Document of

The World Bank

FOR OFFICIAL USE ONLY fILLE -cOPY

Report No. 3408b-CO

STAFF APPRAISAL REPORT

COLOMBIA

GUAVIO HYDRO POWER PROJECT

May 6, 1981

Projects DepartmentLatin America and the Caribbean Regional Office

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

Average Calendar 1979 Average Calendar 1980 (Estimated)

Currency Unit = Peso - Col$ US$1 = Col$4 '7.260US$1 = Col$42.550 Col$1 = US$0.02115Col$1 = US$0.02350

Exchange Rate Effective April, 1981

US$1 = Col$52.49Col$1 = US$0.01905

WEIGHTS AND MEASURES

1 meter (m) 2 = 3.281 feet (ft) 21 square kilometer (km ) = 0.386 square mile (mi )1 cubic meter (m3) = 35.315 cubic feet (ft3)

= 264.2 gallons (gal)= 6.290 bbl

1 kilogram (kg) = 2.206 pounds (lb)1 ton (t;metric;l,000 kg) = 1.100 short tons (sh. tons)1 kilowatt (kW) = 1,000 Watts (103 kW = 106 W)1 kilowatt-hour (kWh) = 830.3 kilocalories (kcal)1 Megawatt (MW) = 1,000 kW (103 kW = 106 W)1 Gigawatt (GW) = 1,000 MW (106 kW = 109 W)1 Gigawatt-hour (GWh) = 1,000,000 kWh (106 kWh)1 kilovolt (kV) = 1,000 Volts (V)1 kilocalorie (kcal) = 3.968 Btu1 trillion cubic feet = 1012 cubic feetper annum = /aper month = /mper day = /d

GLOSSARY OF ABBREVIATIONS

CARBOCOL Carbones de ColombiaCONPES National Economic and Social Policy CouncilCORELCA Corporacion El&ctrica de la Costa AtlanticaCVC Corporacion Autonoma Regional del Valle del Rio CaucaECOPETROL = Empresa Colombiana de Petr6leosEEEB = Empresa de Energ4a Electrica de BogotaEMCALI = Empresas Municipales de CaliEPM = Empresas Publicas de MedellinFDE = Fondo de Desarrollo ElectricoGTZ = Deutsche Gesselschaft fur Technische Zusammenarbeit GmbH

IBRD = International Bank for Reconstruction and DevelopmentICEL Instituto Colombiano de Energla ElectricaIDB = Inter-American Development BankISA = Interconexion Electrica S.A.JNT = Junta Nacional de Tarifas de Servicios PublicosNPD = National Planning DepartmentOED = Operations and Evaluation Department (IBRD)PEFF = Permanent Electricity Financing FacilityPMU = Project Management Unit

FISCAL YEAR

January 1 to December 31

COLOMBIA FOR OFFICIAL USE ONLY

EMPRESA DE ENERGIA ELECTRICA DE BOGOTA (EEEB)

GUAVIO HYDRO POWER PROJECT

TABLE OF CONTENTS

Page No.

1. THE SECTOR ..................... ...........................Energy Resources .............. --..---..-.e...1Power Sector Organization ....... .................. . 3Regulation, Planning and Coordination ........ ............... 4Present Developments ................................ . 5World Bank Participation in the Sector ..... .......... . 8Sector Market Statistics and Forecasts .......... .. ......... 10Rural Electrification ........ ............ .................. 12Sector Investment Program and Studies .......... .. .......... 12Finances and Tariffs ..------------..---.--.-. 13

2. THE BORROWER ............................................... 14General Description ....................... 14Prior Bank Lending ........................--. 14Organization and Administration ............. .. ............. 15Employment .........--.......................... 15Accounting and Auditing ........ ............................ 16Billing and Collections ................... ................. 16Insurance ................ ------------------....----------- 17

3. EEEB'S MARKET ................ 17Background ................ 17Market Statistics and Forecasts ............................ 17

4. THE PROGRAM AND THE PROJECT ................................ 18Background ................................................. 18EEEB's Expansion Program ...... ............................. 19Generation ................................................. 19Transmission ............................................... 19Subtransmission and Distribution ..... ...................... 20,Other Investments .......................................... 20The Project ................................................ 20Project Description ........ ................................ 21Project Cost ... 22Project Financing .......................................... 24Engineering ................................................ 26Studies .................................................... 27Training ................................................... 27

This report is based on the findings of an appraisal mission, which visitedColombia from December 1 to 12, 1980, consisting of Messrs. M. Aguilar andJ. L. Vietti. (Ms. Garcia-Zamor and Mr. Linder also participated during partof the mission) and on the findings of a financial post-appraisal mission byMr. J.L. Vietti in January/February 1981.

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

Page No.

Project Organization and Implementation ..... ................ 27Procurement ........... 28Advanced Contracting and Retroactive Financing .... .......... 28Disbursement ................................................ 29Environment ................................................ 29Project Risks ............................................,. 29

5. FINANCES . ........................................... 30Summary . ........................................... 30Earnings History ........................................... 30Rate Base ............................................ 32Tariff Structure ........................................... 32Financial Structure ......................................... 33Investment and Financing Plans ......... .................... 34Future Finances ........................................... 37Sector Finances ........................................... 38

6. ECONOMIC ANALYSIS ........................................... . 41Least-Cost Solution ......................................... 41Return on Investment ......................................... 41

7. AGREEMENTS TO BE REACHED AND RECOMMENDATION ..... ............ 43

Page No.ANNEXES

1.1 Energy Supply and Demand .............................. 461.2 IBRD Power Loans ...................................... 471.3 National Generation Development Program ............. .. 48

2.1 Organization Chart ............ ........................ 492.2 Forecast Performance Indicators ...... ................. 50

3.1 Actual and Forecast Sales and Gross Generation Required 51

4.1 Capacity Balance ...................................... 524.2 Forecast Generation per Plant ......................... 524.3 Construction Program .................................. 534.4 Project Cost ....................... 544.5 Proposed Project Financing ............................ 554.6 Project Implementation Schedule ....................... 564.7 Disbursements of Bank Loan ............................ 57

5.1 Financial Indicators .......... ........................ 585.2 Actual and Forecast Income Statement 177-1988 ......... 595.3 Sources and Applications of Funds 1980-1988 . . 6o5.4 Actual and Forecast Balance Sheets 1977-1988 .......... 615.5 Schedule of Existing and Proposed Debt ................ 3 25.6 Forecast Loans-Disbursement Statement 1980-1988 ....... 645.7 Forecast Debt Amortization Statement 1980-1988 .. 645.8 Forecast Interest Charges 1980-1988 .... 55.10 Analysis of Power Sector Finances ..................... 66

6.1 Rate of Return on Development Program ..... ............. 77

Attachment 1 - Contents of the Project File ..... .............. 79

MAPS:

Colombia - Electric Power Systems IBRD-l56l9Colombia - EEEB Guavio Hydroelectric Plant IBRD-15620

COLOMBIA

EMPRESA DE ENERGIA ELECTRICA DE BOGOTA (EEEB)

GUAVIO HYDRO POWER PROJECT

1. THE SECTOR

Energy Resources

1.01 Colombia's main indigenous commercial energy resources are hydro-power, coal, gas and oil. Potential hydropower appears to be the mostpromising at some 93 GW of capacity and 400 TWh of annual energy capabil-ity 1/. Colombia is also endowed with large coal and gas deposits. Since1970 oil production has declined at an average annual rate of 6%. Overthe same period, consumption of petroleum products increased on average5.4% annually until 1975 and declined to 3.5% since then. As a result,Colombia has been a net importer of crude oil since 1976, with petroleumhaving become the country's largest single import. Prospects are for oilimports to rise sharply in the early 1980s unless additional reserves arediscovered and developed rapidly. Measures are being taken to deal withthis problem and to develop alternative energy sources. In the case of coal,there have been various obstacles to more adequate utilization of the existingpotential: the competition of lower priced petroleum, fragmentation ofproduction among a large number of small mines with low output and productivitylevels, and lack of efficient transport infrastructure. However, the Govern-ment has been taking action to address these problems (1.03).

1.02 Production of primary energy during 1970-1980 (Annex 1.1) has notkept pace with overall economic expansion. It increased at 2.9%/a during1970-1975, and then in the period 1976-1980 it increased only at 0.6%/a,mainly due to falling crude oil output. In contrast to the declining energyoutput, final energy consumption grew at 3.6%/a during 1970-1975, and at 6.1%/aduring 1976-1980, and has now stabilized at a growth of about 6.0%/a.

1.03 The Government-s development strategy is aimed at achieving a morefavorable balance between domestic energy supply and use through increasedutilization of domestic sources which are in abundant supply, i.e., hydropower,natural gas and coal and by developing high-value energy resources for exportto reduce the growing energy trade deficit. Toward this end, the Governmentis planning a large-scale development of high grade coal deposits for exportby state entities in association with foreign investors. For this purpose, anew enterprise, Carbones de Colombia (CARBOCOL), has recently been created andhas emerged as the Government's chief agency in coal-related matters. The Govern-ment attaches high priority to developing, primarily for export, the coal depositsat El Cerrejon (measured reserves well in excess of 1 billion tons) near Riohachain the Department of La Guajira on the Atlantic Coast, under CARBOCOL's responsi-bility in cooperation with foreign investment. A portion of the thermal deposits

1/ Source: Electric Energy Sector Study (ESEE) prepared jointly by theNational Planning Department (NPD) and ISA with the full time assistanceof GTZ. (Deutsche Gesellschaft fur Technische Zusammenarbeit GmbH -Federal Republic of Germany) completed in 1979.

at El Cerrejon is earmarked for domestic consumption in power plants and industryin place of natural gas and fuel oil. The Government also intends to step upsurveys of identified coal fields in the departments of Santander and Antioquiaand to study the feasibility of using this coal for firing large thermalplants required in the early 1990s when potential hydro sites are expected tobe increasingly more costly to develop (1.25). Small private firms which owncoal mines are pursuing plans to expand output and expand operations in orderto supply fuel for heat-intensive industrial processes and both in-plant andpublic power generation. In order to expand potentially viable mines, awell-coordinated Government program is needed to provide a rational pricestruacture, improvements in mine safety, credit facilities and support formarketing and infrastructure. Such a program would need substantial technicaland capital assistance from abroad. The Bank has been providing guidance tothe Government in the preparation of the proposed El Cerrejon and the RailwaysImprovement Projects.

1.04 In the hydrocarbon sector, the Government has taken action to stimulateinvestment in exploration and field development, which had declined after 1971because the prices paid to the producers for domestic sales were below economicvalue. Currently, the prices paid for oil produced by increasing yields fromexisting fields and from new fields have been raised, with the latter now atworld market levels, and the discriminatory exchange rate for petroleum hasbeen eliminated. Moreover, the Government is encouraging foreign participationin exploration and development on the basis of joint venture contracts withEmpresa Colombiana de Petroleos (ECOPETROL) (the Government oil agency). As aresult, interest among foreign petroleum companies to expand or start operationsin Colombia has been intensified and an upturn in exploration has taken place.Domestic petroleum product prices have been increased substantially in line withthe Government's objective of reaching international levels over a reasonableperiod of time. A Bank petroleum project is being considered for secondary oilrecovery, surveys and follow-up discoveries. With respect to natural gas, aprevious decline in known reserves and output has been reversed with the dis-covery of large deposii in3the Atlantic Coast region. These reserves (esti-mated at over 4.5 x 10 ft ) will provide energy and petrochemical feedstockto this rapidly industrializing region. The Government has under considerationseveral projects for natural gas utilization, including a fertilizer plant,and the production of methanol as a fuel for vehicles. Nevertheless, thefeasibility of such projects has not yet been thoroughly assessed.

1.05 Plans are underway to explore the country's uranium potential andthe Government has contracted with the French Minatome group for such explora-tion. Uranium possibilities seem to exist in the Zapatoca, Caldas andSanltander Departments. This potential would provide the country with anotherlong-term energy option. Although the measures taken by the Government toachieve a domestically based energy balance have already yielded positiveresults, the Government recognizes that its planning and policy efforts havebeen insufficiently coordinated among the various energy subsectors. Toremedy this, in 1980 the Government initiated a study to evaluate the country's

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options in developing domestic energy resources. The study will also focus onthe policy measures that can maximize the benefits to be derived from recommendedinvestments, based on least-cost solutions. The Bank is working closely withthe Government in this endeavor.

Power Sector Organization

1.06 Since 1970, electricity has been the fastest growing form of energyused in Colombia (8.2%/a); its share in overall energy consumption grew from6.5% in 1970 to 8.9% in 1978. This process has been assisted by the gradualconsolidation of isolated facilities into regional systems and the intercon-nection of these systems to facilitate development of Colombia's low-costhydro resources. The main systems are the Central System, covering theinterior and the Pacific coast, and the Atlantic (or Northern) system coveringthe northern part of the country. By 1983 a national grid will have beenestablished with the completion of a 500-kV line interconnecting the Atlanticand the Central Systems.

1.07 At present, public electricity service is provided by:

(a) municipally owned companies, independent of the NationalGovernment, of which the largest are Empresa de EnergiaElectrica de Bogota (EEEB), Empresas Publicas de Medellin,(EPM), and Empresas Municipales de Cali (EMCALI);

(b) national enterprises such as Instituto Colombiano de EnergiaElectrica (ICEL), and Corporacion Autonoma Regional del Cauca(CVC), and the Corporacion Electrica de la Costa Atlantica(CORELCA);

(c) a large number of local subsidiaries of ICEL, CORELCA andCVC 1/; and

(d) a generating and transmission company, InterconexionElectrica S.A. (ISA), the shareholders of which are EEEB,EPM, CVC, ICEL and CORELCA.

1.08 The Ministry of Mines and Energy owns part of the sector directlythrough ICEL and CORELCA. EEEB and EPM, currently the largest utilities, arecontrolled by autonomous municipal governments. CVC reports to the NationalPlanning Department (NPD). ISA was established in 1968 to provide a rationalframework for sector development by interconnecting the systems of its share-holders, thus creating a national grid capable of transmmitting large amountsof power and energy between the regions. By pooling their financial resources(provided in part by Government contributions for ICEL and CORELCA) throughISA, its shareholders have been able to share the costs and benefits of thecountry's large hydropower resources, which are geographically concentrated

1/ In most cases, the ownership of these subsidiaries is shared with localgovernments.

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principally in the areas of Bogota (EEEB) and Medellin (EPM). One of theproblems that the sector as a whole faces is the relatively low level ofsalaries of the top technical and managerial staff when compared with thoseof equivalent positions in the private sector, which has resulted in arelatively high turnover of senior staff. During negotiations agreement wasreached that the Government will carry out a study on the adequacy of thestructure and levels of the remuneration at all levels of employment in thepower sector. The conclusions and recommendations of this study, which willbe completed by June 30, 1983 will be received by the Bank. ISA and itsshareholders will give all necessary assistance to the Government for carringout such study.

Regulation, Planning and Coordination

1.09 The Ministry of Mines and Energy is charged with formulating na-tional policy for the generation, transmission and distribution of elec-tricity, including coordination and supervision of power sector planning,although it shares responsibility with NPD in defining investment priorities.The ministry discharges its functions through its Electric Energy Division(which is small and does not have the powers for issuance of licenses, regula-tion of tariffs, or approval of expansion programs to enforce its policies andprograms). Electricity tariffs are regulated by the Junta Nacional de Tarifasde Servicios Publicos (JNT) which forms part of the NPD. JNT on the basis ofrequests from the companies approves rate increases, but utilities are free toset tariffs at levels lower than those approved by the Junta. Although theGovernment cannot enforce its policies directly on the municipally controlledpower companies, a mechanism for reaching agreement on major issues affectingthe sector is provided by ISA, in which the Government has a major althoughnot controlling interest.

1.1( Sector planning and coordination have improved markedly in recentyears, as illustrated by the following:

(a) ISA defines the generation and transmission expansion programfor the interconnected system. On the basis of studies carriedout by it and its shareholders, ISA determines the least-costexpansion program. After approval by its Board and NPD, thisbecomes the national expansion program. ISA's bylaws specifythat all plants requiring a joint effort of all itsshareholders will be constructed, owned and operated by ISA.Plants of regional interest may be built by one or severalshareholders, subject to ISA's approval. Under thesearrangements, ISA is, in effect, responsible for an importantpart of sector regulation and planning.

(b) In connection with the San Carlos I loan, ISA and itsshareholders agreed to prepare and present to the Governmntand the Bank for comments a Power Sector Development MasterPlan, which has been received and reviewed by the Bank. Thisplan covers the period 1980-90 in detail and 1991-2000 ingeneral terms and consolidates the programs for generation andtransmission expansion. Similarly, ISA's shareholdersundertook, under the coordination of the Ministry of Mines andEnergy, to prepare and present, as part of ISA's Master Plan,to the Government and the Bank for comments by December 1981,

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a 20 year Sector Development Master Plan for Distribution;

consolidating all existing and future programs for distributionand covering the period 1982-87 in detail. 1/ Overall, the MasterPlan is expected to provide a valuable framework for long-range

decisions on sector-financing, pricing and rural electrificationwhich have in the past been based on partial and uncoordinatedinformation;

(c) as agreed under the San Carlos I loan, a tariff study based onmarginal costing has been completed and received in the Bank.The study is an important step towards the understanding ofelectric power tariffs in Colombia and is the result of a

commendable effort made by ISA and its shareholders. The Bankhas given its comments to ISA and a Bank mission has been

scheduled to discuss what next step should be taken;

(d) also in connection with San Carlos I, a study was carried out

by consultants to assess the extent and causes of excesivelosses in the main power systems down to the level ofdistribution to recommend actions to minimize such losses.The Bank reviewed this study, and recommended that an action

committee be set up, representing all the shareholders, toprepare a work program. A second phase of the study, whichdeals with metering errors, is underway; and

(e) as agreed under the San Carlos II loan, a study on a uniformsystem of accounts and financial planning for the sector isunderway by consultants, with participation of professionalfrom ISA and its shareholders. The results of this study areexpected by June 30, 1981.

Present Developments

1.11 Considering the power sector's important role in Colombia's develop-ment process, the Government and the main power companies established in themid-1970s the "Sochagota" Agreement, for orderly and efficient sector expansion.The Agreement envisaged that ISA would be responsible for planning, buildingand owning all plants of national interest. Since then, ISA has functioned onthis basis. However, in 1979, the shareholders of ISA expressed reservationsabout the concentration of almost 70% of planned expansion in generatingfacilities through 1987 in the national company and the associated loss ofparity among themselves in relative generating capacity. Another matter of

concern was that ISA's construction capacity would be nearly fully committedover the next few years with works in progress (1,910 MW of hydro plant,

1/ The Government has delegated management of the study to ISA. CVChas completed a draft report, but no information has reached the Bankfrom ICEL. CORELCA is expected to have a draft report available soon.EPM has a distribution program covering 10 years, which was defined incooperation with Westinghouse; this study will be expanded to cover theperiod up to the year 2000 with the help of consultants. EEEB willhave the study executed by the same consultants to be engaged under therecently signed loan 1807-CO.

6

numierous 230-kV lines and a 500-kV line). These reservations gave rise toa proposal that the four plants in ISA-s 1984-88 Investment Program (Betania500 MW, Guavio 1,000 MW, Playas 200 MW and Urra 1,050 MW) be constructed,owned and operated by individual shareholders. Although these plants wouldrepresent less than 1% of the hydroelectric resources that Colombia willdevelop over the next 20 to 30 years, the Government and the Bank felt that asound pattern of development and use of the country's electric energy resourcesshotuld be maintained. In accordance with this, the Government and ISA-s Boardhave confirmed that:

(a) as a long-term objective, ISA will own and have direct ownershipof at least 33% of overall sector capacity and energy. To thisend, plant ownership under the expansion program subsequent tothe current 1984-88 Program (discussed below) will be allocated toensure that ISA will have this share. Moreover, ISA will acquireand maintain ownership of all trunk transmission lines in theinterconnected.system. These arrangements will assure ISA apredominant role in directing sector development and operation,while avoiding problems attendant upon overconcentration of sectorresponsibilities in ISA;

(b) with respect to ownership of four hydro facilities in the 1984-88Program, individual ISA shareholders would, subject to presentationof viable financing plans, build and own the Guavio (1,000 MW),Betania (500 NW) and Playas (200 MW) plants. 1/ The two Urra plants(310 MW and 740 MW respectively) would be owned jointly by CORELCAand ISA. On this basis, ISA-s direct control of the interconnectedsystem (currently about 20%) would increase to about 30% by 1988.As stated above, the policy of 33% ownership will determine theallocation among ISA and its shareholders of plants to be selectedfor the 1989-93 Expansion Program and subsequent ones;

(c) further, ISA will invest in the Guavio and Betania plants in exchangefor absolute rights to 40% of the capacity and energy of the formerand 50% of the latter, which ISA will sell to its shareholdersunder long-term contracts. These rights to plant output representan additional 6% of the national system, thus bringing ISA's overallparticipation (direct ownership plus sharing in Guavio and Betaniainvestments) in the sector's generating capacity to 35% by 1988; and

(d) ISA, as the future national dispatch agency (facilities are beingconstructed), will operate the interconnected system at minimumcost. This objective has been fully endorsed by ISA-s Board; themeans by which it would be achieved would be based upon the resultsof a dispatch study (under San Carlos II) scheduled for completionby end-1981.

1/ The proposed Bank loan for Playas was approved by the Board on March 3,1981.

1.12 Another matter which has been under discussion has been the growthin overdue accounts owed to ISA by its shareholders (except EPM) for capitalcontributions and energy purchases. The Government and the sector tookactions designed to overcome this problem; by the end of 1980 CVC and CORELCAwere up-to-date, and measures are well in hand to erase EEEB's remainingarrears (for capital contributions) by end-April 1981. The capital contribu-tions of ICEL (a holding company for 13 mostly rural-based local power companies,"electrificadoras", which are normally paid by the Government, have beenbrought up to date, but its electrificadoras' overdue accounts for 1979-1980energy purchases have not yet been paid (1981 accounts are up-to-date).The electrificadoras themselves have started taking action to improve theirfinances, in order to settle this debt and maintain timely payment of purchases,with some of them having increased rates by 3.3% per month. Within thiscontext, the National Economic and Social Policy Council (CONPES) approvedproposals formulated by NPD and ISA's Board, which would eliminate the elec-trificadoras' arrears. Financing is being provided to free resources to allowthem to settle their overdue accounts to ISA shortly. CONPES has also decidedthat a 15% surcharge would be added to the electrificadoras' tariffs (as in theCORELCA system). Finally CONPES has resolved that national budgetary fundsearmarked for public entities that did not settle their accounts with the powerutilities would not receive the amounts equivalent to their outstanding accounts.For the long term, however, the Government has realized that the electrificadoraswould need to be grouped into larger market companies to become financiallyviable and operationally efficient. In November 1980 CONPES, based uponrecommendations of DNP, approved a number of measures aimed at attaining this,principally:

(i) redistribution of markets through mergers of two or moreelectrificadoras;

(ii) restructuring of ICEL's financial and operational aspects; and

(iii) strengthening ICEL's ability to guide the electrificadoras onfinancial and technical matters.

In support, the Bank has been encouraging the Government and the sector toconsider specific institutional arrangements for these small companies. Inresponse, some ISA shareholders have already begun to buy, or are contemp-lating buying ownership of electrificadoras in geographic proximity to them.For example, EEEB has ratified a proposal to obtain, as a first step, a 25%share of ownership of the Electrificadoras of Cundinamarca and Meta, and EPMwill study the feasibility of acquiring the Electrificadoras of Antioquia andChoco, and if study results are favorable, the company will proceed with theacquisition (Playas Hydro Power Project, Loan 1953-CO). It should be recog-nized, however, that the reorganization will necessarily be achieved onlygradually over a period of years. This effort would be assisted by thedefinition of strategy, coordinated at governmental and sectoral levels toimplement the CONPES decision. During negotiations agreement was reached thatthe Government will prepare a program for implementing the recommendations ofDNP regarding the structure and operations of ICEL. The program will be putinto effect starting June 30, 1983. ISA and its shareholders will take allreasonable and appropriate action required on their part for the implementationof the program.

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World Bank Participation in the Sector

1.13 Since 1950, the Bank has made 25 loans to Colombia's power sector,totalling US$979 million (Annex 1.2). In addition, the Bank is currentlysupporting rural electrification under the Integrated Rural DevelopmentProject (1532-CO, 1977), and would continue such efforts under the proposedVillage Electrification Project for the North Atlantic Coast.

1.14 Between 1973 and 1978 the Bank was unable to participate in sectordevelopment through lending because of institutional and financial difficul-ties including severe financial constraints (because of the Government'sreluctance to press for rate increases under inflationary conditions) whichreduced the sector's internal cash generation, well below levels needed forsigniticant expansion of plant facilities. Decisions on system expansionrequired protracted negotiations among the shareholders and the Govern-ment. These negotiations were further complicated by the original share-holders' reluctance to allow the incorporation of CORELCA into ISA. Becauseof the time required for resolution of these fundamental issues, the Bankwas unable, until 1978, to proceed with the San Carlos I, the 500-kV Inter-connection and Mesitas hydroelectric projects, all of them urgently needed toavoid power rationing in Colombia. Following satisfactory progress in resolv-ing these problems, seven loans were made, three in 1978 (San Carlos I,1582-CO; 500-kV Interconnection, 1583-CO; and Mesitas, 1628-CO), one in 1979(San Carlos II, 1725-CO) two in 1980 (Bogota Distribution, 1807-CO; andGuadalupe IV Hydro Power Project, 1868-CO) and one in 1981 (Playas Hydro PowerProject, 1953-CO). Nevertheless, the underinvestment during the 1970s hasresulted in substantial power shortfalls. Rationing is currently in effect andexpected to intensify during this year, assuming average hydrological condi-tions (4.02). The power shortage has also been aggravated by delays ininitiating commercial operation of the Guatape II hydroelectric plant as aconsecquence of difficulties encountered in implementing the population relo-cation program associated with the project.

1.15 Overall Bank operations through 1970 have been reviewed by theOperations Evaluation Department (OED) in two reports 1/, which concluded thatBank financing had been successful in assisting the power companies to develophydroelectric plants at lower unit cost than otherwise possible. This per-mitted greater urban coverage as well as cheaper and more reliable electricitysupply to industry. OED also commended Bank efforts in the establishment ofthe central interconnected system which facilitsted further power sectordevelopment. In addition, OED identified as important considerations forpossible future loans in the sector: the need to give greater attention toimproving power distribution, financial recording and financial planningcapabilities, and tariff structures; these have been addressed under the abovementioned loans.

1/ "Operations Evaluation Report: Electric Power" (Report No. Z-17,dated March 10, 1972) and "Bank Operations in Colombia - An Evaluation"(Report No. Z-18 dated May 25, 1972).

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1.16 OED additionally reviewed four individual projects 1/. The mostrecent report (575-CO/681-CO), which pertains to ISA, discusses the engineer-ing, physical, financial and institutional difficulties encountered, particu-larly in connection with the Chivor Hydro Electric project, ISA's firstgeneration facility and the largest hydro electric project undertaken inColombia until then. The report concluded that the experience gained underthese projects has had a considerable impact on the shaping of Bank policy forfurther lending in Colombia. Adequate provisions for price contingencies havebeen introduced; local financing is being secured through long-term financialcommitents of the shareholders to ISA; and improved financial planning hasbeen instituted by ISA and its shareholders, as well as continuous monitoringof their financial performance.

