idbi project agreement - world bank · the industrial development bank of india act, no. 18 of...
TRANSCRIPT
CONFORMED COPY
CREDIT NUMBER. 598 IN
IDBI Project Agreement(Fertilizer Industry Project)
BETWEEN
INTERNATIONAL DEVELOPMENT ASSOCIATION
AND
INDUSTRIAL DEVELOPMENT BANK OF INDIA
DATED DECEMBER 31, 1975
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PROJECT AGREEMENT
AGREEMENT, dated December 31, 1975, between INTERNATIONALDEVELOPMENT ASSOCIATION (hereinafter called the Association) and
INDUSTRIAL DEVELOPMENT BANK OF INDIA (hereinafter called IDBI).
WHEREAS by the Development Credit Agreement of even date herewith
between India, acting by its President (hereinafter called the Borrower) and the
Association, the Association has agreed to make available to the Borrower an
amount in various currencies equivalent to one hundred five million dollars
($105,000,000), on the terms and conditions set forth in the Development Credit
Agreement, but only on condition that IDBI agree to undertake such obligations
toward the Association as hereinafter set forth;
WHEREAS by a subsidiary loan a-r. ment to be entered into between the
Borrower and IDBI, part of the proceeds of the credit provided for under the
Development Credit Agreement will be made available to IDBI on the terms and
conditions therein set forth; and
WHEREAS IDBI, in consideration of the Association's entering into the
Development Credit Agreement with the Borrower, has agreed to undertake the
obligations hereinafter set forth;
NOW THEREFORE the parties hereto hereby agree as follows:
ARTICLE I
Definitions
Section 1.01. Wherever used in this Agreement, unless the context shall
otherwise require, the several terms defined in the Development Credit Agreement
and in the General Conditions (as so defined) have the respective meanings therein
set forth.
ARTICLE II
Execution of the Project
Section 2.01. 1DBI shall cause to be carried out Part B of the Project
described in Schedule 2 to the Development Credit Agreement and conduct its
operations and affairs with due diligence and efficiency and in accordance with
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sound administrative, economic, financial and investment standards and practices,with qualified and experienced management and personnel and in accordance withthe Industrial Development Bank of India Act, No. 18 of 1964.
Section 2.02. In order to cause Part B of the Project to be carried out,IDBI shall relend to GSFC, SPIC, HPCL and Zuari, respectively, funds equivalentto the amount allocated to each said Beneficiary in Schedule 1 to the DevelopmentCredit Agreement and made available by the Borrower to IDBI out of the proceedsof the Credit, on terms and conditions satisfactory to the Association. These termsand conditions shall not, with respect to repayment, interest including specialcharges, if any, and commitment fee, be more favorable to any of the saidBeneficiaries than the following:
(a) the loans shall be repaid within 15 years, including not more than4 years of grace;
(b) interest, including special charges, if any, shall be paid on theoutstanding balance from time to time at a rate not less than ten and one-quarterper cent (10-1/4%) per annum; and
(c) a commitment fee of not more than one per cent (1%) per annumshall be paid on the principal amount of the loans not withdrawn from time totime.
