Philippines - Angat Project : Loan 0297 - Loan Agreement - Conformed

LOAN NUMBER 297 PH Loan Agreement (Angat Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND NATIONAL POWER CORPORATION DATED OCTOBER 13, 1961 LOAN NUMBER 297 PH Loan Agreement (Angat Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND NATIONAL POWER CORPORATION DATED OCTOBER 13, 1961 Ploatt Aguerit AGREEMENT, dated October 13, 1961, between INTER- NATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and NATIONAL POWER CORPO- RATION (hereinafter called the Borrower). ARTICLE I Loan Regulations SECTION 1.01. The parties to this Loan Agreement accept all the provisions of Loan Regulations No. 4 of the Bank dated February 15, 1961 (said Loan Regulations No. 4 being hereinafter called the Loan Regulations), with the same force and effect as if they were fully set forth herein. ARTICLE II The Loan SECTION 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in this Agreement set forth or referred to, an amount in various currencies equivalent to thirty four million dollars ($34,000,000). SECTION 2.02. The Bank shall open a Loan Account on its books in the name of the Borrower and shall credit to such Account the amount of the Loan. The amount of the Loan may be withdrawn from the Loan Account as provided in, and subject to the rights of cancellation and suspension set forth in, the Loan Regulations. SECTION 2.03. 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charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not so withdrawn from time to time. Such commit- ment charge shall accrue from a date sixty days after the date of this Agreement to the respective dates on which amounts shall be withdrawn by the Borrower from the 4 Loan Account as provided in or shall be cancelled pursuant to the Loan Regulations. SECTION 2.04. The Borrower shall pay interest at the rate of five and three-fourths per cent (53/4%) per annum on the principal amount of the Loan so withdrawn and outstanding from time to time. SECTION 2.05. Except as the Bank and the Borrower shall otherwise agree, the charge payable for special commit- ments entered into by the Bank at the request of the Borrower pursuant to Section 4.02 of the Loan Regulations shall be at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of any such special commitments outstanding from time to time. SECTION 2.06. Interest and other charges shall be pay- able semi-annually on June 1 and December 1 in each year. SECTION 2.07. The Borrower shall repay the principal of the Loan in accordance with the amortization schedule set forth in Schedule 1 to this Agreement. ARTICLE III Use of Proceeds of the Loan SECTION 3.01. The Borrower shall apply the proceeds of the Loan exclusively to financing the cost of goods required to carry out the Project described in Schedule 2 to this Agreement. The specific goods to be financed out of the proceeds of the Loan and the methods and procedures for procurement of such goods shall be determined by agree- ment between the Bank and the Borrower, subject to modifi- cation by further agreement between them. SECTION 3.02. The Borrower shall cause all goods financed out of the proceeds of the Loan to be imported into the territories of the Guarantor and there to be used exclu- sively in the carrying out of the Project. 5 ARTICLE IV Bonds SECTION 4.01. The Borrower shall execute and deliver Bonds representing the principal amount of the Loan as provided in the Loan Regulations. SECTION 4.02. The General Manager of the Borrower and such person or persons as he shall appoint in writing are designated as authorized representatives of the Borrower for the purposes of Section 6.12 (a) of the Loan Regulations. ARTICLE V Particular Covenants SECTION 5.01. (a) The Borrower shall carry out the Project with due diligence and efficiency and in conformity with sound engineering and financial practices. (b) To assist it in the carrying out of the Project, the Borrower shall employ suitably qualified and competent engineering consultants satisfactory to the Bank. (c) The general design of the Project, including major changes in the design, shall be satisfactory to the Bank and the Borrower. (d) The Borrower shall furnish to the Bank, promptly upon their preparation, the plans and specifications for the Project and any material modifications subsequently made therein, in such detail as the Bank shall from time to time request. (e) The Borrower shall maintain records adequate to identify the goods financed out of the proceeds of the Loan, to disclose the use thereof in the Project, to record the progress of the Project (including the cost thereof) and to reflect in accordance with consistently maintained sound accounting practices the operations and financial condition of the Borrower; shall enable the Bank's representatives to 6 inspect the Project, the goods, the plant sites and operations of the Borrower and any relevant records and documents; and shall furnish tn the Bank all such information as the Bank shall reasonably request concerning the expenditure of the proceeds of the Loan, the Project, the goods, and the operations and financial condition of the Borrower. SECTION 5.02. (a) The Bank and the Borrower shall cooperate fully to assure that the purposes of the Loan will be accomplished. To that end, each of them shall furnish to the other all such information as it shall reasonably request with regard to the general status of the Loan. (b) The Bank and the Borrower shall from time to time exchange views through their representatives with regard to matters relating to the purposes of the Loan and the maintenance of the service thereof. The Borrower shall promptly inform the Bank of any condition which inter- feres with, or threatens to interfere with, the accomplish- ment of the purposes of the Loan or the maintenance of the service thereof. SECTION 5.03. The Borrower undertakes that, except 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 principal of, and interest and other charges on, the Loan and the Bonds, and that in the creation of any such lien express provision will be made to that effect; provided, however, that the foregoing provisions of this Section shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for the payment of the purchase price of such property; (ii) any lien on commercial goods to secure a debt maturing not more than one year after the date on which it is originally incurred and to be paid out of the proceeds of sale of such commercial goods; or (iii) any lien arising in the ordinary course of banking transactions and securing a debt matur- ing not more than one year after its date. 7 SECTION 5.04. The Borrower shall pay or cause to be paid all taxes, if any, imposed under the laws of the Guarantor or laws in effect in the territories of the Guarantor on or in connection with the execution, issue, delivery or registration of this Agreement, the Guarantee Agreement or the Bonds, or the payment of principal, interest or other charges thereunder; provided, however, that the provisions of this Section shall not apply to taxation of payments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individual or corporate resident of the Guarantor. SECTION 5.05. The Borrower shall pay or cause to be paid all taxes, if any, imposed under the laws of the country or countries in whose currency the Loan and the Bonds are payable or laws in effect in the territories of such country or countries on or in connection with the execution, issue, delivery or registration of this Agreement, the Guarantee Agreement or the Bonds. SECTION 5.06. Except as shall be otherwise agreed between the Bank and the Borrower, the Borrower shall insure or cause to be insured the goods financed out of the proceeds of the Loan against risks incident to their purchase, importation and delivery to the site of the Project. Such insurance shall be consistent with sound commercial practice and shall be payable in dollars or in the currency in which the cost of the goods insured there- under shall be payable. SECTION 5.07. (a) The Borrower shall take all action within its power to maintain its exi-tence and right to carry on operations and shall, except as the Bank shall otherwise agree, take all steps necessary to maintain and renew all rights, powers, privileges and franchises which are necessary or useful in the conduct of its business. (b) The Borrower shall operate and maintain its plants, equipment and property, and from time to time shall make 8 all necessary renewals and repairs thereof, all in accord- ance with sound engineering standards; and shall at all times operate its plants and equipment and maintain its financial position in accordance with sound business and public utility practices. SECTION 5.08. The Borrower shall from time to time take all steps necessary or desirable to obtain such adjust- ments in its rates as will provide revenues sufficient: (a) to cover operating expenses, including adequate maintenance and depreciation, taxes and interest; (b) to meet repay- ments on long-term indebtedness but only to the extent that such repayments shall exceed provision for depreciation; and (c) to leave a surplus for financing a reasonable portion of future expansion of its power facilities. SECTION 5.09. Except as the Bank and the Borrower shall otherwise agree, the Borrower shall not incur debt unless its net revenues for the fiscal year next preceding such incurrence, or for a later twelve-month period ended prior to such incurrence, together with 75% of the reason- ably estimated net revenues from any projects under con- struction including projects to be constructed with the proceeds of the proposed new debt, would be not less than 1.4 times the maximum annual debt service requirement for any succeeding fiscal year on all dcbt (including the debt to be incurred). For purposes of this Section: (a) The term "debt" shall mean all indebtedness of the Borrower including loans or credits contracted for but not yet drawn down, and including any part of the capital stock of the Borrower which is required to be redeemed pursuant to a fixed redemption schedule. (b) Debt shall be deemed to be incurred on the date on which a loan or credit shall be approved by the Board of Directors of the Borrower. 9 (c) The term "net revenue" shall mean gross revenue from all sources, adjusted to take account of rates in effect at the time of the calculation even though they were not in effect during such fiscal year, less all operating and administrative expenses, including provision for income and profit taxes, if any, but before provision for depreciation and for interest and other charges on debt. (d) The term "debt service requirement" shall mean the aggregate amount of amortization (including sinking fund payments), interest and other charges on debt including fixed interest payments on capital stock. (e) The equivalent in currency of the Guarantor of amounts of debt payable in any other currency shall be determined on the basis of the rate of exchange which on the date of the calculation is available to the Borrower for the purchase of such other currency for debt service. ARTICLE VI Remedies of the Bank SECTION 6.01. (i) If any event specified in paragraph (a), paragraph (b), paragraph (e) or paragraph (f) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of thirty days, or (ii) if any event specified in paragraph (c) of Section 5.02 of the Loan Regu- lations shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower, then at any subsequent time during the continuance thereof, the Bank, at its option, may declare the principal of the Loan and of all the Bonds then outstand- ing to be due and payable immediately, and upon any such declaration such principal shall become due and payable immediately, anything in this Agreement or in the Bonds to the contrary notwithstanding. 