Colombia - Guavio Hydro Power Project : Loan 2008 - Guarantee Agreement - Conformed

LOAN NUMBER 2008 CO Guarantee Agreement (Guavio Hydro Power Project) between REPUBLIC OF COLOMBIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated , 1982 LOAN NUMBER 2008 CO GUARANTEE AGREEMENT AGREEMENT, dated Aa4rACAJ 1982, between REPUBLIC OF COLOMBIA (her e4-after called the Guarantor) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS by the Loan Agreement of even date herewith between the Bank and Empresa de Energia Elctrica de Bogoth (herein- after called the Borrower), the Bank has agreed to make to the Borrower a loan in various currencies equivalent to three hundred fifty-nine million dollars ($359,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that the Guarantor agree to guarantee the obligations of the Borrower in respect of such loan as hereinafter provided; and WHEREAS the Guarantor, in consideration of the Bank's entering into the Loan Agreement with the Borrower, has agreed so to guarantee such obligations of the Borrower; NOW THEREFORE the parties hereto hereby agree as follows: 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 October 27, 1980, with the same force and effect as if they were fully set forth herein, subject, however, to the modifications thereof set forth in Section 1.01 of the Loan Agreement (said General Conditions Applicable to Loan and Guarantee Agreements, as so modified, 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 and in Section 1.02 of the Loan Agreement have the respective meanings therein set forth. ARTICLE II Guarantee; Provision of Funds Section 2.01. Without limitation or restriction upon any of its other obligations under the Guarantee Agreement, the -2- Guarantor hereby unconditionally guarantees, as primary obligor and not as surety merely, the due and punctual payment of the principal of, and interest and other charges on, the Loan, and the premium, if any, on the prepayment of the Loan and the punctual performance of all the other obligations of the Borrower, all as set forth in the Loan Agreement. Section 2.02. Without limitation or restriction upon the provisions of Section 2.01 of this Agreement, the Guarantor shall, whenever there is reasonable cause to believe that the funds available to the Borrower will be inadequate to meet the estimated expenditures required for the carrying out of the Project- make or cause to be made arrangements, satisfactory to the Bank, to enable the Borrower promptly to be provided with such funds as are needed to meet such expenditures. ARTICLE III Other Covenants Section 3.01. (a) It is the policy of the Bank, in making loans to, or with the guarantee of, its members not to seek, in normal cirr.amstances, special security from the member con- cerned, but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distri- bution of foreign exchange held under the control or for the benefit of such member. To that end, if any lien shall be created on any public assets (as hereinafter defined), as security for any external debt, which will or might result in a priority for the benefit of the creditor of such external debt in the allocation, realization or distribution of foreign exchange, such lien shall, unless the Bank shall otherwise agree, ipso facto, and at no cost to the Bank, equally and ratably secure the principal of, and interest and other charges on, the Loan, and the Guarantor, in creating or permitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any constitutional or other legal reason such provision cannot be made with respect to any lien created on assets of any of its political or administrative subdivisions, which will or might result in a priority for the benefit of the creditor of such external debt in the allocation, realization or distribution of foreign exchange, the Guarantor shall promptly and at no cost to the Bank secure the principal of, and interest and other charges on, the Loan by an equivalent lien on other assets, satisfactory to the Bank, of the Guarantor or of any entity owned - 3 - or controlled by, or operating for the account or benefit of, the Guarantor, including gold and other foreign exchange assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Guarantor. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. (c) As used in this Section, the term "public assets" means assets of the Guarantor, of any political or administrative subdivision thereof and of any entity owned or controlled by, or operating for the account or benefit of, the Guarantor or any such subdivision, including gold and other foreign exchange assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Guarantor. Section 3.02. The Guarantor shall, promptly as required, take all action necessary on its part to enable the Borrower to set and maintain its electric tariffs and charges at levels sufficient at all times to fulfill the Borrower's obligations under Sections 5.06 and 5.07 of the Loan Agreement. Section 3.03. The Guarantor shall take all action, including the granting of all necessary authorizations, import licenses, foreign exchange permits and all other approvals, required under the laws of thc.Guarantor, to ensure the timely procurement of the goods and services required for the Project. Section 3.04. The Guarantor shall establish a Permanent Electricity Financing Facility and make or cause to be made adequate arrangements to enable such Permanent Electricity Financing Facility to be provided, by July 31, 1982, with such funds as are necessary for the timely financing of the National Power Expansion Program. Section 3.05. The Guarantor shall, promptly as required, take all action necessary or advisable on its part, including the provision of funds, to enable the Sponsors punctually to perform all their obligations (including their financial obligations) -4- with respect to the Borrower and the Project under the Sponsors' Agreement. Section 3.06. The Guarantor shall: (a) make available to the Borrower access to sources of financing for local costs required for the Investment Program; and (b) take all measures necessary to ensure access by the Borrower to external financing as required for the timely carrying out of the Investment Program and as required to meet the balance of the foreign exchange costs of the Project. Section 3.07. The Guarantor, based upon recommendations of the National Planning Department of the Guarantor in respect of the structure and operations of ICEL and its electrificadoras, agrees that: (a) as the Guarantor already decided, it will pre- pare a program for carrying out such recommendations; and (b) not later than June 30, 1983, it will begin to take all necessary measures to put such recommendations into effect in a timely manner. Section 3.08. The Guarantor shall, not later than June 30, 1983, carry out a study on the adequacy of the structure and levels of remuneration at all levels of employment in the power sector of the Guarantor and promptly thereafter furnish to the Bank a copy of such study. Section 3.09. The Guarantor covenants that the Sponsors' Agreement shall be free from any taxes levied by, or in the territory of, the Guarantor on or in connection with the execution, delivery or registration thereof. ARTICLE IV Representative of the Guarantor; Addresses Section 4.01. The Ministro de Hacienda y Cr&dito PGblico of the Guarantor is designated as representative of the Guarantor for the purposes of Section 11.03 of the General Conditions. Section 4.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: -5- For the Guarantor: Republic of C,lombia Ministerio de Hacienda y Cr6dito Pfiblico Palacio de los Ministerios Plaza San Agustin Bogota Colombia Cable address: MINHACIENDA Bogota 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. 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 city of Bogotf, Republic of Colombia, as of the day and year first above written. REPUBLIC OF COLOMBIA By /9.& Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT President INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Bank for Reconstruction and Develop- ment. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Bank thereunto this - day of , 198 k/. FOR SECRETARY