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CONFORMED COPY 
LOAN NUMBER 4226 IN
Loan Agreement
(Coal Sector Rehabilitation Project)
between
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
and
COAL INDIA LTD.
Dated March 19, 1998
LOAN NUMBER 4226 IN 
LOAN AGREEMENT 
AGREEMENT, dated March 19, 1998, between INTERNATIONAL BANK FOR RECONSTRUCTION 
AND DEVELOPMENT (the Bank) and COAL INDIA LTD. (the Borrower). 
WHEREAS (A) India (the Guarantor) and the Borrower, having been satisfied as to 
the feasibility and priority of the Project described in Schedule 2 to this Agreement, 
have requested the Bank to assist in the financing of the Project; 
(B)
by an agreement (the Guarantee Agreement) of even date herewith between 
the Guarantor and the Bank, the Guarantor has agreed to guarantee the obligations of 
the Borrower in respect of the Loan and to undertake such other obligations as set 
forth in the Guarantee Agreement; 
(C)
the Guarantor has requested the International Development Association 
(the Association) to provide assistance towards financing Part C of the Project, which 
shall be carried out by the Guarantor, and by an agreement of even date herewith 
between the Guarantor and the Association (the Development Credit Agreement), the 
Association is agreeing to provide such assistance in an aggregate principal amount 
equivalent to one million five hundred thousand Special Drawing Rights \0b(SDR1,500,000) 
(the Credit); and
(D)
the Borrower intends to contract from the Export Import Bank of Japan 
(Eximbank) a loan (Eximbank Loan), in an amount equivalent to five hundred thirty 
million dollars ($530,000,000), to assist in financing the Project on terms and 
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conditions set forth in an agreement (Eximbank Loan Agreement) to be entered into 
between the Borrower and Eximbank; and  WHEREAS the Bank has agreed, on the basis, 
inter alia, of the foregoing, to extend the Loan to the Borrower upon the terms and 
conditions set forth in this Agreement, the Development Credit Agreement and the 
Guarantee Agreement;
NOW THEREFORE the parties hereto hereby agree as follows:
ARTICLE I
General Conditions; Definitions
Section 1.01. The “General Conditions Applicable to Loan and Guarantee 
Agreements for Single Currency Loans” of the Bank, dated May 30, 1995, with the 
modifications  set forth below (the General Conditions) constitute an integral part of 
this Agreement.
(a)
 Section 6.03 is modified to read:
“Section 6.03.  Cancellation by the Bank.  If (a) 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 days, or (b) at 
any time, the Bank determines, 
after consultation with the Borrower, that an amount 
of the Loan will not be required to 
finance the Project’s costs to be 
financed out of the proceeds of the Loan, or (c) at any 
time, the Bank determines, 
with respect to any contract to be financed out of the proceeds 
of the Loan, that 
corrupt or fraudulent practices were engaged in by representatives of the 
Borrower or of a beneficiary of the Loan during the procurement or the execution of 
such 
contract, without the Borrower having taken timely and appropriate action 
satisfactory to 
the Bank to remedy the situation, and establishes the amount of 
expenditures in respect of 
such contract which would otherwise have been 
eligible for financing out of the proceeds of  the Loan, or (d) at any time, the Bank 
determines that the procurement of any contract to be 
financed out of the 
proceeds of the Loan is inconsistent with the procedures set forth or 
referred to 
in the Loan Agreement and establishes the amount of expenditures in respect of 
such 
contract which would otherwise have been eligible for financing out of the proceeds of 
the Loan, or (e) after the Closing Date, an amount of the Loan shall remain 
unwithdrawn from 
the Loan Account, or (f) the Bank shall have received notice from 
the Guarantor pursuant to  Section 6.07 with respect to an amount of the Loan, the Bank 
may, by notice to the Borrower 
and the Guarantor, terminate the right of the 
Borrower to make withdrawals with respect to 
such amount.  Upon the giving of such 
notice, such amount of the Loan shall be canceled.” 
Section 1.02. Unless the context otherwise requires, the several terms defined 
in the General Conditions and in the Preamble to this Agreement have the respective 
meanings therein set forth and the following additional terms have the following 
meanings:
(a)
“BCCL” means Bharat Coking Coal Ltd., a subsidiary of the Borrower;
(b)
“CMPDI” means Coal Mining Planning and Design Institute;
(c)
“ECL” means Eastern Coalfields Ltd., a subsidiary of the Borrower;
(d)
“Environmental and Social Review Panel” means the panel of social and 
environmental experts appointed by the Borrower on April 11, 1997;
(e)
“ESMP” means the Coal Sector Environmental and Social Mitigation Project, 
Credit Number 2862-IN, being implemented pursuant to the ESMP Legal Agreements 
hereinafter defined;
(f)
“ESMP Legal Agreements” means the Development Credit Agreement dated June 
5, 1996, between India, acting by its President, and the Association and a Project 
Agreement of even date therewith between the Association and the Borrower;
(g)
“Fiscal Year” and “FY” means the fiscal year of the Borrower and the 
Subsidiaries beginning on April 1 of a Calendar Year and ending on March 31 of the 
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following year;
(h)
“Memoranda and Articles of Association” means, collectively, the 
Memorandum and Articles of Association of the Borrower and the Participating 
Subsidiaries, as amended to the date of this Agreement;
(i)
“Participating Subsidiaries” means, collectively, Central Coalfields 
Ltd., Mahanadi Coalfields Ltd., Northern Coalfields Ltd., South Eastern Coalfields 
Ltd., and Western Coalfields Ltd. and “Participating Subsidiary” means any of the 
Participating Subsidiaries;
(j)
“Project Mines” means all the mines listed in Schedule 7 to this 
Agreement and “Project Mine” means any such mine except, for purposes of Schedule 9 to 
this Agreement, where “Project Mines” and “Project Mine” have the meanings set forth 
in the ESMP Legal Agreements;
(k)
“Project Preparation Advance” means the project preparation advance 
granted by the Bank to the Guarantor pursuant to an exchange of letters dated January 
4, 1994 and February 4, 1994 between the Guarantor and the Bank; 
(l)
“rupees” or “Rs.” means the currency of the Guarantor;
(m)
“Special Account” means the account referred to in Section 2.02(b) of 
this Agreement;
(n)
“Subsidiaries” means, collectively, the Participating Subsidiaries, 
Bharat Coking Coal Ltd., Eastern Coalfields Ltd., Central Mining Planning and Design 
Institute, and any other corporation in which the Borrower on the date of this 
Agreement has or in the future may have majority ownership and “Subsidiary” means any 
one of the Subsidiaries;
(o)
“Subsidiary Loan” means a loan to be made by the Borrower to a 
Participating Subsidiary under a Subsidiary Loan Agreement; and
(p)
“Subsidiary Loan Agreements” means the agreements to be entered into 
between the Borrower and each of the Participating Subsidiaries pursuant to Section 
3.01(c) of this Agreement, as the same may be amended from time to time, and such term 
includes all schedules to the Subsidiary Loan Agreements.
