Bolivia - Mining Credit Project : Credit 0455 - Credit Agreement - Conformed

-74-Ll CONFORMED COPY CREDIT NUMBER 455 BO Development Credit Agreement (Mining Credit Project) BETWEEN REPUBLIC OF BOLIVIA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JANUARY 18, 1974 CONFORMED COPY CREDIT NUMBER 455 BO Development Credit Agreement (Mining Credit Project) BETWEEN REPUBLIC OF BOLIVIA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JANUARY 18, 1974 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated January 18, 1974, between REPUBLIC OF BOLIVIA (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated January 31, 1969, with the same force and effect as if they were fully set forth herein, subject, however, to the modifications thereof set forth in the Schedule to this Agreement (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth, and the following additional terms have the following meanings: (a) "BISA" means Banco Industrial S.A., a bank established under the Borrower's Decreto Supremo No. 06"13, of September 12, 1962, on industrial banks and operating under the laws of the Borrower; (b) "Project Agreement" means the agreement between the Association and BISA of even date herewith, as the same may be amended from time to time; (c) "Subsidiary Loan Agreement" means the agreement entered or to be entered into between the Borrower and BISA pursuant to Section 3.02(a) of this Agreement, as the same may be amended from time to time; (d) "sub-loan" means a loan or credit made or proposed to be made by BISA to an Investment Enterprise for an Investment Project out of the proceeds of the Credit relent to BISA under the Subsidiary Loan Agreement and "free-limit sub-loan" means a sub-loan, as so defined, which qualifies as a free-limit sub-loan pursuant to the provisions of Section 2.02(c) of this Agreement; 4 (e) "investment" means an investment other than a sub-loan made or proposed to be made by BISA out of the proceeds of the Credit relent to BISA under the Subsidiary Loan Agreement in an Investment Enterprise for an Investment Project; (f) "Investment Enterprise" means an enterprise to which BISA proposes to make or has made a sub-loan or in which it proposes to make or has made an investment; (g) "Investment Project" means a specific development project to be carried out by an Investment Enterprise utilizing the proceeds of a sub-loan or investment, (h) "Bolivian Pesos" and "$B" mean the currency of the Borrower: (i) "foreign currency" means any currency other than the currency of the Borrower; (J) "subsidiary" means any company of which a majority of the outstanding voting stock or other proprietary interest is owned or effectively controlled by BISA or by any one or more subsidiaries of BISA or by BISA and one or more of its subsidiaries; (k) "By-laws" means the Estatutos of BISA, dated March 30, 1973, as amended to the date of this Agreement and as they may be further amended from time to time; (1) "GEOBOL" means Servicio Geologico de Bolivia; (n) "Statement of Policy" means the statement of lending and investment policy approved by the Directors of BISA on December 20, 1973, as amended to the date of this Agreement and as further amended from time to time; and (n) "Project" means the Project described in Section 3.01 hereinafter. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in this Agreement set forth or referred to, an amount in various currencies equivalent to six million two hundred thousand dollars ($6,200,000). 5 Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account for amounts expended (or, if the Association shall so agree, for expenditures required to be made) (i) by the Borrower or by GEOBOL to finance the reasonable cost of experts' services, materials, supplies and equipment for Parts B and C of the Project and (ii) under Part A of the Project by BISA under a sub-loan or investment to finance the reasonable cost of goods and services required for the Investment Project in respect of which the withdrawal is requested. (b) The generality of the provisions of paragraph (a) above notwithstanding, no withdrawal shall be made: (i) on account of expenditures in the currency of the Borrower or for goods produced in, or services supplied from, the territories of the Borrower: 00 unless the Borrower and the Association shall otherwise agree, in excess of (A) the equivalent of S5,00t,000 for expenditures by BISA under sub-loans or investments under Part A of the Project, (B) the equivalent of $850,000 for expenditures on account of goods and services required for Part B of the Project, and (C) the equivalent of S350,000 for expenditures on account of goods and services required for Part C of the Project, and (iii) in the case of sub-loans or investments by BISA under Part A of the Project unless (A) the sub-loan or investment shall have been approved by the Association, or (B) the sub-loan shall be a free-limit sub-loan for which the Association shall have authorized withdrawals from the Credit Account. (c) A free-limit sub-loan shall be a sub-loan for an Investment Project (other than for any of the first three Investment Projects submitted by BISA to the Association in accordance with the provisions of Section 2.02 of the Project Agreement) in an amount to be financed out of the proceeds of the Credit which shall not exceed the sum of: (i) $250,000 equivalent, when added to any other outstanding amounts financed or proposed to be financed out of the proceeds of the Credit for any other project directly and materially related to such Investment Project- and (ii) $2,000,000 equivalent, when added to all other free-limit sub-loans financed or proposed to be financed out of the proceeds of the Credit, the foregoing amounts being subject to change from time to time as determined by the Association. 