financial Results at Rates of 6.1 and 7.9 centavos 2 Maps APPRAISAL OF YUMBO III THER1AL AN;D CALIMA I HYDRO POIE PROJECTS COLOMJBIA SUTVK51ARY AND CONCLUSIOPS Corporacion Autonoma Regional del Cauca (WCV) and Central Hidro- electrica del Rio Anchicaya (Chidral) have asked the Bank to consider a loan to finance the foreign exchange cost of a 33 MW extension to the existing Yumbo thermal plant, the construction of the Calima I hydro plant with an initial capacity of 60 MW and associated transmission and distri- bution systems. The total costs of these works are estimated at $37 million equivalent, of which $25 million would be required in foreign exchange. ii. CVC is an autonomous regional organization responsible for the economic devrelopment of the Cauca Valley. It owns a majority of the shares of Chidral, the main power company serving the region. iii. The Bank has made three previous loans to Chidral. The first of '§3.53 million equivalent was made in 1950, the second of 64.5 million equivalent in 1955 and the third of $2.8 million equivalent in 1958. The total generating capacity of the projects financed by these loans amounts to 69 Mu. iv. The management and organization of CVC and Chidral are satisfactory. The power system operated at present by Chidral has a total capacity of 102 HW. The system peak load has in recent years increased at an annual rate of 16%. As a result of the planned expansion of Chidral's transmission system and substantial new industrial loads sales are expected to continue to increase at this rate over the next four years. v. The project proposed for Bank financing is required in order to meet the estimated increase in power demand. It is technically sound and satisfactory arrangements have been made for its execution. The estimated costs are reasonable. vi. Past financial results of Chidral, as a result of devaluation of the peso and rising local costs, have been unsatisfactory. An increase in the rate for the sale of energy of atout 65% has just come into effect, but even after this increase the rate is still relatively low, and an improvement in the financial results to be expected over the next 10 years, and particularly over the years 1960-1964, is desirable. vii. CVC and Chidral have assured the Bank that they will use their best efforts to secure at the earliest practicable date an increase in revenues which would enable Chidral to strengthen its financial position. viii. The funds required by Chidral, in addition to the proposed Bank loan, for the execution of the project would be obtained through equity contribution by CVC and funds generated by operations. The project is found suitable for a Bank loan of 4P25 million equivalent, to be made to CVC and ii Chidral as joint borrowers. The varying construction periods of the dif- ferent parts of the project would make it appropriate for the part of the loan for Calima to have a term of 25 years with a period of grace of about 5 years, and for the balance a term of 20 years with a period of grace of about 3 years. APPRATSAL OF YUNBO III THEPEAL AI\D CALMMA I HYDRO POWER PROJECTS COL0MBIA I. INTRODUCTION 1. The Bank has made three loans to Central Hidroelectrica del Rio Anchicaya (Chidral), the utility company established to generate and supply power to the area of the Departamento del Valle del Cauca and its capital city Cali, located in the western part of Colombia. The first loan ofx $3.53 million equivalent was made in 1950 to finance the foreign exchange cost of the Anchicaya hydroelectric plant, which with an initial capacity of 24 MW came into operation in 1955. 2. The second loan of $4.5 million equivalent was made in 1955 to finance the foreign exchange cost of a 20 MW extension to the Anchicaya plant and the Yuumbo thermal plant with an initial capacity of 12.5 M4. These additional generating units were all in operation by the middle of 1958. 3. The third loan of $2.8 million equivalent was made in 1958 to finance the foreign exchange cost of the installation of an additional 12.5 MW generating unit in the Yumbo thermal plant. This unit was placed in operation in February 1960. 4. In 1958, Corporacion Autonoma Regional del Cauca (CVC) took over the majority shareholding in Chidral previously held by an agency of the Colombian Government. CVC is an autonomous organization established in 1954 and is responsible for the overall development of the resources of the Cauca Valley. 5. CVC and Chidral have now asked that the Bank consider a new loan to finance the foreign exchange cost of a further expansion of the power system operated by Chidral. The project would include the installation of a 33 MW generating unit in the Yumbo thermal plant, the construction of a hydro plant at Calima with an initial capacity of 60 MW and a substantial expansion of the transmission network. The total costs of these works are estimated at 637 million equivalent of which $25 million would be required ln foreign exchange. The proposed loan would be made to CVC and Chidral as joint borrowers. 6. This appraisal is based on information contained in reports prepared by the consultants retained by CVC and Chidral and reviewed in the field by members of the Bank staff who visited Cali in NWovember 1959. II. THE BORROWERS Corporacion Autonoma Regional del Cauca (CVC) 7. CVC is an autonomous regional organization created by a law enacted in 1954. Its purpose is the development of the natural resources within the - 2 - area of operations which roughly corresponds to the areas of the Departamento del Valle and the Departamento del Cauca. In particular CVC's field of activities include generation and distribution of electric power, flood regulation, irrigation, land reclamation, agricultural development, mining development and transportation. CVC may construct and operate development projects directly or participate in the financing of projects carried out by public or private undertakings. Since CVC will execute a considerable part of the engineering, construction and supervision of the project, and will be in large measure resporsible for providing Chidral with funds for construction, it was considered appropriate that CVC should be a joint borrower with Chidral. 8. The policies of CVC are established by a Board of Directors consisting of seven members. Three of these are ex officio members, the Minister of Economic Development and the two Governors of the Departamento del Valle and the Departamento del CGuca. The four other members are prominent persons resident in the area; two of them are nominated by the President of the Republic and the other two by various business, landowner and engineer organizations. CVC is managed by an Executive Director appointed by the Board. The present Executive Director has held the position since 1955. 9. CVC has retained the services of a consulting engineering organ- ization set up by the two U.S. firms Tippets, Abbett, McCarthy and Stratton (TAMS) and Gibbs and Hill, both of lNew York, and the Colombian firm Olarte, Ospina, Arias and Payan, Ltda (CLAP). The consultants' staff together with CVC's own staff form an experienced and well qualified planning and engineering organization. 10. The initial operations of CVC were financed by capital contri- butions made by the Colombian Government and the Departamento del Valle. Subsequent to an earlier decree, a law was enacted in May 1959 authorizing a real estate tax in the Departamento del Valle. The proceeds of this tax are passed on to CVC and for 1960 the total amount is estimated at about Ps 14 million. Additional revenues of about Ps 1.2 million annually are obtained by CVC from the proceeds of a tax on alcoholic beverages. More detailed information on CVC, its present financial position, sources of funds and future commitments is given in Annex 1. Central Hidroelectrica del Rio Anchicava (Chidral) 11. Chidral was incorporated in its present form in 1950. Its Board of Directors consists of five members appointed by the shareholders for one year. Three of the Directors represent CVC which holds about 60% of the share-capital. The remaining two represent the Departamento del VJlle and the municipality of Cali each holding about 20% of the share-capital. 12. The operation of Chidral is directed by the General Manager, who is appointed by the Board. He is an experienced well qualified executive. The present staff of Chidral is able and efficient. As agreed by Chidral in 1958, when the previous Bank loan was made, the organization has been strengthened insuring an efficient operation of the expanded power system now planned. III. PRESENT POWVER I1'STALIATIONS 13. At the end of 1959, the total generating capacity operated by Chidral amounted to 89.5 MW, consisting of the Anchicaya hydro plant (64 ni), the Yumbo thermal plant (12.5 NW), a small 2 MW hydro plant and 11 MW of diesel capacity. The total installed capacity was increased to 102 MS in the beginning of 1960 when the second 12.5 MW unit of the Yumbo thermal plant came into operation. 14. The Anchicaya plant has only a small regulating reservoir and its capacity is being reduced gradually by silting. Works are being carried out upstream to slow down the accumulation of silt and studies are being made of the feasibility of dredging. In these studies it is taken into account that with the increased capacity of the Yumbo plant and later with the large regulating reservoir of the Calima plant only a small pondage would be required to permit the operation of the full capacity of the Anchicaya plant during the daily period of peak demand on the system. 15. The energy generated by Chidral is supplied over two main sub- stations in Cali to the distribution network operated by Empresas Municipales, an agency owned by the municipality of Cali. The distribution network is at present being expanded to a capacity of 100 NW. 16. A 33 kv transmission line connects the Cali system with the power system in the towns of Palmira and Buga, west and north of Cali, operated by Compania Colombiana de Electricidad (CCE), a subsidiary of American and Foreign Power. CCE operates the 7.5 MW Nima hydro plant, the 1.2 MW Guadalajara hydro plant and the 6 MW Buga diesel plant. A short section of the existing 33 kv interconnecting line is now being rerouted and will be connected to the Chidral substation at Yumbo, permitting direct supply from Chidral to CCE. 17. A number of other towns in the Cauca Valley are at present served ty small hydro and diesel plants, mostly operated by municipal entities. The distribution networks are in a poor condition. In connection with the planned expansion of Chidral's transmission network, CVC has prepared plans for the rehabilitation and extension of the distribution systems in these towns. To operate these systems, individual distributing companies would be organized. It is planned that the capital required would be provided by CVC, which would hold a 60% interest in each of the companies, and by the Departamento del Valle and the respective municipality, each holding a 20% interest. The technical services and supervision of these companies would be given by the staff of CVC. IV. PO1WER MARKET 18. Chidral's present power market is limited to the city of Cali which in 1959 had a population of 468,000. The city is the industrial and commercial - 4 - center of the Cauca Valley. Before the Anchicaya plant came into operation in July 1955, the use of power was restricted by rationing, and the peak load and sales of the system were determined entirely by the limited generating capacity available. During the last part of 1955 the peak Load rose rapidly from 12.5 14W to 32 MW. By the end of 1959, the peak load amounted to 58 MW corresponding to an average annual rate of increase of 16%. over the four year period. Total energy production showed a similar increase from 170 million kwh in 1956 to 258 million kwh in 1959. 19. The records of Empresas Municipales show that industrial and commercial consumers account for about 60% of total power sales. Details of power sales by major categories of consumers are shown in Annex 2. 20. The growth of industrial activity in the Cali area has been substantial in recent years and covers at present the production of a wide range of products including cement, chemicals, drugs, canned food, textiles, beverages, tires, plywood, electric wires, bicycles and fabricated steel products. 21. With the planned expansion of Chidral's transmission system, the power market to be served will be extended to cover an area of some 4,500 square kilometers of the Cauca Valley with a total population of some 1.3 million. The rich soils and favorable climatic conditions make this area one of the most fertile regions in the wor'ld. This is impressively shown by the production results obtained by the landowners in the valley who already have adopted modern agricultural methods. As a result of the reclamation and flood prevention works being carried out by CVC and which later are to be supplemented by irrigation schemes, additional areas will be brought under cultivation. Main industrial crops include sugar cane and cotton and several large sugar mills and a cotton gin are already in operation. 22. The Palmira-Buga system operated by CCE had in 1959 a peak load of 13 MW. The power demand has in recent years increased at the average annual rate of 17%.. The company has at present no plans for adding generating capacity and has informed Chidral that it intends to purchase power not only to meet the increase in demand but also to avoid the operation of the high cost diesel station. 23. The consultants retained by CVC have carried out a detailed stuLdy of the future power demand in the Cauca Valley. As a result of this study the peak demand is estimated to increase at an average annual rate of 17% over the next five years in the integrated system. This high rate is reasonable taking into consideration the increase in industrial load by new plants in construction, the gradual extension of Chidral's transmission system and the normal increase in commercial and residential consumption. New industrial loads include a paper mill being constructed by C-race Company and the expansion of the existing cement mill. In addition, other foreign firms including Continental Can, Swift, C,.nadian Wire and Cable, Inter- national General Electric and Gillette are implementing or considering the construction of manufacturing plants in the Cali area. - 5 - 24. Details of the expected load increase in the overall system are given in Annex 3. In 1964 the peak load is expected to reach 162 NW and total energy requirements 780 million kwh based on a load factor of 55%. 25. For the years after 1964 CVC estimates that the peak demand will continue to increase at the same high rate. As it is considered unlikely that such a rapid load increase can be sustained for an exten- ded period, these estimates have been revised using a more conservative rate of 10% annually. It should be noted that no special allowances have been made in the estimates of future load for supply of power for irrigation pumping. 26. Based on these estimates of the total demand for power in the system, after deducting losses and generation by the plants owned by CCE, Chidral's sales are estimated to increase from 313 million kwh in 1960 to 688 million kwh in 1964 and 1.1 billion kwh in 1969. V. PGdFR EXPANSION PROGRAM 27. The power expansion program prepared by CVC's consultants envisaged the construction of the following plants over the period 1960-67: Yumbo thermal plant extension 33 iM4 Calima I hydro plant (4 units) 120 HW Timba hydro plant 60 SW Calima II hydro plant 80 NbW 28. In this program all four units of the Calima I hydro plant were scheduled to be in operation by the end of 1964. As a result of the lower rate of increase in power demand assumed in this report, it would be reasonable to schedule the last two generating units to come into operation in 1966 and 1967, thus reducing construction costs during the early years of the program. The construction of the Timba and Calima II hydro electric plants could also be postponed and the plants coulld be sche- duled to come into operation in 1920 and 197? respectively. 29. As shown in Annex 4, this revised program will provide suffi- cient generating capacity to meet the expected increase in peak load on the system. Reserve capacity will only be available during limited periods after the new generating capacity comes into operation; the pro- gram represents therefore the minimum requirements of additional capacity. The limited amount of reserve capacity can be accepted because of the high reliability of the Calima plant with its large regulating reservoir. In addition the 115 kv transmission line to be constructed would connect - 6 - the Chidral system with the power system operated by the power company (CHEC) in the Departamento de Caldas. An interchange of power between the two systems would therefore be possible. 30. The total program includes also an expansion of Chidral's transmission system including the construction of some 600 kilometers of 115 kv and 33 Xv transmission lines and associated substations. 31. Total expenditures on the revised program during the period 1960-69 are estimated at $65 million equivalent of which ,$45 million would be incurred in foreign exchange. It should be noted that additional investments of about 'f2 million equivalent in distribution networks would be made by CVC and distribution companies. Furthermore, Timba is a multi- purpose project and the cost of flood control, irrigation and reclamation works in connection with this project is estimated at about $30 million equivalent. The project proposed for Bank financing which consists of the earlier part of the revised program, to be carried out during the period 1960-64, is estimated to cost about 037 million equivalent of which $25 million would be incurred in foreign exchange. VI. THE FROJECT 32. The project consists of the following main works: (a) Extension of the Yumbo thermal plant by installation of a 33 IVW unit. (b) Construction of the 120 IMW Calima I hydro plant with an initial installation of two units with a capacity of 30 MI each. (c) Construction of transmission lines and substations. (d) Expansion of distribution networks in Cali, and 9 smaller other towns and 16 villages. (a) Yumbo Thermal Plant 33. The existing plant is located 10 kilometers north of Cali. It is equipped with two 12.5 I/t generating units, one of which came into operation in 1958 and the other early in 1960. 34. The extension now planned includes the installation of a boiler of the semi outdoor type, desigLed to burn pulverized coal, and a 33 PDW turbo generating unit. The turbine is designed to operate at 900 lbs./sq.in. Pressure and 8500 F superheat temperature. The necessary extension would be made to the existing powerhouse and additions would be made to coal handling plant, cooling water system and other auxiliary installations. A 3-phase transformer and associated switchgear would be installed in the outdoor sub- station to step up the generating voltage to 115 kv. -7- 35. The Belgian consulting engineering firm SYNDIBEL, which also designed the earlier stages of the plant, was retained by Chidral to prepare the detailed plans and specifications for the extension. Orders for major pieces of equipment have been placed after bids had been obtained on an international tasis. 36. Based on a study, also prepared by SYLDIBEL,on the availability of coal in the Cauca Valley, sufficient coal of satisfactory quality is available to supply the plant after the expansion. Because of the relatively small output of the existing mines, which are all operated independently, Chidral signed in 1959 long term contracts with the most dependable mines to ensure regular supplies. It has also informed these suppliers about the increased future requirements and intends in due course to negotiate additional contracts. 37. On the basis of equipment orders already placed, the new unit should be ready for operation by the middle of 1962. (b) Calima I Hydro Plant 38. The 120 WM Calima hydro plant would be located on the Calima river at a site about 50 kilometers north west of Cali. The river rises in the mourntain range west of the Cauca Valley and flows south and west until it discharges into the San Juan river which flows to the Pacific. The drainage area of Calima and its tributary Bravo above the proposed dam site is about 350 square kilometers. The average flow is estimated at 11.8 cu.mAter/sec, the recorded maximum and minimum flows are 122 and 2.2 cu.meter/sec, respectively. Continuous stream flow records are available for the last 14 years supplemented by over 50 years of rainfall data. 39. The dam to be constructed across the river would create a reservoir with a total capacity of 533 million cu, meters. The useful storage would be 408 million cu. meters. Preliminary studies of the possible silting of the reservoir indicate that siltation would not present a serious problem in particular taking into account that the reservoir would have a length of 14 kilometers and cover an area of 16 sq. kilometers. More detailed studies and measurements are currently being carried out to confirm the preliminary findings. 40. The dam would be a rock or gravel fill structure with an impervious earth core. The height above foundations would be 100 meters and the crest length 250 meters. The spillway would be of the morning glory type, dis- charging into the diversion tunnel required for the construction of the dam. The adequacy of the spillway as designed would depend on a careful operation of the reservoir. Further studies are being made and these might establish that some modification would be required. In any event the effect on the cost of the project would be minor. 41. Other main civil works include an intake structure, pressure tunnel, steel lined pressure shafts, underground powerhouse, tailrace, access tunnel and a smaller diversion tunnel to transfer 10 cu.meter/sec. from the Bravo river to the Calima reservoir. - 8 - 42. The turbines to be installed in the powerhouse would operate under a maximum head of 232 meters. The powerhouse would be excavated to provide space for four generating units; initial installation would consist of two units with a capacity of 30 141 each. 43. The final location of the outdoor step-up substation is under study. The tentative site selected is on the right bank up-stream of the dam. Detailed engineer4ng data are given in Annex 5. Enaineering and Planning 44. Both the preliminary studies and the detailed engineering of the Calima plant have been carried out by the consulting organization retained by CVC (TAiS - Gibbs & Hill - OLAP). The present plans have been developed over a period of six years. The results of the detailed geological investigation, which included extensive drillings and excavation of test pits, show in general very favorable rock conditions. Quarry sites and adequate quantities of fill materials are available close to the dam site which is also easily accessible from existing roads. Construction 45. Tenders would be invited on an international basis for the execution of the civil works. The consultants would be responsible for the