- .:CRi RFLEASE-<^'I- * tog8 o International Bank for Reconstruction and Development "~~FL CO-- FOURTEENTH ANNUAL REPORT * 1958-1959 K. S. Venkatraman FourteenthLi Annual RepDort con itel 'Ls PRESIDENT'S LETTER OF TRANSMITTAL . . . . . . . . . . . . . . . . 2 FINANCIAL HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . 3 THE YEAR'S ACTIVITIES . . . . . . . . . . . . . . . . . . . . 5 General ................... . 5 The Year's Lending . . . . . . . . . . . . . . . . . 9 Financial Operations . . . . . . . . . . . . . . . . . 12 Technical Assistance and Liaison . . . . . . . . . . . . . 16 COUNTRY-BY-COUNTRY ANNEX . . . . . . . . . . . . . . . . . 18 Africa . . . . . . . . . . . . . . . . . . . . . 18 Asia and the Middle East . . . . . . . . . . . . . . . 20 Europe ...... .. ... .. .. ... . . 25 Western Hemisphere . . . . . . . . . . . . . . . . . 28 APPENDICES . . . . . . . . . . . . . . . . . . . . . . . 33 International Bank for Reconstruction and Development September 28, 1959 My dear Mr. Chairman: In accordance with Section 10 of the By-Laws of the International Bank for Reconstruction and Development, I have been authorized by the Execu- tive Directors to submit to the Board of Governors this Annual Report of the Bank for the fiscal year July 1, 1958 to June 30, 1959. The first section of this year's Report surveys the various activities of the Bank in the fiscal year. An Annex follows, giving a country-by-country summary of the year's operations. Finally, there appear the customary Appendices, including the Financial Statements as of June 30, 1959; the Administrative Budget for the fiscal year ending June 30, 1960; and a Statement of Bank Loans. Sincerely yours, EUGENE R. BLACK President Chairman, Board of Governors, International Bank for Reconstruction and Development *2- Financial Highlights (Expr-essed in millions of United States Dollars) ::ca ::e::: LOANS OF THE YEAR $711 $703 DISBURSEMENTS ON LOANS '499 ;583 SALES OF PARTS OF BANK LOANS 87 14Sj REPAYMENTS OF LOANS To BANK ~ 2g- 45, GROSS INCOME 9 2 NET INCOME 42 4 NET INCREASE IN FUNDED DEBT62 24 NEw RELEASES OF 18% CAPITAL '149 13 TOTAL OF SUPPLEMENTAL RESERVE 236. 282 TOTAL OF SPECIAL RESERVE 114 -1381 TOTAL RESERVES 350-11 420 .3. THE YEAR'S ACTIVITIES . t-4  K N  N K  ,, K K N 'K ' C KK,K4N. KK  'K C "'K" KK"'K 'K"'K' "K C:''NKC ' ' 'N' K ""' "' KKK K"'N  'NK -"'K" 'N" "K""" K   *.K' ""K K ' VKKK KKK  "'"'NC K "K,KK"K,. NK'N.' 'NKK)K -'K'' 'N""'"   ,K,. K"' C' 4 KKKN'N KNC'j''NKN K4K:& 2k"' KK''NK4'K'KKKK'N K'K'KKKK J  '"K W"N 'NKKKK" ""K '"KKKK", N' '-""K 'KK4,K KNK'KK'KKK'.,KK4'K'  K''- - K "'''""'K '- ' K'N'N K  "''K' "'K 'K'K"K"' *KKKKKKK44K'KKK' ' ,K"K'> C' KKKKN4'NKK" K"''KKK' ''KKK,"  'N 'NKKKKK K - KKK>>''K'..' 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'N4K K 4' "4''' 2 'KK' K 4 K K4K "K'"K, K' KK'K44K K'  ''K K K'N>K KKK K K 444-K44 "'K "''-N K, ' K 'K  ' K 'N K'K"--'""-" N 'K K' KKK K KKK 'K, THE BANK MADE LOANS TOTALING $703 MILLION financing of imports and enabled many less developed in the fiscal year ended June 30, 1959; for the second countries to avoid substantial curtailment of invest- year in succession, new Bank lending was 75% ment and to minimize reductions in their rates of above the average rate of $400 million which pre- economic growth. The momentum of industrial vailed from 1954 to 1957. When the higher level was expansion seems to have been fairly well maintained first recorded, in 1957-58, there were indications that in many underdeveloped countries. Numerous mining it was not a temporary phenomenon, but would con- operations were, however, affected by the appearance tinue to prevail. These expectations have been con- of surpluses in world markets, and there is some firmed by the lending of the past year, and by the evidence that agricultural output did not rise as rapidly number of loan applications under active considera- as before, owing to adverse weather conditions. tion by the Bank at the end of the year. In other As a result of increased borrowing abroad, it is respects also, Bank activity continued at a high level: estimated that the foreign public debt of the less earnings, disbursements and sales of loans were developed countries in the Bank's membership rose greater than in any previous year. by more than $5 billion between 1955 and the end The economic climate in which the Bank's opera- of 1958. The same countries experienced an average tions were conducted was one of considerable adver- rise of some 15% in their annual debt service obliga- sity for many of the Bank's member countries. Indeed, tions over the same period, most of the rise taking 1958 was a year in which foreign exchange difficulties, place in the last year. The combined effect of increased of greater or lesser degree, were the rule rather than debt service and of lower export receipts has been to the exception for the less developed countries of the raise the percentage of export earnings absorbed by world. These countries depend for their foreign ex- foreign debt service payments in the majority of the change earnings mainly on the sale of foodstuffs or less developed countries: the average ratio increased raw materials, and the prices of many of these prod- from 4.7%1,, in 1955 to 5.70%G in 1958. ucts remained comparatively low throughout the There are, on the other hand, some developments year. Latin America, for example, suffered severely in the world economic scene which point to a more from these causes. favorable general outlook for the immediate future, Although export earnings declined, the inflow of the most important being the recovery of the industrial both public and private capital from the developed countries from the recession of 1957-58, and the areas was well maintained. While the 1958 gross capital strengthening of demand for primary products which inflow to the less-developed countries of around should result. In particular, the substantial improve- $5 billion was less than in 1957, it was well above the ment of the external financial situation of the countries *rate attained in 1956 or in earlier post-war years. of Western Europe gives hope that they will be able to These fresh additions of capital contributed to the provide both a growing market for primary products .5 - and significant financing for economic growth in the authorized capital would also be large enough to less developed countries. leave a margin of unsubscribed capital for the ad- During the year many countries gave consideration mission of new members and for further increases in to ways in which new international arrangements individual subscriptions. could be made to assist in this development process. On February 2, 1959, the Governors had voted The United Nations Special Fund and the European their unanimous agreement in principle with thesc Investment Bank began work in the period under proposals. In order to allow time for the legislation review, and the Bank was able to cooperate with both which in the case of many member countries is institutions in their early operations. Other projected required to authorize their governments to subscribe financing organizations included the Arab Financial to the increased capital, September 1, 1959, was set Institution for Economic Development, for which a as the date for completion of formal voting, and charter was approved in January 1959; the Inter- September 15, 1959, for the subscriptions toward the American Development Bank, whose charter was required minimum of $7 billion. A parallel proposal agreed upon in April; and a proposed new affiliate of to increase quotas in the International Monetary the World Bank, the International Development Fund by 50% has been approved by the Governors Association, which has been the subject of discussions of the Fund and is now being acted upon by the during the year between the United States and other members of the Fund; it is contemplated that the two governments. proposals will take effect simultaneously. The proposal to double members' subscriptions in THE BANK ITSELF was also the subject of interna- the Bank envisaged that the entire amount of the tional action aimed at increasing the volume of finance additional subscriptions would be left subject to call, for development. At the Annual Meeting of the Bank's and the Executive Directors recommended that the Board of Governors in New Delhi in October 1958, Board of Governors should decide that calls would the implications of the new level of Bank lending led only be made if required by the Bank to meet its the Governor for the United States to propose con- obligations on borrowings or guarantees. No cash sideration of an increase in the capital of the Bank. payments to the Bank were contemplated except those This initiative resulted in a unanimous resolution of arising from the special additional subscriptions of the Board of Governors that the Executive Directors particular member countries. consider the question. The Executive Directors re- The purpose of the Executive Directors was to ported to the Governors on December 22, 1958. Their provide further large-scale support for the Bank's main proposal was that member countries should be borrowing operations in the world's investment invited to double their capital subscriptions. The markets. It was always contemplated that the Bank Executive Directors also agreed to recommend addi- would raise the bulk of its lendable funds through tional increases, over and above the general 100% borrowings. The capital structure of the Bank, as increase, in the subscriptions of three members, designed at Bretton Woods, provided that only 20% Canada, Germany and Japan; subsequently similar of each member's subscription could be called and action was recommended regarding the subscriptions used for lending; the remaining 80%/, was to constitute, of 14 other member countries. in effect, a large guarantee fund serving as backing In order to accommodate the large increases in for the Bank's borrowing operations. And the Bank capital subscriptions, the Report recommended that in fact relies increasingly on borrowed funds with the authorized capital of the Bank should be increased which to make loans; although its loan commitments- from $10 billion to $21 billion, conditional on the have totaled almost $4.5 billion, the subscriptions of subscription by September 15, 1959, of at least member governments have provided funds directly $7 billion, excluding special increases. The new for only one-third. In these circumstances, the standing *6- .J~~~~ A new lake stretches 175 /iles up the Zambezi from the mtighty Kariba Damn. This prqject, constriucted with the help of an $80 million Bank loan, will provide inore thain a million kilowatts of power capacity for the dc velopment of the Rhociesias. of the Bank's credit in world investment markets is of THE PART PLAYED by the Bank in the past year vital importance. toward the solution of international economic disputes It was the view of the Executive Directors that the has already received wide attention, and needs only increase in the Bank's resources involved in their brief mention here. First came the negotiation of a proposals would make unnecessary any further in- settlement between the United Kingdom and the crease in its capital for a number of years to come. United Arab Republic of the financial claims which In all, the uncalled subscriptions of member govern- arose out of the Suez incident of 1956. The President of ments would rise from their present figure of $7.65 the Bank was able to bring the two parties together on billion to almost $18 billion: the uncalled subscription the basis of a compromise acceptable to both sides. of the United States, which the investment market Secondly, there were further developments in the regards as of outstanding importance to the Bank's dispute between India and Pakistan over the sharing borrowing operations, would be increased from the of the waters of the Indus Basin. This dispute has led present $2,540 million to $5,715 million. to an increasingly difficult situation between the two At the end of the fiscal year the legislation necessary countries since Partition in 1947, and the Bank has to carry the increased subscriptions into effect was been engaged since 1952 in seeking to bring the two -being enacted in many member countries; several Governments to a mutually satisfactory agreement. governments, including those of the United States and Last year's Annual Report noted that the need for the United Kingdom, had already completed all agreement was becoming more urgent as the irrigation necessary action. and resettlement schemes got under way. .7' In July, 1958, a new round of discussions opened INDIA WAS THE SUBJECT of another initiative taken by in London with the presentation by the Pakistan the Bank during the year. It became clear early in Government of an engineering plan which in their 1958 that fulfillment of the Second Five-Year Plan view offered a solution. The discussions were resumed was jeopardized by a deterioration in the Indian in Washington in December, when the Indian Gov- balance of payments. In August, 1958, the Bank called ernment gave its comments on the Pakistan Plan, but a conference in Washington of representatives of the put forward its own alternative scheme. This, in turn, Governments of Canada, Germany, Japan, the United was unacceptable to Pakistan. Faced with this situ- Kingdom and the United States. The International ation, the Bank decided that the time had come to Monetary Fund sent an observer to the meeting. A try to obtain the assent of each Government to full discussion took place of India's foreign exchange certain general principles on which the provisions of position; this discussion was followed by bilateral a settlement could be based. Meanwhile, in the course negotiations as a result of which India received of the meetings which began in December, the two additional financial support for the third year of the Governments were able to enter into an interim Plan from all the governments represented, and also agreement covering irrigation uses during the crop- from the Bank in the form of loans for railway and year ending on March 31, 1960. power development. In May, 1959, the President of the Bank made a It was recognized at this first meeting that the special visit to New Delhi and to Karachi to discuss problem should be kept under review. Accordingly, a the further steps that might usefully be taken. Mr. second meeting of the same composition was held in Black was accompanied by Mr. Iliff, the Vice President Washington in March, 1959. The second meeting was of the Bank who has had charge of this negotiation able to note an improvement in India's economic since 1953. Conversations took place with the heads situation, particularly in the balance of payments. of the Indian and Pakistan Governments, and resulted From the statements made at the meeting, it appeared in the establishment of certain general principles that sufficient assistance would be forthcoming to give affording a satisfactory basis for working toward a India reasonable expectations of being able to main- final settlement. As matters stand at the end of June, tain the momentum of the development program in representatives of the Governments of India and the fourth year, and meet essential maintenance needs Pakistan, together with representatives of the Bank, of the economy without throwing undue strain on are to meet in London early in August to work out external reserves. heads of agreement for an international water treaty. The engineering plan on which a settlement would be FURTHER PROGRESS was made during the year on the based involves a system of works estimated to take Bank's first examination of the economics of atomic about ten years to construct, and to require expendi- power as a means of producing electricity. Last year's tures in India and Pakistan aggregating about $1,000 Annual Report recorded the first stages of the co- million, partly in foreign exchange and partly in local operative exercise in which the Bank and the Italian currencies. Over and above the amounts that would Government joined to ascertain a commercially be provided toward the cost by India and by Pakistan, feasible means of producing nuclear power in Southern it is envisaged that financial assistance would be forth- Italy. By July 1958, the International Panel appointed coming from the Bank itself and from friendly govern- by the Bank had completed its review of the nine ments. The Bank has already opened discussions with tenders submitted by manufacturers in several representatives of the Governments of Australia, countries for the proposed nuclear power station. The. Canada, Germany, New Zealand, the United Kingdom Panel reported its findings to the Societa Elettro- and the United States, and it is believed that other nucleare Nazionale (SENN), the public utility corpo- countries may also wish to provide financial support. ration formed to build and operate the new plant. .* . Subsequently SENN selected one of the tenders which $2 million to $7.5 million, Honduras from $1 million were closely competitive. A summary of the report of to $3 million, Paraguay from $1.4 million to $3 the International Panel on the tenders was published million, and the Philippines from $15 million to by the Bank in May 1959. Discussions took place $50 million. The new members and the increases in during the year between the Bank and SENN on the subscriptions raised the subscribed capital of the Bank financing of the project. by $151.1 million to a total of $9,556.5 million. At the end of the fiscal year the regular staff of the THE MEMBERSHIP of the Bank rose to 68 in Sep- Bank numbered 605, compared with 582 a year before. tember, 1958, with the entry of Libya and Spain as new There was one change during the year in the principal members; the capital subscription of Libya was officers of the Bank: Mr. Davidson Sommers, Vice $5 million and of Spain $100 million. Five countries President, relinquished his position as General Counsel increased their subscriptions to the Bank's capital: and was succeeded in that post by Mr. A. Broches, El Salvador from $1 million to $3 million, Haiti from who was previously Director of the Legal Department. THE YEAR'S LENDING Bank lending during the twelve months ended on LIST OF LOANS June 30, 1959, continued at the high level reached in Expressed in United States Dollars the previous fiscal year; 30 loans were made, aggre- gating the equivalent of $703,125,000, only $8 million Country Purpose Amount below the high record set in the previous year. Austria Power . . . . . . . $ 25,000,000 Half the year's new loans, $354 million, were made Brazil Power-2 Loans . . . . 84,600,000 in Asia. The balance was made up of $136.5 million Ceylon Power . . . . . . . 7,400,000 in Latin America, $110.6 million in Africa and Colombia Power-3 Loans . . . . 19,400,000 $102 million in Europe. Three of the year's loans-in Costa Rica Agriculture, Industry . . . 3,500,000 Gabon, Malaya and the Sudan-were in countries Denmark Power .20,000,000 where the Bank had not previously lent; the total Ecuador Port . . . . . . . 13,000,000 number of loans rose to 234 in 50 member countries El Salvador Roads . . . . . . . 5,000,000 Power .3,000,000 and territories. Finland Industry . . . . . . 37,000,000 The pattern of lending showed the usual emphasis Gabon Manganese Mining . . . 35,000,000 on the strengthening of basic services. Electric power Honduras Power . . . . . . . 1,450,000 development was the largest objective, accounting for India Power-2 Loans . . . . 50,000,000 $294 million of the total. These power loans will assist Railways . . . . . . 85,000,000 the installation of almost 2.5 million kilowatts of new Iran Roads . . . . . . . 72,000,000 generating capacity in eleven member countries, 63% Italy Power, Industry . . . . 20,000,000 Japan Industry-3 Loans . . . 65,000,000 in hydroelectric power projects and the remainder in Power-2 Loans . .oans 39,000,000 thermoelectric capacity; there will also be extensive Malaya Power .. . . . . . 35,600,000 additions to transmission and distribution systems. Peru Port . .6,575,000 The countries concerned were Austria, Brazil, Ceylon, South Africa Railways-2 Loans . . . 36,600,000 Colombia, Denmark, El Salvador, Honduras, India, Sudan Rail and River Transport . 39,000,000 Italy, Japan and Malaya. * . . ~~~~~~~~~~~~~~~TOTAL 30 Loans . . . . . . $703,125,000 Transportation, which last year had held first place .9. among the purposes for which Bank loans were made, major private steel producers. In Finland, the manu- this year took second place to electric power at the facture of chemical pulp and newsprint is being figure of $257.2 million. The bulk was lent for railway assisted by a loan of $37 million which will help nine improvements, including $85 million for the Indian companies in the industry to modernize their plants Railways, $39 million, chiefly for railway improve- and increase their output. In Italy, Bank lending for ments, in the Sudan and $36.6 million for an extended industry will give further impetus to the development railway expansion program in South Africa. The two of new chemical industries in Sicily. Another loan, of road loans of the year included the largest loan the $35 million, will make possible the mining and Bank has yet made for this purpose: $72 million for transportation of manganese ore from large deposits large-scale development of Iran's road system. In in the Republic of Gabon, French Equatorial Africa. Latin America, $5 million was lent for a feeder road Agriculture in less developed countries continued program in El Salvador. Other transportation loans to benefit from Bank lending, as in earlier years, in that part of the world included $13 million for a new mainly from the construction of new highways, and port at Guayaquil in Ecuador, and $6.6 million to also by the application of new power supplies to assist port expansion at Callao in Peru. irrigation and other agricultural purposes. The only Loans for industry totaled $149 million, largely for loan made directly for agriculture was of $3.5 million steel, paper and mining. The Japanese steel industry to the Central Bank of Costa Rica to finance the im- benefited from loans totaling $65 million to three port of equipment for farming and for light industry. Rail is laid on the new 80-mile railroad which now links Colombia's eastern railway system, centered on Bogota, with the western system serving the Cauca Valley. The new link is part of a large railway program being assisted by $41 million of Bank loans. Bank Loans Classified by Purpose and Area JUNE 30, 1959 (Millions oJ U.S. Dollars, net of cancellations and refundings) Ar eas Western Heint- Purpose Total Africa Asia A ustralia Europe sphere Grand Total . . . . . . . . . . . 4,426 589 1,297 318 1,288 934 Development Loans: Total . . . . . . . 3,929 589 1,297 318 791 934 ELECTRIC POWER Generation and Distribution . . . . . 1,398 178 415 29 273 503 TRANSPORTATION . . . . . . . . . 1,297 332 458 132 69 306 Railroads .730 261 286 37 3 143 Shipping . . . . . . . . . . . 12 - - - 12 - Ports and Inland Waterways .159 6 80 - 47 26 Roads . . . . . . . . . . . . 325 65 72 51 - 137 Airlines and Airports . . . . . . . 57 - 6 44 7 - Pipelines (natural gas) . . . . . . . 14 - 14 - - COMMUNICATIONS Telephones, Telegraph and Radio . . . . 24 2 - - - 22 AGRICULTURE AND FORESTRY . . . . . . 316 - 68 104 88 56 Farm Mechanization . . . . . . . 118 - - 90 2 26 Irrigation and Flood Control . . . . . 154 - 53 6 74 21 Land Clearance and Improvement . . . 27 - 14 6 2 5 Crop Processing and Storage . . . . . 5 - - - 4 1 Livestock . .4 - I - - 3 Forestry . .8 - - 2 6 INDUSTRY . . . . . . . . . . . 689 37 281 53 271 47 Iron and Steel . . . . . . . . . 294 - 258 14 22 - Pulp and Paper . . . . . . . . . 113 - 4 1 88 20 Fertilizer and other Chemicals . . . . . 57 - - - 57 Other Industries . . . . . . . . . 92 - 5 24 59 4 Mining . . . .. . . .... . 83 35 - 14 12 22 Development Banks . . . . . . . . 50 2 14 - 33 1 GENERAL DEVELOPMENT . . . . . . . . 205 40 75 - 90 - Reconstruction Loans: Total . . . . . . 497 - - - 497 * 11 - FINANCIAL OPERATIONS As already noted, the year's new loan commitments from $8.3 million in 1957-58 to $9.8 million in the totaled $703 million and brought the cumulative total year under review. Of this total, about $1 million was of Bank loans, net of cancellations and refundings, to spent for special services to member countries, $4,426 million. Of this total, $833 million has been including general survey missions, costs of mediation, repaid or sold to other investors. At June 30, 1959, the training programs and other advisory services. effective loans held by the Bank stood at $3,387 Repayments to the Bank amounted to $45 million million, of which $2,566 million has been disbursed. and borrowers repaid $64 million on maturities of Net earnings exclusive of receipts from loan their loans which had been sold by the Bank to other commissions were $46.5 million, an increase of $4.5 investors. Total principal repayments thus amounted million over the previous record. Disbursements rose to $109 million, an increase of 38% over the previous to $583 million, compared with $499 million for the year. Included in the total was Panama's pre-payment, year before. Sales of parts of Bank loans amounted to several years before final maturity, of the outstanding $148 million, exceeding the previous high of $99 balance due to the Bank and other creditors on Bank million reached in 1955. On the other hand, the Bank loans made in 1953 and 1955, for agriculture and borrowed less than in 1957-58; borrowing totaled $432 roads. Full payment was made in December 1958, million, compared with $650 million in 1957-58. the Bank receiving $4.5 million and other investors $1.7 million. RESERVES, INCOME, REPAYMENTS AND Changing conditions in world capital markets, INTEREST RATE particularly in the United States, led to upward move- At June 30, 1959, the Bank's total reserves had ments in the interest rate on new Bank loans. In July reached $420 million, an increase of $70 million during 1958, the rate was 53/s%8; by September it had risen the year. The reserves consist of two parts. One, the to 53/4%, and in May 1959, it was increased to 6%. supplemental reserve accumulated from net earnings, stood at $282 million at the end of the fiscal year, DISBURSEMENTS compared with $236 million a year earlier. The other, Bank loan disbursements during the year were a special reserve to which are credited receipts from $583 million, the highest figure in the Bank's history. the commission of 1% charged on the outstanding Total disbursements to June 30, 1959, were $3,377 balance of all loans, increased by $24 million to a million. As has been the case in recent years, the Bank total of $138 million. financed a large proportion (46%) of the year's Gross income for the year excluding loan com- disbursements by drawing upon currencies other than missions was $122 million, compared with $99 million dollars. Loans are repayable in the currencies used by the year before, an increase of almost 25,%. Net the Bank; a summary of the currencies repayable to earnings, however, increased by only 10%, mainly the Bank as of June 30, 1959, is given in Appendix E. because of the Bank's increasing reliance on borrowed The following table shows the distribution by funds, for which it must pay market rates of interest, countries of the orders placed by Bank borrowers rather than on subscribed capital which is available using Bank loan funds. The normal procedure is for interest-free. Thus, in the past year, interest and issue borrowers to place their orders on the basis of inter- costs rose by 38% to $66 million. Administrative national competition, and the table illustrates the costs, the other element of Bank expenditure, increased wide distribution of orders which results. *12 - Loan Expenditures in Individual Countries $25 million was a replacement of expiring one-year (Estimates rounlded to equivalent in millions of United States dollars) notes maturing on a previous loan. The third was the Disbursements by Cumulative Fiscal Cumulative issue of $25 million of three-year 41/2% notes payable horro wers for total to Year total lo imports from): June 30, 1958 1958-59 June 30, 1959 to the Deutsche Bundesbank to replace an equal amount maturing on June 20, 1959. Belgium . . ...... $ 80.8 $ 13.9 $ 94.7 Canada . . . . . 120.7 8.3 129.0 On April 9, the Bank made its first bond issue on France . .61.5 22.2 83.7 the German investment market, selling a total of Germany . . . . 201.3 69.2 270.5 DM 200 million of fifteen-year 5% bonds. The issue Italy . . . . . . 45.9 26.8 72.7 was sold through a syndicate of more than 70 German Japan . ... . 37.0 26.3 63.3 banks, headed by the Deutsche Bank A.G., as the Sweden . ... . 24.7 8.8 33.5 principal manager and the Dresdner Bank A.G. as Switzerland . . . . 46.6 11.4 58.0 co-manager. The issue was heavily oversubscribed and United Kingdom . . 296.3 87.0 383.3 was noteworthy not only for the demand in Germany, United States . . . 1,342.7 125.8 1,468.5 but also for the volume of orders received by the All other countries 120.4 23.7 144.1 underwriters from other European countries. The Totals . . . . $2,377.9 $423.4 $2,801.3 bonds will be repayable at par in ten annual install- Other disbursements* 416.8 159.2 576.0 ments of DM 20 million each, beginning April 1, 1965. GRAND TOTAL $2,794.7 $582.6 $3,377.3 The result of the year's transactions in Germany was to put the outstanding total of Bank borrowing * These include disbiursements on loans in which the funds there at a total equivalent to $365.4 million, of which are used for local expenditures or for broad development programs where the source of the items imported with $283 million were obligations in United States Bank funds is not specified. currency and the remainder in German Marks. THE YEAR'S BORROWING The year also saw new Bank borrowing in Switzer- The continued high rate of Bank lending required land. On February 1, the Bank borrowed 100 million new borrowings totaling almost $432 million. Only one Swiss Francs (approximately $23 million) in the form new bond issue was sold in the United States market; of fifteen-year 4% Swiss Franc bonds. This transaction three-quarters of the total was borrowed from was the tenth issue of bonds in Switzerland and investors in many other countries, and included the brought the outstanding total of Bank borrowing in Bank's first public offerings of bonds in Germany and Swiss Francs to the equivalent of $140 million. The Belgium. The German issue, incidentally, was also the bonds were sold through a syndicate of leading Swiss largest public offering of non-dollar bonds so far banks, headed by the Swiss Bank Corporation. made by the Bank. Toward the end of the fiscal year the Bank also The Federal Republic of Germany was in fact the placed $5 million of two-year 41/2% notes with an largest single source of borrowed funds during the institutional investor in Switzerland. year. The first transaction was for $40 million for The Bank's first issue in Belgium consisted of three years at 21/2%, a replacement of a maturity of ten-year 5% Bank bonds in an amount of 500 million the same amount due on a previous loan. The lender Belgian Francs (equivalent to $10 million). The issue was the Deutsche Bundesbank, the central bank of was sold by four leading Belgian banks, Banque de la Germany. The same lender made three more loans to Societe Generale de Belgique, Banque de Bruxelles, the Bank; one was of DM 200 million (approximately Kredietbank, and Societe Belge de Banque. Appli- $47.6 million), in the form of three-year notes at an cations were received for more than twice the amount interest rate of 3%. Of this borrowing about $13 of the issue. The bonds will be non-callable for the million is still to be drawn down. The second was of first five years. On May 6, 1964, and any interest pay- $58 million in three-year 378% notes. Of this sum, ment date thereafter, the bonds will be callable at par. -13- C-- GROWTH OF THE BANK'S FUNDED DEBT BANK'S FUNDED DEBT As with all recent Bank issues in the United States 1 1954-1959 1 market, certain institutional purchasers took ad- Expressed in millions of United States Dollars 0 vantage of the delayed delivery feature which allowed 2000 ~~~~~~~~~~2000 2000 I g 2000 for taking delivery of the bonds on one or more 1800 l l 1800 quarterly dates from March 1, 1959, through De- F Estimated Holdings in Other Countries cember 1, 1960. In all, $6.5 million of the issue was 160 LI1600 Esti~mated Hodidhigs in United'States sod for delayed delivery; by the end of the fiscal year, 1400 A1400 $2.2 million of these bonds had been delivered by the 1 1200 _ 1200 Bank. In addition, the Bank received $31 million in Outstanding Fund d Debt delayed delivery payments for bonds sold in the l1000 previous fiscal year. 800 . 800 The acquisition by the Bank of its bonds to meet i 0 .i _ 600 purchase and sinking fund requirements during the year totaled the equivalent of $17 million in U.S. 400 _ * l l _ l i R l_ _ _ _ _ 400 i 4 400 do liars, Canadian dollars, and pounds sterling. The 200 200 Bank also retired $182 million of its bonds and notes 0 0 ~~~~~~~~~~~~~~~at maturity. 1 19 54 1955 1956 1957 1958 1959 The net result of all these transactions was an As of June 30 increase of $247 million in the Bank's funded debt, I ~~~~~As of June 30! bringing the total outstanding on June 30 to the C equivalent of $1,905 million. Although the greater part of this total is denominated in U.S. dollars, it will be clear from the transactions described above Another transaction during the year was the that its composition is becoming increasingly inter- placement on October 1, 1958, of $75 million of national. Moreover, there is a steady demand by two-year 31/4% bonds denominated in United States investors in many countries for the Bank's dollar dollars. These bonds were all placed outside the securities. At the end of the fiscal year it was estimated United States. Demand was heavy and the bonds that about half of the Bank's total obligations were were bought by 39 institutional investors in 25 dif- held outside the United States. ferent countries, many of the investors buying Bank bonds for the first time. CAPITAL SUBSCRIPTIONS AND SALES OF LOANS The only issue sold during the year on the United States investment market consisted of $100 million of The Bank's lendable funds were also augmented during Bank 41/2% fifteen-year bonds. They were marketed the year by further effective releases by member on November 18, 1958, by a nation-wide underwriting governments of the 18% of their capital subscriptions syndicate comprising 181 investment firms and banks. which is payable in the members' own currencies; these This was the tenth bond issue sold in the United States additional releases were equivalent to $134 million. under the joint management of The First Boston They brought to almost $1,500 million the total of Corporation and Morgan Stanley & Co. The issue member countries' subscriptions (including the 2%7 was sold at par and was oversubscribed. The new subscribed in gold or dollars) which have been lent bonds will not be redeemable prior to December 1, or are available for lending over the next five years. 1968, except through the operation of a sinking fund, On June 30, 1959, the cumulative total of sales of beginning June 1, 1964, which is calculated to retire parts of loans by the Bank stood at $568 million. 50% of the issue prior to maturity. During the last fiscal year, sales were $148 million, *14- BANK LENDING AND compared with $87 million in the previous year. The DISBURSEMENT increase was partly accounted for by one large 1954-1959 transaction, whereby a syndicate of Dutch banks Expressed in millions of United States Dollars purchased the remaining maturities, totaling about 800 800 $55 million, of a reconstruction loan made by the _ Bank to the Netherlands Government in August 1947. Len00 d Most of the remaining sales were of maturities of 600 Lending loans made in previous years; participations by other E Disbursement financial institutions, principally commercial banks, 500 500 at the time loans were made, accounted for $32 mil- iX lion. The largest participation of this kind was in the 4000 loan to Iran of $72 million, of which four United i30030 States banks took a total of $12 million. 20020 JOINT OPERATIONS | ._ For some years the Bank has been pursuing a policy 0 0 of combining with the United States investment 1 1954 1955 1956 1957 1958 1959 market by arranging to make a loan coincide with an approach by the borrower to the capital market for By Fiscal Years ending June 30 additional finance, often for the same project. The | past year saw extensive use of this technique; there were five joint operations, involving Austria, Den- mark, Italy, Japan and the Union of South Africa. $20 million being raised by the sale of 51/2% fifteen- The total amount raised was $250 million: Bank loans year Kingdom of Denmark bonds. The public offering contributed $100 million, $130 million came from the was handled by an investment banking group headed market, and the European Investment Bank lent the by Kuhn, Loeb & Co., Smith Barney & Co., Harriman remaining $20 million equivalent. Ripley & Co. Inc., and Lazard Freres & Co. The first joint operation of the fiscal year was with Japan provided the fourth instance, a total of Austria. The Bank loan was of $25 million; the market $40 million being shared between a loan of $10 million lent the same amount, in the form of an issue of $25 by the Bank and market issues of $30 million of three, million Republic of Austria 51/2% fifteen-year external four, five and fifteen-year bonds. The bonds were sinking fund bonds, which were marketed by an marketed by a syndicate of underwriters headed by investment banking group headed by Kuhn, Loeb & The First Boston Corporation. Co. and Ladenburg, Thalmann & Co. The fifth joint transaction assisted the Cassa per il The Union of South Africa was the borrower in the Mezzogiorno, the Italian Government agency which next joint operation, the Bank loan being of $25 is carrying out the development program for Southern million. The other half of the transaction consisted of Italy. In this case there were three parties concerned. the sale of a total of $25 million of external loan bonds The Bank lent $20 million. The same amount was of the Union, in the form of three, four, five and ten- provided by the European Investment Bank, which year bonds. Dillon, Read & Co. Inc. headed the was making its first loan. An additional $30 million underwriting syndicate. was raised by issues of four, five and fifteen-year bonds Denmark was the borrower in the third joint of the Cassa, marketed by a group of investment firms transaction, the Bank lending $20 million and another headed by Morgan Stanley & Co. .15 TECHNICAL ASSISTANCE AND LIAISON The past year has again seen heavy demand on the through the year to provide an expert to serve as part of member countries for the Bank's services in Director of the Ceylon Institute of Scientific and In- carrying out general economic surveys. At the end of dustrial Research. The Bank's special representative the fiscal year, one general survey report, that of the in Haiti completed his assignment in February 1959. Mission to Thailand, had been transmitted to the The Bank was also active in assisting various mem- Government, and was to be published shortly. ber countries to organize or operate development Another report, that of the Mission to Libya, was banks. Representatives were sent to Paraguay, Peru being drafted. A third Mission had just arrived in and China (Taiwan) to advise on the establishment of Tanganyika to begin its work there, which is expected new banks or on the reorganization of existing banks to last until the end of August. Arrangements have in those countries. The Bank also participated in the been made for a fourth Survey Mission to go to Vene- planning of the new Industrial and Mining Develop- zuela in September. It is expected that all four reports ment Bank of Iran, which is being sponsored by will have been made public by the middle of 1960. Lazard Freres of New York and The Chase Inter- They will raise to 19 the total of the general surveys national Investment Corporation. A staff member of which the Bank has made of the economies of member the Bank was lent as adviser for one year to the Indus- countries or their territories. trial Credit and Investment Corporation of India. Nor has there been any decrease in the demand for The Investitionskredit A.G. of Austria and the Com- technical assistance of a more specialized nature. monwealth Development Finance Company, Ltd. The Bank cooperated with FAO in organizing an agri- of the United Kingdom each sent a staff member to cultural survey mission to recommend an agricul- Washington for a period of training in investment tural development program for Peru. Staff members appraisal and supervision with the Technical Opera- visited Malta at the request of the United Kingdom, tions Department of the Bank. and gave their advice on various questions concerning Reference was made in last year's Annual Report future economic developments there. In the Sudan to a conference which had been held in Washington the Bank's agricultural and engineering experts, of development bank executives from many coun- assisted by a consultant on soils and agronomy, tries. Based on the discussions in this meeting, a studied important new irrigation projects and ad- book is now being prepared on the principal problems vised the Government on the technical and economic which confront the sponsors of development banks merits of the proposals. and the issues which arise in their operations. Staff members were also made available to member In addition to the usual cooperation on a national countries for longer terms to assist with development and regional basis with the various agencies of the problems. The two-man Mission in Peru was con- United Nations, the Bank was particularly active in tinued during the year and will extend into next year; helping the U.N. Special Fund with its first tasks. a similar Mission was established in Pakistan; and The Special Fund, which was set up to carry out proj- the Bank provided a staff member and additional ects of a size and duration beyond the scope of the assistance from time to time for the Special Economic U.N. technical assistance program, held its first meet- Mission set up by the Government of Ecuador with ing in January of this year. The President of the Bank the help of the Bank. The Bank also continued to is a member of the three-man Consultative Board to grant a staff member leave of absence to serve as the the Fund. By the end of June 1959, the Special Fund head of the Technical Bureau of the Plan Organization had approved 13 projects, involving a total cost of in Iran. The Bank and the United Nations continued $7,550,000. The Bank has agreed to administer two *16 - The Port of Karachi, West Pakistan's principal gateway to the world, is being rehabilitated with the help of a Bank loan of $14.8 million. The progrtamit includes rebuailding wharves, roads and bridges, installing new cranes, and constructing modern storage facilities. of these projects, a survey of electric power develop- the development of Southern Italy and the neighbor- ment in Argentina, and a study of the silting problem ing islands of Sicily and Sardinia. encountered in the approaches to the Port of Bang- At the invitation of the government and university kok. The Bank also lent members of its staff to the authorities concerned, the Institute has agreed to Special Fund for various periods to assist in apprais- conduct a short course on economic development ing the projects submitted, at the University College of the West Indies in Ja- The Economic Development Institute, the Bank's maica this summer. About 25 participants have been staff college of economic development, held its fourth selected by the University College, including seven course from the end of October 1958 until April from Caribbean countries outside the Federation of 1959. The course was attended by 20 senior officials the West Indies. The fifth regular course of the Insti- from 18 of the Bank's less developed member coun- tute will begin in Washington in October. The par- tries, ten coming from Asia, four from Africa, four ticipants have already been selected, and consist of from Latin America, and two from Europe. The 25 senior officials from 21 countries. seminars of the course were led by a small regular The Bank also continued the training program, Institute staff, supplemented by outside experts on which it has operated for 12 years, for more junior particular subjects. The course included field trips officials from the Bank's member countries. There to various centers of American finance and industry, were nine participants in the program this year. and ended with a visit to Southern Italy, where the During the year also three senior officials from mem- participants saw several of the projects involved in ber countries came to the Bank for specialized train- the program of the Cassa per il Mezzogiorno for ing in finance and project evaluation. *17 annex The information in this Annex describes loans and other Bank activities during the year. Loans to borrowers other than member governments carry the guarantee of the governments concerned. Interest rates shown include the 1% commission which is allocated to the Bank's Special Reserve. The participations of financial institutions in loans of the year were all without the Bank's guarantee. A F R I C'A BRITISH HIGH COMMISSION TERRITORIES production will be at an annual rate of 500,000 tons. A plant to process the crude ore will be provided at At the request of the Government of the United King- the site of the mine, along with living quarters, work- dom, the Bank has nominated the Chairman of a shops, electric power and other facilities. The ore mission which the Government proposes to send to will begin its journey to the sea on a 45-mile overhead the High Commission territories of Basutoland, cableway from the mine to the Gabon-Congo fron- Bechuanaland Protectorate and Swaziland, to make tier. The next stage will be on a new 180-mile railroad recommendations for a five-yeardevelopmentprogram. which is being built through the Congo Republic to link up with the Congo-Ocean Railroad 125 miles G A B O N from the Atlantic port of Pointe Noire. At the port, COMILOG will install ore storage and loading facilities. MINING LOAN The total cost of the project is estimated at the $35 million 15-year 6% loan of June 30, 1959 equivalent of $89 million. Construction is expected BORROWER * Compagnie Miniere de l'Ogooue to take three years and the first shipments of ore are (COMILOG) planned for mid-1962. The loan is guaranteed by the This was the Bank's first loan in French Equatorial Republic of Gabon, the Congo Republic and France. Africa and the first to be made to a private company PARTICIPATION . Lazard Freres & Co., New York, operating in member republics of the French Com- is arranging the private sale of maturities representing munity. COMILOG is a company incorporated in the at least half the amount of the loan. Republic of Gabon; its share capital is divided 51%.