Conformed Copy - L7077 - Water Sector Reform Assistance Project - Loan Agreement

Page 1 CONFORMED COPY LOAN NUMBER 7077-CO Loan Agreement (Water Sector Reform Assistance Project) between REPUBLIC OF COLOMBIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated December 17, 2001 LOAN NUMBER 7077-CO LOAN AGREEMENT AGREEMENT, dated December 17, 2001, between REPUBLIC OF COLOMBIA (the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank). WHEREAS the Borrower, having satisfied itself as to the feasibility and priority of the project described in Schedule 2 to this Agreement (the Project), has requested the Bank to assist in the financing of the Project; and WHEREAS the Bank has agreed, on the basis, inter alia, of the foregoing, to extend the Loan to the Borrower upon the terms and conditions set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Loan and Guarantee Agreements for Fixed-Spread Loans" of the Bank, dated September 1, 1999 (the General Conditions) constitute an integral part of this Agreement. Section 1.02. Unless the context otherwise requires, the several terms defined Page 2 in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Adjusted Tariff" means a Tariff for which the different rates have been adjusted by a Participating Municipality on the basis of the recommendations of the technical assistance received by such Municipality under the corresponding Technical Assistance Agreement, with the purpose of enabling such Municipality to set forth said rates at levels it judges compatible with: (1) the average income of the different groups which compose the corresponding Population; (2) the portion of said income that is reasonable to expect each such different group may be able and willing to spend as payment for the provision of adequate water supply and sanitation services; and (3) the reasonable profit expectations of a private profit earning entity which wishes to become either the Operator or the Constructor/Operator, as the case may be, of a given Subproject; (b) "Administrator Account": see "Project Agreement"; (c) "Assistance Entity" means entity established by an international organization of countries, of which the Borrower is a member, and which has the expertise, facilities and personnel required to carry out, on behalf or the Borrower through MED (as hereinafter defined), certain activities under the Project such as administrating funds, contracting services and entering into agreements therefore, all connected with expenditures to be financed with Loan proceeds allocated to Categories 1 and 2 of the table, for Subprojects under Parts A1 and A2 of the Project, and Categories 3 and 4 of the table for Technical Assistance, provided, however, that if the Borrower determines that it shall use the services of two Assistance Entities, the one connected with Subprojects shall be called "Assistance Entity One", and the one connected with Technical Assistance Subprojects shall be called "Assistance Entity Two"; (d) "Banco Rep