Loan Agreement. Public Disclosure Authorized CONFORMED COPY LOAN NUMBER 1593 CO. Public Disclosure Authorized

Public Disclosure Authorized CONFORMED COPY LOAN NUMBER 1593 CO Public Disclosure Authorized Public Disclosure Authorized Loan Agreement (Cartagena Industrial Export Processing Zone Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and ZONA FRANCA INDUSTRIAL Y COMERCIAL DE CARTAGENA Public Disclosure Authorized Dated August 1, 1978

LOAN NUMBER 1593 CO LOAN AGREEMENT AGREEMENT, dated August 1. 1978, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOP ENT (hereinafter called the Bank) and ZONA FRANCA INDUSTRIAL Y COMERCIAL DE CARTAGENA (hereinafter called the Borrower). ARTICLE I General Conditions; Definitions Section 1.01. 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 following modification thereof (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank, as so modified, being hereinafter called the General Conditions): Section 11.03 is amended to read as follows: Section 11.03. Action on Behalf of the Borrower or Guarantor. Any action required or permitted to be taken, and any documents required or permitted to be executed, pursuant to the Loan Agreement or the Guarantee Agreement, on behalf of the Borrower or the Guarantor, may be taken or executed by the representative of the Borrower or the Guarantor designated in the Loan Agreement or the Guarantee Agreement for the purposes of this Section or any person thereunto authorized in writing by him. Any modification or amplification of the provisions of the Loan Agreement or the Guarantee Agreement may be agreed to on behalf of the Borrower or the Guarantor by written instrument executed on behalf of the Borrower or the Guarantor by the representative so designated or any person thereunto authorized in writing by him; provided that such modification or amplification is reasonable in the circumstances and will not substantially increase the obligations of the Borrower under the Loan Agreement or of the Guarantor under the Guarantee Agreement. Section 1.02. Wherever used in this Agreement, unless 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:

- 2 - (a) "Export Processing Zone" means the zone in the Mamonal industrial area, about fifteen kilometers south of the city of Cartagena, as defined in article 1 of Decreto No. 2411, dated November 12, 1975, of the Guarantor; (b) "Basic Laws" means Decreto No. 2077 of October 11, 1973, Decreto No. 2828 of December 23, 1974, Decreto No. 2411 of November 12, 1975, of the Guarantor, establishing and organizing the Borrower, and all other laws, decrees and regulations of the Guarantor or any other authority having jurisdiction, related to the organization or operations of the Borrower, as such Basic Laws may be amended from time to time; (c) "Guidelines" means the statement of operating policies and procedures of the Borrower referred to in paragraph (b) of Section 7.01 of this Agreement; (d) "EPMC" means Empresas Pfiblicas Municipales de Cartagena; (e) "SENA" means Servicio Nacional de Aprendizaje; (f) "CORELCA" means Corporaci6n El6ctrica de la Costa Atlntica and such term shall include CORELCA's subsidiary, Electrificadora de Bolivar; (g) "TELECARTAGENA" means Compa?1a Telef6nica de Cartagena; (h) "PROEXPO means Fondo de Promoci6n de Exportaciones; (i) "Valorizaci6n" means any taxes, levies or contributions imposed on beneficiaries of public works for the recovery from such beneficiaries of all or part of the investment costs of such works; and (j) "pesos" and "Col.$" mean the currency of the Guarantor. ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to fifteen million dollars ($15,000,000).

-3- Section 2.02. (a) The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Bank, 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 described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Loan and in respect of interest and other charges on the Loan. (b) On each of the semiannual interest payment dates specified in Section 2.07 of this Agreement, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and pay to itself the amounts required to pay, on such date, interest and other charges on the Loan accrued and payable on or before the date set forth, and up to the amount allocated, in Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Bank. Section 2.03. Except as the Bank shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Loan, shall be governed by the provisions of Schedule 4 to this Agreement. Section 2.04. The Closing Date shall be December 31, 1983 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower and the Guarantor of such later date. Section 2.05. The Borrower 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 2.06. The Borrower shall pay interest at the rate of seven and one-half per cent (7.50%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semiannually on March 1 and September 1 in each year. Section 2.08. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement.

ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out the Project, substantially in accordance with an implementation schedule agreed between the Bank and the Borrower, with due diligence and efficiency and in conformity with appropriate economic, administrative, financial, engineering, public utilities, educational, technological, environmental and promotion practices, and shall provide promptly as needed, the funds, facilities, services and other resources required for the purpose (the funds to be provided by the Borrower, in addition to the proceeds of the Loan, being on the date hereof estimated to aggregate the equivalent of not less than sixteen million three hundred thousand dollars ($16,300,000)). (b) For the carrying out of Part A (c) of the Project, the Borrower shall: (i) prepare a detailed plan of action, satisfactory to the Bank; and (ii) every six months update such plan of action in a manner satisfactory to the Bank. (c) The Borrower shall enter into a contract, satisfactory to the Bank, with EPMC for: (i) defining in detail the responsibilities (including financial responsibilities), functions and administrative procedures of the Borrower and EPMC, respectively, in respect of the carrying out of Part B (a) of the Project. (d) The Borrower shall enter into a contract, satisfactory to the Bank, with Municipio de Cartagena, for defining in detail the responsibilities (including financial responsibilities), functions and administrative procedures of the Borrower and Municipio de Cartagena, respectively, in respect of the carrying out of Part B (b) of the Project. (e) The Borrower shall, by December 31, 1978, enter into a contract satisfactory to the Bank with SENA for: (i) defining in detail the responsibilities (including financial responsibilities), functions and administrative procedures of the Borrower and SENA, respectively, in respect of the carrying out of Part C of the Project; and (ii) making available to SENA on terms and conditions which shall be substantially the same as those contained in this Agreement in respect of repayment of principal of, and interest and other charges on, the Loan, the equivalent of two hundred thousand dollars ($200,000) out of the proceeds of the Loan.

- 5 - (f) The Borrower shall exercise its rights under each of the contracts referred to in paragraphs (c), (d) and (e) above in such manner as to protect the interests of the Bank and the Borrower and to accomplish the purposes of the Loan, and except as the Bank shall otherwise agree, the Borrower shall not assign, nor amend, abrogate or waive such contracts or any provision thereof. (g) The Borrower shall enter into and maintain arrangements, satisfactory to the Bank, with CORELCA, TELECARTAGENA and PROEXPO for defining the participation of CORELCA, TELECARTAGENA and PROEXPO in respect of Part A of the Project. (h) The Borrower shall not commit itself to, nor make, any capital expenditure regarding the construction of any building under Part A (a) of the Project and of any works under Part B (a) and (b) of the Project unless the Bank shall have approved the design and construction schedules of such building and works, Section 3.02. In order to assist the Borrower in the carrying out of the Project, the Borrower shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Baak. Section 3.03. The Borrower shall take all necessary measures to ensure that the Project is carried out with due regard to ecological and environmental factors. Section 3.04. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds 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 the Borrower to replace or repair such goods. (b) Except as the Bank shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Loan to be used exclusively for the Project. Section 3.05. (a) The Borrower shall furnish to the Bank, 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.

- 6 - (b) The Borrower: (i) shall maintain records and procedures adequate to record and monitor the progress of the Project (including its cost and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Loan, and to disclose their use 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; and (iii) shall furnish to the Bank at regular intervals all such information as the Bank shall reasonably request concerning the Project, its cost and, where appropriate, the benefits to be derived from it, the expenditure of' the proceeds of the Loan and the goods and services financed out of such proceeds. (c) The Borrower shall (i) prepare, jointly with the Ministerio de Desarrollo Econ6mice of the Guarantor, quarterly reports on the progress of the Project; and (ii) furnish to the Bank such reports promptly after their completion. (d) Promptly after completion 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 the Borrower and the Bank, the Borrower 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 and initial operation of the Project, its cost and the benefits derived and to be derived from it, the performance by the Borrower and the Bank of their respective obligation under the Loan Agreement and the accomplishment nf the purposes of the Loan. (e) The Borrower shall enable the Bank's representatives to examine all plants, installations, sites, works, buildings, property and equipment of the Borrower and any relevant records and documents. Section 3.06. The Borrower shall take or cause to be taken all such action as shall be necessary to acquire as and when needed all such land and rights in respect of land as shall be required for carrying out the Project. Section 3.07. (a) The Borrower shall employ such qualified and experienced staff as shall be required for the efficient and timely carrying out of the Project. (b) Without limiting the generality of the provisions in paragraph (a) above, the Borrower shall employ for the Project one