1.17 Recent developments in the sector indicate that a reasonablebalance between regional and national interest will be maintained, thusproviding a sound basis for continued Bank participation. Further objectivesare, in general: coordinated sector planning, efficient organization andoperation, and sound financial management; within the general scope of theseobjectives, specific attention in the short term should be given to: least-cost operations, stregthening of the operating efficiency and financialviability of the electrificadoras, rational urban and rural distributiondevelopments, enhancing financial recording and financial planning capabili-ties and development of improved tariff structures and levels based on commonconcepts throughout the country.

1/ - Third Medellin Power Project - Loan 639-CO (1964; Report No. 450,May 24, 1974).

- Third (EEEB) Power Expansion Program - Loan 537-CO (1968;

Reoort No. 536, June 29, 1977).

- Power Interconnection Project (1968) - Loan 575-CO; and ChivorHydroelectric Project (1970)-Loan 681-CO (Report No.2720, Oct.29,1979).

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Sector Market Statistics and Forecasts

1.18 Per capita electricity generation in Colombia was about 735 kWh/a.in 1979, which is below the average for Latin America. Total installed capacityand gross generation are summarized below:

Installed Capacity and Electricity Generation in 1980 1/

Public Service - Self-Producers 2/ Total 2/MW % GWh % MW % GWh % MW % GWh %

I HydroSubtotal 2,888 67 14,382 69 20 - 88 - 2,908 68 14,470 69

2 Thermal2.1 Steam 873 21 NA 162 4 851 4 1,035 242.2 Gas turbine 278 6 NA 39 1 188 1 317 72.3 ]Diesel - NA 22 1 96 1 22 1

Subtotal 1,151 27 5,256 25 223 6 1,135 6 1,374 32 6,391 31

3 Total Country 4,039 94 19,638 94 243 6 1,223 6 4,282 100 20,861 100

1/ Effective capacity. Source ISA: Balance Sistema Interconectado Colombiano UPE-EG-(2/ Preliminary figures.31 Assumed identical to 1978.

Public entities accounted for 94% of the total installed capacity and grossgeneration. The remaining 6% was provided by self producers.

In 1979, Colombia had about 2.3 million electricity subscribers,of which about 87% were residential and 10% commercial. ICEL statisticsshow that in 1979 electricity service reached 83.6% of the urban population,13% of the rural population which combined represent a total of 54.3% oftotal population.

1.19 Electricity sales in 1979 totalled about 14,170 GWh. Consumption byconsumer category is shown below:

Sales Clients -/Category GWh % No. %

Residential 5,732 40.5 1,960,000 87.3Industrial 4,342 30.6 29,400 1.3Commercial 1,667 11.8 230,000 10.2Others 2,429 17.1 26,600 1.2

Total 14,170 100.0 2,246,000 100.0

1/ Source: ISA

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1.20 Market statistics for ISA's Shareholders in 1972 and 1979 areshown below:

AverageAnnual Growth

1972 1979 %

Gross Generation (GWh) 9,380 17,833 9.6Maximum Demand (MW) 1,810 3,394 9.4Total Sales (GWh) 7,600 14,170 9.3

Of which consumptionpercentages: Residential 38% 40% 10.4

Commercial 12% 12% 9.3Industrial 34% 31% 7.4Others 16% 17% 9.3

Losses 1/ 18% 21% -

Source: Playas Hydro Power Project (Report No. 3240b-CO).

1/ Includes station use, transmission and distribution losses,and theft. Actual losses in 1979 are estimated at about 16%.

During 1972-79 gross generation increased at an average annual rate ofabout 9.6% (GNP in the same period grew at an annual rate of 5.7%). Growthof sales in the period averaged 9.3%/a and ranged from 7.7%/a in the EPMsystem to 12%/a in the ICEL System.

1.21 The demand forecast for peak capacity and total gross generationin 1981 - 1990 is shown below:

System PeakGross Generation Required (TWh) Expected Demand 1/

(MW)Year EEEB EPM CVC ICEL CORELCA TOTAL

1980 5.6 4.4 2.7 3.8 3.1 19.6 3,125 2/1981 6.1 4.7 3.0 4.4 3.6 21.8 4,0691982 6.8 5.1 3.3 5.0 4.3 24.5 4,6081983 7.5 5.5 3.6 5.6 5.2 27.4 5,1111984 8.2 6.0 3.9 6.1 5.9 30.1 5,6291985 9.1 6.4 4.2 6.8 6.7 33.2 6,2181986 10.1 6.9 4.6 7.4 7.5 36.5 6,8511987 11.0 7.5 5.1 6.1 8.2 39.9 7,4951988 12.1 8.2 5.5 8.9 8.8 43.5 8,1821989 13.3 8.9 6.0 9.8 9.5 47.5 8,9351990 14.6 9.7 6.5 10.7 10.2 51.7 9,739

Average GrowthRate 1981-1990% 10.1 8.2 9.2 10.9 12.6 10.2 10.3 2/

1/ Uotalned from tne simulation or 100 cases for the aggregated demand inin the interconnected system.

2/ Excludes CORELCA in 1980 because it will be interconnected to the systemin 1981/1982. With CORELCA the equivalent peak-demand in 1980 would havebeen 3657 MW.

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Demand for gross generation and peak capacity are forecast to grow ataverage annual rates of 10.2% and 10.3%, respectively, in the priod 1981-1990,which is reasonable. The system load-factor is expected to remain constant at61% during the period. The installation of about 6,600 MW is planned between1981 and 1988 to meet demand (Annex 1.3).

Rural Electrification

1.22 About 32% of the population lives in rural areas. Even thoughaccess to service is high in urban areas, only an estimated 13% of the ruralpopulation has electricity service. Complete information regarding ongoing andfuture rural electrification efforts is not available at present but would beavailable upon completion of the Master Plan (1.10).

1.23 Nevertheless, substantial rural electrification programs are currentlyunderway in a number of regions in the country. Among the most important are:

(a) The ongoing electrification subproject of an Integrated RuralDevelopment Program (DRI) supported by IDB, Canadian InternationalDevelopment Agency and Bank financing (Loan 1352-CO) throughwhich an estimated 15,000 rural families will acquireelectricity service. At present, DRI II is under preparation,and is expected to cover substantial further areas;

(b) the electrification program in the department of Choco, financedby the Netherlands Government;

(c) the electrification program in the coffee- growing areas,financed by coffee sector resources;

(d) an IDB financed rural electrification project for ICEL,which will provide service to about 130,000 households by1984, as well as other ICEL projects for similar purposes;

(e) EPM and EEEB programs to extend substransmission and distribu-tion facilities to rural areas in proximity to their own markets;and

(f) finally, under a recently approved Bank loan, CORELCA is carryingout the first phase (1981-1985) of a 15 year village electrificationprogram covering the North Atlantic region which will, upon programcompletion, provide electricity services to agroindustrial andcommercial enterprises and about-215,000 households.

Sector Investment Program

1.24 The total 1981-1990 investment program of ISA and its shareholdersexcluding interest during construction, is estimated at about Col$1,519 billionin current prices (about US$15.4 billion in current prices) with a foreigncomponent of about 54% (Annex 5.10, Attachment 6 and 7). Some 81% ofcurrently programmed investments would be for generation, which is extremelyhigh (a range of some 40-60% would be the norm). Because the new generatingcapacity would be of little use without appropriate investments in sub-transmission and distribution it is probable that the estimated cost of

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Col$1,519 billion is understated. The Master Plan for power development beingprepared by ISA and its shareholders would provide a basis for more completesector investment estimates (1.10).

1.25 The introduction of large thermal plants later in the centuryis expected to play an important role in ISA's planning for the sector inthe next few years (lead time for mine developmnt and power station cons-truction may aggregate some 10 years). Even the large hydro potential ofsome 93 GW (1.01) would be completely utilized by about year 2020 and theuse of the country's large coal reserves in thermoelectric plants may be-come more economic than hydro before that time. The Government is aware ofthis scenario 1/, and the Government agencies involved, together with theBank, are addressing it. The use of coal-fired thermal plants and thesubstitution of coal for gas and pretroleum would be the primary objectives.

1.26 The generation investment program is imposing a heavy financialburden on ISA and its shareholders. To ensure that only sound projects areundertaken, assurances were obtained under the San Carlos loans that, exceptfor plants in the agreed National Expansion Program, ISA and its shareholderswould not undertake construction of any generating plants of more than 200 MW(ISA) and 100 MW (shareholders) capacity prior to completion of San Carlosunless satisfactory evidence has been presented to the Bank that it is eco-nomically justified and that adequate financing is available to carry it out,as well as to meet other financial obligations.

Finances and Tariffs

1.27 Except for EEEB and EPM, which have histories of adequate cashgeneration, the power sector has relied heavily on borrowings and budgetarycontributions to finance its investments. EEEB and EPM operate low-costsystems and cover the most affluent markets in the country; they have, there-fore, been able to finance their investments with an appropriate balanceof borrowings and cash generation while charging relatively low rates.GVC, previously dependent in part upon Government transfers, has strengthenedits financial position considerably in recent years. Because there has beenno mechanism to obtain financial transfers within the sector from the moreaffluent areas to the less affluent ones, ICEL and CORELCA, which operatehigh-cost systems in lower income areas than EEEB and EPM, have had to relyon budgetary contributions from the Government and fuel subsidies. In recentyears, however, the opportunity of sharing in low-cost investments throughISA has provided an indirect transfer mechanism. In future, the re-structuringof ICEL and the interconnection of CORELCA with the central system are expectedto strengthen further the sector's overall financial capability.

1.28 Between 1971-1974, rate adjustments lagged considerably behindyearly inflation. From 1975 onwards the situation began to improve insofarthat rates were adjusted in line with inflation and starting in 1977 rateshave been adjusted to increase them in real terms. This trend is expected

1/ Disponibilidad de capacidad hidroelectrica y su influencia en lageneracion termica en el futuro (NDD, November 1978).

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to continue as the result of the agreements reached under the San Carlos Iand II, Mesitas, Bogota Distribution, Guadalupe IV and Playas loans andcurrent Government policy, which calls for maintaining tariff levels adequateto provide reasonable contribution to investment requirements. For 1981 thispolicy is expected to result in tariff increases in real terms of 20% through-out the sector.

1.29 The successful long-term execution of Colombia's power developmentis contingent not only upon the availability of sufficient cash generation bythe individual entities but also upon domestic and external sources of finan-cing. The lag in generation investment during the 1970's together with theneed to accelerate expansion of facilities even further to permit energy sub-stitution, has resulted in a financial bottleneck that cannot be fully relievedthrough tariff action (Annex 5.10). In recognition of this, during 1980, theGovernment reestablished the Electricity Development Fund (Fondo de DesarrolloElectrico , FDE) in order to overcome the constraint on investments representedby the insufficient availability of local commercial financing. This Fund hasbeen made available to the utilities on the condition that their financial obliga-tions to ISA are duly attended to. Furthermore, in view of the high priority theGovernment attaches to planned power investments, authorization for significantfor-eign borrowings to be monetized was given, even though Government policynormally precludes this. Moreover, the Government is in the process of estab-lishing a Permanent Electricity Financing Facility (PEFF) for the sector; fundingfor this facility could come from various sources including the Government,public entities with temporary cash surpluses and public bond issues, althoughthe specific arrangements are still under study. The Government has confirmedthat the PEFF will be established by January 1, 1982, and that the funds providedto such facility will be adequate to enable the timely carrying out of theNational Power Expansion Program.

2. THE BORROWER

General Description

2.01 The proposed borrower, Empresa de Energia Electrica de Bogota (EEEB),is an autonomous company owned by the Municipality of the Special District ofBogota. It was established by private Colombian interests and has operated thecity's electric service for the past 80 years, since 1951 under municipalownership. It has an installed capacity of 719 MW, 582 MW of which is hydroand the balance coal-fired thermal. It served about 580,000 subscribers atthe beginning of 1981.

Prior Bank Lending

2.02 The Bank has made five loans totalling US$256.6 to EEEB: 246-CO inJanuary 1960, 313-CO in May 1962, 537-CO in June 1968, 1628-CO in November 1978,and 1807-CO in March 1980. The first two loans helped finance 304 MW of hydroand thermal generating plant additions, including the Sesquile Dam for theGuatavita Reservoir, and transmission and distribution system extensions.The third loan helped finance the 150 MW El Colegio hydroelectric plant andassociated substations, construction of the 50 MW Canoas hydroelectric plant,

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expansion of the transmission and distribution systems, and engineeringservices. The fourth loan is helping to finance part of the 1978-82 nationalpower expansion program including the 600 MW Mesitas hydroelectric facility.The fifth loan (Bogota Distribution Project), MUS$87.0, will help EEEB improveand expand the existing Bogota subtransmission and distribution systems. Worksfinanced by the first three loans were completed successfully although withdelays (of about one year and a half for the first two, and three years for thethird) because of a variety of problems. The disbursements of the fourth loanbegan in September 1979 and the construction is progressing generally satis-factorily although with a delay of 3 to 6 months and some MUS$62 of cost over-runs due to changes in base prices (actual prices offered were higher thanoriginal cost estimates). Disbursements of the fifth loan are expected to beginshortly (the loan was signed on February 6, 1981), as soon as the loan is declaredeffective.

Organization and Administration

2.03 EEEB is directed and administered by a seven-member Board of Directorsheaded by the Mayor of Bogota. Two members are elected by the Municipal Council,three are chosen by the Council from lists submitted by associations representa-tive of banks, commerce, and industry in Bogota, and one is chosen by thePresident of Colombia. This composition was worked out in connection with theBank's initial loan to EEEB (246-CO) and has generally proven to be satisfactory.

2.04 EEEB's management is entrusted to a General Manager (appointed bythe Board) assisted by four Deputy Managers, respectively responsible for(a) Administration; (b) Commercial and Financial; (c) Technical; and(d) Operations. There is also a Planning Division which provides support tothe General Manager. The current organization chart is shown in Annex 2.1.Although EEEB has had a stable and competent management during most of itsassociation with the Bank, turnover in its senior personnel increased during1976 to 1978 resulted in a significant reduction in the number of experiencedsenior officers. The present financial manager, hired in late 1978, and mainfinancial staff have shown adequate expertise in handling financial business.An important step for strengthening of financial management was taken inJanuary 1979, when EEEB hired Peat, Marwick, Mitchele and Co., ManagementConsultants, to carry out a study on managerial, budgetary and accountingsystems and financial planning; the study was completed; the findings werediscussed by EEEB's management and the final recommendations are being imple-mented. Under the Bogota Distribution loan, EEEB agreed to enhance theeffectiveness of its financial management through: (a) employing two financialexperts; and (b) carrying out periodic training courses for its financial staff.The experts were hired and the financial staff have attended several courses andseminars. EEEB has planned further financial training for 1981-1982.

Employment

2.05 EEEB had 2,662 employees at the beginning of 1981, including fiscalaudit personnel of 56, administration personnel of 319, financial personnelof 479, operations personnel of 1,622 and technical personnel of 186, whichare reasonable proportions of staff assigned to EEEB's various activities.The company's historical staff growth over the past 12 years in relation tothe number of customers served and energy sold is shown below:

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Number of Number of Customer Total Sales, MWh 1/2/Employees 2/ per Employee per Employee

1968 1,422 174 1,0211971 1,520 198 1,3171974 1,896 213 1,3591977 2,234 216 1,5871978 2,278 220 1,6031979 2,465 216 1,5061980 2,662 218 1,506Average growth rate

1969-1980 (%) 5.4 1.9 3.3

1/ Includes bulk sales to other utilities.

2/ Source: EEEB.

The total number of EEEB-s employees is projected to grow at an average ofabout 6.0% per year. The actual trend of generally improving ratios of thenumber of customers per employee and of the annual electricity sales peremployee is expected to continue (Annex 2.2).

Accounting and Auditing

2.06 EEEB's data processing and accounting are satisfactory. Internalauditing is carried out by a separate department under a General Auditorresponsible to the Board of Directors and appointed by the Mayor of Bogota.Independent auditing of EEEB was carried out by external auditors acceptableto the Bank until 1977, at which time the function was taken over by the"Contraloria del Distrito Especial de Bogota", the auditing body of theMunicipal Government of Bogota. Although audits performed by such bodywere in practice similar to those carried out by private auditing firms theaudit report was signed by the Controller, who is the head of the organizationand usually a political appointee of the incumbent Government administration,as are the General Manager of EEEB, as well as most of the Board. In orderto guarantee a greater degree of independence between auditor and "auditee"and to ensure audits in accordance with sound commercial principles, underloan 1807-CO, EEEB agreed to appoint independent auditors acceptable tothe Bank. EEEB hired in mid-1980, the independent auditor Liborio Cuellarand Associates, to perform the company's audits starting in fiscal year 1980.

Billing and Collections

2.07 Billing, which covers a bi-monthly cycle for all customers, iscarried out using a computerized processing system. Bills must be paid incaslh at the various company offices or banks located throughout the city. Asof December 31, 1979, accounts receivable was 22% (about 79 days billing) oftotal annual sales, which represents an improvement over performance inprevious years. However, the present estimate for 1980 is 23%, which ishigher than the 18% target covenanted under the Mesitas and Bogota Distributionloans, due to arrears of some government entity bills. During negotiationsEEEB agreed to reduce them to no more than 21% of annual sales by December 31,1981; and to no more than 19% in 1982; and 17% in 1983 and thereafter.

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Insurance

2.08 EEEB's assets are not adequately insured. Under the Bogota Distri-bution loan the company agreed to execute an insurance study with consultants

satisfactory to the Bank. The Bank reviewed the terms of reference for thestudy and EEEB, which is currently evaluating the offers, expects to award the

contract by March 31, 1981. The study would be completed by December 31, 1981,

and implemented starting December 31, 1982 after giving the Bank an opportunityto review the study and comment on its conclusions and recommendations.

3. EEEB's MARKET

Background

3.01 EEEB's service area includes the District of Bogota--the capital ofColombia--and the areas of influence of more than 55 municipalities within thenearby departments of Cundinamarca and Meta in the central zone. Totalpopulation living in EEEB's service area is estimated at about five millionin 1979, or about 20% of Colombia's population in that year.

Market Statistics and Forecast

3.02 EEEB's market statistics and forecasts for the period 1975-1990 aresummarized in the following table and shown in detail for the period 1973-1990in Annex 3.1:

1975 1980 1985 1990Consumer Category GWh (%) GWh (%) GWh (%) GWh (%)

Residential 1,042 39 1,672 42 2,875 44 5,193 47Commercial 450 17 673 17 1,077 16 1,719 16Industrial 855 32 1,263 31 2,049 31 3,240 29Government andPublic Lighting 316 12 401 10 604 9 896 8

Total Sales 2,663 100 4,009 100 6,605 100 11,048 100

Losses and StationUse 695 21 2/ 1,139 22 2/1,897 22 2/ 2,670 19 2/

Total Requirements 3,358 5,226 8,502 13,718

1/ Source: EEEB. Proyecciones Financieras, Enero 1981.2/ As a percentage of total requirements.

3.03 The forecast for the period 1981-1990 was prepared by EEEB on the basisof historical trends and recorded indices for each consumer category for each ofthe years from 1973 to 1980. Trend curves were derived to project monthly and

annual requirements which were subsequently adjusted to reflect population growthtrends, sector economic conditions and market saturation effects. Residentialconsumption grew at an average annual rate of 11.5% in the period 1974-1980and it is expected to grow at an average annual rate of 12% in the period

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198:1-1990. Also residential consumption augmented its share of the marketfrom 36% in 1973 to 42% in 1980 as a result of increased urbanization andaccess to service, as well as expansion of services to semi-rural areas. Thistrend is expected to continue over the next few years and by 1990 residentialconsumption would represent about 47% of EEEB's total sales. Commercialconsumption grew at an average annual rate of 9% in the period 1974-1980 andit -is expected to grow at an average annual rate of 9.8% in the period 1981-1990.Commercial consumption which represented 17% of sales in the period 1973-1980 isexpected to decrease slightly to 16% in the period 1981-1990. Industrial con-sumption grew at an average annual rate of 7.9% in the period 1974-1980 and itis expected to grow at an annual average rate of 9.9% in the period 1981-1990.The industrial consumption share of the market which decreased from 34% in 1973to 32% in 1980, is expected to decrease slightly to 29% by 1990. Government andPublic Lighting grew at an average growth rate of 4.6% in the period 1974-1980and it is expected to grow at an average growth rate of 8.4% in the period 1981-1990, as a result of public lighting expansions included in the Bogota Distri-bution project, as well as in other future distribution expansion included inEEEB's investment program. Government and Public Lighting consumption has showna slightly decreasing share of total consumption and is expected to representabout 8% of total sales by 1990. Other consumption, which includes station use(mainly pumping for storage) and losses, grew at an average annual growth rateof 1.4.8% in the period 1974-1980 and is expected to grow at about 8.9% in theperiod 1981-1990. Actual losses represented about 22% of total gross genera-tion requirements in the period 1974-1980. EEEB's historical losses arerelatively large and, as for most Colombian power utilities, may contain asubstantial amount of theft. This problem is presently being studied for theentire sector (1.10(d)) and remedial action would be implemented as a result ofthe study. EEEB expects to reduce such losses gradually to about 15% by 1987,as a result of the measures to be implemented (Annex 2.2). In 1979 gross percapita electricity consumption in Bogota was about 707 kWh (assuming a popula-tionL of about 5 million for the Bogota area), which is lower than gross percapita electricity consumption in other large cities in Latin America (Medellin,about 1,000 kWh; Panama City, more than 810 kWh; Buenos Aires, estimated at morethan 1,400 kWh).

4. THE PROGRAM AND THE PROJECT

Background

4.01 In accordance with the most recent updated study on economic ranking(prepared by ISA during the second semester of 1980), the least-cost generationdevelopment in the interconnected system would be the following:

RequiredPlant MW Completion Date 1/

Tasajero (Steam; ICEL) 150 1-1984Cerrejon II (Steam; CORELCA) 158 8-1984Guadalupe IV (Hydro; EPM) 216 10-1984Playas (Hydro; EPM) 200 6-1986Betania (Hydro; ICEL) 500 4-1986Guavio (Hydro; EEEB) 1,000 11-1987Urra (Hydro; CORELCA-ISA) 1,050 5-1988Patia (Hydro; ISA) 1,200 6-1989San Juan (Hydro; ISA) 1,500 12-1990

T7_ Source: ISA

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4.02 After San Carlos I and II (1,240 MW), the first stage of Guavio(initial capacity 1,000 MW, final capacity 1,600 MW) would be the secondlargest plant in the national system. It would be an integral part of theInterconnected System and is urgently needed to avoid severe rationing in thenational system in the late 1980s and early 1990s. (At present, power isbeing rationed an average of four hours per day in the Central System and thissituation is expected to persist, with various degrees of severity until 1983,when San Carlos I begins operations). The Government, ISA and its Share-holders, in consultation with the Bank decided to assign to EEEB the owner-ship and full responsibility for the construction of the Guavio HydroelectricPlant, which would be located close to Bogota in EEEB's area of influence.The shareholders of ISA will have absolute rights to buy 40% of the capacityand energy of the plant in exchange for financing 40% of the local cost of theinvestment (1.11(c), 4.13).

EEEB's Expansion Program

4.03 In the period 1981-1990 EEEB plans to expand its operations to serveabout 816,000 new customers, with its system reaching a peak demand of 2,532 MWand gross generation requirements of 13,718 GWh/a by 1990. EEEB's expansionprogram for the period 1981-1987 is based on the least-cost generation expan-sion program updated by ISA in 1980 and on subtransmission and distributionstudies carried out by EEEB, and it has been designed to meet (together withprojected electricity purchases from ISA, based upon EEEB's acquired rightsto buy part of ISA's plant output) gross generation requirements in the EEEBsystem and to connect the new consumers in the period. Capacity and energybalances for the EEEB system are shown in Annexes 4.1 and 4.2. As of December1980, EEEB's expansion program for the period 1981-1987 comprised the followingprojects:

Generation

(a) purchase from ISA of the Zipaquira IV thermal plant (Termozipa IV)which is to be completed in 1981;

(b) completion of the Mesitas hydroelectric facility in 1982;

(c) purchase from ISA of the Zipaquira V thermal plant (Termozipa V)which would be completed by 1983;

(d) completion of the Sesquile pump-station expansion in 1984;

(e) completion of the Sesquile dam reinforcement in 1985;

(f) raising of the Muna Dam height (initiation of construction in1982 and completion in 1985);

(g) construction of the first stage (1,000 MW) of the Guaviohydroelectric plant (initiation of construction in 1981 andcommissioning in 1987);

Transmission

(h) completion of the transmission components associated with theMesitas hydroelectric facility (about 100 km of 230-kV lines)in 1983;

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(i) transmission components associated with the Guavio hydroelectricplant including about 200 km of double-circuit 230-kV transmissionlines, the step-up substation at Guavio and four 230-kV bays at theCirco and Tunal substations in the future 230-kV Bogota Ring(initiation of construction in 1984 and commissioning in 1987);

Subtransmission and Distribution

(j) completion of ongoing works in 1981;

(k) completion of the Bogota Distribution Project (Loan 1807-CO)in 1984;

(1) a substransmission and distribution program (1985-1987);

(m) completion of the rural electrification program 1980-1985;

(n) part of a substransmission and distribution expansion program forthe period 1987-1990;

(o) part of a rural electrification program for the period 1986-1990;

Other Investments

(p) construction of a regional load-dispatch and telecommunicationscenter (initiation of construction in 1982 and commissioning in1985);

(q) construction of a maintenance shop (initiation of constructionin 1983 and completion in 1985);

(r) completion of the EEEB's new Headquarters Building in 1982;

(s) completion of construction of the Data Processing Center in 1985;

(t) general plant in the period 1981-1987; and

(u) studies and training.

4.04 The cost of the above 1981-1987 expansion program (Annex 4.3) excludinginterest during construction is estimated at about Col$203.8 billion in currentprices equivalent to about US$2,362 million in current prices. The foreigncost of the program would be about Col$95.6 billion or 47% (equivalent to aboutUS$1,141 million), and the local cost Col$108.2 billion or 53% (equivalentto about US$1,221 million) (5.09 and 5.10).

The ]'roject

4.05 EEEB's market expanded rapidly in the seventies. However, thecompany did not expand its generating facilities rapidly enough to keep pacewith demand. In 1977 EEEB initiated the construction of the El Paraiso and

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La Guaca hydroelectric plants (total capacity 600 MW) for the Mesitas project(under Loan 1628-CO), which would be completed in 1983. However this addi-tional capacity will not allow EEEB to meet incremental demand beyond 1986,even taking into account possible purchases from the interconnected system(Annexes 4.1 and 4.2).

4.06 The proposed project aims at (i) providing new capacity and energyneeded by EEEB and the rest of the National System to meet forecast demand;(ii) assisting EEEB to participate with the other ISA partners in the least-cost operation of the National System, as well as to improve its own efficiency;(iii) assisting EEEB in improving its maintenance practices through studiesand a training program for its technical staff; (iv) encouraging adequateenvironmental protection in the project area; (v) assisting EEEB in theexecution of the studies required to complete the assessment of the environ-mental impact of the Guavio hydroelectric plant; and (vi) promoting Govern-ment efforts to improve overall sector organization and to ensure sufficientaccess to local financing needed for the National Power Expansion Program.

