Document of The World Bank FOR OFFICIAL USE ONLY Report No. 1846-BR STAFF APPRAISAL REPORT BRAZIL SOUTH-SOUTHEAST POWER DISTRIBUTION PROJECT March 10, 1978 Projects Department Latin America and the Caribbean Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTSI/ Currency Unit Brazilian Cruzeiro (Cr$) Cr$1.00 = 100 centavos US$0.0697 Cr$1,000,000 US$69,700 US$1.00 Cr$14.35 US$1,000,000 Cr$14,350,000 ABBREVIATIONS AND ACRONYMS CE]LESC Centrais Eletricas de Santa Catarina CEMIG = Centrais Eletricas de Minas Gerais DNAEE = Departamento Nacional de Aguas y Energia Eletrica ELETROBRAS Centrais Eletricas Brasileiras S.A. ESCELSA Espirito Santo Centrais Eletricas S.A. ELETROSUL = Centrais Eletricas do Sul do Brasil S.A. FURNAS = Furnas Centrais Eletricas S.A. GC()I = Grupo Coordenador para Opera9ao Interligada IDB = Inter-American Developmenit Bank LIGHT = LIGHT - Servigos de Eletricidade S. A. NME: Ministry of Mines and Energy NDE' = National Development Fund MEASURES AND EQUIVALENTS kW = Kilowatt MW = Megawatt (1,000 kW) kWh - Kilowatt hour GWh = Gigawatt hour (million kWh) kV Kilovolt (1,000 volts) kVA - Kilovolt - ampere MVA - Megavolt - ampere (1,000 kVA) km = kilometer (0.6214 mile) average MW = average Megawatt (8.76 x avg. MW = GWh). FISCAL YEAR January 1 to December 31 1/ The exchange rate on June 30, 1977 was used to compute currency equivalents in this report. FOR OFFICIAL USE ONLY BRAZIL STAFF APPRAISAL REPORT ON THE SOUTH-SOUTHEAST POWER DISTRIBUTION PROJECT TABLE OF CONTENTS Page No. 1. THE SECTOR .......... ........................... 1 Energy Resources ... . .........1 Energy Use in the Southern and Southeastern Regions ......... ..... ....2 The Role of the Sector in the Economy .............. .2 History of Bank Group Involvement with Sector ...... 3 Sector Organization and Regulation ....3........ 3 Power Tariffs ........ O ...... 5 Electricity Consumption 7 Existing Facilities.............. 8 Access to Service . . .. ....... . ......... . ... . 9 Rural Electrification ........... ............ 9 Sector Investment Program . . 9- Sector Manpower .. .10 Constraints on Sector Development .................. 10 2. THE BORROWER AND THE BENEFICIARIES ...................... 12 The Borrower *.. . . e.. .....12 The Beneficiaries .. .. ..14 - Centrais Eletricas de Minas Gerais S.A. (CEMIG) 14 Training ..... ..............14 Management Systems ............ ......... 15 Accounting and Audit ............. . ........ 15 Billings and Collections ......... ..... 15 Risk Management ...................15 - Centrais Eletricas de Santa Catarina S.A. (CELESC) ........e.............15 T raining ................ ..aa 1 6 Management Systems ...... ... ................ 16 Accounting and Audit ............ 16 Billings and Collections ...................... 17 Risk Management ........ .. ....... ........... .. 17 - Espirito Santo Centrais Eletricas S.A. (ESCELSA) 17 Training .................. 17 Management Systems. ..... ...... .... 18 Accounting and Audit .... ............... .. 18 Billing and Collections ....................... 18 Risk Management ............ ........... ...... 18 This report is based on the findings of an appraisal mission which visited Brazil during July 1977. The mission comprised Messrs. Rafael A. Moscote, Sergio Contreras, Alain Barbu and Alejandro Perez. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. - ii - TABLE OF CONTENTS (Cont'd) Page No. 3. THE MARKET AND THE MEANS TO MEET IT ....................... 19 Hiistorical Market ................. 19 The Forecast ......................................... 19 The Energy and Capacity Balance ...................... 19 Table 3-1 Actual and Forecast Power Market .... .... 21 4. PROGRAM AND PROJECT ....................................... 22 Background and Objectives ............................ 22 Generation ........................................... 22 Transmission ......................................... 22 D:Lstribution ........... 23 Miscellaneous Items .................................. 24 Program Costs ........................................ 25 The Project .......................................... 25 Project Cost Estimate ................................ 27 Implementation ....................................... 28 Procurement .......................................... 28 D:isbursement ......................................... 28 Environment .......................................... 29 Project Risks ........................................ 29 Table 4-1 1978-1981 Investment Program .... ........ 30 Table 4-2 Project Annual Expenditure Estimate ..... 31 5. FINANCIAL ANALYSIS ........................ 32 Summary ........... ................................... 32 Earnings History and Financial Position .... .......... 32 Investment and Financing Plans ....................... 33 Financial Outlook .................................... 36 Performance Indicators and Reporting ................. 38 Table 5-1 CEMIG - Financial Statements 1974-1982 .. 39-40 Table 5-2 CELESC - Financial Statements 1974-1982.. 41-42 Table 5-3 ESCELSA - Financial Statements 1974-1982. 43-44 6. ECONOM-IC ANALYSIS ......................................... 45 Least-Cost Solution .................................. 45 Return on Investment ................................. 45 Figure 6.1 Rate of Return on Investment .... ....... 47 7. SUMMARZ OF AGREEMENTS AND RECOMMENDATIONS ................. 48 - iii - TABLE OF CONTENTS (Cont'd) Page No. ANNEX A - ELETROBRAS' Financial Statements ..................... 50-51 T-1 Balance Sheets ................................ 52 T-2 Statements of Income .......................... 53 T-3 Sources and Applications of Funds Statements 54 ANNEX B - Supporting Tables, Charts and Maps Tables T-1 Monthly Electricity Tariffs (1977) . .55 T-2 Access to Service ....... . .56 T-3 Energy and Peak Demand Balance . 57 T-4 Installed Capacity (MW) and Energy Availability (GWh/year) . 58 T-5 Interconnected System Energy and Peak Demand Balance ............. ...59 T-6 Detailed Project Cost Estimate .60-61 T-7 Project Implementation Schedule 62-65 T-8 CEMIG - Actual And Proposed Terms Applicable to Long-Term Debt to 1982 ................... 66 T-9 CEMIG - Actual and Forecast Long-Term Debt Statements 1976-1982 ......... ................ 67 T-1O CEMIG - Forecast Long-Term Debt Disbursement Statement 1977-1982 ......................... 68 T-11 CEMIG - Forecast Long-Term Debt Amortization Statement 1977-1982 .. .......... ............. . 69 T-12 CEMIG - Forecast Interest Charges 1977-1982 ... 70 T-13 CELESC - Actual and Proposed Terms Applicable to Long-Term Debt to 1982 .... ............... 71 T-14 CELESC - Actual and Forecast Long-Term Debt Statement 1976-1982 .................. , , 72 T-15 CELESC - Forecast Long-Term Debt Disbursement Statement 1977-1982 ...................... *,, 72 T-16 CELESC - Forecast Long-Term Debt Amoftization Statement 1977-1982 ..... .................... 72 T-17 CELESC - Forecast Interest Charges 1977-1982 73 T-18 ESCELSA- Actual and Proposed Terms Applicable to Long-term Debt to 1982 ..... .............. 74 T-19 ESCELSA - Actual and Forecast Long-Term Debt Statements 1976-1982 .... ................... 74 T-20 ESCELSA - Forecast Long-Term Debt Disbursement Statements 1977-1982 ........................ 75 T-21 ESCELSA - Forecast Long-Term Debt Amortization Statements 1977-1982 ..... ................... 75 T-22 ESCELSA - Forecast Interest Charges 1977-1982 . 76 T-23 Project Performance and Monitoring Indicators . 77 T-24 Cost and Benefit Streams Used in the Determination of the Rate of Return ......... 78 - iv - TABLE OF CONTENTS (Cont'd) Page No. ANNEX B - Supporting Tables, Charts and Maps (Cont'd) Charts C-1 CEMIG Organization Chart ..............ar........t 79 C--2 CELESC Organization Chart ..... ................. 80 C-3 ESCELSA Organization Chart ................... .. 81 Maps M--1 State of Minas Gerais ...... ..................... 82 M--2 State of Santa Catarina ..... .................... 83 M--3 State of Espirito Santo ............. ............ 84 ANNEX C - Selected Documents and Data Available in the Project File 85-86 BRAZIL STAFF APPRAISAL REPORT SOUTH-SOUTHEAST POWER DISTRIBUTION PROJECT CHAPTER 1 THE SECTOR Energy Resources 1.01 The principal source of energy in Brazil is petroleum, which in 1976 accyinted for about 44% of total energy consumption, estimated to be 105 x 10 kcal; 29% of consumption was in the form of wood products and wastes, 24% was of hydraulic origin and about 3% was in the form of coal and natural gas. 1.02 Brazil's proven oil reserves are limited. Present domestic produc- tion of crude covers only 18% of the country's oil requirements. The country's main producing fields of oil and natural gas are located in the Northeast region. To increase domestic production, the Government is accelerating exploration. To this end, the Government is seeking to attract the participa- tion of foreign firms in the exploration and possible exploitation of the oil reserves in certain areas and has already signed several risk contracts. 1.03 Bituminous and sub-bituminous coal reserves, which are located in the South, are estimated at 3200 million tons. Coal extraction is rather costly because shaft mining is predominantly required. This notwithstanding, coal has played an important role in the South, providing base generation to the power system. 1.04 Brazil is endowed with one of the largest hydro potentials in the world, estimated at about 150,000 MW of which only about W have already been utilized and 30,000 MW more are under construction or are planned to be installed by 1990. Approximately 50% of the potential is located in the Southern, Southeastern and Northeastern regions, and has been surveyed in some detail. The remainder, which has been estimated on the basis of topo- graphical characteristics, stream flow, and rainfall is located in the Amazon region. The hydro potential remaining to be used in the South and Southeast is relatively costly since most of the cheap potential in those areas has already been used or is in the process of being tapped. Further economic utilization of these resources would require construction of long transmission lines and a proportion of non-hydro generating capacity to firm up existing hydroelectric generating capacity. 1.05 Brazil has a high ratio of electricity consumption to consumption of commercial fuel. This high ratio is partly due to its warm climate which eliminates the need for space heating. Another reason is the scarcity and high price of petroleum products and availability of cheap hydroelectric power. Brazil's ratio 1/ of 2.0, compared to 1.2 for Argentina, 1.0 for Mexico, and 0.9 for Venezuela, displays the importance of primary electricity 1/ In kWh of electricity per kg of oil equivalent of all commercial fuels, excluding that used for power generation. - 2 - in supplying the energy requirements of the country. Production of electric energy, which in 1976 was 88,381 GWh, has increased at a rate of 12. p.a. from 1970 to 1976; per capita consumption increased during the same period from 481 to 705 kWh. These data compare with those pertaining to Mexico (10.5% p.a. growth and 764 kWh per capita in 1976) and Argentina (8% p.a. growth from 1970 to 1976 and 1,156 kWh per capita in 1975). 1.06 Nuclear power is expected to play a major role in power generation after 1990. By 1985, about 3,000 MW of nuclear generating capacity is expected to be in operation in the Southeastern region, the largest demand center of the country. The first unit of 600 MW, constructed by Westinghouse 2%1:ov (USA), is expected to be in operation in 1979. An additional 2400 MW have been contracted for under the Brazil-West G`many Nuclear Agreement of June 27, 1975 which also gives Brazil an option to purchase six additional 1200 MW units. 1.07 Other fuels used include firewood, charcoal and sugar cane bagasse. Firewood is used only in some small industries and for domestic consumption in rural areas. Charcoal is used domestically and in blast furnaces and small steel mills. Sugar cane bagasse is used as fuel to produce steam for the processing of sugar. The above three fuels now contribute about a quarter of Brazil's energy but their usage is expected to remain stable and thus they will represent,a rapidly decreasing proportion of the total. 1.08 Other types of energy are of insignificant importance at the moment. Known reserves of natural gas are modest, the main producing fields and utili- zation being located in the Northeast. Few sites for tidal energy can be found along the Brazilian coast and there are no known sources of geothermal energy. Energy Use in the Southern and Southeastern Regions 1.09 The Southern region, with 18% of Brazil's population, accounted for about 12% of the total electric energy consumption of the country in 1976. The Southeastern region, with 42% of the country's population consumed 74% of the total electric energy in 1976. The two regions, where most of the country's economic and industrial activities are located have 60% of the population, and consumed in 1976 about 78% of all energy and 86% of electric energy. Electric energy consumption in the Southern region has grown at a rate of 15.2% p.a. in the last five years, while the annual consumption per capita was about 650 kWh in 1976. The region's consumption is expected to grow at an average rate of 12.7% p.a. through 1985 and the per capita consumption should reach 1,375 kWh by that year. In the Southeastern region, consumption has been growing at a rate of 11.2% p.a. in the last 5 years, and consumption per capita was about 1,650 kWh in 1976. Consumption there is expected to grow at 9.6% p.a. and per capita consumption is expected to reach 2,700 kWh in 1985. The Role of the Sector in the Economy 1.10 The provision of an adequate and reliable electric service is essential for the development of the country's industries, which in 1975 used 55% of all electric energy consumed while accounting for about 39% - 3 - of Brazil's GDP, contributing about 35% of export earnings and providing for about: 33% of all non-agricultural employment. The growth of the energy sector in general, and its rapidly growing power subsector in particular, have more than kept pace with Brazil's dynamic economic development. Since 1962 a very good correlation has existed between electric energy consumption and GDP; the rate of growth of electricity consumption was 1.2 times that of GDP for the period 1962-1975 while from 1970 to 1975, it was 1.28 times that of GDP. From 1974 through 1977, electricity consumption grew at about 12% p.a. while GDP grew at 7% p.a., reflecting a ratio of growth of electricity consump- tion to GDP growth of 1.7, and a trend for its substitution for other forms of energy. History of Bank Group Involvement with Sector 1.11 Since 1949, the Bank has made 30 loans to the Brazilian power sector, mostly for hydroelectric generation projects in the Southern and Southeastern regions. This lending has helped strengthen sector organization and planning, contributed to the building of efficient power enterprises and facilitated foreign capital inflows to the sector. Bank lending has assisted the Govern- ment in its efforts to maintain tariff policies that have enabled the sector to generate a substantial proportion of the funds needed to meet its invest- ment requirements. Project performance audit reports have been distributed to the Executive Directors on both power distribution 1/ and generation projects. 2/ These reports conclude that, despite delays and cost overruns in their execution, the projects supported by Bank loans were basically successful. 1.12 The Bank's most recent involvement in financing distribution invest- ment in Brazil was in the Northeast Power Distribution Project (Loan 1300-BR). That project consisted of the distribution program of three State-owned North- eastern utilities. The US$50 million loan was made to Centrais Eletricas Brasileiras S. A. (ELETROBRAS) and relent by that entity to the three utilities. Besides providing financial support, the project is helping strengthen the management and planning of the companies. 1.13 The proposed loan, which would be the second operation in the Bank with ELETROBRAS for the distribution subsector, would seek much the same objec- tives as the previous one with respect to the two smaller beneficiaries - Centrais Eletricas de Santa Catarina S. A. (CELESC) and Espirito Santo Centrais Eletricas S. A. (ESCELSA) - and would provide valuable financial support to the larger one - Centrais Eletricas de Minas Gerais S. A. (CEMIG). Sector Organization and Regulation 1.14 The Brazilian power sector, though large and complex, is well organized and its policies are well designed and implemented. The legal, technical and 1/ Loans 475/476/477/478-BR (Sec M 75-646 of September 4, 1975). 2/ Loan 404-BR (Sec M 77-532 of June 28, 1977); Loans 442-BR and 566-BR (Sec M 78-34 of January 13, 1978). -4- administrative foundations of the present sector organization were established by Decree 68,204 dated June 7, 1967. According to this degree, the structure consists of the National Department of Water and Electric Energy (DNAEE), ELETROBRAS and the various federal, state, municipal and private concessionaires all under the jurisdiction of the Ministry of Mines and Energy (MME). 1.15 DNAEE performs the regulatory functions. It is a powerful instru- ment for implementation of national policy as it grants licenses for hydro- electric sites, assigns concession areas, sets tariffs and approves expansion plans. However, until recently DNAEE had played a relatively passive role. In February 1974, through a Ministerial decision, the structure of DNAEE was expanded for the purposes of allowing it to take a more aggressive and posi- tive regulatory role. The principal responsibilities of DNAEE remain the same but the specific activities undertaken by it in meeting those responsi- bilities have now been considerably enhanced. Some positive results are already in evidence through its efforts to promote operating and administrative efficiency wbhen determining which operating costs are recognized as such for tariff-setting purposes. 1.16 ELETROBRAS (see paras. 2.01-2.09) performs the function of: (a) a holding company for those utilities in which the Federal Government has acquired financial control, (b) a financial institution administering and allocating public funds among its subsidiaries and electric utilities owned by state governments and coordinating sector borrowings from abroad, and (c) a coordi- nating and consulting group with planning functions which assists the develop- ment of the country's electrification programs by providing technical, managerial and training services. 1.17 In accordance with government policy, the construction and operation of the majority of new power generation facilities is entrusted to ELETROBRAS' four principal subsidiaries. These bulk suppliers are Centrais Eletricas do Norte do Brasil (ELETRONORTE) covering the North and part of the Center-West; Companhia Hidro Eletrica do Sa'o Francisco (CHESF) covering the Northeast; Furnas - Centrais Eletricas (FURNAS) covering the Southeast and part of the Center-West; and Centrais Eletricas do Sul do Brasil (ELETROSUL) covering the South. A joint Brazilian-Paraguayan entity, Itaipu Binacional, is responsible for the Itaipu hydroelectric project located on the Parana river on the border with Paraguay. 1.18 The transmission function in Brazil is presently shared between the federally-owned bulk suppliers and state-owned utilities. Extra high voltage transmission (500 kV and above) is for the most part the responsi- bility of the federal utilities, medium voltage subtransmission (69 to 138 kV) is largely handled by the state utilities, while responsibility for high voltage transmission (230 kV) is shared. 1.19 To maximize the economic benefits to the country from operation of the generating and transmission facilities and to attain the maximum operating and financial efficiency for the system as a whole, the Federal Government established in November 1973, regional coordinating groups (Grupos Coordenadores para Operapgo I5~tegaa-GCOI), in which ELETROBRAS and the operating utilities participate. The GCOI were charged with coordinating and directing the operations of the individual generating plants and transmission systems. There are now two such groups: a large and very well organized group for the Southeastern and Southern regions (which has become very successful in directing the operations of the interconnected system) and a smaller group for the Northeastern region. 1.20 In accordance with government policy, the power distribution function at the state level is carried out mainly by utilities controlled by the state governments. In line with this policy, there have been in recent years a number of acquisitions and mergers of smaller municipally- and privately-owned distribution companies by state-owned utilities as well as transfers to them of some of ELETROBRAS' subsidiaries engaged in distribution. Today, with the exception of the Rio de Janeiro and SaEo Paulo areas which are served principally by Light - Servi;os de Eletricidade, S. A. (LIGHT), a privately-owned enterprise, most of the power distribution is made through one company in each state. The main distribution companies (those with annual sales over 500 GWh p.a.) are: CESP and CPFL in SAo Paulo, CEMIG (Minas Gerais), LIGHT (Rio de Janeiro and Sao Paulo), ESCELSA (Espirito Santo), CBEE/CELF (Rio de Janeiro), CELG (Goias) and CEB (Brasilia) in the Southeastern region; COPEL (Parana), CELESC (Santa Catarina) and CEEE (Rio Grande do Sul) in the Southern region; CELPA (Para) in the Northern region; and COELBA (Bahia), COELCE (Ceara) and CELPE (Pernambuco) in the Northeastern region. Power Tariffs 1.21 Bills rendered to consumers of electricity include the following charges: A. The basic tariffs (shown in Annex B, T-1 for CEMIG, CELESC and ESCELSA). On a nation-wide basis, basic tariffs provide 77% of the revenues collected from consumers. According to law, these basic charges should be set at levels which cover: (a) operating, maintenance and administrative expenses; (b) taxes other than on income (mainly property taxes); (c) foreign exchange losses arising from the service of borrowings in foreign exchange; (d) straight line depreciation of estimated average gross fixed assets in operation (land excluded); (e) reversion, which is a tax levied by the Federal Government of up to 5% of assets in operation to secure funds to: (i) lend to the concessionaries for expansion of their respective services; (ii) compensate private concessionaires for the purchase of assets; and (iii) finance the Global Guarantee Fund (para. 1.22); (f) a legal return (normally between 10 and 12%) on remunerable investment. The latter consists of net average utility plant in service plus an allowance for working capital. - 6 - B. The sole tax (imposto unico) on residential and commercial electricity consumption, which provides 12% of the revenues, imposed since 1954 at different rates for different levels of consumption and types of consumers to provide additional financial resources to the sector. 40% of the proceeds from this tax goes to Federal agencies (ELETROBRAS, DNAEE, MME and the NDF), 50% to the states and federal district, and 10% to the municipalities; and C. The Compulsory Loan (10% of the revenues), which is a forced investment scheme through which industrial consumers with mofthlly consumption in excess of 2,000 kWh are required to purchase ELETROBRAS' 20-year, 6% interest bearing bonds which are subject to monetary correction. 1.22 ic-, 1973, the tariff authorities began implementing a government policy intenided to reduce regional inequalities and to promote geographically balanced economic growth. In 1976, the average tariff level to final con- sumers was equalized for the whole country, with minor exceptions. Thus, returns on remunerable assets for the utilities with relatively higher costs may be below the 10% minumum established by law. The Global Guarantee Fund is a redistributive mechanism established to harmonize the rate equalization effort with the service at cost principle. It is financed by a surcharge of up to 2% on assets in operation of the financially more efficient utilities (those earning more than the maximum allowed to them by DNAEE). These funds are then channelled to those utilities which achieve a return of less than 10% in order to compensate for their shortfalls. 1.23 The beneficiaries have agreed to maintaining their earnings (includ- ing transfers from the Global Guarantee Fund) at levels consistent with sound financial and public utility practices and in accordance with existing legislation. They have also agreed that, in the event they require transfers from the Fund, they will attain targets established by DNAEE. The Federal Governmernt has agreed that DNAEE will take timely action on the beneficiaries' requests for tariff adjustment and transfers. Finally, the Federal Government has confirmed the Bank's understanding that DNAEE will exercise its statutory powers to adllow the beneficiaries a return on remunerable assets of at least 10%. Any change in legislation which would materially and adversely affect the beneficiaries' financial position, would be an event of default. 1.24 The tariff levels dictated by the system summarized in the preceeding paragraphs, have up to now been adequate for allowing a reasonable return on invested capital and sector contributions to capital investments. The ques- tion whether this will continue to be so in the future is currently under study by DNAEE (para. 1.36). Several characteristics of present tariff structures, such as the lack of differentiation between consumption during peak and off-peak hours, and the rate equalization effort require examination. The tariff structure does contain generally desirable features such as separate demand and energy charges for industrial and commercial consumers, discounts to encourage large industrial consumers to accept supply at higher voltages, and a special treatment for low income consumers based on social considera- tions. A study is now being undertaken under the direction of DNAEE, with - 7 - assistaince from Electricite de France to analyze, inter alia, the above features and to provide additional information for evaluating the economic impact of pricing policy. Under Loan 1300-BR. the Government agreed to present the results of this study (expected to be completed by mid-1979) to the :Bank. Electricity Consumption 1.25 Electricity consumption is linked with essential economic activity in the country; consumption by industry, which accounted for about 57% of the total in 1977 is the fastest growing category. Below is a summary of elec- tricity consumption since 1965: GWh ~ l REGION 1965 1970 1975 1976 1977-/- - GWh Category of Consumer NORTH Residential 64 137 279 315 349 30 Commercial 27 80 186 280 284 24 Industrial 36 68 337 294 267 23 Others 33 61 196 250 274 23 Total 160 346 998 1,139 1,174 100 NORTHEAST Residential 432 868 1,431 1,610 1,674 19 Commercial 201 453 852 940 1,072 13 Industrial 725 1,552 4,227 5,009 5,985 54 Others 308 532 - 1,090 1,260 1,276 14 Total 1,666 3,405 7,600 8,819 10,007 100 SOUTHEAST AND CENTER WEST Residential 4,058 6,470 10,133 10,884 11,799 20 Commercial 2,677 4,116 6,693 7,425 8,168 13 Industrial 9,656 16,228 28,720 33,318 32,941 56 Others 2,654 3,693 6,238 6,543 7,164 22 Total 19,045 30,507 51,784 58,170 60,072 100 SOUTH Residential 612 1,047 1,793 1,960 2,030 22 Commercial 352 638 1,422 1,500 1,560 16 Industrial 1,119 1,764 3,637 4,823 4,728 48 Others 361 603 1,015 1,220 1,420 14 Total 2,444 4,052 7,867 9,503 9,738 100 ALL BRAZIL Residential 5,166 8,522 13,636 14,769 16,983 19 Commercial 3,257 5,287 9,153 10,145 10,590 12 Industrial 11,536 19,612 36,921 43,444 49,529 57 Others 3,356 4,889 8,539 9,273 10,214 12 Total 23,315 38,310 68,249 77,631 87,316 100 a/ Preliminary figures. b/ Regional figures refer to the largest utilities in each region - 23 for the countly - which accounted for about 97% of all sales of electricity and about 92% of all consumption. -8- Existing Fac:ilities 1.26 Total installed generating capacity as of the end of 1976 was about 21,80(0M__, of which 84% or 18,400 MW was hydro. In 1975, 95% of the total installed capacity was devoted to the public service. The following table indicates the existing capacity in the country by type and by ownership: PUBLIC SERVICE SELF-PRODUCERS TYPE ELETROBRAS' State and subsidiaries Municipal Private Hydro Thermal X of Z of Z of xof Total X of % of Year MW Total 2W Total MW Total MW Total MW MW Total MW Total 1965 ------------------------- not available ------------------------ 7,411 5,391 72 2,020 28 1970 3,812 34 4,138 38 2,333 21 950 8 11,233 8,828 78 2,405 22 1975 7,629 39 8,594 44 2,333 12 1,022 5 19,578 16,193 82 3,385 18 1976 9,034 41 8,692 40 2,119 10 1,951 9 21,796 18,411 84 3,385 16 1977'1/ ----------------------- not available ------------------ - ---- 22,797 19,198 84 3,599 16 Of the 3,385 MW of thermal generating capacity in 1976, 34% is oil-fired steam units, 51% is diesel and the remainder (15%) is coal-fired steam units. 1.27 The transmission system consists of about 25,000 km of lines at 230 kV and above, linking power stations and load centers as well as the systems of various utilities. Interregional transfers are, as yet, limited. The following table illustrates the development of the transmission systems over the last years. (in circuit km) 1970 1971 1972 1973 1974 1975 1976 230 kV 11,316 11,429 11,493 12,005 12,725 13,409 14,714 345 kV 2,681 3,300 3,456 4,081 4,431 4,962 5,301 440 kV 1,096 1,096 1,096 2,329 2,708 2,982 3,225 500 kV - 360 360 1,693 TOTAL 15,093 15,825 16,045 18,415 ?n,224 21,713 24,933 a/ Prelimi.nary figures. 9- Access to Service 1.28 It is estimated that virtually 100% of the urban population of the country has access to electric service while some 80% of the total urban population in Brazil and about 87% of the urban population of the Southern and Southeastern regions are actually receiving electric service. Service in rural areas (with 41% of the total population) appears to be extremely low, judging from partial data from the Northeastern region in which 98% of the farmers and a large proportion of the villages are without electricity. The Government expects to further increase the provision of electric service both in urban and rural areas. The proposed programs of the beneficiaries would directly assist the implementation of this policy by expanding the capacity of lines and substa- tions that would feed rural areas and low income urban areas (see paras. 