(No1)

(Japanese Note)

　Harare, May 30, 1995

　Excellency, 
I have the honour to refer to the recent negotiations between the representatives of the Government of Japan and of the Government of the Republic of Mozambique that were held on the basis of the conclusions reached during the consultations between the representatives of the Government of the Republic of Mozambique and of the Governments of the creditor countries concerned held in Paris on March 23, 1993 and September 20, 1994. I have further the honour to confirm the following understanding reached in the course of the said negotiations:

1.(1) The present arrangements will apply to the total amount of the following principal of and rescheduling interest on the commercial debts, contracted between the Government and governmental corporations of the Republic of Mozambique on the one hand and the creditors concerned resident in Japan (hereinafter referred to as "the Creditors") on the other, and insured by the Government of Japan (hereinafter referred to as "the Rescheduled Commercial Debts"):

(a) With respect to the commercial debts rescheduled pursuant to the arrangements made by the Notes exchanged between the Government of Japan and the Government of the Republic of Mozambique on June 26, 1985;

(i) the principal and rescheduling interest having fallen due between January 1, 1993 and December 31, 1993, both dates inclusive;

(ii) the principal and rescheduling interest having fallen due between January 1, 1994 and December 31, 1994, both dates inclusive; and

(iii) the principal and rescheduling interest having fallen or falling due between January 1, 1995 and June 30, 1995, both dates inclusive.

(b) With respect to the commercial debts rescheduled pursuant to the arrangements made by the Notes exchanged between the Government of Japan and the Government of the Republic of Mozambique on July 19, 1989;

(i) the rescheduling interest having fallen due between January 1, 1993 and December 31, 1993, both dates inclusive;

(ii) the rescheduling interest having fallen due between January 1, 1994 and December 31, 1994, both dates inclusive; and

(iii) the rescheduling interest having fallen or falling due between January 1, 1995 and June 30, 1995, both dates inclusive.

(c) With respect to the commercial debts rescheduled pursuant to the arrangements made by the Notes exchanged between the Government of Japan and the Government of the Republic of Mozambique on September 13, 1991;

(i) the rescheduling interest having fallen due between January 1, 1993 and December 31, 1993, both dates inclusive;

(ii) the rescheduling interest having fallen due between January 1, 1994 and December 31, 1994, both dates inclusive; and

(iii) the rescheduling interest having fallen or falling due between January 1, 1995 and June 30, 1995 both dates inclusive.

(2)(a) The total amount of the debts referred to in (a) (i) of sub-paragraph (1) above is estimated at four hundred ninety-four million nine thousand one hundred and ninety yen (494,009,190).

(b) The total amount of the debts referred to in (a) (ii) of sub-paragraph (1) above is estimated at four hundred sixty million nine hundred seventy-seven thousand  seven thousand seven hundred and forty-nine yen (460,977,749).

(c) The total amount of the debts referred to in (a) (iii) of sub-paragraph (1) above is estimated at two hundred seventeen million nine hundred ninety-eight thousand five hundred and fifty-six yen (217,998,556).

(d) The total amount of the debts referred to in (b) (i) of sub-paragraph (1) above is estimated at one hundred five million four hundred eighty thousand two hundred and nine yen (105,480,209).

(e) The total amount of the debts referred to in (b) (ii) of sub-paragraph (1) above is estimated at one hundred five million four hundred eighty thousand two hundred and nine yen (105,480,209).

(f) The total amount of the debts referred to in (b) (iii) of sub-paragraph (1) above is estimated at fifty-two million four hundred thirty-three thousand six hundred and four yen (52,433,604).

(g) The total amount of the debts referred to in (c) (i) of sub-paragraph (1) above is estimated at forty-seven million one hundred fifty-one thousand two hundred and ninety-six yen (47,151,296).

(h) The total amount of the debts referred to in (c) (ii) of sub-paragraph (1) above is estimated at ninety-three million five hundred thirty-three thousand seven hundred and eighty yen (93,533,780).

(i) The total amount of the debts referred to in (c) (iii) of sub-paragraph (1) above is estimated at forty-six million three hundred eighty-two thousand four hundred and eighty-four yen (46,382,484).