Project Description

4.07 The proposed project would comprise:

(i) The Guavio hydroelectric p ant will be constructed on the Guavioriver with a 950 million m useful capacity r servoir. The annualaverage flow into the reservoir would be 72 m /s. The p ant,designed for a gross head of 1,100 m and a flow of 176 m /s wouldhave an initial capacity of 1,000 MW (5 units of 200 MW each) anda final capacity of 1,600 MW (addition of 3 units of 200 MW eachby the end of the century). The average annual generation for thefirst stage would be about 7,500 GWh in average-hydrology yearsand about 5,350 GWh in dry years. The annual generation wouldincrease marginally in the second stage. The plant would include:

(a) river diversion, rockfill dam (with impervious core) andspillway tunnels;

(b) intakes and diversion tunnels (about 4 km) to conduct watersof the Chivor and Batatas Rivers into the Guavio reservoir;

(c) pressure tunnel (about 15 km), underground power house andtransformer caverns with access tunnel (about 2 km), andtailrace tunnel (about 5 km);

(d) five generating units of 200 MW each to be located in theunderground power house;

(e) ancillary electromechanical equipment for the power house;

(f) a step-up substation, at Guavio, including five single-phasetransformer banks (to be located in an underground cavernparallel to the main cavern) and a 230-kV outdoor switchingstation;

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(g) two double-circuit 230-kV transmission lines to Bogota(about 200 circuit-km), and four 230 kV line bays at theCirco and Tunal substations in the Bogota 230-kV ring(these substations are at present operating at 115-kVand would be expanded and uprated to 230-kV by 1985); and

(h) infrastructure for the project, comprising about 107 kmof access and service roads (including equipment fortheir maintenance), about five bridges and about 37 km of115-kV transmission line and terminal substation.

(ii) EEEB's regional load-dispatch and telecommunication center (tofunction as a satellite of the national dispatch center underconstruction by ISA); and

(iii) consulting services for:

(a) design and procurement and supervision during constructionof the Guavio hydroelectric plant and associated 230-kVtransmission system;

(b) design, procurement, installation and supervision duringconstruction of EEEB's load-dispatch and telecommunicationcenter;

(c) studies to be carried out as a result of the recommendationsof the Environmental Reconnaissance study for Guavio; and

(d) study and implementation of a maintenance improvement programfor EEEB's generating plants.

(iv) Training Program for EEEB's technical staff including:

(a) training in Colombia and abroad for the staff which wouldoperate and maintain the EEEB's load-dispatch andtelecommunications center; and

(b) training for the staff who would be responsible for operatingand maintaining EEEB's generating plants.

Project Cost

4.08 The bids for the two main civil-works contracts, which were receivedshortly after the completion of the combined IBRD/IDB appraisal mission inDeceimber 1980, 1/ showed average prices significantly lower than the originallyestimated costs and, consequently, EEEB and INGETEC updated the project costestimate (Annex 4.4). The project cost in current prices (which is summarizedin the table below) excluding interest during construction, is estimated atabout US$1,053 million of which the total foreign cost would be about US$678million or 64% of the total cost. Interest during construction is estimatedat about US$250 million. Total financing requirements for the project amountto about US$1,303 million, of which US$928 million represents the foreigncomponent.

1/ Procurement procedures have been in accordance with Bank and IDB guidelines.

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Project Cost Summary

Local Foreign Total Local Foreign Total-------(Col$ million) ------- -------(US$ million)------

I. Engineeringand Adminis-tration 2,440.7 302.7 2,743.4 51.6 6.4 58.0

II. Infrastruc-ture andLand 600.7 430.4 1,031.1 12.7 9.1 21.8

III. Main CivilWorks 8,173.4 13,821.1 21,994.5 172.8 292.2 465.0

IV. Electro-mechanicalEquipment 222.3 4,214.4 4,436.7 4.7 89.1 93.8

V. TransmissionSystem 354.8 908.1 1,262.9 7.5 19.2 26.7

VI. Load-DispatchCenter 99.3 614.9 714.2 2.1 13.0 15.1

VII. Studies 14.2 4.7 18.9 0.3 0.1 0.4VIII. Training 9.5 33.1 42.6 0.2 0.7 0.9

Total Base Cost 1/ 11,914.9 20,329.4 32,244.3 251.9 429.8 681.7

IX. ContingenciesPhysical 1,892.0 2,861.7 4,753.7 40.0 60.5 100.5Price 14,563.1 37,283.9 51,847.0 83.0 187.9 270.9

Total 16,455.1 40,145.6 56,600.7 123.0 248.4 371.4

X. Total ProjectCost 28,370.0 60,475.0 88,845.0 374.9 678.2 1,053.1

XI. InterestDuring Con-struction - 23,755.3 23,755.3 - 250.0 250.0

XII. Total Financ-ing Require-ments 28,370.0 84,230.0 112,600.3 374.9 928.2 1,303.1

1/ 1980 prices.

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4.09 All base prices are as of December 1980. The aggregate cost ofengineering design, supervision and administration of the project representsabout 6% of the total project cost excluding interest during construction,which is reasonable. Physical contingencies adopted are 15% for the dam andassociated works, 20% for the underground works and for the load-dispatchcenter, 10% for the transmission component, and 10% for consulting services andthe training program. Price contingencies were calculated assuming that localinflation varies from 25% in 1981 to 14% in 1990 and foreign inflation from9.0 in 1981 to 6% in 1990. The average exchange rate was assumed to increasefrom, 47.30 Col$/US$ in 1980 to 125.05 Col$/US$ in 1988.

Project Financing

4.10 A detailed financing plan is set out in Annex 4.5. In brief,local currency requirements would be provided by EEEB (about US$255 million,or 60% of the local cost) and ISA (about US$150 million, 40% of the localcost). The foreign exchange cost would be financed as follows:

Amount % of Foreign % of(In Millions of US$) Exchange Requirements Total Requirements

Commercial Banks 340 36.6 26.1Suppliers 129 13.9 9.91DB 100 10.8 7.7World Bank 359 38.7 27.5

Total 928 100.0 71.2

Based upon extensive discussions with other external sources of finance, theabove represents the outer limit of cofinancing likely to be forthcoming,taking account of EEEB's total borrowing program over the period. However,a sine qua non for the high level of cofinancing projected would be EEEB'smaintaining tariffs high enough to ensure sound finances. EEEB's first venturein the capital market was in 1975 with a US$7.5 million loan from the FirstNational City Bank. Since then, it contracted three additional external loanstotalling US$93.9 million equivalent and is working on a further one for US$35million. Between 1981-1987, EEEB will need to mobilize about US$285 millionin external financing for its investment program over and above the cofinancingof the proposed project of US$340 million (5.11). Commercial banks/supplierswould finance 50.5% of the foreign exchange needs or 36% of the total projectrequirements, while IDB and the Bank combined, 49.5% of the foreign exchangeneeds or 35.2% of the total requirements for the project. The proposed Bankloan, would finance 27.5% of the total project requirements.

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4.11 The proposed Bank loan would be disbursed against:

Amount Financed100% of the foreign cost of: (US$ million)

(i) river diversion, dam and spillway tunnels, mainintake and initial part of the pressure tunnel,and intakes and diversion tunnels for the Chivorand Batatas rivers 255.0

(ii) infrastructure for the project, includingassociated maintenance equipment 15.0

(iii) ancillary electric and mechanical equipment forthe underground power house 26.9

(iv) construction of EEEB's load-dispatch center 22.0

(v) studies and a training program for EEEB's technicalstaff 1.4

50% of the total cost of:

(vii) consulting services for project design andsupervision, as of January 1, 1981 38.7

Total 359.0

4.12 The proposed US$100 million IDB loan would finance about 51% ofthe foreign cost of the underground waterways, underground caverns andaccess tunnel.

4.13 Suppliers' credits totalling about US$129 million would finance 85%of the foreign cost of the main generating equipment, power transformers and230-kY power cables, and of the 230-kV substation and transmission linesfor the project. EEEB's own cash generation is expected to finance someUS$225 million. The other ISA shareholders would contribute about US$150million equivalent to cover 40% of the local cost of Guavio (4.02).

4.14 The Bank would assist EEEB in arranging the cofinancing by externalcommercial banks of the remaining US$340 million. An IDB proposal to assistwith the co-financing of US$96 million (to finance the remaining 49% ofthe foreign cost of the underground waterways and caverns and access tunnel)was declined by the Government (IDB cofinancing requires Government guarantee,which is incompatible with Government policy not to guarantee commercial loansto decentralized agencies, in order to encourage prudent financial management).

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Engineering

4.15 The final feasibility study for the Guavio project, dated June 1978,is available in the Bank. The Guavio hydro facilities have been designed byINGETEC, one of the largest, most experienced and capable Colombian consultingfirms. The final feasibility report takes account of possible alternatives(dam location and height, capacities, etc.). The Bank engaged a geologistconsultant, Dr. Merritt (USA), who visited Colombia in September 1979 andreported favorably on project design and preparation. Pre-qualificationdocuments for the main civil works were issued in January 1980, biddingdocurnents by mid-1980 and the offers received in December 1980. EEEB hasretained INGETEC to assist in the preparation of designs and bidding documentsfor the transmission system and for the acquisition of the main generatingequipment, power transformers, and ancillary electric and mechanical equipmentfor Guavio, and to continue assisting in the design aspects until completionof the project. Supervision during construction would be carried out by otherconsulting firms, because the fiscal code for the District of Bogota proscribesusing the same consultants for design and supervision. This regulation isbeing observed with good results in the Mesitas project financed by theBank (Loan 1628-CO). Detailed engineering design, and supervision duringconstruction are estimated to require 16,750 and 15,300 man-months of con-sulting services and have costs of about US$32.3 million and US$24.1 millionin 1980 prices, respectively. The corresponding average man-month costswould be about US$1,900 and US$1,500 in 1980 prices. These costs, whichare estimated by INGETEC on the basis of experience with recent projects,are reasonable 1/.

4.16 The consulting services for the study to determine the finalcharacteristics, preliminary designs and final cost estimate for EEEB'sload--dispatch center are being financed under Loan 1807-CO. EEEB hired theconsulting firm Systems Control-Sistecom under satisfactory terms of reference.As agreed under Loan 1807-CO, the study, which is expected to be completed bythe end of 1981, would be sent to the Bank together with EEEB's proposals forits iimplementation, for review and comments. In the meantime, preliminarycost estimates and construction schedule for this item were prepared by EEEBon the basis of bids received for ISA's National Dispatch Center andfor EPM's satellite load-dispatch center (in both cases the studies werealso carried out by Systems Control-Sistecom), and are reasonable.

4.17 Engineering services for supervision during construction of EEEB'sload--dispatch center is estimated to require about 50 man-months of foreignconsulting services and 300 man-months of local consulting services andhave a total estimated cost of US$1.2 million. The corresponding averageman-month costs would be about US$12,000 (ranging between US$10,000 and15,000) and US$1,900 respectively.

1/ Both figures represent average billing per man-month in 1980 prices andreflect charges for services provided by professional staff, technicians,non-professional staff, overheads and fee.

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Studies

4.18 A study will be carried out to assess the improvements needed inEEEB's present operation and maintenance planning and practices in generatingplants. The study will also recommend the necessary training required byEEEB's staff in charge of operation and maintenance of generating plants. Theconsultants for this study, which is estimated to cost about US$0.3 million(foreign cost US$0.1 million) will be engaged by EEEB under terms and condi-tions satisfactory to the Bank by June 30, 1982. The study will require some30 man-month of consulting services. The average man-month cost will be aboutUS$10,000. The study will be completed by April 30, 1983 and sent to the Bankfor comments before starting its implementation by October 31, 1983.

4.19 Consulting services will also be engaged for the studies needed tocomplete the analysis of the environmental impact of the project, by December31, 1981. The studies will be completed by December 31, 1982 (4.29), andtheir recommendations will be implemented starting June 30, 1983. The cost ofthis study has been preliminarily estimated at US$0.6 million in currentprices (foreign cost US$0.2 million). The study will require about 60 man-months of which 20 will correspond to foreign consultants. The averageforeign man-month cost will be about US$10,000. The studies are expected tobe completed not later than December 31, 1982.

Training

4.20 A training program will enhance the skills of operation and mainte-nance personnel for EEEB's generating plants. This training program will bedesigned taking into account the recommendations of the operation and mainte-nance study (4.18). The cost of such program, which will be completed byApril 30, 1985, has been preliminarily estimated at US$0.4 million in currentprices (foreign cost US$0.2 million).

4.21 Training will also be provided to EEEB's staff for the operation ofits proposed load-dispatch center. This program will be provided by theload-dispatch center supplier and its terms and conditions will be discussedbetween EEEB and the Bank together with the bidding documents for the load-dispatch center. This program is estimated to cost about US$1.1 million incurrent prices (foreign cost about US$0.9 million.

Project Organization and Implementation

4.22 The Guavio hydroelectric plant, the 230-kV transmission system,and the EEEB's load dispatch center will be constructed by contractors underthe supervision of consultants. Construction is expected to start inMay 1981. The project which would take some 7 years to construct, wouldbe completed late in 1987. A detailed project implementation schedule isincluded in Annex 4.6.

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4.23 EEEB, which is responsible for coordinating the implementationof the project, has created to this effect a Project Management Unit (PMU).The nineteen remaining staff positions of the twenty-five required by the PMUhave been recently approved by EEEB's Board. So far, six posts had beenstaffed. During negotiations EEEB confirmed that experienced staff andexperts will be appointed in line with project requirements.

4.24 EEEB received by the end of January from Instituto Agustin Codazzithe list and estimated values of lands to be purchased for construction ofthe access roads, and EEEB is now progressing satisfactorily in acquiring it.Since only some 250 scattered families live in the entire project area, EEEBwill simply purchase the land; resettlement would not be necessary. EEEB isseekirng a firm support from both the local and regional governments, tofacilitate timely acquisition. By June 1981, EEEB expects to obtain all theland for the access roads and main work areas of the project; if delays wouldbe encountered, project start-up would have to be delayed.

Procurement

4.25 All project items to be financed by the Bank will be procuredunder international competitive bidding (ICB), in accordance with Bank guide-lines. EEEB has requested a margin of preference in accordance with Bankguidelines for goods manufactured in Colombia; such expenditures wouldnot exceed an estimated US$6 million. The IDB-financed project items wouldbe procured in accordance with IDB guidelines. For those items to be financedunder suppliers' credits, EEEB would also use ICB. All consultants serviceswill be obtained under terms and conditions satisfactory to the Bank.

Advanced Contracting and Retroactive Financing

4.26 Bids for the main civil works contracts, the foreign exchange forwhich would be financed by the Bank and IDB, were opened on 12/12/80 (4.08)and EEEB awarded the two contracts in April 1981 to permit commencement ofthe works not later than May 1981. Contract signing and initial expenditureswould then take place before Board presentation of the Bank loan. Consideringthat these contracts include the construction of access roads, the rather longperiod of execution of the project (about 7 years), the shortage of generationcapacity existing in Colombia, and the large project cost increases, as wellas the adverse impact on the economy, which would result as a consequence ofany delays in the completion of the project, the Bank did not object to theadvanced contracting of the main civil works by EEEB. However, EEEB has beenadvised on the risks of advanced contracting in the event the Bank loan is notmade or is delayed. Retroactive financing would be required for the downpayments for the dam and civil-works contracts including access roads,as of January 1, 1981. In the aggregate, retroactive financing would notexceed some US$36 million, equivalent to 10% of the proposed Bank loan.

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Disbursement

4.27 Disbursements from the loan account will be fully documented andwould be made for:

(a) 66% of total expenditures for the civil works contract includingthe river diversion, dam, spillway tunnels and associated works,which is estimated to represent the foreign cost of such item;

(b) 100% of foreign expenditures and 100% of the ex-factory costof ancillary electro-mechanical equipment for the powerhouse(which is not suitable for suppliers' credits);

(c) 100% of the foreign cost of the load-dispatch and telecommunicationcenter and associated design consulting services; and 100% ofthe foreign cost of consulting services for the studies and trainingincluded in the project; and

(d) 50% of the total expenditures for consulting services forengineering design and supervision for the Guavio hydroelectricplant including the associated transmission system, and forsupervision during construction of EEEB's load-dispatch andtelecommunication center.

4.28 Annex 4.7 shows the estimated disbursements from the proposed Bankloan. The closing date of the proposed loan will be May 30, 1988, six monthsafter completion of the project in November 30, 1987.

Environment

4.29 A preliminary comprehensive environmental reconnaissance on theproject was received in the Bank before negotiations. This report identifiedthe priority aspects which will be studied in detail under the Final Environ-mental Study to be partially financed by the Bank (4.19). During negotiationsagreement was reached that the conclusions and recommendations of the studywill be discussed with the Bank before starting their implementation byJune 30, 1983.

Project Risks

4.30 The execution of the project does not involve any major risks otherthan those normally associated with the construction of large dams and under-ground works. INGETEC, the firm responsible for project design is one of themost experienced and capable Colombian consulting firms and all appropriateprecautions have been provided for. The fact that supervision duringconstruction would be carried out by a different consulting firm does notinvolve any risks because such procedure has given good results in previousprojects (4.11). EEEB has experience in managing and coordinating largeprojects. Assuming that the necessary land would be acquired in a timelymanner (4.24) and that the PMU would be appropriately staffed (4.23), theproject is expected to be carried out as scheduled.

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5. FINANCE

Suimary

5.01 Over its 20-year relationship with the Bank, EEEB has maintained asound financial position. However, EEEB's 1979-1980 financial situationhas been unusually difficult, as a consequence of three factors. First, overthe last five years there has been a trend for operating costs to rise at afaster pace than tariffs, despite substantial tariff adjustments in real terms.The two other circumstances, beyond the company's control, have been delays inreceiving authorization for requested tariff increases in 1980 and, insufficientavailability of local financing in the same year. The extra-fiscal measurestaken in conjunction with Bank-financed projects, including revaluation ofassets, for monitoring financial performance, have considerably strengthenedEEEB's financial structure. EEEB's 1981-1987 investment program includingits own construction program, investments in ISA, interest during constructionand requirements for working capital, amounts to MCol$327,081, of whichMCol$88,845 or 27.2% correspond to the proposed Guavio project. EEEB's netinternal cash generation would finance MCol$152,266 or 46.5% of the total re-quirements of the 1981-1987 program; ISA's contributions for Guavio would fundMCol$12,650 or 3.9% of the total; and the remaining 49.6% would be covered byloans amounting to MCol$162,165. The present financial projections are basedon EEEB's plan of tariff increases and on external and domestic inflationassumptions. Net operating income with the above plan is expected to produceannual rates of return on fully revalued assets ranging from 15.3% in 1981 to20.5% in 1988 and the company is expected to maintain an adequate financialposition throughout the projection period.

Earnings History

5.02 Over its 20-year relationship with the Bank, EEEB has maintaineda sound financial position. During the period 1969-1978 its internal cashgeneration provided more than 50% of annual investments on average,including substantial contributions to ISA. This may be attributed inpart to the high density of its market and low-cost facilities, giventhe area's geographic advantages for hydro generation. The balance ofthe company's investment funds has been obtained through borrowings,generally at reasonable cost; no Government funding has been required.

5.03 EEEB's 1979/1980 financial situation has been unusually difficult.This is a consequence of the tariff/operating cost trend of the last fiveyear period and of two other developments in 1980, beyond the company'scontrol: delays in obtaining authorization for timely tariff increasesand very recently, lack of local financing. The tariff increases havenot been sufficient to offset the increasing operating costs: EEEB'stariff has increased rapidly in current USO (from 1.2 per kWh in 1976 toapproximately 2.7 in 1979 --3.1 USJ/kWh is estimated for 1980--) and ithas also increased in real terms, 1/ 43% in the 1976-1980 period, under a

1/ Deflated on the basis of the Colombian blue collar consumer price index.

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program of fixad monthly increases. 1/ However, mainly because of thegrowing participation of the energy purchased from ISA in EEEB's totalenergy sold, during that period, operating costs have increased at afaster pace than tariffs, as shown below (in real prices indexes):

1976 1978 1979 1980(estimated)

Tariffs 100 126 141 143Operating costs 100 137 146 144

This has resulted in an estimated foregone income (assuming tariff in-creases similar to operating costs increases) aggregating MCol$1,070 inend- 1980 prices, approximately equivalent to EEEB's arrears to ISA asof December 31, 1980. Furthermore, during 1980, the local authoritieswere reluctant to support in full the tariff increase request of EEEB'smanagement due to the considerable increments in charges for otherpublic services in the city of Bogota, combined with inflationarypressures and a slackening of economic activity. These facts did notcause any serious constraint to EEEB finances until mid-1980, whenfinancial difficulties began to slow down the normal flow of itsconstruction program and delay the payments to ISA (capital contributionsand energy bills). In addition, the limited availability of domesticfinancing brought about, during 1980, shortfalls in planned localborrowing. National monetary policies aimed at dampening inflationseverely constrained the domestic banking system. By mid-1980 theGovernment realized the impact of these policies on urgently neededpower sector expansion, and reactivated the Electricity Development Fund(FDE), as an interim measure until long-term local financing arrangementscould be established. However, it was not until late in the year thatEEEB was able to obtain disbursements from FDE.

5.04 The 12% adjusted average rate of return covenant under the BogotaDistribution project (Loan 1807-CO) for the years 1979 and 1980 exceedsthe actual rates of return for those years, 8.2% and 9.2% (estimated),respectively, and the estimated 1980 adjusted average was 5.5% (in accor-dance with the existing agreements for calculating the rate of return,1979 shortfall has been carried forward to 1980 operating income). Never-theless, at end of 1979, EEEB's debt/equity ratio was 34/66, calculatedon the basis of revalued assets, and the debt service coverage was 1.7.The company's working capital has been adequate in recent years; thecurrent ratio has exceeded 1.4 since 1974 and reached 2.0 in 1978. Althoughaccounts receivable as a percentage of annual sales had grown to 27% bythe end of 1976, they decreased to 22% in 1979, which is somewhat higherthan the 19% target agreed for that year under the Mesitas and BogotaDistribution loans (2.07).

1/ The present one year program (July 1980-June 1981) consists of an 8%flat increase (implemented in July 1980) and monthly average increasesof 2.3%. (5.06).

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Rate Base

5.05 For public accounting purposes, Colombia's public utility regu-latory law has not allowed full revaluation of fixed assets but onlyrevaluation to match the revaluation of outstanding foreign debt forchanges in exchange rates 1/. To reflect the international and domesticinflation, an agreed fixed value of EEEB's assets and accumulated depre-ciation was assumed as of December 31, 1976 and, starting from this date, EEEBrevalues its assets quarterly by the Colombian blue collar cost of livingindex for the Bank's purpose of monitoring its financial performance. Underthe Mesitas and Bogota Distribution Projects, EEEB agreed to commissiona consultant's study to establish the value of its assets. The study wasto be completed and made available to the Bank by March 31, 1981, to discussthe advisability of revising the gross and net value of assets, the valuationmethodology and the rate of return requirement. However, it took longer thanexpected to select consultants (Gilbert and Associates in consortium withSalgado Melendez) who were hired at the end of 1980. Because there is nourgency attached to revising the asset value, the Bank has extended the abovedates as follows: by December 31, 1981, the study would be completed andsubmitted to the Bank for comments and by March 31, 1982 discussion with theBank on the findings would take place.

Tariff Structure

5.06 Although EEEB's average rate has improved significantly and isexpected to continue to improve (5.03, 5.11), its tariff structure lacksappropriate balance among major categories of consumers. Under the BogotaDistribution Project, EEEB agreed to prepare by April 30, 1980 and putinto effect by June 30, 1980, a program satisfactory to the Bank to correctthe tariff structure, taking into account the conclusions of the ongoingcountry-wide tariff study referred to in Sections 5.10 of Loans 1582-CO1725-CO. The purpose of the program is to revise gradually the structureof EEEB's tariffs and rates such that, for each category of consumers(residential, industrial, commercial and governmental) the aggregate tariffsand rates charged to the category, as a whole, will cover approximately thecost of the service received by each category. The revision will also takeinto account the income redistribution policies of the Government benefittingthe lowest-income consumers. Also, EEEB agreed to implement such programby June 30, 1980. Because the completion of the country-wide study wasdelayed, and taking into account the possibility that the study would befurther delayed (1.10 (c)), EEEB agreed to implement an interim programof adjustments, with the aim of bringing the average residential tariffto parity with the average industrial tariff over the period ending nolater than October 1, 1982. However, when the tariff study becomes

1/ The Office of the Comptroller General of Colombia has recently pres-cribed by Resolution No. 8345 of July 30, 1980 that commissions shallbe set up in public entities to identify a more realistic procedurefor asset revaluation.

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available, the interim program is to be superseded by one based on the

findings of the study. An important step toward the agreed objectivewas taken in July 1980, with the 1980-1981 program of tariff increases

authorized by JNT and implemented by EEEB. The features of the program

are:

IncreasesFlat July 1980 Monthly

(%) Col$ (%)Industrial 10 2.2

Commercial 10 2.2

Residential1-200 kWh 20 0.01

201-400 kWh 16 0.015401-600 kWh 16 0.02

601-800 kWh 5 2.6801-1,200 kWh 6 2.9

1,201-1,600 kWh 8 3.01,601-2,000 kWh 10 3.02,000- 12 3.0

Financial Structure

5.07 As a result of the extra-fiscal measures taken under the

San Carlos and Mesitas loans, including revaluation of assets for

monitoring financial performance, EEEB's financial structure has beenstrengthened. As of December 31, 1979, EEEB's capitalization was:

MCol$ %

Capital 100 18Accumulated Surplus 4,944 48Capital Revaluation 13,133 48

Total Equity 18,177 66

Long-Term debt 6,040 22Current Liabilities 2,279 8

Total Liabilities 8,319 30

Pension and Other Liability Reserves 1,108 4

Total 27,604 100

5.08 EEEB's principal creditor is the Bank; in 1979 debt under its

first four loans from the Bank amounted to MCol$2,986 (56% of total long-term debt). The second largest creditor is the IDB with MCol$1,066 (20%

of total long-term debt), followed by two private banks: The Merban Corp.MCol$352 (7%) and First National City Bank MCol$90 (2%) (Annex 5.5.)The pension and other liability reserves (noncurrent and contingentliabilities) are estimated at MCol$1,108.

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Investment and Financing Plans

5.09 EEEB's 1981-1987 investment program including its own constructionprogram (4.03), investments in ISA, interest during construction and re-quirements for working capital, amounts to MCol$327,081, of which MCol$88,845or 27.2% correspond to the proposed Guavio project; the ongoing works, whichcomprise mainly, the Mesitas and Bogota Distribution projects partiallyfinanced by Loans 1628-CO and 1708-CO, amount to MCol$34,125 or 10.4% ofthe total; other future construction, mainly including the purchase ofTennozipa IV and V from ISA, and urban and rural distribution projects, callsfor an investment of MCol$80,887 or 24.7% of the total. Capital and bondcontributions to to ISA amount to MCol$62,845 or 19.2% of the total, andthe working capital requirements to MCol$15,024 or 4.6% of the total. Theinvestment program and financing plan is summarized on the next page and shownin detail in Annex 5.

