India - Indira Sarovar Hydroelectric Project : Loan 2416 - Special Fund Credit Agreement - Conformed

FFICIAL SPECIAL FUND CREDIT NUMBER SF 20 IN DOCUNIENTS Special Fund Credit Agreement (Indira Sarovar Hydroelectric Project) between INDIA and INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINISTRATOR of the SPECIAL FUND established with funds contributed by certain members of the International Development Association Dated , 1985 SPECIAL FUND CREDIT NUMBER SF 20 IN SPECIAL FUND CREDIT AGREEMENT AGREEMENT, dated eL , 1985, between INDIA, acting by its President (hereinafter called the Borrower) and INTERNATIONAL DEVZLOPMENT ASSOCIATION as ADMINISTRATOR of the SPECIAL FUND established with funds contributed by certain members of the International Development Association (hereinafter called the Administrator). WHEREAS (A) by Resolution No. IDA 82-6, adopted on Octo- ber 26, 1982, of the Executive Directors of the International Development Association (hereinafter called IDA) there has been established by IDA a Special Fund constituted by the funds which shall be contributed by certain members of IDA and administered by IDA, acting as Administrator of such Special Fund, for the purpose of, and in accordance with, the provisions of said Resolution; (B) the Borrower has requested of the Administrator assis- tance from the resources of the Special Fund in the financing of the Project described in Schedule 2 to this Agreement, and the Administrator has determined that such assistance would be in accordance with the provisions of the Resolution referred to above; (C) the Borrower has also requested International Bank for Reconstruction and Development (the Bank) to provide additional assistance towards the financing of the Project and by an agree- ment of even date herewith between the Borrower and the Bank (hereinafter called the Loan Agreement) the Bank is agreeing to provide such assistance in an aggregate principal amount equivalent to one hundred fifty-seven million four hundred thousand dollars ($157,400,000) (hereinafter called the Bank Loan); (D) the Project will be carried out by the State of Madhya Pradesh through the Madhya Pradesh Electricity Board with the Borrower's assistance and, as part of such assistance, the Borrower will make available to the State of Madhya Pradesh the proceeds of the Special Fund Credit as hereinafter provided; and WHEREAS the Administrator has agreed on the basis, inter alia, of the foregoing, to extend the Special Fund Credit to the Borrower upon the terms and conditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: -2- ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the International Development Association, dated June 30, 1980, with the same force and effect as if they were fully set forth herein, subject, however, to the following modifications thereof (said General Conditions Applicable to Development Credit Agreements of the International Development Association, as so modified, being hereinafter called the General Conditions): (a) the term "Association", wherever used in the General Conditions, means the International Development Association acting as the Administrator of the Special Fund referred to in the Preamble to this Special Fund Credit Agreement; (b) the terms "Development Credit Agreement", "Credit" and "Credit Account", wherever used in the General Conditions, are amended to read "Special Fund Credit Agreement", "Special Fund Credit" and "Special Fund Credit Account", respectively; (c) the second sentence of Section 5.01 is deleted; and (d) in Sections 6.02 and 7.01, the term "Association" shall also include the International Development Association acting in its own capacity. 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 addi- tional terms have the following meanings: (a) "Special Fund Resolution" means Resolution No. IDA 82-6 of the Executive Directors of IDA which, inter alia, establishes the Special Fund; (b) "Part I member of IDA" means a member of IDA with respect to which the terms and conditions of membership are those prescribed in the Articles of Agreement of IDA for countries whose names are listed in Part I of Schedule A to those Articles; -3- (c) "Part II member of IDA" means a member of IDA which is not a Part I member of IDA; (d) "Madhya Pradesh" means the State of Madhya Pradesh, a State of India, and includes any successor thereto; (e) "Project Agreement" means the agreement among the Administrator, the Bank and the State of Madhya Pradesh 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; (f) "Loan Agreement" means the agreement of even date herewith between the Borrower and the Bank for the purpose of the Project, as such agreement may be amended from time to time; and such term includes the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated October 27, 1980, as made applicable to such agreement, all agreements supplemental to the Loan Agreement and all schedules to the Loan Agreement; and (g) "Board" means the Madhya Pradesh State Electricity Board established under the provisions of the Electricity (Supply) Act, 1948, of the Borrower. ARTICLE II The Special Fund Credit Section 2.01. The Administrator agrees to lend to the Bor- rower on the terms and conditions set forth or referred to in the Special Fund Credit Agreement, an amount in various currencies equivalent to one hundred