Ghana - Sugar Rehabilitation Project : Credit 0354 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 354 GH Development Credit Agreement (Sugar Rehabilitation Project) BETWEEN REPUBLIC OF GHANA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JANUARY 29, 1973 CONFORMED COPY CREDIT NUMBER 354 GH Development Credit Agreement (Sugar Rehabilitation Project) BETWEEN REPUBLIC OF GHANA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JANUARY 29, 1973 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated January 29, 1973, between REPUBLIC OF GHANA (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). 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 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 modifications thereof (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, being hereinafter called the General Conditions): (a) Section 5.01 is deleted; (b) Section 6.02(h) is deleted and Section 6.02(i) becomes 6.02(h); and (c) the words "or the GHASEL Project Agreement or the ADB Project Agreement" are added after the words "the Development Credit Agreement" in Section 8.02. Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings, reference to an agreement being reference to such agreement as the same may, with the approval of the Association, be amended from time to time by agreement between the parties thereto and including all schedules (including agreements scheduled thereto as the same may likewise be amended), appendices, statements or annexes thereto: (a) "ADB" means the Agricultural Development Bank established by the Agricultural Development Bank Act. (b) "Agricultural Development Bank Act" means the Agricultural Development Bank Act, 1965 (Act 286), as amended by the Agricultural Credit and Co-operative Bank Act, 1965 (Amendment) Decree, 1967 (N.L.C.D. 182), dated June 22, 1967. 4 (c) (i) "ADB Consultancy Agreement" means the agreement dated January 8, 1973 between ADB and Berenschot Bosboom N.V. a company established with limited liability under the laws of the Netherlands. (ii) "ADB Project Agreement" means the agreement of even date herewith between the Association and ADB. (iii) "ADB ubsidiary Loan Agreement" means the agreement to be entered into between the Borrower and ADB on terms and conditions satisfactory to the Borrower for the lending by the Borrower to ADB of $1,400,000 equivalent. (d) "Cedis" means Cedis in the currency of the Borrower. (e) "GHASEL" means Ghana Sugar Estates Limited, a company established with limited liability under the laws of Ghana. (f) (i) "GHASEL-ADB Agreement" means the agreement to be entered into between GHASEL and ADB referred to in Section 3.03 of the ADB Project Agreement. (ii) "GHASEL Project Agreement" means the agreement of even date herewith between the Association and GHASEL. (iii) "GHASEL Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and GHASEL on terms and conditions satisfactory to the Association for the lending by the Borrower to GHASEL of $14,433,000 equivalent out of the proceeds of the Credit and of certain additional amounts out of its own resources. (g) "GIHOC" means the Ghana Industrial Holding Corporation established under the Ghana Industrial Holding Corporation Decree, 1967 (N.L.C.D. 207), dated September 16, 1967, as amended by the Ghana Industrial Holding Corporation (Amendment) Act, 1970. (h) "GIHOC Transfer Decree" means the transfer of assets (GIHOC Sugar Estates) Decree, 197 relating to the transfer to GHASEL of the assets and liabilities referred to in Clause 7(b)(iii) of the Management and Subscription Agreement. 5 (i) "GWSC" means the Ghana Water and Sewerage Corporation. (j) (i) "Management and Subscription Agreement" means the agreement dated December 18, 1972 between the Borrower, GIHOC, GHASEL and H.V.A.-Internationaal N.V., a company established with limited liability under the laws of the Netherlands having its registered office in Amsterdam. (ii) "Management Company" means the said H.V.A.-Internationaal N.V. or such other management company as the Association shall approve engaged by GHASEL in accordance with Section 3.02 of the GHASEL Project Agreement. (k) "Specified Agreements" means the ADB Consultancy Agreement, ADB Project Agreement, ADB Subsidiary Loan Agreement, GHASEL-ADB Agreement, GHASEL Project Agreement, GHASEL Subsidiary Loan Agreement and Management and Subscription Agreement. (1) "Sugar Industry Committee" means the committee to be established by the Borrower referred to in Section 4.06 hereof. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equivalent to fifteen million six hundred thousand dollars ($15,600,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule I to this Agreement, as such Schedule 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 required for the Project described in Schedule 2 to this Agreement and to be financed under the Development Credit Agreement; provided, however, that, except as the Association shall otherwise agree, no withdrawal 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. 