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II SÉRIE-A — NÚMERO 20

Section 6

Loans to the International Finance Corporation (*)

a) The Bank may make, participate in, or guarantee loans to the International Finance Corporation, an affiliate of the Bank, for use in its lending operations. The total amount outstanding of such loans, participations and guarantees shall not be increased if, at the time or as a result thereof, the aggregate amount of debt (including the guarantee of any debt) incurred by the said Corporation from any source and then outstanding shall exceed an amount equal to four times its unimpaired subscribed capital and surplus.

b) The provisions of article in, sections 4 and 5, c), and of article iv, section 3, shall not apply to loans, participations and guarantees authorized by this section.

ARTICLE IV Operations

Section 1 Methods of making or facilitating loans

a) The Bank may make or facilitate loans which satisfy the general conditions of article m in any of the following ways:

0 By making or participating in direct loans out of its own funds corresponding to its unimpaired paid-up capital and surplus and, subject to section 6 of this article, to its reserves;

ii) By making or participating in direct loans out of funds raised in the market of a member, of otherwise borrowed by the Bank;

iii) By guaranteeing in whole or in part loans made by private investors through the usual investment channels.

b) The Bank may borrow funds under a), ii), above or guarantee loans under a), iii), above only with the approval of the member in whose markets the funds are raised and the member in whose currency the loan is denominated, and only if those members agree that the proceeds may be exchanged for the currency of any other member without restriction.

Section 2 Availability and transferability of currencies

a) Currencies paid into the Bank under article II, section 7, /), shall be loaned only with the approval in each case of the member whose currency is involved; provide, however, that if necessary, after the Bank's subscribed capital has been entirely called, such currencies shall, without restriction by the members whose currencies are offered, be used or exchanged for the currencies required to meet contractual payments of interest, other charges or amortization on the Bank's own borrowings, or to meet the Bank's liabilities with respect to such contractual payments on loans guaranteed by the Bank.

(•) Section added by amendment effective December 17, 1965.

b) Currencies received by the Bank from borrowers or guarantors in payment on account of principal of direct loans made with currencies referred to in a) above shall be exchanged for the currencies of other members or reloaned only with the approval in each case of the members whose currencies are involved; provide, however, that if necessary, after the Bank's subscribed capital has been entirely called, such currencies shall, without restriction by the members whose currencies are offered, be used or exchanged for the currencies required to meet contractual payments of interest, other charges or amortization on the Bank's own borrowings, or to meet the Bank's liabilities with respect to such contractual payments on loans guaranteed by the Bank.

c) Currencies received by the Bank from borrowers ou guarantors in payment on account of principal of direct loans made by the Bank under section 1, a), ii), of this article, shall be held and used, without restriction by the members, to make amortization payments, or to anticipate payment of or repurchase part or all of the Bank's own obligations.

d) All other currencies available to the Bank, including those raised in the market or otherwise borrowed under section 1, a), ii), of this article, those obtained by the sale of gold, those received as payments of interest and other charges for direct loans made under section 1, a), i) and ii), and those received as payments of com-misions and other charges under section 1, a), iii), shall be used or exchanged for other currencies or gold required in the operations of the Bank without restriction by the members whose currencies are offered.

e) Currencies raised in the markets of members by borrowers on loans guaranteed by the Bank under section 1, a), iii), of this article, shall also be used or exchanged for other currencies without restriction by such members.

Section 3 Provision of currencies for direct loans

The following provisions shall apply to direct loans under section 1, a), i) and ii), of this article:

a) The Bank shall furnish the borrower with such currencies of members, other than the member in whose territories the project is located, as are needed by the borrower for expenditures to be made in the territories of such other members to carry out the purposes of the loan;

b) The Bank may, in exceptional circumstances when local currency required for the purposes of the loan cannot be raised by the borrower on reasonable terms, provide the borrower as part of the loan with an appropriate amount of that currency;

c) The Bank, if the project gives rise indirectly to an increased need for foreign exchange by the member in whose territories the project is located, may in exceptional circumstances provide the borrower as part of the loan with an appropriate amount of gold or foreign exchange not in excess of the borrower's local expenditure in connection with the purposes of the loan;