4.07 and 4.08). Rural Electrification 1.29 Rural electrification on a national level was started in 1970 when the Instituto Nacional de Colonizacao e Reforma Agraria, a self-governing agency attached to the Ministry of Agriculture, was made responsible for the planning, promotion and control of rural electrification. Progress, however, was slow (4 to 5 thousand customers/year) and in 1974, ELETROBRAS created a rural electrification department to complement the activities carried out by the Ministry of Agriculture. ELETROBRAS' approach to rural electrification has been that of financing distribution networks in rural areas close to existing lines. It does not finance household wiring or connection fees. ELETROBRAS provides 50-80% of the cost of individual rural electrification projects (the overall average for 1976 was 58%), with the rest being supplied by the utilities. ELETROBRAS' loan terms are 15 years, including 5 years grace, and 12% interest on the principal (which is not subject to monetary correction). 1.30 About 17,000 rural customers (defined as rural cooperatives, or agricultural or agro-industrial producers) were connected in 1976 through ELETROBRAS-assisted programs, with a total cost of about US$40million. Of these new customers, 5826 were located in the Southeastern region and 7856 in the Southern region. Over the period 1978-1980, ELETROBRAS expects to participate in projects costing a total of about US$540 million, or close to half of the total planned investments for distribution and connect about 200,000 rural consumers. About 1% of these connections would be in the North, 15% in the Northeast, 50% in the Southeast, 29% in the South and 5% in the Center West. Sector Investment Program 1.31 Power sector investments for 1971-75 (actual) and for 1976-80 (projected) are shown as follows: - 10 - (in 106Cr$ - mid-1975 prices) 1971-1975 1976-1980 % of % of Cr$ Total Cr$ Total Generation 46,267 56 78,373 53 Transmission 20,339 25 44,579 30 Distribution 10,596 13 15,537 11 Administration 4,888 6 8,839 6 Total 82,090 lOO 147,328 100 1.32 An increasing proportion of investments are being carried out at the federat level, through ELETROBRAS and its subsidiaries, as illustrated below (in 10 Cr$ at mid-1975 prices). 1970 (actual) 1975 (actual) 1980 Entity Cr$ _ Cr$ % Cr$ % Federal level 2,954 31 8,903 42 15,516 64 State leveL 5,662 59 10,085 48 5,780 24 Others 944 10 2,012 10 2,870 12 Total 9,560 100 21,000 100 24,166 100 Sector Manrower 1.33 In general, the sector is well staffed with qualified persons in responsible positions. 126,638 persons were employed in the sector at the end of 1976, of which 67,893 (54%) were in the Southeastern region and 22,641 (18%) in the Southern region. Training and development of the staff, at all levels, is accomplished by ELETROBRAS and the utilities in 27 training centers. About US$12 million were spent to train 41,000 people (32% of the total employees of the sector) in 1976. The training programs have been judged by the Bank to be comprehensive, well-managed and effective. Through a US$15.4 million program (of which US$4.3 million is being financed by the Bank under Loan 1343-BR), ELETROBRAS expects to meet the advanced, specialized training requirements of the sector during the next four years. Constraints on Sector Development 1.34 There are no organizational constraints that might impede sector development. The high level of investment required in the power sector, about 8 to 9% of gross capital formation, and the Government's present policy of limiting public sector investment as a part of its program to control inflation, may result in insufficient availability of funds in the future. The proposed master plan (para. 2.09) should reveal any problems in this area in time for corrective action to be taken. - 11 - 1.35 The Government has been moving away from the previous automatic reinvestment in the power sector of funds generated by the sector. A growing proportion of sector funds are now channelled through the National Development Fund (NDF). The NDF mechanism is potentially effective in assisting the Federal Government to exercise control over sectoral investment programs. However, for the power sector, the NDF implies a curtailment of ELETROBRAS' role in allocating resources. Since the sector's net cash generation is unlikely to exceed its minimum net financial requirements (at least through completion of Itaipu in the late 1980s), NDF's intervention may simply result in additional administrative complications. Any constraints for the power sector, however, are likely to be offset by the benefits obtained in the economy as a whole as a result of the discipline associated with NDF review of investments. 1.36 More serious constraints could originate in the long run from the inability of key utilities (including CEMIG, one of the beneficiaries of the proposed project) to generate sufficient funds internally to make a reasonable contribution to the financing of their expansion programs. This concern has prompted DNAEE to undertake a review of sector financial requirements and the adequacy of tariff levels. This stua !`r9-trently under way, together with a review of tariff structure previously agreed with the Bank (para. 1.24). DNAEE intends to present the results of its review (including a financial forecast for the sector as a whole through 1985) to the Bank by December 30, 1979. l- ' V - I -t ~ ' . - .,- ^,s ,( I - 12 - CHAPTER 2 THE BORROWER AND THE BENEFICIARIES The Borrower 2.01 T'he borrower is ELETROBRAS (paras. 1.14, 1.16), an open stock corporation established in 1961 and almost entirely (99.6% as of December 31, 1976) owned by the Federal Government. 2.02 ELETROBRAS acts as the Government's financing agency for the electric power sector in Brazil and may be compared to a development bank in allocat- ing and channelling the funds necessary to support the sector's growth. It channels funds to various parts of the sector by means of loans, investment in additional shares of common stock of the recipients and direct grants. In allocating funds, ELETROBRAS maintains tight financial and technical control and borrowers are required to present detailed financial and engineering information on any project for which financing is sought. 2.03 E:LETROBRAS' role in the project consists of coordinating its devel- opment locally, and serving as a channel for on-lending the proceeds of the proposed Bank loan to the beneficiaries. ELETROBRAS has also agreed to review on a regular basis progress of the project during construction and start of operations and on the beneficiaries' performance and submit reports to the Bank every six months. ELETROBRAS would provide part of the local currency financing for the project through its normal loan and equity channels. 2.04 The proposed Bank loan of US$130 million is not large in relation to ELETROBRAS' total gross assets, which at year-end 1976 amounted to about Cr$67 billion (US$5.4 billion). Since the financial appraisal shows that the beneficiiaries will be in a generally sound condition and should not encounter diLfficulty in servicing their portion of the proposed loan, it was not considered necessary, as under loan 1300-BR, to conduct an appraisal of ELETROBRAS' future finances. ELETROBRAS' financial statements are summarized in Annex A. As shown therein, ELETROBRAS' outstanding capital amounted to Cr$22 billion at year-end 1976. Its resources consist of net internal cash generation (dividends received, interest on its loan portfolio, loan amortization receipts and miscellaneous other income, less debt service and less net dividend payments) which in the period 1971-76 averaged 34% of total resources; sole tax (para. 1.21), 8%; reversion reserve (para. 1.21), 22%; compulsory loans (para. 1.21), 21%; federal budgetary appropriations, 3%; and borrowings, 12%. Outstanding long term borrowings (45% of long-term capitalization) at year-end 1976 totalled Cr$ 28.3 billion (about US$2.3 billion equivalent), of which 40% was in the form of debentures arising from the compulsory loans, 29% represented reversion accruals to the Federal Government, 20% came from foreign borrowings (IDB, bilateral agencies, commercial banks and utility holding companies) and 11% from domestic loans. ELETROBRAS' large and growing sources of funds constitute a broad base for expanding its borrowings, and it is becoming increasingly active in foreign financial markets. - 13 - 2.05 ELETROBRAS is managed by a Board and an Executive Directorate. The Board is composed of a Chairman appointed by the President of the Republic, five Directors and two to four Advisers appointed by the Shareholders'General Assembly for a three-year term, and two Advisers appointed by those share- holders which are also legal entities. The Executive Directorate is composed of the Chairman and five Directors. The Board has been entrusted with the responsibility for devising fundamental policies. The Executive Directorate has all top-level management functions according to the Board's general guide- lines. 2.06 In its role as the planning and coordinating agency for the electric power sector, ELETROBRAS is responsible for carrying out the policy established by the MME for the sector's long-term development. In this role ELETROBRAS is also involved in coordinating regional development plans and undertaking studies for joint development projects with neighboring countries. 2.07 In establishing development plans ELETROBRAS relies principally on five-year budgets which it prepares in conjunction with other sector entities. These budgets have the purpose of assisting ELETROBRAS and the Government in selecting those projects which will meet projected power demand and in providing adequate financial support. The budgets are updated and revised annually; however ELETROBRAS has not been entirely successful in this function and the 1976-1981 budget was not issued until December 1977. 2.08 ELETROBRAS has built up a large, competent organization with a staff of about 1,600. Through the leverage obtained from its financing role, ELETROBRAS has been able to supervise operations of the utilities for economical and orderly sector growth. Among its coordinating responsibilities, ELETROBRAS assists in the transfer of hydroelectric power among the country's regions to minimize operation of thermal Sants, and will gradually increase its involve- ment in power allocation between'''utilities as the national grid system becomes fully developed by the mid-eighties. 2.09 With the expected completion of the interconnection of the South, Southeast, North and Northeast in the early-eighties, inter-regional transfers would take place throughout almost the entire country. This requires that the development of the country's power sources and the system expansion plans be based on an integrated perspective of the country's long-term power require- ments and available power resources. Such an overall country analysis would enable power sector expansion plans to be based on the least cost alternative program. Moreover, such an analysis should examine a 20 to 25-year horizon. Present planning methods, while reasonably satisfactory for the relatively short-term regional exercises conducted in the past (covering 11 years in the case of the South-Southeast and 6 years in that of the Northeast) are not suitable to meet the need outlined above. The Bank has offered to assist ELETROBRAS in developing improved planning methods. ELETROBRAS has indicated that by December 31, 1979 it will prepare a master plan for power sector expansion for the whole country through the year 2000. ELETROBRAS would ex- change views with the Bank regarding the methodology, scope of work and terms of reference to be followed in such planning and would make available the plan to the Bank as and when needed in support of the appraisal of future power projects in Brazil. - 14 - The Beneficiaries Centrais Eletricas de Minas Gerais S. A. (CEMIG) 2.10 CEMIG was created on May 22, 1952 and is governed by Minas Gerais State Law No. 828 of December 14, 1951. CEMIG is managed by its ten member- Board elected by the Shareholders' meeting for a 3 year period. The Executive Directorate, composed of seven directors, is appointed by the Shareholders' Meeting for a 3 year period; the meeting also chooses from among the Executive Directors, one President and two Vice Presidents. The President is the Chief Executive Officer. The organizational structure shown in Annex B, C-1 is well designed and the company is capably staffed. CEMIG's staff numbers 8600 and staff relations are good. The utility serves 1.1 million customers (about 131 customers per employee which is adequate considering the characteristics of its service area). CEMIG's paid in capital as of December 31, 1976 amounted to Cr$4.1 billion of which 68% was owned by the State of Minas Gerais, 16% by ELETROBRAS and 16% by others (mostly private shareholders). 2.11 CEMIG has received four previous Bank loans for a total of US$142.9 million equivalent. The first three projects have been completed; the two most important of these, the Jaguara and the Volta Grande hydroelectric schemes, for which the Bank made loans in 1966 and 1968, were completed 5-1/2 years and nine months, respectively, later than the appraisal estimate, with cost over- runs amounting to US$61.4 million equivalent (68% of appraisal estimate) and US$123.6 million equivalent (130% of appraisal estimate), respectively. The cost overruns were due to local and foreign costs higher than expected at appraisal which resulted from foundation problems, inflation and increasing lag between rising local construction costs and exchange rate readjustments. The fourth (the 1,000 MW SaTo Simao hydroelectric project, financed under loan 829-BR of June 14, 1972) is well advanced and the first units have started oper- ation about three months before the date estimated at the time of appraisal. Costs, now estimated at about US$750 million, are about 90% over the appraisal estimate of US$396 million, due mostly to higher than expected inflation, although changes in the number and size of the units and more excavation than expected have also contributed to the overrun. The overruns did not affect the feasibility of the projects as fuel prices increased even more than the projects. 2.12 CEMIG has established a fully owned subsidiary - Eletrificapao Rural de Minas Gerais, S. A. (ERMIG) with a paid-in capital, as of the end of 1976, of Cr$ 80.4 million. Its purpose is to build rural electrification facilities financed by state rural cooperatives and other rural customers; once the facilities are built, operating responsibilities are sometimes entrusted to ERMIG under contracts with the cooperatives. Training 2.13 CEMIG maintains a training center considered as one of the best in the Latin American and Caribbean region. It provides training in the areas of operation and maintenance of electrical systems to medium-level technical personnel of CEMIG's own staff and to staff from other Brazilian electricity companies. CEMIG's annual training expenditures amounted to Cr$ 21 million in 1976, 3.5% of annual gross payroll. - 15 - Management Systems 2.14 CEMIG has very sophisticated financial systems for planning and budgeting purposes. Annual budgets are prepared by the Financial Planning Department which puts together all budgets and financial forecasts and pro- jections, all of which are updated periodically. Management reports are satisfactory. Accounting and Audit 2.15 CEMIG's accounting system is satisfactory and well suited to the utility's needs. Internal control functions are vested in the Internal Audit Department which reports to the Financial Director. This arrangement, while unusual, functions very well for CEMIG. Internal Audit carries out an adequate program of financial and operational audits and follow-up on past recommenda- tions. 2.16 CEMIG employs as its external auditors the international accounting firm Arthur Andersen and Co., which is acceptable to the Bank. In addition, the Fiscal Council, appointed by the Shareholders' Meeting, carries out external control duties in accordance with Brazilian legislation. Billings and Collections 2.17 CEMIG's billings are carried out by its data processing system, and collections by the banking system. In case of non-payment, the service is suspended between 15 and 30 days after due date; the suspension is triggered by a control system which signals the date at which suspension of service becomes economical; actual enforcement is very good. Risk Management 2.18 CEMIG's assets have been insured against most common risks such as fire, accident and civil liability, in accordance with accepted public utility practices. Insurance is well administered. Centrais Eletricas de Santa Catarina S.A. (CELESC) 2.19 CELESC was created on December 9, 1955, by Santa Catarina State Decree No. 22. The company is managed by the General Assembly which appoints, for a four year period, a Directorate composed of a President and four Directors and which is in charge of the day-to-day management functions; responsibility for objectives, policies, organization and direction of the company is vested in the President. CELESC has about 3900 employees and serves about 420,000 customers (a ratio of 107 customers per employee which is adequate considering the characteristics of its service area). 2.20 The organizational structure (shown in Annex B, C-2) is well designed. However, the company lacks effective coordination between departments and has agreed to engage satisfactory consultants, under terms of reference acceptable to the Bank, to make recommendations by June 30, 1979, for improving coordi- nation as well as reporting, budgeting (para. 2.23), auditing, accounting (para 2.24) and assisting in training (para. 2.22). CELESC has agreed to present to - 16 - the Bank by June 30, 1979 the consultants' recommendations and CELESC's proposal for their implementation. CELESC should implement such of its consultant's recommendations as shall be acceptable to the Bank and to GELESC in accordance with a timeitable to be agreed with the Bank. The engagement of these consult- ants is a condition of disbursement of CELESC's portion of the loan. 2.21 CELESC's paid-in capital as of December 31, 1976 amounted to Cr$617 million of which 80% was owned by the Government of the State of Santa Catarina and its agencies, 14% by ELETROBRAS, 3% by the municipalities and 3% by private shareholders. Training 2.22 CELESC maintains a training center for technical personnel in operation and maintenance of electrical systems; it also provides training for similar personnel from other Brazilian electricity companies. It has recently lost several key members of its professional staff and is actively recruiting new staff. It has, however, been forced to assign to these new staff members responsibilities beyond their capabilities. It has agreed to prepare with the assistance of the consultants mentioned in para. 2.20, by June 30, 1979, a training program for its professional staff to enable it to adequately carry out its tasks, and to implement such program as agreed with the Bank. Management Systems 2.23 CELESC's management systems are weak. An annual operating budgeting system has recently been designed and is in the process of implementation; although the. system design appears adequate for the company's needs, its operation lacks the necessary basic managerial orientation. Financial fore- casts and projections are prepared without much regard for coordination among the various areas that should be involved in the process. CELESC's reporting system is weak and top management is inadequately apprised of developments in most areas. To at least partly compensate for this deficiency and mainly to improve communications, management has recently started a program of executive meetings at various levels. The organizational consultants to be contracted are also expected to make recommendations regarding the reporting system and budgeting controls. Accounting and Audit 2.24 Accounting is discharged without the proper coordination with the needs of other departments of the utility and without the required knowledge of existing sector rules and regulations. Internal audit, which reports directly to the President of the company, is weak. The organizational consultants to be contracted should also make recommendations regarding accounting and auditing. The external auditors' report on internal control points to a large number of trouble spots, some at the policy level. CELESC's accounts have been audited by the firm of independent accountants MABAL, which are acceptable to the Bank, and, in addition, in accordance with Brazilian legislation, external control duties are carried out by the Fiscal Council, appointed by the Shareholders' Meeting. - 17 - Billing and Collections 2.25 CELESC's procedures in this area are appropriate to the utility's needs; reporting on billings and collections is adequate. Collection is carried out through the banking system. Risk Management 2.26 CELESC has insured its assets against most common risks such as fire, accident and civil liability, in accordance with accepted public utility practices. Insurance is well administered. Espirito Santo Centrais Eletricas S.A. (ESCELSA) 2.27 ESCELSA was created in July 1, 1968, by merger of Companhia Central Brasileira de Forqa Eletrica (CCBFE), previously acquired by ELETROBRAS from American Foreign Power, with Espirito Santo Centrais Eletricas S.A. - ESCELSA, the state-owned utility. The company is managed by a Board of Directors appointed for a 3 year period by the Shareholders' Assembly; the Board is composed of a President and five Directors who are in charge of the day-to-day operations of the company. ESCELSA has about 1800 employees and serves 174,000 customers (87 customers per employee which is adequate considering the charac- teristics of its service area). 2.28 The organizational structure (shown in Annex B, C-3) is well designed. However, the company lacks effective coordination between departments and would engage satisfactory consultants, under terms of reference acceptable to the Bank to make recommendations by June 30, 1979, for improving coordi- nation as well as budgeting (para. 2.31), accounting and auditing (Para. 2.32), and assisting in training (para. 2.30). ESCELSA has agreed to present to the Bank by June 30, 1979 the consultants recommendations and ESCELSA's proposal for their implementation. ESCELSA should implement such of its consultant's recom- mendations as shall be acceptable to the Bank and to ESCELSA in accordance with a timetable to be agreed with the Bank. The engagement of these consultants is a condition of disbursement of ESCELSA's portion of the loan. 2.29 ESCELSA's paid in capital as of December 31, 1976, amounted to Cr$488 million of which 92% were owned by ELETROBRAS, 6% by the Government of the State of Espirito Santo, and 2% by the municipalities and other minority shareholders. Training 2.30 ESCELSA does not have a training center of its own but it provides, internally as well as externally, courses in the technical and administrative areas. It does not have enough qualified, experienced professional staff and is actively recruiting new staff. It has, therefore, been forced to assign to staff members responsibilities beyond their capabilities. It has agreed to prepare with the assistance of the consultants mentioned in para. 2.28, by June 30, 1979 a training program for its professional staff to enable it to adequately carry out its tasks, and to implement such programs as agreed with the Bank. - 18 - Management Systems 2.31 1'reparation and control of ESCELSA's annual budgets are entrusted to the Economic-Financial Directorate. The budgeting system has been improved over the lEast several years but further improvements are required. Financial forecasting is new to ESCELSA and the company should improve its staff's knowledg of the available techniques. The organization consultants should also make recor mendations concerning budgeting and financial forecasting (para. 2.28). Accounting and Audit 2.32 ESCELSA's Internal Auditor, who reports directly to the President, is currently developing appropriate auditing programs and manuals. The internal control report of the external auditors calls the attention to deficiencies in the accounting and internal control systems and the organi- zational consultants to be contracted should also make recommendations regarding accounting and auditing (para. 2.28). 2.33 IESCELSA contracts the services of the independent external audit- ing firm Boucinhas, Campos, Claro S/C Ltda., which are acceptable to the Bank. In addition, because of the Federal Government's interests (through ELETROBRAS) in ESCELSA, the Tribunal de Contas da Uniao of the Ministry of Mines and Elnergy carries out periodic audits of ESCELSA's accounts. The Fiscal Council appointed by the Shareholders' Meeting, also carries out external control duties in accordance with Brazilian legislation. Billings and Collections 2.34 ESCELSA's billings and collections seem very efficient since the company has less than 40 days' billings outstanding. Some of the meters are read by an outside company; collections are carried out through the banking system. After ten days' delay in payment of bills, ESCELSA starts charging penalty interest. Risk Management 2.35 ESCELSA insures its assets against most common risks such as fire, accident and civil liability, in accordance with accepted public utility practices. The utility hires the risk management consulting services of Servicos Tecnicos de Levantamento e Inspecao Ltda (SERTEC), a privately-owned consulting company. In accordance with Brazilian Government practices, ESCELSA insures its assets with the insurance company designated annually, by drawing, by the Instituto do Reaseguros do Brasil (IRB), the Brazilian Govern- ment agency which regulates insurance. - 19 - CHAPTER 3 THE MARKET AND THE MEANS TO MEET IT Historical Market 3.01 Public-service electricity consumption in the areas served by CEMIG, CELESC and ESCELSA grew at an average annual rate of about 14, 23 and 22%, respectively, during the period 1972-1976. The growth in the average consump- tion per customer was about 6, 11 and 7% and in the number of customers, about 8, 12 and 14%. As may be seen in Table 3-1, the power market of all three companies has been increasingly dominated by the industrial market (76, 59 and 67% of all sales to the ultimate consumers in 1976, up from 72, 52 and 61% in 1972). The Forecast 3.02 The forecast of energy sales to the industrial sector is based on a detailed analysis made by the companies and reviewed by ELETROBRAS, regarding the status of implementation of major industrial projects. In most cases, these major industries commit themselves contractually to purchase energy by a certain date, or pay demand charges even if their need for power is post- poned. The utilities' analyses cover both these firmly committed loads and other, generally smaller prospective customers. All three companies update their analyses periodically and generally keep abreast of events which may affect their forecasts. The lesser industries as well as the residential, rural and commercial sectors have been forecast on the basis of the recent trends. The resulting forecasts (Table 3-1) indicate that the three power markets will maintain high average growth rates through the project con- struction period. The average annual rate of growth of sales from 1976 to 1982 is forecast to be 16.5% for CEMIG, 17.3% for CELESC and 29% for ESCELSA. 3.03 The 1978-1981 construction program of the three beneficiaries, of which the project is part, would be instrumental in increasing both the absolute and relative numbers of households served with public service elec- tricity. It is expected that the emphasis placed on connecting low income consumers (see para. 4.07) will contribute to achieving this goal (See Annex B, T-2). The Energy and Capacity Balance 3.04 The requirements for electricity generation by the beneficiaries and energy purchases by them from FURNAS and ELETROSUL, the regional bulk-suppliers, have been forecast under the assumption that the beneficiaries would be able to maintain their losses and unaccounted-for usage of electricity at their present value of about 9% or less. The three utilities would be capable of meeting their energy and power requirements on the basis of their own plants plus purchases from FURNAS or ELETROSUL under average hydrological conditions (see Annex B, T-3 and T-4). Both bulk suppliers are aware of the projected demands by their customers and are willing to enter into contractual arrange- ments to supply their requirements. However, the capacity of FURNAS and - 20 - ELETROSUL to meet their contractual commitments or of the utilities to increase their purchases from these suppliers or neighboring utilities depends upon the combined behavior of the system which serves the Southern and Southeastern region of the country and which are expected to be fully interconnected by 1981. It is therefore necessary to analyze the system's requirements and avail- abilities as a whole. ELETROBRAS, jointly with all of the utilities operating in the region, performed this analysis (see Annex B, T-5) in early 1977 on the basis of late 1976 projections. In the case of CEMIG, CELESC and ESCELSA, these are between 11 and 15% higher than those resulting from the present forecast (Table 3-1). It may be seen that if generating stations now under construction are not unreasonably delayed, the system will, in general, be capable of supply- ing the requirements throughout the project construction period even under ad- verse hydrological conditions. It may also be seen that if Itaipu and/or the next unit at: Angra are delayed and if adverse hydrological conditions occur in 1982 or 1983, there may be curtailments in the supply. This analysis, however, is somewhat outdated as after these studies were carried out, a new, lower energy requirements forecast has been prepared and the installation program for new generating units has changed (i.e., CEMIG now plans to install Nova Ponte and Igarapava - para. 4.03 - and Salto da Divisa and Itapebi have been postponed beyond 1987). ELETROBRAS is currently making a new analysis based on the revised forecast and program. ELETROBRAS and the utilities normally review and update these studies every year and are thus likely to anticipate the possible conse- quences of a coincidence of delays and adverse hydrological conditions so that they may mitigate the effects of such occurrences. - 2 1 - A14811 j-1 Act-al sad Forecas Powe Market k7'41_______(E-t.)7- __________ >m 7cT A'a2A-3E GROWT (0) 192 93 I4917 9617 9911917911982 1976/1971 , 4 I. 01010 (0*C)WO 0 .t 4 41 A6 tElilo: ~~~~~~~~~~~~~~~~~697.2 13.0 750.5 13.0 818.5 11.4 9C2. 11ii 103~. 5 11.C10187.0 11.3 1514.3 10.7 1453.0, -9 154994 9. 1772. r 9. 71911t.q 85 10.5 10.5 ooeoeoliis! ~~~~~~~~~~~ ~~~~661.9 12.6 717.1 12.4 829.2 12.6 920. 8, P1> 1107.1 11.5 50881 1 0,5 -1230 6. 10.0 13-5.1 ' 547.9~ 1704 3 9.5 18a4.o 5.1 1o.6 io.0 Io!byo 3704.0 72. 