Project Agreement OFFICIAL DCMT SJ LOAN. Public Disclosure Authorized UMBER 2179 PE. Public Disclosure Authorized. (Sixth Power Project)

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized OFFICIAL DCMT SJ LOAN Project Agreement (Sixth Power Project) UMBER 2179 PE Public Disclosure Authorized between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and ENERGIA HIDROELECTRICA ANDINA (HIURANDINA) S.A. Public Disclosure Authorized Dated Xv2~L-Y/~, 1982

2 LOAN NUMBER 2179 PE PROJECT AGREEMENT AGREEMENT, dated god>- rit ('7, 1982, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and ENERGIA HIDROELECTRICA ANDINA (HIDRANDINA) S.A. (hereinafter called HIDRANDINA). WHEREAS (A) by the Loan Agreement of even date herewith between ELECTROLIMA S.A. (hereinafter called the Borrower) and the Bank, the Bank has agreed to make available to the Borrower an amount in various currencies equivalent to eighty-one million two hundred thousand dollars ($81,200,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that HIDRANDINA agree to undertake such obligations toward the Bank as are hereinafter set forth; (B) by a subsidiary loan contract to be entered into between the Borrower and HIDRANDINA, the proceeds of the loan provided for under the Loan Agreement will be made available to HIDRANDINA on the terms and conditions therein set forth; and WHEREAS HIDRANDINA, in consideration of the Bank's entering into the Loan Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Loan Agreement, the Preamble thereto, the Preamble to this Agreement and the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of Part C the Project Section (a) HIDRANDINA shall carry out Part C of the Project, described in Schedule 2 to the Loan Agreement and in the Schedule to this Agreement, with due diligence and efficiency and

3 S 2 - in conformity with appropriate administrative, financial, engineering and public utility practices. (b) For purposes of the carrying out of Part C of the Project, HIDRANDINA shall enter with the Borrower into the HIDRANDINA Subsidiary Loan Contract. (c) HIDRANDINA shall exercise its rights under the HIDRANDINA Subsidiary Loan Contract in such manner as to protect its interest and those of the Guarantor, the Bank and the Borrower. Except as the Bank shall otherwise agree, HIDRANDINA shall not take or concur in any action which would have the effect of assigning, amending, abrogating or waiving the HIDRANDINA Subsidiary Loan Contract or any provision thereof. Section (a) In order to assist HIDRANDINA in carrying out Part C of the Project, HIDRANDINA shall employ engineering consultants whose selection, qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank in accordance with the principles and procedures described in the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981, and in Part E of Schedule 4 to the Loan Agreement. (b) HIDRANDINA shall cooperate fully with such consultants in the performance of their services for the Project and make available to them all information relevant to the Project. (c) HIDRANDINA shall cause the consultants employed by it for purposes of the Project promptly to furnish to the Bank copies of the documents prepared by them for the Project, including reports and drafts thereof, plans, designs, specifications, work schedules and estimates of costs, in such number as the Bank shall reasonably request. (d) With respect to the evaluation and putting into effect of the recommendations and other conclusions contained in all documents referred to in the preceding paragraph, HIDRANDINA shall, during the carrying out of Part C of the Project and upon its completion, exchange views with the Bank on said recommendations and conclusions. Section Except as the Bank may otherwise agree, HIDRANDINA shall cause all services financed out of the proceeds

