Haiti - Emergency Economic Recovery Credit : Credit 2670 - Credit Agreement - Conformed

CREDIT NUMBER a6 - HA Development Credit Agreement (Emergency Economic Recovery Credit) between REPUBLIC OF HAITI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated -- 6. , 199Y CREDIT NUMBER A & HA DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated J, , 199 between REPUBLIC OF HAITI (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS: (A) a joint mission (the Joint Mission) consisting of representatives of the United Nations Development Program, the International Monetary Fund, the Inter-American Development Bank, the Organization of American States, the United States Agency for International Development and the Association assembled in Port-au- Prince during May and June of 1993 to assist the Borrower in identifying the major components of the Borrower's economic and social program; (B) the Borrower, in conjunction with the Joint Mission, developed an emergency economic recovery program (EERP), dated October 1993, aimed at: (a) improving the short-term living conditions of the Borrower's population, focused on the most disadvantaged groups, employment creation and economic infrastructure (including environmental works); and (b) facilitating arrangements to channel effectively external assistance for the execution of the EERP; (C) the Borrower, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, within the context of the EERP, has requested the Association to assist in the financing of the Project; 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 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 the Association, dated January 1, 1985, with the last sentence of Section 3.02 deleted (the General Conditions) constitute an integral part of this Agreement. Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble -2- to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Central Coordination Unit" means the unit referred to in Section 3.03 (b) of this Agreement; (b) "Fiscal Year" means the Borrower's fiscal year, which begins on October 1 and ends on September 30 of each year; and (c) "Steering Committee" means the committee referred to in Section 3.03 (a) of this Agreement. 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 the Development Credit Agreement, an amount in various currencies equivalent to twenty-six million eight hundred thousand Special Drawing Rights (SDR 26,800,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement. Section 2.03. The Closing Date shall be December 31, 1995 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. Section 2.04. (a) The Borrower shall pay to the Association a commitment charge on the principal amount of the Credit not withdrawn from time to time at a rate to be set by the Association as of June 30 of each year, but not to exceed the rate of one-half of one percent (1/2 of 1%) per annum. (b) The commitment charge shall accrue: (i) from the date sixty days after the date of this Agreement (the Accrual Date) to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or cancelled; and (ii) at the rate set as of the June 30 immediately preceding the Accrual Date or at such other rates as may be set from time to time thereafter pursuant to paragraph (a) above. The rate set as of June 30 in each year shall be applied from the next payment date in that year specified in Section 2.06 of this Agreement. - 3 - (c) The commitment charge shall be paid: (i) 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 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one percent (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 June 1 and December 1 in each year. Section 2.07. (a) Subject to paragraphs (b) and (c) below, the Borrower shall repay the principal amount of the Credit in semi- annual installments payable on each June 1 and December 1 commencing June 1, 2005 and ending December 1, 2034. Each installment to and including the installment payable on December 1, 2014 shall be one percent (1%) of such principal amount, and each installment thereafter shall be two percent (2%) of such principal amount. (b) Whenever (i) the Borrower's gross national product per capita, as determined by the Association, shall have exceeded $790 in constant 1985 Dollars for five consecutive years and (ii) the Bank shall consider the Borrower creditworthy for Bank lending, the Association may, subsequent to the review and approval thereof by the Executive Directors of the Association and after due consideration by them of the development of the Borrower's economy, modify the terms of repayment of installments under paragraph (a) above by requiring the Borrower to repay twice the amount of each such installment not yet due until the principal amount of the Credit shall have been repaid. If so requested by the Borrower, the Association may revise such modification to include, in lieu of some or all of the increase in the amounts of such installments, the payment of interest at an annual rate agreed with the Association on the principal amount of the Credit withdrawn and outstanding from time to time, provided that, in the judgment of the Association, such revision shall not change the grant element obtained under the above-mentioned repayment modification. (c) If, at any time after a modification of terms pursuant to paragraph (b) above, the Association determines that the -4- Borrower's economic condition has deteriorated significantly, the Association may, if so requested by the Borrower, further modify the terms of repayment to conform to the schedule of installments as provided in paragraph (a) above. Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.09. (a) The Director of the Central Coordination Unit or any person designated by him or her in writing 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. (b) Without limitation or restriction to the foregoing, the Borrower hereby entrusts the Central Coordination Unit with responsibility for the preparation of withdrawal applications and for the collection of the documents and other evidence to be furnished to the Association in support of such applications. (c) The withdrawal applications mentioned in subparagraph (b) above shall, to the extent practicable, be consolidated so as to apply for withdrawal of aggregate amounts of not less than $2,000,000 equivalent. ARTICLE III Execution of the Project Section 3.01. The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement, and, to this end, shall carry out the Project with due diligence and efficiency and in conformity with appropriate administrative, financial and managerial practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. Section 3.02. 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 Schedule 3 to this Agreement. -5- Section 3.03. (a) The Borrower shall maintain, at all times until the completion of the Project, a steering committee with composition, functions and responsibilities satisfactory to the Association, for the purposes of coordinating and overseeing the carrying out of the Project. (b) The Borrower shall maintain, at all times during the execution of the Project, a central coordination unit to assist the Steering Committee in the carrying out of all its functions and responsibilities and having, in particular, the following functions and responsibilities: (i) expedite the procurement and disbursement activities required under the Project, through a specialized sub-unit; and (ii) prepare and present the reports referred to in Section 3.05 of this Agreement. (c) The Borrower shall ensure that the Central Coordination Unit: (i) avails of technical, administrative, economic and financial autonomy; and (ii) is exempted from the general rules applicable to public sector entities in the areas of personnel recruitment, procurement and budgetary management, all in a manner satisfactory to the Association and conducive to the efficient execution of the Project. (d) The Borrower shall ensure that the Central Coordination Unit is, at all times until completion of the Project, headed by professionals with qualifications and experience acceptable to the Association, assisted by qualified staff in adequate numbers. (e) Without limitation or restriction to the provisions of Section 3.01 of this Agreement, the Borrower shall provide, promptly as needed, the funds, facilities, services and other resources required for the discharge of the functions of the Steering Committee and the Central Coordination Unit. -6- Section 3.04. Without limitation or restriction upon the provisions of Section 9.06 of the General Conditions, by no later than January 31, April 30, July 31 and October 31, of each year, during the execution of the Project, starting in April 30, 1995, the Borrower, through the Central Coordination Unit, shall furnish to the Association, for its review and comments, a report on the progress achieved in the execution of the Project, with regard to the quarters ending December 31, March 31, June 30 and September 30, respectively, of such scope and in such detail as the Association may reasonably request. Section 3.05. Without limitation or restriction upon the provisions of Section 9.01 of the General Conditions, the Borrower shall: (a) by no later than June 30, 1995, review, in conjunction with the Association, the overall progress in the execution of the Project, the compliance with the Borrower's obligations under this Agreement and the achievement of the objectives of the Project; and (b) if, as a result of the above review, the Association determines that the progress in the execution of the Project or in the achievement of its objectives is not satisfactory, the Borrower, through the Steering Committee, shall promptly take all such action, satisfactory to the Association, as shall be necessary for the efficient execution of the Project or the general achievement of its objectives. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records and separate accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of the Project. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a) of this Section for each Fiscal Year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; -7- (ii) furnish to the Association, as soon as available, but in any case not later than four months after the end of each such year, a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records, accounts and the audit thereof as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) retain, until at least one year after the Association has received the audit report for the Fiscal Year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents, or customs certificates, as appropriate) evidencing such expenditures; (iii) enable the Association's representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such Fiscal Year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. -8- ARTICLE V Effective Date Section 5.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) that the Steering Committee and the Central Coordination Unit shall have been established; and (b) that the professionals referred to in Section 3.03 (d) shall have been appointed. Section 5.02. The date I4L.-1 46 010/}'.