Conformed Copy - C2449 - Renewable Resources Development Project - Netherlands Grant Agreement

Page 1 CONFORMED COPY CREDIT NO. 2449 IN TRUST FUND NO. 020339 NETHERLANDS NO. IN 920331 Netherlands Grant Agreement (Renewable Resources Development Project) between INDIA and INTERNATIONAL DEVELOPMENT ASSOCIATION as Administrator of Netherlands Funds provided by the MINISTER FOR DEVELOPMENT COOPERATION OF THE NETHERLANDS Dated May 14, 1996 CREDIT NO. 2449 IN TRUST FUND NO. 020339 NETHERLANDS NO. IN 920331 NETHERLANDS GRANT AGREEMENT AGREEMENT, dated May 14, 1996 between INDIA, acting by its President (the "Grantee") and INTERNATIONAL DEVELOPMENT ASSOCIATION acting as Administrator (the "Administrator") of the Netherlands Grant (as hereinafter defined) provided by the Minister for Development Cooperation of the Netherlands (the "Minister"). WHEREAS the Grantee has requested the assistance of the technical assistance component of the Renewable Resources Development Project (the Project) to be carried out by the Indian Renewable Energy Development Agency Limited (IREDA); WHEREAS the Association has granted a Credit for this purpose on the terms and conditions set forth in the Development Credit Agreement, dated March 5, 1993, between the Grantee and the Association (the "Development Credit Agreement"); WHEREAS the Minister wishes to make available to the Grantee a grant to assist IREDA in carrying out the Project described in Schedule 2 to the Development Credit Agreement on the terms and conditions hereinafter set forth ("Netherlands Grant"); Page 2 WHEREAS by arrangements dated December 11, 1986 between the Minister, the International Bank for Reconstruction and Development and the Association (the "Arrangements"), the Minister has requested the Association, and the Association has accepted, to administer, inter alia, the Netherlands Grant in accordance with the provisions of the Arrangements; and WHEREAS the Grantee acknowledges that the financial assistance extended to the Grantee under this Netherlands Grant Agreement shall be considered as part of the bilateral development aid extended by the Government of the Netherlands to the Grantee; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The General Conditions Applicable to Development Credit Agreements of the Association, dated January 1, 1985 (the "General Conditions") constitute an integral part of this Agreement subject, however, to the following modifications thereof: (a) the term "Association", wherever used in the General Conditions, means the International Development Association acting as Administrator of the Netherlands Grant pursuant to the Arrangements, except in the phrase "member of the Association" in Sections 2.01 (5), 4.02 (b) and 6.02 (e); (b) the term "Development Credit Agreement", whenever used in the General Conditions, means this Agreement; (c) the term "Credit", whenever used in the General Conditions, means the Netherlands Grant extended to the Grantee under this Agreement; (d) the term "Credit Account", whenever used in the General Conditions, means the Netherlands Grant Account, the account opened by the Administrator in its books in the name of the Grantee to which the amount of the Netherlands Grant is credited; (e) in Section 6.02 the term "Association" shall also include the International Development Association acting in its own capacity; (f) Section 9.06 (c) shall be modified to read: "(c) Not later than six months after the Closing Date or such later date as may be agreed for this purpose between the Grantee and the Administrator, the Grantee shall prepare and furnish to the Administrator a report, of such scope and in such detail as the Administrator shall reasonably request, on the execution of the Project referred to in the Preamble to the Netherlands Grant Agreement, the performance by the Grantee and the Administrator of their respective obligations under the Netherlands Grant Agreement and the accomplishment of the purposes of the Netherlands Grant"; and (g) Sections 3.02, 3.03, 3.04, 3.05, 4.02, 4.03, 4.04, 4.06, 6.05, 7.01, 8.01 (a), and Article XII are deleted. 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 and in the Development Credit Agreement have the respective meanings therein set forth and the terms Dutch Guilders and "f." mean the currency of the Netherlands. ARTICLE II The Grant Section 2.01. The Administrator agrees to extend to the Grantee, on the terms and conditions herein set forth or referred to, a grant in Page 3 an amount of eight hundred thousand Dutch Guilders (f.800,000). Section 2.02. (a) Subject to Section 2.02 (b) below, the proceeds of the Netherlands Grant may be withdrawn from the Netherlands Grant Account in accordance with the provisions of the Schedule to this Agreement, as such Schedule may be amended from time to time by agreement between the Grantee and the Administrator. (b) The Administrator shall not be obligated to make any payment under this Agreement except to the extent it shall first have received funds for the purpose from the Minister. Section 2.03. (a) Except as the Administrator shall otherwise agree, contracts for goods and services to be financed out of the proceeds of the Netherlands Grant shall be procured in accordance with the provisions of Schedule 1 to the Project Agreement (Renewable Resources Development Project) between the Association and IREDA dated March 5, 1993 which is hereby incorporated