4 -3- of the Loan relent to it for the Project. by the Borrower to be used exclusively Section (a) HIDRANDINA shall furnish to the Bank, promptly upon their preparation, the plans, specifications, reports, contract documents and work and procurement schedules for Part C of the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) HIDRANDINA: (i) shall maintain records and procedures including separate accounts for Part C of the Project, adequate to record and monitor the progress of such Part of the Project (including its cost and the benefits to be derived from* it), to identify the services financed out of the proceeds of the Loan relent to it by the Borrower, and to disclose their use in the Project; (ii) shall enable the Bank's representatives to visit the facilities and construction sites related to such Part of the Project and any relevant records and documents; and (iii) shall furnish to the Bank at regular intervals all such information as the Bank shall reasonably request concerning Part C of the Project, its cost and, where appropriate, the benefits to be derived from it, the expenditure of the proceeds of the Loan relent to it by the Borrower and the services financed out of such proceeds. (c) Upon the award by HIDRANDINA of any contract for services to be financed out of the proceeds of the Loan relent to it by the Borrower, the Bank may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (d) Promptly after completion of Part C of the Project, but in any event not later than six months after the Closing Date or such later date as may be agreed for this purpose between HIDRAN- DINA and the Bank, HIDRANDINA shall prepare and furnish to the Bank a report, of such scope and in such detail as the Bank shall reasonably request, on the execution of Part C of the Project, its cost and the benefits derived and to be derived from it, the performance by HIDRANDINA and the Bank of their respective obligations under this Agreement and the accomplishment of the purposes of the Loan.

5 I4- (e) HIDRANDINA shall enable the Bank's representatives to examine all plants, installations, sites, works, buildings, property and equipment of HIDRANDINA and any relevant records and documents. Section (a) HIDRANDINA shall, at the request of the Bank, exchange views with the Bank with regard to the progress of Part C of the Project, the performance of its obligations under this Agreement and under the HIDRANDINA Subsidiary Loan Contract. (b) HIDRANDINA shall promptly inform the Bank of any condition which interferes or threatens to interfere with the progress of Part C of the Project, the accomplishment of the purposes of the HIDRANDINA Subsidiary Loan, or the performance by HIDRANDINA of its obligations under this Agreement and under the HIDRANDINA Subsidiary Loan Contract. Section HIDRANDINA shall take all such steps as shall be necessary on its part to ensure that the findings and recommendations of the studies to be carried out by HIDRANDINA under Part C of the Project are appropriately integrated with ELECTRO- PERO's studies for the Master Plan. ARTICLE III Management and Operations of HIDRANDINA Section HIDRANDINA shall at all times manage its affairs, maintain its financial position, plan its future expansion and carry on its operations in accordance with the HIDRANDINA Charter, and with appropriate administrative, financial, engineering, and public utility practices, and under the supervision of experienced and competent management assisted by experienced and competent staff in adequate numbers. Section (a) HIDRANDINA shall at all times take all steps necessary to maintain its legal existence and right to carry on operations, including, without limitation, Part C of the Project and shall, except as the Guarantor and the Bank may otherwise agree, take all steps necessary to acquire, maintain and renew such licenses, consents, franchises or other rights as may be necessary or useful for its operations (including such Part of the Project).

6 -5- (b) HIDRANDINA shall take all such action, including the provision of funds and resources, as shall be necessary to ensure that its facilities, equipment and property, are adequately operated, maintained, renewed and repaired. (c) Except as the Guarantor and the Bank shall otherwise agree, HIDRANDINA shall not sell, lease, transfer or otherwise dispose of any of its property or assets which shall be an important requirement for the efficient operation of its business and undertaking, including Part C of the Project. Secton HIDRANDINA shall take and cause to be taken all action as shall be required to ensure that its operations, including Part C of the Project, are carried out in conformity with appropriate pollution control and ecological standards. Section HIDRANDINA 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 appropriate practice. ARTICLE IV Financial Covenants Section HIDRANDINA shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial conditions. Section HIDRANDINA shall: (i) have its accounts, including the accounts referred to in Section 2.04 (b) of this Agreement, and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of its financial statements and of the accounts referred to in Section 2.04 (b) of this Agreement 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 such other information concerning the accounts and financial statements of HIDRANDINA and the audit thereof as the Bank shall from time to time reasonably request..r

7 -6- Section Except as the Bank and HIDRANDINA shall otherwise agree: (a) HIDRANDINA shall take all necessary steps, including filing applications with the Guarantor for tariff adjustments, so as (i) to yield adequate rates of return for each calendar year starting in 1982, calculated in accordance with Part B of the Schedule to the Guarantee Agreement and (ii) to permit the Guarantor to comply with Section 3.05 of the Guarantee Agreement; (b) HIDRANDINA shall, within the first two months of each calendar quarter, review the adequacy of its tariffs to produce an adequate annual return for the year in question and shall furnish to the Bank the results of such review; and (c) if any such review shows that HIDRANDINA would not earn an annual return required for the year in question, HIDRANDINA shall apply for an adjustment of its tariffs accordingly. Section Except as the Bank shall otherwise agree, HIDRANDINA shall not incur: (a) any long-term debt, unless its net revenues for the fiscal year next preceding such ircurrence or for a twelve-month period ended prior to such incurren,ce, whichever amount is the greater, shall be not less than 1.5 times the maximum long-term debt service requirement for any succ..-ding fiscal year on all long-term debt, including the long term debt to be incurred. For the purposes of this paragraph: (i) (ii) the term "long-term debt" shall mean all debt of HIDRANDINA maturing by its terms more than one year after the date on which it is incurred; the term "net revenues" shall mean gross revenues adjusted to take account of the rates applied by HIDRANDINA which are in effect at the time of the incurrence of long-term debt even though they were not in effect during the fiscal year or twelvemonth period to which such revenues relate, Iuss operating and administrative expenses, but before provision covering depreciation of assets, and other non-cn,-s' expenses to the extent provision

8 -7- therefor is required under the laws and regulations of the Guarantor, interest and other charges on long-term debt; and (iii) the term "debt service requirement" shall mean the aggregate amount of amortization (including sinking fund payments, if any), interest and other charges on long-term debt; (b) any short term-debt, unless the aggregate of all short-term debt incurred by HIDRANDINA, including the short-term debt to be incurred but deducting, to the extent the Bank is satisfied therewith, cash and the cash value of negotiable instruments held by HIDRANDINA, is equal to or less than one-sixth (1/6) of the operating, maintenance and administrative expenses (excluding depreciation and other non-cash provisions) of HIDRANDINA for the twelve-month period preceding such incurrence. For the purposes of this paragraph the term "short-term debt" means all debt of HIDRANDINA for money borrowed, including bank overdrafts, maturing by its terms on demand or less than one year after the date on which it was incurred. For the purposes of this Section, debt shall be deemed to be incurred on the date of execution and delivery of a contract, loan agreement or other instrument providing for such debt; provided, however, that in the case of guarantee of debt, debt shall be deemed to be incurred on the day the agreement guaranteeing such debt has been entered into but only to the extent that the guaranteed debt is outstanding. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section This Agreement shall come into force and effect on the date upon which the Loan Agreement becomes effective. Section This Agreement and all obligations of the Bank and of HIDRANDINA thereunder shall terminate on the date on which the Loan Agreement shall terminate in accordance with its terms, and the Bank shall promptly notify HIDRANDINA thereof.

9 Section All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. ARTI1CLE VI1 Miscellaneous Provisions Section Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when It shall be delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address hereinafter specified or at such other address as such party shall have designated by notice to the party giving such notice or making such request. The addr as so specified are: For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C United States of America Cable address: INTBAFRAD Washington, D.C. Telex: (ITT) (RCA) or (WUI) For HIDRANDINA: Energla Hidroel6ctrica Andina (Hidrandina) S.A. Avenida Central 717,80 Piso B Lima 27 Lima, Peru

10 -9- Cable address: HIDRANDINA Telex: PE ALPANDIN Section Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of HIDRANDINA, or by HIDRANDINA on behalf of the Borrower under the Loan Agreement, may be taken or executed by the Gerente General or such other person or persons as the Gerente General shall designate in writing, and HIDRANDINA shall furnish to the Bank sufficient evidence of the authority and the authenticated specimen signature of each such person. Section This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Regional Vice President Latin America and the Caribbean ENERGIA HIDROELECTRICA ANDINA (HIDRANDINA) S.A. Byiv Authorized Representative

11 Mayush Hydro Project SCHEDULE Description of Part C of the Project After completion of Part C.2 of the Prior Project, preparation of final design and tender documents therefor.

12 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Bank for Reconstruction and Development. In witness whereof I have signed this Certificate and affixed the Seal of the Bank thereunto this L1 day of/ V, 198. FOR SECRETARY