6 (d) Except as the Borrower and the Association shall otherwise agree and subject to the limitation contained in Section 5.01(a) of the General Conditions, no withdrawals shall be made on account of expenditures made by an Investment Enterprise in respect of a sub-loan subject to the Association's approval, or in respect of an investment, more than ninety days prior to the date on which the Association shall have received in respect of such sub-loan or investment the application and information required by Section 2.02 (b) of the Project Agreement or, under a free-limit sub-loan, more than ninety days prior to the date on which the Association shall have received in respect of such free-limit sub-loan the request and information required by Section 2.02(c) of the Project Agreement. Section 2.03. The Closing Date shall be June 30, 1978 or such other date as shall be determined by the Association. Section 2.04. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.05. Service charges shall be payable semi-annually on March 15 and September 15 in each year. Section 2.06. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each March 15 and September 15 commencing March 15, 1984, and ending September 15, 2023, each installment to and including the installment payable on September 15, 1993, to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.07. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.08. BISA is designated as representative of the Borrower for the purpose of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions with respect to expenditures of BISA under sub-loans or investments under Part A of the Project. Section 2.09. GEOBOL is designated as representative of the Borrower for the purpose of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions with respect to expenditures of GEOBOL for Part B of the Project. 7 ARTICLE III Description of the Project; Use of Proceeds of the Credit; Miscellaneous Provisions Section 3.01. The purpose of the Credit is to assist the Borrower in financing such development of mining facilities and resources in Bolivia as will contribute to the economic and social development of the country. The Project consists of the following Parts: Part A: The financing by BISA of specific mining development projects through loans to and investments in productive mining enterprises in Bolivia, in furtherance of the corporate purposes of BISA; Part B: The carrying out by the Borrower, through GEOBOL, of a survey of small mines in the Borrower's territories designed to take an inventory of small mines, to select mines with the best potential and to provide technical and exploration assistance to their owners; and Part C: The carrying out by the Borrower, through its Ministry of Mining and Metallurgy, of the following: (A) the strengthening of the planning, documentation and supervision functions of the Ministry of Mining and Metallurgy; (B) a study of the Borrower's taxation of the mining sector; and (C) a study of the feasibility of establishing a mineral resources exploration fund in Bolivia. Section 3.02. (a) The Borrower shall relend to BISA, under a subsidiary loan agreement to be entered into between the Borrower and BISA under terms and conditions satisfactory to the Association, such portion of the proceeds of the Credit as shall be disbursed by the Association for Part A of the Project. (b) The Borrower shall exercise its rights under the Subsidiary Loan Agreement in such manner as to protect the interests of the Borrower and the 8 Association and to accomplish the purposes of the Credit, and except as the Borrower and the Association shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. (c) The Borrower shall take and cause all its agencies to take all action which shall be necessary on their part to enable BISA to perform all of its obligations under the Project Agreement and the Subsidiary Loan Agreement and shall not take or permit to be taken any action which might interfere with such performance. Section 3.03. (a) The Borrower shall carry out, or cause to be carried out, Parts B and C of the Project with due diligence and efficiency and in conformity with appropriate administrative, financial and technical practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for this purpose, included, but not limited to, such portion of the proceeds of the Credit as shall be disbursed by the Association for such Parts of the Project. (b) Without limitation on the generality of the provisions set forth in paragraph (a) hereinabove, in carrying out Parts B and C of the Project, the Borrower shall: (i) employ consultants acceptable to the Association upon terms and conditions acceptable to the Association; (ii) except as the Association shall otherwise agree, cause such goods and services (other than services of consultants) as are required for such Parts of the Project and are to be financed out of the proceeds of the Credit to be procured on the basis of international competition requiring quotations from at least three foreign countries, provided, however, that the Borrower shall cause the diamond drills and the necessary accessories therefor required for Part B of the Project to be procured on the basis of international competition under procedures consistent with the Guidelines for Procurement