Document of

The World Bank FILE COPYFOR OFFICIAL USE ONLY

Report No. P-2908-BAR

REPORT AND RECOMMENDATION

OF THE

PRESIDENT OF THE

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

TO THE

EXECUTIVE DIRECTORS

ON A

PROPOSED LOAN

TO

THE BARBADOS LIGHT AND POWER COMPANY LIMITED

WITH THE GUARANTEE OF BARBADOS

FOR A

POWER PROJECT

November 24, 1980

This' document has a redstcted distributln ud may be used by recipients enly in the pelfornce oftheir official duties. Its cotents may not otherwise be disclosed witbout World Bank anthor ccon.

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CURRENCY EQUIVALENTS

Currency Unit = Barbados Dollar (BD$)US$1 BD$2BD$l = US$0.50

FISCAL YEAR

April 1 - March 31

ABBREVIATIONS

BLPC - Barbados Light and Power Company LimitedCARICOM - Caribbean Common MarketCDB- - Caribbean Development BankCDC - Commonwealth Development CorporationCDF - Caribbean Development FacilityCIDA - Canadian International Development AgencyCI Power - Canadian International Power CompanyEIB - European Investment BankIDB - Inter-American Development BankLPG - Liquified Petroleum GasNGC - Natural Gas CorporationPCI - Power Consultants InternationalRBC - Royal Bank of Canada

UNITS AND MEASURES

kW = kilowattMW = megawatt = 1,000 kWkWh = kilowatt hourkV = kilovoltm = meter = 3.28 feetmcf = million cubic feetkm = kilometer = 0.621 mile

BARBADOS FOR OFFICIAL USE ONLY

POWER PROJECT

LOAN AND PROJECT SUMMARY

Borrower: The Barbados Light and Power Company Limited (BLPC)

Guarantor: Barbados

Amount: US$6.0 million equivalent

Terms: Payable in 15 years, including a grace period of 3 yearsat 9.25% interest per annum. In addition, theGovernment will charge BLPC a guarantee fee in the formof a share issue equivalent to the present value of0.75% interest per annum on the outstanding amount ofthe Bank loan.

ProjectDescription: The project is part of BLPC's expansion program to

meet the electricity needs of Barbados up to 1985.The principal objectives of the program are:

(a) expansion of the existing generation, transmis-sion and distribution systems to meet projlecteddemand throughout the period;

(b) improvement of plant efficiency to reducespecific fuel consumption and relative cost pergenerated kilowatt hour (kWh);

(c) improvement of the transmission and distributionsystems by utilization of appropriate design tokeep energy losses at a minimum;

(d) improvement of BLPC's institutional capabilityby developing long range planning for generationand plant; and

(e) undertaking an energy conservation program andmaximizing the use of indigenous energy resourcessuch as gas and bagasse.

The Bank loan would finance the foreign exchange costs of distribution com-ponents that are not being financed by other sources. In addition it wouldfinance the foreign exchange costs of studies for energy conservation,generation expansion and tariff structure. With the purpose of establishingappropriate regulations for determining power rates in Barbados, and ofstreamlining the review process of applications for new rates.! the loan wouldfinance the cost of experts who would undertake to determine appropriateoperating procedures for the Public Utilities Board (PUB) which regulatesutilities in Barbados and to establish criteria for setting power rates. Theproject faces the risk of possible hurricane damage since Barbados is locatedin the Caribbean hurricane belt. To minimize this risk the transmissionsystem will be designed to withstand 120 mile per hour winds..

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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Estimated Cost: (the proposed Bank project)(US$ million equivalent)Foreign Local Total

24 kV Primary Feeder Conversions 1.7 0.6 2.3Distribution Transformers 1.3 0.3 1.6Service Drops & Capacitors 0.4 0.2 0.6Consulting Services & Studies 0.8 0.1 0.9

Total Base Cost 4.2 1.2 5.4Physical Contingencies 0.3 0.1 0.4Price Contingencies 1.5 0.7 2.2

Total Cost 6.0 2.0 8.0

Financing Plan (1980-85 Expansion Program):US$ million %

Investment RequirementsGeneration 58.0 48Transmission 6.1 5Substations 8.7 7Distribution (includes proposed Bank project) 22.8 19Interest during Construction 4.8 4Subtotal 100.4 83Working Capital 21.3 17Total 121.7 100

FinancingSuppliers' Credits 33.3 27Commonwealth Development Corporation (CDC) 11.7 10European Investment Bank (EIB) 7.1 6Caribbean Development Bank (CDB) 6.0 5IBRD 6.0 5Internal Cash Generation 46.7 38Sale of Shares 5.0 4Royal Bank of Canada (RBC) 5.9 5Total 121.7 100

Estimated Disbursements:(US$ million equivalent)

Bank FY81 FY82 FY83 FY84 FY85

Annual 0.4 2.0 1.7 1.3 0.6Cumulative 0.4 2.4 4.1 5.4 6.0

Rate of Return: 13.5% rate of return for BLPC's 1980-85 investment program

Staff Appraisal Report No. 3137b-BAR of November 17, 1980.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

REPORT AND RECOMMENDATION OF THE PRESIDENT OF

THE IBRD TO THE EXECUTIVE DIRECTORS ON A PROPOSED

LOAN TO THE BARBADOS LIGHT AND POWER COMPANY LIMITED

WITH THE GUARANTEE OF BARBADOS

FOR

A POWER PROJECT

1. I submit the following report and recommendation on a proposed loanfor the equivalent of US$6.0 million to Barbados Light and Power Company,Limited with the guarantee of Barbados for a power project. The loan wouldhave a term of 15 years, including three years of grace with interest at 9.25%per annum. The Government of Barbados would charge a guarantee fee equivalentto 0.75% interest per annum charged on the outstanding amount of the loanbringing the effective cost of the loan to BLPC to 10.0%. The Government andBLPC agreed that payment of the fee would be in the form of a share issueequivalent to the present value of the guarantee fee.

PART I - THE ECONOMY

2. A report entitled "Economic Memorandum on Barbados" (No. 2967-BAR),dated May 30, 1980 was distributed to the Executive Directors on June 4, 1980.Another Economic Mission visited Barbados in November 1980, and its report isunder preparation. Annex 1 contains the basic country data.

Background

3. Barbados is among the most densely populated countries in theworld, with a total area of 166 square miles and a population of 254,000.It's relatively high per capita GNP, small size, and geographical isolationhave contributed to the building of a homogeneous, close-knit society, with arelatively equitable income distribution and a long history of constitutionalgovernment. Beautiful beaches and mild weather presently attract almost400,000 tourists annually, providing the single most important contributionto GDP. A well-educated, easy to train and competitively priced labor forcehas served as the base for the rapid development of export-oriented manufac-turing in the last decade. Soil, topography and rainfall patterns are wellsuited for growing sugarcane, which once dominated the economy and continuesto be the main agricultural product.

4. Barbados has a relatively well developed economic infrastructure,with a good road system, jet-accommodating airport, deepwater harbor andpublic utilities which are run efficiently. Pockets of petroleum and naturalgas supply about 14% of domestic energy consumption. Education and healthfacilities are relatively good; however, a shortage of adequate housingaffects the lower income groups. Population growth has traditionally beenlower than 1% per annum because of a successful family planning program and ahigh emigration rate.

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5. The structure of the Barbadian economy has undergone significantchanges in the last twenty years. Agriculture has experienced declining

production levels although, in the last few years, some gains have taken placein the production of sugar, poultry and vegetables. In contrast, tourism (in

the 1960's and 1970's) and export manufacturing (in the 1970's) have expandedrapidly, leading to an average annual growth of real GDP of about 5% during

1966-1979. Presently, tourism and related services account for about one-third of GDP as compared with about 11% in 1960, while agriculture accountsfor only 11% of GDP as compared with 25% in 1960.

6. The rapid growth of tourism and export manufacturing has been due,to a large extent, to the country's long tradition of political and institu-tional stability, and to the adoption by the Government of economic andfinancial policies that have created a favorable investment climate for both

foreigners and Barbadians. Sustained high levels of private investment intourist accomodations have increased the number of tourist beds from about2,000 in the early 1960's to almost 12,000 in 1979. Investment in manufac-turing has also been substantial during the 1970's, particularly in exportrelated areas such as electronic assembly and garments.

Economic Performance - 1974-1979

7. Given its open economy and narrow resource base, Barbados is highlysusceptible to swings in international prices and demand. The 1973 rise inoil prices and ensuing international developments led to low economic growthin 1974 (1%), and to stagnation in 1975. Since 1976, assisted by the economicrecovery of the OECD countries and by increased capacity in tourism andmanufacturing, the economy has performed strongly. Real GDP growth during1976-1979 averaged 6% annually. Economic growth has been particularly good in1978 (6.3%) and 1979 (7.2%). This rapid growth has resulted in a substantialdrop in the unemployment rate from about 25% in 1975 to about 13% in 1979.Inflation has generally followed international price trends.

8. The adverse impact on the balance of payments of external develop-ments in 1973-75 was compensated for by the substantial increases in sugarprices that took place in 1974 and in the first half of 1975. In 1976,however, the large drop in sugar prices led--in spite of increased earningsfrom tourism and manufactured exports--to a record balance of paymentscurrent account deficit of about 11% of GDP. In 1977 the Government tookcorrective monetary and fiscal measures and this, together with a dynamicexport performance, resulted in a significant improvement in the currentaccount during 1977-78. In 1979, increased import prices and volume out-stripped a strong export performance and the current account deficitincreased to 3.5% of GDP as compared with 2.7% in 1978. As a result of theimproved balance of payments performance since 1976, and of moderate amountsof external borrowing, Barbados' net foreign exchange reserves increased by

US$45.3 million during 1977-79. Nevertheless, at only 1.8 months of mer-chandise imports, they are relatively low for a small, highly open economy.

9. As a result of good fiscal management and of improved economicconditions, public finances, which were relatively weak during FY76/77-FY77/78, have improved considerably in the last two years. Public sectorsavings during FY75/76-FY79/80 averaged about 4.4% of GDP.

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Development Strategy

10. Barbados recent rapid economic and export growth has resulted in anincreasing degree of export diversification and in a substantial reduction inthe unemployment rate. Nevertheless, unemployment remains high and theeconomy is still highly vulnerable to external shocks.

11. The Government's development strategy, as outlined in BarbadosDevelopment Plan (1979-83) and in recent governmental statements, seeks to

reduce the unemployment rate, to expand and diversify exports, to developefficient import substitution activities and to promote structural changes in

agriculture and energy use. As in the past, the Government's strategy restsupon the continued and sustained growth of private investment--both foreign

and domestic--supported by a modest (8.5% of GDP) but well-balanced public

sector investment program.

12. Tourism and export manufacturing are expected to continue to be the

leading sectors. Given a continuation of the favorable investment climate,the prospects for continued high levels of private investment in tourism and

manufacturing appear good. In the long run, however, the island's small size

will pose physical limitations to continued tourism expansion. Also, over thelonger term it would be desirable to increase the participation of Barbadian

capital and management in new industrial ventures, both to assure equitablesharing of the benefits of economic growth and to reinforce the development of

Barbadian enterpreneurial skills.

13. The Government's development strategy places increasing emphasis on

the agricultural sector. To promote economic growth and exports, maintainagricultural employment and decrease the food import bill, the Government is

encouraging increased production of non-sugar crops, mainly vegetables, whichhave a substantial demand in Barbados, and which are presently imported. To

achieve this aim the Government has initiated a number of measures such as:

a) promoting mechanization to overcome the prevailing scarcity of rural

labor; b) training of available rural labor; c) providing improved technicalassistance to farmers; d) strengthening institutions and supporting servicesand; e) adopting policies to incorporate unused agricultural lands. The

Government is now preparing an action program to strengthen further the insti-tutions that operate in the agricultural sector, particularly concerning mar-keting, research, extension, irrigation and credit.

14. The Government also intends to promote a 15% increase in sugarproduction--without increasing the acreage devoted to the crop--through: a)greater use of mechanization; b) rehabilitation of sugar factories; and c)improved cultivation techniques. To achieve this objective, the Governmentplans to provide stronger support to the sugar industry, mainly by contri-buting to: a) the industry's own research program; b) to the renewal offarmers' equipment; c) the improvement of farm machinery services to smallfarmers; and d) to the upgrading of existing factories.

15. The Government also plans to promote energy conservation and thedevelopment of alternative energy sources such as solar energy aLnd bagasse.

The Government's energy pricing policy is realistic and a start has been madein: a) establishing an Energy Planning Unit; b) initiating an elementary

energy accounting system; and c) providing minor fiscal incentives for energyconservation. The Government is now considering additional actions that maybe undertaken in the near future to strengthen substantially its energy con-

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servation efforts. Such actions are likely to include: a) a motivationcampaign; b) advisory services to industry, commerce and domestic consumers;c) a strengthening of building codes; and d) improving public transportation.The Government is also studying alternative ways to further promote the deve-lopment of solar energy and the economic use of bagasse.

Public Sector Investment and Financing

16. The composition of the public investment program reflects theGovernment's development priorities. The authorities plan to increase theemphasis of public investment on the directly productive sectors, while con-tinuing efforts toward the improvement of economic and social infrastructure.In this regard, the Government has given priority to a number of projects inthe agricultural sector. Several rural development projects, with substan-tial land tenure reform and irrigation components, have been included in theprogram. They aim at promoting more efficient land use, expanding and diver-sifying agricultural output and providing greater economic security to smallfarmers. With regard to industrial development, the investment programsprovide for the construction of industrial estates which, coupled with

appropriate incentives, should encourage continued private sector investment.At the same time, the Government is contemplating or undertaking pilot studiesof agro- and other industries which are anticipated to have strong backwardand forward linkages. In tourism, Barbados is undertaking the Bank-financedHoliday Village project, which aims to increase hotel capacity and promote theparticipation of local entrepreneurs in the industry. The program also pro-vides for other tourist-related investments, and for investments in trans-portation, energy, education, health and housing.

17. The public sector investment program will complement and supportcontinued high levels of private sector investments. Private sector invest-ment is expected to be particularly high during the period in tourism,industry, agriculture and energy, including the proposed expansion of theBarbados Light and Power Company's generating capacity.

18. To finance the public sector investment program, which is expectedto average about 8.5% of GDP during FY1980/81-FY1984/85, the Government willneed to maintain high levels of public sector savings. To encourage higherproductivity and private savings, the Government has recently reduced per-sonal income taxation by about 1% of GDP but has also increased indirecttaxation by a similar amount. Thus, if current expenditure growth is con-tained, it should be possible for the Government to achieve public sectorsavings of the order of 5% during the period, sufficient to finance about 55%of the public sector investment program and to transfer some resources to theprivate sector to help finance productive investment. Net project relatedcapital inflows are expected to finance another 25%. The remainder of therequired financing would have to be obtained in the form of program-typeassistance; it is expected that donor countries and institutions which areCaribbean Group members will find it possible to provide most of suchassistance.

Growth Prospects, Balance of Payments Outlook and Creditworthiness

19. Mainly as a result of external developments, Barbados' economicgrowth has slowed down in 1980. In spite of a strong performance of sugaroutput and, to a lesser extent, of manufacturing, a sharp drop in the growthof tourism--mainly as a result of a decline in tourism arrivals from North

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America and continental Europe, which has largely offset an increase in

visitors from the United Kingdom and Trinidad and Tobago--will lead to a real

GDP growth of only about 4% in 1980, as compared with 6.9% in 19791.

20. Although sugar--both volume and prices--and other merchandise

exports have shown strong growth, the slowdown in tourist arrivals will reduce

export earnings growth to 24% in 1980 as compared with 30.2% in 1979.

Imports, meanwhile, have continued to grow sharply--about 30%--as a result of

increased oil and other import prices, of high levels of private and public

investment, and of the rapid expansion of credit to the private sector that

has taken place in spite of the establishment of selective credit: controls.

As a result, the current account deficit of the balance of payments should

increase from about 3.5% of GDP in 1979 to about 7% in 1980. Net official and

private capital inflows are estimated to be large enough to finance the

current account deficit and also to allow for an increase in net international

reserves of the order of US$13.0 million.

21. Public savings are expected to decline from 6.2% of GDP in FY79/80

to about 4.5% in FY80/81. This is mainly due to the bi-annual wage increase

in the public sector (30%) which took place this year. That wage increase,

and lesser increases in interest payments and other current expenditures,

will more than offset the expected increase (18%) in current revenues.

According to established policy, wages of public employees are adjusted every

two years, to compensate for increases in the cost of living since the

previous bi-annual adjustment. No further such increase is expected until

FY82/83. Public savings, therefore, should recover somewhat in FY81/82,

provided that the international economic situation does not cause a larger-than-expected decline in export growth.

22. Fluctuations in tourism receipts are notoriously difficult to

predict; if in 1981 tourism does not decrease, manufactured export-s maintain

its rapid growth and sugar production increases as expected, the economy may

well maintain in 1981 a growth rate in the 3.5-4.0% range. These trends would

allow a modest recovery in public savings, but this would not be enough to

avoid some further increase in the current account deficit of the balance of

payments to near 10% of GDP.

23. This situation requires careful monitoring of economic and balance

of payments developments, particularly in view of the uncertainties

prevailing in the international economy. The authorities are aware that

economic and financial conditions in 1981 are likely to be difficialt and are

actively considering the measures that may be required to keep the current

account deficit of the balance of payments at reasonable levels. Given the

good economic management that has characterized Barbados' perforvmance over

the last decade, it should be expected that the Government will act , as and

when needed, to avoid a sharp deterioration of the country's external

position.

Medium-Term

24. Despite the short-term difficulties facing the economy, Barbados'medium-term prospects are favorable. Ongoing and anticipated hotel con-

struction should permit a steady increase in tourist arrivals after economic

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growth resumes in the OECD countries. Given the favorable investment climate,

and the industrial incentives being provided by the Government, the prospects

for the continued growth of export manufacturing are also good. The

Government's development strategy and its increasing emphasis on agricultureand energy conservation should also contribute to favorable growth. If the

execution of this development strategy continues to be accompanied by

adequate monetary and fiscal policies, it should lead to a reduction in the

current account deficit of the balance of payments and to a strengthening of

public finances and net international reserves after 1981.

25. With a public external debt service ratio of only 2.6% in 1979, and

debt outstanding and disbursed amounting to US$65.9 million or 10.3% of GDP at

the end of 1979, Barbados has relatively modest external indebtedness. In the

light of its economic performance in recent years, its favorable medium-term

prospects, and the quality of its economic management, Barbados should be

expected to remain creditworthy for loans on conventional terms.

PART II - BANK GROUP OPERATIONS

26. Barbados became a Bank member in 1974. The proposed project would

be the Bank's fourth lending operation. Bank loans to Barbados total $27.0

million and are for education, tourism, and industrial development. In

addition, Barbados has benefited from the Bank's lending to the Caribbean

Development Bank (CDB). So far, a loan of $2.6 million from IBRD resources

was made by the CDB to Barbados in September 1978 for an industrial develop-

ment project.

27. The Bank has maintained a continuing dialogue with the Government

on its economic policies and development priorities. The Bank organized

a subgroup under the auspices of the Caribbean Group for Cooperation in

Economic Development to coordinate financial and technical aid to Barbados.

At the meetings of the subgroup, multilateral and bilateral donors expressed

substantial interest in financing specific priority projects and in providing

technical assistance to Barbados. In addition, in light of Barbados' balanceof payments difficulties, the country recf,Dved special assistance through

the Caribbean Development Facility (CDF)- from the US, the UK, Canada

and the OPEC Development Fund for $7.0 million, $1.65 million, $1.5 million

and $1.5 million respectively.

28. In the future, Bank's lending to Barbados, either directly or

through the CDB will be mainly in the agriculture and energy sectors. This is

in line with the Government's strategy to sustain adequate rates of economicgrowth and to reduce the mounting bill of import food and energy while

satisfying the needs of the local population, tourism and industry sectors.

1/ The CDF was established during the First Meeting of the Caribbean Group

for Cooperation in Economic Development, held at Bank headquarters, in

June 19-24, 1978. It is a transitional emergency financing facility to

cover local costs and cost overruns of development projects in Caribbean

countries, including Barbados. It is planned to be phased out over a

period of about five years. As a result of the first meeting of the

Caribbean Group, $205.0 million of CDF-type assistance was pledged by

donors. Commitments in the second meeting reached $328.0 million. The

major contributors are the US, UK, Canada, the OPEC Special Fund, and the

European Economic Community (EEC).

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The Government has also requested that the Bank consider providing aStructural Adjustment Loan to Barbados. This request is presently understudy.

29. It is estimated that by 1983 the Bank's share in Barbados' publicexternal debt outstanding and disbursed will be about 13%. - e Bank's sharein the external public debt service will be about 8%.

PART III - THE ENERGY SECTOR

Energy Resources and Use

30. Petroleum provided 91% of primary energy in 1977, with natural gas,liquified petroleum gas (LPG) and bagasse making up the balance. About 14% ofthe total energy supply was provided by domestic crude oil, natural gas andbagasse. The major consumer of primary energy was the Barbados Light andPower Company (BLPC), which used 44% of the total. Transport used a further23%, and industry 19%, while residential use and losses accounted for 14%.

31. Imports of fuel and lubricants in 1978 amounted to about US$36.4million, accounting for 11.5% of the value of total merchandise imports.About US$20.4 million of this amount was for domestic use and UJS$16.0 millionwas for re-export. Barbados has minor production of crude oil and naturalgas. After intense exploration during the 1960s and the early 1970s, aprivate oil company began commercial-scale production of crude oil in 1973 andoutput increased from 59,000 barrels in 1974 to 283,000 barreLs in 1979. Atthe same time, gross output of natural gas, largely associated with oilproduction, rose from 68 million cubic feet (mcf) in 1974 to 547 mcf in 1979.Refining is done by a 3,300 barrel per day refinery owned and operated byMobil Oil Corporation. Marketing companies operating in Barbados areobligated to take products from it, except for aviation and marine fuels. Theretail prices of oil fuels are based on posted prices, the Caribbean marketand local refining costs. Road taxes and duty of about 50% of these costs arelevied on gasoline.

32. All crude oil and associated natural gas produced in Barbados isextracted from 11 wells by General Crude Oil Company, a US Ccmpany which isowned by Mobil. The Government is in the process of forming the NationalPetroleum Corporation to undertake exploration and production in the northerntwo-thirds of the island, which is not covered by General Crude's concession.The state-owned Natural Gas Corporation (NGC) distributes gas, 188 mcf in1977, and owns two gas wells, but it purchases the bulk of its requirementsfrom the General Crude Oil Company, having exclusive rights to all the gas thecompany produces. At present, General Crude Oil Company is venting about 1.0mcf per day of associated natural gas, while NGC's average daily sales areonly about 0.52 mcf per day. Recently, however, NGC has entered into anagreement with BLPC to supply some 1.0 mcf per day of gas, about 9% of BLPC'sfuel requirements, to the Spring Garden steam plant, whose two steam boilershave been fitted with gas burners.

33. Proven reserves of hydrocarbons are relatively small. Those ofcrude oil are estimated at 3.5 million barrels, of which about 30% to 35% maybe recoverable, and those of natural gas at about 10,000 mcf. General Crudehas intensified drilling in the Woodbourne area and in 1978 made a heavy oildiscovery about 3 km south of the Woodbourne field near Charnocks in southernBarbados. The Government, with assistance from UNDP, is now formulating a

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strategy to improve hydrocarbon resource development, including intensifiedseismic work and drilling of deeper wells and is seeking external financingfor this purpose. It is estimated that in the 1974 to 1981 period, about onemillion barrels of crude oil and 1,000 mcf of natural gas will be produced.At current consumption rates, this amounts to 10% and 12%, respectively, ofcommercial domestic demand.

34. Barbados has no hydroelectric potential, and no geothermalexploration has been conducted or is planned. Some locally produced charcoalis used for cooking, and bagasse is used by the sugar industry, which isenergy self-sufficient and, in addition, produces more bagasse than it needs.This excess is now either stockpiled or burned. The Canadian InternationalDevelopment Agency (CIDA) and the Commonwealth Science Council are funding astudy, to be completed by the end of 1980, to measure the quantities andqualities of surplus bagasse available and sugar factory boiler efficiencies.Sugar Factories Ltd. have agreed to supply power to BLPC from the FoursquareFactory, which has a 30% bagasse surplus, for the public network. Thepossibility of increasing the utilization of bagasse for electricitygeneration will be monitored during project implementation.

35. In the field of solar energy, Barbados has significant potential.An estimated 100 solar water heaters are already installed, mainly in privateresidences in various parts of the island, providing about 2,000 barrelsof oil equivalent energy per year. The ongoing Bank-financed HeywoodsVillage Tourism Project includes a solar water heating system that willsupply about 75% of the hot water needs of a 308-room hotel village.

Power Sector Organization and Access to Service

36. The power sector is, for the most part, well organized. Barbados isserved by a single electric utility, BLPC, which generates, distributes, andsells electric energy throughout Barbados. BLPC has an installed generatingcapacity of 96 MW and transmission and distribution facilities whichpresently serve about 67,000 customers, providing service to roughly 90% ofthe total population of the island.

37. BLPC started a rural electrification program in 1964 and during the1964 to 1976 period extended its service to about 7,000 rural families. Inaddition, about 4,700 families received interest-free loans for initial homewiring. BLPC estimates that approximately BD$100,000 per year will be neededin the future for rural electrification. Service is now provided to about80% of rural households in Barbados.

Power Sector Regulation

38. The Public Utilities Board (PUB), established by the PublicUtilities Act of 1955, has jurisdiction over rate making, adequacy of service,the issuances of securities and long-term borrowing for the telephone andpower utilities in the country. All decisions of the PUB are subject toreview, on appeal on points of law by a judge of the High Court of Barbados.The PUB consists of five citizens appointed by the Minister of Agriculture,Food and Consumer Affairs to serve three-year terms. In addition, during aparticular rate hearing, the Minister may appoint two assessors to the Board,one selected in consultation with the utility and one to represent the usersof the utility concerned. These two assessors have all the powers andfunctions of a member of the Board except that of voting in decisions taken by

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the Board. The Board may engage technical experts to advise it; all Board

expenses, including the salaries of its members, are paid by the regulated

utilities.

39. Electricity rates are proposed by BLPC and approved or modified by

the PUB through a process of public hearings modeled on US rate-making proce-

dures. The utility must give the PUB 60 days' notice before putting a new

rate into effect. During this period, the PUB has the option of suspending

operation of the proposed rate for a maximum of six months beyond the proposed

effective date, during which time public hearings must be held. The PUB may

authorize temporary rates during suspension, but the utility is entitled to

recover any shortfall that occurs during the period if PUB's final decision

authorizes higher rates.

40. The last rate case began in April 1979 when BLPC filed an appli-

cation that would have increased its average tariff in July 1979 by 3.2 BD¢

per kWh. The elapsed time from the filing of the rates until the final PUB

decision was slightly over one year. During this time public hearings were

held. A PUB decision granting BLPC only 1.1 BDe¢ per kWh increase in rates was

handed down but was subsequently revised as a result of an appeal by BLPC.The final May 1980 decision gave BLPC a 3.0 BD¢ per kWh increaLse as of July

1979. With the purpose of streamlining subsequent rate reviews, the

Government has hired consultants to undertake a study of PUB's operating

procedures. In addition, a study will be made of criteria for determining

power rates in Barbados. The reports would be prepared under terms ofreference acceptable to the Bank and their conclusions and recommendations

would be reviewed by the Bank (Section 3.02, Guarantee Agreement).

Tariff Structure

41. The May 1980 rate decision involved a change from the declining block

tariff structure employed in the past to one in which commercial and

industrial customers pay a flat rate per kWh consumed and a charge related tokWh demand or installed transformer capacity. Domestic customers now pay more

per kWh the higher their consumption. A thorough study of the costs of

producing and distributing electricity is required to provide a sound basis

for the tariff structure. The proposed loan will finance a marginal costtariff study that will assess the adequacy of the current structure andprovide a basis for further changes in it, taking into account BLPC's

financial requirements and issues relating to subsidies that may be sociallydesirable (Schedule 2, Loan Agreement).

The Role of the Sector in the Economy

42. The provision of an adequate and reliable electric service is

essential to the development of the country's tourism and industrial sectors

which together provide employment for about 40% of the labor force, account

for 24% of GDP, and contribute about 80% of foreign exchange earnings.

Since independence in 1966 until 1979, a period in which Barbados experiencedan average real GDP growth rate of about 5% p.a. electricity consumption grew

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at an average rate of 11.4% p.a. A factor behind the relatively high elec-tricity consumption growth rate has been the strong performance of the manu-facturing and tourism sectors.

Capacity and Demand Balance

43. Peak demand for electricity is estimated to exceed firm capacity in1980 and 1981. In accordance with the expansion program the commissioning ofa first 14 MW low speed diesel unit by the fall of 1982 and a second unit inearly 1983, will bring firm capacity back above peak demand. Late 1982 is theearliest date at which the new plant can be installed. In the interim, extrareliability would be provided by a second turbine for a gas turbine generatorthus reducing the forced outage time for that unit, and by advising customersthat need increased reliability to install standby equipment.

44. The ratio between installed capacity and peak demand is projectedto fall from 1.69 in 1980 to 1.62 in 1984, at which time installation ofanother unit will be required to bring firm capacity above peak demand. Theprecise nature and timing of this unit is to be determined by a generationexpansion study (para. 48).

Sector Investment Program

45. The sector investment program was prepared in 1978 by BLPC withassistance of consultants. Bank staff reviewed the program and recommendedconsideration of medium-speed diesel generators which have been proven to beeconomic in several power systems of similar size in Central America and theCaribbean. The revised expansion program is considered acceptable to theBank. It is expected to be carried out between 1980 and 1985 and focuses onthe following:

(a) expansion of the existing generation, transmission and distributionsystem to meet projected electricity demands;

(b) reduction in fuel consumption per kWh generated;

(c) improvement of the transmission and distribution systems byutilization of economic design to keep energy losses at a minimum;

(d) developing the institutional capability of BLPC for long-termplanning for generation and plant; and

(e) maximizing the use of indigenous energy resources such as gasand bagasse and developing an energy conservation program.

46. To achieve these objectives BLPC will undertake a series of invest-ments including:

(a) the installation of two low-speed diesel generating units of 14MWeach in 1982 and 1983 and, subject to confirmation by furtherstudies, a third 14 MW unit in 1985 and commencement of work on afourth 14 MW unit to be completed in 1987;

(b) the construction of 10 km of 69 kilovolt (kV) transmission lines,the construction of two 69/24 kV substations, the acquisition ofone mobile substation, and modifications to existing 24 kVsubstations;

- 11 -

(c) the conversion of about 402 km of 11 kV primary feeders to 24 kV;

(d) expansion of the distribution network; and

(e) studies for generation expansion, tariff structure, and energy con-servation.

47. The total cost of this investment program in the 1980-35 period isestimated at US$121.7 million in current prices, of which about US$68.0million equivalent is estimated to be in foreign exchange. The financing planfor the 1980-85 program is described in para. 58.

Sector Development

48. Although the Government is encouraging continued development andutilization of domestic crude oil and 'natural gas, as well as use of renewableenergy resources, the country is likely to continue to depend on imports forabout 80% of its energy supply in the foreseeable future. Consequently,serious economic problems could arise in the future if world-wide oil pricescontinue to increase. the proposed project includes financing for studies toinvestigate long-range power generation and fuel options, and electricityconservation methods (Schedule 2, Loan Agreement).

PART IV - THE PROJECT

The Borrower

49. The Borrower would be the Barbados Light and Power Company Limited(BLPC), which supplies electricity throughout Barbados.

