Togo - Structural Adjustment Project : Credit 1365 - Credit Agreement - 2 - Conformed

CUMENTS SPECIAL FUND CREDIT NUMBER$ TO Special Fund Credit Agreement (Structural Adjustment Project) between REPUBLIC OF TOGO and INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINISTRATOR of the SPECIAL FUND established with funds contributed by certain members of the International Development Association Dated e I7 , 1983 SPECIAL FUND CREDIT NUMBER. 3 TO SPECIAL FUND CREDIT AGREEMENT AGREEMENT, dated 3hL I 7 , 1983, between REPUBLIC OF TOGO (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINISTRATOR of the Special Fund established with funds contributed by certain members of the Intertational Development Association. WHEREAS (A) by Resolution No. IDA 82-6, adopted on Octo- ber 26, 1982, of the Executive Directors of the International Development Association (hereinafter called IDA) there has been established by IDA a Special Fund constituted by the funds which shall be contributed by certain members of IDA and administered by IDA, acting as Administrator of such Special Fund, for .the purpose of, and in accordance with, the provisions of, said Resolution; (B) IDA has received from the 'Borrower a letter dated February 16, 1983, with a memorandum on economic development policy in annex thereto, describing a program of actions, objec- tives and policies designed-to achieve a structural adjustment of the Borrower's economy, declaring the Borrower's commitment to the execution of that program, and requesting Assistance from IDA in the financing of urgent imports to be made during the execu- tion of such program; (C) the Borrower has also requested IDA ,tp provide addi- tional assistance towards the 'financing of said., imports ,and by an agreement of even date herewith between the -Borrower and, IDA (hereinafter called the Development Credit Agreement) IDA is agreeing to provide such assistance in an aggregate principal amount equivalent to eighteen million four hundred and fifty thousand Special Drawing Rights (SDR 18,450,000) (hereinafter called the IDA Credit); and WHEREAS on the basis of, inter alia, the for6going, the Administrator has decided in support of such program to provide assistance to the Borrower by making the Special Fund Credit in two tranches as hereinafter provided; 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 provisions of the General Conditions Applicable to Development Credit Agreements of the International Development 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 of the International Development Association, as so modified, being hereinafter called the General Conditions): (a) the term "Association", wherever used in the General Conditions, means the International Development Association acting es the Administrator of the Special Fund referred to in the Preamble to this Special Fund Credit Agreement; (b) the terms "Development Credit Agreement", "Credit" and "Credit Account", wherever used in the General Conditions, are amended to read "Special Fund Credit ,Agreement", "Special Fund Credit" and "Special Fund Credit Account",.respectively; (c) the second sentence of Section 5.01 is deleted; (d) in Sections 6.02 and 7.01, the term "Association" shall also include the International Development Association acting in its own capacity, the term "Development Credit Agreement" shall mean both Development Credit Agreements and Special Fund Credit Agreement and the term "Credit" shall mean both Credit and Special Fund Credit. (e) paragraph 9 of Section 2.01 shall be modified to read: "The term 'Project' means the imports that may be financed out of the proceeds of the Special Fund Credit ,pursuant to the provisions of Schedule 1 to the Special Fund Credit Agreement." 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 addi- tional terms have the following meanings: -3- (a) "Special Fund Resolution" means Resolution No.- IDA 82-6 of the Executive Directors of IDA which, inter alia, establitshe s the Special Fund; (b) "Administrator" means the International -Development Association acting as Administrator of the Special Fund-referred to in the Preamble to this Special Fund Credit Agreement; ± (c) "Part I member of IDA" means a member -of- IDA' with respect to which the terms and conditions of membership are-'those prescribed in the Articles of Agreement of IDA for couitries whose names are listed in Part I of Schedule A to those Articles; (d) "Part II member of IDA" means a member of IDA -which is not a Part I member of IDA; (e) "Development Credit Agreement" means the agre'ement 'of even date herewith between the Borrower and IDA for the purpdse of the Project, as such agreement may be amended from time to time; and such term includes the General Conditions Applicable to Development Credit Agreements of IDA, dated June 30, 1900' as made applicable to such agreement, all agreements supplemental. to the Development Credit Agreement and all schedules td the Development Credit Agreement; (f) "SITC" means the United Nations Standard International Trade Classification, 1974 Revision (SITC,. Revi 2), published in Commodity Indexes for the Standard International Trade Classifi- cation, Revised, Statistical Papers, Series M, No. 34/Rev. 2 (1975); (g) "CFA Franc" and "CFAF" mean the currency, of the Bor- rower; (h) "BCEAO" means Banque Centrale des Etats de-l'Afrique de l'Ouest; and (i) "STH" means Soci6t6 Togolaise des Hydrocarbures. 'ARTICLE II The Special Fund Credit Section 2.01. The Administrator agrees to lend to the Bor- rower on the terms and conditions in the Special Fund-Credit Agreement set forth or referred to, an amount in various cur- rencies equivalent to eighteen million four hundred fifty thousand Special Drawing Rights (SDR 18,450,000). Section 2.02.- (a) The amount of. the Special Fund Credit may be withdrawn from the Special Fund Credit Account in accordance 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 Administrator, for expenditures made (or, if the Administrator shall so agree, to be made) in respect of the reasonable cost of imported goods. (b) Withdrawals shall be made only on account of expendi- tures for goods produced in4 or services supplied from, the territories of (A) any Part II mz;7ber of IDA; (B) any Part I member of IDA which fulfills the conditions set forth in paragraph 13 (d) (ii) of the Special Fund Resolution on the date of this Agreement, as determined by the Administrator.* Section 2.03. Except as the Administrator shall otherwise agree', procurement of the goods to be financed out of the proceeds of the. Special Fund Credit shall be governed by the provisions of Schedule 2 to this Agreement. Section 2.04. The Closing Date shall be December 31, 1985, or such later date as the Administrator. shall establish. The Administrator shall promptly notify the Borrower of such later date. Section 2.05. (a) The Borrower shall pay to IDA 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 Special Fund Credit not withdrawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the Special Fund Credit Agreement to the respective dates -on which amounts shall be withdrawn by the Borrower from the Special Fund Credit Account or shall be cancelled. (b) The commitment charge shall be paid: (i) at such places as IDA 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 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. * DRAFTING NOTE: A list of all eligible members will be given by the Administrator to the Borrower at the time of the signing of the Special Fund Credit Agreement in a supplemental letter. - 5 - Section 2.06. The Borrower shall pay to IDA a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the amount withdrawn from the Special Fund Credit Account and outstanding from time to time. Section 2.07. Commitment charges and service charges shall be payable semiannually on April 1 and October 1 in each year. Section 2.08. The Borrower shall repay to IDA the principal amount of the Special Fund Credit in semiannual installments payable on each April 1 and October 1 commencing October 1, 1993 and ending April 1, 2033, each installment to and including the installment payable on April 1, 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 Republic of France is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.10. (a) BCEAO 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. (b) Without limitation or restriction to the foregoing, the Borrower shall entrust BCEAO with responsibility for the preparation of withdrawal applications under the Special Fund Credit and for the collection of the documents and other evidence to be furnished to IDA in support of such applications; such withdrawal applications shall to the extent practicable be consolidated so as to apply for withdrawal of aggregate amounts of not less than $1,000,000 equivalent. ARTICLE III Particular Covenants Section 3.01. (a) The Borrower shall open and thereafter maintain an account (hereinafter called the Project Account) at BCEAO and shall, upon each withdrawal from the Special Fund Credit Account, deposit in the Project Account the equivalent in CFA Francs of the currency or currencies withdrawn from the Special Fund Credit Account (such equivalent to be determined as - 6 - of the respective dates of such withdrawals). The amounts so deposited in the Project Account shall be used exclusively to finance the Borrower's development-related expenditures and to reduce the Borrower's payment arrears. (b) The Borrower shall furnish to the Administrator all such information as the Administrator shall reasonably request concerning the utilization of the amounts deposited in the Project Account pursuant to paragraph (a) of this Section. Section 3.02. 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 Special Fund Credit against hazards incident 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. Section 3.03. Upon the a--ard of any contract for goods costing the equivalent of $100,000 or more and to be financed out of the proceeds of the Special Fund Credit, the Administrator may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. Section 3.04. (a) The Borrower and the Administrator shall from time to time, at the request of either party, exchange views on the progress achieved in carrying out, the program for struc- tural adjustment referred to in the Preamble to this Agreement and the measures specified in Schedule 3 to this Agreement. (b) Prior to each such exchange of views, the Borrower shall furnish to the Administrator for its review and comment a report on the progress achieved in carrying out said program, in such detail as the Administrator shall reasonably request. Section 3.05. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consis- tently maintained appropriate accounting practices the expendi- tures financed out of the proceeds of the Special Fund Credit. ARTICLE IV Additional Event of Suspension Section 4.01. For the purposes of Section 6.02 of the General Conditions, the following additional event is specified -7- pursuant to paragraph (h) thereof, namely, that an event has occurred which shall make it improbable that the program for structural adjustment or a significant part of the program for structural adjustment referred to in the Preamble to this Agree- ment will be carried out. ARTICLE V Effective Date; Termination; Designation of Administrator Section 5.01. The following events are specified as additional conditions to the effectiveness of the Special Fund Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) all conditions precedent to the effectiveness of the Development Credit Agreement, except for the effectiveness of this Agreement, have been fulfilled; and (b) the rescheduling of the Borrower's medium and long-term debt has been agreed upon with its lenders. Section 5.02. The date 14-1 t T3 , is hereby specified for the purposes of Section 12.04 of the General Condi- tions. Section 5.03. In the event that the Executive Directors of IDA decide to terminate the functions of IDA as.administrator of the Special Fund pursuant to paragraph 17 of the Special Fund Resolution, the Administrator may, by notice to the Borrower, designate another party which, on the date specified in such notice, shall assume part or all of the rights and obligations of the Administrator under this Agreement in accordance with the Special Fund Resolution and such decision of the Executive Directors, as specified in such notice. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. Subject to the provisions of Section 2.10 of this Agreement, the Ministre de l'Economie et des Finances of the - 8 - 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: Ministare de l'Economie et des Finances B.P. 387 Lome Republic of Togo Cable address: Telex: MINFIE 5286 Lome, Togo For the Administrazor: Administrator of the Special Fund (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 J.n the District - 9 - of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF TOGO Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINISTRATOR of the SPECIAL FUND established with funds contributed by certain members of the International Development Association Regional Vice President Western Africa - 10 - SCHEDULE 1 Withdrawal of the Proceeds of the Special Fund Credit 1. The reasonable cost of importation of any goods into the territory of the Borrower may be financed out of the proceeds of the Special Fund Credit, except that no withdrawals shall be made in respect of: (a) goods included in the following SITC groups or sub- groups: Group Sub-group Description of Items 112 - Alcoholic beverages 121 - Tobacco, unmanufactured, tobacco refuse 122 - Tobacco, manufactured 667 - Pearls, precious and semi- precious stones, unworked or worked 688 - Uranium depleted in U235 and thorium, and their alloys, unwrought or wrought, and articles therefor, n.e.s.; waste and scrap of uranium depleted in U235 and of thorium 718 718.7 Nuclear reactors, and parts thereof, n.e.s. 897 897.3 Jewelry of gold, silver or platinum group metals (except watches and watch cases) and goldsmiths' or silversmiths' wares (including set gems) - 971.0 Gold, non-monetary (excluding gold ores and concentrates) - 11 - (b) expenditures in the currency of the Borrower or for goods supplied from the territory of the Borrower; provided, however, that if the currency of the Borrower is also that of another country from the territory of which goods are supplied, expenditures in such currency for such goods shall not be deemed to be expenditures in the currency of the Borrower for purposes of.this Section; (c) payments made for expenditures prior to May 17, 1983; (d) payments for taxes levied by, or in the territory of, the Borrower on goods, or on the importation, manufacture, procurement or supply thereof; (e) expenditures for goods procured under contracts costing less than $10,000 equivalent; (f) expenditures for goods supplied under a contract which any national or international financing institution or agency other than IDA shall have financed or agreed to finance; (g) expenditures for goods intended for a military or para-military purpose or for luxury consumption; and (h) expenditures in excess of an aggregate amount equiva- lent to $10,000,000 for petroleum products and $10,000,000 for foodstuffs. 2. No withdrawal shall be made and no commitment shall be entered into to pay amounts to the Borrower or others in respect of expenditures to be financed out of the proceeds of the Special Fund Credit after the aggregate of the proceeds of the Special Fund Credit withdrawn from the Special Fund Credit Account and the total amount of such commitments shall have reached the equivalent of SDR 8,100,000, unless IDA shall be satisfied, after an exchange of views as described in Section 3.04 of this Agree- ment, with the progress achieved by the Borrower in the carrying out of the program for structural adjustment referred to in the Preamble to this Agreement and in particular that the measures described in Schedule 3 to this Agreement have been taken. 