Public International Bid to Promote Private Investments in The

REPUBLIC OF PERU

BIDDING DOCUMENTS:

Public International Bid to Promote Private Investments in the

“Quillabamba Thermal Power Station” Project

December 11, 2014

Important: This is an unofficial translation. In case of divergence between the English and Spanish text, the version in Spanish shall prevail
TABLE OF CONTENTS

1. / General / Page
1.1Purpose of the Bid
1.2Definitions.
1.3Powers of the Committee.
1.4Limitation of Liability
2. / Participation in the Process.
2.1Legal Representatives.
2.2Authorized Agents.
2.3Inquiries and Suggestions to the Bidding Documents and versions of the Contract.
2.4Challenges.
3. / Qualification.
3.1Requirements.
3.2Contents of the Envelope.
3.3Procedure.
4. / Submission and Assessment of Proposals.
4.1Contents of the Envelopes.
4.2Procedure.
5. / Bid Closure.
5.1Procedure.
5.2Non-compliance with Requirements.
6. / Final Provisions

Forms

Form No. 1 / Qualification Application
Form No. 2 / Guarantee of Validity, Validity Term and Seriousness of the Proposal
Form No. 3 / Creation of a Consortium
Form No. 3-A / Creation of a Bidder’s Consortium.
Form No. 3-B / Modifications to the Shortlisted Consortium.
Form No. 4 / Letter of Submission of a Proposal
Form No. 5 / Guarantee of Challenge to the Award

Attachments

Annex 1 / Bid Schedule.
Annex 2 / Definitions.
Annex 3 / Qualification Requirements
Annex 4 / Method to Determine the Best Proposals.
Annex 5 / Closure Procedure.
Annex 6 / List of Banks and Insurance Companies
Annex 7 / Contract for the Supply of Spinning Reserve
Annex 8 / Investment Commitment Contract
Annex 9 / Contract of Assignment of Contractual Position for the Supply of Natural Gas

Bidding Documents

1.GENERAL

1.1.Purpose of the Bid

The PROINVERSION Committee in Energy and Hydrocarbon Projects (PRO CONECTIVIDAD) (the “Committee”) has announced a Bid to choose an Investor to design, finance, build, operate and maintain a 200 MW single-cycle thermal power station (rated capacity, with an admissible margin of +/-20%) that uses natural gas as fuel. The station will be located in the city of Quillabamba, the capital of the province of La Convención, in the Region of Cusco. A portion (to be defined) of the energy generated in the power station will be supplied to the National Electric Power Grid (SEIN), as provided for in the Contract.

The Bidding Documents and Applicable Laws, as defined below, will govern the Bid and the Contract. Without admitting proof to the contrary, any participant in this process will be deemed to be aware of the Applicable Laws.

Under paragraph c) of Article 2 of the Legislative Decree No. 674, which provides for different modes of participation for private companies, the following contracts will be entered into with the Investor:

• Investment Commitment Contract, with the Ministry of Energy and Mines.
• Contract for the Supply of Spinning Reserve, with the Ministry of Energy and Mines.
• Contract of Assignment of Contractual Position for the Supply of Natural Gas, with PROINVERSION.
• .Definitions

In these Bidding Documents, the terms below will have the meanings specified in Annex 2.

Any references made within this document to any “Section,” “Subsection,” “Paragraph,” “Form,” and “Annex” should be interpreted to be respectively made to the sections, subsections, paragraphs, forms and annexes of these Bidding Documents, unless otherwise provided for.

The expressions in singular comprise in their case, the plural and vice versa. The terms in capital characters included in these Bidding Documents that are not expressly defined in them are referred to the Applicable Laws, or to terms that are usually written in capital letters.

1.3.
Powers of the Committee

1.3.1The Committee is empowered to promote, schedule, regulate, amend, guide, supervise, control and prepare all the provisions that may be relevant or deemed necessary for the execution of the Bid, to solve all matters not included in the Bidding Documents or the Applicable Laws and, in general, to exercise all the other powers granted by the Applicable Laws.

1.3.2The Committee may modify the terms established in these Bidding Documents or in the Schedule, postpone and cancel the Bid, even after the granting of the Award, until no later than the scheduled Closure Date. The Committee will not assume any liability as a consequence of such decisions.

