Public Disclosure Authorized CONFORMED COPY LOAN NUMBER 1469 YU LOAN AGREEMENT. Public Disclosure Authorized. (Second Power Transmission Project)

Transcription

1 Public Disclosure Authorized CONFORMED COPY LOAN NUMBER 1469 YU Public Disclosure Authorized LOAN AGREEMENT (Second Power Transmission Project) among INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and ELEKTROPRIVREDA BOSNE I IERCEGOVINE-SARAJEVO ZAJEDNICA ELEKTROPRIVREDNIH ORGANIZACIJA HRVATSKE-ZAGREB Public Disclosure Authorized ELEKTROPRENOS - SKOPJE ORGANIZACIJA ZA PRENOS ELEKTRICNE ENERGIJE U SASTATU ELEKTROSTOPANSTVA MAKEDONIJE-SKOPJE ELEKTROPRENOS-TITOGRAD ORGANIZACIJA ZA PRENOS ELEKTRICNE ENERGIJE U SASTAVU ELEKTROPRIVREDE CRNE GORE-NIKSIC ELEKTROISTOK - BEOGRAD ORGANIZACIJA ZA PRENOS ELEKTRICNE ENERGIJE U SASTAVU ZDRUZENOG ELEKTROPRIVREDNOG PREDUZECA-BEOGRAD ZDRUZENA ELEKTROGOSPODARSKA PODJETJA SLOVENIJE-MARIBOR and ELEKTROSTOPANSTVO MAKEDONIJE-SKOPJE Public Disclosure Authorized ELEKTROPRIVREDA CRNE GORE-NIKSIC ZDRUZENO ELEKTROPRIVREDNO PREDUZECE-BEOGRAD and ZAJEDNICA JUGOSLOVENSKE ELEKTROPRIVREDE-BEOGRAD Dated July 11, 1977

2 LOAN AGREEMENT AGREEMENT, dated July 11, 1977, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT, party of the first part (such party of the first part hereinafter called the Bank), ELEKTROPRIVREDA BOSNE I HERCEGOVINE-SARAJEVO (hereinafter sometimes called Elektroprivreda BiH), ZAJEDNICA ELEKTROPRIVREDNIH ORGANIZACIJA HRVATSKE-ZAGREB (hereinafter sometimes called ZEOH Zagreb), ELEKTROPRENOS - SKOPJE ORGANIZACIJA ZA PRENOS ELEKTRICNE ENERGIJE U SASTAVU ELEKTROSTOPANSTVA MAKEDONIJE-SKOPJE (hereinafter sometimes called Elektroprenos Skopje), ELEKTROPRENOS - TITOGRAD ORGANIZACIJA ZA PRENOS ELEKTRICNE ENERGIJE U SASTAVU ELEKTROPRIVREDE CRNE GORE - NIKSIC (hereinafter sometimes called Elektroprenos Titograd), ELEKTROISTOK - BEOGRAD ORGANIZACIJA ZA PRENOS ELEKTRICNE ENERGIJE U SASTAVU ZDRUZENOG ELEKTROPRIVREDNOG PREDUZECA-BEOGRAD (hereinafter sometimes called Elektroistok), ZDRUZENA ELEKTROGOSPODARSKA PODJETJA SLOVENIJE-MARIBOR (hereinafter sometimes called Elektrogospodarstvo Slovenije) parties of the second part (any of such parties of the second part hereinafter sometimes individually called a Borrower and all such parties of the second part hereinafter sometimes collectively called the Borrowers), and ELEKTROSTOPANSTVO MAKEDONIJE - SKOPJE (hereinafter sometimes called Elektrostopanstvo Makedonije), ELEKTROPRIVREDA CRNE GORE - NIKSIC (hereinafter sometimes called Elektroprivreda Crne Gore), ZDRUZENO ELEKTROPRIVREDNO PREDUZECE - BEOGRAD (hereinafter called ZEP) (any of such parties of the third part hereinafter sometimes individually called an Organization of Associated Labor and all such parties of the third part hereinafter sometimes collectively called the Organizations of Associated Labor), and ZAJEDNICA JUGOSLOVENSKE ELEKTROPRIVREDE - BEOGRAD, party of the fourth part (such party of the fourth part hereinafter called JUGEL), all such parties of the second, third and fourth parts acting in their own names and in the name of, and on behalf of, their respective constituent organizations. WHEREAS (A) the Borrowers have requested the Bank to assist in the financing of the foreign exchange cost of the Project described in Schedule 2 to this Agreement by making the Loan as hereinafter provided; (B) Parts I A 1 and I A 2 (a), (b), and (c) of the Project will be carried out by ELEKTROPRENOS-SARAJEVO, ORGANIZACIJA ZA PRENOS ELEKTRICNE ENERGIJE U SASTAVU ELEKTROPRIVREDE BOSNE I HERCEGOVINE-SARAJEVO (hereinafter called Elektroprenos Sarajevo),

