public disclosure authorized conformed copy loan ......prenos elektricne energije u sastavu...

CONFORMED COPY

LOAN NUMBER 1469 YU

LOAN AGREEMENT

(Second Power Transmission Project)

among

INTERNATIONAL BANK FOR RECONSTRUCTIONAND DEVELOPMENT

and

ELEKTROPRIVREDA BOSNE I IERCEGOVINE-SARAJEVO

ZAJEDNICA ELEKTROPRIVREDNIH ORGANIZACIJA HRVATSKE-ZAGREB

ELEKTROPRENOS - SKOPJE ORGANIZACIJA ZA PRENOS ELEKTRICNEENERGIJE U SASTATU ELEKTROSTOPANSTVA MAKEDONIJE-SKOPJE

ELEKTROPRENOS-TITOGRAD ORGANIZACIJA ZA PRENOS ELEKTRICNEENERGIJE U SASTAVU ELEKTROPRIVREDE CRNE GORE-NIKSIC

ELEKTROISTOK - BEOGRAD ORGANIZACIJA ZA PRENOS ELEKTRICNE ENERGIJEU SASTAVU ZDRUZENOG ELEKTROPRIVREDNOG PREDUZECA-BEOGRAD

ZDRUZENA ELEKTROGOSPODARSKA PODJETJA SLOVENIJE-MARIBOR

and

ELEKTROSTOPANSTVO MAKEDONIJE-SKOPJE

ELEKTROPRIVREDA CRNE GORE-NIKSIC

ZDRUZENO ELEKTROPRIVREDNO PREDUZECE-BEOGRAD

and

ZAJEDNICA JUGOSLOVENSKE ELEKTROPRIVREDE-BEOGRAD

Dated July 11, 1977

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

LOAN AGREEMENT

AGREEMENT, dated July 11, 1977, between INTERNATIONAL BANKFOR RECONSTRUCTION AND DEVELOPMENT, party of the first part (suchparty of the first part hereinafter called the Bank),ELEKTROPRIVREDA BOSNE I HERCEGOVINE-SARAJEVO (hereinafter some-times called Elektroprivreda BiH), ZAJEDNICA ELEKTROPRIVREDNIHORGANIZACIJA HRVATSKE-ZAGREB (hereinafter sometimes called ZEOHZagreb), ELEKTROPRENOS - SKOPJE ORGANIZACIJA ZA PRENOS ELEKTRICNEENERGIJE U SASTAVU ELEKTROSTOPANSTVA MAKEDONIJE-SKOPJE (here-inafter sometimes called Elektroprenos Skopje), ELEKTROPRENOS -TITOGRAD ORGANIZACIJA ZA PRENOS ELEKTRICNE ENERGIJE U SASTAVUELEKTROPRIVREDE CRNE GORE - NIKSIC (hereinafter sometimes calledElektroprenos Titograd), ELEKTROISTOK - BEOGRAD ORGANIZACIJAZA PRENOS ELEKTRICNE ENERGIJE U SASTAVU ZDRUZENOGELEKTROPRIVREDNOG PREDUZECA-BEOGRAD (hereinafter sometimescalled Elektroistok), ZDRUZENA ELEKTROGOSPODARSKA PODJETJASLOVENIJE-MARIBOR (hereinafter sometimes calledElektrogospodarstvo Slovenije) parties of the second part (any ofsuch parties of the second part hereinafter sometimes individuallycalled a Borrower and all such parties of the second part herein-after sometimes collectively called the Borrowers), andELEKTROSTOPANSTVO MAKEDONIJE - SKOPJE (hereinafter sometimescalled Elektrostopanstvo Makedonije), ELEKTROPRIVREDA CRNE GORE -NIKSIC (hereinafter sometimes called Elektroprivreda Crne Gore),ZDRUZENO ELEKTROPRIVREDNO PREDUZECE - BEOGRAD (hereinaftercalled ZEP) (any of such parties of the third part hereinaftersometimes individually called an Organization of Associated Laborand all such parties of the third part hereinafter sometimescollectively called the Organizations of Associated Labor), andZAJEDNICA JUGOSLOVENSKE ELEKTROPRIVREDE - BEOGRAD, party ofthe fourth part (such party of the fourth part hereinafter calledJUGEL), all such parties of the second, third and fourth partsacting in their own names and in the name of, and on behalf of,their respective constituent organizations.

WHEREAS (A) the Borrowers have requested the Bank to assistin the financing of the foreign exchange cost of the Projectdescribed in Schedule 2 to this Agreement by making the Loan ashereinafter provided;

(B) Parts I A 1 and I A 2 (a), (b), and (c) of the Projectwill be carried out by ELEKTROPRENOS-SARAJEVO, ORGANIZACIJA ZAPRENOS ELEKTRICNE ENERGIJE U SASTAVU ELEKTROPRIVREDE BOSNE IHERCEGOVINE-SARAJEVO (hereinafter called Elektroprenos Sarajevo),

-2-

Part I A 2 (d) of the Project will be carried out by

HIDROELEKTRANE NA TREBISNJICI - TREBINJE ORGANIZACIJA U SASTAVUELEKTROPRIVREDE BOSNE I HERCEGOVINE-SARAJEVO (hereinafter called

Trebinje), Parts I B 1 (a) and I B 2 (c) of the Project will be

carried out by ELEKTROPRENOS-ZAGREB, ORGANIZACIJA ZA PRENOS

ELEKTRICNE ENERGIJE U SASTAVU ZAJEDNICE ELEKTROPRIVREDNIH

ORGANIZACIJA HRVATSKE-ZAGREB (hereinafter called Elektroprenos

Zagreb), Part I B 1 (b) and I B 2 (a) of the Project will be

carried out by ELEKTROPRENOS-MATULJI, ORGANIZACIJA ZA PRENOS

ELEKTRICNE ENERGIJE U SASTAVU ZAJEDNICE ELEKTROPRIVREDNIHORGANIZACIJA HRVATSKE-ZAGREB (hereinafter called Elektroprenos

Matulji), Part I B 2 (b) of the Project will be carried out byELEKTROPRENOS-SPLIT, ORGANIZACIJA ZA PRENOS ELEKTRICNE ENERGIJE U

SASTAVU ZAJEDNICE ELEKTROPRIVREDNIH ORGANIZACIJA HRVATSKE-ZAGREB

(hereinafter called Elektroprenos Split), Part I C of the Project

will be carried out by Elektroprenos Skopje, Part I D of the

Project will be carried out by Elektroprenos Titograd, Part I E

and Part II E (b) and (c) of the Project will be carried out byElektroistok, Part I F 2 (b) of the Project will be carried out by

DRAVSKE ELEKTRARNE-MARIBOR, ORGANIZACIJA V SESTAVU

ELEKTROGOSPODARSTVA SLOVENIJE-MARIBOR (hereinafter called

Maribor), Part I F 1 (a) and (b), I F 2 (a) and (d) of the Project

will be carried out by SAVSKE ELEKTRARNE-LJUBLJANA, ORGANIZACIJA V

SESTAVU ELEKTROGOSPODARSTVA SLOVENIJE-MARIBOR (hereinafter called

Ljubljana), and Part I F 1 (c) and I F 2 (c) of the Project will

be carried out by SOSKE ELEKTRARNE-NOVA GORICA ORGANIZACIJA V

SESTAVU ELEKTROGOSPODARSTVA SLOVENIJE-MARIBOR (hereinafter called

Nova Gorica), Part II A of the Project will be carried out by

Elektroprivreda BiH, Part II B of the Project will be carried out

by ZEOH Zagreb, Part II C of the Project will be carried out by

Elektrostopanstvo Makedonije, Part II D of the Project will be

carried out by Elektroprivreda Crne Gore, Part II E (a) of the

Project will be carried out by ZEP, Part II F of the Project will

be carried out by Elektrogospodarstvo Slovenije, Part II G of the

Project will be carried out by JUGEL and Part III of the Project

will be carried out jointly by each of the Borrowers, ZEP,

Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, each of

the Beneficiaries, as this term is hereinafter defined, and

JUGEL.

(C) Elektroprivreda BiH will assist Elektroprenos Sarajevo

and Trebinje, all of which are constituent organizations of

Elektroprivreda BiH, in the carrying out of their respective

Individual Parts of the Project referred to in Recital B of this

Preamble of this Agreement; ZEOH Zagreb will assist Elektroprenos

-3-

Zagreb, Elektroprenos Split and Elektroprenos Matulji, all ofwhich are constituent organizations of ZEOH Zagreb in the carryingout of their respective Individual Parts of the Project referredto in Recital B of this Preamble; Elektroprenos Skopje will assistElektrostopanstvo Makedonije of which Elektroprenos Skopje isa constituent organization in the carrying out of its IndividualPart of the Project referred to in Recital B of this Preamble;Elektroprenos Titograd will assist Elektroprivreda Crne Gore ofwhich Elektroprenos Titograd is a constituent organization inthe carrying out of its Individual Part of the Project referred toin Recital B of this Preamble; Elektroistok will assist ZEP ofwhich Elektroistok is a constituent organization, in the carryingout of its Individual Part of the Project referred to in Recital Bof this Preamble; and Elektrogospodarstvo Slovenije will assistMaribor, Ljubljana and Nova Gorica, all of which are constituentorganizations of Elektrogospodarstvo Slovenije in the carrying outof their Individual Parts of the Project referred to in Recital Bof this Preamble; for that purpose, ZEOH Zagreb,Elektrogospodarstvo Slovenije and Elektroprivreda BiH will makeavailable to their respective constituent member organizations,and Elektroistok, Elektroprenos Skopje and Elektroprenos Titogradshall make available to ZEP, Elektrostopanstvo Makedonije andElektroprivreda Crne Gore, respectively, for the carrying out ofeach of their respective Individual Parts of the Project and eachof the Borrowers shall make available to JUGEL in order to assistJUGEL in the carrying cut of Part II G and Part III of the Proj-ect, a portion of the proceeds of their Individual Portion of theLoan (as those terms are hereinafter defined);

(D) Elektroprivreda BiH has represented to the Bank that itsconstituent organizations pursuant to the provisions of theSelf-Management Agreement of Elektroprivreda BiH and pursuant tothe decision of the Workers' Council of Elektroprivreda BiH,dated February 10, 1977, have undertaken to make an amount of notless than eight hundred thirty million Dinars (Din 830,000,000),out of their resources available to Elektroprivreda BiH,Elektroprenos Sarajevo and Trebinje for the purpose of assistingElektroprivreda BiH, Elektroprenos Sarajevo and Trebinje incarrying out their respective Individual Parts of the Project;

(E) ZEOH Zagreb has represented to the Bank that itsconstituent organizations pursuant to the provisions of theSelf-Management Agreement of ZEOH Zagreb and pursuant to thedecision of the Assembly of ZEOH Zagreb, dated February 15,1977, have undertaken to make an amount of not less than seven

-4-

hundred and eighty-six million Dinars (Din 786,000,000), out oftheir resources available to ZEOH Zagreb, Elektroprenos Zagreb,Elektroprenos Split and Elektroprenos Matulji for the purpose ofassisting ZEOH Zagreb, Elektroprenos Zagreb, Elektroprenos Splitand Elektroprenos Matulji in carrying out their respectiveIndividual Parts of the Project;

(F) Elektrostopanst7o Makedonije has represented to theBank that its constituent organizations pursuant to the provisionsof the Self-Management Agreement of Elektrostopanstvo Makedonijeand pursuant to the decision of the Workers' Council ofElektrostopanstvo Makedonije, dated February 18, 1977, haveundertaken to make an amount of not less than four hundred eighty-three million dinars (Din 483,000,000), out of their resources,available to Elektrostopanstvo Makedonije and ElektroprenosSkopje for the purpose of assisting Elektrostopanstvo Makedonijeand Elektroprenos Skopje in carrying out their respective Indi-vidual Parts of the Project;

