India - Koyna Power Projects : Loan 0223 - Loan Agreement - Conformed

LOAN NUMBER 223 IN Loan Agreement (Koyna Power Project) BETWEEN INDIA AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED APRIL 8, 1959 LOAN NUMBER 223 IN Loan Agreement (Koyna Power Project) BETWEEN INDIA AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED APRIL 8, 1959 I Iau Agrntrnt AGREEMENT, dated April 8, 1959, between INDIA, act- ing by its President (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOP- MENT (hereinafter called the Bank). WHEREAS the Borrower and the State of Bombay have requested the Bank to assist in the financing of the Koyna power project in the State of Bombay; WHEREAS the State of Bombay will, with the Borrower's assistance, carry out the Koyna power project, and, as part of such assistance, the Borrower will make available to the State the proceeds of the loan provided for herein; and WHEREAS the Bank is willing to make a loan on the terms and conditions provided herein and in a project agreement of even date herewith between the State of Bombay and the Bank; Now THEREFORE the parties hereto hereby agree as follows: ARTICLE I Loan Regulations; Special Definitions SECTION 1.01. The parties to this Loan Agreement accept all the provisions of Loan Regulations No. 3 of the Bank dated June 15, 1956, subject, however, to the modifica- tions thereof set forth in Schedule 3 to this Agreement (said Loan Regulations No. 3 as so modified being here- inafter called the Loan Regulations), with the same force and effect as if they were fully set forth herein. SECTION 1.02. Unless the context otherwise requires, the following terms shall have the following meanings: (a) "Electricity Board" means Bombay State Electricity Board, a, body corporate organized and existing under the Electricity (Supply) Act, 1948 (LIV of 1948), of India, or any successor thereof. 4 (b) "Bombay" means the State of Bombay, a state of India, or any successor thereof. (c) "Project Agreement" means the project agreement of even date herewith between Bombay and the Bank. ARTICLE II The Loan SECTION 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in this Agreement set forth or referred to, an amount in various currencies equivalent to twenty-five million dollars ($25,000,000). SECTION 2.02. The Bank shall open a Loan Account on its books in the name of the Borrower and shall credit to such Account the amount of the Loan. The amount of the Loan may be withdrawn from the Loan Account as pro- vided in, and subject to the rights of cancellation and sus- pension set forth herein and in the Loan Regulations. SECTION 2.03. The Borrower shall pay to the Bank a commitment charge at the rate of thrce-fourths of one per cent (% of 1%) per annum on the principal amount of the Loan not so withdrawn from time to time. Such commit- ment charge shall accrue from a date sixty days after the date of this Agreement to the respective dates on which amounts shall be withdrawn by the Borrower from the Loan Account as provided in Article IV of the Loan Reg- ulations or shall be cancelled pursuant to Article V of the Loan Regulations. SECTION 2.04. The Borrower shall pay interest at the rate of five and three-fourths per cent (53/4%) per annum on the principal amount of the Loan so withdrawn and outstanding from time to time. SECTION 2.05. Except as the Borrower and the Bank shall otherwise agree, the charge payable for special com- 5 mitments entered into by the Bank at the request of the Borrower pursuant to Section 4.02 of the Loan Regulations shall be at the rate of one-half of one per cent ( of 1% ) per annum on the principal amount of any such special commitments outstanding from time to time. SECTION 2.06. Interest and other charges shall be pay- able semi-annually on May 1 and November 1 in each year. SECTION 2.07. The Borrower shall repay the principal of the Loan in accordance with the amortization schedule set forth in Schedule 1 to this Agreement. ARTICLE III Use of Proceeds of the Loan SECTION 3.01. The Borrower shall cause the proceeds of the Loan to be applied exclusively to financing the cost of goods required to carry out the Project des2ribed in Sched- ule 2 to this Agreement. The specific goods to be financed out of the proceeds of the Loan and the methods and pro- cedures for procurement of such goods shall be determined by agreement between the Borrower and the Bank, subject to modification by further agreement between them. SECTION 3.02. The Borrower shall cause all goods financed out of the proceeds of the Loan to be used in the territories of the Borrower exclusively in the carrying out of the Project. ARTICLE IV Bonds SECTION 4.01. The Borrower shall execute and deliver Bonds representing the principal amount of the Loan as provided in the Loan Regulations. SECTION 4.02. A Secretary to the Government of India in the Ministry of Finance is designated as the authorized 6 representative of the Borrower for the purposes of Section 6.12 of the Loan Regulations. ARTICLE V Particular Covenants SECTION 5.01. (a) The Borrower shall cause the Project to be carried out with due diligence and efficiency and in conformity with sound engineering and financial practices. (b) The Borrower shall take or cause to be taken all action which shall be necessary on its part to enable Bom- bay to perform all the covenants and agreements on the part of Bombay to be performed as set forth in the Project Agreement. SECTION 5.02. (a) The Borrower and the Bank shall cooperate fully to assure that the purposes of the Loan will be accomplished. To that end, each of them shall fur- nish to the other all such information as it shall reasonably request with regard to the general status of the Loan. On the part of the Borrower, such information shall include information with respect to financial and economic condi- tions in the territories of the Borrower and the interna- tional balance of payments position of 1he Borrower. (b) The Borrower and the Bank shall from time to time exchange views through their representatives with regard to matters relating to the purposes of the Loan and the maintenance of the service thereof. The Borrower shall promptly inform the Bank of any condition which inter- feres with, or threatens to interfere with, the -accomplish- ment of the purposes of the Loan or the maintenance of the service thereof. (e) The Borrower shall afford all reasonable opportu- nity for accredited representative,s of the Bank to visit any part of the territories of the Borrower for purposes related to the Loan. 7 SECTION 5.03. It is the mutual intention of the Borrower and the Bank that no other external debt shall enjoy any priority over the Loan by way of a lien on governmental assets. To that end, the Borrower undertakes that, except as the Bank shall otherwise agree, if any lien shall be created on any assets of the Borrower or of any of its political subdivisions or of any agency of the Borrower or of any such political subdivision as security for any external debt, such lien will ipso facto equally and ratably secure the payment of the principal of, and interest and other charges on, the Loan and the Bonds, and that in the creation of any such lien express provision will be made to that effect; provided, however, that the foregoing provisions of this Section shall not apply to: (a) any lien created on property, at the time of purchase thereof, solely as security for the payment of the purchase price of such property; (b) any pledge of commercial goods to secure debt matur- ing not more than one year after its date and to be paid out of the proceeds of sale of such commercial goods; or (c) any pledge by the Reserve Bank of India of any of its assets in the ordinary course of its banking business to secure any indebtedness maturing not more than one year after its date. SECTION 5.04. The principal of, and interest and other charges on, the Loan and the Bonds shall be paid without deduction for, and free from, any taxes (including duties, fees or impositions) imposed under the laws of the Bor- rower or laws in effect in its territories; provided, however, that the provisions of this Section shall not apply to taxa- tion of, or duties or fees or impositions levied upon, payments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individual or corporate resident of the Borrower. SECTION 5.05. The Loan Agreement, the Project Agree- ment and the Bonds shall be free from any taxes (including duties, fees or impositions) that shall be imposed under the laws of the Borrower or laws in effect in its territories on 8 or in connection with the execution, issue, delivery or regis- tration thereof and the Borrower shall pay all such taxes (including duties, fees or impositions), if any, imposed under the laws of the country or countries in whose currency the Loan and the Bonds are payable or laws in effect in the territories of such country or countries. SECTION 5.06. The principal of, and interest and other charges on, the Loan and the Bonds shall be paid free from all restrictions imposed under the laws of the Borrower or laws in effect in its territories. ARTICLE VI Remedies of the Bank SECTION 6.01. (i) If -any event specified in paragraph (a) or paragraph (b) of Section 5.02 of the Loan Regula- tions shall occur and shall continue for a period of thirty days, or (ii) if any event specified or referred to in para- graph (c) or paragraph (h) of Section 5.02 of the Loan Regulations -shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower, then at any subsequent time during the continuance thereof, the Bank, at its option, may declare the principal of the Loan and of all the Bonds then out- standing to be due and payable immediately, and upon any such declaration such principal shall become due and pay- able immediately, anything in this Agreement or in the Bonds to the contrary notwithstanding. SECTION 6.02. For the purposes of Section 5.02 (h) of the Loan Regulations, the following additional event is specified: a default shall have occurred in the performance of any covenant or agreement of Bombay under the Project Agreement. 9 ARTICLE VII Effective Date; Termination SECTION 7.01. The following events are specified for the purposes of Section 9.01 (b) of the Loan Regulations: (a) T..e execution and delivery of the Project Agree- ment on behalf of Bombay has been duly authorized or rati- fled by all necessary governmental action. (b) Except as the Bank may otherwise agree, all neces- sary acts, consents and approvals to be performed or given by the Borrower and Bombay or otherwise in order to authorize the construction of the Project, with all necessary powers and rights in connection therewith, have been per- formed or given. SECTION 7.02. The following are specified as additional matters, within the meaning of Section 9.02 (c) of the Loan Regulations, to be included iii the opinion or opinions to be furnished to the Bank: (a) that the Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, Bombay and constitutes a valid and binding obligation of Bombay in accordance with its terms. (b) that all acts, consents and approvals of the Bor- rower and Bombay or otherwise to be performed or given in order to authorize the construction of the Project, with all necessary powers and rights in connection therewith, have been duly and validly performed or given. SECTION 7.03. A date ninety days after the date of this Agreement is hereby specified for the purposes of Section 9.04 of the Loan Regulations. 10 ARTICLE VIII Miscellaneous SECTION 8.01. The Closing Date shall be April 30, 1965. SECTION 8.02. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: For the Borrower: The Secretary, Ministry of Finance of India New Delhi, India Alternative address for cablegrams and radiograms: Finance Ministry New Delhi For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington 25, D. C. United States of America Alternative address for cablegrams and radiograms: Intbafrad Washington, D. C. SECTION 8.03. A Secretary to the Government of India in the Ministry of Finance is designated for the purposes of Section 8.03 of the Loan Regulations. IN WITNEsS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Loan Agreement to be signed in their respective names 11 and delivered in the District of Columbia, United States of America, as of the day and year first above written. INDIA By M. C. CHAGLA Authorized Representatice INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By W. A. B. ILIFF Vice President 12 SCHEDULE 1 Amortization Schedule Paynent of Principal Date Payment Due (expressed in dollars)* May 1, 1965 $ 356,000 Nov.1, 1965 366,000 May 1, 1966 376,000 Nov. 1, 1966 387,000 May 1, 1967 398,000 Nov. 1, 1967 410,000 May 1, 1968 422,000 Nov. 1, 1968 434,000 May 1, 1969 446,000 Nov. 1, 1969 459,000 May 1, 1970 472,000 Nov. 1, 1970 486,000 May 1, 1971 500,000 Nov. 1, 1971 514,000 May 1, 1972 529,000 Nov. 1, 1972 544,000 May 1, 1973 560,000 Nov. 1, 1973 576,000 May 1, 1974 593,000 Nov. 1, 1974 610,000 May 1, 1975 627,000 Nov. 1, 1975 645,000 May 1, 1976 664,000 Nov. 1, 1976 683,000 May 1, 1977 702,000 Nov. 1, 1977 723,000 May 1, 1978 743,000 Nov. 1, 1978 765,000 May 1, 1979 787,000 Nov. 1, 1979 809,000 May 1, 1980 833,000 Nov. 1, 1980 856,000 May 1, 1981 881,000 Nov. 1, 1981 906,000 May 1, 1982 933,000 Nov. 1, 1982 959,000 May 1, 1983 987,000 Nov. 1, 1983 1,015,000 May 1, 1984 1,044,000 * To the extent that any part of the Loan is repayable in a currency other than dollars (see Loan Regulations, Section 3.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. 13 Premiums on Prepayment and Redemption The following percentages are specified as the premiums payable on repayment in advance of maturity of any part of the principal amount of the Loan pursuant to Section 2.05 (b) of the Loan Regulations or on the redemption of any Bond prior to its maturity pursuant to Section 6.16 of the Loan Regulations: Time of Prepayment or Redemption Premium. Not more than 3 years before maturity. . 1 of 1% More than 3 years but not more than 6 years before maturity.............. ..1% More than 6 years but not more than 11 years before maturity..... ...13/4% More than 11 years but not more than 16 years before maturity........... 21/2% More than 16 years but not more than 21 years before maturity .. ../.. ... 3 % More than 21 years but not more than 23 years before maturity ........... 43/4% More than 23 years before maturity.. 53/4% 14 SCHEDULE 2 Description of the Project The Project, which comprises Stage I of the Koyna hydroelectric development located about 130 miles south- east of the city of Bombay, consists of: (1) A gravity type dam across the Koyna river. The dam will be about 2,600 ft. in length at its crest and about 250 ft. high above the present river bed. The dam will create a reservoir with a capacity of ap- proximately 57,000 million cubic feet. Water from the reservoir will be diverted through tunnels and penstocks through the continental divide to an underground power plant. (2) A power plant with an initial installation of four 60 MW generating sets. All tailrace water will be emptied into the Vashisti river, adjacent to the plant, about 40 miles from the sea. The intake tunnel, surge tank, pressure shafts, powerhouse and tail- race will be constructed large enough for the installa- tion at the time of Stage II of the Koyna hydroelec- tric development of an additional 240 MW. The plant will operate under an effective head of approxi- mately 1,630 ft. (3) A double circuit 220 KV transmission line about 150 miles long to supply power to the Tata system in the Bombay-Poona area through a substation (375 MVA) located adjacent to the Trombay thermal power plant. (4) A transmission system consisting of about 44 miles of 220 KY line, about 200 miles of 110 KV line, about 210 miles of 33 KV and lower voltage lines, and not more than six substations to serve the Maharashtra region south, east and around Koyna. 15 SCHEDULE 3 Modifications of Loan Regulations No. 3 For the purposes of this Agreement the provisions of Loan Regulations No. 3 of the Bank, dated June 15, 1956, shall be deemed to be modified as follows: (a) Section 2.02 shall be deleted. (b) Section 6.17 shall be amended by inserting the words "or the Project Agreement" after the words "£the Loan Agreement." (c) Section 7.02 shall be amended by inserting the words "or the Project Agreement" after the words "the Loan Agreement." (d) Paragraph 5 of Section 10.01 is amended to read as follows: "5. The term 'Borrower' means India, acting by its President." (e) The following new paragraph is added to Section 10.01: "20. The term 'Project Agreement' means the Proj- ect Agreement (Koyna Power Project) between Bombay and the Bank and shall include any amendments made by agreement between Bom- bay and the Bank."