Zambia - Third Highway Project : Loan 1566 - Loan Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1566 ZA Loan Agreement (Third Highway Project) between REPUBLIC OF ZAMBIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated June 27, 1978 LOAN NUMBER 1566 ZA LOAN AGREEMENT AGREEMENT, dated June 27, 1978, between REPUBLIC OF ZAMBIA (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 foreign exchange cost of the Project described in Schedule 2 to the Development Credit Agreement referred to in (B) below by making the Loan as hereinafter pro- vided; (B) the Borrower has also requested the International Devel- opment Association (hereinafter called the Association) to pro- vide additional assistance towards the financing of the foreign exchange cost of the Project and by an agreement of even date herewith between the Borrower and the Association (hereinafter called the Development Credit Agreement) the Association is agreeing to provide such assistance in an aggregate principal amount equivalent to eleven million two hundred and fifty thousand dollars ($11,250,000); and (C) the Borrower and the Bank intend, to the extent practi- cable, that the proceeds of the Credit provided for in the Devel- opment Credit Agreement be disbursed on account of expenditures on the Project before disbursements of the proceeds of the Loan provided for in this Agreement are made; WHEREAS the Bank has agreed, on the basis inter alia of the foregoing, to make the Loan to the Borrower upon the terms and conditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE 1 General Conditions; Definitions Section 1.01. The parties to this Agreement accept ell the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank being hereinafter called the General Conditions). - 2 - Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions, in the Preamble to this Agreement and in the Development Credit Agreement have the respective meanings therein set forth. 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 eleven million two hundred and fifty thousand dollars ($11,250,000). Section 2.02. The amount of the Loan may be withdrawn irom the Loan Account in accordance with the provisions of Schedule 1 to the Development Credit Agreement, as such Schedule may be amended from time to time by agreement between the Borrower, the Bank and the Association, for expenditures 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, procurement of the goods to be financed out of the proceeds of the Loan, shall be governed by the provisions of Schedule 3 to the Development Credit Agreement. Section 2.04. The Closing Date shall be June 30, 1983 or such later date as the Bank shall otherwise establish. The Bank shall promptly notify the Borrower of such later date. Section 2.05. The Borrower shall pay to the Bank a commitment 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 2.06. The Borrower shall pay interest at the rate of seven and one-half per cent (7.50%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semiannually on May 1 and November 1 in each year. Section 2.08. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in the schedule to this Agreement. ARTICLE III Execution of the Project Section 3.01. The Borrower undertakes towards the Bank the same obligations it is undertaking towards the Association pur- suant to Articles III and IV of the Development Credit Agreement, with the same force and effect as if such provisions were fully set forth herein; provided, however, that all references to the Association and the Credit in such Articles shall be deemed to be references to the Bank and the Loan, respectively. Section 3.02. All action taken by, and any notice given to, the Association pursuant to the Development Credit Agreement shall, unless the context shall require otherwise, be deemed to be taken or given also by or to the Bank. 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 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 Local Authorities, the Borrower shall promptly and at no cost to the Bank secure the principal of, and interest and other -4- 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; 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 or of any Local Authority and of any entity owned or controlled by, or operating for the account or benefit of, the Borrower or any such Local Authority, including gold and other foreign exchange assets held by any institution performing the functions of a central bank or exchange stabili- zation fund, or similar functions, for the Borrower. ARTICLE V Effective Date; Termination Section 5.01. The following event is specified as an addi- tional condition to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions, namely, that the conditions precedent to the effectiveness of the Development Credit Agreement, other than the condition set forth in Section 5.01 (a) thereof, have been fulfilled. Section 5.02. The date September 28, 1978, is hereby speci- fied for the purposes of Section 12.04 of the General Conditions. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Minister of the Borrower is designated as representative of the Eorrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: -5- For the Borrower: Ministry of Finance P.O. Box R.W. 62 Ridgeway, Lusaka, Zambia Cable address: Telex: FINANCE ZA 42221 Ridgeway Lusaka For the Bank: International Bank for Reconstruction and Development 1818 H Street, IT.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) 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 Paris, French Republic, as of the day and year first above written. REPUBLIC OF ZAMBIA By /s/ J.M. Mwanakatwe Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Is/ W.A. Wapenhans Regional Vice President Eastern Africa - 6 - SCHEDULE Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each May 1 and November 1 beginning November 1, 1983 through May 1, 1998 375,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equiva- lents determined as for purposes of withdrawal. -7- Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05 (b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 1.15% More than three years but not more than six years before maturity 2.25% More than six years but not more than eleven years before maturity 4.15% More than eleven years but not more than sixteen years before maturity 6.00% More than sixteen years but not more than eighteen years before maturity 6.75% More than eighteen years before maturity 7.50%