Tunisia - Fisheries Project : Credit 0270 - Project Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 270 TUN Project Agreement (Fisheries Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND BANQUE NATIONALE DE TUNISIE DATED SEPTEMBER 24, 1971 CONFORMED COPY CREDIT NUMBER 270 TUN Project Agreement (Fisheries Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND BANQUE NATIONALE DE TUNISIE DATED SEPTEMBER 24, 1971 AGREEMENT, dated September 24, 1971, between INTER- NATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and BANQUE NATIONALE DE TUNISIE (herein- after called BNT). WHEREAS by a Development Credit Agreement of even date herewith between the Republic of Tunisia (hereinafter called the Borrower) and the Association (hereinafter re- ferred to as the Development Credit Agreement), the Asso- ciation has agreed to make available to the Borrower an amount in various currencies equivalent to two million dol- lars ($2,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that BNT agrees to undertake such obligations toward the Association as hereinafter set forth; WHEREAS by a subsidiary loan agreement to be entered into between the Borrower and BNT an amount equivalent to one million eight hundred and thirty thousand dollars ($1,830,000) out of the proceeds of the Credit, provided for under the Development Credit Agreement will be made available to BNT on the terms and conditions therein set forth; and WHEREAS BNT, in consideration of the Association's en- tering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations herein- after set forth; Now THEREFORE the parties hereto hereby agree as follows: 4 ARTICLE I Definitions SECTION 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms de- fined in the Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Proin SECTION 2.01. BNT shall carry out Parts A and C of the Project described in Schedule 2 to the Development Credit Agreement with due diligence and efficiency and in conformity with sound administrative, financial and fish- eries credit practices. SECTION 2.02. BNT shall duly perform all its obligations under the Subsidiary Loan Agreement. Except as the Asso- ciation shall otherwise agree, BNT shall not take or con- cur in any action which would have the effect of amending, abrogating, assigning or waiving the Subsidiary Loan Agreement or any provision thereof. SECTION 2.03. (a) BNT undertakes to insure, or make adequate provision for the insurance of the imported vehi- cles to be financed out of the proceeds of the Credit relent to it by the Borrower against hazards incident to the acqui- sition, transportation and delivery thereof to the place of use and for such insurance any indemnity shall be repay- able in a currency freely usable by BNT to replace or repair such vehicles. (b) Except as the Association may otherwise agree BNT shall cause all vehicles and services financed out of the proceeds of the Credit relent to it by the Borrower to be used exclusively for the Project. 5 SECTIoN 2.04. BNT shall take out and maintain with re- sponsible insurers insurance against such risks and in such amounts as shall be consistent with sound practice. SECTION 2.05. (a) Prior to initiating the lending pro- gram under the Project BNT shall review the outstanding fisheries loans administered through FOSEP and which are fully guaranteed by the Borrower and shall do its best efforts to improve the general status of the said loans. (b) In particular BNT shall: (i) scrutinize the existing system of securities; (ii) take additional guarantees whenever they are available; (iii) ensure that fishing boats are adequately insured by sub-borrowers during the duration of the sub-loan; and (iv) introduce repayment methods substantially sim- ilar to the methods set forth in Part B of Sched- ule 1 to this Agreement. SECTION 2.06. BNT shall make sub-loans according to the lending policy set forth in Schedule 1 to this Agreement and in such amounts as shall be required to purchase fish- ing boats and fishing gear included in Part A of the Project, including inter alia the following terms and conditions: (a) except as BNT and the Association shall otherwise agree, a sub-loan (i) shall bear interest at a rate not less than six per cent (6%) per annum, (ii) shall have a maximum term of eight years including a three-month grace period, (iii) shall not exceed seventy five per cent (75%) of the investment cost of a fully equipped motorized fishing boat and (iv) shall be repaid in installments as set forth in Schedule 1 to this Agreement; (b) each sub-loan agreement between BNT and a sub- borrower shall become effective only upon the ful- fillment of the following conditions: 6 (i) the sub-borrower shall have regularly attended a program of training administered by FPD as set forth in Schedule 4 to the Development Credit Agreement; (ii) the sub-borrower shall have made a minimum down-payment on the fishing boat price equal to ten per cent (10%) of the investment cost of a fully equipped motorized fishing boat; and (iii) the Borrower shall have made available in ad- vance to BNT: (A) a grant equal to fifteen per cent (15%) and (B) a supplementary loan, under terms and conditions consistent with the terms and conditions set forth in the Subsid- iary Loan Agreement, equal to five per cent (5%) of the investment cost of a fully equipped motorized fishing boat; (c) except as BNT and the Association shall otherwise agree, each fully equipped fishing boat financed out of the proceeds of a sub-loan shall serve as collateral to secure the said sub-loan; and (d) except as BNT and the Association shall otherwise agree, each sub-borrower shall take out and maintain for the benefit of BNT, with insurers acceptable to BNT, an insurance policy covering his fully equipped fishing boat against such risks as shall be consistent with sound practice and in such amounts as shall be required to meet his outstanding indebtedness (prin- cipal, interests and accessory costs) to BNT under the Project. SECTION 2.07. BNT shall enter into an agreement satis- factory to the Association with the Borrower whereby FPD shall carry out technical appraisal of all fisheries sub-loan applications under the Project and subsequent technical supervision of use and maintenance of fishing boats and gear financed by the sub-loans under the Project. 