Rwanda - BRD Project : Credit 0655 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 655 RW DEVELOPMENT CREDIT AGREEMENT (BRD Project) between REPUBLIC OF RWANDA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated August 20, 1976 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated August 20, 1976, between REPUBLIC OF RWANDA (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) The Borrower has requested the Association to as- sist in the financing of the Project described in Section 3.01 of this Agreement by extending the Credit as hereinafter provided; (B) The Project will be carried out by the Banque Rwandaise de Developpement with the Borrower's assistance and, as part of such assistance, the Borrower will make available to the Banque Rwandaise de Developpement the proceeds of the Credit as hereinafter provided; Od (C) The Association is willing to make the Credit available upon the terms and conditions set forth hereinafter and in a proj- ect agreement of even date herewith between the Association and the Banque Rvandaise de Dgveloppement; NOW THEREFORE the parties hereto hereby agree as follows: - 2 - 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, 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 con- text otherwise requ res, 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) "BRD" means Banque Rwandaise de Dveloppement, established by the Law of August 5, 1967, as amended by the Decree-Law of Octo- ber 8, 1974, of the Borrower, and as said Law may be further amended from time to time; (b) "Project Agreement" means the agreement between the As- sociation and BRD of even date herewith, as the same may be amended from time to time, and such term includes all agreements supple- mental to the Project Agreement; (c) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and BRD pursuant to Section 3.02 -3- (a) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Loan Agreement, if any; (d) "sub-loan" means a loan or credit made or proposed to be made by BRD out of the proceeds of the Credit relent to BRD under the Subsidiary Loan Agreement to an Investment Enterprise for an Investment Project, and "free-limit sub-loan" means a sub-loan, as so defined, which qualifies as a free-limit sub-loan pursuant to the provisions of Section 2.03 (d) of this Agreement; (e) "investment" means an investment other than a sub-loan made or proposed to be made by BRD in whole or in part out of the proceeds of the Credit relent to BRD under the Subsidiary Loan Agreement in an Investment Enterprise for an Investment Project; (f) "Investment Enterprise" means an enterprise to which BRD proposes to make or has made a sub-loan or in which it proposes to make or has made an investment, and "Small-scale Investment Enter- prise" means an Investment Enterprise, as so defined, with Ci) net assets (calculated as total assets minus amortization) of less than RwF10,000,000; (ii) annual sales of less than RwF8,000,000; and (iii) except as the Association shall otherwise agree, less than 20 employees; (g) "Investment Project" means a specific development project to be carried out by an Investment Enterprise utilizing the proceeds of a sub-loan or investment; S1 - 4- 0 (h) "Rwandese Franc" and the letters "RwF" mean the currency of the Borrower; (i) "foreign currency" means any currency other than the currency of the Borrower; (j) "Statutes" means the Law of the Borrower of August 5, 1967 referred to in paragraph (a) of this Section, as amended by Decree-Law of October 8, 1974, of the Borrower, and as said Law may be further amended from time to time; (k) "Statement of Policy" means the Mot:.on de Politique Gene- rale of BRD approved by the Botrd of Directors of BRD on January 20, 1975, and the PrinciDes d'Intervention de la BRD approved by the Board of Directors of BRD on January 28, 1976, both as amended to W the date of this Agreement, and as the same may be further amended from time to time in mutual agreement between the Association and BRD; and (1) "subsidiary" means any company of which a majority of the voting stock is owned or effectively controlled by BRD or by any one or more subsidiaries of BRD or by BRD and one or more of its subsidiaries. -5- 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 equiv- alent to four million dollars ($4,000,000). Section 2.02. The Borrower designates BRD as its representative for the purpose of taking any action required or permitted to be taken under the provisions of Section 2.03 of this Agreement and Article V of the General Conditions. Section 2.03. (a) The proceeds of the Credit relent to BRD under the Subsidiary Loan Agreement may be withdrawn from the Credit Account by BRD, acting on behalf of the Borrower pursuant to Sec- tion 2.02 of this Agreement, as follows: (i) subject to the provisions of paragraphs (b) through (f) of this Section, for amounts expended (or, if the Association shall so agree, such amounts as shall be required to meet expenditures to be made) by BRD for an Investment Project to finance the reasonable cost of goods and services required under a sub-loan or investment for the Investment