Colombia - Anchicaya And Yumbo Power Project : Loan 0113 - Loan Agreement - Conformed

LOAN NUMBER 113 CO Loan Agreement (Anchicaya and Yumbo Power Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND CENTRAL HIDROELECTRICA DEL RIO ANCHICAYA LIMITADA DATED MARCH 24, 1955 KOut Agreentent AGREEMENT, dated March 24, 1955, bCtWeCn INTER- NATIONAL BANK FOR REW0NTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and CENTRAL I-IITBOELECTRICA DEL Rio ANCICAYA LIMTITADA (hereinafter called the Bor- rower). ARTICLE I Loan Regulations SEOTION 1.01. The parties to this fjoan Agreeient accept all the provisions of Loan Regulations No. 4 of the Bank dated October 15, 1952, subject, however, to the modifica- tions thereof set forti in Schedule 3 to this Agreement (said Loan Regulations No. 4 as so modified being hereinafter called the Loan Regulations), with the sare force and eff ect as if they were fully set forth herein. ARTIOLE II The Loan SECTION 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in this Agreiient set forth or referred to, an amioiut in various currencies equivalent to four million five hundred thousand dolkirs ($4,500,000). SECTION 2.02. rTb sll opeii a Loi i A ,eoip on its books in the tame of the 13orrower and shall credi( lo sui Account the amouit of the ljoan. The amount of the Lown may be withdrawn from the Loan Accout as provided in, and subjeet to the iights of cancellation and suspension set forth in, the Loan Regulations.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 ite of three-fourths of one per 4 cent (% of 17/ ) per annum on the principal amount of the Loan not so witidawn from time to time. SECTION 2.04. The Borrower shall pay interest at the rate of fouir and thiee-fouirths per cent (4%3 ) pQr annum on the principal amount of the Loan so withdrawn and outatanding from time to time. SECTION 2.05. Except as the Bank and the IBorrower shall otherwise agree, the charge payable for special com- mitments 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 (V, of 1o) 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 January 15 and July 15 in each year. SECTION 2.07. The Borrower shall repay the principal of the Loan in accordace with the amortitation 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 fnancing 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 shall be determined by agreement between the Bank and the Borrower, subject to modification 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 exclusively in the carrying out of the Project. ARTICLE IV Bonds SECTION 4.01. The Borrower shEll execute and deliver Bonds representing the principal amount of the Loan as provided in the Loan Regulations. SECTION 4.02. The Manager (Gerente) of the Borrower and such person or persons as he shall appoint in writing are designated as authorized representatives of the Bor- rower 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 (1on1formyity with sound engineering and financial pretices. To assist it in carrying out the Project the Borrower shall employ competent and experienced engineering consultants and contractors. (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. (c) The Borrower shall maintain records adequate to identify the goods financed out of the proceeds of tlh Loni, to disclose the use theieof in the 1Project, to record lie progress of the Pirojeci (inluding The ost 'thereofi) 11ad i reflect in accordance witi consistently malihillied souind ac- counting practices the finvial condition and operations of the Borrower; shall enablc the Bank's representatives to inspect the Project, the goods and any relevant records and documents; and shall furnish to the Bank all such informa.- tion as the Bank shall reasonably request concerning the expenditure of the proceeds of the Loan, the Project, the 6 goods, and the financial condition and operations of the Borrow er. SECTION 5.02. (a) Tie Bank and the Borrower shall co- operate 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 ro'presentatives with regard to matters relating to the purposes of the Loan and the maintenance of the service thereof. 'fhe Borrower shall promptly inform the Bank of any condition whic- inter- fores with, or threatens to interfere with, the accomplish- ment of the purposes of the Loan or the maintenance of the service thereof. RECTION 5.03. The Borrower undertakes that, except as the Bank shall otherwise agree, if any lien sLAll be created on any assets of the Borrower or of any corpora'ion or company all or a majority of the clnpital stock of which shall be owned by the Borrower, as security for any debt, such lien will ipso furto 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 lieu express provision will be made to that effec'; 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 com- mercial goods to secure a debt maturing not more than one year after the date on wEich it is originally incurred and to be paid out of the proceeds of sale of such commer- cial goods; or (iii) 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 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 taxa- tion of, or fees upon, payments under any Bond to a holder thereof other than the Bank when such Bond is benefi- cially owned by an individual or corporate resident of the Guarantor. SECTION 5.05. The Boriower 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 execution, 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 in- sure or cause to be insured the goods financed with the proceeds of the Loan against risks incident to their pur- chase and importation into the territories of the Guarantor. 