Panama - Fourth Power Project : Loan 1470 - Loan Agreement - 2 - Conformed

CONFORMED COPY LOAN NUMBER 1470 PAN Loan Agreement (Fourth Power Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and INSTITUTO DE RECURSOS HIDRAULICOS Y ELECTRIFICACION Dated July 1, 1977 LOAN AGREEMENT AGREEMENT, dated July 1, 1977, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPM2NT (hereinafter called the Bank) and INSTITUTO DE RECURSOS HIDRAULICOS Y ELECTRIFICACION (hereinafter called the Borrower). -2- ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Guarantee Agree- ments of the Bank being hereinafter called the General Condi- tions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Electricity Legislation" means Decree Law No. 31 of 1958, Law No. 37 of 1961, Decree No. 535 of 1960, Cabinet Decree No. 235 of 1969 and Decree No. 20 of 1976, all as amended up to the date of this Agreement; (b) the term "Program" means (i) the projects financed by the Bank under Loan No. 661 PAN, Loan No. 948 PAN and this Loan; (ii) the complementary works referred to in Section 3.09 of this Agreement; (iii) the La Estrella and Los Valles hydroelectric projects, and associated transmission facilities to the city of -3- David; and (iv) for the period 1977-1983 (1) sub-transmission lines and sub-stations estimated to cost in the aggregate not in excess of $31 million, with annual disbursements therefor not to exceed in any one fiscal year $8 million in the aggregate, and (2) distribution facilities, rural electrification and minor projects estimated to cost in the aggregate not in excess of $147 million, with annual disbursements therefor not to exceed in any one fiscal year $30 million in the aggregate; and (c) "Balboas" means the currency of the Borrower. -4- ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to forty-two million dollars ($42,000,000). Section 2.02. The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Bank, for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Loan. Section 2.03. Except as the Bank shall otherwise agree, contracts for the purchase of goods or for civil works required for the Project shall be procured in accordance with the provi- sions of Schedule 4 to this Agreement. Section 2.04. The Closing Date shall be December 31, 1983 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. Section 2.05. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. -5- Section 2.06. The Borrower shall pay interest at the rate of eight and two-tenths per cent (8.20%) per annum on the prin- cipal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semi-annually on February 15 and August 15 in each year. Section 2.06. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. -6- ARTICLE III Execution of the Project Section 3.01. The Borrower shall carry out the Project with due diligence and efficiency and in conformity with appro- priate administrative, financial, engineering and public utility practices. Section 3.02. In order to assist the Borrower in preparing final designs for the Project, supervising construction of civil works and transmission systems, preparing bidding documents and procuring civil works and equipment, the Borrower shall employ engineering consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. In addition, the Borrower shall, during the carrying out of the Project, consult its advisory board of consultants, the composition of which shall at all tim'. be satisfactory to the Bank, with regard to specially difficult technical problems related to the construction of La Fortuna hydroelectric plant. Section 3.03. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed ont of the proceeds of the Loan against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. -7- (b) Except as the Bank shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Loan to be used exclusively for the Project. Section 3.04. (a) The Borrower shall furnish to the Bank, promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) The Borrower: (i) shall maintain records adequate to record the progress of the Project (including the cost thereof) and to identify the goods and services financed out of the pro- ceeds of the Loan, and to disclose the use thereof in the Project; (ii) shall enable the Bank's accredited representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Loan and any relevant records and documents; and (iii) shall furnish to the Bank all such information as the Bank shall reasonably request concerning the Project, the expenditure of the proceeds of the Loan and the goods and services financed out of such proceeds. (c) The Borrower shall enable the Bank's representatives to examine all plants, i-stallations, sites, works, buildings, property and equipment of the Borrower and any relevant records and documents. -8- Section 3.05. The Borrower shall take all such action as shall be necessary to acquire as and when needed all such land and rights in respect of land as shall be required icr the construc- tion (and operation) of the facilities included in the Project. Section 3.06. In carrying out the Project, the Borrower shall employ contractors acceptable to the Bank upon terms and conditions satisfactory