1.3.3If, at any time, the Committee deems necessary to clarify, amend or complement the Bidding Documents, it will issue a Notice for this purpose. This Notice will be delivered to all the Purchasers and Bidders, as applicable. Notwithstanding, the Notices will be available in the PROINVERSION website (

1.3.4The submission of the Qualification Documents does not obligate the Committee or the Commission to declare the Purchaser eligible for the Bid, nor does the submission of a Proposal by the Bidder obligates the Committee to accept it.

1.3.5Unless specifically established otherwise in these Bidding Documents, the decisions made by the Commission, the Committee or PROINVERSION Board of Directors—as applicable—with regard to this Bid are final, will not result in a compensation of any kind and will not be subject of a challenge in any administrative, judicial or arbitration proceedings. Consequently, by participating in this Bid, any entity that falls under the scope of these Bidding Documents waives its right to file any kind of contestation against these decisions.

1.4.Limitation of Liability

1.4.1Purchasers and Bidders must decide to participate in this Bid based on their own research, studies, exams, surveys, economic calculations, financial calculations, visits, interviews and other data obtained from their own due diligence.

In the same manner, they will cover all the direct and indirect expenses or costs incurred with relation to the preparation and submission of their Qualification Application or Proposal. The Government of the Republic of Peru or any agency, entity or officer in it, the Ministry of Energy and Mining, PROINVERSION, the Committee, the Commission, and the advisors to the Committee will not be responsible in any case for these expenses or costs, regardless of the modality of the Bid or its results.

1.4.2The Peruvian Government or any agency, entity or officer in it, the Ministry of Energy and Mining, PROINVERSION, the Committee, the Commission, and the advisors to the Committee do not guarantee, expressly or implicitly, the completeness, integrity, reliability or truthfulness of the verbal or written information provided in the Bid.

In consequence, none of the Persons directly or indirectly participating in the Bid can attribute any responsibility to any of the parties mentioned above or to their representatives, agents or servants, for the use that may be given to such information or for any inaccuracy, insufficiency, defect, lack of updating or for any other cause.

1.4.3This limitation includes, to the broadest extent possible, all the information on the Bid that is effectively known, any unknown information and the information that should have been known at a given time—including any errors and omissions in it—by the Peruvian Government or by any of its agencies, entities or officers, PROINVERSIÓN, the Committee, the advisors to the Committee and the Commission. In the same way, this limitation of liability includes any information that is directly or indirectly provided and prepared by any of the parties above, or not.

The limitation of liability also includes any information available on the PROINVERSION website, as well as any information provided through Notices or any other means of communication, the information acquired during the visits related to the Public Bid and the information provided in these Bidding Documents.

1.4.4The submission of the Qualification Application or the Proposal, without any subsequent action, would imply the Purchaser or the Bidder’s full knowledge and acceptance of, and submission to all the provisions in the Bidding Documents, as well as its irrevocable and unconditional waiver, to the broadest extent allowed in the Applicable Laws, to its rights to initiate any action, counterclaim, exception, complaint, claim or request for compensation against the Peruvian Government or any of its agencies, entities or officials, the Ministry of Energy and Mining, PROINVERSION, the Committee, the advisors to the Committee and the Commission.

2.PARTICIPATION IN THE PROCESS

2.1Legal Representatives

2.1.1The Purchasers and Bidders will appoint up to two natural persons with a shared address in the city of Lima as its Legal Representatives, who will be empowered to act jointly or individually on its behalf in the Bid.

The powers granted to the Legal Representatives must include the capacity to sign, in the name and on behalf of their principal, all the documents required in the Bidding Documents, including powers to: (i) initiate challenge procedures as described in the Bidding Documents; (ii) participate in the Bid, and submit and undersign all the required information, including the Proposal, (iii) sign the Contract and conduct all the actions required for the Closing Date.

If the Purchaser or Bidder is a Consortium, the appointment must be made through the legal representatives of the members of the Consortium who have the powers to make this appointment. Such powers will be proven by submitting a copy of the power of attorney or other similar document, certified by a notary public or a consulate. Additionally, the Legal Representatives of a Consortium must also represent all the members of the Consortium.

