Conformed Copy - L3165 - Energy Sector Project - Guarantee Agreement

Page 1 LOAN NUMBER 3165 PH Guarantee Agreement (Energy Sector Project) REPUBLIC OF THE PHILIPPINES and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated March 16, 1990 LOAN NUMBER 3165 PH GUARANTEE AGREEMENT AGREEMENT, dated March 16, 1990, between REPUBLIC OF THE PHILIPPINES (the Guarantor) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank). WHEREAS (A) the Guarantor, National Power Corporation aid Philippine National Oil Company (the Borrowers), having been satisfied as to the feasibility and priority of the Project described in Schedule 2 to the Loan Agreements, have requested the Bank to assist in the financing of the Project; (B) by the Loan Agreement of even date herewith between the Bank and National Power Corporation (NPC), the Bank has agreed to extend to NPC a loan in various currencies equivalent to two hundred million dollars ($200,000,000), on the terms and conditions set forth in the Loan Agreement (NPC Loan Agreement), but only on condition that the Guarantor agree to guarantee the obli- gations of NPC in respect of such loan as provided in this Agreement; (C) by the Loan Agreement of even date herewith between the Bank and Philippine National Oil Company (PNOC), the Bank has agreed to extend to PNOC a loan in various currencies equivalent to one hundred fifty million dollars ($150,000,000), on the terms and conditions set forth in the Loan Agreement (PNOC Loan Agreement), but only on condition that the Guarantor agree to guarantee the obligations of PNOC in respect of such loan as provided in this Agreement; 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 Page 2 the Borrower; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Loan and Guarantee Agreements" of the Bank, dated January 1, 1985, with the last sentence of Section 3.02 deleted (the General Conditions) constitute an integral part of this Agreement. Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to and Section 1.02 of the respective Loan Agreements have the respective meanings therein set forth. ARTICLE II Guarantee; Provision of Funds Section 2.01. The Guarantor declares its commitment to the objectives of the Project as set forth in Schedule 2 to the respective Loan Agreements, and, to this end, without limitation or restriction upon any of its other obligations under the Guarantee Agreement, the 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 respective Loans, and the premium, if any, on the prepayment of the respective Loans, and the punctual performance of all the other obligations of the respective Borrowers, all as set forth in the respective Loan Agreements. Section 2.02. Without limitation or restriction upon the provisions of Section 2.01 of this Agreement, the Guarantor specifically undertakes, whenever there is reasonable cause to believe that the funds available to the respective Borrowers will be inadequate to meet the estimated expenditures required for the carrying out of the Project, to make arrangements, satisfactory to the Bank, promptly to provide the respective Borrowers or cause the respective Borrowers to be provided with such funds as are needed to meet such expenditures. ARTICLE III Representative of the Guarantor; Addresses Section 3.01. The Secretary of Finance 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: For the Guarantor: Secretary of Finance Department of Finance Manila, Philippines Cable address: Telex: SECFIN 40268 CB-CONF Page 3 Manila 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 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, 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. REPUBLIC OF THE PHILIPPINES By /s/ Emmanuel Pelaez Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Shinji Asanuma Acting Regional Vice President Asia