Colombian Utility in Restructuring of Power Purchase Agreement

October 28, 2005

Cleary Gottlieb represented Colombian utility provider EMCALI E.I.C.E. E.S.P. in the restructuring of its obligations, estimated to amount to more than $300 million, under a Power Purchase Agreement with TermoEmcali I S.C.A. E.S.P. Restructuring agreements were executed on June 7, subject to the successful completion of an exchange offer for TermoEmcali debt securities. The exchange offer finalized on September 9 with 100% participation, and the transaction closed on October 28.

Emcali, the state-owned provider of water, electricity and telephone services for Colombia’s second largest city, is Colombia’s third largest utilities company. TermcoEmcali is a project company majority-owned by Intergen (and following the sale of Intergen earlier this year, by affiliates of Shell and Bechtel).

Emcali’s obligations under the PPA will be restructured through the termination of the PPA, the making of scheduled indemnification payments with a present value of approximately $165 million to TermoEmcali over the next 15 years, and the guarantee by Emcali of certain liabilities of TermoEmcali. Emcali will also acquire a controlling ownership interest in TermoEmcali as part of the deal.

Cleary also assisted Emcali in the restructuring of its obligations to local creditors, the central government and multilaterals. That restructuring closed in the first quarter of 2004 but was conditioned on the successful restructuring of Emcali’s obligations under the PPA.