Debt service reserve letter of credit fac

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In previous Colombian power projects, such as takings were necessary. The bank letter of credit facility provided a credit enhancement partly to replace the government guarantee or power-purchase commitment common in previous power project financings.

The US$13.2 million debt service letter of credit facility, equal to six months principal and interest payments, supports temporary shortfalls in debt service payments to the 144A note holders. Drawings are available at whichever is the earlier date among the commercial operation date, the guaranteed completion date under the EPC contract or a 'date certain' - defined as 34 months plus allowable force majeure delays. Principal payments are subordinated to the other senior loans. The debt service reserve lenders have a right to 'step up' or upgrade their principal repayment status to be pari passu with all senior secured indebtedness if loans under the facility are not paid on time or if the project debt is accelerated. Fees and interest on the facility rank pari passu and share collateral with senior debt.

Sources and uses of funds in connection with development, construction, financing, and commencement of commercial operation of the project were estimated, and are shown in Exhibit 3.5.

Termobarranquilla, state guarantees or under-

Exhibit 3.5

Sources and uses of funds

Sources

(US$ million)

Sponsor equity

44.8

144A note issue

165.0

Total sources of funds

209.8

Uses

(US$ million)

EPC price (net)

123.3

Interconnection/meter

0.8

Land purchase

2.0

Development budget

15.0

Legal fees during development

7.6

Financing and legal fees

5.7

Quorum engineering fees

1.4

Owner's construction administration

2.5

Independent engineering during construction

0.2

Startup costs

5.6

Insurance during construction

2.9

Taxes and duties during construction

6.8

Environmental management

0.2

Interest during construction (net)

25.0

Contingency

10.0

Pre NTP

0.8

Total uses of funds

209.8

Source: Prospectus for project bonds.

Source: Prospectus for project bonds.

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    What is dsr letter of credit?
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