-7- industrial promoter, one engineer and one accountant, all of whom shall have qualifications, experience and terms and conditions of employment satisfactory to the Bank. ARTICLE IV Management and Operations of the Borrower Section 4.01. (a) The Borrower shall at all times manage its affairs, maintain its financial position, plan its future expansion and carry on its operations in accordance with appropriate administrative, business and financial practices, under the supervision of experienced and competent management assisted by adequate, experienced and competent staff and in accordance with the provisions of this agreement, the Basic Laws and the Guidelines. (b) The Borrower shall afford the Bank a reasonable opportunity to comment on any proposed reorganization of the Borrower which may affect substantially or adversely the operations or financial condition of the Borrower or the carrying out of the Project. Section 4.02. (a) The Borrower shall take all steps necessary to acquire, maintain and renew all rights, powers, privileges and franchises which are necessary in the conduct of its business. (b) The Borrower shall take all action, including the provision of funds and resources, to ensure that its facilities, equipment and property are adequately operated, maintained, renewed and repaired. (c) Except as the Bank shall otherwise agree, the Borrower shall not sell, transfer or otherwise dispose of any of its property or assets which shall be required for the efficient operation of its business and undertaking, including the Project. Section 4.03. The Borrower shall take out and maintain with responsible insurers, or make other provision satisfactory to the Bank for, insurance against such risks and in such amounts a. shall be consistent with appropriate practice. ARTICLE V Other Covenants Section 5.01. The Borrower shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition.

-8- Section 5.02. (a) The Borrower shall: (i) have its accounts 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 four months after the end of each such year, (A) certified copies of its 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 such other information concerning the accounts and financial statements of the Borrower and the audit thereof as the Bank shall from time to time reasonably request. (b) The Borrower shall prepare and furnish to the Bank: (i) each montn, monthly cash flow projections for the following twelve-month period; and (ii) every three months, quarterly cash flow projections for the following three-year period. Section 5.03. (a) The Borrower represents 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) The Borrower undertakes that, except as the Bank shall otherwise agree: (i) if the Borrower 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 the Borrower as security for any debt, the Borrower 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 5.04. The Borrower shall establish and maintain, at all times, rental fees for the commercial and industrial enterprises located in its commercial zone and the Export Processing

- 9 - Zone at levels sufficient to enable the Borrower to generate a real return of not less than 10% (or such other percentage as the Bank shall agree) on the Borrower's investments in the Export Processing Zone, such return to be calculated in accordance with a methodology satisfactory to the Bank. Section 5.05. Except as the Bank shall otherwise agree: (a) the Borrower shall maintain a debt-equity ratio of not more than 65:35; (b) the Borrower shall not incur any debt if such debt will raise the Borrower's debt-equity ratio above 65:35; and (c) for purposes of paragraphs (a) and (b) above: (i) the term "debt" means all debt of the Borrower including debt for the service of which the Borrower is responsible, but excluding debt incurred in connection with the carrying out of Parts B and C of the Project; (ii) debt shall be deemed to be incurred: (A) under a contract, loan agreement or other instrument providing for such debt or for the modification of its terms of payment, on the date and to the extent the amount of the Loan is drawn down and outstanding pursuant to such contract, agreement or instrument; -,ad (B) under a guarantee agreement, on the date tne agreement providing for such guarantee has been entered into but only to the extent that the guaranteed debt is outstanding; (iii) (iv) the term "equity" means the total paid-in capital, reserves and retained earnings of the Borrower, determined in accordance with sound accounting practices; and whenever for the purposes of this Section it shall be necessary to value, in terms of the currency of the Guarantor, debt payable in another currency, such valuation shall be made on the basis of the prevailing lawful rate of exchange at which such other currency is, at the time of such valuation, obtainable by the Borrower for the purposes of servicing such debt.

