OFFICIAL

DOCUNTS LOAN NUMBER 2018 PE

Loan Agreement

(Power Engineering Project)

between

INTERNATIONAL RANK FOR RECONSTRUCTION

AND DEVELOPMENT

and

EMPRESA ELECTRICIDAD DEL PERU S.A.

and

CORPORACION FINANCIERA DE DESARROLLO, S.A. - COFIDE

Dated 140 / ? , 1981

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LOAN NU,EE 2018 PE

LOAN AGREEMENT

AGREEMENT, dated I4 , 1981, betweenINTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinaftercalled the Bank) and EMPRESA ELECTRICIDAD DEL PERU S.A. (herein-after called the Borrower) and CORPORACION FINANCIERA DEDESARROLLO, S.A. - COFIDE (hereinafter called COFIDE).

(A) the Borrower has requested the Bank to assist in thefinancing of the foreign exchange cost of the Project describedin Schedule 2 to this Agreement by making the Loan as hereinafterprovided;

(B) Parts A and E of the Project will be carried out by theBorrower or any successor thereto and Parts B, C and D of theProject will be carried out by ELECTROLIMA S.A. or any succes-sor thereto (hereinafter called ELECTROLIMA), by Energia ElictricaAndina (HIDRANDINA) S.A. or any successor thereto (hereinaftercalled HIDRANDINA), and by Empresa Minera del Centro del PeriS.A. or any successor thereto (hereinafter called CENTROMIN),respectively, with the Borrower's assistance; as part of suchassistance, the Borrower will make available to ELECTROLIMA,HIDRANDINA and CENTROMIN the proceeds of the Loan allocated forpurposes of the carrying out of Parts B, C and D of the Project,respectively, as hereinafter provided;

(C) COFIDE has participated in the negotiation of thisAgreement and has discharged all of its other responsibilities asfinancial agent of the Borrower pursuant to the Decreto Legis-lativo No. 5 of the Republic of Peri published in El Peruano onDecember 31, 1980; and

WHEREAS the Bank has agreed, on the basis inter alia of theforegoing, to make the Loan available to the Borrower upon theterms and conditions set forth hereinafter and in a projectagreement of even date herewith between the Bank and ELECTROLIMAand HIDRANDINA and CENTROMIN;

NOW THEREFORE the partie3 hereto hereby agree as follows:

ARTICLE I

General Conditions; Definitions

Section 1.01. The parties to this Agreement accept all theprovisions of the General Conditions Applicable to Loan and

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Guarantee Agreements of the Bank, dated October 27, 1980, with the

same force and effect as if they were fully set forth herein (saidGeneral Conditions Applicable to Loan and Guarantee Agreements ofthe Bank being hereinafter called the General Conditions).

Section 1.02. Wherever used in this Agreement, unless thecontext otherwise requires, the several terms defined in the

General Conditions and in the Preambles to this Agreement and tothe Project and Guarantee Agreements have the respective meaningstherein set forth and the following additional terms have thefollowing meanings:

(a) "ELECTROLIMA Subsidiary Loan Contract" means the con-tract referred to in Section 3.01 (b) (i) of this Agreement;

(b) "HIDRANDINA Subsidiary Loan Contract" means the contract

referred to in Section 3.01 (b) (ii) of this Agreement;

(c) "CENTROMIN Subsidiary Loan Contract" means the contractreferred to in Section 3.01 (b) (iii) of this Agreement;

(d) "Subsidiary Loan Contract" means any one of the con-tracts referred to in the preceding paragraphs (a), (b) and (c)and "Subsidiary Loan" means the loan provided for under aSubsidiary Loan Contract;

(e) "Borrower's Charter" means the Guarantor's LegislativeDecree No. 41, published in El Peruano on March 5, 1981, asamended by the Guarantor's Legislative Decree No. 61, publishedin El Peruano on March 25, 1981, and the term includes all legalprovisions mentioned or referred to in Article 5 of such DecreeNo. 41 and such provisions of the Guarantor's Legislative DecreeNo. 40, published in El Peruano on March 5, 1981, as are applic-able to the Guarantor's electric power subsector, and Estatutosmeans the public deed incorporating the Borrower as approved byDecreto Supremo 007-EM/SG dated May 31, 1981, and published inEl Peruano on May 18, 1981;

