Ecuador - Education Project : Credit 0124 - Credit Agreement - Conformed

CREDIT NUMBER 124 EC Development Credit Agreement (Education Project) BETWEEN REPUBLIC OF ECUADOR AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JUNE 27, 1968 CREDIT NUMBER 124 EC Development Credit Agreement (Education Project) BETWEEN REPUBLIC OF ECUADOR AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JUNE 27, 1968 AGREEMENT, dated June 27, 1968, between the RE- PUBIAC OF ECrADOR (hereinafter called the Borrower) and INTERNATIONAT. DEVELOPMENT ASsOCIATION (hereinafter called the Association). ARTICLE I Credit Regulations SECTION 1.01. The parties to this Agreement accept all the provisions of Development Credit Regulations No. 1 of the Association dated June 1, 1961 as amended February 9, 1967 (said Development Credit Regulations Ne. 1 being hereinafter called the Regulations), with the same force and effect as if they were fully set forth herein. ARTICLE II The Credit SECTION 2.01. The Association agrees to make available to the Borrower, on the terms and conditions in the De- velopment Credit Agreement set forth or referred to, a development credit in an amount in various currencies equivalent to five million one-hundred thousand dollars ($5, 100,000). SECTION 2.02. The Association shall open a Credit Ac- count in the name of the Borrower and shall credit to such Credit Account the amount of the Credit. The amount of the Credit may be withdrawn from the Credit Account as provided in, and subject to the rights of cancellation and suspension set forth in, the Development Credit Agreement. SECTION 2.03. Except as the Association shall otherwise agree, the Borrower shall be entitled, subject to the pro- visions of the Development Credit Agreement, to withdraw from the Credit Account: (a) such amounts as shall have been expended for the reasonable foreign-currency cost of goods required for carrying out the Project; and (b) such amounts as shall be the equivalent of a per- centage or percentages as may be est.blished from time to time by agreement between the Borrower and the Association of such amounts as shall have been expended for the reasonable cost of goods required for carrying out the Project and not included in the foregoing subparagraph (a) ; or (c) if the Association shall so agree, such amounts as shall be required by the Borrower to meet payments uder the foregoiiig subparagraph (a) provided, however, that withdrawals shall not be made on account of expenditures prior to the date of this Agree- ment. SECTION 2.04. The Borrower shall pay to the Associa- tion a service charge at the rate of three-fourths of one per cent (% of 1%/') per annum on the principal amount of the Credit withdrawn and outstanding from time to time. The Borrower shall also pay to the Association a service charge at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount outstanding of any special com- mitment entered into by the Association pursuant to Section 4.02 of the Regulations. SECTION 2.05. Service charges shall be payable semi- annually on February 1 and August 1 in each year. SECTIoN 2.06. The Borrower shall repay the principal of the Credit withdrawn from the Credit Account in semi- annual installments payable on each February 1 and August 1 commencing August 1, 1978 and ending February 1, 2018, each installment to and including the installment I payable on February 1, 1988, to be one-half of one per cent (/, of 1%) of such principal amount, and each install- ment thereafter to be one and one-half per cent (11/2%) of such principal amount. ARTICLE III Use of Proceeds of the Credit SE:CTIoN 3.01. The Borrower chall cause the proceeds of the Credit to bo applied ii accordance with the peovisions of this Agreement exclusively to financing the cost of goods required to carry out the Project described in the Schedule to this Agreement. The specific allocation of the proceeds of the Credit, and the methods and procedures for procurement of the goods to be financed out of such proceeds, shall be determined by agreement between the Borrower and the Association, subject to modification by further agreement between them. SECTIoN 3.02. Except as the Borrower and the Associa- tion shall otherwise agree, the Borrower shall cause all goods financed out of the proceeds of the Credit to be used in the territories of the Borrower exclusively in the carry- ing out of the Project. The specific schools included in the Project and the locations thereof shall be determined by agreement between the Borrower and the Association, sub- ject to modification by further agreement b-tween them. ARTICLE IV Particular Covenants SECTION 4.01. (a) The Borrower shall carry out the Project or cause the Project to be carried out with due diligence and efficiency, in conformity with sound technical, administrative and financial standards and with due regard to economy. (b) The Borrower shall cause the schools included