3. If the Administrator 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 expenditure for such item shall be financed out of the proceeds - 12 - of the Special Fund Credit, and the Administrator may, without in any way restricting or limiting any other right, power or remedy of the Administrator under the Special Fund Credit Agreement, by notice to the Borrower, cancel such amount of the Special Fund Credit as, in the Administrator's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Special Fund Credit. - 13 - SCHEDULE 2 Procurement 1. Subject to the eligibility restrictions set forth in Section 2.02 (b) of the Special Fund Credit Agreement, contracts for the procurement of goods estimated to cost the equivalent of $100,000 or more each, shall be awarded through international competitive bidding in accordance with procedures consistent with those set forth in Part A of the current edition of the "Guidelines for Procurement under World Bank Loans and IDA Credits" dated March 1977 (hereinafter called the Guidelines), subject to the follow- ing modifications: (a) By the deletion of paragraph 1.2 of the Guidelines and the substitution therefor of the following: "1.2 Notification and Advertising The international community should be notified in a timely manner (see also para. 3.1) of the opportunity to bid. This will be done by advertising invitations to apply for inclusion in a bidder's invitation list, to apply for prequalification or to bid; such advertisements should be placed in at least one newspaper of general circulation in the Borrower's territory and, in addition, in at least one of the following forms: (i) a notice in the United Nations publication, Devel- opment Forum, Business Edition; or (ii) an advertisement in a newspaper, periodical or technical journal of wide international circula- tion; or (iii) a notice to local representatives of countries and territories referred to in these Guidelines, that are potential suppliers of the goods required." (b) By the addition at the end of paragraph 2.9 of the Guidelines of the following: "As an alternative, bidding documents may require the bidder to state the bid price in a single currency widely used in international trade and specified in the bidding documents." - 14 - (c) By the deletion of sub-paragraphs (a) and (d) of paragraph 2.10 of the Guidelines and the substitution for sub- paragraph (a) of the following: "(a) Payments under the contract will be made in the currency in which the price has been stated in the success- ful bid." (d) By the deletion of the third sub-paragraph of paragraph 3.8 of the Guidelines and the substitution therefor of the fol- lowing: "Customs duties and import taxes should be excluded for the purpose of comparison among bids for the supply of goods." (e) By the deletion of paragraph 3.9 of the Guidelines. 2. Contracts and purchase orders for goods estimated to cost the equivalent of less than $100,000 each shall be awarded on the basis of the normal procurement procedures of the purchaser of such goods. 3. The eligibility restrictions set forth in Section 2.02 (b) of the Special Fund Credit Agreement shall be stated in the tender or prequalification documents. 4. With respect to each contract referred to in paragraph 1 of this Schedule, the Borrower shall furnish to the Administrator, prior to the submission to the Administrator of the first appli- cation for withdrawal of funds from the Special Fund Credit Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids and recommendations for award, a description of the advertising and tendering procedures followed and such other information as the Administrator shall reasonably request. 5. With respect to each contract or purchase order referred to in paragraph 2 of this Schedule, the Borrower shall furnish to the Administrator, prior to the submission to the Administrator of the first appplication for withdrawal of funds from the Special Fund Credit Account in respect thereof, such documenta- tion and information as the Administrator may reasonably request to support withdrawal applications in respect of such contract or purchase order. - 15 - 6. The Administrator shall, if it determines that the award of a contract or the documentation received, as the case may be, was not consistent with the provisions of this Schedule, promptly inform the Borrower and state the reasons for such determination. - 16 - SCHEDULE 3 Tranche Release (Schedule 1, paragraph 2) 1. The Borrower has started to implement the decisions taken with respect to STH in accordance with the provisions of para- graph 9 (a) of the memorandum on economic policy referred to in the Preamble to the Special Fund Credit Agreement. 2. An appropriate medium-term price policy and specific prices for the 1983-1984 crop year for cocoa, coffee, cotton and palm kernels have been adopted. 3. An appropriate marketing policy for food crops has been adopted. 4. The Borrower has adopted an appropriate public investment program for 1984 and 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 1983 FOR SECRETARY