Conformed Copy - L3237 - Northern Region Transmission Project - Amendment

Page 1 October 5, 1993 Secretary to the Government of India Ministry of Finance Department of Economic Affairs New Delhi, India Dear Sir: INDIA: (LN 3237-IN) Northern Region Transmission Project We refer to the Loan Agreement (Northern Region Transmission Project) between India (the Borrower) and the Bank dated October 3, 1990 and to the Project Agreement (Northern Region Transmission Project) of the same date between the Bank and National Hydroelectric Power Corporation Ltd (NHPC). We also refer to the Ordinance of the President of India dated January 8, 1993 under which certain power transmission systems have been transferred to the newly established Power Grid Corporation of India Limited (POWERGRID) with effect from April 1, 1992, including those owned and operated by NHPC. With reference to our discussions over a period of time wherein the Government of India has conveyed their desire to transfer the responsibility of carrying out the Northern Region Transmission Project (Project) from NHPC to POWERGRID, this is to advise you that the Bank has agreed to the transfer of responsibility of carrying out the Project to POWERGRID. Accordingly, we propose to sign a POWERGRID Project Agreement between the Bank and POWERGRID, and amend the Loan Agreement as follows: a) Wherever appearing in the Loan Agreement, "NHPC" is substituted by "POWERGRID", "Project Agreement" is substituted by "POWERGRID Project Agreement", and "Subsidiary Loan Agreement" is substituted by "POWERGRID Subsidiary Loan Agreement". b) Section 3.02 (a) is amended to read: "Section 3.02 (a) The Borrower shall relend an amount equivalent to $475,000,000 out of the proceeds of the Loan to POWERGRID under a POWERGRID Subsidiary Loan Agreement to be entered into between the Borrower and POWERGRID, under terms and conditions which shall have been approved by the Bank." c) The table set forth in paragraph 1 of Schedule 1 to the Loan Agreement is amended as per Annex 1 to this letter. d) The Description of the Project (Schedule 2) is amended as per Annexure 2 attached to this letter. The provisions of this amending letter shall take effect on the date notified by the Bank to the Borrower and POWERGRID, after receipt of evidence that the: (i) POWERGRID Project Agreement has been signed; and (ii) POWERGRID Subsidiary Loan Agreement has been executed on behalf of the Borrower and POWERGRID. Please confirm your agreement to the foregoing by signing the form of confirmation on the enclosed copy of this letter and returning it to us. Yours truly, Page 2 Heinz Vergin Director India Country Department CONFIRMED: INDIA By: /s/ M. Prasad Authorized Representative ANNEXURE 1 SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Civil works 15,000,000 70% and substation erection (2) Equipment, 420,000,000 100% of foreign materials and expenditures and erection of 100% of local ex- transmission penditures (ex- lines factory cost) (3) Consultants' 15,000,000 100% services and training (4) Unallocated 35,000,000 TOTAL 485,000,000 ANNEXURE 2 SCHEDULE 2 Description of the Project The objective of the Project is to improve operating efficiency, reliability and quality of service in the power system in the northern region of India. The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Bank may agree upon from time to time to achieve such objective: Part A:POWERGRID (i) The construction of about 1100 km of 400 kV double circuit, about 325 km of 400 kV single circuit, about 600 km of 765 kV single circuit and about 40 km of 220 kV single and double circuit transmission lines. Page 3 (ii) The construction/modification of nine substations with a total capacity of about 2500 MVA. (iii) Carrying out of a program of compensatory afforestation. (iv) Carrying out a detailed design and supervision of construction of works under part A of the Project. (v) Carrying out of training for POWERGRID staff. (vi) The installation of a regional load dispatch and control system, including detailed design and supervision of procurement and installation of the system. Part B:The Borrower (i) Carrying out of a program of enhancing the planning capabilities of the Central Electricity Authority of India. (ii) Utilization of engineering services for hydro-electric power stations. * * * The Project is expected to be completed by March 31, 1998.