Tunisia - Agricultural Credit Project : Credit 0263 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 263 TUN Development Credit Agreement (Agricultural Credit Project) BETWEEN REPUBLIC OF TUNISIA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JULY 12, 1971 CREDIT NUMBER 263 TUN Development Credit Agreement (Agricultural Credit Project) BETWEEN REPUBLIC OF TUNISIA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JULY 12, 1971 AGREEMENT, dated July 12, 1971, between REPUBLIC oF TUNISIA (hereinafter called the Borrower) and INTER- NATIONAL DEVELOPMENT AssocIuTION (hereinafter called the Association). WHEREAS the Borrower and the Banque Nationale de Tunisie (hereinafter called BNT), respectively, have re- quested the Association and the Bank to assist in the finan- cing of the foreign exchange cost of the Project described in Schedule 1 to this Agreement; WHEREAS by an agreement of even date herewith between the Bank and BNT (hereinafter called the Loan Agree- ment) the Bank has agreed to make a loan to BNT in an amount in various currencies equivalent to five million dollars ($5,000,000), on the terms and conditions set forth in said Loan Agreement, but only on condition that the Borrower agrees to guarantee the obligations of BNT in respect of such loan; WHEREAS by an agreement of even date herewith between the Borrower and the Bank (hereinafter called the Guaran- tee Agreement) the Borrower has agreed so to guarantee the obligations of BNT; 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; 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 4 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 dele- tion of Sections 5.01 and 6.02 (h) thereof and to the renum- bering of Section 6.02 (i) into 6.02 (h) thereof (said Gen- eral Conditions Applicable to Development Credit Agree- ments of the Association, as so modified, being hereinafter called the General Conditions). ARTICLE II The Credit SECTION 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in the Develop- ment Credit Agreement set forth or referred to, an amount in various currencies equivalent to three million dollars ($3,000,000). SECTION 2.02. The amount of the Credit may be with- drawn from the Credit Account in accordance with the provisions of Schedule 2 to this Agreement, as such Sched- ule shall be amended from time to time, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services re- quired for the Project and to be financed under the De- velopment Credit Agreement; provided, however, that, except as the Association shall otherwise agree, no with- drawal shall be made on account of expenditures in the territories of any country which is not a member of the Bank (other than Switzerland) or for goods produced in, or services,supplied from, such territories. SECTION 2.03. Except as the Association shall otherwise agree, the goods and services (other than services of con- sultants) required for the Project and to be financed out of the proceeds of the Credit, shall be procured in accordance with, and subject to, the provisions set forth in Schedule 3 to this Agreement. 5 SECTION 2.04. The Closing Date shall be September 30, 1975 or such other date as shall be agreed between the Bor- rower and the Association. SECTION 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/ 4of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. SECTION 2.06. Service charges shall be payable semi- annually on March 15 -and September 15 in each year. SECTION 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each March 15 and September 15 commencing Septem- ber 15, 1981 and ending March 15, 2021 each installment to and including the installment payable on March 15, 1991 to be one-half of one per cent (1/2 of 1%) of such prin- cipal amount, and each installment thereafter to be one and one-half per cent (11/%) of such principal amount. 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. The Director General of BNT is desig- nated 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. The Borrower shall cause BNT to duly and punctually perform all obligations provided to be performed by it pursuant to Sections 3.01, 3.02, 3.03, 3.04, 3.05, 3.06, 3.07, 4.01, 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 6 5.01, 5.02 and 5.03 of the Loan Agreement with the same force and effect as if they were fully set forth herein; provided, however, tha t: (i) all references to the Bank in such Sections or in any of them shall be deemed to be refer- ences to the Association, and (ii) all references in such Sections or in any of them to the Loan shall be deemed to be references to the Credit. SECTION 3.02. Sections 3.02, 3.03, 3.04, 3.05, 3.06, 3.07, 3.08, 4.01 and 4.02 of the Guarantee Agreement are hereby incorporated into this Agreement with the same force and effect as if they were fully set forth herein; provided, how- ever, that: (i) all references to the Guarantor in such Sections or in any of them shall be deemed to be references to the Borrower, (ii) all references to the Bank in such Sections or in any of them shall be deemed to be references to the Association, (iii) all references to the Borrower in such Sections or in any of them shall be deemed to be references to BNT, and (iv) all references to the Loan in such Sections or in any of them shall be deemed to be references to the Credit. SECTION 3.03. So long as any