LOAN NUMBER 56 ME Loan (Comisi6n Power Program) TO COMISION FEDERAL DE ELECTRICIDAD AND NACIONAL FINANCIERA, S. A. LOAN AGREEMENT, DATED JANUARY 11, 1952, BETWEEN INTERNATIONAL BANK FOR RE- CONSTRUCTION AND DEVELOPMENT AND COMISION FEDERAL DE ELECTRICIDAD AND NACIONAL FINANCIERA, S. A. GUARANTEE AGREEMENT, DATED JANUARY 11, 1952, BETWEEN THE UNITED MEXICAN STATES AND INTERNATIONAL BANK FOR RECON- STRUCTION AND DEVELOPMENT. LOAN NUMBER 56 ME Loan Agreement (Comisi6n Power Program) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND COMISION FEDERAL DE ELECTRICIDAD AND NACIONAL FINANCIERA, S. A. DATED JANUARY 11, 1952 ' Loan Mgreement AGREEMENT, dated January 11, 1952, between INTER- NATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT, party of the first part hereto, (hereinafter called the Bank) and ComisioN FEDERAL D ELECTRICIDAD and NAcioNAL Fi- NANCIERA, S. A., parties of the second part hereto, (here- inafter called the Borrowers). ARTICLE I Loan Regulations; Special Definitions SECTION 1.01. The parties to this Agreement accept all the provisions of Loan Regulations No. 4 of the Bank, dated December 6, 1950, subject, however, to the modifica- tions thereof set forth in Schedule 4 to this Agreement (said Loan Regulations No. 4 as so modified being hereinafter called the Loan Regulations) with the same force and effect as if they were fully set forth herein. SECTION 1.02. Except where the context otherwise re- quires, the following terms have the following meanings wherever used in this Agreement or any Schedule hereto: (1) The term "Comisi6n" means Comisi6n Federal de Electricidad. (2) The term "Financiera" means Nacional Financiera, S. A. ARTICLE II The Loan SECTION 2.01. The Bank agrees to lend to the Bor- rowers, on the terms and conditions in this Agreement set forth or referred to, the sum of twenty-nine million seven hundred thousand dollars ($29,700,000), or the equivalent thereof in currencies other than dollars. 4 SECTION 2.02. The Bank shall open a Loan Account on its books in the names of the Borrowers and shall credit to such Account the amount of the Loan. The amount of the Loan may be withdrawn from the Loan Account as pro- vided in, and subject to the rights of cancellation and sus- pension set forth in, the Loan Regulations. Notwithstanding anything to the contrary contained in this Loan Agreement, unless the Bank shall otherwise agree: (i) The Borrowers shall not be entitled to make with- drawals from the Loan Account in respect of goods re- quired for carrying out the Projects described in para- graphs D and G of Schedule 2 to this Loan Agreement until evidence satisfactory to the Bank that an adlequate supply of boiler feed water of suitable quality will be avail- able for such Projects is furnished to the Bank; and (ii) The Borrowers shall not be entitled to make with- drawals from the Loan Account in respect of goods re- quired for carrying out the Project described in paragraph F of Schedule 2 to this Loan Agreement until (a) prelimi- nary plans and specifications satisfactory to the Bank in respect of such Project shall have been submitted to the Bank, and (b) firm agreements regarding quantities and delivered costs of bagasse to be used as fuel shall have been entered into with the suppliers of bagasse. SECTION 2.03. The Borrowers shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (% of 1%) per annum on the principal amount of the Loan not so withdrawn from time to time. SECTION 2.04. The Borrowers shall pay interest at the rate of four and one-half per cent (41/2%) per annum on the principal amount of the Loan so withdrawn and out- standing from time to time. 5 SECTION 2.05. Except as the Bank and the Borrowers shall otherwise agree, the charge payable for special com- mitments entered into by the Bank at the request of the Borrowers pursuant to Section 4.02 of the Loan Regula- tions shall be at the rate of one-half of one per cent (1/2 of 17) per annum on the principal amount of such special commitment outstanding from time to time. SECTION 2.06. Interest and other charges shall be pay- able semi-annually on February 1 and August 1 in each year. SECTION 2.07. The Borrowers shall repay the principal of the Loan in accordance