Loan Agreement Between the Government of the Republic of Vanuatu and the Asian Development Bank (Ratification) Act 1992

	Home \| Databases \| WorldLII \| Search \| Feedback Vanuatu Sessional Legislation

LOAN AGREEMENT BETWEEN THE REPUBLIC OF VANUATU
AND THE ASIAN DEVELOPMENT BANK (RATIFICATION) ACT
NO. 11 OF 1992

An Act to provide for the ratification of the Loan Agreement made between the Republic of Vanuatu and the Asian Development Bank signed on the 20th day of January 1992.

1. (1) The Loan Agreement made between the Republic of Vanuatu and the Asian Development Bank signed on the 20th day of January, 1992 which is set out in the Schedule hereto is hereby ratified.

(2) The Loan Agreement referred to in subsection (1) shall be binding on the Republic of Vanuatu in accordance with the terms thereof.

2. This Act shall come into force on the date of its publication in the Gazette.

LOAN AGREEMENT dated 20 January 1992 between REPUBLIC OF VANUATU (hereinafter called the Borrower) and ASIAN DEVELOPMENT BANK (hereinafter called the Bank).

(A) the Borrower has applied to the Bank for a loan for the purposes of the Project described in Section 3.01 of this Loan Agreement;

(B) the Project will be carried out by the Development Bank of Vanuatu (hereinafter called DBV) Banque Indosuez Vanuatu Limited (hereinafter called BIV), ANZ Bank (Vanuatu) Limited (hereinafter called ANZBV) and Westpac Banking Corporation (hereinafter called Westpac) and for this purpose the Borrower will make available to DBV, BIV, ANZBV and Westpac the proceeds of the Loan provided for herein upon terms and conditions satisfactory to the Bank;

(C) the Borrower and DBV have applied to the Bank for technical assistance for the purposes of institutional development of DBV and by a Technical Assistance Agreement of even date herewith, the Bank has agreed to provide a technical assistance grant of up to six hundred fifty thousand dollars ($650,000) equivalent; and

(D) the Bank, on the basis inter alia of the foregoing, has agreed to make a loan to the Borrower from the Bank's Special Funds resources upon the terms and conditions set forth herein and in the Project Agreements of even date herewith between the Bank and each of DBV, BIV, ANZBV and Westpac.

Section 1.01. All the provisions of the Special Operations Loan Regulations of the Bank, dated 7 December 1982, are hereby made applicable to this Loan Agreement with the same force and effect as if they were fully set forth herein, subject, however, to the modifications thereof set forth in Schedule 1 to this Loan Agreement (said Special Operations Loan Regulations as so modified being hereinafter called the Loan Regulations).

Section 1.02. Wherever used in this Loan Agreement, unless the context otherwise requires, the several terms defined in the Loan Regulations have the respective meanings therein set forth, and the following additional terms have the following meanings:

(a) "Act" means the Development Bank of Vanuatu Act No. 13 of 1983 of the Borrower, as amended from time to time;

(c) "Policy Statement" means the Statement of General Business Policies adopted by the Board of Directors of DBV on 2 August 1983, as amended from time to time;

(d) "Project Executing Agencies" for the purposes of, and within the meaning of, the Loan Regulations means DBV, BIV, ANZBV and Westpac which are responsible for the carrying out of the Project;

(e) "Qualified Enterprise" means an enterprise in whose favour a Financial Institution proposes to make or has made a subloan;

(f) "Qualified Project" means a specified development project, excluding the construction of houses, to be carried out by a Qualified Enterprise utilizing the proceeds of a subloan;

(g) "subloan" means a loan made or proposed to be made by a Financial Institution out of the proceeds of the Loan to a Qualified Enterprise for a Qualified project;

(h) "subsidiary" means a company which is a subsidiary of DBV within the meaning of the Companies Act of the Borrower or any amendment or replacement thereof;

(i) "Subsidiary Loan Agreement" means the agreement between the Borrower and each Financial Institution referred to in Section 3.02 of this Loan Agreement; and

Section 2.01. The Bank agrees to lend to the Borrower from the Bank's Special Funds resources an amount in various currencies equivalent to three million eight hundred ten thousand Special Drawing Rights (SDR3,810,000).

