Amending Agreement to the Loan Agreement and the Project Agreements

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized CONFORMED COPY LOAN NUMBER 1200 CH (AMENDMENT) Amending Agreement to the Loan Agreement and the Project Agreements (Copper Sector Project) dated March 24, 1976 between REPUBLIC OF CHILE and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and CORPORACION NACIONAL DEL COBRE DE CHILE Public Disclosure Authorized and EMPRESA NACIONAL DE MINERIA Dated September 28, 1978

2 LOAN NUMBER 1200 CH (AMENDMENT) AMENDING AGREEMENT AGREEMENT, dated September 28, 1978, between REPUBLIC OF CHILE (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and CORPORACION NACIONAL DEL COBRE DE CHILE (hereinafter called CODELCO-CHILE) and EMPRESA NACIONAL DE MINERIA (hereinafter called ENAMI). WHEREAS (A) the Borrower and the Bank entered into a Loan Agreement (Copper Sector Project) dated March 24, 1976 (hereinafter called the Loan Agreement), for the purpose of making a loan to the Borrower (hereinafter called the Loan) for assisting in financing a project (hereinafter called the Project), as the Project is described in Schedule 2 to the Loan Agreement; (B) the Bank and Corporaci6n del Cobre (hereinafter called CODELCO) entered into a Project Agreement (Copper Sector Project) dated March 24, 1976 (hereinafter called the CODELCO Project Agreement), whereby CODELCO agreed to carry out Part A of the Project with the Borrower's assistance; (C) the Bank and ENAMI entered into a Project Agreement (Copper Sector Project) dated March 24, 1976 (hereinafter called the ENAMI Project Agreement) whereby ENAMI agreed to carry out Part B of the Project with the Borrower's assistance; (D) pursuant to the Borrower's Decree Law No dated April 1, 1976, CODELCO-CHILE succeeded CODELCO in all rights and obligations of the latter, including every right and obligation of CODELCO under the CODELCO Project Agreement, as stated in the certificate attached to the letter from CODELCO-CHILE to the Bank, dated May 17, 1976; (E) the Borrower had entered with CODELCO, pursuant to Section 3.01 (b) of the Loan Agreement, into a subsidiary loan agreement, dated March 24, 1976, and such agreement was supplemented and amended on June 3, 1976 by agreement between the Borrower and CODELCO-CHILE, as legal successor of CODELCO, and ENAMI (such subsidiary loan agreement as so supplemented and amended hereinafter called CODELCO-CHILE Subsidiary Loan Agreement); (F) the Borrower had entered with ENAMI, pursuant to Section 3.01 (b) of the Loan Agreement, into a subsidiary loan agreement,

3 - 2 - dated March 24, 1976 and such agreement was supplemented and amended on June 3, 1976 by agreement between the Borrower, ENAMI and CODELCO-CHILE (such subsidiary loan agreement as so supplemented and amended hereinafter called ENAMI Subsidiary Loan Agreement); (G) the Borrower has requested the Bank, and the Bank has agreed, to cancel the equivalent of $5,210,000 from the amount of the Loan reducing it to an amount in various currencies equivalent to $27,790,000; (H) the Borrower, CODELCO-CHILE, ENAMI and Empresa Nacional de Electricidad (hereinafter called ENDESA) have requested the Bank to modify the Project as follows: (1) by deleting Part A (i) thereof; (2) by deleting Part A (iii) thereof; and (3) by adding a new Part C thereto as hereinafter provided; and the Borrower and CODELCO-CHILE and ENAMI are willing to amend the CODELCO-CHILE Subsidiary Loan Agreement and the ENAMI Subsidiary Loan Agreement accordingly; (I) such new Part C of the Project will be carried out by ENDESA and, for that purpose: (i) the Borrower will relend to ENDESA part of the proceeds of the Loan by means of a subsidiary loan agreement to be entered into between the Borrower and ENDESA (hereinafter called the ENDESA Subsidiary Loan Agreement); (ii) ENDESA intends to obtain complementary financing for purposes of such new Part C of the Project as provided for in the Project Agreement of even date herewith between the Bank and ENDESA (hereinafter called the ENDESA Project Agreement; and (iii) CODELCO-CHILE will purchase electricity from ENDESA as hereinafter provided; and (J) the Bank is willing to make part of the proceeds of the Loan availeble upon the terms and conditions set forth in the Loan Agreement, in this Amending Agreement, and in the ENDESA Project Agreement. NOW THEREFORE, the parties hereto hereby agree as follows: ARTICLE I Definitions Section Wherever used in this Amending Agreement, unless the context otherwise requires, the several terms defined