with the amortization schedule set forth in Schedule 1 to this Loan Agreement. SECTION 2.08. All obligations of the Borrowers under this Loan Agreement (not including, however, obligations expressly undertaken by only one of the Borrowers) and the Bonds shall be joint and several aiid the obligation of either of them to comply with any provision of this Loan Agreement is not subject to any prior notice to, demand upon or action against the other. No extension of time or forbearance given to either of the Borrowers in respect of the performance of any of its obligations under this Loan Agreement or the Bonds, and no failure of the Bank or of any holder of the Bonds to give any notice or to make any demand or protest whatsoever to either of the Borrowers, or strictly to assert any right or pursue any remedy against either of them in respect of this Loan Agreement or the Bonds, and no failure by either of the Borrowers to comply with any requirement of any law, regulation or or- der, shall in any way affect or impair any obligation of the other Borrower under this Loan Agreement or the Bonds. 6 ARTICLE III Use of Proceeds of the Loan SECTION 3.01. The Borrowers shall apply the proceeds of the Loan exclusively to the cost of goods which will be required for the carrying out of the Projects described in Schedule 2 to this Agreement. The specific goods to be pureiased out of the proceeds of the Loan shall be deter- ined by agreement between the Borrowers and the Bank, and the list of such goods may be modified from time to time by agreement between them. SECTION 3.02. Except as the Bank shall otherwise agree, the Borrowers shall cause all goods purchased with the proceeds of the Loan to be used in the territories of the Guarantor exclusively in the carrying out of the Projects. Except as shall be otherwise agreed between the Bank and the Borrowers, title to all such goods shall be conveyed to Comisi6n free and clear of all incumbrances. ARTICLE IV Bonds SECTION 4.01. The Borrowers shall execute and deliver Bonds representing the principal amount of the Loan as provided in the Loan Regulations. The form of Bonds re- ferred to in Article VI of the Loan Regulations shall be appropriately modified to provide for joint and several obligations on the part of the Borrowers. SECTION 4.02. (a) The Director General of Comisi6n and such persons or persons as he shall appoint in writing are designated as authorized representatives of Comisi6n for the purposes of Section 6.12(a) of the Loan Regulations. ( 7 (b) The Director General of Financiera and such person or persons as he shall appoint in writing are designated as authorized representatives of Financiera for the purposes of Section 6.12(a) of the Loan Regulations. ARTICLE V Particular Covenants SECTION 5.01. The Borrowers shall carry out the Proj- ects with due diligence and efficiency and in conformity with sound engineering and financial practices. The design of the Projects shall be prepared by engineers or engineering firms qualified by experience on similar work. SECTION 5.02. (a) The Borrowers shall furnish to the Bank, promptly upon their preparation, the plans and specifications for the Pr3jects and any material modifica- tions subsequently made therein. (b) The Borrowers shall maintain records adequate to identify the goods purchased out of the proceeds of the Loan, to disclose the end-use thereof in the Projects, to record the progress of the Projects (iricluding the cost thereof) and to reflect in accordance with consistently maintained sound accounting practices the financial condi- tion and operations of the Borrowers. (c) The Borrowers shall enable the Bank's representa- tives to inspect any and all goods purchased out of the proc.eeds of the Loan and the sites, works and construction included in the Projects and any of the properties owned or operated by Comisi6n and to examine any relevant rec- ords and documents. (d) The Borrowers shall furnish to the Bank all sueb in- formation as the Bank shall reasonably request concerning the expenditure of the proceeds of the Loan, the use of the 8 goods purchased therewith, the progress of the Projects and the operations and financial condition of the Borrowers. SECTION 5.03. (a) The Bank and the Borrowers shall cooperate fully to assure that the purposes of the Loan will be accomplished. To that end, each party to this Agreement shall furnish to the other all such information as it shall reasonably request with regard to the general status of the Loan. (b) The Bank and the Borrowers shall from time to time exchange views through their representatives with regard to matters relating to the purposes of the Loan and the maintenance of the service thereof. The Borrowers shall promptly inform the Bank of any condition which shall arise that shall interfere with, or threaten to interfere with, the accomplishment of the purposes of the Loan or the maintenance of the service thereof or shall increase, or threaten to increase, the estimated cost of the Projects materially over the estimated cost set forth in Schedule 3 to this Agreement. SECTION 5.04. Comisi6n shall not, without the prior ap- provai of the Bank, incur any debt if thereby the aggregate amount required in any fiscal year of Comisi6n (includ- ing the fiscal year in which Comisi6n proposes to incur such debt) for the payment of principal (including amorti- zation and sinking fund payments) of, and interest and other charges on, all outstanding debt (including said pro- posed debt) incurred by Comisi6n would exceed 662%% of the aggregate amount of the revenues of Comisi6n during a period of any twelve consecutive months out of the fifteen months last preceding the date on which Comisi6n proposes to incur such debt. For purposes of this Section: (a) the term "revenues of Comisi6n" shall be deemed to mean the aggregate of (i) all current revenues of Comisi6n excluding pub- lic appropriations and grants and 9 (ii) all payments on account of principal of, and amortization and sinking funds on, debt owing to Co- misi6n but only to the extent that Comisi6n shall have made payments during such twelve consecutive months on account of principal of, and amortization and sink- ing funds on, debt of Comisi6n; less the amount of all operating, administrative and over- bead expenses of Comisi6n, but without deduction of any aiounts for depreciation, replacement, retirement, obso- lescence, interest, sinking fund or amortization of principal of indebtedness; (b) the term "debt" shall not include debt maturing by its terms in not more than one year after the date on which it is incurred in an aggregate principal amount not exceed- ing the equivalent of 25 million pesos in the currency of the Guarantor; (c) the term "incur " with reference to any debt shall in- clude any assumption or guarantee of such debt or any modification of the terms of payment of such debt; and (d) sums in currency other than currency of the Guar- antor shall be converted into currency of the Guarantor at the official selling rate of Banco de Mexico, S. A., for such other currency on the date on which Comisi6n proposes to incur the debt in question. SECION 5.05. Each of the Borrowers undertakes that, except as the Bank shall otherwise agree, if any lien shall be created on any of its assets as security for any external debt, such lien shall ipso facto equally and ratably secure the payment of the principal of, and interest and other charges on, the Loan and the Bonds, and in the creation of any such lien express provision shall be made to that effect; provided, however, that the foregoing provisions of this Section shall not apply to any lien created on property, at the time of purchase thereof, solely as security for the pay- ment of the purchase price of such property. 10 SECTION 5.06. The Borrowers shall pay or cause to be paid all taxes or fees, if any, imposed under the laws of the Guarantor or laws in effect in its territories on or in con- nection with the execution, issue, delivery or registration of the Loan Agreement, the Bonds or the Guarantee Agree- ment, or the payment of principal, interest or other charges thereunder; provided, however, that the provisions of this Section shall not apply to taxation of, or fees upon, pay- ments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individual or corporate resident of the Guarantor. SECTION 5.07. The Borrowers shall pay or cause to be paid all taxes and fees, if any, imposed under the laws of the country or countries in whose currency the Loan and the Bonds are payable or laws in effect in the territories of such country or countries on or in connection with the execution, issue, delivery or registration of the Loan Agree- ment, the Bonds or the Guarantee Agreement. SECTION 5.08. Except as shall be otherwise agreed be- tween the Bank and the Borrowers, the Borrowers shall insure or cause to be insured with responsible insurers all goods purchased with the proceeds of the Loan. Such in- surance shall cover such marine, transit and other hazards incident to delivery of the goods into the territories of the Guarantor, and shall be for such amounts, as shall be con- sistent with sound commercial practice. Each contract of insurance shall be payable in dollars or in the currency in wnich the cost of the goods insured thereunder shall be payable. SECTION 5.09. (a) The Borrowers shall at all times maintain their existence and right to carry on operations and Comisi6n shall, except as the Bank shall otherwise agro, maintain and renew all rights, powers, privileges and franchises owned by it and necessary or useful in the operation of its business. L 11 (b) Comisi6n shall maintain its plants, equipment and property, and from time to time make all necessary re- newals and repairs thereof, all in accordance with sound engineering standards. (c) Comisi6n shall not, without the consent of the Bank, sell or otherwise dispose of all or substantially all of its property and assets, unless the Borrowers shall first redeem and pay, or make adequate provision satisfactory to the Bank for redemption and payment of, all of the Loan which shall then be outstanding and unpaid. (d) Comisi6n shall not, without the consent of the Bank, sell or otherwise dispose of all or substantially all the prop- erty included in any of the Projects described in Schedule 2 to this Agreement or any plant included in any such Proj- ect unless the Borrowers shall first redeem and pay, or make adequate provision satisfactory to the Bank for the redemption and payment of, the amount of the Loan which shall have been withdrawn from the Loan Account by the Borrowers on account of any such Project and which shall then be outstanding and unpaid. SECTION 5.10. Whenever there is reasonable cause to be- lieve that at any time the amount of currency of the Guar- antor held by Comisi6n and accruing to it for the twelve month period next following such time will be inadequate to meet the estimated expenditures payable in currency of the Guarantor and required for carrying out the Projects dur- ing such twelve month period, Comisi6n shall forthwith notify the Guarantor and the Bank of such fact and of the amount of the anticipated deficit for such twelve month period. Upon the receipt of such notice, Financiera shall provide Comisi6n with an amount of currency of the Guar- antor adequate to meet such deficit if and as it arises, and upon the comple,on thereof Comisi6n shall advise the Bank in writing concerning the details of the arrangements made. 12 ARTICLE VI Remedies of the Bank SECTION 6.01. If any event specified in paragraph (a) or paragraph (b) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of thirty days or if any event specified in paragraph (c) or pursuant to paragraph (h) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Bor- rowers, then at any subsequent time during the continuance thereof, the Bank, at its option, may declare the principal of the Loan and of all the Bonds then outstanding to be due and payable immediately, and upon any such declaration such principal shall becom due and payable immediately, anything in this Loan Agreement or in the Bonds or in the Guarantee Agreement to the contrary notwithstanding. SECTION 6.02. The following are specified as additional events for the purposes of Section 5.02(h) of the Loan Reg- ulations: (a) if the Guarantor or any governmental authority shall take any action for the dissolution or disestablish- ment of either of the Borrowers or for the suspension of the operations of either of them; or (b) if by action of the Guarantor or of any govern- mental authority, the ownership, possession or control of all or substantially all of the properties which are included in the Projects, or of any plant included therein, or of any property necessary for the operation thereof, shall be taken from Comisi6n; or (c) if any of the Events of Default set forth in Sec- tion 1 of Article VIII of the loan agreement dated January 6, 1949, between the Bank and the Borrowers shall happen under such loan agreement. 