Docunent of

The World Bank

FOR OFFICIAL USE ONLY

6CA/ 30/33 i3Report No. P-4753-BR

MEMORANDUM AND RECOMMENDATION

OF THE

PRESIDENT OF THE

INTERNATIONAL SANK FOR RECONSTRUCTION AND DEVELOPMENT

TO THE

EXECUTIVE DIRECTORS

O1N A

PROPOSED LOAN

IN AN AMOUNT EQUIVALENT TO US$94 MILLION

TO

COMPANHIA DE GAS DE SAO PAULO

WITH THE GUARANTEE OF

THE FEDERATIVE RErUBLIC OF BRAZILl

FOR A

SAO PAULO NATURAL GAS DISTRIBUTION PROJECT

APRIL 6, 1989

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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CURRENCY EQUIVALENTS

Brazil Cruzado - 100 CentavosUS$1 = NCZ$1 (January 15,1989)

WEIGHTS AND MEASURES

1 Metric Ton (m ton) = 1,000 Kilograms (kg)1 Metric Ton (m ton) 2,204 Pounds (lb)1 Meter (m) 3.28 Feet (ft)1 Kilometer (km) - 0.62 Miles (mi)1 Cubic Meter (m3 ) = 35.3 Cubic Feet (cu ft)1 Barrel (Bbl) = 0.159 Cubic Meter1 Barrel (Bbl) = 42 US Gallons1 Metric Ton of Oil (API 300) = 7.19 Barrels1 Ton of Oil Equivalent (t.o.e.) - 10 Million kcal (39.7 million BTU)b/d a Barrels per day

LIST OF ACRONYMS

ABNT Brazilian Association of Technical StandardsBNDES Banco Nacional de Desenvolvimento Economico e Social (National

Bank for Economic and Social Development)CESP Companhia Energetica de Sao PauloCNE Comissao Nacional de Energia (National Energy Commission)CNP Conselho Nacional do Petroleo (National Petroleum Council)COMGAS Companhia de Gas de Sao PauloIESS Integrated Energy Strategy StudyNGE Natural Gas EquivalentPETROBRAS Petroleo Brasileiro S.A.SCADA Supervisory Control and Date Acquisition

COMGAS FISCAL YEAR

January 1 - December 31

FOR OMCL4 USE ONLY

BRAZIL

SAO PAULO NATURAL GAS DISTRIBUTION PROJECT

Loan and Project Summary

Borrower: Companhia de Gas de Sao Paulo (COMGAS)

Guarantor: The Federative Republic of Brazil

Amounts US$94 million equivalent

Terms: Fifteen years, including a five-year graceperiod, at the Bank's standard variableinterest rate.

US$ million

Financing Plan: COHGAS 42.8IBRD 94.0BNDES 60.0Sao Paulo State 30.0Consumers (for their ownconversions and connections) 58.2

TOTAL 285.0

Economic Rate of Return: About 33Z

Staff Appraisal Report: Report No. 7127-BR

Maps: IBRD No. 20809IBRD No. 20810

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

MEMORANDUM AND RECOMMENDATION OF THE PRESIDENTOF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMEtIT

TO THE EXECUTIVE DIRECTORSON A PROPOSED LOAN

TO COMPANHIA DE GAS DE SAO PAULOWITH THE GUARANTEE OF THE FEDERATIVE REPUBLIC OF BRAZIL

FOR A SAO PAULO NATURAL GAS DISTRIBUTION PROJECT

1. The following memorandum and recommendation on a proposed loan toCompanhia de Gas de Sao Paulo (COMGAS), with the guarantee of theFederative Republic of Brazil for US$94 million equivalent, is submittedfor approval. The proposed loan would have a term of 15 years, including 5years of grace, at the standard variable interest rate, and help financethe expansion of Sao Paulo's gas distribution network and its conversionfrom manufactured to natural gas.

2. Background. A substantial volume of gas associated with crude oilis produced in Brazil (some 16 million m3 lday). Although the countryimports crude oil and oil products, a large portion of the gas produced isflared or reinjected and only 8.1 million m3 /day is actually consumed (lessthan 2? of final energy consumption). Present consumption is confined tothe northeastern region of Brazil (60X) and Rio de Janeiro (40Z) and isused primarily to replace fuel oil (572). Other uses are in petrochemicals(72), fertilizers (26Z) and in the production of town gas (10Z). There isno consumption of natural gas in Sao Paulo, where only manufactured gas isdistributed, derived from naphtha (with a high economic cost) and fromrefinery gas. The National Energy Commission (CNE) estimates that Brazilcould absorb more than four times its present consumption of natural gaswithin the next decade, given sufficient development of natural gasreserves and infrastructure.