51207.0( 712.7 4868.c 73.7 568o 3 745 o762.9 (71 28734.2 '~4 401' 7 77.-4 11590. 70, o 1m1, 2~ :4 91.53 es137 BO,1 15.6 17.3 R-1~~~~~~~~~ ~97 07 5. a 1.7 o9 57.4 1 o 543 1.6 7. 09 7.5 .6.6C.6 101.1 0 6 6 . 0. 134.3 069.4 16.5 Dther 66.6 1.3 64.o 1.1 35.9 0.5 61.5 0) o~ 60.6 0.7 103.3 1.2 1574q 1.5 i 4r1. 0 , 169.- i ±6 o8. 1.5 ss6.3 8L14 S.c 45.o Total to 1 tsr so.c 737, E,47 '-I Tou o 3 10. (:7106 '000o T49.4 100 .0 10384.68oo0.10094.4100.0 14663-902 lo)5 -71'o- 5 000 000 0.0 2567.9 10.0 45 1 Other t Ithl±hiss96.6 118.3 184.2 210. 6.2 177.0 75)1.7 344.s -13o0l 5 1153.9 613.3 TOPAZ 5552.0 ______~~2. 6753.5 f73 9 0 9L179.7 105661.6 13066).1 155~0' 9 4 I7779TT 216.3 119. (071102:ia 1.61.1 1.9 -091 00.7 1212.9 19.2 259 3 1aS 2 88.8 1o.2 339.3 16.1 399.6 15 7 459) 15 2 5351 14.5 615.2 15.6 796.4 15.9 15.7 16.5 Comoerol1 96.7 1 i 7.4 12.7 i4o.5 11.0 171 1 12.3 157.3 11.1 241.1 ii,4 176.8 11- U;.4i 3a4 70i.5( 413.4 10.4 463.8 10.1 19.5 15.5 3r4os~~~~~~~~~~5io1 ~~~~~~30 .1 I .3 495.2 54.6 674.6 ~ (4 8070 ~ 59~ 7' 046.9 5S.9 7248.9 99.1 1504.7( 579. ]7c4,. 1 otti opo, bo.8 1431.1 61.o 179~4. 96L.o 27.6 77.8 R .r1-' F. 7 20 15.6 1.7 21.0 1.9 31. 2. 1.8 5.2 118.1 s.6 146.7 4- 177. 2 .1 216. -63 Ž5a.4 6.5 507.7 6.7 26.7 22.5 Dth-erJ 97.7 im.6 95.2 10.3 71 7 6 9s 1j) I 93 __ 5_2.6 8.6 7.66.3 7.8 188.2 1. 211ou 0 7-~ s4. 0 63 167.5 6.5 97 6.3 16.0 11.2 Toa o'es754.6b 11 0.0 507. 100. Y133 101.0 1390. 8 107 0 776.7, 10. 0 7113.2 100.0 220.170 77W O5 000 1 13910. 976 0. 58. 0 Other utllities 11 94.1L 117.1 ZO26.C 101.2 119.3 136.7 155 4 1'(4 138.5 22-4,7 TOTAL5 757.7 71001.7 1127-3-.9 15-2 2 6 2(7.9 1232.0~ 7045.- 53104 1 376107 418o.7 9636327 aoaidcstlal ~~~~~~~~~~~~~~~~77.9~ 16.2 91.9 15. I105os.9 14.i 117 5 i4.8 i46.y( 19,3 158.3 11.1 i8~o2 0.4 '05 - - ~33 7.7 265.6 6.6 3021. 7.1 17.1 12.8 lormerola ~~~~~ ~~~~ ~~~~~~~~42.6 9.9 51.1 8.4 61-.l B. ~ 74.6 90 84.8 8.9 115.0 7.i 120.7 o.9 142.7 5.6 168.9 9i. '93 8 4.-9 o36 41 5.5 i8.8 18.6 260.1 60.6 413.3 67.8 520.1 6s.s5 s55.5 6,7.1 6423 7.0 9.57 '(. se. _o164.5 61.4 2447 21. 4 4 8 '.4 3278.4 77.2 25.4 31.7 !odletyltl 1~~~~~~~ ~~~~~~~~~~.4 0.3 1.7 8.3 2.9 0.1 s.9 1.-5 5. o.6C 5.4 1.4 7.2 714 8.9 o,4 11,0 0. 13 7 0.3 77.1 o.4 4o3.5 21.1 Other 0-472 11.0 51.6 8.1 ,537 7. 71.6 . 78.8 9.2 97.2 6.3 102.3 j.3 115.9 4.5 131.7 c, 4 :397. 4 .-147 98 1574i Total to leers 4~~~~~~~~~~~~-259.2 1o00.0 -609.6 100. 0 -748.612.7 R0323 110.0 795b2 100.0 1o73.0 100.0 1917.0 100.O 25 3 7.u~T( 70. 3019.0 I10 0 4 ) 0-51. 0701.0 4245.0 100.7 P222 29.0 Other otilitOo- 32.6 30.1 28. 35.7 43.3 59.0 73.0 89.0C 108,0O 131.0 57.0C TOTAl, ______ 639.7 ~~~~7397 7296 -1-70o4 1451.0 2626.0 3~12704100 933 TT. C0031T11E15 (ateroge) 1ENLIS: Oe-identla' 6pio4o 665398 711;696 78',L2 o6',329) 950351 2035(0 11232 21353o 1304904 1397765 8.7 8.3 caome.rsos2/ 8~~~~ ~ ~~~~~~ ~~~~~284 89357 94513 195045 113636 104o00 1343533 144980 155o6 :669o5 177935 8.3 7.8 Issdaslral 1o898 11i740 13059 15142 17187 19346 ao469 23688 ~ 254934 27781 29752 9.5 9.5 P0*711/ 23717 26493 29317 i6686 16662 1946o 23117 27219 31794 34591 38621 -9.0 i4.o soher 9383 9966 11084 10774 10861. 115 1 1779 17347 2, .f r4 i84s 14794 4.o5. T01TAL 7477891 181432 85 7665 93~4595 1025775 112*5 1226498 133 1530 14004 7769 8I59;838 8.2 8.2 RaeaI,tOsoal185781 205722 2228521 2517747 277831 319163 547940, 387655 432-575 4795s2o 553705 io.8 11.5 CoaooreOol8' ~~~~~~ ~~~~~~ ~~~~25785 30231 34737 37934 60801 49729 56456, Essss 73653 83564 94344 12.1 15.0 7..zStybia 3521 3865) 4*79 5191 5779 7005 7952 9239 10380 11771 14683 13.5 16.7 BoxalŽ/ 17582 206,75 ?864i 34356 38411 46000 52224 6D638 682i76 77336 86592 21.8 14.5 Other 3093 3260 3525 3861 4172 5o4o 5702 6594 737 83(s6 10381 7.8 16.6 TOTAL 235762 796437 310111 331785 3oo357 120836 470274 529t789592777 96353 7397051.913 ?..lde.f ial %3~~~~~9074 96739 115527 116127 135753 146403 161115 127 7q 57) 214445 2s5889 i4.o 9.6 lomoerciis 102125 12666 13830 15281 17288 18844. 17)745 22847 25158 27702 30471 14.2 9.9 Indust Ial 1591 2186 2523 Ž6889 333 3942 ts4q 5~4r 6057 68i8 8028 20.7 i5.8 25,24aT 242 582 747 943 1887( 2338 20)47 3684 46c35 5756 7195 73.8 25.0 oIther 1437 1666 1935 2017 - 2264 2~636 P919 3376_ 3837 4363 4931. 12.1 15.9 TOITAL =9386 133 L32375 3 13704 1059 174015339 121383T 314-,C7 95725- -286515 14.4 10.1 Averege ose (kWhZ/c:sst-res year) h'eal 9008 1: 1777370 1113 1128 1153 1747 1197 1240j 1271- 1003 lisi 1343 1370 1.6 2.3 1721821TES 867 915 4)75 1019 1059 1084 1134 1184 3037 1301. 136.1 4.6 4,6 10019A 969 950 1005 io63 i3Si 1781 1118 1157 i1o6 1739 1282 2.8 .9 All _o t rs r 3 M117G7 7027 7103 7700 d1Es 6,(19 9235 17124 11075 tIlosI 129~43 13621 5.C 7.8 2E2610 3073 3451 5887 4199 49;s 5031 5344 5567 59~14 5992 6132- iD.8 4.8 2232177A 4572 5355 6013 90,73 5962 8220 99-62 11315 -I,9515(66 14829 6.4 '6 9) a! hisclostioa ion -clad-s -oasoptis by o-m-tial cus tomer, treet lightieg, gove.-et offices sod -ra1 -at-o-pplier. /Afot- 1026 t7:a r-el cla-ifi-atioe refer onl to -to-o-s -rogod naro datl activties or to tota c-ps-acre- c/This cl1nefic aLoi- i-clud- --osaptiot by street lighting end foe-aa-t officre /Ealadieg sales to other ottlities e/Proposd ectri -atiot tarts. I - 22 - CHAPTER 4 PROGRAM AND PROJECT Background and Oblectives 4.01 CEMIG, CELESC and ESCELSA are faced with a prospective rapid growth in electricity demands in their respective service areas. Their construction program through 1981, of which the project is part, proposes to provide the facilities required to serve the anticipated loads, mostly related to indus- trial growth. Failure to provide these facilities would lead to excessively costly curtailments of supply or installation of fuel-based captive generation. The program would also be instrumental in making public service electricity available to low-income customers and for rural electrification. Generation 4.02 Of the three project beneficiaries, only CEMIG has a program for installing generating facilities. The program to be executed during the project construction period has, for the most part, been carefully studied by CEMIG and has been properly coordinated with ELETROBRAS and neighboring utilities to ensure that the soon to be interconnected system is expanded and operated in an optimum manner. CEMIG's program through 1981 includes the completion, in 1979, of the first phase (1800 MW) of the Sro Simxo hydro station (partially financed by Loan 829-BR) and the start of construc- tion of the 1,000 MW Emborca9ao hydro station (partially financed by IDB), the first units of which are expected to be commissioned by late 1981. 4.03 CEMIG's program also includes the start of construction of hydro stations at Igarapava (150 MW) and Nova Ponte (320 MW), to be commissioned by 1983. However, CEMIG is now considering deferring their commissioning until about 1987 or 1988. CEMIG has not yet demonstrated that capacity additions of this magnitude would be the least cost solution to the problem of adding capacity to the interconnected system, either in 1983 or in the latter dates. The Bank would have an opportunity to review the justification of Igarapava and Nova Ponte under the limitation on major expansion projects (para. 5.09). Transmission 4.04 The proposed expansion plans for transmission lines and substations would allow the utilities to transmit the energy to be generated by existing and future plants to meet their anticipated load growth without reducing the quality of their services. Between the beginning of 1978 and the end of 1981, CEMIG is expected to increase the total length of its lines (34.5 kV to 500 kV) from about 12,500 km to 16,700 km and its substation capacity from about 7,000 MVA to about 12,600 MVA; CELESC would increase its lines (34.5 to 138 kV) from about 2,900 km to 3,500 km and its substation capacity from about 800 MVA to about 1,600 MVA while ESCELSA would increase its lines (34.5 to 138 kV) from 1,700 km to about 1,940 km and its substation capacity from about 275 MVA to 440 MVA. - 23 - 4.05 The most important lines and substations included in the program are the following: Transmission Lines Substations CEMIG: Sao Simao-Usina Jaguara: 500 kV, 350 km Neves: 500 kV, 1,400 MVA Jaguara-Neves: 500 kV, 350 km Terminal Sul: 500 kV, 1,000 MVA Neves-Ipatinga III: 500 kV, 185 km Ipatinga III: 500 kV, 800 MVA Sao Simao-Agua Vermelha: 500 kV, 95 km Itumbiara-Jaguara: 500 kV, 300 km Emborcagao-Neves: 500 kV, 455 km Neves-Terminal Sul: 500 kV, 120 km Neves-SE Taquaril: 345 kV, 50 km Taquaril-Barbacena-Juiz de Fora: 345 kV, 220 km Tres Marias-Montes Claros: 345 kV, 50 km Poros de Caldas-Pouso Alegre II: 345 kV, 220 km Barbacena-Liberdade: 345 kV, 100 km Juiz de Fora-Liberdade: 345 kV, 100 km Pouso Alegre-Tres Coracoes II: 345 kV, 115 km CELESC: Mafra-Canoinhas: 138 kV, 65 km Rio do Sul: 138 kV, 85 MVA Blumenau-Ibirama: 138 kV, 58 km Imbituba: 138 kV, 50 MVA Modelo-Sao Miquel: 138 kV, 58 km Trindade: 138 kV, 50 MVA Lages-Otacilio Costa: 138 kV, 40 km Trindade: 69 kV, 40 MVA Enseada de Brito-Trindade: 69 kV, 40 km Otacilio-Ponte Alta II: 69 kV, 28 km Xanxere-Chapeco: 69 kV, 35 km Imbituba-Laguna: 69 kV, 29 km ESCELSA: Mascarenhas-Nova Venecia: 138 kV, 120 km Ibes: 138 kV, 50 MVA Branch Line to Marataizes: 138 kV, 25 km Vitoria: 138 kV, 50 MVA Sao Mateus-Petro Canario: 69 kV, 40 km Distribution 4.06 The distribution expansion programs to be carried out by the utilities during the period 1978-81 focus on the following objectives: (a) providing adequate capacity at appropriate points of the system for the expected increases in loads; (b) ensuring the continued high reliability of service to all customers; and - 24 - (c) expanding service to low-income and rural areas of the respective states. In order to meet these objectives, the utilities' programs include the follow- ing items: CEMIG CELESC ESCELSA Increase Increase Increase Over Over Over Quantity Existing Quantity Existing Quantity Existing Circuit km of urban lines not at 13 kV and below 10,000 37% 6,430 available 4,000 40% MVA of distribution transformers 866 57% 143 52% 84 52% Meters 450,000 45% 226,000 54% 85,000 49% 4.C7 During the project construction period the utilities will give emphasis to the connection of low income households, particularly to those whc at the present time have access to service by virtue of being near exist- ing distribution lines but are not connected to the system. These prospective customers can be connected with a minimum of investment. The three utilities will be offering such consumers the financing, over a period of at least 18 montns, of the hcusehold wiring and other items necessary for connection. The monthly payments, which would include the cost of 30 kWh of electricity, are not likely to exceed the equivalent of US$5.00 in CEMIG's area, US$3.50 in CELESC's area and US$3.00 in ESCELSA's area. These amounts are expected not to exceed 5% of the average total monthly household income of the lower 40% income group in the respective states. On this basis, the utili- ties expect to be able to connect between 1978 and 1981 a total of about 60,000 low income customers, of which, 30,000 would be CEMIG's, 20,000 CELESC's and 10,000 ESCELSA's. 4.08 In addition to the expansion of the urban systems, the utilities have on-going rural electrification projects being carried out with financial assistance from ELETROBRAS (para. 1.29). These projects envisage the installa- tion of about 25,700 circuit km of lines by CEMIG and 3,000 each by CELESC and ESCELSA as well as the respective connection of about 15,000, 30,000 and 3,400 new rural customers, between 1978 and 1981, which are realistic goals. Miscellaneous Items 4.0'9 The utilities' programs also includes purchase of laboratory, shop, control, communication and transportation equipment. - 25 - Program Costs 4.10 The investment costs of the 1978-1981 expansion program appear in Table 4-1 and are summarized below. 10 6Cr$ 106US$ CEMIG: Generation (including associated transmission) 13,235.1 922.3 Transmission system expansion 3,954.3 275.6 Rural electrification 1,600.7 109.2 Other distribution system expansion 2,863.7 201.9 General property 1,703i7 118.7 23,357.5 1,627.7 CELESC: Generation - - Transmission system expansion 972.0 67.7 Rural electrification 292.7 20.4 Other distribution system expansion 1,484.7 103.5 General property 120.6. 8.4 2,870.0 200.0 ESCELSA: Generation 12.5 0.9 Transmission system expansion 710.6 49.6 Rural electrification 293.5 20.5 Other distribution system expansion 845.5 58.8 General property 188.5 13.1 2,050.6 142.9 These costs (which do not include price contingencies) were estimated by each utility on the basis of generally prevailing prices as of mid-1977 and are considered reasonable by the Bank. The Project 4.11 The project to be financed by the proposed loan consists of items which: (i) have been identified as of high priority; (ii) are scheduled to be started not earlier than July 1, 1978, and finished not later than December 31, 1981; (iii) already have the required technical and economic justification; and (iv) are to be built at voltages no higher than 230 kV. - 26 - The project will consequently be focused on the subtransmission-distribution subsector. In the case of CEMIG, acquisition of communications and control equipment will also be included. The subtransmission-distribution subsector is characterized by special difficulties in the process of identification of individual projects and therefore the beneficiaries have not obtained and are not likely to obtain alternate financing on reasonable terms. 4.12 The individual project components are indicated in Annex B, T-6 and are summarized below: (i) Subtransmission L:ines (circuit-km) CEMIG CELESC ESCELSA Total 2:30 kV 14 - - 14 1:38 kV 779 329 172 1280 69 kV 159 270 58 487 :34.5 kV - - 6 6 (ii) Substations (MVA) 230 kV /a - - - 138 kV 666 353 150 1169 59 kV 234 427 14 675 :34.5 kV 5 - -/a 5 (iii) DiLstribution The project includes the equivalent of about half of CEMIG's distri- bution program, and CELESC's and ESCELSA's full four-year program. CEMIG will have to arrange financing for the balance of its distri- bution program by the end of 1979. The sources of this financing would be identified in the proposed mid-1979 review of CEMIG's fiLnances (para. 5.12). The distribution component of the project includes the following: CEMIG CELESC ESCELSA TOTAL MVA of distribution transformers 433 143 84 660 Circuit: km of urban lines (up to 13 kV) 5000 6430 4000 15430 kWh meters (thousands) 200 226 85 511 /a The planned improvements do not include capacity additions. - 27 - Project Cost Estimate 4.13 The project cost estimate is summarized below; the estimated annual expenditures appear in Table 4-2 while the detailed estimate is shown in Annex B, T-6. CEMSC CELESC ESCELSA TVrAL 103CTS 13 20.C$ 103r l3W:S 103C'$ lO'USS 103 CrS 103US$ Subtranstission Lines: l - o 34 kV - - - 628 44 628 44 69 kV 43,638 3,041 138,661 9,663 13,320 928 195,619 13,632 138 kV 460,984 32.123 113,705 7,923 172.570 12,026 747,259 52,072 230 kV 25,960 1,809 - - - - 25,960 1.809 Substations: 34.5 kV 2,518 245 - - 13,321 928 16,839 1,173 69 kY 137,705 9,595 192.429 13,410 23,121 1,612 353,255 24,617 13S kV 407,083 28,370 162,196 11,303 156,865 11,698 737,144 51,371 230 kV 17,838 1,243 - - * - - 17,838 1,243 Miscellaneous 1r&prove:snts 97,022 6,761 - - - - 97.022 6,761 Dist7ibut___ 613,100 42,725 852,300 59,393 510,000 35,540 1,975,400 137,658 Hiscella-eous Zquip=ent 87,591 6,104 -38000 2,648 25.000 1.742 150,591 10.494 Total Direct Cpsts 1.394,439 132,016 1,497,291 104,340 925,825 64,51a 4,317,555 300,874 bhysical ContinSencies 187,043 13,035 180,165 12,555 151,788 10,577 518,996 36.167 Price Continngencies 575.679 *0.117 '53.589 31.609 260,998 8l,168 1,290,266 89.914 TOTAL BSTIDIAT3 COSTS 2,657,161 185,168 2,131,045 146,504 1,338,611 93,283 6,126,817 426,955 ,._.......... ----- - . . ....... _ . - - .______, Of vhick: !orai$ costS 831,898 57,972 628,775 43,817 402,503. 28,0499 1,63,176 129,836 Locea costii 1,825,263 127,196 1.502,270 104,687 93a,10i 65,234 4,263,641 297,117 The base costs were estimated by each utility on the basis of generally prevailing prices as of mid-1977 and found reasonable by the Bank. The engineering and administration costs for the project as well as applicable taxes and duties, estimated at about 10% of total base costs are included in the base estimates. The cost of consulting services to be required by CELESC and ESCELSA (para. 4.14) has been estimated on the basis of about 80 man- months each at a cost of US$6,000 per man-month, excluding subsistence and travel expenses and is included as part of the cost of the 138 kV facilities. Physical contingencies have been estimated as 8 to 20% of the base estimates of the individual components of the program, depending on the status of the engineering; the overall average is about 12%. The price contingencies have been calculated on the basis of assumed annual rates of inflation of 7.5% from 1977 to 1979 and 7% thereafter for foreign costs and 9% from 1977 to 1980 and 8% thereafter for local costs, assuming a constant exchange rate. The latter were estimated on the basis of the projected construction cost indexes for Brazil which in the past, have provided a suitable basis for estimating such costs. The proposed Bank loan of US$130 million equivalent would finance the estimated foreign component of the project, of which US$58.1, 43.8, and 28.1 million correspond to CEMIG, CELESC and ESCELSA, respectively. The remainder of the project, together with the rest of the beneficiaries' programs would be financed as detailed in para. 5.05. - 28 - Implementation 4.14 The utilities' own staff will carry out most of the necessary engineering and supervision of construction for the project:. This is accept- able as the utilities have proven experience in similar works completed recently or still under construction. However, CELESC and ESCELSA have staff limitations and will require assistance for engineering and supervision of construction for 138 kV facilities and have therefore agreed to employ consultants satisfactory to the Bank for these purposes. I]n view of the limited experience of these two utilities with international procurement, consultants should also assist them in the preparation of t:he general contract documents and evaluation procedures. It is most likely that these consultants will be Brazilian consultants. The utilities' staff personnel would install the distribution equipment and build short distribution extensions. Local contractors are expected to install substations and build all 230, 138 and 69 kV lines and major distribution lines. 4.15 The project implementation schedule envisages completion by December 31, 1981, which is reasonable. The detailed schedule (Annex B, T-7) would be used to monitor progress during the project construction period. Procurement 4.16 Procurement of the equipment to be financed by the Bank will be through international competitive bidding (ICB) in accordance with the Bank's guidelines. Manufacturers of equipment financed by the proposed loan, whose bids contain components manufactured in Brazil equal to at least 50% of the value of the bid would be given a margin of preference of 15%, or the applicable import duties, whichever is lower. Brazilian suppliers of the items included in the project are reasonably competitive. Foreign cost estimates assume that: (i) about US$130 million equivalent of equipment and materials will be acquired through ICB :Ln accordance with Bank guidelines, under the proposed loan; and (ii) Brazilian suppliers would be awarded up to two-thirds of the value of the contracts placed through such bidding. 4.17 Any equipment and materials to be used in the project which would not be financed under the proposed loan, such as line supports and low voltage equipment, w:Lll be procured locally under the beneficiaries' normal procedures as Brazilian legislation precludes ICB for items that can be produced locally and that are not financed by long-term foreign loans. However, as noted above, such locally produced items are reasonably competitive in price with imported products and project cost should not increase significantly over the estimate as a result of these restrictions. Disbursement 4.18 Disbursements from the loan account would be made for 100% of foreign expenditures for imported equipment and materials or the ex-factory cost of locally manufactured equipment and materials. The following table shows estimated loan disbursements, assuming loan effectiveness to be June 30, 1978: - 29 - Estimated Loan Disbursements in 106US$ IBRD Semester During Cumulative at End Fiscal Year Ending Semester of Semester 1979: December 31, 1978 4 4 June 30, 1979 15 19 1980: December 31, 1979 22 41 June 30, 1980 29 70 1981: December 31, 1980 26 96 June 30, 1981 18 114 1982: December 31, 1981 11 125 June 30, 1982 5 130 Disbursements will be fully documented. The closing date would be December 31, 1982 to allow for the payment of retentions. Environment 4.19 The utilities intend to route their lines, most of which will be overhead, and locate their substations so as to minimize their visual impact in a manner consistent with economic and financial considerations. Project Risks 4.20 The project faces no major risks, other than those resulting from the relative weakness of two of the beneficiary utilities. The construction schedule assumed for the project is reasonable and takes into consideration normal engineering, administrative and construction procedures but it contains no provision for unusual delays. CEMIG is not expected to have any difficulties in meeting the schedules. However, timely completion of the project by CELESC and ESCELSA will depend greatly on the appropriate use of consultants to assist them with the 138 kV facilities and in the preparation of the contract docu- ments for ICB. A condition of disbursement of the respective portion of the loan for which CELESC and ESCELSA are the beneficiaries, is the hiring by these utilities of consultants for those services on terms and conditions acceptable to the Bank to minimize the risks of not meeting the schedule and/or the project objectives. - 30- TABLE 4-1 1978-1981 Investment Program 3 3 10 Cr$ 10 u05 1978 1979 1980 1981 TOTAL 1978 1979 1980 1981 TOTAL CEMIG Generation: Sao Simso hydro station 944,220 276,205 36,210 - 1,256,635 - 65,799 19,248 2,523 - 87,570 Sao Simao transmission 976,100 313,256 98,765 - 1,388,121 68,021 21,830 6,883 - 96,734 Igarape steam plant 17,323 - - - 17,323 1,207 - - - 1,207 Emboracacao hydro station 1,824,804 2,145,519 1,403,880 443,058 5,817,261 127,164 149,514 97,832 30,875 405,385 Emboracacao transmission 128,238 388,202 642,032 661,159 1,819,631 8,936 27,052 44,741 46,074 126,803 Nova Ponte hydro station 8,541 267,664 1,033,121 849,185 2,158,511 595 18,653 71,994 59,177 150,419 Nova Ponte Transmission - - 29,714 82,885 112,599 - - 2,070 5,776 7,846 Igarapava hydro station - - 51,367 578,514 629,881 - - 3,580 40,315 43,895 Igarapava transmission - - 7,218 27,909 35,127- - 503 1 945 2,448 Subtotal 3,899,226 3,390,846 3,302,307 2,642,710 13,235,09 271,772 236,297 230,126 184,162 922,307 IBRD Project: Transmission system expansion 13,058 343,539 491,359 464,194 1,312,159 910 23,940 34,241 32,348 91,439 Distribution system expansion 95,355 170, 507 189,305 217,891 673,058 6,645 11,882 13,192 15,184 46,903 Miscellaneous equipment 4 995 18 626 41 500 31 153 96,274 348 1,298 2,892 2 171 6,709 Subtotal 13,4058 32,672 2 2 7,903 37,120 50,325 145,051 Rural electrification 347,900 361,620 414,715 476,420 1,600,655 21,900 25,200 28,900 33,200 109,200 Other transmission works 913,154 735,499 544,550 448,969 2,642,172 63,634 51,254 37,948 31,287 184,123 Other distribution works 537,797 554,826 563,930 534,142 2,190,695 39,821 38,664 39,298 37,222 155,005 other misc. equipment & general property 587,180 750,017 162,199 108,o6 1,607,402 40,920 52,265 11,303 7,526 112,014 TOUALa/ 6,398,665 6,325,480 5,709,865 4,923,485 23,357,495 445,900 4408co 397,900 343,100 1,627,700 CELESC IBRID Project: Transmission system expansion 30,130 146,210 261,150 242,340 679,830 2,099 10,189 18,198 16,888 47,374 Distribution system expansion 18,158 244,825 288,693 302,900 954,576 8,234 17,061 20,118 21,108 66,521 Miscellaneous equipment 4,305 18 655 10 o45 10,045 43,050 300 1 300 700 700 3,000 Subtotal 152,593 4 0 9 ,055 988 555,285 1,677,4 56 28,550 39,016 3Th789 Rural electrification 60,158 69,025 77,892 85,613 292,688 4,192 4,810 5,429 5,966 20,397 Other transmission works 202,449 88,255 1,463 - 292,167 14,108 6,150 103 - 20,361 Other distribution works 175,911 94,682 129,476 130,026 530,095 12,259 6,598 9,024 9,061 36,942 Other misc. equipment & general property 15,894 4,188 16,181 41,286 77,549 1,108 292. 1,128 2,877 5,4o5 TOTAa'/ 607,005 665,840 784,900 812,210 2,869,955 42,300 46,4o0 54,700 56,600 200,000 ESCEISA IBRD Project: Transmission system expansion 72,612 196,925 107,509 60,701 437,747 5,o60 13,723 7,492 4,230 30,505 Distribution system expansion & improvement 84,521 156,329 169,588 200,728 611,166 5,890 10,894 11,818 13,988 42,590 Miscellaneous equipment - 4534 14 322 9,844 28,700 316 998 686 2,000 Subtotal 157,133 357,788 291,419 271,273 1,077,613 10,950 24,933 20,308 18,904 75,095 Improvements in generation 2,021 2,694 3,503 4,311 12,529 141 188 244 300 873 Rural electrification 69,252 73,492 73,492 77,166 293,402 4,826 5,121 5,121 5,378 20,446 Other transmission works 61,462 39,038 82,557 89,792 272,849 4,283 2,720 5,754 6,257 19,014 Other distribution works 87,017 4o,507 '48,103 58,748 234,375 6,o64 2,823 3,352 4,094 16,333 Other misc. equipment & general property 72,270 26,041 29,006 32,530 159,847 5,036 1,815 2,021 2,267 11,139 TOTATA/ 449,155 539,560 528,080 533,820 2,050,615 31,300 37,600 36,800 37,200 142,900 a/ Includes physical but not price contingencies. - 31 - 'ABLE 4.2 -os-t Atnoal Expendilture Estimate 3 lo0r 1961 _0__ A 1978__- 1961 70 TOTAJ. 1 9 78 1979 1979 5AL kt 08813 Li--- ~ ~ ~ ~~- 12,700 12,140 123,132 47,972 - 885 846 1, 612 3,3 3 rr«n8uieakon line": 6,703 129,322 218,121 152,598 506,742 467 9,012 15,200 10,634 35,313 230 42 _______ 0~~~~~ ~ ~~~~~~8,542 2326 173 -840 lc 383 -__0__ i2V Subtotal 8T IV _, 28.0 38.5 40 2,526 - - ~~~~~~ ~~~~~~~ ~ ~ ~ ~ ~ ~~1,349 3,875 17 --94 270 69 kV 79,2 34221 37,396 151,350 - 5,556 2,965 2,606 13547 23,831 93,246 207,271 L43,084 447,432 267 6,4968 14,444 9 971 31,180 238 80kV1,02 -1,0 - 1,366 - 2,366 mi.osllasoa lspro- stt 437-37 1,06 ~ .i4 -l - 743 SlBotat 6,3357 172;975 261;090 18,196 201 00 79W 35 Total Tr-aaisslsot 13.058 IL= 491.359 464.194 1.313.150 910 2 34.241 32.348 91,439 63.0 ictrbotion st- 9,351 1 182216 210,34 651,705 6,645 11,416 12.695 11,562 415 31.3 i saeo 709 757 2,33....2...-..Ž 5286 ,,43 1.0 .lt iboto eqaip-st 7_5 21353_____; ±~ Total Dlstaibatio9 170.507 189.305 217,91 673.058 6,645 11,882 13.192 i5,i84 46.903 3.3 iscella-eous qulip-tt 4 18,686 41.500 31.153 96.274 348 1,298 2.892 2,171 6,709 4.7 o.ta1 lo- -oats & physi-l -otiogeocte 1,3408532.472 7216 7323 2848 13 ofel allahe -stc &fosbY -lg costs ngenc 7284 308,755 396,247 614,481 1,398,767 5,525 21,516 27,613 42,821 97,175 67.2 'plc, lottltgsflciss 97896Ž,994 993,331 7787379 575, 9 675 8753 3,59 279 40,11 oohlal f_aigocattge2i3,5 35,68 1773 32,30 I0783 6 706 ,51 221 1039 - local cotta-g1 oies 7,132 58,662 114,915 245,787 426,496 497 4o0O 8,208 17,128 29,721 ttlsltio.oted -octs 12302 6 9 1 274 69,102 43.4 of allot - Oorsigtoosts 9,153~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1 ~' 3L o - localst, 60,416 367,417 511,162 060,268 1,825,063 6,022 25,604 35,621 59,49 127,196 68.7 6q kV 9,190 51,080 53,160 41,870 155,300 640 3,560 3,704 2,918 10,822 13800 - ~~~~~~ ~ ~~~~~~ ~~24.640 69,370 33.340 _49713 - 1.717 -'R73 087 Sobtottl 9,190 75,720 122,930 75,210 22,B650 64D 5,277 3 5 19 696 16.9 obst.tiots ubst kVonc: 11,512 45,590 76,950 70,970 213,020 802 3,177 5,362 5,503 14.844 138 kV5*930 24,9 61670 88,160 164.100 637 1.735 , 4293 6411 12,024 lobtotol 20,9W0 7C,490 138,62D l7,130 397,188 17099 4,912 9,660 11,6u7 ?7,6Th 23.7 Total traa1 mlsaioa 33.130 116,210 361.110 242,340 679.830 2.099 10.189 18.198 16,888 47,374 40.6 iscalbotiot systex s03soeiot 105,645 232,312 276,180 290,387 904,524 7,362 16,189 19,240 20,236 63,033 53.9 *-tributioa sqolpint 12.513 12.513 123513 12,513 . 50,052 872 872 872 872 3,488 3.0 Total Dlstrlbotiot 118,058 24,4825 288.693 302,90 476 5234 17.0f1 20 118 21,100 86,521 56.9 iaoslloueoas qaipaeOt 4.305 18,665 10.041 5 t.43.050D 30 1300 7ao 700 00S 2.5 ottI base casts 4 physical contintlagc:,a 152,593 409690 559.888 555.285 1,677,456 731D,74676333 239t13 3I.096 313 100.0 of alo arh acssi330 38,3 0,55 879 5833 2557 0557 13 5902 - 7 71 - local ats 111,279 204,876 352,373 470,591 1,159,119 7,754 15,671 24,555 32 794 7774 68.1 aloe Cottiogetols- 13.116 72,295 1 19 2183 533589 914 D 1 8 D52 C5 .317,9 of ohioh f toastgn co.ttgeaclos 3,100 29,575 49 27954 112438 216 241 47 7696 - 1lc1 catttgeacles 10,016 42,720 102,186 138,229 343,151 698 2,977 7,121 13,117 ?3,013 otal esttet,cocta5 481.935 731183 771 168 211517 33.588 ,93,93 53.761 1483506 O10.2 34.8 of ahloh - forelgn costs 25 77324 18 77353095 34,9 40 1 7,32 7,050 43,017 29.5 - local costs 121,295 267,596 454,559 658,820 1,502.270 8,452 18,648 31,676 45,11 104,687 70.5 ESCEMAS sassassio Li-ues: 130 40 37,984 107,051 31,742 1;,531 193,308 2,647 7.460 2,212 i.152 i3,47l 69 kV - 2,970 59505 5,97C 14,895 - 207 415 41* l.o37 3410 t 560 144 - - 704 39 10 - 1 19 Subtotal _38791 -11-0,145 37-,497 22,0 04,9-07 727850 - 7,473 -2,427 0,90 1,5154 174 ub,tatio.. 138 kV 31,786 76,844 50,277 27,122 188,029 2,215 1,351 3,643 1.890 23.8°3 69 kV 3,889 11,612 1c,346 25,887 - 271 812 721 1,001 347 2226V7 08 732 14,7 159 120 4051104 SobtOtal 77V588 98X382 89w337 30,188 7;38780 2,374 '077095 777283 1,642 15,047021,2 Tatal Trn-sasislot 72.612 107.509 J0 ,7D1 437,747 5,060 9 _ 2 4.230 3,505 40.6 lttr-botlcc syateasev aton I taltovsoemct 79,728 149,V54 155,238 1-3,173 577,673 5,556 18,394 10,818 13,488 4o,256 53.6 istribution sqalpamat 4,793 7,175 14,350 7175 33,493 33k 58 1,0 500 ,334 3.1 Toot. DiOtribati.o 8 4 ,521 156,329 169,58 2 2,728 611,166 598qo Lo.894 11,818 13,6 56,7 tactlltc,ou.s qaip-eat _ 14.322 _414 28,700 - 316 9 86 2.000 2 bt:O has - costs a physi-l cooti --Iols, 157133 357.788 g9I4 19 271,273 1,77,613 10,9 24,933 20,30 18 75,95 188.0 of liEch - forsiga costo 34,b27 117,225 ;3 ' 332,77 2, 4173 T 1 - local cost1 122,506 240,563 162,514 210,053 744,63t 8.537 16,764 11,325 15,265 511891 69.1 arice conttaogstces 13,61,9 7742±9 78,064 104,855 260,996 949 ~143809 5,40 7.307 10_I"8 of bahl - fo-saga cact: soojos 2,598 1B7751 939 17 231 69,526 '37 1,307 2,156 1, 7 - Ic-al .o.tige-cis 11,021 45,705 47 1259 87,620 191.472 768 3.185 3,284 6,186 13,343 otal sstiotsd costs ...170,52 42,28 36,43 37t1283 _3,38.611 11,89 9, 27438 26.11 3 93283 100.0 21.8 of ahich - foreignocote I'l, '5 '74 9316199,304 5 4,03 0 7134 300 - local costa 133,527 286,268 209,639 3D6,674 936,108 9,305 19.949 14,609 21,371 05,234 70.0 COMPLttTE F20JIEfT otal ba- . oasts sd physiaal .o.tilg...tiss 11 I . 