13 ARTICLE VII Miscellaneous . SECTION 7.01. The Closing Date shall be December 31, 1955. SECTION 7.02. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: (a) For the Bank: International Bank for Reconstruction and Development 1818 H Street, N. W. Washington 25, D. C. United States of America (b) For the Borrowers: Comisi6n Federal de Electricidad Calle de R6dano 14 Mexico 5, D. F., Mexico and Nacional Financiera, S. A. Avenida Venustiano Carranza 25 Mexico, D. F., Mexico SECTION 7.03. A date 90 days after the date of this Loan Agreement is hereby specified for the purposes of Section 9.04 of the Loan Regulations. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Loan Agreement to be signed in their respective names and delivered in the District of Columbia, United 14 States of America, as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT by EUGENE R. BLACK President ComIsioN FEDERAL DE ELECTRICIDAD by A.PEZ U. Director General NACIONAL FINANCIERA, S. A. by A. CORTINA Authorized Representative 0 0 15 SCHEDULE I Amortization Schedule Payment of Principal Amount Principal Outstanding After (Expressed Each Payment (Ex- Date Payment Due in dollars)* pressed in dollars)* February 1, 1955 - $29,700,000 August 1, 1955 $ 215,000 29,485,000 February 1, 1956 220,000 29,265,000 August 1, 1956 426,000 28,839,000 February 1, 1957 435,000 28,404,000 August 1, 1957 445,000 27,959,000 February 1, 1958 456,000 27,503,000 August 1, 1958 466,000 27,037,000 February 1, 1959 476,000 26,561,000 August 1, 1959 487,000 26,074,000 February 1, 1960 498,000 25,576,000 August 1, 1960 509,000 25,067,000 February 1, 1961 520,000 24,547,000 August 1, 1961 532,000 24,015,000 February 1, 1962 545,000 23,470,000 August 1, 1962 556,000 22,914,9000 February 1, 1963 569,000 22,345,000 August 1, 1963 581,000 21,764,000 February 1, 1964 594,000 21,170,000 August 1, 1964 608,000 20,562,000 February 1, 1965 622,000 19,940,000 August 1, 1965 636,000 19,304,000 February 1, 1966 651,000 18,653,000 August 1, 1966 664,000 17,989,000 February 1, 1967 679,000 17,310,000 August 1, 1967 695,000 16,615,000 February 1, 1968 710,000 15,905,000 August 1, 1968 727,000 15,178,000 February 1, 1969 743,000 14,435,000 August 1, 1969 759,000 13,676,000 February 1, 1970 776,000 12,900,000 August 1, 1970 794,000 12,106,000 February 1, 1971 812,000 11,294,000 August 1, 1971 831,000 10,463,000 February 1, 1972 849,000 9,614,000 16 Payment of Principal Amount Principal Outstanding After (Expressed Each Payment (Ex- Date Payment Due in dollars)* pressed in dollars)* August 1, 1972 868,000 8,746,000 February 1, 1973 888,000 7,858,000 August 1, 1973 908,000 6,950,000 February 1, 1974 928,000 6,022,000 August 1, 1974 948,000 5,074,000 February 1, 1975 971,000 4,103t000 August 1, 1975 992,000 3,111,000 February 1, 1976 1,014,000 2,097,000 August 1, 1976 1,037,000 1,060,000 February 1, 1977 1,060,000 - * To the extent that any part of the Loan is repayable in a cur- rency other than dollars (see Loan Regulations, Section 3.02) the fig- ures in these tolumns represent dollar equivalents determined as for purposes of withdrawal. 0 17 Premiums on Prepayment and Redemption The following percentages are specified as the premiums payable on repayment in advance of maturity of any part of the principal amount of the Loan pursuant to Section 2.05 (b) of the Loan Regulations or on the redemption of any Bond prior to its maturity pursuant to Section 6.16 of the Loan Regulations. Time of Prepayment or Redemption Premium Not more than 5 years before maturity 1/2% More than 5 years but not more than 10 years before maturity 1% More than 10 years but not more than 15 years before maturity 112 More than 15 years but not more than 20 years before maturity 2% More than 20 years before maturity 2% 18 SCHEDULE 2 Description of the Projects A. Tingambato Hydroelectric Project This project involves the construction of a 150,000 kw plant as a part of the Miguel Alema'n hydroelectric system in the State of Mexico. It will consist of the tunnels, dams, and other hydraulic works required for the plant, an un- derground power house, roads and housing. Three 50,000 kw generating units will be installed with the necessary auxiliary equipment. A complete step-up substation rated at 168,000 kva will be installed at the plant, and connected to about 150 km of double circuit transmission line running to the Tasquefia substation of the Mexican Light and Power Company, where two substations, each rated at about 84,000 kva, will reduce the voltage to 87 kv. Construction equip- ment and materials such as rock drills, piping, railway track, trucks and dynamite will be purchased by Comisi6n and transferred to the contractor, the cost of which will be set against payments due to the contractor for the civil works. B. El C'bano Hydroelectric Project This project will utilize the-flow of the Cupatitzio river in the State of Michoachn. It involves the construction of a 55,000 kw plant and will include the tunnels, canals, dams, syphons, penstock and other hydraulic works required by the plant. A portion of these works has been completed by Comisi6n del Tepalcatepec. An underground power house will be provided which will house two generating units rated at 27,500 kw each and the necessary auxiliary equip- ment. Two complete step-up substations will be installed at the plant, one rated at 55,000 kva stepping up to 161 kv, the other rated at 15,000 kva stepping up to 66 kv. A sin- gle circuit transmission line about 243 km in length will run from the plant to Guadalajara and will terminate in a step- down substation rated at 24,000 kva, 161 kv/70 kv. Three 19 66 kv single circuit lines having a total length of about 207 km will run from the plant to the towns of Zumpimito, Buena Vista and Inguardn. Seven substations having an aggregate capacity of 23,500 kva will be installed in the 66 kv system. C. Monterrey Steam Electric Project A 30,000 kw steam electric plant of the outdoor type will be constructed in Monterrey, Nuevo Le6n. Two boilers, with complete auxiliaries, will be provided, each connected to a 15,000 kw turbogenerator equipped with condenser and the necessary auxiliaries. Cooling towers and a travelling ,rane will be installed. Four connections to the Monterrey distribution system will be provided through four sub- stations having an aggregate capacity of 21,000 kva, 13.8 kv/4.6 kv. A 110 kv single circuit transmission line about 130 km long will connect at the plant to a complete step-up substation rated at 17,000 kva, 13.8 kv/110 kv. This line will run through the towns of Santiago, Montemorelos and Linares, where step-down substations each of 2,500 kva will be installed. Rural lines totalling about 77 km will con- nect with smaller towns and rural areas. Distribution facilities aggregating about 900 poles with lines, trans- formers and auxiliaries will be installed in the smaller towns. D. Veracruz Steam Electric Project A 10,000 kw steam plant will be installed at El Cocal about 10 km south of the city of Veracruz. It will consist of one boiler with complete auxiliaries connected to a 10,000 kw turbogenerator, complete with condenser, crane and other auxiliaries, including the necessary station electrical equipment. A complete 12,500 kva step-up substation will be installed at the plant. A single circuit transmission line about 10 km long will connect into the Veracruz system through a complete 3,000 kva, 44 kv/13.8 kv step-down sub- station. A second single circuit line about 47 km long will 20 run from the plant to Jose Cardel via Tejeria. It will connect through a switching station to an existing 44 kv line at Tejeria. A complete 3,000 kva, 44 kv/13.2 kv step- down substation will be installed at Jose Cardel. E. Sonora Transmission and Distribution Project A 15,000 kva, 13.2 kv/115 kv step-up substation will be installed in the Ciudad Obreg6n steam plant, and will con- nect into a 115 kv transmission line, running to Guaymas to the north and to Navojoa to the south, a total distance of about 180 km. Two step-down substations rated at 6,000 kva, 115 kv/33 kv and 1,000 kva, 115 kv/13.8 kv, respec- tively, will be installed at Navojoa. About 44 km of 33 kv transmission line will be run from Navojoa to the towns of Huatabampo, Etchojoa, San Pedro and Bocabampo, which will be served by three substations aggregating 1,200 kva. Another substation rated at 3,000 kva will be provided at Navojoa and will feed about 80 km of rural lines. In Ciudad Obreg6n, distribution substations aggregating 2,500 kva will be installed. A connection to the 115 kv line at Cruz de Piedra through a 3,000 kva, 115 kv/13.2 kv step-down sub- station to about 60 km of rural lines will be installed. A single circuit 115 kv line about 40 km in length will be run from Siete Cerros to San Rafael, and will terminate in a complete 5,000 kva, 115 kv/13.2 kv rural type step-down substation. F. Mot'l Steam Electric Project A 4,000 kw steam plant will be installed at Motil, Yuca- tOn. It will consist of two boilers, designed to burn hemp bagasse as fuel, and two turbogenerators each rated at 2,500 kva. The plant will he provided with all necessary auxiliaries. Six 13.8 kv transmission lines, the aggregate length of which will be about 200 km, will radiate from the plant. Distribution systems, aggregating about 1,000 poles and the necessary lines and auxiliaries, will be installed in seven -small towns to be served by this plant. ( 21 G. La Paz Steam Electric Project A 2,500 kw steam plant will be installed at La Paz, Baja California. It will consist of one boiler, one turbogenera- tor and the necessary auxiliaries. Two 13.8 kv transmis- sion lines will connect with an existing diesel plant in La Paz. A complete 3,000 kva, 13.2 kv/66 kv step-up substa- tion will be installed to feed a 66 kv line to be run to Los Planes and will terminate in two 1,500 kva, 66 kv/13.8 kv rural type substations. A distribution system of about 90 poles with necessary lines and auxiliaries will be installed in Los Planes. Estimated Construction Periods Project Start Finish A. Tingambato Hydroelectric Project January 1952 October 1955 B. El C6bano Hydroelectric Project In progress December 1953 C. Monterrey Steam Electrit Project In progress February 1953 D. Veracruz Steam Electric Project April 1952 March 1954 E. Sonora Transmission and Distri- bution Project In progress December 1953 F. Motfal Steam Electric Project April 1952 December 1953 G. La Paz Steam Electric Project April 1952 December 1953 22 SCHEDULE 3 Estimated Cost of Projects Foreign Ex- Local change ex- Total Ex- currency in pressed in pressed in thousands of thousands thousands Project Mexican pesos of dollars of dollars* A. Tingambato Hydroelectric Project 64,270 13,798 21,222 B. El C6bano Hydroelectric Project 70,384 6,807 14,946 C. Monterrey Steam EIlectrit Project 12,471 3,839 5,288 D. Veracruz Steam Electric Project 5,576 1,767 2,411 E. Sonora Transmission and Distribution Project 6,165 1,868 2,582 F. Motfil Steam Electric Project 5,367 871 1,492 G. La Paz Steam Electric Project 3,273 750 1,127 Totals 167,506 29,700 49,068 * One dollar = 8.65 Mexican pesos. 23 SCHEDULE 4 Modifications of Loan Regulations No. 4 For the purposes of this Agreement the provisions of Loan Regulation No. 4 of the Bank, dated December 6, 1950, shall be deemed to be modified as follows: (a) The second sentence of Section 2.02 of Loan Regula- tions No. 4 shall be deemed to read as follows: "Such commitment charge shall accrue from the Effec- tive Date or from April 15, 1952, whichever shall be the earlier, or from such other date as may be agreed upon between the Bank and the Borrowers, to the re- spective dates on which amounts shall be withdrawn by the Borrowers from the Loan Account as provided in Article IV or shall be cancelled pursuant to Article V." (b) The term "Borrower" as used in Loan Regulations No. 4 shall be deemed to refer to the Borrowers; except that, as used in Sections 5.02(c), 5.02(d), 5.02(g) and 7.02 of the Loan Regulations, such term shall be deemed to refer to the Borrowers or either of them. (c) The term "Project" as used in Loan Regulations No. 4 shall be deemed to refer to the Projects as described in Schedule 2 to this Loan Agreement. (d) The last sentence of Section 4.02 shall be deemed to be deleted.