5.10 EEEB's net internal cash generation would finance MCol$152,266or 46.5% of the total requirements of the 1981-1987 program; ISA's contri-butions for Guavio would fund MCol$12,650 or 3.9% of the total; and theremaining 49.6% would be covered by loans amounting to MCol$162,165. Ofthis figure MCol$14,976 comes from undisbursed proceeds of existing loans,including MCol$11,678 from the 1628-CO and 1708-CO loans. The Guavio projectwould require the following loans: (a) the proposed loan: MCol$29,555; (b)a proposed IDB loan: MCol$6,914; (c) cofinancing loans: MCol$32,438; and(d) suppliers credits: MCol$12,366. Other future loans would be requiredfor the rest of the program 1981-1987: (a) MCol$26,461 from internationalfinancing institutions, commercial banks and suppliers; (b) MCol$11,355froma ISA 1/ for financing the purchase of Termozipa IV and V; and (c)MCoL$28,100 from both the PEFF (5.13), which is currently being set up by theGovernment, and local commercial banks. Assuming adequate tariff levels aremaintained, it is reasonable to expect that EEEB will be able, with majorefforts on its part and Bank assistance, to obtain the financing estimatedabove in view of its present financial position, its planned tariff increases,Government support and the interest shown by commercial external lenders inprojects supported by the Bank. As an indication of availability of adequatedomestic financing, EEEB has provided the Bank, prior to negotiations, with asatisfactory plan to finance its 1981 construction program. The effectivenessof the proposed loan would be conditional upon receiving evidence thatsatisfactory arrangements have been made for the financing the balance ofEEEB's Investment Program requirements for the period 1982-1983.

1/ One ISA four year loan (local cost component) and transferenceof two external loans.

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PROPOSED FINANCING PLAN 1981-1987

Col$ US$ Percentage 1/(Millions of Current)

Requirements of Funds

Construction Program- Ongoing Works 34,125 518.2 10.4- Proposed Project 88,845 1,053.1 27.2- Other 80,887 791.4 24.7

Interest During Construction 45,355 503.1 13.9

Sub-total 249,212 2,865.8 76.2

Investment in ISA & otherlong-term investments 62,845 662.0 19.2Increase in Working Capital 15,024 164.6 4.6

Total 327,081 3,692.4 100.0

Sources of Funds

Net Operating Income 179,963 1,889.3Depreciation 43,980 480.2Liability Reserves(non-cash expenses) 5,282 60.1

Sub-total 229,225 2,429.6

Less: Debt Service (excludinginterest during construction) 76,959 822.7

Net Internal Cash Generation 152,266 1,606.9 46.5ISA Contributions 12,650 154.7 3.9Borrowings:Existing 14,976 254.0 4.6GuavioProposed IBRD Loan 29,555 359.0 9.0Proposed IDB Loan 6,914 100.0 2.1Cofinancing 32,438 339.8 9.9Suppliers 12,366 129.0 3.8Local Banks and PEFF 4,023 47.0 1.2

Local Banks and PEFF 24,077 281.3 7.4Other Future 26,461 283.2 8.1ISA - Termozipa 11,355 137.5 3.5

Total Borrowings 162,165 1,930.8 49.6

TOTAL 327,081 3,692.4 100.0

1/ Percentages of MCol$.

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5.11 EEEB would generate sufficient internal cash which, together withISA's contribution and planned borrowings, would enable timely carrying outof the proposed project, as well as the balance of EEEB's 1981-1987 invest-ment program. EEEB plans a three year (1981-1983) program of tariff increasesrepresenting an estimated increase in real terms -for each year over thepreceeding year's average- of about 20% for each year. The three year plan,which has been approved by EEEB's Board and authorized by JNT, is being putinto effect in the present April-May 1981 billing period. The tariff adjust-ment will increase the yearly average for 1981, and subsequently for 1982 and1983, by about 50% in nominal terms; for 1981 this comprises a one-time, flat16.5% increase plus monthly increments of 2.37%. 1/

5.12 ISA's share of local cost (40%) for the Guavio project wouldbe provided to EEEB on appropriate terms and conditions based upon a schedulereflecting project requirements. 2/ In return for participation in theinvestment through the purchase of "Guavio Participations", 3/ ISA willacquire, on behalf of its shareholders, absolute rights to buy 40% of Guavio'spower and capacity (at the purchase price established for bulk power transfersin the interconnected system), and will share in the financial return on theoperation of the facility. To ensure that a suitable framework for this wouldbe concretized in a timely fashion, EEEB and ISA, before negotiations, workedout the basic features of their collaboration. These include an estimatedschedule of ISA contributions, the associated obligations and rights, thefinancial instruments to be used and a method by which Guavio profits will becalculated. Prior to loan effectiveness, the contractual arrangements,satisfactory to the Bank, on "Guavio Participations" would be finalized.

5.13 Sufficient availability of local financing would be needed tocover the balance of funds required for the program. Since the Govern-ment precludes the use of national budgetary resources for power invest-ments (except for ICEL and CORELCA), a rising need has emerged for financingpart of the increasing share of local components of the construction programs,that cannot be fully financed through tariff action. However, because of thelimited capital market in Colombia and the Government's contractionary mone-tary policies aimed at dampening inflation, it has been difficult for thepower companies to mobilize sufficient domestic resources. Over the last

1/ The nominal tariff increases assumed in the financial forecast are slightlylower than the increases approved by JNT.

2/ Sector finances were analyzed in detail during a post-appraisal missionin January-February 1981 to ensure the feasibility of ISA's shareholders'contributions to the financing of Guavio (5.11 and 5.18 to 5.24).

3/ EEEB, which is wholly owned by the Municipality of Bogota, does nothave legal authority to issue shares.

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year, this financing shortage slowed construction and presented cash flowproblems for most of the companies and particularly for EEEB. To overcomethis local financial bottleneck, the Government has been taking determinedaction to facilitate the sector's access to financing sources, including thesetting up of a PEFF (1.29) to ensure that the heavy program of future con-struction will be carried out without significant delay. Because access tosources of local currency financing is essential for the carrying out ofEEEB's investment program, including the proposed project, the Government hasconfirmed that the PEFF will be established by January 1, 1982, to complementinternally-generated cash for the ongoing National Power Expansion Program,and that it would take all necessary measures to ensure EEEB access to allfinancing required for the project, as well as for the balance of itsInvestment Program.

Future Finances

5.14 Present financial projections (Annex 5) are based on: (a) theupdated assumptions for inflation and rate of exchange devaluation (4.09);(b) the energy balance agreed by ISA and the shareholders in October 1980(1.21); and (c) the EEEB's plan of tariff increases (5.11), which assumesthe following rates of nominal increases: 1981 47.5%; 1982 to 1986: 31.4%(about 2.3% per month); and 14% (about 1.1% per month) in 1987 and there-after. The financial forecast assumes a Bank loan of MUS$359 for theproposed project with an interest rate of 9.6% and a term of 17 yearsincluding 4 year grace period.

5.15 EEEB's net operating income with the above plan is expected toproduce annual rates on fully revalued assets ranging from 15.3% in 1981to 20.5% in 1988 (Annex 5.1). The unusually high rates of return resultfrom the large internal generation of funds needed as a consequence of:(a) EEEB's heavy investment program; (b) the present limited supply oflocal financing from the domestic capital market and banking system topublic utility companies; and (c) the amount of financing anticipated tobe available from the PEFF during its first five-years of operation. Toassure the internal cash generation needed during the period 1981-1987, duringnegotiations EEEB agreed that it would generate from its operations 35% oftotal investment requirements in each of the years 1982 to 1984 and 55% duringeach of 1985 to 1987. This would be consistent with the above rates ofreturn. However, the 14% rate of return covenanted for 1981 and thereafterunder the Bogota Distribution, will be repeated for the proposed loan becauseof the difficulties that could be engendered with respect to future tariffincreases by covenanting higher rates of return. The methods for calculatingthe rate of return and for monitoring and implementing required adjustments oftariffs, (used in the quarterly financial reports "On the Adequacy of Tariffsand Cash Generation"--5.16--), both covenanted under Bogota Distribution, willbe repeated for the proposed loan.

- 38 -

5.16 Under the Mesitas and Bogota Distribution loans, EEEB agreedto furnish to the Bank quarterly financial reports on cash generation,rate of return and adequacy of its tariffs; these covenants, includingthe provisions for submitting semi-annual financial forecasts, will berepeated for the proposed loan. During negotiations agreement was reachedthat the investment limitation covenanted under the Bogota Distribution loanwill be amended as follows: EEEB will not: (a) construct generatingplant exceeding 100 MW unless economically justified and adequately funded;(b) incur expenditures for investments not included in EEEB's InvestmentProgram aggregating annually in excess of 1% of net revalued fixed assets inoperation; or (c) incur investments unrelated to the power sector.

5.17 EEEB's financial position as measured by the debt/equity ratio(34/66 in 1979) would be maintained at safe levels throughout the projectedperiod (Annex 5.1); despite the borrowings required for construction ofMesitas, Bogota Distribution, Guavio and other investments, it would notexceed 51/49. Debt service coverage on an annual basis would not descendunder 1.5, which is satisfactory. The debt service limitation covenantedunder Bogota Distribution loan will be repeated for the proposed loan.

Sector Finances

5.18 Introduction: The analysis of the power sector finances is basedfor the first time, on consolidated financial projections (Annex 5.10)which were carried out by ISA, as the sector planning agency, and its share-holders, with Bank assistance, in the period May 1980 to February 1981, 1/to demonstrate the viability of the "Acuerdo de Cali" 2/ proposal and toensure the feasibility of ISA's shareholders' contributions to the financingof Guavio. These consolidated projections, aiming at displaying the financialoutlook for the 1980-1990 period, are preliminary and have to be deemed as abasis-for-discussion document requiring further analysis among the electricsector entities and the Government.

5.19 Methodology: The working group developed a methodology for theelectric sector financial consolidation, which consists of the arrangement andaggregation of the individual financial statements of the Colombian electriccompanies, forecasted on a homogeneous basis. The intercompany accounts andtransactions that cancell out each other have been compensated for or eliminatedin two steps: (a) ICEL and CORELCA and its "electrificadoras"; and (b) ISA andits shareholders. Several simplifications for correcting different accountingor projecting approaches have been used for calculating some global items (i.e.purchased energy, other operating costs, non operating income, etc); therefore

1/ This report includes financial projections finished by January 26, 1981.Subsequently, EEEB's and CORELCA's financial projections have been modifiedfor the Guavio and Village Electrification Staff Appraisal Reports.

2/ Present agreement on future plant ownership allocation (October 1979)which modifies the previous "Acuerdo de Sochagota" (1.11).

- 39 -

some consolidated financial items may differ slightly from the individualoriginal statements. These adjustments grant the consolidation an acceptabledegree of uniformity and coherence giving reasonable validity to the findings.However, minor errors may subsist.

5.20 Basic projection parameters were agreed among the Bank, ISA andits shareholders during May to October 1980. The main concepts have beenapplied consistently and are summarized: (a) energy balance: based on pro-jected demand, sector expansion and generation programs, energy interchanges,tariff for interchanges in the interconnected system, commissioning schedules,construction programs, 1/ etc.; (b) expected international and domesticinflation rates and rates of exchange; (c) annual asset revaluation using theexpected domestic inflation rates; (d) tariff increases projected individuallyby each company, according to its particular financial situation; the nominalaverage increase resulting for the sector is 35% per annum for 1980-1984and 16% per annum per 1984-1990; (e) depreciations, operating costs andworking capital requirements have been estimated with adequate projectioncriteria based on the recent historic experience; (f) capital contributionsfrom national budgetary resources to ICEL, CORELCA, and ISA (through CORELCAfor the 500-kV Interconnection); (g) reasonable availability of externalfinancing from international institutions, commercial banks and suppliersfor foreign components of construction programs; (h) limited availability oflocal financing from: (i) FONADE (studies), (ii) "Fondo de Desarrollo Electrico"(refinancing of long-term debt), and (iii) the PEFF (local component ofconstruction programs).

5.21 The electric companies, except ICEL, forecast their financialprojections according to methodologies, formats and timing agreed with theBank under San Carlos I Loan 1582-CO; financial planning offices and trainedstaff regularly prepare such financial projections as well as other financialmonitoring reports on rate of return and adequacy of tariffs. On thisoccasion, for the first time, ICEL (having no financial planning body in itsmanagement organization) has made an important step towards financial planningby projecting its financial statements as well as the financial statements ofits "electrificadoras". Nevertheless, some of ICEL's projection assumptionsshould be further reviewed and discussed with ISA and DNP, especially thoserelated to estimated capital contributions from the national budget andconstruction programs.

1/ Under the ongoing program, EEEB would construct and own the Guavio Plant,with 40% of its output guaranteed to ISA; the Betania facility (500 MW)would be owned by ICEL, with 50% of its generation allocated to ISA.Playas (200 MW) would be the property of EPM, and Urra (1000 MW) would beowned jointly by CORELCA and ISA.

- 40 -

5.22 Preliminary Findings: The investment program and financing plan for1980-1984 that resulted from this exercise is as follows:

MCol$ Percentages

Construction Program 385,144Interest during construction (I.D.C.) 37,677

422,821 93Other Investments 504 -Working Capital 30,158 7

453,483 100

Gross Internal Generation 226,454Debt Service (excluding I.D.C.) 111.115Net Internal Contribution 115,339 25Capital Contributions 103,561 23Borrowings: 234,583 52

External 213,582 47Domestic 21.001 5

453,483 100

5.23 The financing plan referred to above shows: (a) net internalgeneration of funds of 25% 1/ resulting from a sharp and sustained tariffaction (10% per annum real increase over the period); starting from the presenttariff levels, strong measures should be taken to ensure that tariff increasesare to reach this target; (b) capital contributions from the national budget(maLinly to ICEL and CORELCA) 23%; this estimate on the capital contributionis higher than the one originally foreseen by ISA and DNP and implies a heavyresources allocation from the national budget; and (c) borrowing 52% (foreign47%:--financing the foreign costs of the construction program--and domestic 5%).

5.24 Because of the importance of the contributions of ISA and itsshareholders to the project financing plan, during negotiations, agreementto this effect was reached (between the Bank and the companies--ISA, EEEB,EPM, CVC, ICEL and CORELCA--) through a draft Sponsors' Agreement (5.12). Inaddlition, to ensure that ISA and its shareholders will be able to meet theirfinancial commitments to the project without compromising their other finan-cial obligations, the Sponsors' Agreement also includes suitable financialperformance indicators as follows: (a) EPM: those covenanted under thePlayas loan 1953-CO; (b) ISA and CVC: those covenanted under the San CarlosII loan 1725-CO; (c) CORELCA: those agreed under the Village Electrificationproject. ICEL's obligations will continue to be covered by Government con-tr:ibutions from the national budget. However, the Sponsors' Agreement willprovide for reorganization of ICEL (1.12) which is expected to enable the ICELgroup to evolve gradually into financially viable and operationally competentenltities.

1/ The 1980 financing structure of the electric sector is: net internalgeneration 7%; capital contributions mainly from national budget 27%;borrowing 66% (foreign 53 and domestic 13%).

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6. ECONOMIC ANALYSIS

Least-Cost Solution

6.01 ISA prepared in 1977 a first report to establish the least-costexpansion for the sector for the period 1984-1988, 1/ on the basis of theeconomic comparison of least-incremental costs for several alternativeexpansion programs, including thermal plants (both fuel-oil and coal-firedsteam units), gas turbines and hydroelectric projects (San Carlos IIappraisal report No. 2464a-CO). The alternative expansion programs weredesigned to meet the sector energy and peak demand requirements through 1990.The studies are carried out using a model with stochastic variables for bothhydrology and demand, and with the restriction that under adverse hydro-logical conditions occurring less than once in 20 years, energy requirementswould not have to be met. The operation of the system is then simulated throughcomputer models to estimate the operational costs of each alternative programand to compute the probability for the program of not meeting the systemrequirements. Adjustments are introduced to ensure that capacity deficitswould have a probability of occurrence of less than 5% in any one year of theperiod. The alternative program representing the least-cost alternative isthen selected as the System Expansion Program, representing the least netpresent value of all the costs associated to it, discounted at 11% (whichrepresents the estimated opportunity cost of capital in Colombia). Sensi-tivity analysis of the program costs to the discount rate (10% and 12%)and to fuel prices (plus minus 20%) do not show any substantial changes inthe merit order of the best and second-best alternatives. The analysis alsoshows that the results are insensitive to a reasonable range in variation ofthe standard conversion factor (corresponding to the shadow-price exchangerate). Also, the results are insensitive to the use of conversion factorssince neither the timing of individual plants within a proposed expansionprogram, nor the ranking of the several alternative programs are affectedwhether conversion factors are or are not used. Since 1977, ISA annuallyreviews and revises if necessary the least-cost expansion program for thesector. The latest revision (1980) has introduced only minor changes tothe commissioning dates of the proposed projects but has not changed thesequence of implementation of the hydroplants proposed by previous programs.Such sequence includes in the same order, Guadalupe IV (Loan 1868-CO),Betania (being constructed by ICEL), Playas (Loan 1953-CO), Guavio andUrra (4.01).

Return on Investment

6.02 The return on investment was calculated as the discount rateequalizing the present values of the streams of benefits and costs associatedwith EEEB's 1981-90 development program of which the Bank project is a part

1/ "Verficacion y actualizacion del programa de expansion del sistema inter-conectado, periodo 1984-88; diciembre 1978" (subsequently partially amendedby several reports for updating and to justify emergency programs).

- 42 -

and cannot be reasonably segregated. In addition to the project, EEEB'sprogram includes transmission, subtransmission and distribution expansion(4.03). EEEB's transmission program has been designed by INGETEC. Thesubtransmission and distribution programs have been designed by EEEB onthe basis of the 1981-90 load forecast. The subtransmission and distri-bution program for the period 1980-82 is being financed by the Bank underLoan 1807-CO. EEEB hired the consulting firm Gilbert and Associates toassist the company in reviewing and revising if necessary the subtransmissionancl distribution expansion after 1982 and to prepare a Master Plan to coverup to the year 2000.

6.03 The cost streams comprise the capital costs of this program andincremental operational and maintenance cost related to the incrementalsales associated with the program. These costs were converted to borderprices using weighted average conversion factors for individual local costcomponents (materials, machinery, equipment, labor, consumables and such).As a proxy for benefits, revenues were used, derived from incremental salesassociated with the program and average 1988 annual rates, deflated to 1980and adjusted to border prices by the standard conversion factor (Annex 6.1).

6.04 On this basis, the return on investment is about 15.0% (Annex 6.1),which compares favorably with the opportunity cost of capital for Colombia,estimated to be 11%.

6.05 A sensitivity analysis was carried out to estimate the impact onthe internal financial return of possible changes in cost and revenues.These are summarized below:

Rate of Return on Investment Program (%)

Benefits85% 100% 11%

Cost

100% 11 15 17

115% 10 12 15

If the cost of the program increases by 15%, the rate of return would be about12%. If the program costs do not increase but benefits are 15% lower thanestimated, the return would be about 11%. If the program costs increase by15% and the benefits decrease by 15% the return on the investment program wouldbe -about 10%. The equalizing rates obtained understate the real economic rateof return of EEEB's investment program since revenues from electricity sales

do not fully reflect all benefits to society.

- 43 -

7. AGREEMENTS REACHED AND RECOMENDATION

During Negotiations

7.01 Agreements were reached on the following principal points:

(a) The Government will carry out a study on the adequacy of thestructure and levels of remuneration at all levels of employmentin the power sector by June 30, 1983, and furnish to the Banka copy of such study (1.08);

(b) ISA and its shareholders will give all necessary assistanceto the Government for carrying out the power sector remunera-tion study (1.08);

(c) The Government will prepare a program to implement the recom-mendation of DNP regarding the estructure and operations of ICELand its Electrificadoras; such plan will be put into effect startingJune 30, 1983,with the assistance of the sector (1.12);

(d) ISA and its shareholders will take all reasonable and appropriateaction required on its part for the implementation of the programregarding the structure and operations of ICEL (1.12);

(e) The Government will establish, by January 1, 1982, a PEFF whichwill provide sufficient local funds to finance the sector expansionprogram (1.29 and 5.13);

(f) EEEB will engage by June 30, 1982 satisfactory consultants: (i) tocarry out by April 30, 1983, a study which will include: (1)an assessment of the improvements needed in EEEB's current operationand maintenance planning and practices in generating plants andimplement by October 31, 1983 the recommendations of such study;and (2) recommendations for a training program for EEEB's personnelin charge of operation and maintenance in generating plants; and(ii) to assist EEEB in the implementation of the above trainingprogram which will be started by October 31, 1983 and completedby April 30, 1985. The Bank will be given an opportunity tocomment on both the above program of improvements and the trainingprogram prior to their implementation (4.18, 4.20 and 4.25);

(g) EEEB will engage satisfactory consultants by December 31, 1981 toexecute the studies required to complete the assessment of theenvironmental impact of the project not later than December 31,1982. The conclusion of such study will be discussed with the Bankprior to their implementation by June 30, 1983 (4.19, and 4.29);

(h) EEEB will gradually staff the PMU according to project requirements(4.23);

(i) EEEB will generate from its internal sources 35% of totalinvestment requirements in each of the years 1982 to 1984 and55% during each of 1985 to 1987 (5.15); and

- 44 -

(j) ISA and its other shareholders will agree to comply with suit-able performance covenants to enable them to meet their commit-ments under the proposed project, without compromising theirother financial obligations (5.24);

7.02 Agreements were reached that the corresponding provisions ofLoan 1807-CO will be amended:

(a) EEEB's accounts receivable as a percentage of the total annualsales will not exceed 21% in 1981; 19% in 1982; and 17% in 1983and thereafter (2.07); and

(b) EEEB will not: (a) construct a generating plant exceeding 100 MWunless economically justified and adequately funded; and (b) incurexpenditures for investments not included in EEEB's 1981-1987Investment Program aggregating annually in excess of 1% of netrevalued assets in operation, or (c) those unrelated to the powersector (5.16).

7.03 The following main provisions of Loan Agreement 1807-CO will berepeated:

(a) Execution of the Project (Section 3.01);

(b) Insurance (Section 3.03 and 4.03);

(c) Information to the Bank (Section 3.04);

(d) Acquisition of Land and Rights for the Project (Section 3.05);

(e) Environment (Section 3.06);

(f) Management and Operations of the Borrower (Section 4.01 to 4.04);

(g) Records, Auditing and Accounting (Section 5.01 to 5.03);

(h) Reporting on Adequacy of Tariffs (Section 5.07);

(i) EEEB's Indebtness Limitation Covenant (Section 5.08); and

(j) Rate of return covenant for 1981 and thereafter (Section 5.06).

Conditions of Effectiveness

7.04 Prior to declare the loan effective, the following conditionswill have been met:

(a) satisfactory arrangements would have been made for the financingof the balance of EEEB's Investment Program requirements for theyears 1982 and 1983 (5.10); and

- 45 -

(b) EEEB, ISA and its other shareholders will finalize contractualarrangements for the "Guavio Participations" (5.12).

Recommendation

7.05 With the above assurances the proposed project would be suitable fora Bank loan of MUS$359 equivalent, to be made to EEEB with the guarantee ofthe Government of Colombia. The loan would have a repayment period of 17years, including 4 years of grace.

May 6, 1981

ANNEX 1.1-46-

COLOMBIA

EMPRESA DE ENERGIA ELECTRICA DE BOGOTA (EEEB)

GUAVIO HIYDRO POWER PROJECT

Energy Supply and Demand 1/ 2/

1970 1975 1979 1980 I0/

PRIMARY ENERGY SUPPLY 3/ (1012 Btu) (10 Btu) (1012 Btu) (1012 Btu)

Crude Petroleum (million bbl)

Local production 79.6 445.8 57.3 320.9 45.3 b/ 253.7 41.1 b/ 230.2Imports _- - - 9.1 b/ 50.9 24.1 b/ 134.9

Sub-Total 79.6 445.8 57.3 320.9 54.4 304.6 65.2 365.1

Petroleum Products (million bbl)

Local refining 41.3 231.3 47.1 263.7 48.6 272.2 56.2 314.7Imports - _ 1.8 10.1 7.2 40.3 0.6 3.4

Sub-Total 41.3 231.3 48.9 273.8 55.8 312.5 56.8 318.1

Natural Gas (million ft3/d) 139.6 51.0 180.6 65.9 264.0 96.4 264.0 96.4

Coal (thousand ton) 3,317.0 86.9 3,800.0 99.6 4,881.0 127.9 6,000.0 157.2

Gross Hydropower (GWh) 4/ 7,308 a/ 24.1 11,236 e/ 37.1 14,095 a/ 46.5 16,988 d/ 56.1

Total Supply 5/ 607.8 533.6 615.7 678.2of which: Local supply 607.8 523.5 524.5 539.9

Imports - 10.1 91.2 138.3

ENERGY DEMAND

Crude Petroleum (million bbl)

Exports and/or losses b/ 38.3 214.5 10.2 57.2 5.8 33.5 9.0 50.4

Petroleum Products (million bbl)

Total Local Consumption 31.3 175.3 38.9 217.8 48.2 269.8 50.4 282.2Electric Sector Consumption b/ (2.6) (14.4) (3.7) (20.8) (1.9) (10.6) (2.2)9/ (12.1) 9/

Net Local Consumption 7/ 28.7 160.9 35.2 197.0 46.3 259.2 48.2 270.-1Exports and Losses 10.0 56.0 10.0 56.0 7.6 42.6 6.4 35.9

Net Demand 7/ 38.7 216.9 45.2 253.0 53.9 301.8 54.6 306.0

Natural Gas (million ft3/d)

Total Local Consumption 139.6 51.0 180.6 65.9 264.0 96.4 264.0 96.4Electric Sector Consumption b/ (11.8) (4.3) (41.5) (15.2) (109.3) (39.9) (142.0) (51.8)

Net Demand 7/ 127.8 46.7 139.1 50.7 154.7 56.5 122.0 44.6

Coal (thousand ton)

Total Local Consumption 3,308 86.7 3,757 98.4 4,500 117.9 5,100 133.6Electric Sector Consumption b/ (358) (9.4) (259) (6.8) (794) (20.8) (782) (20.5)

Net Local Consumption 7/ 2,950 77.3 3.498 91.6 3,706 97.1 4,318 113.1

Exports and/or Losses 9. 0.2 43 1.1 381 10.0 900 23.6

Net Demand 7/ 2,959 77.5 3,541 90.5 4,087 107.1 5,218 136.7

Gross Electricity Generation

(GWh) 7,358 a/ 24.4 9,789 e/ 32.3 17,350 a/ 57.3 20,861 dl 68.8

Total Net Demand 8/ 580.0 488.7 555.2 605.5

Other Losses 8/ 27.8 49.9 60.5 71.7

Total Gross Demand 607.8 533.6 615.7 678.2of which: Total Net Local Demand 7/ 309.3 369.4 470.1 496.6

Exports and/or Losses 298.5 164.2 145.6 181.6

1/ Sources (where not indicated in the Table, source is c) below:a) Playas Hydro Power Project (Report No. 3240b-CO, February 9, 1981.b) Coyuntura y Desafio Energetico 1980, Oficina de Planeacion, Ministerio de Minas y Energia. Colombia.c) Plan de Integracion Nacional 1979-1982. Departamento Nacional de Planeacion.d) Guavio Hydro Power Project (Report 3408a-CO, March 30, 1981).e) La Electrificacion en Colombia 1976-1977. ICEL 1977.

