Mali - Petroleum Exploration Promotion Project : Credit 1134 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 1134 MLI 0)P CJj3 Development Credit Agreement (Petroleum Exploration Promotion Project) between REPUBLIC OF MALI and INTERIATIONAL DEVELOPMENT ASSOCIATION Dated April 29, 1981 xp CREDIT NUMBER 1134 MLI DEVELOPMENT CREDIT AGREEMENT 1. AGREEMENT, dated April 29, 1981, between the REPUBLIC,OF MALI (hereinafter called the Borrower) and the INTERNATIONAL DEVELOP- MENT 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; (9) by letters addressed by the Association to the Minister of Finance and Commerce of the Borrower dated June 11, 1979 and December 5, 1980 the Association granted an advance to the Bor- rower in the aggregate amount of one million dollars ($1,000,000)' for the preparation of the Project; (C) pursuant to the terms and conditions of said advance, the amount thereof is to be refunded to the Association but of the proceeds of the Credit provided for in this Agreement; 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; 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 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 General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following ieanings: -2- (a) "Ministry" means the Borrower's Ministry responsible for Industrial Development; (b) "Directorate" means the Ministry's National Directorate of Geology and Mines; and (c) "Energy" means the Ministry's- Directorate of Hydraulics and Energy. 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 three million one hundred thousand Special Drawing Rights (SDR 3,100,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of this Section and 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. (b) Promptly after the\Effective Date, the Association 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 referred to in paragraph (B) of the Preamble to this Agreement withdrawn and outstanding as of such date and to pay any unpaid charges thereon. Any unwithdrawn balance of the authorized amount of such advance shall be automatically cancelled as of the same date. Section 2.03. Except as the Association shall otherwise agree, procurement of office, laboratory and storage equipment under Part A.4 of the-P-roject shall be carriod out under the competitive bidding procedures of the Borrower. Section 2.04. The Closing Date shall obe June 30, 1984 or such later date as the Association shall establish. The 0 -3- 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 o one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to,time. o Section 2.06. Service charges shall be payable semiannually on February 15 and August 15 in each year. D riCl Section 2.07. The Borrowr shall repay the principal amount of the Credit in semiannual installments payable on each Februapy 15 and August 15 commencing August 15, 1991, and,ending February 15, 2031, each installment to and including the installment payable on February 15, 2001, to-be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment othere- after to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.08. The currency of the French Republic is hereby specified for the purposes of Section 4.02 of the General Condi- tions. ARTICLE III Execution of the Project Section 3.01. The Borrower shall carry out the Project through the Ministry with due diligence and, efficiency and in Conformity with appropriate administrative, financial, engineering practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose'. Section 3.02. In order to assist the Borrower in carrying out the Project, the Borrower shall employ such consultants and other experts whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association, as shall be agreed between the Borrower and the Association. Section 3.03. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any 0C 04 indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) Except as the Association shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the Project. Section 3.04. (a) The Borrower shall furnish to the Associa- tion, promptly upon their preparation, the plans, specifications, reports, contract documents and work and procurement schedules 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 andeprocedures adequate to record and monitor the progress of the Project (including its cost and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Credit, and to disclose their use in the Project; (ii) shall enable the Association's accredited representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the'Credit and any relevant records and documents; and (iii) shall furnish to kthe Association at regular intervals all such information as the Association shall reasonably request concerning the Project, its cost and, where appropriate, the benefits W be derived from it the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. (c) Promptly after completion of the Project, but in any event not later than six months after the Closing Date or. such later date as may be agreed for this purpose between the Borrower and the Association, the Borrower shall prepare and furnish to the -Association a report, of such scope and in such detail as the Association shall reasonably request, on the execution and initial operation of the Project, its cost and the benefits derived and to be derived from it, the performanceoby the Borrower and the Association of their respective oblIgations. under the Development Credit Agreement and the accomplishment of the purposes of the Credit. Section 3.05. The Borrower shall take all such action as shall be necessary to acquire as and when needed all such land or rights in respect o;f land as shall be required for carrying out the Project. -5- Section 3.06. Prior to the end of each calendar year until completion of the Project, the Borrower shall furnish to the Association, a report on the staffing of,the Hydrocarbon Division of the Directorate. Section 3.07. The Borrower shall ensure that the proceeds of any sale of reports, studies or other data produced under the Project be us9d exclusively to promote exploration for hydro- carbons. ARTICLE IV Other Covenants 9ection 4.01. (a) The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with a considstently maintained appropriate accounting practices the operations, resources and expenditures, in respect of the Project, of the departments) or agencies of the Borrower responsible for carrying out the Project or any part thereof, and for the purpose shall cause the Directorate and Energy to maintain accounts in respect of the Project separate from their other operations. (b) The Borrower shall cause the Directorate and Energy a to: (i) have the separate accounts for the Project for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors accept- able to the Association; (ii) furnish to the Association as soon as available, but in any case not later than four months after the end of each such year, (A) certified copies of their financial statements for such year as so audited and (B) the reports of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning such accounts and financial statements of and the audits thereof as the Associa- tion shall from time to time reasonably request. Section 4.02. Prior to June 30, 1982 the Borrower shall exchange views with the Association on the results and recom- mendations of the study of the system of supply and of pricing of petroleum products included in Part B of the Project, with a view to agreeing on a plan of action based thereon. -6- ARTICLE V Termination Section 5.01. The date July 28, 1981, is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 5.02. The obligations of the Borrower under Article IV of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date twenty years after the date of this Agreement, whichever shall be the earlier. ARTICLE VI Representatives of the Borrower;-Addresses Section 6.01, The Minister of the Borrower responsible for finance is designated as representative of the Borrower for the purposes of Section 11.03 of t,e General Conditions. Section 6.02. The follo,ing .addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministere des Finances et Commerce Bamako Republic of Mali Cable address: Telex: MINIFINANCES 972-559 Bamako For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America -7- 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 MALI By /s/ Macky Koreissi Tall Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATIC-7 By /s/ Bilsel Alisbah Acting Regional Vice President Western Africa -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 SDR Equivalent) to be Financed (1) Consultants'eservices, 1,400,000 100% of foreign Parts A and B of the expenditures or, Project; audits if furnished locally, 90% of local expendi- tures (2) Equipment 300,000 100% of foreign expenditures or, if purchased domestically, 65% of local expenditures (3) Training, Parts A 200,000 100% of foreign and B of the expenditures Project (4) Refunding of 825,000 Amount due Advance for under Section Project 2.02 (b) at Preparation Effective Date (5) Unall a 375,000 TOTAL 3,100,000 -9; 2. If the amount allocated under Category 4 is excessive or insufficient for the purposes of Section 2.02 (b), the necessary adjustment shall be made by reallocation to or from Category 5. 3. 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 or for goods or services supplied from the territory of the Borrower. 4. 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. 5. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expen- ditures prior to Ghe date of this Agreement, except that with- drawals in an aggregate amount not exceeding the equivalent of $200,000 may be made in respect of Categories 1 and 3 on account of payments made for such expenditures before that date but after January 1, 1981. 6. 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 - 10 - opinion of the Association are,not needed to meet other expendi- tures; and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the dishIrsement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 7. 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 Associatic'ineay, without in any way restric- ting or limiting any other right, power or remedy of the Associa- tion under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as, in the Associa- tion'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 purpose of the= Project is to assist in evaluating the hydrocarbon potential of the Taoudeni Basin and to strengthen the institutional capabilities of the Ministry. The Project includes the following: 0 Part A: Promotion and Strengthening of Organization 1. Promotion of the Taoudeni Basin to oil, companies; negotiation of exploration agreements; 2. Monitoring the activities of operating companies and integrating collected data into the Directorate's -terpretation of the Basin; 3. -Training of geophysicists and geologists through fellow- ships outside of Mali; and ; 4. Establishing a library, a laboratory and storage facili- ties for well samples and documents, and the procurement of equipment for the purpose. Part B: Energy Studies 1. Reviewing the system of supply and the pricing structure of petroleam products and defining future po3icies related thereto; D07 2. Reviewing the energy sector, identifying issues and defining a future plan of action; and 3. Assessing institutional, training and technical needs to strengthen the administrative and project preparation capabilities of the Ministry. 4. Evaluating the potential of the Agamor oil shale deposits, including a review of existing data, collection of samples aind, laboratory testing. Tf deemed warranted ad techno- logically feasible by the Borrower and the Association on the - 12 - basis of the results of the foregoing, carrying out an estimate of the reserves and preparing a preliminary feasibility study. The Project is expected to be completed by December 31, 1983. oC