(f) "ELECTROLIMA'S Charter" means the public deed No. 506,dated August 24, 1906, incorporating the company, and the termincludes the estatutos thereof adopted under such public deed, asamended by public deed No. 3393, dated December 6, 1976, and asfurther amended thereafter solely to increase the capital social;

(g) "HIDRANDINA'S Charter" means the public deed No. 1417,dated November 22, 1946, incorporating the company, and the term

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includes the estatutos thereof, adopted under such public deed, asamended as of October 10, 1973, and as further amended thereaftersolely to increase the capital social;

(h) "CENTROMIN'S Charter" means the Guarantor's Decree-LawNo. 21117 published in El Peruano on March 15,1975, and the termincludes the company's estatutos as approved by the Guarantor'sSupreme Decree 026-80-EM/DGM published in El Peruano on July 14,1980;

(i) "Master Plan" means the plan for future generationand transmission additions in the north-central interconnectedelectric power system of the Guarantor, prepared under Part B 1(b) of the Project described in Schedule 2 to the Loan Agreementbetweea the Guarantor and the Bank dated September 20, 1976, assuch plan has been amended, as of the date of this Agreement,to include future generation and transmission additions to theoverall electric power system of the Guarantor and as it is tobe updated pursuant to Section 4.05 of this Agreement;

(j) "Entity" means any one of ELECTROLIMA, HIDRANDINA orCENTROMIN;

(k) "Borrower" means the Borrower and any successorthereto, "ELECTROLIMA" means ELECTROLIMA and any successor there-to; "HIDRANDINA" means HIDRANDINA and any successor thereto and"CENTROMIN" means CENTROMIN and any successor thereto; and

(1) "Subsidiary" means any company, including filiales andsubsidiarias, of which a majority of the outstanding voting stockor other proprietary interest is owned or effectively controlledby the Borrower, and the term includes any company of which amajority of the outstanding voting stock or other proprietaryinterest is owned or effectively controlled by any one or moreSubsidiaries or by the Borrower and one or more Subsidiaries.

ARTICLE II

The Loan

Section 2.01. The Bank agrees to lend to the Borrower,on the terms and conditions in the Loan Agreement set forthor referred to, an amount in various currencies equivalentto twenty-five million dollars ($25,000,000).

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Section 2.02. The amount of the Loan may be withdrawnfrom the Loan Account in accordance with the provisions ofSchedule 1 to this Agreement, as such Schedule may be amended fromtime to time by agreement between the Borrower and the Bank, forexpenditures made (or, if the Bank shall so agree, to be made)in respect of the reasonable cost of goods and services requiredfor the Project and to be financed out of the proceeds of theLoan.

Section 2.03. Except is the Bank shall otherwise agree,procurement of the goods required for Part E of the Project shallbe purchased through normal trade channels at the market price,taking into account other relevant factors such as time ofdelivery and efficiency and reliability of such goods and,when applicable, availability of maintenance facilities, spareparts and services therefor.

Section 2.04. The Closing Date shall be June 30, 1985or such later date as the Bank shall establish. The Bank shallpromptly notify the Borrower and the Guarantor of such laterdate.

Section 2.05. The Borrower shall pay to the Bank a commitmentcharge 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 fromtime to time.

Section 2.06. The Borrower shall pay interest at the rate ofnine and three-fifths per cent (9-3/5%) per annum on the prin-cipal amount of the Loan withdrawn and outstanding from time totime.

Section 2.07. Interest and other charges shall be payablesemiannually on March 1 and September 1 in each year.

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

Section 2.09. The Board of Directors of ELECTROLIMA,the Board of Directors of HIDRANDINA and the Executive Presidentof the Board of Directors of CENTROMIN, or the person or personsaut'Trized by each of them, are designated as representativesof the Borrower for the purposes of taking any action requiredor permitted to be taken under the provisions of Section 2.02

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of this Agreement and Article V of the General Conditions, inrespect of Parts B, C and D of the Project, respectively.

ARTICLE III

Execution of the Project

Section 3.01. (a) The Borrower shall carry out Parts A and Eof the Project and cause ELECTROLIMA, HIDRANDINA and CENTROMINto carry out Parts B, C and D of the Project, respectively,all with due diligence and efficiency and in conformity withappropriate administrative, financial and engineering practices.

