Mexico - Rural Development Project-Papaloapan Basin : Loan 1053 - Loan Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1053 ME Loan Agreement (Integrated Rural Development Project - Papaloapan Basin) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND NACIONAL FINANCIERA, S.A. DATED NOVEMBER 15, 1974 CONFORMED COPY LOAN NUMBER 1053 ME Loan Agreement (Integrated Rural Development Project - Papaloapan Basin) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND NACIONAL FINANCIERA, S.A. DATED NOVEMBER 15, 1974 LOAN AGREEMENT AGREEMENT, dated November 15, 1974, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and NACIONAL FINANCIERA. S.A. (hereinafter called the Borrower). 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 March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Comisi6n " means Conisin del Papaloapan established under the Guarantor's Secretar7a' de Recursos Hidrdulicos, pursuant to the Decree published in the Diario Oficial of the Guarantor on April 24, 1947; (b) "Papaloapan Basin" means the area of approximately 46,500 km2 which constitutes the drainage basin of all the rivers and their tributaries which flow into the Laguna de Alvarado in the State of VeracruZ; (c) "Upper Basin" means the portion of the Papaloapan Basin, of approximately 25,500 kin2, at elevations of more than 100 m. above sea level; and (d) "Lower Basin" means the portion of the Papaloapan Basin, of approximately 21,000 km2, lying at elevations of 100 m. or less above sea level, but including the highlands of the Sierra de los Tuxtlas at elevations of more than 100 m. 4 ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to fifty million dollars ($50,000,000). Section 2.02. The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule I to this Agreement, as such Schedule may be amended from time to time, for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule I to the Guarantee Agreement and to be financed out of the proceeds of the Loan; provided, however, that except as the Bank shall otherwise agree, no withdrawal shall be made on account of expenditures (other than expenditures for engineering and design) for the development of the area under Part 1.A of the Project until the Irrigation District for such area shall have been established. Section 2.03. The Closing Date shall be June 30, 1980 or such other date as shall be agreed between the Bank and the Borrower. Section 2.04. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.05. The Borrower shall pay interest at the rate of eight per cent (8%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.06. Interest and other charges shall be payable semi-annually on March 15 and September 15 in each year. Section 2.07. The Borrower shall repay the principal anount of the Loan in accordance with the amortization schedule set forth in Schedule 2 to this Agreement. ARTICLE III Transfer of Loan Proceeds Section 3.01. The Borr wer shall make contractual arrangements with the Guarantor, satisfactory to the Bank, providing, inter alia, for the transfer to the 5 Guarantor of the proceeds of the Loan for the purpose of carrying out the Project and for the repayment of such proceeds, and except as the Bank shall otherwise agree, the Borrower shall not amend, assign, abrogate or waive any provision of such arrangements. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower represents that at the date of this Agreement no lien exists on any of its assets as security for any external debt. (b) The Borrower undertakes that, except as the Bank shall otherwise agree, if any lien shall be created on any assets of the Borrower 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 that in the creation of any such lien express provision will be made to that effect, at no cost to the Bank; provided, however, that the foregoing provisions of this paragraph shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for the payment of the purchase price of such property; or (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after the date on which it is originally incurred. ARTICLE V Termination Section 5.01. The date March 14, 1975 is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VI Addresses Section 6.01. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America 6 Cable address: INTBAFRAD Washington, D.C. For the Borrower: Nacional Financiera, S.A. Isabel la Cat6lica 51 M6xico 1, D.F. M6xico Cable address: NAFIN 383-1772538 M6xico City 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. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Gerald Alter Regional Vice President Latin America and the Caribbean NACIONAL FINANCIERA, S.A. By /s / Leandro Rovirosa Wade Authorized Representative 7 SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Irrigation Systems: (a) Esperanza and 1,400,000 41% of total ex- Palmar de Bravo penditures Valleys (b) Rio Salado 3,300,000 41% of total ex- Irrigation penditures District (c) Rio Blanco 2,000,000 41% of total ex- Irrigation penditures District (2) Technical Assis- tance: Salaries and acqui- sition of vehicles, materials and equip- ment (a) Irrigated 800,000 41% of total ex- areas (PLAMEPA) penditures (b) Rainfed areas 3,500,000 41% of total ex- (PLANPA) penditures 0 8 Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (3) Experimental Farms: 1,500,000 41% of total ex- penditures Acquisition of vehicles, equip- ment, machinery, salaries (other than secretarial and laborers), and construction of buildings (4) Feeder Roads 9,120,000 41% of total ex- penditures (5) Marketing Facili- 500,000 41% of total e-:- ties penditures (6) Water Supply Faci- 5,500,000 lities: (a) Systems with 41% of total ex- Hydrants only penditures (b) Systems with 46% of total ex- Individual penditures Household Connections (7) Sewerage Facilities 1,600,000 50% of total ex- penditures (8) Electricity Supply 3,300,000 48% of total ex- penditures (9) Medical Facilities 3,100,000 41% of total ex- penditures 9 Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (10) Educational Facili- 3,400,000 41% of total ex- ties penditures (11) Community Centers 900,000 41% of total ex- penditures (12) Project Monitoring: 80,000 41% of total ex- penditures Salaries and acqui- sition of vehicles, materials and equipment (13) Unallocated 10,000,000 TOTAL 50,000,000 For purposes of this paragraph, expenditures for construction of civil works include, where appropriate, expenditures for engineering, design and supervision of construction, which in no case shall exceed 10% of all other construction costs. 2. The disbursement percentages have been calculated in compliance with the policy of the Bank that no proceeds of the Loan shall be disbursed on account of payments for taxes levied by, or in the territory of, the Guarantor on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if any such taxes shall be included in the cost of any item to be financed out of the proceeds of the Loan, the Bank may, by notice to the Borrower, correspondingly adjust the disbursement percentage then applicable to such item. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of expenditures: (i) prior to the date of this Agreement; (ii) for land acquisition; and (iii) for household plumbing and electrical wiring. 10 4. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in paragraph I above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Bank may, by notice to the Borrower: (i) reallocate to such Category to the extent required to meet the estimated shortfall proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank and the Borrower are not needed to meet other expenditures; and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 5. If the Bank, after consultation with the Borrower, 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 expenditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as in the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan. 11 SCHEDULE 2 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* March 15, 1980 525,000 September 15, 1980 545,0 March 15, 1981 570,000 September 15, 1981 590,000 March 15, 1982 615,000 September 15, 1982 640,000 March 15, 1983 665,000 September 15, 1983 690,00 March 15, 1984 720,000 September 15, 1984 750,00 March 15, 1985 780,000 September 15, 1985 810)000 March 15, 1986 840,000 September 15, 1986 875,000 March 15, 1987 910,000 September 15, 1987 950,000 March 15, 1988 985,0 September 15, 1988 1,025,000 . March 15, 1989 1,05,000 September 15, 1989 1,110,000 March 15, 1990 1,155,000 September 15, 1990 1,200,000 March 15, 1991 1,245,000 September 15, 1991 1,295,000 March 15, 1992 1,350,000 September 15, 1992 1,405,000 March 15, 1993 1,460,000 September 15, 1993 1,515,000 March 15, 1994 1,580,000 September 15, 1994 1,640,000 March 15, 1995 1,705,000 September 15, 1995 1,775,000 March 15, 1996 1,845,000 September 15, 1996 1,920,000 March 15, 1997 1,995,000 September 15, 1997 2,075,000 March 15, 1998 2,160,000 September 15, 1998 2,245,000 March 15, 1999 2,335,000 September 15, 1999 2,440,000 To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dol(lar equivalents determined as for purposes of withdrawal. 02,0 12 Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05(b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 3/4% More than three years but not more than six years before maturity 2-1/4% More than six years but not more than eleven years before maturity 3% More than eleven years but not more than sixteen years before maturity 4-3/4% More than sixteen years but not more than twenty- one years before maturity 6-3/4% More th?n twenty-one years but not more than twenty-three years before maturity 7-1/2% More than t.venty-three years before maturity 8%