LOAN NO.: 4/127
AGREEMENT dated Muharam 27, 1401 A.H. corresponding to December
5, 1980 A.D. between:
1 THE REPUBLIC OF CHINA (hereinafter called the Borrower), repr-
esented by H. E. C. C. Chang, Minister of Finance;
and
2 THE SAUDI FUND FOR DEVELOPMENT, Riyadh, Kingdom of Saudi Arab-
ia(hereinafter called the Fund), represented by H. E. Sheikh
Mohammad Aba Alkhail, Minister of Finance and National Economy
and Chairman of the Board of Directors of the Fund.
PREAMBLE
WHEREAS the Borrower has requested the Fund to grant it a loan
to assist in the financing of the Transmission and Substations
project, described in Schedule (2) to this Agreement (hereinaft-
er called the project);
WHEREAS the Project will be carried out by Taiwan Power Company
with the Borrower's assistance, and as part of such assistance,
the Borrower shall make available to the company the proceeds of
the Loan as hereinafter provided;
WHEREAS the purpose of the Fund is to assist developing countri-
es in developing their economies and to provide them with loans
necessary to the execution of their development projects and pr-
ograms;
HEREAS the Fund is convinced of the importance of the Project a-
nd its beneficial effects for the economic development of the f-
riendly people of the Republic of China; and
WHEREAS the Board of Directors of the Fund has agreed, in view
of the foregoing, by its Resolution No. 5/30/279 dated 22.11.14-
00 A. H. to grant the Borrower a loan on the terms and conditio-
ns set forth in this Agreement.
NOW THEREFORE, the parties hereto hereby agree as follows:
ARTICLE Ⅰ
General Conditions; Definitions
Section 1.01. The parties to this Agreement accept all the prov-
isions of the General Conditions Applicable to Loan Agreements
of the Fund issued by Resolution of the Board of Directors of t-
he Fund No. 11/14 dated Rajab 29, 1396 A. H., corresponding to
July 26, 1976 A.D., with the same force and effect as if they
were fully set forth herein (said General Conditions Applicable
to Loan Agreements of the Fund being hereinafter called the Gen-
eral Conditions.)
Section 1.02. Wherever used in this Agreement, unless the conte-
xt otherwise requires, the several terms defined in the General
Conditions and in the Preamble to this Agreement have the respe-
ctive meanings therein set forth and the following additional t-
erms have the following meanings:
(a) "The Company" means Taiwan Power Company, a Company establi-
shed under the Borrower's Company Law of December 30, 1929
Article 387.
(b) "Subsidiary Loan Agreement" means the agreement to be enter-
ed into between the Borrower and the Company pursuant to the
provisions of Section 3.01 (b) of this Agreement, as the sa-
me may be amended from time to time.
ARTICLE Ⅱ
The Loan
Section 2.01. The Fund agrees to lend to the Borrower, on the t-
erms and conditions in the Loan Agreement set forth or referred
to, a loan in an amount of One hundred forty nine million and f-
our hundred thousand (149,400,000) Saudi Riyals.
Section 2.02. The amount of the Loan may be withdrawn by the Bo-
rrower from the Loan Account in accordance with the provisions
of Schedule I to this Agreement, as such Schedule may be amended
from time to time by agreement between the Fund and the Borrower
, for expenditures made (or, if the Fund shall so agree, to be
made) in respect of the reasonable cost of the goods and servic-
es required for the Project and to be financed out of the proce-
eds of the Loan.
Section 2.03. The Borrower shall cause the Company to apply the
proceeds of the Loan exclusively to financing the reasonable co-
st of the goods required for the carrying out of the Project. T-
he specific goods to be financed out of the proceeds of the Loan
and the methods and procedure for the procurement thereof, shall
be determined by agreement between the Fund and the Borrower, s-
ubject to modification by further agreement between them. The B-
orrower shall cause the Company to obtain Fund's approval before
awarding the contracts to be financed out of the proceeds of the
Loan and before effecting any modification thereto in the future
.
Section 2.04. the Closing Date shall be June 30, 1988 or such l-
ater date as shall be agreed between the Fund and the Borrower.
Section 2.05. The Borrower shall pay a loan charge at the rate
of four and half (4.5%) per annum on the principal amount of the
Loan withdrawn and outstanding from time to time.