Section 2.03. IDBI shall obtain from GSFC, SPIC, HPCL and Zuari,respectively, an undertaking, acceptable to the Association:
(a) to carry out their respective parts of the Project with due diligenceand efficiency and in conformity with sound engineering, financial andadministrative practices;
(b) to employ, if required, engineering consultants whose qualifications,experience and terms and conditions of employment shall be satisfactory to theAssociation;
(c) to procure equipment, spares and materials to be financed out of theproceeds of the Credit made available to them by IDBI in accordance with Schedule3 to the Development Credit Agreement, and to use such goods exclusively inthe carrying out of their respective parts of the Project;
(d) to take all necessary action to procure any equipment or material inaccordance with procedures satisfactory to the Borrower and the Association ifat any time it is determined pursuant to Section 3.04(c) of the Development Credit
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Agreement that any such equipment or material cannot be delivered on or priorto its scheduled delivery date and that such delay would adversely affect thecompletion of their respective parts of the Project;
(e) to furnish to the Association promptly upon their preparation, theplans, specifications, reports, contract documents and construction and procurementschedules for their respective parts of the Project and any material modificationssubsequently made therein, in such detail as the Association shall from time totime request;
(f) to maintain records adequate to identify the goods and servicesacquired out of the proceeds of the Credit made available to them by IDBI, todisclose the use thereof in their respective parts of the Project, to record the progressof their respective parts of the Project (including the cost thereof) and to reflectin accordance with consistently maintained sound accounting practices theiroperations and financial condition;
(g) to allow the Association's representatives to inspect their respectiveparts of the Project and the goods financed out of the proceeds of the Credit,and to examine all plants, installations, sites, works, buildings, property andequipment included in the Project, the operation thereof and any relevant recordsand documents;
(h) to insure with responsible insurers, or make adequate provision forthe insurance of, the imported goods to be financed out of the proceeds of theCredit made available to them by IDBI, against hazards incident to the acquisition,transportation and delivery thereof to the place of use or installation, and forsuch insurance, any indemnity shall be payable in a currency freely usable to replaceor repair such goods;
(i) to take out and maintain with responsible insurers, or make otherprovisions satisfactory to the Association for, insurance against such risks and insuch amounts as shall be consistent with appropriate practice;
() to inform the Borrower, IDBI and the Association promptly of anycondition which interferes with, or threatens to interfere with, the accomplishmentof the purposes of the Credit, the carrying out of their respective parts of theProject;
(k) to give all such information as the Association shall reasonably requestrelating to their financial condition, operation and administration;
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(1) to furnish to the Association all such information as the Associationshall reasonably request concerning their respective parts of the Project, theexpenditure of the proceeds of the Credit made available to them and the goodsand services financed out of such proceeds; and
(in) to (A) have their accounts and financial statements (balance sheets,statements of income and expenses and related statements) for each fiscal yearaudited, in accordance with sound auditing principles consistently applied, byindependent auditors acceptable to the Association; (B) furnish to the Associationas soon as available, but, in any case not later than six months after the endof each such year, (i) certified copies of the financial statements for such yearas so audited and (ii) report of such audit by said auditors, of such scope andin such detail as the Association shall have reasonably requested; and (C) furnishto the Association such other information concerning the foregoing accounts andfinancial statements as the Association shall from time to time reasonably request.
Section 2.04. IDBI shall duly perform all its obligations under the IDBISubsidiary Loan Agreement. Except as the Association shall otherwise agree, IDBIshall not take or concur in any action which would have the effect of amending,abrogating, assigning or waiving the IDBI Subsidiary Loan Agreement or anyprovision thereof.
Section 2.05. (a) IDBI shall, at the request of the Association, exchangeviews with the Association with regard to the progress of Part B of the Project,the performance of its obligations under this Agreement and under the IDBISubsidiary Loan Agreement, and other matters relating to the purposes of theCredit.
(b) IDBI shall promptly inform the Association of any condition whichinterferes or threatens to interfere with, the progress of the Project, theaccomplishment of the purposes of the Credit, or the performance by IDBI ofits obligations under this Agreement and under the IDBI Subsidiary LoanAgreement.
Section 2.06. IDBI shall not make any repayment in advance of maturityin respect of any outstanding debt of IDBI which, in the judgement of theAssociation, would materially affect IDBI's ability to meet its financial obligations.
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ARTICLE I
Financial Covenants
Section 3.01. IDBI shall maintain records adequate to reflect in accordancewith consistently maintained appropriate accounting practices its operations andfinancial condition.
Section 3.02. IDBI shall: (i) have its accounts and financial statements(balance sheets, statements of income and expenses and related statements) foreach fiscal year audited, in accordance with sound auditing principles consistentlyapplied, by independent auditors acceptable to the Association; (ii) furnish to theAssociation as soon as available, but in any case not later than five months afterthe end of each such year, (A) certified copies of its financial statements for suchyear as so audited and (B) the report of such audit by said auditors, of suchscope and in such detail as the Association shall have reasonably requested; and(iii) furnish to the Association such other information concerning the accountsand financial statements of IDBI and the audit thereof as the Association shallfrom time to time reasonably request.
ARTICLE IV
Effective Date; Termination;Cancellation and Suspension
Section 4.01. This Agreement shall come into force and effect on the dateupon which the Development Credit Agreement becomes effective.