50. Prior to June 1977, 66.7% of BLPC's ordinary shares were held byCanadian International Power Company (C.I. Power), which, in turn, was 50%owned by the Baldwin-United Corporation, a US corporation. In June 1977, C.I.Power was liquidated and its assets distributed to the shareholders, with theBLPC shares being transferred to a liquidating trust administered by PowerConsultants International, a wholly owned subsidiary of Ba]Ldwin-United.BLPC's ordinary shares are presently held 67% by C.I. Power Liquidating Trust,24% by local non-government investors, 7% by Government and 2% by otheroverseas investors. A sale by C.I. Power in December 1980 of 500,000 of itsshares to local investors together with an issue by BLPC of one million newshares in Barbados would increase local ownership of BLPC to 53% (para. 59).

Organization and Management

51. BLPC is an efficient and well organized company with competentmanagement and technical personnel. It is governed by a Board of Directorscomposed of 12 members, one of whom is the Managing Director. The Government,the private sector and the principal shareholder are represented on the board.The managing director has four officers who report directly to him and areresponsible for the principal activities of the company's operations. BLPC'stotal staff numbers 428 and it has been able to maintain motivated andcompetent personnel at all levels. The customers per employee ratio of 154 in1979 is second only to Colombia's 160(sector average) for seventeen countriesin the Latin American and Caribbean region for which data is available. The

- 12 -

high customer to employee ratio is due, in part, to the fact that BLPC'sprocurement and system planning services are provided by C.I. Power ServicesLtd. In addition, BLPC receives management services from Power ConsultantsInternational (PCI) a subsidiary of Baldwin United Corporation. Constructionand erection of facilities is normally carried out by BLPC staff, except formajor works such as new power plant or transmission lines, where local andforeign contractors are employed.

Financial History and Present Position

52. BLPC's recent financial history is characterized by a period ofheavy investment during 1973-76, when the 40 MW Spring Garden Steam plant wasinstalled, and a period of relatively light investment, mainly in distri-bution works, during 1977-79. Investment requirements during 1980-85 willagain increase because of the need for new plant. The financial health of thecompany during the first half of the 1970s was good, with rates of return onpartially revalued assets of between 7% and 8%. The existence of a fuelclause in the tariff schedule helped insulate the company against the effectsof the 1973-74 increase in oil prices. A rate increase approved by the PUB inMarch 1974 contributed 26 percentage points of the 85% increase in revenueduring 1973-74 and permitted increased self-financing of the steam plant.During 1973-76 BLPC's net internal cash generation averaged 39% of invest-ment. By 1976 the rate of return had declined to 5.6% on partially revaluedassets and earnings per share were beginning to fall.

53. The company's financial position deteriorated gradually during the1977-79 period while the net internal contribution to investment wasnegative. From 1974 to 1978, while the average cost of fuel increased by 10%annually and domestic inflation over the period totaled 50%, average BLPCrevenue per kWh rose by only 12% as a result of a reduction in the basic tariffin 1977. The growing scarcity of internal funds resulted in the postponing ofsome investment in distribution. In February 1978, BD$5 million capital wasraised through the sale of 500,000 redeemable preference shares and 500,000ordinary shares, of which the Government acquired 300,000 ordinary sharesthrough the National Insurance Board. In addition, BLPC's overdraft with theRoyal Bank of Canada rose steadily from BD$865,000 at the end of 1974 toBD$17.3 million at the end of 1979. The overdraft has, thus, functioned aslong-term debt without an amortization schedule. By 1979 the Company'searnings and cash flow position had become critical. During both 1978 and1979 dividends were greater than net income at a time when the company wasfacing the need to undertake the proposed investment program. As a result ofthe May 1980 tariff increase, it is estimated that BLPC will earn a rate ofreturn on annually revalued net fixed assets of over 6.0% in 1980 and 1981.Further rate increases will be required in 1982 and beyond if BLPC's financialhealth is to continue to improve and to generate sufficient cash to finance asignificant portion of its investment program. It has been estimated thatBLPC would be required to achieve a rate of return of at least 8% in 1982 andthereafter (Para. 61).

The Project

54. The Bank project would consist of those components of the distri-bution works not readily identifiable as individual projects and for whichBLPC is unable to obtain alternate financing on reasonable terms. Thesecomponents are, essentially, primary distribution feeders, distributiontransformers, capacitors and service connections. It also includes the in-

- 13 -

stallation of such equipment, and the development of an energy conservationprogram and a study for generation. In addition the loan would finance thecost of experts who would undertake to determine appropriate operating pro-cedures for the PUB and establish criteria for setting power rates and tariffstructures in Barbados. The proposed loan would finance the foreign exchangecomponent of the project and any local costs that may be required to undertakethe studies related to the PUB operating procedures and criteria for powerrates. Negotiations for the proposed loan took place in Washirngton, D.C., onNovember 4-7, 1980. The BLPC's delegation was led by Mr. F. McConney, BLPC'sManaging Director. The Government's delegation was led by Mr. C. Skeete,Permanent Secretary, Ministry of Finance. A report entitled "'Staff AppraisalReport - Barbados Power Project" (No. 3137b-BAR dated Novembetr 17, 1980) isbeing distributed separately. Annex III contains a timetable of key events inprocessing the project and a description of the special conditions of theproposed loan.

The Bank's Involvement in the Project

55. The Bank's involvement in the preparation of BLPC's investment pro-gram and its participation with a small loan in its financing enabled BLPC toattract a substantial portion of the required financing for the program atbetter terms than if the Bank was not involved in the project. In addition,it would improve the regulatory mechanism for utility rates in Barbados byundertaking to finance studies and services of experts to set up appropriateoperating procedures for the PUB and criteria for setting electricity ratesand tariff structure in Barbados (para. 40). It will assist in improving thefinancial health of the sector by requiring that a reasonable rate of returnon revalued net fixed assets is generated by BLPC. A study of generationexpansion would support the exploration of methods to maximize the utiliza-tion of indigenous sources of energy such as vented gas and bagasse (paras. 32and 34).

Project Implementation

56. BLPC's staff with assistance from its consultants will superviseengineering designs and specifications for equipment and works. In addition,they would prepare bidding documents, evaluate bids and award contracts forprocurement of project items. Equipment installation would be performed byBLPC's own staff, who have extensive experience in 24 kV wood pole lineconstruction and the installation of distribution transformers, capacitorsand customer service connections. The studies will be prepared by consultantsunder terms of reference acceptable to the Bank. The project is scheduled tostart in January 1981 and to be completed by December 31, 1984.

Project Cost and Financing

57. The total cost of the project has been estimated at US$8.0 millionin current prices, of which US$6.0 million, or 75%, is expected to be inforeign exchange. The base costs were estimated by BLPC and its consultantson the basis of prices prevailing in 1979 and found to be reasonable by theBank. Engineering and administration costs for the project are included inthe base estimates. An 8% physical contingency has been added to both foreignand local base costs. The studies to be performed as part of the projectwould require about 75 staff-months of consultant services and have anestimated total cost of US$0.9 million. The average consultant cost permonth, including fees, international travel and subsistence, is US$11,500.

- 14 -

Allowance for price increases have been incorporated in the cost estimateusing the following annual percentages: foreign costs - 10.5% for 1980, 9.5%for 1981, 8% for 1982 andt/% thereafter; local costs - 15% for 1980, 14% for1981 and 13% thereafter. - The Bank loan would finance the foreign exchangecosts of the project and any local costs thay may be required in connection tothe PUB operating procedures and criteria for power rates studies.

Financing Plan for the Investment Program

58. The financing plan of the proposed program is summarized below:

Financing (1980-85 Investment Program) US$ million _

Proposed IBRD Loan 6.0 5Caribbean Development Bank (CDB) 6.0 5Commonwealth Development Corporation (CDC) 11.7 10European Investment Bank (EIB) 7.1 6Suppliers' Credits 33.3 27Royal Bank of Canada (RBC) 5.9 5Sales of Shares 5.0 4Internal Cash Generation 46.7 38

Total Financing 121.7 100

The terms of financing are as follows: IBRD loan, 15 years including 3 yearsgrace at 9.25% interest per annum; CDB loan, 15 years including 3 years graceat 10.5% interest per annum; EIB loan, 15 years including 3 years grace at7.25% interest per annum; CDC loan, 15 years, including 3 years grace at 9.5%interest per annum; Suppliers Credit, 12.5 years including 2.5 years grace at10.5% interest per annum; and Royal Bank of Canada, 10 years, no grace periodat 11% interest per annum. In addition, the Government would charge BLPC aguarantee fee on the IBRD, CDB and EIB loans for which it will provide itsguarantee. The guarantee fee would be equivalent to 0.75% interest per annumcharged on the outstanding amount of these loans. It has been agreed thatpayment of the guarantee fee will be in the form of a share issue equivalentto the present value of the guarantee fee.

59. The BLPC has agreed with Gotaverken Company of Sweden on thepurchase of two 14.0 MW low speed generators to be commissioned by the fall of1982. Regarding the sale of shares, and with the purpose of increasing localownership in BLPC, the borrower agreed to sell BD$10.0 million worth ofshares--2 million shares in two issues of one million each--in the Barbadosmarket (para. 50). The first issue will be offered in December 1980 and thesecond would be required by 1983 (Section 5.09, Loan Agreement). TheGovernment agreed to acquire any shares of these two issues that may not bepurchased by local investors (Section 4.06, Guarantee Agreement). The com-pletion of the sale of shares of BD$5.0 million, the approval of the loans byCDB, EIB, CDC, and RBC, the signing of a contract acceptable to the Bank withthe suppliers of the two low speed generators, and the submission of thecompany's financing plan for 1981 acceptable to the Bank, would be a conditionof loan effectiveness (Section. 8.01, Loan Agreement). BLPC agreed, uponrequest by the Bank, to issue as security for the Bank loan, additional

1/ Local cost index based on BLPC's estimate of local construction andlabor cost price trends.

- 15 -

debentures under an existing Debenture Trust Deed ranking pari-passu with

other lenders covered by the Debenture Trust Deed. BLPC would bear theforeign exchange risk on all loans.

