Public Disclosure Authorized
OFFICIAL
Public Disclosure Authorized
DCMT SJ
LOAN
UMBER 2179 PE
Project Agreement
Public Disclosure Authorized
(Sixth Power Project)
between
INTERNATIONAL BANK FOR RECONSTRUCTION
AND DEVELOPMENT
and
Public Disclosure Authorized
ENERGIA HIDROELECTRICA ANDINA (HIURANDINA)
Dated
Xv2~L-Y/~,
1982
S.A.
LOAN NUMBER 2179 PE
PROJECT AGREEMENT
('7
AGREEMENT, dated
god>rit
, 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 1.01. 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 2.01. (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
S2 -
in conformity with appropriate administrative,
neering and public utility practices.
financial,
engi-
(b) For purposes of the carrying out of Part C of
Project, HIDRANDINA shall enter with the Borrower into
HIDRANDINA Subsidiary Loan Contract.
the
the
(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 2.02. (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,
specifications, work schedules and estimates
number as the Bank shall reasonably request.
plans,
of costs,
designs,
in
such
(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 2.03. Except as the Bank may otherwise agree,
HIDRANDINA shall cause all services financed out of the proceeds
-3-
of the Loan relent
for the Project.
to it
by the Borrower to be used exclusively
Section 2.04.
(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.
HIDRANDINA: (i) shall maintain records and procedures
(b)
including separate accounts for Part C of the Project, adequate
to record and monitor the progress of such Part of the Project
to
(including its cost and the benefits to be derived from* it),
identify the services financed out of the proceeds of the Loan
relent to it by the Borrower, and to disclose their use in the
shall enable the Bank's representatives to visit
Project; (ii)
the facilities and construction sites related to such Part of the
shall
Project and any relevant records and documents; and (iii)
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
the expenditure of the proceeds of the Loan relent to it
from 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 HIDRANDINA 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,
the
its cost and the benefits derived and to be derived from it,
performance by HIDRANDINA and the Bank of their respective obligations under this Agreement and the accomplishment of the purposes of the Loan.
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 2.05. (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
condition which interferes or threatens to interfere with
progress of Part C of the Project, the accomplishment of
purposes of the HIDRANDINA Subsidiary Loan, or the performance
HIDRANDINA of its obligations under this Agreement and under
HIDRANDINA Subsidiary Loan Contract.
Section 2.06. HIDRANDINA shall take
be necessary on its part to ensure that
mendations of the studies to be carried
Part C of the Project are appropriately
PERO's studies for the Master Plan.
any
the
the
by
the
all such steps as shall
the findings and recomout by HIDRANDINA under
integrated with ELECTRO-
ARTICLE III
Management and Operations of HIDRANDINA
Section 3.01.
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 3.02. (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).
-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 3.03. 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 3.04. 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 4.01. HIDRANDINA shall maintain records adequate to
reflect in accordance with consistently maintained appropriate
accounting practices its operations and financial conditions.
Section 4.02. 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
-6-
Section 4.03.
otherwise agree:
Except
as
the
Bank
and
HIDRANDINA
shall
(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 4.04. Except as
HIDRANDINA shall not incur:
the
Bank
shall
otherwise
agree,
(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)
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;
(ii)
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
-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 sinkinterest and other
if any),
ing fund payments,
charges on long-term debt;
the aggregate of all
(b) any short term-debt, unless
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
of
non-cash provisions)
(excluding depreciation and other
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 5.01. This Agreement shall come into force and
effect on the date upon which the Loan Agreement becomes
effective.
Section 5.02. 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.
Section 5.03. 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 6.01. 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
as so specified are:
such request. The addr
For the Bank:
International Bank for
Reconstruction and Development
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address:
INTBAFRAD
Washington, D.C.
For HIDRANDINA:
Energla Hidroel6ctrica Andina
(Hidrandina) S.A.
Avenida Central 717,80 Piso B
Lima 27
Lima, Peru
Telex:
440098 (ITT)
248423 (RCA) or
64145 (WUI)
-9-
Cable address:
HIDRANDINA
Telex:
20458 PE ALPANDIN
Section 6.02. 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 6.03. This Agreement may be executed in
counterparts, each of which shall be an original,
collectively but one instrument.
several
and all
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
-
10
-
SCHEDULE
Description of Part C of the Project
Mayush Hydro Project
After completion of Part C.2 of the Prior Project,
tion of final design and tender documents therefor.
prepara-
AND DEVELOPMENT
INTERNATIONAL BANK FOR RECONSTRUCTION
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