part of the Loan provided for under the Loan Agreement or the Bonds shall remain outstanding and unpaid, all actions taken, including a.p- provals given, by the Bank pursuant to the Sections of the Loan Agreement enumerated in Section 3.01 of this Agree- ment, or pursuant to the Sections of the Guarantee Agree- ment enumerated in Section 3.02 of this Agreement, shall be deemed to be taken or given in the name and on behalf of both the Bank and the Association; and all information furnished by the Borrower or BNT to the Bank pursuant to the provisions of such Sections, shall be deemed to be furnished to both the Bank and the Association. SECTION 3.04. Except as the Association shall otherwise agree, the Borrower shall relend the proceeds of the Credit or the equivalent thereof to BNT on the following terms: 7 (i) interest at 1% per annum on the principal amount out- standing from time to time 'and (ii) amortization in fifteen years including five years of grace. ARTICLE IV Taxes and Restrictions SECTION 4.01. The principal of, and service charges on, the Credit shall be paid without deduction for, and free from, any taxes imposed under the laws of the Borrower or laws in effect in its territories. SECTION 4.02. The Development Credit Agreement shall be free from any taxes on or in connection with the execu- tion, delivery or registration thereof, imposed under the laws of the Borrower or laws in effect in its territories. SECTIoN 4.03. The payment of the principal of, and service charges on, the Credit shall be free from all restric- tions, regulations, controls and moratoria of any nature imposed under the laws of the Borrower or laws in effect in its territories. ARTICLE V Remedies of the Association SECTION 5.01. If any event -specified in Section 7.01 of the General Conditions or in Section 5.03 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 decla- ration such principal and service charges shall become due and payable immediately, anything to the contrary in the Development Credit Agreement notwithstanding. 0 8 SECTION 5.02. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified: (a) Any part of the principal amount of any loan to BNT having an original maturity of one year or more shall, in accordance with its terms, have become due and payable in advance of maturity as provided in the rela- tive contractual instruments, or any security for any such loan shall have become enforceable. (b) The BNT Statutes shall have been amended or re- pealed so as to affect materially and adversely the opera- tions or financial condition of BNT. (c) A change, which in the judgment of the Association would materially and adversely affect the objectives, finan- cial condition or operations of the BNT, shall have been made in the Statement of Policy without the Association's consent. (d) A subsidiary or any other entity shall have been created or acquired or taken over by BNT, if such creation, acquisition or taking over would adversely affect the con- duct of the BNT's business or BNT's operations or finan- cial situation or the carrying out of the Project. SECTION 5.03. For the purposes of Section 7.01 of the General Conditions the following events are specified: (a) Any event specified in Section 5.02 (a), (b) or (c) shall occur. (b) The event specified in Section 5.02 (d) of this Agree- ment shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower. ARTICLE VI Effective Date; Termination SECTION 6.01. The following events are specified as ad- ditional conditions to the effectiveness of the Development Credit Agreement within the meaning of . tion 10.01 (b) 9 of the General Conditions: (a) The terms and conditions for the relending of the proceeds of the Credit, or the equivalent thereof, in accordance with Section 3.04 of this Agreement shall have been accepted and agreed upon by the Borrower and BNT; and (b) The conditions precedent to the effectiveness of the Loan Agreement shall have been fulfilled, subject only to the effectiveness of this Development Credit Agreement. SECTION 6.02. The following is specified as an additional matter within the meaning of Section 10.02 (b) of the General Conditions, to be included in the opinion or opin- ions to be furnished to the Association: The relending agreement referred to in Section 3.04 of this Agreement is valid and binding on the part of the Borrower and BNT. SECTION 6.03. The date October 15, 1971 is hereby speci- fied for the purposes of Section 10.04 of the General Con- ditions. SECTION 6.04. The provisions of the Sections of the Loan Agreement enumerated in Section 3.01 of this Agreement, and of the Sections of the Guaranteo Agreement enumer- ated in Section 3.02 of this Agreemew, -ept Sections 4.01 and 4.02, and all obligations of the parties thereunder shall terminate on the date when the entire proceeds of the Credit shall have been repaid by BNT to the Borrower in accordance with the agreement entered into between them pursuant to Section 3.04 of this Agreement or on the date when the Loan Agreement and the Guarantee Agree- ment and all obligations of the parties thereunder shall terminate, whichever is later. ARTICLE VII Representative of the Borrower; Addresses SECTION 7.01. The Ministre du Plan of the Borrower is designated as representative of the Borrower for the purposes of Section 9.03 of the General Conditions. 