Haiti - Industrial Credits Project : Credit 1131 - Credit Agreement - Conformed

LOCUEyp CREDIT NUMBER 1131 HA Development Credit Agreement (Industrial Credits Project) between REPUBLIC OF HAITI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1981 CREDIT NUMBER 1131 HA DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated / Z"-Ct 00, 1981, between REPUBLIC OF HAITI (hefeinafter called the Borrower) and the 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 Bank of the Republic of Haiti with the Borrower's assistance, and as part of such assistance, the Borrower will make available to the Bank of the Republic of Haiti the proceeds of the Credit as hereinafter provided; (C) by letter addressed by the Association to the Secretary of State for Finance of the Borrower on January 21, 1980, the Association granted an advance to the Borrower in the amount of $375,000 for the preparation of the Project; (D) pursuant to the terms of said advance, the amount thereof is to be refunded to the Association out of the proceeds of the Credit provided for in this Agreement; and (E) The Association is willing, on the basis inter alia of the foregoing, to make the Credit available upon the terms and conditions set forth hereinafter and in the Project Agreement of even date herewith between the Association and the Bank of the Republic of Haiti. 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 following modifications thereof (said General Conditions Applicable to Development Credit Agreements -2- of the Association, as so modified, being hereinafter called the General Conditions): (a) The following subparagraph is added to Section 2.01: "14. The term 'Project Agreement' has the meaning set forth in paragraph (b) of Section 1.02 of the Development Credit Agreement." (b) The words "and for Investment Projects" are added before the period at the end of Section 5.03. (c) Section 6.03 is deleted and replaced by the following new Section: "Section 6.03. Cancellation by the Association. If (a) the right of the Borrower to make withdrawals from the Credit Account shall have been suspended with respect to any amount of the Credit for a continuous period of thirty days or (b) by the date specified in Section 2.02 (f) of the Project Agreement no applications for approval or requests for authorization to withdraw from the Credit Account in respoct of any portion of the Credit shall have been received by the Association, or having been so received, shall have been denied or (c) after the Closing Date an amount of the Credit shall remain unwithdrawn from the Credit Account, the Association may, by notice to the Borrower, terminate the right to request such approvals and authorizations or to make withdrawals from the Credit Account, as the case may be, with respect to such amount or portion of the Credit. Upon the giving of such notice such amount or portion of the Credit shall be cancelled." (d) The words "and the Project Agreement" are added after the words "the Development Credit Agreement" in Section 6.06; and (e) The words "or the Project Agreement" are added after the words "the Development Credit Agreement" in Section 10.02. 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: -3- (a) "BRH" means the Bank of the Republic of Haiti, the central bank of the Borrower, established pursuant to the Law of August 17, 1979 published in Le Moniteur No. 72 dated Septem- ber 11, 1979. (b) "IDF" means the Industrial Development Fund created and operating under the Decree of the Borrower of March 20, 1981 published in Le Moniteur No. 25 dated March 26, 1981. (c) "Project Agreement" means the agreement of even date herewith between the Association and the BRH, as such agreement may be amended from time to time. (d) "Intermediary Bank" means any commercial or development bank established under the laws of the Borrower and which has entered into participation agreement with the BRH under Section 2.07 of the Project Agreement. (e) "Sub-loan" means a loan or creeit made or proposed to be made by an Intermediary Bank to an Investment Enterprise for an Investment Project and to be refinanced out of the equivalent of the proceeds of the Credit made available to the IDF. (f) "Investment Enterprise" means an enterprise to which an Intermediary Bank proposes to make or has made a Sub-loan. (g) "Investment Project" means a specific development project to be carried out by an Investment Enterprise utilizing the proceeds of a Sub-loan to finance capital investments, working capital and technical services, or any of them. (h) "Gourde" and "G" mean the currency of the Borrower. (i) "foreign curency" means any currency other than the currency of the Borrower. (j) "Statement of Policy" means the policies and procedures of the IDF adopted and approved by the Board of Directors of the BRH on March 24, 1981, as amended from time to time. (k) "ONAPI" means the Borrower's National Office for Industrial Promotion. -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, an amount in various currencies equiv- alent to five million seven hundred thousand Special Drawing Rights (SDR 5,,00,000) for use by the IDF. Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of this Section, the Project Agreement and 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 made available to the IDF by the Borrower. (b) As of the Effective Date, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and pay to itself the amount required to rr!pay the principal amount of the advance referred to in paragraph (C) 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. The IDF 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 and Article V of the General Conditions. Section 2.04. The Closing Date shall be June 30, 1985 or such later date as the Association shall establish. The Association shall promptly notify the Borrower and the BRH 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. -5- Section 2.06. Service charges shall be payable semi-annually on May 15 and November 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each May 15 and November 15 commencing May 15, 1991, and ending November 15, 2030, each installment to and including the installment payable on November 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 States of America is hereby specified for the purposes of Section 4.02 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 the BRH to perform in accor- dance with the provisions of the Project 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 the BRH 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 available the proceeds of the Credit or the equivalent thereof as a contribution to the perma- nent resources of the IDF under conditions which shall have been approved by the Association. (c) The Borrower shall not, without the prior approval of the Association, modify the conditions referred to in paragraph (b) of this Section. Section 3.02. The Borrower shall not take, or permit any of its political subdivisions, or any of its agencies or instrumen- talities, or any agency or instrumentality of any political subdivision, to take, any action which would prevent or materially interfere with the carrying out of the Project or the performance by the BRH of any of its other obligations under the Project Agreement, and shall take or cause to be taken all reasonable -6- action which shall be required on its part in order to enable the BRH to carry out the Project and to perform such other obliga- tions. Section 3.03. The Borrower shall until September 30, 1983 furnish to the IDF promptly as needed such funds as shall be required to cover that part of its administrative costs not covered by its revenue and shall also make available to the IDF's resources, in addition to the proceeds of the Credit, amounts equivalent to $1,000,000 as follows: $250,000 prior to the Effec- tive Date and the balance as requested by the IDF, but in any event, prior to October 31, 1983. Section 3.04. The Borrower shall ensure that not later than September 30, 1981 the members of the Advisory Committee estab- lished under the law referred to in Section 1.02 (b) of this Agreement have been appointed and its By-laws have been adopted. The Committee will be charged with ensuring the cooperation of governmental agencies in the carrying out of the Project, exami- ning overall industrial and credit policies and exchanging views with the IDF on technical assistance programs for Investment Enterprises. The secretariat of the Committee will be ensured by the IDF. 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) a default shall occur in the performance of any obliga- tion of the BRH under the Project Agreement; (b) the Decree-Law described in paragraph (b) of Section 1.02 of this Agreement shall have been amended so as to affect materially and adversely the operations or financial condition of the IDF; and (c) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of the BRH or the IDF -or for the suspension of its oper- ations. -7- 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 thirty days after notice thereof shall have been given by the Association to the Borrower and the BRH; and (b) any event specified in paragraph (b) or (c) 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 Borrower has made the first payment to the IDF as scheduled under Section 3.03 of this Agreement; and (b) the BRH has entered into participation agreements with two Intermediary Banks as provided in Section 2.07 of the Project Agreement. Section 5.02. The following is specified as an additional matter, 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, namely, that the Project Agreement has been duly authorized or ratified by, and executed and deliv- ered on behalf of, the BRH, and constitutes a valid and binding obligation of the BRH in accordance with its terms. Section 5.03. The datee i ad.ve,h/?*iis hereby specified for the purposes of Section 12.04 of the General Conditions. Section 5.04. The provisions of Article IV of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date fifteen years after the date of this Agreement, whichever shall be the earlier. -8- ARTICLE VI Representative of the Borrower; Addresses Section 6.01. Except as provided in Section 2.03 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 Conditions. Section 6.02. The following addresses are specified for the purposes 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: SECRETAIRERIE D'ETAT DES FINANCES ET DES AFFAIRES ECONOMIQUES Port-au-Prince Haiti 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) - 9 - IN WITNESS WHEREOFT 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 Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President LatidgAmerica and the Caribbean - 10 - 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 Percentage of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Sub-loans granted 4,830,000 86% of dis- under Part A of bursements the Project by IDF (2) Technical Assistance, 100% Part C of the Project: (a) BRH's Super- 90,000 vision Depart- ment (b) IDF 210,000 (c) ONAPI 130,000 (3) Refunding of 310,000 Amount due advance for under Section preparation 2.02 (b) of the of this Project Agreement (4) Unallocated 130,000 TOTAL 5,700,000 - 11 - 2. To the extent that the amount allocated to Category (3) is insufficient for, or in excess of, the amount required, adjustment will be made by allocations from or to Category (4). 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 (i) payments made for expenditures prior to April 14, 1981, or (ii) assistance to ONAPI under Part C of the Project until the BRH, acting through the IDF, and ONAPI have entered into a technical cooperation agreement satisfactory to 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 expendi- tures; 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. - 12 - SCHEDULE 2 Description of the Project The Project is designed to support the Borrower's policy of promoting industrial development and includes the following: Part A: Sub-loans The refinancing by the BRH, acting through the IDF, of Sub-loans approved by the IDF granted by Intermediary Banks to Investment Enterprises for Investment Projects under the conditions set forth in the Schedule to the Project Agreement and their supervision by the BRH acting through the IDF. Part B: Technical Assistance The design and administration by the BRH, acting through the IDF, of a program of technical assistance to small- and medium-scale industrial enterprises. Part C: Organizational Development The strengthening of the management and operations of the IDF, the Supervision Department of the BRH and the ONAPI, including training of staff and the employment of consultants and experts for the purpose. Part C of the Project is expected to be completed by Janu- ary 31, 1985. 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 L. FOR SECRETARY