Southern Rhodesia - Electric Power Project : Loan 0058 - Loan Agreement - Conformed

LOAN NO. 58 SR Loan Agreement (Electric Power Project) BETWEEN COLONY OF SOUTHERN RHODESIA AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED FEBRUARY 27, 1952 Pans or BYaoN S. ADAMS, WASmNcTON, D. C. . Roan Mgreement AGREEMENT, dated February 27, 1952, between COLONY OF SOUTHERN RHODESIA (hereinafter called the Bor- rower) and INTERNATIONAL BANK FOR RECONSTRUCTION ANfD DEVELOPMENT (hereinafter called the Bank). ARTICLE I Loan Regulations; Special Definitions SECTION 1.01. The parties to this Agreement accept all the provisions of Loan Regulations No. 4 of the Bank dated December 6, 1950, subject, however, to the modifications thereof set forth in Schedule 3 to this Agreement (such Loan Regulations No. 4 as so modified being hereinafter called the Loan Regulations), with the same force and ef- fect as if they were fully set forth herein. SECTION 1.02. The term "Plan" means the Second Four- Year Plan of Capital Development of the Borrower de- scribed in Part 1 of Schedule 2 to this Agreement. ARTICLE II The Loan SECTION 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in this Agreement set forth or referred to, the sum of bienty-eight million dollars ($28,000,000), or the equivalent thereof in currencies other than dollars. SECTION 2.02. The Bank shall open a Loan Account on its books in the name of the Borrower and shall credit to such Account the amount of the Loan. The amount of the Loan may be withdrawn from the Loan Account as provided in, and subject to the rights of cancellation and suspension set forth in, the Loan Regulations. 4 SECTION 2.03. 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charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not so withdrawn from time to time. SECTION 2.04. The Borrower shall pay interest at the rate of four and three-quarters per cent (43/4%) per annum on the principal amount of the Loan so withdrawn and out- standing from time to time. SECTION 2.05. Except as the Borrower and the Bank shall otherwise agree, the charge payable for special com- mitments entered into by the Bank at the request of the Borrower pursuant to Section 4.02 of the Loan Regula- tions shall be at the rate of one half of one percent (2 of 1%) per annum on the principal amount of such special commitment outstanding. SECTION 2.06. Interest and other charges shall be pay- able semi-annually on May 1 and November 1 in each year. SECTION 2.07. The Borrower shall repay the principal of the Loan in accordance with the amortization schedule set forth in Schedule 1 to this Agreement. ARTICLE III Use of Proceeds of the Loan SECTION 3.01. The Borrower shall apply the proceeds of the Loan exclusively to the cost of goods which will be required for the carrying out of the Project described in Part 2 of Schedule 2 to this Agreement. The specific goods to be purchased out of the proceeds of the Loan shall be determined by agreement between the Borrower and the Bank, and the list of such goods may be modified from time to time by agreement between them. 5 SECTION 3.02. The Borrower shall cause all goods pur- chased with the proceeds of the Loan to be imported into the territory of the Borrower and there to be used exclu- sively in the carrying out of the Project. ARTICLE IV Bonds SECTION 4.01. The Borrower shall execute and deliver Bonds representing the principal amount of the Loan as provided in the Loan Regulations. SECTION 4.02. The Minister of Finance of the Borrower and such person or persons as he shall appoint in writing are designated as authorized representatives of the Bor- rower for the purposes of Section 6.12 (a) of the Loan Regulations. ARTICLE V Particular Covenants SECTION 5.01. The Borrower shall carry out or cause to be carried out the Plan and the Project with due diligence and efficiency and in conformity with sound engineering and financial practices. SECTION 5.02. The Borrower shall make the proceeds of the Loan available to the body or bodies charged with the carrying out of the Project, on terms and conditions satis- factory to the Bank. SECTION 5.03. (a) The Borrower shall furnish or cause to be furnished to the Bank, promptly upon their prepara- tion, the plans and specifications for the Plan, the Project and any material modifications subsequently made therein. 