4 -3- in the Loan Agreement, in the Preamble to this Agreement and in the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated March 15, 1974, have the respective meanings therein set forth. ARTICLE II Amendments to the Loan Agreement Section (a) Paragraphs (a) and (b) of Section 1.02 of the Loan Agreement are amended to read as follows: "(a) 'Project Agreement' means any of the three ing follow- agreements: (i) the agreements between the Bank respectively, and, CODELCO and ENAMI, both of even date and herewith; (ii) the agreement between the Bank and ENDESA September dated 28, 1978 (hereinafter called the ENDESA Agreement); Project as the same may be amended from time to such time term and includes every Schedule to the Project Agreement;"; and "(b) 'Subsidiary Loan Agreement' means any three of the agreements between the Borrower and, respectively, CODELCO, ENAMI and ENDESA, pursuant to Section 3.01 this (b) of Agreement, as the same may be amended from time and to time, such term includes the Schedule to the Subsidiary Agreement;" Loan (b) The following new paragraphs (e), (f) and (g) are added to Section 1.02 of the Loan Agreement: "(e) 'ENDESA' means Empresa Nacional de Electricidad, an empresa del Estado, and such term includes any thereto; successor and "; "(f) 'Interconnected System' means ENDZSA's generation and transmission facilities operating as an integrated system within the Borrower's territory;" "(g) 'Program' means ENDESA's program of investments described in Schedule 2 to the ENDESA Project Agreement;" and "(h) 'Regulations' means, collectively, Article 164 of the Borrower's Law No and fourth paragraph Article of 64 of the Borrower's Decree No. 825 as published in the Borrower's Official Gazette dated December 3, 1976."

5 -4- Section (a) The date of December 31, 1980 is substituted for the date of September 30, 1979 in Section 2.04 of the Loan Agreement; and (b) The following Section is added to Article II: "Section ENDESA is designated as representative of the Borrower for the purposes of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions with respect to expenditures of ENDESA for Part C of the Project." Section Section 3.01 of the Loan Agreement is as follows: amended (a) the words "and ENDESA" are hereby inserted in the third and seventh lines of paragraph (a) of such Section between the words "ENAMI" and "to"; (b) the words "and ENDESA" are hereby inserted in the first line of paragraph (b) of such Section between the words "ENAMI" and "respectively"; and (c) the mark "," is substituted for the word "and", and the words "and of Part 'C' of the Project in the case of ENDESA" are inserted after the word "ENAMI" in the third and fourth lines of paragraph (b) of such Section. Section The following Sections are added to Article IV of the Loan Agreement: (a) (b) "Section The Borrower shall take all necessary action to enable ENDESA to defer payments of customs duties and value-added taxes as required by Section 2.11 of the ENDESA Project Agreement." "Section The Borrower shall take and cause to be taken all action, including the provision, on terms satisfactory to the Bank, of funds, facilities and other resources necessary or appropriate to enable ENUE SA to carry out the Program as required by Section 2.0' if the ENDESA Project Agreement and shall not take or permit to be taken any action which would prevent, or interfere with, such carrying out of the Program."