(b) For purposes of the preceding paragraph the Borrowershall enter with:

(i) ELECTROLIMA, into a Subsidiary Loan Contract(hereinafter called the ELECTROLIMA Subsidiary LoanContract) whereby ELECTROLIMA will borrow from theBorrower, for purposes of carrying out Part B ofthe Project, the proceeds of the Loan allocatedfrom time to time to Category (3) of the table setforth in Part 1 of Schedule 1 to this Agreement(hereinafter called the Table);

(ii) HIDRANDINA, into a Subsidiary Loan Contract(hereinafter called the HIDRANDINA Subsidiary LoanContract) whereby HIDRANDINA will borrow, from theBorrower, for purposes of carrying out Part C ofthe Project, the proceeds of the Loan allocatedfrom time to time to Category (4) of the Table;and

(iii) CENTROMIN, into a Subsidiary Loan Contract (herein-after called the CENTROMIN Subsidiary Loan Con-tract) whereby CENTROMIN will borrow from theBorrower, for purposes of carrying out Part D ofthe Project, the proceeds of the Loan allocatedfrom time to time to Category (5) of the Table.

(c) Except as the Bank shall otherwise agree, the terms andconditions of each Subsidiary Loan Contract shall be satisfactoryto the Bank, and shall include the following:

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(i) all provisions of this Agreement and the GeneralConditions concerning repayment of principal of,and payment of interest and other charges on, theLoan, shall apply mutatis mutandis to the repaymentof the principal of, and interest and other chargeson, each Subsidiary Loan;

(ii) each withdrawal from the Loan Account for purposesof the carrying out of Parts B or C or D of theProject made pursuant to Section 2.09 of thisAgreement sh&l be deemed a disbursement in respectof the corresponding Subsidiary Loan under theapplicable Subsidiary Loan Contract; and

(iii) each payment to the Borrower under each SubsidiaryLoan Contract shall be made sufficiently in advanceof the applicable payment date under this Agree-ment, so as to enable the Borrower to utilize theproceeds of such payment to discharge in a timelyfashion its obligations under this Agreement.

(d) The Borrower shall exercise its rights under theELECTROLIMA Subsidiary Loan Contract, the HIDRANDINA SubsidiaryLoan Contract and the CENTROMIN Subsidiary Loan Contract in suchmanner as to protect the interests of the Guarantor, the Bank andthe Borrower and to accomplish the purposes of the Loan. Exceptas the Bank shall otherwise agree, the Borrower shall not assign,amend, abrogate or waive any of such Subsidiary Loan Contracts orany provision thereof.

Section 3.02. (a) For the purpose of carrying out Parts A andE of the Project, the Borrower shall employ qualified andexperienced consultants acceptable to the Bank, under contracts,including terms of reference, satisfactory to the Bank.

(b) The Borrower shall cooperate fully with such consultantsin the performance of their services for the Project and makeavailable to them all information relevant to the Project.

(c) The Borrower shall cause such consultants promptlyto furnish to the Bank copies of the documents prepared bythem for the Project, including reports and drafts thereof,plans, designs, specifications, work schedules and estimates ofcosts, in such number as the Bank shall reasonably request.

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(d) With respect to the evaluation and putting into effectof the recommendations and other conclusions contained in thedocuments referred to in the preceding paragraph:

(i) during the carrying out of Parts A and E of theProject, the Borrower and the Bank shall from timeto time exchange views on said recommendations andconclusions;

(ii) upon completion of Part A.1 of the Project, theBorrower shall consult with the Bank on the recom-mendations and conclusions relating thereto and, inagreement with the Bank, shall initiate the carry-ing out of the project engineered under Part A.1 ofthe Project in the light of such recommendationsand conclusions; and

(iii) upon completion of each component of Part A of theProject, other than Part A.1, the Borrower shallconsult with the Bank on the recommendations andconclusions related thereto.

Section 3.03. The Borrower shall, for purposes of Part E ofthe Project:

(i) take, until June 30, 1982, all such action as shallbe necessary on its part to cooperate with theGuarantor's Direcci6n General de Electricidad soas to enable the latter to exercise its powers anddischarge its responsibilities, both in respect ofelectric power sub-sector planning;

(ii) take, by June 30, 1982, all such action as shallbe necessary on its part: (A) to establish theplanning unit, including such action as shall benecessary to enable the Guarantor to comply withits obligations under Section 3.02 (a) (ii) of theGuarantee Agreement; (B) to agree with the Bank onthe equipment to be financed out of the proceeds ofthe Loan and required for the operation of theUnit; and (C) to start the operation of such unitwith an organizational structure and under operat-ing guidelines, both satisfactory to the Bank;and

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(iii) by December 31, 1982, complete the purchase of the

equipment required for the operation of the unit,other than equipment which may have been acquiredfrom the Guarantor pursuant to Section 3.02 (a)

(ii) of the Guarantee Agreement, and the staffingof such unit, both in a fashion consistent with the

structure and guidelines referred to in (ii) (C)above, and deliver to the Bank, for approval, a

training program for such unit's staff and, aftersuch approval is given, carry out the program asapproved.

