India - Central Power Transmission Project : Loan 2283 - Loan Agreement - Conformed

DOT LOAN NUMBER 2283 IN Loan Agreement (Central Power Transmission Project) between INDIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated , 1983 LOAN NUMBER 2283 IN LOAN AGREEMENT AGREEMENT, dated , 1983, between INDIA, acting by its Presiden (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS (A) the Borrower has requested the Bank to assist in the financing of the Project described in Schedule 2 to this Agreement by making the Loan as hereinafter provided; (B) the Project will be carried out by the National Thermal Power Corporation Limited with the Borrower's assistance and, as part of such assistance, the Borrower will make available to the National Thermal Power Corporation Limited the proceeds of the Loan as hereinafter provided; and WHEREAS the Bank has agreed, on the basis, inter alia, of the foregoing, to make the Loan available to the Borrower upon the terms and conditions set forth hereinafter and in the Project Agreement of even date herewith between the Bank and the National Thermal Power Corporation Limited; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated October 27, 1980, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Guarantee Agree- ments of the Bank being hereinafter called the General Condi- tions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "NTPC" means National Thermal Power Corporation Limited, a company registered under the Companies Act, 1956, as amended, of the Borrower; -2- (b) "Project Agreement" means the agreement between the Bank and NTPC of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement and all agreements supplemental to the Project Agreement; and (c) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and NTPC pursuant to Section 3.01 (b) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Loan Agreement. ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to two hundred fifty million seven hundred thousand dollars ($250,700,000). Section 2.02. The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Bank, for expendi- tures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Loan. Section 2.03. Except as the Bank shall otherwise agree, pro- curement of the goods and civil works required for the Project and to be financed out of the proceeds of the Loan shall be gov- erned by the provisions of the Schedule to the Project Agreement. Section 2.04. The Closing Date shall be March 31, 1989 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. Section 2.05. (a) The Borrower shall pay to the Bank a fee equivalent to six hundred twenty-five thousand one hundred eighty-seven dollars ($625,187). (b) On or promptly after the Effective Date, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account - 3 - and pay to itself the amount of the said fee in such currency or currencies as the Bank shall determine. Section 2.06. The Borrower shall pay to the Bank a commit- ment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.07. (a) The Borrower shall pay interest on the principal amount of the Loan withdrawn and outstanding from time to time at a rate per annum for each Interest Period equal to one half percent per annum above the Cost of Qualified Borrowings for the last Semester ending prior to the commencement of such Interest Period. (b) As soon as practicable after the end of each Semester, the Bank shall notify the Borrower of the Cost of Qualified Borrowings for such Semester. (c) For purposes of this Section: (i) "Interest Period" means the six-month period commencing on each date specified in Section 2.08 of this Agreement, including the Interest Period in which this Agreement is signed. (ii) "Cost of Qualified Borrowings" means the cost, expressed as a percentage per annum, as reasonably determined by the Bank, provided that the amount of $8,520.5 million referred to in (iii) (B) hereunder shall be reckoned at a cost of 10.93% per annum. (iii) "Qualified Borrowings" means: (A) outstanding borrowings of the Bank drawn down after June 30, 1982; and (B) until July 1, 1985, the amount of $8,520.5 million (representing borrowings of the Bank between July 1, 1981 and June 30, 1982) less any part thereof repaid earlier than July 1, 1985. (iv) "Semester" means the first six months or the second six months of a calendar year. Section 2.08. Interest and other charges shall be payable semiannually on March 1 and September 1 in each year. -4- Section 2.09. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. ARTICLE III Execution of the Project Section 3.01. (a) Without any limitation or restriction upon any of its other obligations under the Loan Agreement, the Borrower shall cause NTPC to perform in accordance with the pro- visions of the Project Agreement all the obligations of NTPC therein set forth, shall take or cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable NTPC to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) The Borrower shall relend the proceeds of the Loan to NTPC under a subsidiary loan agreement to be entered into between the Borrower and NTPC, under terms and conditions which sha'l have been approved by the Bank which shall, except as the Bank shall otherwise agree, include interest at an effective rate of not less than 12% per annum on the principal amount so relent and withdrawn by NTPC and outstanding from time to time, and repay- ment over a period of twenty years, including therein a period of grace of five years. (c) The Borrower shall exercise its rights under the Subsi- diary Loan Agreement in such manner as to protect the interests of the Borrower and the Bank and to accomplish the purposes of the Loan, and, except as the Bank shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. ARTICLE IV Other Covenants Section 4.01. (a) It is the policy of the Bank, in making loans to, or with the guarantee of, its members not to seek, in normal circumstances, special security from the member concerned but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distribution of foreign exchange held under the control or for the benefit of -5- such member. To that end, if any lien shall be created on any public assets (as hereinafter defined), as security for any external debt, which will or might result in a priority for the benefit of the creditor of such external debt in the allocation, realization or distribution of foreign exchange, such lien shall, unless the Bank shall otherwise agree, ipso facto and at no cost to the Bank, equally and ratably secure the principal of, and interest and other charges on, the Loan, and the Borrower, in creating or permitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any constitutional or other legal reason such provision cannot be made with respect to any lien created on assets of any of its political or administrative subdivisions, the Borrower shall promptly and at no cost to the Bank secure the principal of, and interest and other charges on, the Loan by an equivalent lien on other public assets satisfactory to the Bank. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property or as security for the payment of debt incurred for the purpose of financing the purchase of such property; and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. (c) As used in this Section, the term "public assets" means assets of the Borrower, of any political or administrative subdi- vision thereof and of any entity owned or controlled by, or operating for the account or benefit of, the Borrower or any such subdivision, including gold and foreign exchange assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Borrower. Section 4.02. (a) When, with respect to any goods required for the Project, the contract is awarded for goods to be supplied from outside of India, the Borrower shall promptly grant permis- sion to import the goods covered by the contract and all foreign exchange required therefor shall be promptly made available. (b) When, with respect to any goods required for the Project, the contract is awarded for goods to be manufactured in India, the Borrower shall: (i) promptly upon receipt of the appropriate applications, issue, or cause to be issued, such import licenses as shall be required to implement the contract; - 6 - (ii) make available, promptly as needed, all foreign exchange which shall be required therefor; and (iii) with respect to locally produced materials which are subject to allocation, make or cause to be made, allocations of such materials promptly and in such quan-ities as shall be required for such contract. ARTICLE V Remedies of the Bank Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (k) thereof: (a) NTPC shall have failed to perform any of its obliga- tions under the Project Agreement. (b) A subsidiary or any other entity shall have been created or acquired or taken over by NTPC, if such creation, acquisition or taking over would materially and adversely affect the conduct of NTPC's business or NTPC's financial condition or the efficiency of NTPC's management and personnel or the carrying out of the Project. (c) As a result of events which have occurred after the date of the Loan Agreement, an extraordinary situation shall have arisen which shall make it improbable that NTPC will be able to perform its obligations under the Project Agreement. (d) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of NTPC or for the suspension of its operations. (e) A change shall have been made in the Memorandum and Articles of Association of NTPC dated November 7, 1975, amended to the date of this Agreement, without the consent of the Bank which would materially and adversely affect the financial condi- tion or operations of NTPC. Section 5.02. For the purposes of Section 7.01 of the Gen- eral Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) any event specified in paragraphs (a) and (b) of Sec- tion 5.01 of this Agreement 3hall occur and shall continue for a - 7 - period of sixty days after notice thereof shall have been given by the Bank to the Borrower and NTPC; and (b) any event specified in paragraphs (d) and (e) of Sec- tion 5.01 of this Agreement shall occur. ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as addi- tional conditions to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Condi- tions: (a) the Subsidiary Loan Agreement has been executed on behalf of the Borrower and NTPC; and (b) NTPC has entered into bulk supply contracts for the sale of electricity with such State Electricity Boards as are allocated a share of the supply from NTPC's thermal power stations in Singrauli and Korba. Section 6.02. The following are specified as additional matters, within the meaning of Section 12.02 (c) of the General Conditions, to be included in the opinion or opinions to be furnished to the Bank: (a) that the Project Agreement has been duly authorized or ratified by NTPC, and is legally binding upon NTPC in accordance with its terms; and (b) that the Subsidiary Loan Agreement has been duly authorized or ratified by the Borrower and NTPC and is legally binding upon the Borrower and NTPC in accordance with its term. Section 6.03. The date L , /9 V, is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Secretary, Additional Secretary, Joint Secretary, Director, Deputy Secretary or Under Secretary in the - 8 - Ministry of Finance, Department of Economic Affairs of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: The Secretary to the Government of India Ministry of Finance Department of Economic Affairs New Delhi, India Cable address: Telex: ECOFAIRS 953-31354 New Delhi For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) -9- IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. INDIA By 49J Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Regional Vice President South Asia - 10 - SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Equipment and 235,000,000 100% of foreign materials expenditures and 100% of local expenditures (ex-factory cost) (2) Consultants' 2,500,000 100% services (3) Fee 625,187 Amount due under Section 2.05 (a) of this Agreement (4) Unallocated 12,574,813 TOTAL 250,700,000 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Borrower for goods or services supplied from the territory of any country other than that of the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower. - 11 - 3. The disbursement percentages have been calculated in com- pliance with the policy of the Bank that the proceeds of the Loan shall not be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; on this basis, if the amount of any such taxes levied on or in respect of items in any Category decreases or increases, the Bank may, by notice to the Borrower, increase or decrease the dis- bursement percentage then applicable to such Category as required to be consistent with the aforementioned policy of the Bank. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of expenditures made prior to the date of this Agreement. 5. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in paragraph 1 above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Cate- gory, the Bank may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet other expenditures; and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disburse- ment percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Bank shall have reasonably determined that the pro- curement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditure for such item shall be financed out of the proceeds of the Loan, and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as, in the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan. - 12 - SCHEDULE 2 Description of the Project The Project is designed to support the Borrower's power development program and consists of the following: Part A: 400 kV Transmission Lines The installation of about 550 km of double-circuit lines between Ramagundam and Mangur, Mangur and Vijayawada, and Ramagundam and Chandrapur, and about 560 km of single-circuit lines between Vijayawada and Nellore, Nellore and Red Hills, and Singrauli and Vindhyachal. Part B: 400/220 kV Substations Extension of substations at Chandrapur, Ramagundam, Singrauli, Vindhyachal and Red Hills to connect relevant 400 kV transmission lines, and construction of new substations at Mangur, Vijayawada and Nellore, each including a 400/220 kV transformer of 315 MVA capacity. Part C: 500 MW HVDC Substation The construction of a 500 MW twin module (two 250 MW) High Voltage Direct Current (HVDC) back-to-back substation at Vindhyachal. Part D: Metering and Instrumentation Installation of tariff metering systems and disturbance recorders in important substations of the Northern, Western and Southern Regional grids. Part E: Communications The acquisition and utilization of power line carrier communication (PLCC) equipment for speech transmission, line protection and data transmission on each 400 kV transmission line. Part F: Technical Services Utilization of technical services for the carrying out of detailed equipment and system engineering, and supervision during