Ghana - Accra - Tema Water Supply And Sewerage Project : Credit 0160 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 160 GH Development Credit Agreement (Accra/Tema Water Supply and Sewerage Project) BETWEEN REPUBLIC OF GHANA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED AUGUST 28, 1969 CONFORMED COPY CREDIT NUMBER 160 GH Development Credit Agreement (Accra/Tema Water Supply and Sewerage Project) BETWEEN REPUBLIC OF GHANA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED AUGUST 28, 1969 AGREEMENT, dated August 28, 1969, between REPUBLIC OF GHANA (hereinafter called the Borrower) and INTERNA- TIONAL DEVELOPMENT AssoCIATION (hereinafter called the Association). ARTICLE I General Conditions; Definitions SECTION 1.01. The parties to this Development Credit Agreement accept all the provisions of the General Condi- tions Applicable to Development Credit Agreements of the Association, dated January 31, 1969, with the same force and effect as if they were fully set forth herein, subject, however, to the following modification thereof (said Gen- eral Conditions Applicable to Development Credit Agree- ments of the Association, as so modified, being hereinafter called the General Conditions) : The words "or the Project Agreement" are added after the words "the Development Credit Agreement" in Section 8.02. SECTION 1.02. Wherever used in this Development Credit Agreement, unless the context otherwise requires, the sev- eral terms defined in the General Conditions have the re- spective meanings therein set forth and the following addi- tional terms have the following meanings: (a) " GWSC" means the Ghana Water and Sewerage Corporation, a statutory corporation established by the Ghana Water and Sewerage Corporation Act, 1965, of the Borrower. (b) "Project Agreement" means the agreement between the Association and GWSC of even date herewith, provid- ing for the carrying out of the Project, as the same shall be amended from time to time by agreement between the Borrower, the Association and GWSC. 4 (c) ",Subsidiary Loan Agreement" means the agreement referred to in Section 4.03(a) of this Agreement to be entered into between the Borrower and GWSC, as the same shall be amended from time to time with the approval of the Association. ARTICLE II The Credit SECTION 2.01. The Association agrees to lend to the Bor- rower, on the terms and conditions in this Development Credit Agreement set forth or referred to, an amount in various currencies equivalent to three million five hundred thousand dollars ($3,500,000). SECTION 2.02. (a) The Association shall open a Credit Account on its books in the name of the Borrower and shall credit to such Account the amount of the Credit. (b) The amount of the Credit may be withdrawn from the Credit Account as provided in, and subject to the rights of cancellation and suspension set forth in, this Develop- ment Credit Agreement and in accordance with the alloca- tion of the proceeds of the Credit set forth in Schedule 1 to this Agreement, as such allocation shall be modified from time to time pursuant to the provisions of such Schedule or by further agreement between the Borrower and the Association. SECTION 2.03. The Borrower shall be entitled to with- draw from the Credit Account in respect of the reasonable cost of goods or services required for the Project and to be financed under this Development Credit Agreement: (i) such amounts as shall have been paid (or, if the Association shall so agree, shall be required to meet payments to be made) for goods or services in- cluded in Categories I, III, IV and VI of the allo- 5 cation of the proceeds of the Credit referred to in Section 2.02 of this Agreement; and (ii) such amounts as (A) shall have been paid (or, if the Association shall so agree, shall be required to meet payments to be made) for, and (B) shall represent the foreign exchange component (as determined by the Association) of, the goods or services included in Categories II and V of the allocation of the pro- ceeds of the Credit referred to in Section 2.02 of this Agreement. SECTION 2.04. Except as the Association shall otherwise agree, no withdrawals from the Credit Account shall be made under Categories I, III, IV and VI of the allocation of the proceeds of the Credit referred to in Section 2.02 of this Agreement on account of payments in the currency of the Borrower, or for goods produced in, or services sup- plied from, the territories of the Borrower. SECTION 2.05. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. SECTION 2.06. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (4 of 1%1) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. SECTION 2.07. Service charges shall be payable semi- annually on June 15 and December 15 in each year. SECTION 2.08. The Borrower shall repay the principal amount of the Credit withdrawn from the Credit Account in semi-annual installments payable on each June 15 and December 15 commencing December 15, 1979 and ending June 15, 2019, each installment to and including the install- 'II 6 ment payable on June 15, 1989 to be one-half of one per cent (1/ of 1%) of such principal amount, and each install- ment thereafter to be one and one-half per cent (1/%) of such principal amount. ARTICLE III Use of Proceeds of the Credit SECTION 3.01. The Borrower shall cause the proceeds of the Credit to be applied in accordance with the provi- sions of this Development Credit Agreement to expendi- tures on the Project, described in Schedule 2 to this Agree- ment. SECTION 3.02. Except as the Association shall otherwise agree, (i) the goods and services to be financed out of the proceeds of the Credit shall be procured on the basis of international competitive bidding in accordance with the Guidelines for Procurement under World Bank Loans and IDA Credits, published by the Bank in February 1968, and in accordance with such other procedures supplementary thereto as are set forth in Schedule 3 to this Agreement, and (ii) contracts for the procurement of such goods and services shall be subject to the prior approval of the Asso- ciation, except as otherwise provided in such Schedule 3. SECTION 3.03. Until the completion of the Project, the Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively in carrying out the Project, except as the Association may otherwise agree. ARTICLE IV Particular Covenants SECTION 4.01. The Borrower shall cause the Project to be carried out with due diligence and efficiency and in con- 7 fornity with sound administrative, financial, engineering and public utility practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. SECTION 4.02. (a) The Borrower shall take all action which shall be necessary on its part to enable GWSC to perform all its obligations under the Project Agreement and shall not take any action that would interfere with the performance of such obligations by GWSC. (b) Without limiting or restricting the Borrower's obli- gations under paragraph (a) of this Section, the Borrower specifically undertakes to enable GWSC to establish and maintain tariffs at such levels as may be necessary for GWSC to fulfill the requirements of Section 2.09 of the Project Agreement. (c) The Borrower shall consult the Association about any proposed appointment to the position of Managing Director of GWSC sufficiently in advance of any such ap- pointment for the Association to have adequate opportunity to comment on the qualifications and experience of the person, or persons, the Borrower is considering for such position and shall make any such appointment only after consideration of the views expressed by the Association. SECTION 4.03. (a) The Borrower shall relend the pro- ceeds of the Credit, or the equivalent thereof, to GWSC on terms and conditions and pursuant to a subsidiary loan agreement satisfactory to the Association. (b) The Borrower shall exercise its rights under the Subsidiary Loan Agreement in such manner as to protect the interests of the Borrower and the Association, and, except as the Association shall otherwise agree, the Bor- rower shall not amend, assign, abrogate or waive any pro- vision of the Subsidiary Loan Agreement. 8 SECTION 4.04. The Borrower shall maintain or cause to be maintained records adequate to identify the goods and services financed out of the proceeds of the Credit, to dis- close the use thereof in the Project and to record the prog- ress of the Project (including the cost thereof); shall en- able the Association's representatives to inspect the Proj- ect, such goods and services and any relevant records and documents; and shall furnish or cause to be furnished to the Association all such information as the Association shall reasonably request concerning the Project and such goods and services. SECTION 4.05. (a) Thc Borrower and the Association shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, each of them shall furnish to the other all such information as shall be reasonably requested with regard to the general status of the Credit. On the part of the Borrower, such information shall include information with respect to financial and economic conditions in the territories of the Borrower and the international balance of payments position of the Bor- rower. (b) The Borrower and the Association shall from time to time exchange views through their representatives with regard to matters relating to the purposes of the Credit and the maintenance of the service thereof. The Borrower shall promptly inform the Association of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Credit or the mainte- nance of the service thereof. (c) The Borrower shall afford all reasonable opportunity for accredited representatives of the Association to visit any part of the territories of the Borrower for purposes related to the Credit. 9 SECTION 4.06. Except as the Association shall otherwise agree, the Borrower shall enter into, and maintain in effect, arrangements with GWSC, satisfactory to the Asso- ciation, providing for the payment by GWSC to the Bor- rower of 20,000,000 New Cedis in currency of the Borrower on account of debt incurred for fixed assets of GWSC and serviced by the Borrower, such arrangements to provide, inter alia, that: (i) payment of such amount shall be made o-;er a term of 20 years commencing in June 1973; (ii) GNWSC shall pay to the Borrower interest on the unpaid balance of such amount at a rate of 61/27 per annum; and (iii) payment of such amount and of interest thereon shall be subordinated to all debt of GWSC owed to creditors other than the Borrower. The Borrower shall not, without the agreement of the As- sociation, amend, abrogate or waive any provision of such arrangements. SECTION 4.07. Except as the Association shall other- wise agree, the Borrower shall reimburse GWSC on a quarterly basis for any amounts owing to GWSC from local authorities for water supplied which remain unpaid two months after billing. SECTION 4.08. Except as the Association shall otherwise agree, the Borrower shall enter into an agreement with GWSC within one year from the date of this Agreement establishing values acceptable to the Association for the fixed assets of GWSC transferred by the Borrower to GWSC. SECTION 4.09. Except as the Association shall otherwise agree, the Borrower shall: 10 (i) provide all funds, without resort to the financial resources of GWSC, required to meet the capital and development cost of any water supply or sewerage projects or other services which do not meet GWSC's investment criteria and which are undertaken by GWSC solely at the request of the Borrower; and (ii) reimburse GWSC on a quarterly basis the amounts of any losses incurred by GWSC in operating arid maintaining any such projects or providing any such services. SEcTION 4.10. The principal of, and service charges on, the Credit shall be paid without deduction for, and free from, any taxes, and free from all restrictions, imposed under the laws of the Borrower or laws in effect in its territories. SECTION 4.11. This Development Credit Agreement, the Project Agreement and the Subsidiary Loan Agreement shall be free from any taxes that shall be imposed under the laws of the Borrower or laws in effect in its territories on or in connection with the execution, delivery or regis- tration thereof. ARTICLE V Remedies of the Association SECTIoN 5.01. If any event specified in Section 7.01 of the General Conditions or in Section 5.02 of this Agreement shall occur and shall continue for the period, if any, therein set forth, then at any subsequent time during the continu- ance thereof, the Association, at its option, may by notice to the Borrower declare the principal of the Credit then outstanding to be due and payable immediately together with the service charges thereon and upon any such declara- 11 tion such principal, together with such charges, shall be- come due and payable immediately, anything in this Do- velopment Credit Agreement to the contrary notwith- standing. SECTION 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are. specified: (a) A default shall occur in the performance of any obligation of GVWSC under the Project Agreement, and such default shall continue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower and GWSC. (b) Before the Project Agreement shall have terminated in accordance with its terms, the Ghana Water and Sewer- age Corporation Act, 1965, shall have been amended, with- out the agreement of the Association, so as to affect mate- rially and adversely the carrying out of the Project or the operations or financial condition of GWSC, and such evont shall continue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower. SECTION 5.03. For the purposes of Section 6.02 of the General Conditions, the following additional event is specified: An extraordinary situation shall have arisen which shtAll make it improbable that GNWSC will be able to perfonin its obligations under the Project Agreement. ARTICLE VI Effective Date; Termination SECTION 6.01. The following events are specified as ad- ditional conditions to the effectiveness of this Development 12 Uredit Agreement within the meaning of Section 10.01(b) of the General Conditions: (n) the exceution and delivery of the Project Agreement on behalif of GWSC have been duly authorized or ratified by all necessary corporate and governmental action; (b) the Borrower and (WSC have entered into the Sub- midiary Lonln Agreciment in form satisfactory to the Asso- cintion, and lie Subsidiary Loan Agreement has become fully effective and binding on the parti -s thereto in accord- aINe with its terms, subject only to lie effectiveness of th oit(is Aeemet ; and (t) tie Borrower and (IW,<- have entered into the ar- nigenientis referred to in Section 4.06 of this Agreement. H is,( 3.02. The following are specified as additional In slm within the me1aning of Section 10.02(b) of the Gen- etal ('onditioni, to be included in the opinion or opinions lo be furiiNh4d to the Association: t that the Proj ect grieemenit has been duly authorized s ligifiid by, and excented and delivered on behalf of, MV mnd costitutes a valid and binding obligation of OWNt in atoordance with itm teris; and Ish th at the s Muhidiaiy Loan Agreement has been duly A uthihl (sr ratilled by, and executed and delivered on blIf Isf, te hxrower and W and constitutes valid å41d binag sligatios of the BoI'rower' and GWSc in s 1nrduurt ih its termn% S4% The date of December 1, 1969 is hereby et: d for the purp ose of seetion 10.04 of the General m The obligations of the Borrower under 41 434, 4 0 f and 4.,) of this Agreemnent s n the date on which this )evelopmuent 13 Credit Agreement shall terminate or on the date on which the Project Agreement shall terminate in accordance with its terms, whichever shall be the earlier. ARTICLE VII Miscellaneous SECTION 7.01. The Closing Date shall be June 30, 1973 or such other date as shall be agreed between the Bor- rower and the Association. SECTION 7.02. The Commissioner responsible for Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 9.03 of the General Conditions. SECTION 7.03. The following addresses are specified