Haiti - Provincial Towns Water Supply Project : Credit 0757 - Development Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 757 HA Development Credit Agreement (Provincial Towns Water Supply Project) between REPUBLIC OF HAITI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated January 23, 1978 CREDIT NUMBER 757 HA DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated January 23, 1978, between REPUBLIC OF HAITI (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 the Service National d'Eau Potable (hereinafter called SNEP) with the Borrower's assistance and, as part of such assistance, the Borrower will make available to SNEF the proceeds of the Credit as hereinafter provided; and (C) the Association has agreed, on the basis inter alia of the foregoing, to extend the Credit to the Borrower upon the terms and conditions set forth hereinafter and in the Project Agreement of even date herewith between the Association and SNEP; 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 have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "SNEP" means the Service National d'Eau Potable, an autonomous agency of the Borrower established and operating pursuant to the Law of the Borrower dated August 20, 1977 pub- lished in Moniteur No. 70A of October 10, 1977; - 2 - (b) "Project Agreement" means the agreement between the Association and SNEP of even date herewith, as the same may be amended from time to time; and (c) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and SNEP pursuant to Section 3.02 (a) of this Agreement, as the same may be 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 the Development Credit Agreement set forth or referred to, an amount in various currencies equiva- lent to six million six hundred thousand dollars ($6,600,000). 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 Associa- tion, 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 procurement of goods and civil works to be financed out of the proceeds of the Credit, shall be governed by the provisions of Schedule 1 of the Project Agreement. Section 2.04. The Closing Date shall be December 31, 1981 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 semiannually on February 1 and August 1 in each year. -3- Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each Febru- ary 1 and August 1 commencing February 1, 1988, and ending August 1, 2027, each installment to and including the installment payable on August 1, 1997, 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. Section 2.09. SNEP is designated as representative of the Borrower for the purposes of taking any action required or per- mitted 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 Agree- ment, the Borrower shall cause SNEP to perform in accordance with the provisions of the Project Agreement and the Subsidiary Loan 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 SNEP 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 provide such funds as shall be required by SNEP to cover any cash deficit of SNEP during the construction period of the Project. Section 3.02. (a) The Borrower shall relend to SNEP the proceeds of the Credit under a Subsidiary Loan Agreement on terms and conditions satisfactory to the Association, including repay- ment of principal in 30 years (including 3 years of grace) with interest at 6% per annum. (b) The Borrower shall exercise its rights under the Subsid- iary 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, amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. Section 3.03. Except as the Association shall otherwise agree, the Borrower shall assign to SNEP exclusive responsibility for all future investments in Haiti in the water supply sector other than those in the Port-au-Prince metropolitan area. Section 3.04. (a) Repayments of principal and payments of interest under the Subsidiary Loan Agreement and any other funds allocated to investments by SNEP, shall be credited to a revolving fund to be used for financing future investments in Haiti in water supply and sanitation projects, or in such higher priority development projects as the Borrower may determine; (b) the Borrower and the Association shall exchange views on the establishment and operation of such revolving fund. 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: (a) SNEP shall have failed to perform any of its obligations under the Project Agreement or under the Subsidiary Loan Agree- ment; (b) an extraordinary situation shall have arisen which makes it improbable that SNEP will be able to perform its obliga- tions under the Project Agreement or the Subsidiary Loan Agree- ment; (c) the Law establishing SNEP shall have been amended, suspended, abrogated, repealed or waived in such a way as to materially and adversely affect the carrying out of the Project or the obligations of SNEP under the Project Agreement or the Subsid- iary Loan Agreement; and (d) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestab- lishment of SNEP or for the suspension of its operations. -5- Section 4.02. 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 paragraph (a) 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 SNEP; and (b) any event specified in paragraph (c) or (d) of Section 4.01 of this Agreement shall occur. ARTICLE V Effective Date; Termination Section 5.01. The following events are specified as addi- tional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the Subsidiary Loan Agreement has been executed on behalf of the Borrower and SNEP; (b) consultants have been appointed in accordance with Section 2.02 of the Project Agreement; (c) personnel satisfactory to the Association have been appointed as the heads of SNEP's Sections of (i) Operations and Maintenance, (ii) Project Design and Construction and (iii) Administration and Finance; and (d) a detailed implementation schedule satisfactory to the Association for carrying out Part G of the Project has been prepared. 