ARTICLE II 
The Loan 
Section 2.01. The Bank agrees to lend to the Borrower, on the terms and 
conditions set forth or referred to in the Loan Agreement, an amount equal to five 
hundred thirty million dollars ($530,000,000). 
Section 2.02. (a) The amount of the Loan may be withdrawn from the Loan Account 
in accordance with the provisions of Schedule 1 to this Agreement for expenditures 
made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of 
goods and services required for Parts A and B of the Project described in Schedule 2 
to this Agreement and to be financed out of the proceeds of the Loan. 
(b) 
The Borrower may, for the purposes of the Project, open and maintain in 
dollars a special deposit account in the State Bank of India on terms and conditions 
satisfactory to the Bank, including appropriate protection against set-off, seizure or 
attachment.  Deposits into, and payments out of, the Special Account shall be made in 
accordance with the provisions of Schedule 6 to this Agreement.
(c)
Promptly after the Effective Date, the Bank shall, on behalf of the 
Borrower, withdraw from the Loan Account and pay to itself the amount required to 
repay the principal amount of the Project Preparation Advance withdrawn and 
outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn 
balance of the authorized amount of the Project Preparation Advance shall thereupon be 
canceled. 
Section 2.03. The Closing Date shall be June 30, 2003, or such later date as the 
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Bank shall establish. The Bank shall promptly notify the Borrower and the Guarantor of 
such later date. 
Section 2.04. The Borrower shall pay to the Bank a commitment charge at the rate 
of three-fourths of one percent (3/4 of 1%) per annum on the principal amount of the 
Loan not withdrawn from time to time. 
Section 2.05. (a) The Borrower shall pay interest on the principal amount of the 
Loan withdrawn and outstanding from time to time, at a rate for each Interest Period 
equal to LIBOR Base Rate plus LIBOR Total Spread.
(b)
For the purposes of this Section: 
(i)
“Interest Period” means the initial period from and including the 
date of this 
Agreement to, but excluding, the first Interest Payment Date 
occurring 
thereafter, and after the initial period, each period 
from and including an 
Interest Payment Date to, but excluding the 
next following Interest Payment 
Date. 
(ii)
“Interest Payment Date” means any date specified in Section 2.06 
of this 
Agreement. 
(iii)
“LIBOR Base Rate” means, for each Interest Period, the London 
interbank 
offered rate for six-month deposits in dollars for 
value the first day of such 
Interest Period (or, in the case of the 
initial Interest Period, for value the 
Interest Payment Date occurring 
on or next preceding the first day of such 
Interest Period), as 
reasonably determined by the Bank and expressed as a 
percentage 
per annum.
(iv)
“LIBOR Total Spread” means, for each Interest Period: (A) one half 
of one 
percent (1/2 of 1%); (B) minus (or plus) the weighted 
average margin, for such 
Interest Period, below (or above) the London 
interbank offered rates, or other 
reference rates, for six-month 
deposits, in respect of the Bank’s outstanding 
borrowings or 
portions thereof allocated by the Bank to fund single currency 
loans 
or portions thereof made by it that include the Loan; as reasonably 
determined by the Bank and expressed as a percentage per annum. 
(c)
The Bank shall notify the Guarantor and Borrower of LIBOR Base Rate and 
LIBOR Total Spread for each Interest Period, promptly upon the determination thereof. 
(d)
Whenever, in light of changes in market practice affecting the 
determination of the interest rates referred to in this Section 2.05, the Bank 
determines that it is in the interest of its borrowers as a whole and of the Bank to 
apply a basis for determining the interest rates applicable to the Loan other than as 
provided in said Section, the Bank may modify the basis for determining the interest 
rates applicable to the Loan upon not less than six (6) months’ notice to the Borrower 
of the new basis. The basis shall become effective on the expiry of the notice period 
unless the Borrower notifies the Bank during said period of its objection thereto, in 
which case said modification shall not apply to the Loan.
Section 2.06. Interest and other charges shall be payable May 15 and November 15 
in each year. 
Section 2.07. The Borrower shall repay the principal amount of the Loan in 
accordance with the amortization schedule set forth in Schedule 3 to this Agreement. 
ARTICLE III 
Execution of the Project
Section 3.01. (a) The Borrower declares its commitment to the objectives of the 
Project as set forth in Schedule 2 to this Agreement, and, to this end, without any 
limitation or restriction upon any of its other obligations under the Loan Agreement, 
shall: (i) carry out Parts A and B of the Project, and take all action required on its 
part to cause the Participating Subsidiaries to carry out such Parts of the Project, 
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with due diligence and efficiency and in accordance with the appropriate 
administrative, environmental, financial, social and technical standards and 
practices, and to enable the Participating Subsidiaries to perform their obligations 
under the Subsidiary Loan Agreements; (ii) provide, promptly as needed, the funds, 
facilities, services and other resources required for the purpose; and (iii) not take 
or permit to be taken any action which would prevent or interfere with such 
performance. 
(b)
Without limitation upon the provisions of paragraph (a) of this Section 
and, except as the Bank and the Borrower shall agree otherwise, the Borrower shall 
carry out Parts A and B of the Project, or cause Parts A and B of the Project to be 
carried out, in accordance with the Implementation Program set forth in Schedule 5 to 
this Agreement.
(c)
For the purpose of carrying out Parts A and B of the Project, the 
Borrower shall onlend the proceeds of the Loan to the Participating Subsidiaries under 
subsidiary loan agreements to be entered into between the Borrower and each of the 
Participating Subsidiaries, under the terms and conditions which shall have been 
approved by the Bank, and which shall include, without limitation, those set forth in 
Schedule 8 to this Agreement.
(d)
The Borrower shall exercise its rights under the Subsidiary Loan 
Agreements in such manner as to protect the interests of the Borrower and the Bank and 
to accomplish the purposes of the Loan, and, except as the Bank shall otherwise agree, 
the Borrower shall not assign, amend, abrogate or waive any of the Subsidiary Loan 
Agreements or any provision thereof.
Section 3.02. (a) Except as the Bank shall otherwise agree, procurement of 
goods, works and consultants’ services required for Parts A and B of the Project and 
to be financed out of the proceeds of the Loan shall be governed by the provisions of 
Schedule 4 to this Agreement.
