Loan Number 3757 RU
LOAN AGREEMENT
(AGRICULTURE REFORM IMPLEMENTATION SUPPORT PROJECT)
BETWEEN RUSSIAN FEDERATION AND INTERNATIONAL BANK
FOR RECONSTRUCTION AND DEVELOPMENT
(Washington, 22.VI.1994)
Agreement, dated June 22, 1994, between Russian Federation (the Borrower) and International Bank for Reconstruction and Development (the Bank).
Whereas the Borrower, having been satisfied as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, has requested the Bank to assist in the financing 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;
Now therefore the parties hereto hereby agree as follows:
Article I
General Conditions
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) The last sentence of Section 3.02 is deleted.
(b) In Section 6.02, sub-paragraph (k) is re-lettered as sub-paragraph (1) and a new sub-paragraph (k) is added to read:
"(k) An extraordinary situation shall have arisen under which any further withdrawals under the Loan would be inconsistent with the provisions of Article III, Section 3 of the Bank's Articles of Agreement."
Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth, and the following additional terms have the following meanings:
(a) "Agency Bank" means any commercial bank selected by the Borrower in accordance with, and for the purposes referred to in, Section 3.02 (a) (i) of this Agreement;
(b) "On-lending Procedures, Terms and Conditions" means the procedures, eligibility criteria, terms and conditions of Private Sub-projects referred to in Section 3.02 (a) (ii) of this Agreement;
(c) "Participating Region" means with respect to any Part of the Project which involves activities intended to be carried out in particular regions of the Borrower which are subjects of the Federation, or in particular administrative subdivisions thereof (rayons), a region which has formally consented, in the manner described in paragraph 5 of Part A of Schedule 5 to this Agreement, to participate in such Part or otherwise cooperate in carrying out such activities under the Project;
(d) "Private Enterprise" means any legal entity to which the Borrower proposes to make or has made a Sub-loan pursuant to sub-paragraph (a) (ii) of Section 3.02 of this Agreement;
(e) "Private Sub-project" means a specific development project under Parts A.2 or C.1 of the Project which is intended to be carried out by a Private Enterprise utilizing the proceeds of a Sub-loan;
(f) "Project Account" means the account referred to in Section 3.04 of this Agreement;
(g) "Public Investment Sub-project" means any development project, investment or other specifically defined activity under Parts A.1, A.3, B or C.2 of the Project which is intended to be carried out through a Public Project Entity utilizing a portion of the proceeds of the Loan;
(h) "Public Project Entity" means any of the departments, institutes, agencies or affiliates which may be designated pursuant to Section 3.01 (a) of this Agreement, which the Borrower intends to engage for the carrying out, as a Public Investment Sub-project, of any of the Parts of the Project referred to in such section;
(i) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement;
(j) "Sub-loan" means a loan made or proposed to be made by the Borrower out of the proceeds of the Loan to a Private Enterprise for a Private Sub-project;
(k) "Subsidiary Loan Agreement" means any agreement between the Borrower and a Private Enterprise, entered into pursuant to subparagraph (a) (ii) of Section 3.02 of this Agreement, concerning the financing of a Private Sub-project utilizing the proceeds of the Loan, as the same may be amended from time to time, and such term includes all schedules to such Subsidiary Loan Agreement;
(l) "PCC" means the project coordinating committee referred to in paragraph A.4 of Schedule 5 of this Agreement;
(m) "PDU" means the project development unit referred to in Section 3.03 (a) of this Agreement;
(n) "MOAF" means the Borrower's Ministry of Agriculture and Food;
(o) "MOF" means the Borrower's Ministry of Finance;
(p) "ARSRIIMA" means the All-Russian Scientific Research Institute of Innovation and Marketing in Agriculture;
(q) "Gosseminspektsia" means the Federal Seed Inspection Service of the Borrower;
(r) "AKKOR" means the Association of Peasant Farms and Cooperatives of Russia;
(s) "Gossortkomissia" means the Seed Variety Registration Agency of the Borrower;
(t) "NSAC" means the National Seed Advisory Committee to be established under Part C.2 of the Project;
(u) "NSA" means the National Seed Association to be established under Part C.2 of the Project; and
(v) "Computer Center of MOAF" means the state enterprise "Glavnyi Vychislitelnyi Tsentr (GVTs) Minselkhozproda," organized and operated by MOAF under Resolution No. 142 of MOAF of November 1990.
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 this Agreement, various currencies that shall have an aggregate value equivalent to the amount of two hundred forty million dollars (USD 240,000,000), being the sum of withdrawals of the proceeds of the Loan, with each withdrawal valued by the Bank as of the date of such withdrawal.
Section 2.02. (a) The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement for: (i) expenditures made (or, if the Bank shall so agree, to be made) by a Private Enterprise under a Sub-loan to meet the reasonable cost of goods and services required for the Private Sub-project in respect of which the withdrawal from the Loan Account is requested; (ii) amounts paid (or, if the Bank shall so agree, to be paid) by the Borrower on account of expenditures made by a Public Project Entity to meet the reasonable cost of goods and services required for the Public Investment Sub-project in respect of which withdrawal from the Loan Account is requested; and (iii) expenditures made (or, if the Bank shall so agree, to be made) by the Borrower in respect of the reasonable cost of goods, works and services required for the Project 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 deposit account in a commercial bank under selection criteria, terms and conditions satisfactory to the Bank, including appropriate protection against set-off, seizure or attachment. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 6 to this Agreement.
