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I

Public Disclosure Authorized

CIRCULATING COPY RESTRICTED

S X RTURNED TO REPORTS DAE3 Report No. P-1051

FILE Ot"jOP"
This report is for official use only by thc Bank Group and specifically authorized organizations
or persons, It may not be published, quoted or cited without Bank Groutp authorization. The
Bank Group does not accept responsibility for the accuracy or completcness of the report.
Public Disclosure Authorized

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

REPORT AND RECOMMENDATION

OF THE
Public Disclosure Authorized

PRESIDENT

TO THE

EXECUTIVE DIRECTORS

ON A

PROPOSED LOAN

TO THE
Public Disclosure Authorized

ADDIS ABABA WATER AND SEWERAGE AUTHORITY

WITH THE GUARANTEE OF

THE EMPIRE OF ETHIOPIA

March 28, 1972


INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPIMENT

REPORT AND RECOMMENDATION OF THE PRESIDENT


TO THE EXECUTIVE DIRECTORS
ON A PROPOSED LOAN TO THE
ADDIS ABABA WATER AND SEWERAGE AUTHORITY

1. I submit the following report and recommendation on a proposed


loan to the Addis Ababa Water and Sewerage Authority (AWSA) with the
guarantee of the Empire of Ethiopia for the equivalent of US$10.8 million
to help finance a project for improving and extending the water distribution
system and constructing a first stage sewerage system for the city of
Addis Ababa. The loan would have a term of 25 years, including approximately
5 years of grace, with interest at 7-1/4%per annum.

PART I - THE ECONOMY

2. A report entitled "Current Position and Prospects of the Ethiopian


Economy" (AE-21) was circulated on November 18, 1971. A summary of recent
economic developments was included in my report of December 29, 1971 on a
development credit for the Coffee Processing Project (P-1006). A Country
Data sheet is attached as Annex II.

3. The substantial economic gains achieved by Ethiopia during the


first half of the 1960's were followed by a period of low coffee prices,
low export earnings, and consequent economic recession. The recovery of
coffee prices in 1969 led to overall economic recovery; exports regained
the 1966 level as did government savings and investment. In 1970, the
government set new overall investment and growth targets on the assumption
that the high coffee prices would be maintained for a few years. However,
coffee prices have again declined, although they are still above the 1968
level, and consequently the new investment and growth targets may not be
achieved. Over the next few years, the Government hopes to be able to
finance almost half of public investment from recurrent budget surpluses
and domestic borrowing and must rely on external assistance for the remain-
der. Since a large part of this investment is not suitable for financing
by foreign assistance, it is important that a high proportion of the cost
of the remaining projects is covered by external aid and this will imply
some financing o,f local expenditure.

4s. Ethiopia's external public debt at December 31, 1970 amounted


to $256 million including undisbursed amounts. Annual service payments
on this debt corresponded to about 11.4% of foreign exchange earnings.
Since most of Ethiopia's exports, particularly coffee, face marketing
difficulties, the annual growth of foreign exchange earnings is unlikely
to exceed 3 or l4% so that there is a clear need for assistance on conces-
sionary terms. However, Ethiopia is creditworthy for some additional
borrowing on conventional terms.
-2-

PART II - BANK GROUP LENDING TO ETHIOPIA

5. Since 1950,when Ethiopia was the recipient of the Bank's first loan
in Africa, Ethiopia has received eleven Bank loans totalling US$97.8 million
and eight IDA credits amounting to US$55.2 million. Four loans are fully
repaid and four others are fully disbursed. A summary 'statement of Bank loans,
IDA credits and IFC investments in.Ethiopia at February 29, 1972 is attache'd
as Annex I.

6. Until 1969, the lending program concentrated primarily on building


Ethiopia's infrastructure of roads, power and telecommunications. In addition,
there were two loans to the Development Bank of Ethiopia and one credit for
education. Since 1969 lending has consisted of four credits for agricultural
projects and ;one for education. This shift in emphasis reflects both the
success of our earlier lending- in meeting the most crucial infrastructural
needs, and the increased opportunity for agricultural lending brought
about in part by improved sectoral knowledge and research findings, and the
heavier emphasis on agriculture in the Government's own priorities. While
it is expected that the emphasis of our future.lending will be placed on
agriculture-and supporting activities in manpower development, marketing,
credit, and, transportation, some financing of infrastructure benefitting the
urban areas will continue.