3. Ministerial Resolution No. 1061 of August 1986 grants to PETROBRAS(the national petroleum company) the responsibility for natural gasexploration, production, transport and import activities. Stategovernments hold the right to distribute natural gas as an energy source orto grant concessions to local gas distribution companies. PETROBRAS hasbeen slow to encourage the use of natural gas as a substitute for fuel oilin the profitable industrial market, because this would increase the fueloil surplus in its refineries. At the same time, inadequate incentiveshave been provided for the use of natural gas in residential markets, interms of margins for distributors. With regard to natural gas pricing,while the Federal Government determines wholesale prices, theresponsibility for the setting of retail prices recently passed --under thenew Brazilian Constitution-- from the Federal Government to the States.The Federal Government has adopted a wholesale natural gas pricing policybased on economic costs, subject to macroeconomic and financialconsiderations, which is fully consistent with sound pricing policy. Thestructure of retail gas prices must be revised, however, to reflect theeconomic opportunity cost of gas. This will ensure that efficientutilization of gas takes place on the basis of the economic value of gascompared with other energy sources, with due adjustments for consumer-related cost differentials.

4. The State of Sao Paulo accounts for about 40X of Brazil's GDP andexport revenues. Much of this economic activity is concentrated in theMetropolitan Region of Sao Paulo. A reliable supply of efficiently priced

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fuel is critical to sustaining this level of economic activity. COMGAS,the State's gas company, presently distributes 0.6 million m3/day (naturalgas equivalent - NGE) of town gas to about 450 industrial, 5,000 commercialand 200,000 residential customers. Annual sales are about US$50 million.COMGAS has decided to restructure its shareholding, both as a means ofdiversifying ownership and increasing equity capital investment. Underconsideration are a variety of different share offerings to potentialprivate and public buyers. A recent organizational restructuring hasstrengthened the company's management efficiency, in particular by reducingthe layers of management and providing a greater emphasis on long-rangeplanning. Operating measures, such as the number of leaks/km-year and theratio of unaccounted-for gas are normal. However, COMGAS will have to takemeasures to equip itself to deal with greatly expanded gas operations underthe project, notably through recruitment, training and retraining.

5. The financial performance of COMGAS in the 1970s and early 1980swas poor, as tariffs were allowed by government to increase more slowlythan inflation: financial losses had to be offset by capital injectionsfrom the State. Pinancial performance has improved in the last three yearsas sales grew steadily and as COMGAS was allowed to implement periodictariff increases in line with inflation; these have eliminated the need forfurther State contributions to offset losses.

6. Rationale for Bank Involvement. The Bank's strategy in Brazil hasbeen to support Government policies and investments that will encouragemacroeconomic growth and social development in a context of macroeconomicstability. The policies have emphasized efficient resource allocation,increased efficiency in the public sector and the appropriate targettingand delivery of support to the poor. The energy sector is a key element inthe Bank's strategy: although its capital intensity and high foreignexchange requirements have had a significant impact on public investment,the balance of payments and external debt, a secure supply of energy at thelowest cost is indispensable to economic growth and the improvement ofsocial welfare. Hence, Bank lending in the energy sector seeks to fosterreforms -- in pricing and investment policies and in the institutiunalframework -- which will lead to a more efficient development and use ofenergy resources.

7. While the Bank has been active in Brazil's energy sector, mostlending has been for electric power, where Bank loans have amounted toabout US$3.6 billion since 1949. All these loans have been investment-based except for one sector adjustment operation, the Power Sector IProject (Loan 2720-BR), which seeks to promote rational demand managementpolicies; strengthen sector finances; improve sector coordination andplanning; and increase the sector's capacity to deal effectively withenvironmental and resettlement questions. In parallel, an IntegratedEnergy Strategy Study (IESS) is being carried out by the Government underterms of reference agreed with the Bank. The IESS gives particularattention to the links between the energy sector and the macroeconomy andprovides a central focus for the Bank's continuing dialogue with theBrazilian authorities on the full range of energy issues and policy,including those related to natural gas.

