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## 7.  Bank balances and loans (continued) 

## NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

## CONSOLIDATED WATER CO. LTD. 

(Expressed in United States dollars) 

As at December 31, 2000, the total lending facility made available by the Royal Bank of Canada comprises a revolving line of credit with a limit of $1,000,000, bearing interest at New York Prime plus 1%, and term loans with a limit of $4,000,000, bearing interest at LIBOR plus 1.5%. Any amounts drawn down under the line of credit and any term loans are collateralised by a fixed and floating charge (“the first charge”) of $2,500,000 (to be increased to maximum of $5,500,000). The fixed charge covers land owned by the Company and the floating charge covers all other assets of the Company, except those assets charged in connection with the Water Purchase Agreement (see Note 14). Of this facility, a bank overdraft of $703,331 was outstanding at December 31, 2000 (1999: $651,606). 

During 1991, in order to fund an extension to the water distribution system, the European Investment Bank, Luxembourg (the "bank"), agreed to loan the US$ equivalent of 2 million European Currency Units (approximately US$2.5 million at that time). The loan is guaranteed by the Overseas Development Administration ("ODA") of the Foreign and Commonwealth Office of the Government of the United Kingdom and is repayable in 24 semi annual installments, which commenced on December 20, 1994. The interest rate for the entire term is fixed at the bank's prevailing lending rate, less a subsidy of 4% per annum, at the date each tranche is drawn down. 

The rates of interest applicable to, and the amounts of each tranche at the current year end exchange rates are: 

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Of the final tranche, at December 31, 2000 the equivalent of $60,034 (1999: $76,726) is repayable in pounds sterling, all other obligations under this loan are repayable in United States dollars. 

The Government of the Cayman Islands have, for a fee of 1% per annum, provided a counter guarantee to the ODA. The Company, with the approval of the Royal Bank of Canada, the holder of the first charge, has agreed to secure the counter guarantee by a second charge over all assets of the Company. 

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