CONFORMED COPY

LOAN NUMBER 8034-PE

Loan Agreement(Second Rural Electrification Project)

between

REPUBLIC OF PERU

and

INTERNATIONAL BANK FOR RECONSTRUCTIONAND DEVELOPMENT

Dated July 5, 2011

LOAN AGREEMENT

Agreement dated July 5, 2011, between REPUBLIC OF PERU (“Borrower”) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (“Bank”). The Borrower and the Bank hereby agree as follows:

ARTICLE I — GENERAL CONDITIONS; DEFINITIONS

1.01. The General Conditions (as defined in the Appendix to this Agreement) constitute an integral part of this Agreement.

1.02. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the General Conditions or in the Appendix to this Agreement.

ARTICLE II — LOAN

2.01. The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in this Agreement, the amount of fifty million Dollars ($50,000,000), as such amount may be converted from time to time through a Currency Conversion in accordance with the provisions of Section 2.07 of this Agreement (“Loan”), to assist in financing the project described in Schedule 1 to this Agreement (“Project”).

2.02. The Borrower may withdraw the proceeds of the Loan in accordance with Section IV of Schedule 2 to this Agreement. The Borrower’s Representative for purposes of taking any action required or permitted to be taken pursuant to this Section is the Minister of Economy and Finance or the Borrower’s Director of Indebtedness and Public Treasury or any person whom any of them shall designate in writing.

2.03. The Front-end Fee payable by the Borrower shall be equal to one quarter of one percent (0.25%) of the Loan amount. The Borrower shall pay the Front-end Fee not later than 60 days after the Effective Date.

2.04. The interest payable by the Borrower for each Interest Period shall be at a rate equal to the Reference Rate for the Loan Currency plus the Variable Spread; provided, that upon a Conversion of all or any portion of the principal amount of the Loan, the interest payable by the Borrower during the Conversion Period on such amount shall be determined in accordance with the relevant provisions of Article IV of the General Conditions. Notwithstanding the foregoing, if any amount of the Withdrawn Loan Balance remains unpaid when due and such non-payment continues for a period of thirty days, then the interest payable by the Borrower shall instead be calculated as provided in Section 3.02 (e) of the General Conditions.

2.05. The Payment Dates are April 15 and October 15 in each year.

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2.06. The principal amount of the Loan shall be repaid in accordance with the amortization schedule set forth in Schedule 3 to this Agreement.

2.07. (a) The Borrower may at any time request any of the following Conversions of the terms of the Loan in order to facilitate prudent debt management: (i) a change of the Loan Currency of all or any portion of the principal amount of the Loan, withdrawn or unwithdrawn, to an Approved Currency; (ii) a change of the interest rate basis applicable to all or any portion of the principal amount of the Loan withdrawn and outstanding from a Variable Rate to a Fixed Rate, or vice versa, or from a Variable Rate based on a Variable Spread to a Variable Rate based on a Fixed Spread; and (iii) the setting of limits on the Variable Rate applicable to all or any portion of the principal amount of the Loan withdrawn and outstanding by the establishment of an Interest Rate Cap or Interest Rate Collar on the Variable Rate.

(b) Any conversion requested pursuant to paragraph (a) of this Section that is accepted by the Bank shall be considered a “Conversion”, as defined in the General Conditions, and shall be effected in accordance with the provisions of Article IV of the General Conditions and of the Conversion Guidelines.

ARTICLE III — PROJECT

3.01. The Borrower declares its commitment to the objective of the Project. To this end, the Borrower shall carry out the Project through DGER in accordance with the provisions of Article V of the General Conditions.

3.02. Without limitation upon the provisions of Section 3.01 of this Agreement, and except as the Borrower and the Bank shall otherwise agree, the Borrower shall ensure that the Project is carried out in accordance with the provisions of Schedule 2 to this Agreement.

ARTICLE IV — REMEDIES OF THE BANK

4.01. The Additional Event of Suspension consists of the following, namely, that the Borrower or any other authority having jurisdiction shall have taken any action for the restructuring, dissolution or disestablishment of PU or for the suspension of its operations, so as to affect materially and adversely, in the opinion of the Bank, the Project and the ability of the Borrower through PU to perform any of its obligations under this Agreement.

4.02. The Additional Event of Acceleration consists of, namely that, the event specified in Section 4.01 of this Agreement occurs.

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ARTICLE V — EFFECTIVENESS; TERMINATION

5.01. The Additional Conditions of Effectiveness consist of the following:

(a) that the Project Operational Manual, in form and substance satisfactory to the Bank, has been officially adopted by the Borrower; and

(b) that key staff of the PU listed in Section I.A.1 (b) of Schedule 2 of this Agreement have been selected in a manner satisfactory to the Bank.

5.02. Without prejudice to the provisions of the General Conditions, the Effectiveness Deadline is the date ninety (90) days after the date of this Agreement, but in no case later than the eighteen (18) months after the Bank’s approval of the Loan which expire on October 19, 2012.

ARTICLE VI — REPRESENTATIVE; ADDRESSES

6.01. Except as provided in Section 2.02 of this Agreement, the Borrower’s Representative is its Minister of Economy and Finance, provided that the Borrower’s Director of Indebtedness and Public Treasury may, by him or herself, represent the Borrower to sign amendments and/or notices to this Agreement which are considered of an administrative and non-financial nature. The signing by such Director of an amendment and/or notice shall constitute a representation by the Borrower that any such amendment and/or notice is considered to be administrative and non-financial in nature.

6.02. The Borrower’s Address is:

Ministry of Economy and FinanceJr. Junín 319Lima, Perú

Facsimile:(511) 626-9921

6.03. The Bank’s Address is:

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International Bank for Reconstruction and Development1818 H Street, N.W.Washington, D.C. 20433United States of America

Cable address: Telex: Facsimile:

INTBAFRAD 248423(MCI) or 1-202-477-6391Washington, D.C. 64145(MCI)

AGREED at Lima, Peru, as of the day and year first above written.

REPUBLIC OF PERU

By /s/ Ismael Benavides FerreyrosAuthorized Representative

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

By /s/ Susan G. GoldmarkAuthorized Representative

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SCHEDULE 1

Project Description

The objective of the Project is to increase access to electricity in rural areas of the Borrower on an efficient and sustainable basis.

The Project consists of the following parts:

Part A: Rural Electrification Sub-Projects

Increase electricity connections for rural communities, through extension of the existing electricity grid as part of the national interconnected grid or isolated grids, and/or the provision of electricity through solar photovoltaic systems (Rural Electrification Sub-Projects) all selected according to the procedures defined in the Project Operational Manual and carried out by public and private electricity service providers (Rural Electrification Providers) through the provision of Rural Electrification Sub-Project Subsidy.

Part B: Technical Assistance for Rural Electrification

1. Provide technical assistance in support of rural electrification in order to:

(a) promote productive uses of electricity;

(b) assess and promote renewable energy;

(c) build capacity of Project stakeholders and participants in the planning, design and implementation of Rural Electrification Sub-Projects using grid extensions and renewable energy; and

(d) review and further develop the regulatory framework for rural electricity systems and off-grid renewable energy projects, including tariffs and monitoring and supervision of electricity service provision, as well as assess their socio-economic impact.

Part C: Project Management

Support PU in its day-to-day technical, administrative, financial management and monitoring of the Project and evaluation of Rural Electrification Sub-Projects, through the provision of technical advisory services, audits and the financing of operating costs.

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SCHEDULE 2

Project Execution

Section I. Implementation Arrangements

A. Institutional Arrangements

1. The Borrower shall, through DGER:

(a) maintain until completion of the Project, the PU as the Project management unit within DGER responsible for overall Project planning, implementing, supervision, monitoring and evaluation, including:

(i) carrying out evaluation, selection and financing of Rural Electrification Sub-Projects, in accordance with the Project Operational Manual;

(ii) carrying out technical assistance activities under the Project;

(iii) monitoring and providing training and guidance to Rural Electrification Providers on compliance with environmental and social safeguard requirements;

(iv) maintaining the Project monitoring system; and

(v) carrying out the financial management and disbursement activities in coordination with the administrative units of DGER, and carrying out and/or supervising the procurement processes of the Project.

(b) maintain, until the completion of the Project, the PU with adequate resources and competent staff in adequate numbers with qualification and experience satisfactory to the Bank, including the following key staff members: the Project manager, the heads of the technical, administrative and monitoring units, the chief rural electrification specialist, the monitoring and evaluation specialist, the productive uses of electricity specialist, the renewable energy specialist, the hydropower specialist, the environmental specialist, the indigenous peoples specialist, the Resettlement specialist, the procurement specialist and the financial management specialist;

(c) and the PU, carry out the Project, or cause the Project to be carried out in accordance with the Project Operational Manual, including the Environmental Management Framework, the Indigenous Peoples’

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Planning Framework, the Involuntary Resettlement Policy Framework and the Annual Operation Plans;

(d) and the PU, maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with the Performance Indicators set forth in the Project Operational Manual, the carrying out of the Project and the achievement of the objective thereof; and

(e) maintain, until the completion of the execution of the Project, the Project Directory Committee with the functions set forth in the Project Operational Manual which shall include the approval of revisions to the Project Operational Manual and participation in the monitoring of the Project; said Project Directory Committee shall convene on a regular basis.

2. Except as the Bank shall otherwise agree, the Borrower shall not amend or waive any provision of the Project Operational Manual, including the Environmental Management Framework, the Indigenous Peoples’ Planning Framework, the Involuntary Resettlement Policy Framework or the Annual Operation Plans, without the Bank’s prior written approval. In case of any conflict between the terms of said documents and those of this Agreement, the terms of this Agreement shall prevail.

B. Annual Operation Plan and Procurement Plan Annual Updates

1. The Borrower, through DGER and PU, shall:

(a) furnish to the Bank, on or about November 30 of each year during Project implementation, starting on November 30, 2011, the updated Procurement Plan, satisfactory to the Bank, detailing all procurement activities under the Project for the following year;

(b) review with the Bank, by December 31 of each year, starting on December 31, 2011, or such later date as the Bank shall request, the plan referred to in subparagraph (a) of this paragraph, and, thereafter, take all measures required to ensure the efficient completion of the plan based on its recommendations and the Bank’s views on the matter;

(c) furnish to the Bank, on or about November 30 of each year, starting on December 31, 2011, the new Annual Operation Plan, satisfactory to the Bank, detailing all activities to be financed under the Project for the following year; and

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(d) review with the Bank, by December 31 of each year, starting on December 31, 2011, or such later date as the Bank shall request, the plan referred to in subparagraph (c) of this paragraph, and, thereafter, take all measures required to ensure the efficient completion of the plan based on its recommendations and the Bank’s views on the matter.

2. In case of any conflict among the terms of the Procurement Plan and/or any of the Annual Operation Plan and those of this Agreement, the terms of this Agreement shall prevail.

C. Anti-Corruption

The Borrower shall ensure that the Project is carried out in accordance with the provisions of the Anti-Corruption Guidelines.

D. Safeguards

1. The Borrower, through DGER and PU, shall carry out the Project, or cause the Project to be carried out, in accordance with the provisions of the Environmental and Social Management Instruments; and, except as the Bank shall otherwise agree, the Borrower shall not assign, amend, abrogate, or waive, or permit to be assigned, amended, abrogated, or waived, the aforementioned, or any provision thereof.

2. (a) Prior to the approval of any proposed Rural Electrification Sub-Project, the Borrower (through DGER), shall ensure that the PU and the Rural Electrification Provider apply the Environmental and Social Management Frameworks, in order to:

(i) carry out an environmental and social screening and assessment of such proposed Rural Electrification Sub-Project; and

(ii) prepare, if applicable, the pertinent EMP, IPP and/or RAP for the prevention, mitigation and remediation of any potential environmental or social consequences arising from the implementation of such proposed Rural Electrification Sub-Project.

(b) During the implementation of any Rural Electrification Sub-Project, the Borrower (through DGER and PU), shall ensure that the Rural Electrification Provider carries out the EMP, IPP and/or RAP referred to in subparagraph (a) (ii) above, all in a manner acceptable to the Bank.

3. When, in the Bank’s opinion, any activity under Part B of the Project may have implications on specific sites or when the recommendations resulting from said

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activities could affect environmentally or socially sensitive areas, the Borrower, through PU shall ensure that the terms of reference for any consultancies related to studies, technical assistance or capacity building under Part B of the Project shall be satisfactory to the Bank following its review thereof and, to that end, such terms of reference shall duly incorporate the requirements of the Bank’s Safeguard Policies then in force, as applied to the advice conveyed through such technical assistance and capacity building activities.

