Rwanda - Power Project : Credit 1495 - Credit Agreement - Conformed

O 0FICIAL DOCUMENTS CREDIT NUMBER 1495 RW Development Credit Agreement (Power Project) between RWANDESE REPUBIC and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated /0 , 1984 CREDIT NUMBER 1495 RW DEVELOPMENT CREDIT AGREEMENT AGRFEMENT, dated / , 1984, between the RWANDESE REPUBLIC (hereinaf r called the Borrower) and the INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) the Borrower has requested the Association to assist in the financing of the foreign exchange cost of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) the Project will be carried out with the Borrower's assistance by the Etablissement Public de Production, de Transport et de Distribution d'Electricite, d'Eau et de Gaz (hereinafter called ELECTROGAZ), a public utility of the Borrower responsible for the production, transportation and distribution of electricity, water and gas within the Rwandese Republic, established pursuant to Decree Law No. 18 of 1976 as said Decree may be amended from time to time, and, as part of such assist- ance, the Borrower will make the Credit available to ELECTROGAZ as hereinafter provided; (C) the Borrower intends to receive from the French Caisse Centrale de Coop6ration Economique (hereinafter called the CCCE) a loan in the amount of 75,200,000 French Francs to assist in financing Part B of the Project (hereinafter called the CCCE loan); 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 set forth hereinafter and in the Project Agreement of even date herewith between the Association and ELECTROGAZ; 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 kgreements of the Association, dated June 30, 1980, with the same force and effect as if they were fully set forth herein -2- (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 ELECTROGAZ 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 supple- mental to the Project Agreement; (b) "Subsidiary Loan Agreement" means the agreement entered into between the Borrower and ELECTROGAZ 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; and (c) "Project Preparation Advance" means the total of the project preparation advances granted by the Association to the Borrower pursuant to exchanges of letters dated June 30, 1982 and September 21, 1982, and June 12, 1984 as supplemented by telex No. 832 of July 31, 1984 and June 23, 1984, between the Borrower and the Association. ARTICLE II The Credit qection 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 eight million five hundred thousand Special Drawing Rights (SDR 8,500,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of this Section and 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 Associa- tion shall so agree, to be made) in respect of the reasonable cost in foreign exchange of goods and services required for the Project and to be financed out of the proceeds of the Credit. -3 - (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 prin- cipal 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 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, 1988 or such later date as the Association shall establish. The Association 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: (i) at such places as the Association shall reasonably request; (ii) without restriction 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 February 15 and August 15 in each year. -4- Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each Feb- ruary 15 and August 15 commencing August 15, 1994, and ending February 15, 2034, each installment to and including the install- ment payable on February 15, 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 United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.10. ELECTROGAZ 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 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 ELECTROGAZ to carry out the Project and to perform in accordance with the provisions of the Project Agreement all the other obligations of ELECTROGAZ 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 ELECTROGAZ 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 Credit to ELECTROGAZ under a subsidiary loan agreement to be entered into between the Borrower and ELECTROGAZ under terms and conditions which shall have been approved by the Association and which shall include a term of 20 years including 5 years of grace, interest at the rate of 10% per annum, and the assumption by ELECTROGAZ of the exchange risk. - 5 - (c) The Borrower shall exercise its rights under the Sub- sidiary Loan Agreement in such manner as to protect the interests of the Borrower and of 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 ensure that: (i) the total amount of receivables on account of gas, electricty and water supplied to all customers by ELECTROGAZ, including the most recent month's billings, not exceed four months' billing; and (ii) the total amount of such receivables due from governmental customers not exceed three months' billings to such customers. Section 3.03. The Borrower shall take such steps as shall be necessary on its part to permit ELECTROGAZ to comply with its obligations under Section 4.05 of the Project Agreement. Section 3.04. The Borrower shall ensure at all times the availability to ELECTROGAZ of such foreign exchange as shall be necessary to purchase maintenance equipment, supplies and spare parts to enable ELECTROGAZ properly to maintain its equipment. Section 3.05. The Borrower shall ensure that all appoint- ments to the staff of ELECTROGAZ be approved by its Personnel Manager. Section 3.06. Following the adoption by ELECTROGAZ of the plan for cost reduction established under Section 4.08 (a) of the Project Agreement, any further investment in ELECTROGAZ by the Borrower shall, to the extent permitted by the debt limitation provisions of Section 4.03 of the Project Agreement, be in the form of loans rather than contributions to capital. 