Colombia - Bogota Power Project : Loan 0246 - Loan Agreement - Conformed

LOAN NUMBER 246 CO Loan Agreement (Bogota Power Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND EMPRESA DE ENERGIA ELECTRICA DE BOGOTA DATED JANUARY 20, 1960 LOAN NUMBER 246 CO Loan Agreement (Bogota Power Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND EMPRESA DE ENERGIA ELECTRICA DE BOGOTA DATED JANUARY 20, 1960 AGREEMENT, dated January 20, 1960, between INTER- NATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and EMPRESA DE ENERGIA ELECTRICA DE BOGOTA (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 June 15, 1956, subject, however, to the modifications thereof set forth in Schedule 3 to this Agreement (said Loan Regulations No. 4 as so modified 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 equiv- alent to seventeen million six hundred thousand dollars ($17,600,000). 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 The amount of the Loan may be withdrawn from the Loan Account as provided in, and subject to the rights of cancellation and suspension set forth in, the Loan Regulations.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at the rate of three-fourths of one per cent (3/4 of 1%0) per annum on the principal amount of the S 4 Loan not so withdrawn from time to time.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shall accrue from a date sixty days after the date of this Agreement to the respective dates on which amounts shall be withdrawn by the Borrower from the Loan Account as provided in Article IV of the Loan Regulations or shall be cancelled pursuant to Article V of the Loan Regulations. SECTION 2.04. The Borrower shall pay interest at the rate of six per cent (6o) per annum on the principal amount of the Loan so withdrawn and outstanding from time to time.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 com- mitments entered into by the Bank at the request of the Borrower pursua-lt to Section 4.02 of the Loan Regulations shall be at the rate of one half of one per cent ('/2 of 17) 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 May 15 and November 15 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 c.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 modi- fication by further agreement between them. 5 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. 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 (Gerente Generai) of the Borrower and such person or persons as he fhall appoint in writing are designated as authorized representa- tives of the Borrower for the purposes of Section 6.1.2 (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. To assist it in carrying out the Project, the Borrower shall employ competent and experienced engineering consultants and con- tractors and the terms and conditions of their employment shall be satisfactory to the Bank. (b) 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. (c) 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 6 accounting practices the operations and financial condition of the Borrower; shall enable the Bank's representatives to inspect the Project, the goods, the Borrower's properties and any relevant records and documents; and shall furnish to the Bank all such information as the Bank shall reason- ably request concerning the expenditure of the proceeds of the Loan, the Project, the goods, and the oper-ations 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 interferes with, or threatens to interfere with, the accomplishmnt 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, or of any corporation or company all or a majority of the capital stock of which shall be owned by 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 provisions 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; or (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. 7 SECTION 5.04. The Borrower shall pay or cause to be paid all taxes or fees, if any, imposed under the laws of the Guar- antor 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, or fees upon, 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 and fees, 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 execu - tion, issue, delivery or registration of this Agreement, the Guarantee Agreement or the Bonds. SECTION 5.06. Except as shall be otherwise agreed be- tween the Bank and the Borrower, the Borrower shall take out or cause to be taken out and maintain or cause to be maintained such insurance, against such risks and in such amounts, as shall be consistent with sound business prac- tices. Insurance covering marine and transit hazards on the goods financed out of the proceeds of any part of the Loan shall be payable in dollars or in the currency in which the cost of the goods insured thereunder shall be payable. SECTION 5.07. (a) The Borrower shall at all times main- tain its existence 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, priv- ileges 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 make all 8 necessary renewals and repairs thereof, all in accordance with sound engineering standar(ds; 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 not, without the con- sent of the Bank, sell or otherwise dispose of all or substan- tially all of its property and assets or all or substantially all the property included in the Project or any plant included therein, unless the Borrower shall first redeem and pay, or make adequate provision satisfactory to the Bank for redemption or payment of, all of the Loan which shall then be outstanding and unpaid. 