(3) Modifications may be made to the total amounts referred to in sub-paragraph (2) above by agreement between the authorities concerned of the Government of Japan and of the Government of the Republic of Mozambique, after the final verification to be made by the authorities concerned of the two Governments.

2.(1) The Government of the Republic of Mozambique will notify the Government of Japan, through the Bank of Mozambique, of the amount and dates of payments which will be made in order to settle the Rescheduled Commercial Debts in accordance with the payment scheme as set out in sub-paragraph (4) below (hereinafter referred to as "the Payment Scheme").

(2) The Government of the Republic of Mozambique will pay the total amount of the Rescheduled Commercial Debts to the Creditors in the currency designated in the contracts concerned through the Bank of Mozambique in accordance with the Payment Scheme.

(3) The Government of Japan will take possible measures, within the scope of the relevant laws and regulations in force in Japan, to facilitate the settlement of the commercial debts concerned by the payment to be made in accordance with the Payment Scheme.

(4) Each of the debts composing the Rescheduled Commercial Debts will be paid in accordance with the following scheme:

(a) The debts referred to in (a) and (b) of sub-paragraph (1) of paragraph I will be paid in forty-four (44) semiannual installments beginning on July 1, 1995 in accordance with the payment schedule show in Annex I attached hereto.

(b) The debts referred to in (c) of sub-paragraph (1) of paragraph I will be paid in ten (10) equal semiannual installments beginning on July 1, 1999.

3.(1) The Government of the Republic of Mozambique will pay to the Creditors, interest to be calculated as described in sub-paragraph (2) below on each of the commercial debts concerned to the extent that they have not been settled, in accordance with the following schedule:

(a) the first payment of the interest will be made on July 1, 1995; and

(b) the consecutive payments of interest after the first payment will be made on January 1 and July 1, each year.

(2)(a) The rate of interest on the debts referred to in (a) of sub-paragraph (1) of paragraph 1. applied for the period between each original due date and the previous day of the date of exchange of the present Notes, both dates inclusive, will be eight point two per cent (8.2%) per annum.

(b) The rate of interest on the debts referred to in (a) of sub-paragraph (1) of paragraph 1, applied from each original due date or the date of exchange of the present Notes, whichever is the later, will be two point two one two per cent (2.212%) per annum.

(c) The rate of interest on debts referred to in (b) of sub-paragraph (1) of paragraph 1, applied for the period between each original due date and the previous day of the date of exchange of the present Notes, both dates inclusive, will be six point six per cent (6.6%) per annum.

(d) The rate of interest on debts referred to in (b) of sub-paragraph (1) of paragraph 1, applied from each original due date or the date of exchange of the present Notes, whichever is the later, will be two point two one two per cent (2.212%) per annum.

(e) The rate of interest on debts referred to in (c) of sub-paragraph (1) of paragraph 1, applied for the period between each original due date and the previous day of the date of exchange of the present Notes, both dates inclusive, will be five per cent (5%) per annum.

(f) The rate of interest on debts referred to in (c) of sub-paragraph (1) of paragraph 1, applied from each original due date or the date of exchange of the present Notes, whichever is the later, will be eight point eight per cent (8.8%) per annum.

(3) The amount of interest to be paid will be calculated by multiplying the amount of the debts unsettled by the product of the number of the days the debt has not been settled and the daily interest rate. The daily interest rate is calculated by dividing the rate of interest referred to in sub-paragraph (2) above by three hundred and sixty-five (365). The illustration in the form of numerical formula of the method of calculation mentioned above is shown in the Annex II attached to this Note.

(4) In case where any payment under the Payment Scheme, including the payment schedule of interest set out in sub-paragraph (1) above, is retarded, the Government of the Republic of Mozambique will pay the late interest accruing from the overdue amount at the rate of nine point eight per cent (9.8%) per annum.

(5) The interest paid will be exempted from all taxes and duties of the Republic of Mozambique.

4. The Government of the Republic of Mozambique will pay bank charges incidental to the settlement of the commercial debts concerned.

5. It is confirmed that the terms and conditions of the contracts concerned not specifically referred to in this Note will remain applicable, unless otherwise agreed upon by the parties to the contracts concerned.

