India - Third DVC Project : Loan 0203 - Project Agreement - Conformed

LOAN NUMBER 203 IN Project Agreement (Third DVC Project) BETWIMw INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND DAMODAR VALLEY CORPORATION DATED JULY 23, 1958 LOAN NUMBER 203 IN Project Agreement (Third DVC Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND DAMODAR VALLEY CORPORATION DATED JULY 23, 1958 AGREEMENT, dated July 23, 1958, between INTERNA- TIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (here- inafter called the Bank) and DAMODAR VALLEY CORPORATION (hereinafter called Damodar). WHEREAS by an Agreement of even date herewith (here- inafter called the Loan Agreement) between India (herein- after called the Borrower) and the Bank, the Bank has agreed to make to the Borrower a loan in various currencies equivalent to twenty-five million dollars ($25,000,000), on the terms and conditions set forth in the Loan Agreement, but. only on condition that Damodar agree to undertake certain obligations to the Bank as hereinafter in this Agree- ment set forth; and WHEREAS Damodar, in consideration of the Bank's enter- ing into the Loan Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; Now TH.,REFORE the parties hereto hereby agree as follows: ARTICLE I Definitions SECTION 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Loan Agreement and in the Loan Regulations (as so defined) shall have the respective meanings therein set forth. ARTICLE II Particular Covenants of baxodar SECTION 2.01. (a) Damodar shall carry out the Project with due diligence and efficiency and in conformity with sound engineering and financial practices. 4 (b) To assist it in carrying out the Project, during the period of construction of the Project Damodar shall, where necessary, employ suitably qualified and competent engi- neering consultants. The selection of the consultants and the nature and scope of their responsibilities shall be the subject of agreement between the Bank and Damodar. (c) Damodar shall furnish to the Bank, promptly upon their preparation, the. plans and specifications for the Project and any material modifications subsequently made therein, in such detail as the Bank shall from time to time request. (d) Damodar shall.maintain records (either as provided by the Damodar Valley Corporation Act, 1948, as amended, or, where necessary, supplementary records) adequate to identify the goods. financedl out of the proceeds of the Loan, to disclose the use thereof in the Project, to record the progress of the Project (including the cost thereof) and to reflect in accordance, with consistently maintained sound utility accounting practices the operations and financial condition of Damodar (including the respective financial results of its power, irrigation and flood control operations), shall enable the Bank's representatives to inspect the Project, the goods and any relevant records and documents;. and shall furnish to the Bank all such information as the Bank shall reasonably request concerning the expenditure of the proceeds of the Loan, the Project, the goods) and the operations and- financial condition of Damodar. SECTION 2.02. (a) The Bank and Damodar shall co- operate 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 reasonably request. (b) The Bank and Damodar shall from time to time exchange views through their representatives with regardi to matters relating- to the purposes of the Loan. Damodar 5 shall promptly inform the Bank of any condition which interferes with, or threatens to interfere with, the accom- plishment of the purposes of the Loan or the performance by Damodar of its obligations under this Agreement or the obligations to be performed by it pursuant to the pro- visions of the Loan Agreement, or which shall increase or threaten to increase materially the estimated cost of the Project. SECTION 2.03. Damodar shall import or cause to be im- ported into the territories of the Borrower all goods purchased with the proceeds of the Loan and, except as shall be otherwise agreed by the Bank and by the Borrower, shall use them there or shall cause them to be used there exclusively in the carrying out of the Project. Damodar shall obtain title to all such goods free and clear of all incumbrances. SECTION 2.04. Damodar shall not, without the prior consent of the Bank, sell or otherwise dispose of any goods purchased or paid for out of the proceeds of the Loan. SECTION 2.05. (a) Damodar shall take all steps within its power to maintain its existence and right to carry on operations and shall, except as the Bank shall otherwise agree, take all steps necessary to maintain and renew all rights, powers, privileges and franchises which are neces- sary or useful in the conduct of its business. (b) Damodar shall operate and maintain its plants, equipment and property, and from time to time make all necessary renewals and repairs thereof, all in accordance with sound engineering standards; and shall at all times manage its affairs, operate its plants and equipment and maintain its financial position in accordance with sound business and public utility practices. (c) Damodar shall set and maintain its rates for the sale of electricity at such levels as may be necessary to ensure 8 SECTION 4.04. Damodar shall furnish to the Bank suffi- cient evidence of the authority of the person or persons who will, on behalf of Damodar, take any action or execute any documents required or permitted to be taken or exe- cuted by Damodar pursuant to any of the provisions of this Agreement and the authenticated specimen signature of each such person. SECTION 4.05. This Agreement may be executed in sev- eral counterparts, each of which shall be an original and all collectively but one instriftient. IN WITNESS WHEREOF the parties hereto have caused this Agreement to be signed in their respective narnes by their representatives thercunto duly authorized and deliv- ored in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By J. BURKE KNAPP Vice President DAMODAR VALLEY CORPORATION By J. SHENOY Authorized Representative