Project in respect of which the withdrawal is requested; and (ii) for amounts expended in foreign currency (or, if the Association shall so agree, such amounts as shall be required to meet expenditures to be made in foreign currency) for the reasonable cost of the services of auditing experts employed for the purpose of the annual audits referred to in Section 3.02 (i) of the Project Agreement for the fiscal years 1976, 1977 and 1978. (b) Withdrawals from the Credit Account pursuant to para- graph (a) (i) of this Section shall be authorized in respect of: (i) expenditures in a foreign currency for goods or services supplied from outside the territory of the Borrower; (ii) the equivalent of eighty per cent (80%) of ex- penditures in Rwandese Francs for goods supplied from the territory of the Borrower but previously imported into the territory of the Borrower through normal trade channels; and (iii) the equivalent of eighty per cent (80%) of ex- penditures in Rwandese Francs on account of civil works contracts carried out in the territory of the Borrower; (said percentage representing in each case the estimated foreign expenditure component). 7 (c) No withdrawal shall be made pursuant to paragraph (a) (i) of this Section, unless the sub-loan or investment in respect of which the withdrawal is requested (i) shall have been approved by the Association, or (ii) shall be a free-limit sub-loan for which the Association shall have authorized withdrawals from the Credit Account. (d) A free-limit sub-loan shall be a sub-loan for an Invest- ment Project in an amount to be financed out of the proceeds of the Credit which shall not exceed the sum of (i) $100,000 equiva- lent, when added to any other outstanding amounts financed or proposed to be financed out of the proceeds of the Credit for such Investment Project, or (ii) $1,000,000 equivalent, when added to all other free-limit sub-loans financed or proposed to be financed out of the proceeds of the Credit. (e) Except as the Association and the Borrower shall other- wise agree, no withdrawals shall be made pursuant to paragraph (a) (i) of this Section on account of expenditures made by an Invest- ment Enterprise in respect of a sub-loan subject to the Associa- tion's approval, or in respect of an investment, if such expendi- tures shall have been made before the date of this Agreement or 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. -8- (f) No withdrawals shall be made pursuant to paragraph (a) (i) of this Section, until (i) the Association shall have obtained all information regarding the accounts of BRD necessary to evaluate the financial condition and the portfolio of BRD; and (ii) the Statement of Policy shall have been amended in accordance with the provisions of Section 3.05 of the Project Agreement. Section 2.04. The Closing Date shall be June 30, 1981 or such other date as shall be agreed between the Borrower and the Asso- ciation. 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 June 15 and December 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each June 15 and December 15 commencing December 15, 1986 and ending June 15, 2026, each installment to and including the installment payable on June 15, 1996 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 Gen- eral Conditions. -9- ARTICLE III Description and Execution of the Project; Use of the Proceeds of the Credit Section 3.01. The purpose of the Project is to assist BRD in financing such productive facilities and resources in the territory of the Borrower as will contribute to the economic and social de- velopment of the country through loans to and investments in pro- ductive enterprises in the territory of the Borrower for specific development projects. Section 3.02. (a) The Borrower shall relend the equivalent in Rwandese Francs of the proceeds of the Credit to BRD under a sub- sidiary loan agreement to be entered into between the Borrower and BRD, at an interest rate of four per cent (4%) per annum on the outstanding balance, and under such other terms and conditions as shall be satisfactory to the Borrower, the Association and BRD. (b) The Borrower shall exercise its rights under the Subsid- iary Loan Agret_ent 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 Loan Agreement or any provision thereof. Section 3.03. The Borrower shall promptly make available to BRD medium- and long-term loans in such amounts and at such times as shall be required to finance the local cost component of In-est- ment Projects. Except as shall be otherwise agreed by the Associa- tion, the aggregate principal amount of such loans from the date * of this Agreement until June 30, 1978, shall be seventy-five million Rwandese Francs (RwFT5,000,000). - 10- ARTICLE IV Additional Covenants Section 4.01. The Borrower shall not take, or permit any of its political subdivisions, or any of its agencies or instrumen- talities, or any agency or instrumentality of any of its political subdivisions, to take any action which would prevent or materially interfere with the performance by BRD of any of its obligations under the Project Agreement or the Subsidiary Loan Agreement, and shall take or cause to be taken all reasonable action which shall be required on its part in order to enable BRD to perform such obligations. Section 4.02. Prior to any amendments to the Statutes, the Borrower shall inform the Association of the amendments proposed and shall afford the Association a reasonable opportunity to ex- change views on the proposed amendments with the Borrower and BRD. - 11 - ARTICLE V Remedies of the Association Section 5.01. For the purposes of Section 6.02 of the General Conditions the following additional events are specified pursuant to paragraph (h) thereof: (a) a default shall occur in the performance of any obliga- tion of BRD under the Project Agreement; (b) any part of the principal amount of any loan to BRD having an original maturity of one year or more shall, in accord- ance 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; (c) the Statutes shall have been amended so as to affect materially and adversely the operations or financial condition of BRD; (d) a subsidiary or any other entity shall have been created or acquired or taken over by BRD, if such creation, acquisition or taking over would materially and adversely affect the conduct of BRD's business, its financial situation, the efficiency of its management and personnel or the carrying out of the Project; (e) BRD shall have become unable to pay its debts as they mature or any action or proceeding shall have been taken by BRD or by others whereby any of the assets of BRD shall or may be dis- tributed among its creditors; and - 12 0 (f) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of BRD or for the suspension of its operations. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (d) thereof: (a) any event specified in paragraphs (a), (c) and (d) of Section 5.01 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 BRD; and (b) any event specified in paragraphs (b), (e) or (f) of Section 5.01 of this Agreement shall occur. -13 - ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agree- ment within the meaning of Section 12.01(b) of the General Con- ditions: (a) the execution of the Project Agreement on behalf of BRD has been duly authorized or ratified by all necessary corporate and governmental action; and (b) the execution of the Subsidiary Loan Agreement on behalf of the Borrower and BRD, respectively, has been duly authorized or ratified by all necessary corporate and governmental action. Section 6.02. The following are specified as additional mat- ters, within the meaning of Section 12.02(b) of the General Con- ditions, 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 on behalf of, BRD, and is legally bind- ing upon BRD in accordance with its terms; and (b) that the Subsidiary Loan Agreement has been duly autho- rized or ratified by, and executed on behalf of, the Borrower and BRD, respectively, and is legally binding upon the Borrower and BRD in accordance with its terms. -14- Section 6.03. The date of November 18, 1976 is hereby speci- fied for the purposes of Section 12.04 of the General Conditions. Section 6.04. The obligations of the Borrower under Section 4.02 of this Agreement and the provisions of Section 5.02 of this Agreement shall cease and determine on the date on which the Devel- opment Credit Agreement shall terminate or on a date 25 years after the date of this Agreement, whichever shall be the earlier. -15- ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Minister of the Borrower at the time respon- sible for finance is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministere des Finances et de l'Economie Boite Postale 158 Kigali Republique Rwandaise Cable address: MINECOFI Kigali 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. 0I - 16 0 IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agree- ment 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. REPUBLIC OF RWANDA By /s/ Tharcisse Gatwa Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Is! Stanley Please Acting Regional Vice President Eastern Africa -17 - SCHEDULE Modifications of General Conditions For the purpose of the Development Credit Agreement, the provisions of the General Conditions are modified as follows: (1) The words "Investment Projects" are substituted for the words "the Project" at the end of Section 5.03. (2) Section 6.03 is deleted and replaced by the following new Section: "Section 6.03. Cancellation by the Association. If (a) the right of the 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 Section 2.02(e) of the Project Agree- ment no applications or requests permitted under paragraph (b) or paragraph (c) of such Section shall have been received by the Association in respect of any portion of the Credit, or having been so received, shall have been denied, or (c) after the Closing Date an amount of the Credit shall remain unwith- drawn from the Credit Account, the Association may by notice to the Borrower terminate the right of BRD to submit such applications or requests or to make withdrawals from the Credit Account on behalf of the Borrower, 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."