Section 3.04. (a) The Borrower undertakes 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 ricidentto 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 Borrower to

replace or repair such goods.

(b) Except as the Bank shall otherwise agree, the Borrowershall cause all goods and services financed out of the proceedsof the Loan to be used exclusively for the Project.

Section 3.05. (a) The Borrower shall furnish to the Bank,

promptly upon their preparation, the reports, contract documents

and procurement schedules for Parts A and E of the Project,

and any material modifications thereof or additions thereto,

in such detail as the Bank shall reasonably request.

(b) The Borrower: (i) shall maintain records and procedures,

including separate accounts for each Part of the Project, adequate

to record and monitor the progress of Parts A and E of the Project

(including their cost and, where appropriate, the benefits to bederived from them), to identify the goods and services financed

out of the proceeds of the Loan, and to disclose their use in such

Parts of the Project; (ii) shall enable the Bank's accredited

representatives to visit the facilities and construction sites

related to such Parts of the Project and to examine the goods

financed out of the proceeds of the Loan and any relevant records

and documents; and (iii) shall furnish to the Bank at regular

intervals all such information as the Bank shall reasonably

request concerning such Parts of the Project, their cost and,

where appropriate, the benefits to be derived from them, the

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expenditure of the proceeds of the Loan, the goods and servicesfinanced out of such proceeds and the Master Plan.

(c) Upon the award by the Borrower of any contract forgoods or services to be financed out of the proceeds of the Loan,the Bank may publish a description thereof, the name and nation-ality of the party to whom the contract was awarded and thecontract price.

(d) Promptly after completion of Parts A and E of theProject, but in any event not later than six months after theClosing Date or such later date as may be agreed for this purposebetween the Borrower and the Bank, the Borrower shall prepare andfurnish to the Bank a report, of such scope and in such detail asthe Bank shall reasonably request, on the execution and, whereapplicable, initial operation of Parts A and E of the Project,their cost and the benefits derived and to be derived from them,the performance by the Borrower and the Bank of their respectiveobligations under the Loan Agreement and the accomplishmentof the purposes of the Loan.

(e) The Borrower shall enable the Bank's representativesto examine all plants, installations, sites, works, buildings,property and equipment of the Borrower and any relevant recordsand documents.

ARTICLE IV

Management and Operations of the Borrower

Section 4.01. The Borrower shall at all times manage itsaffairs, maintain its financial position, plan its future expan-sion and carry on its operations in accordance with the Borrower'sCharter and Estatutos and with appropriate administrative, busi-ness, financial, engineering, and public utility practices underthe supervision of experienced and competent management assistedby experienced and competent staff in adequate numbers.

Section 4.02. (a) The Borrower shall at all times take allsteps necessary to maintain its legal existence and right to carryon operations, including, without limitation, Parts A and E of theProject, and shall, except as the Bank may otherwise agree, takeall steps necessary to acquire, maintain and renew such licenses,consents, franchises or otler rights as may be necessary or usefulfor its operations (including such Parts of the Project).

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(b) The Borrower shall take all such action, including theprovision of funds and resources, as shall be necessary to ensurethat its facilities, equipment and property, including the unit tobe established under Part E of the Project, are adequately oper-ated and maintained, and where applicable, repaired and renewed.

(c) Except as the Bank shall otherwise agree, the Borrowershall not sell, lease, transfer or otherwise dispose of any of itsproperty or assets which shall be required for the efficientoperation of its business and undertaking, including Parts A andE of the Project.

Section 4.03. The Borrower shall take and cause to be takenall action as shall be required to ensure that its operations,including Parts A and E of the Project, are carried out in confor-mity with appropriate pollution control and ecological standards.