8. Through the proposed project, which would be the Bank's firstlending operation related to natural gas, the Bank would be contributingsignificantly to the future development of the subsector, while at the sametime broadening its experience and involvement in the issues and ongoing

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dialogue related to energy sector policy, planning, and implementation.The project would (a) assist in developing an expanded market for naturalgas which would reduce consumption of more costly petroleum products; (b)contribute to ongoing efforts at the Federal and State levels to establishan economically efficient gas pricing policy and more clearly defineinstitutional responsibilities for the subsector; (c) pave the way forincreased private investment or lending and provide a model for othercompanies in the subsector; and (d) help establish the basis forfundamental analysis and implementation of improvements in natural gasdevelopment and utilization in Sao Paulo, and eventually, throughoutBrazil.

9. Proiect Obiectives. The project aims at: (a) substantiallyincreasing the supply of natural gas to industrial, commercial andresidential consumers by 1995; (b) strengthening the management andorganization of COMGAS, its project implementation capacity, and theefficiency and safety of its gas distribution; (c) assuring COMGAS'financial viability and cash generation capacity for further expansion; (d)helping COMGAS to mobilize capital, including private capital, to reducedemand for public funds; (e) enhancing the technical and financialregulatory framework of Brazil's gas industry; (f) reducing environmentalpollution in Sao Paulo, one of the world's most polluted areas, through thesubstitution of clean-burning natural gas for other fuels; and (g),developing a gas utilization strategy, for the State of Sao Paulo,including economically efficient gas pricing policies.

10. Project Description. The proposed project would comprise: (a)supplies, civil works, engineering and works supervision for revamping,conversion and expansion of COMGAS' existing network to increase supplyfrom 0.6 million m3/day NGE in 1987 to 3.4 million m3 /day NGE by 1995, ofwhich 3 million m3/day would be produced in association with oil inPETROBRAS' Campos field offshore from Rio de Janeiro and are partly flaredat present, and 0.4 million m3 per day would be refinery gas; (b) suppliesand works for conversion of consumer installations from other fuels tonatural gas, permitting roughly 902 of the gas to be distributed toindustrial and commercial consumers, and 102 to households; (c)telemetry/SCADA equipment for remote control of COMGAS' network, as well aslaboratory and safety/emergency equipment; (d) technical assistance forconversion of the network and of customer installations; (e) training ofCOHGAS' managerial and operational staff in natural gas related planning,technical, marketing, and financial aspects; and assistance to establish aGas Technology Institute for gas-related research and training; (f)feasibility and engineering studies for further expansion of natural gasdistribution; (g) a study to improve COMGAS' management, organization andinformation systems; (h) a study on capital mobilization for COMGAS; and(i) a gas utilization and tariff study for the State of Sao Paulo. Oftotal project cost, component (a) amounts to 69Z, (b) to 22?, (c) to 5Z;and the technical assistance, training and studies under (d) to (i)represent 42.

11. The Bank-financed project components would be carried out over sixyears by COMGAS, with technical assistance from experienced, major naturalgas distributors. Conversion of large industrial installations would beimplemented and financed by the customers themselves under COMGAS'supervision, and the gas utilization and tariff study would be carried outunder the direct supervision of the Sao Paulo State Secretariat of PublicWorks. Some urgent works, financed by COMGAS and BNDES, were started in

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1987. Approval of US$9.4 million (1OX of the Bank loan) for retroactivefinancing of project components which have been implemented from December1, 1987 (i.e. project appraisal), is recommended. Total financingrequirements of the project are estimated at US$285 million equivalent,with a foreign exchange component of US$ 102.5 million. A breakdown ofcosts and the financing plan are shown in Schedule A. Amounts and methodsof procurement and of disbursements, and the disbursement schedule areshown in Schedule B. A timetable of key project processing events and thestatus of Bank Group operations in Brazil are given in Schedules C and D,respectively. Two maps and the Staff Appraisal Report No. 7127-BR datedApril 6, 1989 are also attached.

