PROTOCOL OF INTENT
BY AND BETWEEN
THE MINISTRY FOR FUEL AND ENERGY OF GEORGIA
AND
IDM FOREIGN POWER, INC.
Tbilisi November 5, 1998
The Government of Georgia, represented by the Ministry for Fuel and Energy of
Georgia, hereinafter referred to as "Georgian Party" or its assignees or
designees, on one hand and IDM Foreign Power, Inc., hereinafter referred as
"Foreign Party", or its assignees or designees, on the other hand, hereinafter
collectively referred as "Parties", recognising the important role of the energy
sector of Georgia for the development of the Georgian Economy and in expressing
their Good Will and intent of establishing long-term co-operation in the sector
have agreed as follows:
The Foreign Party, taking into consideration its resources, shall incur the
legal and economic expenses, necessary to evaluate the possibilities of
generating and selling electric energy in Georgia or elsewhere. The Georgian
Party agrees to conduct the relevant negotiations regarding the sale of certain
existing facilities for the generation of electric energy and the associated
Power Purchase Agreements.
The Foreign Party undertakes and agrees to supply all such electrical energy as
is demonstrated by the Georgian Party as being a demand in Georgia up to initial
limit of 2,000 MW.
The steps for implementing this goals consists of the following steps:
1. The Parties shall immediately initiate negotiations for the sale and
purchase or long-term lease of the energy generation facilities identified
as Gardabani, Units 1, 2, 9 and 10, including all real and chattel property
therein and referred hereinafter to as "Units" and shall complete and
execute the related documentation for this sale and the Georgian Party and
related government entities shall negotiate with the Foreign Party for the
consummation of the transaction contemplated hereby. The Parties agree,
that within 180 days of the execution of this agreement, they will agree
upon a price for the Units based upon all appropriate factors including,
without limitation, engineering and financial considerations.
2. The Foreign Party subsequent thereto, and at its own sole discretion
investigate the economic and strategic relevance of developing such
Greenfield projects as it may deem necessary in order to meet the growth in
demand of electric energy in Georgia.
3. The Georgian party shall facilitate the purchase of all such energy
generated from the facilities owned and operated by the Foreign Party at
the Foreign Party's sole discretion, and at such terms as shall be
developed between the Foreign Party and Public Sector Entities Georgian or
foreign, prepared to purchase electrical energy from Foreign Party.
4. The Georgian Party shall furthermore facilitate the issuance of all such
permits, concessions and licenses in favour of the Foreign Party as may be
required in order for Foreign Party to carry on its business in Georgia in
a financially sound and responsible manner.
5. In the event of the proposal from the Third Party, Georgian party is
obliged to inform about it the Foreign Party, and the Foreign Party shall
be given 15 days to match the proposal from the Third Party.
This Protocol of Intent is and constitutes a bidding obligation and the Parties
will do their best to collaborate and sign the Final Agreement, wherein the
intents considered and declared in this Protocol will be started further and
would become enforceable obligations for both Parties.
Executed in Tbilisi, this November 5, 1998
Georgian Party: Foreign Party:
By: /s/ By: /s/
Temur Giorgadze Xxxxxx Xxxxx, Ph.D
Minister for Fuel and Energy Director
/s/
Xxx xx Xxxx
Director
