India - Maharashtra Water Utilization Project : Credit 1383 - Credit Agreement - Conformed

T' ~IAL CREDIT NUMBER 1383 IN DOCUMENTS LOAN NUMBER 2308 IN Development Credit Agreement (Maharashtra Water Utilization Project) between INDIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1983 CREDIT NUMBER 1383 IN LOAN NUMBER 2308 IN DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated JOL<& , 1983, between INDIA, acting by its P esl ent (hereinafter called the Borrower) and INTERNATIONAL DEVELt ENT 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 Borrower has also requested the International Bank for Reconstruction and Development (the Bank) to provide addi- tional assistance towards the financing of the Project and by an agreement of even date herewith between the Borrower and the Bank (hereinafter called the Loan Agreement) the Bank is agreeing to provide such assistance in an aggregate principal amount equivalent to twenty-two million seven hundred thousand dollars ($22,700,000) (hereinafter called the Loan); (C) the Borrower and the Association intend, to the extent practicable, that the proceeds of the Credit provided for in this Agreement be disbursed on account of expenditures on the Project before disbursements of the proceeds of the Loan provided for in the Loan Agreement are made; (D) the Project will be carried out by the State of Maharashtra, with the Borrower's assistance and, as part 'of such assistance, the Borrower will make available to the State of Maharashtra the proceeds of the Credit as hereinafter provided; (E) by an agreement of even date herewith between the Association and the State of Maharashtra, the State of Maharashtra has agreed to undertake certain obligations in respect of the carrying out of the Project; 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 State of Maharashtra; NOW THEREFORE the parties hereto hereby agree as follows: -2- ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the pOKovisions 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 modification thereof (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, being hereinafter called the General Conditions), namely, that paragraph 9 of Section 2.01 is deleted and the following substituted therefor: "9. The term Project means the project for which the Credit is granted, as described in the Development Credit Agreement and as the description thereof may be amended from time to time by agreement between the Borrower, the Association and the Bank." Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the Loan Agreement, 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 meanings: (a) "Maharashtra" means the State of Maharashtra, a State of India, acting by its Governor; (b) "Project Agreement" means the agreement between the Association, the Bank and Maharashtra of even date herewith, as the same may be amended from time to time, and such term includes the schedule to the Project Agreement and all agreements supplemental to the Project Agreement; (c) "Project Area" means the area of about 95,000 ha within the Irrigation Schemes, as so defined, of Jayakwadi, Purna, Mula, Girna and Khadakwasla located in Maharashtra; (d) "CAD" means the Command Area Development Wing of Maharashtra's Department of Irrigation; (e) "CADA" means a Command Area Development Authority established under the jurisdiction of CAD; -3 - (f) "Project Agreement, Second Maharashtra Irrigation Project" means the agreement, dated April 14, 1980, entered into between the Association and the State of Maharashtra for the purposes of the Second Maharashtra Irrigation Project; and "Second Maharashtra Irrigation Project" means the Project described in Schedule 2 to the Development Credit Agreement, dated April 14, 1980, entered into by the Borrower and the Association for purposes of Credit No. 954-IN; (g) "Chak" means the cultivable command area of maximum 25 ha served by an irrigation outlet; (h) "WALMI" means Water and Land Management Institute, an autonomous entity of Maharashtra; (i) "Irrigation Scheme" means each of the command areas of Jayakwadi, Purna, Mula, Girna and Khadakwasla located in Maharashtra and served by their respective irrigation distri- bution network; (j) "Rs" or "Rupees" means the currency of the Borrower; (k) "Loan Agreement" means the agreement of even date herewith between the Borrower and the Bank for the purpose of the Project, as such agreement may be amended from time to time, and such term includes the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated October 27, 1980, as made applicable to such agreement, all agreements supplemental to the Loan Agreement and all schedules to the Loan Agreement; and (1) "Loan" means the loan provided for in the Loan Agreement. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions set forth or referred to in this Agreement, an amount in various currencies equivalent to twenty-nine million six hundred thousand Special Drawing Rights (SDR 29,600,000). Section 2.02. 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 -4- 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. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods and civil works required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of the Procurement Schedule to the Project Agreement. Section 2.04. The Closing Date shall be August 31, 1989, or such later date as the Association shall establish. The Association 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 restrictions 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 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 January 15 and July 15 in each year. Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each January 15 and July 15 commencing July 15, 1993, and ending January 15, 2033, each installment to and including the installment payable -5- on January 15, 2003, 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 2.09. 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. (a) Without any limitation or restriction upon any of its other obligations under the Development Credit Agree- ment, the Borrower shall cause Maharashtra to perform in accordance 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 Maharashtra 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 Maharashtra in accordance with the Borrower's standard arrangements for development assistance to the States of India. 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) Maharashtra shall have failed to perform any of its obligations under the Project Agreement; and (b) As a result of events which have occurred after the date of the Development Credit Agreement, an extraordinary situation shall have arisen which shall make it improbable that Maharashtra will be able to perform its obligations under the Project Agreement. -6- Section 4.02. 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 specified in paragraph (a) of Section 4.01 of the Agreement shall occur and shall continue to occur for a period of 60 days after notice thereof shall have been given by the Association to the Borrower and Maharashtra. ARTICLE V Effective Date; Termination Section 5.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the execution of the Project Agreement on behalf of Maharashtra has been duly authorized or ratified by all necessary governmental action; and (b) all conditions precedent to the effectiveness of the Loan Agreement have been fulfilled, except for the effectiveness of this 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 Maharashtra, and is legally binding upon Maharashtra in accordance with its terms; Section 5.03. The date a 1983, is hereby specified for the purposes ot Section 12.04 of the General Conditions. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. Any Secretary, Additional Secretary, Joint Secretary, Director, Deputy Secretary and Under Secretary of the -7- Department of Economic Affairs in the Ministry of Finance 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 purpose of Section 11.01 of the General Conditions: For the Borrower: The Secretary to the Government of India Ministry of Finance Department of Economic Affairs New Delhi, India Cable address: Telex: ECOFAIRS 953-313546 New Delhi, India 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) 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 -8- of Columbia, United States of America, as of the day and year first above written. INDIA By Aut orized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By 0 Regional Vice President South Asia -9- SCHEDULE 1 Withdrawal of the Proceeds of the Credit and of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit and of the Loan, the allocation of the amounts of such proceeds to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of Amount of Credit Loan Allocated Allocated (Expressed (Expressed % of in SDR in Dollar Expenditures Category Equivalent) Equivalent) to be Financed (1) Civil works: (a) for com- 10,200,000 6,900,000 85% pleted works under Part A (iii) of the Project (b) for other 14,600,000 10,000,000 85% Parts of the Proj- ect (2) Equipment, 3,700,000 2,500,000 100% of foreign vehicles expenditures, and materials 100% of local expenditures (ex-factory cost) and 70% of local expenditures for other items pro- cured locally -10 - Amount of Amount of Credit Loan Allocated Allocated (Expressed (Expressed % of in SDR in Dollar Expenditures Category Equivalent) Equivalent) to be Financed (3) Salaries 1,000,000 600,000 70% and allow- ances for incremental staff for Parts E, F and G of the Project (4) Overseas 100,000 100,000 100% study tours under Part E (ii) of the Project (5) Fee 56,608 Amount due (6) Unallocated 2,543,392 TOTAL 29,600,000 22,700,000 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Borrower for goods or services supplied from the territory of any country other than that of the Borrower; (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; (c) the term "completed works" means that the irrigation distribution system under Part A (iii) of the Project, within any Chak, is certified to have been carried out and completed in accordance with the planning and design criteria provided for in Section 2.03 of the Project Agreement; and - 11 - (d) the term "incremental staff" means the Borrower's addi- tional staff employed after the date of this Agreement for pur- poses of carrying out Parts E, F and G of the Project. 