Conformed Copy - C1937 - Public Enterprise Sector Adjustment Program - Japanese Grant Agreement

Page 1 CONFORMED COPY JAPANESE GRANT RELATED TO CREDIT NUMBER 1937 MLI Japanese Grant Agreement (Public Enterprise Sector Adjustment Program) between REPUBLIC OF MALI and INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINISTRATOR of the Japanese Funds within the framework of the SPECIAL FACILITY for SUB-SAHARAN AFRICA Dated September 7, 1988 JAPANESE GRANT RELATED TO CREDIT NUMBER 1937 MLI JAPANESE GRANT AGREEMENT AGREEMENT, dated September 7, 1988, between REPUBLIC OF MALI (the "Beneficiary") and INTERNATIONAL DEVELOPMENT ASSOCIATION as Administrator of the Japanese Funds within the framework of the Special Facility for Sub- Saharan Africa (the "Administrator"). WHEREAS (A) the Executive Directors of the International Development Association ("IDA") have established by their Resolution No. IDA 85-1 of May 21, 1985, (the "Resolution"), a Special Facility for Sub-Saharan Africa (the "African Facility") constituted by the funds contributed by the International Bank for Reconstruction and Development (the "Bank") and other donors and administered by IDA, acting as Administrator of the African Faci- lity, for the purpose of, and in accordance with, the provisions of the Resolution; (B) pursuant to Section F of the Resolution, the Government of Japan ("Japan") has agreed to provide Japanese funds in the form of a contribution (the "SJF Contribution") in support of programs of structural change, policy reform and institutional improvement in countries which are eligible for financing from the African Facility's resources and, by the agreement described in the exchange of notes dated November 20, 1985 and August 19, 1986 and in the further exchange of letters, both dated July 21, 1987, between Japan and IDA concerning the SJF Contribution, Japan and IDA have agreed that IDA will act as Administrator of the SJF Contribution; Page 2 (C) the Administrator has received a letter dated April 21, 1988 from the Beneficiary describing a program of actions, objectives and policies designed to achieve structural adjustment of the Beneficiary's Public Enterprise Sector (the "Program"), declaring, inter alia, the Beneficiary's commitment to the execution of the same Program; (D) the Beneficiary has requested Japanese funds from the Administrator for the financing of urgently needed imports required during execution of the Program and the Administrator has determined that the provision of such funds in an amount of one thousand million Japanese Yen (Y 1,000,000,000) (the "Japanese Grant") would be in accordance with the provisions of the Resolution; (E) by an agreement of even date hereof between the Beneficiary and IDA (the "Program Development Credit Agreement"), IDA is agreeing to provide additional assistance in the financing of the Project (as hereinafter defined) in an amount of twenty-nine million four hundred thousand Special Drawing Rights (SDR 29,400,000) (the "Program Development Credit"); (F) the Borrower has also requested IDA to provide assistance towards the financing of a Public Enterprise Institutional Development Project in support of the Program and by an agreement of even date herewith between the Borrower and IDA (the "Companion Development Credit Agreement"), IDA is agreeing to provide such assistance in an aggregate principal amount equivalent to seven million Special Drawing Rights (SDR 7,000,000) (the "Companion IDA Credit"); (G) the Beneficiary intends to obtain from the Japan Overseas Economic Cooperation Fund ("OECF") a loan (the "OECF Loan") in an amount up to four thousand million Japanese Yen (Y 4,000,000,000), to assist in the financing of the Project (as hereinafter defined) under the terms and conditions set forth in an agreement (the "OECF Loan Agreement") to be entered into between the Beneficiary and OECF; (H) the Beneficiary has contracted from the Saudi Fund for Development a loan (the "Saudi Loan") in an amount of twenty two million Saudi Rials (SR 22,000,000) to assist in the financing of the Project (as hereinafter defined) on terms and conditions set forth in an agreement (the "Saudi Loan Agreement") dated February 12, 1987 between the Beneficiary and the Saudi Fund for Development; and WHEREAS the Administrator has agreed on the basis, inter alia, of the foregoing, to extend the Japanese Grant to the Beneficiary upon the terms and conditions set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Development Credit Agreements" of IDA, dated January 1, 1985, with the modifications set forth below (the "General Conditions") constitute an integral part of this Agreement: (a) the term "Association", when used in the General Conditions, means the Administrator, except in the phrase "member of the Association" in Sections 2.01 (5) and 6.02 (e) thereof; (b) the terms "Development Credit Agreement", "Credit" and "Credit Account" when used in the General Conditions, are amended to read "Japanese Grant Agreement", "Japanese Grant" and "Japanese Grant Account", respectively; (c) Sections 3.02, 3.03, 3.04, 3.05, 4.02, 4.03, 4.06, 6.05, 7.01, 8.01 (a), 12.02 and 12.05 and the second sentence of Section 5.01 are deleted; (d) in Section 6.02, the term "Association" shall also include IDA acting in its own capacity; Page 3 (e) in Section 2.01, paragraph 9 is amended to read: "'Project' means the imports and other activities that may be financed out of the proceeds of the Japanese Grant pursuant to the provisions of the Schedule to the Japanese Grant Agreement". (f) the term "Borrower", wherever used in the General Conditions, means the Beneficiary; and (g) the term "SITC" means the United Nations Standard International Trade Classification, Revised, Statistical Papers, Series M, No. 34/Rev. 3 (1986). Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions, in the Preamble to this Agreement and in the Program Development Credit Agreement have the respective meanings therein set forth. ARTICLE II The Japanese Grant Section 2.01. The Administrator agrees to extend to the Beneficiary, on the terms and conditions set forth or referred to in this Agreement, an amount in various currencies equivalent to one thousand million Japanese Yen (Y 1,000,000,000). Section 2.02. (a) The amount of the Japanese Grant may be withdrawn from the Japanese Grant Account in accordance with the provisions of the Schedule to this Agreement, for expenditures made (or, if the Administrator shall so agree, to be made) in respect of the Project and to be financed out of the proceeds of the Japanese Grant. (b) Withdrawals shall be made only on account of expenditures for goods and services produced in the territories of: (i) any Part II member of IDA; and (ii) any country designated by IDA, acting as Administrator of the African Facility, as meeting the provisions set forth in paragraphs 4 (f) (ii) and (iii) of the Resolution.. (c) Notwithstanding the provisions of subparagraph (a) above, the Administrator shall, at the request of Japan, suspend the Beneficiary's right to make withdrawals under this Agreement if an event shall have occurred which would have entitled the Administrator to suspend the Beneficiary's right to make withdrawals under the Program Development Credit Agreement (whether or not the full amount of the Program Development Credit has then been withdrawn), provided however that, notwithstanding any such request from Japan, the Administrator may in its discretion permit withdrawals under this Agreement in respect of expenditures for which the Administrator has entered into special commitments pursuant to Section 5.02 of the General Conditions. Section 2.03. The Closing Date shall be December 31, 1990 or such later date as the Administrator shall establish. The Administrator shall promptly notify the Beneficiary of such later date. Section 2.04. Except as the Administrator shall otherwise agree, procurement of goods and works to be financed out of the proceeds of the Japanese Grant shall be governed by the provisions of Schedule 2 to the Program Development Credit- Agreement. Section 2.05. (a) The National Manager (Directeur National) of BCEAO is designated as representative of the Beneficiary 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. (b) Without limitation or restriction to the foregoing, the Beneficiary hereby entrusts BCEAO with responsibility for the preparation of withdrawal applications under the Japanese Grant and for the collection of the documents and other evidence to be furnished to the Administrator in support of such applications; such withdrawal applications shall to the extent practicable be consolidated so as to apply for withdrawal of aggregate amounts of not less than $1,000,000 equivalent. Page 4 ARTICLE III Execution of the Project Section 3.01. Except as otherwise expressly provided herein, Articles III and IV of the Program Development Credit Agreement are hereby incorporated into this Agreement with the same force and effect as if they were fully set forth herein, it being understood that all references in said Articles to the "Association" shall be deemed to be references to the Administrator of the Japanese Grant under this Agreement, all references to the "Credit" shall be deemed to be references to the Japanese Grant, and all references to the "Borrower" shall be deemed to be references to the Beneficiary. ARTICLE IV Effective Date; Termination Section 4.01. The following event is specified as an additional condition to the effectiveness of this Agreement within the meaning of Section 12.01 (b) of the General Conditions, namely, that all conditions precedent to the effectiveness of the Program Development Credit Agreement,. except for the effectiveness of this Agreement, have been fulfilled. Section 4.02. This Agreement and all obligations of the Beneficiary and of the Administrator thereunder shall terminate on December 31,, 1992 or on the date of the disbursement of the balance of the proceeds of the Japanese Grant, whichever shall be the earlier. Section 4.03. The date ninety (90) days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE V Representatives of the Beneficiary; Addresses Section 5.01. Except as provided in Section 2.05 of this Agreement, the Minister of the Beneficiary responsible for finance is designated as representative of the Beneficiary for the purposes of Section 11.03 of the General Conditions. Section 5.