Turkey - Power Transmission Project : Loan 0763 - Guarantee Agreement - Conformed

CONFORMED COPY LOAN NUMBER 763 TU Guarantee Agreement (Power Transmission Project) BETWEEN * REPUBLIC OF TURKEY AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED JUNE 22, 1971 CONFORMED COPY LOAN NUMBER 763 TU Guarantee Agreement (Power Transmission Project) BETWEEN * REPUBLIC OF TURKEY AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED JUNE 22, 1971 (6uarantre Agrermut AGREEMENT, dated June 22, 1971, between the REPUB- LIC OF TURKEY (hereinafter called the Guarantor) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOP- MENT (hereinafter called the Bank). WHEREAS by the Loan Agreement of even date herewith between the Bank and Turkiye Elektrik Kurumu (herein- after called the Borrower) the Bank has agreed to make to the Borrower a loan in various currencies equivalent to twenty four million dollars ( $24,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that the Guarantor agrees to guarantee the obli- gations of the Borrower in respect of such loan as herein- after provided; and WHEREAS the Guarantor, in consideration of the Bank's entering into the Loan Agreement with the Borrower, has agreed so to guarantee such obligations of the Borrower; Now THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions SECTION 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank dated Jan- uary 31, 1969, with the same force and effect as if they were fully set forth herein, subject, however, to the modi- fications thereof set forth in Section 1.01 of the Loan Agree- ment (said General Conditions Applicable to Loan and Guarantee Agreements, as so modified, being hereinafter called the General Conditions). SECTION 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined 4 in the General Conditions and in Section 1.02 of the Loan Agreement have the respective meanings therein set forth. ARTICLE II Guarantee; Bonds; Provision of Funds SECTION 2.01. Without limitation or restriction upon any of its other obligations under the Guarantee Agreement, the Guarantor hereby unconditionally guarantees, as pri- mary obligor and not as surety merely, the due and punc- tual payment of the principal of, and interest and other charges on, the Loan and the Bonds, the premium, if any, on the prepayment of the Loan or the redemption of the Bonds prior to their maturity and the punctual perform- ance of all the other obligations of the Borrower, all as set forth in the Loan Agreement and in the Bonds. SECTION 2.02. The Guarantor shall endorse, in accord- ance with the provisions of the General Conditions, its guarantee on the Bonds to be executed and delivered by the Borrower. The Minister of Finance of the Guarantor and such other person or persons as he shall appoint in writing are designated as authorized representatives of the Guarantor for the purposes of Section 8.10 of the General Conditions. SECTION 2.03. Without limitation or restriction upon the provisions of Section 2.01 of this Agreement, the Guaran- tor specifically undertakes, whenever there is reasonable cause to believe that the funds available to the Borrower will be inadequate to meet the estimated expenditures re- quired for the carrying out of the Project, to make arrange- ments, satisfactory to the Bank, promptly to provide the Borrower or cause the Borrower to be provided with such funds as are needed to meet such expenditures. ARTICLE III Other Covenants SECTION 3.01. (a) It is the mutual intention of the Guar- antor and the Bank that no other external debt shall enjoy 0 5 any priority over the Loan or the Bonds by way of a lien on governmental assets. (b) To that end the Guarantor (i) represents that at the date of this Agreement no lien exists on any governmental assets as security for any external debt except as otherwise disclosed in writing by the Guarantor to the Bank, and (ii) undertakes that if any such lien -shall be created on any assets of the Guarantor, or of the T.C. Merkez Bankasi or any other institution performing the functions of a cen- tral bank, it 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 in the creation of any such lien express provision will be made to that effect. The Guar- antor shall promptly inform the Bank of the creation of any such lien. The term "assets of the Guarantor" as used in this See- tion includes assets of the Guarantor or of any of its politi- cal subdivisions or of any agency of the Guarantor or of any such political subdivision. SEcTION 3.02. The Guarantor covenants that it will not take, or cause or permit any of its political subdivisions or any of its agencies or any agency of any such political subdivisions to take any action which would prevent or interfere with the performance by the Borrower of its obli- gations contained in the Loan Agreement and will take or cause to be taken all reasonable action necessary or appro- priate to enable the Borrower to obtain the annual return specified in Section 5.05 of the Loan Agreement and to perform its other obligations under the Loan Agreement. SEUTION 3.03. The Guarantor shall take all such meas- ures as shall be necessary in order to facilitate the importa- tion by the Borrower of goods to be financed out of the proceeds of the Loan purchased outside Turkey in accord- ance with the provisions of the Loan Agreement. 6 ARTICLE IV Consultation and Information SECTION 4.01. The Guarantor and the Bank shall co- operate fully to assure that the purposes of the Loan will be accomplished. To that end the Guarantor and the Bank shall from time to time, at the request of either party: (i) exchange views through their representatives with re- gard to the performance of their respective obligations under the Guarantee Agreement, any amendments to the Turkish Electricity Authority Law (No. 1312) that may be under consideration or other matters relating to the pur- poses of the Loan; and (ii) 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. Guar- antor, such information shall include information with re- spect to financial and economic conditions in the territories of the Guarantor, including its balance of payments, and the external debt of the Guarantor, of any of its political subdivisions and of any agency of the Guarantor or of any such political subdivision. SECTION 4.02. (a) The Guarantor shall promptly inform the Bank of any condition which interferes with, or threat- ens to interfere with, the accomplishment of the purposes of the Loan or the maintenance of the service thereof. (b) The Guarantor shall afford all reasonable opportu- nity for accredited representatives of the Bank to visit any part of the territories of the Guarantor for purposes related to the Loan. ARTICLE V Taxes and Restrictions SECTION 5.01. The principal of, and interest and 'other charges on, the Loan and the Bonds -hall be paid without deduction for, and free from, any taxes imposed under the 0 7 laws of the Guarantor or laws in effect in its territories; provided, however, that the foregoing shall not apply to taxation of payments 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 Guarantor. SECTION 5.02. The Guarantee Agreement, the Loan Agreement, any instrument made pursuant to Section 3.01 of this Agreement and the Bonds shall be free from any taxes that shall be imposed under the laws of the Guar- antor or laws in effect in its territories on or in connection with the execution, issue, delivery or registration thereof and the Guarantor shall, in respect of any instrument made pursuant to such Section 3.01, pay all such taxes, if any, imposed under the laws of any other country or countries. SECTION 5.03. The payment of the principal of, and in- terest and other charges on, the Loan and the Bonds shall be free from all restrictions, regulations, controls or mora- toria of any nature imposed under the laws of the Guar- antor or laws in effect in its territories. ARTICLE VI Representative of the Guarantor; Addresses SECTION 6.01. The Minister of Finance of the Guarantor is designated as representative of the Guarantor for the purposes of Section 10.03 of the General Conditions. SECTION 6.02. The following addresses are specified for the purposes of Section 10.01 of the General Conditions: For the Guarantor: Maliye Bakanligi Hazine Genel Mudurlugu ve Milletlerarasi Iktisadi Isbirligi Teskilati Genel Sekreterligi Ankara, Turkey 8 Cable address: Maliye Hazine Ankara For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Intbafrad Washington, D.C. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereu.nto duly authorized, have caused this 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. REPUBLIC OF TURKEY By /s/ AHMET TUFAN GUL Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ J. BURKE KNAPP Vice President