(G) Elektroprivreda Crne Gore has represented to the Bankthat its constituent organizations pursuant to the provisions ofthe Self-Management Agreement of Elektroprivreda Crne Gore andpursuant to the decision of the Workers' Council ofElektroprivreda Crne Gore, dated February 15, 1977, have under-taken to make an amount of not less than four hundred ninety-twomillion Dinars (Din 492,000,000), out of their resources, avail-able to Elektroprivreda Crne Gore and Elektroprenos Titograd forthe purpose of assisting Elektroprivreda Crne Gore andElektroprenos Titograd in carrying out their respective IndividualParts of the Project;

(H) ZEF has represented to the Bank that its constituentorganizations intend pursuant to the provisions of the Self-Management Agreement of ZEP to undertake to make an amountof not less than eight hundred forty-eight million Dinars (Din848,000,000), out of their resources, available to ZEP andElektroistok for the purpose of assisting ZEP and Elektroistok incarrying out their respective Individual Parts of the Project;

(I) Elektrogospodarstvo Slovenije has represented to theBank that its constituent organizations pursuant to the provisionsof the Self-Management Agreement of Elektrogospodarstvo Slovenijeand pursuant to the decision of the Workers' Council ofElektrogospodarstvo Slovenije, dated February 25, 1977, have

undertaken to make an amount of not less than one thousand fifty-six million Tinars (Din 1,056,000,000), out of their resourcesavailable to Elektrogospodarstvo Slovenije and to Maribor,Ljubljana and Nova Gorica for the purpose of assistingElektrogospodarstvo Slovenije and Maribor, Ljubljana and NovaGorica in carrying out their respective Individual Parts of theProject;

(J) Each of the Borrowers, ZEP, Elektrostopanstvo Makedonijeand Elektroprivreda Crne Gore propose to enter into an agreement(each such agreement in this Recital (J) sometimes referred to asa Local Loan Agreement) with a local bank, such local Loan Agree-ment providing, inter alia, for such local bank to assist: (a)such Borrower, ZEP, Elektrostopanstvo Makedonije andElektroprivreda Crne Gore, JUGEL and such Beneficiaries incarrying out their Individual Parts of the Project; and (b) suchBeneficiaries which are their constituent member organizationsand JUGEL in carrying out their respective Individual Parts of theProject by making a portion of such Local Loans available to themthrough the Borrowers, ZEP, Elektrospanstvo Makedonije andElektroprivreda Crne Gore, as appropriate by: (i) making to suchBorrower, ZEP, Elektrostopanstvo Makedonije and ElektroprivredaCrne Gore a loan in Dinars (such loan in this Recital (J) referredto as a Local Loan); and (ii) undertaking to lend to such Bor-rower, ZEP, Elektrostopanstvo Makedonije and ElektroprivredaCrne Gore any such additional funds as may be required to carryout their Individual Parts of the Project and such IndividualParts of the Project to be carried out by such Beneficiary orBeneficiaries which is or are their respective constituent memberorganizations over and above the funds made available to suchBorrower, ZEPF, Elektrostopanstvo Makedonije and ElektroprivredaCrne Gore under its Local Loan and to such Beneficiary and JUGELthrough such Local Loan, the Loan provided hereunder and the fundsreferred to in Recitals (D) through (I) of, and in Recitals (K),(L) and (M) of, the Preamble to this Agreement, such Local LoanAgreement to be concluded by each of the Borrowers, ZEP,Elektrostopanstvo Makedonije and Elektroprivreda Crne Gore withsuch local bank, and for a Local Loan of such an amount, as isspecified hereinafter, namely: in the case of Elektroprivreda BiH,a Local Loan Agreement (hereinafter called the Privredna BankaSarajevo Loan Agreement) with Privredna Banka Sarajevo for aLocal Loan in an amount of 830,000,000 Dinars; in the case of ZEOHZagreb, a Local Loan Agreement (hereinafter called the PrivrednaBanka Zagreb Loan Agreement) with Privredna Banka Zagreb for aLocal Loan in the amount of 786,000,000 Dinars; in the case of

-6-

Elektroprenos Skopje a Local Loan Agreement (hereinafter calledthe First Stopanska Banka Skopje Loan Agreement) with StopanskaBanka Skopje for a Local Loan in the amount of 397,000,000 Dinars;in the case of Elektrostopanstvo Makedonije, a Local Loan Agree-ment (hereinafter called the Second Stopanska Banka Skopje LoanAgreement) with Stopanska Banka Skopje for a Local Loan in theamount of 86,000,000 Dinars; in the case of ElektroprenosTitograd, a Local Loan Agreement (hereinafter called the FirstInvesticiona Banka Titograd Loan Agreement) with InvesticionaBanka Titograd for a Local Loan in the amount of 423,000,000Dinars; in the case of Elektroprivreda Crne Gore, a Local LoanAgreement (hereinafter called the Second Investiciona BankaTitograd Loan Agreement) with Investiciona Banka Titograd for aLocal Loan in the amount of 70,000,000 Dinars; in the case ofElektroistok, a Local Loan Agreement (hereinafter called theBeogradska Banka-II Osnovna Banka Beograd and Vojvodanska BankaCentrala Novi Sad Loan Agreement) with Beogradska Banka II OsnovnaBanka Beograd and Vojvodanska Banka-Centrala Novi Sad for a LocalLoan in an aggregate amount of 728,000,000 Dinars; in the case ofZEP, a Local Loan Agreement (hereinafter called the SecondBeogradska Banka II Osnovna Banka Loan Agreement) with BeogradskaBanka II 'snovna Banka Beograd for a Local Loan in the amount of120,000,000 Dinars; in the case of Elektrogospodarstvo Slovenije,a Local Loan Agreement (hereinafter called the Ljubljanska BankaLjubljana Loan Agreement) with Ljubljanska Banka Ljubljana pro-viding for an undertaking to lend to Elektrogospodarstvo Slovenijeany such additional funds as may be required to carry out itsIndividual Part of the Project and for Ljulbljana, Maribor andNova Gorica to carry out their respect. 'e Individual Parts of theProject;

(K) The Borrowers, Elektroprenos Makedonije, ElektroprivredaCrne Gore, ZEP and JUGEL have represented to the Bank that theyintend to request additional loans from other lenders outsideYugoslavia in such aggregate amount as it shall require for theefficient execution of the Project (currently estimated tobe equivalent to, about $59,000,000) on terms and conditionsthat will enabl. such Borrowers, ZEP, ElektrostopanstvoMakedonije, Elektroprivredna Crne Gore, the Beneficiaries andJUGEL to carry out the Project and its operations in accordancewith sound financial practices, and the Guarantor will assist suchBorrower to obtain suh loans (hereinafter called the CommercialLoans);

-7-

(L) The Borrowers have represented to the Bank that theyintend to contract from the European Investment Bank (hereinaftercalled EIB), a loan (hereinafter called the EIB Loan) in aprincipal amount of up to twenty-five million units of account(EUA 25,000,000) (equivalent to about thirty million dollars($30,000,000)) at current exchange rates to assist in the fi-nancing of the Project, on the terms and conditions set forth inan agreement (hereinafter called the EIB Loan Agreement) to beentered into between the Borrowers and EIB; and

(M) The Borrowers, ZEP, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore and JUGEL and the Beneficiaries haverepresented to the Bank that they intend to contract supplierscredits in an aggregate principal amount, currently estimated tobe equivalent to about seventy million dollars ($70,000,000) toassist in the financing of Parts I and II, of the Project (herein-after called the Suppliers Credits);

WHEREAS the Bank has agreed, on the basis, inter alia, of theforegoing, to make the Loan available to the Borrowers upon theterms and conditions set forth hereinafter and in a projectagreement of even date herewith between the Bank, party of thefirst part, and Elektroprenos Sarajevo, Trebinje, ElektroprenosZagreb, Elektroprenos Split, Elektroprenos Matulji, Maribor,Ljubljana and Nova Gorica, parties of the second part (any suchparties of the second part hereinafter sometimes individuallycalled a Beneficiary and all such parties of the second parthereinafter sometimes collectively called the Beneficiaries);

WHEREAS by an agreement (hereinafter called the GuaranteeAgreement) of even date herewith between the Socialist FederalRepublic of Yugoslavia (hereinafter called the Guarantor) and theBank, the Guarantor has agreed to guarantee the Loan as topayment of principal, interest and other charges;

WHEREAS the Bank, on the basis, inter alia, of the foregoinghas agreed to make a loan to the Borrowers on the conditionshereinafter set forth;

NOW THEREFORE, the parties hereto hereby agree as follows:

-8-

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,

subject, however, to the modifications thereof set forth in

Schedule 5 to this Agreement (said General Conditions Applicable

to Loan and Guarantee Agreements of the Bank, as so modified,

being hereinafter called the General Conditions).

Section 1.02. Wherever used in this Agreement, unls3s 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) "Individual Part of the Project" used with respect

to any of the Borrowers, ZEP, Elektrostopanstvo Makedonije,

Elektroprivreda Crne Gore, JUGEL or any of the Beneficiaries,

means that Part of the Project referred to in Recital B of the

Preamble to this Agreement and described in Schedule 2 to this

Agreement which is designated with such Borrower's, ZEP's,

Elektrostopanstvo Makedonije's, Elektroprivreda Crne Gore's,

JUGEL's or such Beneficiary's name;

(b) (i) "Bosna i Hercegovina", (ii) "Hrvatska", (iii)

"Makedonija", (iv) "Crna Gora", (v) "Srbija" and (vi) "Slovenija"

mean the respective Socialist Republics of such name, and "Re-

publics" means collectively all such Socialist Republics;

(c) "Individual Portion of the Loan", used with respect

to any of the Borrowers, means such portion of the Loan as shall

have been allocated to such Borrower for the purpose of assisting

in the financing of such Borrower's Individual Part of the Proj-

ect, and of such Individual Part of the Project of ZEP,

Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, JUGEL,

and of such Beneficiary or Beneficiaries which are constituent

member organizations of associated labor of, or basic organi-

zations of, such Borrower to whom part of such Individual Portion

of the Loan is to be made available by such Borrower for the

purpose of assisting them in the carrying out of their Individual

Parts of the Project, as described in Section 3.01 (c) of this

Agreement;

-9-

(d) "Social Accounting Service" means the Slu2ba DrustvenogKnjigovodstva referred to in Article 77 of, and in paragraph 1item 5 of Article 281 of, the Guarantor's Constitution;

(e) "Coordinating Committee" means the committee referred toin paragraph 1 of Schedule 7 to this Agreement;

(f) "Special Account" means the account referred to inparagraph 2 (a) of Schedule 6 to this Agreement;

(g) "Project Agreement" means the agreement between the Bankand the Beneficiaries of even date herewith, as the same may beamended from time to time, and such term includes all schedules tothe Project Agreement and all agreements supplemental to theProject Agreement;

(h) "Dinar" means the currency of the Guarantor; and

(i) "First Loan Agreement" means the loan agreement (PowerTransmission Project) (Loan No. 836-YU) dated June 23, 1972,between the Bank on the one hand and each of the Beneficiaries,Elektroprenos Skopje, Elektroprenos Titograd, Elektroistok, andJUGEL on the other hand, as such loan agreement has been amendedby the Accession and Amending Agreement (Power TransmissionProject) (Loan No. 836-YU) dated July 10, 1974, between the sameparties and Osijek (as this term is therein defined) and as suchagreements have been further amended by the Loan AssumptionAgreement (Power Transmission Project) (Loan No. 836-YU), of evendate herewith between the same parties and Osijek andElektroprivreda BiH, ZEOH Zagreb, Elektrogospodarstvo Slovenije,Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore and ZEP,and such term includes all schedules to such agreements and allagreements supplemental to them.

ARTICLE II

The Loan

Section 2.01. The Bank agrees to lend to the Borrowers,on the terms and conditions in the Loan Agreement set forthor referred to, an amount in various currencies equivalentto eighty million dollars ($80,000,000).

Section 2.02. The amount of the Loan may be withdrawnfrom the Loan Account in accordance with the provisions of

- 10 -

Schedule 1 to this Agreement, as such Schedule may be amended from

time to time by agreement between the Bank and the Borrowers, 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,provided, however, that except as the Bank shall otherwise

agree, no further withdrawal shall be made from the Loan Account

after June 30, 1978 in respect of Categories 1(a), 2(a), 3(a)

4(a), 5(a) and 6(a) of the table of withdrawal of the proceeds of

the Loan set forth in paragraph 1 of said Schedule 1 to this

Agreement, until the Borrowers have satisfied the Bank that

the EIB Loan Agreement has been concluded and is in full force and

effect and that arrangements satisfactory to the Bank have been

made by the Borrowers to make available to such Borrowers and to

the Beneficiaries, ZEP, Elektrostopanstvo Makedonije and

Elektroprivreda Crne Gore and JUGEL, such portion of the proceeds

of the Commercial Loans and of the Suppliers Credits as shall be

required to meet, as and when needed, the estimated expenditures

required for the carrying out of their reroective Individual Parts

of the Project related to Part I of the :-roject.

Section 2.03. Except as the Bank shall otherwise agree,

contracts for the purchase of goods or for civil works to be

financed out of the proceeds of the Loan, shall be procured in

accordance with the provisions of Schedule 4 to this Agreement.

Section 2.04. The Closing Date shall be December 31, 1982

or such later date as the Bank shall establish. The Bank shall

promptly notify the Borrowers and the Guarantor of such later

date.

Section 2.05. The Borrowers shall pay to the Bank a com-

mitment 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.

Section 2.06. The Borrowers shall pay interest at the rate

of eight and two-tenths per cent (8.20%) per annum on the princi-

pal amount of the Loan withdrawn and outstanding from time to

time.

Section 2.07. Interest and other charges shall be payable

semi-annually on March 15 and September 15 in each year.

- 11 -

Section 2.08. The Borrowers shall repay the principal amountof the Loan in accordance with the amortization schedule set forthin Schedule 3 to this Agreement.

Section 2.09. (a) Of the amounts in the currencies specifiedin Article IV of the General Conditions to be paid to the Bankby the Borrowers on each payment date pursuant to the foregoingSections 2.05 through 2.08 of this Agreement, each of the Bor-rowers shall only be liable for, and shall pay a share equivalentto:

(i) the commitment charge accrued on the principalamount of its Individual Portion of the Loannot withdrawn or cancelled and the additionalcommitment charge accrued on special commitmentsentered into by the Bank at the request of suchBorrower;

(ii) the interest accrued on the principal amount ofits Individual Portion of the Loan withdrawn andoutstanding; and

(iii) a portion of the amount of each maturity of theLoan proportionate to the principal amount ofits Individual Portion of the Loan, provided thatsuch portion shall not have been repaid by suchBorrower in advance of maturity as provided inparagraph (b) below.

(b) Each of the Borrowers shall have the right, upon paymentof all accrued interest and payment of the premium specifiedin Schedule 3 to this Agreement, and upon not less than 45 days'notice to the Bank, to repay in advance of matu'ity:

(i) all of the principal amount of its IndividualPortion of the Loan at the time withdrawn andoutstanding; or

(ii) all of the principal amount of the Loan to berepaid by such Borrower on one or more maturitydates in accordance with paragraph (a) above,provided that on the date of such prepaymentthere shall not be outstanding any portion of theLoan to be repaid by such Borrower and maturingafter such maturity dates.

- 12 -

(c) It is the policy of the Bank to encourage the repayment

prior to maturity of portions of its loans retained by the Bank

in its own account. Accordingly, the Bank will sympathetically

consider, in the light of all circumstances then existing, any

request by a Borrower that the Bank waive the payment of any

premium payable under paragraph (b) of this Section on prepayment

of any portion of the Loan which the Bank has not sold or agreed

to sell.

(d) Each of the Borrowers may by notice to the Bank cancel

any amount of its Individual Portion of the Loan which such

Borrower shall not have withdrawn prior to the giving of such

notice, except that none of the Borrowers may so cancel any amount

of its Individual Portion of the Loan in respect of which the Bank

shall have entered into a special commitment pursuant to Section

5.02 of the General Conditions.

Section 2.10. JUGEL is designated as the representative of

each of the Borrowers for the purposes of taking any action

required or permitted -to be taken under the provisions set forth

or referred to in Sections 2.02, 2.05, 2.06, 2.07, 2.08 and 2.09

of this Agreement, and Articles III, IV and V and Section 6.05 of

the General Conditions, and for such purpose, JUGEL and the

Borrowers shall take such actions as are set forth in Schedule 6

to this Agreement.

Section 2.11. All obligations of the Borrowers under the

Loan Agreement, unless such obligations shall have been expressly

undertaken by each of the Borrowers separately, shall be joint and

several and the obligation of any of them to comply with any

provision of the Loan Agreement is not subject to any prior notice

to, demand upon or action against any other of them. No extension

of time or forbearance given to any of the Borrowers in respect of

the performance of any of its obligations under the Loan Agreement

and no failure of the Bank to give any notice or to make any

demand or protest whatsoever to any of the Borrowers, or strictly

to assert any right or pursue any remedy against any of them in

respect of the Loan Agreement, and no failure by any of the

Borrowers to comply with any requirement of any law, regulation or

order, shall in any way affect or impair any obligation of the

Borrowers under the Loan Agreement.

- 13 -

ARTICLE III

Execution of the Project

Section 3.01. (a) Elektroprivreda BiH, ZEOH Zagreb,Elektroprenos Skopje, Elektroprenos Titograd, Elektroistok,Elektrogospodarstvo Slovenije, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore, and ZEP shall: (i) each carry out itsIndividual Part of the Project as specified in Schedule 2 to thisAgreement and in Recital B of the Preamble to this Agreement; and(ii) jointly carry out Part III of the Project: (A) all with duediligence and efficiency and in conformity with appropriateengineering, financial and public utility practices; and (B) allin cooperation with the other Borrowers, each of the Benefici-aries, ZEP, Elektrostopanstvo Makedonije and Elektroprivreda CrneGore and JUGEL (as such cooperation is described in more detail inSchedule 7 to this Agreement) in a practical manner designed toensure the most efficient construction and operation of theinterconnected power transmission system, including the Project asa whole; and JUGEL shall cooperate with the Borrowers, ZEP,Elektrostopanstvo Makedonije and Elektroprivreda Crne Gore and theBeneficiaries and shall, in addition thereto, carry out Part II Gof the Project with due diligence and efficiency and in conformitywith appropriate engineering, financial and public utility prac-tices; and Elektroprivreda BiH, ZEOH Zagreb, ElektrostopanstvoMakedonije, Elektroprivreda Crne Gore, ZEP and ElektrogospodarstvoSlovenije shall provide, promptly as needed, the funds, faci-lities, services and other resources required for the purpose.

(b) Without any limitation or restriction upon any of theirother obligations under the Loan Agreement, each of the Borrowersshall cause each of the respective Beneficiaries, who is one ofits respective constituent member organizations, to performin accordance with the provisions of the Project Agreement allthe obligations therein set forth, shall take and cause to betaken all action, including the provision of funds, facilities,services and other resources, necessary or appropriate to enablesuch Beneficiaries to perform such obligations and shall not takeor permit to be taken any action which would prevent or interferewith such performance.

(c) Elektroprivreda BiH, ZEOH Zagreb and ElektrogospodarstvoSlovenije shall each make available to each such Beneficiary whois one of its respective constituent member organizations and toJUGEL, and Elektroistok, Elektroprenos Skopje and Elektroprenos

- 14 -

Titograd shall make available to ZEP, Elektrostopanstvo Makedonije

and Elektroprivreda Crne Gore, respectively, and to JUGEL that

portion of its Individual Portion of the Loan and that portion of

its Local Loan and of their resources referred to in Recitals (D)through (I) of the Preamble to this Agreement which are required

by such Beneficiary, JUGEL, ZEP, Elektrostopanstvo Makedonije orElektroprivreda Crne Gore, as appropriate, to carry out its

Individual Part of the Project, all to be under arrangements to be

in form and substance satisfactory to the Bank.

Section 3.02. (a) In order to assist the Borrowers, ZEP,Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore and

JUGEL in the preparation of plans and specifications and, in the

preparation of bidding documents related to dispatch facilities

for their respective Individual Parts of the Project, the Bor-

rowers, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore

and ZEP (acting through JUGEL) and JUGEL shall employ engineeringconsultants whose qualifications, experience and terms and

conditions of employment shall be satisfactory to the Bank.

Without limitation to the foregoing: (A) such terms and conditions

shall be determined so as to take into account the recommendations

of the consultants related to the management study carried out

pursuant to Section 3.02 (b) of the First Loan Agreement, and (B)

the Borrowers, Elektrostopanstvo Makedonije, Elektroprivreda

Crne Gore and ZEP (acting through JUGEL) and JUGEL shall complete

such bidding documents by December 31, 1978, or such other date as

the Bank may agree.

(b) Each of the Borrowers, Elektrostopanstvo Makedonije and

Elektroprivreda Crne Gore and ZEP shall: (i) submit (through

JUGEL) to the Bank for its comments, no later than December 31,1978 or such later date as the Bank may agree, the final reports

pertaining to the least cost development study carried out by

Institut Za Elektroprivreda, Zagreb, Energoprojekt, Beograd,

Institut Nikola Tesla, Beograd and Institut Milana Vidmarja,

Ljubljana, respectively, pursuant to contracts dated November 24,1976 each, and no later than June 30, 1978, or such other date as

the Bank may agree the final reports pertaining to the tariff

study carried out by Institut za Elektroprivredu, Zagreb pursuant

to a contract dated November 24, 1976; (ii) submit (through JUGEL)

to the Bank for its comments progress and interim reports related

to such studies promptly upon their completion; and (iii) for the

purpose of determining the scope of the work to be carried out

under Part III of the Project, no later than three months after

such final reports have been submitted to the Bank, exchange views

- 15 -

with the Bank (through JUGEL) on the recommendations of said study

and on the scope of further work to be carried out, in connection

with the said studies.

(c) In order to assist Elektroprivreda BiH, ZEOH Zagreb,

Elektrogospodarstvo Slovenije, Elektrostopanstvo Makedonije,

Elektroprivreda Crne Gore, and ZEP in the carrying out of the

least cost development and tariff studies under Part III of the

Project, Elektroprivreda BiH, ZEOH Zagreb, Elektrogospodarstvo

Slovenije, Elektrostopantsvo Makedonije, Elektroprivreda Crne

Gore, and ZEP (acting through JUGEL) shall, unless the Bank shall

otherwise agree, employ consultants whose qualifications, exper-

ience and terms and conditions of employment shall be satisfactory

to the Bank, such terms and conditions shall be based, inter alia,

on the recommendations of the consultants referred to in paragraph

(b) of this Section; Elektroprivreda BiH, ZEOH Zagreb,

Elektrogospodarstvo Slovenije, Elektrostopanstvo Makedonije,

Elektroprivreda Crne Gore, and ZEP (acting through JUGEL) shall

from time to time exchange views with the Bank on the progress of

such studies to be undertaken under such Part III of the Projectand shall furnish to the Bank in connection therewith all such

information as the Bank shall reasonably request.

(d) Except as the Bank shall otherwise agree,Elektroprivreda BiH, ZEOH Zagreb, Elektrogospodarstvo Slovenije,Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, and ZEP

shall, (through JUGEL) submit to the Bank for its comments,

promptly after their completion, (A) the report or reports of the

consultants employed in accordance with the provisions of para-

graph (c) of this Section 3.02 of this Agreement, (B)

Elektroprivreda BiH's, ZEOH Zagreb's, Elektrogospodarstvo

Slovenije's, Elektrostopanstvo Makedonije's, Elektroprivreda Crne

Gore's, and ZEP's plans to implement a program based on the

recommendations contained in such report, and (C) all such other

information related thereto as the Bank may reasonably, request.

(e) JUGEL shall by December 31, 1977, or such other date as

the Bank may agree, furnish to the Bank, and exchange views with

the Bank on the recommendations regarding JUGEL's organization and

staffing of the consultants referred to in Section 3.02 (b) of

the First Loan Agreement, with the assistance of which the

management study referred to in Part II A and B of the project

described in Schedule 2 to the First Loan Agreement has been

carried out and on the scope of further work to be carried out in

connection with the said studies; promptly thereafter but in any

- 16 -

event no later than July 31, 1978, or such other date as the Bankmay agree, Elektroprivreda BiH, ZEOH Zagreb, ElektrogospodarstvoSlovenije, Elektrostopantsvo Makedonije, Elektroprivreda CrneGore, and ZEP shall cause JUGEL to, and JUGEL shall, carry out aplan of action satisfactory to the Bank to be based on suchrecommendations; and shall thereafter implement such recommen-dations with such modifications as the Bank may reasonablyrequest.

