Conformed Copy - L3831 - Rehabilitation Loan - Canadian Grant Agreement

Page 1 CONFORMED COPY CANADIAN GRANT RELATED TO LOAN NUMBER 3831 UA Canadian Grant Agreement (Rehabilitation Project) between UKRAINE and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT as Administrator of Canadian Funds provided by the BUREAU OF ASSISTANCE FOR CENTRAL AND EASTERN EUROPE OF EXTERNAL AFFAIRS AND INTERNATIONAL TRADE CANADA Dated December 23, 1994 CANADIAN GRANT RELATED TO LOAN NUMBER 3831 UA CANADIAN GRANT AGREEMENT AGREEMENT, dated December 23, 1994, between UKRAINE (the Recipient) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT acting as Administrator (the Administrator) of the Canadian Grant (as hereinafter defined) provided by Her Majesty the Queen in Right of Canada ("Her Majesty") herein represented by the Secretary of State for External Affairs, acting through the Bureau of Assistance for Central and Eastern Europe of External Affairs and International Trade Canada ("the Bureau"). WHEREAS the Recipient has requested the assistance of the International Bank for Reconstruction and Development (the Bank) and the Bureau in the financing of urgently needed imports required during the execution of its program of actions, objectives and policies designed to achieve economic stabilization and structural reforms in the Recipient's economy described in a letter from the Recipient to the Bank, dated November 30, 1994; WHEREAS the Bank has made a Loan for this purpose (the Rehabilitation Loan) on the terms and conditions set forth in a Loan Agreement (Loan No. 3831 UA) of even date herewith between the Recipient and the Bank (the IBRD Loan Agreement); Page 2 WHEREAS the Bureau wishes to make available to the Recipient a grant in the amount of ten million dollars ($10,000,000) (the Canadian Grant) to assist the Recipient in the financing of urgently needed imports on the terms and conditions hereinafter set forth; WHEREAS pursuant to the Trust Agreement, entered into between the Bureau and the Bank dated December 23, 1994 (the Trust Agreement), the Bureau has appointed the Bank, and the Bank has agreed, to administer grant funds to be made available by the Bureau for the cofinancing of Rehabilitation Loan with the provisions of the Trust Agreement and has authorized the Bank to do all such acts and things as may be necessary or appropriate to carry out such administration, including entering into this Grant Agreement on behalf of the Bureau; WHEREAS the Recipient acknowledges that the financial assistance extended to the Recipient under this agreement (the Canadian Grant Agreement) shall be considered part of the bilateral development aid extended by the Government of Canada to the Recipient; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. (a) The following provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated January 1, 1985, with the modifications set forth in paragraph (b) of this Section (the General Conditions) constitute an integral part of this Agreement: (i) Article I; (ii) Sections 2.01 (1), (2), (3), (4), (6), (8), (9), (10), (11), (18) and (20), 2.02 and 2.03; (iii) Section 3.01; (iv) Section 4.01 and the first sentence of Section 4.09; (v) Article V; (vi) Sections 6.01, 6.02 (a), (c), (d), (e), (f), (i) and (k), 6.03, 6.04 and 6.06; (vii) Section 8.01 (b); (viii) Sections 9.01 (a) and (c), 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09; (ix) Sections 10.01, 10.03 and 10.04; and (x) Article XI. (b) The General Conditions shall be modified as follows: (i) the term "Bank", wherever used in the General Conditions, other than in Sections 2.01 (8) and 6.02 (f) thereof and the last use of such term in Section 5.01 thereof, means the International Bank for Reconstruction and Development acting as Administrator of the Canadian Grant pursuant to the Trust Agreement, except that in Section 6.02, the term "Bank" shall also include the International Bank for Reconstruction and Development acting in its own capacity; Page 3 (ii) the term "Borrower", wherever used in the General Conditions, means the Recipient; (iii) the term "Loan Agreement", wherever used in the General Conditions, means this Agreement except that in Section 6.02 (a), the term "Loan Agreement" means the IBRD Loan Agreement; (iv) the term "Loan", wherever used in the General Conditions, means the Canadian Grant extended to the Recipient under this Agreement; (v) the term "Loan Account", wherever used in the General Conditions means the Canadian Grant Account opened by the Administrator on its books in the name of the Recipient, to which the amount of the Canadian Grant is credited; and (vi) Section 4.01 shall be modified to read: "Withdrawals from the Canadian Grant Account shall be made in dollars; provided, however, that if the expenditures to be financed out of the Canadian Grant have been paid or are payable in another currency, the Administrator shall, at the request of the Recipient, purchase such currency with the proceeds of such withdrawal." Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions, in the Recitals to this Agreement and in the IBRD Loan Agreement have the respective meanings therein set forth. ARTICLE II The Grant Section 2.01. The Administrator agrees to make available to the Recipient, on the terms and conditions set forth or referred to in this Agreement, a grant in an amount of ten million dollars ($10,000,000). Section 2.02. The amount of the Canadian Grant may be withdrawn from the Canadian Grant Account in accordance with the provisions of the Schedule to this Agreement, as such Schedule may be amended from time to time by agreement between the Recipient 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 Canadian Grant. Section 2.03. (a) Except as the Administrator shall otherwise agree, goods required for the Project and to be financed out of the Canadian Grant shall be procured in accordance with the provisions of Schedule 3 to the IBRD Loan Agreement. (b) If the Administrator shall have reasonably determined that the procurement of any items is inconsistent with the procedures set forth or referred to in paragraph (a) above, no expenditures for such item shall be financed out of the proceeds of the Canadian Grant, and the Administrator may, without in any way restricting or limiting any other right, power or remedy of the Administrator under this Agreement, by notice to the Recipient, cancel such amount of the Canadian Grant 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 Canadian Grant. Page 4 Section 2.04. The Bank shall not be obliged to make disbursements under this Agreement except to the extent it shall have received funds for the purpose from the Bureau. Section 2.05. The Closing Date shall be June 30, 1996 or such later date as the Administrator shall establish. The Administrator shall promptly notify the Recipient of such later date. ARTICLE III Execution of the Project Section 3.01. (a) Except as otherwise expressly provided herein, Articles III and IV of the IBRD Loan Agreement, including the Schedules referred to therein, are hereby incorporated into this Agreement with the same force and effect as if they were fully set forth herein, it being understood that all references in said Articles to the "Bank" shall be deemed to be references to the Bank as Administrator of the Canadian Grant under this Agreement, all references to the "Borrower" shall be deemed to be references to the Recipient, and all references to the "Loan" and the "Loan Account" shall be deemed to be references to the Canadian Grant and the Canadian Grant Account, respectively. (b) All references in the IBRD Loan Agreement to the Special Account do not apply to, and do not constitute a part of, this Agreement. ARTICLE IV Transfer of Rights and Obligations Section 4.01. In accordance with the Trust Agreement, the rights and obligations of the Administrator under this Agreement may be transferred to the Bureau. The Recipient accepts and agrees that, upon notice by the Administrator to the Recipient to that effect, the Bureau shall, ipso facto, from the date specified in such notice, be substituted in all rights and obligations of the Administrator under this Agreement as if the Bureau had been an original party to this Agreement, without any further action or formality being required on the part of any party and, from such date, the Administrator shall cease to have any rights or obligations as a party under this Agreement. ARTICLE V Effectiveness Section 5.01. This Agreement shall become effective on the later of (i) the date on which the IBRD Loan Agreement becomes effective, or (ii) the date first above written and shall continue in effect until the Canadian Grant has been fully disbursed and the parties to this Agreement have fulfilled their obligations hereunder. ARTICLE VI Representation Section 6.01. The Minister of Finance of the Recipient is designated as representative of the Recipient 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 Recipient: Ministry of Finance 12/2 Hrushevsky Street Page 5 Kyiv, Ukraine 252008 Telex: 131450 For the Administrator: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 197688 (TRT) Washington, D.C. 248423 (RCA) 64145 (WUI) or 82987 (FTCC) IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, have caused this Agreement to be signed in their respective names as of the day and year first above written. UKRAINE By /s/ Yuriy Mykolayovich Shcherbak Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT as Administrator of Canadian Funds Provided by the BUREAU OF ASSISTANCE FOR CENTRAL AND EASTERN EUROPE OF EXTERNAL AFFAIRS AND INTERNATIONAL TRADE CANADA By /s/ Wilfried Thalwitz Regional Vice President Europe and Central Asia SCHEDULE Withdrawal of the Canadian Grant 1. The table below sets forth the Categories of items to be financed out of the Canadian Grant, the allocation of the amounts of the Canadian Grant to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Grant Allocated % of (Expressed in Expenditures Category Dollars) to be Financed Goods 10,000,000 100% of foreign expenditures Page 6 __________ TOTAL 10,000,000 ========== 2. For the purposes of this Schedule the term "foreign expenditures" means expenditures in the currency of any country other than that of the Recipient for goods or services supplied from the territory of any country other than that of the Recipient. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made and no commitments shall be entered into to pay amounts to the Recipient or others in respect of payments made for expenditures for goods included in the SITC groups or subgroups listed in subparagraph 2 (c) of Schedule 1 to the IBRD Loan Agreement and for goods specified in subparagraph 2 (g) of the said Schedule.