into this Agreement with the same force and effect as if it were fully set forth herein, it being understood that the references in said Schedule to the "Association" and the "Credit Account" shall be deemed to be references to the Association acting as Administrator of the Netherlands Grant and the Netherlands Grant Account, respectively. (b) If the Administrator shall have reasonably determined that the procurement of any item is inconsistent with the procedures set forth or referred to in paragraph (a) above, no expenditures for such item shall be financed out of the proceeds of the Netherlands Grant, and the Administrator may, without in any way restricting or limiting any other right, power or remedy of the Administrator under this Agreement, by notice to the Grantee, cancel such amount of the Netherlands Grant 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 Netherlands Grant. Section 2.04. The Closing Date shall be December 31, 1999 or such later date as the Administrator shall establish. The Administrator shall promptly notify the Grantee of such later date. ARTICLE III Execution of the Project Section 3.01. Except as otherwise expressly provided herein, Articles III and IV of the Development Credit Agreement are hereby incorporated into this Agreement with the same force and effect as if they were fully set forth herein, it being understood that all references in said Articles III and IV to the "Association" shall be deemed to be references to the Administrator of the Netherlands Grant under this Agreement and all references to the "Credit" and the "Credit Account" shall be deemed to be references to the Netherlands Grant and the Netherlands Grant Account, respectively. ARTICLE IV Remedies of the Administrator Section 4.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional events are specified, namely, that the right of the Grantee to withdraw the proceeds of the Credit shall have been suspended, canceled or terminated in whole or in part, pursuant to the Development Credit Agreement. ARTICLE V Effectiveness Section 5.01. (a) This Agreement shall become effective upon its execution by the parties. (b) This Agreement shall continue in effect until the Netherlands Grant has been fully disbursed and the parties to this Agreement have fulfilled their obligations under this Agreement. Page 4 ARTICLE VI Representation; Transfer of Rights and Obligations Section 6.01. The Secretary, any Additional Secretary, Joint Secretary, Director, Deputy Secretary, Under Secretary of the Department of Economic Affairs in the Ministry of Finance of the Grantee is designated as the representative of the Grantee 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 Grantee: The Secretary to the Government of India Department of Economic Affairs Ministry of Finance New Delhi, India Cable address: Telex: ECOFAIRS 953-3166175 FINE IN New Delhi For the Administrator: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 197688 (TRT) Washington, D.C. 248423 (RCA) 64145 (WUI) or 82987 (FTCC) Section 6.03. In accordance with the Arrangements, the rights and obligations of the Administrator under this Agreement may be transferred to the Minister. The Grantee accepts and agrees that, upon notice by the Administrator to the Grantee to that effect, the Minister shall, ipso facto, from the date specified in such notice, be substituted in all rights and obligations of the Administrator under this Agreement as if the Minister had been an original party to this Agreement, without any further action or formality required on the part of any party, and from such date the Administrator shall cease to have any rights or obligations as a party under this Agreement. 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. INDIA By /s/ N. Valluri Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION as Administrator of the Netherlands Grant By /s/ Heinz Vergin Page 5 Acting Regional Vice President South Asia SCHEDULE Withdrawal of the Proceeds of the Netherlands Grant 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Netherlands Grant, the allocation of the amounts of the Netherlands Grant to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Netherlands Grant Allocated (Ex- % of pressed in Dutch Expenditures Category Guilder Equivalent) to be Financed (1) Equipment and f.300,000 100% of foreign materials expenditures, 100% of local expenditures (ex-factory cost) and 80% of local expen- ditures for other item procured locally (2) Consultants' f.500,000 100% services (3) Unallocated _________ TOTAL f.800,000 ========= 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 Grantee for goods or services supplied from the territory of any country other than that of the Grantee; and (b) the term "local expenditures" means expenditures in the currency of the Grantee or for goods or services supplied from the territory of the Grantee. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expenditures prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of f.75,000, may be made on account of payments made for expenditures before that date but after June 1, 1994. 4. The Administrator may require withdrawals from the Netherlands Grant Account to be made on the basis of statements of expenditure for expenditures for goods and services under contracts not exceeding $50,000 equivalent, under such terms and conditions as the Administrator shall specify by notice to the Grantee.