7. Through our lending we have made a significant contribution to the


government's effort at institution building.- The' Imperial Board -of Telecom-
munications of Ethiopia, the Imperial Highway Authority, and the Ethiopian
Electric Light- and Power Authority are three such institutions where our
assistance has.played a major role. The borrower of this proposed.loan,
the Addis Ababa Water and Sewerage.Authority is the result of institutional
reforms based- on studies financed from a technical assistance grant by the
Bank, followed by extensive discussions between the Bank and the Ethiopian
authorities.

8. Other lending proposals for Ethiopia which are likely to be ready


for presentation to the Executive Directors -during calendar 1972 are a
development'finance company project, a road development project, a livestock
project, and an irrigation;project. The .proposed road development.project
is expected to make a significant contribution -to increasing agricultural
output of the regions to be served by the roads. The proposed development
finance company project will.also contain a large component for agricultural
credit.

9. Duz'ing 1966-70 the'.Bank and IDA-were the largest source o'f official
loans, contributing .36% -of -gross inflows. A summary of recent external
assistance to Ethiopia by source and by sectors.can-be seen at Annex II.
IBRD's share of the total debt outstanding excluding undisbursed amounts has
decreased from 34% in 1965 to 31% in 1971, and due to an expected softer
blend in Bank Group lending to Ethiopia-, IBRD's share of total outstanding
debt will continue to decrease.
-3-

10. There are no particular disbursement problems except for the


1963 Credit (35-ET)and the 1968 combined Loan (523-ET) and Credit (11-ET)
for highways. The remaining $700,000 of the 1963 Credit cannot be fully
disbursed until the Government and contractors have concluded arbitration
proceedings arising out of claims concerning completed road construction.
The arbitration proceedings appear to be progressing in an orderly manner.
The delay in disbursement of the 1968 Loan and Credit resulted from slow
progress in the preparation of acceptable tender documents and contractor
prequalification. The small number of responses to the first tender re-
quired a second tender with some changed conditions. Contracts were
finally signed in July and August 1969 and work is now proceeding normally.

11. The International Finance Corporation (IPC) has committed US$3.1


million to the Cotton Company of Ethiopia, US$1.0 million to the Ethiopian
Pulp and Paper Company and US$9.0 million to the HVA Metahara sugar-growing
and milling project. After deducting amounts taken up by sub-subscribers,
3ales from portfolio and principal repayments, the IFC now holds US$10.3
million for its own account.

PART III - THE PROJECT

12. Ethiopia is well endowed with water but the population is widely
dispersed in the country which makes the provision of community water
supplies difficult. The urban population is approximately 10% or about
2.4 million persons, about half of whom live in the two principal cities
of Addis Ababa (850,000) and Asmara (230,000), and the balance in some
250 communities scattered throughout the country. The rate of movement
from rural to urban areas is expected to increase. While the overall
annual rate of increase of population is about 2.5%, the rate for the
urban population is about 6.5%. At this rate the present urban population
would increase by more than two and a half times to around 6 million in
1985.

13. Due to low incomes, poor housing standards and inadequate distri-
bution networks, most of the urban population relies for water on public
taps; only 10% of the houses have private connections. Organized sewerage
and sewage disposal systems are non-existent, except in Asmara. Bank Group
involvement in Ethiopia's water supply and sewerage aervices thus far was
limited to a technical assistance grant for management and feasibility
studies for the proposed project and financing a small water supply project
in Humera under Credit 188-ET for an agricultural development project.
i1. The water supply and sewerage problems of Addis Ababa are bigger
and more urgent than elsewhere. Addis Ababa is the political, economic
and cultural center of Ethiopia. It is also of international importance
as the headquarters of the United Nations Economic Commission for Africa
and seat of the Permanent Secretariat of the Organization of African Unity.
Some 23% of all industrial jobs in the country are in Addis Ababa where
industrial growth has averaged 11% per annum in recent years. Population
growth in the city has been about 6.5% per annum and the average population
density in the built-up areas reaches about 13,000 persons per square
kilometer. As population is expected to continue growing rapidly in the
coming years, the rate of growth of demand for water supply and sewerage
services will increase.

