Upper Volta - Third Telecommunications Project : Credit 1235 - Credit Agreement - Conformed

r"IAL OMENT s CREDIT NUMBER UV Development Credit Agreement (Third Telecomnications Project) between REPUBLIC OF UPPER VOLTA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1982 CREDIT NUMBER UV DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated ( , 1982, between the REPUBLIC OF UPPER VOLTA ereinafter 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 the Office des Postes et T6lecommunications de Haute Volta (hereinafter called the Office) with the Borrower's assistance and, as part of such assistance, the Borrower will make available to such office the proceeds of the Credit as hereinafter provided; (C) the Borrower has received from the French Caisse Cen- trale de Cooperation Economique (hereinafter called CCCE) and from the Kingdom of Netherlands, a loan and a grant in respective amounts of 70,000,000 French francs and 8,650,000 Dutch Florins to assist in financing the Project on the terms and conditions set forth in agreements entered into between the Borrower and the CCCE and the Netherlands, respectively; 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 the Office; 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 Atpit 1bl t Development Credit Agreements of the Association being hereinafter called the General Conditions). -2- 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 moanings therein set forth and the following additional terms have the following meanings: (a) "Project Agreement" means the agreement between the Association and the Office of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement and all agreements supplemental to the Project Agreement; and (b) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and the Office 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 Loan Agreement; and (c) "Project Preparation Advance" means the project pre- paration advance granted by the Association to the Borrower pursuant to an exchange of letters dated February 14, 1979 and March 8, 1979 between the Borrower and the Association. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the te:-ms and conditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equiva- lent to fourteen million nine hundred thousand Special Drawing Rights (SDR 14,900,000). 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 -3- pay to itself the amount required to repay the principal amount of the Project Preparation Advance 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 auto- matically cancelled as of the same date. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods and civil works 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, 1987 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 percent (1/2 of 1%) per annum on the principal amount of the Credit not withdrawn from time to time. The commitment charge shall accrue from a date sixty days after the date of this Agreement to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or shall be cancelled; and (b) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without restric- tions of any kind imposed by, or in the territory of, the Bor- rower; 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 Borrouar 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 2.07. Commitment charges and service charges shall be payable semiannually on June 15 and December 15 in each year. Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each June 15 and December 15 commencing June 15, 1992, and ending December 15, 2031, each installment to and including the installment payable on December 15, 2001, to be one-half of one per cent (1/2 of 1%) -4- of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.09. The currency of the French Republic is hereby specified for the purposes of Section 4.02 of the General Con- ditions. Section 2.10. The Office 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 any of its other obligations under the Development Credit Agreement, the Borrower shall cause the Office to carry out the Project and to perform in accordance with the provisions of the Project Agreement and the Subsidiary Loan Agreement all the other obligations therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, services and ot.ter resources, necessary or appropriate to enable the Office to perform such obligations, ane shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) The Borrower shall relend the equivalent of the proceeds of the Credit to the Office under a subsidiary loan agreement to be entered into between the Borrower and the Office under terms and conditions which shall have been approved by the Association, including a rate of interest of 11.6% per annum and a term of twenty years including five years' grace. (c) The Borrower shall exercise its rights under the Sub- sidiary Loan Agreement in such manner as to protect the interests of the Borrower and of the Association and to accomplish the pur- poses of the Credit, and except as the Association shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. Section 3.02. Any funds made available to the Office by the Borrower pursuant to Section 3.01 shall be accorded on terms and conditions satisfactory to the Association. -5- Section 3.03. By June 30, 1983 the Borrower shall reorganize the Office so as to ensure efficient coordination and opLizum separation of responsibilities between the departments and divi- sions of its general management and of its regional offices. The qualifications and the duties and responsibilities of the man- agers of the principal organizational units shall be satisfactory to the Association. Section 3.04. The Borrowe shall reimburse the Postal Check- ing Account System on behalf of the Office the amount of CFAF 2.189 million, representing the amount utilized by the postal branch for its capital and operating expenditures since 1975, in equal annual installments over a period not exceeding ten years. Section 3.05. The Borrower shall provide to the Office promptly as needed any funds required to cover any deficits of its postal branch. Section 3.06. The Borrower shall pay in full arrears for telecommunications services by December 31, 1982 and shall there- after ensure that all charges incurred by its agencies for tele- communications services be paid to the Office within four months of the billing dates. Section 3.07. The Borrower shall assume the financing of at least two thirds of the ann .1 investment costs of the Liptako- Gourma telecommunications project and shall assume as of the beginn g of 1981 the service of the loans from the African Development Bank and the Nigeria Trust Fund incurred for such proJect. Section 3.08. Before appointing a Director General, Deputy Director General or a head of the telecommunications, postal or financial budget and accounting divisions of the Office, the Bor- rower shall consult with the Association and give due considera- tion to the views expressed by the Association