India - Madras Water Supply And Sanitation Project : Loan 2846 - Loan Agreement - Conformed

IUhHCIiAL1 LOAN NUMBER 2846 IN CREDIT NUMBER 1822 IN Loan Agreement (Madras Water Supply and Sanitation Project) between INDIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated 4e, ,4,/ c-1 198y LOAN NUMBER 2846 IN CREDIT NUMBER 1822 IN LOAN AGREEMENT AGREEMENT, dated LocQU>& -/ cU , 198, between INDIA, acting by its President (the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank). WHEREAS (A) the Borrower, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to the Development Credit Agreement between the Borrower and the International Development Association (the Association) of even date herewith (the Development Credit Agreement), has requested the Bank to assist in the financing of the Project; (B) the Borrower has also requested the Association to provide additional financial assistance towards the financing of the Project, and by the Development Credit Agreement the Association is agreeing to provide such assistance in an aggregate principal amount equivalent to twelve million five hundred thousand Special Drawing Rights (SDR 12,500,000); (C) the Borrower and the Bank intend, to the extent practicable, that the proceeds of the credit provided for in the Development Credit Agreement be disbursed on account of expen- ditures in respect of the Project before disbursements of the proceeds of the Loan provided for in this Agreement are made; (D) by an agreement of even date herewith among the Association, the Bank and the Madras Metropolitan Water Supply and Sanitation Board (hereinafter called MMWSSB), MMWSSB has agreed to undertake certain obligations in respect of the carrying out of the Project; (E) by an agreement of even date herewith among the Association, the Bank and the State of Tamil Nadu, acting by its Governor (hereinafter called Tamil Nadu), Tamil Nadu has agreed, inter alia, to assist MMWSSB in the carrying out of the Project; and WHEREAS the Bank has agreed, on the basis, inter alia, of the foregoing, to extend the Loan to the Borrower upon the terms and conditions set forth in this Agreement, in the Project Agreement of even date herewith among the Association, the Bank and MXWSSB and in the Tamil Nadu Agreement of even date herewith among the Association, the Bank and Tamil Nadu; NOW THEREFORE the parties hereto hereby agree as follows: - 2 - ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Loan and Guarantee Agreements" of the Bank, dated January 1, 1985, with the modifications set forth below (the General Conditions) constitute an integral part of this Agreement: (a) paragraph 11 of Section 2.01 is deleted and the following is substituted therefor: "11. the term "Project" means the Project described in Schedule 2 to the Development Credit Agreement (Madras Water Supply and Sewerage Project) between the Borrower and the Association of even date with the Loan Agreement and as the description thereof may be amended from time to time by agreement among the Borrower, the Bank and the Association." (b) the last sentence of Section 3.02 is deleted. Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions, and in the Preamble to this Agreement, and in paragraphs (a) through (j) of Section 1.02 of the Development Credit Agreement (as hereinafter defined) have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Development Credit Agreement" means the agreement of even date herewith between the Borrower and the Association for the Project, as such agreement may be amended from time to time, and such term includes the "General Conditions Applicable to Dev- elopment Credit Agreements" of the Association, dated January 1, 1985, as applied to such agreement, and all schedules and agree- ments supplemental to the Development Credit Agreement; and (b) "Credit" means the credit provided for in the Development Credit Agreement. ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Loan Agreement, an amount in various currencies equivalent to fifty three million dollars ($53,000,000). -3- Section 2.02. (a) The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Sched- ule 1 to the Development Credit Agreement, as such Schedule may be amended from time to time by agreement among the Borrower, the Association, and the Bank, 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 Sched- ule 2 to the Development Credit Agreement and to be financed out of the proceeds of the Loan. (b) The Borrower shall, for the purposes of the Project, open and maintain in Dollars a special account in the Reserve Bank of India on terms and conditions satisfactory to the Bank. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 3 to the Development Credit Agreement. Section 2.03. The Closing Date shall be December 31, 1995 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. Section 2.04. The Borrower shall pay to the Bank a commit- ment 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. (a) The Borrower shall pay interest on the principal amount of the Loan withdrawn and outstanding from time to time at a rate per annum for each Interest Period equal to one-half of one percent per annum above the Cost of Qualified Borrowings for the last Semester ending prior to the commencement of such Interest Period. (b) As soon as practicable after the end of each Semester, the Bank shall notify the Borrower of the Cost of Qualified Borrowings for such Semester. (c) For purposes of this Section: (i) "Interest Period" means the six-month period commencing on each date specified in Section 2.06 of this Agreement, including the Interest Period in which this Agreement is signed. -4- (ii) "Cost of Qualified Borrowings" means the cost of the outstanding borrowings of the Bank drawn down after June 30, 1982, expressed as a percentage per annum, as reasonably determined by the Bank. (iii) "Semester" means the first six months or the second six months of a calendar year. Section 2.06. Interest and other charges shall be payable semiannually on February 15 and August 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in the Schedule to this Agreement. ARTICLE III Execution of the Project; Other Covenants Section 3.01. Articles III and IV of the Development Credit Agreement and Schedules 1, 2 and 3 thereto, as such Articles and Schedules may be amended from time to time, are hereby incorporated into this Agreement with the same force and effect as if they were fully set forth herein; provided, however, that for the purposes of this Agreement: (i) the reference to the Credit in said Articles shall be deemed to be a reference to the Loan; (ii) the reference to the Development Credit Agreement in said Articles shall be deemed to be a reference to this Agree- ment; (iii) the reference to the Sections of the General Conditions in Section 3.03 shall be deemed as reference to the following Sections of the General Conditions Applicable to the Loan and Guarantee Agreements of the Bank dated January 1, 1985: Sections 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09. Section 3.02. As long as any part of the Credit shall remain unwithdrawn or outstanding and unless the Borrower has been notified otherwise by the Bank, all information furnished by the Borrower to the Association pursuant to the provisions of the Development Credit Agreement shall be deemed to be furnished to both the Association and the Bank. Section 3.03. The Borrower shall make the proceeds of the Loan available to Tamil Nadu in accordance with the Borrower's standard procedures for development assistance to the States of India. - 5 - ARTICLE IV Remedies of the Bank Section 4.01. For the purposes of Section 6.02 of the General Conditions, the following additional event is specified pursuant to paragraph (k) thereof, namely, that any event speci- fied in Section 5.01 of the Development Credit Agreement shall occur. Section 4.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) the events specified in paragraphs (a) or (b) of Section 5.01 of the Development Credit Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower and Tamil Nadu or MMWSSB, as the case may be; and (b) the events specified in paragraphs (d), (e) or (f) of Section 5.01 of the Development Credit Agreement shall occur. ARTICLE V Effective Date; Termination Section 5.01. The following event is specified as an additional condition to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions, namely, that all conditions precedent to the effectiveness of the Development Credit Agreement have been fulfilled, except for the effectiveness of this Agreement. Section 5.02. The date 90 days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 5.03. If the Development Credit Agreement terminates prior to the termination of this Agreement, the provisions of the Development Credit Agreement referred to in this Agreement shall continue in full force and effect among the Borrower, the Association and the Bank. ARTICLE VI Representatives of the Borrower; Addresses Section 6.01. Any Secretary, Additional Secretary, Joint Secretary, Director, Deputy Secretary and Under Secretary of the - 6 - Department of Economic Affairs in the Ministry 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: The Secretary to the Government of India Ministry of Finance Department of Economic Affairs New Delhi India Cable address: Telex: ECOFAIRS 953-313546 New Delhi, India For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (wUI) -7- IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, 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. INDIA By t Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By ' , 1AX et Regional Vice President Asia - 8 - SCHEDULE Amortization Schedule Payment of Principal Date Payment Due (Expressed in dollars)* On each February 15 and August 15 beginning February 15, 1993 through February 15, 2007 1,765,000 On August 15, 2007 1,815,000 * The figures in this column represent dollar equivalents determined as of the respective dates of withdrawal. See General Conditions, Sections 3.04 and 4.03. -9- Premiums on Prepayment The following premiums are specified for the purposes of Section 3.04 (b) of the General Conditions: Time of Prepayment Premium The interest rate (ex- pressed as a percentage per annum) applicable to the balance outstanding on the Loan on the day of prepayment multiplied by: Not more than three years 0.15 before maturity More than three years but 0.30 not more than six years before maturity More than six years but 0.55 not more than 11 years before maturity More than 11 years but not 0.80 more than 16 years before maturity More than 16 years but not 0.90 more than 18 years before maturity More than 18 years before 1.00 maturity INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Bank for Reconstruction and Development and the International Development Association. FOR SECRETARY