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, whichever is the greater, shall be not less than 1.3 times the maximum debt service requirement for any succeeding fiscal year on all debt, including the debt to be incurred. For the purposes of this Section: (a) The term "debt" shall include the assumption and guarantee of debt and shall mean all indebtedness of the Borrower maturing by its terms more than one year after the date on which it is incurred and indebtedness matur- ing on demand, or by its terms in one year or less, in excess of 10,000,000 Colombian pesos; (b) Debt shall be deemed to be incurred on the date of execution and delivery of a contract or loan agreement providing for such debt; (c) The term "net revenues" shall mean gross revenues from all sources, adjusted to take account of rates in effect at the time of the incurrence of debt even though they were not in effect during the fiscal year or twelve-month period to which such revenues relate, less all operating and adminis- trative expenses, including provisions for taxes, if any, but 9 before provision covering depreciation, interest and other charges on debt; (d) The term "debt service requirement" shall mean the aggregate amount of amortization (including sinking fund payments, if any) interest and other charges on debt; and (e) Debt service payable in a currency other than Colom- bian pesos shall be valued at the rate of exchange at which such other currency is obtainable, on the date the additional debt is incurred, for the purpose of servicing such debt, or if such currency is not so obtainable, at the rate of exchange reasonably determined by the Bank. SECTION 5.10. The Borrower shall take all steps neces- sary or desirable to obtain such adjustments in its rates as will provide revenues sufficient: (a) to cover operating expenses, including taxes, if any, adequate maintenance and depreciation, and interest; (b) to meet repayments on long-term indebtedness to the extent that such repayments shall exceed provision for depreciation; and (c) to leave, after paying, or providing for, dividends, if any, a reason- able surph ' to finance new investment. ARTICLE VI Remedies of the Bank SECTION 6.01. (i) If any event specified in paragraph (a), paragraph (b), paragraph (e) orc 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 Regulations 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 out- standing to be due and payable immediately, and upon any I 10 such declaration such principal shall become due and pay- able immediately, anything in this Agreement or in the Bonds to the contrary notwithstanding. ARTICLE VII Effective Date; Termination SECTION 7.01. The following events are specified as additional conditions to the effectiveness of this Agree- ment within the meaning of Section 9.01 (a) (ii) of the Loan Regulations: (a) the Borrower shall have submitted evidence to the Bank that an appropriate increase, mutually satisfactory to the Borrower and the Bank, in the rates charged by the Borrower has been duly authorized; (b) clarification in a manner satisfactory to the Bank of the term net profits (las utilidades liquidas) as used in the Second Clause of Resolution No. 60 of 1959 of the Municipal Council of the Special District of Bogota; and (c) the Municipal Council of Bogota shall have adopted a resolution (acuerdo) establishing in a manner satisfac- tory to the Bank the basis for the selection of the members of the Borrower's Board of Directors (Junta Directiva) upon the expiration of the fideicomiso created by Presiden- tial Decree No. 1128 of 1951, extended by Presidential Decree No. 0744 of 1954 and affirmed by Municipal Acuerdos Nos. 18 and 30 of 1959. SECTION 7.02. The following is specified as an additional matter within the meaning of Section 9.02 (e) of the Loan Regulations, to be included in the opinion or opinions to be furnished to the Bank: that the steps taken for clarification of the term net profits (las utilidades liquidas) are valid and binding upon the Municipality of Bogota. 11 SECTION 7.03. A date 90 days after the date of this Agreement is hereby specified for the purposes of Section 9.04 of the Loan Regulations. ARTICLE VIII Miscellaneous SECTION 8.01. The Closing Date shall be April 30, 1963. SECTION 8.02. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: For the Borrower: Empresa de Energia Electrica de Bogota Bogota, Colombia Alternative address for cablegrams and radiograms: Energia Bogota, Colombia 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. IT WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Loan Agreement to be signed in their respective 12 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/ W. A. B. ILIFF Vice-President EMPRESA DE ENERGIA ELECTRICA DE BOGOTA By /s/ 1\ANUEL J. MADERO PARIS Authorized Representative * 13 SCHEDULE 1 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars) * May 15, 1963 $198,000 November 15, 1963 203,000 May 15, 1964 210,000 November 15, 1964 216,000 May 15, 1965 222,000 November 15, 1965 229,000 May 15, 1966 236,000 November 15, 1966 243,000 May 15, 1967 250,000 November 15, 1967 258,000 May 15, 1968 266,000 November 15, 1968 274,000 May 15, 1969 282,000 November 15, 1969 290,000 May 15, 1970 299,000 November 16, 1970 308,000 May 15, 1971 317,000 November 15, 1971 327,000 May 15, 1972 336,000 November 15, 1972 346,000 May 15, 1973 357,000 November 15, 197S 368,000 May 15. 1974 379,000 November 15, 1?7 4 390,000 May 15, 1975 402,000 November 15, 1975 414,000 May 15, 1976 426',000 November 15, 1976 439,000 May 15, 1977 452,000 November 15, 1977 466,000 May 15. 1978 480,000 November 15, 1978 494,000 May 15, 1979 509,000 November 15, 1979 524,000 May 15, 1980 540,000 November 15, 1980 556,000 May 15, 1981 573,000 November 15, 1981 590,000 May 15, 1982 608,000 November 15, 1982 626,000 May 15, 1983 645,000 November 15, 1983 664,000 May 15, 1984 684,000 November 15, 1984 704,000 * To the extent that any part of the Loan is repayable in a currency other than dollars (see Loan Regulations, Section 3.02), the figures in this column represent dollar equivalents determined Ps for purposes of withdrawal. 14 Premiums on Prepayment and Redemption The following percentages are specified as the premiums payable on repayment 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 3 years before maturity ..... 1/2% More than 3 years but not more than 6 years before maturity............... 1% More than 6 years but not more than 11 years before maturity............... 2% More than 11 years but not more than 16 years before maturity............... 3% More than 16 years but not more than 21 years before maturity. .............. 4% More than 21 years but not more than 23 years before maturity.............. 5% More than 23 years before maturity.. ... ..6% 15 SCHEDULE 2 Description of the Project The power generation and distribution facilities of the Borrower will be expanded through installation of new hydroelectric and thermoelectric generation units plus additions to the Borrower's transmission and distribution systems. The Project consists of the following: 1. Construction across the Siecha-Tomine River of an earth-fill dam with an initial height of about 38 meters to create a reservoir for improved regulation of the Bogota River. Installation on the Bogota River of a related control structure and a pumping station to pump into the Tomine Dam water of the Bogota River not otherwise regulated and used. 2. Addition of a fourth hydroelectric generation unit in the existing Laguneta plant. A turbine generator of 18 MW capacity plus all necessary electrical, mechani- cal and civil appurtenances will be installed. 3. Construction, at a site adjacent to the existing Salto hydroelectric plant, of a new station, to be known as Salto II, including a tunnel, penstocks, outlet works and all necessary electrical, mechanical and civil ap- purtenances for the complete installation of two 33 MW hydroelectric generation units and sending sub- station. 4. Installation, at a site near Zipaquira, of a single unit 33 MW thermoelectric generation station. All neces- sary auxiliary power station equipment such as wiring, controls, coal handling equipment, pumps and piping, including a substation, will be installed. 5. Additions and modifications to existing substations, tie-lines and transmission lines which connect the Laguneta and Salto stations to the system and, in the 16 city of Bogota, additions and modifications to the ter- minal substations through which power is distributed to the city. 6. Additions and modifications to the Borrower's sec- ondary distribution facilities in Bogota and vicinity. 7. Purchase of geological equipment for, and finance for surveys of, studies to determine the basis for further exploitation of the hydroelectric potential of the Bogota River complex. 17 SCHEDULE 3 Modifications of Loan Regulations No. 4 For the purposes of this Agreement the provisions of Loan Regulations No. 4 of the Bank, dated June 15, 1956, shall be deemed to be modified as follows: (a) By the deletion of Section 2.02. (b) By the deletion of Section 9.03 and the substitution therefor of the following Section: "Effective Date. Except as shall be otherwise agreed by the Bank and the Borrower, the Loan Agreement and Guarantee Agreement shall come into force and effect on that date upon which the Bank shall send to the Borrower and to the Guarantor notice of its acceptance of the evidence required by Section 9.01." (c) Paragraph 14 of Section 10.01 is changed to read as follows: "14. The term 'external debt' means any debt payable in any medium other than currency of the Guar- antor, whether such debt is or may become pay- able absolutely or at the option of the creditor in such other medium."