Malawi - Second Technical Assistance Project : Credit 1428 - Credit Agreement - Conformed

긔 CREDIT NUMBER 1428 MAI DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated 6 1 1984, between REPUBLIC OF MALAWI (herel ed the Borrower) and INTER- NATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Associa- tion). 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 June 30, 1980, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agreements 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 General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth. ARTICLE 11 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 equivalent to one million four hundred thousand Special Drawing Rights (SDR 1,400,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Sched- ule I to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Associa- tion, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of -the Credit. Section 2.03. The Closing Date shall be June 30, 1987, or such later date as the Association shall establish. The Associa- tion shall promptly notify the Borrower of such later date. - 2 - Section 2.04. (a) The Borrower shall pay to the Association a commitment charge at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of the Credit not with- drawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the Development Credit Agree- ment to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or shall be cancelled. (b) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without re- strictions of any kind imposed by, or in the territory of, the Borrower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. Section 2.05. 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 2.06. Commitment charges and service charges shall be payable semiannually on January 15 and July 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each Janu- ary 15 and July 15, commencing January 15, 1994, and ending July 15, 2033, each installment to and including the installment payable on July 15, 2003, 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. ARTICLE III Execution of the Project Section 3.01. The Borrower shall carry out the Project or cause the Project to be carried out vlth due diligence and effi- ciency and in conformity with appropriate financial and admini- strative practices, and shall provide, promptly as needed, the - 3 - funds, facilities, services and other resources required for the purpose. Section 3.02. In order to assist the Borrower in carrying out the Project, the Borrower shall employ management, financial and engineering consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association, such consultants to be selected in accordance with principles and procedures satisfactory to the Association on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981. To this end the Borrower shall, by June 30, 1984 employ: (i) an economist to head the Energy Unit within the Borrower's Office of the President and Cabinet, as well as an energy economist planner whose qualifi- cations, experience and terms and conditions of employment shall be satisfactory to the Associa- tion; (ii) consultants whose qualifications, experience and terms and conditions of employment shall be acceptable to the Association to assist the Bor- rower in carrying out the tariff study referred to in Part C of Schedule 2 to this Agreement; and (iii) a financial analyst whose qualifications, experi- ence and terms and conditions of employment shall be acceptable to the Association to assist the Borrower in carrying out Part D of the Project. Section 3.03. The Borrower shall, by February 1, 1984, employ a consultant whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Asso- ciation to assist the Borrower in conducting the industrial price control study referred to in Part C of the Project. Section 3.04. The Borrower shall complete: (a) the fuelwood savings program described in Part B of the Project not later than April 30, 1986, and shall consult with the Association on the findings and recommendations of the pilot pro- gram not later than June 30, 1986; 4 (b) the tariff study described in Part C of the Project not later than June 30, 1985, and shall consult with the Association on the findings and recommendations of said studies not later than September 30, 1985; and (c) the medium-term energy investment plan not later than June 30, 1985, and shall consult with the Association on the work program to implement said plan not later than September 30, 1985. Section 3.05. Except as the Association shall otherwise agree, the Borrower shall cause all services financed out of the proceeds of the Credit to be used exclusively for the Project. Section 3.06. (a) The Borrower shall furnish to the Associa- tion, promptly upon their preparation, reports and contract doc- uments for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall rea- sonably request. (b) The Borrower: (i) shall maintain records and procedures adequate to record and monitor the progress of the Project (in- cluding its cost and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Credit, and to disclose their use in the Project; (ii) shall enable the Association's representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) shall furnish to the Association at regular intervals all such information as the Association shall reasonably request concerning the Project, its cost and, where appropriate, the benefits to be derived from it, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. (c) Upon the award by the Borrower of any contract for services to be financed out of the proceeds of the Credit, the Association may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (d) Promptly after completion of the Project, but in any event not later than six months after the Closing Date or such later date as may be agreed for this purpose between the Borrower and the Association, the Borrower shall prepare and furnish to the Association a report, of such scope and in such detail as the - 5 - Association shall reasonably request, on the execution and ini- tial operation of the Project, its cost and the benefits derived and to be derived from it, the performance by the Borrower and the Association of their respective obligations under the Development Credit Agreement and the accomplishment of the purposes of the Credit. ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained separate accounts adequate to reflect in accordance with consistently maintained appropriate accounting practices the operations, resources and expenditures, in respect of the Pro- ject, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower shall: (i) have the accounts referred to in paragraph (a) of this Section for each fiscal year audited, in accordance with appropriate auditing principles consistently ap- plied, by independent auditors acceptable to the Association; (ii) furnish to the Association, as soon as available, but in any case not later than six months after the end of each such year, a certified copy of the report of such audit by such auditors, of such scope and in such detail as the Association shall have rea- sonably requested; and (iii) furnish to the Association such other information concerning said accounts, records and expendi- tures and the audit thereof as the Association shall from time to time reasonably request. ARTICLE V Termination Section 5.01. The date /9/a4v is hereby specified for the purposes of Section 12.04 of the General Condi- tions. ARTICLE VI Representatives of the Borrower; Addresses Section 6.01. The Minister of Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. -6- Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministry of Finance P.O. Box 30049 Capital City Lilongwe 3, Malawi Cable address: Telex: FINANCE 4407 MI Lilongwe For the Association: International Development Association 1818 P. 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) 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 MALAWI By 14/ T/A 7/w Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By/i/ /4 /&* .4 Regional Vice President Eastern Africa - 7 - SCHEDULE I 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 expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Vehicles, equip- 230,000 100% of foreign ment and office expenditures and supplies 90% of local expenditures (2) Consultants' 990,000 100% services and training (3) Unallocated 180,000 TOTAL 1,400,000 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Borrower for goods or services supplied from the territory of any country other than that of the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower. 3. The disbursement percentages have been calculated in com- pliance with the policy of the Association that the proceeds of the Credit shall not 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 - 8 - supply thereof; on this basis, if the amount of any such taxes levied on or in respect of items in any Category decreases or increases, the Association may, by notice to the Borrower, in- crease or decrease the disbursement percentage then applicable to such Category as required to be consistent with the aforemen- tioned policy of the Association. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expend- itures prior to the date of this Agreement. 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 in- sufficient to finance the agreed percentage of all expenditures in that Category, 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 Cate- gory 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 expend- iture 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 Borro- wer, 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. -9- SCHEDULE 2 Description of the Project The Project is part of the Borrower's program to improve energy planning and coordination, achieve substantial fuelwood savings, strengthen the debt management and the financial manage- ment capacities of the Borrower's Ministry of Finance and the Agricultural Development and Marketing Corporation, and improve the pricing of electric power and industrial commodities. The Project consists of the following components: Part A: Strengthening the energy planning capabilities of the Economic Planning Division of the Borrower's Office of the President and Cabinet including training. Part B: Carrying out by the Tobacco Research Authority of a pilot fuelwood savings program. Part C: Carrying out of an electric power tariff study by the Borrower's Electricity Supply Commission and an indus- trial price control study by the Borrower's Ministry of Trade, Industry and Tourism. Part D: Strengthening of the Agricultural Development and Marketing Corporation financial management capabili- ties. Part E: Strengthening of the Borrower's Ministry of Finance's debt management capabilities including training and acquisition of equipment. Part F: Other studies associated with the Second Structural Ad- justment Project under the Development Credit Agreement of even date herewith between the Borrower and the As- sociation. The Project is expected to be completed by Decemjer 31, 1986. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the 6 day of 198 i4. FOR SECRETARY