Use of resources (Article 12)
The resources and facilities of the Bank shall be used exdusively to imple-ment the purpose and functions set forth in Articles 1 and 2 of this Agreeimple-ment.
1. This Article is similar to Art. IlI(l) of the IADB. The term "resources" in-cludes both the ordinary capital resources of the Bank and the special resources, as defined in Arts. 9 and 10 respectively. For special reSources appertain to special funds which, to come within the terms of Article 8(1),must be designed to serve the purpose of the Bank and come within its functions.
2. Resources and facilities of the Bank may be used (i)in operations, as defined in Arts. 13 and 14 and (ii) for other activities which come within the functions of the Bank(see Arts. 2 (I) (e) and ([) and Arl. 23) for instance, on technical assistance.
Thus, assistance may be rendered by the Bank to dependent African territow ries, which would come within Art. 2 (I) (e).
None.
CHAPTERm
Operations
ARTICLE 12 USE OF RESOURCES
The resources and facilities of the Bank shall be used exclusively to imple-ment the purpose and functions set forth in Articles 1 and 2 of this Agreeimple-ment.
tl6
Draft prepared by the Committee of Nine
Explanatory notes submitted by the Committee of Nine
Amendments proposed by Governments
Final text adopted by the Conference
ORDINARY AND SPECIAL OPERATIONS Ordinary and special operations (Article 13)
(1) The operations of the Bank shall consist of ordinary operations and of special operations.
(2) The ordinary operations shall be those financed from the ordinary capital resources of the Bank.
(3) The special operations shall be those financed from the special resources.
(4) The financial statements of the Bank shall show the ordinary operations and the special operations of the Bank separately. The Bank shall adopt such other rules and regulations as may be required to ensure the effective separation of the two types of its operations.
(5) Expenses appertaining directly to ordinary operations shall be charged to the ordinary capital resources of the Bank; expenses appertaining directly to special operations shallbecharged to the appropriate special resources. Other expenses shall be charged as the Bank shall determine.
1. This Article is required in order to make provision for the activities of special funds; it is an incidence of the principles of separation and special administration laid down in Art. 8 (see note I thereto) and developed in Arts. 9 to II. In particular Arts. 9 and 10 define, respectively, the expressions "ordinary capital resources"
and "'special resources".
2. Paragraphs (1) to (3) follow the text of IADB, Art. III (2), and paragraphs (4) and (5), the text of IADB, Art. III (3) (a), second sub-paragraph. and (b).
3. The division into ordinary and special operations is of significance, among others, for limitations existing on the operations of the Bank (see Art. 15), rules with regard to the use of currencies and conditions concerning the repayment of loans (see Arts. 16 and 18).
4. Paragraph (5) contains a substantive rule concerning the appropriation of the expenses of the Bank (see IADB, Art. III (3) (b).
Liberia; The last sentence of paragraph (5) should read; "Expenses not directly appertaining to either ordinary or special operations shall be charged
as the Bank shall determine".
ARTICLE 13
ORDINARY AND SPECIAL OPERATIONS
(1) The operations of the Bank shall consist of ordinary operations and of special operations.
(2) The ordinary operations shall be those financed from the ordinary capital resources of the Bank.
(3) The special operations shall be those financed from the special resources.
(4) The financial statements of the Bank shall show the ordinary operations and the special operations of the Bank separately. The Bank shall adopt such other rules and regulations as may be required to ensure the effective separation of the two types of its operations.
(5) Expenses appertaining directly to ordinary operations shall be charged to the ordinary capital resources of the Bank; expenses appertaining directly to special operations shall be charged to the appropriate special resources. Other expenses shall be charged as the Bank shall determine.
Draft prepared by the Committee of Nine
Explanatory notes submitted by the
Commillee of Nine
RECIPIENTS AND METHODS OF OPERATIONS Recipients and methods of operations (Article 14)
(1) In its operations, the Bank may provide or facilitate financing for any member or any agency or political sub-division thereof or for any institution or undertaking in the territory of any member as well as for international or regional agencies or institutions concerned with the development of Africa. Subject to the provision>
of this Chapter, the Bank may carry out its operations in any of the following ways:
(a) By making or participating in, direct loans out of:
(i) Funds corresponding to its unimpaired subscribed paid-up capital and, except as provided in Article 20 of this Agreement, to its reserves and undistributed surplus; or out of
(ii) Funds corresponding to special resources; or
(b) By making or participating in direct loans out of funds borrowed or other-wise acquired by the Bank for inclusion in its ordinary capital resources or in special resources; or
(c) By investment of funds referred to in sub-paragraph (a) or (b) of tbis paragraph in the equity capital of an undertaking or institution; or (d) By guaranteeing, in whole or in part, loans made by others and thereby
committing funds referred to in sub-paragraph (a) and (b) of this para-graph.
