Philippines - Seventh Power Project : Loan 1460 - Loan Agreement - Conformed

CONFORMED COPY LOAN NUMBER 146o PH Loan Agreement (Seventh Power Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and NATIONAL POWER CORPORATION Dated August 9, 1977 LOAN AGREEMENT AGREEMENT, dated August 9, 1977, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and NATIONAL POWER CORPORATION (hereinafter called the Borrower). -2- 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 Guar- antee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank being hereinafter called the General Conditions). 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. 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 re- ferred to, an amount in various currencies equivalent to fifty- eight million dollars ($58,000,000). Section 2.02. The amount of the Loan may be withdrawn from the Loan Account in accordan-!e with the provisiuns of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement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 expendi- tures 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 fi- nanced out of the proceeds of the Loan. Section 2.03. Except as the Bank shall otherwise agree, contracts for the purchase of goods or for civil works to be fi- nanced out of the proceeds of the Loan shall be procured in accor- dance with the nrovisions of Schedule 4 to this Agreement. Section 2.04. The Closing Date shall be June 30, 1982 or such later date as the Bank shall establish. The Bank shall -nromntly 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charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum cn the principal amount of the Loan not withdrawn from time to time. Section 2.06. The Borrower shall pay interest at the rate of eight and two-ttnths per cent (8.20%) 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 semi-annually on February 1 and August 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. -5- ARTICLE III Execution of the Project Section 3.01. The Borrower shall carry out the Project with due diligence and efficiency and in conformity with appropriate engineering, financial and public utility practices. Section 3.02. Without any restriction or limitation upon its obligations under Section 3.01 of this Agreement, in carrying out Part A of the Project the Borrower shall establish and maintain a project unit directly responsible to the Borrower's regional manager in Luzon. Section 3.03. (a) in order to assist the Borrower in the preparation of detailed designs and bidding documents, in the evaluation of bids and in the supervision of the civil works and of the installation of equipment included in Part B of the Project, and in carrying out Part D (1) of the Project, the Borrower shall employ engineering and management consultants whose qualifications, experience and terms and conditions of employment shall be satis- factory to the Bank. (b) Except as the Bank shall otherwise agree, the Borrower shall: (i) appoint the consultants referred to in paragraph (a) of this Section to carry out Part D (1) of the Project by not later than September 30, 1977; and - 6 - (ii) implement the recommendations of the said consultants which are acceptable to the Bank and the Borrower, not later than twelve months after the said consultants have furnished their final report to the Borrower. Section 3.04. In carrying out Part D (2) of the Project, the Borrower shall: (i) not later than September 30, 1977, or such other date as the Bank shall agree, establish and staff a special unit in its corporate planning staff, whose composition, powers and organization shall be satisfactory to the Bank; and (ii) if, in the opinion of the Bank and the Borrower, it is deemed necessary, employ consultants whose qualifications, experience and terms and conditions of employment shall be acceptable to the Bank and the Borrower, to assist the said unit in carrying out Part D (2) of the Project. Section 3.05. In carrying out Part C of the Project, the Borrower shall: (i) establish a training center by December 31, 1979; (ii) prepare and submit to the Bank during the third quarter of each of its fiscal years a detailed implementation schedule of the training program to be undertaken by the Borrower during the following fiscal year; and (iii) review with the Bank during the first quarter of each of its fiscal years the implementation of its annual training program during the preceeding fiscal year. Section 3.06. (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 re- place 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 3.07. (a) The Borrower shall furnish to the Bank, promptly upon their preparation, the plans, specifications, re- ports, contract documents and construction and procurement sched- ules for the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) The Borrower: (i) shall maintain records adequate to record the progress of the Project (including the cost thereof) and to identify the goods and services financed out of the pro- ceeds of the Loan, and to disclose the use thereof in the Project; (ii) shall enable the Bank's accredited representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Loan and any relevant records and documents; and (iii) shall furnish to the Bank all such information as the Bank shall reasonably request concerning the Project, the expenditure of the proceeds of the Loan and the goods and services financed out of such proceeds. (c) 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. - 8 - Section 3.08. The Borrower shall take 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 the con- struction (and operation) of the facilities included in the Proj- ect. Section 3.09. The Borrower shall, in carrying out Part B of the