(b)
Notwithstanding the above or anything provided in this Agreement, in the 
event that the Bank determines that there is a breach of any of the obligations set 
forth in Schedule 9 to this Agreement by any of the Participating Subsidiaries in 
respect of any one or more of the Project Mines, the Bank may decide not to finance 
from the proceeds of the Loan the portion of any contract for goods or works that was 
allocated to such Project Mine or Mines.  The Bank shall notify the Borrower of such 
decision after the Bank receives the bid evaluation report pursuant to paragraph 2(c) 
of Appendix 1 to the Guidelines.
Section 3.03.  For the purposes of Section 9.08 of the General Conditions and 
without limitation thereto, the Borrower shall: 
(a)
prepare, on the basis of guidelines acceptable to the Bank, and furnish 
to the Bank not later than six (6) months after the Closing Date or such later date as 
may be agreed for this purpose between the Borrower and the Bank, a plan for the 
future operation of the Project and designed to ensure the continued achievement of 
the Project’s objectives;  and 
(b)
afford the Bank a reasonable opportunity to exchange views with the 
Borrower on said plan. 
ARTICLE IV 
Financial Covenants 
Section 4.01. (a) The Borrower shall maintain, and cause each of the 
Participating Subsidiaries to maintain, records and accounts adequate to reflect in 
accordance with sound accounting practices its operations and financial condition.
(b)
The Borrower undertakes to do the following and to cause each of the 
Participating Subsidiaries to do the same:
(i)
have its records, accounts and financial statements (balance 
sheets, 
statements of income and expenses and related 
statements) and the records and 
accounts for the Special Account for 
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each fiscal year audited, in accordance 
with appropriate auditing 
principles consistently applied, by independent 
auditors 
acceptable to the Bank;
(ii)
furnish to the Bank as soon as available, but in any case not 
later than six 
months after the end of each such year: (A) certified 
copies of its financial 
statements for such year as so audited; and 
(B) the report of such audit by 
said auditors, of such scope and in such 
detail as the Bank shall have 
reasonably requested; and
(iii)
furnish to the Bank such other information concerning said 
records, accounts 
and financial statements as well as the audit thereof 
as the Bank shall from 
time to time reasonably request.
(c)
For all expenditures with respect to which withdrawals from the Loan 
Account were made on the basis of statements of expenditure, the Borrower shall:
(i)
maintain, in accordance with paragraph (a) of this Section, 
records and 
accounts reflecting such expenditures;
(ii)
retain, until at least one year after the Bank has received the 
audit report 
for the fiscal year in which the last withdrawal from the 
Loan Account was 
made, all records (contracts, orders, 
invoices, bills, receipts and other 
documents) evidencing such 
expenditures;
(iii)
enable the Bank’s representatives to examine such records; and
(iv)
ensure that such records and accounts are included in the annual 
audit 
referred to in paragraph (b) of this Section and that the 
report of such audit 
contains a separate opinion by said auditors 
as to whether the statements of 
expenditure submitted during such fiscal 
year, together with the procedures 
and internal controls involved in 
their preparation, can be relied upon to 
support the related 
withdrawals.
Section 4.02. (a)  Except as the Bank shall otherwise agree:
(i)
the Borrower shall cause BCCL and ECL not to incur any debt, if 
after the 
incurrence of such debt the ratio of debt to total 
capitalization shall be: 
(A)
greater than 70% during the period from FY 1998 through FY 
2000; and 
(B)
greater than 60% after FY 2000; and
(ii)
the Borrower shall not incur, and shall cause each Subsidiary 
other than BCCL 
and ECL, not to incur any debt, if after the 
incurrence of such debt the ratio 
of debt to total capitalization 
shall be greater than 60%.
(b)
For purposes of this Section:
(i)
The term “debt” means any indebtedness of the Borrower or the 
Subsidiary 
concerned maturing by its terms more than one year 
after the date on which it 
is originally incurred and includes 
redeemable shares with a fixed rate of 
return. 
(ii)
Debt shall be deemed to be incurred: (A) under a loan contract or 
agreement or 
other instrument providing for such debt or for the 
modification of its terms 
of payment on the date of such contract, 
agreement or instrument; and (B) 
under a guarantee agreement, on 
the date the agreement providing for such 
guarantee has been 
entered into.
(iii)
The term “equity” means the sum of the total unimpaired paid-up 
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capital, 
retained earnings and reserves of the Borrower or the 
Subsidiary concerned not 
allocated to cover specific liabilities.
(iv)
The term “total capitalization” means debt plus equity.
(v)
Whenever for the purposes of this Section it shall be necessary to 
value, in 
terms of the currency of the Guarantor, debt payable in 
another currency, such 
valuation shall be made on the basis of the 
prevailing lawful rate of exchange 
at which such other currency is, 
at the time of such valuation, obtainable for 
the purposes of servicing 
such debt, or, in the absence of such rate, on the 
basis of a rate of 
exchange acceptable to the Bank.
Section 4.03. (a) Except as the Bank shall otherwise agree:
(i)
the Borrower shall cause BCCL and ECL not to incur any debt, 
unless the net 
revenues of BCCL and ECL for the fiscal year 
immediately preceding the date of 
such incurrence or for a later 
twelve-month period ended prior to the date of 
such incurrence, 
whichever is the greater, shall from FY 2001 be at least 1.3 
times 
the estimated maximum debt service requirements of BCCL and ECL for any 
succeeding fiscal year on all debt of BCCL and ECL, including the debt to be 
incurred;
(ii)
the Borrower shall not incur any debt, and shall cause each 
Subsidiary other 
than BCCL, ECL and CMPDI not to incur any debt, 
unless the net revenues for 
the Borrower or the Subsidiary concerned 
for the fiscal year immediately 
preceding the date of such 
incurrence or for a later twelve-month period ended 
prior to the date of 
such incurrence, whichever is the greater, shall be at 
least 1.3 
times the estimated maximum debt service requirements of the 
Borrower or the Subsidiary concerned for any succeeding fiscal year on all 
debt of the Borrower and the Subsidiary concerned, including the debt to 
be incurred;
(b) 
For the purposes of this Section:
(i)
Debt shall be deemed to be incurred: (A)  under a loan contract or 
agreement 
or other instrument providing for such debt or for the 
modification of its 
terms of payment on the date of such 
contract, agreement or instrument; and 
(B) under a guarantee agreement, 
on the date the agreement providing for such 
guarantee has been entered 
into.
