Tanzania - Tib Project : Credit 0460 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 460 TA Development Credit Agreement (TIB Project) BETWEEN UNITED REPUBLIC OF TANZANIA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED FEBRUARY 13, 1974 CONFORMED COPY CREDIT NUMBER 460 TA Development Credit Agreement (TIB Project) BETWEEN UNITED REPUBLIC OF TANZANIA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED FEBRUARY 13, 1974 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated February 13, 1974, between UNITED REPUBLIC OF TANZANIA (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 modifications thereof set forth in the Schedule to this Agreement (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, being hereinafter called the General Conditions). 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: a) "Act" means the Tanzania Investment Bank Act, 1970, as amended from time to time; (b) "TIB" means the Tanzania Investment Bank established under the Act and operating under the laws of the Borrower; (c) "Project Agreement" means the agreement between the Association and TIB of even date herewith, as the same may be amended from time to time; (d) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and TIB pursuant to Section 3.02 of this Agreement, as the same may be amended from time to time; (e) "sub-loan" means a loan or credit made or proposed to be made by TIB to an Investment Enterprise for an Investment Project out of such portion of the proceeds of the Credit as will be relent to TIB under the Subsidiary Loan Agreement for the purpose of the Project and "free-limit sub-loan" means a 4 sub-loan, as so defined, which qualifies as a free-limit sub-loan pursuant to the provisions of Section 2.02(c) of this Agreement; (f) "investment" means an investment other than a -ub-loan made or proposed to be made by TIB out of the proceeds of the Credit relent to TIB under the Subsidiary Loan Agreement in an Investment Enterprise for an Investment Project; (g) "Investment Enterprise" means an enterprise to which TIB proposes to make or has made a sub-loan or in which it proposes to make or has made an investment; (h) "Investment Project" means a specific development project to be carried out by an Investment Enterprise utilizing the proceeds of a sub-loan or investment; (i) "Tanzanian Shillings" and "TSh" mean the currency of the Borrower; (j) "foreign currency" means any currency other than the currency of the Borrower; (k) "subsidiary" means any company of which a majority of the outstanding voting stock or other proprietary interest is owned or effectively controlled by TIB or by any one or more subsidiaries of TIB or by TIB and one or more of its subsidiaries; and (1) "Statement of Policy" means the policies set forth in Chapter IV of the TIB Handbook approved by the Directors of TIB on December 18, 1973, as amended from time to time. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in this Agreement set forth or referred to, an amount in various currencies equivalent to six million dollars ($6,000,000). Section 2.02. (a) Except as otherwise agreed between the Borrower and the Association, the amount of the Credit may be withdrawn from the Credit Account for amounts expended (or if the Association shall so agree, for expenditures to be made) by TIB under a sub-loan or investment to finance the reasonable foreign 5 currency cost of goods and services required for the Investment Project in respect of which the withdrawal is requested; provided, however, that no withdrawal shall be made in respect of a sub-loan or investment unless: (i) the sub-loan or investment shall have been approved by the Association; or (ii) the sub-loan shall be a free-limit sub-loan for which the Association shall have authorized withdrawals from the Credit Account. (b) For the purposes of paragraph (a) above, except as otherwise agreed between the Borrower and the Association, withdrawals from the Credit Account shall be authorized by the Association in respect of expenditures under a sub-loan or investment: (i) in a foreign currency for goods procured, or services supplied from, outside the territories of the Borrower, (ii) in Tanzanian Shillings on account of not more than sixty-five per cent (65%) of the invoiced price for goods previously imported into the territories of the Borrower through normal trade channels; (iii) in Tanzanian Shilings on account of not more than forty per cent (40%) of the invoiced price for goods produced in the territories of the Borrower to a substantial extent from materials previously imported into the territories of the Borrower; and (iv) in Tanzanian Shillings on account of not more than forty per cent (40%) of the contract price under civil works and/or construction contracts to be carried out in the United Republic of Tanzania. (c) A free-limit sub-loan shall be a sub-loan for an Investment Project in an amount to be financed out of the proceeds of the Credit which shall not exceed the sum of: (i) $100,000 equivalent, when added to any other outstanding amounts financed or proposed to be financed out of the proceeds of the Credit for any other project directly and materially related to such Investment Project; and (ii) $1,500,000 equivalent, when added to all other free-limit sub-loans financed or proposed to be financed out of the proceeds of the Credit, the foregoing amounts being subject to change from time to time as determined by the Association. 