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committed, invested or otherwise disposed of, entirely separate from special resources. Each Special Fund, its resources and accounts shall be kept entirely separate from other Special Funds, their resources and accounts.

2 — The ordinary capital resources of the Bank shall under no circumstances be charged with, or used to discharge, losses or liabilities arising out of operations or other activities of any Special Fund. Special resources appertaining to any Special Fund shall under no circumstances be charged with, or used to discharge, losses or liabilities arising ou of operations or other activities of the Bank financed from its ordinary capital resources or from special resources appertaining to any oth?r Special Fund.

3 — In the operations and other activities of any Special Fund, the liability of the Bank shall be limited (o the special resources appertaining to that Special Fund which are at the disposal of the Bank.

CHAPTER III Operations

Article 12 Use of resources

The resources and facilities of the Bank shall be used exclusively to implement the purpose and functions set forth in articles 1 and 2 of this Agreement.

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.

Article 14 Recipients and methods of operations

1 — In its operations, the Bank may provide or facilitate financing for any regional member, political subdivision or any agency thereof of or any institution or undertaking in the territory of any regional 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 operation 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

it) Funds corresponding to special resources; or

b) By making or participating in direct loans out

of funds borrowed or otherwise 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 n\, 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.

Article 15 Limitations on operations

1 — The total amount, outstanding in respect of the ordinary operations of the Bank shall not at any time exceed the total amount of its unimpaired subscribed capital, reserves and surplus included in its ordinary capital resources excepting, however, the special reserve provided for in article 20 of this Agreement.

2 — The total amount outstanding in respect of the special operations of the Bank relating to any Special Fund shall not at any time exceed the total amount of unimpaired special resources appertaining to that Special Fund.

3 — In the case of loans made out of funds borrowed by the Bank to which the commitment to calls provided for in paragraph 4, a), of article 7 of this Agreement applies, the total amount of principal outstanding and payable to the Bank in a specific currency shall not at any time exceed the total amount of principal outstanding in respect of funds borrowed by the Bank thai are payable in the same currency.

4:

a) In the case of investments made by virtue of paragraph 1, c), of article 14 of this Agreement out of the ordinary capital resources of the Bank, the total amount outstanding shall not at any time exceed ten per cent of the aggregate amount of the paid-up capital stock of the Bank together with the reserves and surplus included in its ordinary