‘FROM DEPARTMENT OF STATE 4A (FRID 2.18°00 9:31/ST. 9:30.NO, 3760637596 F 8

CONFIDENTIAL

GON VIGOROUSLY DEFENDED THE MOPALITY_AND ECONOMIC
UTILITY OF SUBSIDIES THAT QUOTE HELP PEOPLE UNQUOTE.
THEREFORE. OBASANJO'S NIMCUUCEMENT Ti! HIS DECEMBER
BUDGET SPEECH THAT HE WAS DEREGULATING DOWNSTREAM
PETROLEUX PRICES WITH QUOTE IMMEDIATE EFFECT mQquoTs
WAS, IN THE EYES OF MANY OBSERVERS. HIS BIGGEST ECON
SURPRISE SINCE TAKING OFFICE. LABOR-AND NATIONAL
ASSEMBLY MEMBERS RAILED AGAINST ANY PRICE INCREASE,
BUT SOME SORT OF PRICE HIKE SEEMS INEVITABLE, PERHAPS AS
PART OF A CEAL WITH LABOR ON RAISING THE MINIMUM WAGE.
SURPRISE AT OBASANJO'S MOVING TO BOOST PRICES STEMMED
IN PART FROM THE ABSENCE OF IMF PRESSURE TO ENO THE
SUBSIDY. ONE MOTIVATION MAY HAVE BEEN TO ENHANCE THE
PRIVATIZATION PROSPECTS OF THE DOWNSTREAM FIRMS WHICH
WE NOW HAVE REASOM TO BELIEVE OBASANJO WAS THEN
COMMITTING TO PURSTE

13. (C) PERMAPS EVEN MORE STARTLING WAS THE FEBRUARY

22 PRESS REPORT THAT GON SPOKESMAN SARUMI MAD CONFIRMED
WHAT OFFICIALS HAD BEEY PRIVATELY PROMISING FOR MONTHS:
THE FY2000 BUDGRT WOULD CONTAIN NO MONEY FOR FERTILIZER
SUBSIDIES. ONE OF THE ARGUMENTS USED TO SCUTTLE THE
EWRGN CONTRACT (AT LEAST ITS ORIGINAL VERSION) WAS THAT
IT WOULD COST THE GON TOO MUCH IN PRICE SUBSIDIES.
COMBINED WITH THE LONG-OVERDUE ABOLITION IN JANUAFY

OF THREE INEFFECTIVE, STATIST AGRICULTURAL PARASTATALS,
OBASANJO MAY BZ TAKING A MORE MARKET-ORIENTED APPROACH
TO WHAT HE HAS CORRECTLY IDENTIFIED AS NIGERIA'S MOST
IMPORTANT SOCIO-ECCNOHIC SECTOR.

OLD HABITS IM THE NEW NIGERIA

((b)(1)]

CONFI SENTAL

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[(b)(4)] [(b)(1)]
S555

THE FOLLOW-UP

COMFEOENT IAL SECTION 62 OF 63 MAPUTO 083379 $. ©) THE MEETINGS MAY HAVE DONE THE TRICK IN
POSTPON| NG AN OPEN CONFRONTATION (b)(1)] BUT

PRETORIA FOR BRUDVIG IT B10 MOT STOP A NUMBER OF PEOPLE IASI E

JOHANNESBURG FOR FSC MC ARNOLD GOVERNMENT (INCLUDING VICE-FOREIGH MINISTER PATRICIO

USDOC FOR ADVOCACY CENTER/38148 - RHAMPTON AND CENTRAL BANK GOVERNOR MALEANE) FROM ASKING US WHEN

USDOE FOR ANDREA LOCKWOOD AND CHRISTINE FLETCHER EWROK/IDC WOULD COME UP WITH A BUYER. AND AN

DEPT PLSE PASS TO USTOA - JRICHTER AND MNEWELL INTERVIEW KACHAMILA GAVE AUGUST 4 TO THE NEW DAILY

DEPT PLSE PASS TO EXIMBANK -- AEMHET FAXSHEET “neTICAL* [(b)(1)]

TREASURY FOR MRAUCH THE POT, RE COMPLAINED THAT “EWROM WAS NOT ABLE TO

DEPT FOR AF/EPS» EB/TPP/STA, EB/IFB) AF/S GET HOLD OF THE SOUTH AFRICAN MARKET.” AND ARGUED THAT
SASOL WOULD HAVE TO BE PART OF THE CUSTOMER MIX EVEN

£.0, 12988: 8/5/87 THOUGH THE TWO COMPANIES DIO NOT GET ALONG, HE

TAGS: ECOM> EPET» ENRG ETROr MZy SF REVIEWED PAST SOUR HISTORIES INVOLVING THE EARLY

SUBJECT: ENRON AND DEADLINES STAGES OF TRE NEGOTIATIONS: WHILE ADMITTING THINGS
VERE BETTER NOW. SIGNIFICANTLY, KACHAMILA

. (YIN vc cnorys

[(b)(4)] 1D THE me INMENT WAS “OPEN” TO ANOTHER
EXTENSION OF “SIX TO EIGHT MONTHS, BUT NO AGREEMENT
WAS BEEN REACHED."
9. 0) “METICAL" THEM RAN A FOLLOW-ON ARTICLE ON ONE
OF KACHAMILA’S GO-BETWEENS SHUKRI SALEH FROM OUBAL
PUTATIVE OWNER OF ZARARA PETROLEUM RECENTLY
TRANSFORMED INTO LEOPAROUS). KACHAMILA RESPONDED TO
IMPLICIT ACCUSATIONS OF TOO CLOSE A PERSONAL
RELATIONSHIP WITH SHUKRI BY STATING THAT REPUTABLE
COMPANIES LIKE ARCO “WOULD NOT BECOME INVOLVED WITH A
SHALL OPERATOR THAT 1S OMLY AFTER COMMISSIONS." RE
WOTED THAT IT WAS SALEH WHO HAD INTRODUCED ARCO TO
‘YEMEN, KACHAMILA ALSO SAID THAT THE TEMANE GAS
DEVELOPMENT, AMD IRON CARBIDE PLANT IN BEIRA PROPOSAL
WADE BY JCI/ARCOs ARE IN THE STAGES OF DEVELOPMENT.
[(b)(1)]

7, tC) IN AIS CAMPAIGN TO SECURE THE FUTURE OF

ENRON'S PARTICIPATION IN THE PROJECT» WAY IN THE

COMPANY OF CONSULTANT BELL FRIEDMAN, MET WITH CHISSANG

JULY 18) AND THEN RETURNED WITH SENIOR IDC OFFICIALS

TO MAKE THE PRESENTATIONS TO KACKAMILA AND SALOHAO

JULY 24-28. {(b)(1)]

CONFIDENTIAL

00500000000817


10-5 Akasaka 1-chome
Minato-ku Tokyo 107-8420
(tel) 3224-5029; (fax) 3224-5019

00500000000020


transportation (land, sea, and air), energy, health, labor,
agriculture and fisheries have all been subject to major
changes in legislation and/or liberalization the past two
years. While more needs to be done, almost every ministry and
certainly the few remaining parastatals have had to rethink
their roles and missions. The ministries of Education, and
Agriculture and Fisheries have lagged, but are now undertaking
comprehensive reform. The effort to reform the Commercial Code
under the Ministry of Industry, Commerce, and Trade has been
difficult since it involves coordination among a number of
ministries, including the Ministry of Justice. As the Ministry
of Planning and Finance accomplishes its most important tasks,
what is needed is for other economically oriented ministries to
assume leadership to further reduce red tape and administrative
barriers to business.

Sound fiscal and monetary management, successful economic
reform, and impressive statistics have provided the right
environment to attract critical foreign investment. More than
$ 6 billion in realizable foreign investment, led by the South
Africans and the U.S. is expected to materialize over the next
five years. Major investment projects in very advanced stages
are listed below.

- Gencor/Billiton has begun preparations to construct a $
1.3 billion aluminum smelter outside Maputo. This is the
first of several megaprojects to get started. Construction
is scheduled to begin the first week of July; work on
erecting transmission lines through South Africa and
Swaziland has already begun.

- Enron and Industrial Development Corporation of South
Africa have traveled the long route to devise the $ 2.5
billion Maputo Integrated Steel project (MISP), which
should be reviewed and, hopefully, approved by the Council
of Ministers on or by July 7.

- In June, Arco announced its program to spend $ 60 million
on natural gas exploration in conjunction with SASOL of
South Africa. The intention is to pipe gas to Secunda,
South Africa for use at SASOL's synfuel plants there.
Fluor Daniel did the feasibility study on a (app.) $ 600
million pipeline.

- Construction of the new $ 300 million Maputo Corridor toll
road began in May. A one-stop border crossing will be
built. The road should shorten travel time to Johannesburg
and Pretoria to six hours.

- Cabot Corporation of Boston plans to start rehabilitating a
tantalite mine in Zambezia Province in September at a cost
of $ 30 million. Cabot is currently negotiating with
partners to double its one-third interest in the project.

- The Railroad Development Corporation of Pennsylvania and =
Edlow Resources of Washington, D.C. are part of a

u
00500000002074


01/29/01 12:49 FAA 202 452 0110 BNERGE Viviolvn * —-

RIGHTS OF 25 ELECTRICITY DISTRIBUTION GRIDS FOR A PERIOD

OF 30 YEARS TO THE TURKISH AND FOREIGN PRIVATE SECTOR.

MENR AWARDED ONE TENDER TO A CONSORTIUM INCLUDING HOWARD
ENERGY.

PROJECT: BURSA-YALOVA ELECTRICITY DISTRIBUTION

COMPANY: HOWARD ENERGY

STATUS: CONTRACT SIGNED BUT AWAITS COUNCIL OF STATE,
DANISTAY, APPROVAL. COURT HEARING ON THE VALIDITY OF
CONTRACT HELD ON OCTOBER 3, 2000, RESULTING IN A NEGATIVE
DECISION, WHICH MENR HAS APPEALED. THE DANISTAY'S SUPREME
BOARD OF JUDGES WILL REVIEW THE DECISION EARLY NEXT YEAR.

RENEWABLE ENERGY
JOCOCOOCOOQOOOONK

8, THE TURKISH GOVERNMENT EXPECTS ENERGY CONSUMPTION TO
INCREASE BETWEEN 8-10 PERCENT PER YEAR OVER THE NEXT
DECADE, IT MUST INCREASE THE NUMBER OF GENERATION PLANTS
TO MEET THAT DEMAND, WHILE AT THE SAME TIME, MINIMIZING
‘THE ADDITIONAL POLLUTION THAT THESE PLANTS WILL EMIT. IN
ADDITION, TURKEY WANTS TO PROTECT ITS ENERGY SECURITY.

TO MEET THESE GOALS, THE TURKISH GOVERNMENT HAS AWARDED
TENDERS FOR A NUMBER OF RENEWABLE ENERGY PROJECTS. U.S.
FIRMS ARE IN THE PROCESS OF IMPLEMENTING THE FOLLOWING
PROJECTS, USING THE BUILD-OPERATE-TRANSFER (BOT) MODEL.

PROJECT: 25 MW AYDIN GERMENCIK GEOTHERMAL POWER PLANT
PROJECT

COMPANY: ORMAT

STATUS: CONTRACT SIGNED. COUNCIL OF MINISTERS APPROVAL
EXPECTED SHORTLY. POSSIBILITY OF INCREASING PLANT
CAPACITY TO 120 MW EXISTS.

PROJECT: 26.5 MW CESME KOCADAG WIND POWER PLANT
COMPANIES: PRINCETON DEVELOPMENT AND STERLING ENERGY
SERVICE

STATUS: STATE PLANNING ORGANIZATION APPROVAL GRANTED IN
2000. CONTRACT NEGOTIATIONS CONTINUE.

PROJECT: 39 MW CANAKKALE WIND POWER PLANT

COMPANY: CANNON INTERNATIONAL

STATUS: STATE PLANNING ORGANIZATION APPROVAL GRANTED IN
2000, CONTRACT NEGOTIATIONS CONTINUE.

PROJECT: $0.4 MW CESME KOCADAG WIND POWER PLANT
(COMPANY: CANNON INTERNATIONAL

STATUS: STATE PLANNING ORGANIZATION APPROVAL GRANTED IN
2000. CONTRACT NEGOTIATIONS CONTINUE.

PROJECT: MAMAK WASTE POWER PLANT (10 MW)

COMPANY: U.S. - TURKISH JOINT VENTURE: TURK AMERICAN
INTERNATIONAL ENERGY VENTURES

STATUS: STATE PLANNING ORGANIZATION APPROVAL GRANTED IN
2000. CONTRACT NEGOTIATIONS WITH THE ANKARA MUNICIPALITY
CONTINUE.

9. COMMENT: AS THIS LIST SHOWS, U.S. FIRMS HAVE PLAYED A
‘TREMENDOUS ROLE IN MEETING TURKEY'S ENERGY NEEDS, USING
EVERY INVESTMENT MODEL. IT HAS NOT BEEN EASY TO DEVELOP
‘THEIR PROJECTS. INDEED, IT HAS TAKEN YEARS AND VERY
SIGNIFICANT RESOURCES TO RESOLVE ALL THE CHALLENGES THAT
THESE COMPANIES HAVE FACED. THE TURKISH GOVERNMENT iS
AWARE OF THE DIFFICULTIES AND APPRECIATES THE PATIENCE
AND DEDICATION U.S. COMPANIES HAVE SHOWN TO DATE.

10, THE TURKISH GOVERNMENT IS IN THE PROCESS OF
INTRODUCING LEGISLATION, WHICH IT EXPECTS WILL CREATE A
LIBERALIZED ENERGY SECTOR IN TURKEY BY 2003. THE GOT

HOPES THAT A LIMITED NUMBER OF CONTRACTS CURRENTLY UNDER

00500000001633


1800 Depart for Mumbai on Jet airways 9W 448

1930 Arrive Mumbai (Met by hotel car)

RON ITC Maratha Sheraton hotel, near International Airport
Monday, Sept 17

08:00 -0900 Working breakfast at ICICI with Mr. K.V.Kamath, Chairman
IcIcI

0945-1030 Site visit to National Securities Depository Limited, Kamala
Mills Compound

(This depository was facilitated by USAID's
FIRE project resulting in reduced paperwork, increased productivity and
elimination of securities transfer frauds.)

12:00-11:45 Meeting with Mr. D.R.Mehta, Chairman, Securities and
exchange Board of India, lst floor, Mittal Court, B Wing, 224 Nariman Point,
Mumbai 400 021

12:00-12:30 Meeting with Mr. Ratan Tata, Chairman, Tata Sons ltd. at
Bombay House, Homy Mody street, Fort, Mumbai 400 001. Tel: 204 3725. ito
be confirmed)

12:45-13:30 ress interviews with Business Week and CNBC in Taj Mahal
hotel

13:30-14:45 Lunch with US bankers/securities executives

15:00-16:00 Meeting with Mr. Bimal Jalan, Governor, Reserve Bank of
India at the Reserve Bank of India Building, ist floor, Mumbai 400 001

27:30 Return to the hotel
Tuesday, Sept 18
03:30 Depart Mumbai for Seoul by Korean Air

That's all for now. If you want to discuss please feel free to call me at
home tonight at (b)(6)) . (remember we're 10 and 1/2 hours ahead) or
e-mail me at hot t Tasneemnahar@hotmail.com, I'11 check my e-mails.
Regards! Scott

00100000000013


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PAGE 81 OF 03 Mid=199735381211 oat athe HID=199735301211 Oey 18/12462
CAVEAT IS) = ‘SOUTH AFRICA - ENRON'S PARTNER IN THIS PROJECT)»
HANDLE VIA TOLD THE AMBASSADOR THAT 10C DELIVERED COMPLETED

ACTION = CTRSDAAAR (1) B01 (1) C10 (1) EPO (1) » FEN (1) GE (1) 1" ¢t>
UBRO AL) » FCM CL) » LOB (1) + 100 (1) + IMB CL)» EMM (1) 100 (10+ ITF QD ATL C0) 7

OUME (1).000 (1) SEN A+)
CRC = BSFS

AR RUEATRS

DE RUEHTO #5456/61 3531236

IWy CCCCC L2H

R 1912362 DEC 97

FM ANEMBASSY MAPUTO

TO RUERC/SECSTATE WASHOC 8189
RREBAAA/DEPT OF ENERGY WASHDC
INFO RUERSAD/AMCONSUL DURBAN @146
RUERBG/AMCONSIL JOHANNESBURG 3687
RUCNSAD/SOUTHERN AFRICA DEVELOPMENT COMMUNITY
RUEHTH/AMCONSUL CAPE TOW 8186
RUEHSA/AREMBASSY PRETORIA 8397
RUCPDOC/USDOC WASHOE

er

CONFIDENT! AL SECTION 8) OF 03 MAPUTO aes¢5a

DEPT FOR AF/S/EPS AND EB/ICD
DOE FOR DONNA BOBBISH

E.0. 12958: OECL: 12/18/08
TAGS: ENRGs EPETs ECO EINYe BEXP, PREL» HO
SUBJECT: MOLAMBIQUE GAS UPDATE

1, W) CLASSIFIED BY: DCH CARMEN MARTINEZ.
REASON: 1.5 br @) AND IED

ie (C) SUNMARY: ENRON AND ARCO TEAMS HAVE BEEN IN
(MAPUTO OVER THE PAST TEM DAYS. b)(4
UCDNADD ese

, ((b)(1)] ERO,

j WITH SOUTH AFRICAN PARTNER IDC» PRESENTED FINAL

| FEASIBILITY STUDIES TO THE GRH DECEMBER 18. ARCO
1S HAVING DIFFICULTY WITH OWE OF ITS PARTNERS: JC),
BUT IS MOVING AHEAD QUICKLY WITH SASOL AND EXPECTS
TO BEGIN DRILLING IN ITS TEMANE FIELOS EARLY NEXT

| YEAR. END SUMMARY,

"ENRON UPBEAT

4.) ENRON SENIOR VICE PRESIDENT TOHY WAY
BRIEFED AMBASSADOR AND DCM DECEMBER 9 ON THE STATUS
OF THE ENRON PROJECT. IN A SEPARATE MEETING ON
DECEMBER 18, TONY DROSTEs GENERAL MANAGER OF IDC
HINDUSTRIAL DEVELOPMENT CORPORATION OF

FEASIBILITY STUDIES TO THE GOVERNMENT THAT SANE DAY»
IN ADVANCE OF THE EMD OF YEAR QUE DATE,

VS

vo 4, (0) WAY SAID THE PROJECT DIMENSIONS REMAIN
UNCHANGED; THE PIPELINE WOULD COST $40 MILLION AND
TRE STEEL SLAB PLANT NEAR MAPUTO ANO RELATED
ACTIVITIES WOULD COME IN AT $1.64 BILLION AND 10C
GENERAL MANAGER TONY DROSTE CONFIRMED THESE FIGURES
TO US. ENRON 1S IM PARTNERSHIP WITH IDC OW THE WHOLE
DEAL: BUT CONSTRUCTION AND OPERATION OF THE
PIPELINE REMAIN ENRON'S SOLE RESPONSIBILITY,

((b)(4)]

{((b)(4)]

6. OC) WAY PREDICTED 17 WOULD PROBABLY BE EARLY
1999 BEFORE CONSTRUCTION ON THE PIPELINE COULD
BEGIN. CONSTRUCTION OF THE 408 MILE LINE WOULD TAKE

ABOUT 18 MONTES. [(b)(4)]

CONFIDENTIAL
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TWADDELL

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00500000000637


sizable sums in this country, it behooves us to move on a BIT.
Secretary Rubin's trip provides an opportunity to underscore
the importance of a BIT, and to advocate on behalf of these
American companies, each of which has an investment project
before the government.

Since 1995, the Ministry of Planning and Finance under
Minister Salom3o has provided strong, unwavering leadership
within the government for reform. In particular, the ministry
has held the line on new spending, while shifting increasing
emphasis toward health and education and away from defense.
The ministry has introduced new methods that have brought
greater transparency and clarity to the budget process. And,
the ministry has been an unwavering proponent of reform, using
its political and bureaucratic muscle to push other ministries
and agencies forward.

One example has been Customs reform, where private
management, closure of loophole duty exemptions, and an overall
reduction of tariffs have had a dramatic impact on operations
and revenues. Though private management of customs began only
in May, 1997 and tariffs had been substantially reduced only
six months earlier, customs receipts for 1997 increased 28
percent. The next step is to introduce new legislation and
streamlined procedures to facilitate rather than hinder
international commerce.

Another example has been the Center for Investment
Promotion (CPI). Once an investment approval agency which
hindered investment, CPI has been transformed into a true
investment promotion agency. Fernando Sumbana, CPI's activist
director appointed in 1997, has extended CPI‘s mandate to
include lobbying other agencies and offices within government
to streamline their permit and licensing procedures. He also
assumed a leadership role within government in advancing the
MOZAL aluminum smelter project (the first Industrial Free Zone
investment for Mozambique) and the Maputo Integrated Steel
Project (MISP).

At present, the Ministry of Planning and Finance is -
absorbed with the introduction of a VAT tax system, which is
desperately needed to replace the existing system of taxes
which cumulate transaction by transaction and are a
disincentive to formal sector activity. Legislation will be
considered in 1998, but implementation has been delayed until
April, 1999 to allow adequate preparation time and to avoid
association with or compounding holiday seasonal inflation at
the end of the year.

Working closely with the Ministry of Planning and Finance,
the Bank of Mozambique (BOM) under Governor Adriano Maleiane
has done an outstanding job of controlling inflation, fostering
a suitable environment for the financial sector to grow, and
managing foreign exchange. BOM policies brought inflation down
from a high of 70 percent in 1994, and have kept it down for =
the last 26 months. Inflation was less than 6 percent in 1997

00500000002072


<a —OSrnon

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PAGE 06 OF 87 W10=199832881117 988482
INTEREST 1S THE NOW-PUBLIC NEWS THAT THE PDB HAS ASKED
THE MINISTRY OF ENERGY TO APPROVE THE AWARD OF
MEGHMAGHAT'S PHASE TWO 458 HW PROJECT DIRECTLY TO
MARUBEW! OF JAPAN, MARUBEN| WAS THE SECOND LOWEST
UNCLAS SECTION &7 OF 88 DHAKA 683481

SENSITIVE BUT UNCLASSIFIED

STATE FOR SA/PABs EB/ESCs AND IMR/SA/SOA

STATE PASS EXIMBANK: OPIC AND TOA

USDOC FOR 4538 ITA/ANESA/OSA: 6888 ADVOCACY CENTER
DEPT OF EWERGY FOR TOM CUTLER

TREASURY FOR OASIA

LONDOM FOR SUTPHEN

DUBLIN FOR ENERGY OFFICER

MANILA FOR USED ADB AND SCO BARNES

E.0. 12958: 11/24/89
TAGS: EPET» EWRG? ECON) BG
‘SUBJECT: BANGLADESH: ENERGY SECTOR UPDATE

BIDDER FOR MEGHNAGHAT: IT HAS REPORTEDLY OFFERED TO
MATCH THE TERMS AND PRICE OF AES’S CONTRACT.

OTHER POWER PROJECTS

19. (SB TWO BARGE-MOUNTED POWER PLANT PROJECTS ARE
ALSO IM THE WORKS: BOTH INVOLVING U.S. COMPANIES. ONE,
INVOLVING OGDEN ENERGY: EL PASO» AND THE FINNISH
COMPANY WARTSILAs EAS APPROACHED THE OVERSEAS PRIVATE
INVESTMENT CORPORATION (OPIC) FOR FINANCING AND
POLITICAL RISK INSURANCE WORTH NEARLY USD 388 MILLION.
AN OPIC DUE DILIGENCE TEAM VISITED BANGLADESH IN EARLY
NOVEMBER: AND A DECISION OM OPIC’S INVOLVEMENT 1S
EXPECTED SOON. SHITH COGENERATION HAS FOUND A
FINANCIAL BACKER IH THERMO-ECOTEK OF MASSACHUSETTS: AND
HOPES IT CAN GET FINAL BDG CONCESSIONS AND APPROVALS TO
MAKE ITS 118 KM PROJECT HAPPEN BY HEXT SUMMER,
INDICATIONS ARE THAT SHITH’S BARGE WILL BE ACCEPTED BY
THE 80G IF A TIGHT SCHEDULE CAK BE MET» AND DAMAGES FOR
LATE DELIVERY ARE PAID.

26, (BU) MPI GASED IN THE U.K. AND FORMERLY KNOWH
AS MIDLANDS) OWNED BY CINERGY .S.)1 RECEIVED IN
OCTOBER 1998 A LETTER OF INTENT GON) FROM THE BDG TO
WEGOTIATE A CONTRACT TO BUILD OWN AND OPERATE (BOO) A
188 MW GAS-FIRED PLANT 1K BAGHABAR!. NEGOTIATIONS ARE
SCHEDULED TO BEGIN NOVEMBER 24,

‘TL, (SBU) ENRON INTERNATIONAL HAS PLACED AN
UNSOLICITED OFFER BEFORE THE POWER DEVELOPMENT BOARD TO
BRING IM 168 HW OF EMERGENCY POWER FOR 3 TOS YEARS,

¥10=199832801117 908492
THE COMPAMY 1S PUSHING HARD FOR A QUICK DECISION ON THE
DEAL, WHICH WOULD DELIVER 82 HW BY APRIL: WHEN PEAK
SEASON BEGINS. INDICATIONS FROM THE PDB ARE THAT ENROK
WILL NEED TO LOWER ITS PRICE TO HAVE ANY CHANCE OF
ACCEPTANCE. THE UNSOLICITED MATURE OF THE PROPOSAL
HAKES IT MORE DIFFICULT FOR THE BOG TO ACCEPT AS WELLE
THE ENERGY SECRETARY 1S NOT CURRENTLY A SUPPORTER QUE
IH PART TO TRANSPARENCY CONCERNS.
22. (SBU) THE GOVERNMENT'S RURAL ELECTRICIFICATION
BOARD (RES) WILL SELECT A COMPANY IN MID-NOVEMBER TO
BUILD THREE 18 HW POWER PLANTS. SEVERAL U.S. COMPANIES
ARE ON THE SHORT LIST. THE REBs DESIGNED AFTER THE
U.S, RURAL ELECTRIFICATION SYSTEM: WILL SELL THE POWER
TO ITS CUSTOMERS. THE REB HAS MUCH HIGHER PAYMENTS
RECEIVED TO GENERATION PRODUCED RATIOS THAN DO THE
OTHER BOG POWER COMPANIES,

23, (SBU) IT HAS BECOME OBVIOUS TO POST THAT
GOVERNMENT AND INDUSTRY PLAYERS NEED TO COMMUNICATE
WORE WITH EACH OTHER. COMPANIES REMAIN IN THE DARK AS
TO HOW DECISIONS ARE MADE WITHIN THE BUREAUCRACY, AND
AS A RESULT THEIR FRUSTRATION LEVEL IS HIGH) EVEN
THOUGH THE COMPANIES ACKNOWLEDGE THAT THE BANGLADESH!
BUREAUCRACY MOVES FASTER THAN INDIA’S. AT THE SAME
TIMEs SOME OF THE COMPANIES RERE RELY TOO MUCH ON THEIR
LOCAL PARTERS: AND AS A RESULT DO NOT HAVE THE “FACE
TIME" WITH BUREAUCRATS NEEDED TO BUILD MORE
UNDERSTANDING. ADD TO THE MIX SOME MISSED DEADLINES
FROM TWO OF THE BARGE POWER DEALS: OXY’S BLOWOUT
SANGU’S PERCEIVED COST OVERRUNS, PLUS CONCERNS ABOUT
UNCLAS SECTION BS OF G8 DHAKA 983401

SENSITIVE BUT UNCLASSIFIED

STATE FOR SA/PAB, EB/ESC: AND INR/SA/SOA

STATE PASS EXIMBANKs OPIC AND TDA

USDOC FOR 4538 ITA/ANESA/OSAs 6088 ADVOCACY CENTER
DEPT OF ENERGY FOR TOM CUTLER

TREASURY FOR OASIA

LONDON FOR SUTPHEN

DUBLIN FOR ENERGY OFFICER

MANILA FOR USED ADB AND SCO BARNES

E.0, 12958: 11/24/83
TAGS: EPETs EMRG: ECON, 86
SUBJECT: BANGLADESH: ENERGY SECTOR UPDATE

ABILITY TO PAY AS WELL AS THE POLITICAL DIMENSIONS OF

UNCLASSIFIED

WAIL

00500000000714


and Sumisei Global Investment Trust lost 1.2 trillion yen Friday November 30
from a combined investment balance as of November 28 of 3.3 trillion yen.

Finatt!: ANYTHING TO SAY ON THE SAMURAI BONDS?

6. On its presence in Japan's energy market, Enron Japan is keeping a low-profile,
realizing last month that the company’s financial troubles would cast into question
their reputation and activities in Japan. Enron Japan had plans with to build
power plants in Aomori and Yamaguchi prefectures and had been in active
discussions with local governments. A joint project with a major Japanese textile
company, Teijin Limited, may be on hold as Teijin reportedly asked Enron to
cancel the joint feasibility study on a 70,000 kilowatt coal-fired thermal power
plant in Shikoku. [(b)(4)]

A blow to deregulation efforts?

7. Enron's demise has made it an above-the-fold press item for the Japanese major
dailies and specialized energy press. Mainichi Shinbun opined in an editorial that
with the California energy crisis and the Enron failure, "it was clear that the US
electricity liberalization advanced too fast and too much." ‘The editorial however
continues to say that this does not mean that Japan should stop liberalization
altogether as the country needs to "advance its competition and efficiency in the
energy industry when the global economy requires cost reduction ..". The more
conservative daily, the Sankei Shinbun, described Enron's withdrawal from the
Japan market as an "undreamed of ambush" of some METI officials, which
viewed Enron as somewhat of an ally in its efforts to liberalize the market. The
Sankei comments that the loss of "gaiatsu" with Enron's departure will lead to the
domestic industry “regaining its strength" and that the utilities will utilize Enron's
failure in its arguments to counter what it perceives as the "evil effect of rapid
liberalization". (GET A BETTER CLARIFICATION ON SANKEI) Nikkei had
some kind words for Enron, saying it did contribute positively as a symbol of
globalization, liberalization and innovation.

00500000000010


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PAGE @1 MI0#=199615202235 023315 31720232
CAVEAT (S) =

HANOLE VIA

ACTION = (TRS] BOL (1)+ GI (1) $08 UW) TDC (1) IMB} INN G+ ITE Od

ITT (1)+ OIMF (1)+ GC U1)» SEN () =

CRC = 6862

P RUEATRS

DE RUEHC #2499 1522019

ZNY CCCCC ZZH

P 312018Z MAY 96

FM SECSTATE WASHOC

TO RUEHTN/AMCONSUL CAPE TOWN PRIORITY 8463
RUEHSA/AMEMBASSY PRETORIA PRIORITY 8135

INFO RUEHBG/AMCONSUL JOHANNESBURG PRIORITY 2140
RUEHTO/AMEMBASSY MAPUTO PRIORITY 8779

BT
CONF IOENTIAL STATE 112499
FOR AMBASSADOR JOSEPH

£.0. 12958: DECL: 65730706
TAGS: ECON: EINV: PGOV: MZ: SF
SUBJECT: PROMOTING ENRON: CALL ON TRADE MINISTER ERWIN

REF: (A) PRETORIA 5036: (8) MAPUTO 2439, (C) MAPUTO 2515
1. (C) ENTIRE TEXT.

2. IN LIGHT OF DEVELOPMENTS REPORTED IN REFTELS:
DEPARTMENT BELIEVES IT WOULD ADVANTAGEOUS FOR YOU TO CALL
ON TRADE MINISTER ALEC ERWIN IN SUPPORT OF THE IDC/ENRON
HEADS OF AGREEMENT AND ENCOURAGE HIM TO AUTHORIZE THE
SIGNING OF THE AGREEMENT WITHOUT DELAY. WE FEEL THE
MESSAGE WOULD BE MOST EFFECTIVE IF DELIVERED WITHIN THE
NEXT 1@ DAYS: BEFORE ENRON NEGOTIATOR TONY WAY RETURNS
FROM LONOON.

3. WE LEAVE IT WITH YOU) IN CONSULTATION WITH FCS
OFFICIALS AND MINERALS OFFICER BRUDVIG HOW BEST TO FRAME
THE ARGUMENT.

CHRISTOPHER

eT

"2499

662

NNNN

CONFIDENTIAL
0500000000825


IMMEDI ATE

UNCLASSIFIED

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

PAGE 03 OF 83 10=292013881123 aensss = 9/14832 W10=200813081123 eeesss = AS/14032
QUESTION ON CHANGES IN THE |NVESTHENT CLIMATE, CHIEF ‘AS|ODU NIGERIA, ONE WHOSE SOVEREIGNTY WAS UPHELD IN A CIVIL WAR
STATED THAT "WE WERT BACK WITH TRE TALIBAN-STYLE THAT NIGERIANS DO NOT WANT TO RELIVE. AS AN ALTERNATIVE TO
RETROGRESSION IN SOME STATES) WHILE MAKING SOME PROGRESS IN A MATIONAL SOVEREIGN CONFERENCE, THE CAIEF ECONOMIC ADVISOR
OTHERS: LIKE IM DELTA STATE UNDER THE MIGER DELTA SUGGESTED A MAJOR ADDITION TO THE NUMBER OF SEATS IN ONE OF
DEVELOPMENT CORPORATION (DOC). ME ADDED THAT THE OIL TWE TWO HOUSES IN THE MATIONAL ASSEMBLY, MAKING IT A FORUM
COMPANIES IN THE SOUTH HAD COMMITTED THEMSELVES 10 A WERE THE POLITICAL LONGINGS OF THE NATIONAL MINORITIES CAN
“COVENANT” WITH THE LOCAL COMMUNITIES® WHICH HE HOPED WOULD BE HEARD. IM ANY CASE, ASIODU REMARKED, THE NATIONAL
MODERATE TEMPERS IN THE REGION. ASSEMBLY LACKS THE MANDATE TO ALTER THE CONSTITUTIONAL ORDER
BECAUSE NIGERIANS DID NOT ELECT WITH THIS IN MIND,

13, DAS RADELET ASKED CHIEF ASIODU ABOUT THE GON'S
CANCELLATION OF A USD GS MILLION CONTRACT FOR THE 16. COMMENT; WHILE THE GON CAN BE EXPECTED 10 CONTINUE
REACTIVATION OF THREE GAS TURBINE UNITS AT TRE EGBAN THERMAL PUBLICLY PURSUING A COMMITHENT OM THE PART OF CREDITOR
STATION IN LAGOS (NOTE: THE COMPANY ORIGINALLY AWARDED THE NATIONS TO CANCEL NIGERIA'S DEBTs SENIOR GON OFFICIALS ARE
CONTRACT, KARIDAs WAS IM PARTNERSHIP WITH GENERAL ELECTRIC STARTING TO REALIZE THAT SUCH A COMMITHENT WILL NOT BE
AND BABCOCK AND WILCOX, END NOTE.) ASIODUs IN A SOMEWBAT FORTHCOMING IK TRE ABSENCE OF A SUCCESSFUL TRACK RECORD
DEFENSIVE TONE. EXPLAINED THAT THE CONTRACT HAD SEEN IMPLEMENTING IMF ECONOMIC PERFORMANCE BENCHMARKS, THE CHIEF
CANCELLED “BEFORE IT CANE INTO EFFECT” (MEAKING THAT THE GOK ECONOMIC ADVISOR DID NOT IMDICATE WHETHER HE BELIEVES THAT
HAD NOT MADE ANY PAYMENTS TO NARIDA) BECAUSE IT WAS KOT THE GON CAN ATTAIN THESE BENCHMARKS: PARTICULARLY TO THE
CLEAR IF THE COMPANY HAD THE TECHNICAL KNOW-HOW TO PERFORM EXTEND THAT THEY INVOLVE WORKING WITH THE NATIONAL ASSEMBLY
THE REKABILITATION OF THE TURBINES, ASIOOU STATED THAT ON BUDGETARY ISSUES ANO FRIVOLOUS SPENDING. THE VIEWS OF
MARUBENL. THE JAPANESE FIRM THAT WAS AWARDED THE NEW THE CHIEF ECONOMIC ADVISOR ON PRIVATIZATION REAFFIRM THE
CONTRACTS WAS BETTER QUALIFIED TO REHABILITATE THE TURBINES: GON’S INTENT OM OVERHAULING KEY PUBLIC ENTERPRISES BEFORE
BECAUSE IT OWRUBENI) HAD ORIGINALLY BUILT THEN. CHIEF PUTTING THEM ON THE MARKET. THIS SHOULD NOT NECESSARILY
ASVODU MAINTAINED THAT AT THE TIME THE COWTRACT WAS SIGHED) PREVENT THEIR PRIVATIZATION: BUT IT IS LIKELY TO DELAY THE
GE WAS NOT NARIDA’S PARTNER. HAD GE DEALT WITH THE GON PROCESS. END COMMENT.
DIRECTLY, HE ADDED. THE ISSUE OF TECHNICAL EXPERTISE NIGHT PATTERSON
HAVE NOT ARISEN, ASIODU CONCEDED THAT THE GON HAD KOT aT
ENERCISED "ALL DUE DILIGENCE” IN THE MATTER. (OTE AND 1675
COMMENT: NARIDA WAS NEVER GIVEN THE OPPORTUNITY TO PERFORM ABM
THE SIGNED CONTRACT. GON OFFICIALS HAVE BEEN SURPRISED, AND NHN
UNCOMFORTABLE: WITH USG INQUIRIES ON TKIS ISSUE. THE COM
SEEMS TO RESENT AXD REGRET NOT BEING FULLY AWARE THAT A
MAJOR U.S. COMPANY WOULO BE AFFECTED BY THE CONTRACT’S
CANCELLATION: PARTICULARLY AFTER ENRON'S DEBACLES ON A
OIFFERENT CONTRACT. EMD NOTE AND COMMENT. )
14. ON AMORE REASSURING HOTE: ASIOOU STATED THAT PROSPECTS
FOR THE LONG-TERM POLITICAL STABILITY OF KIGERIA WERE GOOD:
NOTWITHSTANDING RECENT CALLS FOR POLITICAL CONFEDERATION AND
AVNATIONAL SOVEREIGNTY CONFERENCE. ME POINTED OUT THAT HE
WAS "HOT PARTICULARLY EXCITED ABOUT CONFEDERATION: ADDING
THAT ITS PROPONENTS HAD MOT EXPLAINED ITS MEANING: AND THAT
THE ROLE OF THE CENTRAL GOVERNMENT WOULD NOT DISAPPEAR IN A
CORFEDERATE STATE. ACCORDING TO ASIODUs NIGERIANS DO NOT
WIKT A CONFEDERATION, AS HORTHERNERS WANT TO BE ABLE TO SELL
THEIR CATTLE TO THE REST OF THE COUNTRY AS MUCH AS SOUTH
EASTERNERS WISH TO PROTECT THEIR OUT-OF-STATE INVESTMENTS.
THERE ARE» HE ADDED, OVER 258 NATIONAL MINOITY GROUPS IN
WIGERIA, HOST OF WHICH OOK TO TRE CENTRAL GOVERNMENT FOR
PROTECTION.
1. CHNEF ASIODU STATED THAT THERE ARE THOSE WHO FORGET
TRAT TRERE 1S A SOVEREIGH GOVERNMENT ALREADY IN PLACE 1

UNCLASSIFIED

00500000000865


a1<—s— Sm

PRIORITY

UNCLASSIFIED
DEPT TREASURY COMCEN

GO Es

PH 622-2222 RM 1121/MT

PAGE 81 OF 67 M1D=199832821117 008482
CAVEAT (S) =

HANDLE VIA

ACTION = ETRSICALL (2)+G} (be ICH (LD, 1CS (1) 10B (1) 1G (1) JNA)

UTR (Ube ETE (1) eOIMF (1) 000 C1)» SEM (=)
CRC = BIFS

PP RUEATRS

DE RUERKA #3461/81 3281851

IWR UUUUU LZK

P 2410512 KOU 98

FI AMEMBASSY DHAKA

TO RUCPDOC/USDOC WASHDC PRIORITY B458
RUERC/SECSTATE WASHOC PRIORITY 2476
INFO RHEBAAA/USDOE WASHOC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
X/AMENBASSY DUSHANBE 8863
RUSBAY/AMCONSUL MUMBAI 8648
RUEHAB/AMEMBASSY ASHGABAT 2837
RUEHLO/AMEMBASSY LONDON 8273
RUEHME/AMEMBASSY WEW DELHI 6322
RUEHDL/AMEMBASSY DUBLIN 8838
RUEHLM/AMEMBASSY COLOMBO 3699

RUEHML /AMEMBASSY MANILA 8786

RUEHNT/AMEMBASSY TASHKENT 896
ARUEHAD/AMENBASSY ABU DRAB! &543
RUEHIL/AMEMBASSY ISLAMABAD 5S83
RUEHKT/AMEMBASSY KATHMANDU 3725
RUEHGP/AMEMBASSY SINGAPORE 1574

BT

UNCLAS SECTION @1 OF 88 DHAKA @B34@1

SENSITIVE BUT UNCLASSIFIED

STATE FOR SA/PABy EB/ESCs AND INR/SA/SOA

STATE PASS EXIMBANKs OPIC AND TDA

USDOC FOR 4538 ITA/ANESA/OSAr 6288 ADVOCACY CENTER
DEPT OF ENERGY FOR TOM CUTLER

TREASURY FOR OASIA

LONDON FOR SUTPHEN

DUBLIN FOR ENERGY OFFICER

MANILA FOR USED ADB AND SCO BARNES

£.0, 12958: 11/26/03
TAGS; EPET: EWG: ECOMr BC
‘SUBJECT: BANGLADESH: ENERGY SECTOR UPDATE

REF: DHAKA 1597
1, (W) THIS MATERIAL SHOULD BE CONSIDERED BUSINESS

CONFIDENTIAL AND SHOULD HOT BE SHARED WITH PRIVATE
COMPANIES.

WiD=199632801117 998492

2, (SBU) BANGLADESH'S GAS AND POWER SECTORS ARE
BECOMING MORE ACTIVE AGAIN: ALTHOUGH NOT FOR ALL U.S.
COMPANIES. IN GAS® OCCIDENTAL PETROLEUM EXPECTS TO
RECEIVE FORMAL APPROVAL ON MOVEMBER 25 FOR AN EXTENSION
OF ITS SECOMD WORK PROGRAM IN BLOCKS 13 AND 14. AFTER
MANY NOKTRS OF DELAYS, OXY REMAINS OM SCHEDULE TO
DELIVER 188 MMCFD OF GAS TO THE GOVERNMENT BY JANUARY,
THE OTHER INTERNATIONAL PRODUCERS OF GAS: THE SANGU
DEVELOPHENT TEAM OF SHELL/CAIRN/HALLIBURTON: COULD SOON
INCREASE DELIVERY OF THEIR OFFSHORE GAS TO 188 OR MORE
MNCFD FROM THE CURRENT 6@ MCFD THEY HAVE BEEN
DELIVERING SINCE JUNE. TWO OTHER U.S. COMPANIES HOPE
TO BEGIN EXPLORATORY DRILLING FOR GAS IM 1999, ON THE
SECOND B1D ROUND FOR REMAINING GAS EXPLORATION RIGHTS:
NO INVITATIONS TO WINNERS (ANNOUNCED IN JULY) HAVE YET
BEEN MADE TO START NEGOTIATIONS. THE LACK OF ACTION
EXTENDS TO THE AWARD OF KEY BLOCKS 9, 12 AND 11+ WHICH
REMAIN IW LIMBOs TO THE CHAGRIN OF INTERESTED GIANTS
CHEVRON/TEXACOs MOBIL, AND SHELL. UNOCAL» MEANWHILE?
ENPECTS THE GOVERNMENT WILL SOON HAVE A PROPOSAL FOR
THE EMBASSY TO PASS TO THE U.S. TRADE AND DEVELOPMENT
AGENCY (TDA), REQUESTING A CONSULTANT TO EVALUATE THE
VARIOUS CONTRACTS FOR THE WESTERN REGION INTEGRATED
PROJECT (RIP + UNOCAL’S USD G2 MILLION PROPOSAL TO
DEVELOP A GAS FIELD: BUILD PIPELINES AND

CONSTRUCT /OPERATE POWER PLANTS 1M THE UNDERDEVELOPED
WEST. ENRON HAS COME UP WITH A SOMEWHAT SIMILAR PLAN
FOR ORTH BENGAL: PROPOSING TO BUILD A PIPELINE TO FEED
A FERTILIZER-FOR-EXPORT PLANT.

3, (SBU) IN THE POWER SECTOR: AES OF THE U.S.
CONTIMUES SLOW NEGOTIATIONS WITH THE GOVERNMENT OM THE
MEGHNAGHAT POWER PLANT (458 HV THE COMPANY IS TRYING
TO ARRANGE FINANCING FOR THE 368 MW HARIPUR PLANT
CONTRACT IT SIGHED WITH THE 8DG IN SEPTEMBER.
MEANWHILE: MARUBENI OF JAPAN: THE SECOND PLACE BIDDER
ON THE MEGHNAGHAT CONTRACT WOM BY AES+ 1S TRYING TO GET
A DIRECT AWARD OF THE CONTRACT FOR THE 458 MW PLANT FOR
THE SECOND PHASE OF THE MEGHNAGHAT PROJECT. OPIC NAY
FINANCE AND PROVIDE POLITICAL RISK INSURANCE TO ONE 11
MW BARGE PROJECT INVOLVING U.S, COMPANIES OGDEN ENERGY
AND EL PASO, SMITH COGENERATION HAS FOUND A FINANCIAL
PARTHER» THERMO ECOTEK OF MASSACHUSETTS: AND PROBABLY
WAS ONE LAST SHOT AT GETTING ITS 11@ MW BARGE PROJECT
GOINGS BOTR BARGE PROJECTS ARE OVER A YEAR BEHIND
SCHEDULE OVE TO PROBLEMS ARRANGING FINANCING,

U.K. -BASEDs U.S. -OWNED MPI WILL LIKELY BEGIN
MEGOTIATIONS WITH THE BOG IN LATE NOVEMBER FOR THE
BAGHABARI 102 HW PLANT IN WESTERN BANGLADESH, ENRON:

UNCLASSIFIED

00500000000709


PRIORITY CONFIDENTIAL

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

PAGE 82 OF a2 IDs 1S9SLa7BRI6S 48356705032 wiDs1999ia79@165
STANOPOINTs AN ADDITIONAL BENEFIT 1S THE INTRODUCTION: OF

VELL-KNOWM MULTINATIONAL COMPANY INTO THE ENERGY SECTOR AKO [(6)(1) , (b)(4)]

ENGAGING U.S, {NTERESTS IN KEEPING A BALANCE MITH CHINA AAD

AUSSIA, ~

NEXT STEPS [(b)(1) , (b)(4)]

((ey(") a fry SECTION 62 OF #2 ULAAKBAATAR ga18@1
‘STATE FOR EAP/CHs E/CBA AND EB/IEP

USDOC FOR COUNSELOR KALICK! AND P.AUEPER? ALSO FOR ITA/EAP
AND ITA/ENERGY

WHITE HOUSE FOR OVP-T.OSIUS AND NSC-L 1EBERTHAL/KEITH

PASS AID/ANE/EAP-C. DOWNEY

PASS TOA-J. GRANDNAISON/G. JACKSON CONMENT
PASS OPIC-H. MESSER {(b)(1 )]
USOOE FOR INTL AFFAIRS

BEIJING FOR ECON-S.REES AND CS-C. ADAMS
MANILA FOR USADB-D. BARNES

E.0, 12958: DECL? 7/1/84
TAGS: EWRGe EIN) NG RSs CH
SUBJECT: ENRON HIGH VOLTAGE TRANSMISSION LINE PROJECT

{(b)(1) , (b)(4)]

LA PORTA
4¢ BT

)

N\ =

CONFIDENTIAL

954835 06 /06832

00500000000545


ROUTINE CONFIDENTIAL =

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

PAGE 62 OF @2 1D=199814982285 978493 -29/18867
INDEPENDENT OF THE PRIVATIZATION PROCESS THROUGH A BOND

ISSUE OR OTHER MECHANISM, WITH THEIR PROPOSALS IN ee
HANOs THE PRESIDENT SAIO WE WOULD INVITE THEN TO JOIN ¥* a
WITH HIM AT THE WEEKLY MEETING BETWEEN THE COMISION DE

REFORNA DE LA EMPRESA PUBLICA (CREP) AND CDE TO DISCUSS

THEIR CONCERNS AND IDEAS WITH COMMISSION HEAO ANTONIO

19h CONDE. THE PRESIDENT ADMITTED THAT HE 1S ALSO

CONCERNED ABOUT HOW THE CURRENT DEBT BEING INCURRED BY

COE FOR THE PURCHASE OF THE GEC ALSTHRON AND SIEMENS

CONF IOENT IAL SECTION 2 OF 62 SANTO DOMINGO 992683

€.0, 12958: DECL: $/26/2083

TAGS: EWRG EINV DR

SUBJECT: PRESIDENT FERNANDEZ MEETS WITH U.S, POWER
COMPANIES

REF: SANTO DOMINGO 2529

TURBINES WILL BE HANDLED IN THE PRIVATIZATION OF COE.

7, IC) WHILE DISAPPOINTED THAT THE MEETING DID KOT
YIELD SOME IMMEDIATE RELIEF ON DEBT PAYMENTS: THE IPPS
WERE GENERALLY PLEASED THAT THEY WERE ABLE TO DRAW MORE
ATTENTION TO THE ACCUMULATED DEBT. THEY ARE ALSO
PLEASED TO RAVE THE OPPORTUNITY TO TAKE THEIR CASE TO
THE CREP.

8. (©) WE FOUND THE PRESIDENT’S REFERENCE TO HIS
PARTICIPATION IM WEEKLY MEETINGS BETWEEN THE CREP AND
COE PARTICULARLY INTERESTING, WE BELIEVE THESE
MEETINGS ARE NOW BEING HELO TO KEEP THE PRIVATIZATION
PROCESS UNDERWAY. IN A CONVERSATION WITH CHARGE AFTER
THE MEETING, SEGURA WAS EFFUSIVE IM HIS SUPPORT OF
PRIVATIZATION. WE BELIEVE HE WAS TAKEN TO THE WOOOSKED
AND THUS BAS MODERATED AIS POSTURE. WATT ’
er

2683

OFA

NK

00500000000772


ROUTINE

PAGE G1 OF a2 08/03361
CAVEAT (S) =
HANDLE VIA
ACTION = (TRSDBOU (1) sCALL (3) + FCEN (1) »GGR (10 +61 (1+ FADB (164 BRD (1)
VOB (1) » LOC C1) » $00 (1) 6 IMB (1) e AMF (1) TNL (by ATE (1) ITI (1) O1ME (1)
QC (1) + SEN (-) e KAA) XLT 11)

CRC = 9183

MID=19990880058 908377

RITUZVUW RUEHSOAISES 097182-UUUU--RUEATRS.
‘INR WUUUY 22H

A 0718282 APR $9

FM ANCONSUL SAO PAULO

10 RUEKC/SECSTATE WASHDC 2581
AUEHBR/AMEMBASSY BRASILIA 278
RUEHRI/AMCOKSUL R10 DE JANEIRO 1145
RUEHRG/AMCOKSUL RECIFE 8238
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDC/USDOC WASHOE
RUEHBU/AMEMBASSY BUENOS AIRES O19S
RUEHMN/AMEMBASSY MONTEVIDEO 8125
RUEHAC/ANEMBASSY ASUNCION 0083
RUEHSG/AMENBASSY SANTIAGO G03
RUEWLP/AMENBASSY LA PAZ 0038

BT

UNCLAS SAO PAULO 820563

DEPT OF TREASURY FOR WMCGREW

USDOC FOR 4322/1 TAC 1EP/WH/OLAC-SC
USDOC FOR 3234/USCS/O10/ MH

STATE PASS EXIMBANK FOR STEVE TROMPSON
STATE PASS OPIC FOR OMORONESE

Oe ae
TAGS: ECON: EINV) EFIMe ENRG> BR
SUBJECT: INTEREST IN COMGAS PRIVATIZATION APPEARS
STRONG: SALE EXPECTED TO BRING IN A PREMIUN

EF DE JANEIRO 8283

1. SUMMARY: BRAZIL'S FIRST MAJOR PRIVATIZATION OF 1989
WILL TAKE PLACE OK APRIL 14+ WHEN CONGAS: THE STATE OF
SAO PAULO PIPED-GAS DISTRIBUTICN COMPANY WILL BE
AUCTIONED. SAO PAULO ANALYSTS BELIEVE THAT) AT A
MINIMUM, TRREE TO FIVE BIDS WILL BE TENDERED FOR COMGAS:
PRIMARILY FROM FOREIGN CONSORTIUMS. ALSO ANALYSTS
ANTICIPATE THAT A PREMIUM ABOVE THE MINIMUM PRICE OF RS
895.5 MILLION WSS S21 MILLION) WILL BE OFFERED. END
‘SUMMARY.

2. BRALIL’S FIRST MAJOR PRIVATIZATION OF 1999 WILL TAKE
PLACE ON APRIL 14 WHEN COMGAS WILL BE AUCTIONED GEFTEL
INCLUDES DETAILS OM MINIMUM PRICEY COMPANIES INTERESTED:
SERVICE AREAs AND CUSTOMER BASE). PRIOR TO THE
EVALUATION OF THE REAL» THE NATIONAL BANK OF ECONOMIC

UNCLASSIFIED

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

MiDe199909800358 004877 94/83382
AND SOCIAL DEVELOPMENT GGNDES) ESTIMATED THAT

PRIVATIZATICNS FOR 1999 WOULD GRING IN USS 20 BILLION:

HOWEVER IN THE RECENT AGREEMENT WITH THE INTERNATIONAL

MORETARY FUND (IMF) THAT FIGURE HAS FALLEN TO. USS 16

BILLION, DESPITE THE DEVALUATION AND WORRIES ABOUT

BRAZIL'S ECONOMY. SAO PAULO STATE GOVERNMENT OFFICIALS:

ENERGY-SECTOR ANALYSTS AND BOVESPA OFFICIALS TOLD ECONOFF

THAT CONGAS REMAINS AN ATTRACTIVE INVESTMENT.

3. WITH THE KEW BRAZIL-BOLIVIA GAS PIPELINE TO ENSURE AN
INCREASED AXO STEADY SUPPLY OF NATURAL GAS TO THE REGION:
‘SAO PAULO ANALYSTS BELIEVE THAT CONGAS HAS VERY HIGH
GROWTH POTENTIAL. HOWEVER, THE KEW OWNER WILL HAVE TO
INVEST TO BUILD UP ITS DISTRIBUTION NETWORK AND INCREASE
ITS RESIDENTIAL CUSTOMER BASE.

4. ALL INTERLOCUTORS MENTIONED THAT FOREIGN GAS
COMPANIES HAD DEMONSTRATED THE MOST INTEREST IM THE SALE
OF COMGAS. MAJOR CONTENDERS (weLWRes Sa ¢

BOLIVIA GAS PIPELINE AND RAS suesta
THE SRAZIL SIDE AND 21% ON THE BOLIVIAN s10e1 iN IT.

$. THE PROCEEDS FROM THE SALE OF COMGAS WILL GO TO
COMGAS’ PARENT: THE ELECTRIC COMPANY OF SAO PAULO ICESP).
ESP WILL USE THE MONEY TO LIQUIDATE A PORTION OF ITS OW
DEBTS IN PREPARATION FOR THE PRIVATIZATION OF TRREE CESP
GENERATING FACILITIES: TRAT WILL TARE PLACE (N MAY AND
JUNE OF 1999. IN TORM: THE MONEY FROM THE SALE OF CESP'S
GENERATING FACILITIES WELL BE USED TO PAY SAO PAULO STATE
DEBENTURES: A PORTION OF WKICK COME DUE IM JUNE. THE
INTERLOCUTORS INDICATED THAT THIS IS WHY THE SALE OF
COMGAS WOULD GO FORWARD AS PLANNED,

6. THE APRIL COMGAS PRIVATIZATION I$ EXPECTED 10 GE THE
FIRST OF SEVERAL PRIVATIZATIONS FOR THE RIGHTS TO
OISTRIBUFE PIPED GAS IN SAO PAULO STATE. THE
GEOGRAPHICAL AREA INCLUDES GREATER SAO PAULO» SANTOS AND
THE PARAIBA VALLEY, THIS REGION 1S THE ONLY PLACE WHERE
COHGAS ALREADY HAS A DISTRIBUTION HETWORKe THOUGH
MODESTLY DEVELOPED, IN PLACE. THE REST OF THE STATE IS
CURRENTLY ONLY SERVICED BY BOTTLED GAS. AMALYSTS TOLO
ECONOFF THAT THE BRAZIL-BOLIVIA PIPELINE: WHICH BISECTS
THE STATE AS IT RUNS FROM THE STATE’S WESTERN BORDER EAST
ALMOST TO THE COAST: WILL MAKE IT FEASIBLE TO PROVIDE
PIPED MATURAL GAS SERVICE TO VIRTUALLY THE ENTIRE STATE.
FUTURE AUCTIONS OF RIGHTS 10 DISTRIBUTE GAS BY PIPE TO
OTHER PARIS OF THE STATE ARE EXPECTED WITH PROCEEDS GOING
DIRECTLY INTO SAO PAULO STATE COFFERS.

CLARE

UNCLASSIFIED

00500000000553


PRIORITY UNCLASSIFIED

DEPT TREASURY COMC.
PH 622-2222 RM 1121/M
Pace OD OF 2 CON = UTP aRNS aigse2 05/0787
[(b)(4)]

6. (SOU) BETWEEN JUNE AND sar [(b\6 10 THAT TEAS
WILL GRADUALLY RAISE ITS PRICES 10 THES CASH FLOW.
TEAS INTENDS TO RAISE THESE PRICES FROM THE CURRENT LEVEL
OF 4.3 CENTS PER KILOWATT HOUR TO 5.1) CENTS IN DECEMBER,
FOR THE YEAR, AKTUGAN BELIEVED TEAS WOULD BE ABLE TO MEET
THE YEARLY AVERAGE TARGET OF 4.$ CENTS PROVIDED BY THE
‘WORLD BANK,

PEARSON
aI
#3529
4884
NNN

EN
T

0800000000021


PRIORITY \
PAGE 81 OF 92 Mid=208004501818 628183
CAVEAT IS) ©
HANDLE VIA

ACTION = (TRS)BON (1) GE (1)r 1B AL)» (OC (1) + IMB AL) » ISM IL) y FTE AL)

OUMF (1) QC (1) «SEM (-) UO (1) + XAA (1) + XLT (1)
CRO = 3085

PP RUEATRS

DE RUEHOS #2492/81 451559

UY CoC 22H

P 14155972 FEB 08

FN AMEMBASSY LAGOS

TO RUEHC/SECSTATE WASWOC PRIORITY 8127
INFO RUERUJA/USLO ABUJA 1711
RHEBARA/USOOE WASHDG

RUCPOOC/USDOC WASHDC
RUEATRS/DEPTTREAS WASHOC

aT
CONFIDENTIAL LAGOS gog4s7

E.0, 12958: OECL: 2/12/03

TAGS: EWRG ETTCe E1MV POV) AI

‘SUBJECT: NIGERIAN UP UPBEAT ON ENRON CONTRACT BUT
OBSTACLES REMAIN

REF: LAGOS B453 AND PREVIOUS GOTAL)
CLASSIF1ED BY ECON CHIEF MCCULLOUGH» REASON PARA 1.5 B.

1, (Ch SUMMARY. VP ATIKU ABUBAKAR ASSURED US THAT
PRICING AND OTHER ISSUES HOLDING UP THE ENRON CONTRACT
ARE BEING RENEGOTIATED AND WILL BE RESOLVED WITHIN

ONE MONTH, OPPOSITION TO THE CONTRACT FROM SEVERAL
FRONTS: HOMEVER REMAINS STRONG. THE HEAD OF THE BUREAU
OF PUBLIC ENTERPRISES OBJECTS [(b)(1)]

2. (SBU) ON FEBRUARY 11+ AMBASSADOR THADDELL AND THE
REVEREND JESSE JACKSON. VISITING NIGERIA AS THE HEAD OF
AN OPERATION/RAINEOW PUSH TRADE DELEGATION» PRESSED IN A
MEETING WITH VICE PRESIDENT ATIKU ABUBAKAR FOR THE
RESOLUTION OF THE STALEMATED EWRON CONTRACT (REFTEL).
OBASANJO ASSURED THE AMBASSADOR AND REVEREND JACKSON
THAT THE ENRON CONTRACT 1S HOT STILLBORN AND WILL BE
SUCCESSFULLY RENEGOTIATED IM TWO TO FOUR WEEKS. HE
STATED THAT TALKS UNDERWAY BETWEEN NEPA AKO ENRON ARE
PROGRESSING ON THE ISSUES OF PRICING AKD CONTRACT
DURATION, POWER MINISTER IGE: IN A SUBSEQUENT
ENCOUNTER: REMARKED TO THE AMBASSADOR THAT GENERAL
OPPOSITION TO THE CONTRACT 1S EBBING.

4, (C) ALSO ON FEBRUARY 11+ ECON CHIEF MET WITH MASIR
———

CONFIDENTIAL

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

MATL : #26183 M/iNATL

gor

XN

AAD ATIKU POLITICAL ALLIES AS WELL AS ETHNIC KINSMEM)
AS LEADING THE CHARGE AGAINST THE CONTRACT: WE ASKED EL-
RUFAL TO ARTICULATE RIS VIEWS. EL-RUFAI ACCEPTED THE
CHARACTERIZATION» THOUGH RE CLAIMED THE CONTRACT WAS IH
BIG TROUBLE FOR VARIOUS REASONS BEFORE HE ENTERED THE
FRAY. HIS CONCERNS, HE SAID» ARE:

[(b)(1) , (b)(4)]

CONFIDENTIAL

00500000000628


01/29/01 12:48 FAX 202 482 0170 ENERGY DIVISION jeyvve

5, DURING THE 1990S, THE MINISTRY OF ENERGY AND NATURAL
RESOURCES AWARDED HUNDREDS OF BUILD-OPERATE-TRANSFER
(BOT) PROJECTS TO TURKISH AND FOREIGN FIRMS. INLATE

1998, U.S. COMPANIES, ENRON AND EDISON MISSION COMPLETED
AND BEGAN OPERATION OF THE TRAKYA ELEKTRIK AND DOGA
ENERJI BOT GAS-FIRED POWER PLANTS, RESPECTIVELY. DURING
PRESIDENT CLINTON'S NOVEMBER 1999 VISIT TO TURKEY,
AMERICAN CONSORTIA SIGNED CONTRACTS FOR TWO MORE BOT GAS-
FIRED POWER PLANT PROJECTS. IN ADDITION, ANOTHER US.

FIRM CONTINUES TO TRY TO OBTAIN APPROVAL FOR A COAL-FIRED
POWER PLANT PROJECT.

PROJECTS (INCLUDE:
PROJECT: ESKISEHIR 200 MW NATURAL GAS-FIRED POWER PLANT
PROJECT

COMPANIES: AES, GVA

STATUS: CONTRACT SIGNED, COUNCIL OF MINISTERS APPROVED

THE PROJECT WITH A DECREE ON 11/3/00. COMPLETION OF

FINANCIAL PACKAGE EXPECTED IN EARLY 2001, WITH START OF
CONSTRUCTION TO FOLLOW IMMEDIATELY. COMMERCIAL OPERATION
EXPECTED BY END OF 2002.

PROJECT: 205 MW ZONGULDAK ALAPLI (ATAM ELEKTRIK) NATURAL
GAS-FIRED POWER PLANT PROJECT

(COMPANIES: GE POWER SYSTEMS AND GE CAPITAL

STATUS: CONTRACT SIGNED. COUNCIL OF MINISTERS APPROVED

THE PROJECT WITH A DECREE ON 10/28/00. COMPLETION OF
FINANCIAL PACKAGE EXPECTED IN EARLY 2001, WITH START OF
CONSTRUCTION TO FOLLOW IMMEDIATELY. COMMERCIAL OPERATION
EXPECTED BY END OF 2002.

PROJECT: $00 MW KONYA ILGIN POWER PLANT AND MINING
ECT

PROJI
COMPANIES: PSEG, NORTH AMERICAN COAL
STATUS: PSEG AND MENR HAVE A NUMBER OUTSTANDING ISSUES,

ON WHICH THEY DO NOT AGREE, AFFECTING THE FINANCIABILITY

OF THE PROJECT. PSEG SUBMITTED ITS FINAL PROPOSAL TO

MENR AT THE END OF OCTOBER 2000. PROJECT SHOWS LITTLE
MOVEMENT. THE EMBASSY CONTINUES TO ADVOCATE ON BEHALF OF
PSEG AND NORTH AMERICAN COAL.

‘TRANSFER OF OPERATING RIGHT PROJECTS

6. THE TURKISH ELECTRICITY GENERATION AND TRANSMISSION
COMPANY (TEAS) HELD A TENDER IN 1996, TO TRANSFER THE
OPERATING RIGHTS OF 12 EXISTING POWER PLANTS FOR 20 YEARS
TO THE TURKISH AND FOREIGN PRIVATE SECTOR. A CONSORTIUM
LED BY U.S. FIRM NRG WON TWO OF THE TEN. THESE PROJECTS
ARE:

PROJECT: 620 MW SEYITOMER COAL-FIRED POWER PLANT
COMPANY: NRG

STATUS: CONTRACT SIGNED. COUNCIL OF MINISTERS APPROVED
‘THE PROJECT WITH A DECREE ON 07/18/00. NRG INITIALED ITS.
AGREEMENTS WITH TEAS IN DECEMBER 2000 AND DELIVERED THEM
TO TURKISH TREASURY FOR REVIEW, COMPLETION OF FINANCING
EXPECTED BY THE END OF MARCH 2001.

PROJECT: 457 MW KANGAL COAL-FIRED POWER PLANT

(COMPANY: NRG

STATUS: CONTRACT SIGNED. COUNCIL OF MINISTERS APPROVED
‘THE PROJECT WITH A DECREE ON 08/09/00, NRG INITIALED ITS
AGREEMENTS WITH TEAS IN DECEMBER 2000 AND DELIVERED THEM
TO TURKISH TREASURY FOR REVIEW. COMPLETION OF FINANCING
EXPECTED BY THE END OF MARCH 2001.

7. THE TURKISH MININSTRY OF ENERGY AND NATURAL RESOURCES
(MENR) HELD A TENDER IN 1997, TO TRANSFER THE OPERATING

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CAVEATS) =
WANDLE VIA

ACTION = CURSDBOU CL + G1 CN) + FCM Ut) » LOC C1) » IMB AL)» INL C1) eT LAL,

QUME (1) QC (1) SEN(-)
CRC = A224

PTTCZYUW RUEMLPAL318 281183-CCCC--RUEATRS.
TINY COCCC 22H (CCY ADBLFS4F MS1S383 685)
P 2218832 MAR 93

FN AMENBASSY LA PAL

TO RUEHC/SECSTATE WASHOC PRIORITY $538
RUCPDOC/DEPT OF COMMERCE WASHOC

(NFO RUEHAC/AMEMBASSY ASUNCION 8226
RUEHBR/AMENBASSY BRASILIA B63
RUEHBU/AMEMBASSY BUENOS AIRES $951
RUEHPE/AMEMBASSY LIMA 3718
RUEHSG/AMEMBASSY SANTIAGO 2466
RUERSO/ANCOMSUL SAO PAULO 9315

a

CONFIDENTIAL LA PAZ 001318

CORRECTED COPY (CORRECTED TEXT THROUGHOUT)

USOC FOR 4331/1TA/OSA

£.0. 12958: BECL: OADR

TAGS: EIN ENRG: EPET. PGOW BL

SUBJECT: “THE REART OF SOUTH AMERICA LAW: BUSINESS
SUCCESS

REFS: A. STATE 49150; B, LA PAL 67795 C. $3 LA PAL
4906

1, CLASSIFIED BY AMBASSADOR WRINAK; REASONS: 1.5 OD}.

