Conformed Copy - L2889 - Power Sector Adjustment Loan - Amendment 2

Page 1 July 11, 1989 Dr. Luis F. Alarcon-Mantilla Ministro de Hacienda y Credito Publico Carrera 7 No. 6-45, Oficina 801 Bogota - Colombia Re: Loan No. 2889-Co Power Sector Adjustment Loan Amendment to the Loan Agreement Dear Sir: I refer to the Loan Agreement dated March 16, 1988 (the Loan Agreement) for the above-referenced Loan between the Republic of Colombia (the Borrower) and the International Bank for Reconstruction and Development (the Bank) and your request to amend the Loan Agreement to introduce a cross-default clause pursuant to the Agreement on Cofinancing between the Bank and the Export-Import Bank of Japan dated March 25, 1987 for purposes of certain financial assistance to be obtained by Financiera Electrica Nacional (FEN) from Japan's Export-Import Bank. I am pleased to inform you that the Bank agrees to amend the Loan Agreement as hereby proposed: 1. Section 1.02 is amended by deleting the word "and' after paragraph (s); substituting ';and" for the period after paragraph (t) and by adding the following paragraph (u) to such section: "(u) "EXIMBANK Loan Agreement" means the credit agreement to be entered into between FEN and the Export-Import Bank of Japan for an untied Japanese Yen Loan in the equivalent amount of up to 300 million dollars, such loan to be guaranteed by the Republic of Colombia and to complement the financing required under the Power Adjustment Program". 2. Section 4.01 is amended by: (i) deleting the word land" after paragraph (b); (ii) substituting ";and, for the period at the end of paragraph (c); and (iii) by adding the following new paragraph (d) to such section: "(d) FEN or the Borrower, in its capacity as guarantor under the Eximbank Loan Agreement, shall have failed to pay any amount due to the Export-Import Bank of Japan, whether in respect of principal, interest, fees, changes or otherwise, and whether by scheduled maturity, by required prepayment, by acceleration, by demand or otherwise, under the Eximbank Loan Agreement; provided, however, that: (i) the failure to pay such amount shall have continued for a period of not less than sixty days and shall be continuing; and (ii) the aggregate of the amounts due and payable shall exceed the amount of the equivalent of two million five hundred thousand dollars ($2,500.000)". 3. Section 4.02 is amended to read as follows: "Section 4.02. Pursuant to Section 7.01 (h) of the General Conditions the following additional events are specified: (a) that any event specified in paragraphs (a) or (b) of section 4.01 of the 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, and (b) that the loan provided for in the Eximbank Loan Agreement has become due and payable prior to the agreed maturity thereof due to failure by Financiera Electrica Nacional or the Borrower to comply with any of their respective obligations under the Eximbank Loan Agreement". Unless the context otherwise requires, the several terms defined in the Loan Agreement and in the General Conditions (as so defined) have the respective meaning therein set forth in this Page 2 Amendment letter. The amendments set forth in this Amendment Letter shall come into force and effect on the date upon which the Bank shall acknowledge receipt of a duly countersigned copy of this Agreement. Please confirm your agreement with the foregoing by signing the enclosed copy of this letter and returning it to us. Sincerely yours, By /s/ Katherine Marshall Acting Director Country Department III Latin America and the Caribbean Region CONFIRMED: By /s/ Luis F. Alarcon Mantilla Authorized Representative Date: 7 JUL. 1989