India - Upper Indravati Hydro Project : Credit 1356 - Credit Agreement - 3 - Conformed

OFFICITS CREDIT NUMBER 1356 IN Development Credit Agreement (Upper Indravati Hydro Project) between INDIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1983 CREDIT NUMBER 1356 IN DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated QL5.- - , 1983, between India, acting by its President/(hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) the Borrower has requested the Association to assist in the financing of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) the Borrower has also requested the Bank to provide additional assistance toward the financing of the Project and by an agreement of even date herewith between the Borrower and the Bank (hereinafter called the Loan Agreement), the Bank is agree- ing to provide such assistance in an aggregate principal amount equivalent to one hundred fifty-six million four hundred thousand dollars ($156,400,000); (C) the Borrower and the Association intend, to the extent practicable, that the proceeds of the Credit provided for in this Agreement be disbursed on account of expenditures of the Project before disbursements of the proceeds of the Loan provided for in the Loan Agreement are made; (D) the Project will be carried out by State of Orissa with the Borrower's assistance and, as part of such assistance, the Borrower will make available to State of Orissa the proceeds of the Credit as hereinafter provided; and WHEREAS the Association has agreed, on the basis inter alia of the foregoing, to extend the Credit to the Borrower upon the terms and conditions hereinafter set forth and in the Project Agreement of even date herewith between the Association, the Bank and State of Orissa; 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 Development Credit Agreements of the Association, dated June 30, 1980, with -2- the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agree- ments of the Association being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requirefl, 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) "Orissa" means the State of Orissa, a state of India, and includes any successor thereto; (b) "Project Agreement" means the agreement between the Association, the Bank and Orissa of even date herewith, as the same may be amended from time to time, and such term includes the schedule to the Project Agreement and all agreements supplemental to the Project Agreement; and (c) "Loan Agreement" means the agreement of even date here- with between the Borrower and the Bank for the purpose of the Project, as such agreement may be amended from time to time; and such term includes the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated October 27, 1980, as made applicable to such agreement, all agreements supplemental to the Loan Agreement and all schedules to the Loan Agreement. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Bor- rower, on the terms and conditions set forth or referred to in this Agreement, an amount in various currencies equivalent to one hundred fifty-six million Special Drawing Rights (SDR 156,000,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit 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 Association, for expenditures made (or, if the Association 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 Credit. - 3 - Section 2.03. Except as the Association shall otherwise agree, procurement of the goods and civil works required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of the Schedule to the Pro- ject Agreement. Section 2.04. The Closing Date shall be June 30, 1991 or such later date as the Association shall establish. The Associa- tion shall promptly notify the Borrower of such later date. Section 2.05. (a) The Borrower shall pay to the Association a commitment charge at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of the Credit not with- drawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the Development Credit Agree- ment to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or shall be cancelled. (b) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without restrictions of any kind imposed by, or in the territory of, the Borrower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. Section 2.06. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.07. Commitment charges and service charges shall be payable semiannually on February 1 and August 1 in each year. Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each February 1 and August 1 commencing August 1, 1993, and ending February 1, 2033, each installment to and including the install- ment payable on February 1, 2003, to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such prin- cipal amount. -4- Section 2.09. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) Without any limitation or restriction upon any of its other obligations under the Development Credit Agree- ment, the Borrower shall cause- Orissa to perform in accordance with the provisions of the Project Agreement all the obligations therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable Orissa 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 make the proceeds of the Credit and the Loan available to Orissa in accordance with the Borrower's standard arrangements for developmental assistance to the States of India. ARTICLE IV Remedies of the Association Section 4.01. For the purposes of Section 6.02 of the General Conditions the following additional events are specified pursuant to paragraph (h) thereof: (a) Orissa shall have failed to perform any of its obliga- tions under the Project Agreement. (b) As a result of events which have occurred after the date of the Development Credit Agreement, an extraordinary situa- tion shall have arisen which shall make it improbable that Orissa will be able to perform its obligations under the Project Agree- ment. Section 4.02. For the purposes of Section 7.01 of the General Conditions, the following additional event is specified pursuant to paragraph (d) thereof, namely, that the event speci- fied in paragraph (a) of Section 4.01 of this Agreement shall occur and shall continue for a period of sixty days after notice -5- thereof shall haye been given by the Association to the Borrower and Orissa. ARTICLE V Effective Date; Termination Section 5.01. The following events are specified as addi- tional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the Association has received the report referred to in Section 3.06 of the Project Agreement; and (b) all conditions precedent to the effectiveness of the Loan Agreement, except for the effectiveness of this Agreement, have been fulfilled. Section 5.02. The following is specified as an additional matter, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be fur- nished to the Association, namely, that the Project Agreement has been duly authorized or ratified by Orissa, and is legally bind- ing upon Orissa in accordance with its terms. Section 5.03. The date is hereby specified for the purposes of Section 12.04 of the General Condi- tions. Section 5.04. The provisions of Section 4.02 of this Agree- ment shall cease and determine on the date on which the Develop- ment Credit Agreement shall terminate or on a date thirty years after the date of this Agreement, whichever shall be the earlier. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Secretary, Additional Secretary, Joint Secretary, Director, Deputy Secretary or Under Secretary of the Department of Economic Affairs, in the Ministry of Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. -6- Section 6.02. The following addresses are specified for the purpose 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: - ECOFAIRS New Delhi For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INDEVAS Washington, D.C. 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 Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By/S 1 Regional Vice President South Asia -7- SCHEDULE I Withdrawal of the Proceeds of the Credit and of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit and of the Loan, the allocation of the amounts of the Credit and of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of Amount of the Loan the Credit Allocated Allocated (Expressed % of (Expressed in in Dollar Expenditures Category SDR Equivalent) Equivalent) to be Financed (1) Dams and 73,400,000 38,800,000 85% structures (2) Civil works 22,900,000 30,500,000 85% for power house (3) Residential 5,100,000 - 85% quarters and buildings (4) Roads and 3,200,000 - 85% bridges (5) Electrical 45,900,000 75,800,000 100% of foreign and mechanical expenditures equipment and and 100% of materials local expendi- tures (ex- factory cost) (6) Tools and 4,100,000 - 100% of foreign plant expenditures and 100% of local expendi- tures (ex- factory cost) -8- Amount of Amount of the Loan the Credit Allocated Allocated (Expressed % of (Expressed in in Dollar Expenditures Category SDR Equivalent) Equivalent) to be Financed (7) Fee 390,025 Amount due under Section 2.05 (a) of the Loan Agreement (8) Unallocated 1,400,000 10,909,975 TOTAL 156,000,000 156,400,000 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 .f 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. 3. The disbursement percentages have been calculated in com- pliance with the policy of the Association and the Bank that the proceeds of the Credit and 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, manu- facture, 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 Association or the Bank may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such Category as required to be consistent with the aforementioned policy of the Association and 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, except that withdrawals, in an - 9 - aggregate amount not exceeding the equivalent of SDR 9,200,000 may be made in respect of Categories (1), (2), (3) and (4) on account of expenditures made before that date but after April 1, 1982. 5. Notwithstanding the allocation of an amount of the Credit and of the Loan or the disbursement percentages set forth in the table in paragraph 1 above, if the Association or the Bank has reasonably estimated that the amount of the Credit and of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Cate- gory, the Association or 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 Credit and of the Loan which are then allocated to another Category and which in the opinion of the Association are not needed to meet other expendi- tures; and (ii) if such reallocation cannot fully meet the esti- mated shortfall, reduce the disbursement percentage then applic- able to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Association or the Bank shall have reasonably deter- mined that the procurement of any item in any Category is incon- sistent 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 Credit and of the Loan, and the Association or the Bank may, without in any way restricting or limiting any other right, power or remedy of the Association or the Bank under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit and of the Loan as, in the Asso- ciation's or 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 Credit and of the Loan. - 10 - SCHEDULE 2 Description of the Project The Project is designed to develop hydro-electric power through construction of dams across the river Indravati and its tributaries in the Koraput and Kalahandi districts of Orissa and consists of the following: Part A: Dams Component (i) Indravati Dam The construction of a masonry dam near the village of Patrapur with a total length of 531 meters and a maximum height of 40 meters. (ii) Podagad Dam The construction of an earth embankment dam near the village of Bariaghat with a total length of 527 meters and a maximum height of 73 meters. (iii) Kapur Dam The construction of an earth embankment dam near the village of Dandaguda with a total length of 540 meters and a maximum height of 64 meters. (iv) Muran Dam The construction of a composite dam of masonry and earth filled sections near the village of Katragarh with a total length of 484 meters and a maximum height of 61 meters. (v) Dykes The construction of four dykes on each bank of the reservoir formed by the dams totalling 2,969 meters in length and ranging in maximum height up to 20 meters. (vi) Link Channels The construction of two channels to join the Indravati and Podagad basins (1210 meter long with a maximum depth of cut 1.5 - 11 - meters) and the Kapur and Muran basins (1380 meter long with a maximum depth of cut 16 meters), with bed width of 12.4 meters. (vii) Site Services The construction of roads, bridge, residential quarters and buildings. Part B: Power Component (i) Headrace Channel The construction of a headrace channel (from the reservoir to the tunnel intake) 165 meters long and 50 meters wide, with a maximum depth of cut 24 meters, and a semicircular trash rack 35 meters in diameter at the entrance to the tunnel. (ii) Tunnel and Shafts The construction of a horseshoe section tunnel, 4.32 kilo- meters long with a diameter of 7 meters, to convey water from the intake to the surge shaft and two pressure shafts, each 330 meters long and 5.2 meters in diameter. (iii) Penstocks The installation of four steel penstocks, 790 meters long and 3.5 meters in diameter, to conduct the water from the valve house to the power house. (iv) Power House The construction of a power house housing four 150 MW turbo generating sets and associated electrical and mechanical equip- ment. (v) Electrical and Mechanical Equipment The acquisition and errection of four 150 MW turbo genera- ting sets and associated electrical and mechanical equipment in the power house to be constructed under Part B (iv) above, and its associated sub-station. - 12 - (vi) Tailrace Channel The construction of a tailrace channel, 9 kilometers long having a bed width of 20 meters and a maximum cut of 27 meters, to conduct the water to a regulating reservoir in the Hati river for the irrigation of about 109,000 hectares of land. (vii) Site Services and Facilities The construction of buildings, local power lines and sub- stations. The Project is expected to be completed by April 30, 1990. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the f day of 198 . FOR S1fCRETARY