Jordan - Fifth Power Project : Loan 2162 - Loan Agreement - Conformed

WMICIAIh DOCUMEN1S LOAN NUMBER 2162 JO Loan Agreement (Fifth Power Project) between THE HASHEMITE KINGDOM OF JORDAN and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated A&- ,1982 LOAN NUMBER 2162 JO LOAN AGREEMENT AGREEMENT, dated / ^, 1982, between THE HASHEMITE KINGDOM OF JORDAN (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (herein- after 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 this Agreement by making the Loan as hereinafter provided; (B) the Borrower intends to contract from other external sources of finance (hereinafter called the Co-Financiers) loans or credits (hereinafter called the Co-Financiers' Loans or Credits) in an aggregate amount equivalent to about two hundred million dollars ($200,000,000) (hereinafter called the Co-Financing Amount) to assist in financing the Project, on the terms and conditions to be set forth in agreements (hereinafter called the Co-Financiers' Agreements) to be entered into between the Borrower and the Co-Financiers; (C) the Project will be carried out by the Jordan Electricity Authority (hereinafter called JEA) with the Borrower's assistance and, as part of such assistance, the Borrower will make available to JEA 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 the Project Agreement of even date herewith between the Bank and JEA; 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 October 27, 1980, with the same force and effect as if they were fully set forth herein -2- (said General Conditions Apr'icable to Loan and Guarantee Agreements of the Bank, as so modified, 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 and in the Preamble to this Agreement have the respective meanings therein set forth and the following ad6itional terms have the following meanings: (a) "Project Agreement" means the agreement between the Bank and JEA of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement and all agreements supplemental to the Project Agreement; (b) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and JEA pursuant to Section 3.01 (b) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Loan Agreement; (c) "Jordanian Dinar" means the currency of the Borrower; (d) "JEA Law" means the Jordan Electricity Authority Law No. 21 of 1967 of the Borrower establishing JEA, as amended by Law No. 46 of 1973 and as further amended by General Electricity Law No. 8 of 1976, and as the same may be further amended from time to time; (e) "Aqaba industrial port facilities" means the industrial berth at the Aqaba Port of the Borrower; and (f) "Previous Loan Agreement" means the Loan Agreement for the Fourth Power Project, concluded between the Borrower and the Bank on June 22, 1981. 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 thirty-five million dollars ($35,000,000). -3- Section 2.02. The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Bank, for expend- itures 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, pro- curement of civil works required for the Project and to be financed out of the proceeds of the Loan shall be governed by the provisions of the Schedule to the Project Agreement. Section 2.04. The Closing Date shall be December 31, 1987 or such later date as the Bank shall establish. The Bank shall promptly notify the Eirrower of such later date. Section 2.05. Not later than the Effective Date, the Bor- rower shall pay to the Bank a fee equivalent to five hundred twenty-five thousand dollars ($525,000). The fee shall be pay- able in such currency or currencies as the Bank shall specify. Section 2.06. The Borrower shall pay to the Bank a commit- ment 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 2.07. The Borrower shall pay interest at the rate of eleven and three-fifths per cent (11-3/5%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.08. Interest and other charges shall be payable semiannually on January 15 and July 15 in each year. Section 2.09. 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 2.10. The Director General of JEA 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. (a) Withou any limitation or restrict".on upon any of its other obligations under the Loan Agreement, the Bor- rower shall cause JEA to perform in accordance with the provi- sions of the Project Agreement all the obligations of JEA therein set forth, shall take or cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable JEA to perform such obliga- tions, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) The Borrower shall relend the proceeds of the Loan to JEA under a Subsidiary Loan Agreement acceptable to the Bank pursuant to which JEA shall, inter alia: (i) repay the equivalent in terms of Jordanian Dinars of the proceeds of the Loan 'o relent (such equivalent to be determined as of the respective dates of repayment by JEA of the proceeds of the Loan so relent) in equal or approximately equal annual or semiannual installments over a period of seventeen years, including a grace period of five years; and (ii) pay interest at the rate of 11-3/5% per annum on the principal amount of the Loan withdrawn and outstand- ing from time to time. (c) The Borrower shall exercise its rights under the Subsi- diary Loan Agreement in such manner as to protect the interests of the Borrower and the Bank and to accomplish the purposes of the Loan, and except as the Bank shall otherwise agree, the Bor- rower shall not assign, amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. Section 3.02. The Borrower shall review with the Bank, not later than June 30, 1983, the plan referred to in Section 3.02 of -5- the Previous Loan Agreement, including the institutional arrangements for the energy sector contained in said plan. Section 3.03. The Borrower undertakes to complete not later than March 31, 1986, the construction of a pipeline between Zarqa and Aqaba for the transfer of fuel oil to the power station included in Part A of the Project. Section 3.04. The Borrower shall take or cause to be taken all action necessary to enable JEA: (a) to implement the tariffs and other measures agreed under Section 3.04 of the Project Agreement; (b) to comply with the provisions of Sections 4.03 and 4.04 of the Project Agreement; and (c) to reach the agreement referred to in Section 3.05 of the Project Agreement. A'XTICLE 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 administrative 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 "ssets 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; -6- 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 foreign exchange assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Borrower. Section 4.02. The Borrower shall continue to ensure that JEA will be charged the domestic price of fuel oil. Section 4.03. The Borrower shall take all action required to enable JEA to increase its electricity tariffs so as to reflect future increases in its fuel cost. ARTICLE V Remedies of the Bank Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (k) thereof: (a) JEA shall have failed to perform any of its obligations under the Project Agreement. (b) As a result of events which have occured after the date of the Loan Agreement, an extraordinary situation shall have arisen which shall make it improbable that JEA will be able to perform its obligations under the Project Agreement. (c) The JEA Law shall have been amended, suspended, abro- gated, repealed or waived so as to affect materially and adversely the ability of JEA to perform any of its obligations under the Project Agreement. (d) JEA shall have become unable to pay its debts as they mature or any action or proceedings shall have been taken by JEA or others whereby any of the property of JEA shall or may be distributed among its creditors. -7- (e) The agreements providing for the amounts referred to in Section 6.01 (b) of this Agreement shall have failed to become e:*fective by March 31, 1983, or such other date as the Borrower and the Bank may agree. (f) The Borrower shall have failed, by December 31, 1982, or such other date as the Borrower and the Bank may agree, to conclude the Co-Financiers' Agreements required to secure the remaining of the Co-Financing Amount referred to in Recital B hereof, or any such Agreement shall have failed to become effective by June 30, 1983, or such other date as the Borrower and the Bank may agree. (g) (i) Subject to subparagraph (ii) of this paragraph: (A) The right of the Borrower to withdraw the proceeds of any of the Co-Financiers' Loans or Credits shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement providing therefor, or (B) any such Loan or Credit shall have become due and payable prior to the agreed maturity therefor. (ii) Subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Bank that: (A) such suspension, cancellation, termination or prematuring is not caused by the failure of the Borrower to perform any of its obligations under such agreement; and (B) adequate funds for the Project are available to the Bor- rower from other sources on terms and conditions consistent with the obligations of the Borrower under this Agreement. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) The event specified in paragraph (a) of Section 5.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower and JEA. -8- (b) Any event specified in paragraphs (b), (c), (d), (e), (f) and (g) (i) (B) of Section 5.01 of this Agreement shall occur. ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as addi- tional conditions to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Condi- tions: (a) the Subsidiary Loan Agreement has been executed on behalf of the Borrower and JEA; and (b) Co-Financiers' Agreements providing for an amount equi- valent to not less than $85,000,000 have been signed between the Borrower and the Co-Financiers, and final commitments, in a form satisfactory to the Bank, for another amount equivalent to not less than $30,000,000 have been obtained by the Borrower from the Co-Financiers. Section 6.02. The following are specified as additional matters, within the meaning of Section 12.02 (c) of the General Conditions, to be included in the opinion or opinions to be fur- nished to the Bank: (a) that the Project Agreement has been duly authorized or ratified by JEA, and is legally binding upon JEA in accordance with its terms; and (b) that the Subsidiary Loan Agreement has been duly autho- rized or ratified by the Borrower and JEA and is legally binding upon the Borrower and JEA in accordance with its terms. Section 6.03. The date3 A)"-e4'r G, )J l , is hereby speci- fied for the purposes of Section 12.04 of the General Conditions. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. Except as provided in Section 2.10 of this Agreement, the President of the National Planning Council of the -9- Borrower is designated as representative of the Borrower f-? the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions. For the Borrower: National Planning Council P.O. Box 555 Amman Jordan Cable address: Telex: NPC 21319 JO Amman For the Bank: international Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) - 10 - 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 of Columbia, United States of America, as of the. day and year first above written. THE HASHEMITE KINGDOM OF JORDAN By " Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT B y / ( ( LAL Q Europe, Middle East and North Africa - 11 - SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Category of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to such Category and the percentage of expenditures for items so to be financed in such Category: Amount of the Loan Allocated % of .(Expressed in Expenditures Category Do1lar Equivalent) to be Financed Civil works 35,000,000 50% TOTAL 35,000,000 2. The disbursement percentages have been calculated in compliance with the policy of the Bank that no proceeds of the Loan shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Loan decreases or increases, the Bank may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Bank. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expenditures prior to the date of this Agreement. 4. If the Bank shall have reasonably determined that the procurement of any item is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or limiting any other - 12 - right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as, in the Bank's reasonable opinion, represents the amount of such expendi- tures which would otherwise have been eligible for financing out of the proceeds of the Loan. - 13 - SCHEDULE 2 Description of the Project The Project is a part of JEA's power system development program for the years 1982 through 1986. The Project consists of the following Parts: Part A: Construction of a seawater-cooled steam power station in Aqaba; the first stage of such station, to be completed by the end of 1986, consists of two 130-MW oil-fueled generating units and accessories. Part B: Installation of a 400-kV transmission line (about 320 km long) from Aqaba to Amman, to be operated initially at 132 kV. The Project is expected to be completed by December 31, 1986. -14- SCHEDULE 3 Amortization Schedule Payment of Principal Date of Payment Due (Expressed in dollars)* On each January 15 and July 15 beginning January 15, 1987 through January 15, 1999 1,345,000 On July 15, 1999 1,375,000 * The figures in this column represent dollar equivalents determined as of the respective dates of withdrawal; see General Conditions, Section 3.04. - 15 - 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 3.04 (b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 2.05% More than three years but not more than six years before maturity 4.10% More than six years but not more than eleven years before maturity 7.50% More than eleven years but not more than fifteen years before maturity 10.25% More than fifteen years before maturity 11.60% 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 Certifi- cate and affixed the Seal of the Bank thereunto this 6L . day of z , - , 198 . FOR SECRETARY