THE WORLD BANK GROUP ARCHIVES
PUBLIC DISCLOSURE AUTHORIZED
Folder Title: Electric Power Project - Aschach Power - Austria - Loan 0213 - P037355 -Negotiations - Volume 1
Folder ID: 1516825
Project ID: P037355
Dates: 03/12/1956 - 12/03/1958
Fonds: Records of the Europe and Central Asia Regional Vice Presidency
ISAD Reference Code: WB IBRD/IDA ECA
Digitized: 11/20/2018
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M
THE WORLD BANKWashington, D.C.
@ International Bank for Reconstruction and Development / International Development Association orThe World Bank1818 H Street NWWashington DC 20433
A1995-199 Other# 16 Box #193713BElectric Power Project - Aschach Power - Austria - Loan 0213 - P037355 -Negotiations - Volume I
PAT. No. USA 1484611MADE IN U. S. A
RETURN TO RECORDS CENTER
CONTAINS ONLYPRE 1966 MATERIAL
DECLASSIFIEDWITH EiSTRICTIONS
WBG Archives
0
I~i2
Poposed] Ian - Austri
he inextit 8s or e eco z 0ns (L ~ -1Cc,
B 5.r/1ar 3-I ) gnacooedt Lo..n zor th enc'a
ProJecVin ati. sh to al onth 'foll igt a
-. M .Jnte - EconUmi AJpect
3. * r Finne - Thnic.I Asptecte
30
not : et en rlacD, -we do not know exaictlyvbhet eurrecin ill e needed, * n allproba iiy moeto: a order8 vil oe
ced e or irJ or >vtt.erlard
ithe rest of ti loa wmu: e e ed to covr'experiiture in Ausriasn sch Uli s.
TZhe ciirreny that the enk will usevi be deci Ln t 1i ht of the avail-ability of curencien at the tvie ofd .sbursernnt
CCOz ezOed A1tfon
attheed to the report (E :8-12O).
J. h'reby declare the iuwn iJ warious curroeiai tquv&lent
a ?5 mtflion for the AchAeh kroject in Austria ap owe ,
December 3, 1958
Jentletaon:
>e thank you for your let tcr of Uctober 2 19% en-ciyng your letter to otentil inveetors. , ave sincel earned from Dr. llaschek that th su -as very SuccOssfuland was 4ndeed oversubscribed. Ve should apreci ate re-ceivt ng from you a stateent af the distribution at the newshares.
) also naOtte thV ariOUS chnges whI cIL you are nLAki ng'n your stututon and we have no objoeti on to them. Vle par-
t:uerly :ecoe the acidti un of the auxhori ty to borro V. w the 'nternal orkt and e xshal be vry Interested in
any plans or ides whiAch you way have in this connectTon.''e shall be writing again very shortly About same of the
-rrblemi concerning ths future operati ons of your companywhi1ch we have been talkIng over with Dr. Hascek.
Yours sincerely,
Michael .. Le jeuneAssistant Director of OperatIons
Europe, Afri ca and Austrlasna
Uterreichische Tnvestitionskredit A.G.
Vi ennaAustria
Jil0o1li or :iea
Osterreichische Elektrizifa swirfschaffs-Aktiengesellschaft(Verbundgesellschaft)
Osterr. Elekirizititswirtschafts-A. G. Wien I, Am Hof 6
International Bank for -Reconstruction and Development
1818 H Street, N.W.Washington 25, D.C.
December 2, 1958
W.. I,shre Zeichon Ihre Nachricht vom Unsere Zeichen Am Hof 6
Batreff
Gentlemen:
We thank you for your letter of today concerning the
information you wish to receive concerning our investment
program and the bearing of Section 5.01 (a) of the Loan Agree-
ment of even date between us on the use of funds available to
the Verbundgesellschaft for this program during the period of
construction of the Asohach Project.
We hereby agree to provide you with this information
and we are glad to confirm that your letter also expresses
our understanding of Section 5.01 (a).
Sincerely yours,
USTERREICHISHE EIETRIZITTSWIRTShiAFTS-AXTIENCESLS HAFT (VERBUNDCESELLSAFT)
By_ _ _ _ _ _Authorized Representative
Vorsitze, des Aufsthtsrats; Sktilonsdbef Dr. Karl Siraubinger
Vrstand: Dr. Rudef Stahl (Vars.tzer), Dipl4-Ing. Fraou Hintermoyer. Dr. Karl K6lliker, Dipi-Ing. Dr. Oskar Vas
TT W: 4e . Fern8rslbW Senkkonto: Creditanstalt4Cnkvreln, Wien I, Sdofttingass* 6-
V~eunduitz U 29.6-60 Serie Wien 1904 OsterreIchsdi' LAnderbank Aktiengeselsdeft, Wien 1. Am Hof 2
PoshparkessenkontO: 10468
INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT
1818 H STREETN.W.
TELPHONE CULMVE 3-6300 WASHINGTON 25, D. C. CABLE ADORESS-INTIAP^RAO
Dessber 2, 19%8
osterre4dhiUe Elaktaiit ublrtschAmt-AMt "slssahaft (Verbndssellsehaft)
en IAuhRf 6
We ref1r to oar diseussions of yer investment proga for the.peiend.o eolostrie pewer predustion in Anstia. Our appraisal ofthe nanala position of yew osmpWW in Wrnoutie with the lean forthe Aadhash P.ojeet ve based on an everall eoastructon propan forthe yors 1958-963 eeting appiroximately $97 million .qivalent andy~ smpoa submitted to us ftnanclal foreeasts for this propam. Inview of the possiblity that this progan ay be altered or exeanb4we re that you provide as with revised fweeasts of inoome andeash flestatements every twelve manths whih uild inoorporate anydha v or aci tismal projeets whish you may deelde to undertahe.
At he present time al the f=uds required for the executionof te present program can reasonably be ezpoeted to be available.ouevor, there may be a temporary shortfall in the available financial
resouress %hih may oeapal yer Company to postpne eertain eonstrue-tin orks. With regard to usdh an eventmality we should like to trawyour attention to the ftet that mader Betion 5.01 (a) of the LeanAgreement of even date between us, whieb requires the oarrying oat ofthe Projoet with %ds diligenee and effiieney," the empletion of theAschaeh Projeet has first elaim en all te investment fAnds availableto you and your affiliated companies and sanuet be postponed beemseof the finencial requirements of ether parts of your pregran, exoeptas mutually agreed between you and the Bank.
Sincerely yours,
INTRWAIO 701 RZMWSRUCTIONAnD I4MENT
,r A:7/c94L
INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT1818 H STREETN.W.
TELEPHONE EXECUTIVE 3-6360 WASHINOTON 25, D. C. CABLE ADDRESS- INTAFRAD
Dooolber 2, 195
lep"U of Ahtvia
bstwrvddsehe ZloktwisltEtsvrt.mhft.-Aktleagp.. cdman (Temdesenseabft)
&eterviolaisehe DPm dtwatherm Ak ge sabaft
Dee Slres
We are witla. you with referoee to the LoanAg emat (Asehash. Prjeet) between the Bank nd the
diteweihlsohe asktu'istatwirtse . ---A 0sell.#aaft (Werbuadgesellahsaft) and tle stonvidebeisoekmmubraftiwbe Aktimaseellsobaft and the Guareatee
Agreement between the Republie of Austri'a and the Bmak,beth of ev date herewith, and to Bseetlee 6.01 and9.03 of I4mm Regilatlams IN. 4 of the Bank dated Jae 15,19%.
We propese that Seetlem 9.03 of lea RoeplatemsNo. 4 be interpreted e if it roods
estan 9.03. M.OM!LN1fs Eempt of"&Ul1 be .theri iieI thUsleask and
te blrrwer, the l4aw Apment and uarmateeAgement hMll la te ftare nd offset an
e date whea the kauk seblU dispetek to temorrwar mnd the Gamrater embles motirybgthem of its aoseptanee of the evidege requiredbi .e.ti.o 9.01.'
The effeet of this laterpretatis would be thataet"4&tending the provisiens of Seetin #.01 o the
len 3eglatios, fte lean end Oerantee A 'e..ate weld
--2 as
boome offeotive upon the dispatah of the eables byte Bank instead of upon their delivery to the
resipients.
If you &pros with this proposal please sigthe form of onfiratioS on the emdlesed mpy of hisletter and returs it to us.
8i6erely yours,
IMEALTIM"AL BANK PR RZOORNhUOTIONMiWPWNg
lv* " 7 sident
Dow=$
W'UDLIC OF WrIA
AITI3NB LcWAfl (V 33 D WrIL89AT
smmmumm mAuwu AmUNIM-
RyR
tr *&4b of ih hwr.lmg
Dat8
UTmTZUEIIsCOE DONAUMRAMERKE AIENGEELIS CRAFT
December 2, 1958
International Bank forReonstruction and Development
1818 H Street, N.W.Washington 25, D.C.
Gentlemen:
Referring to the Loan Agreement (Asohach Project)of even date, there is attached hereto a List of Goods tobe purchased out of the proceeds of the Loan to which werequest your agreement in accordance with Section 3.01 ofsaid loan Agreement. In the event that the total valueof gpods to be imported ehanges we agree to inform youand to make a corresponding adjustment in the List of Goods.
Please confirs your agreement with the foregoing bysigning the form of confirmation on the enclosed copy ofthis letter and returning it to us.
Sincerely yours,
WTERRUIIWCHE DONAUDAJTWERIEAXITGEELLSOCHAFT
Autrsid RepresentaWYvs
CNFIRMD3
IrERNATIONAL BANK MOR RECONSTRUCTIOND EmVE
, 19
Date December 2, 1958
LIST OF GOODS
U.S. Dollars
I.Goods -to be imported
TuWbiaws, electrical and $ 8,000,000menhanioal equipment, variousseohines, tools and Disoel-laneous items.
I. Goods to be purchased in Austria
Miiooflaneous gooda paid for in 12,000,000the ourreacy of the Guarantor oracquired within the territoriesof the Guarantor.
III. Interest and other charims 5,000,000
Total $25,000,000
MTERImISCRE DONAUKRAVIRE AiT3ENGESELISAFT
December 2, 1958
International Bank forReconstruction and Development
1818 H Street, N.W.Washington 25, D.C.
Gentlemen:
Referring to the Loan Agreement (Aschach Project)
of even date, there is attached hereto a List of Goods to
be purchased out of the proceeds of the Loan to which we
request your agreement in accordance with Section 3.01 ofsaid Loan Agreement. In the event that the total value
of goods to be imported changes we agree to inform youand to make a corresponding adjustment in the List of Goods.
Please confirm your agreement with the foregoing by
signing the form of confirmation on the enclosed copy ofthis letter and returning it to us.
Sincerely yours,
USTMREICHISc DONAUMRAFTWERMAXTIZNGESELLSCHAM
ersen ye
LIST OF GOODS
U.S. Dollars
I. Good to be imorted
Turbines, electrical and $ 8,000,000mechanical equipment, variousXaCbines, tools and adscel-laneous items.
I. Goods to be p2rahaxed in Austria
miscellaneous goods paid for in 12,000,000the ourrenoy of the Guarantor oracquired within the territoriesof the Guarantor.
III. Interest and other chares 5,000,000
Total $25,000,000
AUSTRIAN EMBASSY
2343 MASSACHUSETTS AVENUE. N. W.
WASHINGTON 8. D. C.
REF. NO. TELEPHONE DUPONT 7-2477
International Bank for December 2, 1958Reconstruction and Development
1818 H Street, N.W.Washington 25, D.C.
Gentlemen:
I refer to Section 3.01 of Article III of the Guarantee Agreement(Aschach Project) of even date between the Republic of Austria and Inter-national Bank for Reconstruction and Development.
In view of the broad scope of the term "agency" as used in thisSection, I fear that the Section may interfere with the business of nation-alized enterprises in Austria. These enterprises are organized as commer-cial corporations under the Austrian Corporation Law, are not included inthe Government budget, and conduct their business along the lines of privatecompanies.
My Government therefore requests your agreement under said Section3.01 that said Section shall not apply to such enterprises which have beennationalized pursuant to the Nationalization Law No. 168 of July 26, 1946(published in the Bundesgesetzblatt of September 16, 1946) and pursuant tothe Second Nationalization Law No. 81 of March 26, 1947 (published in theBundesgesetzblatt of May 10, 1947). It would be understood that in theunlikely contingency that the central gold and foreign exchange reservesof Austria were held by any such nationalized enterprise then the saidSection would apply to that enterprise notwithstanding the foregoingagreement.
If you can give your agreement pursuant to this request, please doso by signing the form of confirmation on the enclosed copy of this letterand returning it to us.
Sincerely yours,
REPUBLIC OF AUSTRIA
Authorized Representative
stoatiosal Bak for December 2, 1958Reosnstrautise am Dvlegmnt
=C8 a Streot, l..Vashiugts 25, D.C.
Gentleseas
I refer to Beetto 3.0 f Artie1 III of the Guratoe A'..meat(Asebsob Prjeet) of eves dat bhetwen the Xapsblie of Austria ad teu-atiasmal Bank for Re.S1strMOtOU and Devlopomwt.
In view of the Weed sope of the tars '4ajnOy as usa Is thisSgotL"I, I fatr tat the Sotvon my iterfei with the baziness of NmtiA-alised eterisS in Autria. Thee eaterprises are OreaiNed as sONmO.i
Oal qrpratjG vndr the Austrian Corporatieoa Law, are not iLaied in0e G,..ruawt budgt, and ecaduet tboir baminess alog the ise of private
ienpaaine.
4 Overamot thbrefre roqWetS Four aseont Mder said Soeton3.01 that said Seties hall MWt apply to smoh eaterprlees Ai&b have be..aUtia"1i1"d purse-at to the Iaftmliatim Law go. 166 of July 26, 1U6
(pube sbse in tho fuadeswsetsblatt of September 16, 1946) sed pursait tothe seeod atiosalisuet n Law So. 61 of Mareb 26, 194 (publ1hed In the
Bind..gesptou att of MW 10, 197). It would be uMderstood that in a1em1ihaly eo"tlnyenq that the gentral VO" and frota siehange resrve
ef Austria wee held bF sy sgwb matLegalime entaprise tbea he saidSeetiom weld apply to that enterprise sotUihstanding the forevaiag
If you 0" give yur sgeent pueroat to this request, please doso by sigaing the &ms of oonfiretatiL5 an the eneleed copy of this letter
and reuinxg it to us.
Bincer3ely yours,
UEPULIC (ft AiUSWkIA
cOIFIRMED: --t*briaed ~epY*6"a1Vfe
INTERNATIONAL 1'. RECeNTRUCTION
residen
Date December 2, 1958
LNTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT1818 H STREET,N.W.
TELEPHONE E CUTIVZ 3-6360 WASHrNTON 25, D.C. CABLE ADSN AF
DeumbW 2 , U95
du)VA" I
An NoAmteta
vim. I
Gem'laimn
Ve weok to o Iasi Apeement of m date betemm me a toS.Wmm 4. (b) ot Lea. a tism N.. 4, af tmmd is ga u3U 3
t Ue Lee Apesammt, 4i prwidee In subtane that you wte.ml#tl to maim f1tbvsv. m tre he Lean Aocet SW pwtam of1eas1 -e-patVAee ftr te ljfet. We prepove ftat the porteas fer
iA em vMl be mwiabuec be geesd iS Imp m 0 eU e bsIof prose eutiatoe of tW umounts roq.dred for the Proje*t, S
as lotetal t be wS uerma en asmt of loems espoaud.twos will be $22 milienG. 4W Otia ttel, smunts not eszeeding the
tallest"g may be %ithrwm, A the years Mhemsa
in 1999 m met .t rng4ag $ S.6 R1114s@la 190 as 18a4t net eedig * 3.2 *"qoI 194 easut met esse*ag 1.9 milmiesIn 192 to e-- t mt oeasng * 0.7 mIllie.Is 1%) an emapt not euseedig jJ millie.
MWe ot as mr 2 5 ef fe rmepetivo yearly alletatica awbe mltheu. in .eeb eelanew pwate..
.2-
Isponditur.. in eaes of allowable withdrawals may be earriedfeartz, to form the basis for disbursoment In a mbsequsat quarter.If in aq calendar quarter an ~at lees tbm the mazimm pezuisuiblefor that quArter Is wi*&u., the balamee alleated to hat quaWterwill be carried forward for disbarsoment in a subsequent quarter.
Applieations for mithdrawals to meet Iowa xpeaditre shaouldbe aeampaaied by a statement of ezpenditures for the Frej.t In %becaleari quarter during ibieh the expeaditures for whidb witdrawal isrequested were insurred, togothor with statemente of acmmulated expendi.tures on e Projeet and of total witdrawal sise the Iffeetuve Date.
The aggregate ameumt Wtdraws frm the Loan Asouat may at notime exeed the total expenditares on the Projoet sineo the EffectiveDato.
PFla onfirm your apeemet with the foregoing by sipingte foua of saufIrmatIam en the attaehed oepy of thin latter andreturmIang It to us.
Simseroxy your.,
INTISMAT Ea uOR RI ITRUCTMIOAND IDYMMlf
UTERM CHE EIEEIT WIRTSCHAPIS-ANTIENOUIS CHAr? (VRBUDGESELISCHAJT)
Authorized Representative
TEREIGHISGHE DONLUERAFTWiRE AKTIN-GOEUSrE.CHAI.
Authoized Repreentative
1. DurIng th ne stIatioms in Whagtoa r tMe hasboA YnjeetLean, tMe viev of the Bak and a S f e YwtImsee--ftndated 3rd November, 195, smeema.g the rate of retas an le equity ofthe verbaidoellhaft and its affleated eale were di sed.It was aeod that ander Seties 5.08 Ute Lean AgesMMAt md Geeties3.06 of the Guarantee Agpeemet, a resemble rate of retwa em 0eequity taking e year with amether is not lee tan the avrfap east etberrwed funds to the Varb eelmehft aid its affiliated seo.maa,
2. Reesentatlves of te VerbdPeoell.haft Me*ased tat elsethe time of tbe previms lem negetlatlw idtb the *&k& rates of tevYrbuadosellsehaft system had been inreased by opprosgtinay 25.0
o3d hat ather epplUstlem tw an inerease in rates at the presamttie migtt be impa*tleable. It we apeed, boeever that it was theistentiem of the parties esmesrned that OW adjustsmm in rates re-quired wader Soeti. 5.0 o the len Agpeemat .38 etes 3406 atthe Guarantee Agreemnt shuld be made witia a reasomable tim so tattaking am yew with aether the requfrements of this Seetls weuld bemet.
INEmITI YWTYkU R IOSTUCTIONAND vlIMMWW
ATazxanTmu LIZ KIThz?135WII5ARAA.AIIUN*ISELBAJT (vmasBpD3LzELnP)
1. The Guaranter bats taln metee of the abeve statemast. Itaseepte te formala em a reasommhle retw em equity expressd the iato be in peoral oamemle117 jimtdfled md also to be applimble Inrinsiple in it. teowita7,o it being mIsteed that its obligatle
determined in Artiale 3.06 af th Omaretee Agpostreemena m ingaed.
eU5LZC Or ASTto
Doesbew 2, l958
FORM No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(5. 58)ALFNC
INTERNATIONA FINNC CORPORATION
OUTGOING WIRE
CLASS OF SERVICE: LETTER TELEGRAM DATE: DEC&1BER 2, 1958
TO: DR. REINHARD KAMITZFINANCE MINISTERVIENNA
COUNTRY ( AUSTRIA )
TEXT:
,4e No.
VERY SORRY I DIDNIT GET BACK TO WASHINGTON IN TIME TO SEE YOU HERE (STOP)
PLEASE ACCEPT MY WARMEST COW3RATUA.TIONS ON THE SUCCESSFUL OUTCOME OF
YOUR EXTERNAL FINANCING RiEGARDS
KNAPPINTBAFRAD
Pf
AUTHORIZED BY:
NAME: J. Burke Knapp For Use by Archives Division
DEPT: Vice President Checked for DispatchSIGNATURE:
________________________
(Signature of in ividual 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). Sis 4f utluridd ia tures 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 workinjdsys .pe jal arrangements should be made for the despatch ofcables outside of these hours. -
ANY QUESTIONS REGARDING INCOM]M"r140AOUTGOING WIRES SHOULD BE REFERRED TO THECABLE POST, EXT. 3008.
FORm No. 26(5.58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
InCO-ING WIRE
DATE OF WIRE: EM 1958 ROUTING
TO: ACTION COPY TO
INFORMATION COPY TOFROM:
m N Decoded By
TEXT:
FS 2437
DM R eSMMM Vai 25 .11 Gm - Bm
D I
DANIEL F. MCNAMARA
VICE PRESIDENT
ALBERT J'RANK-GUENTHER LAw, INC. 131 CEDAR STREET, N.Y.
ADvERTISINo- PL Ic RELATIONS PHONE CORTLANDT 7-506 O
DRAFT
FOR RELEASE:
November , 1958
Republic of Austria Registers $25,000,000
Fifteen Year Bonds For Public Offering
Kuhn, Loeb & Co. and Ladenburg, Thalmann & Co.
Would Head Underwriting
The Republic of Austria filed today ( ) with the Securi-
ties and Exchange Commission a registration statement relating to
$25,000,000 External Sinking Fund Dollar Bonds due Dec. 1, 1973 which
would be offered to the public about Dec. 3 by an underwriting group
headed by Kuhn, Loeb & Co. and Ladenburg, Thalmann & Co. The bonds
would be unconditional direct general obligations of the Republic of
Austria. Principal of and interest on the issue would be payable in
New York City in United States currency, or at the option of the bond-
holder, at fixed rates of exchange, in Vienna in Austrian schillings,
in , in
and in Frankfurt in Deutsche marks.
It is expected that concurrently with the offering of the bonds
the international Bank for Reconstruction and Development (World Bank)
will agree to lend the equivalent of $25,000,000 to the Austrian
Electric Power Corporation and the Austrian Danube Power Works
Corporation jointly, two Government-affiliated corporations.
(more)
Approximately one-half of the net proceeds of the sale of the
bonds would be applied toward financing continuation of capi -
grams of the Republic, including electrification of the Federal rail-
roads, automation of the Federal telephone system and construction of
the 216-mile Vienna-Salzburg Autobahn. The remaining one-half of the
proceeds of the sale of the bonds would be applied, as would be the
entire proceeds of the World Bank loan, to financing in part con-
struction of the proposed Aschach hydro-power project consisting of a
dam on the Danube near the city of Linz and a generating plant to have
a maximum total capability of 264,000 kilowatts.
-0-
19
-0-
FORM~ No. 26S(INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
INCOMING WIRE
DATE OF WIRE: NOVEmBFR 29, 1958 1350 BOUT ING
TO: IRRD ACTION COPY TO MR. COPE
FROM: W~i INFORMATION COPY TO
Decoded By
TEXT:
YOuR CABLE AV 175 WASHINTON DC 215/214 26 652P STOP WRING MT ABS7NE
IN CONS QUEMF OF NKOOfIATIONS CONERNING WATERPjWJRfflORIZATION ASCRACH
VKt-JNDGESFLLSCHAFT INFORMED YOU THAT WE APPROVED YOUR PROPOSITION STOP
WE HERMITH CONFIH APPROVAL
DONAUKRAflT MOBBAUFR
DUPLICASIT
FORm No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
OUTGOING WIRE
CLASS OF SERVICE: LT DATE: NOVEiER 28, 1958
TO: KSTNERFERSTELCASSE 1VIENNA 9
COUNTRY ( AUSTRIA )
TEXT:
Cable No.THA0K YOU YOUR CABLE NVEMBER 27 WITH WHICH IN COPLETE AGREEM NT
FONTEIN
Signed: (Type in last name of sender)
AUTHORIZED BY:
NAME: D. J. ontin For Use by Archives DivisionDEPT: Legal
DGNE T: TRec patchSIGNATURE:
(Silgntu e of irdevidual athorized to approve cable).
Q"'GINAL (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. The costis half the cost of full rate messages with a minumum charge for 22 words includingaddress and text.
Full Rate Full rate messages are normally transmitted and delivered immediately. There is aminimum charge for 5 words, including address and text.
IBF Govt. This is a preferential rate extended to the Bank by some of its member countries.Messages are sent at full rate speed and at about half the cost. This rate normallyshould be used whenever available. It is at present available for the followingcountries:
Bolivia Cuba Guatemala * PeruBrazil Dominican Republic Honduras * SyriaBurma Ecuador Jordan UruguayChile El Salvador * Lebanon Venezuela
* China * Ethiopia Nicaragua YugoslaviaColombia * France PakistanCosta Rica Greece Panama
* In these countries the letter telegram rate is lower than IBF government rate andshould be used for messages when immediate transmission is not required.
Code Code messages are transmitted at full rate (or IBF Govt.) speed and cost.- This rateshould be used only for confidential messages to staff members having a code withthem.
Day Letter Day letters are delivered during the day of transmission and should be used only formessages in the United States and to Mexico and Canada. There is a minimumcharge 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. AddressC% Use- only last name of addressee and cable address whenever possible. The Bank cable address 'INTBAFRAD" is
restered in Paris, Bogota, Bangkok, Karachi, Lima, Quito and Tegucigalpa. The International Finance Cotporationcable address "CDRINTFIN" is registered in New York, Paris and Washington. The name of the country of destina-
must ali'$ys be added. (No charge is made for the name of a country).3. Text
9!,ssages to Bank Missions and to Resident Representatives should be numbered. These numbers maybe obtainedby calling Ext. 3008.Type text in capital letters and double space between lines. The text should be edited to elirrinateunnecessary 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 word hyphenatedwords, hyphenated names, and certain two-word groups, e.g. Airmail, Newyork, enduse.
4. Signature
Type in last name of sender. Use INTBAFRAD as part of the signature only when addressee does notknow the address of the sender.
5. Authorization
Type in name and 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 9:00a.m. to 5:45 p.m. on working days. Special arrangements should be made for the despatch ofof cables outside of these hours.
ANY QUESTIONS REGARDING INCOMING AND OUTGOING WIRES SHOULD BE REFERRED TO THECABLE POST, EXT. 3008.
SIN
FORM No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(5-58) ------.---
INTERNATIONAL FINANCE CORPORATION
OUTGOING WIRECLASS OF SERVICE: NL DATE: NOVEMBER 28, 1958
TO: TEUFENSTEIN STAHLMINISTRY OF FINANCE VERBUNDNETZVIENNA VIENNA
COUNTRY ( AUSTRIA )
TEXT:
Cable No.
PROPOSAL FOR STANDBY HAS NOW BEEN DROPPED
COPE
AUTHORIZED BY:
NAME: S. R. Cope For Use by Archives Division
DEPT: Operations -FA Checked for DispatchSIGNATURE:
(Signature of individual authorized to approve cable).-
JHCollier:meaORIGINAL (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 cespatch. The cable service is openfrom 9:00 a.m. to 5:45 p.m. on working days. Special arrangements sh,-d 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.
Fall No. 26(5.58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
INCOMING WIRE
DATE OF WIRE: NOVEMIBER 27, 1958 17:40 ROUTING
TO: INTERNATIONAL BANK FOR ACTION COPY TO MR, COPEREGONSTRUCTION & DEVELOPMENT
FROM: VIENNA INFORMATION COPY TO
Decoded By
TEXT:
ATTENTION COPE YOUR CABLE NOVEMBER 26 REPUBLIC OF AUSTRIA
CONTEFPL&TES TO RELEASE 50 W OF PROCEED OF LOAN TO
VERBUNDGESELISCHAFT THE FINANCE MINISTRY IS THEREFORE IN A
POSITION TO SIGN ON BEHALF OF REPUBLIC OF AUSTRIA THE
PROPOSED LETTER ADDRESSED TO BANK.
TEUFENSTEIN
ORIGINAL
FORM No. 26(5-58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
INCOMING WIRE
DATE OF WIRE: NOVEPBER 27, 1958, 16:30 ROUTING
TO: MR. COPE, INTERNATIONAL BANK FOR ACTION COPY TO MR. COPERECONSTRUCTION & DEVELOPMENT
FROM: VIENNA INFORMATION COPY TO
Decoded By
TEXT:
IM EINVERNENF) MIT FINANZMINISTERIUM UND DONAUKRAFTWERKE SIND WIR
MIT DER ABSENDUNG DES VORGESCELAGENEN BRIFES BETREFFEND STAND BY
AGREEI'NT EINVERSTANDEN,
VERBUNDNETZ
ORIGINA L
(not for public use)
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
DECLASSIF WDCOYNFIDE!NTIAL
FOR 0UFI~UTIL t'AY 1 8 2018FOR R 58-120/1 \BGARC1iveE XECU TIV E
(For consideration by theD IRE CTORS' xecutive Directors on
MEETING December 1, 1958)
FR&,: The Secretary November 26, 1958
PROPOSED LOAI - AUSTRIA
It is requested that the attached page be substituted
for page 18 of the draft Loan Agreement which was circulated
on Uovember 24 as attachrient 1 to the President's Report and
Recormendations (R 58-120) on the Aschach Project.
Attachment
Distribution:
Executive Directors and AlternatesPresidentVice PresidentsDepartment Heads
Sec. 58-h39
- 18 - 11/25/58
SCHEDULE 2
Description of the Project
The Project consists of a hydro-electric power plant and related
works to be located on the Danube at Aschach, about 30 kilometers up-
stream from the city of Linz. The dam structure to be built across the
river will have a total length of 496 meters and will consist of a
weir section equipped with five double leaf type gates, a powerhouse,
a double navigation lock and an adninistration and maintenance building.
The powerhouse will be equipped with four or five Kaplan type turbines,
depending on the results of certain current cost and engineering studies.
The turbines will operate under an average head of 15.5 meters and each
drive a generator unit with a capacity of 66,000 kw if four turbines
are installed, or 53,000 kw if five turbines are installed. The plant
will in an average year produce 1,609 million kwh. Three-phase trans-
formers with a total capacity of 328,000 kva will be installed, stepping
up the generating voltage to 220 kv. An outdoor conventionally equipped
switchyard will be provided. The plant will be connected to the exist-
ing network operated by the Verbundgesellschaft by a 34 kilometer
220 kv double circuit transmission line.
Two of the generating units are scheduled to come into operation
by the middle of 1963 and the remaining units by the end of 1963.
FORM No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(5.58)
INTERNATIONAL FINANCE CORPORATION
OUTGOING WIRECLASS OF SERVICE: NT DATE: NOVEMBER 26, 1958
TO: TEUFENSTEIN STAHL IOSBAUERMINISTRY OF FINANCE VERBUNETZ WNAUKRAF?(VIENNA AUSTRIA VIENNA, AUSTRIA VIENNA, AUSTRIA,
COUNTRY ( AUSTRIA)
TEXT:
Cable No.
IN VIEW OF MARKET CONDITIONS UNDERWRITERS NOW 001IDERING DESIRABILITY OF
STANDBY AGREEMENT WITH BANK FOR UP TO $5 MILLION PRINCIPAL AMOUNT OF BONDS
OF PUBLIC ISSUE STOP AUSTRIA WOULD NOT BE A PARTY TO THIS AGREEMENT AS
PRESENTLY CONTEMPIATED BUT WE WOUD REQUIRE UNDERTAKING BY AUSTRIA1M TO
APPLY PROCEEDS OF STANDBY TO ASCHACH IROJECT STOP ACCORDINGLY IF SUCH
AGREEMENT ENTERED INTO WE PROPOSE THAT LETTER ADDRESSED TO BANK BE SIGNED
ON BEHALF OF REPUBLIC OF ,J1STRIA VERBUNDGESELISCHAFT AND DONAUKRAFTWERKE
READING SUBSTANTIALLY AS FOLLOWS QUOTE IN COMSIDERATION OF YOUR ENTERIN
INTO THE STANDBY AGREEMENT OF EVEN DATE BETWEEN YOU A ND KUHN, LOEB & COMPANY
AND LADENBURG THALMANN & COMPANY COMMA ACTING ON BEHALF OF THENMELVES AND
THE OTHER SEVERAL UNDERWRITERS FOR THE ISSUE OF BLANK PERCENT EXTERNAL SINKI3
FUND DOLLAR BONDS 1958 OF THE REPUBLIC OF AUSTRIA COMA WE HEREBY UNDERTAKE
THAT AN ANOUNT EQUIV=ENT TO THE NET PROCEEDS OF BONDS PURCHASED BY YOU
PURSUANT TO SUCH STANDBY AGREEMENT SHALL BE MADE AVAILABLE FROM THE PROCEEDS
OF THE BOND ISSJE AND BE APPLIED TO EXPENDITURES FOR THE ASCHACH HIDROEECTRIC
AUTHORIZED BY:NAME: S. R. Cope For Use by Archives Division
DEPT: Operations - Europe, Africa and A tr asia Checked for DispatchSIGNAT: _____
(Signat e of individual authorized Eo approve cable).cc: Mr. Fontein
ORIGINAL (File Copy)
(IMPORTANT: See over for guide in preparing Outgoing Wire)
GUIDE FOR PREPARING OUTGOING WIRES
1. Class of ServiceType 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 menber 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.
FORM No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
OUTGOING WIRE
CLASS OF SERVICE: DATE:
TO:
-2--
COUNTRY (
TEXT:
Cable No.
POWER PROJECT UNQUOTE THIS AMOUNfT COULD BE REGARD)E AS PART OF
THE FIFTY PER CENT OF WHOLE PUBLIC ISSUE ALREADY ALLOCATED TO ASCEACH
STOP PLEASE CABLE SOONET WHETHER YOU APPROVE
COE
(Cleared with Mr. Fontein)
AUTHORIZED BY:
NAME: For Use by Archives Division
DEPT: 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.
