Niger - Power Engineering And Technical Assistance Project : Credit 1511 - Credit Agreement - Conformed

OFFICIAL D CU M ENTS CREDIT NUMBER 1511 NIR Development Credit Agreement (Power Engineering and Technical Assistance Project) between REPUBLIC OF NIGER and INTERNATIONAL DEVELOPMIENT ASSOCIATION Dated v V , 1986 CREDIT NUMBER 1151 NIR DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated OV Borr Qwer o98 , between REPUBLIC OF NIGER (hereinafter callel the Borrower or Niger) 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 NIGELEC (as herein- after defined) with the borrower's assistance and, as part of such assistance, the Borrower will make available to NIGELEC all 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 NIGELEC; 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 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) "NIGELEC" means Soci6t& Niggrienne d'Electricitf, a societe anonyme d'economie mixte existing under the laws of Niger. - 2 - (b) "NIGELEC Documents" means, collectively, the Borrower's .Ordonnance No. 74-31 dated November 15, 1974, NIGELEC's Statuts dated September 7, 1968 and the Niamey's Cahier des Charges dated July 16, 1952, as amended from time to time. (c) "Project Agreement" means the agreement between the Association and NIGELEC 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. (d) "Subsidiary Loan Agreement" means the agreement to be entered intc between the Borrower and NIGELEC pursuant to Section 3.01 (c) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Loan Agreement. (e) "Financing Agreement" means the agreement to be entered into between the Borrower and the entity referred to in Section 3.04 of this Agreement pursuant to Section 3.01 (d) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Financing Agreement. (f) "FY" means the Borrower's Fiscal Year which runs from October 1 to September 30. (g) "Project Preparation Advance" means the project pre- paration advance granted by the Association to the Borrower pursuant to an exchange of letters dated May 6, 1983, and July 7, 1983 between the Borrower and the Association. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Bor- rower, on the terms and conditions set forth or referred to in this Agreement, an amount in various currencies equivalent to seven million two hundred thousand Special Drawing Rights (SDR 7,200,000). 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 -3- 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 there- on. 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 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 December 31, 1988 or such later date as the Association shall establish. The Asso- ciation 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. (b) The commitment charge shall be paid: (1) at such places as the Association shall reasonably request; (ii) without restrictions 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 January 1 and July 1 in each year. -4- Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each Janu- ary 1 and July 1 commencing July 1, 1994, and ending January 1, 2034, each installment to and including the installment payable on January 1, 2004, 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 2.09. The currency of the Republic of France is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.10. NIGELEC is designated as representative of the Borrower 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) The Borrower declares its commitment to the objective of the Project as set forth in Schedule 2 hereto, and, to this end, without any limitation or restriction upon any of its other obligations under the Development -Credit Agree- ment, the Borrower shall cause NIGELEC to perform in accordance with the provisions of the Project Agreement all the obligations therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable NIGELEC 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 allocated to Categories (2) (a) and (b) and Category (3) included in the table set out in paragraph 1 of Schedule 1 hereto available to NIGELEC on an equity basis. (c) The Borrower shall. relend the proceeds of the Credit allocated to Categories (1) and (2) (c) and (e) included in the table set out in paragraph 1 of Schedule 1 hereto to NIGELEC under a Subsidiary Loan Agreement to be entered into between the Borrower and NIGELEC. -5- (d) The Borrower shall make available the funds allocated to Category (2) (d) also included in the table set out in para- graph 1 of Schedule 1 hereto to the entity referred to in Sec- tion 3.04 hereof under a Financing Agreement to be entered into between the Borrower and such entity, both agreements referred to in (c) and (d) above to be entered into under terms and condi- tions which shall have been approved by the Association which shall include: (1) repayment of principal over a period of 20 years (including a grace period of 5 years) and an interest rate of 10.08% per annum; and (2), as regards the Financing Agreement and if NIGELEC is not the entity referred to in Section 3.04 hereof, a condition to the effect that the proceeds of the Credit allocated to said Category (2) (d) shall be made available by such entity to NIGELEC free of any charge to NIGELEC and for the purpose of assisting NIGELEC in carrying out Part A (5) of the Project on behalf of such entity and a condition to the effect that such entity shall be responsible for the repayment of such funds to the Borrower. (e) The Borrower shall exercise its rights under the Subsi- diary Loan Agreement and the Financing Agreement in such manner as to protect the interests of the Borrower 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 the Financing Agreement or any provision thereof. Section 3.02. The Borrower shall take all administrative and other action required on its part to enable NIGELEC to comply with Section 4.03 of the Project Agreement. Section 3.03. (a) The Borrower shall, promptly upon com- pletion of the study on parastatal enterprises financed under a Project Preparation Facility No. P-251 granted for a proposed Economic and Management Improvement Project, exchange views with the Association on the recommendations emanating from such study, as regards the settlement of NIGELEC's outstanding accounts with other parastatal enterprises and arrange settlement thereof. (b) The Borrower shall, promptly upon completion of the studies included in Parts A (2) and A (3) of the Project, ex- change views with the Association on the recommendations emanat- ing from such studies. - 6- (c) The Borrower shall, promptly upon completion of the exchanges of views referred to in paragraph (b) above and in any event no later than June 30, 1986 for Part A (2) of the Project, and December 31, 1986 for Part A (3) of the Project: (i) prepare in consultation with NIGELEC a plan of action, satisfactory to the Association, on the basis of the recommendations emanating from such studies and the comments of the Association thereon; and (fi) promptly thereafter carry out such plan of action and take all necessary action for NIGELEC to carry such plan of action. Section 3.04. The Borrower shall ensure that NIGELEC will not carry out Part A (5) of Schedule 2 to this Agreement, unless the requirements referred to in paragraph 4 of Schedule 1 to this Agreement have been fulfilled. Section 3.05. (a) The Borrower shall implement the plan referred to in Section 5.01 (c) of this Agreement and, from time to time, keep the Association apprised of the implementation of said plan. (b) The Borrower shall, starting with its FY 1984-1985, make budget allocations adequate to pay for its estimated elec- tricity consumption and that of its departments and agencies. (c) Except as the Association shall otherwise agree, the Borrower shall, starting with FY 1985-1986, settle its electri- city accounts so that the total amount outstanding does not exceed the previous four (4) months billing. ARTICLE IV Remedies of the Association Section 4.01. For the purposes of Section 6.02 of the Gen- eral Conditions the following additional events are specified pursuant to paragraph (h) thereof: (a) NIGELEC shall have failed to perform any of its obliga- tions under the Project Agreement. (b) As a result of events which have occurred after the date of the Development Credit Agreement, an extraordinary situa- tion shall have arisen which shall make it improbable that NIGELEC will be able to perform its obligations under the Project Agreement. -7- (c) The NIGELEC Documents shall have been amended, sus- pended, abrogated, repealed or waived so as to affect materially and adversely the ability of NIGELEC 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 NIGELEC or for the suspension of its operations. 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) the event specified in paragraph (a) of Section 4.01 hereof shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Borrower to the Association and NIGELEC; and (b) any event specified in paragraph (c) or (d) of Section 4.01 hereof shall occur. 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, namely: (a) that the Subsidiary Loan Agreement has been executed on behalf of the Borrower and NIGELEC; (b) that the Borrower has taken all appropriate action to make available to NIGELEC on an equit basis the equivalent of the proceeds of the Credit allocated to Categories (2) (a) and (b) and Category (3) included in the table set out in paragraph 1 of Schedule 1 hereto; (c) that the Borrower has furnished to the Association a plan satisfactory to the Association to eliminate its arrears currently owing to NIGELEC; and (d) that the timetable referred to in Section 4.04 of the Project Agreement has been furnished to the Association. -8- 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, namely: (a) that the Project Agreement has been duly authorized or ratified by NIGELEC, and is legally binding upon NIGELEC in accordance with its terms; and (b) that the Subsidiary Loan Agreement has been duly authorized or ratified by the Borrower and NIGELEC and is legally binding upon the Borrower and NIGELEC in accordance with its terms. Section 5.03. The date f 44 is hereby specified for the purposes of Section 12.04 of the General Condi- tions. Section 5.04. The obligations of the Borrower under Sections 3.02, 3.03 and 3.05 of this Agreement and the provisions of Sec- tion 4.02 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date ten (10) years after the date of this Agreement, whichever shall be the earlier. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. Except as provided in Section 2.10 of this Agreement, the Minister of Planning of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purpose of Section 11.01 of the General Conditions: For the Borrower: Ministere du Plan B.P. 862 Niamey Niger -9- Cable address: Telex: MINIPLAN 5230 CND Niamey 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) 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 NIGER By /3 O1 Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION Regional Vice President Western Africa - 10 - 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 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) Electrical dis- 1,630,000 100% of foreign tribution sys- expenditures tem equipment (2) Consultants (a)- For Part A 1 575,000 100% of the Project (b) For Part A (2) 180,000 100% of the Project (c) For Parts A (3) 375,000 100% and (4) of the Project (d) For Part A (5) 1,290,000 100% of foreign of the expenditures Project and 40% of local expenditures (e) For Part A (6) 740,000 100% of foreign of the Project expenditures (3) Refunding of 960,000 Amount due under Project Prepara- Section 2.02 (b) tion Advance of this Agreement (4) Unallocated 1,450,000 TOTAL 7,200,000 - 11 - 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; provided, however, that if the currency of the Borrower is also that of another country from the territory of which goods or services are supplied, expenditures in such currency for such goods or services shall be deemed to be "foreign expenditures". 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 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, increase 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: (a) payments made for expenditures prior to July 19, 1984, except that withdrawals may not be made in respect of Category 2 (a) on account of payments made for expenditures prior to the date of this Agreement; and (b) expenditures made on account of category (2) (d) unless: (i) the studies show that the proposed project is technically and economically feasible; (ii) the Borrower haf, determined which entity will carry out and operate such future project; and (iii) the Borrower has entered into a Financing Agreement with said entity pursuant to Section 3.01 (e) of this Agreement. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in para- graph 1 above, if the Association has reasonably estimated that the amount of the Credit then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Association may, by notice to the Borrower: - 12 - (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 expen- ditures 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 expenditure 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 financ- ing out of the proceeds of the Credit. - 13 - SCHEDULE 2 Description of the Project The objective of the Project is to accelerate the decision process for the future development of the power sector in Niger, and to prepare the groundwork for needed institutional changes in that sector. To that end, the Project consists of the following Parts: Part A: (1) Study of power planning needs of the Niger Valley to the year 2020 and selected secondary load centers to 1990. (2) Study of the present and future organization of the power sector, including a review of the concession system and the relationship between NIGELEC and the Borrower. (3) Tariff study upon completion of the power planning study included in (1) above. (4) Study of NIGELEC's longer term internal organization, man- power planning and training requirements. (5) Engineering for preparation of bid documents for a future power project, if such a project is justified on the basis of the recommendations of the power planning study included in (1) above. (6) Implementation of training programs for NIGELEC's super- visory staff and scholarships to power engineering students. Part B: Acquisition and utilization of distribution equipment to improve the efficiency of the Niamey distribution system and upon completion of the transmission line Niamey-Say to electrify the towns of Say and Kollo. The Project is expected to be completed by June 30, 1988. 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 S al of the Association thereunto the day of J_4_h_A 198 FOR SECRETARY