6 Section 2.03. Except as the Association shall otherwise agree, the goods and services required for the Project and to be financed out of the proceeds of the Credit shall be procured pursuant to the provisions set forth or referred to in Section 2.04 of the GHASEL Project Agreement. Section 2.04. The Closing Date shall be March 31, 1979 or such other date as shall be agreed between the Borrower 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 (3/4 of 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 May 15 and November 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit withdrawn from the Credit Account in semi-annual installments payable on each May 15 and November 15 commencing May 15,1983 and ending November 15, 2022, each installment to and including the installment payable on November 15, 1992 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 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall take and shall cause all its agencies to take all action which shall be necessary to enable GHASEL and ADB to carry out Parts A and B, respectively, of the Project and shall itself carry out, or cause to be carried out, Parts C and D of the Project, in each case with due diligence and efficiency and in conformity with sound business, agricultural, engineering, administrative and financial practices and the Borrower shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose of carrying out the Project. (b) The Borrower shall lend to GHASEL under the GHASEL Subsidiary Loan Agreement 7 (i) out of the proceeds of the Credit, an amount in various currencies equivalent to $14,433,000; (ii) out of its own resources, an amount in various currencies equivalent to $6,395,000 less the dollar equivalent (as at the date of payment) of any sum payable by the Borrower to GHASEL in cash by way of share subscription in accordance with Clause 7(b)(iii) of the Management and Subscription Agreement; and (iii) out of its own resources, an amount of up to Cedis 3,000,000 as required by GHASEL for working capital purposes. (c) The Borrower shall lend to ADB under the ADB Subsidiary Loan Agreement an aggregate amount in various currencies equivalent to S1,400,000, $972,000 equivalent thereof out of the proceeds of the Credit and $428,000 equivalent thereof out of its own resources. (d) The Borrower shall exercise its rights under the GHASEL Subsidiary Loan Agreement and the ADB Subsidiary Loan Agreement in such manner as to protect the interests of the Borrower and the Association and to accomplish the purposes of the Credit, and, except as the Association shall otherwise agree, the Borrower shall not assign, nor amend, abrogate or waive the GHASEL Subsidiary Loan Agreement or the ADB Subsidiary Loan Agreement or any of the provisions thereof. (e) The Borrower shall take and shall cause all its agencies to take all action which shall be necessary to enable GHASEL, ADB and the Managenient Company to perform all of their respective obligations inder the Specified Agreements and shall not take or permit to be taken any action which might interfere with such performance. (f) The Borrower shall take and shall cause to be taken all action which shall be necessary (i) to implement the transfer to GHASEL pursuant to the GIHOC Transfer Decree of the sugar business carried on by the Sugar Division of GIHOC; and (ii) to complete the valuation referred to in Section 8.01(f) hereof by not later than June 30, 1973 or such later date as the Association shall agree. 8 Section 3.02. (a) The Borrower shall exercise its rights as shareholder of GHASEL to procure that GHASEL shall perform all of its obligations under each of the Specified Agreements to which it is party. (b) Save as provided in the Management and Subscription Agreement, the Borrower shall not without the prior approval of the Association: (i) sell, transfer, charge or otherwise dispose of any shares in GHASEL or of any interest therein from time to time held by it; (ii) permit any such disposal of any shares in GHASEL or of any interest therein from time to time held by the Management Company or any affiliates or subsidiaries thereof; (iii) permit any increase in the authorized or issued share capital of GHASEL or other alteration of capital or variation of rights attached thereto; and (iv) permit any alteration of the Regulations of GHASEL as in force at the date hereof. Section 3.03. The Borrower shall appoint consultants acceptable to the Association upon terms and conditions satisfactory to it for the purpose of carrying out Part D of the Project by not later than June 30, 1974. Section 3.04. Except as the Association shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the Project. Section 3.05. (a) The Borrower shall furnish to the Association, promptly upon their preparation, the plans, reports, contract documents and work schedules for Parts C and D of the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) The Borrower shall (i) maintain records adequate to record the progress of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Credit, and to disclose the use thereof in the Project; (ii) enable the Association's representatives to inspect the Project, the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) furnish to the Association all such information as the 9 Association shall reasonably request c-oncerning the Project, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. Section 3.06. (a) The Borrower shall take, or cause to be taken, all such action as shall be necessary to acquire as and when needed all interests in land and rights in respect of land as shall be required for carrying out the Project and shall furnish to the Association, promptly after such acquisition, evidence satisfactory to the Association that such interests in land and rights in respect of land are available for purposes related to