6 (d) Except as the Borrower and the Association shall otherwise agree and subject to the limitation contained in Section 5.01(a) of the General Conditions, no withdrawals shall be made on account of expenditures made by an Investment Enterprise in respect of a sub-loan subject to the Association's approval, or in respect of an investment, more than ninety days prior to the date on which the Association shall have received in respect of such sub-loan or investment the application and information required by Section 2.02 (b) of the Project Agreement or, under a free-limit sub-loan, more than ninety days prior to the date on which the Association shall have received in respect of such free-limit sub-loan the request and information required by Section 2.02(c) of the Project Agreement. Section 2.03. The Closing Date shall be June 30, 1978 or such other date as shall be determined by the Association. Section 2.04. 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 2.05. Service charges shall be payable semi-annually on January 15 and July 15 in each year. Section 2.06. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each January 15 and July 15 commencing July 15, 1984, and ending January 15, 2024, each installment to and including the installment payable on January 15, 1994 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 2.07. The currency of the United Kingdom of Great Britain and Northern Ireland is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.08. The Borrower hereby designates TIB as its representative for the purpose of taking any action required or permitted under Section 2.02 of this Agreement and Article V of the General Conditions. ARTICLE III Description of the Project; Use of Proceeds of the Credit; Miscellaneous Provisions Section 3.01. The purpose of the Credit is to assist TIB in financing the development of productive facilities and resources in the United Republic of 7 Tanzania. The Project consists of the financing by TIB of specific development projects through loans to and investments in productive enterprises in the United Republic of Tanzania, in furtherance of the corporate purposes of TIB. Section 3.02. (a) The Borrower shall relend the proceeds of the Credit to TIB under a subsidiary loan agreement to be entered into between the Borrower and TIB under terms and conditions 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 to accomplish the purposes of the Credit, and except as the Borrower and the Association shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive the Subsidiary Loan .greement or any provision thereof. (c) The Borrower shall take or cause all its agencies to take all action which shall be necessary on their part to enable TIB to perform all of its obligations under the Project Agreement and the Subsidiary Loan Agreement and shall not take or permit to be taken any action which might interfere with such perfornance. Section 3.03. The Borrower shall cause TIB to use its ordinary capital resources (as defined in Section 7 of the Act) for the financing of projects in accordance with sound technical, economical and financial principles. ARTICLE IV Consultation, Information and Inspection Section 4.01. The Borrower and the Association shall cooperate fully to assure that the purposes of the Credit will be accoimnplished. 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 the respective obligations of any party under this Agreement, the Project Agreement or the Subsidiary Loan Agreement, the administration, operations, and financial position of TIB and its subsidiaries 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. 8 Section 4.02. (a) The Borrower shall furnish or cause to be furnished to the Association all such information as the Association shall reasonably request concerning the administration, operations and financial condition of TIB. (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 any party of its obligations under this Agreement, the Project Agreement or the Subsidiary Loan Agreement. Section 4.03. 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. ARTICLE V Taxes and Restrictions Section 5.01. 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 5.02. This Agreement, the Project Agreement and the Subsidiary Loan 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 5.03. 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 VI Remedies of the Association Section 6.0 1. If any event specified in Section 7.01 of the General Conditions or in Section 6.02 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 9 principal and service charges shall become due and payable immediately, anything to the contrary in this Agreement notwithstanding. Section 6.02. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified: (a) TIB shall have failed to perform any of its obligations under the Project Agreement; (b) the Borrower or TIB shall have failed to perform any of its obligations under the Subsidiary Loan Agreement; (c) any part of the principal amount of any loan to TIB 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 relative contractual instruments, or any security for any such loan shall have become enforceable; (d) a change shall have been made in the Act, which will materially and adversely affect the carrying out of the Project or the objectives, operations or financial condition of TIB; (e) a resolution shall have been passed for the dissolution or liquidation of TIB; (f) a subsidiary or any other entity shall have been created or acquired or taken over by TIB, if such creation, acquisition or taking over would adversely affect the conduct of TIB's business or TIB's financial position or the efficiency of TIB's management and personnel or the carrying out of the Project; (g) an extraordinary situation shall have arisen which shall make it improbable (i) that TIB will be able to perform its obligations under the Project Agreement, or (ii) that TIB will be able to perform its obligations under the Subsidiary Loan Agreement; and (h) a change shall have been made in the Statement of Policy without the Association's consent. Section 6.03. For the purposes of Section 7.01 of the General Conditions the following additional events are specified: (a) the event specified in paragraphs (a), (b), (f) or (g) of Section 6.02 hereof shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower; and 10 (b) the event specified in paragraphs (c), (d), (e) or (h) of said Section shall occur. ARTICLE VII Effective Date; Termination Section 7.01. The following events are specified as additional conditions to the effectiveness of this Agreement within the meaning of Section 10.01(b) of the General Conditions: (a) The execution and delivery of the Project Agreement on behalf of TIB have been duly authorized or ratified by all necessary corporate and governmental action; and (b) The execution and delivery of the Subsidiary Loan Agreement on behalf of the Borrower and TIB have been duly authorized or ratified by all necessary corporate and governmental action. Section 7.02. 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: (a) that the Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, TIB and constitutes a valid and binding obligation of TIB in accordance with its terms; and (b) that the Subsidiary Loan Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, the respective parties thereto and constitutes a valid and binding obligation of such parties in accordance with its terms. Section 7.03. The date June 14, 1974 is hereby specified for the purposes of Section 10.04 of the General Conditions. Section 7.04. The provisions of Sections 6.02 and 6.03 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date 20 years after the date of this Agreement, whichever shall be the earlier. * 11 ARTICLE VIII Representative of the Borrower; Addresses Section 8.0 1. The Minister of the Borrower at the time responsible for finance is designated as representative of the Borrower for the purposes of Section 9.03 of the General Conditions. Section 8.02. The following addresses are specified for the purposes of Section 9.01 of the General Conditions: For the Borrower: The Principal Secretary The Treasury P.O. Box 9111 Dar es Salaam United Republic of Tanzania Cable address: TREASURY Dar es Salaam For th- Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable add ress: INDEVAS Washington, D.C. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed 13 SCHEDULE Modifications of the General Conditions For the purposes of this Agreement, the provisions of the General Conditions are modified as follows: (1) The following subparagraph is added to Section 2.01: "13. The term 'Project Agreement' has the meaning set forth in Section 1.02(b) of the Development Credit Agreement." (2) Section 6.02(h) is deleted and Section 6.02(i) is renumbered as Section 6.02(h). (3) Section 6.03 is deleted and replaced by the following new Section: "Section 6.03. Cancellation by the Association. If (a) the right of tte Borrower to make withdrawals from the Credit Account shall have been suspended with respect to any amount of the Credit for a continuous period of thirty days or (b) by the date specified in paragraph (e) of Section 2.02 of the Project Agreement no applications or requests permitted under paragraph (a) or paragraph (b) of such Section shall have been received by the Association in respect of the portion of the Credit referred to in paragraph (b)(iii)(A) of Section 2.02 of the Development Credit Agreement, or having been so received, shall have been denied, or (c) after the Closing Date an amount of the Credit shall remain unwithdrawn from the Credit Account, the Association may by notice to the Borrower terminate the right of the Borrower to submit such applications or requests or to make withdrawals from the Credit Account, as the case may be, with respect to such amount or portion of the Credit. Upon the giving of such notice such amount or portion of the Credit shall be cancelled." (4) The words "the Project Agreement" are added after the words "the Development Credit Agreement" in Section 6.06. (5) The words "or the Project Agreement" are added after the words "the Development Cn it Agreement" in Section 8.02. 0