supervision of works throughout the construction period. All equipment to be procured abroad would be ordered on the basis of international competitive bidding. Status of Work and Schedule of Construction 46. The plans and specifications of the project have been prepared. Preliminary works were started in the beginning of 1960 and bids for the main civil works could be invited shortly after financing has been assured. Bids for major pieces of equipment have been received. The construction is scheduled to require 3* years from the time the work is started. Allowing time for the preparation and evaluation of bids and award of the main civil works contract, the Calima plant could be ready for operation in the beginning of 1964. Details of the construction schedule are shown in Annex 6. (c) Transmission System 47. A 154 kilometer long 115 kv double circuit transmission line on steel towers would be constructed through the central part of the Cauca Valley between Yumbo and Cartago (see map attached). At Cartago an inter- connection would be provided with the eyisting power system serving the Department of Caldas permitting a future interchange of power between the two systems. Main substations would be constructed at the towns of Buga, Tulua, Zarzal and Cartago. The Calima hydro plant would be connected to the system by the construction of a 33 kilometers long 115 kv transmission line terminating at the Buga substation. - 9 - 48. A number of smaller towns would be connected to the system by construction of some 90 kilometers of 34 kv and 40 kilometers of 13 kv lines, with associated substations. 49. The system has been designed and engineered by CVC's consultants who also would be responsible for construction supervision. 50. The materials required for 132 kilometers of the Yumbo-Cartago transmission line were originally ordered by the Colombian Government and were intended for a transmission line to connect Bogota with a proposed thermal plant at Paipa. This project was cancelled and the Government agreed, upon the suggestion of the Bank, to sell the materials to CVC. The substation materials and equipment required for the transmission system would be ordered on the basis of international competitive bidding. (d) D-istribution Systems 51. The necessary expansion of distribution networks would be carried out by the municipal and private companies responsible for the distribution and sale of power in their respective towns. Because it is difficult for these companies to obtain loans to finance the foreign exchange to cover purchases of equipment and materials to be imported, a total amount of $1 million has been included in the proposed loan. This amount would be made available by CVC and Chidral to the distributing companies. 52. Of the $1 million, Sv354,000 would be relent to the Empresas Municipales of Cali. These funds would be used for completion of the 34.5 kv ring system now under construction and for additional 13.2 kv feeder lines. The terms and conditions of this subsidiary loan would be subject to the approval of the Bank. 53. An amount of ',434,000 would be made available for rehabilitation ard expansion of distribution facilities in 8 towns and 16 villages in accordance with the plans prepared by CVC's consultants. This work would be carried out by CVC. It is planned by WCV that these distribution systems would be operated by individual companies. CVC would however retain financial control and provide technical supervision of these companies. The remaining 6212,000 would be made available to the town of Cartago under conditions satisfactory to the Bank. - 10 - Cost Estimates 54. The construction costs of the project are estimated as follows: (for details see Annex 7) Foreign Exchange Local Costs Total million $ million Ps million Ps million Ps Yumbo thermal plant 4.4 30.8 8.7 39.5 (33 0MW) Calima I hydro plant 14.5 101.5 55.9 157.4 (60 M12) Transmission system 4.8 33.6 20.8 54.4 Distribution 1.0 7.0 - 7.0 Unallocated .3 2.1 - 2.1 Total 25.0 175.0 85.4 260.4 (million $ equivalent) (25.0) (12.2) (37.2) 55. The estimates have been carefully prepared and in great detail. They were revised in November 1959 and are based on prices and wages then in effect. Equipment costs for the Yumbo plant are based on firm bids and for the Calima plant on preliminary bids. Suitable allowanceshave been made for engineering charges and overhead. The estimate of foreign exchange costs include for the Yumbo plant an allowance of 5%, for contingencies and for the rest of the project 10%. All local costs include a 20/%o contingency allowance. The estimates have been prepared on a realistic basis and the allowances made are reasonable. Interest charges during construction are not included. 56. The unit cost of the 33 lAW expansion of the Yumbo plant amounts to $170/kw. For the Calima plant the unit cost of the initial installation of 60 MW would be $375/kw. The installation of the additional two units, scheduled for 1966 and 1967, would require a relatively small investment, and the unit cost would be reduced to about $200/kw. This is a very reasonable cost for a hydro plant of this type, in particular considering that the regulating reservoir in the future also would serve the Calima II hydro plant to be constructed downstream. 57. Assuming that the proposed new plants were to operate independently and not as part of an existing system, the cost of power of the 3314W Yumbo unit, based on a 50% load factor, is estimated at 9 U.S. mills/kwh. The Calima I plant, which is designed to operate as a peaking plant would produce power delivered at Cali at an estimated cost of 14 U.S. mills/kwh with two units and 9 U.S. mills/kwh with four units. The financial charges included in these estimates have been calculated on the basis of a return of 8% on total investment. - 11 - VII. ECONOKIC 4SPECTS 58. As a part of the appraisal of the project proposed for Bank financing a study was made of alternatives to the construction program envisaged by CVC over the next 10-12 years. In particular consideration was given to postpcmnng the construction of the Calima I hydro plant and instead increasing the capacity of the Yumbo thermal plant, in addition to the 33 MˇW expansion now planned. 59. Four programs were developed by assuming varying commissioning dates of the individual units to be installed and which would provide sufficient generating capacity to meet the expected increase in system demand. Using the "present worth" method, a comparison was made of the estimated capital requlrements plus operating and fuel costs for the different programs. It showed that the early construction of the Calima plant would give the overall lowest costs, but the difference between the programs were small. 60. The supply of fuel for thermal capacity in addition to the present 33 MN extension to the Yumbo plant would present difficulties. A re- organization of the present mining operation would have to be made and capital would have to be invested to make possible an increase in coal production. 61. A comparison was also made between the Calima I plant and a new thermal plant of equal capacity. It showed a return on the additional investment of at least 15%. This is however based on the assumption that a sufficient supply of coal could be obtained from the mines in Cauca Valley. If fuel from other sources were required, the return would become higher because of the added transportation costs. VIII. FINANCIAL ASPECTS Rates 62. Rate adjustments in Colombia are authorized by the Ministry of Development after reviewing the recommendations of the Water Control and Electricity Development Institute's study of the rate application. Any increase in Chidral's wholesale rate would normally involve some complementary adjustment in the rates Empresas Municipales de Cali charges to the public, but there is at present a considerable margin between the wholesale and retail rates. Chidral's difficulties in obtaining prompt and satisfactory rate increases are magnified by the inherent inability of a wholesaler and a distributor to agree readily on a suitable rate structure. 