Section 4.02. (a) This Agreement and all obligations of the Association andof IDBI thereunder shall terminate on the earlier of the following two dates:
(i) the date on which the Development Credit Agreement shallterminate in accordance with its terms; or
(ii) a date 16 years after the date of this Agreement.
(b) If the Development Credit Agreement terminates in accordance withits terms before the date specified in paragraph (a)(ii) of this Section, theAssociation shall promptly notify IDBI of this event.
Section 4.03. All the provisions of this Agreement shall continue in full forceand effect notwithstanding any cancellation or suspension under the DevelopmentCredit Agreement.
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ARTICLE V
Miscellaneous Provisions
Section 5.01. Any notice or request required or permitted to be given ormade under this Agreement and any agreement between the parties contemplatedby this Agreement shall be in writing. Such notice or request shall be deemedto have been duly given or made when it shall be delivered by hand or by mail,telegram, cable, telex or radiogram to the party to which it is required or permittedto be given or made at such party's address hereinafter specified or at such otheraddress as such party shall have designated by notice to the party giving suchnotice or making such request. The addresses so specified are:
For the Association:
International Development Association1818 H Street, N.W.Washington, D.C. 20433United States of America
Cable address:
INDEVASWashington, D.C.
For IDBI:
Industrial Development Bank of IndiaNew India Centre17 CooperageBombay 400039, India
Cable address: Telex:
INDBANKIND 022-2193 BombayBombay
Section 5.02. Any action required or permitted to be taken, and anydocuments required or permitted to be executed, under this Agreement on behalfof IDBI may be taken or executed by its General Manager or such other personor persons as IDBI shall designate in writing.
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Section 5.03. IDBI shall furnish to the Association sufficient evidence ofthe authority and the authenticated specimen signature of the person or personswho will, on behalf of IDBI, take any action or execute any documents requiredor permitted to be taken or executed by IDBI pursuant to any of the provisionsof this Agreement.
Section 5.04. This Agreement may be executed in several counterparts, eachof which shall be an original, and all collectively but one instrument.
IN WITNESS WHEREOF, the parties hereto, acting through theirrepresentatives thereunto duly authorized, have caused this Agreement to be signedin their respective names in the District of Columbia, United States of America,as of the day and year first above written.
INTERNATIONAL DEVELOPMENT ASSOCIATION
By /s / Ernest SternRegional Vice President
South Asia
INDUSTRIAL DEVELOPMENT BANK OF INDIA
By /s / G. V. RamakrishnaAuthorized Representative
CONFORMED COPY
CREDIT NUMBER 598 IN
FCI Project Agreement(Fertilizer Industry Project)
BETWEEN
INTERNATIONAL DEVELOPMENT ASSOCIATION
AND
FERTILIZER CORPORATION OF INDIA
DATED DECEMBER 31, 1975
PROJECT AGREEMENT
AGREEMENT, dated December 31, 1975, between INTERNATIONALDEVELOPMENT ASSOCIATION (hereinafter called the Association) andFERTILIZER CORPORATION OF INDIA (hereinafter called FCI).
WHEREAS by the Development Credit Agreement of even date herewithbetween India, acting by its President (hereinafter called the Borrower) and theAssociation, the Association has agreed to make available to the Borrower anamount in various currencies equivalent to one hundred five million dollars($105,000,000), on the terms and conditions set forth in the Development CreditAgreement, but only on condition that FCI agree to undertake such obligationstoward the Association as hereinafter set forth;
WHEREAS by a subsidiary loan agreement to be entered into between theBorrower and FCI, part of the proceeds of the credit provided for under theDevelopment Credit Agreement will be made available to FCI on the terms andconditions therein set forth; and
WHEREAS FCI, in consideration of the Association's entering into theDevelopment Credit Agreement with the Borrower, has agreed to undertake theobligations hereinafter set forth;
NOW THEREFORE the parties hereto hereby agree as follows:
ARTICLE I
Definitions
Section 1.01. Wherever used in this Agreement, unless the context shallotherwise require, the several terms defined in the Development Credit Agreementand in the General Conditions (as so defined) have the respective meanings thereinset forth.