the Project. (b) In the event that it shall appear to the Association that the total quantity of sugarcane available to GHASEL from its estates and neighboring farms at Asutsuare or from its estates and neighboring farms at Komenda are insufficient to meet the respective capacities from time to time of its sugarcane factories thereat and that either (i) the sugarcane production levels from such neighboring farms at Asutsuare for the years ending September 30, 1976, 1977 and 1978 shall be less than 109,000, 115,000 and 122,000 tons respectively and for the year ending September 30, 1978 and any subsequent year shall be less than 128,000 tons, or sugarcane production levels from such neighboring farms at Komenda for the year ending September 30, 1976 and any subsequent year shall be less than 72,000 tons, or (ii) such insufficiency shall arise in any such year for any other reason notwithstanding the attainment of the production levels specified in sub-paragraph (i) hereof the Borrower shall transfer to and vest in, or cause to be transferred to and vested in, GHASEL such additional land suitable for sugarcane growing, or shall take such other action as the Association shall approve, to enable GHASEL to increase the total quantity of sugarcane available to it to meet the capacity of its factories at Asutsuare and Komenda as aforesaid. Section 3.07. (a) Not later than July 1, 1973, the Borrower shall cause arrangements satisfactory to the Association (including, without limitation, financial arrangements relating to supply to farmers) to be made for the procurement, supply and distribution by GHASEL of all fertilizers required by GHASEL and by farmers financed under the Project in respect of sugarcane production. 10 (b) Withdrawals from the Credit Account in respect of fertilizers shall distinguish between fertilizers procured for the purposes of Part A and fertilizers procured for the purposes of Part B of the Project. ARTICLE IV Other Covenants Section 4.01. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consistently maintained sound accounting practices the operations, resources and expenditures, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. Section 4.02. (a) The Borrower shall take all steps necessary to facilitate the recruitment of labor by GHASEL as required for the purposes of Part A of the Project; (b) The Borrowei shall promptly cause the water supply system serving factory and domestic requirements at Komenda and to serve, in addition, the pilot irrigation scheme included in the Project, to be put in good and substantial w, rking order and to be maintained in such condition and order. (c) (i) The Borrower shall maintain the water supply and irrigation system at Asutsuare in good and substantial condition and working order and operate the same so as fully to satisfy the water requirements from time to time of the estate of GHASEL thereat; (ii) In the event that, in the opinion of the Association, such requirements shall not be so satisfied, the Borrower shall upon the request of the Association appoint consultants acceptable to it to carry out a study of the said system and to make recommendations for the improvement thereof; (iii) Upon the making of such recommendations the Borrower shall furnish the same to the Association and, in consultation with it, take such action as may be required to implement the same; (iv) In the event that notwithstanding the foregoing provisions such water requirements shall not, in the opinion of the 11 Association, be satisfied (other than by reasons beyond the control of the Borrower) the Borrower shall, upon the request of the Association, transfer the operation of the said system to GHASEL on such terms as the Association shall approve. (d) The Borrower shall cause such foreign exchange to be made available to GHASEL as shall enable GHASEL from time to time to purchase from the original or equivalent suppiliers all necessary spares, replacements, renewals and other parts required for the proper maintenance and repair of its existing milling, refining and other factory and field equipment at Asutsuare and Komenda or, in consultation with the Association, shall take such other action as shall enable GHASEL to maintain and repair its said equipment on a basis no less favorable to GHASEL. Section 4.03. The Borrower shall procure that, except as the Association shall otherwise agree, no import, excise or other dutV, levy or surcharge shall be imposed (save by way of imposition followed immediately by cash refund) at any time on fuel oil or, prior to the Closing Date, on any goods or services required for the Project. Section 4.04. (a) Without limitation to the obligations of GHASEL under the GHASEL Project Agreement, and in particular Section 3.01 and 4.03 thereof, the Borrower shall take such action as shall enable GHASEL to earn the rate of return specified in the said Section 3.03 having due regard to the liability, if any, of GHASEL to taxation from time to time. (b) In addition, the Borrower shall have due regard to the provisions of sub-section (a) hereof in making or varying any imposition permitted by Section 4.03 hereof or in taking any action as referred to in Section 4.05 hereof. Section 4.05. If the Borrower shall consider that the measures relating to the importation, and marketing of sugar in effect at the date of this Agreement are not operating satisfactorily to regulate the supply of sugar and