2/ Given the several sources of information used, some data had to be modified for consistency of the results.3/ Excludes firewood and bagasse, for which information is not available.4/ Gross hydro power determined from gross hydro electricity generation assuming 85% efficiency.5/ Assumes following equivalences: 3300 Btu/kWh; 5.6 x 106 Btu/bbl for crude petroleum and petroleum products;

106 Btu/103

cu ft for natural gas; and 26.2 x 106 Btu/t for coal.6/ Determined as local production plus imports minus local refining.7/ Excludes consumption for electricity generation.8/ Computed as difference between total supply and total net demand, includes losses in thermoelectric plants.9/ Estimated assuming 25% average efficiency for thermoelectric generation in 1980.

10/ ForecaEt.

April 27, 1981

4 h7 -

ANNEX 1.2

COLOMBIA

EMPRESA DE ENERGIA ELECTRICA DE BOGOTA (EEEB)

GUAVIO HYDRO POWER PROJECT

IBRD Power Loans

Borrowers Totaland Year of Loan Amount Amount Loans

Loan No. Agreement Project Description (MUS$) (MUs$)

GOVERNMENT

1583-CO 1978 500-kV Interconnection (Central System/ 50.00 50.00Atlantic System)

ISA

575-CO 1968 Central System Interconnection (230 kVtransmission lines and substations 18.00

681-CO 1970 Chivor I project (4 x 125 MW hydro) 52.30

1582-CO 1978 San Carlos I (4 x 155 MW hydro) 126.00

1725-CO 1979 San Carlos II (4 x 155 MW hydro) 72.00 268.30

EEEB

246-CO 1960 Laguneta unit 4 (1 x 18.0 MW hydro) 17.60

Salto It units I and 2 (2 x 33.0 MW hydro)

Zipaquira unit 1 (1 x 33.0 MW thermal)

313-CO 1962 Zipaquira unit 2 (1 x 37.5 MW thermal) 50.00

El Colegio units 1, 2, and 3 (3 x 50.0 MW hydro)

537-CO 1968 El Colegio units 4, 5, and 6 (3 x 50.0 MW hydro) 18.00

Canoas project (1 x 50.0 MW hydro)

1628-CO 1978 Mesitas Hydro (El Paraiso 3 x 90 MW; La Guaca 84.00

3 x 110 NM; pumping 3 x 10 MiW: Sesauile dan

strengthening)

1807-CO 1980 Bogota Distribution 87.00 256.60

EPM

225-CO 1959 Troneras unit I (1 x 18.0 MW hydro) 12.00

Guadalupe III units 1 and 2 (2 x 45.0 MW hydro)

282-CO 1961 Troneras unit 2 (1 x 18.0 MW hydro) 22.00

Guadalupe III units 3, 4, and 5 (3 x 45.0 MW hydro)

369-CO 1964 Guatape I units 1 and 2 (2 x 66.0 MW hydro) V/ 45.00

874-CO 1973 Guatape II units 1, 2, 3, and 4 (4 x 70 MW hydro) 56,00

1868-CO 1980 Guadalupe IV Hydro Power Project 125.00

1953-CO 1981 Playas Hydro Power Project 85.00 345.0

CVC/CHIDP.AL

38-CO 1950 Anchicaya units 1 and 2 (2 x 12.0 PM hydro) 3.53

113-Co 1955 Anchicaya unit 3 (1 x 20.0 MW hydro) 4.50

Yumbo unit 1 (1 x 10.0 MW thermal)

215-CO 1958 Yumbo unit 2 (1 x 10.0 MW thermal) 2.80

255-CO 1960 Yumbo unit 3 (1 x 33.0 MW thermal) 25.00

Calima units 1 and 2 (2 x 30.0 MW hydro)

339-CO 1963 Calima units 3 and 4 (2 x 30.0 0 P hydro) 8.80 44.63

CMEC

39-CO 1950 La Insula units 1 and 2 (2 x 10.0 MW hydro) 2.60

.211-C0 1959 La Esmeralda units I and 2 (2 x 13.3 MW hydro) 4.60 7.20

LEBRIJA

54-CO 1951 Palmas units 1 and 2 (2 x 4.4 MW hydro) 2.40 2.40

ELECTRIBOL

347-CO 1963 Cospique units 2 and 3 (2 x 12.5 MW thermal) 5.00 5.00

Total Loan Amounts 979.13 979.13

lf Subsequently increased to 4 x 70 MW.

March17, 1981

_48 -ANNEX 1.3

COLOMBIA

EMPRESA DE ENERGIA ELECTRICA DE BOGOTA-EEEB

GUAVIO HYDRO POWER PROJECT

National Generation Development Program1981-1988

Capacity Year ofPlant Type l/ Owner (MW) Commissioning

Zipaquira (Termozipa) IV S ISA 3/ 66 1981Chivor II H ISA 500 'I

Paipa III S ICEL 66 "Emergency additions GT ICEL 60 ifChin- GT ISA 100 2/ fPajaritc-Dolores-Nechi diversions(Guadalupe III and IV) H EPM 4/ 1982

Tunjita-Rucio-Negro diversions(Chivor) H ISA 4/ '

AyuraS H EPM 19 itCerrej 'n] I S CORELCA 158 tSan Carlos I H ISA 620El Paralso - La Guaca H EEEB 600 1983Zipaquira (Termozipa) V S ISA 31 666San Carlos II H ISA 620 1984Jaguas H ISA 170Calderas H ISA 15Tasajero S ICEL 150Salvajina H CVC 270Cerrej 6 n II S CORELCA 158Guadalupe IV H EPM 216Playas H EPM 200 1986Betania H ICEL 500Guavio H EEEB 1000 1987Urra I and II H CORELCA-ISA 1050 1988

Total capacity addition of which: 6604

H 5780S 664GT 160

TOTAL: 6604

1/ H: Hydro; S: Steam; GT: Gas Turbine.21 Final capacity might be up to 133 MW.3/ To be transferred to EEEB in the near future.41 Increase in annual generation only.

April 22, 1981

- 49 -

ANNEX 2.1

COLOMBIAEMPRESA DE ENERGIA ELECTRICA DE BOGOTA

Organizaton Chart

|BOARD

L AUDITORS

GENERAL vlANAGER

Lc DL istribPLANNINGADVISORS

r ADMINISTRATION r ~FINANCE AND E N DGIN_ OPERTIONA COMRILAN PRTO

-1l|Gnratio and

Industrial Statiitis m oudget _ Transmission

R n erdsoandnoeiia u-rasso

i-| Arccounting l -| Distribution

Treasury ~~~~~~~~Programmi ngJ t Ral Estate E eTriSema aLn and Statistics d Transmission

Procurceno C o R Engineering

ID

aI Supd Supplies

4 | Records and l 11 Commercial | -t ~~~~~~~~~~~~~Sub-transmission| _| Dsrbto

apesnision Constructince|1 Warehouses l -| ~~~~~~Distribumln

n sntao I and Supervision

SYstematizatIo 1 and Cani - 22853| > Systems and l I i ;| ~~~~~~~Design

| |-| Data l 1 4~~~Prcesin Construction l | Rural

- Meitas Project Elcriiato

I I I ~~~~~~~Systems I |||I Cntuto -1 Development |r n uevso L Subscribers l

Consumers l Ll ~~~~~~~SupportingE Requests~ ~~ ~~~~pau Services Transportation

I r 7 ~~~~~~~~~Project IuI -Suevson L Construction

I Instlrlation , rl andi Supervision

rl and Suevso

MARCH 1981

VVorld Bank -22653

COLOMBIA

EMPRESA DE ENERGIA ELECTRICA DE BOGOTA (EEEB)

GUAVIO HYDRO POWER PROJECT

Forecast Performance Indicators

1979 19807/ 1981 1982 1983 1984 1985 1986 1987 1988

ServiceGross generation, own plants (GWh) 3,532 3,601 4,108 4,777 4,842 5,347 5,611 5,635 7,597 8,791

Purchases (GWi) 1,149 1,625 1,643 1,587 2,179 2,361 2,891 3,787 2,678 2,476

Total Supply (GWh) 4,681 5,226 5,751 6,364 7,021 7,708 8,502 9,422 10,275 11,267

Sales 1/ (GWh) 3,713 4,009 4,410 4,875 5,393 5,967 6,605 7,315 8,104 8,982

Losses and un accounted for (GWh) 891 1,097 1,208 1,177 1,229 1,310 1,403 1,508 1,593 1,690(%) 2/ 19.0 21.0 21.0 18.5 17.5 17.0 16.5 16.0 15.5 15.0

Number of customers (1000) 532 580 633 690 753 822 898 980 1,071 1,170

Number of employees 3/ 2,465 2,662 2,822 2,991 3,170 3,361 3,562 3,776 4,003 4,243

Customers per employee 216 218 224 231 238 245 252 260 268 276 o

Energy sales per employee (MWh) 1,506 1,506 1,563 1,630 1,701 1,775 1,854 1,937 2,024 2,117

Financial

Rate of return for the year (%) 8.2 9.2 15.3 14.5 14.5 16.8 20.2 25.2 23.2 20.5

Self-financing ratio (%) 4/: annual - 32 21 32 37 36 49 55 70 97

Debt service coverage ratio 5/ 1.7 2.3 1.8 1.6 1.5 1.7 1.7 1.8 2.3 2.4

Debt/equity ratio 6/ 34/66 40/60 47/53 51/49 51/49 51/49 49/51 46/54 41/59 33/67

Accounts receivable as a % of annual sales 22 23 21 19 17 17 17 17 17 17

1/ Excludes own consumption.2/ % of total supply.3/ Projected to grow at an average of about 6% per year.4/ Net internal cash generation/construction program plus interest during construction and investments in ISA

5/ Times that total debt service is covered by net income.

6/ Total debt (including ISA Contributions to Guavio and liability reserves)/total equiJy.

7/ Preliminary figures.

March 25, 1981

COLOMBIA

EMPRESA DE ENERGIA ELECTRICA DE BOGOTA (EEEB)

GUAVIO HYDRO POWER PROJECT

Actual and Forecast Sales and Gross Generation Required

(GWh)

Government & Total Losses and l/ TotalResidential % Commercial % Industrial % Pub.Liahting % Sales % Station Use % Requirements

1973 782 367 742 292 2183 433 2616

1974 923 411 809 305 2448 426 2874

1975 1042 39 450 17 855 32 316 12 2663 100 695 21 3358

1976 1175 513 945 347 2980 625 3605

1977 1237 589 995 353 3174 836 4010

1978 1392 628 1104 351 3475 787 4262

1979 1549 622 1168 374 3713 968 4681

1980 1672 42 673 17 1263 32 401 10 4009 100 1139 22 5226

Average Growthrate (1974-1980) % 11.5 9.0 7.9 4.6 9.1 14.8 10.4

1981 1808 741 1420 441 4410 1341 5751

1982 2029 813 1556 477 4875 1489 6364

1983 2278 893 1706 516 5393 1628 7021

1984 2558 981 1869 559 5967 1741 7708

1985 2875 44 1077 16 2049 31 604 9 6605 100 1897 22 8502

1986 3233 1182 2246 654 7315 2107 9422

1987 3637 1298 2461 708 8104 2171 10275

1988 4094 1425 2697 766 8982 2285 11267

1989 4610 1565 2956 829 9960 2466 12426

1990 5193 47 1719 16 3240 29 896 8 11048 100 2670 19 13718

Average Growthrate (1981-1990) % 12.0 9.8 9.9 8.4 10.7 8.9 10.1

1/ As a percentage of total requirements.

April 2, 1981

-52 -

COLOHBTA ANDEX 4.1

RMPEESA DE ENERGIA ELECTRICA DE BOGOTA (EEEB)

GUAVIO PYDRO POWER PROJECT

Capacity Balance 1/

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990

1.1 ydroplants55.5 - _ _ _ _ _ _ _ _ _

Salto II 70.0 - - - - - - - - - -

La.guneta 72.0 -Colegio 300.0 -Canoas 50.0 - - - - - - - - _

EL Paraiso - - 92.0 12/ 94.0La Guaca - - 180.0- 216.0 - - - _ _ - _

Guavio - _ _ _ _ _ 600.0 6 /

Subtotal Hydra 547.5 547.5 747.5 1,147.5 _ _ - 1,757.5

1.2 Thermal PlantsZipaquira I, III 6J 136.5 136.5 136.5 136.5 136.5Zipaquira IV 61 - - - - 66.0

Zipaquir- V - 6/ _ - - - 66.0

Subtotal Thermal 136.5 136.5 136.5 136.5 268.5 -

1.3 Total Capacity 684.0 684.0 884.0 128.4 1,416.0 1,416.0 1,416.0 2,016.0

2 Guaranteed from the System 317.0 491.0 116.0 273.0 380.0 441.0 624.0 264.0 520.0 705.0 872 03 Total Capacity Available 1,001.0 1,175.0 1,000.0 1,557.0 1,796.0 1,857.0 2,040.0 2,280.0 2,536.0 2,721.0 2,888.04 Peak Demand 970.0 1,069.0 1,179.0 1,298.0 1,427.0 1,569.0 1,727.0 1,898.0 2,090.0 2,301.0 2,532.05 Surplus (deficit) 31.0 106.0 (179.0) 259.0 369.0 288.0 313.0 382.0 446.0 420.0 356.0

Reserve % 3.0 10.0 - 20.0 26.0 18.0 18.0 20.0 21.0 18.0 14.0

1/ Effective capacity.2/ Commission Nov. 1982 (1st unit).3/ 600 MW assigned to E;EE and 400 to ISA.4/ Commissioned 4/81 but to be utilied by ISA until end of 1983.5/ To be commissioned 2/83 but to be utIlized by ISA until end of 1983.

6/ Zipaquira Therm Plants are also called Termozipas.

AIINNEX 4.2

COLOMBIA

EMPRESA DE ENERCIA ELECTRICA DE BOGOTA (EEEB)

GUAVIO BYDRO POWER PROJECT

Forecast Generation per Plant (GWh) 1/

- PLANT 1980 1981 \,1982 1983 1984 1985 1986 1987 1988 1989 1990

1- IydroCanoas 261.1 294.6 189.0 95.9 120.7 130.2 130.2 130.2 130.2 130.2 130.2Salto I 305.6 345.3 222.6 112.9 142.2 153.3 153.3 153.3 153.3 153.3 153.3Salto II 365.6 412.7 264.5 134.2 169.0 182.2 182.2 182.2 121.2 182.2 182.2Laguneta 396.9 448.3 287.5 146.0 183.8 198.2 198.2 198.2 198.2 198.2 198.2Colegio 1,566.8 1,769.1 1,135.8 576.4 725.7 782.5 782.5 782.5 782.5 782.5 782.5Guaca - - 993.4 1,702.9 1,702.9 1,702.9 1,702.9 1,702.9 1,702.9 1,702.9 1,702.9Paraiso - - 846.2 '1,450.7 1,450.7 1,450.7 1,450.7 1,450.7 1,450.7 1,450.7 1,450.7Guavio (60%) - - - - - - - 1,997.0 3,015.0 3,192.0 3,012.0

Subtotal 2,896.0 3,270.0 3,939.0 4,219.0 4,495.0 4,600.00 4,600.0 6,597.0 7,615.0 7,792.0 7,612.0

2- thermalZipa I 170.4 202.6 202.6 150.6 104.8 124.3 127.2 122.9 144.5 159.0 144.5Zipa II 193.7 130.2 230.2 171.2 119.0 141.2 144.6 139.7 164.2 180.7 164.2Zips III 340.9 405.2 405.2 301.2 209.4 248.5 254.4 245.8 289.1 318.1 289.1Zipa IV - - - - 209.4 248.5 254.4 245.8 289.1 318.1 289.1Zipa V - - _ - 209.4 248.5 254.4 245.8 289.1 318.1 289.1

Subtotal 705.0 838.0 838.0 623.0 852.0 1,011.0 1,035.0 1,000.0 1,176.0 1,294.0 1,176.0

Total Generation 3,601.0 4,108.0 4,777.0 4,842.0 5,347.0 5,611.0 5,635.0 7,597.0 8,791.0 9,086.0 8,788.0Nat transfers fr-m ISA1,625.0 1,524,0 1,564.0 2,179.0 2,361.0 2,891.0 3,787.0 2,678.0 2,476.0 3,340.0 4,930.0

Total Energy Avail. 5,226.0 5,751.0 6,364.0 7,021.0 7 ,708.0 8,502.0 9,422.0 10,275.0 11,267.0 12,426.0 13,718.0Total Requirements 5,226.0 5,751.0 6,364.0 7,021.0 7,708.0 8,502.0 9,422.0 10,275.0 11,267.0 12,426.0 13,718.0Surplus (deficit) - - - - - - - - -

1/ Average-hydrology year

Apiril 6, 1981

- 53 - ANNEX 4.3

COLOMBIA

EMPRESA DE ENERCIA ELECTRICA DE BOGOTA

GUAVIO HYDRO POWER PROJECT

Construction Program(Millions of Col$)

i980 1981 1982 1983 1984 1985 1986 1987 1988

ONGOING WORKSFifth Program

F.C. 3,307 4,662 2,094 348 154 487 - - -

L.C. 1,796 2,277 2,925 2,351 1,272 764 - - -

T. 5,103 6,939 5,019 2,699 1,426 1,251 - - -

Sixth ProgramF.C. 197 1,535 3,075 2,148 455 325 - _ _L.C. 606 788 1,734 2,278 3,284 1,169 - - -T. 803 2,323 4,809 4,426 3,739 1,494 - _ _

GUAVIO PROJECTPFC. - 3,215 3,243 6,966 10,005 22,050 10,363 4,633 -

(Seventh Program) LLC. 176 2,197 2,264 4,063 5,602 7,629 4,963 1,652 -

T. 176 5,412 5,507 11,029 15,607 29,679 15,326 6,285 -

FUTURE INVESTMENTSSixth Program

P.C. - Pg- - 815 2,298 5,525 4,593 -(Continuation) L.C - - - 451 3,013 4,602 5,543 -

T. - - - - 1,266 5,311 10,127 10,136 -

Eighth ProgramP.C. - - - - - - - 5,358 6,955L.C - - - -- - - 5,386 6,834T. - - 10,744 13,789

Ninth ProgramF.C. - - - -- - 579 751 985L.C. - - - - - - 791 1,001 1,283T. - _ - - 1,370 1,752 2,268

Tenth ProgramP.C. - - - --

L.C - - 11,329 16,087 20,599T. - _- - 11,329 16,087 20,599

TERMOZIPAF.C. - - - - - - - - -L.C. - - 672 738 11,355 - - - -

T. - - 672 738 11,355 - - - -TOTAL

F,C. 3,504 9,412 8,412 9,462 11,429 25,160 i6,467 15,335 7,940 95,667L.C. 2,578 5,262 7,595 9,430 21,964 12,575 21,685 29,669 28,716 108,180T. 6,082 14,674 16,007 18,892 33,393 37,735 38,152 45,004 36,656 203,857

TOTAL(Millions of

US$) F.C. 74.1 173.0 134.4 131.4 138.4 269.8 159.5 134.9 63.5 1,141.4L.C. 54.5 96.7 121.3 131.0 265.9 134.9 210.0 261.1 229.6 1,220.9T. 128.6 269.7 255.7 262.4 404.3 404.7 369.5 396.0 293 1 2,362.3

- 54 - ANNEX 4.4

COLOMBIA

EMPRESA DE ENERGIA ELECTRICA DE BOGOTA (EEEB)

GUAVIO HYDRO POWER PROJECT

Project Cost

---------- MCol$ ---------- ---------- MUS$ -------… --

Local Foreign Total Local Foreign Total

I Engineering and Administration1. Engineering (design) 1,210.9 179.7 1,390.6 25.6 3.8 29.42. Engineering (supervision) 927.1 108.8 1,035.9 19.6 2.3 21.93. Project Administration 302.7 14.2 316.9 6.4 0.3 6.7

Sub-total 2,440.7 302.7 2,743.4 51.6 6.4 58.0

II Infrastructure and Land1. Infrastructure and land 402.0 1,002.7 12.7 8.5 21.22. Equipment for maintenance 28.4 28.4 - 0.6 0.6

Sub-total 430.4 1,031.1 12.7 9.1 21.8

III Main Civil Works1. River divsersion, dam and spillways 4,389.4 8,145.1 12,534.5 92.8 172.2 265.02. Underground waterways and caverns 3,784.0 5,676.0 9,460.0 80.0 120.0 200.0

Sub-total 8,173.4 13,821.1 21,994.5 172.8 292.2 465.0

IV Equipment1. Main Electrical Equipment 80.4 1,906.2 1,986.6 1.7 40.3 42.02. Main Mechanical Equipment 47.3 1,527.8 1,575.1 1.0 32-.3 33.33. Ancillary Electric Equipment 9.5 269.6 279.1 0.2 5.7 5.94. Ancillary Mechanical Equipment 85.1 510.8 595.9 1.8 10.8 12.6

Sub-total 222.3 4,214.4 4,436.7 4.7 89.1 93.8

V Transmission System1. Equipment and Materials 71.0 775.7 846.7 1.5 16.4 17.9

2. Erection and Installation 283.8 132.4 416.2 6.0 2.8 8.8Sub-total . . 354.8 908.1 1,262.9 7.5 19.2 26.7

VI EEEB's Load-dispatch Center 99.3 614.9 714.2 2.1 13.0 15.199.3 614.9 714.2 2.1 13.0 15.1

VII Studies 14.2 4.7 18.9 0.3 0.1 0.4

VIII Training 9.5 33.1 42.6 0.2 0.7 0.9

Total Base Cost 1/ 11,914.9 20,329.4 32,244.3 251.9 429.8 681.7

IX Contingencies1. Physical 1,892.0 2,861,.7 4,753.7 40.0 60.5 100.52. Price 14,563.1 37,283.9 51,847.0 83.0 137.9 270.9

Sub-Total 16,455.1 39,145.6 56,600.7 123.0 248.6 371.4

X Total Project Cost 28,370.0 60,475.0 88,845.0 374.9 678.2 1,053.1

Xl Interest During Construction - 23,755.3 23,755.3 - 250.0 250.0

XLI Total Financing Requirements 28,370.0 84,230.3 112.600.3 374.9 928.2 1,303.1

1/ December 1980 prices.

April 28, 1981

ANNEx 4.5

- 55 -

COLOM8IA

UPRESA DE ENERGIA ELECTRICA DE BOGOTA (EEE)

GUAVIO HYDRO POWE PItOJECT

Proposed Pr iyiancing k /

CofinancingL F T IBRD IDB Suppliers (Foreign) Local

1. Engineering, Supervision and Admin.1.1 Engineering 37'5 5.8 43.3 21.71.2 Supervision 30.2 3.8 34.0 17.01.3 Administration 9.6 0.5 10.1 -

Sub-total 77.3 10.1 T7T 728.6 77.3

2. Infrastructure2.1 Land, access roads, etc. 19.5 14.0 33.5 14.0 14.0 19.52.2 Equipment for maintenance - 1.0 1.0 1.0

Sub-total 19.5 15.0 31.5 5. 0

3. Dam and Associated Works 130.5 255.0 385.5 255.0 130.5

4. Underground Works 123.4 196.1 319.5 100.0 96.1 123.4

5. IMain Generating Equipment5.1 Electric 2.6 66.2 68.8 56.3 9.9 2.65.2 Mechanical 1.5 53.1 54.6 45.1 8.0 1.5

ThT 119.3 123.4

6. Ancir Equipment6.1 Ilectric o.4 9.6 10.0 9.6 0.46.2 Mechanical 2.7 17.3 20.0 17.3 2.7

3.1 26.§ 30.0 26.9

7. Transmission7.1 Equipment and materials 2.3 27.5 29.8 23.4 4.1 2.37.2 Erection and installation 9.5 49 14.4 4.2 0.7 9.5

Sub-total 11.8 32.4 WQ

a. Load Dispatch Center 4.2 22.0 26.2 22.0 4.2

9. Studies o.6 0.3 0.9 0.3 o.6

10. Training o.4 1.1 1.5 1.1 __9__ 0.4Total Project Cost 37W. 678.2 1,053.1 359.0 100.0 129.0 90.2

11. miscast during Construction - 250.0 250.0 250.0

12. Total Financing Requirements 374.9 928.2 1,303.1 359.0 100.0 129.0 340.2 374.9

2/ In current prices.