(f) In order to assist Elektroprivreda BiH, ZEOH Zagreb,Elektrogospodarstvo Slovenije, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore, and ZEP in carrying out a managementstudy under Part III of the Project, Elektroprivreda BiH, ZEOHZagreb, Elektrogospodarstvo Slovenije, ElektrostopanstvoMakedonije, Elektroprivreda Crne Gore, and ZEP (acting throughJUGEL) shall, unless the Bank shall otherwise agree by December31, 1977: (A) employ consultants whose qualifications, experienceand terms and conditions of employment shall be satisfactory tothe Bank, such terms and conditions shall be based on the recom-mendations of the consultants referred to in paragraph (b) ofSection 3.02 of the First Loan Agreement and shall provide, interalia, for appropriate recommendations on (i) organization,training, accounting and financial planning procedures, and (ii)establishing adequate management information systems, all forElektroprivreda BiH, ZEOH Zagreb, Elektrogospodarstvo Slovenije,Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, and ZEP;(B) shall, from time to time, exchange views (through JUGEL) withthe Bank on the progress of such management study and shallfurnish in connection therewith all such information as the Bankshall reasonably request, including inter alia, interim and finalreports of such consultants; and (C) shall by December 31, 1978,or such other date as the Bank may agree, submit (through JUGEL)to the Bank the report and the recommendations of said consultantsand a program of implementation based on such recommendations andshall thereafter implement such program in accordance with atimetable satisfactory to the Bank with such modifications as theBank shall reasonably request.

Section 3.03. (a) Each of the Borrowers undertakes to insure,or make adequate provision for the insurance of, the importedgoods to be financed out of the proceeds of its Individual Portionof the Loan against hazards incident to the acquisition, transpor-tation and delivery thereof to the place of use or installation,and for such insurance any indemnity shall be payable in a cur-rency freely usable by such Borrower to replace or repair suchgoods.

- 17 -

(b) Except as the Bank shall otherwise agree, each of theBorrowers, Elektrostopanstvo Makedonije, Elekt,uprivreda CrneGore, ZEP and JUGEL shall cause all goods and services financedout of its Individual Portion of the proceeds of the Loan to beused exclusively for its Individual Part of the Project.

Section 3.04. (a) The Borrowers, ElektrostopanstvoMakedonije, Elektroprivreda Crne Gore and ZEP (acting throughJUGEL) and JUGEL shall furnish to the Bank, for its approval,promptly upon their preparation, the plans, specifications,reports, contract documents and construction and procurementschedules for the Project, and any material modifications thereofor additions thereto, in such detail as the Bank shall reasonablyrequest. The construction and procurement schedules shall providefor the carrying out of the Project in a way that will ensureconcurrent completion of related facilities and the use of theindividual parts thereof as soon as they are completed.

(b) The Borrowers, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore, ZEP and JUGEL: (i) shall maintainrecords adequate to record the progress of the Project (includingthe cost thereof) and to identify the goods and services financedout of the proceeds of the Loan, and to disclose the use thereofin the Project; (ii) shall enable the Bank's accredited represen-tatives to visit the facilities and construction sites included inthe Project and to examine the goods financed out of the proceedsof the Loan and any relevant records and documents; (iii) shallfurnish (acting through JUGEL) to the Bank within thirty calendardays after each calendar quarter a report, of such scope and insuch detail as the Bank shall reasonably request, on the progressof their respective Individual Parts of the Project, during suchquarter; without limitation to the foregoing: (I) each such reportfor the last calendar quarter in each year, shall contain, interalia, (A) updated tables giving data for existing plant and newplant to be constructed in the next five years in the Yugoslavinterconnected power system, (B) the balance of energy and capa-cities for the current year and the following five years, and (C)the overall investment program of all facilities earmarked foroperation in the Yugoslav interconnected power system for thefollowing five years, and (II) each such report of the secondcalendar quarter in each year shall contain monitoring data ontechnical, operational and financial performance for the pastcalendar year to be determined on the basis of criteria acceptableto the Bank; and (iv) (acting through JUGEL) shall furnish to theBank all such information as the Bank shall reasonably request

- 18 -

concerning the Project, the expenditure of the proceeds of the

Loan and the goods and services financed out of such proceeds.

(c) JUGEL shall maintain records adequate for the purposesof Sections 2.10 and 3.04 (b) of this Agreement and 2.05 (b) ofthe Project Agreement.

(d) Each of the Borrowers, Elektrostopanstvo Makedonije, andElektroprivreda Crne Gore, ZEP and JUGEL shall enable the Bank'srepresentatives to examine all .such plants, installations,sites, works, buildings, property and equipment of such Borrower,Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, ZEP andJUGEL, respectively, and any such relevant records and documents,as the Bank may reasonably request.

Section 3.05. Each of the Borrowers, ElektrostopanstvoMakedonije, Elektroprivreda Crne Gore and ZEP shall take or

cause to be taken all such action as shall be necessary to acquire

not later than December 31, 1978, or such other date as the Bankmay agree, all such land and rights in respect of land, includingbut without limitation all such rights of way and easements, asshall be required for the construction (and operation) of the

facilities included in the Project ar.d shall furnish to the Bank,through JUGEL, promptly after such acquisition, evidence satisfac-tory to the Bank that such land and rights in respect of land areavailable for purposes related to the Project.

Section 3.06. In carrying out the works under its IndividualPart of the Project, each of the Borrowers, ElektrostopanstvoMakedonije and Elektroprivreda Crne Gore and ZEP shall employqualified and experienced contractors upon terms and conditionswhich shall include, inter alia, the requirement for each con-tractor to carry out the works under such contract in accordancewith a firm completion schedule for its Individual Part of theProject and provisions under which each of the Borrowers,Elektrostopanstvo Makedonije, and El-.:troprivreda Crne Gore andZEP, as appropriate, which shall be a party to such contract,shall be entitled to appropriate penalties in case of failure bythe contractor to perform in accordance with the provisions ofsuch contract, including without limitation the said completion

schedule for the carrying out of such works.

Section 3.07. Without limitation or restriction to theprovisions of paragraph (e) of Section 3.02 of this Agreement,

JUGEL shall prepare with the assistance of the consultants

- 19 -

referred to in that paragraph (e), or of such other consultantswhose qualifications, experience or terms and conditions ofemployment shall be satisfactory to the Bank, job descriptions,satisfactory to the Bank, for the personnel of the Project Unitreferred to in Schedule 7 to this Agreement, and shall thereafterstaff the Project Unit with qualified and experienced personnel inadequate numbers; without limitation to the foregoing, the ProjectUnit's organization, the qualifications and experience of itsstaff and the number of its staff shall be determined by theCoordinating Committee on the basis of the recommendations of theconsultants referred to in paragraph (b) of Section 3.02 of theFirst Loan Agreement.

ARTICLE IV

Management and Operations of the Borrowers,Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore,

ZEP and JUGEL

Section 4.01. Each of the Borrowers, ElektrostopanstvoMakedonije, Elektroprivreda Crne Gore, ZEP and JUGEL shallat all times carry out its operations, manage its affairs andmaintain its financial position in accordance with sound en-gineering, business, financial and public utility principles andpractices, and under the supervision of experienced and competentmanagement.

Section 4.02. Each of the Borrowers, ElektrostopanstvoMakedonije, Elektroprivreda Crne Gore, ZEP and JUGEL shalltake out and maintain with responsible insurers, or make otherprovisions satisfactory to the Bank for, insurance against suchrisks and in such amounts as shall be consistent with soundpractice.

Section 4.03. Each of the Borrowers, ElektrostopanstvoMakedonije, Elektroprivreda Crne Gore, ZEP and JUGEL shalloperate and maintain its plants, equipment and properties, andfrom time to time make all necessary renewals and repairs thereof,in accordance with sound engineering and public utility practices.

Section 4.04. Each of the Borrowers, ElektrostopanstvoMakedonije, Elektroprivreda Crne Gore, ZEP and JUGEL shall at

- 20 -

all times maintain the right to carry on its operations, and takeall steps necessary to acquire, maintain and renew all rights andfranchises which are necessary or useful in the conduct of itsbusiness.

Section 4.05. The Borrowers, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore and ZEP shall cooperate with each other,with each of the Beneficiaries and with JUGEL in operating andmaintaining the facilities included in the Project, all with aview towards planning and operating their 380 kilovolt powertransmission network as a single and integrated system.

Section 4.06. Except as the Bank may otherwise agree, none ofthe Borrowers, Elektrostopanstvo Makedonije, Elektroprivreda CrneGore, ZEP nor JUGEL shall sell, lease, transfer, assign orotherwise dispose of any of its rights, property or assetsexcept in the ordinary course of its business.

Section 4.07. Each Borrower, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore, ZEP and JUGEL shall by June 30, 1978,or such other date as the Bank may agree, enter into an amendingagreement in form and substance satisfactory to the Bank withthe others and with each of the Beneficiaries on the operationof their power transmission network.

ARTICLE V

Financial Covenants

Section 5.01. Each of the Borrowers, ElektrostopanstvoMakedonije, Elektroprivreda Crne Gore, ZEP and JUGEL shallmaintain records adequate to reflect in accordance with consis-tently maintained appropriate accounting practices its operationsand financial condition.

Section 5.02. Each of the Borrowers, ElektrostopanstvoMakedonije, Elektroprivreda Crne Gore, ZEP and JUGEL shall: (i)have its accounts and financial statements on a consolidated

basis (balance sheets, statements of income and expenses andrelated statements), for each fiscal year audited in accordancewith appropriate auditi-ng principles consistently applied, by theSocial Accounting Service or another competent and experiencedindependent auditing organization acceptable to the Bank; (ii)furnish to the Bank, tirough JUGEL, as soon as available, but inany case not later than four months after the end of each such

- 21 -

year, (A) certified copies of its consolidated financial state-ments for such year as so audited and (B) the report of such auditby said auditors, of such scope and in such detail as the Bankshall have reasonably requested; and (iii) furnish to the Bank,through JUGEL, such other information concerning its consolidatedaccounts and consolidated financial statements and the auditthereof as the Bank shall from time to time reasonably request.

Section 5.03. (a) Each of the Borrowers, ElektrostopanstvoMakedonije, Elektroprivreda Crne Gore and ZEP represent that atthe date of this Agreement no lien exists on any of its assets assecurity for any debt except as otherwise currently reported tothe Bank or stated in writing.

(b) Each of the Borrowers, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore, and ZEP under ke that, except as theBank shall otherwise agree: (i) ii each such Borrower,Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, orZEP shall create any lien on any of its assets as security forany debt, such lien will equally and ratably secure the payment ofthe principal of, and interest and other charges on, the Loan, andin the creation of any such lien express provision will be made tothat effect, at no cost to the Bank; and (ii) if any statutorylien shall be created on any assets of each Borrower,Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore or ZEP assecurity for any debt, such Borrower, ElektrostopanstvoMakedonije, Elektroprivreda Crne Gore, or ZEP shall grant, at nocost to the Bank, an equivalent lien satisfactory to the Bank tosecure the payment of the principal of, and interest and othercharges on, the Loan; provided, however, that the foregoingprovisions of this paragraph shall not apply to: (A) any liencreated on property, at the time of purchase thereof, solely assecurity for the payment of the purchase price of such property;or (B) any lien arising in the ordinary course of banking trans-actions and securing a debt maturing not more than one year afterthe date on which it is originally incurred.

Section 5.04. (a) Commencing with the fiscal year startingJanuary 1, 1978, Elektroprivreda BiH, ZEOH Zagreb,Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore,Elektrogospodarstvo Slovenije and ZEP shall each establish andmaintain rates for the sale of power at such levels as shallprovide revenues sufficient for the purposes set forth in para-graph (b) below, except that, if the Bank shall so agree,Elektroprivreda BiH, ZEOH Zagreb, Elektrostopanstvo Makedonije,

- 22 -

Elektroprivreda Crne Gore, Elektrogospodarstvo Slovenije and ZEP

may obtain part of such revenues through other measures satisfac-

tory to the Bank.

