LOAN AGREEMENTSERBIAN SOLID WASTE PROGRAMME BETWEEN THE REPUBLIC OF SERBIA AND EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT("Off. Herald of RS - Treaties", No. 1/2022) |
(Operation Number 52642)
Dated 17 December 2021
TABLE OF CONTENTS
ARTICLE I - STANDARD TERMS AND CONDITIONS; DEFINITIONS |
2 |
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Section 1.01. |
Incorporation of Standard Terms and Conditions |
2 |
Section 1.02. |
Definitions |
2 |
Section 1.03. |
Interpretation |
3 |
ARTICLE II - PRINCIPAL TERMS OF THE LOAN |
3 |
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Section 2.01. |
Amount and Currency |
3 |
Section 2.02. |
Other Financial Terms of the Loan |
4 |
Section 2.03. |
Drawdowns |
5 |
ARTICLE III - EXECUTION OF THE PROJECT |
5 |
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Section 3.01. |
Other Affirmative Project Covenants |
5 |
Section 3.02. |
Project Implementation Unit |
6 |
ARTICLE IV - SUSPENSION; ACCELERATION; CANCELLATION |
7 |
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Section 4.01. |
Suspension |
7 |
Section 4.02. |
Acceleration of Maturity |
7 |
ARTICLE V - EFFECTIVENESS |
7 |
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Section 5.01. |
Conditions Precedent to Effectiveness |
7 |
Section 5.02. |
Conditions Precedent to First Drawdown of Tranche 1 Loan |
8 |
Section 5.03. |
Conditions Precedent to First Drawdown of Tranche 1 Loan to be made in relation to the Capital Expenditures of Part 1 of the Project |
8 |
Section 5.04. |
Conditions Precedent to First Drawdown of Tranche 2 Loan |
8 |
Section 5.05. |
Legal Opinions |
9 |
Section 5.06. |
Termination for Failure to Become Effective |
9 |
ARTICLE VI - MISCELLANEOUS |
9 |
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Section 6.01. |
Notices |
9 |
SCHEDULE 1 - DESCRIPTION OF THE PROJECT |
1 |
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SCHEDULE 2 - CATEGORIES AND DRAWDOWNS |
1 |
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LOAN AGREEMENT
AGREEMENT dated 17 December 2021 between THE REPUBLIC OF SERBIA represented by Mr. Siniša Mali, Minister of Finance of the Republic of Serbia, on behalf of the Government of the Republic of Serbia representing the Republic of Serbia (the"Borrower") and EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT (the "Bank").
PREAMBLE
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 certain countries committed to and applying the principles of multiparty democracy, pluralism and market economics;
WHEREAS, the Borrower intends to implement the Project as described in Schedule 1 which is designed to assist in the development of regional waste management centres in certain regions of the Republic of Serbia;
WHEREAS, the Project will be carried out by the Borrower, through the Ministry of Environmental Protection ("MEP"), Regionalni centar za upravljanje otpadom "EKO-TAMNAVA" d.o.o., Javno komunalno preduzeće Regionalni centar za upravljanje otpadom Duboko., "Regionalna sanitarna deponija Banjica" d.o.o. and project entity for Sombor solid waste management region for Part 1 of the Project and other project entities as designated in the Tranche 2 Loan Commitment Notice (defined below) for Part 2 of the Project (each a"Project Entity" and together the "Project Entities");
WHEREAS, the Borrower has requested assistance from the Bank in financing part of the Project;
WHEREAS, the Bank is in the process of arranging technical cooperation funds on a grant basis to assist the Borrower in implementing the Project in an amount of up to EUR 1,050,500 for Part 1 of the Project, subject to the terms and conditions to be set forth in an agreement (the"Grant Agreement") between the Bank and the Borrower represented by MEP;
WHEREAS, the Borrower intends to contract a loan from the French Development Agency (Agence Française de Développement) (the "Co-financier") in the amount of EUR 75,000,000 to assist in financing of the Project, subject to the terms and conditions to be set forth in an agreement (the"Co-financing Agreement") between the Borrower and the Co-financier;
WHEREAS, the Bank and the Co-financier intend to enter into a project implementation agreement (the "Project Implementation Agreement") providing terms and conditions under which the Bank and the Co-financier will co-finance the Project; and
WHEREAS, the Bank has agreed on the basis of, inter alia, the foregoing to make a loan to the Borrower in the amount of up to EUR 75,000,000, subject to the terms and conditions set forth or referred to in this Agreement and in the project agreements between the Project Entities, the Borrower represented by MEP and the Bank dated on or around the date of this Agreement, or, if concerning Part 2 of the Project dated on or around the date of the Tranche 2 Loan Commitment Notice (each a"Project Agreement" as defined in the Standard Terms and Conditions and together the "Project Agreements").
