Aschach Power - Austria - Loan 0213 - P037355 - Public ...

THE WORLD BANK GROUP ARCHIVES

PUBLIC DISCLOSURE AUTHORIZED

Folder Title: Electric Power Project - Aschach Power - Austria - Loan 0213 - P037355 - Loanand Guarantee Agreements

Folder ID: 1516826

Project ID: P037355

Dates: 12/02/1958 - 12/02/1958

Fonds: Records of the Europe and Central Asia Regional Vice Presidency

ISAD Reference Code: WB IBRD/IDA ECA

Digitized: 11/20/2018

To cite materials from this archival folder, please follow the following format:[Descriptive name of item], [Folder Title], Folder ID [Folder ID], World Bank Group Archives, Washington, D.C., UnitedStates.

The records in this folder were created or received by The World Bank in the course of its business.

The records that were created by the staff of The World Bank are subject to the Bank's copyright.

Please refer to http://www.worldbank.org/terms-of-use-earchives for full copyright terms of use and disclaimers.

M

THE WORLD BANKWashington, D.C.

@ International Bank for Reconstruction and Development / International Development Association orThe World Bank1818 H Street NWWashington DC 20433

r

- 11827A1995-199 Other# 16 Box #193713B

Electric Power Project - Aschach Power - Austria - Loan 0213 - P037355 -Administration - Volume I

DECIASSIFIEDWBG Archives

PAT. No. USA 1480011MADE IN U S. A

- - 8d

US INOJ

tL8

January 28, 1964

Gentlemen:

Loan 213 AUA

We have received your letters of January 16, 1964 encloing

withdrawal application No. 179 and the revised List of Goods. We

are in agreement with the changes you made in the List of Goods

and we are returning a confirmed copy for your records.

Yours sincerely,

J. H. CollierDepartment of Operations

Europe

enclosure

Oesterreichische DonaukraftwerkeAktiengesellschaft

Hochhaus GartenbauParkring 12Vienna, Astria

IBRD

JHCollier :msc

cc: Mr. Wiehen (Legal)

OSTERREICHISCHE DONAUKRAFTWERKEA k f i e n g e s e I I s c h a f t

VorsItzar dos Aufschrates: Kommorzialrat Theodor CornyVorstand: Dir. Dipl. Ing. Hans Bhmer, Dir. Hanns Mosbauer

International lank forReconstruction and Developmnent

1818 77.1 Street, N

a s h i n g t o n 25, D.l.

AIR kAIL

11EGISTErED !

Hochhaus GartenbauIhr Zoichon Ihre Nachricht vom Unser Zoichon Wien I. Parkring 12

1ev/Tioa 1Tg .1.1964

B*r , ieltbankanleine II -Projekt Aschach

In der ieilae Uberreichen wir Ihnen unseren Abhebungsantrag

,r. 179 ..................... 6.S. 8,,57.948,82

betreffend die Inlands-Refinanzierung d.s ter der Kategorie II.

Laut Ihrem Shreiben vom 27.12.1963 :;ar ein Betrag von

337.67,15noch offen und daher zur Um,andlung inKategorie I1 und Abrufun, vorgesehen.

Diese Summr:,e ,ermindert sich per31.12.1963 mit Genehmigung Nr. 179(unser Abhebu;.ngsantra o. 178) um c 16.219,58

auf q. 321.45 9,57

welchen 3etraE wir nun in oben angefiuhrtem Gegenwert abrufen.

dir ersuchen un baldige Durchf-Uhrung und zeichnen

hochachtungsvoll

CS UUEICHISCHE DCHAUKRAFTdE EAktien-esellschaft

Beilagen

69 (Mosbauer) (iiesir7er

Tologrammanschrift: Fornruf: Fornschriber: Bankkontl: CredifansfoII-Bankverein Wien, Konto Nr. 26-28444

Donaukraftworke Wien 52 66 71 Soria Donukraft Wi n 1366 8Osforreichische LAnderbank Wien, Konfo Nr. 707.230Durchwahl DoKW KW Aochoch 02149 Postsparkessonkonto: 170.250

Kr Nr. 3 - 6000 - 7 / 62 DoKW ST Aschach 02444

6ch/6

OSTERREICHISCHE DONAUKRAFTWERKEA k t i e n g e s e II s c h a f t

Vorsitzer des AufsIchtsrates: Kommerzialrat Theodor CernyVorstand: Dir. Dipi. Ing. Hans B8hmer, Dir. Hanns Mosbauer

International iqank forIteconstruction and Development

1818 n. Street, L.i.

. a s h i n g t o n 25, D.C.

AIR hAIL

REGISTERED ! r a n s 1 a t i o n!

Hochhaus GartenbauIhr Zeichen 1hre Nachrlcht vom Unser Zeichen Wien I, Parkring 12

-ev/Wo ag

Rev/Wa Jan. 17,1964Befrfft:

Loan i1o. I 213 AUAProject Aschach

Enclosed please find our vithdrawal-Application

.o. 179 ........... .Austrian Shillings 2,)57'.948,82

concerning reim iaement of expenditures in -uctrian ohillings.

According to your letter of December 27,1963, the undisbursed

balance of our loan account totally amounted to a 337.679,15

which requested to change into Category 1I.

oith our dithdraval-Application 2r. 178(our aithdrawal-Authorization -r. 179 ofDecember 31,1963 another 16.219,52has been disbursed, so that the total un-withdrawn amounted is reduod to 321.459,57

de would be very much obliged if we could receive these funds

as soon as possible.

Very truly yours

0STERREICHISCHE DONAUKRAFT,1ERKEAktiengesellschaft

Enclosure

Telgrammanskriff: Fernruf: Fernschroiber: Bankkont": Creditanstalt-Bankverein Wien, Konto Nr. 26-28444

Donaukraftwsrke Wien 52 66 71 Saris Donankrft Y e. 1366 8 Osterreichische LAndorbank Wien, Konto Nr. 707.230Donaukraft Ybbs 029248Pssaksokno 7.5Durchwahl DoKW KW Aschach 02149 Poslsparkassenkonto: 170.250

Kr Nr. 3 - 6000 - 7162 DoKW ST Aschach 02444

OSTERREICHISCHE DONAUKRAFTWERKEA k t i e n g e s e I I s c h a f t

Vorsitzer do$ Aufsichfsrates: Kommerzialrat Theodor CornyVorstand: Dir. Dipl. Ing. Hans B6hmer, Dir. Hanns Mosbauer

International 3ank forReconstruction amd Develeopment

1818 H. Street, N.i.

d a s h i n g t o n 25, D.C.

LUFTPOST !

EINGESChRJIEBEN

Hochhous GarfenbauIhr Zoichen Ihr* Nachricht vom Unser Zeichan Wien I, Parkring 12

1ev/Ku Tag 16.1.1964

Berifft:

deltbankanleihe I1 213 AUAknderung der List of Goods

In der Beilage Ubermittel wir Ihnen den unterfertigten Gegen-

brief Ihres Schreibens vom 27.12.1963 betreffend die neue

List of Goods mit BerUcksichtigung der Tnderung, die sich in-

folge der zwischenzeitlich durchgef~ihrten Abhebung von

sfrs 69.987,50 im Gegenwert von US 9 16.219,58 mit Abhebungs-antrag 1cr. 178 (Abhebungsgenehmigung Nr. 179 mit 5ert 21.12.

1963) ergeben hat.

Uber den noch offenen Restbetrag auf unserem Anleihekonto

haben wir mit gleicher Post einen Abhebungsantrag an Sie ein-

gereicht.

Hochachtungsvoll

c' r IEICISCHE DC'AUKRAFT IE EA tiengesellschaft

Beilage

70 (11 .sbauer) (Wiesin -er)

Telogrammenschrift: Fornruf: Fornschrelber: Bankckontl: Creditanxtalf-Bankverein Wien, Konto Nr. 26-28444

Donaukraftworke Wien 52 66 71 Serie Oonaukruft Wien 1366 Ostarreichische Lnderbank Wien, Konfo Nr. 707.230Donsukraft Ybbs 029248

Durchwahl DoKW KW Aschach 02149 Postisparkassankonto: 170.250


OSTERREICHISCHE DONAUKRAFTWERKEA k t i e n g e s e I I s c h af t

VorsItzor des Aufsichtsrafes: Kommrsal.Irot Theodor CornyVorstand: Dir. Dipl. Ing. Hans Bthmer, Dir. Hanna Mosbauer

International Bankfor Reconstructionand Development

1818 H. Street, N.W.

W a s h i npt o n 25_ D.C, T R A N S L A T I 0 N

Hochhaus GartenbauIhr Zoichon Ihro Nachricht voes Unser Zeichen Wien I, Parring 1

Rev/Ku Tag 1/17/1964

BeMaft: Loan No. 213 AUAChange in the List of Goods

Enclosed please find our signed confirmation copy of yourletter of December 27, 1963 concerning the new List of goods.Our confirmation copy considers now our Withdrawal ApplicationNo. 178 (your Withdrawal Authorization No. 179, value 31.12.1963)covering sfrs 69.987,50 (US-Dollar-Eauivalent 16.219,58) whichdisbursement caused an increase of Quote for Goods to be imported(Category I) and reduced Quote for Goods to be purchased in Austriaas we have shown on reverse of our confirmation copy enclosed.

Today we are sending our final Withdrawal Application coveringoutstanding balances of our Loan account.

Sincerely yours

0STERREICHIS"HE DONAUKRAFT7ERKEAktiengesellschaft

TeIegravnmanschrft: Fernruf: Farnschreiber: Bankkonfi: Creditanstalf-Bankverein Wien, Konto Nr. 0-0353

Donaukraftworke Wien 52 66 71 Sori. DonaukrafY Wien 1366 OstrreichIche IAnderbank Wien, Konfo Nr 707.230Ourchwmhl DoKW KWAchach 02149 Postsparkassonkonto: 170.250

Kr Nr. 3 - 3000 - 12/61 DoKW STAschach 02444

C)*JewV4t

LNTERNATIONAL* BANK* -- -

INTERNATIONAL BANK FORm

RE CONSTRUCTION AND DEVELOPMTIENT(P1818 11 STREET,NV.

TELCPHONC ExECUTve 3-a.eo WASHINGTON 25, D. C. CA5LE ADDRESS-INTBAIAO

December 27, 1963

Ostcrrchiche DonaukraftwerkeA1~zic.:goollschaft

o:G..as Grc nb auP :::i; 12Vic:.aa 1, Austria

Loan 213 AUA - in thS List C2Goods

We refer to your letter of Decerber 2, 1963, in Uhich youC.-n adjustmant in ta List of Goods. The Bank has no

c;j::tioD to your request we. the List of Goods, as rovized,would therefore read as follows:

U. S. Dollars

I. Gods to be i!o1tzd 2,863,545.62Tubaines, electrical and mechanicalequipment, various machines, toolsand miscellaneous items

II. G to be archas:2 in Austria 18,437,679-11e..2z c-us gorx- paid for in the

currmzcy of the guarantor or acquiredwithin the territories of the guarantor

III. Interest and other charges 3,698,775.27

TOTAL 25,COW,000.--

Please confirm your agreement with the foregoing by signingthe attached confirmation copy of this letter and returning it to

us.

Yours et7.y.

S. R. Cope

Director of Cperatiocks

Eclosure Europe

CC'.~ ITlD:

CES2'3'IOI2F2:E DONAUIAKWv ,RKE G.

B~C~ Please see reversc,Dat

in US $

Goods to bee imported according to yourletter of December 27,1963 2,863.545,62

+ dithdrawal Application No. 178sfrs 69.987,50, US-$ equivalent + 16.219,58

final Quote 29. 6

o at egoryTII

Goods -o bee purchased in Austriaaccording to your letter of December 27,1963 18,437.679,11

- Iithdrawal Applicatior No. T78 16.219,58

final Quote 1 t 21.4 521j5

The foregoing figures, again revising the List of Goods-as agreed on thereverse side of this letter, were proposed by Oesterreichische DonaukraftwerkeAktiengesellschaft on January 16, 1964 and are hereby confirmed.

CONFIRXIED:

INTENATIONIAL BANK FORRECONSTR & -ND fNEVEOPMENT

ByDirector of Operations Europe

Dahte

January 28, 1964

December 27, 1963

esterreichische DonaukraftwerkeAktiengesellschaft

Hochhaus GartenbauParkring 12Vienna 1, Austria

Gentlemen:

Loan 213 AUA

We refer to your letter of December 2, 1963, in which yourequested a change in the List of Goods. The Bank has no objec-tion to these changes and we enclose a formal letter herewithfor your confirmation.

According to our record the undisbursed balances on theabove loan are as follows:

U. S. Dollars

Category I Goods to be imported 30,454.38Category II Goods to be purchased In Austria .04Category III Intdrest and other charges 36,224.73

Total undisbursed 337,679.15

The proposed changes will have the effect of increasing theamount available for withdrawal fram the Loan Account under Cate-gory II to the equivalent of US $337,679.15. We suggest that yousubmit an application for withdrawal for the equivalent in Austrianschillings for an amount amply sufficient to cover this sum.

Yours sincerelr,

S. R. CopeDirector of Operations

Europe

Enclosure

ESchaad:vmd'

cc and cleared: Mr. WiehenMr. PoveyMr. Piccagli/Mr. Finne

Oesterreichische DonaukraftworkeAktimigesellschaf t

Hoehhaub GartenbauParkring 12Vienna 1, Austria

5entlensns

Loan 213 AUA - Chpe in the List of Goods

We refer to your letter of December 2, 1963, in which yourequest an adjustmt in the List of Goods. The Bank has noobjection to your request and the List of Goods, az rea ved,would therefore read as follows;

U. S. Dollars

I. Goods to be iported 2,863,5h5.62Turiibiea, electrical And mchancalequipment, various machnes, toolsand misc"1eanou iteme

II. Gondr LO be chased in Austria 18,437,679.11Mi-r7Zlaneous goodi ,padf Or in the

currency of the guarantor or acquiredwithin the territories of the guarantor

III. Intrcst and other charg2es 698j77_5.

T CrAL 25,(O, Ow.-

?lease confira your ageemrAt uith the foregoing by sigiingthe attached confirtaati copy of this letter and returning it toUs.

Yours sixncerely,

ESehaad:vm; S. R. CopeDirector of Operations

6acloure Europe

COF I' MD I

OI,',Sr-TT'ICHISCnk DONAUKFAFTWMERTE A.'!.

ByDlat.________________

cc aM c4eared: Mr. Wiehen Mr. Piccagli/Mr. FieMr Povy~Y M.Pcal/r im

* Sch/5

OSTERREICHISCHE DONAUKRAFTWERKEA k f i e n g e s e I I s c h a f f

Vorsiter des Aufsichtsrates: Kommerzislrat Theodor CernyVorstand: Dir. Dipl. Ing. Hans B6hm r, Dir. Hanns Mosbauer

International Bank forReconstruction and Development

1b1 H. Street, A..

: a s h i n g t o n 25, D.C.

AIR MAIL

REGISTERED T r a n s 1 a t i o n

Hochhaus GartenbauIhr ZoIchan Ihro Nuchricht vomn Unser Zeichen Wien I, Parkring 12

Rev/IKu Tag 2.12.1963

Beriff: oan 4o. lB 213 A"A

Project AschachAdjustment in the List of Goods

Ne refer to ocr letter of 9/11/1963 concerning "Report of

Estimated Vit'draals" per September 15,1Q63 which informed

you that ve inted to request during December 1l63 for a new

adjustment in the existing List of Goods and that for such goods

in Categories I and III that have not been withdrawn until that

time. No,, we ,eg to give you our request as follows:

From the enclosed "Report of Estimated ;ithdraw.als" per December

15,1963 including estimated withdrawals in various currencies

we shall make till end of withdrawing period, you can see that

there remains in Category I an amount of about 8, 282.000,-- and

in Category III one of about f 36.000,-- available for change

into Category II. Reduction ii Category I is caused by delaying

some final payments after end of withdrawing period and placing

some orders not in due time. Amount not-withdrawn in Category

III is the difference between our estimates for disbursement of

interest and comission for period ended September 15,1963 and the

charging by the Bank according to effective withdra als.

Telgrammanschrift: Fernruf: Fornschrelber: Bankkontl: Croditansfalt-Bankverein Wien. Konto Nr. 26-28444Donaukraftwerke Wien 52 66 71 Soria Do nukraft Wien 1366 8 Osterreichische Landerbank Wien, Konto Nr. 707.230

Oonaukraff Ybbs 029248Durchwahl DoKW KW Aschach 02149 Posisparkassenkonto: 170.250


-2-

Therefore we beg your consent to our request of changing

amounts not-withdrawn until December 31,1963 from Catego-

ries I and III into Category II and to the requested Adjust-

ment in the List of Goods. Please disburseat the end of Decem-

ber 1963 or at beginning of January 1964 totals outstanding.

Our "Category Reference of the List of Goods Category II" we

sent to you with our Withdrawal Application No. 169 shows,

that balance of expenditures in Austrian Schillings is cove-

ring our present Application too.

As the amount we requested for disbursement at the end of the

year 1963 or at the beginning of the year 1964 can be given

to you exactly only after getting last Withdrawal Authoriza-

tion, it is not poible to submit now a separate Withdrawal

Application for Goods of Category II. In case you should need

it, we are of course ready sending that application in advance

but showing so only estimates as mentioned above.

Sincerely yours

OSTERREICHISCHE DONAUKRAFTWERKEAktiengesellschaft

FoRM No. 324 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(10-58)

QUARTnUY REPORT OF ESTIMATED WITHLIAWALS

(Expressed in thousands of U. S. Dollars)

Categ. I 2,802 Date: 12/2/1963Categ. II 18,100

Amount withdrawn through Application No. $ Categ. III 3,690 ?4,601 Loan No.: 215 AUA

Calendar Quarters Ending Annually Thereafter (Calendar Years) Interest and TotalCurrency of Supplying Other Charges Not Yet

Payment Country 19- 119199r99- 19- 19r Included in WithdrawnCounry 1 19I9~ 9 I19 I 19 & thereafter __the Loan

Appl. 172-177 Withdrawals

not yet disbursed until Dec.?1 63

Category I

Deutsche Marks Germany 2 2 4

Swiss francs Switzerland 36 17 53

Italian Lire Italy 16 - 16

Swedishkrones Sweden 8 8

62 19 81

Category II

Amount requested for change:

from Categ. I .................................. 282

from Categ. II ............................. 51

318 318

Undetermined Currencies

T 0 T A L S 62 337 399

(IMPORTANT: See over for NOTES ON THE PREPARATION OF THE QUARTERLY REPORT OF ESTIMATED WITHDRAWALS)

NOTES ON THE PREPARATION OF THE QUARTERLY REPORT OF ESTIMATED WITHDRAWALS

I. The Report is to be prepared in duplicate for each Loan separately and forwarded

to the Bank after the close of each calendar quarter (March 31, June 30, Septem-

ber 30, and December 31).

2. Estimated withdrawals from the Loan Account for the next five calendar quarters

and annually thereafter, with as much currency detail as is available, should be

shown for the entire amount of the Loan not yet withdrawn.

3. Where orders and contracts have not yet been placed, broad estimates of the rate

of withdrawal can be used. Where no currency information is available, the rela-tive amounts expressed in U.S. currency should be shown as "Undetermined Currencies."

4. Interest and other charges, if included in the Loan, should be segregated and

shown separately as "Undetermined Currencies" in the column entitled "Interest

and Other Charges Included in the Loan."

5. All amounts should be expressed in U.S. currency to the nearest thousand dollars.

The rate of exchange used in converting currencies other than dollars should be

indicated.

FORM No. 75 rNTERNATIUNAL BANK FOR(2.60) RECONSTRUCTION AND DEVELOPMENT

INTERNATIONAL FINANCE INTERNATIONAL DEVELOPMENTCORPORATION ASSOCIATION

DateROUTING SLIP

Oct. 7, 1963NAME ROOM NO.

1. Mr. Fjnne

2. -r

To Handle Note and FileAppropriate Disposition Note and ReturnApproval Prepare ReplyComment Per Our ConversationFull Report RecommendationInformation SignatureInitial Send On

RE

From

DIPL. ING. FRANZ HINTERMAYERWien 1., 1st October 1963

GENERALDIREKTOR DER OSTERREICHISCHENELEKTRIZITXTSWIRTSCHAFTS -AG. Am Hof 6A, Tel. 63-07-71

(VERBUNDOGESELLSCHAFT)BUNDESLASTVERTEILER

Ln

Mr. A.D. SPOITSWOOD

International Bank forReconstruction andDevelopment

1818 H Street N.W.

W a s h i n g t o n 25 D.C.

USA

Dear Mr. Spottswood,

may I express my sincere thanks to you and to Mr. FINNE for

your congratulations on the occasion of the first running of Aschach

alternator Nr 1 and its connection to the Austrian grid, a success

achieved 3 months ahead of schedule. I was glad to inform also

Minister Probst about your congratulations. As you know probably, the

3 other alternators will follow in intervals of about 2 months each,

so that the entire plant will be in full operation by ab. April 15th,

1964.

We hope that you and Mr. FINNE will be able to arrange a visit

at this largest power station existing so far on the Danube river at

the earliest suitable date. May I use this opportunity to thank again

both the World Bank and you personally for the Bank's financial assis-

tance in the development of our power economy.

Si erel Yours

PS: As printinE matter I'm sending to you separately two copies of anew booklet about Aschach station, which has been issued at theoccasion of its inauguration, one each for you and for Mr.NN.

aept~ezber 25, 1963

Dear Director Bohmer:

I very much appreciated receiving an invitation to

attend the inauguration of the hydroelectric plant at Aschach.

Unfortunately, the Annual leetings of the Boards of Governors

of thie Bank and IDA which will take place nwxt week, prevent

me fro attending this auspicious occasion. I do, h$ever,

want to express to you and all your collaborators my best

wishes for the successful operation of the plant.

With kind regards,

Very truly yours,

Douglas J. FonteinAssistant Director of Operations

Europe

-errn Direktor Dipl. Ing. Hans hmerGee terreichi sche Donaukraf twerke

Aktiengesellschaftochhaus Gartenbau

Vienna IParkring 12

Austria

Douglas J. Fontein/hom

September 10, 1963

Dpl. Ing. Franz HintermayerDirector GeneralVerbundgesellschaftAm Hof 6Vienna, Austria

Dear Dr. Hintermayer,

I understand from the invitation I have received from theMinister of Transport and Power that the inauguration of theAschach project with the start of operation of the firstgenerating unit will take place on September 27. Mr. ChristianFinne, who also has received an invitation, joins me in con-gratulating you and your collegues in Veroundgesellschaft andDonaukraftwerke on this achievement. I have with great interestfollowed the progress of the construction work and can ap-preciate your pride in now seeing it near completion.

I would appreciate if you could extend to the Minister Mr.Finne's and my thanks for his kind invitation. Unfortunately, othercommitments make it not possible for us to attend the ceremony.

With my personal regards.

Sincerely yours,

A. D. SPOTTSWOOD

A. D. SpottswoodAssistant Director

Department of Technical OperationsCF:ragOperational FilesDiv. FileLoan No. 213 AUA

OSTERREICHISCHE DONAUKRAFTWERKEAktiengesellschaff

Vors izer dos Aufschtsrtfes: Kommarzialref Theodor CernyVorstand: Dir. Dipl. Ing. Hans B 1hm r, Dir. Hanna Mosbauar

VInternational Bank forReconstruction and DevelopmentAttention: Chief of Public Uti-lities Division

1818 H Street, N.W.

W a s h i n g t o n 25, D.C. LuftpostEin-eschrieben!

Hochhaus Gartenbauthr Zeichan Ihre Nachrcht von Unnsor Zeichen

4.4.1963 Rev/Ku Tag 10.4.1963

, Anleihen Nr. 149 und 213 AUA-Jahresbericht 1961 unsererGesellschaft

In der Beilage Uberreichen wir Ihnen wunschgemaB den Geschafts-

bericht (Jahresbericht) unserer Gesellschaft fUr das Jahr 1961

in zweifacher Ausfertigung und bitten Sie, die verspatete ber-

sendung zu entschuldigen.

Der Bericht fUr das Jahr 1962 liegt noch nicht vor; wir werden

ihn nach Fertigstellung unverzuglich an Sie weiterleiten.

Osterreichisc DonaukraftwerkeAktie esel chaft

Beilagen s OIL. o (Wiesinger) (Makovec)

TO.D. CV1RES.

ANS'D, BY

DATE

Tolagrammanschrlft: Faroruf: Fernschreibr: Bankkonfl: Crmdfansafl.Bankvirain Wien, Konto Nr. 0-0353Danaukraffwark* Wien 52 66 71 Sarie Donaukraff Wien 1366 Osterrokoaachjs Landarbank Wien, Konto Nr. 707.230

Donaukreft Tba 029248Durchwahl DoKWKWAachah02l49 Posfparkassankonto: 170.250

Kr Nr. 3 - 3000 - 121 61 DoKW STAschach 02444

OSTERREICHISCHE DONAUKRAFTWERKEAkfiengesellschaff

Vorsitzer do' Aufsichtsrotes: Kornmenrzialrot Theodor CornyVorstand: Dir. Dipl. Ing. Hans B8hm er, Dir. Hanns Mosbauer

International Bank forReconstruction and DevelopmentAttention: Chief of Public Uti-lities Division

1818 H. Street, N. W.

Was h i n g t o n 25. D.C.

Registered! T r a n s 1 a t i o nAir Mail

Hochhaus GartenbauIhr Zeichen Ihre Nachricht worn Unsor ZoIchen Wien I, Parkring 12

4/4/1963 Rev/Ku Tog April 10,1963

era: Loans Nos. 149 and 213 AUA- Annual Report for the year 1961of our Company --

Enclosed please find in double the annual report of our Company

for the year 1961 and beg you to excuse kindly the delate in

submitting you that report.

The report for the year ended Dec. 31, 1962 is not yet available;

we shall send it to you immediatly after it is set up.

Sincerely yours

OSTERREICHISCHE DONAUKRAFTWE RKEAktiengesellschaft

g9z. pp&. Wiesleger ki. og .ovo

Enclusure s

Tologrommenschrift: Fornruf: Fornschreiber: Bankkonti: CredianstaIt-Bankvorein Wien, Konto Nr. 0-0353Donaukroftwork. Wien 52 66 71 Se.s Donukrft Wi 1366 Osterrekschiche Landerbank Wien, Konto Nr. 707.230

Durcwahl Donuukraft Ybbs 029248Durchwohl DoKW KWAschach 02149 Postiporkassonknto: 170.250

Kr Nr. 3 - 3000 - 12161 DoKW ST Aschoci 02444

OSTERREICHISCHE DONAUKRAFTWERKEAkti en g esel I sch aft

Vorsitrer dos Aufehictrleos Kommerziarer Theodor CornyVorstend: DIr. Dipi. Ing. Ha1. Ohmor. Dir. Hann* Mosbouer


1818 H. Street N.W.

1 a s h i n g t o n 25, D.C.

LUJFTPOST I

EINGESCHRIEBEN!

Hochhaus GartenbauIhr Zeichen lhre Nochricht vom Unser Zeich.e Wien i, Porkring 12

21.3.1963 Rev/Ku Te. 28.3.1963Befriffs:

Weltbankanleihe IB 213 AUAProjekt Aschach - Xnderungder "List of Goods"

Wir bestatigen dankend Ihre Zustimmung zu der von uns er-

betenen Anderung der "List of Goods". Wir erlauben uns,

Ihnen in der Beilage die firmenmdBig unterfertigte Kopie

Ihres Schreibens vom 21. Mdrz 1963 zu Ubermitteln.

Hochachtungsvoll

OSTERREICHISCHE DONAUKRAFT RKEAktiengesellschaft

Beilage

(Mosbauer) (Wiesinger)

Tolegrommmischriff: Fsrnruf: * FrnschrIber: B..kkonvI: Crodlionstalt-Benkverain Wien, Konto Nr. 26-28444Donamkrafewerka Wien 52 66 71 Seri* Y a 029248 Ctwrroichsche L ondorbank WI.., Korlo Nr. 707.230

Durchwohl DKW KW Awahoch 02149 Pootlparkessonkonte 170.250

N u ' - via ' D KW ST Avahapb 02444


Vorsitzer des Aufsichfarafmwi Kommerwialrof Theodor CornyVarviand: Dir. Dipt., Ing. Hoes BOhmer, Die. Hanna Mosbsaer


1818 H. Street N.W.

W a s h i n g t o n 25, D.C.

AIRMAIL

REGISTERED

STr ansla tion

Hochhaus Gertenbauthe Zoihn thre NachrIcht wm Unser Zeich.. Wien I, Prking 12

March 21,1963 Rev/Ku T"March 28,1963

B.ilft Loan No. IB 213 AUA

Project Aschach -Change in the List of Goods

Gentlemen:

/ofWe appreciate your agreement to our request/adjustment in

the List of Goods. Enclosed please find the signed confir-

mation copy of your letter dated March 21, 1963.

Sincerely yours,


Enclosure

T.,.gr.m.nschrift: Fernnif: Frnschr*Iber: Bakkonlia CredHtensfaI.Benkvwren Wien, Kanto Nr. 26-28444

Don..,ar.tw.rk. Wi..n 52 " 71 Swa. ),D; .ft Wien 1366 Ot.Corrbhw.he .nd-rb-ak Wien, Kanto Nr. 707.230.Don.ukr.ft Ybbs 029248 k- nlo 170250

IW~h Do~ _W Aschoph 02149 P 170.250

CINTERNATIONAL BANK FOR

RECONSTRUCTION AND DEVELOPMENTWASHINGTON 25. 0. C.