2.1.2The granting of powers in Peru will be executed as a public deed or be stated in the notarized copy of the document of incorporation of the company that grants such powers.

A Power of Attorney of the Legal Representative outside Peru must be: (i) issued or legalized by a Peruvian Consulate; (ii) endorsed by the Ministry of Foreign Affairs of Peru, and (iii) if issued in another language, translated into Spanish; for this purpose, the Applicant or Bidder will attach an uncertified translation.

However, should the Purchaser, Bidder or the members of a Consortium come from a signatory of the “Hague Convention Abolishing the Requirement for Legalization for Foreign Public Documents” adopted on October 5, 1961 in the City of La Hague, The Netherlands, as approved by Resolution No. 29445 and ratified by the Supreme Decree Nº 086-2009-RE, it will be sufficient that these documents fulfill the conditions established in the convention above, provided that the corresponding country has not made an objection to the accession of Peru to such Convention.

Under no circumstance will it be required that, by the time of their submission, the Powers of Attorney for the Legal Representatives are registered with the Public Registry. However, the Powers of Attorney for the Investor’s Legal Representatives must be registered with the Public Registry before the scheduled Closing Date.

The appointment of a new Legal Representative, or his or her appointment, must be informed by the Committee and will be effective only after the date on which the Committee receives the documents that prove such appointment.

The Legal Representatives must observe the regulations established in section 2.2.4.

2.2Authorized Agents

2.2.1Every Purchaser or Bidder, as applicable, must appoint no more than two natural persons with shared address in the city of Lima as its Authorized Agents for Bid purposes.

The duly appointed Authorized Agents may act individually from each other, and not necessarily jointly. They will be the only individuals empowered by the Purchaser or Bidder (as applicable) to: (i) negotiate all types of matters with the Committee, with the exception of those pertaining exclusively to the Legal Representative under Section 2.1.1.; (ii) answer, on behalf of the Purchase or Bidder and with binding effect, all the questions made by the Committee; (iii) receive judicial and extrajudicial notifications; and (iv) apply for shortlisting and (v) submit Proposals.

2.2.2The appointment of Authorized Agents must be made by an uncertified letter issued by the Bidder or Purchaser, as applicable, stating that the powers listed in Section 2.2.1 are granted and including the following information: name, identity document number, shared address in the city of Lima, telephone numbers and email address. The letter will be deemed delivered on the effective date of receipt.

2.2.3Authorized Agents may be replaced at any time. In this event, or if a change of address, email address or telephone number takes place, the procedure described in Section 2.2.2 will apply.

2.2.4The notifications to the Purchasers of Bidder, as applicable, may be delivered to any of the Authorized Agents, by:

1. An email, in which case the notification will be deemed delivered on the date on which the email appears on the recipient’s inbox, or
2. A letter, delivered by a courier service or through a Notary’s Office, in which case it will be deemed delivered on the effective delivery date.

2.3Inquiries about the Bidding Documents and Suggestions about the versions of the Contract

2.3.1Purchasers or Bidders, as applicable, will be entitled to make inquiries on the Bidding Documents and make suggestions to the version of the contract, within the terms established in the Schedule, by letters written in Spanish to:

Manuel Suárez Mendoza

Commercial Project Manager

Av. Enrique Canaval Moreyra N° 150, Lima 27, Peru

Tel.:(511) 200-1200, Extension 1340

e-mail:

It is expressly stated that the Schedule dates in Annex 1 are referential. The Committee may change any of these dates byNotice.

2.3.2Any answers given by the Committee to the questions on the Bidding Documents will be submitted as Notices to all the Purchasers, without mentioning the name of the inquirer. After completing the Qualification stage, the answers to any inquiries and suggestions will be sent only to the Bidders. Without prejudice to the provision above, the Notices will be available in PROINVERSION website.

2.3.3All Purchasers and Consortium members will be entitled to hold meetings with the Committee members until the deadline for filing the Qualification Application; meanwhile, Bidders will be entitled to do so by the day before the date set for the submission of Proposals, in coordination with the Committee. After the Award is granted, the Awardees may request that meetings be hold to arrange for the Closure activities.

2.4Challenges

2.4.1Acts Subject to Challenge: Only the Award agreement may be subject to administrative challenge, provided that the intention to challenge it has been included in the respective minutes.

