Public Disclosure Authorized

R E ST R I C T E D Re p o r t N 0*T.O 198 - a

Public Disclosure Authorized

for use within the Bank. In makingit This reportwasprepared no responsibility to themfor availableto others,the Bankassumes herein. contained of the information or completeness the accuracy

Public Disclosure Authorized

INTERNATIONAL

BANK FOR

RECONSTRUCTION

AND

APPRAISAL OF THERMAL POWER PROJECTS

Public Disclosure Authorized

DENMARK

December

Department

of Technical

Operations

29, 1958.

DEVELOPMENT

EQUIVALENTS

CURRENCY

1 Kroner 6.91 Kroner

-

U.S.

14.56

-

U.S.

$1.00

cents

1,000,000

Kroner

-

U.S. $145,600

6,910,000

Kroner

-

U.S.

$1 million

TABLE OF CONTENTS Page No. Summary I. INTRODUCTION II. THE BOBRCWER III.

i 1 1

P0WFR INDUSTRYIN DENYARK

2

East System West System

2 3

IV. THE FROJECTS Description Design and Engineering Estimated Costs Procurement

3 3 4 4 4

V. ECONOMICASPECTS

5

VI. THE BENEFICIARIES

5

General Management Power Rates Depreciationand Taxation Basis of Calculationand FinancialForecasts Organization,Operationand Financial Aspects

VII.

5 5 5 6 6 6 6

A. IFV B. MIDTKRAFT C. SEAS D. BORNHOLM E. COPENHAGEN F. AALBORG

10 12 13 15

CONCLUSIONS

16

8

LIST OF ANNEXES 1.

Generating

Capacity

and Power Demand, Table

2.

11

3.

Detailed

4.

Cost Estimates

5.

Forecast of Income and Cash Flow Statements

1, Description

It

it

of Projects

,11

6.

7.

" Yap

"

11 , Graph

11i ?n

(IFV and Midtkraft) (SEAS and Bornholm)

(Copenhagen and Aalborg)

THEREMAL PO.ER PROJECTS DENMARK SUMRY The Government of Denmark has asked the Bank to consider a loan of $20.0 million equivalent to finance the estimated foreign exchange cost of a power expansion program to be carried out during the years 1958-1962. The program includes the installationof 437 MW of new thermal capacity in five plants and constructionof transmissionfacilities. ii. The individualprojectswill be carried out by six public utility undertakingsserving the island of Sealand includingCopenhagenand the north and east central part of Jutland. They operate at present, power plants with a total capacity of 851 MW representingabout 65% of the total capacityof the country. iii. The organizationand managementof the undertakingsare good. They all have a sound financialposition. Power rates are set at levels providing revenues sufficientto cover all operatingcosts, intereston outstandingdebt and to leave funds to finance large parts of necessary expansions. iv. The projects to be constructedwill provide additionalcapacity consistentwith realistic estimates of future demand. V. The total cost of the projects is estimatedat $59.2 million equivalent. The proposed Bank loan of $20 million would cover the foreign exchange requirements, representing 34% of the total investment. The balance of the funds required would be obtained from the undertakings' ownl resources.

vi, The projects form a suitable basis for a Bank loan of $20 million to the Kingdom of Denmark. Subsidiary loans in Danish kroner would be male to the following six undertakings: Million $ eguivalent IFV SEAS Copenhagen Midtkraft Aalborg Bornholm

5.7 3.0 3.7 3.7 3.4 0.5 Total

20.0

THERMYL POWE FROJECTS DENMARK I.

INTRODUCTION

1. The Governmentof Denmarkhas askedthe Bank to considera loan to cover the estimatedforeignexchangecostsof a powerexpansionprogram to be carriedout duringthe years 1958-1962.The programincludes the installation of 437 MW of new thermalcapacityin five plantsand construction of transmission facilities.The workwill be carriedout by six individualpowerutilities.The totalcost of the programis estimatedat Kr.410million($59.2million)and the foreignexchangecomponentto be financedby the proposedBank loanamountsto Kr.138.4million ($20million),representing about34% of the totalcost. 2. This reportis based on information submittedto the Bank by the DanishGovernmentand supplemented by discussions betweenrepresentatives of the individual utilitiesand membersof the Bank staffduringa visit to Denmarkin September-October, 1958. II. THE BORRaVER 3. The borrower wouldbe the Kingdomof Denmark. Subsidiaryloans in Danish kroner, and totalling $20 million equivalent, would be made by theDGovernment to the six beneficiaries in amounts corresponding to the estimated foreign exchange cost of their respective projects. The term of the loans by the Ministry to the beneficiaries would be the same as for the proposed Bank loan. The interest rate, however, would be at the saime level as the cost of borrowing in the Copenhagen market. This cost is at present slightly lower than the current interest rate charged by thea Bank. The exchange risk would be assumed by the Government. 4. The amounts of the proposed Government loans to each of the beneficiaries would be as follows: Elektricitetsselskabet Isefjordvaerket I/S (IFV) $5.7 million equiv. Sydoestsjaellands Elektricitets A/S (SEAS) 3.0 million equiv. Koebenhavns Kommune(City of Copenhagen) 3.7 million equiv. Interessentskabet Midtkraft 3.7 million equiv. AalborgKommune(City of Aalborg) 3.4 million equiv. Andelsselskabet BornholmsHoejspaendingsvaerk _ .5 millionequiv. Total

$20.0millionequiv.

- 2 III.

POWR INDUSTRYIN DENYARK

5. The supply of electric power in Denmark is characterized by the large number (nearly 400) individual undertakings responsible for the distribution and sale of power. Most of them are owned by municipalities or rural counties. Power was originally obtained from many small steam and diesel plants, which were part of small local systems. In recent years, however, new generatingcompanieswere formed, mostly in the form of cooperativesor corporate partnerships(interessentskabs) to construct plants to supply power to interconnectedsystems. At the end of 1957, Den.markhad some 300 power stations,but 15 plants with modern medium and large size units and a total capacity of 1,224 YW produced about 96% of the power required. Total installed capacityamounted to 1,350 MW and total productionto about 3.7 billion kwh. 6. After deduction of 16% for own uses and transmissionand distribution losses, total sales of power from the publicly-ownedpower stationswere 3.1 million kwh. The consumptionby major categoriesof consumerswas as follows: QZMo Industryand Commerce Agriculture Private Households Traction

YiMillion kwh

L

1,300 650 960 190 3,100

42 21 31 6 100

7. A number of industrialenterprises,in particularthose which need processing steam, operate their own power plants. These have a total capacity of 50 IM and annual productionaverages 300 million kwh. 8. The per capita consumption of power in Denmark has in the post war period increasedfrom about 260 kwh to 690 kwh, which is still low compared with other countries in Western Europe. 9. Denmark is served by two main power systems separatedby Great Belt, the channel between the islandsSealand and Funen. A connectionof the two areas by a submarine cable is being studied,but its construction is not expected during the next few years (see map attached). East Svstem 10. This system consists of 120 kv transmissionlines connectingthe power plants of Copenhagen, IFV and SEAS and serves the islands Sealand, Falster and Laaland. The system is also connectedby two 120 kv cables with the Swedish national power grid. No firm deliveriesof power are made through this connection,but surplus hydro power is imported from Sweden when available and thermal power is exported in years when water shortages reduce the capability of the Swedish hydro plants.