with respect to the qualifications and experience of the person proposed for such appointment. Section 3.09. In order to permit the Office to respect the provisions of Section 4.05 of the Project Agreement, the Borrower shall take such steps as shall be necessary to establish the required tariff levels and adopt the required tariff structure by January 1, 1983, taking into account the results of the tariff study included in Part G of the Project. -6- ARTICLE IV Remedies of the Association Section 4.01. (a) For the purposes of Section 6.02 of the General Conditions the following additional events are specified pursuant to paragraph (h) thereof, namely, that subject to iara- graph (b) of this Section: (i) The right of the Borrower or of the Office to withdraw the proceeds of any grant or loan made to the Borrower or to the Office for the financing of the Project shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement providing therefor, or (ii) any such loan shall have become due and payable prior to the agreed maturity thereof. (b) Paragraph (a) of this Section shall not apply if: (i) such suspension, cancellation, termination or prematuring is not caused by the failure of the Borrower or of the Office to perform any of their obligations under such agreement, and (ii) adequate funds for the Project are available to the Bo,rowsr or the Office from other sources on terms and conditions consistent with the obligations of the Borrower under this Agreement and of the Office under the Project Agreement. Section 4.02. For the purposes of Section 7.01 of the General Corditions, the following additional event is specified pursuant to paragraph (d) thereof namely, that the event specified in paragraph (a) (ii) of Section 4.01 of this Agreement shall occur. ARTICLE V Effective Date; Termination Section 5.01. .he following events are specified aq addi- tional conditions to the effectiveness of the DeveloDnenL Credit Agreement within the meaning of Section 12.01 (b3 of tne General Conditions: (a) the Subsidiary Loan Agreement has been executed on behalf of the Borrower and the Office; and -7- (b) the Association has been notified by the CCCE that all conditions precedent to the initial disbursement to the Borrower or the Office of the proceeds of its financial assistance to the Project have been fulfilled. 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 fur- nished to the Association; (a) that the Project Agreement has been duly authorized or ratified by the Office, and is legally binding upon the Office in accordance with its terms; and (b) that the Subsidiary Loan Agreement has been duly authorized or ratified by the Borrower and the Office and is legally binding upon the Borrower and the Office in accordance with its terms. Section 5.03. The date /%eZ6-4 2-$< //i2- is hereby specified for the purposes of Section 12.04 of the General Condi- tions. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. Ex4icept as provided in Section 2.10 of this Agreement, the Minister of the Borrower responsible for finance 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 Sectin 11.02 of the General Conditions: For the Borrower: Minist&re des Finances Ouagadougou Upper Volta Cable address: Telex: MINIFINANCE MIFICOM Ouagadougou 5256 -8- 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) 64145 (WUI) or 197688 (TRT) 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 UPPER VOLTA By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President Western Africa -9- 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) Civil Works, 1,920,000 60% Part D 1 of the Project (2) Materials, 7,580,000 100% of foreign equipment and expenditures installation, Parts C 2, D 1, E 2 and E 3 of the Project (3) Vehicles and 350,000 100% of foreign tools expenditures and 75% of local ex- penditures (4) Consultants' 1,570,000 100% of foreign and experts' expenditures services, fellowships, Parts F and G of the Project (5) Refunding of 440,000 Amount due Project Prepara- under Section tion 2.02 (b) advance (6) Unallocated 3,040,000 TOTAL 14,900,000 - 10 - 2. To the extent that the amount allocated to Category 5 is insufficient or in excess of the amount required, adjustment will be made by an allocation from or to Category 6. 3. For the purposes of this Schedule: (a) "foreign expenditures" means expenditures in the cur- rency of any country other than the Borrower and for goods or services supplied from the territory of any country other than the Borrower; provided, however, that if the currency of the Bor- rower 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 expendi- tures"; and (b) "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplied from the terri- tory of the Borrower. 4. 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 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 ex- penditures prior to the date of this Agreement. 6. 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 will be in- sufficient 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 expenditures, and (ii) - 11 - if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such ex- penditures 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 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. - 12 - SCHEDULE 2 Description of the Project The Project is a part of the investment program of the Office for the period 1982-1986, which is designed to meet about 75% of the demand for telecommunications services in the main cities and to extend reliable services into the Western, Southwestern and Eastern provinces. The Project specifically includes the following: Part A: Installation of about 3,600 lines of local automatic tele- phone exchange equipment in Ouagadougou and about 4,000 lines in Bobo Dioulasso; Part B: Installation of containerized telephone exchanges of about 200 lines each in the towns of Dedougou, Diebougou, Gaoua, Koupela, Tenkodogo and Tougan; Part C: (1) Extension of the national automatic transit exchange in Ouagadougou and (2) installation of central automatic message accounting equipment for both long distance and international traffic; Part D: Construction of ducts and installation of subscriber cables and distribution cabinets (1) in the urban local networks of Ouagadougou and Bobo Dioulasso and (2) in the provincial towns named in Part B above; Part E: Construction of the following transmission routes: (1) Ouagadougou-Dedougou; (2) D&dougou-Bobo Dioulasso; and -13- (3) Bobo Dioulasso-Di6bougou-Gaoua; Part F: On-the-job training of technical staff of the Office and improving the organization and procedures applicable to its maintenance and repair services; and Part G: Carrying out by the Office of a Management Improvement Program, including training of accounting and of data-processing staff, and reviews of its staffing needs and of its tariff structure. The Project is expected to be completed by September 30, 1986. 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 nda 198 FOR SECRETARY