Section 4.04. The Borrower shall take out and maintain withresponsible insurers, or make other provisions satisfactory tothe Bank for, insurance against such risks and in such amountsas shall be consistent with appropriate practice.

Section 4.05. (a) The Borrower shall update the Master Plannot less frequently than semiannually until December 31, 1983 andnot less frequently than annually thereafter.

(b) Any updating of the Master Plan pursuant to paragraph(a) of this Section shall be made with due regard to all economic,financial and technical aspects related thereto and, in parti-cular, taking into account the findings, conclusions and recom-mendations of all studies carried out under the Project.

Section 4.06. The Borrower shall cause any Subsidiary it may

create or establish to observe and perform the obligations of theBorrower under this Agreement to the extent to which such obliga-tions shall or can be applicable thereto, as if such obligationswere binding upon such Subsidiary.

AATICLE V

Financial Covenants

Section 5.01. The Borrower shall maintain records adequateto reflect in accordance with consistently maintained appropriateaccounting practices its operations and financial condition.

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Section 5.02. The Borrower shall: (i) have its accounts,including the accounts referred to in Section 3.04 (b) of thisAgreement, and financial statements (balance sheets, state-ments of income and expenses and related statements), and theaccounts and financial statements of the Subsidiaries for eachfiscal year audited, in accordance with appropriate auditingprinciples consistently applied, by independent auditorsacceptable to the Bank; (ii) furnish to the Bank as soon asavailable, but in any case not later than four months after theend of each such year, (A) certified copies of its financialstatements, the accounts referred to in Section 3.04 (b) ofthis Agreement and the accounts and financial statements of theSubsidiaries, for such year as so audited and (B) the report ofsuch audit by said auditors, of such scope and in such detail asthe Bank shall have reasonably requested; and (iii) furnish tothe Bank such other information concerning the accounts andfinancial statements of the Borrower and the Subsidiaries and theaudit thereof as the Bank shall from time to time reasonablyrequest.

Section 5.03. (a) The Borrower represents that at thedate of this Agreement no lien exists on ary of its assets assecurity for any debt.

(b) The Borrower undertakes that, except as the Bankshall otherwise agree: (i) if any lien shall be created onany assets of the Borrower or a Subsidiary as security for anydebt, such lien will equally and ratably secure the paymentof the principal of, and interest and other charges on, theLoan, and in the creation of any such lien express provisionwill be made to that effect, at no cost to the Bank; and(ii) if any staLatory lien shall be created on any assets of theBorrower or of any Subsidiary as security for any debt, theBorrower shall grant, at no cost to the Bank, an equivalent liensatisfactory to the Bank to secure the payment of the principalof, and interest and other charges on, the Loan; provided,however, that the foregoing provisions of this paragraph shallnot apply to: (A) any lien created on property, at the time ofpurchase thereof, solely as security for the payment of thepurchase price of such property; or (B) any lien arising in theordinary course of banking transactions and securing a debtmaturing not more than one year after the date on which it isoriginally incurred.

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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) the Borrower or ELECTROLIMA or HIDRANDINA or CENTROMINshall have failed to perform any of its respective obligationsunder a Subsidiary Loan Contract;

(b) ELECTROLIMA or HIDRANDINA or CENTROMIN shall have failedto perform any of its respective obligations under the ProjectAgreement;

(c) an extraordinary situation shall have arisen which shallmake it improbable that any of ELECTROLIMA or HIDRANDINA orCENTROMIN will be able to perform its respective obligations underthe Project Agreement;

(d) the Guarantor or any other authority having jurisdictionshall have taken any action for the dissolution or disestablish-ment of ELECTROLIMA or HIDRANDINA or CENTROMIN or for the suspen-sion of its respective operations, or the Borrower or ELECTROLIMAor HIDRANDINA or CENTROMIN shall have passed any resolution forits respective dissolution or liquidation;

(e) any action or proceeding shall have been taken by anEntity or by others whereby any of the assets of such Entity shallor may be distributed among its creditors; and

(f) a change in (A) the Borrower's Charter or its Estatutosor ELECTROLIMA's Charter or HIDRANDINA's Charter or CENTROMIN'sCharter or (B) the legislation of the Guarantor, shall haveoccurred which shall materially and adversely affect the abilityof the Borrower or ELECTROLIMA or HIDRANDINA or CENTROMIN to carryout its respective covenants, agreements and obligations set forthin the Loan or Project Agreement, as the case may be.