(2) The provisions of this Agreement applying to direct loans which the Bank may make pursuant to sub-paragraph (a) or (b) of the preceding paragraph shall also apply to its participation in any direct loan undertaken pursuant to any of those sub-paragraphs. Equally the provisions of this Agreement applying to guarantees of loans undertaken by the Bank pursuant to sub-paragraph (d) of the preceding paragraph shall apply where the Bank guarantees part of such a loan only.
I. This Article defines in paragraph (1) the recipients, and in its sub-paragraphs (a) to (d) the forms of operations which the Bank may carry out. (As to its other powers, see Arts. 23 and 24). As regards the other lending agencies, see IBRD, Arts. III (4) and IV (I) (a): IFC, Art. III(I); lAD, Art. V (2) (e); IADB, Art. III (4).
Paragraph (2) of the Article is designed to simplify the text of subsequent Articles of Agreement - e.g. Arts. 16 or 18.
2. The Article applies both to ordinary and special operations of the Bank (see Art. 13). However, if such operations are undertaken for the purposes of special funds, they may be subject to special rules and regulations (see Art. 8 (3) - e.g.
with regard to the use of currencies). But the forms. of operations set out in Art.
14 (I) show that they may not include financing by grants - even out of funds placed at the disposal of the Bank on a non-reimbursable basis.
3. The term "financing" within the context of paragraph (I) includes the operations referred to in sub-paragraphs (a) to (c), while financing is "facilitated"
by guarantees for which sub-paragraph (d) provides. Sub-paragraphs (a), (b) and (d) follow largely the text of the relevant provisions of IBRD and IADB.
4. The funds referred to in para. (I) (a) (i) are part of the ordinary capital resources of the Bank, as defined in Art. 9, the exception referred to being com-missions "set aside" as a special reserve to meet certain liabilities of the Bank (Art.
20). Subscribed paid-up capital is defined in Arts. 5 (2) and 6(I). As to the distribu-tion of surplus, see Art. 43.
5. The phrase "borrowed or otherwise acquired" in para. (1) (b) includes, for instance, grants made to the Bank for inclusion in special resources. As to the powers of the Rank to borrow, see Arts 23 and 24.
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118-Amendments proposed by Governments and by international organizations
Final text adopted by the Con/erence
6. In conformity with para. (I) (C) the Bank may make investments not only in the equity capital of an industrial or commercial Hundertaking" but aho in "in-stitutions" such as, for instance, a regional or national Development Bank in Africa.
7. As provided in Art. 7 (4), the callable capital stock of the Bank serves as a guarantee fund for its loan and guarantee operations undertaken with borrowed funds included in its ordinary capital resources. (Art. 14 (I) (b) and (d)).
Tanganyika: Provision might be made for the Bank to make grants from grants received.
Liberia: Itseems necessary to tie in the exception provided in Article 17 (I) (b) that financing may not be done within the territory of a member if that member objects thereto.
IBRD: Paragraph (I) (d). The words "and thereby committing funds referred to in sub-paragraphs (a) and (b) of this paragraph" are unnecessary and might well be omitted. Moreover, they are not entirely correct since a guarantee operation would also commit the callable capital (see note 7 to Article 14).
ARTICLE 14
RECIPIENTS AND METHODS OF OPERAnONS
(I) In its operations, the Bank may provide or facilitate financing for any member, political sub-division or any agency thereof or for any institution or undertaking in the territory of any member as well as for international or regional agencies or institutions concerned with the development of Africa. Subject to the provisions of this Chapter. the Bank may carry out its operations in any of the following ways:
(a) by making or participating in, direct loans out of:
(i) funds corresponding to its unimpaired subscribed paid-up capital and, except as provided in Article 20 of this Agreement, to its reserves and undistributed surplus; or out of
(ii) funds corresponding to special resources; or
(b) by making or participating in, direct loans out of funds borrowed or other-wise acquired by the Bank for inclusion in its ordinary capital resources or in special resources; or
(c) by investment of funds referred to in sub-paragraph (a) or (b) of this paragraph in the equity capital of an undertaking or institution; or (d) by guaranteeing, in whole or in part, loans made by others.
(2) The provisions of this Agreement applying to direct loans which the Bank may make pursuant to sub-paragraph (a) or (b) of the preceding paragraph shall also apply to its participation in any direct loan undertaken pursuant to any of those sub-paragraphs. Equally, the provisions of this Agreement applying to guarantees of loans undertaken by the Bank pursuant to sub-paragraph (d) of the preceding paragraph shall apply where the Bank guarantees part of such a loan only.
Draft prepared by the Committee of Nine
I
IExplanatory Ilotes
!submitted bv tlte ,Committee ~f Nine
I,