12. Actions Agreed. During negotiations, agreements were reached:

- with the Sao Paulo State Government: (a) to base retail pricingof natural gas on agreed economic principles (see para. 3); (b) to make anequity contribution of US$30 million equivalent to COMGAS for projectrelated expenditures, to be entirely disbursed by December 31, 1990; (c) tosupervise and coordinate the carrying out of a gas utilization and tariffstudy within 18 months from the Effective Date of the loan, review thestudy's recommendations with the Bank, and present them to CNP and otherrelevant authorities; (d) within one year from the date of the ShareholderAgreement, to make the necessary administrative arrangements to enact,throughout the State, technical and safety regulation for gas operations,which are currently being applied by COMGAS, and to update them on thebasis of ABNT's recommendations and exchange views with the Bank from timeto time on technical and safety norms; (e) to define, by December 31, 1989,a periodic adjustment mechanism for COMGAS' natural gas distributionmargins; and (f) to enact financial regulation of the gas sector, includinga margin adjustment mechanism, by December 31, 1990 on the basis ofexperience tested during 1990.

- with COMGASt (a) to hire a team of advisers from a major gasdistributor for assistance to project implementation not later than threemonths after the Effective Date of the loan agreement; (b) to retrain orhire additional engineering staff commensurate with the expandingoperation; (c) to revalue fixed assets every four years on the basis of arevaluation study, in addition to the annual revaluations based on officialindexes and required by law; (d) to achieve gradually increasing annualrates of return on the average current net value of fixed assets inoperation, starting at 8% in 1990 and increasing to 12% by 1993 andthereafter; (e) to maintain annually increasing current ratios starting in1990, a debt:equity ratio not higher than 60:40, and a debt-servicecoverage of at least 1.5, starting with loan signing; (f) to carry outappropriate feasibility studies, including economic evaluation, based oncriteria satisfactory to the Bank for investments exceeding US$5 millionequivalent; (g) to carry out an organization and management study by 13months after Loan Effectiveness, and provide the Bank with the study'sfindings and recommendations for comments prior to implementation; (h) toprepare margin studies on natural gas distribution at least every sixmonths, for submission as appropriate to Government authorities and theBank to establish that the margins are sufficient to meet the financialtargets; (i) not to incur expenditures for the Gas Technology Instituteuntil a detailed plan for its establishment and operations has beendiscussed and agreed with the Bank; and (j) to forward to the Bank, byOctober 31 of each year, forecasts on achieving the rate of return and thecurrent ratio for the subsequent year and, in case a shortfall isforecasted, to take all the necessary actions to remedy the situation.

13. Ratification of the Shareholder Agreement would be a specificcondition for effectiveness of the Loan and Guarantee Agreements.

14. Project Benefits. Quantifiable economic benefits of the proposedproject would yield a rate of return on the order of 332, based on theeconomic value of fuels displaced by natural gas, and taking into account adepletion premium for the gas. The Project would lower the cost of energyby reducing the domestic consumption of more costly fuel oil, LPG, andnaphtha. It would increase fuel oil exports and reduce LPG and naphthaimports, thereby improving Brazil's balance of payments by annual amountsreaching about US$200 million by 1995. It will also result in lowerelectricity consumption, particularly during peak periods, postpone somehydroelectric power plant investment, and help the country's fiscal anddebt management problem. Substitution of clean-burning gas for largevolumes of high-sulphur heavy fuel oil would significantly reduce both SaoPaulo's severe pollution problems and the need for investing in pollutioncontrol equipment.

15 Project Risks. Risks include: (a) lower-than-expected supply ofgas, should PETROBRAS be unable to meet Its contractual obligations; and(b) high inflation distorting gas and other energy prices and erodingCOMGAS's earnings situation. The former risk is minimal as existingreserves are adequate to satisfy the anticipated project demand, and thelatter will be mitigated by agreement on a periodic adjustment mechanismfor COMGAS' margins designed to enable the company to achieve agreedfinancial targets.

16. Recommendation. I am satisfied that the propused loan wouldcomply with the Articles of Agreement of the Bank and recommend that theExecutive Directors approve the proposed loan.

Barber B. ConablePresident

Attachments

Washington, D.C.April 6, 1989

Schedule A

BRAZIL

SAO PAULO NATURAL GAS DISTRIBUTION PROJECT

ESTIMATED COSTS AND FINANCING PLAN

Estimated Costt al Local Foreign Total--------US$ million------

Materials 25.2 16.9 42.1Works 86.7 22.3 108.9Metering & Regulating Stations 23.7 14.7 38.4Engineering, Works Supervision 12.7 2.9 15.6SCADA, Pipeline Repair Equipment 2.0 8.0 10.0Technical Assistance, Training, Studies 2.8 6.1 8.9

Total Base Cost 153.0 70.9 223.9Physical Contingencies 15.9 7.3 23.2Price Contingencies 7.1 4.2 11.3

Total Project Cost 176.0 82.4 258.4Interest During Construction 6.5 20.1 26.6

Total Financing Requirements 182.5 102.5 285.0

Financing Plan:

COH-GAS 42.8 - 42.8IBRD 35.0 59.0 94.0BNDES 27.6 32.4 60.0Sao Paulo State 30.0 - 30.0Consumers (for their own 47.0 11.1 58.2conversions and connections)

Total 182.5 102.5 285.0

a/ Prices as of mid-January 1989 inclusive of US$20.9 million equivalentof local taxes and duties.

