Tanzania - Second Technical Assistance Project : Credit 1060 - Credit Agreement - Conformed

DL CMENTS CREDIT NUMBER 1060 TA Development Credit Agreement (Second Technical Assistance Project) between UNITED REPUBLIC OF TANZANIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1980 CREDIT NUMBER 1060 TA DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated , 1980, 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 WHEREAS the Association has agreed, on the basis inter alia of the foregoing, to extend the Credit to the Borrower upon the terms and conditions hereinafter set forth and in the 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 June 30, 1980, 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 - 2 - amended from time to time, and such term includes all schedules to the Project Agreement and all agreements supplemental to the Project Agreement; (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; (c) "TAU" means the Technical Assistance Unit in TIB's Planning and Development Department; (d) "Sub-Project" means any of the studies or training activities included in the Project; and (e) "Tanzania Audit Corporation" means the Tanzania Audit Corporation established and operating in accordance with the provisions of the Tanzania Audit Corporation Act No. 1 of 1968. 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 eight million four hundred thousand Special Drawing Rights. (SDR 8,400,000). 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 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, procurement of the goods and services (other than consul- tants' services) to be financed out of the proceeds of the Credit, shall be governed by the provisions set forth or referred to in Section 2.03 of the Project Agreement. Section 2.04. The Closing Date shall be June 30, 1985 or such later date as the Association shall establish. The Associ- ation shall promptly notify the Borrower of such later date. -3- 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 April 15 and October 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each April 15 and October 15 commencing October 15, 1990, and ending April 15, 2030, each installment to and including the installment payable on April 15, 2000,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 permit- ted to be taken under the provisions of Section 2.02 of this Agreement aid 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 satis- factory to the Association. -4- (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, 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: (a) TIB shall have failed to perform any of its obligations under the Project Agreement; and (b) the organization, powers or responsibilities of TIB shall have been terminated or altered so as to affect materially and adversely the performance by TIB of its obligations under the Project Agreement. 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) and (b) of Section 4.01 of :his 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 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 execution and delivery of the Project Agreement on behalf of TIB have been duly authorized or ratified by all neces- sary corporate and governmental action; and (b) the Subsidiary Agreement has been executed on behalf of the Borrower and TIB. -5- Section 5.02. The following are specified as additional matters, within the meaning 3f 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 TIB, and is legally binding upon TIB in accordance with its terms; and (b) that the Subsidiary Agreement has been duly authorized or ratified by the Borrower and TIB and is legally binding upon the Borrower and TIB in accordance with its terms. Section 5.03. The date ni) is hereby specified for the purposes of Section 42.04 of the General Conditions. Section 5.04. The provisions of Section 4.02 of this Agree- ment shall cease and determine on the date on which the Develop- ment Credit Agreement shall terminate or on a date ten 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 Condi- tions. Section 6.02. The following addresses are specified for the purpose of Section 11.01 of the General Conditions: For the Borrower: The Principal Secretary The Treasury P.O. Box 9111 Dar es Salaam United Republic of Tanzania Cable address: TREASURY Dar es Salaam -6- 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. 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 \ oJit Ve Vt J Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By IFlvAj, ( R A j Regional Vice President . Eastern Africa -7- 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 SDR Equivalent) to be Financed (1) Consultants' 5,720,000 100% of for- services, equip- eign expendi- ment and materials tures and 80% for Sub-projects of local ex- under Part A of penditures the Project (2) Training Sub- 100% of for- projects under eign expendi- Part B of the tures and 80% Project: of local ex- penditures (a) Tanzania Audit 765,000 Corporation (b) Other 765,000 (3) Professional 460,000 100% of for- staff for TAU eign expendi- under Part C of tures,and 80% the Project of local expenditures (4) Vehicles and 80,000 100% of for- equipment under eign expendi- Part C of the tures and 80% Project of local ex- penditures (5) Unallocated 610,000 TOTAL 8,400,000 -8- 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; and (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. 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 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 1 above, no withdrawals shall be made in respect of payments made for expendi- tures: (a) prior to the date of this Agreement; (b) on a Sub-project under Categories (1) and (2) unless approval or withdrawal authorization for such Sub-project has been given by the Association in accordance with Section 2.09 of the Project Agreement; and (c) on a Sub-project under Category (2) (a) until a revised Tanzania Audit Corporation training program shall have been submitted to the Association for its review and approved by it. 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 -9- 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 expen- ditures; 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 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. - 10 - SCHEDULE 2 Description of the Project The Project is designed to assist the Borrower in the plan- ning and implementation of its economic development programs and consists of the following Parts: Part A: Provision of funds to productive enterprises and governmental agencies to assist them in carrying out pre-investment, capacity utilization and export marketing studies, as well as detailed engineering work for high priority projects in the industrial, agricultural, energy and other sectors of the Borrower's economy, project preparation and implementation services and sectoral studies; and supervision of the carrying out of such studies, services and work. Part B: Provision of funds to productive enterprises and governmental agencies to assist them in carrying out training programs in Tanzania for management and technical staff from the various sectors, and a limited amount of job-related overseas training; and supervision of the carrying out of such training. Part C: Improvement of TAU's capacity to carry out Parts A and B above. The Project is expected to be completed by December 31, 1984. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the day of 198 0U. FOR SECRETARY