- 10 - Section 5.06. Except as the Bank shall otherwise agree, the Borrower shall, as from the year 1981, maintain a ratio of current assets to current liabilities of not less than 1.25 to 1. For the purposes of this Section: (a) the term "current assets" includes cash, accounts receivable due within twelve months, prepaid expenses properly chargeable to operating expenses within the next twelve months and all other assets which could, in the ordinary course of business, be converted within twelve months into cash; and (b) the term "current liabilities" includes accounts payable within twelve months, customer advances, taxes, bonuses and all other liabilities (including debt) which will become due and payable, or could be called for payment, within twelve months. Section 5.07. The Borrower shall obtain the concurrence of the Bank before committing itself to, or making, any capital expenditure not included in the Project; except that no concurrence of the Bank shall be required in respect of capital expenditures up to an aggregate annual amount net exceeding the equivalent of one hundred and fifty thousand dollars ($150,000). Section 5.08. The Borrower shall: (i) include in the contract to be entered into between the Borrower and Municipio de Cartagena pursuant: to paragraph (d) of Section 3.01 of this Agreement such provisions as shall be necessary to ensure that Municipio de Cartagena shall charge and collect Valorizaci6n from the beneficiaries of the works included in Part B (b) of the Project until such time as all the investment costs of such works have been recovered from such beneficiaries; and (ii) take all necessary action to enforce such provisions. Section 5.09. The Borrower shall take, and cause to be taken, all action, including the provision of funds and resources, to ensure that the facilities and equipment included in the Project are adequately operated, maintained, renewed and repaired. Section 5.10. The Borrower shall obtain, promptly as required during the period 1979 through 1980, a peso loan in the equivalent of three million dollars ($3,000,000), such loan to be on terms and conditions satisfactory to the Bank.

- 11 - ARTICLE VI Remedies of the Bank Section 6.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (k) thereof: (a) any party to any contract entered into pursuant to paragraphs (c), (d) and (e) of Section 3.01 of this Agreement shall have failed to perform any of its respective obligations thereunder; (b) an extraordinary situation shall have arisen which shall make it improbable that any party to any contract entered into pursuant to paragraphs (c), (d) and (e) of Section 3.01 of this Agreement will be able to perform any of its respective obligations thereunder; (c) the Guarantor or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of any entity participating in the carrying out of the Project or for the suspension of its operations related to the carrying out of the Project; (d) the Guarantor or any other authority having jurisdiction shall have divested any entity participating in the carrying out of the Project of any of the functions or powers vested in it as of the date of this Agreement so as to affect adversely the efficient carrying out of the Project; and (e) the Basic Laws or the Guidelines, or any provision thereof, shall have been amended, suspended or abrogated so as to affect adversely the operations or financial condition of the Borrower or the carrying out of the Project. Section 6.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof, namely, any of the events specified in paragraphs (a), (c), (d) and (e) of Section 6.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower.

- 12 - ARTICLE VII Effective Date; Termination Section 7.01. The following events are specified as additional conditions to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions: (a) the execution and delivery of the contracts referred to in paragraphs (c) and (d) of Section 3.01 of this Agreement have been duly authorized or ratified by all necessary corporate and governmental action; (b) the Junta Directiva of the Borrower has approved a statement of operating policies and procedures satisfactory to the Bank; (c) the Junta Directiva of the Borrower has approved the plan referred to in paragraph (b) of Section 3.01 of this Agreement; and (d) the Borrower has appointed the industrial promoter, the engineer and the accountant referred to in paragraph (b) of Section 3.07 of this Agreement. Section 7.02. The date December 5, 1978, is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VIII Addresses Section 8.01. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Bank: Internauional Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America

- 13 - Cable address: INTBAFRAD Washington, D.C. Telex: 440098 (ITT) 248423 (RCA) or 64145 (WUI) For the Borrower: Zona Franca Industrial y Comercial de Cartagena Manga, Calle 29 No. 27-05 Apartado Aereo 1158 Cartagena, Colombia Cable address: ZONAFRANCA Cartagena, Colombia 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 /s/ Enrique Lerdau Acting Regional Vice President Latin America and the Caribbean ZONA FRANCA INDUSTRIAL Y COMERCIAL DE CARTAGENA By /s/ Virgilio Barco Authorized Representative

- 14 - SCHEDULE 1 Withdraval of the Proceeds of the Loan 1. The table below sets forth the Categories of ftems 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) Part A of the Project (a) Building con- 4,400,000 30% struction (including supervisory services related thereto) (b) Civil works 3,300,000 55% (other than building construction) and land preparation (including supervisory services related thereto) (c) Equipment (in- 1,500,000 cluding spare parts thereto) and materials (i) Directly imported 100% of foreign expenditures (ii) Locally 80% procured

- 15 - Amount of the Loan Allocated Z of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (d) Promotion ser- 200,000 100% of foreign vices expenditures (2) Part B of the Project (a) Construction 2,100,000 50% of Ceballos- Pasacaballos Road (including supervisory services related thereto) (b) Construction 600,000 40% of water transmission main (including supervisory services related thereto) (3) Part C of the Project (a) Building con- 40,000 35% struction (including supervisory services related thereto) (b) Equipment (includ- 160,000 ing spare parts thereto) and materials (i) Directly imported 100% of foreign expenditures (ii) Locally 80% procured

- 16 - Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (4) Interest and other charges on the Loan 2,100,000 Amounts due accrued on or before February 28, 1982 (5) Unallocated 600,000 TOTAL 15,000,000 2. For the purposes of this Schedule the term "foreign expenditures" means expenditures in the currency of any country other than the Guarantor and for goods or services supplied from the territory of any country other than the Guarantor. 3. The disbursement percentages have been calculated 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 Guarantor 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 in respect of payments made for expenditures prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of $500,000 may be made in respect of Category (1) on account of payments made for expenditures for land preparation before that date but after February 1, 1978. 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

- 17 - to finance the agreed percentage of all expenditures in that Category, the Bank may: (i) at the request of the Borrower, 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, by notice to the Borrower, 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.

- 18 - SCHEDULE 2 Description of the Project The Project is the development of the Export Processing Zone, to service the needs of an estimated thirty exportoriented industries. The Project consists of the following parts: Part A: Export Processing Zone (a) Development and operation of about 27 hectares of industrial sites and related facilities, forming the industrial zone proper, and of about 11 hectares of land to locate the vocational training center included in Part C of the Project and other general and social services facilities. This includes: (i) the construction of roads, surface drainage canals, water distribution and sewage collection networks, and of factory and other buildings with an aggregate area of about 90,000 square meters, and related facilities; and (ii) the installation of underground electric power lines, telephone cables and telex terminals; (b) Construction of a high-tension electric power transmission line from the Cospique substation to the Export Processing Zone; and (c) Carrying out of a campaign, mainly international, to promote the establishment of export-oriented industries in the Export Processing Zone. Part B: Supporting Infrastructure (a) Construction of a water transmission main from the municipal water treatment plant at Cartagena to the Export Processing Zone, a distance of about 12 kilometers; and (b) Rehabilitation and widening of the Ceballos - Pasacaballos road, about 14.6 kilometers long.

- 19 - Part C: Vocational Training Construction, furnishing and equipping of a vocational training center in the Export Processing Zone with at least 60 trainee places, adequate to provide training opportunities for at least 200 workers annually. The Project is expected to be completed by June 30, 1983.

- 20 - SCHEDULE 3 Amortization Schedule Date Payment Due Payment of Principal (expressed in dollars)* On each March 1 and September 1 beginning March 1, 1983 through March 1, 1995 575,000 On September 1, 1995 625,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal.

- 21 - Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05 (b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 1.30% More than three years but not more than six years before maturity 2.65% More than six years but not more than eleven years before maturity 4.85% More than eleven years but not more than fifteen years before maturity 6.60% More than fifteen years before maturity 7.50%

- 22 - SCHEDULE 4 Procurement A. International Competitive Bidding 1. Except as provided in Part B hereof, goods and civil works (including land preparation) shall be procured under contracts awarded in accordance with procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in March 1977 (hereinafter called the Guidelines), on the basis of international competitive bidding as described in Part A of the Guidelines. 2. For goods and works to be procured on the basis of international competitive bidding, in addition to the requirements of paragraph 1.2 of the Guidelines, the Borrower shall prepare and forward to the Bank as soon as possible, and in any event not later than 60 days prior to the date of availability to the public of the first tender or prequalification documents relating thereto, as the case may be, a general procurement notice, in such form and detail and containing such information as the Bank shall reasonably request; the Bank will arrange for the publication of such notice in order to provide timely notification to prospective bidders of the opportunity to bid for the goods and works in question. The Borrower shall provide the necessary information to update such notice annually so long as any goods or works remain to be procured on t.e basis of international competitive bidding. 3. For bidding purposes, goods to be procured in accordance with the provisions of paragraph 1 above shall be grouped in such manner as shall be agreed by the Bank prior to issuing the invitation to bid. 4. For the purpose of evaluation and comparison of bids for the supply of goods to be procured on the basis of international competitive bidding, (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for imported goods, or the ex-factory price for domestically manufactured goods; (ii) customs duties and other import taxes on imported goods, and sales and similar taxes on domestically supplied goods, shall be excluded; and (iii) the cost to the Borrower of inland freight and other expenditures incidental to the delivery of goods to the place of their use or installation shall be included.