3 -2- Part I A 2 (d) of the Project will be carried out by HIDROELEKTRANE NA TREBISNJICI - TREBINJE ORGANIZACIJA U SASTAVU ELEKTROPRIVREDE BOSNE I HERCEGOVINE-SARAJEVO (hereinafter called Trebinje), Parts I B 1 (a) and I B 2 (c) of the Project will be carried out by ELEKTROPRENOS-ZAGREB, ORGANIZACIJA ZA PRENOS ELEKTRICNE ENERGIJE U SASTAVU ZAJEDNICE ELEKTROPRIVREDNIH ORGANIZACIJA HRVATSKE-ZAGREB (hereinafter called Elektroprenos Zagreb), Part I B 1 (b) and I B 2 (a) of the Project will be carried out by ELEKTROPRENOS-MATULJI, ORGANIZACIJA ZA PRENOS ELEKTRICNE ENERGIJE U SASTAVU ZAJEDNICE ELEKTROPRIVREDNIH ORGANIZACIJA HRVATSKE-ZAGREB (hereinafter called Elektroprenos Matulji), Part I B 2 (b) of the Project will be carried out by ELEKTROPRENOS-SPLIT, ORGANIZACIJA ZA PRENOS ELEKTRICNE ENERGIJE U SASTAVU ZAJEDNICE ELEKTROPRIVREDNIH ORGANIZACIJA HRVATSKE-ZAGREB (hereinafter called Elektroprenos Split), Part I C of the Project will be carried out by Elektroprenos Skopje, Part I D of the Project will be carried out by Elektroprenos Titograd, Part I E and Part II E (b) and (c) of the Project will be carried out by Elektroistok, Part I F 2 (b) of the Project will be carried out by DRAVSKE ELEKTRARNE-MARIBOR, ORGANIZACIJA V SESTAVU ELEKTROGOSPODARSTVA SLOVENIJE-MARIBOR (hereinafter called Maribor), Part I F 1 (a) and (b), I F 2 (a) and (d) of the Project will be carried out by SAVSKE ELEKTRARNE-LJUBLJANA, ORGANIZACIJA V SESTAVU ELEKTROGOSPODARSTVA SLOVENIJE-MARIBOR (hereinafter called Ljubljana), and Part I F 1 (c) and I F 2 (c) of the Project will be carried out by SOSKE ELEKTRARNE-NOVA GORICA ORGANIZACIJA V SESTAVU ELEKTROGOSPODARSTVA SLOVENIJE-MARIBOR (hereinafter called Nova Gorica), Part II A of the Project will be carried out by Elektroprivreda BiH, Part II B of the Project will be carried out by ZEOH Zagreb, Part II C of the Project will be carried out by Elektrostopanstvo Makedonije, Part II D of the Project will be carried out by Elektroprivreda Crne Gore, Part II E (a) of the Project will be carried out by ZEP, Part II F of the Project will be carried out by Elektrogospodarstvo Slovenije, Part II G of the Project will be carried out by JUGEL and Part III of the Project will be carried out jointly by each of the Borrowers, ZEP, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, each of the Beneficiaries, as this term is hereinafter defined, and JUGEL. (C) Elektroprivreda BiH will assist Elektroprenos Sarajevo and Trebinje, all of which are constituent organizations of Elektroprivreda BiH, in the carrying out of their respective Individual Parts of the Project referred to in Recital B of this Preamble of this Agreement; ZEOH Zagreb will assist Elektroprenos

4 -3- Zagreb, Elektroprenos Split and Elektroprenos Matulji, all of which are constituent organizations of ZEOH Zagreb in the carrying out of their respective Individual Parts of the Project referred to in Recital B of this Preamble; Elektroprenos Skopje will assist Elektrostopanstvo Makedonije of which Elektroprenos Skopje is a constituent organization in the carrying out of its Individual Part of the Project referred to in Recital B of this Preamble; Elektroprenos Titograd will assist Elektroprivreda Crne Gore of which Elektroprenos Titograd is a constituent organization in the carrying out of its Individual Part of the Project referred to in Recital B of this Preamble; Elektroistok will assist ZEP of which Elektroistok is a constituent organization, in the carrying out of its Individual Part of the Project referred to in Recital B of this Preamble; and Elektrogospodarstvo Slovenije will assist Maribor, Ljubljana and Nova Gorica, all of which are constituent organizations of Elektrogospodarstvo Slovenije in the carrying out of their Individual Parts of the Project referred to in Recital B of this Preamble; for that purpose, ZEOH Zagreb, Elektrogospodarstvo Slovenije and Elektroprivreda BiH will make available to their respective constituent member organizations, and Elektroistok, Elektroprenos Skopje and Elektroprenos Titograd shall make available to ZEP, Elektrostopanstvo Makedonije and Elektroprivreda Crne Gore, respectively, for the carrying out of each of their respective Individual Parts of the Project and each of the Borrowers shall make available to JUGEL in order to assist JUGEL in the carrying cut of Part II G and Part III of the Project, a portion of the proceeds of their Individual Portion of the Loan (as those terms are hereinafter defined); (D) Elektroprivreda BiH has represented to the Bank that its constituent organizations pursuant to the provisions of the Self-Management Agreement of Elektroprivreda BiH and pursuant to the decision of the Workers' Council of Elektroprivreda BiH, dated February 10, 1977, have undertaken to make an amount of not less than eight hundred thirty million Dinars (Din 830,000,000), out of their resources available to Elektroprivreda BiH, Elektroprenos Sarajevo and Trebinje for the purpose of assisting Elektroprivreda BiH, Elektroprenos Sarajevo and Trebinje in carrying out their respective Individual Parts of the Project; (E) ZEOH Zagreb has represented to the Bank that its constituent organizations pursuant to the provisions of the Self-Management Agreement of ZEOH Zagreb and pursuant to the decision of the Assembly of ZEOH Zagreb, dated February 15, 1977, have undertaken to make an amount of not less than seven

5 -4- hundred and eighty-six million Dinars (Din 786,000,000), out of their resources available to ZEOH Zagreb, Elektroprenos Zagreb, Elektroprenos Split and Elektroprenos Matulji for the purpose of assisting ZEOH Zagreb, Elektroprenos Zagreb, Elektroprenos Split and Elektroprenos Matulji in carrying out their respective Individual Parts of the Project; (F) Elektrostopanst7o Makedonije has represented to the Bank that its constituent organizations pursuant to the provisions of the Self-Management Agreement of Elektrostopanstvo Makedonije and pursuant to the decision of the Workers' Council of Elektrostopanstvo Makedonije, dated February 18, 1977, have undertaken to make an amount of not less than four hundred eightythree million dinars (Din 483,000,000), out of their resources, available to Elektrostopanstvo Makedonije and Elektroprenos Skopje for the purpose of assisting Elektrostopanstvo Makedonije and Elektroprenos Skopje in carrying out their respective Individual Parts of the Project; (G) Elektroprivreda Crne Gore has represented to the Bank that its constituent organizations pursuant to the provisions of the Self-Management Agreement of Elektroprivreda Crne Gore and pursuant to the decision of the Workers' Council of Elektroprivreda Crne Gore, dated February 15, 1977, have undertaken to make an amount of not less than four hundred ninety-two million Dinars (Din 492,000,000), out of their resources, available to Elektroprivreda Crne Gore and Elektroprenos Titograd for the purpose of assisting Elektroprivreda Crne Gore and Elektroprenos Titograd in carrying out their respective Individual Parts of the Project; (H) ZEF has represented to the Bank that its constituent organizations intend pursuant to the provisions of the Self- Management Agreement of ZEP to undertake to make an amount of not less than eight hundred forty-eight million Dinars (Din 848,000,000), out of their resources, available to ZEP and Elektroistok for the purpose of assisting ZEP and Elektroistok in carrying out their respective Individual Parts of the Project; (I) Elektrogospodarstvo Slovenije has represented to the Bank that its constituent organizations pursuant to the provisions of the Self-Management Agreement of Elektrogospodarstvo Slovenije and pursuant to the decision of the Workers' Council of Elektrogospodarstvo Slovenije, dated February 25, 1977, have

6 undertaken to make an amount of not less than one thousand fiftysix million Tinars (Din 1,056,000,000), out of their resources available to Elektrogospodarstvo Slovenije and to Maribor, Ljubljana and Nova Gorica for the purpose of assisting Elektrogospodarstvo Slovenije and Maribor, Ljubljana and Nova Gorica in carrying out their respective Individual Parts of the Project; (J) Each of the Borrowers, ZEP, Elektrostopanstvo Makedonije and Elektroprivreda Crne Gore propose to enter into an agreement (each such agreement in this Recital (J) sometimes referred to as a Local Loan Agreement) with a local bank, such local Loan Agreement providing, inter alia, for such local bank to assist: (a) such Borrower, ZEP, Elektrostopanstvo Makedonije and Elektroprivreda Crne Gore, JUGEL and such Beneficiaries in carrying out their Individual Parts of the Project; and (b) such Beneficiaries which are their constituent member organizations and JUGEL in carrying out their respective Individual Parts of the Project by making a portion of such Local Loans available to them through the Borrowers, ZEP, Elektrospanstvo Makedonije and Elektroprivreda Crne Gore, as appropriate by: (i) making to such Borrower, ZEP, Elektrostopanstvo Makedonije and Elektroprivreda Crne Gore a loan in Dinars (such loan in this Recital (J) referred to as a Local Loan); and (ii) undertaking to lend to such Borrower, ZEP, Elektrostopanstvo Makedonije and Elektroprivreda Crne Gore any such additional funds as may be required to carry out their Individual Parts of the Project and such Individual Parts of the Project to be carried out by such Beneficiary or Beneficiaries which is or are their respective constituent member organizations over and above the funds made available to such Borrower, ZEPF, Elektrostopanstvo Makedonije and Elektroprivreda Crne Gore under its Local Loan and to such Beneficiary and JUGEL through such Local Loan, the Loan provided hereunder and the funds referred to in Recitals (D) through (I) of, and in Recitals (K), (L) and (M) of, the Preamble to this Agreement, such Local Loan Agreement to be concluded by each of the Borrowers, ZEP, Elektrostopanstvo Makedonije and Elektroprivreda Crne Gore with such local bank, and for a Local Loan of such an amount, as is specified hereinafter, namely: in the case of Elektroprivreda BiH, a Local Loan Agreement (hereinafter called the Privredna Banka Sarajevo Loan Agreement) with Privredna Banka Sarajevo for a Local Loan in an amount of 830,000,000 Dinars; in the case of ZEOH Zagreb, a Local Loan Agreement (hereinafter called the Privredna Banka Zagreb Loan Agreement) with Privredna Banka Zagreb for a Local Loan in the amount of 786,000,000 Dinars; in the case of

7 -6- Elektroprenos Skopje a Local Loan Agreement (hereinafter called the First Stopanska Banka Skopje Loan Agreement) with Stopanska Banka Skopje for a Local Loan in the amount of 397,000,000 Dinars; in the case of Elektrostopanstvo Makedonije, a Local Loan Agreement (hereinafter called the Second Stopanska Banka Skopje Loan Agreement) with Stopanska Banka Skopje for a Local Loan in the amount of 86,000,000 Dinars; in the case of Elektroprenos Titograd, a Local Loan Agreement (hereinafter called the First Investiciona Banka Titograd Loan Agreement) with Investiciona Banka Titograd for a Local Loan in the amount of 423,000,000 Dinars; in the case of Elektroprivreda Crne Gore, a Local Loan Agreement (hereinafter called the Second Investiciona Banka Titograd Loan Agreement) with Investiciona Banka Titograd for a Local Loan in the amount of 70,000,000 Dinars; in the case of Elektroistok, a Local Loan Agreement (hereinafter called the Beogradska Banka-II Osnovna Banka Beograd and Vojvodanska Banka Centrala Novi Sad Loan Agreement) with Beogradska Banka II Osnovna Banka Beograd and Vojvodanska Banka-Centrala Novi Sad for a Local Loan in an aggregate amount of 728,000,000 Dinars; in the case of ZEP, a Local Loan Agreement (hereinafter called the Second Beogradska Banka II Osnovna Banka Loan Agreement) with Beogradska Banka II 'snovna Banka Beograd for a Local Loan in the amount of 120,000,000 Dinars; in the case of Elektrogospodarstvo Slovenije, a Local Loan Agreement (hereinafter called the Ljubljanska Banka Ljubljana Loan Agreement) with Ljubljanska Banka Ljubljana providing for an undertaking to lend to Elektrogospodarstvo Slovenije any such additional funds as may be required to carry out its Individual Part of the Project and for Ljulbljana, Maribor and Nova Gorica to carry out their respect. 'e Individual Parts of the Project; (K) The Borrowers, Elektroprenos Makedonije, Elektroprivreda Crne Gore, ZEP and JUGEL have represented to the Bank that they intend to request additional loans from other lenders outside Yugoslavia in such aggregate amount as it shall require for the efficient execution of the Project (currently estimated to be equivalent to, about $59,000,000) on terms and conditions that will enabl. such Borrowers, ZEP, Elektrostopanstvo Makedonije, Elektroprivredna Crne Gore, the Beneficiaries and JUGEL to carry out the Project and its operations in accordance with sound financial practices, and the Guarantor will assist such Borrower to obtain suh loans (hereinafter called the Commercial Loans);

8 -7- (L) The Borrowers have represented to the Bank that they intend to contract from the European Investment Bank (hereinafter called EIB), a loan (hereinafter called the EIB Loan) in a principal amount of up to twenty-five million units of account (EUA 25,000,000) (equivalent to about thirty million dollars ($30,000,000)) at current exchange rates to assist in the financing of the Project, on the terms and conditions set forth in an agreement (hereinafter called the EIB Loan Agreement) to be entered into between the Borrowers and EIB; and (M) The Borrowers, ZEP, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore and JUGEL and the Beneficiaries have represented to the Bank that they intend to contract suppliers credits in an aggregate principal amount, currently estimated to be equivalent to about seventy million dollars ($70,000,000) to assist in the financing of Parts I and II, of the Project (hereinafter called the Suppliers Credits); WHEREAS the Bank has agreed, on the basis, inter alia, of the foregoing, to make the Loan available to the Borrowers upon the terms and conditions set forth hereinafter and in a project agreement of even date herewith between the Bank, party of the first part, and Elektroprenos Sarajevo, Trebinje, Elektroprenos Zagreb, Elektroprenos Split, Elektroprenos Matulji, Maribor, Ljubljana and Nova Gorica, parties of the second part (any such parties of the second part hereinafter sometimes individually called a Beneficiary and all such parties of the second part hereinafter sometimes collectively called the Beneficiaries); WHEREAS by an agreement (hereinafter called the Guarantee Agreement) of even date herewith between the Socialist Federal Republic of Yugoslavia (hereinafter called the Guarantor) and the Bank, the Guarantor has agreed to guarantee the Loan as to payment of principal, interest and other charges; WHEREAS the Bank, on the basis, inter alia, of the foregoing has agreed to make a loan to the Borrowers on the conditions hereinafter set forth; NOW THEREFORE, the parties hereto hereby agree as follows:

9 -8- ARTICLE I General Conditions; Definitions Section The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein, subject, however, to the modifications thereof set forth in Schedule 5 to this Agreement (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank, as so modified, being hereinafter called the General Conditions). Section Wherever used in this Agreement, unls3s the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Individual Part of the Project" used with respect to any of the Borrowers, ZEP, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, JUGEL or any of the Beneficiaries, means that Part of the Project referred to in Recital B of the Preamble to this Agreement and described in Schedule 2 to this Agreement which is designated with such Borrower's, ZEP's, Elektrostopanstvo Makedonije's, Elektroprivreda Crne Gore's, JUGEL's or such Beneficiary's name; (b) (i) "Bosna i Hercegovina", (ii) "Hrvatska", (iii) "Makedonija", (iv) "Crna Gora", (v) "Srbija" and (vi) "Slovenija" mean the respective Socialist Republics of such name, and "Republics" means collectively all such Socialist Republics; (c) "Individual Portion of the Loan", used with respect to any of the Borrowers, means such portion of the Loan as shall have been allocated to such Borrower for the purpose of assisting in the financing of such Borrower's Individual Part of the Project, and of such Individual Part of the Project of ZEP, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, JUGEL, and of such Beneficiary or Beneficiaries which are constituent member organizations of associated labor of, or basic organizations of, such Borrower to whom part of such Individual Portion of the Loan is to be made available by such Borrower for the purpose of assisting them in the carrying out of their Individual Parts of the Project, as described in Section 3.01 (c) of this Agreement;