Section 2.02. The Borrower shall pay to the Bank a service charge at the rate of one per cent (1%) per annum on the amount of the Loan withdrawn from the Loan Account and outstanding from time to time.

Section 2.03. The service charge and any other charge on the Loan shall be payable semiannually on 15 January and 15 July in each year.

Section 2.04. (a) Subject to the provisions of paragraphs (b) and (c) below, the Borrower shall repay the principal amount of the Loan withdrawn from the Loan Account in accordance with the amortization schedule set forth in Schedule 2 to this Loan Agreement.

(b) If the Bank shall determine, after due consideration by its Board of Directors, that (i) the Borrower's gross national product per capita (per capita GNP) has exceeded $690 in constant 1985 dollars for five consecutive years and (ii) the Borrower has achieved the capacity to borrow from the Bank's ordinary capital resources, the Bank may, by notice to the Borrower, modify the terms of repayment of the Loan by increasing by 100 per cent the amount of each maturity due thereafter until the principal amount of the Loan shall have been fully repaid. However, at the request of the Borrower, the Bank may, in lieu of so increasing any such maturity amounts, charge interest, at an annual rate to be agreed between the Borrower and the Bank, on the principal amount of the Loan withdrawn and outstanding from time to time in such a manner and to such extent as to yield the same grant element as would be obtained under the above-stated increase of maturity amounts.

(c) If, at any time after a modification of the lending terms pursuant to the provisions of paragraph (b) above, the Bank shall, after due consideration by its Board of Directors, determine that the Borrower's economic condition has deteriorated significantly, the Bank may, at the request of the Borrower, restore the original lending terms with respect to the remaining amount of the Loan withdrawn and outstanding.

Section 3.01. The Project for which the Loan is made is the financing by the Financial Institutions of specific development projects in Vanuatu by making loans (other than housing loans) for productive purposes to Qualified Enterprises in the private sector, all in accordance with this Loan Agreement, the respective Project Agreements and, in the case of DBV, the Act and the Policy Statement.

Section 3.02. The Borrower shall enter into a Subsidiary Loan Agreement with each Financial Institution, providing inter alia for the relending of the proceeds of the Loan, the carrying out of the Project, and the rights of the Borrower and the Bank with respect thereto. Such Subsidiary Loan Agreements shall be in form and on terms and conditions acceptable to the Bank, including without limitation to those set forth in paragraph 2 of Schedule 3 to this Loan Agreement, and shall be without prejudice to, and without limitation on, the obligations of the Borrower under this Loan Agreement.

Section 3.03. (a) The amount of the Loan may be withdrawn from the Loan Account to finance the reasonable cost of goods and services required for the Qualified Project in respect of which the withdrawal is requested.

(b) Except as the Bank may otherwise agree, the proceeds of each part of the Loan shall be used only for making a subloan to the Qualified Enterprise in respect of which such part of the Loan was withdrawn from the Loan Account, and shall be applied exclusively to the cost of goods and services required to carry out the Qualified Project in respect of which such part of the Loan was withdrawn.

(c) Except as the Bank may otherwise agree, and subject to the provisions of Schedule 2 of each Project Agreement, the entire foreign currency cost of goods and services for Qualified Projects and a portion of their local currency costs may be financed under the Loan.

(d) Except as the Bank may otherwise agree, all goods and services to be financed out of the proceeds of the Loan shall be procured, and all withdrawals of amounts of the Loan shall be made, in accordance with the provisions of Schedule 2 to each Project Agreement.

