Benin - Power Engineering And Technical Assistance : Credit 1190 - Credit Agreement - 2 - Conformed

OFICIAL DOCU T CREDIT NUMBER 1190 TO Development Credit Agreement (Power Engineering and Technical Assistance Project) between REPUBLIC OF TOGO and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1982 CREDIT NUMBER 1190 TO DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated 0U-CL aA , 1982, between REPUBLIC OF TOGO (hereinafter c lled 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 foreign exchange cost of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) any financing so provided by the Association would be refunded, if the Association so requests, out of the proceeds of any credit by the Association or loan by the International Bruk for Reconstruction and Development which may later be granted to the Borrower, or any political subdivision thereof, or any enterprise owned or controlled by, or operating for the account or benefit of the Borrower or of any such subdivision or any subsidiary of such enterprise, for the carrying out of any project for which studies or designs have been carried out under the Project; (C) the People's Republic of Benin has also requested the Association to assist in the financing of the foreign exchange cost of the Project described in Schedule 2 to this Agreement and by an agreement of even date herewith between the People's Republic of Benin and the Association (the "Benin Development Credit Agreement"), the Association is agreeing to provide such assistance in an aggregate principal amount equivalent to one million seven hundred thousand Special Drawing Rights (SDR 1,700,000); (D) Parts A, B.1 (a), B.2 (a), B.3 (a), C.3 and C.4 of the Project will be carried out by the Communaut6 Electrique du Benin ("CEB") with the assistance of the Borrower and the People's Republic of Benin and, as part of such assistance, the Borrower will make available to CEB part of the proceeds of the Credit as hereinafter provided and the People's Republic of Benin will make available to CEB part of the proceeds of the credit provided for under the Benin Development Credit Agreement in accordance with the terms of said agreement; (E) the Borrower, the People's Republic of Benin, and the Association intend that for the financing of the Parts of the Project to be carried out by CEB, the proceeds of the Credit - 2 - provided for in this Agreement be disbursed pari pass- with the proceeds of the credit provided for in the Benin Development Credit Agreement; (F) Parts B.1 (b), B.2 (b), B.3 (b) and C.1 of the Project will be carried out by the Compagnie Energie Electrigue du Togo ("CEET") with the Borrower's and CEB's assistance and, as part of such assistance, the Borrower, through CEB, will make available to CEET part of the proceeds of the Credit as hereinafter provided; (G) by an exchange of letters dated December 5, 1980 and February 11, 1981 between the Borrower and the Association, the Association has granted the Borrower an advance (hereinafter called the Advance) in an amount equivalent to $400,000 to assist the Borrower in financing the preparation of the Project and the Association is prepared to refund such Advance out of the proceeds of the Credit provided for herein; (H) CEB has contracted from the Republic of France, acting through its Fonds d'Aide et de Coopfration ("FAC"), a grant in the amount of four million five hundred thousand French Francs (FF 4,500,000) to assist in financing Part A of the Project on the terms and conditions set forth in an agreement dated February 6, 1981 between the Republic of France and the Borrower; 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 CEB; 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, subject, however, to the modifications thereof set forth in Schedule 3 to this Agreement (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, being hereinafter called the General Conditions). -3- 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 meaning.: (a) "CEB" means the Communautf Electrique du Binin, an international public enterprise established and operating pursuant to the Accord Relatif A 1'Institution d'un Code Daho-Togolais de 1'Electricitl et A la Criation d'une Communautf Electrique du Binin, between the Borrower and the People's Republic of Benin, dated July 27, 1968, as the same may be amended from time to time; (b) "CEET" means the Compasnie Eneriis Electrique du Toso, a public company established pursuant to the Borrower's Ordinance No. 63-12 of March 20, 1963, and operating pursuant to statutes approved by the Borrower's Decree No. 63-152 of December 11, 1963, as such statutes may be amended from time to time; (c) "SBEE" means Sociftf Bininoise d'Electricitg at d'Eau, a public company established by Ordinance No. 73-13 of February 7, 1973, of the People's Republic of Benin and operating pursuant to statutes approved by Ordinance No. 74-20 of March 11, 1974, of the People's Republic of Benin, as such statutes may be amended from time to time; (d) "Project Agreement" means the agreement between the Association and CEB of even date herewith, as the same may be amended from time to time; (e) "Togo Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and CEB pursuant to Section 3.01 (b) of this Agreement, as the same may be amended from time to time; (f) "CEET Financing Agreement" means the agreement to be entered into between CEB and CEET pursuant to Section 3.01 (b) of this Agreement and Section 2.06 of the Project Agreement, as the same may be amended from time to time; (g) "Benin Development Credit Agreement" means the develop- ment credit agreement of even date with this Agreement between the People's Republic of Benin and the Association for the Project, as the same may be amended from time to time; (h) "Benin Subsidiary Loan Agreement" means the agreement to be entered into between the People's Republic of Benin and CEB pursuant to Section 3.01 (b) of the Benin Development Credit Agreement, as the same may be amended from time to time; (i) "SBEE Financing Agreement" means the agreement to be entered into between CEB and SBEE pursuant to Section 3.01 (b) of the Benin Development Credit Agreement and Section 2.06 of the Project Agreement, as the same may be amended from to time; (j) "Fiscal Year" means: (i) with respact to CEB, the period January 1 through December 31; (ii) with respect to CEET, the period October 1 through September 30; and (iii) with respect to SBEE, the period July 1 through June 30; (k) "Nangbeto Hydroelectric Project" means the joint project by the Borrower and the People's Republic of Benin for the con- struction of a 60 MW hydroelectric power facility on the Mono River at Nangbeto, to be carried out and operated by CEB; and (1) "Advance" means the advance in various currencies equivalent to four hundred thousand dollars ($400,000) granted to the Borrower by the Association pursuant to an exchange of letters dated December 5, 1980 and February 11, 1981. 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 one million eight hundred thousand Special Drawing Rights (SDR 1,800,000). Section 2.02. (a) 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 services (including any goods required in connection with such services, as provided in the contracts for such services) required for the Project and to be financed out of the proceeds of the Credit. - 5 - (b) Promptly after the Effective Date, the Associat,on shall, on behalf of the Borrower, withdraw from the Credit Account and pay to itself the amount required to repay the principal amount of the Advance withdrawn and outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Advance shall automatically be cancelled as of the same date. Section 2.03. The Clos-ing Date shall be December 31, 1983 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. Section 2.04. 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 2.05. Scrice charges shall be payable semiannually on May 15 and November 15 in each year. Section 2.06. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each May 15 and November 15 commencing November 15, 1991, and ending May 15, 2031, each installment to and including the installment payable on May 15, 2001, 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 2.07. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.08. CEB is designated as representative of the Borrower for the purposes of taking any action required or permitted 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 a7.iy of its other obligations under the Development Credit Agreement, the Borrower shall (i) exercise any right, power or remedy available to it so as to permit CEB to perform in - 6 - accordance with the provisions of the Project Agreement and the Togo Subsidiary Loan Agreement all the obligations therein set forth, and shall not take or permit to be taken any action which would prevent or interfere with such performance, and (ii) cause CEET to carry out Parts B.1 (b), B.2 (b), B.3 (b), and C.1 of the Project in accordance with the provisions of the CEET Financing Agreement, shall take all action necessary or appropriate to enable CEET 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 CEB under a subsidiary loan agreement to be entered into between the Borrower and CEB on terms and conditions which shall have been approved by the Association. Such terms and conditions shall include, inter alia, that, out of the proceeds of the Credit, (i) $750,000 equivalent shall be relent to CEB for a term of 20 years, including a grace period of 3 years, at an interest rate of 11.60% per annum, (ii) $1,235,000 equivalent shall be made available to CEB as a grant, and (iii) out of such grant funds, CEB shall make $510,000 equivalent available to CEET as a grant under a financing agreement to be entered into between CEB and CEET on terms and conditions which shall have been approved by the Association and which shall include, inter alia, the provisions set forth in the Schedule to the Project Agreement. (c) The Borrower shall eercise its rights under the Togo Subsidiary 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 Togo Subsidiary Loan 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, namely, that: (a) CEB shall have failed to perform any covenant, agreement or obligation of CEB under the Project Agreement, the Togo Subsidiary Loan Agreement, or the CEET Financing Agreement; -7- (b) CEET shall have failed to perform any covenant, agree- ment or obligation of CEET under the CEET Financing Agreement; (c) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of CEET or CEB, or for the suspension of their respective operations; (d) an extraordinary situation shall have arisen which shall make it improbable that CEB will be able to perform its obligations under the Project Agreement, the Togo Subsidiary Loan Agreement, or the CEET Financing Agreement, or which shall make it improbable that CEET will be able to perform its obligations under the CEET Financing Agreement; (e) the Accord Relatif a l'Institution d'un Code Daho- Togolais de l'Electricitg et a la Creation d'une Communaute Electrigue du B&nin dated July 27, 1968, or the Code de l'Electri- cite annexed to such Accord, shall have been amended, suspended, abrogated, repealed or waived in such a way as to materially and adversely affect the ability of CEB to carry out the covenants, agreements and obligations set forth in the Project Agreement, the Togo Subsidiary Loan Agreement, or the CEET Financing Agreement; (f) (i) subject to subparagraph (ii) of this paragraph, the right of the People's Republic of Benin to withdraw the proceeds of the credit made available to it under the Benin Development Credit Agreement shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the Benin Development Credit Agreement; (ii) subparagraph (i) of this paragraph shall not apply if adequate funds for the Project are available to CEB and SBEE from other sources on terms and conditions consistent with the obligations of CEB and SBEE under the Project Agreement and the SBEE Financing Agreement, respectively. 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) or (b) of Section 4.01 of this Agreement shall occur and shall continue for a period - 8 - of 60 days after notice thereof shall have been given by the Association to the Borrower and to CEB or CEET, as the case may require; and (b) any event specified in paragraph (c), (e) or (f) oi 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 Togo Subsidiary Loan Agreement has been executed on behalf of the Borrower and CEB; (b) the CEET Financing Agreement has been executed on behalf of CEB and CEET; and (c) the conditions precedent to the effectiveness of the Benin Development Credit Agreement, other than fulfillment of the conditions precedent to the effectiveness of this Agreement, have been satisfied. 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 signed and authorized or ratified by CEB, and is legally binding upon CEB in accordance with its terms; (b) that the Togo Subsidiary Loan Agreement has been duly signed and authorized or ratified by the Borrower and CEB, and is legally binding upon the Borrower and CEB in accordance with its terms; and (c) that the CEET Financing Agreement has been duly signed and authorized or ratified by CEB and CEET, and is legally binding upon CEB and CEET in accordance with its terms. - 9- Section 5.03. The date D a , is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 5.04. The provisions of paragraph (b) of Section 4.02 of this Agreement shall cease and determine on the date on which the Development 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. Except. as provided in Section 2.08 of this Agreement, the Minister of the Borrower at the time responsible for finance and economy 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 purpose of Section 11.01 of the General Conditions: For the Borrower: Ministere de 1'Economie et des Finances B.P. 387 Lomg Togo Cable address: Telex: MINFINANCES 5286 Lomg, Togo For the Association: International Development Association 1818 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) - 10 - For CEB: Communaute Electrique du Benin Direction Gen&rale Rue de l'Hopital B.P. 1368 Lomg, Togo Cable address: BENELEC Lome, Togo For CEET: Compagnie Energie Electrique du Togo 10 Rue du Colonel de Roux B.P. 42 Lome, Togo Cable address: Telex: CEET 5230 CEET Lome, Togo 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 TOGO By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President Western Africa - 11 - 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' and experts' services (including goods provided for in the contracts for such services) for: (a) Part A and Parts 620,000 50% of foreign C.3 and C.4 of the expenditures Project (b) Parts B.1 (a), 130,000 50% of foreign B.2 (a), B.3 (a) expenditures of the Project (c) Parts B.1 (b), 460,000 100% of foreign B.2 (b), B.3 (b), expenditures C.1 of the Project (2) Refinancing of 360,000 Amount due the Advance under Section 2.02 (b) (3) Unallocated 230,000 TOTAL 1,800,000 2. For the purposes of this Schedule, the term "foreign expen- ditures" means expenditures in the currency of any country other than the Borrower and for goods or services supplied from the - 12 - territory of any country other than the Borrower; provided, however, that if the currency of the Borrower is also that of another country from the territory of which goods or services are supplied, expenditures in such currency for such goods or services shall be deemed to be "foreign expenditures" but, pro- vided further, that expenditures for goods or services supplied from the territory of the People's Republic of Benin shall not be deemed to be "foreign expenditures". 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 with- drawals shall be made in respect of payments made for expenditures prior to November 10, 1981, except that withdrawals, in an aggregate amount not exceeding the equivalent of $645,000 may be made in respect of Subcategories (1) (b) and (c) on account of payments made for such expenditures before such date but after February 1, 1981. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in paragraph 1 above, if the Association has reasonably estimated that the amount of the Credit then allocated to any Category or Subcategory will be insufficient to finance the agreed percentage of all expendi- tures in that Category or Subcategory, the Association may, by notice to the Borrower: (i) reallocate to such Category or Subcategory, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allocated to another Category or Subcategory 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 expenditures in order that further withdrawals under such Category or Subcategory may continue until all expenditures thereunder shall have been made. - 13 - SCHEDULE 2 Description of the Project The purpose of the Project is to complete the studies and related activities necessary for the preparation of the Nangbeto Hydroelectric Project and to carry out ancillary studies for the planning of the power sectors of Togo and Benin and the strength- ening of the relevant institutions. The Project consists of the following Parts: Part A: Preparatory Studies and Activities for the Nangbeto Hydroelectric Project 1. Completion of engineering design studies, including geological investigations and hydraulic model tests. 