68 248647 of cohio - f.osigy costs I ill, 3 1A534.2 3 65 4 -1 7 _locl costs 313,060 774,197 911,L24 1,304,128 3,302,509 21.816 53.951 63.493 909880 230,140 6883 cite aottlaasootss ~~~~~~36,420 333_233 9349 599.411 3,L97266 2,538 16 114 _4394 1,7 89,914 ofee aonnhach - forsig ooatbagstaies 8,251 84 158,90 77,777 39,182 575 t , . 22.937 - Losal coabttgstoiss 28,.189 117,087 264,887 521,637 961,120 1,963 10,250 18,413 36,351 6.977 otol -ati atad costs 66 2 2631±32 _,333 j,3996.66 7 34734.j1 ,.37J2,04 0.7127 139.140 149,D74 4296.95 188.0 of ahllo - fossiga costs 11 315 10 05 1 .3 313, 1 7 1,8376 ,456 2,516 5 7,34983 1 58 - 1ona costs 341.240 921,280 1,175,359 1,825,763 4,263,641 23,779 64,231 81,906 127,231 297,117 69.6 - 32 - CHAPTER 5 FINANCIAL ANALYSIS Summary 5.01 The beneficiaries are quite different as to size of operations, financial performance and management sophistication. CEMIG's performance has in the past been very good; however, its finances have deteriorated as a result of the high rate of growth of its market and the consequent large investment requirements. It is expected that this negative trend will be reversed as a result of the upcoming review of CEMIG's finances (para. 5.12). CELESC's performance has been rather unsatisfactory reflecting mainly faulty financial decisions but its financial position should improve as a result of improved management and increased capital contributions from the State Government. ESCELSA has in the past been a net recipient of funds from the tariff equalization scheme and has been undercapitalized; it has, there- fore, experienced some financial tightness which should be overcome by increased equity capital investments from ELETROBRAS. The Government, ELETROBRAS and the beneficiaries have agreed to financial provisions which would allow continued monitoring of the financial viability of the benefi- ciaries. The financial experience of the beneficiaries over the last several years and their estimated future finances are shown in Tables 5-1 through 5-3. Earnings History and Financial Position .5.02 CEMIG earned a rate of return on its remunerable investment (para. 1.21) of about 10.5% on average in 1974-76 which was equivalent to a financial rate of return 1/ of about 17% (Table 5-1). These returns have allowed CEMIG to comfortabl,y cover its operating expenses (49% average operating ratio for 1974-76), and to generate internally funds which covered its net debt service with an accepitable margin (1.7 times average for 1974-76). CEMIG's construc- tion outlays in real terms during 1974-76 were on average twice as high as those of the previous six years. This increase coupled with the long construc- tion period of the projects resulted in a decrease in the proportion of con- struction expenditures which were financed with internally generated funds. Consequently, debt financing of CEMIG's investments increased from an average 56% for 1968-,73 to 78% in 1974-76 2/. As a consequence of the increased reliance on borrowing, CEMIG's debt service coverage has declined from 1.8 in 1974 to 1.6 in 1976 and the proportion of debt in its capital structure increased fromi 48% in 1974 to 55% by the end of 1976. Even though this debt proportion is still acceptable, the short maturity of CEMIG's debt (12 years average repaynment period) may cause financial difficulties to the company in the near future. 1/ The financial rate of return excludes receipts from (or payments to) the GlobaLl Guarantee Fund and is calculated before deduction of reversion (see paras. 1.21-1.22). 2/ As explained in para. 5.06, a sizeable proportion of the borrowed funds represent resources originating in charges to CEMIG's consumers; these are used by ELETROBRAS to support investments by CEMIG or other utilities as required. - 33 - 5.03 CELESC earned an average 10.7% return on remunerable investment in 1974-76 which was equivalent to a 16% financial return (Table 5-2). This satisfactory remuneration combined with a relatively low debt service burden enabled CELESC to keep its net internal contribution to investments at an average level of 26% over 1974-1976, which is adequate. CELESC's debt service coverage ratio declined from 3.2 in 1974 to 2.1 in 1976, but remained within an acceptable margin. CELESC's financial management has in the past been deficient and the company is currently negotiating with ELETROBRAS short-term financial assistance that would allow it to settle its overdue payables with ELETROSUL (which amounted to over 5 months' energy purchases at the end of 1976). CELESC's financial projections include the capitalization by end of 1978 of Cr$80.9 million debt due to ELETROBRAS in 1977 and 1978, and of Cr$42.9 million interest due in 1977 to 1981. ELETROBRAS has confirmed its intention to act accordingly. 5.04 ESCELSA earned an average 11% return on remunerable investment in 1974-76. However, in the last two years of this period, it only achieved this return as a result of transfers from the Global Guarantee Fund (Table 5-3, II). As a result, ESCELSA's financial rate of return decreased from 20% in 1974 to to 12% in 1976 (para. 1.22). ESCELSA's indebtedness has been high with a conse- quent high debt service, which has exceeded the utility's internally generated funds. Despite its deteriorating returns, the utility has been able to (i) in- crease the coverage of its debt service burden by gross internally generated funds (from 0.7 in 1974 up to 1.0 in 1976); (ii) decrease the proportion of its borrowings to its investments from 117% in 1974 to 77% in 1976; and (iii) de- crease the proportion of debt in its capital structure (from 71% in 1974 to 64% in 1976). This improvement has been due mainly to conversion to equity of part of its debt to ELETROBRAS, and ELETROBRAS' additional capital investments. How- ever, ESCELSA's 1976 finances still reflect an unsatisfactory coverage of its debt service with internal cash generation and a relatively low self-financing of its investment expenditures. Investment and Financing Plans 5.05 The beneficiaries' financing plans for their 1978-81 investment program are reasonable. Total consumer direct contributions (defined as internal cash generation net of debt service, dividends and taxes, plus capital contributions originating from reinvestment of consumer-based resources) would amount to 20% of requirements in the case of CEMIG, 41% for CELESC and 46% for ESCELSA. Existing and proposed loans from ELETROBRAS, IDB, IBRD and other borrowings would provide 76% of CEMIG's requirements, 48% of CELESC's and 54% of ESCELSA's. CEMIG and CELESC would receive a small amount of additional equity contributions (not derived from consumer charges and expected to be mostly from the respective states). The investment programs and financing plans are summarized below and shown in more detail in Tables 5-1, 5-2 and 5-3. Financial projections were prepared in constant June 1977 Cruzeiros to ensure consistency with financial projections made by Brazilian authorities for the electric power sector: -34- CEMIG CELESC _ LSA TA Cr~x10b 7 Cr$xTOO Z Cr$xlO° Z Investment Plan Construction program: Ongoing works 10,299.0-/ - - _ _ - 10,299.0 _ Proposed IBRDD project 2,081.5 - 1,677.4 - 1,077.6 - 4,836.5 b/ - Other proposed projects 8,041.0 - 1,192.5 - 973.1 - 10,206.6 - Other future projects c/ 2,936.1 - - - - - 2,936.1 - Interest during construction 3,044.2 - 108.8 - 165.0 - 3,318.0 - Total construction program - 2797Y7 - *277 - 31,562 - Increase in workine capital 1,507.4 - 422.5 - 175.6 - 2,105.5 - Total Investment Plan 27,909.2 - 3,401-2 - 2,391.3 - 33,701.7 - Financing Plan Gross internal cash generation 16,503.0 - 1,769.8 - 2,269.0 d/ 20,541.8 - Less: net debt service 12,420.1 - 1,123.4 - L,499.6 15,043.1 - cthers 1,382.2 - 125.9 - 51.3 1,559.4 - Net internal cash generation 2,700.7 10 520.5 15 718.1 30 3,939.4 12 Sector capital investments e/ 2,893.0 10 876.9 26 370.2 16 4,140.1 12 Total consumer direct cozitributions 5,593.7 20 1,397.4 41 1,088.3 46 8,079.4 24 Equity investments f/ 1,044.5 4 357.6 11 - - 1,402.1 4 Borrowiigs: Exist:ing ELETROBRAS loans 2,442.6 9 17.4 1 90.3 4 2,550.3 8 Exist.ing IBRD loan 11.8 - - - - - 11.8 - Other existing loans 1,880.1 7 - - 13.5 - 1,893.6 6 Proposed IBRD loan 663.0 2 496.9 15 315.3 14 1,475.2 g/ 4 Proposed ELETROBgAS loans 6,295.2 23 915.3 26 883-9 36 8,094.4 24 Other proposed loans 8,030.3 29 216.6 6 - - 8,246.9 25 Future ELETROBRAS loains c'I 1,026.9 3 - - - - 1,026.9 3 Other future loans - 921.1 3 - - - - 921.1 2 Total Borrowings 21,271.0 76 1,646.2 48 1,303.0 54 24,220.2 72 Total Financing Plan 27,909.2 100 3,401.2 100 2,391.3 100 33,701.7 100 a/ Includes Cr$7,973.2 million IDB-financed Emborcaqao Project. b/ Total estimate (Cr$6,1268B million) less price contingencies (Cr$J290.3 million) equals total base cost estimate shown; similar calculation applies to amount for each company. c/ Nova Ponte and Igarapava projects; expenditures start in 1978 and 1980, respectively. d/ Includes Cr$1,959.8 million receipts from the Global Guarantee Fund. e/ Includes: (i) states and municipalities reinvestment of sole tax proceeds; (ii) customer contributions in aid of construction, and (iii) ELETROBRAS' purchases of new shares. f/ From non-sector sources. A/ Total loan (Cr$1,063.2 million) less price contin%'encies to he financed out of loan proceeds (Cr$329.2 million) and less disbursements in 1982 (CEIIG: Cr$20.1 million; CELESC:Cr$21.1 million; ESCELSA: Cr$17.6 million) equal amount shown. - 35 - 5.06 While a high proportion (72%) of the beneficiaries' total financial requirements would come from borrowings, ELETROBRAS would provide about 49% of these funds, the bulk of which it would collect from power sector consumers. Over the period 1978-81, about one-fourth of ELETROBRAS' loans to the three beneficiaries would be offset by their reversion payments and the balance of ELETROBRAS' loans would be more than offset by the companies' collections from consumers on account of the sole tax and the compulsory loan. The Bank has offered to assist ELETROBRAS in securing additional financing for the project through cofinancing arrangements similar to those already approved for Loan 1343-BR (ELETROSUL project), provided this would result in better terms for ELETROBRAS than it would otherwise obtain. 5.07 The beneficiaries' financing programs also include loan financing by suppliers and financial institutions (46% of borrowings) and drawdowns of the existing IBRD loan to CEMIG and of the proposed loan (5% of borrowings). The proposed US$130 million Bank loan would be made to ELETROBRAS for a term of 15 years including 3 years grace. Of this amount US$58.1 million will be on-lent to CEMIG, US$43.8 million to CELESC and US$28.1 million to ESCELSA. The on-lending conditions provide for the same maturity, grace period and repayment schedule as on the Bank loan; the interest rate to the beneficiaries was assumed in the projections to be 8.5%. ELETROBRAS will charge the beneficiaries a one-time commission of 1/2 of 1% on the loan amounts, and service fees of 1/4 of 1% p.a. on the disbursed amount during the disbursement period and 1/8% of 1% p.a. thereafter 1/. The beneficiaries will assume the foreign exchange risks on the amounts outstanding. These conditions are acceptable to the Bank. The terms assumed for all other borrowings are in line with those customary for Brazilian power utilities (Annex B T-8 to T-22). 5.08 The states of Minas Gerais, Santa Catarina, and Espirito Santo, and their corresponding municipalities are required, by law, to invest in the power sector 100% of the proceeds of the sole tax accruing to them. The states of Santa Catarina and Minas Gerais have agreed to invest these funds in CELESC and CEMIG respectively, while the State of Espirito Santo has agreed to invest 90% of these funds in ESCELSA; in addition, the state of Santa Catarina has agreed to reinvest in CELESC all the dividends it may receive from the utility while the states of Minas Gerais and Espirito Santo to reinvest in CEMIG and ESCELSA, respectively, 90% of the dividends they may receive from the re- spective utilities. CEMIG's financing plan assumes that a relatively small proportion (4%) of its requirements would be covered by equity contributions by the state government and private investors. CEMIG has had no difficulty in raising equity to finance a similar share of its investments in the past. CELESC is assuming (proportionately) much larger equity investments by the Santa Catarina State government 2/, and the latter has agreed to pay in equal quarterly installments, these equity investments (over and above amounts in- vested from the proceeds of the sole tax and reinvestment of CELESC dividends). Presentation of evidence that payments from the state have been kept current is 1/ These fees are included in the assumed interest rate. 2/ Equivalent, in mid-1977 constant prices, to US$9.8, 5.9, 5.9, 3.4 and 1.7 million in 1978, 1979, 1980, 1981 and 1982 respectively. - 36 - a condition of the first disbursement of the CELESC portion of the loan. In addition, the States of Minas Gerais and Santa Catarina have agreed that if their respective beneficiary (CEMIG and CELESC) would not have sufficient funds to assure the timely completion of the Bank project, they will provide such funds as may be required in a form satisfactory to the Bank. ELETROBRAS has assumed a similar obligation with regard to ESCELSA. The Federal Government has also agreed to make arrangements satisfactory to the Bank for providing funds to complete the project if the funds available to any of the beneficiaries are insufficient for this purpose. 5.09 The investment programs shown in para. 5.05 include sizeable expendi- tures for projects which have yet to be justified in detail and for which financing has not yet been obtained. To ensure that the Bank is given an adequate opportunity to review these projects prior to their being firmly committed, the beneficiaries have agreed that they will not undertake any maijor projects until the completion of the proposed distribution project, unless they have provided evidence satisfactory to the Bank that the project is economically justified; that the beneficiary has adequate financial resources to carry it out: and that: (a) in the case of generation and major transmission projects, it is in accordance with plans for power generation and transmission approved by ELETROBRAS for the Southeast and South regions of Brazil; and (ti) in other cases, that it has been approved by DNAEE. A major expansion project would be defined as one costing more than 2% of the beneficiary's gross revalued fixed assets in operation plus works in progress in the case of genera- tion and transmission and 1% in the case of distribution. Financial Outlook 5.10 CEMIG has prepared its financial projections under the conservative assumption of a 10% return on remunerable investment. In the past DNAEE has been responsive to CEMIG's needs and has allowed it to earn average returns above the 10% minimum (12% in 1977). A 10% return is expected to generate revenue levels which will cover comfortably the utility's operating expenses with an improving trend. 5.11 As a result of increasing borrowing needs, CEMIG's debt service load is expected to absorb a growing proportion of its resources; thus, debt service coverage is expected to decline from 1.4 times in 1977 to 1.2 times by 1980. CEMIG's increasing borrowing needs are expected to bring a con- curent decrease in equity as a proportion of long-term capitalization, and in net internally generated funds as a proportion of financing requirements. The situation is now expected to be unsatisfactory in 1980-81, when debt service will increase at a much faster rate than gross internal cash genera- tion, largely because of the need to start repaying ELETROBRAS loans for the Sao Simao project. CEMIG's future finances would improve if DNAEE continues to authorize tariffs designed to provide a 12% return on remuner- able assets; another positive factor would be deferral of the Igarapava and Nova Ponte hydro projects (para. 4.03). The trend in CEMIG's financial indicators is a matter of concern and the Bank will continue to monitor closely the utility's financial position over the project construction period. In addition to the review of CEMIG's plans for future capital expenditures - 37 - (para. 5.09), CEMIG has agreed to be bound by a debt limitation covenant which provides that the Bank's agreement must be obtained before the utility incurs long-term borrowings whenever its annual internal cash generation is less than 1.5 times its maximum future debt service require- ment. In view of the large number of loan contracts entered into annually by CEMIG, the Bank and CEMIG have agreed on a simplified procedure for the administration of this covenant, which provides for the Bank's review and approval of the company's borrowing on an annual basis rather than contract by contract. 5.12 CEMIG has agreed to provide to the Bank for comment by June 30, 1979, A review of its investment and financing plans for the remainder of the project construction period, which will include proposals for achieving an annual debt service coverage of at least 1.5 times in those years. The Federal Government, the State of Minas Gerais and ELETROBRAS have agreed to cooperate in the review. CEMIG, the State and Federal Governments and ELETROBRAS would make their best efforts to implement the proposals developed in the course of the review. 5.13 As in the case of the other beneficiaries, CELESC has prepared its financial projections (Table 5-2) assuming a 10% return on remunerable investment; this implies that CELESC would obtain an average financial return of 15.5% over 1977-81. This return, aided by an increase in the average maturity of its borrowing portfolio (from 8.3 years in 1976 up to 9.6 years by 1982) which results in part from the terms of the proposed Bank loan, would allow CELESC to (i) finance an increasing proportion of its investment program with consumer direct contributions (from 28% in 1977 to 51% by 1981) with a 1977-81 average of 38% which is acceptable, and (ii) decrease the debt portion of its capital from 46% in 1977 to 39% by 1981. The increased internal generation of funds implies an acceptable coverage of debt service which improves from 1.5 in 1977 to 1.7 by 1981. CELESC has agreed to a debt limitation covenant similar to the one described in para. 5.11 for CEMIG. 5.14 The financial forecasts for ESCELSA (Table 5-3) are based on the assumption that ELETROBRAS would convert enough of its existing loans to ESCELSA into equity 1/, to enable the company to achieve an annual debt service coverage ratio of at least 1.5 . ELETROBRAS would furnish to the Bank, as a condition of disbursement on ESCELSA's part of the project a plan of action to enable ESCELSA to achieve this ratio. ELETROBRAS and ESCELSA agreed to take the necessary action to achieve this ratio annually during the project construction period,should the Bank request such action. The action could take the form of additional equity investments and/or conversion of a portion of ESCELSA's debt into equity. 5.15 ESCELSA's forecasts show that it would be able to decrease its reliance on borrowings and by 1981 would be able to finance 36% of its total requirements with internally generated funds, and 52% with consumer direct contributions (a 1977-81 average of 42%). As a result, the proportion of debt in its capitaliza- tion would decrease from 72% in 1977 to 53% in 1981. ESCELSA has agreed to a debt limitation covenant similar to the one described in para. 5.11 for CEMIG. 1/ Cr$202 million in 1978-1980 and Cr$145 million in 1982, in prices of June 1977. - 38 - Performance Indicators and Reporting 5.16 The 1978-81 investment program is expected to make electricity available to industrial customers as well as rural and low income urban dwellers. The organization studies and training are expected to assist in strengthening CELESC's and ESCELSA's management and to provide them with a solid institutional base to carry out their role in the development of their respective states. The targets indicated in Annex B, T-23 will be used to monitor the utilities' performance toward meeting these objectives during the project construction period. 5.17 ELEITROBRAS and the beneficiaries have agreed: (a) to provide financial statements audited by independent accountants acceptable to the Bank together with a report on the audit, not later than four months after the end of each fiscal year; and (b) to prepare such other reports as the Bank may reasonably request, including project completion reports. - 39 - TABLE 5-3 EI Finanial Statements 1974-1982 (is nilliacs of croeniros) 13'S~~~~~~~~~~~~i~- 13,75 1"476 <-77 173 14, 1491, 1031 l982 -cul(Ic ca c c-,rne-- y)…F----rc--- o-- T-- June 4977 ,-r-oy)…---- -- I - PE11L0(P9AILE INVEST=222 Ree-unbala i-veetment iUtility pla-t In serice t/ 4,541.2 q~/ u, I 8,03,0o 24, 4 49' 3c,'' ~.4 c,g y.l4 42,,o68.3 52,967.5 _ ________________________________ -/ungcpital 4/ 920.3 ' 30, I 0 49 1 . "1,73 i,o.1 17. AroIse -enuobolr in-en-ta 4,OT79 7,3'~"? 0,067, 17,42o. 7 25,0~44.5 ,0u331 4c,"49.T3 441,'21.'.4 54,746.7 a/ Annua averge (por ta-ep-r). lies: Accumulted depreciati- nai ar-triaciac a! 3 ~. o 1,119, I ,377.3 2,135.1 2,943 3 3, 7i-4.-. ',3,(.4 ,0 7,710.5 h/Forcat fiane represet i-vet-set in materials ad supplies A-c-au rd -osribc-Aion end g-oto 57.c 32.4 a , 147.-! 1,"1.5 13.5 212.-5 '49.S 267.7ony teea(deticlro-y) do P,,oc -eoo:rtlo- c/17,.4) :o.0) U flp to 1974 EMIGO roti.ated this .a.....t to reflect the allo...alto Iet r-uercble inveat-1, ,341.1 1, 754 .a 7,,73.2 2,0.2 7,315.0 '70'0 35,31.3.' 7 7,57,17 46,768... aniogs 00 e-egy anld in Dlece1her bart hilled to the following PtfI sl crssailor d/ 102 . 11LS 12.0 10.0 114.0 1.0.0 13.0 10.0 year 1o 1975 the atilty changod its rearding pr-cdar to the Aotual/ellooolle rna..oerstloo ~~~~~~ ~~~~~~~~443.0 535.- i935.2 2,4117.2 2.'32.5 . 2, 5~34 .4 ,'03 4 6-7 6.9 er-rul aethod of tcoo-o; 7 IT"r Ogr-z preoentod for to"t of -ercte d/ DNAil has a-thoried C1110 to ear 12%3. or enanera i - tvrt-et All-cahle s -oero at 3 3 5.;) 037.2 '473-,.3 2,232., 2,34~.4 3,5007.4 3, 7o5.7o 4,676.9 in 1977; 105. wa ososoed th-erefse- Dpnprcdiiaoi E e/C103 ,; 1q'.3 24'.?, V,.,) 712 1,13',..- 1. 234,4 1,501.4 fComputed at 3 overge eats hosd on straight-line method; annol Pnocc i12f 211.4 "I 31 i. i 331-.5 1(1.2 1,43,.0 1 ,53. l,9n6.8 --iaiato niderd 00epro-rot te-p-r hbsis; forcn Tlieare (otlea rhar Iscoo) and c-ahnge loss.es 12.0 049, 790, ----- - pattaions, -o-depr-clble asets ee- dedo-ted ifo- gross fi-od Och-r pecotseo costs aG.. I 30 1144 1.34. 14. 17'1 103. ,'. 2,152.4 a-ots- Icta' coot of sr-rOan 3,079,1 1/03.3 2,341.3 4,03>.' s. ThT~TI7'09 .,3P.3,2 0,0,0,1 42,277.' 1/ Peo7rsioo was-- forecast at t.i.6,,the rote applied 10 1976. Lean: reveces on ene-gy nani,0(7.,P . 9.4 4,~370 ,o- 4, , 7,Q83,o 9,6c0,o. 30,277.5 ~ See Tohir 3-1. Olter prtugracn 1'.i 51.4 74,0 - .- / tErgy purhasd f-a FOIINAS as euired -ss-in,g 00 averag Peceipte Iron Co-etee F-d --- ----- hydrological year for CEMIG0' hydra plents. Eacess >4fodo . '0racrto - - - i-- A diso-tr incress in 1978 to toko isto a..coost the osieiso ree~y rile j1Wh) a/ 6,787.5 7,620.0 '.179.7 10,661.6 13,096.1 11,342. 16 i,480.3 21,186.3 23,181.2 of the ne th-rnl Pl-et Igorpe otherise projected at abs-t A-eege ---au per kWh - Cr305005 15.9 '19 7.3 42.6 41.0 42.7 43.' 40.9 44.3 W4 groth rate p... See forcat of noeo cf enPIcYre in Acres 2, 2 A di-seete iareas in 1978 to take 00cc ao.....nt the -aai-ssioalg I] - IWCO12 STATE72NT of the ne the-o,a plant garape otherisa projected at about 5.532 mt oponatog revenues ~~~~~~~~ ~~~~~~~~ ~~~~1,070.0 1,303.3 2,561.4 4,537.7 5,4147.5 6,71013 7. :434 ,34. 10,277.5 gro-th rats p.o. Operntind coole h/ A dincr ene incroase in 1978 to take into occoont the coaasiesioslsg~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~S/A d -t i ... i 178 . k.itt ttb yc,rrhaord raoegy h/ 1/1.2 235.1 '32.7 629.4 445,8 434,9 450,3 70'2.3 799.0 ad the -e cle--l pia-t 1arpe tesiepeojerted at beot 67. )e P-eintion k4/ 1 03.3 I4( cy 22.0. 489.9 711.2 440.6 1,135.3 1,31 ,541.4 groth rota p.o. (pertin,g e-pe-e, _1/ Do -t repra-eo aepeoted fadl expense hot CElIG's c,etribotiass tc ernoose Ii 110/.2 213.5 53.0 037.1 534.9 s22.7 02 675.1 69999 the too-o f-nd-atahllehed to pay for alt feel ope--e in the region; -lcrooad sappltrs L/ 7i.5 123.1 212.3 307.0 340.6 319B.4 37709 300.1 414.0 tie f gore .oer.. opo,ted an-adioc to . ieie issud hy the 4001. other -op__n Ic! 31.9 77.1 '33.11 126.4 i39.2 147.7 106.1 163.1 17 3 .7 It/ See Aooa B, T-12. fool 1/ - - - 0.5 2'~. 7 31.2 49 4 112.5 103.3 nI/ Ict-eret d-rtsl r-tn-trnia is added to the fiacd et o-1ue at bOot opsrntiap costs ~~~~~~ ~~~~ ~~~~~510.1 5. 2'. ,;. 2,331 ,o52.7 3,4. ,3o.S ,63. the rote of 107, on c t-utioe ip-oaee-, -ccodiog to Deoe-- :3perct4-it itoo- 563.j "'11' 1,200.5 , ,4Bq4. 11n.) 4,137.6 ,~.u4.4 5,233.3 6,983.7 LOn 1506 (12/23/76). One: Pevernic- LI 112.5 211.6 3i411. ' 0. 1,171.2 7,4045.2 ,3, 1,906.8 al Gooponad at 67 .o set iecoor befor tases, arcoding ts Desre-law Net oa-operting ..expear 38.3 1,0) 49.5 --- - -1506 (12/23/76). I-oc mOof- iaterest nd tosse 417.5 71l.1 425.4 1,37-. 3 7,232.5 2, 7ot. 4 0.'.4 3vo. , 676.9 2/ Sec Aone F3, T11i. c5rnt ap st 0 i44,7 000.7 (45.3 1,37"9 iL,7cL.4 "/2, ,)7.4 7,41 .4 2.3(5.3 2,742.8 _j/ Mont of ELETROBRAS' - ior -alode finaning af ieteres d-ri,g Thoo: Taterect c.rnrged ma corstotsztios s/ ~~~~~~ ~~52. / 107.1 504.2 79. 3a6.9 9471 5,2 ,5. 651.8 co..ottacio., 'In Tucer-et oenee- 62.0 1l. 16. 34'.u 778.1 1,7c0I.O~ 1,524.2 1,2,12.0 2,091.2) T-/ Ild-s (i) -at dividend pay-oets: dividends ar declard erey neo bore t 5.36 32.3 22.0 24.3 31.3 51.1, 65.7 65.6 116.2 sin -atho at ths rate of 12% sO -od-ofperiod capital Net locoor 345.0 4,3u.9 742.7 1,8. ,7, i,4,54.1 1,340 2,107.4 1,975.0 and paid in, she -et -7-et`; ELETROBRAS re-oveat divid-od in aooti s-ffiolent to aseai 167. i - 00U92ES AND APPLTCAT!B (IP FUNDS2 capital otare; tha State of Pline Orris reiorse 90i. 2os-cco of its dividends in 0EM1G, sod 107. -o ER13IG, C111I0's 3rn 2.tro .hs ear o 571.1 3i4.' 1,3 -' 2,7-;0.4 3.YlaJO 4,t-' 4,. 4, 9-4y 6,218.3 s-bsidia-y; and ,eas: Pe1t secion: a-orllottn 2' 193.3 2024.c '(3 1 ",71. 1 919.5 1' ,1 ,~ ? ir, -':1 "-'.41r.0 2,261.0 (ii) incon tea: se -ate a; p.y-ee is node with ose yea lag. lattere n/44,7 750.7 0~3, 6 1,37 -7 3,704.4 l7.10, ',LJL-4 2.663.3 2,742-.8 T-Lnridaa; (i) state and muiiaitoIrfeteto sor ta- Irsoeth sovine 338.5 403.3 3 9 130 a,0. 3,3. -77' 4,79.3-T 5,03. per-' Less: Itoereat financd 14. lons--~. 13.2 1392 ' .07 3 430q,',4 70,s7(.3 55. 726.3 lii) -ct-oncerhna nads osrcio n rIot dell service 237.0 464.1 743.' 2140o i.3. ,':02.7 3,706.0 8,177.1 4,295.5 (iii) PLI.TROBRAS' p-rh--e of se share is aoaune lea: Oter LI 92/I 903.1 124 .2 19 2 .4. 307.3 575.5 420.a 469.9 -officie-t to naistato a 167. capiro share when Ne aiternal -ah g-eo-rtion 131.7 '40.-3)- 255. 410 0 705,1 1,133.2 460.7 -2.,429rinveted dividc-d -ar i-affiai-st. 2e rcop/al anrtrihutio- 2' N.A. 3l0 300 707 5 7(0.31 633.2 721.6 65r 82.2 --I cotost Joar- 1977 ounrs Totot --sue di-tec . tanribiut.. 131-.7 Ph'-. 7 ,0 , 111. ,r. .4,0 2351o r A-se 8, T-10. porri,:nintidg -377 1,558.2 2,043.¾ 3,,410. 0 ,430.3 1,2oc3 651.3~ '0.0 22.0 vi_Inldes State aed rirato jovetrora p-ehacos of odditi-1a capital proposed 19B0 loa 1- / -- - - ir4.- 13' 0 320.6 3. 20.1 hiarr- 1-her propoond nod fituro lo....- 866.6 313.1 4174 ,663 -da.4 2,834.8 a!See Table 4-1. Istsi boerawitgo 25! 207.7 1,85. , 35 4,282.6 5,595*3 598.8 452. 2,824.9 0/ n P - net page. 30-saoc-pitnil -a,trihutian 25/ 130.1 40,:;4 90.0 430.7 261.1 7p, 2 381.4 Cao'l Source 1,223.0 ,0.9,1. ,5. ,5. 4. .6. Appll c-t ionsI Ccnntr,c-icoc aragron: nogoine w-ki 1,110.1 2,215.3 3,1li~. 3 3,54-0.' 3,87)0.7 2,175 7 2,1~o0.4 i-. 311.3 Proposed dilstribsti-n project - - -- 134 530. 0 2,22. 015.0 - ater- propoaei acd Deta-n pr-je-ts - - - 1. r. 2,3944. o , .r :,O.o 3 1 3,86 lonerest dori,_ coo-t-otas 41.4 13.1 ,O 279 4:,.,3 630.; 1 llO,j 1902.7 728.3 olnoecatpro,,rao 5/ 1,41., 2 0. ,1, 5.4. 73371 7 1 -,t18 02 5,475,7 4,328.2 I<-rro- 1'-tcrilg no.pitl aad oth er appli-etoes 77. (24.') (55 103.5_ _219.7 52.1 364.1 121.5 653.2 lThro applloal 0,0 ~~~~~~~~~~~~~ ~ ~~~~~1,224.5 3. 6. 5,954.5 72 256.8-- -,47 (c-t. 4Cpoe f I -40 - TABLE 5-1- FnnilStatemen ts 1974-1982 ti illion of -coei-u) 1974 1q175 -1976 1-977 1976 197 1960 19613 1982P -Actual (imcunrestoarr-------y-…...--oreet (im Jam 1977 c-cceny)…--------- IV - BALANCE0 SHOEEP yl Under the B-uilian syant- of ac...onting far monetary corretion fiend GrSSEplSmth ev ,6. 6995.0 9,663.6 19,768.3 28, 24.1.7 37,352.8 40,536.4 46,437.1 59,302.5 assts and -cu Ialted depre.tett-, and debt sbett suta,wr Le-s: nm-lete dep ... itiw676.6 1,054.7 1,332.9 2,201.8 2,338.7 3994 3092 6320 7875rnmdwt n erlgtruh13;omeomielsa toss: ocoosolmind depreodotioO 36923 3,3~~5140.3 3,330.7 17,566.5 25,303.0 3344.4 3347.2 42,105.1 s,4.o of end of acrinyea in-lude balances os of the sod of the m St Pltt- So enroe 1 7338903 3 299.61 6,326.3 10,841.7 9,712.3 7,77'4.4 iii1 y ,6 4 -,457 -ou ye an Ysa eada of that -dat 197s th t-rq-tlyea tc_l_to onefruuouo to pogress (570~0~'t23o lo457.0 2,426.2 5,0133 6,21.6 445,6334 2645 475.71ood otout. For 1977 and soh-quent years e cyst_ aili apply, N.e.t Stan ses52119.5 1438 14.4 3. 3. 143.8 143.8 14. oe hc h --oesiigast ilh lootd Inveeteaute ' 98.7 123.2 ~~~~~~ ~~~~~~ ~~~~~~~~~18. 201.1 205.4 213.3 241.2 263.8 569.1 foh1t1da -- rbIetoblej eortn ua133.6 32. 418.8 718.7 876.9 1,036.1 1,716.5 1,326.8 1,541.6 MlmtarOala md euppllaaao 169.2 229.2 369.6 593.7 847.3 1,120.6 i,Ž16.i 1,453.1 1,779.2 e/ I-oet-rmt in ER0410, CEM10: snore electrification -bhldiary; ton- 69.,2 6q.2 69.2 69.2~~~ 69.2 eultdated tote--te are mat sho hot the impact af t....iidsti-a is Other aroo-tc re-ietvble 33.1 220.3 57.5 69.2 6fut,Es 69.2 69.2. tt9-1.2 fCEIGI tt. Totl omrr--t ase.te 434.6 92O2.6 1,027.5 1527 ,984 2,459.2 2,74. 3,9. 3,639.1'.. out i-mofios... bl.rG~ toa1ast9ar7.76f).40s oa Deferred and other oseete 1-01.1 228.4 197.3 237.4 032.4 237.4 237.4 237.4 237.4 asEts as. of 1see1ba 1976). .h ..t~ - lotelaeset 6.21,5 1045t.6 15,60.2 32392.1 37,39 0 44038.2 49,77.1 5,943. 38,71.0 a! tetjoate it 11/2 ooth3o umm0l58s2 operting aste CSOpiSTT1EdS -- 2,976.2 4,582.2 6,453.1 52,655.9 14,418.4 16,510.6 18,851.7 20,434.7 24613 0/Oyteat3.uynredgsspntisron apiZts- md rnaerrl 2,727.1 4,9480.0 8,335.6 15,420.9 20,071.8 24,423.0 27,658.3 30,114.0 30,727.9 ad/ Sm-iodn- i) -apiteli-tia- of dIvidends tens mats r/) toes: -nturitias aithin oeYeor -176.4 229.8 s26.1 9.5 1,230. 2,362.7~ 2,061.0 2,261.0 2,914.0 (ii) o-pitalicatia of sale tee pra-eeds (see eats / Net lotg-term debt ~~2,528.7 4716.2 7,529.3 14,854 18,841. 22,060.3 25,597.3 27,833.2 27,813. i)prcueufadtolshes(eotsf;ad Long-tarn debt-metovithes wittim one yesr 176.4 229.8 506.1 913.3 1,202 2362.7 2,061.0621.1.1t7,914.0 (do) .rtaine Taring. A-ooute- ymybte anMt vol i65.4 270.3 523.3 763.3 976.4 653 813 731.3 626 a/Sant a ns ,29 Ote porent251b 2e 190 6.5 39. 35. hod502 574.4 5 741,3 574.0 af Computed at the hietarloul average of 1.6 me.nthe' i-astment Total current liahilitiee 462.8 73h 14.1 2,236.3 2,47.0 3,8693.2 3,536.7 3,566.7 4,3.emndtrs Deferred sod other liebitiee .j 230.8 392,.6 393.5 1,014.3 1,366.4 ,9.1 1824 ,3. 2,372.0 aal Inclde decard dinideeds. Tait1 ltibiltiea 6,213.5 10,5.6 1,012 30,392.1 37,393.0 44,058.2 48,278.1 34,945.6 38,796.2 6h/ Total opantiua costs s p,reret af aperatimgrev-a-- ai/ See I , preciou page. V5 - 6ORK1N:3 2AP2TAL w4 Opert ieg i-v esPer-et af -v-rge net pb-t he service Metertele sod euppilee aolS. 169.2 229.2 369j.6 59Q3.7 347.3 1,123.6 1,216.1 1,433.1 1,779.7 Acooste' reivuble ab/ 133.6 327.4 4i6.8 718.7 376.-9 1061 1,216.5 1,306.6 2,341.6 Other reonhvables 33.1 220.3 37.3 n9.2 69.2 69.2 69.2 69,2 89.2 Aeeounta payable sf/ (165.4) (270.3) (323.5) (783.3) (976.4) (963.3) (671.3) (731.3) (662.6) Other pyaybles(2.) (8.) (9.) 1339 964 302 544 (574.7) (574.07 Total working anpito1 ec-um.5. 531 (31.0..h.4 72, ,3. 1,303.3 2,133.4 HArnial oh..eg 9. 362 3. 1. 4, 3. 447.4 649.9 Sash belm-eor 87 157i.22. 0. 1. 4. 265.6 269.2 Totel ounkilg -sphitl102 380 0. 6. 416 937 1,9.1,6. 2,422.3 Mounta ohenge 1..204 3. 1. 3. 6. 471.5 653.2 VI - FINA4CIA INDICATORS26 Opearttog ratio 6 h 47 31 3 46 43 39 3 39 36 Fete of -et-r 0 renoe-ble aeaets (8) p 10 .2 9.5 11.6 12,0 10,0 10. 0 10.0 10.0 10.0 Fies..aini rate of retur (V p4,? 16.9 16.9 18.1 iO.3 14.3 14.i 14.3 13.6 14.1 Tim esat debt servi- oo-ved by gross internal o-h gene-stiomi. 1.8 i. .6 i.4 1.5 7.6, 1.2 1.2 1.4 Dsbt/eqaity ratio 46/52 52/48 55/45 55/45 36/42 60/40 59/41 58/42 56/44 Wfeighted avrge reainio,g repy-ynt period of debt oatetsoding at year-sad (years) N.A. N.A. 12 Wetghted overage toteveet rnte n0 debt oatetnndiag at year-ed (V N.A. 8.8. 9 eAnt -otnibotiua to invatanot fron net toterool --sovue (-eludi.og Sector enphtaluert1 io)% 11 (2) 10 8 12 13 7 7 26 dA-Ie umtribotiuo to neenn from oet internel n--rae. (inoloding sec tor unpitel oooteibutioos)(%) N.. 1 32 9 2417 20 41 - 41 - TABLE 5-2 innilStatements 1974-1982 (is m1ion of cr-si-ne 1-9711 1975 197-6 1987 198 99 1989) 193 i8i 196 - 90218 .8AP15 1200P730E51T ~~~ ~~~-A ctual (in current - -en y)-…-- - - -- - - -For ca t (in inns 1977 cur en y) -------------------_ __ __ __ _ __ __ __ __ _ __ __ __ __ Remoceerble investment Ultility plant it crevice gi 557.0 851.i l,092.7 1,885.2 2,4B7.,9 3,073.8, 3,182.2 4,643.9 5,533915 .!..asa average (Pro rate temPer) Plant in erde Working onpitel bi 4.39 8.2 50.3 402 2619 325.3 390.3 447.8 303.0 Grons remunerable lnvntnent 851.9 959.3 1,193.0 ,9.m 2707 3,403.1 9,7. ,9.7 6,093.4 i vrg ehn aia;se eal ie ,na ae Lies:s cnocn depredation 91.0 110.0 158.4 248.3 329 45-.1 s29.6 667.9 834.i s,eocclctnd eontributkin end gruntte 101.9 137.0 186.1 34.2 41.6( 4.0 3 7.7 69.4 q6 a Up te 1974 CELESC estimated this meat te reflect the ailewahie e-es.(endflien-y) in prior remunerationc 7.) . - -ersigenenergy saId in D-ecener hat hilled in the fe1llasiag year. Net cruombersir Ivestacot 558 623 505 1519 ,7.2 ,3.0 ,5.2 4,353.4 5,129.t In 1973 the sempany chaged it. recerding pre-dere te th.e acrual Sate of rnuneratio d/1. 00 1. 00 1. 022. 00 10.0 method of ac-eating. Aotoa/sllosoblrremuneration 65.5 61.2 79).8 165.2 237.86 9. 5. 435. 53. d/ Fore..ast - -cvtiv-iy an 10%, the~ ammn allowable r--serti-r Cost vi senvder Allco.ble reueain65.5 61.2 79,8 185.2 237.6 293.9 398.6 435.5 512.9 e/Ceoputed at 3% average rate base.d on straight-tline method; an-al Oeprroisti=c n/14. 8 25.2 34.7 56.6 74.6 32.2 113.5 133. 3 i66.2 --etalaiosceieeds sae ge benis. Re-reo 58 i 13.6 i9.4 14.4 73.4 39.5 123.0 151.3 153.8 221,6b Tunes (cure than income) end nuchange Innsee - 4.8 0.2 0,1 0.1 0.1 0.1 0.2 0.1 j/R-vreinn was f--eat at 4%, th rate applied in 1924. Other op-Loino cots 269.5 386.0 61p,8 1,141.8 1,350.1 1,561.7 1,793).2 2,1I(3.5 2,328.2 Totnl eest of service 563.4 19-. 7641.1 1,439.1 1,76. ,7. .2.1 2942 3,227.0 See Talir 31-. tes,s -eenurs ot energy snies 327.8 538.6 752.0 1,416.5 1,733.9 2,037.3 2,354.0 2,99116. 9 3, 174.9i other operatinf reveueS 6.6 10.2 19,1 22,5 398.0 33.0 98.7 47.3 52.2 8 lcclda rve,nen fron energy sales only. receipts iron Guaratee Fn-d 5. 40 -- Exeres (deficienecy) in remn-ernion 131.) 5. 30-----i Energy post-e fro ELl1OUI as required asuig naerage 2?nrgy car j/1,273.8 1,522.1 1,877.9 2,232.0 2,4- 3,104.1 3,618.7 m8. 4.0.7hdloiayernsEtSshdrpat. Averaee-r revnu per kWh - Or$ens 25.7 35.3 40.0 44.0 6.5 66.7 44.9 30.1 67.2 i / Coat per enpinyec caeoted to isors- on about 3% p-o in real terns time the eapestd omber of eqircd employees. lee fnrecast Nert OprentingZ nevensa 332.4 548.6 771.1 1,439.1 1,761.9 2,070.9 2,432.7 2,999.2 3,227.0 o ubro alye nFnsB -3 Opersit cst 163.8 226.2 370.7 732.7 305.1 1,ois.i 1,292.0 1,639.6 1,767.3 L Eapcetad to grow at about the seas rate as tie nuaher of -ot-nr. DPunchase enegy 4.8 25.2 34.7 56.6 74.6 92.2 Li. 193 6. Persnnel 4/ 74.7 119.9 184.7 321.3 353.0 970.2 388.1 404.3 424.8 dipatch a. portiss onithis titra doe nth rereen asetbdifuel Mateciols and supplies kI 11.4 18.2 21.0 35.4 39.3 44.4 30.0 51.0 56.5 eress u 101' n ihtnst t th egicession fund establishe Other sapen..s hi 15.3 22.7 27.9 43.0 42.9 59.4 64.7 73.5 75.2 to Pay for all fuel espen- ctergo;te iue eecnue Fuel 1/ 0.3 3.8 8.5 2.1 2.4 2.4 2.4 2.4 2.4 according to guideline Issue.d by the 000OI. Tend operating cocts ~~~~~~ ~~284. 3 412 475 1,190.1 1,124.7 1,653.9 1,912.7 2,.313.9 2,492,4 opertin iceotme cst 48.1 137.4 .123.8 240.7 317.2 417.0 510.0 621.4 734.0 r, ./ 555 Ance B, 7-17. Piu:receipts fr~om ursteefei .6 6.0 - - tenet receelptc fro 13.6-eF- 19.4 36.6 75.4 99.5 103.0 152.3 185.9 221.6 fl/Inte-et during -nOtructine in added to the fised asset values at Lsisk no-oeatin eLI ne (3.8) 2.4 (2.3) (3.5) (4..6) (5.14) (6.4) (7.8) (9.7) the rate of 107. on cosrc ioni pr-g-es, ccerding to Decre- Income before Interest cod tseam 1:35.) 2. 95.3 143.8N292.3-99.9 365.1 43.9 521.7 La 1506 (12/23/78). leterent repcenr e 9.9 13.2 41.4 91.0 119.1 130.0 i65.6 138.6 304.6 teen: interest changed in cooskenetlOn eJ 3.7 4.9 14.1 27.7 li.4 17.6 33.0 36.4 36.4 /C-nputed at i% on cet in-ne before tsar,, acording to are-a ret intereet empener 6.2 10.3 37.3 43.3 97.3 112.4 132.8 153.3 1cs8,2 1504 (02/23/74).(12/23/76) moons tuns o 0.2 5.6 3.7 4.7 7.4 10212.0 19.3 1. rTet income 28.9 105.3 64.3 0. 3. 7. 220.5 27.933.4 1 See Annen 1, 7-14. S.] Figun- fee ist-ert finenn-d by loan were not avalable; istenest ITT - SD E il PIOT O2P F M1U80 hsrged to cosnnin 0Iih in os the .ses.rveti.n side, was used (r-es internal cash genertion 52.3 149.4 130.0 225.4 316.9 391.,6 478.6 583.7 697.9 as C ...5Y. tens: debt service: imortleation ~~p/ 10.2 32.8 33.9 55.2 130.1 183.2 173.0 192.5 O2. Includes: (i) net dicidend paymentc: dividends are de-lred-eery cia interest sf.v 19.2 4iL.4 78.7 110.1tth121.4of i%d.4 iefeird .....d 6 Gr-so debt servie2.1 5. 7. 739 20 220.i 314 71340.9nntoathrtef10ccpfredsaend4.e teen: interest financed by loans _qf 37 8.9 14.1 27.7 ai.8 17.6 33.0 36.4 364 oneoc hares hed eop-n -at tenpnre basis1 for 3 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~projecting, hese cates were pplied on the sueage Pet debt aervice ~~~~ ~ ~~~~~~14.4 48. 12 142 211 29. 98.' 34,9ststading shares. The Srtet of Sante Cstarica sed Net d.bt astyi.e ~4.6 4.2O 19.8 18.9 23.1 28.6 33.8 40.'4 41.7 EIETEOPRAS -siecet 150% of their dividends; Cthere rf/ Net inte-nsi cash genenstion 31.7 94.3 69064 47 5. 1.4 2i' 7. (ii) lacstea: .55 note 2/; payment is reds aithse Seto cpital contributions si45.0 56.5 iit.9 133.9 160.1 I'R. 8 238.4 2733 2. year lag; and yctal cocourer direct otiutns74.27 5. 160.9 194.2 3.1 253848 6.7029(iii) statutory participoti-s granted aessally hy the porrowitege: nolsking 81~~~~~~~~~9.5 82.4 123.5 303.1 17,4 - - -hl..lit.,po... .%o proposed7300 len -/ - - 19. , 160.7 203. - 11.4 21.1 7h6sildmsMe tha ronti-d at .p %cipesone other proposed and future Ians -- - 049.4 333.3 219.9 2282 3093.3epnn,te17euhredspn. TAid borrowIngs i/83.5 82.4 123.3 48 ~~ii8. 432.15442.9825f. h I-lodes: (4 state and mnictpaiitirs' ssin-stncnt ci sole tam lo-eooropital contributians e/l - .8428tŽ 3. rees T~~tal s-r1c. ~~~140.2 _234.~2 24. 81. 788 95.4 921.1 994.2 881.1 -i)csoe otribution In cid of -ost-sOtloc; and dealS cat tons (iii) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~BELTISO8RAS' parehasen of - shars.- _onet-ution program: ongoing works 142.2 200.4 443.5 41. - - propiced diatrihotion project - - - . ~ ~~~~~ 152.6 109.7 559,9 553.2 - t nenttj 97-er pothrpropesedi andfuture projects - - -- 4514,4 261 225.5 39,7.0 780.2 t/I osatJn 97eonss intherestp financd by ftnn proj8.e114. 27.7 21.8 17.6/ 33.0 36.4 ,4 Tetal conetrue ntneroest fi1h.9 21.5 45.d51.3b2,8 18.1 31.9 3a.681.8 ii See Annex 8, T-15. Tnieeet mckn catet-pitgalmn othe spLOtns e.43 147 (7.) 30. 118.0 71.2 83.2 114. l 1 44. 813.8 344.8 758.4 9011 994.7 P41.3 7/1gcldes otato's purchases c additional capital shares. The Govern Totals ipplcatiocs 142.2 234.2 294.1 re- if nt fi leset aCatnina has -oncicae.td to the Posh inn lotenti-s (cent, on PIbs 42) SeTb.41 Al,, See foV -.5 c . ecat page. -0000 -D ,o.-. at .1001-olol 01 010 10 01 01 di 01.04 10 11 '011.1001 4.di 1010010 0 '01001 0 0di4,1'di 01 ' 01di10di 4, '104, 00 4,didi.1Odi 0140 01 "01 01 '0001 -1001 1001 00.o101001 4 ojo 4 104 01,010 010 di 01 di .0 1 01 di di 100140000 .0 di 01 di 01.004,40' 0 014,' C 1001.400 1000 di 10 "00 0 . di 44 001 010-4,  di 4 -100.0014.0110 01 4, 00 10 .1010401010 01 di di 00,-'-0 00 0 01 0100 01 110di.,0di.-10. 10 0 10 1000 01 - .0 0 di "101 01,4 01 4 000104,0 1 0 4' 010 -0 POlo-did., 4 1' di. --1000 4 4, 1001 010 01 010.0(0 40 10 0.4 01 10 4, di. 010 di 'di0..001.4, 4,01 00 4 4, 00 01 10'di '44, 4, 1010.04 01 00 01 01 4,0 4 01 0 01.0 0- 40 01'0.0di 0 II-.- '01 01 010 *0 0. 4 10 1010 01 10 41100 '01 014 4 (00010,-'4., 10 .-. -o di '0110 .0 '-IlOdidi 011 10 01 0. 10104 - 00 010 01 0010 01'4, 4, 4, di 10>00 .0 0 44 40,1 014, 40.0104,10 -101 01 010 di .0 01 014 '10 4 0144 0 1010 0. '04 4, 0 '010 .101 10 100110.44 .o4, 0 00100 44, 0 4 - -- 0.0 0 001401.001 1,0. 001(1 10 01. 10.01 40 0 1000101100 0 4, 00.10'1010 di 4 10 0.4, '1010 4 40400010 di' 0 001100 10 01 di di 01'. 0 4010 10 "1 ('104100.10 0 01 01 di'0 1di'1'0 "'.10 4,004001-0 104 40 0 0 10 0 10 100 '0010 * 00104,0110 001 01 4,00.10110., 0. 0 4, 100 0001 4 0.1000101 .0 01 4,1 000.01010.4 10 01 00 4-10 0101 10.1 '-1 401 01' 44 4000. 00 4, 010 di 0 010'10 .1 0.' 0-, 01 '10 100 4410,01-, 00.0000 0 0 01 '-1>011000 10 4, 01 41' 44 001 004,101010101 000. 0. 0010 10 4, 01 00 1010 01 004,101001.-.. Odidi 04 .0 0 I 01-00101-01 00 010,10 444 0100. 10 00.0o10 4 0 4, 4.14.01'di >10410014.-. 10 10 4'0 0 10 44000101 01 401 '0100(1 -.0 0 0100,1 0 - 01 1001 10104I1001 01 01 0101>0. 101010 (1 di010 0 01 01 0. 0.0 44 4.01 10 0000401104 0100 04(140 0, 010410 01014 0, 10 01 0010 0.0.4,4,4 101 4,011001 011 di 4 01 .o0'00 0. 00 0 4,01 10100001 1004,4011.0 10014, 01 1004,10 00100010.4, 00 4.0101010104, '010 01 0 40.0 I 0 010 001 01 -0010100004, 404 di 00 014 4 00 0, 10.0 ".10 10 004,4 0140 10001 '0,04, 0 44 00 010001010 0.014, 44,10104 4, 4 4 0001 -'10 '00 4. 4,0.0001>4, 100 0 4 404 10 10 10 1001 '4 di'4 0 01"- 10 0. 4 00,0.0-.. 0 0 '0 41 00 0010 00 104 0 00 00 00 10-0 (1 0 100l.0000di 0100 di 04401 01 01 01 014, 01 4 010144, 01-0 01-0-0 - 01 01 10 0 4 4 000 00 0 001,01000004 00000 4 104,0104 0 0 di 04 10 01 10.010104001 10100 10 100140 0. 0. 0. 0,41 0, ,0"o4, "'10 444 4, 0 400 01 01 01 00 0 01 04,00.0000 000 01 00000 10 0 0 010 01 4, 01014010100101 000 0. 01000,0 4, 4, 4, 000. 10 (10 -1100.010-1010 4-o4 0 01000-040'10 11001110- 0- 404 000H (-H '00 400 H 410411.0. 010 01.14 410 114 00 I 10-400410-10020400,40, 4 1001101 000-H '00-0, 000400-000110,0044 10 Coo 00,0 04 04 0 -0 04 I 00(00,10 0400 0.-004101010-,00.000. 000.0101,0 0-101001044 04014 (---44 00 00 11 0044004000.10 00 100,0,000,0.0.101000 H0-0,0.0, 0,10 - 00 000.00040.400 04 00 0.10-4, 0- H 40 0000 01 00044 H 40 10 10 oo 4 04 0-104 100010410001401H4 00000.401'4000400 000.440,-, -01-44,4 0010 HO 0' 1000100,01404,0,100 H 01000140010040 00000.4000000-004 10-H ,-. 00 01 00 '-1'-1I 0. 00000 01114 10.000000, 100,0004000100 -44, 000 000, 1140010 0110 01 04 440 00>01010-0 40000001000 4-000,100.104 00104. 0010010-0000-10440, 0000 4.0 14 0, 4 0. 400. 100,0,00-0,404,4 01-0000-4040010040 4 0.00100000010,10 40 0-0000 4 0, 4 4400.04000000 0, 400-000,000.10 000, 004000.0010 01 O 4''-' 00 44 0,4040044 01001404-01 00- 00.40440000.0,>' 04 0000 0,01041000100-H 40 1001104104040 014.0001044 H 4000404 0000 0010 4. 00 001- 0. 044 400 0, 00 00 0 0, 100, 0-4 10 10 0, 4 04'0 00 10 4 00.00 0. 00 00 4 4 00 110 0 0110400011010 01010,000,001.0010 41041000,01.01100. 010 404 '00,0110000-0,40,-, 00410011010404- 1010101040,404401 4000 0010 0 0, 7::: 104000,000000 010. 004 - 0, 0010100000410010000 44400140000 001 0001-1044 000 4 000000 4 H 10 00,0,0-00.0404104 40,0, 00.000.0000 00-00.00100,10104 1014 0000 I 1400 0 040400,00. .o9o',0-I( ½-i R3A§OO 10014 0040 10 00 00 014 1010410400,004 01 10014 010401.102500 '010000100-0,00 40401 010000 4 0 4 I 41440.410o-0, 000 04 100,00010000 0. 0,000,0-10001410(0 00 01 0, 0010 .0 0, 00 o' 1- 1000-441040000,-, 40100,100.040.000 10444040.4440, 00 0010 00 10 1001 00 025Aoo40 I%6O41 &>00 10 404 0,10 00 04 10 0- 101010.41140-1--0 0,4'0 40010 0114- 000,0001010001010 010010 4 00 40 --400 4 0010 10 1004 10 00110 0,H0,1 4 -14 0010 0410400000 0-0.00 000,0010000,- 10440001040,00 000 410 10000001000.0001-4 10 4 400441000 00000104401104 0000, 0,4 10 4 01010000000 000- 01.10100004040- 01001004 0041001 10000, 4 - 4 4 00400 0, 4 040000 10- 10 0100- 0440.0.0000 0010100010410 0-0 044104 4 000 0.0 0,'-0. 0- 4 0100 0000401400,0000 40,001000100100000 4400, .0 000 400,4 1010 0 01 0- , 100410100 0.000-0. 1001 00040140 0, 0,0, 0,40.40,0,40 0000 0,1 0 14 o''4'-'- 1 10 0 01 10 01 00 14 01 4,4014 0 0011 10104 4 0 01 00 10 0 -11 10 0 0, 4400 4, 0. 0 00100 0 0. 410j100 5olo 4, 4,004 -.4 0114 00 1010010 4 011001 00 04 0! I 0 '0 10 10 44 1 10 010 0000.0 01 4 4, 004,10-104 '0 0(14 00o10 10 011000400 0101 019 0100144 00 04 di 10 00010 -.1001 41044-H 1010100 '0 001109014 41-1 10! 440440 0 10 >01 4 01000101 444 .01410 01 0. 01 04 - 0401 40-40 100440110 1001 000000044014 H0001 5Ii 0. 0014 4, 40 104,010144. 4 -4104 014 -0.4 0.0 00 01 01010 (-1 (1 01 0 0404, 0. 040.01400 1000 4, 0 10000100401 10 104,100.0400 400010120 10 00 00010(1,00 0 10 00001.04,0>11001 rtiK 10 01444 100.140 04 '010 00,401001 01 010 1.04010-01 0.01>44 0 44-4 4,0101'001'10 010 10 00'4-.-- 401 4, 5$t5½-o005 00 44410 5 10 4000 0,1000401,001 10000001 4,0110 004,0 01 04-400,000- 00 000 '(10001 0. 000 04, 011400 10 010100104010-0 01di0000100101000404 1001 0101'>11000 01' 0104, 1010101011o-'oo 4404001 10 010 010 0.4, 10 4,010.' 00 4040 00100.0 '10 0.141-,o 010000001001104000 014 4 410 0 p1400 40 201111014401014 00 04 000 0 01040100010 0110 4,1000000 10 001001O000'1, 101 00100.,, 401 0. 100, 000140-1 01400010 0.0 00,.4 0 0.4 '0400,0014004014444 01 01,4040144140.001014011404014 1001401404 10 10 10040 410 440 04,4,011-04 0 '-0 0001104,0 0,4,04,04,1001001 100 00 0 100400040.0010C 4 014,10 o10 01 000(1 0, 0000 01 01001001 104 0 04,01010000 '004 -0 0 100144 0014 10 0401004 001 01014100.0004,----4 01 0011404 010 4 -010 4,4,001 2 5.-55 5 0455 5.-. 5  41 5 0504 10. 00 - 43 - TABLE 5-3 ESICELSA Finunctl I caton-ts 1974-1982 (n million of oruairs)1974 19'75 37"6 1977 1978 19~79 1990 141 56 -Actual (In curret curreny)- ---------Forecs (So June 1977 corooy)- ----------- IlLilit: plAnt in enrobe 0/ ~~~~~~ ~~~699.o 1 110.2 1,523.6 2,547.2 3,0o . .11.0 3 F4 1 4,2.0 4,795.4 I AnnuaI average (Pro ernt tenPo-e Plant in evin -ioilco copitlo t1/ ,81.9 64.6 07.6 174.9 201.9 213.6 2o~ 90. 6 335.6 Gros ---onrolr ir-et-nt 779.9 1,179.6 1610 2,2. 3236 3,51,2.4 4jo101o 4,715.-4 54191 See detadle under V , cet pogn. Icon,: occunolted depreulitio- 46.6 7). 0 133.1 219.7 310.1 511l.3 52-.7 659).4 803.4 -uuultd utnlbnti-n Ar-to 41.? 37.17 73.5 139k4 157.1 170.8 1I 22 70 229. .! up so 1974, EICELSA eatinated thin anount to reflect she allowble -cu-u (defiolencty) in ro cocaic0 (iS5) - - - - - earnings en energy cold in Dxoenher but billed in the foll-wing year. NI.t reoon-blc Snv-t,-et 633.98 ,3. i4l. 3,081.2 3,6613.0 4-T,190,5 9)-.7' 0 195OT.TI 1973. the otility changed it. recrding pocd,srx to the accral netl Bole of remernotl- d 1i.6 11.7 10.0 12. 10.0 1 2.0 10 ,0 10.5C C.1 10.0 of -rcountng. Actuoi/ailuo-llo eoetu 8o.6 121.1 14o.o 308.1 368.3 4i8.i 462.f 539.8 409.9- 8d/ Fseecast co--rti-vly at 10% the ijoo ul11obln rucatin.. Aiilro-iieee.......ntiu- 8o.6 111.1- 140.0 308.1 360.3 4i4.1 48Ž.7 559.0 409.8 a! computed at 31 average rate boned on troight-line method; anua )cp-ecioiioo e/ U.2 33.2 45.9) 76.4 90.4 101.1 115.4 132.7 144.0 napitrsi-etion no...id-cd on -sovrge basis. Re--si- LI 18.1 36.3 67.4 86.6 12'. 5 ii4.6 030.7- 130.4 163.0 ..zose (uthe,uthec iLcoon) cod c-uhooge iu-oeu 0.9 1.1 7,17 0.1 0.1 51 0.1 2.1 0.1 5/ Revrsion -es fore...et at 3.41, the a-eoge note applied in 1974-76. Other uP-noing cots 50.4 Bo. 9 i10.6 309.9 46. i. 726.3 961.4 1,111.9 Ttni uuot of unroiue 161.0 272:,6 404.3 711 ,0.6 1,05). 1 1379 ,6.4 1,832.8 f9! lee T.ble 3-1. -cn oouoo energy noOns 157.0 245,.0 359.2 744.0 928.9 1,090,4 1,347.7 1,526.4 1,762.4 o,the- uperoting roen-en 3.0 3.5 5.1 9.6 12.0 14.4 16.0, 10.2 20.7 hI I-clod-e vnn fron enegy na1- -c1y. r-eepts fr0 loneno..tee Food - 24. 4 4c.0 27.5 86.7 143.3 192.9 258.9 48.7 Fouco- (defioieouy) On1 re--,eetios 1.2 (0.3) - -- - - - - E-gy purch.esd fr- F0RNA4 as required hsulga nrg ydro.ici cEro,,y coins - GWh145j 776.9 868.0 1,006.4 1,491.0 1,989.0 2,626.0 3,103.0 4,162.0 4,406.0 year for ESCgtgA'u hydro pluete. A .tvry a reo-no per k6W6 - cuue.1 0.21 28S22 35.71 49,9 46.7 41.6 43.1 36.1 403.02t ~ i.. .g- tI/ .i-.- .t45 1yir...i 11 - INCOYY STATEMENT ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~reel teens. Sea forneca.t of osaber of eplyoy-e in An-co 1, T-23. re't opeeoti.cg roneoe i6o.o 248.5 364.3 733.6 940.9 1,106.8 1,164.9 1,345.6 1,784.1 / Etnedogrwaohtteacacofherwhrtnih Pc--.rored energy L! 8.3 10.6 31.9 150.0 283.9 406.7 566.3 685.'( 799.2 -uber of c-t-nruond the g-eath in en-gy sales Dupreciorco e/ 1.1.2 33.2 43).3 76.4 4o.4 101.2 115.-. 132.7 144.0 Opeetiog -np-ns- .1/ Estineted te gro at bhot thc -c nato as the rate of growth in Pccs--l ,jj 17.4 29.9 63.0 93.1 104.1 ili.7 1 30.8 146.4 168.1 the nober of cutonr.. Macoriole ondo-ppllon k 13.7 28.0 35.2 50.6 60.7 73.2 87.6 505.3 120.9 Ither enpeos /6.9 7.8 13.3 15.0 16.4 08.1 19.9 20.8 25.0 ml Do net represent enp-cld fol c-pense hot ESGELSA's -atributiono tu Fuel 0/ 5.0 19.7 14.1 1.0 1.2 1.4 0.9 2.2 2 .7 the ce-r fund eutahllohd to pay Inn nil fuel expenses In the region; loca~l uperotig cotst 62.5 117.4 203.9 386.3 556.7( 717.3 943.9 1o,04.1 1,259.9 the figure were -opoted -ec.ordig to guideline issue.d by the 0001. Op-ctoog lou-s 97.5 133.4 165.4 31i.3 384.2 380.1 420.6 431.5 524.2 FPoe, reccipts frun Gin-ctee Fo-d . 24.4 4co.o 3.9 86.7 143.3 192.9 298.8 48.7 ,/ Se Annex B, T-22. Less, reversom f/ 18.2. 34.o 62.3 86.6 102.5 ii4. 6 130.7 15c.L 163.0 lIar bn-ot-upmtOg oxpecoen 0.8 0.4 o,6 - - - - - of Interet during contruction in added to the fined asseot values at Icuon inure interest cud nones 78.6 113.1 135.4 308.2 366.9 ol-T. 2 962.0L 5593,4 49.9 ths rote of 107, on --ntr-ti-n in progr-n, accrding to Decree- ontercer e-p-so c'/ 39.2 101.5 105.4 192.2 005.5 306.4 235.9 240.2 253.4 Law 1506 (12/23/76). Leon, icter-st odheged to --et-utiuo o/l 12.3 45.4 39.7 17.5 16.5 32.9 63.3 43.0 33.0 Bet intemeot 2ue.s 6.9 561 0, 7. 8.0 173.5 192.c 136 .3 716.4 2' Cooputed or 67. on net inc-n before to...s, according to Dece-Lou bo-ne mane E/ 3.7 2.17 3.4 7.0 9.6 12.7 i4.0 j902 9.4 1506 (12/23/76). Nto, 1i000 480. 54. 1 56.3 126. 5 169.6 232.2 27.4 3d1 84.1 4/ See Anono B, T-21. III - SOURCESo A6Ž1 APPIICATIONS 52F FOUIO --sree t/ Mont of tLET80OBRAS' loan inclode financ.ing of interest durieg Woos imcccl onb g-en toion 89.8 146.3 161.3 384.6 458.8 313.4 5396.2 692.6 553.9 cetructi-e teen -inst nevus urtioatioc 1 111.2 ii0.1 103.4 154.0 124.0 669.8 299.4 2 62 .7 151.6 ()- ii- .--d~dd - - - ioterest 47/ 39. 101.5 io5.4 192,2 205.5 2<2,6. 4 235.9 240.0 223.4 ~ nlds i e iIedpyct:dmdusccdcae or Gross iebt se-ol- 150.4 219.6, 208.9- 3466.2 33.7.913 329410 nix -otho at tho cute of 11. on end-of-period equity; Ion: in-rest fi-ood Dy lu-n LI 23 4~4 7. 58.2 24,6 090s. 54,1 37.0 1182808RAS rei--tsr 1007, of its dividends; und lVet debt scervlo 138.1 1-74. 2 17 9. 1 298. 300.8 346.2 3T98.8 448-.8 968.0 (i)ice tan: -0 note pf; paye-t in onde outhc tess, thnrsr s/ 24.1 112.2) 50.3 31.0 9.1 9). 1 4.9) 17.5 41.0 year la.8 lOst iniermal conh geone..n,io (-72.4) (- 15.7) (46.1) 65.6 143. 364 181 263 144.9 Sector opital -otribsti-o 47 47.1 82.6 113.:9 75.9 85.2 86,)4,o1 106,1 128.4 1-1ncldes; It utate and nicoits'rivtctof sole tan Totld co~uono ddr-et uoctrib,ti-o (25.3) 6.9 71.0 141.5) 229.1 269.6 279.2 330.4 273.3 proceed; end ofI.. -stuIo: noing 173.8 iio.i 3 35.9 332.0 103.0 - - 7- proposed IBRD3 Ioo II/ - - - 16.8 102.0 12 .2 t9.3 13i.6 u/ In co...rn-t Jun 1977 oc-ciro- utter proposed noa ft-oe Iboon - 161.9 249. 230.2 239.3 073.3 Totol borrowings v/ 173. 164 239 332.0 38. 35.5 3620 32.0109v See A-or- 0, 7-20. So-eco puyttl cctributinos - - - ------ Tcobs someoe 168.5 727.5 307.7 473.1 515.9 601.1 641.6 633. 6 w c9abe41 Appli-ntioos-Tbl 41 DCs.tr-cion -ronogoing -urko 1i4.4 154.0 240.8 382.2 - -V - - / eeVoect 2000. proposed distribution p-oj-st - - 157.1 357.8 2411... 071.3- other proposed -ed futur projeoto . - - - 292.1 ic1.08 236.7 2Ž42.1 370.8 ictemost doniog ooerolc12.3 45.4 29.7 58.2 24.6 1> 6.5 54. 17.0 Tont, cusr icp-roqon E7/ 126.7 200.7 270.5 44Q04 1i73.8 56 1.0 564.i 590-, o 4017.0 -b-c"cc it -ckii- copitol and othe oppli-etoe- 21"oi8 27.3 37.2 33.1 418 6. 98 43.3 56.2 T.t,l opplicotl,ns 180. 5 127.5 307.7 733 056 601.1 441.4 633.2 (coot, oc ,0c 44) i i 44- 1BLE 5-3 ESCOISA Finanial Statements 1974-1982 (in millions of orenra) 94 1975 1976 1977 1978 1979 1q80 29381 1982 V - BALANCE ----------U J 97 r5-)--------- sects maos plant is -sri- 698.0 1,239.7 1,693.41 2,826.9 3,201.0 3,542.5 4-,147.7 4,7oi.9 2,119.4 ___________________________ esoc occoculated dleprociatian (34.3) (62.7) (112.5) 219.7 310.1 411.3 526.7 659.4 803.UnethBriiasyentacotegfroeaycreto,tmd Net pleat in service 643.7 1,177.0 1,5130.q 2,6027. 2,890.9 3,131.2 3,621.0 4,042.4 4,316.0) assets, and accoola-ytd dereitin aind debt eobet- to r-ealostfise, -ntrustlac in progress - 32. 133 234.3 115.3 215.0 442.9 422.3 456,1 446.3 -..Itedprit-, d bt bjtt Net fi-ed onse ts Zl 8306 1,310.3 1,915.2 2,722.5 3,105.0 3,574.1 4.043.3 4,499.5 4,762.3 ar eaodnt c erlgtsag 26 esgecyvle 'ivestacais narbetable ~~~~ ~~~~~~0.2 03 0.5 o.4 0.5 2.....303a ot the end of a -otaln year include balance as of the and of net inclalinf Maktbe eocrlti.e A1 45.5 48.o 39.5 38.7 59.3 77.0 193.6 129.2 139.5 the-stisus ys-d eaodc t thaF- s97 .dat plus -th ycrent year ccontsol -eoiroble ias) 13.2 34.4 42.2 99.8 87.2 102.6 126.6 94-.5. 182.6 teacciclc valu d at hcih tar 1972 cod susqen er awill atersole cod supplies l_ 2442 16.i 24.9 38.0 44.5 49.6 58.7 6y(.1 71.7 hc -ticicted tier accounts reevali.6 18.5 67.1 80.7 90.7 82.7 80.7 90.7 80.7 Tol curn set 15 17.0 73.0 228M.1 229.7 309.9 3690.4 411.9 454.3 efe-rd cod other a.Ssets 44.0 44.3 iis. 4 182.9 187.6 234.5 202.1 196.o 166.9 A/ Compoted at 1-1/2 -oth at annalcah operating costs. Tata1 assets _1,022.3 __1,471.9 2,102.0 3,3. 536 4.188,8 4.9C5p3td3a 5,029.3-g 5...393li,1 apita mcnd reserves A-/ 272.6 473.4 694.1 801.3 1,983.0 1,493.5 1,246.9 2,998.4 2,514.1 oog-tern debt sdf1 687.0 875.4 1,226.0 2,032.9 2,980.0 2,18~4.3 2,316.9 2,357.9 2,231.9 .b / Competed at 1.4%. on year-end gr-5 plant in s-erie. coo, ct,sritiee within one year 5. 832 91.5 238.7 248.1 241.o 281.1 318.2 300.0 Net lcag-term debt 612. 72. 1,1~34. 7 1,794.2 1,946.5 2,135.3 2,237.2 2,241.4 2,9.7a Includes: I) capitaliestion of diide.seds (see note s3 soIg-teen debt-maturities within ace year 54.2 83.2 91.3 238.7 248.1 241.0 782.1 319.2 309.0 (ii) capitali-stion of sole tan proceds (se cute t,9; end ~c-tun payable sod escenals 2I 5.3 6.9 18.7 36.6 37,4 44.9 44.1 44.3 33.0 (i)rtie .n. ther creet. liabllltles 10.1 114.7 21.7 26.1 29. 1 2s,1 26.1 26.1 26.1 Ttal current llabilities 67.6 104.5 151.7 501.4 311.6 512.0 352.3 384357.1 s1Sent /and Acs5 -9 eferred and other liabilities 69. 1.5 151.5 237.0 335.6 398.1 481.2 56o.5 560.5 Total lAshilitiea ~~~~~~~ ~~~~1,22. 1,a71. 21.0 33.9 3,36~3.6 4,118.0 4,693 ,263 3383. aol Computed at on month's i-oetment sespeeditores WOPYENG CAPITAL f~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~a/ Operting espen-e, secluding porsh-sd enrgy,c as per-et of teriale aod suppliea ahl 21.2 -18.1 24,9 38.9 44.5 49.6 58.7 67.1 71.7 operating rev...uss. ocascota reosiv-ble sal. 13.2 34.4 42.2 69.9 87.2 102.6 126.6 1413.5 162.6 tber eceivobles 1.8 i8.5 67.1 80.7 80.7 80.7 80.7 80.7 80.7 g81 See I on previous page. coscits payable eeL (3.3) (6.9) (18.7) (36.8) (37.4) (44.9) (44.1) (44.3) (31.02 tier correct liabilities (10.1) (14.7) (21.7) (26.1) (26.1) (26.1) (26.1) (26.1) (26.1) ab/ Op-rtieg income. as a prerson of averge net Plant in serice. T-ral working capital xo-ushb 22.6 47(.4 93,5 126.7 149.9 1i1.9 195.8 220.8t 257.9 nasa ch.sge 24.8 46.4 13.9 22.1 12.9 33.9) 25.0 37.1 ash icisocee.a 45.5 48.0 38.5 38.7 58.3 77.0 193.6 129.2 939.9 Total coking capital 68.1 99.4 132.3 165.4 207.2 238.9 299.4 341.0 397.4 scooT si.3'ag 27.3 36.9 33.1 41.8 31.7 60.5 41.6 58.4 t - FINANCICAb. INDICATORS erantiog pematiog rastio W4 42 47 31 29 28 26 2c 26 ateof returs nmnesla-~i.6 11.7 10.0 10.0 10.0 10.0 10.0 10.0 10.0 so remucreteboe assets (b ) 19.5 14.5 12.0 17.5 14.0 12.9 12.5 11,6 12.3 toes net debt, cervi-o --rced by gras internal coeh geseration 0.7 0.8 1.0 1.3 1.5 1.4 1.5 1.5 1.5 cbt/equtytt ratiu 71/29 65h 5 64/36 72/28 06634 60140 57/43 53/47 47/53 sig,hted average reaincing repymymeot period uf debt octsttaodicg at year-cad (years) 12.9 8.o sighted aversge interest rite as debt utsiiaoding at year-end )c4) 10.4 10.1 nsal1 eostribatione to investment fran set internal resources (eclaccding secotr capital oootrcbations)(%( (49) (7) (16) 14 28 27 29 36 31 sncul cotrtbcstbooc to ioveetmot from set isternal resoucre (inclusding sestar capital cootrtbutiaoa)Q() (17) 29 23 29 44 42 44 52 59 - 45 - CHAPTER 6 ECONOMIC ANALYSIS Least-Cost Solution 6.01 The expansion program of the subtransmission and distribution facilities is commensurate with the expected growth rate of sales on different parts of the systems, and duly takes into account the concen- tration of loads, the state of existing facilities and the particular re- quirements of specific customers. For some of the equipment included in the program, such as transformers or meters, no reasonable alternative exists. Where alternatives do exist, e.g. in routing, sizing or voltage of transmission lines and location and reserve capacities of substations, the utilities have selected the least-cost solution which is compatible with safety and environ- mental considerations. The use of underground high voltage lines is limited to those cases where urban congestion makes it impractical to build aerial lines. The use of double circuits is limited to feeding the most important substations. Spare capacity at substations is normally limited to about 20% over peak loading. Return on Investment 6.02 The return on investment was estimated as the discount rate which equates the present values of the benefits and costs stemming from the com- bined 1978-1981 investment program of the three utilities as well as those of each individual program. Benefits were measured by the forecast revenues from the sales of electricity at the retail levels, using the tariffs in effect as at December 1976 plus the sole tax. CEMIG's investment program for the period is a balanced one and includes sizable investments for generation and transmission. CELESC's and ESCELSA's programs include only distribution items; however, the related generation and transmission investments are included in the cost of energy purchased from their bulk suppliers. The equalizing discount rate for the combined program is about 17% as are the equalizing rates for CEMIG's and ESCELSA's individual programs, while that pertaining to CELESC's program is about 15%. These discount rates compare favorably with the opportunity cost of capital for Brazil, estimated to be 11%. The equalizing rates obtained understate the real economic rate of return of the programs, as revenues from the sales of electricity do not fully measure some of the benefits to society, such as social benefits of residential and public uses, or the indirect benefits to industry and commerce, whose production and employment depend on a reliable electricity supply. Table T-24 of Annex B contains the cost and benefit streams used in the calculations; the underlying assumptions appear as footnotes to the table. 6.03 These results are based on economic efficiency prices for all inputs except labor and foreign exchange. The use of efficiency prices for labor would increase the rate of return. A sensitivity analysis was carried out to determine whether any rate of exchange, other than US$1 = Cr$ 14.35, which was the official rate as of June 30, 1977, would materially change the results. The results of this analysis, reproduced below, indicate that the rate of return is not significantly affected by changes in the foreign exchange rate. - 46 - RATE OF RETURN (%) Exchange Rate Relation to (US$1 = Base exchange rate (%) CEMIG CELESC ESCELSA TOTAL Cr$ 14.35 100 16.7 15.3 17.0 16.6 Cr$ 17.22 120 16.0 14.7 16.3 15.9 Cr$ 18.66 130 15.6 14.4 16.1 15.5 Cr$ 20.09 140 15.3 14.4 15.8 15.3 6.04 Sensitivity analyses were carried out to determine the effect on the rate of return of variations in the following parameters: (a) the cost of the program; (b) operating costs; (c) time required to start obtain- ing the expected benefits; (d) average tariff to consumers; and (e) the amount of energy sold1 due to facilities built under the program--either because of variations in the rate of growth of the market, the number of years in which the new facilities reach their capacity or in the percentage of sales made through these facilities or a combination of these variables. Factors (a), (b) and (c) reflect risks which are, to some extent, subject to control by the beneficiaries, while (d) depends on Government tariff regulation and (e) - aLnd to some extent (c) - is related to the accuracy of demand forecasts. The results, which indicate rates of return which compare favorably with the opportunity cost of capital for all likely variations in these parameters, are shown in the graphs of Figure 6.1. It may be noted, however, that the return on CELESC's and ESCELSA's components of the project is highly sensitive to variations in the price of purchased energy. As noted in Chapter 2 and paras. 