15. In the absence of a sewerage system, natural water courses in


Addis Ababa are polluted by sewage and industrial wastes. Typhoid fever,
infectious hepatitis, dysentery and gastroenteritis, caused primarily by
contaminated water and lack of sanitation, are endemic, and an outbreak
of cholera in the city in 1970 brought a new sense of urgency to solving
these problems. Whereas preventive steps were taken to control the spread
of cholera, a permanent solution can be found only by improving water supply
and sanitation.

16. Following the drought in 1964, Addis Ababa's main source of water
supply, the Gafarsa reservoir, became almost dry and the city suffered from
acute water shortage during 1965-66. The Bank had reviewed the situation
with the Municipality of Addis Ababa in 1966 and recommended the construc-
tion of a small reservoir to relieve the immediate water scarcity, combined
with detailed feasibility studies for longer-term solutions. The Municipality,
however, was persuaded that it would be cheaper to proceed immediately with
the construction of a large reservoir, and decided to award a turn-key con-
tract for the construction of a new reservoir and treatment plant at Lagadadi,
about 28 kms from Addis Ababa. These were substantially completed in Novem-
ber 1970, making available an estimated 50,000 cubic meters per day, to
supplement the daily supply of about 25,000 cubic meters from Gafarsa reser-
voir. With this addition, the water supply would be sufficient to meet the
city's need6 for the next several years. However, because the distribution
system consists mostly of old pipes of small diameter, the supply to consumers
is inadequate and uncertain and there is little control over quality.

17. A Bank Technical Assistance grant of $180,000 was made in July 1969,
to finance feasibility and preliminary engineering studies for a water dis-
tribution and sewerage project in Addis Ababa and management services for
the reorganization of the Water Supply Administration of the Addis Ababa
Mmnioipality. The Eigineering studies were carried out by Bureau Central
d'Etudes pour lea Equipements d'Outre-Mer (BCEOM) of Paris, France. The
studies, completed in November 1970, provide the basis for the proposed
project.

18. The Government submitted a request for a loan for a water supply
and sewerage project in November 1970 and the proposed project was appraised
by the Bank in December 1970. Negotiations were held in Washington in April-
May 1971. The Ethiopian delegation was led by His Excellency Dr. Haile
Giorgis Workneh, the Lord Mayor of Addis Ababa and included Ato Nega Fanta,
General Manager of AWSA. Agreement was reached on the technical aspects of
the project but agreement on a viable financial plan for AWSA could not be
reached at that time (see paragraph 25). Negotiations were therefore
suspended until a plan could be worked out. This has now been made possible
through rescheduling of payments on an existing loan for the construction
of the Lagadadi reservoir. In addition, the Imperial Ethiopian Government
has agreed to ensure availability of all funds required by AWSA for completing
the proposed project and meeting any financial shortfalls. Negotiations were
completed in February 1972.

19. A report entitled "Appraisal of the Addis Ababa Water Supply and
Sewerage Project" (No. PU-68, dated March 24, 1972) is being distributed
separately. A Loan and Project Summary is provided in Annex III.

20. The proposed project includes the construction of the following:-

later Supply

(i) about 100 kms of primary distribution lines;


(ii) about 360 kms of secondary distribution lines;
(iii) three reservoirs; and
(iv) seven pumping stations.

Sewerage

(i) about 150 kms of major and minor sewers; and


(ii) a sewage treatment plant.

In addition, funds for the purchase of six vacuum trucks with accessories,
water meters and certain equipment needed for maintenance, and funds for
engineering services, management assistance to AWSA and training of staff
are included under the project.

21. The water distribution mains will replace some of the old mains,
strengthen parts of the existing network and extend supply to newly developed
areas. With the construction of the new reservoirs and pumping stations,
the supply to the high level zones in the northern part of the city will
improve. It would be possible to make full use of available water from the
Lagadadi reservoir.