Section 2.03. The Closing Date shall be June 30, 2000, 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 commitment charge at the rate of three-fourths of one percent (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 for each Interest Period equal to the Cost of Qualified Borrowings determined in respect of the preceding Semester, plus one-half of one percent (1/2 of 1%). On each of the dates specified in Section 2.06 of this Agreement, the Borrower shall pay interest accrued on the principal amount outstanding during the preceding Interest Period, calculated at the rate applicable during 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 determined in respect of such Semester.
(c) For the purposes of this Section:
(i) "Interest Period" means a six-month period ending on the date immediately preceding each date specified in Section 2.06 of this Agreement, beginning with the Interest Period in which this Agreement is signed.
(ii) "Cost of Qualified Borrowings" means the cost, as reasonably determined by the Bank and expressed as a percentage per annum, of the outstanding borrowings of the Bank drawn down after June 30, 1982, excluding such borrowings or portions thereof as the Bank has allocated to fund: (A) the Bank's investments; and (B) loans which may be made by the Bank after July 1, 1989 bearing interest rates determined otherwise than as provided in paragraph (a) of this Section.
(iii) "Semester" means the first six months or the second six months of a calendar year.
(d) On such date as the Bank may specify by no less than six months' notice to the Borrower, paragraphs (a), (b) and (c) (iii) of this Section shall be amended to read as follows:
"(a) The Borrower shall pay interest on the principal amount of the Loan withdrawn and outstanding from time to time, at a rate for each Quarter equal to the Cost of Qualified Borrowings determined in respect of the preceding Quarter, plus one-half of one percent (1/2 of 1%). On each of the dates specified in Section 2.06 of this Agreement, the Borrower shall pay interest accrued on the principal amount outstanding during the preceding Interest Period, calculated at the rates applicable during such Interest Period."
"(b) As soon as practicable after the end of each Quarter, the Bank shall notify the Borrower of the Cost of Qualified Borrowings determined in respect of such Quarter."
"(c) (iii) "Quarter" means a three-month period commencing on January 1, April 1, July 1 or October 1 in a calendar year."
Section 2.06. Interest and other charges shall be payable semi-annually on June 1 and December 1 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 Schedule 3 to this Agreement.
Article III
Execution of the Project
Section 3.01. (a) The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement, and, to this end, shall carry out Parts A.1, A.3, B and C.2 of the Project through MOAF, and with the assistance of the respective Public Project Entities set forth in the Annex to Schedule 5 to this Agreement and other designated Public Project Entities, with due diligence and efficiency and in conformity with appropriate administrative, financial, agricultural, engineering, accounting, information technology and environmental standards and practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project.
(b) For the purpose of carrying out Parts A.1, A.3, B and C.2 of the Project, the Borrower shall make available to each of the designated Public Project Entities responsible for carrying out a Public Investment Sub-project under any of such Parts of the Project, the funds, facilities, services and other resources required for such Public Investment Sub-project, including the corresponding portions of the proceeds of the Loan, under contractual or other arrangements satisfactory to the Bank.
(c) Without limitation or restriction upon the provisions of paragraphs (a) and (b) of this Section, and except as the Bank and the Borrower shall otherwise agree, the Borrower shall carry out the Project in accordance with the Implementation Program set forth in Schedule 5 to this Agreement.
Section 3.02. (a) For the purpose of carrying out Parts A.2 and C.1 of the Project, the Borrower shall:
(i) select, in accordance with criteria satisfactory to the Bank, one or more commercial banks (the Agency Banks) capable of administering the Sub-loans;
(ii) make available to each Private Enterprise, out of the proceeds of the Loan allocated from to time to Category (1) of the table set forth in paragraph 1 of Schedule 1 to this Agreement, the amount of financing required for its respective Private Sub-project under a subsidiary loan agreement (the Subsidiary Loan Agreement) to be entered into between the Borrower and the Private Enterprise (together with any agreement with the Agency Bank, providing for the administration of such Sub-loan), under terms and conditions satisfactory to the Bank, which shall include, without limitation, the terms and conditions set forth in Part C of Schedule 7 to this Agreement; and
(iii) cause the Private Enterprises to perform in accordance with the provisions of the respective Subsidiary Loan Agreements, all the obligations set forth therein.
(b) The Borrower undertakes that, unless the Bank shall otherwise agree, the Private Sub-projects will be selected and approved in accordance with the procedures and eligibility criteria set forth or referred to in Schedule 7 to this Agreement.
(c) The Borrower shall exercise its rights in relation to the Sub-loans in such manner as to: (i) protect the interests of the Bank and the Borrower; (ii) comply with its obligations under this Agreement; and (iii) achieve the purposes of the Project.
Section 3.03. In order to facilitate the efficient carrying out of the Project, the Borrower shall establish, or cause to be established, and thereafter maintain, with membership, staff and other resources, and under terms of reference satisfactory to the Bank:
(a) a project development unit (PDU) within MOAF responsible for, inter alia, various administrative functions relating to the day-to-day coordination and execution of the Project; and
(b) component implementation units (CIU) within each of MOAF's departments and agencies under its administrative jurisdiction responsible for carrying out Parts A, B, and C of the Project, respectively, and within the respective administration of each Participating Region under Parts A.2 and C.1 of the Project.
Section 3.04. Without limitation to the provisions of Section 3.01 of this Agreement, the Borrower shall for purposes of the Project:
(a) open and maintain in a commercial bank an account (the Project Account), in local currency, to be used for ensuring a secure source of financing for the expenditures required to be made by MOAF in conjunction with the implementation of the Project and the establishment