- 311. Allowing ity was duction

The installeicapacityin the systemat Yarch 31, 1958was 660 MW. for limitation of boiler capacity and reserves,the firm capabil563 MW. The peak load in 1957/58 was 510 MWand the annual pro2.1 billionkwh, corresponding to a load factorof 0.47.

12. The power companies estimate that demand will increase at an averageannualrate of 6.5%, which is reasonable. This would result in an estimatedpeak load in 1962/63of 705 W. Duringthis period,new capacity including the expansions to be financed by the proposed Bank loan will increase the installed capacity to 1,062 MW and the firm capability to 900 MW. This shouldbe sufficient to coverthe expectedincreasein demanduntil 1965. (Detailsare givenin Annexes1 and 2) West Svstem 13. This systemservesJutland,the islandFunenand a numberof smallerislands. The powerplantsof six utilityundertakings in addition to the two whichwould participate in the proposedBank loan (Aalborg and Midtkraft), are connectedto the systemby 150 kv transmission lines. The companiesformedin 1957an association, Elsam,whichcoordinates the operation of existing facilities and the expansion programs of the individual companies. 14. The installed capacity of this system as of March 31, 1958 was 564 MWwith a firm capability of 443 MW. The peak load in the year 1957/58 was 430 MWand the annual production 1.65 billion kwh corresponding to a load factor of 0.44. 15. Estimates prepared by the Elsam organization of the expected demand during the next five years, are based on an average annual increase of 8.5%. The higherrate of increasein this systemis reasonable, becausea number of independent distribution networks,now suppliedby dieselplants,will be connectedto the systemduringthe period. The peak load in 1962/63is expectedto have increasedto 645 SW. New capacityof 313 MW will be addedto the systemduringthe periodincludingthe 136 MW expansionof the Aalborgand Midtkraftplants. The firm capabilityof the systemby the end of the period will be increased to 718 1W sufficient to meet the expected demand through 1963. (Details are given in Annexes 1 and 2) IV. THE FROJECTS Descrintion 16. The projects to be financed by the allocations of the proposed Bank loan include the expansion of five existing thermal plants by installation of additionalgenerating units,boilerplantsand necessary auxiliaryequipment.The totalamountof new capacityto be providedis 437 MW. Three of the plants,Copenhagen, Midtkraftand Aalborg,will in additionto the productionof power,also deliversteamfor districtheating systems.

-4 17. The transmission systems connected with the five plants and the indLependent system on the Bornholm island will be extended by constructiorLof 306 kilometersof new lines and associatedsubstations. (Detailed descriptionsare given in Annex 3). Pe=ign

and Engineerine

18. The plans and specificationsof the projects have been prepared by the engineering staff of the respectivecompanies. Consultants have been retained to advise on special problems, in particularon the civil works. EstimLated Costs 19. The costs of the projectsare estimatedas follows: (for details see Annex 4) Total

]EV Copenhagen Midtkraft ALalborg Elornholm

Totals

Local Currency

(19.6)

39.5

( 5.7)

96.4

(13.9)

61.3 ( 8.9)

20.7

( 3.0) ( 3.7) ( 3.7) ( 3.4) ( o.5)

40.6

( ( ( (

135.9

SEAS

Foreign Exchange mill.D.Kr. (mill.$ equiv.)

76.7 72.0 57.8 6.1

409.8

(11.1) (10.4) ( 8.3) ( 9 (59.2)

25.6 25.6 23.5 3

138.4

51.1 46.4

34.3 2.6

(20.0) 271.4

5.9)

7.4) 6.7) 4.9) ( O.4) (39.2)

20., About 50% of the foreign exchange costs covers importedequipmexrit, the balance is the estimatedvalue of importedmaterials to be and for manufacturing of equipment in Denmark. used for construction include estimated expenditfor the IFV and Aalborg projects The estimates year) for the parts of these of financial ures after April 1, 1958 (start projectswhich are nearly completed. 21, The estimates are based on orders placed for all major pieces of equipment and on contracts for execution of civil works. Overall allowances of at least 10% have been made for contingencies. Interestduring constructionhas been included. The estimates are reasonable. 22. The cost per installedkw for the Asnaes plant (IFV), taking amounts into considerationthe costs of the completed parts of the plant, to the equivalentof $126. This is low for a plant of this type. Estimat.esof unit costs for the other four plants would not be significant because the projectsare expansionsof existing installations. Procurement 23. The orders for most major equipmentwere placed during the first half of 1958. A part of this equipmentwill be suppliedby Danish manufacturers at competitiveprices and in this case the proposedBank loan would finance the estimatedforeign exchange cost of the importedmateriaLs required. Orders for equipment to be importedwere based on quotations received through Danish representativesof major European suppliers. Because all the projects consist of extensionsto existing facilities

song regard hat to be taken to a reavonable facilitate future maintenanceani repair.

amount of standardization

to

V. ECONOMIC ASPECTS 24. The power expansionprogram to be financedby the proposedBank loan includes the installation of modern generating units operating at relatively high pressures and temperatures. Their heat rates are expected to be of the order of 11,500 BTU/kwh with the exception of Asnaes plant which will have a rate of 10,000 BTU/kwh. The new units, which will supply power to the two integratedsystems, can be fully loaded and will help to reduce the average heat rate of the Danish thermal plants, estimatedat present to be about 14,000 BTU/kwh. This reductionwill result in considerable savings of fuel. 25.. With the exception of limited deposits of lignite in Jutland, Dermark has no fuel resources. The thermal plants are therefore mainly dependent on importedfuels. The utilizationof the differenttypes of fuels varies from year to year dependent on price and availability. Under present conditionsthe plants burn about 60% coal, mostly low grade, about 20%vS heavy fuel oil and 20%olignite,based on the BTU content. With the present relativelylow average fuel price of about Kr.2.50 ($0.37) per mi:Llion BTU, the fuel costs for the new plants are estimated to range between 2.5 and 3 ore per kwh (3.6 and 4.3 mills/kwh). This compares with present average fuel costs of 3.5 ore (5 mills) per kwh. Total cost of power from the new plants, includingthe high depreciationallowances customarilyused in Denmark,would range between 6 and 8 ore per kwh (9 and 11 mills/kwh). These costs are reasonable. VI. THE BENEFICIARIES General 26. This chapter includes details on the organization, operation and financial aspects of each of the six beneficiaries. Some of this information is common to all of them, and is given at the beginning in order to avoid repetition. Management 27. All six beneficiarieshave experiencedand efficient managements arLdstaffs well qualifiedto be responsiblefor the executionand operation of their respectiveprojects. Power Rates 28. Four of the utility undertakingsdetermine power rates according to principles set forth in their statutes or articles of association. These must be approved by the Ministry of the Interior. Apart from this, rates are not subject to the control of any regulationauthority.

-629. : The proceduresfollowedto establish or modify power rates vary from one undertaking to another. Corporate partnerships (IFV and Midtkraft) and cooperatives (Bornholm) are owned or controlled by a relatively small numlberof wholesale purchasers of power. Their rates are determined by mutual agreement between these owner-users, with a view to maintaining the partnershipor cooperativein a sound financial position. The retail and wholesale rates charged by SEAS, which is a corporation,are determinedby representativesof the consumers owning the shares of the company. 30. Aalborg 31. with

The power rates charged by the municipalities are determined by the city councils.