- 23 - B. Other Procurement Procedures 1. Contracts for the purchase of goods estimated to cost the equivalent of $100,000 or less shall be procured in accordance with local competitive bidding procedures satisfactory to the Bank. 2. Contracts for civil works (including land preparation) estimated to cost the equivalent of $1,000,000 or less shall be procured in accordance with local competitive bidding procedures satisfactory to the Bank. 3. With the prior approval of the Bank, civil works (including land preparation) under paragraph (a) of Part A of the Project may be carried out by force account, provided the aggregate cost of such works shall not exceed the equivalent of $400,000. C. Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedures described in Part A of this Schedule, goods mar"-,,ctured in Colombia may be granted a margin of p-eference in accordance with, and subject to, the following provisions: 1. All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the information required to establish the eligibility of a bid for such preference and the following methods and stages that will be followed in the evaluation and comparison of bids. 2. After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in Colombia if the bidder shall have established to the satisfaction of the Borrower and the Bank that the manufacturing cost of such goods includes a value added in Colombia equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in Colombia. (3) Group C: bids offering any other goods.

- 24-3. All evaluated bids in each group shall be first compared among themselves, excluding any customs duties and other import taxes or goods to be imported and any sales or similar taxes on goods to be supplied domestically, to determine the lowest evaluated bid of each group. Such lowest evaluated bids shall then be compared with each other, and if as a result of this comparison, a bid from group A or group B is the lowest, it shall be selected for the award. 4. If, as a result of the comparison under paragraph 3 above, the lowest bid is a bid from group C, all group C bids shall be further compared with the lowest evaluated bid from group A after adding to the c.i.f. bid price of the imported goods offered in each group C bid, for the purpose of this further comparison only, an amount equal to: (i) the amount of customs duties and other import taxes which a non-exempt importer would have to pay for the importation of the goods offered in such group C bid; or (ii) 15% of the c.i.f. bid price of such goods if said customs duties and taxes exceed 15% of such price. If the group A bid in such further comparison is the lowest, it shall be selected for the award; if not, the bid from group C which as a result of the comparison under paragraph 3 is the lowest evaluated bid shall be selected. D. Review of Procurement Decisions by the Bank 1. Review of prequalification. The Borrower shall, before qualification is invited, inform the Bank in detail of the procedure to be followed, and shall introduce such modifications in said procedure as the Bank shall reasonably request. The list of prequalified bidders, together with a statement of their qualifications and of the reasons for the exclusion of any applicant for prequalification shall be furnished by the Borrower to the Bank for its comments before the applicants are notified of the decision of the Borrower, and the Borrower shall make such additions to, deletions from, or modifications in, the said list as the Bank shall reasonably request. 2. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to all contracts for: (i) civil works (including land preparation) estimated to cost the equivalent of $125,000 or more; and (ii) goods estimated to cost the equivalent of $25,000 or more, before bids are invited, the Borrower shall

- 25 - furnish to the Bank, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedures as the Bank shall reasonably request. Any further modification to the bidding documents shall require the Bank's concurrence before it is issued to the prospective bidders. (b) With respect to all contracts for: (i) civil works (including land preparation) estimated to cost the equivalent of $1,000,000 or more; and (ii) goods estimated to cost the equivalent of $100,000 or more, after bids have been received and evaluated, the Borrower shall, before a final decision on the award is made, inform the Bank of the name of the bidder to which it intends to award the contract and shall furnish to the Bank, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Bank's concurrence, materially differ from those on which bids were asked or prequalification invited. (d) Two conformed copies of the contract shall be furnished to the Bank promptly after its execution and prior to the delivery to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. 3. With respect to each contract not governed by the preceding paragraph, the Borrower shall furnish to the Bank, promptly after its execution and prior to the delivery to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids, recommendations for award and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination.