World Bank
     ' 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234


              BANK NEWS RELEASE                                              Contact: Ciro Gamarra
              May 12, 1982                                                            (202) 477-8034

·'
,i                                         BRAZIL AND WORLD BANK SIGN TWO LOANS
                                              FOR DEVELOPMENT PROJECTS

                         Representatives of the Government of Brazil and the Wor .d Bank
      signed today the agreements for two Bank loans, totalling $209.1 mfl lionr 'The
      loans assist a power distribution project in less developed regions of the country
      and a rural development project In the State of Mato Grosso.
                         The first loan, of $26.4 million, was approved last March t~ help
      fina~ee a project to improve long-term agricultural development fn nine municipalities
      located In the central and western parts of the State of Mato Grosso. The project
      Is the second phase of the Bank's participation in Brazil's Northwest Region
      Integrated Development Program (POLONOROESTE).
                        The second loan, of $182.7 million, was approved yesterday by
     the Bank's Executive Directors and was made to Centrais Eletricas Brasllefras S.A.
     (ELETROBRAS), the holding and finance company for the Brazilian power sector. The
     loan will help finance the power distribution program of five uttlity companies
     serving the states of Rfo Grande do Norte, Ceara', Pernamb~~~, Parl and Mato Grosso
     do Sul. The program Is expected to provide electricity to about 180,000 low-income
     consumers.
                         The documents were signed by Mr.Antonio Delfim Netto, Minister
      of Planning; Mr. Ernane Galveas, Minister of Finance; General Jose Costa Cavalcanti,
      ~resident of ELETROBRAS; Mr.Masato Yokota, Financial and Economics Director of
      ELETROBRAS; and Mr. Frederico Carlos Soares de Campos, Governor of the State of Mato
      Grosso. On behalf of the Bank, the documents were signed by Mr. Nicolas Ardtto-
      Barletta, Regional Vice President for the Latin American and the Caribbean
      Region.
                        At the signing, General Costa Cavalcantt said that "this ceremony
     Is of great importance to us, for this is the first time, In the history of the
     relationship be~ween the World Bank and the Brazil tan electric sector, that
     ELETROBRAS.has made an appraisal of borrowers, thereby demonstrating the confidence
     (he World Bank has tn the capacity of our Brazilian technicians."     ·
                         The President of ELETROBRAS added that the magnitude of the power
     project''may be seen from the fact that overal 1 cost totals $ 739.3 ml 11 ion and the value
     of the World Bank participation ts      $ 182.7 Ml11ton or 24.7%. It is worthy of mention that
     the other three quarters of the funds come from the.participating electric companies•
     own resources, state governments investment, and local Brazilian bank financing."
                                                                                                ••• I • ••
      NOTE: All money figures are expressed in U.S. dollar equivalents.
                              - 2 -




                  Mr. Ardito-Barletta said that the two loans Indicate "th~
variety of areas In which the Bank and Brazil continue to cooperate." He
added that the Bank has enjoyed a long and f'ruitful association with Brazil's
power sector for more than 30 years.
                                                                                     •
                  Hr. Ardito-Barletta also said that In future the Bank plans to
focus Its lending on rural electrification and distribution subsectors In the line
with the government's objective to Increase the productivity and Incomes of
the low-Income segments of the pc;pulatfon.
                    The Bank's Regional Vice President also pointed out that the
signing of the loan for the rural development project in the State of Mato Grosso,
only five months after the first package of loans for the POLONOROESTE program,
"shows the priority which we attach to actively assisting economic growth of
the agricultural frontier In a way consistent with the need for measures to
protec:t the reg ton• s env t ronment and Amert nd 1an popu 1at tons."




                                                                                     ••



                                                                                     •