Honduras - El Cajon Power Project : Loan 1805 - Memorandum of Agreement between IBRD and Union Bank of Switzerland - Conformed

Memorandum of Agreement (El Caj6n Power Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and UNION BANK OF SWITZERLAND MEMORANDUM OF AGREEMENT A. Recitals 1. International Bank for Reconstruction and Development (hereinafter called the World Bank) has agreed to lend to Empresa Nacional de Energia Electrica (hereinafter called ENEE) an amount in various currencies equivalent to one-hundred and five million United States Dollars (US$105,000,000) (hereinafter called the World Bank Loan), on the terms and conditions set forth in the Loan Agreement dated March ?7, 1980 (hereinafter called the World Bank Loan Agreement) to assist in financing the El Caj6n Power Project (hereinafter called the Project). 2. A consortium of Swiss Banks including Union Bank of Switzerland (hereinafter called the Swiss Banks) have agreed to lend to the Republic of Honduras (hereinafter called the Republic) a total amount of twenty-three million five hundred thousand Swiss francs (Sfrs. 23,500,000) for the sam,, Project, on the terms and conditions set forth in a Loan Agreement dated as of May 22, 1981 and in a Finance Credit -Agreement dated as of May 22, 1981 (hereinafter called the Swiss Banks Loan Agreements). Union Bank of Switzerland has agreed to act as agent for the Swiss Banks under the Swiss Banks Loan Agreements (hereinafter in such capa- city called the Agent). 3. The World Bank and the Agent, on its own behalf and on behalf of the Swiss Banks, hereby acknowledge that neither party, in making their loans to ENEE and the Republic, respectively, have relied on information or judgements concerning the Borrower, the Project or the country in which the Project is located, provided by or obtained from the other party and that each party has made its loan in the exercise of its own independent judgement in accordance with its normal standards and practices. 4. The World Bank and the Agent, on behalf of itself and the Swiss Banks, have deemed it convenient to make arrangements, with the consent of ENEE and the Republic, for the exchange of information and views on matters of common interest. It is, however, agreed that (i) neither the World Bank on the one hand, nor the Agent and Swiss Banks on the other, will rely on the other party to inquire into or verify the accuracy of any information provided by ENEE or the Republic or to review or evaluate the condition of ENEE or the Republic, the Project or the country where the Project is located, and (ii) each party will take, or -2- refrain from taking, any decision or action under the World Bank Loan Agreement or the Swiss Banks Loan Agreements, as the case may be, on the basis only of its own independent judgement, without reliance on the information provided by, or expected from the other party or the views expressed by such party. 5. Whenever used in this memorandum the terms defined in the World Bank Loan Agreement and the Swiss Banks Loan Agreements have the meanings therein given to them. B. Information and Consultation 6. The World Bank and the Agent, on its own behalf and on behalf of the Swiss Banks, shall as soon as practicable make available to each other all information received from ENEE or the Republic that may be of common interest with respect to the service, or the accomplishment of the purpose, of their respective loans, except information received by the World Bank or the Agent of any Swiss Bank which the recipient, in its sole judgement, considers to be of a confidential nature. 7. The World Bank and the Agent, on its own behalf and on behalf of the Swiss Banks, shall (a) to the extent practic- able, afford each other a reasonable opportunity to exchange views before taking any action which may lead to (i) the suspen- sion, cancellation, or acceleration of their respective loans, or (ii) a substantial amendment of the Project, and (b) at the request of either party, exchange views on any substantial and adverse change in the financial condition of ENEE or the Republic or in the progress or cost of the Project; provided, however, that this shall in no way limit or impair the independent right of decision and action of the World Bank or of the Agent and the Swiss Banks under the World Bank Loan Agreement or the Swiss Banks Loan Agreements, respectively. C. Miscellaneous 8. The rights or obligations of the World Bank or the Agent under this Memorandum shall not be assigned or otherwise transferred to any third party (including a substitute agent of the Swiss Banks under the Swiss Banks Loan Agreements) without the written consent of the other party. -3- 9. The parties hereto agree that any notice or request given or made pursuant to this Memorandum shall be deemed to have been duly given or made when it shall be delivered to the follow- ing addresses: For the World Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex address. INTBAFRAD 89699 (WU)* Washington, D.C. 64145 (WUI)* 248423 (RCA) For the Agent: Union Bank of Switzerland Bahnhofstrasse 45 8021 Zurich Switzerland Cable address: Telex: BANKUNION 813 811 ubs ch Zurich 812 205 ubs ch * Only for telex within United States of America and Canada. This Memorandum will come into force and effect upon signa- ture by the World Bank and the Agent and acceptance by the Repub- lic and the ENEE. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By / /Q Date UNION BANK OF SWITZERLAND By Date ACCEPTED: EMPRESA NACIONAL DE ENERGIA ELECTRICA By Date REPUBLIC OF HONDURAS By Date