60. The financial forecast indicates that: (i) BLPC would earn more

than the minimum 6% rate of return in 1981, and 8% in 1982 and in subsequentyears (Para 53); (ii) BLPC's overdraft would be reduced from BI)$17.2 million

at the end of 1979 to BD$2.7 million by 1982; and (iii) BLPC maintains itsconsistent record of dividend payment and is able to raise US$5.0 million

through the sale of shares in 1980 and 1983. Under these conditions, the debtservice coverage ratio would rise from a low of 1.3 in 1978 and 1979 to an

average of 2.0 in 1980-85, while the current ratio would rise from 0.7 in 1979to 2.1 in 1983 when the overdraft is eliminated. BLPC agreed to pay dividendsout of retained earnings and that the payment of such dividends would not

affect the execution of the proposed investment program. In this connection,it will submit to the Bank for its review no later than two months before the

end of each fiscal year, its investment program and proposed financing planfor the following fiscal year (Section 5.07, Loan Agreement). In addition,BLPC agreed to obtain Bank approval before incurring further debt if its

projected debt service coverage ratio, excluding the overdraft facility,falls below 1.5. The Bank's approval would also be required prior to raisingits overdraft limit above BD$10.0 million (Section 5.07, Loan Agreement).With the purpose of increasing its liquidity, BLPC agreed to maintain cashreserves less its overdraft at the end of 1981, 1982 and thereafter equivalentto 5% and 9% respectively of annual fuel and cash operating expenses of theprevious 12 months (Section 5.05, Loan Agreement).

61. The May 1980 tariff increase, including the surcharge of 1.88 BD¢per kWh to be applied until May 31, 1981 (Para 40), resulted in an averagebasic tariff in 1980 of 14.1 BD. per kWh. In addition, a fuel charge is addedto the basic tariff to compensate BLPC for increase in fuel costs. During

1981 the Government would undertake to improve PUB's operating procedures, toestablish criteria for determining power rates in Barbados and to streamline

the process of evaluating applications for tariff increases. In 1982, andthereafter, BLPC would need to achieve an 8% rate of return (Para. 53), if itis to be able to generate sufficient internal resources to make an acceptable

contribution to investment (Section 5.04, Loan Agreement). For this purposea 19% tariff increase would be required in 1982 and a 11% in 1983. TheGovernment agreed not to take any action which would interfere with BLPC inmeeting its obligation in connection with this covenant and olther covenantscontained in the Loan Agreement (Section 4.02, Guarantee Agreement). The neteffect of the tariff increases discussed here would be to increase the average

total tariff from 23 BD¢ per kWh in 1980 to 27BD¢ in 1985 in constant 1979prices. This would assume that the fuel clause component in the-tariff tocompensate for variation in fuel costs will be maintained (Section 5.06, LoanAgreement).

Procurement and Disbursement

62. Procurement of goods and services, other than consultants'services, to be financed by the Bank would be through international compe-

titive bidding (ICB) in accordance with the Bank's guidelines except forequipment which cannot be grouped into packages of at least US$50,000 equiva-

lent which would be on the basis of local competitive bidding procedures that

are acceptable to the Bank. A maximum of US$250,000 in the aggregate would be

- 16 -

procured in this manner. In the case of ICB, domestic manufacturers tenderingunder international procedures would receive a margin of preference of 15% ofcost or the applicable customs duty, whichever is lower, and regional pre-ferences for other members of the Caribbean Common Market (CARICOM) would belimited to 15% of c.i.f. price of non-regional goods or the difference in theamount of tariffs payable by CARICOM and non-CARICOM suppliers, whichever islower. Disbursements from the loan account would be made for 100% of foreignexpenditures for imported equipment, materials and consultant's services forthe generation planning, energy conservation and marginal cost tariffstudies. The entire cost of consultants for the studies of criteria forsetting power rates and the operating procedures of the PUB, estimated atUS$150,000, would be covered by the Bank loan.

Investment Program Rate of Return

63. As the project consists of a certain portion of the 1980-85 invest-ment program and its effects cannot be isolated from those of the othercomponents of the program, an incremental rate of return was calculated forthe entire progr fT. In this respect benefits are taken as the growth in salesduring 1981-86 - valued at the yearly average tariffs. Since benefits someasured record only payments, rather than willingness to pay, they may beassumed to understate the full economic returns of the investments. Thebenefits are compared with the cost of the investment for the period, shown inPara. 46, except that the cost of the fourth low speed diesel unit to becommissioned in 1987 was excluded since it will serve growth only in 1987 andlater. Fuel cost attributable to the program is the growth in fuel costduring the 1981-86 period. The incremental investment program rate of returncalculated on this basis is 13.5% and compares favorably with the estimatedopportunity coj> of capital in Barbados (10%). A sensitivity analysis showsthe following:-

Rate of Return

Base case 13.5%Benefits up by 10% 16.3%Benefits down by 10% 10.4%Investment costs up by 10% 12.2%

The rate of return is very sensitive to small variations in benefits asa result of the significance of annual fuel costs in relation to investmentcosts.

Risks

64. The project faces the risk of possible hurricane damage sinceBarbados is located in the Caribbean hurricane belt. To minimize this riskthe transmission system will be designed to withstand 120 mile per hour winds.

1/ It is expected the increase in capacity to the system provided by the1980-85 program would be put to full use during the 1981-86 period.

2/ Sensitivity analysis of variations in fuel cost was not carried outsince these variations would, in fact, be compensated by variationsin the average tariff. However, such variations could affect salesgrowth.

- 17

PART V - LEGAL INSTRUMENTS AND AUTHORITY

65. The draft Loan Agreement between BLPC and the Bank, the draft

Guarantee Agreement between Barbados and the Bank, and the Report of the

Committee provided for in Article III, Section 4(iii) of the Articles of

Agreement are being distributed to the Executive Directors separately.

Special conditions of the project are listed in Annex III, Section III.

Conditions of loan effectiveness are the completion of a sale of BD$5.0

million worth of the company's shares, the approval of the loans from the

cofinancing institutions, the signing of a contract acceptable to the Bank for

the purchase of the two low-speed 14 MW generators and the furnishing of the

company's 1981 financing plan satisfactory to the Bank.

66. I am satisfied that the proposed loan would comply with the Articles

of Agreement of the Bank.

PART VI - RECOMMENDATION

67. I recommend that the Executive Directors approve the proposed

loan.

Robert S. McNamara

Attachments

November 24, 1980

- 18 -ANNEX I

BARBADOS - SOCIAL INDICATO DATA SRET Page 1 of 5

8U3ADQS REFERENCE GROUPS (WEIGCTED AVERaGESLAND AREA (THOUSAND SO. KM. )_ -___ST AUI=NT ESTIMATE_

TOTAL 0.4AGRICULTURAL 0.37 MSDT RCDNT MIDDLE INC(KE MIDDLE INCOME

1960 b 1970 lb ESTIMATE /b LATIN AMRICA & CARIBBEAN EUROPE

GNP PER CAPITA (USS) 400.0 950.0 1960.0 1384.1 2381.1

ENERGY CONSUMPTION PER CAPITA(KILOGRAMS OF COAL EUUIVALENT) 377.0 1100.0 1100.0 1055.9 1641.4

POPULATION AND VITAL STATISTICSPOPIULATION, MID-YEAR (MILLIONS) 0.23 0.24 0.25URBAN POPULATION (PERCENT OF TOTAL) 35.5 37.0 33.6 63.4 53.9

POPULATION PROJECTIONSPOPULATION IN YEAR 2000 (MILLIONS)STATIONARY POPULATION (MILLIONS)YEAR STATIONARY POPULATION IS REACHED

POPULATION DENSITYPER SQ. KM. 536.0 555.0 625.0 28.1 77.2PER SQ. Ml. AGRICULTURAL LAND 624.0 646.0 675.0 81.7 129.5

POPULATION AGE STRUCTURE (PERCENT)0-14 YRS. 38.3 37.0 .31.2 41.4 30.6

15-64 YRS. 55.3 54.7 59.2 54.7 61.165 YRS. AND ABOVE 6.4 8.3 9.6 3.9 8.2

POPULATION GROWTH RATE (PERCENT)TOTAL 0.9/c 0.3/c 0.6Lc 2.7 1.6URBAN 1.2 1.0 i.3 4.1 3.3

CRUDE BIRTH RATE (PER THOUSAND) 30.0 21.0 18.5 34.8 22.8CRUDE DEATH RATE (PER THOUSAND) 10.0 9.0 7.7 8.9 8.9GROSS REPRODUCTION RATE 2.3 1.4 1.1 2.5 1.5FAMILY PLANNING

ACCEPTORS, ANNUAL (THOUSANDS) .. ..USERS (PERCENT OF MARRIED WOMEN) .. ..

FOOD AND NUTRITIONINOEX OP FOPD PRODUCTION

PER CAPITA (1969-71-100) 103.0 107.0 75.0 106.9 113.1

PER CAPITA SUPPLY OFCALORIES (PERCENT OF

REQUIREMENTS) 108.0 120.0 129.0 107.4 125.3PROTEINS (GRAMS PER DAY) 65.0 78.0 82.8 65.6 91.0

OF WHICH ANIMAL AND PULSE 48.0 48.0 55.0 33.7 39.6

CHILD (AGES 1-4) MORTALITY RATE 4.0 4.0 3.0 8.4 4.3

HEALTHLIFE EXPECTANCY AT BIRTH (YEARS) 62.7 67.6 71.0 63.1 67.8INFANT MORTALITY RATE (PERTHOUSAND) 60.0 46.3 28.0 66.5 55.9

ACCESS TO SAFE WATER (PERCENT OFPOPULATION)

TOTAL .. 98.0 100.0 65.9URBAN .. 95.0 100.0 80.4RURAL .. 100.0 100.0 44.0

ACCESS TO EXCRETA DISPOSAL (PERCENTOF POPULATION)

TOTAL .. 100.0 100.0 62.3URBAN .. 100.0 100.0 79.4RURAL .. 100.0 100.0 29.6

POPULATION PER PHYSICLAN 2800.0/d 1890.0 1459.0 1849.2 1030.1POPULATION PFR NURSING PERSON 650.0 430.0 233.0 1227.5 929.4POPULATION PER HOSPITAL BED

TOTAL 170.0 98.0 113.0 480.3 289.7URBAN .. 70.0 81.0RURAL .. 143.0/e 168.0/5e

ADMISSIONS PER HOSPITAL BED .. 9.0 11.0 .. 17.0

HOUS INGAVERAGE SIZE OF HOUSEHOLD

TOTAL 4.0 3.9LRBAN .. ..RIRAI. .. ..

AVERAGE NlUIBNR OF PERSONS PER ROOMTOTA,. 1.2 1.0URBAN 1.2 1.0RURAL .. ..

ACCESS TO ELECTRICITY (PERCENTOF' DLEI,IN,CS)

TOTAI .. 69.0SRRAN .. ..

ER41A .. .. . ..