( is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Minister of Economy and Finance 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 purposes of Section 11.01 of Lhe General Conditions: For the Borrower: Ministry of Economy and Finance Palais des Minist6res Port-au-Prince Haiti Telex: 20347 FINANCE A date approximately ninety (90) days after the date of this Agreement will be inserted. - 9- For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 248423 (RCA) Washington, D.C. 82987 (FTCC) 64145 (WUI) or 197688 (TRT) IN WITNESS WHEREOF, tlie 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 HAITI By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By P77A), Regional Vice President Latin America and the Caribbean - 10 - SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Category of items to be financed out of the proceeds of the Credit, the allocation of the amount of the Credit to such Category and the percentage of expenditures for items so to be financed under such Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed Imports 26,800,000 100% of foreign expenditures TOTAL 26,800,000 2. For the purposes of this Schedule: (a) the term "Imports" means the goods listed in Schedule 4 to this Agreement; and (b) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Borrower for goods supplied from the territory of any country other than that of the Borrower. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) payments made prior to the date of this Agreement for expenditures, except that withdrawals, in an aggregate amount not to exceed SDR 13,400,000 may be made in respect of the Category of the table set forth in said paragraph 1, on account of payments made for such expenditures before that date but after October 15, 1994 or before October 18, 1993 but after June 4, 1993; (b) expenditures for goods procured under contracts costing less than $1,000 equivalent; - 11 - (c) expeyditures for goods supplied under a contract which any national or international financing institution or agency other than the Association shall have financed or agreed to finance; and (d) expenditures in excess of an aggregate amount equivalent to $1,000,000 for foodstuffs. 4. The Association may require withdrawals from the Credit Account to be made on the basis of statements of expenditure for expenditures under contracts for goods not exceeding $1,000,000 equivalent, under such terms and conditions as the Association shall specify by notice to the Borrower. - 12 - SCHEDULE 2 Description of the Project The objective of the Project is to provide urgently needed support for the reactivation of the Borrower's economy, the initiation of its economic recovery process and the provision of an immediate stimulus to economic growth. The Project consists of the financing of emergency imports for the key sectoral components of the EERP set forth in Schedule 4 to this Agreement. The Project is expected to be completed by December 31, 1995. - 13 - SCHEDULE 3 Procurement of Goods Part A: International Competitive Bidding 1. Except as provided in Part B hereof, goods shall be procured under contracts awarded in accordance with procedures consistent with those set forth in Sections I and II of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in May 1992 (the Guidelines), and in accordance with the following additional procedures: (a) When contract award is delayed beyond the original bid validity period, such period may be extended once, subject to and in accordance with the provisions of paragraph 2.59 of the Guidelines, by the minimum amount of time required to complete the evaluation, obtain necessary approvals and clearances and award the contract. The bid validity period may be extended a second time only if the bidding documents or the request for extension shall provide for appropriate adjustment of the bid price to reflect changes in the cost of inputs for the contract over the period of extension. Such an increase in the bid price shall not be taken into account in the bid evaluation. With respect to each contract made subject to the Association's prior review in accordance with the provisions of Part C.1 (a) of this Section, the Association's prior approval will be required for: (i) a first extension of the bid validity period if the period of extension exceeds sixty (60) days; and (ii) any subsequent extension of the bid validity period. (b) In the procurement of goods in accordance with this Part A, the Borrower shall use the relevant standard bidding documents issued by the Bank, with such modifications thereto as the Association shall have agreed to be necessary for the purposes of the Project. Where no relevant standard bidding documents have been issued by the Bank, the Borrower shall use bidding documents based on other internationally recognized standard forms agreed with the Association. 2. The Guidelines shall be modified as follows: (a) Paragraph 2.8 of the Guidelines is deleted and the following is substituted therefor: - 14 - "2.8 Notification and Advertising The international community should be notified in a timely manner of the opportunity to bid. This will be done by advertising invitations to apply for inclusion in a bidder's invitation list, to apply for prequalification, or to bid; such advertisements should be placed in at least one newspaper of general circulation in the Borrower's country and, in addition, in at least one of the following forms: (i) a notice in the United Nations publication, Development Forum, Business Edition; or (ii) an advertisement in a newspaper, periodical or technical journal of wide international circula- tion; or (iii) a notice to local representatives of countries and territories referred to in the Guidelines, that are potential suppliers of the goods re- quired." (b) The following is added at the end of paragraph 2.21 of the Guidelines: "As a further alternative, bidding documents may require the bidder to state the bid price in a single currency widely used in international trade and specified in the bidding documents." (c) Paragraphs 2.55 and 2.56 of the Guidelines are deleted. 