(b) The revenues referred to in paragraph (a) above shall be

sufficient:

(i) to cover in any given year all operating expensesincluding employee compensation (but excludingdepreciation) and debt service requirements forthat year comprising repayment of principal,interest and other charges on debt; and, inaddition

(ii) to produce in each year, after payment of taxes andother contributions provided by law, an amountequivalent to not less than 30% of the cost ofinvestment in power facilities during such year.

(c) For purposes of the foregoing, "investment in power

facilities" shall mean all investments in power facilities ofeach of Elektroprivreda BiH, ZEOH Zagreb, Elektrostopanstvo

Makedonije, Elektroprivreda. Crne Gore, ElektrogospodarstvoSlovenije, or ZEP and investments by each one of them in power

facilities operated by JUGEL including for each one of them, allof its respective organizations of associated labor engaged in

power generation and transmission operations.

(d) For purposes of the foregoing and as part of such

information as may be requested under subparagraph (ii) of

paragraph (a) of Section 9.01 of the General Conditions,

Elektroprivreda BiH, ZEOH Zagreb, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore, Elektrogospodarstvo Slovenije and

ZEP shall, through JUGEL:

(i) prepare and furnish to the Bank, by January 31

of each year, commencing with the year 1978, aforecast operating statement for the current year

giving the operating revenues and operating

expenses for that year, a statement of the tariffsand rates and other assumptions underlying the

forecasts and the measures proposed, if any, toproduce the revenues provided for in paragraph (b)of this Section, and a statement of sources and

applications of funds for the current year;

- 23 -

such statement shall, to the extent applicable, befurnished with appropriate instruments of approvalof such statement by the community of interesthaving jurisdiction over the power sector in eachof the Republics or Autonomous Provinces; and

(ii) prepare and furnish to the Bank all other relevantinformation concerning the steps taken or plannedto be taken by Elektroprivreda BiH, ZEOH Zagreb,Elektrostopanstvo Makedonije, Elektroprivreda CrneGore, Elektrogospodarstvo Slovenije, or ZEP inorder to comply with its obligations under para-graphs (a) and (b) of this Section.

ARTICLE VI

Remedies of the Bank

Section 6.01. For the purposes of Section 6.02 of the GeneralConditions, the following additional events are specified pursuantto paragraph (k) thereof:

(a) A default materially and adversely affecting thecarrying out of the Project or the servicing of the Loan shalloccur in the performance by any party of any obligation, covenantor agreement under any of the agreements, decisions or under-takings referred to in Recital (J) of, and in Recitals (D) through(I) of, the Preamble to, this Agreement.

(b) JUGEL, ZFP, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore, or any of the Borrowers or any of theBeneficiaries, shall have been unable to withdraw any amount ofthe loans to, or other sources of financing made available to,JUGEL, ZEP, Elektrostopanstvo Makedonije, Elektroprivreda CrneGore, such Borrowers or such Beneficiaries, respectively, underthe relevant agreements, decisions or undertakings referred to inparagraph (a) of this Section 6.01, to meet expenditures for theirrespective Individual Parts of the Project as they occur.

(c) Any provision: (i) of any of the agreements or under-takings referred to in paragraphs (a) and (b) of this Section6.01; or (ii) of such Articles of the Statutes and of the

- 24 -

Self-management Agreements of any of the Borrowers,

Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, ZEP, or

of any of the Beneficiaries as may affect in any way whatever such

Borrower's, Elektrostopanstvo Makedonije's, Elektroprivreda Crne

Gore's, ZEP's, or of any of the Beneficiaries' ability to carry

out its Individual Part of the Project or such Borrower's, ZEP's,

Elektrostopanstvo Makedonije's, Elektroprivreda Crne Gore's, or of

any of the Beneficiaries' existence as an independent enterprise;

and (iii) of such Articles of JUGEL's Statutes and Self-management

Agreement as may affect in any way whatever JUGEL's ability to

carry out any of its obligations in the Loan Agreement contained;

or (iv) of the Guarantor's Law on the Union of Yugoslav Electric

Power Industry (as published in the Guarantor's Official Gazette

No. 23 dated May 4, 1972) shall have been amended, suspended,

abrogated or terminated without the prior approval of the Bank.

(d) Any other loan or credit to any of the Borrowers,JUGEL, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, or

ZEP or to any of the Beneficiaries, including any loan made in

accordance with the provisions of any of the agreements, decisions

or undertakings referred to in paragraph (a) above, shall have

become due and payable prior to its agreed maturity pursuant to

the terms thereof.

(e) Any of the Beneficiaries shall have failed to perform

any covenant, agreement or obligation of such Beneficiary under

the Project Agreement.

(f) An extraordinary situation shall have arisen which

shall make it improbable that any of the Beneficiaries will

be able to perform its obligations under the Project Agreement.

(g) Elektroprivreda BiH, ZEOH Zagreb, Elektrogospodarstvo

Slovenije, or any other authority having jurisdiction shall have

taken any action for the dissolution or disestablishment of any of

the Beneficiaries which is one of their constituent member

organizations of associated labor, or for the suspension of its

operations.

(h) A representation made by any of the Beneficiaries in or

pursuant to the Project Agreement, or made by ZEP,

Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore or JUGEL

in or pursuant to the Loan Agreement or any statement furnished in

connection therewith, and intended to be relied upon by the Bank

in making the Loan, shall have been incorrect in any material

respect.

- 25 -

(i) Any action resulting, directly or indirectly, inthe dissolution of, or in the disestablishment of, or in thesuspension or in a modification of the functions, powers andresponsibilities of, any of the Borrowers, ElektrostopanstvoMakedonije, Elektroprivreda Crne Gore, ZEP, JUGEL or any of theBeneficiaries, has been taken; or any action resulting, di-rectly or indirectly, in a modification of the right of any of theBorrowers, Elektrostopanstvo Makedonije, Elektroprivreda CrneGore, ZEP, JUGEL or any of the Beneficiaries to carry on its oper-ations or to control its assets has been taken, or any action re-sulting in a merger of any of the Borrowers, ElektrostopanstvoMakedonije, Elektroprivreda Crne Gore, ZEP, JUGEL or any of theBeneficiaries with any other entity has been taken; unless theBank has been satisfied: (i) that the rights and obligations ofsuch Borrower, Elektrostopanstvo Makedonije, Elektroprivreda CrneGore, ZEP, JUGEL or of such Beneficiary under the Loan Agreementor under the Project Agreement, as appropriate, have been trans-ferred or are to be transferred to an entity which has been dulyestablished and registered under the laws of the Guarantor and ofeach of the Republics or the Autonomous Provinces in which it op-erates with full authority, powers and responsibility to assumethe obligations of such Borrower, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore, ZEP, JUGEL or of such Beneficiaryunder the provisions of the Loan Agreement or under the ProjectAgreement, as appropriate, with such modifications or amplifi-cations as the Bank may reasonably request for the achievementof the purposes of the Loan; (ii) that such entity has assumedthe obligations of such Borrower, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore, ZEP, JUGEL or of such Beneficiary,as appropriate, under the provisions of the Loan Agreement orunder the Project Agreement with such modifi-ations or amplifi-catirns as the Bank may reasonably request for the achievementof the purposes of the Loan; (iii) that such entity will beable to fulfill its obligations under the Loan Agreement, orunder the Project Agreement, with such modifications or ampli-fications as the Bank may reasonably request for theachievement of the purposes of the Loan; (iv) that such entityhas access to adequate financial resources to meet the obliga-tions of such Borrower, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore, ZEP, JUGEL or of such Beneficiary,as appropriate, under the provisions of the Loan Agreement orof the Project Agreement; and (v) that such entity has beenstaffed with staff in adequate numbers with the necessaryqualifications and experience, under the supervision ofqualified and experienced management.

- 26 -

(j) Any of the Borrowers, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore, ZEP, JUGEL or any of the Beneficiariesshall have failed to perform any of their respective covenants,agreements or obligations under the decision referred to in

paragraph (c) of Section 7.01 of this Agreement.

(k) (i) Subject to subparagraph (ii) of this paragraph:

(A) The right of any of the Borrowers,Elektrostopanstvo Makedonije, ElektroprivredaCrne Gore, of ZEP, of JUGEL or of any of theBeneficiaries, as appropriate, to withdraw theproceeds of any of the Suppliers Credits,of the Commercial Loans or of the EIB Loanshall have been suspended, cancelled orterminated in whole or in part, pursuant tothe terms of the agreements providing there-

for, or

(B) any of such Suppliers' Credits, of the Com-,mercial Loans or of the EIB Loan shall have

become due and payable prior to the agreedmaturity thereof.

(ii) Subparagraph (i) of this paragraph shall not

apply if any of the Borrowers, ElektrostopanstvoMakedonije, Elektroprivreda Crne Gore, of ZEP or of

any of the Beneficiaries, as appropriate, estab-lishes to the satisfaction of the Bank that:

(A) such suspension, cancellation, termination orprematuring is not caused by the failure of suchBorrower, Elektrostopanstvo Makedonije,

Elektroprivreda Crne Gore, of ZEP, of JUGEL or

the Beneficiary, as appropriate, to perform any of

its obligations under such agreement, and (B)adequate funds for its Individual Part of the

Project are available to such Borrower,

Elektrostopanstvo Makedonije, Elektroprivreda Crne

Gore, of ZEP, of JUGEL or such Beneficiary, asappropriate, from other sources on terms and condi-

tions consistent with the obligations of such

Borrower, Elektrostopanstvo Makedonije,

Elektroprivreda Crne Gore, of ZEP, of JUGEL or such

Beneficiary under this Agreement or under the

Project Agreement, as appropriate.

- 27 -

(1) Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore,ZEP, or JUGEL shall have failed to perform any of its respectivecovenants, agreements or obligations under the Loan Agreement.

(m) A default shall have occurred under the First LoanAgreement other than in respect of the payment of the principal orinterest or any other payment required thereunder.

(n) The Borrowers, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore, ZEP, the Beneficiaries and JUGEL havefailed to make by June 30, 1979, arrangements satisfactory to theBank to make available to them such proceeds of the CommercialLoans and of the Suppliers Credits as shall be required to meet,as and when needed, the estimated expenditures required for thecarrying out of their respective Individual Parts of the Projectrelated to Part II of the Project and other arrangements satisfac-tory to the Bank to meet such expenditures have not been made.

Section 6.02. For the purposes of Section 7.01 of the GeneralConditions, the following additional events are specified pursuantto paragraph (h) thereof:

(a) any event specified in paragraphs (a), (b), (c), (e),(j), (1) and (m) of Section 6.01 of this Agreement shall occurand shall continue for a period of 60 days after notice thereofshall have been given by the Bank to the Borrowers; and

(b) any event specified in paragraphs (d), (g), (i), (k)(i) (B) of Section 6.01 of this Agreement shall occur.

Section 6.03. The Borrowers, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore, ZEP and JUGEL: (i) represent thatall obligations of the Borrowers, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore, ZEP and JUGEL under the Loan Agreementwhich shall or may require for their performance the approval,cooperation or financial assistance of any governmental author-ities of the Guarantor, including the Republics or Provincesin which the Borrowers, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore, ZEP and JUGEL operate, are undertakenwith the consent and full support of such authorities; and (ii)agree that no action or failure to act by such authoritiesshall excuse the performance of such obligations by the Borrowers,Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, ZEPand JUGEL or limit the remedies of the Bank under this Articlein respect of any default in the performance of such obligations.

- 28 -

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) All agreements referred to in Recital (J) to this Agree-

ment in form and substance satisfactory to the Bank, shall have

been duly executed and authorized or ratified by all necessary

governmental and corporate action and shall be in full force and

effect and, for the purpose of assisting ZEP and Elektroistok in

carrying out their respective Individual Parts of the Project, ZEP

has made arrangements satisfactory to the Bank to make availableto ZEP and Elektroistok out of its own resources an aggregate

amount of not less than 848,000,000 Dinars referred to in Recital

(H) of the Preamble to the Loan Agreement, and such arrangementsare in full force and effect.

(b) The execution and delivery of the Project Agreement on

behalf of each Beneficiary has been duly authorized or ratified by

all necessary corporate and governmental action.

(c) Each of the Borrowers, Elektrostopanstvo Makedonije,

Elektroprivreda Crne Gore, ZEP, each of the Beneficiaries and

JUGEL have passed a decision enabling each one of them and JUGELto meet the requirements of Schedule 7 to this Agreement, and such

decision is in full force and effect and the Project Unit estab-lished under such agreement has become fully operational to the

satisfactAon of the Bank.

Section 7.02. The following are specified as additional

matters, within the meaning of Section 12.02 (c) of the General

Conditions, to be included in the opinion or opinions to be

furnished to the Bank:

(a) that the Agreements referred to in paragraph (a) of

Section 7.01 of this Agreement: (i) have been duly executed andauthorized or ratified by all necessary governmental and corporate

action; (ii) constitute valid and binding obligations of the

parties thereto in accordance with their terms; and (iii) are in

full force and effect;

- 29 -

(b) that the decision referred to in paragraphs (a) and (c)

of Section 7.01 of this Agreement has been duly and validlypassed and is in full force and effect; and

(c) that the Project Agreement has been duly authorizedor ratified by each Beneficiary, and is legally binding uponeach such Beneficiary in accordance with its terms.

Section 7.03. The date, November 30, 1977, is hereby speci-fied for the purpose of Section 12.04 of the General Conditions.

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 forReconstruction and Development

1818 H Street, N.W.Washington, D.C. 20433United States of America

Cable address: Telex:

INTBAFRAD 440098 (ITT)Washington, D.C. 248423 (RCA) or

64145 (WUI)

For the Borrowers, Elektrostopanstvo Makedonije,Elektroprivreda Crna Gore,ZEP and JUGEL:

Zajednica JugoslovenskeElektroprivrede (JUGEL)

Balkanska 13-15Belgrade, Yugoslavia

Cable address:

JUGELBelgrade

- 30 -

IN WITNESS WHEREOF, the parties hereto, acting throughtheir representatives thereunto duly authorized, have caused thisAgreement to be signed in their respective names in the Districtof Columbia, United States of America, as of the day and yearfirst above written.

INTERNATIONAL BANK FORRECONSTRUCTION AND DEVELOPMENT

By Is/ A. David KnoxActing Regional Vice President

Europe, Middle East and North Africa

ELEKTROPRIVREDA BOSNE I HERCEGOVINE-SARAJEVO

ZAJEDNICA ELEKTROPRIVREDNIH ORGANIZACIJAHRVATSKE-ZAGREB

ELEKTROPRENOS - SKOPJE ORGANIZACIJA ZA PRENOSELEKTRICNE ENERGIJE U SASTAVUELEKTROSTOPANSTVA MAKEDONIJE-SKOPJE

ELEKTROPRENOS-TITOGRAD ORGANIZACIJA ZA PRENOSELEKTRICNE ENERGIJE U SASTAVUELEKTROPRIVREDE CRNE GORE-NIKSIC

ELEKTROISTOK - BEOGRAD ORGANIZACIJA ZA PRENOSELEKTRICNE ENERGIJE U SASTAVU ZDRUZENOGELEKTROPRIVREDNOG PREDUZECA-BEOGRAD

ZDRUZENA ELEKTROGOSPODARSKA PODJETJA SLOVENIJE-MARIBOR

ELEKTROSTOPANSTVO MAKEDONIJE-SKOPJE

ELEKTROPRIVREDA CRNE GORE-NIKSIC

ZDRUZENO ELEKTROPRIVREDNO PREDUZECE-BEOGRAD

ZAJEDNICA JUGOSLOVENSKE ELEKTROPRIVREDE-BEOGRAD

By /s/ Naum AckovskiAuthorized Representative

- 31 -

SCHEDULE 1

Withdrawal of the Proceeds of the Loan

1. The table below sets forth the Categories of items to befinanced out of the proceeds of the Loan, the allocation of theamounts of the Loan to each Category and the percentage ofexpenditures for items so to be financed in each Category:

Amount of theLoan Allocated % of(Expressed in Expenditures

Category Dollar Equivalent) to be Financed

(1) Elektroprivreda BiH

(a) Material and 16,930,000 100% of foreignequipment for expenditurestransmission or the ex-fac-facilities tory cost of

locally manu-factured items

(b) Consultants' 220,000 100%services

(2) ZEOH Zagreb



(b) Consultants' 200,000 100% -

services

(3) Elektroprenos Skopje



- 32 -

Amount of theLoan Allocated % of

(Expressed in Expenditures



(4) ElektroprenosTitograd

(a) Material and 9,470,000 100% of foreign

equipment for expenditures

transmission or the ex-fac-

facilities tory cost oflocally manu-factured items

(b) Consultants' 120,000 100%

services

(5) Elektroistok





(b) Consultants' 210,000 100%

services

(6) ElektrogospodarstvoSlovenije





- 33 -

Amount of theLoan Allocated % of

(Expressed in Expenditures



1O

TOTAL 809000,000

-34 -

2. For the purposes of this Schedule, the term "foreign expendi-tures" means expenditures in the currency of any country otherthan the Guarantor and for goods or services supplied fromthe territory of any country other than the Guarantor.

3. The disbursement percentages have been calculated in com-pliance with the policy of the Bank that no proceeds of the Loanshall be disbursed on account of payments for taxes levied by, orin the territory of, the Borrower on goods or services, or onthe importation, manufacture, procurement or supply thereof; tothat end, if the amount of any such taxes levied on or in respectof any item to be financed out of the proceeds of the Loan de-creases or increases, the Bank may, by notice to the Borrower,increase or decrease the disbursement percentage then applicableto such item as required to be consistent with the aforementionedpolicy of the Bank.

4. Notwithstanding the provisions of paragraph 1 above, nowithdrawals 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 Loanor the disbursement percentages set forth in the table in para-graph I above, if the Bank has reasonably estimated that theamount of the Loan then allocated to any sub-category withineither Category (1), Category (2), Category (3), Category (4),Category (5) or Category (6) will be insufficient to finance theagreed percentage of all expenditures in that sub-category, theBank may, by notice to tae Borrowers (through JUGEL): (i) real-locate to such sub-category, to the extent required to meet theestimated shortfall, proceeds of the Loan which are then allocatedto another sub-category within such Category and which in theopinion of the Bank are not needed to meet other expenditures; and(ii) if such reallocation cannot fully meet the estimated short-fall, reduce the disbursement percentage then applicable to

such expenditures in order that further withdrawals under suchsub-category may continue until all expenditures thereunder shallhave been made.

6. If the Bank shall have reasonably determined that theprocurement of any item in any Category is inconsistent withthe procedures set forth or referred to in this Agreement, noexpenditures for such item shall be financed out of the proceedsof the Loan and the Bank may, without in any way restrictingor limiting any other right, power or remedy of the Bank under

- 35 -

the Loan Agreement, by notice to the Borrowers (through JUGEL),cancel such amount of the Loan as, in the Bank's reasonableopinion, represents the amount of such expenditures which wouldotherwise have been eligible for financing out of the proceeds ofthe Loan.

- 36 -

SCHEDULE 2

Description of the Project

PART I: Power Transmission Project

Part I of the Project is the second phase of the construction

of a 380-kV power transmission network consisting of the following

lines and substations, each of which will be carried out by each

of the Borrowers, Elektrostopanstvo Makedonije, Elektroprivreda

Crne Gore, ZEP, JUGEL or the Beneficiaries as specified below:

A. Bosna i Hercegovina

1. The construction of the following 380 kV power trans-

mission lines:

(a) Tuzla-Banja Luka, about 140 km long to be carriedout by Elektroprenos Sarajevo;

(b) Tuzla-Sarajevo Line II, about 135 km long to

be carried out by Elektroprenos Sarajevo.

2. The construction or extension of ehe following sub-

stations:

(a) Construction of one substation with a capacity ofabout 1,000 MVA at or near the city of Sarajevo to

be carried out by Elektroprenos Sarajevo;

(b) Construction of one substation with a capacity of

about 600 MVA at or near the city of Banja Luka to

be carried out by Elektroprenos Sarajevo;

(c) Extension of the Tuzla substation for connectionof the 380-kV power transmission lines constructed

under Part I. A.1 of the Project to be carried

out by Elektroprenos Sarajevo;

(d) Construction of one substation with a capacity

of about 400 MVA at or near the power station at

Trebinje to be carried out by Trebinje.

- 37 -

B. Hrvatska (Croatia)

1. The construction of the Rijeka-Zagreb 380-kV powertransmission line:

(a) of which such portion, about 80 km long, as is tobe located in the service area of Zagreb, is to becarried out by Elektroprenos Zagreb;

(b) of which such portion, about 55 km long, as is tobe located in the service area of Matulji, is to becarried out by Elektroprenos Matulji.

2. The construction or extension of the following sub-stations:

(a) Construction of one substation with a capacity ofabout 1,000 MVA at or near the city of Rijeka tobe carried out by Elektroprenos Matulji;

(b) Construction of one substation with a capacity ofabout 1,000 MVA at or near the city of Split to becarried out by Elektroprenos Split;

(c) Extension of the Zagreb substation for the con-nection of the line to be constructed under Part I.B.1 of the Project to be carried out byElektroprenos Zagreb.

C. Makedonija

1. The construction of the following 380-kV power trans-mission lines:

(a) Negotino-Bitola, about 100 km long, to be carriedout by Elektroprenos Skopje;

(b) Such portion of the Skopje-Nis line as is locatedin the territory of Makedonije, about 60 km long,to be carried out by Elektroprenos Skopje.


- 38 -

(a) Construction of one substation with a capacity ofabout 600 MVA at or near the city of Negotino tobe carried out by Elektroprenos Skopje;

(b) Construction of one substation with a capacity ofabout 600 MVA at or near the city of Bitola to becarried out by Elektroprenos Skopje;

(c) Extension of the substation at Skopje for con-necting the line to be constructed under PartI.C.1(b) to be carried out by Elektroprenos Skopje.

D. Crna Gora (Montenegro)

1. The construction of the Ravna Rijeka - Pljev1ja 380-kVpower transmission line about 55 km long, to be carriedout by Elektroprenos Titograd.

2. The construction of the following substations:

(a) One substation with a capacity of about 600 MVA ator near the city of Titograd to be carried out byElektroprenos Titograd;

(b) One substation with a capacity of about 800 MVA ator near the city of Pljevlja to be carried out byElektroprenos Titograd;

(c) One switching substation at or near the cityof Ravna Rijeka to be carried out by Elektroprenos

Titograd.

E. Srbija (Serbia)


(a) Beograd-Pancevo, about 30 km long, to be carriedout by Elektroistok;

(b) Obrenovac A - Obrenovac B, about 30 km long,to be carried out by Elektroistok;

(c) Obrenovac A - Novi Sad Line II, about 100 kmlong, to be carried out by Elektroistok;

- 39 -

(d) Such portion of the Nis-Skopje line as is locatedin the territory of Srbija (Serbia), about 100 kmlong, to be carried out by Elektroistok.

(2) The construction or extension of the following sub-stations:

(a) Construction of one substation with a capacity ofabout 600 MVA at or near the city of Subotica tobe carried out by Elektroistok;

(b) Construction of one substation with a capacity ofabout 700 MVA at or near the city of Pancevo to becarried out by Elektroistok;

(c) Construction of one switching station at or nearthe site of the Obrenovac B power station to becarried out by Elektroistok;

(d) Extension of the Obrenovac A substation forconnection of the lines to be constructed underPart I.E.1 (b) and (c) of the Project, and additionof a 400 MVA transformer to be carried out byElektroistok;

(e) Extension of the Beograd VIII substation forconnection of the line to be constructed underPart I.E.1 (a) of the Project to be carried out byElektroistok;

(f) Extension of the Nis substation for connectionof the line to be constructed under Part I.E.1 (d)of the Project to be carried out by Elektroistok;

(g) Extension of the Novi Sad III substation forconnection of the line to be constructed under PartI.E.1 (c) of the Project, and addition of a 400 MVAtransformer to be carried out by Elektroistok.