Section 2.06. Loan Charge and other charges shall be payable se-
mi-annually on March 15 and September 15, in each year.
Section 2.07. The term of the Loan is eighteen years including a
three-year grace period. The Borrower shall repay the principal
amount of the Loan in accordance with the Amortization Schedule
set forth in Schedule (3) to this Agreement.
ARTICLE Ⅲ
Execution of the Project
Section 3.01. (a) The Borrower shall carry out the Project thro-
ugh the Company with due diligence and efficiency and in confor-
mity with appropriate engineering, financial and public utility
practices and shall provide, or cause to be provided, promptly
as needed, the funds the facilities, services and other resourc-
es required for the purpose.
(b) the Borrower shall relend the proceeds of the Loan to the C-
ompany under a Subsidiary Loan Agreement to be entered into
between the Borrower and the Company, under terms and condi-
tions which shall have been approved by the Fund. The Subsi-
diary Loan Agreement shall provide for the execution by the
Company of all the obligations and conditions which the Bor-
rower undertakes by virtue of the provisions of this Agreem-
ent to cause the Company to comply with.
(c) The Borrower shall exercise its rights under the Subsidiary
Loan Agreement in such a manner as to protect the interests
of the Borrower and the Fund and to accomplish the purposes
of the Loan and, except as the Fund shall otherwise agree,
the Borrower shall not assign, nor amend, abrogate, or waive
the Subsidiary Loan Agreement or any provisions thereof.
(d) Without limiting the generality of paragraph (a) of this Se-
ction, the Borrower shall make available or cause to be made
available to the Company promptly as needed, all other funds
which shall be required for the carrying out of the Project
(including any funds that may be required to meet any incre-
ase in the cost beyond the estimated cost of the Project at
the time of signing this Agreement), all such sums to be ma-
de available on terms and conditions acceptable to the Fund.
Section 3.02. In carrying out the Project, the Borrower sha-
ll cause the Company to employ qualified and experienced Co-
ntractors upon terms and conditions acceptable to the Fund.
Section 3.02. In carrying out the Project, the Borrower shall c-
ause the Company to employ qualified and experienced Contractors
upon terms and conditions acceptable to the Fund.
Section 3.03. The Borrower shall cause the Company to insure, or
make adequate provision for the insurance of, the imported goods
to be financed out of the proceeds of the Loan against hazards
incident to the acquisition, transportation and delivery thereof
to the place of use or installation, and for such insurance any
indemnity shall be payable in a currency freely usable by the C-
ompany to replace or repair such goods.
Section 3.04. The Borrower shall ensure that all goods and serv-
ices financed out of the proceeds of the Loan shall be used exc-
lusively for the Project.
Section 3.05. The Borrower shall cause the Company to furnish to
the Fund, promptly upon their preparation, the plans, models, s-
pecifications, reports, contract documents, construction and pr-
ocurement schedules, for the Project, and any modifications the-
reof or additions thereto, in such detail as the Fund shall req-
uest, as well as photographs of the completed Project in the ap-
propriate size.
Section 3.06. (a) The Borrower shall cause the Company to: (i)
maintain records adequate to record the progress of the Project
(including the cost thereof) and to identify the goods and serv-
ices financed out of the proceeds of the Loan, and to disclose
the use thereof in the Project; (ii) enable the Fund's accredit-
ed representatives to visit the facilities and construction sit-
es included in the Project and to examine the goods financed out
of the proceeds of the Loan and any relevant records and docume-
nts; and (iii) furnish to the Fund all such information as the
Fund shall request concerning the Project, the expenditure of t-
he proceeds of the Loan and the goods and services financed out
of such proceeds.
(b) The Borrower shall cause the Company to enable the Fund's r-
epresentatives to examine all plants, installations, sites
works, buildings, property and equipment of the Company and
any relevant records and documents.
ARTICLE Ⅳ
Particular Covenants
Section 4.01. The Borrower shall, at all times, cause the Compa-
ny to maintain its corporate existence and right to carry on its
operations, and to take all steps necessary to acquire, maintain
and renew all rights, powers privileges, concessions and franch-
ises which are necessary or useful in the conduct of its busine-
ss.
