Haiti - Power Project : Credit 0645 - Credit Agreement - Conformed

I CONFORMED COPY CREDIT NUMBER 645 HA DEVELOPMENT CREDIT AGREEMENT (Power Project) between REPUBLIC OF HAITI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated July 2, 1976 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated July 2, 1976, between REPUBLIC OF HAITI (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) The Borrower has requested the Association to assist in the financing of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) The Project will be carried out by EdH with the Bor- rower's assistance and, as part of such assistance, the Borrower will make available to EdH the proceeds of the Credit as herein- after provided; and (C) The Association is willing to make the Credit available upon the terms and conditions set forth hereinafter and in a proj- ect agreement of even date herewith between the Association and EdH; NOW THEREFORE the parties hereto hereby agree as follows: -2- 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 March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agree- ments of the Association 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 Gen- eral Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "EdH" means Electricitg d'Haiti, an autonomous agency of the Borrower established and operating pursuant to the Borrower's Basic Law; (b) "Basic Law" means the Loi-Cadre dated July 29, 1971, and published in the Moniteur of August 9, 1971, as said Loi-Cadre may be amended from time to time; (c) "Project Agreement" means the agreement between the Association and EdH of even date herewith, as the same may be amended from time to time; and (d) "UNDP Study" means the pre-investment study of the power sector Number HAI/74/011/A/01/42 presently carried out in the Bor- rower's country with the financial assistance of the United Nations Development Programme. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equiva- lent to sixteen million dollars ($16,000,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Association, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services re- quired for the Project and to be financed out of the proceeds of the Credit. Section 2.03. Except as the Association shall otherwise agree, the goods, works and services (other than consultants' services) for the Project to be financed out of the proceeds of the Credit, shall be procured in accordance with the provisions set forth or referred to in Section 2.03 of the Project Agreement. Section 2.04. The Closing Date shall be September 30, 1978 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. Section 2.05. The Borrower shall Day 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 2.06. Service charges shall be payable semi-annually on May 15 and November 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each May 15 and November 15 commencing November 15, 1986 and ending May 15, 2026, each installment to and including the installment payable on May 15, 1996 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 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the Gen- eral Conditions. Section 2.09. EdH is designated as representative of the Bor- rower for the purposes 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. ARTICLE III Execution of the Project Section 3.01. (a) Without any limitation or restriction upon any of its other obligations under the Development Credit Agree- ment, the Borrower shall cause EdH to perform in accordance with the provisions of the Project Agreement all the obligations there- in set forth, shall take and cause to be taken all action includ- ing the provision of funds, staff, facilities, services and other resources, necessary or appropriate to enable EdH to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) The Borrower shall make the proceeds of the Credit avail- able to EdH under terms and conditions which shall have been ap- proved by the Association, which shall incl'de, inter alia: (i) payment of interest at the rate of eight and eighty-five hundredths per cent (8.85%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time; and (ii) repayment over twenty-five years including two years of grace. w 7 ARTICLE IV Other Covenants Section 4.01. Except as the parties to this Agreement shall otherwise agree, the Borrower shall: (a) in coordination with EdH, formulate and furnish to the Association, not later than September 30, 1977, a comprehensive power sector investment pro- gram through 1995 that will give due consideration to the recom- mendations of the UNDP Study; and (b) before undertaking or per- mitting EdH to undertake, after the completion of the Project, any investment in the power sector exceeding the equivalent of two million dollars ($2,000,000), consult and exchange views with the Association. Section 4.02. Until the completion of the Project, the Bor- rower shall not undertake, or per,it EdH to undertake, without the prior consent of the Association, any investment in the power sector expected to exceed in the aggregate in any one year one million five hundred thousand dollars ($1,500,000) equivalent. Section 4.03. Except as the Association shall otherwise agree, the Borrower shall from time to time take all steps necessary or desirable, including but not limited to increases in EdH's tariffs, to enable EdH to earn an annual rate of return, as specified in Section 4.03 of the Project Agreement. Section 4.04. The Borrower shall take all legislative action as to be necessary to amend, by December 31, 1976 or such later date as the Borrower and the Association shall agree, the provi- sions of its Basic Law, concerning EdH organizational structure, under arrangements satisfactory to the Borrower and the Association. -8- Section 4.05. The Borrower shall take all measures necessary to ensure that electricity bills owed EdH are settled and paid in time under arrangements satisfactory to the Borrower and the Association. II ARTICLE V Remedies of the Association Section 5.01. For the purposes of Section 6.02 of the General Conditions the following additional events are specified pursuant to paragraph (h) thereof: (a) EdH shall have failed to perform any covenant, agreement or obligation under the Project Agreement; (b) an extraordinary situation shall have arisen which,shall make it improbable that EdH will be able to perform its obligations under the Project Agreement; (c) the Borrower's Basic Law shall have been amended, sus- pended, abrogated, repealed or waived in such a way as to materi- ally and adversely affect the carrying out of the Project or the obligations of the parties under this Agreement or obligations in the Project Agreement; and (d) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of EdH or for the suspension of its operations. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (d) thereof: - 10 - (a) any events specified in paragraphs (a) and (c) of Section 5.01 of this Agreement shall occur and shall continue for a period. of 60 days after notice thereof shall have been given by the Asso- ciation to the Borrower and EdH; and (b) any events specified in paragraphs (b) and (d) of Section 5.01 of this Agreement shall occur. 0 9 - 11 - ARTICLE VI Effective Date; Termination Section 6.01. The following event is specified as an addi- tional condition to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions, namely, that the execution and delivery of the Proj- ect Agreement on behalf of EdH have been duly authorized or ra- tified by all necessary corporate and governmental action. Section 6.02. The following is specified as an additional matter, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be fur- nished to the Association, namely, that the Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, EdH, and is legally binding upon EdH in accordance with its terms. Section 6.03. The date September 30, 1976 is hereby speci- fied for the purposes of Section 12.04 of the General Conditions. Section 6.04. The obligations of the Borrower under Section 4.01 (b), Section 4.03 and Section 4.05 of this Agreement and the provisions of paragraph (d) of Section 5.01 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date twenty-five years after the date of this Agreement, whichever shall be the earlier. - 12 - ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Secretary of State for Finance and Economic Affairs of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified. for the purposes of Section 11.01 of the General Conditions: For the Borrower: Secr6tairerie d'Etat des Finances et des Affaires Economiques Palais des Finances Port-au-Prince Haiti Cable address: Telex: Secretairerie d'Etat des (349)0083 Finances et des Affaires Economiques Port-au-Prince Haiti For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (wUI) - 13 - IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agree- ment to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF HAITI By /s/ Emmanuel Bros Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Enrique Lerdau Acting Regional Vice President Latin America and the Caribbean - 114- SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of the amounts of the Credit to each Category and the percentage of ex- penditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Exenditures Category Dollar Equivalent) to be Financed (1) Diesel power 8,900,000 100% of foreign station expenditures or 90% (2) Transmission and 3,700,000 100% of foreign distribution sys- expenditures or tems, and other 85% works (3) Other equipnent 500,000 100% of foreign and materials expenditures (4) Consultants' 1,000,000 100% of foreign services expenditures (5) Unallocated 1,900,000 TOTAL 16,000,000 -15 - 2. For the purposes of this Schedule the term "foreign expendi- tures" means expenditures in the currency of any country other than the Borrower and for goods or services supplied from the territory of any country other than the Borrower. 3. The disbursement percentages have been calculated in compli- ance with the policy of the Association that no proceeds of the Credit shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in re- spect of any item to be financed out of the proceeds of the Credit decreases or increases, the Association may, by notice to the Bor- rower, increase or decrease the disbursement percentage then appli- * cable to such item as required to be consistent with the aforemen- tioned policy of the Association. 4. Notwithstanding the provisions of paragraph 1 above, no with- drawals shall be made in respect of payments made for expenditures prior to the date of this Agreement, except that withdrawals may be made on account of payments made for such expenditures: (i) after June 1, 1976, in respect of Category (1) in an aggregate amount not exceeding the equivalent of $620,000; and (ii) after February 1, 1975, in respect of Category (4) in an aggregate amount not exceeding the equivalent of $500,000. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in paragraph 1 above, if the Association has reasonably estimated that the amount of the Credit then allocated to any Category will be insufficient -16 - to finance the agreed percentage of all expenditures in that Cate- gory, the Association may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allocated to another Category and which in the opinion of the Association are not needed to meet other expenditures, and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Association shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expendi- tures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as, in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. SCHEDULE 2 Description of the Project The Project consists of the following Parts: Part A: Generation Facilities Construction of a medium speed diesel power station with about 21 MW capacity adjacent to HASCO sugar factory in Port-au- Prince, equipped with two units of about 2.9 MW capacity each and two units of about 7.5 MW capacity each. Part B: Transmission, Distribution and Other Works (a) Installation of 69 KV single circuit transmission lines (about 21 km) and of a 115 KV double circuit transmission line (about 5.4 km) and expansion of existing transmis- sion lines. (b) Construction of five sub-stations at Canape-Vert, Martissant, Carrefour Feuilles, Croix des Missions and Place Geffrard and expansion of the existing sub- station at Delmas. (c) Expansion and rehabilitation of existing distribution networks. - 18 - (d) Improvements of the transmission system between the existing Peligre hydropower station and Port-au-Prince. (e) Construction and equipping of a training center. Part C: Technical Assistance (a) Consultants' services for engineering and super- vision of Part A and Part B of the Project. (b) Training of EdH staff. The Project is expected to be completed by December 31, 1977.