Project, ensure that: (i) the final selection of the works to be undertaken; (ii) the final engineering designs of such works; and (iii) the arrangements for implementing such works, are all agreed to by the Bank in consultation with the Borrower. -9- ARTICLE IV Management and Operations of the Borrower Section 4.01. (a) The Borrower shall at all times carry on its operations, manage its affairs, plan the future development of its power system and maintain its financial position in accor- dance with sound engineering, financial, administrative and pub- lc utility practices, and under the supervision of experienced and competent management. (b) The Borrower shall operate and maintain its plants, equipment, properties and facilities and from time to time make all necessary renewals and repairs thereof in accordance with sound engineering and public utility practices. Section 4.02. 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 as shall be consistent with appropriate practice. Section 4.03. The Borrower shall not, without the consent of the Bank, sell, lease, transfer, or otherwise dispose of any of its properties or assets which shall be required for the effi- cipnt carrying out of its business, including the carrying out of the Project. - 10 - Section 4.04. The Borrower shall at all times take all steps necessary to maintain its corporate existence and right to carry on its operations, including the Project, and shall, except as the Bank shall 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 the construction and operation of the Project and the conduct of its business. Section 4.05. Except as the Bank shall otherwise agree, the Borrower shall obtain title to all goods financed in whole or in part with the proceeds of the Loan free and clear of all liens. - 11 - ARTICLE V Financial Covenants Section 5.01. The Borrower shall maintain records adequate to reflect, in accordance with consistently maintained apnropriate accounting Dractices, its operations and financial condition. Section 5.02. The Borrower shall: (i) have its accounts and financial statements (balance sheets, statements of income and exnenses and related statements) for each fiscal year audited, in accordance with anDronriate auditing princioles consistently ap- nlied. by indenendent auditors acceDtable to the Bank; (ii) fur- nish to the Bank as soon as available, but in any case not later than three months after the end of each such year, (A) certified co-nes of its financial statements for such year as so audited and (B) the renort 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 reauest. 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 excent as otherwise currently reported to the Bank or stated in writinq. - 12 - (b) The Borrower undertakes that, excent as the Bank shall otherwise agree, if any lien shall be created on any assets of the Borrower as security for any debt, such lien will ipso facto equally and ratably secure the payment of the Drincinal 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; provided, however, that the I -egoing provi- sions 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 pronerty; 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 furnish to the Bank not later than October 31 in every year, for its colTments, its devel- onment program for the following ten years together with the fi- nancial plan supporting such program. Section 5.05. Except as the Bank shall otherwise agree: (a) prior to undertaking or executing any major oroject, making any major investment or acquiring any major asset for its own account or the account of any other party, the Borrower shall first satisfy the Bank that such investment, project or asset: (i) forms part of a least cost development program for the Borrower; (ii) will be undertaken or acauired throuah means designed to en- sure a reasonable cost; and (iii) will be financed under a financ- ing plan which shall be reasonable in relation to the Borrower's overall financial position. - 13 - (b) For the purpose of this Section, the terms "major proj- ect", "major investment" or "major asset" mean any project, in- vestment or asset involving an expenditure of more than the equiva- lent of $50,000,000. Section 5.06. (a) The Borrower undertakes that except as the Bank shall otherwise agree, the total of the Borrower's short and medium term debt outstanding shall not exceed the equivalent of $50,000,000 at any time.. (b) For the purpose of this Section, the term "short and medium term debt" means all indebtedness of the Borrower maturing on demand or less than five years from the date on which it is originally incurred. (c) For the purpose of this Section, debt shall be deemed to be incurred on the date the agreement providing for such debt shall be entered into, and, in the case of a guarantee, on the date the agreement providing for such guarantee shall be entered into. (d) Whenever for purposes of this Section it shall be neces- sary to value in terms of Philippine currency debt payable in another currency or the amount set forth in paragraph (a) of this Section, such valuation shall be made on the basis of the prevail- ing lawful rate of exchange at the time of such valuation. Section 5.07. (a) Except as the Bank shall otherwise agree, the Borrower shall take all steps necessary to set and maintain its tariffs at such a level as may be necessary to provide revenue - 14- sufficient to produce an annual rate of return on the value of the Borrower's net fixed assets in operation of not less than 8% in fiscal year 1978 and thereafter. (b) Without any limitation or restriction on the Borrower's obligations under paragraph (a) of this Section, the Borrower shall consult with the Bank not later than June 