LOAN COMPLETION REVIEW AND REPORT

THE PROJECT INCLUDED THE CONSTRUCTION OF A DAM AND EARTHFILL DIKE PERMITTING WATER STORAGE OF 2, 300 MILLION CUBIC METERS; ALSO THE INSTALLATION OF TWO TRANSMISSION LINES LINKING THE HYDROELECTRIC PLANT WITH THE SUBSTATION THAT SERVES PORTO ALEGRE, AND EXPANSION AND IMPROVEMENT OF PORTO ALEGRE"S UNDERGROUND DISTRIBUTION SYSTEMS. REVIEWER NOTES THAT THE BORROWER,THE COMPANHIA ESTADUAL DE ENERGIA ELETRICA,HAS COMPILED WITH ALL COVENANTS,BUT THAT ITS FINAL REPORT IS STILL OUTSTANDING DUE TO THE UNEXPECTED EARLY DEPARTURE OF THE RESIDENT CONSULTING ENGINEER AND THE PRESSING NATURE OF OTHER BORROWER PROJECTS IN PROGRESS. USAID MONITORING IS TERMED COMPLETE WITH THE EXCEPTION OF FOLLOW-UP ON THE SUBMISSION OF THE BORROWER"S FINAL REPORT AND FINAL ANALYSIS OF ANNUAL AUDITED FINANCIAL STATEMENTS. MISSION REVIEWS JAN 1977 RECOMMENDATION THAT THE UNDISBURSED $329,616 BALANCE OF THE $26,486,138 LOAN BE DEOBLIGATED. REVIEWER JUDGES PERFORMANCE OF BORROWER PERSONNEL AND CONTRACTED CONSULTANT ENGINEERS TO HAVE BEEN OUTSTANDING. THREE PROJECT IMPLEMENTATION DELAYS TOTALING 2 1/2 YEARS WERE ATTRIBUTED TO THE BRAZILIAN GOVERNMENT"S RESTRICTIVE IMPORT POLICIES. A REQUISITIONED IBM COMPUTER HAS STILL NOT BEEN IMPORTED,BUT MISSION REVIEWER REGARDS EXISTING COMPUTER LEASING ARRANGEMENT TO BE AN ADEQUATE SUBSTITUTE