Section 3.04. Withdrawals from the Loan Account shall be made only on account of expenditures relating to goods and services which:

(a) are produced in, or are supplied from, such member countries of the Bank as shall have been specified by the Bank from time to time as eligible sources for procurement; and

(b) meet such other eligibility requirements as shall have been specified by the Bank from time to time.

Section 3.05. The closing date for withdrawals from the Loan Account for the purposes of Section 8.03 of the Loan Regulations shall be a date four (4) years after the Effective Date or such other date as may from time to time be agreed between the Borrower and the Bank.

Section 4.01. (a) The Borrower shall cause each Financial Institution to carry out the Project with due diligence and efficiency and in conformity with sound banking, administrative, financial, engineering, environmental and business practices.

(b) In the carrying out of the Project, the Borrower shall perform all the obligations set forth in Schedule 3 to this Loan Agreement to the extent that they are applicable to the Borrower.

Section 4.02. The Borrower shall furnish, or cause to be furnished, to the Bank all such reports and information as the Bank shall reasonably request concerning (i) the Loan, the expenditure of the proceeds and maintenance of the service thereof; (ii) the Project; (iii) the Qualified Enterprises, the Qualified Projects and the subloans; iv) the administration, operations and financial condition of DBV; (v) financial and economic conditions in the territory of the Borrower and the international balance-of-payments position of the Borrower; and (vi) any other matters relating to the purposes of the Loan.

Section 4.03. The Borrower shall enable the Bank's representatives to inspect any Qualified Enterprise, any Qualified Project, the goods financed out of the proceeds of the Loan, and any relevant records and documents maintained by DBV.

Section 4.04. The Borrower shall promptly take all action, including the provision of funds, facilities, services and other resources, which shall be necessary on its part to enable DBV to perform its obligations under the Project Agreement, and shall not take or permit any action which would interfere with the performance of such obligations.

Section 4.05. (a) The Borrower shall exercise its rights under the Subsidiary Loan Agreements in such a manner as to protect the interests of the Borrower and the Bank and to accomplish the purposes of the Loan.

(b) No rights or obligations under the Subsidiary Loan Agreements shall be assigned, amended, abrogated or waived without the prior concurrence of the Bank.

Section 4.06. (a) It is the mutual intention of the Borrower and the Bank that no other external debt owed to a creditor other than the Bank shall have any priority over the Loan by way of a lien on the assets of the Borrower. To that end, the Borrower undertakes (i) that, except as the Bank shall otherwise agree, if any lien shall be created on any assets of the Borrower as security for any external debt, such lien will ipso facto equally and ratably secure the payment of the principal of, and service charge and any other charge on, the Loan; and (ii) that the Borrower, in creating or permitting the creation of any such lien, will make express provision to that effect.

(b) The provisions of paragraph (a) of this Section shall not apply to (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; or (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date.

(c) The term "assets of the Borrower" as used in paragraph (a) of this Section includes assets of any political subdivision or any agency of the Borrower and assets of any agency of any such political subdivision, including the Reserve Bank of Vanuatu and any other institution performing the functions of a central bank for the Borrower.

Section 5.01. The following are specified as additional events for suspension of the right of the Borrower to make withdrawals from the Loan Account for the purposes of Section 8.02(1) of the Loan Regulations:

(a) the Borrower or any Financial Institution shall have failed to perform any of its or their respective obligations under the relevant Subsidiary Loan Agreement;

(b) any part of the principal amount of any loan made to any Financial Institution and having an original maturity of one year or more shall, in accordance with the terms thereof, have become due an payable prior to the agreed maturity thereof by reason of any default specified in the agreement providing for any such loan or in any security representing such loan; and

(c) the Act or any provision thereof shall have been repealed, suspended or amended in any manner which in the reasonable opinion of the Bank will or may adversely affect the carrying out of the Project or the ability of DBV to perform any of its obligations under the relevant Project Agreement.

Section 5.02. The following are specified as additional events for acceleration of maturity for the purposes of Section 8.07(d) of the Loan Regulations: any of the events specified in section 5.01 of this Loan Agreement shall have occurred.

Section 6.01. The following is specified as an additional condition to the effectiveness of this Loan Agreement for the purposes of Section 9.01(f) of the Loan Regulations: the Subsidiary Loan Agreements, in form and substance satisfactory to the Bank, shall have been-duly executed and delivered on behalf of the Borrower and at least two of the Financial Institutions and shall have become fully effective and binding on the parties thereto in accordance with their terms, subject only to the effectiveness of this Loan Agreement.

Section 6.02. The following is specified as an additional matter, for the purposes of Section 9.02(d) of the Loan Regulations, to be included in the opinion or opinions to be furnished to the Bank: that each Subsidiary Loan Agreement referred to in Section 6.01 hereof has been duly authorized or ratified by, and executed and delivered on behalf of, the Borrower and the respective Financial Institution, and is legally binding upon the Borrower and the parties thereto in accordance with its terms, subject only to the effectiveness of this Loan Agreement.

Section 6.03. A date ninety (90) days after the date of this Loan Agreement is specified for the effectiveness of the Loan Agreement for the purposes of Section 9.04 of the loan Regulations.

Section 7.01. The Borrower hereby designates each Financial Institution its agent under its respective part of the Project for the purposes of taking action or entering into any agreement required or permitted under Section 3.03 of this Loan Agreement and under Sections 5.01, 5.03, 5.04 and 5.05 of the Loan Regulations.

Section 7.02. Any action taken or agreement entered into by each Financial Institution pursuant to the authority conferred under Section 7.01 of this Loan Agreement shall be fully binding on the Borrower and shall have the same force and effect as if taken by the Borrower.

Section 7.03. The authority conferred on each Financial Institution under Section 7.01 of this Loan Agreement may be revoked or modified by agreement between the Borrower and the Bank.

Section 8.01. The Minister of Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 11.02 of the Loan Regulations.

Section 8.02. The following addresses are specified for the purposes of Section 11.01 of the Loan Regulations:

IN WITNESS WHEREOF the parties hereto, acting through their representatives thereunto duly authorized, have caused this Loan Agreement to be signed in their respective names and to be delivered at the offices of the Bank, as of the day and year first above written.

For the purpose of this Loan Agreement, the provisions of the Special Operations Loan Regulations of the Bank, dated 7 December 1982, shall be modified as follows:

(a) by the deletion of Sections 4.05 and 5.02, and by the deletion of the phrase "or to request the Bank to enter into a special commitment pursuant to Section 5.02" from Section 5.03;

(b) by the substitution in the second sentence of Section 5.03 of the words "Qualified Projects" the word "Project"; and

"Section 8.03. Cancellation by the Bank. If (i) the right of the Borrower to make withdrawals from the Loan Account shall have been suspended with respect to any amount of the Loan for a continuous period of thirty (30) days, or (ii) at any time the Bank determines, after consultation with the Borrower, that any amount of the Loan will not be required for the purposes of the Project, or (iii) by the date specified in paragraph (c)(ii) of Section 2.02 of the Project Agreements, no application or statement required under paragraphs (a) and (b) of the same Section of the Project Agreements shall have been submitted to the Bank in respect of any portion of the Loan, or (iv) by the date specified in Section 3.05 of the Loan Agreement as the closing date for withdrawals an amount of the Loan shall remain unwithdrawn from the Loan Account, the Bank may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount or portion of the Loan. Upon the giving of such notice such amount or portion of the Loan shall be cancelled.".

	Date Payment Due		Payment of Principal
			(expressed in Special Drawing Rights)*
15	January	2002	SDR 38,100
15	July	2002	38,100
15	January	2003	38,100
15	July	2003	38,100
15	January	2004	38,100
15	July	2004	38,100
15	January	2005	38,100
15	July	2005	38,100
15	January	2006	38,100
15	July	2006	38,100
15	January	2007	38,100
15	July	2007	38,100
15	January	2008	38,100
15	July	2008	38,100
15	January	2009	38,100
15	July	2009	38,100
15	January	2010	38,100
15	July	2010	38,100
15	January	2011	38,100
15	July	2011	38,100
15	January	2012	76,200
15	July	2012	76,200
15	January	2013	76,200
15	July	2013	76,200
15	January	2014	76,200
15	July	2014	76,200
15	January	2015	76,200
15	July	2015	76,200
15	January	2016	76,200
15	July	2016	76,200
15	January	2017	76,200
15	July	2017	76,200
15	January	2018	76,200
15	July	2018	76,200
15	January	2019	76,200
15	July	2019	76,200
15	January	2020	76,200
15	July	2020	76,200
15	January	2021	76,200
15	July	2021	76,200
15	January	2022	76,200
15	July	2022	76,200
15	January	2023	76,200
15	July	2023	76,200
15	January	2024	76,200
15	July	2024	76,200
15	January	2025	76,200
15	July	2025	76,200
15	January	2026	76,200
15	July	2026	76,200
15	January	2027	76,200
15	July	2027	76,200
15	January	2028	76,200
15	July	2028	76,200
15	January	2029	76,200
15	July	2029	76,200
15	January	2030	76,200
15	July	2030	76,200
15	January	2031	76,200
15	July	2031	76,200
			__________________

		Total	SDR3,810,000
			__________________

*The figures in this column represent SDR equivalents determined as of the respective dates of withdrawal. The arrangements for payment of each maturity are subject to the provisions of Sections 3.04 and 4.03 of the Loan Regulations.

1. Except as the Bank may otherwise agree, the Borrower shall make available the proceeds of the Loan to the Financial Institutions on a first-come-first served basis in accordance with the provisions of the Loan Agreement and those of the respective Project Agreements.

2. Except as the Bank may otherwise agree, the Borrower shall relend the proceeds of the Loan to each Financial Institution on, inter alia, the following terms and conditions:

(b) equal semiannual repayments of principal over a period of fifteen (15) years, including a grace period of three (3) years; and

3. Any provision in the Loan Agreement or respective Project Agreements notwithstanding, the Borrower shall not make available any of the proceeds of the Loan to any Financial Institution unless and until (i) a Subsidiary Loan Agreement, in form and substance satisfactory to the Bank, shall have been executed and delivered on behalf of the Borrower and such Financial Institution and shall have become fully effective and binding upon the parties thereto in accordance with its terms, and (ii) the Borrower shall have furnished, or caused to be furnished, to the Bank an opinion satisfactory to the Bank, of counsel acceptable to the Bank that the Subsidiary Loan Agreement referred to in clause (i) hereinabove has been duly authorized and ratified by, and executed and delivered on behalf of, the Borrower and such Financial Institution and is legally binding upon the parties in accordance with its term.

4. BIV, ANZBV and Westpac shall each ensure that it is in compliance with the current monetary policies and banking regulations of the Reserve Bank of Vanuatu and the Borrower shall provide the Bank, on an annual basis, with a certification in this regard.

5. The Borrower and DBV shall, within two months of the Effective Date, take all necessary action to appoint to the Board of Directors of DBV a Director mutually acceptable to the Bank and the Borrower. The initial term of such Director shall be for three years, and any reappointment shall be subject to the agreement of the Borrower and the Bank.

6. The Borrower shall promptly inform the Bank of any proposal for the amendment of the Act in order for the Bank to have a reasonable opportunity to comment on the proposed change or changes.

7. The Borrower shall not permit DBV to make any amendment to its Policy Statement without the prior agreement of the Borrower and the Bank.

Vanuatu Sessional Legislation

Loan Agreement Between the Government of the Republic of Vanuatu and the Asian Development Bank (Ratification) Act 1992