for the purposes of Section 9.01 of the General Conditions: For the Borrower: The Principal Secretary Ministry of Finance P. O. Box M40 Accra, Ghana Alternative address for cables: Prudence Accra For the Association: International Development Association 1818 H Street, N.W. Washington, D. C. 20433 United States of America Alternative address for cables: Indevas Washington, D. C. 14 IN WITNESS WHEREOF, the parties hereto, acting through their i'epresentatives thereunto duly authorized, have caused this Development Credit Agreement to be signed in their respective names and to be delivered in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF GIANA By /s/ E. M. DEBRTIAH Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ SImoN ALiEWERELD Vice President 15 SCHEDULE 1 Allocation of Proceeds of Credit Amounts Expressed Category in Dollar Equivalent I. Water distribution mains, service connections and water meters 1,480,000 II. Installation of items in Category I 180,000 III. Sewer pipes and accessories 460,000 IV. Sewage pumps and electrical and mechanical equipment 240,000 V. Construction of sewage pumping stations and installation of items in Categories III and IV 650,000 VI. Consulting Services 230,000 VII. Unallocated 260,000 Total 3,500,000 Reallocation Upon Change in Cost Estimates 1. If the estimate of the cost of the items included in any of the Categories I to VI shall decrease, the amount of the Credit then allocated to, and no longer required for, such Category will be reallocated by the Association to Cate- gory VII. 2. If the estimate of the cost of the items included in any of the Categories I to VI shall increase, an amount equal to the portion, if any, of such increase to be financed out of the proceeds of the Credit will be allocated by the Asso- ciation, at the request of the Borrower, to such Category from Category VII, subject, however, to the requirements for contingencies, as determined by the Association, in respect of the cost of the items in the other Categories. 16 SCHEDULE 2 Description of the Project The Project consists of the following: A. The improvement and expansion of the water supply system of Accra, including the laying of new mains to enable diversion of water from Accra terminal reservoir to Western Accra, laying of new mains and extension of secondary and tertiary distribution grids to serve develop- ing areas in and around Accra and provision for service connections and water meters required to meet anticipated needs up to the end of 1972; B. The extension of the main distribution grid of the water supply system of Tema to supply water to new hous- ing developments and meet increase in demand from com- mercial and industrial consumers; C. The construction of a sewerage system in Accra to serve certain residential areas, including East and West Ridge, Ussher Town, James Town, the Ministries Area and the industrial and commercial areas of central Accra, in- cluding the provision of ocean outfalls, intercepting sewers, branch and lateral sewers and appurtenant works and the building and equipping of three pumping stations; and D. The improvement of GWSC's organization and op- erations. The construction of the Project is expected to be com- pleted by December 31, 1972. 17 SCHEDULE 3 Supplementary Procedures for procurement of Goods Referred to in Section 3.02 of this Agreement 1. With respect to contracts for the procurement and/or installation of goods, estimated to cost in excess of (i) in the case of water meters, $25,000 equivalent and (ii) in the case of all other goods, $50,000 equivalent; (a) If prequalification of bidders is used, notices of pre- qualification and a description of the prequalification and advertising procedures to be followed will be submitted to the Association for review and approval prior to the issu- ance of notices of prequalification. (b) Invitations to bid, specifications, conditions of con- tract, all other tender documents and the method and places of advertising will be submitted to the Association for its review and approval prior to the issuance of invitations to bid. (c) After bids have been received and analyzed, the anal- ysis of the bids, and the proposals for awards, together with the reasons for such proposals, will be submitted to the Association for its review and approval prior to the Borrower's making any award of contract or issuing any letter of intent. (d) If the final contract is to differ substantially from the terms and conditions contained in the respective docu- ments approved by the Association under paragraphs (b) and (c) above, the text of the proposed changes will be submitted to the Association for its review and approval prior to the execution of such contract or issuance of any letter of intent. (e) As soon as a letter of intent has been issued or a contract has been executed, a copy thereof will be sent to the Association. 18 2. With respect to such contracts estimated to cost (i) in the case of water meters $25,000 equivalent or less and (ii) in the case of all other goods, $50,000 equivalent or less, copies of the invitation to bid, the bid analysis and evalua- tion, the contract or order and any other documents the Association may request will be sent to the Association promptly after the execution of the respective contract or order and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract.