Message-ID: <15888669.1075858706813.JavaMail.evans@thyme>
Date: Tue, 31 Jul 2001 11:35:39 -0700 (PDT)
From: alfredo.huertas@enron.com
To: paul.dawson@enron.com, doug.wood@enron.com, peter.styles@enron.com, 
	paul.hennemeyer@enron.com
Subject: Removal of the Debt/Equity Ratio imposed on Arcos Project!!!
Cc: richard.shapiro@enron.com, d..steffes@enron.com, mariano.gentilini@enron.com, 
	ignacio.soneira@enron.com
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This is an important regulatory achievement, provided the fierce and vehement opposition 6 months ago by the Director General herself to any change in the Authorisation. 

Note also that some recent Authorisations (24 July 2001) granted to competitors like Fenosa's Nueva Generadora del Sur 730MW at San Roque still contain that condition!!! (see below attached Fenosa's Authorisation).

Please, find attached the much-sought amendment of the Administrative Authorisation where Director General for Energy removes the conditions of a 20% of equity + sub debt and 10% of equity previously imposed on the Arcos project in order to guarantee the financial and economic viability of the project. 

This removal is based on the attached comfort letter submitted by Enron Capital & Trade Resources to the General Director dated on 28 May 2001, where ECT explained an alternative combination of equity and sub-debt (more suitable with project finance, and already identified by some candidate financial institutions) and Enron's commitment to the project, evidenced since an Enron affiliate has been awarded the EPC Contract, which contemplates substantial liquidated damages  payable to Enron Espa?a Generaci?n, S.L., in case of shortfall of performance, delays, etc? in the construction.