3. The disbursement percentages have been calculated in com- pliance with the policy of the Association and the Bank that the proceeds of the Credit or of the Loan shall not 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, manu- facture, procurement or supply thereof; on this basis, if the amount of any such taxes levied on or in respect of items in any Category decreases or increases, the Association or the Bank may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such Category as required to be consistent with the aforementioned policy of the Association and the Bank. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of expenditures made prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of SDR 1,000,000, may be made in respect of Categories 1 (b), 2 and 3 on account of expenditures made before that date but after January 1, 1983. In addition, except as the Borrower, the Association and the Bank shall otherwise agree, and until all amounts of the Credit allo- cated to any Category shall have been withdrawn or committed, no withdrawals shall be made from the Loan Account under such Cate- gory except under commitments entered into by the Bank pursuant to Section 5.02 of the General Conditions referred to in Section 1.01 of the Loan Agreement. 5. Notwithstanding the allocation of an amount of the Credit and of the Loan or the disbursement percentages set forth in the table in paragraph 1 above, if the Association and the Bank has reasonably estimated that the amount of the Credit and of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Cate- gory, the Association or the Bank may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit or of the Loan, as the case may be, which are then allocated to another Category and which in the opinion of the Association and the Bank are not needed to meet other expenditures; and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disburse- menc percentage then applicable to such expenditures in order - 12 - that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Association or the Bank shall have reasonably deter- mined that the procurement of any item in any Category is incon- sistent with the procedures set forth or referred to in this Agreement, no expenditure for such item shall be financed out of the proceeds of the Credit or of the Loan, and the Association or the Bank may, without in any way restricting or limiting any other right, power or remedy of the Association under the Devel- opment Credit Agreement or the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Credit or of the Loan as, in the Association's or the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit or of the Loan. - 13 - SCHEDULE 2 Description of the Project The purpose of the Project is to improve the effective util- ization of available irrigation water supply in the Project Area so as to increase agricultural production and thereby promote rural development in Maharashtra. Part A: 7pgrading of the Existing Irrigation System (i) Upgrading of the existing distributaries in the Project Area, except for distributaries Nos. 1 and 2 in Mula Irrigation Scheme and for distributaries in Girna Irrigation Scheme. (ii) Upgrading of the existing, and extension and construc- tion, as necessary, of minor canals in the Project Area, except for minor canals under distributaries Nos. 1 and 2 in Mula Irri- gation Scheme and for minor canals under distributaries in Girna Irrigation Scheme. (iii) Upgrading of the existing, and extension and construc- tion, as necessary, of field irrigation and drainage channels in the Project Area. (iv) Upgrading of the existing, and extension and construc- tion, as necessary, of link drains and major drainage channels in the Project Area. (v) Upgrading and construction of required canal service roads in the Project Area. Part B: Improvement in Irrigation System's Operation Improvement in the operation of the irrigation syszems in the Project Area through adoption of improved methods and proce- dures for water allocation and distribution. Part C: Buildings Construction, utilization and maintenance of about six training centers, and of necessary office buildings and staff quarters for the Project. - 14 - Part D: Equipment Acquisition, utilization and maintenance of equipment for construction, operation, maintenance, training and research, survey, and land development. Part E: Training (i) Training of farmers, including farmers' leaders, in the Project Area, and of CADAs staff, including Junior Engineers, Land Development Assistants, and Canal Inspectors. (ii) Overseas tours for selected CADAs staff to study prac- tices and techniques developed abroad for soils similar to those in the Project Area. Part F: Monitoring and evaluation of the activities under the Project, including farmers' attitude surveys to determine their response to irrigation. Part G: Adaptive Agricultural Research Establishment and implementation of a program of adaptive agricultural research in the Project Area to develop and demon- strate suitable irrigation practices, cropping sequences and farm input levels. The Project is expected to be completed by November 30, 1988. 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 3O day of , 198 3. FOR SECRETARY