Y

March 21, 1963Oesterreichische Donaukraftwerke

AktiengesellschaftHochhaus GartenbauParkring 12Vienna 1, Austria

Gentlemen:

Loan 213 AUA - Chanwe in the List of Goods

We refer to your letter of February 28, 1963, in which you

request an adjustment in the List of Goods. The Bank has no

objection to your request and the List of Goods, as revised,would therefore read as follows:

U. S. Dollars

I. Goods to be imported 3,165,000

Turbines, electrical and mechanical

equipment, various machines, toolsand miscellaneous items

II. Goods to be purchased in Austria 18,100,000

Miscellaneous goods paid for in thecurrency of the Guarantor or acquiredwithin the territories of the Guarantor

III. Interest and other charres 3.735.000

Total 25.000M000

Please confirm your agreement with the foregoing by signingthe attached confirmation copy of this letter and returning itto us.

Yours a y

S. R. CopeDirector of Operatio

Europe

Enclosure

Confirmed:

OESTER? IC'HISCHE DONAUKRAFTVWEKEAKT 1GOELLS0UAFT

Date March 28,1963

eterrihische r-r:trkktien3tseilechaft

xo mLue 'Qartenbmrrig 12

r p r tadt a ebance In h List of bis which wcldir aco the amount in Catorv I I ( o t- > e g~rcovsed inAix ri)b 900,Q0 aqdJvaJl at with correapon ios rseiuctionsI G trv I n I. Th fl..ik has no ob~iction to thesecne u which are oioid in tho frml~ lettor which I a on-31~. ealt fo r yrxtr cenfrtIon.

Tho~ rtrnW1hv o ofct of in'oain themXl xt avafla<1 for Wit drawa from tha Lea Accournt undier

CateryIi in 1943 to 4 ,500,000 aquival at, or 375,000 pyr

lox4 (Aplioat~i n No. 138) w12: 4 r'1pr o nto the guarterly

L oa&n su t a oie i ietione for Vile equiv&-1 et of 36?00,OO0 C7or ;rtnin on or after April 1, 1963. Tint

wo~droerement the balk.noo of the revise quarterly allocn-tf sor te firit nd aoeorM qurtor of 1963.* Further

Lm an Dr 7,0COe rqiaet och ould thuo b sbz ottd 1 or &ft-r JUly 1 an'1 JetOber 1 in repet of thelne of the Cate *ry

Youre: sincerely,

dr ctor of prtione

Enclosure

cloerax ncd ~c J r. coveyMr. WienJ2r. Finne

FNovey/Jt 1.ier :vymo

Oe sterreichiache Donaukraftwerke March 21, 1963

AktiengesellschaftIiochhaus GartenbauParkring 12Vienna 1, Austria

Gentlemen:

Loan 213 AUA - Change in the Li-t ofrGoods

We refer to your letter of February 28, 1963, in which yourequest an adjustment in the List of Goods. The Bank has noobjection to your request and the List of Goods, as revisod,wouli therefore read as follows:

U. S. Dollars

I. GoodA to be irported 3,165,000

Turbines, electrical and mechanicalequipmnent, various machinos, toolsand miscellaneous items

II. Goods to be mUrchased in Austria 18,100,000

Miscellaneous goods paid for in thecurrency of the Guarantor or acquiredwithin the territories of the Guarantor

III. IntereSt and other chargee 3.I500

Total 25. OO -00


Yours sincerely,

S. IR. CopeDirector of Operations

EuropeEnclosure

Confirmed:

GSST1RREICIPISCIE D0UA1 AFVRKE cc: Mr. PoveyAKT IE ,GYLLSCHAFT Mr. Wiehen

Mr. FinneJASigixnons:vmc

Date

Sch/6

OSTERREICHISCHE DONAUKRAFTWERKEAktiengeselI sch aft

Vorslif.r dos Aufsichtirafes: Kommarziatrat Theodor CernyVorsfand: Dir. Dipl. Ing. Hans B51hmr r. Dir. Hanns Mosbauer

International Bank forReconstruction and Deve pment

1818 H. Street N.W.

W a s h i n t o 25, D.C.

BY AIR MAIL

REGISTERED

Hochhaus Gartenbauhr Zoichon Ihre Nachricht varn Unsor Zeich.n Wien I, Parkring 12

Rev/Ku Tag 28.2.1963Anleihe Nr. 213 AUA, Projekt Aschach,Xnderung der "List of Goods"

Unter Bezug auf das Anleiheabkommen vom 2.12.1958 und Ihre

Schreiben vom 7.10.1960 bzw. 11.10.1962 betreffend die "List

of Goods" in welchen die Abhebungsquoten von unserem Anleihe-

konto fUr die einzelnen GUterkategorien festgelegt wurden,

erlauben wir uns um eine Xnderung der "List of Goods" anzu-

suchen.

Wie aus beiliegendem Bericht iUber die "Estimated Withdrawals"

im Jahre 1963 zum 15.3.1963 ersichtlich ist, vermindern sich

die Abhebungen in der Kateg. I (Importe) gegenUber unserem

letzten Bericht um rund $ 535.000,--,was hauptsdchlich daraufzurUckzufUhren ist, daB nach neuerlicher Uberprufung unserer

Auftrdge der Teil, der bisher unter der Position "Undetermined

-- Currencies" ausgewiesen wurde, nicht an ausldndische Liefer-

firmen zur Vergebung gelangt. Weiters wurde eine Bestellung inDM storniert.

Bei der Kateg. III (Zinsen und Bereitstellungsprovision) ergibtsich gleichfalls eine Verminderung der Abhebungen um rund$ 365.000,--, da die Zinsen im letzten Quartal 1963 nicht mehr

-2-

Tologrammanschrift: Fornruf: F.rnxchr.Iber: Bankkonii: Cr.dionstaoH-Bankvoroin Wien, Konto Nr. 26-28444

Donaukraftw.rko Wien 52 66 7V Sore Donaukraft Wi.n 1366 IiOworrelche LAnderbank Wien, Konto Nr. 707.230Donaukraft Ybbs 029248

Durchrahl DoKW KW Aschach 02149 Posisporkossnkonto: 170.250

Kr Nr. 3 - 6000 - 7/62 DoKW ST Aschach 02444

-2-

aus Weltbankmitteln, sondern bereits durch Direktitberweisung

gezahlt werden. Insgesamt wird somit ein Betrag von $ 900.000,--(= 5S 23,400.000,--) freigesetzt und steht zur Umwandlung inKateg. II (Inlandsrefinanzierungen) zur VerfiUgung.

Wir erlauben uns daher, eine Anderung der gemdB Ihrem Schreibenvom 11.10.1962 gUltigen "List of Goods" wie folgt zu beantragenund bitten Sie, dieser Anderung zuzustimmen:

List of Goods Anderung Beantragteworn 11.10.1962 .......... Neuregelung

Kateg. I 3,700 - 535 3,165Kateg. II 17,200 + 900 18,100Kateg. III 4,100 - 365 3,735

25,000 - 25,000

Gleichzeitig legen wir unseren Abhebungsantrag Nr. 143 Uberden Betrag von S 23,400.000,-- betreffend Giter der Kateg.IIbei und bitten Sie, die Uberweisung zum frUhest mrglichenZeitpunkt durchzufUhren.

Hochachtungsvoll

OSTERR CHISOHE DONAUKRAFTWE EAktiengesellschaft

Beilage

1111 (Mosbauer) (Wiesinger)

Sch/6


Vorsitzer des Aufsichtsrates: Kommerzialrst Theodor CernyVorsfand: Dir. Dipl. Ing. Hans Bihmer, Dir. Hanns Mosbauer


1818 H. Street N.W.


BY AIR MAIL ! TRANSLATION

REGISTERED !

Hochhaus GartenbauIhr Zaichen Ihr* Nachricht vom Unser Zeichen Wien I, Parkring 12

Rev/Ku T' Feb. 28,1963

Loan IB 213 AUA - Project AschachChange in the List of Goods

Referring to Loan Agreement of December 2,1958 and to

correspondence of October 7,1960 and October 11,1962 with

which the Quotes of Withdrawals from our Loan Account wereestablished, we request for a Change in the List of Goods.

As you can see from the enclosed report of "Estimated With-drawals in the Year 1963",Withdrawals in Category I (Goods tobe imported) has been reduced - in comparison with our lastreport - of about '$100.00--, and that by re- examiningorders and findding that parts of them shown until now under"Undetermined Currencies" will finally not be placed to foreignsuppliers. Moreover one order provided to be paid in DM-Currency has been cancelled.

Reductions of about $ 365.000,-- has been made also forCategory III (Interest and other Charges) as interest, coveringQuarter IV/1963 will not be paiv7ilisbursement from the LoanAccount but by direct transfer. So we are able to Change$ 900.000,-- from Categories I and III to Category II and we

-2-

Telogrmmanschrifi: Fornrqf: Fernschreiber: Bankkon"i: Creditanstatt-Bankverein Wien, Konto Nr. 26-28444Doneukrsftwerko Wien 52 66 71 Sorte Donaukrft Wi n 1366 8 Osterreichischs Lnderbank Wien, Konto Nr,. 707.230

Donsukraft Ybbs 029248Pssaksokno 7.5Durchwahl DoKW KW Asehach 02149 Postsparkassonkonto: 170.250


-2-

request your consent to the adjustment in the List of Goodsas follows:

List of Goods Changes New Adjustment

Category I 3,700 - 535 3,165Category II 17,200 + 900 18,100Category III 4,100 - 365 3,735

25,000 - 25,000

Enclosed please find our withdrawal application No 143 for23,400.000,-- Austrian Shillings for goods in Category II. Webeg to consider it as soon as possible.

Sincerely yours,


Enclosures

OSTERREICHISCHE DONAUKRAFTWERKE Wien, am 28.2.1963Aktiengesellschaft Rev/Ku

Calculated interest rates for Loan 213 AUA

for the year 1963

based on expected withdrawals

Amount(in from - to No. of Interest Calculated interestthousands days Number ( 5 3/4 % p.a.)of US-$)

Withdrawal standinguntil 12/31/1962 21.347

Withdrawals 1/1963 (acc.to the enclosed report for"Estimated Withdrawals"effectuated withdrawalsadded): Categ. I 368

Categ. II 150

21.865 1/1-3/14/63 73 15.961 x 5,75 : 365 =

$ 251 (1/1-3/14/63)$ 357*) (9/15-12/31/62)

Interest 9/15/1962 - $ 6083/15/1963 608

Commitment charge 14

22,487 3/15-31/63 17 3.823

Withdrawals 11/1963Categ. I 1017Categ. II 150

22.744 4/1-6/30/63 91 20.697

1) estimates -2-*) according to computation

for balance-sheet

-2-

Amount (in from - to No. of Interest Calculatedthousands days Number interestof US-$) (5 3/4 % p.a.)

carry over 22.744

Withdrawals 111/1963:Categ. I 230Categ. II 150

23.124 7/1-9/14/63 76 17.574

42.094 x 5,75 : 365 =$ 663 (3/15-9/15/63)

Interest 3/15-9/15/63 663Commitment charge 10 1)

23.797

Withdrawals IV/1963:Categ. I 120Categ. II 150

Total of Withdrawals 24.067

Total of Loan 25.000

Amount for Change to Categ.II 933

= rounded 900

1) estimates

Sch/6OSTERREICHISCHE DONAUKRAFTWERKE Wien, am 25.2.1963

Aktiengesellschaft Rev/Wo

Berechnung der Zinsenzahlungen fUr die Weltbankanleihe II

213 AUA, im Jahre 1963 auf Grund der voraussichtlichen

Abhebungen

Betrag in von - bis Tage Zinsnum- Errechnung d.Zinsen1.000 US-$ mern (5 3/4 % p.a.)

Abhebungsstand 31.12.1962 21,347

Abhebungen 1/63 (1t. bei-liegendem Bericht Uber die

"Estimated Withdrawals":Kateg. I 368**Kateg. II 150**

21,865 1.1. - 14.3.63 73 15.961 x 5,75 : 365 =

$ 251 (1.1. - 14.3.63)$ 357*) (15.9. - 31.12.62)

Zinsen 15.9.1962 - $ 60815.3.1963 608

Bereitstellungsprovision 14 1)

22,487 15.3. - 31.3.63 17 3.823

Abhebungen 11/63Kateg. I 107Kateg. I 150

22,744 1.4. - 30.6.63 91 20.697

1) geschdtzt -2-* t. Berechnung f. Bilanzinkl.dim I.Quartal bereitsdurchgefuhrteeiAbhebungen

-2-

Betrag in von - bis Tage Zinsnum- Errechnung d.Zinsen1.000 US-s mern (5 3/4 % p.a.)

Ubertrag 22,744

Abhebungen 111/63:Kateg. I 230Kateg. II 150

23,124 1.7. - 14.9.63 76 17.574

42.094 x 5,75 : 365 =Zinsen 15.3. - 15.9.63 663 $ 663 (15.3.-15.9.63)Bereitstellungsprovision 10 1)

23,797

Abhebungen IV/63:Kateg. I 120Kateg. II 150

Summe der Abhebungen 24,067

Anleihebetrag 25,000

frei zur Umwandlung 933

- rund 900

1) geschstzt

T T Wiern, .. 16tie ene1Iac art 'ev/ o

erecef ter AirserR1-m e? TUr die ,elthirnkanleUe IT

1 ''r 17 wf 'rund der voru-:sich- icen

bhebun en

~e'ra tr vcn bisi ise Zkns u rreo'nun~ i.Mrser1. 0C :m~ern 4___ _ _.__ _ _. _

Abyebun en T/E6 1t. bet-

7 ir er e~ orzt&t Ther ti

aste r. W*

1 1.1. - 1II .15 571~ ~ ,75

1 7

Bere tATeln oprovIni 14

)inkl. er im I. Quartal be-reits durchgefUhrten Abhebungen

Setrg jw 10 - bi ra e Zinsynui- Trrec nrunT .~ cse

bortro2 )744

3 12 ' .7. - 14.9.E3 76 .447'.05 5,7$ : 365 3

7inee 15. 3 - 1. .~ - 66 3 663 (..- . )ereitste11urn 1 _____

,7j

Abeta e V

'ate .r ebr

rei zur ?nr1 9

1 ud 0

' TF ISCSH DONAUK A ;T R A N S L A T I 0 N Wien, am 28.2.1963Aktienweuellschaft Rey/Ku

Zalculated interest rates for Loan 213 AUA

for he yar 1963based on expected withdrawals

4mount(in from - to No. of Interest Calculated interestthounr dauns Number ( 5 3/4 % p.a.)

"ithdrawal s tandinguntil 12/31/1962 21.347

Withdrawal. I/1963 (acc.to the enclosed report for"Fntimated ithdrawals"effectuated withdrawalsadded ): Categ. I 368

,iteg. IT 150

21.865 73 15.961 x 5,75 : 365

$ 357*)(9/-/1Interest 9/15/1962 -

't 6083/15/l963 603

ommitent r e14

22,437 /15-31/63 17

at. I 107Tatep. TI 150

?22.7414 4/1 -1 2k 9

*) Rccor(inr to computationfor lanoe-sreet

Atiount (in fro - to No. of Interest lalcul tedthouoands days Number interestof -17- ) (w34 pa.)

&arry over 2.744

"ithdrawalp TT '1963:Cate,. 1 20lateg. IA 150

.124 7/1-9/14/63 76 17.574

4 .7 x 5,75 s 5S663(/1-/ '9

Inter st '/1-9/15/ 66 JJ-/)'ommit ent c. ara 1___

it iraa)l T/6.:iwe. I 110tei. IT 15

aotl of ithdraws4.ASP

Total or oan 25000

aount for "hange to te .IT 973

roundad 900

ch/6

Date February 28, 1963

Loan No. IB 213 AUA

Application Serial No. 143

APPLICATION FOR WITHDRAWAL WITH RESPECT TO GOODS PAID FORIN THE CURRENCY OF THE GUARANTOR OR ACQUIRED FROM SOURCES

WITHIN THE TERRITORY OF THE GUARANTOR

Pursuant to the Loan Agreement dated December 2, 1958 between the InternationalBank for Reconstruction and Development and the undersigned OsterreichischeElektrizitttswirtschafts-Aktienge sellschaft (Verbundgesellschaft) and Osterreichi-sche Donaukraftwerke Aktiengesellschaft, the undersigned hereby certify and agreeas follows:

1. The undersigned desire to withdraw from the Loan Account US Dollars or suchother currency, or combination of currencies, as may be selected by the Inter-national Bank for Reconstruction and Development equivalent to

'_, 400.000,-- Austrian Schillings.

2. Said Amount, together with amounts/ previously withdrawn, does not exceed theamount of expenditures booked in Austrian Schillings on the project during theperiod December 9, 1958 to 3eftember 30, 1962 for the purposespecified in Section 3.01 of said Loan Agreement with respect to goods or ser-vices paid for in the currency of the Guarantor or to the goods acquired fromsources within or services performed in the territory of the Guarantor, as setforth in the attached statemlent of expenditur s.

3. The undersigned have not heretofore withdrawn from said Loan Account orapplied for the withdr:awal from said Loan Account of'any amounts relative tosuch expenditures.

4. At the date of this Application there is no exi sting default in the performanceof any of the obligations of the undersigned under said Loan Agreement, and tothe best of the undersigned's knowledge and belief, of the Guarantor under theGuarantee Agreement referred to therein.

Please make payment to the order of the undersigned by deposit for the account ofthe Creditanstalt- ankvereln, Vienna (50 % of the amount applied for) and for theaccount of the Os rreichische Landerbank Aktiengesellschaft, Vienna (50 % ofthe Amount appli, for) in the Federal Reserve Bank of New York or in the centralbank of the coun yflease see list on the other page) of the currency disbursed.

This applicatio corsists of this page and 1 signed and numnibered statement ofex nditures.

OSTERREICHISCHE ELEKTRIZITATS-WIRTSCHAFTS-AKTIENGESELLSCHAFT

(Ver undgesellschaft)

OSTERREI ISCHE DONAUKRAFTWE KEeAktiege sellschaft

By:(Authorized Representative)


Date: February 28, 1963Loan No. IB 213 AUAAppl. Serial No 143

CATEGORY REFERNECE OF THE LIST OF GOODS II

Statement of expenditures in Shillings

1) Amount booked from December 9,1958 to the beginning of thereporting period (December 31,1961) S 1,364.199.355,69

2) Amount booked during period (December 31,1961 - September 30,1962) 511.680.071,59

3) Amount booked from December 9,1958 to the end of reportingperiod (September 30,1962) 1,875.879.427,28

4) Amount disbursed on previous Applications for Reimbursement 435.499.998,96

5) Balance (3-4) 1,440.379.428,32

6) Amount of current Application for Reimbursement 23.400.000,--

7) Balance of expenditures available for carry over (5-6) 1,416.979.428,32

We certify that the above listed expenditures in Austrian Shillings were for goods acquired

or services performed in the territory of the guarantor refterred to in the Loan Agreement

dated December 2,1958 between the International Bank for Reconstruction and Development and

the undersigned and do not include any expenditures for goods imported into the territory

of the guarantor.OSTERREICHISCHE ELEKTRIZIT"TSWIRTSCHAFTS-AKTIENGESELLSCHAFT (VERBUNDGESELLSCHAFT)

OSTERREICHI CHE DONAUKRAFTWERKE A IEN-GESELLSCH T

By


Sch/6

Date February 28, 1963

Loan No. IB 213 AUA

Application Serial No. 143

APPLICATION FOR WITHDRAWAL WITH RESPECT TO GOODS PAID FORIN THE CURRENCY OF THE GUARANTOR CR ACQUIRED FROM SOURCES

WITHIN THE TERRITORY OF THE GUARANTOR

Pursuant to the Loan Agreement dated December 2, 1958 between the InternationalBank for Reconstruction and Development and the undersigned OsterreichischeElektrizitatswirts chafts -Aktienge sell schaft (Verbundge sellschaft) and Oste rreichi-sche Donaukraftwerke Aktiengesellschaft, the undersigned hereby certify and agreeas follows:

1. The undersigned desire to withdraw from the Loan Account US Dollars or suchother currency, or combination of currencies, as may be selected by the Inter-national Bank for Reconstruction and Development equivalent to

23,400.000,-- Austrian Schillings.

2. Said Amount, together with amounts previously withdrawn, does not exceed theamount of expenditures booked in Austrian Schjilings on the project during theperiod December 9, 1958 to September 30{ 1962 for the purposespecified in Section 3. 01 of said Loan Agregiment with respect to goods or ser-vices paid for in the currency of the Guaranitor or to the goods acquired fromsources within or services performed in the territory of the Guazantor, as setforth in the attached statement of expenditures.

3. The undersigned have not heretofore withdrawn from said Loan Account orapplied for the withdrawal from said Loan Account of any amounts relative tosuch expenditures.

4. At the date of this Application thbre is no existing default in the performanceof any of the obligations of the undersigned under said Loan Agreement, and tothe best of the undersigned's knowledge and belief, of the Guarantor under theGuarantee Agreement referred to therein.

iiPlease make payment to the order of the undersigned by deposit for the account ofthe Creditanstalt-Bankverein, Vienna (50 % of the anount applied for) and for theaccount of the Osterreichische Landerbapk Aktiengesellschaft, Vienna (50 % ofthe Amount applied for) in the Federal $teserve Bank of New York or in the centralbank of the country (plea.8e se, list on the other page) of the currency disbursed.

This application consists of is page and 1 signed and nurnJ'ered statement ofexpenditures.

OSTERRECHISCHE ELEKTRIZITATS-WIRTSCHAFTS-AKTIENGESELLSCHAFT

(Verbundgeselschaft)

OSTERREI HISCHE DONAUKRAFTWE KEAktiengesellschaft

(Authorized Repr4sentative)


...sterreichische Landerbank Creditanstalt-BankvereinVienna Vienna

SFrs Schweizerischer Bankverein dettoZurich

bFrs Banque de Bruxelles S. A. dettoBruxelles

hfl Nederlandsche Handel- dettoWaatschappij N.V. Amsterdam

DM Dresdner Bank AG SUddeutsche BankFrankfurt/Main Frankfurt/Main

sw A. B. Svenska Handelsbanken dettoKoronor Stockholm

canad$ Bank of Montreal, Montreal detto

Lire Credite Italiano, Milano Banca die Roma, Roma

Barclay-s Bank, London dettoMidland Bank, London dettoSamuel Montague and Comp., dettoLondonWestminster Bank, London detto

Date: February 28, 1963Loan No. IB 213 AUAAppl. Serial No 143

CATEGORY REFERNECE OF THE LIST OF GOODS II

Statement of expenditures in Shillings

1) Amount booked from December 9,1958 to the beginning of thereporting period (December 31,1961) S 1,364.199.355,69

2) Amount booked during period (December 31,1961 - September 30,1962) 511.680.071,59

3) Amount booked from December 9,1958 to the end of reportingperiod (September 30,1962) 1,875.879.427,28

4) Amount disbursed on previous Applications for Reimbursement 435.499.998,96

5) Balance (3-4) 1,440.379.428,32

6) Amount of current Application for Reimbursement 23.400.000,--

7) Balance of expenditures available for carry over (5-6) 1,416.979.428,32

We certify that the above listed expenditures in Austrian Shillings were for goods acquired

or services performed in the territory of the guarantor refferred to in the Loan Agreement

dated December 2,1958 between the International Bank for Reconstruction and Development and

the undersigned and do not include any expenditures for goods imported into the territory

of the guarantor.OSTERREICHISCHE ELEKTRIZITfTSWIRTSCHAFTS-AKTIENGESELLSCHAFT (VERBUNDGESELLSCHAFT)

OSTERREICHIS gE DONAUKRAFTWERKE AKTI -GESELLSCHAF

By


Bl/4

OSTERREICHISCHE DONAUKRAFTWERKEA k f I e n g e s e I I s c h a f f

Vorslizar des Aufsichtsraest KorntruIalreet Theodor CornyVorsfand: Dir. DipL Ing. Han BOhmer. Dir. Hanns Mossuer


1818 H Street, N.W.


AIRMAIL!

L REGISTERED!- T r a n s 1 a t i o n

Hochhaus GartenbauIhr Zeishe ihre Nechrlch wom Unser Zeichn W iMn 1 Parkidn b 12

Tag

October 11, 1962 Rev/Ku November 2, 1962

Loan No. IB 213 AUAProject Aschach -Change in the List of Goods

Gentlemen:

We appreciate your agreement to our requested adjustment in

the List of Goods. Enclosed please find the signed confir-

mation copy of your letter dated October 11, 1962.

Sincerely,yours,


Enclosure

INTERNATIONAL BANK FOR

RECONSTRUCTION AND DEVELOPMENTWASHINGTON 25. D. C.

October1, 1962


Hochhaus GartenbauParkring 12Vienna 1, Austria

Gentlemen:

Loan 213 AUA - Chanare in the List of Goods

We refer to your letter of August 24, 1962, in which yourequest an adjustment in the List of Goods. The Bank has noobjection to your request and the List of Goods, as revised,would therefore read as follows:

U. S. Dollars

I. Goods to be im-norted 3,700,000

Turbines, electrical and mechanicalequipment, various machines, toolsand miscellaneous items

II. Goods to be purchased in Austria 17,200,000

iscellaneous goods paid for in thecurrency of the Guarantor or acquiredwithin the territories of the Guarantor

III. Interest and other charpges 4,100,000

Total 2.0000

Please confirm your agreement with the foregoing by sign-ing the attached confirmation copy of this letter and returningit to us.

Sincer urs

S. R. CopeDirector of Opera i no

Enclosure er

Confirmed

OESTERREICHISCHE DONAUKRAFTW

By y* // (Kralik) (Wiesinger)Date October 31, 1962

October 11, 1962

Oe sterreichische Elektrizitfitswirtschafts-Aktiengesellschaft (Verbundgesellschaft)

Am, Hof~ 6Vienna 1, Austria

Gentlemen:

Loan 213 AUA

I enclose for your information copy of a letter

which we have today sent to Donaukraftwerke in reply

to their letter of August 24, 1962.

Yours sincerely,


Europe

Enclosure

JHC lier :vmc

w --

~Angs ta~tc ft

Sa 1p

a It -Am A

-, ':1

Or ~ -t ~ VL~~t7SA~7~ ~ t't

neoe 3re $14 Sad AU.% y w

de sa d exs ma a Stadse awit~wva Vi le&&dte 7dE& WC

42 Milet (ei/

C 11&skin bek~e hCj$ tt

CO416

~o e e el tda h r tr

a - - - - -- -t

e~mehwinba

Is: 2 A

S w th*dat P* 4A 'v' aU ~ .

'I MM ~ i~ I4T.& AS Ct 1. C

erri> Lre wou t.s bi 1. Pt. e isn 1%) IVk fer

aue o a Ax .Cbunimtb b t IS xt.ir 4 1<% wifl

ere$ .caAe.t L aas *l s U iitatasArvW tctrtsr grsw zsb ( st jAd,.&t AtL .Cht)

Yi#2WAr1 Afley

*4r4rAn1% U

Vina 4 p pri

Gen4 iiat

* M21 A 3aa lA Ab4r~a 17,Ah Y

a reer o yur otta ofausat e 194 s whtehp

repstenad40en i te is ofCgdr $ takha

equipan, a V s r h ty ro lan LL clmen ts

a %%akkue~al laastiro 17 2ux*o,

*ihi ie *arxt1 is f t, lttpn~gd

FORM No, 57A INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCEASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION

OFFICE MEMORANDUMTO: Mr. John H. Collier DATE: September 7, 1962

FROM: F. Povey

SUBJECT: Loan 213 AUA

This will confirm o r conversation regarding the Borrower's re-quest dated August 24thfor a change in the List of Goods.

Two separate questions are involved in this request.

1. The List of Goods approved at time of negotiation providedfor $ 8 million imports and $ 12 million local expenditures ongoods i.e. 40% imports. In October 1960 the List of Goodswas amended to provide $ h million imports and $ 16 millionlocal expenditure, i.e. 20% imports. The change now requestedwill provide $ 3.7 million imports and $ 17.2 million localor only 17.7% imports. Does the Working Party feel this isjustified?

2. By side letter the amount provided in the List of Goods forlocal expenditures is allocated on a yearly basis with theprovision that not more than 25% of the annual allocationmay be withdrawn during any calendar quarter. The allocationfor 1962 is $ 0.7 million of which $ 0.525 million has beenwithdrawn. Unless this side letter is also amended no furtherdisbursement can be made against this Category before Octoberlst and then only $ 0.175 million. The allocation for 1963 is$ 0.6 million. Application for withdrawal No. 122 which accom-panied the request for change in the List of Goods is for theequivalent of $ 1.2 million which is the full amount of theincrease in Category II requested by the Borrower.

If the Working Party agrees to the requested change in the List ofGoods it will then be necessary to decide whether the amount by whichCategory II is increased should be made available for disbursement imme-ditately or whether it should be spread over the remaining life of theLoan i.e. through December 31, 1963.

Application for Reimbursement No. 122 will be held in suspense pendingdecisions on the above matters.

cc: Mr. Povey (2)File: Loan 213 AUA - List of Goods

Bl/6

OSTERREICHISCHE DONAUKRAFTWERKEAktiengeselisch aft

Vorsitzr dos Aufsichtbrates: Kommeralairst Theodor CornyVorstand: 0Or. Dipl. Ing. Hans 88hm,. Dir. Hanns Mosbauer

Tnternational Bank forReconstruction and Deve 0 ent1810 H. Street, 7.W.

a shin g t o n 25, D.C.

