Equatorial Guinea - Petroleum Secto Technical Assistance Project : Credit 1304 - Credit Agreement - Conformed

CREDIT NUMBER 1304 EG Development Credit Agreement (Petroleum Sector Technical Assistance Project) between REPUBLIC OF EQUATORIAL GUINEA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated ,11983 CREDIT NUMBER 1304 EG DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated uZ /, 1983, between REPUBLIC OF EQUATORIAL GUINEA (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). 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 Conditiovs have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Department of Petroleum Affairs" means the Department of Petroleum Affairs established in the Borrower's Office of the President pursuant to Decree-Law No. 2 of the Borrower, dated April 22, 1982, or in such other office of the Borrower agreed to by the Borrower and the Association; and (b) "Project Preparation Advance" means the project pre- paration advance granted by the Association to the Borrower pur- suant to an exchange of letters dated March 1, 1982 and April 19, 1982 between the Borrower and the Association. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Bor- rower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various curren- cies equivalent to two million three hundred thousand Special Drawing Rights (SDR 2,300,000). -2- Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in &ccrdance with the provisions of Schedule 1 *to this Agreement, as such Schedule may be amended from time to time by agreement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 Asso- ciation, 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 prin- cipal amount of the Project Preparation Advance withdrawn and outstanding as of such date and to pay all unpaid charges there- on. The unwithdrawn balance of the authorized amount of the Pro- ject Preparation Advance shall thereupon be cancelled. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods required for ;.he Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be December 31, 1986 or such later date as the Association shall establish. The Associa- tion shall promptly notify the Borrower of such later date. Section 2.05. (a) The Borrower shall pay to the Association a commitment charge at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of the Credit not with- drawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the Development Credit Agree- ment to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or shall be cancelled. (b) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without re- strictions of any kind imposed by, or in the territory of, the Borrower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. Section 2.06. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 -3- of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.07. Commitment and service charges shall be pay- able cemiannually on January 1 and July 1 in each year. Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each Janu- ary 1 and July 1 commencing January 1, 1993, and ending July 1, 2032, each installment to and including the installment payable on July 1, 2002, 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 princi.al amount. Section 2.09. 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. The Borrower shall carry out the Project with due diligence and efficiency and in conformity with appropriate administrative, financial and petroleum industry practices, and shall provide, promptly as needed, the funds, facilities, ser- vices and other resources rocuired for the purpose. Section 3.02. (a) In order to assist the Borrower in carry- ing out the Project, the Borrower shall employ consultants and experts as specified in Schedule 4 to this Agreement as such Schedule may be amended from time to time by agreement between the Borrower and the Association; their selection, qualifica- tions, experience and terms and conditions of employment shall be satisfactory to the Association in accordance with the principles and procedures described in the "Guidelines for the Use of Con- sultants by World Bank Borrowers and by the World Bank as Execu- ting Agency" published by the Bank in August 1981. (b) The Borrower shall cooperate fully with such consul- tants and experts in the performance of their services for the Project and make available to them all information relevant to the Project; such information to be treated confidentially by such consultants and experts. -4- (c) The Borrower shall diligently furnish to the Associa- tion copies of the documents and reports of such consultants and experts prepared by them for the Project, and shall from time to time exchange views with the Association on the conclusions and recommendations contained therein and, in particular, shall con- sult with the Association prior to the implementation of the con- sultants' recommendations concerning the matter referred to in paragraph 2 (iii) of Schedule 4 to this Agreement. (d) Any amendment or waiver of the terms and conditions of employment of the experts or consultants employed under the Pro- ject, or grant of any material extension of time or approval of sub-contracts or modifications thereof, or substitution of per- sonnel of such experts or consultants shall be satisfactory to the Borrower and the Association. (e) Without any limitation upon its obligations under Sec- tion 3.01 of this Agreement, the Borrower shall: (i) ensure the availability of qualified professional staff for on-the-job training by the consultants and experts employed under paragraph (a) above; and (ii) provide adequate local support personnel and services (including office facilities) to the experts and consul- tants employed under paragraph (a) above. (f) (i) For purposes of the training included in Part C of the Project, the Borrower shall furnish to the Association a list of the candidates to be train- ed, their qualifications and experience, the pro- posed training program and the positions to which they will be assigned upon its completion; such qualifications, experience, program and positions to be satisfactory to the Association and to be furnished to the Association three months before the candidates concerned start their training. (ii) The Borrower shall furnish to the Association detailed annual reports on the progress made by the professionals being so trained. (iii) The Borrower shall ensure that such professionals remain in its service for at least 5 years after completion of their training. Section 3.03. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be -5- financed out of the proceeds of the Credit against hazards inci- dent to the acquisition, transportation and, delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) The Borrower shall cause all goods and services fi- nanced out of the proceeds of the Credit to be used exclusively for the purposes of 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 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 and procedures 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 representatives to visit the facilities included in the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and docu- ments; and (iii) shall furnish to the Association at regular intervals all such information as the Association shall reason- ably request concerning the Project, its cop-_ and, where appro- priate, the benefits to be derived from it, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds, including, without limitation to the fore- going, quarterly reports on the progress of the Project and annual reports summarizing the quarterly reports and including a detailed statement on the staffing of the Department of Petroleum Affairs. (c) Upon the award by the Borrower of any contract for goods or services to be financed out of the proceeds of the Cre- dit, the Association may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (d) 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 - 6 - 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 ini- tial operation of the Project, its cost and the benefits derived and to be derived from it, the performance by the Borrower and the Association of their respective obligations under the Devel- opment Credit Agreement and the accomplishment of the purposes of the Credit. Section 3.05. By March 1, 1983, the Borrower shall forward to the Association for its review and comment a detailed proposal on measures to upgrade key positions in the Department of Petro- leum Affairs and to improve the career development prospects for all professional staff of said Department. Section 3.06. By June 30, 1984, the Borrower shall advise the Association on the specific measures taken to establish the energy sector information system under Part B of the Project. Section 3.07. The Borrower shall inform the Association promptly of any condition which interferes or threatens to inter- fere with the progress of the Project, the accomplishment of the purposes of the Project, or the performance by the consultants and experts referred to in Section 3.02 (a) of their obligations with respect to the Project. ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall maintain separate accounts adequate to reflect in accordance with consistently maintained appropriate accounting practices the operations, resources and expenditures of the Borrower in respect of the Project. (b) The Borrower shall: (i) have the accounts referred to in paragraph (a) of this Section for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association, as soon as available, but in any case not later than six months after the end of each such year, a certified copy of the report of such audit by such auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such -7 - other information concerning said accounts, records and expendi- tures and the audit thereof as the Association shall from time to time reasonably request. Section 4.02. The Borrower shall operate and maintain the equipment and other property of the Department of Petroleum Affairs and from time to time, promptly as needed, make all necessary repairs and renewals thereof, all in accordance with sound engineering, financial, and petroleum exploration prac- tices. ARTICLE V Remedies of the Association Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional event is specified pursuant to paragraph (h) thereof, namely, that the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of the Department of Petroleum Affairs or for the suspension of its operations. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional event is specified pursuant to paragraph (d) thereof, namely, that the event speci- fied in Section 5.01 of this Agreement shall occur. ARTICLE VI Termination Section 6.01. The date C?Ti3' /c2 is hereby specified for the purposes of Section 12.04 of the General Condi- tions. Section 6.02. The obligations of the Borrower under Arti- cle IV of this Agreement and the provisions of Section 5.02 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 VII .Representatives of the Borrower; Addresses Section 7.01. The Head of the Department of Petroleum Affairs is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Departamento de Asuntos Petroliferos Presidencia de la Republica Malabo Guinea Ecuatorial Cable address: Departamento de Asumtos Petroliferos Malabo 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 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 EQUATORIAL GUINEA By q-A~GC4 O ~L Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By CVfK~ c A C6 4( Regional Vice President U Western Africa - 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 % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Vehicles, equip- 650,000 100% of foreign ment, supplies expenditures and office units and 90% of local expenditures (2) Consultants' and 1,110,000 100% experts' services; training (3) Travel expenditures 100,000 100% of foreign of professional staff expenditures of the Department of Petroleum Affairs (4) Refunding of Project 140,000 Amount due Preparation Advance (5) Unallocated 300,000 TOTAL 2,300,000 - 11 - 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 or for goods or services supplied from the territory of the Borrower. 3. The disbursement percentages have been calculated in compli- ance 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 res- pect 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 expen- ditures prior to the date of this Agreement. 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, in consultation with 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 expenditures; and (ii) if such reallocation cannot fully meet the estimated short- fall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Cate- gory 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 - 12 - procedures set forth or referred to in this Agreement, no expend- itures 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 Bor- rower, cancel such amount of the Credit as, in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 13 - SCHEDULE 2 Description of the Project The purpose of the Project is to establish the institutional structure and technical capability of the Borrower to monitor hydrocarbon exploration activities by petroleum companies and to improve overall energy sector management by the Borrower. The Project consists of the following: Part A: Preparation, negotiation and administration of hydrocarbon exploration agreements. Part B: Establishment and utilization of an energy sector information system through the establishment of a data base on energy output, imports and demand, and the preparation and execution of an energy consumption survey. Part C: On-the-job training of all professional staff of the Department of Petroleum Affairs and training abroad for selected staff of said Department through internships in petroleum exploration and economics at governmental and private sector institutions, and training of professionals to be employed in the petroleum sector. The Project is expected to be completed by June 30, 1986. - 14 - SCHEDULE 3 Procurement A. Procurement Procedures 1. Vehicles, equipment and supplies shall be procured on the basis of price quotations from at least three qualified suppliers and from at least two different countries. 2. Civil works for offices shall be procured on the basis of price quotations from at least three qualified contractors; pro- vided, however, that if the estimated completion time of such works, as set forth in such quotations, shall not satisfy the requirements of the Project, the Borrower shall procure prefab- ricated office units on the basis of the procurement procedures set forth in paragraph 1 above. B. Review of Procurement Decisions by the Association (a) Prior to the procurement of vehicles, equipment and supplies, the Borrower shall furnish to the Association for its concurrence a list describing such items to be procured and the estimated price thereof as well as the expected delivery dates thereof. Prior to the award of contracts for the construction of offices or the procurement of prefabricated office units, as the case may be, the Borrower shall furnish to the Association for its concurrence a description of the number and size of such offices and other specifications therefor, the expected comple- tion or delivery dates thereof as well as evidence that the necessary sites are available for the purpose. (b) The Borrower shall furnish to the Association, promptly after its execution and prior to the submission to the Associa- tion of the first application for withdrawal of funds from the Credit Account in respect of vehicles, equipment, supplies or offices, two conformed copies of the contracts or purchase orders therefor, together with an analysis of the respective quotations and such other information as the Association shall reasonably request. The Association shall, if it determines that the award of the contract was inconsistent with this Schedule, promptly inform the Borrower and state the reasons for such determination. (c) The terms and conditions of any contract or purchase order shall not, without the Association's concurrence, material- ly differ from those on which quotations were invited. - 15 - SCHEDULE 4 Technical Assistance Consultants and experts employed under Section 3.02 (a) of the Development Credit Agreement 1. Part A of the Project Approximately 46 man-months of services of exploration con- sultants, including, as required, geophysicists and petroleum engineers, to assist the Borrower in: (i) evaluating financial and technical aspects of explora- tion and production contracts; (ii) monitoring companies' exploration programs; (iii) collecting, interpreting and storing exploration- related information submitted by companies under exploration or production agreements; (iv) annual re-evaluation of the country's hydrocarbon potential; and (v) on-the-job training of counterpart staff. 2. Part B of the Project Approximately ten man-months of services of consultants specialized in energy economics and statistics to assist the Borrower with: (i) collection and organization of statistical inform- ation; (ii) methodological and technical aspects of energy data collection; (iii) identification of any needs for further technical assistance in organizing energy-related statis- tical services; and (iv) on-the-job training of counterpart staff. - 16 - 3. General Administration (a) Approximately 36 man-months of services of an administrative specialist to assist the Borrower with day-to-day Project admin- istration, on-the-job training of counterpart staff, and liaison with the non-resident consultants, the Ministries of the Borrower concerned with the Project, and the Association. (b) Services of independent auditors to carry out the audit referred to in Section 4.01 (b) of the Development Credit Agreement. 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 CE. FOR SECRETARY