China - Industrial Credit Project : Credit 1313 - Credit Agreement - Conformed

LOUFFICIAL] CUMENTS CREDIT NUMBER. 1313 CHA Development Credit Agreement (Industrial Credit Project) between PEOPLE' S REPUBLIC OF CRINA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1982 CREDIT NUMBER 1313 CHA DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated e-, te--oL , 1982, between PEOPLE'S REPUBLIC OF CHINA (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) the Borrower has requested the Association to assist in the financing of the Project described in Section 3.01 (a) of this Agreement by extending the Credit as hereinafter provided; (B) the Borrower has also requested the International Bank for Reconstruction and Development (the Bank) to provide addi- tional assistance towards the financing of the Project and by an agreement of even date herewith between the Borrower and the Bank (hereinafter called the Loan Agreement), the Bank is agreeing to provide such assistance in an aggregate princiral amount equiva- lent to forty million six hundred thousand dollars ($40,600,000) (hereinafter called the Loan); (C) the Borrower and the Association intend, to the extent practicable, that the proceeds of the Credit provided for in this Agreement be disbursed on account of expenditures on the Project before disbursements of the proceeds of the Loan provided for in the Loan Agreement are made; (D) the Project will be carried out by China Investment Bank (hereinafter called CIB) with the Borrower's assistance, and as part of such assistance, the Borrower will make available to CIB the proceeds of the Credit as here>nafter provided and the proceeds of the Loan as provided in the Loan Agreement; and WHEREAS the Association has agreed, on the basis inter alia of the foregoing, to extend the Credit to the Borrower upon the terms and conditions set forth hereinafter and in the Project Agreement of even date herewith among the Association, the Bank and CIB; NOW THEREFORE the parties hereto hereby agree as follows: -2- ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated June 30, 1980, with the same force and effect as if they were fully set forth herein, subject, however, to the following modifications thereof (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, being hereinafter called the General Conditions): (a) The following subparagraph is added to Section 2.01: "14. The term 'Project Agreement' has the meaning set forth in paragraph (b) of Section 1.02 of the Development Credit Agreement." (b) The words "or for Investment Projects" are added after the words "the Project" at the end of Section 5.03. (c) Section 6.03 is deleted and replaced by the following new Section: "Section 6.03. Cancellation by the Association. If (a) the right of the Borrower to make withdrawals from the Credit Account shall have been suspended with respect to any amount of the Credit for a continuous period of thirty days or (b) by the date specified in Section 2.02 (e) of the Pro- ject Agreement no applications for approval or requests for authorization to withdraw from the Credit Account permitted under paragraphs (b), (c) or (d) of such Section, respec- tively, shall have been received by the Association in respect of any portion of the Credit, or having been so received, shall have been denied, or (c) after the Closing Date an amount of the Credit shall remain unwithdrawn from the Credit Account, the Association may, by notice to the Borrower, terminate the right to request such approvals and authorizations or to make withdrawals from the Credit Account, as the case may be, with respect to such amount or portion of the Credit. Upon the giving of such notice such amount or portion of the Credit shall be cancelled." -3- Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the Gen- eral Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "CIB" means China Investment Bank, a state enterprise established pursuant to the Charter of the China Investment Bank, approved by the Borrower's State Council on December 4, 1981. (b) "Project Agreement" means the agreement of even date herewith among the Association, the Bank and CIB, as such agree- ment may be amended from time to time, and such term includes all agreements supplemental to the Project Agreement, and all sche- dules to the Project Agreement. (c) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and CIB pursuant to Section 3.02 (a) of this Agreement, as the same may be amended from time to time, and such term includes all schedules, if any, to the Subsidiary Loan Agreement. (d) "Loan Agreement" means the agreement of even date here- with between the Borrower and the Bank for the purpose of the Project, as such agreement may be amended from time to time, and such cerm includes the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated October 27, 1980, as made applicable to such agreement, all agreements supplemental to the Loan Agreement and all schedules t.o the Loan Agreement. (e) "Sub-loan" means a loan or credit made or proposed to be made by CIB out of the equivalent of the proceeds of the Credit and of the proceeds of the Loan