2, (SBU) SUMMARY: AFTER THREE MEEKS OF INTENSE
LOBBYING BY THE ENGASSY IM SUPPORT OF ENRON’ THE
BOLIVIAK CONGRESS ON MARCH 18 APPROVED THE LEY
CORAZON: OR “REART OF SOUTH AMERICA LAW ALLOWING
FOREIGN OWNERSHIP OF INFRASTRUCTURE WITHIN 50
KILOMETERS OF BOLIVIA'S BORDERS. THE LAW OPENS THE
WAY FOR ENRON TO CONSTRUCT THE GAS PIPELINE SPUR TO
CUIABAs BRAZIL REF Ch, OTHER BENEFICIARIES INCLUDE
WILBROS: WHICH PLANS A SOLIDS PIPELINE FROM LA PAZ TO
1L0r PERUS AND NRGs INC.» WHICH THROUGH 1TS LOCAL
SUBSIDIARY COBEEs HOPES 70 LIMK GOLIVIAN ELECTRICITY
GENERATORS AND THE BRAZILIAN GRID. END SUMMARY.

3.) THE LEY CORAZON, SO NANED BECAUSE IT IS
DESIGNED TO MAKE BOLIVIA TRE ENERGY, HYDROCARBONS, AND
TELECOMMUICATIONS BEART OF SOUTH AMERICA WAS

INTRODUCED INTO THE BOLIVIAN CONGRESS IM JANUARY WITH
STRONG SUPPORT FROM THE BANZER ADMINISTRATION. THE
LAW) REQUIRED BECAUSE ARTICLE 25 OF THE BOLIVIAN
CONSTITUTION PROHIBITS FOREIGNERS FROM OWAING OR
WAVING RIGHTS OVER LAND WITHIN S@ KILOMETERS OF THE
BORDER EXCEPT 1M THE CASE OF “NATIONAL NECESSITY:
WILL CREATE 11 CORRIDORS FOR INFRASTRUCTURE PROJECTS
LINKING BOLIVIA WITH ITS NEIGHBORS, THE MOST
HWMEDIATE BENEFICIARY WILL BE THE ENRON/SHELL
CONSORTIUM TRANSREDES: WHICH CAN KOW HOVE FORWARD WITH
CONSTRUCTION OF THE CUIABA GAS PIPELINE,

{(b)(1)]

$. (SBU) MAILE ENRON HAD THE MOST TO LOSE FROM DELAY
(THE BRAZILIAN PERHIT FOR THE ELECTRICITY GENERATION
PLAN IN CUIABA FIXED A SPECIFIC DATE IN OCTOBER bY
WHICH THEY HAD TO CONVERT FROM DIESEL TO GAS AND A
FINE OF UP 10 $580 908 FOR EVERY DAY ITS COMPLETION 1S
DELAYED BEYONG THAT ATE), OTHER US INTERESTS WILL
ALSO BENEFIT. ONE OF THE CORRIDORS WILL PERMIT
WILBROS’ CONSTRUCTION OF THE SOLIDS PIPELINE FROM LA
PAL TO 110) PERU REF BI. IN ADDITION» NRG» INC.» CO-
OWNER WITH THE SWEDISH VATTENFALL OF TRE BOLIVIAN
POWER COMPANY ICOBEE)» PLANS TO CONSTRUCT A GENERATING
PLANT MEAR THE BORDER TO SELL ELECTRICITY TO BRAZIL.
THE LAW ALSO GIVES THE GREEN LIGHT TO THE TELEPHONE
COMPANY ENTEL’S (OWNED BY THE ITALIAN FIRM STET)
FIBER-OPTIC LINK TO THE TRANSOCEANIC DROP IN PERU.

{(b)(1)]

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HANOLE VIA

ACTION = CTRSDBON (1) G1 (1). 1BRD (2) + 1B (1) « IDC (1) 6 1MB C1)» IMF (1)

UMMLAL) © PTE (1) OUMF (1) + QC (1) «SEN (+3400 (1)
CRE = 3354

PP RUEATRS

DE RUEHOS #0453 8411128

‘TINY Cocce 22H

P 1011262 FEB 88

FM AMEMBASSY LAGOS

TO RUEHC/SECSTATE WASHDC PRIORITY 8899
INFO RUERUJA/USLO ABUJA 1699
RHEBAAA/USDOE WASHDC

ar
CONFIDENTIAL LAGOS eagss3

£.0, 12888: DECL: 82/18/84
TAGS: EFI) ENRGs ECON: PGOW MI
SUBJECT: EMRON CONTRACT ADRIFT

CLASSIFIED BY ECON CHIEF MCCULLOUGH: REASON PARA 1.5 8.

[(b)(1) , (b)(4)]

2, WW) GON AND LAGOS STATE GOVERNMENT OFFICIALS (MOSTLY
UNNAMED) CONTINUE TO TRADE ACCUSATIONS IM THE MEDIA
‘ABOUT THE MERITS OF THE ENRON CONTRACT AND THE GON’S
DECISION TO SUBJECT IT TO A FORMAL REVIEW. THE
OPPONENTS CLAIMING ENDORSEMENT FROM TRE WORLD BANK:
ARGUE THAT TRE CONTRACT WAS NOT COMPETITIVELY BID: IS
TOO EXPENSIVE: AND UNFAIRLY PROTECTS ENRON FROM VARIOUS
FINANCIAL CONTINGENCIES.

{(b)(1) , (b)(4)]

2,

CONFIDENTIAL

eum

{(b)(1) , (b)(4)]

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nes? 1811267

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ACTION = (TRSIGE (1) TADB (1) e IBRD (1) + 1DB CL) s (DC C1) e HDD (1) « EL)
VIF (1) DTT (1) sOUME (1) 006 (1) SEM {-) U0 (1) XAA (Hh XD
CRC + F903

00 RUEATRS

DE RUERC #2688 1422313

INY CCCCE 228

OR 2223117 MAY 98

FM SECSTATE WASHDC

‘TO RUEHDG/AMEMBASSY SANTO DOMINGO IMMEDIATE 6018
INFO RUENCU/AMEMBASSY CARACAS $704
RUEHPU/AMEMBASSY PORT AU PRINCE 4628
RUEESP/AMEMBASSY PORT OF SPAIN 6682

ar

((b)(1)]

£.0, 12988: DECL: $/22/83

TAGS: ECOM KSUM ENRG

SUBJECT: BILATERAL WITH DOM REP POWER OFFICIAL

REF: (A) 98 SANTO DOKI 2127+ IB) 98 SANTO DOMI 2622

CLASSIFIED BY $ GALLOGLY: DIVISION CHIEF, EB/ESC/IEC/EPC
REASON 1.5 6)

'. [(b)(6)] WAS A PANELIST

AT THE INSTITUTE OF TRE AMERICA’S LATIN AMERICAN ENERGY
COMFERENCEs HELD MAY 18-19 IN LA JOLLA CALIFORNIA, HIS
PRESENTATION OVERVIEWED THE PRIVITIZATION PLAN FOR CDE.

1. WAN EB/IEC OFFICER SPOKE WITH [(b)(6)]ox THE
MARGINS OF THE CONFERENCES OFFERING COMPL INENIS OM HIS
PRESENTATION AXD EXPRESSING USG INTEREST AND
ENCOURAGEMENT FOR A VIABLE PRIVITIZATION OF CDE.

[(b)(6)pPreeci aren THe interest.

3, (©) EB OFF NOTED HOWEVER, THAT ONGOING OISPUTES WITH
INDEPENDENT POWER PRODUCERS ARE MOT LIKELY ASSISTING
COE'S EFFORTS TO ATTRACT FRESH INVESTMENT. DRAWING ON
DEPARTMENT GUIDANCE, EB OFF STRESSEO 10 [(b)(6) HAT
WASHINGTON VIEWED WITH SERIOUS CONCERN THE ACTIONS TAKEN
AT TRE AES COMPANY'S POWER PLANT. (AN ARHED BRIGADE ¥AS
DISPATCHED TO THE PLANT THE AFTERNOON OF APRIL 24)
GEFTELS). {(b)(6) DOWNPLAYED THE SIGNIFICANCE OF THE
INCIDENT: TO WHICH EB OFFICER REITERATED WASHINGTON’ S
SERIOUS CONCERN: ADDING ALSO AN EXPECTATION THAT
COMMERCIAL DISPUTES WOULD NOI BE INAPPROPRIATELY

M1D= 199814282651 67186
CDE’S GOOD FAITH EFFORT TO ARBITRATE THE SHITH-ENRON
DISPUTE IN THE INTERNATIONAL CHAMBER OF COMMERCE FORA {A
PROCESS NOW COMPLETED: ALTHOUGH YET WITHOUT FIMAL UL ING)
‘AND MOTED THAT THIS TYPE OF DISPUTE RESOLUTION SENDS A
POSITIVE SIGNAL TO POTENTIAL FOREIGN INVESTORS,
[(b)(6)}ereeo. APPRECIATED THIS OBSERVATION: BUT
LAMENTED ADDITIONAL PROBLEMS WITH SMITH-ENRON. EB OFFICER
STRESSED THE WORLD BAKK/IFC BROKERED NEGOTIATIONS BETVEEN
SHUTH-EMRON AND COE (THE PLANT 1S IFC FINANCED) PROVIDE
AN EXCELLENT OPPORTUNITY TO RESOLVE OUTSTANDING ISSUES
AMD ENCOURAGED CDE TO ENGAGE FULLY IN THESE TALKS.
[(b)(6)Jereeo axo iMDICATED THE SECOKD ROUND OF sucH
TALKS WOULD TAKE PLACE “MUY PROATO".

WL

5. IC) NOTE: Im A HAY 22 TeLcOM [(b)(1)]

6. @) wiTH[(b)(6)] £8 OFF TURNED To THE SUBJECT OF
HEMISPHERIC ENERGY COOPERATION: NOTING HOM COUNTRIES IN
THE HEMISPHERE ARE WOW ENGAGED IM A FRUITFUL DIALOGUE ON
ENERGY UNDER THE SUMMIT OF THE AMERICAS PROCESS. £8 OFF
NOTED THAT GOUR PARTICIPATION IN THIS PROCESS 1S WELCOME
AND HAY BE TIMELY GIVEN TS EFFORTS TO PRIVATIZE COE. £8
OFF TOD (b)(6) hE NEXT MEETING OF GOVERNMENTAL
REPRESENTAT| IE HEMISPHERIC ENERGY PROCESS WOULD
SE IN TRINIDAD IN JUNE AND NOTED THAT A GOOR REP WILL BE
INVITED TO TAKE PART. [(b)(6)] aSkED 10 Be KEPT
INFORMED ON THE suBJECT.

1, tC) COMMENT: HOPEFULLY. [(b)(6)]#iLt BRING Back
TO HIS BOSS AT COE THE MESSAGE ONCE AGAIN» THAT THE AES
INCIOENT DID NOT GO UNNOTICED IN WASHINGTON, AFTER HIS
PANEL PRESENTATIONS. THERE WERE HO QUESTIONS FROM THE
FLOOR DIRECTED AT OME POWER DEVELOPER TOLD £8
OFF THAT HE WAS WS aes WITH THE TERMS OF THE
CDE PRIVITIZATION AND. ALTHOUGH AE WAS UNAWARE OF THE
RAGING INVESTMENT DISPUTES IN TRE POWER SECTOR: HIS
COMPANY HAD ALREADY OECIDED TO LOOK ELSEWIERE, EXD

ADDRESSED IM THIS MANNER IN THE FUTURE. COMMENT.
vores PNG sais nen oF cee 0
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PAGE @2 OF 82 MID=199622881124 20348 1S/18882
PRESS KIT FOR JOURNALISTS ON THE PROJECT AND ABOUT THE
COMPANY. ENRON HAS YET TO TOUCH BASE WITH THE

AMERICAN CHANBER OF COMMERCE IN JOHANNESBURG TO DEVELOP

‘A BASE OF SUPPORT WITHIN THE AMERICAN BUSINESS Ah
COMMUNITY IN SOUTH AFRICA. ENRON HAS NOT TALKED TO

‘SOUTH AFRICAN INDUSTRY ANALYSTS INTERESTED IN BREAKING

THE STRANGLEHOLD OF THE CONGLOMERATES AND OPENING THE

LOCAL ENERGY MARKET. THE ENROK TEAM PROMISES TO SET

THINGS RIGHT, AND TO DO A BETTER JOB OF PUBLIC
CONFIDENTIAL SECTION 62 OF 02 MAPUTO 083605

JOHANNESBURG FOR FCS IC ARNOLD
DOE FOR BOBBISR: DOC FOR RODCERS

€.0. 12988: DECL: 68/14/06
TAGS: BEXPr EFIM, ECON: PGOV MZr SF
SUBJECT: WHAT WEXT ON THE ENRON PANDE GAS DEAL

RELATIONS, TO INCLUDE CULTIVATING THE MEDIA. RECENT
ARTICLES BY INFLUENTIAL JOURNALISTS LIKE SIMON BARBER
OF “BUSINESS DAY" ARE IN FACT MORE FAVORABLE IN TONE.
7. (C) MOZAMBICAM ENERGY MINISTER KACHAMILA APPEARS
TO HAVE HANDED ENRON A NINETY DAY EXTENSION BEYOND
DECEMBER 1996 TO CONCLUDE NEGOTIATIONS BY REQUIRING
THAT A CLAUSE TO THAT EFFECT BE INSERTED IN THE HOR
SIGNED WITH IDC. JF THE SAME CLAUSE IS INCORPORATED
(TRE EMW/ENRON HOAr THE TIMETABLE WILL EXIST FOR
REASONABLE NEGOTIATIONS FOR A FINAL DECISION ON THE
PIPELINE ON STRICTLY COMMERCIAL GROUNDS, [(b)(1)]

WCKINLE
1605

8423
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PAGE 82 OF 82 W10=198823800316 036824
OPECO/CANADIAN PETROLEUM BLOCK IN THE SOUTH CHINA SEA
PREVIOUSLY CONSIDERED, PETROVIETNAM HAS NOT YET GIVEN A

FARM COMMITHENT: B ote

UT EWROM IS CONFIDENT THE GAS
EVENTUALLY WILL BE AVAILABLEs EVEN THOUGH A PIPELINE
COSTING $250-302 MILLION WILL HAVE TO BE BUILT.

7, (S80) BALOWIN ADMITTED THERE WERE RISKS RELATED TO
FURTHER DONG DEVALUATIONS AND THE FACT THE CURRENT “FIVE
UNCLAS SECTION 62 OF 62 HANOI 082957

SENSITIVE

STATE PASS TO USTR/DAMOND/BELASSA: OP ICs AND EXIMBANK
STATE ALSO FOR EAP/BCLTVs EB/IFO/OlA: €8/1FD/O0F

STATE ALSO FOR AID/ANE

TREASURY ALSO FOR PATRICK STUART

SECDEF ALSO FOR ISA/EA/LSTERN

USOOE ALSO FOR 4431/MAC/IEP/OKSA/HPPHO

USOOC ALSO FOR ITA/TO/OTEA/JJANICKE AND ITA/TD/SIF/CMUIR
USDA/FAS ALSO FOR FAA/AO/SSAP/BEEGLEY AND KD/WAGNER
USDA ALSO FOR FAS/FAA/AO; FAS/ITP/ODAS FAS/ITP/ADD

E.0. 12958: N/A
TAGS: EWRGe EIN BEX?

SUBJECT: ENRON'S PROPOSED BOT POWER PROJECT AT SOC
TRANG

REF: HANOI 2236

CENT’ CAP OW THE RETAIL ELECTRICITY RATE SET BY THE
NATIONAL ASSEMBLY 1$ ACTUALLY DENOMINATED IN DONG.
EVALUATION WILL REQUIRE EITHER A HIGHER DONG PRICE PAID
BY CONSUMERS OR A LOWER DOLLAR PRICE PAID 10 ENRON.

3. (BU) COMMENT: ENRON HAS BEEN CRITICAL OF THE WORLD
BANK'S ROLE IN ELECTRIC POWER DEVELOPMENT IN VIETHAM?
BELIEVING THE BANK AND OTHER DONORS REWARO UNCOMPETI TIVE
BEHAVIOR. ENRON CONSIDERS WORLD BANK FINANCING OF SOE
PARTS OF A PROJECT TO BE VALUABLEs BUT NOT IF THE BANK
CROWDS OUT PRIVATE INVESTORS OR LEADS COUNTRIES TO THINK
THEY CAM MEET THEIR ENERGY NEEDS PRIMARILY THROUGH CHEAP
ODA FINANCING. SOME VIETHANESE OFFICIALS MAY PREFER ODA
FIWANCING IM THE HOPE IT COULD OFFER OPPORTUNITIES FOR
TULICIT ENRICHMENT: THROUGH INFLUENCING CONTRACT BIDS
AND AWARDS, WHILE BOT PROJECTS OFFER LITTLE OPPORTUNITY
FOR THAT,

$. (SBU) COMMENT CONTINUED: THE METHODS VIETNAM 1S
USING ARE MOT CONDUCIVE TO QUICK DEVELOPMENT OF ITS
ELECTRIC POWER SECTOR. THE PROCESS MAKES FOR LONG
DELAYS: POWER SHORTAGES: AND HIGHER COSTS IN THE LOKG

§1D=139823900316 36824
RUN. THE ROOT OF THE PROBLEM IS OFFICIAL FEARS OF THE
POLITICAL COST OF PASSING ON HIGHER FUEL ANO/OR
FINANCING COSTS AS THE DONG DEVALUES, THE GYM IS STILL
AGONIZING OVER WOW TO MININIZE THE EFFECTS OF THIS
INEVITABLE REALITY. THE GV HAS TO CHOOSE BETWEEN
SUBSIDIZING POWER CONSUMPTION BY CUTTING INTO EVN’S
‘REVENUE OR ALLOWING THE CONSUMER PRICE TO RISE. EVN IS
BARELY PROFITABLE NOW LOWER EVN REVENUE WOULD FURTHER
COMPLICATE EFFORTS TO INCREASE THE ELECTRICITY SUPPLY.
THE WORLD BANK'S CONCESSIONAL INTERNATIONAL DEVELOPMENT
ASSOCIATION (10A) CREDITS THEREFORE ARE EXTREMELY
ATTRACTIVE: BUT THE FACT DA FIMANCING HELPED THE PHU MY
2-1 PROJECT TO DELIVER ELECTRICITY AT A VERY LOW CosT
(REPORTEDLY 3 CEWTS/KWH) KAS CONTRIBUTED TO iNTERNAL
CRITICISH OF OTHER PROJECTS WHICH MUST CARRY HIGHER
COSTS» EVEN IF THE BANK HAS WO PLANS TO FIMANCE ANOTHER
PROJECT LIKE THAT. FINALLY: IT 1S NOT CLEAR WHETHER TRE
AGREED GAS PRICE OF USD 2.8 PER MILLION BTU MAS BEEN
WEGOTIATED WITH PETROVIETHAN’S FOREIGN PARTNERS,
DISAGREEMENTS OVER GAS PRICES, ALONG WITH OTHER ISSUES:
HAVE CAUSED LONG AND CONTINUING DELAYS IN DEVELOPMENT OF
OFFSHORE GAS DEPOSITS.
PETERSON
Br
#2957
Bas
NAN

UNCLASSIFIED

00500000000559

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ACTION = CTRSVEPO (1)+GU (1) TADB (2) 18RD (1) » 108.2) +106 (1) rP0BU2)

UL (ibs ETL C1) GG 2) SEM =) 00D
CR = F986

00 RUEATRS

OE RUEKDG GL898/81 1872222

TINY COCCE 22H

0 1722222 APR 98

FM AMENBASSY SANTO DOMINGO

TO RUEHC/SECSTATE WASHDC IMMEDIATE $741
INFO RUEKPU/AMEMBASSY PORT AD PRINCE 0745
a

CONFIDENT (AL SECTION GL OF #2 SANTO DOMINGO 081399

€.0. 12958: DECL: 64/16/2003

TAGS: ENG? OR

SUBJECT; SMITH-ENRON: SECOND MEDIATION SESSION NOT
HELD

REF: A. STATE 65977 B, SANTO DOMINGO 1972

WW) CLASSIFIED BY LINDA €. WATTr CHARGE O° AFFAIRES
ALF REASON: 1.50),

1, (G) SUMMARY: SMITH-EMRON IS CONTEMPLATING ISSUING
A SUSPENSION NOTICE TO SHUT THEIR ELECTRIC POWER
GENERATING PLANT DOWN BEFORE THE HAY 16 ELECTIONS WHICH
COULD RAVE A SERIOUS IMPACT BOTK ON THE ELECTIONS AND
THE COMPANY'S LOKG TERN RELATIONSHIP WITH THE FERNANDEZ
GOVERNMENT. THE SECOND MEETING IN THE MEDIATION
PROCESS SPONSORED BY THE WORLO BANK/ INTERNAT | ONAL
FIMAKCE CORPORATION, SCREQULED TO TAKE PLACE IN SANTO
DOMINGO ON MAY 16> WAS NOT HELD. WHILE CORPORACION
DOMINICANA DE ELECTRICIDAD (CDE) [(b)(1

ASSURED EMBOFFS THAT COE VOULD T) ( date
APPROACH IN THE TALKS) SMITH-ENROM COUNTERS THAT A CDE
PROPOSAL TABLED APRIL § SEEKS TO MOVE THE PROCESS BACK
TO "GROUND ZERO” AND TO RAISE NEW ISSUES, AN EMBARGO
ANPOSED AGAINST SMITH-ENRON IN A DOMINICAN COURT HAS
GIVEN COE A REASON NOT TO MAKE A PROMISED PAYMENT. THE
COMPANY HAS ALSO RECEIVED A SECOND STUNNING BLOW WITH A
USS2B MILLION AWARD AGAINST IT BY A LOCAL ARBITRATION
PANEL. END SUMMARY.

2, (©) ENBOFFS CALLED ON (b

OM APRIL 15. [([b)(7 {SURED EMBOFFS THAT COE
WOULD TAKE A REASONABLE APPROACH IN 1TS NEGOTIATION
WITH SHITH-ENRON, RE SAID THAT ONLY A FEW (TERS REMAIN
FOR NEGOTIATION. WEEN ASKED IF THE SECOND MEETING IN
TaE IFC-SPONSORED MEDIATION PROCESS WOULD TAKE PLACES
{(b)(1)] THAT HE Hao wat Norn som aire:

M10=199810782485 8s9
ENRON OR THE IFC AMD WAS WRITING FOR SHITH-ENRON TO
WOVE. HE ASSURED EMBOFFS THAT HE WISHED TO AVOID
CONFLICT WITH THE U.S. POWER GENERATORS.

MEDIATION AT A STagsTitt

4.) SMITIEMRON, ROVERS AD A DIFFERENT TALE TO
Tet. [(b)(6)]

CONTACTED TRE EMBASSY ON APRIL 16 TO REQUEST AM URGENT
MEETING WITH CHARGE. €CO/POL COUNSELOR AND ECONOFF

ALSO PARTICIPATED. [(b)(4) , (b)(6)]

{(b)(4) , (b)(6)]

Mal A
PLAINTIFF IN A LOCAL LEGAL ACTION AGAINST SHITH-ENRON
[(b)(6)] HAS NAMED ANY COMPANY WITH (b)(6)]
MAME CM IT IN THE ACTION: CATCHING SMITH-EWRON IN
NET. THE JUDGE IN THE CASE MOVED LAST WEEK TO EMBARGO
ALL PAYMENTS TO SMITH-ENRON,

{(b)(4) , (b)(6)]

A SECOND HEARING IN THE CASE WILL BE HELD OW
APRIL 28 AND {(b)(oypaas THE COMPANY BELIEVES IT
WAS SUFFICIENT GROUNDS TO PETITION TRE JUDGE TO REMOVE
THE ERBARGO. THIS MAY WELL DRAG OUT, ¥OVEVER) FURTHER
EXACERBATING THE FINANCIAL DRAIN OR SHITE-ENROM,

RANFINFNTIAL

WU

00500000000752


SAUDI BINLADIN
CINRMAN

As Deputy Chairman of the Sau

GROUP == ayagcuwll ial iv Gegona

OFFICIAL STATEMENT BY
THE SAUD BINLADIN GROUP

su 1_US. N

di Binladin Group | hereby issue the

following declarations on our position vis-a-vis the subject. Usama bin
Muhammad bin Awad bin Ladin (a.k.a. Usama bln Ladin);

i,

Usama bin Ladin possesses no legal or beneficial
interest whatsoever (directly or Indirectly) In Saudi
Binladin Group or any of Its subsidiaries, affillates or
other entitles which form part of the Saudi Binladin
Group.

Usamu bin Ladin possesses no interest whatsoever
(directly or indirectly) in any assets or any other
property belonging to the Saudi Binladin Group or
any of its subsidiaries, affiliates or other entities
which form part of the Saudi Binladin Group.

Usama bin Ladin possesses no contractual, business
Or any other relationship whatsoever (directly or
indirectly) with the Saud! Binladin Group or any of its
subsidiaries, affiliates or other entities which form
Part of the Saudi Binladin Group. *

Usama bin Ladin Is not funded (directly or Indirectly)
by the Saudi Binladin Group or any of Its

subsidiaries, affiliates or other entities which form

Part of the Saudi Binladin Group.

Issued in Jeddah, Kingdom of Saudi Arabia, on the 5" day of September, 1998.

nC SS
Yahla Muhammad Binladin

Deputy Chairman
Saudi Binladin Group

MYAL ~ 0.

Sap.

Sngculaeen Segoe

aay

et EMSC NVETA LSE = MTT = WOT; pS TTI Scutel~ Sea tS AN RLU » TAT Lap ANNA ge = TAL oe

CAR. No, 60204 + P.O.60n : s048

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Ane santa anaes

wok TOTAL PAGE.G2

00100000000320


Bin Ladin Company association with the Gaza Power Project The Saudi Bin Ladin
Group has no direct, and hardly any indirect, involvement in this project. It is a minonty
shareholder in the Arab Palestinian Investment Company (APIC), with less than 1%
equity ownership of APIC (contributing only $500,000 to the total APIC equity pool of
more than $50 million). APIC, in tum, is a member of the Palestinian Electric Company
(PEC), the consortium which is Enron’s partner in this project. APIC holds 6% of the
total project, a share that will be reduced when one-third of the total shares are offered on
the open market to private Palestinian investors. The Saudi Bin Ladin Group, therefore,
has less than a .06% interest in the Gaza Power Project. Consistent with its lack of
involvement in the project's parmership arrangement, Enron reports that the Saudi Bin
Ladin company has not participated in any aspect of the Gaza Power Project.

In conclusion There is no information indicating an existence of ties between Usama
Bin Ladin and the Saudi Bin Ladin Group. On the contrary, the evidence shows that the
company is reputable, with a well-regarded history of partnership with major American
companies, international companies, and the U.S. government. Furthermore, the Saudi
Bin Ladin Group plays no role in the Gaza Power Project since it is simply a 1% investor
in a minority investor in the project. In light of the above, OPIC may conclude that 1) the
Saudi Bin Ladin Group is untied to its notorious relative of the same name, and 2) that
the company’s indirect and minimal involvement in this project is not an issue that will
inhibit OPIC from financing the Gaza Power Plant project.

Support of the Government of Israel

Israeli support for the project. The Government of Israel, past and present, supports the
economic development of Gaza. Demonstrating this approval, Ariel Sharon, Minister of
Infrastructure under the previous Israeli Likud government, provided the Palestinians
with a May 1998 letter expressing Israeli support for the construction of a power plant in
Gaza. Although the original support for the project was contingent upon the construction
of an associated desalination plant, the current Israeli government has since reiterated its
support for this project without conditions. On October 21, 1999, [(b)(6)]

told the U.S. Ambassador in Tel Aviv that the Government of Israel

supported the project with the power plant alone. [(b)(6)] has asked that.Enron
consider a desalination plant in the future and Enron has promised to do so. Israel’s
current [(b)(6)]

_ has also expressed Israeli support for the project to the U.S. Embassy in Tel Aviv.

In addition, I spoke on this subject with Israeli Prime Minister Barak's [(b)(6)]

» on two separate occasions, in October 1999 and again in January
2000. During the January 2000 phone call, [(b)(6)] responded positively, He further
reasserted the GOI’s support in his most recent meeting with Ambassador Indyk. At that
time, [(b)(6)] confirmed the Israeli government's unequivocal support for the Gaza
Power Project. He noted that all of the plant's offtake would be bought by the PEC. He
also asserted the GOI's interest in seeing the construction of a desalination plant in later
phases of the project’s development, but confirmed that the GOI was no longer
conditioning its support on the construction of such a plant.

SENSITIVE BUT UNCLASSIFIED

00100000000313


01/29/01) =12:49 FAX 202 482 0170 ENERGY DIVISIUN ever

FINAL NEGOTIATION (INCLUDING SEVERAL ON THE LIST ABOVE)
WILL MEET TURKEY'S ENERGY GENERATION NEEDS UNTIL THIS
TRANSITION 1S COMPLETE, AFTER WHICH TIME COMPANIES WILL

BE FREE TO DEVELOP THEIR PROJECTS WITH CONSIDERABLY LESS
GOVERNMENT INTERFERENCE. WE EXPECT THAT U.S. COMPANIES
WILL CONTINUE TO PLAY A VERY LARGE ROLE IN MEETING
TURKEY'S ENERGY NEEDS UNDER THE NEW REGIME. END COMMENT.
PEARSON

BT
#8414

00500000001634


PRIORITY

PAGE @1 OF &2
CAVEAT (S) =
HANDLE VIA

M10=198932881528 56528

ACTION = CTRSIBOL (1) +GI (1b r IBRD CL)» 1CM C1) » 1OB (1) » 1OC C1) + 100 (1)

UTE) STE C1) ATT CL) / OUME (1) 20 (1) » SEM (+)
(RC = GAT

PP RUEATRS

DE RUEATY WSO66/91 2281319

ny ceoce 2H

P 2413192 NOV 99

FH AMENBASSY TEL AVIV

TO RUERC/SECSTATE WASHOC PRIORITY 4522
INFO RUCPOOC/USDOC WASHDC
‘AMEBAAA/USDOE WASHDC

RUEHEG/AMEMBASSY CAIRO 3752
RUEHAN/AMEMBASSY AMMAN 746
RUEHIN/AMCONSUL JERUSALEM 6224

er

CONFIDENTIAL SECTION 01 OF O2 TEL AVIV 015066

STATE FOR NEA AND NEA/IAIy SMECr NSC FOR REILLY/MALLEY

YSDOC FOR 4528/1 TA/MAC/ANESA/L/MVILL |AMSON
4520/ ITA/HAC/AMESA/L/PTHANOS
JNRI/ATACECS/O10/ ANESA/ TPARVER
4S20/ ETA/MAC/ANESA/L/TGILEMAN

PASS OPIC FOR MELISSA OBEGI» PAMELA BRACEY

€.0, 12988: DECL: 11/24/09
TAGS: ECOM: ENRG BEXP» EGr JO» ETRD» IS
SUBJECT: OCH MEETING WITH ENRON

REF: AD TEL AVIV 131395 B) JERU 3274

CLASSIFIED SY DEPUTY CHIEF OF MISSION RICHARD A. ROTH
FOR REASON 1.518) & i).

1, (Ch SUMMARY, ENRON REPRESENTATIVES HET WITH THE
EMBASSY TO REVIEW THE STATUS OF THE GAZA POWER PLANT
PROJECT» AND TO NOTE THEIR INTEREST IN BIDDING ON THE
NEXT ISRAELI INDEPENDENT POWER PLANT AND THE PIPELINE
FOR NATURAL GAS. WE PROMISED FCS ASSISTANCE WITH
ENRON'S NEW ENDEAVORS AND REITERATED THE NEED FOR ENRON
TO PUSH TRE PALESTINIANS TO PROVIDE ISRAEL WITH AN
ENVIRONMENTAL IMPACT STUDY AND SITE LOCATION AS REQUIRED
BY THE OSLO ACCORDS. ENRON ALSO DESCRIBED AN URGENT
NEED FOR OPIC TO COMPLETE AND APPROVE ITS FINANCING
PACKAGE. END SUMMARY.

GAZA POWER PLANT

2, IC) ENRON MIDDLE EAST PRESIDENT RICHARD BERGSIEKER,

CONFIDENTIAL

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

U/133L

ma)

Wibe198932801528 56525

ISRAELI CONSULTANT ULI HALEVIs ANERICAN BUSINESS COUNCIL
PRESIDENT NAG MCCLELLAND: J2.1 AND ENRON PROJECT MANAGER
ANDREW MAKI MET ON NOVEMBER 18 WITH OCH ECON COUNSELOR,
SENIOR COMMERCIAL OFFICER: AND EMGOFFS. THE DCM BEGAN
BY MOTING THAT IN HIS RECENT méeTING wiTH [(b)(1)

+ TWAS CLEAR THAT THE GO! NOW ACCEPTS THA
THE PALESTINIANS WILL HAVE A POWER PLANT, AND WANTS TO
SEE THE PROJECT SUCCEED. THAT SAIOs THE DCM REMINDED
ENRON THAT THE PA KAO YET TO COMPLY WITH THE Osto
REQUIREMENTS: THE SUBMISSION OF AN ENVIRONMENTAL IMPACT
STUOY AND NOTIFICATION OF THE PLANT SITE.

3, IC) BERGSIENER, NODDING IM AGREEMENT, SAID THAT HIS
TEAM WOULD BE WORKING WITH THE CONGEN IM JERUSALEM TO
FIND THE APPROPRIATE MANNER TO ENCOURAGE THE PA TO
SUBMIT THE REQUIRED ITEMS. HE NOTED THAT THE
ENVIRONMENTAL STUDY WAS OONE AND PROVIDED TO THE PA A
WEEK EARLIER, HE HOPED THE PA WOULD SUBMIT TRE ENTIRE
DOCUMENT {OVER SB PAGES) TO THE GOL AND NOT JUST A
SUMMARY. BERGSIENER EXPECTS NO ENVIRONMENTAL ISSUES TO
ARISE ONCE THE STUDY 1S SUBMITTED. AS THE PLANT WILL
MEET OR EXCEED WORLD BANK GUIDELINES FOR AIR EMISS!ONSr
WATER» AND NOISE. AS TO THE SITE LOCATION, BERGSIEKER
THOUGHT THAT ENRON MIGHT SUBMIT SPECIFICS OW THE SITE
LOCATION TO MATAK DIRECTLY.

4. (C1 ANOTHER ISSUE BERGSIEKER WAS ROPING WOULD SOON
BE RESOLVED WAS THE OPIC REVIEW. SERGSIEKER STRESSED
HOW IMPORTANT OPIC WAS TO ENRON, BECAUSE OF THE LEVEL OF
QUE DILIGENCE THEY BRING TO A PROJECT. HE NOTED THAT
THE INSURANCE PROCESS HAS BEEN RELATIVELY SMOOTH BUT
THE FINANCING HAS GONE SLOWER THAN HE EXPECTED. MAKK
INTERJECTED THAT IT MIGRT BE BEST IF ENRON MET FACE-TO-
FACE WITH CPIC TO DISCUSS ANY FINANCING ISSUES THAT NEED
TO BE RESOLVED.

S. IC) IN PREPARATION FOR FUTURE LOGISTICAL ISSUES LIKE
MOVING TURBINES AND FUEL» BERGSIEKER MET WITH [(b)(1)]

. BERGSIEKER EXPLAINED THAT ENRON'S AGREEMENT
STIPULATES THAT THE PA WILL SUPPLY ENRON WITH LOW SULFUR
DIESEL FUEL» UNTIL NATURAL GAS IS AVAILABLE, THIS FUEL
WILL HAVE TO COME IN THROUGH THE ISRAELI PORT OF
ASHKELON: AND TREN MOVE BY TRUCK TO THE POWER PLANT.
{(b)(1) HE CLEARy BERGSIEKER RECOUNTED» THAT IF

10 NOT COORDINATE CLOSELY WITH THE eu f(by(t |
HAD THE ABILITY “TO MAKE LIFE MISERABLE,” BERGSIEKE!
EMPHASIZED THAT HE WILL BE ASKING HIS PEOPLE TO KEEP THE
GO! INFORMED 1M ADVANCE OF ALL ISSUES THAT WILL REQUIRE
ISRAEL COORDINATION,

6 [(by( tyes TOLD BERGSIEKER THAT TRE
ELECTRICAL GRID 1A GAZA IS INCORPATIBLE WITH THE ISRAEL!

CONFIDENTIAL

00500000000556

W/L


8525 207030 _ Radio telephony apparatus (portable)
8528 129060 Color TVs (more than 63.5cm)

9703 22 1000 Motor cars (1000-1500cc)

8703 23 1000 Motor cars sedan (1500-3000cc)
8703 23 4000 — Station wagons (1500-3000cc)

8703 241000 Motor cars sedan (over 3000cc)
8703 23 2000 = Motor cars jeeps (over 2500cc)
8708999000 Other parts/accessories for cars

9006 539090 Other 35mm cameras (roll film)

il. ADJUSTMENT TARIFFS:

. Credited by IMF as done. Technically correct, but the manner in which it was done
leaves some tariffs at the higher “adjusted” levels (see previous reports).

IV. IMPORT CERTIFICATION PROCEDURES:

. Credited by the IMF as done. Passage of required legislation and issuance of necessary
implementing regulations is ongoing.

. The Korean government undertook an internal review of 54 laws and regulations related
to imports and import clearance, the results of which the Ministry of Commerce, Industry,
and Energy (MOCIE) announced in August on schedule, thus complying with the IMF
condition. According to Embassy Scoul, as of [May 6], 26 of the changes (whether by
legislation, enforcement decree, regulation, or guideline) were completed. Check with
Embassy/Econ

v. BINDING OF KOREA'S OECD COMMITMENTS ON FINANCIAL SERVICES
IN THE WTO:

. The Korean government bound its OECD accession commitments on financial services
with the WTO on January 1999. Certain cross-border services were excepted. Treasury
continues to negotiate with the ROKG, and reports that progress is being made.

. Korea submitted a revised GATS financial services schedule to the WTO in January 1999
that reflected most, but not all, of its OECD financial services commitments in terms of
commercial establishment. Korea chose, however, not to bind any of its OECD
commitments for cross-border provision of financial services. In response to Treasury's
concerns, Korea agreed in February to bind a number, but not all, of its cross-border
OECD commitments. Korea did not agree to any significant improvements in issues of
commercial establishment. In a follow-up letter, Treasury requested that Korea bind: a
stronger commitment for establishment of 100% owned foreign bank subsidiaries,

00500000002407


IMMEDIATE CONFIDENTIAL

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

PAGE 83 OF @3 ——ID=1899146@1141 e32g2i—26/12382 wiD=1999146@1141 A292 6/1235
TAGS: ENRG: ECOMs EAIDs EINDe ETRD» EAGRI BG a
SUBJECT: BANGLADESH'S CONTROVERSIAL “CRASH” POWER nue
PROGRAM . 4156
ha nak

18. (SBU) PRESS REPORTS HAVE STATED THAT SOME OF THE
PUBLIC SECTOR POWER PLANTS TO BE BUILT IN TRE CRASH
PROGRAM COULD POSSIBLY BE ADMINISTERED BY THE DRAKA \

SECRET TH TST — AO
i aT DISTRIBUTION

HH-ADDTEHONGTM THE. COVERNMENT-ONNED RURAL
ELECTRIFICATION BOARD (EG) HAS ISSUED A CALL FOR
PROPOSALS FROM THE PRIVATE SECTOR TO BUILD BETWEEN 13
TO 16 18 MW PLANTS.

12, @) BANGLADESH'S DEMAND PEAKS DURING THE EVENING
HOURS: WHEN LOADSHEDDING I$ RIGHEST. HOWEVER: SOME
AREAS ARE RECEIVING LESS POWER THAK TREY HEED
THROUGHOUT THE DAY (AS PERSPECTIVE: OMLY 15 TO 18
PERCENT OF BANGLADESH'S ESTIMATED 126 MILLION PEOPLE
HAVE ACCESS TO ELECTRICITY). APRIL IS TRE MONTH WHEN
IMCREASING LOADSHEODING STARTS IN EARNEST: AS
PRE-MONSOOM MEAT (ND THE AIR CONDITIONING NEEDS THAT
ACCOMPANY IT) AND SPRING IRRIGATION ELECTRICITY POWERS
ANY OF THE WATER PUMPS FARMERS NEED FOR RICE CROPS)
COMBINE TO PUT AN ALREADY-TEMUOUS SUPPLY/DEMAND BAL ANCE
EVEN FURTHER OUT OF KILTER. IN ADDITION TO THE
GENERATION SHORTFALL: POOR TRANSMISSION AND
DISTRIBUTION SYSTEMS MAKE THE SITUATION EVEN WORSE:
BREAKDOWMS IN TRANSMISSION LIMES AND TRANSFORMERS 1M
THE LAST SEVERAL WEEKS HAVE CAUSED HEAVIER THAN USUAL
LOADSHEOOING IN TRE CAPITAL OF CHAKA AND ELSEWRERE.

IMPLICATIONS FOR U.

{((b)(1)]

PoLicy

CONFIDENTIAL
00500000000659


ROUTINE CONFIDENTIAL

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

MID=19981S381117 onigi4 O2/14312

PAGE 82 OF 83
5. (0) CURRENTLY, EEGAT OF THE COUNTRY’S 23 GAS BLOCKS +...
ARE UNDER CONTRACT: BLOCKS 12+ 13 AND 14 TO OCCIDENTAL
PETROLEUM (WHICH HAS UNOCAL AS A S@/S@ PARTNER: OXY IS

CURRENTLY THE OPERATOR); BLOCKS 15 AND 16 70 A
CONSORTIUM OF CAIRN ENERGY (UK) AND ROVAL DUTCH SHELLS

BLOCKS 17 AND 18 TO OKLAND OFLs A SMALL U.S. EXPLORATION
COMPANY: AND BLOCK 22 TO UNITED MERIDIAN OF THE U.S.
OKLAND AND UNITED MERIDIAN ARE IK THE EARLY STAGES OF
THEIR WORK PROGRAMS AND ARE PRIMARILY PERFORMING SEISMIC
WORK TO HELP THEM SELECT WHERE TO DRILL FIRST» WHICH
THEY HOPE WILL BE SOMETIME 1M 1998. CAIRN» SHELL AND
U.S. COMPANY HALLIBURTON/BROWN AND ROOT HAVE ENTERED
INTO AN AGREEMENT TO DEVELOP AM OFFSHORE GAS FIELO IM
TAE BAY OF BENGAL. DELIVERY OF GAS FROM THAT FIELDy
CALLED SANGUr COULD TAKE PLACE IN MID-JUNE 1998. THE
THREE COMPANIES RAVE INVESTED APPROXIMATELY $248 MILLION
IN SANGU. WHILE CONSTRUCTION OF TRE WELL» PIPELINE: AND
PROCESSING PLANT ONSHORE HAS GONE WELLs THE COMPANIES
HAVE BEEN FRUSTRATED [(b)(4 ))

6. (0) OCCIDENTAL IS HAVING PROBLEMS WITH THE BDG AS
WELL LARGELY DUE TO A GAS BLOWOUT IM JUNE 1957) AND A
GAS LEAK IN APRIL 1998 (AT SEPARATE LOCATIONS IN THE
REGION OF SYLHET IN THE NORTHEAST OF BANGLADESH). THE
BLOWOUT AND ITS REPERCUSSIONS KEPT THE COMPANY FROM
MEETING SOME CONTRACTUAL OBLIGATIONS UNDER ITS WORK
PROGRAM, AND ITS APPLICATION FOR AN EXTENSION OF ITS
CONTRACT HAS BEEN PENDING SINCE THE FIRST PHASE EXPIRED
IN JANUARY 1998. OXY’S WOES WERE COMPOUNDED IN MAY 1998
‘WHEN A FORMER CONTRACT EMPLOYEE MADE REMARKS IMPLYIKG
THAT A GOOD MEASURE OF OXY’S PROBLEMS EXISTED BECAUSE
THE COMPANY FAILED TO PAY BRIBES, THE AMBASSADOR AND.
OTHER USG OFFICIALS HAVE SUPPORTED OCCIDEMTAL’S BID FOR

AN EXTENSIOMy [(b)(1 )

ANY CANCELLATION
WOULD LIXELY BE FOUGHT IM THE COURTS BY OXY, AND WOULD
WAVE AN ADVERSE AFFECT ON OTHER 10C’S DOING BUSINESS OR

MID=199815301117 Q718t4 —BR/RABIE

CONTEMPLATING DOING BUSINESS 1M BANGLADESH.

POWER SECTOR

1, (0) BANGLADESH DOES NOT GENERATE SUFFICIENT
ELECTRICITY TO MEET 17S NEEDS» WITH AN ESTIMATED
‘SUPPLY-DEMAND GAP OF SEVERAL HUNDRED MEGAWATTS Of.
INSTALLED CAPACITY 1S 2988 MWe BUT ACTUAL OUTPUT IS
APPROXIMATELY 1888 MW. DEMAND 1S ROUTINELY AT LEAST
‘2208 TO 2488 Mi) WITH LOADSHEDDING HINDERING INDUSTRYs
AGRICULTURE AND COMMERCE. ONLY ABOUT 1S PERCENT OF THE
COUNTRY’S 127 MILLION PEOPLE HAVE ACCESS TO
ELECTRICITY. THE COUNTRY’S POWER DEVELOPMENT BOARD
(PDB) 1S CURRENTLY RESPONSIBLE FOR ALL GENERATION AND
MOST OF |TS TRANSHISSION AND DISTRIBUTION. SERVICE AND
DELIVERY ARE POOR: HOWEVER) AND NOK-TECHNICAL SYSTEM
LOSS (1.€.+ TREFT) 1S AROUND 35 PERCENT.

8. (C)_ THE SECTOR'S PROBLEMS LED THE BDG TO OPEN THE
POWER SECTOR TO INDEPENDENT POWER PRODUCERS ‘1PPS) IN
RECENT YEARS. THE BOG NOW HAS SEVERAL OUTSTANDING
TENDERS FOR GAS-POWERED PLANTS WHICH) WHEN COMPLETED:
WILL PRODUCE ABOUT 1388 MW. AES (WS) 1S CURRENTLY

NEGOTIATING WITH THE BOG OM A 368 MW PLANT TO BE BUILT,
OWNED AND OPERATED BY AES> AND 1S ALSO AWAITING
NOTIFICATION TO NEGOTIATE WITH THE BOG FOR A 4S0 MW
PLANT. THE BDG HAS ALSO SIGNED CONTRACTS WITH FOUR
COMPANIES TO BUY BARGE-NOUNTED POWER FOR FIFTEEN YEARS:
TWO OF THE COMPANIES, SMITH COGENERATION AND MEW ENGLAND
POWER: ARE FROM THE U.S.» AND A THIRD? WARTSILA OF
FINLAND: IS IN EQUITY DISCUSSIONS WITH COASTAL POWER OF
HOUSTON, MIDLANDS .K, BUT OWMED BY CINERGY OF THE
U.S.) WAS THE LOW BIDDER ON A 188 MW GAS PLANT IN
WESTERN BANGLADESH» BUT HAS NOT YET SEEN INVITED TO
MEGOTIATE. UNOCAL HAS PROPOSED TO BUILD ABOUT 368 KW AS
PART OF ITS WESTERN REGION IMTEGRATED PROJECT» WHICH
WOULD DEVELOP THE COUNTRY’S ONLY GAS FIELD IN THE WEST
‘AND BUILD PIPELINES TO HOVE GAS WESTWARD TO FUEL SEVERAL
‘SHALL AND MEDIUN-SIZED PLANTS. UNOCAL HAS NOT YET BEEN
AVARDED A CONTRACT TO CARRY OUT ITS PROJECT, HOWEVER)
AND THE BDG 1S DELIBERATING OM HOW TO HANDLE THIS
UNSOLICITED PROJECT, WHICH SHELL AND OTHERS KAVE OPPOSED.

WOW TO PAY FOR THE GAS

$3. (C) GAS COMPANIES SHARE 1OCS CONCERNS ABOUT THE
BOG'S ABILITY TO PAY TREM FOR THEIR POWER: THE CONTRACTS
BEING NEGOTIATED CALL FOR IPP’S TO BE PAID IK DOLLARS.
THE BOG HAS REALIZED IT COULD BE 1M SERIOUS FOREIGN
EXCHANGE DIFFICULTIES IF IT PAYS FOR ELECTRICITY IN

CONFIDENTIAL

00500000000721


LaKritz, Robb

From: Ticknor, Scott B [TicknorSB2@state.gov]

Sent: Monday, September 10, 2001 8:26 AM

To: ‘Geetha.Rao@do.treas.gov'

Ce: Good, David P; Monie, Krishna S; 'Robb.LaKritz@do.treas.gov’; ‘Larry
McDonald@do.treas.gov’; 'Meg.Donovan@do.treas.gov'; Rapson, Robert G(NEW DELHI)

Subject: Ken Dam Schedule

Importance: High

Geetha, thanks for the green light. We have had a productive day - got
confirmation for the meetings at NSDL, ICICI, SEBI, the RBI meeting and the
Amcham lunch (see schedule below). The invitees for the Amcham lunch
include reps for American International Group, Arthur Anderson, Bank of
America, Citibank, Dow Corning, Exxon, KPMG, Morgan Guaranty Trust Company
of NY, Morgan Stanley India, Pfizer, Principal Financial Group, Proctor and
Gamble, Templeton Asset Managemetn Pvt, Wyeth Ayerst International, Enron
India. It's a good mix of banks, brokers/asset managers, and a variety of
real economy sectors (energy, oil, pharma, consumer products, business
consulting). Should be a good group (not all the above will necessarily be
able to come}.

CNN does not have a person in Mumbai so Mr. Dam would have to go wtih CNBC,
which I have touched base with and is eager to do the interview. Business
Week's rep tells me she is interested in doing the interview, but can not
promise a story from the interview - it would likely be on background only
unless something particularly interesting came out of the inverterview.
Would this be acceptable to you?

We are working on a program for Mrs. Dam and should be able to finalize
something tomorrow. We hope to get a top woman entrepreneur in Mumbai to
erganize a lunch with a diverse group of people in the business/social
sector. In the morning we would plan a tour of the city. Shall we send a
draft schedule to you in Washington tomorrow or in Delhi (the group departs
Sept 11, right?)?

Below is a cost estimate.

Estimated cost for Kenneth Dam's visit to Mumbai

Hotel Rooms (ITC Maratha Shearaton)

3 single rooms for 2 nights: $ 900

1 double room for 2 nights: $ 350

(Cost includes breakfast and transport to and from the airport)

Expediting services: (overtime for FSN, taxi claim and porters)

On arrival: (Sunday) $ 31
On departure: $ 30

Overtime for the congen driver:

2 hours overtime and one way taxi claim: $ 9
Milage for vehicles: $40
Total estimate: $ 1360

Schedule

September 16

00100000000012


IMMEDIATE

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PH 622-2222 RM 1121/MT

PAGE 61 OF 83 M1D=199889621535 843798
CAVEAT IS) =

ANOLE VIA

ACTION © (TRSEPO (1) GEL) 4 1BRD C1) + 108 (1) 10 C1) + 100 CL) « Hk gL)

ATE 1) ec VTE (1) OUME (1) 00 (1) « SEM (-) 200.01)
CRC = 8210

00 RUEATRS

OE RUEHDG #1714/61 2961856

INY COCCE 22H .

0 GG18582 APR 98

FIL ANEMBASSY SANTO DOMINGO

TO RUEHC/SECSTATE WASHDC IMMEDIATE $587
INFO RUEHPU/AMEMBASSY PORT AU PRINCE G714
at

CONFIDENTIAL SECTION 1 OF 82 SANTO DOMINGO BBI714

CORRECTED COPY - CORRECT DECL

£.0. 12958: DECL: 24/05/2083

TAGS: EWRGr DR

‘SUBJECT: ELECTRICITY WRAP-UP: PRIVATIZATION AND
RELATED ISSUES

REF: SANTO DOMINGO 1872

) alta BY {IMDA E, WATT: CHARGE D’ AFFAIRES

1, 2) SUMMARY: POTENTIAL BIDDERS IM THE FIRST
PRIVATIZATION OF A DOMINICAN STATE-OWNED ENTITY) THE
ELECTRICITY COMPANY: PRESENTED THEIR PRE-QUAL IFICATION
DOCUMENTS OM MARCH 25. THE BIDDERS WILL BE VYING FOR
FIVE PIECES OF A VERY TROUBLED PRODUCT. CDE'S OW
GENERATORS AND THE NATIONAL DISTRIBUTION NETWORK ARE IK
POOR REPAIR WHILE ITS RELATIONSHIP WITH THE PRIMARILY
U.S. INDEPENDENT POWER PRODUCERS <IPPS) IS ALSO
TROUBLED, CDE’S DEBT TO THE IPPS IS BELIEVED TO BE
APPROXIMATELY {(b)(1)] ENO SUMMARY.

coe eT PROCESS FINALLY BEGINS
1. ® om sch ‘261 PRESIDENT FERNANDEZ PRESIDED OVER A
CEREMONY IN WHICH THE POTERTIAL BIDDERS IK THE
PRIVATIZATION OR “CAPITALIZATION OF THE STATE-OWNED
ELECTRICITY COMPANY, COMPANIA DOMINICANA DE
ELECTRICIDAD (CDEI+ PRESENTED THEIR PRE-QUALIFICATION
DOCUMENTS. EIGHTEEN OF 45 COMPANIES THAT SOLICITED BID
PACKAGES SUBMITTED DOCUMENTS. THE COMPANIES/CONSORTIA
PRESENTING THEIR CREDENTIALS INCLUDED:

ELECTRICITE DE FRANCE
EWROM CARIBE

WiD> 199889681535 043798
CHILGENER
ANOCO POWER DIVISION CO.. LTO,
IBERDROLA
UNION FEKOSA
SAUR INTERKATIONAL
COASTAL TECHNOLOGY
CARIB POWER DIVISION
EMPRESAS EMEL/PP&L GLOBAL
ENDESA INTERNATIONAL
CONSTELLATION POWER INTERNATIONAL MV.
‘SOUTHERN ENERGY: FNC.
AES DISTRIBUCION DOMINICANA
TRACTEBEL: S.A,
ABS ENERGY VENTURES
CORPORACION EDC: SACA
CONSORCIO IES-LUZ FUERZA

THREE OF THE U.S. COMPANIES ALREADY PRODUCING POWER IN
THE DOMINICAN REPUBLIC (I.E. COASTAL TECHNOLOGY: AES
DISTRIBUTION DOMINICANA: AND ENRON -- ALBEIT A
DIFFERENT PART OF THE ENRON CORPORATE STRUCTURE)
PRESENTED THEIR CREDENTIALS AS DID AT LEAST TAREE OTHER
U.S. FIRKS,

J. WW) THE PRE-QUAL IFICATION PEASE I$ SLATED TO ENO ON
APRIL IS WHEM THE CREP (THE COMISLON OE REFORMA DE LA
EMPRESA PUBLICA) I$ DUE TO PUBLISH THE LIST OF PRE-
QUALIFIERS. ALTHOUGH THE TIMING FOR SUCCESSIVE PHASES
WAS HOT BEEN SPELLED OUT CLEARLY: POTENTIAL BIDDERS NOW
EXPECT TO PRESENT THEIR OFFERS IN JUME OR JULY WITH THE
ASSESSMENT PROCESS LIKELY TO BE FINISHED 1K AUGUST.

4. W) AT THE END OF THE PRIVATIZATION PROCESS. TRE
PUBLIC ELECTRICITY. SECTOR WILL BE BROKER INTO SEVEN
COMPANIES: TWO OF WHICH -~ TRANSMISSION AND
HYOROGEMERATION -~ WILL REMAIN IN THE HANDS OF TRE
GOOR. IT 1S ANTICIPATED THAT FIVE DIFFERERT BIODERS
WILL SUCCESSFULLY BIO OM THREE DISTRIBUTION COMPANIES
(WORTHERN. SOUTHERN AND EASTERN DISTRICTS) AMD TWO
GENERATION COMPANIES (THE CDE-RUM HAIMA AND 1TABO
GEWERATORS WILL BE SPUN OFFI.

REGULATORY STRUCTURE: SUPERINTENDENCIA DE ELECTRICIOAD

S. W) ONE OF THE IMMEDIATE OUTCOMES OF THE RECENT
WATIONAL DIALOGUE WAS PRESIDENTIAL DECREE WO, 118-98
ESTABLISHING A NATIONAL SUPERINTENDENT OF ELECTRICITY
(SUPERINTENDENCIA DE ELECTRICIDAD) WITHIN THE
SECRETARIAT OF INDUSTRY AXD COMMERCE. THE PROMULGATION
OF THIS DECREE ESTABLISHING A REGULATORY STRUCTURE FOR
THE SECTOR HAS SERVED TO ALLAY SOME OF TRE ANXIETY OF
WOULD-BE INVESTORS ABOUT THE GOVERNMENT'S INABILITY TO

CONFIDENTIAL

00500000000783

6/7527


ROUTINE

CONFIDENTIAL

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

PAGE @2 OF §2

{(b)(1)]

W1D=19991248848S

CONFIDENT IAL SECTION 62 OF 82 MAPUTO 882174

PRETORIA PASS JOHANNESBURG FOR FCS - MARNOLD
PRETORIA FOR ECON - LBRUDVIC

ABIDJAN FOR USED/AFDB

USDOC FOR 4S18 ITA/IEP/ANESA/OA/DROGERS

USOC FOR ADVOCACY CENTER - SBALLARD

TREASURY FOR OASIA - JRALYEAr NEPSTEIN: EBARBER
DEPT PLEASE PASS TO USTR - RWRITAKER+ WVALLE
DEPT FOR EB/IFOs AF/Ss AF/EPS - MHEATH

DEPT PLEASE PASS TO USTDA - MNEWELL» JRICHTER
DEPT PLEASE PASS TO EXIMBANK - AENMET, CMORIARITY
DEPT PLEASE PASS TO OPIC - RRUGA: JPOLAN

£.0. 12958: DECL a4

TAGS: EINVs EPETs EMRG: EFIM: ECON) MZe US
SUBJECT: ENRON SIGNS GAS FRAMEWORK AGREEMENT THAT
GIVES GREEN LIGHT TO $2.5 BILLION MISP PROJECT

((b)(1)]

G. IC) INVITED GUESTS TO THE SIGNING CEREMONY INCLUDED
THE COUNTRY REPRESENTATIVES FOR SASOL AND ARCO. THE
GROUP STUCK AROUND AND MADE A POINT OF TALKING
INDIVIDUALLY WITH EWROM REPRESENTATIVES. THE BRITISH
BORN SASOL REP WANTED TO TALK: BUT WOULD HAVE TO CLEAR
IT WITH SOUTH AFRICA FIRST. IN TRE WAKE OF TRE
ANNOUNCEMENT OF ARCO’S MERGER WITH BP/AMOCO BY THE END
OF THIS YEAR (SEPTEL), ARCO REPS SEEMED PRETTY OPEN TO
TALKING WITH EWROM, LOOKING SUSPICIOUSLY LIKE JOB
SEEKERS.

7. (C) WITH AGREEMENTS IN HAND: ENRON HAS TWO AND HALF
YEARS TO SEARCH THE WORLD FOR PARTNERS MADE OF STEEL.
EWROM AND A REACTIVATED IDC WOULD PROVIDE HALF THE
TOTAL EQUITY IM THE PROJECT. WITH THE REST COMING FROM
STEEL OPERATORS AND TRADERS. BUT THE LIST OF
POTENTIAL COINVESTORS HAS SUFFERED FROM THE ASIAN FLU,
GONE ARE THE TAIWANESE AND KOREANS. REMAINING ARE

i398

04/86272 W1D=199912488455, 19381
JAPANESE STEEL GIANT MITSUI AND THE EUROPEAN TRADING
COMPANY DUFERCO: IT IS HOT CLEAR THAT THERE ARE MANY
OTHERS. THE PROJECT MAY NOT NEED THEM, DUFERCO
~ ‘SIGHED A LETTER OF INTENT WITH ENRON IN MAPUTO IN
1998. AKD MITSUI WAS SERIOUS ENOUGH TO VISIT
MOZAMBIQUE BEFORE TELLING EMRON THAT IT WANTED THE GAS
FRAMEWORK AGREEMENT SIGNED BEFORE CONTINUING TALKS.

ENRON STILL WAS A LOT OF WORK T0 D0. [(b)(1)]

A

CURRAN
aT
nit
43EE
WANN

CONFIDENTIAL

00500000000838

4/86211


ENSITIVE BUT. LASSIFIED

in 2000. The quotas must be progressively eliminated by January 1, 2005. Ex-Im is open
across the board in India, but India has never been a large Ex-Im market (note that the
Enron/Dabho! problem may preclude additional Ex-In/OPIC assistance if not speedily
resolved). India has never been a candidate to negotiate a BIT.

International Financial Institutions - IMF. India does not have or seek an IMF
program. MDBs. IDA-Blend; India is an active borrower from both the World Bank and
the ADB. India has its largest exposure to IDA ($19 billion) of any World Bank member,
and is one of the top 6 borrowers from IBRD ($7 billion). The World Bank’s lending
program for India is $3 billion ($2 billion IBRD, $1 billion IDA) over the period 2002-
04. Scope for supporting additional lending is limited. Indeed, by FY05, IBRD lending
must be scaled back to avoid exceeding India’s lending ceiling. Scope for additional IDA
lending is limited by India’s slow implementation and poor track record of success.

Debt Options - India is able to service its debt and is unlikely to request debt relief from
the USG. Outstanding debt to the USG is $2 billion; external debt burden is 25% of GDP.
The estimated budget cost to reduce 100% of India’s debt would be $1.7 billion; the cost
of an illustrative Naples terms reduction would be roughly $570 million (unilateral) and
$540 million (multilateral). In FY 2002, payments of $348 million are coming due. The
cost to reschedule this amount bilaterally is $42 million, assuming a 4.5% interest rate.

SENSITIVE BUT UNCLASSIFIED

00500000002346


Disassociation with Usama Bin Laden Over the years, the Saudi Bin Ladin Group has
repeatedly disassociated itself both publicly and privately from Usama Bin Ladin.
Usama is the only son of over thirty brothers who is excluded from the family business.
In 1994, Bakr Bin Ladin, the head of the Saudi Bin Ladin Group, stated publicly:

"I and all the members of the family--who number more that fifty: people--express our
great regret, sorrow, and disapproval of all, of Usama's behavior, which we neither
control nor condone. In light of the fact that Usama has been living outside the Kingdom
of Saudi Arabia now for more than two years and all of the efforts we have made to bring
him back to the correct path, we consider him singularly responsible for his statements,
actions, and behavior, if in fact he did them.”

Furthermore, in September 1998, Yahia Muhammad Bin Ladin, the company's Deputy
Chairman, issued the following declaration (see attached Annex 1):

“As Deputy Chairman of the Saudi Binladin Group, I hereby issue the following
declarations on our position vis-a-vis the subject, Usama bin Muhammad bin Awad Bin
Ladin:

1. Usama Bin Ladin possesses no legal or beneficial interest whatsoever
(directly or indirectly) in Saudi Binladin Group or any of its subsidiaries, affiliates or
other entities which form part of the Saudi Binladin Group.

2. Usama Bin Ladin possesses no interest whatsoever (directly or indirectly)
in any assets or any other property belonging to the Saudi Bin Ladin Group or any of its
subsidiaries, affiliates or other entities which form part of the Saudi Bin Ladin Group.

<5 Usama Bin Ladin possesses no contractual, business or any other
relationship whatsoever (directly or indirectly) by the Saudi Bin Ladin Group or any of
its subsidiaries, affiliates or other entities which form part of the Saudi Bin Ladin Group.

4, Usama Bin Ladin is not funded (directly or indirectly) by the Saudi Bin
Ladin Group or any of its subsidiaries, affiliates or other entities which form part of the
Saudi Bin Ladin Group.”

Treasury Department sanctions assessment OPIC and State have also received
assurances from the Office of Foreign Asset Controls that there are no sanctions imposed
on this company by the U.S. Treasury Department. If OFAC had reason to believe that
the company is linked to Osama Bin Ladin, then the company would, as a result, be
subject to USG sanctions.

SENSITIVE BUT UNCLASSIFIED

00100000000312


IMMEDI ATE

PAGE 82 OF 83 MID=199889681535 84396
WIM APPROVAL OF THE ELECTRICITY LAW FROM THE CONGRESS.
OME POTENTIAL BIDDER COMMENTED TO ECONOFF, “HOW CAN WE

BIO IF WE OON'T KNOW HOW THE PRICE OF THE ELECTRICITY ~tr

IM TRE SYSTEM WILL BE CALCULATED, WHAT TRE CONDITIONS
WILL BE FOR SELLING TO CUSTOMERS: AND (MOST IMPORTANTLY
IN THE CURRENT DOMINICAM CONTEXT) WHAT KIND OF SUPPORT
THE POTENTIAL INVESTOR WILL RECEIVE FROM THE GOVERNMENT
IF IT MOVES TO CUT OFF SERVICE.”

COMF IDENT EAL SECTION @2 OF 82 SANTO DOMINGO B81714

CORRECTED COPY - CORRECT DECL

E.0. 12988: ECL: 24/06/2883

TAGS: ENRG: OR

SUBJECT: ELECTRICITY WRAP-UP: PRIVATIZATION AXD
RELATED ISSUES

REF; SANTO DOMINGO 1872

‘A DESIRABLE PRODUCT?

6. W) EVENTS SINCE EARLY FEBRUARY HAVE SERVED 10
UMDERLIME THE KMIFE EDGE OM WHICH COE NOW OPERATES. A
SEVERE STORM ON FEBRUARY 4 -- BY COINCIDENCE THE SAME
OAY PRESIDENT FERNANDEZ WAS SCHEDULED TO ATTEND THE
CEREMONIAL OFF-LOADING OF THE FIRST FOUR OF THE FIVE
JANW GENERATORS PURCHASED FROM GEC ALSTROM (FRANCE) --
CAUSED EXTENSIVE DAMAGE 10 THE HATIONAL GRID. AN
ENERGY SECTOR CONTACT COMMENTED TO ECONOFF IN THE STORM
AFTERMATH THAT THE GRID 1S SO UNSTABLE THAT “JUST
HUMIDITY,” MUCH LESS SEVERE WIND AND RAIN, CAN CAUSE A
CASCADE AFFECTING THE ENTIRE GRID. {1 TREN TAKES COE A
FULL GAY TO RE-BALANCE THE SYSTEM. THIS INSTABILITY IN
THE RATIONAL GRID» ON TOP OF A DROUGRT-INDUCED DECREASE
IN THE GENERATION OF HYDROPOWER AND PRODUCTION PROBLEMS
OM THE PART OF INDEPENDENT POWER PRODUCERS SMITH-ENROW
AND AES: HAVE SERVED TO INCREASE THE DAILY BLACKOUTS
SUFFERED THROUGHOUT THE COUNTRY. THESE PROBLEMS ARE
COMPOUNDED BY CDE'S WELL-KNOWN ADMINISTRATIVE
SHORTCOMINGS: FAILURE TO ADEQUATELY METER TRE
ELECTRICITY IT SELLS» FAILURE TO COLLECT FROM 11S
CUSTOMERS ETC.

7. @) COE*S TWO PRINCIPAL PLANTS: ITABO 1 AND 11
REQUIRE GEMERAL MAINTENANCE THAT COULD LAST EIGHT
MONTHS OR HORE, THE TWO PLANTS EACH HAVE AN INSTALLED
CAPACITY OF 125HW BUT ARE CURRENTLY RUNNING AT 88-S@HY.
ITABO | RASN'T BEEN OVERKAULED SINCE 19917 ITABO 11
SINCE 1984, THE FIVE UKITS AT HAIMA TELL MUCH THE SANE

CONFIDENTIAL

DEPT TREASURY GOMCEN
PH 622-2222 RM 1121/MT

1D=199889681535 338
AGH. ONE S4HW UNIT 1S REPORTEDLY BEYOND REPAIR.

