Tanzania - Port Rehabilitation Project : Credit 1536 - Credit Agreement - Conformed

OFF CIAL CREDIT NUMBER 1536-0 TA L DOCUMENTS Development Credit Agreement (Port Rehabilitation Project) between UNITED REPUBLIC OF TANZANIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1985 CREDIT NUMBER 1536-0 TA DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated $ , 1985, between UNITED REPUBLIC OF TANZANIA (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 Borrower has requested from the Kingdom of Denmark (hereinafter called Denmark) a grant in an amount approximately equivalent to $7.9 million (hereinafter called the Danish Grant) to assist in financing part of the Project; (C) the Borrower has requested from the Republic of Finland (hereinafter called Finland) a grant in an amount approximately equivalent to $6.8 million (hereinafter called the Finnish Grant) to assist in financing part of the Project; (D) the Borrower has requested from the Kingdom of Nether- lands (hereinafter called the Netherlands) a grant in an amount approximately equivalent to $10.3 million (hereinafter called the Netherlands Grant) to assist in financing part of the Project; (E) the Borrower has requested from the Kingdom of Norway (hereinafter called Norway) a grant in an amount approximately equivalent to $2.8 million (hereinafter called the Norwegian Grant) to assist in financing part of the Project; (F) the Borrower has requested from the Republic of Italy (hereinafter called Italy) a Loan in an amount equivalent to $3.8 million (hereinafter called the Italian Loan) to assist in financing part of the Project; (G) the Project will be carried out by the Tanzania Harbours Authority with the Borrower's assistance and, as part of such assistance, the Borrower will make available to the Tanzania Harbours Authority the proceeds of the Credit as hereinafter provided; and WHEREAS the Association has agreed, on the basis, inter alia, of the foregoing, to extend the Credit to the Borrower upon the terms and conditions hereinafter set forth and in the Project Agreement of even date herewith between the Association and Tanzania Harbours Authority; 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 June 30, 1980, 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 General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following addi- tional terms have the following meanings: (a) "Project Agreement" means the agreement between the Association and THA 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 THA pursuant to Sec- tion 3.01 (b) of this Agreement, as the same may be amended from time to time; (c) "Project Preparation Advance" means the project prep- aration advance granted by the Association to the Borrower pursuant to an exchange of letters dated December 23, 1982 and March 10, 1983 between the Borrower and the Association; (d) "THA" means the Tanzania Harbours Authority, a statu- tory authority established pursuant to the Tanzania Harbours Authority Act, Act No. 12 of 1977, of the laws of the Borrower; (e) "The Act" means the Tanzania Harbours Authority Act No. 12 of 1977, referred to in (d) above; (f) "T Sh" means Tanzania shillings, the currency of the Borrower; and (g) "Project Coordinator" means the project coordinator referred to in Section 2.03 of the Project Agreement. -3- ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions set forth or referred to in this Agreement, an amount in various currencies equivalent to twenty-six million two hundred thousand Special Drawing Rights (SDR 26,200,000). Section 2.02. (a) 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 required for the Project and to be financed out of the proceeds of the Credit. (b) Promptly after the Effective Date, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and pay to itself the amount required to repay the principal amount of the Project Preparation Advance withdrawn and outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Project Preparation Advance shall thereupon be cancelled. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods and civil works required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of the Schedule to the Project Agreement. Section 2.04. The Closing Date shall be June 30, 1990 or such later date as the Association shall establish. The Associa- tion shall promptly notify the Borrower of such later date. Section 2.05. (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. 4- (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 2.06. 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 2.07. Commitment charges and service charges shall be payable semiannually on March 15 and September 15 in each year. Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each March 15 and September 15 commencing March 15, 1995, and ending September 15, 2034, each installment to and including the in- stallment payable on September 15, 2004, to be one-half of one per cent (1/2 of 1%) of such principal amount, and each install- ment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.09. The currency of the United Kingdom is hereby specified for the purposes of Section 4.02 of the General Condi- tions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement, and, to this end, without any limitation or restric- tion upon any of its other obligations under the Development Credit Agreement, shall cause THA to perform in accordance with the provisions of the Project Agreement all the obligations therein set forth, shall take or cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable THA to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. - 5 - (b) The Borrower shall relend the proceeds of the Credit to THA under a subsidiary loan agreement satisfactory to the Association which shall provide, inter alia, that: (i) the proceeds of the Credit shall be relent at an interest rate of eleven per cent (11%) per annum for a term of twenty years including a grace period not exceeding five years; and (ii) THA shall bear the risk resulting from fluctuations in the value of currencies relent to it. (c) The Borrowr shall exercise its rights under the Subsidiary Loan Agreoment in such manner as to protect the interests of the Borro*ier and the Association and to accomplish the purposes of the Credit, and except as the Association shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. Section 3.02. The Borrower shall: (i) annually review proposals for revision of tariffs submitted by THA, pursuant to Section 4.05 (ii) of the Project Agreement; and (ii) approve such tariff increases as shall be necessary. Section 3.03. The Borrower shall, until completion of the Project, consult with tha Association and THA prior to THA's making any capital investment, not included in the project, involving in any financial year an aggregate amount in excess of the equivalent of two million United States Dollars. ARTICLE IV Remedies of the Association Section 4.01. For the purposes of Section 