in the Project to be operated so as to promote the educational 6 objectives of the Borrower and to be provided with quali- fled teachers and administrators in adequate numbers. (c) The Borrower shall cause the buildings and equip- ment of the schools included in the Project to be adequately maintained and shall cause all necessary renewals and re- pairs to be made thereto. (d) To assist in carrying out the Project, the Borrower shall establish and maintain, upon terms and conditions satisfactory to the Association, an appropriately staffed opecial unit within its Ministry of Education, headed by a Project Director to be responsible for the proper execution and supervision of the Project, assisted by a Project Architect/Engineer, an educator, and an accountant, all such personnel to be acceptable to the Association, and to be employed on terms and conditions satisfactory to the Borrower and the Association. (e) un the carrying out of the Project, the Borrower shall employ or cause to be employed qualified and experi- enced architectural consultants acceptable to the Borrower and the Association, to an extent and upon terms and con- ditions satisfactory to the Borrower and the Association. (f) Except as the Association shall otherwise agree, the Borrower shall cause the Project to be carried out by contractors acceptable to the Borrower and the Associa- tion employed under contracts satisfactory to the Borrower and the Association. (g) The Borrower shall obtain the agreement of the Association on the plans, specifications, contracts and work schedules for the construction work included in the Project rud on the master lists of instructional equipment and furniture included therein, and on any subsequent material modifications thereof. Tpon request from time to time by the Association the Borrower shall promptly furnish to the Association all relevant information on the foregoing in such detail as the Association shall reasonably request. 7 SECTIOx 4.02. The Borrower shall at all times make or cause to be made available immediately as needed all funds, facilities, services and other resources, including land, re- quired for the carrying out of the Project and for the opera- tion and maintenance of the schools and facilities included in the Project. SECTTON 4.03. The Borrower shall maintain or cause to be maintained records adequate to identify the goods financed out of the proceeds of the Credit, to disclose the use thereof in the Project, to record the progress of the Project (including the cost thereof) and to reflect in accord- ance with consistently maintained sound accounting prac- tices the operations and financial conditions, in respect of the Project, of the ministries or departments of the Bor- rower responsible for the carrying out of the Project or any part thereof ; shall enable the Association's representa- tives to inspect the Project, the goods and any relevant records and documents; and shall furnish or cause to be furnished to the Association all such information as the Association shall reasonably request concerning the ex- penditure of the proceeds of the Credit, the Project, the goods, the operation of the educational system of the Bor- rower and programs for educational development in its territories and the administration, operations and financial condition, in respect of the Project, of the ministries or de- partments of the Borrower responsible for the carrying out of the Project or any part thereof, and of the schools included in the Project. SECTION 4.04. (a) The Borrower and the Association shall cooperate fully to ensure that the purposes of the Credit will be accomplished. To that end, each of them shall furnish to the other all such information as it shall reasonably request with regard to the general status of the Credit. On the part of the Borrower, such information shall include information with respect to financial and eco- 8 nomic conditions in the territories of the Borrower and the international balance of payments position of the Borrower. (b) The Borrower and the Association shall from time to time exchange views through their representatives with re- gard to matters relating to the purposes of the Credit and the maintenance of the service thereof. The Borrower shall promptly inform the Association of any condition which interferes with, or threatens to interfere with, the accom- plishment of the purposes of the Credit or the maintenance of the service thereof. (c) The Borrower shall afford all reasonable opportunity for accredited representatives of the Association to visit any part of the territories of the Borrower for purposes related to the Credit. SEcTox 4.03. (a) The Borrower shall take out and main- tain with responsible insurers, or make other provisions satisfactory to the Association for, insurance of the build- ings and facilities included in the Project against such risks and in such amount as shall be consistent with sound practice. (b) Without limiting the generality of the foregoing, the Borrower undertakes to insure the imported goods to be financed out of the proceeds of the Credit against marine, transit and other hazards incident to acquisition, trans- portation and delivery thereof to the places of use or in- stallation, aid for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. SECTIOx 4.06. The principal of, and service charges on, the Credit shall be paid without deduction for, and free from, any taxes, and free from all restrictions, imposed under the laws of the Borrower or laws in effect in its territories. I0 0 SEcTIo 4.07, The Development Credit Agreement shall be free from any taxes that shall be imposed under the laws of the Borrower or laws in effect in its territories on or in coiniection with the execution, delivery or registration thereof. SHCMzON 4.08. (a) Except as the Borrower awd the Asso- ciation shall otherwise agree, the Borrower shall promptly take all necessary steps in order to acquire, by a date or dates to be agreed upon with the Association, the owner- 'hip of all land not already acquired by the Borrower which shall be required for the carrying out of the Project. (b) Except as the Borrower and the Association shall otherwise agree, the Borrower shall not award any con- struction contract concerning any of the schools inci(lued in the Project until it shall fully own all the land required for such construction. SECTION 4.09. Except as the Association shall otherwise agree, the Borrower shall employ or cause to be employed six qualified and experienced advisors, acceptable to the Association on terms and conditions satisfactory to the Borrower and the Association, to assist the Borrower in the training of the administrators and staff of the schools included in the Project, and in the implementation of the in-service and preservice of the Borrower's first cycle sec- ondary education teacher-training program. ARTICLE V Remedies of the Association SECTION 5.01. (i) If any event specified in paragraph (a) or paragraph (c) of Section 5.02 of the Regulations shall occur and shall continue for a period of thirty days, or (ii) if any event specified in paragraph (b) of Section 5.02 of the Regulations shall occur and shall co-.tinue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower, then at any subsequent 10 time during the -ontinuance thereof the Association, at its option, may declare the principal of the Credit then out- standing to be due and payable immediately, and upon any such declaration such principal shall become due and pay- able immediately, anything in this Development Credit Agreement to the contrary notwithstanding. ARTICLE VI Miscellaneous; Termination SECTION 6.01. The Closing Date shall be December 3- 1972, or such other date as may from time to time t agreed between the Borrower and ' Association. SECTION 6.02. If this AgrGeent shall not have come into force and effect by August 30, 1968, this Agreement and all obligations of the parties hereunder shall terminate, unless the Association, after consideration of the reasons for the delay, establishes a later (late for purpose of this Section. The Association shall promptly notify the Borrower of such Jater date. SEC.TIox 6.03. The following addresses are specified for the purposes of Section 7.01 of the Regulations: For the Borrower: Ministry of Education Quito, Ecuador Alternative address for cables and radiograms: Mineducation Quito, Ecuador For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America 11 Alternative address for cables and radiograms: Indevas Washington, D.C. SECTION 6.04. The Minister of Education of the Bor- rower is designated for the purposes of Section 7.03 of the Regulations. IN WITNESS WHEREOF, the parties hereto acting through their representatives thereunto duly authorized, have caused this Development Credit Agreement to be signed in their respective names and delivered in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF ECUADOR By s/ CAnLos MANTILLA ORTEGA Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By s/ J. BURKE KNAPP Vice President 12 SCHEDULE Description of the Project The Project consists of : A. The construction, furnishing and equipment of: (a) extensions to four existing agricultural secondary schools including boarding facilities and staff housing; (b) one new and extensions to three technical secondary schools including boarding facilities; (c) four new and extensions to one teacher-training sec- ondary schools including boarding facilities; (d) eleven new and extensions to four general secondary schools. B. The establishment of a special unit to be responsible for the execution of the Project. C. The Project further includes technical assistance of about 24 man-years required for the efficient operation of the schools listed under A above. The Project is expected to be completed by the middle of 1972.