10 -9- (d) "Social Accounting Service" means the Slu2ba Drustvenog Knjigovodstva referred to in Article 77 of, and in paragraph 1 item 5 of Article 281 of, the Guarantor's Constitution; (e) "Coordinating Committee" means the committee referred to in paragraph 1 of Schedule 7 to this Agreement; (f) "Special Account" means the account referred to in paragraph 2 (a) of Schedule 6 to this Agreement; (g) "Project Agreement" means the agreement between the Bank and the Beneficiaries of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement and all agreements supplemental to the Project Agreement; (h) "Dinar" means the currency of the Guarantor; and (i) "First Loan Agreement" means the loan agreement (Power Transmission Project) (Loan No. 836-YU) dated June 23, 1972, between the Bank on the one hand and each of the Beneficiaries, Elektroprenos Skopje, Elektroprenos Titograd, Elektroistok, and JUGEL on the other hand, as such loan agreement has been amended by the Accession and Amending Agreement (Power Transmission Project) (Loan No. 836-YU) dated July 10, 1974, between the same parties and Osijek (as this term is therein defined) and as such agreements have been further amended by the Loan Assumption Agreement (Power Transmission Project) (Loan No. 836-YU), of even date herewith between the same parties and Osijek and Elektroprivreda BiH, ZEOH Zagreb, Elektrogospodarstvo Slovenije, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore and ZEP, and such term includes all schedules to such agreements and all agreements supplemental to them. ARTICLE II The Loan Section The Bank agrees to lend to the Borrowers, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to eighty million dollars ($80,000,000). Section The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of

11 Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Bank and the Borrowers, for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Loan, provided, however, that except as the Bank shall otherwise agree, no further withdrawal shall be made from the Loan Account after June 30, 1978 in respect of Categories 1(a), 2(a), 3(a) 4(a), 5(a) and 6(a) of the table of withdrawal of the proceeds of the Loan set forth in paragraph 1 of said Schedule 1 to this Agreement, until the Borrowers have satisfied the Bank that the EIB Loan Agreement has been concluded and is in full force and effect and that arrangements satisfactory to the Bank have been made by the Borrowers to make available to such Borrowers and to the Beneficiaries, ZEP, Elektrostopanstvo Makedonije and Elektroprivreda Crne Gore and JUGEL, such portion of the proceeds of the Commercial Loans and of the Suppliers Credits as shall be required to meet, as and when needed, the estimated expenditures required for the carrying out of their reroective Individual Parts of the Project related to Part I of the :-roject. Section Except as the Bank shall otherwise agree, contracts for the purchase of goods or for civil works to be financed out of the proceeds of the Loan, shall be procured in accordance with the provisions of Schedule 4 to this Agreement. Section The Closing Date shall be December 31, 1982 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrowers and the Guarantor of such later date. Section The Borrowers shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section The Borrowers shall pay interest at the rate of eight and two-tenths per cent (8.20%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section Interest and other charges shall be payable semi-annually on March 15 and September 15 in each year.

12 Section The Borrowers shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. Section (a) Of the amounts in the currencies specified in Article IV of the General Conditions to be paid to the Bank by the Borrowers on each payment date pursuant to the foregoing Sections 2.05 through 2.08 of this Agreement, each of the Borrowers shall only be liable for, and shall pay a share equivalent to: (i) the commitment charge accrued on the principal amount of its Individual Portion of the Loan not withdrawn or cancelled and the additional commitment charge accrued on special commitments entered into by the Bank at the request of such Borrower; (ii) the interest accrued on the principal amount of its Individual Portion of the Loan withdrawn and outstanding; and (iii) a portion of the amount of each maturity of the Loan proportionate to the principal amount of its Individual Portion of the Loan, provided that such portion shall not have been repaid by such Borrower in advance of maturity as provided in paragraph (b) below. (b) Each of the Borrowers shall have the right, upon payment of all accrued interest and payment of the premium specified in Schedule 3 to this Agreement, and upon not less than 45 days' notice to the Bank, to repay in advance of matu'ity: (i) all of the principal amount of its Individual Portion of the Loan at the time withdrawn and outstanding; or (ii) all of the principal amount of the Loan to be repaid by such Borrower on one or more maturity dates in accordance with paragraph (a) above, provided that on the date of such prepayment there shall not be outstanding any portion of the Loan to be repaid by such Borrower and maturing after such maturity dates.

13 (c) It is the policy of the Bank to encourage the repayment prior to maturity of portions of its loans retained by the Bank in its own account. Accordingly, the Bank will sympathetically consider, in the light of all circumstances then existing, any request by a Borrower that the Bank waive the payment of any premium payable under paragraph (b) of this Section on prepayment of any portion of the Loan which the Bank has not sold or agreed to sell. (d) Each of the Borrowers may by notice to the Bank cancel any amount of its Individual Portion of the Loan which such Borrower shall not have withdrawn prior to the giving of such notice, except that none of the Borrowers may so cancel any amount of its Individual Portion of the Loan in respect of which the Bank shall have entered into a special commitment pursuant to Section 5.02 of the General Conditions. Section JUGEL is designated as the representative of each of the Borrowers for the purposes of taking any action required or permitted -to be taken under the provisions set forth or referred to in Sections 2.02, 2.05, 2.06, 2.07, 2.08 and 2.09 of this Agreement, and Articles III, IV and V and Section 6.05 of the General Conditions, and for such purpose, JUGEL and the Borrowers shall take such actions as are set forth in Schedule 6 to this Agreement. Section All obligations of the Borrowers under the Loan Agreement, unless such obligations shall have been expressly undertaken by each of the Borrowers separately, shall be joint and several and the obligation of any of them to comply with any provision of the Loan Agreement is not subject to any prior notice to, demand upon or action against any other of them. No extension of time or forbearance given to any of the Borrowers in respect of the performance of any of its obligations under the Loan Agreement and no failure of the Bank to give any notice or to make any demand or protest whatsoever to any of the Borrowers, or strictly to assert any right or pursue any remedy against any of them in respect of the Loan Agreement, and no failure by any of the Borrowers to comply with any requirement of any law, regulation or order, shall in any way affect or impair any obligation of the Borrowers under the Loan Agreement.

14 ARTICLE III Execution of the Project Section (a) Elektroprivreda BiH, ZEOH Zagreb, Elektroprenos Skopje, Elektroprenos Titograd, Elektroistok, Elektrogospodarstvo Slovenije, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, and ZEP shall: (i) each carry out its Individual Part of the Project as specified in Schedule 2 to this Agreement and in Recital B of the Preamble to this Agreement; and (ii) jointly carry out Part III of the Project: (A) all with due diligence and efficiency and in conformity with appropriate engineering, financial and public utility practices; and (B) all in cooperation with the other Borrowers, each of the Beneficiaries, ZEP, Elektrostopanstvo Makedonije and Elektroprivreda Crne Gore and JUGEL (as such cooperation is described in more detail in Schedule 7 to this Agreement) in a practical manner designed to ensure the most efficient construction and operation of the interconnected power transmission system, including the Project as a whole; and JUGEL shall cooperate with the Borrowers, ZEP, Elektrostopanstvo Makedonije and Elektroprivreda Crne Gore and the Beneficiaries and shall, in addition thereto, carry out Part II G of the Project with due diligence and efficiency and in conformity with appropriate engineering, financial and public utility practices; and Elektroprivreda BiH, ZEOH Zagreb, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, ZEP and Elektrogospodarstvo Slovenije shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) Without any limitation or restriction upon any of their other obligations under the Loan Agreement, each of the Borrowers shall cause each of the respective Beneficiaries, who is one of its respective constituent member organizations, to perform in accordance with the provisions of the Project Agreement all the obligations therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable such Beneficiaries to perform such obligations and shall not take or permit to be taken any action which would prevent or interfere with such performance. (c) Elektroprivreda BiH, ZEOH Zagreb and Elektrogospodarstvo Slovenije shall each make available to each such Beneficiary who is one of its respective constituent member organizations and to JUGEL, and Elektroistok, Elektroprenos Skopje and Elektroprenos

15 Titograd shall make available to ZEP, Elektrostopanstvo Makedonije and Elektroprivreda Crne Gore, respectively, and to JUGEL that portion of its Individual Portion of the Loan and that portion of its Local Loan and of their resources referred to in Recitals (D) through (I) of the Preamble to this Agreement which are required by such Beneficiary, JUGEL, ZEP, Elektrostopanstvo Makedonije or Elektroprivreda Crne Gore, as appropriate, to carry out its Individual Part of the Project, all to be under arrangements to be in form and substance satisfactory to the Bank. Section (a) In order to assist the Borrowers, ZEP, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore and JUGEL in the preparation of plans and specifications and, in the preparation of bidding documents related to dispatch facilities for their respective Individual Parts of the Project, the Borrowers, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore and ZEP (acting through JUGEL) and JUGEL shall employ engineering consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. Without limitation to the foregoing: (A) such terms and conditions shall be determined so as to take into account the recommendations of the consultants related to the management study carried out pursuant to Section 3.02 (b) of the First Loan Agreement, and (B) the Borrowers, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore and ZEP (acting through JUGEL) and JUGEL shall complete such bidding documents by December 31, 1978, or such other date as the Bank may agree. (b) Each of the Borrowers, Elektrostopanstvo Makedonije and Elektroprivreda Crne Gore and ZEP shall: (i) submit (through JUGEL) to the Bank for its comments, no later than December 31, 1978 or such later date as the Bank may agree, the final reports pertaining to the least cost development study carried out by Institut Za Elektroprivreda, Zagreb, Energoprojekt, Beograd, Institut Nikola Tesla, Beograd and Institut Milana Vidmarja, Ljubljana, respectively, pursuant to contracts dated November 24, 1976 each, and no later than June 30, 1978, or such other date as the Bank may agree the final reports pertaining to the tariff study carried out by Institut za Elektroprivredu, Zagreb pursuant to a contract dated November 24, 1976; (ii) submit (through JUGEL) to the Bank for its comments progress and interim reports related to such studies promptly upon their completion; and (iii) for the purpose of determining the scope of the work to be carried out under Part III of the Project, no later than three months after such final reports have been submitted to the Bank, exchange views

16 with the Bank (through JUGEL) on the recommendations of said study and on the scope of further work to be carried out, in connection with the said studies. (c) In order to assist Elektroprivreda BiH, ZEOH Zagreb, Elektrogospodarstvo Slovenije, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, and ZEP in the carrying out of the least cost development and tariff studies under Part III of the Project, Elektroprivreda BiH, ZEOH Zagreb, Elektrogospodarstvo Slovenije, Elektrostopantsvo Makedonije, Elektroprivreda Crne Gore, and ZEP (acting through JUGEL) shall, unless the Bank shall otherwise agree, employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank, such terms and conditions shall be based, inter alia, on the recommendations of the consultants referred to in paragraph (b) of this Section; Elektroprivreda BiH, ZEOH Zagreb, Elektrogospodarstvo Slovenije, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, and ZEP (acting through JUGEL) shall from time to time exchange views with the Bank on the progress of such studies to be undertaken under such Part III of the Project and shall furnish to the Bank in connection therewith all such information as the Bank shall reasonably request. (d) Except as the Bank shall otherwise agree, Elektroprivreda BiH, ZEOH Zagreb, Elektrogospodarstvo Slovenije, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, and ZEP shall, (through JUGEL) submit to the Bank for its comments, promptly after their completion, (A) the report or reports of the consultants employed in accordance with the provisions of paragraph (c) of this Section 3.02 of this Agreement, (B) Elektroprivreda BiH's, ZEOH Zagreb's, Elektrogospodarstvo Slovenije's, Elektrostopanstvo Makedonije's, Elektroprivreda Crne Gore's, and ZEP's plans to implement a program based on the recommendations contained in such report, and (C) all such other information related thereto as the Bank may reasonably, request. (e) JUGEL shall by December 31, 1977, or such other date as the Bank may agree, furnish to the Bank, and exchange views with the Bank on the recommendations regarding JUGEL's organization and staffing of the consultants referred to in Section 3.02 (b) of the First Loan Agreement, with the assistance of which the management study referred to in Part II A and B of the project described in Schedule 2 to the First Loan Agreement has been carried out and on the scope of further work to be carried out in connection with the said studies; promptly thereafter but in any

17 event no later than July 31, 1978, or such other date as the Bank may agree, Elektroprivreda BiH, ZEOH Zagreb, Elektrogospodarstvo Slovenije, Elektrostopantsvo Makedonije, Elektroprivreda Crne Gore, and ZEP shall cause JUGEL to, and JUGEL shall, carry out a plan of action satisfactory to the Bank to be based on such recommendations; and shall thereafter implement such recommendations with such modifications as the Bank may reasonably request. (f) In order to assist Elektroprivreda BiH, ZEOH Zagreb, Elektrogospodarstvo Slovenije, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, and ZEP in carrying out a management study under Part III of the Project, Elektroprivreda BiH, ZEOH Zagreb, Elektrogospodarstvo Slovenije, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, and ZEP (acting through JUGEL) shall, unless the Bank shall otherwise agree by December 31, 1977: (A) employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank, such terms and conditions shall be based on the recommendations of the consultants referred to in paragraph (b) of Section 3.02 of the First Loan Agreement and shall provide, inter alia, for appropriate recommendations on (i) organization, training, accounting and financial planning procedures, and (ii) establishing adequate management information systems, all for Elektroprivreda BiH, ZEOH Zagreb, Elektrogospodarstvo Slovenije, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, and ZEP; (B) shall, from time to time, exchange views (through JUGEL) with the Bank on the progress of such management study and shall furnish in connection therewith all such information as the Bank shall reasonably request, including inter alia, interim and final reports of such consultants; and (C) shall by December 31, 1978, or such other date as the Bank may agree, submit (through JUGEL) to the Bank the report and the recommendations of said consultants and a program of implementation based on such recommendations and shall thereafter implement such program in accordance with a timetable satisfactory to the Bank with such modifications as the Bank shall reasonably request. Section (a) Each of the Borrowers undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of its Individual Portion of the Loan against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by such Borrower to replace or repair such goods.

18 (b) Except as the Bank shall otherwise agree, each of the Borrowers, Elektrostopanstvo Makedonije, Elekt,uprivreda Crne Gore, ZEP and JUGEL shall cause all goods and services financed out of its Individual Portion of the proceeds of the Loan to be used exclusively for its Individual Part of the Project. Section (a) The Borrowers, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore and ZEP (acting through JUGEL) and JUGEL shall furnish to the Bank, for its approval, promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. The construction and procurement schedules shall provide for the carrying out of the Project in a way that will ensure concurrent completion of related facilities and the use of the individual parts thereof as soon as they are completed. (b) The Borrowers, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, ZEP and JUGEL: (i) shall maintain records adequate to record the progress of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Loan, and to disclose the use thereof in the Project; (ii) shall enable the Bank's accredited representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Loan and any relevant records and documents; (iii) shall furnish (acting through JUGEL) to the Bank within thirty calendar days after each calendar quarter a report, of such scope and in such detail as the Bank shall reasonably request, on the progress of their respective Individual Parts of the Project, during such quarter; without limitation to the foregoing: (I) each such report for the last calendar quarter in each year, shall contain, inter alia, (A) updated tables giving data for existing plant and new plant to be constructed in the next five years in the Yugoslav interconnected power system, (B) the balance of energy and capacities for the current year and the following five years, and (C) the overall investment program of all facilities earmarked for operation in the Yugoslav interconnected power system for the following five years, and (II) each such report of the second calendar quarter in each year shall contain monitoring data on technical, operational and financial performance for the past calendar year to be determined on the basis of criteria acceptable to the Bank; and (iv) (acting through JUGEL) shall furnish to the Bank all such information as the Bank shall reasonably request