,Dv t'7 ATLT

REGISTERED!

Hochhaus GartenbauIhr ZoIchen Ihr* Nachrlcht vom Unser Zelchen Rev 7O Wien i, Parkring 12

Tug August 2 q,1962

Toar No. I 21T AA - Project Aschach -3hane ini the List of Goods

Gentlemen:

We refer your correspondence of December 2, 1958 and

October 7, 1960, at which time the plan for withdrawals from

our loan accoulnt -for the sepra te categories in the Tist of

Goods was established.

Since ther, it has been possible to place the rem ining orders

with our supply firms. We have, accordingly, re-examined the

totals of our imported goods and find that imports for civil

works at Aschach amount to -7,7 million, whereas in your let-

ter of October 7, 1960, a provision of !4,0 million was made

for the goods in Category T. This leaves a difference of

- -<70,3 million.

Therefore, we have again computed the amount for the interest

and for contractors' commissions (goods in Category TTT), and

in so doing we find that the original estimate of $5,O million

exceeds our present figure of about 84,1 million, thus repre-

senting a change of $0,9 million.

-2-

Tologrammenschrift: Fornruf: Foernschrolbor: Bankkontl: Crediianstalt-Bankverain Wien, Konto Nr. 0.0353Danaukraftworke Wien 52 66 71 Sarl. Donukrft Wi n 1366 Ostrrichch LAnderbank Wien. Konfo Nr. 707.230

Donuukruft Ybbo 029248Durchwahl DOKW KWAscach 02149 Postsparkssankonto: 170.250

Kr N. 3 - 3000 - 12/61 DOKW ST Aschach 02444

-2-

As these reductions are but a small portion of the in-

creased amount needed to finance the inland Foods in Cate-

gory II, we request that you consent to a change in the

List of Goods dated October 7, 1960 to read, instead, as

follows:

List of Goods Changes New Adjustmentfor 10/7/60

Category I 4,0 - 0,3 5,7

Category TT 16,0 + 1,2 17,2

Category ITT 5,0 - 0,9 4,1

25,0 25,0

Enclosed please find our withdrawal application No. 122 for

1,200,000 Austrian schillings for goods in Category IT. 7e

ask you to consider it as soon as possible.

4C Sincerely yours,

OST-ERREICHISCHE TDO71AUK A2T- 7T7KEAktiengesellschaft

Encl.

w Sch/6

OSTERREICHISCHE DONAUKRAFTWERKEAkt i en g ese II sch a ft

Vorsitzer des Aufbiclisrates: Konmerzialrat Theodor Corny

Vorstand: Dir. Dipl. Ing. Hans B6hner, Dir. Hanns Mosbauer

International Bank forReconstruction and Development1818 H. Street, N.W.

I a s h in 5U g o n 25 D.U.

LUFTPOST !

EINGESCHRIEEhN

Ihr Zoichon [hre Nachrichl vom Unsor Zeichen Wien, amRev/Wo ""Hochho G,"no 24 . 8. 62

1, Porkring 12

Anleihe Nr. 213 AUA - Projekt Aschach -Anderung der list of Goods

air beziehen uns auf Ihr Schreiben vom 2.12.1958 und vom

7.10.1960 betreffend die List of Goods, in welcher die Ab-

hebungen van unserem Anleihekonto fUr die einzelnen GUter-

kategorien festgelegt wurden und erlauben uns hiezu folgendes

anzufUhren:

Da nunmehr die restlichen Auftrage an unsere Lieferfirmen end-

gijltig vergeben werden konnten, haben wir die Summe unserer

Importigiter einer neuerlichen Uberprfung unterzogen. Demnach

belaufen sich die Importe fdr den Kraftwerksbau Aschach end-

giltig auf 3,7 Mio >, wogegen laut Ihrem o.a. Schreiben vom

7.10.19b0 fUr GUter der Kategorie I eine Quote von 4,0 Miio 8

vorgesehen war; es wUrde daher ein unausgenUtzter Restbetrag

in der Kategorie I in HOhe von 0,3 Mio o verbleiben.

In diesem Zusammenhang haben wir auch die Zahlungen fUr die

Zinsen und fUr die Bereitstellungsprovision (GUter cLer Kate-

gorie III) nochmals berechnet, wobei sich auch hier gegenaber

der ursprunglich festgesetzten Quote von 5,0 Mio ein Gesamt-

betrag von voraussichtlich 4,1 Liio 4, somit also eine Minmerung

um 0,9 MioSP ergeben dUrfte.

-2-

Telegrammanschrift: Fornruf: FornschroIbor: Bankkonti: Croditanstal-Bankverain Wien, Konfo Nr. 0.0353

Donaukraftwerke Wien Donaukraft Wien 1366 0strroichische Linderbank Wien, Konlo Nr. 707.230

52 66 71 DKWKWAshsch219 Posfsparkassankonto: 170.250

Kr Nr. 3 - 6000 - 7/61 DoKW ST Aschach 02444

-2-

Demgegenuber ist aber der vertraglich von vornherein nur mit

einem niedrigeren Anteil finanzierte Bedarf fUr GUter der

Kategorie II - InIandsrefinanzierungen - noch weiter angestie-

gen. Wir bitten Sie daher, einer Anderung der seit 7.10.1960

gUltigen List of Goods wie folgt zuzustimmen:

List of Goonsno 7.10.1960 Anderungen Neuregelung

Kategorie I 4,0 - 0,5 5,7Kategorie II 16,0 + 1,2 17,2

Kategorie III 5,0 - 0,9 4,1

25,0 25,0

Wir erlauben uns, Ihnen in der Beilage unseren Abhebungsantrag

Nr. 122 Uber den Betrag von d.S 31,200.000,-- betreffend GUter

der Kategorie II beizulegen und bitten Sie, die Uberweisung zun

fruhest mdglichsten Zeitpunkt durchzufUhren.

Hochachtungsvoll

OSTERREICHISCHE DONAUKRAFT RKEAktiengesellschaft

Beilagen A

153 (Kralik) (Wiesinger)

OsterreichisoeElektrizititswirts hafts-

Aktiengesellsch ft

Sch/6

oSTERREIHIIS CHE DONAUKRAFTWERKE Wien, am 24.8.1962Aktiengesellschaft Rev/Wo/

Berechnung der Zinsenzahlungen fUr die Weltbankanleihe

Nr. 213 AUA fUr die Zeit vom 15.9.1962 - 31.12.1963

auf Grund der voraussichtlichen Abhebungen

Betrag von - bis Tage Zinsnum- Errechnung d. Zinsenin Mio $ me rn (53/4 b' p. a.)

Abhebungsstand am15.7.1962 19,143

Abhebungen 15.7. -6.8.1962 0,100

Zinsen lt.Weltbankbe-rechnung "Statement ofAccount" bis 14.9.1962 0,560

Stand 15.9.1962: 19,803 15.9.-30.9.62 16 3,168

1.10.1962: Abhebungen im4.Quartal 1962Kateg. I 0,700Kateg. II 01175

20,678 1.10.-31.12.62 92 19,024

1. 1.1963: Abhebungen im1.Quartal 1963Kateg. 1 23Kateg. II 0,150

21,028 1. 1.-14. 3.63 73 15,350 37,542 x 5,75 : 365

0,591 i. io 8

Betra-in 1 von - bis Tage Zinsnummern Errechnung d.

a n eZinsen (5.3/4 o

tUbertrag: 21,028

15.3.1963: Z i n s e n

21,619 15. 3.-31. 3.63 17 3,675

1.4.1963: Abhebun en im2.Quartal 1963Kateg. I 0,200Kate:. II 0,150

21,969 1. 4.-30. 6.63 91 19,992

1.7.1963: Abhebungsen im 23,667

3.Quartal 1963Kateg. I 0,200Kateg. II 0,150

22,319 1. 7.-14. 9.63 76 16,962 40,629 x 5,75 : 365=

15.3.1963: Z i n s e n 0,640 15. 9.-30. 9.63 16 3,675 0,640 Eio 2

1.10.1963: Abhebungen im4.Quartal 1963Kateg. I 0,200Kateg. II 0,150

31.12.1963: Z i n s e n 23,309 1.1.-31.12.63 92 21,444 25,a I9 x 5,75 : 365=

0,396 0 ,396 io 4

Abhebungsstand: 23,705

Bl/7OSTERRTEICHISONE DONATTKRAFPTPYIE Vienna, August 21, 1962

Aktiergesell s(haft Rev/Ku

Calculated interest rates for Loan 213 AUA

for the period September 15162 - December 31, 196],based on exnecte withdrawals

Amt. in from - to Yo. of Interest Calculated Interestmillion $ days number (5 3/4 4, p.a.)

7ithdrawal standinguntil 7/15/62 19,143

Withdrawals 7/15/62 -

81/6/62 0,100

Interest acc. to theBank's "Statement ofAccoint" urtil 9/1A/62 0, 560Standing as of 9/15/62: 19,803 9/15-30/62 16 3,168

10/1/62: W7ithdrawals in4'th auart.,1962Cate7. T 0,700Cpteg. II 0,175 10/1-12/31/62 92 19,024

1/1/63: Withdrawals in 20,67,1st ouart.,1963Categ. T 0,200Categ. IT 0 150

41/1-/14/63 73 5 37,542 x 5,75: 365Po,5O1 million

3/15/63: Interest 0,;Q1

21,619 3//15-31 /63 17 3,675

4/1/63: ithdrawals in2nd auart., 1963Categ. I. 0,200Categ. II _015

21,969 4/1-6/30/63 91 19,992

Balance: 21,969 108 23,667

-2-

Amt. in from - to No. of Interest Calculated Interestmillion $ days number (5 3/4 -o pa.

Balance: 21,969

7/1/63: Withdrawals in3rd quart.,163Categ. I 0,200Categ. II __0

2.',319 7/1-9/14/63 76 16,962 40,629 x 5,75: 365"'0,640 million

3/15/63:Interest 0,640 9/15-70/63 16 3,675

10/1/63:Vithdrawals in4th quart.,1963Categ. I 0,200Categ. II 0 50

23,309 10/1-12/71/63 92 21,444 25,119 x 5,75:365 =$0,396 million

12/31/63:Tnterest 0396

Withdrawal standing: 23,705

W .No. 57(5-48) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

OFFICE MEMORANDUMTO: Mr. S.R. Cope DATE: May 28, 1962

FROM: A. D. Spottswood

SUBJECT: Loan 213 -AUA - Austria - Aschach Project

Attached is a copy of a memorandum prepared by Mr. Butcher, ofthis Division, pointing out that the Verbundgesellschaft has not taken

action to increase its rates in accordance with Section 5.08 of the Loan

Agreement and, in fact, has not even acknowledged receipt of our letterof March 12, 1962 asking what action they had taken with regard to itsrates to bring the earnings of Verbundgesellschaft to a satisfactory level.On September 26, 1961 the Verbundgesellschaft has stated,in response toa letter from us, that they would let us have their proposals after theyhad studied the situation.

In view of the lack of action on the part of VerbundgesellschaftI concur in Mr. Butcherts recommendation that you bring this matter to

the attention of the Executive Director for Austria.

Attachment

ADS:bli

Mr. A. D. Spottswood May 24, 1962

L. 0. Butcher

Austria - Loan 213 AUA - Aschach

V/on August 29, 1961 we wrote to osterreiehische Elektrisitatswirtshafts--

Aktiengesellschaft about the necessity for a rate increase for the

Verbundgesellschaft and its affiliated companies. We asked for their views

and t heir proposals to remedy the situation. A copy of this letter was sent

to the Mlinistry of Finance of Austria, guarantor of the loan. On September

26 Osterreichiseche Elektrisitatsvirtschafts replied to our letter and stated

that after they h d studied the situation and discussed it with the guarantor

they would send rs their pronosals. As we had heard nothing more from

Osterreichische Llktrizitatswirtschafts we wrote to them again on March 12,1962 asking them to inform us what measures they had taken or intended to

take to bring the earnings of the Verbundgesellschaft to a satisfactorylevel. We have not received a reply or even an acknowledgement of this

letter.

In April 1962 we received some financial and operational statistics for

the year ending December 31, 1961. These confirm that sales, revenues and

the return on equity are still unsatisfactory. Mr. Jacob made the following

conmments on these statistics:

"Sales (in kwh) are about 8y less than TOD forecast, average revenue is

9' less than TOT) forecast and interest not capitalized is 6, higher thanforecast. Consequently the return on the equity is considerably lower than

expected. With net profit being only 2.2% of total equity, the agreement

about a reasonable return on equity equivalent to not less than the average

interest rate does not seerit to be met in 1961."

Section 5.08 of the Loan Agreement reads as follows:

"The Verbundgesellschaft shall from time to time as required apply foran adjustment of electric power rates to suc levels as will provide to theVerbundgesellsehaft and the affiliated companies gross revenues sufficientat least to cover (a) operating costs incurred thin the limits of prudentbusiness management, including proper provision for maintenance and for

depreciation or repayment of instalments of principal of debt when due,whichever is greater; (b) interest upon debt; and (c) a reasonable returnupon the equity."

Section 3.06 of the Guarantee Agreement reads as follows:

"The Guarantor covenants that it will from time to time, promptly uponreceipt of an application from the Verbundgesellschaft, adjust electricpower rates, or cause the same to be adjusted, to such levels as will pro-vide to the Verbundgesellschaft and the affiliated companies gross revenues

Mr. A. D. Spottswood -2- May 24s, 1962

sufficient at least to cover (a) operating costs incurred within the limitsof prudent business management, including proper provision for maintenance andfor depreciation or repayment of instalments of principal of debt lInen due,whicnever is greater; (b) interest upon debt; and (c) a reasonable returnupon the equity taking into account both sound public utility practices andthe maintenance of stable economic conditions within the territories of theGuarantor; all uein, in accordance with the provisions presently set forthin the Preisregelungsgesetz 1957 (Federal Law Gazette, No. 151 of July 11,1957) of the uarantor."

A iemorandun signed at the time the Loan was made (December, 1958)reads as follows:

"l. During the negotiations in Washington for the Aschach ProjectLoan the views of t e Pank sznd a memorandum of the Verbundesellschaftdated 3rd November, 1953, concerning the rate of return on the equity ofthe Verbund esell'cai t and its affiliated companies were discussed. Itwas agreed that under Section 5.08 of the Loan Agreement and Section 3.06of the Guarantee Agreement, a reasonable rate of return on the equitytaking one year with another is not less than the average cost of borrowedfunds to the Verbundgesellschaft and its affiliated companies.

"2. Representatives of the Verbundgesellsc.aft empnasized tnat sincetne time of tAe p1eviaus Ican negotations with the Lank, rates of theVerbundgesellschaft system had been increased by approximately 25.5% andthat another application for an increase in rates at the iwesent time mightbe impracticable. It was agreed, however, that it was the intention of theparties concerned that any adjustments in rates required under Section 5.08of the Loan Agreement and Section 3.06 of the Luarantee Agreement should bemade within a reasonable time s that taking one year with another therequirements of this 'ection would be met.

INTERNATIONAL BANK FOR RECONSTRUCTIONAND DisLOiNT

/e/ Eugene R. Black, President

OSTEWRIICE i LEJKTRIZITATSWIRTSCHAfTSAXTL9I GEJ LLS3caAFT (VERBUNDGESELLSGHAFI)

/s/ Dr. Wilfried PlatzerAuthorized Representative

"1. 'he Guarautor has taken notice of the above statement. It acceptsthe formula on a reasonable return on equity expressed therein to be ingeneral economically justified and also to be applicable in principle in itsterritory, it being understood that its obligations determined in Article 3.06of the Guarantee Agreement remain unchanged.

REPUBLIC OF AUSTRIA

/s/ Dr. Wilfried PlatzerAuthorized Representative"

Mr. A. D. Spottswood - 3 - May 24, 1962

In order to get soie action on this matter I suggest that we ask theTepartment of Onerations - Europe to bring this matter to the attention ofthe Executive Director for Austria.

GB mh

Mr. Collier

Room 805

Osterreichische Elektrizitatswirtschafts-AktiengesellschaftHead Office,6A Am Hof, Vienna I, Austria

25th April 1962

IBRD,1818 H Street, N.W.,Washington 25, D.C.

Subject: AUA 213Earnings position of the Verbundkonzern.Verbundgesellschaft Electricity Rate

Gentlemen:

We thank you for your letter of 12th March 1962 and very much regretthat we were not able until now to let you have a specific reply to the

enquiry raised.

On the basis of the present state of progress of our studies and the

present situation of the market for electric power, we have formed the

opinion that after completion of our investigations we shall be submittingto the competent Austrian authorities an application for amendment andchange in structure of our rates.

The following are the considerations material to this decision:

1) As is known, our rates were last increased in the summer of 1958,though the extent of that increase was not in accordance with our appli-cation. We were concerned then to obtain acceptance and approval of areasonable rate of return on our equity. We had originally applied foran increase in rates of 23.34%, by reference to a return on equity of4%. The Price Commission-a66epted an increase of 13.67%, on the basisof a return of about 2-1/2% on equity and after taking into accountvarious other changes in costs, but the Price Authority ultimatelyapproved an increase in the charge for power of only 5%, which meantthat the rate charged no longer yielded any return onlquity. We informedyou in detail on this aspect in our negotiations at the end of 1958.

2) In the meantime, the cost structure of power generation has under-gone considerable changes. In particular the intensified expansion of thesteam power plants based on domestic brown coal carried out in agreementwith the World Bank has not proved sufficiently competitive. Until only

a few years ago, domestic brown coal was so cheap compared with pit coal,

TRANSLATION SECTION 6o4/62

Translated From: German 6/8/62 By: GAG:asl;MR

-2-

which had to be imported, and fuel oil, as to eliminate competition fromthese, and long-term contracts were therefore concluded for the supply ofcoal for the thermal power plants of the Verbundkonzern which had beenbuilt for fuelling by brown coal. Since then, however, this position hasbeen reversed, a phenomenon which applies not only to Austria but alsoto most other European countries (see the Sir Harold Hartley, Euratom andRobinson Reports).

3) Meanwhile, many of our customers have built plants for thegeneration of electricity by steam, using oil and natural gas as fuel,which offer serious competition to our own steam power plants based ondomestic brown coal, which are in consequence temporarily unable to work a

to full capacity. It is true that with the further growth of powerconsumption, an improvement is to be expected in the possibilities ofutilising our existing thermal plants while it must also be borne in mindthat our thermal plants have also to make up for the deficiency of hydro-electric power in bad years and a corresponding capacity must therefore,in the interests of the economy, remain available.

4) It is an internationally accepted principle that the hydro-electricresources of a country should be expanded up to the full limit of profitableworking. Water power constantly renews itself in the eternal cycle of natureand over the years these investments show a marked cost reduction. The oldhydro-electric installations are to an increasing extent becoming the back-bone of our Undertaking.

5) The construction of new hydro-electric power plants is at presentseverely affected by high building costs but especially by the rise incapital costs. This has a particularly marked effect on cost calculationsduring the first few years after the plant is taken into service.

6) Despite the above, the Undertaking is not free to restrict itsconstruction, since one of its most important tasks is to ensureprovision of the amount of electric power required by the economy at anygiven time. On the other hand, however, to slow down the pace at whichwe have been building would give rise to a continuous increase in theearning capacity on equity, as a cogsequence of the steady relativereduction of costs in our power installations.

7) Having regard to these circumstances, it has been the constantendeavour of the Company to augment capital funds by, in addition toFederal budget funds, cheap loans (ERP funds, foreign loans guaranteedby the Austrian Federal government) and thereby to keep down the averagerate of interest over the whole of the investment capital.

As you are aware, our arguments were accepted by the Federal Government,which by the EFG (Law for the Promotion of the Electricity Industry) of 1953created an important prerequisite for the further expansion of our electricityindustry.

-3-

The above Law expires in 1963, when we anticipate that in view ofthe very great increase in the demands made on the electricity industrysince 1953, it will be renewed in some suitable form.

8) The problem of modification of the electric power rates structurein Austria does not concern only the Verbundgesellschaft. Thus,discussions relating to the rates have been in progress for some con-siderable time within the Austrian Electricity Industry Federation, withthe object of inducing the Price Authority to give greater weight to theinterests of the electricity supply undertakings.

We trust that you will conclude from our statements that we are fullyconscious of the importance and significance of ensuring a reasonable rateof return on equity and that we are striving to take all possible actionto achieve a positive earnings position for the Verbundkonzern.

Yours faithfully,

(Signatures)

OSTERREICHISCHEELECTRIZITTSW1IRTSCHAFTS-

AKTIENGESELLSCHAFT

Usterreichische i : .1Elektrizitdtswirtschafts-Aktiengesellschaft Hof 6. Tl 1

(Ver u nge sliscoff)Am Hof 6A, Tel. 63-07-71(verbundgesellschoft)

DIRE KTIO N

International Bank for0econstruction and Devel TRASL

1816 I. Street IT.W.

Washin'gton D.C.JUN 8 1962

Betrifft: AUA 21j,Ertraslae tes Verbundlonzerns,Verb ,ndtani

Sehr geehrte Herren!

Wir bestdti o'en den Empfanr ; Ihres Schreibens vom 12. MLrz ds.J.

Es tnt uns aisserordentlich leid, dass wir Ihnen auf die sei-

nerzeitige Anfrae bishr nocn keine lonkrete Antwort e-ben

konnten.

Wir sind auf Grund des Standes unserer Studien und der der-

zeitigen MarktlagE fUr elektrisohen Strom zur Auffassung gekom-

men, diass wir einen Antrag nut Anderung unserer Tarife - verbun-

den mit einer Strukturinderung - nach Abschluss uinserer Unter-

sucbunjen bei den zustbndigen Stellen in 6sterreich einbringen

werden.

Hie"Ur siiid fol-ende Jberlegungen rnassgebend:

1.) Es ist bekannt, dass insere letzte Tariferhhung im Sommer

195 erfolgte, und zwar in einem Ausmass, das unserem Antragncicht entsprach . Wir waren bestre, eine angemessene Verzin-

sung unseres Eigenkapitals anerIann- und genehmigt zu erhal-

ten. Entsprechend einer Verzinsung des Eigenkapitals von 4hatten wir urspringlicl- eine Tariferhhung um 23,34 %' bean-

tragt. Die Preiskommission bat dann entsprechend einer rund

2 1/2 rijien Verzinsung des Eienikapitals und nach Berucksich-

tigung diverser anderer Kostenverdnderungen 13,( Gy anerkannt,

r ECEI'. 7,'

GE: ~12' U5b

doch wurde von der Preisbehrde letzten Endes nur eine9 Niie Strompreiserhi un; genehmi-t. Dadurch war eine Ver-

zinsi nmg des Eigenrkapitals im Tarif nicht mehr entialten.

Wir 1 aben Ihnen hieruber bei unseren Verandlunaen Ende 1958ausfTdrlich berichtet.

2.) In der Zwischenzeit laben sich in der Kostenstrukitur derStronlerzeufrun> wesentliehe Anderungen erneeen. Der insbeson-dere im Einvernehmen mit der Weltbank forcierte Ausbau derDampnfkraftwerke auf Leimischer Braunkohlenbasis erwies sichals wenig konkurrenzf2higj. W~rrend nocI. vor weni-en Jahrendie einheimische Brannkaohle konkurrenzlos -lii gegenuberder zu importierenden sjteinkohle bzw. dem Heiz3l war und anGrund diesen Verhltnisoe fUr die aunf rankaolenbasis er-richteten Ialorischen Kratwerke des Verbundkonzerns lang-

nriie Kohle-LiefervertrLge abjeschlossen wurden, hat sichdiese Situation in der Zwischenzeit rlmedreit. Diese Er-scheinunr betrifft nich t nur die Ver 7 ltnisse in Vsterrich,sondern auch die in den meisten europ*isLc: en Staaten. (SieheSir I arold Hartleya _-_eriht, Euratotm-dorich , Roiinsn-Benic't )

~. ) In den Zwisal zait sind von vielen nsrer Abn'hmer Dpora nmarke au 61- lnd End 'Iasnass ennich 0 e irden, die unsere

Da' ' krn)ftwerk au inl.ndiscX er Brank sa &rk knrrenzie-maen . Tiube a end knieno somit naee Damp 'kra twonke nicht

v).la ain bstz werdan. it dom witeren Anacsei des Srol-ve r a 'as ist wohl auceine Verbessernn den EinsatzmPi1ch -

keiten unseer bestehenden thermischnien Alaen zu erwarten. Esdar) auich nicjt ausser Acht gelassen werden, dass unsere kalo-

nisc en Anla en auch fUr aen Ausfall der lasserckrafterze u'unin suc]l ech toMn Jairen auf kommen mUssen id iielUr im volksuwirt-schaftlic)en Interesse eine entsprechende Kapaz itlit zu r Ver-LU n. -tehen mns.

4.) Es ;ill- als international anekannbes Prinzip, die UasserlrUlteaens Land!s ' is z r G e d 'n Wirtsc natlickleit auszubauen.

Die Wass nlrraft erneaert sic' i eien Natu r uilauf selbstund IUr die Investlti( en ergibt sic iM Laufe der Janre einestarke K lstende ression. Die alten Wasserkraitanla;en hildenim zunehmendenl Masse das RUckgrat unseres Konzerns.

Der Bau neuer Wasserlraftwerke ist Loenwdrti- stark belastetdurch hohe Baukosten, Desonders abera durch. die Verteu).erung derKapitalkosten. Dieser Umstand wirlkt sich auf die Kostenrech -nung in den ersten Jaliren nach Inbetriebnahme oesonders starkaus.

.) Trotz der vorangefUlirten GrUide kann die BautdtiLkeit der Ver-bundgesellsciaft nichit beliebi g; eingeschrUnkt werden, weil eseine der wicitiLsten Aufgalben der Verbundaesellschaft ist, IfUr

die jeweils gesicIerte Bereitstellung der in der Wirtschaft be-ndtigten Mene an elektrischer Energie Zu sorgen. Dem stehtallerdings ,eLenUber, dass durchl eine Einschrankung9 der bisheri-,en Baut-tigkeit infolge der steten Kostendegression in unserenKraftwerken sich ein kontinuierlicher Anstieg der Verzinsungs-

mrglichkeit fUr Eigenkapital ergeben wtirde.

7.),In Anbetracht dieser Urstande war unsere Gesellschaft stetsbemUht, neben Budgetmitteln des Bundes zur Kapitalaufstockungbillige Kredite (ERP-Mlittel, auslndische Kredite mit 6ster-reichischer Bundesgarantie) zu beschaffen, und so den Misch-zinsfuss fUr das resarmte Investitionskapital niedri-er zuhalten.

Wie Ihnen bekannt, hat die Dundesrerierung nrsere Arg iente an-erikanrit und in Elektrizitdtsdrderun- s-esetz (EFG 1953) einewichti e Voraussetzuinm fur den weiteren Ausbau unserer Elektrizi-taswirtscIhaft g:eschaff1en.

Die Giltiske it des EFG lduft im Jahre 19(3 ab. Wir rechnen damit,dass es entsprecoend den seit 195 stark an-ewachrsenen Bedurf-nissen der Elektrizittswirtschaft in Ceeigneter Form erneuertwird.

5.) Das Protlem der Strukcturdnderun- der Tarife fUr die elektrischeEnertie in Usterreich betrifft nicht n"r den Verbundkonzernallein-. Es ist da scoC (n seit I nir eit im Verdand derElektrizittswerke (sterreichs eine Dislussion Ubor die Tarifeim Gange, die eine stHrkerc BerUcksichtiung der Interessen derElektrizitatsversrnrgunsunern~eeunren ei der Preisbe>~rdez,1 Ziele -Iat.

Wir- 1.-99e' , Sie kUne unsrrie Ausefnuhu l entneirmen, class xiruns der TraCite der Sicherstellun-j einer an ;onnemsenien Verzinsungunseres Eis ,,k)ita' ls voll bs ind -ud dass c irn beii-,uen

lmn Rahiien de M1-liciien aileS zu -uiternehmen, die Ert ragslagedes Vorbundk-onze uns enitsporochend )ositiv zu Jestalte.

Wir zeic'ce mit vorzUj1ichTier Hochachistung

Us terre ichi s cheElicktrizitU'cswirctscha-fi"--

Aktienf 11esellschaf'r

March 12, 1962

esterreichische Elektrizits-wirtschafto - A. G.

Am Hof 6Vienna, Austria

Loan No. 213-AUA

Gentlemen

In your letter of September 26, 1961 you informed us

that you had been studying the rates charged for electric power

by the Verbundgesllschaft and that, after you had completed

your study and had ha discussions with representatives of the

Government, you would in detail to the points raised in

our letter of Au,;ust 29. As we have not heard from you on this

matter since your letter of September 26, we are writing to ask

you to inform us what measures you have taken or intend to take

to bring the earnings of the Verbundgsellschaft to a satisfac-

tory level.

Yours sincerely,


Europe, Africa and Australasia

LGButcher:th cc: Mr. AldwereldMr. CollierMr. ButcherDiv. Files

FOAM Noi75(2.69) INTERNATIONAL BANK FOR

RECONSTRUCTION AND DEVELOPMENT

DateROUTING SLIP

NAME ROOM NO.