- 49% between French and United States shareholders. L I B Y A The loan will help to finance the equipment and operation of a manganese mine in the interior of At the request of the Government, the Bank sent a Gabon, and the construction of transport facilities mission to Libya in January 1959 to make a general in Gabon and the Congo Republic to carry the ores survey of the economy and to assist in the formulation to the coast. The export of the manganese will pro- of an economic development program. The mission vide the Gabon Republic with an important new included economists and advisers on agriculture, source of foreign exchange, estimated to amount to water resources, transportation, communications and as much as $16 million equivalent a year. The Congo public utilities, industry, education and public health. Republic will benefit from the project through the Three agencies of the United Nations, FAO, WHO and opening up of hitherto inaccessible timber resources. UNESCO, provided assistance to the Bank in recruiting COMILOG'S ore deposits are extensive and of high and briefing the mission members. The mission grade. Conditions favor open pit mining and initial was preparing its report at the end of the fiscal year. *18 8 Etltiopia's high iway program, assisted by two Bank loans, -a haIs helped to make possible recent large inc,eases in coffee and oilseed e.ports. This bricdge near Addis Ababa awaits a new concrete deck. SUDAN RAIL AND WATER TRANSPORT LOAN $39 million 20-year 538C loan of July 21, 1958 BORROWER Sudan This first Bank loan to the Sudan is being used to buy equipment and materials from abroad for im- ' provement and expansion of the railway system, port facilities and river transport services on the Nile. All sections of the program are being carried out by the state-owned Sudan Railways. The railway system comprises some 2,670 track . miles and the loan provides for the purchase of main- line diesel locomotives, freight cars, undercarriages for coaches, and materials and equipment for shops, yards and communications. The loan will also assist the building of two new railway extensions into pro- , - ductive zones in the South and West and the laying of heavier rails on an important section of the present lines. The river services operate for 1,500 miles on three stretches of the Nile and its tributaries through- out the year, and on additional routes during the rainy - season. These services will be improved through the conversion of some of the fleet from steam to diesel power and by the addition of new diesel craft built at the Khartoum Dockyard. At Port Sudan on the TANGANYIKA Red Sea, the country's chief outlet to world markets, new cargo berths will be built, making it possible to At the request of the Government, the Bank organ- dispense with costly operations at pontoon moorings. ized a mission to make a general survey of the econ- PARTICIPATION- The Chase Manhattan Bank, Bank omy and to assist in the formulation of a development of America and The First National City Bank of New program for Tanganyika. The mission arrived early York are participating in the loan for a total amount in June and expects to remain there for about three of $1,750,000. months. It includes economists and advisers on in- OTHER ACTIVITIES dustry, trade, agriculture, water resources, transpor- At the request of the Government. a mission visited tation and mineral resources. the Sudan in October and November of 1958 to ex- amine and advise on the technical and economic T U N I A IA merits of the Managil irrigation project and the Roseires storage dam on the Blue Nile. The mission's The Bank sent its first mission to Tunisia in February report was presented to the Government in April. 1959 to make a study of the economic situation. * 19- UNION OF SOUTH AFRICA construction of 160 miles of branch and suburban lines. A total of 530 locomotives and large quantities RAILWAY LOANS of rolling stock will be purchased. $25 million 10-year 53/4% loan of December 2,1958 BORROWER - Union of South Africa $11.6 million 10-year 6% loan of June 10, 1959 The loan was part of a joint operation in which the BORROWER * Union of South Africa Bank loan was made to coincide with a public offer- This second loan gave further assistance to the ing in New York of $25 million of external loan bonds South African Railways and Harbours Administra- of South Africa by an underwriting syndicate headed tion in financing the railway expansion program. by Dillon, Read & Co., Inc. The funds received from In all the Bank has now made six loans for the the bond issue contributed to South Africa's capital improvement of railways in South Africa, the total expenditures. The Bank loan is helping to finance lent being almost $137 million. the expansion program of the South African Railways PARTICIPATION * Bank of America, Continental and Harbours Administration. Although the railways Illinois National Bank and Trust Company, The have already greatly increased their capacity, and are Philadelphia National Bank, The New York Trust now carrying two-thirds more freight than at the end Company, Morgan Guaranty Trust Company of of 1945, they are still not able to handle all the freight New York, National Shawmut Bank of Boston, offered. The Govemment has therefore accelerated The First National Bank of Chicago, The Chase Man- its railway investment program to enable the railways hattan Bank, The First National City Bank of New to do so by 1962. York, The Northern Trust Company and the Swiss The program includes the improvement of some 410 Bank Corporation, New York Agency, are participat- miles of line, the electrification of 640 miles, and new ing in the loan to the extent of S2,381,000. ASIA AND THE MDIEE l AST CE Y L O N PARTICIPATION Manufacturers Trust Company and POWER LOAN Bank of America are participating in the loan to $7.4 million 20-year 53/8% loan of September 17, 1958 the extent of $717,000. BORROWER * Ceylon OTHER ACTIVITIES The loan will help to finance a thermoelectric proj- The Bank, together with the United Nations, con- ect to increase supplies of power in southwestern tinued to provide a Director during the year for the Ceylon, which contains nearly half of the country's Ceylon Institute of Scientific and Industrial Research. population and is the center of economic activity. The demand for power for commercial, residential CHINA and industrial use has been growing rapidly in Cey- lon; in the past six years power sales have increased A Bank mission went to Taiwan in February-March at an average rate of 151/2% a year. The project con- 1959 to advise the Government on operational pol- sists of the construction of a 25,000-kilowatt power icies and methods to be followed by the China De- plant in Colombo. The transmission network will velopment Corporation, which was formally inaugu- also be extended, as will distribution facilities. rated on May 15, 1959. *20- I N D I A structed underground and will be equipped initially with four 60,000-kilowatt generators. The loan will POWER LOANS also be used for the necessary transmission facilities. $25 million 20-year 53/g% loan of July 23, 1958 BORROWER * India RAILWAY LOAN The loan funds are being re-lent by the Indian $85 million 20-year 53/4% loan of September 16, 1958 Government to the Damodar Valley Corporation, an BORROWER * India autonomous organization established in 1948 to pro- This loan will help to meet the foreign exchange mote the unified development of the Damodar Valley. costs of a program to improve and expand the Indian This area lies northwest of Calcutta in the States of Railways, which have been the object of special atten- Bihar and West Bengal, and because of its rich min- tion in India's Second Five-Year Plan. The Indian eral resources has become the most highly indus- railway system, the fourth largest in the world, is trialized region in India. DVC's activities include the owned by the Government and carries the bulk of provision of electric power, flood control, irrigation the country's traffic. The acute shortage of rail trans- and drainage, land conservation and afforestation, port of a few years ago has been alleviated, but fur- and promotion of the health and general welfare of ther expansion is necessary to meet the continuing the inhabitants of the Valley. Previous Bank loans growth of freight and passenger traffic. totaling $27 million, made in 1950 and 1953, helped It is now planned to increase the annual freight to finance some of these projects. capacity of the railways from 114 million tons to The new Bank loan will be used to install an addi- 168 million tons, involving the purchase of 112,000 tional 75,000 kilowatts of generating capacity at the freight cars. The program provides for an increase in Bokaro thermoelectric plant and to construct a new passenger traffic during the Plan period. The cost of 150,000-kilowatt thermoelectric station at Durgapur the railway program is estimated to be the equivalent to serve the new steel mill now being completed there. of $2,360 million, of which about $800 million is to Additional transmission and distribution facilities be spent abroad. In 1957 the Bank made four loans, are also included in the program. totaling $90 million equivalent, to finance part of PARTICIPATION * Brown Brothers Harriman & Co. the materials and equipment to be imported during and Vereinsbank of Hamburg, Germany, are partici- the first two years of the program. pating in the loan for a total equivalent to $263,000. PARTICIPATION * The First Pennsylvania Banking and Trust Company of Philadelphia and The Char- $25 million 25-year 53/4% loan of April 8, 1959 tered Bank, New York Agency, will participate in the BORROWER * India loan for a total amount of $1,000,000. The funds from this loan are being re-lent to the Bombay State Government for the construction of IRAN the Koyna hydroelectric power plant, 130 miles southeast of Bombay. The project is designed to sup- ROAD LOAN plement the power system supplying the Bombay- $72 million 17-year 6% loan of May 29, 1959 Poona area, where industrial growth has been very BORROWER . Iran rapid in recent years. The main features of the project This loan, the largest ever made by the Bank for are the construction of a dam and tunnel system to roads, will help finance a large-scale project for the divert part of the flow of the Koyna River from the construction and improvement of about 1,600 miles eastern to the western side of the mountains which of roads included in Iran's Second Seven-Year De- form the continental divide of India. The powerhouse, velopment Plan. These roads serve the most populous about 40 miles from the Arabian Sea, will be con- and productive regions of Iran and it is expected that .21- the project will stimulate agricultural output and obstacle to the execution of government-sponsored facilitate the movement of goods in internal and in- development projects and to the growth of private ternational trade. The project also includes the plan- industry. The project is scheduled for completion ning and preliminary engineering of Iran's next main by mid-1962. road program and of a feeder road program. PARTICIPATION * Bank of America, The Chase Inadequate transportation has long been a major Manhattan Bank, The First National City Bank of handicap to development in Iran, an area as large as New York, and Irving Trust Co. are participating in Germany, France, Italy and Spain combined. Some the loan to the extent of $12 million. 80%C of the 20 million population are engaged in OTHER ACTIVITIES agriculture and since most of the country is arid and The agreement between the Bank and the Plan Or- mountainous, cultivation is carried on in widely ganization whereby the Bank recruits foreign experts scattered localities. Iran's 7,500 miles of national for the Organization's Technical Bureau has been roads carry the bulk of the country's freight and pas- extended until April 30, 1960. The post of Chief of senger traffic. Very few of the roads are built to the Bureau continued to be filled by a Bank staff mem- standards adequate for motor vehicles and most of ber on leave of absence. them are greatly in need of repair; this involves de- The Bank's resident mission in Iran completed its lays and damage in the transportation of cargo and assignment in July 1958. has increased the cost of operating trucks, the prin- cipal users of the roads. Lack of adequate road con- I R A Q nections from producing to consuming centers causes a waste of produce, with higher prices to consumers A staff member, who had been on leave of absence and financial losses to cultivators, and has been an from the Bank serving as Economic Adviser to the Development Board since September 1957, concluded his assignment in August 1958. Bank lending to Inclia for electric power has helped to add almost one nmillion kilowatts of power capacity. This tuirbine is for the Trombay power plant in Bomnbay. I S R A E L The Bank sent its first mission to Israel in April 1959 to make an appraisal of the economic situation. JAPAN STEEL PRODUCTION LOANS $33 million 15-year 5y8%/I loan of July 11, 1958 BORROWER Japan Development Bank The Japan Development Bank is tfie government agency which supplies long-term credit for industrial development in Japan. The funds from this loan are being re-lent to assist the expansion program of Sumi- tomo Metal Industries Ltd., the fourth largest steel producer in Japan, whose main plant is at Wakayama, in central Honshu. The program will increase the company's annual productive capacity to about 825,- 000 tons of pig iron, 1,450,000 tons of steel ingots and 1,334,000 tons of finished and semi-finished steel $22 million 15-year 53/4% loan of September 10, 1958 products. The project includes the construction of a BORROWER . Japan Development Bank blast furnace with a daily capacity of 1,000 tons of pig The loan is being passed on to the privately-owned iron, 57 coke ovens, a by-products plant, a 47' bloom- Japan Steel and Tube Corporation Limited to help ing mill, and all auxiliary facilities for these plants. to complete its four-year expansion program. This Three open hearth furnaces are also to be remodeled company is the third largest steel manufacturer in to increase their capacity, and harbor facilities in- Japan, and is planning to increase its annual produc- stalled to receive ships up to 15,000 tons. tion capacity of pig iron from 1,125,000 to about PARTICIPATION * J.P. Morgan & Co., Inc., Conti- 1,500,000 tons, and of ingot steel from 1,700,000 to nental Illinois National Bank and Trust Company of about 2,300,000 tons, with a corresponding expan- Chicago, Compagnie de Gestion et de Banque of sion of finishing facilities. The Bank funds will help Geneva, Switzerland, Commerzbank of Dusseldorf, to erect two 60-ton oxygen top blowing converters, Frankfurter Bank of Frankfurt-am-Main, Vereinsbank a 46" slabbing mill, a 68" semi-continuous hot strip of Hamburg and Bayerische Hypotheken-und mill and a 66" reversing cold strip mill in the new Wechsel-Bank of Munich, Germany, are participating Mizue plant near Tokyo. The loan will also help to in the loan to the extent of $1,100,000. expand the company's seamless tube mill. PARTICIPATION * National Bank of Commerce of Seattle, Washington and Manufacturers Trust Com- $10 million 15-year 53/g0/O loan of August 18, 1958 1 pany, of New York, are participating in the loan for BORROWER . Japan Development Bank a total amount of $1,698,000. The Bank funds are being re-lent to the Kobe Steel Works, Ltd., the sixth largest private steel maker in Japan, to assist a program designed to increase Kobe's annual production capacity of steel ingots from about $29 million 25-year 53/4,% loan of September 10, 1958 524,000 to 640,000 tons and finished steel products BORROwER * Japan Development Bank from 534,000 to about 600,000 tons, as well as to The loan funds are being made available to the raise its non-ferrous metal and machinery-making privately-owned Chubu Electric Power Company, capacity. The Bank loan will be used to build a new Inc., to help to install 170,000 kilowatts of new hydro- blast furnace and related facilities. The furnace will electrical generating capacity to supply mid-eastern have an output of 288,000 tons of pig iron a year and Honshu and its chief industrial city, Nagoya. The will provide the Kobe company with its own source project includes the construction of a hollow con- of this material. The project also includes the con- crete gravity dam 397 feet high, which will impound struction of harbor installations at Nadahama, in 107 million cubic meters of water. Hatanagi No. I Kobe, unloading and yard facilities for iron and coke, power station, containing half of the new capacity, a sintering plant and a 16,400-kilowatt thermoelectric will be located near the foot of this dam, while Hata- power plant. The loan will also help to finance the nagi No. 2 will be further downstream. remodeling of two open hearth furnaces at the Waki- PARTICIPATION . Continental Illinois National Bank nohama steel plant in Kobe and to install a new mixer & Trust Company of Chicago is participating in the there to receive pig iron from Nadahama. loan to the extent of $336,000. PARTICIPATION . The First National City Bank of New York, Berliner Handels-Gesellschaft of $10 million 25-year 53/4% loan of February 17, 1959 Frankfurt-am-Main and Vereinsbank of Hamburg BORROWER . Japan Development Bank are participating in the loan in an amount totaling This loan was the first to be made by the Bank in the equivalent of $784,800. Japan as part of a joint operation. Coincident with *23 - the Bank loan, $30 million of Japan bonds were sold also being re-lent by the Japan Development Bank on the New York investment market. Through a to the same power company. syndicate of underwriters, headed by The First Bos- EPDC is a publicly-owned utility and was established ton Corporation, Japan offered $15 million of fifteen- in 1952. It has already completed several hydroelec- year bonds; it also offered $15 million of three, four tric projects with a total capacity of 748,100 kilowatts. and five-year bonds, with The First Boston Corpora- The Miboro project consists of a very large rock-fill tion acting as financial adviser and offering agent. dam and an underground powerhouse with 215,000 The proceeds of the bond issues were added to the kilowatts of generating capacity. country's foreign exchange reserves, and the yen OTHER ACTIVITIES equivalent was re-lent to the Electric Power Develop- SOFREMINE (Societe Francaise d'Etudes Minieres), ment Company, Ltd. (EPDC) which will use the funds which surveyed the Japanese coal industry under for the Miboro hydroelectric power project on the contract to the Bank and the Japan Productivity Cen- Sho River in Honshu Island. The Bank funds are ter, presented its final report in July 1958. The Chainat irrigation barrage on the Chao Phya River in Thailand was completed in 1955 with the help of a Bank loan of $18 million. Although the irrigation system is still to be completed rice production in the area has already increased by 25%70. *24- M A LAY~ A agricultural assistant in June 1959. In April 1959 the Bank's industrial consultant advised the Government POWER LOAN regarding a proposed steel mill. In June, at the re- $35.6 million 25-year 53/4% loan of September 22, 1958 quest of the Government, the Bank initiated steps to BORROWER * Central Electricity Board support the proposed Agricultural Inquiry Com- This was the first Bank loan in the newly inde- mission and undertook, in cooperation with FAO, to pendent Federation of Malaya. It will help to finance provide the foreign members of the Commission. the Cameron Highlands hydroelectric project to in- crease power supplies to the capital, Kuala Lumpur, THAILAND and the States of Selangor, Negri Sembilan and Ma- lacca. Additional power is urgently needed in the At the request of the United Nations Special Fund, area to satisfy a rapid increase in industrial and other the Bank has agreed, subject to the conclusion of demand. The new capacity will also make possible satisfactory arrangements with the Special Fund, the extension of the network to other areas. The to administer an investigation of the problem of silt- Central Electricity Board is the largest distributor of ing in the Chao Phya estuary; the investigation will power in the Federation, serving two-thirds of all be financed by the Special Fund. power users. The Bank loan will be used to build a The report of the general survey mission which 75,000-kilowatt underground power station at Jor, spent the fiscal year 1957-58 in Thailand, was sub- an intermediate 5,500-kilowatt power station at Habu mitted to the Government in March 1959. At the and to extend the transmission system. end of June, the report was being printed. PARTICIPATION * The Chartered Bank, New York Agency, The Hong Kong and Shanghai Banking Corporation, New York Agency, and Mercantile Bank, Ltd. are participating in the loan for a total A Bank mission visited the Republic in April and May amount of $1,280,000. to make an up-to-date appraisal of the economic and financial situation. PAKISTAN In December 1958 the Bank stationed a resident repre- VIET-NAM sentative in Pakistan for a period of two years; he A Bank mission went to Viet-Nam in January 1959 was joined by an assistant in February 1959 and an for discussions with the Government. E U R ""U P E A U S T R I A million of Austrian 51/27 external sinking fund dollar bonds by an investment group headed by Kuhn, POWER LOAN Loeb & Co. and Ladenburg, Thalmann & Co. Ap- $25 million 25-year 53/4% loan of December 2, 1958 proximately half the proceeds from the sale of the BORROWER * Verbundgesellschaft and Donaukraft- bonds will be re-lent by the Austrian Government to werke the two corporations which received the Bank loan. This loan was part of a joint operation involving a The remainder will be used by the Government to Bank loan and a public offering in New York of $25 finance other capital expenditure. 