Zambia - Third Railway Project : Loan 1790 - Loan Agreement - Conformed

F3T AL LOAN NUMBER 1790 ZA DOCMENTS Loan Agreement (Third Railway Project) between THE REPUBLIC OF ZAMBIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated , 1980 LOAN NUMBER 1790 ZA LOAN AGREEMENT AGREEMENT, dated ATUA-L 3 , 1980, between THE REPUBLIC OF ZAMBIA (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS (A) the Bo'rrower 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, as hereinafter defined, by making the Loan as hereinafter provided; (B) the Borrower has also requested International Develop- ment Association (hereinafter called the Association) to provide additional assistance towards the financing 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 fifteen million dollars ($15,000,000) (hereinafter called the Credit); (C) the Borrower and the Bank intend, to the extent practi- cable, that the proceeds of the Credit provided for in the Develop- ment 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; (D) by agreement of even date herewith (hereinafter called the Special Action Credit Agreement), the Association, as Adminis- trator of the Special Action Account established by the Associa- tion with funds contributed by the Memb6r States of the European Economic Community (hereinafter called the Administrator), has agreed to make a Special Action Credit (hereinafter called the Special Action Credit) to the Borrower in various currencies equivalent to about five million dollars ($5,000,000) to assist in financing the Project; (E) the Borrower also intends to contract from other finan- ciers, loans credits and grants in an aggregate amount equivalent to about eighty-nine million one hundred and fifty thousand dollars ($89,150,000) to assist in financing the Project on the terms and conditions set forth in agreements to be entered into between the Borrower and said other financiers; -2- (F) the Project will be carried out by Zambia Railways Board (hereinafter called ZR) with the assistance of the Zambia Industrial and Mining Corporation Limited (hereinafter called ZIMCO) and the Borrower and, as part of such assistance, the Borrower will make available to ZR the proceeds of the Loan as hereinafter provided; and WHEREAS the Bank has agreed, on the basis inter alia of the foregoing, to make the Loan available to the Borrower upon the terms and conditions set forth hereinafter and in a joint project agreement of even date herewith among the Bank, the Association, the Administrator, ZIMCO and ZR; 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 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). 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 twenty-five million dollars ($25,000,000). Section 2.02. The amount of the Loan may be withdrawn from 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 -3 - 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 and civil works to be financed out of the proceeds of the Loan, shall be governed by the provisions of Schedule 1 to the Project Agreement. Section 2.04. The Closing Date shall be September 30, 1984 or such later date as the Bank shall 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 ninety-five hundredths per cent (7.95%) 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 15 and November 15 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 Schedule 3 to this Agreement. Section 2.09. The General Manager of ZR is designated as representative of the Borrower for the purposes of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions. 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 Article III of the Development Credit Agreement. Said Article III is hereby incorporated into this Agreement with the same force and effect as if it were fully set forth herein; provided, however, that all references to the Association and the Credit in said Article shall be deemed to be references to the Bank and the Loan, respectively. Section 3.02. As long as any part of the Loan provided for under this Agreement shall remain outstanding and unpaid, all action taken by, and any notice given to, the Association pursuant to the Development Credit Agreement shall, unless the context otherwise requires, be deemed to be taken or given also by or to the Bank and all information, including reports, furnished by the Borrower to the Association shall be deemed to be furnished also 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 political or adminis- trative subdivisions, the Borrower shall promptly and at no cost to the Bank secure the principal of, and interest and other 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; - 5 - 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, of any political or administrative subdivision thereof and of any entity owned or controlled by, or operating for the account or benefit of, the Borrower or any such subdivision, including gold and other foreign exchange assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Borrower. ARTICLE V Remedies of the Bank Section 5.01. The events set forth in Sections 4.01 P-J 4.02 of the Development Credit Agreement are specified as aditional events pursuant to paragraph (k) of Section 6.02 and paragraph (h) of Section 7.01, respectively, of the General Conditions. ARTICLE VI Effective Date; Termination Section 6.01. 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 all conditions precedent to the effectiveness of the Development Credit Agreement, except only the effectiveness of this Agreement, shall have been fulfilled. Section 6.02. The dateOA0DP'D 1is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VII Representatives of the Borrower; Addresses Section 7.01. The Minister of the Borrower at the time responsible for Finance is designated as representative of the Borrower for the purposes of Section .1.03 of the General Condi- tions. -6- Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: 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, N.W. Washington, D.C. 20433 United States of America Cable address: Tclex: 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 the District -7- of Columbia, United States of America, as of the day and year first above written. THE REPUBLIC OF ZAMBIA By Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Regional Vice President Eastern Africa - 8 - SCHEDULE Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each May 15 and November 15 beginning May 15, 1985 through May 15, 1999 835,000 On November 15, 1999 785,000 * 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. -9- 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 1.20% More than three years but not more than six years before maturity 2.40% More than six years but not more than eleven years before maturity 4.35% More than eleven years but not more than sixteen years before maturity 6.35% More than sixteen years but not more than eighteen years before maturity 7.15% More than eighteen years before maturity 7.95% INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Bank for Reconstruction and Develop- ment. In witness whereof I have signed this Ceriifi- cate and affixed the Seal of the Bank thereunto this / J Lday of , 198 _ FOR SECRETARY