Selanjutnya

LOAN NO. 458-ID

LOAN AGREEMENT
(P4K Phase III)

between the

REPUBLIC OF INDONESIA

and the

INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT

Dated 21 January 1998

LOAN AGREEMENT
AGREEMENT dated 22 January 1998 between THE REPUBLIC OF INDONESIA
(hereinafter called "the Borrower") and the INTERNATIONAL FUND FOR AGRICULTURAL
DEVELOPMENT (hereinafter called "the Fund").
WHEREAS:
(A)

the Borrower has requested a loan from the Fund for the purpose of financing the
project described in Schedule 1 to this Agreement (hereinafter called "the Project");

c

(B)
the Borrower intends to contract from the Asian Development Bank (hereinafter called
"AsDB"), through a loan (hereinafter called "the AsDB Loan") in an amount of seventy eight million
six hundred thousand dollars (USD 78 600 000) to assist in financing the Project (called by AsDB the
"Rural Income Generation Project") on terms and conditions set forth in an agreement (hereinafter
called "the AsDB Loan Agreement") to be entered into between the Borrower and AsDB;
(C)
the Loan is to be administered by the Cooperating Institution to be appointed by the
Fund in accordance with the provisions of this Agreement; and
(D)
the Fund has agreed, on the basis, inter alia, of the foregoing, to make a loan to the
Borrower upon the terms and conditions hereinafter set forth;
NOW THEREFORE, the Parties hereto hereby agree as follows:

ARTICLE I

General Conditions; Definitions;
Cooperating Institution
Section 1.01. The General Conditions Applicable to Loan and Guarantee Agreements of the
Fund, dated 19 September 1986 constitute an integral part of this Agreement (the said General
Conditions Applicable to Loan and Guarantee Agreements being hereinafter called "the General
Conditions").
Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the
several terms defined in the General Conditions, the Preamble to this Agreement and Section 1.02 of
the AsDB Loan Agreement shall have the respective meanings therein set forth.
Section 1.03. The Borrower and the Fund agree to appoint AsDB as the Cooperating
Institution, with the responsibilities set forth in Article V of the General Conditions, to administer the
Loan in accordance with the provisions of this Agreement.
Section 1.04. Except as specifically provided otherwise elsewhere in this Agreement or
requested by the Fund, the Borrower shall address all communications and furnish all documents and
information relating to this Agreement as set forth herein:

-2-

(a)

directly to the Cooperating Institution on all matters:
(i)

under Article IV of this Agreement, including Schedule 2 thereto; and

(ii)

under Articles VI and XI of the General Conditions, except for the Sections
mentioned in paragraph (b) of this Section;

(b)
to the Fund and the Cooperating Institution, simultaneously, on all matters relating to
Sections 6.01, 6.07, 6.08, 6.09, 6.10, 6.11, 6.12, 11.07, 11.11, 11.12, 11.13 and 11.18 of the
General Conditions; and
(c)

to the Fund on all other matters with a copy to the Cooperating Institution.

ARTICLE II
The Loan

Section 2.01. The Fund agrees to lend to the Borrower from its regular resources an amount
in various currencies equivalent to eighteen million two hundred and fifty thousand Special Drawing
Rights (SOR 18 250 000).

Section 2.02. The Borrower shall pay to the Fund interest on the principal amount of the
Loan withdrawn from the Loan Account and outstanding from time to time ·at a rate of one-half of the
reference interest rate. The reference interest rate shall be determined by the Fund annually and shall
be the basis for the computation of the interest on the Loan for the period commencing 1 January and
ending 31 December of each year. The Fund shall notify the Borrower, as soon as practicable, of the
interest rate to be charged in each year on the Loan.
Section 2.03. The interest on the Loan shall be payable semi-annually on 15 May and
15 November in each year in the currency referred to in Section 2.05 of this Agreement.
Section 2.04. The Borrower shall repay the principal amount of the Loan withdrawn from the
Loan Account in 29 equal semi-annual instalments of six hundred eighteen thousand three hundred
thirty four Special Drawing Rights (SOR 608 334), payable on each 15 May and 15 November,
commencing on 15 May 2003 and ending on 15 May 2017 and one final instalment of six hundred
eight thousand three hundred fourteen Special Drawing Rights (SOR 608 314) due on 15 November
2017 in the currency referred to in Section 2.05 of this Agreement.
Section 2.05. The currency of the United States of America is hereby specified for the
purposes of Section 4.03 of the General Conditions.

-3ARTICLE III
Use of Proceeds of the Loan;
Withdrawals from the Loan Account
Section 3.01. (a) The Borrower shall make available from the proceeds of the Loan the
necessary amounts, together with other funds available, to: (i) BRI under a Subsidiary Loan Agreement
acceptable to the Fund which terms for relending shall include an interest at the rate specified in
Section 2.02 plus 2 3 per annum, and a repayment period of twenty (20) years, including a grace
period of five (5) years.; and (ii) AAET, through budgetary allocations.
(b)
The Borrower shall cause the proceeds of the Loan to be applied to the financing of the
Project in accordance with the provisions of this Agreement.

c'

(c)
The Borrower shall bear the foreign exchange risk on the proceeds of the Loan relent
to BRI under the Subsidiary Loan Agreement.
The Borrower shall exercise its rights under the Subsidiary Loan Agreement in such a
(d)

manner as to protect the interests of the Borrower and the Fund and to accomplish the purposes of the
Loan, and notwithstanding anything to the contrary in the General Conditions, except as the Fund shall
otherwise agree, the Borrower shall not assign, amend, abrogate or waive the Subsidiary Loan
Agreement or any provision thereof.
Section 3.02. _The Borrower shall, for the purposes of the Project, open and maintain in the
Bank Indonesia or in a suitable bank, acceptable to the Fund, an imprest" fund account (the Special
Account) in US dollars, on terms and conditions satisfactory to the Fund. The Special Account shall be
established, managed, replenished and liquidated in accordance with AsDB's "Loan Disbursement
Handbook" dated June 1996, as amended from time to time, and detailed arrangements agreed upon
between the Borrower and AsDB. The initial amount to be deposited into the Special Account shall not
exceed the equivalent of USO 2 000 000.