8. W) THE GOOR 1S PINNING ITS HOPES FOR AN IMPROVEMEMT
IW THE ELECTRICITY SITUATION ON TRE FRENCH 34KW
GEMERATORS, TWO OF WHICH ARE NOW EXPECTED TO BE
INSTALLED IN SAN PEDRO DE MACORIS IN ADVANCE OF TRE MAY
ELECTIONS, INDUSTRY SOURCES: HOWEVER) ARE HIGHLY
SKEPTICAL: SAYING THAT THE FIX IS-CIXELY TO A SHORT
TERN ONE. THEY WARN THAT THE INCREASED FUEL BILLS FOR
THE MEW GENERATORS WILL SIMPLY INCREASE CDE’S CosTS
WHILE THE RISK TRAT THEY WILL BE RUN INTO THE GROUND IM
‘SHORT ORDER THROUGH LACK OF MAINTENANCE I$ HIGH.

CURRENT STATE OF TRE US IPP’

IM THE SCAPEGOAT SWEEPSTAKES

3. IC) AES DOMINICAN POWER PARTNERS JOINED SHITR-EMRON
OM THE GOVERNMENT'S BLACK LIST WHEN BOTH ITS GENERATORS
FAILED IN FEBRUARY. THE GOOR FOCUS WAS SOLELY IN
GETTING THE PLANT BACK INTO OPERATION AS QUICKLY AS
POSSIBLE AND KEEPING IT GOING THROUGH THE HAY ELECTIONS
WITH LITTLE ACKROWLEDGEMENT OF THE TECHNICAL CAUSE OF
THE FAILURE. BOTH UNITS WERE BROUGHT BACK ON LINE AS
OF MARCH 26. AES: HOWEVER: ALSO INFORMED ECONOFF THAT
TWE PAYMENT BACKLOG WITH CDE 1S AGAIM NEARING THE
CRITICAL LEVEL. ANOTHER U.S. IPPs COASTAL POWER, HAS
‘ALSO APPROACHED THE EMBASSY WITH THE INFORMATION THAT
ALTHOUGH IT HAS BEEN A GOOO SOLDIER -- GENERATING
ELECTRICITY AT COE DEMAND AND KEEPING A LOW PROFILE -~
COE HAS RESPONDED BY RUNNING UP OVER [(b)(1)] TM
UNPAID BILLS.

(C) WHEN ASKED WHY THEY WOULD COMTIMUE TO CONSIDER
IMVESTING IN TRE DR IN THE FACE OF COES PAYMENTS
RECORD: THE U.S. IPPS UNIVERSALLY RESPOND THAT THEY SEE
OPPORTUNITY IN THE SECTOR. THEY ACKNOWLEDGE: HOWEVER:
THAT TRE ABILITY OF CDE TO MAKE ANY KIND OF LUMP SUM
PAYRENT ON ITS OEBT (PROBABLY IM THE RANGE OF

isa
PRIVATIZATION. ONE COMMENTED THAT, “WITHOUT
PRIVATIZATION: IT MAKES WO SENSE TO INVEST HERE." THE
FEBRUARY 27 CHANGE IM LEADERSHIP AT COE HAS ADDED AN
ADDITIONAL ELEMENT OF DISQUIET TO THIS ASSESSMENT:
SOURCES IN THE U.S, IPPS STATE THAT [(b)(1 )]
OPPOSES THE PRIVATIZATION OF COE. WE CAN ONLY HOPE
THAT WITH THE PRE-QUALIFICATION PROCESS HOVIKG ALONG»
AT 18 TOO LATE TO DERAIL IT. WATT

STORY: THE UNITS HAVE A TOTAL INSTALLED CAPACITY OF BT
‘J6OMW BUT ARE NOW RUNNING AT A TOTAL OF APPROXIMATELY nu
CONFIDENTIAL

00500000000784

O6/17522


Christopulos, Greg

From: Christopulos, Greg

Sent: Thursday, December 13, 2001 9:29 AM

To: "Efird, Neil’

Subject: RE: Azurix

thanks -- very well written, you must be in public affairs or have a graduate degree in
English.

a---- Original Message-----

From: Efird, Neil [mailto:EfirdN2@state.gov]
Sent: Wednesday, December 12, 2001 6:06 PM
To: 'Greg.Christopulos@do.treas.gov'
Subject: Azurix

As promised:

On Dec. 11, EB/CBA, EB/OIA, WHA and Legal Advisers were briefed on the
status of Azurix's problems in Aegenesnaryyal)

The
Department has agreed to facilitate meetings with Provincial Governor
Ruckauf and to support AMEMB's efforts to increase GOA awareness as to the
urgency of this matter. The Department also encouraged Azurix to contact
Argentine press in Washington to increase knowledge in Argentina about
Houston-based Azurix, i.e., it is (only) one-third owned by Enron and
two-thirds owned by independent investors.

00500000000098


TTT
PRIORITY CONFIDENTIAL ES yup

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

PAGE 81 MiD=199engdealed 46937
CAVEAT (S) =
HANDLE VIA

ACTION = CTRSVEPD (1) GU (1) + 1ADB (1) + 1BRD (1), 10M (1) » LOB CL) t9G UT
ADD AL) y IML CD > LTE CLD OUI (1) «QC (2) » SEM d=) UO (1) » NAA CL) XLT ALD

CRC = 0733

PP RUEATRS

DE AVEHC #5977 1832033

Inf Cocte 1m

PR 1328322 APR $8

Fk SECSTATE WASHDC

TO RUERDG/AMENBASSY SANTO DOMINGO PRIGRITY S652
INFO RUEMPU/AMEMBASSY PORT AU PRINCE 4181

8t

CONFIDENT | AL STATE 965977

£.0, 12988: DECL: 4/14/83

TAGS: ECON EPET DR ENRG

SUBJECT: COE SHITH-ENRON NEGOTIATIONS AT WORLO BANK
SEF: (A) $8 SANTO DOM! 1672, (8) 98 SANTO DOM! 1685

CLASSIFIED GY: MIMCMANUS: ACTING DIV CHIEF EB/ESC/IEC/EPC
REASON 1.5 (8)

1, (W) DEPARTMENT APPRECIATES EMBASSY'S TIMELY AND
INSIGHTFUL REPORTING OW THE SHITH-ENRON ELECTRIC POWER
PLANT INVESTMENT DISPUTE, THE SMITH-ENRON ISSUE (THE
PLANT PRODUCES TWENTY FIVE PERCENT OF THE DOMINICAN
REPUBLIC'S ELECTRICITY) WAS RESONANCE WELL BEYOND THE
TERMS OF THE CONTRACTUM DISPUTE. EMBASSY I$ COMMENDED
FOR \TS SUCCESSFUL EFFORTS TO MITIGATE? AND IN MANY CASES
TO PREVENTs FALLOUT FROM THE SMITH-EWRON POWER CRISIS
FROM AFFECTING OTHER U.S. INVESTMENTS AND THE OVERALL
PRIVATIZATION OF TRE CORPORACION DOMINICANA DE
ELECTRICEDAD (CDE).

2. iG) AT EMBASSY'S RECOMMENDATION, DEPRRTNENT RECEIVED
snita-tarow’s [(b)(6)] iN

WASHINGTON APRIL 3. [(b)(4) ; (b)(6)]

mp ee
eee
MDs 1gsaiadagias 6937 14/00262
[(b)(4) , (6)(6)]

FURTHER CONPLICATING THE SITUATION aX
INTERNATIONAL ARBITRATION PANEL IN MEXICO HAS NOW HEARD
THE SHITH-ENRON CDE DISPUTE (CENTERING OW ADDITIONAL BACK
PAYMENTS) WITH & POTENTIAL JUDGEMENT, ACCORDING TO
[(B)(GDF 44 mivcion ooccaks c€rtH6R wav.)

[(b)(4) , (b)(6)]

4 [(b)(1) , (6)(4) , (b)(6)]

$. THE NEXT ROUND OF TALKS» SET FOR APRIL 16 IM SANTO
DOMINGO, WILL BE INSTRUCTIVE.

ALBRIGHT
a

5977
6733
KM

CONFIDENTIAL

00500000000754


x

<4 oSmo

IMMED | ATE

DE
PH

PAGE 82 OF €3 1D 199913788916

WELL AS TRE DIESEL UNIT IN SABANA DE LA HAR, THESE
UNITS HAVE AN INSTALLED CAPACITY OF S73MW) WITH SOME
442M BELIEVED TO BE FUNCTIONAL. ee
THE GAS TURBINES PURCHASED FROM SIEMENS AKO GEC-AL THROM
PRIOR TO THE MAY 1998 ELECTIONS ARE INCLUDED 1M THE
ASSETS DISTRIBUTED 10 THE TWO GENERATION COMPANIES AND
CONTRIBUTE A SUBSTANTIAL PORTION OF THE VALUE OF TRE
TWO PACKAGES,

UNCLAS SECTION 62 OF #3 SANTO DOMINGO 862377

LA PAZ FOR AMBASSADOR KRINAK

SENSITIVE

DEPT PASS OPIC FOR M. PEREIRA AND H. MOMHEIKER
USDOC FOR 3134/USFCS/O10/¥a/RD

USDOG FOR 4322/1TA/TEP/WR/ONCB/SIEGELMAN
£0, 12958: WR

TAGS: ENRG EINV PREL OR
SUBJECT: CDE GENERATION UNITS CAPITALIZED

WHEN THEY GET IT

6. (BUI NO DATE HAS BEEN SET FOR THE FORMAL HAND-OVER
OF THE COE GENERATION COMPANIES, ALTHOUGH THE WINNERS
ANTICIPATE IT WILL TAKE PLACE IN THO MONTHS. THE TWO
CONSORTIA ARE THEN REQUIRED TO PUT AN ADDITIONAL 188 HW
OM LINE WITHIN 12 MONTHS OF THE TURN OVER. CONSORTIA
REPRESENTATIVES COMMENTED TO ECONOFF THAT IT MAY BE
FASTER> CHEAPER AND MORE EFFICIENT TO SIMPLY SCRAP SOME
OF THE EXISTING UNITS RATHER THAN TRY TO UPGRADE THEM,

WHITHER COE

7. (SB) COE, FOR THE TIME BEING: WILL RETAIN THE

WATIONAL TRANSHI SS! AND ITS HYDRO GENERATING
UWITS, MUCH WORK REMAINS AREAD IN BREAKING DOWN UTS

wus,
EXISTING STRUCTURE TO SPIN OFF THE FIVE CAPITALIZED
tems [(b)(4)]

8. (SBU) CDE CURRENTLY HAS 8/509 EMPLOYEES OF WHOM OME
FPP SOURCE COHMENTS, “YOU COULO FIRE 3/888 TOMORROW AND

PT TREASURY COMCEN
622-2222 RM 1121/MT

827268

es !

UNCLASSIFIED 0)
ow?

IG/1S36L 1D=199913780316

WO ORE WOULD NOTICE, * [(b)(4)]

227268 16/1S34Z

9. W) ENRON BAS HAD A PARTICULARLY INTERESTING ROLE IN
THE RUM UP TO TRE CAPITALIZATION, AS REPORTED REFTEL
Ay The IPPS RAVE PUT IM LONG HOURS THIS WEEK IM
NEGOTIATIONS WITH THE CREP AND CDE ON YET ANOTHER
“FINAL” VERSION OF THE SO-CALLED DEFINITIVE MOUs WHICR
WILC GUIDE THEIR RELATIONSHIP WITH THE NEW DISTRIBUTION

COMPANIES. [(b)(4)] i

REPRESENTATIVES REPORTED TO ECONOFF THAT THE
WEGOTIATIONS FINALLY ENDED AT 1:38 AMON MAY 13. TWO
IPP’S SIGNED AT THAT TIME, WHILE THE REST DECLINED TO
SIGH PENDING PERSONAL MEETINGS WITH COE ADMINISTRATOR
SEGURA,

[(b)(4)]

11. (SBU) AS NOTED ABOVE, THE LAST OF THE IPPS SIGNED
THE DEFINITIVE MOU AT 5:38 PM) A HALF HOUR BEFORE THE
CAPITALIZATION CEREMONY WAS TO STR. T(b)(4)]

GIVEN THAT SWITH-ENROK WAS

ULTIMATELY NOT SUCCESSFUL IN FINALIZING ITS
RATIFICATION AGREE! IS WEEK» WHICH WILLs IN THE

WORDS OF ONE ENRON "
WRESTLING.” ENRON'S ROLE IN THE SEABOARD CONSORTIUM Was
TRRULED VERY GOTETTY-
——=-=

INCL ASSTFIEN

00500000000738


>
>

Attachment Converted: “c:\RDrive\Attach\participants1210.doc*

Attachment Converted: "c:\RDrive\Attach\Points on US Concernst.doc"

Attachment Converted: "c:\RDrive\Attach\Responses to GOJ Specific Concerns.doc"
Attachment Converted: “c:\RDrive\Attach\Japan's Investment Climate.ppt”
Attachment Converted: “c:\RDrive\Attach\openingstmt.doc”

Attachment Converted: "c:\RDrive\Attach\Larry's FDI.ppt"

Attachment Converted: "c:\RDrive\Attach\US Participants.doc”

00500000000007


FROM DEPARTMENT OF STATE 4A (FRI) 2. 18°00 9:30/ST. 9:30/NO. 376063759¢€ F 3

CONFIDENTIAL
{(b)(1)]
eee
{((b)(1)]
CONFIDENTIAL

0500000000602


ROUTINE CONFIDENTIAL \ as
DEPT TREASURY COMCEN 44s
PH 622-2222 RM 1121/MT aM
PAGE G1 OF a2 Mid=199831682041 678053 06/1683 . 910=199831 882041 ‘T3—06/16097
CAVEAT (S} = TO COMTROL TRANSMISSION FUNCELOMS, IMPORTANT QUESTIONS
HANDLE VIA ABOUT THE FUTURE RELATIONSHIP BETWEEN THE PRIMARILY

ACTION = (1RS)BO1 1 »EPD CH) GHC) RD 1» 108)» 106 0) 4B)
(MB (1) » UNL (+ ETH C2» OU (1 QC (SEN (UO EE
CRC = 29¢8

RR RUEATRS

DE RUEHDG #S546/01 3121519

INY Cocee 2zH

R BGISISZ NOV 98

FM ANEMBASSY SANTO DOMINGO

TO RUEHC/SECSTATE WASHOC 2488

INFO RUEHPU/ANENBASSY PORT AU PRINCE 1146

RUCPDOC/USOOC WASHDC

Br

CONFIDENT | AL SECTION BI OF 22 SANTO DOMINGO a055¢6

USDOC FOR 3134/USFCS/O10/WH/RD
USDOC FOR 4322/1 TA/IEP/WH/OMCB/SIEGELMAN

€.0. 12988: ECL: 11/83/2003
TAGS: ENRG ENV PREL OR
SUBJECT: ELECTRICITY WARS: IPP INTERESTS DIVERGE

1.) CLASSIFIED BY LINDA E. WATT CHARGE 0” AFFAIRES
ALG REASON: 1.5 0)

2. (0) SUNMARY: THE INTERESTS OF THE PRIMARILY-UL S,
INDEPENDENT POWER PRODUCERS IPPS) ARE DIVERGING IN THE
FACE OF A DECISION BY THE GODR TO MAINTAIN ThE
ADMINISTRATION OF PRIVATE PRODUCER CONTRACTS WITHIN COE
AFTER THE CAPITALIZATION PROCESS. SHLTH-ENRON AND_AES,
OOHINIGAN POMER PARINERS ARE PRESSING TO HAVE THEIR
CONTRACTS TRANSFERRED TO THE MEW DISTRIBUTION
COMPANIES. THE SMALLER IPPS ARGUE IN FAUOR OF
NEGOTIATING ON THE BASIS OF TRE GODR PROPOSAL, ALL THE
1PPS WANT SOME GUARANTEE THAT THEIR DEBTS WILL BE PAID
HOWEVER» AND THAT THEIR FUTURE BILLS WILL BE TREATED
FAIRLY. THE CAPITALIZATION OF COE 1S HOW SCHEDULED TO
HOVE AHEAD IN DECEMBER BUT SOME CITE CONCERNS TAT IT
HAY YET BE OERAILED, END SUMMARY.

3. WU) THE OFT-OELAVED CAPITALIZATION OE THE DOMINICAN
STATE-OWNED POVER COMPANY: CORPORACIO DOMINICANA DE
ETECTRICIDAD (COE). 1S HOW SET TO MOVE ANEAD IN EARLY
DECEMBER, COE’S GENERATION AND DISTRIBUTION
“CAPACITY WiLt BE OFF/INTO FIVE DIFFERENT COMPANIES
{TWO GENERATION AND. ISTRIBULION COE WiLL
CONTINUE 10 EXIST AS A LEGAL ENILLY. OPERATING TRE
STATE-CIMED HYDROPOVER PLANTS. IT WILL ALSO CONTINUE

U.S. -OWMED INDEPENDENT POWER PRODUCERS (IPPS) AND COE
AND THE FUTURE DISTRIBUTION COMPANIES WDISCOS) REMAIN.

CREP LAYS DOWN THE LAW: DEBT TO GO TO COE SUCCESSOR

4. 40) BY LETTER OF OCTOBER 16: oe ‘ve COMMISSION
FOR THE REFORM OF PUBLIC SECTOR COMPANIES) CONFIRMED TO
THE PPS ITS INTENTION TO MALNTAIN THE ADMINISTRATION

“OF PRIVATE PRODUCER CONTRACTS WITHIN COE AFTER THE

CAPITALIZATION PROCESS. CREP ALSO INFORMED THE IPPS IT
WILL ONLY ACCEPT DEBT AMOUNTS RECONCILED WITH CDE FoR
TRANSFERRAL 10 THE BOOKS OF ITS HYDROPOWER SUCCESSOR.
WHILE DEBT RECONCILIATION 1S STILL AN IMPORTANT ISSUE
(PARTICULARLY FOR AES DOMINICAN POWER PARTNERS)» ALL
THE IPPS ARE ALSO UNDERSTANDABLY CONCERNED THAT TRE
GREP’S VISION OF THE CDE SUCCESSOR’S ABILITY TO ASSUME
THEIR LONG-STANDING DEBTS MAY BE BASED O8 AN OVERLY
ROSY SCENARIO.

5. (C) WHILE THE CREP DECISION AFFECTS ALL THE IPPS+ IT
IS OF PARTICULAR INTEREST TO SHITH-EMRON AND AES OPP
WHICH HAVE CONTRACT CLAUSES STATING THAT IF CDE WERE TO
SELL ANY SIGNIFICANT PART OF ITS ASSETS: THEIR
CONTRACTS WOULO BE PASSED TO THE BUYER. SMITH-ENRON
AN AES MADE THIS ARGUMENT TO THE CREP WHICH RESPONDED
WITH A LEGAL DECISION ARGUING THAT THE CAPITALIZATION
IS WOT A SALE, THEREFORE THE CONTRACT PROVISIONS 00 NOT
APPLY. THE IPPS MET OM OCTOBER 28 TO DISCUSS WHAT
ACTION TO TAKE IN RESPONSE TO THE CREP LETTER.

{(b)(1) , (b)(4)]

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PAGE 82 OF 87 W1D=189832881117 008432
IN TRE MEANTIME, HAS HADE AM UNSOLICITED PITCH TO
PROVIDE 168 KW OF EMERGENCY POWER: WHICH THE BDG 1S

CONSIDERING. THE CONSORTIUM (MAJORITY OWNED BY COASTAL. *

ENERGY OF ROUSTON) WHICH HOW OWNS ANO OPERATES
GANGLADESH’S FIRST OPERATING PRIVATE POWER PLANT. A118
MW BARGE IM KHULNA, HAS AN AGREEMENT WITH THE BDG TO
BUILD A NEARLY IDENTICAL BARGE 30 MILES UPRIVER,

UNCLAS SECTION 82 OF 88 DHAKA 083481
SENSITIVE BUT UNCLASSIFIED

STATE FOR SA/PABs EB/ESCs AND INR/SA/SOA

STATE PASS EXIMBANKs OPIC AND TDA

USOOC FOR 4538 ITA/ANESA/OSA: 6298 ADVOCACY CENTER
DEPT OF ENERGY FOR TOM CUTLER

TREASURY FOR OASIA

LONDON FOR SUTPHEN

OUBLIN FOR ENERGY OFFICER

MANILA FOR USED ADB AND SCO BARNES

E.0. 12958: 11/24/63
TAGS: EPETs ENRG: ECON) 86
SUBJECT: BANGLADESH: ENERGY SECTOR UPDATE

4. (SBU) GIVEN THE RELATIVE DOMINATION OF THE ENERGY
AND GAS SECTORS BY U.S. COMPANIES: THERE SHOULD BE
GREAT SCOPE FOR PROPOSED COOPERATION BETWEEN THE U.S.
DEPARTMENT OF ENERGY AND THE BANGLADESH MINISTRY OF
EWERGY, WHETHER IT BE IN GAS POWER OR PIPELINE
REGULATION» ENVIRONMENTAL ASSESSMENT) ALTERNATIVE
ENERGY, PRICING OR OTHER AREAS. COMPANIES AND THE BOG
NOW NEED TO IMPROVE THEIR OFTEN-STRAINED RELATIONSHIP.
AND TO WORK TOGETHER TO FIGURE HOW BOTH CAN BENEFIT
FROM ENERGY OEVELOPHENT IN THIS POTENTIALLY GAS-RICH
BUT POLICY- AND POWER-POOR COUNTRY. HELPING IMPROVE
THINGS WILL BE A TDA-FUNDED STRATEGIC GAS UTILIZATION
STUDY: QUE TO START IM A FEW WEEKS? IT SHOULD GIVE THE
BOG MORE INFORMATION ABOUT ENERGY DEVELOPHENT OPTIONS,
‘A PROPOSED DECEMBER ENERGY ROUNDTABLE IN WASHINGTON
WITH BOG EMERGY SECTOR OFFICIALS AND ENERGY COMPANIES
BELONGING 10 THE U.S, -BANGLADESH BUSINESS COUNCIL:
INCLUDING DISCUSSIONS WITH THE DEPARTMENTS OF ENERGY
AND INTERIOR ON POSSIBLE COOPERATION, ALSO SHOULD
IMPROVE RELATIONS: INCREASE TRE BDG'S KNOWLEDGE AND
COMFORT LEVEL: AND PERHAPS EVEN RELP IT MAKE SOME
OECISIONS ABOUT MARKET DEVELOPMENT. RIGHT NOW THE BOG
1S STILL COOL AND CAUTIOUS TOWARD GAS EXPORTS TO INDIAr
WHICH MUCH OF INDUSTRY I$ PUSHING FOR. THE DOLLAR
VALUE OF THE PROJECTS PENDING FOR U.S, COMPANIES IM THE
GAS AND POWER SECTORS APPROACHES USD 1.5 10 2.8
BILLION: AMPLE INCENTIVE FOR BOTH SIDES TO IMPROVE THE
RELATIONSHIP, END SUMMARY,

MiD=199832881117 008492

GAS SECTOR: SOME PROGRESS FOR CURRENT OPERATORS

5. ($80) OCCIDENTAL (WITH PARTHER UNOCAL) HAS
OPERATED WITHOUT A CONTRACT SINCE JANUARY 1998 THE
TWO-YEAR SECOND PHASE OF ITS WORK PROGRAM IN BLOCKS 13
AND 14. OXY NOW APPEARS TO BE OM TRE VERGE OF

“RECEIVING THE EXTENSION: AFTER MONTHS OF REAVY ADVOCACY

BY THE USG AND EMBASSY, POLITICAL PRESSURE RESULTING
FROM OXY"S JUME 1997 GAS EXPLOSION: COMBINED WITH AM
OUTSTANDING DISPUTED COMPENSATION CLAIM BY THE MINISTRY
OF ENVIRONMENT AND FORESTS GOR DAMAGES OF OVER USD 128
MILLION: VERSUS OXY’S ASSESSMENT OF USD 52,888), SLOWED
THE APPROVAL PROCESS, LOCAL OXY REPRESENTATIVES TOLD
ECONOFF NOVEMBER 18 THAT THE EXTENSION SHOULO BE SIGNED
OM NOVEMBER 25,

6 (BU) DESPITE THE LACK OF A CONTRACT» OXY BAS
CONTINUED ITS GAS DEVELOPMENT WORKs AKD SO 1S ON
SCHEDULE TO DELIVER 160 MILLION CUBIC FEET A OAY
QHICFD) -- NEARLY 15 PERCENT OF CURRENT DOMESTIC OUTPUT
~~ TO THE BOG SOMETIME IM JARUARY FROM THE JALALABAD
FIELDs IM BLOCK 13, OXY ALSO HAS STARTED AN APPRAISAL
DRILLING AND THREE DIMENSIONAL SEISMIC PROGRAM TO
DETERMINE THE CONFINES OF ITS BIBIANA FIELD IN BLOCK
‘Nis WHERE THE COMPANY HAS NO CONTRACT TROUBLES. THE
BIBIAMA FIELD I$ BELIEVED TO CONTAIN 2.5 TRILLION CUBIC
FEET (TCF) OF PROVEN RESERVES. iF SOs ITS GAS WOULD
INCREASE THE COUNTRY’S PROVED RESERVES, CURRENTLY AT 18
TOF, BY 25 PERCENT (OTE: VARIOUS INDUSTRY SOURCES SAY
BANGLADESH COULD HAVE BETWEEN 38 10 88 TCF OF GAS? IN
COMPARISON: PROVED RESERVES FOR INDONESIA ARE 69 TCF.
CANADA G7: PAKISTAM 27). OXY WOULD LIKE TO INCREASE
THE SIZE OF THE EXISTING NORTH-SOUTH PIPELINE TO PERMIT
HORE OF OXY’S GAS TO FLOW SOUTH TO THE NATIONAL GAS
UNCLAS SECTION 63 OF @8 ORAKA 983481

SENSITIVE BUT UNCLASSIFIED

STATE FOR SA/PABs EB/ESC: AND INR/SA/SOA

STATE PASS EXIMBANK: OPIC AND TDA

USDOC FOR 4538 ITA/ANESA/OSA: S888 ADVOCACY CENTER
DEPT OF ENERGY FOR TOM CUTLER

TREASURY FOR OASTA

LORDON FOR SUTPHEN

DUBLIN FOR ENERGY OFFICER

NAKILA FOR USED ADB AND SCO BARNES

E.0, 52958: 11/24/03

UNCLASSIFIED

MAD

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((o1)]
RINAK “5
or ~
Hs

A224

NK

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PAGE 62 OF 82 10=193830590329 74589
NEGOTIATE WITH THE RUSSIANS FOR EITHER THE EXPORT OF
ELECTRICITY FROM EXISTING POWER PLANTS IN THE IRKUTSK

REGION CR THE ACQUISITION OF AN UNFINISHED RYDROPOVER = ~*~,
PLANT NORTH OF IRKUTSK, ON THE CHINA END, ENRON IS

SEALING WITH THE NORTH CHINA POWER BUREAU FOR SUPPLY OF

THIS ELECTRICITY TO THE BEIJING AREA GRID.

4. ASBUP USIS 1S WORKING WITK ENRON HEADQUARTERS AND WITH
UNCLAS SECTION 62 OF 62 ULAANBAATAR G81L411

SENSITIVE

‘STATE FOR EAP/CHs E/CBA AND EB/IEP

PASS AID FOR ANE~C. DOWNEY AND G/ENV/EET

USDOE FOR INTL AFFAIRS

USDOC FOR ITA-EAP AND ITA-ERERGY

BEIJING FOR ECON-S.REES AND COMMERCIAL SERVICE-C. ADAMS

€.0, 12958: N/A

TAGS: ENRG ENV: HG

SUBJECT: ENRON SIGHS AGREEMENT WITH GOH ON TRANSMISSION
LINE AND HYDROPOWER PROJECTS

REF: ULAANBAATAR L@31

THE GON ON TRE ISSUANCE OF A PRESS RELEASE. ALSO, A COPY
OF THE SIGNED MOU (SBU) IS BEING SENT TO EAP/CH-D. EPSTEIN.

$. @) INA RELATED DEVELOPMENT, EMBASSY AND USAID
SPONSORED AN ALL-DAY ENERGY ROUNDTABLE ON OCT. 31. HOSTED
GY THE AMBASSADOR, THE SEMINAR INLCUDED SENIOR GON
ECONOMIC OFFICIALS, INCLUDING THE ACTING INFRASTRUCTURE
MINISTER AND HIS STAFF) THE ENERGY AUTHORITY, KEY
PARLIAMENT MEMSERS AMD ADVISERS FROM THE PRESIDENT’S
OFFICE AND GOM NATIONAL SECURITY COUNCIL. CONDUCTED BY
USAID CONSULTANTS WITH EXPERIENCE IN HUNGARY, THE MEETING
FOCUSED OM DEVELOPMENT OF AN ENERGY SECTOR STRATEGY:
OPTIONS FOR POWER DEVELOPMENT ANO PRIVATIZATION: ENERGY
PRICING AND ASSET VALUATIONS SETTING UP AN INDEPENDENT
REGULATORY AUTHORITY; AND CONTENTS OF A NEW ENERGY LAW
WITH IPO PROVISIONS, THE ROUNDTABLE MEETING BROKE NEW
GROUND WITH TOP OFFICIALS DEALING WITH ENERGY POLICY.
INCLUDING THE ENRON AND AES PROJECTS, TOWARD DEVELOPING A
CONSENSUS ON A PACKAGE (POWER STRUCTURE: REGULATORY REGIME
AND ENERGY LAW) TO BE PUT TO PARLIAMENT FOR APPROVAL)
HOPEFULLY EXT SPRING WHEN WORK ON THE U.S. POWER PROJECTS
1S EXPECTED TO MATURE. DURING THIS MEETING, THERE WAS A
CONSENSUS THAT FOREIGN PRIVATE PARTICIPATION 1S ESSENTIAL
TO FUTURE DOMESTIC POWER DEVELOPMENT AND THAT A NEW LESS

wiD=189830600323 74559
STATIST MODEL I$ NEEDED FOR THE MONGOLIAN POWER |NDUSTRY,

6, (SEU) COMMENT: COMBINED WITH LAST AUGUST’S AGREEMENT
WITH AES ON POWER PLANT PRIVATIZATION AND ENRON'S
INTENTION TO PARTNER WITH THE GOM ON THE RUSSIA-CHINA GAS
PIPELINE U.S. CORPORATIONS ARE IM THE COMMANDING POSITION
REGARDING DEVELOPMENT OF THE MONGOLIAN POWER SYSTEM. BOTH
ENRON AND AES HAVE STRONG AND POSITIVE RECORDS ON ENERGY
DEVELOPMENT IN THIS REGION. POINTS NOT LOST ON THE
MONGOLIANS WHO HAVE HERETOFORE DEALT WITH POORLY CONCEIVED
PROJECTS AND LESS CAPABLE COMPANIES. IN RECENT WEEKS
SINCE TRE UNTIMELY DEATH OF INFRASTRUCTURE MINISTER ZORIG,
EMBASSY HAS WORKED 70 KEEP THE GOM ON TRACK TO CONCLUDE
THE ENRON PACKAGE. VE ARE PLEASED 10 HAVE BEEN ABLE TO
STIMULATE ENRON'S INTEREST IN COMING TO MONGOLIA ANG TO
FACILITATE THIS AGREEMENT.

LA PORTA
er

au
5E08
NNN

INCL ASSIFIFN

00500000000562

91/08382


Tn
CONFIDENTIAL

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PH 622-2222 RM 1121/MT

TEETER
IMMED | ATE
PAGE 91 OF €2 ——‘t10=199734482435 066648
CAVEAT (S) =
ANOLE VIA

ACTION = (TRSICID (1) sEPD (1) + UNL (2) r QC (1) » SEN (+)
CRC = 86RE

00 RUEATRS

DE RUEHDG 96627/81 3442874

Unt coces 22H

0 1928242 DEC $7 o*

FM AMEMBASSY SANTO DOMINGO

TO RUENC/SECSTATE WASHDC IMMEDIATE 8834

INFO RUEHPU/AMEMBASSY PORT AU PRINCE G11

ar

CONFIDENTIAL SECTION Ot OF 92 SANTO DOMINGO 006627

€.0, 12958: DECL: 12/16/2882

TAGS: ENRGr OR

SUBJECT: HOT-HEADED PUBLIC COMMENT AGGRAVATES TENSE
SITUATION OVER CDE SHITH-ENROM PAYMENT

1, WD CLASSIFIED BY: EDWIN CUBBISON, CHARGE: REASON:
L$ oO

2, (0) SUMMARY: INDEPENDENT POWER PRODUCER SMITH
ENRON COGENERATION LIMITED PARENERSHIP INFORMED THE
CORPORATION DOMINICANA DE ELECTRICIDAD (CDE) ON
DECEMBER 2 IT WILL SHUT DOWN OPERATIONS IF IT FAILS TO
RECEIVE A [(b)(4)] PAYMENT BY FRIDAY: DECENBER
12. CDE BOARD PRESIDENT CELSO MARRANZIN! SUBSEQUENTLY
COMMENTED ON A MORNING TALKSHOW DECEMBER $ THAT “IF IT
DEPENDED ON CELSO MARRANZINI HE WOULD MILITARIZE THE
FACILITY, SENIOR GODR OFFICIALS ASSURED THE EMBASSY
THAT THIS STATEMENT DOES NOT REFLECT THE POSITION OF
THE GOVERNMENT. CDE ADMINISTRATOR MOWTAS ALSO INFORMED
THE CHARGE CDE WILL PAY SNITH-ENRON OW WEDNESDAY,
DECEMBER 16. THIS PROMISE WAS REITERATED IN A PUBLIC
STATEMENT RELEASED TO THE PRESS BY CDE TUESDAY EVENING:

DECEMBER 9. SMITH-ENRON will
MOTIFY TRE EMBASSY WHEW ED eves END
SUMMARY.

BACKGROUND: SMI

ENRON THREATENS TO PULL THE PLUG

3.) THE TROUBLED CORPORACION DOMINICANA OE
ELECIRICIOAD (COE) 1S REPORTEDLY LAGGING FARTHER AND
FARTHER BEAINO IN 11S PAYMENTS TO INDEPENDENT POWER
PRODUCERS, WITH FINANCIAL OBLIGATIONS COMING DUE OM
MONDAY, DECEMBER 15+ SMITH-ENRON IXVOKEO THE TEM DAY
NOTICE PROVISION IN ITS CONTRACT INFORMING CDE BY

LETTER DATED DECEMBER 2 THAT IT KOULD SHUT DOW
OPERATIONS IF AT DID KOT RECEIVE & PAYRENT FOR [(b)(4)]

tA

W10=1997344982835 B6GE4S
MILLION BY FRIDAY. DECEMBER 12.

4.) suiTh-exeon [(b)(6)]

CONTACTED THE EMBASSY EARLY ON DECEMBER $ TO INFORM US
THAT COE BOKRO PRESIDENT CELSO MARRANZINI HAD APPEARED
OW A MORNING TALKSHOW AND SAID TeAT “IF IT DEPENOEO On
CELSO MARRANZIMIs | WOULD TELL THEN (SMITH-ENROM) TO
TURK OFF THE POWER AND. OM THE 1ITHe MILITARIZE ITs AKD
GIVE IT TO COE ON THE 12TH." MARRANZINI'S COMMENT WAS
PICKED UP BY AFTERNOON ORILY EL KACIONAL WHICH LED TRE
‘STORY WITH A BANNER HEADLINE “CONEP PRESIDEKT FAVORS
COE AILITARIZING SALE." Ty) (Gy]

{(b)(4) , (b)(6)]

5. (C) IMMEDIATELY FOLLOWING TRE MEETING WITH
[(b)(6)g#Arce Axo avocn conracteD [(b)(6)]

RESPECTIVELY TO DISCUSS MARRANZINI‘S COMMENTS, MONTAS
INFORMED CHARGE THAT COE PLANNED TO MAKE THE PAYMENT TO
SMITH-ENRON ON WEDNESOAYs DECEMBER al Pyense
INFORMED HER THAT 1T 1S NOT THE IHTEM! KI 10
TAKE ANY ACTION THAT WOULD BE A DISINCENTIVE TO FOREICK
INVESTMENT. IN CLOSINGS 5) NTE THAT THE
ISSUE SHOULD NEVER RAVE GOTT THE PRESS 1M THE

FIRST PLAGE. [(b)(6 INFoRNED A/OCM
THAT acd (P Mg ), BEEN INFORMED OF WHAT
MARRANZINI HAD SAIDr 1T WAS NOT THE OFFICIAL POSITION

CONFIDENTIAL

00500000000797

16/214@t


FROM DEPARTMENT OF STATE 4A (FRED 2.18°00 9:20/ST. 9:30.°NO. 37606
CONFIDENTIAL

Printed By Alex Martschenko 02/18/2000 07:49:39 AM

LAGOS 527
From: AMEMBASSY LAGOS MRN: 527 Date/Time: 1605532 FEB CO
Subject GON STARTING TOGETWITH THE | _ ICNbr. TEDO#24 Precedence. IMMEDIATE
ECON PROGRAM a
Cable Text:
TeDos2<

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TON AF-00

sINFO LOG-00 NP-00 = AID-00  CZA-01 © CIAE-00 COME-00 CTME-00
INL-01 DCDE-00 SRPP-00 DS-00 EB-0C —-EXIM-01 E-00
FRB-00  H-O1 TEDE-00 INR-00 ITC-01 1-00 AC-O2
NSAE-00 NSCE-00 OMB-01 OPIC-O1 PA-00 PH-00 —PRS-00
ACE-cOP-09 SP-00 IRM-00 STR-00 -USIE-00 FKP-00
PMB-00 DSCC-00 DRL-02 G-00 NFAT-00 SAS-09 " /010H

crees+*-33BDBF 1605562 /38

© 1605522 FEB 00

FM ANEMBASSY LAGOS

TO SECSTATE WASHDC PRIORITY 9144
INFO DEPTTREAS WASHDC IMMEDIATE
ECOWAS COLLECTIVE

USDOE WASHDC

CONFIDENTIAL SECTION 01 OF 05 LAGOS 900527
£.0. 32958: DECL: 02/15/10

TAGS: PGOV, ECON, EFIN, NI
SUBCECT: GON STARTINS TO GET WITH THE ECON PROGRAM

REF: A) 99 LAGOS 100$¢ B) LAGOS 0492
LAGOS 01 OF OS 527

CLASSIPIED BY ECON CHIEF MCCULLOUGH, REASONS PARA 1.5 B
AND D.

{(b)(1)]

CONT ENTIAL

00500000000601


av<—s— Sma

IMMEDIATE

PAGE 61 OF 82
CAVEAT (S) =
ANOLE VIA
ACTION = RESTO} 61 SRD Uo i G1 8 GRA HL
ATE (1) PTE (1) OUMP (1) 500 (1) SEN (+100 (1)

CRC = AN

WiD=1999989B0178 o1812

OTTULYUW RUEKDGALGE7 986185S-UUUU--1
THR WUUUU 72K

0 2918552 HAR 99

FM AMEMBASSY SANTO DOMINGO

TO RUEHC/SECSTATE WASHOC IMMEDIATE 4469
IMFO RUCPDOC/USDOC WASHOG IMMEDIATE
RUEHPU/AMENBASSY PORT AU PRINCE 1436

oT

UNCLAS SECTION BL OF 82 SANTO DOMINGO 881687

DEPT PASS OPIC FOR M. PEREIRA AND M.HONHEIMER
WSDOC FOR 3134/0SFCS/O10/WA/RD
USDOG FOR 4322/1TA/IEP/WH/OMCB/SIEGELMAN

SENSITIVE

€.0, 12958: N/A
TAGS: EWRG EIMV PREL DR
SUBJECT: SMITH EMROK DEAL IN DANGER

1, SENSITIVE BUT UNCLASSIFIED. HANDLE ACCORDINGLY.

2. (SHU) SUMMARY: THE DEAL WORKED OUT BETWEEN
INDEPENDENT POWER PRODUCER SMITH ENRON AND THE
CORPORACION DOMINICAMA DE ELECTRICIDAD (COE) ON MARCH
12 1S IN DANGER OF UNRAVELING, [(b)(4)]

THE TFC HAS ORGANIZED A TELECONFEREKCE ON
MARCH 30 BETWEEN TRE LENDERS AND CDE. AM OFFICIAL FROK
THE COMMISSION FOR THE REFORM OF PUBLIC SECTOR
COMPANIES (CREP) WILL ALSO PARTICIPATE IN THAT CALL TO
ARGUE THAT THE HOU SIGNED FEBRUARY 18 BETWEEN THE
INDEPENDENT POWER PRODUCERS AND TRE CREP WILL
CONSTITUTE A SUFFICIENT GUARANTEE FOR THE LENDERS. EHD
SUMMARY.

3. (seu) Smita ENRow [(1b)(6)]

REPORTED ON MARCH 26 THAT THE OEAL BETWEEN SMITH ENRON
AND THE CORPORATION DOMINICANA DE ELECTRICIDAD (COE) »
WORKED OUT 1M WASHINGTON ON MARCH 12 ONDER THE AUSPICES
OF THE INTERKATIONAL FINANCE CORPORATION (1FC)» 1S IN
DANGER OF UNRAVELING, SINCE THE MARCH 12 HEETING THE

UNCLASSIFIED

PT TREASURY COM
PA 622-2222 RM 1121 Nn

(a

H1D=199988988128 017872
PARTIES HAVE BEEN ENGAGED IM THE NEGOTIATION OF A
RATIFICATION AGREEMENT FOR THE FINAL HOU AND FINANCIAL
SETTLEMENT. THESE NEGOTIATIONS ARE NEARING BREAKDOWN

{(b)(4)]

4, (S80) by(6) IN THE ORIGINAL LOAN
AGREEMENTS: THE LENDERS WANTED AS SECURITY CERTAIN
CONDITIONS AKO GUARANTEES. [(p)(4)]

woe PROPOSAL REMOVES inpoataat FINANCIAL GUARANTEE

[coy]

THIS LATTER
PROVISION (1.€. THE PROPOSAL THAT A RENEWED LETTER OF
CREDIT WOULD HOT BE ISSUED FOR THE REVISED CONTRACT)
HAD NOT PREVIOUSLY BEEN PROPOSED BY COE. THE IFC HAS
NOTIFIEO SMITH ENROM THAT IF THAT FINANCIAL GUARANTEE
VANISHES THE IFC WILL NOT GIVE THEIR BLESSING TO ANY
CHANGE IN THE POWER PURCHASE AGREEMEKT.

1, (BU) IN THE ABSENCE OF THE LETTER OF CREDIT»
MCCORDING TO THE LOAN AGREEMENT. SMITH ENRON WOULD THEN
RAVE THE RESPONSIBILITY TO BUILD UP ITS RESERVE FUNDS
ON THE BOOKS. IT IS CURRENTLY REQUIRED 10 HAVE
APPROXIMATELY USSI@ MILLION OM RESERVE [(b)(4)]

UNCLASSIFIED

38/88111

00500000001345


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PAGE OL 10=198831 701379 982308 MiD=193831781379 002308 = 13/11592

Pay (o(1)}

ACTION = CTRS]BOI (1) EPO Ui}, Gi (0) HOM CA)» 1B C0)» 1D UL)» UN.

UTEALD« OUMF (LD QC (1) » SEM [+> -

CRC = A294

RR RUEATRS

DE RUERKT #2861 3170353 EKRON

IyY COCCC IH

R 1389832 NOV 98

FM AMEMBASSY KATEMANDU

TO RUEHC/SECSTATE WASHOE $249

INFO RUEHKA/AMEMBASSY DRAKA 2544
AUEHIL/AMEMBASSY ISLAMABAD 3877
RUEHLM/AMENBASSY COLOMBO 6582
RUEHNE/AMENBASSY NEW DELHI 6559
RUEHLO/AMEMBASSY LONDON 9123

at
CONFIDENT IAL KATHMANDU 022861

LONDON FOR PAUL SUTPHIN

€.0. 12958: DECL: 11/13/88
TRS: PREL> PGOUs PREF» ECON) EINVs NP
SUBJECT: NEPAL: PRIME MINISTER REITERATES REQUESTS
FOR HELP ON ELECTIONS AND FOR ENRON PROJECT»
FRETS ABOUT DECLINE OF JAPANESE AID zi
oid
REF: (A) KATHMANDY 2556
(B) KATHMANDU 2844

CLASSIFIED BY AMBASSADOR RALPA FRANK. REASON: 1.5
BD,

1, (GC) SUMMARY: IN A ONE-ON-ONE MEETING WITH THE
AMBASSADOR NOVEMBER 1) NEPALI PRIME MIMISTER KOFRALA
REITERATED AN EARLIER REQUEST FOR U.S, ASSISTANCE WITH

THE NEPAL! GENERAL ELECTION PLANNED FOR APRIL OR MAY OF

.1(b)(1)] AE FRETTED ABOUT A

REDUCTION IN JAPANESE BILATERAL AID TO NEPAL. THE PRIME

Let a ‘ABOUT [(b)(4 )]

ELECTIONS AND INDIA

2. (0) MEETING WITH THE AMBASSADOR A MONTH AFTER THEIR

J. (C) THE PRIME MINISTER SAID HE -- AND HOT THE WATER
RESOURCES MINISTER -- WOULD RESPOND DIRECTLY TO AN
EXPRESSION OF INTEREST FROM EWROM IN THE KARNAL
HYDROPOWER PROJECT.

{()(1)] OTE: ENRON IS
CLEARING A ORAFT LETTER IN-HOUSE: WE HOPE TO SEE A FINAL
VERSION SHORTLY. END NOTE.)

JAPANESE ALD

4, (C1 THE PRIME MINISTER HAD JUST RETURNED FROM AN
OFFICIAL VISIT TO JAPAN» UNDERTAKEN, HE SAIDr TO “APPEAL”
JAPAN'S DECISION TO CUT ITS LEVELS OF BILATERAL AID.

{(b)(1)]
(COMMENT: JAPAN 1S THE LARGEST BILATERAL
AND book 10 NEPAL, ITS DECISION TO REDUCE AID )(4

MUST BE EXTREMELY WORRISOME TO NEPAL, WHICH IS
COMPLETELY DEPENDENT OM DONOR ASSISTANCE.)
FRANK
Br
861
A234
NHN

LAST ONE-ON-ONE HEETING GREF Als WEPALESE PRIME MINISTER
KOIRALA AGAIN SOUGHT U.S. ASSISTANCE IN GETTING VOTER

IDENOITY CARDS COMPLETED BEFORE NATIONAL ELECTIONS THAT

ARE EXPECTED TO TAKE PLACE IM APRIL OR MAY OF 1989. [(h)(1)]

CONFIDENTIAL

00500000000567


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PAGE 85 OF 87

WNID= 199832801117 798492

14, (SBU) COMPLICATING THE GAS PICTURE IS.THE REALITY,

THAT THE BDG IS FACING FALLING PRODUCTION FROM ITS OWN
BAKHRABAD GAS FIELDS» DUE TO TECKNICAL PROBLEMS. WITH
LITTLE OR MO POSSIBILITY TO INCREASE PRODUCTION FROM
OTHER FIELDS OF ITS OWN (AT LEAST IM THE SHORT TERM:
ESPECIALLY GIVEN THE BUDGET CONSTRAINTS WHICH LED TRE
BOG 10 OPEN UP THE SECTOR TO INDUSTRY IN THE FIRST
PLACE) THE BDG WILL BE FORCED 70 TORN TO GAS FROM THE
4OCS, THAT PRESENTS TWO PROBLEMS FOR THE GOVERNMENT:
THE 106 GAS IS MORE EXPENSIVE (AT LEAST OM PAPER:
BECAUSE THE BDG DOES NOT FULLY REFLECT ALL ITS COSTS:
SUCH AS DEPRECIATION: IM ITS FIGURES); IT ALSO WILL
COST THE COUNTRY FOREIGN CURRENCY.

15, (SBU) THE GAS PROBLEM HIGHLIGHTS THE DILEMMA
FACING THE BOG -~ IT DOESN'T HAVE TRE INFRASTRUCTURE TO
EXPLOIT 1S RESOURCES ON ITS OWN YET ITS INTERNAL
PRICING AND COST STRUCTURES ARE SUCH THAT IT CANNOT
EASILY AFFORD 10 PAY FOREIGN COMPANIES FOR THEIR
PRODUCTION. UNTIL IT FIGURES OUT HOW TO MAKE NEEDED
PRICING AND DISTRIBUTION CHANGES (POWER DISTRIBUTION
LOSSES--THEFT--ARE CLOSE 10 35 PERCENT, FOR EXAMPLE)»
BANGLADESH WILL NOT BENEFIT FULLY FROM ITS GAS AND
POWER. IT MOW SELLS GAS AND POWER AT SUBSIDIZED
UNCLAS SECTION 06 OF @8 DHAKA 863481

SENSITIVE BUT UNCLASSIFIED

STATE FOR SA/PAB» EB/ESC AND INR/SA/SOA

STATE PASS EXIMBANK» OPIC AND TOR

USDOG FOR 4538 ITA/ANESA/OSA, G88 ADVOCACY CENTER
DEPT OF ENERGY FOR TOM CUTLER

TREASURY FOR ORSEA

LONDON FOR SUTPHEN

M1D=199832801117 008432

16. (S80) UNOCAL'S WESTERN REGION INTEGRATED PROJECT
(AIP) HAS BEEN IM THE WORKS FOR NEARLY TWO YEARS. THE
WRIP WOULD DEVELOP A “STRANDED” GAS FIELD IN THE WEST,
BUILD A PIPELINE FURTHER WEST TO KHULNA: AND HAVE
SEVERAL KUNDRED MEGAWATTS (i OF POWER FROM SEVERAL
PLANTS THE COMPANY WOULD ERECT. THE UNSOLICITED HATURE
OF TRE PROPOSAL» HOWEVER? HAS CAUSED INDIGESTION FOR
TaE BOG. UNOCAL NEEDS BDG APPROVAL “OF THE TENDER
DOCUMENTS BY THE END OF 1998 IF THE PROJECT IS 10 E
COMPLETED BY THE END OF 2882 MATIONAL ELECTIONS ARE
DUE BY MID-2001, BUT THE PRIME MINISTER HAS SAID SHE
WILL ADVANCE THEM TO LATE 2808). NOW THAT UNOCAL AND
SHELL HAVE REACHED AN UNDERSTANDING ON BLOCK 1 AND THE
WRIP (UNOCAL WILL DROP ITS CHASE FOR 18> WHILE SHELL
WILL AGREE NOT 10 UNDERBID UNOCAL ON TRE WRIP)+ UNOCAL
HOPES THE BOG WILL FINALLY BE ABLE TO MOVE RAPIDLY TO
GET THE PROJECT TENDERED. THE TENDER WILL BE A “SWISS
CHALLENGE:” WHEREBY UNOCAL WOULD HAVE THE RIGHT» AS
PROJECT SPONSOR: TO MATCH AKY LOVER BIOS, COMPANY
OFFICIALS HAVE TOLD ECONOFF THEY NO LONGER ARE PUSHING
FOR A DIRECT AWARD OF THE PROJECT» GIVEN TRANSPARENCY
CONCERNS OF THE BOG.

ENRON AND THE NORTH BENGAL PROJECT

17, (S80) ENRON INTERNATIONAL PROPOSED A NORTH BENGAL
REGIOMAL PROJECT IM THE FALL OF 1998. IT WOULD BRING
GAS FROM THE EAST ACROSS THE JAMUNA BRIDGE AND BUILD
PIPELINES TO THE NORTH TO FEED A FERTILIZER-FOR-EXPORT
PROJECT (WHICH ENRON WOULD DEVELOP) AND TO THE SOUTH TO
FUEL PLANNED POWER PLANTS. IT COULD JOIM UNOCAL’S
PROPOSED WRIP PIPELINE AT KHULMA. ENRON WILL BE MAKING
PRESENTATIONS IN DECEMBER,

DUBLIN FOR ENERGY OFFICER POWER
MANILA FOR USED ADB AND SCO BARNES oocee
£0, 12958: 11/24/83 AES

TAGS: EPET, EMRGs ECON 8G
SUBJECT: BANGLADESH: ENERGY SECTOR UPDATE

PRICES: BUT PAYS MARKET PRICES IN DOLLARS TO 10CS
(OTE: THE BDG WILL RAISE DOMESTIC GAS PRICES BY 15
PERCENT OM DECEMBER 1). FURTHER CONFUSING TRE MATTER
1S AN ARGUMENT BEING PUT FORTH BY ENRON (WHICH WANTS TO
USE CHEAP GAS TO SELL FERTILIZER TO INDIA) THAT THE 8DG
SHOULD KEEP ITS DOMESTIC GAS PRICE AS LOW AS POSSIBLE
TO BUILD AN INDUSTRIAL BASE.

REGIONAL PROJECTS

18, (BU) AES 1S WORKING TO ARRANGE FINANCING FOR ITS
360 MW HARIPUR COMBINED CYCLE GAS PLANT WHICH IT HAS
COMMITTED TO DELIVER 38 MONTHS FROM LAST SEPTEMBER'S
CONTRACT SIGHING (CONTINGENT UPON FINANCING). IT
CONTINUES TO NEGOTIATE A POWER PURCHASE AGREEMENT (PPA
WITH THE GOVERNMENT'S POWER DEVELOPMENT BOARD @DBI OM
THE 458 MW MEGRNAGBAT PROJECT: ALSO COMBINED CYCLE,
WHILE BOTH SIDES PLEOGED TO COMPLETE TRE MEGENAGHAT
NEGOTIATIONS BY MID-OCTOBER: EITHER POB FOOTORAGGING
(ACCORDING TO AES) OR AES TACTICS (ACCORDING TO THE
BDG) HAS UNTIL NOW KEPT PROGRESS VERY SLOW, OF

UNCLASSIFIED

mnt

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PAGE 62 OF 62 Ni0=199810782485 gas4ss | 17/21322 1D=1938107 02485 249459

AND YET ANOTHER BLOW “WE [(b)(1)]

5. th[(b)(G)] INFORMED CHARGE THAT THE PANEL IN A
SECOND ARBITRATION PROCESS INVOLVING SMITH-ENRON AND A

HOTEL IN PUERTO PLATA MADE AN AWARD IM THAT CASE LAST

WEEK, THE PANEL AWARDED THE PLAINTIFF ROSI87 MILLION

IN DAMAGES PLUS INTEREST PAYMENTS AND LEGAL FEES, THE
CONFIDENTIAL SECTION O2 OF 82 SANTO DOMINGO 81898

E.0, 12958: DEC: 64/16/2883

TAGS: EWRGr OR

‘SUBJECT: SMITH-ENRON: SECOND MEDIATION SESSION NOT
HELO

REF: A. STATE 653771 B, SANTO DOMINGO 1872 aT

nase
TOTAL AWARD 1S APPROXIMATELY USS2@ MILLION. AN EMROM F388
LEGAL TEAM 1S IN SANTO DOMINGO CONSIDERING THE RESPONSE NN
TO THE AWARD.

{(b)(1) , (b)(4) , (b)(6)]

1S THUS SEEKING A MEETING WITH THE PRESIDENT AND SAID
HE MAY APPROACH THE EMBASSY TO REQUEST ASSISTANCE IN
PURSUING THE APPOINTMENT. THE CHARGE ASSURED HIM THE
EMBASSY WILL PROVIDE ASSISTANCE.

((b)(1)]

CANE INENTI AL

00500000000753

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GRID» AND THAT ONCE THE ENRON PLANT 1S PRODUCING POWER AMERICAN COMPANY TO EXPLOIT THESE RESOURCES, EITHER iN
THE GO! WILL SHUT OFF POWER TO THE GAZA GRID. (NOTE: TANDEM WITH BRITISH GAS OR SEPARATELY (REF B). MAK AND
THE PALESTINIANS HAVE TOLD ENRON AND US THAT THERE 1S NO BERGSIEKER SAID THAT ENRON WAS MOT INTERESTED IN
COMPATIBILITY PROBLEM. ENO NOTE.) THIS CONCERNED se ORILLING FOR GAS: BUT WANTED TO SECURE THE FLOW OF THE
BERGSIERER, BECAUSE TRE PLAN WAS FOR ENRON TO TURN ON GAS TO AN OFFSHORE FACILITY TO ENSURE DISTRIBUTION TO
EACH TURBINE AS IT 1S INITIALLY INSTALLED, AND THE FIRST THE GAZA POWER PLANT AS WELL AS TO ISRAEL. ENRON WOULD
TURBINE -- 28 MW 1S DUE TO COME OM LINE NEXT SUMMER -- BE INTERESTED IM BUILDING CONNECTING INFRASTRUCTURE
CANNOT MEET THE TOTAL GAZA DEMAND. BERGSIEKER TOLD TRE BETWEEN THE VELL AN THE PLANT.
OCM THAT HE WONDERED WHETHER COMPATIBILITY REALLY WAS A
CONFIDENTIAL SECTION a7 OF 02 TEL AVIV a1Sa66 ISRAELI PIPELINES» T00
STATE FOR NEA AND NEA/IAIy SHECr NSC FOR REILLY/MALLEY 18. (C) BERGSIEKER SAID ENRON 1S ALSO INTERESTED IN
BUILDING THE PROPOSED ISRAELI ONSHORE FACILITY AND
USDOC FOR 4526/1 TA/MAC/ANESA/1/MWILL | ANSON INTERMAL PIPELINE FOR TRANSPORTING NATURAL CAS,
4920/ |TA/MAC/ANESA/L/PTHANOS GERGSIEKER ASKED FOR OUR ASSISTANCE IN LEARNING ABOUT
SIS3/ATALFCS/010/ ANESA/TPARKER OPPORTUNITIES TO PLAY A ROLE IN DEVELOPING THESE
$S20/ 1TA/MAC/ANESA/L/TGILLMAN PIPELINESs EITHER IN TANOEM WITH OTHER COMPANIES OR
INDEPENDENTLY. HE HAD HEARO THAT THREE OF THE COMPANIES
PASS OPIC FOR MELISSA OBEGI» PAMELA BRACEY PRE-QUALIFIEO TO BUILD THE ISRAELI PIPELINE WERE
DISQUALIFIED, BECAUSE THEY HAVE BOTH UPSIREAN AND
£.0. 12958: DECK: 11/24/89 DOWNSTREAM INTERESTS. BERGSIEKER WONDERED IF THE
TAGS: ECON+ ENRG BEXP, EGr JO» EIRDs IS DISQUALIFICATIONS MIGHT CREATE AN OPENING FOR ENRON. THE
SUBJECT: OCH MEETING WITH ENRON ‘SCO PROMISED TO FOLLOW UP WITH ENRON REPRESENTATIVES,
PROBLEM, INDEPENDENT POWER PRODUCTION (IPP) IN ISRAEL
1, (€) THE DCM NOTED THAT GAZA AND ISRAEL COULD» IN 10, (0) BERGSIEKER ASKED ABOUT THE ISRAELI IPP HARKET.
TIME, DEVELOP AN INTERDEPENDENT ENERGY RELATIONSH IPs WE SAID THAT ALTHOUGH ISRAELI LAW REQUIRES
ALTHOUGH THE PA MAY NOT BE ABLE TO ACCEPT THIS NOW. HE PRIVATIZATION, PROGRESS TOWARDS THIS GOAL IS STILL
EXPLAINED THAT TRE PA BELIEVES THAT IF THERE 1S EXCESS STALLED. ALTHOUGH THE SITUATION COULD IMPROVE AT ANY
POWER TO SELL> THEY WILL SELL IT TO THE WEST BANK BEFORE TIME, VE POINTED OUT THAT THE MINISTRY OF NATIONAL
SELLING IT TO ISRAEL. SENDING ELECTRICITY 10 TRE WEST TNERASTRUCTURE HAS BEEN PROMISING THE SECOND IPP TENDER
GANK: HOWEVER: WILL NOT BE POSSIBLE FOR SOME TIME TO EVERY MONTH SINCE APRIL> BUT HAS YET TO RESOLVE LEGAL
COME, THE OCM RECOMMENDED THAT ENRON LOOK CLOSELY AT THE WRANGLING OM EVEN THE FIRST TENDER. BERGSIEKER ASKED FOR
GRID ISSUES FOR THEMSELVES. BERGSIEKER AGREED THAT THIS QUR ASSISTANCE IN BECOMING PRE-QUALIFIEO FOR THE SECOND
WAS NECESSARY. (PP TENDER AT ALLON TAVOR: AND TRE SCO PROMISED 10
FOLLOW UP WITH ENRON REPRESENTATIVES,
8. (C) OVERALL, BERGSIEKER CATEGORIZED ENRON'S MEETINGS
WITH THE GO! AS POSITIVE, AND NOTEO THAT HE WAS HAPPY TO WALKER
WEAR THAT THE GO| HOPES TO SEE, GUT 1S NO LONGER ar
REQUIRING THE BUILDING OF A DESALINATION PLANT. 45066
BERGSIEKER REVIEWED EMRON’S IWITIAL PLANS TO BUILD A ABT
DESALINATION PLANT ON THE SAME SITE AS THE POWER PLANT, NAN
BUT MOTED THAT ENRON HAS STILL MOT DETERMINED WHETHER IT
CAN MAKE DESALIMATION AFFORDABLE FOR GAZA,
NEVERTHELESS: THE POWER PLANT 1S BEING BUILT TO
ACCOMMODATE A DESALINATION FACILITY.
GAZA MINERAL RIGHTS
$. (0) THE DCM REVIEWED WITH THE ENROM TEAM THE RECENT
DECISION OF THE GOI TO ALLOW THE PA TO EXPLOIT OFFSHORE
GAZA NATURAL GAS DEPOSITS AND THE PA INTEREST IN AN
CONFIDENTIAL

00500000000557


IMMEDIATE CONFIDENTIAL

DEPT, TREASURY COMCEN
PH §22-2222 RM 1121/MT

PAGE @1 WiD=19951e8@1 282 id= 1995 10861082 esess | L8/LLEAT
CAVEAT) = [(b)(1)]
HANDLE UIA AT THIS TIMEs HOWEVER)
ACTION = (TRS) ICM CL) « [DB (2) ENMAE) » TPAD PITT CL) +01 WEGOTIATIONS BETWEEN ENRON AND TRE GOVERNMENT ARE
SEN (-) ‘eS PROCEEDING AND MAKING PROGRESS, THE STRATEGY
‘ADOPTED BY ENRON I$ TO TAKE TRE HIGH ROAD)

Og fEHTO AL7S8

Wy cece 22H

 Te138EL APR 98

FA AREMBASSYHAPUTO /

TO RUEHC/SECSTATE WASHDC IMMED|ATE 7

CRC = SCF oF
00 RUEATRS
ref

RUCPDOC/USDOC WASHDC IMMEDIATE

INFO RUEHBG/AMCONSUL JOHANNESBURG 3125
RUERSA/AMENBASSY PRETORIA 2274
RUERTA/AMCONSUL CAPE TOW 6295

ar
CONFIDENTIAL MAPUTO anl758

USOC FOR 4516/1EP/ANE/OA/FHOLN-OLSEN
STATE FOR AF/S: AF/EPS: AND EB/CBA

E.0, 12386: N/A
TAGS: BEXP) ECON) ls SF
SUBJECT: ADVOCACY EFFORTS FOR ENRON'S GAS PROJECT

REF: AD $4 MAPUTO 4041 B) $4 MAPUTO SESS
©) 94 MAPUTO S788 D) $4 MAPUTO 6288
£) 94 MAPUTO 7588 F) MAPUTO 228
G) USDOC 6218

1. ROW REFTELS A THROUGH F CHRONICLE THE
DEVELOPMENT OF THE EMRON GAS PIPELINE PROJECT SINCE
LAST OCTOBER. REFTEL D SPECIFICALLY SOLICITED
ADVOCACY SUPPORT DUE TO THE SIZE AND COMPLEXITY OF
TALS PROJECT, WHILE FOREIGN COMPETITORS: SUCH AS
SASOL AND ASEA BROWN BOVERI, HAVE SHCKN INTEREST IN
THIS PROJECT: ENRON IS CONFIDENT THAT ITS EXISTING
EMORANDUM OF UNDERSTANDING WITH THE GR ALLAYS AY
CONCERNS ABOUT DIRECT COMPETITION AT THIS THM,
THERE ARE NO OTHER U.S, FIRMS COMPETING WITH ENRON
FOR THIS PROJECT. IN FACT» NUMEROUS U.S. FIRMS: ~
SUCH AS DRESSER INDUSTRIES: DANIEL FLUOR» AXD MORGAN
BANK KAVE ALREADY EXPRESSED INTEREST 11 WORKING
TOGETHER WITH ENROK AS CONTRACTORS, CONSULTANTS) OR
NN ‘SUPPLIERS.

{(b)(1)]

EMPHASIZING THE PARAMOUNT IMPORTANCE OF THIS PROJECT
TO THE COUNTRY’S ECONOMIC DEVELOPPENTT Cy (4 )]

3, (LOU) ADVOCACY SUPPORT FROM WASHINGTON WOULD BE
A WELCOME COMPLEMENT TO THE EMBASSY’S CONTINUING

EFFORTS. [(b)(5)]

4. IC) THE ENRON GAS PROJECT IS TRE LARGEST
BUSINESS OPPORTUNITY WHICH THE GRM HAS EVER
CONSIDERED. IT 1S BRINGING MOZAMBIQUE UNPARALLELED
ATTENTION FROM THE INTERNATIONAL BUSINESS COMMUNITY
AND COULD SECOME MOZAMBIGQUE’S FLAGSHIP INVESTHENT

MOET. [(b)(1)]

ADVOCACY EFFORTS WILL BE IMPORTANT TO FOCUS GRM
LEADERS OM THE ECONOMIC GAINS TO SE DERIVED FROM
THIS PROJECT AND THE RESULTING POLITICAL GOODWILL
GENERATED WITH SOUTH AFRICA ANO THE UNITED STATES.
serT

st

Dut}

OF

NaH

CONFIDENTIAL
0500000000836


IMMED 1 ATE CONFIDENTIAL

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PAGE 82 OF @3 1D= 199887182218 830635 12/19322

((b)(4)]

“ty
CONFIDENTIAL SECTION 83 OF 83 SANTO DOMIKGO ae1a72
E.0, 12958: DECL: 63/12/2883

TAGS: ENRGr OR
SUBJECT:  SHITH~EMRON: WORLD BANK TO PLAY A ROLE

{(b)(1) , (b)(4)]

WATT
Hand

CONEINENTIAL
00500000000791


4

. PRIORITY

PAGE @1 OF 03
CAVEATS) =
HANDLE VIA

iO=199723781267

ACTION = CTRSICALL G2) EPD (1.61 (1) 10M (1) 108 U1). UNM (1) ETE 1)

TTT ID OUP 1100 (1) SEW f-

Mscddddiddtddidididied
CONFIDENTIAL

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

egn4es /15262

{(b)(1)]

id= 199721701267 a2deg

95/15262

CRC = DASA

PP RUEATRS

OE AUEHTO #3379/81 2171453
IwY Cece ZIH

P BSLAS3Z AUG 97

FS ANERBASSY MAPUTO ai
TO RUERC/SECSTATE WASKDC PRIORITY 9487 Ps

INFO RUEHSA/ANEMBASSY PRETORIA @788
RUEHBG/AMCONSUL JOHANNESBURG 3628
RUEATRS/DEPT OF TREASURY WASHOC
RREBAAA/DEPT OF ENERGY WASHOC
RUCPOOC/USDOC WASHOE

a
CONFIDENT IAL SECTION OF OF 83 MAPUTO 003379

PRETORIA FOR BRUDVIG

JOHANNESBURG FOR FSC MC ARNOLD

USDOC FOR ADVOCACY CENTER/3E14A - RHANPTON
USDOE FOR AKDREA LOCKWOOD AND CMRISTINE FLETCHER
OEPT PLSE PASS TO USTDA - JRICHTER AND MNEWELL
OEPT PLSE PASS TO EXINBANK ~~ AEMMET

TREASURY FOR NRAUCH

DEPT FOR AF/EPSr EB/TPP/STA: EB/IFBy AF/S

£0, 12988: 8/5/87
TAGS: ECON EPET) ENRGr ETROe Wy SF
SUBJECT: ENRON AND DEADLINES

CLASSIFIED BY CHARGE MIKE MCKINLEY) AMEMBASSY MAPUTO:
FOR REASONS 1.5 B AND D, THIS CABLE CONTAINS
PROPRIETARY [MFORMATION WHICH SHOULO MOT BE SHARED
‘WITH RON-USG CONTACTS,

SUMMARY

1, (Ch ENRON'S PANDE GAS DEAL IS APPROACHING THE
TWO-YEAR ANNIVERSARY OF THE SIGNING OF THE HEADS OF
AGREEMENT WOM) WHICH OPENED THE GATES TO PROJECT
OEVELOPMENT IN ROVERGER 1995. {(b)(1)]

f @
)

3,0) IN THE MEANTIME. EWRON AN IDC ARE COMMIT!
TO INVEST IN THE IRON CARBIDE PLANT IN MAPUTO. AND
1S EMERGING AS A KEY PLAYER IN ANOTHER MEGA-PROJECT.
THE PROPOSED GENCOR/ALUSAF ALUMINIUM SHELTER TO BE
LOCATED IM MAPUTO, IDC COULD BECOME THE PRINCIPAL
INVESTOR IM MOZAMBIQUE IF BOTA PROJECTS PAN OUT.
1S ALSO AT LEAST PARTIALLY INVOLWED IN THE SOUTH

ING
toc

oC

AFRICAN END OF THE MAPUTO OEVELOPHENT CORRIDOR, [(b)(1)]

‘SUMMARY.