(iii)
The term “net revenues” means the difference between: (A) the sum 
of 
revenues from all sources related to operations adjusted to 
take account of 
the Borrower’s prices in effect at the time of the 
incurrence of debt even 
though they were not in effect during 
the twelve-month period to which such 
revenues relate and net 
non-operating income; and (B) the sum of all expenses 
related to 
operations including administration, maintenance, taxes and 
payments in lieu of taxes, but excluding provision for depreciation, other 
non-cash operating charges and interest and other charges on debt.
(iv)
The term “net non-operating income” means the difference between: 
(A) revenues 
from all sources other than those related to operations; and 
(B) expenses, 
including rates and payments in lieu of taxes, 
incurred in the generation of 
revenues in (A) above.
(v)
Whenever for the purposes of this Section it shall be necessary to 
value, in 
terms of the currency of the Guarantor, debt payable in 
another currency, such 
valuation shall be made on the basis of the 
prevailing lawful rate of exchange 
at which such other currency is, 
at the time of such valuation, obtainable for 
the purposes of servicing 
such debt, or, in the absence of such rate, on the 
basis of a rate of 
exchange acceptable to the Bank.
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ARTICLE V 
Management and Operations of the Borrower 
and the Participating Subsidiaries
Section 5.01. The Borrower shall, and shall cause each of the Participating 
Subsidiaries to: 
(a)
carry on its operations and conduct its affairs in accordance with sound 
administrative, environmental, financial, social and technical practices under the 
supervision of qualified and experienced management assisted by competent staff in 
adequate numbers; 
(b)
at all times operate and maintain its plants, machinery, equipment and 
other property, and from time to time, promptly as needed, make all necessary repairs 
and renewals thereof, all in accordance with sound engineering, financial and 
technical practices; 
(c)
take out and maintain with responsible insurers, or make other provision 
satisfactory to the Bank for, insurance against such risks and in such amounts as 
shall be consistent with appropriate practice; and  
(d)
inform the Bank prior to making any major changes in its organizational 
structure or in the scope of activities handled by it, which would substantially 
affect the Project objectives or implementation.
Section 5.02.  Except as the Bank shall otherwise agree, the Borrower shall not, 
and shall cause each of the Participating Subsidiaries not to, sell, lease or transfer 
or otherwise dispose of any of its properties or assets which shall be required for 
the efficient carrying out of its businesses and undertakings, including the Project. 
Section 5.03.  The Borrower shall cause the Participating Subsidiaries to 
observe and perform the obligations of the Borrower under this Agreement to the extent 
to which the same may be applicable thereto as though such obligations were binding 
upon each such subsidiary.
ARTICLE VI 
Remedies of the Bank
Section 6.01. Pursuant to Section 6.02 (l) of the General Conditions, the 
following additional events are specified:
(a)
As a result of events which have occurred after the date of the Loan 
Agreement, an extraordinary situation shall have arisen which shall make it improbable 
that any of the Participating Subsidiaries will be able to perform their obligations 
under the Subsidiary Loan Agreements.
(b)
Any of the Memoranda and Articles of Association shall have been amended, 
suspended, abrogated, repealed or waived so as to affect materially and adversely the 
operations and financial condition of the Borrower or the Participating Subsidiary or 
its ability to carry out the Project or to perform any of its obligations under this 
Agreement or the Subsidiary Loan Agreement. 
(c)
The Guarantor, or any other authority having jurisdiction, shall have 
taken any action for the dissolution or disestablishment of the Borrower or any of the 
Participating Subsidiaries or for the suspension of its operations. 
(d)
Any of the Participating Subsidiaries shall have failed to perform any of 
their respective obligations under the Subsidiary Loan Agreements.
(e)
The Borrower shall have failed to perform any of the obligations set 
forth in Schedule 9 to this Agreement.
(f)
The Borrower or the Guarantor shall have failed to perform any of the 
obligations set forth in the ESMP Legal Agreements.
(g)
The Guarantor shall have failed to perform any of the obligations set 
Page  9
forth in the Development Credit Agreement.
(h)
(i)
Subject to subparagraph (ii) of this paragraph:
(A)
the right of the Borrower to withdraw the proceeds of the 
Eximbank Loan 
shall have been suspended, canceled or 
terminated in whole or in part, 
pursuant to the terms of the 
Eximbank Loan Agreement, or
(B)
the Eximbank Loan shall have become due and payable prior to 
the agreed 
maturity thereof.
(ii)
Subparagraph (i) of this paragraph shall not apply if the Borrower 
establishes 
to the satisfaction of the Bank that: (A) such suspension, 
cancellation, 
termination or prematuring is not caused by 
the failure of the Borrower to 
perform any of its obligations 
under the Eximbank Loan Agreement; and (B) 
adequate funds for 
the Project are available to the Borrower from other 
sources on 
terms and conditions consistent with the obligations of the 
Borrower under this Agreement.
Section 6.02.  Pursuant to Section 7.01(h) of the General Conditions, the 
following additional events are specified:
(a)
the events specified in paragraphs (a) through (g) of Section 6.01 of 
this Agreement shall occur; and
(b)
the event specified in paragraph (h)(i) of Section 6.01 of this Agreement 
shall occur, subject to the proviso in paragraph (h)(ii) of that Section.
ARTICLE VII 
Effective Date; Termination
Section 7.01. The following events are specified as additional conditions to the 
effectiveness of the Loan Agreement within the meaning of Section 12.01(c) of the 
General Conditions: 
(a)
the Subsidiary Loan Agreements have been executed on behalf of the 
Borrower and the Participating Subsidiaries; 
(b)
the Eximbank Loan Agreement has been executed and delivered and all 
conditions precedent to its effectiveness or to the right of the Borrower to make 
withdrawals thereunder, except only the effectiveness of the Loan Agreement, have been 
fulfilled;
(c)
the Development Credit Agreement has been executed and delivered and all 
conditions precedent to its effectiveness or to the right of the Guarantor to make 
withdrawals thereunder, except only the effectiveness of the Loan Agreement, have been 
fulfilled; and 
(d)
the Borrower is, on the date on which this Loan is declared effective, in 
compliance with: (i) all obligations under the ESMP Legal Agreements; and (ii) all 
obligations set forth in Schedule 9 to this Agreement that are due on such date.
Section 7.02. The following are specified as an additional matter, within the 
meaning of Section 12.02 (c) of the General Conditions, to be included in the opinion 
or opinions to be furnished to the Bank, namely, that the Subsidiary Loan Agreements 
have been duly authorized or ratified by the Borrower and the Participating 
Subsidiaries and are legally binding upon the Borrower and the Participating 
Subsidiaries in accordance with their terms.