In general, power rates are in all conservative financial principles.

Derreciation

cases

of Copenhagen

established

and

in accordance

and Taxation

32. The existing taxation law passed in 1952, gives to the various industries,includingelectric power, the benefit of accelerateddepreciation allowances for income tax purposes. The result was that none of the prospectivebeneficiarieshas incurredany income tax liability since 1952. In practice, power undertakings include in their computation of costs relatively large amounts of depreciation allowances. IFV and Midtkraft, in particular, charge the maximum amounts allowed for tax purposes. As a result, a large part of expansion costs can regularly be financed by funds retained from operations. Basis of Calculationof Financial Forecasts 33. For each of the six beneficiaries,forecasts of income and cash flow statementsfor the years 1959 to 1962 have been prepared. They are shown in Annex 5 for IFV and Midtkraft,in Annex 6 for SEAS and Bornholm and in Annex 7 for Copenhagen and Aalborg. 34. The estimates of revenuesare based on growth of sales resulting from the increase in power demand discussed in Chapter III. Each beneficiary has been assumed to maintain the same rate and depreciationpolicies as followed at present. 35. The proposed IBRD loan has been assumed to carry an interestrate of 5-3/4% and to have a term of 20 years, with amortizationbeginning in August 1962 and ending in August, 1978. QEganization.Operationand FinancialAsnects A.

IFV

36, IFV is a corporate partnership, established in 1937, for the production of power, which is sold on a wholesale basis to its partners and to other power companies. The partners are the municipality of Frederiksberg and two power distributing companies supplying the northern part of Sealand. One of these, Nordsjaellande Elektricitets og Sporvejs A/S (NESA) is a corporationwhile the other, Nordvestsjaellands Elektricitetsvaerk (NVE) is a cooperative. Both are mainly owned by municipalitiesand rural counties.

- 737. The Board of Directors of IFV establishesthe major policies of the company. It consists of 11 full members (5 from NESA and 3 each from NVE and Frederiksberg) and 3 technically qualified members, one from each company. NESA holds a 73% interest in IFV. The administration of IFV and NESA is closely coordinatedunder a president in charge of the daily administrationof both. 38. The company operates at present the 270 MW Kyndby thermal plant and a transmisslonnetwork consistingof 236 kilometers of 120 kv and 50 kv lines and three major substations. Total sales in 1957/58 amounted to 784'million kwh0 39..

The companyts present capitalizationis as follows:

Long-term debt PartnershipCapital Special Reserve

Million Kroner

%

73.16 80.00 ,69 6 153.85

47.6 52.0 100.0

40. The long-term debt is in the form of bonds, mortgage loans and various bank loans. Sixty-four percent is secured by a mortgage and the balance is unsecured. The average maturity of the debt is 11 years and the average rate of interest is 5.4%. The capital is held by the three owners as follows: Million Kroner Frederiksberg NESA NVE

Municipality

8.4 58.4 13 2 80.0

% 10.5 73.0 16.5 100.0

41. IFV pays dividends of 5% a year on the partnershipcapital, or a yearly total of Kr,4 million. Wholesale power rates charged by the comnpany are calculatedin such a way as to produce a net profit of the same amount. Although it does not retain any surplus,the company generates relatively large amounts of cash by charging the maximum amount of depreciation allowed by the law. The average depreciationrate charged by the company is currently about 11.5% a year, which would correspondto an average useful life of the installations of less than 9 years. 42. 'he company'sconstructionprogram for the 4 years from April I, 1958 to March 31, 1962 is estimatedto cost Kr.136.61 million ($19.77 million). It will increasethe fixed assets of IFV by about 68%.

43. follows:

IFVts financing

plan

for the 4-year

period

nay be summarized

Million

as

Kroner

Construction costs Increasein Working Capital Total Required

136.61 7.57 144.18

Net increase in debt Depreciationallowances Total available

36.18 10800 144.18

44, The company would thus meet 79% of its expansion costs out of its internal cash generation,entirely in the form of depreciation allowances. 45.. New long-term borrowings would total Kr.83.5 million of which Kr .39.50 million would be IFV's share in the proposed Iean operation. 46. The company's financial positionwould remain satisfactory. The debt service coveragewould change from 3.6 times in 1958 to 2.7 times in 1961. In 1962, it would be reduced to 1.71, because of heavy bond repayments during that year, but would be stabilizedin later years at about 2.2 times. 47. Actual and projectedbalance sheets of IFV as at the beginning and the end of the constructionperiod are summarizedbelow: March 31: A SSETS Fixed Assets and Work in Progress Depreciation Net Fixed Assets and Work in Progress Net Current Assets Investmentsand Funds Total LIPBILITIES Long-term debt Short-termbank loans Share Capital Special reserves Total Debt/EquityRatio B.

Million 1958

Kroner 1962

201.78 61.65 140.13 21.79 2.93 _.6L.8$

338.39 169.65 168.74 29.36 2?93 2ULI3

73.16 11.00 80.00 .6 161 8$

119.34 1.00 80.00 .69 201.03

47/83

60/40

Midtkraft

48. jMidtkraft is a partnershipestablished in 1950 to coordinatethe supply of power in the east central part of Jutland. The 16 partners are municipal and rural distribution undertakings which buy power wholesale from Midtkraft. The company has a Board of Representatives consisting of

- 940 members and a Board of Directors with 9 members elected by the representatives. The appointmentof the President of the company, changes in the statutes, new loans and large construction work have to be approved by the Board of Representatives. The President of the company,advised by the Board of Directors is responsiblefor the daily administration. 49. The Company operates the 119 PM thermal plant in Aarhus and distributes the power generated in the 4 YiWTangen hydro plant, the only one existing in Denmark. The transmissionsystem consists of 365 kilometers of 60 kv lines. The associated substationsare owned by the consumers. Total sales in 1957/58 amounted to 258 million kwh. 50, The company has no share capital and the capitalizationconsists exclusivelyof long-term loans by local banks. After 8 years of operation, Mvidtkraft has aaoumulated reserves of Kr.13.8 million and the debt/ equity position in 1958 is about 87/13, ccmpared to the initial ratio of 100/0 in 1949. 51. The present long-term debt amounts to Kr.85.8 million, of which Kr ,72.3 million are in the form of loans by local banks and insurance companies,and Kr.12.5 million in the form of 10-year bonds, issued in 1958. About 55% of the total debt is secured by a mortgage on the comt s fixed assets. paniy The average maturity of the long-termdebt is 13 years, and the average interestrate is about 5.5%. 52. Having no share capital, Nidtkraft does not pay any dividend. Wholesale power rates charged by the company are calculatedto produce a considerablesurplus,after coveringall costs, including interestand the maximum amount of depreciationallowed by tax authorities. In 1957/ 58, the net profit amounted to nearly Kr.7.4 million or 18.5% of revenues. The company considers,however,this profit as abnormally high and expects to set rates so as to maintain the level of net profits at an average of about 10% of revenues. 53. Midtkrafttsconstructionprogram over the 4 years from April 1, 1958 to Parch 31, 1962 is estimated to cost a total of Kr.72.04 million to be met as follows: Million Kroner Net increase in debt Depreciationallowances Retained earnings Decrease in Working Capital

19.59 29.52 17.99 _h.9 72.04

54. The company would thus meet 72.8% of its expansion costs net of its own cash resources. New borrowingswould amount to Kr.46.7 million t s share of the proposed of which 25.6 million would be Miidtkraft loat operation. 55. The interest coverage is expectedto average about 19 And the debt service coverageabout 1.5 over the 4-year p6riod.

