LOAN AGREEMENTSERBIAN SOLID WASTE PROGRAMME PHASE III BETWEEN THE REPUBLIC OF SERBIA AND EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT("Off. Herald of RS - Treaties", No. 1/2025) |
(Operation Number 52642)
Dated 17 December 2024
TABLE OF CONTENTS
ARTICLE I - STANDARD TERMS AND CONDITIONS; DEFINITIONS |
2 |
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 |
Section 2.01. Amount and Currency |
3 |
Section 2.02. Other Financial Terms of the Loan |
3 |
Section 2.03. Drawdowns |
4 |
ARTICLE III - EXECUTION OF THE PROJECT |
5 |
Section 3.01. Other Affirmative Project Covenants |
5 |
Section 3.02. Project Implementation Unit |
6 |
ARTICLE IV - SUSPENSION; ACCELERATION |
6 |
Section 4.01. Suspension |
6 |
Section 4.02. Acceleration of Maturity |
6 |
ARTICLE V - EFFECTIVENESS |
7 |
Section 5.01. Conditions Precedent to Effectiveness |
7 |
Section 5.02. Conditions Precedent to First Drawdown of the Loan |
7 |
Section 5.03. Legal Opinions |
7 |
Section 5.04. Termination for Failure to Become Effective |
8 |
ARTICLE VI - MISCELLANEOUS |
8 |
Section 6.01. Notices |
8 |
SCHEDULE 1 - DESCRIPTION OF THE PROJECT S1-1 |
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SCHEDULE 2 - CATEGORIES AND DRAWDOWNS S2-2 |
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LOAN AGREEMENT
AGREEMENT dated 17 December 2024 between THE REPUBLIC OF SERBIA represented by 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, pursuant to a loan agreement dated 17 December 2021 between the Borrower and the Bank, the Bank has extended a loan to the Borrower in the amount of EUR 75,000,000 for the purposes of assisting the Borrower in the development of regional waste management centres in certain regions of the Republic of Serbia;
WHEREAS, the Bank has entered into following project agreements with the relevant project entities (each an "Existing Project Entity" and together the "Existing Project Entities"): (i) the project agreement dated 17 December 2021 between Regionalni centar za upravljanje otpadom "EKO-TAMNAVA" d.o.o, the Borrower and the Bank; (ii) the project agreement dated 17 December 2021 between Javno komunalno preduzeće "Regionalni centar za upravljanje otpadom Duboko", the Borrower and the Bank; (iii) the project agreement dated 17 December 2021 between Regionalna sanitarna deponija "Banjica" d.o.o, the Borrower and the Bank; (iv) project agreement dated 17 December 2021 between Javno komunalno preduzeće "Regionalni centar za upravljanje otpadom Rančevo", the Borrower and the Bank; (v) the project agreement dated 13 June 2022 between Javno komunalno preduzeće "Regionalna deponija Pirot", the Borrower and the Bank; and (vi) the project agreement dated 13 June 2022 between Javno komunalno preduzeće „Regionalna deponija Srem-Mačva", the Borrower and the Bank (each an "Existing Project Agreement" and together the "Existing Project Agreements");
WHEREAS, the Borrower intends to continue the implementation of the Project as described in Schedule 1;
WHEREAS, the Project will be carried out by the Borrower, through the Ministry of Environmental Protection ("MEP"), the Existing Project Entities and Javno preduzeće "Ingrin" (the "New Project Entity") (each a "Project Entity", and the Existing Project Entities and New Project Entity together referred to as the "Project Entities");
WHEREAS, the Borrower has requested assistance from the Bank in additional financing for the Project;
WHEREAS, the Borrower has entered into a loan from the French Development Agency (Agence Française de Développement) (the "Co-financier") on 17 December 2021 in the amount of EUR 75,000,000 to assist in financing of the Project, and now intends to contract a new loan in the amount of EUR 75,000,000 from the Co-financer 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 have entered into a project implementation agreement dated 17 December 2021 as amended on 13 June 2022 (the "Project Implementation Agreement") providing terms and conditions under which the Bank and the Co-financier will co-finance the Project, and now the Bank and Co-financer intend to enter into an amendment to the Project Implementation Agreement (the "Amendment No.2 to the Project Implementation Agreement") to stipulate the terms and conditions of the additional co-financing of the Project; and
WHEREAS, the Bank has agreed on the basis of, inter alia, the foregoing to make a new 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, the Existing Project Agreements, and in the project agreement to be entered into between the New Project Entity, the Borrower represented by the MEP and the Bank (the "New Project Agreement") (each a "Project Agreement" as defined in the Standard Terms and Conditions, and the Existing Project Agreements and the New Project Agreement together referred to as 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. |
"ClientNet" |
means the Bank’s online portal for the transmission of documents and information between the Bank and its clients, and any replacement website as the Bank may from time to time notify 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. |
"Project Implementation Unit" |
means the project implementation unit referred to in Section 3.02. |
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
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.
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 fourth 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 the date sixty (60) days after the date of this Agreement for the Loan.
(h) The rate of the Front-end Commission shall be 1% of the Loan.
(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;
(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 waste prevention program of the Republic of Serbia (2024-2029) by 31 December 2025; and
(l) 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 (including consultancy services) for the Project, the Borrower, through the MEP, shall, unless otherwise agreed with the Bank, duly maintain and at all times during execution of the Project operate the Project Implementation Unit with adequate resources and suitably qualified personnel, under terms of reference acceptable to the Bank.
ARTICLE IV
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; and
(b) the execution of the Amendment No.2 to the Project Implementation Agreement.
Section 5.02. Conditions Precedent to First Drawdown of the Loan
The following is specified as a condition to the first Drawdown of the Loan under this Agreement:
(a) the appointment of an independent engineer for the New Project Entity by the Borrower, acting through the MEP, to supervise works of the Project.
(b) the Environmental and Social Action Plans, Stakeholder Engagement Plans (as defined in each Project Agreement), Land Acquisition and Resettlement Framework (as defined in each Project Agreement), and Livelihood Restoration Plans (as defined in each Project Agreement) (if relevant) for the Project have been agreed; and
(c) the amendment of the Existing Project Agreements and the execution of the New Project Agreement for the Project by the duly authorised parties thereto.
Section 5.03. 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 New Project Entity by the head of legal department of the New Project Entity.
(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 New Project Agreement has 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 5.04. 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
(a) 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:
The Republic of Serbia
The Ministry of Finance
Kneza Milosa 20
11000, Belgrade
Serbia
Attention: Minister of Finance
Telephone: +381 11 765 2012
Email: kabinet@mfin.gov.rs
For EBRD:
European Bank for Reconstruction and Development
5 Bank Street
London E14 4BG
United Kingdom
Attention: Banking Services / Operation No. 52642
Telephone: +44 20 7338 6100
Email: bankingservices@ebrd.com
(b) The Bank may invite the Borrower to register to use ClientNet or another form of electronic communication and, if the Borrower and the Bank agree to use ClientNet or such other form of electronic communication, any notice, application or other communication from the Borrower to the Bank or from the Bank to the Borrower (other than any notice, application or other communication that is required by this Agreement to be in an original, certified or hard copy), may, subject to the terms and conditions of ClientNet or such other form of electronic communication, be given or made by posting such notice, application or other communication on ClientNet or sent in accordance with the terms agreed concerning such other form of electronic communication.
(c) Any notice, application or other communication delivered by hand, airmail or facsimile transmission or via ClientNet or another agreed form of electronic communication will only be effective when actually received (or made available) in readable form, provided that any notice, application or other communication that is received (or made available) after 5:00 p.m. in the place in which the party to whom the relevant notice, application or communication is sent has its address for the purpose of this Agreement shall be deemed only to become effective on the following day.
(d) Promptly following the execution of the Agreement, the Borrower, MEP, and the Project Entities shall indicate to the Bank the names, titles and email addresses of the persons designated as the initial contacts of the Borrower for purposes of any invitation the Bank may send to the Borrower regarding ClientNet in the form of the table below Please note that group email addresses cannot be registered to use ClientNet therefore the email addresses listed below should be for individual persons only.
Name |
Title |
E-mail address |
Language - English, Russian, French |
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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 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: First Deputy Prime Minister and Minister of Finance |
EUROPEAN BANK |
|
FOR RECONSTRUCTION AND DEVELOPMENT |
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By: |
______________________________ |
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Name: Charlotte Ruhe |
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Title: Managing Director, CSEE |
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, subject to such modifications thereof as the Bank and the Borrower may agree upon from time to time:
(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 ("Rančevo" d.o.o. is the Project Entity);
c. the regional waste management system in Duboko solid waste region ("Duboko" d.o.o. is the Project Entity);
d. the regional waste management system in Nova Varos solid waste region ("Banjica" d.o.o. is the Project Entity);
e. the regional waste management system in Pirot solid waste region ("Pirot" d.o.o. is the Project Entity);
f. the regional waste management system in Sremska Mitrovica solid waste region ("Srem-Mačva" d.o.o. is the Project Entity);
g. the regional waste management system in Indjija solid waste region ("Ingrin" d.o.o. is the Project Entity); and
h. the multi-regional primary sorting system within existing solid waste regions.
(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 Project is expected to be completed by 31 December 2028.
CATEGORIES AND DRAWDOWNS
1. The table attached to this Schedule sets forth the Category to be financed out of the proceeds of the Loan allocated to such Category, and the percentage of expenditures for items to be financed in such 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
Category |
Amount of the Loan (EUR) |
% of Expenditures to be financed |
Capital expenditures (goods, works, and services) (including contingencies), procurement support, works supervision, studies and designs, and technical assistance |
75,000,000 |
100% |
Total: |
75,000,000 |
|