ENRON VISITS

4. (Ch ENRON'S PRINCIPAL NEGOTIATOR FOR THE PANDE
GAS PROJECT» TONY WAY, WISITED MAPUTO BRIEFLY JULY
18-20 AND GAVE US A DETAILED BRIEFING OX WHERE THE

PROJECT 1S HEADED. [(b)(4)]

1(b)(4)]

CONFIDENTIAL
0500000000816

ENO


ROUTINE

DEPT TREASURY GoM CN
PH 622-2222 RM 1121/M

723673

PAGE 81
CAVEAT (S) =
RANDLE VIA

MiD= 199618281349

ACTION = CTRS)BON (1) s EPO (1) oI (1) « 208) « 1BC (1) « 1M (1) « IML 9.

UMMC) FTE C1) 0 PTT 0) «OFF (1) 20 Ut) a SEN (+)
ORC = 8105

AR RUEATRS

DE RUERTO #2515 1521542

INY cecct 22H

A 3118422 MAY 96

FM ANENBASSY MAPUTO

TO RUEWC/SECSTATE WASHOC 7451

INFO RUEHBG/ANCONSUL JOHANNESBURG 3364
RHEBAAA/DOE WASHOC

RUEHSA/AMEMBASSY PRETORIA 2895
RUEHBE/AMEMBASSY BELIZE 2169
RUCPOOC/DEPT OF COMMERCE WASHDC
RUEHTN/AMCONSUL CAPE TOWN #133

a
CONFIDENT J AL MAPUTO Be251S

PRETORIA/JOHAKNESBURG FOR ARNOLD AND BRUOVIG
DOC FOR ADVOCACY CENTER: DOE FOR BOBBISH
BELIZE FOR GALLUCCI

€.0, 12968: ECL: §/31/2816

TAGS: ECON: EINV) PGOVs HZe SF

SUBJECT: MEXT STEPS ON PANDE GAS PROJECT
REF: MAPUTO 2438

CLASSIFIED BY DENNIS C. JETTs AMBASSADOR: AMEMBASSY
MAPUTO: DEPARTMENT OF STATE. REASON: 2.5)

1, (0) ENRON OFFICIALS TONY WAY AKD BILL FRIEDMAN
VISITED MAPUTO MAY 23 AND 38 TO CALL ON GRM OFFICIALS

{(b)(1)]

((b)(1)]

3. UG) WAY RETURNS TO SOUTH AFRICA TODAY: GOES ON TO

(Ss

PECKOUERMUEEE
CONFIDENTIAL

23019
WUT WiLL BE BACK IN SOUTH AFRICA IN ABOUT TEN
HE SAID THAT HE AND FRIEDMAN WOULD TREN TRAVEL TO
TOWN AND HOPED TO MEET AMBASSADOR JOSEPH AT THAT
IME. WAY ASKED THAT WE USE WHAT INFLUENCE WE HAVE TO
QUERCOME THE ROADBLOCK ON THE SOUTH AFRICAN SIDE.

31/18382 H1D=199615281349 Us/1S302

LONDS

{(b)(1)]

sis
81a5

CONFIDENTIAL
0050000000824


OS
ees

Secretary Rubin will be visiting at an optimistic, even
heady time for Mozambique. Economic restructuring, though not
complete, has made a tremendous difference in the psychology
the place, as evidenced by the Harvard Institute for (1F6:
International Development/World Economic Forum 1998 African
Competitiveness Report which ranked Mozambican businesses the
most "optimistic" of those in 23 African countries surveyed.
Since then, qualification for massive debt relief under the

Clive

Highly Indebted Poor Countries (HIPC) initiative has further
brightened the outlook for the country. It has been the
government's willingness and ability to successfully undertake
economic reform, however, that has made this war torn country

so confident about its own future. log f2t-

The positive results of economic reform are obvious. All
indications are that a period of rapid economic expansion has
begun. Economists are revising 1997 estimates of growth upward
from 8 percent to 12 percent. Domestic credit to the economy
in 1997 grew 44 percent in real terms, and is expected to grow
another 30 percent in 1998. Major foreign investment projects
are beginning to materialize, most noticeably the $1.3 billion
MOZAL aluminum smelter, the $2.5 billion Maputo Integrated
Steel Project, the $ 500 million Gencor Heavy Sands processing
and smelter project in the north, and the $300 million Maputo
Corridor Toll Road.

While the economic reform effort over the past three years
has been comprehensive, it is still unfinished. The successes
scored in 1996 and 1997 have convinced most rank and file
officials of the correctness of the government's course, and
most have become willing collaborators. The reform effort will
have to deepen over the next few years to meet increasing
demands on the government from the public and from major
foreign investors. The lack of human capacity within
government and the country at large is acute. For this reason,
human capacity building must be structured into every aspect of
foreign assistance. As Minister of Planning and Finance Tomaz
Salomdo recently emphasized, “We have to train, train, train.”

One question on the minds of Mozambicans is how Mozambique
will be treated under the President's Partnership for Economic
Growth and Opportunity. Short listed but excluded from the
itineraries of a number of high level U.S. official visitors
the past 12 months, the GRM is wondering whether its reform
effort has been recognized by Washington, HIPC
notwithstanding. Secretary Rubin's trip is an excellent
opportunity to convey to the GRM that Washington is aware of
the success story being written here, and that there is an
appropriate place for Mozambique within the President's
Partnership with Africa.

On the table with Mozambique is a U.S. bilateral investment
treaty (BIT). The GRM has accepted the premise of a U.S. BIT,
and wants to move rapidly on it. With Enron, Arco, Cabot, the
Railroad Development Corporation, and Seaboard investing

00500000002071


consortium which is negotiating long term concession rights
to invest in upgrading and managing port and rail services
along the northern Nacala Corridor. Up to $ 80 million may
be involved.

In addition to ongoing tax, customs, and commercial code
reform, what will be needed to support this level of investment
is improved infrastructure, a judicial regime that inspires
confidence, and a strong GRM focus on building human capacity.

Mozambique has natural gas, coal, and hydropower and the
energy sector has attracted considerable foreign investor
attention. A new energy policy has provided the framework for
the government to concession almost all available territory in
Mozambique’s sedentary basin for oil and gas exploration.
Those engaged include major international companies such as
Enron, Arco, British Petroleum, Lonropet (a division of
Lonrho), SASOL, as well as junior companies such as the
Canadian Scimitar, Antrium, and Canops companies, and Norwegian
Norbay. Of this group, British Petroleum and Lonropet have
made it clear that they are looking primarily for oil.

In Tete Province, Cahora Bassa Dam, the second largest in
Africa, can produce 1700 MW (firm) of power. Repair of
war-damaged transmission lines from the dam to South Africa and
Zimbabwe was completed in 1997, enabling the export of 900 MW
to South Africa, 500 MW to Zimbabwe. The dam is 82 percent
owned by the Portuguese Government (which just announced its
intention to sell), and 18 percent owned by the Mozambican
government. A European funded feasibility study will soon get
started to determine whether to develop the North Shore of
Cahora Bassa and/or build a second major dam downstream on the
Zambezi River. Nearby at Moatize, the U.S. Trade and
Development Agency is considering whether to fund a feasibility
study to gauge the prospect of using steam coal to fuel a 1000
MW power plant. The additional power may be piped to Beira and
then on to Maputo, or feed into the newly created Southern
Africa Power Pool under SADC.

Mozambique promises to be an important supplier of
transportation services to South Africa, Swaziland, Zimbabwe,
Malawi, Zambia, and Botswana. In addition to the northern
Nacala Corridor, major investments are expected from the chosen
private managers of the Port of Maputo and southern rail
systems. Management of the Port of Beira and the central rail
system should be privatized next in 1999. In 1997, the
government launched a TVA like effort to develop the Zambezi
River Valley, along the war damaged Sena rail line from Beira,
passed sugar plantations now undergoing privatization and on to
Tete Province and the Moatize coal fields, where coking coal is
abundant. The African Development Bank funded Louis Berger
International to analyze the restructuring of Mozambican
Airports, opening the way for private management concessions in
most every area. Meanwhile, road, coastal shipping, and air
transportation has also been liberalized.

00500000002075


Annex B

UNDER SECRETARY OF STATE
FOR ECONOMIC,
BUSINESS, AND AGRICULTURAL AFFAIRS

WASHINGTON

SENSITIVE BUT UNCLASSIFIED

February 17, 2000
TO: OPIC Board
FROM: Under Secretary of State Alan P. Larson

SUBJECT: Gaza Power Plant Project

At the December 14" meeting of the OPIC Board, Board members raised several
questions regarding the Enron Power Plant project in Gaza for which OPIC is being
asked to provide approximately $54 million in financing. Detailed below are responses
to each of these issues. I believe that the information below fully addresses the Board’s
concems and recommend that the Board vote expeditiously to approve the project.

The Saudi Bin Ladin Group

The firm's history and reputation The Saudi Bin Ladin Group is one of Saudi Arabia's
largest companies. Its activities include construction, industrial and power projects,
petroleum, chemicals and mining, telecommunications, operations and maintenance,
manufacturing, trading, and satellite communications. The firm’s estimated net worth is
$1 billion, and it employs more than 35,000 people. Known as “builders to the king,” the
company has been the Saudi Government's prime contractor for building the kingdom's
highways and was in charge of the $6 billion project to renovate and expand the Holy
Mosques in Mecca and Medina. It has also built many of the palaces occupied by senior
members of the Royal Family. The company has subsidiaries and offices in Canada,
Cyprus, Egypt, France, Germany, Jordan, Indonesia, Italy, Lebanon, Malaysia, Spain,
Switzerland, UAE, the U.K., and the United States.

Working in partnership with both the U.S. government and with U.S. firms overseas, the
Saudi Bin Ladin Group has engaged in many of the Middle East region's largest
infrastructure projects. The company is building the PP9 power plant in Riyadh ina $1
billion joint venture with General Electric (to be completed in 2000). Similarly, it has
worked with Raytheon and Bechtel on large power projects in Saudi Arabia. In 1997, it
also partnered with Enron for an ultimately unsuccessful bid on the $1.2 billion
1,750MW Shuaiba power plant project. It built the housing for U.S. Military Forces at
Eskan Village in Riyadh and at the Prince Sultan Airbase near Al-kharj. Among the
company’s other major intemational projects is the runway construction at the new
international airport in Kuala Lumpur, Malaysia. The Saudi Bin Ladin Group is widely
regarded as a reliable and well-connected business partner.

SENSITIVE BUT UNCLASSIFIED

00100000000311


‘ACTION: 6000-01

INFO: 501 DISK-0) 4121-01 534-01 6110-01 3150-01 3133-01
REVIEW COPY-01 6100-01 500-01 1003-01 520-01 4210-01 4212-01
6731-01 6901-01 OSO1-01 4211-01

morelle analyst2:0 357/1943Z (TOTAL COPIES: 18)

RR RUCPDOC

DE RUEHAK #8414/01 3571529

ZNR UUUUU 22H

R221529Z DEC 00

FM AMEMBASSY ANKARA

TO RUCPDOC/USDOC WASHDC
RUEHC/SECSTATE WASHDC 0127

INFO RUEHIT/AMCONSUL ISTANBUL 1122
RUEHDA/AMCONSUL ADANA 8252

BT
UNCLAS SECTION 01 OF 04 ANKARA 008414

STATE PASS TO EX-IM BANK FOR JULIE PANARO
STATE PASS TO OPIC FOR ATARBUSH, BTREADWELL, CENGSTROM
STATE PASS TO TDA FOR DSTEIN

USDOC FOR 6000/ITA/TD/AS/AC/JBRANDES/TSCHUNG
USDOC FOR 3150/USFCS/OIO/EUR/PBRADLEY/CPOZA
USDOC FOR 4212/ITA/MAC/OEURA/CPD/DDEFALCO
USDOC FOR 61 10/TA/TD/OBI/OEIM/MBEEMAN

5.0. 12958: N/A

TAGS: ENRG, BTIO, EINV, EXIM, TU

SUBJECT: U.S. ENERGY PROJECTS IN TURKEY - THE YEAR IN
REVIEW

1, OVER THE LAST SEVERAL YEARS, THE U.S. EMBASSY IN

ANKARA HAS COORDINATED AN ALL OUT USG, INTER-AGENCY
EFFORT TO ADVOCATE ON BEHALF OF U.S, FIRMS IN THEIR

PURSUIT OF POWER PROJECTS IN TURKEY. WITH THE HELP OF

THE ADVOCACY CENTER, WE HAVE TAPPED INTO THE HIGHEST
LEVELS AT COMMERCE, STATE, ENERGY, EXIM, OPIC, TDA, THE

NSC AND ELSEWHERE TO GARNER THE SUPPORT THE AMERICAN
COMPANIES NEEDED TO COME THIS FAR. TELEPHONE CALLS,

OFFICE CALLS, FAXES, ENERGY WORKING GROUPS, BILATERALS,

THE JOINT ECONOMIC COMMISSION, TRADE AND INVESTMENT
FRAMEWORK AGREEMENT, JOINT STATEMENTS, AND A PRESIDENTIAL
VISIT HAVE ALL PLAYED KEY ROLES IN THE SUCCESSES OF OUR

U.S. FIRMS. WHILE THESE COMPANIES WILL CONTINUE TO SEEK

OUR HELP TO OVERCOME HURDLES ON THE ROAD AHEAD, WE SHOULD
CONGRATULATE THEM ON THEIR PATIENCE AND PERSEVERANCE

WILL PLAY A MAJOR PART IN GUARANTEEING TURKEY'S ABILITY
‘TO MEET ITS ENERGY NEEDS WELL INTO THE TWENTY-FIRST
CENTURY.

‘TURNKEY DAM AND HYDROELECTRIC POWER PLANT PROJECTS (HEPP)

2. INFEBRUARY 1998, U.S. SECRETARY OF COMMERCE WILLIAM
DALEY AND TURKEY'S MINISTER OF ENERGY AND NATURAL
RESOURCES SIGNED A JOINT STATEMENT FOR THE DEVELOPMENT OF
9 DAM AND HYDROELECTRIC POWER PROJECTS IN TURKEY. DURING
PRESIDENT CLINTON'S NOVEMBER 1999 VISIT TO TURKEY,
SECRETARIES ALBRIGHT AND RICHARDSON WITNESSED THE
CONTRACT SIGNINGS FOR FIVE OF THESE PROJECTS: THREE FOR.

THE DESIGN/ENGINEERING OF THE HAKKARI, ALPASLAN II AND
KONAKTEPE HYDRO PROJECTS AND TWO FOR THE CONSTRUCTION, OF
THE KARGI AND GURSOGUT HYDRO PROJECTS. SUBSEQUENTLY,
DURING THE COURSE OF THIS YEAR, U.S. COMPANIES HAVE ALSO
SIGNED CONTRACTS FOR THE ENGINEERING/DESIGN OF THE ERIC,
PERVARI AND DURAK DAM AND HYDRO PROJECTS. THESE PROJECTS

( FAA 6206 406 VII SReBRws Mev solu

=

00500000001629


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PAGE G1 OF a2 H1D=199812101681
CAVEAT IS) =

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B1/19487 ‘NUD 199812101661
roaTss. [(b)(6)] BRIEFED THE CHARGE

TWMEDIATELY FOLLOWING THEIR MEETING WITH THE PRESIDENT.

5394 B1/19487

ACTION = CTRSDEPD (1) oG1 (1) + 1BRD (1) 108 (1) e 10 (1) «100 (1) IMLAY)

QC (1) «SEM (-) U0 (1)
CRC = 6709

00 RUEATRS

DE RUEWOG 2157/81 1211936

TAY CCCCE 22H

0 119362 MAY 98

FM AMEMBASSY SANTO DOMINGO

TO RUEHC/SECSTATE WASHDC IMMEDIATE $352
IMFO RUEKPU/AMEMBASSY PORT AU PRINCE 8775
RUCPOOC/USDOC WASHDC

oT

CONFIDENT 1 AL SECTION BI OF 82 SANTO DOMINGO GB21S7

USDOC FOR 3134/USFCS/OLO/WA/RD
USDOC FOR 4322/1 TA/1EP/WH/OMCB/ SIEGELMAN

€.0, 12958: DECL: 04/24/2083

TAGS: ENRG: DR

SUBJECT: SHITH-ENRON: MEETING WITH PRESIDENT
FERNANDEZ 1S POSITIVE/AFTERMATH 1SH’T

REF: SANTO DOMINGO 1898 AND PREVIOUS

W) CLASSIFIED BY LINDA E. WATTs CHARGE D' AFFAIRES
ALL? REASON: 1.50).

1. (C) SUMMARY: REPRESENTATIVES OF SMITA-ENRON AND
ENRON INTERNATIONAL CALLED OM PRESIDENT FERKANDEZ APRIL
23. THEY TOLD THE PRESIDENT THE PENALTIES COE IS HOW
ASSESSING AGAINST SMITH-ENRON FOR PRODUCTION BELOW TRE
RATED CAPACITY OF THE PLANT ARE bya) THEY
DISCUSSED THE ON-GOING CONTRACT NEGOTIATIONS: URGING
THAT THERE BE SOME CONTINUITY IN THE COE NEGOTIATING
COMMISSION, THE PRESIDENT DIRECTED PRESENT AND FORMER
[(b)(1)] TO SERVE ON THE
COMMISSION AND WAS SYMPATHETIC TO THE RESUMPTION OF
NEGOTIATIONS ON THE BASIS OF THE LAST DOCUMENT TABLED.
SMITH-EWRON RECEIVED A PAYMENT ON MAY T AFTER ANOTHER
WEEK OF ROADBLOCKS THROWN UP BY COE. CDE HAS ALSO
PROPOSED THAT THE WORLD BANK/INTERNATIONAL FINARCE

Cont D- RESUME
PORATION BROKERED-TALKS pa {()(4)]

2 oO
[(b)(6)]
CALLED ON PRESIDENT LEOKEL
FERKANDEL ON APRIL 23. THE PRESIDENT WAS ACCONPANICD
BY CURRENT COE ADMINISTRATOR READAMES SEGURA AND FORKER
AOMIMISTRATOR, NOW TECHNICAL SECRETARY, TEMISTOCLES

[(b)(4) , (b)(8)]

CONTRACT PENALTIES

4 1b) (GPO THE PRESIDENT EWRON BELIEVES THE
rut rt) COE FOR PRODUCTION BELOW RATED
CAPACITY (THE SO-CALLED “DOUBLE CLIPs") IS {(o)(4)1

TRE PRESIDENT SEEMED SYMPATHETIC TO THIS
ARGUMENT AND INFORNED[ (D THE MONEY 1S IN THE
BANK TO MAKE TREM A PAYMENT, SEGURA SAID HE WOULD
CONSIDER SUSPENDING THE PENALTY ON FUTURE INVOICES
BECAUSE OF IMPROVED PLANT OPERATIONS.

[(b)(1) , (b)(4)]

CONTRACT

$. OC) WITH REFERENCE TO THE TALKS BROKERED BY THE
WORLD BANK/ INTERNATIONAL FINANCE CORPORATION (FC)s
(oye THE PRESIDENT THAT ENRON WILL NEGOTIATE

THE BASTS OF A DRAFT MOU TABLED BY THE CDE BOARD ON
DECEMBER 24 1997. ENROM WILL NOT RETURN TO “GROUND
TEROTM AS PROPOSED BY CDE. THE PRESIDENT REMARKED THAT
THE ORIGINAL CONTRACT WAS VERY FAVORABLE TO SMITH-
mane (YG ISPONDED THAT ENRON HAD MADE A NUMBER
OF IMPORT 'SSIONS TO MAKE IT MORE BALANCED IN
THE 1997 NEGOTIATIONS. (bys $0 SUGGESTED TO THE
PRESIDENT THAT IT WOULD BE HELI IF THERE WERE SOME
CONTINUITY IM TRE COE NEGOTIATING COMMITTEE QHOTE: THE
ENTIRE COE BOARD: WITH TRE EXCEPTION OF BOARD PRESIDENT
CELSO MARRANZINIs WAS REPLACED THREE WEEKS AGO,

{(b)(1) , (b)(6)]

PRESIDENT
FERNANDEZ AGREED THERE SHOULO BE CONTINUITY ON THE
NEGOTIATING COMMITTEE AND INSTRUCTED [(b)(1)]
THAT THEY SHOULD BOTH PARTICIPATE. RE ALSO INSTRUCTED
THAT THE TALKS RESUME ON THE BASIS THEY WERE LEFT IN
DECEMBER 1997,

CONFIDENTIAL
0500000000778


<S—S—oOSrnon

PUR UCU UCUEOOOSCOLOELY|

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CAVEAT S) =

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ACTION = [TRS] BOI 1)» IBRD ¢t}y IDB (1) + ENN)» OFMF (1)+ QC (1)+ SEN (-)

UO (1+ XAA XLT 1) ~

CRC = @B6A ,

PP RUEATRS

OE RUEHOS #9418 0390748

ZNR UUUUU ZZH

P 0807482 FEB 38

FM AMEMBASSY LAGOS

TO RUEHC/SECSTATE WASHDC PRIORITY O051
INFO RHEBAAA/USDOE WASHOC
RUEHUJA/USLO ABUJA 1689

BT .

UNCLAS LAGOS 680416

SENSITIVE BUT UNCLASSIFIED -

HANDLE ACCORDINGLY

—.0. 12958: N/A
TAGS: ETTC: ECON, PGOV NI
SUBJECT: ENRON CONTRACT TO BE REVIEWED

REF: LAGOS 0132

1, () ACCORDING TO LOCAL MEDIA REPORTS: ON FEBRUARY 4
BUREAU OF PUBLIC ENTERPRISE DIRECTOR GENERAL NASIR EL-
RUFFAI SAID THAT THE GON WILL QUOTE REVIEW UNQUOTE
ENRON’ S CONTRACT TO GENERATE POWER FROM BARGES IN LAGOS
STATE. THE REVIEW WILL REPORTEDLY BE CONDUCTED BY THE
GON COMMITTEE RECENTLY SET UP TO GUIDE THAT SECTOR
TOWARD PRIVATIZATION.

2. (SBU) COMMENT: IN GON PARLANCE: REVIEWING IS A
NORMALLY LENGTHY AND MURKY PROCESS THAT IMPLIES AN
ALLEGATION OF SOME SORT OF MALPRACTICE. BPE'S RUFFAI IS
A KNOWN OPPONENT OF THE ENRON CONTRACT (REFTEL). IF ° THE
GON IS IN FACT REVIEWING THE ENRON CONTRACT: PROSPECTS
FOR BREAKING THE CONTRACT FREE ANYTIME SOON WOULD SEEM
TO BE RECEDING.

3. (SBU) COMMENT CONTINUED: THE GON'S FOOT DRAGGING ON A
SIGNED CONTRACT SENDS NEGATIVE SIGNALS TO FOREIGN
INVESTORS (REFTEL). MOREOVER: IF A COMPANY LIKE ENRON:
REPUTED FOR NAVIGATING TURBULENT THIRD WORLD WATERS:
CANNOT MAKE WORK WHAT IS: IN THE MINOS OF SOME: A QUOTE
NO BRAINER UNQUOTE FOR NIGERIA: THEN WHO CAN? ON THE
OTHER HANO: NIGERIAN AND EXPATRIATE BUSINESSMEN ARE
INCREASINGLY VOCAL IN THEIR PRIVATE CRITICISM OF ENRON’ S
APPROACH TO NEGOTIATING AND THEN LAUNCHING ITS CONTRACT.
PART OF THE DISCORD STEMS FROM WILDLY VARYING ESTIMATES
OF WHAT THE CONTRACT WILL COST THE GON IN

INCREASED SUBSIDIES: BUT ANOTHER ISSUE SEEMS TO BE
ENRON'S ALLEGEDLY LEGALISTIC APPROACH TO BUSINESS IN A
HIGHLY POLITICAL AND STILL PERSONALITY-BASED
ENVIRONMENT. AS ONE PERHAPS JEALOUS INVESTMENT BANKER
REMARKED TO US: .ENRON SHOULD HAVE SURROUNDED ITSELF WITH
FEWER LAWYERS ANDO MORE INTERMEDIARIES WELL AND FAVORABLY
KNOWN TO THE RELEVANT MINISTRIES AND PARASTATALS.

TWADDELL
eT

#0416
OB5A
NNNN

UNCLASSIFIED
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PAGE 82 OF 82 ‘1052081 1232066! 363479818152
ISSUED OW APRIL 4.

* OCTOBER -- SECOND BLOCK OF PHASE TWO (742 MW) SCHEDULED 10.60 ON
LINE AT DPC. ve

COMF IDENT! AL SECTION 82 OF 62 MUMBAI 98726

STATE PASS EXIMBANK FOR RITA MURRELL/DONNA SCHNEIDER
STATE PASS OPIC FOR LOREN ROOWIM AND RUTH ANN NICASTRI
STATE PASS USTR FOR RICK RUZICKA

STATE PASS SEC FOR MARISA LAGO

TREASURY FOR GEETHA RAO

USDOC FOR 3131 /010/ANESA/KBRENNAN
USDOC FOR 4538/KAC/OSAO/ASTERN
USDOC FOR 4532/MAC/OSAO/RHARDING

£8 12958: DEC: 65/07/2818

TAGS: EMRGs EFIN» ECON: IN

SUBJECT: WAY L1 MEETING WILL BE INCOHCLUSIVE FOR ENRON/DPC;
TERMINATION LIKELY TO FOLLOW

REF: A) MUMBAI 78. 8) MUMBAI G83 AND PREVIOUS

[(b)(1) , (b)(4)]

G000
ar
#706
are
NI

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{(b)(1) , (b)(4)]

CONFIDENTIAL SECTION €2 OF 82 SANTO DOMINGO 258726

USDOC FOR 3134/USFCS/O10/WH/RD
USDOC FOR 4322/1 TA/1EP/WE/ONCB/SIEGELMAN

£,0, 12988: DECL: 11/27/2863
TAGS: EWRG EINV PREL DR
SUBJECT: PRESIDENT SAYS CDE CAPITALIZATION 1S ON

{(b)(1) , (b)(4)]

$C) THE IPPS ARE GETTING CLOSER TO AN AGREEMENT WITH
THE GOOR. AS REPORTED SEPTELS HOWEVER, SHITH-ENRON
AND AES NEED MONEY BADLY. [(b)(4)]

WalT
8T
15826
1188

CONF INFNTIAL

00500000000770


VJ — aH — Seno

ROUTINE

UNCLASSIFIED

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CAVEAT (S) =
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TLD» O1ME (1) «06 (1) »SEN (1,00 «D)

ORC = S097

MID=199835821538 25548 ‘TA/15182

RR RUEATRS

DE RUEHOG 6460/81 358iSa0

Iya WUUUU 22H

R 241S@87 DEC 98

FM AMEMBASSY SANTO DOMINGO

TO RUEHC/SECSTATE WASRDC 3195

IMFO RUEHPU/AMEMBASSY PORT AU PRINCE 1289
RUCPDOC/USDOC WASHOE

eT

UNCLAS SECTION @1 OF @2 SANTO DOMINGO 296468

USOOC FOR 3134/USFCS/010/\H/20
USDOC FOR $322/1TA/IEP/WH/ONCR/SIEGELMAN

SENSITIVE PA pge®
Bk
\
£0, 12988: WA ap
TAGS: EARG EINY PREL DR D wn Fe 6
SUBJECT; ELECTRICITY SECTOR WRAP-UP Re o~
REFTEL: SANTO DOMINGO 6238 AND PREVIOUS

1, SENSITIVE BUT UNCLASSIFIED. MANOLE ACCORDINGLY.

2. (SBUI SUMMARY: ELECTRICITY SECTOR OBSERVERS WELCOME
THE THIRD POSTPONEMENT CF COE’S CAPITALIZATION: FEARING
IT WOULD HAVE BEEN A FAILURE DUE TO BIDOER RESERVATIONS
OVER QUESTIONS STILL OUTSTANDING. CDE BAS PLEDGED T0
AXE THE PAYMENTS NECESSARY TO GET SMITR-ENRON OUT OF
OEFAULT BY THE END OF DECEMBER. IN THE MEANTIME:
HOWEVER. PAYMENT DELAYS HAVE LED COASTAL AND SEABOARD
TO SEND IN THEIR OWM SHUTDOWN NOTICE ANO CDE iS
SCRAMBLING TO GET MONEY QUT OF THE CENTRAL GOVERNMENT
TO MAKE SOME PAYMENTS. END SUMMARY.

I TALIZATION POSTPONED

3. W) AS REPORTED REFTELs THE CAPITALIZATION OF THE
STATE-OWNED ELECTRICITY COMPANY: CORPORACION DOMINICANA
OE ELECTRICIOAD (CDE)s HAS BEEN POSTPONED FOR THE THIRD
TINE, INDUSTRY SOURCES TELL US THAT ONLY ONE, OR
POSSIBLY TWO. COMPANIES WERE WILLING TO BID AT THIS
TINE OM THE THREE DISTRIBUTION COMPANIES THAT WERE TO
HAVE BEEN OFFERED OM DECEMBER 17. WITHOUT THE
DISTRIBUTION COMPANIES IM PLACEs THE OFFERING OF THE
TWO THERMAL GENERATION COMPANIES ON DECEMBER 21 WOULD

UNCLASSIFIED

MiD=199839801598
ALSO NOT HAVE SUCCEEDED.

225848

4. (SBU) THE COMMISSION FOR THE REFORM OF PUBLIC SECTOR
COMPANIES (CREP)» WHICH MANAGES THE CAPITALIZATION
PROCESS: PUTS THE BLAME FOR THE POSTPONEMENT ON CURRENT
FINANCIAL MARKET CONDITIONS PARTICULARLY FOR THE WOULD~
BE EUROPEAN PARTICIPANTS. ANOTHER REASOM OFFERED WAS
THAT SOME FIRMS HAD MOT SEEN ABLE TO FINISH EVALUATING
THE DAMAGE CAUSED BY HURRICANE GEORGES. CREP DIRECTOR
ISA CONDE: IN A DECEMBER 23 MEETING WITH ECO/POL
COUNSELOR: SAID BLUNTLY THAT HE SAD REALIZED THAT THEY
WERE “IN SUCH A POOR POSITION: WE COULDN'T TAKE THE
RISK OF FAILURE.“ ISA CONDE> LOOKING HARRIED, SAID THE
CAPITALIZATION WILL TAKE PLACE 1M FEBRUARY OR MARCH
1999, HE CONFIRMED THAT HE HIMSELF WILL TRAVEL TO MEET
WITH THE COMPANIES THAT HAVE SHOWN THE INTEREST IN THE
CAPITALIZATION IH JANUARY.

$. WW) INDUSTRY SOURCES POINT TO MORE FUNDAMENTAL
PROBLENS WITH THE OFFERING: SAYING THAT TOO MAMY
QUESTIONS REMAIN QUISTANOING. WOULD-BE BIDDERS HAVE
REPORTEDLY NEVER RECEIVED AN ANSWER TO THE QUESTION OF
WHAT THE GOOR WILL D0 IF THE DISTRISUTION COMPANIES CUT
OFF POWER TO THE NOM-PAYING POOR (HOTE: OR RICH). THE
CREP HAS VALUED COE"S ASSETS AT USS6GB MILLION WHICH IS
HIGHER THAN EXPECTED ANO ALSQs MANY BELIEVE: HIGHER
THAN IS WARRANTED BY THE CDE AUDIT WHICH INDUSTRY
SOURCES SAY IS STILL INCOMPLETE,

6. (WIM SUMs INDUSTRY REPRESENTATIVES WELCOME THE
POSTPONEMENT, SAYING IT WAS PRACTICAL. SHITH-ERRON’S
[(1b)(6)] comenreo To EcoNore THAT IT WOULD HAVE
BEEN DIFFICULT IN TRE RUM UP TO THE CHRISTMAS SEASON TO
GET THE NECESSARY ENROM PERSONNEL TO SIGH OFF ON A 81D,
THE INDUSTRY 1S HOPEFUL THAT THE CREP AND CDE WILL,
GETWEEM THEM. DO THE WORK STILL NECESSARY FOR A
SUCCESSFUL CAPITALIZATION.

{(b)(4)]

ENRON HAS REPORTEDLY RECOMMENDED THAT THE
LENDERS DRAW ON THE NON-RENEWABLE ENRON GUARANTEE FOR
THE REMAINING FUNDS.

WHILE OTHERS NOT PAID

8, (SBU) AS COE iS DEDICATING AVAILABLE FUNDS TO SMITH-

ASIST

00500000000025


COMMITTEES & SUBCOMMITTEES
Tokyo

corporate governance, incentive-based compensation, financing
alternatives and exit strategies.

Programs*

Chair C., Joseph Lestage, Capital Investment &
Realty, Inc.

Organizes breakfast, lunch, and evening programs featuring

speakers of general interest. Programs have included global

CEOs from American and Japanese companies as well as

government officials. Plans joint networking events with other

chambers of commerce.

Ratings, Disclosure & Securitization
Chairs Yoshito Hirata, Fidelity Investments Japan Ltd.
Jeffrey T. Shimamoto, White & Case LLP
Promotes greater transparency and full disclosure in Japanese
financial markets. Works to advance the utilization of credit risk
evaluation/analysis within the financial community. Formulates
and presents Viewpoints on developments and regulations
involving credit rating and financial disclosure matters to the
relevant Japanese regulatory and governmental authorities.

Real Estate Finance

Chair Eric J. Lucas, Babcock & Brown Co., Ltd.
Focused on all aspects of the rapidly developing real estate
finance market in Japan. Aims to facilitate informed and effective
ACCJ member input/involvement as important new legal and
structural changes are introduced in areas such as real estate
investment trusts, tenancy laws and real estate taxation reform.

Securities

Chair Edmond L. Papantonio, Lehman Brothers
Japan, Inc.

Works to analyze issues of concern to the securities industry,

develop positions on such matters for the Chamber and bring

together the Chamber's resources into a proactive stance on

such matters.

Taxation*

Chair Gary M. Thomas, White & Case LLP

Provides information on changes in U.S. and Japanese tax laws
and other legislative matters. Develops lobbying positions on tax
or financial issues. Helps to further the dialogue between U.S.
and Japanese government officials on tax and financial
legislative matters.

Tax Treaty

Chair Michael D. Cannon, PricewaterhouseCoopers
A committee formed to investigate the possibility of a new tax
treaty between Japan and the United States.

Technology*

Chair Michael J. Alfant, Building2 KK

Supports and promotes the expansion and diversification of
sales of high-tech goods and services by American companies
in Japan. Programs include guest speakers from government,
leading technology companies and service providers.

Telecommunications
Chair Michael Kawachi, Lucent Technologies Japan
Ltd.

Peter Butterfield, KVH Telecom
Provides a forum for discussion of trends, technological
innovations and marketplace conditions in Japan.

Telemarketing

Chair Alejandro Font, Telemarketing Japan, Inc.
Sponsors programs that cover a broad range of telemarketing
issues: operations, quality assurance, work staff management
processes, as well as systems and database innovations within
the telemarketing industry.

Toiletries, Cosmetics, & Fragrances*

Chair Koichi Takashima, Procter & Gamble Far East,
Inc.

Works toward international cooperation with respect to

regulation of cosmetic products. Strives for consistent laws and

guidelines that apply equally to all industry members.

Transfer Pricing

Chair Gary M. Thomas, White & Case LLP
Follows developments and recommends changes to Japan's
transfer pricing policies.

Transportation & Logistics*

Chair Tad Johnson, P & W Aftermarket Japan, KK
Works toward the efficient use of air, sea and land
transportation. Monitors legislation that affects equal access and
free competition in the logistics service industry,

Travel Industry*

Chairs Fumi Akasaka, Carlson Wagonlit Travel Japan
(JTB-CWT Business Travel Solutions)
Andrew A. Zimmerman, Northwest Airlines,
Inc.

Promotes U.S. travel-related businesses and provides

networking opportunities and educational programs for

members. Active participants include representatives from

hotels, airlines, resorts, agencies and other travel-related

industries.

University Briefing Breakfast"

Chair David H. Satterwhite Ph.D., The Economist
Group (Asia/Pacific) Ltd.

Organizes Q & A sessions to help American students and

educators learn about doing business in Japan directly from

Americans who live and work here.

00500000000017


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commitments for trading in three types of financial instruments (derivatives, exchange
and interest rate instruments, and bullion and other negotiable instruments), and the full
range of information and advisory services. We have also requested that Korea bind
remaining commitments for cross-border services, including for life insurance and
financial information and advisory services, in which Korea made no cross border
reservations under the OECD. Ina letter of May 20, 1999, Korea agreed to bind three
more areas: commercial presence for 100% bank subsidiaries and trading of derivatives,
exchange rate and interest rate instruments, and other negotiable instruments, and mode
2 foreign exchange trading services. We have told the Koreans this still is not enough
and are developing a written response to that effect which draws on OECD Secretariat
expertise.

VI. EQUITY/PRIVATIZATION:
This area falls under the Macroeconomic Policies section of Korea’s Letter of Intent to the IMF.
However, privatizations are of interest to potential U.S. investors. Following is the status of

privatization of various government-owned or -invested entities in Korea:

. The National Textbook Company, Korea Technology Banking Corporation, and Namhae
Chemical Corporation have been privatized.

° POSCO sale of 5.8% has reduced public ownership to 20.8%

. Bidding for Korea Heavy Industries (Hanjung), originally scheduled for February, has

been delayed.

. Korea General Chemicals pending

. Korea Ginseng and Tobacco, Korea District Heating will occur in phases over the next
four years.

. Korea Gas (KOGAS): after short-listing three candidates (Osaka Gas, British Gas, GIC-
Singapore), KOGAS called off the process. Enron bid from the U.S. Possible IPO in the
fall.

. Daehan Oil Pipeline will go forward but only with local companies bidding the first
round. No interest from foreign companies.

. Korea Power Company (KEPCO): currently 53.2% government-owned, 46.8% private
(19% U.S., 27.8% Korean).

. Korea Telecom has been publicly listed and the ROKG will reduce its share to 33.4% by
2000.

00500000002408


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PAGE at §10=2081 03508983 S1Sie =A LLALZ 10=200183520903 B1S1d = BILAL
BANDLE VIA NOTIFICATION TO ENRON THAT IT WAS MOF GOING TO HOMOR ITS COUNTER-
ACTION = (TRSJGON (1) eCALL (2) GIUN (1) IDB (1) HDC (1) IMB IL) 2iMF\Q) ISH)» GUARANTEE ON DAGHOL REFTELI. THE GOI"S CHANGE IN POSITION FROM
ATF (LD STL UU) cOUME (1) 4 QC (1) SEN I=} 2 TSOM (+) CRO = ELBC N EARLIER -- WHEN IT HAD CLEARLY STATED LTS INTENT TO HONOR THE
a CONTRACT IF THE STATE COULD NOT PAY HAS SURPRISED ENRON/DPC.
PP RUEATRS
OE RUSBAY #8548 0951142 ) ((O)(4)]
TNR UUUUU ZZ8 (NOTE: SINCE MSEB HAS PAID THE FEBRUARY BILL AND THE
PR OSLLAZL APR BI ge STATE GUARANTEE HAS JUST NOW BEEN INVOKED FOR JANUARY, ONLY THE
FI ANCONSUL MUMBAI As DECEMBER GILL 1S UNDER DISPUTE 1H ARBITRATION. HOWEVER, THE DAMAGE
TO RUEHC/SECSTATE WASHDC PRIORITY 2111 AMOUNT CAN BE AMENDED TO INCORPORATE SUBSEQUENT NOM-PAYMENTS IF THE
IMFO AUEHNE/AMEMBASSY NEW DELHI 7536 ARBITRATION ORAGS ON. END NOTE. 1
RUEHCI/AMCONSUL CALCUTTA 1475
RUEHCG/AMCONSUL CHENNAI 3961 és
RUEATRS/TREASOEPT WASHOC 6
RUCPDOC/USDOC WASHOC 8866 w
ar C000
UNCLAS MUMBAI 28548 4 ar
90548
STATE PASS EXIMBANK FOR RITA MURRELL/DONNA SCANEIDER E18
STATE PASS OPIC FOR BRIOGET WILLIAMS AND RUTH ANN NICASTRI NWN

STATE PASS USTR FOR RICK RUZICKA

STATE PASS SEC FOR MARISA LAGO

STATE PASS TO CURRAN AT SAM FRANCISCO FED
TREASURY FOR GEETHA RAO

USDOC FOR 3131/C10/ANESA/KBRENNAN
USDOC FOR $538/MAC/OSAO/ASTERN
USDOC FOR RRARDING

|
SENSITIVE
Vv

Ec. wzssa: wa
Tac: ERG. EFAMs ECON EINVe IN
SUBJECT: OABHOL R COMPANY CALLS FOR ARBITRATION

REF: MEW DELHI 2397

1, (BU) ON APRIL 41 2081s THE OABHOL
CLAIM IN THE LONDON COURT OF ARBITRATION AND ISSUED NOTICES OF
CONCILIATION AND ARBITRATION TO THE GOVERNMENT OF INDIA (GOI) IN }
rH reas WITH THE YQU-PAYMENT OF THE DECEMBER 2088 BILL OL 322 j
(a WILLION, DPC HAS ALSO INVOKED THE STATE GUARANTEE FOR NON-PAYMENT |
j OF THE JANUARY BILis WHICH AMOUNTS TO $24 MELLION {INCLUDING
INTEREST). UNDER THE NOTICE OF CONCILIATION. THE GOI HAS THE OPTION
TO USE THE NEXT SIXTY DAYS TO SEEK MEDIAIION OF THE DISPUTE. IF THE
GO1 CHOOSES NOT TO MEDIATE O8 THE CASE DOESN'T SETTLE WITHIN SIXTY
DAYS. THE PARTIES THEN HAVE THIRTY DAYS IN WHICH TO CHOOSE AN
ARBITRATOR AND TKE CASE GOES TO LONDON, [(b)(4)]

2, (SU) OPC'S ACTIONS COME IM THE WAKE OF LAST WEEK»S GO!

INCL ASSIFIED
01000000001008


ROUTINE UNCLASSIFIED

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

PAGE 62 OF 92 W10=199816681783 4381S AS/1S382

CONSORTIUM MADE COMMITMENTS THAT VENT FAR BEYOND THE NARROW SCOPE
OF THE UTILITY CONCERNED. BERLIN HAS SPEARREADED PRIVATIZATIONS
OF MUNICIPAL UTILITIES SO THAT THE EXPERIENCE GAINED IK THEY.
MAY SERVE AS A MARKER FOR OTHER MUNICIPAL UTILITIES SALES IM THE
FUTURE. THESE FACTORS WILL CERTAINLY PLAY A ROLE IM FUTURE
BERLIN PRIVATIZATIONS - E.G, THE PUBLIC TRANSPORT SYSTEM: THE
REFUSE DISPOSAL UTILITY, AND THE PORT AUTHORITY.

7, TRE LARGE B10 FOR A MINORITY SHARE IN BYB SURPRISED
UNCLAS SECTION 82 OF 62 BERLIN 881192

DEPARTMENT FOR EB AND EUR/AGS

USDOC FOR 6196/1TA/TO/B1/JRASHUSSEN
USDOC FOR 4212/1TA/MAC/OVE/BL TOMLINSON

£.0, 12988: N/A

TAGS: ECON EFINe EINVs PGOV. GH

SUBJECT: BERLIN: GERMANY’S FIRST MAJOR WATERWORKS PRIVATIZATION:
U.S. FIRM ENRON LOSES TO FRANCO-GERMAN CONSORTIUM

OBSERVERS: WHO HAD BELIEVED THAT THE CITY WOULO BE LUCKY TO
ACHIEVE THE OM 2 BILLION IN 1998. THE HIGH BIO PRICE SEEMS TO 8E
THE COST FOR A STRATEGIC GATEWAY TO CENTRAL AND EASTERN EUROPE AS
WELL AS INTO THE NATIONAL WATER MARKET.

$8, DEUTSCHE BANK HAS ESTIMATED A NEED FOR APPROXIMATELY OM 308
BILLION FOR INVESTMENTS IN THE WATER SECTOR IN GERMANY OVER THE
NEXT FEW YEARS: MAINLY IN THE EVER MORE DERELICT PIPELINE
INFRASTRUCTURE, ABOUT 6» #88 MUNICIPALLY-OWNED COMPANIES NOW
OPERATE THE WATER AND EFFLUENTS HANDLING SECTOR WITH THE BENEFIT
OF AREA MONOPOLY STRUCTURES AND FOR CONSUMER PRICES WHICH ARE
‘AMONG THE HIGHEST [M EUROPE, GROWING BUDGETARY CONSTRAINTS MAKE
IT UMLIXELY, HOWEVER: THAT THESE MUNICIPAL OPERATORS WILL BE ABLE
TO RAISE THE FUNDING NECESSARY FOR SUCH INVESTMENTS IN THE FUTURE
OM THEIR OWN SO THAT THE DOOR WILL GE OPENED - HOWEVER,
UNWILLINGLY ~ TO COMMERCIAL OPERATORS IN THE NEAR FUTURE. SUCH
PRIVATIZATIONS: HOWEVERs ARE LIKELY TO REMAIN CONTROVERSIAL.
KORNBLUK

ar

1192

1B6F

WN

UNCLACSIFIEN

00500000000548


PEEEEEE TCO
IMMED | ATE CONFIDENTIAL
DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

PAGE @1 W1D=199735181164 70112 17/13292 MID= 199735101164 maid VANS
CAVEAT) =

HANDLE VIA DOMINICAN POWER PARINERS YET TO 8 PAID

ACTION = (TRSDIML (1) FTAS (1) 100 (1) + SEN (-)0XAA CD eXLT CD =r secceccecnecces:

CRE = 9194

[(b)(4) , (6)(6)]

00 RuEaTRs

O€ RUEHOG 46721 3511212

INY CoeCC 12H

0 1712122 D&C $7

FM ANEMBASSY SANTO DOMINGO

TO RUEHC/SECSTATE WASADC IMMEDIATE 8122

INFO RUEHPU/AMEMBASSY PORT AU PRINCE 8534

a

CONFIDENTIAL SANTO DOMINGO 006721

£.0, 12988: OGL: 12/46/2082

TAGS: ENRG) OR

SUBJECT: STATUS OF CLAIMS ON COE

REF: A. SANTO DOMINGO 6627) 8. SANTO DOMINGO 6637

1, CLASSIFIED BY: LINDA WATT, CHARGE D' AFFAIRES

ALL REASON: 1.9 0).

2% 1 sama: [(b)(4) , (b)(6)]

OME OWN: SHITH-ENROM

2.[(b)(6)] 5. ©) ALTHOUGH: DPP'S CLAIM AGAINST COE HAS NOT YET
CONFIRMED RECEIPT OF PAYMENT IH THE AMOUNT OF $15.% AIT THE PRESS» THE WORD IS QUT IN THE ENERGY SECTOR,
MILLION FROM CDE BY DAY'S END DECEMBER 12. (6)(6)] WHILE SMITH-ENRON CONTINUES TO BE THE MOST CONVENIENT
IMFORIED ECONOFF THE COMPANY EXPECTS TO FIRISH A BOILER SCAPEGOAT FOR THE ILLS OFTHE SECTOR Ty(4y | (b)(6)]
UPGRADE THIS WEEK AND INCREASE POWER GENERATION FROM e
145 10 188 wails ((b)(6) Ba HE 1S CONCERNED

THAT THE PRESS CONT! (0 REPORT COMMENTS BY A NUMBER THE TIMING OF THIS CONFRONTATION IS

OF LOW RANKING GODR OFFICIALS IM FAVOR OF NATIONALIZING UNFORTUNATE -- CDE MAY YET BE ABLE TO CONVINCE

IS PLANT -- THE LATEST 4S A DECEMBER 12 REPORT IN DOMINICANS TREIR CHRISTMAS LIGHTS WERE TURNED OFF BY
LEADING DAILY LISTIN DIARIO QUOTING A SUB-DIRECTOR VILLAINOUS FOREIGN POWER PRODUCERS. WATT

GENERAL OF TAXES AS SAYING THE COMPANY SHOULD BE aT

NATIONALIZED WHILE THE BALAGUER-ADMINISTRAT ION #672

OFFICIALS WHO SIGNED THE CONTRACT WITH SMITH-EMRON 314

SHOULD BE “SUBMITTED TO JUSTICE FOR BETRAYING THE AKDK

WATION,...° ECONOFF REASSURED {(oysye SENIOR

COR OFFICIALS HAD UNOERLINED TO THE EMBASSY THAT THIS

WAS NOT THE POLICY OF THE GoDR.

PANE INENTIAL

00500000000795


a<—S— OS

IMMEDIATE

PAGE BI OF @3
CAVEAT (S) =
HANDLE VIA

WMID=199916682418 e44e28

ACTION = (TRS)BOU (1) +GH (ihr HBRO (t)s FOB (1) » 106 (1) + 100 11). tMB CL)

UML (be ATF (Ue ET] C1) OUMF (1) + QC (1) SEN I+). U0)
CRC = F643

00 RUEATRS

DE RUEHDG #2724/61 1661917

IWR VUUUU 72H

0 1519172 JUN $9

Ft ANEMBASSY SANTO DOMINGO

TO RUEHC/SECSTATE WASHOC IMMEDIATE S886
INFO RUEKPU/AMEMBASSY PORT AU PRICE 1548
RUCPOOC/USDOC WASHDC

RUEBBEA/USOOT WASHDE

a

UNCLAS SECTION 81 OF @2 SANTO DOMINGO 982728

SENSITIVE

OEPT PASS OPIC FOR M. PEREIRA AND H. MONKE IER
DEPT PASS USDOT FOR MARAD

USDOG FOR 3134/USFCS/O1O/WH/RD

USDOC FOR 4322/1TA/1EP/WH/OMCB/ SIEGELMAN

€.0, 12958: N/A
TAGS: ENRG EINV PREL OR
SUBJECT: SMITH-ENRON SETTLES ONCE AGAIK

REFTEL: SANTO DOMINGO 1439
1, SENSITIVE BUT UNCLASSIFIED. HANDLE ACCORDINGLY.

2. (SBU) SUMMARY: AFTER MORE THAN TWO YEARS OF
NEGOTIATIONS: SMITH-ENRON SETTLED ITS ONGOING DISPUTE
WITH THE CORPORATION DOMINICANA DE ELECTRICIDAD (CDE)
OM JUNE 18, THE AGREEMENT RESOLVES ALL THE CLAIMS IN
DISPUTE TURK FOR A USS26 MILLION ECOKORIC
SETTLEMENT. THE PARTIES AGREED TO REVISE AND SIGH A
EW POWER PURCHASE AGREEMENT (PA) BY JUNE 38. THIS IN
TURN WILL BE SUBMITTED TO THE DOMINICAN CONGRESS FOR

RATIFICATION. [(b)(4)]
SMITH-ENRON’S EXECUTIVE DIRECTOR UNDERLINES THAT

THE U.S. MARITIME ADMINISTRATION PORTION OF THE DEBT
WILL BE HIS FIRST PRIORITY. END SUMMARY.

3, (1 INA CLIFF HANGER IN WHICH CDE DEMANDED YET MORE
REVISIONS OUTSIDE TRE AGREED SCOPE OF THE KEGOTIATIONS:
AND EMROK TABLED A HARSH THREAT TO WAIT FOR A RULING BY

UNCLASSIFIED ‘

DEPT TREASURY COMCE
PH 622-2222 RM 1121/M

AZ

MID=199916682418 244023

THE ARBITRATION PANEL? SMITH-EARON SIGNED ITS SO-CALLED
RATIFICATION AGREENENT WITH CDE OM JUNE 18. THE
AGREEMENT RESOLVES ALL THE CLAIMS IN OISPUTE UNDER THE
ARBITRATION STILL ON-GOING IM MEXICO CITY IN
CONSIDERATION FOR THE ECONOMIC SETTLEMENT NEGOTIATED IN
WARCH, THE AGREEMENT ALSO RATIFIES THE FINAL
WEMORANOUM OF UNDERSTANDING SIGHED BY THE TWO PARTIES
IN DECEMBER 1998 WHICH WILL NOW FORM THE BASIS FOR THE
PREPARATION OF A REVISED PP. THE KEXT STEP JM THE
PROCESS. THE PARTIES KAVE AGREED TO FINALIZE AND SIGH
THE REVISED PPA BEFORE JUNE 36.

"4. (Ui AS REPORTED REFHEL« IM MARCH COE AGREED TO PAY

USS26 MILLION PLUS INTEREST IN SETTLEMENT OF THE THEN
APPROXIMATELY USS63 MILLION IN DISPUTE BETWEEN THE TWO
PARTIES. THIS WAS BY FAR THE TRE LARGEST PORTION OF
COE’S DISPUTED DEBT.

S. @) FOR SHITH-EMRON: A KEY PROVISION IN THE
RATIFICATION AGREEMENT I$ THE ACKNOWLEDGMENT BY CDE OF
THE SETTLEMENT AS UNDISPUTED DEBT THEREBY QUALIFYING IT
FOR INCLUSION IK THE DISTRIBUTION FROM THE USS7
MILLION FUND ESTABLISHED FOR THE PAYMENT OF IPP
UNDISPUTED DEBT UNDER THE DEFINITIVE AGREEMENT SIGNED
APRIL 13 BETWEEN ALL THE INDEPENDENT POWER PRODUCERS
(UPPS)s COEs THE COMMITTEE FOR THE REFORM OF PUBLIC
SECTOR COMPANIES (THE CREP), AND THE TECHNICAL
SECRETARIAT ON BEHALF OF THE GODR. THIS
ACKNOWLEDGEMENT PRESERVES THE EXISTING USS24 KILLION
LETTER OF CREDIT FOR THE PROJECT WHICH IS IMPORTANT TO
SMITH-EMRON’S LENDERS. THIS DEVELOPMENT 1$ NOT SEEK AS
FAVORABLY BY OTHER IPPS WHO SEE THEIR SLICE OF THE
USS78 MILLION PIE GETTING SHALLER,

DISCO/GENCO CLOSING

7. (SBU THE MONIES FROM THE USS7@ FUND WILL EVENTUALLY
RELIEVE SHITH-EWROK’S DIFFICULTIES BUT TREY WICC NOT
BECOME AVAILABLE UNTIL THE CAPT ING DATES
OF THE NEW DISCOS AND GEKCOS, CREP PRESIDENT ISA CONDE
RECENTLY VOLUNTEERED IN A CONVERSATION WITH AN ENRON
REPRESENTATIVE THAT THE DISCO CLOSING WILL NOT OCCUR

met aAcecIcicn

00500000001332

1S/19382


FROM DEPARTMENT OF STATE 4A (FRI) 2,18°00 9:21/8T, 9:50.NO. 3760637596 = 7

CONFIDENTIAL

((b)(1)]

2 ) THE PROBE OP THE TROUBLED AND NOW SHUT-DOWN
ERTILIZER TORY WAS BEEN EXCEPTIONALLY LIVELY,
‘COMPELLT! AND SUPERVISORY MINISTERS TO
WARE SOME STARTLING STATEMENTS. THE RECENTLY SACKED
MANAGING DIRECTOR ADMITTED THAT HE HAD FALSIFIED
INVOICES TO BENEFIT A FIRM TIED TO HIS WIFE. HE
ALSO ALLEGED THAY THE ABUBAKAR REGIME DIRECTED NAFCON TO
DIVERT THE NAIRA EQUIVALENT OF USD 100,000 TO THE
OBASANJO PRESZDENTIAL CAMPAIGN. (ON FEBRUARY 14,
OBASANJO PUBLICLY DENIED RECEIVING NAFCON FUNES.) A
FORMER MINISTER DECLARED THAT NAFCON'S ONLY HOPE FOR
RESUSCITATION IS TO BRING BACK EXPATRIATE

mmnewe-[(b)(1)]

LAGOS 04 OF 0S 527

12, (SBU) TAKING THEIR LEAD FROM OBASANJO, IN 1999 THE

SONPIDENTIAL

00500000000606


IMMEDIATE

CONFIDENTIAL

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

PAGE 82 OF 83 W1D= 199807162218 930635

{(b)(4) , (b)(6)]

COMF IDENT 1 AL SECTION 62 OF 83 SANTO DOMINGO Gele7?
€.0, 12958: OECL: 63/12/2683

TAGS: ERG: OR
‘SUBJECT: SMITH-ENRON: WORLD BANK TO PLAY A ROLE

[(b)(4) , (b)(6)]

oR?

((b)(4) , (b)(6)]

NEXT STEPS

{(b)(4)]

M1D=1998e7182218 030635

{(b)(4)]

AS MOTED ABOVE: FOLLOWING THE MEETING
BETWEEN WOLFENSOHN AND PRESIDENT FERKANDEZ. TWO IFC
OFFICIALS REMAIMED IK SANTO DOMINGO TO INVESTIGATE THE
DISPUTE. THE IFC REPRESENTATIVES MET WITH S-E ON
TUESDAY MARCH 18 ANO WERE SCHEDULED 10 MEET WITH COE

AND (TS BOARD OR MARCH LL. [(b)(4) ; (b)(6)]

10, e{(b)(6) PORTED THAT SMITH HIMSELF WILL
ARRIVE TN THE DR ON MARCH 14. ENRON MANAGERS WILL ALSO
VISIT THE DR. THE EMBassy HAS asKeD [(b)(Gjq Keer in
CLOSE TOUCH AND HAS INDICATED ITS WILLINGNESS TO MEET
AUTH THE CORANY OFF LCLALS.

TL. ¢C) TRE WORLD BARK HAS UNDOUBTEDLY TAKEM ON THIS
PRICKLY PROBLEM BECAUSE OF THE IFC'S INVOLVEMENT IN
FINANCING THE PROJECT. A MEDEATION RESULT MAY BE MORE
ATTRACTIVE TO THE GOOR BECAUSE OF THE LOSS OF FACE THAT
YET MAY RESULT FROM A DECISION BY THE ARBITRATION
PANEL. MEDIA REPORTING OM THE START OF THE ARBITRATION
PROCESS WAS VITUPERATIVE WHICH UNDERLIMES THE
DUFFUCULTUES TRE GOOR MAY FIND (TSELE-(K 1M HAVING $0
LAMBASTED THE S-E COKTRACT THAT IT BECOMES DIFFICULT TO
ADMIT TO THE DOMIMICAN PUBLIC THAT THE CONTRACT IS KOT
$0 FAR REMOVED FROM THE INDUSTRY STANDARD. NORE
DANGEROUSLY. CDE HAS MADE SUCH A WHIPPING BOY OUT OF S-
E THAT IT BECOMES QUESTIONABLE WHETRER CERTAIN COE
EMPLOVEES MIGHT HAVE MORE INVESTED IN SEEING KO
SUCCESSFUL RESOLUTION.

12. IC) THE TIMING OF THIS PHASE OF THE LONG-STANDING
DISPUTE MAY ENDANGER ANOTHER PROJECT IMPORTAKT TO U.S.

INTERESTS. [(b)(4)]

PONCE INCNTIAL

1is322

”

00500000000790


n= oS

PRIORITY

UNCLASSIFIED

DEPT TREASURY ee MCEN
PH 622-2222 RM 1121/MT

PAGE 83 OF 67 NID=199832881117 008492
TAGS: EPET» EWRG: ECON: BG

‘SUBJECT: BANGLADESH: ENERGY SECTOR UPDATE

GRID; IT BAD MADE A PROPOSAL TO BUILD THE LINE AND
RECOVER THE COSTS FROM INCREASED GAS PRODUCTION: BUT IT
APPEARS THE BDG WILL CALL FOR A TENDER INSTEAD,

HALLIBURTON/SHELL/CAIRN’S SANGU FIELD: PRODUCTION MAY
GO UP: BUT COST RECOVERY DIFFERENCES REMAIN

7, GSBU) THE SANGU PROJECT: 48 KILOMETERS OFFSHORE
FROM CRITTAGONG IN BLOCK 16 HAS BEEN DELIVERING 68
NNCFO OF GAS TO THE BDG SINCE MID-JUNE 1998. RECENT
STATEMENTS BY BOG ENERGY OFFICIALS INDICATE THE
GOVERNMENT MAY BE READY TO PURCHASE AN ADDITIONAL 48
WACFO OR MORE OF GAS IN THE COMING WEEKS: LIKELY
SPURRED BY FALLING PRODUCTION IM THE BDG’S OW
BAKHRABAD FIELOs AND BY ANTICIPATED INCREASED DEMAND
FOR GAS TO FUEL A NEW BDG POWER PLANT ANO A
NOW-SHUTTERED BDG FERTILIZER PLANT. SANGU’S OFFSHORE
GAS 1S MORE EXPENSIVE THAN OXY'S GAS WILL BEr DUE TO
SPECIAL COMPENSATION FOR OFF-SHORE COSTS IN THE
PRODUCTION SHARING CONTRACT (PSC) CAIRN SIGNED WITH THE
BOG. THE CONSORTIUM CAN BEGIN ITS “TAKE OR PAY”
CONTRACT WITR THE BDG ONCE THE 188-DAY RUN-IN PERIOD
EMDS IM DECEMBER 1998. UNDER THE TERNS OF THE
CONTRACT: BANGLADESH MUST EITHER TAKE DELIVERY OF 168
WMICFD OF GAS: OR PAY THE COMPANY FOR 8 PERCENT OF THAT
AMOUNT. CONSORTIUM OFFICIALS HAVE ASKED THE B0G TO
MEET WITH THEM IN MID-NOVEMBER TO NEGOTIATE GAS
DELIVERIES AND TO FIX THE START OF THE TAKE OR PAY
PERIOD. OM THE BACK BURNER FOR NOW THE CONSORTIUM AND
THE BDG STILL HAVE A USD 88 MILLION DIFFERENCE TO
RESOLVE: PETROBANGLA HAS DISALLOWED THAT AMOUNT FROM
THE COST OF THE SANGU DEVELOPMENT PRODUCTION WELL®
PIPELINE AND GAS PROCESSING PLANT).

8, (SBU) CAIRN: WHICH NOW BAS A S8/S@ PARTNERSHIP
WITH SHELL ON THE REST OF BLOCKS 15/16 (CAIRN REMAINS
THE OPERATOR)» SUFFERED A SETBACK EARLIER IM THE SUMMER
WHEN A RUMORED LARGE GAS FIKO OFFSHORE: NAMED HALOA:
WAS DRY. ITS STOCK PRICE PLUNGED; SHORTLY THEREAFTER:
SHELL INCREASED ITS OWNERSHIP TO SB PERCENT, CAIRN»
SHELL AND UNOCAL: FORMERLY BITTER RIVALS FOR BLOCK 18
IM THE SECOND B1D ROUND (BELOW. RECENTLY REACHED AN
UNDERSTANDING WHEREBY UNOCAL WILL HO LONGER CONTEST
BLOCK 18 AND SHELL WILL NOT SEEK TO DERAIL O® UNDERCUT
UNOCAL ON ITS PROPOSED WESTERN REGION INTEGRATED
PROJECT (WRIPs BELOW.

ORLAND/ UME

wna

MiD= 199832881117 008432
9. (SBU) THE TWO OTHER U.S. COMPANIES WITH EXISTING
PSC’S: OKLANO OIL OF OKLAHOMA @LOCKS 17 AND 18). AND
UNITED MERIDIAN INTERNATIONAL (LOCK 22)+ WHICH EARLIER
IW THE YEAR MERGED WITH OCEAN ENERGY W.S.)« HOPE TO
DRILL THEIR FIRST EXPLORATORY WELLS IN 1999 AFTER
WAVING PERFORMED SEISMIC WORK THIS YEAR. OKLAMD RAS AN
AGREEMENT TO SELL APPROXIMATELY 7S PERCENT OF ITS
INTEREST IN ITS THO BLOCKS TO TULCOW OF IRELAND. THE
DEAL WILL REED THE APPROVAL OF THE BOG: HOWEVER: AND
MAY WOT BE AUTOMATIC® GIVEN TULLOW'S INVOLVEMENT IN THE
SECOND BID ROUND BELOW. UNC: MEANWHILE: WAS SLOWED
TO SOME DEGREE BY OWNERSHIP CONCERNS: NOW RESOLVED: BY
LOGISTICAL DIFFICULTIES OF SEISMIC WORK IN THE
DIFFICULT TERRAIN OF THE CHITTAGONG HILL TRACTS: AND BY
‘A TEMPORARY POLITICAL POWER VACUUM CREATED AT THE END
OF A TRIBAL INSURGENCY IN THE AREA. BOTH COMPANIES
UNCLAS SECTION 64 OF 88 DHAKA 823481

SENSITIVE BUT UNCLASSIFIED

STATE FOR SA/PABs EB/ESC: AND INR/SA/SOR

STATE PASS EXIMBANKs OPIC AND TDA

USDOC FOR 438 ITA/ANESA/OSA, 6888 ADVOCACY CENTER
DEPT OF ENERGY FOR TOM CUTLER

TREASURY FOR OASIA

LONDON FOR SUTPREN

DUBLIN FOR ENERGY OFFICER

MANILA FOR USED ADB AND SCO BARNES

€.0. 12958: 11/24/83
TAGS: EPET EWRGe ECOK 8G
‘SUBJECT: BANGLADESH: ENERGY SECTOR UPDATE

WAVE PURPOSELY MAINTAINED A LOW PROFILE AMD TO DATE
HAVE MOSTLY AVOIDED PROBLEMS WITH PETROBANGLAr THE
‘STATE-OWMED OIL AND GAS COMPANY. OF COURSE NEITHER
COMPANY HAS YET TO SPEND SIGNIFICANT AMOUNTS OF MONEY.
THE COMPANIES BELIEVE THEIR BLOCKS CONTAIN VERY GOOD
POSSIBILITIES FOR SIGNIFICANT GAS DISCOVERIES: UKITED
MERIDIAN BELIEVES BLOCK 22 COULD ALSO YIELD SOME OIL.

‘SECOND BID ROUND: PROMISES: PROMISES

1. (SBU) ALTHOUGH THE BDG ANNOUNCED IN JULY SOME OF
THE WINNERS OF BANGLADESH'S SECOKD BID ROUND FOR THE
EXPLORATION RIGHTS TO REMAINING BLOCKS: THE GOVERNMENT
WAS YET TO INVITE THE WINMERS TO NEGOTIATE PSC’S:
ALTHOUGH THE BDG HAS FORMED A KEW NEGOTIATING
COMMITTEE. THE BDG APPEARS OVERLY COWFIDENT IT CAN
NEGOTIATE NEW PSC’S IN A HURRY. WHILE THE ENERGY
SECRETARY SAID WEGOTIATIONS FOR ALL FIVE PSCS SHOULD BE

UNCLASSIFIED

mnt

00500000000711


mA OS

—

seaddecaddanede

UNCLASSIFIED

INMED | ATE

DEPT TREASURY COMCEN

PH 622-2222
Pace 1 OF 62 —-MID=2g01@3801288 HIM HILAR
CAVEATS) =
HANDLE VIA

ACTION = ETRSTBON (1) CALL (3) FEM AL) /GIUN (1) 10B (Lb (DC C1) 4 188 t1
UNE (D0 ISM AD) s FTF dy LTE ELD OUME (1) QC EL) s SEM (-30 TSOM {=}

"ps

00 RUEATRS

DE RUSBAY PO213/01 381219

ENR UUUUU 224

© a712192 FEB Gt

FIV ARCOMSUL MUMBA!