19 concerning the Project, the expenditure of the proceeds of the Loan and the goods and services financed out of such proceeds. (c) JUGEL shall maintain records adequate for the purposes of Sections 2.10 and 3.04 (b) of this Agreement and 2.05 (b) of the Project Agreement. (d) Each of the Borrowers, Elektrostopanstvo Makedonije, and Elektroprivreda Crne Gore, ZEP and JUGEL shall enable the Bank's representatives to examine all.such plants, installations, sites, works, buildings, property and equipment of such Borrower, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, ZEP and JUGEL, respectively, and any such relevant records and documents, as the Bank may reasonably request. Section Each of the Borrowers, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore and ZEP shall take or cause to be taken all such action as shall be necessary to acquire not later than December 31, 1978, or such other date as the Bank may agree, all such land and rights in respect of land, including but without limitation all such rights of way and easements, as shall be required for the construction (and operation) of the facilities included in the Project ar.d shall furnish to the Bank, through JUGEL, promptly after such acquisition, evidence satisfactory to the Bank that such land and rights in respect of land are available for purposes related to the Project. Section In carrying out the works under its Individual Part of the Project, each of the Borrowers, Elektrostopanstvo Makedonije and Elektroprivreda Crne Gore and ZEP shall employ qualified and experienced contractors upon terms and conditions which shall include, inter alia, the requirement for each contractor to carry out the works under such contract in accordance with a firm completion schedule for its Individual Part of the Project and provisions under which each of the Borrowers, Elektrostopanstvo Makedonije, and El-.:troprivreda Crne Gore and ZEP, as appropriate, which shall be a party to such contract, shall be entitled to appropriate penalties in case of failure by the contractor to perform in accordance with the provisions of such contract, including without limitation the said completion schedule for the carrying out of such works. Section Without limitation or restriction to the provisions of paragraph (e) of Section 3.02 of this Agreement, JUGEL shall prepare with the assistance of the consultants

20 referred to in that paragraph (e), or of such other consultants whose qualifications, experience or terms and conditions of employment shall be satisfactory to the Bank, job descriptions, satisfactory to the Bank, for the personnel of the Project Unit referred to in Schedule 7 to this Agreement, and shall thereafter staff the Project Unit with qualified and experienced personnel in adequate numbers; without limitation to the foregoing, the Project Unit's organization, the qualifications and experience of its staff and the number of its staff shall be determined by the Coordinating Committee on the basis of the recommendations of the consultants referred to in paragraph (b) of Section 3.02 of the First Loan Agreement. ARTICLE IV Management and Operations of the Borrowers, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, ZEP and JUGEL Section Each of the Borrowers, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, ZEP and JUGEL shall at all times carry out its operations, manage its affairs and maintain its financial position in accordance with sound engineering, business, financial and public utility principles and practices, and under the supervision of experienced and competent management. Section Each of the Borrowers, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, ZEP and JUGEL shall take out and maintain with responsible insurers, or make other provisions satisfactory to the Bank for, insurance against such risks and in such amounts as shall be consistent with sound practice. Section Each of the Borrowers, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, ZEP and JUGEL shall operate and maintain its plants, equipment and properties, and from time to time make all necessary renewals and repairs thereof, in accordance with sound engineering and public utility practices. Section Each of the Borrowers, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, ZEP and JUGEL shall at

21 all times maintain the right to carry on its operations, and take all steps necessary to acquire, maintain and renew all rights and franchises which are necessary or useful in the conduct of its business. Section The Borrowers, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore and ZEP shall cooperate with each other, with each of the Beneficiaries and with JUGEL in operating and maintaining the facilities included in the Project, all with a view towards planning and operating their 380 kilovolt power transmission network as a single and integrated system. Section Except as the Bank may otherwise agree, none of the Borrowers, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, ZEP nor JUGEL shall sell, lease, transfer, assign or otherwise dispose of any of its rights, property or assets except in the ordinary course of its business. Section Each Borrower, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, ZEP and JUGEL shall by June 30, 1978, or such other date as the Bank may agree, enter into an amending agreement in form and substance satisfactory to the Bank with the others and with each of the Beneficiaries on the operation of their power transmission network. ARTICLE V Financial Covenants Section Each of the Borrowers, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, ZEP and JUGEL shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. Section Each of the Borrowers, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, ZEP and JUGEL shall: (i) have its accounts and financial statements on a consolidated basis (balance sheets, statements of income and expenses and related statements), for each fiscal year audited in accordance with appropriate auditi-ng principles consistently applied, by the Social Accounting Service or another competent and experienced independent auditing organization acceptable to the Bank; (ii) furnish to the Bank, tirough JUGEL, as soon as available, but in any case not later than four months after the end of each such

22 year, (A) certified copies of its consolidated financial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank, through JUGEL, such other information concerning its consolidated accounts and consolidated financial statements and the audit thereof as the Bank shall from time to time reasonably request. Section (a) Each of the Borrowers, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore and ZEP represent that at the date of this Agreement no lien exists on any of its assets as security for any debt except as otherwise currently reported to the Bank or stated in writing. (b) Each of the Borrowers, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, and ZEP under ke that, except as the Bank shall otherwise agree: (i) ii each such Borrower, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, or ZEP shall create any lien on any of its assets as security for any debt, such lien will equally and ratably secure the payment of the principal of, and interest and other charges on, the Loan, and in the creation of any such lien express provision will be made to that effect, at no cost to the Bank; and (ii) if any statutory lien shall be created on any assets of each Borrower, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore or ZEP as security for any debt, such Borrower, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, or ZEP shall grant, at no cost to the Bank, an equivalent lien satisfactory to the Bank to secure the payment of the principal of, and interest and other charges on, the Loan; provided, however, that the foregoing provisions of this paragraph shall not apply to: (A) any lien created on property, at the time of purchase thereof, solely as security for the payment of the purchase price of such property; or (B) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after the date on which it is originally incurred. Section (a) Commencing with the fiscal year starting January 1, 1978, Elektroprivreda BiH, ZEOH Zagreb, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, Elektrogospodarstvo Slovenije and ZEP shall each establish and maintain rates for the sale of power at such levels as shall provide revenues sufficient for the purposes set forth in paragraph (b) below, except that, if the Bank shall so agree, Elektroprivreda BiH, ZEOH Zagreb, Elektrostopanstvo Makedonije,