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

LOAN NUMBER 203 IN Loan Agreement (Third DVC Project) BETWEEN INDIA AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED JULY 23, 1958 LOAN NUMBER 203 IN Loan Agreement (Third DVC Project) BETWEEN INDIA AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED JULY 23, 1958 Enan Agreement AGREEMENT, dated July 23, 1958, between INDIA, act- ing by its President (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND IEVELOP- MENT (hereinafter called the Bank). WHEREAS the Bank has previously financed the foreign exchange costs of projects forming a part of a development program in the Damodar Valley and has entered into a Loan Agreement with the Borrower, dated April 18, 1950, a Project Agreement with Damodar Valley Corporation, dated April 15, 1950, a Loan Agreement with the Borrower, dated January 23, 1953 and a Project Agreement with Damodar Valley Corporation, dated January 23, 1953; WHEREAS the Borrower and Damodar Valley Corporation have requested the Bank to assist in financing a power project in the Damodar Valley; Now THEREFORE the parties hereto agree as follows: ARTICLE I Loan Regulations; Special Definitions SECTION 1.01. The parties to this Loan Agreement accept all the provisions of Loan Regulations No. 3 of the Bank dated June 15, 1956, subject, however, to the modifications thereof set forth in Schedule 3 to this Agreement (said Loan Regulations No. 3 as so modified being hereinafter called the Loan Regulations), with the same force and effect as if they were fully set forth herein. SECTION 1.02. Unless the context otherwise requires, the following terms shall have the following meanings: (a) "Damodar" means Damodar Valley Corporation, a corporation organized and existing under the laws of India. 4 (b) "Third Project Agreement" means the Project Agreement of even date herewith between the Bank and Damodar. (c) "Participating Government" means the Borrower and the States of Bihar and West Bengal and any other government which Shali be added as a participating govern- ment by amendment of the Damodar Valley Corporation 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 referred to, an amount in various currencies equivalent to twenty-five million dollars ($25,000,000). 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 provided in, and subject to the rights of cancellation and suspension set forth in, the Loan Regulations. SECTION 2.03. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 17) per annum on the principal amount of the Loan not so withdrawn from time to time. Such commit- ment charge shall accrue from a date sixty days after the date of this Agreement to the respective dates on which amounts shall be withdrawn by the Borrower from the Loan Account as provided in Article IV of the Loan Regulations or shall be cancelled pursuant to Article V of the Loan Regulations. SECTION 2.04. The Borrower shall pay interest at the rate of five and three-eighths per cent (5%o) per annum on the principal amount of the Loan so withdrawn and out- standing from time to time. S 5 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 Regulations shall be at the rate of one-half of one per cent (1/ of 1o) per annum on the principal amount of any such special commitments outstanding from time to time. SECTION 2.06. Interest and other charges shall be pay- able semiannually on February 1 and August 1 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. 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 financing the cost of goods required to carry out the Project described in Sched- Ule 2 to this Agreement. The specific goods to be financed out of the proceeds of the Loan and the methods and pro- cedures for procurement of such goods shall be determined by agreement between the Borrower and the Bank, subject to modification by further agreement between them. SECTION 3.02. The Borrower shall cause all goods financed out of the proceeds of the Loan to be used in the territories of the Borrower exclusively in the carrying out 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. 6 SECTION 4.02. A Secretary to the Government of India in the Ministry of Finance is designated as the authorized representative of the Borrower for the purposes of Sec- tion 6.12 of the Loan Regulations. ARTICLE V Particular Covenants SECTION 5.01. (a) The Borrower shall cause the Project to be carried out with due diligence and efficiency and in conformity with sound engineering and financial practices. (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 Third 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 to Damodar funds required for the carrying out 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 reasonably 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 economic condi- tions 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 inter- feres with, or threatens to interfere with, the accomplish- ment of the purposes of the Loan or the maintenance of the service thereof. S 7 (c) The Borrower