00~~~~~~~~~~~~~~~~~~~~~~~~~

o C~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~o A

~~~~~~~~~~~~~~~ d~~~~~~~~~~~~~~~~~~~~~~~~l

PI "I IH0 II

- 57 -

ANNEX 4.7

COLONBIA

EMPRESA DE ENERGIA ELECTRICA DE BOGOTA (EEEB)

GUAVIO HYDRO POWER PROJECT

Disbursements of Bank Loan

IBRDFiscal Semester During Semester CumulativeYear Ending US$ Million % of Total US$ Million % of Total

82 12/31/81 37.7 11 37.7 1182 6/30/82 15.3 4 53.0 1583 12/31/82 15.3 4 68.3 1983 6/30/83 29.7 8 98.0 2784 12/31/83 29.7 8 127.7 3684 6/30/84 39.2 11 166.9 4785 12/31/84 39.1 11 206.0 5785 6/30/85 48.7 14 254.7 7186 12/31/85 48.7 14 303.4 8586 6/30/86 24.7 7 328.1 9187 12/31/86 24.7 7 352.8 9887 6/30/87 3.1 1 355.9 99

12/31/86 3.1 1 359.0 100

359.0 100

April 2, 1981

COLOMBIA

EMPRESA DE ENERGIA ELECTRICA DE BOGOTA

GUAVIO HYDRO POWER PROJECT

Financial Indicators

1980 1981 1982 1983 1984 1985 1986 1987 1988

Rate of Return

Average net utility plant inoperation (MCol$) 19,133 24,489 45,032 72,081 96,680 125,839 155,303 276,134 423,434

Net income (MCol$) 1,880 3,750 6,543 10,428 16,276 25,458 39,134 64,304 86,682Percentage Return 9.2 15.3 14.5 14.5 16.8 20.2 25.2 23.3 20.5

Debt

Net income/debt service a/ 2.3 1.8 1.6 1.5 1.7 1.7 1.8 2.3 2.4Debt/equity ratio b/ 40/60 47/53 51/49 51/49 51/49 49/51 46/54 41/59 33/67

Self-Financing ratio c/ (%) 32.2 20.9 32.2 36.5 36.1 49.2 54.5 70.4 96.9 1

Accounts receivable as percentage m

of Annual Sales 23 21 19 17 17 17 17 17 17

Working Capital

Current ratio d/ 1.0 1.0 1.0 .9 .8 .7 .8 .8 .9

Current ratio e/ 1.3 1.6 1.8 1.7 1.4 1.6 1.8 1.8 2.1

Depreciation

As a percentage of average grossutility plant in operation 3.9 3.8 4.3 3.7 3.8 3.8 3.8 4.0 3.5

a/ Times that total debt service is covered by net income plus depreciation and increase in liability reserves.b/ Total debt (including ISA Contributions to Guavio and liability reserves)/ total eauity.c/ Net internal cash generation divided by investments in fixed assets plus interest during construction and

investments in ISA.d/ Current assets divided by current liabilities.e/ Current assets divided by current 1-iabilities excluding current portion of long-term debt.

March 20, 1981

ANNEX 5.2

- 59 -

COLOMBIA

ENPRESA DE ENERGIA ELECTRICA DE BOGOTA

GUAVIO BYDRO POWER PROJECT

Actual and Forecast Income Statement 1977-1988(Millions of Current Col$)

1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988------- ActualF--------- _____________________-------------Forecast…-----------------------------------

Sales in GWh a/

Total 3532 3651 3713 4009 4410 4875 5393 5967 6605 7315 9436 10982Total 3532 3651 3713 4009 4410 4875 5393 5967 6605 7315 9436 10982

Revenue kWh Sold

Total 0.561 0.827 1.144 1.476 2.177 2.861 3.759 4.940 6.491 8.529 9.723 11.084Av.Col$/kWh b/ 0.561 0.827 1.144 1.476 2.177 2.861 3.759 4.940 6.491 8.529 9.723 11.084Av.t17S$/kWh 1.5 2.1 2.7 3.1 4.0 4.6 5.2 6.0 7.0 8.3 8.6 8.9

Operating RevenuesTotal 1983 3020 4248 5917 9601 13947 20272 29477 42873 62390 91746 121724

Total Sales Rev. 1983 3020 4248 5917 9601 13947 20272 29477 42873 62390 91746 121724Other c/ 270 388 505 769 1206 1968 2859 4155 6039 8780 11081 13990

Total 2253 3408 4753 6686 10807 15915 23131 33632 48912 71170 102827 135714

Operating Expenses d/Generation e/ 252 320 391 514 789 1519 1618 2164 2746 3226 4895 6248Transmission g/ 50 100 171 192 276 375 443 535 638 788 988 1133Purchased Energy f/ 224 728 944 1454 2240 1694 3300 4668 6791 10697 7460 10286Distribution n/ 97 184 257 270 415 614 787 1035 1341 1704 2199 2605Administration i/ 282 330 533 693 1119 1379 1951 2649 3603 5054 5266 6423Public Lighting i/ 94 128 189 247 410 614 792 1079 1451 1956 2719 3466ISA Network kI 31 115 126 228 262 262 10 0 0 0 0 0Depreciation 1/ 520 708 904 1208 1546 2915 3802 5226 6884 8611 14996 18871

Total r/ 1550 2613 3515 4806 7057 9372 12703 17356 23454 32036 38523 49032Operating Income 703 795 1238 1880 3750 6543 10428 16276 25458 39134 64304 86682Other Income Net 0/ 217 493 614 462 608 1013 1040 1724 2516 3871 3298 3121Net Income before

interest 920 1288 1852 2342 4358 7556 11468 18000 27974 43005 67602 89803Interest Charged Op. o/692 488 662 731 1265 1716 2302 2583 3254 4109 9391 15533Net Income 228 800 1190 1611 3093 5840 9166 15417 24720 38896 08211 74270

/ Actual figures include bulk sales to other utilities (transfer through EEEB's network of ISA supply to theseutilities). For forecast of net sales of energy to customers, see paragraph 3.02.

h/ See paragraph 5.11 for EEEB's plan of rate increases.

ci Consists of connection charges (approximately 85% of the figure shown) plus charges for service changes, meterrentals, special services and penalties for late paynent of bills.

di Except where noted otherwise, the operating costs are estimated by EEEB based on 1970-1979 average in real terms andthen escalated. Cost itens, except purchased energy and depreciation, have been increased about 7% in comparison with thenriginal EEEB's estfsate, based on post appraisal mission findings.

e/ Hydro generation: assuming Mesitas 65% commissioning in 1982 and full in 1983, and Guavio full commissioning by end1987. Thermal generation: assuming long-term contracts for purchase of coal.

f/ Based on ISA's energy balance 1980-1990.

g/ Projected on the basis of estimated future number of kilometers of lines in operation; 1979 figure includes an unusualadjustment charge not expected to be repeated.

h/ Projected on the basis of estimated future number of customers; 1979 figure includes an unusual adjustment chargenot expected to be repeated.

i/ Consists of: (a) administration expenses projected to grow in the same proportion as the sum of all other operatingcosts excluding ISA's charges and depreciation; (b) billing and collection expenses projected to grow in proportionto other distribution costs; and (c) coats of unfunded pension and severance pay liabilities projected to grow inproportion to sioe of EEEB's staff.

ji/ Consists of the value of public lighting supplies at no cost donated to the city of Bogota (which offsets a symbolicequal amount included in "Operating Revenue") and actual expenditures made by EEEB for maintenance of the publiclighting system (which average approximately 35-40% of the figure shown).

k/ As projected by ISA.

1/ EEEB uses straight-line depreciation applying adequate rates for each of the major fully revalued asset components.Some typical rates are: existing assets in 1978 3.4%; transmission 2.8%; distribution 3.2%; Mesitas 3.125%;maintenance facilities 4%; data processing and dispatch center 10%.

m/ Costs shown for 1977-1979, other than depreciation (which is based on fully revalued assets) are identical to EEB'sfinancial statements.

n/ Projected by EEEB includes interest on ISA bonds, dividends fr.m ISA and interest on short-term deposits and profitson real estate and equipment sales.

ni See forecast interest charges 1980-1988 in Annex 5.8.

April 2, 1981

ANNEX 5.3- 60 -

COLOMBIA

EMPRESA DE ENERGIA ELECTRICA DE BOGOTA

GUAVIO HYDRO POWER PROJECT

Sources and Applications of Funds 1980-1988(Millions of Col$)

1980 1981 1982 1983 1984 1985 1986 1987 1988

SOURCES

General Cash GenerationNet Income before Interest 2,342 4,358 7,556 11,468 18,000 27,974 43,005 67,602 89,803Depreciation / 1,208 1,546 2,915 3,802 5,226 6,884 8,611 14,996 18,871Increase in Liability Reserves - 254 327 418 533 678 860 1,090 1,376 1,735

Gross Interest Cash Generation 3,804 6,231 10,889 15,803 23,904 35,718 52,706 83,974 110,409

Debt ServiceAmortization t/ c/ 733 1,187 2,236 3,482 4,927 8,687 14,203 17,617 23,869In-erest charged to Income - 731 1,265 1,716 2,302 2,583 3,254 4,109 9,391 15,533

'rotal 1,464 2,452 3,952 5,784 7,510 11,941 18,312 27,008 39,402

N4et Internal Cash Generation 2,340 3,779 6,937 10,019 16,394 23,777 34,399 56,966 71,007

ISA Contributions to Guavio - 856 1,243 2,037 2,363 3,210 2,160 781 -

Borrowings: d/Existing 4,925 8,181 5,034 1,296 455 10 - - -

Proposed Project:iBRD - 2,051 1,916 4,277 6,468 9,083 5,101 659 -

IDB - 1,164 1,327 2,160 2,263 - - - -

Confinancing - 174 701 1,339 3,549 10,021 10,951 5,703 -Suppliers - - - 446 405 7,740 1,900 1,875 -

permanent Electric Financing Facility - 600 5,500 5,000 1,000 h/ 1,000 5,800 9,200 1,500Future - 2,466 510 1,387 12,544 - 3,343 6,465 11,101 8,288

Total Borrowing 4,925 14,636 14,988 15,905 26,684 31,197 30,217 28,538 9,788

TOTAL SOURCES 7,265 19,271 23,168 27,961 45,441 58,184 66,771 86,285 80,795

APPLICATIONS

Construction Program -Ongoing Works 5,906 9,262 9,828 7,125 5,165 2,745 - - -

Guavio Project 176 5,412 5,507 11,029 15,607 29,679 15,326 6,285 -Other Construction - - 672 738 12,621 5,311 22,826 38,719 36,656Sub-total 6,082 14,674 16,007 18,892 33,393 37,735 38,152 45,004 36,656

-Interest During Construction 214 992 3,003 4,503 6,785 8,791 11,369 9,912 5,861

Total Construction Program c/ 6,296 15,666 19,010 23,395 40,178 46,526 49,521 54,916 42,517

Investments in ISA and others -/ 980 2,429 2,554 4,073 5,252 8,937 13,576 26,024 30,751

WorkiLng Capital Increase (Decrease) g/ (206) 1,322 1,564 512 49 2,556 3,602 5,448 7,505

TOTAL APPLICATIONS 7,070 19,417 23,128 27,980 45,479 58,019 66,699 86,388 80,773

Surplus (deficit) of funds 195 (146) 40 (19) (38) 165 72 (103) 22Accumulated 195 49 89 70 32 197 269 166 188

a/ Net addition to reserves for pension and severance pay liabilities; see Attachment 5.2 footnote i/ (c).b/ See forecast debt amortization statement in Annex 5.7.e/ See forecast interest charges 1980-1988 in Annex 5.8.d/ See schedule of existing and proposed debt in Annex 5.5 and forecast loans disbursement statement in 1980-1988 in

Annex 5.6.

e/ See construction program 1980-1988 in Annex 5.9f/ ISA figures agreed by EEEB for planning purposes. Should ISA be unable to service its debt to EEEB, new EEEB investments in

ISA would be reduced by an equal amount.s/ Working capital has been defined as the sum of current assets (other than cash temporary surplus or overdraft) less current

liabilities (exclusive of the current portion of the long-term debt). See projection assumptions in Annex 5.3 footnbtesd/. e/, f/ and h/ and Annex 5.10.

h/ Includes MCol$11355 of ISA four years loan and transference of 2 external loans for financing the purchase of TermozipaIV and V.

April 2, 1981

- 61 -

ANNEX 5 .4

COlOMBIA

EMPRESA DE ENERGIA ELECTRICA DE BOGOTA

GUAVIO DYORO POWER PROJECT

Actual and Forecast Balance Sheets 1977-1988 a! b/(Million of Col$)

------- Actual ------- --------------------------- …Forecast ---------------------------------

1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988

ASSETS

Fixed AssetsGross Fixed Assets in Service 15,883 20,652 26,386 35,736 45,816 89,079 116,416 159,443 201,574 250,589 486,660 604,772Accumulated Depreciation 5,285 7,001 10,066 13,790 18,783 26,018 35,284 47,214 62,124 79,432 105,548 139,196Net Fixed Assets in Service 10,598 13,651 16,320 21.946 27,033 63,061 81,132 112,229 139,450 171,157 381,112 465,576Work in Progress 1,849 2,062 4,687 9,452 31,072 21,827 42,890 73,500 119,175 157,915 27,486 28,140

Total Fixed Assets 12,447 15,713 21,007 31,398 58,105 84,888 124,022 185,729 258,625 329,072 408,598 493,716

Investments-ISA Stocks 552 614 901 1,149 2,054 3,317 5,116 6,297 8,485 12,612 22,252 35,960ISA Bonds 1,064 1,421 2,052 2,681 3,775 4,571 6,593 10,375 16,798 25,766 41,620 58,080

Total ISA 1.616 2,035 2,953 3,830 5,829 7,888 11,709 16,672 25.283 38,378 63,872 94,040Other Investments 346 418 426 529 959 1,454 1,706 1,995 2,321 2,802 3,332 3,915

Total Investments 1,962 2,453 3,379 4,359 6,788 9,342 13,415 18,667 27,604 41,180 67,204 97,955

Current Assets d/Cash: Operational requirements - 551 341 398 528 896 1,341 1,920 2,638 4,116 5,820 6,803 7,487

Temporary Surplus e - 620 - 195 49 89 70 32 197 269 166 188Accounts Receivable 374 568 1,045 1,553 2,270 3,024 3,932 5,717 8,315 12,099 17,481 23,071Inventories - 796 1,068 1,245 1,556 1,970 2,972 3,410 4,636 5,339 6,038 10,233 12,095Other 215 288 530 680 700 740 870 950 1,040 1,140 1,250 1,360

Total Current Assets 1,936 2,885 3,218 4,512 5,885 8,166 10,202 13,973 19,007 25,366 35,933 44,201

TOTAL ASSETS 16,345 21,051 27,604 40,269 70,778 102,396 147,639 218,369 305,236 395,618 511,735 635,872

EQUITY AND LIABILITIES

EquityCapital and Accumulated Surplus 3,039 3,839 5,044 6,655 9,748 15,588 24,754 40,171 64,891 103,787 161,998 236,268Revaluation Reserve 7,507 10,001 13,133 17,488 27,847 34,412 48,070 67,322 92,180 111,722 139,693 189,068

Total Equity 10,546 13,840 18,177 24,143 37,595 50,000 72,824 107,493 157,071 215,509 301,691 425,336

ISA Contributions to Guavio - - - - 856 2,099 4,136 6,499 9,709 11,869 12,650 12,650

Long-Term Debt 4,075 4,670 5,307 9,993 24,621 40,310 57,111 82,611 108,001 130,596 146,900 142,613

Pension Funds and Other Liabilities 734 1,091 1,108 1,362 1,689 2,107 2,640 3,318 4,178 5,268 6,644 8,379

Current LiabilitiesCurrent Portion of Long-Term Debt 316 488 733 1,187 2,236 3,422 4,927 8,687 14,203 17,617 23,869 26,172Accounts Payble and Other

Short-Term Debt -/ 674 962 2,279 3,584 3,781 4,458 6,001 9,761 12,074 14,159 19,981 20,722

Total Current Liabilities 990 1,450 3,012 4,771 6,017 7,880 10,928 18,448 26,277 32,376 43,850 46,894

TOTAL EQUITY AND LIABILITIES 16,345 21,051 27,604 40,269 70,778 102,396 147,639 218,369 305,236 395,618 511,735 635,872

a/ Balance sheets shown for 1977-1979 are identical to EEEB's financial statements except for gross fixed assets is service, accumulated deprecia-tion, work in progress (which are revalued), capital and accumulated surplus snd capital revaluation.

b/ Revaluation rates assumptions are: 1980 and 1981: 25%; 1982: 23%; 1983: 21%; 1984: 19%; 1985: 17%; and 14% in 1986 and thereafter.c/ Cummulative, at cost.d/ Forecast as 10% of annual operating costs less depreciation plus debt service.

e/ Forecast as an annual percentage of total sales: 23% (actual estimate) in 1980; 21% in 1981; 19% in 1982; and 17% in 1983 and thereafter.f/ Forecast as 4% of fully gross revalued assets in operation in 1980 and 1981 decreasing to 2% in 1988.S/ Forecast as 17% of annual construction expenses, plus 17% of energy purchases and investments in ISA and 25% of interest charges. See

Annex 5.10.

April 2, 1981

- 62_

ANNEX 5. 5COLOMBAIA

EMPRESA DE ENERGIA ELECTRICA DE bOOOTA

GUAVIO RDRO POWER PROJECT

Schedule of Enisting and Proposed Debt

----------------------- L... A-, ---------------------- -------------------- LLoa Cuu ditios -C-------------------t--Outnou-ding

Loan (millin. of (Millions of Ceit-ent Interent A-ortiation Grace 12/31/79Dote Currency original currency) equivalent US5) Feen % Rates T (years-soothe) (yearn-rnthe) (MCol$)

FOREIGN LOANS EXISTINGIBRD-246-CC 1960 US$ 17.6 -- - 6.00 22 - - - 327IBRD-313-CO 1962 US$ 50.0 - - 5.75 21 6 - - 1,201IBRD-537-CO 1968 US$ 18.0 - - 6.25 16 6 - - 886IDB-238-CO 1973 US$ 8.0 _ _ 8.00 12 - - - 331IDB-249-CO 1974 U0$ 21.0 - - 8.00 14 - - - 735I.M. I-aliano 1969 Liras 1,816.9 - - 6.00 10 - - - 9Kronditanutolt 1969 D.M. 8.C - - 7.00 10 - - - 2Ecport-I.p.ort Bank Japac 1969 Y-ena 1,080.0 - 6.75 10 4 - -5Onport-InPoct Buok BOA 1972 US$ 2.1 -- 6.00 5 -5 6C; Itoh and Co. Ltd 1972 YTres 1,010.9 - - 6.75 10 - - - 37First Nuticoal Ciy Bank 1972 U0$ 7.5 - - k + LIOR 5 - - - 90The Meboan C-rp-rat-on 1977 us$ 8.0 - - ½ + LIbOR 5 6 - _ 352FONADE Fo-328 1978 US$ 4.3 - - 24.00 4 8 - - 2

LOCAL EXISTING LOANSLocu] B2nko 1978 Col$ 850.0 - _ 737

TOTAL 02100001

MESITAS PACKAGE,IBRD 1628-CO 1979 US$ 84.0 - 0.75 7.35 13 - 4 - 472

_orgac Grenfell 1979 US$ 55.1 - 0.75 7.50 8 6 3 -Lloyds 1980 US$ 22.9 - 0.38 3/4 + LIBOR 5 6 5 - -Supplierr 1980 US$ 21.1 - - 9.00 6 - 2ASRA 1981 US$ 10.0 _ 0.10 7.75 9 - 3 - -

OBRAS COMPLEML2{TARIAS" LOASCotneciaol BS.ks 1981 US$ 18.3 - 0.73 13.00 8 - 3

DISTRIBUTION L0ANSBridge Laoa Urbso Distribution 1980 U0$ 4.2 - 0.50 13.00 1 - 1IBRD 1807-CO Urbon Diotribltico 1981 US$ 87.0 - 0.75 8.25 14 - 3 -Ucbhn Dituihoti-c Other BSuks 1983 US$ 11.8 - 0.75 13.00 5 - 3Orban Dio,rktuotic 1985-1987 1984 US$ 128.4 - 0.75 8.25 14 - 4KEU Eltctiicaci coral 1980-1985 1981 D.M. - 18.1 0.25 5.50 20 - 10 -R-ura Elecfrfi-cti-o: Other Bunks 1985 US0 3.4 - - 9.00 4 - 2

G1AVIO LOANS1 00-CO 1981 US$ 359.0 - 0.75 9.60 14 - 4 -IDS-CO 1981 US$ 100.0 - 1.25 9.25 13 6 6 6Guu-ic Suppli.ers 1983 US$ 129.0 - - 9.75 - 3 -Cofinancing:

C-ercial Backs No. 1 (ieterestduing -ocracotti-o refi-anciog) 1981 US$ 31.9 - 0.50 7/8 + LIBOR 6 - 4

Co=:rrial Backs Nc. 2 1903 US$ 118.2 - 0.50 7/8 + LI0R 6 - 4C.omercial Banks Nu. 3 (interest

d-risg co-strtio ic fioc .nanciog) 1984 US$ 98.0 - 0.50 7/8 + LIOR 6 - 4Ccstsercil Sacks Nc. 4 (interrutduringoconstrucution r-.ianc.ig) 1983 US$ 24.5 - 0.50 7/8 + LIBOR 6 - 4

Conrcil Backs N-. 5 (interestd-ring co_s_rct ioc refinancicg) 1986 US$ 66.8 - 0.50 7/8 + 1BOR 6 - 4

DISTRIBUTION L(bANSUrbac Disttib.tico 1987-1990 1987 US0 235.9 - 0.75 9.60 14 - 3

RURAL ELRCTRIF]:CATION 1986-1990 1986 US$ 40.1 - 0.25 6.00 20 10 -

FONADE 1980-5982 1980 Col$ 700.0 13.5 1.5 18.00 5 - 2 -FONADE-1983-2985 1983 Col$ 650.6 7.9 1.3 18.00 5 - 2 -

0ONAOE 1986-1.988 1986 Co0I 1,084.1 10.5 1.5 18.00 5 - 2 -

OTHER COMMERCI0AL BANKSChaue Manhutuo No. 1 1981 US$ 34.0 r 1.00 3/4 + LIBOR 5 - 5Chase Sanhusouc Nc. 2 1981 US$ 35.0 - 1.00 3/4 + LIbO1 5 - 5 -Fondo dO DS.-rocllo Elecri-co Nc. 1 1980 Col$ 1,421.0 30.d: - 28.00 1 6 1 6Eondo dA Desa 1rollo Electrico Nc. 2 1981 Col$ 600.0 11.0 - 26.00 1 6 1 6PPE - 1982 1982 0uS$ 5,508.0 87.9 -24.00 5 - 2 -PEFF - 1983 1903 cl$ 5,000.0 69.4 _ 24.00 5 - 2 -PEFF - 1984 1984 Col$ 1,000.0 12.1 _ 24.00 5 - 2 -PEFF - 1985 1985 Ccl$ 1,000.0 10.7 - 24.00 5 - 2 -PEFF- 1986 1986 Col$ 5,600.0 54.2 _ 24.00 5 - 2 -PE8E - 1987 1987 Col$ 9,200.0 80.6 - 24.00 5 - 2 -PEFF - 1988 1988 Ccl$ 1,500.0 12.0 - 24.00 5 - 2 -

LONG-TERN DEBT CURR0 NT PORTION

6996048

April 2, 1981

- 63 -

ANNEX 5.6

COLOMBIA

EMPRESA DE ENERGIA ELECTRICA DE BOGOTA

GUAVIO PYDRO POWER PROJECT

Forecast Loans-Disbursement Statement 1981-1990(Millions of Col$)

1980 1981 1982 1983 1984 1985 1986 1987 2988

EXISTING LOANSFONADE FO-328 - 144** - - - - - - _

Mesitas Package: * *

IBRD 1628-CO 1,603* 2,557* 192* - - - - - -

Morgan Grenfell 1,603* 1,064* 98

Lloyds 593 563 - - - - - -

Suppliers - -* 1,319 -

ASEA - 241 349 - - -

"OBRAS COMPLEMENTARIAS" LOANS * * * *

Commercial Banks - 239 138 346 157 485-

DISTRIBUTION LOANS

Bridge Loan Urban Distribution 197 -* -* - -

ILk) 1807-CO Urban Distribution - 1,683 2,779 841

Urban Distribution etber Banks - - - 852* -

Urban Distribution 1985-1987 - -* - - 815 2,298 5,525 4,594

KFW Electrificacion Rural 1980-1985 - 79 296 4555 455* 10* - -

Rural Electrifications: Other Banks - - - - - 315* - -

GUAVIO LOANSIBRD-CO - 2,051* 1,916 4,277* 6,468* 9,083 5,101 659 -

IDB-CO - 1,164 1,327 2,160* 2,263 - -

Guavio Suppliers - - - 446 405 7,740 1,900 1,875-

Commercial Banks No, 1 (interestduring construction refinancing) 1981-1983 - 174* 701 1,260 - - -*

Commercial Banks No. 2 _ - - 79* 867 5,231 3,366 2,103-

Commercial Banks No. 3 (interestduring construction refinancing) 1984-1986 - - - - 2,082 3,190 3,985 -

Comercial Banks No. 4 (interestduring construction refinancing) 1984-1985 - - - - 600 1,600 - -

Commercial Banks No. 5 (interestduring construction refinancing) 1986-1987 - - - - - - 3,600 3,600

DISTRIBUTION LOANSUrban Distribution 1987-1990 - - - - - - - 5,358 6,955

DISTRIBUTION LOANSElectrificacion Rural 1986-1990 - - - - - - 579 751 895

STUDIESFONADE 1980-1982 - - - - - - - - -

FONADE 1983-1985 - - - - - - - - -

FONADE 1986-1988

Subtotal - 323** 372** 189** 217** 245** 361** 398** 438**

OTEER COMMERCIAL BANKSChase Manhattan No. 1 - 1,850* - - - -Chase Manhattan No. 2 - 1,904Fondo de Desarrollo Electrico No. 1 1,421 - - - - --

Fondo de Desarrollo Electrico No. 2 - 600 -**

