Conformed Copy - L3391 - Oil and Gas Sector Development Loan - Amendment

Page 1 August 23, 1991 Secretary to the Government of India Ministry of Finance Department of Economic Affairs New Delhi, India Re: Loan No. 3391-IN (Oil and Gas Sector Development Loan) We refer to the Loan Agreement (Oil and Gas Sector Development Loan) between India and the Bank dated July 24, 1991 and to the request of the Government of India conveyed through the Executive Director of India on August 22, 1991 for the opening of a Special Account to serve the purposes of the Loan. The Bank is pleased to agree to your request. Accordingly, the Loan Agreement is hereby amended as follows: 1. Section 1.02 shall read: " Section 1.02. 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 additional terms have the following meanings: (a) "Gas Flaring Loan Agreement" means the Loan Agreement dated July 11, 1991 between the Bank and Oil and Natural Gas Commission for the Gas Flaring Reduction Project; and (b) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement." 2. Section 2.02 is re-numbered Section 2.02 (a) and sub-section 2.02 (b) is added as follows: " (b) The Borrower shall, for the purposes of the Program, open and maintain in dollars a special deposit account in Reserve Bank of India on terms and conditions satisfactory to the Bank. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 4 to this Agreement." 3. Section 3.03 (b) (i) is amended to read: " (i) have the records and accounts referred to in paragraph (a) of this Section including those of the Special Account for each fiscal year audited in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank;" 4. A new paragraph 7 is added to Schedule 3 as follows: " Subject to the provisions of paragraph 6 above, where payments for any contract are to be made out of the Special Account, two conformed copies of the contract together with the other information required to be furnished to the Bank shall be furnished to the Bank as part of evidence to be furnished pursuant to Paragraph 4 of schedule 4 to this Agreement." 5. A new Schedule 4 is added as per attachment. Please confirm your agreement to the foregoing by signing the form of confirmation on the enclosed copy of this letter and returning it to us. Very truly yours, Page 2 Jan Wijnand Acting Director India Department CONFIRMED INDIA By Authorized Representative SCHEDULE 4 Special Account 1. For the purposes of this Schedule: (a) the term "eligible expenditures" means expenditures in respect of the reasonable cost of crude oil and oil products required for the Program and to be financed out of the proceeds of the Loan in accordance with the provisions of Schedule 1 to this Agreement; and (b) the term "Authorized Allocation" means an amount equivalent to $70,000,000 to be withdrawn from the Loan Account and deposited in the Special Account pursuant to paragraph 3 (a) of this Schedule. 2. Payments out of the Special Account shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Bank has received evidence satisfactory to it that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the Special Account shall be made as follows: (a) For withdrawals of the Authorized Allocation, the Borrower shall furnish to the Bank a request or requests for a deposit or deposits which do not exceed the aggregate amount of the Authorized Allocation. On the basis of such request or requests, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and deposit in the Special Account such amounts or amounts as the Borrower shall have requested. (b) (i) For replenishment of the Special Account, the Borrower shall furnish to the Bank requests for deposits into the Special Account at such intervals as the Bank shall specify. (ii) Prior to or at the time of each such request, the Borrower shall furnish to the Bank the documents and other evidence required pursuant to paragraph 4 of this Schedule for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and deposit into the Special Account such amount as the Borrower shall have requested and as shall have been shown by said documents and other evidence to have been paid out of the Special Account for eligible expenditures. 4. For each payment made by the Borrower out of the Special Account, the Borrower shall, at such time as the Bank shall reasonably request, furnish to the Bank such documents and other evidence showing that such payment was made exclusively for eligible expenditures. 5. (a) Notwithstanding the provisions of paragraphs 3 of this Schedule, the Bank shall not be required to make further deposits in the Special Account if, at any time, the Bank shall have determined that all further withdrawals should be made by the Borrower directly from the Loan Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; and Page 3 (b) Withdrawal from the Loan Account of the remaining unwithdrawn amount of the Loan shall follow such procedures as the Bank shall specify by notice to the Borrower. Such further withdrawals shall be made only after and to the extent that the Bank shall have been satisfied that all such amounts remaining on deposit in the Special Account as of the date of such notice will be utilized in making payments for eligible expenditures. 6. (a) If the Bank shall have determined at any time that any payment out of the Special Account: (i) was made for an expenditure or in an amount not eligible pursuant to paragraph 2 of this Schedule; (ii) was not justified by the evidence furnished to the Bank, the Borrower shall, promptly upon notice from the Bank: (A) provide such additional evidence as the Bank may request or (B) deposit into the Special Account (or, if the Bank shall so request, refund to the Bank) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. Unless the Bank shall otherwise agree, no further deposit by the Bank into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Bank shall have determined at any time that any amount outstanding in the Special Account will not be required to cover further payments for eligible expenditures, the Borrower shall, promptly upon notice from the Bank, refund to the Bank such outstanding amount. (c) The Borrower may, upon notice to the Bank, refund to the Bank all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Bank made pursuant to paragraphs 6 (a), (b) and (c) of this Schedule shall be credited to the Loan Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions.