Tunisia - Grain Distribution And Storage Project : Loan 2052 - Loan Agreement - Conformed

DOCUMENTS LOAN NUMBER 2052 TUN Loan Agreement (Grain Distribution and Storage Project) between REPUBLIC OF TUNISIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated 192 , 181 .4. .... LOAN NUMBER 2052 TUN LOAN AGREEMENT AGREEMENT, dated O7y (14- 0f , 1981, between REPUBLIC OF TUNISIA (hereinafter called the Borrower or Tunisia) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS (A) the Borrower has requested the Bank to assist in the financing of the foreign exchange cost of the Project referred to in Schedule 2 to this Agreement by making the Loan as hereinafter provided; (B) the Project will be carried out by Office des Cgreales (hereinafter called OC), with the assistance of Office des Ports Nationaux Tunisiens (hereinafter called -OPNT) and Societe Nationale des Chemins de Fer Tunisiens (hereinafter called SNCFT), and with the Borrower's assistance and, as part of such assis- tance, the Borrower will make available to OC the proceeds of the Loan as hereinafter provided; and WHEREAS the Bank has agreed, on the basis inter alia of the foregoing, to make the Loan available to the Borrower upon the terms and conditions set forth hereinafter and in the Project Agreement of even date herewith among the Bank, OC, OPNT and SNCFT; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I ( General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated October 27, 1980, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank 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 and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: -2- (a) "Project Agreement" means the agreement among the Bank, OC, OPNT and SNCFT, of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement and all agreements supplemental to the Project Agreement. (b) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and OC pursuant to Section 3.01 (b) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Loan Agreement. (c) "OC Legislation" means collectively the Borrower's Decree - Laws No. 62-10 and 70.7 dated April 3, 1962 and September 26, 1970, respectively, governing the establishment and functions of OC. (d) "OPNT Legislation" means collectively the Borrower's Laws No. 72-5 and No. 65-2 dated February 15, 1972 and February 12, 1965, respectively, governing the establishment and functions of OPNT. (e) "SNCFT Legislation" means collectively the Borrower's Law No. 69-31 dated May 9, 1969 governing the establishment and functions of SNCFT. (f) "Dinar" or "Dt" means the Borrower's currency. (g) "Project Coordination Committee" oi "PCC" means the committee established and operating pursuant,to the Joint Decision issued by the Ministers of Planning and 'Finance, of Agriculture and of Transports and Communications, dated September 21, 1981. (h) "Project Management Unit" or "PMU" means the Project Management Unit established and operating pursuant to the Decision No. 13.876 issued by the President Director General of OC, dated September 11, 1981. (i) "CCGC" means the Coop6rative Centrale des Grandes Cultures. (j) "COCEBLE" means the Coop6rative Centrale du Ble. (k) "CGC" means Caisse Generale de Compensation. -3- ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to forty-two million dollars ($42,000,000). Section 2.02. The amount of the Loan may 'be withdrawn from the Loan 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 Bank, for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Loan. Section 2.03. Except as the Bank and the Borrower shall otherwise agree, procurement of the goods and works to be financed out of the proceeds of the Loan, shall be governed by the provisions of the Schedule to the Project Agreement. Section 2.04. The Closing Date shall be December 31, 1986 or such later date as the Bank shall establish. The Bank shall promptly notify the borrower of such later date. Section 2.05. The Borrower shall pay to the Bank a commit- ment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.06. The Borrower shall pay interest at the rate of ten and three-fifths per cent (10-3/5%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semiannually on February 15 and August 15 in each year. Section 2.08. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. 4- ARTICLE III Execution of the Project Section 3.01. (a) Without any limitation or restriction upon any of its other obligations under the Loan Agreement, the Borrower shall cause OC, OPNT and SNCFT to perform in accordance with the provisions of the Project Agreement all the obligations therein set forth, shall take or cause to be taken, through, inter alia, its respective Ministries responsible for agriculture, equipment, and transport and communications, all actions, in- cluding the provision of funds, facilities, services and other resources, necessary or appropriate to enable OC, OPNT and SNCFT 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 relend the proceeds of the Loan to OC under a subsidiary loan agreement to be entered into between the Borrower and OC, under terms and conditions which shall have been approved by the Bank and which shall, without limitation, provide that OC shall (i) pay to the Borrower interest at the rate of 10-3/5% per annum on the principal amount so relent and with- drawn by OC and outstanding from time to time, and (ii) repay to the Borrower the principal amount so relent over a period not to exceed 17 years including a grace period of about 4 years. (c) The Borrower shall exercise its rights under the Subsidiary Loan Agreement in such manner as to protect the interests of the Borrower and the Bank and to accomplish the purposes of the Loan, and except as the Borrower and the Bank shall otherwise agree, the Borrower shall not assign, nor amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. (d) Except as the Borrower and the Bank shall otherwise agree, the Borrower shall, as and when required and without limitation upon the provisions of paragraph (a) of this Section, make available to OC, all funds, other than funds provided to OC pursuant to the provision of paragraph (b) of this Section, necessary to enable OC to carry out the Project. Section 3.02. (a) The Borrower shall, by December 31, 1982, or such other date as the Bank may agree, complete the construc- tion of the quay for berth four at the new port of Ghannouch serving the city of Gabes. (b) The Borrower shall, promptly upon the completion of the construction of said quay, take all appropriate steps to transfer the ownership thereof to OPNT. Section 3.03. (a) The Borrower shall, no later than June 30, 1982, transmit to the Bank for an exchange of views the strategy established for the period of the VIth Plan (1982-1986) in regard of the livestock sub-sector. (b) The Borrower shall take or cause to be taken all appro- priate measures to eliminate in progressive steps price subsidies for animal feed grain, according to a timetable to be agreed upon by the Borrower and the Bank no later than December 31, 1982 or such other date as shall be agreed upon between the Borrower and the Bank. Section 3.04. (a) Unless the Borrower and the Bank shall otherwise agree, the Borrower shall, until the completion of the Project, maintain PCC in existence with such composition and functions as provided for in the instrument referred to in Section 1.02 (g) of this Agreement. (b) The Borrower shall cause PCC, inter alia: (i) to convene at least every six months to review OC's work programs for the purpose of ensuring coordination amongst, and cooperation of, the Borrower's ministries and agencies responsible for providing assistance to OC in accordance with such programs, and to review progress in the carrying out of the Project; and (ii) to furnish to the Bank at regular intervals such information as the Bank may request in respect of the Project. Section 3.05. The Borrower shall cause CGC to pay to OC, acting as operating agency, all arrears in reimbursements, on account of payments made by OC for supporting the prices of grain and grain derivatives, owed by CGC to OC, within three months after the respective due dates thereof; it being understood that, whenever there is reasonable cause to believe that the resources available to CGC will be inadequate to enable. CGC to make such reimbursements to OC in a timely fashion, the Borrower shall make arrangements, satisfactory to the Bank, promptly to make such payments itself, in the form of advances, out of its treasury resources and it being further understood that such payments shall be recorded in the "price support" account of OC. Section 3.06. (a) The Borrower shall exchange views with the Bank prior to the Borrower's approval of the plan of action referred to in Section 2.03 (b) of the Project Agreement. (b) The Borrower shall promptly, and in any event not later than March 31, 1984 or such other date as may be agreed with the Bank, take all measures required on its part to implement said plan of action. ARTICLE IV Other Covenants . Section 4.01. (a) It is the policy of the Bank, in making loans to, or with the guarantee of, its members not to seek, in normal circumstances, special security from the member concerned but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distribution of foreign exchange held under the control or for the benefit of such member. To that end, if any lien shall be created on any public assets (as hereinafter defined), as security for any external debt, which will or might result in a priority for the benefit of the creditor of such external debt in the allocation, realization or distribution of foreign exchange, such lien shall, unless the Bank shall otherwise agree, ipso facto and at no cost to the Bank, equally and ratably secur,- the principal of, and interest and other charges on, the Loan, and the Borrower, in creating or permitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any constitutional or other legal reason such provision cannot be made with respect to any lien created on assets of any of its political or administrative subdivisions, the Borrower shall promptly and at no cost to the Bank secure the principal of, and interest and other charges on, the Loan by an equivalent lien on other public assets satisfactory to the Bank. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. (c) As used in this Section, the term "'public assets" means assets of the Borrower, of any political or administrative -7- subdivision thereof and of any entity owned or controlled by, or operating for the account or benefit of, the Borrower or any such subdivision, including gold and foreign exchange assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Borrower. ARTICLE V Remedies of the Bank Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (k) thereof: (a) OC, OPNT or SNCFT shall have failed to perform any of their respective obligations under the Project Agreement; (b) an extraordinary situation shall have arisen which shall make it improbable that OC, OPNT or SNCFT will be able to perform any of their respective obligations under the Project Agreement; (c) the OC Legislation, OPNT Legislation or SNCFT Legisla- tion shall have been amended so as to materially and adversely affect the respective operations or financial condition of OC, OPNT or SNCFT, respectively; and (d) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of OC, OPNT or SNCFT, or for the suspension of the operations of any of them. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following events are specified pursuant to paragraph (h) thereof: (a) any event specified in paragraph (a) of Section 5.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower and to the respective parties to the Project Agreement; and (b) any event specified in paragraphs (c) or (d) of Section 5.01 of this Agreement shall occur. ARTICLE VI Effective Date; Termination Section 6.01. The following event is specified as an additional condition to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions, namely, that the Subsidiary Loan Agreement has been executed on behalf of the Borrower and OC. Section 6.02. The following are specified as additional matters, within the meaning of Section 12.02 (c) of the General Conditions, to be included in the opinion or opinions to be .furnished to the Bank, namely, that: (a) the Project Agreement has been duly authorized or ratified by OC, OPNT and SNCFT, and is legally binding upon OC, OPNT and SNCFT in accordance with its terms; and (b) the Subsidiary Loan Agreement has been duly authorized or ratified by the Borrower and OC and is legally binding upon the Borrower and OC in accordance with its terms. Section 6.03. The date JCOAA AA\-Q q is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Minister of Planning and Finance 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: Ministry of Planuing and Finance Place De La Monnaie Tunis Tunisia -9- .Cable address: Telex: Ministry of Planning and MIPLAN Finance 12117 TUN Tunis For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement 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 TUNISIA ( ByH Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Regional Vice President Europe, Middle East and North Africa - 10- SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Silo Works and installation of related facilities (a) at locations 23,500,000 40% other than Manouba (b) at Manouba 2,500,000 50% (2) Port Works 1,000,000 60% (3) Silo Rail Sidings 2,000,000 40% (4) Rail Hopper Cars 3,000,000 100% of foreign expenditures (5) Engineering Services 2,200,000 80% (6) Studies and Technical 1,200,000 80% Assistance (7) Overseas Training 200,000 100% of foreign expenditures (8) Unallocated 6,400,000 TOTAL 42,000,000 - 11 - 2. For the purposes of this Schedule, the term "foreign expenditures" 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 compliance with the policy of the Bank that no proceeds of the Loan 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 respect of any item to be financed out of the proceeds of the Loan decreases or increases, the Bank may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Bank. 4. Notwithstanding the provisions of paragraph 1 above: (a) no withdrawals shall be made in respect of payments made for expenditures prior to the date of this Agreement, except that withdrawals in an aggregate amount not exceeding the equivalent of $300,000 may be made in respect of Category (5) on account of payments made for engineering services before that date but after March 1, 1981; (b) no withdrawals shall be made in respect of payments made for expenditures under sub-Category (1) (b) above, until OC shall have entered into the arrangements with CCGC referred to in Section 2.01 (e) (iv) of the Project Agreement; (c) no withdrawals shall be made in respect of payments made for expenditures under Category (2) above until OC shall have entered into the arrangements with OPNT referred to in Section 2.01 (b) (i) of the Project Agreement; and (d) no withdrawals shall be made in respect of payments made for expenditures under Categories (3) and (4) above until OC shall have entered into the arrangements with SNCFT referred to in Section 2.01 (b) (ii) of the Project Agreement. 5. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in para- graph I above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category or sub-Category -12- will be insufficient to finance the agreed percentage of all expenditures in that Category or sub-Category, the Bank may, by notice to the Borrower: (i) reallocate to such Category or sub- Category, to the extent required to meet the estimated shortfall, proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank 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 or sub-Category may continue until all expenditures thereunder shall have been made. 6. If the Bank shall have reasonably determined that the procurement of any item in any Category or sub-Category is incon- sistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as, in the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan. - 13 - SCHEDULE 2 The Project The main objectives of the Project are: (i) to strengthen grain storage capacity; (ii) to reduce the congestion, handling costs, demurrage charges and grain losses at the main Tunisian seaports and the cost of transport and handling of grain; (iii) to strengthen the technical capacity and financial management of OC; and (iv) to lay the groundwork for further modernization of the system of collection, storage and transport of domestic grain. The Project consists of the following Parts: Part A: Silo Works Construction, rehabilitation and expansion by OC of grain silos and auxiliary operational buildings, as follows: - rehabilitation and expansion to a capacity of 30,000 tons of the existing port silo at Bizerte and the installation of related import handling facilities; - construction of a port silo with a capacity of 30,000 tons on the north quay of the new port of Ghannouch serving the city of Gabes; - rehabilitation of an existing storage silo with a capacity of 50,000 tons at Manouba; - construction of three storage silos, two with a capacity of 10,000 tons each at Beja and Gafsa, and one with a capacity of 20,000 tons at Sfax; and - expansion to a capacity of 28,000 tons of the existing storage silo at Kalaa Seghira. Part B: Port Works The construction of three dolphins alongside the Bizerte silo for mooring of ships and the dredging necessary to accommodate ships of up to 30,000 tons, both actions to be carried out by OPNT. -14- Part C: Silo Rail Sidings and Rail Hopper Cars (a) Construction and rehabilitation of silo rail sidings by SNCFT, on behalf of OC, as follows: - construction of rail sidings at the new port of Gannouch and at Sfax, Beja and Gafsa; - rehabilitation of existing rail sidings at Bizerte, Manouba and Kalaa Seghira. (b) Acquisition and operation by SN"CFT, on behalf of OC, of about 50 bulk grain rail hopper cars (consisting of an approximately equal number of standard and narrow gauge cars) of about 64-ton gross weight and 47-ton net load capacity to be used for bulk grain transport in programmed trains between Bizerte and Manouba, Gabes and Sfax, and Gabes and Kalaa Seghira, and such other routes as may be agreed with the Bank. Part D: Technical Assistance and Training (a) Introduction of new organizational units within OC, improvement of OC's grain distribution operations and management (including inter alia silo maintenance, stock control systems, import management, dom'stic transport management, and evaluation and planning activities), .carrying out of a study of, and preparation and imple- mentation of a plan of action for the improvement of, OC's financial system; and carrying out of a study of the further modernization of the system of collection, storage and transpor- of domestic grain. (b) On-the-job and overseas training by OC of personnel of OC and other agencies referred to in Section 2.03 (f) of the Project Agreement, for the improvement of OC's integrated grain distribution operations. The Pro4ect is expected to be completed by June 30, 1986. - 15 - SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each February 15 and August 15 beginning February 15, 1986 through February 15, 1998 1,615,000 On August 15, 1998 1,625,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.04), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. - 16 - Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.04 (b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 1.85% More than three years but not more than six years before maturity 3.75% More than six years years but not more than eleven years before maturity 6.85% More than eleven years but not more than fifteen years before maturity * 9.35% More than fifteen years before maturity 10.60% O INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Bank for Reconstruction and Develop- ment. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Bank thereunto this day of 198 L. FOR SECRETARY