0 10 SECTION 7.02. The following addresses are specified for the purposes of Section 9.01 of the General Conditions: For the Borrower: Le Ministre du Plan Ministere du Plan Tunis, Tunisia Cable addresss: Ministre du Plan 1Rue de B6ja Tunis For the Association: International Development Association 1818 II Street, N.W. Washington, D.C. 20433 United States of America Cable address: Indevas Washington, D.C. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this 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 TUNISIA By /s/ SLAHEDDINE EL GOULLI Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ J. BURKE KNAPP Vice President 11 SCHEDULE 1 Description of the Project The Project is part of the Borrower's agricultural lend- ing program for commercial farmers investing in grain farm mechanization and dairy farm development in North- ern Tunisia and for STIL investing in date palm develop- ment in Southein Tunisia, and consists of the following: Part A: The provision of medium- and long-term sub- loans to assist the said farmers in fiancing investments in on-farm improvements including land preparation, ma- chinery and equipment, planting materials, livestock and other agricultural inputs, for the development and expan- sion of their farms for the production ef the aforemen- tioned commodities, and the provision of long-term sub- loans to assist STIL in developing date-palm plantations in Southern Tunisia, including groundwater development, irrigation and drainage network, land preparation, nursery stock, transplanting and maintenance of windbreak trees and date palms, machinery and equipment, buildings for field office, storage, and packaging, and housing for staff and permanent laborers. Part B: The provision of experts to train and supervise the technical staff of the Borrower's Agricultural Credit Division and of STIL's technical staff engaged in date- palm operations, and vehicles for technical services. 12 SCHEDULE 2 Withdrawal of the Proceeds of the Loan and of the Credit 1. The table below sets forth the categories of items to be financed out of the proceeds of the Loan and the Credit, the allocation of amounts of the Loan and the Credit to each category and the percentage of eligible expenditures so to be financed in each category: Amount of the Loan and the Credit Allocated (Expressed in % of Expenditures Category Dollar Equivalent) to be Financed I. Disbursements actually 75% of such effected by the Borrower disbursements on account of sub-loans for investments in: (A) Grain farms 6,000,000 (B) Dairy farms 980,000 (C) Date-palm plantations 810,000 II. Salaries and other 100% of foreign expenditures approved by exchange the Bank for the experts expenditures referred to in Part B of the Project and vehicles for technical services 210,000 TOTAL 8,00000 2. The amount of the Credit shall be withdrawn from the Credit Account as provided under Article II of this Agree- ment, and shall be applied to expenditures incurred under any sub-category or category hereof until the total with- drawals and commitments in respect of -such expenditures shall have reached the equivalent of $3,000,000. 3. The amount of the Loan may be withdrawn from the Loan Account as provided under Article II of the Loan S 13 Agreement and shall be -applied to expenditures incurred under any sub-category or category hereof, provided, however, that such amount shall only be applied to expendi- tures incurred after the amount of the Credit shall have been fully withdrawn or committed. 4. Notwithstanding the provisions of paragraphs 1, 2 and 3 above: (i) no withdrawals shall be made in respect of expendi- tures prior to the date of this Agreement; and (ii) no withdrawal shall be made under Category I in respect of any sub-loan made by the Borrower ex- ceeding $100,000 cquivalent principal amount unless the Bank and the Association shall have approved the making of such sub-loan. 5. If the estimate of the disbursements or expenditures under any sub-category or category shall decrease, the amount of the Loan and the Credit then allocated to, and no longer required for, such sub-category or category will be reallocated, at the request of the Borrower, to any other sub-category or category, subject, however, to the require- ments for contingencies, as determined by the Bank and the Association, in respect of the items in the other sub- categories or category. 14 SCHEDULE 3 Procurement 1. Contracts for drilling and construction for deep wells for date-palm plantations under Schedule 2, I(C) shall be awarded on the basis of international competition under procedure consistent with the Guidelines for Procure- ment under World Bank Loans and IDA Credits published by the Bank in August 1969. With regard to said contracts the Borrower shall send to the Bank and to the Association: (a) copies of tender documents for comments before bids are called for; and (b) analysis of the bids and the Borrower's recommen- dations for approval by the Bank and the Asso- ciation. 2. The Bank and the Association agree however, that con- tracts to be executed before the end of August 1971 for drilling and construction of four deep wells in the Project area be awarded in accordance with the Borrower's pro- curement procedures and not to exceed in the aggregate D 50,000. Copies of such contracts would be transmitted to the Bank and the Association upon award.