under World Bank Loans and IDA Credits, published by the Bank in April 1972, as revised in October 1972; (iii) insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit for such Parts of the Project against hazards incident to the acquisition, transportation and delivery thereof to the place of 0 9 use or installation, provided that for any indemnity such insurance shall be payable in a currency freely usable by the Borrower to replace or repair such goods; (iv) except as the Association ma,c otherwise agree, cause all goods and services financed out of the' proceeds of the Credit for such Parts of the Project to be uscd exclusively for such Parts of the Project until their complezion: (v) furnish to the Association promptly upon their preparation, the plans, specifications, reports, contract documents, work and procurement schedules for such Parts of the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request; and (vi) (A) maintain records adequate to record the progress of such Parts of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Credit disbursed by the Association therefor, and disclose the use thereof in such Parts of the Project, (B) without limitation upon ' the provisions of Section 4.03 of this Agreement, enable the Association's representatives to examine such Parts of the Project, the goods financed out of such proceeds and any relevant records and documents, and (C) furnish to the Association all such information as the Association shall reasonably request concerning such Parts of the Project, the expenditure of the proceeds of the Credit so disbursed by the Association and the goods and services financed out of such proceeds. Section 3.04. Effective no later than June 30, 1974, or sucl other date as the Borrower and the Association shall otherwise agree, the Borrower shall promulgate a new Mining Code. ARTICLE IV Consultation, Information and Inspection Section 4.0 1. The Borrower and the Association shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, the Borrower and the Association shall from time to time, at the request of either party: 0 10 (a) exchange views through their representatives with regard to the performance of the respective obligations of any party under this Agreement, the Project Agreement or the Subsidiary Loan Agreement, the administration, operations, and financial position of BISA and its subsidiaries and other matters relating to the purposes of the Credit; and (b) furnish to the other all such information as it shall reasonably request with regard to the general status of the Credit. On the part of the Borrower, such information shall include information with respect to financial and economic conditions in the territories of the Borrower, including its balance of payments, and the external debt of the Borrower. Section 4.02. (a) The Borrower, through Banco Central de Bolivia, shall furnish or cause to be furnished to the Association all such information as the Association shall reasonably request concerning the administration, operations and financial condition of BISA and its subsidiaries. (b) The Borrower and the Association shall promptly inform each other of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Credit, the maintenance of the service thereof or the performance by any party of its obligations under this Agreement, the Project Agreement or the Subsidiary Loan Agreement. Section 4.03. The Borrower shall afford all reasonable opportunity for accredited representatives of the Association to visit any part of the territories of the Borrower for purposes related to the Credit. ARTICLE V Taxes and Restrictions Section 5.01. The principal of, and service charges on, the Credit shall be paid without deduction for, and free from, any taxes imposed under the laws of the Borrower or laws in effect in its territories. Section 5.02. This Agreement, the Project Agreement and the Subsidiary Loan Agreement shall be free from any taxes on or in connection with the execution, delivery or registration thereof, imposed under the laws of the Borrower or laws in effect in its territories. Section 5.03. The payment of the principal of, and service charges on, the Credit shall be free from all restrictions, regulations, controls and moratoria of any nature imposed under the laws of the Borrower or laws in effect in its territories. * 11 ARTICLE VI Remedies of the Association Section 6.01. If any event specified in Section 7.01 of the General Conditions or in Section 6.03 of this Agreement shall occur and shall continue for the period, if any, therein set forth, then at any subsequent time during the Uontinuance thereof, the Association, at its option, may by notice to the Borrower declare the principal of the Credit then outstanding to be due and payable immediately together with the service charges thereon, and upon any such declaration such principal and service charges shall become due and payable immediately, anything to the contrary in this Agreement notwithstanding. Section 6.02. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified: (a) BISA shall have failed to perform any of its obligations under the Project Agreement; (b) the Borrower or BISA shall have failed to perform any of their respective obligations under the Subsidiary Loan Agreement; (c) any part of the principal amount of any loan to BISA having an original maturity of one year or more shall, in accordance with its terms, have become due and payable in advance of maturity as provided in the relative contractual instruments, or any security for any such loan shall have become enforceable; (d) a change shall have been made in the Borrower's Decreto Supreno No. 06213, in the By-laws of BISA or in the Statement of Policy, which will materially and adversely affect the carrying out of Part A of the Project or the operations or financial condition of BISA; (e) a resolution shall have been passed for the dissolution or liquidation of BISA; (f) a subsidiary or any other entity shall have been created or acquired or taken over by BISA, if such creation, acquisition or taking over would adversely affect the conduct of BISA's business or BISA's financial position or the efficiency of BISA's management and personnel or the carrying out of Part A of the Project; and (g) an extraordinary situation shall have arisen which shall make it improbable that BISA will be able to perform its obligations u.der the Project Agreement. 12 Section 6.03. For the purposes of Section 7.01 of the General Conditions the following additional events are specified: (a) the event specified in paragraph (a), (b), (f) or (g) of Section 6.02 hereof shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower and to BISA; and (b) the event specified in paragraph (c), (d), or (e) of said Section shall Occur. ARTICLE VII Effective Date; Termination Section 7.01. The following events are specified as additional conditions to the effectiveness of this Agreement within the meaning of Section 10.01(b) of the General Conditions: (a) The execution and delivery of the Project Agreement on behalf of BISA have been duly authorized or ratified by all necessary corporate and governmental action; (b) The execution and delivery of the Subsidiary Loan Agreement on behalf of the Borrower and BISA have been duly authorized or ratified by all necessary corporate and governmental action; (c) The mining engineer and the financial analyst referred to in Section 2.0 1(b) of the Project Agreement have been employed by BISA and have taken up their duties; and (d) Additional subscriptions in the amount of $BI0,000,000 to BISA's capital in form and substance satisfactory to the Association have been made providing for additional capital in the amount of $B5,000,000 to be paid in no later than December 31, 1974 and $B5,000,000 to be paid in no later than December 31, 1975. Section 7.02. The following are specified as additional matters, within the meaning of Section 10.02(b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association; (a) that the Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, BISA and constitutes a valid and binding obligation of BISA in accordance with its terms; and 13 (b) that the Subsidiary Loan Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, the Borrower and BISA and constitutes a valid and binding obligation of the Borrower and BISA in accordance with its terms. Section 7.03. The date April 18, 1974 is hereby specified for the purposes of Section 10.04 of the General Conditions. ARTICLE VIII Representative of the Borrower; Addresses Section 8.01. The Ministro de Finanzas of the Borrower is designated as representative of the Borrower for the purposes of Section 9.03 of the General Conditions. Section 8.02. The following addresses are specified for the purposes of Section 9.0 1 of the General Conditions: For the Borrower: Ministerio de Finanzas La Paz Bolivia Cable address: MINFINANZAS La Paz For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INDEVAS Washington, D.C. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed 14 in their respective names and to be delivered in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF BOLIVIA By /s/ Edmundo Valencia Ibanez Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Gerald Alter Regional Vice President Latin America and the Caribbean 15 SCHEDULE Modifications of the General Conditions For the purposes of this Agreement, the provisions of the General Conditions are modified as follows: (1) The following subparagraph is added to Section 2.01: "13. The term 'Project Agreement' has the meaning set forth in Section 1.02(b) of the Development Credit Agreement." (2) Section 6.02(h) is deleted and Section 6.02(i) is renumbered as Section 6.02(h). (3) Section 6.03 is deleted and replaced by the following new Section: "Section 6.03. Cancellation by the Association. If (a) the right of the Borrower to make withdrawals from the Credit Account shall have been suspended with respect to any amount of the Credit for a continuous period of thirty days, or (b) by the date specified in paragraph (e) of Section 2.02 of the Project Agreement no applications or requests permitted under paragraph (a) or paragraph (b) of such Section shall have been received by the Association in respect of any portion of the Credit allocated by paragraph (b)(ii)(A) of Section 2.02 of the Development Credit Agreement to Part A of the Project, or having been so received, shall have been denied, or (c) after the Closing Date an amount of the Credit shall remain unwithdrawn from the Credit Account, the Association may by notice to the Borrower terminate the right of the Borrower to submit such applications or requests or to make withdrawals from the Credit Account, as the case may be, with respect to such amount or portion of the Credit. Upon the giving of such notice such amount or portion of the Credit shall be cancelled." (4) The words "The Project Agreement" are added after the words "the Development Credit Agreement" in Section 6.06. (5) The words "or the Project Agreement" are added after the words "the Development Credit Agreement" in Section 8.02.