- 10 -

56. Actual and estimated 19'58 and 1962 are summarized

balance below:

sheets

of Piidtkraft

as at March 31,

Million 1958 ASSETS Fixed Assets and Work in Progress Depreciation reserve Net Fixed Assets and Work in Progress Net Current Assets

100.02 26.o6 73.96 26.68 1-0-0.6,:*

L TlB IL TEIS Long-term debt

Short-term Reserves 57. about C.

85.83

loans

The debt/equity 77/23

ratio

would improve

Kroner 192 172.06 58 116.48 21.7 .;13.22 106.42

1.00 _13.81

31.80

100.64

2_22

in 4 years

from the 87/13 to

SEAS

58.

SEAS is a corporation established in 1912. It generates and distribDutes power in the southern part of Sealand and the islands of Laaland an(d Falster. The company supplies power to some 70,000 consumers, including a number of municipal distributing companies. About 20,000 of the

consumers own the commonshares co1ant on their

regardless voting.

electricity

bill.

of the company and are entitled Each shareholder

of the number of shares held.

to a dis-

has only one vote,

The preferred

shares are non-

59. General policies of the company are established by a Board of Directors consisting of 9 members. Power rates, however, have to be approved by a general meeting of the shareholders. The President of the company is appointed by the Board. 60. The facilities of the company include a 90 VWthermal plant at Masnedoe, 18 substations, 491 kilometers of 120 kv and 50 kv transmission lines and associated distribution network. Total sales in 1957 amounted to 290 million kwh. 61.

The capitalization

of SEAS is as follows: Million

Long-term

debt

Preferred

stock

Common Stock Share Capital Total Capitalization

Kroner

20.40

3.92 12.24 16.16 36.56

-

11

-

62. The long-term debt of SEAS amounted on December 31, 1957 to Kr..20.4 million consisting of Kr.2.76 million in the form of bonds and Kr,.17.64 million in long-term loans. Of this debt, 60% was secured by a mortgage on the company's fixed assets. The average maturity of the debt is 13 years and the average rate of interest 5.4%. 63.. The company pays dividends of 7% on the preferred stock, and 4% on the common stock (in addition to the discount). Rates are computed in such a way as to produce a net profit sufficient to cover dividend paymenits and a legel reserve of Kr.125,C0C a year. Any surplus is, in effect, charged to extreordinary depreciation. 64. The construction through 1961 calls for f ollowos:

program of SEAS for the 4 calendar years 1958 expenditures of Kr.85.4 million to be met as Ylillion

Net increase in debt Internal cash generation

65..

Kroner

30.00 55.40 85.40

SEASwould thus cover 65% of its

expansion cost out of its own

calshresources. 66. New borrowings would amount to Kr.42.7 million, of which Kr.20.7 miLlion would be the company's share of the proceeds of the proposed loan or(-ration. 67. Actual and projected balance and 1961 are summarized below:

sheets

of SFAS as at the

December 31: ASSETS F4ixedAssets and Work in Progress Depreciation reserve Net Fixed Assets and Work in Progress Net Current Assets Investments

Million 957 104.19 75.3 28.81 12.74 *58 42 .13 1

end of 1957 Kroner 1961 189.59 123.88 65.71 6.35 8 72.6L

L DkBIL TrES Long-term debt Share Capital Reserves and earned

surplus

68. The debt/equity ratio would change to 76/44 at the end of 1961. By charging depreciation, SEAS considerably understates assets, and, indirectly, the company's net normal depreciation at an average rate of

20.40 16.17 5.56 L2.13

50.40 16.17 6.07 _72_6

from 56/44 at the end of 1957 all its surplus to extraordinary the book value of its fixed worth. If SEAS charged only 5% a year, the surplus account

-

12

-

in 1961 would be increasedfrom Kr.6 million to Kr.32million. This would raise the total equity to Kr.4S million and the debt/equityratio to 51/49. 69. The debt service coverage is expectedto average about 2. during the 4-year period. D*

Bornholm

70. This company is a cooperative,formed in 1945 to coordinatethe supply of power on the island of Bornholm. The members are 7 municipalities and 3 small rural distributing cooperatives. The existing facilities include a 16 ISWthermal plant, a 1.1 diesel plant and 2S5 kilometers of 10 kv transmissionlines. Total sales in 1957/5 amounted to 29 million kwh. Of this about 6 million kwh were sold directlyto industrialconsumers. 71,. The total fixed assets in operationare valued at cost at Kr.S.2 million (i .2 million). In addition the cooperativehas constructionwork in progress valued at Kr.7.9 million. 72.. The cooperative charges its 5 owner-consumerswholesale rates sufficient to cover all cost, including interest and generous allowances for depreciation. Rates are determinedon the basis of an annual operating budget. All surplus with the exception of a very small allocation to legal reserves, is charged to extra-ordinary depreciation. This explains why present fixed assets in operation are shown on the balance sheet as almost fuLly depreciated,although their average age is less than 10 years. 73,. The construction program of Bornholm calls for expenditures of Kr.7 million over the next 4 years. The financing plan is as follows: jillion Kroner Construction costs Increase in Working Capital Total Required Net Increase in Debt Internal cash generation Total Available

7.00 7.51 3.00

L1. 7.51

74. Bornholm would thus cover about 64% of its expansion costs out of its own resources. 75. New long-termborrowingswould amount to Kr. 7 million, of which Kr.3.5 million from the proceeds of the proposed loan Operation. A large part of the other long-term borrowings would be used to repay short-term loans. The debt service coverage would average about 1.7 during the 4-year period.

- 13 76. Actual and estimatedbalance sheets of the cooperativeas at Yarch 31, 1958 and 1962 are summarizedbelow:

Yarch 31: ASSETS Fixed Assets Depreciation Reserve Net Fixed Assets in Operation Work in Progress Net Current Assets L ABILITES Long-term debt Short-term bank loans Capital Reserves

Million Kroner 1958 1962 8.24 7.88 .36

21.81 12.31 9.50

7.57 1.17 9.10

1.00 1.68 12.18

5.58 2.23 1.20 -.2 9.10

10.81 1.20 .17 12 .1

77. On the basis of these figures, the debt/equity ratio would change from 81/19 in 1958 to 90/10 in 1962. If, however, the part of the depreciation reserve, which is in fact a surplus, were shown as such on both balance sheets, the debt/equity ratio would remain stable at about 62/38, during the period. E.

Conenhaaen

78. The public utility services in the City of Copenhagen are organized as a departmentof the municipal organization,responsible for the operation of gas, electricityand district heating systems.The Director of the department is appointedby the MunicipalCouncil. 79. The power operationwas started in 1892. At present power is supplied from two main thermal plants with a total capacity of 273.5 MW. The primary distribution network consists of 265 kilometers of cables and 13 substations with a total capacity of 325 MVA. Total sales in 1957/58 amounted to 716 million kwh.

80.