6 -5- Section The words "or ENDESA" are hereby inserted after the word "ENAMI" wherever the latter appears in paragraphs (a), (b) and (c) of Section 5.01 and in paragraph (a) of Section 5.02, both of the Loan Agreement. Section Schedule 1 to this Amending Agreement is hereby substituted for Schedule 1 to the Loan Agreement. Section Schedule 2 to the Loan Agreement is hereby amended as follows: by deleting Part A (i) and (iii) of the Project; by replacing the numbers (ii) and (iv) in such Part A of the Project with the numbers (i) and (ii); and by including therein the following new Part C: "Part C: Portion of the Program that will permit completion of the expansion of the Interconnected System to tie it with El Salvador mining complex (ENDESA). (i) Additions to the Interconnected System Acquisition and utilization of fixed and portable telecommunications equipment for the Cerro Navia-Maitencillo transmission line. (ii) Extensions of the Interconnected System (a) Construction of about 280 km of a single circuit 220 kv transmission line connecting Maitencillo and Diego de Almagro (formerly Pueblo Hundido), including additional telecommunications equipment for the Maitencillo-Diego de Almagro - El Salvador lines; (b) Construction of a new substation at Diego de Almagro which will include switchgear equipment, one 30 MVAr linear reactor 220 kv, two 60 MVA step-down autotransformers 220/110 kv, (one stand-by), one 8 MVA stepdown transformer 110/23 kv, four single phase 12/16 MVA step-down autotransformers 110/80 kv, and one 28 MVA step-up transformer 11,5/80 kv to connect the gas turbines; and

7 -6- (c) Construction of a new substation at Cha5aral which will include switchgear equipment and one 8 MVA step-down transformer 110/23 kv. ARTICLE III Amendments to CODELCO Project Agreement Section The second Whereas clause of the CODELCO Project Agreement is hereby amended to read as follows: "WHEREAS by a subsidiary loan agreement of even date herewith between the Borrower and CODELCO, as supplemented and amended on June 3, 1976 by agreement between the Borrower, CODELCO-CHILE, as legal successor of CODELCO, and Empresa Nacional de Minerfa, and as further amended pursuant to Section 5.01 (c) of the Agreement dated September 28, 1978 between said parties and the Bank and ENAMI, the Borrower has agreed to relend to CODELCO-CHILE amount in various currencies equivalent to twelve mill,a five hundred and twenty thousand dollars ($12,520,000) out of the proceeds of the Loan on the terms and conditions therein set forth;" Section (a) The numbers "(ii) and (iii)" are hereby deleted from the second line of paragraph (a) of Section 2.02 of the CODELCO Project Agreement. (b) The number "(ii)" is hereby substituted for the number "(iv)" in the first line of paragraph (b) of Section 2.02 of the CODELCO Project Agreement. Section The following new Sections 3.07, 3.08 and 3.09 are hereby included in Article III of the CODELCO Project Agreement. (A) "Section CODELCO shall: (a) enter with ENDESA into a contract for the purchase by CODELCO of electricity from ENDESA for purposes of the operation of El Salvador mining complex, as required by Section 2.09 of the ENDESA Project Agreement; (b) during a three-year period to be counted from the first sale of electricity under such contract, not change or

8 -7- fail to enforce and cause ENDESA not to change or fail to enforce,such contract or any provision thereof." (B) "Section Except as the Bank shall otherwise agree, CODELCO shall: (a) at the reque3t of ENDESA, make, or cause to made, be a loan to ENDESA in an amount of not less $13,300,000 than equivalent, on financial terms and conditions which shall not be worse than those then prevailing in international the financial market for similar loans made be or made to to CODELCO or ENDESA; and (b) comply with each of CODELCO's obligations under each contract, for purposes of such loan, to which CODELCO is a party, and shall not change or fail to enforce, and cause not to change or fail to enforce, any such contract or any provision thereof." (C) "Section CODELCO shall take all such action as shall be necessary to ensure that, by March 31, 1981, the existing facilities of El Salvador mining complex shall be adapted, or replaced as the case may be, so as to enable the delivery to such mining complex of electricity supplied by ENDESA at a frequency of 50 hertz through the Interconnected System as expanded under the Program." ARTICLE IV Amendments to ENAMI Project Agreement Section The second Whereas clause of the ENAMI Project Agreement is hereby amended to read as follows: "WHEREAS by a subsidiary loan agreement of even date herewith between the Borrower and ENAMI, as supplemented and amended on June 3, 1976, by agreement between the Borrower and ENAMI and Corporaci6n Nacional del Cobre de Chile, and as further amended pursuant to Section 5.01 (d) of the Agreement dated September 28, 1978 between said parties and the Bank and CODELCO-CHILE, the Borrower has agreed to relend to ENAMI an amount in various currencies equivalent to four million seven hundred and seventy thousand dollars ($4,770,000) out of the proceeds of the Loan on the terms and conditions therein set forth;".