TO RUEHC/SECSTATE WASHOC IMMEDIATE 19S
INFO RUERNE/AMEMBASSY NEW DELHI IMMEDIATE 7388
QUEHCI/AMCONSUL CALCUTTA IMMEDIATE L411
RUEMCS/AMCONSUL CHENNAI IMMEDIATE 3930
AUEATRS/TREASDEPT WASHDC |MMEDIATE
RUCPDOL. USDOC WASHDC IMMEDIATE 0813

3

UNCLAS SECTION 01 OF 02 MUNA! 08213

|e”

p)

STATE PASS EXIMBANK FOR HUTCHINSON AND RITA ‘URRELL

STATE PASS OPIC FOR QUITE ANN MICASTRI AND BRIOGET WILLIAMS
STATE PASS USTR FOR RICK RUZICKA

STATE PASS SEC FOR MARISA LAGO

TREASURY FOR GEETHA RAC

USDOC FOR 3131/010/ANESA/KBRENNAN
USOC FOR 4530/MAC/OSAO/ASTERN
USDOC FOR 6888/\TA/TD/AC/TSCAUNG
USDOC FOR RHARDING

SENSITIVE

£8. 12958: WA
TAGS: ENRG) EFINe ECON, EINYy IN
SUBJECT: MSEB PAYS ANOTHER MILLIGM: ENRON AND GOM TAKE TO THE MEDIA

1. (UI NE WERE INFORMED BY ENRON THIS MORMING THAT QMOTHER RS. 5
CRORES SD 1.88 MILLIOM) HAS APPEARED IN ITS BANK ACCOUNT,
DEPOSITED THERE BY THE MAHARASHTRA STATE ELECTRICITY BOARD INSES).
THIS AMOUNT WAS APPARENTLY PAID AGAINST THE RS. 79 CRORES OLS. 17
MILLION) OWED ON MSEB’S NOVEMBER BILL SAICH ENRON AAS NOW ASKED THE
CENTRAL GOVERNMENT 70 Pay?

2, WW) NOW THAT ENRON/DABHOL POWER COMPANY (DPC) UPPED THE ANTE IN
ITS DISPUTE WITH THE GOVERNMENT OF MARARASHTRA GON) BY CALLING IN A
COUNTER-GUARANTEE FROM THE GOVERNMENT OF INDIA SGOIS+ BOTH SIDES
HAVE TAKEN 10 THE MEDIA TO EXPLAIN THEI® CASE, THIS MORNING: THE
CHIEF MINISTER: VILASRAO DESHMUKH, BRIEFED THE PRESS AND STATED THAT
THE GON DOES NOT WANT [O RENEGE ON (TS CONTRACT WITH DPC, BUT HAS NO
MONEY TO PAY NOW. IF THE MSEB HAD MONEY» HE SAIDs 17 «OULD PAY.
THIS IS*PARTIALLY AT ODDS WITH QUOTED REMARKS BY GOM FINANCE
MINISTER JAYANT PATIL, HOWEVER? WHO SEEMS TO SE TALKING GN GOTH

Aw
b

RM 1121/MT

10208183801 284 061946 O23

SIDES OF THIS PARTICULAR ISSUE. ON THE ONE HAND» PATIL HAS BEEN
WOTED AS SAYING “WE ARE FIRM MN OUR DECISION TO NOT PAY ENRON SINCE
ITS POWER WAS TOO EXPENSIVE:” ADDING THAT "TRE PROJECT |S MOT IN THE
INTEREST CF MAHARASHTRA, NO ONE WILL PAY THE RATE ENRON IS
CHARGING. OM THE OTHER HAND, RE HAS ALSO SEEN QUOTED SAYING “VE
WAVE EVERY INTENT! OW TO PAY THE QUES: UT THERE 1S A FUND CRUNCA.”
CRITICITING ENRON'S “UNDUE HASTE | INVOKING THE GUARENTEE,
Nene AT A TIME WHEN THE STATE 1S ON THE VERGE OF FORMING A

(rene COMMITTEE.* BOTH DESHMUKH AND PATIL HAVE BEEN SEPARATELY
QUOTED AS SEEKING THT CENTER'S INTERVENTION IN THIS CASE+ WITH
DESHMUNH LOOKING FOR “DELIVERANCE* FROM THE ENRON CRISIS. AS FOR
TME CENTERS POSITION. ONE PAPER (THE ECONOMIC TIMES) QUOTED UNNAMED
“SOURCES IN THE UNICH GOVERNMENT SAYING THAT “WE WILL PAY ENRON |TS
QUES AND eouer | IT SUBSEQUENTLY FROM MAHARASATRA’S PLAN ALLOCATION. ~

3. WW) CEO NEIL MCGREGOR HAS SEEN QUOTED |W SEVERAL NEWSPAPERS
QVER THE PAST TWO DAYS EXPLAINING WHAT THE GUARANTEES AND COUNTER
GUARANTEES MEAN AND’ WHY THEY FELT COMPELLED TO CALL THEM IN AT THIS
TIME, IN PARTICULARs MCGREGOR 4AS EMPHASIZED THE IMPLICATIONS FOR
MAHARASHTRA’S INTERMATLONAL REPUTATION |N NOT HONORING $!GNEO
AGREEMENTS. ENRON TOOK OUT A FULL PAGE ADVERTISEMENT IN TODAY'S
ECONOMIC TIMES ANO ISSUED A PRESS RELEASE YESTERDAY -- BOTH
GHLIGHTED TRE FACT THAT OABHOL “AS BROUGHT IN 2.2 BILLION USD OF
FOREIGN INVESTMENT AMO CONTRIBUTED APPROXIMATELY 359 MILLION USD TO
THE STATE AND CEATRAL EXCHEQUER.

4. (SBU) COMMENT: —NSEB’S ORIBS AND DRABS APPROACH IS PUZZLING.
SOME OBSERVERS ARE OF THE OPINION TwAT [(1D)(1)] 4aS
AUFFLED MANY FEATHERS AND HELPED PROVOKE A MAJOR CRISIS FOR THE
STATE. WITH HIS NEW MILLION-DOLLAR PAYMENT, HE MAY BE TRYING TO
MAINTAIN SOME CREDIBILITY ALTHOUGH HOW THIS FITS WITH THE CONFUSING
AWETORIC FROM THE GOM IS NOT AT ALL CLEAR.

{(b)(1) , (b)(4)]

UNCLASSIFIED

00500000000070


CETERA
IMMED | ATE CONFIDENTIAL

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

PAGE mL OF 2 wis198836701791 ase ane : MiD=199830781791
CAVEATS) = sncxcrouo

HANDLE VIA usta

ACTION = TRSIBOH (+ i» DC)» 1B DML (1TH SOURED,

C SEW ts ¥O.M - [(b)(1) , (b)(4)]

cnt = oat

00 RUEATRS

DE RUERDG #5466/01 2071644

INY coeCe 22H

0 8316442 Nov $8

FW AMEMBASSY SANTO DOMINGO

TO RUEHC/SECSTATE WASHDC IMMEDIATE 2424

INFO RUEKPU/AMEMBASSY PORT AU PRINCE 1135

RUCPOOC/USDOS WASHOE

ar

CONFIDENTIAL SECTION GI OF 82 SANTO DOMINGO aass66

USDO FOR 3134/USFCS/O10/WH/RO
USOC FOR 4322/Q/0NCR/SIEGELMAN

£.0, 12958: DECL: 69/64/83
TAGS: ENRG EIN PREL DR
SUBJECT: AES IN CRISIS YET AGAIN

1, W) CLASSIFIED BY LINDA E, WATT CHARGE D’AFFAIRES
ALL. REASON: 1S DD}

2. (Ch SUMMARY: AES DOMINICAN POWER PARTNERS WES OPP)
ISSUED A NOVEMBER 2 SHUT DOWN NOTICE TO THE CORPORACION
DOMINICANA DE ELECTRICIDAD (CDE), THE PLANT WILL BE

TAKEN OFF-LINE FOLLOWING PEAK DEMAND ON NOVEMBER 4 IF A
‘SUBSTANTIAL PAYMENT 1S NOT RECEIVED, [(b)(1) , (b)(4)]

END SUMMARY

4, W) BY LETTER DATED NOVEMBER 2 1998, AES OPP
GENERAL MANAGER RUBEN SOROETA INVOKED THE 24-HOUR
NOTICE CLAUSE IM THE AES CONTRACT AKO INFORMED CDE IT
WILL TAKE THE PLANT OFF-LINE AFTER THE DEMAND PEAK ON
WOVENBER 4: IF NO PAYMENT 1S RECEIVED, [(b)(4)]

COE IN CRISIS TOO

iz

73637317282

4. OG) IN TERMS OF THE MONIES IT 1S OR RATHER 1S KOT)
cneeenscne GENERATING: COE I$ ITSELF AN INSTITUTION IN GREATER

CONFIDENTIAL

00500000000759


ANNEX 5

00100000000329


a<S—s— Ss

PRIORITY UNCLASSIFIED

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

PAGE @4 OF 87 M1D=199832881117 008482
“DONE IM A DAYs" INDUSTRY INSIDERS SAY THE MODEL PSC

HAS SERIOUS FLAWS WHICH PRECLUDE A QUICK NEGOTIATION,

THE GDG SEEMINGLY HAS NOT YET INTERNALLY DECIDED WHAT
THE PSCS WILL INCLUDE. A FURTHER COMPLICATION IS THAT
SOME OF THE SELECTED COMPANIES HAVE HAD PROBLEMS SINCE
THE AWARDS WERE ANNOUNCED. FOR EXAMPLE: TRITON: WHICH
WAS TO OPERATE IN BLOCK 7 WITH UNOCAL AS A PARTNER: HAS
TO SELL OFF ITS ASSETS, WHICH UNOCAL WILL LIKELY
PURCHASE; TINY PANGAEA HAD ITS PARTNERSHIP WITH OMY OF
AUSTRIA FALL APART WHEN THE AUSTRIAN COMPANY PULLED

OUT. OFFSETTING THOSE PROBLEMS WAS THE BDG’S
ANNOUNCEMENT THAT IT HAD OVERCOME SOME CONTENTIOUS

ISSUES AND WAS ABLE TO AWARD OFFSHORE BLOCKS 19 AND 29
TO MAERSK OF DENMARK.

BIG BLOCKS STILL UNDECIDED

IL. (SBU) BLOCKS $+ 18 AND 11+ THOSE MOST SOUGHT
AFTER IN THE SECOND B1D ROUND GECAUSE THEY ARE CLOSEST
TO MARKET AND HAVE MORE KNOWN GAS POSSIBILITIES): ARE
STILL UNDECIDED, OESPITE AN UNDERSTANDING AMONG SHELL:
CAIRN ENERGY AND UNOCAL: WHEREBY UNOCAL WOULD TACITLY
CEDE BLOCK 18 TO SHELL/CAIRN» NO OFFICIAL APPROVAL OR
‘AWARD WAS TAKEN PLACE. BLOCKS 9 AND 11 ARE STILL
GUMMED UP BY THE BOG'S IMABILITY TO EITRER AWARD THE
BLOCKS TO THE TOP BIDDER: TINY TULLOW OF IRELAND: 08
INDUCE TULLOW TO ACCEPT THE TERMS PROPOSED BY
CHEVRON/TEXACO IN BLOCK 9. THE BDG STILL HOLDS OUT
HOPE THAT MOBIL AND PETRONAS: PARTNERS IN A BIO ON
BLOCK 11+ WILL AGREE TO PARTNER WITH TULLOWs SOMETHING
MOBIL APPEARS UNWILLING TO DO. ONE PROBLEM HOLDING
BACK PROGRESS IS TRE BDG’S INABILITY TO DATE 10 INVITE
COMPANIES FORMALLY TO NEGOTIATE? WHILE THE BOG HAS SENT
OUT SEVERAL INFORMAL "FEELERS" TO INDUSTRY) IT HAS NOT
COMMUNICATED ANYTHING OFFICIALLY SINCE LATE 1997
REGARDING THESE UNDECIDED BLOCKS. SPECULATION OVER WHY
THE BOG 1S UNABLE TO CALL COMPANIES RANGES FROM
POLITICAL INVOLVEMENT BY SPECIAL INTERESTS: ALLEGATIONS
OF CORRUPTION: OR THE PM’S DESIRE TO ACCOMMODATE AS
MANY COMPANIES AS POSSIBLE. WHATEVER THE REASON OR
REASONS FOR CONTINUED BDG INACTION: INTEREST BY
INTERNATIONAL OIL COMPANIES (10C) APPEARS TO BE WANING
AS WORLD OIL PRICES TUMBLE.

IE PROBLEM WITH GAS EXPORTS TO INDIA

UNCLAS SECTION 85 OF 88 DHAKA #883481
SENSITIVE BUT UNCLASSIFIED

STATE FOR SA/PABs EB/ESC: AND INR/SA/SOA

1D=139832801117 988492
STATE PASS EXIMBANK» OPIC AND TOA
USDOC FOR 4538 ITA/ANESA/OSA: 6288 ADVOCACY CENTER
DEPT OF ENERGY FOR TOM CUTLER
TREASURY FOR OASIA
LONDON FOR SUTPHEN
DUBLIN FOR ENERGY OFFICER
MANILA FOR USED ADB AND SCO BARNES

€.0, 12958: 11/24/83
TAGS: EPETy EMRG: ECOM BC
‘SUBJECT: BANGLADESH: ENERGY SECTOR UPDATE

12. (SBU) THE INTERNATIONAL OIL COMPARIES WANT ACCESS
TO INDIA BECAUSE THE EXISTING LARGE MARKET THERE GIVES
THEN A WAY TO TURN THE GAS INTO HARD CURRENCY
RELATIVELY QUICKLY, BANGLADESH» HOWEVER: IS RELUCTANT
TO SELL ITS VITAL NATURAL RESOURCE TO THE INDIANS:
ESPECIALLY SINCE IT DOES NOT KNOW HOW MUCH GAS IT HAS:
AND THEREFORE DOES NOT KNOW HOW MUCE IT CAN SELL. THE
BOG INSTEAD ROPES |OCS WILL HELP DEVELOP ITS DOMESTIC
GAS MARKETs MAINLY POWER PLANTS AND FERTILIZER
FACTORIES. WHILE FINANCE MINISTER KIBRIA SAYS THE BDG
WAS THE WHEREWITHAL TO PAY FOR THE GAS COMING FROM OXY
‘AND CAIRN AND COMPANY, AND THE ABILITY TO GENERATE MORE
EXPORTS TO OFFSET ITS FOREIGN EXCHANGE OBLIGATIONS TO
THE OCS» HE ADMITS THAT THE GOVERNMENT WOULD NOT BE
ABLE TO ABSORB THE COST OF ANY ADDITIONAL GAS PURCHASES
FROM THE SECOND BID ROUND. WHILE PRIVATELY THERE HAS
BEEN SOME DISCUSSION OF THE 8DG'S WILLINGNESS TO HAVE
THE FOREIGN COMPAKIES SELL GAS DIRECTLY TO INDIAy
PAYING THE BOG “COLD CASH" FOR ITS SHARE FIRSTs THIS
VIEW WAS MOT BEM WIDELY EMBRACED WITHIN THE 89G,
HOWEVER. THE GREATER PROBLEM WITH GAS EXPORTS TO INDIA
1S THE DESTINATION, MOT CONCERNS OVER QUANTITIES OF GAS
AVAILABLE. BANGLADESH'S CHECKERED RELATIONS WITH INDIA
MAKE GAS EXPORTS THERE A SIGNIFICANT POLITICAL
LIABILITY: ESPECIALLY FOR THE AWAMI LEAGUE GOVERNMENT
WHICH MUST CONTEND WITH ITS “PRO-INDIA" REPUTATION.

TOR GAS STUDY

13. (SBU) THE BOG HAS SELECTED A CONSULTANT FOR THE
USO 488,008 STUDY, FINANCED ENTIRELY BY THE U.S. TRADE
‘AND DEVELOPMENT AGENCY: AND DESIGNED TO SEE HOW TRE GaS
CAN BE USED DOMESTICALLY AND INTERNATIONALLY TO CREATE
WEALTH. ASSUMING ROUTINE APPROVALS ARE GIVEN BY THE
MINISTRY OF ENERGY AND TDA: AND THAT THE CONSULTANT
APPROVES THE CONTRACT: WORK COULD BEGIN SOMETIME IN
DECEMBER. THE STUDY IS ENPECTED TO TAKE 4 10 $ MONTHS
TO COMPLETE.

THE BDG'S OWN PROBLEMS WITH GAS: FALLING PRODUCTION

UNCLASSIFIED

mnt

00500000000712


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PAGE 83 OF a3 W1D=199815301117 arisy4
DOLLARS BUT RECEIVES LOCAL CURRENCY FROM DOMESTIC
CUSTOMERS: UNLESS CUSTOMERS ARE ABLE TO USE THEIR

ELECTRICITY TO GENERATE EXPORTS. WHILE THE COUNTRY HAS _,

A GROWING GARMENT EXPORT SECTOR, ITS ABILITY TO PRODUCE
WORE FOREIGN EXCHANGE WITP MORE ELECTRICITY 1S UNCERTAIN
(THE SECTOR I$ HARD HIT BY LOADSHEDDING: ACCORDING TO
PRESS REPORTS). BANGLADESH'S PAYMENT DILEMMA IS
COMPOUNDED BY ITS SYSTEM LOSS) WHICH MEANS THE PDB
RECEIVES ONLY 68 TO 65 PERCENT OF PAYMENTS FOR POWER
PRODUCED» AND BY EXISTING PRICE STRUCTURES WHICH FAIL TO
COVER TRUE COSTS OF PRODUCTION,

BUREAUCRATIC OVERLOAD

{((b)(1)]

TDA STRATEGIC GAS STUDY

U1. 0) THE U.S TRADE AND DEVELOPHENT AGENCY BAS
OFFERED TO FUND A $408 088 STRATEGIC GAS STUDY TO HELP
BOG OFFICIALS BETTER UNDERSTAND THE DIFFERENT OPTIONS
BEING PRESENTED TO THEM BY 10CS AND IPPS+ WITH A VIEW TO
RAXIMIZING BANGLADESH'S BENEFITS FROM ITS POTENTIAL
NATURAL GAS RESOURCES. TERMS OF REFERENCE (TOR) WERE
ORAFTED AND GIVEN TO THE BDG IN FEBRUARY 1998; THE BOC
GAVE THE TOA ITS SUGGESTED CHANGES TO THE TOR ONLY ON
MAY 31.

PROSPECTS FOR US. COMPANIES

12, (C) U.S, COMPANIES ARE WELL-POSITIONED IN BOTH CAS
AND POWER. THREE OF THE FOUR CURRENT EXPLORATION

COMPARIES WITH BLOCKS ARE U.S. -BASEDr AND OCCIDENTAL'S
BLOCKS (ASSUMING IT KEEPS THEM) ARE CONSIDERED BY MANY
TO BE THE BEST IN THE COUNTRY. SEVERAL MAJOR U.S,
COMPANIES, INCLUDING CHEVRON. TEXACO, UNOCAL» MOBIL»
ENRON AND UIP HAVE BID ON BLOCKS FOR THE SECOND 81D
ROUND, AND WHILE NOT ALL WILL WIM) IT 1S LIKELY THAT
SOME WILL BE SUCCESSFUL. IN POWER, AES AND UNOCAL WILL
LIKELY MAKE IT TO THE MEGOTIATING TABLE» AND THE POWER
BARGES WILL PROBABLY END UP HAVING SOME U.S. EQUITY.
U.S. OIL AND GAS SERVICE PROVIDERS WILL LIKELY EMD UP
SERVICING THE EXPLORATION COMPAKIES, WHILE DOWNSTREAM

1D 199815301117 aries
ACTIVITIES ARE VERY LIMITED U.S, COMPANIES MOBIL’ EXXON
AND CALTEX ARE FRYING TO INCREASE THEIR INVOLVEMENT IW
LIQUID PETROLEUM GAS PROCESSING. U.S. ECONOMIC AND
COMMERCIAL INTERESTS ARE OVERWRELMINGLY IN THE GAS AND
ENERGY SECTORS RIGHT NOW. GIVEN FAVORABLE GOVERNMENT
DECISIONS: THEY COULD LEAD TRE WAY IN BANGLADESH TO
FURTHER INDUSTRIAL IZATION AND HIGHER ECONOMIC GROWTH.
MIST
ar
41597
EASB
NNN

CONFIDENTIAL

00500000000722

O2/14312


This project, with Israeli, U.S., and Palestinian government cooperation, represents the
type of project that the U.S. government envisioned when it made its commitments. To
date, OPIC has spent only $2.6 million of its Palestinian funds, and this project will goa
long way in moving closer to our goals.

The Department of State attaches, therefore, great importance tc. this project and is
committed to providing its wholehearted support to ensuring that the project is
successful. Through its Embassy in Tel Aviv, its Consulate General in Jerusalem and its
headquarters in Washington, the Department of State will monitor developments
affecting the project. The embassy and the Department will assist both OPIC and Enron
in addressing any difficulties that might arise. On the legal front, Department of State
lawyers are currently working with OPIC regarding issues related to arbitration and
enforcement. The legal departments are also cooperating on the design of language to
ensure that any Palestinian entity succeeding the Palestinian Authority (following
permanent status negotiations between Israel and the PLO) will abide by the Power
Project’s agreements.

Conclusion

Enron's Gaza Power Project is the type of project that OPIC was established to finance.

It promotes American foreign policy by being the catalyst to the economic development
of a lesser-developed, emerging market economy. It will create American jobs and
exports in an internationally competitive market through the $32.5 million in project-
related U.S. procurement. It will promote quality business standards by using the most
environmentally sound technologies available and by promoting higher standards for
labor and worker rights at the facility. Finally, we believe that it has the potential to pass
on zero cost the American taxpayers through the managerial and financial involvement of
one of our most reputable energy companies. This project satisfies all of the
requirements within the OPIC mandate.

SENSITIVE BUT UNCLASSIFIED

00100000000317


MT

MID= 199887162218 830635
THE DOMINICAN PUBLIC). ALTHOUGH NOTHING HAS BEEN SET,
BELIEVES WOLFENSOHN WILL

1U19322

it CEGCEREEEEEE
IMMEDI ATE CONFIDENTIAL
DEPT TREASURY COMCEN
PH 622-2222 RM 1121/
PAGE @1 OF 93 i0=199887182218 830635 N92
CAVEAT (S) =
HANDLE VIA

ACTION = CTRSIGH (1) + 1BRO (1), 108 (1) + 100 C1)» 100 (2) » INL iti .
OC (1) SEM (+)
CRC = 4089

00 RUEATRS

OE RUEHOG #1872/@1 6711887

INY COCCC 12H

0 1218822 KAR $8

FH ANENBASSY SANTO DOMINGO

TO RUEHC/SECSTATE WASHDC IMMEDIATE 9886

RUCPDOC/USDOC WASHDC

INFO RUEHPU/AMEMBASSY PORT AU PRINCE 0647

aT

CONFIDENTIAL SECTION BI OF 3 SANTO DOMINGO 261872

£.0, 12988: DECL: 63/12/2883
TAGS: ENRG OR
‘SUBJECT: SMITH-ENROH: WORLD BANK TO PLAY A ROLE

CLASSIFIED BY CHARGE O° AFFAIRES A.1. LINDA E, WATTS
REASOK: «1.5 D).

1. (C) SUMMARY: IH HIS MARCH $ VISIT TO SANTO DOMINGO
WORLD BANK PRESIDENT WOLFENSOHM COMMITTED TO PLAYING A
ROLE IN RESOLVING THE SMITR-ENROH/CORPORATION
DOMINICANA DE ELECTRICIDAD «COE) DISPUTE, WORLD BANK-
CHAIRED MEDIATION TALKS SHOULD TAKE PLACE WITHIN THE
NEXT 40 DAYS BEFORE THE INTERNATIONAL ARBITRATION PANEL
NOW CONSIDERING THE DISPUTE HANDS DOWN ITS DECISION.

[(b)(4)]

THE PAYMENT HAS NOT YET BEEN RECEIVED BUT, WITH THE
INTERVENTION THIS WEEK OF WOLFENSOBNs SKITH-ENRON
EXECUTIVE DIRECTOR KEVIN MANKING 1S OPTIMISTIC THAT CDE
WILL HAKE THE PAYMENT. END SUMMARY.

WORLD BANK TO MEDIATE

72. (C) WORLD BANK PRESIDENT WOLFENSOKH VISITED SANTO
OOHINGO ON MONDAY, MARCH $. IN HIS MEETING WITH
WOLFENSOHN: PRESIDENT FERNANDEZ APPEALED FO@ HELP WITH
TWE SMITH-ENRON (S-E) “PROBLEM. MWOLFENSONN REPORTEDLY
RESPONDED THAT THE DISPUTE BETWEEN CDE AND S-E IS A
COMPLEX ISSUE WHICH WILL NOT BE SOLVED OVERNIGHT BUT
THAT ME WOULD PERSONALLY TRY TO MEDIATE A RESOLUTION,
PRESIDENT FERNANDEZ REPORTEDLY UNDERLINED TO WOLFENSORN
THAT IT 1S IMPORTANT THAT THE CONTRACT “LOOK FAIRTM
(NOTE: 1. E.eMAKING CHANGES THAT WILL PLAY WELL WITH

KEG)
IRST MEDIATION MEETING IN WASHINGTON. 10
ADVANCE THE PROCESS: TWO IFC OFFICIALS REMAINED IN
SANTO DOMINGO AFTER WOLFENSOHN’S DEPARTURE. THE
OFFICIALS MET WITH S-E ON TUESDAY. MARCH 18) AND WERE
SCHEOULED TO MEET WITH CDE OFFICIALS AND MEMBERS OF ITS
BOARO ON MARCH 11. THE IFC REPRESENTATIVES WERE
REPORTEDLY TASKED WITH ESTABLISHING THE OPENING
POSITIONS OF BOTH SIDES PRIOR TO HOLDING A PREPARATORY
MEETING IN SANTO DOMINGO BEFORE THE FIRST OFFICIAL
MEETING IN WASHINGTON CHAIRED BY WOLFENSOHN,

3. THE DIFFERENCES ON THE CONTRACTUAL INTERPRETATION
BETWEEN S-E AND COE ARE NOW BEING CLARIFIED IN A COURT
OF INTERNATIONAL ARBITRATION IN MEXICO CITY. THE
AMOUNT INVOLVED AMOUNTS TO APPROXIMATELY USS4@ MILLION.
THE ARBITRATION PANEL CONVENED IM MID-FEBRUARY AND WILL
HOLD ITS LAST MEETING ON MARCH 17. ITS DECISION WILL
BE HANDED DOW 38 DAYS AFTER THAT DATE.

IRON’ S LATEST CRISIS

‘SMITH

{(b)(4) , (b)(6)]

CONEINENTIAI

00500000000789


ROUTINE

PAGE @1 OF 03
CAVEAT (S) =
HANDLE VIA

WID=L99615381117

ACTION = CTRS)CALL (Q)oG) (1). CMAN) + 1CS (1) 1B (1) JDO U1) JNA)

UTE (Ur TTL (1) eOUME (ths OC (11s SEN A)
CRC = EAGB

AR RUEATRS

DE RUERKA #1597/01 1531141

IWy CCcee 22H

RB B211412 JUN 98

FI ANEMBASSY DHAKA

TO RUCPDOC/USDOC WASHDC 8367
RUEHC/SECSTATE WASHOC 8985

IMFO RUEHAR/AMEMBASSY ASHGABAT 8291
RUEHOB/AMEMBASSY DUSHANBE 8877
RUEHNE/AMEMBASSY NEW DELHI G488
RUEHOL/AMEMBASSY DUBLIN 8831
RUEHIL/AMEMBASSY ISLAMABAD S264
RUEHLO/AMEMBASSY LOMDON 8141
RUEHGP/AMEMBASSY SINGAPORE 1437
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUSBAY/AMCOMSUL MUMBAI @626
RUEHLM/AMEMBASSY COL OHBO 3619
RHEBAAA/DEPT OF EMERGY WASHINGTON OC
RUEHAD/AMEMBASSY ABU OHAB! 0519
SUEHKT/AMEMBASSY KATHMANDU 3567
RUEHML/AMEMBASSY MANILA 8718
RUEHNT/AMEMBASSY TASHKENT 9098

BI
CONFIDENTIAL OHAKA Og1SS7

FOR SA/PABy EB/ESCr AND INR/SA/SOA
STATE PASS EXIMBANKs OPIC AND TDA

USDOC FOR 4538 ITA/ANESA/OSA, 6008 ADVOCACY CENTER

DEPT OF ENERGY FOR ROBERT PRICE
TREASURY FOR OASIA

LONDON FOR TUELLER

DUBLIN FOR ENERGY OFFICER

MANILA FOR USEO ADB AND SCO BARNES

€.0. 12988: DECL: 86/82/63
TAGS: EPETy ENR) ECON» BG
SUBJECT: ENERGY SECTOR OVERVIEW

REF: AD $7 DHAKA 2372

CONFIDENTIAL

PT TREASURY COMCEN G
622-2222 RM 1121/MT \

Ori8i4 = 2/1431

WID=198815301117 ON8is = BAYA

we

3, (0) BANGLADESH HAS POTENTIALLY LARGE GAS RESERVES
(Q TO 88 TRILLION C UBIC FEET)» ANO HAS INVITED
INTERNATIONAL OIL COMPANIES TO HELP DEVELOP THOSE
RESOURCES. THE COUNTRY ALSO HAS A POWER SHORTAGE OF
SEVERAL HUKDRED MEGAWATTS AND HAS FLOATED TENDERS
INVITING PRIVATE POWER COMPANIES TO DELIVER GAS-BASEO
ELECTRICITY UNDER BUILD-OWN-OPERATE 00) SCHEMES. MANY
U.S. COMPAKIES ARE WING FOR NEW GAS EXPLORATION BLOCKS
OR POWER PROJECTS: WHILE THREE U.S. COMPANIES ARE
CURRENTLY EXPLORING FOR MATURAL GAS UNDER EXISTING

rat 1(6)(1)

THE U.S. TRADE AND DEVELOPMENT AGENCY HAS
OFFERED TO FUND A STRATEGIC GAS STUDY TO ASSIST THE BDG
IN DETERMINING HOW BEST TO DEVELOP ITS NATURAL GAS
RESOURCES. END SUMMARY.

EWERGY SECTOR OVERVIEW

4, (0) BANGLADESH COULD POSSESS SIGNIFICANT NATURAL
GAS RESERVES: WHICH HAVE ATTRACTED THE ATTENTION OF
NUMEROUS INTERNATIONAL OIL COMPANIES [10CSI. WHILE
PROVEN RESERVES ARE ONLY 18 TRILLION C UBIC FEET (TCF)y
WAST ICCS BELIEVE BANGLADESH HAS BETWEEN 38 AND 28 ICF.
AT CURRENT CONSUMPTION RATES: SUPPLY IS ESTIMATED 10 BE
SUFFICIENT FOR 38 YEARS. WHILE THE SMALL ANO RELATIVELY
UNDEVELOPED DOMESTIC MARKET HAS MUCH ROOM TO GROW. 10CS
ARE PUSHING FOR BANGLADESH TO CONSIDER AND APPROVE GAS
EXPORTS TO INDIA OF ANY DOMESTIC SURPLUS. {(b)(1 yy]

1, (W) CLASSIFIED BY CHARGE D’ AFFAIRES TREODORE A.

MIST, REASOM: 1.8 @)

2. WW) THIS MATERIAL SHOULD BE CONSIDERED BUSINESS
CONFIDENTIAL AND SHOULD NOT BE SHARED WITH PRIVATE

COMPANIES.

GAS SECTOR

CONFIDENTIAL
0500000000720


IMMEDI! ATE CONFIDENTIAL

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PAGE @2 OF 2 NUD=199812161681 856394 B1/19492 MID= 199812181661

[(b)(4) , (b)(6)] {(b)(4) , (b)(6)]

CONFIDENTIAL SECTION 82 OF 62 SANTO DOMINGO ea2is7

USDOC FOR 3134/USFCS/O1O/MH/RD
USDOG FOR 4322/1 TA/1EP/WR/ONCB/ SIEGELMAN

€.0. 12958; DECL: 64/24/2883

TAGS: ENRG OR aa
‘SUBJECT: SMITH-ENRON: MEETING WITH PRESIDENT COMMENT
FERNANDEZ 1S POSITIVE/AFTERMATH ISW'T ane

855394 SL/ISAST

TL, (C) THE EVENTS OF THE WEEK SINCE THE MEETING WITH

REF: SANTO DOWINGO 186 AND PREVIOUS PRESIDENT FERNANDEZ REPORTED IN THIS MESSAGE: SERVE TO
FURTHER UNDERLINE OUR CONCERN THAT
[(b)(4)] [(b)(1)]

COE HAS CONTINUED TO DRAG ITS
FEET ON PAYING SMITH-EMRON AND NOW SEEMS TO BE TAKING A
POSITION ON THE TALKS WHICH SHITH-ENRON WILL MOT

ACCEPT, WATT
cesceeeeeeee ar
GETTING PAID : ast
sweeneeneeee 6709

[(b)(4) , (b)(6)] =

CANFINENTIAL

00500000000779


sesee gaecae 4 :
IMMED | ATE CONFIDENTIAL a i) ge
DEPT TREASURY COMCEN fA 8
PH 622-2222 RM 1121/MT : n*
PAGE ML OF 2 D=199824602197 gars = 93/2138 io=193e2sgo2i97 arests 63/2138
CAVEAT 6) = [(b)(4)] THE ENRON NEGOTIATING TeaM
MAROLE: VIA was LEO BY [(b)(6) EMO

ACTION + (TRS)BO! (1) +C1D (1) + ERD C1) GI (1) BRD CL)» 108 {0 L050)
VOD (1) + WB AD + WNL AL)» ETE CUD ATM ELD OUMP (1) 06 (1) SEN (1 UO MD =
CRE = 1489

00 RUEATRS

DE RUEKDG 4388/61 2462046

INY eccce 12H

0 0320462 SEP 98

FIV AMEMBASSY SANTO DOMINGO

TO RUEKC/SECSTATE WASHDC IMMEDIATE 1588

INFO RUEMPU/AMEMBASSY PORT AU PRINCE 1018

RUCPOOC/USDOC WASHOE

Br

CONFI OENT | AL SECTION G1 OF O2 SANTO DOMINGO GOtI88

USDOC FOR 3134/USFCS/O10/WH/RD
USDOC FOR 4322/1TA/IEP/¥H/OMCR/SIECELMAN

E.0. 12958: DECL: 99/93/2003
TAGS: ENRG EIMY PREL OR
SUBJECT: SMITH ENRON MAKES A DEAL?

REF: SANTO DOMINGO 3553

1, W) CLASSIFIED BY LINDA E. WATT CHARGE O° AFFAIRES
ALL. REASON: 1.5 OP

2. (0) SUMMARY: — TALKS BROKERED BY THE WORLD
BANK/INTERMATIONAL FINANCE CORPORATION (IFC) SETWEEN
THE ENRON CORPORATION AND THE STATE-OWNED CORPORACION
DOMINICANA DE ELECTRICIDAD CDE) YIELDED A PRELAMINARY
RENORANDUM OF UNDERSTANDING SIGNED ON AUGUST 28. 80TH

SIDES HRDE COMESSIONS: F79¢4) | (6y)(4)]

3. suiri-tneox [(b)(6)]

INFORMED THE EMBASSY SEPIENER 2 THAT A ROUND OF 1FC-
BROKERED TALKS BEINEEN THE ENROM CORPORATION AND THE
CORPORACTON DOMINICANA DE ELECTRICIDAD (COED HELD 1
HOUSTON AUGUST 27 AND 26 HAD BEEN SUCCESSFUL. [(Ip)(4)]

INTERNATIONAL, CDE"S TEAM WAS LED BY [(b)(6)]

4.) SHEN ASKED ABOUT THE STATUS OF THE MEXICO-BASED
ARBLTRATION PaNeLs [(b)(B)%PLieD 1HAT ExRow's
ATTORNEYS HAD INFORMALLY INOUIRED ABOUT THE PROGRESS OF
THE PANEL AND DISCOVERED IT 1S LIKELY THE FANEL WILL
ASK FOR AN EXTENSION FROM THE INTERNATIONAL CHAMBER OF
COMMERCE INTERNATIONAL COURT OF ARBITRATION IN PARIS.

{(b)(4)]

ELEMENTS OF THE DEAL

[(b)(1) , (b)(4) , (b)(6)]

CONFIDENTIAL

00500000000757


FROM DEPARTMENT OF STATE 4A (FRI) 2.18°00 9:31/8T. 9:30.NO, 3760637596 F 9

CONFIDENTIAL

B) FOREIGN DEBT/LOOTED FUNDS FIXATION: DESPITE TRE
. WINDFALL FROM SURGING OIL PRICES, CBASANJO REMAINS
FIXATED OW FOREIGH DEBT RELISF, LARGELY AS A
POLITICAL CORCETT, PAIS«NG IT’ WITH VIRTUALLY EVERY
53 AUBIENCE. HE SHARES THE WIDESPREAD
NIGERIAN VIEW THAT MOST IF NOT ALL OR THR DEST IS
ILLEGITIMATE BECAUS:

KEGIHES, WENT TO NON-VIABLE FROM VENDORS WHO
PUr PROFIT ABOVE DUE DILIGENCE, AND NIGERIA IS A POOR

PRY THAT HAS ALREADY DUTIFULLY PAID BACK THE
PRINCIPAL MANY TINES OVER. [(b)(1)]

((b)(1)]

LAGOS 0S OF 05 527

[(b)(1)]

CON TAL

00500000000608


FROM DEPARTMENT OF STATE 4A (FRI) 2.18°00 9:31/8T. 9:30/N0. 3760637596 F 5S

CONFIDENTIAL

{(b)(1)]

=+ NOLCHEM (DOWNSTREAM PETROLZUM): EFFORTS TO PERSUADE
SMELL TO RAISE ITS EXISTING EQUITY TO BECOME THE CORE
INVESTOR/OPERATOR POUNDERED. AFTER SHELL REFUSED 70
PROMISE MOT TO RESELL ITS SHARES FOR AT LEAST TWO YEARS.
THERE WAS NO OTHER BIDDER FOR NOLCKEM AFTER SHELL
DROPPED OUT, SO BIDDING HAS BEEN READVERTIZED. [(1y)(4)]

2. (C) THE NIGERIANS ARB LEARNING THAT IT IS ONE THING
FOR EXISTING EQUITY HOLDERS TO EXPAND THEIR INVESTMENTS
IM ALREADY VIABLE ENTERPRISES. HOWEVER, IT IS
APPARENTLY STILL A BRIDGE TOO FAR FOR FOREIGN INVESTORS
WITHOUT PRIOR NIGERIAN EXPOSURE TO TAKE THE PLUNGE. THE
GON SUSPENDED SOME TELECOM AND OFFSHORE OIL LICENSES IN
PART TO GET RID OF NON-PERFORMING OR OTHERWISE MARGINAL
NIGERIAN COMPANIES, BUT THEIR AIM OF ATTPACTING THE
TITEANATIONAL BIG BOYS HAS FOUNDERED. AT LEAST iN
TELECOMS. IN THE CURRENT GSM CELL PHONE LICENSING
ROUND, THE SEVEN FIRMS SHORT-LISTED FOR THE FOUR
LICENSES INCLUDE ONGY ONE FOREIGN BIDOSR, MIN. A
SECONDARY SOUTH AFRICAN PROVIDER, THE OTHERS ARE
ESSENTIALLY LOCAL.

4. (€) BPE APPEARS TO UNDERSTAND AND PLACE A PREMIUM OW
THE NEED FOR A STRONG REGULATORY AND LEGAL FRAMEKORK
BEFORE STARTING THE PRIVATIZATION OF REGULATED

posaness8$-1(b)(1)] are 28 aGUING THAT

THE GSM LICENSIRG PROCESS SHOULD BE SUSPENDED AND
DEFERRED. (BPE INVOKES SIMILAR LOGIC TO ARGUE AGAINST
TKE ENRCX POWER BARGES/IPP CONTRACT. THOUGH OTHER
FACTORS IN THIS COMPLICATED ISSUE ARE ALSO INVOLVED

=> REF B.D

{(b)(1)]

—€

00500000000604


> Hi--one of the ACCJ staff very helpfully emailed out the list of
> committees/subcommittees to us--many thanks. It is dated from 9/12/01 but

> hope the energy subcommittee will be listed in the next update!
>

>

>

> -----Original Message-----

> From: Jonathan Kushner [mailto:jkushner@accj.or.jp]
> Sent: Friday, October 19, 2001 11:25 AM

> To: Marcia Wong; Crowther, Mark

> Cc: Hidemi Umemura

> Subject: ACCJ Conference Room Reserved

>

>

> Marcia, Mark: We've reserved the ACCJ conference room for 9:30-11:30 on
> Nov. 12 for a briefing with Neuffer and the others. If that time doesn't

> work and you'd rather do breakfast, we'll check into the TAC. Jon

>

> HESS IIE SIIB ISI IEE III IUR SIE RS INOUER SII IORI Rm

> Jonathan Kushner

> Director, Policy Affairs

> American Chamber of Commerce in Japan (ACCJ)

> Masonic 39 Mori Bldg. 10F

> 2-4-5 Azabudai

> Minato-ku, Tokyo 106-0041

> Direct Tel: (03) 3433-8546

> Fax: (03) 3433-8454

> EMail: jkushner@accj.or.jp Web: http://www.accj.or.jp

Mprrererer tier rrtrrrftrec list itr iii ireti isto esti ettertetir cert itr iii

00500000000013


v<—_—s— OS

ddadsddddddddddadedadd

PRIORITY UNCLASSIFIED , ee
DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT y
PAGE @1 OF 82 HiD= 199839620523 774859 CIT W1D=199839600328 OT4S59
CAVEAT ISI = OF UNDERSTANDING WITH THE INFRASTRUCTURE MINISTRY COVERING
HANDLE VIA TWO PROJECT DEVELOPMENT AREAS:

ACTION = CTRSDBON (1) EPD (1) oGt (00 HOC CA) y POUL) LOG EL)» MBE

AMA CL) ATE (DD eO0MF (1D 7 QC EL) » SEN (=)
CRC = SEOB

PP RUEATRS

OE RUEHUM 1411/01 3060628

INR WUUU 72H

P 9206287 NOV 98

FM ANEMBASSY ULARNBAATAR

10 AUEHC/SECSTATE WASHDC PRIORITY 1413
INFO RUEHBJ/AMENBASSY BEIJING 811
AUERNO/AMENBASSY MOSCOW 2035
RUGHUL/AMEMBASSY SEOUL 0128
RUEHKO/AMENBASSY TOKYO 8178
RUEHHK/ANCONSUL HONG KONG @1t4
RHHMUMA/USCINCPAG HONOLULU HI //FPA/Y
RUERIA/USIA WASRDC 6278

RUCPODC/USOOC WASHOS 6107
RHEBAAA/USDOE WASHOC

ar

UNCLAS SECTION OL OF 92 ULAANBAATAR QOL4IL

SENSITIVE

STATE FOR EAP/GM, E/CEA AND EB/IEP

PASS AID FOR ANE-C. DOWNEY AND G/ENU/EET

USDOE FOR INTL AFFAIRS

SDOC FOR ITA-EAP AND |TA-ENERGY

BEIJING FOR ECON-S.REES AND COMMERCIAL SERVICE-C, ADAMS
E.0. 12988: W/A

TAGS: ENRG ELNY) NG

SUBJECT: EWROH SIGNS AGREEMENT WITH GOM OX TRANSMISS/ON
LINE AND HYDROPOWER PROJECTS

REF: ULAANBAATAR 1031

SENSITIVE BUT UNCLASSIFIED - CONTAINS PROPRUIETARY
IMF ORMAT LON .

1. (GB) SURMARY: THIS MESSAGE GIVES DETAILS OF AN ENROK-
GOM AGREEMENT ON POWER TRANSMISSION LINE AND HYDROELECTRIC
PROJECTS. U.S. POWER COMPANIES ARE IN A DOMINANT ROLE IN
DEVELOPMENT OF TRE MONGOLIAN ENERGY SECTOR, END SUNMARE

2, (GRU-PROPRIETARY INFORMATION) ON OCT, 38s ENRON
INTERNATIONAL CORP, OF ROUSTON, TEXAS SIGNED A MEMORANDUM

=-A HIGH VOLTAGE TRANSHISSION LINE TO RUN FROM THE IRKUTSK
REGION OF CENTRAL SIBERIA TO NORTHERN CHINA GEFTEL).
UNDER THE TERMS OF THE MOU, ENRON WILL AGREE WITH THE GOM
‘ON THE BORDER CROSSING POINTS FOR THE POWER LINEr THEN
UNDERTAKE A FULL FEASIBILITY STUDY INCLUDING AM OPTION
FOR MONGOLIAN OFFTAKE OF ELECTRICITY FROM THE MAIN POWER
LINE. THE TRANSMISSION LIRE ROUGHLY WOULD FOLLOW THE
TRANS-NONGOLIAN RAILWAY LINE> ENTERING MONGOLIAN TERRITORY
AT CHIATIA AND CROSSING INTO CHINA NEAR ERLIAN CERENHOT) .
THIS PROJECT WOULD BE WHOLLY OWNED BY ENRON; TRE MONGOLIAN
PORTIONS WOULD BE CONSTRUCTED AND OPERATED BY A LOCAL
‘SUBSIDIARY OF ENRON IKTERNATIONAL,

=-A REVIEW OF OPTIONS AND ECONOMIC FEASIBILITY RELATING 10
HYDROPOVER DEVELOPMENT, FOCUSING ON THE STALLED EGIIN GOL
HYDROELECTRIC PLANT PROJECT. ACCORDING TO THE HOU»
EWROK'S STUOY WOULD INCLUDE “PARTICIPATION IN THE
DEVELOPMENT» DESIGN» PROCUREMENT: FINANCING, CONSTRUCTION»
OWNERSHIP AND OPERATION OF HYDROELECTRIC POWER GENERATION
FACILITIES)” INCLUDING BUT MOT LIMITED TO EGIIN GO.
ENRON WILL EXAMINE OTHER POSSIBLE HYDROPOWER SITES:
TRAQEOFES WITH OTHER FORMS OF POWER GENERATION E.C.+ COAL
POWERED PLANTS: COAL GASIFICATION» IMPORTED ELECTRICITY
GAS TURBINE PLANTS; AND CRUDE OIL BURNING PLANTS) TO
FACILITATE A GOM DECISION OM KAETAER TO PUT THE EGIIN GOL
PROJECT OUT FOR INTERNATIONAL TENDER AND MHAT THE OPTIMAL
PROJECT DESIGN NICKT BE. ENRON HAS ASSURED TRE
INFRASTRUCTURE MINISTRY THAT THIS REVIEW WOULD BE DONE AT
NO COST TO THE GOH AND THAT WITHOUT PREJUDICE TO THE
FINAL RESULT, IT MOULD COMPETE IN AN INTERNATIONAL TENDER
tf THAT IS WHAT THE GOM DECIOES SHOULD BE DONE. —ICOYMMENT:
IF THE GOM DECIDES TO PUT A HYDROPOVER PROJECT OUI FOR
INTERNATIONAL TENDER, IT 1S LIKELY THAT THE SARENTS GROUP
WILL BE ASKED BY THE STATE PROPERTY COMM) TTEE 10 MaNiaGe
THE PROCESS AS AN ADDENDUM TO CUR USAID PRIVATIZATION
PROJECT.)

3. (SRU-PROPRIETARY INFORMATION) ENRON HAS SET UP AN
OPERATING COMPAKYs ENRON INTERNATIONAL MONGOLIA LTD, THAT
WILL BE LICENSED UNDER MONGOLIAN LAY, AS AN
INFRASTRUCTURAL INVESTOR: ENRON WILL BE ENTITLED 10 A
COMPLETE TAK ENEMPTION FOR 1@ YEARS AND A SO TAX

~ REDUCTION FOR THE NEXT FIVE YEARS, THE GOM WILL BENEFIT

FROM VAT PAYMENTS OX ITS MONGOL IAK OPERATIONS: RIGHT OF
WAY FEES: AND ROVALTIES ON THE ELECTRICITY PASS-THROUGH.
ALTHOUGH AN ADDITIONAL INVESTMENT UP TO $280 NILLION MAY
BE REQUIRED, A CONVERTER STATICN COULD PROVIDE OFFTAKE
FROM THE TRANSMISSION LINE FOR THE ULAANBAATAR OR DARKHAN-
ERDENET SECTORS? THE FEASIBILITY OF THIS APPROACH WILL SE
EXAMINED BY THE GON AND ENRON, ENRON'S NEXT STEP IS 10

uMeLACCICIEN

ES

o/s

00500000000561


Peer eer errr errrrrerrrry

PRIORITY

CONFIDENTIAL

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

PACE O1 OF 82 M1D=208112900661 63647 9/18157
CAVEAT IS) =

HANDLE WIA

ACTION = (TRS)BOU (1) CALL C2) e106 (1) + IOC AL)» IMB (1) > IMF (Lia ASML)

ATF (1) 0 PTH (1) sOUME (1) QC (1) SEM (+) TSDN +) .

CRC = DANG

PP RUEATRS:

DE RUSBAY 38726/81 1293813

TINY coCée 22H

PR OS1B132 MAY 81

FH ANCORSUL HUMBAT

TO RUEHC/SECSTATE WASHDC PRIORITY 2228
INFO RUEHNE/ANEMBASSY NEW DELHI 7694
RUERMEC/ANCONSUL CALCUTTA 1S1S
RUEHCG/AMCONSUL CHEMNAL 4091
RUEATRS/TREASOEPT WASHOC
RUCPDOC/USDOC WASHDC 8113

sr

CONFIDENT FAL SECTION Ol OF 62 MUMBAI 96726

STATE PASS EXIMBANK FOR RITA MURRELL/DONNA SCHNEIDER
STATE PASS OPIC FOR LOREN RODWIN AND RUTH ANN NICASTRI
STATE PASS USTR FOR RICK RUZICKA

STATE PASS SEC FOR MARISA LAGO

TREASURY FOR GEETHA RAO

USDOC FOR 3131/010/ANESA/KEREKNAN
USDOC FOR $530/KAC/OSAO/ASTERN
USDOC FOR 4530/MAC/OSAO/RAARDING

£0, 12958: DECK: 05/07/2018

TAGS: ENRGe EFIN: ECOMr IN

SUBJECT: MAY 11 MEETING WILL BE INCONCLUSIVE FOR ENRON/OPC:
TERMINATION LIKELY TO FOLLOW

REF: A) MOMBAL 788, B) MUMBAI 689 AND PREVIOUS

CLASSIFIED BY CONSUL GENERAL OAVID P. GOOD FOR REASON 1.50,

1. (SBU) REPRESENTATIVES OF ONBHOL POWER COMPANY (OPC! KAVE AGREED
TO MEET FRIDAY, MAY 11 IM MUMBAI WITH REPRESENTATIVES OF THE cODBOLE
COMMITTEE: CHARGED BY THE GOVERNMENT OF MANARASHTRA (GON TO
RENEGOTIATE THE POWER PURCHASE AGREEMENT (PA) BETYEEN DPC AND THE
WABARASHTRA STATE ELECTRICITY BOARD CISEB). IN ACS
TUESD.AY AY 8) WITH THE CONSUL GENERAL: [oye }

PESSIMISTIC THAT THE MEETING WOULD YIELO ITIVE RESULTS.

{(b)(1) , (b)(4)]

W1D=2081 12500661 W634)

{(b)(1) , (b)(4)]

93/18157

{(b)(1) , (b)(4))

4. (SEU) POST HAS DEVELOPED THE FOLLOWING TIMELINE OF DATES THAT
WILL RAVE SOME BEARING ON WHAT APPEARS TO BE AN ALMOST CERTAIN
PROLONGED ARBITRATION PROCEEDING. IT PROVIDES A USEFUL CONTEXT FOR
MOVES AND COUNTERMOVES TAKING PLACE IN RECENT DAYS. WHEN READING
WTe THE DEPARTMENT SHOULD BE AWARE THAT IT 1S INFORMAL AKO SHOULD
NOT BE SEEN AS A LEGAL DOCUMENT.

APRIL 4 -- ENRON/DPC FILES NOTICES OF “ARBITRATION AND CONCILIATION"
TO GO| FOR NOT HONORING COUNTER-GUARANTEES ON PAYMENT OF DECEMBER
2600 BILL. NINETY DAYS MUST ELAPSE BEFORE ACTUAL ARBITRATION CAN
BEGIN.

APRIL 7 == ENRON/DPC ISSUES MOTICE OF “POLITICAL FORCE MAJEURE TO
COM FOR HAVING TAKEN ACTIONS “WHICH HAVE BAD OR ARE LIKELY TO BAVE
A MATERIAL AND ADVERSE EFFECT UPON THE PERFORMANCE OF DPC’S
OBLIGATIONS UNDER THE PPA *

APRIL UO =~ ENRON/DPC INVOKES THE "STATE SUPPORT AGREEMENT” AND
“SUPPLEMENTAL STATE SUPPORT AGREEMENT" FOR COW'S F.AILURE TO PROVIDE
“ALL MEANS OF SUPPORT TO THE PROJECT AS REQUIRED BY THE PPA,

APRIL 12 == ENROK/DPC FILES NOTICE OF ARBITRATION TO GOK BASED OW
CLAUSES IN THE PPA RELATED TO PENALTIES CHARGED 10 DPC. RESPOKDENT
MUST APPOINT AN ARBITRATOR WITHIN ONE MONTH,

APRIL 23-25 =~ LENDERS AND DPC BOARD REET IN LONDON, LETTERS SENT
TO GOI WITH DEMANDS REGARDING PAYMENTS AND GUARANTEES,
AUINORIZATION GIVEN TO EMROM/DPC INDIA TO ISSUE TERMINATION NOTICE,
BUT NO INSTRUCTIONS TO DO SO.

HAY 11 -- GODBOLE COMMITTEE SCHEDULED TO MEET WITH DPC AND KSEB.

MAY 18 ~~ LENDERS SCHEDULED TO MEET IM LONDON, PARTIES HAD AGREED
TO MEET 23 DAYS AFTER THEIR APRIL 25 MEETING.

JUNE 4 ~~ BLOCK ONE OF PHASE TWO (748 MW) GOES ON LINE AT OPC,

JULY 3 -- ARBITRATION MUST BEGIN IN LONDON IM RESPONSE 10 NOTICE

CONFIDENTIAL

00500000000593


<—s—oSsm oe

PRIORITY UNCLASSIFIED
DEPT TREASURY CO

PAGE 07 OF 87 M1D=1998328B1117 ensgs2 (24/1272
EXPORTS TO INDIA AND THE BOG’S APPREHENSIONS AND

DELAYS ARE AT LEAST UNDERSTANDABLEs If KOT ENTIRELY
EXCUSABLE, THE POTENTIAL TECHNICAL COOPERATION FROM _,
TWE USG AND THE ENERGY ROUNDTABLE SLATED FOR NEXT MONTH "
IN WASHINGTON SHOULD HELP. THE BDG'S ENERGY SECRETARY
WOULD LIKE TO INCREASE COMMUNICATION BETWEEN HIS

GOVERNMENT AND THE OPERATORS, AND HAS SCHEDULED

WEETINGS HERE. WHICH IS A GOOD SIGN. GIVEN ALL THE
INVESTMENT AT STAKEs EASILY BETWEEN USD 1.5 10 2.8

BILLION JUST FOR U.S. COMPANIES ALONE: BOTH SIDES HAVE
PLENTY OF REASONS TO WORK THINGS OUT.

OL ZMAN

ar

13481

TFS

NN

UNCLASSIFIED

MCEN
PH 622-2222 RM 1121/MT°

0500000000715


FROM (MON) 5. 4°98 10:39/ST. 10:36/NO. 4260060244 P 9

CDE'S LEGAL STATEMENT - RE: MILITARIZATION

CDE’S LETTERHEAD PAPER
CORPORACION DOMINICANA DE ELECTRICIDAD

The Corporacién Dominicana de Electricidad (CDE) signed a
contract of purchase-sale of energy with the firm Dominican Power
Partners (AES). In conformity with said contract, we are in front of
what in law is denominated "A concession of Public Service", which
is when it is given, during a determined time period the management
of a public service to a private enterprise, which then becomes a
collaborator of CDE's Administration, to whose control it remains
subject, and that is paid by means of energy invoices submitted to
the users of the service. Consequently what AES is providing is a
public service, which, in written sense, is now under the special
judicial regulations, which imply for CDE's Administration a series of
prerogatives and powers aside from the common rights, with the
purpose to make easier the continuous and regular management of
this public enterprise.

It is denominated as Service of Public Utility, to certain lucrative
activities, that are performed by particular persons, but that, for their
need for the public, must be submitted to a regime of vigilance and
tutelage by the Estate, that is capable of assuring in every moment
its maintenance, continuity, efficiency and its fair price.

This service is submitted to a formal and specific legislation,
contained in the Law No. 848, dated February 23, 1933, on the
performance of the services of Public Utility. Articles 1 and 6 of said
law, establish textually the following:

Art. 1 - The performance of all Public Utility Services shall be under
the super vigilance and the control of the state, as Services of Public
Utility will be considered, the supply of electricity for lighting, energy
or other purposes, the supply of water, the services of Telephones,
Telegraphs, Radiotelegraphs and the others for which purpose and
nature are declared included in this category by the Executive Power.

00500000001432


Prom: ex.mail. *LandbergCAsstate.gov"

To: ex.mail ("DelareTLastate.gov", *WattaRM@state gov",
Date: 3/9/00 5:21pm

Subject: FW: MIGA guarantees for DR

As you can see in the attached document from Treasury, the MIGA Board will
consider and vote on a DomRep power project on Tuesday, March 14. Treasury

is asking State [(b)(5)]

Your comments are requested by early afternoon Friday. If there is a
consensus that we do want to take this action, it seems to me that we would
want to follow up on it, directly to the GODR and maybe to the DR Embassy,
if only to lessen the perception that we're just being petty. I'm open to
Suggestions. Please pass this email to anyone else who should see it.

thanks, chris

----+-Original Message-----
From: Greg.Christopulosédo.treas.gov
{mailto:Greg.Christopulosedo.treas.gov)

Sent: Tuesday, March 07, 2000 3:19 PM

To: LandbergCaes' gov; wattaRm@state.gov

Cc: Gay.Sillsedo.treas.gov; Gary.Samplinerado.treas.gov
Subject: MIGA guarant: for DR and Nicaragua -Forwarded

Date: 03/07/2000 03:17 pm (Tuesday)

From: Greg Christopulos

To: Landberg, wattsrm

CC: DOM3.DOPO6.SAMPLINERG, SILLSG

Subject: MIGA guarantees for DR and Nicaragua -Forwarded

{(b)(5)]

00500000001173


Wunderlin, Linda

From: Wong, Marcia K [WongMK@state.gov]
Sent: Wednesday, December 05, 2001 12:48 AM
To: Abbott, Lucy K; Robert. Kaproth (E-mail)
Subject: Clearance on Cable attached on Enron

w |

12 2001Frroneable de
s Guys: | know you're absolutely nuts--I've attached a draft cable on

Enron

and as i touched on the japan financial impact briefly | wanted to make sure

you saw it for comment/clearance. don't spend too much time on it as | know

you've got Erai sama in town!

if ican have your comments by tomorrow that would be great,
<<12.2001Enroncable.doc>>

Marcia K. Wong

Trade Policy Unit Chief/Economic Section
US Embassy

10-5 Akasaka 1-chome

Minato-ku Tokyo 107-8420

(tel) 3224-5029; (fax) 3224-5019

00500000000008


vw<—S— oS

IMMEDIATE

PAGE 82 OF #3 W10*199916602418 HRS
BEFORE JULY 1. OTHER SOURCES HERE BELIEVE IT IS LIKELY
TO OCCUR BETWEEN JULY 1 AND 1S. THE GENCO CLOSING WILL
FOLLOW.

1S/19352

8. (SB) OTHER IPP SOURCES HAD RECENTLY EXPRESSED THEIR
CONCERN TO ECONOFF THAT ENRON WOULD TRY TO POSTPONE TRE
GENCO CLOSING BECAUSE OF DIFFICULTIES WITHIN ITS
CONSORTIUM (LED BY SEABOARD) AND IM GETTING FINANCING,
THESE SOURCES ALSO BELIEVED THAT ENRON WOULD RESIST
UNCLAS SECTION 82 OF 82 SANTO DOMINGO 622724

‘SENSITIVE

DEPT PASS OPEC FOR M.PEREIRA AND M. MONMEIMER
DEPT PASS USDOT FOR HARAD

USDOC FOR 3134/USFCS/O10/WH/RD

USOC FOR 4322/1TA/TEP/WA/ONCE/SIEGEL MAN

£.0, 12958: N/A
TAGS: ERRG EIKV PREL OR
SUBJECT: SWITH-ENRON SETTLES ONCE AGAIN

CLOSING IN ORDER TO MAINTAIN ITS LEVERAGE IN PUSHING
FOR A SMITH-ENROM SETTLEMENT. THE SETTLEMENT, HOMEVER,
OBVIATES OWE OF TAESE oIFFICuLTIES. [()(6)]

TWAT HE HAD SPOKEN AT LENGTH THE
AETERROOM OF JUNE 10 WITH A GERMAN BANKER WHO RAD
COMMENTED TO KIN THAT THE SETTLEMENT WILL MAKE THE
FINANCING OF ANY POWER SECTOR PROJECT IN TRE DOMINICAN
REPUBLIC HORE ATTRACTIVE,

{(b)(4)]

$. (SB) THE DISCO/GENCO CLOSINGS ARE UNLIKELY TO
HAPPEN IN THE KORMAL 38 DAY PERIOD SMITH-ENROM WILL
WAVE TO “CURE* THE DEFAULT. IN THESE CIRCUMSTANCES:

{(b)(4) , (b)(6)]

FINAL STEP IN DISPUTE RESOLUTION

CLASSIFIED

UN
DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

D

‘N1D=199916682418 44023 1S/1938Z

‘18, (SBU) THE FINAL STEP IM THE RESOLUTION OF THE
SMITH-ERRON DISPUTE WILL BE THE SUBMISSION OF THE
REVISED CONTRACT TO THE CONGRESS, WHEN ASKED IF HE WAS
CONCERNED ABOUT THE RECEPTION IT IS LIKELY 10 GET IN
THE CONGRESS: [()(6 Spt WE EXPECTS NO DIFFICULTIES.

{(b)(4) , (b)(6)]

COMMENT

LL, (BU) THIS SETTLEMENT 1S A SUBSTANTIAL VICTORY FOR
‘SMITH-EMROM AND FOR CDE. by6 THAT AT
HAS SOVED A DIFFICULT PROBLEM FOR ENRON BOTH IN TERMS
ITS INTERMATIONAL IMAGE AND ITS ABILITY TO CONTINE
TO PARTICIPATE 1M THE ATTRACTIVE DOMINICAN POWR

MARKET. ITTED THAT ENRON WOULD HOTHAVE
GONE rise) (Oi GENERADORA HAIMA PROJCT IN THE

ABSENCE OF THIS SETTLEMENT. [(Ip)(4) , (b)(6)]

12 w[(b)(6)] THE SETTLEMENT WILL ALSO
LESSEN INVESTOR CONCERNS ABOUT FINANCING DOMIKICAH
POWER SECTOR PROJECTS, THESE CONCERNS ARE MOT LIKELY
10 BE COMPLETELY ALLEVIATED UNTIL AFTER THE DISCO/GENCO
SETTLEMENTS YIELD THE USS7B MILLION FUND? PAYMENTS ARE
TADE OUT OF THE FUND; AND THE ESCROW ACCOUNT FACILITY
1S SET UP FOR PAYMENT OF THE REMAINING IPP DEBT. THE
SETTLEMENT 1Sx HOWEVER: ANOTHER MAJOR STEP IM THE RIGHT
DIRECTION,

{(b)(5) , (b)(6)]

var

42724

ee

Hunt seein .

00500000001333


(FRID 2. 18°00

CONFIDENTIAL

81 FINALLY GOT THS BALL ROLLING: AFTER DOING ALMOST
HOTHING FO? FIVE MOMTHS OM THE FIRST RCUND CF
PRIVATZZATIONS PROMISED FOR THE END OF 1999, THE
QBASNWJO ADMINISTRATION IN DECEMESR Lament? (b)(1)]
PUSH TO REAPPOINT PP:
ADVISERS AND DRAW UP BID DOCUMENTS. NOT COINCIDEETALtY,
THIS OCCURRED JUST AFTER VICE PRESIDENT ATIKU BROUGHT IN
MASIR EL-RUFAI TO BE DIRECTOR GENERAL OF THE BUREAZ OF
PUBLIC ENTERPRISES (BPE), THE IMPLEMEXTATION BODY FOR
THE NATIONAL COUNCIL ON PRIVATIZATION HEADED BY TH2 VICE

PARSER" [(b)(1)]

{(b)(1)]

LAGOS 92 OF 0S 527

{(b)(1)]

++ arco: [(b)(1)]

ODUA WENT TO COURT TO STOP THE SALE (THE CASE WAS
SUBSEQUENTLY SETTLED) , {(b)(1)]

-- PSB INTERNATICNAL BANK: ANOTHER WELL-REGARDED ENTITY,
THIS BASK 1S RUN BY MUHAMMAD HAYATU-DEEN, A PROMINENT

mommees=*1(b)(1)]

CONFIDENTIAL

9251-87.

9:30 °NO. 3760637536 F ¢

00500000000603


Israeli support for economic development in Gaza and the West Bank Israel's overall
support for Gaza’s future economic development is further illustrated by its recent
decision to allow the PA to sign contracts with foreign companies for the exploration of
gas off the Gaza coast. This approval was given despite the facts that mineral Tights in
this area were left ambiguous in Israeli-Palestinian agreements. Prime Minister Barak
has also demonstrated his support for economic cooperation by approving December 22,
1999, natural gas agreement between Israel and Egypt: Calling the project the “Pipeline
of Peace,” Barak noted that the line would supply gas to Israel, Gaza, and later to Turkey
(see attached Annex 2).

In conclusion The Israeli government has repeatedly stated or demonstrated its interest
in the successful implementation of the Gaza Power Project. In light of the above, OPIC
may conclude that the Israeli government will support the project.

Transparency and Equity Participants

PCSC The Board expressed concems regarding the involvement of certain equity
participants. The participation of the Palestinian Commercial Services Company (PCSC)
and of Mr. Mohammad Rashid, in particular, was raised. As Chairman Yassir Arafat's
advisor on economic issues, Mr. Rashid plays an important role in the development of
economic policy and economic negotiations with Israel. He also serves as the head of
PCSC, a government-owned holding company with shares in many of the major
commercial activities in the West Bank and Gaza (e.g., petroleum, concrete,
telecommunications, utilities, advertising, gambling, beverages and insurance projects).
PCSC is also responsible for promoting Palestinian business and infrastructure
development and for encouraging foreign investment in Gaza and the West Bank. It was
in this capacity as PCSC chairman that Mr. Rashid and this project were introduced to
Enron.

PCSC association with the Gaza Power Project PCSCisa minority shareholder in the
PEC. The company holds 6% of the total project. This share will be reduced when one-
third of the total project’s shares are offered on the open market to private Palestinian
investors. At that time, the PEC will hold no more than one-third of the total project
shares. The small size of PCSC's share in the Enron project (4%) combined with the
strength of Enron and the other parmers leave PCSC with a limited impact on the
decision-making for the project.

Transparency and Risk Mitigation The Palestinian Authority has repeatedly asserted its
commitment to increase transparency in the West Bank and Gaza. In October, 1999,
Chairman Arafat responded to the intemational donor community’s concem about this
issue by announcing the establishment of a ministerial-level committee to work with the
IMF towards economic reform, greater transparency, and the passage of commercial
legislation.