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) ELECTROGAZ shall have failed to perform any of its obligations under the Project Agreement. - 6 - (b) As a result of events which have occurred after the date of the Development Credit Agreement, in extraordinary situation shall have arisen which shall make it improbable that ELECTROGAZ will be able to perform its obligations under the Project Agreement. (c) Decree No. 18 (1976) of the Borrower shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of ELECTROGAZ 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 ELECTROGAZ or for the suspension of its operations. (e) (i) Subject to subparagraph (ii) of this paragraph: (A) the right of the Borrower or of ELECTROGAZ to withdraw the proceeds of any loan, credit or grant made for the Project shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement providing therefor; or (B) any such loan or credit shall have become due and payable prior to the agreed maturity thereof. (ii) Subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Association that: (A) such suspension, cancel- lation, termination or prematuring is not caused by the failure of the Borrower or of ELECTROGAZ to perform any of their respective obligations under such agreement; and (B) adequate funds for the Project are available to the Borrower or ELECTROGAZ from other sources on terms and condi- tions consistent with the obligations of the Bor- rower under this Agreement and of ELECTROGAZ under the Project 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: -.7- (a) the event specified in paragraph (a) 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 ELECTROGAZ; and (b) any event specified in paragraphs (c), (d) or (e) of Section 4.01 of this Agreement shall occur, subject, in the latter. case, to the proviso of subparagraph (ii) of such para- graph (e). 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 ELECTROGAZ; and (b) all conditions precedent to the first disbursement of the proceeds of the CCCE loan, except for the effectiveness of this Agreement, have been fulfilled. 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 furnished to the Association: (a) that the Project Agreement has been duly authorized or ratified by ELECTROGAZ, and is legally binding upon ELECTROGAZ in accordance with its terms; and (b) that the Subsidiary Loan Agreement has been duly authorized or ratified by the Borrower and ELECTROGAZ and is legally binding upon the Borrower and ELECTROGAZ in accordance with its terms. Section 5.03. The date,A Ae /09dp#. is hereby specified for the purposes of Section 12.04 of the General Conditions. -8- Section 5.04. The obligations of the Borrower under Sec- tion 3.02 of this Agreement and the provisions of paragraph (e) of Section 4.01 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall termin-, ate or on a date twenty-six years after the date of this Agree- ment, 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 the Borrower responsible for Finance 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 des Finances et de l'Economie Botte Postale 158 Kigali Rwandese Republic Cable address: Telex: MINIFIN 04 or 021 PUB KGL Kigali 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) 64145 (WUI) 89650 (WUT) or 197688 (TRT) 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. RWA;DESE REPUBLIC By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION gio 1 Vice President Eastern 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 and the allocation of amounts of the Credit to each Category: Amount of the Credit Allocated (Expressed in Category SDR Equivalent) (1) Rehabilitation of the Ntaruka 2,460,000 generating station (2) New transmission lines 940,000 (3) Equipment for maintenance; 2,080,000 spare parts (4) Vehicles 850,000 (5) Consultants' 290,000 services for supervision of works (6) Refunding of Project 940,000 Preparation Advance due under Section 2.02 (b) of this Agreement (7) Unallocated 940,000 TOTAL 8,500,000 2. To the extent that the amount allocated to Category (6) above is in excess of the amount due, the balance will be reallocated to category (7). 3. 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; - 11 - (b) payments made for expenditures prior to the date of this Agreement; or (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. 4. 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. 5. 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 - SCHEDULE 2 Description of the Project The main objectives of the Project are to provide reli- ability of production, transmission and distribution of electri- cal energy to meet the needs of consumers and to sustain the economic growth of the country. In addition, the capabilities of ELECTROGAZ as an institution in the technical management of its electricity operation and in personnel management and training will be strengthened with the help of financial and technical advisers. The Project includes the following: Part A: Rehabilitation of the Ntaruka generating station; construction of new transmission lines from Ntaruka to Cyanika and from Gifurwe to Gakenke/Nemba. Part B: Rehabilitation of the transmission system, including lines, transformers, switching stations and telecommu- nications. Part C: Strengthening of ELECTROGAZ's management and opera- tions, including personnel management, management of electricity operations and staff training, with the assistance of consultants and experts; acquisition of vehicles. Part D: Expansion of ELECTROGAZ's inventory of maintenance equipment and spare parts. * * * * The Project is expected to be completed by December 31, 1987. 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 0 -day of 198 FOR SECRETARY