F. Slovenija


- 40 -

(a) Ljubljana-Krsko, about 80 km long, to be carriedout by Ljubljana;

(b) Ljubljana-Kranj, about 35 km long, to be carriedout by Ljubljana;

(c) Divaca - Italy, about 40 km long, to be carriedout by Nova Gorica.


(a) Construction of one substation with a capacity ofabout 300 MVA at or near the city of Kranj to becarried out by Ljubljana;

(b) Construction of one substation with a capacity ofabout 400 MVA at or near the city of Podlog to becarried out by Naribor;

(c) Construction of one switching station at or nearthe city of Divaca to be carried out by NovaGorica;

(d) The extension of the Ljubljana II substationfor connecting the lines to be constructed underPart I.F.1 (a) and (b) of the Project to be carriedout by Ljubljana.

Part II: Dispatch Facilities

Part II of the Project is the construction of the dispatchfacilities required for the operation of all transmission net-works, each of which will be carried out by each of the Borrowers,ZEP, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore orJUGEL as specified below:

A. Bonsna i Hercegovina

The construction of a dispatch center at the new head officeof Elektroprivreda BiH in Sarajevo to be carried out byElektroprivreda BiH.

- 41 -

B. Hrvatska (Croatia)

The construction of one dispatch center at a new buildingin Zagreb to be carried out by ZEOH Zagreb.

C. Makedonija (Macedonia)

The construction of one dispatch center either at the presentlocation or a new location under consideration in Skopje to becarried out by Elektrostopanstvo Makedonije.

D. Crna Gora (Montenegro)

The construction of one dispatch center at the head officeof Elektroprenos Titograd to be carried out by Elektroprivreda,Crne Gore.

E. Srbija (Serbia)

The construction of the following dispatch centers:

(a) One at the present location in Belgrade for the Republicof Serbia to be carried out by ZEP;

(b) One at or near the city of Novi Sad for the autonomousprovince of Vojvodina to be carried out by Elektroistok;

(c) One at or near the city of Pristina for the autonomousprovince of Kosovo to be carried out by Elektroistok.

F. Slovenija (Slovenia)

The construction of one dispatch center at the office ofElektrogospodarstvo at Ljubljana to be carried out byElektrogospodarstvo Slovenije.

G. JUGEL

The construction of one central dispatch center at the

present or new location in Belgrade to be carried out by JUGEL,

Part III: Studies

Part III of the Project consists of the carrying out: (a) byall Borrowers, Elektrostopanstvo Makedonije, Elektroprivreda Crne

- 42 -

Gore and ZEP through JUGEL with the assistance of managementconsultants, of further work in the area of management organi-zation (including extension of the basic management study carriedout under Part II A and B of the project described in Schedule 2to the First Loan Agreement; (b) by Elektroprivreda BiH, ZEOHZagreb, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore,ZEP, Elektrogospodarstvo Slovenije and JUGEL of further work inthe area of least cost development and tariffs; and (c) studiesand preparation of bid documents for dispatch facilities.

Parts I and III of the Project are expected to be completedby December 31, 1981. Part II of the Project is expected to becompleted by December 31, 1983.

- 43 -

SCHEDULE 3

Amortization Schedule

Payment of PrincipalDate Payment Due (expressed in dollars)*

On each March 15 and September 15

beginning March 15, 1981through March 15, 1992 $3,335,000

On September 15, 1992 3,295,000

* To the extent that any portion of the Loan is repayable ina currency other than dollars (see General Conditions,Section 4.02), the figures in this column represent dollarequivalents determined as for purposes of withdrawal.

-44-

Premiums on Prepayment

The following percentages are specified as the premiumspayable on repayment in advance of maturity of any portion ofthe principal amount of the Loan pursuant to Section 3.05 (b)of the General Conditions:

Time of Prepayment Premium

Not more than three yearsbefore maturity 1.65%

More than three years but notmore than six yearsbefore maturity 3.30%

More than six years but notmore than eleven yearsbefore maturity 6.00%

More than eleven years but notmore than thirteen yearsbefore maturity 7.10%

More than thirteen yearsbefore maturity 8.20%

-45-

SCHEDULE 4

Procurement

A. International Competitive Bidding

1. Contracts for the purchase of goods or for civil works shallbe procured in accordance with procedures consistent with thoseset forth in Part A of the "Guidelines for Procurement under WorldBank Loans and IDA Credits" published by the Bank in March 1977(hereinafter called the Guidelines) including the pertinentprovisions of the General Introduction thereto, on the basis ofinternational competitive bidding.

2. Identical material and equipment shall, to the extentpossible, be included in one single bid.

3. Conditions of bid invitation shall not require that foreignfirms enter into compulsory joint ventures with Yugoslav firms.

4. (a) Bid invitations for all contracts shall be advertisedalso in well-known technical journals or trade publicationsoutside Yugoslavia.

(b) Foreign contractors shall not be required to registerin Yugoslavia as a prerequisite for submitting bids. In the eventthat registration shall be necessary after a foreign contractorhas been notified that he will be awarded a contract, the Bor-rowers shall facilitate the registration.

(c) A time period of at least 60 days shall be allowedfor submission of bids.

5. In taking any action required or permitted to be taken underthe provisions set forth or referred to in Section 2.03 of theLoan Agreement or in Section 2.03 of the Project Agreement or inthis Schedule 4 to, the Loan Agreement the Borrowers and theBeneficiaries shall proceed in cooperation with each other andwith JUGEL as set forth in Schedule 7 to the Loan Agreement.

B. Evaluation and Comparison of Bids for Goods; Preference forDomestic Manufacturers

1. For the purpose of evaluation and comparison of bids forthe supply of goods except those to be procured in accordance

- 46 -

with local procedures: (i) bidders shall be required to state

in their bid the c.i.f. (port of entry) price for imported goods,or the ex-factory price for domestically manufactured goods;(ii) customs duties and other import taxes on imported goods,and sales and similar taxes on domestically supplied goods, shallbe excluded; and (iii) the cost to the Borrowers,

Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, ZEP,JUGEL and the Beneficiaries of inland freight and other expendi-tures incidental to the delivery of goods to the place of theiruse or installation shall be included.

2. Goods manufactured in Yugoslavia may be granted a margin ofpreference in accordance with, and subject to, the followingprovisions:

(a) All bidding documents for the procurement of goods

shall clearly indicate any preference which will be granted,the information required to establish the eligibility of a bidfor such preference and the following methods and stages that will

be followed in the evaluation and comparison of bids.

(b) After evaluation, responsive bids will be classifiedin one of the following three groups:

(1) Group A: bids offering goods manufactured inYugoslavia if the bidder shall have established tothe satisfaction of the Borrowers,Elektrostopanstvo Makedonije, Elektroprivreda CrneGore, ZEP, JUGEL and the Beneficiaries and the Bankthat the manufacturing cost of such goods includesa value added in Yugoslavia equal to at least 20%of the ex-factory bid price of such goods.

(2) Group B: all other bids offering goods manufacturedin Yugoslavia.

(3) Group C: bids offering any other goods.

(c) All evaluated bids in each group shall be first comparedamong themselves, excluding any customs duties and other importtaxes on goods to be imported and any sales or similar taxes

on goods to be supplied domestically, to determine the lowestevaluated bid of each group. Such lowest evaluated bids shallthen be compared with each other, and if, as a result of thiscomparison, a bid from group A or group B is the lowest, it shallbe selected for the award.

- 47 -

(d) If, as a result of the comparison under paragraph(c) above, the lowest bid is a bid from group C, all group Cbids shall be further compared with the lowest evaluated bidfrom group A after adding to the c.i.f. bid price of the importedgoods offered in each group C bid, for the purpose of this furthercomparison only, an amount equal to: (i) the amount of customsduties and other import taxes which a non-exempt importer wouldhave to pay for the importation of the goods offered in suchgroup C bid; or (ii) 15% of the c.i.f.-bid price of such goodsif said customs duties and taxes exceed 15% of such price. Ifthe group A bid in such further comparison is the lowest, itshall be selected for the award; if not, the bid from groupC which as a result of the comparison under paragraph (c) isthe lowest evaluated bid shall be selected.

C. Review of Procurement Decisions by the Bank

1. Review of prequalification. The Borrowers, ElektrostopanstvoMakedonije, Elektroprivreda Crne Gore, ZEP and the Beneficiaries,(acting through JUGEL) shall, before qualification is invited,inform the Bank in detail of the procedure to be followed, andshall introduce such modifications in said procedure as the Bankshall reasonably request. The list of prequalified bidders,together with a statement of their qualifications and, whereapplicable, of their eligibility for domestic preference underPart C.1 above and of the reasons for the exclusion of anyapplicant for prequalification and for such eligibility shall befurnished by the Borrowers, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore, ZEP and the Beneficiaries (actingthough JUGEL), and by JUGEL to the Bank for its comments beforethe applicants are notified of the Borrowers', ElektrostopanstvoMakedonije's, Elektroprivreda Crne Gore's, ZEP's, the Benefi-ciaries' (through JUGEL) and of JUGEL's decision, and the Bor-rowers, Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore,ZEP, the Beneficiaries (through JUGEL) and JUGEL shall make suchadditions to, deletions from, or modifications in, the said listas the Bank shall reasonably request.

2. Review of invitations to bid and of proposed awards andfinal contracts:

With respect to all contracts for material and equipment fortransmission facilities estimated to cost the equivalent of$100,000 or more:

- 48 -

(a) Before bids are invited, the Borrowers.,Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, ZEP, theBeneficiaries (acting through JUGEL) and JUGEL shall furnish tothe Bank, for its comments, the text of the invitations to bid andthe specifications and other bidding documents, together with adescription of the advertising procedures to be followed for thebidding, and shall make such modifications in the said documentsor procedures as the Bank shall reasonably request. Any furthermodification to the bidding documents shall require the Bank'sconcurrence before it is issued to the prospective bidders.

(b) After bids have been received and evaluated, theBorrowers, Elektrostopanstvo Makedonije, Elektroprivreda CrneGore, ZEP, the Beneficiaries (acting through JUGEL) and JUGELshall, before a final decision on the award is made, informthe Bank of the name of the bidder to which it intends to awardthe contract and shall furnish to the Bank, in sufficient time forits review, a detailed report on the evaluation and comparison ofthe bids received, and such other information as the Bank shallreasonably request. The Bank shall, if it determines that theintended award would be inconsistent with the Guidelines or thisSchedule, promptly inform the Borrowers, ElektrostopanstvoMakedonije, Elektroprivreda Crne Gore, ZEP, the Beneficiaries(through JUGEL) and JUGEL and state the reasons for such determin-ation.

(c) The terms and conditions of the contract shall not,without the Bank's concurrence, materially differ from thoseon which bids were asked or prequalification invited.

(d) Two conformed copies of the contract shall be furnishedto the Bank promptly after its execution and prior to the sub-mission to the Bank of the first application for withdrawalof funds from the Loan Account in respect of such contract.

3. With respect to each contract to be financed out of theproceeds of the Loan and not governed by the preceding paragraph,the Borrowers, Elektrostopanstvo Makedonije, Elektroprivreda CrneGore, ZEP, the Beneficiaries (acting through JUGEL) and JUGELshall furnish to the Bank, promptly after its execution andprior to the submission to the Bank of the first application forwithdrawal of funds from the Loan Account in respect of suchcontract, two conformed copies of such contract, together with theanalysis of the respective bids, recommendations for award andsuch other information as the Bank shall reasonably request. The

- 49 -

Bank shall, if it determines that the award of the contract wasnot consistent with the Guidelines or this Schedule, promptlyinform the Borrowers, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore, ZEP, the Beneficiaries (through JUGEL)and JUGEL and state the reasons for such determination.