3. To the extent practicable, contracts shall be grouped into bid packages estimated to cost the equivalent of $500,000 or more. Part B: Other Procurement Procedures 1. Subject to the prior approval of the Association, direct contracting may be used for transactions costing the equivalent of $3,000,000 or more, pursuant to paragraph 3.5 of the Guidelines. 2. Contracts for the procurement of goods estimated to cost the equivalent of less than $3,000,000 shall be awarded: - 15 - (a) by purchasers required to follow the Borrower's public procurement procedures for the importation of goods, on the basis of such procedures, provided that such procedures shall have been found acceptable by the Association; and (b) by other purchasers, in accordance with established commercial practice, provided that such contracts shall be awarded on the basis of evaluation and comparison of quotations obtained from at least two suppliers eligible under the Guidelines, except that direct contracting procedures, acceptable to the Association, may be used pursuant to paragraph 3.5 of the Guidelines. 3. Subject to the prior approval of the Association, commonly traded commodities may be procured through organized international commodity markets or other channels of competitive procurement acceptable to the Association, in accordance with procedures acceptable to the Association, provided, however, that in respect of petroleum imports under existing contracts entered into with oil suppliers, the Association shall finance out of the Credit: (a) an amount not to exceed, per unit, the average between lower and higher FOB prices reflected in the Platt's Oilgram for the US Gulf Coast or the Caribbean, as applicable, for the relevant date of loading (with due adjustment for type and quality of crude or petroleum product); and (b) the cost of the related freight and insurance procured on a competitive basis from a source eligible under the Guidelines. Part C: Review by the Association of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to each contract referred to in Parts A and B.1 hereof, the Borrower shall furnish to the Association, prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids and recommendations for award, a description of the advertising and tendering procedures followed and such other information as the Association shall reasonably request. (b) With respect to each contract not governed by the preceding paragraph, the Borrower shall furnish to the Association, - 16 - prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect thereof, such documentation and information as the Association may reasonably request to support withdrawal applications in respect of such contract. (c) The provisions of the preceding subparagraph (b) shall not apply to contracts on account of which withdrawals from the Credit Account are to be made on the basis of statements of expenditure. 2. The figure of 10% is hereby specified for purposes of paragraph 4 of Appendix 1 to the Guidelines. - 17 - SCHEDULE 4 Imports For Agriculture . seeds . seed processing and packaging equipment . processing equipment and materials for agricultural products including storage, drying, milling, canning, and other processing and extraction equipment and machinery . packaging equipment, materials and machinery . phytosanitary products, insecticides, fungicides and fumigation products . agricultural equipment and machinery, including trucks and heavy earth moving equipment and spare parts . tools, including hand tools . plastic products related to agricultural production, including bags, specialized films, packaging materials and containers . testing and production control equipment . fertilizers For Industry . utility and four wheel drive vehicles and spare parts . heavy machinery, boilers and mechanical machines . tractors . tools, including hand tools . miscellaneous For Power . gasoline, fuel-oil, gas-oil and lubricants . asphalt . tar . other petroleum derivatives . turbines and parts . equipment for generation and transmission of energy - 18 - For Roads and Bridges . heavy machinery and parts . structures . concrete iron . signalization equipment . topographic, geotechnic, hydraulic and laboratory equipment . tools truck balance For Ports and Sea Transport . equipment and materials for ports and port installations . materials and consumables for signalization . wharf protection materials . boats and boat equipment For Water Supply, Sanitation and Waste . pumps . drains and pipes . hydrants, valves and plumbing accessories . garbage collection trucks and equipment . electric control panels . fencing materials . electro-mechanic equipment - For Urban and General Infrastructure . steel, aluminium and metal products for construction and maintenance . cement . wood . pipes, tubes and plumbing equipment . ceramic products For Health and Nutrition . flour . sugar and sugar products . oils . cereals . rice . food preparatives - 19 - . residues from the food industry . soya beans . dairy products . fish . pharmaceutical products . family planning items . medical and laboratory equipment . training and teaching materials For Education . school building equipment and materials . school furniture . teaching materials Other Imports communications and information . computers and accessories . radio-telephones, telephone switches and other communication equipment and systems chemical products refrigeration equipment packing materials, plastics and rubber ink, pigments and paints glass essential oils, soap, waxes, glues and enzymes textiles . silk and wool . cotton . other natural and synthetic fibers leather goods pulp, paper, wood and wood products cloth and other raw materials INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Development Association. FOR SECRETARY