E. Rural Electrification Sub-Projects

1. The Rural Electrification Sub-Project Subsidy shall be requested by a Rural Electrification Provider in accordance with the Project Operational Manual to be used solely for the purposes of the activities under Part A of the Project. Each Rural Electrification Sub-Project proposal shall be approved by the Borrower through DGER on the basis of a detailed evaluation by the PU, pursuant to eligibility criteria and procedures acceptable to the Bank as further specified in the Project Operational Manual which shall include the following:

(i) the relevant Rural Electrification Sub-project proposal shall be in compliance with the Rural Electrification Legal Framework; and

(ii) the proposed Rural Electrification Sub-project complies with the requirements of the Environmental and Social Management Frameworks and is not related to construction of any hydro-generation investment.

2. The activities to be financed by a Rural Electrification Sub-Project shall be carried out pursuant to a Rural Electrification Sub-Project Agreement, to be concluded between the Borrower (through DGER) and the Rural Electrification Provider under terms and conditions described in more detail in the Project Operational Manual and which shall include the following:

(i) a copy of the approved activity with its budget, its execution timetable, its disbursement timetable and its performance indicators;

(ii) provisions requiring DGER to make available, on a grant basis, a portion of the proceeds of the Loan to the relevant Rural Electrification Provider in the form of the Rural Electrification Sub-Project Subsidy;

(iii) the obligation of the Rural Electrification Provider to: (A) carry out the activities and operate and maintain the relevant Rural Electrification Sub-Project with due diligence and efficiency and in accordance with sound administrative, financial, engineering, cultural, social, environmental standards and in accordance with the provisions of the Environmental and Social Management Frameworks, the Project Operational Manual and the Anti-Corruption Guidelines applicable to

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recipients of loan proceeds other than the Borrower; (B) maintain adequate records to reflect, in accordance with simple and sound accounting practices defined in the Project Operational Manual, the operations, the resources and expenditures in respect of the Rural Electrification Sub-Project; (C) maintain adequate reporting in accordance with the standards specified in the Project Operational Manual; and (D) make a minimum contribution in cash as defined in the Project Operation Manual;

(iv) the requirement that: (A) the goods, works and consultants’ services to be financed from the proceeds of the Rural Electrification Sub-Projects shall be procured in accordance with the procedures set forth in Section III of Schedule 2 to this Agreement; and (B) such goods, works and consultants’ services shall be used exclusively in the carrying out of the activities financed by the Rural Electrification Sub-Project;

(v) the right of the PU to inspect, by itself or jointly with DGER and the Bank, if the Bank shall so request, the goods, works, sites and constructions included in the activities financed by the Rural Electrification Sub-Projects, the operations thereof and any relevant records and documents;

(vi) the right of MEM to obtain all information as DGER or the Bank shall reasonably request regarding the administration, operations and financial conditions of the activities financed by the Rural Electrification Sub-Projects; and

(vii) (A) the right of the DGER to suspend and/or terminate the right of the Rural Electrification Provider to use the proceeds of the Rural Electrification Sub-Project; and (B) the obligation of the Rural Electrification Provider to refund any used portion of the Rural Electrification Sub-Project to MEM, all upon failure by the Rural Electrification Provider to perform any of its obligations under the Rural Electrification Sub-Project Agreement.

3. The Borrower, through DGER, shall exercise its rights under each Rural Electrification Sub-Project Agreement in such manner as to protect the interests of the Borrower and the Bank and to accomplish the purposes of the Loan. Except as the Bank shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive any Rural Electrification Sub-Project Agreement or any of its provisions.

4. The Borrower, through PU, shall, prior to the submission of a Loan withdrawal application for the respective activity to be financed through a Rural Electrification Sub-Project for each qualified Rural Electrification Provider,

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furnish to the Bank a report confirming that the respective Rural Electrification Sub-Project Agreement has been approved by the Borrower and executed between the MEM and the relevant Rural Electrification Provider, indicating the name of the qualified Rural Electrification Provider and the value of said Rural Electrification Sub-Project Subsidy.

5. The Borrower, through DGER, shall monitor the activities financed through Rural Electrification Sub-Projects under Part A of the Project in accordance with the provisions of this paragraph and the Project Operational Manual that include, inter alia:

(i) the administrative rules and procedures for planning, preparing, proposing, selecting, contracting, financing, implementing, supervising, monitoring and evaluating the Rural Electrification Sub-Projects;

(ii) the eligibility and qualifying rules for Rural Electrification Providers;

(iii) a model form of a Rural Electrification Sub-Project Agreement; and

(iv) the Indigenous Peoples’ Planning Framework, the Environmental Management Framework and the Involuntary Resettlement Policy Framework.

Section II. Project Monitoring Reporting and Evaluation

A. Project Reports

1. The Borrower, through DGER and PU and within the framework of SNIP, shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 5.08 of the General Conditions and on the basis of the Performance Indicators. Each Project Report shall cover the period of one calendar semester, and shall be furnished to the Bank not later than forty-five days after the end of the period covered by such report.

2. Mid-Term Review

The Borrower, through DGER and PU shall:

(a) by January 31, 2014, or such other date as the Bank shall agree upon, carry out jointly with the Bank a mid-term review of the implementation of operations under the Project (Midterm Review). The Midterm Review shall cover the progress achieved in the implementation of the Project; and

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(b) following such Midterm Review, act promptly and diligently to take any corrective action as shall be recommended by the Bank.

B. Financial Management, Financial Reports and Audits

1. The Borrower, through DGER and PU, shall maintain or cause to be maintained a financial management system in accordance with the provisions of Section 5.09 of the General Conditions.

2. The Borrower, through DGER and PU, shall prepare and furnish to the Bank not later than 45 days after each calendar semester, interim unaudited financial reports for the Project covering the semester in form and substance satisfactory to the Bank.

3. The Borrower, through DGER and PU, shall have its Financial Statements audited in accordance with the provisions of Section 5.09 (b) of the General Conditions. Each audit of the Financial Statements shall cover the period of one fiscal year of the Borrower. The audited Financial Statements for each such period shall be furnished to the Bank not later than six months after the end of such period.

Section III. Procurement

A. General

1. Goods and Works. All goods and works required for the Project and to be financed out of the proceeds of the Loan shall be procured in accordance with the requirements set forth or referred to in Section I of the Procurement Guidelines, and with the provisions of this Section.

2. Consultants’ Services. All consultants’ services required for the Project and to be financed out of the proceeds of the Loan shall be procured in accordance with the requirements set forth or referred to in Sections I and IV of the Consultant Guidelines and with the provisions of this Section.

3. Definitions. The capitalized terms used below in this Section to describe particular procurement methods or methods of review by the Bank of particular contracts refer to the corresponding method described in the Procurement Guidelines, or Consultant Guidelines, as the case may be.

4. Special Provisions

(a) In addition and without limitation or restriction to any other provision set forth in this Section or the Procurement Guidelines, the following provisions shall govern all procurement of goods and works with

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National Competitive Bidding procedures under Section III. B.2 (a) of this Schedule:

(i) Bidders shall not be required to be locally registered as a condition of participation in the selection process.

(ii) No reference value shall be required for publication in the bidding documents or used for the purpose of evaluation.

(iii) Award of contracts shall be based exclusively on price and, whenever appropriate, shall take into account factors that can be quantified objectively, and the procedure for such quantification shall be disclosed in the invitation to bid.

(iv) Bidders shall be allowed to participate in National Competitive Bidding without restriction and shall not be subject to any unjustified requirement which will affect their ability to bid such as, but not limited to, the requirement to authenticate their bidding documents or any documentation related to such bidding documents with either Peruvian Consulates, the Ministry of Foreign Affairs, or any Peruvian authorities as a prerequisite of bidding.

(v) The Borrower through MEM shall utilize standard bidding documents satisfactory to the Bank.

(b) In addition and without limitation or restriction to any provision set forth in this Section or the Consultant Guidelines, the following provisions shall govern all employment of consultants referred to in Section III.C of this Schedule:

(i) Consultants shall not be required to be locally registered as a condition of participation in the selection process.

(ii) Consultants shall not be required to authenticate any documentation related to their participation in the selection process with either Peruvian Consulates, the Ministry of Foreign Affairs, or any Peruvian authorities as a condition of participation in said selection process.

(iii) The Borrower shall use standard requests for proposals and standard evaluation formats, all satisfactory to the Bank.

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(iv) Consultants, either individuals or firms, shall not be required to pay fees to the Peruvian Consultants’ Association that are different from those required for Peruvian consultants.

(v) No consultant hired for the Project, at the time he or she is carrying out his or her contractual obligations as a consultant, may hold civil service office or any other position in any agency of the Borrower, nor shall such consultant have any right to re-entry into any such office or position upon the conclusion of his or her consulting services.

B. Particular Methods of Procurement of Goods and Works

1. International Competitive Bidding. Except as otherwise provided in paragraph 2 below, goods and works shall be procured under contracts awarded on the basis of International Competitive Bidding.

2. Other Methods of Procurement of Goods and Works. The following table specifies the methods of procurement, other than International Competitive Bidding, which may be used for goods and works. The Procurement Plan shall specify the circumstances under which such methods may be used.

Procurement Method

(a) National Competitive Bidding(b) Shopping

C. Particular Methods of Procurement of Consultants’ Services

1. Quality- and Cost-based Selection. Except as otherwise provided in paragraph 2 below, consultants’ services shall be procured under contracts awarded on the basis of Quality and Cost-based Selection.

2. Other Methods of Procurement of Consultants’ Services. The following table specifies the methods of procurement, other than Quality and Cost-based Selection, which may be used for consultants’ services. The Procurement Plan shall specify the circumstances under which such methods may be used.

Procurement Method

(a) Quality-based Selection(b) Least Cost Selection(c) Selection Based on Consultants’ Qualifications (a) Single Source Selection(b) Selection under a Fixed Budget

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(c) Procedures set forth in paragraphs 5.2 and 5.3 of the Consultant Guidelines for the Selection of Individual Consultants

(d) Sole Source Procedures for the Selection of Individual Consultants

D. Review by the Bank of Procurement Decisions

The Procurement Plan shall set forth those contracts which shall be subject to the Bank’s Prior Review. All other contracts shall be subject to Post Review by the Bank.

E. Annual Procurement Review

The Borrower, through MEM and PU, shall:

(a) have all the procurement records and documentation for each fiscal year of the Project reviewed, in accordance with appropriate procurement review principles, by procurement reviewers acceptable to the Bank recruited in accordance with Section III of Schedule 2 of this Agreement;

(b) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such fiscal year, the procurement review report of such review by said reviewers, of such scope and in such detail as the Bank shall have reasonably requested; and

(c) furnish to the Bank such other information concerning said procurement records and documentation and the procurement review thereof as the Bank shall from time to time reasonably request.

Section IV. Withdrawal of Loan Proceeds

A. General

1. The Borrower may withdraw the proceeds of the Loan in accordance with the provisions of Article II of the General Conditions, this Section, and such additional instructions as the Bank shall specify by notice to the Borrower (including the “World Bank Disbursement Guidelines for Projects” dated May 2006, as revised from time to time by the Bank and as made applicable to this Agreement pursuant to such instructions), to finance Eligible Expenditures as set forth in the table in paragraph 2 below.

2. The following table specifies the categories of Eligible Expenditures that may be financed out of the proceeds of the Loan (“Category”), the allocation of the amounts of the Loan to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category.

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Category

Amount of the LoanAllocated

(expressed in USD)

Percentage of Expenditures to be

financed(inclusive of Taxes)

(1) Goods, works and consultants’ services for Rural Electrification Sub-Projects under Part A of the Project

48,375,000 100% of the amounts disbursed for the pertinent Rural Electrification Sub-

Project Subsidy

(2) Goods, consultants’ services and Training under Part B and C of the Project

1,625,000 100%

TOTAL AMOUNT 50,000,000

B. Withdrawal Conditions; Withdrawal Period

1. Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made:

(a) from the Loan Account until the Bank has received payment in full of the Front-end Fee; or

(b) for payments made prior to the date of this Agreement, except that withdrawals up to an aggregate amount not to exceed $2,500,000 equivalent may be made for payments made prior to this date but on or after October 1, 2010 (but in no case more than one year from the date of this Agreement), for Eligible Expenditures under Categories (1) and (2).

2. The Closing Date is February 28, 2016.

Section V. Other Undertakings

A. The Borrower shall furnish or cause to be furnished to the Bank through the PU, no later than six months after the Effective Date, the contract appointing for a period of up to three years the independent auditors for the audits referred to in Section II.B.3 of Schedule 2 to this Agreement, under terms of reference and with qualifications and experience satisfactory to the Bank and in accordance with the provisions of Section III of Schedule 2 to this Agreement.