9 -8- ARTICLE V Effective Date; Termination Section This Amending Agreement shall not become effective until evidence satisfactory to the Bank shall have been furnished to the Bank that: (a) the execution and delivery of this Amending Agreement on behalf of, respectively, the Borrower, ENAMI and CODELCO-CHILE, have been duly authorized or ratified by all necessary governmental and corporate action; (b) the execution and delivery of the ENDESA Project Agreement on behalf of ENDESA have been duly authorized or ratified by all necessary governmental and corporate action; (c) the CODELCO-CHILE Subsidiary Loan Agreement has been amended in form and substance satisfactory to the Bank; (d) the ENAMI Subsidiary Loan Agreement has been amended in form and substance satisfactory to the Bank; and (e) the execution and delivery of the Subsidiary Loan Agreement on behalf of the Borrower and ENDESA have been authorized or ratified by all necessary corporate and governmental action. Section As part of the evidence to be furnished pursuant to Section 5.01 of this Amending Agreement, there shall be furnished to the Bank: (a) an opinion or opinions satisfactory to the Bank of counsel acceptable to the Bank showing, on behalf of the Borrower, that this Amending Agreement, the amendments to the CODELCO-CHILE Subsidiary Loan Agreement and to the ENAMI Subsidiary Loan Agreement, and the ENDESA Subsidiary Loan Agreement have been duly authorized or ratified by, and executed and delivered on behalf of, the Borrower, and that this Amending Agreement, the Loan Agreement as amended by this Amending Agreement, the CODELCO-CHILE Subsidiary Loan Agreement as amended pursuant to paragraph (c) of Section 5.01 of this Amending Agreement, the ENAMI Subsidiary Loan Agreement as amended pursuant to paragraph (d) of Section 5.01 of this Amending Agreement, and the ENDESA Subsidiary Loan Agreement, constitute valid and binding obligations of the Borrower in accordance with their terms; (b) a certificate satisfactory to the Bank issued, on behalf of CODELCO-CHILE, by its Chief Legal Counsel showing that this

10 -9- Amending Agreement and the amendment to the CODELCO-CHILE Subsidiary Loan Agreement have been duly authorized or ratified by, and executed and delivered on behalf of, CODELCO-CHILE, and that this Amending Agreement, the CODELCO Project Agreement, as amended by this Amending Agreement, and the CODELCO-CHILE Subsidiary Loan Agreement as amended pursuant to paragraph (c) of Section 5.01 of this Amending Agreement, constitute valid and binding obligations of CODELCO-CHILE in accordance with their terms; (c) a certificate satisfactory to the Bank issued, on behalf of ENAMI, by its Chief Legal Counsel, showing that this Amending Agreement and the amendment to the ENAMI Subsidiary Loan Agreement have been duly authorized or ratified by, and executed and delivered on behalf of, ENAMI, and that this Amending Agreement, the ENAMI Project Agreement as amended by this Amending Agreement, and the ENAMI Subsidiary Loan Agreement as amended pursuant to paragraph (d) of Section 5.01 of this Amending Agreement, constitute valid and binding obligations of ENAMI in accordance with their terms; and (d) a certificate satisfactory to the Bank issued, on behalf of ENDESA, by its Chief Legal Counsel, showing that the ENDESA Project Agreement and the ENDESA Subsidiary Loan Agreement have been duly authorized or ratified by, and executed and delivered on behalf of, ENDESA, and that the ENDESA Project Agreement and the ENDESA Subsidiary Loan Agreement constitute valid and binding obligations of ENDESA in accordance with their terms. Section This Amending Agreement shall come into force and effect on the date on which the Bank dispatches to the Borrower notice of the acceptance by the Bank of the evidence required by Section 5.01 of this Amending Agreement. Section If this Agreement shall not have come into force and effect by November 28, 1978, this Amending Agreement and all obligations of the parties hereunder shall terminate unless the Bank, after consideration of the reasons for the delay, establishes a later date for the purposes of this Section. The Bank shall promptly notify the Borrower, CODELCO-CHILE, ENAMI and ENDESA of such later date. If this Amending Agreement shall terminate under the provisions of this Section, the provisions of the Loan Agreement, of the ENAMI Project Agreement and of the CODELCO Project Agreement shall continue to read as if this Amending Agreement had not been executed. Section Any notice or request required or permitted to be given or made under this Amending Agreement shall be in

11 writing. Except as otherwise provided in Section 5.03 of this Amending Agreement, 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 specified in the Loan Agreement or in the CODELCO Project Agreement or in the ENAMI Project Agreement or in the ENDRSA Project Agreement, as the case may be, or at such other address as such party shall have designated by notice to the party giving such notice or making such request. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Amending Agreement to be signed in their respective names and to be delivered in the District of Columbia, United States of America as of the day and year first above written. Countersigned on behalf of the Controller General of the Republic of Chile REPUBLIC OF CHILE By /s/ Sergio de Castro Authorized Representative By Is/ Sergio de Castro INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Eugenio Lari Acting Regional Vice President Latin America and the Caribbean CORPORACION NACIONAL DEL COBRE DE CHILE By Is/ Jorge Vial S. Authorized Representative EMPRESA NACIONAL DE MINERIA By /s/ Augusto Matte Garces Authorized Representative

12 SCHEDULE 1 Withdrawal of the Proceeds of the Loan The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Equipment and mate- 7,400, % of foreign rials for Part A (i) expenditures or of the Project 100% of ex-factory price of locally produced goods (2) Equipment and 4,290, % of foreign materials for expenditures or Part B (i) of 100% of ex-factory the Project price of locally produced goods (3) Equipment and mate- 10,000, % of foreign rials for Part C of expenditures or the Project 100% of ex-factory price of locally produced goods (4) Technical Assistance (a) Part A (ii) of 3,970, % of foreign the Project expenditures (b) Part B (ii) of 223, % of foreign the Project expenditures (5) Unallocated (a) Part A of the 1,150,000 Project

13 Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (b) Part B of the 257,000 Project (c) Part C of the 500,000 Project TOTAL 27,790, For the purposes of this Schedule the term "foreign expenditures" means expenditures in the currency of a country other than the Borrower and for goods or services supplied from the territory of any country other than the Borrower. 3. The disbursement percentages have been calculiated in compliance with the policy of the Bank that no proceeds of the Loan shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Loan decreases or increases, the Bank may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Bank. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made: (a) in respect of expenditures prior to the date of this Agreement; provided, however, that on account of expenditures for purposes of Part C of the Project, no withdrawals shall be made in respect of expenditures prior to the date of the Amending Agreement between the Borrower and the Bank and CODELCO-CHILE and ENAMI, dated ; and (b) on account of expenditures for purposes of Part C of the Project unless the Bank has received evidence satisfactory to the

14 Bank that: (i) ENDESA has entered into such contracts satisfactory to the Bank as shall be required for the execution of the Program; and (ii) each of the contracts mentioned in Section 2.09 and 2.10 of the ENDESA Project Agreement has been executed and delivered and constitute valid and binding obligations of the parties thereto in accordance with their respective terms. 5. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in paragraph 1 above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Bank may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet other expenditures, and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Bank shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as in the Bank's reasonable opinion represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan.