Conformed Copy - C2986 - Coal Sector Rehabilitation Project - Guarantee Agreement

Page 1 CONFORMED COPY LOAN NUMBER 4226 IN Guarantee Agreement (Coal Sector Rehabilitation Project) between INDIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated March 19, 1998 LOAN NUMBER 4226 IN GUARANTEE AGREEMENT AGREEMENT, dated March 19, 1998, between India, acting by its President (the Guarantor), and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank). WHEREAS (A) the Guarantor and Coal India Ltd. (the Borrower), having been satisfied as to the feasibility and priority of the Project described in Schedule 2 to the Loan Agreement, have requested the Bank to assist in the financing of the Project; (B) by the Loan Agreement of even date herewith between the Bank and the Borrower, the Borrower has agreed to carry out Parts A and B of the Project and for that purpose the Bank has agreed to extend to the Borrower a loan equal to five hundred thirty million dollars ($530,000,000) on the terms and conditions set forth in the Loan Agreement, but only on condition that the Guarantor agree to guarantee the obligations of the Borrower in respect of such loan as provided in this Agreement; (C) by a Development Credit Agreement (the Development Credit Agreement) of even date herewith between the Guarantor and the International Development Association (the Association), Guarantor has agreed to carry out Part C of the Project and for that purpose, the Association has agreed to provide assistance in an aggregate principal amount equivalent to one million five hundred thousand Special Drawing Rights (SDR1,500,000) (the Credit) on the terms and conditions set forth in the Development Credit Agreement; and WHEREAS the Guarantor, in consideration of the Bank