Section 4.02. The Borrower shall cause the Company to operate a-
nd maintain its plants, equipment and property, and to make, fr-
om time to time, all necessary renewals and repairs thereof, all
in accordance with appropriate engineering and public utility p-
ractices.
Section 4.03. The Borrower shall, at times, cause the Company to
carry on its operations, manage its affairs, maintain its finan-
cial position and plan the future expansion of its electric pow-
er system, ail in accordance with appropriate business, financi-
al and public utility principles and practices and under the su-
pervision of experienced and competent management.
Section 4.04 The Borrower shall cause the Company to take out a-
nd maintain with responsible insurers, or make other provision
satisfactory to the Fund for insurance against such risks and in
such amounts as shall be consistent with appropriate public uti-
lity practices.
Section 4.05. The Borrower shall cause the Company to maintain
records adequate to reflect in accordance with consistently mai-
ntained appropriate accounting practices its operations and fin-
ancial condition.
Section 4.06. The Borrower shall cause the Company to; (i) have
its accounts and financial statements (balance sheets, statemen-
ts of income and expenses and related statements) for each fisc-
al year audited, in accordance with appropriate auditing princi-
ples consistently applied, by independent auditors acceptable to
the Fund; (ii) furnish to the Fund as soon as available, but in
any case not later than six months after the end of each year,
(A) certified copies of its financial statements for such year
as so audited and (B) the report of such audit by said auditors,
of such scope and in such detail as the Fund shall have request-
ed; and (iii) furnish to the Fund such other information concer-
ning the accounts and financial statements of the Company and t-
he audit thereof as the Fund shall from time to time request.
Section 4.07. (a) The Borrower and the Fund confirm their agree-
ment that no other external debt shall enjoy any priority over
the loan by war of a lien created on governmental assets. To th-
at end, the Borrower undertakes that, except as the Fund shall
otherwise agree, if any lien shall be created on any assets of
the Borrower as security for any external debt, such lien will
ipso facto and at no cost to the Fund equally and ratably secure
the payment of the principal of the Loan, the Loan Charge and o-
ther charges on the Loan and that in the creation of any such l-
ien express provision will be bade to that effect.
(b) The undertaking provided for in paragraph (a) of this Secti-
on shall not apply to:
(i) any lien created on property, at the time of purchase t-
hereof, solely as security for the payment of the purch-
ase price of such property;
(ii) any lien on commercial goods to secure a debt maturing
not more than one year after the date on which it is or-
iginally incurred and to be paid out of the proceeds of
the sale of such commercial goods; or
(iii) any lien arising in the ordinary course of banking tran-
sactions and securing a debt maturing not more than one
year after its date.
(c) As used in this Section, the term "governmental assets" mea-
ns assets of the Borrower, of any political or administrati-
ve subdivision thereof and of any entity owned or controlled
by, or operating for the account or benefit of, the Borrower
or any such subdivision, including gold and other foreign e-
xchange assets held by any institution performing the funct-
ions of a central bank or exchange stabilization fund, or s-
imilar functions for the Borrower.
Section 4.08. The Borrower shall take all such actions as s-
hall be necessary to acquire as and when needed all such la-
nd and rights in respect of land as shall be required for c-
arrying out of the Project.
Section 4.09. The Borrower undertakes to provide the Fund w-
ithin three months of signing this Agreement with a written
statement guaranteeing the provision of all the necessary f
unds for the completion of the Project from sources and upon
terms and conditions that are acceptable to the Fund.
ARTICLE Ⅴ
Remedies of the Fund
Section 5.01. For the purposes of Section 6.02 of the General C-
onditions, the following additional events are specified pursua-
nt to paragraph (f) thereof:
(a)
(i) Subject to subparagraph (ii) of this paragraph:
(A) The right of the borrower or the Company to withdraw the
proceeds of any loan made to the Borrower or the Company
for the financing of the Project shall have been suspend-
ed, cancelled or terminated in whole or in part, pursuant
to the terms of the Agreement providing therefor; or
(B) any such loan shall have become due and payable prior to
the agreed maturity thereof.
(ii) Subparagraph (i) of this paragraph shall not apply if the
Borrower establishes to the satisfaction of the Fund that
(A) such suspension, cancellation, termination or premat-
uring is not caused by the failure of the Borrower or the
Company, as the case may be, to perform any of their res-
pective obligations under such agreement, and (B) adequa-
te funds for the Project are available to the Borrower or
the Company from other sources on terms and conditions c-
onsistent with the obligations of the Borrower under this
Agreement.
(b) A substantial change in the Borrower's Company Law of 1929
under which the Company was established and operating, shall
have occurred, which, in the judgement of the Fund, shall m-
aterially and adversely affect the ability of the Company to
carry out or operate the Project.
Section 5.02. For the purposes of Section 7.01 of the General C-
onditions, the following events are specified pursuant to parag-
raph (d) thereof, namely, any event specified in paragraph (a)
(i) and (B) or paragraph (b) of Section 5.01 of this Agreement
shall occur.
ARTICLE Ⅵ
Effective date; Termination
Section 6.01. The following event is specified as an additional
condition to the effectiveness of the Loan Agreement within the
meaning of Section 12.01 (b) of the General Conditions:
That the execution and delivery of the Subsidiary Loan Agreement
on behalf of the Borrower and the Company, respectively, have b-
een duly authorized or ratified by all necessary governmental a-
nd corporate action.
Section 6.02. The following is specified as an additional matte-
r, within the meaning of Section 12.02 (b) of the General Condi-
tions, to be included in the Legal Opinion or opinions to be fu-
rnished to the Fund:
That the Subsidiary Loan Agreement has been duly authorized or
ratified by, and executed and delivered on behalf of, the Borro-
wer and the Company, respectively, and is legally binding upon
the Borrower and the Company in accordance with its terms.
Section 6.03. The date March 5, 1981 is hereby specified for the
purposes of Section 12.04 of the General Conditions.
ARTICLE Ⅶ
Representative of the Borrower; Addresses
Section 7.01. The Minister of Finance of the Borrower is design-
ated as representative of the Borrower for the purposes of Sect-
ion 11.03 of the General Conditions.
Section 7.02. The following addresses are specified for the pur-
poses of Section 11.01 of the General Conditions.
For the Fund:
Saudi Fund for Development
P. O. Box 1887
Riyadh
Kingdom of Saudi Arabia.
Cable Address:
SAUDI FUND FOR DEVELOPMENT
RIYADH
KINGDOM OF SAUDI ARABIA
Telex:
201145 SUNDOQ SJ
For the Borrower:
Ministry of Finance
2, Ai Kuo West Road
Taipei, Taiwan 107
Republic of China
Cable Address:
MINISTRY OF FINANCE
TAIPEI, TAIWAN
REPUBLIC OF CHINA
Telex:
11840 MOF TAIPEI
IN WITNESS WHEREOF, the parties hereto, acting through their re-
presentatives thereunto duly authorized, have caused this Agree-
ment to be signed in their respective names, in Taipei, Republic
of China, as of the day and year first above written, in two co-
unterparts in the Arabic language, each of which shall be an or-
iginal.
For
The Republic China
By C. C. Chang
Minister of Finance and
Authorized Representative.
For
The Saudi Fund for Development
By Sheikh Mohammad Aba Alkhail
Minister of Finance and
National Economy and Chairman
of the Board of Directors of
the Fund.
SCHEDULE (1)
Withdrawal of the Proceeds of the Loan
A. The table below sets forth the Categories of items to be fin-
anced out of the Proceeds of the Loan, the allocation of the
amounts of the Loan to each Category and the percentage of e-
xpenditure for items to be financed in each Category:
───────────────────────────────
Amount Allocated % of foreign
C`tegory (Expressed in expenditure
Saudi Riyals) to be financed
───────────────────────────────
1 Power Circuit Breakers 92,500,000 100
Parts 2,4 and 6 of the
Project Description
2 Switchgear Equipment 43,000,000 100
Parts 2,4 and 6 of the
Project Description
3 Contingencies 13,900,000
───────────────────────────────
Total: 149,400,000
───────────────────────────────
B. For the purposes of this Schedule, the term "foreign expendi-
tures" means expenditures for goods produced in, or services
supplied form, the territories, and in the currency, of any
country other that the Borrower's.
C. Notwithstanding the provisions of paragraph 1 above, no with-
drawals shall be made in respect of:
(a) expenditures made prior to the date of this Agreement;
(b) payments for taxes imposed under the laws of the Borrower
or laws in effect in its territories on goods or service-
s, or on the importation, manufacture of supply thereof.