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
STANDARD TERMS AND CONDITIONS; DEFINITIONS
Section 1.01. Incorporation of Standard Terms and Conditions
All of the provisions of the Bank’s Standard Terms and Conditions dated 5 November 2021 are hereby incorporated into and made applicable to this Agreement with the same force and effect as if they were fully set forth herein the "Standard Terms and Conditions".
Section 1.02. Definitions
Wherever used in this Agreement (including the Preamble and Schedules), unless stated otherwise or the context otherwise requires, the terms defined in the Preamble have the respective meanings given to them therein, the terms defined in the Standard Terms and Conditions have the respective meanings given to them therein and the following terms have the following meanings:
"Borrower’s Authorised Representative" |
means the Minister of Finance of the Borrower. |
"Designated Performance Requirements" |
means Performance Requirements 1 through 8 and 10 (or, as the context may require, any one of such Performance Requirements) of the Performance Requirements dated April 2019 and related to the Bank’s Environmental and Social Policy dated April 2019. |
"Enforcement Policy and Procedures" |
means the Bank’s Enforcement Policy and Procedures dated 4 October 2017. |
"Environmental and Social Action Plan(s)" |
means the plans of environmental and social mitigation and improvement measures agreed between the Bank and each Project Entity in accordance with each Project Agreement and referred to therein as "Environmental and Social Action Plan". |
"Fiscal Year" |
means the Borrower's fiscal year commencing on 1 January of each year. |
"Tranche 1 Loan" |
means the maximum principal amount of the loan provided for in Section 2.01(b)(1) of this Agreement or, as the context may require, the principal amount thereof from time to time outstanding which is to be used solely for Part 1 of the Project. |
"Tranche 2 Loan" |
means the maximum principal amount of the loan provided for in Section 2.01(b)(2) of this Agreement or, as the context may require, the principal amount thereof from time to time outstanding which is to be used solely for Part 2 of the Project. |
"Tranche 2 Loan Commitment Date" |
means the date on which the Bank gives a Tranche 2 Loan Commitment Notice to the Borrower in accordance with the conditions described in Section 2.01(c)(2) of this Agreement. |
"Tranche 2 Loan Commitment Notice" |
means a notice delivered by the Bank to the Borrower pursuant to the conditions described in Section 2.01(c)(2) of this Agreement. |
Section 1.03. Interpretation
In this Agreement, a reference to a specified Article, Section or Schedule shall, except where stated otherwise in this Agreement, be construed as a reference to that specified Article or Section of, or Schedule to, this Agreement.
ARTICLE II
Section 2.01. Amount and Currency
(a) The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in this Agreement, the amount of EUR 75,000,000.
(b) The Loan shall consist of two Tranches, as follows:
(1) Tranche 1 Loan in the amount of EUR 50,000,000; and
(2) Tranche 2 Loan in the amount of EUR 25,000,000.
(c) Notwithstanding anything to the contrary expressed or implied in this Agreement:
(1) Tranche 1 Loan is committed from the date of the effectiveness of this Agreement; and
(2) Tranche 2 Loan is uncommitted and will become committed only upon the Bank determining in its absolute discretion, no later than 31 December 2022, that it is prepared to make Tranche 2 Loan available and notifying the Borrower in writing that Tranche 2 Loan has been committed, provided the following conditions precedent are fulfilled, in form and substance satisfactory to the Bank:
(A) the Bank shall have received a written request for the commitment of Tranche 2 Loan from the Borrower;
(B) the technical, environmental and social due diligence on Part 2 of the Project by the Bank and its external consultants has been completed and it is satisfactory to the Bank.
Section 2.02. Other Financial Terms of the Loan
(a) The Minimum Drawdown Amount shall be EUR 50,000, provided that the maximum number of Drawdowns shall be limited to 50 Drawdowns.
(b) The Minimum Prepayment Amount shall be EUR 1,000,000.
(c) The Minimum Cancellation Amount shall be EUR 1,000,000.
(d) The Interest Payment Dates shall be 25 April and 25 October of each year.
(e) (1) The Borrower shall repay the Loan in 19 equal (or as nearly equal as possible) semi-annual instalments on 25 April and 25 October of each year, with the first Loan Repayment Date being 25 April 2027 and the last Loan Repayment being 25 April 2036.
(2) Notwithstanding the foregoing, in the event that (i) the Borrower does not draw down the entire Loan amount prior to the first Loan Repayment Date specified in this Section 2.02.(e), and (ii) the Bank extends the Last Availability Date specified in Section 2.02.(f) below to a date which falls after such first Loan Repayment Date, then the amount of each drawdown made on or after the first Loan Repayment Date shall be allocated for repayment in equal amounts to the several Loan Repayment Dates which fall after the date of such drawdown (with the Bank adjusting the amounts so allocated as necessary so as to achieve whole numbers in each case). The Bank shall, from time to time, notify the Borrower of such allocations.
(f) The Last Availability Date shall be the sixth anniversary of the date of this Agreement, or such later date that the Bank may notify to the Borrower. Any extension of the Last Availability Date will be agreed through the means of exchange of letters between the Bank and the Borrower.
(g) The rate of the Commitment Charge shall be 0.5% per annum. The Commitment Charge shall accrue from (i) the date sixty (60) days after the date of this Agreement for Tranche 1 Loan and (ii) the Tranche 2 Loan Commitment Date for Tranche 2 Loan.
(h) The rate of the Front-end Commission shall be 1% of Tranche 1 Loan and 1% of Tranche 2 Loan. The Front-end Commission for Tranche 2 Loan will be due and payable within fifteen (15) days after the Tranche 2 Loan Commitment Date.
(i) The Loan is subject to a Variable Interest Rate. Notwithstanding the foregoing, the Borrower may, as an alternative to paying interest at a Variable Interest Rate on all or any portion of the Loan then outstanding, elect to pay interest at a Fixed Interest Rate on such portion of the Loan in accordance with Section 3.04(c) of the Standard Terms and Conditions.
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 finance expenditures made (or, if the Bank so agrees, to be made) in respect of the reasonable cost of goods, works and services required for the Project.
(b) Notwithstanding Section 3.05(c) of the Standard Terms and Conditions, the Borrower has opted not to have the Front-end Commission paid out of the Available Amount and shall instead pay the Front-end Commission out of its own resources. The payment of the Front-end Commission by the Borrower shall be made pursuant to Section 3.05(d) of the Standard Terms and Conditions.
ARTICLE III
Section 3.01. Other 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 otherwise agrees:
(a) Through the MEP, cause all goods, works and services financed out of the proceeds of the Loan to be used exclusively for the purposes of the Project;
(b) Through the MEP, delegate to the Project Entities the day-to-day management of the Project, including, but not limited to, the consolidated financial and procurement management;
(c) Through the MEP, perform all of its obligations under the Project Agreements;
(d) Through the MEP, cause the Project Entities to perform all of their obligations under the Project Agreements;
(e) Take, or cause to be taken, all additional action necessary to provide adequate funds for the completion of the Project, including the government contributions if required;
(f) Provide or cause to be provided, when requested, all governmental licenses, approvals or consents required for the financing and carrying out of the Project by the Project Entities, and for carrying on of the Project Entities’ business, including all approvals and licenses necessary to ensure that the Project Entities are granted rights of way and other land use rights necessary for carrying out the Project;
(g) Through the MEP, ensure the operation of the regional waste management centres and Project Entities, including ensuring that the Project Entities have adequate resources and suitably qualified personnel, after the completion of the Project;
(h) Through the MEP, ensure the implementation of the Environmental and Social Action Plans, Stakeholder Engagement Plans (as defined in each Project Agreement) and Land Acquisition and Resettlement Frameworks (as defined in each Project Agreement) and compliance with the Designated Performance Requirements by the Project Entities;
(i) Through the MEP, ensure that the Livelihood Restoration Plan (as defined in each Project Agreement) for a relevant part of the Project, as applicable, is developed and implemented in compliance with Bank’s Environmental and Social Policy;
(j) Transfer free of charge the assets financed from the proceeds of the Loan to each Project Entity, as applicable, at the latest one year after the receipt of the related assets;
(k) Through the MEP, finalise and adopt National waste management programme (2021-2024) by 31 January 2022;
(l) Through the MEP, develop or update regional waste management plans for each regional waste management centres before the second anniversary of the date of the this Agreement;
(m) for the solid waste management system in Sombor the establishment of the project entity in Sombor solid waste region and the execution of the relevant Project Agreement with such project entity within six months from the date of this Agreement; and
(n) Exempt from VAT and customs duties (all goods, works and services (including consultancy services)), procured by the Borrower acting through the MEP and/or the Project Entities for the Project and financed from the proceeds of the Loan or any technical cooperation funds made available by the Bank, or provide for their reimbursement.
Section 3.02. Project Implementation Unit
In order to coordinate, manage, monitor and evaluate all aspects of the implementation of the Project, including the procurement of goods, works and services for the Project, the Borrower, through the MEP, shall, unless otherwise agreed with the Bank, establish and at all times during execution of the Project operate a project implementation unit with adequate resources and suitably qualified personnel, under terms of reference acceptable to the Bank.
ARTICLE IV
SUSPENSION; ACCELERATION; CANCELLATION
Section 4.01. Suspension
The following are specified for purposes of Section 7.01(a)(xvii) of the Standard Terms and Conditions:
(a) the legislative and regulatory framework applicable to the waste management sector in the territory of the Borrower shall have been amended, suspended, abrogated, repealed or waived in a manner that would have a material adverse effect on the Project or the ability of the Borrower and/or any Project Entity to perform their obligations under this agreement or the Project Agreements other than as approved by the Bank in writing;
(b) the Statutes shall have been amended, suspended, abrogated, repealed or waived in a manner that would have a material adverse effect on the Project or the ability of the Project Entity to perform its obligations under the Project Agreement; and
(c) the ultimate control of the Project Entities shall have been transferred to a party other than the Borrower, unless the Bank has given its prior written approval to such transfer.
Section 4.02. Acceleration of Maturity
The following is specified for purposes of Section 7.06(f) of the Standard Terms and Conditions:
(a) any event specified in Section 4.01 shall have occurred and continued without remedy for sixty (60) days after notice thereof has been given by the Bank to the Borrower.
ARTICLE V
Section 5.01. Conditions Precedent to Effectiveness
The following are specified for purposes of Section 9.02(c) of the Standard Terms and Conditions as additional conditions to the effectiveness of this Agreement and the Project Agreements:
(a) the Co-financing Agreement has been executed and delivered and all conditions precedent to its effectiveness or to the right of the Borrower to make drawdowns thereunder, except only the effectiveness of this Agreement, have been fulfilled;
(b) the execution of the Project Implementation Agreement;
(c) the opinion specified in Section 5.05.(a) of this Agreement has been delivered to the Bank in a form and substance satisfactory to the Bank; and
(d) the opinions specified in Section 5.05.(b) and Section 5.05(c) of this Agreement covering Part 1 of the Project have been delivered to the Bank in a form and substance satisfactory to the Bank.
Section 5.02. Conditions Precedent to First Drawdown of Tranche 1 Loan
The following is specified as a condition to the first Drawdown of Tranche 1 Loan under this Agreement:
(a) the project implementation unit for Part 1 of the Project has been established by the Borrower represented by the MEP and the Project Entities with adequate resources and suitably qualified personnel, in form and substance satisfactory to the Bank, is operational.
Section 5.03. Conditions Precedent to First Drawdown of Tranche 1 Loan to be made in relation to the Capital Expenditures of Part 1 of the Project
The following is specified as a condition to the first Drawdown of Tranche 1 Loan to be made in relation to the Capital Expenditures of Part 1 of the Project under this Agreement:
(a) the appointment of an independent engineer by the Borrower, acting through the MEP, to supervise works of Part 1 of the Project.
Section 5.04. Conditions Precedent to First Drawdown of Tranche 2 Loan
Without prejudice to Section 2.01.(c)(2), the following are specified as conditions to the first Drawdown of Tranche 2 Loan under this Agreement:
(a) the Environmental and Social Action Plans, Stakeholder Engagement Plans and Land Acquisition and Resettlement Framework, and Livelihood Restoration Plans (if relevant) for Part 2 of the Project have been agreed;
(b) the execution of the Project Agreements for Part 2 of the Project by the duly authorised parties thereto;
(c) the project implementation unit for Part 2 of the Project has been established by the Borrower represented by MEP and the Project Entities with adequate resources and suitably qualified personnel, in form and substance satisfactory to the Bank, is operational;
(d) the opinions specified in Section 5.05.(b) and Section 5.05.(c) covering Part 2 of the Project have been delivered to the Bank in a form and substance satisfactory to the Bank; and
(e) the Bank shall have received any other conditions precedent the Bank may reasonably require, at the sole discretion of the Bank at the time the Tranche 2 Loan Commitment Notice is delivered by the Bank in accordance with Section 2.01(c)(2) hereof.
Section 5.05. Legal Opinions
(a) For purposes of Section 9.03(a) of the Standard Terms and Conditions, the opinion shall be given on behalf of the Borrower by the Ministry of Justice.
(b) For 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 Entities by the [head of legal department] of the relevant Project Entities.
(c) For purposes of Section 9.03 of the Standard Terms and Conditions, the opinion shall be given on behalf of the Borrower, acting through the MEP, and shall provide an opinion issued by the Ministry of Justice on its behalf, which shall confirm that the Project Agreements have been duly authorised and delivered on behalf of the Borrower and constitute valid and legally binding obligations of the Borrower enforceable in accordance with their terms.
Section 5.06. Termination for Failure to Become Effective
The date 180 days after the date of this Agreement is specified for purposes of Section 9.04 of the Standard Terms and Conditions.
ARTICLE VI
Section 6.01. Notices
The following addresses are specified for purposes of Section 10.01 of the Standard Terms and Conditions, except that any notice shall be deemed to be delivered if by hand, mail, or in pdf or similar format by electronic mail:
For the Borrower: |
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The Republic of Serbia |
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The Ministry of Finance |
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Kneza Milosa 20 |
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11000, Belgrade |
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Serbia |
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Attention: |
Minister of Finance |
Telephone: |
+ 381 11 3642 626 |
Email: |
kabinet@mfin.gov.rs |
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For EBRD: |
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European Bank for Reconstruction and Development |
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One Exchange Square |
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London EC2A 2JN |
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United Kingdom |
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Attention: |
Operation Administration Department / Operation No. 52642 |
Telephone: |
+44 20 7338 6000 |
Email: |
oad@ebrd.com |
IN WITNESS WHEREOF, the parties hereto, acting through their duly authorised representatives, have caused this Agreement to be signed in six copies in the English language and delivered electronically as of the day and year first above written.
THE REPUBLIC OF SERBIA |
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By: |
______________________________ |
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Name: Siniša Mali |
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Title: Minister of Finance |
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EUROPEAN BANK |
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FOR RECONSTRUCTION AND DEVELOPMENT |
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By: |
______________________________ |
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Name: |
Matteo Colangeli |
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Title: |
Regional Director, Head of Western Balkans |
DESCRIPTION OF THE PROJECT
1. The purpose of the Project is to assist the Borrower in the development of regional waste management centres in certain regions of the Republic of Serbia.
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 1 of the Project:
(i) Construction or expansion of
a. the regional waste management system in Kalenic solid waste region ("Eko-Tamnava" d.o.o. is the Project Entity);
b. the regional waste management system in Sombor solid waste region;
c. the regional waste management system in Duboko solid waste region ("Duboko" d.o.o. is the Project Entity); and
d. the regional waste management system in Nova Varos solid waste region ("Banija" d.o.o. is the Project Entity).
(ii) Engagement of suitably qualified consultants to assist in works supervision, and related studies, designs, and technical assistance.
Part 2 of the Project:
(i) Construction of
a. the regional waste management system in Pirot solid waste region;
b. the regional waste management system in Pozarevac solid waste region;
c. the regional waste management system in Indjija solid waste region;
d. the regional waste management system in Sremska Mitrovica solid waste region;
e. the multi-regional primary sorting system within existing solid waste regions.
The exact scope of Part 2 of the Project will be defined during due diligence and prior to commitment of Tranche 2 Loan. The relevant Project Entities will be designated in the Tranche 2 Loan Commitment Notice.
(ii) Engagement of suitably qualified consultants to assist in works supervision, and related studies, designs, and technical assistance and procurement and implementation support.
3. The Part 1 of the Project is expected to be completed by 31 December 2027.
4. The Part 2 of the Project is expected to be completed by the date as designated in the Tranche 2 Loan Commitment Notice.
CATEGORIES AND DRAWDOWNS
1. The table attached to this Schedule sets forth the Categories to be financed out of the proceeds of Loan, the allocation of the amounts between Part 1 and Part 2 of the Project to each Category, and the percentage of expenditures for items to be financed in each Category.
2. Notwithstanding the provisions of paragraph 1 above, no Drawdown shall be made in respect of expenditures incurred prior to the date of the Agreement.
Attachment to Schedule 2
The Project has two categories: Category I related to Part 1 of the Project and Category II related to Part 2 of the Project.
Category (I i II) |
Amount of the Loan |
% Expenditures to be financed |
I - Part 1 of the Project: |
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(1) Capital expenditures |
43,915,000 |
100% |
(2) Works supervision, studies and designs, and tehnical assistance |
4,750,000 |
100% |
(3) Unallocated contingency |
1,335,000 |
100% |
Total: |
50,000,000 |
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II - Part 2 of the Project: |
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(1) Capital expenditures, procurement support, works supervision, studies and designs, and technical assistance |
25,000,000 |
100% |
Total: |
25,000,000 |
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