ARTICLE II
Execution of the Project
Section 2.01. FCI shall carry out Part A of the Project described in Schedule2 to the Development Credit Agreement with due diligence and efficiency andin conformity with appropriate administrative, financial and engineering practices.
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Section 2.02. In order to assist FCI in execution of Part A of the Project,FCI may employ engineering consultants whose qualifications, experience and terms
and conditions of employment shall be satisfactory to the Association.
Section 2.03. (a) Except as the Association shall otherwise agree, the goods,works or services (other than consultants' services) for the Project to be financed
out of the proceeds of the Credit, shall be procured in accordance with the
provisions of Schedule 3 to the Development Credit Agreement.
(b) If at any time the Association or FCI determines, after consultation
with each other and the Borrower, that any equipment or material cannot be
delivered on or prior to its scheduled delivery date, and that such delay would
adversely affect completion of Part A of the Project, FCI shall promptly take all
necessary action to procure such equipment or material by such procedures as
shall be satisfactory to the Borrower and the Association.
Section 2.04. (a) FCI undertakes to insure, or make adequate provision for
the insurance of, the imported goods to be financed out of the proceeds of the
Credit relent to it by the Borrower against hazards incident to the acquisition,transportation and delivery thereof to the place of use or installation, and for
such insurance any indemnity shall be payable in a currency freely usable by FCI
to replace or repair such goods.
(b) Except as the Association may otherwise agree, FCl shall cause all
goods and services financed out of the proceeds of the Credit relent to it by the
Borrower to be used exclusively for the Project.
Section 2.05. (a) FCl shall furnish to the Association promptly upon their
preparation, the plans, specifications, reports, contract documents and construction
and procurement schedules for Part A of the Project, and any material modifications
thereof or additions thereto, in such detail as the Association shall reasonably
request.
(b) FCI: (i) shall maintain records adequate to record the progress of Part
A of the Project (including the cost thereof) and to identify the goods and services
financed out of the proceeds of the Credit relent to it by the Borrower, and to
disclose the use thereof in the Project; (ii) shall, without limitation upon the
provisions of paragraph (c) of this Section, enable the Association's representatives
to visit the facilities and construction sites included in Part A of the Project, and
to examine the goods financed out of such proceeds and any relevant records and
documents; and (iii) shall furnish to the Association all such information as the
Association shall reasonably request concerning Part A of the Project, the
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expenditure of the proceeds of the Credit so relent to it and the goods and servicesfinanced out of such proceeds.
(c) FCI shall enable the Association's representatives to examine all plants,installations, sites, works, buildings, property and equipment of FCL and anyrelevant records and documents.
Section 2.06. FCI shall duly perform all its obligations under the FCISubsidiary Loan Agreement. Except as the Association shall otherwise agree, FCIshall not take or concur in any action which would have the effect of amending,abrogating, assigning or waiving the FCI Subsidiary Loan Agreement or anyprovision thereof.
Section 2.07. (a) FCI shall, at the request of the Association, exchange viewswith the Association with regard to the progress of Part A of the Project, theperformance of its obligations under this Agreement and under the FCI SubsidiaryLoan Agreement, and other matters relating to the purposes of the Credit.
(b) FCt shall promptly inform the Association of any condition whichinterferes or threatens to interfere with the progress of Part A of the Project,the accomplishment of the purposes of the Credit, or the performance by FCIof its obligations under this Agreement and under the FCI Subsidiary LoanAgreement.
ARTICLE III
Management and Operations of FCI
Section 3.0 1. FCI shall take out and maintain with responsible insurers, ormake other provisions satisfactory to the Association for, insurance against suchrisks and in such amounts as shall be consistent with appropriate practice.
Section 3.02. FCI shall:
(a) at all times manage its affairs, maintain its financial position, plan itsfuture expansion and carry on its operations in accordance with appropriatebusiness, financial and engineering practices and under the supervision ofexperienced and competent management assisted by adequate and competent staff;and
(b) promptly staff with experienced and competent personnel any vacantposition related to the construction and operation of the facilities included in PartA of the Project.