SENSITIVE BUT UNCLASSIFIED

00100000000314


dnedddddsaaddaaae

PRIORITY UNCLASSIFIED Ne
DEPT TREASURY COMCEN |} LF 7h
PH 622-2222 RM 1121/MT , |
PACE G1 OF OF CoN XNPOOIS 049562 ‘07812 CSW = MHPOOAS 048562 west
CAVEAT IS) = PAID THEM ON MAY 29 FOR ELECTRICITY THEIR PLANTS
HANDLE VIA

ACTION = (TREASURYIGO4 (1) CALE) F INCEN-READDRESS (-) GOR (1)
COUN CLE IDB OD) (DC M1) HMB ALD AE CD) ASMULD PTF Ab ATE UD) UME AD
OC (1 SEN E11 TSON (+1

Ch = 4884

PP RUEATAS

DE RUEHAK 03823/61 1521446

DAR WOU 22K

P GIIS462 JUN at

FA ANENBASSY ANCARA

TO RUEMC/SECSTATE WASHDC PRIORITY 3341
INF RUCPOOC/USOOC WASHDC
RHEBARA/USDOE WASHOE
RUEATRS/OEPT OF TREASURY WASHOS
RUERLO/AMENBASSY LONDOK 2183
RUEHDA/ANCONSUL ADANA 9$13
RUEHIT/AMCONSUL ISTANBUL 3114
cy

UMCLAS ANKARA 983529

STATE FOR ES/CBED) EURISE

STATE FOR EB/OIA STEVE NEWHOUSE

USDOC FOR GODG/TD/AS/ADVOCACY CENTER
USDOC FOR 4212/1 TA/MAC/OEURA/CPD/DDEF ALCO
USDOC FOR 61t0/1D/81/0EIM/MBEEMEN

USDOE FOR ROSS!

TREASURY FOR OASIA - MARSHALL MILLS
STATE PASS 10 OPIC FOR BULIS: SCHMITZER
STATE PASS 10 EXIM FOR SCHNEIDER

€.0, 12958: DECI: A/A

TAGS: EWRG) EINYs ECON EFINe PRELy TU

SUHJECT; TEAS PAYS COMPANIES FOR FEBRUARY ELECTRICITY
BILLS

REF: WA) ANKARA 3192 1B) ANKARA 2384 IC) ANKARA 3416

1, GSBU) SUMMARY: ON MAY 29+ THE TURKISH GOVERNMENT PAID
ENRON'S TRAKYA AND EDISON MISSION’S DOGA PROJECTS FOR
QUISTANDING ELECTRICITY BELLS FROM FEBRUARY. TURKISH
TREASURY 1S PREPARING A SUPPLEMENTAL FUND OF 409 TRILLION
LIRA GROWGHLY USD 428 MILLION) TO ALLOW THE STATE ENERGY
COMPANIES TO PAY THEIR BILLS OVER THE NEXT FOUR MONTHS
WHILE THEY SET THEIR FINANCIAL NOUSES IN ORDER, COMPANY
OFFICIALS ARE PLEASEDs ALTHOUGH THEY REMAIN CONCERNED
ABOUT UNPAID FOREIGN EXCHANGE DIFFERENTIAL BILLS. EXO
SUMMARY.

2. GSBU) OFFICIALS AT DOGA ENERGY dEDISON MISSION) AND
TRAKYA ELECTRIC (ENRON) CONFIRMED THAT THE TURKISH STATE
ELECTRICITY TRANSMISSION AND GENERATION CONPARY (TEAS!

GENERATED IN FEBRUARY. [(b)(4)]

{(b)(4)]

4. su [(b)(6)}
TOO ECONOFF MAY 38 THAT ((b)(6)).

HAD MET OVER THE MAY 26 WEEKEND
TO DISCUSS MEANS TO RESOLVE THIS PAYMENTS ISSUE AS
QUICKLY AS POSSIBLE. | (b)(6)] PROMISED THAT ENERSY
WOULD HIRE A LAWYER H TEAS 10 RESOLVE THE
FOREIGN EXCHANGE DIFFERENTIAL QUESTICN AS QUICKLY AS
Possialé. (b)(6 NERSTOOD THAT TEAS 1S ALREADY
WORKING 1 EDULE AN APPOINTMENT FOR LTS LAWTERS 10
MEET DURING THE FIRST MEEK OF JUNE WITH LAWYERS FROM THE
FOUR BUILD OPERATE AND TRANSFER GENERATION PLANTS TO
RESOLVE THE ISSUE.

$. (sau) [(1b)(6)9so veroRreD THAT TREASURY HAS DECIDED
TO PROVIDE AN ADDITIONAL $86 TRILLION LIRA FUND IN THE
SUPPLEMENTAL BUDCET UNDER PREPARATION WAICH WILL BE
AVAILABLE FOR TEASr TEDAS AND TURKISH STATE PIPELINE
COMPANY AYD GAS IMPORT MONOPOL IST BOTAS TO COVER THEIR
OPERATION EXPENSES FOR THE NEXT FOUR MONTHS. TRIS
ADDITIONAL MONEY SHOULD ALLOW TRESE AGENCIES TO DISCHARGE
OUTSTANDING OE@TS AND STAY CURRENT OX NEW DEBTS WILE
TWEY REORGANIZE THEIR EXISTING CASH FLOW TO PREVEAT
ARREARAGES FROM ARISING IM THE tute f(b) (6) Fore
THAT THE TURKISH PARLIAMENT WOULD SUBMIT THIS
SUPPLEMENTAL FUND TD PARLIAMENT FOR APPROVAL OURING THE
FIRST EEK OF ww [(b)(6)}1" THAT TREASURY WOULD
ALSO KEEP A ERY CLOSE EVE ON EXPENDITURES MADE aY THESE
SEATE AGENCIES TO FORCE THEM 0 CUT EXPENSES. (y)(4)]

00800000000020


IMMEDIATE

CONFIDENTIAL

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

PAGE 82 OF 83

((b)(1)]

WID= 199914681141 832321

CONFIDENTIAL SECTION 62 OF 63 DHAKA 801242

LONDON FOR SUTPHEN
STATE PASS OPICs EXIM: TOAr USDOC: USAID

€.0, 12958: 65/25/84

TAGS: ENRGr ECOMe EAIDs EINDs ETRD. EACR: BC
SUBJECT: BANGLADESH'S CONTROVERSIAL “CRASH* POWER
PROGRAN

{((b)(1)]

WMID= 199814601141 2921
+= REALISTIC TIMETABLE: THE NEGOTIATIONS FOR TRE
PROGRAM WILL TAKE LONGER THAN STATED BY THE B0Ge SINCE
NEEDED SPADEWORKs SUCH AS A DETAILED REQUEST FOR
PROPOSAL: HAS KOT BEEN DONE,

STAKES FOR U.S. COMPANIES

7, (0) EWROM HAS BEEM TRYING FOR OVER A YEAR TO SELL
TWE BDG EMERGENCY POWER--ON AN UNSOLICITED BASIS-- TO
HEE} THE SUPPLY-DEMAND GAP, WHEN THE CRASH PROGRAM WAS
ANNOUNCED: THE BDG WAS ABLE TO TAKE THE ENRON PROPOSAL
ANDe WITROUT ACCEPTING IT: TOUT IT TO THE PUBLIC AS
EVIDENCE THAT IT WAS SERIOUS ABOUT DOING SOMETHING

ABOUT TRE POWER SHORTAGE. [(b)(1) , (b)(4)]

$8. sau [(b)(4)]

OGDEN: WITH PARTNERS EL PASO
AND WARTSILAs HAS BROUGHT A 118 MW POWER BARGE TO

met [(D)(4)]

SOME SNIPPETS OF THE “CRASH PROGRAM
COMF IDENT LAL SECTION O3 OF 83 DRAKA 001242

LONDON FOR SUTPHEK
STATE PASS OPIC: EXIMe TOAr USDOG. USAID

£,0. 12958: 65/25/04

CONFINENTIAL

N

B/N

00500000000658


<I oOsrno

ROUTINE UNCLASSIFIED

DEPT TREASURY COMCEN.
PH 622-2222 RM 1121/MT

PAGE 82 OF 62 10=199835881898 OIS548 TV 1SL8Z

EMRON, OTHER |PP CLAIMANTS ARE NOT BEING PAID. aT
INDUSTRY SOURCES TELL US CDE 1S EVEN IN DEBT TO LOCAL 1460
IPP METALOOM ONOTE; THIS 1S SURPRISING GIVEN METALOOH'S $037
POLITICAL CONNECTIONS). ALTHOUGH COASTAL’S MANAGER HAD ANN

TOLD US HE PLANNED TO TAKE HIS PLANT OFF LIME TAE WEEK
OF DECEMBER 14+ COASTAL HAS WOW JOINED WITH SEABOARD IM
SENDING A LETTER TO COE SAYING THEY WILL TAKE BOTH
PLANTS OFF LIME ON DECEMBER 26 IF THEY AREN'T PAIO.
BETWEEN THEM THE TWO PLANTS GENERATE 105 MW. THERE ARE
UNCLAS SECTION @2 OF @2 SANTO DOMINGO B86460

USDOC FOR 3124/USFCS/OL0/WH/RD
USDOC FOR 4322/1TA/IEP/WH/ONCB/SIEGEL MAN

SENSITIVE

£.0, 12988: M/A
TAGS: ERG EIMV PREL OR
SUBJECT: ELECTRICITY SECTOR WRAP-UP

INDICATIONS THAT COE 1S TRYING TO SET MONEY QUT OF THE
CENTRAL GOVERNMENT TO MAKE A BIG ENOUGH PAYMENT TO KEEP
THE POWER ON,

3. (S8U) IN THE MEANTIME. INDUSTRY SOURCES TELL US
COE'S COLLECTIONS HAVE DECREASED IM THE SUPPOSED RUNUP
TO CAPITALIZATION. IN PLACE OF THE 48 PERCENT OF TOTAL
COLLECTIONS THE COMPANY HAS USUALLY REALIZED: IT HAS
SEEN COLLECTING ABOUT 26 PERCENT. SINCE HURRICANE
GEORGES: COE WAS ALSO MOT RECEIVED THE FULL AMOUNT OF
THE MONTHLY GOVERNMENT SUBSIDY. OUR SOURCES LAY THE
BLAME FOR THIS AT THE FEET OF [(b)(6)]

‘WO CONTINUES TO CLASH wiT#[(b)(6)]

1B, (SBU) AS NOTED ABOVE INDUSTRY REPRESENTATIVES ARE
RELIEVED OVER THE POSTPONEMENT OF THE CAPITALIZATION --
BETTER A POSTPONEMENT THAN A FAILURE. TREY ARE HOPEFUL
THAT THE ADDITIONAL TIME WILL GE WELL SPENT 1
ANSWERING THE QUESTIONS OF WOULD-BE INVESTORS, HOPEFUL
BUT SOMEWHAT SKEPTICAL. ANOTHER POSTPONEMENT COULD
YELL BE THE DEATHKMELL FOR THE CAPITALIZATION OF COE.
OME OBSERVER HAS COMMENTED THAT THE 1997 PRIVATIZATION
LEGISLATION WOULD ALSO ALLOW THE GODR TO SIGN A LONG
TERM CONTRACT WITH A FOREIGN COMPANY TO ADMINISTER COE,
THIS, WHILE A LESS IDEAL OPTION) MIGHT SERVE TO LESSEN
THE POLITICIZATION OF CDE AND GET THE COMPANY BACK ON
iTS FEET.

CUBBI SON

UNCLASSIFIED

1D=19883Sag1S98

M2S548 UAISLBL

00500000000026


PRIORITY CONFIDENTIAL

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

PAGE 62 OF 62 MiD=209887381718 836528 = 13/16412 M10=200887361718 836528 13/16412

[(b)(4)] IL, (SBU) LIKE TRE REFINERIES: THE PERFORMANCE OF NEPA
HAS ACTUALLY DETERIORATED SINCE THE ADVENT OF THE

OBASANJO ADMINISTRATION LAST YEAR BECAUSE PARASTATAL
CORRUPTION: MISHAKAGERENTs INCOMPETENCE, AAD: TO A
LESSER EXTENT: RESOURCE CONSTRAINTS REMAIN FUNDAMENTALLY
UNALTERED. MOST IF NOT ALL OF HIGERIA WAS THROWN INTO
DARKNESS ON MARCH 18 FOR AT LEAST 24 OURS DUE TO A
CATASTROPHIC NEPA “SYSTEM FAILURE," (PRIVILEGED
RESIDENTS. SUCH AS THE U.S. MISSION: WERE CUSHIONED BY
AUTONOMOUS GENERATORS.) THE NATIONAL BLACKOUT: THE
e SECOND IN THE PAST FOUR: YEARS: UNDERSCORES THE DESPERATE
aca NEED OF NIGERIA: AND ESPECIALLY LAGOS: THE COUNTRY’S
NEXT STEPS ECONOMIC NERVE CENTER: FOR POWER, SOCIAL TENSIONS:
a CRIME, AND ECONOMIC HAROSHIP ARE ALL EXACERBATED BY
“ INCESSANT POWER QUTAGES: WHICH ARGUABLY CONSTITUTE THE
[(b)(4)] GREATEST BARRIER TO ECONOMIC INVESTMENT AND REGENERATION
IM NIGERIA.

[(b)(1) , (b)(4) , (b)(5))
{(b)(1) , (b)(4)]

TWADDELL

CONFIDENTIAL
0500000000639


01/29/01 =12:47 FAX 202 452 0170 ENERGI DIVIOLUN eee

ARE WELL ON THEIR WAY TO OBTAINING ALL NECESSARY GOT
‘APPROVALS TO CONCLUDE THEIR FINANCING WITH TURKISH
TREASURY.

PROJECTS INCLUDE;
PROJECT: HAKKARI DAM AND 208 MW HYDROELECTRIC POWER

PLANT

COMPANY: WASHINGTON GROUP INTERNATIONAL (FORMERLY
RAYTHEON)

STATUS: CONTRACT SIGNED. FINANCIAL AGREEMENT SIGNED,
AWAITING COUNCIL OF MINISTERS APPROVAL. SURVEY WORK
COMPLETED IN OCTOBER 2000, COMPLETION OF DESIGN AND
ENGINEERING EXPECTED IN 2001. CONSTRUCTION TO BEGIN IN
2002.

PROJECT: ALPASLAN II DAM AND 200 MW HYDROELECTRIC POWER
PLANT PROJECT

COMPANIES: ICF KAISER AND HARZA ENGINEERING

STATUS: CONTRACT SIGNED. FINANCIAL AGREEMENT TO BE
SIGNED SOON. COMPLETION OF DESIGN AND ENGINEERING
EXPECTED IN 2001. CONSTRUCTION TO BEGIN IN 2002.

PROJECT: KONAKTEPE DAM AND 210 MW HYDROELECTRIC POWER
PLANT PROJECT

COMPANY: STONE & WEBSTER INTERNATIONAL

STATUS: CONTRACT SIGNED. FINANCIAL AGREEMENT TO BE
SIGNED SOON. COMPLETION OF DESIGN AND ENGINEERING
EXPECTED IN 2001. CONSTRUCTION TO BEGIN IN 2002.

PROJECT; KARGI DAM AND 194 MW HYDROELECTRIC POWER PLANT
PROJECT

COMPANY: BLACK AND VEATCH

STATUS: CONTRACT SIGNED. INITIAL APPROVAL OF THE STATE
PLANNING ORGANIZATION GRANTED. AWAITING FINAL APPROVAL TO
BEGIN NEGOTIATIONS WITH TREASURY. CONSTRUCTION TO BEGIN

IN 2001.

PROJECT: GURSOGUT DAM AND 242 MW HYDROELECTRIC POWER
PLANT PROJECT

COMPANY: LEMNA INTERNATIONAL

STATUS: CONTRACT SIGNED. INITIAL APPROVAL OF THE STATE
PLANNING ORGANIZATION GRANTED. AWAITING FINAL APPROVAL TO
BEGIN NEGOTIATIONS WITH TREASURY. CONSTRUCTION TO BEGIN

IN 2001.

vaomen PERVARI DAM AND 192 MW HYDROELECTRIC POWER PLANT
PRO}

COMPANIES: PARSONS AND ICF KAISER

STATUS: CONTRACT SIGNED. ACCORDING TO STATE PLANNING
OFFICIALS, PROJECT IS INCLUDED IN THE TURKISH
GOVERNMENT'S 2001 INVESTMENT PROGRAM. FINANCIAL
NEGOTIATIONS WITH TREASURY TO FOLLOW. DESIGN/ENGINEERING
IN 2001 AND BEGIN CONSTRUCTION IN 2002.

PROJECT: ERIC DAM AND 170 MW HYDROELECTRIC POWER PLANT
PROJECT

COMPANY: BLACK & VEATCH

STATUS: CONTRACT SIGNED. ACCORDING TO STATE PLANNING
OFFICIALS, PROJECT IS INCLUDED IN THE TURKISH

GOVERNMENTS 2001 INVESTMENT PROGRAM. FINANCIAL
NEGOTIATIONS WITH TREASURY TO FOLLOW. DESIGN/ENGINEERING
IN 200] AND BEGIN CONSTRUCTION IN 2002,

PROJECT: DURAK DAM AND 120 MW HYDROELECTRIC POWER PLANT
PROJECT

COMPANIES: HARZA ENGINEERING, CLARK CONSTRUCTION

STATUS: CONTRACT SIGNED. ACCORDING TO STATE PLANNING
OFFICIALS, PROJECT IS INCLUDED IN THE TURKISH

GOVERNMENTS 2001 INVESTMENT PROGRAM. FINANCIAL

00500000001630


IMMED | ATE CONFIDENTIAL

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

PAGE 62 OF 62 ibe 7eaaosne2361 anus asient i0-280006380361 ang aaa
THAT UHLS SUTUATION COULD UNRAVEL TO THE POINT WERE IT BI
WOULD SEND A DAKAGING NEGATIVE SIGHAL TO THE [(b)(1)]

INTERNATIONAL BUSINESS COMMUNITY ABOUT THE POSSIBILITY OF
DOING BUSINESS IN MIGERIA. IF TRE GOVERNMENT DISAVOKS THE TM* _
CONFIDENTIAL SECTION O2 OF G2 STATE 639767

€.0, 12958: DECL: 62/28/88

TAGS: BEXP+ ENRG+ EINVs EFIM+ ECON» PGOW KI

SUBJECT: ENRON - DEMARCHE REQUEST FOR TRIPARTITE MEETING
OF ENRON, WORLD BANK» AND COM

CONTRACT AND ENRON WALKS AWAYs IT ALSO WOULD BE A REAL

BLOW TO OUR EFFORTS TO ENCOURNGE AMERICAN INVESTORS.

ENRON BELIEVES THE BEST WAY FORWARD NOW IS FOR TRE GOW TO

CONVENE A MEETING OF THE THREE PARTIES INVOLVED 3. GGBU) WE HAVE MADE A REQUEST FOR INFORMATION ON A WORLD
BANK DELEGATION VISIT AND WILL E-WAIL POST WITH DETAILS AS

{(b)(1) , (b)(4)] SOOM AS THEY ARE KNOWN,

1B. IC) DEPT WOULD APPRECIATE A PROGRESS REPORT FROM THE
EMBASSY.

TALBOTT

aT

67

E62

{(b)(1)] -”

CONFIDENTIAL
0050000000061 1


COMMITTEES & SUBCOMMITTEES
Tokyo

Informative monthly meetings and periodic seminars keep
members informed about current trends in Internet-based
commerce.

Executive Briefing Breakfast*

Chair Robert H. Simon, Nick & Associates

At members’ request. organizes briefings on industry-specific
topics in which a panel of speakers familiar with the Japanese
business environment share their expertise and knowledge with
participants,

Financial Services”

Chair Christopher P. Wells, White & Case LLP
Identifies key initiatives that affect the financial services industry.
Presents programs and issues Viewpoints on efforts to reform
Japan's financial services sector.

Food/Agriculture*
Chair Larry Blagg, Market Makers, Inc.

Works to lower tariffs for processed foods, improve certification
standards, and reform food labeling requirements.

Foreign Direct Investment*

Chair Nicholas E. Benes, JTP Corporation
Monitors the environment affecting the creation and
management of foreign investment in Japan. Recommends
actions to be taken regarding local restrictions and limitations
that affect the operation of foreign ventures.

Government Relations*

Chair Thierry G. Porté, Morgan Stanley Dean Witter
Japan Limited

Monitors legislative and other political developments of interest

to American companies doing business with Japan. Coordinates

annual "Doorknock" visits in Washington, D.C. and Tokyo.

Healthcare*

Chair Mark Colby, Colby Group International, Inc,
Promotes the successful marketing of medical devices and
equipment, diagnostics, pharmaceuticals, and medical services
in Japan for U.S. -based companies. Works with the Ministry of
Health and Welfare to encourage deregulation efforts, remove
unnecessary regulations, and ensure the environment supports
the development of innovative new products and services for
Japanese patients.

Healthcare Services
Chair Guy Harris, Digital Medical Communications
Corp.
The Medical Services Subcommittee has been created to bring
together companies with an interest in expanding the medical
service industry in Japan. It is the aim of the subcommittee to
offer expanding value to the Japanese medical system via the
increased productivity and efficiencies available through
Western developed localized services. It is also the aim to bring
capitalistic forces to the forefront of solving the emerging
healthcare crisis,

Housing Industry
Chair Curtis Herron, K.K. Curtis Herron

Promotes U.S. housing products and services in the Japanese
market. Meetings feature guest speakers and networking
Opportunities.

Human Resource Management*

Chair Leo Lawless, B Cube Ltd.

Helps to support companies in effective management of staff.
Together with other professional organizations, works on
monitoring Japanese labor laws. Publishes the triennial report
People Management Issues of American Companies in Japan.

Independent Business*

Chair Mark Ferris, Building2 KK

Provides opportunities to develop relationships and mutual
‘support among foreign enterprises based in Japan. Its popular
Wisdom Council is an excellent venue for exchanging ideas
among small and medium-sized businesses.

Insurance

Chair Charles D. Lake, American Family Life
Assurance Co. of Columbus

Focuses on developments in the insurance and financial

services industry. Provides input to U.S. government

organizations with regard to monitoring compliance and

clarifying the impact of Japanese deregulation measures on

market access.

Intellectual Property*

Chairs Michael O'Keeffe, Kroll Associates Inc.
Andrew P. Tennent, IBM World Trade Asia
Corporation

Invites prominent guest speakers from the Japanese Patent

Office, customs, other agencies and academia for monthly

presentations on intellectual property-related issues. Holds

workshops on license agreement drafting and negotiation and

other practical matters.

Investment Management

Chair Scott M, Gilman, Goldman Sachs (Japan) Ltd.
Promotes full and equal access to Japan's savings and
retirement assets for American firms in Japan qualified to
manage those assets. Works to increase the range and value of
investment products to Japanese clients. Promotes the healthy
growth and development of the investment management
industry in Japan.

Japan-America Cooperative Conference

(JACC)*

Chair Shojiro Makino, Pacific Consulting, Inc.
Established in 1986 by the ACCJ and the Japan/Tokyo Chamber
of Commerce and Industry. JACC identifies specific areas of
mutual concern and coordinates joint Viewpoints on topics
related to regulatory and other market access problems.

00500000000015


m= — aS

IMMEDIATE UNCLASSIFIED a,
DEPT TREASURY COMCEN
PH 622-2222 RM 1121/

PAGE G1 OF 82 W1D=199988208846 73167 112 W10=199988280846 mye) will

CAVEAT (S) = COMMITMENTS FROM PRESIDENTIAL ADVISOR IVICA PASALIC

HANDLE VIA WITH RESPECT TO THE MEETING: (1) THE CROATIAN ELECTRIC

ACTION = CTRSPGOL C1}. BTF (1) CALL (3) G1 (1) HCC) LOC WD) » oe) COMPANY HEP) MUST BE PREPARED TO DISCUSS SPECIFIC

VTF AL) 0 ITAL) sO1ME (1) «00 41) SEN (+) CONCERNS/ISSUES OVER PRICING RATHER THAN CAST RANDOM

CRC = 15F8 ALLEGATIONS? (2) THE GOC MUST DELIVER A FINAL DECISION
AT THE CLOSE OF THE MEETING (0 ADDITIONAL GOVERNMENT

00 RUEATRS REVIEWS/APPROVALS WOULD BE REQUIRED). THE PRESIOENT

DE RVEHVE 1323/81 2821191 HAS APPOINTED PRIME MINISTER MATESA 10 OVERSEE THE

IWR UUUUY 22H MEETING OM THE GOC SIDE AND CHIEF OPERATING OFFICER

0 2311612 MAR 99 (COO) JOSEPH SUTTON WILL REPRESENT EMROM.

FM AMEMBASSY ZAGREB

TO RUCPDOC/USDOC WASHOC IMMEDIATE 3. (SBU) POST IS CONVINCED THAT THE PRESIDENT IS

AVEHC/SECSTATE WASADC IMMEDIATE 7583 COMMITTED TO THIS DEAL AND SEEKS CLOSURE PRIOR TO THE

INFO RUEBLO/AMEMBASSY LONDON IMMEDIATE 9117 PLANNED GOC EVENTS IM CHICAGO EARLY APRIL). STILLe

RUERMO/ANEMBASSY MOSCOW IMMEDIATE 8754 HEP (ND POSSIBLY OTHER LOVER RANKED OFFICIALS) REMAIN

ar OPPOSED AND HAVE CONTINUED TO OBSTRUCT THE PROCESS.

UNCLAS ZAGREB 881323 THIS MEETING MIGHT FINALLY PUSH ASIDE THIS OPPOSITION:
RESULTING IN AN INITIALLED PPA. ON THE OTHER HAND: IT

SENSITIVE COULD END WITH ENRON'S DEPARTURE FROM THE PROJECT. END
‘SUMMARY.

USDOC FOR 4888/MAC/AS/HULLOY

USDOC FOR 4232/MAC/EUR/EERIS/CEEBIC/BURGESS/ROBERTS

USDOC FOR 6808/TD/AC/NUGENT

USDOC FOR 3133/USFCS/O10/EUR/POZA/KOZLOFF 4, (UD ON ARCH 1s ENRON AND HEP COMPLETED WORK ON
THE DRAFT PPA (NOTE: ONLY TRE GAS PRICE WAS LEFT SLANK»

STATE FOR E @/S EIZENSTAT) AND EUR/SCE (HESSENGER) « PER PREVIOUS AGREEMENT, TO BE FILLED-IN AT A LATER DATE

‘S/R WGELSARD) WHEN ENRON SECURED A LOWER GAS PRICE FROM GAZPROM) .
SINCE THEN, HEP HAS REFUSED TO INITIAL THE DOCUMENT.

STATE PLEASE PASS TO USTR/NOVELLI AND KLEIN IM ENRON'S VIEW) THE DRAFT PPA HAD BEEN FINISHED.
HOWEVER: HEP O10 NOT SEE ALL ITS CONCERNS ADDRESSED IN

LONDON AND MOSCOW FOR USFCS/SCO THE DRAFT PPA, MINISTER OF ECONOMY WENAD PORGES AND
HEP GENERAL MANAGER DAMIR BEGOVIC INSISTEO THAT THE

£.0. 12958: H/A DRAFT PPA ENCOMPASSED THE ESSENCE OF THE OVERALL DEAL

TAGS: ENRGs EINVe BEXPs PGOV: AR AND. THEREFORE: REQUIRED APPROVAL AT THE GOVERNMENT

SUBJECT: GOC AGREES TO FINAL MEETING WITH ENRON SESSION. IM THE MEANTIME: AN INTERNAL GOC EXPERT GROUP
ADVISED PRESIDENT TUDJMAN LAST WEEK THAT ENRON'S

1.) THIS CABLE CONTAINS INFORMATION WHICH iS PROPOSED PRICE WAS TOO HIGH. (NOTE: ENRON DOES HOT

SENSITIVE BUT UNCLASSIFIED (SBU), PLEASE TREAT WECESSARILY DISAGREE WITH THE GOC/HEP’S DETERMINATION.

ACCORDINGLY, EWRON REQUIRES THE IMITIALLED DRAFT PPA IN ORDER 10
SECURE A LOWER GAS PRICE FROM GAZPROM. A LOWER GAS

sereeee PRICE WILL REDUCE THE OVERALL COSTS AND PRICE OF

SUMMARY ELECTRICITY.)

2, (SBU) THE AMBASSADOR AS SECURED THE AGREEMENT OF

THE PRESIDENT’S OFFCE FOR A KIGH-LEVEL MEETING BETWEEN pres0e $ ice AGREES TO HIGH-LEVEL MEETING

THE GOC AN ENRON ON MARCH 25 TO RESOLVE QUESTIONS o00

RELATE TO THE ORAFT POWER PURCHASE AGREEMENT (PPA).

AM INTERNAL GOC EXPERT GROUP RECENTLY DETERMINED HAT 5, (SB) FRUSTRATED WITH THE PROCESS (AND LACK OF

EWRON'S OFFER 1S 100 COSTLY. STILL: TH PRESIDENT PROGRESS) « ENRON BECAME VERY ACTIVEs DISCUSSING TRE

HIMSELF REMAINS INTERESTED IM COMPLETNG THE DEAL SITUATION WITH CROATIAN AMBASSADOR ZUZUL+ CONTACTING

SUCCESSFULLY. THE AMBASSADOR INSISTED ON TWO THE PRESIDENT'S OFFICE AND SENDING A LETTER TO THE

UNCLASSIFIED

00500000000551


Also of considerable concern is establishing a sound basis
for balanced development. While true that most major foreign
investments at this time target Maputo, there are several
focussing on the center and north of the country where many
natural resources are located, including arable land of which
only half is farmed.

Agriculture will be central to the long-term development of
the nation and is crucial to the survival of three-fourths of
the population, which derives its livelihood from the land.
Just three years after the successful resettlement of war
refugees in 1993-94, the country became virtually self-reliant
in grain production, but this is subject to good rains. With
the exception of cotton and sugar where commercial investments
are being made, rapid growth in agriculture is unlikely due to
poor small holder farming methods and weak rural markets.
Transportation infrastructure and rural market development have
been key elements in assisting Mozambican agriculture, and
comprise an important part of our AID program in the country.

(SESAV 717)

00500000002077


FROM DEPARTMENT OF STATE 4A

CONFIDENTIAL

((b)(1)]

LAGOS 03 OF OS 527

{(b)(1)]

[(b)(1)]

CON RIENTIAL

(FRI) 2.18°00 9:31.°ST. 9:30 NO. 376063759€ = 6

00500000000605


COMMITTEES & SUBCOMMITTEES
Tokyo

Young Professionals Group

Chair Isabelle Bruckert, DISCO Inc.

Helps younger members establish business contacts within the
community. Provides educational programs for career
development. Sponsors monthly presentations, special events
and an after-work networking party (monthly on the first
Thursday).

*Standing committees

(Committee Information 10-2001)

00500000000018


—<—_—sH—OSsmon

PRIORITY

PAGE 81 042686
CAVEAT (S) =

HANDLE VIA

ACTION = {TRS)BO! (1) CALL GG) »GHUM (1) IDB AL)» LDC (1) « IMB (1) » ITF ¢L)
UTT (Ds OUME (1) QC (1) SEMA)

CRC = $087

1D=199930608925

PP RUEATRS

DE RUSBAY #2367 3061108

TAR UUUUU 12H

PR 6211982 NOV 99

FV AMCONSUL MUMBA!

‘TO RUEHC/SECSTATE WASHDC PRIORITY 8883
IWFO RUEHNE/AMEMBASSY EW DELHI S456
RUEHNEC/ANCONSUL CALCUTTA 2932
RUEHCG/AMCONSUL CRENMA! 3393
RUEATRS/TREASOEPT WASHDC
RUCPDOC/USDOC WASHOE

aT

UNCLAS MUMBAI 62367

STATE PASS EXIMBANK FOR RUTCHINSON AND RITA MURRELL
STATE PASS OPIC FOR MICHAEL LANORY

STATE PASS USTR FOR RICK RUZICKA

STATE PASS SEC FOR MARISA LAGO

TREASURY FOR MALACHY NUGENT

USDOC FOR 3131/010/ANESA/RMARRO
USDOC FOR 4538/MAC/OSAO/RHARDING
USDOC FOR GOBB/ITA/TD/AC/TSCAUNG

‘SENSITIVE

€.6, 12958: H/A

TAGS: ECOM EINV) PGOUr IN

SUBJECT: TRE POLITICS OF POWER: WILL THE NEW MANARASHTRA
GOVERNMENT REVIEW THE TERMS OF ENRON PRASE 117

1, SBU) ALIOST IMMEDIATELY AFTER TRE NEW MAHARASHTRA GOVERNMENT
WAS FORMED, THE MEDIA BEGAN PLAYING UP REPORTS THAT TRE NEW CHIEF
MINISTER WAS READY TO CALL FOR AN IMMEDIATE REVIEW OF PHASE 11 OF
ENRON'S DABHOL POWER PROJECT. THE CONGRESS PARTY HAD PROMISED» IF
ELECTED, TO REVIEW ENRON PHASE ||, WHICH HAD RECEIVED THE GO-AHEAD
FROM THE SHIV SENA/BJP GOVERNMENT. WITH TRE GOVERNMENT STILL

FINDING ITS LEGS» WE HAVE NOT BEEN ABLE TO MAKE CONTACT WITH ANY OF

THE RELEVANT OFFICIALS. BUT CHIEF MINISTER DESHMUKH TOLD THE READ
OF A LEADING INDIAN CONSULTING FIRM IN A ONE-ON-ONE MEETING THAT
‘STATEMENTS ABOUT A REVIEW WERE NO MORE THAN POLITICAL WINDOW
DRESSING. MEANWHILE: ENROW’S PUBLIC RELATIONS MANAGER, BRINOA
WALAVALKAR: SAID TRE COMPANY HAS SEEN NO INDICATIONS THAT A REVIEW
1S IMMINENT. SHE ATTRIBUTES THE SPATE OF MEDIA STORIES TO THE
PRESS’S DETERMINATION TO CREATE A STORY DURING TRE LULL THAT HAS
ACCOMPANIED THE FORMATION OF THE GOVERNMENT. SHE NOTES THAT THE
CHIEF MINISTER NEVER BROUGHT UP ENRON INDEPENDENTLY, BUT ONLY

MENTIONED IT IM RESPONSE TO REPORTERS’ QUESTIONS. SHE BELIEVES THAT

UNCLASSIFIED

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

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oy on

MID= 199930620325 42606 = BA/L1G27
UNDER PRESSURE FROM REPORTERS, THE CHIEF MINISTER BAD TO REAFFIRM
HIS PROMISE TO “REVIEW PHASE I1» BUT IS KOT INTENT ON USING IT FOR
POLITICAL PURPOSES.

7. (SBU) COMMENT: FROM ITS INCEPTION MORE THAM SIX YEARS AGO,
ENRON HAS SERVED AS A POLITICAL LIGHTHING ROO ~~ THE FOCUS OF
PROTESTS FROM MANY QUARTERS. THOUGH ENRON SUCCESSFULLY OVERCAME ALL
THE POLITICAL AND LEGAL CHALLENGES IT STILL REMAINS A POTENT
POLITICAL SYMBOL FOR MANY. AS SUCH» IT WAS AN EASY ONE FOR CONGRESS
TO THROW INTO ITS GRAB BAG OF PRE-ELECTION PROMISES. THE NEW
GOVERNMENT MAY FEEL COMPELLED TO “REVIEW" PHASE tl» BUT IN THE ENDs
IT 1S UNLIKELY TO THROW A WRENCH IKTO THE WORKS. AFTER ALL+ IT WAS
TRE CONGRESS GOVERNMENT THAT APPROVED ENRON PHASE | AND NCP PARTY
CHIEF SHARAD PAWAR HAS ALWAYS BEEN A SUPPORTER OF ENRON, ANOTHER
FACTOR THAT IS LIKELY TO BODE WELL FOR ENRON IS THAT CHALLENGES
USUALLY COME FROM THE OPPOSING POLITICAL PARTY. iN THIS CASE* THE
SAFFRON ALLIANCE (BJP/SHIV SEMA) 1S ALREADY ON BOARD THE ENRON
BANOWAGON, HAVING SUCCESSFULLY RENEGOTIATED THE FINANCIAL TERMS OF
ENRON PHASE 1 AND CLAIMING CREDIT FOR BRINGING THAT PHASE TO
COMPLETION. SIMILARLY, THE CONGRESS/NCP ALLIANCE WILL MOST LIKELY
WANT TO CLAIM CREDIT FOR THE COMPLETION OF PHASE 11. RENEGOTIATING
THE TERMS WOULD ONLY STALL THE PROJECT AND BRING INTO QUESTION WAY
CONGRESS APPROVED ENRON IN THE FIRST PLACE ON TERMS “ALLEGEDLY” MORE
FAVORABLE TO ENRON THAN TRE CURRENT ONES.

Go0D

aT

#2367

4087

HN.

UNCLASSIFIED

00500000001481


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DEPT TREASURY COMCEN
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IMMED | ATE

PAGE 81 OF 82
CAVEAT (S) =
ANOLE VIA
ACTION = CTRSTEPD (1) +GH (1) y IBRD (1) JOB (2) » (DC (1) 1D (1) LN AD)
ITH (1) QC (1) SEN (-) U0 11) ”
CRC = 1470

00 RUEATRS
DE RUEHOG #1685/8) #901950
TWY Cocee iZH

0 3119582 =>.
FM AMEMBASSY SANTO DOMINGO
TO RUEHC/SEC DIATE $497

IMFO RUERPU/AMEMBASSY PORT AU PRINCE @783
aT
CONFIDENTIAL SECTION G1 OF 62 SANTO DOMINGO G8160S

€.0. 12988; OECL: 83/31/2683
TAGS: EWRG: OR
SUBJECT: SMITH-ENRON: BATTLES WITH CDE CONTINUE

REF: SANTO DOMINGO 1472

(W) CLASSIFIED BY: LINDA E. WATT» CHARGE 0° AFFAIRES
All.» REASOM: 1.50).

1. 1G) SUMMARY: THE FIRST WORLD BANK-CHAIRED MEDIATION
TWEETS BETWEEN SA TH-ENKN snd AE CORPORRCEON
OOMIMICANA DE ELECTRICIDAD (CDE) 1 SCHEDULED TO TAKE
PLACE APRIL 2. THE DISPUTE DETAILED IN REFTEL
CONTINUES: HOWEVER) WITH SHITH-ENRON CONSIDERING
(b)(4)] CDE HAS YET TO
TAKE ANY PAYMENT ON THE JANUARY INVOICE DUE MARCH 18
AND SMLTH-EMRON 1S NOW OVER [(1D)(4)]_'4 DEST 10.

TS” FUEL SUPPL TER. [(b)(4) , (b)(6)]

{(b)(4)]

M1D=198889002016 4886s = 31/19887.

(Cur
as ease

WID=t99e@seg2818 48864 J/19552
INVOICE AND CONTINUES TO STATE IT WILL ASSESS THE
DISPUTED PENALTIES AGAINST SHITH-ENRON, IT HAS ALSO
PRESENTED SMITH-ENRON WITH A BILL FOR CERTAIN BANK
CHARGES WHICH JATES ARE COMPLETELY OUTSIDE THE
CONTRACT. ((b) 6

CG ne ane amare

INTERNATIONAL, ON APRIL T+ IT WILL GO OVER THE 188 DAY
PAYMENT PERION SPECIFIED IM ITS NEW AGREEMENT WITH THE
IFC.

{(b)(4) , (b)(6)]

{(b)(1) , (b)(4) , (b)(6)]

{(b)(4) , (b)(6)]

CONFIDENTIAL

00500000000755


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ROUTINE

PAGE @1 OF 02 WiD=199829900916 83682410802
CAVEAT IS) =

HANDLE WIA

ACTUOM = (TRSDGOE (1) + CALL (9) EPD (1) GE 11)» 18RD (1) 106 (11.406 C1)

WNB (1) «TMA CLD 6 ATR CL) 9 UT C0) 6 VIN CE) » OME CL) + QC (EDs SEN (1 » XAA (1

MU

ORC = EBBS

AR RUEATRS

‘DE RUERH) #2957/81 2391825

THR UUUYU 22H

R 2708252 AVG 98

FN AMEMBASSY HANOI

TO RUEHC/SECSTATE WASHDC 3448

INFO RUEMBJ/AMEMBASSY BEIJING 2397
RUEHML/ANENBASSY MANILA 6471
RUEHBK/AMEMBASSY BANGKOK 6$31
RMBMUNA/USCINCPAC HONOLULU HI//JS/EPA/JTF-FAU/
RUCPOOC/USDOC WASHOC
RUEATRS/DEPTTREAS WASHDC
RUEKICS/SECOEF WASHOC

AUERRC/USDA FAS WASHOE

at

UNCLAS SECTION B1 OF 2 HANOI 92357

SENSITIVE

‘STATE PASS 10 USTR/DAMOND/BELASSA» OPIC» AND EXIMBANK
STATE ALSO FOR EAP/BCLTVs EB/IFO/OIA: EB/1FO/OOF

STATE ALSO FOR AID/ANE

TREASURY ALSO FOR PATRICK STUART

SECOEF ALSO FOR ISA/EA/LSTERN

USDOG ALSO FOR 4431/MAC/TEP/OKSA/RPPHO

USDOC ALSO FOR ITA/TO/OTEA/JJANICKE AND ITA/TO/SIF/CHUIR
USDA/FAS ALSO FOR FAA/AQ/SSAP/BEEGLEY AMD KD/WAGHER
USDA ALSO FOR FAS/FAA/AO: FAS/ITP/OOAs FAS/ITP/ADD

£.0, 12958: N/A

TAGS: ENRGs EINU, BEXP
SUBJECT: ENRON'S PROPOSED BOT POWER PROJECT AT SOC
TRANG

REF; HANOI 2236

1, (SBU) SUMMARY: ENRON 1S ENCOURAGED BY WHAT APPEARS
TO BE A NEW ATTITUDE BY THE GOVERNMENT TOVARD ITS
PROPOSED BUILD-OPERATE-FRANSFER (GOT) POWER PROJECT IN
THE MEKONG DELTA. THE GOVERNMENT APPEARS TO REALIZE 11
NEEDS TRE POWER AND ISSUED AN INSTRUCTION IN EARLY
MUGUST FOR HINISTRIES AND AGENCIES TO RESOLVE PROBLEMS
AND REACH FINAL AGREEMENT BY MID-DECEMBER. A MAJOR
PROBLEM HAS BEEN THE CONTRACT COULD CAUSE TRE STATE-
OWNED POWER COMPANY TO LOSE MONEY, DEPENDING OK HOW THE

UNCLASSIFIED

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

we of
a Guts

11D=199823900516 036824 20/10587
GOVERNMENT REGULATES ELECTRICITY PRICES PAID BY

CONSUMERS. ENRCN BELIEVES WORLO BANK INVOLVEMENT IN

ELECTRIC POWER PROJECTS HAS ENCOURAGED ANTICOMPETI TIVE

BEHAVIOR. END SUMMARY

2. Wi ENRON OFFICIAL ROBERT BALDWIN VISITED EMBASSY

ECONOMIC SECTION AUGUST 21 TO REPORT LATEST IN THE

COMPANY'S EFFORTS 10 GET THE GVM TO WOVE AREAD WITH ITS

PROPOSAL TO BUILD A SBOMW COMBINED CYCLE GAS TURBINE

POWER PLANT IM SOC TRANG PROVINCE IN THE MEKONG DELTA,

4, GSBU) BALDWIN WAS MUCK HORE UPBEAT THAN IN THE
WEETINGS IN JUNE: (SEE REF). AS HE DISPLAYED A
GOVERNMENT DIRECTIVE DATED AUGUST 8 INSTRUCTING THE
HIMISTRIES OF EMDUSTRY) PLANNING: SCIENCE: FINANCES
TRADE: THE STATE BANK: ELECTRICITY OF VIETNAM:
PETROVIETHAM: AND THE SOC TRANG PEOPLE'S COMMITTEE TO
NEGOTIATE AND REACH AGREEMENT WITH ENRON ON THE BOT
CONTRACT: LAND ALLOCATION: AND OTHER AGREEMENTS BY MID~
DECEMBER: SUBJECT 10 SEVERAL CONDITIONS CENRON CONSIDERS
THE CONDITIONS TO SE ACCEPTABLE). THE MIMISTRY OF
INDUSTRY WAS INSTRUCTED 10 COOPERATE WITH THE MINISTRY
OF PLANNING AND INVESTMENT TO SETTLE PROACTIVELY THE
ISSUES INVOLVED. THE PLANT I$ 10 BE COMPLETED BY
OCTOBER 2000 (A SLIPPAGE FROM THE LATE 1999 DATE
PREVIOUSLY SOUGHT), ENRON WILL FINANCE BEGINNING
CONSTRUCTION ITSELFs LATER SEEKING FINANCING WHEN THE
PROJECT 1S UNDERWAY.

{(b)(4)]
{(b)(4)]

6. W) THE CALCULATIONS NOW ASSUME TRE GAS WILL COME
FROM AN OFFSHORE FIELD SOUTHWEST OF VIETNAM: NOT THE

UNCLASSIFIED

00500000000558


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/

@

{NMED LATE :

UNCLASSIFIED

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PAGE 81 OF 83
CAVEAT (SI =
WANDLE VIA

HiD=199913788916 m27268

ACTION = (TRSIBOL (1) G1 (1) (DG CL) > IMB Ds INL (1) ITF Meth)

OUME CL) G6 (1) + SEM (=) UO CL) XAA C1) XE CLD
CRC = A982

00 RUEATRS

OE RUEHOG 42377/81 L37N11L

INR UUW ZZH

O 171112 MAY 98

FM AMEMBASSY SANTO DOMINGO

TO AVERC/SECSTATE WASHDC IMMEDIATE 4268
INFO RUEHPU/ANEMBASSY PORT AU PRINCE 1586
RUEHLP/AMEMBASSY LA PAZ 8168
RUCPDOC/USDOC WASHOG

er

ONCLAS SECTION 1 OF 83 su DOMINGO 862377

LA PAL FOR AMBASSADOR HRINAK
SENSITIVE

DEPT PASS OPIC FOR M.PEREIRA AKD Mi. MORE! MER
USDOC FOR 3134/USFCS/O10/MH/RD
USDOC FOR 4322/1 TA/IEP/WR/OMCE/SIEGELHAN

£0, 12958: N/A
TAGS: ENRG EINY PREL 08
SuBuEcT: COE GE}ERATION UNITS CAP/TALZED

REF: A, SANTO DOMINGO 2334 B. SANTO DOMINGO 1957

1, WW) SENSITIVE BUT UNCLASSIFIED. PROTECT
ACCORDINGLY.

‘1. WW) SUNMARY: THE TWO GENERATION UNITS OF THE STATE
POWER COMPANY: CORPORATION DOMINICANA DE ELECTRICIDAD
(CDE) WERE CAPITALIZED ON MAY 13 FOR A TOTAL OF
US8322.2 MILLION. U.S. IKDEPENDENT POYER PRODUCERS
(1PPS) ALREADY REPRESEXTED IN THE DOMINICAN REPUBLIC
VOTED OM THE FUTURE PROSPECTS OF THE DOMINICAN ENERGY
SECTOR: COASTAL POWER COMPANY: JOINING WITE CHILE'S
GENER S.A. IN THE NEW CARIBBEAK INVESTMENT CONSORTIUM»
WILL TAKE OVER THE TTABO GENERATION COMPANY WHILE: TRE
SEABOARD CORPORATION, FRONTING FOR ENRON INTERKAT ONAL
AMONGST OTHERSe WILL TAKE OVER THE NAINA GENERATIOK
CONPARY, NO OATE WAS BEEK SET FOR THE FORKAL RAND-OVER
OF THE COMPANIES: ALTROUGH THE BIDDERS ANTICIPATE IT
WILL TAKE PLACE 1M TWO MONTHS, THE SUCCESSFUL
CAPITALIZATION OF cof IS A VERY REAL ACCOMPLISHMENT FOR
PRESIDENT FERNANDEZ AND HIS ADMINISTRATION.

EMD SUNRARY. |

fe

WID=1998137 28916 817268

SECOND STEP IN CAPITALIZATION

3. W) THE SECOND STEP IN THE CAPITALIZATION OF COE
TOOK PLACE IN A TELEVISED MAY 13 CEREMONY, THERE WAS
LITTLE DRAMA IM THE PROCEEDINGS AS IT WAS KNOWN IN
ADVANCE THAT TWO BIDS HAD BEEN RECEIVED FOR THE TWO
CONPAKIES, THE REAL DRAMA OF THE DAY TOOK PLACE OFF
‘STAGE WITH THE LAST OF THE IPPS RE-SIGKING THE
DEFINITIVE MOU ITH TRE COMISSION FOR THE REFORM OF
PUBLIC ENTERPRISES (CREP) AND CDE A HALF HOUR BEFORE
THE PUBLIC CEREMONY WAS TO BEGIN.

THE WINRERS

4. W) THE NEW CARIBBEAN INVESTHENT CONSORTIUM,
COMPRISED OF CHILE'S GENER S.A. AKD THE U.S, -BASED
COASTAL POWER COMPANY. SUBMITTED A SINGLE WIRKING BID.
OF USS177+7772777 FOR GENERADORA ITABO: S.A. THE
SEABOARD CORPORATION: FRONTING FOR A COKSORTIUM WHICH
INCLUDES ENRON INTERNATIONAL AND THE COMMONWEALTH
DEVELOPMENT CORPORATION AS WELL AS LOCAL INTERESTS»
PLACED BIDS OR BOTH GENERATION COMPANIES BUT ACQUIRED
GEMERADORA BAINAr S.A. WITH A USSI44,S MILLION B10,
THE TOTAL BIDS WERE USSES.S MILLION OVER THE MINIMUM
REFERENCE PRICES SET FOR THE GENERATION UNITS
(SEABOARD'S B1D OM WAIHA WAS ONLY USS1.3 MILLION OVER
THE USE143.1 MILLION REFERENCE PRICED.

want THEY eI
i: (UW) THE WIKMING BIDDERS ACQUIRE S@ PERCENT OF TRE
‘SHARES AND MANAGERENT CONTROL OF THE TWO NEW
GENERATION COMPANIES IM EXCHANGE FOR THE INVESTMENT IN
THESE COMPANIES OF THE PLEDGED US$322.2 MILLION. COE'S
WON-HYORO GENERATION ASSETS HAVE BEEN SPLIT BETWEEN THE
TWO COMPANIES AS FOLLOWS:

GENERADORA WAINAs S.A: RECEIVES THE FOLLOWING THERMAL
GENERATION UKITS = HAIWA Io 2+ 3y 4 AND S3 PUERTO
PLATA 1 AND 2: BARAHOHA AND SAN PEDRO DE MACORIS, THIS
COMPANY WILL ALSO RECEIVE THE GAS TURBINES OF RAINA-
GAS: SAN PEDRO AND BARAHONA AS WELL AS THE DIESEL UNITS
IM MANZANILLO AND PEDERNALES, THESE UNITS HAVE AN
INSTALLED CAPACITY OF 663, 9HW BUT ONLY 241KW» OR 36
PERCENT, OF THAT CAPACITY IS NOW FUNCTIONAL,

GENERADORA ITABO. S.A.: RECEIVES THE FOLLOWING THERMAL
GERERATION UNITS -- ITABO 1 AKD 2: AND SANTO DOMINGO S
AND 8. IT WILL ALSO RECEIVE THE GAS TURBINES ITABO 1
2 AND 3; SAM PEDRO 4 AND Se AND TIMBEQUE 1 AND 2 AS

NPL ACCIEIEN

1G/SHZ

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PAGE 81 OF 82 10=288826382361 asi2is = 83/18272 H1D=2008063! 18272
CAVEAT (S) =

amu [(b)(1) , (09(4)]

ACTIOM = CTRSYBON (1) GU (1) + 1BRD (1) » 108 (1) o ADC C1), 100 (1) 148.)

UE (1) USWA) ETE C1) PTE 0) OU (1) 000 (1) SEN) VOUT) XH ADD

wid

ORC = 8E62

(00 RUEATRS

DE RUEHC #9767/81 @631713

TAY CCCCO 72H

0 0317882 MAR 08

FM SECSTATE WASHDC

TO RUEHOS/AMEMBASSY LAGOS IMMEDIATE 8711
INFO RUEHUJA/USLO ABUJA IMMEDIATE 1521
RUEATRS/TREASBRY DEPT WASHDC 8537
RUCPDOC/USDOG WASHOC 1668

RHEBAAK/USDOE WASHOC 1278

ar

CONFIDENTIAL SECTION Bt OF 82 STATE 639767

£.0. 12958: DECL: 62/28/68

TAGS: BEXP+ EMRG» EINVr EFIN» ECON) PGOVs KI

SUBJECT: ENRON - DEMARCHE REQUEST FOR TRIPARTITE MEETING
OF ENRON: WORLD BANK» AND GON

REF: LAGOS 492 AND PREVIOUS
5, (SBU) ENRON VIEWED THE WORLD BANK'S SECOND CATEGORY OF

OBJECTIONS: LEGAL AND FISCAL CONCERNS BASED OK AM EARLIER
CLASSIFIED BY DEPUTY ASSISTANT SECRETARY WITNEY VERSION OF TRE AGREEMENT: AS OBVIATED BY THE FINAL DEAL.
SCHMEIDMAN, FOR REASONS 1.5 @) AND (D). [(b)(4)]

1, (0) THIS 1S AN ACTION CABLE: SEE PARA 8.

2. (SBU) INA MEETING OM FRIDAY. FEBRUARY 25» ENRON

OFFICIALS CHRIS LONG: JOGN HARDY. AND KEITH SPARKS CAME TO 6. @[(b)(1)]
GEPT TO EXPLAIN THEIR VIEW OF EVEKTS SURROUNDING THE

STALLED ENRCY CONTRACT TO PROVIDE ADDITONAL ELECTRICAL

POWER TO LAGOS STATE. THEY ALSO LEFT A POINT-BY-POINT

REBUTTAL OF WORLO BANK OBJECTIONS 10 THE CONTRACT AXED

TO ECONOFF NocuLLOUGH).

3. (C) THE ENRON OFFICIALS BRIEFLY DESCRIBED THEIR
EFFORTS OVER THE PAST TWO AND ONE-HALF MONTHS TO COKVINCE
THE GON TO HONOR 1S CONTRACTUAL OBLIGATIONS AKO MOVE
FORWARD WITH THE PROJECT. {(b)(1) F (b)(4)]

7. (©) DEPARTMENT SHARES ENRON'S AND THE EMBASSY’S CONCERN

CONFIDENTIAL

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avs oS

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PAGE @3 OF 83 1D=199913788916 627268 AG/1SH47
‘COMMENT

UNCLAS SECTION @3 OF 93 SANTO DOKINGO 082377
LA PAZ FOR AMBASSADOR HRINAK
SENSITIVE

DEPT PASS OPIC FOR MK. PEREIRA AND HM. MOMHEIMER
USDOG FOR 3134/USFCS/O1O/MH/RD
USOC FOR 4322/1 TA/LEP/WH/ONCB/SIEGELHAN

£0, 12958: N/A
TAGS: ENRG EINV PREL OR
‘SUBJECT: CDE GENERATION UNITS CAPITALIZED

12. (SBU) THE CAPITALIZATION OF CDE SHOULO BE
CONSIDERED A REAL SUCCESS FOR PRESIDENT FERNANDEZ AND
HIS ADMINISTRATION. WE PLAH TO SEND OUR
CONGRATULATIONS TO HIM, ONE EBULLIENT DOMINICAN IPP

EMPLOYEE CALLED ECONOF THE MORNING AFTER THE
CAPITALIZATION TO ASKr “DO YOU REALIZE THAT WITHIN 18~
24 MONTHS: BLACKOUTS MAY BE A THING OF THE PAST?” TRIS
PRESUPPOSES THAT THE IPPS WILL FOLLOW THROUGH QUICKLY
iT THEI ATS ND TAA FINES we
STATI PROBLEM:
“FORCE TS-MHOTRER-STEF CLOSER To RESOLUTION AND THE
DOMINICAN ECONOMY AS A WHOLE WILL BE THE WINNER.
WATT
aT
fan
1902
NK

WMAL ACCErIcn

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PAGE 3 OF 83 n1D=199738301211 . ONNe tAIL W1De199735301211 aTs34——18/12482
[(b)(1)]
CURRAN

tn BT

£.0. 12958: DECL: 12/18/08 #5450

TAGS: EMRGs EPETe ECON: EIN) BEXP, PREL: MO BSFS.
SUBJECT: MOZAMBIQUE GAS UPDATE NNN

DOE FOR DONNA SOBBISH

TRAINED BY SASOL AT THEIR SEKUNDA TRAINING FACILITY
IN SOUTH AFRICA. ARCO ACKKOWLEDGED THAT PUBLIC
RELATIONS WAS A KEY ELEMENT AND WAS AWARE THAT
ENVIRONMENTAL IMPACT STUDIES AND A DENIMING PLAN
WERE CRITICAL TO THE PROJECT'S SUCCESS. FOLEY
WELCOMED THE AMBASSADOR’S ASSURANCE OF EMBASSY
ASSISTANCE IM THOSE MATTERS. AT THE SAME TINE. THE
AMBASSADOR REMINDED THE TEAM (AS HE HAD DONE WITH
ENRON) THAT, WITH TWO US COMPANIES HAVING ADVOCACY
AGREEMENTS: THERE WERE LIMITS TO ROW FAR THE EMBASSY

one [(b)(1)]

15, GW) THE ARCO TEAM DEPARTED IN AN UPBEAT HOOD
AFTER THEIR SHORT TRIPs HIGHLIGHTED BY WHAT THEY
CONSIDERED A VERY ENCOURAGING FOUR HOUR MEETING WITH
MINISTER KACHAMILA. THE TEAM WAS HEADED FOR
JOHANNESBURG TO MEET WITH JCI AND SASOL AND PROMISED
US A FURTHER BRIEFING WHEN ARCO’S MANAGER OF
INTERNATIONAL NEGOTIATIONS AND CONTRACTS: DAVID
SUTTER, VISITS MAPUTO IN JANUARY TO CONTINUE TALKS
WITH THE GRIM,

ENERGY MINISTER STILL FAVORS ARCO

[(b)(1)]

CONFIDENTIAL
0500000000810


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+ PAGE 03 OF 63 Mi=199721701267 ea2ssd 05 /15262.
CONFIDENT! AL SECTION 63 OF 03 MAPUTO 003375

PRETORIA FOR SRUDVIC ~~
JOHANNESBURG FOR FSC NC ARNCLD .
USDOC FOR ADVOCACY CENTER/3814A - RHAMPTON

USDOE FOR ANDREA LOCKWOOD AND CHRISTINE FLETCHER

DEPT PLSE PASS TO USTOA - JRICHTER AND MNEWELL

DEPT PLSE PASS TO EXIMBANK =~ AEMMET

TREASURY FOR MRAUCH

DEPT FOR AF/EPS» EB/TPP/STAs EB/IFG AF/S

£.0. 12958: 8/S/07

TAGS: ECON, EPETs ENRG, ETRDs MZ» SF
SUBJECT: ENRON AND DEADLINES

((b)(1)]

{(b)(1)]

PRK INLEY
oT

43913
ABA
NNN

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PAGE 81 OF 82 WD=1999187@0165 A835,
CAVEAT (S) =
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ACTION = CTRSIGI (1)+ 1BRD (1) HCC (1) e 1CM C1)» 1DB (1) 206 (1) « IMBC,

UMA (LD. LTE (1) O1ME (1) QC (1) eSEM (+)
CRC

PP RUEATRS

DE RUEKUR #1081 /81 1870509

iMY COcce 22H

P G625882 JUL 99 TFFA

FA AMEMBASSY ULAANBAATAR

TO RUEHC/SECSTATE WASHDC PRIORITY 2449
INFO RUCPDOC/USDOC WASHOE 8288
RHEHAAA/WHITE HOUSE WASHOC
RUEHBJ/AMEMBASSY BEIJING 1592
RUEHML /AMEMBASSY MANILA 8385
AUEHMO/AMENBASSY MOSCOW 6283
AUEHUL/AMEMBASSY SEOUL 9381
RUEHKO/AMENBASSY TOKYO 8345
RUEHBK/AMCONSUL HONG KONG 8215
RUEHSH/ANCONSUL SHENYANG 2816
RHAMUMA/USCINCPAC HONOLULU HI//FRA/S
RUEHIA/USIA WASHDC 9582

RHEBAAA/USDOE WASHOE

eT

CONF LOENT IAL SECTION OD OF 82 ULAANBAATAR 081291
STATE FOR EAP/CHs E/CSA AND EB/IEP

USDOC FOR COUNSELOR KALICKE AND P,HUEPERS ALSO FOR ITA/EAP
AND ITA/ENERGY

WHITE HOUSE FOR OUP-T.OSIUS AND NSC-LIESERTHAL/KEITH
PASS AID/ARE/EAP-C. DOWNEY

PASS TDA-J. GRAKDMAISON/G. JACKSON

PASS OPIC-M. MESSER

USDOE FOR INTL AFFAIRS

BEIJING FOR ECON-S.REES AND CS-C. ADAMS
MANILA FOR USADB-D. BARNES

& fF DeCLs 7/1/84
AGS: EMRG: EINVs MG. RSe CH
SUBJECT: ENRON HIGH VOLTAGE TRANSHISSION LINE PROJECT

REF: (A) ULAANBAATAR $667 G@) ULAANBAATAR 238 KOTAL

CONFIDENTIAL

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/

MT

H1D=199318768165 54835
CLASSIFIED BY ANB, LA PORTA - REASONS 1.5014 (D)i CONTAINS
PROPRIETARY INFORMATION

((b)(1)]

2. WW) ROBERT KELLYs MANAGING DIRECTOR FOR RENEWABLE
ENERGY) ENRON INTERNATIONAL: VISITED ULAANBAATAR JUNE 23-26
TO UPDATE THE GOM ON THE STATUS OF ENRON'S HIGH VOLTAGE
POWER TRANSMISSION LINE PROJECT. KELLY MET WITH JAN
WALICKI: COUNSELOR OF THE U.S. DEPARTMENT OF COMMERCE:
ADVISORS TO THE PRIME MINISTER: OFFICIALS OF THE MINISTRY
OF INFRASTRUCTURE DEVELOPMENT (9010) AND ENERGY AUTHORITY:
THE ECONOMIC ADVISOR TO THE PRESIDENT: PARLIAMENTARIANS»
AND OFFICIALS OF THE PETROLEUM AUTHORITY OF MONCGLIA (PAM) .

3. (SU) UNLIKE KELLY’S PREVIOUS ENRON VISITS WHEN GOM
OFFICIALS DID NOT SEEM TO BE WELL INFORMED: MINISTER
BATKHUYs MOID OFFICIALS AND OTHERS SEEMED EAGER FOR ENRON
TO IMPLEMENT THE PROJECT TO BUILD A

06 /06832

/

———

TRANSMISSION LINE THROUGH MONGOLIA(FROM THE IRKUTSK REGION J
i"

TO NORTHERN CHINA. SINCE TRE

OGTORER 1898, THE HOID Bi

REGULATORY ENVIRONMENT WI A NEM ORAF
ENERGY LAW 70 BE PRESENTED TO PARLIAMENT TALS WEEK»
CONTAINS PROVISIONS FOR IMPORTING AND TRANSMITTING POWER
ACROSS MONGOLIAN TERRITORY, GOM OFFICIALS HAVE ALSO
DISCUSSED THIS PROJECT IN INTERGOVERNMENTAL WORKING GROUP
SESSIONS WITH RUSSIA AND CHINA) AND WITH THE GOVERNOR OF
IRKUTSK.

WIN WIN WIM

4, @) THIS PROSECT WOULD BENEFIT EACH OF THE THREE
COUNRIES INVOLVED. RUSSIAr WHICH HAS EXCESS CAPACITY:
WOULD GAIN HARD CURRENCY FROM ENEREGY EXPORTS. MONGOLIA
WOULD BENEFIT ECONOMICALLY FROM TAX REVENUE. EMPLOYMENT 1”
THE CONSTRUCTION AND MAINTENANCE OF THE TRANSMISSION 4 INE:
AND AK UPGRADED POWER LINE 10 PROVIDE ELECTRICITY FOR THE
EREDENET COPPER COMPLEX. CHINA WOULD GET CLEAN POWER AT A
R COST THAN COUL! DED FROM WEW COAL -FIRED
PLANTS. AS INDICATED 1M PREVIGUS REPORTING: THE POWER FROM
THE TRANS-MONGOLIA HV LINE WOULD BE DESTINED FOR THE
BEIJING/NORTH CENTRAL CHIMA REGION. FURTHERMORE, ENRON
fats BECAUSE OF MUTUAL AMIMOSITIES: BOTH RUSSIA
AND CHINA ARE HAPPY TO SEE A LARGE COMPANY IN TRE MIDDLE.
EACH SIDE WOULD CONCLUDE A CONTRACT TO SELL OR BOY WITH
EWROMs NOT WITH THE OTHER COUNTRY. FROM TRE MONGOLIAN

CONFIDENTIAL

00500000000544


7 Of greatest concern in the political sphere is the
institutionalization of democracy. While the Parliament has
matured somewhat, the system established to hold elections has
not instilled confidence among the opposition parties, causing
most, led by RENAMO, to withdraw from participation in the June
30 local elections. The existence of an guard in both the
ruling party FRELIMO and the main opposition party RENAMO has
hampered compromise. This has showed itself most recently in
the differences between the two over election administration.
The government needs to understand the importance of making
progress in this area.

Of greatest concern in the economic sphere is completing
the task of unencumbering the private sector from government
red tape and legal bottlenecks. High on the list is Commercial
Code reform, tax reform, and the land tenure system. Of these,
the most problematic is land.

All land is owned by the state. Land-use concessions are
granted for periods of 50 years with “automatic” renewal and
the system has been fraught with irregularities and
opportunities for corruption. While individuals may own
improvements on land, they may not own the land itself. This
generates uncertainty for investors and means that land cannot
be used as collateral for loans. While there is a need to sort
out small holder claims and communal rights in rural areas,
Mozambique also should look at privatizing urban land, as has
been done in Uganda. This would allow commercial real estate -
to be used more efficiently, allow private enterprise to
respond quickly to opportunities in a rapidly growing economy
by permitting land to be used as loan collateral, and put forth
a model for the later privatization of rural land, especially
for commercial agriculture.

othe

Also of concern is corruption. Unlike many African
countries, Mozambique does not have a long history of
corruption. The problem grew during the transition years
1989-1995 when inflation gutted government salaries and
officials were unsure what would happen after the December,
1994 general elections. With extensive privatization, _
regulatory reform, and market liberalization, corruption has
been on the decline, but has persisted. The government has
embarked on civil service reform designed to instill greater
professionalism and raise salaries to retain the most
qualified. More needs to be done. In 1997, the Parliament
voted down the Ministry of Planning and Finance proposal to
create an independent higher authority on corruption in favor
of strengthening the current judicial system, which functions
poorly and is unlikely to effectively combat corruption. We
are working to establish a local chapter of Transparency
International to provide a public voice on the issue. To
mitigate risks for foreign investors, Mozambique should ratify
the New York Convention on Arbitration as soon as possible.
Whatever the form, Mozambique needs to address corruption
before it becomes part of the culture and challenges its +
nascent democracy.

00500000002076


ANNEX 1

00100000000319


IMMEDI ATE UNCLASSIFIED

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

PAGE B2 OF 62 MiD= 199908908128 077872 9/BB172
[(b)(4)] te reserve Fons wouto WAVE To BE BUILT UP
TO USS3S MILLION.

8. SBU[(L>)(GFPLLED ON CREP PRESIDENT ANTONIO ISA
COMDE LATE ON FRIDAY: MARCH 26. IN THEIR DISCUSSION:
UNCLAS SECTION @2 OF 62 SANTO DOMINGO BB1687

DEPT PASS OPIC FOR MPEREIRA AND M.MONHEIMER
USDOC FOR 3134/USFCS/O10/¥H/RD.
USOC FOR 4322/1 TA/LEP/WH/ONCB/ SIEGELMAN

‘SENSITIVE

£.0, 12958: N/A
TAGS: ENRG EIRV PREL OR
SUBJECT: SMITH ENROM DEAL IN DANGER

{(b)(4)]

S
E
N
$
|
T
|
V
E

$. (BU) ALTHOUGH THE ISSUES OF RATIFICATION (0 KOT)
BY THE DOMINICAN CONGRESS AND THE TIMING OF SUSPENSION
OR WITHDRAWAL FROM THE ON-GOING ARBITRATION ARE TOUGH
ONES. THE LETTER OF CREDIT ISSUE SEEMS MOST LIKELY 10

BE A FINN DEALBREMER. [(b)(4) , (b)(6)]

wall
Br
687
06
NaN

UNCLASSIFIED

00500000001346


OL/29/0L 12:45 PAA 2Ue G56 ULIV BNERGI VIViolUN wee

NEGOTIATIONS WITH TREASURY TO FOLLOW. DESIGN/ENGINEERING
IN 2001 AND BEGIN CONSTRUCTION IN 2002.

PROJECT: MUT DAM AND 91 MW HYDROELECTRIC POWER PLANT
PROJECT

COMPANY: WASHINGTON GROUP INTERNATIONAL (FORMERLY
MORRISON KNUDSEN INTERNATIONAL)

STATUS: DUE TO MERGER OF MORRISON KNUDSEN INTERNATIONAL
WITH WASHINGTON GROUP INTERNATIONAL, THE CONSORTIUM HAS
NOT YET BEGUN NEGOTIATIONS FOR THE DESIGN/ENGINEERING
CONTRACT WITH DSI. ACCORDING TO STATE PLANNING OFFICIALS,
PROJECT IS INCLUDED IN THE TURKISH GOVERNMENT'S 2001
INVESTMENT PROGRAM. FINANCIAL NEGOTIATIONS WITH TREASURY
TO FOLLOW. DESIGN/ENGINEERING IN 2002 AND BEGIN
CONSTRUCTION IN 2003.

SURUC IRRIGATION PROJECT

3. DURING PRESIDENT CLINTON'S NOVEMBER 1999 VISIT TO

‘TURKEY, UNDERSECRETARY YIGITGUDEN OF THE MINISTRY OF
ENERGY AND NATURAL REOURCES AND ASSISTANT SECRETARY OF
COMMERCE FOR TRADE DEVELOPMENT COPPS SIGNED A JOINT
STATEMENT FOR THE TURNKEY DESIGN AND CONSTRUCTION OF THE
SURUC IRRIGATION NETWORK. AMERICAN AND TURKISH FIRMS WILL
IMPLEMENT THE PROJECT, AT A COST OF OVER USD 650 MILLION,
WHICH INCLUDES A NETWORK TO IRRIGATE APPROXIMATELY
100,000 HECTARES OF LAND. UNTIL NOW, 24 AMERICAN AND
‘TURKISH CONSORTIA HAVE EXPRESSED INTEREST IN THE PROJECT.
‘THE EMBASSY IS WORKING WITH THE GOT TO IDENTIFY A PROCESS
BY WHICH TO SELECT THE WINNING CONSORTIA.

BUILD OPERATE (BO) POWER PLANT PROJECTS

4, IN 1997, THE TURKISH ELECTRICITY GENERATION AND
TRANSMISSION COMPANY (TEAS) AWARDED FIVE BUILD-OPERATE
(BO) PROJECTS IN GEBZE, ADAPAZARI, IZMIR, ANKARA AND
ISKENDERUN. INTERGEN, A BECHTEL-SHELL JOINT VENTURE, WON
THREE OF THESE PROJECTS AND IS DUE TO COMPLETE THEIR WORK
AND COMMISSION THE PLANTS WELL AHEAD OF SCHEDULE. THE
EMBASSY WORKED CLOSELY WITH INTERGEN, U.S. EXIMBANK AND
OPIC TO ENSURE THAT THE FIRM IS ABLE TO MEET ITS

AGGRESSIVE IMPLEMENTATION PROGRAM. EXIMBANK WILL FINANCE
OVER USD 900 MILLION WORTH OF U.S. EQUIPMENT AND SERVICES
AND OPIC USD 300 MILLION OF U.S. INVESTMENT FOR ALL THREE
PROJECTS.

PROJECTS INCLUDE:

PROJECT: ADAPAZARI 777 MW NATURAL GAS FIRED POWER PLANT
PROJECT

COMPANY: INTERGEN (BECHTEL/SHELL JOINT VENTURE)

STATUS: GROUNDBREAKING CEREMONY HELD ON JULY 19, 2000.
POWER PLANT TO BEGIN COMMERCIAL OPERATION IN 2002.

PROJECT: GEBZE 1554 MW NATURAL GAS FIRED POWER PLANT
PROJECT

COMPANY: INTERGEN
STATUS: GROUNDBREAKING CEREMONY HELD ON JULY 19, 2000.
POWER PLANT TO BEGIN COMMERCIAL OPERATION IN 2002.

PROJECT: IZMIR 1523 MW NATURAL GAS FIRED POWER PLANT
PROJECT

COMPANY: INTERGEN

STATUS: GROUNDBREAKING CEREMONY WILL BE HELD IN JANUARY
2001. POWER PLANT TO BEGIN COMMERCIAL OPERATION IN 2002.

BUILD-OPERATE-TRANSFER (BOT) PROJECTS

00500000001631


and so far in 1998, the IMF reports that inflation has hovered
near zero. Low inflation and a liberalized foreign exchange
regime have translated into stable foreign exchange rates and
resurgent demand for the local currency, the metical. One
result has been the almost embarrassing accumulation of foreign
exchange reserves, now seven months worth of imports and
growing.

All banks operating in Mozambique are now private, a major
accomplishment. To do it, the GRM had to first create and then
privatize both the Banco Comercial de Mogambique (BCM,
privatized in 1996) and the Banco Popular de Desenvolvimento
(BPD, privatized in September, 1997). Under the supervision of
the Bank of Mozambique, new banks have entered the market
and/or have increased their national presence and share
capital. As fast as the BOM can develop necessary regulatory
and/or supervisory procedures, new products and services have
been introduced. Most recently, the establishment of an
interbank money market has improved market liquidity. A new
law governing checks was passed. And now, credit and debit
cards can be found. Expected soon is the launch of a small
stock exchange in Maputo, where the government can market
shares retained in privatized companies. And finally, the BOM
is considering issuing domestic debt to facilitate the indirect
management of money supply.

Since 1989 legislation to facilitate the sale of
state-owned assets, over 840 companies have been privatized.
Particularly successful has been the UTRE program for large
enterprises, administered by the Ministry of Planning and
Finance with assistance from the World Bank. At this point,
UTRE is running out of companies to privatize and is preparing
to close its doors on a successful program. The program for
smaller companies, GREICT, under the Ministry of Industry,
Commerce, and Tourism, has been proceeding at an accelerated
pace of late, and may well be able to close its doors in 1999.
Additionally, the GRM has undertaken to sell houses, buildings,
and real estate it expropriated when the Portuguese left the
country at Independence.

Some parastatals have remained under the control of their
respective ministries, but have been forced to function on a
commercial basis. Such is the case with the national port and
rail, telephone, electric, airline, and fuel distribution
companies, which now function autonomously from government in
liberalized sectors. One positive result has been that
subsidies to parastatals have been reduced to less than one
percent of government expenditures. In 1997, the government
announced plans to privatize water companies and willingness to
license private power producers and distributors. In the
future, the government might sell some. of its interest in these
enterprises to the public or to strategic foreign investors,
and open competition in these sectors is foreseen.

Though the financial sector has certainly led the reform
effort, no sector has been left untouched. Telecommunications,

00500000002073


masa

abaee

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PH 622-2222 RM 1121/MT

PAGE 31 MID=199830002356 071698 27722552
CAVEAT (S) =

HANOLE VIA

ACTION [TRS] BOT (1). GI (4p, TADB (1) TOB + TOC thy» IMB 1)» TNL 1)

ITF (Q)) ETI U)+ OLMF 1) OC UP SEN)

crc = E205

RR RUEATRS

DE RUEHLP #49065 3002116

ZNR UUUUU ZZH

R 2721102 OCT 98

FM AMEMBASSY LA PAZ

TO RUEHC/SECSTATE WASHDC 8042
INFO RUCPDOC/USDOC WASHOC

eT

UNCLAS LA PAZ @34906

SENSITIVE
uSDOC FOR 4331/ITA/OSA/TWELCH

—.0. 12958: N/A
TAGS: EINV OPIC BL
SUBJECT: EMBASSY COMMENTS ON CUIASA PROJECT

REF: STATE 197013
SENSITIVE BUT UNCLASSIFIED - PLEASE HANDLE ACCORDINGLY

1, MISSION FULLY SUPPORTS DEVELOPMENT OF SOLTVIA’S SECOND GAS
PIPELINE TO CUIABA. TRANSREDES 7<THE/PROJECT' S INITIATOR-- IS A
CAPITALIZED COMPANY OWNED BY EAMRON “254)+ ROYAL DUTCH SHELL (254)
AND A COMBINATION OF FORMER WORKERS AND THE BOLIVIAN PUBLIC
(604).) IT IS ALSO WELL-KNOWN-TO THE MISSION AND ENJOYS A SOLID
REPUTATION IN BOLIVIA ANO WORLDWIDE AS AN EFFICIENT DEVELOPER ANO
MANAGER OF SOLIVIA’S GAS TRANSPORTATION NETWORK.

2. ON OCTOBER 26 THE POL/ECON COUNSELOR SPOKE WITH PETER WEILOER:
PRESIDENT OF TRANSREDES: REGARDING THE STATUS OF HIS COMPANY'S
REQUEST PENOING BEFORE THE GOB FOR THE NECESSARY LEGAL APPROVALS
TO PROCEED WITH THE PROJECT. BOLIVIAN LAW REQUIRES THAT THE
EXECUTIVE SUBMIT A LAW TO CONGRESS FOR ITS APPROVAL FOR ANY
PIPELINE WHICH CROSSES THE ZONE 50 KILOMETERS WITHIN THE NATIONAL
BORDER. THE GOB HAS YET TO SUBMIT THE LAW FOR THE CONGRESS’
CONSIDERATION, WEILOER SAYS THAT HE HAS BEEN ASSUREO BY BOTH THE
PRESIDENT ANO THE VICE PRESIDENT THAT THE PROJECT HAS THEIR FULL
SUPPORT: BUT THESE PROMISES HAVE YET TO BE TRANSLATED INTO
ACTION. HE SAYS THAT THE PRESIDENT EXPLAINED THAT HE MUST FIRST
GENERATE POLITICAL SUPPORT WITHIN THE MULTI-PARTY COALITION WHICH
HE HEADS BEFORE HE CAN SUBMIT IT TO THE CONGRESS. WEILOER
BELIEVES THAT THE GOB HAS YET TO DEVELOP THIS NECESSARY CONSENSUS
WITHIN THE COALITION AND CANNOT PREDICT WHEN THIS MIGHT OCCUR.

LANNON
eT
"4906
£205
NNNN

UNCLASSIFIED
0500000000560


Drafted: NEA/IAI: NRothstein 72647 NEA/IAI / ROTHSTEIN: Larson memo to Board
E:Deamner 64894
Cleared:NEA:TGVerstandig ok
NEA/JIAI:JWalles ok
NEA/JIAI:Jmeverry ok
E:RAlbright ok
EB/OIA:Bwatts ok
U/NEA:TBorek ok

SENSITIVE BUT UNCLASSIFIED

00100000000318


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40568

9183

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MIDs 1399asgg@3S8 04877 98/03362

=n

UNCLASSIFIED

00500000000554


ROUTINE

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PAGE 92 OF 83 M1D= 198735381211 18/1262 W10=199735301211 T3418 12467

((b)(4)]

T. (C) SEPARATELY: DROSTE TOLD US DC IS HOPEFUL
CONF EDENT IAL SECTION 2 OF 03 MAPUTO 085459

DEPT FOR AF/S/EPS AND EB/1CD
DOE FOR DONNA BOBBiSH

€.0, 12958: DECL: 12/18/88
TAGS: ENRGe EPET: ECOMs EINVs BEXPs PREL» NO
SUBJECT: MOZAMBIQUE GAS UPDATE

SITE WORK OM THE STEEL PLANT COULD BEGIN BY TRE ENO
OF THE YEAR, EVEN IF FINANCING COULO BE FULLY IN
PLACE EARLIER, CIVIL ENGINEERING CONSTRAINTS WITH
THE ONGOING MOZAL ALUMINUM SMELTER IN MAPUTO: WHICH
IS ALSO AN IDC PROJECT WOULD PRECLUDE SITE WORK ANY
SOOHER.

8 W) ENROM ALSO NOW SEENS TO HAVE A WELL
THOUGHT-OUT PUBLIC RELATIONS STRATEGY. WAY HAS
PLANS FOR DEMINING OPERATIONS NECESSARY FOR THE
PIPELINE CONSTRUCTION TO BE EXTENDED INTO
NEIGHBORING VILLAGES AND ROADS. ENRON HAS ALREADY
BEGUM ORGANIZING TRAINING COURSES IN MAPUTO FOR
SKILLED WORKMEN FOR THE PIPELINE PROJECT. AND THEY
PLAN SCHOOL BUILDINGS AND AN EXTENSIVE PROGRAN OF
UNIVERSITY SCHOLARSHIPS FOR STUDY IN THE U.S.

((6)(1)]

9. QW) WAY EVALUATED THE OVERALL DIRECT EMPLOYMENT
IMPACT OF THE PROJECT AS ABOUT $> 808 JOBS DURING THE
CONSTRUCTION PEASE: FALLING TO BETWEEN 808 AND 1800
THEREAFTER,

{(b)(1)]

{(b)(1)]

ae ARCO STILL PRESSING

11. tC) FOLLOWING CLOSE ON ENRON'S HEELS: A THREE-
WAN ARCO TEAM ARRIVED IM MAPUTO ON DECEMBER 16 FOR
MEETINGS WITH KACHAMILA, ARCO AND SASOL- PLAN A S48
MILE GAS PIPELINE SOUTH FROM THE TEMANE FIELDS 10

‘SASOL’S SEKUNDA GAS FACILITY [(b)(1) , (b)(4)]

{(b)(4)]

{(b)(4)]

14. ) DISCUSSING THE DIRECT EMPLOYMENT IMPACT,
FOLEY STATED THAT THERE WOULD BE ABOUT 1288 DIRECT
HIRE POSITIONS: WITH ABOUT 188-128 EXPATRIATE STAFF.
ACCORDING TO THE ARCO TEAM: MANY WORKERS COULD BE
CONFIDENT IAL SECTION 83 OF 63 MAPUTO 225452

DEPT FOR AF/S/EPS AND EB/1CD

CONFIDENTIAL
00500000000809


COMMITTEES & SUBCOMMITTEES

Tokyo
Aeros, pace Chair Anthony Zaloom, Mori Sogo Law Offices
Chair Lance Gatling, Boeing Japan Coordinates input from ACCJ members across business sectors

A forum for U.S. aerospace and defense manufacturers’ Japan-
based representatives to exchange ideas.

Air Cargo

Chair Tad Johnson, P & W Aftermarket Japan, KK
Works toward the implementation and modification of
procedures to facilitate the entry and distribution of air cargo in
Japan.

Animal Health

Chi Yasuomi Yano, Pfizer Pharmaceuticals Inc.
Identifies areas in animal health product registration and
distribution where additional deregulation is sought. Supports
the international harmonization efforts made by governments
and industries in the United States, Europe and Japan.

Architecture/Construction/Engineering*
Chair Ronald E. LaVoie, Lehman Brothers Japan,
Inc.
Coordinates ACCJ efforts to encourage the opening of the
design and (non-housing) construction markets in Japan.
Functions as a point of contact between member companies,
U.S. and Japanese governmental agencies, and the Japanese
business community.

Asia Business*

Chair James M. Fuell, Deutsche Bank AG
Provides timely information about business-related issues in
various Asian countries through monthly guest speaker
programs. Monitors regulatory and political developments of
interest to U.S. businesses active in the region.

Banking and Finance

Chairs Thomas Clark, General Electric Japan, Ltd.
Ernfred Olsen, Shinsei Bank, Ltd.

Coordinates ACCJ activities on market access and regulatory

issues within the banking industry in Japan. Sponsors seminars

for members and acts as a conduit between Japanese banking

institutions and their American counterparts.

Business Expansion*
Chair Robert Simon, Nick & Associates

Serves to promote U.S. commercial interests across a wide
array of industries, interfaces with the U.S. and Japanese
governments, business organizations, and the media to educate
and inform external parties on trade matters.

Chemicals

Chair (TBA)

Facilitates communication between U.S. and Japanese
companies on industry-related issues. Helps expand direct
investment and joint ventures.

Commercial Code Task Force

on aspects of the Commercial Code in need of reform, and
works with the Japanese government and opinion makers to
implement suggested revisions.

Compensation & Benefits
Chair Mark H. Steward, Deloitte Touche Tohmatsu

Promotes awareness of tax issues in Japan pertaining to the
treatment of compensation and benefits. Seeks to obtain fair
treatment for American employers and employees related to
Japan's taxation of compensation and benefits.

Corporate Counsel

Chairs Laurence Bates, General Electric Japan, Ltd.
Royanne Doi, ACE Insurance

Focuses on the needs and concerns of lawyers working in-

house, i.e., working in corporate legal departments rather than

practicing in private law firms.

Corporate Transactions
Chair Michael A. View, Ernst & Young LLP

identifies tax issues in Japan pertaining to corporate
transactions that are of critical concern to the American
business community, and works to develop a strategy to obtain
fair, equal and predictable treatment for American companies.

Crystal Ball

Chair Kimberly Forsythe, Voice, Inc.

Plans the ACCJ black-tie dinner dance held in December each
year. With more than 1,000 attendees, it is the Chamber's
largest event

Direct Marketing*

Chair Eugene R. Raitt, AIG Companies

Sponsors speakers who cover a broad range of direct marketing
issues: telemarketing, database management and business-to-
business direct marketing, among others. Works on the
deregulation of direct marketing in Japan.

Direct Selling

Chair Brian T. Taylor, Japan Health Summit Inc.
Assists companies active in promoting products through direct
selling methods. Established in September of 1999, the
subcommittee is active in information exchange, market access
measures, and regulatory reform.

Energy

Chairs Mark Crowther, Enron Japan Corp.

Provides a focal point for exchanges of views between potential
energy market participants and Japanese government officials
and regulatory authorities with regard to possible changes in
energy industry law and/or energy industry regulations.

E-Business*

Chairs James R. Weisser, Enron Japan Corp.
Andrew R. Fried, PricewaterhouseCoopers

00500000000014


1. SENSITIVE BUT UNCLASSIFIED. NOT FOR INTERNET DISTRIBUTION.
BUSINESS PROPRIETARY INFORMATION

1

Summary. The dramatic and rapid decline of Enron took many in Japan involved
with energy markets and deregulation by surprise. Enron's Japan operations had
been the most vocal proponent for energy deregulation in Japan and its
withdrawal has been interpreted by some as a serious reversal to efforts to open
up Japan's power and gas markets to competition. The media and financial
analysts are also focusing on the financial impact of Enron's bankruptcy although
analysts believe its effect is limited. US energy interests in Japan are now
assessing how Enron's departure will affect their activities and one company in
particular hopes to be able to step into the advocacy vacuum. End summary.

Enron—the Foreign "Player" in Japan's Potential Energy Marke’

3. Enron Japan, established in April 2000, had been one of the most visible
advocates for energy liberalization in Japan. Through E Power Holding
Corporation (a joint venture set up in 1999 with Japanese company Orix, headed
by pro-reformer XXXXX Miyauchi), Enron was exploring power generation
ventures in several prefectures. The company had co-sponsored a widely attended
conference on power deregulation in May 2001 and subsequently released a study
with recommendations for energy reforms for Japan. One of Enron Japan's
representatives agreed to chair the recently-created Energy Subcommittee of the
American Chamber of Commerce. Now, with its recent filing for bankruptcy,
there has been an impact on Japan's financial market as well as concerns in Japan
that deregulation efforts have suffered a serious blow.

Is now played out?

Enron's collapse has had some reverberations in the Japan's financial markets but
analysts believe it is not of overwhelming significance. Japan's Financial
Services Agency Shoji Mori commented to press that Enron's bankruptcy would
have "very limited" impact on Japan's financial sector. A Goldman Sachs analyst
agreed that the impact would be "manageable," while a Merrill Lynch analyst
described the impact of Enron on the banking structure as similar to a "mid-size
domestic bankruptcy."

5. Japanese banks reportedly had some 100 billion yen of loans and other
transactions outstanding with Enron as of December 4. Both Sumitomo Mitsui
and MTFG publicly released figures on their loan exposure to Enron December 3.
Sumitomo Mitsui indicated an outstanding exposure of 33 billion yen while
MITFG cited 35.3 billion yen with Enron. Japanese money management funds
also were affected. Four Japanese funds fell below par value last week due to
losses on corporate bonds issued by Enron. The four companies-—-UPFJ Partners
Asset Management Company, Nikko Asset Management, Japan Investment Trust

00500000000009


Upon the recommendation of this Committee, Chairman Arafat signed a landmark
Economic Reform Decree on January 11, 2000. This decree calls for important steps in
the areas of economic transparency, accountability, and fiscal responsibility (see
attached Annex 3, official translation of the decree). It includes:

1) the consolidasion of all PA revenues under the Ministry of Finance,

2) the consolidation of the West Bank and Gaza payroll offices under the Ministry of
Finance, and

3) the opening the books of all quasi-governmental commercial holdings -- including
PCSC whose activities, while closely held in the past, will soon be reviewed bya
leading Western accounting firm.

During his January 20, 2000, bilateral meetings with President Clinton and Secretary
Albright, Chairman Arafat reiterated his commitment to instituting transparency in
Palestinian government activities.

Risk mitigants Demonstrating the seriousness of these objectives, the PA has providing
a number of risk-mitigating incentives to the Gaza Power Project’s finance agreements.
These safeguards are designed to make this project financeable not only to OPIC but also
to other financial institutions and to Enron's own Board of Directors. Enron is
contributing its own funding to this project. Some of the mitigating factors include:

1) A guarantee by the Palestinian Authority for the performance of all obligations of the
Palestinian Energy Authority (PEA), the purchaser of the Gaza Power Plant’s output.
This includes coverage of PEA‘s $20 million letter of credit. The guarantee was
signed by Chairman Arafat (see attached Annex 4, signature page of the
document), and

2) An Implementation Agreement signed by the PA which makes overt statements of
support for the project and the project company including (see attached Annex 5):

a) “PNA (PA) agrees that neither it, nor any other Palestinian Government Authority
shall “interfere” with the construction and operation of the Facility or take any
action that may cause or adversely affect the activities or economies of [Enron's
Project company] or its (its) shareholders.”

b) “PNA (PA) agrees that it shall not grant, issue or allow to exist, or permit any
Palestinian Government Authority to enact any legislation or take any other action
that could be reasonably be expected to have a material adverse affect on [Enron’s

"project Company), project lenders or [Enron's project company] shareholders.”

Furthermore, the project company’s Board of Directors will consist of six Enron
Tepresentatives, six PEC representatives (one from each of the six consortium members),
and three local representatives to be selected after the public offering. In accordance with
the shareholder agreement, Enron and its PEC partners must vote as a block. No one
company, especially not the local firms with only one vote each, can control the Board,

SENSITIVE BUT UNCLASSIFIED

00100000000315


TOHRU URUTUUUEREOEIOCLE

IMMED | ATE

UNCLASSIFIED N

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

PAGE 61 OF 63 3/14832
CAVEAT IS) =

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ACTION © (TRS)BOI (1) CALL C3)» (8RO 0)» 10B (1) » 100 cL) » 100 (ys inB

ME (Ls ISH CL) + OUMF (Dy QC C1)» SEN (+) U0 C2)

CRC = ABMS

N1D=200013681123 868585

00 RUEATRS

DE RUEHUIA 49875/01 1261003

TNR UYU ZZR

© as1oeaz MAY 08 70k

FM USLO ABUJA

TO AUEHC/SECSTATE WASKOC IMMEDIATE 1015
RUEATRS/TREASURY WASHDC

INFO RUEROS/AMEMBASSY LAGOS 1945

er

UNCLAS SECTION #1 OF 3 ABUJA 8575

TREASURY FOR OAS STEVEN RADELET

£.0, 12958: W/A

TAGS: EFIN EAID PRELs NI

SUBJECT: CHIEF ECONOMIC ADVISOR DISCUSSES NIGERIAN ECONOMY
WITH VISITING TREASURY DEPUTY ASSISTANT SECRETARY.

1. SUMMARY: TREASURY DEPUTY ASSISTANT SECRETARY FOR AFRICA
STEVEN RADELET MET WITH CRIEF ECONOMIC ADVISOR PHILIP AS1ODU
ON APRIL 18. CHIEF ASIODU SOLICITED USG SUPPORT FOR DEBT
REDUCTION AKD FORGIVENESS COMMENTED ON THE BUDGET AND THE
EXECUTIVE'S RELATION WITH THE NATIONAL ASSEMBLY» NOTED
RECEKT DEVELOPMENTS IN THE ENERGY SECTOR: AND SHARED SOME
PERSONAL VIEWS ON NATIONAL SOVEREIGNTY AND CALLS FOR
COKFEDERATION. END SUMMARY.

RELATIONS WITH THE NATIONAL ASSEMBLY

‘7. DEPUTY ASSISTANT SECRETARY RADELET VISITED NIGERIA AS
PART OF A DELEGATION HEADED BY UNDER SECRETARY FOR POLITICAL
AFFAIRS THOMAS PICKERING (SEPTEL). CHIEF ASIODU ASKED
RADELET ABOUT THE DELEGATION’S MEETING WITH MEMBERS OF THE
NATIONAL ASSEMBLY: AND LAMENTED THAT DISAGREENENTS BETWEEN
THE LEGISLATURE AND THE EXECUTIVE KAD BECOME A PUBLIC
CONTROVERSY, ASIODU STATED THAT THE BUDGETARY PROCESS "AS
NOT BEEN WHAT IT SHOULD” AND NOTED THAT THE NATIONAL
ASSEMBLY HAD FAILED TO LOOK AT THE LEVEL OF RESOURCES
AVAILABLE BEFORE ALLOCATING FUNDS.

2, THE CHIEF ECONOMIC ADVISOR ALSO KOTED THAT THE
LEGISLATURE HAD INCREASED THE BUDGET FOR CERTAIN MINISTRIES
WITROUT CONSIDERING WAAT WAS “FEASIBLE:* MEAKING THAT THE
EXECUTIVE LACKS THE CAPACITY TO SPEWO THE ALLOCATED FUNDS IN
THE REMAINING EIGHT MONTHS OF TRE YEAR, CHIEF ASIODU
POINTED OUT THAT THE INCREASES 1M THE PROPOSED YEAR 2288

10 289813001123, BASS = 9/1489
BUDGET VERE ALL CAPITAL EXPENSES (AND THEREFORE DIFFICULT TO

DISBURSE RAPIDLY) AKD ESTIMATED THAT THE EXECUTIVE COULD BE
UNDERSPENDING AS MUCH AS FIFTY PERCENT OF TRE FUNDS

ALLOCATED, HE SUGGESTED THAT THEY COULD AGREE WITH THE

NATIONAL ASSEMBLY ON ROLLING OVER UNSPENT FUNDS INTO THE

FOLLOWING YEAR» AND LAMENTED THAT THE LEGISLATURE WANTED TO

"WAKE IT SEEMED AS IF SOMEONE FAS DONE SOMETHING WRONG” IF

FUNDS ARE NOT SPENT.

4. DAS RADELET INFORMED CHIEF ASIOOU THAT THE DELEGATION'S
MEETING WITK TRE MEMBERS OF THE NATIONAL ASSEMBLY HAD DEALT
WORE WITH THE OYHAMICS OF THE BUDGETARY) PROCESS THAN WITH
PARTICULAR BUDGET ITEMS. ASIODU RESPONDED THAT HE HOPED THE
DELEGATIGN HAD SUCCEEDED 1M EXPLAINING TO THE MEMBERS OF THE
WATIONAL ASSEMBLY THAT IN AN “ANERICAN-STYLETM PRESIDENTIAL
SYSTEM SUCH AS NIGERIA'S, THE EXECUTIVE AND THE LEGISLATURE
DO NOT MAINTAIN THE KIND OF CLOSE RELATIONSHIP
CHARACTERISTIC OF A PARLIAMENTARY SYSTEM. ACCORDING TO
ASIODUs THE ASSEMBLY HAD YET TO REALIZE THAT THE EXECUTIVE
DOES NOT NEED TO FORMAL AN CONSTANTLY CONSULT WITH THE
ASSEMBLY.

IMF PARIS CLUB AND FOREIGN DEB

$. DAS RADELET POINTED OUT THAT TIME WAS RUHNING OUT FOR
THE GON TO CONCLUDE THE PENDING STAND-BY ARRANGEMENT (SBA)
WITH THE IMF, RADELETE OPINED THAT IF THE GOK OES NOT
CONCLUDE AN SBA WITH THE FUND WITHIN THE FIRST FEW WEEKS IN
WAY. IT MAY BE NECESSARY NEGOTIATE A NEW AGREEMENT FROM
SCRATCH, THE DEPUTY ASSISTANT SECRETARY EXPLAINED THAT:
WITH INCREASED OIL REVENUES LIKELY TO ELIMINATE GOVERNMENT
DEFICITS: THE FUND WAS FOCUSING ON TRE QUALITY OF BUDGETARY
ALLOCATIONS AND ON PROGRESS OM PRIVATIZATION AS KEY ECONOMIC
BENCHMARKS. RADELET ADDED THAT HE HAD ENCOURAGED MEMBERS OF
THE WATIONAL ASSEMBLY TO INSULATE THE BUDGETARY PROCESS FROM
THE VOLATILITY OF OIL PRICES, THIS COULD BE ACHIEVED, HE
SAUD) BY ESTIMATING A REASOKABLE PRICE FOR Oi AND THEN
USING THAT SAME ESTIMATE IN PROJECTING REVENUES IM THE
RESPECTIVE ANNUAL BUDGETS FOR TWO OR THREE CONSECUTIVE
YEARS» AS IT 1S DONE IN MALAYSIA AND INDONESIA.

6. CHIEF ASIODU WAS GRATEFUL FOR USG SUPPORT AT TRE PARIS
CLUB) AND HOPED THAT MIGERIA WOULD OBTAIN “SUBSTANTIAL” DEBT
RELIEF IF THE GOH MEETS IMF BENCHMARKS FOR NON-CONCESSIORARY
RESCHEDULING. THE CHIEF ECONOMIC ADVISOR WAS SATISFIED THAT
THE UNITED STATES: AND THE PARIS CLUB: HAD COME TO ACCEPT A
USD 1.5 BILLION CEILING FOR DEBT FINANCING PROPOSED BY THE
GON FOR THE CURRENT YEAR, ASIODU OBJECTED TO CREDITOR
UNCLAS SECTION @2 OF 63 ABLIA 2575

TREASURY FOR DAS STEVEN RADELET

WNELASSTFIED

00500000000863


"NMED ATE

PAGE 63 OF 83 MiD=199883681535
8210
NK

CONFIDENTIAL

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

843798617522

CONFIDENTIAL

00500000000785


TOUR REE EEESEE EE haeas,

PRIORITY = “°C QNFIDENTIAL rot
\\°S\__ DEPT TREASURY COMCEN ye
YY p'622-2822- RM T121/MT /
PAGE @1 OF 82 miD=200087 81718 Rs ‘ 13/16412, — lL: 20087 381718 ———__-__anze 13/16412
Sees, [(b)(1) , (b)(4)]

ACTHON = CTRSIGH (1) 2 VOB (1) LOG (1) «TMB (2) LMF CLD » ISM)» FFAS
VTP (1) 9TH (1) sOUME (1) rQ0 (1) e SEM (- UO (1) XAA(L) 01 CL) ~
CRC = 6831

PP RUEATRS

DE RUEKOS $8868/81 473162)

INY cocee 22H

P L3NG2EZ MAR GB

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TO RUEHC/SECSTATE WASHOC PRIORITY €416
INFO RUEHUJA/USLO ABUJA 1853
RUEATRS/DEPTIREAS WASHOC
RUCPOOC/USDOC WASHOE

RHEBAAR/USDOE WASHDC

ar .
CONFIDENTIAL LAGOS a7d63

€.0, 12998; DECL: 63/13/08
TAGS: BEXPs EWRGr EINVs EFIMs ECOM) PGCVs AI
SUBJECT: ENRON FRUSTRATED BY CONTRACT IMPASSE

REFS: A) LAGOS B73 B) STATE 33767

CLASSIFIED BY AMBASSADOR: REASONS PARA 1.5 8 AND 0.

{(b)(1) , (b)(4)]

2, (SBU) ON MARCH 18: ENRON VP SEAN LONG AND THREE
NIGERIAN COLLEAGUES MET AT THE EMBASSY WITH AMBASSADOR:
CMe AND ECONCHIEF TO RECOUNT THEIR EFFORTS TO ADVANCE
THE STALEMATED ENRON CONTRACT. THE MEETING PICKED UP
FROM AN HOUR-LONG SESSION THE AMBASSADOR AND LONG HAD
THE DAY BEFORE IN ABUJA.

[(b)(1) , (b)(4)]

CONFIDENTIAL
0050000000638


Wunderlin, Linda

From: Wong, Marcia K [WongMK@state.gov]

Sent: Tuesday, January eos 17 am

To: Wendy Cutler (E-mail); John Neuffer (E-mail 2)

Ce: Robert Dohner (E-mail); Robert. Kaproth (E-mail); ‘USAPEC@yahoo.com’;

(RIA) Ballif, John L; Wecker, John A(Main State 4206); Abbott, Lucy K;

Cheyne, Gerard A; Durbin, Andrew S; Froats, Danie! T; Greenber:

. Alien S;

Kevin Honan (E-mail); Kidd, Leigh P; Michalak, Michae! W; Otto, Stanley A;
renege, Daniel J; Stoner, Je! H; Watson, Samuel R; Webster, Jessica

long, Marcia K

Subject: Possible Q's for the Ambassador at FCC/Nikkei interview (if takes place)

Washington Gang: here are some Q's/topics that may come up during the
course of our many econ visitors for food for thought; these are off the top
of my pointy little head--others will probably have more.

Tokyo Econ Gang: If you have more ideas, comments, spin, pls let folks know
and cc me please. Do you think it would be useful if formal press
points/guidance is being ginned up in DC for the many visitors coming our
way, that it be circulated to other agencies as appropriate so we're not in

any way conflicting with each other?

1. exchange rate policy

2. NPLs/capital injection into banks

3. US-Japan FTA: what are merits/prospects?

4. Comment on Japan-Singapore FTA

5. PM ASEAN initiative

6. Investment trends--Are US investors still interested in Japan market
(note Merrill Lynch, Morgan STanley closing down ops here)

7. ENRON bankruptcy--failure of deregulation? what are implications?
(Arthur Andersen too--we beat the drum out here all the time regarding
financial transparency, the merits of sound accounting etc.)

8. WTO: US expectations for WTO/EU Safeguard issue in WTO against US
and-dumpe9 measures (probably a reach but is there anything to Say on the
possibility of a WTO ruling agnst US on the tax/export-subsidy issue?)

9. US response to Japan going into serious recession, effect on rest of Asia
10.. Japan's productivity crisis--what does Japan need to do to improve
productivity?

11. comment on hollowing out issue

12. Whither the US economy--its affect on Japan; what's going on with trade
deficit?

13. PM Koizumi so far? How would you grade him/his progress on reforms?
14. What will be on the President's agenda during his visit to Japan? What
will be the message for the PM?

15. What types of restructuring steps does Japan need to take to stimulate
the economy?

16. Poultry--if still an issue

Marcia K. Wong
Trade Policy Unit Chief/fEconomic Section
US Embassy

00500000000019


FROM (MON) 5. 4°98 10:39/ST. 10:36/NO. 4260060244 P 10

Art. 6. - All interruption or suspension of a service, that by its nature
should be "CONTINUOUS", that could cause the damage to the
public order or to the health of the population, will be punished with a
fine of fifty to five hundred pesos, when the company that provides it
is hot able to demonstrate that the interruption or suspension is not
due to its own fault, but to unknown causes that could not have been
solved by the appropriate means. The judges will issue the fines
according to the seriousness of the circumstances and the time of
the interruption. If the interruption or suspension be definitive or too
frequent, the Executive Power is entitled to act, for/by
recommendation of the Public Service Commission, the cancellation
of the authorization provided for the establishment of the service in
question.

This Press Release is signed by CDE's Administrator, Radhamés
Segura
March 27, 1994

00500000001433


Gaza Power Generating Private Limited Company (GPGC)

PNA Obligations under the Implementation Agreement

1. Exceuted on June 18, 1999 between GPGC and PNA (Yasser Arafat)

2. PNA grants GPGC exclusive (20 ycars) right 10 develop the project.

3. PNA grants Gpcc exclusive franchise rights (20 years) to mect future electricity needs of Gaza as

well as the right to wheel power to the West Bank if approved in the future by the Palestini
Isracli governments.

4. PNA agrees to provide a suitable site and all access needed for coustruction and operating the Facility.

5. PNA agrees to provide assistance, if uceded, 10 GPGC in obtaining construction matcrials, cquipinent,
and labor at market prices and well as transporiation of such nuterials and equipment in the
Territorics.

t

6, PNA agrees to provide the necessary transmission lincs and substations needed to accept power (rom

the Facility.

7, PNA agrees to excmp! GPGC for all Palestinian taxes during the tenn of the agreement.

8. PNA agrees to assist GPGC with the importation into the Territories of all matcrials and equipment
used in construction and operation of the Facility as well as exeinpt GPGC from all applicable import
and customs duties,

9. PNA agrees uiat neither it, nor any other Palestinian Government Authority shall “interfere” with the
consiruction and operation of the Facility or take any action (hal may cause or adversely affect the
activities or economics of GPGC or it’s shareholders.

10, PNA agrees to provide legal opinions from it’s Palestinian and English counsels concerning the fon
of this agreement and any other conscats or opinions necessary to obtain financing of the Facility.

Il. PNA agrees to provide, except for normal intemal guard service provided by GPGC at it's own
expense, any additional police or military protection deemed necessary and appropriate to safeguard
the Facility in consultation with GPGC.

12. PNA agrees to provide ycarly audited financial statements from PEA.

13. PNA covenants and agrees that it shall not grant. issuc or allow {o exist. or permit any Palestinian
Government Authority to enact any legislation or take any other action Urat could be feasonably be
expected to have a material adverse affect on GPGC. project lenders or GPGC shareholders,

14. PNA agrees to provide to GPGC any Palestinian Governient Authorizations and further Consents
necessary to construct, finance or operatc the Facility.

1S. PNA agrees Ural in the event the PNA is succeeded by any otlier entity or Ure constitution of the PNA
- is altered or ainended (for statchood), ue PNA shall ensure that it or its successor will take all

reasonable steps required by GPGC or the project lenders to ensure that GPGC's rights and PNA's
obligations under this agreement remain unaffected by any such change,

CATEMP Merson. doc

00100000000330


FROM (MON) 5. 4°98 10:39/ST. 10:36/NO. 4260060244 P 8
the attached graphic (Not Obtained ), the supply of electricity was
only 51.7% of the contracted energy. thie signifies that the plant
failed to supply some 224.42 millione of kilowatt hours during the
months of January to March of this year equivalent to an economic loss
in detriment to the national economy of some US$ S6.1 millions which is
called the cost of energy not cerved in economic terme.

Segura pointed out that neither the CDE nor the Dominican Government
have pressured the AES Dominican Power for these serious contractual
failures even though in a meeting celebrated by the President of the
Republic, Dr. Leonel Fernandez Reyna, with representatives of said
firm and with the American Embassy, the same company promised to have
available the two units by February 27th of this year, a promise that
was not kept, only one unit being on line at that date.

ing Segura indicated that on April 24th operations at the Plant Los
Mina abruptly dropped their contribution to national power from 105MV
to SOMW, an act that provoked unprogrammed interruptions in the
distribution system.

Communications Director.

Thie press release was followed by a legal statement on the subject

which hae been translated by Ceearina and will be distributed shortly
as LEGAL STATEMENT RE MILITARIZATION.

Saludos, [(b)(6)]

00500000001431


IMMED | ATE UNCLASSIFIED

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

PALE 32 OF 92 "10=200193301 788 IGE OW

{(b)(1) , (b)(4)]

UNCLAS SECTION 62 OF 82 MUMBAI GO2i2

STATE PASS EXIMBANK FOR HUTCHINSON AND RITA MURRELL
STATE PASS OPIC FOR RUTH ANN NECASTR! AND BRIDGET WILLIANS
STATE PASS USTR FOR RICK RUZICKA ee
STATE PASS SEC FOR MARISA AGO

TREASURY FOR GEETHA RAO

USDOC FOR 3131/010/ANESA/KBRENNAN
USDOC FOR 430/MAC/CSAO/ASTERN
WSOC FOR S@OB/ | TA/TD/AC/TSCRUNG
USDOC FOR RHARDING

SENSITIVE
S £8. 12398: w/a
fe (aSS_ mcs EF ects Ls tm
N SUBJECT: MSEB PAYS ANOTHER MILLION: -ENROM AND GOM TaKe TO THE MEDIA
§ [(b)(1) , (b)(4)]
|
T
|
Vv
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000 z
at =
mis
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UNCLASSIFIED

00500000000071


FEB-15-2001

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2@2 622 2391 P.83704

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STATE PASS OFIC FOR RUTR ANN N/CASTR) AND BRIDGET VILLI ARS
N STATE PASS USTR FOR RICK RUZICKA

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{ TREASURY FOR GEETHA RAD

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|
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WSCOC FOR RAARDING
SENSITIVE

C8 1288: WR

FACS: EWAG EF IMs ECOMs EINVe IN

SURJECT: ENROM UPDATE: STAYE ELECTRICITY GOARO COMPLETES NOVEMBER
PRYNENT

1, SBOE IN THE LATEST TWIST TO THE ENRON/DBSNOL POWER COMPANY
APC! QRAMA, THE MAHARASHTRA STATE ELECTRICITY BOARD ONSER) ON
FEBAUARY 12e 2881 PAID ENRON THE REMAINDER OF 17S OUTSTANDING
MOVEMEER 2288 SILL, IN THE AMOUNT OF 74 CRORE RUPEES SOUT S16
MILLION ,
‘WICK EKRON/OPC RAD CALLED IN THE CENTRAL GOVERNMENT COUNTER
GUARANTEE.
FUNDS CANE “PARTLY THROUGH INTERNAL ACCRUALS AND PARTLY FROK THE
STATE GOVERNMENT,” ASEB 44D UNTIC COB TODAY TO PAY ITS QUTSTARDING

INVOICE FROM DECESBER 2068 (ABOUT $33 MILLION. 17 BAS NOT DONE So.

AAD EARON/CPC ONCE AGAIN 1S ENTITLED TO CALL IM THE CENTRAL
GOVERNMENT COUNTER-GUARANTEE FOR TAIS AMOUNT. [(b)(4)]

THIS PAYMENT SATISFIES THE PORTION OF THE TOTAL DEBT FoR

MEDIA REPORTS QUOTE AN SER OFFICIAL AS SAYING THAT THE

PH 622-2222 RM 1121/MT

ana

mide 2a91 204 88S7S BaSs7S AMINE

{(b)(4)]

1, GR) COMMENT: «THE (LATEST PAYMENT BY MSES COMES AS A SURPRISE
CONSICERING THAT. UNTIL NOW TRE STATE WAD WELD THE POSITION THAT [T
HAD NO FUNDS AVALLABLE TO PAY ENRON/OPC. AND EVEN IF IT 01D. IT
WOULD MOT PAY ENRCK/GPC BECAUSE 7 CONSIDERED THE POWER EXPENSIVE,
EVEN AFTER ENRON/DPC AAD INVOKED TRE CENTRAL GOVERNSENT COUNTER-
GUARANTEE LAST WEEK, ALL INDICATIONS WERE CHAT THE STATE VAS WAITING
FOR THE CENTER TO BAIL IT QUT. MEAAWHILE, MEDIA REPORTS HAVE QUOTED
THE CENTER AS [SSISTING THAT 17 WOULD MAKE GOOD OW ITS OBLIGATIONS
AND PAY ENRON/OPC IF NECESSARY. A WELL-PLACED SOURCE IN THE CENTRAL
GOVERNMENT TOLD GONGENCF THAT CENTRAL GOVERNMENT MINISTER
IHPORMATION BARALAM, MATLONAL CONGRESS PARTY LEADER SHARAD PAWAR AND
THE PRIME AINISTERSS OFFICE VERE WORKING HARD TO FIND A “WINKWIN
SOLUTION® TO THIS ISSUE. THIS SOURCE FURTHER INDICATED THAT “THE
CENTRAL GOVERNMENT WANTS TO STEP IN WITHOUT GIVING TRE APPEARENCE
TWAT (T HAS STEPPED 1N.* THIS JUBES WITH wit(bys AMBASSADOR
CELESTE LAST WEEK -» THAT TRE GOI WAS “IM THE "to AccerT
ADQITIONM POVER OR HELP CISTRIGUTE DPC POWER TO OTHER STATES ANC
THAT CENTRAL GOVERNMENT MINISTE@ PRABAU “WANTS FO RESOLVE THE ENRON
ISSUE AND HONOR GO) COMMITMENTS". {(b)(4)]

THE MSEBsS MEW WILLINGNESS 10
TALK AND MAKE A PARTIAL PAYMENT 1S ENCOURAGING. (7 1S CLEAR THAT
THE STATE IS FEELING MORE PRESSURE FROM THE CENTRAL COVERNNENT.
BUSINESSES CONCERNED ABOUT LAST WEEKsS DOWNGRADING OF MANARASHTRALS
CREDIT RATING. AND PERHAPS EVEN THE OMANI GOVERAMENT (WHOSE REPS
WERE IN TOWN CAST WEEC TO CHECK QUT THE ENRON SITUATION OMAK IS
COMMITTED TO SUPPLYING A LARGE QUANTITY OF LNG TC TRE ENRCN PLANT?
WETHER THE STATE.S POSITIVE MOVEMENT WILL CONTINUE REMANS TO 9F
SEEN. END CONRENT.

UNCLE ASCTELEN

01000000001009


CACdAdACAdd Addl

ROUTINE CONFIDENTIAL

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

PAGE @1 MID=199831081960 678027
CAVEAT (S) =
HANDLE VIA

vey
) Ps
if

0671552z

ACTION = [TRS] BOX (1); EPO (1) "GE 1), TARO 1). 108 M1)» IOC WI» TOD A)

IMB (1) INL (1) + ITZ (1)) OXMF (4) + QC 1) + SEN (-)+ UO (1)
CRC = EB43

RR RUEATRS

DE RUEHDG #5545 3181519

ZNY CCCCC 2ZzH

R 0615192 NOV 98

FM AMEMBASSY SANTO DOMINGO

TO RUEHC/SECSTATE WASHDC 2487

INFO RUEHPU/AMEMBASSY PORT AU PRINCE 1145
RUCPDOC/USOOC WASHDC

eT

CONF IOENT IAL SANTO DOMINGO 865545

USDOC FOR 3134/USFCS/OI0/WH/RD
USDOC FOR 4322/1 TA/IEP/WH/OMCB/SIEGELMAN

€.0. 12958: DECL: 11/88/2005
TAGS: ENRG PREL EINV OR
SUBJECT: SMITH-ENRON WINNING THE: PAYMENTS STAKES

REF: A, SANTO DOMINGO 5466: 8, SANTO DOMINGO 3617

1. t) CLASSIFIED BY LINDA E. WATT CHARGE DO! AFFAIRES
AT.) REASON: 1.5 ©)

1. (C) ALTHOUGH REFTEL A REPORTS ON AES DOMINICAN POWER
PARTNER'S PAYMENTS PROBLEMS WITH THE CORPORACION
DOMINICANA DE ELECTRICIDAD (COE): SMITH-ENRON REPORTS A

ROSTER PICTURE. 1(h)(4)  (h)(6)]

eT
"5545
e643
NNNN

PANE INENTIAL

00500000000763


FROM (MON) 5. 4°98 10:39/8T. 10:36/N0. 4260060244 P 7

Author: [(b)(6)]
Date: 4/27/98 1:33 PM
Priority: Normal

{(b)(6)]

Subject: Power Plant Seizure Update No.2

Below please find my translation of a press release issued today by
the CDE.

Press Release
April 27, 1998

The Administrator General of the Dominican Electricity Corporation
(CDE), Engineer Rhadamés Segura, assured yesterday that the
reinforcement of the security in the installations of the Los Mina
Plants V and VI of the AES Dominican Power was his responsibility as
it was a decision taken by himself.

The executive manifested that said private generator had acted in an
irrational manner in recent days by drastically reducing it's
production as a form of pressure in order to collect a debt that the
energy company of the State had never denied to pay.

Segura expressed that he authorized a reinforcement of security at
midday Priday at the installations of AES Dominican Power on the basis
that their attitude and threat to take out their generators from
service was acting in detriment of the national interest and against
the security of the State.

In a press conference celebrated in the Conference Room of the CDE,
Engineer Segura, in reference to the supposed intervention of north
American embassy in the impasse arisen between the parties, stated
that this diplomatic legation does not support the contract
noncompliance that caid private generator practiced for which reason
he said that he could not explain why the media gave the subject the
treatment that does not correspond to the intentions of this
administration.

He pointed out that when he has met with representatives of the US
Embasey in variouc opportunities, there has always existed a spirit of
cordiality and respect and for that reason he did not believe that the
same entity will call the National Palace to intervene in a conflict
arising between the two electric companies.

He insured that historically the AES Dominican Power had presented a
problem for the CDE given the constant problems that have occurred in
their two generators and additionally that in the past they had failed
to live up to promises made about returning to service after
confronting technical difficulties.

Regarding the military personnel that went to reinforce the security
in the installations of the two generators of the AES Dominican Power,
Segura stated that he gave instructions to the General Supervisor of
the CDE, Contralmirante José Pefia y Pefia to act in that fashion.
First, Coronel Luis Felipe Martinez Scott of the Naval macines was
sent with soldier Miguel Sosa Tolentino and that later Captain Martin
Mufioz Jimenez was sent with a leiutenant and a sargent followed ten
minutes later by two more officers.

In relation to the functioning of the two generators being referred to,

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00500000000756


Agenda coming as well.

AG

> --—-Original Message-----

> From: Bauer, Kristen F

> Sent: Tuesday, December 11, 2001 7:01 AM

>To: Otto, Stanley A(Tokyo)

> Ce: [(b) (6)] Greenberg, Allen S(Tokyo);
> Subject: all the papers

>

> Stan and John, here's where we stand at the end of Monday.

>

> Attached are all the papers—-the US positions and Responses to Japanese
> concerns have changed from those in your briefing books. (We will need to
> update LArry's and David's books as well.)

>

> | would suggest adding a de! meeting into the schedule for early Thursday.
>

>

> FYI, other things remaining to be done:

{(b)(5)]

> See you in Japan! Kristen

>

> <<participants1210.doc>> <<Points on US Concernst.doc>> <<Responses to
> GOJ Specific Concerns.doc>> <<Japan's Investment Climate.ppt>>

> <<openingstmt.doc>> <<Larry's FDI.ppt>> <<US Participants.doc>>

>

> Kristen F. Bauer

> Country Officer, Japan Desk

> Telephone: 202-647-3154

> Fax: 202-6474402

>

> This e-mail is unclassified based on the definitions provided in E.O.
> 12958

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((b)(4)]

Ni0=199831682841

USDOC FOR 3134/USFCS/O10/WH/RD
USDOC FOR 4322/1 TA/ 1EP/WH/ONCB/SIEGELMAN

€.0, 12958: DECL: 11/83/2883
TAGS: ENRG EIMV PREL OR
SUBJECT: ELECTRICITY WARS: IPP INTERESTS DIVERGE

{(b)(4)]

{(b)(4)]

78053 6/1609

M1D=199831982001 873053 = 6 /16892

{(b)(4)]

9, () IT 1S TROUBLING THAT THE IPPS RAVE RECEIVED NO
ACCEPTABLE GODR GUARANTEE THAT THEIR DEBTS WILL BE
COVERED LESS THAN ONE MONTH BEFORE THE WEW OATE FIXED
FOR THE FIRST ROUND OF BIDS. WE ARE CONCERNED ABOUT
THE EVENTUAL SUCCESS OF TRE CAPITALIZATION GIVEM THE
QUESTIONS THAT REMAIN UNANSWERED, WATT

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18 (1) PML C1)» TTA C1) UME (1D + QC (1) «SEN () + UO CL) 2 XA CL) XL)
CRO = FAR

RR RUEATRS

OE RUEHOG #2663/81 1491739

IWY COCCe 12H

R 2917392 MAY 98

FM ANENBASSY SANTO DOMINGO

TO RUERC/SECSTATE WASHDC 0276

INFO RUEHPU/ANEMBASSY PORT AU PRIKCE 8826
a

CONF UDENT IAL SECTION GL OF 82 SANTO DOMINGO 887683

E.0, 12958: DECL: 5/26/2863

TAGS: ENRG EIKV DR

SUBJECT: PRESIDENT FERNANDEZ MEETS WITH U.S, POWER
COMPANIES

REF: SANTO DOMINGO 2523

CLASSIFIED GY CHARGE D’ AFFAIRES LINDA E, WATT? REASON:
L$ 0

1, (0) SUIMARY: THE U.S, INDEPENDENT POWER PROUCERS
(APPS) MET WITH PRESIDENT FERNANDEZ ON MAY 26, 1998.
THE PRESIDENT REFERRED THE OISCUSSION OF ACTUAL DEBT
NUMBERS BACK TO THE OFFICES OF THE CORPORACION
DOMINICANA DE ELECTRICIOAD (CDE) AND RESPONDED WITH AN
ENPRATIC “NO” WHEN ASKED IF THE ADMINISTRATION WOULD
INCREASE ITS MONTHLY SUBSIDY TO COE IN ORDER TO HELP
COVER THE DEBT. HE ASKED THE IPPS TO PREPARE A PAPER
DETAILING THEIR PROPOSALS OH HOW THE DEST CAN BE
HANDLED IX THE CONTEXT OF THE PRIVATIZATION OF COE AND
PLEDGED TO IKVITE THEM TO A MEETING BETWEEN COE AND THE
COMMISSION OVERSEEING THE PRIVATIZATION. END SUMMARY.

1. UG) PRESIDENT FERNANDEZ MET WITH U.S. IPP
REPRESENTATIVES ON TUESDAY. MAY 26, SHITH-ENROM, THE
COMPANIA DE ELECTRICIDAD OE PUERTO PLATA (COASTAL) AND
TRANSCONTINENTAL CAPITAL CORP. (SEARCARD) WERE
REPRESENTED. AES DOMINICAN POVER PARTNERS ALSO
ATTENDED ALTHOUGH THEY UNDERLINED TO THE EMBASSY IN
ADVANCE OF THE MEETING THAT TREY WOULD PARTICIPATE ONLY
AS "PASSIVE OBSERVERS.* CHARGE ATTENDED THE MEETING
ACCOMPANIED BY ECONOFF (MOTETAKER). GOOR
REPRESENTATIVES INCLUDED COE ADMINISTRATOR RHADAMES
SEGURA, ADMINISTRATIVE SECRETARY SIMON LIZARDOs ANO
EDDY MARTINEZ OF THE OFFLCE FOR INVESTMENT PROMOTION,

3, (0) THE MEETING OPENED WITH A STATEMENT BY TRE
DESIGNATED IPP SPOKESMAN POLNTING TO TRE ACCUMULATED
DEBT AND THE INCREASING DIFFICULTY FACED BY THE IPPS IN
PAYING THEIR BILLS. RE SPOKE TO THEIR CONCERN ABOUT
WOW THE DEBT WILL BE TREATED IN THE PRIVATIZATION
PROCESS. HE ALSO UNDERLINED THEIR UNHAPPINESS WITH THE
CURRENT SITUATION IN WAICH CDE CUTS (OR “CLIPS") THE
WONTELY INVOICES SUBMITTED BY THE IPPS WITH NO
EXPLANATION, ANOTHER IPP REPRESENTATIVE PROPOSED THAT
A THIRD PARTY: SUCH AS AN INTERKATIONAL ACCOUNTING
FIRM, BE BROUGHT IM TO REVIEW THE PROCESS BY WHICH COE
CLIPS THE IKVOICES.

4. (©) CDE ADMINISTRATOR SEGURA RESPONDED SAYING THAT
COE 1$ CONSIDERING ALTERNATIVES TO DEAL WITH THE DEBT
AND THAT A PACKAGE OF PROPOSALS WILL BE SUBMITTED 10
THE PRESIDENT. ACCORDING TO SEGURA: CDE CALCULATES THE
ACCUMULATED DEBT AT $54 MILLION (AS OPPOSED TO THE KORE
THAN $128 MILLION CALCULATED BY THE IPS). OF THIS
AMOUNT: HE STRESSED. $25 MILLION WAS INHERITED FROM TRE
PREVIOUS GOVERNMENT AND SHOULD BE FINANCED 1M SOME WAY.
THE REMAINING $36 MILLION HE SUGGESTED COULD BE REPAIO
BY REDUCING THE CURRENT PAYMENTS TO THE IPPS FOR FUEL.
HE ALSO REFERRED TO PAST EXCESSIVE CHARGES BY SMITH
ENROM AND AES FOR FUEL CALCULATED BY CDE AT uss24
NILLIOM AND USS28 MILLION RESPECTIVELY.

PRESIDENT SAYS “HO” TO NEW SUBSIDIE:

S.C) TRE PRESIDENT LISTENED TO THE DISCUSSION OF DEBT
NUMBERS AND COMMENTED THAT THE MEETING WAS NOT THE
APPROPRIATE VENUE FOR DISCUSSION OF SUCH DETAILS:
SUGGESTING THAT THE CONVERSATION GE CONTINUED AT THE
COE OFFICES. WHEN ASKED IF THE GOVERNMENT MIGHT
RESOLVE THE DEBT BY INCREASING ITS MONTHLY SUBSIDY TO
COE INOW APPROXIMATELY $17 MILLION) + THE PRESIDENT
RESPONDED WITH AN EMPHATIC * ABSOLUTELY WOT." BE SAID
THAT TO 00 SO WOULD RESULT IM A FISCAL DEFICIT WHICH
WOULD HAVE A NEGATIVE IMPACT ON THE OR'S FRAGILE
WACROECOKOMIC STABILITY. THE PRESIDENT ADDED THAT THIS
OND NOT MEAN THAT THE GOVERNMENT WOULD NOT BE WILLING
TO WORK WITH THE IPPS TO FIND A WAY TO FINANCE THE
Oger.

4 BUT ASKS FOR IPP INPUT

6. (©) TRE PRESIDENT REQUESTED THAT THE IPPS DRAFT A
PAPER FOR AIM PROPOSING POSSIBLE MEANS TO ELIMINATE THE
DEBT THROUGH THE PRIVATIZATION PROCESS OR TO FINANCE IT

POMC INSTAL

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OF THE COOR. HE SAID HE WOULD IMMEDIATELY CONTACT THE

COE ADMINISTRATOR ANO THE PRESS SECRETARY OF THE

mesa {() (gar Teal HE AGREED IT THE “A
OPINION THAT THE PROBLEM WITH SHITH-ENRON WOULD BE

SOLVED THROUGH NEGOTIATION AND THAT UNDER NO

CIRCUMSTANCES WOULO MARRANZIMI”S COMMENT HAVE THE

BACKING OF THE GOVERNMENT. HE CLOSED BY SAYING THAT
TRRANZINI'S COMMENT WAS “PROBABLY THE OPINION OF THE
CONFIDENTIAL SECTION G2 OF 62 SANTO DOMINGO 826627

18/21482

£.0, 12958: DECL: 12/18/2082

TAGS: ENRG. OR

SUBJECT: HuT-HEADED PUBLIC COMMENT AGGRAVATES TENSE
SITUATION OVER COE SMITH-ENRON PAYMENT

MOMENT: UNDER PRESSURE. *

7.) LEADING DAILIES LISTIN DIARIO AND HOY LED THEIR
FRONT PAGES OM DECEMBER 18 WITH STORIES ABOUT A PUBLIC
ANNOUNCEMENT MADE BY CDE THE NIGHT OF TRE STH. CDE
ANNOUNCED THE IMPASSE WITH SMITH-ENRON RAD BEEN
RESOLVED AND THAT IT PLANNED TO MAKE TRE PAYNENT TODAY,
THE LUSTIN ARTICLE NOTED THAT “THE SOLUTION... WAS
ANNOUNCED HOURS AFTER SMITH-ENRON COMPLAINED TO THE
EMBASSY ABOUT ITS CONFLICT WITH COE....* .

8, (C) EMBOFF CONTACTED PICHAROO WHO CONFIRMED CDE
ADMINISTRATOR MONTAS HAD ALSO CONTACTED HIM TO SAY COE
WOULD PAY ON THE 18TH, PICKARDO WILL INFORM US WHEN
PAYMENT HAS BEEN RECEIVED.

9. (W) A COMPANION REPORT ON THE ELECTRICITY SECTOR IN
+ HOY STATED THAT PEAK HOURS ELECTRICITY DEMAND OX
DECEMBER 9 WAS 11258 MEGAWATTS WHILE CDE SUPPLIED OWLY
985 MEGAWATTS. HOY CHARACTERIZED THIS 265 MEGAWATT
SHORTFALL AS COE’S MOST CRITICAL POINT IN THE LAST FEW
WEEKS OF GROWING BLACKOUTS IN SANTO DOMINGO AND
ELSEWHERE, THE ARTICLE COMMENTS THAT SMITH-ENRON HAD
PLAYED A PART IN THE SHORTFALL: OPERATING AT 145
MEGAWATTS INSTEAD OF THE 185 FOR WHICH THE FACILITY IS
DESIGNED, (COMMENT: THE SMITH-ENRON SHORTFALL 1Se

WOWEVER: A SHALL PERCENTAGE OF THE SHORTFALL ON THE
GRID.)

10, (0) THERE 1$ A STRONG PERCEPTION ON THE PART OF

i0°199734482435 866648
THE DOMINICAN HAK-ON-THE-STREET THAT SHITH-ENROM HAS AN
UNFAIR CONTRACT. PUBLIC PERCEPTIONS HAVE KOT BEEN
HELPED BY THE COMPANY'S FAILURE TO GENERATE
CONSISTENTLY TRE ELECTRICITY IT CONTRACTED TO PROVIDE
AND BY ITS THREAT TO SHUT DOWN OPERATIONS THREE WEEKS

BEFORE CAR|STHAS. {(b)(6)]
THE

PUBLICITY GENERATED BY THIS EXCHANGE SERVES TO FURTHER
EXACERBATE PUBLIC TENSION OVER CONTINUING ELECTRICAL
BLACKOUTS. THE EMBASSY WILL REPORT IMMEDIATELY WHEN IT
LEARNS THAT PAYMENT HAS BEEN RECEIVED. EXD COMMENT.
CUBBISON

aT

6607

t6AE

ANH

18/21482

PANCINENTIAL

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((b)(1)] {((b)(1)]

4, (SU) EL-RUFAL STATED THAT VP ATIKU HAD EVADED
MEETING WITH ENRON UNTIL THE BPE HAD COMPLETED ITS
REVIEW OF THE CONTRACT. SUT THAT THEY WOULD BE PREPARED
TO DISCUSS THE ISSUES DURING THEIR UPCOMING VISIT TO
WASHINGTON.

[(b)(1)]
WADDELL
0482

385
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VTE (1) FTE (10a TT (1) cOUMF (1) 0 QC (1) s SEN (+1
CRC = ARSE

00 RUEATRS

DE RUERKA 81242/81 1461286

IKY CCCCC 22H

0 2612862 HAY $9

FM AMENBASSY DHAKA

TO RUENC/SECSTATE WASHDC IMMEDIATE 3819
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RHEBAAA/USDOE WASHDC

IMFO RUEHME/AMEMBASSY MEW DELHI 1384
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aT

COMF IDENT TAL SECTION G1 OF 83 DHAKA 221242

LONDON FOR SUTPHEN
STATE PASS OPICs EXIM: TOAL usooes USAID

€.0, 12988: 85/25/84

TAGS: ENRG: ECON EAIDs EINDs ETRO: EAGR: 86
SUBJECT: BANGLADESH'S CONTROVERSIAL “CRASH POWER
PROGRAM

1, W)_ CLASSIFIED BY AMBASSADOR JOHN C, HOLZMAKs
REASON 1.5 )

2, (0) RESPONDING TO MOUNTING PRESSURE FROM TRE
PUBLIC AND OPPOSITION POLITICAL PARTIES: THE GOVERNMENT
WAS LAUNCHED A “CRASH POWER PROGRAM" TO ADD EARLY
FIFTY PERCENT TO EXISTING POWER SUPPLIES BY BRINGING
ON-STREAM SOB MW OF POWER WITHIN SIX MONTES AND ANOTHER
Sag MW SIX MONTHS THEREAFTER, [(b)(1)]

—_—_——————__

BOG LAUNCHES CRASH POWER PROGRAM

4. W) IM RESPONSE TO INCREASING POWER SHORTAGES
ESTIMATED OFFICIALLY AT BETWEEN 269 - 308 Mi
UNOFFICIALLY AT TWICE THAT RATE OR HORE)« THE
GOVERNMENT OF BANGLADESH (GDC) HAS LAUNCHED A “CRASH
POWER PROGRAM" TO ADD SBB MEGAWATTS OF NEW GENERATION
WITHIN SIX MONTES: AND ANOTHER S8B MW SIX MONTHS AFTER
THAT, THIS WOULD ADD MEARLY 58 PERCENT TO THE CURRENT
POWER GENERATION OF APPROXIMATELY 2260 MY, THE POWER
CRISIS 1S A GROWING POLITICAL PROBLEM. THE OPPOSITION
PARTIES HAVE SEIZED THE ISSUE -~ AS WELL AS THE WATER
SHORTAGES CAUSED BY THE POWER OUTAGES -~ AS RALLYING
POINTS IN TREIR POPULAR CAMPAIGN AGAINST THE
GOVERNMENT. THE BDG RESPORDED IM MID-APRIL BY SACKING
THE THEN-CHAIRMAN OF THE POWER DEVELOPMENT BOARD (P08)
AND APPOINTING A WELL-RESPECTED ENGINEER WITH A
CAN-DO" TRACK RECORD AT THE LOCAL GOVERNMENT AND RURAL
DEVELOPMEKT MINISTRY. LAST YEAR AT ROUGHLY THE SANE
TIMEs WHEN POWER SHORTAGES WERE PARTICULARLY ACUTE: THE
PRIME MINISTER FIRED RER ENERGY MINISTER AND ASSUMED
TRE PORTFOLIO: WHICH SHE STILL HOLDS,

{(b)(1)]

CONFIDENTIAL
0500000000657


8. While some observers are commenting that Enron's failure will slow down
deregulation efforts, METI Mi + Hiranuma told the press that he did not
expect the firm's bankruptcy to hinder ongoing electricity deregulation. Hiranuma
stressed that electricity deregulation is needed, regardless of pressure from foreign
entities, in order to revive the Japanese economy. In recent conversations with
econoff, METI officials have lamented the absence of Enron presence from the
policy debate as "extremely unfortunate" as they had had hopes that Enron Japan
would have participated in the December hearing of the Electricity Industry
Subcommittee (the group which is to develop recommendations on the next steps
for deregulation of the power market). METI is now approaching other firms and
told econoff that they hope that another US firm will emerge as the "flag bearer"
on advocating sector liberalization.

Filling the Void

9. Other US companies recognize that without Enron as the front guy on the issues,
they will need to step up and more visibly support liberalization and market
access issues in Japan. One US company representative in Japan indicated to
econoff that it was ready to become more active in the debate but ina style
different from Enron's customary "aggressive" policy. [(b)(4)]

10. Comment. The Enron failure will have some effect to USG energy deregulation
efforts in Japan as we will have to make sure that its failure is not perceived as
due to Enron's activities in deregulation but also we will have to counter the
misperception that without the company's presence, the US government does not
have a platform. Upping the industry profile will be difficult as many US firms
are not present in Japan, monitoring progress from other offices in the region or
from the US, Others with presence in Japan are assessing how or if they can be
helpful in the policy debate without jeopardizing potential business interests. In
future discussions on energy liberalization, we can continue to expect to have to
fend off arguments that the California energy crisis is typical of deregulation.
However, as the GOJ is interested in "real experience" as it studies the
deregulation processes in other countries, we will also have to discuss the possible
impact of Enron's failure on US efforts to deregulate its electricity market .

00500000000011


KOREA MONITORING REPORT
MAC/AP - 2nd Quarter, 1999

At the April 7 board meeting on Korea, the IMF determined that, given Korea's progress, future
reviews of the stand-by arrangement will take place semiannually, rather than quarterly. The
next IMF review will likely take place in [early September] and the next board meeting is
scheduled for . Check Treasury

Six more disbursements, totaling about $1.5 billion ($245 million each), remain to be paid out to
Korea, the final one being scheduled for November 2000. Korea has already repaid about $8.5
billion of its IMF borrowings.

Under the IMF appropriations legislation of last year, the Secretary of the Treasury is required,
prior to cach disbursement of IMF funds under Korea's existing Standby Arrangement, to certify
to Congress that Korea has either met all of the conditions of its Standby Arrangement or has
committed to a timetable to do so. To date Treasury has provided three such certifications, and
would need to do so again before the next disbursement, which is expected to take place in early
September.

It should be noted that, according to Treasury, the conditions are not given equal weight. They
are divided into structural performance criteria, which are specific targets that must be met, and
benchmarks, which should be met but which are treated as lesser commitments. All of the trade-
related conditions are benchmarks.

L ELIMINATION OF TRADE-RELATED SUBSIDIES:

. Credited by IMF as done. IA will continue to monitor.

IL. PHASE-OUT OF IMPORT DIVERSIFICATION PROGRAM (IDP):

. The last 16 items were eliminated on schedule on June 30, 1999. This is six months
earlier than the date to which Korea committed as part of its OECD accession. The 16
items are listed below. This condition has now been completed.

HS CODE DESCRIPTION
4011101000 Rubber tires for motor cars
8409911000 _ Parts for auto engines
8429521000 Excavators

8457100000 Machining centers
8458110000 Numerically controlled lathes
8516602000 _ Electric rice cookers
8521102000 Video recorders (magnetic tape)

00500000002406


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CRC = 7F2F

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eT

UNCLAS SANTO DOMINGO 805824

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€.0. 12958: N/A
TAGS: _ENRG PREL EINV OR
SUBJECT: SMITH-ENRON AGAIN RISKS DEFAULT

REF: A. SANTO DOMINGO 5545

THIS MESSAGE CONTAINS SENSITIVE BUT UNCLASSIFIED
INFORMATION-PROTECT ACCORDINGLY

1. (SBU) ALTHOUGH SMITH-ENRON HAD REPORTED A
SATISFACTORY FLOW OF PAYMENTS FROM THE CORPORACION
DOMINICANA DE ELECTRICIDAD (CDE) IN EARLY NOVEMBER: THE
SITUATION HAS SINCE TAKEN A CHANGE FOR THE WORSE.

[(b)(4) , (b)(8)]

WATT
"5824

TF2F
NNNN

UNCLASSIFIED

p-
yo

aw

it
00500000000767


COMMITTEES & SUBCOMMITTEES
Tokyo

Leadership Forum*
Chair Donald P. Kanak Jr., AIG Companies

Forum for the leadership of the ACCJ, including all officers,
governors, committee chairs, vice-chairs and the ACCJ office
staff.

Chairs Marcus Kosins Jr., Kosins Attorney at Foreign
Law Office
James M. Minamoto, Anderson Mori
Keeps the American business community in Japan informed on
legal and regulatory changes, legislative initiatives, trade
negotiations and other law-related issues. Actively pursues
liberalization of the rules restricting the activities of foreign
lawyers in Japan.

Living in Japan*
Chair Ken Joseph, Jr., Jhelp.com

Holds programs aimed at helping members, their families and
companies deal with issues related to living and working in
Japan. Programs cover diverse areas: culture, travel, sports,
recreation, psychological adjustment and community service

Marketing Programs*

Chair Kyle Cheriton, Walt Disney International Japan
Inc.

Hosts the ACCJ's popular Marketing Breakfast (monthly on the

second Wednesday) and co-sponsors special events. Prominent

speakers address a variety of marketing issues including

advertising, public relations, sales promotion and brand building.

Medical Devices and Diagnostics

Chair Ed Northup, Boston Scientific Japan K.K.
Promotes the successful marketing of medical devices and
equipment in Japan by U.S. companies. Works with the Ministry
of Health and Welfare to encourage its deregulation efforts

John Y. Le Bourgeois, Temple University
Japan

Recruits new members and develops ways to make membership
more meaningful and valuable. Conducts orientation meetings
for new members and seeks ways of encouraging participation
in ACCJ activities. Sponsors bimonthly Nomu-nication
networking parties for members and guests.

Nominating*

Chair Ronald J. Anderson, AIG Companies
Responsible for submitting a slate of nominees for officers and
governors to the membership prior to the annual election.
Submits lists of nominees to the Board of Governors when there
are vacancies between annual elections. Note: This is a closed
committee.

Nutritional Supplements
Chair (TBA)

The Nutritional Supplements Subcommittee serves on behalf of
ACCJ member companies active in the nutritional supplements
industry. Meetings are once a month, and activities focus on
regulatory impediments regarding labeling, testing, licensing and
other issues.

Paper Products

Chair (TBA)

Works closely with the American Forest & Paper Association
and the U.S. Embassy to address issues in the Japanese paper
industry, particularly efforts to accelerate the reduction of
Japanese tariffs on paper.

Pension

Chair TBA

Identifies key issues that impact the developing defined
contribution industry. Meets regularly with government and
ministry officials to understand and help shape regulations that
will govern defined contribution plans. Leverages global
experience of committee members to publish Viewpoints
fegarding best practices and generally accepted standards for
corporate retirement plans. Presents periodic updates on the
developing DC market and general retirement plan issues.

Pharmaceuticals

Chair (TBA)

Focuses efforts on reference pricing, rationalization of services
and systems, and the development and registration of innovative
products for Japanese patients. Works with government officials,
physicians and industry leaders to monitor legislation.

Privacy Task Force

Chair (TBA)

Coordinates the interests of ACCJ members across business
sectors on aspects of personal data protection, monitors
developments in the overall regulatory environment, and works
with Japanese industry organizations to develop self-regulatory
measures to ensure the protection of personal information,

Practice Liberalization

Chair Jay Ponazecki, Morrison & Foerster L.L.P.
(G.J.B.J.)

Works toward the creation of a fully and freely competitive legal

market in Japan to service Japan's liberalized business sector.

Advocates the legalization of full partnerships between

Japanese and U.S. lawyers and for the removal of all artificial

and anti-competitive restraints preventing U.S. lawyers residing

in Japan from joining with Japanese counterparts to offer

comprehensive legal services to clients.

Private Equity

Chair (TBA)

Focuses on the needs and concerns of private equity investors
by addressing issues, including disclosure, due diligence,

00500000000016


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ACTION = CHRSSBOI (1) +GHUN AL) » 12RD (1) 108 (2) + HDC (0) + 10D (1-718 (1)
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00 RUEATRS

DE RUEHAK HSSS9 2351514

TnR UUUUU 22H

0 2218142 AUG 08

FN AMEMBASSY ANKARA

10 RUEHC/SECSTATE WASHOC IMMEDIATE 7281
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ABEBARA/USDOE WASHDG
AVENLO/AMEMBASSY LONDOK 3118
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ar

UCL AS ANKARA 95593

STATE FOR EB/C3ED. EUR/SE, EB/IEP

USDOC FOR 1083/1 TA/JKALICK!

USDOC FOR 6908/TD/AS/MCOPPS

USDOC FOR 4212/1TA/MAC/OEURA/CPD/ODEFALCO
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USDOE FOR GOLOWYHs FARIELLO AND ROSSI

€.0, 12958; DECL: N/A
TAGS:EPETs ENRG? EINW> TU
SUBJECT: TURKISH GOVERNMENT PAYS EDISON MISSION AND ENRON DEST

1, ON AUGUST Ebr EDISON MISSION'S DOGA ENERJI AND ENRON'S
TRAKYA ELEKTRIK RECEIVED PAYMENT (TOTALING APPROXIMATELY
USD 62 MILLION) FROM THE GOT FOR FUEL OIL THESE TWO
ELECIRICITY GENERATION PLANTS WERE FORCED TO BUY LAST
WINTER WHEN RUSSIAN GAS DELIVERIES WERE CUT. UNDER THE
TERMS OF THEIR CONTRACTS: THE TURKISH GOVERNMENT WAS

ISSUE: THEY ARE CONCERNED THAT MONTHLY PAYMENTS FROM THE
STATE ELECTRIC GENERATION UTILITY (TEAS) FOR TRE POWER
TELA PLANTS GENERATE ARE INCREASINGLY LATEr [(b)(4)]

THE
TURKISH GOVERNMENT IS WELL AWARE OF THE PROBLEM, BUT HAS
EXPLAINED THAT TEAS IS NOT BEING PAID BY OTRER STATE
ENTITIES (INCLUDING TRE STATE DISTRIBUTION COMPANY
TEDAS!+ WHICH IM TURN FORCES TEAS TO PAY THE COMPANIES
UTE,

3, THE GOT HAS TAKEN SOME PRELIMINARY MEASURES TO IMPROVE
TEAS’ REVENUES OVER THE MEDIUM AND LONG TERM, THE NOST
IMPORTANT MEASURE WILL TAKE PLACE WITH THE KEW GOT
BUDGET: DECISIONS ON WHICH WILL BEGIN IN OCTOBER. STATE
ENTERPRISES WILL SE REQUIRED TO INCLUDE HORE REALISTIC
AMOUNTS OF MONEY IN THEIR SUDGETS TO PAY EXPECTED ENERGY
BILLS. IN JULY THE GOVERNMENT ALSO ANNOUNCED THAT
CUSTOMERS CONSUMING MORE THAN A BASIC AMOUNT OF
ELECTRICITY PER MONTH WOULD PAY A HIGHER RATE.
ELECTRICITY PRICES WILL ALSO CONTIMUE TO INCREASE 2.1
PERCENT A MONTH THROUGH THE END OF THE YEAR» IM LINE WITR
TURKEY'S IMF DISINFLATION PROGRAM, (b)(6)). TOLD
ECONOFF ON AUGUST 18 THAT HE EXPEC! MEASURES
TO REDUCE TRE DELAYS IN TEAS PAYMENTS TO TRE POWER
PRODUCERS BY THE END OF OCTOBER.

4 TAE ELECTRIC PRODUCERS ARE ALSO CONCERNED THAT THE COT
{(b)(4)]
HE VILL CONTINUE To

MONITOR THE STATUS OF THESE PAYMENTS.

SUPPOSED TO PAY THIS DEBT iN MARCH, PARRIS
((b)(4)] a
#5599
000F
THE COMPANIES EXPECT THE GOT TO FACE GAS NAN
SHORTAGES AGAIN THIS WINTER» WHICH WILL COMPEL THE PLATS
TO RUN ON FUEL OIL.
{(b)(6)] JHE GOT HAS DRAFTED
AMENOMENTS TO ALLOW THE ENERGY FUND TO MAKE FASTER
PAYMENT TO COMPANIES SHOULD TRIS SITUATION RECUR MEXT
WINTER. THE GOT 1$ ALSO EXAMINING A PROPOSAL TO
ELIMINATE THE 388 PERCENT IMPORT TAX ON FUEL OIL FOR
POWER PLANTS: A MEASURE WHICH WOULD AT LEAST REDUCE TRE
AMOUNT OF MONEY THE COMPANIES WOULD BE REQUIRED TO PAY UP
FRONT.
UNCLASSIFIED

00500000000573


IMMEDIATE CONFIDENTIAL

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

PAGE #2 OF #2 iDeLgg83e781731 mse asin MiDe1S9e3@7a1791 ase ane
CRISIS FOLLOWING RURRICANE GEORGES. a
1465
[(b)(1)] ee
. -

COMF IDENT! AL SECTION G2 OF 82 SANTO DOMINGO S466

USDOC FOR 3134/USFCS/O1O/WH/RD
USDOC FOR 4322/1TA/IEP/WH/ONCB/SIEGELMAN

€.0, 12988: DECL: 29/84/83

TAGS: EWRG EINV PREL OR
SUBJECT: AES IN CRISIS YET AGAIN

{(b)(1)]

{(b)(1)]

WATT

ANF INENTI AL
00500000000760


ROUTINE

PAGE 81 OF 82
CAVEAT (S) =
HANDLE VIA

WID=199916601729 943815

ACTIOM = CURSDBOU C1) GL C1)» HCC (1) + HDB (2) LOG AL) IMB ALD INF th

VTL) FEM CD) O1AF (1) » QC UR)» SEN C-) XA (1) » XL (1)
CRC = 186F

AR RUEATRS

OE RUERRL #1192/81 1651418
TNR UUUUU 22H

R 1514182 JUN 99

FM USOFFICE BERLIN

TO RUEHC/SECSTATE WASHDC 2953
INFO RUCPOC/USDOC WASHDC
RUCHERG/FRG COLLECTIVE

Br
UNCLAS SECTION @1 OF #2 BERLIN 821192
DEPARTMENT FOR EB AND EUR/AGS

USDOC FOR 6188/1TA/TD/B1/JRASMUSSEN
USDOC FOR 4212/1 TA/MAC/ OWE/BE TOMLINSON

€.0, 12858: W/A

1 BERLIN HAS SELECTEO A FRANCO-GERMAN CONSORTIUM AS
THE PREFERRED BIDDER FOR A 49.9 PERCENT SARE OF TRE STATE-OWNED
WATERWORKS» GERMANY’S LARGEST WATER AND EFFLUENTS AANOL ING
COMPANY. THIS 1S THE FIRST MAJOR PRIVATIZATION 18 THIS SECTOR IN
GERMANY AND THE FOURTH PRIVATIZATION OF A BERLIN UTILITY
FOLLOWING ELECTRICITY.) IN RECENT YEARS. THE WINNING B1D WAS OM
3.3 SILLION PLUS MANY EXPENSIVE FUTURE COMMITNENTS, ENRON LOST:
DESPITE WAVING PLACED A VERY GENEROUS BID. WITH AN ESTIMATED
INVESTMENT NEED OF OM 308 BILLION IN THIS SECTOR IN GERMANY IN
THE NEXT FEW YEARS AND LOCAL AUTHORITIES SUFFERING FROM
INCREASING BUDGETARY CONSTRAINTS: MORE SALES OF MUNICIPAL WATER
UTILITIES TO PRIVATE INVESTORS AND OPERATORS ARE TO BE EXPECTED.
ENO SUMMARY.

2. A-FRARCO-GERMAN CONSORTIUM CONSISTING OF THE GERMAN
DIVERSIFIED ENERGY GIANT RE» A HAJOR FRENCH WATER SPECIALIST
COMPAGNIE GONORALE DES EAUX (VIVENDI). AND THE GERMAN INSURANCE
COMPANY ALLIANZ (ONE OF THE WORLD'S LARGEST INSURANCE COMPANIES!
LOOKS SET TO SE THE WINNER OF TAREE COMPETITORS FOR THE 43,9
PERCENT SHARE OF THE BERLIM WATERWORKS CBWE). THE CITY WILL
RETAIN TRE CONTROLLING INTEREST IN THE NEW HOLDING: WHICH ALSO
CONTAINS BABS OPERATIONS IN CENTRAL AND EASTERN EUROPE AS WELL
AS ASIA, THE LOSERS IN THE PROCESS WERE ENRON IN PARTNERSHIP
WITH THE HESSEN STATE BARK AND A CONSORTIUM CONSISTING OF THE
BERLIN-BASED BANKGESELLSCHAFT BERLIN AND THE FRENCH SUEZ
LYORNAISE DES EAUX (THE WORLO’S LARGEST WATER AND EFFLUENTS

maint

15/15362

TTT
UNCLASSIFIED Pg
DEPT TREASURY COMC:
PH 622-2222 RM 1121/

WiD=199816601789 243815
OPERATOR) .

3. RME/VIVENDI/ALLIANZ BID DM 3.1 BILLION FOR B¥B AND PLEDGED TO
COMMIT DM 208 MILLION TO SHORING UP A DEFICITARY METHANE
PRODUCTION FACILITY IN THE FORMER GOR. THE CONSORTIUM ALSO MADE
A LARGE NUMBER OF MAJOR COMMITMENTS: TO KEEP CURRENT WATER PRICES
UNTIL DECEMBER 2883, TO CONTINUE EMPLOYING SWB PERSONNEL FOR THE
WEXT 15 YEARS: TO INVEST OM S BILLION IN B¥B OVER THE NEXT 18
YEARS: TO RETAIN B¥B AS AN INDEPENDENT COMPANY WITH ITS SEAT OF
BUSINESS IN BERLIN» TO RELOCATE VARIOUS CONSORTIUM SUBSIDIARIES
WITH 73@ JOBS IN BERLIN BY TRE END OF 2084+ TO DEVELOP BW3 AS A
WATIONAL AND INTERNATIONALLY ACTIVE COMPANY AND SERLIN AS A
CENTER FOR WATER AND EFFLUENTS MANAGEMENT TECHNOLOGY.

4. WITH NEARLY 4 MILLION CUSTOMERS FOR WATER AND EFFLUENTS:
APPROXIMATELY 61408 EMPLOYEES AND OPERATIONS RANGING FROM SHARES
AND IMVESTNENTS IN EASTERN EUROPE: TELECOMMUNICATIONS ALONG ITS
1408 KM PIPELINES IN BERLIN TO THE INNOVATIVE BUT SEVERELY
DEFICITARY SLUDGE FIRING UNLT USED TO MANUFACTURE METHANE. B¥B IS
THE LARGEST WATER UTILITY IN GERMANY. WHILE WATER CONSUMPTION IN
THE AREA CONTINUES TO FALL AND PRICES ARE AMONG GERMANY’ S
HIGHEST: TURNOVER FELL TO OM 1.9 BILLION IM 1998 WITH A SEVERE
OROP IM PROFITS TO DM 65 MILLION. TO DATE THESE PROFITS HAVE
FLOWED INTO THE CITY BUDGET: WHICH HAS ALSO USED BMG FUNDS AS A
STOP-GAP IN TIMES OF CRISIS, THE PRIVATIZATION TERMS WILL ENSURE
THE CITY A SECURE INCOME IN THE FUTURE TOO,

5, THE TENDER PROCESS RAS BEEN ACCOMPANIED BY A CACOPHONY OF
PROTESTS AND HARASSMENT FROM ALL POLITICAL PARTIES: INCLUDING THE
COU AND SPD THAT FORM THE CITY COALITION GOVERNMENT: AND UNIONS
AND MANAGEMENT OF GWBr WO WERE UNITED IN THEIR DISTASTE FOR
PRIVATIZATION, A SUCCESSION OF PRESS RELEASES OF NEW UNPLEASANT
TRUTHS ABOUT THE REAL INNER LIFE OF GWB THREATENED 10 FRIGHTEN
OFF BIDDERS: ANO LEGISLATION NECESSARY FOR THE PARTIAL
PRIVATIZATION WAS REPEATEDLY DELAYED IM PARLIAMENT. THE GOAL IS
WOW TO OBTAIN PARLIAMENTARY APPROVAL FOR THE PRIVATIZATION BY
JULY SO THAT THE PURCHASE PRICE GAN STILL BE USED TO BALANCE THE
1998 CITY BUDGET: WHICH 1S HOPELESSLY IN THE RED, THIS ASSUMES
THAT A CONSTITUTIONAL CHALLENGE BY THE OPPOSETION GREEN AND EX-
COMMUNIST POS PARTIES WILL NOT SUCCEED. THEY ARGUE THAT THE
PRIVATIZATION CF WATER FACILITIES 1$ UNCOMSTITUTIOMAL, THAT THE
SALE I$ A CONCEALED CREDIT AND THAT THEIR CALCULATIONS SHOW THAT
AWB WOULD HAVE TO RAISE ITS PRICES BY AT LEAST 38 PERCENT IN 2008
AMD IS THUS AT THE EXPENSE OF THE ELECTORATE.

6. THE SELECTION OF THE RVE/VIVENDI/ALLIANZ CONSORTIUM REPEATS A
PATTERN ESTABLISHED IN PREVIOUS PRIVATIZATIONS IN BERLIN. EACH
RESULTED INA SALE TO A CONSORTIUM CONSISTING OF ONE FOREIGN
SPECIALIST BIODER AND AT LEAST ORE GERMAN PARTNER WITH
OPERATIONAL EXPERIENCE IN TRE COUNTRY. IM ALL CASES THE WINNING

accicicn
00500000000547

1S/18382


IMMED | ATE
°)
p

PAGE 82 OF 63 1288813881123 6855S
€.0, 12958: N/A

TAGS: EFIN EAID PREL» NI

SUBJECT: CRIEF ECONOMIC ADVISOR DISCUSSES NIGERIAN ECONOMY
WITH VISITING TREASURY DEPUTY ASSISTANT SECRETARY.

NATIONS’ INSISTENCE THAT NIGERIA ESTABLISHES A REPAYMENT
TRACK RECORD BEFORE DISCUSSING DEBT RELIEF, WE CONCEDED IT
US UNLIKELY THAT DEBT RELIEF WILL TAKE PLACE 'MMEDIATELYs
BUT WISHED THAT A COMMITMENT TO DEBT FORGIVENESS IN THE
FUTURE BE PART OF THE DIALOGUE HOW, ASIODU EXPLAINED THAT
TRE GON WAS SPENDING OM FOREIGH DEBT FIVE TIMES THE AMOUNT
DEDICATED TO EDUCATION, AND TRAT NIGERIA KEEDED “ALL TRE
HELP IT CAN GET" FROM THE INTERNATIONAL COMMUNITY.

7, DEPUTY ASSISTANT RADELET NOTED THE IMPORTANCE OF THE GOW
MOVING AHEAD OM RESTRUCTURING PRIVATE SECTOR DEBT
INSTRUMENTS: INCLUDING BRADY BONDS: IN THE CONTEXT OF THE
OVERALL DEBT RESTRUCTURING. RADELET POINTED OUT THAT DELAYS
IN REACHING AN AGREEMENT WITH THE IMF AND THE PARIS CLUB
WOULD MAKE IT MORE DIFFICULT TO KEEP TOTAL DEBT SERVICE
PAYMENTS FOR THE YEAR WITHIN THE USD 1,5 BILLION CEILING:
SINCE QUARTERLY PAYMENTS WOULD BE DUE TO THE PRIVATE SECTOR
(VOTE: THE CURRENT ALLOCATION OF THE USO 1.$ BILLION
INCLUDES TWO QUARTERLY PAYMENTS TO THE PRIVATE SECTOR: A
OELAY UNTIL SEPTEMBER WOULD REQUIRE A THIRD QUARTERLY
PAYMENT. END NOTE.) CRIEF ASIODU RESPONDED THAT THE GOW HAD
BEGUN THE PROCESS OF RETAINING AN ADVISOR FOR RESTRUCTURING
PRIVATE SECTOR DEBTS,

8 DEPUTY ASSISTANT SECRETARY RADELET REASONED THAT
CREDITOR COUNTRIES WOULD LOOK FAVORABLY UPOM MIGERIA IF THE
PROPOSED BUDGET INCLUDES STRONG HEALTH: EDUCATION: AND OTHER
SOCIAL SPENDING. ASIODU RESPOKDED THAT THE BUOGET CREATES A
USD 1 BILLION POVERTY ALLEVIATION FUND: AND THAT) IN ANY
CASE: MOST OF THE BUDGET’S CAPITAL EXPENDITURES, SUCH AS
ROAD: POWER OR WATER PROJECTS: WILL HAVE AN EFFECT ON
POVERTY ALLEVIATION: ABOVE AND BEYOND THE EARMARKED FUND,
ASIODU ADDED THAT THE (ESTIMATED) USD 18 BILLION THAT
WIGERIA HAS SPENT “DEFENDING DEMOCRACY IM LIBERIA FOR THE
UMITED STATES, AND IN SIERRA LEONE FOR THE UNITED KINGDOM"
SHOULD BE (SOMEHOW TAKEN INTO ACCOUNT IN DEBT DISCUSSIONS
(OTE: GON’S CLAIM THAT IT HAS SPENT USD 1 BILLION IN
PEACEKEEPING OPERATIONS IN LIBERIA AND SIERRA LEONE IS
UNSUBSTANTIATED, END MOTE.)

PRIVATIZATION

$, CHIEF ASIOOU DEFENDED THE GON’S PRIVATIZATION STRATEGY,
PARTICULARLY ON THE POWER SECTOR. ACCORDING TO ASIOOUs THE
PRIVATIZATION OF THE NIGERIAN ELECTRIC POWER AUTHORITY
(NEPA) REQUIRES THE RESTRUCTURING OF THE COMPANY TO MAKE IT
WORE ATTRACTIVE TO INVESTORS. FURTHERMORE: NEPA’S

UNCLASSIFIED

EPT TREASURY COMCEN
H 622-2222 RM 1121/MT

W1D=296013001123 68555
PRIVATIZATION CAM MOT PRECEDE THE ESTABLISHMENT OF &
REGULATORY ENVIRONMENT IM THE ELECTRICITY SECTOR. ASIODU
EXPLAINED THAT THE WORLD BANK SUPPORTED GON’S PLANS TO "MAKE
SURE THAT THE TERMS OF REFERENCE ARE CLEAR BEFORE
PROCEEDING WITH PRIVATIZATION: WHICH HE OPINED COULD START
1N 2881 AND BE COMPLETED BY 2083. HE ADDED THAT HE FAVORED
AN AMERICAN-STYLE MODEL OF ZONAL FRANCHISES OVER PLANS TO
BREAK UP AND COMMERCIALIZE THE COMPANY ALONG GENERATION,
TRANSMISSION AND DISTRIBUTION FUNCTIOKS, ALTHOUGH HO
OECISION HAD BEEN MADE YET ON THIS ISSUE (NEPA WILL BE
AUDITED, HE SAID: TO INFORM SUCH DECISION.) THE CHIEF
ECONOMIC ADVISOR STATED THAT THE GOM WILL APPROVE THE
OPERATION OF INDEPENDENT POWER PROVIDERS (IPP)» INCLUDING
MOBIL» ABB AND “MAYBE* EWROK.

1, CHIEF ASIODU RESTATED GON’S VIEW THAT SOME STATE OWNED
ENTERPRISES WILL REQUIRE OVERHAULING BEFORE PRIVATIZATION.
ASLODU EXPLAINED THAT TRIS WAS PARTICULARLY THE CASE WITH
SERVICE PROVIDERS (SUCH AS POWER PLANTS AND REFINERIES)» AS
THE GON HAS A RESPONSIBILITY TO MAKE SURE TRAT THE PUBLIC
BENEFITS FROM THEIR PROPER OPERATION. DAS RADELET NOTED
THAT INVESTING MEW MONEY INTO LOSS MAKING STATE ENTERPRISES
WAS A RISKY STRATEGY: SINCE THERE 1S NO GUARANTEE OF GETTING
THE MONEY BACK. CHIEF ASIODU RESPONDED THAT THE GON WOULD
FACTOR THE COSTS OF RENOVATING AND RESTRUCTURING PUBLIC
ENTERPRISES WHEN THEY ARE PRIVATIZED,

11, ASIODU NOTED RECENT PROGRESS IK THE COMPLETION OF TURK~
AROUND MAINTENANCE AT THE PORT HARCOURT REFINERYs AND
CONCEDED THAT A SIMILAR PROJECT FOR THE KAOUNA REFINERY “HAD
WOT EEN SATISFACTORY" (OTE: IN 1998 FREKCH COMPANY TOTAL
SIGNED BUT FAILED TO FULFILL A CONTRACT TO RENOVATE THE
REFINERY: PURPORTEDLY FOR TECHNICAL REASONS, THE REFINERY
UNCLAS SECTION 63 OF 83 ABUJA 9575

TREASURY FOR DAS STEVEN RADELET

£.0, 12988: N/A

TAGS: EFIN EAID PREL» MI

SUBJECT: CHIEF ECONOMIC ADVISOR DISCUSSES NIGERIAN ECOKOMY
WITH VISITING TREASURY DEPUTY ASSISTANT SECRETARY.

CONTINUES TO OPERATE WELL- BELOW FULL CAPACITY. EMD NOTE.)
ASTODU ALSO STATED THAT THE GON WOULD MAME A KEW MANAGER TO
CONDUCT A TECHKICAL ASSESSMENT OF THE AJEOKUTA STEEL
FACTORY, AND TRAT THERE AAD BEEM TECHNOLOGICAL IMPROVEMENTS
MADE ON THE MATIONAL FERTILIZING COMPANY OF NIGERIA
(NAFCON) .

INVESTMENT CLIMATE AND POLITICAL STABILITY

12, RESPONDING T0 DEPUTY ASSISTANT SECRETARY RADELET’S

IINCLASS IFIED

00500000000864


Wunderlin, Linda

From: Abbott, Lucy K [AbbottLK@state.gov]

Sent: Friday, October 19, 2001 5:04 AM

To: Robert Dohner (E-mail); Kaproth (E-mail)

Subject: FW: ACCJ Conference Room Reserved/ ACCJ committee list

Aces
Commetoestiars- 100401 60

fyi

oo Original Message---—-

From: Wong, Marcia K

Sent: Friday, October 19, 2001 4:33 PM

To: Abbott, Lucy K; Cheyne, Gerard A; Durbin, Andrew S; Froats, Daniel T;

Greenberg, Allen S; Kevin Honan (E-mail); Kidd, Leigh P; Lackmann, Gerald R;

Michalak, Michael W; Otto, Stanley A; Pellegrino, Daniel J; Stoner, Jeffrey
H; Watson, Samuel R; Webster, Jessica M; Wong, Marcia K
Subject: FW: ACCJ Conference Room Reserved/ ACCJ committee list

another list from accj with the descriptions...

a Original Message-----

From: Hidemi Umemura [mailto:humemura@accj.or.jp}

Sent: Friday, October 19, 2001 4:30 PM

To: Wong, Marcia K; ‘Jonathan Kushner; ‘Crowther, Mark’

Subject: Re: ACCJ Conference Room Reserved/ ACCJ committee list

Dear Ms. Wong:

Please find the attached updated ACCJ committees & subcommittees list for
your information.

! am not sure that it is the same list which you received before. Anyway,

the Enenuy Subcommittee is listed now. If you have any questions, please let
me know.

Regards,
Umemura, ACCJ

----- Original Message -----

From: “Wong, Marcia K" <WongMK@state.gov>

To: "Jonathan Kushner” <jkushner@accj.or.jp>; "Crowther, MarkTM
<mark.crowther@enron.com>

Ce: “Hidemi UmemuraTM <humemura@accj.or.jp>

Sent: Friday, October 19, 2001 2:48 PM

Subject: RE: ACCJ Conference Room Reserved

00500000000012


FROU DEPARTMENT OF STATE 4A (FRID 2.18'00 9:31/8T. 9:30-NO, 376063759 F 10

CONFIDENTIAL

{(b)(1)]

HOW THE GON WOULD USE WINDFALL REVENUE IS A GOOD BUT
VERY OPEN QUESTION. OVERALL GON SPENDING, ESPECIALLY Ct
SCCTAL MATTERS, REMAINS CONSTRAINED, AND THE ECONCMY HAS
YET TO SEE THE EXTRA OTL MONEY. THE GON HAS MADE SOME

. ON, "A AND ELSEWHERE,
TSLUITAS AND RUUD OER ON LARORSINTENSIVS CS
-ENPRASTRUCTURE RECONSTRUCTION. WOMEVER, ANOTHER
IMPORTANT WILD CARD IS THE FINAL CCNTOURS CF THE NEW
BUDGET NOW BEING WRANGLED OVER BY THE NATIONAL ASSEMBLY
AND THE EXECUTIVE BRANCH. IN OLD AND NEW DEMOCRACTES
ALIZE. BUDGET BALLE ARE SOMETIMES DAOPPED.

‘TWADDELL
NN

End Cable Text

Printed By: Alex Mamischenko 02/18/2000 07:49:39 AM

CONCEAL

00500000000609


ROUTINE CONFIDENTIAL v
an a
DEPT TREASURY COMCEN Ue
PH 622-2222 RM 1121/MT
PAGE 81 OF 82 ‘NID 199912488455, 019981 miDe 199912400455 ‘19981 ‘4/8271
CAVEAT IS) = AND ENRON'S BOARD HAVE BLESSED THE PROJECT. ENRON AND
HANDLE VIA THE IDC CAN NOW ENTER INTO FINAMICAL ARRANGEMENTS AND

ACTION = (TRSIBO1 (1) CALL G3) oGE (1). HCH 1), 1B (0) $C 10) I 18 AY

VE (1) 0 EMM C100 ETE (1) s PTL (2) OUME (1) + @6 (1) SEM (-)
CRC = A9EE

PARTNERSHIPS RELATING TO MAKING THE GAS PIPELINE AND
JRO AND STEEL PLANT A REALITY. END SUMMARY.

1. (C) THE ROAD TO AN AGREEMENT WAS A LONG ONEs AND

RR RUEATRS ONE WHICH WE MOSTLY SUMMARIZED LAST SEPTEMBER WHEN
DE RUEHTO #2174/81 1248548 ENRON SIGHED THE HOA WITH MINISTER OF INDUSTRY

INY COCCC 228 OLOEMIRO BALOI AMD THE INDUSTRIAL “DEVELOPMENT COMPANY
R G4G5462 HAY 99

FN AMEMBASSY MAPUTO

TO SUEHC/SECSTATE WASHOC 2884

INFO RUEATRS/DEPT OF TREASURY WASADC

RUCPDOC/USDOC WASHOE

RHEBAAA/DEPT OF ENERGY WASHOE

RUEWSA/AMEMBASSY PRETORIA 1932

RUEHAB/AMEMBASSY ABIOJAN 8233

BI

CONFIDENT EAL SECTION 61 OF 82 MAPUTO OB7I74

PRETORIA PASS JOHANNESBURG FOR FCS - MARNOLD
PRETORIA FOR ECON - LERUDVIG

ABIDJAN FOR USEO/AFOB

USDOC FOR 4518 ITA/TEP/ANESA/OR/OROGERS

USDOC FOR ADVOCACY CENTER - SBALLARD

TREASURY FOR OASIA - JRALYEA, NEPSTEIN: EBARBER
DEPT PLEASE PASS TO USTR - RWHITAKER: VALLE
DEPT FOR EB/IFOs AF/S: AF/EPS - MHEATH

DEPT PLEASE PASS TO USTOA - MMEVELLs JRICHTER
DEPT PLEASE PASS TO EXIMBANK - AEMMET: CHORIARITY
DEPT PLEASE PASS TO OPIC - RRUGA: JPOLAN

£.0, 12958: DECL 85/82/04

TAGS: EINVe EPETs ENRGs EFINe ECON: MZs US
SUBJECT: ENRON SIGNS GAS FRAMEWORK AGREEMENT THAT
GIVES GREEN LIGHT TO $2.5 BILLION WISP PROJECT

REF: $8 MAPUTO S677

THIS CABLE 1S CLASSIFIED CONFIDENTIAL BY ECONOMIC
OFFICER JOE RIPLEY FOR REASONS: 118) AND OD).

1. () SUMMARY: ON APRIL 38: EWRON SENIOR VICE
PRESIDENT TONY WAY ALONG WITH ENH @HOZAMBIQUE’S
WATIONAL OIL AND GAS EXPLORATION AND DEVELOPMENT
COMPANY) PRESIDENT ISSUFO ABDULA: AND MINISTER OF
WIMERAL RESOURCES AND ENERGY JOHN KACHAMILA SIGNED THE
LONG AWAITED FRAMEWORK AGREEMENT GOVERNING THE
DEVELOPMENT OF PANDE NATURAL GAS FIELD. THE FRAMEWORK
AGREEMENT: ALONG WITH THE HEADS OF AGREEMENT SIGNED IN
SEPTEMBER 1998 MEANS THAT THE USD 2.5 BILLIOW MAPUTO
JRON AND STEEL PROJECT (ISP) IS NO LONGER MERELY A
PROPOSAL. BOTH THE MOZAMBICAN COUNCIL OF MINISTERS

GOVERNING THE IRON AND STEEL PUNT. (b)(4 ))

IN HIS STATEMENT TO THE PRESS: KACHAMILA
WOTED THE OBVIOUS BENEFITS OF MISP TO MOZAMBIQUE. BUT
STILL COULD NOT RESIST POINTING TO OUTSTANDING ISSUES
SURROUNDING THE PROJECT: SITE SELECTION» WATER
RESOURCES, ENVIRONMENTAL IMPACT. TRANSPORT OF IRON ORE
FROM SOUTH AFRICA: AMD MAPUTO PORT OEVELOPMENT. THE
PRESS PICKED UP ON THESE DURING THE EMSUING PRESS
CONFERENCE AND TOOK THE OPPORTUMITY TO PEPPER ENROK’S
WAY WITH QUESTIONS,

43, (C) NOTWITHSTANDING: THE SIGNING CEREMOKY AND PRESS
CONFERENCE WAS ONE OF ENRON'S BEST LOCAL PUBLIC
RELATIONS EFFORTS TO DATE: AS KEY PEOPLE TO THE
PROJECT MANAGED TO MAKE IT ON SHORT NOTICE TO WITNESS
THE EVENT. PORTUGUESE TRANSLATION WAS AVAILABLE IN
THE PERSON OF ENRON'S. COUNTRY REPRESENTATIVE
AUGUSTINNO ZACARIAS: WHO PLAYED A KEY ROLE THIS PAST
YEAR IM MOBILIZING GRN SUPPORT FOR THE PROJECT: BUT
WHO 1S HOW LEAVING ENRON FOR A UNITED NATIONS JOB,
ENRON'S HANDLING OF THE LOCAL PRESS: AFTER FIVE YEARS
OF FLYING IN AND OUT OF THE COUNTRY, FINALLY REFLECTED
A FULL GRASP OF MOZAMBICAN SENSIBILITIES AND SHOWED
THAT EWRON IS CLEARLY TAKING MOZAMBIQUE SERIOUSLY. IN
ADDITION TO THE DIFFICULT J08 OF REPLACING ZACARIAS:
ACCORDING TO MISP MANAGER BILL MAKAGERs ONE OF ENRON'S
FIRST ACTIONS WILL BE TO MIRE A LOCAL PUBLIC RELATIONS
FIRM.

4, (0) WEBSTER AND WAY SEEMED CONCERNED BUT MOT OVERLY
DRAMATIC ABOUT THE PROSPECT OF REACTIVATING PARTHER
(Ce WHICH MAY WOT NECESSARILY BE A SURE THING.

{(b)(1)]

CONFIDENTIAL

00500000000837


ROUTINE

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PAGE O1 iD=199883002068 008783
CAVEAT (S) =
ANOLE VIA

ACTION = (TRSIBOL (1) +€PD (1) oFCEM (1) 0G1 (1) > LADB (1) + IBRD (1) 4BB4U)
UDC C1) PMB (1) + UMP CLD e TNA CD» LNUGL) e ITAS (1) 6 ATF (1) FTW AL) OME (1) ~

QC (1) + SEN (-) + KAA) XLE UD)
CRO = FASE

BR RUEATRS

OE RUEHDG HG411 B3B1916

IWY Cocce 22H

R 3819162 JAN 98

FI AMENBASSY SANTO DOMINGO

TO RUEKC/SECSTATE WASHOC 8547

INFO RUEHPU/AMEMBASSY PORT AU PRINCE OS8@
BI

CONFIDENT AL SANTO DOMINGO 280811

E.0. 12958: DECL: 1/23/2883
TAGS: ECON EFIN ENGY KTEX OR
SUBJECT: CHARGE MEETS FINANCE SECRETARY TORIEIO

WW) CLASSIFIED BY LINDA E. WATT» CHARGE D° AFFAIRES
ALI. REASON: 1.50,

1. (U) CHARGE MADE A “GET ACQUAINTED" CALL ON SECRETARY
OF FINANCE DANIEL TORIBIO JANUARY 14, TRE FOLLOWING
REPORTS OM THE ISSUES TOUCHED ON IM THAT CONVERSATION.

2, OC) CHARGE RAISED THE PROSPECTS FOR CONTINUED
PROGRESS OM THE ECONOMIC REFORM PACKAGE ORIGINALLY
‘SUBMITTED BY THE FERNANDEZ ADMINISTRATION TO TRE
CONGRESS IM CONJUNCTION WITH ITS 1997 BUDGET. TORIBIO
RESPONDED THAT THE GOVERNMENT IS HOPING FOR BETTER
SUPPORT FOLLOWING THE MAY CONGRESSIONAL ELECTIONS, AE
‘ALSOr HOWEVER, UNDERLINED THE IMPORTANCE OF THE ON-
GOING GOOR FREE TRADE AREA NEGOTIATIONS WITH CENTRAL
AMERICA AND CARICOM SAYING THAT THE PRIVATE SECTOR WILL
WANT A LEVEL PLAYING FIELD WITH THEIR CENTRAL AMERICAN
COUNTERPARTS WHICH WILL IN TURN LEAD THEM TO PUT
PRESSURE ON THE CONGRESS FOR PROGRESS OM THE REFORM
PACKAGE GSPECIALLY THE TARIFF REFORM PROVISIONS) .
TORIBIO NOTED THAT FREE TRADE ZONE OPERATORS ARE
PARTICULARLY ANXIOUS TO SELL TO CENTRAL AMERICA WHILE
DOMESTIC PRODUCERS CLAIM THEY WILL HAVE AN UNFAIR
AOVANTAGE. CHARGE RESPONDED THAT THIS PROBLEM MAY
ALREADY HAVE BEEN FACED BY THE CENTRAL AMERICANS: WHO
MIGHT BE ABLE 10 OFFER SUGGESTIONS ON HOW THE ISSUE HAS
BEM HANDLED TO DATE.

3.) WHEN CHARGE QUESTIONED HOW THE GOOR VILL MAKE UP

Wi0=199803082069 088783

FOR REVENUES LOST THROUGH THE PROPOSED CHANGES IN THE
CUSTOMS REGIME, TORIBIO RESPONDED THAT THE GOVERNMENT
BELIEVES IT WILL MAKE THEN UP THROUGH THE PROPOSED
INCREASE OF THE ITBIS TAX ROCAL VAT TAX FROM 8 TO 12
PERCENT AND AN ACCOMPANYING REDUCTION IN TRE HUMBER OF
EXENPTIONS MOW ALLOWED UNDER THE TAX CODE.

DEST

4, (C) TORIBIO RAISED THE GODR’S NOW FAMILIAR COMPLAINT
ABOUT THE BURDN OF FOREIGN DEBT PAYMENTS. HE ADMITTED
TO CHARGE: HOWEVER. THAT THIS WAS MORE A
“PAILOSOPHICAL” ISSUE WITH THE USG AND THAT THE GOORS
COMPLAINTS WERE MORE AIMED AT THE IFI‘S.

‘SHITH ENRON
5. (0) TORIBIO ALSO RAISED THE ISSUE OF GOOR
DISSATISFACTION WITH THE PERFORMANCE OF INDEPENDENT
POWER PRODUCER SMITH ENRON (A 18S MEGAWATT COMBINED
CYCLE PLANT IN PUERTO PLATA 1S A JOINT VENTURE BETWEEN
ENRON CORP. AND SMITH COGENERATION) UNDER THE TERMS OF
ITS CONTRACT WITH THE GODR OTE: SINCE IT STARTED
OPERATION, THE PLANT HAS EXPERIENCED CONTINUING
DIFFICULTIES IN MEETING ITS CONTRACTUAL OBLIGATIONS
REGARDING MINIMUM POWER GENERATION LEVELS). TORIBIO
COMMENTED TRAT THE GODR HAD ASKEO THE INTERNATIOKAL
FINARCE CORPORATION (IFC) “TO FOLLOW THIS PROBLEM. ~
TORIGIO ALSO SPECULATED THAT ENRON WOULD NOT WANT T0
HAVE ITS INSTITUTIONAL IMAGE BESMIRCHED BY THE ON-GOING
PROBLEMS WITH THE PLANT (NOTE: TORIBIO’S COMMENT IS IM
LINE WITH A LETTER DATED JANUARY 6 PASSED TO THE
EMBASSY AND FAXED TO EB/ESC/IEP/EPC AND ARA/CAR IN
WAICH CDE REQUESTS A MEETING WITH SENIOR ENRON
WANAGEMENT CONCERNING THE CONTINUING PROBLEMS WITH THE
PLANT). WATT.

ar

10411

FASE

WKN

CANFINENTI AL

00500000000793

DW

30/19332


IMMED | ATE

_ CONFIDENTIAL

DEPT TREASURY COMCEN
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PAGE 81 W1D=19973456128S 667617

CAVEAT IS) =
WAROLE WIA

ACTION = (URSYEPO C1) LDC (1) 1DD (1) e INL AL) «ATF AND ITT (1100 Qe,

SEN I+)
CRC = BF

00 RUEATRS

DE RUEHDG $6637 3451343

INY Cece 22H

0 1113432 DEC 87

FM AMEMBASSY SANTO DOMINGO

TO RUEHC/SECSTATE WASHOC IMMEDIATE 6844
UFO RUEHPU/AMENBASSY PORT AU PRINCE @51S
ar

CONF IOENT IAL SANTO DOMINGO 206637

€.0, 12958: DECL: 12/18/2082
TAGS: ENRG: DR
SUBJECT: ANOTHER CDE CLAIMANT ISSUES SHUTDOWN HOTICE

1, @) CLASSIFIED BY: EDWIN CUBBISON: CHARGE? REASON:
L$ ®)

2 f(b)(6)] xs
CORPORATION: OWNER AND OPERATOR THROUGH AES AURORA
DOMINICAN POWER PARTNERS (PP) OF TRE 283 MEGAWATT LOS
MINA POWER PLANT: CONTACTED EMBASSY LATE ON DECEMBER 1B
TO INFORM US THAT: FOLLOWING RECEIPT OF A LETTER THIS
WEEK FROM ITS FUEL SUPPLIER: SHELL» DPP HAS ALSO
FORMALLY NOTIFIED CDE IT WILL SHUT DOWM OPERATIONS IF
PAYMENT OF [(b)(4)] +S NOT RECEIVED BY DECEMBER
n

{(b)(4)]
[(b)(4)]

AS NOTED
ABOVE. ROMEVER, LETTER GIVES CDE UNTIL

DECEMBER 22 TO MAKE TRE PAYMENT.

HID= 199734581255 61917 1/t4167

{(b)(4)]

TW) POST aS FAXED COPIES OF OPP [(b)(6)]

LETTER TO ARA/CAR AD EB/ESC/IEP/EPC.
THIS DEMAKD 1S MOT YETPUBLIC IM SANTO DOMINGO. WHERE
THE PRESS 1S STLL DWELLING OM THE CDE SHITH-ENRON
PAYMENT, VE HAVE KO CONFIRMATION THAT THAT PAYMENT HAS
BEN RECEIVED. CUBBISON
Br
46637
ero
nt

CONFIDENTIAL

00500000000796


PA strategic interest In assessing this funding request, it is important to appreciate the
significance of the Palestinian Authority’s strategic interest in the project’s success: The
economic need for a power plant in Gaza is great. Gaza is currently dependent upon the
Israeli Electric Company for all of its energy requirements. The power supply is
intermittent, and there are many hours each day during which no electricity is available.
This situation renders it difficult for meaningful commercial growth to occur. The Gaza
Power Plant Project will allow for a clean, reliable, and efficient source of energy that
will be the comerstone for the much needed industrial development of Gaza, and the
project will improve the quality of life of Palestinians in Gaza.

In this context, it is also important to note the Palestinian Energy Authority’s four-year
history of timely payments to the Israel Electric Company for its power purchases (which
are more costly than locally produced power). These timely payments continued even
during the years of prolonged border closures between the West Bank/Gaza and Israel,
demonstrating the Palestinian Authority's commitment to ensure the availability of
electricity in Gaza.

The PA has also held out this project as an example of the stable business environment
growing in-Gaza and the West Bank. Recognizing that the economic growth of the area
depends upon direct investment and the active engagement of foreign companies and
governments, the PA intends for the Gaza Power Project to be the archetype for future
infrastructure development. Chairman Arafat is aware that the success or failure of this
highly visible project will impact the flow of capital and other assistance to the area.

In conclusion The PA views the Gaza Power Project as vital to its future growth.
Providing power to its people and presenting its economy in a positive light, the
Palestinian government is committed to seeing this project move forward to a successful
conclusion. Efforts to increase transparency and to decrease corruption in all commercial
government activities are paramount to succeeding in these goals. The PA continues to
demonstrate its commitment to this project with both economic and legal reforms. In
light of the above, OPIC may conclude that the Palestinian Authority 1) is committed to
the success of this project and 2) will enforce appropriate levels of transparency to ensure
the success of the project.

U.S. Government Support

Significant foreign policy objectives As the Middle East peace process moves ahead, it
is crucial for the U.S. government to demonstrate to the Palestinians the fruits of peace.
Economic development, in particular, is critical to the long-term viability of any peace
agreement reached between Israel and the Palestinians: support for the agreement must
come from the people as well as the government. Projects like the Gaza Power Plant
allow the “men on the street” to see tangible improvements in their daily lives.

In this respect, OPIC is set to play a significant role in the execution of our government's
regional Middle East policy. By pledging $125 million in credits for the West Bank and
Gaza in 1993, OPIC committed its program to the U.S. pledge for Palestinian assistance.

SENSITIVE BUT UNCLASSIFIED

00100000000316


IMMEDIATE

PAGE 62 OF 82 WND=199824602197

{(b)(1) , (b)(4)]

USDOC FOR IL34/YSFCS/O10/WH/RD
USDOC FOR 4322/1TA/1EP/WH/ONCE/SIECEL MAN

€.0. 12958: DECL: 69/63/2003
TAGS: ENRG EINV PREL OR
SUBJECT: SHITH ENRON MAKES A DEAL?

REF; SANTO DOMINGO 353

{(b)(1) , (b)(4) , (b)(6)]

CONFIDENTIAL

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

40826 03/21382 M1D=199824602197 040826 03/21382

{(b)(1) , (b)(6)]

VaAIT

14388
1083
NNN

CONFIDENTIAL

00500000000758


ma=—s— Kosmas

IMMED | ATE UNCLASSIFIED

DEPT TREASURY COMCEN
PH 622-2222 RM 1121/MT

PAGE 82 OF 82 MiD=199988200845 7316? DNL NID=199908280845 oT wuUt
PRESIDENT HIMSELF. IM THE MEANTIME, THE AMBASSADOR =~ AT LEAST MOT YET. THE SCHEDULED HIGH-LEVEL MEETING
ENGAGED PRESIDENTIAL ADVISOR IVICA PASALIC ON THIS MAY GE ABLE TO ACCOMPLISH JUST THAT -- ESSENTIALLY) THE
ISSUE GYARCH 18-19). PASALIC UNDERSTOOD HOW THE GAS A BRUSHING ASIDE OF THE OPPOSITION. IF SOs THE DRAFT PPA
PRICE PLAYS INTO THE OVERALL FINAL COST/PRICE STRUCTURE ~ WILL BE INITIALLED BY WEEK'S END. IF THE MEETING IS
AND THE NEED TO OBTAIN THE GAS PRICE REDUCTIO FROM NOT SUCCESSFUL» ENRON MIGHT HAVE TO DECIDE WHETHER TO
GAZPROM GEFORE MAKING FINAL CALCULATIONS. HILE HE PURSUE THE PROJECT FURTHER OR WITHDRAW. END COMMENT,
EXPRESSED BOTH HIS AND THE PRESIDENT'S SPPORT FOR THE
PROJECT: PASALIC ALSO INDICATED TH DIFFICULTY IN (ORIGIN: USFCS/HUGHES)
OVERCOMING OPPOSITION BASED OM ARGMEMTS GF EXCESSIVE
PRICING. MONTGOMERY

or

41323

15Fo
6. —(SBU) PASALIC AGREED TO ORGANIZE A HIGH-LEVEL NRAN

MEETING BETWEEN TRE GOC AND ENRON THAT WOULO ONCE-AND-
FOR-ALL RESOLVE THESE QUESTIONS. THE AMBASSADOR
INSISTED ON TWO COMMITMENTS FROM PASALIC REGARDING THIS
MEETING. FIRST: HEP MUST DISCUSS SPECIFICS RATHER THAN
SPEAK IM GENERALITIES OTHERWISE ENRON WOULD BE TAYING
TO RESPOND TO A MOVING TARGET. SECOND: THE OUTCOME OF
THIS MEETING MUST RESULT IM A FINAL DECISION. IN OTHER
WORDS: THERE SHOULD BE MO NEED FOR MORE GOVERNMENT
REVIEWS/APPROVALS (THIS WOULD ONLY OPEM THE DOOR 70
ADDITIONAL VACILLATION), PASALIC ACCEPTED THESE
POINTS.

7. (SBUD IN A SUBSEQUENT CONVERSATION WITH ENRON'S
JOSEPH SUTTON LATER ON MARCH 19+ THE AMBASSADOR
STRESSED THE NEED FOR SUTTON’S PERSONAL PRESENCE AT THE
MEETING. THE AMBASSADOR ALSO SUGGESTED THAT ENRON
REQUEST THE PRESIDENT 10 SELECT A TRUSTED ADVISOR WHO
WOULD REPORT DIRECTLY BACK TO TUDJMAN ON THE
TOWE/CONDUCT OF THE MEETING. TRE AMBASSADOR WAS
INFORMED THE NEXT DAY BY TUOJMAN HIMSELF THAT PRIME
MINISTER MATESA BAS BEEM APPOINTED TO PARTICIPATE IN
THE MEETING.

8. (SBU) POST REMAINS CONVINCED THAT THE PRESIDENT IS
COMMITTED TO THE SUCCESSFUL COMPLETION OF THE ENRON
OEAL, IN HIS MARCH 11 MEETING WITH S/R GELBARD.
TUDJMAM EXPRESSED HIS SUPPORT FOR THE PROJECT. AGAIN
ON MARCH 2G+ TUDJMAN PULLED THE AMBASSADOR ASIDE FROM
THE MEETING WITH SFOR COMMANDER GENERAL MEIGS AND
STATED (WITH STRONG PHYSICAL GESTURING) THAT TRIS OEM
WILL GO THROUGH.

9. SBU) THIS HAY BE THE PRESIDENT'S Witt BUT IT IS
‘ALSO A FACT THAT HEP CONTINUES TO OBSTRUCT. TRE GAP
BETWEEN THE UPPER AND LOWER LEVELS HAS NOT BEEN BRIDGED

UNCLASSIFIED
, 0500000000552


SENSITIVE BUT UNCLASSIFIED

INDIA
(S in thousands)

Account FY 2001 Enacted FY 2002 Request

Rationale for prioritization - India has offered the U.S full cooperation and logistical
support, to include overflight, refueling and turnaround, access to ground facilities,
seaports and airports, in addition to the use of Indian soil for staging and transit,
including strike aircraft, ground forces, naval units and other combat assets. Foreign and
Defense Minister Jaswant Singh publicly confirmed India's unprecedented offer of
support on September 14, saying India was willing to provide logistical support to and
serve as a staging area for U.S. military forces. India is also a front-line state grappling
with terrorism in Kashmir and is concerned that U.S efforts to include Pakistan in the
coalition will be at the expense of its new, much broader and deeper relationship with the
U.S. The A key GOI priority, nuclear-related (Glenn Amendment) sanctions against
India were lifted on September 22, thus allowing for broader bilateral and multilateral
economic engagement.

Economic and Development Assistance - India received approximately $5 million in
ESF funding in FY01, dedicated primarily to financial markets reform. $7 million has
been requested for FY02. Additional funds would focus on economic growth assistance,
agricultural and food security, good governance and basic education. $58 million is
requested for FY02 to support women's empowerment, child survival, family planning,
HIV/AIDS, energy and environment and financial markets programs. Current
supplemental requests being discussed do not envision an increase in DA.

Military/Security Assistance - India receives U.S. grant security assistance in the form
of IMET. India received $498,000 in FYOL The Department requested $650,000 for
FY02 and PM has recommended that India receive $1 million in IMET funds in FY03.
FMF awaits reconstitution at the bilateral Defense Policy Group.

Humanitarian Assistance - Food Assistance -- India receives food assistance under
USDA's 416(b) program. 20,000 MT of 416(b) food aid has been approved for FYO1.
$64 million of Title II food aid has been approved for India in FY01. In FY02, we are
requesting $80 million. We prefer OMB approval of additional Section 416(b) resources
first, and Title II resources second.

Trade Options/Tools - The U.S. absorbs 23% of India's exports ($10 billion). A WTO
member, India is our fifth largest GSP beneficiary. Although India had previously lost
half of its GSP access due to IPR concerns and has exceeded the program's competitive
need limits for some products, a substantial portion of these benefits have now been
restored. USTR Zoellick announced a $540 million non-IPR-related GSP package in
August. India has a textile quota agreement with the U.S. covering $2.7 billion in exports

SENSITIVE BUT UNCLASSIFIED

00500000002345


anae Sttassanan
PRIORITY CONFIDENTIAL Crven
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PAGE G1 OF 82 De 199622801124 020848 15/1502 W10=199622891128 029348 15/15882
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CONFIDENTIAL Section a1 oF a2 naruto onn6a5/

JOHANNESBURG FOR FCS MC ARNOLD
DOE FOR BOBBISH; DOC FOR RODGERS

£0, 12358: DECL: 88/24/05

TAGS: BEXP. EFIN» ECON) PCO MZ» SF

SUBJECT: WHAT NEXT OW THE ENRON PANDE GAS DEAL
REF: MAPUTO 3824

CLASSIFIED BY CHARGE MIKE MCKINLEY, EMBASSY MAPUTO.
REASONS 1. B AND D. PLEASE STRICILY PROTECT
PROPRIETARY |NFORMATION,

1, (C1 THE AUGUST $ SIGNING OF THE HEAIS OF AGREEMENT
BETMEEN SOUTH AFRICA’S IDC+ ENRON. AND MOZAMBIQUE’ S
ENH CLOSED ANOTHER CONTENTIOUS CHAPTER 'N THE CNGOING
NEGOTIATIONS OVER PANDE GAS. IT WAS A CLOSE THING,

((b)(1)]

((b)(1)]

4. AC) THERE ARE ACTUALLY A NUMBER OF ORE BODY
ALTERNATIVES TO PHALABORWA LOCATED INSIDE SOUTH
AFRICA, AS FOR ALTERNATIVES TO ISCOR AS AN OPERATING
PARTNER, ENRON 1S GUIETLY TALKING TO MAJOR JAPANESE
COMPANIES THAT COULD DOUBLE AS CONSUMERS AND OPERATORS
OF THE PLANT IF ISCOR OPTS OUT OR FOR A MINORITY
POSITION. THERE ARE ALSO [NDICATIONS THAT OTHER
ECONCHIC ACTORS ON THE SOUTH AFRICAN SCENE MAY BECONE
INTERESTED IN AN EQUITY STAKE IN THE CARBIDE PLANT IF»
AS EXPECTED: THE FEASIBILITY STUDY POINTS TO THE
COMMERCIAL VIABILITY OF THE PIPELINE. FINALLY) THERE
ARE A NUMBER OF ANCILLARY USES FOR THE GAS THAT ENRON
1S CONSIDERING INCLUDING SALES TO A SASOL -PROPOSED
PHOSPHATE/AMONIA PLANT IN MAPUTO.

{(b)(1)]

5. (Ch) ALOT 1S RIDING ON THE RIGHT OUTCOME TO TRE
FEASIBILITY STUDY. BUT WITH ENVIRONMENTAL CONCERNS
ABOUT THE USE OF COAL GROWING INSIDE SOUTH AFRICA:
WITH SASOL AND JOURDAN UNABLE TO ENTICE NORSK HYDRO
(CR ANYONE ELSE) INTO A CHALLENGING BID FOR PANDE GAS»
ANO WITH MOZAMBIQUE INCREASINGLY AWARE THAT ENRON IS
THE GEST OPPORTUNITY TO MARKET PANDE GAS IN THIRTY
YEARS, THE PROSPECTS FOR A DEAL LOOK BETTER TODAY THAN
THEY DID SIX MONTHS AGO. THERE 1S ALSO WIDER
COWPRCIAL INTEREST IN UTILIZIG THE GAS THAN EVEN SIX
WONTHS AGO» AND SOME OF THE POLITICAL RESISTANCE TO
“THE DEAL ON BOTH SIDES OF THE BORDER 1S FADING,

6. tC) ENRON IS ALSO LEARNING TO

YARKET ITSELF. 11S

IMAGE PROBLEMS FROM BOLIVIA TO INDIA ARE A CONTINUING
PROBLEM: AND WITH GOOD REASON. THE SIGNING HERE ON
AUGUST $ WAS THE FIRST OCCASION IN TWO YEARS OF
NEGOTIATIONS THAT ENRON BOTHERED TO PUT TOGETRER A

CONFIDENTIAL

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DEPT TREASURY COMCEN Q
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PAGE BL OF 2 mais = 27/23211
CAVEAT (S) =

HANDLE VIA

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USDOC FOR 3134/USFCS/O10/MH/RD
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€£.0, 12958: OECL: 11/27/2083
TAGS: ENRG EIMV PREL OR
SUBJECT: PRESIDENT SAYS COE CAPITALIZATION IS ON

1, @) CLASSIFIED BY ECO/POL COUNSELOR PAUL LARSENS
REASON: 1.5 OD

2. WG) SUMMARY; PRESIDENT FERNANDEZ HAS PUBLICLY
CONFIRMED THAT THE CAPITALIZATLON OF THE STATE-OWNED
CORPORACION DOMINICANA DE ELECTRICIDAD iCOE) WiLL GO
FORWARO. THE BIDDING OK THE DISTRIBUTION AND THERMAL
GENERATION UNITS WILL TAKE PLACE ON DECEMBER 17 AND 21
RESPECTIVELY. THE INDEPENDENT POWER PRODUCERS (IPPS)
CONTINUE TO NEGOTIATE WITH THE COMMISSION OVERSEEING
THE CAPITALIZATION (CREP), BUT THEY ARE CLOSER TO
ACCEPTING THE GODR’S PROPOSAL THAT THEIR CONTRACTS BE
ASSIGNED TO THE CDE/HYORO COMPANY FOLLOWING
CAPITALIZATION WHILE THEY ARE PRID FROM AN ESCROW

wea. ()(4)]

END
SUMMARY.

3, W) SPEAKING OM NOVEMBER 19 AT THE INAUGURAL SESSION
OF THE 29TH MEETING OF ENERGY MINISTERS OF LATIN
AMERICA AND THE CARIBBEAN, PRESIDENT FERNANDEZ
‘ANNOUNCED THAT THE CAPITALIZATION OF CDE’S DISTRIBUTION
‘AND THERMAL GENERATION UNITS WILL TAKE PLACE OW
DECEMBER 17 AND 21 RESPECTIVELY, HE ALSO SAID THE GODR
WILL ASSUME RESPONSIBILITY FOR COE’S DEBT TO
MULTILATERAL ORGANJZATIONS WHILE LEAVING THE CDE
SUCCESSOR COMPANY TO COVER THE CDE DEBT 10 THE IPP'S

mid=199833182{78 ness
AND OTHER CREDITORS. THE PART OF HIS SPEECH THAT
GARNERED MOST ATTENTION IN THE DOMINICAN PRESS WAS AN
ANNOUNCEMENT THAT 7, O08 COE EMPLOYEES WILL BE LAID OFF
JN JANUARY. ALTHOUGH HE EXPLAINED THAT MOST WILL BE
REHIRED BY THE CDE SUCCESSOR COMPANY OR RELOCATED
ELSEWHERE WITHIN THE PUBLIC SECTOR,

0/2210

BACKGROUND

4. WW) COE’S THERMAL GENERATION AND DISTRIBUTION
CAPACITY WILL BE SPUN CFF INTO FIVE DIFFERENT COMPANIES
(TWO GENERATION AND THREE DISTRIBUTION). CDE WILL
CONTINUE TO EXIST AS A LEGAL ETITY OPERATING THE
‘STATE-OWNED HYDROPOWER PLANTS. NOTWITHSTANDING CLAUSES
IN THE CONTRACTS OF AESDOMINICAN POVER PARTNERS AND
‘SMITH-ENRON (THE TW LARGEST PPS) THAT IN THE EVENT OF
THE SALE OF DE ASSETS THEIR CONTRACTS WOULD BE PASSED

“TO THEBUYERs THE CREP INFORMED THE (PPS IN OCTOBER

THAT THEIR CONTRACTS WILL BE ADMINISTERED THROUGH
CDE/HYORO FOLLOWING CAPITALIZATION. THE CREP PROPOSED
THAT THE MEW DISTRIBUTION COMPANIES @ISCOS) PAY INTO
AN ESCROW ACCOUNT FROM WHICH PAYMENTS FOR CURRENT
ENERGY SALES AND THE DEBT WIL( GE MADE TO TAE 1PPS,
THE CREP SUGGESTED THAT THE DEBT BE PAID DOWN OVER 2-3
YEARS.

* [(b)(4)]

THE PPS PROVIDED A PROPOSED
MOUs COPIES OF WHICH HAVE BEEN FAXED TO ARA/CAR AND
EB/ESCs WHICH WAS TO BE DELIVERED TO THE CREP LATER THE
SANE DAY. TEE CREP WAS SCHEDULED TO DISCUSS IT THE
WIGHT OF NOVEMBER 25 AND BRIEF PRESIDENT FERNANDE? OW
THE 26TH.

6, Cb THE HIGHLIGHTS OF THE IPP PROPOSAL INCLUDE:

{(b)(4)]

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| SENSITIVE

Ea 12958: AYA
V TAGS: EINWe BEXPr ENRG PREL: KP
E SUBJECT: PARTY LEADERS ENDORSE ENRON PROJECT

REF: KATHMANDU 08167

1, THIS CABLE CONTAINS PROPRIETARY INFORMATION,
PLEASE PROTECT ACCORDINGLY.

2, (G30) SUMMARY _LEANERS OF NEPAL'S TWO LARGEST
BaRTTES HAVE RECENTLY MADE CRABAIGN STATERENTS——_
SUPPORTING THE DEVELOPMENT OF THE LO. 808 MEGAWATT
KARWALI-CHISAPAN| HYDROELECTRIC PROJECT BY ENRON...
THE STATEMENTS: BY TWO FORMER PRIME ui
COME IRN TH TAWARD OF A SURVEY
LICENSE TO ENRON REMAIN GOOD: REGARDLESS OF wit CH
PARTY FARES BEST IN THE UPCOMING MAY 1989
PARLIAMENTARY ELECTIONS, ENRON 1S EXPECTED 0
RESUBMIT ITS SITE SURVEY LICENSE APPLICATION FOR
THE PROJECT AFTER IT COMPLETES A REVIEW OF ITS
REGIONAL POWER DEVELOPMENT STRATEGY. END
unmnny,

3.) FORMER NEPAL CONGRESS PRIME MINISTER SHER
BAHADUR DEUBA AND FORMER COMMUNIST PARTY OF NEPAL
= UNITED MARXIST-LENINIST QML) PRIME MINISTER

es

CAPACITY IM RECENT CAMPAIGN STATEMENTS IN THE
REGION, PRESS REPORTS LAST WEEK QUOTED ADRIKARY
AS STATING SPECIFICALLY THAT THE UML WOULD ©
APPROVE ENRON'S PROPOSAL TO DEVELOP THE 1880
NEGAWATT KARNALI-CHISAPAN! PROJECT. DEUBA WAS
QUOTED IM “THE KATHMANDU POST" APRIL 18 SAYING:
“HF WE SUCCEED IN DEVELOPING THE KARNAL| PROJECTS
VE CAM END POVERTY AND UNEMPLOYMENT" 1H NEPAL.

4, (BU) ENRON: MEANWEILEs HAS NOT YET
RESUBMITTED THE SITE SURVEY LICENSE REQUEST IT
WADE IN JANUARY 1999 GREFTELI. WHICH THE
GOVERNMENT OF NEPAL ASKED ENRON TO REVISE TO
CONFORM WITH THE TECHNICAL SPECIFICATIONS OF
NEPAL'S ELECTRICITY ACT. ENRON OFFICIALS HAVE
INFORMED POST THAT THE COMPANY 1$ CURRENTLY
EVALUATING ITS POWER DEVELOPMENT STRATEGY FOR THE
ENTIRE SOUTH ASIAN REGION: AND WILL DECIDE
SHORTLY HOW THE KARNALI PROJECT FITS INTO THAT
STRATEGY.

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