ｾ＠
r

,

Section 3.03. The allocation of the proceeds of the Loan as provided in Section 6.08 of the
General Conditions shall be in accordance with the provisions of Schedule 2 to this Agreement.

ｾｉｊＡｪ＾Ｏﾷ＠

Section 3.04. Withdrawals from the Loan Account shall be made only on account of eligible
expenditures relating to goods and services for the Project.
Section 3.05. The Closing Date shall be 30 September 2005 or such other later date as the
Fund shall establish. The Fund shall promptly notify the Borrower of such date.

-4ARTICLEN
Execution of the Project
Section 4.01. Subject to paragraph (c) of this Section, notwithstanding anything to the
contrary in the Fund's General Conditions, for carrying out the Project:
(a)
the obligations of the Borrower set forth in Sections 4.01 through 4.10 of, paragraphs
9(b) and (c) of Schedule 3, and Schedules 4, 5 and 6, to the AsDB Loan Agreement are incorporated
herein mutatis mutandis as the Borrower's obligations to the Fund;.
(b)
the Borrower shall ensure that BRI fully observes the provisions of the Project
Agreement, in the manner of their being the obligations of BRI to the Fund; and
(c)
for the purposes of this Section, the following terms wherever they occur in

Sections 4.01 through 4.10 of the AsDB Loan Agreement shall be construed to refer to and wherever
necessary, modified as follows:
(i)

"the Bank": the Fund;

(ii)

"the Loan": the Fund's Loan; and

(iii)

"Loan Agreement": the Fund's Loan Agreement, except in Section 4.0l(b) of
.the AsDB Loan Agreement.

Section 4.02. The Borrower shall ensure the timely availability of counterpart funds and to
this effect shall make appropriate budgetary allocations for the carrying out of the Project.

I""""''
ｾﾷ＠

The internationally recruited consultants to be financed from the
Section 4.03. (a)
proceeds of the Loan shall be selected by AAET and engaged in accordance with the Management
Services Agreement (MSA) to be entered into between the Borrower and the United Nations Office for
Project Services (UNOPS) from such Member States of the Fund as shall have been specified by the
Fund as eligible sources of procurement. The MSA shall be satisfactory to the Fund and the
Cooperating Institution.
(b)
The services of local consultants to be financed from the proceeds of the Loan shall be
engaged in accordance with the relevant provisions of the AsDB Loan Agreement.
Section 4.04.

For the purposes of:

(a)
Section 11.0S(b) of the General Conditions, the financial records shall be prepared on
an annual basis, ending on 31 March of each year; and notwithstanding the period of two months
specified in such section, the Borrower shall furnish to the Fund detailed statements of the expenditures
of the proceeds of the Loan during such period, within six months after the end of each fiscal year.

Ｍｾﾷ

-5(b)
Section 11.lO(a) of the General Conditions, the fiscal year for the auditing of the
Project accounts shall be from 1 April to 31 March of each year; and
(c)
Section 11. lO(b) of the General Conditions: Notwithstanding the period of four months
mentioned in the Section, the Borrower shall furnish the certified copies of the Audit Report to the
Fund and the Cooperating Institution no later than nine months after the end of the fiscal year.
Section 4.05. The Borrower shall take all reasonable measures to ensure that the execution
and operation of the Project are carried out with due regard for environmental factors, Integrated Pest
Management (IPM) including the maintenance of appropriate agricultural pesticide control practices in
accordance with the United Nations "Consolidated List of Products Whose Consumption and/or Sale
Have Been Banned, Withdrawn, Severely Restricted or Not Approved by Goyernment".

ARTICLEV
Other Covenants
Section 5.01. (a) During the execution of the Project, the Borrower and the Fund shall
periodically review the interest rates to be applied to the credits to be made out of the proceeds of the

Loan. The Borrower, if necessary, shall take appropriate measures, consistent with the policies of the
Borrower and the Fund in order to harmonize the interest rates on credits with the Fund's policy on
relending rate.
(b)
In the hnplementation of paragraph (a) above, the Borrower-shall ensure that BRI shall
minimise its costs in executing Part B of the Project, as it affects its margin of the interest spread on
subloans to SHGs.

ARTICLE VI
Monitoring and Evaluation
Section 6.01. (a) The Borrower, in consultation with the Cooperating Institution, shall
establish arrangements satisfactory to the Fund and the Cooperating Institution for monitoring the
progress of the execution of the Project and for an ongoing evaluation of the effects of the Project and
the impact of its various components on the Project beneficiaries.
(b)
Except as the Fund shall otherwise agree, the Borrower shall submit its proposal
regarding arrangements and the terms of reference for monitoring and evaluation referred to in
paragraph (a) hereof to the Fund and the Cooperating Institution for their comments no later than six
months after the Effectiveness Date.
(c)
The Borrower shall finalise the monitoring and evaluation arrangements referred to in
this Section in accordance with the recommendations, if any, of the Fund on its proposal and shall
implement them in consultation with the Cooperating Institution.

-6-

Section 6.02. For Project completion evaluation. the Fund, either independently or in
collaboration with the Cooperating Institution, may appoint, in consultation with the Borrower.
consultants or an agency of its choice to evaluate, on the basis of relevant key indicators, the impact of
the completed portions of and the whole of the Project ori the beneficiaries of the Project.
Section 6.03. Except as the Fund shall otherwise agree, in carrying out its obligations under
this Article, the Borrower shall take into account the Fund's "Guiding Principles for the Design and
Use of Monitoring and Evaluation in Rural Development Projects and Programmes", as it may be
amended from time to time by the Fund.

C\
.

Section 6.04. The Borrower shall ensure that all necessary data and other relevant
information from the Project executing agencies and other entities concerned with the implementation
of the Project and maintenance and operation of the facilities completed thereunder are made available
promptly to the consultants/agency entrusted with the carrying out of any task under this Article.
Section 6.05. The Borrower shall facilitate such evaluations of the Project as the Fund may
carry out at any time· during the implementation of the Project and after its completion.

ARTICLE VII
Suspension; Cancellation;
Acceleration of Maturity
Section 7.01. The following are specified as additional events for the suspension of the right
of the Borrower to make withdrawals from the Loan Account for the purposes. of Section 9. 02(q) of the
General Conditions:
(a)
the AsDB Loan shall have become liable for suspension or cancellation or shall have
become repayable prior to its agreed maturity date; and
(b)
the Borrower or BRI shall have failed to perform any of its respective obligations
under the Subsidiary Loan Agreement.

Section 7 .02. The following are specified as additional events for acceleration of maturity for
the purposes of Section 9.08 (e) to the General Conditions:
(a)

AsDB shall have taken any action under Section 5.02 of the AsDB Loan Agreement;

(b)

any of the events specified under Section 7. 01 of this Agreement shall have taken

and

place.

-7ARTICLE VIII
Effectiveness; Termination
Section 8.01. A date ninety (90) days after the date of this Agreement is specified for the
effectiveness of this Agreement for the purposes of Section 10.04 of the General Conditions.
Section 8.02. Except as the Borrower and the Fund shall otherwise agree, the obligations of
the Borrower under Article VI of this Agreement shall cease and determine on the date on which this
Agreement shall terminate or on a date 10 years after the date of this Agreement, whichever shall be
earlier.

ARTICLE IX
Representatives; Addresses
Section 9.01. The Minister of Finance of the Borrower is designated as representative of the
Borrower for the purposes of Section 14.02 of the General Conditions.
Section 9.02.
General Conditions:

The following addresses are specified for the purposes of Section 14.01 of the

For the Borrower:
Ministry of Finance
Directorate General of Budget
P.O. Box 1139
Jakarta 10710, Indonesia
Cable Address:
MINISTRY FINANCE
JAKARTA
Telex Numbers:
DJMLN IA 45799
DEPKEU IA 44319

-8Facsimile Number:
(6221) 3812859
For the Fund:
International Fund for Agricultural Development
107 Via del Serafico
00142 Rome, Italy
Cable Address:
IFADROME
Telex Number:
620330 !FAD I
Facsimile Number:
(396) 504 3463

For the Cooperating Institution:

Asian Development Bank
P.O. Box 789
0980 Manila, Philippines
Cable Address:
ASIANBANK

MANILA
Telex Numbers:
29066ADBPH
42205 ADB PM (ITT)
63587 ADB PN (ETPI)
Facsimile Numbers:
(632) 636 2444
(632) 636 2401

-9IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto
duly authorised, have caused this Agreement to be signed in Rome, Italy, as of the day and year first
above written.

Authorised Representative

INTERNATIONAL FUND FOR
AGRICULTURAL DEVELOPMENT

President

- 10 -

SCHEDULE 1
Description of the Project
1.
The objective of the Project is to develop a sustainable and participatory system to help the
poor help themselves through the delivery of skills development training and microfinance support
services to enable about 800 000 poor families in the Project area to mobilize savings, access credit,
and improve their livelihood, and thereby achieve self-reliance above the poverty line. The Project is
part of the Borrower's strategy and programme for poverty eradication.

2.

The Project shall consist of the following Parts:

Part A: Self Help Group Development
Assistance in the formation and development of self help groups (SHGs) through the provision
of:
(i)

training for Project staff, field extension workers (FEWs) and SHGs;

(ii)

motorcycles, equipment and materials;

(iii)

publications and management handbooks; and

(iv)

incremental recurrent costs for operation and maintenance of vehicles and
·equipment, salaries and allowances.

Part B: Microfinance Services
Provision of a credit line for subloans to SHGs for the support of their microenterprise and
livelihood activities.
Part C: Building and Institutionalizing Management Capacity
Assistance to AAET for building and institutionalizing Project management capacity through:
(i)

training for AAET staff and FEWs, SHGs, local government officials and
community based organizations (CBOs);

(ii)

development and operation of a Management Information System (MIS),
Monitoring and Evaluation System, and Impact Assessment System;

(iii)

provision of utility vehicles, equipment and materials;

(iv)

provision of publications and management handbooks, and undertaking of
promotional activities;

- 11 -

(v)

Project evaluation; and

(vi)

provision of incremental recurrent costs for operation and maintenance of
vehicles and equipment, salaries and allowances.

The Project also includes the provision of consulting services.
3.

0

The Project is expected to be completed by 31March2005.

Ｍｾ

- 12 SCHEDULE2
Allocation and Withdrawal
of Loan Proceeds
1.
As provided in Section 6.08 of the General Conditions, the Table below sets forth the
categories of goods services and other items to be financed out of the proceeds of the Loan, allocation
of the amounts of the Loan to each category and the percentages of expenditures for items to be
financed in each category as such percentages may be amended from time to time by agreement
between the Borrower and the Fund.
Amount of the Loan
Allocated (Expressed
in SDR Eguivalent

Categoiy

0

% of
Expenditures
to be Financed

11070000

30%

400 000

12%

2 340 000

12%

1200 000

100%

270 000

12%

(a) Salaries and Allowances

600 000

12%

(b) Operation and Maintenance Costs

670 000

12%

I.

Credit Line

II.

Equipment and Materials

III.

Training and Studies

N.

Consultant Services:
(a) .Internationally Recruited
Consultants' Services (except for
the Project Management Adviser)
(b) Local Consultants'

Services
V.

VI.