SCHEDULE (2)
Description of the Project
The Project is to extend various transmission lines and substat-
ions facilities to cover Taiwan Power System requirements by 19-
87, and it consists of the following parts:
PART (1): 345 KV Transmission Lines
PART (2): High Voltage Substations*
PART (3): 161 KV Transmission Lines
PART (4): Primary Substations*
PART (5): Subtransmission Lines
PART (6): Secondary Substations*
PART (7): Power Control Communication System
PART (8): Construction Tools.
Details of above Parts are shown in Annex (1) of this Schedule.
The total cost of the project is estimated at US$1,081,939,000
the equivalent of approximately 3,254,931,000 Saudi Riyals.
The Project is expected to be completed by December 1987.
ANNEX (1) OF SCHEDULE (2)
The Fund will finance 100% of the foreign component required for
the procurement of the following major equipment for the early
stage of the Project:
────────────────────────────────
Estimated Cost in
Item Quantity Saudi Riyals
────────────────────────────────
(1) Power Circuit Breakers: ┐
(A) 345 KV, 4000 A, 63 KA 37 │
(B) 161 KV, 2000 A, 50 KA 100 │
(C) 69 KV, 2000 A, 37 KA 135 │
(D) 69 KV, 2000 A, 37 KA, for 12 │
capacitor switching │ 92,500,000
(E) 69 KV, 2000 A, 26 KA, for 12 │
capacitor switching │
(F) 69 KV, 1200 A, 19 KA 160 │
(G) 69 KV, 1200 A, In- door d- 35 │
rawout type ┘
(II) Switchgear Equipment: ┐
(A) 13.8 KV, 1600 A, 12 KA Me- 10 │
tal-clad │
(B) 23 KV, 2000 A, 12 KA, Met- 3 │
al-clad │
(C) 69 KV, 1200 A, 26 KA, SF6 4 │
gas insulated │
(D) 161 KV, 2000 A, 40 KA, SF6 3 │ 43,000,000
gas insulated │
(E) 161 KV, 4000 A, 50 KA, SF6 1 │
gas insulated │
(F) 161 KV, 4000 A, 50 KA, co- 4 │
mbiined SF6 gas insulated │
(G) 161 KV, 2000 A, 50 KA, co- 1 │
mbiined SF6 gas insulated ┘
────────────────────────────────
Total: 135,500,000
────────────────────────────────
───────
Part No. in
Schedule (2)
───────
(2)
(2)&(4)
(2)&(4)
(4)
(6)
(6)
(6)
(6)
(4)
(4)&(6)
(4)
(4)
(2)&(4)
(2)
───────
───────
SCHEDULE (3)
Amortization Schedule
────────────────────────────
Installment Date of Payment of Principal
No. Payment (Expressed in Saudi
Riyals)
────────────────────────────
1 March 15,1984 4,980,000
2 September 15, 1984 4,980,000
3 March 15,1985 4,980,000
4 September 15, 1985 4,980,000
5 March 15,1986 4,980,000
6 September 15, 1986 4,980,000
7 March 15,1987 4,980,000
8 September 15, 1987 4,980,000
9 March 15,1988 4,980,000
10 September 15, 1988 4,980,000
11 March 15,1989 4,980,000
12 September 15, 1989 4,980,000
13 March 15,1990 4,980,000
14 September 15, 1990 4,980,000
15 March 15,1991 4,980,000
16 September 15, 1991 4,980,000
17 March 15,1992 4,980,000
18 September 15, 1992 4,980,000
19 March 15,1993 4,980,000
20 September 15, 1993 4,980,000
21 March 15,1994 4,980,000
22 September 15, 1994 4,980,000
23 March 15,1995 4,980,000
24 September 15, 1995 4,980,000
25 March 15,1996 4,980,000
26 September 15, 1996 4,980,000
27 March 15,1997 4,980,000
28 September 15, 1997 4,980,000
29 March 15,1998 4,980,000
30 September 15, 1998 4,980,000
────────────────────────────
Total: 149,400,000
────────────────────────────
* See Annex (1) of Schedule (2) for specific list of goods fina-
nced by this Loan Agreement from these Parts.