4.14 and 4.20, CELESC and ESCELSA will engage consultants to assist with project implementation and with the strengthening of their organization, thus reducing the incidence of risk factors under their control. The other risks are believed to be within acceptable limits. Any increase in the cost of purchased energy would be analyzed by the Brazilian authorities in the ciontext of the applicable legislation and would be most likely offset by corresponding increases in the level of retail rates. 6,05 From all of the above, it may be concluded that the rate of return oni investment :Ln the combined program, of which the project is part, and on the individual program of each utility is adequate and that it is not signif- icantly affected by possible misjudgements of the basic parameters which determine it. igure 6. 1 ate of Return - 47 - 20 RR a. fno f 20 O f A2 RR -. fw,,nm of thee [ Proonm lno..ool Con IPICI OpQrttmi; CaOttII IIOW th I th d P Ghed of Nohtmd En.tw 1S l B .1S Is 12 12 12 10to0 4 4 4 2 2 2 ____________________I I I I I * I 100 110 120 120 140 150 150 170 to0 to0 100 110 120 120 140 IL lt 16t t70 1670 .s6 1C Q11 110 I2n 1 40 166 166 1W 166 PIC ISof bo GGw- l OC of bd o_ lttU Ps M of dI 22 2RIGfOetIondt0 RR"lh`otlonotth` 2D RR.fo mbtio.of the Thn a1.m. T.,lf to C4on, (ATC) En.g SI. MMI RWid to ar obt..4 8..it. [TR) 20 /20 16 I., ~ ~ ~~~~~I 14 14 / .4 12 12 2 a 7 a 10 / 10 TR fvw. of d4.0 w -h rn to bnt ment#-l s: ;/ oX . " s vf 3BRAZIL SOUTH - SOUTHEAST DISTRIBUTION PROJECT IX RATE OF RETURN ON INVESTMENT (RR) 4/ I ~~~~~~~~~~~~~~~4 ;/ ....... .... --.¢ CEMIG 2 2 CILAOC ~-'' eSCELSA - -s - - ALL PROGRAMS COMBINED S0 60 70 80 90 100 110 120 130 i4O 20 30 40 50 60 70 60 °0 100 110 ATC ( .1 bo met_u ES 1% of bm t.Wodd B n (t - ISMtt - 48 - CHAPTER 7 SUMMARY OF AGREEMENTS AND RECOMMENDATIONS 7.01 During negotiations agreements were reached with the Federal and State Governments, ELETROBRAS and the Beneficiaries, as applicable, on the following principal points: (a) the beneficiaries will maintain their earnings at levels consistent with sound financial and utility practices and in accordance with existing legislation and will maintain their e].&ibility for transfers from the Global Guarantee Fund; the Federal Government will cause DNAEE to take timely action on the beneficiaries' requests for tariff adjustments and transfers and DNAEE will exercise its statutory powers to allow the beneficiaries a return on remunerable assets of at least 10%; any change in legislation which would materially and adversely affect the beneficiaries' financial position would be an event of default (para. 1.23); (b) ELETROBRAS will review regularly and report every six months on progress of the project and on the beneficiaries' performance (para. 2.03); (c) CELESC and ESCELSA will prepare an improvement program, with the assistance of consultants, by June 30, 1979 and implement it thereafter (paras. 2.20 and 2.28); (d) the beneficiaries will offer financing to low income consumers who have access to service but are not currently connected (para. 4.07); (e) ELETROBRAS will onlend the proceeds of the loan to the bene- ficiaries under satisfactory terms and conditions (para. 5.07); (f) the states of Minas Gerais, Santa Catarina and Espirito Santo will invest, in CEMIG, CELESC and ESCELSA, respectively, at least 90% of the proceeds of the sole tax and reinvest in the beneficiaries at least 90% of the dividends they may receive from the beneficiaries (para. 5.08); (g) the state of Santa Catarina will make equity contributions to CELESC (para. 5.08); (h) the states of Minas Gerais and Santa Catarina and ELETROBRAS will provide CEMIG, CELESC and ESCELSA, respectively, with such funds as may be required to assure the timely completion of the project (para. 5.08); - 49 - (i) the beneficiaries will not undertake any major project, unless they provide evidence satisfactory to the Bank that such con- struction is justified technically and economically and that they have secured the necessary financial resources (para. 5.09); (j) the beneficiaries agreed not to incur any long-term debt without consulting the Bank unless their gross internal cash generation cover their maximum future debt service at least 1.5 times (paras. 5.11, 5.13 and 5.15); (k) CEMIG will provide to the Bank a review of its investment and financing plans; ELETROBRAS- and the Federal and State Governments will participate in this review (para. 5.12); and (1) ELETROBRAS will, at the Bank's request, maintain ESCELSA's annual debt service coverage at 1.5 (para. 5.14). 7.02 Before declaring the loan effective, the Bank should receive satis- factory evidence that at least one Project Agreement between the Bank and a beneficiary, the related Shareholder Agreement with the State, and the related Subsidiary Loan Agreement between ELETROBRAS and such beneficiary, are effective and legally binding upon the parties thereto. 7.03 The following are disbursement conditions in respect of the several portions of the loan allocated to the respective beneficiary: (a) receipt of evidence satisfactory to the Bank that the'respective Project Agreement, Shareholder Agreement, and Subsidiary Loan Agreement related to each beneficiary is effective and legally binding; (b) in relation to the CELESC and ESCELSA portions, that they have engaged consultants to conduct studies regarding their respective organizations and to assist them with 138 kV facilities (paras. 2.20, 2.28 and 4.14); (c) in relation to the CELESC portion, that payments from the State of Santa Catarina of its equity contribution to CELESC have been kept current (para. 5.08); and (d) -in relation to the ESCELSA portion, that ELETROBRAS has furnished the Bank a plan of action satisfactory to the Bank to enable ESCELSA to achieve for 1978 and thereafter, until completion of its portion of the project an annual debt service coverage ratio of 1.5 (para. 5.14). 7.04 With the above agreements, the project constitutes a suitable basis for a Bank loan of US$130 million equivalent. The loan would be paid over a period of 15 years including 3 years of grace. March 10, 1978 - 50 - ANNEX A Page lof 2 pages BRAZIL SOUTH-SOUTHEAST DISTRIBUTION PROJECT ELETROBRAS' Financial Statements 1. This annex contains the following summarized tables, each covering the years 1971 to 1976: T-1: Balance Sheets T-2: Statement of Income T-3: Sources and Application of Funds 2. On December 31, 1976, ELETROBRAS' share capital was represented by 21,665,120,511 common shares and 334,879,489 preferred shares, with a par value of Cr$1.00 each. The preferred shares have no voting rights and are not con- vertible into common shares. The preferred shares Class A (subscribed up to June 23, 1969) have the right to a minimum dividend of 2% per year plus the legal rate o:E remuneration of investments in electricity companies. The pre- ferred shares Class B (subscribed after June 23, 1969) have priority to a minimum dividend of 6% per year. During recent years a 12% dividend has been paid on preferred shares and 9% dividend on common shares based on the par value of Cr$1.00. The Federal Government owns 99.6% of all the shares. 3. The balance sheets (Table 1) indicate a consistently high capital/ total debt ratio which, together with a 20-year average remaining repayment period of its debt reflect a satisfactory long-term liquidity situation. 4. The statements of income (Table 2) indicate sustained low operating costs (ranging from 5% to 10% including depreciation and taxes) and a satis- factory interest coverage, which has exceeded five times the annual interest charges over 1971-1975 (4.3 times in 1976). Net income of Cr$4,340 million in 1976 (about US$300 million equivalent 1/) represent a 14.6% return on average equity. 5. The Source and Applications of Funds Statements (Table 3) show a satisfactory debt service coverage. ELETROBRAS' total requirements were covered as follows in the period 1971-1976: 1/ As of June 30, 1977: Cr$14.35 = US$1. - 51 - ANNEX A Page 2of 2 pages Cr$10 _6_ Net cash generation 15,255 34 Proceeds of energy (sole) tax 3,697 8 Reversion 9,639 22 Compulsory loan 9,307 21 Government transfers 1,202 3 Borrowings 5,711 12 Total 44,811 100 6. ELETROBRAS is supposed to receive a declining proportion of the proceeds of the sole tax (from 36% in 1974 down to 18% in 1979) but is seeking to be permitted to continue to utilize a high proportion of the Federal Government's share of this resource. Its other sources of funds should increase in line with the growth of power sales and are protected against inflation by the provisions of the Brazilian power legislation. - 52 - BRAZIL SOUTU-SOUTHEAST POWER DISTRIUTION PROJECT ANNE A T-1 CENTRAIS ELETRICAS BRASILEIRAS S. A. (ELETROBRAS) Balance Sheets A/ (in millions of Cr$) (As ol December 31) 1971 1972 1973 1974 1975 19 ASSETS Current Assets Cash and deposits 104 152 202 201 255 3. Loans (portion maturing within one year) 755 1,007 1,374 1,527 1,926 3,5S Other current assets 136 209 575 471 35 1,1 Total Current Assets 995 1,368 2,151 2,199 2,216 4,9t Investments Loans (portion maturing after one year) 4,808 6,812 9,730 14,601 25,315 38,8( Capital stock Subsidiaries 2,988 3,838 4,541 6,502 8,413 14,4 Associated companies 976 1,291 1,836 2,299 4,087 5,1 Other 7 6 4 376 b/ 461h/ 6' Advances and other investments 222 376 670 809 863 2,5( Fixed assets 29 39 159 187 309 3 Accumulated depreciation (3) (5) (8) (15) (26) (I Deferred charges and assets 64 178 269 420 72 1 Total Assets 10,086 13,903 19,352 27,378 41,710 67,01 LIABILITIES Current Liabilities Debt Cportion matuLring within one year) 39 55 156 121 204 2C Capital stock subscriptions 135 12 20 194 - - Other current liabilities 479 565 800 1,308 1,863 3,0 Total Current Liabilities 653 632 976 1,623 2,067 3,2S Long-term debt (portion maturing after one year) In domestic currency 2,089 3,428 4,982 7,812 12,927 22,6' In foreign currencies 834 1,080 1,271 1,672 2,140 5,6' Total Long-term debt 2,923 4,508 6,253 9,484 15,067 28,30 Deferred credits and liabilities 969 782 977 926 302 29 Capital Share capital 4,705 6,126 8,817 10,980 14,600 22,00 Reserves and retained earnings 836 1,855 2,329 4,365 9,674 13,j1 Total Capital 5,541 7,981 11,146 15,345 24,274 35,11 Total Liabilities 10,086 13,903 19,352 27,378 41,710 67,01 Current assets/current liabilities (times) 1.5 2.2 2.2 1.4 1.1 1.5 Total debt/capital ratio 45/55 46/54 42/58 44/56 42/48 48/52 al 1,971-1975 audited by Messrs. Bouc4nhas, Campos, Coopers & Lybrand, 1976 by Boucinhas, Campos & Claro S/C Ltda.; minor reclasifications of accounts have been made to achieve consistency. b/ Largely ELETROBRAS' participation in the Bi-national Itaipu hydroelectric project. - 53 - BRAZIL SOUTH-SOUTHEAST POWER DISTRIBUTION PROJECT ANNEX A T-2 CENTRAIS ELETRICAS BRASILEIRAS S.A. (ELETROBRAS) Statements of Income a/ (in millions of Cr$) (Year ended December 31) 1971 1972 1973 1974 1975 1976 REVENUES From shareholdings 331 452 666 759 1,238 1,253 From loans and financings 501 783 1,056 1,463 3,214 4,245 From government securities 5 17 45 74 ( 245 ( 798 Other 3 4 7 16 ( . Total Revenues 840 1,256 1,774 2,312 4,697 6,296 EXPENSES Administrative and general 44 65 88 124 225 392 Depreciation 1 2 3 9 12 16 Taxes 22 22 - 1 179 223 Income before interest 773 1,167 1,683 2,178 4,281 5,665 Interest On domestic currency debt 82 107 158 203 341 570 On foreign currency debt 45 48 51 86 265 755 Total Interest 127 155 209 289 606 1,325 Net Income 646 1 012 1 474 1889 3,675 4,340= Interest coverage (times) 6.1 7.5 8.0 7.5 7.1 4.3 4/ 1971-1975 audited by Messrs. Boucinhas, Campos, Coopers & Lybrand, 1976 by Boucinhas, Campos and Claro S/C Ltda. _ 54 - BRAZIL SOUTH-SOUTHEAST POWER DISTRIBUTION PROJECT ANNEX A T-3 CENTRAIS ELETRICAS BRASILEIRAS S.A. (ELETROBRAS) Sources and Applications of Funds Statements a/ (in millions of Cr$) SOURCES 1971 1972 1973 1974 1975 1976 Income before interest 773 1,167 1,683 2,178 4,281 5,665 Less: Non-cash items 102 64 195 184 233 60 Gross cash generation 671 1,103 1,488 1,994 4,048 5,605 Plus Loan amortization receipts 217 443 859 766 1,152 1,816 888 1,546 2,347 2,760 5,200 7,421 Less: Debt service Amortization payments 110 170 260 357 312 832 Interest 127 155 209 289 606 1,157 Total Debt Service 237 325 469 646 918 1,989 Less: Net dividend payments 6 24 40 56 80 117 Net cash generation 645 1,197 1,838 2,058 4,202 5,315 Plus: Electric energy (sole) tax 217 392 501 678 847 1,062 Reversion - 595 1,228 1,537 2,100 4,179 Compulsory loan 725 793 1,074 1,400 2,021 3,294 Government transfers 50 7 354 280 341 170 Borrowing - - - - 1,785 3,926 ja*IZ. A2984= 4.995" 5.95=3 11.296= 17A246 APPLICATIONS Capiital stock of subsidiaries and affiLiated companies 206 447 612 1,139 1,535 3,193 Long-term loans and advances 1,332 2,267 2,671 4,897 8,822 12,328 Short-term financing (net - 35 442 (429) (115) 159 Legal indemnizations - - 638 19 659 744 Purchase of transmission systems - - 147 104 - - Other 78 150 133 292 293 1,416 Working capital increase/(decrease) 21 85 352 (69) 102 106 1,637 2,984 4,995 5,953 11,296 17 946 ,sass= ==s=s= ====,= =s==== a=n=s== =^= Debt service coverage: excluding loan amortization receipts 2.8 3.4 3.2 3.1 4.4 2.8 including loan amortization.receipts 3.8 4.8 5.0 4.9 5.7 3.7 a! 1971-75 figures from Appraisal Report no. 1088b-BR for the Northeast Distribution Project; 1976 figures based on ELETROBRAS 1976 Annual Report. 55 BRAZIL SOUTH-SOUTHEAST POWER DISTRIBUTION PROJECT ANNEX B T-1 Monthly Electricity Tariffs (1977)2a (as approved by DNAEE on December 23, 1976) CEMIG CELESC ESCELSA 1. Industrial (a) Supplies at 88 kV to 138 kV -) Demand charge (US$/kW) 4.67 Not 4.67 appli- -) Energy charge (US$1MWh) cable First 9,000 MWh 5.57 5.40 Next 28,000 MWh 5.23 5.40 Excess over 37,000 MWh 4.88 5.40 (b) Supplies at 20 kV to 69 kV -) Demand charge (US$|kW) 5.92 5.92 5.92 -) Energy charge (US$/MWh) 7.99 7.99 7.99 (c) Supplies at 2.3 kV to 13.8 kV ) Demand charge (US$/kW) 6.27 6.27 6.27 ) Energy charge (US$/MWh) 10.40 10.40 10.40 2. Residential-Y (US$/MWh) 57.14 57.14 57.14 3. RuralS d/ (US$/MWh) 37.14 37.14 37.14 4. Non-residential- - non-rural (US$/MWh) (commercial and governmental facilities) 61.32 61.32 61.32 5. Street Lighting (US$/MWh) 17.42 17.42 19.51 6. Discounts (%) (i) for urban electric traction 75 not not (ii) for railroad's e,ectric traction 50 applicable applicable (iii) water suppliers- 40 20 40 a/ Translated into US$ at the rate of Cr$14.35 = US$1. bt 25% discount if consumption does not exceed 30 kWh/month. £/ Supply at high voltages has a 10% discount. d/ Additional discount ii givBn if peak demand does not coincide with suppliers' peak according to P= f - p x 50 where P % discount Df Df = billing demand D demand at time of system peak. . US$24.39/MWh for bakeries with electric ovens, subject to certain restrictions regarding hours of operations. - 56- BRAZIL SOUTH-SOUTHEAST POWER DISTRIBUTION PROJECT ANNEX B T-2 Access To Service (figures in thousands) 1975 1976 1977 1978 1979 1980 1981 198. CEMIGs Service Area. a. Inhabitants - Rural areas 6552 6526 6503 5482 6464 6446 6428 6411 b. Inhabitants - Urban areas 5999 6238 6482 6731 6984 7243 7506 777' c. Total inhabitants 12551 12764 12985 13213 13448 13689 13934 14181 d. Residential customers 787 867 950 1036 1124 1214 1305 139F e. Service index (c/d) 15.9 14.7 13.7 12.8 12.0 11.3 10,7 10., CELESC's Service Area. a. Inhabitants - Rural areas 1778 1808 1837 1862 1892 1921 1952 198: b. Inhabitants - Urban areas 1574 1643 1716 1797 1877 1960 2032 210, c. Total inhabitants 3351 3451 3553 3659 3769 3J81 3984 4a9( d. Residential customers 251 278 313 348 388 433 480 53/ e. Service index (c/d) 13.4 12.4 10.7 10.5 9.7 9.0 8.3 7, ESCELSA's Service Area. a. Inhabitants - Rural areas - - not available - - - b. Inhabitants - Urban areas - - not available - -_ - c. Total inhabitants 1725 1750 1776 1804 1831 1860 1889 191' d. Residential customers 116 136 146 161 177 195 214 23t e. Service index (c/d) 14.9 12.9 12.1 11.2 10.3 9.5 8.8 8.' - 5 7- BRKAZiL SOUTH-SOUTHEAST POWER DISTRIBUTION PROJECT ANNEX B T-3 Energy and Peak Demand Balance ACTUAL (Est.) FORECAST 1972 1973 1974 1975 1976 1977 1978 1979 1950 1981 1952 % _ it %_ 5( ___ CEMIG0 'Inteal Sal-es - OlWh 5352 5902 6788 7839 9179 10662 130o86 15908 18489 21186 23181 Losses - 5( of net generation & purchases 7.2 8.1 8.3 8.8 9.0 9.0 9.0 9.0 9.0 9.0 9.0 Losses - Gh423 523 611 757 913 1063 1294 1573 1629 2095 2293 Energy Required - GWTh 5775 1002 6425 100 7399 100 8596 100 10092 100 11I635 100 14380 1O0 17481 100 20318 100 2a1 00 25474 100 Energy Balance: a Net generation f'rom its plants - GWh 5 525'x 96 5 778 90 6745 9:1 7938 92 7644 76 8899 76 12952 90 15527 89 17532 86 19480 84 21935 86 Purchased energy(from FURNNA3) OWh 250 4 647 10 654 9 658 8 2448 24 2736 24 1428 10 1954 11 2766 14 3801 16 3539 14 Load factor (50 69 66 71 7 1 ii 71 71 71 71 71 71 Peak demand - MWH15/N 949 1070 1195 1386 1628 1870 2312 2811 3267 3743 14096 Capacity Balance: Generation at time of' system peak (MW) n.a. 934 1006 1246 1236 1498 1862 2361 2567 3003 3356 Purchases at time of system peek (MW) n.a. 1.36 189 i4o 392 400 450 490 700 '740 740 CELESC Total Sales - 05Wh 752 1002 1274 1522 1878 2232 2650 314 3619 4186 4805 Losses - IS of net generation & purchases 13.9 11.6 ic. 4 9.2 8.0 7.7 7. 9 6.0 6.0 8.0 8.0 Losses - (54Th 121 131 148 154 163 187 228 269 315 364 418 Energy Required - 35Wh 673 100 1133 100 1422 100 1676 100 2041 100 2419 100 2878 100 3373 100 3934 100 455o 100 5223 100 Energy Balance:. Net generation from its plants - GWh 429 49 492 43 398 28 399 214 468 23 433 18 433 15 433 13 433 11 433 9 433 8 Purchased. energy (from ELETROSUL) OWNh 443 51 641 57 1024 72 1277 76 1573 77 1966 62 2445 85 2940 87 5501 89 4117 91 4790 92 Load factor 5%) 56 53 52 59 61 62 62 62 62 62 62 Peak demandi - P15511/B 175 24s 285 325 380 446 530 621 724 838 962 Capacity Balance: Generation at times of system peak (NdO n.e. n.a. n.a. 64 69 69 69 69 69 69 69 Purchases at time of system peek (M4W) n.a. n.a. n.a. 261 311 377 46i 552 655 769 893 ESCELSA Total Sales - GWh 462 640 777 868 1006 1491 1989 2626 3127 4182 4406 Losses - %, of' net generation & purchases 10.8 9.7 11.0 9.4 7.0 9.1 9.1 9.1 8.7 8.5 8.5 Losses - GWh 56 69 97 61 76 149 199 263 298 388 409 Energy Required - GW, 518 100 709 100 874 100 949 100 1002 1640 100 2188 100 2889 100 3425 100 4570 100 4815 100 Energy Balance: Net generation from its plants - GWh5 294 57 376 53 967 111 1117 118 625 987 60 1050 46 1077 37 1066 31 1103 24 1106 23 Purchased energy (fromn ruPgAs) GWh 224 43 333 47 (93) (ii) (167) (18) 257 653 40 1138 52 1812 63 2359 69 3467 76 3709 77 Load factor (%) 62 59 66 65 65 65 69 65 65 65 Pleek demand - 5MWB/H 95 136 151 168 196 288 38~4 507 601 802 846 Capacity Batance: Generation at time of system peak (M4W) 48 87 171 147 181 176 176 176 176 176 1-76 Purchases at times of system peak (P1W) 47 49 20 21 15 112 208 331 425 626 670 a/ Excludes 119 OWh supplied to FIJRNASB through interchange agreement. - 58 - BRAZIL SOUTH-S00UTHEAST POWESR ISMIaOUTIO4 PIWJECT MMEZ B T-4 Installed Capacity (10) and bonrgr Availabtilty ((wh/tear) Installed Annual Anal Capacity (98W) Enrgy (Wh) Energy (tCWh) tritical hydro- (Average hydre- loic al year) losical year) C6MI0 Existing January 1, 1977 hydro: Jeguar- 425.6 2560 2934 Tres Marias 367.6 1795 2155 Salto Grande 104.0 622 745 Volta Grande 360.0 1542 1648 Itutinga 48.6 210 254 Caargoes 45.0 166 201 Piau 18.0 af anhoto 12.9 Peti 9.4 Rio de Pedras 9.3 Pogo Fv.do 9.2 Tronquairas - 7.9 Kartio 7.7 Cajuru 7.2 16 small plants 35.7 482 a 578 at Sub-total 1508.1 73778 Thermal: 4 small diesel planta 7.2 40 40 TOTAL 7515.3 7417 8755 Additions during 1977: IUarape (Thermal) 125.0 930 930 Sao Stio (hydro) 268.0 2113 2200 TOTAL January 1, 1978 104360 1885 Additions during 1978: SeW Siso 804.0 6339 6600 TOTAL January 1, 1979 2712.3 16799 18485 Additions during 1979: Sao Siman 536.0 133 1554 TOTAL Janurry 1. 1980 3216932 803 Additions during 1980: None - - TOTAL January 1, 1961 3248.3 16932 20039 Additions during 1981: EmorcarAo (hydro) 250.0 1971 2000 TOTAL January 1, 1982 31890 22039 Addition during 1982: Esborcasso 750.0 1989 274a Noa Poate (hydro) 160.0 1261 MA 2garapava (hydro) 50.0 394 NA TOTAL January 1983 UT54 NA Existing January 1, 1977 Yydro: Palmaeres 17.5 Bracdrho 16.5 Garcia 8.6 Cedrot 7.0 Salto lWelsebech 6.3 7 small plants 13.4 Sub-total 2C0 398 Thermal: 2 smell diesel plants 6,0 35 TOTAL 5' 235 433 No additions planned in 1977-1982 ESCELSA Existing January 1, 1977 'ydro; Mlacarenhas 120.0 Sui.a 30.6 Rio go-it. 15.0 Sere sm11 plants 15.2 TOTAL l8a 900 110C -No addtClONs planned in 1917 TOTAL January 1, 1979 180.6 Additions during 1978: ratiremnt of tvo small plants (4.4) TOTAL January 1, 1979 176.4 310S0 No additiom planned in 1979-1982 aj includes availability of a11 hydro plants oth.r thsn the ones apetifica1y mentioned sbove. KA - Not Available I - 594 BRAZIL SOUTH-SOTTHEAST POWER DISTRIBUTION PROJECT ANNEX B T-5 Interconnec ted Syste7 nrg n Peak D snand Balance-. StatIc Balance 198 1979 1980 1951 1982 15 194 15 180 17 i EL.ETRORRAS sad toe utilities normally revlo- and ordate These studies -evey year and are tins likely ts -cticipete the po.ssible consequences of a -in- S-othent and Cetiral-Wlst Regions cidence of oslays nod advers hydrological conditions so chat they may nitigate th.efcfectc cf soch occurreces. Enrg -Roverage 8495 9506 10634 11907 13113 14380 15539 16836, i181s 192328S These reqoireente hsve teen etinated on the basis of poner cachet atndlee 1. Pe-iltreleti 8974 10176 10869 1150,4 12,244 14173 16278 i8475 12851 20121 c-mpleten -o the. Int qnarter fi 1976. New market etodnee, ce-pleted in the in reg-no 8974 10176 10869) 11504 12244 13153 13743 14403 14323 18603 lost qater si 1577, ieee loner forecasts. from Itsipc - - - -1- 20 lil 2939 4032 9358 3315 netMtdo h 3. BIainse 479 670 235 -303 -8-69 -1 -07S 719 l3 ~2 1736 594 5/The -vailebility of energy ecd peaking capacity bes beenetmtdo h Peck - MW ) theSuh.t 1. Eeqslre_nt.2 si- 2756 14359 15991 17760 19752 21653 23456 25414 27422 29567(i hydrological cenditionS in the critical Year (1955); 2. A-il~~~biliti-!/ ~i66os 17808 19422 20554 21102 24307 27558 29187 30763 31725 in region 16605 17808 19422 20554 21102 23197 24803 24803 24903 24803i Ts the Sonilh:4 from Ttaip. - - - - - 1110 '2755 4384 3980T c022 (ii) hydIelglcs,l coditions as per critios1 year (1944-1945) throngS 3. Rmlmaoe 3849 3449 3451 2794 1349) 2654 4102 3773 3336 2155 1350 sod as p--eroritloo1 yen,, of tic Sontheast (1955) ther-ater In view sf the ociinigin 1981 of ROTV interconnetion.; South Region (iii) tie followire installatton program, (in MW) Er.rgy - --ag. 7g/ ~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1978 19(9 1980 1951 1981 1.983 1.954 1985 1986 1987 Enrg - ,vir-te2¶_ 2446 1673 1918 2264 2586 2929 3274 36,31 3992 4355 Ilha Solteirn (CBSP) 6 - - __ 2. Reqoirebieiia / 1144 1257 1564 34o4 3537 3740 4278 4413 4717 4792 Sac Sinso (CENIG) 1072 536 in regIon 1144 1257 1564 3404 3537 3550 3558 3605 3605 3605 Agoa Ve-lha (sEEP) 230 690 46o from Ttnipo hi - / p - - 190 4-90 505 1117 1157 Angro (ccsrTtIS2d2) 625 1200 1200 3. Bol-ore -302 e/-116 2' -354 -f/ 1140 351 811 Sil 7(82 725 137 Itauba (-oEo) 375 125 Jorge LT..erdn TIT 125 125 iseemn1, ESETS{221JL) Peh-k Wn Itnobiors (FTHRNAS) 1050j 1(05 1. Reqnir-ncnlB 2363 2712 3114 3735 4249 4793 5338 5901 8487 7032 Foe do Arein (60P21) 671 336 2. Aeilsbilitie- 2548 2742 4508 5569 5569 5775 6li4 6449 68o5 7052 Salle Os-rio (ELETPOSUL) 306 in region 2548 2742 45o8 5569 5569 5569 5509 5369 5569 5569 Salto Ssntingo (2EMTR2EIIL( 584 584 from Itnipo - - - - - 206 535 880 1236 1483 Candiots TI (oonl-fired) (CEEE) 150 150 3. Belma- 185 32 133)4 1834 1320 982 766 548 338 20 Eoborsag- (iss!STr.( 750 250 Smi Rarbo.. 300 italpis 2107~ 2122 2100 2100 2100 Dynanlc Balance inito Sn Diviss (PIURBtt) 720 Itapeti (FU88A2) (15 S-sIhesnt, Osstral-West nod Sooth Region Energy: R. uirei--ca - Aversge 3Bg/ 5495 95o6 10634 14071 15699 17309 18833 20467 22137 23883 Minint stored energy in resCO?voirshi DSii.T eme ytanfl.f-8t g M4W-month 8901 6459 5577 13914 8898 10789 10.813 17404 37656 3eisn ob eli rnoen4is osb ein '(of :sinumentr-ge capacity 21.5 12.5 10.1 16.3 10.2 11.9 14.1 19.1 29.4 28.8 A-eage Thermasl generation: o/DeficIt to bo net by tr-nefees from Southeastern region thro-gh e1sngBo Nuolear - Average MW 88 309 309 307 314 655 912 1284 1351 1491 -apasity 235 kV inirr---esticn. Load f-cct- 14 49.5 49.5 49.1 90.2 35,9 30.2 42.5 44.8 49. 3 Definit in be cartially net by trnosfero free, Roothetaten region; oc.tailment j. laccrdn -Averags MW 0 5 0 131 133 ii8 Sd 95 129 170 nay be necessary if critical hydrological year cor'howver, lesse deman.ds L,oad factor %0 0 0 29.3 29.9 26.4 19.8 21.4 29.9 38.1 than usd as n basis for these studios nay make then u-.ceaary. Cnodiota - Average MW 0 0 0 113 128 113 So Si 123 169 Load factor %0 0 0 26.8 30.5 26.9 22.5 19.1 29.1 4o.i R equiremente ete-n are thoes of Eo-thne.ten/Centrs1-W-aters r-ion throug~h Other ecel-fired - Averae MW 0 0 0 25 26 20 9 7 12 48 195 and those of the three regsIons thereafte.. Load factor % 0 0 0 19.3 19.8 15.5 6.8 5.6 I.2 37.i) Oil nod gns-flred - Average MW 14 153 i6p 170 277 237 112 143 162 221 h After nesting -erhet In hydrologically critionI year, using thermal plants T,and factor 11.1 11.5 12.2 12,6 20.4 17.5 1.0 10.5 12.0) 16.3 as h-c. Defibiti-Aerage MW 0 0 0 0 0 0 0 0 0 Penis Reonirennte a hih 12756 1-4359 15991 21495 24001 26446 25724 31315 33596 36599 Availnbiliti 55 173b7 18080 18977 26067 26220 30332 33513 36038 39575 4oB4o hydro 14714 15427 16298 22064 22217 25129 27446 29633 33173 344d7 thermal 1955 1955 1955 2976 1976 4176 5375 5376 5376 5376 assal plants 698 698 730 1027 1027 1027 1027 1027 1027 1027 Balnnce 4611 3721 2986 4572 2219 3858 5035 4723 5680 4341 - 60 - BRAZIL SOUTH-SOUtHEAST POWER DISTRIBUTION PROJECT ANNEX B T_6 (Page 1 of 2 pages) Detailed Prolent Cost Estimato CEMIG C050EE ESCEISA PROJECT Qnonlo) Circuit_km 10 T&103S Ciruoit-ke 103Cr$ 103S$ Circuit-kn 103Cr -kUSs O-alt-4o 222sr. 10 USS Subt-ranoission LiMos - 34 kV *,tirteea --ilIi - 34 tk bLlnoroissirn Sines - 34 kV 642 Subtotal - - - allhtronl - - - Subtotal 6 628 45 67 626 44 Subbcnsosisstoa Minec-69 kV Subtran),o -sin Tdl-i9-69 kv Subtreosmiosion Iiaes-69 kV Ar-o -Iguatoao 20 5,927 413 Coquei-o-Ilha-Csot-e (underground) 2 34,375 2,395 Montan h-Nooortii ii 3,770 063 Arcoe-Paine 17 5,035 351 Ilha-Ceotro-Trindade 6 4,o89 285 Sao Mateus-Ped-o Cntario 40 9,550 665 C iudio-Oli-ae a 34 11,076 702 in.vill TV-Tupy 7 1,286 M.Car la-Cnsaudsl 43 11,043 770 Blumenau 11-Saito 4 1,777 124 Salto GrasdsG,-nha-s 45 11,554 B05 Tabsuao-laguorosa 19 5,804 4b4 Trniodad-llha Norte 15 5,340 372 anos_do ca Bnito-T¶iadalo 4o 27,500 i,916 Salseiros-C-b-oriu 17 5,143 358 Otalicio-Poote Alta II 28 10,232 713 X-nse-rhapeco I 35 12,125 845 Xa-nxre-Chapeco 22 35 11,455 798 Toboeao-Gu-rda-A-eebsjs 20 6,o8o 424 Toara-Mo-ro do Fomnoa 13 4,o0' 28O Tmbit,bs-Laguna 29 9 455 659 Subtotal 159 43,638 3,041 Subtotrl 7 lt r 135 69,4 Suhtotal 58 13,320 928 457 1 13,612 Sabtr.ns..ioio- Linas-138 kV Li-uttrooloeau Ii,,es - 138 k1V SNbt-.ie-oieo Line:-138 kV Adelaide Ds Ceotro-B.Pr-to (underground) 5 57,470 4,005 ElItVoool-loIavSlle T 5 1,500 105 M-ne-rhnba-Rova VeNnci 120 109,117 7,604 Araxa-Pstro-iolo 82 33,356 2,324 Blueenau Il-Bluneu Elntrooul 1 839 58 Cnrapina I-Caampion I 4 5,655 394 Arco_L-.Prata 40 15,143 1,055 Maira-cun-in as 65 9,893 6B9 Line to 0Bk2 15 23,560 1,642 B.on.u.aso-Gutierrez 5 2,260 157 Terre 69-Blu enau Elltrosal 18 12,500 871 LMe to Narataico- 25 13,951 930 Gafabhoto-A-o. 6 10,372 723 i1i-euoo TT-birama 58 23,420 1,633 LiM to Vitonia 8 20,887 1,456 Gnafnhoto-B.D.opaoho 70 23,556 1,642 lh,t--BNlauo--u Careia 00 27 5,134 358 Outierree-Bsrru Preto (underground) 3 37,930 2,643 Lage-Otacilio Conan 2I 40 15,589 1,086 Jaguar--Pas.. 1o20 48,813 3,402 Xanoen-Modolo 60 23,375 1,629 Juiz de Foes 1-Parsibon- 6 6,ioi 425 Modelo-Sao MIguol 55 21,455 1,494 Lafiaite-Pnsto Nova TT 100 40,678 2,835 Nevec-Adelaide 19 5,152 359 Norso-Betia T! 25 21,354 1,488 N-vec-Oeste 19 16,204 1,129 Nleve-F.ILpoldo III 23 8,250 575 N.Ldma-Sabara Taq.Sabaos 4 4,271 298 Patro-ioio-cprn 64 33,543 2,358 Pin-.ta-Ar-o. 40 21,152 1,474 Pimenta-Ar-os II 40 21,152 1,474 Pooto Nova I-P. Nova II 3 3,533 246 P.Leopoldo III-S.LIgoas 24 14,644 1,021 Taquaril-S.Efigenia 8 3,6i6 252 US.Esmoros--a-Lbe-l1ndia 70 28,474 1,984 VaC ea da Paln-Ttalmagnesio 3 3 660 255 Y SObtMtal 779 7013t6 32,123 6abt.tnl 329 013,705 7,923 Sobtetol 172 172,570 12,262 1,040 747,059 )t,f7t Sebt.so.nis-i-r Lines-230 kV Sabaroeeleiat Li-es-230 kv Subtrasmiasioo Linao-230 kV Tpatine-G.Va.ladaroc (eanth to M.squits) 5 9,273 645 ltebira-Ipati-nF (bran.h to Mesquite) 5 9,273 6116 ltabiSa-Ipatitgs (bra.ch to Drumood) 4 7,114 517 Subtotal 4 25,940 1,09 STog] 9,tnt - - Subttal - _ - 1 25,962 l,oO TOTAL-Subt,eoaaio- LinMo 952 530,582 36,423 Li-1-S,ntrouai -s'nn Line, 599 252,366 17.586 TOTAL-Sabtron-. Mesa 236 186,519 ¶%966 1,v87 ;6a,466,57 Sebotation- - 54.5 kV SInA labor tiine - 34.5 kV MVA Substationa - 34.5 kV MVA t.VA Son Ant.AmparP 2.5 2,297 160 Vila Valih C - 1,697 118 IJS Adil 2.5 1,221 95 apei -ds - 3,393 236 P-aDo G 1,697 liTe _______ Coal~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- D 6,5311 456 _ _ _ _ _ _ _ _ _ _ 0,6btotal 5 3,518 245 Subttotl - - _ Subtotal - 13,321 926 5 16,13? 1,173 Sab-tati-s - 69 kV %terani ona - 69 k' Sabatio-s - 69 kV Alf-nas 15 L,964 325 Jnill jj1 12.5 4,402 307 Muourici 7 10,L30 707 Alptrop,lis 12.5 3,649 254 jergue 25 2'571 179 PodSo C-nario 7 lo,L3C ,2 1 Avon, (B-cbai) - 1,672 117 Tupi - 2,455 171 S.o TAteus - 2,261 5F Aroe- (agne is Ors)t" - 1,672 117 Bruaqus 12.5 2,955 2o6 An-as (Paia-) - 1,672 117 Piten..a 7.5 2,500 174 BNa -ti 2,397 167 G-acst1 2.5 3.741 261 Ic T 2C 6,756 610 J2i',orenn 0.5 1,857 129 B.Despac:o 5 4,618 322 OrSidads 40 1,607 112 0eeau-lir- 5 3,832 267 Coqueos 30 6,875 479 anrpo Beln 10 5,661 391 Ilhs C-etr- 52 36,875 ,5370 Cs)s.a 5 3,132 239 Ilha Noate 7.5 5,179 361 li_.0,l1.S.TS400 g1 5,477 392 Join-ille V 7.5 2,455 171 (continuei no Paeg 61) 2 '-0 5 3 393 236 3'32 43 7.5 a"8 'ac 3, rM 2,3 Tb'- 7.5 2 -3 i49 4 2 ill, 5589 3 '5 1.5 I'll, V, 6 2'0 433 2 'I - 1,I' 3" 1 1: 9 "8 I 1 15 '.5 "g T8 .5 171 11.5 5 4 5 4'51'7 115 7 5 ..t ll. 5 87 -.5 fi 4 5 4Tl I-- - 7 41 l6' .5 99 "9 I58 5 7 .5 7.5 4 10 2 05 88 ',,R,6 7.5 1w 4 7, "I Al- I 5 4:731 33'. I- l 4, 65, 34 -'.Mi. 3.4 233 A 7.5 "I I - 1. -2. 7,5 "I 2--37 13171 P5 -9 595 l47, 1371 'It-T 3111 7777 -373-, r5-5 24,617 118 138 911 4?a :1 22 48 T,543 "LI 539 "31 6 78 473 443 -T.' 98 5 K 5 36: 3- 6 5 579 4, 9 464 .5 542 - 74' ,: 143 E- lll -1. - 7AC 946 11 l9 854 1,34 T5 599 16.6 14 286 995 U., 3 644 4 3: Q8 '5' .6.6 6 518 45 Ml 3,644 24 z84 58 1. 17 85 5:6,5 1, 7E8 i 3'8" 963 -13 5,65 391 3,i4i ag 3 T-l 755 117 I- 1- 1-1. 25 6,7&u 4i3 11.1 1.5 ,-71 43 "t'. I 25 T5 47 "W1 1.5 3 5 33 01 243 5 ',349 179 ;o ':583 )47 14"19 1576 5 7)57 I.:341 1,34 3 494 21 2 1 ""q)la 25, 3,4 l4 2L i5 50C 575 7:,"' 5T' (1-. IT) Is (g.t. 3:5'9 5. 279 1'6' -1 15 57 1, I60 11I '5 7,59, 13 s'14' 243 pltl..- (AT- ) - 7,1I5 5' -5 7:"T' 1,,',2 4 3 11 -,454 7Z9 4:139 211 4 59 211 15 s:qc 71 TIT 15 "",a I 15" 2'I il 5 .," 7" V ,4, 43 s",.- 711-7-F3 77 3 -1- -3 577, -1 6 -r -19T -rf-, -3--3 Ibtlll 51,371 '..tWtiM. 13. kV 8,1b.t,ti- 131 kl 13. -L7 9,76 17,111 r, 'K2 663"6 MO..tlti.. 164 - .1. 1,848.4 1'222'0e 85,165 511,7W 4I,373 ... 7,26 31:-7 11:41; 677 4 6 4 -o" I(15 4 1,741 3,.. 21,1-t _ _I :_T-11-14 ..... ... ,-94.431 ,4,34o TOT -t -25'b25 64518 1,10,114 157_143 13.0 -T 12.55 5' 'I, IIIIT '4P ...... 1X77,61 33=7141 - 62 - BRAZIL SOUTF-SOUTHEAST POWER DISTRIBUTION PROJECT ANNEX B T-7 (Pope 1 of 4 poges) PROJECT ITPLETiENTATION SCHEDULE Start proparotioo of Tooilploet Roeoei- bids for pur- d/ Complete reoieo of ' surveys & bidding documrots for ohbse of mete-isle aud/ bids cd make -erd Pleor porhose ordoro - Obteiu delioery of a/ Start lostaElatiou Cmpilete i-tvallati-e CEIVC duoucumtt oos-truction or -oo-tr-ntiou reoommendatio r u Lgsio uotr-cts mtericls or o-strultieu or -o-otrr-tieu 1179 ts 6/79 3/79 to 9/79 6/79 to 12/79 6/79 to 10/81 Sobtr--miosfio- Lives-69 kV Arros-1 guenesa Jeomry 1997 EDo-ber 19d0 April l98S September 19ff. Aroe-Peive N-uvembe- 19b0 DE--Tb-t 19b0 April 198f Septem-bt 1981 Cl-edio-Oliv-i-a Otober 1979 September 19d0 S0pL-,b- 1980 M.-h 1981 M. Curmslo-Cueueeudel Je-mery 1979 Eoceober 1979 April 1980 October 1980 Salto Gr-ode-G-ubh.ee Ja.osry 1977 harch 1978 Joly 1978 Macuh 1979 Sobtea-smissios Limes - 138 kV Adelaide Ds Ce-tco-B. frets Otober 1978 Septesber 1980 Joly 1980 Ju-e 1981 Artxa-Pat-rociio January 1977 June 1978 September 1978 June 1979 Ar-ot-L. Prets J.oucry 1979 Deoember 1979 December 1979 June 1980 lSuv..essu-sGti-erre Jn-utry 1979 Deceober 1979 J-evary 1980 September 198D Gafabhoto-Aroos Hotnber 1979 December 1980 J-uory 1901 Juo- 1981 Gaiehoto-. D-espaobo July 1978 September 1979 ODtobsr 1979 September 1980 Gutitrrs-Beets Pre-t January 1978 December 1979 October 1979 September 1980 Jaguare-P.ss.. July 1970 Jun 1979 November 1979 D-ceuhbr 1980 Jot de Foro I - Paraibun July 1977 Juo 1978 Sept-mbee 1970 December 1979 LoColete-Poete Hove II April 1970 Juoe 1979 Ju1y 1979 Jose 1990 Neve -Adel.ide benusey 1980 December 1900 Jess.ry 1981 J "se 1991 Meeto-Ostlm II Jeomery 1978 December 1978 May 1979 Deumber 1979 Neves-Seste oJly 1979 D.cember 190 Dece-brr1910 Jose 1981 Nev-P. Ltespoido III Juaory 1979 Dcoember 1979 J -ousry 1980 Juse 1980 N. Litm - Sabara Tq. Sab.sc Januory 1978 Deoember 1979 April 1979 September 1979 Pst_ooivio_Cprm Jb-s-ty 1977 Merch 1978 Ontobsr 1978 Joly 1979 Pi-enta-Arous Jonuary 1977 Jose 1979 Jeseury 1979 Sept-mber 1979 Pi_este-A-cos IT Jsa--rv 1990 December 1990 Jessery 1991 September 1991 Poite Nova I - P. Nors II HOtober 1970 Septeobee 1979 Jamusey 1990 Jose 1980 P. Leopoldo III-S. Lgoass Joly 1978 Septeotre 1979 OIteber 1979 Jose 198D Taqoaril-S. Cfemis Januory 1979 December 1979 Ja...ry 190 Jose 1980 Cmborcaspo-DberlnEdl July 1079 December 1990 ..soember 1980 September 1981 Vcre dc Palma-Italmagnesio Uccober 1977 September 1978 D.eu.b-r 1978 Macoh 1979 Sobtesmiv i- Lins. - 230 kV Iptu uE ran;m dss ss (bessob to Mlesqoita) Jososey 1979 D-oeemr 1979 April 1980 September 1989 ltsbtrs-Ipstingn (bresoh to Mesquite) Janusry 1979 Deosmber 1979 April 1980 Sep-emher 198D It.bira-Ipotiogs (brecoh to Drumond) Ottober 1970 Srpte-be- 1979 Jesmary 1990 J.us 1980 SobstotiEm - 34.5 kV S.n Act. " mparo Ootobsr 1977 Just 1970 September 1978 Maceh 1979 US Asii October 1979 September 1990 Sub tatiose - 69 kV Alfsn-s July 1979 June 1979 Jmly 1979 December 1979 Alpinopolls Jossery 1979 Seeube 1970 Ap,il 1979 September 1979 AMcos (PBsboi) April 199 March 1981 April 1981 Sept-mbe- 1991 Arose (Legue da Pfrts) Apeil 1979 Septembec 1979 Jamuery 1989 Jose 1980 Artos (peis) April 198 M-arch 1981 April 1981 September 1991 Bamboi Jsmeary 1980 M-ch 1981 April 1981 September 1981 im I S. Despachb July 1978 September 1979 Jenusry 1980 September 1980 Camboquire July 1978 September 1979 APril 1990 September 1980 Campo BDlo Apeil 1979 Joom 1997 April 1981 September 1991 Cassie July 1970 MOcth 1979 April 1979 Sepiesber 1979 Eld.Isd.D.Loest Cloudio Jon-sey 1970 Dec mber 1978 JJss-ry 1979 Jve 1979 Cl_sdio (Elio-ire) Octmb_r 1979 Septesber 1910 October 1990 M rch 1981 Frrutl Jr.uery 1978 September 1978 Jisuer7 1979 Jus 1979 loeshees Ibis Janutry 1977 Septeober 1977 January 1979 June 1979 Ituiutaba July 1977 June 1978 Ociobec 1978 March 1979 Jampruc Janosry 1978 Seyt_ober 1"77 J--ocy 1990 Jose 1997 J. Moslem-de July 1979 Derember 1980 April 1989 Septesb r 1991 Perts Apeil 1971 September 1979 Ocrtober 1979 Jsn 1997 N. Se-am July 1970 MIrcb 1979 April 1980 September 1980 Olioeit- Jaoscry 1978 Soptember 1q79 Jatucry 1979 bore 1979 Oli-eira (CI-odio) Pe_s I octeber 1979 Dermober 1980 April 0901 Heytember 199 P.r de Mimes Jauarey 1978 December 1978 Joly 1979 D cember 1979 Posses Pium-I Octtber 1979 December 1990 April 1991 September 1981 Post Sore July 1977 Jove 1979 Jeesrey 1979 Joco 1979 Resplendor October 1977 Jose 1979 October 197b Mrcbh 1979 S. besseds Jtnoty 197d Sept_ober 0979 October 1979 Marbi 19b0 Tres Pontms J_voary 1977 December 1979 April 1981 September 1981 DS. Cafohtoto July 1971 September 1979 April 1980 September 1980 US. Peti J--osey 1978 December 1978 Joly 1979 Dcoeber 1979 Us. Sclto Grand July 1977 Seyrprbsr 1970 October 1978 Meroh 1979 / COMIC intends to i-hite fo' s fee buds oith etogoered dsli-yro dcr- for a sroup of lions od subntsEti-. (cootioued oe Page 63) - 61 - BRAZIL SOUTH-SOUTUEAST POWER DISTRIBUTION PROJECT ANNEX B T-7 (page 2 of 4 pages) PROJECT IMPLEMENTATION SCHEDULE Start preparation of Complete Receive bide for par- Cmplete review of sorveys & bidding documents for chases of eateials ad/ bids and ake award Place purch-ae orders Ohtain delivery of Start installotion Complete installotio- documents cont-ucti-o or construction reco- mendatio- or sign contracts materials or conotruction or construction CEMIG (cost'd.) Substations - 138 kV Adelaide (Barro Preto) October 1978 September 1980 October 1980 June 1981 Adelaide (Naves) July 1978 June 1980 October 1980 June 1981 Aeagoari II January 1979 December 1980 January 1981 September 1981 Araguari II (Ubarlandia II) January 1979 December 1980 January 1981 September 1981 Araeo (Pateocisio) April 1977 '.cpt-abar 1978 December 1978 June 1979 Areas January 1979 December 1980 January 1981 September 1981 Aecos (Pimenta) Janaury 1977 Dece-ber 1980 December 1978 September 1981 Barro Preto (Adelaide) October 1978 September 1980 October 1980 June 1981 Barrm Preta November 1977 March 1979 July 1979 Septe-ber 1980 Betim IT October 1977 March 1979 April 1979 Dece-ber 1979 Betim III October 1978 September 1980 July 1980 September 1981 Bossucesso April 1978 December 1979 January 1980 September 1980 Cestro January 1977 March 1978 July 1978 March 1979 Cinen January 1978 June 1979 June 1979 December 1979 Divinopolis II July 1978 June 1980 April 1980 June 1981 Gutierre- Itajuba January 1978 December 1979 October 1979 September 1980 Itauna January 1979 Juae 1980 October 1980 March 1981 Jaguara July 1978 March 1980 April 1980 December 1980 Jnoa Pinheiro January 1978 June 1979 July 1979 March 1980 Juiz de Fore I April 1977 June 1978 July 1978 December 1978 Lafaiete April 1978 December 1979 January 1980 September 1980 Lafaitet (Ponte NOVA) January 1978 September 1979 October 1979 June 1980 Lavras January 1979 September 1980 January 1981 Septenber 1981 Marscana January 1979 September 1980 October 1980 June 1981 Nevee (Adelaide) July 1978 June 1980 October 1980 June 1981 Nlaes (Betim II) January 1977 March 1978 April 1979 December 1979 Nevee (Oate) October 1978 September 1980 October 1980 June 1981 NSves (Sete Lagoas) January 1977 March 1978 October 1979 June 1980 Oaste January 1978 June 1980 April 1980 June 1981 Paracatu II January 1978 June 1979 April 1979 March 1980 P.ssos February 1977 December 1977 April 1979 September 1979 Pamte de Mines October 1978 June 1979 Patrocinio April 1978 December 1979 January 1980 June 1980 Patrocinio (Cprm) January 1977 June 1978 October 1978 July 1979 Patrocisio (Arsxa) January 1977 June 1978 October 1978 June 1979 Pimenta January 1977 December 1980 July 1978 Septembhr 1981 P.Nova IT January 1978 September 1979 July 1979 June 1980 Pouso Alegre April 1978 December 1979 January 1980 September 1980 P.Leopoldo III April 1977 June 1978 July 1978 March 1979 Sab.ra October 1977 December 1978 January 1979 September 1979 Santa Efigenia (Centro) January 1977 June 1978 July 1978 March 1979 Santo Efigenia (Taquaril) April 1978 September 1979 October 1979 June 1980 Sete Lagoas I January 1978 September 1979 October 1979 June 1980 S.Rita Sapweai April 1978 December 1979 January 1980 September 1980 Taquaril November 1977 September 1979 October 1979 June 1980 Uberaba III January 1978 September 1979 July 1979 September 1980 Uberlandia I January 1979 December 1980 January 1981 September 1981 Uberlandia VI January 1979 September 1980 October 1980 Jone t981 Varginha July 1978 December 1979 January 1980 September 1980 Var-ea do Paimn July 1977 September 1978 September 1978 March 1979 Substations - 230 kY Drummond October 1977 September 1979 July 1979 June 1980 Distribution Eap.nsion February 1978 December 1978 ( March 1979 ( June 1979 (Auguot 1979 tFeb-ury 1980 J --ntyrv 1980 ( J-ne 1980 ( to to to( tO tO to MiNcellaneous Equipment February 1978 December 1978 (March 1980 Jun 1980 (Aog-s 1980 (Jun 1981 (J 1981 ( Dee ber 19bl (coot. 00 page 64) G~~~~~~~~~~~E 2 -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~A- - 4 4 4 4444444 44 444-~~~~~~ 4 44 - 44 E g-_----- - ° ° -4 - - -4 - - CD 4- D4 D4 g- O N~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ a C ~ ~ ~ ~ ~ 4" -44 |4 44 E4 4 D~~~~~' 4444 44"4 o4 44 _444 _ 4 4 4 4 4 _ .F W ' J X C X L e a m C s ~ ~ ~ 4' 4 v Gl i a P a n P a _ sA O _ n a~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~4 0 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~4 44 c444~~44444 r C '- 4 … ~~~~- 44 4 G - - -. 44 4 .1~~~~~~~~~~~~~ _ 4444 4. ,.4- 4 '444 44 4- 4 _ I u~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 44444 4 4 ~'---4 O ~ ~ ~ ~ ~ ~ ~ % r 44 44 444 44 44,4 4 - ~ ~ ~ ~ ~ ~ ~ ,4 4~ 4.4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 r ~ ~ ~ 4 -4 - u4 D4 44 c -D c4 > ~ ~ ~ ~ 444444 444 4 _ 44 ,, . '4 '4 - -'-4 ~~~~~4 , 4 4 4 4~- - 4 .' . , 5 - - 4- - 4 '7 4 4a 7 '7 A ,7 ,4' 4 4_4c4 4 44g4 4 4 4 44e4 4c, 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 , 4 4 44e 4 E E4E E4 o ~ ~ ~ ~ ~ 4 - 4 - ~~~~~~4 44 +~~~~~~4 4 < 4 t 44 o 4 4,4 cDOmA oo -4a .C xos _ ~ ~ ~ ~ ~ ~~44 4i _ 4 D44- 4 4 4-44444_44__444 a D 4 D D C ~ ~ ~ ~ ~ ~ 4444444 4 >2 | 4 -ii. 5 ~ ~ ~ ~ ~ ~ 4 4 4 4 4 4 |,444 4,4 _4 44444444 XH i o ~ ~ ~ ~ 44 44 |4444444444 4444444 444_ - - 4- 4 <' 44 44 444 2 + J X | ° l X U L g ^ = j O S < O o X a i E Q = Q z ~~~~~~~~ ~ ~ ~ :22_ X e 444 4 - 4 O , D 4444 44 44444-444444 24t~~o4444444444o4444444 - 65- BRAZIL SOUTII-SOUTHEAST POWER DISTRIBUTION PROJECT ANNEX B -7 (Page 4 of 4 pages) PROJECT IMPLEMENTATION SCHEDULE Start preparation of Complete Receive bids for pur- Complete review of surveys & bidding documents fr chases of materials and/ bids and make award Place purchase orders Obtain delivery of Start installation Complete installation documents constructic or construction recommendation or sign contracts materials or construction or construction ESCELSA Subtransnission Lines - 34 kV Praia-Vila Veiha started September 1978 March 1979 June 1979 Aagust 1979 February 1979 January 1980 June 19 Subtransmission Lines - 69 kV Mostanba-Mucurici January 1979 September 1979 March 1980 June 1980 August 1980 Fehruary 1981 January 1981 December 1981 Sao Mateus-Pedro Casario January 1979 September 1979 March 1980 June 1980 August 1980 Fehruar 1981 January 1981 December 1981 Subtranemission Lines - 138 kV Mascarenhas-Nova Venecia March 1978 September 1978 March 1979 June 1979 August 1979 February 1980 January 1980 December 1980 Carapina I - Corepina II March 1978 September 1978 March 1979 June 1979 August 1979 February 1980 January 1980 June 1980 Line to IBES January 1979 September 1979 MaNch 1980 June 1980 August 1980 June 1981 May 1981 December 1981 Line to Marataizes January 1979 September 1979 March 1980 June 1980 August 1980 June 1981 May 1981 December 1981 Line to Vitoria March 1978 September 1978 March 1979 June 1979 August 1979 Fehruary 1980 January 1980 June 1980 Subetations - 34.5 kV Vile Velha C March 1978 September 1978 March 1979 June 1979 August 1979 February 1980 January 1980 June 1980 Campo Grande B March 1978 September 1978 March 1979 June 197Q August 1979 February 1980 January 1980 June 1980 Praia G March 1978 September 1978 March 1979 June 1979 August 1979 February 1980 January 1980 June 1980 Paul D January 1979 September 1979 March 1980 Juno 1980 August 1980 February 1)81 January 1q81 Juno 1981 Substations - 69 kV Mucurici January 1979 September 1979 March 1980 June 1980 August 1980 Fobruary 1981 January 1981 December I581 Pedro Canario January 1979 September 1979 March 1980 June 1980 August 1980 February 1981 January 1981 December 1981 Sao Mateus January 1979 September 1979 March 1980 June 1980 August 1980 February 1981 January 1981 December 1981 Substations - 138 kV Carapina II March 1978 September 1978 March 1979 June 1979 August 1979 February 1980 January 1980 June 1980 Tbes January 1979 September 1979 March 1980 June 1980 August 1980 February 1981 January 1981 December 1981 Vitoria II March 1978 September 1978 March 1979 June 1979 August 1979 February 1980 January 1980 June 1980 Marataiees January 1979 September 1979 March 1980 June 1980 August 1980 February 1981 January 1981 December 1981 Nova Venecia March 1978 September 1978 March 1979 June 1979 August 1979 February 1980 January 1980 June 1980 Mascarenhas March 1978 September 1978 March 1979 June 1979 August 1979 February 1980 January 1980 Juce 1980 Guarapari January 1979 September 1979 March 1980 June 1980 August 1980 February 1981 January 1981 June 1981 Alto Lage January 1979 September 1979 March 1980 June 1980 August 1980 February 1q81 January 1981 June IfIl Distribation Etpansion February 1978 December 1978 (4archs 1979 Jue 1979 ( Auguat 1979 < Februarv 1980 ( January 1980 ( June 1980 ( to ( to ( tto t ( to ( t Ni-Icelaneous Egoipnent February 1978 December 1978 (March 1980 (June 1981 ( August 1980 (J-ne 1961 (Jane 1981 (Deceber 1991 66 BRAZIL SOUTH-SOUTHEAST POWER DI-STRIBUTION PROJECT ANNEX B T-8 Actual and Proposed Terms Applicable to Long-term Debt to 1982 Loan Amount (iin million units of Grace Period Amortization Loan applicable (years and Period (years Coetment Creditor Purpose Date currency) Currency months) and months) Interest Rate e FOREIGN LOANS - EXISTING IBRD - 442-BR Jaguara 1966 49.0 USS equiv. 5-6 19-6 6.0X 566-BR Volta Grande 1968 26.2 6-3 18-9 6.5% - 829-BR Sao Simao 1972 60.0 7-4 22-8 7.252 - 478-BR System Expansion 1966 6.3 5-2 14-10 6.0% Bank of America No. I Igarape 1974 20.0 USS 4-0 8-0 LIBOR + 0.752 B. of America No.2 Sao Simao 1975 45.0 1-6 3-6 LIBOR + 2% AID - 512-L-014 System Expansion 1963 5.1 " 4-9 16-3 5.0% KFW - DM-16 Tres Mariaa 1965 16.6 DM 4-5 15-7 5.0% CITIBANK No. 4 Sao Simao 1974 20.0 US 4-0 8-0 LIBOR + 1.5% No. S " 1975 10.0 " 2-0 6-0 LIBOR + 1.875% No. 8 1976 20.0 US$ 2-6 5-6 LIBOR + 2.25X LIBRA BANK NO. 1 " 1973 8.0 5-0 7-0 LIBOR + 0.875% " No. 2 Igarape 1973 12.0 " 5-0 10-O LIBOR + 0.875% SKODAEXPORT " 1973 14.0 SW Fr 4-0 11-0 6.5% PARIBAS (BFCE) Sao Simao 1973 15.0 Pr Fr 5-6 9-6 6.5% EXBIMANK OF JAPAN 1973 9.8 ' 5-10 9-2 7.0% ELETROBRAS (Repass, several loans) System Expansion 1965/1973 19.6 USS 0-7/4-5 4-5116-7 6.0% - 6.5% LOCAL LOANS - EXISTING ELETROBRAs: ECF - 79/69-A/70 . 3/71-D/76 Volta Grande 1969 360.9.!/ Cr$ 4-11 12-1 10.0% - 79-C/73 " 1973 95.3 " 1-4 11-8 10.0% - 102173-B/76 System Expansion 1973 267.8 3-3 16-9 10.0% - 121/74 1974 479.5 " 0-1 9-11 10.0% - 186-E/76 Sao Simao 1976 1.754.3 " 3-3 9-9 10.02 - 187-D/76 " " 1976 1,479.3 " 3-3 9-9 10.0% - 253/74-253- 3/76 System Expansion 1973 56.9 5-6 6-6 10.0% - 256/73 - 256-8/76 Sao Simao 1973 100.7 " 4-2 10-10 10.0% - 295/74 Volta Grande 1974 63.,7 " 1-1 12-11 10.0% - 404/76 Igarape 1974 116.0 1-0 11-0 10.0% - 307-C/76 System Expansion 1976 734.0 " 3-3 9-9 10.0% - 320-74 1974 169.6 2-7 9-5 10.0% - 328-74 " 1974 63.4 " 1-9 10-3 10.0% - 359-74 " 1974 80.3 " 0-3 11-9 8.0% - 424-76 " 1976 133.1 1-7 7-5 10.0% - 458-76 " 1976 141.7 " 1-4 9-8 10.0% - 62/75 San Simao 1975 524.9 4-3 10-9 7.52 BNDE: Several 1972/S 1,448.9 0-1/3-9 7-9/16-9 1 to 9Xi/ Caixa Economica Federal (PIS) Volta Grande 1974 50.0 " 2-1 5-11 7.0% BDMG - FINANE System Expansion, Sao Simao 1975/76 1,003.6 2-0/2-9 0-0/11-3 9.0%, 8.5X, 1% to 92-/ Others System Expansion Several 229.9 Several Several Several FOREIGN LOANS - PROPOSED Chase Manhattan Bank Sao Simao 1977 20.0 USS 3-0 5-0 LIBOR + 2 1/42 Braxcan System Expansion 1977 5.0 1-3 3-0 + 2 1/82 Proposed IBRD loan Distribution 1978 58.1 ' 3-0 12-0 8.5% IDB Emborcacao 1978 69.8 " 5-0 15-0 8.35Z LOCAL LOANS - PROPOSED ELETROBRAS System Expansion Emborcarao 1977 5,079.8 Cr$ (3-0 (10-0 (10% (5-0 (10-0 (10% BDMG - FINAME System Expansion 1978 902.5 " 2-0 6-0 8.5% "1 "1 Sao Simao 1977 360.0 2-0 8-0 8% SUPPLIERS-FINAME Emborcacao 1978 564.2 5-0 10-0 8% FINEP " 1977 206.8 3-0 6-0 8% ELETROtBEAS-utura MD" Ponte & Loams Igarapava 1979 1,557.3 " 4-0 10-0 10% RNDE-Ftl Future Nova Ponta 1 Loans .1 Igarapava 1979 1,328.4 4-0 10-0 10% ELEITROBRAS-Future Loaus Systm Expasion 1978 3,147.9 5-0 10-0 1oz &NDE-FLICAME - Future Loans " 1978 4,877.6 " 5-0 10-0 9% a/ Adjusted for monetary correction to December 1975; b/ Varies according to the degree of national equipment being financed. c/ Including som,e foreign loans. I 67 BRAZIL SOUTH-SOUTHEAST POWER DISTRIBUTION PROJECT ANNEX B T-9 CEMIG Actual and Forecast Long-Term Debt Statements 1976-1982 (in millions of June 1977 cruzeiros) 1976 1976 1977 1978 1979 1980 1981 1982 (after revaluation) --in current Cr$-- FOREIGN LOANS - EXISTING IBRD - 442-3R 444.3 640.8 743.8 707.0 668.0 626.6 582.7 536.1 566-BR 242.1 344.9 402.5 387.7 372.0 355.1 337.2 318.0 829-BR 460.8 642.7 892.0 903.8 895.9 879.2 861.2 842.3 478-BR 54.3 76.0 86.3 79.4 72.2 64.5 56.3 47.5 8ank of America: 1st 181.4 246.9 297.0 262.1 227.2 192.4 157.5 122.6 2nd 408.2 555.5 501.2 334.1 167.0 - - - AID 512-L-014 22.1 30.1 32.0 27.8 23.6 19.4 15.2 11.0 KEW DM-16 30.7 46.2 76.6 83.7 77.2 70.7 64.2 57.7 Citibank No. 4 181.4 246.9 297.0 279.6 244.7 209.8 174.9 140.0 No. 5 90.7 123.5 125.7 102.9 80.0 57.1 34.3 11.4 No. 8 129.6 148.1 267.3 272.2 222.7 173.1 123.5 73.9 Libra Bank No. 1 72.6 95.1 114.4 106.5 90.6 74.7 58.8 42.9 No. 2 115.8 151.8 197.4 273.7 305.7 218.7 271.8 257.7 Skodaesport 121.3 174.9 191.3 160.5 134.4 120.3 104.3 88.3 Paribas (BFCE) 25.0 30.5 154.7 207.2 209.0 186.9 164.9 142.9 Eximbank - Japan 4.0 5.4 156.4 351.0 348.6 312.5 276.4 240.3 ELETROBRAS (Repass): 225.5 270.9 302.7 273.9 223.8 123.2 28.0 - Total foreign loans-existing 2,809.8 3,830.2 4,838.3 4,813.1 4,362.6 3,754.2 3,311.2 2,932.6 LOCAL LOANS - EXISTING ELETROBRAS ECF-79/69 - A/70 & B/71-D/76 260.2 311.6 316.9 258.9 207.5 157.6 107.7 57.8 -79-C/73 76.9 92.0 96.5 82.3 68.1 53.9 39.7 25.5 -102/73-8/76 267.8 320.6 354.5 323.4 292.2 261.1 229.9 198.7 -121/74 337.8 404.5 379.0 275.0 183.8 108.7 36.0 - -186 E/76 1,124.6 1,346.3 2,074.2 2,252.9 2,352.1 1,985.6 1,707.8 1,474.4 -187 D/76 351.5 420.7 914.2 1,449.5 2,091.4 2,420.1 2,246.4 2,072.7 -253/74 - 253-B/76 56.9 68.3 82.2 81.1 63.4 45.7 31.4 18.2 -256/73 - 265-B/76 100.7 120.6 145.0 145.1 145.1 145.1 165.1 185.1 -295/74 54.5 65.2 68.9 59.4 49.9 40.4 30.9 21.4 -404/76 101.5 121.5 140.5 115.1 93.4 71.6 54.5 37.7 -307 - C/76 223.8 267.9 637.9 840.8 930.2 819.8 731.8 643.7 -320 - 74 153.3 183.5 207.6 174.9 145.3 119.0 92.6 66.3 -328-74 57.9 69.3 95.5 104.3 94.1 84.3 74.6 64.9 -359-74 73.0 87.4 100.7 96.6 89.9 83.1 76.4 69.7 -424-76 86.8 103.9 180.7 160.7 140.8 120.8 100.8 80.8 -458-76 82.7 99.0 190.2 173.1 156.0 138.9 121.9 104.8 -62/75 524.9 628.3 755.8 755.8 743.7 687.6 630.2 572.9 BNDE 662.3 683.7 1,243.9 1,495.4 1,303.3 1,111.2 919.1 723.6 Caixa Ecouosica Federal (PIS) 43.7 43.7 42.6 32.6 22.6 12.6 2.6 0.1 BDMG/FINAME 419.6 419.6 1,141.3 1,783.4 1,989.2 1,793.3 1,565.7 1,353.6 Others 165.4 196.5 527.9 596.4 591.9 574.3 556.7 439.7 Total local loans - existing 5,275.8 6,054.1 9,696.0 11,256.7 11,753.9 10,834.7 9,521.8 8,211.6 Total existing loans 8,035.6 9,884.3 14,534.3 16,060.9 16,116.5 14,588.9 12,833.0 11,144.2 FOREIGN LOANS - PROPOSED Chase Manhattan Bank 297.0 297.0 297.0 264.0 198.0 132.0 Brascan 74.2 62.3 41.5 20.7 - Proposed IBRD loan - 16.4 211.4 532.0 640.2 614.8 IDB - 92.4 504.8 1,067.9 1,S60.2 1525.7 Total foreign loans - proposed 371.2 468.1 1,054.7 1,984.6 2,298.4 2,272.5 LOCAL LOANS - PROPOSED ELETROBRAS 432.6 1,541.3 2,662.0 3,590.5 4,3;1.0 4,702.9 BDMG - FINAME - 180.5 361.0 511.4 631.7 722.0 BDMG - FINAlE 24.1 240.6 337.4 306.0 274.6 243.2 Suppliers FINAME - 62.8 169.5 374.1 508.6 564.2 FINEP 38.7 105.1 164.5 199.1 206.8 172.7 ELE7ROBRAS - Nova Ponte 6 Igarapava - - - - 136.3 460.2 1,026.9 1,557.3 BNDE-FINAME - " " - - - - 129.8 425.3 921.1 1,328.4 ELETROBRAS - Other Fut. Loans - - - 459.3 1,064.3 1,705.1 2,232.3 3,147.9 BNDE - FLN3AME" " _ _ - 949.3 2,232.0 3,618.1 4,834.6 4,877.6 Total ocal l..I s. - proposed - - 495.4 3,538.9 7,256.8 11,189.8 14,987.6 17,316.2 Total proposed loans - - 866.6 4,007.0 8,311.5 13,074.4 17,286.0 19,588.7 Total loans 8,035.6 9,884.3 15,400.9 20,071.8 24,423.0 27,658.3 30,114.0 30,727.9 - 68 - BRAZIL SOUTH-SOUTHEAST POWER DISTRIBUTION PROJECT ANNEX B T-10 CEMIG Forecast Long-Term Debt Disbursement Statement 1977-1982 (in millions of June 1977 cruzeiros) 1977 1978 1979 1980 1981 198 FOREEGN LOANS - EIIS7ING IURD 829-BR 118.9 11.8 - - - - KIcW DM 16 27.5 13.6 - - - - Citibank No. 8 89.1 29.7 - - - - Libra Bank No. 2 14.8 84.7 49.0 - - - Skodaexport 12.6 - - - - - Paribas 118.0 52.4 12.8 - - - Eximbank - Japan 149.9 194.6 15.6 - - - Total foreign loans - existiag- 530.8 386.8 77.4 - - - LOCAI, LOANS - gXISTING ELETODBRAS ECF 186-E/76 454.6 178.6 99.2 25.0 - - 187-D/76 408.1 535.3 641.9 620.9 - - 256/73-265-B/76 - - - - 20.0 20.( 404-76 19.7 - - - - - 307-C/76 315.7 202.8 89.4 6.0 320-74 19.6 - - - - - 328-74 24.3 20.9 - - - - 359-74 2.3 2.6 - - - - 424-76 55.7 - 458-76 71.1 - _ _ BNDE 497.8 347.2 - - - - BDMG - FINAME 701.8 669.2 307.2 - - - Others 314.5 91.1 13.0 - - - Total local loans *- existing 2,885.2 2,047.7 1,150.7 651.9 20.0 20.N Total existing loans 3,416.0 2,434.5 1,228.1 651.9 20.0 20.' FOREIGN LOANS - PROPOSED Chase Manhattan Bank 297.0 - - - - - Brascan 74.2 - - - - - Proposed IBRD Loan - 16.4 195.0 320.6 131.0 2C IDB - 92.4 412.4 563.1 392.3 118 Total foreign loans - proposed 371.2 108.8 607.4 883.7 523.3 138 LOCAL LOANS - PROPOSED ELETROBRAS 432.6 1,112.2 1,124.3 997.2 829.2 584 BDMG - FIINME - 180.5 180.5 180.5 180.5 180 BDMG - FINAME 24.1 216.5 120.3 - - - Suppliers - FINAME - 62.8 106.7 204.6 134.5 55 FINEP 38.7 66.4 59.4 34.6 7.7 - ELETROBRAS - Nova Ponte & Igarapava - - 136.3 323.9 566.7 53C BNDE-FINAME - Nova Ponte & Igarapava - - 129.8 295.5 495.8 40, ELETROBRAS - Other future loana - 459.3 605.0 640.8 527.2 91' NDE - FINAME - Other future loans - 949.3 1,282.7 1,386.1 1,216.5 42 Total loeal loans - proposed 495.4 3,047.0 3,745.0 4,063.2 3,958.1 2,71f Total proposed loans 866.6 3,155.8 4,352.4 4,946.9 4,481.4 2,85i Total loans 4,282.6 5,590.3 5,580.5 5,598.8 4,501.4 2,87' - by BRAZIL SOUTH-SOUTHEAST POWER DISTRIBUTION PROJECT ANNEX B CEfIG Forecast Long-Term Debt Amortization Statement 1977-1982 (in millions of JLzo 1977 cruzeiros) 1977 1978 1979 1980 1981 1982 FOREIGN LOANS - EXISTING IBRD 442-BR 27.1 36.8 39.0 41.4 43.9 46.6 566-BR 12.4 14.8 15.8 16.8 17.9 19.2 829-BR - - 7.9 16.7 17.9 18.9 478-BR 5.2 6.9 7.2 7.7 8.2 8.8 Bank of America No. 1 - 34.9 34.9 34.9 34.9 34.9 ". 1 it No. 2 167.1 167.1 167.1 167.0 - - AID 512-L-014 4.2 4.2 4.2 4.2 4.2 4.2 KFW DH 16 6.5 6.5 6.5 6.5 6.5 6.5 Citibank No. 4 - 17.4 34.9 34.8 34.9 34.9 No. 5 22.9 22.9 22.9 22.9 22.9 22.9 No. 8 - 24.8 49.6 49.6 49.6 49.6 Libra Bank No. 1 - 7.9 15.9 15.9 15.9 15.9 " No. 2 - 8.4 17.0 17.0 17.0 14.1 Skodaexport 31.8 30.8 26.1 14.1 16.0 16.0 Paribas - - 10.9 22.0 22.0 22.0 Eximbank - Japan - - 18.0 36.1 36.1 36.1 ELETROBRAS (Repass, several loans) 23.2 28.8 50.2 100.6 95.2 28.0 Total Foreign Loans - Existing 300.4 412.2 528.1 608.2 443.1 378.6 LOCAL LOANS - EXISTING ELETROBRAS ECF 79/69-A/70 and B/71-D/76 58.0 57.9 51.4 49.9 49.9 49.9 79-C/73 14.2 14.2 14.2 14.2 14.2 14.2 102/73-B/76 31.2 31.2 31.2 31.2 31.2 31.2 121/74 106.7 104.9 91.2 75.1 72.8 36.0 186-E/76 - - - 391.6 277.8 233.4 187-D/76 _ _ - 292.2 173.7 173.7 253/74-253-B/76 - 1.1 17.1 17.7 14.3 13.2 295/74 9.5 9.5 9.5 9.5 9.5 9.5 404/76 25.4 25.4 21.8 21.8 17.1 16.8 307-C/76 - - - 116.3 88.1 88.1 320-74 32.7 32.7 29.6 26.3 26.3 26.3 328-74 12.1 12.2 10.2 9.7 9.7 9.7 359-74 6.7 6.7 6.7 6.7 6.7 6.7 424-76 - 20.0 20.0 20.0 20.0 20.0 458-76 - 17.1 17.1 17.1 17.1 17.1 62/75 - - 12.2 56.1 57.3 57.3 BNDE 76.4 95.6 192.1 192.1 192.1 195.5 Caixa Economica Federal 10.0 10.0 10.0 10.0 10.0 2.5 BDMG - FINAME 65.9 27.1 101.5 195.8 227.6 212.1 Others 22.9 22.3 17.6 17.6 17.6 117.0 Total Local Loans - Existing 471.7 487.9 654.0 1570.9 1333.0 1,330.2 Total Existing Loans 771.1 900.1 1182.1 2179.1 1776.1 1,708.8 FOREIGN LOANS - PROPOSED Chase Manhattan Bank - - - 33.0 66.0 66.0 Brascan - 11.9 20.8 20.8 20.7 - Proposed IBRD loan 22.8 45.5 DB - - - - - 52.6 Total Foreign Loans - Proposed - 11.9 20.8 53.8 109.5 164.1 LOCAL LOANS - PROPOSED ELETROBRAS - 3.5 3.6 68.7 68.7 232.4 BDM - FINAME - - - 30.1 60.2 90.2 - - 23.5 31.4 31.4 31.4 SUPPLIERS - FINAME - - - - _ - FINEP - - - 34.1 ELETROBRAS - Nova Pont. & Igarapava - - - - WNDE7 - FINAME - Nova Ponte & Igarapava - - - ELETROBRAS - Other future loans - - - - - - BNDE--FINAME - Other future loans - - - - - - Total Local Loans - Proposed - 3.5 37.3 129.8 175.4 388.1 Total Proposed Loans - 15.4 48.1 183.6 284.9 552.2 Total Loans 771.1 915.5 1230.2 2362.7 2061.0 2261.0 - 70 - BRAZIL SOUTH-SOUTHEAST POWER DISTRIBUTION PROJECT ANNEX B T-12 CEMIG Forecast Interest Charges 1977 - 1982 (in millions of June 197/ cruzieirio 1977 1978 1979 1980 1981 1982 FOREIGN LOANS - EXISTING IBRD - 442-BR 45.7 43.7 41.4 39.0 36.6 33.8 566-BR 26.8 25.9 24.9 23.8 22.7 21.5 829-BR 60.2 65.2 65.7 64.8 63.5 62.3 478-BR 5.4 5.1 4.6 4.1 3.6 3.1 Bank of America No. 1 25.0 24.3 21.4 18.5 15.5 12.5 Bank of America No. 2 57.6 40.8 24.5 8.2 - - AID - 512-L-014 2.1 1.8 1.6 1.3 1.1 0.8 KFW-DM-16 2.6 2.4 2.0 1.7 1.4 1.1 CITIBANK No. 4 37.9 37.9 34.5 30.1 25.6 21.2 CITIBANK No. 5 12.6 10.6 8.5 6.6 4.6 2.5 CITIBANK No. 8 21.3 30.3 24.7 20.0 15.3 10.6 LIBRA Bank No. 1 9.5 9.5 8.5 7.2 6.0 4.7 LIBRA Bank No. 2 14.3 14.3 13.2 11.9 1C.5 9.1 SKODAEXPORT 28.3 11.8 10.0 8.5 8.5 6.5 PARIBAS (BFCB) 8.4 14.0 10.8 15.3 13.7 11.2 EXMIBANK OF JAPAN 3.0 13.7 24.5 22.7 2C.3 17.7 ELETROBRAS (Repass, several loans) 25.0 52.6 62.7 57.9 51.5 1.3 Total foreign loans - existing 385.7 403.9 383.5 341.6 30C.4 219.9 LOCAL LOANS - EXISTING ELETROBRAS ECF - 79/69-A/70 and B/71 and D/76 44.8 38.5 32.2 26.7 21.3 15.9 79-C/73 12.6 11.8 10.2 8.7 7.1 5.5 102/73-B/76 41.9 38.7 35.6 32.5 29.9 26.3 121/74 55.6 4.5' ~ 33.2 24.2 16.0 8.1 186-E/76 267.4 305.9 323.7 288.5 251.9 222.2 187-D/76 76.3 131.0 199.9 220.5 192.6 173.5 253/74-253-B/76 10.8 11.3 9.7 7.8 5.9 4.5 256/73-256-B/76 20.0 20.0 20.0 20.0 20.0 20.0 295/74 9.3 8.3 7.2 6.3 5.2 4.1 404/76 19.6 17.7 15.2 12.6 1C.6 6.9 307-C/76 44.4 78.4 98.3 91.9 8C.4 70.7 320-74 25.6 23.3 19.7 16.7 1'.8 10.9 328-74 9.7 8.4 7.1 6.0 4.9 3.8 359-74 9.4 8.9 8.3 7.8 7.3 6.7 424-76 15.5 16.7 14.6 12.4 10.2 7.9 458-76 14.9 18.5 16.1 14.3 12.4 10.6 62/75 47.4 47.4 47.4 44.9 40.7 36.3 IWDg 77.2 96.1 83.8 70.6 57.1 45.8 Casla Economics Fedetral (P1S) 3.4 2.6 2.0 1.3 0.6 - BDMG - ?INAMg 67.6 112.8 137.3 131.6 115.7 97.1 Others 18.6 18.2 16.1 14.7 12.9 11.5 Total local loans - eXisting 892.2 1.059.0 1,137.6 1.060.0 916.5 788.3 Total existing loans 1277.9 1.462.9 1.521.1 1.401.6 1.216.9 1.008.2 FOREIGN LOANS - PROPOSED Chase Manhattan Bank 3.8 26.0 26.0 26.0 21.7 15.8 Brascgn 2.8 8.2 6.1 3.8 1.4 - Proposed IrsD loan - 0.7 -9.7 31.6 49.8 53.3 IDB - 21.1 32.8 66.8 109.2 138.2 Total foreign loans - proposed 6.6 56.0 74.6 128.2 182.1 207.3 LOCAL LOANS - PROPOSED ELETROBRAS 87.9 97.4 215.9 334.8 437.8 467.7 BDMG - FINANE - 5.8 21.2 36.5 49.2 59.4 BDMG - FINAME - 10.2 24.7 25.0 22.4 17.8 Suppliers - FINAME - 1.9 8.2 19.7 33.9 42.3 FINEP 0.3 1.8 10.1 14.1 16.1 14.1 ELETROBRAS - Nova Ponta & Igarapava - - 6.5 28.4 70.9 123 .1 BNDg-FINAME - Nova Ponte & Igarapava - - 5.8 25.0 60.6 101.2 ELETROBRAS - Other future loans - 21.9 74.1 136.7 193.4 264.9 BNDE-FINAME - Other future loans - 46.5 145.6 264.4 385.0 436.8' Total local loans - proposed 88.2 185.5 512.1 884.6 1,269.3 1,527.3 Total proposed loans 94.8 241.5 586.7 1,012.8 1,451.4 1.734.6 Total loans 1,372.7 1,704,4 2,107.8 2.414.4 2,668.3 2.742.8 - 71 - BRAZIL SOUTH-SOUTHEAST POWER DISTRIBUTION PROJECT ANNUX a T-13 CELESC ActualT and Propod Trms Applicable to Long-term Debt to 1982 Loan Amount Grace Period Amortization Creditor Loan (i ilo yasand Period (rears FORE1GN LOANS - EXIST1NG Date units of rpli- m onthe) and month ) Interest REate ~~O_REIGN LOA ~ ~ ~ ~ cblecureny)Currency t______ _______ ______ ELETIOBRAS (Repass of MDB loan) 12/68 0.4 USS 0-9 11-6 6% BESC 7/75 3.4 1-0 4-6 2X and 2-1/82 over LIBOR Unibanco 4/77 5.0 1-6 4-6 2-3/8X and 2-1/4% over LIBOR LOCAL LOANS - EXIST7NC ELETROBRAS: ECF - 67/68 8/68 13.9 Cr0 1-9 11-0 10% 166/71 9/71 13.7 " 0-10 10-0 10X 358-A/74 12/74 128.7 1-10 10-0 10% 437/76 8/76 260.0 1-6 10-0 102 438/76 8/76 40.0 1-6 10-0 10O 416/76 6/76 21.8 5-0 10-0 12S IRDs 1965/67 17.9 7-0 20-0 8% MME 1967/77 54.0 " 7-0 20-0 82 BNDE 12/73 12.5 0-3 10-0 7.5% BRDE 1973/76 38.6 1-0/2-0 1-0/6-0 6/7% FOREIGN LOANS - PROPOSED IBRD 1978 43.8 US$ 3-0 15-0 8.52 Comercial Banks 1977 10.0 US$ 2-0 8-0 2% over LIBOR LOCAL LOANS - PROPOSED ELETRObRAS - ECF 1978/1982 700.0 Cr$ 2-0 10-0 10% ELETROBRAS - Rural Electrification 1978/1982 224.8 5-0 10-0 12% FINAME 1978/1982 276.8 1-0 6-0 7% T-14 Actual and Forecast Long-Term Debt Statement 1976-1982 (in millions of June 1977 cruzairos) 1976 1977 1978 1979 1980 1981 1982 " sorre re- Affer e FOREIGN LOANS - EXISTING --- current CrS-- ELETROBRAS (Repass of IDB loons) 24.2 37.4 25.8 20.4 14.9 9.0 3.5 - BESC 32.9 39.6 22.0 11.1 0.3 - - - Unibanco 7 _ 74.2 66.0 47.2 28.4 9.6 Total foreign loans - existing 57.1 64.0 122.0 97.5 62.4 37.4 13.1 LOCAL LOANS - EXISTING ELETROBRAS: ECF - 67/68 19.4 32.5 24.1 15.6 7.5 1.0 - - 166/71 14.3 23.9 19.0 14.1 9.6 5.4 1.2 - 358-A/74 153.3 255.2 220.3 189.1 162.8 136.5 110.2 83.9 437/76 101.1 140.0 313.7 288.3 250.2 218.9 187.6 156.3 438/76 9.9 11.9 36.1 32.5 28.9 25.3 21.7 18.1 416/76 8.7 10.5 26.3 26.3 26.3 26.3 24.4 22.5 IRDs 111.7 178.5 127.9 97.6 92.5 87.4 82.3 77.2 Others 19.4 28.9 10.0 5.8 3.5 1.7 0.9 - MME - 12.5 17.3 17.3 17.3 17.3 17.3 17.3 BNDE 21.7 33.8 28.7 23.6 18.5 13.4 8.3 3.2 BRDE 27.0 33.0 37.2 31.4 24.3 18.2 12.5 6.8 Others 0.9 1.9 0.3 0.1 0.1 0.1 Total local loans existing 487.4 763.6 860.9 741.7 641.5 551.5 466.4 385.3 Total existing loans 544.5 826.6 982.9 839,2 703.9 588.9 479.5 385.3 FOREIGN LOANS - PROPOSED IBRD - - - 19,9 180.6 384.5 479.7 466.3 Commercial Banks - _ 143.5 143.5 125.6 107.7 89.8 71.9 Total foreign loans proposed - - 143.5 163.4 .306.2 492.2 569.5 538.2 LOCAL LOANS - PROPOSED ELETROBRAS - ECP - - 125.9 363.3 482.0 595.8 827.3 929.5 - Rural Electrification - - - 35.7 76.7 123.0 173.9 224.8 FINA lE - - - 60.2 110.4 138.4 158.5 182.6 Total local lOaNs - proposed - - 125.9 459.2 669.1 857.2 1,159.7 1.336.9 Total proposed loans - _ 269.4 622.6 975.3 1,349.4 1,729.2 1,875.1 Total loans 544,5 826.6 1,252.3 1,461.8 1,679.2 1,938.3 2,208.7 2,260.4 - 72 - BRAZIL SOUTH-SOUTHEAST POWER DISTRIBUTION PROJECT ANNEX B T-15 CELESC Forecast Long-Term Debt Disbursement Statement 1977-1982 (in millions of June 1977 cruzeiros) 1977 1978 1979 1980 1981 1982 FOREIGN LOANS *- EXISTING Unibanco 74.2 - - - - - LOCAL LOANS - EXISTING ELETROBRAS: ECF - 437776 173.7 17.4 - - _ _ 438/76 24.2 - - - _ - 416/76 15.8 - - - - - BRDE 9.4 MME 4.8 - - - - - Total local loans - existing 227.9 17.4 - Total existiLng loans 302.1 17.4 FOREIGN LOANS -- PROPOSED IBRD - 19.9 160.7 203.9 112.4 21.1 Comercial Banks 143.5 - - - TotasL foreign loans - proposed 143.5 19.9 160.7 203.9 112.4 21.1 LOCAL LOANS - PROPOSED ELETRObRAS - ECF 125.9 237.4 118.7 133.8 251.5 122.2 - Rural Electrification - 35.7 41.0 46.3 50.9 50.9 INALtE - 60.2 60.2 48.1 48.1 60.2 Total local loans - proposed 125.9 333.3 219.9 228.2 350.5 233.3 Total proposed loans 269.4 353.2 380.6 432.1 462.9 254.4 Total loans 571.5 370.6 380.6 432.1 462.9 254.4 T-16 Forecast Long-Term Debt Amortization Statement 1977-1982 (in millions of June 1977 cruzeiros) 1977 1978 1979 1980 1981 1982 FOREIGN LOANS - EXISTING ELETROBRAS (Repass of IDB Loans) 5.3 5.4 5.5 5.9 5.5 3.5 DESC 10.9 10.9 10.8 0.3 - - Unibanco - 8.2 18.8 18.8 18.8 9.6 Total foreign loas - existing 16.2 24.5 35.1 25.0 24.3 13.1 LOCAL LOANS - EXISTING ELETROBRAS: ECF - 67/68 8.4 8.5 8.1 6.5 1.0 - 166/71 4.9 4.9 4.5 4.2 4.2 1.2 358-A/74 34.9 31.2 26.3 26.3 26,3 26.3 437/76 - 42.8 38.1 31.3 31.3 31.3 438/76 - 3.6 3.6 3.6 3.6 3.6 416/76 - - - - 1.9 1.9 IDs 50.6 30.3 5.1 5.1 5.1 5.1 Others 18.9 4.2 2.3 1.8 0.8 0.9 BNDE 5.1 5.1 5.1 5.1 5.1 5.1 BRDE 5.2 5.8 7.1 6.1 5.7 5.7 Others 1.6 0.2 - - 0.1 - Total local loans - existing 129.6 136.6 100.2 90.0 85.1 81.1 Total existing loans 145.8 161.1 135.3 115.0 109.4 94.2 To cash flow 95.2 130.8 To capital a/ 50.6 30.3 FOREIGN LOANS *.