25 - Verbundgesellschaft is a government corporation F I N L A N D which operates most of Austria's transmission system and controls the operations of four publicly owned INDUSTRY LOAN power generating companies, of which Donaukraft- $37 million 15-year 53/4% loan of March 16, 1959 werke is one. The new funds will help to finance the BORROWER . Mortgage Bank of Finland Oy construction of the Aschach hydroelectric power The funds from this loan are being re-lent by the project on the Danube, near the city of Linz. This borrower, a subsidiary of the Bank of Finland, to run-of-the-river project consists of a dam and a gener- nine companies in the pulp and paper industry. Fin- ating plant with a capacity of 264,000 kilowatts. The land is Europe's largest exporter of newsprint and plan for the development of the hydroelectric poten- kraft paper and board. Wood products account for tial of the Danube in Austria contemplates the con- 80%C of the country's export earnings, more than half struction of 15 power plants having a total capacity being from pulp and paper. Most of the companies of more than 2,000,000 kilowatts. With the Aschach in the industry are integrated producers, manufactur- project, 25% of this capacity will be harnessed. ing in addition to pulp and paper such items as sawn goods, plywood, chemicals and prefabricated houses. D E N M A R K Approximately half of the Bank loan has been allo- cated to three companies which are expanding their POWER LOAN capacity to produce sulphate pulp by a total of 150,000 $20 million 20-year 53/4% loan of February 4, 1959 tons a year. Another third of the loan will assist BORROWER - Kingdom of Denmark three other companies to expand their newsprint The loan was part of a joint operation in which the capacity by 180,000 tons annually. The remainder of Bank loan was made to coincide with a public offering the funds will help the other three companies to ra- in New York of $20 million Kingdom of Denmark tionalize their steam and power facilities and to in- 51/2%/0 fifteen-year external loan sinking fund bonds crease their capacity to produce dissolving and high- by an investment banking group headed by Kuhn, grade paper pulp by about 55,000 tons a year. Loeb & Co., Smith Barney & Co., Harriman Ripley PARTICIPATION * The First National City Bank of & Co. Inc., and Lazard Freres & Co. The bond issue New York, Irving Trust Company, Chemical Corn will help to meet Denmark's general capital needs. Exchange Bank, The New York Trust Company, The The Bank loan will help to finance electric power ex- Chase Manhattan Bank, Bankers Trust Company, pansion in Denmark. Six public utility companies Brown Brothers Harriman & Co. and Swiss Bank are carrying out the expansion; they operate about Corporation of Basle, Switzerland, are participating 65%, of the total generating capacity of the country, in the loan for a total amount of $2,302,000. and serve the islands of Zealand (in which Copen- hagen is located) and Bornholm and the north and TALY east central part of Jutland. The projects involve the installation of 437,000 kilowatts of new generating INDUSTRY AND POWER LOAN capacity in five thermoelectric plants and the construc- $20 million 20-year 534% loan of April 21, 1959 tion of associated substations and 190 miles of trans- BORROWER * Cassa per il Mezzogiorno mission lines. Construction is due for completion by The Cassa is the governmental agency established mid-1962 at a total cost equivalent to $59 million. in 1950 to administer a program to develop the south- PARTICIPATION * The New York Trust Company, ern part of Italy and the islands of Sicily and Sar- The First National City Bank of New York and dinia. This loan was the sixth of a series of Bank Girard Trust Corn Exchange Bank are participating loans to the Cassa, and brought the gross total to $260 in the loan for a total amount of $1,551,000. million. It was the first Bank loan to be made as part *26- of a joint operation with the investment market in polyethylene and other products, using ethylene from the United States and the European Investment Bank. SINCAT as its raw material. The market issues consisted of $30 million of four, five and fifteen-year bonds of the Cassa, marketed MALTA through a group of investment firms headed by Mor- A two-man mission visited Malta in September 1958 gan Stanley & Co. The European Investment Bank to explore how best the Bank could assist the author- loan was equivalent to $20 million. The Cassa will ities in the formulation of an economic development apply the funds from the bond issues to financing its program. Later in the year the Bank informed the general program. The loans from the World Bank Government of the United Kingdom that it would be and the European Investment Bank will be re-lent prepared to advise the Maltese authorities from time by the Cassa to help to finance a new thermoelectric to time, at their request, on current problems of the project and two new petro-chemical plants, in the economy and on plans for future development. following amounts: $18 million will go toward build- ing a new 210,000-kilowatt thermoelectric plant on the Mercure River about 120 miles southeast of S P A I N Naples; $14 million will assist the SINCAT chemical In October, 1958, following Spain's admission to the manufacturing plant in Sicily to extend its production Bank, a small mission visited Madrid to make contact into petro-chemicals, including ethylene and its with the administrative and financial authorities; the derivatives; $8 million will be used by S.p.A. CELENE mission made a preliminary study of the economic to set up a plant, also in Sicily, for the production of and financial situation. A series of power stations across the Danube in Austria will provide two million kilowatts of electric power capacity. A Bank loan assisted the construction of the 60,000-kilowatt Ybbs- Persenbeug run-of-the-river plant, 80 miles upstream from Vienna. W~~~~ AZ 1~ WESTERN HEMISPHERE A R G E N T I N A $11.6 million 20-year 6% loan of June 17, 1959 The Bank has agreed to collaborate with the Argen- BORROWER * Brazilian Traction Light and Power tine Government in making a survey to establish the Company Limited prospective need for electric power, the most economic This loan will help the Company to add 220,000 methods of providing the power needed, and the mag- kilowatts of generating capacity to the systems serv- nitude of investment required. The project will be ing Rio de Janeiro, Sao Paulo and Santos, the most financed in large part by the United Nations Special densely populated and industrial areas in Brazil. Fund, and the Bank, which will act as Administrator The Rio de Janeiro power system will benefit by of the project, will make available members of its the construction of a new 90,000-kilowatt hydroelec- staff to help in its execution. tric power plant at Ponte Coberta on the Lajes River. Under an agreement of November 28, 1958, the The Sao Paulo system will be reinforced by increasing Chief Justice of the Argentine Supreme Court was the capacity of the Cubatao hydroelectric power made responsible for determining the prices to be plant from its present 260,000 kilowatts to 390,000 paid for the properties of the American and Foreign kilowatts. The increase is to be achieved by the addi- Power Company transferred to the Government. At the tion of two new generating units. A third pump is request of the Government the Bank designated one of being added to give the required flow of water to the the four experts who are advising the Chief Justice. Cubatao station, and a new section will be added to the high voltage transmission system. B R A Z I L This loan was the second made to replace a previous power loan commitment of $25 million, which was POWER LOANS cancelled in 1957 at the request of the Brazilian Gov- $73 million 25-year 534% loan of October 3, 1958 ernment before any disbursements had been made. BORROWER . Central Eletrica de Furnas, S.A. (CEF) PARTICIPATION . The Canadian Bank of Commerce The loan will be used for the first stage of the largest and Grace National Bank of New York are partici- hydroelectric project ever undertaken in Latin Amer- pating in the loan to the extent of $300,000. ica. The completed project will increase by 50% the power capacity now available in central-southern Brazil, the area in which four-fifths of Brazil's indus- COLOMBIA try and much agricultural activity is concentrated. CEF was formed early in 1957 to construct and operate POWER LOANS the new plant, and is a joint enterprise of the Federal $2.8 million 20-year 53/4% loan of December 15, 1958 Government, power agencies of the States of Sao BORROWER . Central Hidroelectrica del Rio An- Paulo and Minas Gerais, and private companies. chicaya, Limitada (CHIDRAL) The power station will be at Furnas Rapids on the This is the Bank's third loan to CHIDRAL; the two Rio Grande, 200 miles north of Sao Paulo, and will previous loans aggregated $8 million and helped to ultimately have a capacity of 1,100,000 kilowatts, of finance a 44,000-kilowatt hydroelectric plant at which about 600,000 kilowatts will be installed as the Anchicaya-recently expanded to 64,000 kilowatts- first stage. The earth and rock-fill dam will be nearly and a 10,000-kilowatt thermoelectric station at 400 feet high and will create a reservoir 150 miles long, Yumbo. The new loan will finance several develop- having sufficient storage to provide year-to-year regu- ments aimed at increasing power supplies in Cali, lation of the river flow to the power station. the main city of the Cauca Valley in Colombia: a -28. J~~~~~~~~~~~~~- *~~~- - -iS1:isl -E ii5 Gutatemala's first road linking the capital city to the Car ibbean is now open to traffic. This new steel an2d conerete bridge spans a deep canyon outtside Gniateinala City, and marks Ihe beginning of the new 200-mile high way constructed with the help of a Bank loan. second 10,000-kilowatt generator will be installed at $4.6 million 20-year 534co loan of January 30, 1959 Yumbo, and studies will be carried out regarding a BORROWER * Central Hidroel6ctrica de Caldas, Ltda. possible third unit; CHIDRAL will re-lend $50,000 of The loan to CHEC will help to expand electric power the loan to the municipality of Cali to assist in ex- supplies in the area of Manizales, the center of Colom- panding the city's distribution system; and $400,000 bia's coffee trade. The project is the second stage of a of the loan will be spent on a suction dredge and program to develop the Campoalegre and Chinchina auxiliary equipment to control silting in the Anchi- river basins and includes construction of the 26,600- caya Reservoir. Although power capacity in the Cali kilowatt Esmeralda hydroelectric plant, with asso- area has been increased seven-fold since 1955, popu- ciated substations and 76 miles of transmission lines, lation growth and rapid industrialization continue to and the relhabilitation and expansion of distribution create fresh demands for additional capacity. systems in several neighboring towns. PARTICIPATION . Chemical Corn Exchange Bank This is the Bank's second loan to CHEC; in 1950 a is participating in the loan to the extent of $280,000. loan of $2.6 million was made to help finance the first 29 stage of this development, the 16,000-kilowatt Insula The greater part of the new loan will be used for the power plant. CHEC, which now has an installed capac- import of agricultural machinery, equipment and ity of 22,800 kilowatts, distributes about four-fifths materials; about $1 million will finance imports for of its output in the Manizales area. The remainder is storage and processing plants and light industries. sold in bulk to a number of small towns outside Agriculture in Costa Rica, with coffee the most CHEC'S present retail area. The Esmeralda project important crop, contributes nearly half the national will enable the company to extend its services to 19 income, accounts for almost all export earnings and additional towns which are badly in need of power. directly employs over half the population. Recent large increases in output have been due to the appli- $12 million 25-year 6% loan of May 20, 1959 cation of modern mechanical methods of cultivation BORROWER . Empresas Puiblicas de Medellin (EPM) to the traditional crops and also to new crops, such The Medellin area of west central Colombia, the as rice and tobacco, which are being grown on a large center of the country's textile industry, has developed scale on newly opened lands along the Inter-American very rapidly over the past few years. To keep pace Highway. The Central Bank's credit program is also with the growth of industry and population, EPM plans assisting industry in its transition from a system of to add 246,000 kilowatts to the present installed capac- home industries to modern industrial establishments. ity of 136,500 kilowatts by 1964. PARTICIPATION * Continental Illinois National Bank The Bank loan will assist the first phase of this pro- and Trust Company of Chicago, Bankers Trust gram. The project consists of diverting the Concep- Company, Chemical Corn Exchange Bank, The Phila- ci6n and Tenche Rivers into the Guadalupe to in- delphia National Bank, The First National City crease its flow; building a large earth-fill dam on the Bank of New York, Girard Trust Corn Exchange Guadalupe to create a reservoir with a useful storage Bank, Brown Brothers Harriman & Co. and Grace capacity of about 32 million cubic meters; construct- National Bank of New York are participating in the ing a power plant at the dam with one 16,000-kilowatt loan to the extent of $1,510,000. generator; and installing another power plant down- stream equipped with two 40,000-kilowatt generators. E C U A D O R The project also includes new transmission lines to connect the new plant with the existing system, and PORT DEVELOPMENT LOAN the extension of the distribution system in Medellin $13 million 25-year 53/4% loan of October 9, 1958 and neighboring towns. EPM will use SI50,000 of the BORROWER * Guayaquil Port Authority loan to finance preliminary engineering studies for The loan will assist the Guayaquil Port Authority, the second stage of the program, the proposed plants an autonomous agency created in April 1958, to con- on the Nare River. struct a new port at Guayaquil, Ecuador's largest city. PARTICIPATION . Grace National Bank of New York Guayaquil handles about 90%O of Ecuador's imports is participating in the loan to the extent of $100,000. and 60% of its exports in terms of tonnage. The economic growth of the area since 1953 has raised the C 0 S T A R I C A tonnage of exports through the port by 70%, the main exports being bananas, coffee, cacao and sugar. IMPORTS OF CAPITAL EQUIPMENT LOAN The existing port is located at the point where the $3.5 million 6-year 534% loan of February 11, 1959 Daule and Babahoyo Rivers meet, 55 miles from the BORROWER * Central Bank of Costa Rica sea, to form the Guayas River. It is accessible only This loan is the second to assist the Central Bank to small vessels, and most of these must load or un- to carry out the lending program it began in 1952 for load into lighters in midstream, through lack of deep the development of agriculture and light industry. water and of wharves. Larger vessels have to unload 30 into lighters off the island of Puna, 35 miles down- Highway in Guatemala and provide a direct route stream. The new port will be built six miles from through El Salvador from Guatemala to Honduras. Guayaquil on the Estero Salado, an arm of the Gulf PARTICIPATION * The First National City Bank of of Guayaquil. The project includes the construction New York, Grace National Bank of New York and of a concrete wharf 3,000 feet long, capable of accom- The National Bank of Washington, D. C., are par- modating five ships at a time. The area behind the ticipating in the loan for a total amount of $300,000. new wharf will be reclaimed, and transit sheds and other buildings will be erected. A barge canal will POWER LOAN connect the Estero Salado with the Guayas River, $3 million 25-year 53/4% loan of February 20, 1959 and a four-lane highway will link the new port with BORROWER * Comisi6n Ejecutiva Hidroel6ctrica the city. It is estimated on the basis of present traffic del Rio Lempa (CEL) that the new port will reduce handling charges by the This loan will help CEL to expand its generating equivalent of more than $500,000 annually. The capacity to 60,000 kilowatts and to widen its service reduction in turn-around time of ships will result in a area. Although El Salvador is predominantly an further saving equivalent to about $1.5 million a year. agricultural country, industry is becoming important. PARTICIPATION . The National Bank of Washington, About 100 new industrial plants have been established D. C., is participating in the loan to the extent of since 1954 and many others have been expanded. $100,000. A large part of this development has been due to OTHER ACTIVITIES the ample supply of power made available by the Rio The Bank's resident representative, who had been in Lempa hydroelectric plant completed in 1954 by CEL Ecuador since March 1956, completed his assignment with the help of a previous Bank loan. The Rio in April 1959, when the Special Economic Mission Lempa plant provides nearly three-quarters of the which the Bank helped to recruit in 1957 to advise the country's entire generating capacity and supplies Government on economic and financial policies com- power to seven utility companies which together serve pleted its work. A Bank economist also assisted the 95% of all electricity consumers. The Bank funds will Special Mission during the year. meet the foreign exchange costs of adding a fourth 15,000-kilowatt generator at the Rio Lempa plant. EL SALVADOR ROAD LOAN HAfTI $5 million 15-year 53/4% loan of January 7, 1959 The Bank's resident representative, who had been BORROWER El Salvador in Haiti since February 1957, completed his assign- The loan will assist the construction of 230 miles of ment in February 1959. feeder roads to increase the contribution of El Sal- vador's new Pacific Coastal Highway toward the de- H O N D U R A S velopment of the coastal region. The Highway was itself built with the help of an earlier Bank loan of POWER LOAN S11.1 million. The resulting road network will open $1.45 million 15-year 6% loan of May 20, 1959 up a large area to agriculture. Of the 21 feeder roads BORROWER * Empresa Nacional de Energia Elec- to be constructed, 18 will connect with the Coastal trica (ENEE) Highway and three with the Inter-American Highway. ENEE is an autonomous government agency and the The Bank loan will also help to finance the comple- sole supplier of power to Tegucigalpa, the main center tion of certain parts of the Coastal Highway, includ- of commerce and industry in Honduras. Although ing a bridge over the Rio de Paz to join the Pacific consumption of power in the area has been increasing 31 in recent years at the rate of 13%7 a year, the consump- undertaken consists of the construction of a two-berth tion level is still one of the lowest in Latin America. pier for petroleum products and another pier with The Bank funds will increase generating capacity three berths, two for general cargo, and one with by 35% through the installation of two diesel units mechanical equipment for the loading of minerals. having a combined capacity of 2,500 kilowatts; dis- This installation will be able to load concentrates into tribution facilities will be improved and expanded to ship at a rate of about 14,000 tons a day, or some accommodate 10,000 kilowatts of capacity, and will twenty times that obtainable from the present meth- be designed for a future expansion of up to 30,000 ods. The loan will also help to finance new storage kilowatts. The loan will also finance further engineer- facilities, new maintenance shops, improved accom- ing and survey work on a proposed hydroelectric modation for passengers, and the purchase of two installation on the Rio Lindo in northern Honduras. diesel tugs and a cutter suction dredge. PARTICIPATION - Bank of America and The National PARTICIPATION * The Royal Bank of Canada, New Bank of Washington, D. C., are participating in the York Agency, and The Philadelphia National Bank, loan for a total of $123,000. are participating in the loan for a total amount OTHER ACTIVITIES of $395,000. The Bank maintained a resident representative in OTHER ACTIVITIES Honduras during the year. The Bank continued to station a two-man resident mission in Peru during the year. PARAGUAY The Agricultural Survey Mission, sponsored jointly by the Bank and the Food and Agricultural Organ- At the request of the Government, the Bank has ization of the United Nations, will submit its report agreed to arrange for the services of technicians to to the Govemment in the near future. advise on policies affecting the marketing of meat and At the request of the Government, a mission went on the reorganization of state agricultural agencies. to Peru in March to advise on the reorganization of A Bank consultant went to Paraguay in December two publicly owned development agencies, the 1958 to study the possibility of establishing an indus- Industrial Bank of Peru and the Santa Corporation. trial financing institution there. URUGUAY PERU Consulting engineers visited Uruguay from Novem- PORT DEVELOPMENT LOAN ber 1958 to February 1959 to study the condition $6.575 million 20-year 53/4% loan of September 17, 1958 of the railroads and to prepare a comprehensive pro- BORROWER - Port of Callao Authority gram for their reorganization and improvement. The loan will assist in financing the further expan- The consultants' report, the cost of which was shared sion and improvement of Callao, the main port of between the Uruguayan State Railways and the Bank, Peru. Callao serves the mining and agricultural areas will be given to the Government in July. of the Central Sierra as well as Lima, the chief com- mercial and industrial center. About 60% of the coun- try's export and import trade passes through the port. The Port Authority was established in 1952 shortly The Government has requested the Bank to organize a after the Bank had made a previous loan of $2.5 mission which would survey key sectors of the econ- million for the construction of grain discharging and omy and provide the basis for preparing an invest- storage facilities and the purchase of mechanical ment program; the mission is expected to arrive in cargo-handling equipment. The expansion now being Venezuela in September. .32- appendices FINANCIAL STATEMENTS A Balance Sheet . . . . . . . . . . . . . . . . . 