relent to CIB under the Subsidiary Loan Agreement: (i) to an Investment Enterprise for an Investment Project (hereinafter called an Investment Sub-loan); or (ii) to an Investment Enterprise to finance foreign expendi- tures incurred by the Investment Enterprise in preparing an Investment Project (hereinafter called a Preparation Sub-loan); and "free-limit Sub-loan" means an Investment Sub-loan, as so defined, which qualifies as a free-limit Sub-loan pursuant to the provisions of Section 2.02 (b) of this Agreement. (f) "Investment Enterprise" means an enterprise to which CIB proposes to make or has made a Sub-loan. -4- (g) "Investment Project" means a specific development pro- ject to be carried out by an Investment Enterprise utilizing the proceeds of an Investment Sub-loan. (h) "Renminbi" and "Y " means the currency of the Borrower. (i) "foreign currency" means any currency other than the currency of the Borrower. (j) "Charter" means the Charter of CIB approved on Decem- ber 4, 1981, and "Supplementary Regulations" means the Supple- mentary Regulations approved by CIB's Board of Directors on October 6, 1982. (k) "Statement of Policy" and "Statement of- Development Strategy" mean the Policy Statement and Development Strategy Statement of CIB, respectively, as approved by its Board of Directors on November 20, 1982. (1) "Lending Regulations" means the Lending Procedures (on a Trial Basis) of CIB, to be approved in accordance with Section 5.01 (f) of this Agreement,, (m) "Subsidiary" means any company of which a majority of the outstanding voting stock or other proprietary interest is owned or effectively controlled by CIB or by any one or more sub- sidiaries of CIB or by CIB and one or more of its subsidiaries. (n) "CNTIC" means China National Technical Import Corpora- tion, established under the Borrower's Ministry of Foreign Econo- mic Relations and Trade. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Bor- rower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various curren- cies equivalent to twenty-eight million Special Drawing Rights (SDR 28,000,000). Section 2.02. (a) Subject to the provisions of paragraphs (b) and (c) of this Section, CIB, on behalf of the Borrower -5- pursuant to Section 2.03 of this Agreement, may withdraw from the Credit Account: (i) up to an aggregate equivalent of twenty-six mil- lion seven hundred eighty thousand Special Drawing Rights (SDR 26,780,000) or such other amount as the Borrower and the Association shall otherwise agree, for amounts paid (or, if the Association shall so agree, amounts to be paid) by CIB on account of withdrawals made by an Investment Enterprise under an Investment Sub-Loan: (A) to meet the reasonable foreign currency cost of goods and services required for the Investment Project in respect of which the withdrawal from the Credit Account is requested, or (B) to meet 90% of the ex-factory cost of items manufactured in China which shall have been procured in accordance with Part B.1 of the Schedule to the Project Agreement; provided, however, that no withdrawal shall be made in respect of such a Sub-loan unless (A) the Sub-loan shall have been approved by the Associa- tion or (B) the Sub-loan shall be a free-limit Sub-loan for which the Association shall have authorized withdrawals from the Credit Account; (ii) up to an aggregate equivalent of nine hundred for- ty thousand Special Drawing Rights (SDR 940,000) or such other amount as the Borrower and the Asso- ciation shall otherwise agree, for amounts paid (or, if the Association shall so agree, amounts to be paid) by CIB on account of withdrawals made by an Investment Enterprise under a Preparation Sub- loan to meet the reasonable foreign currency cost of the technical assistance required for the Investment Project in respect of which the with- drawal from the Credit Account is requested; pro- vided, however, that no withdrawal shall be made in respect of such a Sub-loan unless the Associa- tion shall have authorized withdrawals from the Credit Account for such Sub-loan; and (iii) up to an aggregate equivalent of two hundred eighty thousand Special Drawing Rights (SDR 280,000) or such other amount as the Borrower and -6- the Association shall otherwise agree, for expen- ditures made (or if the Association shall so agree, to be made) in respect of the reasonable foreign currency cost of consultants' services and overseas study tours and technical visits required pursuant to Section 3.01 (a) (ii) of this Agree- ment and to be financed out of the proceeds of the Credit, consisting of 100% of foreign currency expenditures therefor. (b) A free-limit Sub-loan shall be an Investment Sub-loan for an Investment Project in an amount to be financed under the Development Credit Agreement or the Loan Agreement which, toge- ther with any other amount or amounts previously financed for the same Investment Project under Investment Sub-loans financed from the proceeds of the Credit and the Loan, and not repaid, shall not exceed in the aggregate the equivalent of $1,000,000 and which, when added to all other free-limit Sub-loans. financed under the Development