2586

II SÉRIE — NÚMERO 139

of the currencies of all State participants is made by the International Monetary Fund.

CHAPTER V Operations

article 14

Use of resources

1 — The Fund shall provide financing for projects and programmes to further economic and social development in the territory of members. The Fund shall provide such financing for the benefit of those members whose economic situation and prospects require such financing to be on concessional terms.

2 — Financing provided by the Fund shall be for purposes which in the opinion of the Fund are of high developmental priority in the light of the needs of the area or areas concerned and shall, except in special circumstances, be for specific projects or groups of projects, particularly those forming part of a national or regional or sub-regional programme, including provision of financing for national development banks or other suitable institutions for relending for specific projects approved by the Fund.

article 15 Conditions of financing

1 — The Fund shall not provide financing for an\ project in the territory of a member if that member objects thereto, except that it shall not be necessary for the Fund to assure itself that individual members do not object in the case of financing provided to a public international, regional or sub-regional organization.

2 — a) The Fund shall not provide financing if in its opinion such financing is available from other sources on terms that the Fund considers are reasonable for the recipient.

b) In making financing available for entities other than members, the Fund shall take all necessary steps to ensure that the concessional benefits of its financing accrue only to members or other entities which should, taking into account all the relevant circumstances, receive some or all of those benefits.

3 — Before financing is provided, the applicant shall have presented an adequate proposal through the president of the Bank and the President shall have presented to the Board of Directors of the Fund a written report recommending such financing, on the basis of a staff study of its merits.

4 — u) The Fund shall impose no conditions that the proceeds of its financing shall be spent in the territories of any particular State participant or member, but such proceeds shall be used only for procurement in the territories of State participants or members, of goods produced in and services supplied from the territories of State participants or members, provided that, in the case of funds received pursuant to article 8 from a State which is not a participant or member, the territories of that State shall also be eligible sources of procurement from such funds, and may be eligible sources of procurement form such funds, and may be eligible sources of procurement from such other funds received under that article as the Board of Directors shall determine.

b) Procurement shall be on the basis of international competition among eligible suppliers except in cases where the Board of Directors determines that such international competition would not be justified.

5 — The Fund make arrangements to ensure that the proceeds of any financing are used only for the purposes for which the financing was provided, with due attention to considerations of economy, efficiency and competitive international trade and without regard to political or other non-economic influences or considerations.

6 — Funds to be provided under any financing operations shall be made available to the recipient only to meet expenses in connection with the project as they are actually incurred.

7 — The Fund shall be guided by sound development banking principles in its operations.

8 — The Fund shall not engage in refinancing operations.

9 — In making a loan, the Fund shall pay due regard to the prospects that the borrower and the guarantor, if any. will be able to meet their obligations.

10— In considering an application for financing, the Fund shall pay due regard to the relevant self-help measures being taken by the recipient and. where the recipient is not a member, by both the recipient and the member or members whose territories the project or programme is intended to serve.

11 — The Fund shall adopt such measures as shall be required to ensure the effective application of this article.

article 16 Form and terms of financing

1 — Financing by the Fund from resources provided under articles 5. 6 and 7, and from repayments of, and income arising from, such financing, shall take the form of loans. The Fund may provide other financing, including grants, out of resources received pursuant to arrangements under article 8 expressly authorizing such financing.

2 — a) Subject to the provisions of the foregoing paragraph, financing by the Fund shall be on such concessional terms as may be appropriate.

b) Where the borrower is a member, or an inter--govemmental body to which one or more members belong, the Fund shall, in establishing the terms of financing, take account primarily of the economic circumstances and prospects of the member or members for whose benefit the financing is being provided and, in addition, of the nature and requirements of the project or programme concerned.

3 — The Fund provide financing for:

a) Any member or any geographical or administrative

subdivision or agency thereof;

b) Any institution or undertaking in the territory of

any member; and

c) Any regional or sub-regional agency or institution

concerned with development in the territories of members.

All such financing shall, in the opinion of the Fund, be for the furtherance of the purposes of this Agreement. Where the borrower is not itself a member, the Fund shall require a suitable governmental or other guarantee or guarantees.

4 — The Fund may make foreign exchange available to meet local expenditure on a project when and to the extent