Tanzania - Technical Assistance Project : Credit 0601 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 601 TA Development Credit Agreement (Technical Assistance Project) BETWEEN UNITED REPUBLIC OF TANZANIA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JANUARY 9, 1976 CONFORMED COPY CREDIT NUMBER 601 TA Development Credit Agreement (Technical Assistance Project) BETWEEN UNITED REPUBLIC OF TANZANIA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JANUARY 9, 1976 I DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated January 9, 1976, between UNITED REPUBLIC OF TANZANIA (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) The Borrower has requested the Association to assist in the financing of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) The Project will be carried out by Tanzania Investment Bank (hereinafter called TIB) with the Borrower's assistance and, as part of such assistance, the Borrower will make available to TIB the proceeds of the Credit as hereinafter provided; and (C) The Association is willing to make the Credit available upon the terms and conditions set forth hereinafter and in a project agreement of even date herewith between the Association and TIB; 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 Development Credit Agreements of the Association, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agreements of the Association 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 and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Project Agreement" means the agreement between the Association and TIB of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement and all agreements supplemental to the Project Agreement; 4 (b) "Subsidiary Agreement" means the agreement to be entered into between the Borrower and TIB pursuant to Section 3.01(b) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Agreement; and (c) "Project Unit" means the unit to be set up and maintained by TIB in accordance with the provisions of Section 2.07 of the Project Agreement. ARTICLE II The Credit Section 2.0 1. 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 six million dollars ($6,000,000). 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 may be amended from time to time by agreement between the Borrower and the Association, 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 and to be financed out of the proceeds of the Credit. Section 2.03. Except as the Association shall otherwise agree, the goods, works or services (other than consultants' services) for the Project to be financed out of the proceeds of the Credit, shall be procured in accordance with the provisions set forth or referred to in Section 2.02 of the Project Agreement. Section 2.04. The Closing Date shall be June 30, 1980 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. 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 February I and August 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each February 1 and August I commencing February 1, 1986 and ending August 1, 2025, each installment to and including the installment payable on August 1, 1995 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 Kingdom of Great Britain and Northern Ireland is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.09. TIB is designated as representative of the Borrower for the purposes of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) Without any limitation or restriction upon any of its other obligations under the Development Credit Agreement, the Borrower shall cause TIB to perform in accordance with the provisions of the Project Agreement and the Subsidiary Agreement all the obligations therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable TIB to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) The Borrower shall make the proceeds of the Credit available to TIB under a subsidiary agreement to be entered into between the Borrower and TIB under terms and conditions which shall have been approved by the Association. (c) The Borrower shall exercise its rights under the Subsidiary 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 Subsidiary Agreement or any provision thereof. ARTICLE IV Remedies of the Association Section 4.01. For the purposes of Section 6.02 of the General Conditions the following additional events are specified pursuant to paragraph (h) thereof: 6 (a) TIB shall have failed to perform any covenant, agreement or obligation of TIB under the Project Agreement. (b) An extraordinary situation shall have arisen which shall make it improbable that TIB will be able to perform its obligations under the Project Agreement. (c) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of TIB or for the suspension of its operations. Section 4.02. For the purposes of Section 7.01 of the General Conditions, the following additional event is specified pursuant to paragraph (d) thereof, namely, that any event specified in paragraphs (a), (b) and (c) of Section 4.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Association to the Borrower and TIB. ARTICLE V Effective Date; Termination Section 5.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01(b) of the General Conditions: (a) 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; (b) the execution and delivery of the Subsidiary Agreement on behalf of the Borrower and TIB, respectively, have been duly authorized or ratified by all necessary corporate and governmental action; and (c) the head of the Project Unit shall have been employed. Section 5.02. The following are specified as additional matters, within the meaning of Section 12.02(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 is legally binding upon TIB in accordance with its terms; and 7 (b) That the Subsidiary Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, the Borrower and TIB, and is legally binding upon the Borrower and TIB in accordance with its terms. Section 5.03. The date May 14, 1976 is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 5.04. The provisions of Section 4.01 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date twenty-five years after the date of this Agreement, whichever shall be the earlier. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Minister of the Borrower at the time responsible for Finance is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.0 1 of the General Conditions: For the Borrower: The Principal Secretary The Treasury P.O. Box 9111 Dar es Salaarn United Republic of Tanzania Cable address: TREASURY Dar es Salaam For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America 8 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 in the District of Columbia, United States of America, as of the day and year first above written. UNITED REPUBLIC OF TANZANIA By /s / Paul Bomani Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s / S. Shahid Husain Regional Vice President Eastern Africa 0 9 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 the amounts of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Consultants' Con- 4,800,000 100% of foreign tracts (including expenditures or contracts with 80% of total ex- Project Unit's eco- penditures nomist/financial analyst, engineer and lawyer) (2) Overseas fellow- 200,000 100% of foreign ships expenditures and 75% of local ex- penditures (3) Vehicles and equip- 100,000 100% of foreign ment for Project expenditures and Unit 75% of local ex- penditures (4) Unallocated 900,000 TOTAL 6,000,000 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than the Borrower and for goods or services supplied from the territory of any country other than the Borrower; 10 (b) the term "local expenditures" means expenditures in the currency of the Borrower and for goods or services supplied from the territory of the Borrower; and (c) the term "total expenditures" means the aggregate of foreign and local expenditures. 3. The disbursement percentages have been calculated in compliance with the policy of the Association that no proceeds of the Credit shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Credit decreases or increases, the Association may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Association. 4. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of expenditures prior to the date of this Agreement. 5. Notwithstanding the allocation of an amount of the Credit or the disburs.ment percentages set forth in the table in paragraph I above, if the Association has reasonably estimated that the amount of the Credit then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Association may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allocated to another Categoiry and which in the opinion of the Association are not needed to meet other expenditures, and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. 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 this 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 Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. 11 7. The following provisions shall apply in respect to any of the Consultants' Contracts (including contracts with Project Unit's economist/financial analyst, engineer and lawyer) for which the Borrower shall apply for withdrawal under Category (1) above: (a) when submitting to the Association the first withdrawal application with respect to each such contract, the Borrower shall notify the Association as to whether the Borrower elects 100% of foreign expenditures or 80% of total expenditures for such contract to be financed out of the proceeds of the Credit; (b) no disbursement for any such contract shall be made before the Association has been notified of the Borrower's election with respect to such contract; and (c) the Association shall take note of such election by the Borrower with respect to each such contract, and any and all withdrawals with respect to such contract shall be made in accordance with such election. 12 SCHEDULE 2 Description of the Project The Project is designed to assist the Borrower in the planning and implementation of its economic development programs and consists of the following Parts: Part A. The provision of grants to parastatal enterprises and governmental agencies in Tanzania to assist them in carrying out preinvestment and feasibility studies for high priority investment projects as well as special studies designed to improve the implementation of the Borrower's development programs. Part B. The provision of about 20 man-years of overseas fellowships for the training of Tanzanian nationals in the preparation, implementation and evaluation of investment projects and in related techniques. The Project is expected to be completed by December 31, 1979. 0