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 SNEP and is legally binding upon SNEP in accor- dance with its terms; and - 6 - (b) that the Subsidiary Loan Agreement has been duly autho- rized or ratified by the Borrower and SNEP and is legally binding upon the Borrower and SNEP in accordance with its Lerms. Section 5.03. The date April 24, 1978, is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 5.04. The obligations of the Borrower under Sections 3.03 and 3.04 of this Agreement and the provisions of paragraph (d) 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 thirty years after the date of this Agreement, whichever shall be the earlier. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. Except as provided in Section 2.09 of this Agreement, the Secretary of State for Finance and Economic Affairs of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Condi- tions. Section 6.02. The following addresses are specified for the purpose of Section 11.01 of the General Conditions: For the Borrower: Secretairerie d'Etat des Finances et des Affaires Economiques Palais des Finances Port-au-Prince Haiti Cable address: Secretaires d'Etat des Finances et des Affaires Economiques Port-au-Prince Haiti -7- For the Association: International Development Association 1'.3 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) 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. REPUBLIC OF HAITI By Is! Georges Salomon Authorized Representative I!TERNATIONAL DEVELOPMENT ASSOCIATION By /s! Eugenio F. Lari Acting Regional Vice President Latin America and the Caribbean - 8 - SCHEDULE 1 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) Materials and 3,150,000 100% of foreign equipment for expenditures water supply systems, main- tenance and office building (2) Civil works for 1,500,000 56% water supply system and office building (3) Technical Assis- 490,000 100% tance under Part G of the Project (4) Engineering 770,000 89% consultants (5) Unallocated 690,000 TOTAL 6,600,000 2. For the purposes of this Schedule the term "foreign expendi- tures" 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 thin that of the Borrower. - 9 - 3. The disbursement percentages have been calculated in com- pliance with the policy of the Association that no proceeds of the Credit shall be disbursed on account of payments for taxes levied by, or ii. 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 1 above, no withdrawals shall be made in respect of payments made for expendi- tures: (i) prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of $200,000 may be made in respect of Categories (3) and (4) on account of payments made for such expenditures before that date but after October 1, 1977; (fi) under Categories (1) or (2) above for items related to SNEP's office building until the engineering designs, specifications and procurement documents for the building have been approved by the Association and SNEP has been given clear title to land adequate for its construction; or (iii) under Categories (1) or (2) for any other item until the engineering designs, specifications and procurement documents for the supply systems have been approved by the Association. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in para- graph 1 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 Category 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 expen- ditures 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 incons1stent with the procedures set forth or referred to in this Agreement, no - 10 - expenditures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way re- stricting 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 Associ- ation's reasonable opinion, represents the amount of such expendi- tures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 11 - SCHEDULE 2 Description of the Project The Project which is designed to assist the reconstruction and improvement of the Borrower's water supply systems consists of the following Parts: Part A: 1. Construction of wells at Cap-Haitien (3) and at Gonaives (1). 2. Pump replacement in existing well at Gonaives. 3. Rehabilitation of spring sources at Cap-Haitien. 4. Installation of water meters at all production sources at Cap-Haitien, Gonaives, Jeremie, Port-de- Paix, Jacmel, Miragoane and Aquin. Part B: 1. Installation of chlorination facilities at Cap- Haitien, Gonaives, Jeremie, Port-de-Paix, Jacmel, Miragoane and Aquin. 2. Rehabilitation of pumping facilities at Cap-Haitien. 3. Reconstruction of the existing intake work/ structure at Cap-Haitien, Jeremie, Port-de-Paix, Miragoane and Aquin. Part C: Construction of transmission and/or distribution pipes totalling about 112 km at Cap-Haitien, Gonaives, Jeremie, Port-de-Paix, Jacmel, Miragoane and Aquin. Part D: 1. Construction of additional storage tanks at Cap- Haitien, Jeremie, Port-de-Paix, Jacmel, Miragoane and Aquin. 2. Construction of a storage reservoir at Gonaives. 3. Rehabilitation of the steel storage tank at Cap- Haitien and repair of the existing storage tanks at Jr6mie and at Port-de-Paix. Part E: 1. Construction of about 10,500 house connections at Cap-Haitien, Gonaives, J6remie, Port-de-Paix, Jacmel, Miragoane and Aquin. - 12 - 2. Construction of about 109 public standpipes at Cap-Haitien, Gonaives, J6remie, Port-de-Paix, Jacmel, Miragoane and Aquin. Part F: 1. Construction of SNEP's office building at Port-au- Prince, including storage and shop maintenance facilities. 2. Acquisition of basic maintenance equipment, vehicles and spare parts and office equipment. Part G: Strengthening of the management of SNEP, including its design and construction capabilities and its adminis- trative, financial and engineering practices and the training of SNEP's staff, utilizing about 100 man-months of technical assistance. The Project is expected to be completed by June 30, 1981.