7 ARTICLE III Management and Operations of BNT SECTION 3.01. (a) BNT shall at all times employ quali- fied and experienced personnel in all of its management and clerical positions for the purposes of the Project. (b) Without limitation upon the generality of the fore- going, BNT shall ensure (i) that a senior officer of its head office be entrusted with the responsibility for the fisheries lending program under the Project and (ii) that one loan officer-supervisor, of at least an assistant branch manager competence, be assigned, for each tranche of one hundred active sub-loans, on a full-time basis, to the Project during its duration and be provided with appropriate motorized means of transportation. Notwithstanding the foregoing assignment of personnel, at any period during the execu- tion of the Project, there shall be at least two loan officers- supervisors assigned to the Project. SECTION 3.02. (a) BNT shall maintain records adequate to reflect in accordance with consistently maintained sound accounting practices its operations and financial condition. (b) Without limitation upon the generality of the fore- going, BNT shall maintain separate records and accounts of sub-loans made under the Project. SECTION 3.03. BNT shall: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with sound auditing principles con- sistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than four months after the end of each such year, (A) certified copies of its finan- cial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and 8 in such detail as the Association shall have reasonably re- quested; and (iii) furnish to the Association such other information concerning the accounts and financial state- ments of BNT and the audit thereof as the Association shall from time to time reasonably request. SECTION 3.04. BNT shall furnish to the Association all such information as the Association shall reasonably re- quest concerning (i) the general status of the outstanding sub-loans and (ii) the activities of the personnel referred to in Section 3.01(b) of this Agreement. ARTICLE IV Consultation, Information and Inspection SECTION 4.01. The Association and BNT shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, the Association and BNT shall from time to time, at the request of either party, exchange views through their representatives with regard to the per- formance of their respective obligations under this Agree- ment, the administration, operations and financial condition of BNT and other matters relating to the purpose of the Credit. SECTION 4.02. The Association and BNT shall promptly inform each other of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Credit, the performance by either of them of its obligations under this Agreement or the performance of the Borrower and BNT of their respective obligations under the Subsidiary Loan Agreement. SECTION 4.03. BNT shall enable the Association's rep- resentatives to visit headquarters and branches of BNT and inspect any relevant records and documents. 9 ARTICLE V Effective Date; Termination; Cancellation and Suspension SECTION 5.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. SECTION 5.02. (a) This Agreement and all obligations of the Association and of BNT thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agree- ment shall terminate in accordance with its terms; or (ii) a date sixteen years after the date of this Agree- ment. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify BNT of this event and, upon the giving of such notice, this Agreement and all obligations of the parties thereunder shall forthwith terminate. SECTION 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any can- cellation or suspension under the Development Credit Agreement. ARTICLE VI Miscellaneous Provisions SECTION 6.01. Any notice or request required or per- mitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agree- ment shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall be 10 delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address hereinafter specified or at such other address as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Indevas Washington, D.C. For BNT: Banque Nationale de Tunisie - -7 19 Avenue de Paris Tunis, Tunisia Cable address: Bankagric Tunis SECTION 6.02. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Agreement on behalf of BNT may be taken or executed by its President Directeur General or such other person or persons as BNT shall designate in writing. SECTION 6.03. BNT shall furnish to the Association suf- ficient evidence of the authority and the authenticated spec- imen signature of the person or persons who will, on be- 11 half of BNT, take any action or execute any documents required or permitted to be taken or executed by BNT pur- suant to any of the provisions of this Agreement. SECTION 6.04. This Agreement may be executed in sev- eral counterparts, each of which shall be an original, and all collectively but one instrument. IN WITNESs WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this 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. INTERNATIONAL DEVELOPMENT AssoCIATION By /s/ J. BURKE KNAPP Vice President BANQUE NATIONALE DE TJNISIE By /s/ SLABEDDINE EL GOULLI Authorized Representative 12 SCHEDULE 1 Lending Policy of BNT for Fisheries Operations (A) Methods of processing of sub-loan applications After sub-loan applications have been appraised on tech- nical grounds by FDP, applications which are technically sound will be forwarded by DSP to BNT, which will con- duct financial appraisals. Special attention will be paid by BNT to the estimation of expected operating costs and values of catches, taking into account the local fishing con- ditions, the aptitudes and the level of indebtedness of sub- borrowers, and fish prices paid at home bases of sub- borrowers. The fisheries loan appraisers and supervisors of BNT will make the financial evaluation of sub-loans, which will include calculations of returns on proposed in- vestments and examination of applicants' repayment abil- ity. The senior officer in charge of the fisheries lending program will review appraisal reports and make recom- mendations to BNT management, which will be responsible for final sub-loan approval or rejection. (B) Methods of repayment of sub-loans Sub-borrowers will repay each year a uniform amount of the sub-loan (principal and interest) in monthly install- ments. They will open a deposit account at a BNT branch and make, to the extent possible, monthly payments of about ten per cent (10%) of the annual repayment amount. An adjustment of sub-loan accounts will take place at least once during a twelve-month repayment period. The loan appraisers and supervisors of BNT will supervise repay- ments closely by making frequent field visits. If monthly payments do not take place as scheduled, BNT will take all necessary steps to enforce promptly the system of secu- rities available to it.