For the purposes of this paragraph the term "change in

the legislation of the Guarantor" shall mean any change (includ-ing, but without limitation, any amendment or repeal of, or

failure to carry out or enforce, any such legislation) in theentire body of legislation of the Guarantor (including, but

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without limitation, all constitutional provisions, statutes, laws,legislative decrees, decree-laws, executive decrees, includingSupreme Decrees, and regulations, and any other legal provisionsof a similar nature) directly or indirectly relating to thecarrying on of the business of the Borrower or of any of theEntities and the determination and adjustment of the rates for thesale of electricity of the Borrower or of any of the Entities.

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) or (b) of Section6.01 of this Agreement shall occur and shall continue for a periodof 60 days after notice thereof shall have been given by the Bankto the Borrower; and

(b) any event specified in paragraph (d) or paragraph (e) orparagraph (f) of Section 6.01 of this Agreement shall occur.

ARTICLE VII

Effective Date; Termination

Section 7.01. The following events are specified as addi-tional conditions to the effectiveness of the Loan Agreementwithin the meaning of Section 12.01 (c) of the General Conditions:

(a) that this Agreement has been duly registered byDirecci6n General de Credito Pfblico of the Guarantor'sMinistry of Economy, Finance and Commerce;

(b) that the Project Agreement has been executed anddelivered on behalf of the Bank and ELECTROLIMA and HIDRANDINA andCENTROMIN and that such execution and delivery have been dulyauthorized or ratified by all necessary governmental and corporateaction; and

(c) that the estatutos have been duly registered with theGuarantor's Registro Mercantil de los Registros PGblicos de Limaand that the execution and delivery of the Loan Agreement andsupplemental letters thereto have been ratified by an extra-ordinary meeting of the Borrower's Shareholders within 90 daysfollowing such registration.

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Section 7.02. The following are specified as additionalmatters, within the meaning of Section 12.02 (c) of the GeneralConditions, to be included in the opinion or opinions to befurnished to the Bank:

(a) that this Agreement has been registered by Direcci6nGeneral de Cr6dito Piblico of the Guarantor's Ministry ofEconomy, Finance and Commerce;

(b) that the Project Agreement has been duly authorized orratified by, and executed and delivered on behalf of, ELECTROLIMA,HIDRANDINA and CENTROMIN, and is legally binding upon ELECTROLIMA,HIDRANDINA and CENTROMIN in accordance with its terms; and

(c) that the Borrower has been duly established as a corpo-ration (Sociedad An6nima) under the laws of the Guarantor, thatthe Estatutos have been duly registered with the Guarantor'sRegistro Mercantil de los Registros PGiblicos de Lima and thatthe meeting of shareholders referred to in Section7.02 (c) ofthis Agreement has been legally held and has legally ratified theexecution and delivery of the Loan Agreement and the supplementalletters thereto.

Section 7.03. The date s/ 442 41/9 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 thepurposes 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)

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For the Borrower:

ELECTROPERUPaseo de la Repfiblica 144LimaPerd

Cable address: Telex:

ELECTROPERU 25680 PELima, Peri

IN WITNESS WHEREOF, the parties hereto, and COFIDE in therole described in the preamble to this Agreement, all actingthrough their representatives thereunto duly authorized, havecaused this Agreement to be signed in their respective names inthe City of Lima, Perfi, as of the day and year first abovewritten.

INTERNATIONAL BANK FORRECONSTRUCTION AND DEVELOPMENT

BySenior Vice President

Operations

EMPRESA ELECTRICIDAD DEL PERU, S.A.

ByAuthorized Representative

CORPORACION FINANCIERA DE DESARROLLO, S.A.- COFIDE

ByAuthorized Representative

ByAuthorized Representative

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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) Consultant services 13,700,000 100% of for-for Parts A and E of eign expendi-

the Project and tures and 90%training abroad under of local ex-Part E of the Project penditures

(2) Goods and services 300,000 100% of for-

related thereto for eign expendi-Part E of the Project tures

(3) Consultant services 700,000 )for Part B of the )Project )

) 100% of for-(4) Consultant services 2,000,000 ) eign expendi-

for Part C of the ) tures and 90%

Project ) of local ex-) penditures

(5) Consultants services 2,500,000 )for Part D of the )Project

(6) Unallocated 5,800,000

TOTAL 25,000,000

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2. For the purposes of this Schedule:

(a) the term "foreign expenditures" means expenditures inthe currency of any country other than the Guarantor and for goodscr services supplied from the territory of any country other thanthe Guarantor; and

(b) the term "local expenditures" means expenditures in thecurrency of the Borrower or for goods or services supplied fromthe territory of the Borrower.

3. The disbursement percentages have been calculated incompliance with the policy of the Bank that no proceeds of theLoan shall be disbursed on account of payments for taxes leviedby, or in the territory of, the Guarantor on goods or services,or on the importation, manufacture, procurement or supplythereof; to that end, if the amount of any such taxes leviedon or in respect of any item to be financed out of the proceedsof the Loan decreases or increases, the Bank may, by notice tothe Borrower, increase or decrease the disbursement percentagethen applicable to such item as required to be consistent withthe aforementioned policy of the Bank.

4. Notwithstanding the provisions of paragraph 1 above, nowithdrawals shall be made in respect of:

(a) payments made for expenditures prior to the date of thisAgreement, except that withdrawals, in an aggregate amount notexceeding the equivalent of $2,200,000 may be made in respect ofany Category on account of payments made for expenditures forpurposes of the Project before that date but after December 31,1980;

(b) payments made for expenditures in respect of Category 3unless evidence satisfactory to the Bank has been furnished to theBank showing that the ELECTROLIMA Subsidiary Loan Contract hasbeen executed on behalf of the Borrower and ELECTROLIMA includingan opinion or opinions satisfactory to the Bank of Counsel accep-table to the Bank or, if the Bank shall so request, a certificatesatisfactory to the Bank of a competent official of the Borrowershowing, on behalf of the Borrower and ELECTROLIMA that theELECTROLIMA Subsidiary Loan Contract has been duly authorized andratified and executed on behalf of the Borrower and ELECTROLIMA,and is legally binding thereupon in accordance with its terms;

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(c) payments made for expenditures in respect of Category 4

unless evidence satisfactory to the Bank has been furnished to theBank showing that the HIDRANDINA Subsidiary Loan Contract hasbeen executed on behalf of the Borrower and HIDRANDINA includingan opinion or opinions satisfactory to the Bank of Counsel accep-

table to the Bank or, if the Bank shall so request, a certificatesatisfactory to the Bank of a competent official of the Borrowershowing, on behalf of the Borrower and HIDRANDINA that theHIDRANDINA Subsidiary Loan Contract has been duly authorized andratified and executed on behalf of the Borrower and HIDRANDINA

and is legally binding thereupon in accordance with its terms;

and

(d) payments made for expenditures in respect of Category 5

unless evidence satisfactory to the Bank has been furnished to theBank showing that the CENTROMIN Subsidiary Loan Contract has

been executed on behalf of the Borrower and CENTROMIN includingan opinion or opinions satisfactory to the Bank of Counsel accep-

table to the Bank or, if the Bank shall so request, a certificatesatisfactory to the Bank of a competent official of the Borrowershowing, on behalf of the Borrower and CENTROMIN that theCENTROMIN Subsidiary Loan Contract has been duly authorized andratified and executed on behalf of the Borrower and CENTROMIN

and is legally binding thereupon in accordance with its terms.

5. Notwithstanding the allocation of an amount of the Loan or

the disbursement percentages set forth in the table in paragraph1 above, if the Bank has reasonably estimated that the amount ofthe Loan then allocated to any Category will be insufficient to

finance the agreed percentage of all expenditures in thatCategory, the Bank may, by notice to the Borrower: (i) reallocate

to such Category, to the extent required to meet the estimated

shortfall, proceeds of the Loan which are then allocated to

another Category and which in the opinion of the Bank are not

needed to meet other expenditures; and (ii) if such reallocationcannot fully meet the estimated shortfall, reduce the disbursement

percentage then applicable to such expenditures in order that

further withdrawals under such Category may continue until all

expenditures thereunder shall have been made.

6. If the Bank shall have reasonably determined that the

procurement of any item in any Category is inconsistent with theprocedures set forth or referred to in this Agreement, no

expenditures for such item shall be financed out of the proceedsof the Loan and the Bank may, without in any way restricting or

- 19 -

limiting any other right, power or remedy of the Bank under theLoan Agreement, by notice to the Borrower, cancel such amount ofthe Loan as, in the Bank's reasonable opinion, represents theamount of such expenditures which would otherwise have beeneligible for financing out of the proceeds of the Loan.

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SCHEDULE 2

Description of the Project

The Project consists of the following:

Part A: Studies to be prepared by the Borrower

1. Expansion of existing feasiblity studies to determinethe generating capacity of, and final design and pre-paration of tender documents for, a hydroelectricproject called El Chorro with a generating capacity ofabout 200 to 300 MW.

2. (i) Feasibility study of and (ii), if warranted, finaldesign and preparation of tender documents for, works onthe Rio Santa upstream of the existing Call6n delPato hydroelectric plant to provide improved waterstorage and regulation facilities therefor.

3. (i) Feasibility study of and (ii), if warranted, finaldesign and preparation of tender documents for, a hydro-electric project called Quishuarani, with a generatingcapacity of about 30 MW.

4. Pre-feasibility studies of hydroelectric projects onthe Rio Huaura, with a generating capacity of, in theaggregate, about 340 MW.

5. Review of the existing feasibility study of the Olmospower/irrigation project in order to confirm theviability thereof.

6. Feasibility study of a hydroelectric project calledMolloco, with a generating capacity of about 200 to300 MW.

7. Feasibility study of a hydroelectric project calledPlatanal, with a generating capacity of about 80 MW.

8. Feasibility study of works on the Rio Chili upstream ofthe existing Charcani hydroelectric plant to provideimproved water storage and regulation facilitiestherefor.

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9. (i) Completion of studies in progress to determine thefeasibility of and (ii), if warranted, final design andpreparation of tender documents for, the Trujillo-Chiclayo-Piura transmission line to complete the inter-connection of the Guarantor's central-north electricpower system.

10. (i) Feasibility study of and (ii), if warranted, finaldesign and preparation of tender documents for, athermal power station with a capacity of about 200 MW,in a location yet to be determined, which will generatepower for the Guarantor's north-central interconnectedpower system.

Part B: Studies to be prepared by ELECTROLIMA

1. (i) Completion of studies in progress to determine thefeasibility of and (ii), if warranted, preparation offinal design and tender documents for, adding hourlywater-storage capacity to the existing Matucana hydro-electric plant.

2. (i) Completion of studies in progress to determine thefeasibility of and (ii), if warranted, preparation offinal design and tender documents for, a reservoir atYuracmayo on the Rio Rimac upstream of the plantreferred to in B.1 above.

Part C: Studies to be prepared by HIDRANDINA

1. (i) Completion of studies in progress to determine thefeasibility of and (ii), if warranted, final design andpreparation of tender documents for, works on the RioPativilca upstream of the existing Cahua hydroelectricplant (Cahua I) to provide improved water storage andregulation facilities therefor.

2. Feasibility study of a hydroelectric project calledCahua II, with a generating capacity of about 40 MW.

Part D: Study to be prepared by CENTROMIN

Final design and preparation of tender documents for ahydroelectric project called Yuncan, with a generatingcapacity of about 120 MW.

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Part E: Planning Unit within the Borrower

Establishment and operation of a planning unit within

the Borrower with full responsibility for electric power

subsector planning, including purchase and utilization

of equipment therefor, additional to the equipment to be

transferred to the Borrower under Section 3.02 of the

Guarantee Agreement, training of such unit's staff; and

provision of technical assistance thereto.

T P *

The Project is expected to be completed by December 31, 1984.

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SCHEDULE 3

Amortization Schedule

Payment of PrincipalDate Payment Due (expressed in dollars)*

On each March 1 and September 1

beginning March 1, 1986through March 1, 1998 960,000

On September 1, 1998 1,000,000

* To the extent that any portion of the Loan is repayable ina currency other than dollars (see General Conditions,Section 4.04), the figures in this column represent dollarequivalents determined as for purposes of withdrawal.

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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 3.04 (b)of the General Conditions:

Time of Prepayment Premium

Not more than three yearsbefore maturity 1.70%

More than three years butnot more than six yearsbefore maturity 3.40%

More than six years but notmore than eleven yearsbefore maturity 6.20%

More than eleven years butnot more than fifteenyears before maturity 8.50%

More than fifteen yearsbefore maturity 9.60%

/I

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 Interna-

tional Bank for Reconstruction and Develop-

ment.

In witness whereof I have signed this Certifi-

cate and affixed the Seal of the Bank thereunto

this / day of 198 .

*4 SECETARY