10 ARTICLE VII Effective Date; Termination SECTION 7.01. The following is specified as additional matter within the meaning of Section 9.02 (c) of the Loan Regulations, to be included in the opinion or opinions to be furnished to the Bank: That all necessary governmental validations, consents and approvals to authorize execution of the Loan Agreement on behalf of the Borrower and to authorize construction and operation of the Project have been given or obtained. SECTION 7.02. A date sixty days after the date of this Agreement is hereby specified for the purposes of Sec- tion 9.04 of the Loan Regulations. ARTICLE VIII Miscellaneous SECTION 8.01. The Closing Date shall be May 31, 1965, or such other date as may from time to time be agreed between the Borrower and the Bank. SECTION 8.02. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: For the Borrower: National Power Corporation 161 Bonifacio Drive, Port Area Manila, Philippines Alternative address for cablegrams and radiograms: Napocor Manila, Philippines 11 For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington 25, D. C. United States of America Alternative address for cablegrams and radiograms: Intbafrad Washington, D. C. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Loan Agreement to be signed in their respective names and delivered 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/ EUGENE R, BLACK President NATIONAL POWER CORPORATION By /s/ F. M. ZABLAN Authorized Representative 12 SCHEDULE : Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* June 1, 1965 394,000 December 1, 1965 406,000 June 1, 1966 417,000 December 1, 1966 429,009 June 1, 1967 441,000 December 1, 1967 454,000 June 1, 1968 467,000 December 1, 1968 481,000 June 1, 1969 494,000 December 1, 1969 509,000 June 1, 1970 523,000 December 1, 1970 538,000 June 1, 1971 554,000 December 1, 1971 570,000 June 1, 1972 586,000 December 1, 1972 603,000 June 1, 1973 620,000 December 1, 1973 638,000 June 1, 1974 656,000 December 1, 1974 675,000 June 1, 1975 695,000 December 1, 1975 715,000 June 1, 1976 735,000 December 1, 1976 756,000 June 1, 1977 778,000 December 1, 1977 801,000 June 1, 1978 823,000 December 1, 1978 847,000 June 1, 1979 872,000 December 1, 1979 897,000 June 1, 1980 922,000 December 1, 1980 949,000 June 1, 1981 976,000 December 1, 1981 1,004,000 June 1, 1982 1,033,000 December 1, 1982 1,063,000 June 1, 1983 1,093,000 December 1, 1983 1,125,000 June 1, 1984 1,157,000 December 1, 1984 1,190,000 June 1, 1985 1,225,000 December 1, 1985 1,260,000 June 1, 1986 1,296,000 December 1, 1986 1,333,000 * To the extent that any part of the Loan is repayable in a currency other than dollars (see Loan Regulations, Section 3.03), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. 13 Premiums on Prepayment and Redemption The following percentages are specified as the premiums payable on prepayment in advance of maturity of any part of the principal amount of the Loan pursuant to Section 2.05 (b) of the Loan Regulations or on the redemption of any Bond prior to its maturity pursuant to Section 6.16 of the Loan Regulations: Time of Prepayment or Redemption Premium Not more than three years before maturity ....................... 1/2 of 1% More than three years but not more than six years before maturity........ . 1% More than six years but not more than eleven years before maturity ..... 13/4% More than eleven years but not more than sixteen years before maturity.... 21/2% More than sixteen years but not more than twenty-one years before maturity. 3 % More than twenty-one years but not more than twenty-three years before matu- rity ............................. 43/4% More than twenty-three years before maturity ......................... 534% 14 SCHEDULE 2 Description of Project The Project is the expansion of the power generation and transmission facilities of the Borrower through the construction of a hydro-electric power station on the Angat River about 71/2 kilometers upstream of the existing Ipo water supply dam plus transmission facilities to Manila. It will consist of the following: 1. An earth and rockfill dam constructed to a crest elevation of about 220 meters above sea level to provide a reservoir with useable storage capacity of about 580 million cubic meters with drawdown of 37 meters; 2. A concrete spillway with crest elevation about 202 meters above sea level equipped with four tainter gates approximately 12.5 meters wide by 15 meters high; 3. Power generating facilities consisting of four turbine-generator units of about 50,000 kw rating each in a main powerhouse plus one turbine- generator unit of about 6,000 kw rating in an auxili- ary powerhouse, which will be constructed to allow for further expansion; 4. Transmission facilities to Manila consisting of three 115 kv circuits plus terminal equipment in the receiv- ing substations; and 5. Water conduits, valves, dikes, etc. and all ancillary and control equipment for the completed installation.