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Beneficiary: Ministere des Finances et du Commerce Bamako Republic of Mali Cable address: Telex: MINIFINANCES 2559 MINIFINANCE Bamako Republic of Mali For the Administrator: Administrator of the Japanese Funds (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) Page 5 IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, 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 MALI By /s/ Nouhoum Samassekou Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINISTRATOR of the Japanese funds within the framework of the SPECIAL FACILITY FOR SUB-SAHARAN AFRICA By /s/ Edward V. K. Jaycox Regional Vice President Africa SCHEDULE Withdrawal of the Proceeds of the Japanese Grant 1. Subject to the provisions set forth or referred to in this Schedule, the proceeds of the Japanese Grant may be withdrawn from the Japanese Grant Account for expenditures made (,or, if the Administrator shall. so agree, to be made) in respect of the reasonable cost of goods and services required during the execution of the Program and to be financed out of such proceeds. 2. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) expenditures for goods included in the following SITC groups or sub-groups or any successor groups or sub-groups under future revisions to the SITC, as designated by the Administrator by notice to the Beneficiary: Group Sub-group Description of Items 112 - Alcoholic beverages 121 - Tobacco, unmanufactured, tobacco refuse 122 - Tobacco, manufactured (whether or not containing tobacco substitutes) 525 - Radioactive and associated materials 667 - Pearls, precious and semi-precious stones, unworked or worked 718 718.7 Nuclear reactors, and parts thereof, fuel elements (cartridges), non- irradiated for nuclear reactors 897 897.3 Jewelry of gold, silver or platinum group metals (except watches and watch cases) and goldsmiths' or silversmiths' wares (including set gems) 971 - Gold, non-monetary (excluding gold Page 6 ores and concentrates) (b) expenditures in the currency of the Beneficiary or for goods or services supplied from the territory of the Beneficiary, excluding, if the currency of the Beneficiary is also that of another country, expenditures in such currency for goods or services supplied from the territory of such other country; (c) payments made for expenditures prior to the date of this Agreement except that withdrawals from the Japanese Grant Account in an aggregate amount not exceeding the equivalent of one hundred million Japanese Yen (Y 100,000,000) may be made on account of payments made for such expenditures before that date but after the date four months before the date of this Agreement; (d) expenditures for goods and services procured under contracts costing less than ten thousand Dollars ($10,000) equivalent; (e) expenditures for goods and services supplied under a contract which any national or international financing institution or agency other than IDA shall have financed or agreed to finance; and (f) expenditures for goods intended for a military or para- military purpose or for luxury consumption. 3. (a) No withdrawal shall be made and no commitment shall be entered into to pay amounts to the Beneficiary or others in respect of expenditures to be financed out of the proceeds of the Japanese Grant after the aggregate of the proceeds of the Japanese Grant withdrawn from the Japanese Grant Account and the total amount of such commitments shall have reached the equivalent of four hundred million Japanese Yen (Y 400,000,000), unless the Administrator shall be satisfied, after an exchange of views as described in Section 3.01 of the Program Development Credit Agreement: (i) with the progress achieved by the Beneficiary in the carrying out of the Program; and (ii) that the actions described in Part A of Schedule 3 to the Program Development Credit Agreement have been taken. (b) no further such withdrawal or commitment shall be made after such aggregate shall have reached the equivalent of seven hundred million Japanese Yen (Y 700,000,000), unless the Administrator shall be satisfied, after a further such exchange of views: (i) with the further progress achieved by the Beneficiary in the carrying out of the Program; and (ii) that the actions described in Part B of Schedule 3 to the Program Develop- ment Credit Agreement have been taken. 4. If, after such exchange of views described in paragraph 3 above, the Administrator shall have given notice to the Beneficiary that the progress achieved and actions taken are not satisfactory and, within 90 days after such notice, the Beneficiary shall not have achieved progress and taken actions satisfactory to the Administrator, then the Administrator may, by notice to the Beneficiary, cancel the unwithdrawn amount of the Japanese Grant or any part thereof.