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 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, maintain and renew all rights, powers, privileges and franchises owned by it and necessary or useful in the operation 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 standards; and shall at all times operate its plants and equipment and maintain its financial position in accordance with sound business and public utility practicesi 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 in- cluded therein, unless the Borrower shall first redeem and pay, or make adequate provision satisfactory to the Bank for redemption or payment of, 111 of the Loan which shall then be outstanding and unpaid. SECTION 5.09. Until such time as the Project shall have been completed, the Borrower shall not, without the consent of the Bank, directly or indirectly (i) declare or pay any dividends, or acquire.any shares of its capital stock for a consideration; or (ii) undertake or execute any major projects or developments other than the Project or make any major additions to its plant a:Id other properties at any time, unless at such time the Borrower has set aside and made available in a special reserve fund currency of the Guarantor sufficient to cover expenditures which will not be covered out of the proceeds of the Loan and which will be required for carrying out the Project. SECTION 5.10. Unless the Bank shall otherwise agree, the Borrower shall not declare or pay* any divider.d, or make any distribution on any shares of its capital stock, other than a dividend payable solely in shares of its capital stock, nor shall the Borrower acquire any shares of its capital stock for a consideration, if, as a result of any such dividend or distribution (other than those payable solely in shares of its stock) or such acquisition of shares of capital stock, the accumulated earned surplus of the Bor- rower, determined after adequate provision for mainte- 9 nance and depreciation and otherwise in accordaice with sound accounting praetice, would be reduced below an amount equivalent to the Borrower's aggregate require- ments for the next twelve-month period for the payment of principal (including amortization and sinking fund pay- ments) of, and interest and other charges on, all outstand- ing debt other than debt incurred in the ovdinarv course of business and maturing by its terms in not more than one year after its date. SECTTON. 51. If the Boirower shll propose to incur any debt, the Borrower shalil inform the Bank of suih pro)osa1l and, before the pr oposed action is faken, shall a ffordi the Bank all opportnity which is renasoably practicable in the circumstances to exchaige views wih II the Borrower witli respect thereto; provided, however, that the foregoilg pvo- visions shall not appv to: (i) the inticurri nk of nddifionial debt through utilization, in accordnne with the terms or any credit established prior to Ihe date of Ihis Agreement, of any unused amounts available under sueih credit; or (ii) the incturing by the Borrower in the ordinary course of its business of any indehtedness niaturing not more than one year after its date. SECTTON 5.12. Except as the Bank shali oherwise ngree, the Borrower shall not incur any long-lerin dehtedness if, after the incurring of any such long-1erm indebtedness, the long-term indebtedness of the Borroweor wold execed the total capital and surplus of the fRoirowei,. For the pur- poses of this Section the following teris shal have the meanings hereinafter set forth. (a) The term "long-term indebiediess" smal m hean df mnaturing by its terms more thai oie yer after the Ite on which it is incurred. Whenever for the purposes of 11his Section it shall be neeessary to valuie in Volombian cu-rreney debt payable in another curreny, stiel valhiotion silil be made on the basis of the vate of exchange at which stich 10 other currency is at the time such valuation is made obtain- able for the purposes of servicing such debt. (b) The term "capital and surplius'' shall mean capital and surplus determined in accordance with sound account- ing practices. SECTIoN 5.13. The Borrower shall from time to time take all steps necessary or desirable to obtain such adjust- ments in its rates as will provido revenues sufficient: (a) to cover operating expens,s, inciuding adequate mainterianeo and depreciatiot, and interest; (b) to meet repayments on long-term indebtedness but only to the extent that such re- payients shal exceed provision for depreciation ; and (e) to leave a reasonable surplus to finance new investment. ARTIOLE VI Remedies of the Bank SECTION 6.01. (i) If any event specified in paragraph (a), paragrapli (b), paragraph (e) or paragraph ( ) of Section 5.02 of the Loan Regulai,ons siall occur and shall continuc for a period of thirty days, or (ii) if any eveit specified in paragraph (e) of' Svelion 5.02 of the Loan Reg- ulations shall occur am] sha1l conltilnue for a, periodi of sixty days after Iofice tcreof shal Iave been givenl by tlie Baik to the Horrower, thei at. an subsequent time during the continuance tiereof, tlie Bank, at its optioi, may declare the principal of the Loaii and of all the Bonds then out- standing to be duc and payable immiediately, and upon any such declaration such prineipal shall become due and pay- able immediately, anything in this Agreement or in the Bonds to the contrary notwithstanding. 