RURAL ELECTRIFICATIO

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The project would support NEA's rural electrification program during 1979-80, thereby assisting the Government in meeting its target of bringing electric service to the entire population by 1990. One of the program's main objectives is to improve the standard of living of people in provincial towns and rural areas. The project would provide access to electricity services for some 877,000 families (or 5.3 million individuals) in these areas, help create new job opportunities, and thereby incomes among the rural population. The primary risk relates to the fact that the rural electric cooperatives which are now in operation are still within the five-year grace period of their initial loans from NEA and have therefore not yet established a repayment record. There is likely to be considerable variation in the financial performance of individual cooperatives due to differences in the degree of economic development in the area, the sizes of the cooperatives, and the varying costs of power in different regions of the country. NEA has been successful in ensuring that the cooperatives follow efficient operating procedures, and has the ability to monitor closely the performance of each cooperative.