34 B Statement of Income and Expenses . . . . . . . . . . . 36 C Currencies Held by the Bank . . . . . . . . . . . . . 37 D Subscriptions to Capital Stock and Voting Power . . . . . . . 38 E Summary Statement of Loans . . . . . . . . . . . . 39 F Funded Debt of the Bank . . . . . . . . . . . . . . 40 G Notes to Financial Statements . . . . . . . . . . . . 42 OPINION OF INDEPENDENT AUDITOR . . . . . . . . . . . . . 44 OTHER APPENDICES H Administrative Budget. . . . . . . . . . . . . . . 45 I Governors and Alternates . . . . . . . . . . . . . . 46 J Executive Directors and Alternates . . . . . . . . . . . 47 K Statement of Loans . . . . . . . . . . . . . . . 48 L Principal Officers of the Bank . . . . . . . . . . . . . 56 .33. APPENDIX A EXPRESSED IN UNITED STATES CURRENCY Due from Banks and Other Depositories (See Appendix C) Member currencies, including $13,505,056 United States dollars Unrestricted . . . . . . . . . . . . . . $ 13,748,202 Subject to restrictions-NOTE B . . . . . . . . 142,879,555 $156,627,757 Non-member currency (Swiss francs) . . . . . . . 1,428,777 S 158,056,534 Investments Government obligations (at cost or amortized cost) United States (Face amount $623,904,000). $621,837,838 Canada (Face amount Can$17,300,000) . . . . . . 15,635,770 United Kingdom (Face amount 590,000) .1,639,770 Germany (Face amount DM131,000,000) .31,132,354 $670,245,732 Time deposits maturing within six months, including $200,000,000 United States dollars . . . . . . . 214,151,367 Accrued interest . . . . . . . . . . . . . 5,832,255 890,229,354 Receivable on Account of Subscribed Capital (See Appendix D) Receivable in United States currency Calls on subscription to capital stock . . . . . . . $ 2,500,000 Receivable in other member currencies-NOTE B Non-negotiable, non-interest-bearing, demand notes . $449,602,397 Amounts required to maintain value of currency holdings 9,195,742 458,798,139 461,298,139 Effective Loans Held by Bank (See Appendix E)-NOTE C (Including undisbursed balance of $831,365,030) . . . . 3,386,879,805 Accrued Interest, Commitment and Service Charges on Loans-NOTE C . . . . . . . . . . . . . 28,006,408 Receivable from Purchasers on Account of Effective Loans Agreed to be Sold (Including undisbursed balance of $7,944,615) 14,487,505 Unamortized Bond Issuance Costs . . . . . . . . . 16,698,205 Land and Buildings . . . . . . . . . . . . . $ 7,980,301 Less reserve for depreciation . . . . . . . . . . 225,430 7,754,871 Other Assets-NOTE D . . . . . . . . . . . . 2,159,574 Special Reserve Fund Assets-NoTE E Due from Banks-member currency-United States . . . $ 197 Investment securities-United States Government obligations ($131,175,000 face amount; at cost or amortized cost) . . 130,942,217 Accrued loan commissions-NOTE C . . . . . . . . 6,950,204 137,892,618 Staff Retirement Plan Assets (Segregated and held in trust) . . . . . . . . . . 8,137,444 Total Assets . . . . . . . . . . . . $5,111,600,457 34. APPENDIX A r 6 -2 f , '; -, .*>,_ S . See Notes to Financial Statements, Appendix G A 3 I L S'E S RE S R VS D C P 7 T A T Liabilities Accrued interest on borrowings . . . . . . . . . . . . . . $ 22,152,242 Accounts payable and other liabilities . . . . . . . . . . . . 5,575,529 Undisbursed balance of effective loans (See Appendix E) Held by Bank . . . . . . . . . . . . . . . . . . $ 831,365,030 Agreed to be sold . . . . . . . . . . . . . . . . . 7,944,615 839,309,645 Funded debt (See Appendix F) (Of this amount $168,425,027 is due within one year) . . . . . . . 1,905,155,641 Reserves for Losses Special reserve-NOTE E . . . . . . . . . . . . . . . . $ 137,892,618 Supplemental reserve against losses on loans and guarantees-NOTE F . . . 282,077,338 419,969,956 Staff Retirement Plan Reserve . . . . . . . . . . . . . . . 8,137,444 Capital Capital stock (See Appendix D)-NOTE G Authorized 100,000 shares of $100,000 par value each Subscribed 95,565 shares . . . . . . . . . . . . . . . $9,556,500,000 Less-Uncalled portion of subscriptions-NOTE H . . . . . . . 7,645,200,000 1,911,300,000 Contingent Liability-LOANS SOLD UNDER GUARANTEE-NOTE I . . $19,695,000 Total Liabilities, Reserves and Capital . . . . . . . . . . $5,111,600,457 .35- APPENDIX B Comparative Statement of hincome and Expenses FOR TH4E FISCAL YEARS ENDED JUNE 30, 1958 AND JUNE 30, 1959 EXPRESSED IN UNITED STATES CURRENCY-See Notes to Financial Statements, Appenidix G July J-Juine 30 1957-1958 1958-1959 Income Income from investments. ............... $ 21,047,408 $ 25,782,570 Income from loans: Interest. .................... 71,471,126 88,743,821 Commitment charges. ................ 5,162,573 6,497,141 Commissions. .................. 20,160,705 23,999,259 Service charges. .................158,739 114,479 Other income. .........817,033 1,036,619 Gross Income. ................ $118,817,584 $146,173,889 Deduct-Amount equivalent to commissions appropriated to Special Reserve-NoTE E ..... ..... 20,160,705 23,999,259 Gross Income Less Reserve Deduction. ......... $ 98,656,879 $122,174,630 Expenses Administrative expenses: Personal services. ................. $ 4,646,905 $ 5,448,694 Contributions to staff benefits ........ ......544,993 630,605 Fees and compensation ......... .......454,264 632,016 Representation .......... ........92,886 86,484 Travel ........... .......... 1,203,402 1,677,972 Supplies and material ......... ........80,468 79,313 Office occupancy .......... ........ 679,391 552,740 Comnmunication services ......... .......202,385 275,356 Furniture and equipment ........ .......120,637 122,134 Books and library services ........ .......88,620 101,091 Printing .......... ..........79,982 90,850 Insurance ........... .........46,947 28,241 Other expenses .......... ........18,503 25,857 Total Administrative Expenses. ........... $ 8,259,383 $ 9,751,353 Interest on borrowings. ................ 47,311,896 64,583,491 Bond issuance and other financial expenses. ..........1,005,832 1,368,246 Gross Expenses. ............... $ 56,577,111 $ 75,703,090 Net Income-Appropriated to Supplemental Reserve Against Losses on Loans and GuaranteeS-NOTE F. ................ $ 42,079,768 $ 46,471,540 36. 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APPENDIX F Funded Debt of the Bank JUNE 30, 1959 EXPRESSED IN UNITED STATES CURRENCY-See Notes to Financial Statements, Appendix G Principal A,,nual siniking Payable in Issue and maturity outstanding fund requirelmentl United States Dollars 31/4%u Notes of 1958, due 1959. . . . . . . . . . $ 3,000,000 None* 41/4% Notes of 1957, due 1959-60 . . . . . . . . . . 60,000,000 None* 2% Serial Bonds of 1950, due 1960-62 . . . . . . . . . . 30,000,000 None* 21/2%% Five Year Bonds of 1954, due 1959 . . . . . . . . . 50,000,000 None 21/2% Notes of 1958, due 1960-61 . . . . . . . . . . . 50,000,000 None* 43/8% Notes of 1957, due 1960-61 . . . . . . . 50,000,000 None* 21/2% Notes of 1958, due 1960 . . . . . . . . . . . 15,000,000 None* 31/40% Two Year Bonds of 1958, due 1960 . . . . 75,000,000 None* 21/2% Notes of 1958, due 1961 . . . . . . . . . . . 40,000,000 None* 4/2% Two Year Notes of 1959, due 1961 . . . . . . . . . 5,000,000 None* 41/2% Three Year Notes of 1959, due 1962 . . . . . . . . 25,000,000 None* 37/ )% Note of 1959, due 1962 . . . . . . . . . . . . 58,000,000 None* 33/4% Ten Year Bonds of 1958, due 1968 . . . . . . . . 150,000,000 None* 31/2% Fifteen Year Bonds of 1954, due 1969 . . . . . . . . 87,130,000 1960 $3,130,000 1961-66 $4,000,000 1967-68 $5,000,000 31/2% Nineteen Year Bonds of 1952, due 1971 . . . . . . . 54,177,000 1959 S 177,000 1960-66 $2,000,000 1967-70 S2,500,000 3% Twenty-Five Year Bonds of 1947, due 1972 . . . . . . . 143,626,000 1960 $2,626,000 1961-62 $3,000,000 1963-67 $4,500,000 1968-72 $7,500,000 41/2% Fifteen Year Bonds of 1958, due 19732. . . 95,700,000 1964-73 $5,000,000 33/s% Twenty-Three Year Bonds of 1952, due 1975 . . . . . . 47,032,000 1960 $1,032,000 1961-74 $1,500,000 3% Twenty-Five Year Bonds of 1951, due 1976 . . . . . . . 50,000,000 1963 $1,000,000 1964-75 $2,000,000 41/z% Twenty Year Bonds of 1957, due 1977 2,3 . . . . . . . 88,752,000 1967-76 $5,000,000 41/4% Twenty-One Year Bonds of 1957, due 19782 . . . . . . 96,688.000 1967-71 $4,000,000 1972-77 $5,000,000 41/4% Twenty-One Year Bonds of 1958, due 19792 . . . . . 148,500,000 1968-77 $7,000,000 1978 $5,000,000 43A4% Twenty-Three Year Bonds of 1957, due 1980 2/3 . . . . . 68,634,000 1968-79 $3,000,000 1980 $1,500,000 31/4% Thirty Year Bonds of 1951, due 1981 . . . . . . . . 100,000,000 1966-67 $2,000,000 1968-73 $3,000,000 1974-80 $4,000,000 Sub-Total . . . . . . . . . . . . . . . . . $1,591,239,000 Belgian Francs 5% Ten Year Bonds of 1959, due 1969 (Bfr500,000,000) . . . . . $ 10,000,000 None Sub-Total . .. . . . . . 10,000,000 Canadian Dollars 31/4% Ten Year Bonds of 1955, due 1965 (Can$13,942,000) . . . . $ 12,674,545 1960 Can$442,000 1961-64 Can$500,000 31/2% Fifteen Year Bonds of 1954, due 1969 (Can$24,102,000) . . . 21,910,910 1960 Can$702,000 1961-65 Can$800,000 1966-68 Can$900,000 Sub-Total .$. . . .. . . . 34,585,455 40 APPENDIX F Funded Debt of the Bank (continuved) JUNE 30, 1959 EXPRESSED IN UNITED STATES CURRENCY-See Notes to Financial Statements, Appendix G Principal Anntual sinking Payablc in Issue and maturity outstanding fund requirementl Deutsche Marks 3%, Note of 1958, due 1961 (DM146,124,404) . . . . . . . $ 34,791,5244 None* 5% Bonds of 1959, due 1965-74 (DM200,000,000) . . . . . . 47,619,048 None Sub-Total . . . . . . . . . . . . . . . . . $ 82,410,572 Netherlands Guilders 3/2% Fifteen Year Bonds of 1954, due 1969 (f40,000,000) . . . . $ 10,526,316 1960-69 f4,000,000 31/2%o Twenty Year Bonds of 1955, due 1975 (f40,000,000) . . . . 10,526,316 1961-74 f2,640,000 1975 f3,040,000 Sub-Total . .S. . ............. $ 21,052,632 Pounds Sterling 31/2% Twenty Year Stock of 1951, due 1971 (4,375,688) . . . . $ 12,251,926 1960 149,850 1961-71 166,700 31/2%7 Twenty Year Stock of 1954. due 1974 (5,000,000) . . . . 14,000,000 1960-74 il66,700 Sub-Total ..... . . . .... $ 26,251,926 Swiss Francs 33/8% Swiss Franc Loan of 1957, due 1960-65 (Sw fr 200,000,000) . . $ 46,538,685 None 31/27, Ten Year Bonds of 1952, due 1962 (Sw fr 50,000,000) . . . 11,634,673 None 31/2% Twelve Year Bonds of 1951, due 1963 (Sw fr 50,000,000) . . . 11,634,671 None 31/2% Fifteen Year Bonds of 1953, due 1968 (Sw fr 50,000,000) . . . 11,634,671 None 31/2 % Fifteen Year Bonds of 1953 (Nov. Issue), due 1968 (Sw fr 50,000,000) 11,634,671 None 31/2% Eighteen Year Bonds of 1954. due 1972 (Sw fr 50,000,000) . . 11,634,671 None 4%c7 Fifteen Year Bonds of 1959, due 1974 (Sw fr 100,000,000) . . . 23,269,343 None 31/2% Twenty Year Bonds of 1955, due 1976 (Sw fr 50,000,000) . 11,634,671 1965-74 Sw fr 4,000,000 1975-76 Sw fr 5,000,000 Sub-Total . . . . . . . . . . . . . . . . . 5 139,616,056 Gross Total . . . . . . . . . . . . . . . . $1,905,155,6415 1 Each issue, except those indicated with an asterisk, is subject to redemption prior to maturity at the option of the Bank at the prices and upon the condi- Date of tions stated in the respective bonds. The amounts shown as annuat sinking Issue Amount final delivert fund requirements are the principal amounts of bonds to be purchased or redeemed to meet each year's requirement, except that in the cases of the 4X/2% 15 Year Bonds of 1958, due 1973 $4.300,000 Dec. ], 1960 3'A % Twenty Year Stock of 1951 and of 1954 the amount shown is the amount 4V 5% 20 Year Bonds of 1957, due 1977 $5,500,000 Oct. I, 1 959 of funds to be provided annually for purchase or redemption. The amounts 4/4 % 21 Year Bonds of 1957. due 1978 $3,312,000 Feb. 1, 1960 are shown after deduction of sinking fund requirements met as of the date of 41/4 % 2t Year Bonds of 1958, due 1979 $1,500000 Apr. 15, 1960 this statement. 4/4 % 23 Year Bonds of 1957, due 1980 $4,500,000 Nov. 1, 1960 The following table shows the aggregate principal amnount of the maturities, 3 In the cases of the 416% Twenty Year Bonds of 1957 and the 43/4% sinking fund and redemption requirements each year for the five years follow- Twenty-Three Year Bonds of 1957 the Bank will, as purchase funds, use its best ing the date of this statement: efforts to purchase bonds of these issues in the open market or by acceptance of tenders at prices up to and including 100% of the principal amount plus accrued interest. After all bonds of these issues, including those sold for Year Ending June 30 Am11ount delayed delivery. have been issued, and proportionately less before then, the purchase funds will be at the annual rate of $5,000.000 throughb 966 in the case of the 41/2o Twenty Year Bonds of 1957 and at the annual rate of $3,750,000 1960 . . . . . . . . . . . . . . . . . $168,425,027 through 1967 in the case of the 43/4% Twenty-Three Year Bonds of 1957. The 1961 . . . . . . . . . . . . . . . . 190.180.417 purchase funds are cumulative on a month-to-month basis only within each 1962 . . . . . . . . . . . . . . . . . 202,738,154 calendar year. 1963 . . . . . . . . . . . . . . . . . 34.753,825 4 This is the U.S. equivalent of amounts drawn to date. The full amount 1964 . . . . . . . . . . . . . . . . . 42,253,825 of this issue is DM200.000,000 (U.S. equivalent $47,619,048). Under the -- agreement the amount can be drawn down from time to time as the Bank Total. . . . . . . . . . . . . $638,351,248 needs funds for its operations. Interest is payable only from the date funds are drawn down. Prior thereto a commitment charge of 1/4% is payable on the undrawn balance. 2 The Bank has entered into agreements to sell additional bonds of the 5 The Bank has arranged to borrow, by private placement and issuance of following issues and delivery of these bonds will be made and payment tlierefor 41/2% Two Year Notes. US$2.5 million and DM10 million for settlement in will be received by the Bank in the aggregate amounts and at various dates to October 1959. Furthermore, a Note of US$30 million, maturing in July 1959 and including the dates shown hereafter: will be replaced by a Three Year Note bearing interest at 41/2% per annum. *41- APPENDIX G Notes to Financial Statements JUNE 30, 1959 N o TE A holdings of its 18%/6 currency, including the principal Amounts in currencies other than United States dollars amount of any notes substituted therefor, and the Bank have been translated into United States dollars: is required, if the par value of a member's currency is (i) In the cases of 50 members, at the par values as increased, to return to the member the increase in the specified in the "Schedule of Par Values", published by value of such 18% currency held by the Bank. To the the International Monetary Fund, except for Paraguay extent such currencies are out on loan, the Bank and the where a rate of 110 guaranies to i United States dollar members are obligated to make such payments only when is used; such currencies are recovered by the Bank. The equivalent (ii) In the cases of the remaining 18 members (Afghan- of $9,195,742 is due from 3 members in order to maintain istan, Bolivia, Canada, China, Greece, Indonesia, Italy, the value of their currencies as required under Article II, Korea, Libya, Malaya, Morocco, Peru, Saudi Arabia, Section 9. Spain, Thailand, Tunisia, Uruguay and Viet-Nam), the Some members have converted part or all of the Bank's par values of whose currencies are not so specified, at holdings of their 18% currency into United States dollars the rates used by such members in making payments of to be used and reused as United States dollars in the Bank's capital subscriptions to the Bank; and operations, subject to the right of the Bank or the member (iii) In the case of Swiss francs, a non-member to reverse the transactions at any time, with immediate currency, at the rate of 4.2975 francs to 1 United States effect as to dollars then held by the Bank, and, as to dollars dollar. loaned, upon repayment of the loans. Such dollars while held by the Bank or on loan are not subject to the provi- No representation is made that any of such currencies is sions of Article II, Section 9. Such dollars held by the Bank convertible into any other of such currencies at any rate or repayable on loans are shown in these financial state- or rates. See also Note B. ments under "United States dollars" and, where relevant, as "unrestricted". NOTE B These currencies of the several members, and the notes N o T E C issued by them in substitution for any part of such cur- The principal disbursed and outstanding on loans and the rencies as permitted under the provisions of Article V, accrued charges for interest, commitment fee, service Section 12, are derived from the 18%o of the subscriptions charge and loan commission are receivable in United to the capital stock of the Bank which is payable in the States dollars except the following amounts for which the currencies of the respective members. Such 18% may be dollar equivalent is shown: loaned by the Bank, and funds received by the Bank on Principal Outstanding . . . . . . $846,959,657 account of principal of loans made by the Bank out of Accrued Interest, Commitment and such currencies may be exchanged for other currencies or Service Charges . . . . . . . 9,036,356 reloaned, only with the approval in each case of the Accrued Loan Commissions . . . . 2,228,608 member whose 18%o currency is involved; provided, how- ever, that, if necessary, after the Bank's subscribed capital Total . . . . . . . . $858,224,621 is entirely called, such currencies may, without restriction by the members whose currencies are offered, be used or The dollar equivalent shown as principal outstanding exchanged for the currencies required to meet contractual includes amounts which in accordance with Article II, payments of interest, other charges or amortization on the Section 9 will be payable by members to maintain the Bank's own borrowings or to meet the Bank's liabilities value of their currencies when such currencies are recovered with respect to contractual payments on loans guaranteed by the Bank. by it. Under Article II, Section 9, each member is required, if NoTE D the par value of its currency is reduced or if the foreign Because of a change in the provisions of the Staff Retire- exchange value of its currency depreciates to a significant ment Plan, the Bank is obligated to make a payment to extent in its territories, to maintain the value of the Bank's the Plan on account of service prior to April 1, 1959. The -*42 - APPENDIX G Notes to Financial Statements (continued) JUNE 30, 1959 actual cost of such prior service benefits has not yet been following table sets forth the maturities of the guaranteed determined but is estimated to be between $1,200,000 and obligations outstanding: $2,000,000 of which the Bank has made an advance _ payment of $1,200,000. The Bank will amortize such costs Period Amouint over a ten-year period commencing July 1, 1959. July 1, 1959 to June 30, 1960 . . . . . $ 500,000 N O T E B July 1, 1960 to June 30, 1961 . . . . . 7,285,000 The amount of commissions received by the Bank on July 1, 1961 to June 30, 1962 . . . . . 4,715,000 loans made or guaranteed by it is required under Article July 1, 1962 to June 30, 1963 . . . . . 1,000,000 IV, Section 6, to be set aside as a special reserve to be July 1, 1963 to June 30, 1964 . . . . . 1,000,000 kept available for meeting obligations of the Bank created Thereafter . . . . . . . . . . 5,195,000 by borrowing or by guaranteeing loans. On all loans grant- ed to date the effective rate of commission is 1 % per annum. Total . . . . . . . . $19,695,000 NOTE F Pursuant to action of the Board of Governors and Exec- G E N E R A L utive Directors the net income of the Bank has been On December 22, 1958 the Executive Directors recoi- allocated to a Supplemental Reserve Against Losses on mended to the Board of Governors that the Bank's Loans and Guarantees Made by the Bank; and the future authorized capital be increased from $10,000,000,000 to net income of the Bank will, until further action by $21,000,000,000 and that members be authorized to double Executive Directors or the Board of Governors, their capital subscriptions. This increase, however,will only allocated to this reserve. This reserve has been charg become effective upon the fulfillment of a number of with $775,352 representing the loss taken by the Bank as a conditions, including the subscription by member coun- result of the revaluation of the French franc in December cniin,icuigtesbcito ymme on 1958r on French francs it had acquired from earnings tries of at least $7,000,000,000 of the increased capital by September 15, 1959, or by such later date as the Executive N o T E G Directors may determine. Under the Articles 80% of such In terms of United States dollars of the weight and fineness subscriptions may be called only when required to meet in effect on July 1, 1944. the obligations of the Bank created by borrowing or guaranteeing loans. The Executive Directors have recom- N o T E H mended to the Board of Governors that they decide that Subject to call by the Bank only when required to meet the 200%c, which under the Articles may be called as needed the obligations of the Bank created by borrowing or by the Bank for its operations, shall not be called except guaranteeing loans. when required to meet the obligations of the Bank created by borrowing or guaranteeing loans. The Executive N o T E I Directors have also recommended that a number of The Bank has sold under its guarantee $69,003,844 of members be authorized to subscribe to additional capital loans of which amount $49,308,844 has been retired. The over and above the doubling of their present subscriptions. .43. Opinlion of Independent Auditor 1000 VERMONT AVENUE, N. W. WASHINGTON 5, D. C. August 7, 1959 To INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT WASHINGTON, D. C. In our opinion, the accompanying financial statements present fairly, in terms of United States currency, the financial position of International Bank for Reconstruction and Development at June 30, 1959, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Our examination of these statements was made in accordance with generally accepted auditing standards, and accordingly included such tests of the account- ing records and such other auditing procedures as we considered necessary. PRICE WATERHOUSE & Co. FINANCIAL STATEMENTS COVERED BY THE FOREGOING OPINION Appendix Balance Sheet . . . . . . . . . . . . . . . . A Comparative Statement of Income and Expenses . . . . . . a Statement of Currencies Held by the Bank . . . . . . . C Statement of Subscriptions to Capital Stock and Voting Power . . D Summary Statement of Loans . . . . . . . . . . . E Funded Debt of the Bank . . . . . . . . . . . . F Notes to Financial Statements . . . . . . . . . . . G .44- APPENDIX H Administrative Budget FOR THE FISCAL YEAR ENDING JUNE 30, 1960 There is outlined below the Administrative Budget for the fiscal year ending June 30, 1960, as prepared by the President and approved by the Executive Directors in accordance with Section 19 of the By-Laws. For purposes of comparison, there are also outlined below the administrative expenses incurred during the fiscal years ended June 30, 1958, and 1959. Actuial Expenses Butdget 1958 1959 1960 BOARD OF GOVERNORS . . . . . . $ 208,714 $ 443,282 $ 234,000 EXECUTIVE DIRECTORS . . . . . . 