Financing of power expansion for developing countries

Vol. 17-6

December 1975

The need for a paper of this kind, which was first identified in the Operations Evaluation Report on Power of 1972, became more pressing when the increases in oil prices precipitated the development by the LDCs of more capital intensive sources of power as alternative to oil-fired thermal plants. The occasion for its preparation was the participation of Mr. Friedmann in (i) a Seminar on nuclear power development in LDCs for utility managers organized by IAEA and the Jamaican Government last June and (ii) a Scientific Afternoon on the same subject at the Nineteenth Regular Session of the General Conference of IAEA. The paper reviews the likely growth of Power/Nuclear installation in LDCs, the associated capital requirements in foreign and domestic currencies, the past and projected sources of these funds - official and private -, and points out the growing proportion of foreign borrowing and investments that would be required by the sector. The urgency of mobilizing sufficient resources is brought up. Intentionally, no implications have been drawn in this article regarding Bank policy - either for lending in the sectors or for assistance in mobilizing resources. These will be dealt with separately in cooperation with those concerned. (author)