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Section 3.03. Except as the Association shall otherwise agree, FCI shall:
(a) at all times take all steps N hich are necessary to maintain its existenceand its right to carry on operations and to acquire and retain ownership of alllands and to maintain and renew all interests in land and other properties andall rights, powers, privileges and franchises which are necessary or useful in thecarrying out of Part A of the Project or in the conduct of its business;
(b) at all times operate and maintain its plants, machinery, equipment andother property, and promptly make all necessary repairs and renewals thereof, inaccordance with appropriate engineering practices;
(c) not sell, lease, transfer or otherwise dispose of any of its propertyor assets which shall be required for the efficient operation of its business andundertaking; and
(d) not alter its corporate structure or amend its Memorandum or Articlesof Association in any way that will materially and adversely affect its ability toperform its obligations under this Agreement.
ARTICLE IV
Financial Covenants
Section 4.01. FCI shall maintain records adequate to reflect in accordancewith consistently maintained appropriate accounting practices its operations andfinancial condition.
Section 4.02. FCI shall: (i) have its accounts and financial statements (balancesheets, statements of income and expenses and related statements) for each fiscalyear audited, in accordance with sound auditing principles consistently applied,by independent auditors acceptable to the Association; (ii) furnish to theAssociation as soon as available, but in any case not later than four months afterthe end of each such year, (A) certified copies of its financial statements for suchyear as so audited and (B) the report of such audit by said auditors, of suchscope and in such detail as the Association shall have reasonably requested; and(iii) furnish to the Association such other information concerning the accountsand financial statements of FCI and the audit thereof as the Association shall fromtime to time reasonably request.
ARTICLE V
Effective Date; Termination;Cancellation and Suspension
Section 5.01. This Agreement shall come into force and effect on the dateupon which the Development Credit Agreement becomes effective.
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Section 5.02. (a) This Agreement and all obligations of the Association andof FCI thereunder shall terminate on the earlier of the following two dates:
(i) the date on which the Development Credit Agreement shallterminate in accordance with its terms; or
(ii) a date 1 6 years after the date of this Agreement.
(b) If the Development Credit Agreement terminates in accordance withits terms before the date specified in paragraph (a)(ii) of this Section, theAssociation shall promptly notify FCI of this event.
Section 5.03. All the provisions of this Agreement shall continue in full forceand effect notwithstanding any cancellation or suspension under the DevelopmentCredit Agreement.
ARTICLE VI
Miscellaneous Provisions
Section 6.01. Any notice or request required or permitted to be given ormade under this Agreement and any agreement between the parties contemplatedby this Agreement shall be in writing. Such notice or request shall be deemedto have been duly given or made when it shall be delivered by hand or by mail,telegram, cable, telex or radiogram to the party to which it is required or permittedto be given or made at such party's address hereinafter specified or at such otheraddress as such party shall have designated by notice to the party giving suchnotice or making such request. The addresses so specified are:
For the Association:
International Development Association1818 H Street, N.W.Washington, D.C. 20433United States of America
Cable address:
INDEVASWashington, D.C.
For FCI:
Fertilizer Corporation of IndiaF-43 South Extension Area Part IRing RoadNew Delhi-49, India
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Cable address:
FERTILIZERNew Delhi
Section 6.02. Any action required or permitted to be taken, and anydocume.nts required or permitted to be executed, under this Agreement on behalfof FCI may be taken or executed by its Managing Director or such other personor persons as FCI shall designate in writing.
Section 6.03. FCI shall furnish to the Association sufficient evidence of theauthority and the authenticated specimen signature of the person or persons whowill, on behalf of FCI, take any action or execute any documents required orpermitted to be taken or executed by FCI pursuant to any of the provisions ofthis Agreement.
Section 6.04. This Agreement may be executed in several counterparts, eachof which shall be an original, and all collectively but one instrument.
IN WITNESS WHEREOF, the parties hereto, acting through theirrepresentatives thereunto duly authorized, have caused this Agreement to be signedin their respective names in the District of Columbia, United States of America,as of the day and year first above written.
INTERNATIONAL DEVELOPMENT ASSOCIATION
By /s / Ernest SternRegional Vice President
South Asia
FERTILIZER CORPORATION OF INDIA
By /s / G. V. RamakrishnaAuthorized Representative