To Handle Note and FileAppropriate Disposition Note and ReturnApproval Prepare ReplyComment Per Our ConversationFull Report RecommendationInformation S__ SignatureIn i t i a I Send On

REM

FORM No. 75(2.60) INTERNATIONAL BANK FOR


DateROUTING SLIP

NAME ROOM NO.

o Handle Note and FileAppropriate Disposition Note and ReturnApproval Prepare Reply

Comment Per Our ConversationFull Report Recommendation

Information SignatureInitial Send On

RE*S

From

Mr. Collier

Room 803Osterreichische Elektrizitatswirtschafts-

Aktiengesellschaft6a Am Hof, Vienna I, Austria

26 September 1961

International Bank for Reconstructionand Development1818 H Street, N.W.Washington, D.C.

Subject: AUA 213Dear Sirs,

We thank you for your letter of 29th August 1961 and would first ofall like to assure you that we are making every possible endeavour to complywith the conditions entered into in the loan agreement. The problem whichyou raise is without doubt a very complex one and we have already beenengaged on this for some considerable time. Our position is not only boundup with the special circumstances prevailing in Austria itself but is alsoaffected by a change in the structure of the European electric and powerindustry. As soon as we have completed our investigations and have had thenecessary discussion with the guarantor, the representatives of the Republicof Austria, we shall reply to your points in detail and submit to you ourcorresponding proposals.

We should be grateful for your patience until then and remain,

Yours faithfully,

Osterreichische Elektrizitatswirtschafts-Aktiengesellschaft

(signatures)

TRANSLATION SECTION

Translated From: German 10/13/61 By: GAG:ec 905/6i

E sterreichische Wien, 26.September 1961Elektrizittswirtschafts-Aktiengeselischaft I., Am Hof6A, Postfach67

Verbuncdgesellschaft

An die


1818 H Street, N.W.


USA

TRANSLATED1hre Zeichen Ihre Nachicht vorn Unser ZeIchen

OCTI 3 1961 Prok.He/Ob

L.B.R D.Betrifft: AUA 213


Wir bestatigen den Empfang Ihres geschatzten Schreibens vom

29.8.ds.J. und m6chten Ihnen zundchst versichern, daB wir auf das AuBerste

bemUht sind, die seinerzeit im Kreditvertrag eingegangenen Bedingungen voll

zu erfUllen. Das von Ihnen angeschnittene Problem ist zweifelsohne sehr

komplex und wir sind bereits seit ldngerer Zeit hiemit befa3t. Unsere Situa-

tion hdngt nicht nur mit den besonderen Verhdltnissen in Osterreich selbst

zusammen, sondern ist auch bedingt durch einen Strukturwandel in der europdi-

schen Energiewirtschaft. Sobald wir unsere Untersuchungen abgeschlossen ha-

ben und die notwendige RUcksprache mit dem Garantor, den Vertretern der Re-

publik Usterreich, gepflogen haben, werden wir im Detail zu Ihren Ausfuhrun-

gen Stellung nehmen und Ihnen entsprechende Vorschldge unterbreiten.

Wir bitten Sie, sich bis dahin zu gedulden und zeichnen

mit vorzuglicher Hochachtung

OsterreichischeElektrizitdtswirtschfts-

A 'engeselish

Telephon 63 07 71 Fernschreiber Wien 1904 Telegrammadresse: Verbundnetz Postsparkassenkonto 18 468

.9-.'.-.

August 31, 1 1

ent~eo-en:

TI , 233 A

toe ro w tn I ucOnrceton nt! t n' rentr "ronemntbet, ,en us :ted Decer mr 2, , e td lt eeto 3.w tereof

'a' we o ert t t for 'octrooer yt e J r1 es)' o ft.

te r vs rece ty ief o fqvnc ' ro t non of theVerbA e ehr t with -r0re 7 t ves or th- rcnxy It

p pra t t it e rt. ns 1 ye - uen to r A extreA o figure.1 h:ve tver- f re 80t out o- vows n i I tter to the

'Orbn in!! O r ft r, m e t to ) t As cv wh: tletio te7 reo t tke. I cc of our letter is ecloed.

Y urs a icere ,

W . T .C rVD-arect r f Jerettorns

rc e, 'r~c r, -stri au

Enclosure

dit;of>- e ceil-srt> s

Vnn , n-7

Cleared th: ir. v SA sveltr. VIAen

Mr. k1car

4 ) T~? aC

0 ~ ttr. AleWrd ' S st 30 1961

This aw mr e to very rinaU ir4m: . T .t ain dent exnet, the o ion of a thiri Iid 1a t stitbnsbr it

to bo r nVea t i t p-v it re oit a nAitWve W iuea-O i l& f ; noible man n Q at r7a-.d. g'i for 1trata en oly o in Ietiy furt hr suort far ai vtremstenin '1nvetitnekdit not on the 1e Io K i Ao ,i A vatr!a or .jy~nera1 sertoe e irrautert tur/s in the atrtan enital r t

I.Ih M two~ bars of 10.7 edflion (1957) a 29 elilona (l95)to Iomtttonarnit. 6. v11io o e seon loan: we 1ndie1araed

as f 1o~her 1, 19*0, but it is ecetd tIt aUl the institution'spresently avail le lan TAl AU he di rd by 1961.

t nild v0r tat to w 3 haw rAvTeO abt 1,75e oftheloan oani. tabhe in ari~rph 5 only show Nn6.5 millon disbursed and

uzlsbarivam fr' Iof n Uo with a totl of 19.7 gion in h,t~o bne stiod abov. I don't aderand is disreaey tnoas

ther have been sor npymte.

The olloing qtestions nirh e h sd

f a) If u-titonskr t on 7 rrow at 51 in the wies rket(see oa. 6), too Zint ,ade in Ira. 10 rgarin, theadIman . of the "1" interest 5 1 loan (-3/ r) doe notseer M w

(b) ai rctionsd above, the area corndu r aes its cas. onthe desirability ,'' rmt abadening In estitionskredit before

it has sotten a :o strt. Since IEi ns to ha proviedOWTr o0 f Its omita1 to dae, a is nt very oormineing.Te sikin at is the very hi h debt equity ratio of the

bnetitotin with only 1.6 Miian of equity. dvn tsing theable in ragrao 5, mA- t e a debt e ratio of

mnre tha 6:1, we4ch, of , rse, wi'llice further as tirest of te I iJ mony is dis ~r&d and if th :3viss fundsare otin1& i . e rtn seens to arioe . tther

Ma] se e it be obtained.

(e) ara #tr1 U' new*o ilyt a the cnmetition CtanXrttoni re It 1t eneotmerin fron oV'nr lending instita-

tions in A istria is an arguwrt f or a f7:rther Ih D loan.mth e tr +r I wvd t ink ti at it is evi :oa oIf an activecanita rr t in tstria an orha the abeeonce of red''or tu- r ak e t n si t ti,.

1Tatiazrdd

JHVT Tf - Ss

cr rt Mr. Spottswood

au as t *ea mtt rd r M s utw

!. Fteint

cct~ t: r. va Ssoo l.

on th r. Fntinee ebrdnenwsls hnM

r. an asvet leri o r e e ov

"-

t t ;a Z 0 ttc m

, r v :.~.O t .: t - r t S to a 7 V7p U '7 C

see re.3 tsiuaio e eed is o no 0hteeayt rs tou tev t

remedry 7

&r17 %

9iree fC rtiod

FO(g5 48) 57 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

OF, E MEMORANDUMTO:M. J.H. Collier DATE: August 23, 1961

FROM: A. D. Spottswood

SUBJECT:Draft letter - August 21, 1961 - re: financial situation of Verbundgesellschaft

I suggest the part of the letter to Verbundgesellschaft on the top ofpage 2, be revised as follows:

"The return on the equity of the Verbundkonzern has declined from 3.7% in1958 to 1.5% in 1960. Despite the fact that a new contract has beennegotiated with the Federal Republic of Germany which provides formore favorable prices for energy exported by the Verbundgesellschaft,the return on equity is not expected to increase substantially. Accord-ing to the forecast given to Mr. Spottswood, the return on equity isestimated to be 3.2% in 1961 and 1962, to drop to 2.4% in 1963 and torise to 5.6% in 1964. The return in 1964, however, is understood to bebased on an amount of assets which will probably be changed when certainnew construction now under consideration will be included in the assets.The returns, compared to the average interest of about 5-1/2% whichVerbundgesellschaft is now paying and with the prospect that this in-terest rate will increase, clearly indicates that the prices charged forthe sale of electric energy within Austria is too low. Further, thefigures show that the total interest paid by Verbundgesellschaft will notbe covered by gross income in the foreseeable future. It seems to us,therefore, that there are strong reasons for an increase in prices chargedfor electric power within Austria in order to bring the earnings forVerbundgesellschaft and its affiliated companies to a satisfactory level.We would appreciate it if you would let us have your views on this situa-tion and on steps you propose to take to remedy it."

I recommend further that a letter along similar lines be sent to theAustrian Government enclosing a copy of our letter to Verbundgesellschaft.

ADS:bli

VA

I q

*

1AI

unima V (16 <eS a e oerK n m

~ 6~1 Vd

01c

AA

-a '

kt/k

a-p " /

a &

AK& 4

cc: Mr.Aldewereld

COPIFD 1O HAN RITTE LT EF RC'D JULY 1B/61

Vienna, Austr~Am

July 15, 1961

Dear Larioo.

Many thanks for your letter of' July 1lth (and enclosures) which was

received yesterday on the eve of my departure for an inspection of the

Ybbs-iersenbeug project.

My draft report on the Yobs-Persenbeug project and the Aschach project

and on the financial position of the VG is enclosed. My report on the Sena

project (-hich is ok) will follow later. I just received today the cost

data I asked for when I was in Rome.

i noted with interest the cable sent to LlA. I hope the Bank follows

your vary good advice set forth in your io-emo to iem - with which I thoroughly

agree. It is about time we get tough.

I read Matter's memo with great interest. I hope the ank remains firm

and will not move until satisfactory rates have been put into effect. (Hex.)

We are scheduled to lcave tonorrow (Sunday) for regonz and on the 19th

I expect to meet Mr. Frey of Motor Colombus in Zurich and bosides talkingto him about the position in Ghana I expect to visit the offices of Motor

Columbus in }aden. lope you sent him the info.

We shall leave Zurich for Copenhagen on the 20th as scheduled.

You haven't mentioned Ghana. I wonder what the developmnents have been.

rease bring me up to date in your next letter. I can be reached in Copen-

hagen until July 30 (1 shall come back to Copenhagen from Norway).

It certainly keeps me busy, writing reports on the end-use inspections

as I comlete them. I did not allow ,uite enough time for report writing

without a secretary. I should have brought Barbara along. Please tell her

to correct any mistakes I might make in my pencil drafts. I am a poor proof

reader.

Midge :Miss B are having much fun and are enjoying the red carpet treat-

ment we have been receiving everywhere. Our health has been good. I have

tken the white medicine only once - and Miss B once. 14y ears bothered me

some after the flight to iAirat but antibiotics stopped the pain.

Regards to allSincerely,

/s/ Spotty

PS I received a letter from Seim re my salary raise and I have written

thanking him and also summarizing my report on the financial positionof the Verbundgesellschaft.

FORM No. 59(2- 55)

CROSS REFERENCE SHEET

COMMUNICATION:Letter

DATED: Jue 3, 1963

TO-TO0r:athinhe Eu trHotatvArtsfwtU A*G, An lof 6, Vieia, Austria.

FROM:J. H. GonU r

FILED UNDER:

SUMMARY:Acknmmledeing lettwr of mr 19, 1961 wnd noting changes made In

athorizatim of pers"n entitled to sign donnwwts and take action

ca your beatf mder Loan Agime oU os, 102, Wo0, 3I9 and 2&UA.

r -29 5 95 !6 9 ~ i T T ..:t TT::. :: x xi!88.............

OSTERREICHISCHE DONAUKRAFTWERKEAktiengesellsch aft

Vocsand: Dir. 01Ip. Ing. Han s B 6 hm er. Mr. Hann. M oa b a .,


1818, H. Street, N.W.

W a s h i n g t o n 25, D.C. T R A N S L A T I 0 N !

By air mail!Registered

ihe ZeIchon Ihr. Nachrlcht "m Unsor Zelchen Wien, am June 12, 1961Rev/Ku I. Hakonsta-fengas 6

aefra9fs: Loan No. 213 AUAProject Aschach

We may inform you that power of procuration has been extended

to our Mr. Wiesinger. Therefore we supplement our letter of

February 3, 1959 informing you that in addition to the clerks

of our Corporation mentioned in that letter, Mr. Wiesinger is

authorized too to sign withdrawal-applications from theabove

referenced Loan account per procura collective with one managing

director.

Enclosed please find the authenticated specimen signature of

Mr. Wiesinger.

Sincerely yours

Enlcosure OSTERREICHISCHE DONAUKRAFTWERKEAktiengesellschaft

OSTERREICHISCHE DONAUKRAFTWERKEA kti en g e sell sc ha ft

VOrst..d: DMr. Dipl. Ing. Hans 86hrnsor, Dir. Hann. Moab.r.

An dieInternational Bankfor Reconstructionand Development

1818 , H. Street, N.W.


By air mail! luftpost!Registered! Eingeschrieben!

16r Z.ich.n hr. Nachricho vorn Un..rZ.n ienam 12.6 1961Ze / u I. Hoh.n...f.ing..s. 6

Befir Anleihe Nr. IB 213 AUAProjekt Aschach

Wir erlauben uns, Ihnen mitzuteilen, da unserem Herrn Dkfm. Alois

Wiesinger die Kollektivprokura erteilt wurde. Wir erweite-rfndaher

unser Schreiben vom 3. Februar 1959 dahingehend, daB auBer den in

diesem Schreiben bereits angefihrten Herren unserer Gesellschaft,

auch Herr Prok. Dkfm. Wiesinger berechtigt ist, Abhebungsantrage

- die oben angefUhrte Anleihe betreffend - per procura gemeinsam

mit einem Vorstandsmitglied unserer Gesellschaft zu zeichnen.

Unserem heutigen Schreiben liegt eine beglaubigte Probe der Unter-

schrift von Herrn Prok. Dkfm. Wiesinger bei.

Hochachtungsvoll

Beilage OST REICHISCHE DONAUKRAFTWERKEAktiengesellschaft

Mosbauer Kralik

TattgrarmnaN I. Forai'uf: I ~~iho~:~~

Einlage mum Briefe an:

International Bank for Reconstructioand Development, Washington 25,D.C.

Betrifft: Loan No. 213 AUA

Wien. June 12, 19' 61

1sterr. DonaukraftwerkeAktiengesellschaft

L5-

DoKvW Nr.47

6

OSTERREICHISCHE DONAUKRAFTWVERKE Enclosure to our

Aktiengesellschaft letter of June12,1961

List of persons who are authorized for signature *)

(1st supplement)

Name S ecimen signature

2) Clerks who sign per procuration

Dkfm. Alois Wiesinger .................----------

The above listed person is empowered to sign in the following

way:

2) one managing director and one clerk collective

OST ICHISCHE DONAUKRAFTWERKEAktiengesellschaft

Mosbauer Kralik

*) Original List see enclosure toour letter of February 3, 1959

Mr.

311Osterreichisehe ElektrisitUtswirtscnaft s-Aktiengesellschaft Boom

(Austrian Electricity Co. Ltd.)

Interlocking EIectric System

Vienna, 9 Junc 1l61

International Bank for Reconstructionand Develcpment

ll U Z treet1 N.y.Sashington 25, .C. Cur ref.: DA/NB/Cch1,

.Re: fieports

Uc enclose the follow-Ing dcunents:

1. Conslidated s.atenent of assets of the interlocking electric -y-tem asof 31 December 1960.

2. Consolidated rofit ana loss account of the interlocidng electric systemas of 31 December 1960.

3. Operational statement on the pro Iuction and sale of current in 1960.

In connection with the statement of assets we wish to make the followingcoxuante:

nL calculating the profit for , as recorded in the statement on "sur-plus brout'ht forward" fron 1 , (5 . ' illion), allowance was made for specialwrite-offs enjoying tax privile es in the interlocking companies, totalling10L.5 nillion illillings, and for tee dissolution of free reserves, ai;ountingto 2.5 million schillings. This has resulted in decreasing the reserves bythe aount of the dissolution mentioned and adding the special write-offs tothe adjusted value. In ot .er words, if the dissolution of reserves and thespecial write-offs had not taken place, and if we ignore the 1958 surplus broughtfcrward (3.1 million schillings), t.e actual profit for 1959 would show theanount of 72.7 million schillin;s.

either the figures of the statement of assets nor those of the profit andloss account are final.

We apologize for the delay in submitting this report. Our next reortswill be forwarded to you on the day thoe are due. i.e. 30 June 1961; in fact,they will already be submitted, in part, to your Mr. Spottswood.

Yours

Austrian lectricity Co. Ltd.(Jignatures illegible)

52i /61

g " ECTION AB:iaks:ec

Translated From: By:

-2-

Consolidated statement off the interlhckinw systeni

(in million sciillings)

Assets

nus ra m Donau D. Total

~operAtin plants 1,437, I,96 ... 2,896.5 I - . 2,214.1 12. 13,160.0

Lees 8Ur aplied -334.7 -622. - 2.2 -217 -24.5 -24. -1,744.7to depreciation ___________________

Net bool value 1, 3.1 4,337.3 2 476.3 242.5 2 . 166.5 11,415.3

pant s Un derconstruct Iona) present value

of' plants underconructLon 3l.6 l.8 412.7 24.5 692.7 37. 1,<12.3

b) tart panents 23.5 4.3 J3o.? 23.5 21.2 65 412.7o a cdplnts

Uer construct m 332. 113.1 33, 273.Y 332. 1 2.5 2,305.(~rtc: ntens 3.1 2.3 .1 -6.5

Lnocterrn rece i'able~a) roa consoiated

1manies 2<.4 2.2 .7 - - 310.3b) fro others m. -21.2 10.0 65.9 -66.3

ttl of long--ternrecdvabies J 0 .2 31.5 10.0 165.9 - 1,176.6

Crcnlating assetsa) ash: and bangs 47.. .2 1.3 2.9 2.5 0.1 490.4

;ecunes for saleof current 17 .9 1.8 .5 - 1.6 - 174.8

c) Jtoco on handnd securities 33.2 1.6 1 1.3 - - 205.9

d) ~ter circulairnassts 1 .7 3.4 15.o 12.7 C,4 102.8

~otal of' circuifnsets 732.) 34 .3 172.3 1. 16.8 0.5 973

Trrns itory item -ad-uvsting of accounts 2,.4 93.7 6>. 11.9 111.1 - 305.1

Total Assets 3,I67.2 1.,581.9 3 282,3 1,557.2 3,324.3 269.5 16,102.4

Reciproeal claims -nd liaiities have been offset apainat one another.

Vionna, 25 May 1961

Consoidate statmentOf the itrokn yt

Liabilities .. .C~~ ~~~~ 3 ru En oaotal

'tock capita1 665.0 929.0 500.0 400.0 500.0 19.7 3,47.7

I0ss outstanding~deposits - - -16.7 - - - -16.7

Capital r e - - - - 236.4 - 23.4

tagal reserve 150.5 619.2 28.6 438.8 - - 1,497.1

Free reserve 210.0 150.0 4.9 72.5 - - 437.4

1959 surplus broughtfor ard 0.1 1.8 0.5 10.0 -3.6 - .8

Provisional Lofit 1960 11.6 19.5 8.0 4 5,6 3.9 4.0

Total stock capital androseves 1,037.2 1,719.5 785.3 926.7 738.4 198.6 5,405.7

Lon term liabilities

(a) with eonsolidated 35.9 - 1.4 2.2 - - 39.5compnies

(b) with others 552.Z 2,802.5 2263.5 685,0 2,845.9 10.46

Total of long termliabilities 1,588.6 2,802,5 2,26.,9 687.2 2,845,9 - 10,189.1

hort term liabilities 99.9 22.L 119.6 20.4 75.8 2.5 341.0

oservos 132.3 .37.1 35.6 5.4 32.5 0.8 243.7

Transitorr ituea -ad lusting of accoults 1.9 - - 1.0 - - 2.9

Total liabilities 2,59.9 4,581.9 3,205.4 1,640.7 3,692.6 201.9 16,182,4

Conoliate oLegt a 1oss &ccon othre

interlckinRelectic erte . for 9>

Clwrrnt produced6,521,097

Sal* off pwer5,708.635

Arage a e-pri c per kWh 23.6F,A) 2 3.4g

(in miUon shillings)

1,357.7512. rm other sourcea

3. .Total eris

1,417.301

4. Purchae of curent122.826

5. )pPrating pnse. 440.943

7. 342.1917. Taxes

, Total xpendte 969.4799. Giross earnings (3--8)47.2

447.82210. Total interest 475.198

1U. Interet on construction loans 1.38212. Interest on working capital 393.81613. G'Oss profit (9-12) 54.006

Vienna, 29 TAy 1961

Op VaiQna st5V& Vi of the initer-lookina

syVmei fo the year 196O

(injb

A) PrAdution output '>,l98.1

13) Purchases

(a) iots 15l.4

( ) d mai U. cae 171.6

Total 6,521.1

()eprt8 a67. a

(b)d da tic &al! o,66.3

Total * 5,933,3

D) Iosses 269.7

E)Onneed and puap cwroent 318.1

FORM No. 59(2.-55)

CROSS REFERENCE SHEET

COMMUNICATION: M

DATED:

TO: y

FROM:

FILED UNDER:

SUMMARY: - 140 32 314, 3aS

OsterreichischeElektrizitutswirtschafts-AktiengeselIschaft i, Am o. Mi PoSt9a 6

Verbundgesellschaft

An



1hre Zeichen 1hre Nachricht vorn Unser Zaichen

FA/Sk/Sj

Betr.: Nachweis der Bevollmdchtigung

Mit unserem Schreiben vom 16.12.1954 haben wir Ihnen durch Uber-

sendung der notariell beglaubigten Musterunterschriften den Nachweis der

bevollmdchtigten Personen unserer Gesellschaft erbracht, rechtsverbind-

lich im Sinne der Kreditvorschriften Nr. 4 vom 15.10-1952, Abschnitt VIII,

8.02 zu zeichnen.

Durch das Ausscheiden der Herren Generaldirektor Dr.Rudolf STAHL

und Direktor Dr.Karl KOLLIKER aus dem Vorstand, sind diese beiden Herren

nicht mehr zeichnungsberechtigt. Dagegen wurde in den Vorstand Herr

Direktor Dipl.Ing. Otto SYKORA neu kooptiert, auf den die Zeichnungs-

berechtigung ausgedehnt wird. Es sind daher zur Zeit folgende Vorstands-

mitglieder zeichnungsberechtigt :

Generaldirektor Dipl.Ing.Franz HINTERMAYERGeneraldirektor-Stellv.Prof.Dr.Oskar VASDirektor Dipl.Ing.Otto SYKORA.

Weiters wird noch Herrn

Prokurist Friedrich HERMANN

die Zeichnungsberechtigung erteilt.

Von den vorstehend genannten Herren sind jeweils zwei gemeinsam

zeichnungsberechtigt.

Die Unterschriftsproben fUr die schon bisher zeichnungsberechtigt

gewesenen Herren Generaldirektor Dipl.Ing. Franz HINTERMAYER und General-

direktor-Stellvertreter Prof.Dr. VAS sind Ihnen seinerzeit notariell

beglaubigt tiberreicht worden, fUr die neu zeiohnungsberechtigten Herren

Direktor Dipl.Ing.Otto SYKORA undProkurist Friedrich HERMANN

Telephon 68 07 71 Fernschrelber Wien 1904 Telegrammadresse: Verbundnetz Postsparkassenkonto 18 468

OSTERREICHISCHE ELEKTRIZITATSWIRTSCHAFTS-AKTIENGESLLSCHAFT TAG 19. Mai 1961

Nachweis der2. BLATT An International Bank for Reconstruction BETRIFFT;Bevollmschtigung

and Develornment, Washington

beehren wir uns, Ihnen in der Beilage die notariell beglaubtigten

Musterunterschriften zu Uberreichen.

Mit der h5flichen Bitte um Kenntnisnahme empfehlen wir

uns Ihnen

mit vorzUglicher Hochachtung

OsterreichischeElektrizitdtswirtschafts-

tiengesellschaf

Beilage

Osterreich ischeWien, 19. Mai 1961

Elektrizitktswi rtschafts-Aktiengesel Ischaft I., Am Hof 6 A. Postfach 67

Verbundgeselisch aft

An



Ihre Zeichan thre Nachricht vom Unsor Zachen

Unterschriftproben

fur Weltbankkredit gemdss Kreditvorschriften Nr.4Abschnitt VIII 8.02

Direktor Dipl.Ing.Otto Sykora:

Prokurist Friedrich Hermann:

Von den vorstehend Genannten zeichnen rechtsgUltig je zwei Herren gemeinsam.

Beurk.11er.Zahl : 654/1961

Die ,chtheit der vorstehender Unterschriftdes Herrr Direktor Dipl.IrC. (tto S y k o r a

iors'ardsmitrlied urd.-- ---------

des Herrn iriedrich H e r m a n , raokurist

der UiTi 7iIGII HE L.KTP1ZIj .I1T 3iIAPI% -

AiiI >LLSHAIT mit dem Kitze in "ien I.,Am Hof 6 a, wird hiermit bstdti 't.------

dien, am einu ddreissirster Mai Eintau sendreun=

hundertein ndsechzir. -

Z" als mit Bescvul des frasidenten des* -. Landesgerichtes f. ZRS in Wien vom

18.5.1c,61 Pers 4 L 3.43 bestellterI

e*? Substitut des bffentlichen NotarsDr. Egon Lehner-BolzaniTelephon 63 07 71 Fernschreiber Wien 1904 Telegram madresse: Verbundnetz Postsparkassenkonto 18 468

Einiage zum Briefe an:

International Bank forReconstruction and DevelopmentW a a hin g to n 6.

Berifft: Nachweis. ,d.Bevollmxchtigung

Wien, 19.5.61

UsterreichischeElIktrizititswirtschafts-Aktiengeseltschaft

(Verbundgeseisdaft)

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

OFFICE EYORANDTUM

TO: Mr. A. D. Spottswood DATE: June 8, 1961

FROM: S. Aldewereld

SUBJECT: Terms of Reference - Lebanon, Italy, Austria, Denmark and Norway

Before you go to Rome to attend the Meeting of the Inter-national Congress on Large Dams from June 25-30, you should go toBeirut to make an end-use inspection of the Litani River Project(Loan 129 LE) and subsequent to the Meeting of the InternationalCommittee on Large Dams, you should also make inspections of thefollowing projects:

Italy

Senn Nuclear Power Project (Loan 235 IT),Thermal Power Project, Naples (Loan 189 IT),IMercure Thermal Power Project (Loan 224 IT).

Austria

Aschach Power Project (Loan 213 AUA),Lunersee Project (Loan 179 AUA).

Denmark

Thermal Power Projects (Loan 218 DE).

Norway

Tokke Expansion Project (Loan 270 NO).

cc: Messrs. Squire (8)LejeuneStevensonMarshall (8)

Miss Van Gasse (2)Op. Files (9)

May 31, 1961

Dipl. Ing. Franz HintermayerDirector GeneralVerbundgesellschaftAm Hof 6Vienna, Austria

Dear Mr. Hintermayer:

Thank you for your letter of May 25 regarding my visit

during July. I have reserved rooms at the Bristol Hotel

from July 9 to 13 and would appreciate your confirming this

for me some time prior to my arrival.

Sincerely yours,

A. D. SpottswoodChief, Public Utilities Division

Department of Technical Operations

41-ay 19, 1961

Dipl. Ing. Franz HintermayerDirector GeneralVerbundgesellschaftAm Hof 6Vienna, Austria

Dear Mr. Hintermayer:

I expect to attend a meeting of the International Com-mittee on Large Dams to be held in Rome June 25-30 and afterthe meeting I plan to make an inspection of some of theprojects in Austria which the Bank has assisted in financing.

I plan to arrive in Vienna on July 9 and would like todiscuss with the Verbundgesellschaft progress of the workon Bank-financed projects and also the financtal position ofthe organization. For the latter, it would be greatlyappreciated if Mr. Herrmann could have prepared the usualfinancial projections, balance sheets etc., which he has inthe past prepared in accordance with suggestions of Mr.Filippi.

I would like to plan visits to the Ybbs-Ptersenberg andAschach Projects during my visit; the details, however, couldbe arranged after my arrival in Vienna. I am planning totravel from Italy to Vienna by train and will let you knowthe exact time of arrival later. I shall probably stay atthe Bristol Hotel.

I would appreciate your letting me know if these datesare convenient to you.

Sincerely yours,



cc: Messrs. LefortADS: bli Marshall

May 10, 1961

Gentlement

We refer to your letter of April 15, 196] concern-ing your finuancivl require snts for the Aschacb projectin 1961. We cre quite agreeable to your request forpermission to withdraw, in the third quarter, the amounts&lloce ted for wi~thdrawal in both the third end the fourthqurter of the year on rccount of expenditure in loclcurrency.

Yours sincerely,

S. R. CopeDirtetor of UpiratiOns

Europe, Africa and Austrulasia

Cesterrtiohisohe Don ukrcftieke A .G.!Ehenstaufengasse 6Vienna 1, Austria

Qesterreichische Eltktristitu-wirtachafts A.G.