30, 1970 to determine a schedule which would permit the Borrower to produce at the earliest feasible time annual rates of return higher than eight per cent on the value of the Borrower's net fixed assets in operation. (c) I- the purpose of this Section: (1) The annual rate of return shall be calculated by relating the operating income for the year in ques- tion to the average of the value of the net fixed assets of the Borrower in operation at the begin- ning and at the end of each year. (ii) The term "value of net fixed assets in operation" shall mean the gross book value of such assets, less the amount of accumulated depreciation, as such value shall be updated annually on the basis of appropriate indices acceptable to the Bank and revalued once every four years or more frequently in accordance with sound and consistently maintained methods of valuation acceptable to the Bank. (iii) The term "operating income" shall mean the differ- ence between: - 15 - (A) gross operating revenue accruing from the Bor- rower's services; and (B) the operating and administration expenses (in- cluding taxes, if any), adequate maintenance and depreciation but excluding interest and other charges on debt. Section 5.08. The Borrower shall take all necessary steps to collect its unpaid accounts for electricity supplied so as to reduce the unpaid accounts as of December 31, 1978, and annually thereafter, to an amount equivalent to not more than the amount billed in resDect of the last three months of the year in question. Section 5.09. The Borrower shall: (i) not later than Decem- ber 31, 1977 or such other date as the Bank shall agree, establish the position of financial manager of the Borrower directly respon- sible to the Borrower's general manager and employ a qualified and exnerienced financial manager in the said position; and (ii) afford the Bank a reasonable opportunity to comment on the quali- fication and experience of the candidate before making any desig- nation to such position before the Closing Date. - 16 - 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 provision of Republic Act No. 6395 of the Guarantor, as amended as of the date of this Agreement, shall have been amended, suspended, abrogated or terminated so as to affect ad- versely the ability of the Borrower to carry out its obligations under this Agreement; and (b) a default shall have occurred in the performance of any obligation of the Borrower under any loan agreement between the Bank and the Borrower. 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: (a) any event specified in paragraph (a) of Section 6.01 of this Agreement shall occur; and (b) the event specified in paragraph (b) of Section 6.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Bank to the Borrower. - 17 - ARTICLE VII Termination; Amendment of Other Agreements Section 7.01. The date November 7, 1977, is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 7.02. (a) The Loan Agreement (Fifth Power Project) between the Borrower and the Bank dated April 3, 1972 as amended by Section 7.02 of the Loan Agreement (Sixth Power Project) between' the Bank and the Borrower dated July 31, 1974, is further amended as follows: (i) Section 5.05 thereof, as amended, is further amended to read as Section 5.07 of this Agreement; (ii) Section 5.04 thereof is amended to read as Sections 5.04, 5.05 and 5.06 of this Agreement; and (iii) Section 5.07 thereof, as amended, is further amended to read Section 5.08 of this Agreement. (b) The Loan Agreement (Sixth Power Project) between the Borrower and the Bank dated July 31, 1974 is amended as follows: - 18 - (i) Section 5.04 thereof is amended to read as Sections 5.04, 5.05 and 5.06 of this Agreement; (ii) Section 5.05 thereof is amended to read as Section 5.07 of this Agreement; and (iii) Section 5.06 thereof is amended to read as Section 5.08 of this Agreement. - 19 - 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: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 40098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (wUI) For the Borrower: National Power CorDoration 161 Bonifacio Drive Port Area, Manila PhiliDpines Cable address: Telex: NAPOCOR 7420120 Manila - 20 - IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agree- ment 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/ Gregory B. Votaw Acting Regional Vice President East Asia and Pacific NATIONAL POWER CORPORATION By /s/ Conrado del Rosario Authorized Representative - 21 - SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. 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 ex- penditures 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- 36,600,000 rials under Parts A, B and C of the Project (a) imported 100% of foreign expenditures (b) locally 100% of local procured expenditures (ex-factory) (2) Civil works under 2,800,000 15% Parts A, B and C of the Project (3) Consultants' services 2,100,000 100% of foreign and overseas training expenditures or 65% (4) Unallocated 16,500,000 TOTAL 58,000,000 - 22 - 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means exTenditures 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; and (b) the term "local expenditures" means expenditures in the currency of the Guarantor and for goods or services supplied from the territory of the Guarantor. 3. The disbursement percentages have been calculated in compli- ance 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 resnect 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 paragrath 1 above, no with- drawals shall be made in respect of: (i) expenditures prior to the date of this Agreement; and (ii) expenditures in respect of Part B of the Project (except for consultants' services) until the Bank has agreed to the proposals to be submitted to it by the Borrower in accordance with the provisions of Section 3.09 of this Agree- ment. - 23 - 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, reallocate to such Cate- gory, 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. 