05. Authorization
Type in name of department of staff member authorizing message and have authorizing staff membersign the original (pink copy). A list o{ufhiq r9redslgilures 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 diys . 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.
FoRm No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(9- 56)
OUTGOING WIRE
CLASS OF SERVICE: IT DATE: NOVEMBER 26, 1958
TO: KASTNERFERSTELGASSE 1VIENNA 9
COUNTRY ( AUSTRIA
TEXT:
Cable No.
YOUR TELETYPE NOV&EA3M TWENTYSIX ALPHA CHANGES PROPOSED BY YOU IN
OPINIONS SATISFACTORY BETA WE ASSUME THAT IN CASE OF A1SNDNENT OF
PFEISREGELUNGSGESETZ OBLIGATIONS CONTAINED IN SECTION 3.06 GUARANTEE
AGREEMENT AID SECTION 5.08 IOAN AGEENT WOULD CONTINUE TO BE
VALID AND BINDING OBLIGATIONS ALTHOUGH THEIR FULFILIMENT MIGHT
THEN E DIFFICULT OR II4OSSIBLE STOP GRATEFUL IF YOU COULD CONFIRM
THIS ASSUMPTION CORRECT AND COULD INCLUDE STATEMENT TO THAT EFFECT
IN OPINIONS
FONTEIN
Signed:(Type in last name of sender)
AUTHORIZED BY:NAME: D.J. Fon in -For Use by Archives Division
DEPT: Legal Checked for DispatchSIGNATURE: __/_//______//_/__
S ig nuir o "vi } authori zAd 1 rove cabI e).
DJFontein:ea 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. The costis half the cost of full rate messages with a minumum charge for 22wordsincludingaddress and text.
Full Rate Full rate messages are normally transmitted and delivered immediately. There is aminimum charge for 5 words, including address and text.
IBF Govt. This is a preferential rate extended to the Bank by some of its member countries.Messages are sent at full rate speed and at about half the cost. This rate normallyshould be used whenever available. It is at present available for the followingcountries:
Bolivia Cuba Guatemala * PeruBrazil Dominican Republic Honduras * SyriaBurma Ecuador Jordan UruguayChile El Salvador * Lebanon Venezuela
* China * Ethiopia Nicaragua YugoslaviaColombia * France PakistanCosta Rica Greece Panama
* In these countries the letter telegram rate is lower than IBF government rate andshould be used for messages when immediate transmission is not required.
Code Code messages are transmitted at full rate (or IBF Govt.) speed and cost. This rateshould be used only for confidential messages to staff members having a code withthem.
Day Letter Day letters are delivered during the day of transmission and should be used only formessages in the United States and to Mexico and Canada. There is a minimumcharge 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 addres's whenever possiblW. The Bank cable address 'INTBAFRAD" isregistered in Paris, Bogota, Bangkok, Karachi, Lima, Quito and Tegucigalpa. The International Finance Corporationcable address "CORINTFIN" is registered in New York, Paris and Washington. The name of the country of destina-tion must always be added. (No charge is made for the name of a country).
3. Text
Messages to Bank Missions and to Resident Representatives should be numbered. These numbers maybe obtained by calling Ext. 3008.
Type text in capital letters and double space between lines. The text should be edited to elirrinateunnecessary 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 word hyphenatedwords, hyphenated names, and certain two-word groups, e.g. Airmail, Newyork, enduse.
4. Signature
Type in last name of sender. Use INTBAFRAD as part of the signature only when addressee does notknow the address of the sender.
5. Authorization
Type in name and 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 Boom 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 ofof cables outside of these hours.
ANY QUESTIONS REGARDING INCOMING AND OUTGOING WIRES SHOULD BE REFERRED TO THECABLE POST, EXT. 3008.
0 ~ 17
Foiw No. 26(5-58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION ------
INCOMING WIRE
DATE OF WIRE: NO M 26, 1958 ROUTING
TO: I - ACTION COPY TO M.
INFORMATION COPY TOFROM:Decoded By
TEXT:
MR. DOUGIA8 J rUlNTE
zuiIm BRUF Vw 21.3-1 UD M i Em MM vON 25.11.1958 Di
wM.. DI..z.v--m.M.. LM AUD -*B ... WI
zux GARANTEVNERMW0 PUM 5 iAv12 EM ABSATZ: ESaAN
ammm imm Wi woMMUEELNGe ADP GMW MI " E Auemmm-
CS 1957 M 510, -4XN DIE -i0LnkRMZ P30111111 WON
( mLUME341NITi ERIK M IgNMEMg) MMi VERBUIVURIF AiF ANM I=
YGUJWXA I 0Z 3I A X T S W 3 G E INm VdIMHAWL
GangMEFER 19311N000EE. D33 IX GAIEUMBEMGM 7-11 1 . I
ucmHA7e U 0 1EM DI VCX lZ - - -USONo US E
anZBnicenm VH100LICMWn IST DMME AUD GNIRS Pg 5FM*HLManMCnlT
1957 EYMAR-
3. A.AMM A W "T DI
LM IT: ........ MAM ABa= 3.0. Ms GARAmnsmrmmxw A= DM
AKH I M M AKAUNC X= SCM %s
DMR 33MAMa MR AMMER=EMM ALLWEjLIIIII Tl 11 fBGER X=C vm_
HEROMMAR . mnRef a=xl ~DUPLICATE
F
OSTERREICHISCHE DONAUKRAFTWERKE WIEN, 2AKTIENGESE LLSCHAFT 1,HOHENSTAUFENGASSE 6
TEL.: 63 47 11
VORSTAND.
Mr. C o 1 1 i e r
c/o international Bankfor Reconstruction andDevelopment
1818, H Street, il.W.
W a s h i n g t o n 25, D.C. tFTPiST
Dear Mr Collier, :
as I learnt from your cable to Dr. Stahl the bank lending rate
remains five and three quarters percent. In the meantime I
received a letter of Mr. Fontein with the new amortization
table on this basis.
I thank you very much for your efforts and r ain with kindly regards
Yours s ncerely
Mosbauer
FOR9 6) 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
OUTGOING WIRE
CLASS OF SERVICE: LT DATE: NOVEMBER 25, 1958
TO: VERBUNDNETZVIENNA
COUNTRY ( AUSTRIA
TEXT:
Cable No.
FOR STAHL RE YOUR TELETYPE NOVEIMBE TWENTYFIVE STOP FIRSTLY IN AIhA HAVE
CHANGED 72,000 KW TO 66,000 KW AND 57,600 KW TO 53,000 IW STOP SECONDLY
IN BETA HAVE CHANGED 360,000 KVA TO 328,000 KVA AND HAVE CHANGED PHRASE
QUOTE STEPPING UP THE VOLTAGE FROM 13 OR 15 IV TO 220 KV UNQUOTE TO READ
QUOTE STEPPING UP THE GENERATING VOLTAGE TO 220 EV UNQUOTE THIRDLY HAVE
DELETED SENTENCE STARTING QUOTE THE MAXIMUM TOTAL CAPABILITY UNQUOTE
BECAUSE NOT ABSOLUTELY NECESSARY AND POSSIBLY INCONSISTENT WITH PRECEDING
SENTENCE STOP AIRNAILING NEW DESCRIPTION
FONTEIN
Signed:(Type In last name of sender)
AUTHORIZED B
NAME: D.J. te n 'For Use by Archives DivisionDEPT: Checked for DispatchSIGNATURE: - _
Signatur of in ivid. thor zed to app ov cable).
DJIonteintea 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. The costis half the cost of full rate messages with a minumum charge for 22wordsincludingaddress and text.
Full Rate Full rate messages are normally transmitted and delivered immediately. There is aminimum charge for 5 words, including address and text.
IBF Govt. This is a preferential rate extended to the Bank by some of its member countries.Messages are sent at full rate speed and at about half the cost. This rate normallyshould be used whenever available. It is at present available for the followingcountries:
Bolivia Cuba Guatemala * PeruBrazil Dominican Republic Honduras * SyriaBurma Ecuador J ordan UruguayChile El Salvador *Lebanon Venezuela
* China * Ethiopia Nicaragua YugoslaviaColombia * France PakistanCosta Rica Greece Panama
In these countries the letter telegram rate is lower than IBF government rate andshould be used for messages when immediate transmission is not required.
Code Code messages are transmitted at full rate (or IBF Govt.) speed and cost. This rateshould be used only for confidential messages to staff members having a code withthem.
Day Letter Day letters are delivered during the day of transmission and should be used only formessages in the United Statds and to Mexico antI Canada. There is a minimuncharge for 50 words in text.
Teletype To be used only for messages to the New York Qfficie, 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" isregistered in Paris, Bogota, Bangkok, Karachi, Lima, Quito and Tegucigalpa. The International Finance Corporationcable address "CORINTPIN" is registered in New York, Paris and Washington. The name of the country of destina-tion must always be added. (No charge is made for the name of a country).
3. Text
Messages to Bank Missions and to Resident Representatives should be numbered. These numbers maybe obtained by calling Ext. 3008.Type text in capital letters and double space between lines. The text should be edited to eli-minateunnecessary 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 word hyphenatedwords, hyphenated names, and certain two-word groups, e.g. Airmail, Newyork, enduse.
4. Signature
Type in last name of sender. Use INTBAFRAD as part of the signature only when addressee does notknow the address of the sender.
5. Authorization
Type in name and 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 9:00a.m. to 5:45 p.m. on working days. Special arrangements should be made for the despatch ofof cables outside of these hours.ANY QUESTIONS REGARDING INCOMING AND OUTGOING WIRES SHOULD BE REFERRED TO THECABLE POST, EXT. 3008.
FORM No. 26(5.58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
INCOMING WIRE
DATE OF WIRE: NOVBER 25, 158 ROUTING
TO: MN IMI ACTION COPY TO MR.Fwmm
FROM: INFORMATION COPY TO
Decoded By
TEXT:
RE YOUIR 'PITY'F 187/183 A- 702P
YMMWEE OF YOUR PROPUaAL ARE NOT cam=,I, PIXASE CHAME A MU1MS:
ALMA TBE Equm Wm Fm MR Wm x N.
AND EM MMK18 H UISW PA f AN in~lla
AVEAG HAD OF15,5 X= AND EAC NSU A OR W UNITWI A
CAPAniT or 66.. 0 Xs IF M TU S ArM OR 53.000 -W IF
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TWO G OFB TH mE nm GEE INGg UWET A mo SCMDLE TO 1 camE, fOOE0 BY TIM
* .19623 AND THE M 3 B E D 1963
DUPLICATE
FORm No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(9.-56)
OUTGOING WIRE
CLASS OF SERVICE: FULL RATE DATE: NOVEMBER 25, 1958
TO: EASTNERFERSTELGASSE 1VIENNA 9
COUNTRY ( AUSTRIA
TEXT:
Cable No.
YOUR LETTER NOVEMBER EIGHTEEN ENCLOSING DRAFT OPINION GUARANTEE
AGREE ENT STOP ONLY COMMENT OF SUEBTANCE CONCERI PART FIVE YOUR
OPINION DEALING WITH RATE COVENANT FOR WHICH REFER NY LETTER TO YOU
OF NOVENBER TWENTYONE STOP LETTER FOLLOWS
FONTEIN
Signed: (Type in last name of sender)
AUTHORIZED BY:
NAME: For Use by Archives DivisionDJFonte' iiea
DEPT: Le gal Checked for DispatchSIGNATURE: ____4_ _
(Sign'ature of di l aIau horized tQ-approve cable)7.
ORIGINAL (File Copy)
(IMPORTANT: See over for guide in nreparing Outanina Wire)
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KUHN, LOEB & CO. November 25, 1958
S. R. Cope, Esq.Director of Operations - Europe, Africa
and Australasia
International Bank for Reconstructionand Development
1818 H Street, N. W.Washington, D. C.
Dear Mr. Cope:
Austrian Signing
Confirming our conversation of this morning, this is to advise
you that unless there should be some unforeseen change, the signing of the
Purchase Agreement between the Austrian Government and the Underwriters and
the Loan Agreements with the World Bank will be held at our office, Board
Room, 9th Floor, at about 9:15 A.M. on Tuesday, December 2nd.
I trust that this arrangement is satisfactory and will give
Mr. Black ample time for the Union of South Africa signing at Dillon,
Read & Co., Inc.
Very truly yours,
Arthur Oppenheimer
ii 5
The World Sank Group
Record Removal Notice ArchivesRecod R mova Noice& Records Management
File Title Barcode No.
Electric Power Project - Aschach Power - Austria - Loan 0213 - P037355 - Negotiations - Volume 1 1516825Document Date Document Type
November 25, 1958 Letter
Correspondents / Participants
To: Dr. W. KastnerFrom: Douglas J. Fontein
Subject / Title
Draft of the legal opinion of the Guarantee Agreement
Exception(s)Attorney-Client Privilege
Additional Comments
The item(s) identified above has/have beenremoved in accordance with The World BankPolicy on Access to Information or otherdisclosure policies of the World Bank Group.
Withdrawn by DateVlada Alekankina November 13, 2018
Archives 01 (March 2017)
STATUTORY LOAN COIXJITTEE REPORT
To: The President, International Bank for Reconstruction and Development
Report of Loan Committee under Section 4(iii) of Article III of theArticles of Agreement on the Proposed Loan (Aschach Project) toUsterreichische Elektrizititswirtschafts-Aktiengesellschaft (Verbund-gesellschaft) and Osterreichische Donaukraftwerke Aktiengesellschaft,to be guaranteed by the Republic of Austria
The undersigned Committee constituted under Section 7 of Article V
of the Articles of Agreement of International Bank for Reconstruction and
Development (the Bank) hereby submits its report pursuant to Section 4(iii)
of Article III of said Articles in respect of the proposal that the Bank
grant to Osterreichische Elektrizit~tswirtschafts-Aktiengesellschaft
(Verbundgesellschaft) and csterreichische Donaukraftwerke Aktiengesellschaft
a loan in an auount in various currencies equivalent to U.S. -25,000,000,
which loan is to be guaranteed by the Republic of Austria. The purpose of
this loan is to assist in financing the purchase of goods and services for
the construction of the Aschach hydroelectric plant.
1. The Committee has carefully studied the merits of the proposal
to grant such a loan, and of the purposes to which the proceeds of the loan
are to be applied.
2. The Committee is of the opinion that the project toward the
financing of which the proceeds of such loan are to be applied comes within
the purposes of the Bank as set forth in Article I of said Articles of
Agreement, and that said project is designed to promote the development of
the productive facilities and resources of the Republic of Austria and is
in the interests of the Republic of Austria and of the members of the Bank
as a whole.
-2-
3. Accordingly, the Committee finds that said project merits
financial assistance from the Bank, and hereby recommends said project
for such assistance.
COMNITTEE
/s/ W.A.B. Iliff
/s/ Dr. Wilfried Platzer
Is/ S.R. Cope
/s/ Simon Aldewereld
/s/ A. Broches
/s/ Peter G. Ramm
Dated at Washington, D.C.
November 24, 1958
Tho World Bank Group
ArchivesRecord Removal Notice Mage
File Title Barcode No.
Electric Power Project - Aschach Power - Austria - Loan 0213 - P037355 - Negotiations - Volume 1 1516825Document Date Document Type
November 24, 1958 Board Record
Correspondents / Participants
Subject I Title
Draft Resolution
Exception(s)
Additional CommentsDeclassification review of this record may be initiated upon request.
The item(s) identified above has/have beenremoved in accordance with The World BankPolicy on Access to Information or otherdisclosure policies of the World Bank Group.
Withdrawn by Date
Vlada Alekankina November 13, 2018
Archives 01 (March 2017)
OSTERREICNiSCHE wiaNi. 24.November 1958LEKTRZITATSW1RT*CHAFTS-A. 6. AM HOP v
(VERSUNDGESELLSCHAPT) TEL. U 29 6 60
Dr. Bg/Ko
Herrn
Dr.Douglas J.FontainInternational Bank forReconstruction and Development
1818 H Street, N.W.
Washington 25, D.C.
Betrifft: Loan Agreement, Aschach Project.
Sehr geehrter Herr Fontein!
Zuerst bestatigen wir Ihnen unser an Sie abgegangenes
Fernschreiben mit folgendem Wortlaut:
"Zu dem mit Ihrem Schreiben vom 21.November 1958 heute
eingelangten Entwurf des Schreibens bezUglich Effektivwerdens des
"Loan and Guarantee Agreements", bestatigen wir Ihnen im Ein-
vernehmen mit dem Bundesministerium fUr Finanzen und der Oster-r A.G. unser Einverstdndnis mit dem vollen
Textwortlaut. "
Die Spezialvollmachten der Osterreichischen Donaukraft-werke A.G. und der Verbundgesellschaft, versehen mit den erforder-lichen Beglaubigungen und mit den zugehorigen Amtsbestdtigungen desHandelsregisters Wien, sind heute per Luftpost an die OsterreichischeBotschaft in Washington abgegangen. Einen Durchachlag diesesSchreibens samt Fotokopie der Anlagen schlieen wir bei.
Im Sinne von Pkt.B,I,Zif.4 Ihres Memorandums "of Thingsdo be Done" vom 12.November 1958, ubermitteln wir ferner eineFotokopie der Erkldrung des Projektes Aschach zum bevorzugten
Wasserbau.
Wir werden bemUht sein, Ihnen auch die restlichen Unter-
lagen rechtzeitig ubermitteln zu kdnnen und empfehlen uns Ihnen
hochachtungsvoll
8Oes iclyischeil I 10 'mEb izitats rtschafts-
6en Biat V
6 Beilagen
FORM No. 26(5-58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
INCOMING WIRE
DATE OF WIRE: NUMOM 2 1958 ROUT ING
TO: DTFM AT. BANK FM 1=99TRIXTIi ACTION COPY TO MR. TNINAND DEVELOPMET
FROM: INFORMATION COPY TO
WIEN Decoded By
TEXT:
I=E MR.PUNTEIN
lis C(;m mU fllltAWA Ni. 138 VOK 2(-i0A&R1R110
aM UUD MIT VMRD
DER RANKR GGEND IV01,WENM =8R00U ANIMVTAG E331YUSTANDIN.SOBLD VIS' ETWU UES U=R AG~ EDE I
inEm m.zzn cozx -w (m vm Om UNY WT S
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FoRm No. 26(5-58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
INCOMING WIREF
DATE OF WIRE: ROUTINGNOVEBER24 1958
TO: _n__T___ANK _M RECM M ACTION COPY TO R
FROM: INFORMATION COPY TO
F iMDecoded By
TEXT:
LOAN AND QIAAN AMMM. - K DI _VERN R mg 1 = = Rmar MMUM PMgggg TIXANZ t MR
HMR DUPLICA~ntT E
*MCHISCHO AUUMM4M A.G. us znw p A3amXIT~ im vaLf TETaTAT
FS NR 2505
FORM No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(9-56)
OUTGOING WIRE
CLASS OF SERVICE: LT DATE: NOVEMBER 24, 1958
TO: VERBUNDRETZVIENNA
COUNTRY ( AUSTRIA
TEXT:
Cable No.
FOR STAHL |LETTER NOVEFEER SEVENTEEN AND TELETYPE NOVEMBER TWENTYFOUR IN AGREEMENT
WITH OPPENHEIER PROPOSE FOLLOWING CHANGES IN PROJECT DESCRIPTION LOAN AGREEMENT
ALPHA INSTEAD OF PRESENT THIRD SENTENCE INSERT QUOTE THE POWERHOUSE WILL BE EQUIPPED
WITH FOUR OR FIVE KAPLAN TYPE TURBINES CO1MIA DEFENDING ON THE RESULTS OF CERTAIN
CURRENT COST AND ENGINEERING STUDIES STOP THE TURBINES WILL OPERATE ON AN AVERAGE
HEAD OF 15.5 METERS AND EACH DRIVE A GENERATOR UNIT WITH A CAPACITY OF 72,000 EW
IF FOUR TURBINES ARE INSTALLED COMMA OR 57,600 IW IF FIVE TURBIkE ARE INSTALLED
UNQUOTE BETA INSTEAD OF PRESENT FIFTH SENTENCE INSERT QUOTE THREE-PHASE TRANS-
FOEMERS WITH A TOTAL CAPACITY OF 360,000 KVA WILL BE INSTALLED COMMA STEPPING UP THE
VOLTAGE FROM 15 NV TO 220 KV UNQUOTE GAMMA INSTEAD OF PRESENT LAST SENTENCE INSERT
QUOTE TWO OF THE GENERATING UNITS ARE SCEEDUIMD TO COME INTO OPERATION BY THE MIDDIE
OF 1963 AND THE REMAINING UNITS BY THE END OF 1963 UNQUOTE SINCE NO FURTHER CHANGESNOVEMBER TWENTYFIVE
POSSIBLE AFTER TUESDAY/PLEASE CABLE SOONEST WHETHER THESE PROPOSALS CORRECT AND
WHETHER YOU AGREE
Signed: FONTEIN(Type in last name of sender)
AUTHORIZED BY:NAME: D.J. tun t . For Use by Archives Division
DEPT: Legal Checked for DispatchSIGNATURE: __________--_-____
(S i in -t e i ndiv I a thori to. approi6e cabl e).
DJFontein:ea --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. The costis half the cost of full rate messages with a minumum charge for 22 words includingaddress and text.
Full Rate Full rate messages are normally transmitted and delivered immediately. There is aminimum charge for 5 words, including address and text.
IBF Govt. This is a preferential rate extended to the Bank by some of its member countries.Messages are sent at full rate speed and at about half the cost. This rate normallyshould be used whenever available. It is at present available for the followingcountries:
Bolivia Cuba Guatemala * PeruBrazil Dominican Republic Honduras * SyriaBurma Ecuador Jordan UruguayChile El Salvador * Lebanon Venezuela
* China * Ethiopia Nicaragua YugoslaviaColombia * France PakistanCosta Rica Greece Panama
* In these countries the letter telegram rate is lower than IBF government rate andshould be used for messages when immediate transmission is not required.
Code Code messages are transmitted at full rate (or IBF Govt.) speed and cost. This rateshould be used only for confidential messages to staff members havi4g a code withthem.
Day Letter Day letters are delivered during the day of transmission and should be used only formessages in the United States and to Mexico and Canada. There is a minimumcharge for 50 words in text.
Telery 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" isregistered in Paris, Bogota, Bangkok, Karachi, Lima, Quito and Tegucigalpa. The Intemational Finance Corporationcable address "CORINTFIN" is registered in New York, Paris and Washington. The name of the country of destina-tion must always be added. (No charge is made for the name of a country).
3. Text
Messages to Bank Missions and to Resident Representatives should be numbered. These numbers maybe obtained by calling Ext. 3008.
Type text in capital letters and double space 4between lines. The text should be edited to elirrinateunnecessary 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 word hyphenatedwords, hyphenated names, and certain two-word groups, e.g. Airmail, Newyork, enduse.
4. Signature
Type in last name of sender. Use INTBAFRAD as part of the signature only when addressee does notknow the address of the sender.
5. Authorization
Type in name and 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 ofof cables outside of these hours.
ANY QUESTIONS REGARDING INCOMING AND OUTGOING WIRES SHOULD BE REFERRED TO THECABLE POST, EXT. 3008.
(not for public use)
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
DECLASSIFD
FORMAY 82018EXECUTIVE WBG ARCIH/0\FIDENTIAL
DIRECTORS' R 58-120
MEETING (For consideration by theExecutive Directors onDecember 1, 1958)
FROM: The Secretary November 24., 1958
PROPOSED LOA - AUSTRIA
The attached President's Report and Recommendations on a proposed loanto the Osterreichische Elektrizitaitswirtschafts A.G. and the OsterreichischeDonaukraftwerke L.G. (Aschach Project) will be considered by the ExecutiveDirectors at a Special Meeting on Monday, December 1, 1958, the time of whichwill be announced.
The followring form part of the President's Report and Recommendations:
1. Draft Loan Agreement;2. Draft Guarantee Agreement;3. Statutory Loan Committee Report;4. Hemorandum on "Present Economic and
Financial Position of Austria";5. Draft Resolution authorizing the Loan.
A report, "Appraisal of the Aschach Hydro Power Project - Austria"(R 58-116) was circulated on November 7, 1958.
Attachments
Distribution:
Executive Directors and AlternatesPresidentVice PresidentsDepartment Heads
Sec. 58-h32
Briefing-169
Bov r 28, 19
'-) 1
Stpun-b- for Austria n blic isvue
There pave been some develop ena with regard to te Auetrian
joint operation wh'ich I sho .ld like to put before you. Myreport
and reco endationa concernig this operation has already been
circulated to you and there I propose a loan of "25 milLion to be
made to the Austrian Verbundges liachaft and the donaukraftwerke
for the Asehach project, the loan to be iade simultaneously wit a
public issue by the Goverrment . The underwriters have filed a
registration statement with the Securities and exchange CGa-c iasion
for an issue of $25 million, of which approximately half would be
used for the 6overrrent's public investment program and the remainder
would be relent to the Verbundgeellschaft for the Aschach project.
arly in our discussions with kuhn, Loeb and Company about this
,oint operation, some consideration was given to the possibility
of an arrangement by which the ank wolu-d agree to stand by to take
a certain proportion of the bonds if they could not be sold to
other investors. however, at that time, the underwriters believed
that such an arrangement would not be necessary so that when I -ade my
preliminary report to you on lovmib'r 13, I did not mention it. Out
in the meantime there have been certain developnents in the inter-
national field which have led the underwriters to believe that there
may be some qusetion as to whether the whole $25 million can be
disposed of. Consequently I was app roached early this week both by
2-
the underwriters and the Austri n inace minister, Dr. ata, who
asked whvethr the ank would be ready to enter a stand-by agreemt
or to increase its loan in the event the is e rould be only
$2O million. I Sa i trat I Vo A be 7repared to propose a stan--by
agreement to the xeeutive Directors, and in the meantime, the
underwriters are considering wther they want to ask the 'ank for
such an agreement I? they do, the stand-by would probably operate
along the following lines.
T ablic issue would Y e for W million which is the same
amount as stated in v e r eistration stat ent , The ,ank woud then
undertake to purchase on the request of the udxerviters up to an
agreed principal amount of the bonds, for which we would pay a price
equal to j/h of a point above the price received by the borrowers
and he underwriters would retain this quarter of a point. The Iank
would receive a stand-by comission equal to 1$ of the principal
amount of any bonds not taken up undeWr e agreement. For example,
if we made an arranjenent to stand by for million and had to take
up 3 million principal ooant of bonds, our stand-by fee would be
1 of $2 million-the difference between $3 million and the maximum
amount oa r agreement to stand ib of n5, OO,0, We would not
enter into an arrangement of this sort for Nare than 15 million
(29 of the whole issue) and, in fact, the amount might be somewhat
less.
we were to agree to a stand-by, we would also obtain a state-
ment from the Austrian Government, and the two power companies who
are the co-borrowers of the loan, 1xat the proceeds of any bonds
.3.
purchae by thiank wou4d be usd for th cAI ach project. Siree,
in any ,v nt, the tovernent inteds to rierlnd abo-t half -f the ole
is u "or the Aschach proj et, aroblem mill ariae in q" T rspc".
I nyou ave n'ic ctioni ile to the teri a
stand- areement alog these ns, a i uhn, Pb afd 7p
wish to o ahead with it, the nrece sary I al docn. ts will be
subit or consid eration at the eeting on next >onday, Decber 1,
at the saei time as the 'ank loan.
November 28, 1958
BRTrFpRF1R IMBlCK
"-PY F tR AU3TRTAm I VUIJT TS2UE
There have been some developments with regard to the Austrian
joint operatilon wh4ch should like to put before you. 'Y report
and reccw ie-dat4 ons conerning this op erti on have Oret'y been cir-
culate to you and there T propose a loan of -25 : on to be mde
to the Austrian Verbundgesellachaft and the Donaukraft erke for the
Aschach project, the loan to be made s4multaneously wIth a public
issue by the overnment. The underwriters have file f -cg4at,atlon
statement with the 2.E.C. for an issue fo i25 million, of which ap-
proximately half would be used for the Government' public investment
program and the rema4 niner would be relent to the Verbundgesel-sehaft
for the Aschach project.
arly in our ei cuss'ons w4th Kuhn, Loeb and Company about
this joint opersAtion, some considerat-on was given to tne possibility
of an arrangement by whl ch the Bank would agree to stand by to take
a certain Troportion of the bonds if they could not be sold to other
inve tor-. Howevar, at that time, the underwriters believed that
such an arrangement would not be necssary so that when T made my
prel~minary report to you on Novembter 13, T did not mention it. Put
n the meantime there have been certa4 n developments in the inter-
-2-
natvonal field which have 1ed the underwrAters to believe that there
may be some question as to whether the %ebol 25 t;1ion can be dis-
posed of. Consequently T was approached ary this waek both by
the underwriters and the Austrian Finance i nister Dr. Kamitz who
asked whether the Bank would be ready to enter a stand-by agreement
or to Increase its loan in the event the *s4 ue could be only '20 mil-
lion. T said that T would be prepared to propose a stand-by agreement
to the ;xecutive Directors, and in the meanti me, the underwritars are
considering whether they want to ask the Bank for such an agreement.
Tf they do, the stand-by would probably operate along the following
li nes.
The publtc issue would be for '5 million which is the same
amount as stated in the registration statement. The Bank would then
undertake to purchase on the request of the underwriters up to an
agreed principal amount of the bonds, for which we would pay a prece
equal to 1/4 of a point above the price received by the borrowers
and the underwriters would retain this quarter of a point. The Bank
would receive a stand-by commrission equal to 1% of the principal
amount of any bonds not taken up under the agreement. For example
if we made an arrang'ement to stand by for $5 millior and had to take
up $3 million principal amount of bonds, our stand-by fee would be
15 of $2 mill'on--the difference between 23 million and the maximam
a.ount of our greement to stand by -f r),OO,00M. We would not
enter into an arrangement of this cort for more t -a ' #5 milion
(20% of the whole issue) and, In fact, the amount mrght be soumwhat
less.
Tf we were to agree to a stand-by, werul also obtain a
statement from the Austrian Government, and the two power cc opanies
who are the co-borrowers of the Bank loan, that the proceeds of any
bonds purchased by the Dank would be used for the %schach project.
Since, in any event, the Government intends to relend about half of
the whole Issue for the Aschach project, no problem will arise in
this respect.
Tf you have no objections in principle to the Bank entering
a stand-by agreement along these lines, and if Kuhn, Loeb and Com-
pany wish to go ahead with it, the necessary legal documents will be
subtnitted ftor consideration at the meeting on next Monday, December
I, at the same time as the Bank loan.
FortI No. 26 K5- 58)INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
I xCOMIING WIREDATE OF WIRE: NOVEMBER 22, 1958 ROUTING
T: INTERNATIONAL BANK FOR RECONISTUCTJION ATO OYTTO: AND ACTION COPY TO MRFONMEIN
Fliom: INFORMATION COPY TO
Decoded By
TEXT:
RE YOUR IETTER NOVEMBER 19 AND CABLE 20 STOP SI4PLIFIED PROCEIXRE
BY DISPATCH OF CABLES ONLY PREJWWAE
WAGNER
ORIGINAL
November 21, 1958
Dr. hiudolf StahlGreneraldirektorOsterreichis ohe slktrizit~tswirtachaft.-Aktienerellschaft (Verbumdgeselleohft)dien Iam Jiof 6Austria
Dear :r. tahl:
I enclose herewith hp draft of a letter referred to
in my cable of Iovember 20 concernfng the manner in which the
Loan and Guarantea Agreements will be jmAde effective. This
letter would be executed on Deceimber A. at the signing of the
Loan and Guarantee Areeaents in New York.
I would appreciate you cabled confirmation that this
letter meets with your approval.
With kindeet regards,
Very truly yours,
Douglas J. Fontein
Dn toiure
DJ1ontein :ea
FoRM No. 26(5-58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
INCOMING WIRE
DATE OF WIRE: R ROUT ING
TO: I ' IM AL BW FOR 1ECOSMUjON ACTION COPY TO MR.JCTMM
FROM: INFORMATION COPY TO
Decoded By
TEXT:
ALPHA WE AM TO SDMVM PROCEMX MMA CalEMr PROJ=
=RPTION A LZMT OF IR 9TAHL IS AIR XAIL TO 00 17TH
DUPLICATE
40
The World Bank Group
Record Removal Notice ArchivesRecod R mova Noice& Records Management
File Title Barcode No.
Electric Power Project - Aschach Power - Austria - Loan 0213 - P037355 - Negotiations - Volume 1 1516825
Document Date Document Type
November 21, 1958 Letter
Correspondents / Participants
To: Dr. W. KastnerFrom: Douglas J. Fontein
Subject I Title
Draft of the legal opinion on the proposed Loan Agreement
Exception(s)Attorney-Client Privilege
Additional Comments
The item(s) identified above has/have beenremoved in accordance with The World BankPolicy on Access to Information or otherdisclosure policies of the World Bank Group.
Withdrawn by Date
Vlada Alekankina November 13, 2018
Archives 01 (March 2017)
FORm No. 26(5-58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
INCOMING WIRE
DATE OF WIRE: v El 1958 ROUTING
TO: - ACTION COPY TOnITE ETINAL BAIM 7Wn RECOUST1RUCTIC MR.Par
FROM: AINFORMATION COPY TO
Decoded By
TEXT:YOUR UAE 2 STL C O A T
DUPLICATE
November 21, 1958
Dr. Hans MosbauerGeneraldirektorUsterrei chis che Donaukraftwerke
AktiengesellschaftWien IHohenstaufengasse 6Austria
Dear Dr. Mosbauer:
I enclose herewith the draft of a letter referred to
in fly cable of November 20 concerning the manner in which the
Loan and Guarantee Agreeraents will be made effective. This
letter would be executed on December 2 at the signing of the
Loan and Guarantee Agreements in New York.
I would appreciate your cabled confirmation that this
letter meets with your approval.
With kindest regards,
Very truly yours,
Douglas J. Fontein
Enclosure
DJFontein: ea
November 21, 1958
Dr. Wilhelm Teufensteininistorialratinistry of Finance
Wien Ihimmlpfortgasse 8Austria
Dear Dr. Teufenstein:
I enclose herewith the draft of a letter referred to
in my cable of Uovember 20 concerning the manner in which the
Loan and Guarantee Agreements will be made effective. This
letter would be executed on December 2 at the rigning of the
Loan and Guarantee Agreements in New York.
I would appreciate your cabled confirmation that this
letter meets with your approval.
With kindest regards,
Very truly yours,
Douglas J. Fontein
Enclosure
DJFontein:ea
November 21, 1958
Dr. Ernst WagnerKUrntnerring 10Vienna I, Austria
Dear Ernst:
I enclose herewith the draft of a letter referred to
in my cable of Eovember 20 concerning the manner in which the
Loan and Guarantee Agreements will be made effective. This
letter would be executed on December 2 at the signing of the
Loan and Guarantee Agreements in New York.
I have sent copies of the draft letter to Messrs.
Teufenstein, Stahl and Mosbauer and asked them to cable
their agreement.
With kindest regards,
Sincerely yours,
Douglas J. Fontein
Enclosure
DJFontein:ea
November 21, 1958
William J. Schrenk, Esq.Cravath, Swaine & Iioore15 Broad StreetNew York 5, New York
Dear Bill:
Enclosed please find a draft of a letter concerning
the manner in which the Bank's Loan and Guarantee Agreements
would be made effective. I have asked the Austrians to cable
their reactions to the proposed letter as soon as possible.
If they agree to this letter we would no longer have to resort
to the complicated teletype procedure outlined in my Memorandum
of Things to be Done dated November 12. I shall let you know
as soon as we have heard from them.
Sincerely yours,
Douglas J. Fontein
Enclosure
DJFontein:ea
November 21, 1958
Dr. Edgar PlanEmbassy of Austria2343 Massachusetts Avenue, N.W.Washington, D .C.
Dear Dr. Plan:
Enclosed please find a draft of a letter concerning
the manner in which the proposed Loan and Guarantee Agree-
ments for the Aschach Project would be made effective. We
have sent this draft letter to Messrs. Teufenstein, Stahl
and Mosbauer and asked for their cabled reaction. If they
agree to this letter we would no longer have to resort to
the complicated teletype procedure outlined in my Memorandum
of Things to be Done dated November 12. I shall let you know
as soon as we have heard from them.
Sincerely yours,
Douglas J. Fontein
Enclosure
DJT'ontein:ea
November 21, 1958
Harold Manheim, Esq.Wachtell Manheim & Grouf15 Broad StreetNew York 5, New York
Dear Harold:
Enclosed please find a draft of a letter concerning
the manner in which the Bank's Loan and Guarantee Agreements
would be made effective. I have asked the Austrians to cable
their reactions to the proposed letter as soon as possible.
If they agree to this letter we would no longer have to resort
to the complicated teletype procedure outlined in my Memorandum
of Things to be Done dated November 12. I shall let you know
as soon as we have heard from them.
Sincerely yours,
Douglas J. Fontein
Enclosure
DJFontein:ea
FORM No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(9- 56)
OUTGOING WIRE
CLASS OF SERVICE: T ATE: NOVEMBER 20, 1958
TO: WSBAUERDONAUEAFTVIENNA
COUNTRY ( AUSTRIA
TEXT:
Cable No.
ALPHA LETTER DATED NOVEMBER NINETEEN AND ENCLOSED MAORANDUM NOW IN MAIL TO
YOU PROPOSES LOAN AND GUARANTEE AGREEMENTS BE MADE EFFECTIVE UPON NOTIFICATION
BY TELETYPE TO EACH BORROWER AND GUARANTOR AND INNEDIATE ACKNOWIEDGEMENT
FROM THEM BY SAME MEANS STOP SUCH IMIEIATE ACKNOWLEDGEMENT WOULD SATISFY
SECTION 8.01 OF LOAN REGULATIONS REQUIRING DELIVERY OF NOTIFICATION STOP
TO SIMPLIFY PROCEDURE WE NOW PROPOSE AEEMENTS BE MADE EFFECTIVE UPON
DESPATCH OF CABLES BY BANK WITHOUT NEED OF ACKNOWLEDGEMENT THUS AVOIDING
POSSIBLE DELAY IN EFFECTIVENESS AND CLOSING OF PUBLIC ISSUE DUE TO COMMNICATION
DIFFICULTIES STOP ACCORDINGLY DRAFTING SIDE IETTER PROVIDING FOR SUCH SIMPLIFIED
PROCEDURE WHICH AIRMAILING TO YOU STOP PLEASE CABLE IF SIMPLIFIED PROCEDURE
AGREEABLE IN WHICH CASE DISREGARD TELETYPE PROCEDURE STOP BETA FOR PROJECT
DESCRIPTION LOAN AGREEMENT PLEASE CABLE SOONEST WHETHER DECISION REACHED
FOUR OR FIVE UNITS
FONTEIN
Signed: (Type in last name of sender)
AUTHORIZED BY:
NAME: D]J. t- For Use by Archives Division
DEPT: Legal Checked for Dispatch
SIGNATURE: ___;_
(Signat re ndivi authof prove icable)_.
DJFon .ea 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. The costis half the cost of full rate messages with a minumum charge for 22wordsincludingaddress and text.
Full Rate Full rate messages are normally transmitted and delivered immediately. There is aminimum charge for 5 words, including address and text.
IBF Govt. This is a preferential rate extended to the Bank by some of its member countries.Messages are sent at full rate speed and at about half the cost. This rate normallyshould be used whenever available. It is at present available for the followingcountries:
Bolivia Cuba Guatemala * PeruBrazil Dominican Republic Honduras * SyriaBurma Ecuador Jordan UruguayChile El Salvador * Lebanon Venezuela
* China * Ethiopia Nicaragua YugoslaviaColombia * France PakistanCosta Rica Greece Panama
*In these countries the letter telegram rate is lower than IBF government rate andshould be used for messages when immediate transmission is not required.
Code Code messages are transmitted at full rate (or IBF Gqvt.) speed and cost. This rateshould be used only for confidential messages to staff members having a code withthem.
Day Letter Day letters are delivered during the day of transmission and should be used only formessages in the United States and to Mexico and Canada. There is a minimumcharge 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" isregistered in Paris, Bogota, Bangkok, Karachi, Lima, Quito and Tegucigalpa. The International Finance Corporationcable address "(CRINTFIN" is registered in New York, Paris and Washington. The name of the country of destina-don must always be added. (No charge is made for the name of a country).
3. Text
Messages to Bank Missions and to Resident Representatives should be numbered. These numbers maybe obtained by calling Ext. 3008.
Type text in capital letters and double space between lines. The text should be edited to elininateunnecessary 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 word hyphenatedwords, hyphenated names, and certain two-word groups, e.g. Airmail, Newyork, enduse.
4. Signature
Type in last name of sender. Use INTBAFRAD as part of the signature only when addressee does notknow the address of the sender.
5. Authorization
Type in name and 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 ofof cables outside of these hours.
ANY QUESTIONS REGARDING INCOMING AND OUTGOING WIRES SHOULD BE REFERRED TO THECABLE POST, EXT. 3008.
FORM No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(9. 56)
OUTGOING WIRE
CLASS OF SERVICE: DATE: NOVEiBER 20, 1958
TO: STAHLVERBUNDNETZVIENNA
COUNTRY ( AUSTRIA
TEXT:
Cable No.
ALPHA LETTER DATED NOVEIMBER NINETEEN AND ENCIOSED MEMORANDUM NOW IN EAIL
TO YOU PROPOSES IDAN AND GUARANTEE AGREEIENTS BE MADE EFFECTIVE UPON
NOTIFICATION BY TEIETYPE TO EACH BORROWER AND GUARANTOR AND IM1EDIATE
ACKNOWIEDGDENT FROM THEM BY SANE MEA S STOP SUCH IEEDIATE ACKNOWIEDGEMENT'
WOUID SATISFY SECTION 8.01 OF LOAN REGULATIONS REQUIRING DELIVERY OF
NOTIFICATION STOP TO SIMPLIFY PROCEDME WE NOW PROPOSE AGREEKENTS BE MADE
EFFECTIVE UPON DESPATCH OF CABLES BY BANK WITHOU T NEED OF ACKNOWIEDGE14ENT
THUS AVOIDING POSSIBLE DELAY IN EFFECTIVENESS AND CLOSING OF PUBLIC ISSUE
DUE TO CONI4JNICATION DIFFICULTIES STOP ACCORDINGLY DRAFTING SIDE LETTER
PROVIDING FOR SUCH SIMPLIFIED PROCEDURE WHICH AIRMAILING TO YOU STOP
PLEASE CABLE IF SIhPLIFIED PROCEDURE AGREEABLE IN WHICH CASE DISEEGARD
TELETYPE PROCEDURE STOP BETA FOR PROJECT DESCRIPTION LOAN AGRE ENT
PLEASE CABLE SOONEST WHETHER DECISION REACHED FOUR OR FIVE UNITS
FONTEIN
Signed:(Type in last name of sender)
AUTHORIZED BY
NAME: D.J. F nte For Use by Archives DivisionLegal
DEPT: Checked for DispatchSIGNATURE: _
(Sigrfbtur /bf indiv' u autori-z roa6v e cable).
. DJFonte sea ORIGINAL (File Copy)
(IMPORTANT: See over for guide in preparing Outgoing Wire)
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FORM No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(9.56)
OUTGOING WIRE
CLASS OF SERVICE: LT DATE: 4EMBER 20, 1958
TO: WAGNERKiR1TNERRING 10VIENNA I
COUNTRY ( AUSTRIA
TEXT:
Cable No.LETTER DATED NOVEMBER NINETEEN AND ENCLOSED 1OPRANDUM NOW IN MAIL TO YOU
PROPOSES WOAN AND GUARANTEE AGREEENTS BE LADE EFFECTIVE UPON NOTIFICATION
BY TEIETYPE TO EACH BORROWER AND GUARANTOR AND ILNEDIATE ACKNOWILEDGEMENT
FROM THEM BY SAME MEANS STOP SUCH I.GEDIATE ACKNOWIEDGEMENT WOULD SATISFY
SECTION 8.01 OF IOAN REGULATIO1S REQUIRING DELIVERY OF NOTIFICATION STOP
TO SIMPLIFY PROCEDURE WE NOW PROPOSE AGREEMENTS BE MADE EFFECTIVE UPON
DESPATCH OF CABLES BY BANK WITHOUT NEED OF ACKNOWIEDGEMENT THUS AVOIDING POSSIBLE
DELAY IN EFFECTIVENESS AND CLOSING OF PUBLIC ISSUE DUE TO C9MMUNICATION
DIFFICULTIES STOP ACCORDINGLY DRAFTING SIDE LETTER PROVIDING FOR SUCH
SIMPLIFIED PROCEDURE WHICH AIRMAILING TO YOU STOP PLEASE CABLE IF SIMPLIFIED
PROCEDURE AGREEABLE IN WHICH CASE DISREGARD TEIETYPE PROCEDURE
FONTEIN
Signed: (Type in last name of sender)
AUTHORIZED BY:
NAME: D.J. Fon ein For Use by Archives Division
DEPT: Legal Checked for Dispatch
SIGNATURE: /(S i gn-atu ndivi author- rove cable).
DJFontein: ea ORIGINAL (File Copy)
(IMPORTANT: See over for guide in preparing Outgoing Wire)
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FORM No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(9.-56)
OUTGOING WIRE
CLASS OF SERVICE: LT DATE: NOVEMBER 20, 1958
TO: TEUFENTEINFINAZMINISTERIUMVIENNA
COUNTRY ( AUSTRIA
TEXT:
Cable No.
LETTER DATED NOVEMBER NINETEEN AND ENCIOSED 1E1ORANDUM NOW IN MAIL TO YOU
PROPOSES 1OAN AND GUARANTEE AGRE-EINTS BE MADE EFFECTIVE UPON NOTIFICATION
BY TEIETYPE TO EACH BORROWER AND GUARANTOR AND IEDIATE ACKNOWLEDGEMENT
FROM THEM BY SAE EANS STOP SUCH IMMEDIATE ACKNOWEDGFEN2T WOULD SATISFY
SECTION 8.01 OF LOAN REGUIATIO1W REQUIRING DELIVERY OF NOTIFICATION STOP
TO SIMPLIFY PROCEDURE WE NOW PROPOSE AGREEENTS BE MADE EFFECTIVE UPON
DESPATCH OF CABLES BY BANK WITHOUT NEED OF ACKNOWIEDGEMENT THUS AVOIDING POSSIBLE
DELAY IN EFFECTIVENESS AND CLOSING OF PUBLIC ISSUE DUE TO COMMUNICATION
DIFFICULTIES STOP ACCORDINGLY DRAFTING SIDE IETTER PROVIDING FOR SUCH
SIMPLIFIED PROCEDURE WHICH AIRMAILING TO YOU STOP PLEASE CABLE IF SIMPLIFIED
PROCEDURE AGREEABLE IN WHICH CASE DISREGARD TELETYPE PROCEDURE
FONTEIN
Signed: (Type In last name of sender)
AUTHORIZED BY:
NAME: D.J. Fonte~ For Use by Archives Division
DEPT: legal Checked for Dispatch
SIGNATURE: /_(Sgnat re of ndividfal autkorized- to approve cable).
ORIGINAL (File Copy)
(IMPORTANT: See over for guide in preparing Outgoing Wire)
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FORM -48) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
OFFICE MEMORANDUMTO: FILES DATE: November 20, 1958
FROM: J.H. Collier
SUBJECT: Austria
1. After the circulation of the preliminary President's Reportand the Technical Report on the Aschach project to the ExecutiveDirectors, I received phone calls from Dr. Donner and M, Gragnanienquiring about Dabaklamm. Both wanted to know whether Dabaklammwas included in the present Verbundgesellschaft program. Texplainedthat Dabaklamm--sometimes referred to as Dorfertal-HUben--was notincluded in the four so-called "priority projects" referred to inthe Technical Report, but was one of the three other projects whichthe Verbundgesellschaft wished to undertake if it could obtain thenecessary capital. Since, after examining the Verbundgesellschaft'sprogram, the Bank decided to finance the Aschach project, the Verbund-gesellschaft had not requested a loan for Dabaklamm. These enquiriesperhaps arise from the Verbundgesellschaft's discussions with powercompanies in Germany and Italy over the possibility of raising moneyfor Dabaklamm.
2. Dr. Donner also asked about the Berliner Handelsgesellschaftloan and I gave him a brief account of what had happened including theBank's decision to waive its rights under the negative pledge clausefor a DM 100 million loan from the BHG. Finally he told me he hadreceived a letter from Bonn in which it appeared that the German au-thorities were still worrying about the possibility of German guaran-tees for Bank loans for Austrian power projects. T said that we werenot financing a border project, or even an "Interalpen" project, andno question of a guarantee from Germany had arisen.
cc: Mr. CopeMr. FonteinMr. Spottswood
*r WA.B. IliffNoebr9,95
AlaTRIA - InlteresV Rae f or 1Forthooming Aaohach Loan
1.When the Auntrian negotiators loft WaahiNrton thoy had beenlto-ld that the Bank'fs lending rato would be 6tind i-t is liky." thatVhis has been reported to Dr. Famitz. Since you are seeing him to-night, I thought you might likie to givehi hwlomne ttth- rate will, after "T, be only 5 3/4 . We have cabled ViennatodV to inform all concerned.
JHlCollior :vmo
FORm No. 61 C(3-54) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CONFIDENTIAL
MP '~STAFF LOAN COMMITTEE
1EMORANDIU TO THE STAFF LOAN COLMITTEE
Austria
1. As no new po2licy questions -re inclvcd, the Crvlttce is requestedto consider the attached draft Report and Recommendations of the Presidenton the proposed loan for the Aschach project, without meeting.
2. Side letters on:
(i) the V3rbundgesell~schafts irxvstment prc cramand pri-ority of funds f - r as sn a proje't
(ii) the Verbundgcs'dischaft ' c2nziri9en of +r eir
(iii) Liet -C 3na(iv) a o tia tval(v) 1e%, f1 CC te Guararck cc(rt
(vi) exuernal dcb-,
and memorandum on
(vii) rate of return
are attached for information.
3. Comments, if any, should be sent to reach Mr. Collier (ext. 3757)by noon on Friday, November 21.
4. It is planned then to distribute the loan documents (exceptingthe side letters and memorandum mentioned in para. 3 above) to theExecutive Directors for consideration at a special meeting to be calledfor Monday, December 1.
Herbert G. A. WoolleySecretary
Staff Loan Committee
November 19, 1958
Record Removal Notice ArhieFile Title Barcode No.
Electric Power Project - Aschach Power - Austria - Loan 0213 - P037355 - Negotiations - Volume 1 1516825
Document Date Document Type
November 19, 1958 Letter
Correspondents I Participants
To: Dr. Ernst WagnerFrom: Douglas J. Fontein
Subject / Title
Proposed refunding operation
Exception(s)Attorney-Client Privilege
Additional Comments
The item(s) identified above has/have beenremoved in accordance with The World BankPolicy on Access to Information or otherdisclosure policies of the World Bank Group.
Withdrawn by DateVlada Alekankina November 13, 2018
Archives 01 (March 2017)
November 19, 1958
Dr. Walther KastnerWien 9Ferstelgasse 1Austria
Dear Dr. Kastner:
I enclose herewith a revised Memorandum of Thingsto be Done dated November 12, 1958, for the proposedAschach Loan and a new Amortization Schedule and Scheduleof Premiums on Prepayment and Redemption for the draftLoan Agreement dated November 6, which I sent you undercover of my letter dated November 10. The new Amortiza-tion Schedule and Schedule of Premiums are based on aninterest rate of 5-3/4. This rate was set within thelast few days as the current rate for the Bank's loans.
With kindest regards,
Very truly yours,
Douglas J. Fontein
Enclosure
DJFontein:ea
November 19, 1958
Dr. Edgar PlanEmbassy of Austria2343 Massachusetts Avenue, N.W.Washington, D.C.
Dear Dr. Plan:
Enclosed please find the latest drafts of the Loan
and Guarantee Agreements and the various side documents for
the Aschach Project, together with a copy of Loan Regula-
tions Eo. 4 of the bank, dated June 15, 1956. There is
also enclosed a revised kemorandum of Things to be Done
dated Eovember 12, 1958, in connection with the signing
and effectiveness of the Aschach Project Loan.
With kindest regards,
Very truly yours,
Douglas J. Fontein
Enclosures
DJFontein:ea
. YV o 1 1 m a c h t
Die Bundesregierung der Republik Oaterreich hat be-
schlossen, namens der Republik Csterreich mit der Inter -nationalen Bank fUr Wiederaufbau und Wirtschaftaf5rderung
ein Garantieabkomen zu dem Anleihevertrag dieser Bankmit der Osterreichischen Elektrizitatswirtschafts Aktien' -
gesellschaft (Verbundgesellschaft) und der Osterreichi -schen Donaukraftwerke Aktiengesellschaft abzuschliessen.
Zu diesem Zweck hat der Bundeskanzler
Herrn Dr. Reinhard KAMITZ,Bundesminister fur Finanzen,
Herrn Dr. Wilfried PLATZER,ausserordentlichen und bevollmdchtigten
Botschafter,
Herrn Dr. Johannes PROKSCH,Legationsrat,
und
Herrn Dr. Eduard SCHILLER,Generalkonsul,
zu Bevollmdchtigten ernannt und jeden fur sich allein,ohne dass er der Mitzeichnung der Ubrigen Bevollmdchtig-ten bedurfte, ermdchtigt, namens der Republik Osterreichdae oben erwKhnte Abkommen und damit zusammenhdngendeDokumente zu unterzeichnen.
ZU URKUND DBSSEN hat der Bundeskanzler die vorlie-gende Yollmacht unterzeichnet und mit dem Staatssiegelder Republik Osterreich versehen lassen.
Geschehen zu Wien, den off. November 1956.Der Bundeskanzler:
November 19, 1958
Harold Manheim, Esq.Wachtell Manheim & Grouf15 Broad StreetNew York 5, New York
Dear Harold:
Enclosed please find a revised -emorandum of Thingsto be Done dated November 12, 1958, for the proposedAschach Loan. There is also enclosed a new AmortizationSchedule and Schedule of Premiums on Prepayment and Redexu-tion for the draft Loan Agreement dated November 6, 1958,which I sent you under cover of my letter dated November 10.
The new Amortization Schedule and Schedule of Premiums arebased on an interest rate of 5-3/4%. This rate was setwithin the last few days as the current rate for the Bank'sloans.
With kindest regards,
Sincerely yours,
Douglas J. Fontein
Enclosure
DJFontein:ea
November 19, 1958
Franz N. Oppenheimer, Esq.1828 Jefferson Place, N.W.Washington, D.C.
Dear Franz:
Enclosed please find a revised Memorandum of Things
to be Done dated November 12, 1958, for the proposed Aschach
Loan. There is also enclosed a new Amortization Schedule
and Schedule of Premiums on Prepayment and Redemption for
the draft Loan Agreement dated November 6, 1958, which I
sent you under cover of my letter dated November 10. The
new Amortization Schedule and Schedule of Premiums are
based on an interest rate of 5-3/4$. This rate was set
within the last few days as the current rate for the Bank's
loans.
With kindest regards,
Sincerely yours,
Douglas J. Fontein
Enclosure
DJFontein:ea
November 19, 1958
Dr. Rudolf StahlGeneraldirektorUsterreichische Elektrizitgtswirtschafts-Aktiengesellschaft (Verbundgesellsch aft)Wien IAm Hof 6Austria
Dear Dr. Stahl:
I enclose two copies each of a revised Memcrandum of Things to beDone in connection with the signing and effectveness of the Aschach Loan,and o'I a rew Aziortization Schedule and Schedule of Premiums on Frepaymentand Eedemption for the draft Loan Agreement dated November 6 which I sentyou under cover of my letter dated Noveiber 10. The new AmortizationSchedule and Schedule of Fremiums are based on an interest rate of 5-3/4.This rate was set within the last few days as the current rate for theBank's loans.
In the Yeinorandum of Things to be Done I would like to draw yourparticular attention to the following: first, in the Powers of Attorney tobe executed by the Verburdgeselj schaft and the Donaukraftwerke (Attachments2 and 3 to the Memorandum), the name of Di . Kamitz has now been deleted, onthe assumption that lie will not be in New York for the signing on December 2.Secondly, the procedure for the Effective Date set out on page 6 of theMemoranduu will differ from past practice in that the Bank will notify theVerbundgesellschaft the Donaukraftwerke and the Finance Ministry by tele-type (Fernschreiber) of the effectiveness of the Loan and Guarantee A-ieT-ements rather than by cable as was done in the pst, and will recuest animmediate acknowledgement by each of these institutions by teletype. Itis important that this acknowledgement be sent by teletype to th Bank inWashington i medi tely upon receipt of the notice since ithout thisacknowledgement it will not be possible to complete the closing for thesale of the bonds of the public issue. You can expect the teletyped noticefrom the Dank at about 4 p.m. Vienna time on December 9 and I would be mostgrateful if you could take the necessary steps to provide for immediateacknowledgement in the manner set forth above.
I am also writing to Messrs. Teufenstein, 1osbauer, Kastner andWagner on the above matters.
With kindest regards,
Very truly yours,
Douglas J. FonteinEnclosuresDJFontein :ea
November 19, 1958
Dr. Hans MosbauerGeneraldirektorbterreiohische Donaukraftwerke
Aktienge sell schaftWien IHohenstaufengasse 6Austria
Dear Dr. Mosbauer:
I enolose two copies each of a revised Memorandum of Things to beDone in connection with the signing and effectiveness of the Asohach Loan,and of a new Amortization Schedule and Schedule of Premiums on Prepaymentand Redemption for the draft Loan Agreement dated November 6 which I sentyou under cover of my letter dated November 10. The new AmortizationSchedule and Schedule of Premiums are based on an interest rate of 5-3/4%.This rate was set within the last few days as the current rate for theBank's loans.
In the Memorandum of Things to be Done I would like to draw yourparticular attention to the following: first, in the Powers of Attorneyto be executed by the Donaukraftwerke (Attachment No. 2 to the Memorandum),the name of Dr. Kamitz has now been deleted, on the assumption that he willnot be in New York for the signing on December 2. Secondly, the procedurefor the Effective Date set out on page 6 of the Memorandum will differ frompast practice in that the Bank will notify the Verbundgesellschaft, theDonaukraftwerke and the Finance Ministry by teletype (Fernschreiber) of theeffectiveness of the Loan and Guarantee Agreements rather than by cable aswas done in the past, and will request an immediate acknowledgement by eachof these institutions by teletype. It is important that this acknowledge-ment be sent by teletype t theBank in Washington tmmediately upon receiptof the notice since without this acknowledgement it will not be possibleto complete the closing for the sale of the bonds of the public issue. Youcan expect the teletyped notice from the Bank at about 4 p.m. Vienna timeon December 9 and I would be most grateful if you could take the necessarysteps to provide for immediate acknowledgement in the manner set forth above.
I am also writing to Messrs. Teufenstein, Stahl, Kastner and Wagneron the above matters.
With kindest regards,
Very truly yours,
Douglas J. FonteinEnclosuresDJFonttin ca
November 19, 1958
Dr. Wilhelm TeufensteinMinisterialratMinistry of FinanceWien IHi.ielpfortgasse 8Austria
Dear Dr. Teufenstein:
I enclose two copies each of a revised Memorandum of Things to beDone in connection with the signing and effectiveness of the Aschach Loan,and of a new Amortization Schedule and Schedule of Premiums on Prepaymentand Redemption for the draft Loan Agreement dated November 6 which I sentyou under cover of my letter dated November 10. The new AmortizationSchedule and Schedule of Premiums are based on an interest rate of 5-3/4%.This rate was set within the last few days as the current rate for theBank's loans.
In the Memorandum of Things to be Done I would like to draw yourparticular attention to the following: first, in the Full Power to be exe-cuted by the Federal Chancellor (Attachment No. 4 to the Memorandum) thename of Dr. Kamitz has now been deleted, on the assumption that he will notbe in New York for the signing on December 2. Secondly, the procedure forthe Effective Date set out on page 6 of the Memorandum will differ frompast practice in that the Bank will notify the Verbundgesellschaft, theDonaukraftwerke and the Finance Ministry by teletype (Fernschreiber) of theeffectiveness of the Loan and Guarantee Agretmen s rather than by cable aswas done in the past, and will request an immediate acknowledgement by eachof these institutions also by teletype. It is important that this acknowl-edgement be sent by teletype toiTheBiank in Washington immediately uponreceipt of the notice sinoe without this acknowledgement it will not bepossible to complete the closing for the sale of the bonds of the publicissue. You can expect the teletyped notice from the Bank at about 4 p.m.Vienna time on December 9 and I would be most grateful if you could takethe necessary steps to provide for immediate acknowledgement in the mannerset forth above.
With kindest regards,
Very truly yours,
Douglas J. Fontein
EnclosuresDJFontein ea
FORM No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(8- 55)
OUTGOING WIRE
CLASS OF SERVICE: LT DATE: N7E14ER 19, 1958
TO: TEUFENSTEINMINISTRY OF FINANCEVIENNA
COUNTRY ( AUSTRIA)
EXT:
Cable No,
BANK LENDING RATE REMAINS FIVE AND THREE QUARTERS PERCENT STOP
NMR DRAFT AGREEMENTS WITH AMORTIZATION TABLE ON THIS BASIS MAILED
TO YOU TODAY
COLLIER
Signed:
UT RIZED BY:
NA E: JHCollier( For Use by Archives Division
DEPT: Operations -E Checked for Dispatch
SIGNATURE:JHColliertvmo cc: Mr. Cope, Mr.Fontein,
Mr. Spottswood, Mr. Rutland
ORIGINAL (File Copy)(IMPORTANT: See over for guide in preparing Outgoing Wire)
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FORM No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
( 5-8)I N TE RNATIOA INAC CORPORA T ION
OUTGOING WIRE
CLASS OF SERVICE: LT DATE: NOVEMBER 19, 1958
TO: STAHLVERBUNDNETZVIEN1A
COUNTRY ( AUSTRIA)
TEXT:
Cable No.BANK LENDING RATE REMAINS FIVE AND THREE QUARTERS PERCENT STOP
NEW DRAFT AGREEMENTS WITH AMORTIZATION TABLE ON THIS BASIS MAILED
TO YOU TODAY.
COLLIER
fOR E-D BY: p
NAMR: J ollier For Use by Archives Division
DEPT: Operations - EAA Checked for DispatchSIGNATURE:__ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _
(Signature of individual authorized to approve cable).
JHCollier:mea ORIGINAL (File Copy)c: Mr. Cope, Mr. Fontein, Mr. Spottswood, Mr. utland(IMPORTANT: See over for guide in preparing Outgoing Wire)
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(STERREICHISCHE DONAUKRAFTWERKE wIEN 18.11.1958AKTIENGESELLSCHAFT I.,HOHENSTAUFENOASSE 6
TEL.: 63 47 11
ILAVORSTAND
S P E Z I A L V 0 L L M A C H T . .
Die USTERREICHISCHE DONAUKRAFTWERKE AKTIENGESELLSCHAFT,
Wien I., Hohenstaufengasse. 6, bevollmdchtigt hiemit
Herrn Dr. Wilfried P 1 a t z e r,
aulerordentlicher und bevollmdchtigter Botschafter,
errn Dr. Johannes P r o k s o h,
egationsrat,
und
Herrn Dr. Eduard S c h i 1 1 e r,
Generalkonsul
jeden fUr sich allein, ohne daB er der Mitzeichnung der
Ubrigen Bevollmdchtigten bedUrfte, fUr sie einen Anleihe-
vertrag (LOAN AGREEMENT, Aschach Project) miti der INTER.
NATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT, 1818
H Street, N.W., Washington 25, D.C., rechtsverbindlich
abzuschlieBen, bzw. zu unterzeichnen, in ihrem Namen alles
und jedes vorzukehren, was zum Abschlu3 dieses Vertrages
ndtig und zweckmdig erscheint, diesbezugliche Schrift-
stUcke zu Ubernehmen und deren Empfang rechtswirksam zu
bestatigen.
0STERRElCHTSCHE DONAUK FTWVERKEAktiengesellsc ft
B'ihm -er
BEGLAUBIGUNGEN
B. R. Z. 1.908/1958
Die 3chtheit der umstehenden Firmazeichnungen der Herren
Dipl. Ing. Hans B 6 h m e r und Hanna M o a b a u e r
als Vorstandaitglieder der Firma Osterreichische Donau-
kraftwerke Aktiengesellschaft in Wien 1., Hohenstaufengasse
Nr. 6, wird hiemit besttigt. - - - - - - - - - W i e n
am aoht zehnt en November neunzehnhundertachtundfiinf zig. -
O e vorstahenden YntermohriftA do@ Harmn
offontichen Notars im hierortigen Sprsngelwrd beurkundt
PrAident.dos laidnsgerichtws ft ZRS> Wn, am -2 0. Nov. 1958
Die Echtheit der vorstehenden 0Untersdirift und des Amtssiegelswird bestdtigt.
OST win m20. Nov. 1%
BUNDESKANZLERAMTAuswartige elegenheiten
REPUBLIC OF AUSOTRIA 4CITY oy VTFINNA sEABAssY' OF TWAUNITED) STATLS OF A)MCA Aa*
1, -IH R , -IV;;;P Con,,,uf of thpUnited States of Ameri -a A' y co(ti : ncd amd
qualified, do hereby. :J RULv Q4CKwho authenticatcd 5 r oe!es a mln esnethis certificate an oflfl i l ()I * rf n crl V 1:1 V I orv, [)p..:l tifor Foreign Affairs, authi: :d Ic i u c n e.
IN WITNESS WHEREOF, I have hereunto set my hand and tht
ss! of the American Embassy at Vienna, Austria, this 10
day of rOVGt1116R, ,'is.
Vienna,Bervice/Receipt No. .12 RDSTRATariff Item No. Consul of theFee Paid: U.S. S _.C United States of AmericaLocal CY eqviv. 15ted S r
G.-Z. H J
Amtsbestatigung
Das gefertigte Gericht bestAtigt, daB 4 U
4L
am .berechtigt war und heute noch
laut des derzeitigen Standes des Handelsregisters - s -
berechtigt sind fit), die in diesem Register eingetragene Firma
kollektiv rechtsverbindlich zu zeichnen
Handelsge. cht WienGeschsz.s"a ung 7
1, Riemer asse 7
7 JushzebrkonfrollorKOLLM, WIs I, Riamurgme 6, Teokphon R 24-1-7. - Nachdruck verbotem. - A. B.
Osterreichische Wien I., 18.November 1958ElektrizitatswirtSchafts-Aktiengesellechaft Am Hof 8, Tel. 83-07-71
(Verbundgeuellechaft) r.Bg/o
OTA MIRE KTION
S P E Z I A L V 0 L L M A C H T
Die OESTERREICHISCHE ELEKTRIZITATSWIRTSCHAFTS-AKTIEN-
ESELLSCHAFT, Wien I., Am Hof Nr. 6, (Verbundgesellschaft), be-
ollmdchtigt hiemit
Herrn Dr.Wilfried P 1 a t z e r,
*\ ausserordentlichen und bevollm.chtigten Botschafter,
Herrn Dr.Johannes P r o k s c h,
Legationsrat
und
Herrn Dr.Eduard S c h l 1 r,
Generalkonsul
jeden fUr sich allein, ohne daB r der Mitzve chnung der U4 n
Bevollmdchtigten bedUrfte, gtir siTW-6he"A l4 evertra
AGREEMENT, Aechach Project') mitper INTENATI'ONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT, 1818 H Street, N.W.Washington 25,
D.C., rechteverbindlich abzusohlielen, bzw. zu unterzeichnen, in
ihrem Namen alles und jedes vorzukehren, was zum Absch-luB dieses
Vertrages n6tig und zweckmgiig ersoheint, diesbezugliche Schrift-
stUcke zu Ubernehmen und deren Empfang rechtswirksam zu bestitigen.
OESTERREICHISCHEELEKTRIZITXTSWIRTSCHAFTS-, AKTIENGESEL 4AF
B.R.Z. 19o7/1958
Die Echtheit der vorstehenden Firmazeichnungen der Herren
Direktoren Dr. Karl K 5 1 1 i k e r und Dipl.Ing. Franz
H i n t e r m a y e r , als Vorstandsmitglieder der Firma
"Osterreichische Elektrizitdtswirtschafts-Aktiengesell
./.
- er xedm9voX.8r .. i neiwr No C0 a i9T a IGH MA fliobeIlelgneit)4A-ettOdothiwetotisiit>9
1 3
ot\ -8 E E .aG tlo e IIeegbnudIeVi
o.KO I.TA
schaft" in Wien I,, Am Hof Hr. 6, wird Uermit%
statigt. - - - - - - - - - - - - - -
W i e n , am achtzehnten November neu
zehnhu.dertdckt1 D go --
-ZII A- TA:,K I I SIIYI1TX - a IIHiaaTaao is9V) ,1','o , -TAH~aJdaa
21 00 9MdLI ls
D1Eclhthelt 4aa rafdo* Haerrm . XCzVI
offentlichen Notar Im hbe*ifgeni3rkgedga.zc I I'IH
ne&Iid. -tab ourndo a D enr 911a nose [d
A ll 'aAbq xuAa JAOITA I IM (toetosIi dioaoaA
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Us mailwatdo mioend
08 01IREPUBUC Qr TcffTY OF IrMOIMBAWSY OFSUUNrTBD T
IR1CHA ,J w Consul of theUnited States of Ameri -n ,)IV- A,.ri7, duly commiswioned andqualified, do hereby ceti ! *,f 1)q 8l k , .
ne'i 'iflk St Agflf s ,i Denaetisserifica an U I (1 ustrian FcderJ CThancery, Z' 01ten1
mnsarr .1 rin[f ~r~um~d 4 parf~r4 skhtserliXe '19T~
.\..a=111. sb Id#EM INMftbW04-jbjawpar"m setidn 4as n H
Vienna,A 04 AL4--r-V-3&j158
Tervic*/Receipt No. RICHARD STRAUSTariff item No' , Pig -. Consul of theFee Pad: U.S. 4 .' - 1 Th ited states of AmeritaIAal CY equiv.-
G.-Z. B R B 3900 a
AmtsbestAtigung
7
Das gefertigte Gericht bestatigt, daB die Herren
Dr.Karl KUlliker, Kaufmann, Wien und Direktor Dipl.Ing.Franz Hintermayer, Wien, beide ale Vorstandsmitglieder
am ..November 1.%er.echtigt war und heute noch
laut des derzeitigen Standes des Handeisregisters - Ipty $fg~vIAYg --berechtigt sind (lit), die in diesem Register eingetragene FirmaOsterreichische Elektrizitdtswirtschaft-Aktiengesellschaft
kollektiv rechtsverbindlich zu zeichnen
Sitz der Firma ist Wien.
Hande!e' - ht WienGe-ung 7
19. Nov 19
JustizoberkonfrollorTH. KOLLM, Wien 1, Riewergasse 6, Telephon R 24-1-87. - Nachdruck verbotes. - A. B.
FORM No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(9-56)
OUTGOING WIRE
CLASS OF SERVICE: FULL RATE DATE: NOVEMBER 18, 1958
TO: HERMANNVERBUNDIETZVIENNA
COUNTRY ( AUSTRIA
EXT:
Cable No.
AIRMAILING YOU TODAY TEN COPIES LOAN REGLATIO NUMBER FOUR DATED
JUNE 15, 1956
FOINTEIN
Signed: (Type In last name of sender)
AUTHORIZED BY:
NAME: D-J. Fontein For Use by Archives Division
DEPT: Legal Department -- Checked for DispatchSIGNATURE:
(Signature of di dual thorized approve cabIe}.
DJFontein:ea ORIGINAiL (File Copy)
(IMPORTANT: See over for guide in preparing Outgoing Wire)
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FoRm No. 26(5.58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
INCOKING WIRE
DATE OF WIRE: 3BM 89"8 1.0 U ROUTING
TO: - ACTION COPY TOAN MY -NW
FROM: INFORMATION COPY TO
Decoded By
TEXT: I
15 .6,41956
DUPLICATE
19vember 14, 1958
Dear Dr. Kastnert
Mr. Fontein has asked me to serd you a copy of our Loan
-Regulations No. 4 of 15 June 195A and two memoranda which
explain the differences between this version of the Loan Regu-
lations and that of 15th of February 1956.
Yours sincerely,
E. AwidSecretary to Mr. Douglas Fontein
Dr. W. KastnerFerstelgas.e 1Vienna 9Austria
JHollier zvmo
FORM No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(8- 55)
OUTGOING WIRE
CLASS OF SERVICE: LT DATE: NOVEIER 14, 1958
TO: DR. W. KALTNERFERSTELGASSE 1VIENNA ti
COUNTRY ( AtBTRIA)
fEXT:YOUR CABLE 14 NOVEMER 58 AS STATED IN SECTION 1.01 LOAN REGUATIONS
Cable No.NO. 4 OF 15 JUNE 56 APPLY FOR NaW LOAN STOP MAILING ADDITIONAL
COPy AND MEMORAVDUM EPLAINING CH1GANES FROM 15 FEBRUARY 55 VERSION
WHICH ARE NOT SUBSTANTIAL
FONTEIN
Signed:
AUTHORIZED BY:
NAME: JHCOLLIER For Use by Archives Division
DEPT: OPERATIOE' - ZAA Checked for Dispatch
SIGNATURE:
JHCollier svmm
ORIGINAL (File Copy)(IMPORTANT: See over for guide In preparing Outgoing Wire)
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SHUI/A ONI091fl0 9Nf)d3dHd U0.4 HU1fl
KUHN, LOEB & CO. P 5 November 14, 1958
Michael L. Lejeune, Esq.International Bank for Reconstruction and Development1818 "H" Street, N. W.Washington, D. C.
Austrian Financing
Dear Mr. Lejeune:
This is to advise you that Dr. Reinhard Kamitz, Finance Ministerof the Republic of Austria, will be present at a press conference to be heldat the office of Kuhn, Loeb & Co. on Monday, November 24th, at 2:30 P. M.
If you (and any of your associates) should desire to attend thisconference, you will be most welcome. You will also be welcome at theUnderwriters' Due Diligence meeting on Tuesday, November 25th, at 10:30 A.M.,to be held at The Wall Street Club, 40 Wall Street (26th floor), New York,N. Y.
With kind regards, I remain
Sincerely yours,
Arthur Oppenheimer
ijs
b JBRt24.November 1958
An die
Osterreichische Botschaftin Washington
W a s h i n g t o n 8, D.C.
2144 Wyoming Avenue N.W.
Betreff: Weltbankanleihe Projekt Aschach
Im Sinne der mit Ihnen und der IBRD gepflogenen Besprechun-
gen erlauben wir uns, Ihnen beiliegend je eine 6pezialvollmacht der
Osterreichischen Donaukraftwerke AG und unserer Gesellschaft zu uber-
reichen. Wir bitten den Herrn auSerordentlichen u.bevollmdchtigten Bot-
schafter Dr. Wilfried Platzer,in seinem Verhinderungsfalle den Herrn
Dr.Johann Proksch und in dessen Verhinderungsfall den Herrn General-
konsul Dr.Eduard Schiller, im Namen der Osterreichischen Donaukraft-
werke AG und in unserem Namen den mit der IBRD fUr das Projekt
Aschach vereinbarten Anleihevertrag samt zugehbrigen Dokumenten
zu unterfertigen.
Die Spezialvollmachten sind mit den erforderlichen Beglau-
bigungen und den dazugehbrigen Amtsbestatigungen des Handelsregisters
Wien versehen.
Was den Inhalt des Anleihevertrages und der angefUhrten
Dokumente betrifft, gestatten wir uns mitzuteilen, da2 wir mit der
Fassung des Anleihevertrages vom 6.11.1958 sowie der Briefentwurfe
vom 7.11.1958 bzw. 21.11.1958, und zwar:
Brief der IBRD an die Verbundgesellschaft wegen Auszahlung des Anlei-heerloses (Entwurf vom 7.11.1958),
Brief der Osterr.Donaukraftwerke AG an die IBRD betreffend die "Listof goods" (Entwurf vom 7.11.1958),
Gegenbrief der Verbundgesellschaft an die IBRD betreffend das Inve-stitionsprogramm (Entwurf vom 7.11.1958),
./.
-2-
das Memorandum betreffend die Strompreise,im besonderen die Verzin-
sung des Eigenkapitals (Entwurf vom 7.11.1958)
Briefentwurf wegen Abdnderung des Absatzes 9.03 der Loan RegulationsNo. 4,
einverstanden sind.
Wir zeichnen
mit vorzUglicher Hochachtung
OsterreichischeElektrizitdtawirtschafts-
Aktiengesellschaft
FORm No. 26(5-58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
INCONIKO WIRE
DATE OF WIRE: W 14. ROUTING
TO: DCGOLA J. PrE gM ACTION COPY TO MR. F?1WN
FROM: WINFORMATION COPY TO
Decoded By
TEXT: IMR BCMUBE 10,OV,~'58 BMSTARTMENW, BIT IQI UKMWIM~
03 QEAE5 1,L DE ANLEH BME0 ANLEIHMMCHMINIH V
15.juI 1956 oIM G34AS ANLEIHE 3 AlTLHIUMI90CITVE vcm
15.FfinmUAR 1955 ZUGIJimNDEEMT WERDEae
GRI.ASINN
DUPLICATE
November 12, 1958
Documents to be Furnished by Austrians forSigning and Effectiveness of Proposed Loan
and Guarantee Agreement for Aschach Project
A. Documents Required for Signing of Loan and Guarantee Agreement
General: Since the proposed loan by the Banka) for the AschachProject will be made in conjunction with a public issue of bonds on theNew York market, a tight time schedule will have to be adhered to andit is essential that the various documents listed below be ready whenneeded. There will be an interval of only a few days between the sign-ing of the Loan and Guarantee Agreement and between that signing andthe effectiveness of the Bank loan. The following memorandum is achecklist and guide in the preparation of the various documents, toprevent mishaps.
Note: The Gesetz fiber die Aufnahme von Responsibility of:Anleihen in fremder Wbhrung (Auslandsanleihen-gesetz) has been published in the Bundes-gesetzblatt on November 10, 1958 under number239. It contains the Government's authorityfor the public issue in New York and for theguarantee of the Bank's loan of the AschachProject. A copy of the Bundesgesetzblatt Dr. Wagnershould be sent to the Bank. A provisionaltranslation of the Act is contained in Attach-
ment 1.
It is contemplated that the Loan and
Guarantee Agreement will be signed on Tuesday,December 2, in New York, when the PurchaseContract with the underwriters for the publicissue will also be signed.
The documents listed under 1 to 5 Verbundgesellschaft andinclusive below should be delivered to the Donaukraftwerke; Bundes-
Austrian Embassy in Washington (and copies kanzleramt (Auswgrtiges)thereof to the Bank at 1818 H Street, N.W.,Washington 25, D.C.) not later than one weekbefore the signing of the Loan and Guarantee
Agreement; accordingly, if the Loan andGuarantee Agreement are to be signed onDecember 2, these documents should reach theEmbassy and the Bank not later than November 25.Copies of each of these documents should also be
a) Unless otherwise indicated the term "Bank" means International Bankfor Reconstruction and Development.
-2-Responsibility of:
sent to Dr. Ernst Wagner, Wien I, Kgrntnerring 10and to Dr. Walther Kastner, Wien IX, Ferstelgasse 1.
1. Documents Required for Signing of Loan Agreement
I. Certified power of attorney signed on behalf Verbundgesellschaftof the Donaukraftwerke authorizing the and DonaukraftwerkeAustrian Ambassador in Washington or in hisabsence the Austrian Charge d'Affaires inWashington or in his absence the AustrianConsul General in New Yorkb) to sign, onbehalf of the Donaukraftwerke, the LoanAgreement and related documentsc). A draftof such power of attorney is attached(Attachment No. 2).
2. Certified extract from the Handelsregister Verbundgesellschaftshowing the authority of those who signed and Donaukraftwerkethe power of attorney referred to in 1 above,to act on behalf of the Donaukraftwerke.
3. Certified power of attorney authorizing the VerbungesellschaftAustrian Ambassador in Washington or in hisabsence the Austrian Charg4 d'Affaires inWashington or in his absence the AustrianConsul General in New Yorkd) to sign, onbehalf of the Verbundgesellschaf , the LoanAgreement and related documentse)- A draftof such power of attorney is attached(Attachment No. 3).
4. Certified extract from the Handelsregister Verbundgesellschaftshowing the authority of those who signedthe power of attorney referred to in 3 above,to act on behalf of the Verbundgesellschaft.
b) It is contemplated that the Loan Agreement will be signed in New Yorkand that the Austrian Ambassador will sign the Loan and GuaranteeAgreement. To safeguard against unforeseen circumstances it is desir-able that the power of attorney authorize, in addition to the AustrianAmbassador in Washington, the Austrian Charge d'Affaires in Washingtonor in his absence the Austrian Consul General in New York.
c) The power of attorney should authorize the signing not only of the LoanAgreement but also of related documents, as e.g. the list of goodsletter, the letter on priority of funds for the Aschach Project, etc.Drafts of the Loan and Guarantee Agreements, dated November 6, and ofthe related documents all dated November 7, were sent to Messrs. Teufen-stein, Stahl, osbauer, Kastner and Wagner under cover of letters, alldated November 10.
d) See footnote b) above.
e) See footnote c) above.
-3-
Responsibility of:
II. For Signing of Guarantee Agreement
5. Full Power issued by the Bundeskanzler Finance Linistry andauthorizing the Austrian Ambassador or Bundeskanzleramtin his absence the Austrian Charged'Affaires in Washington or in his absencethe Austrian Consul General in New Yorkf)to sign, on behalf of the Republic ofAustria, the Guarantee Agreement betweenthe Bank and the Rqpublic of Austria andrelated documentsg . A draft of such FullPower is attached (Attachment No. 4).
B. Documents Required for Effectiveness of Loanand Guarantee Agreement
Note: The Loan and Guarantee Agreement have tobe made effective one week after their signature,upon the closing for the sale of the bonds of thepublic issue to the Underwriters; accordingly, ifthe Loan and Guarantee Agreement are signed onDecember 2 they should become effective on Decem-ber 9. The documents listed under 1 to 9 inclusivebelow will have to be executed before the Loan and
Guarantee Agreement can be made effective. Theyshould, therefore, be prepared in advance of thesigning of the Loan and Guarantee Agreement and beexecuted as soon as possible thereafter. Theyshould be delivered to the Bank at 1818 H Street,N.W., Washington 25, D.C. Copies of each of thesedocuments should also be sent to Dr. Wagner and,except for the legal opinions listed under 1 and 6below, to Dr. Kastner. Since these documents maynot reach the Bank in time for the closing for thesale of the bonds of the public issue, Dr. Wagner Dr. Wagnerwill also cable the Bank when the documents listedunder 1 to 9 inclusive below have been signed andcopies thereof have been received by him.
I. Documents Required for Effectiveness of LoanAgreement
1. Legal opinion concerning the matters set Dr. Kastner, Verbund-
forth in Section 9.02, paragraphs (a) and gesellschaft and
(b) of Loan Regulations No. 4 of the Bank Donaukraftwerke
f) See footnote b) above.
g) The Full Power should authorize the signing not only of the GuaranteeAgreement but also of any related documents, as e.g. the letter on
external debt and the letter on the negative pledge clause . See also
footnote c) above.
-4-Responsibility of:
and in Article VII of the Loan Agreement.This opinion will be prepared by Dr.Walther Kastner. The opinion should interalia refer to the consents and declarationslisted under 2 to 8 inclusive below. Adraft of the opinion should be sent as soonas possible to Dr. Wagner and to the Bankfor comment.
2. Consent by the Nationalbank pursuant to the NationalbankDevisengesetz, BGBl. No. 162 of 1946. Adraft of such consent is attached (Attach-ment No. 5).
A letter requesting such consent will Verbundgesellschaft
have to be sent to the Nationalbank by the and DonaukraftwerkeVerbundgesellschaft and the Donaukraftwerke.
3. Consent by Federal Ministry of Finance in Finance Ministryagreement with Federal Ministry of theInterior to the issuance and delivery ofthe Bonds provided for in the Loan Agreementpursuant to paragraph 1, Kapitalverkehraverordnungof June 12, 1941, DRGBl. I, S. 238, para-graph 4, Kapitalverkehrdurchfiirhungsverordnungof August 9, 1941, DRGBl. I, S- 515, and para-graph 14, Abs. 1 of the Finanzverfassungs-gesetz of January 21, 1948, BGBl. No. 45 of
1948. A draft of such consent is attached(Attachment No. 6).
A letter requesting such consent will Verbundgesellschafthave to be sent to the Finance Ministry by and Donaukraftwerke.the Verbundgesellschaft and the Donaukraft-werke.
4. Declaration by Federal Ministry of Agricul-ture and Forestry (Oberste Wasserrechtsbeh6rde)pursuant to paragraph 83 (2) of the Wasserrechts-
gesetz, that the Aschach Project is a "bevorzugteWasserbau". Such declaration has already beenreceived by the Verbundgesellschaft and aphotostatic copy made available to the Bank(Attachment No. 7).
5. Consent in principle of the Aschach Projectpursuant to Article 16 of the JochensteinAgreement by the Austrian Government (FederalMinistry of Transportation and Electricity
9 -5-Responsibility of:
Platters), the Government of the FederalRepublic of Germany (Verkehrsministerium)and the Bavarian Government. The approvalby the German and Bavarian Government shouldalso cover the raising of the water level onthe Donau for a length of 1.3 kilometerswhere the Donau touches Bavarian territory.
A request for such consent will be made Verbundgesellschaftby the Verbundgesellschaft and the Donau- and Donaukraftwerkekraftwerke.
II. Documents Required for Effectiveness ofGuarantee Agreement
6. Legal opinion covering the matters set Dr. Kastner,forth in Section 9.02, paragraphs (c) and Finance Ministry(d) of Loan Regulations No. 4 of the Bank(including in particular a reference tothe rate covenant set forth in Section3.06 of the Guarantee Agreement) and inArticle VII of the Loan Agreement. Thisopinion will be prepared by Dr. Kastner.It should inter alia refer to the provisionsin the Bundesgesetz iber die Aufnahme vonAnleihen in fremder Whunng (Auslands-anleihegesetz) concerning the negativepledge, the exemption from taxation andthe arbitration procedure, as well as tothe letter, certificate and legal opinionlisted below under 7 to 9 inclusive. Adraft of the opinion should be sent as soonas possible to Dr. Wagner and to the Bankfor comment.
7. Letter by the Nationalbank to the Finance Nationalbank andMinistry concerning the application of the Finance Ministrynegative pledge clause provided for inSection 3.01 of the Guarantee Agreement tothe assets of the Nationalbank. A draft ofsuch letter is attached (Attachment No. 8).
8. Certificate by the Oberste Rechnungshof Oberste Rechnungshofconcerning the unexercised borrowing and and Finance Ministryguaranteeing powers of the Government underthe Gesetz Ziber die Aufnahme von Anleihenin fremder Whrung (Auslandsanleihengesetz).This certificate should be dated Tuesday,December 9, which is the contemplatedeffective date of the Loan and Guarantee
-6-Responsibility of:
Agreeient in6 the date of closinU forthe sale of the bonds of the public issue.A draft of such certificate is attached
(Attachment No. 9).
The certificate should be signed at Dr. Wagner
the opening of business on December 9 andDr. Wagner will send a direct cable to
Messrs. Schrenk and Fontein, care of
Cravath, Swaine & Moore in New York when
this certificate has been signed andreceived by him.
9. Legal opinion by Bundeskanzleramt (Ausseres), Bundeskanzleramt an4
based on opinion by Bundesministerium fUr Schiffahrtsbeh6rde
Verkehr- und Elektrizit~tswirtschaft(Oberste Schiffahrtsbeh~rde) that theAschach Project does not violate Austria's
obligations in respect of the Donau as aninternational waterway.
C. Effective Date Procedure
When the conditions for the effectiveness of
the Loan and Guarantee Agreement have been fulfilled,
the Bank will by teletype notify the Finance Iinistry,
the Donaukraftwerke and the Verbundgesellschaft that
the Loan and Guarantee Agreements have become effective
and will request immediate acknowledgement by tele-
type to the Bank from each of these addressees that
the notice has been received. Such immediate acknowledge-
ment is required in order to complete the closing for
the sale of the bonds of the public issue. The tele-
type notices from the Bank may be expected to arrive
in Vienna at about 4 p.m. Vienna time on December 9.
In addition the Bank will wish to receive in
due course for its records a more formal acknowledge-ment of receipt of these notices.
BEIIAGE Nr . 1
Translation E n t w u r f
November 12, 1958
Federal Law concerning the Taking-up ofLoans in Foreign Currencies (External
Loan law), BGBl. 1958, Nr. 239
The National Council has decided:
Article I
General Provisions
Section 1.
The Federal Government is authorized, in the name of the Republicof Austria, to take up loans or credits up to a maximum amount notexceeding at any time US Dollars 250 million or the equivalent thereof inforeign currencies, or to assume up to this maximum extent guaranties of,or the liability for default in, or the liability as surety and obligorfor, loans or credits to Austrian enterprises.
Section 2
The proceeds from agreements concluded pursuant to Sec. 1 shall
be used to meet partially the Austrian import and investment requirements.
Section 3
The Federal Government shall report to the ain Committee of the
National Council on loans, borrowings or credits taken up, and onguaranties and liabilities undertaken, pursuant to this Federal Law,submitting to it at the same time the concluded agreements.
Article II
Section 4
The following additional provisions shall govern the loan to betaken up by the Federal Government, within the framework of the provi-sions set forth in Article 1, in the fall of 1958, for a nominal value of
up to 35 million in US Dollars, to be sold by the investment banks of
Kuhn, Loeb & Co., of New York, and Ladenburg, Thalmann & Co., of New
York, and the loan simultaneously to be taken up by the Austrian Elektri-
zitgtswirtschafts-Aktiengesellschaft (Verbundgesellschaft) and the Austrian
Donaukraftwerke Aktiengesellschaft with the International Bank for Recon-
struction and Development (Internationale Bank fir Wiederaufbau und
-2-
Wirtschaftsf'rderung), in an amount of up to 30 million in US Dollars,as well as the liability as surety and obligor to be undertaken by theAustrian Government for this loan:
1. It may be stipulated in the agreements that liens on Federalassets or Federal revenues for obligations of the Republic of Austriaunder such agreements shall be granted without further action on thepart of the creditors ratably and equally with such liens as may begranted subsequent to the conclusion of these agreements for other obli-gations of the Republic of Austria.
2. (Constitutional provision). The taxes related to the con-clusion or the carrying out of these agreements shall neither be fixednor levied. Taxes on income, proceeds or assets which result from these
loans or under the bonds issued on the basis of these agreements shall
neither be fixed nor levied, unless the beneficial owner of the bonds
has his residence (seat) in Austria.
3. Insofar as an arbitration clause should be agreed upon or an
arbitration agreement made in writing in such agreements, arbitral awards
made by an arbitration tribunal to which a matter was submitted in accord-
ance with such arbitration agreement, and settlements entered into beforesuch tribunal, shall be enforceable by execution in accordance with Sec. 1of the Execution Ordinance. If such award was made in a foreign countryor if the arbitral settlement was entered into in a foreign country, the
provisions of Secs. 81 through 83 and 85 of the Execution Ordinance shallbecome applicable.
Article III
Final Provisions
Section 5
The Federal Law dated July 25, 1946, concerning the Taking-up of
Loans in Foreign Currencies, presently valid in the version of the FederalLaw dated March 12, 1958, RGBl. No. 47, shall cease to be effective.
Section 6
The provisions of Article I of this Federal Law shall cease to beeffective on December 31, 1961.
Section 7
The Federal Finance Ninistry shall be in charge of carrying outSec. 4, 2 of this Federal Law; the Federal Justice Ministry, of carryingout Sec. 4, 3 of this Federal Law; and the Federal Government shall bein charge of carrying out the remainder of this Federal Law.
BEIIAGE Nr. 2
OESTERREICHISCHE DONAUKRAFTWERKE E n t w u r fAktiengesellschaft
November 12, 1958
S PEZ IALVO LLMACH T
Die OESTERREICHISCHE DONAUKRAFTWERIE-AKTIENGESELLSCHAF',Wien I., Hohenstaufengasse 6, bevollmgchtigt hiemit
Herrn Dr. Wilfried Platzer,ausserordentlichen und bevolnhachtigten Botschafter,
Herrn Dr. Johannes Proksch,te gationsrat,
und
Hern Dr. Eduard Schiller,Generalkonsul,
jeden ir sich allein, ohne dass er der itzeichnung der tibrigenBevollmchtigten bedUrfte, f' r sie einen Anleihevertrag (LOAN AGREE-MENT, Aschach Project) mit der INTERNATIONAL BANK FOR RECONSTRUCTIONAND DEVELOPIENI', 1818 H Street, N.W., Washington 25, D.C., rechtsver-bindlich abzuschliessen, bzw. zu unterzeichnen, in ihrem Namen allesund jedes vorzukehren, was zum Abschluss dieses Vertrages n'tig undzwecknissig erscheint, diesbezigliche Schriftstcke zu fibernehmenund deren Empfang rechtswirksam zu best~tigen.
CESTERREICHISCHE DONAUKRAFTWEREAktiengesellschaft
Wien, am 1958
BEGLAUBIGUNGEN
BEIAGE Nr. 3
E n t w u r f
November 12, 1958
S P E Z I A L V 0 L L M A C H T
Die OESTERREICHISCHE ELEKTRIZITAETSWIRTSCHAFTS-AKTIENGESELL-SQHAFT, Wien I., Am Hof Nr. 6, (Verbundgesellsdhaft), bevollm~ohtigthiemit
Herrn Dr. Wilfried Flatzer,ausserordentlichen und bevollmchtigten Botschafter,
Herrn Dr. Johannes Proksch,legationsrat,
und
Herrn Dr. Eduard Schiller,Generalkonsul,
jeden fir sich allein, ohne dass er der hitzeichnung der 'ibrigen
Bevollmichtigten bedirfte, fIr sie einen Anleihevertrag (LOAN AGREE-
MENT, Aschach Project) mit der INTERNATIONAL BANK FOR RECONSTRUCTIONAND DEVELOPMENT, 1818 H Street, N.W., Washington 25, D.C., rechts-
verbindlich abzuschliessen, bzw. zu unterzeichnen, in ihrem Namen
alles und jedes vorzukehren, was zum Abschluss dieses Vertrages n6tigund zweckRmssig erscheint, diesbezUgliche Schriftstcke zu ibernehmen
und deren Empfang rechtswirksam zu best~tigen.
OESTERREICHISCHE ELEKTRIZITAETSWIRTSCHAFTS-AKTIENGESELISCHAFT
Wien, am 1958.
REGLAUBIGUNGEN
BEIIAGE Nr. 4
E n t w u r f
November 12, 1958
V o llma c h t
Die Bundesregierung der Republik Oesterreich hat beschlossennamens der Republik Oeterreich mit der Internationalen Bank fNrWiederaufbau und Wirts d.aftsf6rderung ein Garantieabkommen zu demAnleihevertrag dieser Bank mit der Oeste 4 reichischen Elektrizitts-wirtschafts-Aktiengesellschaft (Verbundgesellschaft) und der Oester-reichischen Donaukraftwerke Aktiengesellschaft abzuschliessen.
Zu diesem Zweck hat der Bundeskanzler
Herrn Dr. Wilfried Platzer,ausse:ordentlichen und bevollmchtigten Botschafter,
Herrn Dr. Johannes Proksch,Le gationsrat,
und
Herrn Dr. Eduard Schiller,Generalkonsul,
zu Bevollmschtigten ernannt und jeden fir sich allein, ohne dass erder Pitzeichnung der fbrigen Bevollnichtigten bed-Urfte, ermgchtigt,namens der Republik Oesterreich das oben erwnhnte Abkommen und damitzusammenhgngende Dokumente zu unterzeichnen.
ZU URKUND DESSEN hat der Bundeskanzler die vorliegendeVollmacht unterzeichnet und mit dem Staatesiegel der RepublikOesterreich versehen lassen.
Geschehen zu Wien, den
Der Bundeskanzler:
BEILAGE Nr. 5
OESTERREICHISCHE EATIONALBANK E n t w u r f
11. September 1958
An die
Oesterreichische Elektrizititswirtschafts-Aktiengesellschaft
Donaukraftwerke Aktiengesellschaft
Ihr Schreiben vom: Zeichen: Unser Zeichen: Wien, 1958
Betrifft: Anleiheabkommen mit der International Bank for Reconstructionand Development, Washington, vom 1958.
(Anleihe - Aschach-Projekt)
Wir beziehen uns auf Ihr obiges Schreiben und erteilen Ihnenhiemit auf Grund des zwischen Ihren Gesellschaften und der InternationalBank for Reconstruction and Development, Washington, in Angelegenheitder Finanzierung des Baus des Kraftwerkes Aschach abgeschlossenenAnleiheabkommens vom 1958 folgende
B e w il 1 i g u n g :
1.) zur Aufnahme eines in verschiedenen WAhrungen auszahlbarenKredites in H6he von
I_ (U.S.A. Dollar
durch Ihre Gesellschaften bei der International Bank for Recon-struction and Development, Washington, sowie zur Gutschrift desAnleihebetrages auf ein Anleihekonto Ihrer Gesellschaften beider Anleihegeberin mit Massgabe
a) einer Verzinsung der jeweils vom Anleihekonto abdisponiertenund aushaftenden Anleihebetrgge mit % p.a.,
b) der VergUtung einer Bereitstellungsprovision in H6he von% p.a. der auf dem Anleihekonto erlegten und noch nicht
in Anspruch genommenen Kapitalbetrhge,
-2
c) der Vergitung einer Provision in Hbhe von % p.a. fV&Pdie allenfalls von der Anleihegeberin gemg'ss Paragraph 4.02der Anleiherichtlinien zu tUbernehmenden Sonderbereitstellungen(sofern keine andore Regelung getroffen wird).
2.) Zur Verfagung aber das auf dem Anleihekonto erliegende Guthabendurch Ihre Gesellschaften gem6:ss den Bestimmungen des gegenstnd-lichen Abkommens.
3.) Zur Ausstellujng von an die Anleihegeberin zu 6bergebende Schuld-verschreibungen in. Hthe des Kapitalbetrages durch Ihre Gesellschaften.
4.) Zur RUckzahlung des Anleihekapitals, bzw. der Teilschuldverschrei-bungen, sowie zur Bezahlung der Zinsen und Nebengebahren in den imAnleiheabkommen genannten verschiedenen Warungen. Die hieftir not.wendigen Devisen werden wir Ihnen gegen Erlag des Schilling Gegen-wertes zur Verfigung stellen.
OESTERREICHISCHE NATIONALBANKPrifungsstelle fUr den Zahlungsverkehr
mit dem Auslande
BEILAGE Nr. 6
REPUBLIK OESTEREICH EntwurfBU\DESMITISTERIUM FUER FINANZEN
11. September 1958
An die
Oesterreichische Elektrizit~tswirtschafts-Aktiengesellschaft
Donaukraftwerke Aktiengesellschaft
Auf Ihr Ansuchen v _ __ , genehmigt das
Bundesministerium ftir Finanzen im Einvernehmen mit dem Bundesministerium
fUr Inneres auf Grund des Paragraph 1 der Verordnung Eber den Kapital-
verkehr vom 12. Juni 1941, DRBG1. I, S,, 328, in Verbindung mit Fara-
graph 4 der hiezu ergangenen Ersten Verordnung zur DurchfUhrung der
Verordnung Uber den Kapitalverkehr vom 9. August 1941, DRGBl. I, S. 515,
und gemNss Paragraph 14, Abs. 1, des Bundesverfassungsgesetzes vom
21. J~nner 1948 hber die Regelung der Finanziellen Beziehungen zwischen
dem Bund und den 6brigen Gebietsk6rperschaften, BGBl. Nr. 45 vom
28. Februar 1948, grunds~tzlich die Ausgabe von Schuldverschreibungen.
Diese Genehmigung wird jedoch an die Bedingung gekniipft, dass die
Internationale Bank fUr Wiederaufbau und Wirtschaftsf6rderung von dem
ihr nach Artikel IV des Anleiheabkommens vom
zustehenden Recht, die Ausgabe von Schuldverschreibungen bis zum
Gegenwert von $_zu verlangen, Gebrauch macht.
1958
FUr den Bundesminister:
BEIIAGE Nr. 7
Bundesministerium f'UrLand- und Forstwirtschaft Wien, am 14. Juli 1958
Zl. 96173/2 - 43992/58
Gegenstand: Donaukraftwerk Aschach; Frklhrungzum bevorzugten Wasserbau.
B e s c h e i d.
Das Bundesministerium fUr Land- und Forstwirtschaft erkl rtnach hergestelltem Einvernehmen mit dem Bundesministerium fur Verkehrund Elektrizit~tswirtschaft das von der
Oesterreichischen Donaukraftwerke A.G.,
geplante Bauvorhaben der Errichtung eines Donaukraftwerkes bei Aschachgemhss Paragraph 83 Abs. 2 Wasserrechtsgesetz als be'erzugten Wasserbau.
Im Sinne des Artikel 94 Abs- 3 Wasserrechtsgesetz wird als FristfMr die Einreichung eines verhandlungsreifen Entwurfes der 31. Ngrz 1959,fUr die Erwirkung der wasserrechtlichen Bewilligung der 31. Dezember 1960festgesetzt.
Durch die Bevorzugungserkl&rung wird der nach den Paragraphen93 und 96 Wasserrechtsgesetz noch erforderlichen wasserrechtlichenBewilligung und den an die Bewilligung zu knIpfenden Bedingungen inkeiner Weise vorgegriffen.
F-Ur die Bevorzugungserklrung ist gemass Tarifpost 105 a derBundesverwaltungsabenverordnung 1957, BGB1. Nr. 48, eine Verwaltungsabgabevon S 750.- binnen 3 Wochen in Stempelmarken dem Bundesministerium fLrLand- und Forstwirtschaft (Wasserrechtsabteilung) zu entrichten.
Begri'ndung
Die Oesterreichische Donaukraftwerke A.G. hat um die Erklhrungihres Bauvorhabens betreffend Errichtung eines Donaukraftwerkes beiAschach als bevorzugten Wasserbau angesucht. Diesem Ansuchen warstattzugeben, da die beschleunigte Ausfihrung des Bauvorhabens imbesonderen Interesse der oesterreichischen Volkswirtschaft gelegen ist.
Das Projekt fUr die Erteilung der wasserrechtlichen Bewilligungist bereits ausgearbeitet und soll noch in diesem Jahr bei der Wasserrechts-beh6rde eingebracht werden.
Die gewbhlte Staustelle in Strom-km 2162,7 liegt am unteren Ende
der kurvenreichsten Engstrecke des 6sterreichischen Donautales. Dieser
Standort ist von Natur aus insoferne zwingend vorgegoben, als nur an
-2-
dieser Stelle das Engtal genligend breit und der Stromlauf hinreichandgestreckt ist, um sowohl Wehr und Kraftwerk als auch die fast 1 kmlange Schleusenanlage samt Vorhhfen unterzubringen.
Der RUckstau des Werkes Aschach wird sich bei der gew~hltenStauh6he 280,0 m -U.A. 40 km weit bis zum Kraftwerk Jochensteinerstrecken und bis in dessen Unterwasser reichen.
Das Hauptbauwerk soll 2 km oberhalb von Aschach errichtet werden.Die Schleusenanlage ist am rechten Ufer vorgesehen und besteht aus 2Kamerschleusen von je 24 Breite und 230 m Eutzl~nge mit anschliessendenVorh~fen im Jd und UW. An das Unterhaupt der Schleusenanlage soll strom-aufwirts das Krafthaus anschliessen, das 4 Turbinen mit einer Schluck-fhhigkeit von je 450 m3/s aufnehmen wird.
Die Wehranlage wird voraussichtlich aus 5 Wehrfeldern von je 24 mLichtweite bestehen.
Das Energiedargebot des Werkes Aschach ist das gr6sste im derzeitvorgesehenen Plan. Die gewhllte Ausbauwassermenge von 1800 m3/s erm6g-licht in Verbindung mit der zugeh6rigen Nutzfallhbhe von 15,3 m einemaximale Leistung von 228 000 kW.
Die erzielbare Jahresarbeit betrhgt rd 1450 iio kWh. Bei derausgeglichenen Wasserfbhrung der Donau betrsgt der Winteranteil derEnergieerzeugung 60.6 Mio kh oder 42 % und der Sommeranteil 844 Mio kWhoder 58 % der Jahresarbeit.
Das Staugebiet der Stufe Aschach erstreckt sich von der Wehrtellein Strom-km 2162,7 bis zum Unterwasser des KW Jochenstein in Strom-km2203,33. Das Mlittelwasser wird an der Wehrstelle um 15,65 m aufgestaut,aus dem bisher rasch durchstr6mten, gewundenen Engtal entsteht ein fjord-artiger Bergsee. Die fir die Schiffahrt bisher gefsbrlichen Str6mungs-verhhlinisse - besonders in der Schl6gener Schlinge - werden durch denAufstau vollkommen beseitigt. In Zukunft ist also in diesem Stromab-schnitt ein gefahrloser Schiffsverkehr in Berg- und Talfahrt bei Tagund Nacht gesichert.
Ergeht gleichlautend and:
1.) die Oesterreichische Donaukraftwerke A.G. in Wien I.,Hohenstaufengasse 6;
2.) das Bundesministerium fUr Verkehr und Elektrizit~tswirtschaft,Sektion IV, Wien I., Schwarzenbergplatz 1;
3.) das Bundesministerium fr Verkehr und Elektrizitgtswirtschaft,Amt fur Schiffahrt, Wien I., K~rntnerring 8;
-3
4.) das Bundesministerium fUr Handel u. Wiederaufbau, Abteilung 5,in Wien I., Regierungsgeb~ude;
5.) das Amt der 0.0. Iandesregierung in Linz;
6.) die Oesterreichische Elektrizitgtswirtschafts - A.G. (Verbundge-sellschaft) in Wien I., Am Hof 6;
7.) die Bezirkshauptmannschaft in Eferding, 0.0.;
8.) die Bezirkshauptmannschaft in Rohrbach, 0.0.;
9.) die Bezirkshauptmannschaft in Sch~rding, 0.0.
FUr den Bundesminister:
Dr. H a r t i g
FUr die Richtigkeitder Ausfertigung:
H e i 1 i g t a g
BEIIAGE Nr. 8OESTERREICHISCHE NATIONALBANK
Direktorium E n t w u r f
Wien I/i, Postfach 11. September 1958
An das
Bundesministerium fir Finanzen
Abt. 15B
Wien I
Johannesgasse 5
Betr.: Weltbankkredit - Aschach Projekt
Zur Zuschrift vom , mit welcher uns die
Entwirfe des Anleihe- und Garantieabkonmens betreffend einer seitens
der Oesterreichischen Elektrizitgtswirtschafts Aktiengesellschaft,
Verbundgesellschaft, und der Donaukraftwerke Aktiengesellschaft bei
der Weltbank aufzunehmenden Anleihe im Gesamtausmass von U.S.A.
Dollar __ illionen iUbermittelt wurden, erlauben wir
uns zu bemerken, dass die Oesterreichische Nationalbank gemiAss den
f-Ur sie geltenden gesetzlichen Bestimmungen - Paragraph 47 ff., National-
bankgesetz - weder Anleihen aufnehmen noch Garantien oder sonstige
Sicherstellungen fUr Anleihen gew&hren darf. Wir stehen aber nicht an
zu erklgren, dass f-ir den Fall als bei einer ge~nderten Rechtslage
doch Sicherheiten irgend welcher Art zu Lasten des Verm6gens der
Nationalbank bestellt werden sollten, dann die Bestimmungen des
Artikel III, Sektion 3.01, Absatz 1 des Garantieabkommens Anwendung
zu finden haben.
Direktorium
der
Oesterreichis chen Nationalbank
Rechnungshof Beilage Nr. 9
der E ntwurf
Republik Osterreich November 12, 1958
Es wird hiermit besttigt, dass die Gesamtsumne aller Anleihenund Garantien, die seitens der Republik Osterreich auf Grund des Bundes-gesetzes iiber die Aufnahme von Anleihen in fremder Whrung (Auslands-anleihengesetz) BGBl. Nr.239 ex 1958 aufgenommen bzw. gegeben wurdenunter BerTicksichtigung der vorgesehenen Garantie seitens der RepublikUsterreich fUr eine Anleihe in der Hbhe von _ WortenMillionen USA Dollar oder des Gegenwertes hievon in anderen WVhrungen,die seitens der Internationalen Bank fdr Wiederaufbau und Wirtschafts-fLrderung der Donau Kraftwerke Aktiengesellschaft (Aschach Projekt) undder 6sterreichischen Elektrizititswirtschafts Aktiengesellschaft (Verbund-gesellschaft) gewhhrt wird und unter BerUcksichtigung der Investitions-anleihe der Republik 6sterreich 1958 auf dem amerikanischen Kapitalmarktin der Hbhe von - in Worten hillionen USA Dollar(External Sinking Fund Dollar Bonds 1958), die auf Grund gesonderterAbmachungen mit den Investitionsbanken Kuhn, Loeb u. Co., Ladenburg,Thalmann u. Go. u.a. aufgenommen wird, den im Auslandsanleihengesetzfestgesetzten Betrag von 25o,oooooo..- - in Worten zweihundertfunfzigMillionen USA Dollar nicht nIbersteigt.
Es wird noch hinzugefigt, dass der Gesamtbetrag, fLr den dieRepublik Usterreich die Garantie gegeniiber der Internationalen Bank ftrWiederaufbau und Wirtschaftsf6rderung zu libernehmen gedenkt, unabhingigdavon, in welchen Teilbetr~gen und wann der Kredit von den beiden obengenannten Gesellschaften tats~chlich in Anspruch genommen wird und derGesamtbetrag der oben erwahnten Investitionsanleihe 1958 der Republiksterreich auf dem amerikanischen Kapitalmarkt in den im Auslandsanleihen-
gesetz festgesetzten H6chstbetrag von 250,ooo.ooo.- - in Worten zwei-hundertfUnfzig Millionen USA Dollar unmittelbar mit dem Tage der Wirksamkeitder getroffenen Abkommen eingerechnet wurden.
Wien, am 1958.
Der Pr~sident:
FoAm No. 26F5-58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
INCONING WIDE
DATE OF WIRE: NoM ER 11, 1958. 19116 ROUTING
TO:. pOEN, INTE'ATIONAL BANK ACTION COPY TO MR. F(XTEI
FR: REON S T &INFORMATION COPY TOFROM: VIENNA
Decoded By
TEXT:
IMRM LTfLTEN DEPSCHE BETREFFD RECHTSGUTACHT GAfA3NTIEABK0ISJ
'ROJENT ASCHACH 306 TZILE ICH MITI WUERDE UNEWAREERWIS DUH
DIE GESETZGEBENDEN EOERPERSCHAFTE DAS DEISWEMNGS RM
GEAMDERT WERDE, DASS DIE BESTD4KUN D ABSATUS 306 NIWIT R
WAUN, BLIEBEN DOCH DIESE BESTD NGE FUR D33 REFULIK E EE
IJBSCIRR WIRKSAM, ALS SE FUER NACHTEIIR, DIE AUS DER RICHTERFELIM DR
WELMBANK ENTSTEHEN SOLLTE, EINZUTRETEN HAT.
HIT DIESM HINWEIS BUABSICETIGE ICH DAB RECHTSUTACHTEN ZU ER EN,
FALLS SIE DANIT EINVERSTANDEN SIND. EU BEGRUENDUNG WEISE ICE NOCR
DARAUF HIN, FALlS DIE ANIXIHE DURCH EINE FAISCIE PREISPOLITIK NOTLEIDEND
WERDEN SOLLTE, IN DIESEN FALL DIE REFUBLIK CSTERREIH EEN DEN KAPITAL
UND ZIMENDIENT AUF GRUND DER GARAMTIE ZU ERFULZ HABE.
HERZLICNE GRESM
R. KASTER
DUPLICATE
FORM No. 26(5-58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
INCOMING WIRE
DATE OF WIRE: NW 10, 1958 ROUT ING
TO: _m ACTION COPY TO N _.pan
FROM: W M INFORMATION COPY TO
Decoded By
TEXT: LAW CONCMg LM I FCIGN CUREIES HU BE PIM BI
TO-DAY UKR U LCT 239
DUPLICAT
November 10, 1958
1r. Franz Y. Oppenheimer1828 JefforBon Place, N.W.Washi7ngton, D.C.
Dear Yranzt
Enclosed please find the latest drafts of theLoan and Guarantee Agreements and the various sidedocuments for the Aschach Project, as well as a copyof iVr. hassner's Lueworandum on legal investment require-ments in Germany. I hope to conLplete the translationof the uemorandum within the next few days and will sendyou a copy.
There is also enclosed separately an aaortizationschedule for a loan of -25 million with a maturity of 25years and based on an interost rate of 6%.
Still to be done is the Bank's letter agreeingto the waiver of the negative pledge clause for theBerliner Handelsgesellschaft loan. I think we shallhave something satisfactory on this in the next fewdays.
With kindest regards,
Yours sincerely,
Douglas J. Fontein
D.TFontein:ea
November 10, 1958
Dr. Rudolf StahlGeneraldirektor6sterreichische Elektrizit-tswirtschafts-Aktiengesellschaft (Verbundgesellsehaft)Wien IAm Hof 6Austria
Dear Dr. Stahl:
I enclose two copies of the draft Loan and Guarantee Agree-ments dated November 6, 1958, together with copies of the various
side documents. The draft Loan and Guarantee Agreements differ in
six minor respects from the drafts dated November 5 which I gave toDr. Hermann in my office. The differences occur on pages 13, 15 and
21 of the Loan Agreement and on pages 2 and 8 of the Guarantee Agree-
ment, and are marked in red. They are not changes of substance butrather corrections which were found necessary upon a careful readingof the documents. I would appreciate it if you would inform me that
these changes are agreeable.
There is also enclosed separately an amortization schedule
for a loan of $25 million with a maturity of 25 years and based on
an interest rate of 6%.
I am also sending copies of these documents to Dr. Teufenstein,Dr. Kastner, Dr. Mosbauer and Dr. Wagner.
According to present plans, the Loan and Guarantee Agreements
and the side documents will be signed in New York on Tuesday,December 2. The various documents to be signed by the Verbundgesell-
schaft and the Donaukraftwerke will be prepared here and signed byDr. Platser on behalf of the Verbundgesellschaft and the Donaukraft-
werke. For this purpose we should receive as soon as possible the
powers of attorney and extracts of the Handeleregister referred to
on pages 4 and 5 of my memorandum of things to be done dated Septem-ber 12, 1958, a copy of which was sent to Dr. Burgemeister. In the
-2-
forms of these powers of attorney, shown in Beilagen 2 and 3 tothis memorandum, the name of Dr. Kamitz can now be deleted sincehe will not be in New York for the signing on December 2.
With a view to the printing of the Loan and Guarantee Agree-ments I shall also appreciate it if you could let us know as soonas possible whether the powerhouse at Aschach will be equipped withfour turbines with a capacity of 72,000 kw or five turbines with acapacity of 57,600 kw, and whether there will be four 90,000 kvatransformers or five 72,000 kva transformers.
With kindest regards,
Very truly yours,
Douglas J. Fontein
DJFontein:ea
The World Bank Group
Record Removal Notice ArchivesRecod R mova Noice& Records Management
File Title Barcode No.
Electric Power Project - Aschach Power - Austria - Loan 0213 - P037355 - Negotiations - Volume 1 1516825
Document Date Document Type
November 10, 1958 Letter
Correspondents / Participants
To: Dr. Ernst WagnerFrom: Douglas J. Fontein
Subject / Title
Austrian negotiations
Exception(s)Attorney-Client Privilege
Additional Comments
The item(s) identified above has/have beenremoved in accordance with The World BankPolicy on Access to Information or otherdisclosure policies of the World Bank Group.
Withdrawn by Date
Vlada Alekankina November 13, 2018
Archives 01 (March 2017)
Ft LES November 10, l9%8
i Collier
MeetirE with Ftepresentatives of the 3erlineriarndelgesellschaf
1. A meeting took place aL 10:30 a.m. on IedY'sday, 2ctober 22 betweenrepresentatives of the Bank, the Austrian Government, the BerlinerHandelsgesellscriaft and the Verbund esellschaft. The following ierepresent:
For the Bank For the Berliner 'iandelsgesellschaft
r Cope Dr. Dietrich Kassnerr Lejeune Mr. Zacharias (La yer from ew York)
r. Diamondfr. Collier
Mr. Fontein
For the austrian For the VerbnmdgeelslschaftGovernment
Lr. Teurenstein ;r. StahlAinistry of Dr. Ko11ikerFinance Mr. '. )ppenheimer
Dr. Plan, Austrian
2. This meeting as arran1ed in order to discuss a proposal that theBerliner handelsgesellschacv make an issue in Germany for the Verbundgesellschaftwhich would be secured by a 3led65 of reve.-ues from a power export contractwhich the Verbnndgesellschaft would arrange with a German or Swiss powercompany. This would only be possible if the Bank were to waive its rights underits negative pledge in Loans 148, 149, and in the forthcoming Aschach Loan,to share equally in the security. riginally, the proposal had envisaged anaustrian %vernment guarantee in addition to the pledge, but the Bank had
indicated that it would not waive its rights in -ucb ci'cumstaces and theaustrian Government had also stated that it would not be prepared to giveits guaravtee to loans having specific security. The erliner Bandelsgesellschaft
as nevorthe ess still anxl us to arrange an issue even without a Governmentguarantee and had therefore suggested that the gurantee should operate onlydur g t s a tial 'er, (d of erhaps 5 years before the power contract be-
came effective. The Verbundgesellschaft and the '71 had wighed to discuss
th ' 'pr ~h with the Bank and Dr. Kassner had come to Washington for this
purpose.
3. after welcoming Dr. saner, Mr. Cape explained that the Bankts in-
trest &i this tiroblam arose not from its concern with the security of its
loans to the V rbundgesellschaft but froa its desire to see established a
tiv 2fv 1- -Yt v
sound pattern off internatioial 1eairs. In the !Sank's opindo s ue a pat-torn S ouli be on the basis of negative ledges s Ce :led os of p sitivesecurit. vould be ikht to lend t: un or 2h. coali U U s distine-tions between dLettors and creditors in the long run. -he ank believedtherefore that s~ecifie security shoulV be av4deT whe-evar -3s9'ble.
4. Dr. K(aener thc' g'ave a doncri-tion of 21e nowt Cnr-ir capital4Larket. 1_e tinguished four soutrces of long-term oney:
(a) Mortgage aanks(b) Pu ii [ ens i o fund s and insuran ce irr ti tut ion(e) Private insurance costanies(d) The open market in general
For each off these, other t' n the last, t ere are legs. regutions 'dhfchgovern the investment of their funds. Dr. Kassnor gave an account ofthese regulations and agreed to prop're a memorauim for the T'ank settingthem forth in detail (so. attachment). Iie explained that, without ans igrtaent of' rev nue s fa orman Tr', the firset 4 hree sources of capital
given above could not be tepped sf re the issue would not receive thencssry aTrevs' off the Mr- n ervitory authorities. '% that eventth. amount of the loan would have to be very much smaller. Dr. Kassnerthought DX 50 million ight be poss'ble without an aseigarct but ho couldnot state definitely that the BUG would go hadwith an I asue in thoseeircuinstsneea. The tAPl syndicate included credit t-stitutiors of all kindsand they were ready to make a first issue of DM 100 nd ho;.i eventuallyto lend DX 300 million, a
5. Tn re-'ly to s ,uestion about the compoeiti on of the P110 syndicate,Dr. Kassner said that it oonsisted of the mayerische Hyaotheken undMech &bnd, the Payerieebe Vereinsberk, the Payerisehe Staatsbrnnk, theMdideuts che Codenkredit and the Airtembhurger (G1rosentrale. Although theseare a)' in moutherr flormny they have eonnactions over the whole countryand the money will therefore be obtained from all parts of Vestern Germny,
ar Usner s- very enutious when asked whether he could ay what pro-portioens of the total issue the varioaus typos of investors would take.
He eught reob ly 757E would go to iridtutional inve tore under groups,(a), (b), and (c) in parajrap~h 4,.
6. Dr. Teufenstein asked whether the Geron issue would be likelyto affect the r'roseets for the sale of the Austrian Government's dollarissue in Germany. Dr. Kasener said he was sure that it would not andthat, n any evont, the BHG could wait until January.
7. Mr. Cop:e thanked Pr. Kasner for his exposition of the situationin Germany and said that it held implications going beyond the I edateproblen of the loan to the Verbundgeselschaft. It bore on the wholequestion of bow far foreign borrowers mg. t, in the future, expect toobtain long-term ca ia3 from Germny.
8. At another meeting on the following day Mir. Cope informed Dr. Stahlanid Dr. Kassnar that the Dank would agree to waive its rights under then g tivo ' 'edge in respect of the first PM 100 million lban, 'rovided thatthe Government guarantee was terminated w~hen the pledge cane into force.The Bank would provide Dr. Stahl with a statement setting forth its position.
JHolIe r :m" a Attacnc~
November 10 , 1958
Dr. Walther KastnerWien 9Perstelgasse 1Austria
Dear Dr. Kastner:
I enclose copies of the draft Loan and Guarantee Agreementsdated November 6, 1958, together with copies of the various sidedocuments agreed upon during the negotiations with the Austrian
delegation, and a copy of Loan Regulations No. 4 of the Bank dated
June 15, 1956. I also enclose separately an amortization schedulefor a loan of $25 million with a maturity of 25 years and based onan interest rate of 6%.
In addition to the various matters to be covered in your
legal opinion, as set forth in my memorandum of September 12, Iwould also ask you to cover in particular the provision of Section
3.06 of the Guarantee Agreement which deals with the rate covenant.
The phrases "incurred within the limits of prudent business manage-ment", "taking into account both sound public utility practices and
the maintenance of stable economic conditions within the territories
of the Guarantor" and "all being in accordance with the provisions
presently set forth in the Preisregelungagesets 1957 (Federal Law
Gazette, No. 151 of July 11, 1957) of the Guarantor" were insertedat Dr. Teufenstein'# insistence in order to avoid any conflictbetween this covenant and the Preisregelungsgesetz 1957. Dr.
Teufenstein assured us that these pbiases, and particularly thelast one, would not prevent the Austrian Government from givingeffect to this provision at any time in the future even if at that
time the Preisregelungsgesetz 1957 had been materially amended oreven abolished. We would appreciate it if your opinion on the
Guarantee Agreement would specifically deal with this point.
With kindest regards,
Very truly yours,
Douglas J. Fontein
DJFontein:ea
DR. RUDOLF STAHL WIEN i, November 10,1958AM HOF 6
GENERALDIREKTOR DER OSTERREICHISCHEN TEL.: 63-07-71ELEKTRIZITXTSWIRTSCHAFTS-AG.
(VERBUNDGESELLSCHAFT)
Mr.
Davidson Sommers
Vice-Vresident of theInternational Bank forReconstruction and Development
W a s h i n g t o n 25, D.C.
1818 H Street N.W.
Dear Mr. Sommers:
Back in Vienna I wish to thank you, also for
Mr. K6lliker, for the kind receiving in Wkashington.
The negotiations which according to their feature
were not always easy, came to a good end thanks to the sen-
sible bearing of the managment and executive staff. Certainly
a positive perspective for the development of the Austrian
Power Industry has been opened for the next years.
I should be very pleased to meet you during a
probable trip to Europe here in Vienna and I remain with
kindest regards
Sincerely yours
November 10, 1958
Dr. Wilhelm TeufensteinMinisterialratMinistry of FinanceWien IHimmelpfortgasse 8Austria
Dear Dr. Teufenstein:
I enclose a copy of the draft Loan and Guarantee Agreementsdated November 6, 1958 for the Aschach Project as agreed upon duringthe negotiations, together with a copy of each of the various draftside documents. I also enclose separately an amortization schedulefor a loan of t25 million with a maturity of 25 years and based onan interest rate of 6%.
I would like to point out that the draft of the enclosedIoan and Guarantee Agreements differs in six minor respects fromthe draft as agreed upon by us during the negotiations and fromthe draft dated November 5 given to Dr. Hermann. These minorchanges are indicated in red and are found on pages 13, 15 and 21of the Loan Agreement and on pages 2 and 8 of the Guarantee Agree-ment. These changes do not affect the substance of any of theagreements but are in the nature of corrections which were foundnecessary upon a careful reading of the documents. I would appre-ciate it if you would inform me that these changes are agreeable.
With kindest regards,
Very truly yours,
Douglas J. Fontein
Enclosures
DJFontein: ea
November 10, 1958
Dr. Hans MosbauerGeneraldirektorasterreichische Donaukraftwerke
AktiengesellschaftWien IHohenstaufengasse 6Austria
Dear Dr. Mosbauer:
I enclose two copies of the draft Loan and Guarantee Agreementsdated November 6, 1958, together with copies of the various side docu-ments. The draft loan and Guarantee Agreements differ in six minorrespects from the drafts dated November 5 which I gave to Dr. Hermannin my office. The differences occur on pages 13, 15 and 21 of theLoan Agreement and on pages 2 and 8 of the Guarantee Agreement, andare marked in red. They are not changes of substance but rathercorrections which were found necessary upon a careful reading of thedocuments. I would appreciate it if you would inform me that thesechanges are agreeable.
There is also enclosed separately an amortization schedulefor a loan of $25 million with a maturity of 25 years and based onan interest rate of 6%.
I am also sending copies of these documents to Dr. Teufenstein,Dr. Kastner, Dr. Stahl and Dr. Wagner.
With kindest regards,
Very truly yours,
Douglas J. Fontein
DJFontein: ea
(not for public use)
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
OECLASSIFI I)
FOR MAY 18 2 CONFIDENTIAL
EXECUTIVE R 58-116
DIRECTORS' (For consideration by theMEETING Executive Directors on
November 13, 1958)
FROM: The Secretary November 7, 1953
PROPOSED LOAN - AUSTRIA
There is attached for information a report
"Appraisal of the Aschach Hydro Power Project -
Austria'.
The Preliminary Report of the President (R58-112)
on the proposed loan for the project was circulated on
November 6, 1958.
Distribution
Executive Directors and AlternatesPresidentVice PresidentsDepartment Heads
Sec. 58-41o
November 6, 1958
Harold Manheim, Esq.Wachtell Manbeim & Grouf15 Broad StreetNew York 5, New York
Dear Harold:
Thank you for your letter of November 5. Inclosed
please find the latest draft of our Loan and Guarantee
Agreements for the Asohach Project, together with a copy
of Loan Regulations No. 4 of the Bank.
Sincerely yours,
Douglas J. Fontein
Enclosures - 3
DJFontein:ea
November 6, 1958
William J. Shrenk, Beq.Cravath, Swaine & 4ore15 Broad StreetNew York 5, New York
Dear 1ill
Thank you very much for sending me your revised
time table and the new proof of the Prospectus. I have
started to read the Prospectus and hope to give you my
comwents in the next few days.
Enclosed please find a copy of our draft Loan and
Guarantee Agreements for the Aschach Project, together
with a copy of Loan Regulations No. 4.
Sincerely yours,
Douglas J. Fontein
Enclosures - 3
DJFontein:ea
(not for public use)
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
DECLASSTFW1T
FOR MAY 18 ?P1hEXECUTIVE WBGA R CONFIDETL
DIRECTORS'MEETING R 58-112
(For consideration by theExecutive Directors onNovember 13, 1958)
FRm: The Secretary November 6, 1958
PROPOSED LOAN - AUSTRIA
The attached Preliminary Report of the President
on a proposed loan - Austria (Aschach Project) will be
considered by the Executive Directors at their Regular
heeting on Thursday, Hovember 13, 1958.
Attachment
Distribution:
Executive Directors and AlternatesPresidentVice PresidentsDepartment Heads
Sec. 58-407
FORM No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(5.58).. . " *
INTERNATIONAL FINANCE CORPORATION
OUTGOING WIRE
CLASS OF SERVICE: NLT DATE: NOVEmBER 4, 1958
TO: ALFRED W. BARTHVICE PRESIDENTCHASE MANHATTAN BANK18 PINE STREETNEW YORK
COUNTRY ( NEW YORK)
TEXT:
Cable No.
UNFORTUNATELY I AM RETAINED WASHIN2TON NEGOTIATIO18 AND
UNABLE TO LUNCH WFITH YOU TOMORROW WILL CALL YOU IN NEW YORK
KOELLIKER
AUTHORIZED BY:
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SIGNATURE: Ch__kd_____D___ _ _ _ _(Signature of individual authorized to approve cable).
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FoRM No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(9- 56)
OUTGOING WIRE
CLASS OF SERVICE: NIGHT IETTER DATE: OCTOBER 28, 1958
TO: KASTERWIEN IxFERSTELGASSE 1
COUNTRY ( AUSTRIA
iEXT:
Cable No.
REUR LETTERS SEPTENBER THIRTY AD OCTOBER TWENTIONE DELIVERED B!
NMBAUER CC0OA DRAFT OPINION INOIUDING PROPOSED GERMAN DECLARATIONS
SATISFACTORY
FONTEIN
Signed: Fontein(Type In last name of sender)
AUTHORIZED BY:
NAME: D.J. n For Use by Archives Division
DEPT: Legal Checked for DispatchSIGNATURE:
o re I idua 3 approve cablej.
DJFontein:eaRIGINAL (File Copy)
(IMPORTANT: See over for guide in preparing Outgoing Wire)
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(iJm No 57
FORM5 48) 57 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
OFFICE MEMORANDUMTO: Files DATE: October 24, 1958
FROM: J. H. Collier
SUBJECT: Austria - Forthcoming Negotiations for Aschach Project
1. The Working Party met on October 22, 1958, to consider certainpoints in connection with the negotiations for the proposed AschachLoan. Present were Messrs. Collier, Spottswood, Fontein, Rutland,and Jentgen.
2. The Working Party considered the following three matters:
(a) Disbursement of the loan. The local expenditure partof the loan could be disbursed either in the same manneras Loan 102 AUA, that is, as a proportion of total localexpenditure, or, as was the case in Loans 148 and 149,by disbursing specified amounts each year. The WorkingParty had a slight preference for the first method butthis would be discussed with the V.G. There would bea separate category for imports.
(b) Tt was agreed that we would not include a clause similarto Section 5.08 of Loans 148 and 149. The clause pre-cluded the V.G. from embarking on any substantial in-vestment outside some defined "Program" without theconsent of the Bank and the Austrian Government. Thereasons which prompted the inclusion of this Section.n the previous loans now seemed less important; inparticular because the V.G.'S rrospects of borrowingfrom other European countries have improved. Moreover,it would be difficult for the Bank to make use of sucha clause without thereby providing the V.0. with astrong argument for another loan from the Bank.
(c) 11. Spottswood suggested that it would be desirableto obtain a statement from the Government agreeing tosome specific rate of return on investment as a goalwhich it would be reasonable for the V.G. to aim at.i- was agreed that a possille procedure would be to senda letter to the Austrian authorities requesting astatemehtof their policy on power rates and at the sametime setting out the Bank's view that the rate returnshould be somewhat above the cost of borrowed funds.
cc: 1Mr. CopeMr. SpottswoodMr. FonteinMr. Rutland
FORM No. 26(5-58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
INCOMING WIRE
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FORm No. 26(5-56) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
INCOMING WIRE
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R EAESENTATE ZWECKS I}URE' DIPEKTEN DETAILIFOPMATION tEREITZ11ALTEN
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FORm No. 26(5-58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
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FORM No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(9-57)
OUTGOING WIRE
CLASS OF SERVICE: LT DATE: OTWER 15, 1958
TO: STAHLVERBUNDNETZVIENNA
COUNTRY ( AUSTRIA)
_XT:
Cable No.
OCTCUER TWENTY SEVEN AGREEABLE TO US FOR NEGOTIATIONS STOP SEPARATE
CABLE FOLLOWS ON BERLINER HANDEIZGESELLSCHAFT PROPCSAL
LEITEUNE
AUTHORIZED BY:
NAME: Michael L. Lejeune For Use by Archives Division
DEPT: Operations, EAA Checked for DispatchSIGNATURE:
(Signature of individual authorized to approve cable).
JHir :fgs :vmcORIGINAL (File Copy)
(IMPORTANT: See over for guide in preparing Outgoing Wire)
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SHII 9NIO9.Lf1O 9Nfl1Vd3~d H1OA HGMf9
October 15, 1958
Dear Bill:
There is enclosed a copy of the Technical Report. As
I explained, this is a confidential version and is subject
to chenge before presentation to the Executive Directors.
Yours sincerely,
J. H. Collier
Mr. W. SobrenkCravath, Swaine Moore15 Broad StreetNew York 5, N.Y.
JHCollier:fgs
Nessre. Spottawood, Canclo, .ontain, Rutland October 15, 1958
J. !I. Collier 7
Forthcoming Austrian Negotiations
We have just received a cable from Dr. Stahl, proposing tobegin negotiations for the Aschach loan on Monday, 27 October andstating th t thi s date has been agreed to by Dr. Teufenstein.
We have informed Dr. Stahl that this date is acceptable to us.
JHCollier:fgs
FoRm No. 26(5-58) INTERNATIONAL BANK FOR RECONSTRuCTION AND DEVELOPMENT -
INTERNATIONAL FINANCE CORPORATION
INCOMING WIRE
DATE OF WIRE: OCTOB&R, 15, 1958 BOUTING
TO:- L RE ACTION COPY TOINTERNATIONAL BANK F REGCONSTUJCTIONAND DEVELOPMENT INFORMATION COPY TO
FMN:VIENNA'WL Decoded By
TEXT:
BETR. IE SOEREIBN VON 3.10 .1958.
EINMERBElMLICH MIT DR .TEUFONSTEIN, DKR IJINEN 0FIZIEIJE MITfl1,TNG
SCHICKT, KRIAUBEN WIR UNS UNSERE VEPKANDIJNGBEREITSCRAFT MIT
DR. TEUFENSTEIN IN WASHINGTON FUEB MONTAG, DEN 07.3KTOER VRZU-
SCHIAGEN.
BESTE GRUESSE
STAhL
ORIGINAL
FoRM No. 59(2. 55)
CROSS REFERENCE SHEET
COMMUNICATION: Letter No. 1
DAT ED: October 10, 1958
TO: Mr. Christian Finne, Danish Mission.
FROM: J. Fajans
FILED UNDER: Luxembourg - Our River project.
SUMMARY: Para. 3.
In this connection, I have taken due note od the penultimate
paragraph of your letter and have talked to Hugh Collier about
the tentative Austrian program. I have the feeling that Austria
takes precedence over Luxembourg as far as you are concerned.
Nevertheless, I may still before leaving here communicate with
you about your future movements.
October 10, 1958
Dear Dr. Wagnert
Thank you very much for sending me a copy of your letter to Douglason the power rate question and also for keeping us in touch with theprogress of the new law. We have sent off the formal invitation to thegovernment and the Verbund to enter negotiations for the loan so that,at the present moment, the question of timing depends on them. We areready when they are. I gather that Kuhn Loeb are now thinking in termsof an issue around the end of November so that it looks as if in anycase we shall be about ten days later than we estimated on our originaltimetable.
I am not sure whether or not I have understood the full import ofyour letter on the power rate covenant. Am I right in thinking thatyour argument is that the Price Control Law simply says that the Ministryof the Interior g determine economically justified prices but that heis not compelled to? Therefore if the government signed a Bank loan agree-ment containing the covenant, it would mean that the ministry of the In-terior would simply not apply Section 3, paragraph 1, but instead thegovernment would apply the new covenant. Thus in effect the Ministry ofthe Interior would undertake not to apply the Price Control Law to elec-tric power. Finally, in connection with your last sentence, the normal
procedure for signing the Loan and Guarantee Agreements would be for the
Ministerrat to approve them and authorize the Ambassador here to signthem on behalf of the government. Would this be good enough to commit
the Minister of the Interior or would he have to give a separate consent,for example? I hope all this is not too glaring an example of the non-
legal mind at work.
Incidentally, I fully appreciate the point of your paragraph 3 but
Dr. Ernst WagnerKarntnerring 10Vienna, Austria
Dr. Ernest Wagner - 2 - October 10, 1958
I don't think it's true to sa that there is "eine mit dem vorgesehenenVertrag verbundene Erhohung der Stromtarife." The proposed covenantcontains a reference to a reasonable return on the equity ("Igenmittal")so that it would first be necessary to interpret what is reasonable.
With best wishes,
Sincerely,
J. H. CollierDepartment of Operations
Firope, Africa and Australasia
JHCollier :vmo
cc: Mr.Fontein
FORM No. 61(354) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CONFIDENTIAL,
MA STAFF LOAN COMMITTEESLC/M/730
October 10, 1958
inutes of Staff Loan Committee Meeting held onFriday, September 26, 1958 at 11:00 a.m. in Room 1005
1. Present:
Mr. Davidson Sommers, Chairman Mr. L. NurickMr. S. Aldewereld Mr. P. G. RammMr. M. L. Lejeune Mr. R. J. GoodmanMr. G. N. Perry Mr. D. AvramovicMr. I. P. H. Cargill Mr. H. G. A. Woolley, Secretary
In attendance:
Mr . E. B. Arnold Mr . J. JentgenMr. K. Bohr Mr. S. LipkowitzMr. L, Caicio Mr. M. PiccagliMr. J, 11. Collier Mr. A. D. SpottswoodMr . J. d!0illiamson Mr. E. SymondsMr . J. Fillili Mr . A. WenzellMr. D. J. Fontein
2. Austria
The Committee considered Memorandum SLC/0/973 on the proposed loan forthe Aschach project, and
AGREED that
(a) subject to assurance from the underwriters that they are preparedto go ahead with the proposed operation, representatives of theGovernment and the two power companies should be invited to cometo 'iashington to negotiate the proposed loan for the Aschachproject;
(b) a loan of 25 million would be aporopriate but a final decisionon the amount should be taken only when the Bankts commitment, ifany, for the standby is clear;
(c) the Bank should hold further discussions vith the underwriters onthe question of the form and amount of a standby agreement;
(d) the proposed loan should be made jointly to the Verbundgesell-schaft and the Oesterreichische Donaukraftwerke;
(e) the Government should be informed that the Bank will require anundertaking from the Government to establish rates which willpermit the Verbundgesellschaft and its associated companies toearn enough revenue to cover their operating costs, depreciationor contractual amortization ( hichever is greater), and a reason-able return on their equity;
-2 - SLC/M/730
(f) as in the case of previous loans to Austria, the proceeds of theloan could be used to meet local expenditures as well as the costof imports, subject to adequate provision being made for competi-tive bidding.
3. The meeting adjourned at 12:50 p.m.
;r, H, ^, A. Woolley O9toer 7, 195
A. L. L (jeune
Austria - Tnvitation to Segotiations for New Loan
I u-ggest the follewing be tirtulated to the ecutive Directorsfor iformt i on:
"The fak has i-vited the Austrian Government, the Verbundgesellschaft(Austrian Publi c Fewer Company), and the Donaukraftwerke (Danube PowerCompany) to send representa-ives to ashington for negotiations fora loan to be made for the Aschach hydro-electri c power project. Ttis profzosed that this loan be made simultaneously wi h a public bondissue by the Austrian Government in New York which is axpected totake place around the end of November. lf of the proceeds of thebond issue are expected to be use for the Aschach project and the re-minder for investment by the Government in the railway, highway andtelephone systems."
JHCollier:mea
IL\TERINATIL aA Ah, "U' E""OhAMI .EVCLC? DELT
TO: Files October 7, 1958
FROL: S. R. Cope
SUBJECT: Austria
1. Lr. Liller and I met with Er. N. Samuels on October 3, 1958,
2. Er. Samuels said that the timetable proposed by Dr. Teufensteinwas as follows:
October 20 kLlon.j Or. Teufenstein arrives in vashington fornegotiations.
30 ( Thur.) iiegistration statement filed.
hovember 19 (.ed.) Offering.
3. This, r. Samuels saia, was impracticable since presumably theBank would not be ready for giving the green light on October 30.He therefore proposed the following alternatives:
h ovember 6 (Thur.) Filing
26 ('ed.) Offering
or November 13 (Thur.) Filing
December 3 (Wled.) Offering
This, however, appeared to conflict with Dr. Teufenstein's plans.
4. In response to(frly cuestion, hr. Samuels gave the followingguesses about the placing of the public issue:
Austria 8 3 millionSwitzerland 3 "Germany 10 "Rest of Europe 4 "U.S.A. 5
O__million
If the bonds placed in Germany gave holders the option of paymentin marks, it might be possible to place as much as 15 million.The placing oL 03 miliion in Switzerland depended on a settlementof the Danube Save and Adriatic iiailway bonds. Dr. Xa-amitz was pre-pared to negotiate on a bilateral basis.
5. asked LIr. Samuels whether he had given thought to the natureof the standby arrangement proposed. lie said that Dr. Stahl had at
-2-
first opposed the idea of a standby on the ground that it wouldreduce the amount of the Bank's loan. Lr. 2amuels, however, hadQenied tmis "'nd Dr. Stahl luad been reassured.
6. Lr. Samuels said that he wanted a standby only if it wereunlikely that the Lank would be called upon to take up its commit-ment. I saiu that this .,as the Lank'is view too.
7
-
SRCope-prn
cc: hr. J. B. Knapp.r. D. Sommers
11r. L. L. Lejeune
(not for public use)
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
DECLASSIFM 1 )
MAY 1 82018CONIDEIAL
W'BG ARCW< SecN58-180
FROM: The Secretary October 7, 1958
LOAN 1EGOTIATIONS - AUSTRIA
The Bank has invited the Austrian Government, the Verbund-
gesellschaft (Austrian Public Power Company), and the Donaukraft-
werke (Danube Power Company) to send representatives to Washington
to negotiate a loan for the Aschach hydroelectric power project
(R 58-87). It is proposed that this loan, if approved, be made
simultaneously vith a public bond issue by the Austrian Govern-
ment in New York which is expected to take place about the end
of November. Half of the proceeds of the bond issue are expected
to be used for the Aschach project and the remainder for invest-
ment by the Government in the railway, highway and telephone
systems.
Distribution:
Executive Directors and AlternatesPresidentVice PresidentsDepartment Heads
Sec. 58-388
Foam No. 26(5-58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
INCOMING WIRE
DATE OF WIRE: OCTOBEB T, 19B ROUT ING
T : TERNATIOAlB FOR RECONSTRUCTION ACTION COPY TO M .COLIjKANTA DETE LOP 5,MT
FROM: INFORMATION COPY TO
WIEN Decoded By
TEXT:
AMABLIIG lAW NOT FINALLY GREAT UPON. WILL BE DISCUSSED
AGAIN AT NTXT CABI M4E ETIUG OCTOBER )4TE. AT TRE MOMENT NO
CHANGE OF TIMETABLE NECESSARY
ERNST WAGNER
OR I GI N AL
etober 3, 1958
... .r ........ ....
I zeoc 1etVer wnion we have toJg 8 nt to the Minisar of Fnnea you will a.., the letter stat.s that the Bank is preparui to enter nero-
iet for a loan for the aohaoh projeot ar coneuently I ah.ad liketo invite you .M re. rssentatives of the an) aait erke to @ome to Wahine
s for this r . W* s get ate tober 20 as aS previoulyagred in the ~rois tonal timetable ; reparau in eoperationa with the undr-
rrgvernment bonss ue It wy well be, hover,aa later date will be r~- coneint. I ex*ot DJr. Teuf ntein will
yir o o~f his plan in this ootmeotion.
Yuwill alao notioe the rearke eoneorring a rate eovenaut in ourletter tG the MInitr. The typea ovenant we have in sind would oovermters imilar to thoa. includ.d in the undertaing in the aide rett
on& this subject to which U.e Verb imge II. ohaft nas aled sgreed on theocaion of previsa 1 a. While, thereor'e, it would be no new dertur.
for the Vnrbunig.ellwehft, it wouda represent an additIor~el Iamrierttoxingm the gar e of the gternnt.
.1 hae also just receiveai your let ter of sept mer 20, cocring theuerlner arinle~ellsnaft. I shalU writ. another letter %o you sbortly
On this matter but because of its inportante, D fear it will not be pysiU.o to give you a reg~y uratii we nave had tine to eonader the matter in
a its iwg lLcationm.
I look forwsr to aeetiug you main irn easneto.
i beVt plrtonal wiahen,
Linerely yous,
cha.l m, L.ej- uaitarit DIrector of Operations
aro A, rioa emi Aurtralasia
4a sof Fenn, r tria
40 i ara. 0op*, Ytntein/Gancio, SpOtt5WOd, Rut1&nd
JH~Lojier vac
tctober 3, 195t
w 7r Feu enstoin
I atm ~ enclosi, for :our inf orgten a copy ov a e ter ton~tr Kai rhich iwe h - oaysn to ncna. *s sall
be na py to hear i'romn you ih rear t your pans ior visitin;;azh ir tn o tU at : ns ad oe: oo rar d to seeirn: youar t ~th
Xours ainerly,
Aseitat ~irector oV oper tionubrop0, f rioa and Australasia
Alternal if *r rnordele, tion ofc AustrIaFund-sak et ns 19
cost a oo
ser ~r. ~inister:
The ~1a ~k has now had an ooportiity to consider the f dings ofthe Taission which visited Austria last ulust in ordr to ezuin thefincial r rmento for inivestMnt in the electric powr inLdustryand to appraise projects whirh ht be ritable for a dank loan.
After studn the Inan ial position of the Verundgesellcha taid its future construction progran, we elieve tat the Auchach projact wou1 be an av ropriate projecA for a 1 ak loan and we are prepadyto enter negotitions with representatives of y r overnnt aid ofthe Verbundgesellchaft and onaukrAftwrke for Ais purpose.
In our o ner ion o :inancal position o the Va-rUd-gesellsehaft we paid particul ar attention to it. future earningsprospects In v'iew of the iportunoe of this aatter we shall wish toimclude in the ioan and Juarantee greem.nts provisions Which willensure rates that will perit the earnings of the Ie rrundesellschaftand its associated c xPaNe8 to be niaintaied at a level sufficient tocover opera in, costs, adequa e depreciation or contractual amortisationwhichever is the greater, interes ehar-us and a reasonable return onthe qeqi'ty ("KigenMi rtel"). The details of this provision can, of course,be discussed durin. the negotiations in ahiagton.
uiur p0oposal to enter re otiations is based on the assuaption thatour loan woul be aado siwultaneously with a governwent bond issue in
ew ork, 'orin e reCnt discussions in Vienna, a provisional time-tale was p ep in cooperaion w bn reore7ntatives o: the under-writers which enyisa ed t!hi a dple aron representing the Austrian'uvovrn-ent aid the power coapanis wuld arrive in ashington onOctober 20th both for ie x :otiations on the sank loan and for
r. einhard .aitinister of inance
ViennaAustria
. '0 t o c 3
of ld to w te oa m arto I an
was ~ ~ ~ ~ 4 6vtA Vatu jnm dtinwihneah anim
01 t va 00 4 Lid ax tt4 iT e Aap t4o I" not of acue to**
_101 1 - T j ot" !t~ t lit 2nW' itf
74 vy w tO ,tw to rw ny'r ML v
7o all w at ivlmn *1 1 a wol * L1to4 t ~t
>t I. 01 viv pil wr. ttroaaa it Q '
" II *it I ir0,3W11 0ro.7n
e~~~ Atn af O2swo e w n 011Cr ifh ve coulds not 3n M0
vs& sic 0. iJ 1 MIAL on 10 4v-n
-o t a mv..A Vnt a ' r . we
A n o i r a M w e o r i y o m m t c o poi i a~s
S ri wao 0a "ill an4 I v n er Q'tWQ06 aynto towneeirDO in Aeni 1 0o "an cur-
!wo - d Cox U oey JAW A n o! s nov -wd o fr" f-tA isar n n-c tc dl tonaqd
FORM No. 75 INTERNATIONAL BANK FOR(5-58) RECONSTRUCTION AND DEVELOPMENT
Date
ROUTING SLIP
NAME ROOM NO.
_ Action Note and FileAppropriate Disposition Note and Return
Approval Prepare Reply
Comment Per Our ConversationFull Report RecommendationInformation Signatureinitial To Handle
REMJ
F rom
Mr. Collier
Room 809Dr. W/Ko
October 1, 1958.
Mr. Douglas J. Fonteinc/o Fund-Bank Meetings 1958Bigyan Ghavan, Post Bag No. 600New Delhi, India
Dear Douglas:
I thank you for your letter of September 26. I read with interestyour account of the Staff Loan Committee Meeting. As to your questionwhether the Government can give its consent to an agreement providinga rate increase of electric current, it is my opinion that the Governmentcan do this in spite of the 1957 law on price regulation, because Section3, par. 1, of this law provides that the Federal Ministry of the Interiormay, in agreement with the principally interested Federal Ministries,determine economically justified prices and compensations for goods andservices subject to official price regulations.
The provision of section 3, par. 2, which you quote, is thereforeonly applicable if the permissive provision of par. 1, section 3 isapplied.
At this time I am unable to answer the question thether the Governmentwill conclude the contemplated agreement in spite of the rate increasetherein implied.
There seems to be no ground for being concerned with the possibilitythat parliamentary approval might be necessary under Art. 50 of the AustrianFederal Constitution because the contemplated agreement does not purportto change the law and in particular it does not change the existing 1957law on price regulations. In my opinion the government in signing theagreement would do no more than make use of its discretionary power withinthe framework of the price regulation law. Furthermore, it should bepointed out that the Minister of the Interior, who, under section 3,par. 1, is emrowered to determine the price and compensation for goodsand services subj ct to official price regulations, as Member of theGovernment,(had to sign the agreement.
Yours...
cc: Mr. Hugh Collier
TRANSLATION SECTION
Translated From: German 10.7.58 By: I&: rr
i.Oktober 19
Dr.w/Ko.
Mr. Douglas J. Fonteinc/o 01UD-IiANK MEETINGS 1958Jigyan Bhavan, Post Bag No. 6oo,
J.ieber Douglas!
Ich danke Dir fur Dein Schreiben vom 26.vM. und
it Interesse -einen Bericht Uber die Sitzung des
;taff Loan Committee gelesen. Was Deine Frage anln gt,
ob die Regierung einen Vertrag, welcher eine ErhIIung der
tro-itarife vorsielt, zustinmen kdnnte, so bin icI der
Meiiung, dass die Regierung dies trotz des preisregelungs-
gesetzes 1957 nacher n, weil dieses Gesetz in seilnem
3 A tz i vorsieAt dass ds Bundesministerium f Ur
Inneres im EinverehmIen mit den in ihrem Wirkunerei
vorneh lich beruirten undesministerten volkswirtscha tlich
gerechtfertigte Preise und Entgelte fUr die der ehrd-
lichen Preisregelung unterliegenden SachgUter und Listun-
gen etimen kan
Die von Dir zitierte Bestimmung des Absatzes 2 des
vorgenannten 3 kommt also nur dann zur Anwendu1g, wenn
von der Kannbestimung des 3 Absatz I Gebrauch gciacht
wir.
Ob die legierung den vorgesehenen Vertrag trotz der
damit verbuIndeniton Erhdhung der S tromtari fe aischiiiesscxn
wird, ist eine Frage, die ich augenblicklich nicht beant-
worten kann.
)edenken nach Artikel 5o der dsterreiciischen Bundes-
verfassung in der Richtung, dass die Zustimmung des National-
rates erforderlich wdre, scheinen nicht am Platz, da der
OCT 71958
R, D.
-2-
vureehne Vertrag einer getetz ndernden 1nt -I in. 4 a f
weist, insbesondere nicht das bes teliende Preisregelungsgesetz
1957 undert. Meier iuiclit nach adrde diu aederun; ci ab-
schJus ~des Vertr es nur von ihrem Ermessen il aunen des
Pre 0egelungsge eLzes Gebruci machen. Zu erwahnen is noch,
ds der Tulenminister, welcher nach 3 Absatz i die <reise
Und intgeite Iir die der behdrdlichen vreisregeliung unter-
lI~cegedn Sachigatr und Leistungen bestimmen kann, den Ver-
trag ls Mitgie der Regierung unterzeichnen musste.
Mit den besten t rUssen
) e in
2S, K o;;i c Mi an Mr. l h Collir,
FoRm N4o. 26(5-58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
INCOMING WIRE
DATE OF WIRE: SEPTEMBEE 30, 1958 ROUTING
TO:ITENTIONAL BANK FOR RECONSTRUCIT1 ACTION COPY TO .J.HUGH COLLIQAND DEVELOPMENT
INFORMATION COPY TOFROM: jj
Decoded By
TEXT:
NO AGPE T (0UL TA BED ON TEXT OF NEW LAW AT CABINET
MEETING OF TODAY. SOCIALISTS INSIST THAT NECESSITY OF GIVING
PARLIAMENT FULL INFORMATION ON ALL CONTRACTS CONClUDED ON BASIS
OF iAW BE ENACTED IN LAW. NEW AYTTULE FWTE HAS BEEN DRAFTED AnD)
APpROVED BY VERFASSUNGSDIENST AS FOLLOWS DIE BUESEGIERUNG HAT DEM
NATIONAIRAT VERTRAEGE GEMAESS PARAGRAPH I UNITTELBAR NACH IhM ABSCHIUS
UiND UNBES HADET DE TSWIRKSAMKEIT ZUB KENNTNIS ZU BRINGEN DER NACH
MASZGABE D GE EZRNUNGSGESEZES HIERUBER ZU BESCRLIE8SEN RAT.
ACCORDING TO GESCAEFTDNENGSGESETZ, PAPLIAMENT MAY DEBATE SUCH
CONTRACT AkR 1 EIR COW 01510N IT MAY INUIRE ABOUT IT AND IT MAY
IN AN EXTREME CASE DCIAR 1 ITS VOTE OF NO-COI'NFIDJENCE BUT AlSO THIS WOUID
HAVE NO EFFECT ON T1H VALIDITY TOF E CONTRACT CONCLUDED. JAW WITH THIS
SECTION FIVE WILL BE DEALT AT NEXT CABINET M0ETING ON OCTOBER 7.BUNDESKANZLER RAAB WILL SUBSTIThTE FINANCMINISTEE AT THIS MEETING.
ARRANGEMENTS RAVE BEEN MADE THAT IAW WILL BE DEALT WITH BY PARLIANMINT
AT ITS FIRST MEETING ON ABoUT OCTOBR 23. I AM CABLING TE SAME T XT TO
DCUGLAS FONTEIN AND SCORENK. CARDS
ERNST WAGTER
ORIGINAL
FORM NO. 57 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
OFFICE MEMORANDUMTO: Files DATE: September 29, 1958
FROM: M. L. Lejeune
SUBJECT: Austria
After receivig word from Mr. Knapp that he was satisfied for usto invite Austriannegotiations (see his cable to Mr. Sommers from Rome,dated September 27), I got in touch with Mr. Schiff of Kuhn Loeb andasked him if the bankers were prepared to go ahead with the Austrianissue on schedule or whether they would rather we hold up negotiations.Mr. Schiff said he would look into this and call me back tomorrow, Sep-tember 30. Later, Mr. Arthur Oppenheimer of Kuhn Loeb rang me to saythat Mr. Schiff had mentioned my inquiry to him. Mr. Oppenheimer wantedto know whether the Bank was still thinking in terms of inviting negotia-tions to open on October 20. I said yes. I told him we wuld not wishto invite these negotiations at this time if there were any indicationfrom the bankers that they could not put out the issue on schedule.Mr. Oppenheimer said that he thought everything was going to be all rightand according to schedule, but he did not wish to give me a firm answeruntil he had discussed it with some of the Kuhn Loeb partners. Eitherhe or Mr. Schiff would call me about it tomorrow.
cc: Mr. CollierMr. Sommers
NLLejeune:amg
The World Bank Group
Record Removal Notice ArchivesRecod R mova Noice& Records Management
File Title Barcode No.
Electric Power Project - Aschach Power - Austria - Loan 0213 - P037355 - Negotiations - Volume 1 1516825
Document Date Document Type
September 26, 1958 Letter
Correspondents I Participants
To: Dr. Ernst WagnerFrom: Douglas J. Fontein
Subject / Title
Staff Loan Committee meeting
Exception(s)Attorney-Client Privilege
Additional Comments
The item(s) identified above has/have beenremoved in accordance with The World BankPolicy on Access to Information or otherdisclosure policies of the World Bank Group.
Withdrawn by Date
Vlada Alekankina November 13, 2018
Archives 01 (March 2017)
CARLW PAINHTER rA AL AAII .. M- HOYT A. MOORELEONARD ADKRINS CRAVAT H, SWAIN E & MOOREMAURICE T. MOOREDONALD C. SWATLANDBRUCE BROMLEY 15 BROAD STREETRDSWELL MAGILLA. .HENDERSON
30CARLYLE E. MA HANOVER 2-3000
EDWARD S. PfNNEY NEW YORK 5, NYROSWELL L. GILPATRIC
THOSMAS A, HALLERAN CABLE ADDRESS: CRAVATH, N.Y.ALBERT R. CONNELLYL. R. BRESLIN, JR.BENJAMIN R. SHUTEGEORGE B. TURNERFRANK H. DETWEILERGEORGE 0. TYLERJOHN H. MORUEHAROLD R. MEOINA,JR.
FREDERICK S. BEEBECHARLES R. LINTONWILLIAM B. MARSHALLRALPH L.MCAFEEROYALL VICTOR,JR.JOHN N. CALOERWOOO
ALLEN H. MERRILLHENRY W. 'E KOSMIANJOHN O.CALHOUNALLEN F. MAULSBYSTEWARD R. BROSS, JR.EDWARD N. NJAMIN September 26, 1958
Dear Hugh:
There is enclosed herewith a copy of the first
proof of the prospectus for the proposed Austrian public
financing. I am also sending a copy to Douglas Fontein
at his home.
Yours sincerely,
J. H. Collier, Esq.,International Bank for Reconstruction
and Development,1818 H Street, N.W.,Washington 25, D.C.
Encls.
18
FORM No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(9-57)
OUTGOING WIRE
CLASS OF SERVICE: NLT DATE: SEPTEMBER 26, 1958
TO: KNAPPHASSLER HOTELROMA
COUNTRY( ITALY)
HXT:
Cable No.
IWO RE AUSTRIA SLC APPROVED ONE PROPOSAL BANK LDAN FOR ASCHACH PROJECT
OF UP TO TWENTY FIVE MILLION DOLLARS BUT AMOUNT POSSIBLY SUBJECT FURTHER
REVIEW SHOULD WE BE ASKED FOR LARGE STANDBY ON MARKET ISSUE STOP PRESENT
PLAN IS VG OBTAINS HALF PROCEEDS MARKET ISSUE BUT NO INDICATION YET OF
SIZE OF ISSUE STOP TWO BANK SHOULD OBTAIN RATE COVENANT BINDING ON
GOVERNMENT THAT VG EARNINGS WILL COVER OPERATING COSTS COMA DEPRECIATION
COMMA INTEREST AND A REASONABLE RETURN ON EQUITY STOP SUBJECT YOUR AGREEMENT
AND PROVIDED UNDERNRITERS ALSO AGREE THIS TIMING PROPOSE INVITE NEGOTIATORS
AND SUGGEST THEY ARRIVE OCTOBER TWENTY AS PROVISIONALLY AGREED IN TIMETABLE
FOR JOINT OPERATION STOP PROPOSE MENTION RATE COVENANT REQUIREMENT IN
INVITATION BUT NOT AM)UNT OF LOAN STOP
SOIZIERS
AUTHORIZED BY:
NAME: M. L. Lejeune For Use by Archives Division
DEPT. of Operations, EA Checked for DispatchSIGNATURE: 7(ignature of individual authorized to approve cable).
JHCollier:f aORIGINAL (File Copy)
(IMPORTANT: See over for guide in preparing Outgoing Wire)
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FORMNo. 57 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
OFFICE MEMORANDUMTO: Mr. S. R. Cope (New Delhi) DATE: September 24, 1958
FROM: Y. L. Lejeune
SUBJECT: Austria - Dr. Schmidt of Investitionskredit to visit New Delhi
Hugh Collier tells me that Eduard Schmidt, who is at present
on the "Vorstand" of both the Austrian Kontrollbank and the Inves-
titionskredit, will be on hand at New Delhi, in order to take
part in discussions on the future of Investitionskredit, including
the management question.
FORM No. 60(12.57) ECA jf ternational Bank for Reconstruction and Development CONFIDENTIAL
STAFF LOAN COMMITTEE SI /A/730
FROM: Secretary, Staff Loan Committee September 24, 1958
NOTICE OF MEETING
A meeting of the Staff Loan Committee will be held on Friday,September 26, 1958 at 11:00 a.m. in Room 1005.
AGENDA
Austria
The Committee will consider the attached Memorandum SIC/0/973,
on the Proposed Loan to the Verbundgesellschaft.
DISTRIBUTIONCopies for information to:
ChairmanDirectors of Operational Departments PresidentDirector, Legal' Department Vice PresidentsDirector, Economic Staff SecretaryTreasurer Director, Office of InformationDirector, Technical Assistance and Director, Economic Development InstituteLiaison Staff Special Representative in Europe (Agenda only)
Mr. Collier
DECLASSIFIEDCONFIDEPTIAL
SLC/0/973
September 23, 1958
STAFF LOAN CO;, .TTTEF
Memorandum from Department of Operations
Europe, Africa and Australasia
AUSTRIA - Proposed Loan to the Austrian VerbundgesellsChaft for
the Aschach Project to be made in Conjunction with a New York
Bond Issue by the Austrian Government
1. The attached reports cover the proposed loan to Austria for the
Aschach project.
2. The Austrian Government is planning to make a public issue in Pew
York towards the end of the year and the Bank has agreed that any loan it
might make would be made in the form of a joint operation with the Govern-
ment issue. The Government intends to re-lend one-half of the proceeds of
the issue to the Verbundgesellschaft. There has been some discussion of a
standby agreement between the Bank and the underwriters for the bond issue
and the Committee discussed the implications of this proposal at its meet-
ing on August 1, 1958. It is not yet clear, however, whether any agreement
acceptable to both the Bank and the underwriters will be reached. This
question is not, therefore, discussed in any detail in the report.
3. The Committee's attention is drawn to the question of power rates
in Austria. This point is brought up in paragraphs 83 and 94a of the
Technical Report and is discussed in paragraphs 14-19 in the attached
Background Report. The Verbundgesellschaft's financial condition is not
unsound. The issue is whether the Government's apparent policy of accept-
ing a relatively low rate of return on the investment in the State-owned
electricity concern is unacceptable to the Bank. An important aspect of
this question is that the Government would almost certainly find it em-
barrassing -- perhaps impossible - to attempt to raise rates rapidly. I
believe the whole question should be discussed with the Austrians early in
the negotiations before deciding whether the Bank needs to seek a departure
from the Government's present policy.
Recommendations
4. It is recommended:
(a) that the Bank be prepared to enter negotiations for a loan
of $25 million for the Aschach project along the following
lines:
(i) the loan to be made simultaneously with a market issue
by the Austrian Government;
-2-
(ii) the loan to be made jointly to the VerbundgesellsChaft
and the Gesterreichische Donaukraftwerke;
(iii) as in the case of previous loans to Austria the proceeds
of the loan to be used to meet local expenditure as well
as imports; assuming that adequate competitive biddingarrangements are provided for;
(iv) since there are no outstanding mortgages on the proper-ties of the Donaukraftwerke, there be no positive security.
(b) that the Bank take up the question of the principles governing
the determination of power rates in Austria with the proper
authorities and, if appropriate, endeavor to obtain a satis-
factory statement concerning future policy;
(c) that the Bank should hold further discussions with the under-
writers on the question of a standby agreement;
(d) that the Verbundgesellschaft, the Donaukraftwerke and the
Austrian Government should be informed of the Bank's decision
and invited to enter negotiations in Washington.
Michael L. LejeuneAssistant Director
Attachments
BACKGROUND REPORT
1. In April of this year, the Austrian Government requested the Bank
to send a mission to Austria to examine the investment requirements of
the Austrian economy with particular reference to the electric power sec-
tor. At the same time, the Austrian Government and the Oesterreichische
Elektrizitgtswirtschafts - A.G. (Verbundgesellschaft) began discussions
with investment houses in New York concerning the possibility of a bond
issue. These discussions, which, at least in their initial stages, were
carried on separately by the Verbundgesellschaft and the Government, even-
tually led to an arrangement between the Austrian parties and Messrs. Kuhn,
Loeb and Co. and Ladenburg, Thalmann and Co., by which the two investment
houses agreed to undertake an Austrian bond issue in New York. The Govern-
ment wished to obtain some .15 million to meet its own requirements for in-
vestment in th- improvement of the railway, road and telephone systems.
The Bank indicated that it would be prepared to consider a joint operation
with the underwriters by making its own loan to the Verbundgesellschaft
simultaneously with an Austrian bond issue in New York.
2. On August I8, a Bank mission consisting of Messrs. J. H. Collier,
C. Finne, J. Filippi and D. J. Fontein arrived in Vienna and representatives
of the underwriters arrived at the same time. The Bank mission studied the
investment program of the Verbundgesellschaft and, in particular, the Aschach
project, which appeared suitable for Bank financing. At the same time dis-
cussions took place between the Government, the Verbundgesellschaft and the
underwriters concerning the New York issue. It was necessary, first, to
agree upon who should be the borrower for the issue. The Verbundgesell-
schaft was anxious to establish a credit standing of its own and hence
wished to make an issue in its own name. The Austrian Government first
proposed a "joint issue" in which the Government and the Verbundgesell-
schaft would be co-borrowers. After various possibilities had been dis-
cussed, it was agreed that, in view of the desirability of avoiding all
unnecessary complications, there should be one issue by the Government of
which half the proceeds would be re-lent by the Government to the Verbund-
gesellschaft. The underwriters also suggested that a long term bond issue
might, if necessary, be supplemented by an issue of 3, 4 and 5 year notes
in order to increase the total proceeds. The arrangement for splitting the
proceeds 50/50 between the Government and the Verbundgesellschaft is so far
merely a gentlemen's agreement and it has been entered into without any
exact knowledge of how large the issue will be. In the light of the con-
ditions in the Yew York bond market at the time, the underwriters were not
prepared to suggest any figure. But the Austrians were originally hoping
for an issue of around $30 million and if it eventually turns out to be
more in the neighborhood of 15 to $20 million, the Government may be re-
luctant to provide as much as half to the Verbundgesellschaft.
-2-
Construction Plans of the Verbundgesellschaft
3. The present construction program of the Verbundgesellschaft and its
associated companies is now nearing completion and the VerbundgesellsChaft
now wishes to begin work on a new program in order to be able to meet future
demand. It has altogether seven new projects and associated transmission
lines under consideration, of which four may be regarded as having priority
since they are necessary to meet power demand in 1963. The Aschach project,
a run-of-the-river plant on the Danube, with a capacity of 264 MW, is the
largest of these four. The other three, Schhrding, Edling and Losenstein,
also run-of-the-river plants, have a combined capacity of 197 YW. The in-
vestment requirements of the V.G. combine over the years 19 5 8 to 1963 in-
clusive are as follows:
$ million
Completion of present construction program 108
Aschach project 115
SchArding, Idling and Losenstein projects and
transmission lines 74
$ 297
To meet these requirements, the following sources of finance will be avail-
able:
million
New share capital (subscribed by Government) 57.5
Re-invested earnings 100.0
New borrowing:
Domestic bond issues 103Vienna savings bank 3.9ERP counterpart funds 46.3
Previous IBRD loans 4.6Bavarian State Bank (Schrding
project) 11.5Swiss issue, U.S. banks and sup-
pliers credits 13.6
183.1
Less debt repayment 83.8
$256.8
A more detailed description of the financial aspects of the program is
given in the attached Technical Report.
-3-
4. Thus, additional funds amounting to approximately $40 million will be
required to meet the construction program. This figure does not include in-
terim short-term financing which will be required to meet expenditures in
the early part of the program. In 1961 short-term borrowing will reach a
maximum of about ;T22 million. However, it is clear that in practice the
financial needs of the Verbundgesellschaft between now and 1963 will exceed
the figure given above of $297 million. Firstly, it will become necessary
towards the end of the period to begin work on projects required to meet
power demand after 1963. Secondly, the construction of the four priority
projects is only just sufficient to meet the estimated demand for power in
1963 and the Verbundgesellschaft desires to build additional projects, if
it can obtain the necessary funds, in order to provide a larger reserve of
power and additional exports.
5. The sources of funds listed above include the proceeds of a public
issue to be mac'e in Switzerland of S.F. 40 million, of which only S.F. 10
million will be new money, the remainder being used to refund existing
credits from Swiss banks. The Swiss authorities have informed the Austrian
Government that they are prepared to allow this issue to be made only after
a settlement has been reached on the debt of the Danube-Save-Adriatic Rail-
way. A conference between the parties concerned with this debt is now in
progress in Vienna.
6. Also included is an amount of Dii 50 million from the Bavarian State
Bank for the Schrding project. This is a border project for which half the
construction cost must be provided by Germany and half by Austria. It has
been provisionally agreed that the Verbundgesellschaft will obtain most of
the financing required for its share of the cost in the form of a loan from
the Bavarian State Bank. Repayment will be guaranteed by the Austrian Govern-
ment. Since this is a joint project, it can only be started when the neces-
sary financial contributions from both partners are assured.
Size of the Loan
7. To meet the difference of ,40 million mentioned above, the Verbund-
gesellschaft hopes to obtain a loan from the Bank and a half-share of the
proceeds of the Government's forthcoming bond issue in Few York. Moreover,
since the program will not be completed until 1963, there is also the pos-
sibility that, in the meantime, the Verbundgesellschaft will be able to ob-
tain further loans, particularly from Germany. The eventual size of the
financial gap which has to be filled is therefore uncertain and it is thus
not necessary for the Bank to meet the whole of the difference of $40 mil-
lion which emerges at the present moment between the financial needs and
availabilities of the V.G. combine. While it would not be possible for the
Verbundgesellschaft to proceed with the Aschach project without assistance
from the Bank, its present financing and construction plans are still sub-
ject to some adjustment, particularly since none of the projects have yet
been started.
-4-
9. In principle, there would be some logic in making the size of the
Bank's loan dependent on the amount which the Verbundgesellschaft obtains
from the New York issue. But in practice this might create a difficult
situation since this amount depends not only on the amount of the issue
but also on the division of the proceeds between the Government and the
Verbundgesellschaft. The decision to make a Government issue and split
the proceeds 50/50 has been reached only after considerable discussion and
delicate negotiation between the Government and the Verbundgesellschaft.
If the Bank were to say that the amount obtained by the Verbundgesellschaft
would be subtracted from what it would otherwise be prepared to lend, itwould put the Government in a position where it could obtain great advan-
tage by re-opening the question of the division of the proceeds in the event
that the issue is smaller than expected. Since in practice the end result
of both approaches would probably not differ very greatly, it would appear
preferable in this case to fix the size of the Bank loan independently of
the results of the New York issue. It would nevertheless still be possible
to consider an increase in the Bank's loan if in the end it turned out that
the Verbundgesellschaft appeared likely to obtain only a small amount, or
nothing at all, from the bond issue.
Other Financing Possibilities
10. In addition to the sources of funds already mentioned, it is possible
that the Verbundgesellschaft may be able to obtain some funds from lenders
in Germany, Italy and Holland. The discussions which have taken place so
far have, however, all been based on the assumption that any financing would
be coupled with an export of power from Austria to the country concerned.
To obtain these credits, it would be necessary for the Verbundgesellschaft
to expand its construction program in order to be able to export the neces-
sary power. These possibilities cannot therefore be regarded as sources of
finance for the present program since this program is only sufficient to
meet Austria's own requirements. A proposal by the Berliner Handelsgesell-
schaft for a loan of up to DM 200 million included a provision for security
in the form of a Government guarantee and a pledge of revenues arising from
a power export contract to be concluded between the Verbundgesellschaft and
a German power company. Since the Bank has loan agreements with the Verbund-
gesellschaft which contain a negative pledge clause, the conclusion of such
an arrangement would have required the Bank's consent. The Bank had indicated
that it would not be prepared to waive its rights under the negative pledge
clause and the Austrian Government indicated that it would not be preparedto give its guarantee to any loans to the Verbundgesellschaft containing pro-
visions for specific security. However, the Berliner Handelsgesellschaft is
still interested in trying to arrange a loan for the Verbundgesellschaft and
is endeavoring to find a way to do so without obtaining a pledge of revenues
in German marks.
International Asects of the Aschach Project
11. The Aschach project is located wholly within Austria. However, as ex-
plained in the attached Technical Report, the effect of the project on the
water level of the Danube extends some 80 km upstream from the site and the
-5-
last 300 meter affect German territory at the point where the Danube forms
the border. The power station Jochenstein is situated in this area and the
effect of the higher water level is to reduce, by a small amount, the power
available from this plant. The Jochenstein plant is operated by the Donau-
kraftwerk Jochenstein, a company owned jointly by Austria and Germany and
established by an agreement between Austria, Germany and Bavaria. This
company has indicated thet it has no objection to the Aschach project, but
it will be necessary for an agreement to be worked out between the Verbund-
gesellschaft and the Donaukraftwerk Jochenstein to compensate the latter
for the small reduction in its power output. Steps are now under way to
secure all necessary legal consents from the Federal Republic of Germany and
the State of Bavaria which are required for the construction of the Aschach
project. As in the case of the Ybbs-Persenbeug project, the Bank will ob-
tain a legal opinion that all obligations arising out of international treaties
concerning the Danube have been complied with in the plans for the Aschach
project. This opinion will cover both the navigation aspects of the proj-
ect and those concerning its effect on the Bavarian border and the Jochen-
stein power plant.
Need for Legislation
12. In previous loans to Austria, the Guarantee Agreement has been rati-
fied by the Austrian Parliament after signature. This procedure has been
necessary because certain of its provisions involved a change in Austrian
law and in accordance with the Austrian constitution had to be approved
by the Nationalrat in order to be valid and binding. The provisions in
question are the negative pledge clause and the clauses on freedom from
taxation and on arbitration. These points (with the exception of the arbi-
tration clause) also have to be covered for the bond issue. A new enabling
law is therefore necessary and it was possible to arrange for it to cover
the Bank's loan as well as the public issue. A law for this purpose has
been drafted and is expected to be approved by the Austrian Parliament
during October.
Possible Standby Agreement between the Bank and the Underwriters
13. Some preliminary discussions have been held on the question of a pos-
sible standby agreement, which the Bank has offered to the underwriters, by
which the Bank would be prepared to take a certain proportion of the issue
if it could not be sold to other purchasers. It is not yet possible to say
whether an arrangement satisfactory both to the Bank and the underwriters
can be found. Should there be a standby agreement, however, it would be pos-
sible for the proceeds of any purchases of bonds by the Bank to be used to
finance the Aschach project in addition to the amount provided by the Bank
under its normal loan, and an agreement would be obtained from the Austrian
Government and the Verbundgesellschaft to this effect.
-6-
Power Rates
14. In 1956 the Verbundgesellschaft applied for an increase in its rates
and the Bank took the position that it could not make a loan before the ap-
plication had been approved by the Government. The increase was approved
in September 1956 and the loan was signed. The new rates provided the V.G.
combine with revenue sufficient to cover all expenses and to provide a return
on its capital which would reach about 4% by 1961. Had there been no in-
crease, the Verbundgesellschaft would have had to operate at a loss. How-
ever, when the new rates came into effect, the provincial power companies
which purchase about half the V.X. combine's total production, refused to
pay the higher charges unless they themselves were given permission to in-
crease their rates. They thorefore also applied for rate increases which
were approved last July and the Verbundgesellschaft was at the same time
granted an additional increase. The Verbundgesellschaft rates are now 25.5%
higher than they were before the last loan was made. They are estimeted to
provide a rate of return on net investment of about 4.5% during the next six
years. This return is low in relation to the normal cost of capital in
Austria.
15. However, a comparison of the cost of capital with the return on net
investment is not particularly significant as a measure of the Verbundge-
sellschaft's ability to attract capital. It has no difficulty in disposing
of its local bond issues once it has received official permission to make
them. Within Austria, its credit standing is probably higher than that of
the Government itself. Its retained earnings are expected to provide about
one third of the funds required for the four new projects. Its new share
capital is subscribed by the Government in the form of regular annual con-
tributions from the budget in accordance with the Electric Power Development
Act. Its ability to attract capital is therefore already very strong and
would not be significantly improved by an increase in the rate of return.
16. Irrespective of the desirability of obtaining a higher rate of return,
the procedure for raising rates in Austria is time consuming and fraught
with political difficulty. All power tariffs in Austria are subject to a
"Price Control Law" which lays down a procedure for handling applications
for price increases and also includes some very general criteria to be fol-
lowed. The law says that prices must be "economically justifiable" which
it defines as prices which correspond as well as possible both to the
economic circumstances of the producer and to those of the consumer. Ap-
plication for price increases have to be examined by a Price Commission under
the chairmanship of the Minister of the Interior. This commission has to re-
commend what it regards as an economically justifiable price.
17. For the last two applications for a rate increase by the Verbundge-
sellschaft, the final decision has been taken by the Austrian Cabinet, since
the Minister of the Interior was unwilling to act without Cabinet approval.
This reflects the political importance of price increases in Austria. The
People's Party (conservatives) in particular has made economic stability
one of its principal political planks and is extremely sensitive about all
price increases.
-7-
18. This situation means that in practice there can be no assurance tlat
any specific price increase will be approved until it has passed through the
legal and administrative process and has finally been acted upon. Any as-
surances given by the Government could not go beyond the provisions of the
existing law. It was for this reason that, in 1956, the Bank insisted on a
final decision being reached before making its loan.
19. There are thus two practical obstacles to any attempt to achieve a
further increase in rates. Firstly, the last increase was approved less
than two months ago. Moreover, next year is likely to be an election year
which would mean that the political difficulties would be greater than usual.
Secondly, since the method and procedure for determining power rates are laid
down by law, the Government cannot give any assurances which would not be in
accordance with existing law.
Timing
20. A provisional timetable for the joint operation has been drawn up
in cooperation with the underwriters. It provides for approval of the loan
by the Executive Directors on Monday, November 17 and signing of the Bank
loan documents and the purchase contract between the underwriters and the
Government on November 18. These dates are the earliest which appear pos-
sible. They are, of course, subject to the completion of negotiations by
the Bank, favorable conditions in the market and the passage of the neces-
sary enabling legislation by the Austrian Parliament.
Creditworthiness
21. A report on the Austrian economy (EA-82a) was prepared in April of
this year. It described the economic progress which Austria had made since
1954 and concluded that, particularly in view of the low level of her present
external debt, Austria was creditworthy for further borrowing. The economic
situation during the intervening months has continued to be favorable. Des-
pite some slowing down of exports during the current year, the balance of pay-
ments is still expected to show a surplus. An important recent development
was the decision by the Soviet Union to reduce the deliveries of oil required
by the State Treaty from 1 million tons to half a million tons. There is no
doubt that Austria is still creditworthy for further borrowing of the amount
contemplated both from the Bank and the New York market.
September 23, 1958
AUSTRIA CH S L O V A K A
THE V.G. NETWORKAND INTERCONNECTED PLANTS -
SHOWINGPROJECT PROPOSED FOR BANK FINANCING - L OWER
V G. COMBINEHydro Plants C RD G RANNA ARTENSTE- -
a Thermal Plants220 KV Transmission Lines110 KV Transmission Lines YBBS-PERSENBEUG
-_-__-_--_-_ Transmission Lines to be YPPEConstructed
OTHER COMPANIESO Hydro Plants -- EL AM SA G
O Thermal Plants A US T R A0 ERN ERG_ GMNProject proposed for Bank financing GAMNG
Projects financed by earlier Bank loans OPO TZ
------- Other projects included in 1958-59--------- construction program .
KIRCHBICHL
ACHENS __ _ PERNEGG
\C-- A----- ~ ILAUFNITZOORF zsi '.. ,.. -- --~~ ~ S T Y R AGERLOS
K
oouND OSDORNAUOO5NDIT /R 0 L .- VOTBG
VERNILINT E A 5 TLUNERSEE .NSTEIN
q KALSERBACH-REISSECK-KREUZECK
- C A - N T H A-- - ST. ANDRA
SWITZERLAND C S R-CA {L AVAMtIN
I T A L Y
EPTEM ER 958 - - ----- ----SEPIMOLR1958IBRU-512
September 18, 1958
Dr. Ernst WagnerK1rntnerring 10Vienna I, Austria
Dear Ernst:
I arrived Sunday after an uneventful but sleepless trip. Hazeland the children are in fine shape and wish to be remembered to you andGreta.
I shall be leaving for New Delhi on Saturday, September 27 andwill be in New Delhi from Tuesday, September 30 to Saturday, October 11.I can be reached there by mail in care of FUND-BANK METINGS 1958, BigyanBhavan, Post Bag No. 600, New Delhi, India. Caules should be addressedto me in care of FtNDBA.NK, New Delhi.
1. Fee
Your bills have been approved and have been forwarded for pay-ment and you should receive advice of payment shortly.
2. Joint Operation
(a) There is an error in my memorandum dated September 12 con-cerning the various documents required for the signing and effectivenessof the proposed loan and guarantee agreements. On page 11, item 7, firstsentence, the words "declaration of negative pledge" should be "declara-tion concerning freedom from taxes".
(b) I appear to have lost my copy of the Jochenstein Agreement.Would you please be good enough to make another copy available to me,together with copies of the First and Second Nationalization Laws?
(c) Proposed Negative Pledge Clause in Guarantee Agreement. Youcan inform the Nationalbank that we are prepared to amend the negativepledge clause in the proposed guarantee agreement in accordance with our
-( 7
F -2-
discussions, that is to say, by inserting in paragraph 1 of Section3.01, after the words "assets of the Guarantor" the words "of any agencyof the Guarantor or of the Oesterreichische Nationalbank". The presentsecond paragraph of Section 3.01 would then be deleted.
I have also discussed with Mr. Broches the problem arising outof the words "ipso facto" in the negative pledge clause and we are con-sidering omitting those words from the clause.
(d) Eropelation. We are anxious to know whether thedraft legislation was approved by the Cabinet on Tuesday, September 16,and what changes, if any, were in the agreed draft.
If possible, I would also like to have a copy of the final versionof the Ministerratevortrag and the erl~uternde Bemerkungen.
(f) Verbundesellschaft Borrowings in Germany. During my lastmeeting with Dr. Stahl on Friday, September 12, it was agreed thatDr. Stahl would let us know as soon as his discussions with the BerlinerHandelagesellsahaft had resulted in firm proposals, especially withrespect to any security to be given for the proposed borrowing. Youmight ask him how things stand.
I would appreciate it if you would keep me informed of develop-ments on the joint operation. You might write a letter to me in NewDelhi with a copy to Hugh Collier in Washington. If you feel that itwould be desirable for me to return to Vienna for a few days after theannual meeting, do not hesitate to let me know.
I want to thank you and Greta again for all your hospitalityduring our stay in Vienna and I hope that next time I won't be in sucha fearful rush.
With kindest regards.
As ever,
Yours
Douglas J. Fontein
DJFontein:ea
Mr. J. Burke Knapp September , 1958
S. R. Cope
AUSTRIA - Aschach Pomr Project
1. The Bank mission in Austria is studying a run-of-the-riverhydroelectric project at Aschach on the Danube, about 50 kilometersfrom the German border.
2. Operational Memorandum No. 8 forbids the investigation orprocessing of projects involving international waterways withoutprior approval by the management., It requires that the manage-ment be promptly informed of anr such project and that the WorkingParty propose and obtain management approval of a procedure fordealing with the international aspects of the project.
3. A similar problem arose in Austria when the Bank financedthe Ybbs-Persenbeug project on the Danube, also a run-of-the-riverplant. At that time, the Bank accepted a statement from the Aus-trian Government confirming that all stipulations of the treatiesgoverning the use of the Danube had been complied with. In allprobability, the present situation is comparable, but this we will.ave to look into.
4. I have asked Mr. Collier, who is now in Austria, to findout whether the treaties governing the Danu have been compliedwith in respect of the proposed Aschach project and will let youknow the result.
SRCope:mnu
cc: Mr. D. SommersMr. A. BrochesMr. W. Diamond
FO~m No. 265.58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
INCOMING WIRE
DATE OF WIRE: SEPEMBER 1,1958 ROUT ING
TO: INTERNATIONAL BANK FCI RECONSTRUCTION ACTION COPY TO MR *C
AND DEVELOPMENTINFORMATION COPY TO
FROM:
WIEN Decoded By
TEXT:
TEN INTERNATIONAL ASPECTS ASCHACH WHICH ARE BASICALLY SIMILAR TO THOSE
OF YBBS PERSENBEUG BEING FULLY INVESTIGATED AND NO DIFFICULTIES
EXPECTED
COLIIER
ORIGINAL
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W. Diemond L iiew Astriai Power kro ject
The 3.n issiota in netra is studyi a Tuo-. e -riwer hydro-electric project on t e un, about 50 kilo at rs ro the Geanborder,
t:: rational 'enorsudun o. 9 forbids n A vesti t or proces-sing of projects involvin g interraioa3 vvltorwaya withovt prior ap-prov&l by the anbge~enet. It requires that the muegement be promptly
xforied of any suoh project and that the Working Part propose andotain maagemen pprova of a prooed-re for detIng with t>e I.ter-
aetional asnocts of the prnjet.
A similar prob] em arose in Austria sken the -ank finaced the Ybbs-?eraer~beug project on the Denube, asoa o on-of -the-ri vcr lent. Atthat tne, tne I k accepted. statement from the >strian Governmentcoufirrtg that al stipulations of the treaties govering the use ofthe 3n4be had beci complied with. n all probability, the presentSitustic! is corn b] a d we will deal with At i the way.
0o kii], no doubt, wish to nform the re- geent of the foregong.co rse of action 0 gel counsel, .. l. and I feel we should await
further word from th e IIs We have today written to Coilier Cs fol-
w"he i schach project, which you are lnvestigeting, is on thelea be. OU vi re.ll u1eretioa] rOor dur o. , which
e staff to "i vestigsteh or to "prcea,," any proj-ect I velvi ags ntra t o al Yaterwt.7 vithout prior a revelfrom the ' fgeme -t. We wil deal , th the management here,but I assume that you have taken up the internationl aspectsof the project wSth the Auatri vs, who probably have the mat-ter In hand .6 the case of the Thbs-Perserbeug project, the
:~ank recel wed a sta ent from the antrlan Government confir-ming that a stipulations of the treaties governing the use of
the a be lad been oomplied wi th. 4levse let us know the si-tuation with respect to e ch' as soon as nossible, so thatwe can clear the Vatter on this side.
ot ~r. . ~.ene'd. L. Gencio~r. A. 12. Spottawood
WDiainond :fgs
FORM No. 75 INTERNATIONAL BANK FOR(5-58) RECONSTRUCTION AND DEVELOPMENT
DateROUTING SLIP
NAME ROOM I
Action Note and FileAppropriate Disposition Note and Return
pproval Prepare Reply__Comment Per Our ConversationFull Report RecommendationInformation SignatureInitial To Handle
REMARKS
From
INTERNATIONAL*BANK*
INTERNATIONAL BANK FORRECONSTRUCTION AND DEVELOPMENT
WASHINGTON 25, D. C.TELEPHONE BABYLONE 17-10 CABLE ADDRESSA NTSAFRAD PARIS
PLEASE REPLY TO
PARIS OFFICE: 67, RUE DE LILLE
PARIS (7-) - FRANCE Vienna, August 29, 1958
Letter No. 2
Dear Bill,
Our work so far has gone well on both of the main tasks wehave here; the legal problem of ensuring that the loan ann thebonn i-sue can be made simultaneously as a joint operation andon the appraisal of the Aschach project and the V.G.'s financialposition. Finne and Filippi believe they will have everythingthey want by next Tuesday and then they propose to visit theAschach site ann depart. Filippi could oe back in ashingtonby Heptember 5 ana Finne by the 8th or 10th unless Denmark claimsthem. Doug Fontein may not return to ,ashington but go straightto India, in which case he could remain here until the Cabinetapproves the new law either on the 9th or the 16th. I plan toleave on the 6thto be back also around the 8th or the 10th.
Bank Loan to V.G.
We are fortunate tnat we can concentrate on one project only.Ascnach is very similar to Ybos-Persenbeug. but produces cheaperpower. it will cost around V115 million. Hike asked me whetherany German money was necessary to complete it and I said it wasnot. This is purfectly true, out it has to be remembered that topresent a rational picture of the V.G.'s position one cannot pre-sent one project in isolation. It is necessary to take account ofthe other projects in order to present a cash-flow table and toestimate earnings and debt-coverage. This is why we have workedout what we call "Program A", which is a sort of compromise betweenwhat is already firmly financed and what is necessary to meet powerdemand. f-rogram A, consisting of Eling, Losenstein. Aschach andSchtrding, costs about $160 million over four years, but at themoment there is a shortfall of around '10 to '25 million. Thiseaoesere no German moneyeat ail, out 430 irom the Bank or from theBank and New York market combined. It does not seem unreasonaoleto assume that 6tanl can finn 410 to 25 million from Germany orelsewhere over the next four years. He, of course, hopes to find
much more than this oecause he hopes to complete not only ProgramA but some of the other projects hich nave for tne present oeenput into cold storage unuer tne heading "Program B", since financingfor tiem still has to oe obtained. Stahl,.m. , desires toconstruct at least somutning irom Program B in order to providelarger reserves of power aau additional exports.
Legislation
I enclose a copy of a law we nave drafted for submission tothe 4ustrian Cabinet ana a note irom Doug Fontein to Yonnie Vrocnesexplaining its implications .
Timetable
I also enclose a timetable worked out in cooperation with thelawyer for the unaerwriters. It assumes that the new law will tra-vel smoothly through the legislature. If it did not, delay would af-fect both the Bank loan and the issue, since the law is necessary forboth.
Standby
I have discussed the standby question with Teufenstein andKdlliker. There are various angles to it:
1) If we assume that there will be a Government issue, no partof which is ear-marked for the V.G., then the only way the proceedsof our standby could go to the V.G. would be to say that our moneywould be used by the Government to -.ake its statutory contributionsto the V.G. under the "Electric Power Encouragement law". These con-tributions take the form of auditions to share capital and are madein any event so that by using the standby to "enable the Governmentto make them", we thus could ear-mark our stanoby for the V.G. withoutin reality, depriving the Government of the benefit of the whole bondissue. The contributions for this year have already been paid. Un-less, therefore, we say we are re-imbursing the Government for them,which I think might be straining rather far, we shall have to say thatwe are enabling the Government to make next year's contribution.
Next year's contribution will probably amount to och. 250 mil-lion, of .hich the V.G. has allotted Sch. 100 million to the Donau-kraftwerke. This company has only two projects, Ybbs-Persenbeug andAschach, both of which will be Bank projects. Thus we could say thatabout 4 million of any stanaby would be for Bank projects. I shall
-3-
ask Klliker whether perhaps even more could be allocated to Donau-kraftwerke - say 6ch. 130 million - so that we could then make it
5 million. In this event we could then have an agreement with theAustrian Government that said, in effect, that "the Government woulduse the proceeds of the bonds bought byv the Bank to make funds availableto the V.G. in order to increase the capital of the Donaukraftwerke".
If the Bank wished to make a larger standby than $;4 or ;5 million,it would then be necessary to include contributions to the share capitalof other companies, including a) the V.G. itself, b) Draukraftwerke andmay be, c) Tauernkraftwerke. These latter two companies are constructingsome projects which we have not checked. In that event we would have tobe content to take the line that we are generally familiar with the V.G.and know that it will spend the money efficiently, etc., etc. We could,if we wish, get an agreement with the V.G. giving us inspection and in-formation rights for the other companies. But the advantage of re-stricting the standby to the Donaukraftwerke would be that we alreadyhave these rights in our Loan Agreement 149 (and in the proposed loanfor Aschach).
2) If there is a Government issue, some part of which is to be re-lent to the V.G., as is now proposed, then new questions arise. Therewill then have to be a re-lending agreement between the Government andthe V.G. and another one between the V.G. and the special companies whowould use the money. It would take time to arrange these agreements,which could hardly be done before the bond issue. This raises a questionconcerning the mechanism of the standby. Would the Bank purchase thebonds and disburse immediately or would it wish to "disburse" only asand when the V.G. used the money under the re-lending agreements? Ifthe Bank were to purchase the bonds and pay out the whole sum on theclosing date, it would then be necessary for the Government and the V.G.re-lending, agreements to be finalised later. If, on the other hand,the Bank wanted to approve the re-lending agreements anm disburse inproportion to expenditure on the projects, then it seems to me that thestandby would become subject to subsequent conditions being met by theGovernment and the V.G. In addition, the Bank would presumably wishthe standby proceeds to go into Aschach. However, in view of the sizeof the cost of Aschach ($115 million) in relation to the standby, thisshould not be an obstacle.
I feel that it might well be preferable for the standby to operatethrough the Electricity Encoura,;ement Law, in any event. The advantageof this method is that it provides an already existing legal channelthrough wich the funds can flow from the Government to the V.G. andfrom the V.G. to the Donaukraftwerke.
-4-
yven if we do aecide to use the Encouragement Law there isstill a disbursement question to settle. ,e could either pur-chase the bonds outright and pay the money over with an agree-ment with the Government that an equivalent amount would go tothe V.G. for the Donaukraftwerke in 1959 or try to find a wayof fulfilling the standby commitment with the underwriters whiledisbursing only when the 1959 funds are in fact paid over to theDonaukraftwerke. This would involve the Government in some shortterm financing to carry it over until the time of disbursement,but Teufenstein said he thought that woulo not be difficult.
V.G. Borrowing in Germany
This situation seems to change from day to cay. but at thepresent moment Stahl is involved with both Darmstadt and Berlin.He says he would like to drop Darmstadt but feels he cannot do sountil he has a firm agreement with Berlin. Samuels and the Credit-Anstalt have urged him to go the the Deutsche Bank and he has madesome enquiries which, so he says, met with a favourable response.He has asked bamuels to talk to Abs and to try to help start theV.G. off on the right foot with the Feutsche Bank. Samuels alsowants to find out whether Abs would be interested in the New Yorkissue. Stahl is still very hopeful that some money will be ob-tainable from Berlin, despite the negative pledgeand he has ar-
ranged for Rosenstein and von Flodnitz to come to Vienna on Friday,September 5, to talk with us. I do not know (and Stahl claimed hedid not know either) exactly what they want to talk about, but itmay be they want to ask whether the Bank would object to the V.G.arranging a power contract with EWE, for example, as a conditionof the loan. In that event we can only say that the siO "iq
4Rp~m - plo~ee &PA 64** Bank woula wish to assure it-self that there was no pledge and would therefore wish to see allthe relevant documents.
Borrower for the Bond Issue
Yesterday there was a meeting in the Finance Ministry wheresome real progress was made. Teufenstein started by reviewing thewhole position.during which he mentioned that the Swiss had liftedthe veto on foreign issues but had added that before the V.G. Swississue could je made there would have to be a settlement of theDanube-Save-Auriatique debt problem. This is quite complicated,so I doubt whether the Swiss issue can be regarded as imminent.
-5-
Teufenstein then presented three possibilities:
1) An issue with co-borrowers.
2) An issue by the Government with half the proceeds re-lent by the Government to the V.G.
3) Two issues, one of long term bonds and one of shortterm notes. This could take one of two forms:
3a) Long term issue by the Government with an issueof short term notes by V.G.
3b) Long term issue by V.G. and short term issue byGovernment. Teufenstein said this would only beacceptable to the Government if some of the Germanmoney materialised and if part of it could be madeavailable to the Governent. (This seemed an extra-orainary notion to me.)
Samuels then said he would advise against 1), that 2) would beideal from the underwriters' point of view and 3a) would also probab-ly be possible. It woula also be possible for the Government to com-bine a long term bond issue with some short term notes. He said hethought 3b) would be very inadvisable, for obvious reasons.
Finally it was agreed as follows:
a) There would be a Government long term bond issue, proceedsto be divided 50-50 between the Government am the V.G., but
b) If it appeared that not enough money could be found this way,the long term issue would be supplemented by some short termnotes - Samuels said probably not more than a quarter of thetotal. The short term notes could be issued either by theGovernment or the V.G., the decision on this point to be leftto the unaerwriters. In this case also, the total proceedswould be split 50-50, irrespective of whose name was on theshort term paper.
The bond issue is therefore now on the right track. There arehowever, two points to be noted. The first is that during the dis-cussions the hypothetical example that was used by the Austrians wasa $30 million issue. Samuels aid not say anything about amounts.But if the amount turns out to be much smaller than this, the Govern-ment may wish to take more than 50 of it. Seconly, the question
6
of who issues the short term notes, if any, may in the end be de-ciced Wy the difficulty of getting the V.G.'s financial statementsinto a form acceptable to the d.L.C. Filippi thinks it would takean auditor about three months to produce certified consolidatedbalance sheets aa income statements for the last few years.
On the standby, Samuels saia it was a matter that had stillto be arrangyed between the Bank and the underwriters am that theunderwriters would have to be sure tlvt the standby would reallyassist the issue aa not hinder it by creating the impression ofthe Bank bailing out Austria. btahi asked whether the size of thestandby would affect the size of the Bank loan. I saicI that thesize of the standby would not be the deciding factor, but that theamount of the proceeds which the V.G. would receive from the wholebond issue would De relevant for determining the size of the Bankloan.
Yours sincerely,
John H. Collier
Encls.
M1r. William DiamondInternational Bank for
Reconstruction and DeveLopment1818 H Street, N.4.washington 25, D.C.
August 29, 1958
L:TTE NU. 5
Dear lugh,-
I am very grateful to you for the first progrews report on your mission.
It gave us a good picture of the situation as of last week-eui.
mike lejeune was equally pleased, not only with the letter but also with
your telehone conversation, and asked me to let you kiow.
There in one important point we should like to coament on in connection
with your item 2 (b). The problem of legislation arises in part at leqatbecause you have assumed that a Bank loan must become effective at the timethe public issue is closed and the bonds paid for. That has in the past been
the position of the underwriters when loans have been made jointly with muar-
ket issues; and one result has been the speeding up and complication of timeschedules, especially when parliamentary ratifications are re.uired for
effectiveness.
In the Bank's opinion, this normal position of the underwriters is basedon the fear that a loan signed by the Bank will not in fact become effective
and that this risk might negatively influence the market issue. We feel that,based on the Bank's experience, the faar is groundless and we should like towean the underwriters with whom we collaborate away from their present posi-tion and toward. a willingness to go ahead with an issue when our loan is
signed rather than when it is made effective.
We tried our views on Morgan Stanley and Company this week. As youknow, they arrd we will participate in a joint operation in Italy. Mondaywe presented our case for the market issue proceeding when we sign a loan
agreement without reference to the date it becomes effective. Tuesday after-
noon, they agreed, thus taking a lead whic we hope will be followed by other
underwriters in the future.
We think you ought gently to raise this question with Samuels, presentthe Bank's viewv, call his attention to Morgan Stanley's a titzde and tryto persuade him not 1o insist on effectiveness. We leave it to you and toyour tact to decide how best to put the case for eliminating a needless
cornli tion which makes life difficult for underwriter, borrower and Bank.
Pa. Hugh Collier - 2 -
Another point. The Asohaoh projec, which you are investigating, ison the Danube. You will recall perational Msmorandu No. 8, which forbid:the staff to "investigate" or to "process" any project involving an inter-national waterway without prior approval from the manageuent. We will dealwith the managsaent here, but I assuwe that you have taken up the internationalaspects of the project with the Austrians, who probably have the matter inhand. In the ase of the Yb.s-Persenbeug project, the Bank received a state-ment from the Austrian Government confirming that all stipulations of thetreaties governing the use of the Danube had been complied with. Xleaselet us know the situation with respect to Aachaoh as soon as possible, sothat wo can clear the matter on this side.
Finally, power rates. TC) is naturally unhappy about Section 5 of yourletter. In view of our previous experience with respect to rates in Austria,we will want firm assurances from the Government that action will be taken,so as to avoid problems arising similar to those that aros before. Pleasepursue this matter further. We will have to go into it in detail when Finn,and you return.
There is nothing to add to Raymond ' cable about Finn. 4 return, whichii being sent today.
Cance again, many thanks for your No. 1, We look forward to No. 2.
Sincerely your.,
Williaz Diamond
Mr. J. H. CollierImperial iiotelViennaAustria
WDiamond symo
cs Mr. SpottswoodMr. CancioMr. Rutland
FoRni No. 26(5. 58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL. FINANCE CORPORATION
INCOMING WIRK
DATE OF WIRE: AUGUST 28, 1958 ROUT ING
TO: INTERkTIONAL BANK FC RECONSTRUCTION ACTION COPY TO TECH.OPAND IEVELOPMENT
FROM: INFORMATION COPY TO
WIEN Decoded By
TEXT:
EIGHT FOR RIPMAN POLICY STATEMENT MAILED AUGUST 25
ORGANISATION UTLINE FOLLOWS VERY SHORTLY
COLLIER
ORIGINAL
Fonm No. 26(5.58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
INCOMING WIRE
DATE OF WIRE: Ia 4 S ROUTING
TD: ACTION COPY TO
FROM: INFORMATION COPY TO
Decoded By
TEXT:
'M =GE rA "W EJMW ECV W= = GEMAMIR IS= MW
mi ~ ~ DU~ To Um v~ man= rUSBIA CPAI 83 AUM
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DUPLICATE
O~A ~4
FORM No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(9.57)
OUTGOING WIRE
CLASS OF SERVICE: FULL RATE DATE: AUGUST 26, 1958
TO: COLLIERHOTEL IMPERIALVIENA
COUNTRY ( AUSTRIA)
i EXT:J
Cable No. FOUR RIR .FIVE WOULD ARECITE QBLE) RIP(1 ON STATUS CF YOU
D1SCUSSICM CONOfING SLE ION OF BWRUMER COMMA TIMING CF MARKE
ISSUE C0MMA CHOICE F FROJ=ETS COMMA TECHNICAL ApPRAISAL EC STOP
yOUR Ma O N TMEE ME&UnAR I39 OMER TO UNDERSTAND WHY FIMN
M=ST REURN TO WASHIN(1ON AD TO KNOW IHETHER HE CAN COMPLE WVK
HEE AND STILL ADHERE TO HIS AND FILIPPI'S DENMARK SCHEDULE
AUTHORIZED BY:
NAME: WD For Use by Archives Division
DEPT: OPERATIONS - ULA Checked for Dispatch
SIGNATURE:(Signature of i4jvidual authorized to approve cable)._
WDiamondmm y_0 oL IA
o0 cc . Squire ORIGINAL (File Copy)
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FORm No. 26(5-58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
INCOMING WIRE
DATE OF WIRE: AUGUST 26, 2958 ROUTINGT.- INTERNATIONAL BANK FOR RECONSTRUCTION ACTION COPY TO .PE
.AND DEVELOPMENT
FROM: WIN INFORMATION COPY TO
Decoded By
TEXT:
SIX FOR COPE RE YaR LETTER STEVENSON OF SULLIvAN CROMWELL
NOW IN OSLO PIANS RETURN NEWYORK AROUND END AUGUST AND ARRIVE
DENPARK SEPTEMBER 8 SAMUEIB WISHS TO CONFIRM THESE ARRANGEMENTS
WITH HIM BUT SUGGESTS YOU CONTACT STEVENSON IN NEWYORK ON FINAL
PIANS OUR MISSION GOING WELL AND SEHULD BE IN WASHINGTON AROUND
SEPTEMBER 10 BARRING UNEXPECTED OBSTACLS
COLLIER
ORIGINAL
FoIM No. 26(5.58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
INCOMING WIRE
DATE OF WIRE: AUGUST 25,1958 ROUTING
TO: INTERNATIONAL BA1 FOR RECONSTRUCTION ACTION COPY TO MR. COPE
FROM: W N INFORMATION COPY TO TECH.OP
Decoded By
TEXT:
FIVE FOR COPE ALDWERELD) IN VIEl NECESSITY COMPLETE TECHNICAL
REPORT EARLIEST POSSIBLE SO AS NOT TO DELAY MARKET ISSUE BELIEV
ESSENTIAL FINNE RETURN WASHINGTON BEFORE PROCEDING DENMARK
STOP ASSUME THIS PLAN AGREEABLE TO YOU UNLESS WE HEAR OTHERWISE COILLIER
FINNE
ORIGINAL
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INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT1818 11 STREET,N.W.
TELEPHONE EXECUTIVE 3-6360 WASHINGTON 25, D.C. CABLE ADDRESS-INTSAFRAD
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INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT1818 H STREET,N.W.
TELEPHONE EXECUTIVE 3-6360 WASHINGTON 25, D. C. CABLE ADDRESS-INTBAFRAD
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TELEPHONE EXECUTIVE 3-6360 WASHINGTON 25, D. C. CABLE ADDRESS-NTBAFRAD
-
FORM No. 27 INTERNATIONAL BANK FOR RECONSTROCTION AND DEVELOPMENT(5.58) INTERNATIONAL FINAN CECORPORATION
OUTGOING WIRE
CLASS OF SERVICE: LT DATE: AUGUST 21, 1958
TO: COLLIERHOTEL INPERIALVIENNA
COUNTRY ( AUSTRIA)
TEXT:
Cable No. TWO REUR THREE MANAGEMENT FEELS INITIAL ENTRY INTO NEW YORK MARKET WOULD
NOT BE HELPED BY COMPLICATION OF COBORROWER STOP IF BANKERS AND
BORROWERS NEVERTHELESS FEEL THAT SUCCESS OF ISSUE WOULD NOT BE
PREJUDICED BY HAVING TWO BORROWERS WE WOULD BE PREPARED TO GO AHEAD
WITH STANDBY ARRANGEMENT
COPE
AUTHORIZED BY:
NAME: S.R. Cope/pnn For Use by Archives Division
DEPT: Opera ions, E.M.A. Checked for DispatchSIGNATURE:
(Signature of individual authorized to approve cable). _
WDiamond/SRCope/pnn ORIGINAL (File Copy)cc: M~r. A. Broches (IMPORTANT: See over for guide in preparing Outgoing Wire)
GUIDE FOR PRkPARING 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. The
cost is half the cost of full rate messages with a minimum charge for 22 words
including address and text.
Full Rate Full rate messages are normally transmitted and delivered immediately. There
is a minimum charge for 5 words, including address and text.
IBF Govt. This is a preferential rate extended by some member countries. Messages are
sent at full rate speed and at about half the cost. This rate normally should be
used whenever available. It is at present available for the following countries:
Bolivia Cuba Honduras *Syria
Brazil Dominican Republic Jordan Uruguay
Burma Ecuador *Lebanon Venezuela
Chile El Salvador Nicaragua Yugoslavia
*China *France Pakistan
Colombia Greece Panama
Costa Rica Guatemala *Peru
*In these countries the letter telegram rate is lower than IBF government rate
and 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. This
rate should be used only for confidential messages to staff members having a
code with them.
Day Letter Day letters are delivered during the day of transmission and should be used only
for 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 certain
commercial 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 destination
must 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 be
obtained by calling Ext. 3008.
Type text in capital letters and double space between lines. The text should be edited to eliminate
unnecessary 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 word
hyphenated 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 when
addressee does not know the address of sender.
5. Authorization
Type in name of department of staff member authorizing message and have authorizing staff member
sign 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 oesttch. The cable serviceis open
from 9:00 a.m. to 5:45 p.m. on working days. Special arrangements sho:ld be made for the despatch of
cables outside of these hours.
ANY QUESTIONS REGARDING INCOMING AND OUTGOING WIRES SHOULD BE REFERRED TO THE
CABLE POST, EXT. 3008.
FORM No. 26(5-58) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE CORPORATION
INCOMING WIRE
DATE OF WIRE: ROUTINGSU3GU T 20, 1958 2100
TO: ACTION COPY TOTIOCOPE INTINTIONL BANK FOR RECOTRUCTIO ,MR. COPE
FROM: NDDELOP NT INFORMATION COPY TO
!.' 1ADecoded By
TEXT:
THFEE UNDER-CIT ) UNDERTAND TURDUGH TLAD THAT BANK WOULD TAKE
VERY NEGATIVi VIEW OF IH2UE WITH TWO NAMES ON THE PAPER AT CO*BORROWERE.
STANDEY. DISCUSSION2 ON BORROVWEH PROBLEM BEGAN TODAY IN EHICH MISSION
TOOK NO FORMAL P)SITIDN. UNDERMHIT E SAID ISSUE WITH CO-BORROWERRE WOULD
BE DIFFIC -LT. EXPECT POTENTIAL BORROVERE WILL SETTLE QUESTION IN NET
FEW DAYS BUT IF BANKS ATTITUDE TOWRD STANDBY WOULD BE AFFECTED BY OUT-
COEW WI WOULD BE AN IMf4ORTANTI FACTR IN FINAL DECISION
ORIGINAL
FORM No 7 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(5. 48)INENTOABAKFRRCNTUTO AN DEEOM T
OFFICE MEMORANDUMTO: Files DATE: August 15, 1958
FROM: J. H. Collier
SUBJECT: Austria - Joint Operation
1. A meeting was held on Tuesday, August 12, 1958 at the offices ofKuhn, Loeb and Co. in iew York. Present were Messrs. Samuels, Knowl-ton and Oppeaheim of Kuhn, Loeb, Messrs. Marx, Gruber and Pincus ofLadenburg, Thalmann and Co., 1r. Swatland of Cravath, Swaine and Moore,and Messrs. Sommers and Collier of the Bank.
2. The first question discussed was that of the borrower for thepublic issue. Mr. Marx said that the Austrian Government had approveda proposal for a public issue of bonds on which both the Governmentand the Vorbundgesellschaft would appear as joint borrowers. This wasprobably due to pressure by Dr. Stahl. Mr. Marx added, however, thathe thought it could be changed if necessary. Nobody appeared to thinkit was a good idea; it would lead to considerable complications whichwould not help the issue.
3. There was then a long discussion on the question of a stand-byarrangement by the Bank. It appeared that Mr. Marx had interpretedMr. Black's remarks to mean that the underwriters could count on theBank taking half of the public issue in the sense that, if they thoughtthey could sell $15 million, they could then make an issue of $30 mil-lion and the Bank would take $15 million of this $30 million, not byway of stand-by but by firm purchase from the underwriters. Mr. Sommerssaid he did not think 11r. Black meant this. What the Bank was preparedto do was to stand by for some portion of an issue of an amount whichthe underwriter thought there was a reasonable chance of selling (Mr. Blacklater confirmed that this was, in fact, his intention and Mr. Sommers soinformed Mr. Samuels). Mr. Sommers said that the Bank would prefer toprovide any amount which would certainly be required from the Bank inthe form of an ordinary loan. Mr. Samuels said this would not be as ad-vantageous from their point of view as the other idea. What they wantedwas the sales feature of the Bank's buying the same paper. It becameclear, however, that there would have to be a good deal of differencebetween the public issue and what the Bank took, e.g. in respect of matu-rity.
4. Mr. Marx said he saw no chance of selling 025 to $30 million butthey might be able to manage $15 million. It would be necessary to havean interest rate of 6 or 6 1/2$ if any bonds were to be sold in Germany.Mr. Samuels said that it might not be in the interests of the borrowerto sell substantial amounts in Germany. Mr. Marx said he found the Ger-mans very optimistic th at interest rates in Germany would fall furtherbut he, himself, was not so sure about this. So far, they had onlyfloated one issue with a coupon as low as 6%.
-2-
5. Mr. Sommers asked whether the underwriters would require anyspecific undertaking by the Bank not to sell any of the bonds whichit might take until after a certain period of time. 'either M'r. Samuelsnor Er. Marx seemed very concerned about this. 'r. Marx said that theBank's holdings would not overhang the market in the sense that the Bankcould sell small parcels of bonds continually. Mr. Samuels said that,if the Bank wished to dispose of some of its bonds, it would probablydo so through the underwriters anyway. They would expect, however, thatthe Bank would not attempt to sell any bonds for say 6 to 12 months afterthe issue.
6. At various points during the meeting :r. Sommers was asked whatprojects the Bank would lend for, in vErious different eventualities.he said that on the basis of what we knew, the Bank would not lend forrailways or telephones and, in any case, would not think of doing sowithout an investigation which would delay the issue. Therefore, ifwe took up any part of a Government issue, there would have to be anagreement with the Government that the proceeds of the Bank's holdingswould either be re-lent to the Verbundgesellschaft or would be used tomake equity contributions to it.
JilCollier :fgs
cc: Mr. SomnersMr. Knapp11r. CopoeMr. BrochesKr. Diamond
The World Bank Group
Record Removal Notice ArchivesRecod R mova Noice& Records Management
File Title Barcode No.
Electric Power Project - Aschach Power - Austria - Loan 0213 - P037355 - Negotiations - Volume 1 1516825
Document Date Document Type
August 14, 1958 Letter
Correspondents / Participants
To: Douglas J. FonteinFrom: A. Broches
Subject / Title
Proposed Austrian operation
Exception(s)Attorney-Client Privilege
Additional Comments
The item(s) identified above has/have beenremoved in accordance with The World BankPolicy on Access to Information or otherdisclosure policies of the World Bank Group.
Withdrawn by DateVlada Alekankina November 13, 2018
Archives 01 (March 2017)
FoRM No. 57 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(5.48)INENTOABAKFRRCNTUTO AN DEEOM T
OFFICE MEMORANDUMTO: Files DATE: August 12, 1958
FROM: S. R. Cope
SUBJECT: Austria and Denmark
Mr. Saaals telephoned me today to say he was leaving for Europeand in his abs ance we could talk to Mr. John Schiff, Hr. Hugh Knowlton,and Hr. Arthur Oppenheimer at Kuhn, Loeb and Co.
Tn Vienna he would be staying at the Sacher Hotel and in Copenhagenat the d'Angleterre Hotel.
cc; Mr. D. SommersMr. H. Collier
Mr. G. Lefort
SRCope /pnn
FORM No. 6
S(3-54) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CONFIDENTIAL
MAY I2 STAFF LOAN COMMITTEEa SIC/M/721
August 11, 1958
Minutes of Staff Loan Committee Meeting held onFriday, August 1, 1958 at 10:30 a.m. in Room 1005
1. Present:
Mr. J. Barke Knapp, Chairman Mr. A. BrochesMr. S. R. Cone Mr. L. B. RistMr. 03 A, Schmidt Mr. H. W. RileyMr. M. N. Rosen Mr. G. N. Perry *Mr. S. A-ldewereld Mr. H. G. A. Woolley, Secretary
In attendarce:
Mr. Davidson Sommers Mr. J. H. CollierMr. M. L. Hoffman Mr. G. A. HathawayMr. B. Chadenet Yr. J. M. JentgenMr. E. E. Clark Mr. H. B. RipmanMr. J. H. Adler Mr. P. J. SquireMr. N. Bass Mr. E. SymondsMr. L. Cancio
* Part only.
2. Austria - Lending Problems
The Committee considered the Bankts lending problems in Austria,and
AGREED that
(a) the standby arrangement to be given by the Bank in connectionwith the proposed Austrian Government issue of ,15 million on theNew York market would involve the Bank's being obligated to buythe unsold bonds, in a limited amount, the Government for itspart being obligated to rrovide the Verbundgesellschaft with anequivalent amount;
(b) the general question of principle involved in the Bank enteringinto standby agreements should be discussed at a future meeting.
3. Austria - Investitionskredit
The Committee also considered Memorandum SLC/0/962, "Austria -Request for Second Loan of Oesterreichische Investitionskredit A.G." and
AGREED that
(a) the Bank's requirements for the use of the 80 million schillingcounterpart loan should include:
- 2SLC/i/721
(i) an improvement in the management and staff of Investitions-kredit;
(ii) a statement of the lending policies to be followed;
(b) the forthcoming mission to Austria should discuss with Investitions-kredit the procedures to be followed and Mr. Ripman should accom-pany the mission for this purpose;
(c) if satisfactory progress were made by Investitionskredit, the Bankshould be prepared to start negotiations for a second loan ofapproximately P7.7 million in early 1959;
(d) the Bank would expect Investitionskredit to take the initiativein preparing and working up projects to be financed from this loanand to have a number ready for review by the Bank at the time theloan was made.
b. European Investment Bank
The Committee considered the Bank's relations with the EuropeanInvestment Bank, and
AGREED
(a) that the Bank's general attitude should be to favor the EuropeanInvestment Bank's participation in Bank projects in Europe;
(b) but that, since the Italian Government did not appear to be recep-tive to the EIB's participation in the proposed Italian atomicpower project, and had alredy been told of the Bank's intentionto handle this project without mention of other participants, theBank should not press the Italian Government to accept FIBts parti-cipation in this particular case but should leave the issue to bedecided by the parties concerned.
5. The meeting adjourned at 12:00 noon.
TELEPHONE: EXECUTIVE 3-36Z7 CABLE ADDRESS; OPPIE
LAw OFFICE
FRANZ M. OPPENHEIMER1828 JEFFERSON PLACE, N. W.
WASHINGTON 6, D. G.
August 7, 195!
Mr. John H. CollierInternational Bank forReconstruction and Development111 - H Street, N. W.Washington, D. C.
Dear Hugh:
Following our telephone conversation of last FridayI have talked with both Dr. Plan and Mr. Gruber of LadenburgThalmann on the telephone. None of their information coin-cides with that which Mr. Samuels has apparently given you.Dr. Plan's latest information is still the one which he re-ceived through official foreign office channels to the effectthat there will be a joint issue of two issuers, the Verbundand the Government; Mr. Gruber said that, as far as they knew,the matter would be one of the first to be discussed at theforthcoming meeting in Vienna. In addition, Mr. Gruber saidagain that Dr. Stahl had told him repeatedly, when he lastsaw him, that the Verbund had to be an issuer. By the timeyou receive this I shall also have telephoned Don Swatlandof Cravath in order to have touched base with him about someof the problems.
Mr. Gruber also said that he did not think the firstmeeting of the bankers in Vienna would be before August 25th,but he will let me know tomorrow whether it is definite. Iplan to be present at that meeting, so I hope that we shallmeet in Vienna. Meanwhile, I am knee deep in preparatorySEC work up here.
All the best.
Yours as ever,
Franz M. Oppenheimer
Mr. "roehes nAuut 6, 1998
D. SozmAro
geut that you try your hand at preparizne a uraft ofe a reent etvwen us arz t1 Austrian Governnent ( M ic couldit hr he ncororated in the uar=rte Are40nt or a s. xrte
Wresuzahly the agre ent Ihould consist of the fOllIng
(1) recital of ou loan and of bond i *3ue
(2) Agreeent that if underwriters are unable Lo sell upto we will buy fron the Austrian Lovernmentat a pecifind pAce
(3) Covenant by the movernment to use the prvcuvds forequity investnent in Verbundseullachaft.
I dcut that want to nake any of the other dotaNls of currant A aet m appli al:, ut prhan y u w]1 nt to consider this.
: r. Cope
FoRM No. 27 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT(9. 57)
OUTGOING WIRECoPy
CLASS OF SERVICE: NLT DATE: AUGUST 1, 1958
TO: TISFWSTEINMINISTRY CF FINANCEVIENNA
COUNTRY( AUSTRIA)
iEXT:
Cable No.
THANKS YOUR CABLE AUGUST ONE STOP MISSION CONSISTNG OF J. H. COLLIER,
C. FINNE AND J. FILIPPI WILL ARIVE VIENNA ON CR ABOUT AUGUST EIHTEEN
STOP OUR PRESENT THINKING IS THAT TO FACILITATE JOINT OPERATION BANK
MOULD LED FOR VERBUNDGESELLSCHAFT PROJECTS WILE MARKET ISSUE MOULD
BE FOR OTHER GOVERMENT V STOP BANK MISSION WILL THEREFORE
CONFINE ITS TECHNICAL AND ECONOMIC APPRAISAL OF PROJECTS OF THOSE OF
VERBUNDGESELLSCHAFT STOP H. RIPHAN WILL ALSO ARRIVE ON AUGUST EIGHTEEN
FOR GENERAL PILICY DISCUSSIONS WITH INVESTITIONSEREDIT
COPE
AUTHORIZED BY:
NAME: S. R. Cope For Use by Archives Division
DEPT: Operations - Europe, Africa and Astralasia Checked for Dispatch
SIGNATURE: JHColer:mir(Signature of individual authorized to approve cable).
cc: Mr. Ripma and Mr. Bass -ORIGINAL (File Copy)
(IMPORTANT: See over for guide in preparing Outgoing Wire)
GUIDE FOR PREPARING OUTGOING WIRES
1. Classtof 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. The costis half the cost of full rate messages with a minumum charge for 22 words includingaddress and text.
Full Rate Full rate messages are normally transmitted and delivered immediately. There is aminimum charge for 5 words, including address and text.
IBF Govt. This is a preferential rate extended to the Bank by some of its member countries.Messages are sent at full rate speed and at about half the cost. This rate normallyshould be used whenever available. It is at present available for the followingcountries:
Bolivia Cuba Guatemala * PeruBrazil Dominican Republic Honduras * SyriaBurma Ecuador Jordan UruguayChile El Salvador * Lebanon Venezuela
* China * Ethiopia Nicaragua YugoslaviaColombia * France PakistanCosta Rica Greece Panama
* In these countries the letter telegram rate is lower than IBF government rate andshould be used for messages when immediate transmission is not required.
Code Code messages are transmitted at full rate (or IBF Govt.) speed and cost. This rateshould be used only for confidential messages to staff members having a code withthem.
Day Letter Day letters are delivered during the day of transmission and should be used only formessages in the United States and to Mexico and Canada. There is a minimumcharge 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" isregistered in Paris, Bogota, Canal Zone, Karachi, Lima, London, New York, Quito, Tegucigalpa and Tehran. TheInternational Finance Corporation cable address 'CORINTFIN" is registered in New York, Paris and London. Thename of the country of destination must always be added. (No charge is made for the name of a country.)
3. Text
Messages to Bank Missions and to Resident Representatives should be numbered. These numbers maybe obtained by calling Ext. 3008.
Type text in capital letters and double space between lines. The text should be edited to eliminateunnecessary words and unnecessary ptinctuation. If punctuatibn is needed, spell out the words "Comma,""Stop," etc.
Use common abbreviations whenever possible, i.e. reourlet, reurfive, etc. Write as one word hyphenatedwords, hyphenated names, and certain two-word groups, e.g. Airmail, Newyork, enduse.
4. Signature
Type in last name of sender. Use INTBAFRAD as part of the signature only when addressee does notknow the address of the sender.
5. Authorization
Type in name and 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 ofof cables outside of these hours.
ANY QUESTIONS REGARDING INCOMING AND OUTGOING WIRES SHOULD BE REFERRED TO THECABLE POST, EXT. 3008.
Bun&esministeriul furLand- urd Forstwirtschaft Wien, am 14.Juli 1958
Zi. 96173/2 - 43992/58
Gegenstand: Donaukraftwerk Aschach; Erklarungzum Vevorzugten Wasserbau.
B e s c h c i d.
Das Bundesmin-isterium fUr Land- und "orstwirtschaft
erklart nach hergestelltem Einvernehmen mit dem Bundesmini-
sterium fUr Verkehr und Elektrizittatswirtschaft das von der
Osterreichischen Donaukraftworke A.G.,
geplante Bauvorhaben der Errichtung eines Donaukraftwerkes
bei Aschach gema3 83 Abs.2 Wasscrrechtsgesetz als bevorzug-
ten Wasserbau.
Im Sinne des 94 Abs.3 Wasserrechtsgesetz wird als
Frist fur die Linroichung cines verhandlungsreifen Entwurfes
der 31.Marz 1959, fur die Erwirkung der wassorrchtlichen Be-
willigung der 51.Dezember 196o festgesetzt.
Durch die Bevorzugunserklarung wird dur nach den 93
und 96 Wasserrechtsgesetz noch erforderlichen wassorrechtlichen
Bewilligung und den an die Bewilligung zu knipfenden Bodingun-
gen in keiner 7loise vorgogriffen.
Fur die BevorzugungBcrklrung ist gema3 Tarifpost 105 a
der Bundesvervaltungsabgabcnvcrordnung 1957, BGB1.Nr.48, eine
Verwaltungsab-abo von S 750.- binnen 3 \ochen in Stempelmarken
dem Bundesministerium fur Land- und Forstwirtschaft (Wasser-
rechtsabteilung) zu entrichtcn.
BegrUndung.
Die Osterreichische Donaukraftwerke A.G. hat um diie
Erklarung ihres Bauvorhabens bctrcffend Lrrichtung oines Donau-
kraftwcrkes bei Aschach als tevorzugtcr Wasserbau angesucht.
Diesem Ansuchen war stattzugubon, da die boschlcunigto Aus-
fUhrung des Bauvorhabons im busonderen Interesse der bsterroi-
chischen Volkswirtschait gcligen ist.
Das Projekt fUr die Erteilung dcr wass rrochtlichcn Be-
willigung ist bercits ausgearbeitct und soll noch in diosom
Jahr bei der WasserrcchtsbehObdo cingcbracht werden.
-2-
Die gewahlte Staustelij in Strom-km 2162,7 liugt
am unteren Endo der kurvonroichsten En;streckc des bstrrci-
chischen Donautales. Dioscr Standort ist von Nai-r aus inso-
ferne zwingend vorgogeben, als nur an dieser Stellc das Zng-
tal genUgend broit und der Stromlauf hinreichend gcstrcckt
ijt, um sowohl 'Johr und Kraftwork als auch die fast 1 km lange
Schleusenanlag.- samt Vorhdfcn untorzubringen.
-Der RUckstau des Wcrkes Aschach wiid sich bei der go-
wahlten Stauhbhe 28o,o m u.A. 4okm weit bis zum Kraftwork
Jochenstein erstrecken und bis in dessen Unterwassor reichon.
Das Hauptbauwerk soll 2 km oborhalb von Aschach orrich-
tot 'werden. Die Schleusenanlago ist am rechten Ufor vorgeschon
und besteht aus 2 Kammorschlousen von je 24 m Braite und 23o m
Nutzlange mit anschlic3ondon Vorhafen im OW und U17. An das
Untorhaupt der Scllcusenanlago soll stromaufwarts das Krafthaus
anschlieen, das 4 T rbinen mit cincr Schluckfahigkeit von
jo 450 m3/s aufnehmcn wird.
Die Weh.ranlage ;wird voraussichtlich aus 5 Wehrfoldcrn von
je 24 m Lichtweite bestehen.
Das Enorgicdarcbot dos Wurkes Aschach ist das grb3to im
derzoit vorgeschencn Plan. Die gewahlte Ausbauwassermongo
von 18oo m 3/s ormbglicht in Vurbindung mit dor zugChbrigon
Nutzfallhbhe von 15,3 m cinc maxiialc Loistung von 228 000 kW.
Diu erzielbare Jahresarbcit betrdrrt rd. 1450 Mio k,.h.
Bei der ausgoglichenon 'lasserfUhrung der Donau betragt der
7interantcil der ncrgiocrzeugung- 6o6 Mio kWh odcr 42 % und
der Sommorantoil 844 Mio kWh odur 58 o der Jahrasarbeit.
Das Staugebiet der Stufo Aschach -rstrockt sich von
der Wehrstelle in Strom-ka 2162,7 bis zum Unterwasser dos K'
Jochenstein in Strom-km 2203,33. Das Littolwassur wird an dor
Wehrstello um 15,65 m aufgcstaut, aus dem bisher rasch durch-
strbmtcn, gewundonen Engtal ontstcht cin fjordartiger Borgsoe.
Die fUr die Schiffahrt bisher gufahrlichun Strbmungsvjrhaltnis-
se - besonders in der Schlbgcnor Schiling:- wurden durch den
Aufstau vollkomiein bescitigt. In Zukunft ist also in dicsem
StromabschniLt cin gufahrlcser Sclirfsvcrkchr in Burg- und 1Tal-
fahrt bei Tag und Nacht gesichert.
-3-
Ergcht gleichlautend an:
1.) die Ostorreichische Donaukraftwerke A.G. in Wien I.,HohonstaufengassC 6;
2.) das Bundeeministerium fUr Vorkehr und Elektrizitatswirt-
schaft, Sektion IV, Wien I., Schwarzenbergplatz 1;
3.) das Bundesministerium fUr Vorkehr und Elektrizitatswirt-schaft, Amt fur Schiffahrt, Wien I., Karntnerring 8;
4.) das Bundesministerium fUr Handel u. Wiederaufbau, Abtei-
lung 5, in Wien I., Regicrungagebdude-;
5.) das Amt der 0.O.Landesrgicrung in Linz;
6.) die Osterroichische Elektrizitdtswirtschafts - A.G.(Vur-
bundgcsellschaft) in Wien I., Am Hof 6;
7.) die Bezirkshauptmannschaet in Efording, 0.0.;
8.) die Bezirkshauptmannschaft in Rohrbach, 0.0.;
9.) die Bezirkshauptamnnschaft in Schdrding, 0.0.;
FUr den Bundesminister:
Dr. H a r t i g
FUr die Richtigkciter Ausfcrtigung:
AUSTRIAN EMBASSY2343 MASSACHUSETTS AVENUE, N. W.
WASHINGTON, D. C.
REF. NO. 40l-Res/58 TELEPHONE: DUPONT 7.2477
July 9, 1958.
Mr. Michael L. LejeuneAssistant Director of OperationsEurope, Africa and AustralasiaInternational Bank for Reconstructionand Development1818 H StreetN.W.Washington, D.C.
Dear Mr. Lejeune :
I refer to a telephone conversation I have had withMr. CoLlier and want to repeat to you in writing the contentsof a cable which we have received from our authorities in Vienna:
The Minister of Finance has informed the Council ofMinisters about the recent negotiations and discussions ofDr. Tefenstein in Washington and New York. The Minister ofFinance has asked the New York investment banks Kuhn, Loeb & Co.and Ladenburg, Thalmann & Co. to make the necessary preparationsfor an Austrian bond issue in the New York market, the proceedsof which are to be used for investment of the Federal Governmentand of the Verbundgesellschaft. The two investment banks wereasked to discuss between themselves an arrangement which wouldprovide for a joint management. The New York investment bankswere asked to carry out their preparatory work in coordinationwith the International Bank for Reconstruction and Developmentand to take into account the bank's reccmuandation'; in particularthe findings of the bank's mission, which, as we understand, isenvisaged for the month of August, will have to be heeded. Thechoice of projects, as well as the extent and mode of theeventual participati on of the World Bank will naturally haveto be discussed in great detail.
The Ministry of Finance is aware of the negotiationswhich have taken place between the Verbundgesellschaft and theBerliner Handelsgesellschaft with regard to a long-term loan inDM. The Ministry of Finance is also aware of the World Bank's
) -2-
attitude, and it shares the bank's feeling that final decisions,especially with regard to the participation of the World Bank,should be taken only after a detailed exchange of views withthe bank's mission. It might, however, be possible, to discusssome of the organisational and administrative details whichare li to show up,before. In any case,the Austrian Governmentattaches great importance to the advice and recommandationswhich the World Bank might wish to make with regard to theGerman credit project.
I remain,
Yours very sincerely
Financial Counselor
~ioha s. * jeunw
Auzstriarn- w Yo$ Isue
~r. 'rrels ol ru , Loeb~ Cn Crany 1ai yut A de-non tut found you outn then Cled !e. e 1aid LIM un, veb
Fad received word fro it , the Fir - ni r, tAt tk vern-rent wi Fed uhn,Noeb to 7 ead It p ns for P public isue inf York of ttrian owreent bown, th" i Y.ue to be joint with
e ring by tie -rl. Tic two t etver woud t-tl y' f .!ion.t of Sin money would be for lie vcrb nuel 1chft an! rort
wou be for t YotTian :overrnt's thr inv& ent ree.
Wit .. Ir t in viw of the A jtinc jr en;ntbetwWa i nbur , n yerbrr ese lchaft, thoverrent would elooe . (nbur , Thalrann working with aut,oeb. 'r. emuely tij that t ey wer t -revent in 1 scussion
with ienbur , am w ic wculd concluled in , few aye.he C iti n wn tht ;uhn, aoe uld lad to ave Ladonburg."Ahiann as co-Tor:7ers but, we i vmIs hinr-If Kad w t d,
un, bopb .ou7- without quontion be tic le re a would "keepthe bookl" an the aisue.
ct : r. purke Knappr. P.. Cope
r. J. e Collier
V T1 jeune/vhn
FORM No. 5 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
OFFICE MEMORANDUMTO: Files DATE: July 7, 1958
FROM: J. H. Collier
SUBJECT: Austria
This morning I received a telephone call from Franz Oppenheimerwho said that he had received a cable from Dr. Stahl. He proceededto read me a rough translation of the principal points which were asfollows.
1. Dr. Kamitz had authorized Stahl to inform Oppenheimer and theWorld Bank that he favors a joint (gemeinsam) dollar issue of theVerbundgesellschaft and the Government in New York.
2. Kamitz also "supports pursuing the Berliner Handelsgesellschaftproposal".
3. Dr. Stahl would very much like a meeting in Europe to discussthe negative pledge problem.
4. A construction program for the Verbundgesellschaft is being sub-mitted to the Government which is expected to approve it by July 21.
5. This cable had been approved (abgestimmt) by the Ministry ofFinance.
I also had a conversation with Dr. Plan of the Austrian Embassyand mentioned this cable to him. He said that the Embassy had noofficial word from Vienna on these matters and he himself took a verycautious attitude. He said that they would ask Vienna for a statementon the position which they could then give to the Bank.
We have meanwhile received a letter from Dr. Stahl, dated July 1,In this letter he makes no mention of a possible meeting in Europe but,instead, says that he needs more time to prepare his new constructionprogram. He says that program would be ready for discussion if a Bankmission would visit Austria in mid-August and concludes by suggestingthat the Washington discussions should take place in the first half ofSeptember.
JHCollier:fgs
cc: Mr. LeJeuneMr. SpottswoodMr. CancioMr. Rutland
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