to the Bank. Section 3.07. The Borrower shall, in consultation with the Bank, take all reasonable measures (including the measures recommended in the ecological report for the Project of the Gorgas Memorial Laboratory) necessary on its part to ensure that the Project is carried out with due regard to ecological and environ- mental factors. Section 3.08. After the La Fortuna civil works have been completed, the Borrower shall make arrangements, on terms and conditions satisfactory to the Bank, for the periodic inspection of such works by internationally recruited experts, such inspec- tion to be carried out with particular emphasis on the structural safety of the dam. Section 3.09. (a) The Borrower shall take all action neces- sary to ensure that the complementary works shall be completed and placed into operation no later than June 1980. -9- (b) For purposes of this Section, the term "complementary works" means the following works: (i) David-Llano Sanchez double circuit 230 kV transmis- sion line about 195 km long; (ii) David sub-station with two 70 MVA 230/115/34.5 kV transformers and switchgear; (iii) La Chorrera and Panama sub-stations uprating from 115 to 230 kV; and (iv) Llano Sanchez 230/115/34.5 kV sub-station. - 10 - ARTICLE IV Management and Operations of the Borrower Section 4.01. The Borrower shall at all times manage its affairs, maintain its financial position, plan its future expan- sion and carry on its operations, all in accordance with sound business, financial, engineering and public utility practices, under the supervision of experienced and qualified management, and with the assistance of adequate, qualified and experienced staff. Section 4.02. The Borrower shall take out and maintain with responsible insurers, or make other provision satisfactory to the Bank for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 4.03. (a) The Borrower shall at all times maintain its existence and right to carry on operations and shall, except as the Bank shall otherwise agree, take all steps necessary to maintain and renew all rights, powers, privileges and franchises which are necessary or useful in the conduct of its business. (b) The Borrower shall operate and maintain its plants, equipment and property, and from time to time make all necessary renewals and repairs thereof, all in accordance with sound public utility and engineering practices; and shall at all times maintain its financial position and plan the future expansion of its power - 11 - activities, all in accordance with sound business and public utility practices. Section 4.04. (a) In order to assist the Borrower in the analysis and strengthening of its organization and management functions, its training activities, and its accounting and financial policies and practices, the Borrower shall employ management and accounting consultants acceptable to the Bank upon terms and conditions satisfactory to the Bank. (b) The Borrower shall exchange views with the Bank on the conclusions and recommendations of the consultants referred to in paragraph (a) of this Section and shall agree with the Bank on a schedule for their implementation. Section 4.05. Except as the Bank shall otherwise agree, the Borrower shall not, until the Project has been completed, under- take or cause to be undertaken on its behalf, any major expansion project not included in the Program, the capital investments for which shall exceed 1% of the Borrower's revalued gross fixed assets in operation unless the Borrower has furnished to the Bank evidence satisfactory to the Bank that such major expansion project is economically justified and that adequate financial, technical and managerial resources therefor will be available to the Borrower. - 12 - ARTICLE V Financial Covenants Section 5.01. (a) The Borrower shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. (b) The Borrower shall revalue its fixed assets at least once every year using consistently applied revaluation methods satisfactory to the Bank and shall enter any such revaluation in its books of account. Section 5.02. The Borrower shall: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than four months after the end of each such year, (A) certified copies of its financial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning the accounts and financial statements of the Borrower and the audit thereof as the Bank shall from time to time rea- sonably request. - 13 - Section 5.03. (a) The Borrower represents that at the date of this Agreement no lien exists on any of its assets as security for any debt. (b) The Borrower undertakes that, except as the Bank shall otherwise agree: (i) if the Borrower shall create any lien on any of its assets as security for any debt, such lien will equally and ratably secure the payment of the principal of, and interest and other charges on, the Loan, and in the creation of any such lien express provision will be made to that effect, at no cost to the Bank; and (ii) if any statutory lien shall be created on any assets of the Borrower as security for any debt, the Borrower shall grant, at no cost to the Bank, an equivalent lien satisfac- tory to the Bank to secure