shall afford all reasonable opportu- nity 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 Borrower and the Bank that no other external debt shall enjoy any priority over the Loan by way of a lien on governmental assets. To that end, the Borrower undertakes thut, except as the Bank shall otherwise agree, if any lien shall be created on any assets of the Borrower or of any of its political subdivisions or of any agency of the Borrower or of any such political subdivision as security for any external debt, such lien will ipso facto equally and ratably secure the payment of the principal of, and interest 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 foregoing provisions of this Section shall not apply to: (a) any lien created on property, at the time of purchase thereof, solely as security for the payment of the purchase price of such property; (b) any pledge of commercial goods to secure debt matur- ing not more than one year after its date and to be paid out of the proceeds of sale of such commercial goods; or (c) any pledge by the Reserve Bank of India of any of its assets in the ordinary course of its banking business to secure any indebtedness maturing not more than one year after its date. 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, however, that the provisions of this Section shall not apply to taxa- tion of, or duties or fees or impositions levied upon, pay- ments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individual or corporate resident of the Borrower. S 8 SECTION 5.05. The Loan Agreement, the Third Project Agreement and the Bonds shall be free from any taxes (including duties, fees or impositions) that shall be imposed 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 or impositions), if any, imposed under the laws of the country or countries in whose currency the Loan and the Bonds are payable or laws in effect in the territories of such country 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 Bor- rower 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. (i) If any event specified in paragraph (a) or paragraph (b) of Section 5.02 of the Loan Regula- tions shall occur and shall continue for a period of thirty days, or (ii) if any event specified or referred to in para- graph (c) or paragraph (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 subsequent 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 notwithstanding. S 9 SECTION 6.02. For the purposes of Section 5.02 (h) of the Loan Regulations, the following additional event is specified: a default shall have occurred in the performance of any covenant or agreement of Damodar under the Third Project Agreement or under any other project agreement in force between Damodar and the Bank. ARTICLE VII Effective Date; Termination SECTION 7.01. The following events are specified as addi- tional conditions to the effectiveness of this Agreement within the meaning of Section 9.01 (b) of the Loan Regu- lations: (a) The execution and delivery of the Third Project Agreement on behalf of Damodar shall have been duly authorized or ratified by all necessary corporate and gov- ernmental action. (b) All necessary acts, consents and approvals to author- ize the construction and operation of the Project by Damo- dar with all necessary powers and rights in connection 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, consents and approvals of each Participating Government necessary therefor have been duly and validly performed or given. (b) that the Third Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, Damodar and constitutes a valid and binding obligation of Damodar in accordance with its terms. S 10 SECTION 7.03. A date ninety days after the date of this Agreement is hereby specified for the purposes of Section 9.04 of the Loan Regulations. ARTICLE VIII Miscellaneous SECTION 8.01. The Closing Date shall be March 31, 1961. 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 of India New Delhi, India Alternative address for cablegrams and radiograms: Finance Ministry New Delhi For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington 25, D. C. United States of America Alternative address for cablegrams and radiograms: Intbafrad Washington, D. C. 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 S S 11 caused this Loan 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 HARISHWAR DAYAL Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By J. BURKE KNAPP Vice President S S 12 SCHEDULE 1 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* August 1, 1961 $ 439,000 February 1, 1962 451,000 August 1, 1962 463,000 February 1, 1963 476,000 August 1, 1963 488,000 February 1, 1964 501,000 August 1, 1964 515,000 February 1, 1965 529,000 August 1, 1965 543,000 February 1, 1966 558,000 August 1, 1966 573,000 February 1, 1967 588,000 August 1, 1967 604,000 February 1, 1968 620,000 August 1, 1968 636,000 February 1, 1969 654,000 August 1, 1969 671,000 February 1, 1970 689,000 August 1, 1970 708,000 February 1, 1971 727,000 August 1, 1971 746,000 February 1, 1972 766,000 August 1, 1972 787,000 February 1, 1973 808,000 August 1, 1973 830,000 February 1, 1974 852,000 August 1, 1974 875,000 February 1, 1975 899,000 August 1, 1975 923,000 February 1, 1976 947,000 August 1, 1976 973,000 February 1, 1977 999,000 August 1, 1977 1,026,000 February 1, 1978 1,054,000 August 1, 1978 1,082,000 * To the extent that any part of the Loan is repayable in a currency other than dollars (see Loan Regulations, Section 3.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. 13 Premiums on Prepayment and Redemption The following percentages are specified as the premiums payable on repayment in advance of maturity of any part of the principal amount of the Loan pursuant to Section 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: Time of Prepayment or Redemption Premium Not more than 3 years before maturity.. of 1% More than 3 years but not more than 6 years before maturity. ........... 1/%0 More than 6 years but not more than 11 years before maturity . . ... ...... 2%7o More than 11 years but not more than 16 years before maturity........... 3% More than 16 years but not more than 18 years before maturity........... 4%s More than 18 years before maturity . .... 5%Y 14 SCHEDULE 2 Description of Project A. Durgapur Thermal Power Station The Durgapur Thermal Station will be located near Oyaria Railway Station about 100 miles to the northwest of Calcutta and close to the Durgapur Steel Plant. This station will be equipped initially with two hydrogen cooled turbo-generator units, each of 75,000 kw nominal rating and 82;500 kw maximum capacity at 0.85 p.f. and 13,800 V at 3,000 rpm, designed to operate on unit system whereby each unit will have its own condenser with circulating water and condensate pumps, steam-generator, transformers and other auxiliary equipment. The turbines, which will be of condensing type, will be designed to operate at 1450 psi steam pressure and 10000 F steam temperature and each will -be provided with its own condenser of the double pass, cross-flow type with 65,000 sq. ft. surface capacity. The two steam-generators will be of the semi-outdoor type, each designed to generate 730,000 pounds of steam per hour at 1500 psi steam pressure and 10050 F steam tem- perature at super-heater outlet. They will be of the dry bottom, ceiling fixed type suitable for pulverized coal and/or middlings and/or coke oven gas firing. Each turbo-generator will be directly connected to its own power transformer of 100 Mva, which will be of the outdoor forced oil water cooled type and step up the gen- erator voltage from 13.2 to 138 kv. While the low voltage side will be directly connected with the generator terminals, the high voltage side will be connected to the main bus through a 132 kv circuit breaker and the generator trans- former will be controlled as one unit. B. Bokaro Thermal Power Station One complete unit of 75,000/82,500 kw similar in design to the units at Durgapur, except that the boiler unit will S 15 be equipped to burn pulverized coal, middlings or oil, will be installed at the Bokaro Thermal Power Station. C. Transmission Lines (1) Transmission Link between Panchet Hill and Jam- shedpur and Durgapur Loop A 132 kv transmission link will be built between Panchet Hill and Jamshedpur and a loop between Durgapur Thermal Power Station and the 132 kv grid. (2) Extension of 132 kv Transmission System for Power Supply to Eastern Railways at Howrah, Belmuri and Burdwan Substations at Howrah and Burdwan will be extended and a new substation will be built at Belmuri. The installed capacities are as follows: Howrah 2 x 10 Mva, Burdwan 2 x 10 Mva, Belmuri 2 x 20 Mva. (3) Conversion of Single Circuit 132 kv Transmission Line A second circuit will be strung on the existing transmis- sion line running from Bokaro to Gaya-Patna-Dalmianagar. (4) Extensions of the Existing Grid Substations, Receiv- ing Station, 33 kv Lines and Miscellaneous Items Consequent on the increased off-take of power from the various substations as soon as additional capacity is avail- able, the transformer capacities will be increased and addi- tional 33 kv feeder lines to consumers' premises will be provided. It is expected that construction of all parts of the Project will be completed by July, 1960. S 16 SCHEDULE 3 Modifications of Loan Regulations No. 3 For the purposes of this Agreement the provisions of Loan Regulations No. 3 of the Bank, dated June 15, 1956, shall be deemed to be modified as follows: (a) Section 2.02 shall be deleted. (b) Section 6.17 shall be amended by inserting the words "or the Third Project Agreement" after the words "the Loan Agreement." (c) Section 7.02 shall be amended by inserting the words 'or the Third Project Agreement" after the words "the Loan Agreement." (d) The following new paragraph is added to Section 10.01: "20. The term 'Third Project Agreement' means the Project Agreement (Third DVC Project) between the Bank and Damodar and shall include any amendments made by agreement between the Bank and Damodar."