PEFF - 1982 - - 5,500PEFF - 1983 - - - 5,000 1 -

PEFF - 1984 - - - - 1,000PEFF - 1985 - - - - - 1,000PEFF - 1986 - - - - - - 3,800PEFF - 1987 - - - - - - - 9,200 *

PEFF - 198 - - - - - - - - 1,500

ISA TERMOZIPA - - - -11,355 - - - -

TOTAL LOANS 4,925 14,636 14,988 15,905 26,684 31,197 30,217 28,538 9,788

Local Currency 1,421 1,067 5,872 6,489 12,572 1,245 6,161 9,598 1,938

Foreign Currency 3

4.5

04

13,569 9,116 10,716 14,112 29,952 24,056 18,940 7,850

April 2, 1981

- 64 -

LiNEX 5.7

COLOMBIA

EMPRESA DE ENERGIA ELECTRICA DE BOGOTA

GUAVIO HYDRO POWER PROJECT

Forecast Debt Amortization Statement 1980-1990(Millions of Col$)

1980 1981 1982 1983 1984 1985 1986 1987 1988

FOREIGN LOANS EXISTINGFOREIGN LOANS EXISTING

IBRD-246-CO 114 131 151 174 199 - - - -IBRD-313-CO 191 220 253 291 334 378 418 225 -IBRD-537-CO 126 145 167 192 221 248 274 302 162IDB-238OC-CO - 35 41 47 54 60 66 73 80IDB-249OC-CO - 37 88 101 116 129 141 156 171I.M. Italian- 10 12 - - - - - - -Kreditaustalt 7 4 - - - - - -Export-Import Bank Japan 7 8 4 - - - - - -Export-Import Bank USA 20 24 27 31 - - - -C. Itoh Co. Ltd. 20 24 27 - - - - - -First National City Bank 74 86 48 - - - - - -The Merban Corporation - - - 112 129 146 163 179 -FONADE F0-328 - - 132 152 - - - - -Termozipa IV Loan - - - - 304 340 375 412 228Termozipa V Loan - - - - 478 539 599 657 723

LOCAL LWARS EXISTING 16 23 23 1 1Local Ea_nks 164 234 233* 118* 107* - - - -

TOTAL EXISTING 733 980 1,171 1,218 1,942 1,840 2,035 2,004 1,364

MESITAS PACKAGEIBRD 1628-CO - - - 465 534 602 667 734 808Morgan Grenfell - - - 482 553 620 684 753 829lLoyds - - - - - 427 473 520 573Suppliers - - - 253 290 328 363 399 439AREA - - - - 92 104 115 126 139

"OBRAS COMPLEMENTARIAS" LOANSCommercial Banks - - - - 99 233 258 284 313

DISTRIBLTION LOANSBridge Loan Urban Distribution - 227 - - - - - - -IBRD 1807-CO Urban Distribution - - - - 513 580 642 706 777Urban Distribution Others Banks - - - - - - 244 269 296Urban Distribution 1985-1987 - - - - - - - - 1,147KFW Electrificacion Rural 1980-1985 - - - - - - - - -Rural Electrification: Other Banks - - - - - - - 96 105

GUAVTO LOJANSIBRD-CO - - - - - 1,259 2,746 3,023 3,326IDE-CO - - - - - - - - 963Guavio Suppliers - - - - - - 1,662 1,830 2,013Cofinancing:

Commercial Banks No. 1 (interestduring construction refinancing) - - - - - 270 599 659 725

Commercial Banks No. 2 - - - - - - - 2,250 2,476Commercial Banks No. 3 (interest

during construction refinancing) - - - - - - - - 2,038Corercial Banks No. 4 (interest

during construction refinancing) - - - - - - - - 513Commercial Banks No. 5 (interest

during construction refinancing) - - - - - - - - -

DISTRIBUTION LOANSUrban Distribution 1987-1990 -

RURAL ELECTRIFICATION 1986-1990

STUDIESPONADE 1980-1882 - - 134 154 154 154 83 - -FONADE 1983-1985

FONADE 1986-1988 _130** 130** 13* 13

_ -- - 239OThER COMMERCIAL BANKS

Ch-ase Man-hattan No- 1Chase Manhattan No, 1 - 703 775 851Chase Manhattan No, 2 ~ ~ ~ ~ ~ ~ ~ ~ - - - 540 599 659 725Foond de Desarrollo Electri-o No. 1 - - 711 710* - 6 Fondo de Desarrollo Electrico No. 2 - - 200 200 200PEET -1I982 - - - 550 1,100* 11PEFF - 1983 O** 00** 1,IO** 1,ioo**PEEP -1984 - -- - 500 l,0O00' 1,000** l,000**PEEP -1985 - -- - - 100i 200*~ 2)0,*

PE" - 1986 ~ ~ ~ ~ ~ ~ - - - 1.00 200*PEFF - 1987 - - - . 580PEFF - 1988 - -

TOTAL 733 1,187 .2,236 3,482 4,927 8,687 14,203 17,617 23,869

** Foreign Currency 569 953 938 2,300 3,916 6,803 11,790 15,087 20l420Local Curreny 164 234 1,298 1,182 1,011 1,884 2,413 2,530 3,449

-65- ANNex 58

L'017 IA

GURSA D! EDIGIf A ElCTIlCA DE BOGOTA

Porecast Interest ChargeS 1980-1990thilliLons of ColOS

1980 1981 1982 1983 1984 1995 1986 1987 1988

FDOIEIG LOANS EXISTING8IBRD-246-C0 31 28 24 17 - -

IBRD-313-CO 77 76 72 66 5 2 2

7BRD-537-CO 63 64 63 61 56 48 36 22 4

50B-2380C-00 28 32 34 35 3 36 35 33 30

LLd-2490C-CO 68 78 89 95 lo0 101 101 99 95

IM. ItalLano 1Krenditana.alt tEtnpoel-tIport Bank Japan Iinpost- Iport B nk g5A 4 3 3 1

C. Itho and Co. Ltd. 4 3 1First National City Sank 23 13 3 - - -

FOYADE CtP .. B ti.3 350 8 4 3 66 66 58 46 29 8The.sbnCroair1 40 ~ 43t 11 - -

Tetnosipa IV Loon - - - - 163 148 126 95 64

Temosipo V Loan . . . - 291 277 249 210 163

LOCAL LOANS XI1STI1GLo-e1l k- 135 98 81 41 8 - - _

TLOTAL 1EXISTIN 505 493 479 394 776 698 598 469 356

1880 1628-ACo 79 _/ 233 1273 427 451 465 465 458 445

15319

Hnrg.n Grenfell 62!/ 180*/ 85 288 290 283 263 234 197

Ll.yd. 41 */ 123 a/ 12 194 222 226 194 15 101

SopplLers - - 20 at 125 118 103 82 54 2040 -

a3tA - 9' 2L4 5/ 16 61 61 Y8 54 4912-

"OBAS COMPLDTlI AS OA S 5 11 5* a/ 86 132 168 186 170 115

DIST'8LTION LOANS BrdeLa ra lnitrlbollifl 13 15 0

1080D 1007-CO Urban DLntrLbotlos 13- 69- 274-/ 428- 28 598 609 612 bO9IBRD 1807-CO ftb.. Di-llib-ti- 55 ~ ~~~~~286 '

U,sno Dnistibution Other Bank- 63 143 143 122 96at

Urban Dlstribotlon 1905-1987 - - - - 34 a/ 171 a/ 261 at 1,115 1,278Utb- Di.~~~~~~~ib.ti- 1985-1987 ~~~~~~~~261-

KF1I4 elerific-ioon RNaal 1980-1985 - 2 13 3/ 37 -/ 69 _/ 46 103 113 12546 a

Rorol Elrrtrifiooli- Other Banko - - - a -k 7 3/ 24

GUAVIO LOANS1051-CO - 120 - 1 63 621 at1,437 at2 50 375a b~t 3126

IDB-CO - 60 a' 238- 418 a 677 o 8 858 a 950 1046 1138IDB-CO 0 21 ~~~~~~~~~~~6 46 02~ 114 :125Guavi Sopplier- - - 22

Cof inan.ing:C-sa , Ial Basin No. I (le--a 1 216 382 116 1 6

dal8ottotion -sflo-nig7 - 1 ~ ± a/ 36 18 6Cnor'sal Banks No. 2L6 - -350 1 / 513 -/ 1,136 1,534 kt 1.513Cnereia lar"^ks No. 3 (itrsCdrein nnBatr- rt-on 3fi-na-in) - 163 A/ 531 1,049 1,423 b/ 1,447

Co trnlal lek. No 4 (intlsst_dosing cnsetronitln re,fm-naning - - - 45A 196- 325- 358 361

Caot stcini Bankn No. S (interest a?a

drting conntrnktioN st itnan-ing) - - 257 - 752 - 1,075

DISTRIBUTION LOANS

Urb-n DOittiboti.n 1987-1990 - - - - - - - 1,221 a 773

RURAL ELECTRIFICATION 19N6-1990 - - - - 1 7 1 / 61±' 121

STUDIESfONaDe 1980-1982 - 43 92 at 9 7 al 69 42 at 1 4

3-

FONADE 1983-1985 - - - 17 / 54 83 a 82 at 9 a 5FONlADE 1986-1988 - 3 0 100 - 15-

?0NADR 1989-1991 - - - -

OTHER COMMERCIAL BANKSChas Manhattan N. 1 - 127 292 335 / 385 434 433 371 291

Chaso Man.attan N. 2 6 398 372- 401 361 318 250

rondo de Denosoll Elso r No.' 199 398 398 100 - - - - -

rondo de _esa .rollo Ulertsiao No. 2 - 78 156 81 26 - -

PEEP -1982 - - 600±/ 1,32C0 2 1320!/ 1,122 858 Al 594 b/ 330

PEP -1903 _ _ - 600-1 1.2000! 1:200 ± 1020 704GFY?- 1364 - - - - 720' '240 '240 206/ 540

P0FF- 1985 - - - - - 120±a 240 2400! 20490F-18 9± ,8± 1,392

PFFE- 1907 - - - - - - - 1,l04±- 2,208

P7P- 1988 - - - - - - - - 180

L0bOR ADJUSTMENT S - 163 315 248 - - - - -

REVOLVING LOANS - -_ - 22- 792

COMJJTMENT FEE ADJUST151T AS 46 46 19 66 61 75 73 227 169

T7TAL 945 2,257 4,719 6.805 9,368 12,045 15,478 19,303 21,394

TOTAL ChARG4 D TO INCO1 E 731 1,265 1,716 2,302 2.583 3,254 4.109 9.391 15,533

TOTAL CHARGED TO CONSTRUCTION 214 992 3.003 4,503 6,785 8.791 11,369 9,912 5,861

a/ Changed to Constr-tion.b/ Charged partially so Constrti.m-n.S/ Thin adj.sent -nfleots Libor sales present nstiatet fos 1981-1983i/ Some dabt ser-eie. have been son nith a program which nalpnlates nsparoiely the corsitent fee.

April 2, 1981

- 66 -ANNEX 5.10Attachment 1

COLOMBIAELECTRIC SECTOR CONSOLIDATION

FOR THE PERIOD BEGINNING JAN 1, 1979REPORT PREPARED FEB 20, 1981

2 3 4 5 6 7 8 9 10 11 121980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990

'5 INCOME STATEMENT.3196 COL$'000'0003197 3300 SALES [N GWH3310-3320 COMMERCIAL 15732.0 17500.0 19396.0 22201.0 24330.0 27370.0 29687.0 32679.0 35824.0 32595.0 36188.0

3395 TOTAL 15732.0 17500.0 19396.0 22201.0 24330.0 27370.0 29687.0 32679.0 35824.0 32595.0 36188.0

3400 REVENUE/KWH SOLD3410 ----

3420 COMMERCIAL 1.441 2.068 2.918 3,767 4.835 5.994 7.367 8.465 9.719 10.482 11.909

3595 AVE REV/KWH SOLD 1.441 2.068 2.918 3.767 4.835 5.994 7.367 8.465 9.719 10.482 11.909

4110 OPERATING REVENUES4115-4200 COMMERCIAL 22674 36192 56594 83624 117632 164045 218710 276644 348167 341671 430976

4252 TOTAL SALES REV 22674 36192 56594 83624 117632 164045 218710 276644 348167 341671 4309764270 OTHER 1890 3052 4592 6557 9055 12458 16972 21219 26412 2B692 35696

4530 TOTAL 24564 39244 61186 90181 126687 176503 235682 297863 374579 370363 466672

4601 OPERATING EXPENSES4602 -------------------4640 EEEB 1916 2675 3660 4718 6271 8172 10563 13336 16722 21290 268644650 EPM 1143 1459 1874 2373 3042 3708 4467 5255 6188 7179 83264660 CVC 729 978 1204 1362 1448 1719 1958 2230 2863 3329 37114680 ICEL GR;OUP 3525 5212 7200 8556 11232 14425 17437 18449 25162 31465 359154710 CORELCA 1548 2499 4124 5569 7362 11457 15148 17318 21634 28989 335004720 CORELCA-ELEC. 2695 3733 5010 6542 8952 11279 14606 18788 24802 0 04730 ISA 321 557 1335 2140 2188 2607 3143 3656 4303 5472 72064950 DEPRECIATION 4897 6762 10440 14896 20125 27316 32962 46051 55200 63487 80584

4990 TOTAL 16774 23875 34847 46156 60620 80683 100284 125083 156874 161211 196106

5010 OPERATING INCOME 7790 15369 26339 44025 66067 95820 135398 172780 217705 209152 270566S020 OTHER I:NCOME NET 438 119 21 -143 -359 -728 -1180 -1464 -1827 -2886 -3360

;S030 NET INCOME BEF INT 8228 15488 26360 43882 65708 95092 134218 171316 215878 206466 2672065040 INT CHARGED OP 4314 5739 8264 11274 141B9 17174 21153 29124 33292 35846 38393

S060 NET INCOME 3914 9749 18096 32608 51519 77918 113065 142192 182586 170620 228813

-67 -ANNEX 5.10Attachrient 2

COLOMBIAELECTRIC SECTOR CONSOLIDATION

FOR THE PERIOD BEGINNINO JAN 1. 1979REF'ORT PREPARED FEB 20, 1981

2.0 3.0 4.0 5.0 6.0 6.5 7.0 8.0 9.0 10.0 11.0 12.0 12.51980 1981 1982 1983 1984 1984 1985 1986 1987 1988 1989 1990 1990

TOTAL TOTAL

6001 SOURCE AND USES6002 OF FUNDS6005 CURRENCY6007 ----- …__________6010 INTERNAL SOURCES6020 -NET INCOME BEF IN 8228 15488 26360 43882 65708 159666 95092 134218 171316 215878 206466 267206 10901766030 -DEPRECIATION 4897 6762 10440 14896 20125 57120 27316 32962 46051 55200 63487 80584 305600

6060 TOTAL 13125 22250 36800 58778 85833 216786 122408 167180 217367 271078 269953 347790 1395776

6080 OPERATIONAL RE-6081 QUIREMENTS6090 -WORKING CAFITAL -372 3318 3120 5768 9206 24647 9154 16499 12918 23363 22270 31390 1155946100 -DEBT SERVICE 13544 17367 26818 39564 51499 148792 71965 94167 118516 142598 173380 192748 7933746120 OTHER CHG -730 -893 -1160 -1467 -1811 -9668 -2208 -2637 -3300 -3869 -3789 -4499 -20302

6140 TOTAL 12442 19792 28778 43865 58894 163771 78911 108029 128134 162092 191861 219639 888666

6160 NET AVAILABLE6170 FROM OPERATIONS 683 2458 8022 14913 56939 53015 43497 59151 89233 108986 78092 128151 507110

6190 CONSTRUCTION-6191 REQUIREMENTS6200 -ONGOING WORKS 31196 67744 84114 103833 98257 385144 134219 149923 216473 211409 206453 246594 1165071

6290 L/T INVESTMENTS 90 39 110 126 139 504 151 150 171 If4 235 1410- 2311

6295 TOTAL 31286 67783 84224 103959 98396 38564& 134370 150073 21664 211603 206688 248D04

6310 BALLNCE TO FINANCE 36l61 65325, 7620? 89046 _ 71457 332633 90873 90922 127411 102617 128596 119853 660272

6330 FINANCED BY:6340 F.C. EXISINT98NTIN 11033 12107 4264 1104 0 28508 0 0 0 0 0 0 06350 F,C.FUTURE 6073 26739 43962 56329 51971 185074 82204 89861 119776 108822 108525 138301 6474896360 LOCAL C. EXISTING 1635 189 5 0 0 1829 0 0 0 0 0 0 06370 LOCAL C FUTURE 2372 5350 5436 4184 1830 19172 3798 5330 8852 4696 2391 1816 26883

6410 -EQUITY 8784 19899 22178 26646 26054 103561 19676 17277 18970 20250 14226 1088 91487

6460 TOTAL 29897 64284 75845 88263 79855 338144 105678 112468 147598 133768 151 141205 L

6575 SURPLUS(DEFICIT)65eo OF FUNDS -706 -1041 -357 - 783 8398 5511 14805 21546 20187 31151 -3454 21352 1055876600 ACCUMULATED -706 -1747 -2104 - 2887 5511 5511 20316 41862 62049 93200 89746 111098 111098

- 68 -ANNEX 5.10Attachment 3

COLOMBIAELECTRIC SECTOR CONSOLIDATION

FOR THE PERIOD BEGINNING JAN 1. 1979REPORT PREPARED FEB 20, 1981

1 2 3 4 5 " 6 7 8- 9 10 It 121979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990

7510 BALANCE SHEETS7515 COL$'000'0007520 ------------------7540 ASSETS7550 ------7560 PLANT IN OPERATION 122554 169649 236014 356964 501122 741908 912694 1230413 1573826 2044898 2386334 30115997570 LESS: DEPRECIATION 28416 40417 57283 80898 112783 154337 207890 269957 353802 458534 586216 748870

7580 NET PLANT 94138 129232 178731 276066 388339 587571 704804 960456 1220024 1586364 1800118 2262729

7600 WORK IN PROGRESS 33447 60206 127400 185103 268086 2B3437 444508 477492 615353 661204 894735 916293

7618 L/T INVESTMENTS 4210 4300 4339 4449 4575 4714 4865 5015 5186 5380 5615 7025

7625 CURRENT ASSETS7627 -CASH AND BANKS7630 OPERATIONAL REQU 1765 1850 2500 3500 4700 6100 8000 10500 13900 17200 17500 210007631 TEMPORARY SURP 0 0 0 0 0 5511 20316 41862 62049 93200 89746 1110987632 -ACCOUNTS REC 13803 14542 22616 31354 42095 54678 72331 94541 125110 155411 187104 2245927645 -OTHER II 3607 3607 3607 3607 3607 3607 3607 3607 3607 3607 3607 3607

2670 TOIAL 19175 19999 28723 38461 50402 69896 104254 150510 204666 269418 297957 360297

7690 TOIAL 150970 213737 339193 504079 711402 945618 1258431 1593473 2045229 2522366 2998425 3546344

7710 LIABILITIES7720' --

7730 EQUITI7770 -CAPITAL 16492 25276 45175 67353 93999 120053 139729 157006 175976 196226 210452 2115407820 -RETAINED EARNINGS 13618 17;532 27281 45377 77985 129504 207422 320487 462679 645265 815885 1044698

7985 -REJVALUATION RESER 51535 11582L 126355 181305 _249916 _335745 451507 558982 709729 874517 1075240 1216 3Y__ ... _ . _ _ ._ ._ _ _ ........... .. ........... ....... .. ... ... .. ...... .. ... ......... ........ ......... . .. . ....... . . . . .... .. . ... .... .... ...

7995 TOTAL 88645 128628 198811 294035 421.900 585302 798658 1036475 1340384 1716008 2101577 2532071

8010 LONG TERM DEBT 50405 70557 118490 180017 251052 318165 405015 491392 606088 702294 779272 881800

8030 CUR'NT LIABILITIES8040 -ACCOUNTS PAYABLE 8387 9583 14989 21607 27780 32557 42956 51167 72218 82456 92179 1017778070 -OVERDRAFTS 0 706 1747 2104 2887 0 0 0 0 0 0 0

8090 TOTAL 8387 10289 16736 23711 30667 32557 42956 51167 72218 82456 92179 101777

8110 OTHER LIABILITIES 3533 4263 5156 6316 7783 9594 11802 14439 17739 21608 25397 29896

9100 TOTAL 150970 213737 339193 504079 711402 945618 1258431 1593473 2045229 2522366 2998425 3546344

9220 DEBT/DEBT I EQUITY 36 35 37 38 37 35 34 32 31 29 27 269221 DEBT/EQUITY 0.6 0.5 0.6 0.6 0.6 0.5 0.5 0.5 0.5 0.4 0.4 0.3

COLOMBIA

ELECTRIC SECTOR CONSOLIDATION

OPERATING REVENUES

(millions of Col $)

1980 1981 1982 1983 1984 1985 1988 1987 1988 1989 1990

Sales in G01EEER 4.oogo, 4.410.0 4.875.0 5.393.0 5.967.0 6.60o,o 7.315.0 8.io4.o 8.982.0 9.960.0 11.048,0EPM 3.065.0 3.300,0 3.503.0 3.714.o 3.922.6 48.183.2 4.467.4 4.765.6 5.085,0 5.423.4 6.170.9cvc 2.548.0 2.782.0 3,077.0 3.364,o 3.619,0 3.941.0 4.301.0 4,717.0 5.129.0 5.582.0 6.041,0ICEL - Electrificadoras 3,714.6 4.207.5 4.894.5 5,614.3 6.136.9 7.339.0 7.657.5 8.539.,9 9.547.5 10.670.8 11,959.0CORELCA 49.5 133.6 43.5 693.3 776.1 825.3 866.4 913.0 946.1 958.4 969.1CORELCA - Electrificadoras 2.346.0 2.667.0 3.003.0 3.422.0 3.908,0 4.476.o 5.080,0 5.639.0 6.134.0 n.a. n.a

Total .GWH 15.732 17.500 19.396 22.201 24.330 27.370 29.687 32.679 35.824 32.595 36.188

aO

Operation RevenuesREEE 5.917.2 9.274,5 15.141.o 21.994,5 31,958,8 46.452.5 67.541,9 85.241.4 107.614.8 135,905.2 171,697.4

CPM 3.344.0 5.097.0 7.954.0 12.437.0 17.183,6 23.278.9 29.716.5 36.202.1 44.110.1 53,337.8 65,663.5cvc 3.217,5 5.210.1 8.072.6 i0.680.1 13,663.7 17,416.1 21.665,7 27.o94.2 33,582.6 41,666.6 51,393,3ICEL - Electrificadoras 5.317.3 7.978,4 11.745.4 17.087.4 25.147.0 37.(40.9 47,805.3 61.617.7 79-589.0 102.829.0 133,238.0CORELCA 81.0 118.3 961.7 2,340.4 3.-196.3 4,o44.6 4.840.5 5.814.8 6.868.6 7.932.8 8.983.8CORELCA - Electrificadoras 4,796.8 8.513,6 12.719.7 19.084,9 26.483.0 35.812,1 47.139,8 60.673.8 76.402.2 n.a. n.a.

Total Re-venues 22.674 36.192 56.594 83.624 117,632 i64.o45 218.710 276,644 348.167 341.671 430.976

Average Tariff Col. $/KWH 1.8441 2,o68 2.918 3.767 4.835 5.994 7.367 8.465 9.719 10.482 11.909

Other Operation RevenuesEEBR 769,0 1,206,0 1.968.0 2,859.0 4,155,0 6.039.0 8.780.0 11.081.0 13,990.0 17.668.0 22.321.0

EPM 7,9 9,9 12.2 14.7 17.5 20.5 23.3 26.6 30,3 34.6 39.4cvc 46.o 60,o 75.0 93.0 113.0 136.0 160.0 187.0 220.0 259.0 305,0ICEL - Electrificadoras 408.8 492.7 595.8 723.2 881.2 1.079.2 1.319.9 1.520.9 1.752.6 2,019.9 2,328,1CORELCA 435.7 891.9 1.369.9 1,998.4 2.708,1 3.587.9 4.590.2 5.766.1 7.098.3 8.710.7 10.702.5CORELCA - Electrificadoras 222.2 391.7 571,4 868.2 1.180,2 1.595.6 2.098.3 2.637.6 3.320.3 n.a. n.a.

Total 1.890 3.052 4.592 6,557 9.055 12.458 16,972 21,219 26.412 28.692 35.696

OH

ANNEX 5.10- 70 - Attachent 5

COLOM}IA

ELECTRIC SECTOR CONSOLIDATION

CONSTRUCTION PROGRAM

(Millions of Col $)

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990

G:NERATION 22,968 46,576 56,689 81,287 77,246 109,602 121,531 170.187 170,237 175,372 206,466

TIRANSMISSION 4,102 9,861 13,052 11,399 9,726 10,284 8,796 10,835 11,791 827 1,036

DISTRI8BTION 1,890 7,118 9,877 8,111 6,707 8,995 13,342 24,839 18,501 22,685 28,881

E'iTUDIES 1,010 3,152 3,335 2,226 3,167 3,455 4,290 6,716 5,388 5,370 6,998

O'5.ER 1,227 1,038 1,150 810 1,412 1,883 1,964 3,896 5,492 2,199 3,214

TOTAL 31,197 67,745 84,103 103.833 98,258 134.219 149,923 216,473 211,409 206,453 246,595

Rate of Exchange I USS= 47.30 54.40 62.60 72.00 82.60 93.25 103.25 113.65 125.05 137.55 151.30

TOTAL !4US$ 659.6 1,245.3 1,343.4 1,442.1 1,189.5 1,939.3 1,452.0 1,904.7 1,690.5 1,500.9 1,643.0______ ===== ===== ===== ====== ======= ======== ======-= ======== ========- -===

AEX510

COLOMBIA Attachmt 6

ELECTRIC SECTOR CONSOLIDATION

CONSTRUCTION PROGRAM(million nf Co$I

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990

FOREIGN CURRENCY

EE8E 3,748.9 9,690.1 8,655.1 9,423.0 11,412.3 25,268.4 16,496.1 19,562.1 8,522.9 11,122.6 14,264.3EPM 295.2 1,940.4 6,003.9 7,633.3 5,779.0 4,485.7 1,095.8 402.8 208.8 592.8 1,370.2CVC 1,107.7 1,284.3 3,480.1 1,500.8 1,230.4 792.8 303.2 252.3 409.3 475.3 552.1ICEL ELECTRIFICADORA5 1,073.4 7,135.9 10,342.0 15,132.7 12,358.1 3,805.2 2,501.6 1,591.2 - - -CORELCA 4,572.2 4,955.7 4,862.8 8,782.0 8,253.8 9,980.6 12,699.6 8,891.4 2,442.3 - -CORELCA ELECTRIFICADORAS 163.2 1,210.6 1,184.5 79.7 136.0 1,208.9 707.3 416.2 1,365.1 - -ISA 6,070.2 10,811.9 12,128.6 12,660.4 12,651.4 33,077.6 49,122.8 86,275.7 97 211.4 98,227.1 124,945.0

Sobto .1: 17,030.8 37,028.9 46,657.0 55,211.9 51.821.0 78,619.2 82,926.4 113,391.7 110,159.8 110,417.8 141,131.8

LOCAL CURRENCY

2,763.7 5,408.9 7,783.6 9,774.5 11,057.2 13,047.5 22,122.7 29,968.0 28,715.8 34,965.2 42,660.9EPM - 1,352.5 2,514.8 3,913.5 4,892.3 4,948.8 3,673.9 1,046.1 1,037.7 1,168.7 1,663.8 1,938.3CvC 1,114.6 1,741.0 2,787.0 2,488.9 997.7 671.1 662.8 890.3 939.6 1,120.0 1,331.9ICEL ELECTRIFICADORAS 1,002.7 7,607.3 10,768.8 12,692.2 10,396.2 4,847.5 2,646.9 1,871.4 1,144.7 1,295.6 1,467.4CORELCA 1,784.3 2,934.6 2,752.2 4,750.5 5,477.4 6,732.4 7,428.1 5,988.9 1,271.8 615.8 1,949.4CORELCA ELECTRIFICADORAS 294.7 1,223.3 1,193.4 623.6 932.2 1,492.3 2,230.9 3,177.1 4,501.0 - -ISA 5,853.0 9.285.6 8,258.2 13,399.0 12,626.9 25,135.1 30,859.2 60Q147.9 63,507.8 56.374.5 56,114.6

S3bto.tl: 14,165.5 30,715.5 37,456.7 48,621.0 46,436.4 55,599.0 66,996.7 103,081.3 101,249.4 96,034.9 105,462.5

TOTAL

EEE8 6,512.6 15,099.0 16,438.7 19,197.5 22,469.5 38,315.9 38,618.8 45,530.1 37,238.7 46,087.8 56,925.2EFM 1,647.7 4,455.2 9,917.4 12,525.6 10,727.8 8,159.6 2,141.9 1,440.5 1,377.5 2,256.6 3,308.5CVC 2,222.3 3,025.3 6,267.1 3,989.7 2,228.1 1,463.9 966.0 1,142.6 1,348.9 1,595.3 1,884.0ICEL ELECTRIFICADORAS 2,076.1 14,743.2 21,110.8 27,824.9 22,754.3 8,652.7 9,148.0 3,462.6 1,144.7 1,295.6 1,467.4CORELCA 6,356.3 7,890.3 7,600.0 13,532.5 13,731.2 16,713.0 20,127.7 14,880.3 3,714.1 615.8 1,949.4CORFLCA ELICTRIFICADORAS 457.9 2,433.9 2,377.9 703.3 1,068.2 2,701.2 2,938.2 3,593.3 5,866.1 - -ISA 11,923.2 20,097.5 20,386.8 26,059.4 25,278.3 58,212.7 79,982.0 146,423.6 160,719.2 154,601.6 181,059.6