Section 7.03. The date ninety (90) days after the date of this Agreement is 
hereby specified for the purposes of Section 12.04 of the General Conditions.
ARTICLE VIII 
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Representative of the Borrower; Addresses 
Section 8.01. The Chairman and Managing Director of the Borrower or such other 
person or persons as the Chairman and Managing Director shall designate in writing is 
designated as representative of the Borrower for the purposes of Section 11.03 of the 
General Conditions.
Section 8.02. The following addresses are specified for the purposes of Section 
11.01 of the General Conditions:
For the Borrower:
Coal India Ltd.
Coal Bhawan
10 Netaji Subhas Road
Calcutta 700001
India
Cable address: 
Telex:
COAL INDIA
021 7180 (CIL-IN)
Calcutta, India
For the Bank:
International Bank for
  Reconstruction and Development
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address:
Telex:
INTBAFRAD
248423 (MCI) or
Washington, D.C.
 64145 (MCI)
IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized 
representatives, have caused this Agreement to be signed in their respective names in 
the District of Columbia, United States of America, as of the day and year first above 
written.
INTERNATIONAL BANK FOR
  RECONSTRUCTION AND DEVELOPMENT
By /s/ Robert Drysdale
Acting Regional Vice President 
South Asia
COAL INDIA LTD.
By /s/ Sudhakar Rao
Authorized Representative
SCHEDULE 1 
Withdrawal of the Proceeds of the Loan
1. 
The table below sets forth the Categories of items to be financed out of the 
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proceeds of the Loan, the allocation of the amounts of the Loan and to each Category 
and the percentage of expenditures for items so to be financed in each Category:
    Amount of the
     % of
   Loan Allocated
Expenditures
Category
(Expressed in Dollars)
to be Financed
(1)
Turnkey works
25,500,000
90%
(2)
Equipment
      446,600,000
100% of foreign
and materials
expenditures, 100%
of local expenditures
(ex-factory cost) and 
80% of local 
expendi-
tures 
for other items
procured locally
(3)
Consultants’
 5,000,000
100% 
services for Part B
of the Project
 (4)
Refunding of
 2,000,000
Amounts due pursuant
Project Preparation
to Section 2.02 (c) of 
Advance
this Agreement
(5)
Unallocated
50,900,000
___________
TOTAL
      530,000,000
      ===========
2.
For the purposes of this Schedule: 
(a)
the term “foreign expenditures” means expenditures in the currency of any 
country other than that of the Guarantor for goods or services supplied from the 
territory of any country other than that of the Guarantor; 
(b)
the term “local expenditures” means expenditures in the currency of the 
Guarantor or for goods or services supplied from the territory of the Guarantor; and 
(c)
the term “turnkey works” means works carried out under a contract for the 
design, supply of equipment and construction of four coal handling plants. 
3.
Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be 
made in respect of payments made for expenditures prior to the date of this Agreement.
4.
The Bank may require withdrawals from the Loan Account to be made on the basis 
of statements of expenditure for expenditures for: (a) equipment and materials under 
contracts costing less than $5,000,000 equivalent each; (b) services under contracts 
costing less than $200,000 equivalent each for employment of consulting firms; and (c) 
services under contracts costing less than $50,000 equivalent each for employment of 
individual consultants, all under such terms and conditions as the Bank shall specify 
by notice to the Borrower.
SCHEDULE 2 
Description of the Project 
The objectives of the Project are to support the Guarantor’s market-oriented 
reforms in the coal sector and to provide financial and technical support for the 
Borrower’s efforts to make itself commercially viable and self-sustaining.
The Project consists of the following parts, subject to such modifications 
thereof as the Guarantor, the Borrower, Bank and/or Association, as the case may be, 
may agree upon from time to time to achieve such objectives:
Page  12
Part A:
Improving and Maintaining the Commercial Viability of Project Mines
Increasing and sustaining productivity in the Project Mines through investments 
in: (i) mining and telecommunications equipment; and (ii) mining surface 
infrastructures, such as coal handling plants and roads and water supply systems.
Part B:
Institutional Development
1.
The following parts of the Project will be carried out through the provision of 
technical assistance:
(a)
Commercializing the Borrower’s coal sales through the development and 
improvement of the Borrower’s coal supply contracts;
(b)
Enhancing the Borrower’s capability to prepare and analyze financial 
models as part of the Borrower’s ongoing commercialization and restructuring process 
and to implement the restructuring process;
(c)
Improving the design practices of the Central Mining Planning and Design 
Institute (“CMPDI”), a wholly-owned subsidiary of the Borrower, by reviewing such 
practices and developing a time-bound improvement program;
(d)
Improving the Subsidiaries’ equipment utilization ratios;
(e)
Developing and enhancing the Borrower’s procurement capabilities;
(f)
Supervising the implementation of the Project in the Project Mines;
(g)
Improving the quality of coal produced by conducting 4 pilot projects 
under different mining conditions to: (i) test the selective mining method;\0b(ii) 
determine the target sites for use of such method; and (iii) identify and provide the 
equipment required by such method; and
(h)
Developing and improving the skills of the Borrower’s managers in 
commercial mining operations through the provision of training.
Part C:
Improving the Coal Industry’s Regulatory Framework
Improving the coal industry’s regulatory framework and bringing it in line with 
international best practices through a study on the rules and regulations governing 
such industry and implementing the recommendations of such study.
* * *
The Project is expected to be completed by December 31, 2002.
SCHEDULE 3
Amortization Schedule
Date Payment Due
(Expressed in Dollars)*
May 15, 2003
11,085,000 
November 15, 2003
11,420,000 
May 15, 2004
11,770,000 
November 15, 2004
12,125,000 
May 15, 2005
12,490,000 
November 15, 2005
12,870,000 
May 15, 2006
13,260,000 
November 15, 2006
13,660,000 
May 15, 2007
14,075,000 
November 15, 2007
14,505,000 
May 15, 2008
14,940,000 
November 15, 2008
15,395,000 
May 15, 2009
15,860,000 
November 15, 2009
16,340,000 
May 15, 2010
16,835,000 
Page  13
November 15, 2010
17,350,000 
May 15, 2011
17,875,000 
November 15, 2011
18,415,000 
May 15, 2012
18,975,000 
November 15, 2012
19,550,000 
May 15, 2013
20,140,000 
November 15, 2013
20,750,000 
May 15, 2014
21,380,000 
November 15, 2014
22,025,000 
May 15, 2015
22,695,000 
November 15, 2015
23,380,000 
May 15, 2016
24,090,000 
November 15, 2016
24,820,000 
May 15, 2017
25,570,000 
November 15, 2017
26,355,000
________________________
*
The figures in this column represent the amount in dollar to be repaid, except 
as provided 
in Section 4.04 (d) of the General Conditions.