2.4.2Complaint: Any Bidder may file a Complaint with the Committee within eight (8) Days counted from the day after the date of the Award. The Committee will issue a decision on the complaint within ten (10) Days.

2.4.3Appeal: The Committee’s resolution may be appealed against before the PROINVERSION Board of Directors within three Days after the receipt of the Resolution that dismisses the complaint. The appeal against the Committee’s resolution will be decided by the Board of Directors of PROINVERSIÓN within thirty (30) Days after the date of filing of the appeal. This resolution exhausts the administrative procedures.

2.4.4Challenge Guarantee: No complaint will be deemed effectively filed or have any effect unless, within three (3) Days after the date of granting of the Award, the Bidder provides the Committee with a Challenge Guarantee issued according to Form 5 by one of the Banks and Insurance Companies listed in Annex 6.

This guarantee will be forfeited if the Committee declares that the Bidder’s complaint is not grounded or inapplicable and an appeal against such decision is not filed within the applicable term, or if the Governing Council of PROINVERSIÓN declares that the appeal is not grounded or applicable, as applicable.

If the challenge is deemed grounded, the Challenge Guarantee will be returned to the Bidder.

2.4.5After the terms to issue a decision provided in Sections 2.4.2 and 2.4.3, the complaint and the appeal, respectively, will be deemed to have been denied.

3.SHORTLISTING

The Shortlisting envelope will be delivered only in the Committee’s office, at Av. Enrique Canaval Moreyra N° 150, Lima 27, Peru, on the dates established in the Schedule and to an Authorized Agent or a Legal Representative. No documents forwarded by email, fax or any other means of communication will be received nor accepted.

Unless otherwise provided for in the Bidding Documents, the documents in the Qualification envelope must:

i)be delivered as one original and two copies, and their pages consecutively numbered.

ii)be signed by the Legal Representative or Authorized Agent, or initialed if a signature is not applicable, and

iii)be written in Spanish or files along with an uncertified translation into Spanish. If any discrepancy between the texts in the two languages is identified, the Spanish version will prevail.

3.1Requirements

To become a Bidder, the Purchaser must meet the financial, technical and legal requirements established in Annex 3.

3.2Contents of the Envelope

The Qualification envelope must include the following documents:

3.2.1Qualification Application (Form 1.)

3.2.2If the Purchaser is a Consortium, Letter of Creation of Consortium (Form 3) signed by the Legal Representatives of each one of the members of a Consortium, stating their intention to participate in the Bid jointly. One of the members must act as an Operator.

3.2.3Uncertified copies of the documents that demonstrate the capacity of the Legal Representatives of the Purchaser or the Consortium, and each one of the members of a Consortium, if applicable, as provided in Section 2.1. The registration of these powers of attorney must be made according to the provisions in Section 2.1.2.

3.2.4Uncertified copies of available audited financial statements (2013 and later) of the company or the consortium members whose figures are being used to demonstrate that the financial requirements are met (Annex 3). If the financial statements are included in the annual report, this document may be filed instead. In both cases the documents may be filed in the language they were issued in, together with a translation into Spanish.

If the financial statements or the annual report files are expressed in a currency other than US Dollars, the net equity and the total assets must be converted into US Dollars at the exchange rate published by the Superintendence of Banking, Insurances and Private Pension Funds effective as of the date of closure of the financial statements. This calculation must also be included in Form 1.

3.2.5An uncertified copy of the documents that unquestionably demonstrate that the technical requirements established in Annex 3 have been met.

3.2.6An uncertified copy of the payment voucher for the Participation Right. A Purchaser that decides not to participate in the Bid may assign its right to a member of its group or to a third party. For this purpose, the new Purchaser of this right must submit a document supporting the assignment of the right, signed by the assignor’s Legal Representative.

3.3Procedure

3.3.1The Purchaser together with the Commission will determine the date of submission of its Shortlisting envelope, within the term established in the Schedule.

3.3.2The Commission will receive and review the documents and will inform the Purchaser, within three (3) after the date of receipt of the Qualification envelope by PROINVERSION, of any faults or omissions that it may have found. The Purchaser will correct the fault or omission within the term established in the Schedule, under penalty of being disqualified from the Bid.