Incremental Recurrent Costs:

Unallocated
Total

ｾ＠

1700000
18 250 000

2.
Except for eligible expenditures to be financed from the proceeds of the Loan allocated to
Category N, each application for withdrawal in respect of any other eligible expenditure shall be
apportioned between AsDB and the Fund's Loan in accordance with the percentages of financing
specified in the respective Loan Agreement.

Ｍｾﾷ＠

I
Working
for a world
without
hunger

Trabajondo
por un mundo
libero do
del hombre

Pour
un monde
libere
de la foim

21 January 1998
Mr Minister,
On the occasion of the signing of the Loan Agreement for the P4K Phase III Project, I would like
to inform you that the SDR 18.25 million loan (equivalent to approximately USD 24.9 million) \Yas
approved during the Sixty-Second Session of the Executive Board of IFAD with unanimous support and
without any additional comments.
Accept, Mr Minister. the assurances of my highest consideration.

ｾＭ
His Excellency
Marie Muhammad
Minister of Finance
Ministry of Finance
Jakarta
Indonesia
cc:

Mr. R.L. Espiritu
Manager
Agriculture and Rural Development Division
Asian Development Bank
Manila
Philippines
Mr. Bisrat Aklilu
Deputy Executive Director and
Director of Operations
UNO PS
New York, USA

/

/

J.

IFAD. INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT • FIDA FONDS INTERNATIONAL DE DEVELOPPEMENT AGRICOLE
FIDA

FONDO INTERNACIONAL DE DESARROLLO AGRiCOLA • ｾｬ｟Ｌ［Ｍ＠

::;

_

•

-

1 l ｾ｟ＬＮｌＭｬ＠

J_, • ·

a

11

IFAD

Via del Serafico.107•00142 Rome, ltaly•TeL +39-6-54591 •Fox+39-6-5043463-E-mail IFAD@IFAD.ORG•Tlx620330 IFAD·l•Cable IFAO ROME

Working
for a world
without
hunger

Pour
un monde
libere
de lo foim

Trobojando
por un mundo
libero do
del hombre

21 January 1998

Mr. Minister,
Re:

REPUBLIC OF INDONESIA: Loan No. 458-ID
(P4K - Phase IID

1.
I have the honour to inform you that six copies of the above referenced Loan Agreement were
signed on 21 January 1998 at IFAD in Rome. Signatories were:
(a)

For the Borrower:

His Excellency
Mr. Soendaroe Rachmad
Ambassador of the Republic of Indonesia to IFAD; and

(b)

For IFAD:

Fawzi H. Al-Sultan

2.
Section 8.01 of the Loan Agreement specifies a date ninety (90) days after the date of the
Loan Agreement as the date for the effectiveness of the Loan Agreement (i.e. 21April1998). Unless
this date is extended by mutual agreement between the Borrower and IF AD pursuant to Section 10. 04
of IFAD's General Conditions Applicable to Loan and Guarantee Agreements, dated
19 September 1986, the Loan Agreement should enter into force and effect on or before that date.
For the Loan Agreement to become effective, pursuant to paragraph (a) of Section 10.01 of
3.
the General Conditions, the Borrower is requested to furnish evidence to IFAD that:
the execution of the Loan Agreement on behalf of the Borrower has been duly authorised or
ratified by all necessary corporate and governmental action.

./ ..

His Excellency
Minister for Finance
Ministry of Finance
Directorate General of Budget
P.O. Box 1139
Jakarta 10710
Indonesia

IFAD

INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT • FIDA FONDS INTERNATIONAL DE DEVELOPPEMENT AGRICOLE

FIDA- FONDO INTERNACIONAL DE DESARROLLO AGRiCOLA •

ｾＱ｟ＬｲＮｊｉ＠

; _

·

- I I ｾ｟ＬＮｌｊｉ＠

J_,

1

•

,,

II - IFAD

Via del Serofico.107•00142 Rome. ltaly•Tel.+39-6·54591 •Fox+39·6·5043463•E-mail IFAD@IFAD.ORG•Tlx620330 IFAD-l•Cable IFAD ROME

.

-2-

4.

The evidence to be furnished by the Borrower should include:
(a)

any relevant laws enabling the Borrower to secure the loan from IFAD for the
Project;

(b)

any relevant decrees or orders issued by the concerned ministries or departments of
the Borrower; and

(c)

other supporting documentation which the Borrower niay consider as appropriate
evidence.

5.
As a part of the evidence to be furnished pursuant to paragraphs 3 and 4 above, in accordance
with the requirements of paragraph (a) of Section 10.02 of the General Conditions, the Borrower is
required to furnish to IFAD a legal opinion, satisfactory to IFAD, of a counsel acceptable to IFAD
showing that:
on behalf of the Borrower, the Loan Agreement has been duly authorised and ratified by, and
executed on behalf of the Borrower and is legally binding upon the Borrower in accordance
with its terms.
6.
The legal opinion referred to in paragraph 6 above should be fully supported by copies of
appropriate laws, decrees and orders. A legal opinion signed by the officer of the Borrower who
normally issues similar opinions for loans from other international financial institutions will be
acceptable to IFAD.

Accept, Mr. Minister, the assurances of my highest consideration.

/

Asia Division

"f'"
.

"

'

"

.

---------·.
Distr.
IFAD .

INTERNATIONAL
FUND FOR
AGRICULTURAL
DEVELOPMENT

GENERAL
IFAD/9/Rev.4
23 September 1986

11

ENGLISH
ORIGINAL: ENGLISH

Jl

GENERAL CONDITIONS APPLICABLE TO LOAR
ARD GUARARTEE AGIEEMENTS

These revised General Condition• Applicable to Loan and Guarantee
Agreement• were adopted by the Executive Board at its 'hrenty-Eighth
Session from ＱＶｾＹ＠
September 1986. They only apply to Loan and Guarantee
Agreements approved by the Board after 20 September 1986 Ci .e., t:o Loan•
numbered 194 (Re lar lleaourcea) • 002 (S cial Pro ramae for Sub-Saharan
African Countries); and BG-5 Belgian Survival Fund and onwards).