Schedule Bpage 1 of 2

BRAZIL

SAO PAULO NATURAL GAS DISTRIBUTION PROJECT

Procurement Arrangements a/Estimated Cost in US$ Million

Expenditure Category ICB LCB Other Total Cost

Materials 16.0 4.7 27.3 48.0(15.0) (4.7) ---- (19.7)

Works 18.7 13.3 92.9 124.9(16.2) (11.0) ---- (27.2)

Metering and Regulating 4.9 --- 39.2 44.1Stations (4.9) --- ---- (4.9)

SCADA and Pipeline 11.8 --- ---- 11.8Repair Equipment (11.8) --- ---- (11.8)

Engineering/Supervision --- --- 19.3 19.3of Works --- --- ---- ----

Technical Assistance --- --- 10.3 10.3Training --- --- (10.3)/ (10.3)

51.4 18.0 189.0 258.4(47.9) (15.7) (10.3) (73.9)

a8 Figures include contingencies. Those in parentheses are the proposedfinancing by the Bank, except for interest during construction on theBank loan of US$20.1 million.

b/ According to Bank Guidelines for the Use of Consultants.

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Schedule Bpage 2 of 2

Disbursements

Amount of the Loan Allocated 2 of ExpendituresLoan Category (US$ million equivalent) To be Financed

1. Equipment and .laterials 14.4 1002 of foreign and1002 of local ex-penditures (ex-factory cost)

2. Vorks 26.5 100? of all ex-penditures

3. Metering and Regulating 4.2 1002 of foreign ex-Stations penditures and 1002

of local expenditures(ex-factory cost)

4. SCADA and Pipeline 8.1 1002 of foreign ex-Repair Equipment penditures and 1002

of local expenditures

5. Technical Assistance 8.6 1002 of foreign ex-(including equipment for penditures for train-the Gas Technology Inst.) ing and non-resident

consultants, 1002 of totalexpenditures for others

6. Interest during 20.1 Interest and otherConstruction charges on the loan

7. Unallocated 12.1

Total 94.0

Estimated Disbursements: 90 1/ 91 92 93 94 95(Bank FYs) --- ------ US$ million------------_______

Annual 17 26 27 14 5 5Cummulative 17 43 70 84 90 94

1/ Including US$10 million initial deposits into a Special Account, as aRevolving Fund to facilitate disbursements.

Schedule C

BRAZIL

SAO PAULO NATURAL GAS DISTRIBUTION PROJECT

Timetable of Key Proiect Processing Events

(a) Time taken to prepare: One year

(b) Prepared by: COMGAS with consultants' and IBRDassistance

(c) First IBRD mission: December 8-20, 1986

(d) Appraisal mission departure: December 1, 1987

(e) Negotiations: May 20-27 and September 19-20, 1988;February 16-21, 1989

(f) Planned date of effectiveness: August 31, 1989

(g) List of relevant PCRs and PPARs: None

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Schedule DPa&g 1 Ot 3

THE STATUS OF BANK GROUP OPERATIONS IN BRAZIL

A SUMMARY STATEMENT OF LOANS(As or beptemDer 30, 1988)