SCHEDULE 4 
Procurement and Consultants’ Services 
Section I.
Procurement of Goods and Works
Part A:
General 
Goods and works shall be procured in accordance with the provisions of Section I 
of the “Guidelines for Procurement under IBRD Loans and IDA Credits” published by the 
Bank in January 1995 and revised in January and August 1996 (the Guidelines) and the 
following provisions of this Section, as applicable.
Part B:
International Competitive Bidding 
1.
(a)
Goods and works shall be procured under contracts awarded in accordance 
with the provisions of Section II of the Guidelines and paragraph 5 of Appendix 1 
thereto.
(b)
The procurement for four coal handling plants under Part A of the Project 
shall be carried out on the basis of turnkey contracts, comprising the design, supply 
of equipment and construction of such plants. 
2.
The following provisions shall apply to goods and/or works to be procured under 
contracts awarded in accordance with the provisions of paragraph 1 of this Part B.
(a)
Goods: Preference for domestically manufactured goods
and domestic contractors
The provisions of paragraphs 2.54 and 2.55 of the Guidelines and Appendix 2 
thereto shall apply to goods manufactured in the territory of the Guarantor.
(b)
Works: Dispute Review Board
Each contract for works estimated to cost $50,000,000 equivalent or more shall 
include the provisions for a dispute review board set forth in the standard bidding 
documents for works referred to in paragraph 2.12 of the Guidelines.
(c)
Notification and Advertising
The invitation to prequalify or bid for each contract estimated to cost 
$10,000,000 equivalent or more shall be advertised in accordance with the procedures 
applicable to large contracts under paragraph 2.8 of the Guidelines.
Part C:
Review by the Bank of Procurement Decisions
Page  14
1.
Procurement Planning
Prior to the issuance of any invitations to prequalify for bidding or to bid for 
contracts, the proposed procurement plan for the Project shall be furnished to the 
Bank for its review and approval, in accordance with the provisions of paragraph 1 of 
Appendix 1 to the Guidelines. Procurement of all goods and works shall be undertaken 
in accordance with such procurement plan as shall have been approved by the Bank, and 
with the provisions of said paragraph 1.
2.
Prior Review
With respect to: (i) each contract for equipment and material estimated to cost 
the equivalent of $5,000,000 or more; and (ii) all turnkey works contracts, the 
procedures set forth in paragraphs 2 and 3 of Appendix 1 to the Guidelines shall 
apply. 3.
Post Review
With respect to each contract not governed by paragraph 2 of this Part, the 
procedures set forth in paragraph 4 of Appendix 1 to the Guidelines shall apply. 
Section II.
Employment of Consultants
Part A:  
General
Consultants’ services shall be procured in accordance with the provisions of the 
“Guidelines: Selection and Employment of Consultants by World Bank Borrowers” 
published by the Bank in January 1997 (the Consultant Guidelines) and the following 
provision of Section II of this Schedule.
Part B:
Quality- and Cost-based Selection  
1.
Consultants’ services shall be procured under contracts awarded in accordance 
with the provisions of Section II of the Consultant Guidelines, paragraph 3 of 
Appendix 1 thereto, Appendix 2 thereto, and the provisions of paragraphs 3.13 through 
3.18 thereof applicable to quality- and cost-based selection consultants.  
Part C:
Review by the Bank of Procurement Decisions 
1.
Prior Reviews
With respect to all contracts, the procedures set forth in paragraphs 1, 2 
(other than the third subparagraph of paragraph 2(a) and 5 of Appendix 1 to the 
Consultant Guidelines) shall apply. 
SCHEDULE 5 
Implementation Program 
1.
The Borrower shall not, and shall cause each Subsidiary not to, merge any of its 
Subsidiaries without the consent of the Bank.
2.
Effective April 1, 1997, the Borrower shall, unless otherwise agreed with the 
Bank:
(a)
conduct all financial transactions between itself and the Subsidiaries, 
and cause the Subsidiaries to conduct all financial transactions among themselves, 
based on written contracts;
(b)
limit all financial transactions between the Borrower and the 
Subsidiaries, and cause all financial transactions among the Subsidiaries to be 
limited, to those relating  to equity acquisition, loans and commitment, guarantee and 
service charges, which may be levied by the Borrower on the Subsidiaries and other 
incidental transactions, which are paid within a twelve-month period;
(c)
not lend, or otherwise make available to any of the Subsidiaries other 
than BCCL or ECL, funds obtained by the Borrower from external sources: (i) for a time 
period different from that; and (ii) on terms more favorable than those, on which such 
funds shall have been so obtained by the Borrower; and
Page  15
(d)
limit its issuance of corporate guarantees, if any, to profit-making 
Subsidiaries.
3.
The Borrower shall: 
(a)
maintain policies and procedures adequate to enable it to monitor and 
evaluate on an ongoing basis, in accordance with indicators acceptable to the Bank, 
the carrying out of the Project and the achievement of the objectives thereof; 
(b)
prepare, under terms of reference satisfactory to the Bank, and furnish 
to the Bank, on or about March 31, 2000, a report integrating the results of the 
monitoring and evaluation activities performed pursuant to paragraph 3(a) of this 
Schedule, on the progress achieved in the carrying out of the Project during the 
period preceding the date of said report and setting out the measures recommended to 
ensure the efficient carrying out of the Project and the achievement of the objectives 
thereof during the period following such date; and
(c)
review with the Bank, by June 30, 2000, or such later date as the Bank 
shall request, the report referred to in paragraph 3(b) of this Schedule, and, 
thereafter, take all measures required to ensure the efficient completion of the 
Project and the achievement of the objectives thereof, based on the conclusions and 
recommendations of the said report and the Bank views on the matter.
SCHEDULE 6 
Special Account
1.
For the purposes of this Schedule: 
(a)
the term “eligible Categories” means Categories (1), (2) and (3) set 
forth in the table in paragraph 1 of Schedule 1 to this Agreement; 
(b)
the term “eligible expenditures” means expenditures in respect of the 
reasonable cost of goods and services required for the Project and to be financed out 
of the proceeds of the Loan allocated from time to time to the eligible Categories in 
accordance with the provisions of Schedule 1 to this Agreement; and 
(c)
the term “Authorized Allocation” means an amount equivalent to 
$25,000,000 to be withdrawn from the Loan Account and deposited into the Special 
Account pursuant to paragraph 3 (a) of this Schedule, provided, however, that unless 
the Bank shall otherwise agree, the Authorized Allocation shall be limited to an 
amount equivalent to $15,000,000, the aggregate amount of withdrawals from the Loan 
Account plus the total amount of all outstanding special commitments entered into by 
the Bank pursuant to Section 5.02 of the General Conditions shall be equal to or 
exceed the equivalent of $50,000,000.
2.
Payments out of the Special Account shall be made exclusively for eligible 
expenditures in accordance with the provisions of this Schedule.
3.
After the Bank has received evidence satisfactory to it that the Special Account 
has been duly opened, withdrawals of the Authorized Allocation and subsequent 
withdrawals to replenish the Special Account shall be made as follows: 
(a)
For withdrawals of the Authorized Allocation, the Borrower shall furnish 
to the Bank a request or requests for deposit into the Special Account of an amount or 
amounts which do not exceed the aggregate amount of the Authorized Allocation. On the 
basis of such request or requests, the Bank shall, on behalf of the Borrower, withdraw 
from the Loan Account and deposit into the Special Account such amount or amounts as 
the Borrower shall have requested. 
(b)
(i)
For replenishment of the Special Account, the Borrower shall 
furnish to the 
Bank requests for deposits into the Special Account 
at such intervals as the 
Bank shall specify.
(ii)
Prior to or at the time of each such request, the Borrower shall 
furnish to 
the Bank the documents and other evidence required pursuant 
Page  16
to para\1fgraph  4 
of this Schedule for the payment or payments in 
respect of which replenishment 
is requested. On the basis of each such 
request, the Bank shall, on behalf of 
the Borrower, withdraw from the 
Loan Account and deposit into the Special 
Account such amount 
as the Borrower shall have requested and as shall have 
been 
shown by said documents and other evidence to have been paid out of the 
Special Account for eligible expenditures. All such deposits shall be 
withdrawn by the Bank from the Loan Account under the respective eligible 
Categories, and in the respective equivalent amounts, as shall 
have been 
justified by said documents and other evidence. 
4.
For each payment made by the Borrower out of the Special Account, the Borrower 
shall, at such time as the Bank shall reasonably request, furnish to the Bank such 
documents and other evidence showing that such payment was made exclusively for 
eligible expenditures.
5.
Notwithstanding the provisions of paragraph 3 of this Schedule, the Bank shall 
not be required to make further deposits into the Special Account: 
(a)
if, at any time, the Bank shall have determined that all further 
withdrawals should be made by the Borrower directly from the Loan Account in 
accordance with the provisions of Article V of the General Conditions and paragraph 
(a) of Section 2.02 of this Agreement; 
(b)
if the Borrower shall have failed to furnish to the Bank, within the 
period of time specified in Section 4.01 (b) (ii) of this Agreement, any of the audit 
reports required to be furnished to the Bank pursuant to said Section in respect of 
the audit of the records and accounts for the Special Account; 
(c)
if, at any time, the Bank shall have notified the Borrower of its 
intention to suspend in whole or in part the right of the Borrower to make withdrawals 
from the Loan Account pursuant to the provisions of Section 6.02 of the General 
Conditions; or
(d)
once the total unwithdrawn amount of the Loan allocated to the eligible 
Categories, minus the total amount of all outstanding special commitments entered into 
by the Bank pursuant to Section 5.02 of the General Conditions with respect to the 
Project, shall equal the equivalent of twice the amount of the Authorized Allocation. 
Thereafter, withdrawal from the Loan Account of the remaining unwithdrawn amount of 
the Loan allocated to the eligible Categories shall follow such procedures as the Bank 
shall specify by notice to the Borrower.  Such further withdrawals shall be made only 
after and to the extent that the Bank shall have been satisfied that all such amounts 
remaining on deposit in the Special Account as of the date of such notice will be 
utilized in making payments for eligible expenditures.
6.
(a)
If the Bank shall have determined at any time that any payment out of the 
Special Account: (i) was made for an expenditure or in an amount not eligible pursuant 
to paragraph 2 of this Schedule; or (ii) was not justified by the evidence furnished 
to the Bank, the Borrower shall, promptly upon notice from the Bank: (A) provide such 
additional evidence as the Bank may request; or (B) deposit into the Special Account 
(or, if the Bank shall so request, refund to the Bank) an amount equal to the amount 
of such payment or the portion thereof not so eligible or justified. Unless the Bank 
shall otherwise agree, no further deposit by the Bank into the Special Account shall 
be made until the Borrower has provided such evidence or made such deposit or refund, 
as the case may be. 
(b)
If the Bank shall have determined at any time that any amount outstanding 
in the Special Account will not be required to cover further payments for eligible 
expenditures, the Borrower shall, promptly upon notice from the Bank, refund to the 
Bank such outstanding amount.
(c)
The Borrower may, upon notice to the Bank, refund to the Bank all or any 
portion of the funds on deposit in the Special Account. 
(d)
Refunds to the Bank made pursuant to paragraphs 6 (a), (b) and (c) of 
this Schedule shall be credited to the Loan Account for subsequent withdrawal or for 
cancellation in accordance with the relevant provisions of this Agreement, including 
Page  17
the General Conditions.
SCHEDULE 7
List of Project Mines 
Ananta 
Belpahar 
Bharatpur 
Bina 
Dhanpuri 
Dipkia 
Dudhichua 
Durgapur 
Gevra 
Jagannath 
Jayant 
Jhingurdah 
KD Hesalong 
Kusmunda 
Lakhanpur 
Manikpur 
Nigahi 
Niljai 
Padmapur 
Parej East 
Rajrappa 
Samaleswari 
Sasti 
Umrer
SCHEDULE 8
Principal Terms and Conditions of the 
Subsidiary Loan Agreements 
A.
Terms
1.
The principal amount of each Subsidiary Loan made by the Borrower to a 
Participating Subsidiary:
(a)
shall be equal to the amount of Dollars withdrawn on account of a 
Participating Subsidiary’s respective part of the Project; and
(b)
shall be repaid in the currency of the Borrower in amounts equivalent (as 
of the date or respective dates of repayment) to the amount in dollars so made 
available.  2.
The Participating Subsidiary concerned shall repay such principal 
amount over a period of twenty (20) years, inclusive of  the grace period of five (5).
3.
The Borrower shall charge: (i) interest on such principal amount, withdrawn and 
outstanding from time to time at a rate equal to the rate of interest applicable from 
time to time under the Loan pursuant to Section 2.05 of this Agreement; and (ii) a 
guarantee fee and service charge. 
4.
The Borrower shall charge a commitment charge on such principal amount, not 
withdrawn from time to time at the rate set forth in Section 2.04 of this Agreement. 
B.
Conditions
The Subsidiary Loan Agreements shall include the following provisions whereby:
1.
Each Participating Subsidiary shall undertake to:
(a)
carry out its respective part of the Project with due diligence and 
efficiency and in accordance with the appropriate administrative, environmental, 
financial, social and technical standards and practices; and
Page  18
(b)
without limitation on the foregoing take all measures necessary to ensure 
that its respective part of the Project shall be implemented in accordance with the 
Implementation Program set forth in Schedule 5 to this Agreement.
2.
Each Participating Subsidiary shall agree that: (a) all procurement of goods, 
works and services to be financed out of the Subsidiary Loan shall be carried out by 
the Borrower on behalf of the Participating Subsidiaries and in accordance with the 
provisions of Schedule 4 to this Agreement; and (b) such goods, works and services 
shall be utilized exclusively in the carrying out of its respective part of the 
Project.
3.
Each Participating Subsidiary shall undertake to enable the Borrower and the 
Bank to inspect such goods, works and services and the sites included in its 
respective parts of the Project, the operation thereof, and any relevant records and 
documents. 
4.
Each Participating Subsidiary shall undertake to take out and maintain with 
responsible insurers such insurance, against such risks and in such amounts, as shall 
be consistent with sound business practice, including, without limitation, such 
insurance to cover hazards incident to the acquisition, transportation and delivery of 
goods financed out of the proceeds of the Subsidiary Loan to the place of use or 
installation, any indemnity thereunder to be made payable in a currency freely usable 
by the Borrower to replace or repair such goods. 
5.
Each Participating Subsidiary shall undertake to comply with the obligations set 
forth in Sections 4.01, 4.02 and 4.03 and Sections 5.01 and 5.02 of this Agreement.
SCHEDULE 9 
Obligations of the Borrower Relating to 
Environmental and Social Mitigation
1.
The Borrower shall, in relation to each of the Project Mines, carry out the 
following or cause the following to be carried out unless otherwise agreed with the 
Bank:
(a)
By: (i) March 31, 1998, have in place in the Project Mines and begin 
operation of seven (7) mobile sprinklers; (ii) March 31, 1999, have in place and begin 
operation of an additional twenty (20) mobile sprinklers; and (iii) March 31, 2000, 
have in place and begin operation of a further additional twenty (20) mobile 
sprinklers.
(b)
By September 1, 1998, install and begin operation of dust extractors in 
existing drills.
(c)
By December 1, 1998, install or refurbish and begin operation of 
sedimentation ponds.
(d)
By December 1, 1998, install or refurbish and begin operation of mine 
discharge treatment plants.
(e)
By January 1, 1998, submit to the Bank the results of the ongoing study 
on the disposal of oil/grease and water from workshop effluent, and by September 1, 
1998, complete implementation of the guidelines recommended in such study.
(f)
By June 30, 1998, submit to the Bank the results of the ongoing study on 
bio-contamination of subsoil water from domestic effluent, and by June 30, 1999, 
complete implementation of the recommendations, if any, of such study.
(g)
Carry out tree planting in the Project Mines in accordance with the 
following schedule:  (A) 670,000 trees by June 30, 1998; (B) an additional 670,000 
trees by June 30, 1999; (C) an additional 670,000 trees by June 30, 2000; and (D) an 
additional 670,000 trees by June 30, 2001. 
(h)
In the event that the ongoing study on overburden dump safety and 
stability makes recommendations, begin implementation of such study recommendations by 
June 30, 1998, and complete the implementation by March 31, 2001.
Page  19
2.
The Borrower shall, in relation to the Indigenous People’s Development Plans 
(“IPDP”) defined in the ESMP, carry out the following or cause the following to be 
carried out unless otherwise agreed with the Bank:
(a)
Submit to the Bank by October 31st each year, 24 detailed mine-specific 
annual IPDP implementation plans, the first set of 24 plans for calendar year 1998 to 
be submitted by March 31, 1998. 
(b)
For each of the 24 mines with villages targeted for IPDP activities (as 
defined in the Borrower’s Community Development Plan dated September 1995), subject to 
paragraph (d) below, begin IPDP activities that are agreed with concerned villages:
(i)
by September 30, 1998, in the number of villages specified below, 
depending on 
the number of targeted villages at each mine site:
5 or fewer targeted villagesat least 1 village
(ii)
by March 31, 2000, in the number of villages specified below, 
depending on the 
number of targeted villages at each mine site:
4 to 6 targeted villagesmore than 10 targeted villagesBegin IPDP activities in:at 
least 3 villages
(c)
Complete implementation of activities described in such IPDP 
implementation plans in accordance with a time schedule agreed between the Borrower 
and the Bank.
(d)
Notify the Bank promptly if, as a result of inadequate participation by 
inhabitants of the targeted villages, implementation of IPDP activities is not carried 
out in accordance with subparagraph (b) above, and such notification shall be 
accompanied by a certification to the Bank by the Environmental and Social Review 
Panel that the Borrower has made adequate efforts to disseminate information to and 
consult with the concerned villages on IPDP activities.
3.
The Borrower shall, in relation to the ESMP Project Affected Persons (“PAPs”) 
defined in the Borrower’s Resettlement and Rehabilitation Policy, April 1994, carry 
out the following or cause the following to be carried out unless otherwise agreed 
with the Bank:
(a)
By April 30, 1998: (i) update and verify the list of PAPs compiled on the 
basis of the July 1994 census; and (ii) complete the issuance of photograph 
identification cards to entitled PAPs except for East Parej.  For East Parej, a(i) and 
a(ii) will be completed by May 31, 1998.
(b)
By April 30, 1998, complete a database of PAPs based on the updated and 
verified list of PAPs referred to in paragraph 3(a)(i) above except for East Parej.  
For East Parej, a database will be carried out by May 31, 1998.
(c)
Conduct an initial market survey and identify job opportunities and 
training needs for purposes of rehabilitating eligible PAPs by March 31, 1998.
(d)
Submit to the Bank for approval by November 30 of each year, 14 annual 
mine-specific rehabilitation plans taking into account the time schedule and actions 
referred to in subparagraph (e) below, the first set of 14 plans for calendar year 
1998 to be submitted by May 31, 1998. 
(e)
By December 31 of the following year: (i) complete implementation of all 
activities described in such rehabilitation plans; and (ii) complete actions relating 
to resettlement and rehabilitation to the satisfaction of the Bank.
(f)
By March 31, 1998, submit to the Bank a draft final report on strategy 
for the economic rehabilitation and sustainable income restoration for PAPs.
Page  20