to promote the efficiency of the sugar industry, the Borrower, in consultation with the Association, may replace, vary or supplement such measures in such manner as the Borrower may consider necessary for such purposes. Section 4.06. The Borrower shall establish a Sugar Industry Committee upon terms of reference as to membership, constitution, function and otherwise, satisfactory to the Association. In particular, but without limitation, the Sugar Industry Committee, which shall include representatives of the Ministries of Finance, Agriculture and Industries and of GHASEL, ADB and sugar growers 12 associations and sugar producers, shall advise the Borrower on matters relating to the sugar industry, including sugarcane prices and sugar prices. ARTICLE V Consultation, Information and Inspection Section 5.01. The Borrower and the Association shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, the Borrower and the Association shall from time to time, at the request of either party: (a) exchange views through their representatives with regard to the performance of their respective obligations under the Development Credit Agreement, the performance by GHASEL and ADB of their respective obligations under the Specified Agreements to which either of them is a party, the administration, operations and financial condition, resources and expenditures of GHASEL and ADB and, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof, and other matters relating to the purposes of the Credit; and (b) furnish to the other all such information as it shall reasonably request 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, including its balance of payments, and the external debt of the Borrower, of any of its political subdivisions and of any agency of the Borrower or of any such political subdivision. Section 5.02. (a) The Borrower shall furnish or cause to be furnished to the Association all such information as the Association shall reasonably request concerning the operations and financial condition, resources and expenditures of GHASEL and ADB and, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower and the Association shall promptly inform each other of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Credit, the maintenance of the service thereof, or the performance by either of them of its obligations tinder the Development Credit Agreement or the performance by GHASEL and ADB of their respective obligations under the Specified Agreements to which either is a party. Section 5.03. The Borrower shall afford all reasonable opportunity for accredited representatives of the Association to inspect all farms, estates, factories, 13 plants, installations, sites, works, buildings, property and equipment of GHASEL and ADB and any relevant records and documents and to visit any part of the territories of the Borrower for purposes related to the Credit. ARTICLE VI Taxes and Restrictions Section 6.01. 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 6.02. The Development Credit Agreement, the GHASEL Project Agreement and the ADB Project Agreement shall be free from any taxes on or in connection with the execution, delivery or registration thereof imposed under the laws of the Borrower or laws in effect in its territories. Section 6.03. The payment of the principal of, and service charges on, the Credit shall be free from all restrictions, regulations, controls and moratoria of any nature imposed under the laws of the Borrower or laws in effect in its territories. ARTICLE VII Remedies of the Association Section 7.01. If any event specified in Section 7.01 of the General Conditions or in Section 7.03 of this Agreement shall occur and shall continue for the period, if any, therein set forth, then at any subsequent time during the continuance 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 declaration such principal and service charges shall become due and payable immediately, anything to the contrary in the Development Credit Agreement notwithstanding. Section 7.02. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified: (a) GHASEL shall have failed to perform any covenant, agreement or obligation of GHASEL under the GHASEL Project Agreement or the GHASEL Subsidiary Loan Agreement. 14 (b) ADB shall have failed to perform any covenant, agreement or obligation of ADB under the ADB Project Agreement or the ADB Subsidiary Loan Agreement. (c) Any of the parties to the Management and Subscription Agreement shall have failed in a manner adverse to the Association or the Project to perform any of their respective covenants, agreements or obligations thereunder save where the Management and Subscription Agreement shall have been terminated by reason of the default of the Management Company and arrangements satisfactory to the Association shall have been entered into providing for the continuance of the management of GHASEL. (d) The Agricultural Development Bank Act shall, without the prior consent of the Association, have been amended, suspended, abrogated, repealed or waived in such a way as to materially and adversely affect the ability of ADB to carry out any of its covenants, agreements and obligations under the Specified Agreements to which it is a party. (e) The Borrower or any other authority having jurisdiction shall, without the prior consent of the Association, have taken any action for the dissolution or disestablishment of GHASEL or ADB or for the suspension of their respective operations. (f) GHASFI shall have become unable to pay its debts as they mature or any action or prc ing shall have been taken by GHASEL or by others whereby any of the property of GHASEL shall or may be distributed among its creditors. (g) An extraordinary situation shall have arisen which shall make it improbable that GHASEL cr ADB will be able to perform their respective obligations under any of the Specified Agreements to which they are respectively party. Section 7.03. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified: (a) the event specified in Section 7.02(a) of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower, GHASEL and ADB. (b) any event specified in Section 7.02(d), (e) or (f) of this Agreement shall occur. (c) the Borrower or GHASEL shall have failed in a manner adverse to the Association or the Project to perform any of their respective covenants, 15 agreements or obligations under the Management and Subscription Agreement and such event shall continue for a period of 60 days after notice thereof shall have been given by the Association to the Borrower and GHASEL. ARTICLE VIII Effective Date; Termination Section 8.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 10.01(b) of the General Conditions: (a) The Borrower has established the Sugar Industry Committee in accordance with Section 4.06 hereof. (b) The execution and delivery of each of the Specified Agreements on behalf of each of the parties thereto, respectively, have been duly authorized or ratified by all necessary corporate and governmental action. (c) ADB has written off in its accounts all debts, formerly owing to the Rural Credit Department of the Bank of Ghana and subsequently transferred by such Department to ADB, which are properly regarded as irrecoverable. (d) GHASEL has submitted to the Association a detailed work program in respect of the carrying out of Part A of the Project in terms satisfactory to the Association. (e) (i) Unencumbered freehold title to the sugarcane estate at Asutsuare comprising 18,730 acres approximately 40 miles northeast of Accra adjacent to the Volta River below Akosombo Dam together with the sugarcane factory situated thereon is duly vested in GHASEL. (ii) Unencumbered leasehold title for an unexpired term of not less than 50 years to the sugarcane estate at Komenda comprising 5,705 acres approximately 120 miles west of Accra adjacent to the coast together with the sugarcane factory sitUated thereon is duly vested in GHASEL. (iii) GHASEL is entitled (in the case of the estate at Komenda, during the said term of years) to full exclusive and uninterrupted possession of the said estates and to carry on the business of sugarcane production and processing thereat. 16 (f) All of the assets and liabilities referred to in Clause 7(b)(iii) of the Management and Subscription Agreement have been duly vested in, delivered to and assumed by GHASEL as therein mentioned, and the valuation referred to in the said Clause is in course of being carried out. Section 8.02. The following are specified as additional matters, within the meaning of Section 10.02(b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association, namely, that (i) each of the Specified Agreements has been duly authorized or ratified by, and executed and delivered on behalf of, each of the parties thereto other than the Association and constitutes a valid and binding obligation of each such party in accordance with its terms; (ii) the GIHOC Transfer Decree has been duly issued and is in full force and effect in Ghana in accordance with its terms; (iii) no compe!sation is due or payable by GHASEL Linder the State Lands (Akase-Asutsuare Sugar Project) Instrument, 1969 or otherwise and no rental accruing prior to the Effective Date is due or payable by GHASEL in respect of the sugarcane estate at Komenda; and (iv) the titles and possession referred to in Section 8.01(e) hereof are duly vested in GHASEL. Section 8.03. The date April 30, 1973, is hereby specified for the purposes of Section 10.04 of the General Conditions. Section 8.04. The obligations of the Borrower under Sections 3.02, 3.06, 3.07, 4.02, 4.03, 4.04 and 4.05 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date 30 years after the date of this Agreement, whichever shall be the earlier. ARTICLE IX Representative of the Borrower; Addresses Section 9.01. The Principal Secretary, Ministry of Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 9.03 of the General Conditions. Section 9.02. 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 17 Cable address: Prudence Accra For the Association: International Development Association 1818 H 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 GHANA By /s/ H. R. Amonoo Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Roger Chaufournier Regional Vice President Western Africa 18 SCHEDULE I 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, the allocation of amounts of such proceeds to each category and the percentage of eligible expenditures so to be financed in each category: Amount of the Credit % of Allocated (Expressed in Expenditures Category Dollar Equivalent) to be Financed I. Part A: GHASEL (i) Civil Works 2.211 100% of foreign expenditures or, if locally pro- cured, 55% of to- tal expenditures (ii) Equipment and 5.959 ( 100% of foreign Vehicles ( expenditures or, ( if locally pro- ( cured, 80% of lo- (iii) Fertilizers * 0.404 ( cal expenditures (iv) Expatriate Management (a) Salaries and 2.565 55% of total ex- Expenses penditures (b) Management 1.680 100% of foreign Fees expenditures 11. Part B: ADB (i) Fertilizers * 0.274 100% of foreign expenditures or, if locally pro- cured, 80% of lo- cal expenditures (ii) Land Development 0.596 60% of ADB loans to farmers exclud- ing fertilizers * See Section 3.07(b) of the Development Credit Agreement. 