Amount lessLoan 0 Year Borrower Purgose Cancellation Undisbursed

One Hundred and five loans fully disbursed 6.238.0

1721 1979 COPEL Power 86.7 -1721-S 1979 COPEL Power 22.3 0.21877 1980 State of Minas Gerais Rural Development 33.0 2.81924 1981 Brazil Rural Development 54.0 4.41939 1981 ELETROBRAS Power 54.0 13.21970 1981 CEF Water Supply 180.0 - /1989 1981 Brazil Alcohol Development 232 8 - TI2015 1981 Brazil Agriculture 17.0 rl2016 1981 Brazil Agriculture 60.0 - TI2060 1982 Brazil Agriculture 67.0 122061 1982 Brazil Health 13.0 1.02062 1982 Brazil Highways 206.0 0.72116 1982 Brazil Agriculture 26.4 6.12138 1982 ELETROBRAS Power 182.7 95.62163 1982 Brazil Agriculture 26.4 6.82170 1982 Brazil Urban Development 123.9 45.02177 1982 Brazil Rural Development 42.7 12.72224 1983 Brazil Feeder Roads 154.0 21.42249 1983 CEF Water Supply 302.3 1.02268 1983 Brazil Agro-Industries 400.0 94.42269 1983 Brazi' Rural Development 67.8 50.52343 1984 Brazil Urban Development 52.7 11.02347 1984 Brazil Export Development 351.4 0.12348 1904 Brazil Agriculture 303.0 0.52353 1984 Brazil Agriculture 65.2 49.61729-1 1984 Brazil Agriculture 7.7 1.52060-1 1984 Brazil Agriculture 22.8 22.72364 1984 ELETROBRAS Power 250.0 166.02365 1984 ELETROBRAS Power 222.8 4.12366 1984 Brazil Education 20.0 10.42412 1984 Brazil Education 40.0 19.62446 1984 Brazil Federal Highways 210.0 26.12447 1984 State of Sao Paulo Health 55.5 19.42448 1984 Brazil Health Studies 2.0 1.12488 1985 Brazil Development Banking 300.0 76.32489 1985 Brazil Education 72.0 44.22523 1985 Brazil Rural Development 61.3 44.62524 1985 Brazil Rural Development 61.4 45.22532 1985 Brazil Rural VS&S Pilot 16.3 13.92563 1985 Brazil Railwa!s 200.0 143.02564 1985 ELSTROBRAS Power Transmission 400.0 320.12565 1985 ELITIOBRAS Power Distribution 312.0 258.42593 1985 Brazil Land Tenure 100.0 76.62623 1986 State of Santa Catarina Urban Development 24.5 21.12645 1986 Brazil Urban Reconstruction 100.0 6.52679 1986 Br zll Agriculture 155.0 112.72680 1986 Brazil Irrigation Eng. 48.0 38.92681 1986 Brazil Urban Development 55.0 49.32699 1986 Brazil Health 59.5 55.:2718 1986 Brazil Rural Development 92.0 74.32719 1986 Brazil Irrigation 57.0 45.'2721 1986 Brazil Public Sector 29.0 24.32727 1986 Brazil Credit & Marketing

Reform 500.0 180-:

Schedule DPage Z 0o i

A. ST.Mh0(RY STATDZN? 0? LOANS (continued)(A 0t SO9tOUmD 30, ~5t O ep e *or ,0 1944)

Amount lessLoa Year Borrower Purnose Cancellation Undisbursed

2761 1987 Brazil Rural Development 171.0 155.52762 1987 Brazil Rural Development 78.0 69.32763 1987 Brazil Rural Development 122.0 112.82810 1987 Brazil Education 74.5 71.82822 1987 Brazil Urban Transport 200.0 187.72030 1987 State of Sao Paulo State Highway 174.0 163.02831 1987 Brazil Ind. Pollution Control 50.0 50.02857 1987 FEPASA Railway Rehabilitation 100.0 95.02860 1987 Brazil Rural Development 60.0 54.62861 1987 Brazil Rural Develop mnt 55.0 50.52862 1987 Brazil Rural Development 84.0 78.12863 1987 Brazil Rural Dev lopment 42.0 38.42864 1967 Brazil Livestock Disease

Control 51.0 47.02883 1988 Centrais Eletricas Resettlement &

Brasileiras S.A. Irrigation 132.0 78.62895 21 1986 State of Minas Gerais Forestry Development 48.5 48.52931 Z 1988 Brazil Disease Control 109.0 109.02941 I 1988 PORTOBRAS Port Technical Assist. 20.0 20.02950 7Z 1988 Brazil Irrigation Subsector 195.0 195.02960 7Z 1988 Brazil Agro-Industries Credit 300.0 300.02971 7 1988 Brazil Agricultural Cred,t 300.0 300.02975 7 1988 CEP RIo Flood Reconst. 175.0 175.02983 Z 1988 CE? Municipal & Low-Income 80.0 80.0

Total 14,967.22 31Of which has been repaid to the Bank 3.676.22

Total now outstanding 11,291.00

Amount sold 45.8Of which has been repaid 45.8 45.80

Total now held by Bank 11 245.20

Total undisbursed 4 .81044

11 Although this loan is fully disbursed, and included under loans fully disbursed above,the initial deposit to the Special Account is currently in the recovery process. 'heloan will be removed from the list after the loan account closes.