6.02 of the General Conditions the following additional events are specified pursuant to paragraph (h) thereof: (a) THA shall have failed to perform any of its obligations under the Project Agreement. (b) As a result of events which have occurred after the date of the Development Credit Agreement, an extraordinary situation shall have arisen which shall make it improbable that THA will be able to perform its obligations under the Project Agreement. -6- (c) The Act shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of THA to perform any of its obligations under the Project Agreement. (d) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of THA or for the suspension of its operations. (e) The Italian Loan and Netherlands Grant Agreements shall have failed to become effective by June 30, 1985 or such later date as the Association may agree; provided, however, that the provisions' of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Association that adequate funds for the Project are available to the Borrower and THA from other sources on terms and conditions consistent with the obliga- tioris of the Borrower and THA under this Agreement. (f) (i) Subject to subparagraph (ii) of this paragraph the right of the Borrower or THA to withdraw the pro- ceeds of any grant shall have been suspended, cancelled or terminated in whole or in part, pur- suant to the terms of the grant. (ii) Subparagraph (i) of this paragraph shall not apply if: (A) such suspension, cancellation or termina- tion is not caused by the failure of the Borrower or THA to perform any of their obligations under such agreement; and (B) adequate funds for the Project are available to the Borrower or THA from other sources on terms and conditions consistent with the obligations of the Borrower or THA under this Agreement. Section 4.02. For the purposes of Section 7.01 of the Gen- eral Conditions, the following additional events are specified pursuant to paragraph (d) thereof: (a) any of the events specified in paragraphs (a) and (b) of Section 4.01 of this Agreement shall occur, and shall continue for a period of 60 days after notice thereof shall have been given by the Association to the Borrower; and (b) the events specified in paragraphs (c), (d), (e) and (f) (i) of Section 4.01 of this Agreement shall occur. -7- ARTICLE V Effective Date; Termination Section 5.01. The following events are specified as addi- tional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the Subsidiary Loan Agreement has been executed on behalf of the Borrower and THA; (b) the agreements for the Danish, Finnish and Norwegian Grants have been signed and delivered by the parties thereto; and (c) the Project Coordinator has been employed as provided for under Section 2.03 of the Project Agreement. Section 5.02. The following are specified as additional matters, 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: (a) that the Project Agreement has been duly authorized or ratified by THA, and is legally binding upon THA in accordance with its terms; and (b) that the Subsidiary Loan Agreement has been duly authorized or ratified by the Borrower and THA and is legally binding upon the Borrower and THA in accordance with its terms. Section 5.03. The date) Q-' ( 3' is hereby specified for the purposes of Section 12.04 oi the General Conditions. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Minister of the Borrower at the time responsible for Finance is designated as representative of the Borrower for the purposes of Section 11.03 of the General Condi- tions. -8- Section 6.02. The following addresses are specified for the purpose of Section 11.01 of the General Conditions: For the Borrower: Ministry of Finance P.O. Box 9111 Dar es Salaam United Republic of Tanzania Cable address: Telex: TREASURY 41329 Dar es Salaam 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) -9- 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. UNITED REPUBLIC OF TANZANIA By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President Eastern and Southern Africa - 10 - SCEDUL 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 and the allocation of amounts of the Credit to each Category: Amount of the Credit Allocated (Expressed in Category SDR Equivalent) (1) Civil works 15,710,000 (2) Equipment under 1,750,000 Part G of the Project (3) Other equipment 870,000 (4) Consultants 1,510,000 (5) Technical assistance 1,460,000 and training (6) Refunding of Project 920,000 Preparation Advance due under Section 2.02 (b) of this Agreement (7) Unallocated 3,980,000 TOTAL 26,200,000 2. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower; (b) payments made for expenditures prior to the date of this Agreement; - 11 - (c) 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; and (d) in respect of payments under Category (2) of the table in paragraph 1 above, until the Association receives: (i) the results of the study under Part G (i) of the Project; and (ii) evidence satisfactory to the Association to establish the identity and need for the goods to be financed. 3. Notwithstanding the allocation of an amount of the Credit set forth in the second column of 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 to finance all expenditures in that Category, the Association may, by notice to the Borrower, 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. 4. 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 expenditures 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 Asso- ciation's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 12 - SCEDULE 2 Description of the Project The objective of the Project is to provide for the rehabilitation and modernization of the Port of Dar es Salaam, the Borrower's major port, which also serves as an important regional port for several neighboring countries. To that end the Project consists of the following Parts: Part A: Creation of a modern container handling facility through the conversion of three existing general cargo berths (9, 10 and 11), and the acquisition and utilization of modern container handling equipment. Part B: Acquistion and utilization of modern grain handling equip- ment, and the provision of about 30,000 tons of silo storage within the confines of the Port. Part C: Rehabilitation of the existing lighterage terminal. POrt D: Rehabilitation of the existing Kurasini petroleum products terminal. Part E: (1) Acquisition and utilization of equipment for training, workshops, and communications. (2) Acquisition and utilization of equipment for general cargo handling. Part F: Provision of training and technical assistance to THA staff. - 13 - Part G: (1) Carrying out a study of the rehabilitation needs of THA's other existing port facilities. (2) Rehabilitation of other existing facilities including the provision of spare parts. The Project is expected to be completed by September 30, 1989. 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 day ofu 198 ___ FOR SECRETARY