19 Amount of the Credit % of Allocated (Expressed in Expenditures Category Dollar Equivalent) to be Financed III. Part C: Technical Assistance 0.150 100% of foreign to ADB expenditures IV. Part D: Industry Expansion 0.045 100"V of foreign Study expenditures V. Unallocated 1.716 15.600 20 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures for goods produced in, or services supplied from, the territories, and in the currency, of any country other than the Borrower, (b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods produced in, or services supplied from, the territories of the Borrower; and (c) the term "total expenditures" means the aggregate of foreign and local expenditures. 3. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of: (a) expenditures prior to the date of this Agreement except that withdrawals may be made in respect of Categories I and III on account of expenditures incurred after October 1, 1972 in an aggregate amount not exceeding the equivalent of S300,000; (b) payments for taxes imposed under the laws of the Borrower or laws in effect in its territories on goods or services, or on the importation, manufacture, procurement or supply thereof. To the extent that the amount represented by the percentage set forth in the third column of the table in paragraph I above in respect of any Category would exceed the amount payable net of all such taxes, such percentage shall be reduced to ensure that no proceeds of the Credit or of the Loan will be withdrawn on account of payments for such taxes; 4. Notwithstanding the allocation of an amount of the proceeds of the Credit set forth in the second column of the table in paragraph I above: (a) if the estimate of the expenditures under any Category shall decrease, the amount of the proceeds of the Credit then allocated to such Category and no longer required therefor will be reallocated by the Association by increasing correspondingly the unallocated amount of the proceeds of the Credit; (b) if the estimate of the expenditures under any Category shall increase, the percentage set forth in the third column of the table in paragraph I above in respect of such expenditures shall be applied to the amount of such increase and a corresponding amount will be allocated by the Association, at the request I 21 of the Borrower, to such Category from the unallocated amount of the proceeds of the Credit subject, however, to the requirements for contingencies, as determined by the Association, in respect of any other expenditures; and (c) 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 Section 2.04 of the GHASEL Project 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 reasonable opinion of the Association represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. 5. Notwithstanding the percentages set forth in the third column of the table set out in paragraph I above, if the estimate of total expenditures under any sub-category of Category I or 11 shall increase and no proceeds of the Credit are available for reallocation to such Category, the Association may, by notice to the Borrower. adjust the percentage then applicable to such expenditures in order that further withdrawals Under either such Category may continue until all expenditures thereunder shall have been made. 22 SCHEDULE 2 Description of the Project The Project is the re-establishment of the sugarcane industry in Ghana on a viable basis and consists of the following Parts: Part A: (1) Planting of GHASEL estate cane of approximately 2,300 acres at Asutsuare and 1,250 acres at Komenda, replanting of GHASEL estate cane of approximately 4,100 acres at Asutsuare and 3,250 acres at Komenda, and fertilization thereof and related activities. (2) Rehabilitation of irrigation works at Asutsuare and installation of pilot scheme irrigation works at Komenda. (3) Rehabilitation, modification and additions to GHASEL cane transport and field equipment, cane yard, mill, workshops and laboratory at Asutsuare and Komenda and to GHASEL refinery at Asutsuare. (4) Completion of partly built housing and provision of new housing and of training, health and social facilities for management, staff and labor of GHASEL. (5) Provision of vehicles for management and staff of GHASEL. (6) Provision of GHASEL senior management, supervisory and extension services staff. Part B: Extension by ADB of credit facilities for the planting of farmers' cane of approximately 2,375 acres at Asutsuare and 1,500 acres at Komenda, the re-planting of farmers' cane of approximately 5,200 acres at Asutsuare and 3,500 acres at Komenda, and fertilization thereof and related activities. Part C: Technical assistance to ADB in implementing improved credit accounting and control, reviewing its present financial position and advising on credit policies and procedures. 23 Part D. Study to determine the feasibility of further expansion of sugar and sugar by-product production at Asutsuare, Komenda or elsewhere. The Project is expected to be completed by September 30, 1978.