- PROPOSED I9RO - - - - 17.2 34.5 Commercial Banks - - 17.9 17.9 17.9 17.9 Total foreign loans - proposed - - 17.9 17.9 35 1 52.4 LOCAL LOANS - IROPOSED ELETROBRAS - ECF - - - 20.0 20.0 20.0 Rural Electrification - FINAME - - 10.0 20.1 28.0 36.1 Total local loans - proposed - - 10.0 40.1 48.0 56.1 Total proposed loans - - 27.9 58.0 83.1 108.5 Total loans 145.8 161.1 163.2 173.0 192.5 202.7 To cash flow 95.2 130.8 al CELESC will capitalize these mounts; therefore, they were omitted from the Sources and Applications of Funds Statement. - 73 - BRAZIL SOUTH-SOUTHEAST POWER DISTRIBUTION PROJECT ANNEX B T-17 CELESC Forecast Interest Char es 19771982 (in millions of June 977 cruzeiros) 1977 1978 1979 1980 1981 1982 FOREIGN LOANS - EXISTING ELETROBRAS (Repass of IDB loans) 1.9 1.4 1.1 0.7 0.4 0.1 BESC 3.1 1.7 0.6 - - - Unibanco 3.7 7.0 5.7 3.8 1.9 0.5 Total foreign loans - existing 8.7 10.1 7.4 4.5 2.3 0.6 LOCAL LOANS - EXISTING ELETROBRAS: ECF - 67/68 2.8 2.0 1.2 0.4 - - 16b/71 2.1 1.7 1.2 0.8 0.3 - 358-A/74 23.8 20.5 17.6 15.0 12.3 9.7 437/76 22.7 30.1 26.9 23.5 20.3 17.2 438/76 2.4 3.4 3.1 2.7 2.4 2.0 416/76 2.2 3.2 3.2 3.2 3.0 2.8 IRDs 12.3 9.0 7.6 7.2 6.8 6.4 Others 1.9 0.8 0.5 0.3 0.1 - MKE 1.2 1.7 1.7 1.7 1.7 1.7 BNDE 2.3 2.0 1.6 1.2 0.8 0.4 BRDE 2.3 2.2. 1.8 1.4 1.0 0.6 Others 0.2 - - --- Total local loans - existing 76.2 76.6 66.4 57.4 48.7 40.8 Total existing loans 84.9 86.7 73.8 61.9 51.0 41.4 To cash flow 72.6 77.7 66.2 54.7 44.2 35.0 To capital a/- 12.3 9.0 7.6 7.2 6.8 6.4 FOREIGN LOANS - PROPOSED IBRD - 0.8 8.5 24.0 36.7 40.2 Commercial Banks 5.9 14.8 14.4 12.5 10.7 8.8 Total foreign loans - proposed 5.9 15.6 22.9 36.5 47.4 49.0 LOCAL LOANS - PROPOSED ELETROBRAS - ECF 0.2 12.0 18.9 43.9 58.8 74.7 ELETROBRAS - Rural Electtification - 2.2 6.7 12.0 17.8 23.9 FINAME - 2.6 7.7 11.3 13.6 15.6 Total local loans - proposed 0.2 16.8 33.3 67.2 90.2 114.2 Total proposed loans 6.1 32.4 56.2 103.7 137.6 163.2 Total loans 91.0 119.1 130.0 165.6 188.6 204.6 To cash flow 78.7 110.1 122.4 158.4 181.8 198.2 a/ CELESC will capitalize these amounts; therefore, they were omitted from the Sources and Applications of Funds Statement. -74. BRAZIL SOUTH-SOUTHEAST POWER DISTRIUTION PROJECr ANNEX 3 T-18 ESCELSA Actual *nd Proposed Tsr,n Applicabl. to Loae-Temr Debt co 1982 Lo.n AmOUDt (in nillion mito. of d -o/ ..--triastio applicable (ysars nd Period (years Creditor Loan Date current) Currency eanthe) And noths) Intereat tate FOReIGN LOANS - EXISTING USAID - 512-L-062 1966 12.3 USS 8-O 13-0 6.5% CITIRWI - R35-63 1976 3.0 US$ 2-0 4-0 L7091Q 21 CtTI8AN - 431 1976 2.0 US$ 2-0 4-0 LIBOR + 2.125S Others 1966-1976 1.8 u7S 3-0 to 4-0 12-0 to 19-0 52 to 7? LOCAL LOANS - EXSTING AM0RP 1 ad 2 1967 26 uSS 1-0 25.0 1i2 ELETRO8A3S YC8 -69-A/69 1969 20.2 Cr9 - 10-0 112 -82169 1969 37.2 CrS 4-0 lI-0 112 -83169 1969 103.5 Cr9 4-0 17-C 11l -99/69 1969 12.0 Cr9 - 10-0 IlS -83-A/70 1970 47.0 Cr9 - 17-0 U2 -82-D/72 1972 17.5 Cr9 2-0 10-0 112 -83-D/72 1972 58.0 CrS 2-0 16-0 112 -93-0(73 1973 56.1 Cr9 1-0 16-0 112 -202-A/72 1972 31.5 Cr9 11-0 lit -350.74 1974 14.8 Cr" - 20-0 82 -335-A/75 1975 608.1 CrS 1-0 11-0 122 Othere 1969-1975 35.8 Cr0 1-0/2-0 10-0/20-o 62 - 112 Caine toCoel-. Federal ED ' 1975 18.1 Cr9 2-0 7-0 8: CQntro Oparativo 1975 22.4 Cr9 2-0 7-0 82 BANDtS 1975 17.0 CrS 2-0 6-0 7.52 F7NAMe Speciel 1975 59.2 Cr9 2-0 8-0 6.51 Lonceg-t 1975 8.2 Cr9 2-0 7-0 81 FOREIGN LOANS - PROPOSED 1i89D 1978 28.1 USS 3-0 12-0 8.52 LOCAL LOANS - PROPOSED ILOTROORAS 1978-1982 1,057.2 Cr9 2-0 10-0 10? T-19 *a4 md PoeetIa?o btSae,at 976-1962 (in ellloan of Jane 19t775 c tro 1476roc) 1976 (including 1976 1976 rAralaution1 1.977 1978 1979 1980 V19 1982 702IG LOANS - EXISTING USA0 D 512-L-062 138.2 138.2 159.9 151.1 142.9 134.3 125.1 115.6 Citibank RES-63 37.0 37.0 44.5 32.6 20.7 8.8 - - 4131 - - 22.1 29.7 23.8 17.9 12.0 6.0 Other. 2.2 2.2 9.4 7.1 5.4 3.7 3.1 2.6 Total foreign loan _ eaiting 177.4 177.4 234.9 220.5 192.8 164.7 140.2 124.2 LOCAL LOANS - U1STING AND0RP I and 2 21.1 27.6 31.6 30.1 28.4. 26.7 . 25.1 . 23.5 EQC 69-A169 18.4 25.2 20.1 9.9 - - - - 82/69 59.9 77.9 78.0 62.2 46.4 32.3 19.6 6.6 83/69 .181.2 235.8 252.1 223.9 198.6 176.6 157.4 139.4 99/69 11.2 135.3 12.3 6.1 - - - - 83-A/70 76.4 99.4 108.5 97.4 96.4 75.3 64.2 53.0 82-0/72 20.8 27.2 27.3 21.9 17.0 12.2 7.3 2.3 83-D/73 68.8 89.5 97.4 87.2 77.0 66.8 56.5 44.6 83-D(72 81.9 106.6 116.3 104.4 92.5 80.6 68,7 58.5 202-A/72 35.5 46.3 46.0 36.3 27.8 19.2 10.7 2.2 350-74 16.5 21.5 24.3 22.7 21.2 19.6 18.0 16.4 335-A/75 321.0 419.6 731.0 742.1 675.0 601.3 528.7 455.6 Others 39.0 45.8 45.2 36.9 29.9 23.5 17.3 11.0 Gaiea IOonomica Federal aED 18.1 23.5 27.7 25.1 22.1 18.6 14.7 ID.2 Centro Operativo 18.2 25.7 41.4 33.8 26.2 10.6 11.1 3.5 BAND5S 20.0 26.0 32.7 26.9 18.3 10.0 7.2 4.4 Speci-l 25.9 33.7 75.4 74.9 62.2 48.7 35.2 21.7 3.009-tare 5.1 6.6 12.2 11.4 9.7 8.1 6.4 4.7 Other. 9.5 12.4 18.5 18.5 18.5 18.5 18.5 18.5 Total locel 1oan - existing 1.048.5 1.364.6 1.798.0 1.677.4 1.-57,2 1.257.6 1,066.6 876.4 Total eid*t4n2 l 1,225.9 2.032.9 L898..1 1.650.0 1,422.3 1,206.8 T . FOREIGN LOANS - PROPOSED I.RD _- - 16.8 118.8 245.8 304.2 299.6 LOCAL LOANS - PROPOSED ELETRO3RAS - - - 165.9 415.5 648.8 846.0 951.3 Total propo-ad bane - - - 102.7 534.3 894.6 1,150.2 1,250.9 Tocal loans 1,225.9 1,542.0 2,032.9 2,080.8 2,184.3 2,316.9 2,357.0 2,251.5 75 BRAZIL SOUTH-SOUThEAST POWER DISTRIBUTION PROJECT ANNEX 3 T-20 ESCELSA Forec-st Lon,-Term Debt Disbursement Statements 1977-1982 (in millions of June 1977 cruzxeros) YEAR 1977 1978 1979 1980 1981 1982 FOREIGN LOANS - EXISTING Citibank 4131 22.1 7.6 Others 8.2 Total foreign loans-existing 30.3 7.6 LOCI LOANS - EXISTING EC7 335-A/75 245.7 90.3 Caixa.Economica Pederal-Cantro Operativo 11.1 - BANDES 2.0 0.5 PThAME - Special 35.1 5.4 Long-tern 4.2 - Othets 3.6 - Total local loans-existing 301.7 96.2 Total existing loans 332.0 103.8 FOREIGN LOANS - PROPOSED I3RD - 16.8 102.0 127.0 69.5 17.6 LOCaL LOANS - PROPOSED ELETEOBRAS _ j59 249.5 235.2 233.3 17131 Total proposed loans - 182.7 351.5 362.2 302.8 190.9 total loans 332.0 286.5 351.5 362.2 302.8 190.9 T-21 Forecast Long-Tern Debt Amortization Statements 1977-1982 (i mIllions of June 1977 cruzeiros) 1971 1978 1979 1980 1981 1982 FOREIGN LOANS - EXISTING T3SAD 512-L-062 7.3 7.8 8.2 8.7 9.1 9.5 Citibank RES-63 - 11.9 11.9 11.9 8.8 - Citibank 4131 - - 5.9 5.9 5.9 6.0 Otbars 1.4 2.3 1.7 1.7 0.6 0.5 Total foraigp loans - .sutinS 8.7 22.0 27.7 28.2 24.4 1 LOCAL LOANS - EXISTIIG .A3ORP 1 and 2 1.6 1.6 1.7 1.7 1.6 1.6 iCy 69-AU69 10.2 10.2 9.9 - - - 82/69 3.5.8 15.8 15.8 13.6 13.2 13.0 83169 31.5 28.4 25.1 22.0 19.2 18.0 99/69 6.1 6.1 6.1 - - - 68}s/70 11.1 11.1 11.1 11.1 11.1 1 1. I 82-D/72 5.4 5.4 4.9 4.8 4.8 4.8 83-Dt72 11.9 11.9 11.9 11.9 11.9 11.9 83-E/73 10.2 10.2 10.2 10.2 10.2 10.2 202-A/72 9.7 9.6 8.5 8.5 8.5 8.5 350-74 1.6 1.6 1.6 1.6 1.6 1.6 335-A/75 18.3 73.1 73.1 73.1 73.1 73.1 Others 9.9 8.7 6.7 6.5 6.3 6.3 Cai-- Economic. Federal RD$s 0.6 2.5 3.0 3.5 4.0 4.5 Cantro oparatiro 0.6 7.6 7.6 7.6 7.6 7.6 BANDES 0.6 6.3 8.7 8.3 2.8 2.8 Y73BE Special 0.2 5.9 12.8 13.5 13.5 13.5 Long-ta - 0.7 1.7 1.7 1.7 1.7 Total local loan. - i.ting 145.3 216.7 220.4 199.6 195.1 190.2 Total existing loans 154.0 238.7 248.1 227.8 215.5 10T To cash-flow 154.0 124.9 169.6 217.6 215.5 61.4 To capital - 113.8 78.5 10.2 - 144.8 FOREICN LOANS - PROPOSED IBRD - - - - 11.1 22.2 LOCAL LOANS - PROPOSED ELETROSRAS - _ _ 1.8 36.1 68.0 Total propooc. lon. - - - 1.8 41.2 90.2 Total loans 154.0 238.7 248.1 229.6 262.7 296.4 To cash-flow 154.0 124.9 169.6 219.4 262.7 151.6 _ 76 - BRAZIL SOUTH-SOUTHEAST POWER DISTRIBUTION PROJECT ANNEX B T-22 ESCELSA Forecast Interest Charges 1977-1982 (in millions of June 1977 cruzeiros) 1977 1978 1979 1980 1981 1982 FORELGN LOANS - EXISTING GSA1J3 512-L-062 9.0 8.7 8.2 7.7 7.2 6.7 CITI3ANK RES-63 4.7 4.7 3.7 2.5 1.2 - CITI3ANK 4131 1.2 1.2 2.2 1.7 1.3 0.9 Others 0.5 0.6 0.5 0.4 0.3 0.3 Total foreign loans-existing 15.4 15.2 14.6 12.3 10.0 7.9 LOCAL LOANS - EXISTING AMFOIIP 1 and 2 2.6 2.5 2.4 2.2 2.0 1.8 ECF 69-A/69 2.9 1.8 0.6 - - - 82169 10.1 8.4 6.6 4.9 3.5 0.6 83/69 29.7 29.7 29.7 25.0 24.8 23.5 99169 1.8 1.1 0.5 - - - 83-A/70 13.4 12.2 10.9 9.7 8.4 7.1 82-D172 3.5 2.9 2.4 1.8 1.3 0.8 83-D172 14.3 13.1 11.8 10.5 9.1 6.5 83-E/73 12.0 10.9 9.9 8.7 7.6 6.4 202-A/72 6.0 4.9 4.0 3.0 2.0 0.7 350-74 2.2 2.0 1.9 1.8 1.7 1.7 335-A/75 58.2 69.5 61.5 53.5 45.6 38.2 Others 6.3 5.4 4.3 3.8 2.9 1.4 Caixa Economica Federal RDs 1.7 1.6 1.3 1.1 0.8 0.5 Centro Operativo 3.6 3.4 2.8 2.2 1.6 0.8 BANDES 1.9 1.7 1.2 0.5 0.1 0.1 FINAME Special 4.8 4.5 3.8 2.9 2.2 1.5 Long-term 0.8 0.7 0.7 0.6 0.5 0.4 Others 1.0 0.7 0.7 0.7 0.7 0.7 Total local loans-existing 176.8 177.0 T57.0 132.9 114.8 92.7 Total existing loans 192.2 192.2 171.6 145.2 124.8 100.6 FOREIGN LOANS -PROPOSED IBRD - 0.7 5.8 15.5 23.4 25.7 LOCAL LOAIS - PROPOSED ELET OBRAS - 12.6 29.0 75.2 92.0 127.1 Total proposed loans - 13.3 34.8 90.7 115.4 152.8 Total loans 192.2 205.5 206.4 235.9 240.2 253.4 - 77- IIAZ7L SOUTH-SOUTHEAST POWER DISTRIBWITEON PROJECT ANNEX B T-23 Prolect Performance and Monitoring Indicators ACTUAL Est. FOELECAST 1=i. 1976 1977 1978 1979 1980 1981 1982 CEMIG M. arket Penetration Energy sold vGWh) - Total to users 7629 8943 10385 IZ294 14663 17129 20032 22568 - Industrial 5886 6763 7934 9513 11581 13712 16279 18138 - Residential 903 1039 1187 1315 1453 1599 1753 1915 Average number of customers (0oo) T Total 935 1026 1124 1226 1332 1440 1548 1657 - Residential 787 867 950 1036 1124 1214 1305 1398 -Rural 17 17 19 23 27 32 34 37 Inhabitants/residential customer index 15.9 14.7 13.7 12.8 12.0 11.3 10.7 10.1 Lo. Income customers connections financed by utility - - 10200 10000 10000 - 2. Efficiency Number of employees 7626 8095 8593 9122 9684 10280 10917 11590 Customerjemployee 123 127 131 134 138 140 142 143 Energy sold (Gsh/employee-year) 1.00 1.10 1.21 1.35 1.51 1.67 1.83 1.95 losses (7. of net generation and purchases) 8.8 9.0 9.0 9.0 9.0 9.0 9.0 9.0 3. Financial Indicat.rs ' Annual debt service coverage - 1.8 1.6 1.4 1.5 1.6 1.2 1.2 1.4 Self-financing ratio (7) b/ (2) 10 a 10 15 7 7 :6 Average revnue-lkWh (Crt) c/ 21.5 27.9 42.2 41.8 42.7 43.2 40.9 4.3 long-term debt/total fixed assets (7) 54 56 54 57 59 59 59 56 Receivables (in days of billings) 69 60 55 55 55 55 55 55 Depreciation as X of average gross fixed assets 3 3 3 3 3 3 3 3 Accounts payable in months of investment expenditures 1.4 2.0 3.1 1.6 1.6 1.6 1.6 1.6 Average remuneration per employee (CrS thousand/year) E/ 28.0 43.6 62.5 65.2 64.3 63.2 61.8 60.4 CELESC 1. Market Penetration Energy sold .CWh) - Total to users 1396 1777 2113 2513 2949 3444 3988 4580 - Industrial 807 1046 1249 1505 1780 2093 2431 2795 - Residential 255 289 339 395 459 535 623 726 Average number of customers (oo) - Total 333 367 421 470 530 592 661 740 _ Residential 251 278 313 348 388 433 480 534 -Rural 34 38 46 52 61 68 77 87 Inhabitants /residential customer index 13.4 12.4 10.7 10.5 9.7 9.0 8.3 7.7 Lo-er income customers connections financed by utility - - 2000 5000 7000 8000 - - 2. Efficienc- Number of employees 3999 3945 3945 4168 4243 4320 4370 4449 Customer/employee 83 93 107 113 125 137 151 167 Energy sold (GWhl/employee-year) - - 0.54 0.61 0.70 0.80 0.91 1.03 Losses (% of net generation and purchases) 9.2 8.0 7.7 7.9 8.0 8.0 8.0 8.0 3. Financial Indicators Annual debt service coverage a/ 3.1 2.1 1.5 1.4 1.5 1.6 1.7 1.9 Self-financing ratio (7.) b/ 41 17_ 9 10 12 16 22 30 Average revenue/kwh (Crt) c/ 35.3 40.0 64.5 66.5 66.7 66.9 70.1 67.2 Long-term debt/total fixed assets (.) 46 39 48 46 45 44 42 38 Receivables (in days of billings) 56 60 60 60 60 60 60 60 Depreciation as 7. of average gross fixed assets 3 3 3 3 3 3 3 3 Accounts payable (Cr$ millions) d/ 105.1 301.6 197.1 183.0 216.4 257.2 266.1 287.6 Average remuneration per employee (Cr$ thous-nd/year) c/ 28.8 46.8 82.2 84.7 87.2 89.8 92.6 95.5 ESCELSA 1. Market Penetration Energy sold (GWh) - Total to users 832 958 1432 1916 2537 3019 4051 4249 - Industrial 559 642 1076 1506 2064 2474 3175 3278 - Residential 124 147 158 180 205 233 266 302 Average number of customers (ouo) - Tot-l 137 160 174 192 212 235 259 287 - Residential 116 136 146 161 179 195 214 236 - Rural 0.9 1.9 2.4 2.9 3.7 4.6 5.8 7.2 Inhabitants/residential customer index 14.9 12.9 12.1 11.2 10.3 9.5 8.8 8.1 Lo. income customers connections financed by utility n.a. 2000 5000 2700 1300 3000 3000 2. Efficiency Number of employees 1558 1695 1847 1976 2114 2262 2420 2589 Customer/employee 88 94 94 97 100 104 107 111 Energy sold (GWh/employee-year) 0.53 0.57 0.78 0.97 1.20 1.33 1.67 1.64 Losses (7. of net generation and purchases) 9.4 7.0 9.1 9.1 9.1 8.7 8.5 8.5 3. Financial Indicators e/ Annual debt service coverage a/ 0.8 1.0 1.3 1.5 1.5 1.5 1.1 1.5 Self-financing ratio (7.) b/ (7) (16) 14 28 27 29 36 31 Average revenue/kwh (CrO) cl 28.2 35.7 49.9 46.7 41.6 43.1 36.1 40.0 Long-term debt/total fixed assets (7.) 67 68 75 67 61 57 '2 47 Receivables (in days of billings) 50 42 34 34 34 34 34 34 Depreciation as 7. of average gross fixed assets 3 3 3 3 3 3 3 3 Accounts payable as % of investment expenditures 3.0 6.1 7.5 8.3 8.3 8.3 8.3 8.3 Average resunration per employee (Cr8 thousand/year) cl 19.2 37.2 50.4 52.7 55.2 57.8 60.5 64.9 a/ Times that net debt service is covered by gross internal cash generation. b/ Percent annual contribution to investment from net Internal resources excluding sector capital contributions. cl In current cruzecros for 1975 and 1976 and in constant June 1977 cruzeiros for 1977-82. d/ for basis of computations see note *a/ on Table 5-2. e/ See para. 5.14 78- BRAZIL SOBUT-SOBrOEAST POWER DISTRIBUTION4 V%R8ZJ~ T-24 Cost -nd Benfit Stream 1ood In tht eomnt of rho Otto of Roto.teSS j 1(21 ot3½$) lee 1 2 3 4 5 6 7 i t, 11 12 13-9Ž 1978 7979 19n 2321 I98 798ie3 1984 1983 1'Ž8~ 1087 -58 >3 Ž026 /lvono ot 0etOraed in Chapuor 4, otte doloti- of ote-. CR2413: 3/ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Those rots hove her ostieat,do 1'-3 o-rot-rt Prog-ti:-' the 10010 of the pr-jenod rea to- foroigo OOm~~~~~~~~~~~~~~~~~~~D,726 149,214 129,525 390384 - - - -- rsses is operti-e Bodmtoeot Iperotlon 8 Slototessoro Goats:3/ ~~~~~~~~324,574 232,440 152,22 7 259,257 - ----the itre-se i sole oss-oar to mote-nob 1,468 4,396 6,896 7, 731 13,c6o I6,42~5 ]9,177 re,83s 23,685 <>386 24,88 sF~ 4,388 d-e to the 1978-1981 lor-tnent 858 2,554 3,738 1,782 7,648 Lo,o088 11,736 17 ,883' 14,6219 17.371 15,371 15,3721rgrm 353 1,C56 i'G (2 2,11 3,3QU 4,270 1,016 5,574 8,261 Di 6,6iD 6,6io por-h-ed -- y1,159 1,397 7,99,] 101,333 12,386 ,7 ,x 5,a "C,1 , " (9n49 690496 Fo71h,'t~Iiit- h rot of porch-sed -etery rfo 711181, tho enegy .,d dnooad h-rge- oppli- /t-00010l to its --c for 1977(. T~hIs ant 19,8-7321 tevostoost ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 0000~~~~~. -61 tory to the futur d-e to, forego 5,169 18,109 28,573 7 ,2752 - oiotl- iost tOe load ortor of the lo-1 36,700 22",804 30,289 14,052 - - --- prho-r orE/o the dlofeoo- tn- r poyroll - 735 2,163 I,250 6,,~% 3,851 mL, 8o5 11,274 17,8B63 19,338 2C16-'C,64,68 20,483 ooterlolm - ~~~ ~~~~ ~~~~ ~~~~ ~~~~~~~~83 27) 563 303 1,285 1,705 2,374 - 3'6 660 "2"~ 1,7715 2,725 S/ir Choyntr 3 for tho foront -okot oiooruonofooeo&oeoo - ii~~~~~~~~~~~~~~~~~~~~18 370 75C 1,199 1,708 2,2(6 2,756~ 3,161 3.55 362?2 3,622 3,82~2 ,hroogh 1q382; r 10% p.o. loo-sc t p -o-o,oegy. - ,155 7,204 786,2'47 26.192 14t.i52 53. 267 64, >62 76,315 31,33- 3 .5,114 85144 65,i44 toto~l 0010 Boo loo ---sed otter1980. ES09ELSA: It h-o hor tasn-d thot the ooto 1978-1791l I-vot-rt Pyotrs...to th oitlbtero to. g ry eroy e fo-ego 3,723 13.250 14,955 ,5 93 t -- -- Oo pres-t lore of o-1es ama thot loosib 27,1310 22,732 19,803 20,852 - - - - -----the o (r-eoet-t ,oill re-r their Oor-tlot , -litnon ots,-' iotosrfl6ty 10ft their payroll - 380 925 2,248 2,455 4,053 5,349 6,452 7,1968 3,034 8.333 8,359 8,3193 uolol aoteoi,]e - uj~ ~~~~~ ~~~~~~ ~~~~~~ ~~~~~~ ~~~~8 619) 3,828 2,724 2,38 3,48 14613 2 5,300 5,781l 6,c64 8,o¼4 6,o)44 siorolloorovo ro8rporo - ~~~ ~~~~ ~~~~ ~~~ ~~~~~59 141 333 14' 613 Boo 968 1,403 i-.105 1,233 i, 258 1,254 fl A-o-,g ons-r i 00ff of U830.035/ p-h-atd energcy 7 - ,326 4,156 lou,611 19,841 19,167 25,272 76l,243 V.,527 37,661 37~, 373 39,373 39,773 UL71 esti-nnd to Or tl0 roolt-or r-rgr of One 1977 tOrlffs to tho pvb110, TOT1ALn,te ol tom o- eeotolo,ityoos.bos 1978-198] Io-e-ort Prors,3 a hsono nl calIcbsht b-r foreign 115,623 100,354 1 15,123 52,529 -- sd for the r--ooin ro-Oof ,s the 1ool 388,392 308,991 301,882 37826,3-61 -- oale to other utilities mp ho ondo 10 oporLlot 4 Slslt-n-er Costs: olh for,te- to FLETROSUL, the -ori-o, toll poyr-11 - 2.43 1,482 65,740 17~,14f 26,906 64,777 1,1 4.6 Bo64 1 5 5305 2,75 379ompo. moteossis - i~~~~~~ ~ ~~~~~~ ~~~~~~~~~~~~,i85 -j4- 6,222 8 c8 12,079 15,639 16,454 0o,545 2_,012 24.1-40 24,142 21,11o oOeoeltooro-coe.rneorre - ~~~~ ~~~~~~ ~~~~530 1,569 2,761 4,29 5)p ,621 7,346, 3,278 9, 768 10,9801 1, 492. 1i,437~ 11,63010 A-omi,ogonr-rag tariff of US09.248/ p-nh ...ed enerY- 4,6,4n 15,777 3557 52, 586 72,307 1 M,111l 135,438 167.031 1~55.735 194,2113 194,1)'3 138,313 kWh, -eitiood to to thr reotittg av-rge of t.o 1927 ta-iffa to the poblin, BENEFITS PIns tho sole t.o oo olt, lofty -sss,sptie.. 0 1 1 3 444 1 13-32 1/ A-nortg .m storage tariff of U130.028/ Yost 1977" 14783 1773 1981 1951 1 4L2 1983' I'84 17395 1366 1087 154 1(; 13)90-2001; kWh, estinatd to be tl,ef rootiog 705123 arorogs of tlr 1~~~~~~~~~~~~~~~~~~~~~~~~--972 Iotf to the pblir, TPolo eerrgy coin 0GWh4 13,662 23,066 05 ,908 18,483 21,i86 23,781 05,230J 27,546 52, 182 33,152 78 ,6n4 54,0~75 44,302 Io-em- in - ors..sod oe197(80)- 2,3 4 3"C 7s 7p6 io,143 10,438 1ii547 16 (3 1' 1437 22 ,542 25P781 29,537- 33,554 t:roosoinonoroy oold ove po.evoo poor (341, P 743 2,622 251 297 1,995 2, 11 2 05> t (31 17,~ 3,326; 3,661 4,027 o f poorly I-orroo Bo t, 17)78-81 P-ogr- 3/ ' 2o 8360 b' 100 100 60LI ~ Ioorroe 10 moire due to 1978-81 progsa. 90GW4), 5614 ,5997 322C 4,Bco 6,1t0 9,170 10 oPI 13,120 1i l8Q ~5,200 L5,,l 15,2C2 3nn,rfrom 1978-1981 Isoot etPoro(13411$)-' la 1,715 62,36' 1020 007 185,718 2421 318 3'~,124 311i hoU 42,7,1O 13 337 rp%9 53. q28 ~Fo& 52,8 TbtoT mo-gy e-ld (08dh4/ 2,113 2,313 2,343 8 788 3, 1968 4,58' 5,08 5s54 6 Inn 8 72r~ ,31,6 0114 3, I25 3,816 on--o Or. 00060 mold 0001977 (09w0) - 900 863 1,031 1,825 2,467 2,925 3,422 s,'8z 4 5)3 5, 363 6,ooi 8,812 7,703 isnoreOs .docory -od ovrpr-oos poor (18W0) - 41 438 4,) 544 522 658 711 554 611 67Ž 738 511 8)3 ...f pocl inore... d- ,io 197-381 p-ogen- IC, 40 G S x 1 o -,oeeinose Pro Ote 7978-81 progra (G9lh)V - 87 8s 61 ,8 3 4 c 28 ,7 ,'72 3,P27 Feveonro fro 1378-1981 1oreetmot Progom (10>1088/ - 4,02 13,5 30,57 5,0 84701 Ž0 n6 1P9,520 1% 236~ ''9? ~5< 15' 05n, 157, Ž50 157,058 OSCEIBA: Iotol roergy sold (343)3/ 31 ,30 2,626 3 207 418 t6 4>06 4,5r7 5 931 5. ~3(6 o 1,5i ~ 7, 75 3F38 9,445 toromeoo..r. sol..d orr1977 (781) 478 7,135 1,6)6 1,881 2,1913 3,356 3,641~ 4.73 4,360j 5,813 6,38:L) 7,09~5 7,954 booeon --oogy sold orprei-o year (GWO) - 48 637 502. 1,555 924 144 1 4314 5913 517 345 710 781 653 , f yooly dororoho to 1978-81 progsa-- 20 nO o 6r) o ice o 9?01~ 6; ) 20 - - loooas 1..solo dos to 1578-81 prog- - ( )/:122 -978 961i i i4,t 1,581 2,065 ~,4ql 6,914 9,121 3,249 3,163 3,243 Foe efrom 1378-81 T--ot-t.o Progr- (10 uS$)t - - 3,5'41 9,785 24,421 31,320 144,368 57,820 63,748 7~),432 36,836, 71, 814 Q0,80.4 91.824 0TOTAL for,r Io 1978-61 lovet-et Progra )103JS$) - - 26,348 85,67' 157,0t5 243),633 964,343 479,700 3'60,530 7s,t 43.169 '76,7,43 77',7-.746 776,74) - 79- ANNEX B C-X COMIG ORGANIZTIION CHART ..C.IISTG TORET TOUEARG-ERMLPANIG COTNAII UI L4NFY~~~~~~~~~~ 1 .- ~~ I I .-I LH t I L a t LX t | DIGEC.OR | 15 ffi 1 <~~~~r - i OIETEIEORION IISTRINIRITG . INANCIAL r INANCIAL OTOTUIZATION INOASTRIAL GENERATION GENERATION GETITNAL SYSTE- GRIEFS ANPAN NERO OTRIZANRE NEETURCES PROCUREMENT CONREOLE ODNIRISTRAGON AUG AEMIGIS- TIELARIOGS SNAINENEIREC TRANSEESGION GONEPRUERION MAINTRNANCS SYSRIUN OPRRATIORI. % g 9 | X °~~~~~~ ARS o 4.~ ~ A -C SL tE~~~~~~Z - 81 - ANNEX B C-3 ESCELSA ORGANIZATION CHART | GENERAL l ASSEMBLY l BOARD OF FISCAL DIRECTORS COUNCIL PRESIDENCY DIRECTOR ENGINEERING AND ECONOMIC- C ADMINISTRATION OF CONSTRUCTION OPERATIONS FINANCIAL | AND SUPPLIES DISTRIBUTION DIRECTOR IRECTOR DIRECTOR DIRECTOR COMMERCIAL SYTM AC NUA DEPARTMENT ENGINEEM PROGRAMMING RESOURCES DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT OPERATIONS CONSTRUCTION OPERATIONS ACCOUNTING MATERIALS DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT ENGINEERING DESIGNS STUDIES ASSETS GENERALE DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DSERVICESN REVENUES DEPARTMENT FINANCIAL DEPARTMENT VWorld Bank - 18291 555! 000005 PEDRO 5000000 08 40 44' 42' 40' ~~~~~~~~~~~~~~~~~~~~~IBRD 13240 TO~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~' I E8RJARY 1978 TODEEEIAOOOD ~~~~~~~~~~~~~~~~~~~~~~BRAZIL SOUTH - SOUTHEAST VAT STEVET SEA UZIA ~ ~ ~ ~ ~ ~ ~ ~ / POWER DISTRIBUTION PROJECT 110 150 VE ~~~~~~~~~~~~~~~~~~~~State of Minas Gerais TO 050*00 ~~~T. BRASILIA 1 B A H IA 0000 VESTS TAO.o00 D~~~~~~~~~ISTRICT, 2 . ANALTSA p0000000000 0 0 10 15~~~~~~~~~~~~~~~~~~~~TLM E G 0 S~~~~~~~~~~~{ FROM 00000504 1.070 APA -2 MIN AS~~~~~ PINE R 0 0 4 S PARVOAK 1000 FlOOR RU IVOMAGNES VO~~~~RZEA DA PALMA FRC .CH ..A T. FOAAL A G GMDTVO 04 E180 RPOA I C 1 DCURAC ES MARIAS~~~~~~~~~~~~~~~~~~~~~~~~~~~ESLNDR MVCRE.A - 040*8.01 -0~~~~~~~~~~~~~~~ 05~~~~~O ODOMOSTO I~~~~~~~~~~~~ . ........ FURDVS P0000 100000 054WMV VRO~~~~ TOOO 7 Rooo orrparod OpJAMPRUC 014TOS DE MINAS ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ (SPIP fu, wo oftoA'oe/ o CPRM ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~*/ ieOO51SO fteSaeso 2S~.. S NT 2 heooOtoODVoratOODd.20 C s M40~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ooee ooo n55*Sa IALTO ALADARES~ ~ ~~~~dO00 ot/ o 80prSo SE ~~~~~~GRAND ~ ~ ~ ~ ~ K Wrl aE oOisatl,ts o E S 3CT/ADoooo 0 So oo ouoOo A PARA0C0 DE0 MANTO'O SETE eoSEPoLArsOAo,eo OoTR00O~' 0 CRANOLA 7 0'OM oDotaPAe at NOVooI'ao-T AGO 0 MASCARENHAS~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~00TR4NOT R -M----- 138 kA`0 PIT PAR800 "rN h `' -d"ff - - 34.5kv 00 0.0000S6 E 1 th- -O- PETROBRAS ~ -20- -~~~~~~~~~ -d MI,,~~~~_ ¾/ LIVEIR E7 OV I0. 0 Planned I~~~~~~~~~~~~~CAP 000d _k 0di.Ei'.. -. ' State Boundaries ~ ~ ALNor LI T.4 TiDAN T/C ACRAN I0 Y 04' - 290 395 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~APRO.p-- f- IShooo b osdosy- 00' 48' - 48' 44' 43" 0,>~~~~~~~~~' ARS~FIV5F IBRD 13238 B::T 53 52' 51' 500 AS9 TO CURITIBA FEBRUARYIT :';:3:''-'\ P A R A N CANOINHAS 9 MA FROM S OSOR10 7R JO LLE RIO NEGRINHO 3: '::E'''' - 5 US. BRACINHO FURANCUISCO JARAGUA DO SUL US PALMEIRAS CEDROS0 :<.::: ::t .. SAO M GUEL MODELO W t X - CACADOR * o_BLUMENAU PICgRAS PAXINZAL ! A tMFNAU - 55' CHAPCd c t t JGARCIA CAM ToREA S\- A RA/ I CHAPECO W'1ERACONORIA00D 5U ARTEXRU3U V Z 4 \ i A¢-2DE CRISTOVK BRAZIL S W A US CAVE RAS \ I w~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~IH RorIIBe f;s tsffexeusrvelaSw POWERADISTRIBUTIONIPROJECTST,,A PTCL OAR 0~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ bogmd ,^YO ".h,sm.p State of Santa Catarina tM v T9| BRASO DO NORTE t R 0 Womd Bynk,, add It ffilhae-,Qy Z -,,--C@ S-Cb-dA ..|t _ G RAVATA LI PN! (ARI~~~~~~~~~~~~~FW,6,4& -SfA- V L~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ LA ~ - RIOD BRAZIL V A DEBRI V T O ; ~ C L A W; U 4~~~~~~~~~~~~~~~~~~~ - :S;%SIDERdPOLIS TUAZA LfUN ( SytD U T H o lo~~~~0 1 20 30 AO0 5D \J ;AGUARUN^ , SjO U T H - I L ' -OUT-- OUHEAT &28 KILOMETERB PROJECT EXISTING BRAZIL I T-S-1nSS,on LL,es CR IU /M RODEMA, FOnd apA ad a aP0P -d RA MBTB A M E R I3 kv A -- AR1A - k TO , ) A M E; R I C A /1; . CUR ~T- 1.-IL * * SbTal FARROUPILCIAAAGAfF TUPI 69 /kv SEA' 1 5 TERARA~~~~~~~~~~~~~~~~~~~~~~~~~~~~Sbt.insAARNU 0? N 3s>~~~ A TOAGALLT A TO L'F'-TO $.FAOCIOC AE2' 5A '-- ~~~~~- ~~~~' _________________________________ 230k2 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~- CAFAI Mi t FSA / ' |AflAN/UTFH- AT f¾ oTH I s-i *~~51 5OCEAN MUCURICI NSOUTH / ~~~~~~~~~~" ~~~~~AMAERICA2 ~~~ N M~~~~~~ONTANFA 'x BRAZIL > r 'N:. AN I ,%t:0 PINHEIRCS CAMPO URANDE UE 7 . NA'I-: PEDRO CANA PAUL Mi AETNA PEDRO CANARIO "v' BOA MflTESPERANCA i - /:S ;'f | t : ; 0 n ;/ I Itr \ @ t A I\ I /~~~~~~~~~~~~~~~~~~~~~~?O BAM 4dM R0R / I tEl RRS . vIdaE M 1E -v : = E . - , BARRA DE 5AB FRANCISCOESPERANA MATEUS M $ R @_GO VAA lEES V I FROP^_ ~ ~~~~ I- -rcRp&t of ouc E&,OER FURNAS --/. G Dcv~~~~~~~~~~~~~~~~~~~~~CR/ A,AAE N FROM ARDN O O ' F~ ~ LI '. N AS R\ I T Ot 'vq-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- 111' . AR\O 10~~~~~~~~~~~~~~ G E R 1\ A ---. S / ,/ ) ,~~~~HE UI; IdNA~~~~~~~~~~~~~~~~~~~ 4 LADE 'VII RIA IL BRAZIL MWZ EIRF ''SOUTH - SOUTHEAST POWER DISTRIBUTION PROJECT 1~1DRJ t A/iE- C~~~~It' State' f Es-rt Sata ALEDRE RERAFTTIR RA ANHIT T E \ \ } XARACRU bP RRAUNDER PROJECT CONSTRUCTION EXISTING ("- Ttfrnmisson Lir-es _ >t H E SU ICA >SA -O. -O. 345Rk N 11 I38 ky MARATAIZESse . - , ^0 a 0 Substations IUNA;~~~~~~~~~~ ~~~~~~~~~~~ ~~~~~~~~~~~ Po,+er Plants' zBRZI D 20 30 40 StD 40 Espi ate Boundaries RIO NTEIO4^D E KILrrO.ETER' 9 JANE I R 0 /?fl PE TO CAMEOS - 85 - ANNEX C Page 1 of 2 pages BRAZIL SOUTH-SOUTHEAST DISTRIBUTION PROJECT Selected Documents and Data Available in the Project File A. Selected report and studies on the sector, the Borrower and the Beneficiaries 1. ELETROBRAS' Annual reports 1974 - 1976 2. CEMIG's Annual reports 1974 - 1976 3. ESCELSA's Annual reports 1972-1975 4. CEMIG's Statistical reports 1975 and 1976 5. CELESC's Statistical reports 1973-1976 6. Analise Retrospectiva da Economia Mineira en 1976 e suas Perspectivas CEMIG - September 1977 7. SubestaqZes e Usinas - CEMIG - December 1976 8. Appraisal of ELETROSUL Transmission Project - November 1976 (Report No. 1265b-BR) 9. Appraisal of COPEL Distribution Project - April 1976 (Report No. 1028b-BR) 10. Appraisal of Northeast Power Distribution Project - ELETROBRAS April 1976 (Report No. 1028b-BR) 11. Problemas Estruturais do Setor de Energia Eletrica do Brasil-CEMIG - 1977 12. Avaliacao do Mercado 1976/1975 - CELESC (April 1977) 13. ELETROBRAS' Audited financial statements, 1974 - 1976 14. CEMIG's Audited financial statements, 1974 - 1976 15. CELESC's Audited financial statements, 1974 - 1976 16. ESCELSA's Audited financial statements, 1974 - 1976 17. BRAZIL's Summarized Legislation Related to Tariffs (1977) B. Selected reports and documents related to the Project 1. Pedido de Financiamento ao Banco Mundial - CEMIG (November 1976) 2. Reformula9ao do Pedido de Financiamento ao Banco Mundial - CEMIG (June 1977) 3. Pedido de Financiamento ao Banco Mundial - Justificativa Tecnico Economica - CEMIG (1977) 4. Cash flow-CEMIG (May 1977) 5. Pedido de Financiamento a ELETROBRAS - CEMIG (July 1977) 6. Informaobes para o Banco Mundial - CEMIG (October 1976) 7. Padron de Entrada para Consumidores de Baixa Renda CEMIG (June 1977) 8. Mercado de Energia Eletrica - CEMIG (March 1976) 9. Mercado de Energia Eletrica - CEMIG (June 1977) 10. Distribuifo de Frequencia - Serviqo primario y secundario - CEMIG (June 1977) - 86 - ANNEX C Page 2 of 2 pag 11. Analise da Evolupao do Numero de Empregados e sua Projeca9o - CEMIG (June 1976) 12. Santa Catarina Power Distribution Project (7 vols) - CELESC (December 1976) 13. Santa Catarina Power Distribution Project - Relatorio Complementar - CELESC (April 1977) 14. Pedido Financiamento (3 vols) - ESCELSA (November 1976) 15. Informac'es para o Banco Mundial - ESCELSA (January 1977) 16. Informac,es para o Banco Mundial - ESCELSA (May 1977) 17. Plano de obras do trienio 1977-1979 ESCELSA (May 1976) 18. Projeto para Ligaqtes de Consumidores de Baixa Renda - ESCELSA (September 1976) C. Appraisal Working Papers 1. Comnputer outputs for economic calculations 2. Detailed cost estimates for project and program items 3. Worksheets for financial forecasts 4. Computer outputs for financial forecasts