2I Not yet effective.

3/ No IDA credits have been made to Brazil.

4/ Became effective October 4. .988.

Notes The status of the projects listed in Part A is described in a separate report ̂all Bank/IDA financed projects in execution, which is updated =lce yearly andcirculated to the Executive Directors on April 30 and October r31n

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1117/1970 UfttpleCelf. l.A. * Ledetril * Cou.e.i@ o PersMsawlee, P"'I save 8.20 81.41 u1.s.iWO Pvetos.iio _U;ils. l.A. Petpeob.o.l-e s.00 0.m *.m1470 Pot l; lo".. l.A. ladu"nis . Cmeieoo P.te.O !. a1t *.8 1.* G.8am OwUteSo. S.A. I*dUis G Ceeral POt-te;olte4 4.00 1.44 0.04amI Rief0dOt Cemee&le do C-awlO4 do SWI Puot* 4.90 - a to19w/4wallfth/14 Come".h* de Casses thi mel do W"f Cest 19.14 o.io 5 Soi98A/I/18/4 Coowsei Sidosuffioo de bonohes - COhbA Stee 76.97 18.27 92.2419a 7s1 lkall the De'eteeeet Pued - NACoP Ceoo- Vb.het Ooweteso.e.ls 0.,0 - 8.00t197/1._ W bee.s. do Oeeemegtmetdo 4luree Niftee COOOIN.l.A Wlle.t U.;*m.eo eA leisia. 6.00 4.14 ".741974 geduotse Vtilarea. S.A. £IogetIo &ied. wi t 0.0 * 4.001974 Amercae do Tholde TwOu"o. S.A. Tea. Is, .1 - .1471/7 also" CaPt.... Ze4,wtue; Led. Ce.tea oleo 41.18 1.19 7.5719711 O°iteme ; bodoe*e. S.A. petpohow.oae 10.00 - 10.001on Imtl ;, ladwakris - *te; I do th.dewil l.A. Testis.. 0.45 1.0 7.48s19l"1WO Tome. S.A. - Toat, S Ceempieeee de Sb,dete Test. soe 14.20 - U 1.201s77 me S.A. PP*444eme thtuesims, Ivan, A Atuetmw Coetiaps 20.00 - 10.9011177 llee.e Rio do "be". I.A. aie*i* 18.;0 - MM.51tw CMost ltdoftrgie S.A. t*. O" Seet 1 81 .00 11.8iwo Volv do Ip_;lI t _bree e V* .male. S.A. t4e Ve*,tele 0.0 G." 411.01

t" larita de t_edet S.A. - t ttteo *ed-d bm 2. - 5.0190 Costs do P.., S/A - Cono" - 4AoUltuet. Inusatris e

C_m emo de olemgiema. Pol".t 1.0 1.o0 4.10low it teo"e Itadvtriss do see. S.A. - VIASA tem WAd SteI 8.00 - ..00am11 _ - C_m;eais tLbet;rietl do Petl poileftee COeeiugt* & P.tpoe.ieute 81.C0 1.00 18 0011 Oe.t le.i. Cioea_e S.A. Oeaeialte a P ew i..te - 0.20 0.21am0 o,. .,. .ernie be;ie4 C. Nicepel S/A port;l; I...ae 8.90 .O 41 00amalO sesiiw stbo;al Pet..q..i.o _;-;oo;eiol 8 Pe ero_;ote 48t.0C 0.o0 49 00lU01 *_eloop *flOCo78C Ifel thUete - 1.-o 1 s01I11 C__e;e Stmeeleir. do Petreg.oeie Foed sad Prcessing 1 _.00 8.0 0.101101 *?;i_f@ Oeetoote S *t6reetheiss. 40.40 4.10 10t10