- 19 - ANNEX I--- ~~~~~Page 2 of 5

BARBADOS - SOCIAL INDICATORS DATA SHEET

BARBADOS REFERENCE GROUPS (WEIGHTED AVERA5S- MOST RECENT ESTIMATE)

MOST RECENT MIDDLE INCOME MIDDLE INCOME

1960 /b 1970 /b ESTIMATE /b LATIN AMERICA & CARIBBEAN EUROPE

EDUCATIONADJUSTED ENROLLMENT RATIOS

PRIMARY: TOTAL 108.0 103.0 112.0 99.7 105.9MALE 116.0 104.0 111.0 101.0 109.3

FEMALE 102.0 101.0 114.0 99.4 101.0

SECONDARY: TOTAL 39.0 68.0 83.0 34.4 64.0

MALE 46.0 67.0 80.0 33.5 7i.1l

FEMALE 33.0 69.0 86.0 34.7 56.9

VOCATIONAL ENROL. (X OF SECONDARY) 5.0 7.0 7.0 38.2 28.8

PUPIL-TEACHER RATIOPRIMARY 40.0 33.0 .. 30.5 23.4

SECONDARY 29.0 27.0 20.0 14.5 26.1

ADULT LITERACY RATE (PERCENT) 94.0 99.0 99.0 76.3

CONSUMPTIONPASSENGER CARS PER THOUSAND

POPULATION 35.0 82.0 97.3 43.0 84.6RADIO RECEIVERS PER THOUSAND

POPULATION 152.0 372.0 526.0 245.3 192.2TV RECEIVERS PER THOUSAND

POPULATION .. 67.0 194.0 84.2 118.5NEWSPAPER ("DAILY GENERALINTEREST") CIRCULATION PERTHOUSAND POPULATION 85.0 90.0 98.0 63.3 53.0CINEMA ANNUAL ATTENDANCE PER CAPITA 7.0 5.0 4.9 .. 5.7

EMPLOYMENTTOTAL LABOR FORCE (THOUSANDS) 90.8 89.8 109.0

FEMALE (PERCENT) 41.8 40.0 41.0 22.2 30.4

AGRICULTURE (PERCENT) 26.0 17.0 10.0 37.1 37.0INDUSTRY (PERCENT) 27.0 28.0 25.0 23.5 29.3

PARTICIPATION RATE (PERCENT)TOTAL 39.6 37.8 40.0 31.5 40.9

MALE 51.3 48.3 50.3 48.9 S5.9FEMALE 30.2 28.4 30.6 14.0 >6.2

ECONOMIC DEPENDENCY RATIO 1.2 1.2 0.9 1.4 1.0

INCOME DISTRIBUTIONPERCENT OF PRIVATE INCOMERECEIVED BY

HIGHEST 5 PERCENT OF ROUSEHOLDS .. 19.8/4fHIGHEST 20 PERCENT OF HOUSEHOLDS .. 44. 0...LOWEST 20 PERCENT OF HOUSEHOLDS .. 6.8/fLOWEST 40 PERCENT OF HOUSEHOLDS .. 18.6/f

POVERTY TARGET GROUPSESTIMATED ABSOLUTE POVERTY INCOMELEVEL (US$ PER CAPITA)

URBAN .. .. 484.0RURAL .. .. 484.0 190...

ESTIMATED RELATIVE POVERTY INCOMELEVEL (US$ PER CAPITA)

URBAN .. .. 518.0 474.0RURAL .. .. 518.0 332.5 385.0

ESTIMATED POPULATION BELOW ABSOLUTEPOVERTY INCOME LEVEL (PERCENT)

URBAN .. .. 23.0RURAL .. .. 23.0

Not availableNot applicable.

NOTES

/a The group averages for each indicator are population-weighted arithmetic means. Coverage of countriesamong the indicators depends on availability of data and is not uniform.

/b Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970. between 1969

and 1971; and for Most Recent Eatimate, between 1974 and 1978.

/c Due to migration, population growth rate is lower than rate of natural increase; /d 1962; /e Governnent

hospital establishments only; /f Income recipient.

April, 1980

- 20-- ANNFYXI

Page 3 of 5

Mau Tb. adjust*d grou avra. fo h ladleato t or. ciet'eibe geematOfc mama. excluding tb. Ostorm Cal.e. of the toletcteat thNW mat

popuatedcounry I *ac gru. Cora. f re.etti.o augr the oiao. dePcmda ca .otlability of date ead te nact. safom. tee to lack Of datagrop aoae o Capital $Lurpiac Oil fape'tora sead iaicatoo. of ac.C.. to water and .cretat disposal, heed.

0s. lacemi digtrtbqai. mip.tp

.A.pl. pep.latto-unight.d eomitrIc wasa without thte*nliotf sellsc values.

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61LILouitarcl - HOne Vaant..*ti-.n of 6,cg,oot ..tIclmaa wood toworrtily ... fildsbl Ln public cod pto.ste g.aerl sad sp-tialigad hospital cat go-or p.raenatiy for t,ope. peatt.0, mrkst act kitchen garde"a of to htbilittatoc.. te...L.- k-pit.le -t aet.blishekt. peoneaotiy atajffd by~I. Ialw at lease a.. phy.tuct.. Lt.cbliehaa.t. providiag polacipsily e.stedial

tata e:1ta not 1-Incudd. Aotal heopical.. howavet. Iaclude health ct amtd-cm PR CAITA iSt) -C,1 P., reFit. etct.at Cennaat oarat prIC"., teC at.,at p--.0etl Ct.fl.d by . phy.11Ia, (but by e Medical a.-cetitd by cass tCoantalon .thot cc W'o1ld benk At1ca (1975-77 basis); ltet nu .3.1mtsfe. sit.) whIeh offer le-patlaut accacaedgtioa OI

iVho, 1975,. ast 1977 dat.. Pro-Ids a limIttd lease of medIcal f.C1liti...Adm.aIs.ns pst h.apital had - Total -- bara of odei.a$oe to et distea'gaa

flItoGyCOIISWTIOW PUCAPIT A-1Aes taoaaptlon of coscasrtial eamry from htopicci. divided by the. RObcr of bea4.

Cealnod ItCla Petoaa natua Saat laste- I.lc a,t gin-n

Avarca. alo. of houeeheld (per.ooe per bueol)-total, rba._ cad rural -LG_FLAS 1O0 AME VITAL STA.TISTICS A hotechold cono.t.t of a roup of odivitu-la vIto sarae living qIarter,

localpopuation aidocat millocal- AlIofj J5 1 1; if act avallable. and th.eir n*iL. m-.l.. A boarder or lodgr cay a, way not be Inclued toito otyaroolatc 1960, 1970, end 1977 dana, the howoehold for statistical p-rpoac. Stati.tloel dellnitloas of beamo-

Vrhat f,Puletlon (prtc-t of tot.1) - Latlo of arb. to toaLO poywia- heldnayclot; different dcfioltloem of arha. r..a. may affect seprability Avorano ocb!t of ,er-oc P., room - total. rtb.. acd cuorl - Avstao VA&-

ofdtc. bmgtetio of perAo pratoo In all, urban, e-d tr.. occupied toev.tioaa

.P.oI.tio doeiy ulllnte. tac:patlni 1 Duei ra. *.tledf Cos-prvaacct Merutal"caPotej - Hid-year ppellatio par equals bilamatar (100 hMetals.) ... cCapie part..t

ottota1 -rea Actee.. to electrtcity jp.-rCo of twolIloA.) - t.t.l. urban. oand rural -

Perq. ha. entltu1ture icod Campatet *0 ebevo for egritulturc1 land Cono-tlonal dwellng. with elcotrlcity in livring qaotsr asc parcemeaegooniy. of tetal, urbao. saed ard ... oollinga respactivaly.

Poouilaloo ag trutuo pecet - Childos (0-IA yearsl. workiag-age(1-F. :ect), and retired (65 year. aCt 00Cr) a. p-rootago.ato aid- IDSICAT!O.

Y-c Population' Adlu-tod eo-oll.owt rctioaroueinouoth cct* (P-ool- oa.ed urban - C-mpoad annual Primary achcol - total. end foele - Total sad fwent. enrllment of al case

atoth rate, ef total aTurhbo cI-erpopuIlteone for 1950-60. at the Primary laero as petc.t.ctag of reapactively primary *chol-og.I96-70, sacd 1970-75. populaclon.; Cormaly Includes chlldroe &ged 6-il years but adjusted for

Criod. hirth rcto lpar thu.saad) - Annual live births per choiscaad of 4iffereot iaogth. of prleary ad ... it.; fer coustri., with ualioctc.l ada-aid-yer p pulatios;too-year arith-atic ":A&*ragoodiag .I.1960, ca.Ctio .,.rallnent, ca.yb ec` 100 percent aC-. eome Pupils ar. hal of,a197 cod fI 10-yVacr aVer .ageodles 1a 1975 f rorme recant elmao aboe the offcial Icoo ago.

Crude death r.ct (v., thoucand) - A-1aa death: perithooaTs of alt- Secondary school - totsl. sad female - Compucad a. above; secondary attica-.a.t Ppopaltico.; tao-year .rlthaetiC.. avera e,nodle USo 19W0 cnd 1970 tloo raquirco at I...t tour year. of approved primay la.tructins; pea-

a f.)(10_year cred.g .ndi.$ 1. 1975 for wa.t r*c.ot ccciaant. old.. gea...l. yocaoiol. or1 teeChet tralaog. etnotruoi.a fer pupJJ.-PoaroccAutiOO r.t. - Avorago tru.haof daughter:. a ,.Ilil beent ueully of 12 to 17 year.ofag;cotLa P0mdaoco ce.Too* ace g.carally

ir h.r aormal reproductIve perioed if abeonpti.cc C p,oace gs- encisde.occfc fottlity Lato.; ucually five-year av-ragS. ending Ja 1960, rotaItial- cOolmnt tOoroect of atonteryi - Vocati.ool Itatltetloact ix-

I 1)70 d 195.clI taholcel toid-trL1.1 or othor Program. which operate lndapemdeotlyPee, panic - acceptorsa.--Ioce (thou-ends) - Aceul -umber of or an departmeots of .. c-ndary insttatltona.

r.Pt.r. of birth-cootrol devicas uodor &.Spices of national fcaily Pupll-toachac ratiao- rleary. co oand *: a.Iry - Teotl ttadanto carolled iaraoOtnc program. pr~~~~~~~~~:inry and eacendary levaic dIiro by eambors of teachers 10 the Carrl-

Leally Paci .. in users (perc.nI aI nttled ev. - Percentag faodo oaaatio -wco of child-heaing age (15-_ pyears) tho ae birth-costrol Adult,literary rat. (p.rC..t) - Literate adults labia to toad "Ad writ.) asoincto all mariod ~.eo1 i an age . grSoup. a percotag. of ctota adult population cagd 55 years sat "oar.