6 (b) The Borrower shall maintain or cause to be main- tained records showing the use made of the goods and the progress of the Project (including the oost thereof) and of the Plan and the financial condition and operations of the body or bodies responsible for the construction or operation of the Plan, the Project or any part of the Plan or the Proj- ect; shall enable the Bank's representatives to examine the Plan, the Project, the goods and any relevant records and documents; and shall furnish to the Bank all such informa- tion as the Bank shall reasonably request concerning the goods, the Plan, the Project, and the financial condition and operations of the body or bodies responsible for the oon- struction or operation of the Plan, the Project or any part of the Plan or the Project. SECTION 5.04. (a) The Bank and the Borrower shall cooperate fully to assure that the purposes of the Loan will be accomplished. To that end, each of them shall 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 Borrower, such information shall include information with respect to financial and economic con- ditions in the territory of the Borrower and the external balance of payments position of the Borrower, including its balance of payments position with the United Kingdom. (b) The Bank and the Borrower shall from time to time exchange views through their representatives with regard to matters relating to the purposes of the Loan and the maintenance of the service thereof. The Borrower shall promptly inform the Bank of any condition which shall arise that shall interfere with, or threaten to interfere with, the accomplishment of the purposes of the Loan or the main- tenance of the service thereof or shall increase, or threaten to increase, the estimated cost of the Project materially over the estimated cost set forth in Schedule 2 to this Agreement. 7 (e) The Borrower shall afford all reasonable opportunity for accredited representatives of the Bank to visit any part of the territory of the Borrower for purposes related to the Loan. SECTION 5.05. It is the mutual intention of the Borrower and the Bank that no debt other than debt payable in Southern Rhodesia currency shall enjoy any priority over the Loan by way of a lien on governmental assets. To that end, the Borrower undertakes that, except as the Bank shall otherwise agree, if any lien shall be created on any assets of the Borrower or of any of its political subdivisions or of any agency of the Borrower or of any such political subdivision as security for any such 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 the Bonds, and that in the creation of any such lien express provision shall be made to that effect; provided, however, that the foregoing provisions of this Section shall not apply to (a) any lien created on property, at the time of purchase there- of, solely as security for the payment of the purchase price of such property; (b) any lien on commercial goods to se- cure debt maturing not more than one year after its incur- rence and to be paid out of the proceeds of sale of such commercial goods; or (c) any lien created by the Borrower or any agency of the Borrower on any assets in the ordi- nary course of banking business to secure any debt matur- ing by its terms not more than one year after its incur- rence. SECTION 5.06. The principal of, and interest and other charges on, the Loan and the Bonds shall be paid without deduction for and free from any taxes or fees imposed under the laws of the Borrower or laws in effect in its territory; provided, however, that the provisions of this Section shall not apply to taxation of, or fees upon, pay- ments 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 Borrower. 8 SECTION 5.07. The Loan Agreement and the Bonds shall be free from any taxes or fees that shall be imposed under the laws of the Borrower or laws in effect in its territory on or in connection with the execution, issue, delivery or registration thereof and the Borrower shall pay all such taxes and fees, if any, imposed under the laws of the country or countries in whose currency the Loan and the Bonds are payable or laws in effect in the territories of such country or countries. SECTION 5.08. The principal of, and interest and other charges on, the Loan and the Bonds shall be paid free from all restrictions imposed under the laws of the Borrower or laws in effect in its territory. SECTION 5.09. The Borrower shall satisfy the Bank that adequate arrangements have been made to insure the goods financed with the proceeds of the Loan against risks in- cident to their purchase and importation into the territory of the Borrower. ARTICLE VI Remedies of the Bank SECTION 6.01. If any event specified in paragraph (a) or paragraph (b) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of thirty days or if any event specified in paragraph (c) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower, then at any subsequent time during the continuance thereof, the Bank, at its option, may declare the principal of the Loan and of all the Bonds then outstanding to be due and payable immediately, and upon any such declaration such principal shall become due and payable immediately, anything in this Agreement or in the Bonds to the contrary notwithstanding. 