6. If the Bank shall have reasonably determined that the pro- curement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expen- ditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or lim- iting 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. - 24- SCHEDULE 2 Description of the Project The Project consists of the following: Part A: Transmission system expansion Construction of about 1,400 kilometers of transmission lines and construction of substations with a total capacity of 225 MVA, all on the island of Luzon. Part B: Control center Construction and equipment of a communication network and control facilities for the Borrower's Luzon grid. Part C: Training 1. A comprehensive training program aimed at improving the capability of the Borrower's staff in all fields and skills of its activities, including the estab- lishment of a training center. 2. A program of overseas fellowships for about 15 middle management staff of the Borrower. - 25 - Part D: Technical assistance and study 1. Tha utilization of technical assistance to carry out a program to improve the management of the Borrower, including the services of a systems planning adviser to assist the Borrover's cor- porate planning department. 2. A comprehensive tariff study of the power sector. The Project is expected to be completed by December 31, 1981. - 26 - SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each February 1 and August 1 beginning August 1, 1982 through February 1, 1997 1,870,000 On August 1, 1997 1,900,000 * 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 equiva- lents determined as for purposes of withdrawal. - 27 - Premiums on Prepayment The following percentages are specified as the premiums pay- able 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 1.25% More than three years but not more than six years before maturity 2.45% More than six years but not more than eleven years before maturity 4.50% More than eleven years but not more than sixteen years before maturity 6.55% More than sixteen years but not more than eighteen years before maturity 7.40% More than eighteen years before maturity 8.20% - 28 - SCHEDULE 4 Procurement A. International Competitive Bidding 1. Contracts for the purchase of goods shall be 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. B. Other Procurement Procedures 1. Contracts for civil works shall be awarded on the basis of competitive bidding advertised locally under the Borrower's normal procedures for such contracts. C. Evaluation and Comparison of Bids for Goods; Preference for Domestic Manufacturers 1. For the purpose of evaluation and comparison of bids for the supply of goods: (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 sim- ilar taxes on domestically-supplied goods, shall be excluded; and (iii) the cost to the Borrower of inland freight and other expen- ditures incidental to the delivery of goods to the place of their use or installation shall be included. - 29 - 2. Goods manufactured in the Philippines may be granted a mar- gin of preference in accordance with, and subject to, the follow- ing provisions: (a) All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the infor- mation required to establish the eligibility of a bid for such preference and the following methods and stages that will be fol- lowed in the evaluation and comparison of bids. (b) After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in the Philippines 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 the Philippines equal to at least 20% of the ex-factory bid price of such goods. (2) GrouD B: all other bids offering goods manufactured in the Philippines. (3) Group C: bids offering any other goods. (c) All evaluated bids in each group shall be first compared among themselves, excluding any customs duties and other import taxes on goods to b imported and any sales or similar taxes on goods to be supplied domestically, to determine the lowest evalu- ated bid of each group. Such lowest evaluated bids shall then be - 30 - 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. (d) If, as a result of the comparison under paragraph (c) 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 fur- ther comparison only, an amount equal to (i) the amount of cus- toms 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 (c) is the lowest evaluated bid shall be selected. D. Review of Procurement Decisions by the Bank 1. With respect to all contracts for the purchase of goods estimated to cost the equivalent of $200,000 or more and: (a) Before bids are invited, the Borrower shall 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 - 31 - 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) After bids have been received and evaluated, the Bor- rower 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 in- tended 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, with- out 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 submis- sion to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. 2. With respect to each contract to be financed out of the pro- ceeds of the Loan and not governed by the preceding paragraph, the Borrower shall furnish to the Bank, promptly after its execu- tion and prior to the submission to the Bank of the first applica- tion for withdrawal of funds from the Loan Account in respect of - 32 - 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 re- quest. 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 de- termination.