11 C eim Ct* CE ceea* & beet. th ;ieto 40.C0 1.00 45 00190 Aeritm;.m S.A. few Cmifal se1**..0 0.48 80.4ila Cis leepeedea.e do Pmrsioipooes (OW MR" Cei4of . ot;l ot - 0.a 0 12aI attee Prigerifi, FodadOWP11 eeea.1 8.0o - 18oi

t1 C_met;oe 0ade do Amp* (COWA) etle Oil J.10 - 0.10- Ps" o no e.t Flood Ppedote 0.00 91-S S 11

low eD4 Ce., a Pes. 1*teeielg 8.C0 1 cooe be"et. th_;e ^ a ise to 81.0C -. 07 8 00

1414 temeh&ie Aeees.lioes tbgineol Ceeient 8 P.trokieel-e 20.00 4.C0 4 001wo1 blode do UhIo @uoem..te 8 Ptroheiel -.1.10 1.40 1 3010117 Se, etgle Atsecte. Uesti tee V Fettle, 0.0C - 8 0001017 4mg. Plteioal O Celules - &MM Paltsod Ppes.p P todut 14.00 14 00am " Pbb*i.. bWetm doe geae ideaei - FCC Ooeboeli 20.10 - 20 s0am bel. peed of gm;. f Cpitt octet Ine%t*,tiefte . 20.00 So 00t_ S.A. Cmwa I-e b;eduotel - 0401O Pee ea fetd Preempting 20.0O - gO 00t_ so" _ Oet /ieo 20.0 - 20 00Iam soeme eet O.t. t o 0.0 o 00gm "imcoe" ecs tot; tl* ..- "a 1i"ifteC 2. 20 00am t^;le* - t d;o e .Se n .co ,.. O teat/ e 80.00 - 0 00IO rOwls..". S.A. Put. an.d Pseor Prodwote 7.87 7 37Im Cob?. Von 8 Caeptol betto 40.00 1.o0 4 0oJim ;eXIe *stsi too ad P;boe 0.10 . 0 t0

4 11e111e Usti tee tOd Vitorg 8.20 1.20 * to

aWm SOlue Teaz ste S" Vitorg 4.00 - o 00ti Thetis Tonste, _a Pibore, 1.0 10

Tsut atom C_mitmee 1,.2180 140.1 I.89 0t.e.. C ett*e;m. omd Sltae WI M3 .fl Total C_it_me thlme ioId k0 Zpc WA. M.48 40 64To"$ l*mlb.te ULM La Ulii

MAP SECTION

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rOod .i l / tFE. GUIANA

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SAO PAULO NATURAL GAS DISTRIBUTION PROJECT CACHOEIRA / -

VALE DO PARAIBA GAS TRANSMISSION SYSTEM AND DISTRIBUTION NETWORKB R A Z I L LORENAf

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i5 0 Ciy Gates 5tons ,

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40' ~ ~ ~ - Taos 7 Main Roads j~~~~~~~~~~~~~~~~~~~~~~~~~~~~in_teguoaonal tasooDae

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\ ~~~~~~~~~~~~~~sao JOSE 'I 'I 3 0DOSCAMPOS E PIELLOMETERS

PETROBRAS GAS TRANSMSSION PIPELINE.0 aTY GAS STATIONS (UNDE TnRE PROIECT) N '

-D EXISTING GAS PIPELINE (REDUQ , ' IPO5* OIL STORAGE MINAS GERAIS / J

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40~~~~~~~~~~~~~~~~~~~~0% ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ AC

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TA1M(~ ~ ~~~MAA 2Z

MIGUEL S V NCE LS /

BUSANTA PA B zI

p \ 1t /~~~~~~~~~~~~~~c~ SA~O PAULO GAS DISTRIBUTION PROJECTA "C r 4/ NATURAL GAS DISTRIBUTION NETWORK

TOUTA PA06CA

DA 5IERR L I/5UD /Pos

.1 /__N I |O \ Noturol gaS pipelines

0 City gobts stotions

9~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Tw go pipelinexisina

e 9 " / S CATARINA R\ 2 \4 L ItEFINEtRY Trwa(t e o o notwol gas pipelines)…\, 5N _ ~ ~Reriny got pipeline

CAPEJA DOSRET A Maonufoctu,ed gas plant_ (S^OPCORROO \ GERA= ANDtlE ~ \ MAUA * PETROaBRAS gms troDsmiss-n pipeline

\ \ 0 \ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Rosidleotiol lotw prwssore netwrk< < _0 / < ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~(to he conoertted to natural gos)

t \ \RIBEIRAO ~~~~~~~~~~~~~~~~P9RES0 ^ . 6 . \i

MARCHt 1988