FOOD MID NU1TRITIONCS9fI'-do of food p,od ot'vo per -apita (1970nl005 - led" au.ber of pet Panaecaor tate (oar thu...And populatio) - P.....go oar.- teaptic meter c"te

capt P,ue prduoto f l od.o..ti. ctigie than eight p.roe .. ; a.eludes s.IbeawcA . hoarca, atd militaryccc aoyof oalorie bprceot of. aul .ante - caatcd frca nahIIoL.e

nogeqiaet of oat food .uppli.. available 1n toancry per capita Radio reocive1r. (oct thousaad savuletion) - All tye, of localvor. for radiopot dcy. Avail:lal oupla rIpI.. doaal production, Isaprta lae bredcaetn to goarnl public Per thou.."d of pop.lation; .Codd.. ealcacam

oonl. n heogen la c.to . N4.t uplie oot.lud. anfeal fc.d. oca-.1aolers in contrlco sact 10 year. h-t rasi.tr-tIan of radio aot. was isquoic ion ucd 10nfootP rtoeaa... a'nt loea 1 diettibutlIon. a- affect; date for recent yea. may cot be coaprabahi Jclo "oet coeocrice

ocir-non. woro ceacicet4 by FAO hnco'd on ph1yatolo.gical naea for not- ahtlish.d liccamleg.eel aCtiity cod haalch co..olellriag aovironeeotsj tamporotare. body TV r.c-i-r. lPet tho.....d oolto -T'v r-oelvor far broedac.t to goainrScightc.agnocoditbtoo of Population. andl allawing 10 Per- phicpe th,u,n popul.tioo; ...ludea u,clloeced TV rac:ivara to came-

coot .olec cloaaodi l ttia an 1 year whe. Piitatnto TV aca in t affact.F.t napic. acoly of pratcl ri. ttdy Protein .coLent of per Nawe,aoet circulation 10cc thou.ad -oualo Io, h rage tirc.la-

cPit ratorcP,ly of fod otda. lt Iepyof fodi eid cctioc of 'diygnrlitaoc wppr, eie eapriodical pobll-uteco Oequraaooe forall cuctri cetbliahdby U'DA proito for ..ti.c devoted primarily to accerding general naew. It Is congld.rad to

a oliloc alownceof 60 grace of total preotai per day cand 20 grams be dail1y' if it appar,0 at lea.t four timea a weeb._loantl aru pulse procoit, of which I0Sgrae chot,ld be noIal procoin. Cicna annua attendancets cpt o er-lsa ntenbte ikc

Ihe t eccad. cry lwe that thoao of 75 grac of total prot.ao and sold during tha year, intildtto mdinesao to drIve-scintomea and "ebile13 fr "s o nI1 protein a. an v-rgo far the uatid pr.opeca by unIts.'oA cc the Tird Worid Food Survey.

in 01cprcl uoy rmaia an..e paaoapply of food 0Q1OEIfTTArie fo Tim t ue ogaaprdy Total lahor fotto (tho.saod.) - ECo..omic.lly actieptoc nldn ra

Iflild (aaI-k) cntalit rate (perth .h..and) - Annual deaths per thoua- force, and u... ploy.d hut -ooluing ho... wioc. ccudonts. etc. Dofini-sod in S.e group 1-A y-ar, cc ohIldr.. L. this ago group. tiorc ic -ciOu .. uC..trica are not tompar.blo.

Pomlo orcay)- Pe-1l lehor force ce percectago of torsi labor fort..HEALTH giutr (p rt o) - Labor' forco I. fnroing'....rctry, hunting sand fisblogLii enr 1 ny et hirtch (pyc.. -2 AverageS nuer of yeats of life a.,peceraf cf local labor forces.

remanin ar rh; usIefy fieyear average, ending to 1960. 1970. Laduet,y (porono-) - L.hor f....te in 1t cilg ....tru.clton. saeafact.Iorlagnd

ate 1975 alcr- ly ace nd ge ac Percet"g of totalSber forces.Inlnt 0 ialcytac (ot thousand) Aetnua deaths of infaotc Under Patcotioo rat. (percoor) - toal maesn od.-Tt ale. and

one oatof sc ot tountttilo btht, focal, labr forts a pecrogoc th.ir r.p.otloe poulaticag.All-u 10 nafl etr (pretutp, tiortl - total, urbn.. cod rucsl - Th..o crc TLO. adfostd p.r,cirp.tte- rate, reflectingeo-o

iluebc ciracy. (Ita).urba. so rurl) vit rOaern-bl. acce.. to cIrrrr f the Popollor. and legs tine tr-d.roW rspl icitccecdeu Ic ac r atraet*d but [cococic d.p..d..cy r-1. - Satio of pop.l.tien ander IS and 65 oct ovocr to

-- o-annt.d-dwater auCh aa chac roea Protectod bar h.lo, cping. tho labor forc. to age grou.p of 15-bA yeaa.s.nued -Itar- ucll) .. p.1-coow. of their teapeotioc poIpo,laten.

cs.r trapublic fountaic r.adna oae notn nro IlfCOE DISTRtgt(TIOcha 233 ntet Pr. aOA my he conn i'deta,d .! being wIthin rca- P-r-otee. .( rV,1-t loro-ai (both in Cash and hind) reivtod by richestconabl acne. of r..ce oo. S rural..a.... oanblacco.c would paro-t, richoot 20 porcent. poor..et 20 percent. and poorest 40 percent

,,ni, cat th, hcu- it. or ... Or of rho11 hcu.hld to oat bayo to of h .u.. h.ldm.opod *diarootinaePar or the dcy Ir fatching t1he family's

aece toed.. POVERTY TARGET 9ODUPS

Occac cc ocre cdiepoal lorcoctof roulatlc) -total. orbas. cd ,tetnae (cu.ooer on.loilS$ v-t c.pital - urnec sac.. Sori-cue! - c,nt of puple itotal. sra.and -url) cartod by .oor- AhcuopoortlyIroelvl Ic tt atItnon iono hele which a nioioal

diecaaao arcvteao f toirenen ootpoplitoon foret Otrltio-11y ad.qaste diet plan O..nle confoo -euirecet. i udipalcn rud thnoanlrrdadcoa it Ot wIhou aflrd.ble.

Ohu-an nndtaateac-elrby wae-borne pam fotlnuce4 re pi . -O t Income ie-1 (USS P., c-pit.) - urban .Od tuts) c c-c iP"c yr-ci. sod .llitIncll-ln. c -co poery lncoCs 1-ra I. that I ic.e lo-o1 I.. then one-third

-Pc pa. tci cl - tp)ein ile y ubrO 'P"'iogPac caPita Por....ul Incose af the country.i.) eaquslItIrd (to. a mdiascolcunraty levl ,tmtdI'melvhlo oot otc ne (parootl- obar end t-tal

POp~ .,; cPr uc.gp*n - Pupula-i- 4lvitat by nambeof actec of prpulatlo. h.bcn rel b are eLba. aheiut-s, `poor or

cc nb an icnbe a.da..t.turcc.. po...tic.i1 t*e And reaiep., whichev-t Is gceagacocfrenoaloand tod Data8 DIViIo

.caneac Aneyl I nd Prjecin lparttaca

- 21 -

ANNEX 1Page 4 of 5

0ARBADOS: ECONOMIC DEVELOPMENI DATA

AVERAGEANNUAL

Preliminary GROWTH RATE Actual Preliminary

1975 1976 1977 1978 1979 1976-79 1971 1978 1979

NATIONAL ACCOUNTS Constant 1976 US$ m,illion As pe-rcentage of GDP

Cross donestic product 384.0 400,3 415.3 441.0 473.0 6.0 100,0 100.0 100.0

Gains from terms of trade 45.2 - 1.2 1.0 -6.2 0.3 0.2 -2.3

Gross domestic income 429.2 400.3 416.5 442.0 466.8 5.4 100,3 100.2 98.7

Imports (incloding NFS) 286.8 281.3 300.0 318.5 364.0 9.0 72.2 72.2 77.0

Exports (import capacity) 248.4 221.9 256.2 290.6 333.0 15.0 61.7 65.9 70.4

Consumption 371.3 375.4 382.2 376.8 391.8 1.5 92.0 85.4 82.8

Investment 96.3 84.3 78.1 93.1 106.0 8.3 18.8 21.1 22.4

Domestic savings 57.9 24.9 34.3 65.2 75.0 45.0 8.2 14.8 15.9

National savings 62.0 43.7 47.9 80.9 88.1 26.0 11.5 18.3 18.0

MERCHANDISE TRADE Current_8$ million As percentage of total

Retainsed fportsConsumer goods 80.3 91.0 1l2.1 114.0 140.0 15.5 41.5 40.4 37.8

Intermediate goods (ex.. f-els) 43.3 51.9 5 1.5 71.4 95.7 21.0 25.0 23.3 25.9

Fuels and lubricants 23.3 21).1 1.' 17.1 2.6.7 10.0 7.3 6.1 7.2

Capi-ul goods 45.2 47.1 56.4 71.0 103.4 30.0 22.9 25.1 27.9

Other '6.6 7.5 8.0 8.9 4.4 19,0 3.3 3.1 1.2

Totat 190.7 219 6 246f.5 2824 370.2 19.0 1009. 100.9 100.0

Domestic ExportsSugar and molasses 53.5 30.2 34.2 32.9 34.7 4.9 41.4 33.0 28.9

Clothing 13.3 15.3 18.6 20.3 23.0 15.0 22.6 20.3 19.1

Electrical components 4.7 6.9 9.1 18.9 22.5 48.0 11.0 18.9 18.7

Other 16.9 ,17.3 20.6 27.8 40.1 33.0 25.0 27.8 33.3

Total domestic merchandise 88.4 69.7 82.5 99.9 120.3 20.0 100.0 100.0 106.0

1976 = 100

Goods and NFS trade indicesExport price index 109.9 100.0 107.1 117.4 136.4

Inport price index 89.9 100.0 106.6 117.0 136.4

Terms of trade index 122.2 100.0 100.5 100.3 98.6

VALUE ADDED BY SECTOR Annual ars percentage of total

Agriculture 37.8 40.6 41.3 43.1 45.7 11.2 11.1 11.0

Industry 63.9 72.8 71.3 73.7 81.5 19.3 19.0 19.6

Services 241.7 246.9 256.4 272.1 288.5 69.5 70.0 69.4

ToLal GDP factor coot 343.4 360.3 369.0 388.9 415.7 100.0 100.0 100.0

Fiscal Year at (Current 01$ million) As percentace of CDP

PUBLIC FINANCES 1973 16 19/7 1978 1 1975 1976 1977 1978 1979

Current revenue 108.3 116.0 134.6 187.2 227.1 26.7 27.3 28.3 34.9 35.5

Current expenditure 86.9 109.7 123.3 151.2 187.4 21.4 25.8 26.0 28.2 29.3

Current account savings 21.4 6.3 11.3 36.0 39.7 5.3 1.5 2.3 6.7 b.2

Capital expenditure 25.0 32.0 45.4 36.5 45.8 6.1 7.5 9.6 6.8 7.1

Overall deficit -3.6 -25.7 -34.1 -0.5 -6.1 0.8 6.0 7.3 O.l 0.9

DETAIL OF PUBLIC SECTOR INVESTMENT As percentage of total SELECTED INDICATORS 1974-79