9 ARTICLE VII Miscellaneous SECTION 7.01. The Closing Date shall be March 31, 1955. SECTION 7.02, May 1, 1952 is hereby specified for the purposes of Section 9.04 of the Loan Regulations. SECTION 7.03. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: For the Borrower: Minister of Finance, Treasury, Salisbury, Southern Rhodesia. For the Bank: International Bank for Reconstruction and Development, 1818 H Street, N. W., Washington 25, D. C., United States of America. SECTION 7.04. The Secretary to the Treasury of the Borrower is designated for the purposes of Section 8.03 (a) of the Loan Regulations, set forth in Schedule 3 to this Agreement. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Loan 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. COLoNY OF SOUTHERN RHODESIA by D. H. CUMMINGS, Authorized Representative INTERNATIONAL BANK FOR RECON- STRUCTION AND DEVELOPMENT by W. A. B. ILIFF Assistant to the President 10 SHEDULE 1 Amortization Schedule Principal Amount Payment of Outstanding After Date Principal Each Payment Payment (expressed (expressed Due in dollars) * in dollars) * May 1, 1956 $ - $28,000,000 Nov. 1, 1956 667,000 27,333,000 May 1, 1957 666,000 26,667,000 Nov. 1, 1957 667,000 26,000,000 May 1, 1958 667,000 25,333,000 Nov. 1, 1958 666,000 24,667,000 May 1, 1959 667,000 24,000,000 Nov. 1, 1959 667,000 23,333,000 May 1, 1960 666,000 22,667,000 Nov. 1, 1960 667,000 22,000,000 May 1, 1961 667,000 21,333,000 Nov. 1, 1961 666,000 20,667,000 May 1, 1962 667,000 20,000,000 Nov. 1, 1962 667,000 19,333,000 May 1, 1963 666,000 18,667,000 Nov. 1, 1963 667,000 18,000,000 May 1, 1964 667,000 17,333,000 Nov. 1, 1964 666,000 16,667,000 May 1, 1965 667,000 16,000,000 Nov. 1, 1965 667,000 15,333,000 May 1, 1966 666,000 14,667,000 Nov. 1, 1966 667,000 14,000,000 May 1, 1967 667,000 13,333,000 Nov. 1, 1967 666,000 12,667,000 May 1, 1968 667,000 12,000,000 Nov. 1, 1968 667,000 11,333,000 May 1, 1969 666,000 10,667,000 Nov. 1, 1969 667,000 10,000,000 May 1, 1970 667,000 9,333,000 Nov. 1, 1970 666,000 8,667,000 May 1, 1971 667,000 8,000,000 Nov. 1, 1971 667,000 7,333,000 May 1, 1972 666,000 6,667,000 Nov. 1, 1972 667,000 6,000,000 May 1, 1973 667,000 5,333,000 Nov. 1, 1973 666,000 4,667,000 May 1, 1974 667,000 4,000,000 Nov. 1, 1974 667,000 3,333,000 May 1, 1975 666,000 2,667,000 Nov. 1, 1975 667,000 2,000,000 May 1, 1976 667,000 1,333,000 Nov. 1, 1976 666,000 667,000 May 1, 1977 667,000 * To the extent that any part of the Loan is repayable in a cur- rency other than dollars (see Loan Regulations Section 3.02), the figures in these columns represent dollar equivalents determined as for purposes of withdrawal. 11 Premiums on Prepayment and Redemption The following percentages are specified as the premiums payable on repayment in advance of maturity of any part of the principal amount of the Loan pursuant to Section 2.05 (b) of the Loan Regulations or on the redemption of any Bond prior to its maturity pursuant to Section 6.16 of the Loan Regulations: Time of Prepayment or Redemption Premium Not more than 5 years before maturity......Y1 % More than 5 years but not more than 10 years before maturity ........................ 1% More than 10 years but not more than 15 years before maturity .................. 1%% More than 15 years but not more than 20 years before maturity .................. 2% More than 20 years before maturity....... 2/2% S0REDULE 2 Part 1-Description of the Plan The Plan is the Second Four-Year Plan of Capital Devel- opment of the Borrower, covering the period April 1, 1951 to March 31, 1955, as set forth in the Report thereon of June 9, 1951, prepared by the Treasury of the Borrower, as such Plan may be amended from time to time by agree- ment between the Bank, the Borrower and the Guarantor. The Plan provides for capital expenditures substantially as fo.ows: Rhodesia Railways ................. 33,600,000 Electric power ...................... 21,700,000 Roads, civil aviation and airways ........ 6,875,000 Radio and telecommunications .......... 3,450,000 Water supply and irrigation ............ 6,100,000 Housing and public buildings ........... 14,280,000 Pool of mechanical equipment ........... .1,555,000 Agriculture and industry ............... 5,785,000 Native affairs, including native housing .. 5,500,000 Health and education and other services .. 1,155,000 £100,000,000 12 Part 2-Description of the Project The Project consists of the expansion, during the period April 1, 1952 to. March 31, 1955, of the electricity generating, transmission and distribution facilities of the principal suppliers of electricity in the territory of the Borrower, namely the Electricity Supply Commission, the Munici- pality of Salisbury and the Municipality of Bulawayo, by the installation of about 230,000 kilowatts of thermal gen- erating capacity, the construction of about 2,000 miles of transmission lines having capacities varying from 11,000 to 88,000 volts and the installation of sub-station, transfor- mer and other distribution equipment appropriate thereto. The estimated cost of the Project is £18,500,000. SCHEDULE 3 Modification of Loan Regulations No. 4 For the purposes of this Loan Agreement, Loan Regula- tions No. 4 of the Bank, dated December 6, 1950, shall be deemed to be modified as follows: (a) The second sentence of Section 2.02 shall read as follows: "Such commitment charge shall accrue from the Effective Date or from May 1, 1952, whichever shall be the earlier, or from such other date as may be agreed upon between the Bank and the Borrower, to the respective dates on which amounts shall be withdrawn by the Borrower from the Loan Account as provided in Article IV or shall be cancelled pursuant to Ar- ticle V." (b) Section 4.01 shall read as follows: "The Bor- rower shall be entitled, subject to the provisions of these Regulations, to withdraw from the Loan Account (i) such ampunts as shall be required by the Borrower to reimburse it for the reasonable cost of goods to be financed under the Loan Agreement, and (ii), if the Bank shall so agree, such amounts as shall be required 13 by the Borrower to meet the reasonable cost of such goods; provided, however, that the rate of such with- drawals shall be determined in such manner, mutually satisfactory to the Bank and the Borrower, as to ensure that the aggregate amount of the Loan with- drawn at any one time in respect of goods purchased in the United Kingdom shall not be a substantially greater percentage of the total amount of the Loan than the amount expended on the Plan by that time is of £100,000,000. Except as shall be otherwise agreed between the Bank and the Borrower, no withdrawals shall be made on account of (a) expenditures prior to the Effective Date or (b) expenditures in Southern Rhodesia currency or (c) goods acquired from sources within the Borrower's territory." (c) The last two sentences of Section 4.02 shall be deleted. (d) A new Section 8.03 (a) shall be inserted: "Action on behalf of Borrower. Any action required or permitted to be taken, and any documents re- quired or permitted to be executed, under the Loan Agreement on behalf of the Borrower may be taken or executed by the representative of the Borrower de- signated in the Loan Agreement for the purposes of this Section or any person thereunto authorized in writing by him. Any modification or amplification of the provi- sions of the Loan Agreement may be agreed to on be- half of the Borrower by written instrument executed on behalf of the Borrower by the representative so desig- nated or any person thereunto authorized in writing by him; provided that, in the opinion of such representa- tive, such modification or amplification is reasonable in the circumstances and will not substantially increase the obligations of the Borrower under the Loan Agree- ment. The Bank may accept the execution by such rep- resentative or other person of any such instrument as 14 conclusive evidence that in the opinion of such repre- sentative any modification or amplification of the provi- sions of the Loan Agreement effected by such instru- ment is reasonable in the circumstances and will not substantially increase the obligations of the Borrower thereunder." (e) Section 9.01 shall read as follows: "Conditions Precedent to Effectiveness of Loan Agreement. The Loan Agreement shall not become effective until (a) the execution and delivery of the Loan Agree- ment on behalf of the Borrower shall have been duly authorized or ratified by all necessary governmental action; (b) the execution and delivery of the Guarantee Agreement shall have been duly authorized or ratified by all necessary governmental action; (c) all other events specified in the Loan Agreement as conditions to its effectiveness shall have occurred; and (d) evidence thereof satisfactory to the Bank shall have been fur- nished to the Bank."