11 ARTICLE VII Effective Date; Termination SECTION 7.01. The following events are specified as ad- ditional conditions to the effectiveness of this Agreement within the meaning of Section 9.01(a) (ii) of the Loan Reg- ulations: (a) the Borrower shall have obtained from the Municipality of Cali assurances satisfactory to the Bank concerning the timely expansion of the municipal electric distribution system to a capacity sufficient to distribute all energy generated by the Borrower; (b) airaugenents sat- isfactory to the Bank shall have been made for provision of the local currency needed by the Borrower in the years 1955 and 1956. SECTION 7.02. A date 60 days after ihe date of' this Agreement is hereby specified for the purpdses of Section 9.04 of the Loan Regulations. ARTICLE VIII Miscellaneous SECTION 8.01. The Closing Date shall be December 31, 1958. SECTION 8.02. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: For the Borrower: Central lidroelketrica del Rio Achicaya 1Lnimitada Apartado Postal 137 Cali, Colombia For the Bank: International Bank for R,econstruction and Development 1818 H Street, N. W. Washington 25, D. C. United States of America 12 IN WrrTNESR THETEOF, the parties liereto, actingp through theii' representatives thereuntto duly authoriz,d, have caused this Loai Agreement to be signed iii their respective names and delivered in the District of iLolumbia, United States of America, as of the day and year first above written. IN TERN ATIO NA i BANK FOR. RECONSTRìUCTION AND IEVELOPM ENT By EU RENE ÍR. I3IACA CENTRAL HIDROEILECTRICA DEL Rio ANC HICAi A IcIMITADA By L. E. PÅLACIOs Aluthorizedl Hep))resenIlatie 13 SCHEDULE1 Amortization Schedule Principal A.iount Payment Outstanding After of Principal Each Payment Date (expressed in (expressed in Payment Due dollars) * dollars) * July 15, 1958 $ 4,500,000 January 15, 1959 $ 91,000 4,409,000 July 15, 1959 94,000 4,315,000 January 15, 1960 96,000 4,219,000 July 15, 1960 98,000 4,121,000 January 15, 1961 100,000 4,021,000 July 15, 1961 103,000 3,918,000 January 15, 1962 105,000 3,813,000 July 15, 1962 108,000 3,705,000 January 15, 1.963 110,000 3,595,000 July 5, 1963 113,000 3,482,000 January 15, 1964 116,000 3,366,000 July 15, 1964 118,000 3,248,000 January 15, 1965 121,000 3,127,000 July 15, 1965 124,000 3,003,000 January 15, 1966 127,000 2,876,000 July 15, 1966 130,000 2,746,000 January 15, 1967 133,000 2,613,000 July 15, 1967 136,000 2,477,000 January 15, 1968 139,000 2,338,000 July 15, 1968 143,000 2,195,000 January 15, 1969 146,000 2:049,000 July 15, 1969 150,000 1,899,000 January 15, 1970 153,000 1,746,000 July 15, 1970 1.57,000 1,589,000 January 15, 1971 160,000 1,429,000 July 15, 1971 164,000 1,265,000 January 15, 1972 168,000 1,097,000 July 15, 1972 172,000 925,000 January 15, 1973 176,000 749,000 July 15, 1973 181.000 568,000 January 15, 1974 185,000 3:183,000 July 15, 1974 189,000 191,000 January 15, 1975 194,000- * To the extent that any part of the Loan is repayable in a urrency other than dollars (see Loan Regulations, Section 3.02), the figures in these columns represent dollar equivalents determined as for purposes of withdrawal. 14 Premiums on Prepayment and Redemption The followiing pereentages are speci.fied as the premiums payable on repayment in advance of maturity of any part of the principal amount of the Loan, pitrsuant to Section 2.05 (b) of the Loan Regulations or on the redemption of any Bond prior to its maturity piirsiuånt to Section 6.16 of the Loan Regulations: Time of Prepanycnt or Redemption Premiun Not more than 5 years before maturity. ½ of 1% More than 5 years but not inore than 10 years before maturity............... .. 1% More than 10 years but not more than 15 years before inaturity .............. ..1 % More than 15 years before maturity .... 21/2% 15 SCHEDULE 2 Desiription of the Project The power generating and substation facilities of the Borrower will be expanded through installation of hydro- electric, thermal electric and substation equipment. (a) Hydroelectric Installations A third hydraulic turbine bf 32,000 horsepower to operate at a normal head of 235 feet, a generating unit of 20,000 KW and all necessary mechanical and electrical auxiliaries including an overhead crane, penstocks and valves will be installed at the existing powerhouse site of the Borrower located on the Anchicaya River below its confluence with the Digua River. A 110 KW step-up suhtation will be added to the existing substation at the side of the power- house. Necessary spare parts for the above equipment, and a spare transformer bank with switchGear for the step-up substation will be provided. (b) Thermal Installations. A 12,500 KW thermal power plant will be constructed at a site near Yumbo at Puerto Isaacs. The plant will have an outdoor-type boiler which will supply steam at 600 pounds per square inch and 8250 F. to a conventionally housed steam turbine. All necessary anxiliary power plant eqlip- ment such as wiring, controls, coal handling equipuent, pumps, piping, etc. will be installed. Thle coal handling and ash removal equipment will be installed with suflicient capacity so that it could handle two additional similar units. A complete 34.5 KV step-up substatiott Will he installed adjacent to the plant and will be connected directly to the Cali municipal system. 16 (c) Substations. The Saii Antonio and Chipichape receiving substations located in the outskirts of Cali will eaclj be expanded by the addition of switchgear and transforniers so that 20,000 KW additional capacity can be available for distribution in the Cali system through each substation. 'V 17 SCHEDULE3 Modifications of Loan Regulations No. 4 For the purposes of this Agreement the provisions of Loan Regulations No. 4 of the Bank, dated October 15, 1952, shall be deemed to be modified as follows: (a) The second sentence of Section 2.02 shall be deleted and the following shall be substituted: "Such commitment charge shall accrue from the Ef- fective Date, or from a date sixty days after the date of the Loan Agreement, whichever shall be the earlier, or from such other date as may be specified in the Loan Agreement for the purpose of this Section, to the re- spective dates on which amounts shall be withdrawn by the Borrower from the Loan Account a8 provided in Article IV or shall be cancelled pursuant to Ar- ticle V." (b) Paragraph (c) of Section 2.05 shall be deleted and the following shall be substituted: " (c) It is the policy of the Bank to encourage the repayment of its loans prior to maturity. Accordingly the Bank will sympathetically consider, in the light of all circumstances then existing, any request of the Borrower to waive the payment of any premium pay- able under paragraph (b) of this Section or under Section 6.16 on repayment of any portions of the Loan or Bonds which the Bank has not sold or agreed to sell.'' (c) Paragraphs (e) and (i) of Section 5.02 shall be de- leted and the following shall be substituted: "(e) If the Borrower shall take or permit to be taken any action or proceeding whereby any of its property shall or may be assigned or in any manner transferred or delivered to any receiver, assignee, liquidator or other person, whether appointed by the 18 Borrower or by a court or by tHc Guar'avtor or by authority of any law, whereby such propery sliall or may be distributed aniong the creditors of the Bor- rower.'' "(i) After the date of the Loan Agreement and prior to The Effeetive Date any action shall have been takei which would have constituted a violation of anv cove- nant contained in the Loan Agreeimeint or Guarantee Agreemnent relating to the creatioi of liens as security for debt if the Lo n Agreet nd1(1 uarantee Agrec- Inent had been effeective ol Ilie date sueh -etion was taken.'" (d) Sectiou 6.17 shall be deleted mnd the followinig sliall be substituted: "SECTIoN 6.17. Riqhs of ofoldrs fl oHws. No holder (other tlian the Bank) of any Bond shall, by virtue of being the holder thereof, be entitled to exer- cise any rights under the Loan Agreemeni or Ihe Guarantec Agreenient or be subject to any of the con- ditions or obligations imposed upon the Bank therehy. The provisions of this Section shall not impair or tffect any rights or obligations under ihe terins of any Bond or of any guarantee endorsed thereon." (e) The third and fourth senfences of paragraph (i) of Section 7.04 shall be deleted and the followiing shall be substituted: "The Bank, the Borrower ad he ( 0 rantor slinll enheb defray its own expenses in ihe i rat i proceedings. The costs of the A rhial Tribual sliall be (livided aind borne equa.lly between 1ihe lank on hili one side and the Borrower and Guarnor on Ilie ofher. Aii questioi concerning :the division of the costs of the Arbitral Tribunal or the procedure for payiment of suich costs shall be determined by the Arbitral Tribunal.'' 긔 i 0 V n ::51 rå al ý71 tr , 0 Z z3 b-t p ^. Gc 0 C-c- - .2 1-3 CD tD ct c3ý bi W" CD ZZ m- CS :"5 nj rD Pi 0 eD rD rD ID Zi zi 21 ''The principa] of the Bonds, the interest accruing thereon and the premium, if any, ou the redemption thereof shall be paid without deduction for and frec from any taxes, imposts, levies or duties of any nature or any restrictions now or at auv time hereafter im- posed under the laws of [name of Guarantor] cr laws in effeet iii its territoies ; provided, however, that the provisions of thi porafraph shial no f apply to the taxation of payineis )iade under lie provisions of any Bond to a holder thereof other than the iank when such Bond is benefieially oicned by an individual or er- porate resident of [ na>e of Guarantor].'' (j) Schedule 3 shall be deleted and the following shall be substituted: "Form of Guarantee [Name of farantor], for value received, as a pri- mary obligor anld not as surety merI , herehy asolute- ly and unconditionally guarantees, and ple(ges ils full faith and credit for, the due and pulnetunal payment of the principal and redempion price of the withii Bond and the interest tliereon, free from taxes and restrie- tions as thereii provided, prior niotice to, dcemand upon or action against the obligor on said Bond or the undersigned being waived. [Naime of (uarantori by Dated Authorized Representative''