- 50 -

SCHEDULE 5

Modifications of General Conditions

For the purpose of this Agreement, the provisions of theGeneral Conditions are modified as follows:

1. Paragraph 4 of Section 2.01 is amended to read as follows:

"4. The term 'Loan' means the loan provided forin the Loan Agreement and the term 'Individual Portionof the Loan' means the portion of the Loan allocated to aparticular Borrower in accordance with the Loan Agreement."

2. Paragraph 6 of Section 2.01 is amended to read as follows:

"6. The term 'Borrower' means all the parties tothe Loan Agreement to which the Loan is made, except thatin Section 4.05, Section 5.02, Section 5.03, Section 5.07,paragraphs (a), (c), (d), (e), (g), (h) and (i) of Section6.02, paragraphs (c), (e), (f) and (g) of Section 7.01 andSection 10.02, such term means one or more such parties."

3. The following paragraphs 19, 20, 21 and 22 are added toSection 2.01:

"19. The term 'ZEP' means Zdruzeno ElektroprivrednoPreduzece Beograd."

"20. The term 'Elektrostopanstvo Makedonije' meansElektrostopanstvo Makedonije Skopje."

"21. The term 'Elektroprivreda Crne Gore' meansElektroprivreda Crne Gore Niksic."

"22. The term 'JUGEL' means Zajednica JugoslovenskeElektroprivrede, Beograd."

4. Paragraphs (b) and (c) of Section 3.05 are deleted.

5. Paragraph (b) of Section 4.02 is amended by deleting thewords "Section 3.05" and by substituting the words "paragraph (b)of Section 2.09 of the Loan Agreement".

6. Section 6.01 is deleted.

- 51 -

7. The words "Elektrostopanstvo Makedonije, Elektroprivreda CrneGore, ZEP or JUGEL" are added after the word "Borrower" inSections 10.01 and 10.02 and the words "and ElektrostopanstvoMakedonije, Elektroprivreda Crne Gore, ZEP and JUGEL" are addedafter the word "Borrower" in paragraphs (a) and (b) of Section9.01, Section 10.04, paragraphs (a) and (b) of Section 12.01(except that on the second line of such paragraph (b) suchwords are added after the words "(not being a member of theBank)" and in paragraph (a) of Section 12.02.

- 52 -

SCHEDULE 6

Actions to be taken by each of the Borrowers and by JUGEL inaccordance with the provisions set forth or referred to in Section2.10 of the Loan Agreement:

1. (a) Upon any Borrower's respective written request, JUGELshall promptly take the following action with respect to suchBorrower's Individual Portion of the Loan:

(i) make applications for withdrawal from the LoanAccount and pay to such Borrower, or on its order,the amounts so withdrawn;

(ii) request the Bank to enter into anay special com-mitments in accordance with the provisions ofSection 5.02 of the General Conditions;

(iii) give the Bank notice of any repayment in advance ofmaturity in accordance with the provisions ofparagraph (b) of Section 2.09 of the Loan Agree-ment;

(iv) request the Bank to purchase any currency needed bysuch Borrower for payment of principal, interestand other charges, as provided by Section 4.05 ofthe General Conditions;

(v) give the Bank any notice of cancellation in ac-

cordance with the provisions of paragraph (d) ofSection 2.09 of the Loan Agreement; and

(vi) in general, take any action required or permittedto be taken by such Borrower in accordance with the

provisions of the General Conditions and the LoanAgreement referred to in Section 2.10 of the LoanAgreement.

(b) Any request submitted to JUGEL in accordance with theprovisions of paragraph (a) above shall be in such form, and

include such supporting documentation, as JUGEL shall determine inaccordance with the provisions of the Loan Agreement.

2. All payments to be made to the Bank by any of the Borrowersshall be made through JUGEL, provided that for such purpose:

- 53 -

(a) JUGEL shall open an account with a Yugoslav bank to be

used exclusively for making such payments (hereinafter called the

Special Account), the necessary details about such Special

Account to be communicated to all Borrowers;

(b) each of the Borrowers shall make any such payment into

the Special Account in such currency or currencies, and not later

than ten working days before such date, as such payments have to

be made to the Bank in accordance with the provisions of the Loan

Agreement;

(c) not later than 15 working days before any payment is to

be made into the Special Account in accordance with the provisions

of paragraph (b) above, JUGEL shall advise the respective Bor-

rowers of the currency or currencies of payment and of the payment

due date; and

(d) using the funds paid by such Borrower into the Special

Account, JUGEL shall promptly make to the Bank the payments

to be made by such Borrower.

3. JUGEL shall: (i) maintain qualified and experienced staff in

sufficient numbers for the carrying out of the actions to be

carried out by it on behalf of the Borrowers in accordance with

this Schedule 6; (ii) periodically determine its costs and

expenditures incurred in carrying out such actions; and (iii)

charge each of the Borrowers with such costs and expenditures in

the same approximate proportion as its Individual Portion of the

Loan bears to the total amount of the Loan. Each of the Borrowers

shall promptly reimburse JUGEL for its share of such costs and

expenditures as so determined by the Coordinating Committee.

- 54-

SCHEDULE 7

Cooperation between the Borrowers, ElektrostopanstvoMakedonije, Elektroprivreda Crne Gore, ZEP, the Beneficiaries andJUGEL in carrying out the Project (see Section 3.01 of, andparagraph 5 of Schedule 4 to, the Loan Agreement):

1. The Borrowers, Elektrostopanstvo Makedonije, ElektroprivredaCrne Gore, ZEP, the Beneficiaries and JUGEL shall reorganizeand maintain the Committee referred to in paragraph 1 of Schedule7 to the First Loan Agreement to be named the CoordinatingCommittee for Construction and Operation of the 380 kV PowerTransmission System of Yugoslavia (Komitet za koordinacijuizgradnje i funkcionisanje 380 kV sistema Jugoslavije) (herein-after called the Coordinating Committee) for the purpose ofensuring their mutual cooperation in carrying out the Project andin operating the 380 kV power transmission system of Yugoslavia,all as more fully provided hereinafter.

2. Elektroprivreda BiH, ZEOH Zagreb, ElektrostopanstvoMakedonije, Elektroprivreda Crne Gore, ZEP and ElektrogospodarstvoSlovenije shall each promptly appoint and thereafter maintain onedelegate and one alternate to replace the delegate in case of hisinability to perform his functions to be its representative in theCoordinating Committee and Elektroistok, Elektroprenos Skopje andElektroprenos Titograd, each of the Beneficiaries and JUGEL shallmaintain one delegate and one alternate to replace the delegate incase of his inability to perform his functions to be its represen-tative in the Coordinating Committee, and the Bank shall beinformed of the technical qualifications of each such delegateand alternate.

3. JUGEL's representative shall be the Chairman of the Coor-dinating Committee. He shall call meetings of the CoordinatingCommittee as frequently as necessary, either at his own initiativeor if one or more other representatives request him to do so.

4. JUGEL shall establish and thereafter maintain at JUGEL'sheadquarters a project unit (hereinafter called the Project Unit)which shall be designated by the Coordinating Committee to act inits name and on its behalf in matters related to, inter alia,the procurement of material and equipment, the coordination andsupervision of the carrying out of the Project, and of the projectdescribed in Schedule 2 to the First Loan Agreement. The ProjectUnit shall be organized and supported by such full-time staff

- 55 -

provided by JUGEL as shall be determined by the CoordinatingCommittee on the basis of the recommendations of the studyreferred to in Section 3.07 of the Loan Agreement, including suchmodifications as the Bank shall reasonably request. JUGEL shallperiodically determine its costs and expenditures incurred inoperating the Project Unit and shall charge each of the Borrowers,Elektrostopanstvo Makedonije, Elektroprivreda Crne Gore, ZEP andeach of the Beneficiaries with such costs and expenditures in thesame approximate proportion as the aggregate cost of its Indi-vidual Part of the Project and of its Individual Part of theproject described in Schedule 2 to the First Loan Agreementbears to the total cost of Parts I and II of the Project and ofPart I of the Project described in Schedule 2 to the First LoanAgreement. Each of the Borrowers, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore, ZEP and each of the Beneficiaries shallpromptly reimburse JUGEL for its share of such costs and expendi-tures as so determined by the Coordinating Committee.

5. The Project Unit shall be headed by a manager experiencedin power transmission construction and procurement who shallappropriately report to the Chairman of the Coordinating Com-mittee. Such manager of the Project Unit shall organize theProject Unit, shall supervise its day-to-day operations and shallsubmit all correspondence for signing by the Chairman of theCoordinating Committee or, in his absence, to his alternate.

6. The Coordinating Committee and the Project Unit shall obtainsuch advice of such experts and technical specialists (includingthe consultants referred to in Section 3.02 of the Loan Agreementand in Section 2.02 of the Project Agreement) as provided by theLoan Agreement or the Project Agreement or otherwise deemednecessary by the Coordinating Committee and, in appropriate cases,in consultation with the Bank.

7. The Coordinating Committee shall, in addition to the func-tions referred to in paragraph 6 of Schedule 7 to the FirstLoan Agreement, have the functions set forth below as well as anyother functions the Borrowers, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore, ZEP and the Beneficiaries may assignto it:

(a) to prepare detailed coordinating guidelines satisfactoryto the Bank;

- 56 -

(b) to prepare (whenever appropriate with the assistance ofthe consultants referred to in Section 3.02 of the Loan Agreementand in Section 2.02 of the Project Agreement) and to approve theplans, detailed designs and technical specifications of Parts Iand II of the Project;

(c) to take any action required or permitted to be taken bythe Borrowers, Elektrostopanstvo Makedonije, Elektroprivreda CrneGore, ZEP and the Beneficiaries, as appropriate, in accordancewith the provisions set forth or referred to in Section 2.03 of,and Schedule 4 to, the Loan Agreement, in particular and withoutlimitation:

(i) to schedule the preparation, request evaluation ofbids and awards of contracts;

(ii) to prepare the bid documents;

(iii) to ask for bids;

(iv) to evaluate bids, to review the Borrowers'Elektrostopanstvo Makedonije's, ElektroprivredaCrne Gore's, ZEP's and the Beneficiaries', asappropriate, proposals about making the award andto forward such proposals to the Bank, all asrequired by the provisions set forth in paragraph 1(b) of Schedule 4 to the Loan Agreement;

(v) to advise the winning bidder about the award andto arrange for the signing of the contracts betweenthe respective Borrowers, ElektrostopanstvoMakedonije, Elektroprivreda Crne Gore, ZEP and theBeneficiaries, as appropriate, and the winningbidder;

(vi) to coordinate delivery schedules with the respec-tive suppliers and the Borrowers, ElektrostopanstvoMakedonije, Elektroprivreda Crne Gore, ZEP and theBeneficiaries, as appropriate; and

(vii) to carry out, on behalf of the respectiveBorrowers, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore, ZEP and the Benefi-ciaries, as appropriate, any correspondence withbidders and suppliers.

- 57 -

(d) to review and to coordinate each of the Borrowers',Elektrostopanstvo Makedonije's, Elektroprivreda Crne Gore's, ZEP'sand the Beneficiaries', and JUGEL's as appropriate, designs andwork plans for the construction and equipping of the facilitiesincluded in the Project, including preparation of a critical pathdiagram, and to establish common standards for the supervision ofsuch construction and equipping;

(e) to establish the rules and standards for the testingand commissioning of the facilities included in the Project;

(f) to schedule Project works to ensure that line sectionsand substations to be carried out under the Project are completedin accordance with Section 3.04 (a) of this Agreement;

(g) to establish time schedules and decision-making proce-dures for the carrying out of the studies referred to underPart III of the Project; and

(h) to prepare and provide to the Bank, the reports referredto in paragraphs (a) and (b) of Section 3.04 of this Agreementand such additional documents as the Bank may reasonably request.

8. Each Borrower shall appoint a Project Coordinator for Projectworks to be carried out in its respective Republic.

9. The Project Unit manager referred to in paragraph 5 ofthis Schedule or such other person or persons designated by suchmanager, shall visit each Borrower, Elektrostopanstvo Makedonije,Elektroprivreda Crne Gore, ZEP and each Beneficiary at regularintervals but in any event not less than once in every sixweeks.

public disclosure authorized conformed copy loan ......prenos elektricne energije u sastavu...

Documents