The Bank's first loan for a project with the specific aim of promoting energy efficiency was approved recently by the IDB's Board of Executive Directors.

The $10 million loan to Colombia will enable the Ministry of Mines and Energy to implement measures to spur legal, regulatory and institutional changes, increase the role of the private sector, and carry out studies and pilot programs to that end.

Interest in energy conservation has grown in Colombia along with the rise in demand, the increased difficulty of finding financing, and mounting environmental awareness.

The loan will also fund studies for industrial cogeneration projects and systems for possible financing by the private sector.

Efforts to reduce negative environmental effects will include projects to encourage the replacement of firewood with charcoal briquettes as a fuel in rural areas and to substitute natural gas for gasoline and diesel as vehicle fuels.

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PRIVATE SECTOR:MAJOR NEW POWER LOANS

The IDB's program of direct lending to the private sector gained momentum in September with the approval of loans for energy development in Argentina and Mexico.

A $132 million credit for aes Paraná S.A. of Argentina will be used to construct and operate a natural gas-fired electric power plant 240 kilometers northwest of the capital of Buenos Aires. The plant will be the first owned by an independent producer that sells power to the national power grid without the benefit of traditional long-term purchase agreements.

The IDB financing will help mobilize private investment in advanced technology designed to improve the efficiency of energy production and reduce pollution. Other financing sources will be the Export-Import Bank of Japan and syndicated funds from commercial banks.

The financing is the fifth approved for Argentina through the Bank's program of direct lending to the private sector.

In Mexico, $225 million in financing will enable the firm Energía Mayakán to build and operate the country's first major privately owned and operated open access gas pipeline.

The 700-kilometer pipeline, which will run from Ciudad Pemex to the cities of Campeche, Mérida and Valladolid, will deliver up to 260 million cubic feet of gas a day by late 1999 to power plants and other industrial customers.

The project is the first major enterprise resulting from a new regulatory framework for the natural gas sector designed to reduce the country's dependence on fuel oil.

The financing approved by the IDB will consist of a loan of up to $75 million and a second loan of up to $150 million from commercial banks through participation agreements with the IDB. Project sponsors include TransCanada PipeLines Ltd., InterGen, and Gutsa Construcciones S.A. de C.V.

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The Public Information Center can provide further information at telephone 202-623-2096, or e-mail PIC@iadb.org