63. In January 1960, after a delay of more than a year in reaching such an agreement, Chidral was authorized to increase its rates from an average revenue per kwh sold in December 1959 of about 3.7 centavos (5.3 U.S. mills) to a flat wholesale rate of 6.1 centavos (8.7 U.S. mills), or an increase of about 65%. It should be noted that even after this increase the rate is somewhat lower than the estimated productions costs - 12 - of the proposed new plant. Empresas iHunicipales de Cali, which currently buys virtually all of Chidral's power for distribution in the Cali area, was at the same time granted rate increases which should raise its average revenue per kwh sold from about eight centavos (11 U.S. mills) to ten centavos (14 U.S. mills), or an increase of about 25%. Even allowing for these rate increases the charges for electricity in Cali are low, compared with other countries in Latin America. Audits 64. Chidral's financial statements are checked by an auditor appoin- ted by the three shareholders, CVC, the Department of the Valle and the Municipality of Cali. The auditor has a full time assignment and is on Chidral's payroll. There is no external audit. To conform with sound financial practice, Chidral has agreed during negotiations to have its financial statements audited annually by an independent accounting firm satisfactory to the Bank. Present Financial Position 65. Condensed Balance Sheets for the years 1955 through 1959 are shown in Annex 8. As of December 31, 1959, net fixed assets in operation after deducting a reserve for depreciation of Ps 11.9 million totalled Ps 102.1 million. The existing plant has been written-up to reflect the present peso equivalent of most of the foreign exchange component of fixed assets, but the local currency component remains at historic cost. If the plant were written-up to present day prices the net fixed assets in operation would be about Ps 127 million. About 60% of net fixed assets in operation represent the Anchicaya hydro plant, about 20% the Yumbo thermal plant and the balance small diesel plants and transmission installations and equipment. 66. The capitalization of Chidral as of December 31, 1959 was as follows: In Millions Percent Capital and Surplus Ps 53.0 47% Debt IBRD Loans 38-CO and 113-CO 48.0 43% CVC Loans 7.8 7% Other 3.2 3% 59.0 53% Total Capitalization Ps 112.0 100% CVC, the Departamento del Valle and the Municipality of Cali own approxi- mately 60%, 20% and 20% of the share capital. The IBED loans outstanding are adjusted to a rate of exchange of Ps 7 to the dollar, but do not include Loan 215 CO ($2.8 million) which only became effective in January 1960. The debt would have been larger and the equity smaller if CVC had not assumed and converted into capital Ps 5.7 million of Chidral's debt in 1959 and Ps 1.3 million in 1958. - 13 - Past-f.nancint 67. Chidral has had great difficulty in financing its past expansion of plant. The Bank has made three loans, starting in 1950, aggregeting $l0.8 million equivalent, to assist in financing the foreign exchange costs of Chidral's plant additions. About 75% of the local currency costs have been met by contributions from its shareholders and the balance by internal cash generation. Past Earnings Record 68. Suimary income statements are shown in Annex 9. Financial results have never been good. In 1958 and 1959 they, in particular net profits, deteriorated considerably. In the four years ended 1959 when operating revenues increased from Pe 6.1 million to Ps 10.6 million, operating expenses increased from Ps 2.8 million to Ps 7.5 million and gross income declined from Ps 3.3 million to Ps 3.1 million. The return on net fixed assets in operation declined from 6.8% in 1956 to 3.0% in 1959. If the assets had been fully re-valued as indicated in paragraph 65, the 1959 return would have been only about 2.4%,. Rising operating costs which were not accompanied by rate adJustments have resulted in this unsatisfactory earnings record. Proposed Financing 69. To meet future power needs of the Cauca Valley involves a long range and sizable expansion program requiring large capital expenditures. The first part of this program, which is the project proposed for Bank financing, is expected to cost Ps 260 million (e37 million). Of this amount Ps 253 million is allocated for generation and transmission line additions to the Chidral system. The remaining Ps 7 million would be spent on the distribution systems in Cali and in a number of smaller towns in the Cauca Valley. The project is scheduled to be completed by mid 1964. In addition, estimated expenditures by Chidral for thn second part of the power program covering the period 1965 through 1969 amourt to about Ps 202 million. 70. Based on the power expansion needs, a ten year forecast of sources and applications of funds of Chidral is presented in Annex 10. It has been assumed in these calculations that the rate of 6.1 centavos/kwh remains constant. It has been agreed during negotiations that local currency needs, other than those met from internal generation, which are estimated to aggregate some Ps 52 million, would be met by equity contributions or non-interest bearing advances from WCV and that Chidral's present debt to CVC would be converted to equity. No provision has been made for dividends on, or repayment of, these contributions. An IBRD loan totalling $25.0 million has been assumed to be made, but with the interest and amortization calculated as though for two separate loans, the part applicable to Yumbo III, transmission and distribution having a term of 20 years, including a grace period of 3 years, and the part applicable to - 14 - Calima a term of 25 years, with a grace period of 5 years. An interest rate of 6-1% has been assumed. I2 71. Chidral's estimated capital requirements for the five year period ending 1964 aggregate Ps 263.4 million as follows: a. Ps 253.4 million for generation and transmission additions, b. Ps 8.5 million to complete the current projects, C. Ps 1.5 million for additional working capital. 72. The funds necessary to meet the estimated capital requirements of Chidral would be obtained as follows: In Millions Percent Ps Internal cash generation 104.1 Less debt service 69.9 34.2 4.9 13.0% Borrowings: IBRD Loan 215 CO 15.7 Proposed IBRD Loan 168.0 183.7 26.2 69.7% CVC equity contributions, supplemented if necessary by Government contributions 51.8 7.4 19.7% 269.7 38.5 102.4% Less cash surplus 1964 6.3 0.9 2.43; 263.4 37.6 lCO.G,o The figures of debt service and IBRD loans are adjusted to take into account advances to, and recoveries from, sub-borrowers. It will be noted that Chidral could finance about 13% of its capital needs for the five year period ending 1964 from its own resources. 73. Forecast balance sheets and income statements based on the above assumptions are shown in Annexes 8 and 9. Estimated Future Earnings 74. Mainly as a result of the recently increased rates, gross income is forecast to increase from Ps 3.1 million in 1959 to Ps 8.4 million in 1960, Ps 9.5 million in 1961 and Ps 15.3 million in 1962. 75. The return on the book value of net fixed assets in operation would only average about 8.5% for the five years ending 1964 and about 9.5% for the ten years ending 1969. If the assets were revalued to present day 1/It now seems likely that the rate would be 6%,, but this change would have no significant effect on the projections. - 15 - price levels the return for the ten year period would average only 8.5% for the expanded system, with the existing 1960 assets earning about 8.3% and the new investment about 8.7%. 