6. If the Government of the Republic of Mozambique accords to creditors resident in any third country terms and conditions more favourable than those referred to in sub-paragraph (4) of paragraph 2 with regard to debt relief measures, the Government of the Republic of Mozambique will forthwith accord to the Creditors the terms and conditions less favourable than those accorded to creditors resident in such third country.

7. If the representative of the Government of the Republic of Mozambique and the representatives of the Governments of the creditor countries concerned come to a new conclusion in connection with reorganization of the Mozambican debts including the debts covered by the present arrangements, consultations will be held between the Government of Japan and the Government of the Republic of Mozambique, in order to discuss the matter of continuation or modification of the present arrangements.

　I should be grateful if Your Excellency would confirm the foregoing understanding on behalf of the Government of the Republic of Mozambique.

　I avail myself of this opportunity to extend to Your Excellency the assurance of my highest consideration.

　(Signed) Haruo Okamoto
Charge d'Affaires, a. i. of Japan to the Republic of Mozambique

　His Excellency
Mr. Lopes Tembe Ndelana
Ambassador Extraordinary and Plenipotentiary of the Republic of Mozambique to the Republic of Zimbabwe

ANNEX I

　2.68% on July 1, 1995

　0.98% on January 1, 1996

　1.02% on July 1, 1996

　1.07% on January 1, 1997

　1.11% on July 1, 1997

　1.16% on January 1, 1998

　1.21% on July 1, 1998

　1.26% on January 1, 1999

　1.31% on July 1, 1999

　1.36% on January 1, 2000

　1.41% on July 1, 2000

　1.47% on January 1, 2001

　1.52% on July 1, 2001

　1.58% on January 1, 2002

　1.64% on July 1, 2002

　1.70% on January 1, 2003

　1.76% on July 1, 2003

　1.82% on January 1, 2003

　1.88% on July 1, 2004

　1.95% on January 1, 2005

　2.01% on July 1, 2005

　2.08% on January 1, 2006

　2.15% on July 1, 2006

　2.22% on January 1, 2007

　2.29% on July 1, 2007

　2.36% on January 1, 2008

　2.44% on July 1, 2008

　2.51% on January 1, 2009

　2.59% on July 1, 2009

　2.67% on January 1, 2010

　2.75% on July 1, 2010

　2.84% on January 1, 2011

　2.92% on July 1, 2011

　3.00% on January 1, 2012

　3.10% on July 1, 2012

　3.19% on January 1, 2013

　3.28% on July 1, 2013

　3.37% on January 1, 2014

　3.47% on July 1, 2014

　3.57% on January 1, 2015

　3.67% on July 1, 2015

　3.77% on January 1, 2016

　3.87% on July 1, 2016

　3.99% on January 1, 2017

ANNEX II

　Numerical formula of the method of calculation of the amount of interest on the Rescheduled Commercial Debts

　I = A x D x R x 1/365

　I: The amount of interest

　A: The amount of the debts unsettled

　D: The number of the days the debt has not been settled

　R: The rate of interest (per annum)

(NOTE)

(1) With respect to the first payment of the interest on July 1, 1995, D is equal to the number of the days from each original due date to June 30, 1995, both dates inclusive, for the debts referred to in (a), (b) and (c) of sub-paragraph (1) of paragraph 1.

(2) With respect to the consecutive payments of the interest after the first payment, D is equal to the number of the days from the day of the previous payment to the previous day of the payment, both dates inclusive.

(Mozambican Note)

　Harare, May 30, 1995

　Sir, 
I have the honour to acknowledge the receipt of your Note of today's date, which reads as follows:

"(Japanese Note)"

　I have further the honour to confirm on behalf of the Government of the Republic of Mozambique the understanding set forth in your Note.

　I avail myself of this opportunity to extend to you the assurance of my high consideration.

　(Signed) Lopes Tembe Ndelana
Ambassador Extraordinary and Plenipotentiary of the Republic of Mozambique to the Republic of Zimbabwe

　Mr. Haruo Okamoto
Charge d'Affaires, a. i. of Japan to the Republic of Mozambique