India - Eleventh Industrial Imports Program Credit : Credit 0616 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 616-IN DEVELOPMENT CREDIT AGREEMENT (Eleventh Industrial Imports Program Credit) between INDIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated February 26, 1976 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated February 26, 1976, between INDIA, acting by its President (hereinafter called the Borrower) and INTERNATIONAL DEVELOPHENT ASSOCIATION (hereinafter called the Association). -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 (said General Conditions Applicable to Development Credit Agree- ments 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 Gen- eral Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Specified Enterprises" means firms, registered with the Borrower's Directorate General of Technical Development of the Ministry of Industry and Civil Supplies, and others (exclud- ing Hindustan Cables Limited, Hindustan Teleprinters Limited and Indian Telephone Industries Limited), notified from time to time by the Borrower to the Association, in the industrial manufactur- ing secturs listed in Schedule 3 to this Agreement, as such Sched- ule may be amended from time to time by agreement between the Bor- rower and the Association; (b) "Canalizing Agencies" means State Trading Corporation of India Limited, Minerals and Metals Trading Corporation Limited, -3- Hindustan Steel Limited and such other agencies of the Borrower as may from time to time be agreed upon between the Borrower and the Association; (c) "CCIE" means the Chief Controller of Imports and Exports in the Borrower's Ministry of Commerce; (d) "Authorized Dealers" means suppliers of spare parts for heavy earth-moving and power generating equipment authorized by CCIE for the purposes of this Agreement, as notified to the Association; (e) "Replenishment Licenses" means licenses issued by CCIE to eligible exporters for the importation of raw materials and components against their exports; and (f) "Technical Development Fund" means the fund to be estab- lished pursuant to Section 3.02 of this Agreement. -4- 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 equiva- lent to two hundred million dollars ($200,000,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 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 re- quired for the Project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Credit. Section 2.03. Except as the Association shall otherwise agree, raw materials, semi-finished goods and components required for the Project to be financed out of the proceeds of the Credit and to be procured through the Canalizing Agencies shall be procured in ac- cordance with the provisions of Schedule 4 to this Agreement. Section 2.04. The Closing Date shall be June 30, 1977 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 -5- 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 1 and December 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each June 1 and December 1 commencing June 1, 1986 and ending December 1, 2025, each installment to and including the installment payable on December 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 "W Britain and Northern Ireland is hereby specified for the purposes of Section 4.02 of the General Conditions. -6- ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out the Project, or cause the Project to be carried out, with due diligence and efficiency. (b) The Borrower shall: (i) promptly upon receipt of appro- priate applications issue, or cause to be issued, such import li- censes as shall be required to carry out the Project; (ii) make available, or cause to be made available, promptly as needed all foreign exchange which shall be required to carry out the Project; and (iii) with respect to locally produced materials which are subject to allocation make, or cause to be made, allocations of such materials promptly and in such quantities as shall be re- quired to carry out the Project. Section 3.02. For the purpose of importing balancing and mod- ernization equipment and use of design and technical know-how in the industrial sectors agreed by the Association to be financed from the proceeds of the Credit allocated under Category (2) of the table set forth in paragraph 1 of Schedule 1 to this Agree- ment, the Borrower shall cause to be established a Technical Devel- opment Fund to be administered by the Department of Heavy Indus- tries in the Borrower's Ministry of Industry and Civil Supplies, in accordance with terms of reference acceptable to the Association. Section 3.03. The Borrower shall cause the imported goods to be financed out of the proceeds of the Credit to be insured, or -7- cause adequate provision to be made for the insurance thereof, against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. Section 3.04. (a) The Borrower shall furnish to the Associa- tion, promptly upon their preparation, the plans and programs for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) The Borrower: (i) shall maintain records adequate to re- cord the progress of the Project (including the cost thereof) and to identify the goods, works and services financed out of the pro- ceeds of the Credit, and to disclose the use thereof in the Proj- ect; (ii) shall enable the Association's accredited representatives to examine the Project, the goods financed out of the proceeds of the Credit and any relevant recor& and documents; and (iii) shall furnish to the Association all such information as the Association shall reasonably request concerning the Project, the program (re- ferred to in Schedule 2 to this Agreement) of which the Project is a part, the Specified Enterprises, the expenditure of the proceeds of the Credit and the goods, works and services financed out of such proceeds. (c) The Borrower shall furnish to the Association reports on its exports performance in a form as shall be agreed upon between the Borrower and the Association. Section 3.05. The Borrower shall cause the proceeds of the Credit to be used exclusively for the Project. -8- ARTICLE IV Other Covenants Section 4.01. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consis- tently maintained appropriate accounting practices the operations, resources and expenditures, in respect of the Project, of the de- partments or agencies of the Borrower responsible for carrying out the Project or any part thereof. Section 4.02. Except as the Borrower and the Association shall otherwise agree, the Specified Enterprises and Authorized Dealers shall not, on the grounds that they are participating in the Project, be subject to any conditions or requirements for is- suance of import licenses and release of foreign exchE,nge not im- posed on other encerprises engaged in similar business in the territories of the Borrower. 9 ARTICLE V Termination Section 5.01. The date April 30, 1976 is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 5.02. The obligations of the Borrower under Section 4.02 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or the Closing Date, whichever shall be the earlier. - 10 - ARTICLE VI Representative of the Borrower; Addresses Section 6.01. Any Secretary, Additional Secretary, Joint Secretary, Director or Deputy Secretary of the Department of Economic Affairs in the Ministry of Finance of the Borrower 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 11.01 of the General Conditions: For the Borrower: The Secretary to the Government of India Ministry of Finance Department of Economic Affairs New Delhi, India Cable address: ECOFAIRS New Delhi 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. - 11 - IN WITNESS WHEREOF, the Darties hereto, acting through their reDresentatives thereunto duly authorized, have caused this Agree- ment to be signed in their resDective names in the District of Columbia, United States of America, as of the day and year first above written. INDIA By /s/ T. N. Kaul Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Ernest Stern Regional Vice President South Asia - 12- '. SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of imported items to be financed out of the proceeds of the Credit and the alloca- tion of amounts of the Credit to each Category: Amount of the Credit Allocated (Expressed in Category Dollar Equivalent) (1) Equipment and materials 4090009000 (excluding gems and jewelry) to be procured against Replenishment Licenses (2) Equipment, materials and 5,000,000 technical services under the Technical Development Fund (3) (a) Fertilizers and 50v,0001000 Pesticides () Other sectors 105,000,000 TOTAL 200,000,000 -13 - 2. Notwithstanding the provisions of paragraph 1 above, no with- drawals shall be made in respect of: (a) expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower; (b) payments made for expenditures prior to the date of this Agreement; (c) payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manu- facture, procurement or supply thereof; (d) foreign exchange allocations under Category (2) in excess of $250,000 equivalent in favor of a single beneficiary enterprise; and (e) expenditures for electric generators and boilers in excess of $25,000,000 equivalent under Category (3)(b). 3. 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 expendi- tures 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, can- cel 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. 1 SCHEDULE 2 Description of the Project The Project forms part of the program of the Borrower to in- crease, during the period from March 1, 1976 to February 28, 1977, the production of goods for the domestic civilian market and for export, and the utilization of existing equipment, by making avail- able foreign exchange for the import of raw materials, semi- finished goods, components, spare parts and miscellaneous items of manufacturing equipment, and for the utilization of technical ser- vices, improving thereby the rate of utilization of existing produc- tive capacity and capital equipment in India. The Project consists of the provision of foreign exchange and other resources required by the respective Specified Enterprises and the Authorized Dealers for the production of goods for the domestic civilian market and for export, and the issuance of Re- plenishment Licenses to eligible exporters. -15 - SCHEDULE 3 Industrial Manufacturing Sectors under the Project* Listed hereunder are the industrial manufacturing sectors of capital equipment and other goods from which the Specified Enter- prises and Authorized Dealers are to be selected: Agricultural 1. Tractors, Agricultural Discs and Power Tillers 2. Fertilizers 3. Pesticides 4. Spare parts for heavy earth-moving equipment Electrical 5. Transformers and Switchgear and related components, Stampings, Cables and Wires (up to 66 kv) 6. Power Generating Equipment and Spare Parts, and Boilers Transport 7. Commercial Vehicles 8. Automotive Ancillaries * See Section 1.02 (a). - 16- Metal Working 9. Machine Tools, Small Tools, Castings and Forgings, Ball and Roller Bearings Textiles 10. Textile machinery - 17 - SCHEDULE 4 Procurement 1. With respect to any contract for the purchase of goods to be financed from the proceeds of the Credit the cost of which is equivalent to $100,000 or more: (a) offers shall be invited from not less than three major suppliers from member countries of the Bank and Switzerland; and (b) the contract shall be awarded to the supplier whose offer is the lowest evaluated offer. 2. The Borrower shall cause each Canalizing Agency to retain all relevant documentation relating to contracts financed in whole or in part out of the proceeds of the Credit, including without limi- tation, the details of the offers sought, the names of the suppli- ers invited to submit offers, the analysis of offers, recommenda- tions for award and conformed copies of such contract, for review by the Association at its request. 3. Applications for withdrawal in respect of contracts awarded to the lowest evaluated offer shall be submitted to the Associa- tion with a certificate indicating that the conditions set forth in paragraph 1 of this Schedule have been satisfied, and with doc- umentation on evidence of payment and of shipment together with the supplier's invoice. -18- 4. The Borrower shall submit to the Association, together with any application for withdrawal of funds from the Credit Account, two certificates prepared by the appropriate Canalizing Agency stating that: (i) the goods (or an equivalent amount of the goods) in respect of which the withdrawal is requested are for the account of, and have been or will be delivered to the Specified Enter- prises; and (ii) no withdrawal for these same goods has been or will be made from the proceeds of any other external financing available to the Borrower or the Canalizing Agency. 5. The Borrower shall furnish to the Association, promptly after delivery of the goods financed in whole or in part from the pro- ceeds of the Credit to the Specified Enterprises, such information as the Association shall reasonably request regarding the per unit cost of the goods to the Specified Enterprise.