LOAN AGREEMENT
(RUSSIAN FEDERATION: KALININGRAD WATER
AND ENVIRONMENTAL SERVICES REHABILITATION PROJECT)
18,000,000 USD BETWEEN THE RUSSIAN FEDERATION
AND EUROPEAN BANK FOR RECONSTRUCTION
AND DEVELOPMENT
(4.VII.1999)
Agreement dated 4 July 1999 between
(1) the Russian Federation (the "Borrower"); and
(2) the European Bank for Reconstruction and Development (the
"Bank").
Preamble
(A) Whereas the Bank has been established to provide financing
for specific projects to foster the transition towards open market-
oriented economies and to promote private and entrepreneurial
initiative in the Central and Eastern European countries committed
to and applying the principles of multiparty democracy, pluralism
and market economics;
(B) Whereas the Borrower intends to implement the project
described in Schedule 1 to the Loan Agreement (the "Project"),
which is designed to assist the Borrower in (i) improving of the
quality of potable water supply; and (ii) rehabilitating and
improving of wastewater collection and treatment systems;
(C) Whereas the Project will be carried out by the Kaliningrad
Municipal Water and Waste Water Services Enterprise "Vodokanal"
(the "Project Entity"), with the Borrower's assistance and, as
part of such assistance, the Borrower will make available to the
Project Entity the proceeds of a loan as provided in the Loan
Agreement, and the City and the Region will guarantee the
obligations of the Project Entity to the Borrower under the
Subsidiary Loan Agreement;
(D) Whereas:
(i) the Borrower intends to contract from Nordic Investment
Bank ("NIB") a loan in an amount of thirteen million Dollars
(13,000,000 USD) to assist in financing the Project on the terms
and conditions set forth in an agreement to be entered into
between the Borrower and NIB (the "NIB Loan");
(ii) Kaliningrad Regional Administration (the "Region"), the
City of Kaliningrad (the "City") and/or the Project Entity shall
be responsible for all taxes, custom duties and other dues payable
to the Borrower or any political subsection thereof on the terms
and conditions set forth in a Subsidiary Loan Agreement to be
entered into between the Borrower, the Project Entity, the City
and the Region;
(iii) the Region and City will also provide co-financing of the
equivalent of five million Dollars (5,000,000 USD) as a non-
reimbursable contribution towards the Project costs;
(iv) 3,000,000 USD co-financing non-reimbursable funds will be
provided by the Danish Environmental Protection Agency to the
State Committee for Protection of Environment in the Kaliningrad
Region;
(v) 120,000,000 SEK co-financing non-reimbursable funds will be
provided by the Swedish International Development Cooperation
Agency to the Borrower; and
(vi) 1,700,000 USD co-financing non-reimbursable funds will be
provided by the Nordic Environment Finance Corporation to the
City.
(E) Whereas the Bank has agreed on the basis, inter alia, of
the foregoing, to extend a loan to the Borrower in the amount of
eighteen million Dollars (18,000,000 USD) (the "Loan") upon the
terms and conditions set forth in the Loan Agreement, in the
Project Agreement of even date herewith between the Bank and the
Project Entity (with the Borrower as a party for certain purposes)
and in the Project Support Agreement of even date herewith between
the Bank, the City and the Region (with the Borrower as a party
for certain purposes).
Now, therefore, the parties hereby agree as follows:
Article I. STANDARD TERMS AND
CONDITIONS; DEFINITIONS; HEADINGS
Section 1.01
Incorporation of Standard Terms and Conditions
All the provisions of the Standard Terms and Conditions dated
February 1999 are hereby incorporated into and made applicable to
the Loan Agreement with the same force and effect as if they were
fully set forth herein (said provisions being hereinafter called
the Standard Terms and Conditions).
Section 1.02
Definitions
Wherever used in the Loan Agreement or the Schedules hereto,
except where stated otherwise, the terms defined in the Preamble
have the respective meanings ascribed therein, the terms defined
in the Standard Terms and Conditions have the respective meanings
ascribed therein, and the following terms have the following
meanings:
"Borrower's Authorised means the Minister of Finance or those of
Representative" his deputies authorised for this purpose
by the Minister of Finance;
"Business Day" means any day (other than a Saturday or
Sunday) on which commercial banks and
foreign exchange markets are open for the
transaction of business in the currency of
payment in the interbank market in London,
England and on which commercial banks and
foreign exchange markets settle payments
in such currency in New York;
"City's Authorised means the Mayor of the City or those of
Representative" his deputies confirmed as being authorised
for this purpose in the legal opinion
referred to in Section 5.01(b)(i) of the
Loan Agreement or a similar legal opinion
which is in form and substance
satisfactory to the Bank;
"Co-Financiers" means:
a) the Borrower;
b) NIB;
c) the Region;
d) the City;
e) the Danish Environmental Protection
Agency;
f) the Swedish International Development
Coorperation Agency; and
g) the Nordic Environment Finance
Corporation.
"Co-Financing means all documentation which sets out
Agreements" agreed terms with one or more
Co-Financiers on co-financing of the
Project in form and substance satisfactory
to the Bank and "Co-Financing Agreement"
means any of them;
"Contract means a unit established within the
Administration and Project Entity to administrate and monitor
Monitoring Unit Project implementation, comprised of the
(CAMU)" Project Entity staff and such external
experts as may be necessary or desirable;
"Corporate Development means the corporate development plan
Plan" referred to in Section 2.06 of the Project
Agreement;
"Corporate Partner" means the corporate partner referred to in
Section 2.06 of the Project Agreement;
"Debt Service Reserve means the bank account opened or to be
Account" open by the Project Entity pursuant to
Section 3.03(c) of the Project Agreement;
Dollars" or "USD" means the lawful currency of the United
States of America;
"FY" means the Borrower's fiscal year
commencing 1 January;
"IAS" means the International Accounting
Standards promulgated by the International
Accounting Standards Committee and
consistently applied;
"Lenders Agent" means an agent appointed by the Bank to
assist the Bank in monitoring the Project
and related matters.
"Management Contractor" means an independent management contractor
(which may be a consortium) appointed by
the Project Entity to carry out
procurement in accordance with Section
2.04 of the Project Agreement;
"Project Entity" includes any successor thereto;
"Region's Authorised means the Governor of the Region or his
Representative" deputies confirmed as being authorised for
this purpose in the legal opinion referred
to in Section 5.01(b)(ii) of the Loan
Agreement or a similar legal opinion which
is in form and substance satisfactory to
the Bank;
"SEK" means the lawful currency of Sweden;
"Statutes" means the constitutional documents of the
Project Entity;
"Subsidiary Loan means the agreement to be entered into
Agreement" between the Borrower and the Project
Entity pursuant to Section III(a) of the
Loan Agreement, as the same may be amended
from time to time;
"Telerate Page 3750" means the display page of London interbank
offered rates (commonly known as "LIBOR")
of major banks for deposits in the Loan
Currency, designated as page 3750 on the
Telerate Service (or such other page as
may replace the Telerate Page 3750) for
the purpose of displaying such LIBOR rates
for deposits in the Loan Currency.
Section 1.03
Headings
The headings of Articles and Sections, as well as the Table of
Contents, are inserted for convenience of reference only and shall
not be used to interpret the Loan Agreement.
Article II. PRINCIPAL TERMS OF THE LOAN
Section 2.01
Loan Amount and Loan Currency
(a) The Bank agrees to lend to the Borrower, on the terms and
conditions set forth or referred to in the Loan Agreement, an
amount of eighteen million Dollars (18,000,000 USD).
(b) The Loan shall be available to the Borrower in 2 Tranches,
as follows:
(i) Tranche A shall be in the amount of 3,000,000 USD and shall
bear interest at the Interest Rate determined in accordance with
Section 2.02(g) of the Loan Agreement; and
(ii) Tranche В shall be in the amount of 15,000,000 USD and
shall bear interest at the Interest Rate determined in accordance
with Section 2.02(g) of the Loan Agreement.
Section 2.02
Other Financial Terms of the Loan
(a) Minimum Drawdown Amount
The Minimum Drawdown Amount shall be 100,000 USD.
(b) Minimum Prepayment Amount
The Minimum Prepayment Amount shall be 100,000 USD.
(c) Minimum Cancellation Amount
The Minimum Cancellation Amount shall be at least 500,000 USD.
(d) Interest Payment Dates and Loan Repayment Dates
The Interest Payment Dates shall be 18 February and 18 August
of each calendar year. The Borrower shall repay the Loan in twenty
two (22) successive semi-annual instalments on each Interest
Payment Date, starting from and including 18 February 2004. Each
instalment shall be in an amount equal to the product of (i) the
principal amount of the Loan outstanding (and not overdue)
immediately prior to the Interest Payment Date divided by (ii) the
number of instalments (including the instalment for which
calculation is made) remaining to be paid.
(e) Last Availability Date
The Last Availability Date shall be 30 June 2004. If the Last
Availability Date is postponed, the Borrower should be liable for
any unwinding costs that may arise.
(f) Commitment Charge
The rate of the commitment charge shall be one half of one
percent (0.5%) per annum.
(g) Interest Rate
The Loan is subject to a Variable Interest Rate. For purposes
of Section 3.04(b) of the Standard Terms and Conditions, the
Relevant Market Interest Rate shall be the offered rate that
appears on the Telerate Page 3750 as of 11:00 a.m., London time,
on the relevant Interest Determination Date for one month, two
months, three months, four months, five months, or six months,
whichever period is closest to the duration of the relevant
Interest Period (or, if two periods are equally close to the
duration of the relevant Interest Period, the average of the two
periods), provided that:
(1) if, for any reason, the Relevant Market Interest Rate
cannot be determined at such time by reference to the Reference
Page, the Relevant Market Interest Rate shall be the rate which
the Bank determines to be the arithmetic mean (rounded upward, if
necessary, to nearest 1/16%) of the offered rates per annum for
deposits in the Loan Currency in an amount comparable to the
portion of the Loan scheduled to be outstanding during the
relevant Interest Period for a period equal to such Interest
Period which are advised to the Bank by three major banks active
in the London interbank market selected by the Bank; and
(2) if the Bank determines that deposits in the Loan Currency
are not being offered in the London interbank market in such
amounts or for such period, the Relevant Market Interest Rate
shall be the cost to the Bank (expressed as a rate per annum) of
funding the portion of the Loan scheduled to be outstanding during
the relevant Interest Period from whatever sources it selects.
Section 2.03
Drawdowns
(a) The Available Amount may be drawn down from time to time in
accordance with the provisions of Schedule 2 to the Loan Agreement
for expenditures made (or if the Bank shall so agree, to be made)
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 authorises the Bank to draw down an amount
equal to the front-end commission from the Available Amount and
pay itself the front-end commission on behalf of the Borrower.
Section 2.04
Authorised Representative
for Purposes of Drawdowns
The Director General of the Project Entity is designated as the
Borrower's Authorised Representative for the purpose of taking any
action required or permitted to be taken under the provisions of
Section 2.03(a) of the Loan Agreement and Sections 3.01 and 3.02
of the Standard Terms and Conditions.
Article III. AFFIRMATIVE PROJECT COVENANTS
In addition to the general undertakings set forth in Articles
IV and V of the Standard Terms and Conditions, the Borrower shall,
unless the Bank shall otherwise agree:
(a) onlend the proceeds of the Loan to the Project Entity under
a Subsidiary Loan Agreement, on terms and conditions which shall
have been approved by the Bank and which shall include the
following:
(i) a margin of not less than 0.5 % per annum above the margin
payable under the Loan Agreement;
(ii) obligations of the Project Entity equivalent to all
obligations of the Project Entity contained in the Project
Agreement;
(iii) a maturity not less than the maturity of the Loan; and
(iv) obligations of the Project Entity to open and operate the
Debt Service Reserve Account;
(b) exercise its rights under the Subsidiary Loan Agreement in
such manner as to protect the interests of the Borrower and the
Bank, to comply with the provisions of the Loan Agreement, and to
accomplish the purposes of the Loan;
(c) except as the Bank shall otherwise agree, the Borrower
shall not assign, amend, abrogate or waive the Subsidiary Loan
Agreement or any provision thereof, save for any amendments of a
non-material nature of which the Bank has been given prior written
notice (and, without prejudice to the generality of the foregoing,
amendments relating to Article III(a)(i) to (iii) of the Loan
Agreement are agreed to be material for this purpose);
(d) cause the Project Entity to perform in accordance with the
provisions of the Project Agreement all the obligations of the
Project Entity therein set forth; and
(e) take or cause to be taken all additional actions necessary
to provide adequate funds for the completion of the Project,
including in particular obtain the NIB Loan and make all such
funds available to the Project Entity as non-reimbursable
contributions towards the Project costs.
Article IV. SUSPENSION; ACCELERATION OF MATURITY
Section 4.01
Suspension
(a) The following are specified as additional events for
suspension of the right of the Borrower to make drawdowns under
the Loan, for the purposes of Section 7.01(a)(xiv) of the Standard
Terms and Conditions:
(i) Water legislation: the legislative and regulatory framework
applicable to the water and waste water services sector in the
territory of the member shall have been amended, suspended,
abrogated, repealed, or waived in such a way as to affect
materially and adversely the operations or the financial condition
of the Project Entity, the City or the Region or their ability to
perform any of their respective obligations under the Project
Agreement and the Project Support Agreement;
(ii) Control of Project Entity: control of the Project Entity
shall have been transferred to parties other than the City and/or
the Region;
(iii) Subsidiary Loan Agreement: the Bank has been advised by
the Borrower that the Project Entity has failed to perform its
obligations under the Subsidiary Loan Agreement;
(iv) Co-Financing Agreements: the right of any of the Borrower,
the Project Entity, the City or the Region to withdraw proceeds
under the Co-Financing Agreements to which it is a party shall
have been suspended, cancelled or terminated in whole or in part,
pursuant to the terms of those arrangements; provided, however,
that the provisions of this paragraph shall not apply if the
Borrower establishes to the satisfaction of the Bank that adequate
funds for the Project are available to the Project Company from
other sources on terms and conditions consistent with the
obligations of the Borrower under the Loan Agreement;
(v) City/Region breach: the City or the Region (including any
political or administrative subdivision thereof) shall have failed
to perform any obligation to the Bank pursuant to an agreement
between the City or the Region, or any political or administrative
subdivision thereof, and the Bank, including Project Support
Agreement;
(vi) Extraordinary situation City/Region: an extraordinary
situation shall have arisen as a result of events which have
occurred after the date of the Loan Agreement which shall make it
improbable that the City and/or the Region will be able to perform
their respective obligations under the Project Support Agreement;
(vii) Material adverse change City/Region: any material adverse
change in the condition of the City or the Region from that
represented by the City or the Region (as the case may be) as of
the date of the Project Support Agreement shall have occurred
prior to the Effective Date;
(viii) City/Region misrepresentation: a representation made by
the City or the Region in connection with the Project Support
Agreement shall have been incorrect or misleading in any material
respect;
(ix) Statutes City/Region: the Statutes of the City or the
Region shall have been amended, suspended, abrogated, repealed or
waived in such a way as to affect materially and adversely the
operations or the financial condition of the City or the Region or
its ability to perform any of its obligations under the Project
Support Agreement;
(x) External Debt; any External Debt of the City or the Region
is declared to be due and payable prior to its specified maturity
and the Bank is of the opinion that this may affect materially and
adversely the ability of the Project Entity, the City and the
Region to perform any of the respective obligations under the
Project Agreement and the Project Support Agreement;
(xi) Inability to pay Debts; the City or the Region shall have
become unable to pay its debts as they mature or any action or
proceeding shall have been taken by the City or the Region or
others whereby any of the Assets of the City or the Region shall
or may be distributed among its creditors; or
(xii) any event specified in Section 4.02 of the Loan Agreement
shall have occurred.
(b) All references to "the Borrower" in Section 7.01(xiii) of
the Standard Terms and Conditions shall also be read as references
to each of the Project Entity, the City and the Region.
Section 4.02
Acceleration of Maturity
The following are specified as additional events for
acceleration of maturity for the purposes of Section 7.06(f) of
the Standard Terms and Conditions:
(a) Co-Financing Agreement. The Borrower fails to perform in a
timely manner any of its obligations under any Co-Financing
Agreement to which it is a party and such default has led to the
termination or cancellation of the Co-Financing Agreement;
(b) Dissolution. The dissolution or disestablishment, or the
suspension of operations, of the City or the Region;
(c) Tariffs. The Project Entity and/or the City are not
entitled to set tariffs for water and waste water services at
levels that will allow the Project Entity to meet its obligations,
including financial covenants, under the Project Agreement and
this situation has continued for a period of 180 days after notice
thereof has been given to the Borrower by the Bank; and
(d) City/Region breach. Any event specified in Section
4.01(a)(v) of the Loan Agreement shall have occurred and shall
have continued for sixty (60) days after notice thereof shall have
been given by the Bank to the Borrower.
Article V. EFFECTIVENESS
Section 5.01
Conditions Precedent to Effectiveness
(a) The following are specified as additional conditions to the
effectiveness of the Loan Agreement for the purposes of Section
9.02(c) of the Standard Terms and Conditions:
(i) Subsidiary Loan Agreement: documentary evidence, in form
and substance satisfactory to the Bank, shall have been furnished
to the Bank that the Subsidiary Loan Agreement, in form and
substance satisfactory to the Bank, has been executed and
delivered on behalf of the Borrower and the Project Entity and is
legally binding upon both parties and enforceable in accordance
with its terms, subject only to the effectiveness of the Loan
Agreement;
(ii) Co-Financing Agreements:
(A) documentary evidence, in form and substance satisfactory to
the Bank, shall have been furnished to the Bank that all of the Co-
Financing Agreements (save in respect of NIB if documentary
evidence has been provided to the Bank in accordance with Section
5.01(a)(vi) of the Loan Agreement) have been executed, delivered
and duly authorised; and
(B) all conditions precedent to effectiveness of the Co-
Financing Agreements (if there are any such conditions precedent)
and to the right of the Borrower to make withdrawals thereunder,
except only to the effectiveness of the Loan Agreement, have been
fulfilled and that such agreements are legal, valid, binding and
enforceable;
(iii) Project' Support Agreement: documentary evidence, in form
and substance satisfactory to the Bank, shall have been furnished
to the Bank that the Project Support Agreement has been executed
and delivered, is in full force and effect and is legally valid
and binding on the City and the Region and that their respective
Authorised Representatives are duly authorised;
(iv) City/Region budget: the City and the Region shall have
made all relevant appropriations in their respective annual
budgets as required for 1999 FY for supporting the Project Entity
pursuant to Section III(d) of the Project Support Agreement;
(v) Balance sheet: documentary evidence, in form and substance
satisfactory to the Bank, shall have been furnished to the Bank by
auditors satisfactory to the Bank, that there are no arrears in
excess of 60 days on the balance sheet of the Project Entity;
(vi) NIB: documentary evidence, in form and substance
satisfactory to the Bank, shall have been furnished to the Bank
that if NIB is not a party to a Co-Financing Agreement then the
Russian Federation will provide 13,000,000 USD to the Project
Entity as a non-reimbursable contribution toward the Project
costs;
(vii) Tariffs:
(A) documentary evidence, in form and substance satisfactory to
the Bank, shall have been furnished to the Bank of a resolution of
an appropriate authorising body of the City adopting a tariff
policy which will enable the Project Entity to comply with its
obligations under the Project Agreement and the Subsidiary Loan
Agreement;
(B) the 1999 tariffs for water and waste water services in
Kaliningrad for households shall have been set to cover at least
60 percent of relevant production costs; and
(C) the 1999 tariffs for water and waste water services in
Kaliningrad for institutional and industrial consumers shall have
been set to cover at least 100 percent of relevant production
costs;
(viii) CAMU: the CAMU shall have been duly established and
adequately staffed;
(ix) Debt Service Reserve Account: the Project Entity shall
have opened the Debt Service Reserve Account in accordance with
the Subsidiary Loan Agreement; and
(x) Corporate Partner: the Project Entity shall have appointed
a Corporate Partner acceptable to the Bank to carry out the
Corporate Development Programme.
(b) Legal opinion City/Region/State Committee for Protection of
Environment: As part of the evidence to be furnished pursuant to
Section 5.01(a)(ii) and (iii), the Borrower shall furnish, or
cause to be furnished, to the Bank an opinion or opinions (in form
and substance satisfactory to the Bank), of counsel acceptable to
the Bank, as showing that:
(i) City: that the Co-Financing Agreements to which the City is
а party, and the Project Support Agreement, have been duly
authorised or ratified by, and delivered on behalf of the City and
are legally binding upon the City and enforceable by the City in
accordance with their respective terms, subject only to the
effectiveness of the Loan Agreement; and
(ii) Region: that the Co-Financing Agreements to which the
Region is a party, and the Project Support Agreement, have been
duly authorised or ratified by, and delivered on behalf of the
Region and are legally binding upon the Region and enforceable by
the Region in accordance with their respective terms, subject only
to the effectiveness of the Loan Agreement; and
(iii) State Committee for Protection of Environment: that the
Co-Financing Agreement to which the State Committee for Protection
of Environment in the Kaliningrad Region is a party has been duly
authorised or ratified by, and delivered on behalf of the State
Committee for Protection of Environment in the Kaliningrad Region
and is legally binding upon the State Committee for Protection of
Environment in the Kaliningrad Region and enforceable by the State
Committee for Protection of Environment in the Kaliningrad Region
in accordance with their respective terms, subject only to the
effectiveness of the Loan Agreement.
(c) Legal opinion Borrower: For the purposes of Section 9.03(a)
of the Standard Terms and Conditions, the opinion or opinions of
counsel shall be given on behalf of the Borrower by the chief
legal counsel of the Ministry of Finance and the following are
specified as additional matters to be included in the opinion or
opinions to be furnished to the Bank:
(i) Subsidiary Loan Agreement: that the Subsidiary Loan
Agreement has been duly authorised or ratified by, and delivered
on behalf of, the Borrower and is legally binding upon the
Borrower and enforceable in accordance with its terms, subject
only to the effectiveness of the Loan Agreement;
(ii) Co-Financing Agreements: that the Co-Financing Agreements
to which the Borrower is a party have been duly authorised or
ratified by, and delivered on behalf of, the Borrower and are
legally binding upon the Borrower and enforceable in accordance
with their respective terms, subject only to the effectiveness of
the Loan Agreement; and
(iii) Project Agreement: that the Project Agreement has been
duly authorised or ratified by, and delivered on behalf of, the
Borrower and is legally binding upon the Borrower and enforceable
in accordance with its terms, subject only to the effectiveness of
the Loan Agreement.
(d) Legal opinion' Project Entity: For the purposes of Section
9.03(c) of the Standard Terms and Conditions, the opinion or
opinions of counsel shall be given on behalf of the Project Entity
by senior legal officer of the Project Entity, and the following
is specified as additional matter to be included in the opinion or
opinions to be furnished to the Bank that the Subsidiary Loan
Agreement has been duly authorised or ratified by, and delivered
on behalf of, the Project Entity and is legally binding upon the
Project Entity and enforceable in accordance with its terms,
subject only to the effectiveness of the Loan Agreement.
Section 5.02
Conditions of Loan Disbursement
(a) Any drawdown of Tranche A of the Loan shall be subject to
the Bank having received evidence in form and substance
satisfactory to the Bank, that the drawdown relates to services in
respect of Part B1 of the Project (as set out in Schedule 1 of the
Loan Agreement and including front end commission).
(b) Tranche В of the Loan shall not be available for drawing,
unless the following conditions have been fulfilled in form and
substance satisfactory to the Bank:
(i) the Bank has received evidence satisfactory to the Bank
that the Project Entity functions as an autonomous and financially
accountable legal entity;
(ii) the Project Entity shall have established an accounting
and management information system in conformity with IAS, enabling
it to exercise appropriate budget control;
(iii) the Borrower shall ensure that the average monthly tariff
collection rate over a 6 month period is not less than 70 per
cent; and
(iv) the Borrower shall have ensured that the average monthly
cash collection rate over a 6 month period is not less than 40 per
cent.
(c) Any drawdown of Tranche В of the Loan shall also be subject
to the prior fulfilment, in form and substance satisfactory to the
Bank, of the following conditions:
(i) Management Contractor: the Bank has received evidence that
the drawdown relates to investment components recommended by the
Management Contractor;
(ii) Project Support Agreement: the City and the Region shall
have fulfilled all their undertakings pursuant to the Project
Support Agreement; and
(iii) No material adverse effect: the Bank is satisfied that no
event has occurred which has had or might have a material adverse
effect on the Project Entity's business, operations or financial
conditions or the ability of the Project Entity to perform any of
its obligations under Project Agreement or any other agreement
contemplated hereby.
Section 5.03
Termination for Failure to Become Effective
A date 90 days after the date of this Loan Agreement is
specified for the effectiveness of the Loan Agreement for purposes
of Section 9.04 of the Standard Terms and Conditions.
Article VI. MISCELLANEOUS
Section 6.01
Notices
The following addresses are specified for the purposes of
Section 10.01 of the Standard Terms and Conditions:
For the Borrower:
Ministry of Finance
Attention: International Financial Institution Department
9, Ilyinka Street
Moscow 103097
Russian Federation
Telephone: (095) 925 61 39
Telefax: (095) 913 43 15
For the Bank:
European Bank for Reconstruction and Development
Attention: Operation Administration Unit
One Exchange Square
London EC2A 2JN
England
Telephone: (44-71) 338 6000
Telefax: (44-71) 338 6100
Telex: 881 2161
Section 6.02
Fees and Costs
The Borrower shall bear any professional, banking, transfer or
exchange fees and costs incurred in the preparation, execution and
registration of the Loan Agreement, the Project Agreement, the
Subsidiary Loan Agreement, the Project Support Agreement and the
Co-Financing Agreements, if any, and any related document. The
Borrower shall be obliged to pay to the Bank on demand any costs
incurred by the Bank in relation to the cancellation of the Loan
or a portion of the Loan.
In witness whereof the parties hereto, acting through their
duly authorised representatives, have caused the Loan Agreement to
be signed in six copies and delivered at London, England as of the
day and year first above written.
(Follow the signatories)
Schedule 1
DESCRIPTION OF THE PROJECT
1. The purpose of the Project is to assist the City of
Kaliningrad in rehabilitating its municipal water supply and
wastewater collection and treatment infrastructure in order to
improve the quality of potable water supply and reduce the
environmental pollution to the Baltic Sea. The project will also
improve the financial and operational performance of Kaliningrad
Vodokanal.
2. The Project consists of the following Parts, subject to such
modifications thereof as the Bank and the Borrower may agree upon
from time to time:
Part A: Investment Programme
A-1: Construction, provision and installation of ground water
treatment plant to produce 90,000 cubic metres per day
A-2: Provision of works for water mains and water distribution
networks rehabilitation
A-3: Provision of works for rehabilitation of wastewater
collectors
A-4: Provision of technical design and supervision services for
the construction of a wastewater treatment plan
A-5: Construction, provision and installation of a wastewater
plant to treat 150,000 cubic metres per day
A-6: Provision of technical support services for operation of
wastewater treatment plant
A-7: Provision of technical support services and equipment for
water demand management and leakage detection
A-8: Construction, supply and installation of groundwater
extraction
Part B: Institutional Development Programme
B-1: Provision of project management, technical design,
tendering and supervision services
B-2: Provision of installation support for contract
administration and management unit
B-3: Preparation of a corporate development plan and
installation of management information, accounting and finance
systems
3. The Project is expected to be completed by 31 December 2003.
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