22. The sewerage portion of the project constitutes the first phase
of a planned sewerage system which will eventually serve the entire city.
The project will serve a population of 110,000 in the southern part of
the city, encompassing the entire business center and the fastest developing
residential and industrial areas. The sewage collected from these areas
will be conveyed by an outfall sewer to a treatment plant which will be
built on a 20-hectare plot outside the city limits, where sedimentation
followed by biological treatment in oxidation canals will be provided.
The vacuum trucks to be purchased will assist in the collection of liquid
wastes from the unsewered areas. The wastes so collected will also be
treated at the proposed treatment plant. After being adequately treated,
the effluent will be discharged into the Akaki River. The proposed system
would substantially reduce water and soil pollution.
23. On the recommendation of the management consultants (Public Admin-
istration Service of Chicago) financed by the Bank, the former Water Supply
Administration of the Addis Ababa Municipality has been reorganized into the
Addis Ababa Water and Sewerage Authority, which was established in February
1971. It is now responsible for all water supply and sewerage functions in
the city and adjoining developed areas. AWSA is a commercial organization
with share capital and the right to pay dividends, with the Municipality of
Addis Ababa as the sole shareholder. All the powers of AWSA are vested in
a nine-man Board with the Lord Mayor of Addis Ababa as the Chairman and
including the Ministers of Interior, Public Health, Finance and Public Works
(or their representatives). The General Manager of AWSA is the chief executive
responsible for day-to-day operations. AWSA is empowered to borrow money
and fix, impose and collect fees for water and sewerage services. It is
exempted from all taxes and from customs duties on equipment and materials
used for water and sewerage works. AWSA is reasonably well staffed for a
new institution. However, to assist the new authority in its development,
finance is included in the proposed loan for an engineering advisor and for
assistance by management consultants.

24. AWSA would be responsible for project implementation. In order


to avoid delays in the project and in view of the serious problems of water
shortage, AWSA has decided to engage as soon as possible, consultants to
prepare detailed designs and tender documents, evaluate tenders and supervise
construction. Retroactive financing of the foreign exchange costs of consul-
tants' services incurred after January 1, 1972,estimated to be less than
$100,000, is proposed.

25. The principal problem associated with the financing of this project
was the large debt incurred on account of the construction of the Lagadadi
Reservoir. In 1967, Istituto di Credito per le Impresse di Publicca Utilita
(ICIPU), an Italian semi-government financing institution, made a loan of
Eth$25.0 million at 5.9% interest for a term of ten years, of which $20.9
million remained outstanding at the end of FY1971. In order to finance a
cost overrun, ICIPU in 1970 made a second loan of Eth$7.5 million at 7.5%
interest commencing December 31, 1971, of which Eth$7.1 million is presently
outstanding. In spite of having one of the highest water rates in any major
city in Africa, AWSA's operational income could not be expected to cover
debt service on both of these loans in accordance with their original terms.
Further, AWSA may have to make payments arising from the contractor's claims
for an additional Eth$15 million for works on the Lagadadi project, which
have not been certified for payment. These claims are currently the subject
of dispute between the contractor and AWSA. The provisions concerning arbi-
tration in the various contract documents are not entirely clear, and there
are differences between the contractor and AWSA as to their application.
The contractor has placed the matter before an arbitrator nominated by the
International Chamber of Commerce. AWSA has objected to this procedure
and is not participating in it. In the meantime, there have been some
direct discussions between AWSA and the contractor, who has accepted the
proposal of AWSA to negotiate early in April. AWSA has stated that should
these negotiations fail, they would submit the dispute to a panel of arbi-
trators selected in accordance with the provisions of the contract they
consider to be applicable.
-7-

26. The Eth$25 million loan for the Lagadadi project has recently been
renegotiated by the Imperial Ethiopian Government with the Italian Government.
There will be a moratorium on all amounts of principal and interest which
would have been payable over the 5-year period ending June 30, 1976, and
the term of the loan will be extended by 5 years from December 31, 1979 to
December 31, 1984. No rescheduling of the second loan of Eth$7.5 million
is proposed. As noted above, the IEG has agreed to provide funds as necessary
to AWSA to enable it to complete the project and cover any financial short-
falls. These actions, together with the additional'capital to be provided
under the proposed Bank loan, will insure adequate funds for the construction
of the project. Once the project is constructed and the additional revenue
from increased water sales becomes available to AWSA, it would be able to
finance the debt service on the proposed Bank loan as well as its other debt
service obligations without difficulty.