Credit Agreement and the Loan Agreement, shall not exceed in the aggregate the equivalent of $20,000,000, the foregoing amounts being subject to change from time to time as determined by the Association; provided, however, that the first three Investment Sub-loans presented by any CIB branch shall not be deemed free-limit Sub-loans, irrespective of the amount of any such Sub-loan. (c) Except *as the Association shall otherwise agree, no withdrawals shall be made on account of: (i) expenditures made by an Investment Enterprise prior to the date of this Agreement; (ii) expenditures made in respect of an Investment Sub-loan sub- ject to the Association's approval more than ninety days prior to the date on which the Association shall have received the appli- cation and information required under Section 2.02 (b) of the Project Agreement; or (iii) expenditures made in respect of a free-limit Sub-loan or a Preparation Sub-loan more than ninety days prior to the date on which the Association shall have re- ceived the request and information required by Section 2.02 (c) and (d) of the Project Agreement. Section 2.03. CIB is designated as representative of the Borrower for the purposes of taking any action required or per- mitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions. -7- Section 2.04. The Closing Date shall be December 31, 1987 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. Section 2.05. (a) The Borrower shall pay to the Association a commitment charge at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of the Credit not withdrawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the Development Credit Agreement to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or shall be cancelled. (b) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without restrictions of any kind imposed by, or in the territory of, the Borrower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the-provisions of that Section. Section 2.06. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.07. Commitment charges and service charges shall be payable semiannually on June 15 and December 15 in each year. Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each June 15 and December 15 commencing June 15, 1993, and ending December 15, 2032, each installment to and including the installment payable on December 15, 2002, to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.09. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. -8- ARTICLE III Description of the Project; Use of Proceeds of the Credit Section 3.01. (a) The purpose of the Project is to assist CIB in financing such productive facilities and resources in the territory of the Borrower as will contribute to the economic, technological and social development of the country. The Project consists of: (i) the financing of specific development projects through loans to enterprises in such territory, in furtherance of the purposes of CIB as set forth in the Charter, the Statement of Policy and the Statement of Development Strategy; and (ii) facilitating the development of CIB's operations, including project preparation, appraisal and supervision, through provision of consultants' services and overseas study tours and technical visits. (b) Without any limitation or restriction upon any of its other obligations under the Development Credit Agreement or the Loan Agreement, the Borrower: (i) shall cause CIB to perform in accordance with the provisions of the Project Agreement and the Subsidiary Loan Agreement all the obligations therein set forth, shall take and cause to be taken all action, including the provi- sion of funds, facilities, services and other resources, neces- sary or appropriate to enable CIB to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance; (ii) shall enable Investment Enterprises to obtain sufficient amounts of foreign currency as and when needed to make payments to CIB under their Sub-loans; and (iii) shall cause CNTIC to assist CIB in carrying out its responsibilities under Part B of the Schedule to the Project Agreement. Section 3.02. (a) The Borrower shall relend the proceeds of the Credit and the proceeds of the Loan to CIB under a Subsidiary Loan Agreement to be entered into between the Borrower and CIB whose terms and conditions shall have been approved by the Asso- ciation, which shall include, inter alia, a rate of interest of six and nine-tenths per cent (6-9/10%) per annum on the principal -9- amount withdrawn and outstanding from time to time, with repay- ment terms over twenty years including a period of grace of five years, the repayment by CIB being the dollar equivalent of the proceeds of the Credit and the proceeds of the Loan so re-lent (such equivalent to be determined as of the respective dates of withdrawals of proceeds from the Credit Account and Loan Ac- count), and commitment charges borne by the Borrower under the Development Credit Agreement and the Loan Agreement to be paid to the Borrower by CIB. (b) The Borrower shall exercise its rights under the Sub- sidiary Loan Agreement in such manner as to protect the interests of the Borrower and the Association and