LOAN NUMBER 3954-CO
Guarantee Agreement
(Power Market Development Project)
between
REPUBLIC OF COLOMBIA
and
INTERNATIONAL BANK FOR RECONSTRUCTION
AND DEVELOPMENT
Dated            , 1996


LOAN NUMBER 3954-CO
GUARANTEE AGREEMENT
AGREEMENT, dated /WC       V& )ZG     , 1996, between REPUBLIC OF
COLOMBIA (the Guarantor) and INTERNATIONAL BANK FOR RECONSTRUCTION
AND DEVELOPMENT (the Bank).
WHEREAS (A) the Guarantor and Interconexi6n Electrica S.A."E.S.P." (the
Borrower), having been satisfied as to the feasibility and priority of the Project described
in Schedule 2 to the Loan Agreement, have requested the Bank to assist in the financing
of the Project; and
(B)    by the Loan Agreement of even date herewith between the Bank and the
Borrower, the Bank has agreed to extend to the Borrower a loan in various currencies
equivalent to one hundred four million three hundred thousand dollars ($104,300,000) on
the terms and conditions set forth in the Loan Agreement, but only on condition that the
Guarantor agree to guarantee the obligations of the Borrower in respect of such loan as
provided in this Agreement; and
WHEREAS the Guarantor, in consideration of the Bank's entering into the Loan
Agreement with the Borrower, has agreed so to guarantee such obligations of the
Borrower;
NOW THEREFORE the parties hereto hereby agree as follows:
ARTICLE I
General Conditions; Definitions
Section 1.01. The "General Conditions Applicable to Loan and Guarantee
Agreements" of the Bank, dated January 1, 1985, with the modifications set forth in
Section 1.01 of the Loan Agreement (the General Conditions) constitute an integral part
of this Agreement.
Section 1.02. Unless the context otherwise requires, the several terms defined in
the General Conditions and in the Preamble to this Agreement and in the Preamble to, and
Section 1.02 of, the Loan Agreement have the respective meanings therein set forth.


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ARTICLE II
Guarantee; Provision of Funds
Section 2.01. The Guarantor declares its commitment to the objectives of the
Project as set forth in Schedule 2 to the Loan Agreement, and, to this end, without
limitation or restriction upon any of its other obligations under the Guarantee Agreement,
hereby unconditionally guarantees, as primary obligor and not as surety merely, the due
and punctual payment of the principal of, and interest and other charges on, the Loan, and
the premium, if any, on the prepayment of the Loan, and the punctual performance of all
the other obligations of the Borrower, all as set forth in the Loan Agreement.
Section 2.02. Without limitation or restriction upon the provisions of Section 2.01
of this Agreement, the Guarantor specifically undertakes, whenever there is reasonable
cause to believe that the funds available to the Borrower will be inadeqiate to meet the
estimated expenditures required for the carrying out of the Project, to make arrangements,
satisfactory to the Bank, promptly to provide the Borrower or cause the Borrower to be
provided with such funds as are needed to meet such expenditures.
ARTICLE III
Representative of the Guarantor; Addresses
Section 3.01. The Ministro de Hacienda y Cridito Piblico of the Guarantor is
designated as representative of the Guarantor for the purposes of Section 11.03 of the
General Conditions.
Section 3.02. The following addresses are specified for the purposes of Section
11.01 of the General Conditions:
For the Guarantor:
Ministerio de Hacienda y Cr6dito Piblico
Palacio de los Ministerios
Santa Fe de BogotA
Colombia
Cable address:             Telex:
MINHACIENDA                     4473


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For the Bank:
International Bank for
Reconstruction and Development
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address:              Telex:
INTBAFRAD                        197688 (TRT),
Washington, D.C.                 248423 (RCA),
64145 (WUI) or
82987 (FTCC)
IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized
representatives, have caused this Agreement to be signed in their respective names in the
District of Columbia, United States of America, as of the day-and year first above written.
REPUBLIC OF COLOMBIA
By
Authorized Representative
INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT
By
Regional Vice President
Latin Am rca and the Caribbean Region


INTERNATIONAL BANK
FOR RECONSTRUCTION AND DEVELOPMENT
CERTIFICATE
I hereby certify that the foregoing is a true copy of
the original in the archives of the International Bank
for Reconstruction and Development.
FOR SECRETARY