twenty-two million Special Drawing Rights (SDR 122,000,000). Section 2.02. (a) The amount of the Special Fund Credit may be withdrawn from the Special Fund Credit 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 Administrator, for expenditures made (or, if the Administrator 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 Special Fund Credit. (b) Withdrawals shall be made only on account of expendi- tures for goods produced in, or services supplied from, the territories of: (A) any Part II member of IDA; and (B) any Part I member of IDA which fulfills the conditions set forth in para- graph 13 (d) (ii) of the Special Fund Resolution on the date of this Agreement, as determined by the Administrator. Section 2.03. Except as the Administrator shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Special Fund Credit shall be governed by the provisions of the Schedule to the Project Agreement. Section 2.04. The Closing Date shall be June 30, 1992 or such later date as the Administrator shall establish. The Admin- istrator shall promptly notify the Borrower of such later date. Section 2.05. (a) The Borrower shall pay to IDA a commitment charge at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of the Special Fund Credit not withdrawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the Special Fund Credit Agreement to the respective dates on which amounts shall be withdrawn by the Borrower from the Special Fund Credit Account or shall be cancelled. (b) The commitment charge shall be paid: (i) at such places as IDA shall reasonably request; (ii) without restrictions of any kind imposed by, or in the territory of, the Borrower; and (iii) in the currency specified in this Agreement for purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. Section 2.06. The Borrower shall pay to IDA a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the amount withdrawn from the Special Fund Credit Account and outstanding from time to time. Section 2.07. Commitment charges and service charges shall be payable semiannually on March 15 and September 15 in each year. Section 2.08. The Borrower shall repay to IDA the principal amount of the Special Fund Credit in semiannual installments payable on each March 15 and September 15 commencing September -5- 15, 1994 and ending March 15, 2034, each installment to and including the installment payable on March 15, 2004 to be one- half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.09. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project; Other Covenants Section 3.01. (a) The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement, and, to this end, without any limitation or restric- tion upon any of its other obligations under the Special Fund Credit Agreement, shall cause Madhya Pradesh to perform in accordance with the provisions of the Project Agreement all the obligations therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable Madhya Pradesh to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) The Borrower shall make the proceeds of the Special Fund Credit available to Madhya Pradesh in accordance with the Borrower's standard arrangements for developmental assistance to the States of India. Section 3.02. As long as the Administrator has not given notice to the contrary to the Borrower and so long as the Loan Agreement shall have not terminated prior to the termination of this Agreement: (i) the obligations of the Borrower to consult with and to furnish, or cause to be furnished, information, documents, reports, records and statements to the Administrator shall be satisfied to the extent performance in respect of such obligations is rendered to the Bank; (ii) the obligations of the Administrator to consult with and to furnish information to the Borrower shall be satisfied to the extent such obligations are fulfilled by the Bank; and (iii) all actions taken (including the giving of approvals or the granting of waivers) by the Admini- -6- strator pursuant to this Agreement shall be deemed to be taken pursuant to both the Special Fund Credit Agreement and the Loan Agreement and in the name and on behalf of both the Administrator and the Bank. ARTICLE IV Remedies of the Administrator Section 4.01. For the purposes of Section 6.02 of the General Conditions the following additional events are specified pursuant to paragraph (h) thereof: (a) Madhya Pradesh shall have failed to perform any of its obligations under the Project Agreement. (b) As a result of events which have occurred after the date of this Agreement, an extraordinary situation shall have arisen which shall make it improbable that Madhya Pradesh will be able to perform its obligations under the Project Agreement. Section 4.02. For the purposes of Section 7.01 of the General Conditions, the following additional event is specified pursuant to paragraph (d) thereof, namely, that the event speci- fied in paragraph (a) of Section 4.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Administrator to the Borrower and Madhya Pradesh. ARTICLE V Effective Date; Termination; Designation of Administrator Section 5.01. The following event is specified as an additional condition to the effectiveness of the Special Fund Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions, namely, that all conditions precedent to the effectiveness of the Loan Agreement, except for the effectiveness of this Agreement, have been fulfilled. Section 5.02. The following is specified as an additional matter, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Administrator, namely, that the Project -7- Agreement has been duly authorized or ratified by Madhya Pradesh, and is legally binding upon Madhya Pradesh in accordance with its terms. Section 5.03. The date J , 1985, is hereby specified for the purposes of Sec on 12.04 of the General Conditions. Section 5.04. The provisions of Section 4.02 of this Agree- ment shall cease and determine on the date on which the Special Fund Credit Agreement shall terminate or on a date thirty years after the date of this Agreement, whichever shall be the earlier. Section 5.05. In the event that the Executive Directors of IDA decide to terminate the functions of IDA as administrator of the Special Fund pursuant to paragraph 17 of the Special Fund Resolution, the Administrator may, by notice to the Borrower, designate another party which, on the date specified in such notice, shall assume part or all of the rights and obligations of the Administrator under this Agreement in accordance with the Special Fund Resolution and such decision of the Executive Directors, as specified in such notice. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Secretary, Additional Secretary, Joint Secretary, Director, Deputy Secretary or Under Secretary of the Department of Economic Affairs in the Ministry of Finance of the Borrower is designated as representative of the Borrower 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: For the Borrower: The Secretary to the Government of India Ministry of Finance Department of Economic Affairs New Delhi, India -8- Cable address: ECOFAIRS New Delhi For the Administrator: Administrator of the Special Fund (International Development Association) 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INDEVAS Washington, D.C. 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. INDIA By/,5/0 Au orized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINISTRATOR of the SPECIAL FUND established with funds contributed by certain members of the International Development Association By Regional Vice President South Asia SCHEDULE 1 Withdrawal of the Proceeds of the Special Fund Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Special Fund Credit, the allocation of the amounts of the Special Fund Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Special Fund Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Works for the dam 122,000,000 51% Total 122,000,000 2. The disbursement percentage has been calculated in com- pliance with the policy of the Administrator that the proceeds of the Special Fund Credit shall not be disbursed on account of payments for taxes levied by, or in the territory of, the Bor- rower on goods or services, or on the importation, manufac,ture, procurement or supply thereof; on this basis, if the amount of any such taxes levied on or in respect of icems in any Category decreases or increases, the Administrator may, by notice to the Borrower, increase or decrease the disbursemeat percentage then applicable to such Category as required to be consistent with the aforementioned policy of the Administrator. 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 Administrator shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditure for such item shall be financed out of the proceeds of the Special Fund Credit, and the Administrator may, without in any way restricting or limiting any other right, power or remedy - 10 - of the Administrator under the Special Fund Credit Agreement, by notice to the Borrower, cancel such amount of the Special Fund Credit as, in the Administrator's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Special Fund Credit. - 11 - SCHEDULE 2 Description of the Project The objectives of the Project are to provide additional power generation capacity in Madhya Pradesh and thereby in the Western Region of India, and to strengthen the Board's data processing facilities. The Project consists of the following: Part A: The construction of a power house housing four 125 MW turbo generating sets and associated electrical and mechanical equipment. Part B: The construction of a combined gravity and rock-fill dam, about 90 m high and about 1,650 m long, in the Indravati River. Part C: The construction of a water conductor system composed of a head race tunnel of about 12 m in diameter and 3,000 m long, a surge tank, and four pressure shafts about 400 m long and 6 m diameter. Part D: The construction of a tailrace open channel about 5 km long. Part E: The acquisition and erection of step-up transformers (11/220 kV), switchyard equipment, and about 5 km of 220 kV double circuit transmission line to connect the Project, to the nearby existing Barsoor substation. Part F: The carrying out of a plant rehabilitation program in Madhya Pradesh through repairs to and upgrading of identified thermal units. Part G: The construction of roads, bridge, residential quarters and buildings, and provision of site services and facilities. Part H: The upgrading, expansion and modernization of the Madhya Pradesh State Electricity Board's data process- ing facilities, including development of software and purchase of necessary computer equipment. * * * The Project is expected to be completed by September 30, 1991.