ELEC POWER SEC I

closed

The proposed project is based on the 1986-1989 Power Sector Rehabilitation Plan (PSRP) which has been prepared during the last two years by the Government and the Federally-owned Electric Utility Holding Company (ELETROBRAS), with the technical support of the Bank. The sector rehabilitation is to be achieved through several methods. They include reducing the investment program to minimum acceptable levels; following appropriate investment priorities; balancing the composition of the program among generation, transmission and distribution, and increasing substantially the sector's internal cash generation, mainly through tariff increases. Other components to be used to achieve sector rehabilitation involve increasing, through Government contributions, the sector's equity capital; and promoting energy conservation. The proposed loan will help the Government provide the equity contributions required by the sector in 1986. These contributions will be given to the utilities with the most urgent financial needs, on the basis of rehabilitation plans acceptable to the Bank.