PROGRAM AND FINANCING Actual Eot. 7a_LssryFY78/79 FY79/80

Agricultore, forestry and fishing 14.0 9.2 Average ICOR 5.1

Mining and quarrying _ - Import elasticity 0.94

Manufacturing and processing 5.7 6.8

Other 80.3 84.0Total expenditures 100.0 100.0

FinancingPublic sector savings 95.1 86.9

External sources 44.8 21.2Other -39.9 -8.1

Total financing 100.0 100.0

fotal Employment Value Added/Worker

Thousands 7. of total C(rovth rate 7. of Average

1970 1977 1970 1977 1970-77 1977 1977

Agriculture 13.6 6.7 16.5 9.6 -4.6 4747 108.5

Manufacturing 32.3 14.8 14.9 16.4 2.1 2921 66.7

Other Sectors 56.4 66.7 68.5 73.9 2.2 4235 96.8

Total/Average 82.3 90.2 100.0 100.0 1.0 4377 100.0

- 22- ANNEX 1Page 5 of 5

BARBADOS

BALANCE OF PAYMIETS, EXTERNAL ASSISTANCE AND DEBT

(1S0$ million at screat prices)

Act..l Prel. st.1975 1976 1977 1978 1979 1980

SLMiARY BALANCE OF PAYMENTS

Exporta (including FS) a/ 221.1 221.9 273.1 340.0 455.9 557.0Imports (including NFS) 257.8 281.3 319.4 372.5 498.3 633.3Resource -bl-nce (X-M) -36.7 _s9,4 -46.3 -32.5 -42.4 -76.3

F-t-or 'erices (net) -1.4 2.2 -1.8 1.6 -1.4 -3.5Interest on public debt (-2.3) (-1.9) (-1.9) (-3.1) (-4.9) (-5.7)

Other (net) (0.9) (4.1) (0.1) (4.7) (3.5) (2.2)Current transfers (net) 7.2 12.7 15.9 16.6 22.1 25.0BalanW e on current -- count -30.9 44.5 32.2 14.3 21.7 54.8

Net public disbursements -0.2 3.9 16.9 14.8 5.0 29.0Gross disbursements (1.5) (S1?) (23.9) (19.1) (11.8) (37.0)Aorti-ation (-1.7) (-1.8) (.7.0) (-4.3) (.6.8) (-8.0)

Net poiv-te aectr in-estment 5.3 6.2 4.7 6.1 7.7 22.0Other capit-l trorsocnionz 42.n 1.1 17.8 23.1 18.3 17.2Chonge6 ir reserves (-increase) -16.2 19.3 .7.2 -29.7 -9.3 -13.4

(US$ asillion)GRANTS AND LOAN COWMITNENTS EXTERNAL. DEBT AND DEBT SERVICE Actual Prel.

(official gr.ut and grant-like) 1975 1976 1977 1978 1979

+ (public red. 4 10ng-tern l.a.n)TBRD - - - 9.0 8.0 Public debtIDA _- - Outet-diag at cad perlad 26.3 29.9 46,0 60.4 65.9

Other nIultilaterul 2.3 9.7 12.5 8.3 13.4 Otstanding debt at begi..ieg 26.7 26.3 29.9 46.0 60.4

Guvern=ents (biluterul) 3.0 - 10.0 1.6 3.8 lat-eest em public debt 2.3 1.9 1.9 3.1 4.9Suppliec- - R- epsy.est oa public debt 1.7 1.8 7.0 4.3 6.8

Priv-te buank 1.5 5.7 10.0 - Total public debt Bernice 4.0 3.7 8.9 7.4 11.7

Bondu - - - -

Public luons a.e..,Total public M & LT lu.ms 5.3 11.2 28.2 28.9 25.2

Burdeo am export e-a.imgS (2)Outstamdimg smd disbursed

EXTERNAL PUBLIC DEBT as of Decmber 31. 1979 Public debt e-ieee b/ 1.8 1.7 3.3 2.2 2.6

(repayable in foreign curreacy) us$ mi. Percent

IBRD - -IDA - -Other -ulcilateral 19.7 29.9G-veru-ents 25.1 38.1 Isterest as % prior year 8.6 7.2 6.3 6.7 8.1Suppliers 0.3 0.4 Amrotisatiar as Y prior year 6.4 6.8 23.4 9.3 11.2

Private banbk 20.8 31.6BondsPublic drbcs n.e.i.Total psblic M k LT Ioos 100.0

a7 The boi.ece of puy-ceuts presemted here include re-ised estimates of t-urist e.pemditures.b/ Percent of exportv of goods cud NFS.

- 23 - ANNEX II

STATUS OF BANK GROUP OPERATIONS IN BARBADOS

A. Statement of Bank Loans as of September 30, 1980

US$ million(Amount less cancellation)

Loan Year Borrower Purpose Bank IDA Undisbursed

1642-BAR 1979 Barbados Education 9.0 - 8.5

1685-BAR 1979 Barbados Tourism 8.0 - 8.0

1813-BAR 1980 Barbados Industry 10.0 - 10.0

TOTAL 27.0 - 26.5

of which as been repaid - - _

TOTAL Outstanding 27.0 - 26.5

B. Statement of IFC Investments as of September 30, 1980

None.

C. Projects in Execution

Ln. No. 1642-BAR: Barbados Education Project; US$9.0 millionLoan of December 29, 1978; Closing Date: December 31, 1982

The project is progressing according to schedule. All school sites have

been acquired; phase I of school construction is progressing satisfactorily; furni-

ture lists are completed, and contracts for purchase are expected to be awarded

shortlY.

Ln. No. 1685-BAR: Barbados Tourism Project; US$8.0 millionLoan of April 27, 1979; Closing Date: June 30, 1984.

The project is progressing according to schedule. Engineering con-sultants have completed final design. Evaluation of tenders is in progress.

Ln. No. 1813-BAR: Barbados Industrial Development and Export PromotionProject; US$10.0 million Loan of April 28, 1980;Closing Date: March 31, 1984

The project is progressing satisfactorily. The Barbados Industrial

Development Corporation CDC) has introduced its new pricing policy. Both the

Barbados Development Bank (BDB) and BDC are in the process of hiring experts to

strengthen their institutional capabilities. There would be a six-month delayin the completion of the country's interest rate structure study; however, thisis not expected to adversely affect the imDlementation of the project at this time.

- 24 - ANNEX IIIPage 1 of 2

BARBADOS

POWER PROJECT

SUPPLEMENTARY PROJECT DATA SHEET

Section I: Timetable of Key Events

(a) Project Preparation

(i) Identification 3/2/79

(b) Project Preparation Agencies

(i) Barbados Light and Power Company(ii) Ministry of Finance

(c) Appriasal Mission 11/19/79(d) Completion of Negotiations 11/7/80(e) Loan effectiveness planned April 1981

Section II: Special Bank Implementation Action

None

Section III: Special Conditions

The Borrower has agreed:

(a) to complete the sale of BD$5.0 million worth of shares byloan effectiveness (para. 59);

(b) to obtain approval of respective loans by CDB, EIB, CDC andRBC and to sign a contract for the supply of two low-speed14 MW generators by loan effectiveness (para. 59);

(c) to furnish the Bank, by loan effectiveness, a satisfactoryfinancing plan for 1981 (para. 59);

(d) to maintain its earnings at a level sufficient to earn a 6%minimum rate of return on fully revalued net fixed assetsin 1981 and 8% in 1982 and thereafter (paras. 53 and 61);

(e) to maintain a fuel clause that allows it to recover varia-tions in its fuel costs caused by variations in price offuels (para. 61);

- 25 -

ANNEX IIIPage 2 of 2

(f) to pay dividends from retained earnings and thatthe payment of such dividends would not affectthe execution of its investment program. BLPCto review with the Bank no later than two monthsbefore the-end of each fiscal year, its investmentprogram and proposed financing plan for the followingfiscal year (para. 60);

(g) to obtain the Bank's agreement before incurring furtherdebt, if its projected debt service coverage ratio fallsbelow 1.5, and before raising its overdraft limit aboveBD$10.0 million (para. 60);

(h) to maintain cash reserves less overdraft at the end of1981, 1982 and thereafter equivalent to 5% znd 9% res-pectively of annual fuel and cash operating expenses ofthe previous 12 months (para. 60);

(i) to undertake studies, under terms of reference acceptableto the Bank, on generation expansion and the use of indi-genous energy sources, tariff structure and energy con-servation. The recommendations of the studies to bereviewed by the Bank (paras. 41 and 48);

(j) to issue upon request by the Bank, as security for theBank loan, additional debentures under an existingDebenture Trust Deed ranking pari-passu with otherlenders covered by the Debenture Trust Deed (para. 59);

(k) to issue BD$10.0 million worth of shares in the Barbadosmarket in two issues of BD$5.0 million worth each in December1980 and in 1983 with the purpose of raising financingfor its investment program and at the same time increasingthe local ownership in the Company (para. 59).

The Government agreed:

(a) not to interfere with BLPC in carrying out its obliga-tions under the Loan Agreement (para. 61);

(b) to undertake studies of the operating procedures of thePUB and to establish criteria for power rat:es inBarbados. The recommendations of the studies to bereviewed by the Bank (para. 40); and

(c) to purchase any shares from the sale of the 1980and 1983 issues that may not be purchased by the localprivate investors (para. 59).

IBRD 150639e35 . tt8A JULY 1980

U. .J

-i3e2a - t3°Zy N A t / o n / S c~~~~~~~3,2a

CRABHI LL. °ceon

2? G X DOMLC 20-AMA~A ARITi ' .ERTO RICO

.. ' . . s_Zx, ) . ~~~~~~~~~JAMAICA z <

Caribbeon Sea GADCD

T.SNIDAD &

C,IINKE(TTS -- T Dg'>X}W-, N OR711 \ iRPANAMA 5 10A

f, t f a SOUTH AMERICA70- 60

F .LEPLAN W30'

~ST, NDREW

/ t BATHSHEBA *

-t lI N A-:-t 'v- ) G t% Airport... .. . ,, ST T-- ...... , HOMAt, S \

HOLECTOW C OW A SYSTE

EXISB PrOJCT RS rEF(ir.

7- - iFB -3' ELCRIDG 13'OYSYTE

72 KV TANASMISSIN LINE

____ -__ T_ 24 KY PR,MARY FEEDERS* 72 KV SUBSTATIONS

0 : 24 KV SUBSTATIONSIJS3~0 * THERMAL POWER PLANTS 0 . 3 4 SMiles 13J-

E 0 -2 - 4 6 8 Kilometers

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