27. During negotiations assurances were obtained that the existing


water rates will no't be changed during the period of construction of the
project without prior approval of the Bank. Assurances were also obtained
that AWSA will establish and maintain charges for its water, sewerage and
sewage collection services sufficient to provide a return on the combined
net value of fixed assets in service of not le8s than 5.0% in FY1976, 6.o%
in FY1977, 7.0% in FY1978, 8.0% in FY1979 and 8.5% in FY1980 and for each
year thereafter. These rates of return were recommended after taking into
consideration the projected cash flow requirements, including provision of
funds to ensure adequate expansion of secondary networks and connections up
to 1981. The internal financial rate of return on the project is estimated
to be between 14% and 23% on the water supply portion and about 11% on the
sewerage portion of the project. The project is expected to be completed
by December 31, 1976.

28. The total cost of the project is estimated at US$13.0 million,


of which US$6.5 million would be the cost of water supply facilities, US$6.2
million the cost of sewerage and US$0.3 million the cost of management con-
sultants' services and training. The proposed Bank loan of US$10.8 million
would finance 50 percent of the cost of civil works to be submitted to inter-
national competitive bidding, estimated to be their foreign exchange compon-
ent, the cost of equipment and pipes to be submitted to international compet-
*itive bidding, the foreign exchange cost of management consultants' services,
training and engineering, and interest and commitment charges on the proposed
loan during construction of US$1.5 million. There is at present no local
manufacturing capacity to produce the pipes and equipment needed for the
project. Local plants for the manufacture of sewer pipes could, however,
be established within a relatively short period and if a local firm should
win a contract based upon international tendering, a maximum of US$1.3 million
worth of pipes could be procured domestically involving some local expenditure
financing, the case for which is made in paragraph 3 above.'
-8-

PART IV - LEGAL INSTRUMENTS AND AUTHORITY

29. The draft Loan Agreement between the Bank and the Addis Ababa
Water and Sewerage Authority, the draft Guarantee Agreement between the
Empire of Ethiopia and the Bank, the Report of the Committee provided for
in Article III, Section 4(iii) of the Articles of Agreement and the text
of a resolution approving the proposed loan are being distributed to the
Executive Directors separately.

30. The draft agreements conform to the normal pattern for loans
for water supply and sewerage projects.

31. I am satisfied that the proposed loan would comply with the
Articles of Agreement of the Bank.

PART V - RECOMMENDATION

32. I recommend that the Executive Directors approve the proposed


loan.

Robert S. McNamara
President

Attachments

Wlashington, D.C.
March 28, 1972
ANNEX I
Page 1 of 2

STATEMENT OF BANK LOANS AND IDA CREDTS TO ETHIOPIA


AT FEBRUARY 29, 1972

Amount (US $ million)


No. Year Borrower Purpose Bank IDA Undisbursed
(eight loans fully disbursed) 56.7 - _
35-ET 1963 Bkpire of Third HighwaV - 13.5 0.7
Ethiopia
84-ET 1966 Ethiopia Education - 7.2 0.2
523-ET 1968 Ethiopia Fourth Highway 13.5 - 4.2
111-ET 1968 Ethiopia Fourth Highway - 7.7 2.4
596-ET 1969 EELPA 1/ Power II (Finchaa) 23.1 - 9.6
605-ET 1969 IBTE 2/ Telecom. IV 4.5 - 3.8
169-ET 1969 Ethiopia Wolamo Agriculture - 3.5 1.9
188-ET 1970 Ethiopia Humera Agriculture - 3.1 2.9
2 4 3-ET 1971 Ethiopia Education II - 9.5 9.5
269-ET 1971 Ethiopia Dairy - 44* 4.4
290-ET 1972 Ethiopia Coffee Processing - 6.3* 6.3

Total (less cancellations) 97.8 55.2


less: Repaid 21.8 -

Total now outstanding 76.0 55.2


Amount sold 6.o
of which was repaid 5.7 0.3
Total now held by Bank and IDA 75.7 55.2

