Sri Lanka - Water Supply Project : Credit 0709 - Credit Agreement - 2 - Conformed

CONFORMED COPY CREDIT NUMBER 709-5 CE Development Credit Agreement (Water Supply Project) between THE REPUBLIC OF SRI LANKA and INTERNATIONAL DEVELOPMENT ASSOCIATION As Administrator on behalf of The Government of Canada Dated June 30, 1977 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated June 30, 1977, between the Republic of Sri Lanka (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION, as Administrator, on behalf of the Government of Canada (hereinafter called the Association). WHEREAS (A) the Borrower has requested the assistance of the International Development Association and of the Government of Canada in the financing of a project described in Schedule 2 to the Development Credit Agreement of even date herewith between the Borrower and the International Development Association (hereinafter called the IDA Credit Agreement); (B) the Project will be carried out by the National Water Supply and Drainage Board (hereinafter referred to as WDB) with the Borrower's assistance; (C) the International Development Association is prepared to grant for this purpose a development credit out of its own resources (hereinafter called the IDA Credit) on the terms and conditions set forth in said IDA Credit Agreement, and the Government of Canada has authorized the International Development Association, as Administrator, on behalf of the Government of Canada, to grant for the same purpose a development credit out of the Canadian Government development aid funds on the terms and conditions hereafter set forth and set forth in the Project -2- Agreement (hereinafter referred to as the Project Agreement) of even date herewith between WDB, the International Development Association and the International Development Association as Administrator, on behalf of the Government of Canada; and (D) the Borrower acknowledges that the financial assistance extended to the Borrower under this Development Credit Agreement shall be considered as part of the bi-lateral development aid extended by the Government of Canada to the Borrower; NOW THEREFORE the parties hereto hereby agree as follows: - 3 - 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 Maich 15, 1974, with the same force and effect as if they were fully set forth herein, subject, however, to the following modifications thereof (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, being hereinafter called the General Conditions): (a) the term "Association", whenever used in the General Conditions, means the International Development Association acting as Administrator of Canadian Government development aid funds pursuant to the Agreement, dated between the Government of Canada and the International Development Association; (b) Sections 2.01 (9), 4.01, 4.02, 4.03 and 4.04 are deleted; and (c) in Sections 6.02 and 7.01, the term "Association" shall include also the International Development Association acting in its own capacity. -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, the amount of five million Canadian dollars (Canadian $5,000,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account pro rata to the withdrawals by the Borrower of the proceeds of the IDA Credit, in the ratio of Can$5 of the Credit hereunder to US$9.2 of the IDA Credit and in accordance with the provisions of Schedule 1 to the IDA Credit Agreement, as such Schedule may be amended from time to time by agreement among the parties, 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. (b) Withdrawals from the Credit Account shall be made in the respective currencies in which the expenditures to be financed out of the proceeds of the Credit have been paid or are payable or, at the option of the Association, in Canadian dollars. (c) If a withdrawal shall be made in a currency which the Association shall have purchased with Canadian dollars for the purpose of such withdrawal, the portion of the Credit so -5- withdrawn shall be deemed to have been withdrawn in Canadian dollars for the purposes of Section 2.08 of this Agreement. Section 2.03. Except as the Association shall otherwise agree, contracts for the purchase of goods or for civil works to be financed out of the proceeds of the Credit, shall be procured in accordance with the provisions of Schedule 1 to the Project Agreement. Section 2.04. The Closing Date shall be March 31, 1982 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 January 15 and July 15 in each year. Section 2.07. 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, 1987, and ending January 15, 2027, each installment to and including the installment payable on January 15, 1997, to be one-half of one per cent (1/2 of 1%) of -6- 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 Borrower shall pay the principal amount of the Credit withdrawn from the Credit Account and the service charges thereon in Canadian dollars. Section 2.09. The Chairman of WDB is designated as representative of the Borrower for the purposes of taking any action in respect of the proceeds of the Credit relent to WDB required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions. - 7 - ARTICLE III Section 3.01. Articles III, IV and V of the IDA Credit Agreement are hereby incorporated into this Agreement with the same force and effect as if they were fully set forth herein, it being understood that all references in such Articles III, IV and V to the "Association" shall be deemed to be references to the Association acting as Administrator on behalf of the Government of Canada under this Agreement and all references to the "Credit" shall be deemed to be references to the Credit hereunder. -8- ARTICLE IV Effective Date; Termination; Representation Section 4.01. The following event is specified as an additional condition to the effectiveness of this Agreement within the meaning of Section 12.01 (b) of the General Conditions, namely, that all conditions to the effectiveness of the IDA Credit Agreement, other than the effectiveness of this Agreement, have been fulfilled. Section 4.02. The date September 29, 1977 is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 4.03. The representative designated in Section 7.01 of the IDA Credit Agreement shall be the representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 4.04. The addresses specified in Section 7.02 of the IDA Credit Agreement shall be the addresses specified for the purposes of Section 11.01 of the General Conditions. -9- ARTICLE V Section 5.01. In accordance with the Agreement, dated April 22, 1977, between the Government of Canada and the International Development Association, the rights and obliga- tions of the Association under this Agreement may be transferred to the Government of Canada, or one of its agencies designated by it. The Borrower accepts and agrees that, upon notice by the Association to the Borrower to that effect, the Government of Canada (or the agency designated by it) shall ipso facto, from the date specified in such notice, be substituted in all rights and obligations of the Association under this Agreement as if the Government of Canada or such agency had been an original party to this Agreement, without any further action or formality required on the part of any party, and from such date the International Development Association shall cease to have any rights or obliga- tions as a party under this Agreement. - 10 - IN WITNESS WHEREOF, the parties thereto, 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. THE REPUBLIC OF SRI LANKA By Is/ Neville Kanakaratne Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION as Administrator on behalf of THE GOVERNMENT OF CANADA By /s/ Ernest Stern Regional Vice President South Asia