497,144 607,168 552,000 STAFF Personal Services . . . . . . $4,022,347 $4,692,228 $4,969,500 Staff Benefits . . . . . . . . 463,064 555,344 676,500 Travel . . . . . . . . .. 846,471 950,307 980,000 Consultants . .156,127 149,780 225,000 Representation . .65,538 5,553,547 72,248 6,419,907 70,000 6,921,000 OTHER ADMINISTRATIVE EXPENSES Fees & Compensation . . . . . 76,309 117,549 114,500 Supplies & Materials . . . . . 75,113 74,524 80,000 Office Occupancy . . . . . . 667,905 523,953 457,000 Communications . .196,815 262,689 277,000 Furniture & Equipment . . . . 115,903 115,115 140,000 Printing . .76,575 87,009 93,000 Books and Library Service . . . . 87,025 99,410 114,000 Insurance . .... . 46,483 25,585 34,500 Other ..18,503 1,360,631 25,857 1,331,691 25,000 1,335,000 CONTINGENCY . . . . . . . . - - 100,000 Total .$7,620,036 $8,802,048 59,142,000 SERVICES TO MEMBER COUNTRIES General Survey Missions . . . . 103,938 199,831 255,000 Resident Representatives . . . . 132,684 116,596 32,000 Economic Development Institute . . 106,667 250,657 282,500 Training Programs . . . . . . 44,865 51,088 65,000 Indus Basin Discussions . . . . 119,086 177,448 200,000 Other Advisory Services . . . . 132,107 153,685 30,000 Total 639,347 949,305 864,500 Grand Total $8,259,383 $9,751,353 $10,006,500 .45. APPENDIX I Governors and Alternates JUNE 30, 1959 Member Government Governor Alternate Afghanistan . . . . . . . . . . . . Abdullah Malikyar Abdul Hai Aziz Argentina .Jose Mazar Barnett Cesar Barros Hurtado Australia .Harold E. Holt J. F. Nimmo Austria . . . . . . . . . . . . . Reinhard Kamitz Wilhelm Teufenstein Belgium. . J. van Houtte Jean Van Nieuwenhuyse Bolivia. . Miguel Gisbert N. Fernando Pou Munt Brazil . . . I . . . . . . . . . Lucas Lopes Roberto de Oliveira Campos Burma. . . . . . . . . . . . U Kyaw Nyein U Kyaw Nyun Canada. . . . . . . . . . . . Donald M. Fleming A. F. W. Plumptre Ceylon . . . . . . . . . . . . . Stanley de Zoysa Rajendra Coomaraswamy Chile . . . . . . . . . . . . . . Felipe Herrera Lane Alvaro Orrego Barros China . . . . . . . . . . . . . Chia-Kan Yen Tse-kai Chang Colombia . . . . . . . . . . . . Ignacio Copete-Lizarralde Jorge Cortes-Boshell Costa Rica . . . . . . . . . . . . Alvaro Castro Alvaro Vargas Cuba . . . . . . . . . . . . Justo Carrillo Hernandez Joaquin E. Meyer Denmark . . . . . . . . . . . . Svend Nielsen Hakon Jespersen Dominican Republic . . . . . . . . . Virgilio Alvarez Sanchez Oscar G. Ginebra Hlenriquez Ecuador . . . . . . . . . . . . . Federico Intriago Jose R. Chiriboga V. El Salvador . . . . . . . . . . . Carlos J. Canessa Luis Escalante-Arce Ethiopia . . . . . . . . . . . . . Menasse Lemma George Peters Rea Finland . . . . . . . . . . . . R. v. Fieandt Reino Rossi France. . . . . . . . . . . . Minister of Finance Pierre Paul Schweitzer Germany . . . . . . . . . Ludwig Erhard Franz Etzel Ghana . . . . . . . . . . . . . K. A. Gbedemah A. Eggleston Greece . . . . . . . . . . . . . Gregory Cassimatis loannis Paraskevopoulos Guatemala .Manuel A. Bendfeldt Jauregui Max Jimenez Pinto Haiti . Andre Theard Maurice Telemaque Honduras . . . . . . . . . . . . Celco Davila Jorge Bueso-Arias Iceland .Petur Benediktsson Vilhjalmur Thor India. . Morarji R. Desai B. K. Nehru Indonesia. . . . . . . . . . Soetikno Slamet Iran. . . . . . . . . . . . Ali Asghar Nasser Djalaledin Aghili Iraq . Mohammed Hadid Mudhafar H. Jamil Ireland .Seamas 0 Riain T. K. Whitaker Israel .. I . . . . . . . . . . David Horowitz Jacob Arnon Italy. . . . . . . . . Donato Menichella Giorgio Cigliana-Piazza Japan. . . . . . Eisaku Sato Masamichi Yamagiwa Jordan . . . . . . . . . . . . . Hashem Jayousi Hazem Nuseibeh Korea. . . . . . . . . . . . Chin Hyung Kim Chong Sik Park Lebanon . . . . . . . . . . . Andre Tueni Raja Himadeh Libya . . . . . . . . . . . . . A. N. Aneizi Luxembourg .Pierre Werner Rene Franck Malaya . . Sir Henry H. S. Lee Ismail bin Dato' Abdul Rahman Mexico . . . . . . . . . . . . . Antonio Ortiz Mena Jose Hernandez Delgado Morocco. . . . Abderrahim Bouabid Mohamed Tahri Netherlands. . . . J. Zijistra S. Posthuma NicaragLa .Guillermo Sevilla-Sacasa Enrique Delgado Norway . Arne Skaug Gabriel Kielland2 Pakistan . . . . . . . . . . . . . Mohamed Shoaib M. A. Mozaffar Panama . . . . . . . . . . . . . Ricardo M. Arias Espinosa Julio E. Heurtematte Paraguay . . . . . . . . . . . . Cesar Romeo Acosta Federico Mandelburger Peru . . . . . . . . . . . . . . Fernando Berckemeyer Emilio Foley Philippines . . . . . . . . . . . . Miguel Cuaderno Sr. Eduardo Z. Romualdez Saudi Arabia. . . . . . . . Ahmed Zaki Saad Saleh Al-Shalfan Spain. . . . . . . . . . Mariano Navarro Rubio Juan Antonio Ortiz Garcia Sudan . . . . . . . . . . . . . Abdel Magid Ahmed Hamzah Mirghani Hamzah Sweden . . . . . . . . . . . . . G. E. Straeng N. G. Lange Thailand . . . . . . . . . . . . Sunthorn Hongladarom Boonma Wongswan Tunisia. . . . . . Hedi Nouira Mongi Slim Turkey. . . . . . Hasan Polatkan Sait Naci Ergin Union of South Africa . . . . . . . . T. E. Donges M. H. de Kock United Arab Republic . . . . . . . . . Husni A. Sawwaf Izzat Traboulsi United Kingdom . . . . . . . . . . Derick Heathcoat Amory Sir Denis Rickett United States . . . . . . . . . . . Robert B. Anderson C. Douglas Dillon Uruguay. . . . . . . . . . . Nilo Berchesi Roberto Ferber Venezuela . . . . . . . . . . Rafael Alfonzo Ravard Miguel Herrera Romero Viet-Nam . . . . . . . . . . . . Tran Huu Phuong Vu Quoc Thuc Yugoslavia . . . . . . . . . . . . Vladimir Velebit 3 Isak Sion 3 1 Appointed as of July 2, 1959; 2 Appointed as of July 1, 1959; 3 Appointed as of July 17, 1959. *46 - APPENDIX J Executive Directors and Alternates and their Voting Power JUNE 30, 1959 Directors Alternates Casting the Total APPOINTED votes of votes T. Graydon Upton John S. Hooker United States 32,000 The Earl of Cromer Geoffrey M. Wilson United Kingdom 13,250 Kan Lee China 6,250 Rene Larre Jean Cottier France 5,500 B. K. Nehru C. S. Krishna Moorthi India 4,250 ELECTED Mohamed Shoaib Ali Akbar Khosropur Pakistan, United Arab Republic, Iran, Afghanistan, Saudi 4,899 (Pakistan) (Iran) Arabia, Sudan, Iraq, Lebanon, Ethiopia, Jordan Thomas Basyn Belgium, Austria, Turkey, Korea, Luxembourg 4,655 (Belgium) Louis Rasminsky C. L. Read Canada, Ireland 4,050 (Canada) (Canada) P. Lieftinck Nikola Miljanic Netherlands, Yugoslavia, Israel 3,975 (Netherlands) (Yugoslavia) Takeshi Watanabe D. C. Gunesekera Japan, Burma, Ceylon, Thailand 3,925 (Japan) (Ceylon) Luis Machado Jorge A. Montealegre Mexico, Cuba, Peru, Venezuela, El Salvador, Honduras, 3,912 (Cuba) (Nicaraguia) Nicaragua, Costa Rica, Guatemala, Panama B. B. Callaghan A. J. J. van Vuuren Australia, Union of South Africa, Viet-Nam 3,875 (Auistralia) (Union of Souith Africa) T. L. Hammarskiold H. E. Thrane Sweden, Denmark, Norway, Finland, Iceland 3,820 (Sweden) (Denmark) Jose Aragones Carlo Gragnani Italy, Spain, Greece 3,800 (Spain) (Italv) Jorge Mejia-Palacio Jose Camacho Brazil, Colombia, Philippines, Haiti, Ecuador, Dominican 3,679 (Colombia) (Colombia) Republic Otto Donner H. Gorn Germany 3,550 (Germany) (Germany) Ismail bin Mohamed Ali Omar Saadi Elmandjra* Indonesia, Morocco, Malaya, Ghana, Tunisia, Libya 3,520 (Malaya) (Morocco) Carlos S. Brignone L. Vartalitis Argentina, Chile, Uruguay, Bolivia, Paraguay 3,305 (Argentina) (Argentina) * Appointed as of July 27, 1959. Execiutive Directors Entd of Period of Service Tom B. Coughran (United States) December 15, 1958 Guy F. Thorold (United Kingdom) February 1, 1959 In addition to the Executive Directors and Alternates shown in the Alternate Execuitive Directors End of Period of Service foregoing list, the following also served as Executive Director or Max Thurn (Austria) June 16, 1959 Alternate after November 1, 1958, the effective date of the Seventh Alan B. Hockin (Canada) April 30, 1959 Regular Election: Eduardo Carrizosa (Colombia) January 31, 1959 .47. APPENDIX K Statement of Loans--June 30, 1959 EXPRESSED IN UNITED STATES DOLLARS (For Sunmnary Statemtent-See Appendix E) Initerest Efibrifive loans sold Effective Date of (nrate Original Principal or agreed to be sold' loans Principal loan (icludiing principal repaymnents - --h,ld by a,e,unt Purpote, borrowver aind guarantor' agreemie,st Matuirities contnission) canount Catitellat ionzs to Book Total sales Portionl moltord onk disbursed AUSTRALIA Equipment for Development. .....Aug. 22, 1950 1955-1975 41/4% $ 100,000,000 $ - ~ $ 308,972 $ 22,968,028 $13,079,028 5 76,723,000 $ 100,000,000 Equipment for Development. .....July 8, 1952 1957-1972 43/4% 50,000,000 - 1,000 11,070,027 5,561,000 38,928,973 50,000,000 Equipment for Development. .....Mar. 2, 1954 1957-1969 43/4 'l 54,000,000 - 24,000 14,908,000 8,401,000 39,068,000 54,000,000 Equipment for Development. .....Mar. 18, 1955 1958-1970 4 y/8% 54,500,000 --- 11,000,000 5,021,000 43,500,000 54,500,000 Airlines. ...........Nov. 15, 1956 1964-1966 434% 9,230,000 - -- - 9,230,000 9,230,000 Equipment for Development. .....Dec. 3, 1956 1959-1972 43/4% 50,000,000 - -3,662,000 -46,338,000 50,000,000 TOTAL 317,730,000 -333,972 63,608,055 32,062,028 253,787,973 317,730,000 AUSTRIA (guarantor) Power-V/erhundgesellsehaft, Draukrafrwerke . July 19, 1954 1959-1979 43/4% 12,000,000 -- - - 12,000,000 12,000,000 Power- Verbundgesellschaft, Draukraftwerke .... Sept. 21, 1956 1959-1976 5% 10,000,000 - -372,809 - 9,627,191 10,000,000 Power- Vorarlberger Illwerke. .....June 14, 1955 1960- 1979 4 3/4% 10,000,000 - 1,292,095 - 8,707,905 10,000,000 Po wer- Vorarlberger Iliwerke. .....Oct. 10, 1957 1960-1979 53/4%0 3,571,429 -466,714 - 3,104,715 3,571,429 Power- Verbundgesellschafti, Donaukraftwerke .Sept. 21, 1956 1960-1981 5% 21,000,000 - 541,000 - 20,459,000 21,000,000 Power-Verbundgesellschajt, Donaukraftwerke . Dec. 2, 1958 1964-1983 53/4 o 25,000,000 - - - 25,000,000 22,089 Industry-Oesterr. lnvestitionskredil A.G. Apr. 28, 1958 1959-1975 51%7 10,765,000 1,476,346 -763,300 - 8,525,354 3,555,909 TOTAL 92,336,429 1,476,346 -3,435,918 -87,424,165 60,149,427 BELGIUM Industry & Power. ........Mar. 1, 1949 1953-1969 4/4% 16,000,000 - - 16,000,000 6,500,000 - 16,000,000 Belgian Congo Development. .....Sept. 13, 1951 1957-1976 4/2 % 30,000,000 - - 9,555,000 3,750,000 20,445,000 30,000,000 Water Transport. .........Dec. 14, 1954 1965-1969 4 Y /8% 20,000,000 - - - - 20,000,000 20,000,000 Water Transport. .........Sp.10, 1957 1963-1972 5 3/4% 10,000,000 - - 5,220,000 - 4,780,000 7,290,603 BELGIUM (giuarantor) Equipmnent for Development-Be/gian Congo .Sept. 13, 1951 1957-1976 41Y2% 40,000,000 - 7,766 10,333,109 4,992,235 29,659,125 40,000,000 Roads-Belgian Congo. .......Nov. 27, 1957 1961-1 976 6%/ 40,000,000 - - 7,065,000 - 32,935,000 25,826,777 Port & Roads-Rutanda-Urundi ......June 26, 1957 1961-1977 5 /g% 4,800,000 - -455,000 - 4,345,000 1,684,179 TOTAL 160,800,000 -7,766 48,628,109 15,242,235 112,164,125 140,801,559 1BRAZIL Railways. ...........June 27, 1952 1955-1967 4 54% 12,500,000 -3,489,000 - 9,011,000 12,160,078 Railways . ...........De.18, 1953 1959-1969 47/8% 12,500,000 ---- 12,500,000 12,500,000 BRAZIL (guarantor) Power & Communications-Brazilian Traction . Jan. 27, 1949 1953-1974 4/% 75,000,000 -6,526,750 4,028,411 4,028,411 64,444,839 75,000,000 Power-Brazilian Traction .. . ....Jan. 18, 1951 1955-1976 41/4% 15,000,000 --1,019,721 -- - 13,980,279 15,000,000 Power-Brazilian Traction .. . ....Feb. 24, 1954 1955-1 974 47/8% 18,790,000 - 4,000,000 - - 14,790,000 18,790,000 Power-Brazilian Traction .. . ....June 17, 1959 1963-1978 6% 11,600,0002 - - Note3 - - - Power-Sao Francisco Hidro Elet. Ca. .,.. May 26, 1950 1954- 1975 414% 15,000,000 - 2,546,643 - - 12,453,357 15,000,000 Power-CEARG & CE4IG ... . ....July 17, 1953 1957-1973 5% 7,300,000 - - 1,047,000 729,000 6,253,000 7,300,000 Power-Usintas Eluitricas Paranapanema . . . Dec. 18, 1953 1958-1974 5% 10,000,000 - 639,000 - - 9,361,000 9,848,124 Power-Usinas ENtricas Paratiapanema . . . Jan. 22, 1958 1962-1978 5Y8% 13,400,000 - - - 13,400,000 2,372,751 Power-Central Eltitrica de Furnas, S.A. ...Oct. 3, 1958 1964-1983 53/4% 73,000,000 - - --73,000,000 5,006,107 Cancelled-one loan, repaid-one loan ....... ....... 28,000,000 25,018,946 2,981,054 --- 2,981,054~ TOTAL 292f090,000 25,018,946 21,202,168 5,075,411 4,757,411 229,193,475 175,958,114 Statement of Loans-June 30, 1959 (continued) Itherest Effective loans sold Effectiv Date of rate Originalt Prinzcipal or agreed to be sold3 loans Prinzcipal loani (includitng prinicipal repqvtinents - _ - leldi by anlount Purpose, borrower and guarantor1 agreemient TVfoturizies rommnission) amllounit Cancellationis to Banik Totol soles Portioin motured14 Banik dlisbursed BURMA Railways. ...........May 4,1956 1959-1971 4 3/45,350,000 5 - $ - $ - S - 5,350,000 $3,055,593 BURMA (guarantor) Port-flangoon Port Co,amissionierse . May 4, 1956 1960-1976 4-3/40 14,000,000 - - 14,000,000 6,920,417 TOTAL 19,350,000 - ---19,350,000 9,976,010 CEYLON Power.July 9. 1954 1959-1979 43/4 % 19,1 10,000 1,737,750 245,250 - -17,127,000 12,867,81 6 Power. ............Sept. 17, 1958 1961-1978 5Y8% 7,400,000 - - 717,000- 6,683,000 89,064 TOTAL 26,510,000 1,737,750 245,250 717,000 -23,810,000 12,956,880 CHfILE (guarantor) Power-Fomento & Endesa. ......Mar. 25, 1948 1953-1 968 4'A2% 13,500,000 - 4,371,000 772,000 252,000 8,357,000 13,500,000 Power-Fomento & Endesa. ......Nov. 1 ,1956 1960-1976 5% 15,000,000 - - 327,000 - 14,673,000 6,672,657 Agriculture-Fomento. .......Oct. 10, 1951 1955-1961 43/8% 1,300,000 445,544 98,600 633,000 633,000 122,856 854,456 Industry-Fomento & Popeles y Car-tones... Sept. 10, 1953 1958-1970 5% 20,000,000 - 500,000 - - 19,500,000 19,663,001 Industry-Fomento & Schwager .I....July 24, 1957 1963-1972 53/4% 12,200,000 - - 100,000 - 12,100,000 2,190,198 Industry-Fomento & Lota. ......July 24, 1957 1962-1972 53/4% 9,600,000 - - 100,000 - 9,500,000 2,661,278 Repaid-one loan ........... ......... 2,500,000 - 755,000 1,745,000 1,745,000 - 2,500,000 TOTAL 74,100,000 445,544 5,724,600 3,677,000 2,630,000 64,252,856 48,041,590 COLOMBIA Roads. ............Apr. 10, 1951 1954-1961 37/8% 16,500,000 - 10,525,000 800,000 800,000 5,175,000 16,500,000 Railways. ...........Aug. 26, 1952 1957-1 978 434 25,000,000 - 1,464,000 - - 23,536,000 20,968,721 Roads. ............Sept. 10, 1953 1956--1963 43/4% 14,350,000 - 5,622,000 - -8,728,000 14,350,000 Roads. ............June 6, 1956 1959-1971 4 34 % 16,500,000 - 491,000 - - 16,009,000 11,893,162 COLOMBIA (guarantor) Agriculture-Caja de Credito .... .. . Dec. 29, 1954 1957-1961 4/% 5,000,000 - - 3,000,000 2,500,000 2,000,000 5,000,000 Power-CHIDRAL .... ... . ...Nov. 2, 1950 1954-1970 4% 3,530,000 - 746,000 148,000 148,000 2,636,000 3,530,000 Power-CHIDRAL .... ... . ...Mar. 24, 1955 1959-1975 4/4% 4,500,000 - 91,000 - - 4A409,000 4,500,000 Power-CHIDRAL .... ... . ...Dec. 15, 1958 1961-1979 53/4% 2,800,0002 - - Note3 - Power-Caldas _Hidro-Elec. Co.. . .. ..Dec. 28, 1950 1952-1971 4% 2,600,000 - 545,000 194,000 194,000 1,861,000 2,600,000 Power-Caldas Hidro-Elec. Co.. .. . ..Jan. 30, 1959 1962-1979 5 3/4% 4,600,000 - - - - 4,600,000 551,377 Power-FJidroeltictrica del Rio Lebrija... . Nov. 13, 1951 1954-1972 41/2%( 2,400,000 - 489,200 84,800 84,800 1,826,000 2,400,000 Railways- Ferrovarriles Nacionales .. .I June 15, 1955 1958-1980 4 3/4 % 15,900,000 -866,000 423,000 15,034,000 11,914,068 Power-Empresas Pdiblicas cle Medellin ... May 20, 1959 1963-1984 6% 12,000,0002 - Note3 - Repaidl-one loan ........... .........5,000,000 74,559 2,925,441 2,000,000 2,000,000 -4,925,441 TOTAL 130,680,000 74,559 22,898,641 7,092,800 6,149,800 85,814,000 99,132,769 COSTA RICA (guaaranlor) Agriculture & Industry-Banco Central... Sept. 18, 1956 1958-1963 43/4%0 3,000,000 - 124,000 366,000 366,000 2,510,000 3,000,000 Agriculture & Industry-Banco Cenitral . . . Feb. 11, 1959 1960-1965 53/4% 3,500,000 - - 1,510,000 - 1,990,000 850,280 TOTAL 6,500,000 -124,000 1,876,000 366,000 4,500,000 3,850,280 D3ENMARK Reconstruction. .........Aug. 22, 1947 1953-1972 41/4% 40,000,000 -899,000 6,243,000 3,887,000 32,858,000 40,000,000 Power. ............Feb. 4, 1959 1962-1978 53/4% 20,000,000 - - 1,551,000 - 18,449,000 2,288,151 TOTAL 60,000,000 -899,000 7,794,000 3,887,000 51,307,000 42,288,151 Statement of Loans- June 30, 1959 (continued) tflterest Effect/ac loans soldl ffJe ctire Dcote of a-ate Orifinaol Principacl or oagrea'd to be Soldj3 loants Principcal 10oot, (/cai,tll(llg priatripol repaaynaenos ____--________--- eld by ooai(tol, Purpose, bo,--o ac Io goaoaOittOr ogcea'ao't Mottor/iles cooaot/ssioaa) oamoout C,ancellations to Baook lotatl states Por-t/oat matwtard4 Boank disbaarsec! ECUADOR Roads. ............Sept. 20, 1957 1962-1977 5 3/4% $ 14,500,000 - S- $ 141,000 SS 14,359,000 1,327,297 Railways. ...........Nov. I, 1957 1959-1961 6% 600,0002 - -Note.3 - - ECUADOR (guaranttor) Roads-Corn. Ejec. Vialidad (Gutityas). ...Feb. I 0, 1954 1958-1964 4 )/ % 8,500,000 1,000,000 744,000 - -6,756,000 7,500,000 Power-Einpresa El&ilrica Quito, S.A. ...Mar, 29, 1956 1959-1976 43/4% 5,000,000 - - 197,000 - 4,803,000 4,422,588 Power-Ernpresa Ele'trica Quit'o, S.A. ...Sept. 20, 1957 1962-1977 5 34 % 5,000,000 - -- - 5,000,000 192,092 Port-A utoridad Porlutaria de Guayaqttil . .. Oct. 9, 1958 1963-1983 5 3/4% 13,000,000 - - 100,000 -12,900,000 568,650 TOTAL 46,600,000 1,000,000 744,000 438,000 -43,818,000 14,010,627 EL SALVADOR Roads. ............Oct. 12, 1954 1959-1966 4/% 1!,100,000 - 334,000 250,000 250,000 10,516,000 10,692,467 Roads. ............Jan. 7, 1959 1963-1974 53/4% 5,000,0002 - - Note3 - - - EL SALVADOR (guarot-aor) Power-Corn/iskin del Rio Letunpa. ....Dec. 14, 1949 1954-1975 41% 12,545,000 - 495,000 1,000,000 1,000,000 11,050,000 12,545,000 Power-Co'n,iskin del Rio Lempa. ....Feb. 20, 1959 1962-1984 53/4% 3,000,0002 - - - TOTAL 31,645,000 - 829,000 1,250,000 1,250,000 21,566,000 23,237,467 ETHIOPIA Roads. ............Sp.13, 1950 1956-1971 4% 5,000,000 - 877,000 - - 4,123,000 5,000,000 Industry. ...........Sept. 13, 1950 1956-1971 4%(Y 2,000,000 - 350,000 - - 1,650,000 1,649,679 Comnmunications. .........Feb. 19, 1951 1956-1971 4 % 1,500,000 - 262,000 - - 128001,500,000 Roads. ............June 28, 1957 1961-1977 5 %8 (e 15,000,000 - - 1,491,000 - 13,509,000 4,105,640 TOTAL 23,500,000 -1,489,000 1,491,000 -20,520,000 :12,255,319 FINLAND (guarantor) Power & Industry-Bank of Finlanid. . . . Auig. I, 1949 1953-1964 4%7 12,500,000 - 5,004,990 1,559,010 1,559,010 5,936,000 12,500,000 Power, Industry & AgricultUre-Bantk of Finland Apr. 30, 1952 1955-1970 43/4% 20,000,000 -4,603,000 - - 15,397,000 20,000,000 I ndustr-y-Bank of Fint/and. .......Nov. 13, 1952 1955-1970 4 3/4% 3,479,464 1,415 701,631 -- 2,776,418 3,478,049 Power & InduLstry-Banik of Finlanid . . . . Mar. 24, 1955 1958-1970 4Y/s% 12,000,000 - - 2,288,000 1,105,000 9,712,000 12,000,000 Power-Mortgage Bank of Filnland Oy. ...My 22, 1956 1959-1976 43/4% 15,000,000 - -280,000 280,000 14,720,000 9,539,656 Industr-y-Mortgage Bank, oj'Finlanid Oy . .. Mar. 16, 1959 1962-1974 5 3/4% 37,000,000 - - 2,302,000 - 34,698,000 1,652,000 Repaid-onie loan .......... .......... 2,300,000 197,869 2,102,131 - -- 2,102,131 TOTAL 102,279,464 199,284 12,411,752 6,429,010 2,944,010 83,239,418 61,271,836 FRANCE (guarantor) Reconstruction-Cr~dit Nationial. ....May 9, 1947 1952-1977 414% 250,000,000 - 38,000 30,809,000 22,812,000 219,153,000 250,000,000 Railways-Overseas Roilways Adrninistration . . June 10, 1954 1956 -1966 4% ('/ 7,500,000 408,433 599,567 2,259,000 1,235,000 4,233,000 7,091,567 Power-E/ectric/ta et Gaz d'Algdr-ie . . . . Aug. 26, 1955 1957-1975 4 3/4 (Y 10,000,000 -- - 1,550,000 865,000 8,450,000 10,000,000 11ndUstry-COMIvLoG, GABO I/. .....Jie30, 1959 1963-1974 6%(( 35,000,0002 --- TOTAL 302,500,000 408,433 637,567 34,618,000 24,912,000 231,836,000 267,091,567 GUATEMALA Roads .............Jluly 29, 1955 1959-1970 4ys% 1/ I8,200,000 - - 576,000 576,000 17,624,000 17,618,443 I-IAITt Roads. ............May 7, 1956 1961-1967 41/2% 2,600,000 - -386,000 -2,214,000 541,947 Statement of Loans-June 30, 1959 (continued) Interest EfkCtive loans sold E'ffective Date of rote Origin,al Prittcijtal or ap,reed to be Solrl3 ioa,ts Principal loot, linct ;ling principal repay;rn. 7--- held be, a,... ,I Purpose, harrowe r anid guarantor 1agreement At aturities con Inission) ai o,u,u,t Canc,ellations tn Bank Tolta sales Portioll nmaturec14 Banik dIisbursed HIONDURAS Roads. ............Dec. 22, 1955 1957-1964 41/2 $ 4.200,000 $ 185,000 $ 872,000 5 802,000 $ 3,143,000 $ 3,750,392 Roads. ............My 9, 1958 1961 1978 5 Y8% 5,500,000 -- 299,000 - 5,201,000 422,214 HONDURAS (guarantor) Power-Empr-esa Nacional de Eneigia Elcctr-ica . May 20, 1959 1962-1974 6% 1,450,0002 --Note3 - - TOTAL 11,150,000 -185,000 1,171,000 802,000 8,344,000 4,172,606 ICELAND Power. ............June 20, 1951 1956-1973 4 3/8 2,450,000 -352,800 - - 2,097,200 2,450,000 Agricultuire. ..........Nov. 1, 1951 1956-1973 4/% 1,008,000 -121,800 - - 886,200 1,008,000 Industry. ...........Aug. 26. 1952 1954-1969 43/4( 854,000 221,000 - - 633,000 854,000 ICELAND (guiarantor-) Agricuiltujre-!celatzd Bank of Dev,elopment ..Sept. 4, 1953 1958-1975 5%Cl 1,350,000 -52,000 - - 1,298,000 1,350,000 Communications-icelanid Bank of Deirelopmentt Sept. 4, 1953 1954-1966 43/4% 252,000 -88,200 - -163,800 252,000 TOTAL 5,914,000 -835,800 - - 5,078,200 5,914,000 INDIA Railways. ...........Aug. 18, 1949 1950-1964 4% 34,000,000 1,200,000 7,736,099 15,591,583 10,368,535 9,472,31f8 32,800,000 Power. ............Apr. 18, 1950 1955-1970 4%0/ 18,500,000 1,779,500 1,249,000 5,010,000 2,655,000 10,461,500 16,720,500 Multi-Purpose Project. .......Jan. 23, 1953 1956 1977 4Y8% 19,500,000 9,000,000 898,000 507,000 - 9,095,000 10,500,000 Railways. ...........July 12, 1957 1961-1972 558% 24,000,000 - - - 24,000,000 24,000,000 Railways. ...........July 12, 1957 1961-1972 5548% 19,1 10,000 - - - - 19,1 10,000 19,110,000 Railways. ...........July 12, 1957 1961-1972 5 Y /s%0 11,200,000 - - - - 11,200,000 11,200,000 Railways. ...........July 12, 1957 1961 1972 5 Y/s% 35,700,000 .- - - 35,700,000 35,700,000 Power. ............July 23, 1958 1961-1978 53/8 % 25,000,000 - - 262,810 - 24,737,190 10,350,904 Railways. ...........Sept. 16, 1958 1963-1979 5 34%cl 85,000,000 - - 1,000,000 - 84,000,000 85,000,000 Power. ............Apr. 8, 1959 1965 1984 53/4% 25,000,0002 - . - - INDIA (guarantor) Industry-Indciant Ir-on & Steel Company ...Dec. 18, 1952 1959-1967 43/4% 31,500,000 1,480,000 1,249,000 700,000 28,071,000 25,659,875 Industry-Inidian Iit-on & Steel Company .. Dec. 19, 1956 1960-1967 5%et 20,000.000 - - 1,032,000 -18,968,000 14,296,935 Power-Tata Groap a/'Power Companies . .. Nov. 19, 1954 1958-1974 43/4% 16,200,000 2,250,000 1,364,000 666,000 12,586,000 12,806,498 Power-Tata Gr-oup of Pow,er Companie.s . .. May 29, 1957 1960-1975 5Y4% 9,800,000 - -- - 9,800,000 6,558,181 Industry-i.C.L.C. ... . . ....M a r. 14, 1955 1961-1969 454% 10,000,000 - - - 10,000,000 3,322,700 Industry-The Tuta ironi anid Steel Co., Ltd...June 26, 1956 1959-1971 4 3/4%~ 75,000,000 -~ 2,355,000 - 72,645,000 75,000,000 Industry-Tlse Tata Iron a,td Steel Co., Ltd..,Nov. 20, 1957 1960 1971 6% 32,500,000 - l5,000,000 - 17,500,000 30,881,125 Airlines-Aijr-India Inter-national Cor-p. .. .Mar. 5, 1957 1965-1966 5/2% 5,600,000 - - - 5,600,000 4,723,947 Port-Calcuitta Port Commissioners. . . .June 25, 1958 1963-1978 5%7 c 29,000,000 - -1,113,000 - 27,887,000 2,082,734 Port-Trtustees of the Por-t of Madras. .. .June 25, 1958 1963 1978 5 1/2 % 14,000,000 - 592,000 - 13,408,000 900,820 Repaid-ooce lait ...... .......... 10,000,000 2,796,187 2,263,000 4,940,813 4,940,813 7,203,81i3 TOTAL 550,610,000 18,505,687 13,395,099 49,468,206 18,630,348 444,241,008 428,818,032 IRAN Equipment for Developmient. .....Jan. 22, 1957 1959-1962 5%"/ 75,000,000 - - 5,000,000 - 70,000,000 75,000,000 R oa ds. ............My 29, 1959 1961 1976 6 ~ 72,000,0002 - -Note3 - TOTAL 147,000,000 - 5,000,000 - 70,000,000 75,000,000 IRAQ Repaid-one loan. ................... 12,800,000 6,506,054 6,293,946 ---6,293,946 Statement of Loans-June 30, 1959 (continued) Interest Effective loans sold Effective Dale of rate Original Prilcipal or agreedl to be said13 loans Principal loan (Intcludittg printcipal repaynttctts -___ -- ---- held by anzount Purpose, borroser and guaran,tor I greeonent Afalurities comlnission) aono"t Cancellations lo Dank Totalsaes Portion ,nataeed4 Bhnk disbursed ITALY (guarontor) Equipment for Development 1 Oct. 10, 1951 1956-1976 41/2% $ 10,000,000 $ - $ 473,000 $ 834,000 $ 485,000 $ 8,693,000 $ 10,000,000 Equipment for Development | Oct. 6, 1953 1958-1978 5% 10,000,000 - - 593,000 289,000 9,407,000 10,000,000 Power, Agriculture & lndustry Cassa per il Junie , 1955 1958-1975 43/4% 70,000,000 1,600,000 - 6,000,000 2,000,000 62,400,000 65,131,040 Power, Agriculture & Industry Mezzogiorno Oct. 11, 1956 1959-1976 5% 74,628,000 - - 3,855,812 - 70,772,188 58,939,881 Power, Agriculture & Industry Feb. 28, 1958 1961-1978 51/2% 75,000,0002 - - 12,830,429 - 56,169,571 29,690,400 Power & Industry Apr. 21, 1959 1963-1979 53/4% 20,000,0002 - - TOTAL 259,628,000 1,600,000 473,000 24,113,241 2,774,000 207,441,759 173,761,321 JAPAN (guarantor) Power-Japan Development Bank . . Oct. 15, 1953 1957-1973 5% 21,500,000 922,429 - 3,551,773 2,148,000 17,025,798 20,577,571 Power-Japan Development Bank . . June 13, 1958 1962-1983 53/8% 37,000,000 - - 1,070,000 - 35,930,000 23,804,310 Power-Japan Development Bank. Oct. 15, 1953 1957-1973 5% 11,200,000 749,680 - 1,774,694 1,119,000 8,675,626 10,450,320 Power-Japan Development Bank . . . . . Oct. 15, 1953 1957-1973 5% 7,500,000 1,043,611 - 1,071,000 750,000 5,385,389 6,456,389 Power-Japan Development Bank . . . . Sept. 10, 1958 1962-1983 53/4% 29,000,000 - - 336,000 - 28,664,000 4,696,264 Industry-Japan Development Bank . . . . Oct. 25, 1955 1958-1970 45/8% 5,300,000 171,142 - 960,000 463,000 4,168,858 5,128,858 Industry-Japan Development Bank . . . . Feb. 21, 1956 1958-1971 43/4% 8,100,000 539,555 - 1,190,000 779,000 6,370,445 7,560,445 Industry-Japan Development Bank . . . Dec. 19, 1956 1960-1971 5% 20,000,000 - - 1,252,000 - 18,748,000 19,972,515 Industry-Japan Development Bank . . . Jan. 29, 1958 1960-1971 55/8% 8,000,000 - - 734,000 - 7,266,000 8,000,000 Power-Japan Development Bank . . June 27, 1958 1961-1983 53/8% 25,000,000 - - 789,000 - 24,211,000 19,674,011 Industry-Japan Development Bank . . . . July 11, 1958 1961-1973 53/8% 33,000,000 - - 1,100,000 - 31,900,000 11,671,885 Industry-Japan Development Bank . . . . Aug. 18, 1958 1960-1973 53/8% 10,000,000 - - 784,810 - 9,215,190 10,000,000 Industry-Japan Development Bank . . . . Sept. 10, 1958 1960 1973 53/4% 22,000,000 - - 1,698,000 - 20,302,000 17,071,412 Power-Japan Development Bank . . . . Feb. 17, 1959 1974-1983 53/4% 10,000,000 - - - - 10,000,000 2,294,280 Agriculture-Land Development Corporation . . Dec. 19, 1956 1959-1971 5% 4,300,000 - - - - 4,300,000 3,109,925 Multi-PurposeProject-AichilrrigationPublicCorp. Aug. 9, 1957 1961-1977 53/4% 7,000,000 1,700,000 - 721,000 - 4,579,000 3,645,941 TOTAL 258,900,000 5,126,417 - 17,032,277 5,259,000 236,741,306 174,114,126 LEBANON (guarantor) Power & Agriculture-Litani River Authority . . Aug. 25, 1955 1961-1980 43/4% 27,000,000 - - - 27,000,000 5,543,467 LUXEMBOURG Industry & Railways . . . . . . . . . Aug. 28, 1947 1949-1972 41/4% 12,000,000 238,017 1,619,983 4,294,000 2,884,000 5,848,000 11,761,983 MALAYA (guarantor) Power-Central Electricity Board .Sept.22, 1958 1964-1983 53/4% 35,600,000 - - 1,280,000 - 34,320,000 263,270 MEXICO (guarantor) Power-Financiera & Comision . . . . . . Jan. 6, 1949 1953-1973 41/2% 24,100,000 - 2,764,700 3,968,300 2,921,300 17,367,000 24,100,000 Power-Financiera & Comisin . . . . . . Jan. I1, 1952 1955-1977 41/2% 29,700,000 - 1,323,000 2,868,000 1,816,000 25,509,000 29,289,960 Power-Financiera & Comisi6n . . . . . . May 5, 1958 1962-1983 53/8% 34,000,000 - - 1,323,000 - 32,677,000 6,559,368 Power-Mexlight . . . . . . . . . . Apr. 28, 1950 1953-1975 41/2% 26,000,000 -- 2,481,000 2,307,000 2,307,000 21,212,000 26,000,000 Power-Mexlight . . . . . . . . . . Jan. 14, 1958 1959-1977 55/8% 11,000,000 - - 1,000,000 - 10,000,000 10,364,835 Railways-Ferrocarril del Pacifico . ... . Aug. 24, 1954 1959 1969 45/8% 61,000,000 - - 3,976,000 1,210,000 57,024,000 60,656,849 Refunded-one loan; repaid-one loai . . . . . . . . . . . . . . 20,000,000 19,472,112 527,888 - - - 527,888 TOTAL 205,800,000 19,472,112 7,096,588 15,442,300 8,254,300 163,789,000 157,498,900 Statement of Loans-June 30, 1959 (conitinued) fInterest Effective loans sold Effective Dote of rate Or-iginal Principal or agreed to be sold3 IOUlis Principal bool (ieudiog peitteipol repavrtnents h-- -- eld by amount Puirpose, borrower anid guarauitort ogreeitiert Matuirities commnission) amtounit Cattcellations to Bank Total solesv Portiott mnatured4 Bank dlisbuirsec! NETFHERLANDS Reconstruction. .........Aug. 7, 1947 1954-1972 414 $191,044,212 $ - $103,372,212 $ 87,672,000 $ 22,385,000 $ - $ 191,044,212 NETFHERLANDS (guar-antor) Industry--Herslelbank .. . . . ...July 26, 1949 1952-1964 4%cl 15,000,000 7,548,015 1,025,089 4,318,911 4,082,411 2,107,985 7,451,985 Industry & Transport -Herstelbank . . . . May 15, 1957 1959-1962 5 Y0,4% 15,000,000 - - 15,000,000 - 15,000,000 Repaid-six loanis .................... 22,955,788 - 3,500,000 19,455,788 19,455,788 22,955,788 TOTAL 244,000,000 7,548,015 107,897,301 126,446,699 45,923,199 2,107,985 236,451,985 NICARAGUA Roads. ............Juine 7, 1951 1954-1961 41/s8%l 3,500,000 - 2,167,000 29,000 29,000 1,304,000 3,500,000 Agriculture . I........Oct. 29, 1951 1954-1962 43,4%0/ 550,000 3,006 289,994 29,000 29,000 228,000 546,994 Roads. ............Sept. 4, 1953 1957-1963 43,44%( 3,500,000 - 1,121,000 - - 2,379,000 3,417,942 Power. ............Sept. 4, 1953 1955-1963 43%7 450,000 - 202,000 - - 248,000 450,000 NICARAGUA (guar-antor) Power-Emnp. Nal. Luz y Ftterza. . July 8, 1955 1958-1975 43/4(,4 7,100,000 - - 724,000 279,000 6,376,000 7,100,000 Power-Emp. Nal. Luz y Fuer-za. . Nov. 15, 1956 1959-1971 43,4%"l 1,600,000 - - 101,000 - 1,499,000 943,515 Power-Institulo de Fomenlo Nacional . July 8, 1955 1958-1975 43,4%0/ 400,000 15,000 - - 385,000 400,000 Agriculture-Inistiuluo de Fornento Nacional .Aug. 26. 1955 1957-1967 41% 1,500,000 - 735,000 406,000 765,000 1,467,371 Port-A utoridad Por-tuaria de Corinto. . .May 22, 1956 1959-1976 43,4%0 3,200,000 - - 121,000 - 3,079,000 1,386,748 Repaid-one loan ........... ......... 1,200,000 6,879 1,164,121 29,000 29,000 -. 1,193,121 TOTAL 23,000,000 9,885 4,959,115 1,768,000 772,000 16,263,000 20,405,691 NORWAY Equipment for Development . .....Ap. 8, 1954 1957-1974 43,4% 25,000,000 - 3,097,000 2,016,000 21,903,000 25,000,000 Equipmnent for Development. .....Apr. 19, 1955 1960-1975 43,4%0/ 25,000,000 - 1,250,000 - 23,750,000 25,000,000 Power. ............May 3, 1956 1961-1976 4 3,4% 25,000,000 -- - - 25,000,000 13,628,123 TOTAL 75,000,000 --4,347,000 2,016,000 70,653,000 63,628,123 PAKISTAN Railways. ...........Mar. 27, 1952 1954-1967 4y8% 27,200,000 -7,671,400 935,600 935,600 18,593,000 25,843,757 Agriculture. ..........June 13, 1952 1954-1959 41/80/ 3,250,000 -1,951,000 997,000 997,000 302,000 3,250,000 Railways. ...........Oct. 18, 1957 1961-1973 6% 31,000,000 - - 850,000 - 30,150,000 16,950,008 PAKISTAN (guiarantor') Transport-Sui Gas Transnmission Co. June 2, 1954 1956-1974 4 3,4%0 14,000,000 - - 1,806,000 1,528,800 12,194,000 14,000,000 Power-Karachi Electric Sttpply Corp. June 20, 1955 1957-1970 45,4%"/ 13,800,000 5,800 2,049,600 1,621,200 11,744,600 13,686,901 Power-Karachi E-lectric Supply Corp.Ap. 23, 1958 1963-1978 511,C'/z 14,000,000 -- I198,000 - 13,802,000 343,877 Industry-Kar,itaphuli Paper- Mills, Ltd. Aug. 4, 1955 1956-1970 4 5s '% 4,200,000 -- 775,000 657,000 3,425,000 4,200,000 Port-Tratstees of'the Port o] Karachi. ...Aug. 4, 1955 1960-1980 43,4%)/ 14,800,000 --216,842 - 14,583,158 8,545,192 Industry-P.I.C.I.C ..........Dec. 17, 1957 1962-1972 53,4% 4,200,000 -- - 4,200,000 197,267 TOTAL J26,450,000 -9,628,200 7,828,042 5,739,600 108,993,758 87,017,002 PANAMA Repaid-thr-ee loans. ...................7,390,000 542,574 5,147,426 1,700,000 1,700,000 -6,847,426 PARAGUAY Agriculture & Transport. ......Dec. 7, 1951 1954-1964 4 Y/ 9% 5,000,000 511,010 1,656,990 100,000 100,000 2,732,000 4,488,990 Statement of Loans~-June 30, 1959 (continued) Interest Effective loans sald Effective Date of rate Originial Principal or agreed to be sold3 loans Principial loan (includtng principal repaymlents -hel d by amount Purpose, borro wer and guarantort agreement Maturities commission) amount Cancellations to Banik Total sales Portion mnatured4 Bank disbursed PERU Port. ............Jan. 23, 1952 1954-1967 4/% $2,500,000 $ 89,472 5 343,528 $ 877,000 $ 482,000 $ 1,190,000 $ 2,410,528 Agriculture. ..........July 8, 1952 1954-1959 4'/861% 1,300,000 - 729,750 439,250 439,250 131,000 1,300,000 Agricultur-e. ..........Apr. 12, 1954 1956-1961 4/4% 1,700,000 487,000 392,000 392,000 821,000 1,700,000 Agriculture. ..........Apr. 5, 1955 1959-1980 43/4 % 18,000,000 - - 496,000 - 17,504,000 17,659,750 Roads. ............Aug. 5, 1955 1958-1964 414% 5,000,000 - - 683,000 683,000 4,317,000 4,946,386 PERu (guiarantor) Agriculture-Banco de Fomnento Agropectuario .Nov. 12, 1954 1957-1 963 414% 5,000,000 229 779,771 748,000 748,000 3,472,000 4,999,771 Agriculture-Banco de Fotnento Agropecuario Mar. 13, 1957 1959-1 965 51/2 % 5,000,000 - - 1,101,000 - 3,899,000 4,598,417 Industry-Cemento Pacasmayo. . . ...Apr. 19, 1955 1958-1970 4 Y8%Ol 2,500,000 2,918 -310,000 230,000 2,187,082 2,497,082 Railways-Peruvian Corporation Lid. . . . Apr. 3, 1958 1961-1973 51Y2% 15,000,0002 - - - Port-A utoridad Portuaria del Callao . . . . Sept. 17, 1958 1963-1978 5 34c,4% 6,575,000 - - 395,000 - 6,180,000 520,507 TOTAL 62,575,000 92,619 2,340,049 5,441,250 2,974,250 39,701,082 40,632,441 POIIPPINES (guarantor) Power-National Power Corporation . . . . Nov. 22, 1957 1960-1982 6%c 21,000,000 2,500,000 - 987,000 - 17,513,000 12,578,516 SOUTH AFRICA Transport..... . . .....Jan. 23, 1951 1956-1965 33,4%1/ 20,000,000 - 5,133,000 1,867,000 1,867,000 13,000,000 20,000,000 Transport..... . . .....Aug. 28, 1953 1955-1963 43,4 % 30,000,000 - 870,980 22,160,020 13,249,020 6,969,000 30,000,000 Transport..... . . .....Nov. 28, 1955 1958-1966 4'/2%/, 25,200,000 - 1,008,000 3,024,000 - 21,168,000 25,200,000 Railways....... . .....Oct. 1, 1957 .1960-1967 53,4 % 25,000,000 - - 2,000,000 - 23,000,000 25,000,000 Railways....... . .....Dec. 2, 1958 1961-1968 5 3/4 % 25,000,000 - -1,253,000 - 23,747,000 14,584,445 Railways....... . .....June 10, 1959 1961-1969 6% 11,600,000 - - 2,484,000 - 9,116,000 - SOUTH AFRICA (guarantor) Power-Electricity Supply Commission .. Jan. 23, 1951 1954-1 970 4% 30,000,000 - 866,198 9,125,895 6,733,895 20,007,907 30,000,000 Power-Electricity Supply Commission ...Aug. 28, 1953 1955-1963 4 3/4Oo~ 30,000,000 - 134,000 20,455,000 12,505,000 9,411,000 30,000,000 TOTAL 196,800,000 - 8,012,178 62,368,915 34,354,915 126,418,907 174,784,445 SUDAN Railways & Water Transport. .....July 21, 1958 1961-1978 5 Y8% 39,000,000 - - 1,750,000 - 37,250,000 16,234,094 TH4AILAND Railways. ...........Oct. 27, 1950 1954-1966 3 3,4% 3,000,000 - 961,000 189,000 189,000 1,850,000 3,000,000 Agriculture. ..........Oct. 27, 1950 1956-1971 4% 18,000,000 - 3,158,000 796,000 - 14,046,000 18,000,000 Port. ............Oct. 27, 1950 1954-1966 3 3,4% 4,400,000 - 1,413,000 275,000 275,000 2,712,000 4,400,000 Th4AILAND (guarantor) Railways-State Railway of Thailand .. Aug. 9, 1955 1958-1970 45/s % 12,000,000 - - 1,105,000 728,000 10,895,000 11,850,252 Port-Port Authority of Thailand. . . ..Oct. 12, 1956 1958-1 971 43,4 % 3,400,000 140,922 -184,000 184,000 3,075,078 3,259,078 Multi-Purpose Project-Yanhee Elec. Authority . Sept. 12, 1957 1963-1982 5 34,4% 66,000,000 - -- - 66,000,000 7,686,380 TOTAL 106,800,000 140,922 5,532,000 2,549,000 1,376,000 98,578,078 48,195,710 TURKEY Agriculture. ..........July 7, 1950 1954-1968 33/s% 3,900,000 - 1,034,000 144,000 144,000 2,722,000 3,900,000 Ports. ............July 7, 1950 1956-1975 41% 12,500,000 - 1,502,000 - - 10,998,000 12,500,000 Ports. ............Feb. 26, 1954 1956-1975 47,4%Ol 3,800,000 - 430,000 - - 3,370,000 2,861,445 Multi-Purpose Project. .......June 18, 1952 1960-J977 43,4 % 25,200,000 2,356,000 - - - 22,844,000 22,519,413 TURKEY (guiarantor) Industry-Induistrial DevelopMent Bank ... Oct. 19, 1950 1957-1965 33/% 9,000,000 320,579 1,886,420 - - 6,793,001 8,673,710 Industry-Industrial Development Bank . . . Sept. 10, 1953 1958-1968 47/s % 9,000,000 - 674,000 - - 8,326,000 8,215,863 TOTAL 63,400,000 2,676,579 5,526,420 144,000 144,000 55,053,001 58,670,431 Statement of Loans-June 30, 1959 (continued) Interest Effective loans sold Effectie Date of rate Original Principal or agreed to be sold3 loans Principal loan (including pri,tcipal repaytnents teld bY atnount Purpose, borrowter and guarantor5 agreemnent Maturities commi,lssion) amount Cancelletllons to Bank Total sales Portion oatured4 Bank disbarsed UNITED KINGDOM (guarantor) Power-Southern Rhodesia . . . . . . . Feb. 27, 1952 1956-1977 43/4% $ 28,000,000 $ - S 148,000 $ 8,084,000 $ 3,852,000 $ 19,768,000 $ 28,000,000 Railways-Northern Rhodesia . . . . . . Mar. I1, 1953 1956-1972 434% 14,000,000 - 54,000 4,485,293 2,083,000 9,460,707 14,000,000 Power-Federal Power Board, Rhodesia and Nyasaland . . . . . . . . . . . June 21, 1956 1963-1981 5% 80,000,000 - - 10,554,000 - 69,446,000 53,589,414 Railways-Rhodesia and Nyasaland . . . . June 16, 1958 1961-1976 53/8% 19,000,000 - - - - 19,000,000 9,258,239 Railways-East Africa High. Commission . . . Mar. 15, 1955 1958-1974 43/4% 24,000,000 - - 7,973,000 1,434,000 16,027,000 24,000,000 Railways-Nigeria . . . . . . . . . May 2, 1958 1962-1978 53/g% 28,000,000 - - 1,141,000 - 26,859,000 12,943,989 TOTAL 193,000,000 - 202,000 32,237,293 7,369,000 160,560,707 141,791,642 URUGUAY (guarantor) Power & Communications-U..E. .Aug. 25, 1950 1955-1974 41/4% 33,000,000 - 6,925,000 2,150,000 500,000 23,925,000 33,000,000 Power-U.T.E. . . . . . . . . . . Aug. 29, 1955 1958-1975 43/4% 5,500,000 - - 654,000 316,000 4,846,000 5,500,000 Power-U.T.E. . . . . . . . . . . Oct. 25, 1956 1961-1981 5% 25,500,000 - - - - 25,500,000 16,367,362 TOTAL 64,000,000 - 6,925,000 2,804,000 816,000 54,271,000 54,867,362 YUGOSLAVIA Power, Agriculture, Industry & Transport . . Oct. I11, 1951 1955-1976 41/% 28,000,000 - 3,735,000 - - 24,265,000 28,000,000 Power, Agriculture, Tndustry & Transport . . Feb. 11, 1953 1956-1978 4 /ys% 30,000,000 - 2,474,000 - 27,526,000 30,000,000 Repaid-one loan . . . . . . . . . . . . . . . . . . . . . . 2,700,000 - 2,700,000 - - - 2,700,000 TOTAL 60,700,000 - 8,909,000 - - 51.791,000 60,700,000 GRAND TOTALS $4,521,937,893 $95,830,753 $264,181,811 $555,364,526 $236,665,096 $3,397,110,803 $3,377,347,495 Less exchange adjustments 10,230,998 $3,386,879,805 NOTES: Principal A mount Borrower (gttararntor) antd year signed Agreed to be Sold I Loans made (a) to the member or (b) to a political subdivision or a public or private enterprise in the Brazilian Traction (Brazil), 1959.$ 300,000 territories of the member with the member's guarantee. Chidral (Colombia), 1958. . . . . . . . . . . 280,000 2 Agreements providing for these loans have been signed, but the loans do not become effective and Empresas Publicas de Medellin (Colombia), 1959 . . 10,000 Ecuador, 1957. .................. 25,000 disbursements thereunder do not start until the borrower and guarantor, if any, take certain action and El Salvador, 1959 . . . . . . . . . . 300,000 furnish certain documents to the Bank. In the case of one loan to Cassa per il Mezzogiorno (Italy) made Empresa Nacional de Energia Electrica (Honduras), 1959 .123,000 in fiscal year 1958, $6,000,000 has not yet been made effective. Iran, 1959 . . . . . . . . . . . . . . . . . 12,000,000 3The Bank has entered into agreements to sell portions of loans shown hereafter which are not yet $13,128,000 effective: The total of both effective and non-effective loans sold or agrced to be sold is the equivalent of $568,492,526. 4 This includes amounts which, according to information available to the Bank, have been prepaid prior to maturity. 5.,' APPENDIX L PrncipaA Officers of th e Bank EUGENE R. BLACK ............. President W. A. B. ILIFF ............. Vice President J. BURKE KNAPP ............. Vice President DAVIDSON SOMMERS ............. Vice President LEONARD B. RIST GEORGE L. MARTIN Director, Economic Staff Director of Marketing RICHARD H. DEMUTH HENRY W. RILEY Director, Technical Assistance and Liaison Staff Treasurer S. R. COPE M. M. MENDELS Director of Operations-Europe, Africa and Australasia Secretary JOSEPH RUCINSKI A. BROCHES Director of Operations-South Asia and Middle East General Counsel ORvIs A. SCHMIDT WILLIAM F. HOWELL Director of Operations- Western Hemisphere Director of Administration MARTIN M. ROSEN HAROLD N. GRAVES, JR. Director of Operations-Far East Director of Information SIMON ALDEWERELD MICHAEL L. HOFFMAN Director of Technical Operations Director, Economic Development Institute *56 INTERNATIONAL 3ANK FOR RECONSTRUCTION AND DEVELOPIENT Supplement to the Fourteenth Annual Report A Summary of Bank Activities from July 1, 1959 to January 31, 1960 MERMBERSHIP Applications for membership from Laos and Portugal were approved 'oy the 3oard of Governors at the 1959 Annual Meeting. Their subscrip- tions will be `10 million and `;80 million respectively. CAPITAL SUBSCRIPTION On September 15, 1959, the authorized capital of the Bank was increased from plO billion to 121 billion. By January 31, 1960, 47 member governments had doubled their subscriptions and 12 members had subscribed to 804.2 million in addition to their 100% increases. (See Annex.) As a result of these increases, subscribed capital rose from 19.5 billion to '$18.7 billion by January 31. INTERNATIONAL DEVELOPL-NT ASSOCIATION Pursuant to a request of the Board of Governors, the Bank's Executive Directors drew up Articles of Agreement for the International Development Association (IDA), the proposed new financing organization to be an affiliate of the Bank. The Articles were transmitted to the Bank's 68 member countries for acceptance on January 29, 1960. When members whose subscriptions aggregate 65% of IDA's initial resources have accepted membership and subscribed to the Association, the Articles will come into force. The Articles will remain open for signature by original members until December 31, 1960; the earliest date on which IDA may come into being is September 15, 1960. IDA would be a new source of international development capital and is designed to promote the development of the less developed areas of the world included in its membership. It would make long-term loans on more lenient terms than those of the Bank, providing additional de- velopment assistance on terms bearing less heavily on the balance of payments of the recipient country than conventional loans. The Articles envisage a broad degree of flexibility in IDA's operations, not only in the terms of its lending but also in the projects which may be financed. Projects must be of "high developmental priority" and this is under- stood to allow IDA to finance projects such as water supply and pilot housing as well as projects of the type which the Bank has been accus- tomed to finance. -2- The initial resources of IDA from member governments1 subscriptiors are proposed as '11 billion, the subscriptions being roughly proportion- ate to subscriptions in the Bank. In the paynent and. use of subscrip- tions, however, IDA is to have its own formula: 17 of the more industri- alized member countries will pay their entire subscriptions in gold or freely convertible currencies over the first five years, in contrast to only 10% to be so paid by the rermaining 51 less developed member coun- tries. The 90% balance of the subscriptions of the latter group will be paid in their national currencies, and would be available for con- version by IDA or for use to finance exports from the subscribing member's territories, only with the consent of that member. LETDING ACTIVITIES Since July 1 the Bank has made 16 loans totaling the equivalent of 6366.7 million in Algeria and Sahara, Austria, Chile, Colombia, India (two loans), Iran, Italy, Japan (two loans), Norway, Pakistan (three loans), United Arab Republic and Uruguay. At January 31, 1960, the gross total of Bank lending was 34,888.6 million, made up of 250 loans in 51 countries and territories. A F R I C A ALGERIA AND SAHARA Oil Pipeline Loan $50 million 12-year 6% loan of December 10, 1959 to Societe Petroliere de Gerance. The loan will help to finance the cost of constructing and oper- ating a 412-mile pipeline to bring crude oil from the Hassi Messaoud oilfield in the Sahara to the Algerian port of Bougie on the Mediter- ranean coast. As of June 1959 proven primary recoverable reserves at Hassi Messaoud were estimated to be about 170 million metric tons, with a probable reserve of another 130 million tons. The pipeline came into limited operation in December 1959. Additional pumps and pumping stations will be installed in successive stages to bring the pipeline up to its design capacity of about 14a million tons annually by 1961. The petroleum resources of Hassi Messaoud will provide Algeria and the Sahara with new sources of raw materials and low-cost fuel and power for industry, as well as with important budget revenues from royalties and taxes. Furthermore when the pipeline is operating at capacity, the supply of oil should enable the French franc area as a whole to save or earn the equivalent of about 3200-250 million a year in foreign exchange. The total cost of the project is estimated at the equivalent of j$105 million. The loan agreement provides that the Bank itself will not be commnitted to put up more than 425 million; it is expected that the balance of A,$25 million will be obtained in due course in the form of participations in the Bank loan. UNITED ARAB REPUBLIC Loan for Suez Canal Improvements _,06.5 million 15-year 6% loan of December 22, 1959 to the Suez Canal Authority. The loan will assist in the execution of a program to widen and deepen the Suez Canal so that it can accommodate ships with a draft of 37 feet compared to the present maximum, of 35 feet, or ships of about 46,000 dead-weight tons compared with the present 36,000. When the pro- gram is completed in 1961, the Suez Canal Authority will also have the modern plant and equipment it will need to provide ships using the Canal with efficient service. The Canal provides passage for ocean-going vessels between the Mediterranean and Red Seas, and shortens the sea voyage between Asia and Western Surope by about 5,000 miles. During 1958 35% of all ocean- going vessels and 60% of all oil tankers, with a gross tonnage exceed- ing 4,000 tons, passed through the Canal at least once. Traffic has grown steadily and now amounts to 18,000 ships and 140 nillion tons of cargo a year, of which 70% is oil mainly from the Middle East. While the discovery of new oilfields outside the Middle East may slow the rate of traffic growth, the need to improve the Canal stems not only from growing traffic but also to a large extent from the increase in the size of tankers seeking transit. Under the loan agreement, the Suez Canal Authority will keep funds in reserve from its current revenues in order to provide the ser- vice for the Bank loan. A S I A INDIA Railway Loan 650 million 20-year 6% loan of July 15, 1959 to India. The loan will assist in the expansion and modernization of the Indian Railways, the fourth largest railway system in the world. The railway program is a central part of India's Second Five-Year Plan, and accounts for about one-quarter of all public expenditures under the Plan. During the Plan period the Railways are raising freight capacity from 114 to 168 million tons annually and are increasing passenger capacity by 15%. The total expenditures involved are estimated at the equivalent of about "2,355 million. By the end of the programls third year, M,,arch 31, 1959, expenditures -were about three-fifths complete, and in 1958 the volume of railway freight traffic originating in India had reached a total of 132 million tons; for the first time in many years the Railways were able to handle all the freight offered. The Bank has now lent `225 million for the current railway pro- gram; the new loan will be applied mainly to expenditures for imported equipment, materials and services during the fourth year of the Plan ending MvIarch 31, 1960. Loan for Private Industry JO million 10-year loan of July 15, 1959 to the Industrial Credit and Investment Corporation of India Ltd. (ICICI). This loan will be used by ICICI to finance foreign exchange re- quirements of private industrial projects. The Corporation was estab- lished in January 1955 by private investors of India, the United King- dom and the United States to assist the growth of private industry in India. Up to May 1959, it had approved investments and underwritings amounting to the equivalent of 433 million. The orincipal sectors assisted by the Corporation have been mechanical, electrical and automotive industries, paper, chemicals and pharmaceuticals, sugar and shipping. ICICIts access to foreign exchange orovided by an earlier World Bank loan of JO million has been of" particular value to private industry in the past year when India's foreign exchange resources have been strained. The new Bank loan should meet the Cor- poration's foreign exchange requirements through most of 1961. Each part of the loan allocated to a particular project will carry its own interest rate, which will be the Bank's current rate of interest at the time the project is apoproved for financing. I R A N Loan for Private Industry 4P_5.2 million 15-year loan of November 23, 1959 to the Industrial and Wining Development Bank of Iran. The Industrial and W'fiining Development Bank of Iran (IMDBI) was formed in October 1959 by private investors in Iran, the United States, the United Kingdom, France, Belgium, Germany, Holland and Italy. IIKBI will stimulate private industrial development in Iran by making medium and long-term loans and by investing in share capital. It will promote and help to develop a capital market; guarantee loans and comitments of other investors; and provide technical and managerial assistance to Iranian industry. While the Iranian economy depends mainly on agriculture and oil, industry has also been developing rapidly in recent years. Iran produces - 5 - most of its cotton textiles and a large portion of its cement, wood pro- ducts and sugar. The processing of other indigenous products, the manu- facture of many articles now imported, the exploitation of the country's mineral resources, and the development of the petro-chemical industry afford a significant potential for private enterprise. The IMDBI started operations with resources equivalent to z-42.4 million made up of share capital of 400 million rials (5.3 million) subscribed by Iranian and foreign investors; an advance of 600 million rials ($8 million) from the Government of Iran, and an existing loan portfolio of 1,400 million rials (18,7 million) which the Government turned over to IMDBI for management (funds arising from repayment of these loans will be available to IMDBI for reinvestment); a loan of $5.2 million from the U.S. Development Loan Fund and the loan of 6P5.2 million from the World Bank. Each part of the loan allocated to a particular project will carry its own interest rate, which will be the Bank's current rate of interest at the time the project is approved for financing. JAPAN Steel Loans $24 million 15-year 6% loan of November 12, 1959 to the Japan Development Bank for re-lending to the Fuji Iron and Steel Co., Ltd. $20 million 15-year 6% loan of November 12, 1959 to the Japan Development Bank for re-lending to the Yawata Iron and Steel Co., Ltd. The loans will assist the Yawata and Fuji companies, Japan's two largest steel producers, in expanding and modernizing their facilities to greatly increase their pig iron and ingot steel capacity. These com- panies account for a large part of the current program of the whole Japanese iron and steel industry. The program's objective is to expand crude steel capacity from 11.1 million to 20.5 million tons in the period 1956-62; to install facilities for producing a higher quality and wider range of steel products; and to reduce operating costs by introducing the most modern techniques of production. The industry is also expanding pig iron capacity to make possible the increase in steel production with- out increasing the nation's dependence on imported scrap. The U 20 million loan for the Yawata Company is for the installation of facilities at the company's Tobata plant in northern Kyushu to make it a fully integrated steel plant. The loan will cover about 17% of the estimated total cost equivalent to "1117.6 million. The 0*24 million lQan for the Fuji Company is for the construction of works at the company's plant at Hirohata in Honshu on the inland sea. The new facilities will enable Fuji to increase its production of plates and sheets; also, by -6- permitting a fuller utilization of existing rolling mills, it will in- crease the company's earning power. The loan will cover about )2% of the estimated total cost equivalent to $75.3 million. PAKISTAN Electric Power Loan $2.4 million 15-year 6% loan of August 13, 1959 to the Karachi Electric Supply Corporation Ltd. (KESC). This loan will finance the foreign exchange cost of a 15,000- kilowatt diesel power plant to provide rapid reinforcement of power supplies to the Karachi area. This is the third Bank loan to KESC for the expansion of its electric power facilities. The earlier loans totaled p327.8 million and were for the construction of a 30,000-kilowatt steam pow,[er plant and the later expansion of this plant by 60,000 kilo- watts. The 60,000-kilowatt unit, however, cannot come into operation before 1962 and in the meantime scarcity of power is limiting Pakistan's industrial production. The Government therefore asked KESC to take emergency measures to expand its services. The new diesel plant being financed by the current loan will be in cperation by the middle of 1960, enabling KESC to meet pent up industrial demand and still have a margin of capacity to meet further increases in the following two years. Loan for Private Industry ^`10 million 10-year loan of September 25, 1959 to the Pakistan Industrial Credit and Investment Corpor- ation, Limited (PICIC). This loan, like an earlier Bank loan of 4.2 million, will be used by PICIC to finance the foreign exchange requirements of private industrial projects. PICIC was established in September 1957 by Pakistani investors, together with British, Canadian, American and Japanese private interests, to promote the growth of private industry in Pakistan. By Kay 1959 the Corporation had approved 67 loans totaling the equivalent of 412 million, of which 42 have been in foreign exchange amounting to the equivalent of 07.8 million. Sugar and textile industries have been the largest bor- rowers and others include food processing, chemicals and pharmaceuticals, mechanical, glass and ceramics. The marked revival of investment activity in Pakistan since early 1959 and the country's continued stringent foreign exchange situation re- sulted in a considerable increase in the demand on PICIC's resources. PICIC5's additional foreign exchange requirements through 1961 are esti- mated at $20 million wghich will be met by the Bank loan, and a A,G1 mil- lion loan from the United States Development Loan Fund. - 7 - Each part of the Bank loan allocated to a particular project will carry its own interest rate, which will be the Bank's current rate of interest at the time the project is approved for financing. Railway Loan $12.5 million 15-year 6% loan of November 30, 1959 to Pakistan. The loan will assist in financing an interim program designed to meet the minimum requirements of the Pakistan railways pending the formu- lation of a program of railway development to be carried out during the period of Pakistants Second Five-Year Plan. Pakistan has two railway systems: one is the chief form of trans- port in West Pakistan and the other serves East Pakistan. Since 1955 the volume of traffic has increased at an annual rate of 6% in West Pakistan and the increase has been even more rapid in East Pakistan. While the railways are well managed, efficiency of operation has been hampered by inadequate line and yard capacity and by a shortage of sig- naling equipment and rolling stock. The Bank's loan will be applied to the purchase of essential goods and equipment needed to ease this situ- ation. E U R 0 P E AUSTRIA Loan for Industry c$9 million loan of September 25, 1959 to the Oesterreichische Investitionskredit, A.G. The Investitionskredit will make the proceeds of this loan avail- able to private industrial companies for the expansion or modernization of their plants. When the Investitionskredit was established in 1957 to meet the need for long-term capital for private industrial enterprises, the Bank made it a loan of `$10,765,000 (since reduced to $9.3 million at the re- quest of the borrower). This loan helped to finance nine projects in the pulp, paper board, textile, and electrical engineering industries. Since that time, the Investitionskredit has increased its equity capital to the equivalent of approximately $5.5 million. At the institution's present rate of lending, its loan funds were expected to be fully committed by the end of 1959. The new Bank loan should provide sufficient funds for the next two years. The loan will finance projects to be selected by the Investitions- kredit and approved by the Bank. Each part of the loan allocated for a particular project will carry its own interest rate, which will be the Bank's current rate of interest at the time the project is approved for financing. Similarly, separate amortization schedules will be agreed upon and determined in accordance with the circumstances of the ultimate borrower. The loan must be fully repaid by October 1, 1974. ITALY Nuclear Power Loan )40 million 20-year 6% loan of September 16, 1959 to the Cassa per il NViezzogiorno. The loan will finance 60% of the cost of constructing a 150,000- kilowatt atomic power plant on the Garigliano River between Rome and Naples. This was the Bank's first loan for the development of nuclear power. The Cassa per il Mezzogiorno will re-lend the proceeds of the loan to the Societa Elettronucleare Nazionale (SENN), a company estab- lished in 1957 to build, own and operate the nuclear power plant. Power from the new plant will be fed into the transmission systems of SENN's utility shareholders, covering about half of Italy and serving more than half the population. Power demand in the service area is growing rapidly; studies have indicated that it will be necessary to increase capacity from 4,140,000 to 7,250,000 kilowatts in the period 1958-1964. A particular advantage to the power system from the SENN plant will be the experience gained; nuclear power plants can be expected to meet a growing portion of Italian power requirements in the years to come. The project was the outcome of a study carried out jointly by the Italian Government and the Bank to establish the technical, economic and financial merits of a nuclear power plant in Southern Italy. As part of the study, tenders were invited on an international basis and nine companies -- British, French and American -- submitted tenders. The plant will be built by General Electric Company of New York through a Swiss subsidiary and will incorporate a nuclear reactor cooled and moderated by boiling water and fueled by enriched uranium. Construc- tion of the civil works, substation and transmission lines will be carried out by SENN. The plant is expected to be in commercial oper- ation by late 1963. NORWAY Electric Power Loan 020 million 25-year 6% loan of July 8, 1959 to the Kingdom of Norway. The loan will help to finance the construction of two hydroelectric power plants in the mountains of central Norway, with a combined capacity _9-_ of 168,000 kilowatts. Half the power from the plants will supply the region served by the grid centered around the Trondheim area, and the remainder will be exported to Sweden. The loan will also assist the construction of 350 miles of transmission lines to reinforce and interconnect the power grids in middle and Southern Norway. 4k The proceeds of the loan will be made available to the Norwegian Water- course and Electricity Board, an agency of the Government. The Board now oper- ates plants having a capacity of 1,163,000 kilowattsv To meet the demands for additional power, the Board is constructing other power plants which will add 680,000 kilowatts to its systems, including the 400,000-kilowatt Tokke power plant for which the World Bank made a loan of >$25 million in 1956, W E S T E R N H E M I S P H E R E CHILE Electric Power Loan $32.5 million 25-year 6% loan to Empresa Nacional de Electrici- dad S.A. (Endesa) and Corporacion de Fomento de la Produccion (Fomento). The loan will help to finance a 280,000-kilowatt hydroelectric plant to be built on the Rapel River about 75 miles southwest of Santiago, and a 15,000- kilowatt thermal electric plant at the port of Huasco in northern Chile. The Rapel project includes the construction of a concrete dam 300 feet high to create a reservoir to store 570,000 acre feet of water; the power house; and about 225 miles of transmission lines to serve Santiago and Valparaiso, the two largest cities in Chile and their surrounding areas. About 25,000 acres of land will be irrigated by water drawn from the reservoir. The central part of Chile which is to be served by the Rapel plant contains the leading centers of indus- trial, commercial and agricultural activity. In 1958 industrial consumption ac- counted for 45% of the total. For many years a shortage of power has made it necessary to restrict consumption in the area. As additional power becomes available, the annual growth of consumption is expected to rise from 7% to about 14% over the next five years,. The area to be served by the Huasco thermal plant needs additional power for its main industry,mining -- principally iron ore, copper and manganese. The high grade iron ore in this part of Chile is a valuable export product and the development of the mines has therefore high economic priority. The existing power plants are now fully loaded and the Huasco plant will provide a firm supply of power for the expansion of mining operations. COLOMBIA Electric Power Loan 317.6 million 25-year 6% loan of January 20, 1960 to Empresa de Energia Electrica de Bogota. Bogota, the capital of Colombia and one of the chief industrial and com- mercial centers, has for many years been subject to restrictions on the use of electricity. The project for which this loan was made will add 117,000 kilowatts - 10 - of generating capacity to the system serving the city and its surrounding area, or nearly double the present capacity. Included in the project is the construc- tion of a darn, a new 66,000-kilowatt power plant, to be known as Salto II, and the addition of an 18,000-kilowatt unit to an existing plant, both of which will further utilize the hydroelectric power potential of the Bogota River. Other works being undertaken are the installation of a 33,000-kiloTwTatt thermal power plant and extensive improvement and rehabilitation of Empresa's transmission and distribution facilities. These projects are part of an expansion program which by 1970 would add about 400,000 kilowatts of new capacity to the 128,000 presently available for the Bogota area. URUGUAY Pasture and Livestock Loan [,7 million 12-year 6% loan of December 30, 1959 to Uruguay The loan will assist in the execution of a pilot program to foster the application of modern techniques in pasture development and livestock produc- tion. This program is of great potential imoortance to the economic development of Uruguay where meat, wool and other pastoral products represent about 58% of the value of agricultural production and 80% of all exports. Under the program technical and financial assistance will be provided to a pilot group of operators of 600 livestock farms with a combined area of about 1-1/2 million acres. Included in the program is improve-ment of pastures and soil fertility by fertilizing and re-seeding; sub-division of the farms by additional fencing to permit controlled rotational grazing; provision of additional water points in sub-divided pastures; conservation of forage for supplemental feeding; and better control of livestock diseases. In three years, the pilot program is expected to result in a ',3-4 million annual increase in the incomes of partici- pating farms and, since nearly all the new production will be sold abroad, ex- port earnings should rise nearly as much. GKE:AL 'SURVEY _IISSIONS "A Public Development Program for Thailand," the report of the Bank's General Survey Mission to Thailand was published in Seotember 1959. Two members of the General Survey M1ission to Libya went to Libya in January 1960 to discuss the draft report with the Government before formal presentation of the report. The General Survey Mission, which spent three months from June to September 1959 in Tanganyika, had by the end of January nearly completed its draft report. A General Survey Mission was in Venezuela from September to December 1959 and at the end of January had begun preparation of its report. FINANCIAL OPERATIONS Earnings and Reserves Net earnings in the seven months ending January 31, 1960 amounted to `34 million, all of Twhich was credited to the Supplemnental Reserve against losses on loans and guarantees. In addition, the Bank's Special Reserve increased by 215 million during that period. On January 31, the total of these reserves amounted to 4469 million. - 11 - Funded Debt The funded debt of the Bank was increased by a net amount of Y58.5 mil- lion during the period, bringing the total outstanding funded debt of the Bank to the equivalent of ,1,963.7 million on January 31. . In this period new bond issues and private placements of Bank obligations amounted to the equivalent of $162.9 million. These consisted of a public issue of 10 million (328 million) of sterling stock and four private placements of obligations totaling $134.9 million, including DM10 million ($2.4 million) of Deutsche mark notes. Outstanding debt was increased a further $24.1 million as a result of the delivery of $11.3 million of bonds which had been subject to delayed delivery arrangements and through the drawing down of an additional $12.8 million equivalent from the Deutsche Mark Note of 1958. Repayment of debt through bond maturities and regular purchase and sinking fund transactions amounted to 41)128.5 million. In addition, the Bank arranged to borrow DM200 million ($M7.6 million) by private placement. Under the agreement, the amount can be drawn down from time to time over 12 months beginning January 31, 1960. The Bank has not yet drawn any amount. Sales of Borrowers' Obligations Private investors participated directly in 11 of the 16 loans that were made between July 1, 1959 and January 31, 1960. These participations -- all without the Bankts guarantee -- amounted to '$24.3 million and took place in connection with loans in Chile, Colombia, India, Italy, Japan, Norway, Pakistan and the United Arab Reoublic. Including these participations, the Dank sold or agreed to sell the equiva- lent of '88 million principal amounts of loans during the seven-month period. At January 31, the total amount of such sales was -$656 million, of which all but $69 million were sold without the Bankls guarantee. A N N U A L M E E T I N G The 1960 Annual Meeting of the Board of Governors will convene in Washington, D.C. on September 26, 1960. A N N E X Increased Subscriptions of Members as of January 31, 1960 Australia 400.0 Austria 100.0 Belgium 450.0 Brazil 373.3 Burma 40.0 Canada 650.0 Chile 70.0 Colombia 70.0 Cuba 70.0 Denmark 173.3 Ecuador 12.8 El Salvador 6.0 Ethiopia 10.0 Finland 76.0 France 1,050.0 Germany 1,050.0 Ghana 30.0 Greece 50.0 Guatemala 8.0 Haiti 15.0 Iceland 2.0 India 800.0 Indonesia 220.0 Iran 67.2 Iraq 15.0 Ireland 60.0 Israel 15.0 Japan 666.0 Jordan 6.0 Korea 25.0 Malaya 50.0 Mexico 173.3 Morocco 70.0 Netherlands 550.0 Norwawy 133.3 Pakistan 200.0 Paraguay 6.0 Peru 35.o Spain 200.0 Sudan 20.0 Sweden 200.0 Thailand 60.0 Union of South Africa 200.0 United Kingdom 2,600.0 United States 6,350.0 Viet-Nan 30.0 Yugoslavia 80.0