Conformed Copy - L2889 - Power Sector Adjustment Loan - Amendment 1

Page 1 Bogota June 2, 1988 MR. PING-CHEUNG LOH Director Country Department III Latin America and the Caribbean Region Re. Loan No.2889-CO (Power Sector Adjustment Loan) Amendment Letter Dear Mr. Loh: I refer to the Loan Agreement dated March 16, 1988 (The Loan Agreement) between Republic of Colombia (the Borrower) and the International Bank for Reconstruction and Development (the Bank) for the above-referred Loan and to the discussions between representatives of the Borrower and a recent Bank mission to Colombia. I am pleased to inform you that the Borrower hereby proposes to amend the Loan Agreement as follows: 1. Section 3.04 is amended by substituting the date March 31, 1988 by "July 31, 1988" in paragraph (a) therefor. 2. Section 3.04 is further amended by (i) redesignating paragraph (c) as paragraph (d); and (ii) adding the following new paragraph (c). (c) not later than July 31, 1988 prepare and furnish to the Bank a progress report of such scope and detail as the Bank shall reasonably request on the execution of the Financial Rehabilitation Plans of each of the companies of the ICEL Group and the CORELCA Group listed in paragraphs (c) and (d) of Section 1.02 of this Agreement. 3. Section 3.05 is deleted and substituted by the following: "Section 3.05 (a) Not later than July 31, 1988, the Borrower shall prepare and furnish to the Bank a report of such scope and detail as the Bank shall reasonably request on the performance of the Electric Power Companies and the compliance by the Electric Power Companies with the targets set forth in the Program such report to be prepared on the basis of monitoring indicators satisfactory to the Bank and through the monitoring arrangements defined by the Borrower on letter dated May 24, 1988, signed by the Minister of Mines and Energy. (b) Based on the content and format of the report referred to in paragraph (a) of this Section and on the comments of the Bank on the monitoring indicators and arrangements refereed to in said paragraph (a) the Borrower shall not later than September 30, 1988 establish and put into effect a system satisfactory to the Bank to monitor the performance of the Electric Power Companies and the compliance by the Electric Power Companies with the targets set forth in the Program. 4. Section 3.06 is deleted and substituted by the following: "Section 3.06. (a) The Borrower shall carry out and shall cause the Electric Power Companies to carry out the Loss Reduction Program in a manner and according to a timetable satisfactory to the Bank. (b) As part of the foregoing, the Borrower shall, not later than July 31, 1988, prepare and furnish to the Bank a detailed progress report and timetable, Page 2 satisfactory to the Bank, on the execution of the Loss Reduction Program by each of the Electric Power Companies. 5. Section 3.07 is deleted and substituted by the following; "Section 3.07. (a) The Borrower shall carry out the Arrears Reduction Plan in a manner satisfactory to the Bank. (b) As part of the foregoing, not later than July 31, 1988, the Borrower shall make, or cause to be made, arrangements satisfactory to the Bank to compensate adequately Electrificadora del Atlantico, S.A. for all arrears of, and ensure timely payment of current billings by Empresas Publicas Municipales de Barranquilla; (c) The date for executing agreements for the payment of Departmental arrears to the Electric Power Companies set forth in Attachment 4 of the letter of September 11, 1987 describing the Program is hereby extended from March 30, 1988 to September 30, 1988. Unless the context otherwise requires, the several terms defined in the Loan Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth in this Amendment Letter. The amendments set forth in this Amendment Letter shall come into force and effect on the date upon which the Bank dispatches to the Borrower the notice referred to in Section 12.03 (a) of the General Conditions with respect to the Loan Agreement. Sincerely yours, CONFIRMED: REPUBLIC OF COLOMBIA INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ LUIS FERNANDO ALARCON MANTILLA By /s/ PING-CHOUNG LOH Minister of Finance and Public Director Credit Country Department III Latin America and the Caribbean Region