WORLD



• • INTERNATIONAL BA'NK FOR
    RECONSTRUCTION AND DEVELOPMENT
    1818 H   STREET,   N.W., WASHINGTON 25,· D. C.   TELEPHONE: EXECUTIVE 3-6360




    Press Release No. 458                            Subject:    $31 million of loans
    September 21, 1956                                           in Austria.
           The World Bank today made two loans totaling $31 million for electric power
    expansion in Austria.      The projects being financed are part of a power expansion

    progran being carried out to meet the increasing demands pf Austrian industry and

    to supply additional power for export to neighboring countries.

           The Manufacturers Trust Company participated in the loans, wit.~out the World

    Bank's guarantee, to the total of $].w.9,000.      This amount represents the first
    maturity of each of the loans.

           One loan, of $21 million, 1as made.for the Ybbs-Persenbeug project, a large

•   run-of-the-river hydroelectric plant being constructed on ti.11e Danube about 80 miles

    up   the river from Vienna.     This project was started in 1953 and is being built by

    the Donaukraftwerke (Danube RiYer Power Company).         It will have a capacity of

    192.,000 kilowatts from six generating units installed in two power houses.         Three of

    the units are expected to be in operation in the early part of 1958 and the others

    by the end of   1959.
          The second loan, for $10 million, will be used for the expansion of two thermal
    power plants, using domestic brown coaJ. for fuel, in southwestern Austria: one at

    Voitsberg and the other at St. Andrae.       They are being constructed by the Draukraft-

    ~"'erke (Drau River Power Company).    The expansion will consist of the addition of a

    65,000-kilowatt unit to the existing capacity of 60 1 000 kilowatts at Voitsberg, and

    the addition of 100 5 000 kilowatts of capacity at the 67,500-kilowatt plant at

. S t . Andrae.     The Voitsberg plant is expected to be complete in October 1956.        Con•

    struction at St. Andrae will start in January 1957 and be finished by the end of 1958.

          The co-borrower in each loan is the Verbundgesellschaft (Austrian Electric

    Power Corporation), a government-owned corporation, established in
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    1947.      The Corporation operates most of Austria's high tension transmission

    system and controls the operations of four government-owned power generating

    companies, including the Donaukraftwerke and. the Draukraftwerkee

            The Verbundgesellschaft and its affiliated companies, together with

    other public companies connected with the Corporation's transmission system,

    operate about 1. 7 million ldlowatts of generating capacity, or about 77% of

    the total in Austria.     The projects being financed by today's loans will

    provide 357 ,ooo kilowatts of new capacity and are part of the Verbundgesell·'".

    schaft's expansion program which will add 612,000 kilowatts of installed

    capacity by 1960.     The program also includes two more thermal power plants,

    the completion of four hydroelectric plants, and new transmission lines and

    transformer and switching stations •


•        The rapid rise in industrial production in Austria since the war has

    necessitated large increases in power capacity.         But despite extensive
    development of its hydroelectric power resources, Austria still has little

    reserve capacity; power has to be imported during the winter months when

    production from hydroelectric plants is curtailed because of the low flow of

    the rivers.     The Verbundgesellschaft's expansion program is designed to meet

    the estimated future growth of demand 1mtil 1960.         It will also permit the

    reduction of power imports and provide some additional power for eJ<port to

    neighboring countries.     Au.stria already exports power to Italy and Germany

    and arrangements are in prospect for exports to France and Czechoslovakia.

         The ~p21 million loan was made to the Donaukraftwerke and the Verbund-

    gesellschaft.     It is for a term of   25   years and bears interest of   5%   including



•   the statutory 1% comr~ission charged by the Bank.

    January 1$, 1960.
                                                            Amortization will begin

                          The $10 million loan was made to the Draukraftwerke and

    the Verbundgesellschaft and is for a term of 20 years, bearing interest of
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           .Amorth.. liion of this loan will begin September 1, 1959.

     are guaranteed by the Goverl1ffient of Austria.
                                                                          Both loans



          The Bank's loans will finnnce a'!)out 23.5% of tl1e combined cost of

     the three projects estimated to be equivalent to $113 million.        .About

     $5 .1 million of   tl1e loans wj_ll pay for j_mported equipment; the remainder

     will be used for expenditures ~ncurred in Austria.

          The Bank has nm·1 lent a total equivalent to $53 million in Austria
     for electric power projects whj_ch. will have a combined power generating

     c~pacity of 667,000 kilowatts.      The previous loans were $12 million for

     the Reisseck-Kreuzeck hydroelectric plant in southern Austria from which

     some power will be export,ed to Italy, and $10 million for the Lunersee

     plant in western Au.stria from which most of the power will be exported to

•    Germany.
          After having been approved by the Bank 1 s Executive Directors the loan

     documents were signed today by His Excellenc;1r Dr. Carl Gruber, Austrian

     Ambassador in Wasr.d.ngton, on behalf of the Austrian Government and of the

     borrowers, and by W.A.B. Iliffi Vice President, on behalf of the World Bank4




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