SmithEnron Risk Management

completed

SUMMARY OF PROJECT INFORMATION (SPI)Project Name Dominican Republic-Smith-Enron Cogeneration Limited PartnershipRegion Latin AmericaSector PowerProject No 007131Projected Board Date August 25, 1995Company Name Smith-Enron CogenerationTechnical Partner and/ Enron Corp. and Smith Cogenerationor Major ShareholdersProject Cost including US$1.5 millionproposed IFC investment Location of project and Puerto Plata, Dominican RepublicDescription of site Description of Company and Purpose of ProjectThe current transaction consists of hedging the exchange rate risk represented by the fixed rate DEM15 million Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG) (the German bilateral agency) loan which is repayable over the period December 1996 to June 2005. Given that Smith-Enron''s revenues are linked to US dollars whereas the loan payments are to be made in DEM, the DEG loan would give rise to currency risk. The proposed currency swap would exactly match the DEM payments required under the DEG loan and provide a hedge, effectively transforming the liability into a fixed rate US dollar series of obligations. The currency swap transaction would be priced on the basis of standard IFC pricing guidelines for client risk management transactions. IFC''s total exposure on this risk management transaction is estimated at approximately US$1.5 million.This transaction will support the developmental objective cited in IFC''s initial investment in this power project. The proposed swap transaction would serve as a hedge to reduce the potential currency risk arising from DEM liability payments against US dollar-based revenues. The currency swap would improve the stability of the Company''s future cashflows and enhance its underlying profitability.Environmental Categories and IssuesThe proposed transaction is of a financial nature only, and accordingly is classified as a category C Project according to IFC''s environmental review guidelines and procedures.Date SPI sent to PIC August 11, 1995For additional Information contact: Corporate Relations Unit - telephone:(202) 473-7711 facsimile:(202) 676-0365.