(Verbundgesellschift)An Hof ,Vienn 1, Astria

JHCo)lior ~f gs Cleared by and cc to: 'r. Fonteinr. Finne

Mr. Verheyen

FORM No. 57 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(5-48)INENTOABAKFRRCNTUTO AN DEEOM T

OFFICE MEMORANDUMTO: John H. Collier DATE: April 25, 1961

FROM: M. Verh n/ F.Povey 7

SUBJECT: Loan IB 21 AUA

As requested by you herewith details of withdrawals to dateagainst the local expenditure portion of this loan:-

U.S. $ in I-illions

Amount Available Amount Balance Availablefor Withdrawal Withdrawn for immediate

Withdrawal

1959 5.6 3.1 2.51960 3.2 4.9 1.71961 - 1st qtr. 1.475 - 1.475

2nd qtr. 1.475 1.475

11.75 8.0 3.75

No withdrawalsqhave been made since the list of goods was amendedto increase the total local expenditure portion to $ 16 million.

cc: IB 213 AUA - General

Mr. Myhrer

Room 803Austrian Electricity Company

Vienna,15 April 1961

I. B. R. D.Att. Mr. S. R. Cope1818 H St. N. W.Washington 25, D./C.

Ref. Prok. He/Ob

Subject: World Bank Loan AUA 213

Gentlemen:

In connection with the financing of our investment plans daring thecurrent year, 1961, and in particular the financing of the Aschach project,we should like to make the following request:

According to the supplementary agreements to the Aschach project loanagreement, which has been concluded, withdrawals are to be made quarterlyin amounts not to exceed 25% of the specific annual amount for'domestici a'--,payments. (Item II of the list of goods).

As you will see from the enclosed summary of the financial require-ments for 1961 and their coverage, the amount still lacking for 1961 isS 640 million. This deficit is scheduled to be covered by a power loanto be floated in the autumn of this year. Part of the proceeds from thepower loan will be used for financing the Aschach project.

Since the power loan will presumably not be floated before the endof October or the beginning of November, there will be need for interimfinancing from July onwards. This, in any case, will be partly coveredby interim financing from domestic credit institutions. The interimfinancing will be repaid out of the proceeds from the power loan.

The World Bank could be of further and inestimable assistance to usif it could see its way clear to make available to us in the third quarterof this year not only the instalment provided for the third quarter, butthe amount set aside for the fourth quarter as well.

Would you be good enough to give our request favorable considerationand let us know your position as soon as possible.

Yours....

s/ illegible s/ illegible

Enclosure: 1

TRANSLATION SECTION

Translated From:German 4/20/61 By: G. A.:mh

ji

Financing Plan for 1961

in millions of Schillings

1) ReguirEments:

a) Investments

Osterr. Donaukraftwerke A. G. S 824 millionOsterr. Draukraftwerke A. G. 532 "Ennskraftwerke A. G. 170 "Tauernkraftwerke A. G. " 56 'Donaukraftwerk Jochenstein A. G. "l "Osterr.-Bayerische Kraftwerke A. G. 116 "Dampfkraftwerk Korneuburg GmbH 80

Verbundgesellschaft 401 "

Total investments S 2,193 million

b) Amortization "I 282 "

c) Other payments I 20 "

Total requirements S 2,495 million

2) Coverage:

Payments by stockholders S 305 millionAmounts written off 371 "Other company assets 177 iBalance of funds from 1960 (Power loan 1960) " 503 tERP funds " 200 "World Bank (Aschach) " 212 I"DM-credit for Osterr-Bayerische Kraftwerke A. G. " 87 "_

Total coverage: S 1,855 I

3) Power Loan 1961 S 64o million

UsterreichischeWien, 15.April 1961

Elektrizitdtswirtschafts-Aktiengesellschaft I., Am Hof 6 A, Postfach 67Verbundgesellschaft

An die

International Bank for T SReconstruction and Developmentc/o Mr.S.R. C o p e, 0 1961


1818 H Street N.W.

[hre Zeichen lhre Nachricht vom Unser Zeichen

Prok.He/Ob

Be-trifft: Weltbankanleihe AUA 213


Im Zusammenhang mit der Finanzierung unserer Investitionsvorhaben im

laufenden Jahre 1961, insbesonders aber der Finanzierung des Projektes

Aschach, stellen wir an Sie nachfolgendes Ersuchen:

Laut den zusdtzlichen Vereinbarungen zum abgeschlossenen Kreditver-

trag des Projektes Aschach erfolgen die Geldabhebungen quartalweise in

HEhe von maximal 25 % des jeweiligen Jahresbetrages fUr Inlandzahlungen

(Pkt.II der list of goods).

Wie Sie aus der beigehefteten Ubersicht uber das Gelderfordernis 1961

und dessen Bedeckung entnehmen wollen, betrsgt die zur Zeit im Jahre 1961

noch fehlende Summe S 640 Mio. Dieser Betrag soll programmgem&B durch ei-

ne im Herbst ds.J. aufzulegende Energieanleihe gedeckt werden. Ein Teil

des Erlbses der Energieanleihe wird auch fUr die Finanzierung von Aschach

Ve-rwendung finden.

Da die Energieanleihe vermutlich erst Ende Oktober oder anfangs Novem-

ber aufgelegt werden wird, entsteht in den Monaten ab Juli 1961 ein Zwi-

schenfinanzierungserfordernis, das jedenfalls zum Teil durch Zwischenfi-

nanzierungen inlandischer Kreditinstitute abgedeckt werden wird. Die RUck-

zahlung dieser Zwischenfinanzierungen wird aus dem Erl5s der Energieanleihe

erfolgen.

Es wdre uns eine weitere nicht zu unterschdtzende Hilfe, wenn die Welt-

bank sich einverstanden erkldren knnte, daB,neben der fUr das 3.Quartal

vorgesehenen Rate, auch der fUr das 4.Quartal 1961 reservierte Betrag bereits

im 3.Quartal ds.J. von der Weltbank uns zur Verfiugung gestellt wird.

- 2-

Telephon 63 07 71 Fernsohreiber Wien 1904 Telegrammadresse: Verbundnetz Postsparkassenkonto 18 468

USTERREICHISCHE ELEKTRIZITATSWIRTSCHAFTS-AKTIENGESLLSCHAFT 7AG 15. April 1961

2* BLATT An International Bank, c/o Mr.Cope BETRIFFTAnleihe AUA 21Washington

Wollen Sie bitte die Freundlichkeit haben, unser Ersu-

chen einer wohlwollenden PrUfung zu unterziehen und uns m6glichst

bald Ihre Stellungnahme hiezu mitzuteilen.

Wir zeichnen mit vorzuglicher Hochachtung.

Osterreichische bsterreichische

Donaukraftwerk Elektrizititswirtsc fts-

Aktiengesells ft Aktiengesellsc t

1 Anlage

Einlage zum Briefe an:International Bank for Reconstructionand Development, co Mr.Cope'iashing t on

BeOrifft: 7 eltbankanleihe AUA 213

Wien,. 4.April 1961

OsterreichischeElekfrizitgswirschafts-Akfiengeselschaft

(Yerbundgeselischaft)

Finanzplan fUr 1961iii Mio S

1.) Erfordernis:

a) Investitionen

Osterr.Donaukraftwerke A.G. S 824,- Mio/Usterr.Draukraftwerke A.G. " 532,- "Ennskraftwerke A.G. " 170,- "Tauernkraftwerke A.G. " 56,- "

Donaukraftwerk Jochenstein A.G. " 14,-bsterr.-Bayerische Kraftwerke AG " 116,- "f

Dampfkraftwerk Korneuburg GmbH " 80,-Verbundgesellschaft 401,- "

Summe Investitionen: S 2.193,- Mio'

b) Tilgungen " 282,- "

c) Sonstige Zahlungen " 20,- "

Summe Erforderniss S 2.495,- Mio

2.) Deckung:

Aktiondreinzahlungen s 305,- Mio'Abschreibungen 371,- " /

Sonstige Eigenmittel " 177,- it

Restmittel aus 1960 (Energie-anleihe 1960) 503,- "ERP-Mittel 200,-

Weltbank (Aschach) 212,-

DM-Kredit fUr dsterr.-BayerischeKraftwerke A.G. 87,-

Summe Deckung: S 1.855,-

3.) Energieanleihe 1961 S 640,- Mio

Oi~fJ :ial Documents Uctobur 25, 1960

Do, ,a J. ontein

Loan No,. 213 AUA

Attached, ple e find the followiwng d urit :

Con 'irmed copy oC letter dat Octcber 7, f 6>0 tro a Oterr ichischeDOr~a kraftw rke Aktierngesellsc: ft re C.e: e in the List of Gocds:

Confir~ed ccv of letter datsd Get ~~, I t fro Uzterreic isoheDorzu raf'twerke Aktier tge.eLlb at a in tke Schedule oCithdraurds for Loc1l Eeiture.

Kindly have photostats %ade d S) tcn~u tQ the appropriateoffices.

Attachments

DJionteintmp

ca: 7 ga1 'iles

STr an sla tion!


Vorsitzer dos Aufschturstes: Landeshaupimannsta$ih.trefer Komm..zialrat Ing. August Kargi

Vorstand: Dir. DIp. Ing. Hans 86hm.r, Dir. Hann* Mosbauer


1818 H. Street, N.W.


~ b. Z.ich.n Ihr. Nschrichf vom Unswr ZeIchen Wien,am Oct. 11,1960Oct.),1960 Rev/Ku I. Hohanstaufangasso 6

B.,,fftLoan No. IB 213 AUA - Project AschachChange in the "List of Goods"

In connexion with the change in the "List of Goods" and as a

result of that the change in the "Schedule of Withdrawals for

Local Expenditures" we submit herewith two signed confirmation

copies of your letters of October ,1960.

Sincerely yours

Enclosures OSTERREICHISCHE DONAUKRAFTWERKEAktiengesellschaft

P.S.:

One copy was submitted to youby the Osterreichische Verbund-gesellschaft with separate letter


Vorsit*r des Aufsichtsrmtis: Londeshaupomannstfoivrtroter Kommeraialrot Ing. August KargiVorsf.nd; Dir, Dipl. Ing. Hens B6hmr. Dir. Hanns Mosboeur

An dieInternational Bank forReconstruction and Development

1818 H.Street, N.W.


HOHIIEBEN!

Ihr Zeichen Ihro Nachrich vam Unsor Zolchon Wien, am 11.10.19 607.10.19 60 Rev/Ku I, Hohlnstfufong.ss. 6

Weltbankanleihe IB 213 AUAProjekt Aschach - Xnderung der"List of Goods"

Im Zusammenhange mit der Knderung der "List of Goods" und der auf

Grund dieser Xnderung erfolgten Neuaufstellung der "Schedule of

Withdrawals for Local Expenditures" die Sie uns mit Ihren o.a. Schrei-

ben mitgeteilt haben, Uberreichen wir Ihnen als Bestatigung dieser

Anderungen die beiden firmenma3ig unterfertigten Kopien Ihrer

Schreiben.

Hochachtungsvoll

Beilagen OST ICHISCHE DONAUKRAFTWERKEAktiengesellschaft

(Mosbauer) (Kralik)

P .S.:

Eine Kopie wurde mit separatemSchreiben durch die Verbundge-sellschaft an Sie Ubermittelt.

-I~w-e.,m.ns ? I F.n,.u, Fs.rnth.,r I B.n.ion~ C."insitallBankve.eia Wien. Kent* Nr. 0-0353

FORM No. 57A INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

OFFICE MEMORANDUMTO: Mr. S. R. Cope DATE: October 7, 1960

FROM: J. H. Collier

SUBJECT: AUSTRIA - Aschach - Change in List of Goods

Attached are letters formalising the changes requested by the

Donaukraftwerke and discussed with Dr. K8lliker when he was in

Washington. The Working Party has no objection to the changes.

Note, however, that the imports are now only $4 million out of a

total of $25 million.

~ on~~';~ae<i~~ 6

.I enzlob twc CormaJ iottr embd1in t ei abx kee in the

LT4t I' Mod a the Schedule of diAbowe nn fo tho abxve

*on We ftund it noesr tou diw up two Letter aince Uhe

SirmatIon go, y beor z 41rnin it to uu, I~t i not nOne8ary

fr th1m to in AtUe ist or Gocds Iettor in view oC the wo%

un aMarly,

. A CLLBer~art ont of Qpnt onla

Cri c ri- ndxurraOi

Gee;

... x.. ... ..--.

INTERNATIONAL BANK FOR0 RECONSTRUCTION AND DEVELOPMENT

WASHINGTON 25. D. C.

October 7, 1960


Hohenstaufengasse 6Vienna 1, Austria

Gentlemen;

La 213-AUA - Chan e in the List.of Goods

We refer to your letter of August 4, 1960 in which youasked for an adjustmont to the List of Goods. The Bank haSno objection to your request and the List of Goods as re-

vised would therefore read as follows:

U. S. Dollars

I. Goods to b Jimportcd 4,000,000

Turbinos, electrical and mechanicalequi yacnt, various nachines, toolsand Mriscollaneous items

II, Goods to be 2urchased in Austria 16,000,000

liscellaneous goods paid for in thecurrency of the Guarantor or acquiredwithin the territories of the Guarantor.

III. Interest and other charges 5,000,000

Total 25,000,000

Oesterreichische Donaukraftwerke - 2 -Aktiengesellschaft


Sincerely ours,

S. R. CopeDirector of Operatio s

Europe, Africa and Austr asia

Confirmed:

OESTERRE 4ISCHE DOUAUKFRAFT4RKEAKTIE aESELLSCIHAFT

Date 11.Oct.1960

(Mosbauer) (Kralik)

INTERNATIONAL BANK FOR

RECONSTRUCTION AND DEVELOPMENTWASHINGTON 25. D. C.

Y

October 7, 1960

Oestorreichioche DonaukruftworkeAktionge sell schaft

Hohenstaufengasso 6Vienna 1, Austria

oosterreichiccho Eloktrizitutswirtzchafts-A:tiongeselschaf't (Vcrbundgesellschaft)

Am 11of 6Vienna 1, Austria

Gentlemen:

Losn 213-A UA - Chlngo in the Schcdulo of Withdrawalsfor >cJ 1 x moliture

As a result of the cheo in the List of Go reouctesd inthe Donauiwaft7orkc's lottor of Awu~t 4, 1960, tho nmount of theloan to be wit ci .w. for local epondituro has beon incroased.Durin, his recent visit to the Eai:, Dr. iZollik:r requested thatthe additional anaount of 04 million equivalent be wit.idrvawa in1961 instead of in 1960 as was sugestcd in the letter of Auust4. The schodule of annual disburecments contained in our letterof December 2, 1953, would therofore be amended to read as fol-lowa:

"In 1959 an amount not exceeding S5.6 mllion1t190 " " "3.2 ""1961 I I " 5.9 "

" 962 " "f " "0.7 "1963 it It a 0.6 "

Total 16.0 million"


- 2 -Oesterreichische Elektrizit'Atswirt-

schafts-Aktiengesellschaft

Would you please confirm your agreement with the foregoing bysigning the attached confirmation copy of this letter and returningit to us,

Sincere1 ur

S. R. CopeDirector of Operati

Europe, Africa and Austr sia

Confirmed:

OESTERREIC SCHE DONAUKRAFTWEKAKTIE ESELISCHAFT

By_

Date Oct. 11,1960

(Mosbauer) (Kralik)

Confirmed:

OESTERREICHISCHE ELEKTR JI TSVIRTSCHAFTSAKTIENGESELLS 17 M M EIAECHAFT.

Date Wien, den 18. Oktober 1960

(Hintermayer)

UsterreichischeElektrizitatswi rtschafts-Aktiengesellschaft

Verbundgesellschaft



U S A

1hre Zeichon Ihre Nachricit vom Unser Zelichn Wien,1-. Amv Hof 6. Postfach 67

FA/Sk/Sj 18. Oktober 1960B.HM

Loan 213-AUA - Change in the Scheduleof Withdrawals for Local Expenditure

Wir beehren uns, Ihnen in der Anlage die sowohl von der

Osterreichischen Donaukraftwerke AG., Wien, wie von unserer Gesell-

schaft zum Zeichen des Einverstdndnisses unterfertigte Kopie Ihres

Schreibens vom 7.d.M. zu berreichen.

Wir empfehlen uns Ihnen

hochachtungsvoll

OsterreichischeElektrizitdtswirts hafts-

GA~tienge-s7 t .

1 Beilage

Einlage

527

V enna 1, Au* tr ia

en V

Ire joti a yrr 'u rqwcst ai h r fa as '-

I, soo& to te 9:ortod 40,0Y)

ines r Thzi Ila crne

e 12 anoso eaN the

en r t- . r -a r

*~ ,

re a cloeda . Fntaa

Deue 7, 460

Th%0?l0ed iI V t tddha t

4 'htAJ i t6L

01; jr<.2om itin 'ii < 4 'illion 94 'tn t 1 to 4 it in

1961 s3ll? rti 16 oot rte ntdtf '>4 t] Vt* A t

a 1a 4 e * ,i.9 Ia a a 4a

r

- - ---- ;--

I'

W 42 c1russ..uti

*Vr2 Cin

Osterreichische Donaukraftwerke (ien, am 21, Scptember 1960Aktiengesellschaft

Devisenbedarf fUr den Bau des Kraftwerkes Aschach

in Mio S (Gegenwert)

I. Gesamtbedarf

WNarenart DI, sfr. div. Summe Erkldrung1958 1960 1958 1960 1958 1960 1958 1960 Differenz

Turbinen und Pumpen 42 24 38 14. 59 5 179 43 - 96 Ital.u.USA Lieferungen entfallen, deutscherAnteil, reduziert

Stahlwasserbau - 26 - - - - - 26 + 26 Wehr- und Schleusenantriebe (war vergessen)

Krane 8 - - - - - 8 - - 8 Alles Inland

Generatoren, Motore, Transfor-iratoren, 'mformer,elektr.Gerdte 18 4 2 3 6 1 26 8 - 18 Siemensanbot fUr Generatoren enthielt hohe

Importqguote; div. Verlagerungen auf das Inland

Lisbrecher und sonst.Shiffe 12 5 - - 5 1 17 6 - 11 7erminderung der Eisbrecher und Schiffe

Kabel und Trdhte 3 2 3 2 - 2 6 6

Spundwande und Stabstal 25 24 - - 11 2 35 26 - 10 Redarfsverminderung

Sonstige Mschinen u.Apparate 15 6 - 2 25 1 38 9 - 29 EntfalI div. ausl .nd. Lieferun en

3 u m m e 12 91 43 21 104 12 270 124 -146 Dieser Betrag entspricht 10,4 Mio 3,er wurde seinerzeit global auf 3 Mio 4 abgerundet

II. Bisherige Gestion

Zahlung vor heltbankkredit 20 20 (Siehe Pkt. 2 der Erlluterung)

ZahlunJ durch Wieltbank ,c-plant 71 21 12 104 =4 1io Z

Zahlung durch ,eltbank er-

folgt 6410

III. Restbedarf 65 21 94

IV. Erlduterungen

1. Die Vorgebungen erfolgen nur nach wirtechaftlichen desichtspunkten auf der Grundlage von Ausschreibungen; die Ver-minderungen der I .portguote gehen nicht auf die Bevorzugung inlEndiz el r Licferanten zurUck.

2. In ersten Ealbjahr 1959 erfolgten die Importzahlungen noch nicht uber die -ieltbank, zunachst aren die Fc:mularenoch nicht da, spater, etwa ab Februar standen BH-1ittel zur VerfUgung, die teilweise unterv rzinst bei 71rke.angelegTt waren.

5. Die uit 4 Mio geschktzten Importzahlungen durch die eltbank sind eher zu hoch als zu niedrig angesetzt.

Hievon 17" Spundwnde (Krup-p)

August 30, 1960

Dear Dr. Kolliker:

I enclose a copy of my letter of today to the

Donaukraftwerke. I look forward to seeing you at

the Annual Meeting.

Yours sincerely,


Europe, Africa end Australasia

Enclosure

Dr. Karl K6llikerAm Hof 6aVienna 1, Austria

OMMhrL :41 Lontein:fgs

testrreokch sche omse UwAktkesoV'sobaft1, ~ober fefngee, e

ccnnc 1, iuutt'is

Onsf V0 w"nc W,4 - fn ifr tid1 s - to ock Wiiej receit of your letter c u4.V' (ycur refernnee Dev/ ie) oonoru - n adjuntment oil theList wc ods in res" of t1 ebnv, 3o n. I ! notecti t '. 1 sker rwIw is toi 's seth ti rlnhi s We cance rt U te f tUeodg AniueI eeting of' the Lr rdor Covernors of t o nk t vhi & tni. we Sh31 write you aStin,

A C you 'y kIov , amrs. Cipi nd Mwrn vi1 visit i ustrlAhortiy on an -uue :uson nvow th varimu power projectsfi nce' ' w t ; -k 1 1 'T 11 the vso hv vn opportunty

to -sose te Itter ti ti the,

r sorH dig ic oori of tk'io letter *oEr 1ier for in-fTIrt &on.

Sincerely yours,

. a. Cop.Director of Lperati one

~Uro!4, Afrio.e ad Australauia

O~bhrerkj Fontein :1'gs

-I --

C -

- . I -

- I . - - l;

FORM No. 27

INTERNATIONAL BANK FOR OUTGOING WIRE INTERNATIONAL FINANCERECONSTRUCTION AND DEVELOPMENT CORPORATION

TO: VERBUNDGESELLSCHAFT DATE: August 15, 1960AM HOF 6VIENNIA CLASS OF LT

SERVICE:

COUNTRY: AUSTRIA

TEXT: Re Bass letter to you dated July 5 wish to confirm that Finne and FilippiCable No.:

will arrive Vienna September 5 Stop Kindly have financial information

available Best regards

SPOTTSWOODINTBAFRAD

NOT TO BE TRANSMITTED

MESSAGE AUTHORIZED BY: CLEARANCES AND COPY DISTRIBUTION:

NAME A. D. Spottswood

DEPT. Te

SIGNATURE-TehnSIGNATURE OF INDIY AL AUTHORIZED TO APPAOV

For Use by Archives Division

ORIGINAL (File Copy)

(IMPORTANT: See back of yellow copy for guide in preparing form) Checked for Dispatch:

xx --

. - - -- - - -

-C-;

FORM No. 75 INTERNATIONAL BANK FOR(5.58) RECONSTRUCTION AND DEVELOPMENT

Date

ROUTING SLIP

NAME ROOM NO.

Action Note and File

Appropriate Disposition Note and ReturnApproval Prepare Reply

Comment Per Our ConversationFull Report RecommendationInformation SignatureInitial To Handle

REMARKS

FS IFrom

FORM No. 75(2.67) INTERNATIONAL BANK FOR


Date

14OUTING SLIP

NAME ROOM No.

To Handle Note and File

Appropriate Disposition Note and Return

Approval Prepare Reply

Comment Per Our Conversation

Full Report Recommendation

Information Signature.Initial Send On

RoEM

FroF

Ku/4

OSTERREICHISCHE DONAUKRAFTWERKEA k t i e n g e s e IIs c h a f t

VorsiIzer des Aufsichtsraes: Landeshauptmannstel[vertreter Kommerzialret Ing. Augusf KargiVorstand: Dir. Dipl. Ing. Hans B6hmer, Dir. Hanns Mosbauer


1810 T. Street N.W.

'J a a h I i o n , 25,D.C.

Lufpost!E7in(?s -ieben!

Ikr Zeichen 1hre Nachrichi vom Unser Zeichen Wien,am Aug. 4, 1960R ev/ Wie 1. Hohanst-ufengsse 6

-e'f: Loan No. ID 213 AUA -Adjustment in the List of Goods

We refer to your letter of December 2, 1958 concering the list

of goods to be purchased out of the proceeds o' the loan and beg

to inform you that the total value of goods to be imported changes

from 8 11ill. JS-S to 4 liill. US-8 - according to our contracts

which are now mostly placed to Austrian suppliers.

Corresponding to this reduction there resulIts no T the following

new ist of Goods:

I. Goodc to be imported US-S 4 000 000.--

II. Good, to be purchasedin Aui.stria " 16 000 000.--

F- . Inteoest and otherchargnes t it 000 000.--

Total U9- 25 000 000.--

Referring to your letter of December 2, 1958, which shows the

auounts to be withdrwn from 1959 - 1965 we suggest to change the

yearly allocations of Local Expenditures as follows:

-2-

Telogrammanschrift: Farnruf: FernschrelIber: Bankkontl: Credtansfalt-Benkverein Wien, Konto Nr. 0-0353Doneukraftwerke Wien 63 47 11 Doneukr aI Wien 1366 Ostetreehsche Landerbank Wien, Konto Nr. 707.230Do..ukr:14Ybbs 029248

DonaukraftGreln 02394 Posisparkassenkonto. 170.250

Kr Nr. 3 - 10000 - 11/59 DoKWAschachtinz02149

A

-2-r

Local Expenditures in the year

1959 5,6 -illiom US-

1960 7,2 "

1961 1,9 "

1962 0,7 "

1963 0,6

16,0 Uillions U-$

The increase of the allocation of the year 1960 is caused by the

high volume of investments in this year.

Please confirm your agreement with the foregoing by signing the

form of confirmation on the enclosed copy of this letter and

returning it to us.

Sincerely yours,

T S CH DON AUTURKEAktien ells1ch>aft

(TMosmuer) (Kralik)OSTERIKCHIOChE E7EKT RIIZITATS-WIRPTSOHAFTS-AKTWINGLELSCHAFT

(V7RBU SE L LSC HAFqT)

Enclosure thP.S. Vienna, Aug. 4 , 1960

Gentlemen,

we recommend the motion of the Osterrei-chische Donaukraftwerke AG,at the sametime we beg to inform you that misterDr. Kblliker, member of the board ofdirectors, will attend at the annual meetingof the International Bank for Reconstructionand Development, which will take place thisSeptember and on this occation he willdiscuss this matter with you.

ILSrnEl<ICIHISCHE ELEKThIZiT4-h 1 TTHATS-A KTIENGESELLSAFT

(K li ker) ~'4r

AIRMAIL July 5, 1960

VerbundeselsehaftAm 7of 6!ien I, Austria

Gentlemen:

We are writing to inform you that Mr. Christian Finne.whom you know from his previous visit to Austria, expects to be inVienna during the early part of Septemlber to attend a conferenceat the International Atowic Enry Agency. He would also contactyou in order to use this opportunity to make a visit to the Aschachproject site and to discuss with you the present status of thisproject and the construction program of Verhundgesellschaft.

Mr. Finne is at present on vacation in Norway and willr te you directly to inform you about his expeCtod arrival in

Vienra. For your informtation, his address in Norway is:

Jarlsborgveien 9Smestedslo, Norway

ours very truly,

Neil aasActing Chief. Public Utilities Division

Department of Technical Oerations

cc: Area Dept. - Mr. CollierMr. Finne (in Norway)Division File

NB:ls

FORM5-No 57 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

OFFICE MEMORANDUMTO: FILES DATE: April 20, 1960

FROM: J. H. Collier

SUBJECT: AUSTRIA - Austrian $25 Million Issue in New York of December 1958 -Joint Operation with $25 Million IBRD Loan

1. The Controller of Public Accounts in Austria in his report for1958, made the following reference to the issue of $25 million 5-1/2%bonds through Kuhn Loeb & Co., made in conjunction with a Bank loan:

"Among the foreign credits examined, there was a loan of US $25million. The Controller's Office expressed doubts in regard tothe expediency, profitability and economy thereof. The vauntedsuccess of the Federal Ministry of Finance in placing an Austrianloan on the American money market seems to the Controller'sOffice to have been bought too dear, the more so as the pro-ceeds of the loan serve partly to meet current expenditures,there was no need for foreign exchange and only 20% of the loanwas placed on the American money market. The Controller'sOffice deems it advisable to negotiate such loans only to theextent that is absolutely necessary."

2. The Austrian Finance Ministry has issued a reply to this criti-cism, stressing three points:

a) The loan was very significant as a part of the Government'scounter-cyclical policy in 1958.

b) The Controller's Office confuses the liquidity of the bank-ing system with the availability of long-term capital. De-spite the liquid situation in Austria at the time, it wouldnevertheless not have been possible to raise long-term moneyon the scale required.

c) The terms and conditions of the issue, particularly when oneincludes those of the World Bank loan as well, were clearlymore favorable than those of the Austrian domestic market.

3. In replying to the criticism that the loan was used for currentexpenditure, the Finance Ministry states that the loan proceeds wereearmarked for investment and that 50% of the public issue has to beused for the Aschach project. (This was the project for which the Bankloan was made).

JHCollier : vmc

AUSTRIAN EMBASSY

2343 MASSACHUSETTS AVE.. N. W.

WASHINGTON 8, D. C.

REF, N. 403-Res /60 Edgar Plan TELEPHONE DUPONT 7-2477

April 12, 1960.

Mr. Hugh CollierInternational Bank for Reconstructionand Development1818 H Street, N.W.Washington 25, D.C.

Dear Hugh,

I have now received from the Federal Ministry

of Finance the official view of Dr. Kamitz concerning

criticism raised by various persons, and in particular

by the Oesterreichische Rechnungshof with regard to

the 1958 dolla bond issue.

I have the pleasure of sending you enclosed

a copy of the view of the Ministry of Finance.

With kindest personal regards and my best

wishes for a happy Easter to you and your family

Sincerely yours

Enclosure.

Bekanntlich wurde die Auslandsanleihepolitik des

Bundesministeriums fuer Finanzen von gewissen oesterreichischen

Finanzkreisen wiederholt kritisiert. Diese Kritik war jedoch

zum Teil unsachlich und konnte auch nicht zum Verstummen gebracht

werden, obwohl der Herr Finanzminister und zustaendige Abteilungin

des Bundesministeriums fuer Finanzen hiezu bei mehreren Anlaessen

die erforderlichen Aufklaerungen gegeben hatten. Die Kritiker

blieben jedoch dabei, langfristiges Kapital und liquide Mittel

zu verwechseln, Auswirkungen langfristiger Kreditoperationen

auch auf die Devisensituation ausser acht zu lassen und die

Notwendigkeiten konjunkturpolitisch ausgerichteter Aenderungen

in bezug auf Kapitalimport nicht anzuerkennen.

Es trifft zu, dass auch der Rechnungshof in Ein-

sichtsbemerkungen zu Geschaeftsstuecken des Bundesministeriums

fuer Finanzen und in seinem Taetigkeitsbericht die 1958er Dollar-

Kreditoperation nach verschiedenen Richtungen hin bemaengelte.

Die Aeusserung des Bundesministeriums fuer Finanzen zu dieser

Bemaengelung des Rechnungshofes wird nachstehend voll zur Kenntnis

gebracht. Darueber hinaus wurde der Rechnungshof insbesondere auf

die folgenden Punkte hingewiesen:

1. Die Aufnahme dieser Anleihe war im Sinne einer anti-

zyklischen Konjunkturpolitik des Bundesministeriums fuer Finanzen

im Jahre 1958 von groesster Bedeutung und hat dazu beigetragen,

dass Oesterreich als eines der wenigen europaeischen Laender nicht

von den Auswirkungen der damaligen Rezession jetroffen wurde.

-2-

2. Trotz der auch im damaligen Zeitpunkt tendenz-

maessig steigenden Fuelle liquider Mittel des oesterreichischen

Kreditapparates haetten langfristige Mittel in diesem Umfang

neben den sonst durchgefuehrten Kreditoperationen im Inland

nicht aufgebracht werden koennen.

3. Die Konditionen der Dollar-Anleihe, insbesondere

wenn man die Gesamtkreditoperation einschliesslich der

Weltbankanleihe betrachtet, lagen klar unter dem oester-

reichischen Zinsniveau, welches damals bei 7% mit Steuer-

beguenstigung lag.

Im einzelnen wurde zu den Ausfuehrungen des Rechnungs-

hofes wie folgt voft hier aus Stellung genommen:

"Das Bundesministerium fuer Finanzen kann der Be-

urteilung des Rechnungshofes ueber die Konditionen der

25 Mill. $-Anleihe, die im Dezember 1958 vom amerikanischen

Geldmarkt aus begeben wurde, nicht zustimaen. Vor allem ist

hiezu zu erwaehnen, dass es sich um eine Gesamtkreditoperation

internationalen Charakters im Ausmass von 50 Mill. $

(1.300 Mill. S) handelt. Die Aufbringung eines so grossen

Betrages zu Konditionen, die im Durchschitt um 6% sich be-

wegten mit einer Laufzeit von 15 - 25 Jahren, muss im gege-

benen Zeitpunkt als ein sehr grosser Erfolg bezeichnet werden.

Es entspricht der neueren Politik der Weltbank, Anleihen an

nicht wirtschaftlich unterentwickelte Laender nur in Kombi-

nation mit Marktoperationen durchzufuehren. Ohne die Er-

oberung des amerikanischen Kapitalmarktes waere daher auch

3-

die Weltbankanleihe zum Aufbau des Kraftwerkes Aschach

an der Donau in Frage gestellt gewesen. Oesterreich musste

daher erstmalig wieder auf dem US-Kapitalmarkt Eingang finden.

Hiezu waren Vorarbeiten notwendig, die sich etwa ueber eine

Frist von 6 Jahren erstreckten. Es muss beruecksichtigt

werden, dass die Republik Oesterreich im Jahre 1933 ein

Transfermoratorium angestrebt und durchgefuehrt hatte und

vom Jahre 1938 bis zum Jahre 1952 seinen Schuldenstand fuer

Auslandsanleihen sistiert hatte. Ab dem Jahre 1952 hat nun

Oesterreich an der Wiederherstellung seiner Kreditreputation

im Ausland mit Erfolg gearbeitet. In diesem Zusammenhang sind

zunaechst die Protokolle vom Dezember 1952 ueber die Wieder-

aufnahme des Dienstes der oesterreichischen staatlichen Vor-

kriegsschulden zu nennen. Speziell fuer die Wiedereroberung

des amerikanischen Kapitalmarktes bildete auch das zweiseitige

Abkommen zwischen der oesterreidiischen Bundesregierung und

der US-Regierung, betreffend die Durchfuehrung der oesterrei-.

chischen Wertpapierbereinigung eine Voraussetzung. Der Abaihluss

dieses Abkommens hat das oesterreichische Renommee in den

U.S.A. sprunghaft ansteigen lassen. In diesem Zusammenhang

sei uebrigens erwaehnt, dass das Abkomen bisher der Republik

Oesterreich ueberhaupt keine zusaetzliche Belastung gebracht hat.

Die Moeglichkeit der Durchfuehrung dieser Kreditoperation im

Jahre 1958 in einem durch die Berliner Krise besonders gefaehr-

deten Zeitpunkt ist daher als ein besonderer Prestigeerfolg

zu werten. Als Emittenten auf dem amerikanischen Kapitalmarkt

-4

konnten nur diejenigen europaeischen Staaten auftreten,

deren finanzielle Lage als besonders stabil anerkannt wird.

Emissionen europaeischer Staaten erfolgten in der letzten

Zeit von: Belgien, Daenemark, der Montan Union und der Stadt

Oslo. Was nun die Konditionen der oeffentlich aufgelegten

Dollar-Emission anlangt, die also nur einen Teil derGesamt-

operation darstellt, waren die Oesterreich gewaehrten Kondi.

tionen durchaus den der uebrigen europaeischen Emittenten an-

gepasst. Es kann also festgestellt werden, dass man das durch

die Waehrungsklausel gegebene Valutarisiko zu den gegenueber

dem Inland guenstigeren Konditionen, insbesondere Verzinsung,

Begebungskurs und die Spesen fuer die Begebung als Kompensation

empfindet. Im uebrigen wuerde eine unguenstige Entwicklung fuer

den Anleihenehmer durch die Fremdwaehrungsverpflichtungen von

Staaten, die durchwegs dem Internationalen Waehrungsfonds ange-

hoeren, nur dann eintreten, falls Oesterreich gegen die vom

Internationalen Waehrungsfonds aufgestellte Regelung verstossen

wuerde und seine Waehrung abwertet.

Die Feststellung des Rechnungshofes, dass der

Anleiheerloes zur Befriedigung des Bundesaufwandes diente,

kann das Bundesministeriums fuer Finanzen nicht widerspruchslos

hinnehmen. Die Anleiheerloese werden vielmehr im Investitions-

programm des Bundes veranlagt, zu 50% jedoch ebenfalls dem Aus-

bau des Grosskraftwerkes Aschach zugefuehrt werden muessen. Auch

wird vom Rechnungshof das Fehlen eines effektiven Bedarfes an

aluten hervorgehoben. Da Oesterreich eine hochentwickelte

Industrie hat, ist ein solcher Bedarf an Valuten fast in

keinem Fall gegeben. Dieser Umstand allein berechtigt eine

modern ausgerichtete Kreditpolitik nicht, auf jeglichen Kapital-

import zu verzichten. In diesem Zusammenhang muss allerdings

hervorgehoben werden, dass die gesamte Kreditoperation im

Ausmass von 50 Mill. $ in keiner Weise an den Import auslaendi-

scher 4aren geknuepft war. Diese Freistellung der Anleihe-

erloese von Importbindungen geht insbesondere auf die jahre-

langen oesterreichischen Bemuehungen in dieser Richtung bei

der Weltbank zurueck.

Was nun die Belastung des oesterreichischen Valuten-

bestandes durch den Schuldendienst anlangt, sei darauf hinge-

wiesen, dass gerade im gegenwaertigen Zeitpunkt ein Augenmerk

eher auf eine unerwuenschte Vermehrung des Geldumlaufes durch

uebermaessige Hereinnahme von Fremdwaehrungsmittel gerichtet

werden muss, als eine zu starke Belastung des Devisenbestandes

der Oesterreichischen Nationalbank durch den Schuldendienst.

Die Veraehrung des Devisenbestandes durch die Aufnahme der

Anleihe hingegen fand im gegebenen Zeitpunkt ihre Rechtfertigung

durch die Langfristigkeit des Anleihe."

Mr. Collier

Room 803

Ernst iagnerKarntnerring 10Vienna I.

February 15, 1960

Ref. Dr. W.Bi

Mr. Douglas J. Fontein,C/o International Bank for Reconstructi'nand Development,1818 H Street, N.W.Washington. D.C.

Dear Douglas;

Mary thanks for your friendly note of February 3.I shall gladly keep you and Mr. Hugh Collier abreast of furtherdevelopments. Chancellor Raab has meanwhile resigned his position

as chairman of the Austrian People's Party.

I should like to quote to you the sentences from thereport of the Audit Court Committee for 1958 with reference to theKuhn, Loeb & Co. US$25 million loan:

"Among the foreign credits examined, there was a loanof US$25 million. The Audit Court expressed doubts in rcgard to theexpediency, profitability and -conomy thereof. The vaunted successof the Federal Ministry of Firnce in placing: an Austrian loan on theAmerican money market seems to the Audit Court to have been boughttoo dear, the moreso as the procceds of the loan serve partly to meetcurrent expenditures, there was no need for foreign exchange andonly 20% o' the loan was placed on the American money market. TheAudit Court deems it advisable to negotiate such loans only to theextent that is absolutely necesstary."

Should you happen to see Mr. Schrenk, Jr. please give himmy best regards. I have pleasant recollections of working with him.

Sincerely,

Err st

TRANSLATION SECTION

Translated Frow: Germar 2/25/60 By: GA: bm

FowNo,554N 57 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

OFFICE MEMORANDUMTO: Mr. J. Burke Knapp DATE: September 28, 1959.

FROM: LPM. Svoboda through Mr. He Bipman

SUBJECT: Borrowers' Purchases in International Markets.

In further reference to the question raised by the British ExectiveDirector at the Board Meeting held on September 24 in connection with thesecond loan to the Investitionskredit A.G. Austria, as to whether adequaterecognition has been given to international competition in the procurement ofgoods financed from the Bank loan, the following is a review of the positiontaken and arrangements made by the Bank in this respect:

1) In general, the Bank, as a matter of policy, in loans to develop-ment banks as in direct project loans., requires evidence that theultimate borrowers use their best business judgment in the selectionof goods financed from the loan and give no preference to suppliersfrom any particular country.

2) The practical application of this principle in the case of industrialprojects necessarily calls for a certain amount of flexibility con-sidering the varying nature of such projects and their technicalrequirements. International bidding on the scale appropriate tolarge civil works projects in the power, public utilities and trans-portation sectors, is usually not feasible for industrial projects,since the technical features and production process of many projectslimit the number of suppliers capable of meeting specific requirements.Furthermore, the choice of a particular process in many cases auto-matically limits the sources of equipment to one or two suppliers (thisis particularly true in the chemical industry). In many cases ofplant expansions, technical and economic considerations may dictateduplication of already existing installations and equipment therebyeliminating the choice of potential suppliers.

3) The Bank's requirement of economic purchases in competitive marketshas been applied in respect to the loans to the IVK, the proceeds of'which are being used to meet expenditure in local currency, as wellas for imports. It is of course recognized that in view of Austria'sown advanced industry, foreign imports under these loans may playonly a limited role. Other factors outside the borrower's control,such as the shipping costs - differential may also influence thisdecision in favor of the local market. This will narrow the fieldof foreign purchases, limiting them primarily to equipment andservices not locally available on competitive terms or equipmentof special specifications.

4) In the first loan to IVK, which was for nine predetermined projects,the Bank made a careful prior appraisal of the proposed purchasesof equipment in the light of the technical requirements of eachproject, and potential competitive foreign sources of supply. Itgenerally confirmed that procurement from local sources was mostadvantageous in regard to power and boiler equipment while substantialorders were placed for imports of textile machinery and paper making

-2-

equipment where foreign suppliers (Germany, United Kingdom,Sweden and Italy) proved to be competitive. Under the secondloan to IVC, sufficient evidence will be furnished by the IVKto the Bank, that the requirement of economic purchases inappropriate markets has been met in respect to each individualprojef'et for the financing of which an allocation under the lineof credit is requested.

IMSvoboda/mmcc: to Messrs. Aldewereld, Ripman

and Collier,

FOR5-No. 7 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

OFFICE MEMORANDUMTO: hr. S. Aldewereld DATE: June 11 59

FROM: P. J. ire

SUBJECT: Austrian Loans - Visit to Power Projectsin Eastern Austria - hay, 1959

The purpose of the visit was to inspect progress on the five Bankfinanced projects in eastern Austria - The Ybbs Persenberg and Aschachrun-of-river stations on the Danube in the area of the Donaukraftwerke,the Reisseck-Kreuzeck high head hydro scheme and the St. Iindra andVoitsberg thermal plants in the area of the Draukraftwerke.

The visit included one day in Vienna, the muorning of which wasspent in discussion with Dr. Stahl and members of the Verbundgesellschaftstaff. In the afternoon a meeting had been arranged with Dr. Teufenstein(at his request). This was in the nature of a courtesy call, but Dr.Teufenstein cid express doubt about the continuance in office of thepresent government officials (including himself) in view of the smallmajority in Ihe recent elections.

The remainder of the visit comprised a tour by car, covering notonly the Bank financed projects (with the exception of voitsberg) but alsothe Jochenstein plant in operation on the Danube near the German border,the Sch'rdin plant under construction on the river Inn, the Schwarzachhydro project to the east of Zell-Am-See and the Dabaklam hydro projectat borfertal Huben.

Ybbs-Persenberg

Five of the six 32 !M units were in operation and the sixth unitwas being tested out prior to running up. This is a fine project and itscost of about $500 per kilowatt is not unreasonable bearing in mind thatit includes navigation locks, a roadway across the dam, and about 30 kilo-reters of concrete roads.

Aschach

The civil bids had just been received. Work started on site inJanuary with a temporary contractor who had started a steel coffer damon the right bank to enclose part of the area of one of the two navigationlocks. A diesel house was nearing completion and the camp was under con-struction.

Work was proceeding on the extension of the railway to the site onthe right bank and a two kilometer spur was under construction to thegravel and sand pits further down the river. On the left bank aggregatewill be obtained from the nearer of two quarries (about one kilometer fromthe site) owned by the navigation authority and the crushing plant frame-work had been erected.

-2-

Reisseck-Kreuzeck

This most interesting scheme was in full operation and all thatremained to be done was the removal of temporary buildings and equipmentand general cleaning up at the main dam sites.

St. Andra

The new 110 h,1 set had been commissioned and had run for one daywhen a steampipe split due, it is thought, to defective material. Theunit was still shut down but as there is plenty of water at the presenttime for hydro operation the outage is not cause for concern. A lot offinishing and cleaning up still remains to be done but, subject to therepair of the pipe, the unit is in operatin!:, condition. Points ofinterest were that, burning the local, high ash content, coal the Austriansexpect to have to renew pulveriser rollers every 800 hours; only electricfeed pumps are provided for the once-through Benson boiler. The firstcircuit of the doublc circuit 230 XV transmission line between St. hndraand Hessenberg was in operation. This is the first link in a future230 KV loop round southern Austria.

Voitsberg

Time did not permit visiting this station but I was informed thatthe new 65 E9 unit was operating satisfactorily. I could get no informa-tion on its operating costs.

Ausr. P. 1.Eqra P 1, 195C. i

1. Var rlheryer Iflwvrka (Lmn lb. 118/179 AM)

Two loan., i10 million in 1955 and 3.6 million in 1957 were made tothe fliwerke to finance the Lwv*rree project, which ft a 190 )4 peekingplant equipped with pumpto sup nt the netural inflwi of theLunorsee reservoir. A mnjor pairt of the p-wer 1. delivered to two Germnutilities. The pWoject was inuiUrated in rch 1958 and has since beenin fulU c =erclal opsration. The lot progrets report (Deceber 1958)mentions a leakage in the prssure tunnel and thrt repair work is underway. Total cost of the project @=-untF to *h.1,/.0 million ($5 milion),The estimate in 1957 trnunted to ZcCt .1,300 million. Both loans have beenfully disbursed.

2. VgdMadh_.

roan No. 10 AUA B.ssmok 4runnedk Proe it

The loan of 12 million was mde in 1951.. At that tise the firststage of the pr-ject on the iieisseck section had already been c -m leted.They included a weekly regulating bein with intakes and two 2 ,000 kw(NoI. and 2) generating units imstlled in the Kolbnits power house.

The Bmnk project on the 8sti eck section included the construction ofei- high vmntain reservoirs with irt-rconnecting tunnele, penstocks andthe installation of further two 20,000 kw (Not. 3 and 4) generating unitsin the Kolbnits power house. The turbines operate under a head of 1,771meters, the highest in the world. In addition, a separate pumping stationat attelberg, at an elevation 500 meters 0tove the power house was pro-vided to permit the trans fer of water to the high level reservoirs duringthe summer months. Not incuded in the project was the installation ofan addtioml generating unit No. 5) which was ordered in 1958.

On the Kreuseck section the project included intake works on eightsmaller streams with two connecting tunnels terminating in the RosewieseregiLating retervoir. The intermediate Niklri power plant (7,000 kw) wasalso included. A penetock connects the Rosswiese reservoir with theKoltnits power house where the two .0,000 kw generating units (NoV. 6 and7) belonging to this section also are installed.

-ost of the work on the project had been com leted by the end of 1958.,till outstanding were grouting and finishing work on the dams, compleionof the installation of the No. "I generating unit (Kreuseck Eection) andthe Niklet generating unit and v, rioe mAller works. All parts of theproject were to be in full operation in April 1 59, only a few monthe laterthan urigaclly scheduled.

T0I M.E.J. u - 2 i My 1, 1959

Total ccate ars -reZvntly estimted at Sch.1,89.? million (W .1 all-lion) or roughly 44 higher then the origimwl eatim-te. The Irree& islargely caured by steadily irn-rae.ei wage. &nd rice& durt1g the con-struction period. The 1$.z bonn aus bern filly diebursed.

Lojn Ro.J1L8 ATE Et. Are ind Volt tra Themi F~anta

Tb. Z10 million oan Weie mdc in 1956. both projects conahted of an.2c, Ion Of e3istlng g4icts. Th. intlation of the 65,000 kw unit in

the Voitsberg plnt has been c eted and the unit wnt into opertiomearly in 1957. Total costs ammnt to ,ch.'13.2 willton ( , million) or17.5% higher thou or izlly entimted.

The inta21ation of the V,00 kw unit in the St. plat iswell advanced and the 11it wA to be ready for operation in iril 1959,s:-U 3 vonh later than scheduled Late deliveris caused the delay.?otal coats are now (stieted at ch.33 .1 mIllion (t12.7 million), orabont 15 lower than origimlly e atited. Thu reduction etmS from un-

uied 1rcencie and lower inter-et charge. t'an anticipad. The loanhas been fully disbursed,

b. nakftrkLoan No 1k9 AtA Thks-Fer!.nbeua re Seet

The (21 aillion loan w md. is 1956. ThE project consIsne of a1900 kw r'n-of-the-river plant on the Dfanube. The mrin stru;ture in-

dudes the south puerhousthe he apiliwey section, the north perhoueand the double xvigation look. Average waterflo is 2,1oO cu.inter/secnd and the average head 11 intert.

The project has e practically completed, soS sa t ahead ofchwdule. The three units in the south pwerh use have been in operation

sizre the begimin of 1958, Two of the unite in the north pIerhoUFS cameinto oeretion In * r and ber 1958 respectively and the lastunit was expected to be reedy in ArIl 1959. The navigption lock was jAtin full operation aireAdy In 1ay

Total cost of the -rject is now stimted at $ch.,485 rillion (495mIllTon) or abut 55 higher than origimlly estiratod. The lmn has beenfully disbursed,

L!, . 11V AtV. - Aacheph ro-t

The - 5 million loan was md in 1958, The -roject consists of a run-.ofthe-river alnt -n the Dainue further upatreca from the YTbs plant and

about mIdway between LIra and the GrnbCoder. The aain stracture willinclude a double wvlgaticn lock a oerouse and a spillway section.At the tize the lot*n was Ciewd .eca.r 195$) it was not yet decidedwhether the plant capacity 61 ,64,000 kw would be divided betwen/, or 5imits. to reports hav, yet been recaivod by the hank on this project and

rTot .. J u - 3 y1, 1959

ware inter atfd in dtainizg details on tho fInI plan ,a-,status of ontxuction work which now Ehuld have been started. Totalcost of the yrojeet is etiuAted at .l115 rillio).

In addItion to the Bavk fimamwd projecti, V.3,. also carrying outother wjar cor truation:

1lin hydro 701 ohnedorf Thernml 130 1%: /63Losenatein kydro 32,4 1967oarr*ubutrg Therm. 15(. 19;/63chaerd i I flydro 47.5 1961

(Austriau part only)Jfortal bUten kydro 12C1 1963/64

Total costruction ;o ta for the porlod 1959-1%63, inludir trans-Rinsion lines urd vcrlous minor works, arf etirAted at Sch.7, 561 MUm100(G,9c million), Total capital reciuremwnts durin- this period, includingre;*yments of lians, are estimstd at Ech.11,261 mil-ton ($433 million).The., will be covcred from the follwing surcesw

feceiptz from Operatlon fch.4,739 milionIhere Capital 1,50 aIBhiD Loan 650 'Other foreign loans 1,059 'D0ne0tic loans 3.76

Total b.11,466 molio

C4 imne abcc: Mr. Jago

FORM No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

OUTGOING WIRE

CLASS OF SERVICE: FULL RATE DATE: MARCH 12, 1959

TO: GARPENTARIUSVIENNS

COUNTRY ( AUSTRIA

TEXT:

Cable No.

PLEASE TRANSNIT FOLLMING TO WAGNER URGENTLY STOP RE ILLWVERE

GLEICHRANG PROPOSE FURNISH YOU WITH CERTIFICATE UNDER SEAL

OF SECRETARY OF BANK COVERING SIGNING AUTHORITY OF MR. LEJEUNE

STOP SIGNATURE OF SECRETARY AND SEAL OF BANK TO BE CERTIFIED

BY AUSTRIAN EMBASSY STOP PLEASE CABLE SOONEST WHETHER THIS

SATISFACTORY

FON'EIN

Signed: (Type in last name of sender)

AUTHORIZED BY:

NAME: D.J. Fon ei For Use by Archives Division

DEPT: LChecked for DispatchSIGNATURE:A

(Sign-ature of ndivi ua aut approve cale).

TfFontein:ea ORIGINAL (File Copy)(IMPORTANT: See over for guide in preparing Outgoing Wire)

'8001 XX4 'ISOd aTIqVZalHl 01 (l3HlRJ9 H9 'IfOHS SRIII 9MIO9lflO (INV ONIWODNI ON1CUV931d SNOILS~flb ANV

*slnoq asatp jo ap~sino saqv jojo tp~udsap ay ioj apew aq plnoqs siuawuansx Is!:)dS -s~gp 9uDoA~ uo wd q~o3 -W-900:6 woQJJuado st aoTAxas alqo: aqj *q:)idsap zol IT UOOH ca adojaAaa akqes u u! aisn)TdT3 UT SQISSQU1 pJBMJOA

akJ lquo ayp i idal s! sainmugis pazujoqinu jo 3syl V~ -(Ado:) )JUd) 15uTS!Io ayp ugis

iaq~uaus jJ83s SU~zujovpnv aAsq PUB a2'SSEU 9urZuo043nu xaqwaui jjvis jo 3u. nnsIap' PUB Q*Uxu ul adj

*IapUas ay3 jo ssaippu ayf m~ou)iou saop aassaippe uaqta Rluo aIrusuulTs ayp jo 3nsd Sv (IVAJ.NI asfl *1apins jo awuu UTe u! dAj

-asnpua 'IjioAmam~ 'JTswliy -&- 'sdnoyxg PJOtA-OAN. UTsU9 PUB 'sawuu paiuuaqdAq 'sp.7otApaisuuqdAq piotA auo s5 apj~ -a~ '-aT--jjfl.T rjfIa -a! 'alqxssod JQAaUa14& suoTpsTAaiqqe uoWWmoa s

,fiwtuoD spZo& iy io 11 ads 'papaau ST uoTpsfmaund fi -uofleflufu Aussaaauun pugspo AisssaaauunQJm3UTauIT 02 pQInpa aq pjnoq~s 3xai atuj -sauT uaa&mq a~yds alqnop PUB s-TQ33Q Tullc'03 ul Ixa3 adAj

i800 -ix3q 2utqjs Aq pau~uiqo aqAuu sIjwnu asqj -pajaWlun aq pinoqs s~aanesaSjd~ 3uap~sa}j o3 U pusSoTssTfN J~Usg 03 Saussa

-(Az~unoa u jo auisu atp iol apew si Qxul1p ON) -pappla aq sArsmlu s m uot3-eutpsap jo AXnufoa) atp jo aWuro iL -ucoluuNsol puvs3ued I~poA h~ u! pazzaf1a s! NUI.Nra(X). ssarppu alqv!*uoimiodzoDj :usuiqj uwowagul ,q]L -dopf~tn PU p us ) '-!-Ij 'IP-N, ')jOtUsg 'sM0909 's~xd u! PSJISTQJsT 6 JVg~q.qTJ. ssaappe S)IqsZ Tjus auj -aqtssod JaAaUa4'A ssppe sQsMU pus assaipp-e jo aureu 3sej Aluo Qsf

ssazppy *z

'(o~13) 3SOd alquD LISZT 'uo!sUUOJUI 10_4 'SUIJTJ T5!I:)WWJUO3UTs33aO PU pus 'uonN Palzufl 'Q3!JJ0 )P~k, wN aTp 03 SQSSUix IOJ AJuO pain aq ojL

X2UT SP.IOM O 30; aq.TU{Z3

WnwTuitu v sr axoqj *spousD pus oaixapW o3 PUs samS~ painuf aq uT sai-ssatJo) Xpzo Psn' aq plnoqs PUs obtoTtsTuin jo Asp at y, uTmn paxi&Tf ' ' 's~ ' ~ ~ s

qtA M 10o . SUTAstj sjoqxuau -jjsms oi sagssaw. jenuap~juoa .ioj, fuo pasn aq plnrnqs___Q36J STLLL 3soa, pus pgads (mAor Amg J~O 03iTT iv~ pa~wuz , 3MSB1 l sagssacw aPOD apo:

'PQJTnbai 30u ST UOYSSTiwsu13z a3srpawwi uayA sassu :xoj ps aq pinoqs

BU 8Uvd aaa5 3!,d u2S0DU8slmId a:3Uu1j-* ulqtuOoo

S!TAvsSnflA en~jiT u~doitp3 * 3u!qD *vlanzauQA UOUsqsa * JOpBAI13S 13 aI!Wi

Avn~rurl Uspiaof Jopsena aslwingsUAS * sUvflPUOH omTlqfda-d uu3TuTwoQI ivZ~e

S15WSfl ds ~wnglqn:j VTATIoq

:ssjTnuno,SUTAOTTO; atp ioj aSNSHS!As 3uasSSd 39 ST 31 ajBTA JaAaUam pQSn sq plnoqs

AII5WZou a~vjsI StU -isoa ay jIj4 3noqs 31u PUB paads smsl 11 3e wuss sis sagussaw _____

Tamuo~zqwatu s3T jo smos Aq musg sip o3 pspusmxs smsi Isjuuajaid v sT Sill AA G

IXsm Pug sssippsg 9UTpnpimT 'spixoAt zoj a:Rxvq:i tutuWtuIW____sy 2! aq' 'A1 PUTfUUU PaJaAfl5; p PB Q3UISUL~ 1 13 uo Ii s5nss amJ1~

*mxa3 pug sssipps

396a sqj -qz3edsap jo Asp, zoiju guUJUI sip PQJsIA71p Allsuuou ams stuoigasis za)3a dwa 15335smmj

:solj sis paqlzosap ST ss5iol qxog *pQITSap a5)IA13S 10 sss1 UT idA1

QI!AI55 JO SSVfJ -1

Sa1III ON109.LflO 9MIHVdH~ld HL0A HUMfl

FORM No. 26(5 58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

INTERNATIONAL FINANCE CORPORATION

INCOMING WIRE

DATE OF WIRE: XN= U 1959 ROUT ING

TO: ACTION COPY TO 11R !

FROM: INFORMATION COPY TO

Decoded By

TEXT:

Fs niw= ci=mm Lqmmmm 3m mmm zm

SM MW 0f PC$ OF A=W Z==w3 " Ulow-pm TO 9m asy cmo Tw Dm rm aam ame PLEM

mD A m -A

F

.T : . : :: : :

tP ~j -. -o: :1-1:

: : : -: .U- : --r : : : -: : : : .: : : :

February 9, 1959

Dr. Dietrich KassnerAbteilungsdirektorBerliner Handels-Gesells chaftFrankfurt, Germany

Dear Dr. Kassner:

I enclose herewith a copy of the memorandum dated October 30, 1958which you dictated in Washington at the occasion of the negotiations forthe Aschach Project Loan. Also enclosed is a Preliminary Translation ofthis memorandum prepared by Fir. Oppenheimer and myself.

We would be grateful for your comments on the translation. Asexplained in the footnote on the first page of our translation, it wasoften impossible to find exact English equivalents for German legal termsand this has hampered our efforts. Nevertheless, I believe that we havecome as near as possible to an exact, but still readable, translation. Onthe memorandum as dictated by you we had one comment. It relates to thedescription on page 4 of your memorandum (pages 6 and 7 of the translation)of the limitations on the investment possibilities of savings banks. Thefirst paragraph of the extract of page 1446 of the Enzyklop~disches LexikonfUr das Geld-, Bank- und Brsenwesen creates the impression that the fundsin which savings banks may invest are limited because of the fiduciaryrelationship existing between s avings banks and their depositors. Thesubsequent list of funds in which they may invest, however, would indicatethat in practice the field of investment is very wide indeed. Thus, thelist includes investments in "unsecured loans" (item 2 (b) of the list)and "securities" (item 4 of the list). We thought it might be desirableto revise this section and to show in somewhat more detail what exactlythe limitations are.

In addition, we would be grateful if you could furnish us thename of the official journal of the insurance Supervisory Office referredto in the second paragraph on page 1 of your memorandum.

Mr. Oppenheimer joins me in sending you our best regards.

Very truly yours,

Douglas J. Fonteincc: Mr. OppenheimerDJFontein:ea


Vorsif*.r des Aufsichtarates: Landshauptmnn*sWt*varrar Kornmsrziairat Ing. A.gusf K ar gIVarsiand: Dir,. Dipl. Ing. Haas Bhrno., Dir. Hens Moasbau

To the


1818 H-Street, N.W.

WASHINGTON 25, D.C. LUFTPOST!EINGESCHRIEBEN!

Mw Zein hrs Nachricht van Dec . 29, 1 958uns. zeichen Rev/ Wie Wien, am Febraury 3rd,I. Hokensfaufngess* 6 1 959.

Beit.II: Loan No. 213 AUA.

We acknowledge receipt of the copy of your letter, December 29,1958, to Dr. KMlliker, Verbundgesellschaft and the enclosedsample application forms to be used in applying for withdrawals.Further you sent us forms for the quarterly reports of estimatedwithdrawals from the Loan accounts.

Generally there will be no difficulties in furnishing this in-formation but at present we are unable to give you more infor-mations than are laid down in your letters of December 2nd, 1958,concerning the list of goods and the withdrawal scheme for localexpenditures. We shall endeavour in providing the quarterly re-ports on a regular basis beginning with the 2nd quarter of 1959.

In the 1st quarter of 1959 applications for withdrawals concer-ning goods of category I and II are not intended.

As the application requesting you to pay interest and other char-ges to yourself has to be submitted only once we enclose the sig-ned form aoout the inserted amount of total S 5,000.000,- .

Further we submit a list of persons wjio are authorized to signwithdrawal applications as well as the authenticated specimensignatures of each such person. If we shall have any questionsin connexion with disbursement procedures we shall not hesitateto call upon you and thank you in anticipation for your help.

Very truly yours

OSTERREICHISCHE DONAU TWERKE

Enclo sure Aktiengesellsc/h

Tolgrommanschtft: Fornruf: FrcmhroIb"r: Bnkkorm: Crod ansaI#t.Snak'roin Wi... Ken* Nr. 0-0353Do .k,.f wwi t W i. n 63 47 11 D a aukr aft Ws" 1366DDoakrraft Yhb. 2250 0ofervbiahabe Land.,ba.& Wiren Kais Mr. 707.230

DouaukftGrmei 02394 Poshomrkasookege.: 170.250

List of persons who are authorized for signature

Name Specimen signature

Dir.Dipl.Ing.Hans Bbhmer .

Dir. Hanna Mosbauer . . . . . . . . .

21 clerks who sig a_2tEr frocuration

Dipl.Ing. Hans Kralik

Dipl.Ing. Dr.Franz Makovec . . .f. . . .

Franz Markytan .

Dipl.Ing. Friedrich Susan . . .

The above listet persons are empowered to sign in the

following ways:

1st: two managing directors collective or

2nd: one managing director and one clerk collective.

OSTERREICHISCHE DON KRAFTWERKEAktiengese chaf

UECEIAgD

.(

F iWR INTERNATIONAL BANK FOR(5.58) RECONSTRUCTION AND DEVELOPMENT

DateROUTING SLIP

____EROOM NO.

Action Note and Filepropriate Disposition Note and Returnpproval Prepare Reply

Comment Per Our ConversationFull Report Recommendation

Information SignatureInitial To Handle

REMARKS

From

FOR No. 7 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

OFFICE MEMORANDUMTO: Files DATE: January 21, 1959

FROM: J. H. Collier

SUBJECT: Austria - Negotiations with the Austrian Delegation Concerninga Power Rate Covenant

1. When the Bank informed the Austrian Government that it was pre-pared to enter negotiations for a loan for the Aschach project it statedthat it would require a covenant in the Loan and Guarantee Agreementswhich would insure that the earnings of the Verbundgesellschaft and itsaffiliated companies were maintained at a level sufficient to cover a)operating costs, b) adequate depreciation or contractual amortizationwhichever is the greater, c) interest on debt and d) a reasonable re-turn on equity.

2. At the Annual Meeting, Dr. Kamitz, the Austrian Minister ofFinance, said that the Government would be prepared to sign such a cove-

nant with two modifications. First, that the word "operating costs"

should be qualified by a statement that such costs should be in accor-dance with prudent business management and secondly, that the covenantshould contain a phrase to the effect that rates should be adjusted inaccordance with Austrian price policy.

3. At the start of negotiations the Bank proposed two rate covenants,one in the Loan Agreement and one in the Guarantee Agreement. The cove-nant in the Loan Agreement obliged the Verbundgesellschaft to apply forrates sufficient to cover "(a) operating costs, including proper provi-

sion for maintenance and for depreciation or repayments of instalmentsof principal of debt when due, whichever is greater; (b) interest upondebt; and (c) a reasonable return on the equity". The covenant in the

Guarantee Agreement obliged the Guarantor to adjust the rates so that the

same three items would be covered.

4. Dr. Teufenstein, representing the Government, referred to theMinister's statement and asked that the two qualifications be includedin the rate covenant in the Guarantee Agreement. There was no dis-agreement on the first one. For the second, Dr. Teufenstein wishedto say that rates would be "adjusted in accordance with Austrian priceand currency policy, to such levels as will provide...etc.,...,". TheBank did not wish to accept this because rates are already adjusted inaccordance with Austrian price policy. It would, therefore, have placed

a stamp of approval on the present rates which is precisely what theBank wanted to avoid, since in its view, these rates are too low. Thisdisagreement emerged much more clearly later in the negotiations andremained unresolved at the end. Consequently, the Bank suggested thatthe words "taking into account both sound public utility practices andthe maintenance of stable economic conditions within the territories of

the Guarantor" be added after the words "c) a reasonable return on the

equity."

-2-

5. Dr. Teufenstein welcomed this but said that it was insufficient.

The maintenance of stable economic conditions was, he said, one of the

things which the Guarantor's policy took into account but it was not the

only one. In the absence of a specific reference to the Guarantor's

price policy it would be necessary to include some wording making it

clear that the covenant was not in conflict with the Austrian law under

which the Guarantor carried out its policy. On this point Dr. Teufen-stein was in a strong position since he could say that, if the covenant

did not contain these words, it would be legally invalid. The Bank did

not dispute this and hence agreed to include the words, "all being in

accordance with the provisions presently set forth in the Preisregelungs-

gezetz 1957 (Federal Law Gazette, No. 151 of July 1, 1957) of the Guaran-tor." In agreeing to these words, however, the Bank stressed that it didnot regard them as restricting the force of the covenant.

6. In order to understand the meaning of the covenant, it is there-

fore necessary to understand the provisions of the Austrian Price Regula-

tion Law. This law authorizes the Minister of the Interior to control

certain prices, in a manner which is "economically justifiable". The

words "economically justifiable prices" are defined in the law by a sen-

tence which, freely translated from the rather elaborate German, states

that "prices are economically justified when they correspond as well as

possible both to the economic conditions of the producers and to the

economic conditions of the consumers". When an application for an in-

crease in a controlled price is put forward, the Minister relies on the

advice of the so-called "Price Commission", a body comprising the inis-ter himself as chairman, certain other Iinisters as well as some non-

governmental representatives of business, labor and agriculture. Although

the role of the Price Commission as set out in the law is only an advisory

one, the Austrian delegation said that, in practice, it would be politically

impossible for the Idnister to fix a higher price than that recommended by

the Price Commission. (He could, however, fix a lower one).

7. It became clear during the negotiations that Dr. Teufenstein re-

garded the Austrian approach to price fixing, as set out in the law, and

the Bank's approach, as set out in the covenant, as different in substance.

he explained that, in the Austrian view, power rates had to be controlled

because they were not determined by the competitive forces of supply and

demand and that the Austrian approach explicitly reflected both these for-

ces. He criticized the Bank's approach for only recognizing the producer's

interests. In this he presumably reflected the Finance Minister's own at-

titude and perhaps also that of other members of the Government. Cautious

end tactful though he is, he remarked at one point, indicating the covenant,

"This is your theory about power rates. It is not ours." It was not, there-

fore, possible to avoid the conclusion that the Austrian Government was pre-

pared to accept the covenant only on the assumption that, in the absence

of some specific definition of "reasonable", a "reasonable return" is what

the Price Commission says it is.

8. In order to avoid this result, the Bank attempted to obtain some

agreement about a minimum return that could be regarded as reasonable. A

memorandum aing the lines of Annex A was therefore submitted to the Aus-

trian delegation. The reaction of the Verbundgesellschaft was approximatelyas follows:

-3-

1) They claimed that their power tariffs were not low in rela-

tion to those of neighboring European countries.

2) They admitted that the rate of return was low but argued thatthis was the result of special circumstances. They said that

the rapid increase of power demand during the postwar period

had resulted in the V.G. system having an unusually high pro-

portion of new hydro plants. These plants were carried on thebalance sheet at almost the full original cost since deprecia-

tion had been charged against them only for a short time.

hence the rate of return as shown by the financial statements

was correspondingly reduced and would increase over the next

few years without any increase in power rates, provided that

the increase in power demand came down to a more reasonable

figure. They submitted a memorandum elaborating this view.

3) They could see no particular reason why the return on the

equity should be not less than the average cost of the Ver-

bundgesellschaft's borrowed funds. When asked what he would

consider a reasonable return, Dr. Stahl, the General Direc-

tor of the Verbundgesellschaft, embarked upon a disquisition

about why a government should nationalize a power industry.

He could see little point in nationalizing a power industryif, thereafter, it were to be run precisely as it would have

been had it not been nationalized. If, therefore, a govern-

ment did take over the equity in a power industry it could pre-

sumably decide what kind of return to earn simply as a matter

of general policy. In the end, this was nothing but a decision

about how much of the benefit of the power industry should go

to the power consumers and how much to the budget. He said

that he would certainly apply for a rate increase if it ap-

peared possible that the Verbundgesellschaft might go into the

red but he appeared to regard any return above this minimum as

a matter for the government.

9. However, in the end, Dr. Stahl, an agile minded person not averse

to compromise, agreed to sign the Bank's memorandum. He did so, however,

after explaining that he was prepared to accept the principle therein de-

scribed provided that it was regarded as somewhat general rule of thumb

and not, as he put it, "as a kind of Bible".

10. Dr. Teufenstein, on the other hand, said that the Government could

not possibly sign it. By giving a precise definition to the rate of re-

turn, it would by itself determine power rates. "If we signed this, "he

said, "we would not need a law at all". Instead he offered a statement

cf his own which he said he was prepared to sign. This appears as An-

nex B. In the original version put forward by Dr. Teufenstein, the words

"applicable in principle in its territory, it being understood that",read "adoptable in principle in its territory in so far as hereby", andalso the words "reflecting the provisions of the existing price regula-

tion law" appeared after "Guarantee Agreement". Dr. Teufenstein agreed

-4-

to the revision on the grounds that they were changes in wording only.He can therefore be expected to defend this statement to his Governmentby stressing the reference to Austrian law in the Guarantee Agreement.

It should be emphasized that the difference between the AustrianGovermnent and the Bank did not originate in the first place from a con-flict of view about the adequacy of the present rates. When Dr. Kamitzput forward his views in Delhi and when Dr. Teufenstein was given hisinstructions before the negotiations, neither had any idea that the Bankthought the present rates were unsatisfactory. It can be presumed thatthey took the view that they could agree to a rate covenant provided thatit did not involve any change in the Government's policy or, at the veryleast, in the price control law.

During the negotiations, the subject of the rate covenant was takenfirst and the argument over the actual rates occurred afterwards. Dr.Teufenstein did not take any specific position on the adequacy of thepresent rates. His objection to the Bank's criterion was not simply thatit implied that the present rates were too low. His objection was direc-ted against any criterion in so far as it would conflict with Austrianlaw. When he was asked whether the Government would regard the presentrates as fulfilling the covenant he avoided the question, saying that onlythe Price Commission could properly answer it.

Annexes A & B

cc: Mr. FinneMr. FonteinMr. Rutland

IN,.

Annex A

MEM ICANDUM

1. During the negotiations in Washington for the Aschach ProjectLoan, the views of the Bank and a memorandum of the Verbundgesell-schaft dated 3 November, 1958 concerning the rate of return on theequity of the Verbundgesellschaft and its affiliated companies werediscussed. It was agreed that under Section 5.08 of the Loan Agree-ment and Section 3.06 of the Guarantee Agreement, a reasonable rateof return on the equity taking one year with another is not lessthan the average cost of borrowed funds to the Verbundgesellschaftand its affiliated companies.

2. Reoresentatives of the Verbundgesellschaft emphasized thatsince the time of the previous loan negotiations with the Bank,rates of the Verbundgesellschaft system had been increased by ap-proximetely 25.5% and that another application for an increase inrates at the present time might be impracticable. It was agreed,however, that it was the intention of the parties concerned thatany adjustments in rates required under Section 5.08 of tha LoanAgreement and Section 3.06 of the Guarantee Agreement should bemade w"thin a reasonable time so that taking one year with anotherthe reauirements of this Section would be met.

TJT2I AT TONAL BK' FOR REOGZSTRUCTIOUAND DEVELOPiEN T

OSTERREICEISCHE ELECTRIZITATSWTRTSCHAFTS-AKTTENGESELLSCFAFT (VERBUNDGESELLSCHAFT)

Annex B

1. The Guarantor has taken notice of the above statement. Itaccepts the formula on a reasonable return on equity expressed there-in to be in general economically justified and also to be applicablein principle in its territory, it being understood that its obliga-tions determined in Article 3.06 of the Guarantee Agreement remainunchanged.

REPUBLIC OF AUSTPJA

January 6, 19-0

0*terreichische Elektrixitatswirtsohafts-Aktiengesellschaft

An Hof 6,Vienna.

Gentlemen:

I yish to acknowledge receipt of your letter of

December 16, 1958 (your refereno. Rov/Zh/Fk) enclosing a

copy of the supplement to the consent of the National Bank

for the recent loan for the Aschach project.

Very truly yours,

Douglas J. Fontein.

DJFontein:rb

December 30, 1958

Dear. Dr. Teufensteint

I acknowledge receipt of your letter of December 9, 195

and of the attachments regarding the external debt of the Re-

public of Austria and its agencies contracted since June 30,

195*.

Yours sincerely,

William DiamondDepartment of Operations

Furope, AfricF end AUstralasia

Dr. W. Teufenstein'inistry of FinanceJohanresgisse 5Vienne, Austria

JJentgen : fgs

C-1

December 29, 1958

Dr. Ernst WagnerWien IKirntnerring 10Austria

Dear Ernst:

I wish to acknowledge the following letters:

Illwerke Loan - Gleijbrang

Your letter of December 11, 1958. I hope to have the power ofattorney in your favor executed within the next few days and will sendit to you as soon as possible.

Aschach Project Loan

Your letter of December 11, 1958, enclosing the various docu-ments which will be added to our files.

Your letter of December 19, enclosing the supplement to theconsent of the Nationalbank.

Your Honoraria

Your letters of December 16, enclosing bills for servicesrendered in connection with the Kreuzeek-Reisseck Loan, the Investi-tionskredit Loan and the Aschach Project Loan, have been forwardedfor payment. You should receive advice of payment within the nextfew days.

It was a pleasure to talk to you over the telephone and my

only regret is that it was not possible for us to see each other inZurich. I hope you finally were able to enjoy a well-earned rest.

-2-

I take this opportunity of wishing you, Greta and Barbara aHappy New Year on behalf of us all.

With kindest regards,

As always, yours

Douglas J. Fontein

DJFontein:ea

FILE COPY

.

r ore

f3Qeri thn Afr - Ie 7 - tI A

22AU

M? r P . --6 i a e- ne

utd

1 T:lVo?VM~ir~ i e

-oceixe19,1956

mer r, sacek:

2. lephoned ;ir c'ico tnio zmcrnimir: thse hope tht I i :ilht see you befrre youleift town arAc e n: to nMy great, reg;ret tht

ad r1readQ de rted. .m sorry iedohat I ue out o e c...ice ziot of this

wek i di not ev tunity to ehekeusa : it: o-u. hr oa very muca Lor ;ourCrirster curd -- Ic t re take this oppertunityt

oi Sendia yo0.i warmeet greetings of the Jeason.

Aincerely yours,

J. o ke 1lappVic e resident

-etorreIchsoche Inves tition~se'edit, A.G

vienna, A astria

JB /er

December 18, 1958

Dear Mr. Samuels

I am glad to have the piotalm of the

Austrian loan signing and am having it fra&ed

and hung in my "gallery".

MYay thanks.

7incerely yours,

black

&xgene R. Plack

Mr. Nathaniel SAwaelsKunm, Loeb & Co.30 Wall StreetNow York 5, N. T.

mel

FoRm No. 57

(5-45) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

OFFICE MEMORANDUMTO: Files DATE: December 16, 1958

FROM: J. H. Collier

SUBJECT: Austrian Bond Issue

1. A meeting took place on October 29 at 2:30 pm, between representa-tives of the Bank and of the underwriters for the Austrian bond issue todiscuss a possible stand-by arrangement. Present were Messrs. Cope,Lejeune, Diamond, Collier and Fontein for the Bank, 1r. Henry Necarsulmerfor Kuhn, Loeb and Co., 1r. Otto Marx for Ladenburg, Thalmann and Co. andMr. William Schrenk for Cravath, Swaine and Moore.

2. Soon after the meeting began it became apparent that Mr. Necarsulmerand Mr. Marx had not had time to coordinate their positions on the stand-by. Mr. Marx was still very much in favor of what came to be called a"reverse stand-by", i.e. an arrangement by which the Bank would place anorder for a certain number of bonds but with an option for the underwritersto dispose of them elsewhere if they could. Mr. Marx argued that the Bankwould come out in the same place either way. Mr. Cope said he thought sucha reverse stand-by would be difficult to sell to the Executive Directorssince it would raise a number of problems for the Bank. Mr. Necarsulmersaid that Kuhn, Loeb had decided against asking the Bank for a stand-by,or even a reverse stand-by. This therefore settled the matter. Mr. Necar-sulmer added that the only kind of "stand-by" Kuhn, Loeb would favor wouldbe simply an understanding that if the public issue were less than expectedthe Bank would increase its loan correspondingly as had been done in pre-

vious joint operations. Mr. Cope said that this operation differed some-what from some previous ones in that there was no clearly defined globaltotal for the issue and the Bank loan together which could be regarded asnecessary for the borrower to obtain.

3. Cn the question of repayment of the bonds in currencies other thandollars at fixed rates, Mr. Necarsulmer said Kuhn, Loeb were very keen onthis idea. It would make quite a difference to the amount which might be

sold in Germany. Mr. Cope said that, although he thought Mr. Black hadsome views on the question, the Bank would not object if Kuhn, Loeb be-

lieved it was the right thing to do. Mr. Necarsulmer said they had in-formed the State Department of the proposal and had received no objection.(The currencies finally agreed upon for the repayment option were Austrian

schillings at 26 to the dollar German marks at 4.20 to the dollar andsterling at $2.80 to the pound).

4. At a meeting the following week Dr. Teufenstein raised the questionof increasing the Bank's loan if the issue were smaller than expected.

He said the Government had the authority and would be prepared to guaran-tee a larger loan from the Bank to the Verbundgesellschaft. Mr. Cope said

-2-

that the Bank had decided on the amount of $25 million in the absence ofprecise knowledge of how much the issue would be and subject only to someadjustment if there were to be a stand-by. In these circumstances, itwas unlikely that the Bank would be prepared to reconsider the amount ofits loan.

5. Cn November 24, during Dr. Kamitz's brief visit to Washington andNew York, both he and Kuhn, Loeb asked Mr. Black whether the Bank wouldbe prepared to increase its loan. At that time they appeared to believethere was a possibility that the issue might have to be reduced. Mr. Blackreplied that the Bank would prefer to agree on a stand-by and Kuhn, Loebappeared more receptive to the idea. A draft stand-by agreement was pre-pared under which the Bank was to stand by for up to $5 million principalamount of the bonds. The Bank would purchase the bonds at a price a quarterof a point above the price received by the borrower and would also receivea stand-by commission of 1% of the principal amount of any bonds not pur-chased under the stand-by. however, on November 28, Kuhn, Loeb informedthe Bank that they would not, after all, require a stand-by and the issuewas finally made for $25 million.

cc: Mr. CopeMr. FonteinMr. SpottswoodMr. Rutland

KUHN, LOEB & CO. December 12, 1958

Eugene R. Black, Esq.PresidentInternational Bank for Reconstruction and

Development1818 H Street, N. W.Washington, D. C.

Dear Mr. Black:

We thought that you might like to have this study of

expressions of lenders and borrowers to add to what must by now

be a highly illuminating collection.

Yours sincerely,

Nathaniel Samuels

pkEnclosure

A

.

iu

. .. . . .s.

.. ..s.- - -3

December 12, 1958

Osterreichische DonaukraftwerkeAktiengesellschaft

Hohenstaufengasse 6Vienna, Austria

Centlemen:

Loan No. 213 AUA

Now that the above loan has become effective we would

be clad if yuu would begin the subnission of progress

exports, as discussed with Mr. Finne, on the general lines

of those which ycu send on the Vlb Persenbeug project

(Loan No. 149 AUA).

Yours very truly,



Wi 0:mo

FORM No. 26(5 58) INTERNATIONAL BANK FOR RECONSTRuCTION AND DEVELOPMENT


INCOMING WIRE

DATE OF WIRE: .win UD 19% ROUTING

TO: ACTION COPY TO


win_ Decoded By

TEXT:

--- m

DU LO AND

AW=M0 -1 -SAKPW SO W M9 9

MAXGM IRWM W=DT MM I 4RAT AD O

TYPED

U S

U 0 N1

Mr. Henry Riley Decerber 10, 3198

Leopoldo Cancio

Iman No. 213 AUA (Aschach Project)

The Loan and Ouarantee Agreements (Aschach Project) - Loan

No. 213 AUA - came into force and effect yesterday Decemiber 9, 1958.

LC/lo.

cc: Mr. Cavanauigh& Collier' Fontein" Spottswood" Jones

Legal FilesGeneral Files

42-

S4( ,44- -N-

- - - -- C - - 14 j

-4-- ---

$ -- - - - - - N

- - --- j4

N- -x -

04'. . -

4--i 4>(-t - -4 -- 4pris 44r- i

'-4- -4 (jo- ,

4ou 4C 44e li Ne -f priv te -op m s 4> o1( n 73 4.; 4 .dI

x 4.<4.s se - f 44ia k rthrtoM r

424-4 FUiC.e~ tsc e . . d.4 Ec Jebt ofhwa xi4 4 4-4 4-.

K'

Y' O 'S

- s ~

aS

I IC C

-/

12. .rsprunglich begebener Betrag: 100,000.000.- Deutscke Kaza

13. ZahlungEwahrrang: Deutsche Mark

14. tmortisationsbeatimmungen: Ab 1. November 1964 bis einscjhielich

1. November 1983 gelangen jbbrlich DU 5,000.00.- zur Ti1lgung.

15. Belastete EinkUnfte und belaste-les Kapitel:

16. Gesetz oder ErlaS, mit welchem die Anl e'the genehmigt wurle:

- -- _ _ __ _ _ __ _ __x-_ __ _ _ __ _- - - - - - - -- - - -_ _ _ _ _ _

- :: .xk

najlamIno boeteerer 3etrag: 25,*Q,.OOO Wn-%

brc USj 6n4~, Dsntaeho lark c outerrciing

I 1.aber 96? bi 1 DeLeJL 9 2,o8e.7nc4nd w 1. Desenbr 19"{ 4X- 2,2 .

i1

12. TrsprUnglich begebener Betrag: 40,000.000 Schweiser Franken

13. Zahlungo- ahrung: Schweizer Franken

14. Amortisa ionsbestimmungen:31.1o.1 0 efres 3,18o.ooo.- 31.1o.1965 2frcs 4c,59.000.-

61 " 3,339.000.- " 6 " ,262.ooo.-

2 3,506.000.- " , 4,475.ooo.-

3 " 3,682.000. " o. -

64 3,865.ooo.- 4,9 4-oo.-

15. 3elastet* EinkUnfte urd belasteU Kut i

Erlage 4us Stromlieferunen der Vere ez

16, 'esetz Ider ErlaB, mit welchem Anleihe g nrmig: wurde:

Erlass 4es M fLr Finanzen vor. m .3ept.i7<, 1. 12.3oo-15iy58

F 5-5) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT


INCOmING WIRE

DATE OF WIRE: 9 . 1958 ROUTING

ACTION COPY T' . COM

INFORMATION COPY TO .FROM

Decoded By

TEXT:

jSC" W=na MMs THEs F=P OFca Y= CAUX 0 Do 9th. A31D

HAV. W=WC W=E &v'IgA=X TUT TOB LOAN AND GUAYAM

As rec*ived.

DUPLICATE

DEC 9 12~P~0DE

FORM No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(5.58) .......... PINTERNATIONAL FINANCE CORPORATION

OUTGOING WIRECLASS OF SERVICE: FULL RATE DATE: DECENBER 9, 1958

TO: FINAZMI TSTERIUMVIENNA

COUNTRY ( AUSTRIA

TEXT:

Cable No.

AM PLEASED NOTIFY YOU BANK ACCEPTS EVI DENCE SUBMITTED IN ULFILLNT CONDITTONS

PREEENT TO EFECTTVENESS OF LOAN AR TNT (AScHACH PROJECT) DATE DECEBER

TWO 1958 BETWEEN BANK AND OSTERREICHISCHE ELEKTRIZITATSTRTSCHAFTS

AKTIENGESELLSCIF AFT (vERBUN1DESELLSCHAFT) AND OSTERREICTIS Cf4E DONAU KRAFTWERKE

AKTI F7GESELLSCUAFT AND UARANTEE AGREEMENT OF SANE DATE BETWE ' RFPUBLTC Ov AUSTRLAAN) BANK. CCNE TNTLY LOAN AND G'ARANTE A3REEMENTS BECOME EFCTIVE TODAY

EMBER NINE 1958. PLEASE CABLE CONFIRMATION RECEIPT THIS CABLE

BLACK

INTERNATIONAL BANK "OR -ECCNSTRNCTION

AND TFLOPME T

AUTHORIZED BY:NAME: Leopoldo Cancio For Use by Archives DivisionDEPT: Legal Checked for DispatchSIGNATURE:

(Signature of Individual authorized to approve cable).

ORIGINAL (File Copy)(IMPORTANT: See over for guide in preparing Outgoing Wire)

GUIDE FOR PREPARING OUTGOING WIRES

1. Class of Service

Type in class of service desired. Each class is described as follows:

Letter Telegram Letter telegrams are normally delivered the morning after day of despatch. Thecost is half the cost of full rate messages with a minimum charge for 22 wordsincluding address and text.

Full Rate Full rate messages are normally transmitted and delivered immediately. Thereis a minimum charge for 5 words, including address and text.

IBF Govt. This is a preferential rate extended by some member countries. Messages aresent at full rate speed and at about half the cost. This rate normally should beused whenever available. It is at present available for the following countries:

Bolivia Cuba Honduras *SyriaBrazil Dominican Republic Jordan UruguayBurma Ecuador *Lebanon VenezuelaChile El Salvador Nicaragua Yugoslavia

*China *France PakistanColombia Greece PanamaCosta Rica Guatemala *Peru

*In these countries the letter telegram rate is lower than IBF government rateand should be used for messages when immediate transmission is not required.

Code Code messages are transmitted at full rate (or IBF Govt.) speed and cost. Thisrate should be used only for confidential messages to staff members having acode with them.

Day Letter Day letters are delivered during the day of transmission and should be used onlyfor messages in the United States and to Mexico and Canada. There is a mini-mum charge for 50 words in text.

Teletype To be used only for messages to the New York Office, United Nations, and certaincommercial firms. For information, call Cable Post (Ext. 3008).

2. Address

Use only last name of addressee and cable address whenever possible. The Bank cable address"INTBAFRAD" is registered in Paris, Bogota, Canal Zone, Karachi, Lima, London, New Delhi,New York, Quito, Tegucigalpa and Tehran. The International Finance Corporation cable address"CORINTFIN" is registered in New York, Paris and London. The name of the country of destinationmust always be added. (No charge is made for the name of a country.)

3. Text

Messages to Missions and to Resident Representatives should be numbered. These numbers may beobtained by calling Ext. 3008.

Type text in capital letters and double space between lines. The text should be edited to eliminateunnecessary words and unnecessary punctuation. If punctuation is needed, spell out the words"Comma," *Stop," etc.

Use common abbreviations whenever possible, i.e. reourlet, reurfive, etc. Write as one wordhyphenated words, hyphenated names, and certain two-word groups, e.g. Airmail, Newyork. enduse.

4. Signature

Type in last name of sender. Use- INTBAFRAD or CORINTFIN as part of the signature only whenaddressee does not know the address of sender.

5. Authorization

Type in name of department of staff member authorizing message and have authorizing staff membersign the original (pink copy). A list of authorized signatures is kept in the cable office.

Forward messages in triplicate in a cable envelope to Room 211 for despatch. The cable service is openfrom 9:00 a.m. to 5:45 p.m. on working days. Special arrangements should be made for the despatch ofcables outside of these hours.

ANY QUESTIONS REGARDING INCOMING AND OUTGOING WIRES SHOULD BE REFERRED TO THECABLE POST, EXT. 3008.

C4.

0

FORm No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CPY

(5.58) INTERNATIONAL FINANCE CORPORATION

OUTGOING WIRE

CLASS OF SERVICE: FULL RATE DATE: DCEMBR 9, 1958

TO: DONAU DRAFTVI ENWA

COUNTRY ( A.TSTRTA

TEXT:

Cable No.

AN PL ASED NOTIF YOU BANK ACCEPTS FIDECE SUIBITTED TN WIYLILMENT CONDITTONS

ITT TO EF-CTTVENESS OF LOAN AGrE"T fASCHACM PROJECT) DATED DECE BE

TWvO 1958 BETEEN BANK AND YO' ANDO STER] CISCE ELEKTRI ITATSWTRTSCHAFTS-

AKTTENGESELLSC{AFT (VERBUINDGESELISCAAFT) AND GU'ARANTEE AGREEME~NT OF SAYME DATE

BPTEP 9YPT FLC OF' AFSTRI A AND DN'. GOD SFQ TE'TLY LOAN AND OUAR.ANTEE

AGREE ENTS BECOiE FYECTIVE TCDAt FC RNT 1958. PLEASE CALE

CONET RMATTON RECFJPT THTS CABLE

BLACK

AUTHORIZED BY:

NAME: Leopoldo Cancio For Use by Archives Division

DEPT: Lega Checked for Dispatch

SIGNATURE:__ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _

(Signature of individual authorized to approve cable).

ORIGINAL (File Copy)

(IMPORTANT: See over for guide in preparing Outgoing Wire)


1. Class of Service


Letter Telegram Letter telegrams are normally delivered the morning after day of despatch. Thecost is half the cost of full rate messages with a minimum charge for 22 wordsincluding address and text.



Bolivia Cuba Honduras *SyriaBrazil Dominican Republic Jordan UruguayBurma Ecuador *Lebanon VenezuelaChile El Salvador Nicaragua Yugoslavia



Code Code message's are transmitted at full rate (or IBF Govt.) speed and cost. Thisrate should be used only for confidential messages to staff members having acode with them.


Teletype To be used only for messages to the New York Office, United Nations, and certaincommercial firms. For information, call Cable Post (Ext. 3008).

2. Address

Use only last name of addressee and cable address whenever possible. The Bank cable address"INTBAFRAD" is registered in Paris, Bogota, Canal Zone, Karachi, Lima, London, New Delhi,New York, Quito, Tegucigalpa and Tehran. The International Finance Corporation cable address"CORINTFIN" is registered in New York, Paris and London. The name of the country of destinationmust always be added. (No charge is made for the name of a country.)

3. Text


Type text in capital letters and double space between lines. The text should be edited to eliminateunnecessary words and unnecessary punctuation. If punctuation is needed, spell out the words"Comma," "Stop," etc.

Use common abbreviations whenever possible, i.e. reourlet, reurfive, etc. Write as one wordhyphenated words, hyphenated names, and certain two-word groups, e.g. Airmail, Newyork, enduse.

4. Signature


5. Authorization


Forward messages in triplicate in a cable envelope to Room 211 for despatch. The cable service is openfrom 9:00 a.m. to 5:45 p.m. on working days. Special arrangements should be made for the despatch ofcables outside of these hours.


CC+

(.

FORM No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(5.58) INTERNATIONAL FINANCE CORPORATION

OUTGOING WIRE

CLASS OF SERVICE: FULL RATE DATE: DECEBER 9, 1958

TO: VERBTIN1)NETZVIEN NA

COUNTRY ( AUSTRIA

TEXT:

Cable No.

AM PLEASED' NO ITIY TO BANK ACCEPTS EVT)EN1CE STBTMTTED TT\! FUL7Ii'LLMENT CO1TTIONS

PRECEDENT TO E CTIVENESS OF LOAN AGREEMA'T (ASCHACH PROJECT) nATTT) DECE MER

TWO 1958 BETWEEN BANK AND YOU AND OSTERREI CRI CUE DONAKRAFTWERKE AKTIENGESELLSC C.AFT

AND GUARANTEE AGREEMENT OF SAME DATE BETWEEN REPUBLIC OF AUSTRTA AN') BANK.

CONSEQUJENTLv LOAN ANT) GUARANTEE AMREEETS BECOME EECTIVE TODAY DECEMBER NTNE

1958. PLEASE CABLE CCNFIRMATON RECEIPT THIS CABLE

BLACK

INTERNATIONAL BANK WOR 707 r1'ST-J CTIONAND 1VELOMETJT

AUTHORIZED BY:NAME: For Use by Archives DivisionDEPT: Checked for DispatchSIGNATURE:

(Signature of individual authorized to approve cable).

ORIGINAL (File Copy)(IMPORTANT: See over for guide in preparing Outgoing Wire)


1. Class of Service


Letter Telegram Letter telegrams are normally delivered the morning after day of despatch. Thecost is half the cost of full rate messages with a minimum charge for ZZ wordsincluding address and text.



Bolivia Cuba Honduras *SyriaBrazil Dominican Republic .ordan UruguayBurma Ecuador *Lebanon VenezuelaChile El Salvador Nicaragua Yugoslavia



Code Code messages are transmitted at full rate (or IBF Govt.) speed and cost. Thisrate should be used only for confidential messages to staff members having acode with them.


Teletype To be used only for messages to the NewYork Office, United Nations, and certaincommercial firms. For information, call Cable Post (Ext. 3008).

2. Address

Use only last name of addressee and cable address whenever possible. The Bank cable address"INTBAFRAD" is registered in Paris, Bogota, Canal Zone, Karachi, Lima, London, New Delhi,New York, Quito, Tegucigalpa and Tehran. The International Finance Corporation cable address*CORINTFIN" is registered in New York, Paris and London. The name of the country of destinationmust always be added. (No charge is made for the name of a country.)

3. Text


Type text in capital letters and double space between lines. The text should be edited to eliminateunnecessary words and unnecessary punctuation. If punctuation is needed, spell out the words"Comma," "Stop," etc.

Use common abbreviations whenever possible, i.e. reourlet, reurfive, etc. Write as one wordhyphenated words, hyphenated names, and certain two-word groups, e.g. Airmail, Newyork, enduse.

4. Signature


5. Authorization


Forward messages in triplicate in a cable envelope to Room 2 11 for despatch. The cable service is openfrom 9:00 a.m. to 5:45 p.m. on working days. Special arrangements should be made for the despatch ofcables outside of these hours.


December 9, 1958

Kuhn, Loeb & Co.,Ladenburg, Thalmn & Co .,c/o Kuhn, Loeb & Co.,30 W&ll Street,New -ork 5, New York

Dear S3ire:

I refer to the Loan Agreement (Aschach Project) datedDecember 2, 1958, between International Bank for Reconstictionand Development and Osterreichische Elektriuititswirtschafts-aktiengesellschaft (Verbundgesel1schaft) and OsterreichischeDonaukraftwerke Aktiengesellschaft, and the C-arantee Agreementof even date therewith between nepbl1ic of Austria and the Bank.

This is to advise you that such agreements have becmmeffective today.

Sincerely yours,

(signed) A. Broches

A. BrochesAssociate General Counsel

LCancic/amk

FORM No. 26(5-58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT


INCOMING WIRE

DATE OF WIRE: DEC BER 7, 1958 ROUT ING

TO: IBRD ACTION COPY TOMR, CANCIO


Decoded By

TEXT:

FOR CANCIO ALPHA RY1CAB FRIDAY WAGN7R NJ HAS ALL DOCUMFNM EXCEPT OMON

3OVERIVEDT COqENT R77MIU D TO !IMr IVE Y MWO WURH WAS MAILED F RZ1

BONN LAST FRIDAY AND OPINION fNYD-SKAELRAKT R7 TOED TO NMBM NINE

WICH WILL BE SIGNED TUFSDAY MORNING STOP ON RECEIPT OF THFBE WAGNFR WILL CARLE

'YOU EARLY hES AY CARE OF 8A STOP BETA PL.ASE TELL MIM 0E

CAVANAUGH SAYS RFD14IPTION T!ABLE CORC

PONTRIN

DUPLICATEF

FORM No. 2A(5.58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT


INCOMING WIRE

DATE OF WIRE: mmBM 5, 1958 ROUTING

TO: 1VD ACTION COPY TO MR e

FOM: SCRA NFOMATION COPY TO

Decoded By

TEXT:

FOR UANGIO RE KFFCTIVENF:SS ASCHACH LOAN mAGNER STILL AWAITING RECEIPT

DOCWUM10T NUMBERED ON THR FIVE SIX AND NINE OF SEMTIO B MY ME10ANUM

NOVEMB42 WIICH H7, FXPEC8 NOT LATFR THAN MONDAY STOP ALREADY WZ IN

SCRW DOCUMENT EIGHT IATE- -CEMBER 9 STOP WILL CALL HIM AGAIN MONDAY AND

MONDAY AND CABLE YOU BEFE YOUR DEPARWRE NEW YCU

DUPLICATE

TYP

29

Eu

c0

N&

Ir. hichael Lejeum- December h, 1958

J. Brike Knapp

I understood that the Austrian public issue was to have optional

payment in Swis francs. Do you know why thia was abandoned?

pp/inSii ,zernd

FoRM No. 26(5-58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT


INCOMING WIRE

DATE OF WIRE:C. 4., 1958 ROUT ING

TO: MR. COLLIER FNTEIN OppEHEIMER IBWD ACTION COPY TO MR. COLLIER

FROM: VIENNA INFORMATION COPY TO MR. 7FDJEIN

Decoded By

TEXT: MASEB FOR YOUR KIND TELEIE CONCERNIG RATIFICATION OF LOAN

NUMBER TWO HUNDRED THIRTEEN FOR ASCHACH OUR BOARD OF DIRECTORS

DETERMINED CONSTRUCTION ON DECEMBER iST s0 THAT ALL pREISE IS

GIVEN TO START MANY THANKS FOR YOUR TROUBLES KIN T REAR AND

GOOD UCK

MOSRAUR

ORIGINAL

TYPED

GEC A 14fl2JC

TIBRD GA PLSTELEX MRT NY 01

MOM FOR VIENNA PLS

WHO R USINTERNATM

NAL

INTERNATIONAL BANK FO RECONSTRUCTION AND DEVELOPMENT 0

WA 501 GA PLS

VERBUNDNETZ FS NR. 2457/58 4.12.58 18.03 UHER MOR

HUGH COLLIER

HERZLICHEN DANK FUER DIE NACHRICHT, DIE UNS ALLE SEHR

GEFREUT HAT.

GRUESSE DR.STAHL

WHO R U

[BTBRNATIO

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

RCV FS NR 2457 DANKE SCHON BIBI

VERBUNDNETZ YANK

DER BUNDESMINISTER FUR FINANZEN

It -et u rleasu o o e 'o+ r - e j,ien oty i on e ''n-- ag'Ortrete that

yo7 Were not oh , CP I likl U ve ' : ed tos e (u mr C 1 e o1,ou u c, h i aoreci te ,u.-r coopertionin sett] +l' -i 1,illi o --n s e o

nd the assistance -o -<-e our Ior P- t oublicbond lo-oan on i e -I Ne [or l mrket. J , f ou r e

r,~ ~ ~ ~ , rr tourse the7Qt ,1

OpplCOrtnity to I ank 1r. k ae nrntiona-Bk ' or <econtruc ti od en e e op)no hs dono -or, Aus-triaunt 1i C', but I t t 'n C spe1i 1 0ive

(rt C 7ave ta e in b r1'. t" 0 on sUO to a ucCe ss o u

i7 Lest ro'rd

0. a Urke Ii n a '

intenau e, n aintel-,-nr ti o,(r ne 1nsruc tionrrand -Devro

1' '.hn n

EC09

UEGW - .O-

December 3, 1958

Dear Edgar t

Loan No. 213 AUA

As agreed with yo yesterday, I enclose two more

copies of the Secretary's Certificate concerning the

Aschach loan.

Sincerely yours,

Douglas J. Fontein

E nclosures:

Dr. Edgar Planiambassy of Austria2343 MaEachusettv Avenue, N.W.

ashington, D.C.

DJF/jgb

Basic Data Loan 213-AUA

ASCHACH HYDRO POW PROJECT

1. Joint Borrowers -

a) esterreichische Elektrizitatswirthschafts A.G.(Verbundgesellschaft, or V.G.)

b) Donaukraftwerke A.G. (D.K.W.)

Guarantor: Republic of Austria

2. Loan Number 213-AUA

3. Loan Amount $25,000,000

4. Date Loan Signed December 2, 1958

5. Effective Date December 9, 1958

6. Closing Date December 31, 1963

7. Period of grace 5 years

8. Term of loan 25 years

9. Exchange te 1 US $ - 26 Schillings

10. TCD Report Number 198

11. TOD Report Date November 7, 1958

12. Interest Rate 5-//%

13. Commitment Charge 3/4/

14. Amortization First Payment - March 15, 19640-41,000

Last Payment - September 15, 1983$1,030,000

15. Objective and Justification

The Aschach project is part of a power expansion program for the years1958/1963 being carried out by the V.G. Combine to meet the increasing demandof Austrian industry and to supply additional power for export to otherEuropean countries. The project will provide a substantial amount of energyto meet the base load requirements in the system.

16. Project Description

The Aschach project will be a run-of-the-river hydro plant, located onthe Danube, 19 miles upstream from the city of Linz. The dam structure willbe 1,600 feet long and will consist of a weir section, a power house, twolocks and an operational building. The power house will be equipped withfour generating units with a total c apaility of 264 iHM. A 21-mile trans-mission line will be built to connect the plant with the V.0. network.

17- Construction Schedule

Construction will start in January 1959. The first two units are scheduledto be ready for operation in June 1963 and the last two in December 1963.

18. Financial

The total cost of the project is estimated at 3 billion schillings (equiv,to ' 115 million), which is I? % of the cost of V.G's program of constructionplanned for the period 1958/63.

About 8 aillion of the 'w25 million loan will pay for imported equipment;the remainder will be used for expenditurei incurred in Austria.

Expenditures on the project and withdrawals from the loan account areexpected to be made at the following rate (in millions of schillings):

Expenditures Withdrawals

1959 and earlier years 600 2501960 700 1501961 700 1001962 650 751963

Total(in $ equiv.) 215 million 25 million

19. Sources of Funds

The Bank loan of 425 million was part of a joint operation in which a NewYork investment banking group headed by Huhn, Loeb & Comparr offered for publicsubscription w(25 million of external bonds of the Republic of Austria. Approx-imately half of the net proceeds of the bond issue (slightly more than $12million) were to be reloaned by the Austrian Government to V.0. to help financethe construction of the project.

The balance of funds needed for the construction of the Aschach projectand for the execution of the projects included in the V.G.'s current expansionprogram will come from retained earnings, equity contributions from the AustrianGovernment, long-term borrowings on the local market, E.R.P. counterpart loansand the proceeds of long-term loans by a group of German banks. V.G. winalso obtain substantial short-term financing in almost every year, from 1959to 1963.

20. List of Goods

See attached list.

21. Borrowers Organization

A law of March 1947 nationalized all electric energy production, trans-mission and distribution in Austria, except industrially-owned power plantsproducing energy for their own use and small power companies with generating

plants of 200 kw or less. The law established four "special companies" (inclu-ding the Donaukraftwerke) to be jointly owned by the Government and the province.-to operate some of the larger plants, and a company 1004 federally owned toconstruct, own and operate a transmission system interconnecting the plantsof the special ccupanies. This latter company, the Verbundgesellschaft (V.G.)was designed as the Government's trustee for the shares which it owns in thespecial companies. The V.G. is, in effect, a federally-owned holding company,since the Government holds over 50Z of the shares of the special campanies.

The V.G. has a Board of Directors of 24 members, eight of whom are nomi-nated by the Governent, eight by the provinces and eight by interests of thepower consumers. A managing board is appointed by the Board of Directors fora term of five years to carry on the day-to-day operations of the V.G.

Receipts from sales of electricity by the V.G. system accrue to the V.G.The V.G., in turn, pays the special company all their operating costs. Itdecides what investments in new facilities will be made by each of the specialcompanies and allocates the funds required.

The management of the special companies, including the co-borrower,Donaukraftwerke (DKW) are responsible for the technical aspects of theiroperations and for the day-to-day administration of the companies.

22. Design and Construction

Design and supervision of construction are the responsibility of theengineering staff of Donaukraftwerke. Construction of the Aschach projectwill be carried out by Austrian contractors.

23. Extracts from the Loan Agreement

5.08. The Verbundgesellschaft shall from time to time as required applyfor an adjustment of electric power rates to such levels as will provide tothe Verbundgesellschaft and the affiliated companies gross revenues sufficientat least to cover (a) operating costs incurred within the limits of prudentbusiness management, including proper provision for maintenance and for de-preciation or repayment of installments of principal debt when due, whicheveris greater; (b) interest upon debt; and (c) a reasonable return upon the equity*

Schedule 3 - Modifications of Loan Regulations No. 4

(c) The first two sentences of Section 3.01 shall read as follows:

"The Donaukraftwerke shall use reasonable efforts to purchase goods withthe currencies of the countries frM wVhh Bah goods aXeacquired. The proceeds of the Loan shall, to the extent that the Bank shallso elect, be withdrawn from the Loan Account in the several currencies inwhich goods are paid for; except that with respect to goods paid for in thecurrency of the Guarantor or acquired from sources within the territories ofthe Guarantor such withdrawals may, to the extent that the Bank shallo elect,be made in any currency selected by the Bank.

(d) The following paragraph shall be added to Section 3.05:

"If a Athdrawal is applied for on account of expenditures inthe currency of the Guarantor, the value of the currency of the Guarantorin terms of the currency or currencies to be withdrawn shall be as reasonablydetermined by the Bank."

(e) Section 4.01 shall read as follows:

"Withdrawal from the Loan Account. The Borrowers shall be entitled,subject to the provisions of these Regulations to withdraw from the Loan Accounts

(a) i) Such amounts as shall be required by the Borrowers to reimbwmethem for the reasonable cost of goods that have neither been paidfor in the currency of the Guarantor nor been acquired from sourceswithin the territories of the Guarantor;

(ii) if the Bank shalls agree, such amounts as shall be required bythe Borrowers to met the reasonable cost of such goods; and

(b) Such amounts as shall be required by the Borrowers to reimburse themfor such portions as the Bank may from time to time agree to of thereasonable cost of goods that have been paid for in the currency ofthe Guarantor or acquired from sources within the territories of theGuarantor.

24. Extracts from the Guarantee Agreement

3.06. The Guarantor covenants that it will from time to time, promptlyupon receipt of an application from the Verbundgesellschaft, adjust electricpower rates, or cause the same to be adjusted, to such levels as will provideto the Verbundgesellschaft and the affiliated companies gross revenues sufficientat least to cover (a) operating costs incurred within the limits of prudentbusiness management, including proper provision for maintenance and fordepreciation or repayment of installments of principal of debt when due, which-ever is greater; (b) interest upon debt; and (c) a reasonable return upon theequity taking into account both sound public utility practices and the main-tenance of stable economic conditions within the territories of the Guarantor;all being in accordance with the provisions presently set forth in thePreismgelungsgesetz 1957 (Federal Law Gazette, No. 151 of July 11, 1957) ofthe Guarantor.

25. Side Letters

(a) A memorandum of agreement dated December 2, 1958 and between the V.G.and the Bank, which states that it was agreed that:

(I) under section 5.08 of the Loan Agreement and Section 3.06 of theGuarantee Agreement, a reasonable rate of return upon the equity, taking oneyear with another is not less than the average cost of borrowed funds to theV.G. and its affiliated companies;

5

(II) it was the intention of the parties concerned that any adjustmentsin rates required under Section 5.08 of the Loan Agreement and Section 3.06of the Guarantee Agreement should be made within a reasonable time so thattaking one year with another the requirements of this Section would be met.

(b) A letter dated December 2, 1958 from the Bank to the V.G. and toDKW concerning the amounts which can be wdthdrawn from the Loan Account inevery year from 1959 to 1963 for portions of local currency expenditures onthe project.

(c) a letter dated December 2, 1958 from the Bank to the V.G. requestingthat V.G. provide the Bank with revised forecasts of income and cash flawstatements every year, which w ould incorporate any changes or additionalprojects which the V.G. may decida to undertake.

(d) a letter dated December 2, 1958 from the V4. to the Bank in whichthe V.G. agrees to provide the Bank with the revised annual forecasts.

Appraisal ission: August 1958Engineer: Christian FinneFinancial Analyst: Joseph FilippiArea: Hugh CollierLegal: Douglas Fontein

LOAN 213-AUA - LIST OF 0ODS

U.S. Dollars

I, Goods to be imported

Turbines, electrical andmechanical equipment, variousmachines, tools and miscel-laneous items. $ 8,000,000

II. Goods to be purchaued in Austria

14.iscellaneous goods paid for inthe currency of the Guarantor oracquired within the territoriesof the Guarantor. 02,0"000

III. Interest and other charges 5,000,000

Total $25,000,000

AUSTR~~~ CZECHOSLO AIAUSTRIA H0SL 0 VAKA

THE V.G. NETWORKAND INTERCONNECTED PLANTS -

SHOWINGPROJECT PROPOSED FOR BANK FINANCING

V. G. COMfIINE 9f- AdRE-SV6N - -KRNERRHydro PlantCA - -1 H

S Thermal Plants.2.20 KV TrSamisso Lin ASCHACH IN?

YBBS-PERSE U__-Tram min n to'b U P P ERConstructed

OTHER COMPUES V/NAS E RH ydro Pa nts s880 S

0 Ther mal Plants - M. LA RSE Nku AProject proposed for Bank financing -- IN

- -- ---- 'Other projects included in 1958- 63 .. ....L- - -- construction program -... --.. +.

G-K'RCHICH t -4

ACHENSE .- PRNEGI-- - - - - -AUFNITZOORF4t

isT' -- S T Y R A

- '~~T R 0 L ... ? |0TBRVER4UNT E A S T ....... _. ....

LUNERSEE -. .- Z-)

KALSEBACHREISSECK-KREUZECKiTIROL -

SWITZER AND 4,00,Re ScLAE

IT A L Y Y G S A I

-EPT EMBER 1958 Ibhu-bi2R

HOLD FOR RELEASE'W OR L D B AN K

1818 H STREET, N W., WASHINGTON 25, D. C. TELEPHONE: EXECUTIVE 3-6360

For Information OrlySUBJECT: Bank-Market Lend $50 Mil-

Press Reloa1c Ni. 565 lion in AustriaFor Release a.M, NewspapersDecember 3, 1958

The following announcement is being made in New York by Kuhn

Loeb & Co. and Ladenburg, Thalmann & Co:

"An investment banking group headed by Kuhn, Loeb & Co. and Laden-

burg, Thalmann & Co. is joining with the World Bank today in a combined

rperation to provide $50 million for various projects in Austria. The in-

vestment banking group is offering for public subscription $25 million

Republic of Austria 5-1/2% External Sinking Fund Dollar Bonds due December

1, 1973 at 96% and accrued interest, to yield approximately 5.9%. The World

Bank is lending the equivalent of $25 million to two Austrian public power

corporations.

"Approximately half the net proceeds from the sale of the bonds will

be applied tcward the financing of the continuation of certain capital ex-

prinditure prcgrams of the Republic, including electrification of the

Federal railroads, automation of the Federal telcphone system and construc-

tion of the Vienna-Salzburg express highway. The balance of the prce-ceds

will be reloanod by the Republic to the two public Prwer cornorations and

used, as will be the enuire proceeds of the Wcrld Bank loan, to help financr

construction of the Aschach hydroolectric pc;er project on the Danube near

the city of Linz. The project consists of a dam and a generating plant

with a maximum total capability of 264,000 kilowatts.

-2-

"The bonds are direct obligations of the Republic of Austria and

principal and interest will be payable, at the option of the bond-holder,

in New York City in United States currency, in Vienna in Austrian schillings,

in London in British pounds, and in Frankfurt a/M in West German marks --

in all cases at fixed exchange rates.

"The bonds are not redeemable, except through the operation of a

sinking fund, prior to December 1, 1968. The sinking fund provides for

annual payments of $2,080,000 commencing in 1962, designed to retire the

entire issue by maturity. The average life of the bonds will be 9-1/2

years. Sinking fund redemption price is par.

"On and after December 1, 1968, the bonds are subject to optional

redemption at prices ranging from 101 if redeemed befpre December 1, 1969

tc the principal amount on and after December 1, 1972.

"Austria has made application to list the bonds on the New York

Stock Exchange.

"The $25 million World Bank loan was made to the Verbundgesellschaft

(Austrian Electric Power Corporation) and the Donaukraftwerke (Austrian

Danube Power Works Corporation) as co-borrowers. The loan is for a term

of 25 years and bears interest at the rate of 5-3/4% per annum, includino

the 1% commission which is allocated to the Bank's Special Reserve.

Amortization will commence on March 15, 1964 will end September 15, 1983.

The loan is guaranteed by the Government of Austria."

-3

Supplementary Statement on World Bank loan for AschachPower Project in Austria

Co-borrowers

Tho Verbun 47-,nlanh&ft, a goverrnent-owned corporation, is responsible for

the coordination of the electric power industry in Austria. The Corporation

operates most of Austria's high tension transmission system and controls the

operations of four public power generating companies. The Donaukraftwerke, the

co-borrower of the ;25 million World Bank loan, is one of these companies and will

construct and operate the Aschach power project,

The Verbundgesellschaft and its affiliated companies, together with other

public companies connected with the Corporation's transmission system, operate

about 2.2 million kilowatts of generating capacity, or about 60% of all public

power in Austria, The system is interconnected with the power systems of

Germany, Switzerland, Yugoslavia and Italy. The Austrian power system is

particularly important to the European system because it has large reservoirs

from which water is readily available to generate power at times of peak demand.

In addition, substantial amounts of surplus power from run-of-the-river plants

are usually exported during the summer months. Cn the other hand, Austria

imports thermal power during the winter when the water flow of its main rivers

is low and hydroelectric power production is reduced.

About 60% of the power from the Verbundgesellschaft network was used by

industry in 1957. The largest single user is an aluminum plant at Ranshofen

which accounts for about a quarter of the industrial consumption. The most

important other large consumers are the iron and steel, chemical, paper, mining,

textile, metal and cement industries. The use of power by these industries

has been increasing at a rate of over 10% annually in recent years.

Power Expansion Program

MTo meet the substantial increase in power requirements in future years,

the Verbundgesellschaft and its affiliated companies are carrying out a

continuing construction program. At the end of 1957, the installed capacity of

their plants was 1,220,000 kilowatts. By the end of 1963 they plan to have

another 1,097,000 kilowatts of new generating capacity and an additional 540

miles (860 kms) of newi transmission lines. Construction work is far advanced

on five of the projects included in this program and these plants should be

in full operation by the end of 1959. Four of these power plants are being partly

financed by earlier World Bank loans to the Verbundgesellschaft and its affiliated

companies. Six additional plants will be built between 1958 and 1963; the Aschach

project is one of these and is the largest undertaking in the program.

Aschach Power Project

The Aschach project will be a run-of-the-river hydroelectric power plant,

located on the Danube, some 19 miles (30 kms) upstream from the city of Linz.

The dam structure will be 1,600 feet (496 meters) long and will consist of a weir

section, a powerhouse, two navigation locks and an operational building. The

powerhouse will be equipped with generating units having a total capacity of

264,000 kilowatts. A 21-mile (34 Ion) transmission line will be built to connect

the Aschach plant with the Verbundgesellschaft network. Construction is

scheduled to begin in January 1959 and should be completed in December 1963.

The total cost of the project is estimated at the equivalent of 115 milLie.

About 8 million of the 125 million World Bank loan will pay for imported

equipment; the remainder will be used for expenditures incurred in Austria.

Orders for the imported equipment will be placed after international competitive

bidding.

World Bank Loans in Austria

This is the seventh World Bank loan in Austria bringing the total lent

there to the equivalent of 91.7 million. With the exception of 410 million

for the expansion and modernization of industry, all of the loans have been

for the expansion of electric power facilities.

Aschach Power - Austria - Loan 0213 - P037355 - Public ...

Documents

Transcript of Aschach Power - Austria - Loan 0213 - P037355 - Public ...