The departmentmaintains separateaccounts and prepares annual profit and loss statements,for each of its utility operations,but all funds remain in the City Treasury with the only exception of small allowarLcesfor working capital. 81. Electricityrates are establishedby the City Council at a level high enough to cover all operatingcosts of the electricityservices, including depreciationand interest,and to produce a substantialnet profit. The income from power operationsis used by the City to meet general expenses of its municipal administration. Rates contain,therefore,an element of municipal taxation.

- 14 82. Apart from its current budget, the City prepares an annual investment budgetcoveringall new construction expenditures, includingpower installations.Construction expenditures are met partlyout of the City's own resources(including profitsfrom utilityoperations) and partlyout of long-termborrowings, specifically earmarkedfor a givenprojector group of projects. 83. Estimated income and cash flow statements of the Copenhagen electricity services have been prepared, but since it has no financial autonomy, these statements have to be considered as purely pro-forma. 84. In 1957, the net profit of the services after interest and depreciationamountedto nearlyKr.45millionor over 31% of revenuesfrom the sale of power. It is expectedthat profitswill remainat about the same highlevel in the next few years. 85. The city powerprogramcallsfor construction expenditures of Kr.167.66millionover the 4 yearsfrom April1, 195$to March 31, 1962. The city plansto meet theseexpenditures as follows: Million

Copenhagen's shareof proposed loan operation Municipality's own resources

Kroner

25.60 1L2.06 167.66

%

15 85

100

86. Intereston fundsadvancedby the City for power operations was covered5.3 times in 1957/58,and the coveragewill decreaseslightlyto 4.2 times in 1961/62. Totaldebt servicecoveragewill averageabout2.0 timesduringthe period. 87. The averagematurityof the debt of the City of Copenhagenis about 12 years,and the averagerate of interestis 5.3%. 88. Balancesheetsfor the power operations alone,and the end of the construction period, would show the following position: Mrch 31: ASSETS FixedAssetsand Work in Progress Depreciation Reserve Net Fixed Assetsand Work in Progress Net Current Assets

YMillion Kroner 19$8 1962 290.05 -82.30 207.75

472.01 2aL.12 347.89

38.23

30.82

260.88

37821

260.88

378.71

LIABILITIES City of Copenhagen

- 15 F.

Aalborg

89. This undertaking is owned by the City of Aalborg and forms a part of the municipal administration. It is, however, operated as an independent commercialenterprise becausein additionto the distribution of power to the City, it suppliesalso powerto the area of northJutland. The Directorof the organization is appointed by the IMnicipal Council which also approvesthe annualbudget. 90. The existingthermalplant in Aalborghas an installedeapacityof 68.7 HW. The undertaking operates67 kilametersof 150 kv transmission linesand the distribution networkservingAalborg. Total salesin 1957/ 58 amountedto 230 millionkwh of whichabout26% was suppliedto the city. 91. While a municipaldepartment, the City of Aalborghas more financial autonomythan that of Copenhagen.Profitsfrom poweroperations are kept separatefrom othercity fundsand retainedearningsand depreciation allowancesof the departmentare earmarkedfor powerexpansionprojects. 92. The powerrateschargeddo not containany elementof municipal taxation. Depreciation allowancesare generous,at about8% a year. Profitshaveaveragedabout 8% of revenuesin the past 5 years,and are expectedto increasesomewhatin 1960. 93. The capitalization of the departmentat Yarch31, 1958was as follows: MillionKroner Long-term debt Capital,ownedby the city Reservesand surplus

59-35 15.91 3.58 78.84

94. All the debt is in the form of long-termloansby localbanks, savings association, and insurance companies. The average term of the debt is slightly over 9 years and the averagerate of interestis 5.2%. About 44% of the debt is secured by a mortgage. 95. The Cityts power program calls for construction expenditures totalling Kr.86.79 million from April 1, 1958 to March 31, 1962. The 4-year financing plan is as follows: Million Kroner Construction costs Increasein workingcapital Repaymentof short-termloans TotalRequired

86.79 3.60 4.50 94.89

Net increasein long-termdebt Depreciation allowance Retainedearnings

55.28 26.61 13.00 94. 9

-

16 -

96. The power department would thus cover 42% of its construction out, of its internal cash generation.

costs

97. New long-term borrowingswouldamountto Kr.78million,including Kr.23.5millionfromthe proceedsof the proposedloan operation.The debt service coverage would average about 1.5 duringthe period. 98. Actualand estimatedbalancesheetsof the Aalborgpowerdepartmert as at March31, 1958 and 1961are summarized below: Mlarch 31: ASEETS Fixed Assetsand Work in Progress Depreciation reserve Net FixedAssetsand Work in Progress Net Current Assets Total L TABILITIES Long-termdebt Short-term bank loans Share Capital Reserves and Surplus Total

MillionKroner 1958 1962 95.08 15.70 79.38 3.96 83.34

181.87

59.35 4.50 15.91 3.58 83.34

114.63 _ 15.91 16.58 147.12

139.56 7.56 147.12

99. The debt/equity ratiowould changefrom 77/23in 1958to 79/21in 1962. The remark made on the debt/equity position of SEASand Bornholm also applies but to a lesser extent, to the case of Aalborg. VII. CONCLUSIONS 10C). The powerprojectsto be constructed by the six Danishpowerundertakingsare technically sound. The cost estimatesare reasonable.The new generatingfacilities will producepowerat a moderatecost to meet the conservatively estimatedincreasein consumption. 101. The organization and managementof the undertakings are good. Experienced personnelwill be responsible for the executionand operation of the projects. 102. The financialpositionof the six undertakings is sound. The powerrateschargedare set at levelsinsuringthata major part of future expansioncan be financedfrom internally generatedfunds. It is reasonable to assumethat this conservative rate policywould alsobe followed in futureyears. 103. The six powerprojectsforma suitablebasis for a Bank loan of $20 millionequivalent.A term of 20 years includinga periodof grace of 32yearswouldbe appropriate.

- 17

-

104. The loanwouldbe made to the Kingdomof Denmark. Appropriate arrangements havebeen concludedfor the loansto be made by the Government in Danishkronerto the six beneficiaries.The amountsof theEe loanswouldbe as follows: Million$ enuivalent IFV SEAS Copenhagen Midtkraft Aalborg

5.7 3.0 3.7 3-7 3.4

Bornholm

0.5

Total

20.0

ANNEX1 DANISH POWER SYSTaIS CAPACITYAND POWER DENA1ND GENERATINM East System

1955/56 Copenhagen

294

1956/57 294

1957/58 294

1958/59

335

1959/60

1960/61

1961/62

1962/63 371

335

335

371 520

520

270

270

270

395

395

395

96

96

96

96

171

171

171

171

660

660

660

826

901

901

1,062

1,062

Firm Capabilityin MW

563

563

563

664

739

739

900

900

Peak Demand in MW

465

465

510

540

580

620

660

705

Net Productionin million 1,850 kwch 0.45 Load Factor

1,970

2,100

2,250

2,415

2,590

2,775

2,965

0.48

0.47

0.47

0.48

o.48

0.48

IFV

SEAS Total Installed Capacity in MI

0.48

West System Midtkraft Aalborg Other Companies

127 64 366

127 64 366

127 64 373

127 64 500

127 107 500

150

150

107 500

107 500

150 167 560

Total Installed Capacity in MW

557

557

564

691

734

757

757

877

Firm Capability in SW

437

437

443

5L8

591

6c6

606

718

Peak Demand in NW

385

407

430

466

505

548

595

645

1,527

1,652

1,800

1,860

2,140

2,335

2,550

0.43

0.44

0.44

0.44

o.45

0.45

0.45

Net Productionina million 1,405 kwh Load Factor

0.43

ANNEX 2

DENMARK:GENERATINGCAPACITYAND POWERDEMAND (MEGAWATTS) 1200

1

1

1200

EAST SYSTEM INSTALLED CAPACITY

1000I

1000 _______

FIRM CAPABILITY

800B

600

800

600

600--r---------

POWERDEMAND

r

400

200

a

400

1

1

0

200

f

[

_

0

_

10001

1000 INSTALLED W|

T

800

t

t

CAPACITY

800

2

FIRM CAPABILITY

600

600

POWERDEMAND

400 7

S

4

t

1

1400

2001

200

t

O~~ 0

1955/56

56/57

57/58

58/59

59/60

L0

60/61

61/62

62/63

1963/64

IBRD-Economic Staff 1424

knnex 3 THERI'AL PGWLT-R PROJFCTS

Detailed

Descriptions

IFV

The Company is constructing a thermal plant at Asnaes near Kalundborg on -the west coast of Sealand. The plant will be equipped with two 135 I1W generating units. The turbines will have a reheat cycle and operate at a pressure of 1,780 p.s.i. and a temperature of 10000 F. The boilers will be fired by coal or oil and will each produce 0.9 million lbs. of steam per

hour. Sea waterwill be used for cooling. All necessaryauxiliaryequipment and an outdoorswitchyard will be provided. A coal storageyard with a capacityof 500,00 tonsand threeoil storagetankswith a capacityof 20,000tons each are being constructed adjacentto the plantand servedby a pierwith a free depthof about 40 feet. The plantwill be connectedwith the main load centerof Copenhagen will be conline. A new substation by a 102 kilometer120 kv transmission structedat Nyrupin centralSealandand threeexistingsubstations will be expanded.

The construction

of the

plant

was started

in 1955 and the first unit

is expectedto come into operationin the beginningof 1959. Construction work relatedto the secondunit will be startedin 1959and the plantis scheduledto be completedby the end of 1961. SEAS

near

The Masnedoe thermal plant is located on the south coast of Sealand units, the city of Vordingborg. It is equipped with three generating

two of 25 MW which came intooperationin 1940 and one 40 MW added in 1952. The expansion

to be carried

out consists

of the

installation

of an

80 1W generating unit. The turbineswill operateat a pressureof 1700 p.s.i. an(da temperature of 9800 F. The boileris of the Bensontype and will proIt will be firedby pulverized duce 0.55millionlbs. of steamper hour. coal, oil or a combination. Sea water will be used for cooling. The existequipment installed. ing powerhouse will be extended and necessary auxiliary of a 20,000 will be expanded by the construction Fuel storage facilities

ton fuel tank. A 29 kilometer

120 kv transmission

line

(including

5 kilometers

sea-

on the island of Laaland will be constructed. cable) and a 60 MVAsubstation in 1958 and the new unit is The expansion of the Masnedoe plant was started

scheduled to come into operation

in the beginning

of 1961.

Copenhagen The H.C. Oerstedplant is locatedin the southsectionof the port of Copenhagen.The plantconsistsof three sections,the firstwas completedin 1920but rebuiltin 1955,the secondcompletedin 1926and the capacity is 159 NW. third in 1933. The present installed

Annex 3. Page 2 The second section is now to be rebuilt. A new boilerhouse will be constructed and three boilers installed. They will be fired by coal and will each have a capacity of 0.40 million lbs. per hour. One of the two existing low pressure turbogenerating units will be replaced by a 36 FM back pressure unit operating at a pressure of 1560 p.s.i. and a temperature of 100 0 °F. The low pressure steam from the turbine will partly be used for district heating and partly fed to the low pressure turbines in section three of the plant. The boiler capacity is sufficient for the later installation of an additional 40 MW high pressure turbogenerator unit. The new section will be equipped with all necessary auxiliary equipment. A new 60 MVA transformer station will be constructedat Bellahoej to improve the interconnectionbetween the networks in Copenhagenand the rest of Sealand. It will be connectedto the existing 120 kv cable between the H.C. Oersted plant and the Glutegaardensubstationof IFV. Constructionwork will be started in the beginning of 1959 and the back pressure turbogenerator unit and two boilers are scheduledto be in operation by the end of 1961. The third boiler is to be completed by the middle of 1962. IlItkra

ft

The existing thermal plant, located at the harbor of the city of .Aarhus,has an installedcapacity of 119 MW. The eight generatung units were installedduring the period 1928 to 1953. A new section will now be constructedadjacent to the existing plant. The boilerhousewill be equippedwith two boilers, each with a capacity of 0.37 million lbs. of steam. They will burn both coal and oil. The turbo generator unit will have a capacity of 70 MW. The turbine will, however, have a tapping of low pressure steam for district heating. When fully utilized, the generating capacity of the unit will be reduced to 60'PW. The turbine will operate at a pressure of 1900 p.s.i. and a temperatureof 10000 F. All necessaryauxiliary equipment. includinga 75 MVA transformerwill be installed. Work on the new section was started in 1957 and it is scheduled to come into operationby the end of 1960. AaLlborg

The existing thermnl plant is located at the harbor of the City of Aalborg. The first section with a capacity of 9 MW was completed in 1929 and the second section with two 30 MWunits was completed in 1954. A new section is now being added to the existing plant and equipped in two stages. The first stage includesthe installationof two boilers each with a capacity of 0.35 million lbs. of steam per hour and one conventional 40 W4turbogenerator and one 8 MW back pressure unit. The second stage consists of one boiler to produceC 4 mlraiUtnThs.of stoam per hcur and one 68 MWturbogenerator unit. The boilers will burn a combination of coal and oil. The turbines will operate at a pressure of 1280

Annex 3. Page 3 p.s.i. and a temperature of 980°F. The two conventional have tappings for supply of steam for district heating. will be equipped with the necessary auxiliary equipment.

turbines will The new section

A 150 kv transmissionline, about 130 kilometerslong will be constructed between Aalborg and Thisted to improve the supply of power to the north-western part of Jutland. It will terminate in a new 45 MVA,substation. The first stage of the addition to the power plant will pleted in the beginning of 1959. The second stage is scheduled inlto operation by the middle of 1962.

be comto come

Bornhol-m Two 60 kv transmission lines with a total length of 45 kilometers and three substations will be constructed. The work will be started in 19,58and is scheduled to be completed in 1960.

Annex 4 THERIAL POWERPROJECTS COST FSTIIvATES Total Cost 1.

Local Currency Kroner)

IFV Boiler Plant Turbogenerators Transformers Other Equipment Civil Works Overhead Interest Contingencies Transmission lines Substactions

Totals 2.

Forei=n Exchang (in million

26.75 21.37 2.10 14.52 20.15 2.77 12.98 10.50 13.60 =11 2'0

7.80 16.35 2.10 3.25 2.00

135.

39.50

4.10 3.910

18.95 5.02 -

11.27 18.15 2.77 12.98 10.50 9.50 _7.3.0

96.44

SEAS Boiler Plant Turbogenerator Transformer Other Equipment Civil Works Overhead Interest Contingencies Transmission lines Substations Totals

11.65 11.60 .90 10.95 12.80 1.00 3.10 4.80 2.60 1.90 1.30

3.90 8.90 .90 3.10 1.80

1.20 0.90 20,70

7.75 2.70 -

7.85 11.CO 1.00 3.10 4.80 1.40 1.00 40.60

3., COPENHAGEN Boiler Plant Turbogenerator Transformer Other Equipment Civil Works Overhead Interest Contingencies

26.00 3.80 .80 13.10 7.45 1.40 4.60 7.00

Substation Totals

12.00 3.60 .40 5.00 0.40

12.';0

4b0

2L&

2560

14.00 0.20 0.40 8.10 7.05 1.40 4.60 7.00

830

Annex A. Page 2 Tota CoSt, 4.

ForegRn Local Exchange Currency (in million Kroner)

MIDTKRAFT Boiler Plant Turbogenerators Transformer Other Equipment Civil Works

Overhead Interest Contingencies Totals

14.14 11.65 .85 14.50 16.60 1.50 6.80

5.20 10.65 .85 5.30 3.60

8.94 1.00 -

9.20 13.00 1.50 6.8o 6,

-

_ -6.00

724L

252.60

5. AALBORG Boiler Plant Turbogenerators Transformer Other Equipment Civil Works

Overhead Interest Contingencies TransmissionLines Substations

Totals

10.90 11.30 .70 6.20 8.60

3.70 9.40 .70 2.85 1.10

7.20 1.90 3.35 7.50

0.80

-

0.80

2.00 5.60 8.45

-

2.00 5.60 4.10

4.35 140

I=U&_

_3.2_ _.85

2

-4 A NO

6. BORNHOLM TransmissionLines Substations Totals

3.50 2.60 6210

2.05 1.4 3-5O

1.45 1.15 2,60

T1HERIALPOWERPFOJECTS D3lI14ARK

-O-NTS OF INCOI?bANDC'ANK FLw STrATV FORECASTS

IS5:7JOIRD (IF ) E S T I h AT E D

Actual 1957/58

Sales of energy (mi-llions of Kwh) Average rate per Kwhsold (in ore)

784.4 9.6

1959/60

1960/61

1961/62

1,011.0 8.3

1,283.0 6.8

1,498.0 6.7

1,569.0 6.6

of Kroners

ESTITIA.AT

1957/58

259.4 11.9

1958/59

270.0 10.6

1959/60

1960/61

1961/62

325.0 10.6

345.0 10.6

370.0 10.6

of Kroners

_illions

__

ED

Statements

revenues Operating including purchased Operating expenses, Depreciation Gross Incnme Interest, other than capitalized Net Profit Dividends Retained earnings Sources

Actual

1958/59

Millions

Income

NIDERAFT

power

84.82 53.96 23.22 7.64 3.64 4.0O 4.00

8

9.LI44 56.86 24.00 8.58 4.58 4.00 4.00

91.71 56.60 26.00 9.11 5.11 4.00 4.00

37.93 24.92 5.67 7.34 4.38 2,96

43.65 26.98 5.85 10.82 4.35 6.L47

46.o9 28.10 8.00 10.99 5.72 5.27

50.87 30.38 10.00 10.49 7.20 3 .29

103.93 66.23 28.00 9.60 5.60 4.00 4.00

109.08 69.26 30.00 9.62 5.82 4.00 4.00

39.57 21.90 6.05 11.62 4.26 7 36

-

-

7.36

2.96

6.47

5.27

3.29

11.62 6.05 17.67

7.34 5.67 13.01

10.82 5.85 16.67

10.99 8.00 16.99

10.49 10.00 20.49

9.57 5.20

8.05 9.10

7.98

6.80

-

-

-

-

-

-

-

7.64 23.22 30.o6

8.58 24.00 32.56

9.11 26.00 35.11 5.00

9.60 28.00 37.60

9.82 30.00 39.62

-

-

10.00 30.00 77.56

10.00

9.5o 14.00 61.10

10.00

-

-

11.10

49.82

29.77

19.81

31.44

36.14

37.66 1.00 38.66

33.53 1.00 34.53 5.11 7.10 12.21 5.00 4.00 55.74 (-) 5.63

40.15 1.00 41.15 5.60

8.60 2.60 11.20

20.04 20.04

20.93 20.93

20.50 20.50

10.57

4.26 4.97 9.23 -

4.38 -

8.18 13.78 4.00 58.93 2.17

21.27 1.00 22.27 5.82 .65 16.87 23.34 4.00

4.35 6.15 10.50 -

5.72 6.42 12.14 -

7.20 37 6.89 14.46 -

49.61

20.43 9.34

of Funds

Gross Income, Depreciation

as above

Net Receipts from Operations Sales of Assets Long-term borrowings: Proposed IBRD loan borrowings Other long-term Sbort-terv loans Total Application of funds including Construction expenditures capitalized interest Project to be finarced by the proposed IBRD loan Other construction Total Construction Other expenditures Interest, other than capitalized Repayment of proposed IBRD loan Repayment of other long-term borrowings debt service Total long-term loans Repayment of short-term Dividends Total foF the year Cash surplus

Cash balance at beginning Cash balance

of year

at end of year

Tines interest earned Times debt service covered

from operations

-

26.00 _l.00O

67.86

9.25 30.62 39.67 10.42 3.64 3.78 7.42 1.23 4.00 62.44 5.42

5.00

-

4.58 4.52 9.10 5.00 4.00 46.76 20.82

-

50.11

-

-

1.00

.21

-

2.53

5.81 10.19 1.00 31.23 (-)11.42

11.87

(-)4.02

1.40

22.22

16.59

18.76

1.40

22.22

16.59

18.76

18.97

11.87

2.1

1.9

1.8

1.7

1.7

2.7

1.7

IC.1

3.6

2.9

2.7

1.7.

1.9

1.3

.45

-

-

31.43 .01

32.64 3.50

.45

.46

28.47

10.57

25.03 3'44

3.96

3.96

7.40

2.5

1.9

1.5

1.6

1.6

1.4

.46

by receipts

HE8M4AL POWERPROJECTS D&NMARK

FORECAST OF INCOMEAND CASTiFLOWSTATaIENTS BORNHOLM

SEAS E S T I M A TE D

Actual 1957

Sales of energy (millions Average rate per Kwh (in

290.3 12.0

Kwh) ore)

1958

1959

1960

1961

320.0 12.0

352.0 12.0

387.0 12.0

426.0

28.7

12.0

16.5

Millions

of Kroners

F S T I M'A T E D

Actual 1957/58

_

1958/59

29.0 15.0

1959/60

30.0 15.0

__ lillions

of Kroners

4.36 2.80 1.20 .36 .34 .02

4.51 2.90 .96 .65 .63 .02

1960/61

1961/62

31.2 15.0

32.5 15.0

Inc ome Statements Operating revenues purchased Operating expenses, including Desreciation Gross Income Interest, other than capitalized Net Profit Dividends Retained earnings

Sources

pomer

35.84 23.45 l0.h17 1.92 1.02

39.30 26.24 10.50 2.56 1.63

42.81 28.15 0 3.16 2.24 .92 .80 .12

46.84 30.03 13.00 3j1 2.88 .93 .80 .13

51.52 34-43 13.50 3.59 2.66

g90

.93

.77 .13

.80 .13

1.92 10.47 12.39 .86

2.56 10.50 13.06

3.16 11.50 14.66

-

-

-

-

3.81 13.00 16.81 -

11.62 11.62 24.417

10.00 10.00 23.06

10.35 2.00 12.35 27.01

10.35 6.00 16.35 33.16

3.l46 13.43 16.89 1.02 2.70 3.72 -

8.50 7.00 15.50 1.63 3.00 4.63 -

23.50

21.140

4.75 3.49

.86 .40 .38 .02

4.69 3.00 1.06 .63 .61 .02

.9K5 .80

-

-

-

.13

.02

.02

.02

.02

3.59 13.50 17.09 -

.40 .86 1.26 .72

.36 1.20 1.56

.65 .96 1.61

.63 1.06 1.69

-

-

_

-

3.50

3.50 3.50 5.06

3.50 .60 5.71

4.89 3.10 .5 .56 .02

-

.02

of Funds

Gross income, Depreciation

as above

Net receipts from Operations Sales of Assets Sale of share capital Long-term borrowings Proposed IBRD loan Other long-term borrowings Total long-term borrowings bank loans Short-term Total Application

Dividends

.77 Total

for

the

year

Cash balance at beginning Cash balance

-

-

-

4.00 4.00 21.09

.97 2.95

--

-

1.69

1.79

of Funds

Construction expenditures, including capitalized interest Project to be financed by the proposed IBRD loan Other construction Total Construction Interest, other than capitalized IBRDloan Repayment of proposed Repayment of the long-tenm borrowings Total debt service loans Repayment of short-term

Cash surplus

-

.58 1.21 1.79

of year

at end of year

earned Times interest Times debt service covered receipts from operations

.80

21.38

20.93

3.09

2.13

5.34

8.43

6.50

6.50

30M00 2.24 3.00 5.24 -

27.90 2.88 3.00 5.o8 -

.80 36.04

(-)9.03

.80 34.58

(-)1.42

10.56

1.53 .11

4.50 7.50 12.00 2.66 .37 3.33 6.36 -

2.15 -

2.)40 -

2.15 .38 .42 oO _

2.140 .34 -

1.77

2.95

4.85

.34 .68

4.60 -

4.60 .63 -

.45

-

.61 -

.56 .06

.46

.46

-

1.07 .63

1.08 .43

5.68

1.70

1.51

1.08

.80 19.16

.03

1.17

1.38

1.41

1.40

2.04

1.17

1.38

1.41

1.40

1.68

.11

-

(-).0l

.28

.21

1.17

1.93

8.43

10.56

1.53

1.9

1.6

1.4

1.3

1.4

1.05

1.06

1.03

1.03

1.04

3.3

2.8

2.7

2.9

2.7

1.6

2.3

1.5

1.6

1.7

by net

THERMALPOWERPRFJECTS DENMARK

FORECASTOF INCOMEANDCASH FLOWSTATEMENTS COPENHAGEN

IT779

1958/59

E S T I M A TE D 1960/61 1959/60

708.8

729.0

724.0

19.5

19.5

18.0

Actual

Sales

of energy (millions of Kwh)

Averagerate per Kwh (in ore)

kALBORG

750.0

18.0

1961/62

Actual 195/778

1958/59

E S T IM1 A T E D 1959/60 1960/61

777.0

230.1

252.0

273.0

297.0

18.0

11.0

11.2

11.0

11.0

1961/62 327.0

11.0

Millions of Kroners

Millions of Kroners

Income Statements

28.23 18.71 5.13 4.39

29.57 16.25 6.06 7.26

32.23 17.23 7.23 7.77

36.67 19.47 8.19 9.01

1.58

2.72

4.07

4.06

4.58

2.20

1.67

3.19

3.71

4.43

53.50

3.78

4.39

7.26

7.77

9.01

14.50

3.98

5.13

6.06

7.23

8.19

66.50

6-8.0

7.76

9.52

13.32

15.00

17.20

10.47

9.80

142.90 76.42 11.26 55.22

145.57 79.68 11.59 54.30

134.85 69.47 12.23 53.15

140.00 73.50 13.50 53.00

145.00 77.00 14.50 53.50

10.48

10.97

11.26

12.00

12.50

44.74

43.33

41.-9

41.00

41.00

Grossincome,as above

55.22

54.30

53.15

53.00

Depredation

11.26

11.59

12.23

13.50

66.48

65.89

65.38

-

-

5.33

66.40

65.o9

70.71

revenues Operating purchased power expenses, including Operating Depreciation GrossIncome Interest,

other

than

capitalized

Net Profit Sources

of

25.46 17.70 3.98 3.76

funds

from operations Net receipts Long-termborrowings Proposed IBRD loan Other long-term borrowings Total long-termborrowing Short-term loans

Total

-

5.33 -

-

-

10.47 -

9.o0 -

76.97

77. 0

-

-

24.34 24.34

22.50 22.50 -

7.00 14.00 21.0O -

9.50 14.60 24.10 -

32.02

34.32

39.10

14.00

15.00

17.00

4.50 36.60

7.00

3.40 10.40

27.60

Application of funds Construction expenditures, capitalized interest Project to be financed

including by proposed

Otherconstruction Total construction

Interest, otherthan capitalized Repayment of proposed IBRD loan Repayment

of other long-term borrowings Total debt service Repayment of short-term loans Total

Cashsurplusfor the year Cash balance at beginning of year

Cashbalanceat end of year Timesinterestearned Times debt service covered receipts from operations

4.93

20.20

29.12

22.40

-

28.30 20.30 10.48

24.12 29.05 10.97

22.32 42.52 11.26

22,07 51.19 12.00

22.50

26.08

44.90

26.00

20.00 30.48

-

-

50.70

20.00 30.97 60.02

21.00 32.26 74.78

21.00 33.00 84 1 9

7.70 5.00 12.70

5.87 12.70 18.57

5.2

4.9

2.2

2.1

IBRD loan

-

-

12.50 .39 22.00 34.89 79.7

1.58

8.06 22.06

2.72

10.20

11.75 2.68

23.10

27.20

14.43

4.07

4.06

8.10

4.58 .39

-

-

-

-

2.84 4.42 6.OO 36.50

4.24 6.96

5.21 9.28 34.38

6.04 10.10 37.30

26.24

2.50 31.52

.50

2.00

6.84

t-) 7.22

(-)1.99

(-).06

1.80

1.36

14.50 7.28

7.28

3.86

3.96

4.46

4.40

6.20

5.29

3.96

4.46

4.40

6.20

7.56

4.7

4.4

4.3

2.4

1.6

1.8

1.9

2.0

2.0

2.0

1.9

1.7

1.4

1.4

1.5

1.5

(-)4.07 18.57 14.50

.10

by net

DENMARK

THERMAL POWER PROJECTS Maiei Existing T,ansmi-ion

*

0

|

20 -o

Line,

ExiUt g Thermal Plants Proj used Thr r a1 Plt Expansi-on

40

so

e.o

-.,G ,(,0=1 . .':-:,

ROENNE N

A

1~~ DECEMBER

DECEMBER 1958

D5A

.

D

NY IBR0

IBRD-533

100 Kv