2. Pre-contracting activities including, inter alia, preparation of bid and contract documents, prequali- fication of contractors and suppliers, and evaluation of bids. 3. Preparation of a plan for the resettlement of the population to be affected by the construction works. 4. Detailed review and monitoring of the studies and activities to be carried out under Parts A.1 through A.3 of the Project by a panel of independent experts. Part B: Power Sector Studies 1. Organizational and Financial Studies (a) A study of CEB's management, organization, finances and training needs, and formulation of a plan to correct shortcomings identified by such study. (b) A study of CEET's management, organization, finances and training needs, and formulation of plans to correct shortcomings identified by such study, for integration of the thermal power plant at Lome into the power sector of the Borrower, and for improving plant maintenance practices. - 14 - (c) A study of SBEE's management, organization, finances and training needs, etnd formulation of a plan to correct shortcomings identified by such study. 2. Audits (a) Auditing of CEB's accounts and financial statements (balance sheet, statement of income and expenses and related statements) for Fiscal Year 1980 and review of its accounting system and procedures. (b) Auditing of CEET's accounts and financial state- ments (balance sheet, statement of income and ex- penses and related statements) for Fiscal Year 1980 and review of its accounting system and procedures. 3. Tariff Studies (a) A study of CEB's tariffs; (b) A study of CEET's tariffs. (c) A study of SBEE's tariffs. Part C: Planning Studies 1. Preparation of a master plan for the distribution of electric power in the city of Lomi, including identification of priority works. 2. Preparation of a master plan for the distribution of electric power in the city of Cotonou, including identification of priority works. 3. A survey of potential hydroelectric resources in Togo and Benin, including identification and ranking of priority sites. 4. Preparation of a master plan for the development of power generation and distribution in Togo and Benin, taking into consideration possible regional inter- connection and the results of the survey to be carried out under Part C.3 of the Project. T P * The Project is expected to be completed by June 30, 1983. - 15 - SCHEDULE 3 Modifications of General Conditions For the purpose of this Agreement, the General Conditions are modified as follows: 1. The following paragraph 14 is added at the end of Section 2.01: "14. The term Benin Development Credit Agreement means the development credit agreement between the People's Republic of Benin and the Association for the purpose of the Project, of even date with the Development Credit Agreement, as such agreement may be amended from time to time." 2. The following paragraph (m) is added at the end of Section 10.03: "(m) If any arbitration proceeding is instituted under this Section and if the controversies or claims to be submit- ted to arbitration involve a question of law or fact common to any controversy or claim submitted to arbitration under the Benin Development Credit Agreement, such arbitration proceedings shall be consolidated into one proceeding upon request by either party notified to the other, provided that if in such other arbitration proceeding a period shall have been fixed for the presentation of evidence, such notice shall have been given prior to the expiration of such period. A request for consolidation shall be promptly notified to the parties to such other arbitration proceeding and, if already appointed, to the Umpire of the arbitral tribunal constituted for such other proceeding. The Borrower and the Association hereby accept any consolidation of arbitration proceedings duly requested pursuant to Section 10.03 (m) of the General Conditions applicable to the Benin Development Credit Agreement. The provisions of paragraphs (a) through (1) of this Section shall apply mutatis mutandis to any consolidated arbitration proceeding, except that the parties shall be the Association on the one hand, and the Borrower and the People's Republic of Benin on the other, and the Arbitral Tribunal shall consist of three arbitrators appointed as follows: one arbitrator shall be appointed by the Associa- tion; a second arbitrator shall be appointed by the Borrower - 16 - and the People's Republic of Benin; and the third arbitrator (hereinafter sometimes called the Umpire) shall be appointed by agreement of the parties or, if they shall not agree, by the President of the International Court of Justice or, failing appointment by him, by the Secretary-General of the United Nations. If the Borrower and the People's Republic of Benin shall not agree on the appointment of a common arbitrator, the Borrower and the People's Republic of Benin shall each appoint one arbitrator and, in such event, the Association, on its part, shall appoint two arbitrators and the four arbitrators so appointed shall, together with the Umpire appointed as provided above, constitute the Arbitral Tribunal. If any party shall fail to appoint an arbitrator, such arbitrator shall be appointed by the Umpire." 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 , 19 8 4. FOR SECREAY