BUENOS AIRES POWER I

closed

The proposed loan would finance the foreign cost component of civil works, down-payments on the imported generation equipment which is being purchased after international competitive bidding and financed mainly by suppliers' credits, and imported transmission and distribution equipment and materials. The loan will also finance the foreign currency component of equipment manufactured in Argentina, and up to $10 million of the local currency component of domestically procured items. I consider that this amount of local expenditure financing is justified in this case by the facts cited above regarding the Argentine electrical industry, the improving fiscal performance of the Argentine Government, and the fact that the bank loan would still cover a modest proportion of the total project costs.