the payment of the principal of, and interest and other charges on, the Loan; provided, however, that the foregoing provisions of this paragraph shall not apply to: (A) any lien created on property, at the time of purchase thereof, solely as security for the payment of the purchase price of such property; or (B) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after the date on which it is originally incurred. Section 5.04. Except as the Bank and the Borrower shall otherwise agree, the Borrower shall not: - 14 - (a) incur any short-term debt if, after the incurrence of such short-term debt, all short-term debt of the Borrower then outstanding, including the short-term debt to be incurred, would exceed one-sixth of the Borrower's cash operating, maintenance and administrative expenses during the twelve-month period prior to such incurrence; and (b) incur any long-term debt unless its net revenue for the fiscal year next preceding such incurrence or for a later twelve-month period prior to such incurrence, whichever is the greater, shall be not less than 1.4 (one and four-tenths) times the maximum debt service requirement for any succeeding fiscal year on all debt, including the debt to be incurred. For the purposes of this Section: (i) the term "long-term debt" means all debt maturing by its terms more than one year after the date on which it is incurred, and the term "short-term debt" means all debt (including debt payable on demand) incurred in the ordinary course of business and maturing by its terms one year or less than one year after the date on which it is incurred; (ii) debt shall be deemed to be incurred under a loan contract or agreement on the day such debt becomes outstanding and repayable in accordance with such - 15 - contract or agreement, and under a guarantee agreement, on the date the agreement providingC for such guarantee has been entered into but only to the extent that the guaranteed debt is out- standing; (iii) the term "net revenues" means all revenues of the Borrower, excluding the subsidy, adjusted to take account of rates in effect at the time of the calculation even though they were not in effect during the fiscal year or twelve-month period to which such revenues relate, less all operating and administrative expenses, including provision for taxes, if any, but before provision covering depreciation, interest and other charges on debt; (iv) the term "subsidy" means the subsidy referred to in Article 7 (d) of Cabinet-Decree No. 235 dated July 30, 1969; (v) the term "maximum debt service requirement" means the aggregate amount of amortization (including sinking fund payments, if any), interest and other charges on debt; and (vi) whenever for the purposes of this Section it shall be necessary to value in terms of balboas, debt - 16 - payable in another currency, such valuation shall be made on the basis of the prevailing lawful rate of exchange at which such other currency is, at the time of such valuation, obtainable for the purposes of servicing such debt. Section 5.05. (a) The Borrower shall not sell electricity to bulk consumers at prices which are lower than the actual marginal cost thereof. (b) In order to assist the Borrower in studying the costs of supplying electricity and the link between such costs and the fixing of prices for the sale thereof, the Borrower shall, by December 31, 1977, retain and thereafter employ, consultants acceptable to the Bank upon terms and conditions satisfactory to the Bank, the findings of such consultants to be furnished to the Bank, with the Borrower's comments thereon, by June 30, 1979. Section 5.06. The Borrower shall take all steps necessary or desirable on its part to maintain no more than 60 days of electricity billings outstanding and unpaid. Section 5.07. (a) Except as the Bank shall otherwise agree, the Borrower shall from time to time take all steps necessary or desirable, to obtain such adjustments in its rates for the sale of electricity as will provide revenues sufficient to yield an annual rate of return on the average of the net value of fixed assets in - 17 - operation, plus working capital amounting to three months' re- venues, of 7% during 1977, 8% during 1978, and 8.75% during 1979 and thereafter. (b) For the purposes of This Section: (i) the rate of return in respect of any fiscal year will be calculated by relating the Borrower's net income from operations for that year to the average value of the total net fixed assets in operation during that fiscal year; (ii) the term "net income from operations" means gross operating revenue, less all operating and administrative expenses including adequate maintenance, straight-line depreciation, taxes and levies, if any, or any payments in lieu there- of, but without deduction of interest or other charges on debt; (iii) the term "average of the net value of fixed assets in operation" means: one-half the sum of (A) the value of the Borrower's gross fixed assets in operation determined in accordance with methods of valuation and revaluation satisfactory to the Bank less accumulated depreciation calculated on a straight-line basis at rates satisfactory to the - 18 - Bank at the beginning of the calendar year, plus (B) the value of the gross fixed assets in opera- tion so determined less accumulated depreciation so calculated at the end of the year in question; provided, however, that when a major asset shall be brought into operation during the year, the value of such asset shall be included in the foregoing computation in respect of that part of the year during which such asset shall have been in opera- tion; (iv) the term "revenues" means all revenues of the Borrower, excluding the subsidy; and (v) the term "subsidy" has the same meaning as in paragraph (b) (iv) of Section 5.04 of this Agree- ment. Section 5.08. The Borrower shall make contractual arrange- ments, on terms and conditions satisfactory to the Bank, for the purpose of obtaining the necessary finaning required, in addition to the Loan, for purposes of the Project and the complementary works provided for in Section 3.09 of this Agreement. - 19 - ARTICLE VI Remedies of the Bank Section 6.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (k) thereof: (a) the Electricity Legislation or any provision thereof shall have been changed so as to affect materially and adversely the operations or financial condition of the Borrower or the carrying out of the Project; and (b) (i) Subject to subparagraph (ii) of this paragraph: (A) The right of the Borrower to withdraw the proceeds of any loan made to the Borrower for the financing of the Project shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agree- ment providing therefor, or (B) any such loan shall have become due and pay- able prior to the agreed maturity thereof. (ii) Subparagraph (i) of this paragraph shall not apply if: (A) such suspension, cancellation, termination or prematuring is not caused by the failure of the Borrower to perform any of its obligations under such agreement, and (B) adequate - 20 - funds for the Project are available to the Borrower from other sources on terms and conditions consis- tent with the obligations of the Borrower under this Agreement. Section 6.02. For the purposes of Section 7.01 of the General Conditions, the following events are specified pursuant to para- graph (h) thereof: (a) the events specified in paragraph (a) of Section 6.01 of this Agrement 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) either of the events specified in paragraph (b) of Section 6.01 of this Agreement shall occur. - 21 - ARTICLE VII Effective Date; Termination Section 7.01. The following events are specified as addi- tional conditions to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions: (a) arrangements satisfactory to the Bank for retaining the consultants required under Section 4.04 of the Loan Agreement have been made; (b) arrangements satisfactory to .he Bank for ensuring timely payment of public sector electricity bills have been made; and (c) arrangements satisfactory to the Bank for obtaining all necessary financing for purposes of the Project have been made. Section 7.02. The date September 30, 1977, is hereby speci- fied for the purposes of Section 12.04 of the General Conditions. - 22 - ARTICLE VIII Addresses Section 8.01. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For the Borrower: Instituto de Recursos Hidrdulicos y Electrificaci6n Apartado 5285 Panama 5, Panama Cable address: Telex: IRHE 2158, IRHE PA Panama - 23 - IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Is/ Enrique Lerdau Acting Regional Vice President Latin America and the Caribbean INSTITUTO DE RECURSOS HIDRAULICOS Y ELECTRIFICACION By Is/ Edwin Fabrega Authorized Representative - 24 - 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) Construction of River 18,400,000 76% (repre- Diversion, Dam and senting the Spillway estimated foreign ex- penditure component) (2) Ancillary Electro- 6,600,000 100% of foreign mechanical Equipment expenditures for Generating Plant; Erection and Installa- tion (3) Equipment for La 7,200,000 100% of foreign Fortuna Switchyard, expenditures La Fortuna-David Transmission Line and Enlargement of Panama Substation; Erection and Instal- lation (4) Engineering Services 1,900,000 100% of foreign for items (a) and (b) expenditures of Part A and for Part B of the Project - 25 - Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (5) Consulting Services 1,200,000 100% of foreign for Organizational expenditures Imprbvement Program (6) Consulting services, 300,000 100% of foreign overseas fellow- expenditures ships, and equip- ment for training (7) Unallocated 6,400,000 TOTAL 42,000,000 - 26 - 2. For the purposes of this Schedule the term "foreign expendi- tures" means expenditures in the currency of any country other than the Guarantor and for goods or services supplied from the territory of any country other than the Guarantor. 3. The disbursement percentages have been calculated in compli- ance with the policy of the Bank that no proceeds of the Loan shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Loan decreases or increases, the Bank may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Bank. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expendi- tures prior to the date of this Agreement. 5. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in para- graph 1 above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insuf- ficient to finance the agreed percentage of all expenditures in - 27 - that Category, the Bank may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet other expenditures, and (ii) if such realloca- tion cannot fully meet the estimated shortfall, reduce the dis- bursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Bank shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as, in the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan. - 28 - SCHEDULE 2 Description of the Project 1. The Project consists of a hydroelectric generating plant at La Fortuna site about 35 km northeast of the city of David, together with related transmission facilities. 2. The Project includes: Part A: La Fortuna Generating Plant (a) Diversion works consisting of a rockfill cofferdam about 20 m high and a diversion tunnel about 280 m long; (b) A rockfill dam designed to impound about 13 million M3 of water, with ungated spillway; (c) Power tunnel about 6 km long, surge tank, and penstock about 1.4 km long; (d) Underground power house with 3 generating units of about 85 MW generating capacity each and necessary electromechanical equipment, and an access tunnel about 1.65 km long; (e) Tailrace tunnel about 8.3 km long; and (f) Access road, camp, and other necessary minor works. - 29 - Part B: La Fortuna Transmission System (a) 230 kV switchyard at La Fortuna; (b) 230 kV double-circuit transmission line about 41 km long from La Fortuna to David sub-station; and (c) Enlargement of Panama City sub-station with one 175 MVA 230/115 kV transformer and switchgear facilities. Part C: Other The Project also includes the Borrower's organiza- tional improvement program and consultant services, overseas fellowships, and equipment for the training of its staff. The Project is expected to be completed by June 30, 1983. - 30 - SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each February 15 and August 15 beginning August 15, 1981 through February 15, 1994 1,555,000 On August 15, 1994 1570,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equiva- lents determined as for purposes of withdrawal. - 31 - Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05 (b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 1.45% More than three years but not more than six years before maturity 2.90% More than six years but not more than eleven years before maturity 5.30% More than eleven years but not more than fifteen years before maturity 7.25% More than fifteen years before maturity 8.20% - 32 - SCHEDULE 4 Procurement A. International Competitive Bidding Contracts for the purchase of goods or for civil works shall be procured in accordance with procedures consistent with those set forth in Part A of the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in March 1977 (hereinafter called the Guidelines) including the pertinent provisions of the General Introduction thereto, on the basis of international competitive bidding. B. Review of Procurement De.isions by the Bank 1. Review of invitations to bid and of proposed awards and final contracts costing more than $100,000 equivalent: (a) Before bids are invited, the Borrower shall furnish to the Bank, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedures as the Bank shall reasonably request. Any further modification to the bidding documents shall require the Bank's concurrence before it is issued to the prospective bidders. - 33 - (b) After bids hive been received and evaluated, the Bor- rower shall, before a final decision on the award is made, inform the Bank of the name of the bidder to which it intends to award the contract and shall furnish to the Bank, in sufficient time for its review, a detailed report, by the consultants referred to in Section 3.02 of this Agreement, on the evaluation and compar- ison of the bids received, together with the recommendations for award of the said consultants and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform the Botrower and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Bank's concurrence, materially differ from those on which bids were asked or prequalification invited. (d) Two conformed copies of the contract shall be furnished to the Bank promptly after its execution and prior to delivery to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. 2. With respect to each contract to be financed out of the proceeds of the Loan and not governed by the preceding paragraph, the Borrower shall furnish to the Bank, promptly after its - 34- execution and prior to delivery to the Bank of the first appli- cation for withdrawal of funds from the Loan Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids, recommendations for award and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. 3. The Borrower shall, before issuance of bidding documents for procurement of goods and services for the complementary works referred to in Section 3.09 of this Agreement and the main generating equipment for Part A of the Project which are to be financed by suppliers' credits, seek the Bank's approval of such documents.