Total undisbursed 17.6 28.3 4.5.9


===e

* Not yet effective

j Ethiopian Electric Light and Power Authority

2/ Imperial Board of Telecommunications of Ethiopia


ANNEX I
Page 2 of 2

Statement of IFC Investments in Ethiopia at February 29, 1972

(Amount US $ millions)
Year Company Loan Equity Total

1965 Cotton Company of Ethiopia I 1.5 1.0 2.5

1966 Ethiopia Pulp and Paper Co. - 1.9 1.9

1968 HVA M1tahara (Sugar) 5.5 3-.6 9.1


1970 Cotton Company of Ethiopia II .4 .2 .6

Total 7.4 6.7 14.1

Less sold or repaid 1.7 2.1 3.8

Now held 5.7 4.6 10.3

Total undisbursed - .2 .2
ANNEX lI
Page 1 of 3

ETHIOPIA

Country Data

Area: 470,000 square miles

Population (1970): 24.3 million


Rate of Growth: 2.5% per annum
Population density: 52 par square mile

Political Status: Imperial Sovereignty

Gross Domestic Product at Current Factor Cost (1969): Eth $3.8 billion
Monetary: Eth $2.1 billion
Non-monetary: Eth $1.7 billion

GDP Per Capita (1969): Eth $160


US $64
Annual Rate of Growth of GDP: 1965-69 1961-65

Total 4.5% 4.4%


Monetary 7.0% 7.5%
Non-mone tary 1 .9% 1 .7%

Percent of GDP (Current prices, 1969):


Agriculture 58.5
Mining, Manufacturing, Construction
and Power 13.5
Trade, Comminication, Banking,
and Insurance 12.3
General Government, Education,
and Health 7.9
Other Services 7.8
1969 1965-69
Investment and Savings
Gross Fixed Investment (% of GDP) 13.6 13.4
Gross Fixed Monetary Investment 18.5
(% of Monetary GDP) 19.3
12.9 11.1
Gross Domestic Savings (% of GDP)
Gross Monetary Domestic Savings
(% of Monetary GDP) 18.0 15.3
Net Imports of Goods and Non-factor 2.3
Services (% of GDP) 0.7
Net Factor Payments Abroad (% of QDP) 0.5 0.3
ANNEX II
Page 2 of 3

Central Government Operations 1969/70 1964/65


(Million Eth$)
Current Revenues 428.8 295.7
Current Excpenditures 384.0 266.6
Current Surplus 44.8 29.1
Capital Expenditures 92.0 40.0
Budget Deficit 47.2 10.9
Foreign Aid (gross) 48.3 10.7
Repayment of Loans 21.0 7.7
Net Foreign Aid 27.3 3.0
Cash Deficit 19.9 7.9