00251 Cl-34)

i
J

INTERNATIONAL FUND FOB. AGB.ICULTUlW.
ｄｅｖｌｏｐｾｎｔ＠

GENERAL CONDITIONS APPLICABLE TO
LOAN AND GUAIANTEE AGREEMENTS

Dated

19 September 1986

i

TABLE OF CONTENTS

Article Number
ARTICLE I

Section 1.01
Section 1.02
Section 1.03
ARTICLE 11
Section 2.01
Section 2.02
Section 2.03
ARTICLE 111

Section 3.01
Section 3.02
Section 3.03
Sect.ion 3.04
Sect.ion 3.05
ARTICLE IV
Section 4.01
Sect.ion 4.02
Section 4.03

Section 4.04
Section 4.05
Section 4.06
ARTICLE V
Section 5.01
Section 5.02
Section 5.03

Title
Purpose; Application
to Loan Agreements and
Guarantee Agreements ••••••••••••••••••
Purpoae •••••••••••••••••••••••••••••••

1
1
1

Application of General Conditions •••••
Inconsistency with Loan Agreements
and Guarantee Agreements ••••••••••••••

1

Definitions •••••••••••••••••••••••••••

1

Definition.a •••••••••••••••••••••••••••
Reference• ••••••••••••••••••••••••••••
Beading• ••••••••••••••••••••••••••••••

1
5
5

Loan and Grant Accounts;
Interest and Other Qlargea;
Repayment; Place of Payment •••••••••••

5

Loan and Grant Accounts •••••••••••••••
Interest and Other Qlargea ••••••••••••
Computation of Interest
and Other Qlargea •••••••••••••••••••••

5
5
5

Repayment •••••••••••••••••••••••••••••

S

Place of Payment ••••••••••••••••••••••

5

Currency Provisions •••••••••••••••••••

6

Denomination of the Loan ••••••••••••••
Currencies for Withdrawals ••••••••••••
Currencies in which Principal,
Interest and Other Qlargea are
Payable, and Calculation·of
Amount of Payaeat •••••••••••••••••••••
Purchase of Currencies ••••••••••••••••
Valuation of Currencies ••••••••••••••
Manaer of Payment •••••••••••••••••••••

6
6

6
6
7
7

.••...•.•.•

7

'!'he Cooperacin& lastitution

Responsibilities of the
Cooperating Institution •••••••••••••••
Cooperation and Information •••••••••••
Extent of the Cooperating
Institution's Responsibility ••••••••••

7
8
8

ii

Article Number
Section 5.04
Section 5.05

AltTICLE VI
Section 6.0l
Section 6.02
Section 6.03
Section 6.04
Section 6.05
Section 6.06
Section 6.07
Section 6.08
Section
Section
Section
Section

6.09
6.10
6.11
6.12

AltTICLE VII
Section
Section
Section
Section
Section

7.01
7.02
7.03
7.04
7.05

AltTICLE VIII
Section 8.01

AltTICLE IX
Section
Section
Section
Section

9.01
9.02
9.03
9.04

Title

Page

Loan Administration
and the Fund's Policies ••••••••••••••
Action by the Borrower, lhe Guarantor,
and the Project Executing Agency to
Enable the Cooperating Institution
to Carry out its Functions •••••••••••

9

Withdrawal of Loan
and Grant Proceeds •••••••••••••••••••

9

9

Withdrawal from the
Loan and Grant ACcounts ••••••••••••••
Special Coamaitments by the Fund ••••••
Application for Withdrawal
or for Special Collllitment ••••••••••••
Sufficiency of Applications
and Document• ••••••••••••••••••••••••
Supporting Evidence ••••••••••••••••••
Evidence of Authority
to Sisn Applications •••••••••••••••••
Payment by tbe Fund ••••••••••••••••••
Allocation of Loan
and Grant Proceeds •••••••••••••••••••
Die of Loan and Grant Proceedll •••••••
Reallocation •••••••••••••••••••••••••
Treatment of Taxe1 •••••••••••••••••••
Un.foreseen Project Expenditure• ••••••

10
10
10
11
11

Cooperation; Information •••••••••••••

11

Cooperation ••••••••••••••••••••••••••
leportin& ••••••••••••••••••••••••••••

11
11
12
12

9
9
9

10
10
10
10

Exchange of Viev1 ••••••••••••••••••••
ID.formation ••••••••••••••••••••••••••
Vi1it1 and Inspection
for Loan Purpo1e1 ••••••••••••••••••••

12

Exemption from taxation ••••••••••••••

12

Exemption from taxation ••••••••••••••

12

Suspen1ion; Cancellation;
Acceleration. of Maturity; Lien •••••••

13

Cancellation by the Borr°'!er •••••••••
Suspen1ion by the Fund •••••••••••••••
Cancellation by the Fund •••••••••••••
Amount• Subject to
Special Collllitaent •••••••••••••••••••

13
13
15
16

•

iii

Article Number
Section 9.05
Section 9.06
Section
Section
Section
Section

9.07
9.08
9.09
9.10

Page

Application of Cancellation ••••••••••
Effectiveness of Provisions
After Suspension or Cancellation •••••
Cancellation of Guarantee ﾷｾ＠
Acceleration of Maturity •••••••••••••
Lien in Favour of a Co-financier •••••
Information to the Cooperating
Institution and the Co-financier •••••

17

...........

17

Effectiveness; Termination

ARTICLE X

16
16
16
16

17

Conditions Precedent
to Effectiveness •••••••••••••••••••••
Legal Opinion or Certificates ••••••••
Effective Date •••••••••••••••••••••••
Termination for Failure
to Become Effective ••••••••••••••••••
Termination on Full Payment ••••••••••

19
19

lzecution of the Project •••••••••••••

19

11.09
11.10

Project Execution ••••••••••••••••••••
Availability of Additional Funds •••••
Procurement and Services •••••••••••••
Plans and Schedules •••••••••••••••••'
Coordination of Activities •••••••••••
Insurance ••••••••••••••••••••••••••••
Uae of Goode and Services ••••••••••••
Financial llecorda ••••••••••••••••••••
Statements of Expenditure ••••••••••••
Audit of Accounts ••••••••••••••••••••

11.11

laport• ••••••••••••••••••••••••••••••

19
20
20
20
20
20
20
20
21
21
22
22
22
22
22

Section 10.01
Section 10.02
Section 10.03
Section 10.04
Section 10.05

ARTICLE XI
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Sec ti on
Section
Section
Section
Section
Section

Title

11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08

11.12
11.13
11.14

11.15
11.16

Section 11.17
Section 11.18

ARTICLE XII
Section 12.01
Section 12.02
Section 12.03

Progress lleports •••••••••••••••••••••
Completion Report ••••••••••••••••••••
Maintenance ••••••••••••••••••••••••••
Land Acquisition •••••••••••••••••••••
Enforcement of the
Subsidiary Loan Agreement ••••••••••••
Enforcement of tbe
Project Agreement ••••••••••••••••••••
Project Personnel ••••••••••••••••••••

17
18

19

23

23
23

Guarantee Provisions •••••••••••••••••

23

Applicability ﾷｾ＠
Guarantor as Primary Obligor •••••••••
Availability of Additional Funds ••••••

23
23
23

- iv Article Number
Section 12.04
Section 12.0S
Section 12.06

ARTICLE XIII
Section
Section
Section
Section

13.0l
13.02
13.03
13.04

ARTICLE XIV
Section
Section
Section
Section
Section

14.01
14.02
14.03
14.04
14.0S

Title

Page

Reports ••••••••••••••••••••••••••••••

23

Prevention of Action
Prejudicial to the Project ••••••••••
Action by the Guarantor •••••••••••••

24
24

Enforceability; Failure to
Exercise Rights; Arbitration

........

24

Enforceability ••••••••••••••••••••••
Obligations of the Guarantor • • • • • •.• •
Failure to Exercise Rights ••••••••••
Arbitration •••••••••••••••••••••••••

24
24
25
25

Miscellaneous Provisions ••••••••••••

27

lotice1 and 1leque1t1 ••••••••••••••••
Authority to Take Action ••••••••••••
Evidence of Authority •••••••••••••••
Change of Entity or Representative ••
Execution in Counterparts •••••••••••

27
27
27
28
21

GENERAL CONDITIONS APPLICABLE TO
LOAN AND GUARANTEE AGREEMENTS
Dated 19 September 1986

ARTICLE I
Purpose; Applicalion to Loan Agreement•
and Guarantee Agreements
Section 1.01. Purpose.
'these General Conditions set forth
certain terms and conditions generally applicable to loans and grants,
where relevant, made by the Fund.
Section 1.02. Application of General Conditions. To the extent
of and subject to such modifications as shall be provided in any loan
agreement and guarantee agreement, if any, these General Conditions shall
apply thereto and &ball govern the right• and obliaations thereunder of
the parties thereto with the same force and effect ae if they were fully
•et forth therein.
No revocation or amendment of these General
Conditions &ball be effective in respect of any eucb agreement unless the
parties thereto eball eo acree.
Section 1.03. Inconsistency with Loan Agreements and Guarantee
!greements. If any provision of a loan aareement or guarantee agreement,
if any, is inconsistent with a provision of these General Conditions, the
provision of that agreement shall aovern.

ARTICLE 11
Definitions
Section 2.01. Definitions.
(a) 'lbe following terms have the
following meanings wherever used 1n these General Conditione or in a loan
agreement, guarantee agreement or project agreement to which these
General Conditions have been made applicable:
1.

"Fund" : International Fund for Agricultural Development;

2.

"Member" : a Member of the Fund;

3.

"Loan Agreement" ; (a) the particular loan agreement to
which theee General Conditions apply, as aucb agreement
may be amended from time to time.
"Loan Agreement"
includes theee General Conditions as applied thereto, and
all schedules, annexes and agreements supplemental to the
Loan Agreement;

Ｍｾ

ｾＭ

--------

,.__

..
- 2

•

(b) as defined in sub-paragraph (a) above, the term
shall also, apply to any agreement that provides
financing by the Fund partially on a grant basis for a
project;
4.

"Borrower" : the party to the Loan Agreement which ia
the recipient of the Fund•a Loan;

5.

(a) "Loan" :
tbe loan provided for in the Loan
Agreement. Wherever appropriate and aa the context may
require, the term "Loan" aa set forth in the various
Sections of tbeae General Conditions shall be deemed to
include reference to any "Grant" made by the Fund;
(b) "Grant" :
Agreement;

6.

tbe

Crant

provided

for

in

the

Loan

(a) "Loan Account" :. tbe account opened or to be opened
by the Fund in ita books in the name of the Borrower to
which the amount of tbe Loan baa been or vill be
credited. Wherever appropriate and a1 the context may
require, the term ''Loan Account" aa set forth in tbe
various Section• of these General Conditions shall be
deemed to include reference to any· 11Grant Account" in
the Fund'• bookai
(b) "Grant Account" :. the account opened or to be
opened by tbe Fund in it• books in the name of tbe
Borrower to which the amount of tbe Crant baa been or
vill be creditedi

7.

"Guarantee Agreement" :. the agreement between a Member
and the Fund providing for tbe guarantee of tbe Loan, aa
aucb agreement . .Y be amended from time to time.
"Cuarantee Agreement" includes these General Conditions,
aa applied ｴｨ･ｲｯｾ＠
and all acbedulea, annexes and
agreement• supplemental to tbe Guarantee Agreement;

8.

"Guarantor" : the Member of the Fund tbat is a party to
tbe Cuarantee Agreement;

9.

"Project" or "Programme" : the project or progrmmae for
wh icb tbe Loan b made, as described in the Loan
Agreement and aa the description thereof may be amended
from time to time by agreement between the Fund and tbe
Borrower;

10.

"Project Executing Agency" :. the . entity or entities
responsible for the execution of the Project as
specified in the Loan Agreement;

- 3

11.

"Project Agreement" ; the Project. Agreement, if any,
between the Fund and the Project Executing Agency, as
such ｡ｧｲ･ｾｮｴ＠
may be amended from time to time.
"Project Agreement" includes all schedules, annexes and
agreements supplemental to the Project Agreement;

12.

"Subsidiary Loan Agreement" : the agreement or any other
arrangement, satisfactory to the Fund, between the
Borrower and the Project Executing Agency by which the
whole or part of the proceeds of the Loan and Grant, if
any, are made available to tbe Project Executing Agency
for the carrying out of the Project, as such agreement
may be amended from time to time with tbe consent of the
Fund;

13.

"Cooperating Institution" : the institution responsible
for the administration of the Loan on behalf of the Fund
for tbe purposes of the disbursement of tbe proceeds of
the Loan and tbe supervision of the implementation of
the Project;

14.

"Loan
Administration
Agreement" :
tbe
particular
agreement
or
any other arrangement whereby
the
Cooperating Institution is \tested by the Fund vitb the
authority to administer the Loan on its behalf, as such
acreement may be amended from time to time by the
Partiea;

15.

"Special Account" : an account opened and maintained by
the Borrower or the Project Executing Agency pursuant to
the Loan Agreement for the purposes of financing from
tbe proceeds of tbe Loan certain apecified items of
expenditure for tbe Project;

16.

"currency" of a State or a territory : tbe coin.Ca) or
currency(iea) vbich ia or are legal tender for the
payment of public and private debta in that State or
territory;

17.

"local currency" : the currency of the Member in whose
territory the Project is to be carried out;

18.

"foreign currency"
currency;

19.

"freely
convertible
currency" :
any
designated by the Fund at any given time;

20.

"dollars" or tbe aign "$" : dollars in the currency of
the United States of .America;

-·

i

any

currency

other

than
currency

local
80

..
- 4

21.

"local expenditure 11 :. expenditure incurred, or to be
incurred, ｾｮ＠
the currency of the Member in whose
territory the Project is to be carried out for goods
produced in, and services supplied from the territories
of such Member, excluding, however, expenditures on the
import content of such goods and services;

22.

"foreign expenditure" ; any expenditure other than local
expenditure;

23.

"external debt" ; any debt which is or may become
payable other than in the currency of the State which is
the Borrower or the Guarantor;

24.

"assets" include property, revenues and claims of any
kind;

2S.

"effective date" : the date on which the Loan Agreement
and the Guarantee Agreement, if any, shal 1 come into
force and effect as provided in Section 10.03;

26.

"lien" includes aortgagee, pledges, charges, privilege•
and priorities of any kind;

27.

"taxes" include imposts, levies, fees and duties of any
nature, whether in ef feet at the date of tbe Loan
Agreement or Guarantee Agreement, or thereafter imposed;

28.

"Closing Date" ;
the date specified in the Loan
Agreement as of which the fund may by notice to the
Borrower terminate tbe right of the Borrower to withdraw
from the Loan Account any a1DOU1lt theretofore unwitbdrawn;

29.

"Special Drawing tight•" or the abbreviation "SDll" :. the
Special Drawing &igbte u valued by the International
Monetary Puud in accordance with its Articles of
Agreement; and

30.

"incurring of debt" include•
the assumption and
guarantee of debt and any renewal, extension or
aodification of tbe terms of the debt or of the
assumption or guarantee thereof.

(b) The singular form of any of the definitions in this Section
shall be deemed to include the plural form, if the context of the Loan
Agreement, the Guarantee ａｧｲ･ｭｮｴｾ＠
if ｡ｮｹｾ＠
or the Project Agreement, if
any, 80 requires that the definition should be applicable in its plural
form.

- 5

Section 2.02. References• References in the General Conditions
to Articles or Sections ｾｲ･＠
deemed to be references to Articles or
Sections of these General Conditions.
Section 2.03. Headings.
'l'be headings of the Articles and
Sections and in the Table of Contents of these General Conditions are
given for the convenience of reference only and do not form an integral
part of these General Conditions.
ARTICLE Ill
Loan and Grant Accounts; Interest and Other Cbaraes;·
Repayment; Place of Payment
Section 3.01. Loan and ·Grant Accounts. 'l'be amount of tbe Loan
and Grant, if any, shall be cred1ted to tbe Loan and Grant Accounts,
respectively, and may be withdrawn by the Borrower as provided in the
Loan Agreement and these General ｃｯｮ､ｩｴｳｾ＠
Section 3.02. Iutere-st and Other Charges. 'l'be Borrower shall
pay the interest, if any, and other charges, if any, at the rate
apecif ied in the Loan Agreement on tbe amount of tbe Loan withdrawn from
the Loan Account and outstanding from ti'M to time. Interest and other
charges shall accrue from the respective date• on which amount• shall be
withdrawn from the Loan Account. ·
Section 3.03. Computation·· ·of Interest and Other Charges.
Interest and other charges shall be computed on the basil of a 360-day
year of twelve 30-ctay aontha.
Section 3.04. llepayaent;,
(a) Tbe Borrower shall repay the
principal amount of the Loan withdrawn from tbe Loan Account in
accordance with such inatall'Mllts or amortisation schedule as uy be
provided in the Loan ａｧｲ･ｭｮｴｾ＠
(b) 'l'be Borrower shall have the right, upon payment of all
accrued interest end other ｣ｨ｡ｲｧ･ｳｾ＠
and upon tbe expiry of a period of 45
daya 1 notice given by the Borrower to tbe Fund (Which period of notice
uy be waived or reduced by the ｐｵｮｾＩＬ＠
to repay, as of a date acceptable
to the hnd, in advance of maturity; (i) all of the principal amount of
tbe Loan then outstanding, or (ii) all of the principal amount of any one
or more .maturities, provided. tbat on the date of such prepayment there
shall not be outstanding any portion of the Loan uturing after the
portion to be prepaid.
Section 3.05. Place of Paym:nt·• Tbe principal of, and interest
and other charges on, the Loan shall be paid at sucb places as the Fund
shall reasonably request.

- 6

ARTICLE IV
'

Currency Provisions
Section 4.01. Denominari·on ·of the Loan.
shall be expressed in Special Drawing Rights.

'1'be amount of the Loan

Section 4.02. Currenci:e-s · for Withdrawals.
(a) Except as the
Borrower and the Fund shall otherwise agree, withdrawals from the Loan
Account shall be made in the respective currencies in which the
expenditures to be financed out of the proceeds of the Loan have been
paid or are payable, or in such ｣ｵｲｾ･ｮｹ＠
or currencies as the Fund uy
from time to time select; provided, however, that for procurement of
goods and services from the territories of a category Ill Member,
withdrawals in respect of expenditures in the currency of sucb lleaber
paid to the Fund as its contribution shall be with tbe consent of tbe
Member concerned.
(b) '1'be Loan Account shall be charged with the SDB. equi•alent
of the amount withdrawn on tbe basis of the SDI rates determined oa tbe
date of withdrawal.
lf the currency of withdrawal shall ba·we been
purchased by the Fund with ｡ｮｯｴｨ･ｾ＠
currency, tbe amount charged to tbe
Loan Account •hall be the SDI equivalent of aucb other currency as vas
uaed to effect the purchaae of the currency of withdrawal.
Section 4.03. Currencies in· which Princi al Interest and Other
Charges are Payable, and calculation of Amount of Payment.
a
'1'be
Borrower shall repay the principal and pay tbe interest and other charges
due under the Loan in the currency specified "in tbe Loan .Agreement in an
amount equivalent to the SDI amount determined on the due date. For tbe
purpose of this Section, unleas tbe Fund and tbe Borrower shall otherwise
agree, tbe currency apecified in tbe Loan .Agreement shall reuin the sole
currency for loan service ｰ｡ｹｭ･ｮｴｾ＠
(b) ln the event that the nature or composition of the SDR
changes to an extent which makes its coni;inued uae aa a loan medium
inappropriate, the Fund shall, after consultation with tbe Internai;ional
Monetary Fund, convert all amount& expreHed in SDI into aucb other
currency or unit of account as may be deemed appropriate.
Section 4.04. Purchase· vf ·Currencies. 'l'be Fund •hall, at the
request of the Borrower and on such terms and conditions a• tbe Fund
｡｢ｬｾ＠
determine, uae ita best effort• to purchase any currency needed by
the Borrower for repayment of the principal and payment of interest and
other charges required: under tbe Loan .Agreement upon payment by the
Borrower of sufficient 'funds therefor in a currency or currencies to be
specified by tbe Fund /from time to time. In purcnasing the currencies
required, the Fund ﾷｾｬ＠
act as the agent of the. Borrower and the
Borrower aball be ､･ｭｾ＠
to have made any payment required under the Loan
.Agreement only when and to the extent that the Fund bas received such
payment in the currency or currencies required.

•

- 7

Section 4.05. Valuation of Currencies. Whenever it shall be
necessary for the purposes of the Loan Agreement or the Guarantee
Agreement, if any, to determine the value of one currency in terms of
another or the SDR, the value of any currency in terms of another shall
be as reasonably determined by the Fund and the value of a currency in
the SDR. shall be calculated in accordance with Article 5,.2(b) of the
Agreement Establishing the Fund.
Section 4.06. Manner of Payment.
(a) Any payment required
under the Loan Agreement or the Guarantee Agreement, if any, to be made
to the Fund in the currency of any State shall be made in such manner,
and in the currency acquired in such manner, as shall be permitted under
the laws of such State for the purpose of making such payment and
effecting tbe deposit of such currency to ｾｨ･＠
account of the Fund with a
depository of the Fund in such State.
(b) Where either the Borrower or tbe Guarantor, if any, i1 a
Member, auch Member shall ensure tbat the principal of, and intere1t aDd
other charges on, the Loan are paid without reatrictions of any kind
imposed by, or in the territory of, such Member.
Al.tlCU: V
'!he Cooperating Institution
Section 5.01. lleeponeibilitiee of the Cooperating Institution.
(a) to administer the Loan, the Fund eball appoint a suitable and
competent institution acceptable to the Borrower and the Guarantor, if
any. If for any reason, a cbanae of the Cooperatina Institution becomes
necessary, such a change shall be made by aareement between the Borrower
and the Fund in consultation with tbe Cooperatina Institution
administering the Loan.
(b) Subject to Sections S.03 and S.04 herein, the Cooperating
Institution shall be responsible for;
(i)

such review and approval ae tbe Cooperating
Institution shall consider · necessary for
the
procurement of good• and eervicee under the Loan;

(ii)

such periodic inspection of the Project as shall be
considered necessary by the Cooperating Institution
or the Fund;

(iii) issuing sucb instructions/directions to the Borrower
and the Project Executina Agency as the Cooperating
Institution, on its own or upon request by the Fund,
shall consider necessary for the efficient and
proper implementation and initial operation of the
Project;

- 8

(iv)

processing the Borrower's applications for the
disbursement of the proceeds of the Loan and Grant,
if any, to determine tbe amounts which the Borrower
is entitled