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SCHEDULE 3

Amortization Schedule

The Borrower shall repay the principal amount of the Loan in full on April 15, 2029.

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APPENDIX

Section I. Definitions

1. “Annual Operation Plan” means any of the plans to be prepared by the PU and detailing activities to be financed under the Project, as updated each year in accordance with Schedule 2 to this Agreement.

2. “Anti-Corruption Guidelines” means the “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants”, dated October 15, 2006 and revised in January 2011.

3. “Bank Safeguard Policies” means the Bank’s operational policies and procedures set forth in the Bank’s Operational Manual under OP/BPs 4.01, 4.04, 4.09, 4.10, 4.11, 4.12, 4.36, 4.37, 7.50 and 7.60 as said manual is published under www.WorldBank.org/opmanual.

4. “Category” means a category set forth in the table in Section IV of Schedule 2 to this Agreement.

5. “Consultant Guidelines” means the “Guidelines: Selection and Employment of Consultants by World Bank Borrowers” published by the Bank in May 2004 and revised in October 2006 and May 2010.

6. “DGER” means Dirección General de Electrificación Rural, the Borrower’s General Directorate of Rural Electrification within MEM created by the Borrower’s Supreme Decree No.026-2007-EM, dated May 4, 2007.

7. “Environmental Management Framework” or “EMF” means MEM’s framework dated March, 2011, acceptable to the Bank, (published and available to the public on the website http://dger.minem.gob.pe under the title “marco_evaluacion.pdf”) outlining environmental and social implementation procedures, mitigation measures and monitoring procedures for the Project as well as measures for chance finding of cultural heritage property, as said framework may be amended from time to time with the Bank’s prior approval.

8. “Environmental Management Plan” or “EMP” means a subproject-specific environmental management plan, acceptable to the Bank, adopted pursuant to the terms of the EMF, giving details of measures appropriate or required to maximize the benefits of the Project, eliminate, offset or mitigate any adverse environmental impacts, or reduce such impacts to acceptable levels, together with budget and cost estimates, sources of funding, adequate institutional, monitoring and reporting arrangements capable of ensuring proper implementation of, and regular feedback on compliance with, such environmental management plan.

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9. “Environmental and Social Management Frameworks” means collectively the EMF, the IRPF, and the IPPF.

10. “Environmental and Social Management Instruments” means collectively the Environmental and Social Management Frameworks and any RAP, EMP or IPP adopted pursuant to such frameworks.

11. “General Conditions” means the “International Bank for Reconstruction and Development General Conditions for Loans”, dated July 31, 2010.

12. “Indigenous Peoples’ Plan” or “IPP” means a subproject-specific plan, acceptable to the Bank, adopted pursuant to the Indigenous People’s Planning Framework defining specific measures for indigenous peoples in order to protect them and to ensure that said people be granted equal legal, financial and organizational opportunities under the Project, and to be implemented under a specific activity, in accordance with the provisions of the Indigenous Peoples’ Planning Framework, as the same may be modified from time to time with the prior written agreement of the Bank, and such term includes any schedules or annexes to said plan.

13. “Indigenous Peoples’ Planning Framework” or “IPPF” means MEM’s framework dated March 2011, acceptable to the Bank (published and available to the public on the website http://dger.minem.gob.pe under the title “marco_desarrollo.pdf”) outlining implementation procedures, mitigation measures and monitoring procedures for indigenous peoples under the Project, as said framework may be amended from time to time with the Bank’s prior approval.

14. “Involuntary Resettlement Policy Framework” or “IRPF” means the MEM’s framework dated March, 2011, acceptable to the Bank, (published and available to the public on the website http://dger.minem.gob.pe under the title “marco_reasentamiento.pdf”), outlining implementation procedures, mitigation measures and monitoring procedures in relation to any Resettlement under the Project, as said framework may be amended from time to time with the Bank’s prior approval.

15. “MEF” means Ministerio de Economía y Finanzas, the Borrower’s Ministry of Economy and Finance.

16. “MEM” means Ministerio de Energía y Minas, the Borrower’s Ministry of Energy and Mines.

17. “OSINERGMIN” means Organismo Supervisor de la Inversión en Energía y Minería, the Borrower’s supervisory body for energy and mining investments, as established and operating under Law No. 28964 of January 24, 2007.

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18. “Performance Indicators” means the Project performance indicators set forth in the Project Operational Manual.

19. “Procurement Guidelines” means the “Guidelines: Procurement under IBRD Loans and IDA Credits” published by the Bank in May 2004 and revised in October 2006 and May 2010.

20. “Procurement Plan” means the Borrower’s procurement plan for the Project, dated March 7, 2011 and referred to in paragraph 1.16 of the Procurement Guidelines and paragraph 1.24 of the Consultant Guidelines, as the same shall be updated from time to time in accordance with the provisions of said paragraphs.

21. “Project Directory Committee” means the advisory body of the Project comprising representatives from MEF, MEM and OSINERGMIN, to be established by the Borrower and operate under a Supreme Decree.

22. “Project Operational Manual” means the manual satisfactory to the Bank to be approved by the Borrower’s Vice-Ministry of Energy through a vice-ministerial resolution, outlining the policies, financial management, procurement and disbursement procedures, the information referred to in Section I.E.5 of Schedule 2 to this Agreement, the implementation and monitoring procedures for the Project, as such manual may be amended from time to time with the Bank’s prior approval, and such term includes any schedules to the Project Operational Manual, including the Indigenous Peoples’ Planning Framework, the Environmental Management Framework and the Involuntary Resettlement Policy Framework.

23. “PU” means the Project Unit, the Borrower’s unit within the DGER of the MEM in charge of the day-to-day management and implementation of the Project, as established and operating under the Borrower’s Supreme Decree No. 026-2007-EM, dated May 4, 2007.

24. “Resettlement” means the impact of an involuntary taking of land under the Project, which taking causes affected persons to have their: (i) standard of living adversely affected; or (ii) right, title or interest in any house, land (including premises, agricultural and grazing land) or any other fixed or movable asset acquired or possessed, temporarily or permanently; or (iii) access to productive assets adversely affected, temporarily or permanently; or (iv) business, occupation, work or place of residence or habitat adversely affected, temporarily or permanently.

25. “Resettlement Action Plan” or “RAP” means a subproject-specific plan, acceptable to the Bank, adopted pursuant to the IRPF setting out the arrangements, including related compensation measures, and to be applied in the event of Resettlement, in accordance with the provisions of the Involuntary

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Resettlement Policy Framework (as defined above), as the same may be modified from time to time with the prior written agreement of the Bank, and such term includes any schedules or annexes to said plan.

26. “Rural Electrification Legal Framework” means, collectively, the General Rural Electrification Law (Ley General de Electrificación Rural), No. 28749, dated June 1, 2006 and the Legislative Decree No. 1041 dated June 27, 2008, and other regulations or decrees that apply, as said framework may be amended from time to time.

27. “Rural Electrification Provider” means a private or public electricity distribution company qualified in accordance with the criteria and procedures set forth in the Project Operational Manual and in Schedule 2 to this Agreement in order to provide electricity services in rural areas under a Rural Electrification Sub-Project.

28. “Rural Electrification Sub-Project” means a sub-project carried out or proposed to be carried out under Part A of the Project by a Rural Electrification Provider pursuant to a Rural Electrification Sub-Project Agreement and in accordance with the criteria and procedures set forth in the Project Operational Manual and in Schedule 2 to this Agreement.

29. “Rural Electrification Sub-Project Agreement” means any of the agreements executed between DGER and a Rural Electrification Provider containing the terms and conditions for the financing of electricity provision under Part A of the Project in accordance with the criteria and procedures set forth in the Project Operational Manual and in Schedule 2 to this Agreement.

30. “Rural Electrification Sub-Project Subsidy” means a subsidy or a contribution granted or proposed to be granted out of the proceeds of the Loan to cover part of the investment cost of a Rural Electrification Sub-Project.

31. “SNIP” means Sistema Nacional de Inversión Pública, the Borrower’s national system of public investment created and operating under the Borrower’s Law No. 27293, dated June 28, 2000 and establishing principles, processes, methodologies and technical guidelines for every phase of public investment in the Borrower’s territory.

32. “Training” means the reasonable costs of: (i) training materials and rental of training facilities and equipment; (ii) tuition fees, travel and per-diem of trainers and trainees; and (iii) any other expenses related to training (including study tours and workshops) to be carried out under the Project.