External Public Debt December 1970


- ~~~~~~~~~~~~~~(,Millio6n_US i)
Total Outstarding 255.9
Net of Undisbursed 156.9
Total Debt Service (1970) 20.6
Debt Service as % of Foreign Exchange Earning (1970) 11.4

Money and Credit End 1970 End 196


(llion Eth$-)

Money 427.9 350.1


Time and Savings Deposit 186.6 71.4.
Money and Quasi-Money. 614.5 421.5
Foreign Assets (net) 139.5 214.3
Claims on Government (ne,t) 109.7 47.0
Claims on Private Sector 414.2 193.5
Other Items -48.9 -33.3

Balance of Payments 1970 1965


(Million Eth$)
Merchandise Exports f.o.b. 308 292
Merchandise Imports c.i.f. 429 376
Net Invisible 23. 9
of which Investment Income -19 -9
Current Account Balance
(before transfers) -98 -75

Commodity Concentration,of Exports 1970 1965-70

Coffee 59% 58%

Foreign Exchange Reserves (June 30, 1971): Us$68.1 million = 4.6 months' imports

IMF Position (June 30, 1971):

Quota US$27 million


Drawings None

Exchange Rate: ETH$. = US$2.30 (from.12/18/71)


ETH$ = US$2.50 (bef,ore 12/18/71)
ANNEX II
Page 3 of 3

EXTEMIAL ASSISTANCE TO ETHIOPIA

NET PRIVATE CAPITAL AND PUBLIC LOAN CAPITAL INFLOW BY SOURCE


1962-1970

($ millions)
Total Total %
1962 1966 1966
to to to
1965 1966 1967 1968 1969 1970 1970 1970
IBRD 14.3 7.8 6.3 4.8 6.8 5.6 31.3 23
IDA 5.8 2.7 2.7 4.1 4.6 2.8 16.9 13
U.S.A. 43.4 5.2 4.6 19.3 8.1 5.8 43.0 32
U.S.S.R. 5.9 3.7 3.8 2.1 .3 - 9.9 7
Yugoslavia 4.0 .4 .6 - - - 1.0 -
Italy .7 - 1.1 4.3 5.0 2.0 12.4 9
Germany 3.4 - 2.0 .1 .6 1.4 4.1 3
Sweden .8 - - - 1.6 1.0 2.6 2
Netherlands - 10.9 - - - - 10.9 8
Other 2.5 .4 - .3 .7 2.3 3.8 3

Total 80.8 31.1 21.1 35.0 27.7 20.9 135.8 100

1965

Nst Private Capital

10.4 6.4 2.8 6.4 -2.0 11.2 24.8

PUBLIC LOAN CAPITAL INFLOW BY SECTOR 1962-1970

.______
($ millions)

Total Total %
1962 1966 1966
to to to
1965 1966 1967 1968 1969 1970 1970 1970
Communications
and Power 59.5 22.4 12.9 18.0 12.2 8.4 73.9 54
Industry 13.8 3.6 4.5 4.9, 1.5 2.4 16.9 12
Agriculture 0.3 0.1 0.2 - - 0.3 0.6 -
Health 0.8 0.5 1.5 5.9 8.6 3.8 20.3 15
Education 0.4 - 0.4 2.4 2.2 1.2 6.2 5
DFC 3.0 0.1 - 0.7 1.8 4.2 6.8 5
Other 3.0 4.4 1.6 3.1 1.4 0.6 11.1 8
Total 80.8 31.1 21.1 35.0 27.7 20.9 135.8 100
ANNEX III
Page 1 of 2

ETHIOPIA

LOAN AND PROJECT SUMMALRY

Borrower: Addis Ababa Water and Sewerage Authority

Guarantor: Ethiopia

Amount: US $10.8 million equivalent. The proposed loan would


finance the project's estimated foreign exchange
component and possibly some local expenditure.

Terms: Payable in 25 years with approximately 5 years grace at


714 interest per annum.

Project: Addis Ababa Water Supply and Sewerage Project. Improve-


ments and extensions to the water distribution system
in Addis Ababa and the construction of a new sewerage
system and sewage treatment facilities} provision of
management assistance and technical training.

Cost of Project: (US $ million)


Component Local Foreign Total
Water Supply 1.5 5.0 6.5
Sewerage 2.1 4.1 6.2
Sub-total 3 9.1 12.7

Training and Management


Consultant's Services 0.1 0.2 0.3
Total Project Cost 77 9 13.0
Financing Plan:
Application of Funds

Project expenditure 13.0


Other construction expenditure, o.6
Interest on Bank Loan during
construction 1.5
Increase in working capital 2.0
Total to be financed 17.1
Source of Funds
AWSA net cash generation 6.2
Balance of loans for Lagadadi 01
IBRD loan 10.8
Financing available 17 1
Procurement International competitive bidding
Arrangements:
Annex III
Page 2 of 2
-2-

Estimated (US $ millions)


Disbursements: 1973 197 5 1977
0.2 7.7 26- .

Consultants,: (1) Engineering consultants for detailed engineering


and supervision of construction.

(2) Management consultants for administrative


improvifents land training.
Rate of Return: The internal- financial rates of return are estimated
between 14% and 23% on the water supply portion of the
project and at about 11% on the sewerage portion of
the project.
Appraisal Report: Report No. PU-68 Public Utilities Projects Departinent.
MAP 1

ETHIOPIA
f/ .redt . ADDIS ABABA WATER SUPPLY
AND SEWERAGE PROJECT
EXISTING AND PLANNED
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