to accomplish the pur- poses of the Credit, and except as the Association shall other- wise agree, the Borrower shall not assign, amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. ARTICLE IV Remedies of the Association Section 4.01. For the purposes of Section 6.02 of the Gen- eral Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) CIB shall have failed to perform any of its obligations under the Project Agreement. (b) As a result of events which have occurred after the date of this Agreement, an extraordinary situation shall have arisen which shall make it improbable that CIB will be able to perform its obligations under the Project Agreement. (c) The Charter, Supplementary Regulations or Lending Regu- lations shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the operations or financial condition of CIB or its ability to perform any of its obligations under the Project Agreement. (d) A change shall have been made in the Statement of Poli- cy or Statement of Development Strategy without the Association's concurrence. (e) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of CIB or for the suspension of its operations. - 10 - (f) Any part of the principal amount of any loan to CIB having an original maturity of one year or more shall, in accor- dance with its terms, have become due and payable in advance of maturity, as provided in the relative contractual instruments, or any security for any such loan shall have become enforceable. (g) CIB shall be unable to pay its debts as they mature or any action or proceeding shall have been undertaken whereby any of the property of CIB shall or may be distributed among its cre- ditors. (h) A Subsidiary or any other entity shall have been created or acquired or taken over by CIB, if such creation, acquisition or taking over would adversely affect the conduct of CIB's business, its financial situation, the efficiency of its management and personnel or the carrying out of the Project. Section 4.02. For the purposes of Section 7.01 of the Gen- eral Conditions, the following additional events are specified pursuant to paragraph (d) thereof: (a) any event specified in paragraph (a), (e) or (h) of Section 4.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower and CIB; and (b) any event specified in paragraph (c), (d), (f) or (g) of Section 4.01 of this Agreement shall occur. ARTICLE V Effective Date; Termination Section 5.01. The following events are specified as addi- tional conditions to the effectiveness of this Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the Borrower's State Council has approved this Agree- ment; (b) the Subsidiary Loan Agreement has been executed on behalf of the Borrower and CIB, respectively; (c) CIB has issued a project appraisal manual pursuant to the provisions of Section 2.09 (a) (i) of the Project Agreement; - 11 - (d) CIB has concluded a contract, satisfactory to the Asso- ciation, for the provision of engineering services to CIB; (e) CIB has appointed a full-time qualified and experienced senior economic advisor; (f) CIB has issued Lending Regulations satisfactory to the Association; (g) a Vice President of CIB has been appointed in accor- dance with the Charter; and (h) all conditions precedent to the effectiveness of the Loan Agreement have been fulfilled, except for the effectiveness of this Agreement. Section 5.02. The following are specified as additional mat- ters, within the meaning of Section 12.02 (b) of the General Con- ditions, to be included in the opinion or opinions to be fur- nished to the Association: (a) that the Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, CIB, and is legally binding upon CIB in accordance with its terms; and (b) that the Subsidiary Loan Agreement has been duly authorized or ratified by the Porrower and CIB and is legally binding upon the Borrower and CIB in accordance with its terms. Section 5.03. The date MQ1va&1983 is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 5.04. The provisions of paragraphs (a) through (h) of Section 4.01 of this Agreement and those of paragraphs (a) and (b) of Section 4.02 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall ter- minate or on a date 20 years after the date of this Agreement, whichever shall be the earlier. - 12 - ARTICLE VI Representative of the Borrower; Addresses Section 6.01. Except as provided in Section 2.03 of this Agreement, the Minister of Finance of the Borrower is designated as representative of the Borrower 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 Borrower: Ministry of Finance Sanlihe Beijing People's Republic of China Cable address: Telex: FINANMIN 22486 MFPRC CN Beijing For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) - 13 - IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in thc' respective names in the District of Columbia, United States of America, as of the day and year first above written. PEOPLE'S REPUBLIC OF CHINA By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By / N0 Regional Vice President East Asia and Pacific INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the 2M.1- day of 198 . FO SECRETARY FOR SECRETARY