India - Damodar Project : Loan 0072 - Loan Agreement - Conformed

LOAN NUMBER 72 IN Loan Agreement (Damodar Project) BETWEEN INDIA AMD INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED JANUARY 23, 1953 PRESS OF BYRON S. ADAMS, WASHINGTON loan Zgreement AGREEMENT, dated January 23, 1953, between INDIA, acting by its President, party of the first part and INTER- NATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank), party of the second part. ARTICLE I Loan Regulations; Special Definitions SECTION 1.01. The parties to this Agreement accept all the provisions of Loan Regulations No. 3 of the Bank, dated October 15, 1952, subject, however, to the modifica- tions thereof set forth in Schedule 3 to this Agreement (such Loan Regulations No. 3 as so modified being herein- after called the Loan Regulations), with the same force and effect as if they were fully set forth herein, provided that the term Borrower means India, acting by its President. SECTION 1.02. The term Damodar means Damodar Val- ley Corporation, a corporation organized and existing un- der the laws of India. The term Project Agreement means the agreement of even date herewith between the Bank and Damodar. The term Participating Government means the Bor- rower and the States of Bihar and West Bengal and any other government which shall be added as a participating government by amendment of the Damodar Valley Corpo- ration Act, 1948, or any successor of any of the foregoing. 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 4 referred to, the sum of nineteen million five hundred thou- sand dollars ($19,500,000), or the equivalent thereof in currencies other than dollars. 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 The amount of the Loan may be withdrawn from the Loan Account as pro- vided in, and subject to the rights of cancellation and sus- pension set forth in, the Loan Regulations. SECTION 2.03. For the purposes of Section 2.02 of the Loan Regulations three-fourths of one per cent (% of 1%) per annum is specified as the rate of commitment charge and a date 90 days after the date of this Agreement or the Effective Date, whichever shall be the earlier, is specified as the date from which it will commence to accrue. SECTION 2.04. The rate of interest specified for the pur- poses of Section 2.03 of the Loan Regulations is four and seven-eighths per cent (4%% o) per annum. SECTION 2.05. Except as the Borrower and the Bank shall otherwise agree, the charge payable for special com- mitments entered into by the Bank at the request of the Borrower pursuant to Section 4.02 of the Loan Regula- tions shall be at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of any such spe- cial commitment outstanding. SECTION 2.06. Interest and other charges shall be pay- able semi-annually on January 15 and July 15 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. 0 5 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 the cost of goods which will be required for the carrying out of the Project described in Schedule 2 to this Agreement. The specific goods to be purchased out of the proceeds of the Loan shall be determined by agreement between the Borrower and the Bank, and the list of such goods may be modified from time to time by agreement between them. SECTION 3.02. The Borrower shall cause all goods pur- chased in whole or in part with the proceeds of the Loan to be used in the territories of the Borrower exclusively in the carrying out and operation 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, and such person or persons as he shall appoint in writing, or any of them, are designated as authorized representatives of the Borrower for the pur- poses 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 and completed with due diligence and efficiency and in conformity with sound engineering and financial practices. 6 (b) The Borrower shall cause Damodar punctually to perform all the covenants and agreements on its part to be performed as set forth in the Project Agreement, and shall take or cause to be taken all action which shall be necessary in order to enable Damodar to perform such covenants and agreements. (c) The Borrower shall provide or cause to be provided as capital payments to Damodar the funds required for the carrying out and completion of the Project. 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 furnish to the other all such information as it shall reas- onably 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 eco- nomic conditions in the territories of the Borrower and the international balance of payments position of the 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 shall arise that shall interfere with, or threaten to interfere with, the accomplishment of the purposes of the Loan or the maintenance of the service thereof. (c) The Borrower shall afford all reasonable oppor- tunity for accredited representatives of the Bank to visit any part of the territories of the Borrower for purposes related to the Loan. SECTION 5.03. It is the mutual intention of the Bor- rower and the Bank that no other external debt shall en- joy any priority over the Loan by way of a lien on gov- 0 7 ernmental 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 as security for any external debt, such lien will ipso facto equally and ratably secure the payment of the principal of, and inter- est 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 fore- going provisions of this Section shall not apply to (i) any lien created on property, at the time of purchase thereof, solely as security for the payment of the purchase price of such property; (ii) any lien on commercial goods to se- cure a debt maturing not more than one year after the date on which it is originally incurred and to be paid out of the proceeds of sale of such commercial goods; or (iii) any lien arising in the ordinary course of bank trans- actions to secure a debt maturing not more than one year after the date on which it is originally incurred. The word Borrower as used in this Section means the Borrower or any of its political subdivisions or any agency of any of the foregoing, including the Reserve Bank of India. 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, how- ever, that the provisions of this Section shall not apply to taxation of, or duties or fees or impositions upon, pay- ments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individ- ual 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 (includ- ing duties, fees or impositions) that shall be imposed S 8 under the laws of the Borrower or laws in effect in its territories on or in connection with the execution, issue, delivery or registration thereof and the Borrower shall pay all such taxes (including duties, fees and impositions), if any, imposed under the laws of the country or countries in whose currency or currencies the Loan and the Bonds are payable or laws in effect in the territories of such coun- try 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. SECTION 5.07. The Borrower shall cause to be provided the funds necessary to replace or repair any goods pur- chased in whole or in part with the proceeds of the Loan which shall be damaged, destroyed or lost. ARTICLE VI Remedies of the Bank SECTION 6.01. If any event specified in paragraph (a) or paragraph (b) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of thirty days or if any event specified in paragraphs (c) or (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 sub- sequent time during the continuance thereof, the Bank, at its option, may declare the principal of the Loan and of all the Bonds then outstanding to be due and payable immediately, and upon any such declaration such principal shall become due and payable immediately, anything in this Agreement or in the Bonds to the contrary notwith- standing. S 9 ARTICLE VII Effective Date; Termination SECTION 7.01. The following events .are specified as ad- ditional conditions to the effectiveness of this Agreement within the meaning of Section 9.01 (b) of the Loan Regu- lations: (a) that the execution and delivery of the Project Agree- ment on behalf of Damodar shall have been duly author- ized or ratified by all necessary action of Damodar; (b) that all necessary acts, consents and approvals to authorize the construction and operation of the Project by Damodar with all necessary powers and rights in con- nection therewith shall have been performed 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 in the opinion or opinions to be furnished to the Bank: (a) that Damodar has full power and authority to con- struct and operate the Project and has all necessary rights and powers in connection therewith and that all acts, con- sents and approvals of each of the Participating Govern- ments necessary therefor have been duly and validly per- formed or given; (b) that the Project Agreement has been duly au- thorized by, and executed and delivered on behalf of, Da- modar and is a valid and binding obligation of Damodar in accordance with its terms. SECTION 7.03. A date 90 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 June 30, 1956. 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, Government of India, New Delhi, India. For the Bank: International Bank for Reconstruction and Development, 1818 H Street, N.W., Washington 25, District of Columbia, United States of America. 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 Agreement to be signed in their respective names and delivered in the District of Columbia, United States of America, as of the day and year first above written. INDIA By G. L. MEHTA Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By EUGENE R. BLACK President S 11 SCHEDULE1 Amortization Schedule Principal Payment of Amount Outstanding Principal After Each (expressed Payment (expressed Date Payment Due in dollars) * in dollars) * January 15, 1956 - $19,500,000 July 15, 1956 $262,000 19,238,000 January 15, 1957 268,000 18,970,000 July 15, 1957 275,000 18,695,000 January 15, 1958 281,000 18,414,000 July 15, 1958 288,000 18,126,000 January 15, 1959 295,000 17,831,000 July 15, 1959 302,000 17,529,000 January 15, 1960 310,000 17,219,000 July 15, 1960 317,000 16,902,000 January 15, 1961 325,000 16,577,000 July 15, 1961 333,000 16,244,000 January 15, 1962 341,000 15,903,000 July 15, 1962 349,000 15,554,000 January 15, 1963 358,000 15,196,000 July 15, 1963 367,000 14,829,000 January 15, 1964 376,000 14,453,000 July 15, 1964 385,000 14,068,000 January 15, 1965 394,000 13,674,000 July 15, 1965 404,000 13,270,000 January 15, 1966 414,000 12,856,000 July 15, 1966 424,000 12,432,000 January 15, 1967 434,000 11,998,000 July 15, 1967 444,000 11,554,000 January 15, 1968 455,000 11,099,000 July 15, 1968 466,000 10,633,000 January 15, 1969 478,000 10,155,000 July 15, 1969 489,000 9,666,000 January 15, 1970 501,000 9,165,000 July 15, 1970 514,000 8,651,000 January 15, 1971 526,000 8,125,000 July 15, 1971 539,000 7,586,000 January 15, 1972 552,000 7,034,000 July 15, 1972 565,000 6,469,000 January 15, 1973 579,000 5,890,000 July 15, 1973 593,000 5,297,000 January 15, 1974 608,000 4,689,000 July 15, 1974 623,000 4,066,000 January 15, 1975 638,000 3,428,000 July 15, 1975 653,000 2,775,000 January 15, 1976 669,000 2,106,000 July 15, 1976 686,000 1,420,000 January 15, 1977 702,000 718,000 July 15, 1977 718,000 - * To the extent that any part of the Loan is repayable in a cur- rency other than dollars (see Loan Regulations, Section 3.02) the figures in these columns represent dollar equivalents determined as for purposes of withdrawal. 12 Premiums on Prepayment and Redemption The following percentages are specified as the premi- ums payable on repayment in advance of maturity of any part of the principal amount of the Loan pursuant to Sec- tion 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: Tine of Prepayment or Redemiption Premium Not more than 5 years before maturity /2% More than 5 years but not more than 10 years before maturity 1% More than 10 years but not more than 15 years before maturity 1% More than 15 years but not more than 20 years before maturity 2% More than 20 years before maturity 2%7 13 SCHEDULE 2 Description of the Project The Project, located in the Damodar Valley and adja- cent areas in the states of Bihar and West Bengal, will consist of two multi-purpose dams; two hydroelectric power plants to be connected to the Damodar Valley grid; and an irrigation system including a barrage, and irriga- tion and navigation canals. Maithon The Maithon Dam and Hydroelectric Generating Plant will be situated on the Barakar River eight miles above its confluence with the Damodar River. The multi-purpose dam will be a combination of earth and concrete gravity construction rising about 162 feet above the river bed, its primary function being flood control, although it will also be used for irrigation and power. The reservoir created behind the dam will have a capacity of 1,104,000 acre feet. The underground power plant will have a generating ca- pacity of 60,000 kilowatts. Panchet Hill The P.anchet Hill Dam and Hydroelectric Generating Plant will be situated on the Damodar River approxi- mately 13 miles 'above its junction with the Barakar River. The dam will be a combination of earth and concrete gravity construction rising about 133 feet above the river bed. Like Maithon, the dam will be multi-purpose, with flood control its primary function. The reservoir created be- hind the dam will have a total capacity of 1,214,000 acre feet. The power plant, with a generating capacity of 40,- 000 KW, will be of conventional above ground design. The reservoirs will be stocked with fish. 0 14 Durgapur Barralge and Irrigation System The Durgapur Barrage will be constructed at Durgapur on the lower Damodar River, about nine miles upstream from the Anderson Weir, and will be of the floating raft type constructed over three lines of sheet piling. The structure will include gates for releasing water, a lock for navigation, fish ladders and a roadway. The length of the concrete section of the barrage will be 2,305 feet. The right bank regulator is designed to pass 2,130 cubic feet per second and the left bank, 9,400. The main irri- gation canal, which will also be used for navigation, will connect the Damodar and Hooghly Rivers and will be approximately 80 miles long with an average width of 60 feet and minimum depth of 9 feet. On the left bank be- sides the main canal there will be about 800 miles of branch canals and ditches, 398 miles of drainage channels and 50 miles of old canals which will be rehabilitated. The right bank system will consist of about 850 miles of main canals and ditches. There will also be lower locks at the Kunti River, regulators, falls and bridges. The two hydroelectric plants will be located on and con- nected to the Damodar Valley transmission grid already under construction by Damodar. Water will be supplied for industrial and domestic use. SCHEDULE 3 Modifications of Loan Regulations No. 3 For the purposes of this Agreement, Loan Regulations No. 3 of the Bank, dated October 15, 1952, shall be deemed to be modified by the deletion of paragraph (h) of Section 5.02 and the substitution therefor of the following: "(h) if default shall be made in the performance of any covenant or agreement on the part of Damo- dar set forth in the Project Agreement or in the Project Agreement between the Bank and Damo- dar dated April 18, 1950."