GRAND TOTAL 31,196.3 67,744.4 L4,113.7 103,832.9 98,257.4 134_219.0 149,923.1 216,473.0 211,409.2 206,452.7 246,594.

Feb. 17, 1981

- 71 -81001 3.10

Attachent 7

Electric Sector Consolidation

Tariff IncreaseS A-. ptiona

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990

Col/lfWH

IEEB 1.48 2.10 3.11 4.08 5.36 7.03 9.23 10.51 11.98 13.64 15.54

llfM 1.09 1.54 2.27 3.35 4.38 5.56 6.65 7.59 8.67 9.83 10.64

CVC 1.26 1.87 2.62 3.17 3.77 4.41 5.03 5.74 6.54 7.46 8.50

ICEL 1.43 1.89 2.39 3.04 4.10 5.05 6.24 7.21 8.33 9.63 11.14

CORELCA 1.64 1.61 11 2.33 3.38 4.12 4.90 5.58 6.36 7.25 8.27 9.27

SLECTRIFICADOR8S CORILCA 2.04 3.19 4.57 5.58 6.78 8,00 9.27 10.75 12.45 - -

2

IEE 41.9 48.1 31.2 31.4 31.2 31.3 13.9 14.0 13.9 13.9

EPI 41.3 47.4 47.6 30.7 26.9 19.6 14.1 14.2 13.4 8.2

CVC 48.4 40.1 21.0 18.9 17.0 14.1 14.1 13.9 14.1 13.9

ICELS 32.2 26.5 27.2 34.9 23.2 23.6 15.5 15.5 15.6 15.7

CORELCA (1.8)1/ 44.7 45.1 21.9 18.9 13.9 14.9 14.0 14.1 12.1

.ILECTRIFICADORAS CORELCA 56.4 43.3 22.1 21.5 18.0 15.9 16.0 15.8 -

1/ REdoction due to change in the sales rsi to different const c.

ANIIEX 5 .10Attachxent 8

COLOMBIA

E1LCTRIC SECTOR CONSOLIDATION

WORING CAPITAL REQUIREMENTS

(milli.. of Col 9)

1980 1901 1982 1983 1984 1985 1986 1987 1988 1989 1990

EEEB 347 1,151 243 (24) 69 2,325 5.757 4,977 6,931 5,988 6,999

EFy (38) 222 354 704 725 1,761 2,211 1,712 1,640 1,833 1,895

cVC 234 (Z29) 10 196 1.232 1,318 762 118 514 1,015 992

ICoL (1,263) (213) (221) (263) 1,126 54 39 (734) (20) 616 599

ICEL RLECTRIFICADORAS 347 102 264 1,525 1,591 1,410 2,798 2,170 2,900 3,614 8,477

CORRLCA 847 974 851 67 1.189 643 886 955 2,887 3,138 4,627

CORRLCA ELECTRIFICADORAS 261 671 1,002 1,032 1,297 1,899 3,451 4,374 4,872 0 0

ISA (1,107) 640 617 2,531 1,977 (256) 595 (654) 3.639 6,006 7,601

TOTAL SECTOR (372) 3,318 3,120 3,768 9,206, 9,154 16,499 12,918 23,363 22,270 31,390

COLOMBIA

ELECTRIC SECTOR CONSOLIDATION

CAPITAL CONTRIBUTIONS

(Millions of Col $)

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990

NATIONAL BUDGET CONTRIBUTIONS

EPM 120.0 - - - - - - - - - -

CVC 22.0 20.0 32.4 32.8 16.0 15.0 - - - - - .

ICEL 2,507.9 11,156.4 15,885.8 21,216.3 19,853.8 12,786.1 9,678.1 10,268.5 10,534.9 3,262.6 toCORELCA 3,874.5 5,415.2 4,303.4 4,681.7 4,993.9 5,742.9 6,604.3 7,594.9 8,734.1 10,044.2 -

CORELCA ELECTRIFICADORAS 4.5 58.8 66.5 37.6 89.1 118.3 4.4 4.4 3.4 - -ISA (through CORELCA) 2,050.0 2,729.0 1,194.0 - - - - - - - -

Sub-total 8,579 19,379 21.482 25,968 24,953 18,662 16,287 17,868 19,272 13,307

OTHER CAPITAL CONTRIBUTIONS

EPM 92. 361. 241. 402. 300. 386. 486. 608. 759. 919. . 1,088CVC 113. 159. 363. 238. 141. - - - - - -

CORELCA - - 92. 38. 660. 628. 504. 494. 219. - -

Sub-Total 205. 520. 696. 678. 1,101. 1,014. 990. 1,102. 978. 919. 1,088.

TOTAL 8,784. 19,899. 22,178. 26,646. 26,054. 19,676. 17,277. 18.970. 20,250. 14,226. 1,088.

o

-73 -_ 73 _ ~~~~~~~~~~~~~~~~ANNEX 5.10

COLOMBIA Attacbment 10

ELECTRIC SECTOR CONSOLIDATION

LOAN DISBURRSEMENT PROGRAM(Millions of Col$)

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990

EXISTING LOANS

Foreign CurrencyEERB 1,110.8 2,556.8 191.9 - - _ - - - - -

EPM 193.0 - - - - - - - - - -

CVC 750.0 - - - - - _ _ _ - _

ICEL - 17.7 - - - - - - - - _

ICEL RLECTRIFICADORAS _ - - . _ _ _ -

CORELCA 5,903.1 3,869.5 1,730.8 434.2 - _ _ - _ _ _

CORELCA ELECTRIF. - - - - - - - - - - -

ISA 3,076.0 5,663.0 2,341.0 670.0 - _ _ _ _ _ _

Sobtotal: 11,033.0 12,107.0 4,264.0 1,104.0

Local Currency7 8 - 144.0 - - - _ - _ _ _ _

ETU 68.5 4.9 5.3 - - - - - - - -

CvC 170.0 - - - _ _ - _ - - _

ICRL 159.1 - _ - - - _ _ _ _ _

ICEL ELECTRIr7ICADObAS - - _ _ _ _ _ -

CORELCA 1,183.1 40.0 . - _ _ - _ _ _ _

CORELCA ELECTRIF. 53.9 - - - - - - - - - -

ISA --

Subtotal: 1,635.0 189.0 5.0 - - - - - - - -

Total: Existing Loans 12.668.0 12,296.0 4.269.0 1.104.0 - -

Total Future Loane 8,445.0 32,089.0 49,398.0 60,513.0 53,801.0 86,002.0 95,191.0 128,628.0 113.518.0 110,916.0 140,117.0

Total Diebure tents: 211,13.0 44,385.0 53,667.0 61,617.0 53,801.0 86,002.0 95,191.0 128 ,28.0 113,518.0 110,916.0 140,117.0

COLOMBIA ANNEX 5.10Attach=nt 21

ELECTRIC SECTOR CONSOLIDATION

LOAN DISbURSEMENT PROGRAM(million of Iol$)

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990

FUTURE LOANS

Foreign Currency

EEE8 2,393.8 9,202.2 8,770.3 10,576.3 13,048.7 27,743.0 20,417.1 17,714.4 7,849.9 10,297.6 13,356.3

E1M 238.0 1,676.7 6,553.8 8,415.4 7,239.0 5,572.2 1,333.3 - - - -

CVC 901.5 1,746.1 3,524.4 1,549.3 1,367.1 728.2 - - - - -

ICEL ELECTRIFICADORAS 783.1 6,884.4 10,167.7 13,941.1 8,358.8 2,056.9 1,723.1 1,591.2 - - -

CORELCA - 1,394.7 3,185.1 8,445.1 8,706.0 10,992.0 14,564.0 11,445.5 2,442.3 - -

CORELCA ELECTRIFICADORAS 64.3 999.2 1,177.2 70.7 108.8 1,034.5 966.6 368.7 1,319.2 - -

ISA 1,692.0 4,836.0 10,583.0 13,331.0 13,143.0 34.077.0 50.857.0 88,656.0 97f211.0 98,227.0 124,945.0

Subtotal: 6,073.0 26,739.0 43,962.0 56,329.0 51,971.0 82,204.0 89,861.0 119,776.0 108,822.0 108,525.0 138,301.0

Local Currency

SETB 1,420.9 2,222.9 1,871.5 1,639.0 216.8 244.8 361.4 397.8 437.7 619.9 680.8

EPM 435.6 682.9 1,458.4 1,325.2 110.8 - - - - - -

CvC 34.5 76.4 94.0 34.4 - - - - _ _ -

ICEL 261.1 1,087.7 464.0 190.0 361.7 372.7 224.3 82.9 - _ -

ICEL ELECTRIFICADOEA3 - - - - - - - - _ _ _

CORELCA - 185.9 280.0 270.0 234.4 1,947.8 2,898.1 5,617.9

CORELCA ELECTRIFICADORAS 109.4 492.6 571.2 140.8 24.8 154.9 789.3 1,077.2 2,072.3 - -

ISA 111.0 602.0 697.0 585.0 882.0 1,078.0 1,057.0 1,676.0 2,186.0 1,771.0 1,135.0

Subtotal: 2,372.0 5,350.0 5,436.0 4,184.0 1,830.0 3,798.0 5,330.0 8,852.0 4,696.0 2,391.0 1,816.0

Total: Future Lan 8,445.0 32,089.0 49,398.0 60.513.0 53,801.0 86,002.0 95,191.0 128,628.0 113,518.0 110,916.0 140,117.0

Feb. 17, 1981

COLOMhS a

3LECTRIC SECTOR CONSOLIDATION

DEBT SERVICE

(Millions of Col $)

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990

FORETOIN CITRRENCYAmortizationsEEEB 570.5 951.4 937.8 2.30:.8 4.103.0 8.177.9 10.790.7 11.737.4 16.597.2 19.772.0 21.273.9EPM 5014.0 559.0 670.0 712.0 1.711.0 3.465.0 4.868.4 5.678.7 6.232.5 6.893.7 5.697.0cVc 570.1 567.3 589.9 873.0 1.266,2 1.701.3 2.158.4 2.653.1 2.972.4 2,883.5 1.844.2

TE - Electrfadoras 586.4 748.2 18250.4 18576.7 1.0026 957 7.017.7 9.352.7 10.238.8 lo0.4..3 12.532.7CORELCA 2.461.3 1.156.3 1,407.2 2.342.8 3.407.8 6.025.5 8,853.3 10.614.4 10.909.1 11.678.3 12.734.5CORELCA - Electrifioadoras 165.9 205.0 249.8 606.8 651.3 736.3 776.7 948.8 1.108,8 - -

ISA 644.o 987.0 1.781.0 2,581.0 6.219.0 8.544.o 13.572.0 21.267.0 29.848.o 44.822.0 62.763.0

Sub-total 5.502 5.174 6.581 10.453 18.573 33.369 48.037 62.252 77.907 96.492 116.845

Interest Charged to Constru-tionEEER 194.4 814.0 1.204.7 1.896.9 3.035.2 4.604,o 6.639.5 4.178.3 894.5 1.742.4 1.238.0 oEPM 22.0 195.4 655.3 1.276.1 1.991.0 1.553.4 929.2 - - -rcvc 19.7 131.0 267.5 398.2 708.7 80,4 - - - -ICEL 87.0 503.4 1.338.6 9.610.7 3,602.8 4.166.1 2.171.4 454.o 458.6 433.3 433.0ICEL - Electrificadoras 24.6 120.0 216.8 397.9 249.0 260.2 309.6 113.1 91.8 17.5 15.8CORELCA 221.4 146.4 857.2 1.023.1 1.489.1 1.495.3 2.337.7 3.307.4 2.448.4 - -CORELCA - Electrificadoras - 8.0 147.2 2.4 - 4.9 87.2 - - -ISA 1,049.3 1,787.1 2.212.6 2.481.7 2.271.9 4,735.2 8.685.4 15.626,4 23.489.7 28.875.7 32.734,0

Sub-total i.6i8 3.705 6.900 10.087 13.348 16.900 21.160 23.679 27.383 31.069 34.421

Toterest Charged to IncomeEEEB 397.8 736.1 1.504.6 1.980o1 2,871.8 3.436,7 3.806.0 8.247.6 12.413.7 11.765.7 11,854.3EPM 434.o 475.0 550.0 709.0 897.0 2,058.0 2,990.8 3.851.3 3.642.5 3.354.3 3.081.0cvc 374.6 545.1 664.3 712.4 770.6 1.406,1 1.455.0 1.384.,7 1.252.8 1.125,2 888.8ICED 45.7 49,9 74.2 75,7 417.7 41-9,943727670654255924072ICEL - Electrificadoras 105.3 124,7 196.8 227,7 554,6 554.3 4.347,2 7,677.0 6,554,2 5.569,2 4.037.2CORELCA 430.9 710.3 714,9 1.317.5 1.881.5 2.956.5 2,910.1 2.606.4 3.567,6 5.597.1 4,986. 0CORELCA - Electrificadoras 52.0 85.8 123.9 465.3 327.8 296.4 266.2 383.5 319.7 _ _ISA 495.0 708.0 1.645.0 3.069,0 4,525.0 4.746.0 4.739.0 4.536.o 5,175,0 8,355.0 13.524.o0

Sub-total 2.335 3.435 5.474 8,557 12.246 15,874 20,514 28.689 37,926 35.767 38.371

TOTAL 9.455 12,314 18,955 29.097 44,167 66.143 89.711 114.620 138.216 163.328 189.637

COLOMBIA

ELECTRIC SECTOR CONSOLIDATION

DEBT SERVICE

(Millions of Col $)

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990

LOCAL CU3RENCY

AmortizationsEEEB 162.0 236.0 1,731.0 2.747.9 1.986.3 1.010.4 213.3 130.1 369.5 369.6 239.4ER4 126.2 129.7 434.7 1.033.0 887.6 1.542.1 1.287.4 66.1 30.9 15.0 15.0CVC 174.8 172.1 170.2 128.0 127.9 60.6 38.0 11.4 - - -ICEL 736.5 963.6 1.079.0 1.531.9 736.6 425.2 284.9 319.6 328.2 178.5 37.3ICEL - Electrificadoras 5.0 25.9 62.0 89.5 87.4 90.8 88.0 100.4 loo.4 46.6 16.0CORELCA 308.3 603.0 602.7 563.9 300.1 380.8 301.5 1.267.9 1.769.0 7.399.0 '765.3CORELCA - Electrificadoras 106.3 129.2 164.5 311.3 328.3 306.3 288.5 254.6 171.3ISA 310.7 209.7 302.7 836.4 410.0 400.0 1.003.0 883.0 604.o 1.731,0 1.731.0

Sub-total 1.930 2.469 4.547 7.242 4.864 4.216 3.505 3.033 3.373 9.740 2.804

Interest Charged to ConstructionEEEB 18.9 82.5 134.3 126.2 122.9 125.1 128.4 159.4 189.6 218.2 280.4EPM4 5.3 18.9 28.2 41.8 46.9 - - - - -CVC - 8.7 22.7 34.2 27.7 12.4 - - - _ _ICEL 48.9 114.1 154.0 161.8 131.5 112.3 106.0 89.2 48.7 10.1 3.4ICEL - Electrificadoras 7.0 14.5 39.9 45.8 41.7 43.9 45.3 38.2 20.9 4.3 1.4CORELCA 100.0 36.2 83.2 69.9 153.2 12.0 1.8 - - - _CORELCA - Electrificadoras - 5.2 73.5 28.2 0.8 - 31.0 141.7 384.1ISA _ _ _

Sub-total 180 280 536 508 525 306 312 428 643 233 285

Interest Charged to IncomeEEEE 333 9 628.5 1.116.4 932.4 585.4 158.0 - - - - -EPM 276.7 450.6 679.8 944.3 844.2 580.1 195.9 15.9 7.6 4.7 2.0CVC 89.0 61.3 34.6 16.8 6.7 - - - - - -ICEL 733.3 420.6 352.6 221.1 47.3 21.3 17.6 13.4 8.1 1.8 -ICEL - Electrificadoras 26.7 21.0 14.4 9.3 9'3 8.3 7.2 5.7 4.1 1.9 -CORELCA 243.9 489.9 366.6 284.5 173.0 311.6 240.8 177.8 120.8 71.0 20.3CORELCA - Electrificadoras 97,3 97,5 117.6 268.3 277.2 220.5 177.8 222.4 225.2 -ISA 178.6 134.9 97.8 40.2 - - - - - - -

Sub-total 1.979 2.304 2.780 2.717 1.943 1.300 639 435 366 79 22==== === === ============ =========

Totatl Local Currency 46o89 5.053 7.863 10.467 7.332 5.822 4.456 3.896 4.382 10,052 3.111Total Foreign Curren1Y 91455 12,314 18.955 29.097 44,167 66.143 89,711 114.620 138.216 163.328 189.637 w

GRAND TOTAL 13.544 17.367 26.818 39.564 51.499 71,965 94.167 118.536 142,598 173.380 192.748

COLOMBIA

ANNEX 3.10

ELECTRIC SECTOR CONSOLIDATION Attachment 14

DECESBER 31, 1979 CONSOLIDATED

DA':-CE 8S,EET

(Millions of Col 9)

EICL CORELCA b Consuli-Electrifi- Electrifi- Sub- dut-on

0EEB EPM CVC IOEI cadorus COOELCA caderan Total- ISA Adjustments TOTAL

ASSETS

Fixed Assets: 122,554

GOcea Fi-ed u.nets in servite 26,386 24,033 20,210 227 6,321 11,667 10,072 96,916 23,638

Accumlated depreciation (10,066) (5,125) (3.636) (88) (962) (1,681) (4,772) (26,330) (2,086) (28,416)

Net Fined assets in sertice 16,320 18,908 16,574 139 5,359 9,986 5.300 72,586 21,552 94,138

Work in progress 4,687 2,653 539 6,289 1,286 3,675 305 19,434 14,013 33,447

TOTAL FIXED ASSETS 21,007 21,561 17,113 6,428 6,645 13,661 5,605 92,020 35,565 127.585

Iflventmeent:

ISA (BSnds and Sharon)

ued other aectur i-vent-ents 2,953 1,834 879 3,722 13 1,513 - 10,914 - -10,914 j/Other Isvest-tens 426 102 15 3,427 240 - - 4,210 - 4,210

TOTAL INVESTMENTS 3,379 1,936 894 7.149 253 1,513 - 13,174 _ 4.710

Crreont Asnets:

Cash: Operatienal reqeiremen-t 398 25 90 226 215 53 92 1,099 666 1,765

AcecuntsrceiOvable 1,575 419 559 1,507 1,075 486 833 6,454 2,162 -2,162 6,454

Inventory 1,245 209 393 602 800 523 799 4,571 115 4,686

Other - 681 112 225 895 373 275 2,561 102 2,663

TOTAL CURRENT ASSETS 3,218 1,334 1,154 2,560 2,985 1,435 1,999 14,685 3,045 15,568

Other Assets - 38 426 1,603 380 145 215 2,807 800 3,6072

TOTAL ASSETS: 27,604 24,869- 19,587 17,740 10,263 16,754 7,819 124,636 39,410 -13,076 150,970

EQUITf AND LIABILITIES

Equity: 100 283 1,019 9,303 3,197 3,992 874 18,768 8,638 -3,212 16,492

Accumulsted sorples and renemes 4,944 4,286 2,001 257 1,010 279 (185) 12,592 1,026 -7,702 13,618

Capital RsvaluatiDn 13,133 11,480 10,639 - - 5,320 3,183 43,755 14,780 58,535

TOTAL EQUITY 18,177 16,049 13,659 9,560 4,207 9,591 3,872 75,115 24,444 88,645

Lung-term debt 1/ 6,040 7,698 5,369 7,356 4,053 5,666 1,244 37,426 12,979 50,405

Penaion and other liability reserves 1,108 713 182 - - - - 2,003 - 2,003

Current lisbilities 2,279 409 317 729 2,003 1,460 1,365 8,562 1,987 -2,162 3/ 8,387

Othee liabilitien - 60 95 - 37 1,338 1,530 - 1.330

TOTAL EQUITY AND LIABILITIES 27,604 24,869 19,587 17,740 10,263 16,754 7,819 124,636 39,410 -13,076 150,970 e

1/ Inoludes osrrent pertion.

2/ Sharen uf If A and Eleotrificaderas in assets of eleotric .o.pueje.

3/ Compensation of cnreespondent corrent .snets und liabilitios.

- 77 - ANNEX 6.1

COLOMBIA Page 1 of 2

EMPRESA DE ENERGIA ELECTRICA DE BOGOTA (EEEB)

GUAVIO HYDRO POWER PROJECT

Rate of Return on Devlopment Program

Investment ORM Fuel Total Incremental Incremental Sales Revenues Other TotalCosts Purchase Costs Sales Revenues to from Incremental Benefits

to ISA EEEB Area EEEB area 2/ ISA ISA RevenuesYear Year Ni MUS$ MUSS MUS$ GWh 1/ MUS$ GWh MUS$ MUSS MUS$

1981 1 17.6 - 17.6 -1982 2 90.9 - 90.9 -1983 3 73.2 - 73.2 -1984 4 117.5 - 117.5 -1985 5 133.6 - 133.6 -1986 6 214.0 - 214.0 -1987 7 173.2 12.7 185.9 789 49.7 1332 33.5 6.5 89.71988 8 175.8 80.7 206.5 1667 105.0 1977 42.4 13.7 161.01989 9 109.5 57.7 167.2 2645 166.6 2000 42.9 21.6 231.11990 10 145.3 98.9 244.2 3733 235.2 2033 43.6 30.5 309.41991 11 196.5 295.41992 12 0.0 98.9

2036 56 0.0 98.9 98.9 3733 235.2 2033 43.6 30.5 309.4

Present Values Unadjusted for Border PricesNet Present

Discount Rate worth (Benef.minus costs)

8 862 659 1521 1600 537 2137 61610 768 464 1232 1131 385 1516 28412 687 339 1026 828 286 1114 8814 617 255 872 624 218 842 -30 Rate of16 558 194 752 480 170 650 -102 return18 505 152 657 375 135 510 -147 13%20 460 120 580 298 109 407 -173

Present Values Adjusted for Border Prices

Factor 0.86 0.91 0.92 0.928 741 600 1341 1472 494 1966 62510 660 422 1082 1041 354 1395 31312 591 308 899 762 263 1025 12614 531 232 763 574 201 775 12 Rate of16 480 177 657 442 156 598 -59 return18 434 138 572 345 124 469 -103 15%20 396 109 505 274 100 374 -131

Rate of Return Sensitivity to Investment Costs, Operational Costs and Incremental Revenues

8 84 104 -42 -10 47 74 -30 -8812 21 41 -17 -4814 2 5 - 2 - 616 -12 -33 13 3818 -24 -75 30 8320 -33 - 48 131

1/ Excludes Cundinamarca and Meta which are supplied by ICEL.

2/ Assumes 1988 tariff at 1980 price level.

3/ Includes Guavio, transmission, distribution and other investments.

April 6, 1981

ANNEX 6.1Page 2 of 2

COLOMBIA

EMPRESA DE ENERGIA ELECTRICA DE BOGOTA (EEEB)

GUAVIO HYDRO POWER PROJECT

Rate of Return of Investment Program

Main Assumptions

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990

Local Inflation % 25.0 25.0 23.0 21.0 19.0 17.0 14.0 14.0 14.0 14.0 14.0

Foreign Inflation % 10.5 9.0 8.0 7.0 7.0 7.0 6.0 6.0 6.0 6.0 6.0Mid-year Rate of exchange Col$/US$ 47.3 54.4 62.6 72.0 82.6 93.3 103.3 113.7 125.1 137.6 151.3

Weighted average conversion factorsfor Border Prices

Investments 0.86Operation 0.91Power Supply 0.92 m

Residual Values

No residual values were considered in view of the number of years discussed (56)

Energy Sales and Purchases

Total EEEB Sales (GWh) - - - - - - 7315 8184 8982 9960 11048EEEB Incremental Salesattributed to Guavio - - - - - - 789 1667 2645 3733 3733

Purchases to ISA - - - - - - 1625 1643 1587 2179 2361Sales to ISA - - - - - - 1332 1977 2000 2033

Tariffs

Average inEEEB System in 1988 1/ 8.0 USE/kWhSales to ISA 2.1 uS/kWh

r;

1/ In 1980 Prices.

March 16, 1981

- 79 -

Attachment 1

COLOMBIA

EMPRESA DE ENERGIA ELECTRICA DE BOGOTA (EEEB)

GUAVIO HYDRO POWER PROJECT

Contents of the Project File

1. SECTOR PLANNING

1.1 Estudio del Sector de Energia Electrica.

Republica de Colombia. DepartamentoNacional de Planeacion ISA - GTZ, 1979

Volumen I SinopsisII Fuentes de Energia. El Sector

Electrico y sus RequerimientosIII Inventario de los Recursos Hidroelectricos

IV Alternativas para las Plantas Termoelectricas

V Planeamiento a Largo Plazo del SistemaElectrico Colombiano

1.2 Estadistica Base para Planeacion ICEL - 1979

1.3 Analisis de la Expansion de la Generacion 1979-1988 ISA - Mayo 1979

1.4 Analisis del Proyecto Guavio dentro del SistemaInterconectado Colombiano. UPE-EG-09 Oficinade Planeacion ISA - Marzo 1980

1.5 Balance del Sistema Electrico Colombiano, UPE-EG-09

Oficina de Planeacion ISA - Noviembre 1980

2. SECTOR OPERATION

2.1 Planeacion de Sistemas de PotenciaVolumenes I, II y III ISA - Marzo 1980

2.2 Estudio de Planeamiento OperativoDefinicion de Alcances ISA - Mayo 1980

2.3 Formulacion Matematica del Problema dePlaneamiento Operativo ISA - Mayo 1980

2.4 Inventario de Antecedentes del Estudio de

Planeamiento Operativo ISA - Octubre 1980

2.5 Estudio de Planeamiento OperativoEstudio Organizacional ISA, Octubre 1980

2.6 Situacion del Servicio en el trienio

1980-82 (Racionamiento en los Sistemas) EEEB - Noviembre 1980

2.7 Estadistica de Interrupciones de Servicio

(Mayo 1977 - Agosto 1980) EEEB - Diciembre 1980

2.8 Proyecto del Centro de Control y del

Sistema de Comunicaciones. Presupuesto EEEB - Enero 1981

2.9 Proyecto del Centro de Control y delSistema de Comunicaciones. Borrador Contratocon Systems Control/Sistecom EEEB - Enero 1981

3. PROPOSED GUAVIO HYDRO POWER PROJECT

3.1 Proyecto del Rio Guavio. Analisis de Alternativasde Aprovechamiento Hidroelectrico Volumenes I, II, III ISA-INGETEC 1974

3.2 Proyecto Hidroelectrico de GuavioInforme de Factibilidad ISA-INGETEC 1978

- 80 -

3.3 Guavio Hydroelectric Project Don V. Deere andGeotechnical Evaluation Andrew Merritt

September 1979

3.4 Guavio Hydroelectric ProjectMain Civil Works. Documents for INGETECPrequalification of Construction Firms Diciembre 1979

3.5 Proyecto Hidroelectrico de GuavioLicitacion G-O10. Construccion de la Presa EEEB-INGETECy Obras Anexas Marzo 1980

3.6 Proyecto Hidroelectrico de GuavioLicitacion G-011. Construccion de la EEEB-INGETECConduccion y Central Subterranea Marzo 1980

3.7 Proyecto Hidroelectrico de Guavio EEEB-INGETECPlan de Ejecucion del Proyecto Diciembre 1980

3.8 Proyecto Hidroelectrico de GuavioEvaluacion Economica EEEB- Enero 1981

3.9 Proyecto Hidroelectrico de Guavio EEEB-INGETECCostos, Financiacion y Programa de Construccion Enero 1981

3.10 Proyecto Hidroelectrico de Guavio EEEB-INGETECAdquisicion de Predios. Informe 01 Febrero 1981

4. SECTOR AND EEEB FINANCES

4.1 Estatutos de las Empresas Electricas de Colombia Comision de IntegracionElectrica Regional

4.2 Estados Financieros 1978 y 1979 EEEB

4.3 Proyecciones Financieras EEEB - Noviembre 1980 yEnero 1981

4.4 Modelo Corporativo para proyeccion de demandae ingresos por cuenta de energia electrica EEEB - 1979

4.5 Proyecciones Financieras ISA - Enero 1981

5. LEGAL AND INSTITUTIONAL

5.1 Codigo Fiscal del Distrito Especial de Bogota

5.2 Decreto No. 284 de 1974. Codigo Nacional deRecursos Naturales Renovables y Proteccion Diario Oficialdel Medio Ambiente Enero 27, 1975

5.3 Decreto No. 1541 de 1978 Diario OficialReglamentacion del Uso de Aguas no Maritimas Agosto 21, 1978

5.4 Nota Cesion Contrato No. 859ISA-INGETEC (Guavio) a EEEB-INGETEC

6. SELECTED WORKING PAPERS

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COLOMBIA 42EMPRESA DE ENERGIA ELECTRICA DE BOGOTA - to1 /

GUAVIO HYDROELECTRIC PLANT oENOZUESA

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