SGT Concession Agreement 500 kV Nueva Yanango Nueva ... · “500 kV Nueva Yanango – Nueva Huánuco and Related Substations Link” (Second Version) April 12th 2017 Important: This

“Año del Buen Servicio al Ciudadano”

Comité PRO CONECTIVIDAD

SGT Concession Agreement

“500 kV Nueva Yanango – Nueva Huánuco and Related

Substations Link”

(Second Version)

April 12th 2017

Important: This is an unofficial translation. In the case of divergence between the English and

Spanish text, the version in Spanish shall prevail

500 Link Nueva Yanango-Nueva Huánuco and Associated Substations Page 2 of 98 Second Version 04.12.17



Table of Contents

Page

1. Preliminary statements

2. Statements by the parties

3. Purpose, duration and term of the Agreement

4. Construction

5. Commercial operation

6. Contracts with third parties

7. Insurance contracts

8. Tariff regime

9. Concession financing

10. Force majeure and fortuitous event

11. Penalties and sanctions

12. Guarantee

13. Termination of the Agreement

14. Dispute settlement

15. Economic-financial balance

16. Tax regime

17. Assignment of rights

18. Amendments to the Agreement

19. Notifications.

Annexes

1 Project technical specifications

2 Project verification procedure

3 Definitions

4 Performance bond

4-A Operation Guarantee Format

5 Telecommunications

6 Forms 4, 4-A y 4-B (certified copies)

7 Project development deadlines

8 Project Narrative

9 Prior consultation

10 Referential Outline for the Project “500 kV Nueva Yanango- Nueva Huánuco and

Related Substations Link”, inquired before the National Service of Natural Areas

Protected by the State – SERNANP

11 Terms of reference – Project Engineering, Supply and Construction Supervision

“500 kV Nueva Yanango- Nueva Huánuco and Related Substations Link”




Project SGT Concession Agreement

“500 kV Nueva Yanango- Nueva Huánuco and Related Substations Link”

Mr. Notary: Please enter in your Public Deed Registry the Concession Agreement for the Guaranteed

Transmission System on the design, financing, construction, operation and maintenance of the “500

kV Nueva Yanango- Nueva Huánuco and Related Substations Link” project (hereinafter "the

Agreement"), signed by the Government of the Republic of Peru, through the Ministry of Energy and

Mines (hereinafter “the Grantor”), duly represented by the ___________________________ of the

Ministry of Energy and Mines, identified with National Identity Document _______________, and

domiciled at Las Artes Sur No. 260, San Borja, Lima, Peru, authorized by Ministerial Resolution

______________- MEM / DM, and the company __________________________________,

registered under Electronic Docket ______________ of the Corporation Registry of the Lima

Registry, domiciled at (S) _____________, and represented by ---------------------------, identified with

________________ , (a) ___________ citizen(s), who is (are) duly authorized by power of attorney

registered in Lima, Peru, under _________ Number ______ at the Corporation Registry of the Lima

Registry (hereinafter, “the Concessionaire”), under the following terms and conditions:

1. PRELIMINARY STATEMENTS

1.1 The Agreement results from the promotion process that PROINVERSION conducted under the Electricity Efficient Development Law (Law 28832), the Transmission Regulation (Supreme Decree 027-2007-EM), the Electricity Concessions Law (Executive Order 25844), the Electricity Concessions Law Regulation (Supreme Decree 009-93-EM), the Legislative Decree on the Framework for Private Investment Promotion through Public-Private Partnerships and Projects in Assets (Legislative Decree No. 1224) of Legislative Decree 1224, Legislative Decree on the Framework for Private Investment Promotion through Public-Private Partnerships and Projects in Assets (Supreme Decree No. 410-2015-EF) and other Applicable Laws and Provisions, as well as the following provisions and acts:

a) Ministerial Resolution 225-2015-MEM / DM of the Ministry of Energy and Mines published

on May 14, 2015, which instructs PROINVERSION to conduct the necessary tender process up to the contract award regarding the binding projects approved in the 2015-2024 Transmission Plan, which include the "500 kV Nueva Yanango- Nueva Huánuco and Related Substations Link" project.

b) Supreme Resolution 046-2015-EF published on October 27, 2015, which ratifies the PROINVERSION Directing Council agreement adopted at the August 11, 2015, session, that agreed to incorporate into the PROINVERSION private investment promotion process, the 2015-2024 Transmission Plan binding projects, referred to in Ministerial Resolution 225-2015-MEM / DM, including the "500 kV Nueva Yanango- Nueva Huánuco

and Related Substations Link " project.

c) The PROINVERSION Board of Directors Agreement adopted in its September 9, 2016 session, which approves the Promotion Plan that will govern the Tender, published in the official gazette -El Peruano- on September 17, 2016. The "500 kV Nueva Yanango- Nueva

Huánuco and Related Substations Link" project will be developed under the Public Private Self-financing modality.

d) The Agreement dated ____ / ____ / ___ adopted by the PRO CONECTIVIDAD

Committee awarding the contract.




e) The Ministerial Resolution ______________-MEM/DM, that authorized ______

______________________________________________________ to subscribe the

Agreement.

1.2 The Agreement has been negotiated, drafted and signed in accordance with the national law

of Peru; and its content, execution and other consequences arising from it shall be governed

under that law.

1.3 The Agreement subscription does not eliminate or affect the Concessionaire's obligation to

request, subscribe and comply with the Concession Agreement, which the Concessionaire

must obtain at the Ministry of Energy and Mines

1.4 In the Agreement:

a) Terms that begin with a capital letter, whether they are used in singular or plural, are

defined in Annex 3.

b) Terms beginning with a capital letter, whether used in singular or plural, which are not

defined in Annex 3 or other sections of the Agreement, shall be defined by the Tender

Documents or the Applicable Laws and Provisions, or correspond to terms that are

usually capitalized.

c) Any reference made in the Agreement to "clause", "annex", "section", or "subsection"

shall be understood as clauses, annexes, sections or subsections of the Agreement,

unless expressly stated otherwise.

d) The titles have been included for the sole purpose of systematizing the exhibition and

should not be considered as a part of it that limits or extends its content or to determine

the rights and obligations of the Parties.

e) The terms in the singular will include the same terms in the plural and vice versa. The

terms in masculine include the feminine and vice versa.

f) The use of the "or" disjunction in an enumeration shall be understood as excluding one of

the elements of such enumeration.

g) The use of the "and" conjunction in an enumeration shall be understood to include all

elements of such enumeration or list.

2. STATEMENTS BY THE PARTIES

2.1 The Concessionaire guarantee to the Grantor, on the Closing Date, the truthfulness and

accuracy of the following statements:

a) That: (i) is duly incorporated and validly existing in accordance with the Applicable Laws

and Provisions, (ii) is duly authorized for it Board or similar body to assume their respective

obligations corresponding as a result of the Agreement in all jurisdictions where such

authorization is necessary due to the nature of their activities or due to the ownership,

lease or operation of their assets, except in those jurisdictions where the lack of such

authorization does not have a material adverse effect on their business or operations; and

(iii) has complied with all the requirements necessary to formalize the Agreement and to

fulfill the commitments stipulated therein.

b) The Agreement subscription, submission and fulfillment by the Concessionaire it is included

within their powers and has been duly authorized by the respective Board or other similar

bodies.

c) The Concessionaire does not have to perform other actions or procedures to authorize the

subscription and fulfillment of its obligations under the Agreement. The Agreement has




been duly and validly signed and delivered by the Concessionaire, and is a valid, binding

and enforceable obligation for the Concessionaire to its terms.

2.2 The Grantor guarantees to the Concessionaire, on the Closing Date, the truthfulness and

accuracy of the following statements:

a) The Ministry of Energy and Mines is duly authorized in accordance with the Applicable

Laws and Provisions to act on behalf of the Grantor in this Agreement. The subscription,

submission and fulfillment of the Agreement by the Grantor are within its powers, are in

accordance with the Applicable Laws and Provisions, and have been duly authorized by the

Competent Government Authority.

b) No other action or proceeding on the part of the Grantor or any other competent

Government Authority is necessary to authorize the subscription of the Agreement or for

the fulfillment of the Grantor’s obligations contemplated therein. The Concessionaire has

validly signed the Agreement, and it is a valid, binding and enforceable obligation for the

Grantor to its terms.

2.3 The Concessionaire guarantees to the Grantor that for a period comprised from the Closing

Date until the completion of ten (10) years of Project Commercial Operation, the Qualified

Operator shall hold the Minimum Share and will be responsible for the Concession’s technical

operations, from Project design to the end of that term.

At the request of the Concessionaire, the Grantor will accept that the Qualified Operator be

replaced by another Person before the expiration of the stipulated period, provided that said

Person meets the minimum qualification requirements pursuant to the Tender Documents. If

the Grantor does not respond to the request in sixty (60) Days, the application shall be

deemed accepted, without prejudice to subsequent evaluation, in order to verify and / or

require compliance with the minimum requirements.

3. PURPOSE, DURATION AND TERM OF THE AGREEMENT

3.1 The Concessionaire undertakes to design, finance, supply the required goods and services,

construct, operate and maintain the Project, as well as provide the Service, all in accordance

with the Agreement, and the Applicable Laws and Provisions. For this reason, the

Concessionaire must define, among other things, the route and alignment that the Project will

follow, as well as provide for the necessary clearances to overcome contingencies and thus

comply with the construction deadlines. The location of the Project described in Annex 10 is

referential.

3.2 While the Agreement is in force, the Concessionaire shall be the owner of the Concession

Assets and shall use them for Service provision. Upon Concession termination, the

Concessionaire shall transfer the Concession Assets to the Grantor pursuant to the provisions

Clause 13 of the Agreement.

3.3 The Agreement becomes effective on the Closing Date and ends thirty (30) years after

Commercial Commissioning. The term of the Agreement includes the construction period and

the commercial operation period.

4. CONSTRUCTION

4.1 Electric rights (Definitive Concession Agreement for Electric Transmission), imposition of

easements and in general any other authorization or similar that, according to the Laws and

Applicable Provisions, require the Concessionaire to fulfill its obligations under the Agreement,

shall be Requested by the Concessionaire to the Competent Government Authority according




to the procedure and complying with the requirements set forth in the Applicable Laws and

Provisions.

The Grantor shall impose required easements pursuant to the Applicable Laws and

Provisions, but will not assume the costs incurred to obtain or preserve such easements.

In addition, if the Concessionaire so requires, the Grantor will use its best efforts to access

third party facilities, as well as to obtain permits, licenses, authorizations, concessions,

easements, rights of use and other surface rights and similar, in case these were not granted

by the Competent Government Authority in due time, despite having fulfilled the requirements

and procedures specified by the Applicable Laws and Provisions.

4.2 If applicable, the Concessionaire will acquire and carry out the corresponding land titling for

the new substation and the existing substation expansions, and will paid the compensations

for easement use. Likewise, the Concessionaire will acquire and install new equipment and

materials of recognized quality and from prestigious manufacturers in the electricity market in

the lines and substations, in accordance with this Agreement and complying with the

Applicable Laws and Provisions. Such manufacturers must have ISO 9001 certification. The

equipment and materials whose date of manufacture is after July 2015 and which have not

been used, should be considered as new.

Second-hand equipment or materials may be used only during the Project operation, if this is

inevitable, to temporarily deal with defects or failures, while replacing involved equipment or

materials, by new ones. These decisions will be communicated to OSINERGMIN, which will

carry out proper supervision, in accordance with the procedure approved for that purpose.

Compensation for the use of easements proceed under Law 29785 will be subject to Annex 9

provisions, incorporating the concept of Compensations contained in such Annex.

4.3 The Project’s Commercial Operation and other events indicated in Annex 7, must be produced

within the time periods set forth in that Annex.

When failure to comply with such deadlines is due to improper action or omission by a

Competent Government Authority or to delays not attributable to the Concessionaire, among

others, for pre-operative study approval or other authorizations issued by the COES related to

POC or permits, licenses, authorizations, concessions, easements, rights of use and other

superficial and similar rights necessary for the construction of the Project, such time periods,

for the concessionaire request, will be extended for a period equivalent to that of the

obstruction or stoppage, without prejudice, established in Clause 4.7. For which the written

communication of the Grantor shall be sufficed, notified in a maximum term of ten (10) days.

Action or omission by a Competent Government Authority will be considered to cause a

breach of the respective term, when obstruction or stoppage affect the critical roadmap of the

works.

Prior to the start of construction, the Concessionaire shall submit the Pre-operative Study to

the COES for approval, according to such entity’s requirements and procedures.

4.4 For the purposes of Clause 5.4, the Experimental Operation begins after:

a) OSINERGMIN approves the final report referred to in Clause 5.3, within the deadlines

stipulated in Annex 2.

b) The COES approves the Project connection to the SEIN, according to COES Procedure

PR-20 or the procedure fulfilling that role, and the Applicable Laws and Provisions.

4.5 The Concessionaire undertakes to hire and pay the expenses demanded by work supervision.

A company specialized in the supervision of high-voltage transmission lines will be hired,

which must not be a related company to the Concessionaire, and whose selection must




conform to the Terms of Reference stipulated in Annex 11 of the Agreement, and must be in

compliance with OSINERGMIN. Expenses for such supervision are part of the

Concessionaire's investment proposal.

The Supervising Company must start working at the beginning of the transmission system

engineering project (transmission line and high-voltage substation).

4.6 The schedule of activities that the Concessionaire plans to follow for the works’ execution, will

be delivered duly paged and initialized by the Concessionaire to OSINERGMIN and to the

Grantor, within a twelve (12) month term as of the Closing Date. The schedule shall contain

the milestones detailed in Annex 7 of the Agreement.

In the same period, it will also deliver the engineering project at a definitive Project level in

print and magnetic source files, and must include the Project Narrative specified in Annex 8,

and also the following sections: Supporting Calculations, Measurements, Supply and

Assembly Specifications, and Plans in Autocad format.

Prior to beginning construction, and within a period of twenty-five (25) days following receipt of

the engineering project at definitive level, the Supervising Company will issue a Report which

verifies that such engineering project complies with the technical scope specified in Annex 1

and the pre-operative study. If there is a technical scope discrepancy, the pre-operative study

will prevail. The Supervising Company shall forward the Report to the Grantor, OSINERGMIN

and the Concessionaire.

4.7 The schedule referred to in Clause 4.6 must be presented in US dollars, considering monthly

periods, in printed version, duly paged and initialized by the Concessionaire, and in a digital

version (MS Project). The digital version should enable OSINERGMIN to carry out verifications

in an automated way, and clearly identify the critical roadmap of the Works as a whole.

Progress reports submitted by the Supervising Company must be in accordance with the

current Schedule structure, with precise identification of the critical roadmap. In the event that

the critical roadmap is altered and that this entails a delay of more than thirty (30) calendar

days regarding the date scheduled for Commercial Commissioning, the Concessionaire shall

deliver to the Grantor and OSINERGMIN an updated schedule within ten (10) calendar days

following the occurrence of such event, detailing any implemented actions.

4.8 The Concessionaire shall submit to OSINERGMIN and the Grantor an updated version of the

schedule referred to in Clause 4.6, eighteen (18) months after the Closing Date.

4.9 A copy of the reports prepared by the Supervising Company stipulated in Clause 4.7, shall be

delivered to OSINERGMIN and to the Grantor on a monthly basis. Notwithstanding this,

OSINERGMIN may, through its own personnel or specialized companies, monitor the

execution of the works and carry out the construction quality technical inspection, at its own

cost and risk. The Concessionaire shall provide the reasonably required facilities, as long as

they do not affect the Project construction schedule’s normal development.

However, if deficiencies of such nature are detected during the inspection that alter the Project

scope, affect the facilities’ technical quality or jeopardize the quality of the Service, the Grantor

with a supporting information from OSINERGMIN shall request the Concessionaire to make

any necessary corrections before resuming the works or installations subject to observation.

4.10 As of the sixth month of the Closing Date, the Concessionaire shall report to the Grantor and

to OSINERGMIN on a monthly basis, within the first fifteen (15) calendar days following the

end of the reporting month, regarding the Project’s progress and including engineering

development, equipment and materials acquisition, construction of works and other relevant

aspects required by the Grantor and / or OSINERGMIN. The structure of this report will be

established by OSINERGMIN.




5. COMMERCIAL OPERATION

5.1 After the construction and internal operation tests, corresponding to equipment functional

tests, among others, and with the system not energized, the Concessionaire will proceed, in

the presence of the Inspector, the Supervising Company, the Grantor and OSINERGMIN, to

carry out the on-site verification tests, to verify, in accordance with the methodology

established in Annex 2, that the Project complies with the requirements indicated in Annex 1

and the pre-operative study. If there is a discrepancy in the technical scope the pre-operative

studies will prevail. The Concessionaire shall provide the Inspector with the facilities to carry

out the required technical inspections.

5.2 The Inspector referred to in the previous paragraph shall be chosen by the Concessionaire

from a list of at least three (3) companies that the Concessionaire shall propose within a

period of twelve (12) months before the date set for the Commercial Commissioning. The

Concessionaire may freely choose the Inspector, if the Grantor does not propose its list of

three (3) companies within the stipulated period.

The Concessionaire will be in charge of contract negotiation and Inspector contracting. The

scope of the Inspector's contract shall include the functions mentioned in this Agreement. The

Inspector fees’ cost will be covered by the Concessionaire.

5.3 Upon successful completion of Project verification tests, OSINERGMIN shall approve the final report referred to in Annex 2. Before Final Report issuance, OSINERGMIN may authorize the Concessionaire to energize the Project, if the COES has previously authorized the connection of the Project to the SEIN referred to in COES PR-20 Procedure or its equivalent.

5.4 After complying with the provisions of Clause 4.4, a period of Experimental Operation for a period of thirty (30) calendar days, with the Project connected to the SEIN and energized will begin. If the Project and its components operate during its period without interruption attributable to the engineering study, the operational study, to system material or equipment quality, then the Commercial Commissioning will begin.

In case of interruptions attributable to the engineering study, operational study, to system material or equipment quality, or to the constructive quality, during the period of Experimental Operation, the period of Experimental Operation shall be suspended by means of a communication issued by OSINERGMIN.

If the respective rectification and tests require a time greater than five (5) calendar days, a period of thirty (30) calendar days will re-start after the interruption. In case require equal or less time to five (5) days points out, the Experimental Operation period computation will continue.

On the day of the verification of the experimental operation compliance, the corresponding Act must be signed between OSINERGMIN and the Concessionaire

5.5 The right to receive the tariff referred to in Clause 8 of this Agreement, will start with Commercial Operation.

5.6 As of the Closing Date, the Concessionaire will be liable, in accordance with the Applicable Laws and Provisions, for damages, prejudice or losses caused to, or by, the Concession Assets. It will also be responsible for Service provision as from Commercial Commissioning.

The Concessionaire shall hold the Grantor harmless from any action or exception of legal, administrative, arbitral or contractual nature, regarding Concession Assets or Service provision, except if the damages are caused by the Grantor, its personnel, representatives, agents or the Inspector.

5.7 The Service shall be rendered in accordance with the Applicable Laws and Provisions to guarantee the Service quality, efficiency and continuity.




According to the applicable Laws and Provisions, the Concessionaire will allow third parties open access to this Agreement’s Essential Facilities, so that they can be connected to such facilities as long as it is economically and technically feasible and does not affect Service supply. In order to do so, the Concessionaire must allow the use of its facilities by third parties, who must assume expansion costs to be borne if necessary, as well as compensation for such use, in accordance with the stipulations in the Applicable Laws and Provisions.

5.8 The Concessionaire shall be a member entity of the COES prior to the beginning of Experimental Operation and shall supply the Service pursuant to the provisions established by

said agency, both under normal operating conditions, maintenance scheduling, and under state of alert, emergency or recovery, in accordance with the definitions that the COES assigns to each of these states.

5.9 The Concessionaire shall provide the Competent Government Authority with the information and inspection facilities it requires to control the correct performance of its obligations under the Agreement. Inspections must be carried out in a way that does not affect the Project operation.

5.10 The Concessionaire must maintain an updated inventory of Concession Assets, indicating

their characteristics, location, state of conservation, functioning and performance, manufacture

and installation dates, among others. Such inventory shall contain the Concession Assets

valuation in accordance with the Audited Financial Statements. The Concessionaire shall

submit to the Grantor and to OSINERGMIN, within a period of not more than nine (9) months

as from Commercial Commissioning, the first Inventory of Concession Assets indicating their

characteristics, location, conservation status, functioning and performance, manufacture and

installation dates, among others; along with the corresponding supporting documentation. The

Concessionaire shall update the Inventory of Goods annually and must be delivered to the

Grantor and to OSINERGMIN on June 30 of each year, maximum period, with the audited

financial statements of the immediate prior fiscal year.

5.11 The Concessionaire will implement and maintain an adequate quality assurance program that

complies with at least the provisions of the NTP-ISO-9001 standards during Project

construction and the NTP-ISO-9004-2 during Service operation, or those replacing them.

5.12 The Concessionaire will be sanctioned by paying the Grantor, when the line service outage

rate exceeds tolerance stipulated in Section 2.2.5 h) of Annex 1. The penalty calculation will

be determined by multiplying the above excess service outage rate by 0.5% of the

corresponding Tariff Base.

For this purpose, the procedure stipulated in Clause 11.3 of the Agreement shall apply.

This penalty shall apply regardless of the compensation in favor of third parties specified in the

NTCSE, due to poor supply quality or poor service quality.

5.13 The Concessionaire does not have the right to question in any way or in any place, the

Reinforcement to be executed in accordance with Sub section b) of Section 22.2, of Law

28832, nor the Tariff Base that OSINERGMIN had approved for Reinforcement. It can only

exercise or not exercise its preference right.

If the Concessionaire does not exercise its preference right to execute a Reinforcement in the

manner and time provided by the Applicable Laws and Provisions, the Grantor shall send the

Concessionaire a communication indicating the facilities that the Concessionaire must provide

during the bidding process, as well as the facilities, coordination and distribution of

responsibilities for the construction, operation and maintenance of the Reinforcement. The

additional costs incurred by the Concessionaire's activities under this Clause shall be covered

by the Concessionaire performing the Reinforcement.




If the Concessionaire disagrees in whole or in part with said communication, the dispute shall

be resolved in accordance with Clause 14. The Reinforcement tender process start is not

subject to the arbitration conclusion, but the Reinforcement tender process award will be.

6. CONTRACTS WITH THIRD PARTIES

6.1 All contracts, conventions or agreements entered by the Concessionaire with its partners and

third parties with direct relations of personnel operation and maintenance and services

provisions, except accession contracts with contracting clauses approved administratively and

the contracts to be subscribed with the Allowed Creditors, must include clauses that

contemplate the following:

a) Limit its validity period so that it does not exceed the Concession term in any case.

b) The waiver to file civil liability actions against the Grantor and its officials.

c) A clause allowing the Grantor, at its sole option, to assume the Concessionaire’s

contractual position in said contract, through an irrevocably authorized contractual

position transfer and done in advance by the corresponding legal person, in case of

Concession resolution or suspension for any reason, allowing the continuation and hence,

the exploitation, of such contracts in the same terms.

The Concessionaire shall submit to the Grantor and to OSINERGMIN, within ten (10) calendar

days after its conclusion and / or amendment, as appropriate, a copy of the contracts deemed

indispensable for Project execution and Service provision. Likewise, it must send a detailed

and complete list of all the signed contracts linked to Project execution and Service provision,

which will be sent within the first fifteen (15) calendar days of the respective year.

In no case shall the Concessionaire be exempted from liability to the Grantor, for actions or

omissions arising from execution of contracts signed with third parties, which may have an

impact on the Concession.

6.2 In its labor relations, the Concessionaire must conform to the labor laws and regulations in

force in the State of the Republic of Peru.

The Concessionaire’s national or foreign personnel employment contracts, the execution of

said contracts and the resolution thereof, are subject to the norms that regulate private activity

workers’ labor relations. Likewise, the special work regimes will apply if such cases arise.

The Concessionaire must strictly comply with the Applicable Laws and Provisions in labor

matters regarding the employer’s formal obligations (payroll books, payment slips, among

others), payment and withholding of pension amounts, as well as contractual and legal

obligations regarding occupational safety and health. The Concessionaire must comply in

particular with the provisions of Law 29783, Occupational Safety and Health Act, its

regulations and its amending, complementary and related norms or standards that replace it.

The Concessionaire must have its own or subcontracted team of personnel, to guarantee

adequate Service provision during the time agreed for operation, in any emergency situation.

In the event of the Concession resolution, the Concessionaire is solely responsible for the

payment of all labor benefits, remuneration and other legal benefits, conventional or unilateral,

owed to its workers until the Concession resolution date.

If the Concessionaire is legally ordered to pay any labor claim in favor of one or more

Concessionaire employees, which may have been generated during the validity of the

Concession, the Grantor may recourse against the Concessionaire.




The Concessionaire shall freely determine the amount of personnel required to comply with

the Agreement herein.

7. INSURANCE CONTRACTS

7.1 The Concessionaire will contract all the insurance policies required under this Agreement with

insurance companies that have a minimum rating of "A" or higher, whose evaluation has been

conducted by a domestic risk rating company, duly authorized by the Securities Market

Superintendence (SMV).

International reinsurers covering the risks of the insurer hired by the Concessionaire must

have a minimum rating of "A-", granted by an international risk rating entity that rates the

Republic of Peru, at the time of hiring and during successive renewals.

7.2 During the term of the Agreement, the Concessionaire, assuming all costs, including the

deductible, franchises and / or co-insurances, will take and maintain the following insurance

policies from the beginning of the work:

a) Liability insurance against any damage, loss or injury that may occur to property and

persons. The sum of five million dollars (US $ 5,000,000) is fixed as a guaranteed

minimum limit. In this case, the Grantor must appear as an additional insuree.

b) Insurance that covers the Concession Assets value. Policy contracting must be adapted

to the nature of each asset. The coverage will be at least the following: partial or total

damages, water or flood damage, earthquake, landslides, fire, terrorism, vandalism, civil

unrest, robbery, theft and misappropriation. It must cover an amount not less than the

maximum probable loss (MPL), the amount of which will be determined by a risk study

that the Concessionaire will contract with a specialized company of internationally

recognized prestige.

c) Labor insurance, as required by the Applicable Laws and Provisions.

7.3 Insurance certificates for each policy must have the following characteristics:

a) Contain a declaration in which the Grantor appears as an additional beneficiary as

appropriate.

b) Contain a declaration in which the insurance company has waived the rights of

subrogation regarding the Grantor.

7.4 If there is a case of underinsurance or of events not covered due to inadequate

Concessionaire insurance, the Concessionaire will be responsible for the uncovered amount.

7.5 The policies issued in accordance with the provisions of this clause shall contain the following

provisions:

a) The insurance company must communicate to the Grantor any Concessionaire payment

default, with an anticipation of not less than twenty-five (25) Days to the date in which

such omission can determine the total or partial policy expiration or loss. The notification

obligation shall also apply to cessation, withdrawal, cancellation or failure to renew any

insurance that the Concessionaire must maintain under the Agreement.

b) In case of Total Destruction, the Grantor will be the policy beneficiary. The insurance

company will pay the respective policy benefits by handing them directly to a trustee. The

trust formalization and its cost will be assumed by the Concessionaire. After receiving the

respective insurance benefits, the policy trustee will proceed to apply provisions in Clause

13.15 of the Agreement.

7.6 If the incident does not qualify as Total Destruction:




a) The Concessionaire undertakes to use the money received from the insurance to replace

and / or repair the property affected by the respective incident.

b) In case the insurance resources fail to replace or repair the affected property, the

Concessionaire will be responsible, at its cost, to cover the remaining amount.

c) The tasks entailed by replacement and / or repair of assets will be made in such a way

that the Service is not suspended but for the minimum necessary time.

8. TARIFF REGIME

8.1 For the purposes of this clause, the following definitions shall apply:

a) Tariff Base: Annual amount defined in Article 1 of Law 28832, to be acknowledged for

Service provision.

b) Investment Cost: the US $______________________ amount is the investment or

investment component referred to in Articles 24 and 25 of Law 28832 (forms 4, 4-C and 4-

D included as Annex 6). If applicable, this amount will be adjusted as stipulated in Annex

9.

c) Annual Operation and Maintenance cost: the US $______________________ amount. It

is the operation and maintenance efficient costs referred to in Articles 24 and 25 of Law

28832 (forms 4, 4-A and 4-B included as Annex 6).

d) Recovery Period: after thirty (30) years, counted from the beginning of Commercial

Operation.

e) Update rate: corresponds to the updating rate value referred to in Article 79 of the

Electricity Concessions Law in force at the date of bid submission.

f) Update Index: it is the WPSFD4131 index (Finished Goods Less Food and Energy), or

one of the same nature that replaces it; published by the Government of the United States

of America Department of Labor. The last data published as definitive will be used on the

date when regulation needs to be conducted. The initial index will be the last data

published as definitive on the bid submission month.

8.2 The Cost of Investment and the Cost of Operation and Maintenance indicated in Clause 8.1

are expressed on the date of Bid Submission. Said amounts shall be updated annually using

the Updating Index stipulated in Clause 8.1 Subsection f). In accordance with subsection 22.6

of Article 22 of the Transmission regulations.

8.3 The Tariff Base shall be governed by the provisions of Law 28832 and the Transmission

Regulations in force at the Bid Submission date.

8.4 OSINERGMIN establishes the Tariff Base in accordance with Articles 24 and 25 of Law 28832

and with Article 22 of the Transmission Regulations, using the Update Rate defined in Section

e) of Clause 8.1.

8.5 The Tariff Base shall be covered through compensations paid by users, in accordance with the

provisions of Law 28832 Article 26 and Transfer Regulation Article 27. For the monthly rate

calculation, the Update Rate defined in Clause 8.1 Subsection e) will be used.

8.6 The Tariff Base includes the annual settlement results to be made by OSINERGMIN in

accordance with what is stipulated in Transfer Regulation Law 28832 Article 24 (c) and Article

22 Section 22.4.

8.7 OSINERGMIN shall approve the detailed procedures required for the application of this

clause, including the income received in the Soles conversion to Dollars, the figure rounding,




the income pre-settlement and the Concessionaire's observations, as well as the information

and documentation that it must submit. OSINERGMIN Resolution. 200-2010-OS / CD, which

approved the so-called "Annual Liquidation Procedure for Guaranteed Transmission System

Electric Transmission Service Revenues", is applicable, or any resolution that acts in its stead,

modifies it or replaces it.

9. CONCESSION FINANCING

9.1 In order to comply with the Agreement objective, the Concessionaire may obtain its own or

third party financing as deemed appropriate.

9.2 During financing structuring, the Concessionaire may include guarantees to be granted to the

Allowed Creditors, including levies on the Concession Assets, the Concession itself, shares or

shares in the Concessionaire, or any rights that correspond to the Concessionaire under the

Agreement. For this purpose, the Grantor’s previous approval is required, and must be

pronounced within a period of no more than thirty (30) Days, counted from request receipt

submitted by the Concessionaire. In the event that the guarantees include only cash flows for

Service provision, the Grantor’s prior approval is not required.

9.3 If financing comprises or is guaranteed with the Concession Assets, the Concession itself, the

cash flows for Service provision or any right that corresponds to the Concessionaire under the

Agreement (hereinafter, Allowed Guaranteed Indebtedness), the Concessionaire must comply

with the following clauses.

9.4 Agreements that support the Allowed Guaranteed Indebtedness shall stipulate:

a) Financial terms including rate or interest rates, capital readjustments, payment terms and

other terms, which are customary for operations under similar conditions in the domestic

and / or international market.

b) That obtained resources:

i. Will be used solely for financing Concession Assets or as working capital for

exploitation of Concession Assets, as well as for building, equipping and operating

the Concession.




ii. Notwithstanding the foregoing, the long-term financing that the Concessionaire may enter may be used: (a) to pay bridge loans and other indebtedness used for Concession Asset acquisition, or for the provision of working capital necessary for Concession Asset exploitation; or (b) to replace loans from shareholders or from Related Companies, in accordance with Project risk reduction, and strictly observing the financial prudence provisions and the maximum indebtedness parameters recorded in the adopted financing agreements.

c) That none of these operations may have the direct or indirect effect of exempting the Concessionaire from its obligation to comply by itself with each and every Agreement provision and the Applicable Laws and Provisions.

d) In case of Agreement termination due to term expiration, the Concessionaire and the Allowed Creditors or third parties, undertake to eliminate or cause elimination and to lift or induce lifting of each and every one of the guarantees, charges and levies that could exist upon the assets, rights or Concession, within the terms reasonably indicated by the Grantor, even if the Concessionaire has outstanding obligations regarding Allowed Creditors or third parties.

9.5 Agreements that support the Allowed Guaranteed Indebtedness may stipulate:

a) That if the Concessionaire or the Allowed Creditor so requests, the Licensor shall send the Allowed Creditors, a copy of communications from the Concessionaire to the Grantor, and inform them of any event that could lead to Agreement termination. The Allowed Creditors will inform the Grantor of any communications sent to the Concessionaire whose copy they have requested.

b) That the Allowed Creditors may request from the Grantor the Concessionaire replacement without requiring consent from the Concessionaire, if there is a substantial default event, following what has been defined as such in each financing agreement. To make this request, the Allowed Creditors must have notified the Concessionaire of such event and proceeded in accordance with the financing agreement provisions.

For substitution of the Concessionaire the following process must be followed.

Purposes.

i) The Allowed Creditors shall introduce the Grantor to a company with

technical qualifications that it fulfills directly or through Related Companies, and with the Qualification requirements demanded in the Tender, to assume the Concessionaire’s contractual position and ensure Service continuity.

ii) The Grantor will not deny substitution with or without cause and will answer the request within thirty (30) Days; otherwise it will be considered as accepted.

The new concessionaire will have a term of one hundred and eighty (180) calendar days, counted from request presentation, to start its operation. Upon expiration of the aforementioned term, the Grantor shall have the right to request Agreement Termination.

c) That the Allowed Creditors, in the case of termination of the contract, shall have the right to receive the sums of money to be paid after the Concession tender, in accordance with the priority stipulated in Clause 13.15.

9.6 The Concessionaire, in the Financial Closing, will deliver the Grantor a copy of respective agreements with the Allowed Creditors, fiduciaries and any other Person that participates in the operation. Likewise, it must deliver a copy of any amendment to subsequently subscribed contracts or contract, within the thirty (30) days following subscription. In the same way, it will inform the Grantor half-yearly of debit balances with each creditor.




9.7 This Agreement does not provide for the granting or contracting of financial guarantees by the

State in favor of the Concessionaire.

10. FORCE MAJEURE OR FORTUITOUS EVENT

10.1 For the purposes of this agreement, there will be a fortuitous event or force majeure whenever

there is an event, condition or circumstance not attributable to the Parties equally, of an

extraordinary, unforeseeable and irresistible nature, preventing any of them from fulfilling the

obligations under their charge or causing their partial, late or defective breach. The event shall

be outside the Party’s reasonable control invoking the grounds, which despite all reasonable

efforts to prevent or mitigate its effects, will not be able to prevent the default situation from

being established.

Force majeure or fortuitous event include, but is not limited to the following:

a) Any external, internal or civil (declared or undeclared) act of war, state of siege, invasion,

armed conflict, blockade, revolution, mutiny, insurrection, civil turmoil or acts of terrorism,

that prevents the Concessionaire from completing the execution of the works or delivering

normal service within the term of the agreement.

b) Any workers’ strike that does not maintain a business or commercial relationship with the

Concessionaire or its suppliers, that prevents the Concessionaire from completing the

execution of the works or delivering normal service within the term of the agreement.

c) Any protest, act of violence or force carried out by communal, social, union, or political

organizations, or large public demonstrations that directly affect the Concessionaire for

reasons beyond his control, which are not attributable to him and which exceed its

reasonable control.

d) The discovery of archaeological remains that prevents the Concessionaire from

completing the execution of the works or ordering to stop by a provision of the Competent

Government Authority.

e) Any earthquake, flood, drought, fire, explosion, or any meteorological or hydrological

phenomenon, if it directly or partially affects the Concession Goods and / or the Work or

its elements and in turn prevents the Concessionaire from completing the execution of the

works or delivering normal service within the term of the agreement.

f) Any epidemic, contamination, plague or similar event that prevents or limits the

Concessionaire finish within the contractual term the works execution or from delivering

normal service.

g) The eventual destruction of Works, in whole or in part or damage to Concession Assets

as long as they prevent the Concessionaire comply with its obligations.

h) Eventual Concession Asset confiscation or requisition and the impossibility to recover

them, caused by the order of any public authority, for reasons not attributable to the

Concessionaire, that seriously affect the execution of the Agreement, preventing the

Concessionaire from complying with its obligations.

10.2 The Concessionaire may not invoke the approval or effects of Laws and Applicable Provisions

as force majeure or fortuitous event in relation to the fulfillment of its obligations, unless they

prevent it from complying with them.




10.3 Force majeure or a fortuitous event shall not release the Parties from their obligations

that are not affected by such events. The Party invoking force majeure shall make its best

efforts to ensure the resumption of the corresponding activity or service in the shortest

possible time after the occurrence of such events.

10.4 The Party that is affected by an event of force majeure or fortuitous event shall inform

the other Party of:

a. The facts that make up said event of force majeure or fortuitous event, within

the next seventy-two (72) hours of the event happening or the Party taking

notice of it; and

b. The total or partial restriction estimated period of their activities and the degree

of expected impact. In addition, it shall keep the other Party informed about the

development of such events.

Likewise, the Concessionaire may request, on grounds of force majeure or fortuitous event, if

circumstances so require, suspension of the concession term. In that case, the concession

term will be extended for a term equal to the period stipulated for the suspension.

The period extension due to force majeure or fortuitous event occur before the POC, will only

be approved as long as the events that motivate it are within the updated critical roadmap of

the Project.

The affected Party will have a maximum period of seven (7) Days after the event, to submit its

suspension request to the other Party, attaching a report, which must state at least:

I. The occurrence of the event, stating the date of commencement and the total or partial

obligation suspension estimated term.

Ii. The affected obligation or condition.

Iii. The degree of expected impact on the affected obligation or condition.

Iv. The adopted mitigation measures.

V. The proposed insurance scheme, contractual guarantees and other obligations

whose compliance is not directly affected by the event.

VI. Other actions arising from these events.

In the event that the affected Party does not submit the request for suspension within seven

(7) Days of the event, it will be understood that said event does not constitute an impediment

to the fulfillment of the obligations under its responsibility, except that within that same time

period justifies that it requires more time to comply with the content indicated above.

Within a period of no more than five (5) Days counted from the request for suspension or

extension time, the Party that received it shall submit its opinion to the other Party, otherwise it

shall be deemed favorable.

The declaration of suspension by force majeure or fortuitous event will not generate a

compensation right between the Parties.

10.5 In the event that one of the Parties does not agree with the classification of the event

-or its consequences- as Force Majeure or fortuitous event, it may resort to the dispute

settlement procedure in Clause 14.

10.6 At the construction stage, which runs from Closing Date to Commercial

Commissioning, none of the Parties shall be imputable for the non-performance of an

obligation or for its partial, late or defective performance, during the period in which the

obligated Party is affected by force majeure or a fortuitous event and provided that it proves




that such cause prevented its due fulfillment. The corresponding declaration of force majeure

or fortuitous event at this stage corresponds to the Grantor.

10.7 For the operation stage that starts with the Commercial Commissioning, the evaluation of

supply conditions temporary variation due to force majeure, fortuitous event or others, will be

governed by the guidelines approved for this purpose by OSINERGMIN, and the Applicable

Laws and Provisions.

In all matters not provided for by the guidelines approved by OSINERGMIN, the provisions of

Clauses 10.1 to 10.5 shall apply.

10.8 The investigation, assignment of responsibilities, determination and payment of compensation,

review or challenge, as well as any other matter related to the Electric Services Quality

Technical Standard and its complementary rules, shall be governed by the provisions of said

Standard, its complementary norms, Amendments, and Applicable Laws and Provisions.

11. PENALTIES AND SANCTIONS

A.- Penalties for contractual breaches

11.1 For each calendar day of delay in the beginning of Commercial Commissioning, as indicated

in Annex 7 and taking into consideration term extensions granted in accordance with Clause

4.3 and Clause 10, the Concessionaire shall pay to the Grantor, a penalty that shall be

calculated as follows:

500 kV Nueva Yanango- Nueva Huánuco and Related Substations Link

a) US $ 75,000 (seventy-five thousand United States Dollars) for each of the first thirty (30) calendar

days of delay.

b) US $ 150,000 (one hundred and fifty thousand United States dollars) for each of the thirty (30)

calendar days of delay subsequent to the period indicated in a).

c) US $ 225,000 (two hundred twenty-five thousand United States dollars) for each of the ninety (90)

calendar days of delay subsequent to the period indicated in b).

11.2 Non-compliance assumptions referred to in Clause 11.1 will cause the obligation to pay the

respective penalty, without requiring a prior notice, and the payment will not entail the

Concessionaire’s release from fulfilling its respective obligation.

11.3 Payment of the penalties referred to in Clause 11.1 is subject to the following rules:

a) Such payment will be requested in writing by the Grantor to the Concessionaire, indicating

the bank account in which he must deposit the corresponding amount, which must occur

within ten (10) Days after receiving the request.

Within the aforementioned period, the Concessionaire may contradict the origin of the

payment request, in which case a dispute will have arisen that will be resolved in

accordance with the provisions of Clause 14.

The period provided for in subsection (a) of the section herein for penalty payment shall

be suspended upon the request for contradiction of payment origin by the

Concessionaire, and the calculation of this period shall be resumed in the event that its

imposition is confirmed.

b) If the dispute is resolved in a manner favorable for the Grantor, either in direct negotiation

or by arbitral award, or after expiration of the ten (10) Days stipulated in Subsection a)




above, without the Concessionaire contradicting the request for payment, then the

obligation to pay the penalty is enforceable.

In this case, the obligation to pay the penalty must be fulfilled on the day following

expiration of said term, or after the next three (03) Days of Concessionaire notification of

arbitral award or after the next three (03) Days in which the Controversy is settled in direct

negotiation, as appropriate.

c) In case the Concessionaire fails to pay the penalty, the Grantor shall have the right to

request the respective guarantee execution.

11.4 A Two-Million Dollar penalty shall be applied in case of:

Breach or partial, late or defective compliance with provisions in the arbitral award issued as a

consequence of the controversy referred to in Clause 5.13 of the Agreement, or in the

communication referred to in the second paragraph of that same clause, as corresponds.

The rules in Clauses 11.2 and 11.3 also apply for this penalty.

B.- Administrative sanction for regulatory non-compliance

11.5 Failure to comply with the regulation provisions referred to in Clause 5.7 will be sanctioned by

OSINERGMIN, according to the Offense and Criminalization Sanction Scale established for

this purpose, which does not exclude compensations for poor supply quality or poor service

quality, specified in NTCSE, where applicable.

12. GUARANTEE

12.1 In order to guarantee the faithful fulfillment of its obligations under the Agreement, including

the payment of the penalties established in Clause 11.1, the Concessionaire shall deliver to

the Grantor a Bid Bond, in accordance with the following rules:

a) The Bid Bond must be joint and several, irrevocable, unconditional, without benefit of

excussion, or division and of automatic realization, issued by any of the banking

entities stipulated in Annex 6 of the Terms, following the format and by the amount

stipulated in Annex 4 of the Agreement. Its delivery is required for the Closing Date.

b) The Bid Bond must be in force from the Closing Date until one month after Commercial

Commissioning. Said bond letter shall be granted for annual periods until the

expiration of the term described above. Likewise, such Bid Bond shall be returned

against delivery of the Performance Guarantee described in Clause 12.2.

c) If Commercial Commissioning is delayed, the Bid Bond shall be renewed or extended

until the penalty is paid or until a definitive decision is made that no penalty shall be

paid, as the case may be.

12.2 In order to ensure the faithful performance of its obligations under the Agreement, including

the payment of the penalties stipulated in Clause 11.4, the Concessionaire shall deliver to the

Grantor the Performance Guarantee, in accordance with the following rules

a) The Performance Guarantee must be joint and several, irrevocable, unconditional,

without benefit of excussion, or division and of automatic realization, issued by any of

the banking entities stipulated in Annex 6 of the Terms, following the format and by the

amount stipulated in Annex 4-A of the Agreement.




b) The Performance guarantee must be delivered on the date of Commercial Commissioning and remain in force until six (06) months after the effective date of the Agreement.

c) The Performance guarantee shall be granted for annual periods and shall be renewed or extended until the Concession Asset transfer is completed or as long as disputes concerning the Agreement or termination remain.

12.3 If, upon expiry, the guarantees are not renewed or extended in accordance with Clauses 12.1 and 12.2, the Grantor may execute the respective security in full, in which case the funds

resulting from the execution shall be automatically provided, without need for additional approval, in the Corresponding guarantee, until the Concessionaire gives the Grantor a new guarantee. Upon delivery, the Grantor shall proceed immediately to pay to the Concessionaire the funds resulting from the execution of the original guarantee, without interest.

12.4 In the event of Performance Bond partial or total execution, the Concessionaire must return it to the original amount and in the same conditions established in Clauses 12.1 and 12.2, which must be carried out within thirty (30) calendar days following the date on which the guarantee was executed, whether partially or totally, except when it was executed in compliance with Clause 13.11. In the event that said period expires without the Concessionaire fulfilling the total amount, the Grantor may exercise its right to terminate the Agreement provided for in Clause 13.

13. TERMINATION OF THE AGREEMENT

13.1 The Agreement will terminate due to:

a) Expiration of the term. b) Termination by mutual agreement. c) Termination due to breach by the Concessionaire d) Termination due to breach by the Grantor e) Termination due to unilateral decision by the Grantor f) Termination due to force majeure or fortuitous event g) Definitive Electricity Transmission Concession Expiration.

h) Termination due to application of Anti-Corruption Clause.

13.2 Termination for expiration of the term

The concession will terminate at the expiration of the period established in Clause 3, unless there has been a concession term extension or suspension.

13.3 Termination due to mutual agreement

The Agreement will terminate, at any time, by written agreement between the Concessionaire and the Grantor. At least sixty (60) Days prior to the implementing the agreement, the Concessionaire shall notify the Allowed Creditors of this fact.

13.4 Termination due to breach by the Concessionaire

13.4.1 Notwithstanding any penalties that may be applicable, the Agreement may terminate in case the Concessionaire incurs in serious breach of its contractual obligations. Notwithstanding the penalties and sanction application that may be applicable, the following shall be considered as grounds for serious breach of the Concessionaire's obligations.

a) After signing the Agreement, any of the statements formulated in

Clause 2.1 have been verified as false.




b) Delay for more than one hundred and fifty (150) calendar days in any of

the milestones stipulated in Annex 7, considering the term extensions

granted according to Clause 4.3 and Clause 10.

c) Non-renewal, extension or refunding of the guarantees, as provided in

Clause 12.

d) Project operation stoppage, without justifiable cause, as indicated in the

Applicable Laws and Provisions.

e) Even after being administratively sanctioned by OSINERGMIN,

persistent non-fulfillment of its obligations to provide the Service within

the prescribed time limits and in accordance with the safety standards

and quality standards established in the Agreement and in the relevant

technical standards, provided that said sanctions had been firmly

established in the administrative and judicial body if the corresponding

administrative contentious process had been filed.

f) Partial or total transfer of the Agreement, by any title, without the

Grantor’s prior approval.

g) Being penalized with non-tax administrative fines issued by the Grantor

or OSINERGMIN, that in one (1) calendar year - defining the calendar

year as the period between January 1 and December 31 - exceed ten

percent (10 %) of the previous year Tariff Base, provided that said fines

had been firmly established in administrative headquarters, and that the

respective litigation had been filed in court. This is applicable from the

second year of commercial operation.

h) Initiation, at the request of the Concessionaire of a process of merger,

division or transformation of companies or other corporate

reorganization, without the Grantor’s corresponding authorization.

i) Declaration of insolvency, bankruptcy, dissolution or liquidation.

j) Initiation, at Concessionaire request, of a corporate, administrative or

judicial process for its dissolution or liquidation.

k) Disposition of Concession Assets in a manner different from that

provided for in the Agreement by the Concessionaire, without the

Grantor’s prior and written authorization.

l) Passing of a final judicial sentence for a public action crime to the

Grantor’s detriment that generates a serious impact on the Concession.

m) Issuance of a final or enforced judicial order or a firm administrative

decision that prevents the Concessionaire from performing a

substantial part of its business, provided that any of these measures is

in force for more than sixty (60) calendar days

n) Failure to contract the insurance or the contracting of it without

stipulating the conditions set forth in Clause 7.

o) Contracting of financing contracts referred to in Clause 9.1 without

including stipulations in Clause 9.4, or breaching these if they were

included.

p) Failure to comply with provisions in article 13 of Supreme Decree 410-2015-EF, referred to contracting any private sector individual or legal entity, to prepare Project studies and consultancies, during its promotion process.




q) Non-compliance with any of the activities requested by the Grantor, indicated in the second paragraph of Clause 5.13 of the Agreement.

r) Serious and repeated unjustified failure to comply with any obligation of a substantial nature established in the Contract or the Applicable Laws and Provisions, other than those referred to in the preceding paragraphs

13.4.2 The Grantor may also terminate the Agreement, if the Concessionaire does not comply with the obligations of the Qualified Operator during the term required in the Agreement, related to:

a) Maintain the Minimum Share. b) Keep or exercise the right and obligation to control technical operations.

The cases referred to in Clause 13.4 are grounds for termination, only if following a written request is produced, the requested Party does not remedy the non-compliance, to the satisfaction of the other Party, within thirty (30) calendar days, extendable up to thirty (30) additional calendar days, counted from the communication’s date of receipt.

13.5. Termination due to breach by the Grantor

The Concessionaire may terminate the Agreement in case the Grantor incurs in a serious breach of the contractual obligations under its responsibility, as detailed below:

a) In case any of the periods indicated in Annex 7 were extended for more than six (6) months, due to an action or omission by a Competent Government Authority as indicated in Clause 4.3.

b) In case the term stipulated in Article 24 of Supreme Decree 001-2012-MC or its modification were extended in eighteen (18) additional months.

c) In case the sum of the Compensations, Restrictions or Differences due to Location, as defined in Annex 9, exceeded fifteen percent (15%) of the Investment Cost described in Section 8.1 (b)

d) In case the Grantor, unjustifiably, severely and repeatedly, breached any of its obligations under the Agreement or the Applicable Laws and Provisions.

e) In case of unjustified failure to comply with the procedure established for economic-financial balance restoration established in the Agreement.

f) If within the framework of the Preliminary Consultation process carried out by the Grantor, the Concessionaire decided not to grant the definitive electricity transmission concession despite the fact that the Concessionaire had accredited compliance with the requirements established in Article 25 of the Electricity Concessions Law.

The cases referred to in Clause 13.5 are grounds for termination, only if following a written request, the Party does not remedy the non-compliance, within thirty (30) calendar days, to the satisfaction of the other Party, extendable up to thirty (30) additional calendar days, counted from the date of communication receipt.

13.6 Termination due to unilateral decision by the Grantor

For reasons of duly motivated public interest, the Grantor has the power to resolve the

Concession Agreement, and must notify the Concessionaire in advance, not less than six (6)

months prior to the termination of the Agreement. In the same period, it must notify such

decision to the Allowed Creditors.

Said communication must also be subscribed by the Competent Governmental Authority to

address such public interest problem.




During these six (6) months, the Concessionaire will not be obliged to comply with the

obligations established in the Agreement that imply making investments, except for the

replacement of scheduled assets.

13.7 Resolution due to force majeure or fortuitous event

13.7.1 The Grantor or the Concessionaire shall have the option to resolve the Agreement

due force majeure or fortuitous event, provided that it is verified that it is any of the

events mentioned in Clause 10 and that a period of 12 (Twelve) continuous months

since the event began has elapsed.

Additionally, in order for the event of force majeure or fortuitous event to be cause

for termination of the Agreement, it shall:

a. Prevent any of the Parties from complying with their obligations or cause them to

be partially, late or defective; and

b. Create a loss of operational capacity greater than sixty percent (60%) of the

capacity reached at the occurrence of the force majeure or fortuitous event.

13.7.2. In the case, of total Destruction the procedure is the following:

a. The Parties shall evaluate the technical and economic convenience of restoring

the damages and the terms and conditions under which the reconstruction and the

recommencement of the Service would be carried out.

b. The Contract will be terminated automatically if sixty (60) Days have elapsed since

the Total Destruction took place, without the parties having agreed according to the

previous literal. In this case, the period established in number 13.7.1

The benefits received from the insurance plus the amounts obtained from the bidding

for Concession Assets not affected by the Total Destruction shall be considered as

"the proceeds of the bidding" for the purposes of Clause 13.15, and the trustee

Referred to in Clause 7.5 b) shall pay the debts of the Concession, following the

order established in Clause 13.15.

13.8 Definitive Electricity Transmission Concession Expiration

The Grantor may terminate the Concession Agreement, in the event that the resolution

declaring definitive expiration of the concession, had been firmly established administratively

and had the corresponding administrative contentious process been filed in the judiciary.

13.9 Anti-corruption Clause

The Concessionaire declares that neither he nor his shareholders, partners or related

companies, nor any of their respective directors, officers, employees or, nor any of their

advisers, representatives or agents, have paid, offered, attempted to pay or offer, nor Will

attempt to pay or offer in the future any unlawful payment or commission to any authority

related to the granting of the Good Proof of the Bid, Grant or execution of this Agreement

It is expressly established that in case it is verified that any of the natural or juridical persons

mentioned in the previous paragraph, have been condemned by a consent or enforced

sentence, or have admitted and / or recognized the commission of any of the offenses

established in Section IV of Chapter II of Title XVIII of the Penal Code, or equivalent offenses

if they have been committed in other countries, before any competent national or foreign




authority. In relation with the execution of this Contract, the Concession or the Bid award, the

Contract shall be resolved in full right and the Concessionaire shall pay to the Grantor a

penalty equal to ten percent (10%) of the product of the Contract Bidding referred to in Section

j) of Clause 13.13, without prejudice to the performance of the Bid Bond or the Performance

Guarantee, as applicable.

In order to determine the economic correlation referred to in the first paragraph, the provisions

of SMV Resolution N° 019-2015-SMV / 01

13.10 In order to terminate the Agreement, except in the case stipulated in the previous paragraph,

the following procedure shall be followed:

a) The Party affected by the non-compliance or the event that would give rise to the

resolution, shall communicate in writing to the other Party through a notary, its intention to

terminate the Agreement, describing the non-compliance or event and indicating the

respective resolution clause.

b) Once the Agreement resolution notarized letter has been received, the recipient may

express his disagreement with the existence of a cause for resolution, for whose effects

he must submit to the other Party a notarized letter, which must be received in a term of

fifteen (15) Days, counted from the date the first notarized letter was received. In this case

it will be understood that there is a controversy conflict regarding Agreement termination,

making Clause 14 applicable.

c) Once the period of fifteen (15) Days has expired and if the first notarized letter recipient

has not expressed his disagreement, the Contract shall be deemed resolved on the date

said letter was received.

d) If the resolution is declared by means of an award or in case the assumption of

Subsection c) takes place, the following clauses should be applied.

13.11 In case of termination of the Contract in accordance with Clauses 13.4, 13.8 or 13.9, the

Concessionaire shall execute the Performance Guarantee of the Contract or the Operation

Guarantee, as applicable, without any right to any reimbursement to the Concessionaire. In

addition, the Grantor shall have the right to appoint the Comptroller of the Concession, in

accordance with the following clauses of the Contract

13.12 Once any of the assumptions stipulated in Clause 13.1 occurs, the Grantor will proceed to

intervene the Concession. This process involves preparing the corresponding Tender. The

intervention process is subject to the following rules:

a) Intervention begins:

i) On the date established by the Parties, in case of termination through resolution by

mutual agreement.

ii) Twelve (12) months before the due date for the Agreement expiration term, in case

of termination by Agreement expiration term.

iii) On the date indicated by the Grantor, according to the Laws and Applicable

Provisions, in case of Agreement termination due to Expiry of Electricity

Transmission Final Concession. Judicial challenge of the ministerial resolution that

declares the expiration of said Agreement, does not postpone the beginning of the

intervention.




iv) On the date specified by the Grantor when the procedure referred to in Clause

13.10 is initiated, in case of termination by Agreement resolution for the grounds

stipulated in clause c), d), e) and f) of Clause 13.1.

v) On the date stipulated by the Grantor, in case of termination by Agreement

resolution for the reason established in subsection h) of Clause 13.1.

b) Completion of the intervention is subject to the following rules:

i) The process concludes eighteen (18) months after the intervention starts or when

the new concessionaire enters, whichever occurs first.

ii) The Grantor shall assume full and direct administration of the Concession Assets and Service Supply, as soon as Concession transfer is completed, in the following cases: If the new concessionaire has not been elected after eighteen (18) months of

intervention, unless the Parties agree to the continuation of the Concessionaire's participation.

If, during the intervention process, the Concessionaire becomes insolvent, or if for any other reason, it is unable to maintain the Service or implement the instructions provided by the Financial Controller.

iii) If Agreement termination is due to an expiration declaration of the Electricity Transmission Final Concession and the Concessionaire has decided to challenge this declaration in court, the intervention will be extended for the entire period until the challenge concludes, then, the provisions of subsections (i) and (ii) above will apply.

C) The financial controller may be a Person, a committee of natural persons or a directorate or line body of the Ministry of Energy and Mines, as the Grantor may choose, and shall, for the sole merit of its designation, have the broadest powers to: Determine administrative actions that allow the construction phase continuation or

Power Line operation, as appropriate; and, Determine the technical actions that may allow for timely and efficient Service

supply.

d) While the Agreement is in force or a dispute remains in force, the Concessionaire shall continue to supply the Service during the intervention, but shall be obliged to comply with the Financial Controller's instructions. However, the Concessionaire may request a reconsideration of such instructions before the General Directorate of Electricity at the Ministry of Energy and Mines, which must be resolved within five (5) Days; otherwise, it will be deemed accepted. The Concessionaire shall not be liable for damages arising from the Financial Controller's instructions.

e) All expenses required for the intervention shall be under the account and charge of the Concessionaire, except when the intervention occurs for any cause attributable to the Grantor. In the latter case, intervention expenses shall be subject to provisions in Clause 13.15 (a).

f) While the Agreement is in force or if there is a dispute in this respect and the Concessionaire is providing the Service, it will be entitled to receive all the income generated by the Concession during the intervention, notwithstanding provisions in subsection e) above.

13.13 The Concessionaire shall organize and carry out the Concession tender, which shall be subject to the following rules:




a) The Ministry of Energy and Mines, or PROINVERSIÓN on behalf of the latter, have the broadest powers to organize, convene and execute a public tender for transferring the Concession and handing over Concession Assets to the new concessionaire within a term not exceeding nine (09) months, as from the date on which the resolution of the Contract is declared, or the award is granted.

b) Bidders for the tender will be qualified by the Grantor or PROINVERSIÓN, as applicable. The Concessionaire, its main partners and the Related Companies of both cannot be bidders in the event of Agreement termination due to expiration of the

Electricity Transmission Final Concession, or resolution due to a cause attributable to the Concessionaire.

c) The tender competition factor will be, as applicable:

i) In case the Concession terminates due to expiration of Agreement term, the one established by the Applicable Laws and Provisions.

ii) In case of Concession termination for causes other than Agreement term expiration, an amount of money. If the event precedes Commercial Commissioning, the base amount of the first call for tenders shall not be less than the Carrying Value of the Concession Assets in addition to any pre-existing expenses (provided they do not fall within the Concession Assets and that they are approved by the Grantor), including interest during the construction stage, calculated at the Concession termination date. If the event occurs after Commercial Commissioning, only the total Carrying Value of the Concession Assets of the will be acknowledged. In the absence of bidders and if there is a second call, the Grantor in the new call may reduce the base amount of the immediately preceding call by up to twenty-five percent (25%).

d) In case a call is declared void or the corresponding agreement is not signed, no more than sixty (60) Days may elapse for the publication of the next call.

e) The public tender winner will be the one that submits the best economic offer for the Concession, within the terms of the respective tender documents. In the case referred to in subsection c) ii) above, the payment made by said successful bidder shall be in cash, in Dollars and within the term established in said tender documents.

f) The new concessionaire must sign a new Concession Agreement with the Grantor, which will be formulated by the Grantor or PROINVERSIÓN, taking into account the

Applicable Laws and Provisions in force at that moment. g) In case the Concession terminates due to Agreement term expiration, the Bidding for

the Concession will only take place if the current Transmission Plan determines the need for continuing the Service in accordance with the Applicable Laws and Provisions.

h) In the case referred to in Clause 13.12 (c). (ii), if a first or second call for tenders is not undertaken, if the second call is void, or if the corresponding agreement is not signed, the Grantor shall be bound to pay, whichever is less, between: i) the base amount of the first or second call; and (ii) the Carrying Value of the Concession Assets, plus pre-operative expenses (provided they are not included in the Concession Assets and approved by the Grantor), if the event precedes Commercial Commissioning; or iii) the Carrying Value of the Concession Assets if the event occurs after Commercial Commissioning. The payment term shall not exceed sixty (60) Days counted from expiration of the term referred to in Sections13.12 a) and 13.12 d), as applicable. The interest accrued will be acknowledged for the period elapsed from expiration of the 60-Day aforementioned. Such interest will be calculated at a rate equivalent to the average LIBOR rate at six (6) months plus a spread of 2% during the six (6) months prior to the payment date.




The amount the Grantor will pay to the Concessionaire shall be subjected, as appropriate, to the rules established in Clause 13.15. The foregoing shall not be applicable to the Grantor's payment obligation described in Clause 13.17.

i) If the Agreement terminates by resolution due to a cause other than Total Destruction, and the Concessionaire determines that the Project should not continue in use, the Grantor shall be obliged to pay the Carrying Value of the Concession Assets. The amount to be paid shall be subject to the rules established in Clause 13.15.

j) Payment by the successful bidder referred to in Subsection e), or the amount to be

paid by the Grantor referred to in Subsection h) of the Clause herein, will be “product of the concession” and will be deposited in a trust previously established by the Concessionaire assuming the corresponding expenditures.

13.14 Transfer of the Concession Assets shall be subject to the following rules:

a) Concession Assets will be handed over to the new concessionaire, the Grantor or the person it decides in case the Grantor assumes full and direct Concession administration, in such a way that Concession Assets can continue to be exploited by the new concessionaire or the Grantor to supply the Service on an uninterrupted basis.

b) The Concessionaire shall transfer ownership of Concession Assets to the State, free of all charges or encumbrances.

c) Among the assets to be handed over, the following technical information will be included:

(i) A file of Plans depicting how the facilities have been built.

(ii) Projects and studies carried out in connection to the Project.

(iii) Technical information on each of the assets.

(iv) Project operation and maintenance procedures and manuals.

(v) Service quality assurance manuals.

(vi) Any other information relevant to Service continuity.

d) Agreements entered into with third parties shall also be transferred, to the extent that the Grantor or the new Concessionaire accepts the assignment, and provided that such Agreements have not been concluded at the end of the Concession.

e) The Concessionaire will return the Concession Assets in good operating conditions, except for normal wear and tear as a result of time and normal use. The Parties shall sign a handover record.

f) The Concessionaire must provide its full cooperation, towards an orderly handover of the Concession Assets, so that there is no Service supply interruption. The Concessionaire shall execute the public deeds and other private or public documents required for Concession transfer, including, if applicable, assignments of rights, assignments of contractual position or other Agreements.

g) In all cases of Concession termination and for the purposes provided in Article 22 of the TUO of the norms with the rank of law that regulate the handover in concession of public works of infrastructure and public utilities to the private sector, approved by Supreme Decree No. 059-96-PCM (TUO), in force according to the Supplementary Provision that repeals Legislative Decree No. 1224, it will be understood that Concession Assets are transferred to the State.

Transfer of Concession Assets to the State shall be unaffected by all taxes introduced or to be introduced, pursuant to Article 22 and the Tax Benefits Regulation for Private Investment in Public Works of Infrastructure and Public Utilities, approved by Supreme Decree No. 132-97-EF.




h) All costs and expenses required for Concession Asset transfer shall be borne by the Concessionaire.

13.15 The Concessionaire shall pay to the Concessionaire the proceeds of the bidding as set forth in Clause 13.13, up to a maximum equivalent to the Book Value of the Concession Assets. The excess amount of the product of the bidding above the Book Value of the Concession Assets, if any, shall correspond to the Grantor. The distribution of the product of the tender shall be subject to the following rules:

a) From the amount indicated in this Clause and up to where said sum reaches, the Concessionaire will pay, the penalty established in the Clause 13.9, the direct expenses incurred by the Grantor connected to the intervention and bidding processes, and then pay according to the following order:

i) Remunerations and other labor rights of the Concessionaire's employees, accrued until the date of payment and which are pending payment.

ii)The sums of money that must be paid to the Allowed Creditors to fulfill all the financial obligations, including the principal in force and the interest and commissions accrued up to the payment date.

iii) Taxes, except those guaranteed according to The Applicable Laws and Provisions.

iv) Any fine or penalty that has not been paid by the Concessionaire.

v) Any other Concessionaire liability that is in favor of the State.

vi) Other liabilities not considered in previous statements.

Payment priority will be as stipulated in the aforementioned items, unless a different priority is required under The Applicable Laws and Provisions.

b) The remaining balance, if any shall remain with the Concessionaire.

13.16 In the event of Agreement termination due to Agreement term expiration, the Concession and Concession Assets are transferred to the State at no cost, except for the remaining value of the Reinforcements that might have been executed during the Agreement term. This value will be calculated by OSINERGMIN, and will be paid: i) by the incoming concessionaire, at the time it assumes operation of the respective facility, or, ii) by the State, no later than six (6) months after Agreement expiration.

13.17 If the Concession terminates for the reason stipulated in Clauses 13.5 or 13.6, the following rules shall apply:

a) Notwithstanding the provisions in Clause 13.13, the Concessionaire shall pay to the Concessionaire, in all respects, including the transfer of the Concession Assets to the Grantor and the compensation referred to in Article 22 of the TUO and Section 24.1 of Article 24 in Legislative Decree No. 1224, respectively, as follows:

a.1 When the termination takes place before Commercial Commissioning, the Carrying Value of the Concession Assets and the existing pre-operative expenses, provided they are not included in the Concession Assets and are approved by the Concessionaire. Grantor. Pre-operative expenses will include, among others, collateral costs connected to Agreement termination, as well as interest during the construction stage, calculated at the date of Concession termination.

a.2 When termination occurs after Commercial Commissioning, the greater quantity between:

i. The present value of the Project cash flows that would have been generated in the balance during Agreement term, using a nominal discount rate of 12% in Dollars for these purposes.

ii. The Carrying Value of the Concession Assets.




b) Calculation of the amount to be paid shall be made by an expert appointed by the Parties. The appointment of the specialist will be within thirty (30) days calculated as from the concession termination.

c) The Grantor will discount the concepts indicated in Clause 13.15.a) from the amount calculated according to Subsection b), except for expenses incurred by the financial controller and the Grantor connected to the intervention and bidding process.

d) The net amount to be paid shall be paid in cash to the Concessionaire by the Grantor, in Dollars and within a period of sixty (60) Days counted from the moment that said amount was final, acknowledging the interest accrued for the period elapsed from the date of termination to effective termination, at a rate equivalent to the average of the six (6) months prior to the payment date, corresponding to the LIBOR rate at six (6) months plus a 2% spread.

13.18 Upon Agreement termination, except as provided in Clause 13.11, the Grantor shall return the Performance Bond or the Operation Guarantee to the Concessionaire, as applicable. Return of the respective guarantee shall be made no later than thirty (30) Days after transfer of Concession Assets has been completed, if there is no dispute regarding the Agreement or its termination.

13.19 The Carrying Value of the Concession Assets referred to in this Clause 13, shall be the one corresponding to Agreement termination date. In case of the assumption established in Clause 13.10 d), the Carrying Value of the Concession Assets shall correspond to the award notification date.

14. DISPUTE SETTLEMENT

14.1 The Applicable Laws and Provisions

The Agreement shall be governed by and construed in accordance with The Applicable Laws and Provisions. Therefore, the Parties express that content, execution, controversies and other consequences that originate from it, will be governed by said legislation.

14.2 Application Scope

This clause regulates the settlement of all disputes that may arise between the Parties during the Concession and those related to the resolution of the Concession Agreement.

The decisions of Regulators or other Competent Government Authorities issued in exercise of their administrative powers attributed by express rule, whose way of claiming is the administrative route, may not be matters of direct negotiation or arbitration.

14.3 Interpretation Criteria

The Agreement shall be interpreted as a unit and in no case each of its clauses shall be interpreted independently.

In case of divergence in the interpretation of this Agreement, the following priority order shall be followed to resolve said situation:

a. The Agreement and its amendments;

b. Circulars referenced in the Tender Documents; and

c. The Tender Documents.

The Concession Agreement is only subscribed in the Spanish language. If there is any difference between any translation of the Agreement and the Concession Agreement in Spanish, the text of the Agreement in Spanish will prevail. The translations of this Agreement shall not be considered for the purposes of its interpretation.




The established deadlines will be computed in Days, calendar days, months or years, as applicable.

14.4 Waiver of Diplomatic Claims

The Concessionaire and its partners, shareholders or participation members expressly, unconditionally and irrevocably waive any diplomatic claim, for any disputes or conflicts that may arise from the Agreement.

14.5 Direct Negotiation

The Parties declare that it is their will that all legally relevant conflicts or uncertainties of an

arbitrable nature, that may arise with respect to the interpretation, execution, compliance, and any aspect related to the existence, validity or effectiveness of the Agreement shall be resolved by direct negotiation between the Parties within a period of sixty (60) Days as from the date on which a Party notifies the other in writing of the existence of the legally relevant conflict or uncertainty.

In the case of international arbitration, the negotiation period or direct negotiation shall be six (6) months. This time limit shall be calculated as from the date on which the party invoking the clause notifies its request to initiate direct written negotiation, including detailed information (background, facts, points of controversy, claims and proposals for alternative dispute resolution) to the Ministry of Economy and Finance as Coordinator of the State Coordination and Response System in International Investment Disputes, pursuant to Law No. 28933 and its regulations approved by Supreme Decree No. 125-2008- EF.

The periods referred to in the preceding paragraphs may be extended by a joint decision of the Parties, which agreement shall be in writing.

Likewise, in the stage of direct negotiation prior to the initiation of a domestic arbitration, the Parties may agree to the participation of a neutral third party, known as an amiable compositeur or a dispute resolution board.

The amiable compositeur will be designated by the Parties directly or by delegation by the center or institution that manages alternative dispute settlement mechanisms, subject to the provisions established in Articles 69 to 78 of Supreme Decree No. 410-2015-EF. The amiable compositeur will propose a dispute settlement formula that, if partially or totally accepted by the Parties, will produce the legal effects of a transaction and, consequently, the quality of enforceable res judicata.

On the other hand, when total project investment cost is greater than eighty thousand (80 000) ITUs, at the request of either Party, they may submit their disputes to a dispute resolution board, which issues a binding and enforceable decision, without prejudice to the right to resort to arbitration, unless otherwise agreed between them. In case of recourse to arbitration, the adopted decision is considered as a precedent in the arbitration.

The dispute resolution board is made up by one (01) or three (03) experts who are designated by the Parties directly or by delegation to a Center or Institution that manages alternative dispute settlement mechanisms.

Notwithstanding the above, the dispute settlement board may be incepted from the beginning of the contractual execution, in order to further respond to inquiries and issue recommendations regarding issues and/or matters requested by the Parties to the Agreement.

The provisions in the preceding paragraph do not apply when the dispute is referred to the international mechanism for dispute settlement referred to in Law No. 28933, where direct negotiation will be assumed by the Special Commission of the State Coordination and Response System in International Investment Disputes.

In case the Parties do not resolve the conflict or uncertainty raised during the direct negotiation period, they should define it as a technical or non-technical conflict or uncertainty, as the case may be. When the Parties do not agree on the nature of the dispute, both parties must substantiate their position in writing to be sent to their counterpart. They will explain in




such document the reasons why they consider the controversy to be of a technical or non-technical nature.

Technical conflicts or uncertainties shall be resolved in accordance with the procedure

stipulated in Section 14.6 (a) of Clause 14. Conflicts or uncertainties that are not of a technical

nature shall be resolved in accordance with the procedure set forth in Section 14.6 b) of

Clause 14.

In case the Parties do not agree within the direct negotiation term about whether the dispute or

controversy raised is a Technical Dispute or a Non-Technical Dispute, or in case the dispute

has Technical Dispute and Non-Technical Dispute components, then such conflict or

uncertainty shall be considered as a Non-Technical Dispute and shall be resolved in

accordance with the respective procedure set forth in Section 14.6 (b) of Clause 14.

14.6 Arbitration

Modalities of arbitration proceedings:

a. Ex Aequo et Bono Arbitration. Any and all Technical Disputes that cannot be directly

settled by the Parties within the direct negotiation period must be submitted to ex aequo et

bono arbitration, in accordance with Section 3 of Article 57 in Legislative Decree 1071, in

which the arbitrators will resolve according to their knowledge and faithful judgment and

understanding. The arbitrators may be national or foreign experts, but in all cases they

must have extensive experience regarding the Technical Controversy, and should have no

conflict of interest with any of the Parties at the time and after their designation as such.

The Arbitral Tribunal may request from the Parties such information as it may deem

necessary to resolve the Technical Controversy known to it, and as a consequence may

submit to the Parties a conciliation proposal, which may or may not be accepted by the

Parties. The Arbitral Tribunal may exercise all evidentiary means and may request to

submit the evidentiary means it deems necessary to resolve the claims raised.

The Arbitral Tribunal shall prepare a preliminary decision to notify the Parties within thirty (30) Days following its installation, and the Parties have a (5) Day term to prepare and submit their comments to the Court regarding said preliminary decision. The Arbitral Tribunal shall issue its final decision on the Technical Controversy within ten (10) Days following receipt of comments by the Parties, their preliminary decision or at the expiration of the deadline for submitting said comments, whichever occurs first. The procedure for resolving a Technical Controversy shall be carried out in Lima, Peru. Exceptionally, and because of the nature of the specific case, the arbitral tribunal will move to another location only for the purpose of presenting evidentiary means such as an expert opinion, an ocular inspection or any other evidentiary means necessary to be presented in another location, for a term not greater than ten (10) days.

Tribunal members must keep absolute confidentiality and keep confidential all information they know due to their participation in the resolution of a Technical Controversy.

The dispute shall be resolved through domestic arbitration, and shall be administered by the Arbitration Center of the Lima Chamber of Commerce, Conflict Analysis and Analysis Center - PUCP, Arbitration Center of the Lima Bar Association or American Chamber of Commerce of Peru - AMCHAM, in all that is not foreseen in this Agreement. In the absence of agreement for administrating the arbitration, the Party that requested the arbitration to be started shall decide.

b. Arbitration at Law- Non-Technical Disputes will be resolved by means of arbitration at law, in accordance with Sections 1 and 2 of Article 57 in Legislative Decree 1071, a procedure in which the arbitrators must resolve in accordance with applicable Peruvian legislation. The arbitration at law may be local or international, according to the following:




i. Where non-technical disputes amount to more than thirty million United States dollars (US $ 30,000,000) or their equivalent in national currency, the Parties shall seek to resolve disputes by direct negotiation, within a period of six (6) months established in Section 14.5 of Clause 14, and may be extended by joint decision of the Parties in the established terms.

In the event of failure by the Parties to reach an agreement within the direct negotiation referred to in the preceding paragraph, arising disputes shall be settled by international arbitration at law, through a procedure conducted in accordance with the Rules of Conciliation and Arbitration of the International Center for Settlement of Investment Disputes (ICSID) established by the Convention on the Settlement of Investment Disputes between States and Nationals of other States, adopted by Peru through Legislative Resolution No. 26210, to which the Parties unconditionally submit.

In order to process international arbitration proceedings under the ICSID arbitration rules, the Grantor representing the State of the Republic of Peru declares that the Concessionaire is considered to be a "National of Another Contracting State" because it is subject to foreign control as provided in Article 25 (2) (b) of the Convention on Settlement of Investment Disputes between States and Nationals of Other States, and the Concessionaire agrees to be considered as such.

Arbitration shall take place in Washington D.C., United States of America, and shall be conducted in Spanish, and the arbitration award shall be issued, in accordance with provisions in the arbitration regulations of the corresponding administrative arbitration institutions.

If, for any reason, ICSID declines to register arbitration under this clause, the Parties agree in advance to submit the dispute in the same terms as those set out in the UNCITRAL Arbitration Rules (United Nations Commission on International Trade Law Alternatively, the Parties may agree to submit the dispute to another jurisdiction, if they deem it appropriate.

i. Non-Technical Disputes in which the amount involved is equal to or less than thirty million Dollars of the United States of America(US $ 30,000,000), or its equivalent in national currency, and those disputes of as a matter of law that are not quantifiable In money, will be settled through arbitration at law and must be administered by the Arbitration Center of the Chamber of Commerce of Lima, Center for Analysis and Resolution of Conflicts - PUCP, Arbitration Center of the Lima Bar Association or American Chamber of Commerce of Peru - AMCHAM. In the absence of agreement for

managing the arbitration, the Party requesting the arbitration shall decide. Arbitration shall take place in the city of Lima, Peru, and shall be conducted in Spanish, and the corresponding arbitration award shall be issued within one hundred and eighty (180) calendar days after the date the Arbitral Tribunal is installed. Exceptionally, the award may be issued outside this period when the Arbitral Tribunal deems it indispensable to present evidentiary measures such as expert opinion or ocular inspections outside the city where the arbitration is carried out within a period previously agreed upon by the Parties.

14.7 Common Procedural Rules For the Ex Aequo et Bono Arbitration for the Arbitration at Law referred to in this clause, whether in its international or national modality, the following general provisions shall equally apply: a. The Arbitral Tribunal shall be composed of three (3) members. Each Party shall appoint

one arbitrator and the third shall be appointed by agreement of the two (2) arbitrators designated by the Parties, who shall in turn serve as President of the Arbitral Tribunal.

In the case of national ex aequo et bono arbitration and national arbitration at law, if the two arbitrators failed to agree on the appointment of the third arbitrator within thirty (30) days of the date when the second arbitrator is appointed, the third arbitrator will be




designated by the selected arbitration center. On the other hand, in the case of arbitration under international law, the Parties may agree on the term that they deem appropriate, so that in case of failure to reach agreement on the appointment of the third arbitrator, it is the ICSID that decides.

In the case of national arbitration at law and national ex aequo et bono arbitration, if one of the Parties fails to appoint the arbitrator within thirty (30) days from the date of receipt of the respective appointment request, such Party shall be considered as having waived its right and the arbitrator shall be appointed at the request of the other Party by the national arbitration center. On the other hand, in the arbitration of international law, the Parties may agree on the term that they deem appropriate, so that in case one of the Parties does not designate the corresponding arbitrator, it is designated by ICSIDat the request of the other Party.

b. The arbitrators may, at their discretion, supply any differences or void existing in the legislation or in the Agreement, by applying the general principles of law and the Pacts, Conventions and/or Treaties of which the Republic of Peru is a signatory.

c. In accordance with the provisions in Section 81.2 of Article 81 in the Regulation of Legislative Decree 1224, arbitrators must allow the participation of the Regulator for arbitration proceedings in which decisions and matters related to the competence of said Regulator are discussed, except in the case of disputes to which the mechanisms and procedures for dispute settlement referred to in Law 28933, Law establishing the State Coordination and Response System in International Investment Disputes, or those provided for in the treaties which oblige the Peruvian State.

d. The parties agree that the award issued by the Arbitral Tribunal shall be final and unappealable. In this sense, the parties should consider it as a final judgment, with res judicata authority. Accordingly, the Parties declare that it will be mandatory, of definitive compliance and immediate execution, except as the case may be, that the grounds provided for in Articles 62 and 63 of Legislative Decree 1071, Articles 51 and 52 of the ICSID Convention or in the rules of the subject, as the case may be, occur.

e. During the course of the arbitration, the Parties shall continue to perform their contractual obligations, as far as possible, including those that are matters for arbitration. If the matter of arbitration were the fulfillment of the obligations guaranteed under Clause 12, if applicable, the respective term will be suspended and such guarantee cannot be executed for the reason that raised the arbitration, and should remain in force during the arbitration procedure.

f. All expenses arising from the settlement of a Technical or Non-Technical Dispute, except for the fees of the arbitrators involved in the dispute settlement, shall be covered by the losing Party. The same rule applies in case the defendant or the counterclaimant acquiesces or acknowledges the plaintiff's or the claimant's claim. In the event that the procedure ends without a ruling on the merits of the claims by reason of transaction or conciliation, said expenses will be covered in equal parts by the claimant and the counterclaimant. Likewise, if the award partially favors the positions of the Parties, the Arbitral Tribunal will decide the distribution of said expenses.

Costs and expenses such as consultant's fees, internal costs or other costs attributable to a Party on an individual basis are excluded from the provisions of this clause.

Arbitrator fees shall be paid in equal proportion by the Parties.

15. ECONOMIC–FINANCIAL BALANCE




15.1 The Parties acknowledge that the Agreement -at the Closing Date- is in a situation of economic

and financial balance in terms of rights, responsibilities and risks assigned to the Parties.

15.2 This clause stipulates a mechanism for restoring economic and financial balance, to which the

Concessionaire and the Grantor shall be entitled, in the event that the Concession is affected,

exclusively and explicitly due to changes in the Applicable Laws and Provisions, to the extent

exclusively related to economic-financial aspects connected to the variation of revenues,

investment costs or operating and maintenance costs associated Service supply.

15.3 Any Party that considers that the economic and financial balance of the Agreement has been

affected may invoke its reinstatement by proposing the solutions and procedures to be followed

for its reinstatement -in writing and with sufficient substantiation- to the other Party .

15.4 In this regard, the Parties shall ratify or refuse to invoke the breach of the economic and

financial balance by one of the Parties, as well as determine the compensation amount to

restore such balance.

15.5 The economic-financial balance will be restored if, as a result of what is stated in Section 15.2,

and in comparison with what would have happened in the same period if the changes referred

to in that section had not occurred:

a) The investment costs incurred by the Concessionaire from Closing Date to Commercial

Commissioning vary in an amount equal to ten percent (10%) or more of the Investment Cost

specified in Section 8.1 b). After the eventual adjustments indicated in said clause, the

totality of the variation should be considered for restoring economic-financial balance; or,

b) The revenues or Service operation and maintenance costs are affected in such a way that

the difference between Concessionaire revenues less operation and maintenance costs for

operating the Service, during a period of twelve (12) consecutive months or more, varies in

the equivalent of ten percent (10%) or more of the current Tariff Base.

15.6 If the economic and financial balance of this Agreement is affected, as defined in the preceding

paragraph, the Concessionaire or the Grantor may propose to the other Party -in writing and

with the necessary substantiation-, the solutions and procedures to be followed to restore the

affected economic balance.

Restoration of economic-financial balance shall consider the present value of the effects on

future Concessionaire cash flows. A copy of the application will be sent to OSINERGMIN, to

issue a technical-economic opinion in relation to what is requested, which must be evaluated by

the Grantor, without a binding character. This opinion shall be submitted to the Parties within

twenty (20) Days.

15.7 The affected Party may invoke a breakdown of the economic-financial balance at the following

times:

a) Within the six (6) first months counted as from Commercial Commissioning, in connection to

provisions in Clause 15.5.a.

b) After expiration of twelve (12) months counted from the s tart of Commercial Commissioning,

in connection to provisions in Clause 15.5.b.

15.8 Restoration of economic balance shall be based on the Concessionaire's audited financial

statements (or on the information used in the preparation thereof) pertaining to the period in

which changes are verifies regarding revenues, investment costs or operation and

maintenance.




If the Concessionaire has several concessions, it must provide the necessary additional

information to substantiate the division of revenues or costs, as appropriate, among its various

concessions.

Notwithstanding the foregoing, the Grantor may request more information to substantiate the variations noted. In addition, the Parties may agree to use documentation other than audited financial statements for the purposes described in this clause, provided that it has the necessary grounds.

15.9 If the Parties do not agree on the outcome within ten (10) Days of notification to the Parties, any Party may consider that a non-technical dispute has occurred and shall be resolved in accordance with the dispute mechanisms regulated in this Agreement.

15.10 The provisions in this clause shall not be considered applicable to changes resulting from provisions issued by the Competent Government Authority, which establish infractions or penalties, or the application of penalties that were considered in the Agreement or that were -as a result of any actions- attributable facts or result of the Concessionaire's performance.

15.11 Existence of an imbalance may only lead to amending the provisions contained in this Agreement for the purpose of restoring the balance, and will not give rise to payments by the State.

16. TAX REGIME

16.1 The Concessionaire shall be subject to the applicable national, regional and municipal tax legislation, having to comply with all tax obligations that correspond to the exercise of its activity. The Concessionaire shall be obliged, in the terms set forth in the Applicable Laws and Provisions, to pay all taxes, levies and fees applicable, among others, to the Concession Assets or those that are built or incorporated in the Concession, whether such taxes are administered by the national, regional or municipal government, provided that such taxes, levies and fees are directly linked to performance of activities pertaining to the Agreement.

16.2 The Concessionaire may sign a legal stability agreement with the Grantor which, according to the applicable regulations, has the rank of agreement law, pursuant to provisions in Legislative Decrees No. 662 and No. 757 and the first and second paragraph of Article 19 in the TUO, after complying with conditions and requirements established in those rules.

16.3 In addition, the Concessionaire may access the corresponding tax benefits, provided that it complies with the procedures, requirements and substantial and formal conditions set forth in the Applicable Laws and Provisions.

17. ASSIGNMENT OF RIGHTS

17.1 The Concessionaire may transfer or assign its rights or obligations, assign its contractual position or novate all or any of its obligations, in accordance with the Agreement, provided it has the prior written consent of the Grantor, which cannot be denied without an express basis.

17.2 The waiver by either Party of one or more of its rights under the Agreement shall only take effect if it is done in writing and with due notification to the other Party. If at any time one of the Parties waives or ceases to exercise a specific right contained in the Agreement, such conduct cannot be considered by the other Party as a permanent waiver to enforce the same right or any other that corresponds to it under the Agreement.

18. AMENDMENTS TO THE AGREEMENT

18.1 Amendments and clarifications to the Agreement shall only be valid when they are agreed in writing and signed by representatives with sufficient power granted by the Parties and who comply with the pertinent requirements in the Applicable Laws and Provisions.




18.2 If any stipulation or provision in the Agreement is considered void, invalid or unenforceable by

arbitral award, that decision shall be strictly interpreted for such stipulation or provision and

shall not affect the validity of the other provisions in the Agreement.

19. NOTIFICATIONS

Except as expressly provided otherwise in the Agreement, notifications, summonses, petitions,

demands and other communications due or permitted under the Agreement shall be made in

writing and by personal notification to the following addresses:

If addressed to the Grantor:

Name: Ministerio de Energía y Minas.

Address: Av. Las Artes Sur 260, Lima 41, Perú.

To:

If addressed to the Concessionaire:

Name:

Address:

To:

Or to any other address or person designated in writing by the Parties under the first

paragraph of this clause.

For the Concessionaire:

For the Grantor:

Representative Signature Representative Signature

Subscription Date: ____ / ____ /201__.

Subscription Date: ____ / ____ /201__.




ANNEX Nº 1

PROJECT SPECIFICATIONS

“NUEVA YANANGO-NUEVA HUÁNUCO 500 KV CONNECTION AND RELATED SUBSTATIONS”

1. GENERAL PROJECT DESCRIPTION

The general Project description depicted in this Annex has been prepared based on a preliminary engineering project, available in the Data Room for the interested parties, and not on Definitive Engineering, so that the final characteristics, details and basic specifications of the Project equipment to be constructed will be those approved by the COES in the Pre-Operative Study. This study aims at determining and evaluating the new facility impact on SEIN’s operation, on the Transmission System capacity, and on the reliability and quality of its operations. The proposal developed in the Project Definitive Engineering must comply and agree with the approved Preoperative Study.

Likewise, the Concessionaire will be responsible for including other elements or components not described in this Annex, required for the project functioning and operation, as well as for modifying or adapting what is necessary, and establish its definitive characteristics, to guarantee correct operation of all its facilities and service provision in compliance with standards in the National Interconnected Electrical System (SEIN).

In the event that the Project scope, specifications or characteristics contained in this Annex differ to that specified in the preliminary engineering plan, the provisions of this Annex shall prevail. In that regard, the preliminary engineering draft should be considered as a document with referential information.

Design criteria used in developing the project shall be consistent with the existing facilities with the design criteria established in the Technical Procedure COES PR-20 "Entry, Modification and Removal of Facilities in the SEIN" with the requirements of the National Electricity Code CNE-Supply and CNE-Utilization, as well as other standards specified in the Annex herein, in force at the date of signing the agreement.

The General Project Outlook shown in Scheme 1 (at the end of this Annex) comprises the following facilities:

a) National Transmission System:

Nueva Yanango - Nueva Huánuco 500 kV transmission line (L.T), in simple circuit, approximately 184 km long.

Nueva Huanuco 500/220 kV and 220/138 kV substation (for the connection with the Amarilis Substation).

Expansion of the 500 kV Nueva Yanango substation.

b) Regional Transmission System:

Nueva Huánuco – Yungas 220 kV transmission line (L.T), in simple circuit, approximately 100 km long.

Tingo María – Chaglla 220 kV transmission line (L.T), in simple circuit, approximately 37.4 km long.

Paragsha – Chaglla 220kV transmission line variant, in double circuit, consisting of a double circuit line input and output, each approximately 29 km long, for connection to Nueva Huánuco (*) substation.

Vizcarra – Tingo María 220 kV transmission line variant, in single circuit, consisting of a single circuit line input and output, each approximately 16.5 km long, for the connection to Nueva Huánuco substation.

New Yungas 220 kV susbstation.




Vizcarra – Antamina 220 kV transmission line variant, in single circuit, consisting of a single circuit line input and output, each approximately 0.5 km long, for the connection to the Yungas (**) substation.

(*) Nueva Huánuco – Chaglla 220kV section, forms part of the Local Transmission System. Nueva Huánuco – Paragsha 220 kV section, forms part of the Regional Transmission System.

(**) Yungas – Antamina 220 kV section, forms part of the Local Transmission System. Yungas – Vizcarra 220 kV section, forms part of the Regional Transmission System.

c) Local Transmission System:

138 kV link to the Amarilis substation, consisting of a simple circuit, approximately 2 km long.

Expansion of the 138 kV Amarilis substation.

2. PROJECT TECHNICAL CHARACTERISTICS

2.1 GENERAL TECHNICAL REQUIREMENTS

a) The Concessionaire will be responsible for selecting the transmission line’s route and track. The Concessionaire, who will define the final route, will evaluate the preliminary route selected for the transmission line contained in the engineering blueprint.

The route should avoid archaeological zones, national parks and restricted areas.

b) The Concessionaire will be responsible for everything related to the construction of accesses and all related matters, and shall abide by the current relevant standards.

c) Among others, the Concessionaire will be responsible for the following activities: Managing of easement rights and payment of compensation to owners or landowners. The

Grantor must collaborate in sensitizing the owners, in order to have an expeditious easement management.

Obtaining the Definitive Concession of Electric Transmission. Helping in coordinating with concessionary companies that are developing some project or

that have facilities included in the line's route, or where it is necessary to carry out works for connecting to the substations included in this Project's scope.

Obtaining the CIRA (National Institute of Culture-INC certification on non-impacting archaeological remains).

Preparing the Environmental Impact Study and its monitoring plan, which will be developed within the current legal framework, in addition to having the approval of the corresponding public entities.

d) The Grantor will be in charge of obtaining the favorable technical opinion on the Project issued by the National Service of Natural Areas Protected by the State (SERNANP).

e) The easement stripe for the 500 kV lines shall be at least 64 m and 25 m for the 220 kV lines. In areas with trees or objects that, because of their height and proximity to the line, represent a potential danger for people traveling in the area or for the line itself (in the event of dangerous approaches or an eventual fall of these trees on the line), appropriate measures should be taken to eliminate or minimize such risks, such as the removal or cutting of such trees.

2.2 TRANSMISSION LINES

2.2.1 General technical characteristics

a) Transmission capacity per thermal limit

The lines’ minimum transmission capacity per thermal limit (design power) will be:




TRANSMISSION LINE MINIMUM TRANSMISSION CAPACITY

PER THERMAL LIMIT

Nueva Yanango – Nueva Huánuco 500 kV T.L

Nueva Huánuco – Yungas 220 kV T.L

Tingo María – Chaglla 220 kV T.L.

Paragsha - Chaglla 220 kV T.L. variant

Tingo María – Vizcarra 220 kV T.L. variant

Vizcarra – Antamina 220 kV T.L. variant

138 kV Link to the Amarilis substation

1400 MVA

450 MVA

450 MVA

(See note)

(See note)

(See note)

150 MVA

Note: Equal to the design power of existing lines.

Compliance with the specified capacity will be verified for the environmental conditions referred to in Chapter 1, Paragraph 3.1.1, of Annex 1 of PR-20, whose main prescriptions are:

- Temperature in the phase conductors must not exceed the thermal limit of 75 ° C.

- Maximum ambient temperature is the average maximum temperature of the region where the line is installed. It corresponds to the average of the annual maximums for a minimum period of 10 years.

- Solar radiation is the maximum recorded in the line installation region.

- Minimum wind of 0.61 m/s perpendicular to the conductor.

Safety distances must be respected in all operating conditions. A minimum reserve margin of 0.30 m is recommended in the distribution of structures to ensure compliance with safety distances.

b) Transmission Capacity in Emergency Conditions

The transmission line must be able to withstand an overload of not less than 30% above Transmission Capacity by Thermal Limit for up to thirty (30) minutes in emergency conditions in the SEIN.

A temperature of more than 75 ° C shall be allowed in the conductor during the specified period, while maintaining established safety distances pursuant to applicable standards.

c) Design factors

The line will be considered acceptable when it complies with the following:

c.1) Thermal limit

According to the Transmission Line Design Criteria established in Chapter 1, Annex 1 of PR-20, described in section a)

c.2) Voltage drop

According to the Performance Criteria established in Annex 2 of PR-20, Section 8.

2.2.2 Nueva Yanango – Nueva Huánuco 500 kV Transmission Line

This simple circuit transmission line will be built to link future Nueva Yanango and Nueva Huánuco substations.

The main features in this line are:

Length: 184 km

Number of circuits: One (1)

Voltage: 500 kV

Maximum system voltage: 550 kV

Phase arrangement: Horizontal or triangular type

Type of supports: Self-supporting galvanized steel lattice

Conductor type: ACSR, AAAC or ACAR can be used




Number of conductors per phase: Four (4) or more

Guy wire: One of the OPGW type, 24 fibers, 108 mm2 section, and another one of the EHS galvanized steel wire type, nominal section 70 mm2.

Altitude: Minimum 907 masl Maximum 3833 masl

2.2.3 Nueva Huánuco - Yungas 220 kV Transmission Line

This simple circuit transmission line will be built to link future Nueva Huánuco and Yungas substations.

The main characteristics of this line are:

Approximate length: 100 km

Number of circuits: Una (1)

Rated operating voltage: 220 kV


Phase arrangement: Triangular type.


Conductor type: ACSR, AAAC or ACAR can be used.

Number of conductors per phase: Minimum two (2).



2.2.4 Tingo María - Chaglla 220 kV Transmission Line

This simple circuit transmission line will be built to link Tingo María and Chaglla substations.

The main features in this line are:

Approximate length: 37.4 km










2.2.5 Chaglla - Paragsha 220 kV T.L. Variant (L-2050/2051)

Paragsha – Chaglla 220 kV transmission line variant, in double circuit (L-2050/2051) will consist of two sections of double circuit lines, linking L-2050 and 2051 to Nueva Huánuco 220 kV substation from a junction box or switch, forming the Chaglla – Nueva Huánuco and Nueva Huánuco – Paragsha lines.

The main features of each variant sections are:

Approximate length: 29 km

Number of circuits: Two (2) (see note 1)






Phase arrangement : Vertical type. (see note 1)

Type of supports: Self-supporting galvanized steel lattice.

Conductor type: (*)

Number of conductors per phase: (*)

Guy wire: (*)


(*) Similar to the one considered in the line design L-2050/2051:

A 700 MCM AAAC conductor, double circuit line with two conductors per phase.

Guy wire, one of the OPGW type, 36 fibers and 108 mm2, and another one of the EHS galvanized steel wire type, nominal section 70 mm2.

Furthermore, the accomplishment of the requirements requested in Sub section 2.2.9 d.

The Concessionaire must verify the abovementioned features.

2.2.6 Vizcarra – Tingo María 220kV T.L. Variant (L-2252)

Vizcarra – Tingo María (L-2252) 220kV line variant consists of a line section in double circuit, linking L-2252 to Nueva Huánuco 220 kV substation, starting from a point of diversion or disconnection, forming the Tingo María – Nueva Huánuco and Nueva Huánuco – Vizcarra lines.

The main characteristics of the variant section are:


Number of circuits: Two (2) (see note 1)



Phase arrangement : Vertical type (see note 1)


Conductor type: (*)


Guy wire: (*)


(*) Similar to the one considered in the existing line’s design (L-2252):

An ACSR 591 mm² conductor, simple circuit line with one conductor per phase.

Guy wire, one of the OPGW type (recently installed) and another one of the EHS galvanized steel cable type, with 50 mm2 nominal cross-section.

Furthermore, the accomplishment of the requirements requested in Sub section 2.2.9 d. The Concessionaire must verify the abovementioned features.

Note 1. In the line variants comprised in subsections 2.2.5 and 2.2.6, that are input / output to and from the S.E. Nueva Huanuco 220 kV, support structures of the multicircuit type, containing more than two circuits can be used, in case of insufficiently adequate space, to use double-stranded structures.

2.2.7 Vizcarra - Antamina 220 kV T.L. Variant (L-2286)

220kV Vizcarra – Antamina 220 kV line variant (L-2286) consists of a section of double circuit line connecting line L-2286 with the new Yungas 220 kV substation, starting from a point of diversion or disconnection, forming the Vizcarra – Yungas and Yungas – Antamina lines.

The main features of each line section are:


Number of circuits: Two (2)






Phase arrangement : Vertical type.


Conductor type: (*)


Guy wire: (*)

Altitude: 3800 masl

(*) Similar to the one considered in the design of the existing line (L-2286):

A 592 mm² ACSR conductor, in double circuit line, with one conductor per phase.

Guy wire, one of the OPGW type, 24 fibres, 108 mm2, and another one of the EHS galvanized steel wire type, nominal section 70 mm2.

The Concessionaire must verify the abovementioned features.

2.2.8 Nueva Huánuco - Amarilis 138 kV connection

This simple circuit transmission line will be built to link the Nueva Huánuco and Amarilis substations, the latter one owned by ISA-REP.

The main characteristics of this line are:

Approximate length: 2 km (*)








Guy wire: One of the OPGW type, 24 fibers, 108 mm2 section

Altitude: 2000 masl

(*) Length is referential and the Concessionaire must assess the distance between the Nueva Huánuco and Amarilis substations.

2.2.9 Line Technical Requirements

No changes will be accepted in these specifications, unless the Concessionaire requests or proposes them following due technical substantiation and when the Grantor approves them.

a) According to their voltage levels, the lines shall comply with at least the following minimum requirements:

500 kV T.L. Rated operating voltaje : 500 kV Maximum operating voltaje : 550 kV Lightning impulse withstanding voltage : 1550 kVpeak

Switching impulse withstanding voltage (phase-earth) : 1175 kV

220 kV T.L. Rated operating voltaje : 220 kV Maximum operating voltaje : 245 kV Lightning impulse withstanding voltage : 1050 kVpeak Industrial frequency (60 Hz) withstanding voltage : 460 kV

The preceding values will be corrected according to facility altitude. Likewise, safety distances in supports and insulation should also be corrected by altitude.

T.L. leakage line length must be verified according to pollution level in the areas through which it crosses, maximum voltage level reached and altitudes of those areas.

The minimum leak lengths to consider will be:




In coastal zones with an altitude of up to1 000 masl : 31 mm/kVphase-phase In rain forest zones with an altitude of up to 1 000 masl : 20 mm/kVphase-phase In zones with an altitude higher than 1 000 masl : 20 mm/kVphase-phase

Specified Minimum leakage lengths must be corrected by altitude, according to section 7 of GB 50545 "Code for Design of 110 kV ~ 750 kV Overhead Transmission Line".

b) Minimum phase-earth distances in the structures must be calculated through the methodology of standard IEC 60071.

For the 500 kV lines, a lightning impulse withstand voltage of 1550 kV peak and 1175 kV peak will be considered impulses per switching, regardless of the use of lightning arresters and/or pre-insertion resistors in the switches.

In the case of 220 kV lines, an atmospheric impulse withstand voltage of 1050 kV peak and 460 kV at industrial frequency (60 Hz) will be considered.

In both cases specified distances must be corrected by altitude.

c) Resistance of individual earthing in line structures must not exceed 25 Ohms. This value must be checked for normal terrain conditions and in no case after rain or when the ground is wet. However, this value must be verified in order to comply with CNE Rule 036.A (Supply 2011). Compliance with this value does not exempt the verification of maximum allowed touch and step voltages in case of failure, as well as the measures necessary to maintain these values within the permitted ranges.

d) The following values must be met:

d.1) Maximum surface gradient per phase is given by average value of the maximum surface gradient values in each subconductor.

Maximum surface gradient in conductors should not exceed the following critical gradient values:

16 kVrms/cm, in coastal zones with altitudes up to 1 000 masl.

18,5 kVrms/cm, in rainforest zones with altitudes up to 1 000 masl.

18,5 kVrms/cm, in areas with an altitude greater than 1 000 masl. This value is referred to 1000 masl, so it should be corrected by altitude. It will be verified, so that the maximum gradient does not exceed 95% of the critical gradient value per Crown. Note: Not applicable for 220 kV line variant, in which similar conductors to the design of the existing lines to be sectioned will be used.

d.2) Non-ionizing radiation limits at the boundary of the easement stripe, for population exposure according to Annex C4.2 of CNE- 2006 regarding Use.

d.3) Audible noise at the edge of the easement stripe, for residential areas according to Annex C3.3 of the CNE – 2006 regarding Use.

d.4) Radio interference limits shall comply with provisions in Chapter 1, Annex 1 of PR-20.

e) Security distances, considering a 20-year creep, will be calculated according to Rule 232 of CNE 2011 on Supply, or the one in effect at the closing date. For Electrical component values specified in Table 232-4 of the NESC shall be used to apply Rule 232. Safety distances shall not be lower than the values specified in Table 232-1a of CNE 2011 on Supply, or the one in force at the closing date.

f) The Concessionaire shall consider a number of transpositions for the 500 kV T.L., as indicated in Chapter 1, Annex 1 of PR-20.

g) The Concessionaire shall consider a failure rate for lightning discharges as indicated in Table N ° 6 of Chapter 1, Annex 1 of PR-20, when designing the lines.

h) Design of insulation, safety distances, earthing, use of appropriate materials, and proper performance of maintenance work, among other things, shall be such that the line does not exceed "1 outage / (100 km year)" for the 500 kV level and "2 outages / (100 km year)" for the 220 kV level.




In order to comply with the specified outage rate, the following is recommended, as reference:

Check that the line insulation level is correct.

Check that resistance value of grounding support structures is appropriate and, if necessary, use capacitive grounding in rocky or high resistivity areas.

Perform shielding study.

Use of materials (insulators, hardware, OPGW cables, etc.) of proven quality, that is with testing along 15 years, good manufacturing and used worldwide.

Any unscheduled outages that exceed this limit will be penalized pursuant to Clause 5.12 in the Agreement.

Aforementioned penalties do not exclude compensations due to bad quality of supply o bad quality of service, as specified in NTCSE.

i) A 24-fiber OPGW type guard wire plus an EHS galvanized steel wire with a nominal cross-section of 70 mm2 shall be used to enable safe, selective and fast differential line protection, as well as sending data to COES in real time, remote control and telecommunications

Note: For the variant, the similar guard wires to the design of the existing lines to be sectioned will be used.

The OPGW guard wire plus and EHS galvanized steel wire shall be capable of withstanding an estimated ground fault that guarantees a service life of not less than 30 years. The Concessionaire shall will substantiate the calculation methodology.

j) For line maintenance services, a communication system with satellite cell phones may be used instead of a UHF / VHF radio system.

k) ACSR, AAAC or ACAR type cables may be used depending on the carrying capacity loads, spans and suitable pull that show the best construction and operation option, provided that a service life of not less than 30 years is guaranteed. For the variants, conductors similar to the design of the existing lines to be sectioned will be used.

l) Maximum Joule loss limits, calculated for an output power value equal to that indicated in the table below, with a power factor equal to 1.00 p.u., and voltage at arrival bar equal to 1.00 p.u. are specified in the following table:

Line

Loss % /Circuit

Approximate length (km)

Reference Power (MVA)

(See note)

Maximum Losses (%/km)

Nueva Yanango – Nueva Huánuco 500 kV T.L. 184 700 0,0068

Nueva Huánuco – Yungas 200 kV T.L. 100 250 0.033

Tingo María – Chaglla 220 kV T.L. 37.4 250 0.033

Note: This is the estimated transmission power that prevails in the line operation.

Compliance with these levels of losses will be verified by the Grantor, through the conductor design calculations, prior to acquisition of supplies by the Concessionaire. Conductor installation will not be authorized in case of non-compliance with the limit loss values.

The calculation formula to verify the Joule losses levels will be:

%100º75

2

xP

Rx

V

PLosses

ref

C

nom

ref

Where:

Pref = Reference power in MVA Vnom = Rated voltafe in the line in kV R75ºC = Total line resistance per phase (per km), at 75 ºC and 60 Hz.




m) Unavailability due to scheduled maintenance: The number of hours per year out of service due scheduled maintenance of each transmission line shall not exceed two days of eight hours each.

n) Maximum post-fault resetting time: the maximum time for line resetting should not exceed 15 minutes after the COES order, in accordance with COES Technical Procedure No. 40.

2.3. SUBSTATIONS

Substations will be designed and projected using the switch and one half connection layout for 500 kV, and the double bar layout with transfer switch for 220 kV. Thus, the Concessionaire will provide any necessary spaces and areas for these types of layouts. In general, all areas planned for future expansions should be adequately explained and leveled.

2.3.1 Expansion of the future Nueva Yanango 500/220 kV substation

The future Yanango 500/220 kV substation is part of the project " Colcabamba - Nueva Yanango - Carapongo 500 kV T.L. and Associated Substations", currently being tendered by PROINVERSIÓN. This substation will be located in the province of Chanchamayo, department of Junin, at 900 masl, approximately in the following UTM coordinates (datum WGS84):

EASTERN COORDINATE NORTHERN COORDINATE

461739 8768285

These coordinates are referential and must be updated by the Concessionaire according to the definitive location chosen by the facility owner.

The future Nueva Yanango substation will be connected to the SEIN in 500 kV to the future substations of Colcabamba and Carapongo, and in 220 kV to the existing Yanango substation.

2.3.1.1 Facilities currently at the bidding stage

The scope planned for building the future Nueva Yanango 200/220 kV substation considers the following equipment:

On the 500 kV side

The 500 kV bar system and yard equipment will have a double bar connection layout with switch and one half, comprising the following facilities:

a) Three (03) cells for connecting the 500/220/22.9 kV - 750 MVA (ONAF) autotransformer bank and line to the Carapongo 500 kV substation, which are equivalent to the switch and one half layout diameter.

b) Three (03) cells for connecting the 500 kV bar reactor, of 100 MVAr, and the lines to the Colcabamba substation, which are equivalent to the switch and one half layout diameter.

c) Two (02) cells for connecting the 500 kV line reactors, of 100 and 90 MVAr, to the Colcabamba and Carapongo substations.

d) One (01) 500 kV – 100 MVAr three phase bar reactor. e) Two (02) 500 kV - 100 and 90 MVAr line reactors. f) Two (02) 500 kV series capacitor banks for the Nueva Yanango – Carapongo and Nueva

Yanango – Colcabamba lines, considering a degree of line reactance compensation of 50%.

g) One (01) 500/220/(*) kV – 750/750/(*) MVA (ONAF) bank of autotransformers consisting of three (03) 250 MVA (ONAF) single phase units each, with a star/star/delta connection group (A/a/d), plus a backup unit.

On the 220 kV side

The 220 kV bar system and yard equipment shall have a double bar connection layout with transfer switch, including the following facilities:

One (01) 220 kV line cell for the link with the existing Yanango substation.




One (01) cell for connecting the 220 kV side of the autotransformer bank.

One (01) coupling cell.

The description of the 500 and 220 kV equipment is informative in nature. Hence, before starting any expansion works, the Concessionaire must verify the definitive characteristics of this substation in coordination with the concessionaire of the Yanango Nueva 500/220 kV substation.

2.3.1.2 Facilities included in the expansion

Expansion of this substation includes the necessary works for implementing the following cells a) Expansion of the 500 kV bar system with a double bar layout with switch and one half. a) Two (02) 500 kV cells for connecting the lines to the Nueva Huánuco substation,

equivalent to 2/3 of the switch and one half layout diameter. b) One (01) 500 kV cell for connecting the line reactor to the Nueva Huánuco substation. c) One (01) three phase 500 kV line reactor of 90 MVAr consisting of 3 single-phase

30MVAr units each, plus a reserve unit. (*) d) Complementary systems for protection, control, measurement, communications,

grounding, ancillary services, gantry and bars, civil works, etc.

(*) See note A.

The Concessionaire will be responsible for coordinating with the concessionaire of the substations Nueva Yanango 500/220kV in order to carry out -at its cost- any adjustments and / or modifications required for the coordination of the control, protection and telecommunications systems already existing in the substation.

In order to maintain equipment compatibility, the equipment to be installed in the Nueva Yanango substation must have similar characteristics to the existing yard equipment in the substation.

2.3.2 Nueva Huánaco 500/220/138 kV substation

This 500/220 kV substation will be entirely new and will be located at 2035 masl in the province of Huánuco, department of Huánuco, approximately in the following UTM coordinates (datum WGS84):

EAST COORDINATE NORTH COORDINATE

367715 8905261


The scope projected for the construction of the future 500/220 kV Nueva Huánuco substation considers the following equipment:

500 kV side

The 500 kV bar system and yard equipment will have a double bar connection layout with switch and one-half, comprising the following facilities:

a) Three (03) cells for connecting the 500 kV bar reactor and the lines towards the Nueva Yanango SS, which are equivalent to the diameter of the switch and one half layout.

b) Two (02) cells for connecting the 500/220/(*) kV – 750/750/-- MVA (ONAF) bank of autotransformers, which are equivalent to 2/3 of the diameter of the switch and one half layout.

c) One (01) cell for connecting the 500 kV line reactor of 90 MVAr to the Nueva Yanango substation.

d) One (01) 500 kV three-phase bar reactor of 100 MVAr consisting of 3 single-phase 33MVAr units each, plus a reserve unit (**)

e) One (01) 500 kV three-phase line reactor of 90 MVAr to the Yanango substation, consisting of 3 single-phase 30MVAr units each, plus a reserve unit (**)




f) One (01) 500/220/(*) kV – 750/750/(*) MVA (ONAF) bank of autotransformers consisting of three (03) 250 MVA (ONAF) single-phase units each, with a star/star/delta connection group (A/a/d), plus a reserve unit. It includes lightning rods on each side.

g) Complementary systems for protection, control, measurement, communications, grounding, ancillary services, gantry and bars, civil works, etc.

h) Space forecast for nine (9) future cells.

220 kV side

The 220 kV bar system and yard equipment shall have a double bar connection with transfer switch layout, comprising the following facilities:

a) Two (02) cells for connecting the lines to the Tingo Maria and Vizcarra 220 kV substations. b) One (01) cell for connecting the lines to the new Yungas 220 kV substation. c) Four (04) cells, two (02) for connecting the double circuit line to the Paragsha substation and

two (02) to the Chaglla 220 kV substation. d) One (01) cell for connecting the 220 kV side of the autotransformer bank 500/220/--kV. e) One (01) cell for connecting the 220 kV side of the autotransformer bank 220/138/--kV. f) One (01) coupling cell. g) One (01) 220/138/(*) kV – 100/100/(*) MVA (ONAF) autotransformers’ bank consisting of

three (03) 33 MVA (ONAF) single phase units each, with a star/star/delta connection group (A/a/d), plus a reserve unit. It includes lightning rods on each side.

h) Complementary systems for protection, control, measurement, communications, grounding, ancillary services, civil works, etc.

i) Space forecast for six (6) future cells.

(*) The voltage level and power of the tertiary winding will be verified and defined by the Concessionaire in the Preoperative Study, which will be evaluated and approved by the COES.

(**) See note A

138 kV side

It includes the facilities for connecting the Amarilis substation:

a) One (01) line cell – transformer for the link to the Amarilis 220 kV substation. (*).

b) Complementary systems for protection, control, measurement, communications, grounding, ancillary services, civil works, etc.

(*) The implementation of the cell is subject to the distance between Nueva Huánuco and Amarilis substations

2.3.3 New Yungas 220 kV substation

This 220/138 kV substation, of maneuver type, will be completely new and will be located at 3746 masl in the province of Dos de Mayo, department of Huánuco, approximately in the following UTM coordinates (datum WGS84):


292056 8910654


According to the implementation scope of the future Yungas substation, the 220 kV bar system and yard equipment shall have a double bar connection layout with a transfer disconnect switch, including the following facilities:

a) One (01) cell for connecting the lines to the Antamina substation.

b) One (01) cell for connecting the lines to the Vizcarra substation.

c) One (01) cell for connecting the lines to the Nueva Huánuco substation.

d) Installation of one (01) coupling cell.

e) Complementary systems for protection, control, measurement, communications, grounding, ancillary services, gantry and bars, civil works, etc.




f) Space forecast for eight (8) future cells. It is not considered the implementation of a power transformer.

2.3.4 Expansion of the Tingo María 220 kV substation

Tingo María 220 kV substation, owned by ETESELVA, is located in the city of Tingo María, province of Leoncio Prado, department of Huánuco at 700 masl, approximately in the following UTM coordinates (datum WGS84):


391100 8973038

These coordinates are referential and must be updated by the Concessionaire according to the final location chosen by the owner of the facility.

The Tingo Maria substation has a 220 kV ring layout and a single 138 kV bar connection and is connected to the SEIN to Aguaytía and Vizcarra 220 kV substations and to Aucayacu y Piedra Blanca 138 kV substations.

2.3.4.1 Existing facilities

The 220 kV switchyard owned by ETESELVA is provided with the following equipment: a) Two (02) cells for the connection to the Aguaytía and Vizcarra substations (includes line

reactor). b) Two (02) transformation cells. (*) c) Two (02) 220/138 kV - 50 MVA autotransformers. (*) d) Gantry and bar system for a double bar layout. e) Space forecast for future expansions.

(*) REP owns one transformer with its respective 220 kV cell (compact cell)

The 220 kV switchyard owned by REP is provided with the following equipment

f) Three (03) transformation cells, 02 for connecting the 220/138 kV autotransformers and 01 for connecting the 138/10 kV transformer.

g) Two (02) cells for connecting the Aucayacu and Piedra Blanca substations.

h) One (01) 138/10 kV - 10 MVA power transformer.

Description of the equipment is informative in nature. Hence, before starting any expansion works, the Concessionaire must verify the definitive characteristics of this substation in coordination with ETESELVA and REP.


The expansion of this substation includes the necessary works for the implementation of the following cells

a) Expansion of the 220 kV bar system in ring layout. (*) b) One (01) cell for connecting the line coming from the Changlla 220kW substation. (*) c) Supplementary systems for protection, control, measurement, communications,

grounding, ancillary services, gantry and bars, civil works, etc. (*) Note: The 220 kV expansion of the Tingo María substation will be carried out on the south

side of the key yard, with an area available for the implementation of a cell. Patio equipment with compact type technology, similar to the AT-2 Autotransformer cell (owned by REP), will be accepted alternately. In addition, in order to give greater reliability to the operation of the Tingo María substation, before the service exit of the circuits that converge to the substation (due to failure or maintenance), the Concessionaire will implement as part of the expansion:

• One (01) isolating switch line at the output to S.E. Aguaytía • One (01) isolating switch line at the output to S.E. Vizcarra • One (01) isolating bars in the AT-1 autotransformer




The Concessionaire will be responsible for coordinating with ETESELVA and REP in order to carry out -at its cost- any adjustments and / or modifications required for the coordination of the control, protection and telecommunications systems already existing in the substation.

In order to maintain equipment compatibility, the equipment to be installed in the Tingo Maria substation must have similar characteristics to the existing yard equipment in the substation.

2.3.5 Expansion of the Chaglla 220 kV substation

Chaglla 220 kV substation owned by ODEBRECHT is located in the district of Chaglla, province of Pachitea, department of Huanuco at 950 masl, approximately in the following UTM coordinates (datum WGS84):


402726 8938592

These coordinates are referential and must be updated by the Concessionaire according to the definitive location chosen for the expansion of the substation.

The Chaglla substation has a main bar connection layout plus a 220 kV transfer bar and is connected to the SEIN to Paragsha 2 substation, and subsequently to Nueva Huánuco 500/220/138 kV substation.

2.3.5.1 Existing facilities The 220 kV switchyard is provided with the following equipment:

a) Two (02) cells for connecting the Paragsha 2 substation. b) Two (02) cells for connecting the 230 MW generation units. c) One(01) connection cell d) Gantry and bar system for a main bar and transfer bar layout. e) There is not reserve space for future expansions

The description of the equipment is informative in nature. Hence, before starting any expansion works, the Concessionaire must verify the definitive characteristics of this substation in coordination with ODEBRECHT.


The expansion of this substation includes the necessary works for the implementation of the following cells

a) Expansion of the 220 kV bar system in the main bar layout plus a transfer bar. (*) b) One (01) cell for connecting the line coming from Tingo Maria 220 kV substation.(*) c) Complementary systems for protection, control, measurement, communications,

grounding, ancillary services, gantry and bars, civil works, etc. (*)Note: there is no reserve areas for future extensions. Due to the lack of spare areas for future extensions, patio equipment with compact or encapsulated technologies will be accepted, which will be evaluated in the Preoperational Study.

The Concessionaire will be responsible for coordinating with ODEBRECHT, in order to carry out -at its cost- any adjustments and / or modifications required for the coordination of the control, protection and telecommunications systems already existing in the substation.

2.3.6 Expansion of the Amarilis 138 kV substation

Amarilis 138 kV substation is part of the ISA - REP concession and is currently commercially operating. This substation is located in the province of Huanuco, department of Huanuco at 2035 masl, approximately in the following UTM coordinates (datum WGS84):


368263 8904827





The Amarilis substation has a double bar layout with a transfer switch and will be connected to the SEIN in 138 kV to Paragsha, Huánuco, Piedra Blanca (Tingo María) and Nueva Huánuco substations.

2.3.6.1 Facilities that are currently commercially operating

The equipment installed in the Amarilis substation is the following: a) Three (03) cells for connecting the Huánuco, Piedra Blanca and Paragsha substations. b) One (01) 138 kV coupling cell.

Moreover, there is space forecast for future 138 kV facilities.

The description of the 138 kV equipment is informative in nature. Hence, before starting any expansion works, the Concessionaire must verify the definitive characteristics of this substation in coordination with ISA –REP.

2.3.6.2 Facilities included in the Expansion

The expansion of this substation includes the necessary works for implementing the following cells: a) Expansion of the 138 kV bar system with a double bar transfer switch layout. b) One (01) cell for connecting the 220/138/22.9 kV autotransformer bank of 100 MVA of Nueva

Huánuco substation. c) Complementary systems for protection, control, measurement, communications, grounding,

ancillary services, gantry and bars, civil works, etc.

The Concessionaire will be responsible for coordinating with ISA –REP, in order to carry out –at its cost- any adjustments and / or modifications required for the coordination of the control, protection and telecommunications systems already existing in the substation.

In order to maintain equipment compatibility, the equipment to be installed in the Amarilis substation must have similar characteristics to the existing yard equipment in the substation.

Note A: The number and size of components, as well as basic specifications of the reactive compensation

equipment will be defined by the Concessionaire and approved by COES-SINAC in the Pre-Operative Study.

2.3.7 Technical Requirements for Substations

It should be underlined that throughout the development of the definitive study of the Project, the Concessionaire should carry out all studies that guarantee the equipment correct operation in the proposed system.

a) General technical characteristics

a1. Equipment must be state-of-the-art, and must satisfactorily pass factory tests recommended by the IEC standard and those complying with the indicated standard.

a2. References of similar supplies and accredited references of successful equipment operation, issued by transmission system operators that correspond to the last fifteen (15) years shall be submitted.

a3. The equipment shall have the corresponding reports certified by recognized international institutes showing that they have satisfactorily passed the Type Tests. All equipment shall be subject to Routine Testing.

a4. The applicable standards to be met by the equipment will mainly be the following: IEC, ANSI / IEEE, VDE, NEMA, ASTM, NESC, NFPA or similar, guaranteeing an equal or higher quality level.

b) Location and space for future substation expansions

b1. For new substations, the Concessionaire shall consider the provision of future spaces in the new substations, as established in this Annex and according what is indicated in Chapter 1, Annex 1 of the PR-20.




b2. The Concessionaire shall be responsible for managing, coordinating or acquiring -under any title- the right to use the available spaces in the existing substations, setting forth the respective agreements with the substation owners.

b3. The Concessionaire will also be responsible for acquiring the land adjacent to the existing substations, where this is necessary or required, and carry out the modification and adaptation works in the substations.

c) Voltage and insulation levels

c1. Voltage levels at 500 kV Rated voltage 500 kV Maximum service voltage 550 kV Lightning impulse withstand voltage 1550 kV peak Switching impulse withstand voltage 1175 kV

c2. Voltage levels at 220 kV Rated voltage 220 kV Maximum service voltage 245 kV Lightning impulse withstand voltage 1050 kV peak Power-frequency withstand voltage 460 kV

c3. Voltage levels at 138 kV Rated voltage 138 kV Maximum service voltage 145 kV Lightning impulse withstand voltage 650 kV peak Power-frequency withstand voltage 275 kV

c4. Protection levels Minimum leakage line In coastal areas with an altitude of up to 1000 masl 31 mm/kVphase-phase. In areas with an altitude higher than 1000 masl 20 mm/kVphase-phase

In areas with an altitude higher than 1000 masl 20 mm/kVphase-phase

Minimum protection against lightning Class 3 (138 kV), 4 (220 kV) and 5 (500 kV)

c4. Safety distances

The minimum separations between phases for conductors and uncoated bars to the outside shall be at least:

- For 500 kV : 8,00 m.

- For 220 kV : 4,00 m.

- For 138 kV : 3,00 m.

All distances must comply with IEC 60071 and ANSI / IEEE standards.

The values indicated above are referred to sea level (masl) so they must be corrected according to the altitude of facilities, where appropriate.

d) Current levels

All switching equipment (switches and disconnectors) will have the following characteristics: 500 kV 220 kV 138 kV Minimum rated current 2 000 A 3150 A 1250 A Three-phase short-circuit breaking capacity, 1s 40 kA 40 kA 40 kA Three-phase short-circuit breaking capacity 104 kApeak 104 kApeak 104 kApeak

Reactor connection switches shall comply with the IEEE Standard Std.C37.015 relating to the requirements for closing and opening currents.

e) Current transformers

Current transformers in 500, 220 and 138 kV shall have at least four secondary cores: a) Three protection cores 5P20. b) A core class 0.2 for measurement.




f) Seismic requirements

Foundations and support structures for high voltage equipment shall be designed to operate under seismic conditions indicated in Chapter 1, Annex 1 of the PR-20.

g) Self-transformers and reactors

g1. Self-transformers

A bank made up of single-phase autotransformers (3 units plus one reserve) will be considered, which must comply with the corresponding requirements established in section 2.3.7 Technical Requirements of the Substations.

The autotransformers must be supplied with current transformers incorporated in bushings, three-core protection 5P20, for the three phases and three windings, in addition to the corresponding cores for regulation and thermal image protection.

The rated voltage, voltage regulation and connection group of the 500/220 kV autotransformer bank shall be as follows:

Voltages - Primary voltage 500 kV - Secondary voltage 220 kV - Tertiary voltage (*) (*)

Connection group YN / YN / d(Δ) - Primary side, 500 kV Star (wye), neutral solidly grounded - Secondary side, 220 kV Star (wye), neutral solidly grounded - Tertiary side (*) Delta (∆) - Voltage regulation Loaded on the 220 kV side

Rated power - Three-phase banks (500/220) kV 600(*) / 750 MVA (ONAN/ONAF) - Single-phase unit (500:√3/220: √3) kV 200(*) / 250 MVA (ONAN/ONAF)

The rated voltage, voltage regulation and connection group of the 220/138 kV autotransformer bank are:

Voltages - Primary voltage 220 kV - Secondary voltage 138 kV - Tertiary voltage (*) (*)

Connection group YN / YN / d(Δ) - Primary side, 220 kV Star, neutral solidly grounded - Secondary side, 138 kV Star, neutral solidly grounded - Tertiary side (*) Delta (∆) - Voltage regulation Loaded on the 220 kV side

Rated power - Three-phase bank (220/138) kV 75(*) / 100 MVA (ONAN/ONAF) - Single-phase unit (500:√3/220: √3) kV 25(*) / 33 MVA (ONAN/ONAF)

(*) These values will be proposed by the Concessionaire in the Pre-Operative Study for evaluation and approval by COES-SINAC.

As a reference, a regulation under load is recommended of ± 10% on the 220 kV side, with 1% steps. However, the Concessionaire must define rated voltages, number and range of tap variations and transformer drive and control mechanisms, in accordance with what is defined, substantiated and approved in the Pre-Operative Study.




g2. Reactors

A bank made up of single-phase reactors with neutral grounding (3 units plus one reserve) will be considered, which must comply with the corresponding requirements established in section 2.3.7 Technical Requirements for Substations.

The reactors must be supplied with current transformers incorporated in bushings, two 5P20 protection cores, in the three phases and neutral terminal, in addition to the corresponding core for thermal image protection.

The Concessionaire, in accordance with what is defined, substantiated and approved in the Preoperative Study, shall determine the reactance, power and final characteristics of the equipment.

g3. Losses

The autotransformer loss levels must be guaranteed for 100%, 75% and 50% of permanent load levels of rated power. The value of losses in reactors operating at rated voltage must also be guaranteed.

The guaranteed values shall comply with provisions in IEC 60076 or its ANSI / IEEE equivalent.

g4. Protection against fire

To prevent fire, each autotransformer unit and on-load tap-changer shall be equipped with an explosion prevention and fire prevention system. This system must depressurize the autotransformer tank, the shunt changer or in the reactors, in the least time possible to avoid explosion.

The protection of autotransformer explosion and fire prevention must comply with current standard NFPA 850 or equivalent.

In order to test the correct operation of the overpressure device, the manufacturer will supply an additional unit of this device, which will be tested in the field.

g5. Oil recovery

All transformation and reactor units must have an oil collection and recovery system in case of failure.

g6. Firewalls

Transformation and reactor units shall be considered for installing firewalls to insulate units from each other.

h) 500 kV equipment

The recommended equipment will be for outdoor installation and for a double bar layout with a breaker and a half.

The cells will be made up at least by the following equipment:

a) Line connecting cells: lightning arresters, capacitive voltage transformer, line disconnector with earthing switch, current transformers, uni-tripolar operation switch, bus disconnector and wave trap.

b) Transformer bank connection cells: lightning arresters, current transformers, uni-tripolar operation switch (with switching synchronization device) and bus disconnector.

c) Connection cells to the reactor bank: lightning arresters, uni-tripolar operation switch (with switching synchronization device) and bus disconnector.

i) 220 and 138 kV equipment

The recommended equipment will be for outdoor installation and for a double bar layout with simple switch and transfer switch.

The cells will be made up at least by the following equipment:




Line connecting cells: lightning arresters, capacitive voltage transformer, line disconnector with grounding switches, current transformers, uni-tripolar operation switch, bus disconnector and wave traps.

Transformer bank connection cells: lightning arresters, current transformers, uni-tripolar operation switch (with switching synchronization device) and bus disconnector.

j) Equipment in the voltage level of the tertiary side winding

The recommended equipment will consist of metal-clad cells installed inside, in a closed environment and will be made up at least by lightning rods, tripolar removable switches, inductive bar voltage transformer, current transformers, bar system, measuring and protection equipment, and earthing disconnectors.

I) GIS equipment If encapsulated GIS cells are to be chosen these must comply with the following technical requirements.

Compartmentalization

GIS substations must be properly subdivided according the recommendations of Annex F of IEC 62271-203 (second edition) to comply with the standard requirement of service continuity. In that sense, for configurations involving double bar will be admitted that only one bar and one bay are out of service during maintenance, repair or extension of the substation

SF6 Monitoring Devices

SF6 monitoring devices must be in place. It will not be enough to have only handheld-SF6 meters. SF6 monitoring devices should be able to provide information on what SF6 pressure is contained in each compartment, so that SF6 pressure in each compartment is known and also SF6 leaks are detected before the alarm triggers due to low pressure. This is to control SF6 emissions that are less than or equal to 5% annually.

Pressure relief elements

All compartments of the GIS substations must have relief elements for overpressure.

l) Protection and measurement

Following criteria established in Chapter 2, Annex 1 of the COES Technical Procedure PR-20, transmission system protection shall be made up by the main and backup protection.

l1. Transmission lines

The transmission line must be equipped with the following protections:

Main protection: will consist of a line differential relay (87L), which should include, among others, functions of remote control, reclosure, directional overcurrent to ground, sub and over voltage, synchronism, closing on failure, etc.

Backup protection: similar to main protection.

The single-phase recloser must coordinate with the tele-protection system for the performance of the switches located at both ends of the line.

Likewise, the protection system of the 220 and 500 kV transmission lines must have synchronized phasor measurement units (PMU).

Notes:

1. The 87L relays to be implemented in the Nueva Huanuco substation, corresponding to the protection of the Chaglla - Nueva Hánuco - Paragsha lines, should be similar to the existing 87L relays in the Chaglla and Paragsha substations.

2. The existing distance relays in the Vizcarra and Tingo María substations, corresponding to the Tingo María-Nueva Huanuco - Vizcarra line protection will be replaced by 87L relays.




l2. Autotransformers and reactors

Autotransformers and reactors must have at least the following protection:

Main protection: consisting of a differential current relay.

Back-up protection: Phase and ground overcurrent relay.

Self-protection: Buchholz protection, overvoltage protection, thermal image, etc.

l3. Busbar system

For both busbar layouts, two differential busbar relays (one for each busbar), of the non-centralized type, shall be implemented, which shall incorporate the breaker failure functions and over-current functions for the coupling.

m) Telecommunications

It is necessary to have the main telecommunications system (optical fiber - OPGW) and backup (carrier wave) simultaneously and not exclusively, plus a system (satellite or other that the Concessionaire may consider) for emergency situations, allowing permanent voice and data communication between substations.




Notes:

1. In the Chaglla-Nueva Huanuco section, which is part of the Local Transmission System, the protection system will be supported by a communication system with OPGW-type fiber optic wire, which currently exists on the L-2050/2051 lines.

In the Nueva Huánuco - Paragsha section, which is part of the Regional Transmission System, the protection system will be supported by a communications system with OPGW-type fiber optic wire (as primary system) and with carrier wave (as a backup system).

2. In the Vizcarra - Nueva Huanuco - Tingo María line, which is part of the Regional Transmission System, the

protection system will be supported by a communications system with OPGW-type fiber optic wire (as primary system) and with carrier wave (as a backup system operating on line L-2252).

To that effect, the Concessionaire shall verify the availability of the newly installed fiber optic wire on the L-2252 line for Project purposes. If not available, the carrier wave system shall be implemented as the only means of communication for line operation as well as the equipment necessary for future operation of the fiber optic wire communications system.

n) Ancillary services

The ancillary service system for new facilities should consider the criteria established in Chapter 1, Annex 1 of the PR-20.

In the case of substation expansion, the system to be used must be compatible with existing ancillary services.

o) Control

The control and supervision system for new facilities must comply with the minimum equipment requirements of the automation and control system as established in Chapter 3, Annex 1 of the PR-20.

The control of each cell or bay will be made from bay control units (UCB, in Spanish), one for each cell in high voltage, which will be units other than the units incorporated in the protection relays.

In the case of expanding existing facilities, the UCBs in the line cells should be integrated to the existing control and supervision system in the Nueva Yanango and Amarilis substations.

p) Earthen mesh

The earthing system of new facilities must meet the minimum requirements set out in Chapter 1, Annex 1 of PR-20. In addition, all non-voltage elements (equipment, metal structures, support insulators and others) will be connected directly to the deep earth grid by means of exothermic welding joints.

q) Civil works

q1. In general, the scope of the civil works includes expansion works to be carried out in the existing Amarilis substations, as well as the new facilities of the Nueva Huánuco and Yungas substations, such as: earthworks, excavations, footings and foundations of equipment, gutters, concrete gutters, power cable ducts, drainage, construction of booths, roads, demolitions, brick and mortar perimeter fence, among others.

q2. The ducts and pipelines for power and control cables must be provided with metallic supports or shelves that can be used to sort out power, control and communication cables separately and in an organized manner.




3 SUPPLEMENTARY TECHNICAL SPECIFICATIONS

3.1 TRANSMISSION LINES

3.1.1 Support layout

The following layouts have been specified for the transmission lines regarding conductor layout in supports:

Transmission Line Nº

Circuits

Cond. per

phase

Guy wires

Supports Conductor

Layout

Nueva Yanango – Nueva Huánuco 500 kV TL

1 4 or more 2 Latticework type Horizontal

Nueva Huánuco – Yungas 220 kV TL

1 2 or more 2 Lattice

Triangular

Tingo María – Chaglla 220 kV TL 1 2 or more 2 Lattice

Triangular

Chaglla – Paragsha 220 kV TL variant to Nueva Huánuco

2 (*) 2 Lattice

Vertical

Vizcarra – Tingo María 220 kV TL variant to Nueva Huánuco

2 (**) 2 Lattice

Vertical

Vizcarra – Antamina 220 kV TL variant to Yungas

2 (***) (***) Lattice

Vertical

(*) Similar to the one considered in the design of the existing line (L-2050/2051) Chaglla - Paragsha (**) Similar to the one considered in the design of the existing line (L-2252) Vizcarra – Tingo María (***) Similar to the one considered in the design of the existing line (L-2286) Vizcarra – Antamina

Supports will be self-standing lattice supports.

3.1.2 Line Structures

Structures will be designed for the layouts indicated in section 3.1.1. They will be of the lattice type and self-supported. The 500 kV structures shall carry not less than four conductors per phase and two (02) guy wires, one of the OPGW type and the other of the conventional type. Structures in 220 kV will have at least two conductors per phase and two (02) guy wires, one of the OPGW type and the other of the conventional type.

3.1.3 Phase conductors

The Concessionaire will select the type of cable guaranteeing compliance with the technical requirements established in chapters 2 and 3 of this Annex. For this purpose, he will be able to evaluate the types of ACSR, ACAR or AAAC cables, depending on carrying capacity, number of conductors per phase, mechanical loads of design, span length and climatic conditions typical of the different areas that cross the lines, in such a way that the selected alternative constitutes the best final construction option.

3.1.4 Conventional guy wire type

The conventional guy wire intended for the 500 kV and 220 kV lines is of high strength galvanized steel (EHS) with a nominal cross-section of 70 mm² (11.11 mm in diameter) for all cases. However, it is up to the Concessionaire to select the most suitable cable type and section, so as to guarantee compliance with the technical requirements established for the line.

The conventional guy wire shall be capable of withstanding an estimated ground fault guaranteeing a service life of not less than 30 years of service. The Concessionaire will substantiate the calculation methodology.

3.1.5 OPGW guy cable

The OPGW wire shall consist of telecommunication optical fibers, contained in a central fiber optic protection unit, surrounded by one or more layers of concentrically braided metallic cables.




The optical unit shall be designed to contain and protect the optical fibers from possible damage caused by mechanical stresses caused by traction, bending, twisting, compression or moisture. Wire layout must be “loose” and must be sealed longitudinally against water ingress.

The wire must have the electrical and mechanical characteristics required for transmission lines and must ensure that the optical fibers do not strain during the wire life.

The OPGW guy wire shall be capable of withstanding an estimated ground fault guaranteeing a service life of not less than 30 years. The Concessionaire will substantiate the calculation methodology.

The optical fiber must fulfill the following characteristics:

a. Complete wire

General characteristics

Type OPGW

Manufacturing regulations ITU-T G.652

Size characteristics

Rated wire diameter 14,70 mm (*)

Total section approach 106 mm2 (*)

Mechanic characteristics

Approximate wire weight 0,457 kgf/m (*)

Minimum breaking load due to traction ≥ 6 370 kgf (*)

Modulus of elasticity (E) 11 500 - 12 700 kg/mm2

Linear thermal expansion coefficient 14x10 -6 - 16x10 -6 1/°C

Minimum curvature radius ≤12 Mn (*)

Thermal and electric characteristics

Electric resistance 20°C 0,37 Ohm/km (*)

Short-circuit current capacity 40 kA, 0,3 s (*)

Maximum wire temperature 210 °C (*)

b. Protection pipe

Material Aluminum

Construction Extruded

c. Optical core

Number of optical units 1

Number of fibers per optical unit 24

Construction Loose

Pipe fill Anti humidity gel

Thermal barrier Built-in

Mechanic protection Built-in

Maximum temperature withstandable by fiber and coatings 140 °C

d. Optical fiber

Geometric and Optical Characteristics

Single-mode field diameter (at 1150 nm) 9 ± 0,5 µm (*)

Coating diameter 125 ± 2,4% µm (*)

Single-mode field concentricity error ≤ 0,6 µm (*)

No coating circularity < 2% (*)

Shear wave length 1 260 nm (*)

Proof test ≥ 1% (*)

Color code Standard

Transmission characteristics




Attenuation for λ = 1 550 nm ≤ 0,23 dB/km (*)

Attenuation for λ = 1 625 nm ≤ 0,25 dB/km (*)

Chromatic dispersion coeff. λ = 1528-1561 nm ≤ 2,0 a 6,0 ps/km.nm (*)

Chromatic dispersion coeff. λ = 1561-1620 nm ≤ 4,5 a 11,0 ps/km.nm (*)

Environmental conditions

Minimum relative humidity 75% a 40 °C

Maximum relative humidity 99% a 40 °C

Functioning temperature range 5 – 50 °C

Installation Outdoors

Nota (*): Referential values, to be defined by the Concessionaire following approval by the Grantor.

3.1.6 Conductor Accessories

Scope

These specifications set out the technical requirements for the conductor accessory supply, such as: arming rods, splice sleeves, repair sleeves and tools for their application, spacers, dampers, and others to be used with the selected conductor.

Standards

For the accessory design, manufacture and transportation, the current versions of the following standards shall be used, without limitation: CNE Current supply, ASTM A 36, ASTM A 153, ASTM B201, ASTM B230, ASTM B398, IEC 61284, UNE 207009:2002.

Technical characteristics

a) Arming rods: they shall be of aluminum alloy, helicoidal and preformed, to be easily mounted on the conductors. Arming rod sizes will be appropriate for selected conductor sections.

Once assembled, the rods should provide a uniform protective layer, without gaps and with adequate pressure to prevent loosening due to aging.

b) Splicing sleeves: shall be of the compression type, material and diameter appropriate for the selected conductor. The minimum breaking load will be 95% of that of the corresponding conductor.

c) Repair sleeves: shall be of the compression type. They will only be used in cases of slight damages to conductor outer layer. The mechanical characteristics will be similar to those in the splice sleeves.

d) Dampers: must be of the stockbridge type to control the wind vibration levels within permitted safety limits, retaining their mechanical and damping properties over the life of the line.

3.1.7 Insulators

In general, the type and material of the insulators will be selected according to the characteristics of the areas crossed by the lines, taking into account the good practices and experiences of previous transmission lines built in Peru in similar areas. In that sense, the Concessionaire must research those contaminants or potential sources of contamination existing in the area that could affect the performance of the insulators.

Based on the results of the research, it is necessary to determine the measures minimizing the impact of the contamination, such as: use of silicone insulated glass insulators, layout of the line routing, increase of the leakage line, use of equipotential rings improving the performance of contaminated insulators in wet areas, etc.




500 kV and 220 kV line insulators shall be evaluated between between homogeneous, standard, anti-fog tempered or porcelain glass, with forged steel or malleable galvanized iron, provided with locking pins made of corrosion-resistant material.

Insulator chains will be made up of the necessary number of units to ensure adequate leakage length according to the level of contamination of areas through which the lines cross, their altitude above sea level and the maximum voltage level of the system.

Similarly, these chains must guarantee the required insulation level against surges of atmospheric surges, switching undervoltages and overvoltages at industrial frequency, for the same previously mentioned altitude conditions and the levels of insulation defined in section 2.2.9 of this Annex.

The number of insulators to be considered by suspension chain, according to altitude and facility voltage level, which will be evaluated in the Pre-Operative Study, is the following:

Altitude

Units per suspension chain

500 kV 220 kV

Conductor - Window

Conductor - Crosshead

Conductor – Crosshead

Up to 3000 masl 33 27 18

From 3001 masl to 4000 masl 38 31 -

From 4001 masl to 4500 masl 2x41 2x34 -

In the case of larger angle, terminal and anchor structures, the chains will use an additional (01) insulator to those used in the suspension chains.

The Concessionaire will establish the technical characteristics of insulators to be used in the lines, in such a way as to ensure adequate insulation levels; however, as a reference, the following are required insulator characteristics:

Characteristics Value

Type of insulator Fog

Insulating material Tempered glass

Manufacturing standard IEC -60305

Disc diameter 330 mm

Spacing per insulator 146 mm

Leakage line length 440 mm

Breaking load 160 kN

In all cases adequate mechanical insulator strength must be verified, according to the working conditions to which they are subjected, if necessary, evaluating, the use of double chains or insulators with higher breaking load.

3.1.8 Accessories for insulator chains

Scope

These specifications establish the technical requirements for the design and manufacture of the assembly accessories of the insulator chains, both for suspension and anchorage, including adapters, shackles, suspension and anchor clips, counterweights, unloaders, etc.

Standards

For designing, manufacturing and transporting accessories, the current versions of the following standards shall be used, without limitation: CNE Current supply, ASTM A 36, ASTM A 153, ASTM B201, ASTM B230

3.1.9 Grounding

Materials to be used:

a) Earthing conductor: Preferably a conductor with steel core and copper coating, with minimum 70 mm2 cross-section and approximately 40% IACS conductivity.




b) Electrodes or rods: they will have a copper-covered steel core with approximately 40% IACS conductivity.

c) Electrode-cable connector: made of bronze and will connect cable and electrode.

d) Two-way connector: it will be made of tinned copper for connecting grounding cables.

e) Conductive cement: it will be used as an alternative to improve earthing resistance of structures.

f) In cases where the ground resistivity is very high, other means may be used to achieve an acceptable grounding resistance value, such as the use of capacitive grounding.

3.2 SUBSTATIONS

Generally, specifications of equipment in this subsection must be respected, and any modification or change to them proposed by the Concessionaire must be previously reviewed and approved by the Grantor.

Yard equipment specifications shall comply with voltage and current levels indicated in paragraph c) Voltage and Insulation Levels and d) Current levels of section 2.3.4.

a) They must comply with the minimum design criteria established in Chapter 1, Annex 1 of PR-20.

b) The corresponding IEC standards will be applied for each equipment and / or those that comply with them.

c) Cabinets and control boxes shall have an IP-54 degree of protection.

d) All metal parts shall be hot galvanized according to ASTM or VDE Standards, and windings shall be of insulated copper.

e) Circuit breakers

Switches to be used shall be of the live tank type and shall be supplied with shock absorbers against earthquakes, if required.

Switches shall have the following complementary characteristics:

Description 500 kV 220 kV 138

Short-circuit duration 1” 1” 1”

Total opening time 2 cycles 3 cycles 3 cycles

Operation sequence:

a) Autotransformer and reactor switching

b) Line switching

CO-15”-CO

O-0.3”-CO-3’-CO

CO-15”-CO

O-0.3”-CO-3’-CO

CO-15”-CO

O-0.3”-CO-3’-CO

Type Outdoors Outdoors Outdoors

f) Disconnectors

The disconnectors will be for external mounting, of the pantograph type, semi-pantograph, or conventional, with three columns of lateral opening (with rotating central column), motorized, with local and remote control.

The disconnectors may open and close circuits with residual currents under voltage. The main disconnector and grounding blades shall have a mechanism that prevents the closing of one blade when the other blade is in the closed position.

For all disconnectors and grounding blades there will be an electrical block that will need to be released to perform the manual opening or closing operation. For line disconnectors, a local lock, both manual and electrical, will be available.

An automatic mechanical interlock shall be provided to prevent any unintended disconnector movement in its extreme opening or closing positions.

g) Current transformers




Current transformers shall be single-phase, secondary, for outdoor vertical mounting, insulated in an oil bath or in SF6 gas, and they shall be hermetically sealed.

They must be able to conduct the primary rated current for one minute, with the secondary circuit open.

The core will be toroidal and will consist of magnetic steel sheets with very low losses and the coils will be made of insulated copper.

For transformers working in relation to disconnectors, high-frequency currents and voltages transferable to the secondary and ground circuits must be taken into account during the operation of the adjacent disconnectors under voltage. The manufacturer constructive design shall be such as to prevent:

g1) That the igh current density at certain points in the equipment may cause localized overheating.

g2) That very short internal overvoltages may cause dielectric ruptures in liquid and solid insulation.

Current transformers shall have the following complementary characteristics:

Description 500 kV 220 kV 138 kV

Current in continuous operation 1000 – 2000 A 1250 – 2500 A 500 – 1000 A

Secondary current 1 A 1 A 1 A

Short-circuit thermal intensity 40 kA 40 kA 40 kA

Characteristics of measuring cores a) Precision class b) Power

0,2 %

15 VA (*)

0,2 %

15 VA (*)

0,2 %

15 VA (*)

Characteristics of protection cores a) Precision class b) Power

5P20

15 VA (*)

5P20

15 VA (*)

5P20

15 VA (*)

(*) Minimum value to be defined by the Pre-Operative Study.

h) Autotransformers and Reactors

Autotransformers and reactors will be immersed in oil for outdoor installation, cooled by natural circulation of oil and air (ONAN) and ventilation (ONAF) with the following characteristics:

Autotransformers

Description Nueva Huánuco 50/220 kV substation

Primary winding voltage 500 / √3 kV

Secondary winding voltage 220 / √3 kV

Tertiary winding voltage -- kV (*)

Type Single-phase autotransformer

Rated power per single-phase unit 250 MVA

Rated power of three-phase bank 750 MVA

Plus one reserve single-phase unit

Refrigeration ONAF

Neutral connection Solid to earth

Accessories Bushing type current transformers

Description Nueva Huánuco 220/138 kV substation

Primary winding voltage 220 / √3 kV

Secondary winding voltage 138 / √3 kV

Tertiary winding voltage -- kV (*)

Type Single-phase autotransformer

Rated power per single-phase unit 33 MVA

Rated power of three-phase bank 100 MVA

Plus one reserve single-phase unit




Refrigeration ONAF

Neutral connection Solid to earth

Accessories Bushing type current transformers

Reactors

Description

Nueva Huánuco 500 kV substation

Nueva Huánuco – Yanango TL

Primary winding voltage 500 / √3 kV 500 / √3 kV

Type Single-phase Single-phase

Rated power per single-phase unit

33 MVAr (**) 30 MVAr (**)

Rated power of three-phase bank

100 MVAr (**)

Plus one reserve unit

90 MVAr (**)

Plus one reserve unit

Refrigeration ONAN ONAN

Neutral connection Solid to earth Neutral reactor (**)

Accessories

Bushing type current

transformers Bushing type current

transformers

(*) Final values will be defined by the Concessionaire and approved in the Preoperative Study by COES. (**) Number and size of components, as well as basic specifications of the reactive compensation equipment

shall be defined by the Concessionaire and approved by COES-SINAC in the Pre-Operative Study.

These will mainly consist of the following components:

h1. Cores

The cores will be constructed in such a way as to minimize eddy currents. They will be manufactured based on silicon steel sheets with oriented crystals, free of fatigue due to aging, high degree of magnetization, low losses by hysteresis and high permeability.

The magnetic circuit shall be solidly grounded to the core adjustment structures and to the tank in a safe manner so as to allow easy disconnection to ground when the tank core needs to be removed.

h2. Windings

All cables, rods or conductors used for windings shall be of high quality and pure electrolytic copper.

Conductor insulation will be made of high thermal stability paper resistant to aging, a varnish bath can be applied to improve mechanical resistance.

The fully assembled winding and core assembly shall be vacuum dried to ensure moisture extraction and then impregnated and immersed in dielectric oil.

h3. Tank

The tank will be built with high-strength structural steel plates, reinforced with steel profiles.

All openings that are necessary in the walls of the tank and in the cover will be provided with flanges welded to the tank, prepared for the use of elastic gaskets that do not deteriorate under the effect of the hot oil. Oil-resistant synthetic rubber gaskets will not be accepted.

The tank shall be provided with two grounding plugs with their respective connectors located at the opposite ends of the bottom of the tank. It will also be provided with valves and accessories (the list is not limited).

h4) Bushing insulators and terminal boxes

Bushing insulators will be of the capacitor type. The porcelain used in the bushings must be homogeneous, free of cavities, protrusions, peels or cracks and must be impermeable to moisture.




All parts of the bushings exposed to atmospheric action must be made of non-hygroscopic material.

h5) Insulating oil

The reactor will be supplied with its full insulation oil supply plus a reserve of at least 5% of the net volume. These supplies will be shipped separately in airtight steel containers.

The reactor will be shipped without oil, and instead, will be filled with nitrogen gas for transportation.

The dielectric oil to be supplied will be refined mineral oil, with no inhibitory substances in its chemical composition and which must comply with the IEC 60354 and IEC 60296 Standards.

h6) Current transformers

Reactors will be supplied with current transformers built in the bushings, two cores, both for protection, in all windings and in the three phases. In addition, they will have current transformers for thermal image protection.

i) Lightning Arresters

Scope

These specifications cover the minimum characteristics required for the design, manufacturing and testing of lightning arresters at all voltage levels, including the ancillary elements required for their correct assembly and operation.

Standards

The current versions of the following standards shall be used for designing, manufacturing and transporting lightning arresters, without limitation: CNE Supply, IEC 60099, IEC 60099-4, ANSI C.62.11.

Constructive characteristics

Generally, zinc oxide (ZnO) dischargers will be supplied for minimum class 2 external installation for 138 kV, class 4 for 220 kV and class 5 for 500 kV.

They will be suitable for equipment protection against atmospheric surges and switching surges. The permanent current must return to a constant non-increasing value after dissipation of the transient produced by a discharge.

Arresters shall be suitable for systems with solidly grounded neutral, and the residual voltage of impulse currents shall be as low as possible.

There should be no corona discharge. Sharp points in terminals or ends must be adequately shielded by the use of anti-corona rings in order to comply with the requirements of radio interference and corona effect.

The resistive unit material will be zinc oxide, and each discharger may consist of one or more units, each of which must be a discharger itself. They will be provided with discharge counters.

4. CONDUCTOR AND INSULATOR CONTAMINATION CONTROL

The Concessionaire will schedule periodic inspections and cleaning of line conductors and insulators in order to control the accumulation of contamination and ensure adequate levels of transverse losses (corona effect and leakage currents), as well as the effect of radio interference.

From the first year of the Power Line Commercial Operation, the Concessionaire will carry out the following activities:

a) Regular visual inspections

b) Taking contamination samples

c) Cleaning conductors

d) Cleaning insulators

Before the end of the first year of Commercial Operation, the Company shall submit detailed and specific procedures to OSINERGMIN, as well as inspection and cleaning programs.




The Concessionaire will define its methodology for this activity based on the experiences of countries with 500 and 220 kV lines.

4.1 PERIODIC VISUAL INSPECTIONS

The Concessionaire will carry out visual inspections to identify line sections showing high levels of surface contamination in conductors and chains of insulators.

Inspections shall cover the entire length of the line and this shall be carried out at least once a year.

OSINERGMIN has the power to witness inspections and request their repetition, if necessary, in order to verify the reported contamination level.

The levels of conductor and insulator contamination will be classified as Low, Medium and High, pursuant to Table N ° 1.

The procedure for these visual inspections is as follows:

a) Inspections will be carried out by specialists in transmission lines, equipped with safety equipment, binoculars and a digital camera with date stamp.

b) Inspections will be carried out only during the day, with the presence of sunlight, absence of rain, low humidity and no strong winds.

c) The technician in charge of the inspection shall be located on the ground at a distance of 30 to 50 meters from the line axis; using binoculars, the technician will observe contamination accumulation on the surface of conductors and insulators in the three phases of the span. If necessary, he/she will carry out the inspection climbing up to the line structure.

d) Particular attention must be paid to the installation points of spacers and dampers, in order to verify conductor condition at attachment points.

e) According to Table 1, the technician will rate and record the conductor and insulator contamination level in the logbook.

f) If contamination level is Medium High, the technician will take a photographic record.

g) The steps indicated in (c) to (f) shall be repeated for each of the other spans of the inspected line until 100% of the sections to be inspected are completed.

h) The Concessionaire will verify the contamination rating reports and group the sections by contamination levels of. If there are observations on the rating, reassign the correct rating by using the photograph or, if such is the case, a new field inspection will be carried out.




Table N° 1: Criteria to rating contamination levels

Level Visual aspect Description

Low

Minimum contamination, there are no accumulation spikes

Medium

Visible contamination with small contamination spikes

along the conductor

High Visible contamination with large accumulation spikes

Visual inspection reports will be submitted to OSINERGMIN.

4.2 CONTAMINATION SAMPLE TAKING

According to the results of the visual inspections, the Concessionaire will prepare a contamination level verification program by taking samples of all those sections rated as Medium or High level, or in sections in which visual inspection has not been decisive.

Sampling work will be carried out with de-energized lines, so the Concessionaire must coordinate the program to cut the lines’ service with the COES, preferably within the outage periods for scheduled maintenance.

The sampling procedure shall be as follows:

a) Sampling is performed with the transmission line out of service, with presence of sunlight, absence of rain, low humidity and no strong winds.

b) Samples are taken in sections from 60 to 100 m of conductor, of one of the three phases of the selected section.

c) The conductor cleaning team collects contamination along the conductor surface.

d) The collected contamination is weighed in a precision scale expressed in milligrams.

e) The contamination level (NC, in Spanish) in mg / cm² is determined, applying the following formula::

NC = Contamination weight [mg] / Conductor surface [cm²]

Where:

The conductor surface is 2 r L, r is the radius of the conductor in cm and L is the length of the conductor’s portion where the sample has been taken, in cm.

f) For insulator chains the sample of one of the bells will be taken, which visually shows the greatest contamination. The contamination level (NC) in mg / cm² is determined by applying the formula:

NC = Contamination weight [mg] / Bell’s outer surface [cm²]

g) The NC value is compared with values in Table No. 2 and the contamination level is determined in the conductors.




Table N° 2: Contamination levels

Contamination level Weight (mg / cm²)

Low 5 – 20

Medium 20 – 45

High > 45

h) The steps indicated in subsections c) to g) are repeated for the other sections of the line that require sampling.

Sampling reports will be sent to OSINERGMIN.

Contamination level values established in Tables1 and 2 may be revised at the request of OSINERGMIN and in agreement with the Concessionaire.

4.3 CONDUCTOR CLEANUP

Conductor cleanup will be carried out in all the sections rated at Medium and High contamination level. The cleaning work shall be carried out when the transmission line is taken out of service, in accordance with the intervention program approved by the COES at Concessionaire request. The procedure for cleaning the conductors is as follows:

a) Conductor cleanup will be carried out in the scheduled sections, with the transmission line out of service, in the presence of sunlight, absence of rain, with low humidity and no strong wind.

b) Conductor cleanup will be carried out by specialists in transmission lines equipped with safety, conductor cleaning, and specialized maneuver equipment, and must comply with established safety standards.

Conductor cleanup reports will be forwarded to OSINERGMIN.

4.4 INSULATOR CLEANUP

Cleaning of insulators will be scheduled to be carried out at the same time as the conductor cleanup.

In general, the same procedure as for conductor cleanup will be followed.

The Concessionaire may, if deemed appropriate, carry out hot cleanup work. The Concessionaire will prepare the verification procedures and protocols regarding insulator

cleanliness and reference levels. Insulator cleanup reports must be sent to OSINERGMIN, which

can perform field checkups.




SE CARAPONGO

SE COLCABAMBA

SE ANTAMINA

S.E. YANANGO 500 / 220 kV

(En licitación)

Leyenda:

Instalaciones del Proyecto

Instalaciones existentes o en construcción

Instalaciones futuras

SE PARAGSHA 2

FUTURO

FUTURO

FUTURO

FUTURO

FUTURO

SE VIZCARRA

FUTURO

FUTURO

FUTUROFUTURO

FUTURO

FUTURO

S.E. NUEVA HUÁNUCO

500 / 220 / 138 kV

S.E. YUNGAS 220 kV

4 x 30 MVAr 4 x 30 MVAr

ATR500/ 220 kV

4 x 33 MVAr

(184 km)

FUTURO

FUTURO

ATR500/ 220/ -- kV

750/ 750/ -- MVA

FUTURO

SE PARAGSHA

FUTURO

ACOPLE

(2 k

m)

FUTURO

SE HUÁNUCOSE TINGO MARÍA

S.E. AMARILIS 138 kV

(En construcción)

(16.5 km)

(29 km)

(29 km)

(29 km)

(29 km)

(16.5 km)

SE VIZCARRA L-2286 a L-2286 b

L-22

52 b

L-20

50 b

L-20

51 b

(99.

5 km

)

(6.5 km) (45.5 km)

(0.5

km

)

(0.5

km

)

(104

km

)

L-22

52 a

(70

km)

S.E. CHAGLLA 220 kV

(28 km)

(28 km)

L-2050 a

L-2051 a

138 kV

L-2251

A SE AGUAYTÍA

S.E. TINGO MARÍA

220/138 kV

220 kV

(37.4 km)

CH BELO

HORIZONTE 240 MW

ATR220/138/ -- kV

100/100/ -- MVA

FUTURO

CH CHAGLLA

456 MW

220 kV

138 kV

(100 km)

SCHEME N°1

YANANGO 500/220 kV substation

transverse losses

YANANGO 500/220 kV substation (currently being tendered)

Legend:




ANNEX 2

Project Verification Procedure

1. Annex objective

This Annex describes the procedure to be followed by the Parties and the Inspector to verify -

prior to the commencement of the experimental operation- that the Project complies with the

requirements set out in Annex 1. With that purpose, the different control parameters (voltage,

current, active power and reactive power, unloaded and loaded, losses, etc.) will be checked

with the project at energized modality.

2. Test organization

Tests will be organized according to the following rules:

a) The Concessionaire shall choose a recognized international standard. The units of the

international metric system will be used.

b) The Concessionaire shall notify the Grantor, the Inspector, OSINERGMIN and COES, in

advance of thirty (30) calendar days before the beginning of the tests, that it is ready to carry

out the verification referred to in this Annex. This communication will indicate the date(s), time(s)

and place(s) of the tests to be performed.

c) Together with the notification referred to in subsection b), the Concessionaire shall deliver:

The general program and protocols to be followed, for the Inspector's consideration and

approval.

The COES approval and authorization to carry out the specified tests, pursuant to

Technical Procedure PR-20 (or its replacement) indicating the dates and times of

execution.

All designs relevant to the test, related data, documents and specifications, as well as

certificates and reports on operating conditions for the Inspector's consideration.

The operational studies the COES requires to approve the Project incorporation to the

SEIN (power flow, short circuit, stability, surges, etc.), as well as the study on lightning

discharges by virtue of which it is expected that the failure rate will not exceed the

specified value.

d) The Concessionaire shall appoint and deploy the Head of Evidence and the necessary

support personnel, supplying all duly calibrated equipment and instruments for test execution.

The Inspector will highlight the personnel stipulated in his inspection service agreement, and the

Grantor will deploy the personnel that he deems necessary.

e) Staff form the equipment manufacturers may participate as observers or as test support

personnel.

3. Test performance

Test performance will be subject to the following rules:

a) The Head of Evidence will conduct and monitor the tests and report on test conditions.

He/she will also be responsible for all measurements, computation of results and final report

preparation. His/her decision will be decisive regarding any issue concerning the test or its

performance.

The tests shall be conducted in accordance with the COES procedures and instructions. Testing

of the optical fiber system shall follow the technical specifications set forth in Annex No. 5,

Telecommunications, of this Agreement.




b) The Concessionaire shall provide all reasonable facilities to the Inspector to obtain actual,

complete and acceptable data regarding all parts of the equipment related to the transmission of

electrical energy in the Project. In addition, the Inspector must have physical access to all

components, related to electromechanical equipment in the Project.

c) The main Project components will be inspected, at Inspector request, before the beginning of the

test.

d) At the end of each test and within acceptance levels, a test record will be drafted, which ends the

process. Each record shall contain: (i) the list of personnel of the Parties, the OSINERGMIN

representatives, and the inspector who participated in the tests; (ii) the protocol of tests carried

out with their results; also, of tests not carried out with the corresponding waiver; And, iv) other

information that the Concessionaire, OSINERGMIN and/or the Inspector deem pertinent.

e) In case the Inspector and/or OSINERGMIN consider that the result is not satisfactory, as

established in the test reports, the Concessionaire will proceed to make the corresponding

correction. The new test will be done only at the point or at the points that were not satisfactory.

The Grantor and/or OSINERGMIN may not request new tests or inspections, or observe or reject

their results, in case their representatives have not attended such tests or inspections.

Once the tests have been completed, the Head of Evidence will send the pertinent minutes to the

COES, duly approved by the Inspector, so that the Inspector will proceed to start the

commissioning program for each Project component.

f) Upon completion of all tests, the Head of Evidence will prepare and submit a final report to the

Inspector, OSINERGMIN and the Grantor, with details on calculation and presentation of

results. The Inspector must approve the final report within a maximum period of Ten (10) Days

following delivery of said document. The verification procedure referred to in this annex shall be

deemed to have been complied with when OSINERGMIN approves said final report, which shall

occur within a maximum period of ten (10) Days of submission of the final report by the

Inspector. No response will mean report approval. In case OSINERGMIN makes observations

to the final report, proceed as follows:

i. If, according to the evaluation by OSINERGMIN, the observations can be solved, the

Concessionaire must address them within the period defined by OSINERGMIN and the start of

the experimental operation may be continued.

ii. If, according to the evaluation carried out by OSINERGMIN, the observations are deemed as not

solvable, they must be addressed before the start of the experimental operation. In this

situation, the deadline for final report approval will be suspended as from notification of

observations, by Osinergmin, until they are addressed by the Concessionaire.




ANNEX 3

Definitions

1. Allowed Creditors:

The concept of Allowed Creditors is only applicable for the Assumptions concerning Allowed

Guaranteed Indebtedness. Allowed Creditors must have Grantor authorization to accredit such

status. For such purposes, an Allowed Creditor may be:

i. Any multilateral credit institution of which the State of the Republic of Peru is a member;

ii. Any institution, Export Credit Agency, or any governmental agency of any country with which the

State of the Republic of Peru maintains diplomatic relations;

iii. Any international financial institution designated as Bank of First Class in Circular No. 022-2016-

BCRP, issued by the Central Reserve Bank of Peru, or any other circular that subsequently

modifies or replaces it, or but only, if it incorporates new institutions.

iv. Any other international financial institution that has a risk rating of not less than the rating of the

Peruvian sovereign debt corresponding to foreign currency and long term assigned by an

international risk rating entity that rates the Republic of Peru.

v. Any domestic financial institution with a local risk rating of not less than ("A"), evaluated by a

domestic risk rating company, duly authorized by the Securities Market Superintendence (SMV);

vi. all institutional investors -such as the Pension Fund Administrators -AFP-, which directly or

indirectly acquire any type of security issued by i) the Concessionaire, ii) the trustee or

securitization company incorporated in Peru or abroad that acquires rights and / or assets derived

from the Concession Agreement;

vii. Any person or entity that directly or indirectly acquires any type of security or debt instrument

issued by the Concessionaire through a public or private offering or through trust funds,

investment funds or a securitization company incorporated in Peru or abroad.

It is expressly established that under no circumstances shall the shareholders -or partners or

shareholders of the Concessionaire- be Allowed Creditors, whether directly or indirectly. Allowed

Creditors must not be economically related to the Concessionaire, in accordance with CONASEV

Resolution No. 090-2005-EF-94.10, amended by CONASEV Resolution No. 005-2006-EF /

94.10, or any regulation that replaces it.

In the cases of sub-sections (i) to (v), to be considered as Allowed Creditor, it is necessary to

have such status at the date of signing the respective financing agreement.




2. Competent Governmental Authority: It is the national, regional, departmental, provincial or district body or institution, or any of its entities or agencies, whether regulatory or administrative, or any public entity or agency of Peru that, according to law, exercises executive, legislative or judicial powers, or belongs to any of the aforementioned governments, authorities or institutions, with competence over the persons or matters in question. 3. Tariff Base: It has the meaning stipulated in Law No. 28832. 4. Concession Assets: These are the movable and immovable property that comprise land, buildings, equipment, accessories, concessions, licenses, easements to be incorporated according to the Laws and Applicable Provisions, and in general all works, equipment, vehicles, spare parts, tools, plans, studies, software, databases, manuals and technical information, provided or acquired by the Concessionaire for proper Project construction and operation, under the terms of this Agreement and for the fulfillment of the Concession purpose. They include Reinforcements, if the Concessionaire had executed them in accordance with the Applicable Laws and Provisions. 5. Concessionaire Assets: They are all property owned by the Concessionaire that does not qualify as Concession Assets and are freely available to the Concessionaire. 6. Financial Closing: It is the date on which the Concessionaire signs the financing agreement that covers the needs for Project construction and equipment. 7. COES: It is the National Interconnected Electrical System's Committee of Economic Operation. 8. Grantor: It is the State of the Republic of Peru, represented by the Ministry of Energy and Mines. 9. Concession: It is the legal relationship in Public Law that is established between the Grantor and the Concessionaire as of the Closing Date, by means of which the Grantor grants the Concessionaire the right to economic exploitation of a public utility, during its validity term, according to Agreement Terms and to the Applicable Laws and Provisions. 10. Concessionaire: It is the legal entity incorporated by the Successful Bidder, according to the Bidding Terms, who subscribes the Concession Agreement with the Grantor. 11. Agreement or Concession Agreement: It is the agreement herein, including the annexes and appendices that comprise it, which governs the obligations and rights between the Grantor and the Concessionaire. 12. Security and Warranty Agreement:

Agreement referred to in Article 24 of Legislative Decree No. 1224, which grants the State guarantee in support of the Concessionaire's representations, obligations and securities stipulated in the Concession Agreement.




13. Total Service Cost: It is the sum of the Project's annual cost of operation and maintenance plus the annuity of the investment cost calculated with the 12% rate and a period of thirty (30) years. 14. Total Destruction: That situation entailed by any cause that produces damage to the Project, not attributable to any of the parties, estimated at the greater of: (A) thirty percent (30%) of its replacement value carried forward, or (B) the maximum probable loss (PMP, in Spanish) referred to in Clause 7.2.b. 15. Days: These are the business days that are not Saturdays, Sundays or holidays, including those that are not working days for: a. Public Administration at the national level, and / or; b. Those territories where a non-working day has been declared by law in the Region or Regions where the Project is developed. All time references must be understood to be made at the time of Peru. 16. Dollar or US $: It is the currency or monetary sign of legal tender in the United States of America. 17. Financial Institution: They are: a. Banking and insurance companies defined in accordance with Law No. 26702, General Law of the Financial and Insurance System and Organic Law of the Banking and Insurance Superintendence ; b. Top-tier foreign banks, and c. International financial institutions. d. For Tender purposes they are those listed in Annex 6 of the Rules. 18. Supervising Company: It is the Person, hired and paid by the Concessionaire, whose selection must have the compliance of OSINERGMIN. Their work will begin from the engineering study start, and they must verify that the study has considered Project specifications as stipulated in Annex 1 of the Agreement and that it complies with the respective standards. 19. Allowed Guaranteed Indebtedness: It consists of indebtedness for financing or credit operations, issuance of transferable securities or debt instruments and / or money loans granted by any Allowed Creditor under any modality, whose funds will be aimed at fulfilling the object of the Agreement, including any renewal, rescheduling or refinancing of such indebtedness and which is guaranteed in accordance with Clause 9. 20. State: It is the State of the Republic of Peru. 21. Pre-operative Study This study refers to the COES PR 20 procedures or substitute rules 22. Essential Facilities:

These are Concession Assets whose use is indispensable for providing the Service and which allow provision of transmission and distribution services by third parties, in accordance with the Applicable Laws and Provisions. 23. Closing Date: This is the day on which the Concession Agreement is signed following compliance with all conditions and declarations established in the Terms and/or in the Agreement.




24. Bid Bond: It is the letter of guarantee issued by a Financial Entity that the Concessionaire will submit to guarantee since the closing date to the POC: a) the fulfillment of all its contractual obligations; b) for the payment of penalties and c) the payment of the sums ordered to be paid, by means of definitive final ruling or arbitral award. In all cases, the Bid Bond may be made up by more than one letter of guarantee provided that they add up the total amount required for the corresponding guarantee. These guarantees must have the characteristics of being joint, unconditional, irrevocable, expressly waiving the benefit of excussion and division, and automatic execution. The Bid Bond will be drafted as in the format of Annex 4 of the Agreement 25. Performance Bond It is the guarantee letter issued by a Financial Institution that will be presented by the Concessionaire to guarantee the fulfillment of all its contractual obligations from the POC, including the penalties of the Agreement. In all cases, the performance bond may be constituted by more than one bond, if they add up to the total amount required for the corresponding guarantee. These guarantees must have the characteristics of being joint, unconditional, irrevocable, expressly waiving the benefit of excuse and division, and automatic execution. The performance bond shall be in accordance with the format of Exhibit N° 4-A of the Contract 26. Inspector: It is the Person selected and hired by the Concessionaire at the proposal of the Grantor, whose main function is to review the engineering and construction methods of the Project, oriented to the internal tests of operation carried out according to Annex No. 2 of the Agreement. 27. Concession Law or LCE: It is Decree Law No. 25844, Electric Concessions Law and its amending regulations. 28. The Applicable Laws and Provisions: The set of legal provisions that directly or indirectly regulate the Concession Agreement, they include the Political Constitution of Peru, laws, regulations with the rank of law, supreme decrees, regulations, guidelines and resolutions, as well as any other that conform to the legal order of the Republic of Peru, and are applicable and shall be compulsory for the Parties 29. Bid: It is the offer submitted by the Bidder through Form 4 of the Tender Documents. 30. Qualified Operator: It is the Operator that has been declared as such, on the grounds that it has proved that it complies with the technical requirements of the Tender Qualification or whoever happens to succeed it, according to the Agreement. It is the holder of the Minimum Share. 31. Trial Period: A period of thirty (30) calendar days starting when the Power Line is connected to the SEIN and energized, in which the Concessionaire is exempt from penalties for service interruptions according to the Applicable Laws and Provisions, and will not be entitled to receive Base Rate payment. 32. OSINERGMIN:

It is the Supervisory Body for Energy and Mining Investment, or the public entity that succeeds it, authorized to supervise compliance with legal, technical and contractual provisions within the scope




of its competence. It also supervises and sanctions in accordance with the Classification and Scale of Sanctions approved for such purpose.

33. Party:

It is, as the case may be, the Grantor or the Concessionaire. 34. Parties: They are, jointly, the Grantor and the Concessionaire. 35. Minimum Share: It is the shareholding or percentage of voting shares that the Qualified Operator must have and maintain in the Concessionaire's capital stock, which amounts to twenty-five percent (25%) of the Concessionaire's subscribed and paid-in capital stock, for the term stipulated in the Agreement. 36. Person: It is any legal entity, national or foreign, that can carry out legal acts and assume obligations in Peru. 37. Project: It is the Project "500kV Nueva Yanango- Nueva Huánuco and Related Substations Link," whose electrical infrastructure is described in Annex 1 of the Agreement. 38. Commercial Commissioning or "POC": It is the date from which the Concessionaire begins to supply the Service and is authorized to charge the Tariff Base. Said date shall be that recorded in the Minutes referred to in Clause 5.4. 39. Regulation: It is the Transmission Regulation approved by Supreme Decree 027-2007-EM, as well as its supplementary and amending regulations. 40. SEIN: It is the National Interconnected Electrical System. 41. Service: It is the public service of electric power transmission to be provided by the Concessionaire through the Project under the terms of the Agreement and the Applicable Laws and Provisions. 42. Accounting value:

Regardless of the value established for tax purposes or for any other purpose, "book value" is for the Agreement the carrying amount of the Concession Assets expressed in Dollars (according to audited Financial Statements prepared in accordance with generally accepted standards and principles in Peru), net of accumulated depreciation and amortization at the time of calculation. For these purposes, depreciation will be calculated under the straight-line method, for a period of thirty (30) years. If the depreciation for tax purposes is greater than that defined in this paragraph, the difference between (1) the income tax that would have been paid under the depreciation method described above and (2) the income tax resulting from the depreciation method used by the Concessionaire, will be discounted. The book value does not include revaluations of any nature, for the Agreement provision purposes.




ANNEX 4

Bid Bond

(city), __ ________ 201….

Messrs.

MINISTERIO DE ENERGÍA Y MINAS

Av. de las Artes Sur Nº 260, San Borja

Lima - Perú.-

Ref.: Guarantee Letter Nº…………..

Maturity:......................

Integral Project Tender for the “500kV Nueva Yanango - Nueva Huánuco and Related Substations Link”

Sirs,

We hereby -at the request of our clients- Messrs. ...., (legal person name) (hereinafter referred to as "the

Concessionaire"), establish this joint and several guarantee, irrevocable, unconditional and automatic,

with no benefit of excussion or division, up to the sum of twenty seven million US Dollars of the United

States of America (US $ 27,000,000) in favor of the Ministry of Energy and Mines to ensure the correct

and timely fulfillment of 1) each and every one of the obligations borne by the Concessionaire; 2)

payment of penalties and 3) payment of the sums ordered to be paid, by definitive final ruling or

enforceable arbitral award, resulting from the conclusion of the Concession Agreement for the " 500kV

Nueva Yanango - Nueva Huánuco and Related Substations Link" (hereinafter "The Agreement").

In order to honor the guarantee herein in its favor, it will suffice the Ministry of Energy and Mines to

submit a notarized request, which must be signed by the General Director of Administration, or person

duly authorized by this Entity, indicating that our clients ............. ... (name of the Concessionaire) have

not fulfilled the obligations guaranteed by this document.

Any delay on our part to honor the bond referred to above, will accrue interest equivalent to the maximum

LIBOR rate, plus a spread of 3% per annum. The LIBOR rate will be established by the daily Cable

Reuter that is received in Lima at 05:00 p.m. London time, from the date on which the notarized request

for payment was received. Interest shall accrue from the date on which it is required to be fulfilled and

until effective date of payment.

The bond herein will also guarantee the correct and timely fulfillment of Concessionaire obligations in

accordance with the provisions contained in Legislative Decree 1224 and its regulations, or the

regulations that amend or replace them.

Our obligations under this bond will not be affected by any dispute between the Ministry of Energy and

Mines, or any entity pertaining to the Government of Peru, and our clients.

This bond will be valid for a period of 12 months from ..... ............... 201 .., until ..... .... ... 201 ..

inclusive.

Sincerely,

Signature ………………………..

Name ……………………….

Financial Entity




ANNEX 4-A

Operation Guarantee Format

(city), __ ________ 201….

Messrs.

MINISTERIO DE ENERGÍA Y MINAS

Av. de las Artes Sur Nº 260, San Borja

Perú.-

Ref.: Guarantee Letter Nº…………..

Maturity:......................

Integral Project Tender for the “500kV Nueva Yanango - Nueva Huánuco and Related Substations Link”

Sirs,

We hereby -at the request of our clients- Messrs. ...., (legal person name) (hereinafter referred to as "the

Concessionaire"), establish this joint and several guarantee, irrevocable, unconditional and automatic,

with no benefit of excussion or division, for up to the sum of three million Dollars of the United States of

America (US$ 3 000 000) in favor of the Ministry of Energy and Mines to ensure that …………….. (The

Concessionaire) complies correctly and on a timely basis each and every one of the obligations

corresponding to it pursuant to the Concession Agreement for the "500kV Nueva Yanango - Nueva

Huánuco and Related Substations Link" (hereinafter "The Agreement").

In order to honor the guarantee herein in its favor, it will suffice the Ministry of Energy and Mines to

submit a notarized request, which must be signed by the General Director of Administration, or person

duly authorized by this Entity, indicating that our clients ............. ... (name of the Concessionaire) have

not fulfilled the obligations guaranteed by this document.

Any delay on our part to honor the bond referred to above, will accrue interest equivalent to the maximum

LIBOR rate, plus a spread of 3% per annum. The LIBOR rate will be established by the daily Cable

Reuter that is received in Lima at 05:00 p.m. London time, from the date on which the notarized request

for payment was received. Interest shall accrue from the date on which it is required to be fulfilled and

until effective date of payment.

The bond herein will also guarantee the correct and timely fulfillment of Concessionaire obligations in

accordance with the provisions contained in Legislative Decree 1224 and its regulations, or the

regulations that amend or replace them.

Our obligations under this bond will not be affected by any dispute between the Ministry of Energy and

Mines, or any entity pertaining to the Government of Peru, and our clients.

This bond will be valid for a period of 12 months from ..... ............... 201 .., until ..... .... ... 201 ..

inclusive.

Sincerely,

Signature ………………………..

Name ……………………….

Financial Entity




ANNEX 5

Telecommunications

According to Annex 1 (Section 2.3.7.I) of the Agreement, the Project must have a main telecommunications system (optical fiber - OPGW). The following is agreed in reference to such fiber:

1. The optical fiber cable to be installed must comply with Project specifications, as set forth in Section 3.1.5 of Annex 1, including at least twenty-four (24) threads.

2. The State acquires the ownership of eighteen (18) dark fibers of the fiber optic cable installed by the Concessionaire, in accordance with Supreme Decree No. 034-2010-MTC and Ministerial Resolution No. 468-2011-MTC / 03, and that will be used by the National Dorsal Network of Optical Fiber, according to Law No. 29904 and its Regulation approved by Supreme Decree No. 014-2013-MTC, which gives it exclusive right to dispose of said fiber without limitations.

3. The Concessionaire will use the remaining optical fibers in the optical cable, for their own communication needs.

4. Transfer of eighteen (18) optical fibers in the optical cables owned by the State shall be carried out in accordance with the procedure determined by the Ministry of Transport and Communications, which shall be responsible for delivering them under concession. The Ministry of Transport and Communications is the State entity the Concessionaire will directly deal with regarding all aspects related to the telecommunications activity.

5. The Concessionaire shall install the optical fiber cable of the main telecommunications system, observing at least the following technical considerations:

a. The optical fiber cable must be new and must be guaranteed against any manufacturing defect. The conditions of the environment where the optical fiber cable will be installed and operated shall be also taken into account so that cable characteristics are adequate.

b. The optical fiber cable manufacturer must have ISO 9001-2008 and TL900 (Quality Management System) certification.

c. The type of optical fiber to be implemented shall be single-mode, and its geometric, optical, mechanical and transmission characteristics shall comply at least with ITU-T G.652.D or G.655 of the International Telecommunication Union (hereinafter ITU)

d. The optical fiber shall have a Polarization Mode Dispersion (PMDQ) less than or equal to zero integer with one tenth (0.1).

e. The attenuation of the entire installed fiber must be less than or equal to zero integer with thirty-five cents (0.35) dB per km at 1310 nm and at zero integer with twenty-five cents (0.25) dB per km at 1550 nm.

f. The type of optical fiber cable used shall have a life of at least twenty (20) years. To do this, the recommendations provided by the manufacturer will be considered, so as to ensure cable useful life.

g. For installation, splicing and testing of optical fibers, maintenance of optical fiber cable and identification of threads, the ITU-T recommendations of the International Telecommunication Union as well as the ANSI EIA standards / TIA and IEC as applicable.

6. Fiber cable maintenance shall be carried out by the Concessionaire, in accordance with the guidelines indicated in ITU-T Recommendation L.25: "Maintenance of optical fiber cable networks", in order to keep it in good condition, until the fibers owned by the State are effectively used for the provision of telecommunications services, hence maintenance to the optical fiber cable is shared with the telecommunications concessionaires designated by the State.




7. The Concessionaire will provide facilities for accommodating necessary optical equipment to light the state-owned optical fiber, including the sharing of spaces.

It will also allow access to fiber cables owned by the State and for installation of accessories and/or devices that allow supply of public telecommunications services, both for starting up telecommunications services and for operation and maintenance thereof.

In that sense, the Concessionaire must leave an optical fiber distributor (OFD) in the telecommunications room that will be built in each substation, ready for access to the 18 state-owned wires. Also, it must at least supply electric power with 220 Vac and not less than three (3) kilowatts; enough space to install and operate four (4) telecommunications racks, air conditioning and power equipment, and also enough space to install a telecommunications antenna, additionally taking into account the minimum safety distances.

For all of the above, the State or the third parties it designates will not need to make any consideration in favor of the Concessionaire . If there are additional technical requirements for the use of optical fiber threads owned by the State, the Concessionaire must agree on the economic and technical terms with the State or third parties designated by the State within a period of 10 days. This period may be extended by the State, up to an additional 45 days, for reasons duly justified and communicated to the Concessionaire. If there is any controversy, it will be resolved in accordance with Clause 14 of this agreement.

8. The State shall ensure that the telecommunication activities carried out do not limit or jeopardize continuity and security of electric transmission service, providing for the mechanisms that may be necessary in the concession state-owned optical fiber. In any event, if there is an effect on electric transmission services due an action or omission in the operation of State-owned optical fiber, outside the Concessionaire, the latter will be exempt from administrative, civil and / or criminal liability; the telecommunications concessionaire in charge of optical fiber operation will assume the responsibilities corresponding to it.

9. The Concessionaire may supervise -directly or through third parties- the works and/or activities carried out to light up the optical fiber owned by the State and to facilitate fiber exploitation in the provision of public telecommunications services. In case the electrical infrastructure and/or electric service supply are put at risk, the Concessionaire may order suspension of said activities for duly substantiated reasons, which must be informed in writing to the Ministry of Transport and Communications and to the Ministry of Energy and Mines, within a period no longer than 48 hours after the suspension. Activities must be resumed within a maximum period of 10 days, unless otherwise agreed between the parties. In case of failure to reach an agreement, the dispute shall be settled in accordance with Clause 14 of this agreement.

10. The Concessionaire shall submit georeferenced information on the laying of optical fiber to the Grantor, on a semi-annual basis The Concessionaire should also report on optical fiber current and projected use and -if applicable- on telecommunications companies and on tranches for which they have concluded agreements for the use of their infrastructure.

11. Optical fiber threads that are not owned by the State, as well as complementary or related equipment and services, are part of the Concession Assets.

12. The provisions in this Annex shall not affect the Tariff Base. In case the concession facilities are used to develop telecommunications businesses, electricity service users will be compensated as established by the sectoral authority. In this case, the commercial exploitation of the concessionaire's optical fiber threads shall be carried out by a telecommunications concessionaire, which shall offer its services to all telecommunications concessionaires who request it on non-discriminatory terms and shall be subject to the other laws and regulations on telecommunications.




ANNEX 6

Forms 4, 4-C y 4-D

(Certified Copies)




ANNEX 7

Project Development Deadlines

The following milestones must be attained on the following deadlines (all counted as from the Closing

Date):

Milestones Deadline

1.- Environmental Impact Assessment approved by the Competent

Governmental Authority Twenty four (24) months

2.- Project Financial Closing Twenty-eight (28) months

3.- Arrival of reactors and transformers referred to in Chapter 3, Annex

1 of the Agreement to the corresponding work sites Forty (40) months

4.- POC Forty six (46) months

Any deadline extension due to provisions in Clause 4.3 or Clause 10.4 will modify the deadline for the

aforementioned milestones.

The Commercial Commissioning date will be included in the Minutes referred to it in Clause 5.4.




ANNEX 8

Project Narrative on the “500kV Nueva Yanango - Nueva Huánuco and Related

Substations Link”

A. Transmission line.

1. General Project description

2. Line route description

Include start and end points with altitude in m.a.s.l., as well as geographic and planimetric plans

at appropriate scale. It should describe the line's route, highlighting the line vertices, crossings

with other lines and its passing through populated and archeological areas.

3. Design and construction standards used

3.1 Overhead line:

The National Electricity Code will be used mainly. If necessary, it will be complemented by

international standards such as ANSI / IEEE, IEC, VDE, NEMA, ASTM, NESC, NFPA.

4. Technical characteristics

a) Line length (km).

b) Insulation level at 60 Hz and BIL corrected for height.

c) Transmission capacity. Compliance with transmission capacities specified in Annex 1 of the

Agreement shall be substantiated.

d) Expected failure rate of service interruption in the entire Line, in number of interruptions/100

km-year, as required in Annex 1.

e) Number of conductors per phase.

f) Conductor type, material and section. It is necessary to verify that the Joule loss limits and the

surface gradient levels and non-ionizing radiation limits specified in Annex 1 of the Agreement

are met.

g) Type, material and characteristics of insulators. Include number of units per suspension chain

and angle.

h) Types of structures. Include typical diagrams of structures (suspension, angle and terminal).

i) Foundations. Include type (concrete or metallic).

j) Number and characteristics of guard wires.

k) Type, material and section of guard wires.

l) Earthing. Include system to be used (electrodes, counterweights or other), as well as sizes and

section of the elements to be used.

m) Other characteristics or relevant information.

n) Right-of-passage used.

o) Access and infrastructure.




B. B. Substations

1. General Project description

2. Substation location

Include geographic plane and altitude in m.a.s.l. of each one of the substations. Selected terrain and any

nearby accidents should be described.

3. Design and construction standards used

The National Electricity Code will be used mainly. If necessary, it will be complemented by international

standards such as ANSI / IEEE, IEC, VDE, NEMA, ASTM, NESC, NFPA.

4. Technical substation characteristics

a) General switchyard description, indicating plant layout. Include single-line diagram, plant view and

elevations.

b) Bar layout. Include criteria used for selection. If the reference layout is modified, modification shall be

substantiated and it is necessary to verify that it has a better performance than the referential

scheme.

c) Insulation level at 60 Hz and BIL corrected for height.

d) Description of the type of equipment proposed in each substation:

Conventional

Encapsulation (GIS)

The number of cells in 220 and 500 kV, according to types:

line

transformer

coupling reactive compensation

E) Switch characteristics:

type: dead tank or live tank, in SF6 or other, drive, remote control: local and / or remote, etc.

Rated and short-circuit current, breaking capacity (MVA).

f) Characteristics of line and bus disconnectors:

drive, control: local and/or remote, etc. rated and short-circuit current.

g) Characteristics of the measurement transformers.

h) Lightning rod characteristics

i) Power transformer characteristics




transformation relationship

power (MVA) with natural (ONAN) and forced (ONAF) ventilation

taps and tap changer system.

j) Reactive compensation system characteristics:

reactor power, SVC. The capacitor bank. drive modality: continuous or by steps (discrete).

k) Description of protection, measurement, control and maneuver systems. Demonstrate compliance with

COES requirements.

l) Description of tele-control systems, remote control, data acquisition and their link with the COES

system.

m) Description of the communications system.

n) Earthing. Include system to be used (electrodes, deep earth mesh or other), as well as sizes and

section of the elements to be used.

C. Pre-operative study of the electricity system

The study aims at verifying that the final facility scheme will allow adequate SEIN operation, in

accordance with requirements established by the COES.

The pre-operative study will cover not less than 10 years and includes the study, among others, of

the following aspects:

Steady-state operation studies, for various load and generation conditions. Compliance with

permitted voltage variation ranges, load across lines and transformers, operation of reactive

compensation devices, operation of automatic voltage regulation systems, and effect on

other network elements shall be verified.

Studies of contingencies in steady state. Appropriate system operational response shall be

demonstrated in case of simple contingencies occurring in the transmission system (N-1)

during the emergency period and until the COES Control Center adopts corrective

measures.

Studies of post-disturbance transient response and verification of proper response by fast-

acting control, regulation, protection and re-closer devices.

Studies of overvoltage and insulation coordination.

Study of voltages and harmonic currents, their effect on SEIN and filter requirements.

Design protection systems and protection coordination with other SEIN facilities, in

accordance with COES standards.

Calculation of power and short-circuit currents and verification of the capacity of existing and

planned facilities to withstand the new short-circuit levels. Modifications and reinforcements

in existing substations that will be expanded as part of the Project will be identified and

incorporated into the Project. Likewise, modifications and reinforcements of facilities

influenced by the Project but not part of it will be identified and proposed.

Preoperative study detail and scope should be coordinated with the COES. COES procedure PR-20

or its substitute will be applied.




ANNEX 9

Prior Consultation

The purpose of this annex is to regulate the conduct of Prior Consultation, in accordance with

Law No. 29785 and its Regulations approved by D.S. 001-2012-MC, as well as its amendments,

extensions or replacements.

I. Definitions.

For the purposes of the Agreement and of this particular annex, please refer to:

a) Agreements: these are the concurrences resulting from Prior Consultation held by the Grantor,

whose purpose or direct effect is to regulate Compensations or the Infrastructure location.

b) Excluded Areas: these are geographic spaces that cannot be used to install or build

Infrastructure, pursuant to Annex 1.

Natural Protected Areas, Regional Conservation Areas and Private Conservation Areas, as well

as their respective buffer zones, if any, will be considered as Excluded Areas, even if they are not

listed in said Annex.

c) Compensations: these are prices, remunerations, compensations, indemnifications and -in

general- the considerations and payments that the Concessionaire pays indigenous or native

peoples or their members, -under any designation, periodicity or characteristic- resulting from the

implementation of the Agreements or Restrictions, as well as the costs thereof.

d) Prior Consultation: this is the process of consulting indigenous or aboriginal peoples that

the Grantor must carry out in accordance with Law No. 29785 and its regulations.

e) Difference due to Location: Is the increase in the direct amount of the investment made in

the Infrastructure because of the Variants for the same reason.

f) Infrastructure: this is any temporary or permanent infrastructure that must be built to

provide the Service under the terms of this Agreement. It includes access roads or

access paths necessary for the construction process or for operation and maintenance

following Commercial Commissioning.

g) Administrative Measure: This is the resolution that approves the Final Project

Concession, as stipulated in Ministerial Resolution No. 209-2015-MEM / DM.

Notwithstanding, the parties acknowledge that the opportunity conduct Prior Consultation

will be when Citizen Participation is implemented within the framework of the

Environmental Impact Study approval process.

h) Report on Indigenous Settlement: the document prepared by the Concessionaire that the

Concessionaire will submit to the Grantor and the DGAAE together with its Citizen

Participation Plan, containing the following information:

Plans for the location of lands or territories owned or occupied by indigenous or

aboriginal peoples with or without title, which would be in whole or in part, used or

affected by the Infrastructure or its operation or maintenance.

The name of said towns and the identity and way of locating the individuals who would be

their representatives, whether or not they have formally established powers. The

estimated population per each village, the local language and the access routes will also

be indicated. All indigenous or aboriginal peoples who qualify as such under the terms of

Law No. 29785, its regulations and other applicable rules, whether or not included in the

Indigenous Peoples Database published by the Ministry of Culture, shall be considered.




The manner or the extent in which, in the Concessionaire's opinion, the construction or existence of the Infrastructure would have the potential to directly affect collective rights of peasant and native communities, if applicable; Or, on the contrary, the reasons and due substantiation for which the Concessionaire considers that there is no collective right that might be affected, or that, the Project will not directly affect it.

The Report on Indigenous Settlement will not be subject to observations by the Grantor, given its referential nature.

i) Citizen Participation: this is the process of citizen participation referred to in Ministerial Resolution No. 535-2004-MEM-DM and Ministerial Resolution No. 223-2010-MEM-DM, or the norms that in future take their place.

j) Emplacement: this is the location of all Infrastructure components initially proposed by the Concessionaire. Detailed plans describing the emplacement are submitted by the Concessionaire to the Grantor and the DGAAE, together with its Citizen Participation Plan. It includes a schedule that indicates the critical roadmap.

k) Restrictions: these are the measures that - according to the Grantor- might be necessary to guarantee the collective rights of indigenous or aboriginal peoples. These measures may be decided because the Grantor was unable to conclude Agreements or those concluded are insufficient or incomplete according to the Grantor. The Restrictions will be notified together with the approval of the administrative measure connected to the Prior Consultation.

l) Variant: this is the variation in the Infrastructure location that was proposed in the emplacement as a consequence of the Agreements and Restrictions.

II. Rules

The following rules shall apply:

1) Prior Consultation Time

If the Grantor considers that Prior Consultation is legally necessary, said consultation will take place together with Citizen Participation. The Grantor is obliged to organize and carry out Prior Consultation, so that it concludes pursuant to Article 23 of Supreme Decree No. 001-2012-MC. The term referred to in Article 24 of said decree shall be computed as from the conclusion of the last information workshop included in Citizen Participation.

The Grantor declares that for Concession development purposes, prior consultation will not be required for any other act or measure other than the Administrative Measure.

2) Function of the Report on Indigenous Settlement

The Report on Indigenous Settlement will be considered by both parties as a reference, so that the lack of accuracy or completeness of said report will not cause any damage to the Concessionaire nor relieve the Grantor of its obligation to evaluate if it is appropriate to carry out a Prior Consultation and, if applicable, to carry out such consultation in the terms established by the Applicable Laws.

Notwithstanding its referential character, the Concessionaire must make its best efforts to obtain and submit the Report on Indigenous Settlement with sufficient and useful information, which allows the Grantor to decide if Prior Consultation should be carried out or not, and regarding who and how to implement it in an orderly, simple and efficient manner.

3) Effects of the Agreements on the Concession Agreement

Once Prior Consultation finishes, the Grantor will grant the Final Transmission Concession in accordance with stipulations in Article 25 of the Law on Concessions.




Approval of the Administrative Measure, and signing of the Agreements and Restrictions, include

the following:

a. The Investment Cost referred to in Section b) of Clause 8.1 will be increased in a single

opportunity in the present value of the Compensations and the Difference due to Location,

calculated as from the POC date and using the indicated updating established in Subsection

of Clause 8.1. Said increase shall be determined based on the efficiency and effectiveness

principles, by agreement between the Parties, through a Minutes signed by their legal

representatives, within a maximum period of thirty (30) Days, counted as from the submission

of the corresponding substantiation and of a draft Minutes by the Concessionaire to the

Grantor and to OSINERGMIN. A favorable prior opinion by OSINERGMIN will be required for

the Minutes to be signed by the Grantor, who will have a fifteen (15) Days term for said effect.

For once only, OSINERGMIN may ask the Concessionaire for the additional information it

requires for its analysis, within 4 Days after receiving the Concessionaire's request. The term

to issue, the opinion by OSINERGMIN will be suspended until the Concessionaire submits the

requested complementary information.

At expiration of the 30-day period set forth in the previous paragraph, if the increase has not

been approved, with or without favorable opinion by OSINERGMIN, either Party may come

under stipulations in Clause 14.6 a).

b. The Concessionaire is obliged to continue with the Project and execute it in accordance with

the Concession Agreement terms, the Agreements and the Restrictions. Existence of

Variants, Compensations or Differences due to Location, or disputes over any of them, does

not allow or suppose suspension of obligations or benefits, reciprocal or not, that

corresponds to each Party under this Agreement.

C. The Grantor is obliged to comply with and enforce the Agreements, and shall take such

regulatory, administrative or executive measures as may be necessary or convenient. These

measures include, at Concessionaire request, the forced imposition of easements and the

necessary assistance to exercise and use the easements imposed.

4) Other Prior Consultation topics

4.1 Once the Administrative Measure has been approved, the Concessionaire retains the right to

introduce unilateral variants with respect to the Plan, for any reason and without any

addendum or subsequent consent, insofar as they do not entail a breach of the provisions of

the Agreements or Restrictions.

However, these unilateral variants will not lead to increases in Investment Cost. The

Concessionaire is responsible for assessing whether such unilateral variants require

additional approval from the environmental authorities, in accordance with the Applicable

Laws and Provisions.

4.2 Any dispute related to Prior Consultation, including but not limited to the following, shall be

treated as a Technical Dispute:

i. The existence, scope or magnitude of Variants, Compensations, Restrictions or Differences due

to Location.

ii. The manner or time in which Compensations or Differences due to Location must be added to

the remunerations the Concessionaire is entitled to or how to collect them and transfer them

to Infrastructure users.

iii. Consequences of partial, late or defective compliance with or breach of the Concession

Agreement, the Prior Consultation or the Agreements or Restrictions by the Indigenous or

Native Peoples or by the Parties.

4.3 If the implementation of variants modifies the Emplacement's critical roadmap of the proposal,

the POC term will increase in the same delay period.




ANNEX 10

Referential Outline of the Project “500kV Nueva Yanango - Nueva Huánuco and Related

Substations Link” inquired before the National Service of Natural Areas Protected by the

State- SERNANP



















ANNEX 11

Terms of Reference

Engineering, Supply and Construction Supervision of the Project “500 kV Nueva

Yanango - Nueva Huánuco Link and Related Substations”

1. OBJECTIVE

To hire the services of an Engineering Consulting Company -with knowledge and specialization in

Supervising Engineering, Supply and Construction of High Voltage Transmission Lines- to carry out

the engineering and work supervision of the SGT Concession Agreement " 500 kV Nueva Yanango -

Nueva Huánuco 500 Link and Related Substations "(hereinafter referred to as The Agreement), at

Concessionaire request.

2. SUPERVISING COMPANY

The Concessionaire undertakes to hire and pay for the expenses that the supervision of the work

demands. To do so, it will propose a company specialized in the supervision of high-voltage

transmission systems, which should not have had any type of relationship with the Concessionaire in

the last five (5) years, and whose selection must have the agreement of OSINERGMIN.

The cost of such supervision is part of the Concessionaire's investment proposal. The supervising

company work starts from the beginning of the transmission system engineering project

(transmission line and high voltage substation).

3. SUPERVISION SCOPE

The Supervising Company will report on a monthly basis and in writing to the Grantor and OSINERGMIN

on the development of the Works.

On the other hand, the Concessionaire will provide a construction logbook, in triple copy and properly

paged and authenticated by a Notary Public, which will be opened one day before the beginning of the

execution of works and in which authorized persons will note important incidents along the course of

works execution, permanently keeping it at the Works and under Concessionaire custody. The duly

accredited representatives of the Supervising Company and the Concessionaire will subscribe all

annotations made. OSINERGMIN may have access to the logbook when required.

Supervision will be provided in the execution of the " 500 kV Nueva Yanango - Nueva Huánuco and

Related Substations Link" Project, which includes:

a) Expansion of the 500/220 kV Colcabamba

Expansion GIS bar system in double bar layout with switch and one-half.

Two (02) GIS cells for the connection of the line to the Nueva Yanango S.S., which are equivalent to 2/3 of the switch and one-half layout diameter.

One (01) cell for connecting a 500kV line reactor at the exit towards the Nueva Yanango

S.S.

One (01) three-phase 500 kV - 90 MVAr in 500 kV line reactor, consisting of 3 single-

phase units of 30 MVAr each, plus one reserve unit. Including power transformers in the

bushings and a neutral reactor. (*) Complementary systems: systems of protection, control, measurement, communications,

grounding, auxiliary services, gantries and bars, civil works, etc.

b) Nueva Yanango 500/220 kV Substation

500 kV Side

The bar system and 500 kV yard equipment will have a double bar connection layout with switch and one

half, comprising the following facilities:




Three (03) cells for connecting the 500 kV of 100 MVAr bar reactor and the line

towards the S.S Colcabamba, equivalent to the diameter of the connection

configuration.

Three (03) cells for connecting the self-transformers 500/220 (*) 750/750/-- (*) MVA

(ONF) and the line towards Carapongo SS equivalent to one diameter of half

switch layout.

Two (02) cell for the connection of the reactor of line 500kV, of 100 and 90 MVAr

towards Colcabamba and Carapongo S.S.

For the bus-bars: a set of three (03) lightning rods and three (03) voltage

transformers, which will be connected to the "A" and "B" bus-bars of the substation

One (01) 500 kV three-phase bus-bar reactor 500 kV of 100 MVAr consisting of 3

single-phase units of 33 MVAr each, plus one spare unit (**).

One (01) three-phase reactor of 500 kV-90 MVAr towards Colcabamba S.S.

consisting of 3 single-phase units of 30 MVAr each, plus one spare unit.

One (01) three-phase 500 kV-100 MVAr line reactor to the Carapongo S.S,

consisting of 3 single-phase units of 33 MVAr each, plus one spare unit.

One (01) bank of 500 kV series capacitors for the Colcabamba-Nueva Yanango

line, considering the line reactance compensation between 50 and 65%.

One (01) 500 kV series capacitor bank for the Nueva Yanango - Carapongo line,

considering the line reactance compensation between 50 and 65%.

One (01) 500/220 / (*) kV - 750/750 / (*) MVA autotransformer bank (ONAF),

consisting of 3 single phase units of 250 MVA (ONAF) each with star/star/ delta (Y

/ y / d) connection group, plus a reserve unit. This includes lightning rods on each

side.

Complementary systems: systems of protection, control, measurement,

communications, grounding, ancillary services, gantries and bars, civil works, etc.

220 kV side

The bar system and yard equipment at 220 kV, will have a double bar connection with transfer

switch layout, comprising the following facilities:

One (01) cell for connection of 220kV side to the self-transformers bank

One (01) 220 kV cell line for the connection with the existing Yanango S.S

One (01) coupling cell.


communications, grounding, auxiliary services, civil works, etc.

c) Extension of 500/220 kV Carapongo S.S

Extension of the bar system in double circuit configuration with switch and a half

Two (02) cells in 500 kV for the line connection towards Nueva Yanango S.S.

equivalent to 2/3 of the switch and a half configuration.

One (01) cell in 500 kV for the connection of the line reactor to the Nueva Yanango

S.S.


communications, grounding, auxiliary services, civil works, etc.




d) Expansion of existing 220 kV Yanango S.S.

Expansion of simple bar system

One (01) cell for link to Nueva Yanango S.S.


communications, grounding, ancillary services, gantries and bars, civil works, etc.

e) 500 kV Colcabamaba (Nueva Mantaro - Nueva Yanango) Transmission Line

Approximate length: Approx 179 km


Nominal operation voltage 500 kV


Phase arrangement: triangular and horizontal type


Type of Conductor: ACSR, AAAC or ACAR


Guard wire: One of the OPGW type, 24 fibers, 108

mm2 section and another of the EHS galvanized steel wire type, 70 mm2

nominal section.

Altitude: Minimum 1061 m.a.s.l.; Maximum 4486

m.a.s.l.

f) 500 kV Nueva Yanango – Carapongo transmission line

Length: 211 km


Voltage 500 kV


Phase arrangement: triangular and horizontal type


Type of Conductor: ACSR, AAAC or ACAR


Guard wire: One of the OPGW type, 24 fibers, 108

mm2 section and another of the EHS galvanized steel cable type, 70 mm2

nominal section

Altitude: Minimum 782 m.a.s.l. Maximum 5022

m.a.s.l.

g) Link 220 kV Nueva Yanango – existing Yanango



Nominal operating voltage: 220 kV









Guard wire: One of the OPGW type, 24 fibers, 108-

mm2 section and another of the EHS galvanized steel wire type, 70 mm2 nominal

section.

Altitude: Minimum 1124 m.a.s.l.; Maximum 1788

m.a.s.l.

The Concessionaire shall be responsible for including other elements or components not described

in this Annex that are required for the proper functioning and operation of the project, as well as for

modifying or adapting what is necessary, and establish its definitive characteristics, in order to

guarantee correct operation of all its facilities and service supply in compliance with the standards

applied in the National Interconnected Electrical System (SEIN).

In the event that the scope, specifications or characteristics of the Project, contained in Annex 1

differ from those specified in the preliminary engineering projects, the provisions of Annex 1 shall

prevail. In this sense, the preliminary engineering plan must be considered as a document with

referential information.

The Concessionaire shall comply with the Project's Commercial Commissioning (POC) within the

term established in the Agreement, counted as of the Closing Date.

Likewise, Clause 4.9 in the Agreement establishes that OSINERGMIN may follow up the Project’s

Works execution and constructive quality technical inspection with its own personnel or through

specialized companies and on its own account and risk.

4. SUPERVISING COMPANY SCOPE OF WORK

The Supervising Company will be responsible for supervising the Project, within the framework of the

Concession Agreement and applicable rules, during the Project design, construction, testing and

commissioning stages.

The purpose of Supervision work is to ensure that the Project complies with the following:

a. That Definitive Engineering and Engineering at work level correspond to the scope specified in

Annex of the Agreement.

b. That Equipment and Materials Supply corresponds to the scope specified in Annex 1 of the

Agreement, verifying that the specifications, minimum requirements and standards established in the

Agreement, as well as good engineering practice are met.

c. That Project construction and testing correspond to the scope established in Annex 1 and Annex 2

of the Agreement, respectively.

d. That the construction of facilities is carried out according to timelines and schedules in the

Agreement.

e. Preparation of a Project construction conformity report.

Without limitation, the list of activities to be developed by the Supervising Company is as follows:

4.1 Supervision of Engineering Studies

Review and evaluate the studies prepared by the Concessionaire, which must be in accordance with

the Agreement scope. Such studies, among others, are the following:

Engineering at definitive level

Engineering according to construction

4.2 Supervision of Supplies

Verification of factory test protocols (FAT).

Verification of internal test protocols (SAT).

Supervision of the quality of supplies and equipment technical characteristics, taking into

account, among others, the provisions of Clause 4.2 and Annex 1 in the Agreement.

4.3 Supervision of Project Construction




Conduct supervision of activities related to the construction of the Project. By way of indication and

without limitation, the following shall be supervised:

Compliance with the Schedules of Activities for the Execution of the Works and with Appraised

Schedules.

Project quality of materials, electrical system equipment and constructive quality.

Correct construction of civil works (mainly of the foundations) an quality of its supplies and

materials.

Project assembly correct execution.

Compliance with assembly technical specifications pursuant to stipulations in Annex 1 of the

Agreement.

Proper transport, handling and storage of supplies and equipment.

Verify that the contractor’s organization is in line with the Project scope, which ensures

compliance with construction procedures and personnel safety.

Approve designation of companies subcontracted for Project construction.

Evaluate the subcontractors’ experience and technical qualifications, both the company and the

staff.

Compliance with the Quality Assurance Program referred to in Clause 5.11 of the Agreement.

Compliance with environmental protection and safety standards in the works by reviewing and

authorizing the safety and environmental protection procedures.

The Supervising Company work should not interfere with the attributions and responsibilities of the

Agreement Inspector.

4.1 Supervision of Tests

Participate in the internal operation tests.

Participate in the Project verification tests established in Annex 2 of the Agreement.

5. SUPERVISING COMPANY PERSONNEL QUALIFICATIONS

The professionals required for Supervision work and their respective profile include the following,

without limitation:

Project Supervision Head: Electromechanical Engineer or Electrical Engineer, with a

minimum experience of 05 years in supervising 220 or 500 kV lines and substations.

Transmission Line Supervision Head: Electromechanical Engineer or Electrical

Engineer, with a minimum experience of 05 years supervising 220 or 500 kV lines.

Substation Supervision Head: Electromechanical Engineer or Electrical Engineer, with

a minimum experience of 05 years supervising 220 or 500 kV substations.

Civil Works Supervision Head: Civil engineer, with a minimum experience of 10 years

in supervising civil works in high voltage lines and substations.

Specialist in Electrical Protection: Electromechanical Engineer or Electrical Engineer,

with a minimum experience of 05 years in systems of protection for 220 or 500 kV

substations.

Telecommunications Specialist: Electromechanical Engineer or Electrical Engineer

with a minimum experience of 5 years in telecommunication systems of high-voltage

power lines.

Geotechnics Supervisor: Geologist Engineer, with a minimum experience of 10 years in

supervising work on high-voltage lines and substations.

Security Head: Electromechanical Engineer or Electrical Engineer or related

professional with a minimum experience of 10 years in supervising safety during the

construction of electric high-voltage lines and substations.

Civil, electromechanical and telecommunication technicians with minimum

experience in similar works in works of electrical high-voltage lines, substations and

telecommunications.




6. REPORTS

The Supervising Company will submit the following types of reports to the Concessionaire and

OSINERGMIN during the service execution:

Monthly reports: The Supervising Company will prepare a Project status report at the end

of each month and during Project execution.

Report of observations: Whenever the Supervising Company detects an observation, it

will raise the respective report, describing the corresponding details.

Specific reports: These are the reports OSINERGMIN requires during work execution

about specific aspects or technical problems, security situations, environmental aspects,

incidents and accidents or other aspects related to Project execution.

Report on compliance with Annex 1 of the Agreement.

Review report on Engineering at a Final Level.

Final report: Once the works are completed and all tests and commissioning accepted,

the Supervising Company will prepare the final report on its activities. In this report, the

Supervising Company will express its approval of and conformity with the facilities.

A copy of the last three above-listed reports will be submitted to the Grantor.

7. SERVICE SUPPLY SCHEDULE

The final deadline for service supply is that specified in the agreement, counted from the day

following the subscription date concerning the consulting service.

The consulting service will start on the first business day of the month following the subscription

of the consulting service agreement.

If a time extension is necessary, the Parties shall agree on it.

8. INFORMATION AND SUPERVISION FACILITIES

The Concessionaire shall make available any documentation required by the Supervising

Company.

These Terms of Reference generally consider the obligations that must be fulfilled by the

Concessionaire and that are established in the Concession Agreement of SGT “500kV Nueva

Yanango- Nueva Huánuco and Related Substations Link" that includes Annex 1 "Project

Technical Specifications" and Annex 2 "Project Verification Procedure".