76. Estimated year and ratios of debt service coverage for 1960 through 1969 are as follows: 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1.3 1.3 1.5 1.4 1.6 1.6 1.7 1.7 1.8 1.7 Over this period these coverages would average about 1.6 times. 77. Year-end debt/equity ratios would continue to rise through 1962 reaching a maximum of about 63/37. Throughout the period ending 1969, they would always exceed the ratio of 50/50 which, under the terms of the last loan agreement, would preclude Chidral from borrowing except with the Bank's consent. Under the proposed loan Chidral would be precluded from incurring new debt, except by agreement with the Bank, if at the time of the proposed borrowing its actual revenues, adjusted to reflect the rates in effect at the time, were less than 1.3 times the maximum debt service in any future year on existing debt plus the proposed new debt. 78. The estimated earnings, return on assets, debt service coverages and debt/equity ratios, based on the 6.1 centavos average rate, would, taken by themselves, be not unreasonable. In view, however, of the size of the 1960-64 expansion program, to which retained earnings would contribute only about 13%, every effort should be made to increase revenues and consequently contribution towards new construction from this source. Strengthening of Chidral's Financial Position 79. As has been said above, Chidral, especially in view of the magnitude of its expansion plans, should take all possible steps to improve its financial position. 80. The most obvious step would be to obtain a further rate increase, but since the last increase was only obtained in January 1960 it may be difficult for Chidral to achieve this for some time. 81. However, as an illustration, the effect of an increase in January 1961 in rates of about 30%, to 7.9 centavos has been examined. In such a case the debt service coverage would exceed 2 to 1 in 1962 and subsequent years; about 28% of capital requirements for the five years 1960-1964 would be provided from internal generation; and the return on net fixed assets at book value would reach about 12% in 1961 and average some 14% over the ten years to 1969. Such results would be acceptable. A comparative table, giving key financial figures on the two bases of 6.1 centavos and 7.9 centavos, is given in Annex 11. 82. Suitable measures, and timing, to obtain an improvement in Chidral's financial position were discussed during negotiations. As a result of - 16 - these discussions, the proposed loan agreement includes limitations on borrowing (see paragraph 77), on dividend payments and on further new construction urntil the project shall have been compl.eted; a consultation clause regarding borrowing, and a satisfactory covenant regarding the level of rates. Furthermore CVC and Chidral have agreed to state in writing that they will use their best efforts to secure at the earliest practicable date such increase in revenues as would enable Chidral to achieve the revenue coverage for then existing debt service referred to in paragraph 77 (irrespective of whether rnew borrowings were contemplated or not). A.nE:' 1 Page 1 CORPCRACIOE AUTONOMA REGIONAL DEL CAUCA FINA1ICIAL STRUCTTRE AND CONDITION Corporacion Autonoma Regional del Cauca (WCC) is a "public establishment" ("lestablecimiento publico") of a national character, which carries out certain functions of the Government in specific fields. CVC's initial capital was provided by contributions from public entities; no private persons may hold an interest in the Corporation, although it may accept donations from such persons. The contribution of capital to the Corporation does not give a right to dividends. The sole purpose of keeping account of the capital contributions made to CVC is to distribute the assets and liabilities of the Corporation in proportion to such contribution in the event that it should be dissolved. CVC may invest and participate in private corporations. REVEX-UES CVC has at present the following sources of revenue: 1. As established by Law 25, enacted on May 25, 1959, a 3 per 1000 annual tax is levied on the assessed value of real estate in the Departamento del Valle whose owners have a net capital in excess of Pesos 100,000. The tax is collected by the Municipal Treasurers, held in a separate account and turned over to CVC. The tax is payable in whole or in part against delivery by CVC of non-interest bearing bonds to be amortized over a period of 20 years. The tax yielded a total of about Pesos 10 million in 1959. As the yield depends on the level of assessed valuations, it is dif- ficult to forecast with accuracy the additional return in the future. However, the present level of valuations is in general very low in comparison with the commercial price (which is supposed to be the standard for such valuations). The function of setting the assessments is performed by the National Geographical Institute, which is pro- ceeding to review the existing valuations as rapidly as the availability of trained personnel permits. Revaluations now in progress are expected to raise the assess- ments by a total of about Pesos 2 billion by the middle of 1960. As a result, CVC's revenues during 1960 should rise to at least Pesos 14 million. - 2 - A NNEX 1 Fage 2 The assessment revisions in force during 1960 will cover only parts of 12 municipalities of a total of 42 municinlities. It is expected that revisions to be made during the latt-, part of 1960, and which will take effect in 1961, will further increase CVCts revenues to an annual rate of at least Pesos iS million by 1961 and Pesos 20 million by 1962. Thus, the revenues from this tax source may be estinated as follows: 1960: Pesos 14+ million 1961: Pesos 18 millicGn 1962; Pesos 20 million 2. In accordance with Decree Law 0111 of April 16, 1958, CVC receives 50% of a tax levied on domestic distilled alcoholic beverages concsmed in the Departamento Adel VJcle. This tax is expected to confinue to produce about Pesos 1.2 million per year. CVC feels that, as is the case for all other regions in Colombia, there should be some provision in the national budget for a contribution by the Government to power programs in the Cauca Valley. The minimu.m national contribution now being made to other Departamentos is about Pesos 1 million per year and it is much larger in the case of specific programs. In view of the fact that, as provided in Law 25(1959), the Government took over Chidral debts of close to Pesos 6 million, it was felt that no great effort should be made to obtain appropriated funds in the 1960 budget. On the other hand, it is also felt that the region will have ample justification for requesting an appropriation in the 1961 budget. (Budgets in Colombia follow the calendar year). It is of course impossible to assign at this date any amount to this possible source of revenue. LOAI'JS CVC has a contract with the Caja de Credito 1,grario (acting for the Colombian and U.S. Governments) for a loan of Pesos 33.6 million of P.L. 480 funds. Of these only Pesos 7 million had been used to October 1, 1959. The general conditions of the credits are: 10 years' term from the date of each disbursement to CVC, gradual amortization starting in the fourth year, 7% interest. AhNEX 1 - 3 - Page 3 CVC may use up to Pesos 9.5 million of these funds for power transmission lines and the balance for reclamation works. Ps will be seen from the information on Commitments given below, the available credits are sufficient to cover estimated expenditures to complete re- clamation -works now in progress. COIusIThENTS AND SOURCE OF FUNDS A statement of Commitments and Sources of Funds and a Condensed Balance Sheet as of September 30, 1959 are attached. Apart from the Work in Progress, shown according to up-to-date estimates, which are being adhered to, cof,zitments for materials and equipment not included in project estimates are also shown. Other activities, to which CVC is committed, are shown also with adequate margin for gradual increases from year to year. It should be noted that in the column 1959-1960 are shown the comzitments and sources of funds for the balance of 1959 and for 1960. AkNIEX 1 Page Li COMIITTENTS Work in Process (Thousands of Pesos) Estimate Investment 1959- to October 1960 1961 1962 31, 1959 Aguablanca Proj. 15,498 6,123 8,794 187 94 Roldanillo-La Union-Toro Proj. 16,464 L,760 11,184i 192 328 Other Activities(l) Agr. Ext. Serv. 750 720 850 Soil Studies 225 215 260 Other 500 600 720 Materials Orders Federation of Coffee Growers 300 360 339 Ellicott Mach. Co. (Dredge) 719 Blackstone, Ltd. (Diesel electric plants) 709 316 Paipa transmission line 3,666 2,176 2,176 Other Inst,de Fomento Electrico 200 TOTAL COMIKITMENTS 27,o47 h,766 4,767 SOURCE OF FUNDS (Thousands of Pesos) 1959-1960 1961 1962 Cash and Banks 2,152 Loans (P.L.480) 26,590 Advances to Contractors and Suppliers 984 Tax Revenues CVC Tax 15,500(2 18,000 20,000 Liquor Tax 1,6o0(3) 1,200 1,200 TOTAL FUNTS AVAILABlE 46,826 19, 200 21,200 SURPLUS EACH YEAR 19,779 lho43h 16,433 ACCUMULATED SURPLUS 50,646 - S - ANNhX 1 Page 5 (1) Engineering Costs and General Administration are charged to the various project and activities and therefore are not shown separately. Under "Other Activities" are shown those not otherwise listed. (2) Includes October, November and December 1959 revenues. (3) Includes revenues from 'eptember to December 1959. C.V.C. Condensed and Rounded Balance Sheet as at Eeptember 30.--1959 (FxDressed in lllions of Pesos) ASSETS Equipment, furniture etc. 2.2 Work in progress 11.5 Fngineering studies 10.9 Other studies and development expenditures 2.6 Investments and advances 29.2 Current assets 7-3 63.7 LIABILITIES Contributions 53.9 Reserves and surplus -1.1 55.0 Provision for depreciation .4 Debt 7.5 Current liabilities 8 63.7 ANNEX 2 CENTRAL HIDRETECTRICA DEL RIO ANCHICAYA LTDA CALI YUIYBO AREA PERCENTAGE DISTRIBUTION OF POJER CONSUMERS November 1959 Category: Percentages: Residential 33.6 Industrial 43.7 Commercial lh.6 Public Buildings 2.5 Public Lighting, Cali 1.8 Public Lighting, Yumbo 0.1 Sales to other Utilities 2.7 Empresas Municipales 1.0 100.0 Annex 3 CENTRAL HIDRYLFLCTRICA DEL RIO ANCHICAYA LTDA LOAD GROWTH 1960 61 62 63 64 65 .66 67- 68 69 Peak Load (iW) Cali Area 70 86 94 105 115 126 138 153 168 184 Palmira-Buga (CCE) 14 16 18 20 23 26 29 33 37 41 Tulua 5 6 7 8 9 10 11 12 Zarzal 3 4 4 5 5 6 7 8 Sevilla 4 5 5 5 5 5 6 6 Cartago 6 6 7 8 10 11 12 13 Calima 1 1 1 1 1 1 1 1 Santander/Popayom 12 Total S4 102 131 147 162 179 197 219 242 277 Installed Capacity 116 116 149 149 209 209 239 239 269 269 Total Generation (mill kwh) 405 503 632 708 780 862 948 1050 1160 1275 Generation CCE and system losses 92 145 92 92 92 92 92 145 145 145 Chidral sales 313 358 540 616 688 770 856 905 1015 1130 INSTALLED CAPACITY IN POWER STATIONS AND MAXIMUM DEMAND ON SYSTEM M E G AWATTS MEGAWATTS 350 350 300 Calima No.4 _ 300 INSTALLE D 269 I(CAPAC ITY Colima No.3 2500 ~~~~~~~~Colima No.la2 29_ /0s ~~MAXIMUM 209 DMN 200 - ~~~~~~~~~~~~~~~~~~~~~~~~200 2 00 kAnchicaya' 64 Yumbo 25 Cali Diesel I11 Yumbo No.3 Cali Hydro 2 150 CCE Diesels 6 -150 CCE Hydros 8 1OO 100 z z z 50 I I I I _.50 a 1960 '61 '62 '63 '64 '65 '66 '67 '68 '69 '70 FERRliARY 1960 IBRD 668(R) ANME= 5 Page 1 CENTRAL HIDROLECTRICA DEL RIO ANCHICAYA LTDA Engineering Details CALI1PL I HY9RO POWER STATION Dam Location: Calima river gorge approximately 50 Km north of Cali Type: Impervious core, rock or gravel fill Volume: Approximately 1,800,000 cubic meters Height: 100 meters Crest Length: 250 meters Crest Level: 2L12 m a Above Sea Level (a.s.l.) Max. Op. Level: 14o8.5 ml" Yin. Op. Level: 1380 ml" Useable storage in Reservoir: 408 x 1i06 cubic meters Dead storage Reservoir: 125 x 106 cubic meters Reservoir Length: 14 Km Catchment Area: approximately 350 Km2 Annual Rainfall: approximately 2000 mm. Annual Evaporation: computed 1480 mm (Cali) Spillway Type: Morning Glory Design discharge: 322 cumecs Max. design flood: 2000 cumecs ANNEX 5 Page 2 Streamflow Calima River Average: 11.8 cumecs Maximum: 122 cumecs Minimum: 2.2 cumecs Capacity Bravo diversion tunnel: 10 cumecs Mqaximum to reservoir from Bravo River: 10 cumecs Power Station Underground type. Pressure shafts, one main shaft 6 m. dia controlled by two intake gates. Intake shaft bifurcates at level 128b a.s.l. to two steel lined pressure shafts 3 m. dia each supplying two turbines. Tailrace Tunnel Continuous horseshoe section with surge chamber at turbine draft tube outlets Gate chamber provided for turbine draft tube gates. Turbines and Generators Type: Vertical shaft Francis Output: 30,000 KW each Steel spiral casings and draft tube liners Maximum static head: 232 meters Control Room, Offices etc. Above ground, with shaft access to power station EScavati°n I I \ \ \ \ \ ' \ \~~C I 0 N C ED L th concreting I \ 1 1~~~~~~eco .eraces,rhoads Inaeror an TrI c learincouse r,I U s~~~~~~~~~~~~~~~T DjleTs 0X! Ex one i et| \ ENRA CONcrTin m I\\l mb nknllt:r ion vto | |II\Il Genea r d Sqiten lle\ IEYcadation 1111lI 1 | ExcaattOn CoceIng Annex 7 Page 1 CENTRAL HIDROEIECTRICA DEL RIO ANCHICAYA LTDA YUMBO POWER STATION No. 3 Steam Unit Estimate of Costs Foreign Local US $ x 1000 Col Pesos x 1000 Boiler 925 Turbine 675 Generator 275 Auxiliary Plant 535 Water Treatment Plant Lo 650 Coal and Ash Handling Plant 125 Transformer 125 Sub-station equipment 155 500 Civil works )L5 4600 3000 Freight 455 Erection 340 1500 Engineering 240 4035 7250 Contingencies 365 1O50 44oo 8700 Annex '7 Page 2 CENTRAL HIDRCELECTRICA DEL RIO ANCHICAYA LTDA CALDIA I HYDROELECTRIC POWER STATION Estimate of Costs Foreign Local US $ x 1000 Col. Pesos x 1000 Land purchase 3,515 Access roads and camps 2;305 Construction power 1,200 Road relocation 350 River diversion 388 2,713 Access tunnel and shaft 621 2,301 Intake and gates 696 [,200 Dam 3,125 4,636 Pressure shafts 548 2,871 Surge chamber 163 623 Low level outlet 143 6b7 Tailrace tunnel 1,469 4,602 Spillway 1h5 869 Powerhouse 757 4,079 Turbines and valves 85 373 Generators 1,0o6 466 Other equipment 925 433 Bravo diversion tunnel 1,401 1,415 Other works 19 713 12,309 71,311 Contingencies 1,245 8,283 Engineering charges 1,582 700 Supervision 756 1,632 Overheads 108 I,374 16,000 56,300 Deduct Engineering charges incurred before end of 1959 500 No. 3 & 4 units to be installed later 1,000 4oo Net total 1h,500 55,900 CE __ _ _ ______ i 01:i19 J D: ACTIUAL AIID E2LIAP20 I.1ICE .2D'J22 1955-1969 -_ A C T U . L_- __ E_ T I M A T E D _ Years ended or ending 1955 1957 1957 1'?58 1 1959 1°6C 1961 1962 1963 1964 1965 1966 1967 1963 1969 (djusted) I IJ 11 I L I, I O N S n F I'; , n s, ASSFTS Electrical installations in ooermtion 49.0 49.1 59.9 107.9 111.5 123.5 165.4 215.4 215.4 331.9 3P1.9 3°1.9 394.9 394.F 394.8 Other fixed assets 1.3 1.9 2.1 2.3 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 ?.5 2.5 Total 50.3 51.0 62.0 110.2 114.0 131.0 167.9 217.9 217.9 3F4.4 384.4 384-4 397.3 397.3 397.3 Less reserve for depreciation .7 3.1 5.3 9-4 11.9 16.1 20.9 27.2 3. 4 43.L4 54.0 64.L 75.3 86.2 97.1 Net fixed assets in operation 49.6 47.9 56.7 101.8 102.1 114.9 147.0 190.7 183.5 341.0 330.4 319.8 322.0 311.1 3(0. Wori in progress 3.l4 14.' 44.4 6.1 10.2 62.9 1(7.0 126.2 157.4 1.7 9.4 24.7 48.5 110 .1 191.0 Total net fixed assets 53.0 62.7 101.1 107.9 11.2.3 183.9 254.0 316.9 340.9 342.7 339.8 3441.5 37( 5 421.2 691.2 Advances to others 3.9 5.7 7.5 9.2 9.8 9.3 9.9 8.3 7.8 7.2 Current assets 1.1 2.6 2.8 61.0 4.5 (.4 (.7 1.0_ 1.3 7.9 21.1 32.6 39.5 44.6 47.9 Total assets 54.4 65.3 163.9 111.9 116.2 183.1 26(.4 395.4 351.4 360.4 370.2 385.9 413.3 473.6 5146.3 LIABILITIES Capital, reserves and surplus 34.9 39.6 43.4 47.4 53.0 79.2t102.4 L0.-O-130.0-133.9 149.9 L64.6 132.7 205.1 230.7 Debt IBRD loans - existing 14.9 44.4 4i7.0 48.0 64.9 61.5 57.9 54.2 50.2 46.1 41.7 37.2 32.5 27.4 Proposed IBRD loan 43.4 96.5 1-47.5 167.2 171.3 167.2 161.4 155.3 148.8 141.9 Futulre foreign loans 7.0 18.2 43.1 87.2 146.3 C.V.C. 3.3 7.9 Other 19.3 7.7 9.9 10.98 3 3 Total debt 19.3 22.6 54.3 61.1 59.0 169.3 158.0 205.4 ''21.4 221.5 220.3 221.3 235.6 269.5 315.6 Current liabilities 1.2 _ 3.1 6.2 _3.4 4 ___---___-____ _ _- Total liabilities 544 _65.3 103.9 1.-. ,_ . I .L -, . -- -: ' ' 419.3 473.6 546.3 Debt/equity ratio 34/66 36/64 56/44 56/44 53/47 58/42 61/39 63/37 63/37 61/39 59/41 57/13 56/44 57/43 58/L? &/ From 1960 net current assets are showqn, including also, in 1964 and on, the accursulated cash surplus. Rtevised Yarch 11, 1960 T__ -'-T 7 !- l --, TT -- ACTUAL _.JD C35TT--AT;TD T11TC I CT 'T1TTS 1955-1969 A r , T U _ C L E C T I II AT AD__ _T_ Fiscal year ends December 31 1955 1956 1957 1958 1959 1960 1961 1962 196° 1964 19|5 1966 1967 1969 1969 (six months to Dec. 31) Sales (millions of kwh) 162.6 195.5 226 274 313 352 540 616 638 770 856 905 1015 1130 Average revenue per kwh sold (Col. 0 3.8 4.1 4.0 3.9 6. 6.1 6.1 6.1 6.1 6.1 6.1 6.1 6.1 6.1 T _I ___t_I L I T T 0F P 3 5CC S____ _ - Operating revenues 2.5 6.1 8.1 9.0 10.6 19.1 21.8 39.9 37.6 1,2.0 47.0 52.2 55.2 61.9 69.9 Operating epenses Costs of operation .4 1.5 2.3 3.2 4.0 4.8 5.1 6.0 6.2 7.0 7.1 7.3 7.3 7.4 8.2 Fuel 1.7 2.4 5.3 6.5 4.3 5.6 7.0 4.0 6.5 7.0 Depreciati on .6 1.3 2.0 3.0 3.5 _1. 2 4.8 6.3 7.2 9.0 10.6 10.6 10.7 1C0. 9 1(-.9 Total operating expenses 1.0 2.8 4.3 6.2 7.5 10.7 12.3 17.6 19.9 2C.3 23.3 24.9 2l.0 24.8 26.1 Gross income 1.5 3.3 3.8 2.8 3.1 8.4 9.5 15.3 17.7 21.7 23.7 27.3 31.2 37.1 42.8 Income deductions interest .3 1.1 1.1 2.4 2.7 3.4 7.7 10.4 12.4__?.9 12.7 12.6 13.1 1/.7 17.2 Tet srofit 1.2 92. 2.7 .4 . 5. 1. 4.9 3 8.9 11.0 _147 13.1 22.4 25.6 Average net fixed assets in operation 49.6 49.7 52.3 79.2 102.0 11 3.5 131.0 168.9 187.1 262.3 335.7 325.1 320.9 31>.( 305.7 Return on net fixed assets in operation 6.Q' 6.86 7.3-' 3.5,4 3.0° 7-76 7.26f 9.1' 9-5 8.31 7.1' 8.411 9.76 11.76 14.(,' In 1960 and subsequent years, net after crediting recoveries from sub-borrowers. I1 CENTRAL MTPOELECTRICA 30L 92I0 A14OH1ICAYPL LEIJTTDZ FOPE,C v. S2CU :22S :0 IDA1L.CATIONS OF FU!00 1960- 196 9 Cumul:13 ve Years ending December 31 1960 1961 3962 1963 1964 1965 3966 1967 1968 1969 ten *-ars 196(0-1969 I N Y T 1. L I n N ': r F p-0 ( _ S I SOTURCS OF FUNDS Internal cash generation Gross income 8.4 9.5 15.3 17.7 21.7 23.7 27.3 31.2 37.1 42.8 234.7 Depreciation 4.2 4 . 6.3 7.2 9.0 10.6 10.6 10.7 18.0 10.9 95.2 Total 12.6 14.3 21.6 24.9 30.7 34.3 37.9 41.9 49%.0 53.7 319.9 Recovery from others .3 .6 .7 .8 .9 1.C 1.0 1.0 1.0 1.0 8.3 Borrowing s IBRD loan 215 CO 19.6 19.6 Proposed IBRD loamn 43.4 53.1 51.0 20.9 6.6 175.0 Future foreign loans 7.0 1-. 25.2 44.8 60.9 149.1 Total 63.0 53.1 51.0 20.9 6.6 7.0 11.2 25.2 44.8 60.9 343.7 C.V.C. Contributions to equity 13.6 20.8 12.7 4.7 51.8 Total sources of funds 89.5 88.8 86.0 51.3 38.2 42.3 50.1 68.1 93.8 115.6 723.7 II APPLICATION OF FUNDS Additions to Plant Completion of current project 9.5 8.5 Proposed IBRD projects: foreign exchange 43.4 51.1 49.0 18.9 5.6 168.0 local currency 23.9 23.9 20.2 12.3 5.2 85.4 67.2 75.0 69.2 31.2 10.9 253.4 Future program: foreign exchange 7.0 11.2 25.2 44.8 60.9 149.1 local currency .7 4.1 11.5 16.9 20.0 53.1 7.7 15.3 36.7 61.6 30.9 2C1.2 Total additions to plant 75.7 75.( 69.2 31.2 10.8 7.7 15.3 36.7 61.6 80.9 464.1 Advances to others 3.9 2.0 2.0 2.0 1.0 10.9 Debt Service Interest IBRD loans: 38 00, 113 GO & 215 CO 2.5 3.0 2.9 2.8 2.6 2.5 2.2 1.9 1.8 1.5 23.7 Proposed IBRD loan 1.2 5.1 8.0 10.1 10.7 10.5 10.2 9.9 9.5 9.1 84.3 Future foreign loans .2 .7 1.9 3.9 7.0 6 Total 3.7 8.1 10.9 12.9 13.3 13.2 13.1 13. 15.2 17.6 11. Amortization IBRD loans: 38 CO, 113 CO & 215 CO 2.7 3.4 3.6 3.7 4.0 4.1 4.4 4.5 4.7 5.1 40.2 Proposed IBRD loan 1.2 2.5 4.1 5.8 6.1 6.5 6.9 33.1 Future foreign loans .3 .7 1.8 2.9 Other existing loans 3.2 3.2 Total 5.9 3.4 3.6 4.9 6.5 8.2 10.2 10.9 11.9 13.8 79.3 Total debt service 9.6 11.5 14.5 17.8 19.8 21.4 23.3 24.5 27.1 31.4 260.9 Additions to working capital .3 .3 .3 .3 .3 .3 .3 .4 .4 .4 Total applications of funds 8-5 88. 9 86.0 51.3 31.9 29.4 39.9 61.6 99.1 112.7 Cash surplus or (deficit) 6.3 12.9 11.2 6.5 4.7 2.9 CumulstJve cash surplus or (dqficit) 19.2 30.4 36.9 3l .6 44.5 Times debt service covered by internal cash generation nlus recoveries fromn clb-borrowers 1.3 1.1 1.5 1.L _.6 1.6 1.7 1.7 1.8 1.7 3.1 hevised Narch 11, 196C CErTlJYT. HITDRO IEC,TTICA DEL Y.TO AHT (,'IC, V J.j'.1. Comparison of Financial lesults at F'ates of 6.1 a..nd 7.9 centavos Ten Year 1960 1961 1962 1963 1964 1965 1966 1967 1963 1969 Period Times debt service corered by internal cash generation Chidral - 6.1¢ rate 1.3 1.3 1.5 1.4 1.6 1.6 1.7 1.7 1.8 1.7 1.6 Chidral - 7.9W rate 1.3 1.8 2.2 2.1 2.2 2.3 2.3 2.4 2.5 2.4 2.3 Return on net fixed assets in ope ration Chidral - 6.1¢ rate 7.7,1 7.21 9.1, 9.5,/ 3.3,1 7.1:5 3.45 9.7¸ 11.7,W 14.G0 9.5,. Chidral - 7.9¢ rate 7.T5 12.1 14. 81, 15.4513 13.0,5l 11.254 13.1 ¸ 14.31,'i 17.5-5 20.6-<) 14. 5'5 Cash surplus in millions of pesos Cumulative Chidral - 6.1¢ rate - - 6.3 12.9 11.2 6.5 4.7 2.9 44.5 Chidral - 7.9¢ rate - - - 6.h 18.7 26.8 26.6 22.3> 23.0 23.2 147.5 Debt/equity ratios Chidral - 6.1¢ rate 58/4p2 61/39 63/37 63/37 61/39 59/I1 57/43 56/144 57/43 58/42 Chidral - 7.94 rate 58/42 59/41 6C/40(, 5r3/42 55/45 52/L3 49/51 47/53 47/53 47/53 During the five years 196C-1964l Chidral (6.1¢ rate) would nrovide about 13f1¸ of canitclf reiuirements from its ow ,on resources. - During the five years 1960-1964' Chidral (7.95 rate) woul(d provide about 23; of canital reouirements from its own >< resources. H Revision Maroh 11, 1960 -- - -.. - . - ----~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~...... I~~~~ , : - '\9:.. g- :: - . . . . . . . . . . . LN, ~ ~ ~ ~ .......... _ . ..'- J \ ~ ~ ~~~ ~ ~ :. :: . : : . .: . :::: --2',< > _,<-' . o E , !' > " --'p t ~ ~ ~ ~ ~ ~ ~ ~ . ......... .. , e, ,_ _ , 0 f' . -'. o _ 1 00~~~~~~~~~~~~~~~~~~~ I-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~r / ~w w 0 V d 0 N 3 a 0~~~~~~~~~~~C @ A C I FI C C o8 -sss _ Lineas de 115 KV Lineas de circuito simple + _______ 34KV ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ igle circuit tines. BUENAVENTURA 1 _32KV ( Lineas de circuito doble 2 rn. ....... E x xistente 34y 1 3 . 2 K V Double circuit linb i oJ (~~~~~~~~~~ ....... . ..115 KV sese0ee Sistema de 115 KV de la CHEC. NOTA Plantas Principales La cifra dentro del circulo indico el numero do linbes ANCHICAYA -/ }I centros Prinncipales The figure ,n the circle indi- , a7 ,, gY de Distribucion cates the number of tines t / \ D E P T 0. > D E L C H O C 0 / Dagus J 'X + O o Bitaeo0 + llCALIMA I x + A sAIM'Is RestrepooD 'YUMBO La Cumbrs CAL T EICar Yataco ) Y oto e W < Trujillo ElDovio 0a Alban DEL DEL CAUCA 3Z 4- Bolivezf CArge KV D E P T 0. D E C A L D A S ACrzndele;° L XCsrito T-6 o /Orzlors_ 33KV BL 7 PALM/ /AIRA s o NIMA I VJ oColorco ' , a8 MANIZALES k w/ + + / C~~~~~~~~~~vc X - \ { ~~~~~~~~~~~CORPORACION AUTONOMA REGIONAL DEL CAUCA + - s ~~~MAP OF O TRANSMISSION SYSTEM _EBRU ARY _960 IBR-+ -+ + FEBRUARY~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~ 196 IBR 652